Prathiba M. Singh, J.

1. A collaboration agreement was entered into on 30th April, 2012 between the Appellant/Mrs. Rajinder Bali (hereinafter 'owner') and the Respondent/Plaintiff (hereinafter 'builder'). The collaboration agreement was in respect of property bearing no. D-49 situated at Greater Kailash, Enclave-II, New Delhi measuring 408.33 sq. yds (hereinafter, 'suit property').

2. The relevant clauses of the Collaboration agreement are set out herein below :

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2. That the Builder shall demolish the existing structure on the said plot of land and develop, construct and build a building consisting of Basement, Stilt, Ground Floor, First Floor, Second Floor and Third Floor with terrace, at its own costs and expense, after getting the building plans and architectural drawings sanctioned from the authorities concerned.

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11. That the responsibility of the entire amount required or payable for carrying out construction, development, completion of the said building including the charges and fees of the architect for preparation of the plans and all the other statutory and other fees and/or demands shall be applied wholly to the account of Builder.

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21. The Owner shall bear and pay all outstanding charges and dues of whatsoever nature payable in respect of the said property including house tax, property tax, water and electricity charges, and other dues and demands till the date of handing over the vacant possession of the said property to the Builder and thereafter the same shall be paid by the Owner and the Builder in respect of their respective allocations after completion and handing over of the said building/ property. However, the water and electricity charges and any other charges from the date of handing over the vacant possession and during construction period and till the time the possession is handed over back to the Owner shall be paid and borne by the Builder.

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29. That the owner and the Builder shall themselves be responsible for all Income Tax and capital gain tax liability arising out of the sale of their respective allocations' in the proposed building. …………………”

3. As per the said agreement, the entire basement, Ground Floor, Second Floor, Third Floor, terrace over and above the Third Floor, along with stilt area, servant quarter, common area, etc. was to fall in the share of the owner. The entire First Floor, a servant quarter along with use of common area was to fall in the share of builder. The owner would therefore have 77.5% of the undivided indivisible ownership rights in the plot and the remaining 22.5% was to vest with the builder. In addition to the ownership of the First Floor, the builder was to pay to the owner a sum of Rs. 2.25 crores as consideration against the rights in the property.

4. The owner handed over vacant possession of the property to the builder, on 13th October, 2012. Eighteen months’ period was stipulated for completing the building. The admitted position on record is that the building was completed and the First Floor, which fell in the share of the builder, was sold to the builder vide sale deed dated 15th January, 2014. The owner cooperated in execution of the final sale documents. Possession of the remaining floors was also given to the owner and accounts were settled in January 2014.

5. In October 2014, an invoice is claimed to have been raised by the builder to the owner seeking reimbursement of VAT charges payable towards construction of the building. It is alleged that the owner did not make the payment. Accordingly, the builder got legal notice dated 2nd May, 2016 issued to the owner. Despite receipt of the notice, since no response was forthcoming, the suit was filed under Order XXXVII of the Code of Civil Procedure, 1908 (hereinafter, 'CPC') praying for a decree for a sum of Rs.8,57,222/- along with pendente lite and future interest. It is the case of the builder that he has deposited a total Value Added Tax (hereinafter 'VAT') amount of Rs.91,83,