IN THE HIGH COURT OF DELHI AT NEW DELHI
Prateek Jalan, J.
M/s Ashok Sehrawat And Co. – Appellant
Versus
The Commissioner, Municipal Corporation of Delhi & Anr. – Respondents
W.P.(C) 8169 of 2023 and W.P.(C) 8215 of 2023
Decided On : 21-07-2023
MCD - Contractual Dispute - ABL International Limited vs. Export Credit Guarantee Corporation of India Limited (2004) 3 SCC 553, State of Kerala vs. M.K. Jose (2015) 9 SCC 433, Union of India vs. Puna Hinda (2021) 10 SCC 690 - The court dismissed the petitions under Article 226 of the Constitution, stating that the appropriate remedy for the petitioners is through civil proceedings.
Fact of the Case:
The petitioners were contractors for improvement/development of existing rooms of MCD Store at Tilak Nagar and for providing and fixing of M.S. Sign Board and CC Repair in various locations. They filed petitions under Article 226 of the Constitution seeking relief for non-approval of final bills by the MCD.
Finding of the Court:
The court found that the disputes raised by the petitioners would have to be determined factually, including the question of limitation, and the effect of the document dated 25.02.2022 relied upon by the petitioners. The court dismissed the petitions, stating that the appropriate remedy for the petitioners is through civil proceedings.
Issues: The main issue was whether the petitions under Article 226 of the Constitution were the appropriate remedy for the petitioners' claims against the MCD for non-approval of final bills.
Ratio Decidendi: The court cited legal principles from ABL International Limited vs. Export Credit Guarantee Corporation of India Limited, State of Kerala vs. M.K. Jose, and Union of India vs. Puna Hinda to support its decision to dismiss the petitions and relegate the petitioners to their civil remedies.
Final Decision: The petitions were dismissed, with liberty to the petitioners to agitate their claims by way of appropriate civil proceedings in accordance with law. The rights and contentions of both sides in such civil proceedings stand expressly reserved.
JUDGMENT
Prateek Jalan, J. (Oral)
1. The petitioners have filed these petitions under Article 226 of the Constitution for the following reliefs; In W.P.(C) 8169/2023:
"a) Direct the Respondent No 2 to raise the bills of the contract work bearing W.O. No EE(M-WZ)-III(EE XV)/SYS/2017-2018/301 and thereafter release payment of the Petitioner along with 24 % P.a. interest on the said payment from its due date to the date of its actual realization
b) Direct the Respondent no. 1 to take penal action over the Respondent no 2 for said delay in raising of bills and payment of the Petitioner
c) Pass any other or further order/s as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
In W.P.(C) 8215/2023:
"a) Direct the Respondent No 2 to raise the bills of the contract work bearing W.O. No EE(M-WZ)-III(EE XV)/SYS/2017-2018/217 and thereafter release payment of the Petitioner along with 24 % P.a. interest on the said payment from its due date to the date of its actual realization
b) Direct the Respondent no. 1 to take penal action over the Respondent no 2 for said delay in raising of bills and payment of the Petitioner
c) Pass any other or further order/s as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
2. The case of the petitioners is that they were both awarded contracts by the respondent-Municipal Corporation of Delhi [hereinafter referred to as "MCD"] for improvement/development of existing rooms of MCD Store at Tilak Nagar [in WP(C) 8169/2023] and for providing and fixing of M.S. Sign Board and CC Repair in Ajay Enclave, Meenakshi Garden, Ashok Nagar, Guru Nanak Nagar, Prithvi Park, Santgarh, Old Shahpura and in various blocks of Tilak Nagar [in WP(C) 8215/2023]. The terms of the contracts required the contractors to submit their running account/final bill with measurement, after which the MCD was required to approve the final bills.
3. The grievance of the petitioners is that the MCD has not approved the final bills despite the certification of the MCD's own engineer that work has been completed at the sites. Mr. Deepak Kumar, learned counsel for the petitioners, draws my attention to certificates dated 25.02.2022 [In both the writ petitions. ], which so indicate.
4. Mr. Siddhant Nath, learned counsel for the MCD, raises a preliminary objection that these are contractual disputes which cannot be adjudicated in a writ petition. He submits that several factual issues arise for adjudication, including as to limitation. Mr. Nath points out that, according to the petitioners, they had completed the work within the stipulated period of two months, i.e. in the year 2018 itself. According to Mr. Nath, therefore, their claims would now be barred by limitation.
5. Mr. Kumar, on the other hand, submits that the MCD has itself, by the letters dated 25.02.2022, acknowledged the completion of the work. He further draws my attention to the judgment of a co-ordinate Bench in Garg Construction Company vs. North Delhi Municipal Corporation, Judgment dated 25.01.2023 in W.P.(C) 116/2021 and connected petitions, wherein the MCD was directed to release payments towards contractual dues.
6. Having heard learned counsel for the parties, I am of the view that the petitioners would have to be relegated to their civil remedies in the present cases. Although there is no absolute bar on adjudication of contractual disputes in a writ petition, the circumstances in which such a writ petition can be entertained have been elucidated by the Supreme Court in several judgments, including inter alia the following:
(a) In ABL International Limited vs. Export Credit Guarantee Corporation of India Limited, (2004) 3 SCC 553, the Supreme Court summarised the principles thus:
"27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition:
(a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising
The power to issue prerogative writs under Article 226 of the Constitution is not limited by any other provisions of the Constitution. The High Court has the discretion to entertain or not to enterta....
The High Court has the jurisdiction to entertain a writ petition involving disputed questions of fact in contractual matters with the State and its instrumentalities.
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