Indefinite payment conditions in contracts are unreasonable and violate the principle of contractual consideration, requiring clarity and a specified timeline.

JUDGMENT

Manmohan, J. (Oral)--Present appeal has been filed challenging order dated 7th January, 2021 passed by learned District Judge (Commercial court-05), Central Delhi, Tis Hazari in CS(COMM) 683/2020, whereby the respondent's application under Order XII Rule 6 has been allowed and the suit has been decreed against the appellant.

2. Briefly stated, the facts of the present case are that Respondent-Plaintiff was awarded five work orders on 1/4/2016 and it completed the same within stipulated time, to the satisfaction of the appellant. The final bills for all work orders amounting to Rs.38,34,799/- were approved by the appellant. However, the payment was not released within prescribed time. Thereafter, the respondent-plaintiff sent a legal notice to the appellant to which the appellant replied stating that the payments would be made after the amount is released by the SDM/Delhi Government. The respondent-plaintiff then filed the suit for recovery before the District Court.

3. Appellant contested the suit and admitted its liability to pay the amount of passed bills but stated that work orders were placed at the request of SDM/Delhi Govt. and due to non receipt of payment from them, the payment to the respondent-plaintiff could not be released. During the pendency of the suit, respondent-plaintiff had made an offer to the appellant to pay the principal amount by 31st December, 2020 upon which the interest and costs would be waived off. However, the appellant refused the said offer and filed an application under Order VII Rule 11. Subsequently, the respondent-plaintiff filed an application under Order XII Rule 6 in which the impugned order has been passed.

4. Learned senior counsel for the appellant submits that learned District Judge failed to appreciate that the relief sought for by the respondent under the garb of application under Order XII Rule 6 CPC was beyond the scope of the terms and conditions of the contract.

5. He states that learned District Judge failed to appreciate that the work orders were placed at the request of SDM/Delhi Government and due to non-receipt of payment from them, the payment to the contractor cannot be released.

6. He further states that there was a condition in the NIT that the payment of the Bills will depend upon availability of funds in a particular head of account and even the payments will be made on queue basis i.e. first and past liabilities to be given priorities and after those clearance, the payment to the contractor will be released after the demand of the bills is received from the concerned SDM and that no interest shall be paid on the bill amount.

7. He emphasizes that there are judgments passed by the learned Single Judge of this Court wherein the queue basis payment had been approved. In support of his contention, he relies upon the judgments of the learned Single Judges in RFA 786/2016, RFA 818/2017 and RFA 835/2017. According to him, these judgments take a contrary view to the one taken in RFA 160/2017 decided on 22nd March, 2018 by a different learned Single Judge of this Court.

8. This Court is of the view that the present appeal is liable to be dismissed inasmuch as a learned Single Judge of this Court in `North Delhi Municipal Corporation Vs. Vipin Gupta', RFA 160/2017 has dealt with all the grounds urged herein and the same are no longer res integra. It is relevant to point out that the appellant herein had preferred an SLP against the aforesaid order of the learned Single Judge, which came to be dismissed vide order dated 03rd January, 2019.

9. The learned Judge in North Delhi Municipal Corporation Vs. Vipin Gupta