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2025 Supreme(Del) 851

2025 DHC 104
IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBRAMONIUM PRASAD, J.
Cube Construction Engineering Ltd – Plaintiff
Versus
National Building Construction Company – Defendant
CS(COMM) 947 of 2016
Decided On : 07-01-2025
Advocates Appeared :
For the Plaintiff : Mr. Jayant Mehta, Senior Advocate with Ms. Madhu Sweta, Ms. Astha Dhawan and Ms. Tina Aneja, Advocates.
For the Defendant : Mr. Anil K. Airi, Senior Advocate with Mr. Krishan Kumar, Mr. Seemant K. Garg, Mr. Nitin Pal, Ms. Sadhana Sharma, Mr. Mudit Ruhella, Mr. Shayuk Kumar, Advocates

A plaintiff who unconditionally withdraws a suit without permission to refile cannot institute a fresh suit on the same subject matter, per Order XXIII Rule 1(4) of CPC.

Headnote:(A) Code of Civil Procedure, 1908 - Order XXIII Rule 1(4) - Suit for recovery of Rs.8,21,64,607/- dismissed on grounds of prior unconditional withdrawal of a similar suit - Plaintiff alleged hindrances in project execution by Defendant, including lack of timely approvals and wrong construction materials, causing financial losses - The present suit found to be hit by previous withdrawal as a change of cause of action does not suffice unless it functions within permissible legal bounds - Court affirmatively states that it is not empowered to allow the plaintiff to file a fresh suit after an unconditional withdrawal of the previous suit. (Paras 1, 5, 20)

(B) Jurisdiction - The court resolved whether territorial vs subject-matter jurisdiction obfuscates legal rights; highlighted the distinction that objections can be waived under local jurisdiction but must be determined if inherent jurisdiction is lacking. (Para 27)

JUDGMENT :

SUBRAMONIUM PRASAD, J.

1. The present suit is one for recovery of a sum of Rs.8,21,64,607/- along with pendente lite interest of 18% per annum.

2. The facts as stated in the plaint are that the Plaintiff is a company registered under Companies Act, 1956 and is engaged in the business of construction of buildings, roads, bridges, water supply, sewerage and all other civil and engineering construction works. It is stated in the plaint that a Notice Inviting Tender (NIT) was brought out by the Defendant on 16.09.2004 for execution of “Housing Project for Defence Personnel” at Darjipura, Vadodra, Gujarat. The said NIT was for two packages i.e., Package-I and Package-II. It is stated that the Plaintiff had submitted its bid for Package-II which was opened on 04.10.2004. Vide a Letter of Intent (LOI) dated 15.10.2004, the Plaintiff was awarded part of Package-II for construction of dwelling units with ROC framed structure work, including internal electrification, PHE, storm water drainage and rain water harvesting etc. The bid of the Plaintiff was accepted for an amount of Rs.11,16,78,263/. The period for completion of the project was reckoned as 22 months and the date of commencement was 10 days from the date of issuance of LOI and the completion date was 25.08.2006. A formal Contract Agreement was entered into between the parties on 20.12.2004. The said Contract Agreement provides that the Agreement is deemed to be executed at New Delhi and the Courts in Delhi/New Delhi alone will have jurisdiction to deal with matters arising therefrom. It is stated that the Plaintiff mobilized its resources as required in terms of manpower, machinery and material and requisite Bank Guarantee was also submitted by the Plaintiff. It is the case of the Plaintiff that despite issuance of LOI, the Plaintiff was not able to carry out the work as planned because of defaults on the part of the Defendant in issuance of instructions and drawings and also delay on the part of the Defendant in providing the site layout. It is stated that the layout was given by the Defendant on 19.10.2004 and the structural drawings were given on 28.10.2004. It is stated that since the work was to be carried out in a restricted area, there were several other limitations in carrying out the work at the site. The plaint discloses that there were certain disputes regarding price escalation index which was used by the Defendant. It is stated that there was under estimation of the tender value by the Defendant as proper guidelines were not followed. It is stated that there were also several other lapses on the part of the Defendant in giving various approvals and clearances. Paragraph No.11 of the plaint provides the detailed reasons for the delay caused in completion of work and the same is being reproduced as under:

“11. During the execution of work at site, there were various lapses by the Defendant in giving approvals and clearances. Due to pending clearances, the execution of work was badly affected causing delay in completion of the project. A perusal of various correspondences proves the lapses/failure on the part of Defendant to expedite the various confirmation/approvals/clearances pending at its end which stalled the timely completion of the work. The major reasons for the delay are narrated below:-

a. While excavation for foundations was being done, obstruction due to water pipeline and drainage pipeline etc. was found for some of the blocks. This was intimated to the Defendant by Plaintiff vide letter dated 14.12.04. However, no immediate action was taken by the Defendant and hence, the excavation and subsequent work for such blocks could not proceed further.

b. That after completion of excavation for some blocks, the Plaintiff was ready to do the concreting work for foundation but was unable to proceed due to want of necessary clearance by Defendant. The clearance was pending due to want of test reports for test piles which should have been completed at the des

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