Delhi District Court
M/S R .K. Goel Abhay Kumar Jain vs Municipal Corporation Of Delhi on 18 April, 2026
IN THE COURT OF SH MUKESH KUMAR GUPTA
DISTRICT JUDGE(COMMERCIAL)-07(CENTRAL)
TIS HAZARI COURTS: DELHI
CS (Comm.) No. 1557/2023
CNR No. DLCT01-017066-2023
(Old case : 20 oldmost cases of Court)
M/s R.K. Goel Abhey Kumar Jain,
Office at C-1/40, Ashok Vihar,
Phase-II, Delhi-110052
Through its Partner
Mr. Nitin Jain.
Email: [email protected].
Mob.9810100221
......Plaintiff
Vs
MUNICIPAL CORPORATION OF DELHI
Through: Its Commissioner,
Dr. SPM Civic Centre,
Minto Road, New Delhi-110002.
Email: [email protected]
...... Defendant
SUIT FOR DECLARATION, PERMANENT INJUNCTION AND
RECOVERY OF RS. 1,41,13,357/-
Date of institution of suit : 02.12.2023
First date before the undersigned : 07.08.2024
Date on which reserved : 10.04.2026
Date of Judgment : 18.04.2026
Appearance(s) : Shri Anurag Kaushik Adv. Ld. Counsels for plaintiff.
Shri Arman Monga, Advocate, Ld. Counsel for the
defendant.
Digitally signed
by MUKESH
MUKESH KUMAR
GUPTA
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 1 of 47
KUMAR Date:
GUPTA 2026.04.18
18:26:52
+0530
JUDGMENT
(A) PRELUDE:
1. By way of present judgment, I shall conscientiously adjudicate
upon plaintiff’s suit for Declaration, Permanent Injunction and Recovery
of Rs.1,41,13,357/- alongwith interest @ 14% per annum pendente-lite
and future from the date of filing of suit till its realization. The plaintiff
has also prayed for costs of the suit against the defendants.
(B) PLAINTIFF'S CASE: -
2) Eschewing Prolix reference to the pleadings, crystalizing the same,
the case of the plaintiff as averred in the plaint is that:
2.1) The plaintiff is a registered partnership firm and has been
doing the construction works in the government departments, particularly
in NCT of Delhi and generally in other part of the India. The present suit
has been filed through one of its authorised partner Sh. Nitin Jain.
2.2) The defendant department is a government body, providing
civic amenities and developing infrastructure for the public at large
within its territorial jurisdiction, which awarded the work order to the
plaintiff in respect of (i) Improvement of Badarpur Village road from
BSES office to Service lane Mathura Road in Ward No. 95-S, Central
Zone (ii) Providing Dust Combating Measures and Augmenting Waste
Management Facilities in different areas of SDMC under Urban
Development Fund (UDF) of the Ministry of Housing and Urban Affairs,
GOI and (iii) Improvement of Shooting Range Road by providing dense
carpet from MB Road to Police Check Post, Haryana Border in Ward
No. 83-S, Central Zone” vide Work Order Bearing No.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 2 of 47
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2026.04.18
18:26:58
+0530
EE(Pr.CENTRAL-II)[EE XXVI]/ SYS /2021-2022/2 dated 08.04.2021
(In short work order no. 2).
2.3) The contractual amount of the work was Rs.1,10,48,772/- and
period of the contract was 03 months from the date of start of work i.e.
08.04.2021 till 08.07.2021. The said work order dated 08.04.2021 was
sent on WhatsApp to the plaintiff on 13.04.2021 and by post on
16.04.221 (received on 17.04.2021). As per service of copy of work
order, the date of start of work was 23.04.2021 and completion is
22.07.2021, however, the defendant considered the date of start as
08.04.2021 and completion as 07.07.2021 in terms of work order which
is incorrect and not tenable.
2.4) Immediately after receipt of work order on whatsApp, the
plaintiff had submitted non-judicial stamp paper of Rs. 50/- alongwith
covering letter dated 15.04.2021 for execution of agreement in the Office
of Executive Engineer on 16.04.221. The plaintiff submitted a certificate
of Sh. Nitin Jain, one of its partner and signatory of this suit vide
covering letter dated 15.04.2021. The plaintiff had sent another letter
dated 15.04.2021 through speed post to the Executive Engineer of the
defendant thereby requesting for providing the job mix formula of BM
and BC in favour of the Cosmo Analytic Lab, C-433, Sector 10, Noida-
201301, UP, for which the defendant accorded the permission for getting
done the same.
2.5) The defendant is well aware that due to the lockdown declared
by the government w.e.f. 17.04.2021, all the construction activities were
stopped till 07.06.2021, therefore the delay in execution of work was due
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 3 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:27:05 +0530
to force majeure and for which the plaintiff is not responsible. However,
the defendant had not recorded the delay from 15.04.2021 to 13.05.2021,
(further extended to 07.06.2021) in execution of work in the hindrance
register or approved the extension of time in terms of clause 5 of GCC
nor intimated the same to the plaintiff.
2.6) The Defendant despite knowing the facts, sent letter dated
08.06.2021 thereby directing the plaintiff to start the work and making
false allegation that despite 3 months have been elapsed and several
requests were made telephonically the plaintiff had not started the work,
which was duly replied to by the plaintiff vide letter dated 10.06.2021
intimating the defendant that due to lockdown the labours have moved to
their native villages and there was a shortage of labours in Delhi. Further,
it was informed by the plaintiff to the defendant that when the job mix
formula from the lab was received and the labours were arranged, the
work was started immediately. However, the defendant instead of
cooperating with the situation of the plaintiff, had issued a show cause
notice in contravention of the spirit of the work and terms of contract
bearing no. D/EE(Pr)-II/CNZ/21-22/55 and D/EE(Pr)-II/CNZ/21-22/56
dated 21.06.2021 under clause 2 and 3 of GCC and letter bearing no.
D/EE(Pr)-II/CNZ/21-22/57 dated 21.06.2021 received on 24.06.2021,
directing the plaintiff to deposit 3% of contractual amount as
performance guarantee and sign the formal agreement within 3 days. The
plaintiff had sent letter dated 02.07.2021 by speed post thereby stating
that the plaintiff visited the office of Executive Engineer for signing of
the agreement but was told by the concerned officer that agreement is not
available.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 4 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:27:12 +0530
2.7) The plaintiff has received a letter dated 29.10.2021 in which the
defendant had extended the time upto 30.11.2021. Further, the defendant
after verifying the measurement jointly and recording the same in the
measurement books had passed the 1st R A Bill in two parts i.e., amount
of Rs. 97,58,770 and Rs. 12,78,507/- on 19.01.2022. The defendant had
also passed the 2nd RA Bill of amount Rs. 11,03,600/- on 20.06.2022.
2.8) On 25.10.2022, the Executive Engineer of the Defendant had
sent a letter to the plaintiff to rectify the defects and accordingly, the
plaintiff has sent the reply to the said letter on 28.10.2022 stating the
reason of delay caused in executing the work alongwith 12 numbers of
photographs showing damaged portion alongwith list of documents.
2.9) The plaintiff had also sent 10 CA bill of Rs. 2,89,750/- as well
as several letters to the defendant stating that due to the damages done by
DJB, local public and logging of water at the site where the work was
executed, the plaintiff was forced to rectify the same and as such
requested to defendant to release the amount of 10 CA with interest
@18% p.a.2.10) The plaintiff has sent letter dated 22.04.2023 intimating that
dilapidated condition of the executed work of road occurred due to the
stagnation of water at road surface, as there is no proper drainage system.
Despite showing the genuine reasons, the plaintiff was shocked to receive
the letter bearing no. D/SE(Pr.)/CNZ-2023-24/102 dated 28.07.2023 from
the defendant thereby imposing Rs.1,10,488/- as compensation for delay
of 25 days and 1% of tendered amount also directing him to deposit the
Digitally signed
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 5 of 47
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:27:18
+0530
same within 7 days.
2.11) The plaintiff has sent legal notice dated 16.08.2023 to the
defendant under section 478 of Delhi Municipal Corporation Act, 1957
vide speed post on 17.08.2023 which was duly served on 18.08.2023.
However, the defendant department neither pay any heed to the same nor
filed any reply to the said legal notice.
2.12) The plaintiff has also sent letter dated 06.10.2023 submitting
bank guarantee of Rs. 5,51,864/- valid up till 04.12.2026 for release of
security deposit for the subject work. Despite considering the letter, the
defendant did not release the security amount till date. Moreso, the
defendant had also retained amount of Rs. 1,41,13,357/- towards passed
bills as well as amount of security deposit against the bank guarantee
submitted by plaintiff and other amounts related to reimbursement of
differential of GST @ 6%, recovery of illegal set off Rs.1,10,488/-
intimated through letter dated 28.07.2023 and also the amount of
damages took place due to prolongation of the contract alongwith interest
imposed at 14% towards the claim filed by the plaintiff.
2.13) The plaintiff has enumerated the details of its claim in para
20 of the plaint as under :
Claim Description Amount (In Rs.)
No.
1. 1st RA bill of XL-VIII-L(i)UDF 92,70,831/-
passed on 19.01.2022
2. 1st RA bill of G-110-3561 passed 12,14,582/-
on 19.01.2022
3. 2nd RA bill of XL-VIII-L(i)UDF 23,600/-
passed on 20.06.2022
Digitally
signed by
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 6 of 47
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2026.04.18
18:27:24
+0530
4. 10CA bill submitted on 10.11.2022 2,89,750/-
5. Security deposit against BG 5,51,864/-
submitted by plaintiff on
06.10.2023
6. Reimbursement of differential 6% Directive Claim
of GST
7. Recovery of illegal set off Declarative Claim
Rs.1,10,488/- intimated through
letter dated 28.07.2023
8. Damages due to prolongation of 6,75,202/-
contract
11048772/90 days x 55 days x 10%
Total 1,20,25,829/-
9. Interest @ 14% per annum on
(a) Claim No. 1 & 2 i.e.
Rs.1,04,85,413/- w.e.f. 19.07.2022
till 30.11.2023 (499 days) =
20,06,879/-
(b) Claim No. 3 i.e. Rs.23,600/-
w/e/f/ 20.01.2023 till 30.11.2023
(314 days) = 2,842/-
(c) Claim No. 4 i.e. Rs. 2,89,750/-
w.e.f. 12.12.2022 till 30.11.2023
(353 days) = 39,231/-
(d) Claim No. 8 i.e. Rs.6,75,202/-
w.e.f. 18.08.2023 till 30.11.2023
(104 days) = 26,934/-
(e) Claim No. 5 i.e. Rs.5,51,864/-
w.e.f. 06.10.2023 till 30.11.2023
(55 days) = 11,642/-
10. Cost As actual
G. Total 1,41,13,357/-
2.14) Hence, the present suit for declaration, consequent injunction
and recovery with interest and costs.
3. The plaintiff also preferred an application under Section 151 CPC
read with Section 12-A of the Commercial Courts Act, 2015 seeking
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 7 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:27:31 +0530
exemption from statutory Pre-Institution Mediation Settlement which
was allowed by the Court vide its order dated 09.12.2024. However, the
application under Order XXXIX Rule 1 and 2 CPC seeking interim relief
was declined.
(C) DEFENDANT’S CASE:-
4. On receipt of summons for settlement of issues, the defendants
contested the suit by filing a detailed Written Statement thereby taking
various preliminary objections as averred and mentioned herein under: –
4.1) The work in question pertained to strengthening and
resurfacing of roads under the Urban Development Fund (UDF) and was
executed by the erstwhile SDMC. It is stated that the Project Sanctioning
Committee approved funding under UDF vide sanction dated 13.04.2020,
with a funding pattern of 80% by UDF and 20% by SDMC.
4.2) It has further been contended that the erstwhile SDMC had
submitted a comprehensive proposal on 16.10.2019 for “providing dust
combating measures and augmenting waste management facilities in
different areas of SDMC” under the Urban Development Fund (UDF) of
the Ministry of Housing and Urban Affairs (MoHUA), Government of
India. Pursuant thereto, MoHUA issued a Sanction Order bearing No.
2/2/2020-DDVI dated 13.04.2020, whereby proposals amounting to Rs.
42.77 crores were approved under UDF, out of which a sum of Rs. 20
crores was specifically sanctioned for 12 works relating to strengthening
and resurfacing of roads of SDMC under UDF.
4.3) The defendant contends that several communications were
addressed to the UDF authorities seeking ex post facto sanction and
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 8 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:27:36
+0530
release of funds, and asserts that the alleged outstanding bills/dues are
attributable to non-release of funds by UDF.
4.4) It is further contended that the plaintiff has approached the
Court with unclean hands and is in material breach of the Agreement,
thereby disentitling him from any relief. The defendant has also raised an
objection as to maintainability, contending that the plaint does not
disclose any cause of action and is liable to be rejected at the threshold.
5. On merits, all the allegations made in the plaint have been denied
as incorrect. Defendant has submitted that 10 CA bill amounting to
Rs.2,89,750/- is under scrutiny and put to the planning department,
MCD. The defendant has disputed the plaintiff’s claim regarding
wrongful deduction and non-release of the security amount and any
interest thereon. Defendant has further denied that the bank guarantee
No. 083BG01232790001 dated 06.10.2023, valid upto 04.12.2026, was
furnished by the plaintiff on assurance of the concerned officer of
defendant for releasing the security amount and also denied the plaintiff’s
entitlement thereto. The defendant has also denied the plaintiff’s
entitlement to reimbursement of GST, interest, and costs as claimed in
the plaint, contending that such claims are not maintainable under the
terms of the agreement. With regard to delay in execution, the defendant
has disputed the plaintiff’s assertion that the delay was not attributable to
him and denied the plaintiff’s claim for damages on account of
prolongation of the contract. The defendant has further denied the
plaintiff’s claim for interest on the alleged outstanding amounts, as well
as the claim for litigation costs. It is also contended that action under
Clause 2 of the GCC was validly taken and the defendant is justified inCS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 9 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:27:42
+0530
withholding amounts in accordance with the terms of the contract and as
such the plaintiff is not entitled to relief of declaration and
permanent/interim injunction against the defendant. The defendant has,
thus, prayed for dismissal of the suit.
6. A detailed replication to the Written Statement has also been
preferred by the plaintiff reiterating the contents of the plaint and
vehemently denying the contents of the Written Statement. In the
replication, the plaintiff has denied the preliminary objections raised by
the defendant and specifically contended that the documents annexed to
the Written Statement (Annexures A to C) are not addressed to the
plaintiff. The plaintiff has further denied the allegation that he has
approached the Court with unclean hands or has concealed any material
facts, asserting that there is no breach of the Agreement disentitling him
from the reliefs claimed in the plaint. The plaintiff has also denied the
defendant’s objection regarding maintainability of the suit and has
reiterated that the plaint discloses a valid cause of action. It has been
contended that the plaintiff has consistently maintained that the stand
taken by the defendant is incorrect and unsupported by record. The
plaintiff has specifically denied that he is not entitled to the reliefs
claimed and has prayed that the suit be decreed in terms of the prayer
made in the plaint.
(D) CRYSTALISING THE DISPUTE: –
7. On pleadings of the parties and documents placed on record and
after hearing Ld. Counsels for the parties, the following issues were
framed for adjudication vide order dated 25.02.2025.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 10 of 47
Digitally signed
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:27:48
+0530
ISSUES
(1) Whether the plaintiff is entitled to a decree
of declaration, as prayed for? OPP.
(2) Whether the plaintiff is entitled to a decree
of permanent injunction as prayed for? OPP.
(3) What amount the plaintiff shall be entitled to
recover of, after withdrawal of the reliefs in
respect of his claim, as per statement
recorded in the court? OPP.
(4) Whether the plaintiff is entitled to any
damages and if so, at what rate and for what
period? OPP.
(5) Whether the plaintiff is entitled to any
interest on claimed amount, if so, at what
rate and for what period? OPP.
(6) Relief.
8. Pertinent to mention here that the plaintiff has, from time to time,
withdrawn a number of its claim during the pendency of the suit. The
defendant has made a payment of Rs.86,67,417/- towards the payment of
1st RA Bill passed on 19.01.2022 and that of Rs. Rs.11,28,603/- towards
the remaining 1st RA Bill passed on 19.01.2022. The plaintiff has
accordingly withdrawn its claim no. 1 and 2 from the aforesaid claims
vide its statement dated 25.02.2025. Similarly, to cut short the
controversy in respect of claim no. 4 (which is the claimed amount of Rs.
2,89,750/- towards 10 C.A. bill submitted by the plaintiff on 10.11.2022),
the plaintiff, vide statement dated 11.03.2026, has also restricted its claim
to Rs.2,68,654/- as was admitted by the defendant during its cross-
examination. Pertinent to also mention here that the plaintiff has also
given up its claim no. 8 for damages due to prolongation of contract to
the tune of Rs.6,75,202/- as also the claimed interest to the tune of
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 11 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:27:54 +0530
Rs.26,934/- vide its statement dated 08.04.2026.
(E) EVIDENCE OF PLAINTIFF
9. Plaintiff, in support of its case, got examined one of its partner Shri
Nitin Jain as PW1 who reiterated the contents of the plaint on oath in his
affidavit Ex.PW1/A. He got exhibited the following documents :
1. The true copy of Form A, B and C of Ex. PW-1/1
plaintiff firm and special power of to Ex. PW-
attorney dated 01.04.2021 1/4.
2. The copy of work order dated 08.04.2021 Ex.PW-1/5
alongwith estimate and drawings and (colly).
envelop are enclosed with the list of
documents.
3. The letters of plaintiff dated 15.04.2021 Ex. PW-1/6
and letter of defendant dated 13.05.2021. to Ex. PW-
1/9.
4. The letter of defendant dated 08.06.2021 Ex. PW-
and reply of plaintiff dated 10.06.2021 1/10 to Ex.
with postal receipt. PW-1/12.
5. The copy of showcause notices / letter of Ex. PW-
defendant dated 21.06.2021 and reply of 1/13 to Ex.
plaintiff dated 24.06.2021 with postal PW-1/17.
receipt.
6. The reply of plaintiff dated 25.06.2021 Ex. PW-
and letter dated 28.06.2021 with bank 1/18 to Ex.
guarantee. PW-1/19
7. The letters of plaintiff dated 02.07.2021 Ex. PW-
and 10.07.2021 with postal receipt. 1/20 to Ex.
PW-1/22.
8. The copy of letter of defendant dated Ex. PW-
st
29.10.2021, 1 RA Bills (two parts) and 1/23 to Ex.
2nd RA bill. PW-1/26.
9. The copy of letter of defendant dated Ex. PW-
12.05.2022. 1/27.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 12 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:27:59
+0530
10. The receipt of payment of Rs. 23,600/-. Ex. PW-
1/28.
11. The copy of letter of defendant dated Ex. PW-
25.10.2022 and reply of plaintiff dated 1/29 to Ex.
28.10.2022, postal receipt. PW-1/31.
12. 12 photographs of the site. Ex. PW-
1/32
(colly).
13. The copy of letters of plaintiff dated Ex. PW-
10.11.2022 alongwith its postal receipt. 1/33 to Ex.
PW-1/34
14. The 10 CA bill. Ex. PW-
1/35.
15. The letter of defendant dated 21.12.2022. Ex. PW-
1/36.
16. The copy of letters of plaintiff dated Ex. PW-
06.01.2023 with postal receipt. 1/37 to Ex.
PW-1/38.
17. Photographs. Ex. PW-
1/39 (colly)
18. Letter dated 18.02.2023 with Postal Ex. PW-
receipt. 1/40 to Ex.
PW-1/41.
19. The EOT proforma and documents Ex. PW-
1/42
(colly).
20. The letter of plaintiff dated 22.04.2023 Ex. PW-
with postal receipt. 1/43 to Ex.
PW-1/44.
21. The original letter dated 28.07.2023. Ex. PW-
1/45.
22. The copy of the legal notice dated Ex. PW-
16.08.2023. 1/46.
23. The postal receipts of legal notice. Ex. PW-
1/47 to
Ex.PW-
1/48.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 13 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:28:05 +0530
24. Service report of legal notice. Ex. PW-
1/49 to Ex.
PW-1/50.
25. The copy of letter dated 06.10.2023 with Ex. PW-
postal receipt. 1/51 and
Ex. PW-
1/52.
26. The copy of Bank Guarantee Ex.PW-
1/53.
It has been deposed that the suit is correct and the defendant is
liable to pay the interest and costs.
10. During a detailed cross-examination, Ld. Counsel for defendant
has tried to puncture the testimony of PW1 on the point of compliance of
terms and conditions of the Agreement, submission of bills in question,
completion of work and payment of GST qua the work order in question.
PW1 admitted that the stipulated date of completion was 08.07.2021,
whereas the work was actually completed on 09.11.2021, thereby
acknowledging delay in execution. He has admitted that the running or
final bill were not submitted by him to the department but added
voluntarily that the 10CA bill was submitted, which was finalized for Rs.
2,68,653/- by the department. He also conceded that no document has
been placed on record to substantiate the damages claimed in the present
suit and also admitted that, as per the Agreement, the contractor is
required to submit bills in accordance with the GCC. PW1 has further
admitted that the bills Ex. PW1/23 to Ex. PW1/26 were prepared and
passed by the defendant department for its own consumption/record,
voluntarily adding that, as per practice in MCD, measurements are
recorded by the Junior Engineer and bills are prepared accordingly. He
further admitted that no Labour Clearance Certificate was submitted and
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 14 of 47
Digitally signed
by MUKESH
MUKESH KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:28:11
+0530
that GST was not deposited at the time of certification of the bills, though
he claimed that the same was paid subsequently after release of the 1 st
Running Bill of 2 phases and that GSTR forms can be produced in proof
thereof. PW1 also admitted that a penalty of Rs. 1,10,488/- was imposed
by the department for delay in execution of the work. He, however,
denied the suggestion that the present suit is liable to be dismissed.
11. No other witness was examined by the plaintiff and the evidence of
the plaintiff was closed on 09.04.2025.
(F) DEFENDANT’S EVIDENCE :-
12. The defendant in its defence got examined one Ms. Rijuta Gupta,
Assistant Engineer (project-II), Central Zone, Municipal Corporation of
Delhi who reiterated the contents of the Written Statement on oath. She
has marked the copy of letter dated 08.12.2021 i.e. approval of sanction
of funds, copy of letter dated 21.10.2020 to director Delhi Division
Ministry of Housing and Urban Affairs of India and copies of the letter
communicated with the UDS dated 29.10.2021, 10.02.2022, 22.02.2022
and 07.10.2022 as Mark “A” to “C” (colly.) respectively. DW1 also
deposed in his evidence that the suit filed by the plaintiff deserved to be
dismissed at the very outset.
13. During a detailed cross-examination by Ld. counsel for plaintiff,
DW1 has admitted that no specific authority letter issued by MCD in her
favour to depose in the present case has been placed on record, though
she stated that a general circular authorising her exists appearing unsure
whether the same forms part of the judicial record. She expressed lack of
knowledge regarding the mode of dispatch of the Work Order (Ex.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 15 of 47
Digitally signed
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:28:18
+0530
PW1/5) and whether it was sent to the plaintiff on 16.04.2021. She has,
however, admitted that the date of commencement of work is reckoned
from the date of service of the Work Order. She further admitted receipt
of non-judicial stamp paper of Rs.50/- with covering letter dated
15.04.2021, Ex.PW1/6, for execution of an agreement which had been
received on 16.04.2021 and the certificate of Civil Engineer Ex. PW1/7.
DW1 acknowledged that approval of the job mix formula (BM & BC)
was a prerequisite for execution of the work and admitted that the
plaintiff had requested issuance of a recommendation letter, Ex. PW1/8,
to design the job mixed formula of BM and BC in favour of COSMO
ANALYTIC LAB for which the defendant has issued the
recommendation letter, Ex.PW1/9, on 13.05.2021. She has further
deposed that without seeing the record, she cannot say whether the lock
down period was started in April 2021 and completed in July 2021 due to
the 2nd wave of Covid-19 and also showed her inability to confirm from
the record whether lockdown restrictions during the second wave of
COVID-19 affected execution of the work or whether any special
permission was granted by the MCD. However, she admitted that due to
lockdown fears, labour shortage occurred as workers migrated to their
native places. DW1 admitted that mandatory site records such as the site
order book, hindrance register, material register, inspection register, and
drawing register were not placed on record, and she had not brought the
originals. She also expressed inability to confirm whether such records
were maintained. She has also admitted that as per the contract, work was
to be executed in 4 phases in accordance with Clause 5 of GCC and
Schedule ‘F’, and in case of delay, the department is required first
required to issue a letter and thereafter, a show cause notice and
determine responsibility before rescheduling timelines. She has deposed
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 16 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:28:25 +0530
that in the present case, though a show cause notice (Ex. PW1/13) was
issued but she was unaware whether responsibility for delay was fixed or
timelines rescheduled. She admitted that the show cause notice Ex.
PW1/13 was issued after the stipulated date of completion. DW1 further
admitted that the plaintiff has submitted extension of time, EOT
proforma Part-l for approval of extension of time vide letter dated
18.04.2023 Ex.PW1/42, but she was unaware whether any query or
clarification was sought by the department in this regard. She has
confirmed that the first running bill passed in two parts i.e. in first part of
gross amount of Rs.97,58,770/- on 19.01.2022 Ex.PW1/24 and second
part of gross amount of Rs.12,78,507/- on 19.01.2022 Ex.PW1/25. She
also admitted that a provisional extension of time up to 30.11.2021 was
granted by the MCD in terms of Ex. PW1/23, while the actual date of
completion was 09.11.2021. She further admitted that the 10CA bill
submitted by the plaintiff was processed and certified for Rs. 2,68,654/-
(Ex. DW1/P-1). She also acknowledged that a sum of Rs. 5,51,864/- was
deducted towards security from the bills, against which the contractor
furnished a bank guarantee of the same amount. However, the witness
expressed lack of knowledge as to whether the said bank guarantee has
been released by the department.
14. No other witness was examined by the defendants and the evidence
of the defendants was closed vide statement dated 28.01.2026.
(G) ARGUMENTS ADDRESSED:-
ARGUMENTS OF PLAINTIFF.
15. Ld. counsel for the plaintiff Shri Jatin Arora has vehemently
argued that the plaintiff has successfully executed the awarded Work
Digitally signed
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 17 of 47
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:28:30
+0530
Order No.2 of 2022 dated 08.04.2021 within the extended time and to the
satisfaction of the defendant in compliance of the terms and conditions
of the GCC and the Work Order Ex.PW1/5 and despite passing of the 1 st
RA Bills in respect of Work Order as early as 19.01.2022, the defendant
has unreasonably withheld the legitimate payment to the plaintiff, which
has been finally released on 06.04.2024, after the plaintiff has raised the
grievance by way of present suit. It has further been sought to be argued
that not only the aforesaid payments were unjustifiably withheld but also
the defendant has gone to the extent of imposing a penalty/compensation
to the tune of Rs.1,10,488/- being 1% of the contract value under Clause
2 of GCC without any justifiable reason. It has been argued that the
arbitrary action of the defendant is clearly reflected in its letter dated
28.07.2023 which is under challenge before this Court as no specific
reason for levy of such penalty has been mentioned except a vague
reason showing delay of 25 days (upto 09.11.2021). It has been argued
that the defendant has utterly failed to show its calculation of 25 days and
completely ignored the fact that it is already granted a due extension of
the time period for completion of the work till 30.11.2021 after
considering the extraordinary circumstances and force majeure of second
wave of COVID-19 pandemic which has not only adversely affected the
entire world including India but has also led to countrywide lockdown
which is an admitted fact. It has been argued that once the defendant has
duly granted extension of the period of completion, there is absolutely no
reason to selectively calculate and decide the imposition of penalty. Ld.
Counsel has vehemently relied upon the pronouncement of law laid down
by our Hon’ble Delhi High Court in OMP(Comm.) 185/2022 titled
NDMC Vs. IJM Corporation Berhad where in similar circumstances
the Hon’ble High Court has while explaining Clause 5.4 of GCC has laidCS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 18 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:28:35
+0530
down that the competent authority having once granted extension in
terms of the Clause cannot treat the same as provisional and then go on to
impose liquidated damages. Ld. Counsel has also relied upon the
Division Bench of the Hon’ble High Court in Manu/DE/3692/2024 titled
MCD Vs. IJM Corporation Berhad to argue that not only the aforesaid
proposition of law has been upheld by the Division Bench but also has
been reiterated. Ld. Counsel has finally relied upon the pronouncement
law laid down in Manu/DE/6829/2011 titled Vishal Engineers and
Builders Vs. Indian Oil Corporation to raise a point that liquidated
damages or any kind of penalty cannot be imposed by the defendant
unless actual sufferance of damages or quantification thereof is duly
proved by the authority by holding that the Courts are duly empowered to
look into the aspect of actual loss and sufferance and merely because
there is a clause of liquidated damages, the same does not mean that the
authority has to recover the amount thereof even when no loss has been
caused as the same is not permissible under the law. While arguing on the
withholding of the security deposits to the tune of Rs.5,51,864/-, Ld.
Counsel has vehemently stated that once the bank guarantee of the same
amount was duly furnished by the plaintiff on 06.10.2023 and accepted
by the defendant, the withholding of actual amount without any rhyme or
reason is clearly unreasonable and the defendant has actually withheld
the legitimate amount belonging to the plaintiff which should not only be
awarded but also awarded with exemplary interest.
16. On the interest component, Ld. counsel Sh. Arora has vehemently
argued that the plaintiff is entitled to a requisite interest on all claims as
detailed in claim 9 of the table including interest on both running bills as
the same have been duly prepared and certified by the defendant on
Digitally signed
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 19 of 47
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:28:41
+0530
19.01.2022 and forms part of the record Ex.PW1/24 and Ex.PW1/25. He
has argued that in terms of Clause 9 of GCC, the defendnat was duty
bound to pay the amount after expiry of 6/9 months as applicable and the
plaintiff should be awarded interest on the amount of running bills w.e.f.
19.10.2022 (after lapse of 9 months) dehors the fact that the defendant
has made the payment thereof on 06.04.2024 during the pendency of the
instant proceedings. It has been argued that interest by its very nature on
a liability is not only corollary but parasitic in nature. He has relied upon
the judgment of Hon’ble Apex Court in Reliance Cellulose Products
Ltd. Vs. Oil And Natural Gas Corporation Ltd, 2018:INSC:623 to
buttress his point that in case, the principle sum is not paid in time, the
interest acts as compensation. He has also relied upon the judgments of
Hon’ble Delhi High Court in North Delhi Municipal Corporation &
Ors. Vs. Shishpal, 2018 SCC OnLine Del 8039 to state that an interest
at the rate at least 8% per annum after the completion of 6/9 months from
passing of bill is required to be paid. He has finally argued that not only
his subsisting claims be decreed with interests but also exemplary costs
should be imposed on the defendant.
ARGUMENTS OF DEFENDANT:
17. Ld. Counsel for defendant, Mr. Arman Monga, on the other hand
has vehemently contested all the arguments addressed by the plaintiff
thereby taking a categoric stand that the plaintiff has utterly failed to
comply with the mandatory condition of submissions of either the
running bill or final bill in clear contravention of Clause 4 of the Work
Order Ex.PW1/2 and Clause 7 and 9 of the GCC which clearly stipulates
such submission by the contractor within the stipulated timeline, failure
of which, actually takes away any cause of action in its favour. He has
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 20 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:28:46 +0530
vehemently relied upon the judgment of Hon’ble Delhi High Court in
North Delhi Municipal Corporation & Anr. Vs. Sanjeev Kumar
where clear guidelines were laid down by the Hon’ble High Court for
payment of bills to the contractor including guidelines to submit the bills
by the contractor to the defendant corporation which is a sine qua non to
claim payment of completed work. It has been argued that though the
plaintiff has been paid the principal amount by the defendant on
06.04.2024 but the same was an act on the part of defendant and the
plaintiff cannot seek benefit in terms of any interest on the aforesaid
amount since he himself has failed to fulfill its contractual obligations
which were not only accepted but was binding upon him. Ld. Counsel
Sh. Monga has further argued that whatever amount has been withheld by
the Corporation was strictly adhered in terms of agreed terms and
conditions of the work order and the applicable GCC. It has been argued
that the 10 C.A. bill as claimed by the plaintiff has duly been considered
by the defendant corporation and processed for a sum of Rs.2,68,654/-
which shall be paid in due course. On the aspect of differential GST, Ld.
Counsel Sh. Monga has argued that the question of differential GST and
the claim thereof will not be available to the plaintiff since it has failed to
submit the GST paid bill in contravention of Section 31 of the GST Act
and Rule 46 of the GST Rules and rather the same creates a ground for
imposition of penalty upon the plaintiff.
18. Addressing the argument on the withheld amount of Rs.1,10,488/-
being 1% of the contract amount, Ld. Counsel has stated that the same
was strictly in accordance with Clause 2 of GCC which empowers the
defendant corporation to determine and impose reasonable penalty as
compensation for the delay caused in performance of the work which is
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 21 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:28:52 +0530
not only disciplinary in nature but is also a deterrent so that the
contractor’s perform their work in time and with due diligence. Ld.
Counsel has argued that the judgement cited by the plaintiff of Vishal
Engineer and Builders (supra) shall have no application to the facts of
the case since the same was in respect of an arbital award and not a
recovery suit. Finally, referring to claim 9 of the plaintiff which is for
seeking an interest @ 14% per annum on its various claims, Ld. Counsel
Sh. Monga has argued that the plaintiff was in clear violation of the terms
of the work order and the applicable GCC which binds the party to the
contract in as much as the plaintiff has failed to submit the requisite GST
paid bills in terms of clause 7 and 9 of GCC. It has been argued that even
otherwise, the penalty imposed and the amount withheld are on account
of inordinate delay in completion of the work for which the defendant
corporation is well within its right to do so under clause 2 of GCC. It has
been argued that once the plaintiff has defaulted in due compliance of its
obligation under the contract, there is no question of payment of any
interest by the defendant much less the claimed interest to the tune of
Rs.20,87,528/-. Ld. Counsel Sh. Monga has finally argued that the suit of
the plaintiff is without any cause of action, premature and is required to
be dismissed on the very principle that the plaintiff has approached the
Court with uncleaned hands. He has prayed for dismissal of the suit with
exemplary cost.
(H) ANALYSIS & DETERMINATION:-
19. I have heard the arguments addressed by the Ld. Counsels for the
parties, perused the entire record including the oral and documentary
evidence. I have given a thoughtful consideration to the same. My issue-
wise determination is as under: –
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 22 of 47
Digitally
signed by
MUKESH
MUKESH KUMAR
KUMAR GUPTA
Date:
GUPTA 2026.04.18
18:28:59
+0530
Issues No.1 and 2: (1) Whether the plaintiff is entitled to a decree of declaration, as prayed for?
OPP.
(2) Whether the plaintiff is entitled to a decree of permanent injunction as
prayed for? OPP.
20. The onus of proving these two issues has been held upon the
plaintiff. These issues are taken together being inextricable
interconnected, since the plaintiff has prayed for a decree for declaration
in Issue No.1 and the relief of permanent injunction, sought in Issue
No.2, is a consequential relief thereof in terms of section 34 of the
Specific Relief Act, 1963 (hereinafter referred to as the SRA). As such,
the decision on Issue No.1 will automatically affect the outcome of the
Issue No.2. Further, the evidence led on issues is common. These issues
have arisen on the basis of letter of intimation bearing No.
D/SE(Pr.)/CNZ-2023-2024/102, Ex.PW1/45 dated 28.07.2023, issued by
the defendant to the plaintiff under clause 2 of the GCC wherein the
defendant has levied upon the plaintiff a compensation to the tune of
Rs.1,10,488/- by citing delay of 25 days in execution of the awarded
work.
21. According to the plaintiff, the delay in execution of the awarded
work is attributable to the defendant since the defendant has failed to
provide the requisite recommendation letter to design the job mix
formula of BM and BC within time. Besides, Ld. Counsel for the plaintiff
has argued that second wave of COVID-19 pandemic has adversely
affected the entire country leading to countrywide lockdown for the
period between 17.04.2021 and 07.06.2021, which led to delay in
execution of the awarded work. It has been argued that the defendant has
provisionally extended the period of completion of the awarded work till
30.11.2021 and plaintiff has duly completed the said work on 09.11.2021,
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 23 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:29:08 +0530
well within the extended time, as such, there is absolutely no reason to
selectively calculate and decide the imposition of penalty, thus, letter of
intimation Ex.PW1/45 is liable to be declared void and the defendant
should be restrained by way of permanent injunction to enforce the said
show cause notice.
22. Per contra, the defendant, on the other hand has maintained that
the actual date of completion of work as per the contract was 08.07.2021
and the plaintiff has completed the awarded work on 09.11.2021, as such,
there is a delay in execution of the awarded work and in such
circumstances, the defendant was well within its right to exercise its
power to issue show cause notice under clause 2 and 3 of the GCC and
has legitimately exercised the same, therefore, the said notices are valid
in the eyes of law and should not be declared as null and void.
23. Before proceeding further, law related to decree to declaration is
enshrined under section 34 of the SRA and the same has been reproduced
hereinunder for ready reference-
“Section 34. Discretion of court as to declaration of status
or right. — Any person entitled to any legal character, or to
any right as to any property, may institute a suit against any
person denying, or interested to deny, his title to such
character or right, and the court may in its discretion make
therein a declaration that he is so entitled, and the plaintiff
need not in such suit ask for any further relief.
Provided that no court shall make any such declaration
where the plaintiff, being able to seek further relief than a
mere declaration of title, omits to do so.
Explanation. –A trustee of property is a “person interested
to deny” a title adverse to the title of someone who is not in
existence, and whom, if in existence, he would be a trustee.”
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 24 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:29:18 +0530
24. Thus, at the time of filing of suit, a person claiming a declaratory
relief must show that he is entitled: –
a. to a legal character, or
b. to a right as to property; and
c. the defendant has denied or is interested to deny his title to
such character or right, and
d. he has sought all reliefs in the same suit.
25. The object of this section is obviously to provide a perpetual
bulwark against adverse attacks on the rights or title of the plaintiff,
where a cloud is cast upon it, and to prevent further litigation by
removing existing cause of controversy. It is a settled law that the threat
to his legal character should be real and not imaginary. The plaintiff has
to prove that the defendant has denied or is interested in denying the
character or title of the plaintiff. There must be some present danger or
determent to his interest. So that a declaration is necessary to safeguard
his right and clear the mist. The denial must be communicated to the
plaintiff in order to give him cause of action. Further, the proviso is
aimed at preventing multiplicity of proceedings. It mandates that where
the plaintiff is entitled, at the time of filing the suit, to relief beyond a
mere declaration, such relief must be claimed in the same suit to ensure
complete and final adjudication. Reliance is placed upon Life Insurance
Corporation of India Vs. Smt. Iqbal Kaur., A.I.R., 1984 J&K 5,
Bhujandra Bhusan Vs. Trigunath, I.L.R. 8 Cal. 761, Sheoparsan
Singh Vs. Ramanandan Singh, A.I.R. 1916 P.C. 78 and Hussain
Ahmed Choudhury & Ors. Vs. Habibur Rahman (Dead) Through
L.R.s & Ors., MANU/SC/0564/2025: 2025: INSC: 553.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 25 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:29:25 +0530
26. Having discussed the legal framework and for complete
adjudication of present issues, it would be relevant to refer clauses 2 and
5 of GCC, which have been reproduced hereinunder: –
“CLAUSE 2
Compensation for DelayIf the contractor fails to maintain the required progress in
terms of Clause 5 or to complete the work and clear the site
on or before the contract or extended date of completion, he
shall without prejudice to any other right or remedy available
under the law to the MCD on account of such breach, pay as
agreed compensation the amount calculated at the rates
stipulated below or such smaller amount as the
Superintending Engineer (Whose decision in writing shall be
final and binding) may decide on the amount of tendered
value of the work for every completed day/ week (as
applicable) that the progress remains below that specified in
Clause 5 or that the work remains incomplete. This will also
apply to items or group of items for which a separate period
for completion has been specified.
(i) Completion period (as originally stipulated) @ 1% per
Day not exceeding 3 months.
(ii) Completion period (as originally stipulated) @ 1% per
Week exceeding 3 months.
Provided always that the total amount of compensation for
delay to be paid under this Condition shall not exceed 10% of
the Tendered Value of work or of the Tendered Value of the
items or work for which a separate period of completion is
originally given. The amount of compensation may be
adjusted set-off against any sum payable to the Contractor
under this or any other contract with the M.C.D
CLAUSE 5
Time and Extension for Delay.
The time allowed for execution of the work as specified in
the Schedule ‘F’ or the extended time in accordance with
these conditions shall be the essence of the Contract. The
execution of the works shall commence from the 15th day or
such time period as mentioned in Letter of Award after the
date on which the Engineer-in-Charge issues written orders to
commence the work or from the date of handing over of the
site whichever is later. If the contractor commits default in
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 26 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:29:30 +0530
commencing the execution of the work as aforesaid,
Government shall without prejudice to any other right or
remedy available in law, be at liberty to forfeit the earnest
money absolutely.
5.1 As soon as possible after the contract is concluded the
Contractor shall submit a time & progress Chart and get it
approved by the Department. The chart shall be prepared in
direct relation to the time stated in the Contract documents
for completion of items of the works. It shall indicate the
forecast of the dates of commencement and completion of
various trades of sections of the work and may be amended
as necessary by agreement between the Engineer-in-Charge
and the Contractor within the limitations of time imposed in
the contract documents, and further to ensure good progress
during the execution of the work. The contractor shall in all
cases in which the time allowed for any work, exceeds one
month (save for special jobs for which a separate program
has been agreed upon) complete 1/8th of the contractual work
before 1/4th of the whole time allowed in the contract has
elapsed 3/8th of the work before one-half of such time has
elapsed and …. of the work before 3/4th of such time has
elapsed.
5.2 If the work(s) be delayed by:
(i) Force majeure, or
(ii) Abnormally bad weather, or
(iii) Serious loss or damage by fire, or
(iv) Civil commotion, local commotion of workmen, strike
or lockout, affecting any of the trades employed on the work,
or
(v) delay on the part of other contractors or tradesmen
engaged by Engineer-in-Charge in executing work not
forming part of the Contract, or
(vi) any other cause which, in the absolute discretion of the
authority mentioned in Schedule ‘F’ is beyond the Contractor’s
control.
Then upon the happening of any such event causing delay, the
Contractor shall immediately give notice thereof in writing to
the Engineer-in-Charge but shall nevertheless use constantly
his best endeavours to prevent or make good the delay and
shall do all that maybe reasonably required to the satisfaction
of the Engineer-in-Charge to proceed with the works.
5.3 Request for rescheduling of Milestones and extension of
time, to be eligible for consideration, shall be made by the
Contractor in writing within fourteen days of the happening of
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 27 of 47
Digitally signed
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:29:36
+0530
the event causing delay on the prescribed form. The
Contractor may also, if practicable, indicate in such a request
the period for which extension is desired.
5.4 In any such case the authority mentioned in Schedule ‘F’
may give a fair and reasonable extension of time and
reschedule the milestones for completion of work, such
extension shall be communicated to the contractor by the
Engineer-in-Charge in writing, within 3 months of the date of
receipt of such request. Non-application by the contractor for
extension of time shall not be a bar for giving a fair and
reasonable extension by the Engineer-in Charge and this shall
be binding on the contractor.
5.4.1 In any such case the authority as indicated in Schedule
‘F’ may give a fair and reasonable extension of time for
completion of work or reschedule the mile stones. Engineer-
in-Charge shall finalize/re-schedule particular milestones
before taking an action against communicated to the
Contractor by the authority as indicated in Schedule ‘F; in
writing within 21 days of the date of receipt of such request
from the Contractor in prescribed form. In event of non-
application by the contractor for extension of time Engineer-
in-Charge after affording opportunity to the contractor may
give, supported with a programme (as specified under 5.4
above), a fair and reasonable extension within a reasonable
period of occurrence of the event.
5.5 …
27. It is a settled proposition of law that the determination by the
competent authority as to which party was responsible for the delay, and
for what reasons, is not conclusive in itself and remains amenable to
judicial scrutiny. Likewise, such provisions may also run contrary to
Section 28 of the Contract Act, 1872. Therefore, notwithstanding Clause
2 of the GCC stipulating that the decision of the MCD in imposing
penalty shall be final and binding, the same is liable to be reviewed by
this Court.
28. Applying the aforesaid discussion to the facts of the present case, it
may be seen that the plaintiff, vide his letter dated 15.04.2021, Ex.PW1/8
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 28 of 47
Digitally signed
by MUKESH
MUKESH KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:29:42
+0530
has requested to the defendant for providing the recommendation letter to
design the job mix formula of BM and BC in favour of the Cosmic
Analytic Lab and the defendant accorded the permission for getting the
same done only vide its letter dated 13.05.2021, Ex.PW1/9. The plaintiff
has received the job mix formula of BM and BC on 10.07.2021 and
submitted the same to the defendant vide his letter dated 10.07.2021,
Ex.PW1/21 (colly.), the contents of which has been duly admitted by the
defendant at the stage of admission and denial of documents as
Ex.P-19(colly.). The defendant, during the course of cross-examination,
has admitted and acknowledged the fact that approval of the job mix
formula (BM & BC) by the MCD was a prerequisite for execution of the
work, which shows that the plaintiff was bound to obtain the approval of
the MCD for the same so as to commence and duly execute the awarded
work in terms of the contract. DW1 has also corroborated the fact that the
plaintiff requested the issuance of a recommendation letter as early as
15.04.2021 (Ex. PW1/8) for designing the job mix formula of BM and
BC in favour of Cosmo Analytic Lab and admitted that the defendant
issued the recommendation letter (Ex. PW1/9) only on 13.05.2021.
Therefore, it would not have been possible for the plaintiff to start the
work and execute the awarded work by the actual date of completion i.e.
08.07.2021. The plaintiff has also duly complied with clause 5.2 of the
GCC and vide his letters Ex.PW1/8, Ex.PW1/11 and Ex.PW1/21 (colly.)
has kept the defendant duly and timely informed of the reasons of delay
till 10.07.2021, which were prima facie not attributable to the plaintiff. In
such circumstances, the delay for the period between 15.04.2021 and
13.05.2021 is attributable to the defendant and the subsequent delay up to
10.07.2021 was occasioned due to the non-receipt of the aforesaid job
mix formula, for which the plaintiff cannot be held liable.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 29 of 47
MUKESH Digitally
by MUKESH
signed
KUMAR KUMAR GUPTA
Date: 2026.04.18
GUPTA 18:29:49 +0530
29. Further, it is a matter of judicial notice that, during the second
wave of the COVID-19 pandemic, a complete lockdown was imposed
from 17.04.2021 to 31.05.2021, which constitutes a force majeure event.
During this period, inter alia, construction activities were completely
halted by the Government. No material has been placed on record by the
defendant to demonstrate that the plaintiff was accorded any special
permission to carry out the awarded construction work during this period.
In absence of any special permission, the delay caused in commencement
of the awarded work during the aforesaid second wave Covid-19
lockdown period can also be not attributed to the plaintiff.
30. Besides, the defendant kept the contract subsisting and, vide
letter No. 119 dated 27.08.2021, extended the date of completion of the
work till 30.10.2021, which was further provisionally extended till
30.11.2021 vide letter dated 29.10.2021, Ex. PW1/23. The provisional
extension of time by the MCD till 30.11.2021 has also been admitted by
DW1 during her cross-examination. It is also an admitted fact that the
plaintiff has completed the awarded work on 09.11.2021 which is well
within the provisionally extended date i.e. 30.11.2021 and as such no
circumstances have arisen in favour of the defendant to issue letter of
intimation, bearing No. D/SE(Pr.)/CNZ-2023-2024/102, dated
28.07.2023, Ex.PW1/45, under clause 2 of the GCC to levy a
compensation of Rs.1,10,488/- and that too much later after completion
of work on 09.11.2021 as the plaintiff has completed the awarded work
within the provisionally extended period in terms of the requirement of
the aforesaid clause of GCC. No other cogent evidence has been brought
before the Court controverting the testimony of PW1 and the documents
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 30 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:29:54 +0530
duly proved (and rather admitted) by the defendant. If the evidence both
oral and documentary is weighed on the yardstick of preponderance of
probabilities, the plaintiff succeeds in its endevour. Accordingly, letter
dated 28.07.2023 (Ex.PW1/45) imposing penalty/compensation cannot
withstand scrutiny of law and is liable to be declared as null and void.
31. Adverting to the plaintiff’s entitlement to a decree of permanent
injunction, the plaintiff, as a consequential relief of declaration, seeks to
restrain the defendant, its officers and representatives from enforcing the
levy of compensation of ₹1,10,487/- under Clause 2 of the GCC, as
intimated vide Ex. PW1/45, and from recovering the said amount from
the plaintiff’s dues or taking any coercive action under Clause 3 of the
GCC. Section 38(1) of the SRA permits grant of a perpetual injunction to
prevent breach of an expressed or implied obligation existing in favour of
the plaintiff and where such obligation arises out of a contract then by
virtue of Section 38(2), the Court is to be guided by the rules and
provisions contained in Chapter II, Sections 9 to 25 of the Act.
32. Section 16(c) of the SRA incorporates an important principal of
readiness and willingness of the promisor to perform the essential terms
of the contract which are to be performed by him. A conjoint reading of
Sections 16(c) and 38(2) of the SRA indicates that a plaintiff is entitled to
a decree of permanent injunction where he proves that he has performed,
or has always been ready and willing to perform, the essential terms of
the contract on his part, thereby giving rise to an obligation in his favour
which has been breached by the defendant. In the present case, it may be
seen that the plaintiff was always ready and willing to perform his part of
contract but unfortunately, due to delay in grant of permission by the
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 31 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:30:01 +0530
defendant for the job mix formula for BM and BC and lockdown due to
the second wave of the Covid-19 pandemic, he could not perform his part
of contract within the earlier stipulated date i.e. 08.07.2021. Plaintiff’s
readiness and willingness can also be inferred from the fact of furnishing
a bank guarantee to the tune of Rs.3,31,463/- vide his letter dated
28.06.2021, Ex.PW1/19 in compliance of letter dated 21.06.2021 of the
defendant whereby the defendant has directed the plaintiff to furnish 3%
performance guarantee. As already discussed, the period of completion of
the awarded work was provisionally extended by the defendant and the
plaintiff has completed the said work within the extended time period.
The defendant has prepared as well as passed the 1 st RA bill (in two
parts) and 2nd RA bill of the plaintiff on 19.01.2022 and 20.06.2022
respectively. Thus, taken on the yardstick of preponderance of
probabilities, plaintiff has performed his contractual obligations. Since,
the intimation letter, Ex. PW1/45 has been set aside as null and void, the
defendant, its officers and representatives are restrained permanently
from enforcing the levy of compensation of ₹1,10,487/- under Clause 2
of the GCC which is a breach of an obligation to pay the contractual
amount, existing in favour of the plaintiff. The defendant, its officers and
representatives are also restrained permanently from recovering the said
amount from the plaintiff’s dues or taking any coercive action under
Clause 3 of the GCC as no occasion to terminate the contract of the
awarded work has ever arisen in favour of the defendant and against the
plaintiff.
33. In view of the aforesaid, both Issue No.1 and Issue No.2 are
decided in favour of the plaintiff and against the defendant.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 32 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:30:07 +0530
Issue No.3: (3) What amount the plaintiff shall be entitled to recover of after withdrawal of
the reliefs in respect of his claim, as per statement recorded in the court? OPP
34. The onus to prove this issue was held upon the plaintiff who has
examined Sh. Nitin Jain, one of its partner as PW1 and filed his affidavit
Ex.PW1/A. It may be seen that this issue is pivotal to the entire lis
between the parties as the same relates to the entitlement of the plaintiff
to the amount claimed after withdrawal of its various claims from time to
time as has already been enumerated. As discussed earlier, in simple
terms the remaining claims after repeated withdrawals are claim no.3 in
respect of the second RA Bill XL-VIII-L(I) UDF passed on 20.06.2022
for a sum of Rs.23,600/-; claim no. 4 which is a 10CA Bill in respect of
the escalation in the prices of Bitumen and cement as notified by the
Government from time to time. The same is restricted by the plaintiff to
Rs.2,68,654/- (as against the claimed amount of Rs.2,89,750/-); claim
no.5 which is towards security deposit of Rs.5,51,864/- against the bank
guarantee submitted by the plaintiff on 06.10.2023; claim no. 6 which is
a claim regarding the reimbursement of differential amount of GST @
6% and finally, claim no.7 which is in respect of an amount of
Rs.1,10,488/-(the compensation amount @ 1% of the tender value) which
the plaintiff has claimed to have been withheld by the defendant on
account of letter dated 27.07.2023 Ex.PW1/45. The Court shall be
considering each of these claims in seritum in the light of evidence led by
the parties.
35. In so far as claim no.3 is concerned, it has been deposed by PW1
that the aforesaid amount was directed to be deposited by the defendant
for the purpose of lab charges in Shri Ram Lab for core cutting of AC to
ascertain the density and actual thickness as was informed to the plaintiff
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 33 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:30:13 +0530
vide its letter dated 12.05.2022 Ex.PW1/27. It is pertinent to note that the
amount was duly deposited by the plaintiff on the same day as can be
seen from the order acceptance and receipt showing an amount of
Rs.23,600/- Ex.PW1/28. The claim of the plaintiff is that despite the
aforesaid amount being deposited by the plaintiff in time and as per
direction of the defendant, the same was deducted from the actual bill as
can be reflected from Ex.PW1/26 which is a second RA Bill passed by
the defendant on 20.06.2022. The testimony of PW1 in this regard is
clear and categoric and has not been reached during its cross-examination
except for the fact that the defendant has claimed that the bill was not
submitted for the same. It may be seen that Ex.PW1/27 and Ex.PW1/28
clearly shows that the amount was paid by the plaintiff on the directions
of the defendant and the defendant cannot put the plaintiff to double
whammy by deducting the aforesaid amount from the actual bill despite
its clear indication to release the same. It is an admitted fact that the
aforeasaid amount has not been released by the defendant to the plaintiff.
The defendant has failed to show any cogent or justifiable reason to
withhold the same. There is no reason why the plaintiff should not get its
due that too when he has diligently deposited the same at the instance of
the defendant on the same day. Thus, on the basis of the evidence which
has come on record, the plaintiff has been able to show its entitlement to
recovery of Rs.23,600/- against the defendant on the yardstick of
preponderance of probabilities.
36. In so far as claim no. 4 which is a 10CA Bill in respect of the
escalation in the prices of Bitumen and cement as notified by the
Government from time to time is concerned, though, the plaintiff has
claimed the same at Rs.2,89,750/- on the basis of its calculation
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 34 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:30:19
+0530
Ex.PW1/35, the plaintiff has restricted the same to Rs.2,68,654/- vide
statement dated 11.03.2026. The plaintiff has duly submitted the 10 CA
bill with the defendant corporation vide its letter dated 10.11.2022
Ex.PW1/33 which was duly sent to the defendant vide postal receipts
Ex.PW1/34 but was not responded to. The deposition of PW-1 Nitin Jain
in this regard is clear and categoric and has not been breached during his
cross-examination. On the contrary, the counsel for defendant, during his
cross-examination, has asked a specific question regarding deposit of 10
CA bill and has also mentioned that the same has been finalized by the
department for a sum of Rs.2,68,654/-. Trite to mention here that even
the defendant during cross-examination of DW-1 Rijuta Gupta has duly
admitted that the 10 CA bill submitted by the plaintiff (Ex.PW1/33 and
Ex.PW1/35) have been duly processed and certified by the defendant
corporation for a gross amount of Rs.2,68,654/- and got exhibited the
same as Ex.DW1/P1, which shows a clear calculation regarding the price
variation under Clause 10 CA of GCC duly checked and verified for a
sum of Rs.2,68,654/-. Thus, taken on yardstick on preponderance of
probabilities, the plaintiff has been able to show his entitlement to the
aforesaid amount against the defendant.
37. Adverting to the plaintiff’s claim no.5 which is towards security
deposit of Rs.5,51,864/- against the bank guarantee submitted by the
plaintiff on 06.10.2023, it is the case of the plaintiff that the defendant
has deducted the security amount of Rs.4,87,939/- and Rs.63,925/- from
the first RA bill at the time of its due processing. The testimony of PW-1
even in this regard is clear and categoric and the amount is shown
deducted by the defendant corporation from both the first RA bills
Ex.PW1/24 and Ex.PW1/25. It is also a contention and subsequent
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 35 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:30:27 +0530
deposition of PW-1 that a bank guarantee bearing no. 083 BG
01232790001 dated 06.12.2023 with its validity uptil 04.12.2026, drawn
on YES Bank in favour of the Commissioner, MCD Ex.PW1/53 has been
duly submitted by the plaintiff alongwith its letter dated 06.10.2023
Ex.PW1/52 also making a request for release of security deposit to the
extent of aforesaid bank guarantee. Even the defendant witness DW-1
Rajuta Gupta, during the course of cross-examination, has admitted that
the plaintiff has submitted the aforesaid bank guarantee to the tune of
Rs.5,51,864/- against the security from the bills. This security amount is
liable to be released by the defendant in accordance with Clause 17 and
45 of the GCC which provides for liability regarding damages and
defects and release of security deposit after labour clearance. It is not the
case of the defendant that the plaintiff has failed to rectify any damage
despite notice being given to the plaintiff. On the contrary, record shows
that vide its letter dated 21.12.2022, during routine inspection, certain
points on the road entry point from MB Road to Sangam Vihar entry
were found to be with certain potholes with open graded texture and
aggregate coming out at certain places with damage in road edges. The
plaintiff on its part has duly rectified the aforesaid work thereby also
mentioning the reasons including damages done by Delhi Jal Board,
Local Authorities and water logging due to heavy rain. The same not only
rectified but has also been informed to the defendant vide its letter dated
06.01.2023 Ex.PW1/37 alongwith the photographs. No complaint or any
other notice showing either failure of curing the defects or dis-
satisfaction regarding the work has been shown by the defendant and as
such, when taken on the yardstick of preponderance of probabilities, the
plaintiff has been able to show due compliance of Clause 17 of the GCC.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 36 of 47
Digitally signed
MUKESH KUMAR
by MUKESH
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:30:33 +0530
38. Adverting to the compliance as required under Clause 45 of GCC,
it may be seen that the defendant has not claimed any labour complaint or
dispute in respect of the subject work covered under the work order
Ex.PW1/2. Clause 45 itself provides that in case, no complaint is pending
after three months of completion of work or no communication has been
received from the labour office to this effect till 6 months for completion
of months, it will be deemed to have received the clearance certificate
and the security deposit is liable to be released if otherwise due. It is an
admitted case of the defendant even during cross-examination of DW-1
that the defendant corporation has deducted the security deposit of
Rs.5,51,864/- which has not been released despite submission of bank
guarantee (which is kept alive till 04.12.2026) Ex.PW1/53. Even the
Hon’ble High Court in Sanjeev Kumar (supra) has been clear and
categoric that once the contractor has complied with the stipulations laid
down in clause 17 and 45, the refunds are to be made dehors the payment
of final bill being awaited. In view of the aforesaid discussion, the
plaintiff has been able to show his entitlement even to the security
deposit of Rs. 5,51,864/- against the defendant.
39. Now adverting to claim no. 6 which is a claim regarding the
reimbursement of differential amount of GST @ 6%, it is the case of the
plaintiff that he is entitled to the aforesaid reimbursement on account of
enhancement in GST rates from 12% to 18%. The plaintiff in its
deposition as PW-1 has also made reference to the same. However, it
may be seen that the plaintiff has failed to bring in any clear and cogent
evidence in support of this issue. It may be seen that the differential in
amount of GST shall only be available to the plaintiff once he has
deposited the GST bills with the defendant corporation in terms of
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 37 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:30:39
+0530
Section 31 of CGST Act, 2017 and Rule 46 of CGST Rules framed
thereunder. It is an admitted case of the plaintiff even during his cross-
examination that he has not submitted either the running bills or the final
bills in respect of the work done with the defendant corporation.
Imperatively, the plaintiff cannot claim what he has not spent so far, more
so, when the same pertain to statutory compliance under the CGST Act,
2017. In any case, the plaintiff has utterly failed to substantiate its claim
by any clear or cogent documentary evidence showing such deposit of
initial GST amount much less the differential amounts as claimed. The
claim of the plaintiff is accordingly liable to be rejected when taken on
the yardstick of preponderance of probabilities.
40. Finally adverting to claim no.7 of the plaintiff which is in respect
of an amount of Rs.1,10,488/- (being the compensation amount @ 1% of
the tender value) which the plaintiff has claimed to have been withheld
by the defendant on account of letter dated 27.07.2023 Ex.PW1/45 under
Clause 2 of GCC, it may be seen that the Court has duly dealt with the
aforesaid aspect in the preceding paragraphs while adjudicating issue no.
1 and 2 and holding that the aforesaid amount cannot be charged by the
defendant corporation from the plaintiff in terms of Clause 2 of the GCC
showing an inordinate delay in execution of the work which was on
account of factors attributable either to the defendant on account of delay
in providing clearance for job mix formula and force majeure on account
of COVID-19 conditions in the country leading to a countrywide
lockdown during second phase of COVID-19. Interestingly, the plaintiff
has submitted the extension of time through the EOT proforma
Ex.PW1/42 and admittedly the request of the plaintiff was duly admitted
by the defendant corporation by extending the time for completion of the
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 38 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:30:44
+0530
project uptil 30.11.2021. The plaintiff has admittedly completed the work
within the extended time and as discussed earlier, more so, in the light of
judgment of the Hon’ble High Court in IJM Corporation Berhad
(supra), once the extension is granted, the defendant corporation could
not have imposed the liquidated damages/compensation for delay and
that too for 25 days, the calculation of which has not been explained by
the defendant and also without giving any opportunity to the plaintiff of
being heard and explain the circumstances. Admittedly, no show cause
notice to this effect has been issued by the defendant to the plaintiff
justifying aforesaid action. Thus, taken on the yardstick on the
preponderance of probabilities, the plaintiff succeeds on this count and is
entitled to recovery of Rs.1,10,488/- being the withheld amount against
the defendant.
41. This issue is accordingly decided partly in favour of the plaintiff
and partly in favour of the defendant in view of the aforesaid discussion.
Issue no.4. (4) “Whether the plaintiff is entitled to any damages and if so, at what rate and for what
period?OPP.”
42. The onus of proving this issue was held upon the plaintiff who has
claimed a sum of Rs.6,75,202/- on the plea that the delay in execution of
the work in terms of work order Ex.PW1/2 was not attributable to the
plaintiff at all but was attributable to either force majeure on account of
covid-19 period resulting into a nation wide lockdown with effect from
17.04.2021 to 07.06.2021 and partly to the acts of the defendant who has
failed to provide the job mix formula of BM & BC in time. It has been
contended that going by the contractual amount of work order, the
plaintiff had to execute the work of Rs.1,22,764/- per day and would
have earned a profit of 10% each day. It has been contended that the
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 39 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:30:50 +0530
extended period was 55 days resulting into a possible work of
Rs.67,52,020/- and anticipated profit of Rs.6,75,202/- which the plaintiff
has been lost by keeping the site and office under his cost and
supervision leading to overhead charges as also loss of opportunity to
execute other works thereby increasing its financial credentials which
was never contemplated at the time of quoting the rate for the work in
question. In this regard, though the plaintiff has examined one of his
partners Sh. Nitin Jain, who has even led evidence as Ex.PW1/A,
however, it may be seen that the plaintiff has withdrawn its claim for the
aforesaid amount of Rs.6,75,202/- along with its claimed interest to the
tune of Rs.26,934/- vide its statement dated 08.04.2026. In view of the
aforesaid withdrawal of the claim regarding damages, the Court need not
adjudicate upon the aforesaid issue. The same is, accordingly, decided as
withdrawn against the plaintiff.
Issue no.5: “Whether the plaintiff is entitled to any interest on claimed amount, if so, at
what rate and for what period?OPP.”
43. The onus of proving this issue was also held upon the plaintiff
who has claimed an interest @ 14% per annum on the various
outstanding amount thereby calculating the same in its claim no.9 uptil
the date of institution of the suit and thereafter, at the same rate on the
decreetal amount pendente lite and future till its realisation. For the
purpose of convenience, the amount of interest claimed after withdrawal
of various claims is as under :
Claim No. Description Amount (In Rs.)
9. Interest @ 14% per annum on :
(a) Claim No. 1 & 2 i.e. 20,06,879/-
Rs.1,04,85,413/- w.e.f. 19.07.2022
till 30.11.2023 (499 days)
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 40 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:30:56 +0530
(b) Claim No. 3 i.e. Rs.23,600/- 2,842/-
w/e/f/ 20.01.2023 till 30.11.2023
(314 days)
(c) Claim No. 4 i.e. Rs. 2,89,750/- 39,231/-
w.e.f. 12.12.2022 till 30.11.2023
(353 days) (later restricted on
Rs.2,68,654/-)
(d) Claim No. 8 (withdrawn vide –
statement dated 08.04.2026)
(e) Claim No. 5 i.e. Rs.5,51,864/- 11,642/-
w.e.f. 06.10.2023 till 30.11.2023
(55 days)
44. Ld. Counsel for the plaintiff has argued that defendant have
illegally withheld the amount of bills as the plaintiff has successfully
executed the awarded work within the approved extended time. It has
further been argued that the plaintiff has suffered financial losses as
defendants have failed to release the payments within a period of 6/9
months as required under clause 9 of GCC and hence, the plaintiff is
entitled for the interest on the delayed payment. He has finally argued
that the interest by its very nature is not only corollary to the liability but
is also parasitic in nature. He has relied upon the judgment of Hon’ble
Apex Court in Reliance Cellulose (supra) and of our own Hon’ble High
Court in Shishpal (supra).
45. Refuting the contention, Ld. Counsel for the defendant has
maintained that the plaintiff was in clear violation of the terms of work
order and the applicable GCC which binds the party to the contract and
the plaintiff has admittedly failed to submit the requisite GST paid bills
in terms of Clause 7 and 9 of GCC, thereby dis-entitling him to claim any
interest much less the interest claimed to the tune of Rs.20,87,528/-.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 41 of 47
Digitally signed
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:31:02
+0530
46. If the contentions of the parties are carefully examined in the light
of evidence led and the terms and conditions of work order and GCC, the
following picture emerges :
46.1) In so far as claim 9(a) which is interest on the bill amount
for the period 19.07.2022 till 30.11.2023 to the tune of Rs.20,06,879/- is
concerned, it may be seen that though the plaintiff has clearly deposed
for the aforesaid amount in his deposition as PW-1 relying upon the first
RA bills Ex.PW1/24 and Ex.PW1/25, however, it is an admitted case that
the plaintiff has not submitted any GST paid bills for the aforesaid RA
bills prepared by the defendant. Clause 7 of the GCC specifically
provides that for works estimated to cost over Rs.20,000/-, the interim or
running account bills shall be submitted by the contractor for work
executed on the basis of such recorded measurement on the format of the
department in the triplicate on or before the date of every month of the
fixed for the same by the Engineer-in-Charge and if the contractor fails to
comply with the same, he shall not be entitled to any claim of interest
payable to the contractor. As already discussed and in view of judgment
of our own Hon’ble High Court in North Delhi Municipal Corporation
& Anr. Vs. Sanjeev Kumar (supra), the contractor/plaintiff is under a
mandatory contractual obligation to submit the interim bills, duly
certifying the work which has been carried. Once the same is done, these
bills are required to scrutinize by the Engineer-in-Charge and the work
should be recorded in the measurement book and only thereafter, the
bills should be passed. Thus, what culls out from the aforesaid is that
interest shall accrue only when the plaintiff submits the GST paid bills to
the defendant, however, as already discussed and determined, the
plaintiff has admittedly failed to do so. The plaintiff has even admitted inCS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 42 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:31:08
+0530
his cross-examination as PW1 that he has not submitted any running
bills or the final bill except 10 CA bill. As discussed earlier, under GCC,
the contractor is mandatorily required to submit its own running/final bill
and preparation and passing of any bills suo motu by the defendant is an
internal act of the defendant which obviously cannot substitute or obviate
the contractual requirement of filing the bills by the contractor/plaintiff
even if the same has been accepted by the plaintiff by signing upon it.
Accordingly, no right to claim any interest accrues in favour of the
plaintiff. As such, the plaintiff is not in a position to claim any pre-suit
interest/interest till payment of the RA bill amount by the defendant
during the course of proceedings. The claim of the plaintiff in this regard
is thus liable to be rejected and is accordingly rejected.
46.2) In so far as interest as mentioned in claim No. 9(b) i.e.
Rs.23,600/- w.e.f. 20.01.2023 till 30.11.2023 (314 days) is concerned, in
view of the clear testimony of PW-1, Ex.PW1/28, Ex.PW1/26 and the
discussion on issue no. 3, the plaintiff has been able to show its
entitlement to the interest on aforesaid amount w.e.f. 20.01.2023 (as
claimed) till 30.11.2023. The same is accordingly granted.
46.3) Similarly, in respect of interest as mentioned in Claim No.
9(c) i.e. Rs.2,89,750/- w.e.f. 12.12.2022 till 30.11.2023 (353 days) (later
restricted on Rs.2,68,654/-) is concerned, in view of Ex.PW1/35, the
testimony of PW-1 and the determination of the Court on the entitlement
to the principal amount of Rs.2,68,654/-, the plaintiff shall be entitled to
the interest on such amount w.e.f. 12.12.2022 till 30.11.2023. The same is
accordingly granted.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 43 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:31:13
+0530
46.4) Likewise, in respect of interest as mentioned in claim No.
9(e) i.e. interest on withheld security amount of Rs.5,51,864/-, in view of
Ex.PW1/52, Ex.PW1/53 and the deposition of PW-1 Nitin Jain and the
discussion held in Issue no. 3, the plaintiff shall be entitled to interest on
the aforesaid amount from the date of bank guarantee i.e. 06.10.2023 till
30.11.2023 (55 days). The same is thus also granted.
47. Now the Court has decided the period of interest for each claim,
the question before the Court is regarding rate of interest. It may be seen
that there is no stipulation regarding interest on delayed payment either in
the work order Ex.PW1/2 or the GCC. Though the plaintiff has claimed
interest @ 14% per annum, however, the same does not appear to be
reasonable in view of the judgments of Hon’ble Apex Court reported as
Pt. Munshi Ram @ Associates (P) Ltd. Vs. DDA, 2010 SCC Online
Delhi 2444, Rajendra Construction Co. Vs. Maharashtra Housing &
Area Development Authority and others, 2005 (6) SCC 678, Mc.
Dermott International Inc. Vs. Burn Standard Co. Ltd. and others,
2006 (11) SCC 181, Rajasthan State Road Transport Corporation Vs.
Indag Rubber Ltd., (2006) 7 SCC 700, Krishna Bhagya Jala Nigam
Ltd. Vs. G. Harischandra, 2007 (2) SCC 720& State of Rajasthan Vs.
Ferro Concrete Construction Pvt. Ltd. (2009) 3 Arb. LR 140 (SC)
where the Hon’ble Court has succinctly held that the courts must reduce
the high rates of interest on account of the consistent fall in the rates of
interest in changed economic scenario. The Court is accordingly of the
considered opinion that the plaintiff shall be entitled to a simple interest
@ 6% per annum on the amounts and the period so determined above.
The plaintiff shall further be entitled to interest at the same rate pendente
lite from the date of filing of the suit till the date of this judgment and
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 44 of 47
Digitally signed
MUKESH by MUKESH
KUMAR GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:31:19 +0530
future interest on the principal amount so determined for the period of
delay beyond 60 days of this judgment. This issue is, accordingly decided
in favour of the plaintiff and against the defendant.
ISSUE No.6: (6) Relief
48. In view of the aforesaid discussions and finding of the court on
the aforesaid issues, the court is of the considered opinion that the
plaintiff has been able to successfully prove its entitlement to the reliefs
as discussed above. Accordingly, the plaintiff shall be entitled to
following reliefs:
(i) A decree of declaration thereby declaring letter of intimation
bearing no. D/SE(Pr.)/CNZ-2023-24/102 dated 28.07.2023 issued by the
defendant, claiming a compensation of Rs.1,10,488/- from the plaintiff as
null and void.
(ii) A decree of permanent injunction restraining the defendant, its
officers, representatives etc. from enforcing/implementing the order of
levy of compensation of Rs.1,10,488/- under Clause 2 of the GCC
intimated vide the aforesaid letter dated 28.07.2023 and recovering the
aforesaid amount from the plaintiff.
(iii) A decree of recovery of following amount against the
defendant :
Sr. Particulars Amount Awarded
No.
1. 2nd RA bill of XL-VIII-L(i)UDF Rs. 23,600/-
passed on 20.06.2022
2. 10CA bill submitted on Rs. 2,68,654/-
10.11.2022
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 45 of 47
Digitally signed
by MUKESH
MUKESH KUMAR GUPTA
KUMAR Date:
2026.04.18
GUPTA 18:31:34
+0530
3. Illegal set off intimated through Rs.1,10,488/-
letter dated 28.07.2023
4. Security deposit against BG Rs. 5,51,864/-
submitted by plaintiff on
06.10.2023
Total Rs.9,54,606/-
(iv) An interest @ 6% per annum on the below mentioned amounts
for the periods specified against each amount :
Sr. Principal Interest period Calculated
No. Amount interest
component
1. Rs. 23,600/- 20.01.2023 to Rs.1218.14ps
30.11.2023 (314 days)
2. Rs. 2,68,654/- 12.12.2022 to Rs.15,589.89ps
30.11.2023 (353 days)
3. Rs. 5,51,864/- 06.10.2023 to Rs.4,989.45ps
30.11.2023 (55 days)
Total Rs.21,796.88ps
(rounded off
Rs.21,797/-)
49. The suit of the plaintiff is, accordingly decreed against the
defendant as above . Let the aforesaid principal amount with interest
(pre-suit and pendente lite) amount be paid by the defendant within a
period of 60 days from the date of this judgment, failing which, a
future interest @ 6% per annum shall be payable on the principal
amount for the period of delay beyond 60 days.
50. The suit of the plaintiff is accordingly decreed with interests as
determined above.
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 46 of 47
Digitally signed
by MUKESH
MUKESH KUMAR
GUPTA
KUMAR Date:
GUPTA 2026.04.18
18:31:40
+0530
51. In the specific facts and circumstances of the case, plaintiff shall
also be entitled to the costs of the suit throughout.
52. Decree sheet be drawn accordingly.
53. File be consigned to record room after due completion.
Pronounced in Open Court
MUKESH Digitally signed
today on this 18th day of April, 2026 by MUKESH
KUMAR KUMAR GUPTA
Date: 2026.04.18
GUPTA 18:31:45 +0530
(Mukesh Kumar Gupta)
District Judge (Commercial Court) -07
Central District, THC, Delhi ‘ak’
CS (Comm.) No. 1557/2023 M/s R.K. Goel Abhay Kumar Jain Vs. MCD & Anr. Page no. 47 of 47