* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Pronounced on: January 28, 2013 + CS(OS) No.1439/1991 TEXMACO LIMITED Through ..... Plaintiff Mr.Sumit Sen, Adv. versus THE UNION OF INDIA & ANR ..... Defendants Through Mr.V.P.Dewan, Adv. CORAM: HON'BLE MR.JUSTICE MANMOHAN SINGH MANMOHAN SINGH, J.
1. The plaintiff has filed the abovementioned suit for the recovery of `46,62,917.81/- against the defendants, alleging that the said amount is due and payable to the plaintiff under a contract relating to the work which includes a sum of `32,96,972/- on account of reimbursement of sales tax illegally withheld by the defendants and a further amount of `13,65,945.81/is also payable by the defendants as per details mentioned in para 16 of the plaint.
2. Before referring the facts made by the plaintiff in its plaint, there are certain admitted relevant facts and events which are admitted, the same are: (a) On 8th January, 1983, a Contract Agreement bearing not NH/CPG/MC/S-G/2 AGMT for design, fabrication, supply, erection and commissioning of Spillway Radial Gates, Hoists, Spillway Stop Logs, Drafts Tube Gates and Gantry Craves executed between the Government of India Salal Hydro Electric Project (J&K) and the plaintiff, M/s Texmaco Ltd., Calcutta on whose behalf Mr.P.K.Ray, G.M. (Sales) had signed the agreement. Before that, on 21st June, 1982, a notice inviting Tender not NH/CPG/MCS-G/2 for the above said work was issued and on 2nd August, 1982, tenders were opened. (b) On 21st October, 1982, Letter of Award not NH/CPG/MC/SG/1508-11 was issued by the defendants on behalf of the President of India to the plaintiff for the above said work. On 22nd October, 1982, the plaintiff issued the letter of unconditional acceptance through its General Sales Manager (S&M), Mr.P.K.Ray. (c) The plaintiff submitted first bill for payment on 30th April, 1985. The work was completed on 30th October, 1987 on which date the plaintiff had received a total sum of `9,81,72,780.63/- up to 27th RA Bill. On 6th July, 1987, the plaintiff received the last payment of 27th RA Bill for `7,92,960/- less recoveries made therein. The bill was accepted by the plaintiff. (d) On 29th June, 1988 the completion certification was issued whereas the completion of defect liability period was up to 30 th October, 1988. (e) In the year 1989, the plaintiff moved an application under Section 20 of the Arbitration Act, 1940 for appointment of Arbitrator and reference of disputes. On 25th November, 1990, the plaintiff raised a final bill for the balance amount of `46,62,917.87/-.
3. The case of the plaintiff is that the agreement dated 8th January, 1983 was entered into by the plaintiff with the defendants for the work in question pertaining to project situated at Jyotipuram in the state of Jammu and Kashmir. Earlier, in the notice inviting tender dated 21st June, 1982 for the work, it was represented by the defendants to the plaintiff that no central or state sales tax on completed work under the prospective contract to be executed was payable at the time of issuing notice inviting tender and if such taxes in fact became payable due to change in the law subsequent to the signing of the contract, during the currency thereof, the same would be reimbursed by the defendants on production of proof of payment. The plaintiff has relied upon Clause 50.6 of the Contract.
4. The plaintiff has averred in the plaint that acting upon the aforesaid representation contained in the notice the plaintiff made an offer dated 1st August, 1982 pointing out to the defendants that the contract was a work contract and in the event Sales tax or any other tax, duties were decided by the Taxing Authorities as payable, the same would be extra and payable by the defendants. The plaintiff states that it was in view of the above representation, that an agreement dated 8th January, 1983 was entered into between the parties. And as per relevant clauses of the agreement, the prices indicated in the schedule of items and rates for fabrication, supply, transport and erection were based on the basis that the said contract was a Works Contract and in the event Sales tax and any other taxes duties were decided by the Taxation Authorities as payable the same were to be reimbursed by the defendants as actually paid by the plaintiff on the production of documentary guidance to such effect. The plaintiff has in paragraph 7 stated that during the progress of the work when a consignment of fabricated materials from Calcutta was being brought to the State of Jammu and Kashmir for erection at the site the same was stopped the J & K Check post and demand for Sales tax was raised and the Sales tax Authorities levied sales tax @ 40% and 50% surcharge thereon on the value of the completed work. The plaintiff submits that as per Clause 50.6 of the aforesaid contract, it was apprised to the defendants that they are liable to reimburse the said amount of sales tax including surcharge thereon as levied by the Taxing Authorities and/or the Sales Tax Authorities in Jammu and Kashmir from time to time. The proposal was made by defendants that the plaintiff should include the amount of sales tax in their running bills raised by the plaintiff from time to time and the defendants, instead of paying the amount of State Sales tax to the plaintiff would pay the same directly to the government of Jammu and Kashmir.
5. The said proposal was accepted by the plaintiff and the same was duly acted upon and the plaintiff continued to make such payment of State Sales tax up to the date of completion of the work and the receipts for such payment of sales tax were obtained by the defendants. Thus, according to the plaintiff, the modality for reimbursement of the amount of sales tax as provided under Clause 50.6 of the Contract was modified by mutual agreement. The said arrangement of payment of sales tax by the defendants was discontinued in view of letter issued by the defendants to the plaintiff who received the same on 2nd April, 1987 from the defendants directing the plaintiff to deposit amounts of Sales tax payable to the Taxation Authorities and/or Sales Tax Authorities directly and claim reimbursement from the defendants on production of documentary evidence as originally contemplated by Clause 50.6 of the said contract.
6. The case of the defendants in their written statement is that the alleged suit amount is not due and legally recoverable by the plaintiff under the said contract from the defendants. It is alleged that on the contrary, the plaintiff is liable to pay a sum of `39,47,633.71/- to the defendants pertaining to the contracted work for which the defendants have filed their counter claim. As per final account of work, a total sum of `9,58,18,480.86/- was payable to the plaintiff on account of work executed by it under the contract agreement. The defendants have released and paid a total sum of `9,81,72,180.63/- to the plaintiff company. As such the plaintiff had received an excess payment of `23,54,299.77/- from the defendant as alleged in para 4(i) of the counter claim. In addition to the excess payment made, the plaintiff company is further liable to pay a sum of `15,93,364/- on account of miscellaneous recoveries as detailed in paras 4(ii) to 4(ix) of the counter claim.
7. Both the parties agreed to carry out admission and denial of documents by way of statement in writing. Exhibits were marked on the documents on 2nd August, 1996. The admitted documents of the plaintiff were marked as Ex.P-1 to Ex.P-7, the details of which are given as under:Ex.P-1 Letter not ME/GC/HM/Acctt/7945-46 dated 20th May, 1988 from the Government of India, Office of the Manager, Generation Complex, Jyotipuram to the plaintiff. Ex.P-2 Letter not HH/Contracts/MC/SL/ST/2830-32 dated 23rd March, 1990 from defendant No.2 to the plaintiff. Ex.P-3 Letter not SE/PKR/6078/ST/Arb./1161 dated 7th April, 1990 from the plaintiff to defendant No.2. Ex.P-4 Letter not SE/PKR/6078/ST/Arb./701 dated 28th April, 1990 from the plaintiff to defendant No.2. Ex.P-5 Letter not SE/PKR/6078/ST/Arb./1712 dated 10th June, 1990 from the plaintiff to defendant No.2. Ex.P-6 Letter not SME/EGC/Texmaco/90/7476-79 dated 12th June, 1990 from defendant No.2 to the plaintiff. Ex.P-7 Letter not SMF/EGC/HM/3678-82 dated 9th April, 1991 from the defendant to plaintiff. Ex.PW-1/2 Certificate dated 22nd November, 2000 issued by the Sr.Vice President (Coml.) & Company Secretary of the plaintiff confirming Mr.R.C.Chopra being in gainful employment of the company and designated as Vice President (Engineering & Marketing) Structural & Rolling Stock. This document was exhibited during examination of witness.
8. Admitted documents of the defendants are the Running Account Bills which are from pages 1 to 1784 as contained in 8 files. These documents were marked as Ex.D-1 to Ex.D-8 (Collectively) and were kept in the box and sealed. Other documents were denied by the plaintiff and kept in the same box.
9. On the pleadings of the parties, the following issues were framed on 5th October, 1998:1. Whether the suit has been instituted and the plaint has been signed and verified by a duly authorized person? (OPP) 2. Whether the limitation? 3. Whether the suit is barred under Order 2 Rule 2 CPC? (OPD) 4. Whether the present suit is barred under Clause 57.5 of the General Conditions of Contract Agreement entered into between the parties on 8.1.1983? (OPD) 5. Whether there is any cause of action for the suit? 6. Whether Clause 50.6 of the General Conditions of Contract dated 8.1.1983 stood amended at the behest of the plaintiff and if so, its effect? 7. Whether the Sales Tax on Works Contract was not in force in the State of Jammu & Kashmir when the work in question was awarded to the plaintiff on 21.10.1982 and if so, its effect? 8. Whether the plaintiff is entitled to claim reimbursement of sales tax paid by it amounting to Rs.32,96,972/- with interest thereon in terms of Clauses 50.5 and 50.6 of the General Conditions of Contract entered into between the parties on 8.1.1983? (OPP) CS(OS) No. 1439/1991 suit of the plaintiff is barred by (OPP) 9. Whether the defendant has wrongly detained payments under the final bill of the plaintiff dated 25.11.1991 and if so, whether the plaintiff is entitled to payment of the amount as claimed therein? (OPP) 10. Whether the plaintiff is entitled to interest, and if so, at what rate and for which period? 10. The plaintiff filed three affidavits in evidence of Sh.Ramesh Chandra Chopra, Vice President (Structural) of the plaintiff marked as Ex.PW1/1, Sh.P.D.Aggarwal, Deputy General Manager marked as Ex.PW2/1 and Sh.S.K.Roy Choudhary, Deputy General Manager. The defendants filed two affidavits in evidence of Sh.V.K.Talwar, Deputy Manager (Mechanical) and Sh.S.C.Tagotra, Asstt. Accounts Officer (F&A).
11. In this matter, rejoinder arguments were not addressed by the plaintiffs counsel, rather the counsel made the statement that he would be filing the written submissions to the arguments advanced by the defendants counsel. The judgment was reserved on 22 nd December, 2009. Since the written submissions were not filed, the matter was listed before Court. The plaintiffs counsel filed the written submissions in July, 2010. During the hearing conducted on 16th July, 2010, the proposal for settlement was also given by the parties. settlement. The matter was adjourned from time to time for In August, 2010 it was informed by the parties that the settlement is not possible. This matter was reserved for judgment. On 3rd June, 2011 the matter was listed before the Court for clarification about the outcome of the arbitration proceedings between the parties. It was informed by the counsels that the arbitration proceedings were decided against the plaintiff and copy of the judgment was also produced by them. While dictating the judgment, it was noticed that the documents filed by the defendants were lying in a trunk which was not traceable. Directions were issued by the Court to trace out the said documents by order dated 2nd November, 2012 and 16th November, 2012. It was informed on 23rd November, 2012 that the trunk containing the exhibited documents filed and referred by the defendants have been traced out by the Registry, thus the matter was listed on 28th January, 2013 for pronouncement of judgment.
12. Issues No.1 to 5 were framed on the basis of preliminary objections raised by the defendants. They were raised as preliminary issues. However, trial in the matter was proceeded further. Thus, as raised by the defendants, the same are to be considered at this final stage. ISSUE NO.1: Whether the suit has been instituted and the plaint has been signed and verified by a duly authorized person? (OPP) 13. The burden of proving Issue No.1 is on the plaintiff. The plaint was signed and verified by Mr.P.K.Ray who is admittedly not produced as a witness. In para 24 of the plaint, it is stated that by and under a power of attorney dated 4th May, 1990 and in pursuant thereof Mr.P.K.Ray, General Manager and Marketing Instructor of the plaintiff company, was duly empowered and authorized to institute the present suit. The original power of attorney which is duly attested under Section 8 of the Notaries Act, 1958 along with the list of document was placed on record. The said power of attorney was used by Mr.P.K.Ray in various other litigations between the parties including the proceedings earlier pending in this Court under Sections 8 and 20 of the Arbitration Act, 1940. PW-1 Mr.R.C.Chopra in his testimony stated in para 2 of his affidavit (Ex.PW-1/A) that the power of attorney was executed by Mr.K.K.Dutt of the plaintiff company in pursuant of the Board of Directors Resolution dated 20th November, 1984. In his cross examination recorded on 30th October, 2000, PW-1 was asked as to whether he had brought the minute books of the company containing Board of Directors Resolution passed on 20th November, 1984 authorizing Mr.K.K.Dutt, Director, to issue power of attorney to Mr.P.K.Ray. In reply to the said question, PW-1 stated that he can produce the same if the same is required by the Court. The Joint Registrar in his cross-examination asked the PW-1 to bring the minute books in question on the next date. It was informed to the Joint Registrar by PW-1 that since the minute book is a bulky document therefore it could not be brought by him. He placed on record a certificate dated 22nd November, 2000 (Ex.PW-1/2) from the Secretary of the Company confirming that Mr.P.K.Ray was in gainful employment of the plaintiff company since 1st April, 1964.
14. The contention of the learned counsel for the defendants is that the plaint has been signed and verified by Mr.P.K.Ray. The plaintiff has not been able to prove at all his authority. Therefore, the suit is liable to be dismissed even for non-compliance of production of minute books as per order of the Joint Registrar. It is not in dispute that the power of attorney placed on record by the plaintiff was duly attested under Section 8 of the Notaries Act, 1958 and the plaintiff has filed the original power of attorney of Mr.P.K.Ray. The said power of attorney was earlier used by Mr.P.K.Ray in the arbitration proceedings between the parties. In cross-examination recorded on 27th November, 2000, witness brought a certificate from the Secretary of the Company confirming that Mr.P.K.Ray was under the employment of the plaintiff-company since 1st April, 1964. From the record, it is evident that the Contract Agreement was signed by Mr.P.K.Ray as General Manager on behalf of the plaintiff i.e. Texmaco Ltd. The power of attorney is executed by the plaintiff and authenticated by a Notary Public under Section 85 of the Indian Evidence Act, 1872 which reads as under:
85. Presumption as to powers-of-attorney.The Court shall presume that every document purporting to be a power-of-attorney, and to have been executed before, and authenticated by, a Notary Public, or any Court, Judge, Magistrate, [Indian] Consul or ViceConsul, or representative of the [Central Government], was so executed and authenticated. Under the above provision of law, it is clear that the Court is bound to presume that the power of attorney executed and authenticated by a Notary Public was duly executed and authenticated. In other words, there is a presumption of valid execution and authentication of the power of attorney. The burden immediately shifts to the party, who is objecting, to prove that the power of attorney was not duly executed and authenticated. There is no material on record to show that the power of attorney produced by the plaintiff was not only executed or authenticated by the plaintiff. Therefore, I hold that the power of attorney executed and authenticated by the Notary Public is a valid power of attorney within the meaning of Section 85 of the Indian Evidence Act. Thus, Issue No.1 is decided in favour of the plaintiff and against the defendants. ISSUE NO.2: Whether the suit of the plaintiff is barred by limitation? (OPP) 15. The plaintiff in the instant case was awarded contract work in question on 21st October, 1982 which was admittedly completed on 31st October, 1987. The plaintiff had received the last payment of 27 th RA Bill for `7,92,690/- dated 6th July, 1987. The present suit by the plaintiff was filed in the month of April, 1991. The plaintiff has pleaded in para 22 of the plaint that the cause of action arose for the first time on 30th April, 1985 when the plaintiff submitted the first bill and thereafter the cause of action arose from time to time when intermediate bills including the amount due and payable as sales tax, as deducted by the defendants. The plaintiff has further contended that the cause of action continues as the defendants failed and neglected to pay the bill containing the final amount dated 25th November, 1990 aggregating to `46,62,917.81 which includes the amount of sales tax due and payable and the defendant refused to pay the same.
16. Admittedly, the completion certificate was issued on 29th June, 1988. The last date of completion of defect liability period. In 1989, the plaintiff moved an application under Section 20 of the Arbitration Act, 1940. Many communications between the parties with regard to dispute between the period; from 1988 to 1990 were made. The final bill raised by the plaintiff in the year 1990. Even Ex.DW-2/1 and DW-2/2 on the basis of which, the defendants have filed the counter claim, the said letters are of the year 1991-92 with regard to excess payments received by the plaintiff as well as from the Ex.DW-1/2 to DW-1/5 the documents in respect of material supplied to the plaintiff. These documents filed by the defendants on the face of it established that it was continuous course of action. It is also a matter of fact that the defendants themselves have refused the claim of the plaintiff by virtue of letter dated 23rd March, 1990 (Ex.P-2). The suit was filed in the year 1991 which was within the period of limitation. Thus, Issue No.2 is decided in favour of the plaintiff and against the defendants. ISSUE NO.5: Whether there is any cause of action for the suit? (OPD) 17. Burden of proof on this issues lies on the defendants. On this issue it was submitted by the defendants that the present suit has been filed against the Union of India. But, no notice which is mandatory under Section 80 CPC was served upon the defendants. The contract agreement dated 8th January, 1983 was executed by and between the Government of India through its agents and plaintiff.
18. PW-1 in his affidavit (exhibited as Ex.PW-1/1) stated that the notice date 6th December, 1990, under Section 80 of the Code of Civil Procedure 1908, was duly served and delivered in the office of the defendants which was delivered and/or received by the Secretary, Ministry of Energy, Shastri Bhawan, New Delhi-110001, on 10th December, 1990. It was further stated that since the acknowledgement card of the notice addressed by the plaintiff to the defendant was received back without any signature evidencing receipt of the said notice, a certificate has been obtained from the Sub-Post Master, Agarpara Post Office, which shows that the said notice was delivered and/or received by the defendant on 11th December, 1990. He further stated in the affidavit that letter dated 30th December, 1990, was written by Mr.P.K.Ray, the then General Manager (Marketing Structural), of the plaintiff. PW-1 stated that he was familiar with the signature of Mr.P.K.Ray and could identify the same and identified the same. He stated that the certificate of the Sub-Post Master, Agarpara Post Office, 24-Parganas, West Bengal, would clearly establish that the notice under Section 80 CPC was duly served upon the defendants. During his cross-examination dated 27th February, 2001, he did not remember who got that notice typed and posted to the Union of India and did not remember whether the same have been filed in the Court or are kept in Calcutta office of the plaintiffCompany. After having gone through the evidence and documents placed on record by the plaintiff in support of the statement made by PW-1 in the above said paras, it is clear that notice was delivered and/or received by the defendants.
19. Further, once the legal proceedings are continued to the hilt, the plaintiff should not be thrown on account of technical issues in the absence of proof of evidence produced by a party who raised the objection. In view of the statement made in paras 3 and 4 of the affidavit along with the original documents from the post office, it is indicated that the notice under Section 80 CPC was delivered to the defendants. There is also no contrary evidence produced by the defendants on this aspect. With regard to other objection raised by the defendant on this issue, the same would be discussed when the Issues No.3, 4 and 6 to 10 are decided. As regards service of notice, issue No.5 is decided in favour of the plaintiff and against the defendants. ISSUES NO.3, 4 & 6 to 10:
3. Whether the suit is barred under Order 2 Rule 2 CPC? (OPD) 4. Whether the present suit is barred under Clause 57.5 of the General Conditions of Contract Agreement entered into between the parties on 8.1.1983? (OPD) 6. Whether Clause 50.6 of the General Conditions of Contract dated 8.1.1983 stood amended at the behest of the plaintiff and if so, its effect? 7. Whether the Sales Tax on Works Contract was not in force in the State of Jammu & Kashmir when the work in question was awarded to the plaintiff on 21.10.1982 and if so, its effect? 8. Whether the plaintiff is entitled to claim reimbursement of sales tax paid by it amounting to Rs.32,96,972/- with interest thereon in terms of Clauses 50.5 and 50.6 of the General Conditions of Contract entered into between the parties on 8.1.1983? (OPP) 9. Whether the defendant has wrongly detained payments under the final bill of the plaintiff dated 25.11.1991 and if so, whether the plaintiff is entitled to payment of the amount as claimed therein? (OPP) 10.
20. Whether the plaintiff is entitled to interest, and if so, at what rate and for which period? As the issues No.3, 4 and 6 to 10 are inter-related with each other, therefore, they are being considered together.
21. Issue No.8 is whether the plaintiff is entitled to claim reimbursement of sales tax paid by the plaintiff amounting to `32,96,972/- with interest. The burden of proof with regard to issues No.6, 7 and 9 is upon the plaintiff. Similarly, burden of proof with regard to issues No.3 and 4 is upon the defendants.
22. PW-1 R.C.Chopra in his affidavit marked as Ex.PW-1/1, stated that Clause (1) of the Definition Clause of the Jammu & Kashmir General Sales Tax Act, 1962, was amended with, and deemed to have come into force from July 1, 1981. By the above amendment and the definition of sale was amended to involve transfer of property in goods involved in the execution of Works Contract. He further stated that when the notice inviting tender was issued on June 1, 1982, and tenders were opened on August 2, 1982, the charting Section 4 of the Jammu and Kashmir General Sales Tax Act, 1962, had not been given effect to by the State of Jammu & Kashmir. It was in this context that after the date of opening of tender and during negotiations, the representatives of the plaintiff, which included PW-1, insisted on framing Clause 50.6 by which the defendant would be liable to reimburse to the plaintiff any taxes/duties as decided by the Taxation Authorities as payable.
23. He deposed that the defendant took recourse to Section 16-C of the Jammu & Kashmir Sales Tax Act, 1962. The actual levy was made officially much later. The intention of incorporating Clause 50.6 of the Conditions of Contract was that any liability of the plaintiff to pay sales tax on works contract would be an official determination of liability by the Taxation Authorities to pay a particular amount, and/or the computation of the stated amount of tax, after the date of opening of tender, subsequent to the signing of the Contract. PW-1 further stated that in computing the measure of tax and the taxable turn over on the tax already paid by the plaintiff, additional deductions are due to them under the following heads:(a) Labour Charges for execution of the works. (b) Amount paid to a Sub-Contractor for Labour and Services. (c) Charges for Planning, Designing and Architects Fees. (d) Charges for obtaining on hire, or otherwise machinery and tools used for the execution of Works Contract. (e) Cost of consumables such as Water, Electricity, Fuel etc., used in the execution of the Work Contract, the property in which is not transferred in the course of execution of a Works Contract and, (f) Cost of establishment of the Contractor to the extent it is relatable to supply of Labour and Services. (g) Other similar expenses relatable to supply of Labour and Services. (h) Profit earned by the Contractor to the extent it is relatable to supply of labour and services. (i) Apart from the deductions referred to above, credit has to be given to goods covered under Sections 14 and 15 of the Central Sales Tax Act.
24. PW-2 P.D. Agarwal, in his affidavit Ex.PW-2/1, stated that he is Deputy General Manager (Finance) and earlier he was Finance Manager when the contract was executed. He stated that out of amount of `46,62,917.81p an amount of `32,96,972/- has been claimed by the plaintiff for reimbursement of sales tax on transfer of property and goods in Works Contract as mutually agreed upon by the parties. The balance of `13,65,945/- is against items of work executed by the plaintiff under the Schedules of Quantities and Bids, and calculated upon price mutually agreed upon by the parties. It also includes escalation as due to the plaintiff as mutually agreed upon under the contractual terms. He stated that the final bill dated 25th November, 1990, raised by the plaintiff gives the comprehensive and correct statement of accounts between the parties regarding execution of work under the contract. The statements in the final bill raised by the plaintiff are true and correct and follow the contractual procedures and/or agreement between the parties.
25. DW-1 V.K.Talwar in his affidavit which is marked as Ex.DW-1/A has made the similar statement as mentioned in the written statement. It is denied by him that the plaintiff is entitled for the recovery of `46,62,917.81. He has made a statement in paras 11 & 12 of his affidavit that the plaintiff company while submitting its offer suggested that the clause 50.6 of tender conditions be modified which is that, the prices indicated in the schedule of items and rates for fabrication, supply, transport and erection are based on this contract being considered as a Works Contract. However, in case sales-tax and any other taxes/duties are decided by the taxation authorities as payable, the same will be reimbursed by the Corporation to the contractor as actually paid by them on the production of documentary evidence to this effect. Excise duty will also be paid to the contractor for the purchase of bought out items required for execution of the work under the contract. The contractor has considered the rate of sales tax as payable at the time of tendering i.e. on 01/08/1982 and for any increase in the said rate, the extra cost incurred on account of increased rate of sales-tax will be reimbursed by the Corporation to the contractor on the production of documentary evidence in this regard. He also stated in his affidavit that the plaintiff company insisted for the aforesaid amended clause and accordingly, the original clause 50.6 was amended as proposed by the plaintiff. According to this amended clause, the price indicated in the schedule of items and rates were based on considering the contract in question as the Works Contract, and in case sales-tax on works contract are decided by the taxing authorities as payable, the same shall be reimbursed by the defendant-corporation. It may be mentioned here that when the work was awarded to the plaintiff on 21/10/1982, sales tax on Works Contract was already in force in the State of J & K w.e.f. 01/07/1981, and, since the sales-tax authorities after the award of work, defendant corporation is not liable under the contract to reimburse any amount of sales tax paid by the plaintiff on Works Contract. It is also stated by him that the defendants duly informed the plaintiff vide their letter dated 23/03/1990 that the sales tax is not payable to the plaintiff as per the provision of the contract. It is further submitted that an amount of `32,96,972.43 (Rupees Thirty Two Lacs Ninety Six Thousand Nine Hundred Seventy Two and paise Forty Three Only) is recoverable from the plaintiff as it is the liability of plaintiff to pay the sales tax under the terms of the contract. No amount much less the suit amount is due and legally recoverable from the defendant by the plaintiff. Even otherwise, the suit of the plaintiff is barred by time.
26. This Court has gone through the cross-examination of the witnesses of the parties.
27. Let me now first refer the few relevant Clauses of General Conditions of the Contract (G.C.C.) are reproduced hereunder : Clause 50.6 The period indicated in the schedule of items and rates for fabrication, supply, transport and erection are based on this contract being considered as a Work Contract. However, in case Sales Tax and any other taxes/duties are decided by the taxation authorities is payable, the same will be reimbursed by the Corporation to the contractor as actually paid by them or the production of documentary evidence to this effect. Excise duty will also be paid to the contractor. For the purchase of bought out items required for execution of the work under the contract the contractor has considered the rate of Sales Tax as payable at the time of tendering i.e. 1.8.82 and for any increase in the said rate, the extra cost incurred on account of increased rate of Sales Tax will be reimbursed by the corporation to the contractor on the production of documentary evidence in this regard. 50.7 Notwithstanding anything contained in this whole clause, the contractor shall not be entitled to obtain increase in any of the above specified items of escalation that may arise after the completion dates stipulated in this contract, unless extended by the Engineer-in-Charge on the basis of delays on account of .conditions. Clause 51: Over Payments and Under Payments Whenever any claim whatsoever for the payment of a sum of money to the corporation arising out of or under this contract against the contractor, the same may be deducted by the corporation from any sum then due or which at any time thereafter may become due to the contractor under this contract and failing that under any other contract with the corporation or from any other sum whatsoever due to the contractor from the corporation or from his security deposit or he shall pay the claim on demand. 51.2 The corporation reserve the time to carry out post payment audit and technical examination of the final bill including all supporting vouchers, abstracts etc. The corporation further reserves the right to enforce recovery of any overpayment when detected, notwithstanding the fact that the amount of the final bill may be included by one of the parties as an item of dispute before an arbitrator appointed under Clause 57 of this contract and notwithstanding the fact that the amount of the final bill figures in the arbitration award. 51.3 If as a result of such audit and technical examination any over payment is discovered in respect of any work done by the contractor or alleged to have been done by him under the contract, it shall be recovered by the corporation from the contractor by any or all the methods. Clause 53. Payment of Final Bill The final bill shall be submitted by the contractor within one month of the date, the certificate of completion furnished by the Engineer-in-Charge. No further claim in this regard unless as specified herein under shall be entertained. Payment shall be made within three months if the amount of the contract plus that of additional items is upto Rs.2 lakhs and in 6 months, if the same exceeds Rs.2 lakhs and submission of such bill. If there shall be any dispute about any item or items of the work then the undisputed item or items only shall be paid within the said period of three months or six months, as the case may be. The contractor shall submit a list of the disputed items within thirty days from the disallowance thereof and if he fails to do so, his claim shall be deemed to have been fully waived and absolutely extinguished. Clause 57: Arbitration 57.1 Except as otherwise provided, in clause 56 herein before, all questions, disputes, or differences in respect of which the decision has not been final and conclusive, arising between the contractor and the Corporation, in relation to or in connection with the contract shall be referred for arbitration in the manner provided as under and to the sole arbitrator appointed as follows : (i) Either of the parties may give to the other notice in writing of the existence of such questions, dispute or difference; (ii) Within thirty (30) days of receipt of such notice from either party the Chief Engineer in charge of work at the time of such dispute shall send to the contractor a panel of three persons (not employees of the corporation) and thereafter the contractor within fifteen (15) days of receipt of such panel communicate to the Chief Engineer the name of one of the persons from such panel and such a person shall then be appointed sole arbitrator by the Chief Engineer. (iii) Provided that if the contractor fails to communicate the selection of a name out of the panel so forwarded to him by the Chief Engineer then after the expiry of the aforesaid stipulated period the Chief Engineer shall without delay select one person from the aforesaid panel and appoint him as the sole Arbitrator. 57.5 A notice of the existence in question, dispute or difference in connection with the contract, unless served by either party within 30 days of the expiry of the Maintenance/Defects Liability Period, failing which all rights and claim under this contract shall be deemed to have been waived and thus forfeited and absolutely barred.
28. The first and foremost objection of the defendants is that the suit is barred under Order II Rule 2 CPC as alleged in the preliminary objection No.4 of their written statement as the plaintiff omitted to sue the defendants for the alleged relief of recovery of suit amount, which it was entitled to claim in respect of the same cause of action in its previously instituted suit under Section 8 and 20 of the Indian Arbitration Act, 1940 against the defendants, bearing Suit No.1881 of 1989 pending between the same parties in the High Court of Delhi at New Delhi when the present suit was filed in the year 1991.
29. Issue No.3 was framed on the basis of objection raised by the defendants in their preliminary objections of the written statement. In para 17 of the plaint, it was averred by the plaintiff that in terms of the arbitration clause referred to in the said agreement, the same was invoked by the plaintiff but the defendant rejected the request of the plaintiff for making reference of the said dispute relating to the payment of suit amount to arbitration, therefore, the present suit has been filed. It is also stated in para 18 of the plaint that in view of refusal on behalf of defendants the plaintiff raised other claims on account of excess weight of the material consumed by filing of petition under Sections 8 and 20 of the Arbitration Act, 1940 (being suit No.1881 of 1989) prior to the present suit. The case of the plaintiff is that as the defendants failed to pay the suit amount of `46,62,917.81/- in gross violation of the terms and conditions of the said agreement, after serving a legal notice under Section 80 of the Code of Civil Procedure issued to the defendant-Secretary, Ministry of Energy, Union of India, the present suit for recovery of the said amount was filed.
30. PW-1 (Sh. R.C. Chopra) has stated in para 4 of his affidavit/evidence that the said legal notice was issued to the UOI. In the cross examination, dated 26th January, 2001, PW-1 has admitted that apart from the present suit there is another claim against the defendant No.2 which was referred to arbitration. It is correct that the arbitration claim was raised prior to the filing of present suit. It is correct that the suit No. of that arbitration case is 1881/1989. The arbitration claim pertains to the sue of steel in excess of contract requirement. PW-1 admitted that the Arbitrator rejected their claim. It is also correct that the petition for appointment of arbitrator, was made with regard to the claim arising out of contract, volunteered these are legal matters so I do not understand the same. It is correct that the present claim also arose out of the same contract.
31. It is the case of the defendants in their pleading and evidence that the plaintiff is barred from claiming the suit amount from the defendant under Clause 57.5 of the General Conditions of the Contract Agreement dated 8th January, 1983. The relevant Clause 57.5 stipulate that a notice of the existence of question, dispute or difference in connection with the contract unless served by either maintenance/defects liability party within 30 days of the expiry of period failing which all rights and claims under this contract shall be deemed to have been waived, forfeited and absolutely barred. Issue No.4 is framed and burden thereupon was put on the defendants. It has not come in the evidence of the plaintiff that before resorting to any litigation and/or invoking the arbitration clause it is pre-condition imposed upon both the parties in question to serve a notice of existence of dispute or difference in question within 30 days from the date of expiry of defect liability period.
32. Under the provisions of Section 28 (b) of the Indian Contract Act, such a provision in the contract were valid prior to amendment of Section 28 of Indian Contract Act which was done in 1997 and since cause of action is prior to 1997, adherence to such a provision is mandatory and cannot be avoided. Clause 57 is the arbitration clause which lays down the procedure and process for the appointment of arbitrator and as such the importance of Clause 57.5 cannot be ignored. Record revealed that the plaintiff has not served such a notice as contemplated under Clause 57.5 of General Conditions of the Contract.
33. Issue No.6 is as to whether Clause 50.6 of the General Conditions of the Contract dated 8th January, 1983 stood amended at the behest of the plaintiff. It is necessary to examine paras of the plaint and Clause 50.6 of the General Conditions of Contract which are to be referred for deciding this issue. The plaintiff has not brought on record any documentary evidence to establish that contractual Clause 50.6 was not got amended at the behest of the plaintiff company. In reply to para 4 of the plaint, the defendants have contended that the contents of para 4 of the plaint as alleged were wrong and denied. It is not in dispute that the plaintiff company while submitting its offer, suggested that Clause 50.6 of tender condition be modified which has been reproduced under para 4 of the written statement. The plaintiff has relied upon the original Clause 50.6 of GCC which has been reproduced in para 4 of the plaint. According to this amended Clause 50.6 as contained in the contract agreement dated 8th January, 1983 the price indicated in the Schedule of Items and rates were based on considering the contract in question as the Works Contract, and in case Sales Tax on works contract is decided by the Taxing Authorities as payable, the same shall be reimbursed by the defendant. When the work was awarded to the plaintiff on 21st October, 1982, deduction of tax in Works contract was already in force in the State of J & K w.e.f. 1st July, 1981. The plaintiff is claiming the said amount which has been deduced in compliance to existing statutory provisions of J & K Sales Tax Act. Clause 50.5 of GCC all existing Sales Tax or any other tax and increase, if any, on these during the currency of contract that the contractor has to purchase for the fabrication of the finished materials and for the erection/installation at site of the work for the performance of the contract shall be payable by the contractor and the corporation will not entertain any claim for compensation whatsoever in this regard.
34. The plaintiff has not filed any assessment to establish that Sales Tax Authorities have decided any tax in works contract nor have submitted any documentary proof that they have actually paid the taxes as decided by the Taxation Authorities as payable nor any document in support has been exhibited/proved in order to receive the reimbursement of the said amount under amended contractual Clause 50.6 to reimburse any amount of sales tax. PW 1 (R.C. Chopra) during his cross examination dated 27th February, 2001 has admitted that Mr.P.K.Ray was the person of plaintiff who had a discussion after the date of opening of tender with the defendants regarding framing of Clause 50.6 of GCC in question. PW 1 in his crossexamination stated that he does not remember what was the outcome of discussion between the parties regarding Clause 50.6 of GCC. The plaintiff has not produced Shri P.L. Ray as witness in this case though his affidavit was filed which is placed on record.
35. So the plea of the plaintiff that the Clause 50.6 was amended at the behest of the plaintiff would remain as plea as there is no evidence in rebuttal produced by the plaintiff in this regard. In order to decide the effect of amended clause as contained in the Contract Agreement is that the plaintiff should have produced the order or the Taxation Authority wherein he has been assessed in works contract and submit proof that he has paid tax.
36. DW-1 Mr.V.K. Talwar in his statement has referred the case of the defendants that the State Sales Tax in Works Contract was already in force in the State of Jammu & Kashmir when the work was awarded to the plaintiff on 21st October, 1982 and it was payable by the Tenderer including the plaintiff on the date of Tender i.e. 21st June, 1982.
37. It was the case of the defendants that, if such Taxes due to change in law subsequent to the date of signing of contract dated 8th January, 1983, are payable by the plaintiff, the same would be reimbursed by the defendant on production of proof of payment. As per Clause 50.6 of G.C.C., the contractor had considered the rate of Sales Tax as payable at the time of tendering i.e. on 1st August, 1982 and for any increase in the said rate, the extra cost incurred on account of increased rate of sales tax will be reimbursed by the defendant corporation to the contractor on the production of documentary evidence in this regard. It is argued by the defendants that according to this Clause the price indicated in the schedule of items and rates were based on considering the contract in question as the works contract and in case sales tax on the works contract was decided by the Taxation Authorities as payable, the same shall be reimbursed by the defendants.
38. During the cross examination of PW 1.was unable to point out if any new tax or duty other then existing on the date of tendering was levied by the State of J & K till completion of the contract. The plaintiff has nowhere even pleaded in the plaint that during the currency of the contract J & K Sales Tax was ever amended or that new taxes or duties were levied and imposed under the Statute as contemplated under Clauses 50.5(b) and 50.6 of G.C.C. The burden of proof of Issue No.8 is on the plaintiff. The plaintiff is purporting to claim the alleged amount of `32,96,972/- with interest thereon in terms of Clauses 50.5(b) and 50.6 of General Conditions of Contract entered into between the parties on 8th January, 1983.
39. The plaintiff nowhere pleaded in the plaint that if any new tax or duty other than existing on the date of tendering was levied by the State of J & K till the completion of the contract. No evidence has been brought on record to the effect that even after the 46th amendment of the Constitution of India, the State of J & K had actually amended their sales tax laws during the currency of the contract in question. The plaintiff has not produced and proved on record any valid document to establish their claim of reimbursement. It was necessary on the part of the plaintiff under Clause 50.6 of G.C.C. to prove on record a decision of Taxation Authority as to whether sales tax at increased rate was payable under the alleged amendment in sales tax in the State of J & K. The plaintiff has not placed on record any decision of the Taxation Authorities by virtue of which the plaintiff was required to pay sales tax on works contract.
40. During the course of cross examination of PW-1 dated 15th March, 2001, it is admitted by him that our contract provided for reimbursement to the plaintiffs company on the basis of any levy of new tax or duty. It is further stated by him that the assessment order for accounting period 19841985 to 1986-1987 passed by Assessing Sales Tax Authority is marked X. It is further admitted by PW-1 that Mark X is the only order and there is no other order passed by assessing authority, he cannot say where is the original of Mark X now but the photocopy has been filed in the Court. He further admitted that the plaintiff was not assessed for the purpose of Sales Tax on Works Contract for the year 1982-1983 and 1983-1984. Mark X is not proved and not exhibited.
41. The plaintiff has also failed to prove their alleged final bill dated 25th November, 1990 for `46,62,917/- on the basis of which the present suit has been filed. PW-2 has stated in his cross examination dated 12th July, 2001 that Mr.Mukherjee, Chief Accountant was maintaining all books of accounts including the accounts pertaining to the contract in question. CS(OS) No. 1439/1991 make entries in the books of account. It was Mr.Mukherjee, Chief Accountant who prepared the final bill and the final bill mark A does not bear his signature. Mr.Mukherjee has not been produced in the witness box. Account books and entries made therein have also not been proved.
42. The other important aspect of the matter is that the plaintiff omitted to sue in respect of its claim of present suit in the petition filed by the plaintiff for appointment of Arbitrator. The said reimbursement of claim which are the subject matter of the present suit are in the knowledge of the plaintiff when the arbitration was invoke in the year 1999. An existence of Arbitration Clause of all dispute are not denied by the plaintiff. The final bill is dated 25th November, 1990 which is much prior to the period of date of invocation of arbitration.
43. This court is of the view that plaintiff was bound to claim entire relief in previous suit No.1881/1989 as the cause of action for the claim of the present suit existed at the time when the previous suit was filed. Order II Rule 2 CPC enjoins the plaintiff to include whole of the claim to which the plaintiff is entitled to make in respect of cause of action. It is settled law that if the plaintiff omits to sue or relinquish any portion of his claim, it is not permissible for him to sue in respect of portion so omitted or relinquished. Therefore, Issue No.6 to 8 are decided against the plaintiff and Issue No.3 and 4 are decided in favour of the defendants.
44. In view of facts and circumstances of this case the plaintiff has failed to prove the alleged payment of the final bill dated 25th November, 1991 and therefore, the plaintiff has failed to prove its case on Issue No.9. Thus, issue No.9 is also decided against the plaintiff.
45. The burden of proof of Issue No.10 is on the plaintiff, who has failed to prove that they are legally entitled to recover the suit amount from the defendants. The defendants are hence also not liable to pay interest to plaintiff as claimed by it.
46. Let me now deal with the counter claim filed by the defendants. The averments are made by the defendants in para 4 (i) to (ix) of the counter claim. In respect of the counter claim No.573/1998, the following issues were framed:1.
2. Whether the defendant is entitled to a counter claim of Rs.39,47,633.77 payable to the plaintiff? (OPD) 3. Whether the defendant is entitled to any interest on the counter claim amount and if so, at what rate and for which period? 4.
47. Whether the defendant is not entitled to receive the refund of excess payment of Rs.23,54,299.77 from the plaintiff under Clause 51 of the General Conditions of Contract Agreement? (OPD) Relief. The relevant para of the statement of counter claim is 4(i) and the relevant Clause of the General Conditions of Contract is Clause 51 relating to over payment. The case of the defendant is that as per final account of work an amount of `9,58,18,480.86 was payable to the plaintiff company on account of the works executed by it under the said contract agreement. The defendant corporation has already released/paid `9,81,72,780.63 so far to the plaintiff as per 27th Running Bill already placed on record which is admitted document and marked as D-6. PW 1 has also given his affidavit by way of his evidence and the said document is shown as marked DW-1/2. The difference between the amount of work executed and the amount of payment received as aforesaid comes to `23,54,299.77 i.e. `9,81,72.780.63 (-)`9,58,18,480.86.
48. The burden of proof of Issue No.2 is on the defendant. The case of the defendant is that in addition to the excess payment made by the defendant amounting to `23,54,299.77, the plaintiff company is further liable to pay a sum of `15,93,264.00 on account of other miscellaneous claims, the complete details of which are mentioned in para 4 (ii) to 4 (ix) of its counter claim, the defendant has examined DW 1 vide his affidavit in evidence Ex.DW1/A. He has further provide the final bill prepared on 17th August, 1991 is marked as Exhibited DW-1/6 (collectively).
49. DW-2 S.C. Tagotra has filed his affidavit in support of the statement made in the counter claim. The said affidavit is exhibited as Ex.DW-2/A. He stated in the affidavit that after reconciliation of all the records, claims and recoveries pertaining to the contracted work, it was found that the net amount of `39,47,663.77 was due and recoverable from plaintiff company by the defendant corporation against the contracted work for Salal Hydro Electric Project. The details of recoveries are given below:i. As per the final account of work marked as Exh.DW2/1 prepared and checked by Shri K.S.Dogra the then Senior Accountant posted in E.G.C. Accounts Branch and finally checked by Assistant Manager (Finance) Shri R.C.Bhatia and Shri Ashok Dagotra, Senior Accountant (F & A). I identify their signatures as I have seen them writing and signing several times. An amount of `9,58,18,480.86p was payable to the plaintiff company on account to the works executed by it under the aforesaid contract agreement. The defendant corporation have already released/paid `9,81,72,780.63 so far to the plaintiff company as per 27th R.A. Bill, Ex.DW1/2. Excess payment CS(OS) No. 1439/1991 amounting to `23,54,299.77 paise Page 29 of 41 i.e. (`9,81,72,780.65 (-) `9,58,18,480.86) is as such, recoverable from plaintiff company as per Clause 51 of General Conditions of the contract agreement. The details about these recoveries on account of excess payment are given in the final bill dated 17th August, 1991, Ex.DW1/6. As per account of work a total amount of `9,58,18,480.86 is payable to M/s. Texmaco on account of this contract agreement. The corporation have already released/paid to M/s. Texmaco an amount of `9,81,72,780.63 as per 27th RA Bill, Ex.DW2/3 of the Corporation. An amount of `23,54,299.77 paise is as such recoveryable from M/s. Texmaco Ltd., as per Clause 51 of General Conditions of the Contract Agreement. In addition to the above mentioned excess payment to the plaintiff company, there are other recoveries amounting to `15,93,364.00 pending payment by the plaintiff company on account of other miscellaneous claims, the details of which are given hereunder:ii. Mobilization advance have been given to plaintiff company after award of the contract in terms of Clause 48.1 of general condition of the contract agreement. While effecting recovery of mobilization advance in accordance with Clause 48.2 of contract agreement, the Corporation have effected recoveries of mobilization advance on total number of days intervening between the dates of release of mobilization advance and its recoveries whereas the recovery was to be effected at the rate of 13% per annum with monthly rests. As per provisions of the contract total interest leviable on mobilization advance paid to plaintiff company which is marked as Ex.DW2/3 is `14,12,618.50 the said statement is prepared and signed by Mr.K.G. Dogra Senior Accountant whose signatures I identify. This statement is correct as per the official records. Out of this `12,32,722.20 stands recovered and balance amount of `1,39,897.30 is still due and recoverable from plaintiff company. iii. Rent of quarters under Clause 7 of Special Conditions of Contract Agreement, project accommodation was provided to the plaintiff company on rental basis. Out of total amount of `57,717.80 on account of rents of quarters recoverable from the plaintiff company which is marked as Ex.DW-2/4. The said statement of rent recoveries is prepared and checked by Sh.K.S.Dogra, Senior Accountant and duly signed by Mr.S.S. Dhani, Engineer incharge whose signatures I identify. This is correct as per official records. An amount of `24,035.22 has been recovered from the plaintiff company from time to time. Balance amount of `33,143 is due and recoverable from the plaintiff company. iv. Electricity charges in accordance with Clause 2.6(a) and 2.6(b) of Special Conditions, electric supply was provided to the plaintiff company for execution of work as per contract agreement. An amount of `41,105/- is due and recoverable on account of electricity charges as per recover statement of electricity charges from the plaintiff company which is marked as Ex.DW-2/5 (collectively). The electricity bill is correct. v. Hire charges of machineries hired from M/s. H.C.C. Ltd. amounting to `35,588/- is due and recoverable from plaintiff as mentioned in final bill Ex.DW1/6. vi. Balance claim of M/s. H.C.C. on account of erection works is `20,000/- as per the official record maintained in the office and mentioned in the final bill Ex.DW-1/6. vii. Hire charges on account of Department Machinery amounting to `13,19,531/- is due and recoverable as per statement of account Ex.DW-1/5 as per official record and mentioned in final bill Ex.DW-1/6. viii. Labour claim of Shri Bhupinder Kumar on account of non payment of wages amounting to `3000/- is due and recoverable as per official record and mentioned in final bill Ex.DW-1/6. ix. Claim of Executive Engineer on account of debit sheet labour amounting to `1,100/- is due and recoverable from the plaintiff as per official records and mentioned in recovery statement shown in Final Bill Ex.DW1/6.
50. The details of documents filed by the defendants and duly exhibited in their evidence are given as under:Ex.DW1/1 Original General Power of Attorney singed by the then Director (Finance) of defendant-Corporation. Ex.DW1/2 Plaintiffs letter dated 6th March, 1987 requesting the defendants to arrange for allotment of the equipments to complete the last item of the contract work. Ex.DW1/3 & Ex.DW1/4 Bills of hire charges of machinery equipments which were prepared by Engineer Incharge and Executive Engineer of Pipe and Pumping Division of Salal Hydro Electrical Project. Ex.DW1/5 Statement of account prepared by Mr.K.S.Dogra, the then Senior Accountant of Salal Hydro Electrical Project. Ex.DW1/6 Final Bill dated 17th August, 1991 which was prepared by Mr.M.K.Devnath, A.E.; Mr.S.S.Dhani, Engineer Incharge (HM) and counter-signed by Mr.S.S.Jamwal, the then Sr.Manager. Ex.DW1/7 Letter dated 24th January, 1992 sent to the plaintiff-company with the request to deposit the outstanding amount of `39,47,633.77/- through a demand draft drawn in favour of NHPC Ltd. Ex.DW1/8 Recovery statement of Account maintained by the defendant-Corporation which was made on the basis of intimation sent by letter dated 24th December, 1987 received from M/s HCC Ltd. Ex.DW1/9 Letter dated 16th July, 1990 for recoverable amount of `20,000/- from the plaintiff to give refund to M/s HCC Ltd. Ex.DW1/10 Statement of account prepared and signed by Mr.K.S.Dogra, the then Sr. Accountant, as per which a sum of `1,39,896/- is due and recoverable from the plaintiff. Ex.DW2/3 Details for release of amount paid to the plaintiff to the tune of `9,81,72,780.63/- as per 27th R.A. Bill. Ex.DW2/4 Statement of account filed with the Counter-claim which has been admitted by the plaintiff-company, for a claim of `33,143/-. Ex.DW2/5 Annexure D filed with the counter-claim along with electricity bill recoverable from the plaintiffcompany. Ex.DY1 51. Notice dated 11th September, 2000, under Order XII, Rule 8 CPC sent by Mr.V.P.Dewan, Advocate for the defendant to Mr.Sumit Sen, Advocate for the plaintiff for production of documents. The counter claim in the present matter was filed on 19 th May, 1993. The cause of action for filing the counter claim first time arose on 17 th August, 1991 when the final bill was prepared and again it arose on 3 rd January, 1992 and 4th January, 1992 when Sh. P. Banerji and Mr.Jagan Nath, the authorized representatives of the plaintiff company had visited the defendant corporation for reconciliation of claims and recoveries and accepted the final account of work and recoveries of an amount of `39,47,663.77 and finally it arose on 24th January, 1992 when the defendant corporation sent a notice to the plaintiff company requiring it to pay the said amount.
52. It is the case of the plaintiff that the work of execution could not be carried out within the stipulated time due to reasons and factors wholly beyond the control of the plaintiff and without any fault or negligence on the part of the plaintiff. It is the defendants themselves who committed breaches by refusing to grant price escalation for fabrication, supply and transportation upto 30th December, 1986 and for erection upto 31st October, 1987. The plaintiff denied that a sum of `43,61,703.15 was due and recoverable from the plaintiff by the defendants in respect of the contract dated 8th January, 1983. The plaintiff also disputed that as per final accounts of work prepared by the defendants, an amount of `9,58,18,480.86 was payable to the plaintiff. According to the plaintiff, as per the final accounts, the total amount of `10,26,35,689.44 is payable to the plaintiff. It is also denied by the plaintiff that the defendants have paid to the plaintiff an amount of `9,81,72,730.63 as the plaintiff has actually received a sum of `9,79,72,780.03.
53. The plaintiff has given reply itemwise to the counter claim filed by the defendant which reads as under: a) Interest on mobilization advance : I deny and dispute that an amount of Rs.1,39,897.30 or any part thereof is still due and recoverable from the plaintiff. Each and every item regarding details of interest on mobilization advance set forth at page 60 of the counter claim are denied and disputed by the plaintiff. I state that interest has accrued on mobilization advance due to the lapses on the part of the defendants, as the plaintiff was always ready and willing to pay any due and recoverable interest on mobilization advance within time, and all allegations to the contrary are denied and disputed. The said claim is in the nature of an afterthought and barred by the law of limitation. b) Rent for quarters I deny and dispute that an amount of Rs.33,143.00 or any part thereof is recoverable from the plaintiff as alleged rent charges. The recovery statement of rent for quarters annexed to the counter claim and/or the list of documents is totally false and misleading and the same is denied. The said claim is in the nature of an afterthought and barred by the law of limitation. c) Electricity charges I deny and dispute that an amount of Rs.41,105.00 or any part thereof is due and recoverable on account of alleged electricity charges. The recovering statement filed with the list of documents is an internal document and has never been furnished to the Claimant, except in the present counter claim. The said claim is in the nature of an afterthought and it is denied and disputed. The said claim is barred by the law of limitation. d) Hire charges for machineries hired Hindustan Construction Company Ltd. from I deny and dispute that an amount of Rs.35,388.00 or any part thereof is due and recoverable from the plaintiff on account of alleged higher charges for machineries from Hindustan Construction Company Ltd. The recovery statement filed alongwith the counter claim is false, misleading and denied. I specifically deny and dispute that any outstanding hire charges are recoverable from the plaintiff and I reiterate that all hire charges have been paid by the plaintiff. In any event and further, without prejudice to the aforesaid, it may be pointed out that the question of hiring machineries from Hindustan Construction Co. arose due to reasons wholly beyond the control of the plaintiff, and due to various breaches committed by the defendants. The said claim is in the nature of an afterthought and barred by the law of limitation. e) The alleged balance claim of M/s. HOC on account of erection work. I deny and dispute that an amount of Rs.20,000/- or any part thereof is recoverable by the plaintiff from the defendants as the plaintiff allegedly did not carry out the work of fixing of manhole covers, welding or sole plates etc. In this connection, the true and correct facts are stated hereinbelow : i) A portion of erection work for Bridge Steel Structures was given to HCC in 1986 by the defendants for expediting the progress of work while the entire steel work was being done by the plaintiff. ii) However, out of 12 Bays, HCC only completed 5 Bays and thereafter once again the plaintiff took over the balance work. iii) As such, the question of refunding an amount of Rs.20,000/- to HCC does not arise, and with regard thereto the defendants are put to strict proof. In this connection, a copy of the letter dated December 6, 1990 addressed by the plaintiff to the defendants is annexed hereto and marked as Annexure B. The said claim is also barred by the law of limitation. f) Hire charges machinery : on account of Departmental I deny and dispute that an amount of Rs.13,19,531.00 or any part thereof is due and recoverable from the plaintiff as alleged hire charges. In this context, the details and particulars of the alleged hire charges given in the statement by the defendants are completely denied and disputed. The said statement is arbitrary and does not reflect the true and correct position, and is a fabricated one and it is highly inflated. The aforesaid hire charges were never brought to the notice of the plaintiff during the course of execution of work and is in the nature of an afterthought. It may be noted that the plaintiff has already paid an amount of Rs.16,73,427.27 as hire charges during the course of execution of the work. The alleged balance hire charges have no factual basis, cannot be supported by the records of this case and are completely denied and disputed by the plaintiff. The said claim is barred by the law of limitation. The claim for Rs.13,19,531/- is wholly denied. Such a claim has no basis whatsoever. In fact, the defendant has received on account of hire charges from the plaintiff the sum of Rs.16,73,427.27. The defendant was not entitled to receive the said amount of Rs.16,73,427.27. The defendant from time to time received arbitrary sums aggregating to the said sum of Rs.16,73,427.79 from the plaintiff. If proper accounts are given then a very minor sum will be found payable. Accordingly, the defendant has made excess amounts and plaintiff claim a decree for the said sum and/or other such amount, in the alternative, if any amount is actually due and payable from the defendant to the plaintiff on the aforesaid account then and in such an event the said amount should be set off against the alleged counter claim of the defendant. The plaintiff denied and disputes the correctness of each and every item as alleged particulars contained in Annexure G of the Statement. None of the particulars of paragraph 7 of the Written Statement is admitted. g) Labour claim of Shri Bhupinder Kumar on account of alleged non payment of wages. I deny and dispute that a sum of Rs.3,000/- or any part thereof is due and recoverable from the plaintiff on account of alleged non payment of wages to Shri Bhupinder Kumar. The aforesaid allegation is inconsistent with the records of this case. In this connection, the true and correct facts are as follows : i) Shri Bhupinder Kumar was a Piece Rate Worker engaged through a sub-contractor. In the normal course the said sub-contractor used to send a bill for work rendered in which the wages of the piece rate workers were included. In the present case, the sub-contractor Shri Naresh Kumar had sent a final bill for second cost painting of down stream crane girders. In the said bill the said Shri Naresh Kumar certified that his piece rate workers had been fully paid upto February 15, 1988 and all payments had been received in Full. The said statement was counter signed by Shri Bhupinder Kumar as a witness and therefore Shri Bhupinder admitted and acknowledged that all his dues had been paid in full. In the circumstances the question of any outstanding payment to the above person cannot arise. In addition, it may be noted that although initially the Assistant Labour Commissioner had demanded Rs.3,000/- to be deducted against the Security Deposit furnished by the plaintiff, in reality the Assistant Labour Commissioner after having satisfied itself that Shri Bhupinder Kumar had infact been paid, and released the said Security deposited in its entirety. In this regard, copies of the relevant correspondence are annexed hereto and marked as Annexure C. h) Claims of the Executive Engineer on account of Debit Sheet Labour I deny and dispute that any amount aggregating to Rs.1100/- or any part thereof is due and recoverable from the plaintiff by the defendants of the aforesaid account and with regard thereto. In this context, it may be noted that the aforesaid bill was never sent to the plaintiff during the course of execution of work. The aforesaid bill is in the nature of an afterthought and it is completely denied and disputed and the same is barred by the law of limitation. i) I totally deny and dispute that an amount of Rs.39,47,663.77 or any part thereof has been allegedly reconciled between the parties and the same is due and recoverable from the plaintiff as alleged or at all. I deny and dispute that the representatives of the plaintiff i.e. Shri P. Banerjee and Shri Jaganath Ray admitted or accepted the aforesaid amount, or any amount as alleged or at all. In the circumstances, the question of making payment of the aforesaid alleged amount is does not arise at all. The aforesaid amount is wholly imaginary, concocted and without any legal or factual basis whatsoever and the same is wholly barred by the law of limitation. The alleged final bill contains serious discrepancies and have been refuted by the plaintiff.
54. Counter claim in the matter is filed on 13th May, 1993 which was lying under objection of deficient court fee which was paid in March, 1998 and was duly registered as Counter Claim No.573/1998. It appears very clear from the record that it was time barred and afterthought and the same was filed after the receipt of final bill raised by the plaintiff i.e. on 25 th November, 1990, it order to adjust re-imbursements of accounts thought as referred earlier was not able to raise claims of final bill made on 25th November, 1990 in the arbitration proceedings nor the plaintiff was able to prove its case by producing of evidence. The defendants could have raised such claims in the arbitration proceedings. Even if it came to the notice of the defendants at later stage as alleged by the defendants, the said plea could have been raised in the said proceedings, no arguments were addressed by the learned counsel appearing on behalf of the defendants on this aspect. Rather the defendants themselves have raised the objection under Order 2 Rule 2 CPC against the plaintiff.
55. Counter-claim was filed on 19th May, 1993. The Registry raised the objection to the counter claim filed by the defendant on 21 st August, 1993 about the deficient court fee. After the said objection was removed by the defendants counsel on 19th March, 1998, the counter claim was given registered as Counter Claim No.573/1998. It appears that the work was completed on 13th October, 1987. The plaintiff had received a total sum of `9,81,72,780.63 paise upto 27th RA Bill. The last payment was received by the plaintiff on 6th July, 1987. Completion certificate was issued on 29 th June, 1988. Defect liability period expired on 30 th October, 1988. The plaintiff made an application under Section 20 of the Arbitration Act, 1940 for appointment of Arbitrator in the Year 1989. He raised the final bill on 25th November, 1990.
56. There is no justification whatsoever given by the defendants as to why deficient court fee was filed after expiry of four years and about nine months even from alleged the date of knowledge of the outstanding amount as mentioned in the cause of action para.
57. According to Rule 5, Chapter I, Part A of Vol. 5 of High Court Rules and Orders, the objections should have been re-filed within a time not exceeding 7 days at a time, and 30 days in aggregate to be fixed by the Deputy Registrar/ Assistant Registrar, Incharge of Filing Counter. Rule 5 (3) read with the note also makes it abundantly clear that in case the petition is filed beyond the time allowed by the Deputy Registrar/Assistant Registrar, Incharge of Filing Counter under Sub-Rule 1, it shall be considered as a fresh institution. The moment it becomes fresh filing, then under the settled law after the expiry of prescribed period, the delay cannot be condoned on any ground. The maximum period of 30 days is provided under Rule 5, Chapter 1, Part A of Vol.5 of the High Court Rules and Orders for removing the objections by re-filing of the petition. In the present case, it was not done. It appears that the counter claim is barred by limitation. The objection was removed after four years and about nine months.
58. Even if the statement made by the defendants in the cause of action para is accepted, although one is failed to understand when the work was completed on 30th October, 1987 and as the plaintiff received total amount of `9,81,72,780.63/- up to 27th running bill how the counter claim is maintainable after the expiry of more than 10 years. On the face of it, the counter claim is barred by limitation. The defendants are not entitled to any relief claimed in the counter-claim, even if the contentions of the defendants are accepted. It is also pertinent to note that the defendants even did not summon the witnesses i.e. Sh. P. Banerji and Sh.Jagan Nath, who visited the office of defendant corporation for reconciliation of claims and recoveries in the matter of settlement of their final bill dated 17th August, 1991 when a mathematical additional error was observed in the account of work.
59. Under these circumstances, the defendants counter-claim is barred by limitation. The same is hence not maintainable. Therefore, the defendants are entitled to any amount claimed in the counter-claim.
60. Both the suits bearing CS(OS) No.1439/1991 and Counter Claim bearing No.573/1998 are dismissed. No costs. (MANMOHAN SINGH) JUDGE JANUARY 28 2013