Delhi Development Authority vs.cengers Geotechnica Pvt Ltd - Court Judgment

SooperKanoon Citationsooperkanoon.com/1220010
CourtDelhi High Court
Decided OnDec-14-2018
AppellantDelhi Development Authority
RespondentCengers Geotechnica Pvt Ltd
Excerpt:
$~4 (special bench) * in the high court of delhi at new delhi date of decision:14. h december, 2018 + rfa1572017 & cm appl. 5621/2017 delhi development authority ..... appellant through: mr. sanjeev sagar, standing counsel, dda with ms. nazia parveen, advocate. (m:9278693021) versus cengers geotechnica pvt ltd ..... respondent through: mr. anshu mahajan, mr. vikas aggarwal and mr. karan arora, advocates. (m:9811164848) coram: justice prathiba m. singh prathiba m. singh, j.(oral) 1. the present appeal arises out of the impugned judgment dated 27th september, 2016. the broad facts are not in dispute in the present case.2. the respondent-cengers geotechnica pvt. ltd. (hereinafter „geo tech‟) is engaged in the business of engineering and civil construction. a tender was issued on 2nd april, 2005 by the dda in respect of a construction project for 144 flats at motia khan. in order to bid for the said tender, geo tech had submitted its bid on 22nd april, 2005 and deposited a sum of rs.5,98,986/- as earnest money. the opening of the tender was scheduled for 23rd april, 2005. the important condition of the tender was that the bids would be valid for a period of 90 days i.e. that they would come to an end on 21st july, 2005. rfa1572017 page 1 of 14 3. on 29th july, 2005, after the expiry of the validity period of the tender, a letter was written by the dda informing geo tech that the tender has been rejected on the ground that it is a conditional tender and the earnest money has been forfeited.4. this forfeiture was challenged by geo tech on the ground that firstly; the bid is not conditional, only some clarifications had been sought. secondly, that the tender period having expired, the forfeiture of the earnest money deposit (emd) was illegal and unlawful.5. accordingly, legal notice was issued on 18th august, 2005 seeking refund of the emd. various letters were issued and exchanged between the parties. finally, letter dated 30th may, 2008 was written by geo tech in which geo tech expressed its understanding that a decision has been taken at the appropriate level for release of emd and sought release of the same 6. vide letter dated 2nd june, 2007, the dda rejected the various representations made by geo tech. in response to this letter, geo tech wrote to the dda and asserted that a decision has been taken within the dda to refund the emd. dda wrote back to geo tech saying that refund of emd is under consideration. however, thereafter on 24th june, 2008, the dda informed geo tech that the emd amount cannot be released. accordingly, the present suit came to be filed seeking recovery of emd. the reliefs sought in the suit are as under: - “1. set aside the order dated 27/09/2016 passed by the of ld. adj ms. navita kumari bagha, saket courts, new delhi in cs no.176/in case titled “cengers geotechnica pvt. ltd. vs. delhi development authority”.” 7. in the written statement, the dda took a stand that the suit is barred rfa1572017 page 2 of 14 by limitation and that the forfeiture was as per the terms of the tender and within the validity of the tender period.8. the following issues were framed by the court on 10th march, 2010: - “1. whether the suit of the plaintiff is barred by limitation?. opd2 whether the plaintiff is entitled to a decree a sprayed for?. opd3 relief.” 9. the plaintiff-geo tech led the evidence of shri sanjay gupta, managing director. the plaintiff also summoned one mr. kamal singh, executive engineer of the dda as pw-1. the dda led the evidence of mr. m.k. dharia, executive engineering as dw-1.10. the trial court after considering the documents and the evidence on record, decreed the suit of geo tech by holding that the suit was filed within limitation. the operative portion of the relief granted by the trial court is set out herein below: - “27. the present suit is decreed in favour of the plaintiff and against the defendant for a sum of rs.5,98,986/- (rupees five lacks ninety eight thousand nine hundred and eighty six only) along with pre-suit interest @12% per annum (i.e. w.e.f. 12.05.2009), pendentelite interest @ 12% per annum and future interest @ 9% per annum till realization. cost of the suit is also awarded in favour of the plaintiff.” 22.07.2005 to 11. mr. sanjeev sagar, learned counsel appearing for dda in the present appeal, primarily challenges the impugned judgment on two grounds: - (i) that the letter dated 12th june, 2008 does not extend the period of limitation for the filing of the suit. rfa1572017 page 3 of 14 (ii) that the forfeiture was in terms of the tender conditions and within the validity period of the tender conditions.12. on the issue of limitation, it is urged by the dda that there is no admission in the letter dated 12th june, 2008. the said letter also does not constitute an acknowledgment of any debt. the forfeiture having taken place on 29th july, 2005, the suit having been filed only on 13th may, 2009, it is barred by limitation. he relies on the judgment of the supreme court in j.c. budhraja v. chairman, orissa mining corporation ltd. & another (2008) 2 scc444especially para 21 and 22 to argue that if there is no admission of liability, there is no acknowledgment. he relies on section 18 of the limitation act to submit that the period of limitation ran from the date of rejection and not any date thereafter.13. on the other hand, mr. mahajan appearing for geo tech submits that the evidence on record shows that firstly, the rejection took place after the date of validity of the tender. the various letters written by geo tech were in fact under consideration by the dda and so long as it was pending for consideration, the plaintiff did not have a cause of action to sue. the letter dated 12th june, 2008 is relied upon to submit that this letter is not a standalone letter. according to him, within the dda, the matter had been put up to the highest quarters and he relies on the oral evidence led by the dda and its witnesses in support of the fact that until the final rejection on 24th february, 2008, no cause of action arose. he further submits that the letter dated 12th june, 2008 clearly states that the matter is under consideration. this clearly establishes that the dda had admitted the existence of a jural relationship and hence for the purposes of limitation it constitutes an acknowledgment. he relies on the very same judgment cited rfa1572017 page 4 of 14 by mr. sagar to submit that the letter in the present case which was considered by the supreme court wherein the authorities said that the dues would be ascertainable was held to constitute an acknowledgment.14. the main issue urged before the court being of limitation, this court has considered the correspondence and the evidence on record. there is no doubt that the first forfeiture took place on 29th july, 2005. the said letter is extracted herein below: - “no.f/ee/nd.2/dda/a/18/04-05/675 dated:29. 7/05 to, m/s cengrs geotechnica pvt. ltd. civil & geotechnical engineer, b-3/87, safdarjung enclave, new delhi. – 110029 n.o.w:-"c/o320258 m.s. flats at motia khan. s.h.:-"providing boared cast in situ r.c.c. piles foundation for construction of 144 houses (72+72) in block 3 & 4 at motia khan. including r.c.c. plate d/sir, -.-.-.-.-.-.-.-.- reference your tender dated 23.4.2005 for the above said work. in this connection, it is to inform you that your tender has been rejected by the competent authority being a conditional tender. accordingly, the earnest money i.e. rs.5,98,986/- deposited by you in r/o the aforesaid work has been forefited under clause 13(a) of pwd-6. this is for your information please. yours faithfully, sd/- (executive engineer) nd.-2/d.d.a.” page 5 of 14 rfa1572017 15. a perusal of the said letter shows that the letter does not give any clarification as to how the tender was a conditional tender. further, the validity period of the tender had admittedly expired. accordingly, the plaintiff had issued a legal notice on 18th august, 2005 stating that the clarifications sought by it, did not make the tender a conditional one and accordingly sought recovery. this was followed up another letter dated 17th november, 2005, 18th november, 2005, 10th april, 2006, 31st october, 2006 and 12th april, 2006. on 2nd june, 2007 (exhibit-p-9), the dda informed geo tech as under: - “5.7. it is correct that the tender had a validity period of 90 days but this period is for acceptance of tender only. earnest money was forefeited under clause 13(a) of the pwd-6 which reads as under :13. a) “it may please be carefully noted that no condition whatsoever shall be accepted by the department and the contractor is not prepared to execute the work at the terms and conditions contained in the tender documents, he is requested not to tender for this work. it may be noted that if any contractor choose to submit conditional tender inspite of clear direction given above, his tender shall be liable to rejected sommarilisertily and his full earnest money shall stand forfeited. he will also be liable for being debarred from tendering in dda for a period of six months”.” 16. the dda relied upon clause 13(a) of the pwd manual-6 to justify the forfeiture. the correspondence did not end here. almost a year later, geo tech wrote letter dated 30th may, 2008 which concluded as under: - “however, during our various discussions, we rfa1572017 page 6 of 14 17. understood that the decision had been taken at appropriate level for the release of earnest money deposit. however, we have not received the earnest money deposit till date.” in response to this letter, on 12th june, 2008, the dda wrote a letter to the following effect: - “no.f.ee/nd-2/dda/a/78/04-05/704 dated:12. 6/08 to m/s cengrs geotechnica pvt. ltd. b – 3/87, safdarjung enclave, new delhi – 110029. sub: tender for c/om.s. flats at motia khan, sh: providing bored cast-in-situ rcc piles foundation including plate for c/o 144 m.s. flats in block no.3 & 4 at motia khan, nit no.7/dd/nd-2/dda/04-05 (specialized work) ref: no.pf/dda/nd-2/374 dated 30th may, 2008. sir, please refer to the above cited letter regarding above cited work. parawise reply of your letter is given below: - para 1 to 4: it is a matter of record and needs no para 5: para 6: para 7: comments. your legal notice has been replied by this office vide letter no.f.ee/nd- 2/dda/a/78/04-05/63-9 dated 2.6.07. earnest money deposited by you has not been released by this office which is under consideration. no comments.” 18. this letter admitted that the refund is under consideration. finally, the rfa1572017 page 7 of 14 rejection took place on 24th june, 2008 and dda refused to release the amount.19. in the course of trial, geo tech also relied upon the minutes of the meeting dated 29th november, 2005 and the various noting pages and the agenda of the wab. as per the recommendation of the wab, the tender of geo tech was rejected on the ground that it was conditional and it was the case of the geo tech that even the wab had not recommended forfeiture of the emd. all these note sheets, file, papers of the dda were relied upon by geo tech to argue that the matter was considered at the highest level and was being deliberated upon. finally, what is relied upon by the geo tech is the evidence of the engineer, dw-1, who appeared and testified that the final rejection took place on 24th june, 2008. the relevant portion of the evidence of dw-1 is set out herein below: - the same “the witness is confronted with page no.171 of ex.pwand he accepts the recommendation of the chief engineer to wab. i do not remember whether the decision of wab was only for rejection of tender. the witness is confronted with page no.115-116 of ex.pwand he admits that the wab had taken a decision with respect to only rejection of tender. to be it is correct that after the forfeiture of emd by dda, the plaintiff sent a notice dated 18.8.2005 calling upon dda to refund the emd. i do not remember whether the request of the plaintiff was finally rejected by dda in june, 2008. the witness is shown ex.pw1/12 and he agrees that the request of the plaintiff for refund of emd was rejected by dda on 24.06.2008. i do not remember as to when the decision for forfeiture of emd was taken by dda and by whom. i do not know as to when the tender in question for the same work was floated again by dda. the witness is rfa1572017 page 8 of 14 shown the minutes of meeting and corrigendum dated 29.11.2005 where the decision for re-floating the tender for the same work was taken and he admits the same to be correct and the same are ex.dw1/px-1 and ex.dw1/px-2 respectively.” 20. on the basis of the above evidence, it is clear that the actual final rejection took place on 24th june, 2008. the short question, therefore, is as to whether the letter dated 12th june, 2008 constitutes an acknowledgment. a perusal of the judgment in j.c. budhraja (supra) clearly shows that the letter under consideration in the said case was as under: - “in view of the several representations made by the contractor in respect of contract no.30/f-2 as also other contracts, omc sent the following letter dated 28-10-1978 to the contractor: “re.: settlement of pending claims. you had called on chairman, omc, recently and apprised him of the dues receivable by you in respect of certain long pending matters such as mine benches work and raising at kaliapani quarry i. in the matter of kaliapani it has been decided to constitute a committee which will go separately into your claims and other facts, in which connection you are requested to given all possible help and assistance, so that your dues, if any, will be ascertainable. in regard to other pending matters, you had indicated yourself that you will give the details of claims and payment received by you. this may be given within a day or two so as to enable omc to settle up the above at the earliest.” 21. in the context of the above letter, the supreme court observed as under: - “21. it is now well settled that a writing to be an acknowledgement of liability must involve an rfa1572017 page 9 of 14 admission of a subsisting jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability. the admission need not be in regard to any precise amount nor by expressed words. if a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgement. but if the defendant merely says, without admitting liability, it would like to examine the claim or the accounts, it may not amount to acknowledgement. in other words, a writing, to be treated as an acknowledgement of liability should consciously admit his liability to pay or admit his intention to pay the debt. let us illustrate. if a creditor sends a demand notice demanding payment of rs.1 lakh due under a promissory note executed by the debtor and the debtor sends a reply stating that he would pay the amount due, without mentioning the amount, it will still be an acknowledgement of liability. if a writing is relied on as an acknowledgement for extending the period of limitation in respect of the amount or right claimed in the suit, the acknowledgement should necessarily be in respect of the subject-matter of the suit. if a person executes a work and issues a demand letter making a claim for the amount due as per the final bill and the defendant agrees to verify the the acknowledgement will save limitation for a suit for recovery of only such bill amount, but will not extend the limitation in regard to any fresh or additional claim for damages made in the suit, which was not a part of the bill or the demand letter. again we may illustrate. if a house is constructed under the item rate contract and the amount due in regard to work executed amount, bill and pay the rfa1572017 page 10 of 14 liability, for breach by is rs. two lakhs and certain part-payments say aggregating to rs.1,25,0000 have been made and the contractor demands payment of the balance of rs.75,000 due towards the bill and the employer acknowledges that acknowledgement will be only in regard to the sum of rs.75,000 which is due. if the contractor files a suit for recovery of the said rs.75,000 due in regard to work done and also for recovery of rs.50,000 as damages the employer and the said suit is filed beyond three years from completion of work and submission of the bill but within three years from the date of acknowledgement, the suit will be saved from bar of limitation only in regard to the liability that was acknowledged namely rs.75,000 and not in regard to the fresh or additional claim of rs.50,000 which was not the subject-matter of acknowledgement. what can be acknowledged is liability. a an acknowledgment made with reference to a liability, cannot extend limitation for a time- barred liability or a claim that was not made at the time of acknowledgment or some other liability relating to other transactions. any admission of jural relationship in regard to the ascertained sum due or a pending claim, cannot be an acknowledgement for a new additional claim for damages. present subsisting 22. we will now examine this case with reference to the said principles. in this case, the cause of action accrued on 14-4-1977 when the final bill was signed by the contractor. it is not in dispute that the final bill showed that a sum of rs.17,69,608.73 was payable to the contractor (after giving credit to the payments made and after withholding a sum of rs.7,45,953.83 as 5% security deposit). towards the said sum of rfa1572017 page 11 of 14 informed rs.17,69,608.73, rs.17 lakhs was paid on 25-2- 1976 and rs.70,000/- was paid on 6-8-1977. the contractor had made some claims and omc wrote a letter dated 28-10-1978 in regard to the pending claims of the contractor. in regard to kaliapani matters, omc the contractor that it has been decided to constitute a committee which will go into the claims of the contractor so that the dues, if any, could be ascertained. it further stated that on the details of the claims and payments received being given to the contractor, omc will settle up the pending matters at the earliest. this clearly showed an intention on the part of omc to admit the jural relationship of contractor and employer and an intention to settle the pending claims after being satisfied about them. therefore, the letter dated 28-10-1978 was clearly an acknowledgement in writing in so far as the “pending claims” of the contractor. what were the pending claims is made clear in the letter dated 16-11-1978 written by the contractor enclosing a statement showing that in all, a sum of rs.50,15,820 was due. the committee constituted by omc examined these claims and admitted the claims only to an extent of rs.3,52,916 as per its final report dated 7-12-1979. omc paid rs.3,50,000 on 4-3-1980.” 22. thus, in j.c. budhraja (supra), the letter which informed the contractor that a committee had been constituted going into the claims of the contractor so that the dues, if any, will be ascertainable, was held to constitute an acknowledgment. such a letter establishes a jural relationship between the parties and an intention to settle the claims.23. thus, what is to be seen is the existence of the jural relationship which was admitted and the intention to settle the claim of the party. in the rfa1572017 page 12 of 14 present case, there is no doubt from the evidence on record and the documents, that though the initial rejection took place in 2005, there is no doubt that, owing to the representations made by geo tech, the request for refund of the emd was under consideration. there was an intention to explore the possibility of settling the said claim made by geo tech. for any acknowledgment to be termed as such, it is not necessary for the exact amount to be admitted. as held in j.c. budhraja (supra), the existence of the jural relationship and the matter being under consideration, itself constitutes an acknowledgment. thus, the finding of the trial court that the suit was within limitation cannot be faulted with and is liable to be upheld.24. insofar as the second issue of the validity period is concerned, there is no doubt that on the date when the first forfeiture of the emd was communicated to geo tech, the tender had already lapsed and the validity period had gone by. the emd deposit is given for the purposes of ensuring that the bidder is a serious bidder and to ensure that the bidder does not in any manner resile from the bid submitted. after the validity of the tender expires, the bid is no longer valid and so is the emd submitted along with the bid. the emd dies with the bid itself. after the date of validity, the emd could not have been, therefore, forfeited by the dda.25. in kailash nath associates v. dda (2015) 4 scc136 the supreme court has held that the forfeiture of emd deposit being in the nature of a penalty cannot be done without showing actual damages/loss. the relevant portion of the kailash nath (supra) is extracted hereinbelow: - “44. ….. further, we cannot accept the view of the division bench that the fact that the dda made a profit from re-auction is irrelevant, as that would fly in the face of the most basic principle on the award of rfa1572017 page 13 of 14 26. damages – namely, that compensation can only be given for damage or loss suffered. if damage or loss is not suffered, the law does not provide for a windfall.” in view of the above discussion, the judgement of the trial court is liable to be upheld and the appeal is liable to be dismissed.27. in the facts of this case, the interest shall run for the entire period @ 9% instead of the rate of interest awarded by the learned adj.on 13th february, 2017, this court had stayed the impugned judgment/decree subject to the dda depositing the entire decretal amount. the decretal amount stands deposited in this court and is lying in a fixed deposit. it is accordingly directed that the worthy registrar general may release the sum of rs.5,98,986/- along with interest @ 9% per annum w.e.f. 22nd july, 2005 till date. any excess amount shall be refunded to the dda. the demand draft be prepared within four weeks and be handed over to the respondent through counsel in the presence of the respondent’s authorised signatories.28. list before the registrar general for giving the computation of the amount to be released on 15th january, 2019. prathiba m. singh judge december14 2018 rekha rfa1572017 page 14 of 14
Judgment:

$~4 (Special Bench) * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision:

14. h December, 2018 + RFA1572017 & CM APPL. 5621/2017 DELHI DEVELOPMENT AUTHORITY ..... Appellant Through: Mr. Sanjeev Sagar, Standing Counsel, DDA with Ms. Nazia Parveen, Advocate. (M:9278693021) versus CENGERS GEOTECHNICA PVT LTD ..... Respondent Through: Mr. Anshu Mahajan, Mr. Vikas Aggarwal and Mr. Karan Arora, Advocates. (M:9811164848) CORAM: JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J.

(Oral) 1. The present appeal arises out of the impugned judgment dated 27th September, 2016. The broad facts are not in dispute in the present case.

2. The Respondent-Cengers Geotechnica Pvt. Ltd. (hereinafter „Geo Tech‟) is engaged in the business of engineering and civil construction. A tender was issued on 2nd April, 2005 by the DDA in respect of a construction project for 144 flats at Motia Khan. In order to bid for the said tender, Geo Tech had submitted its bid on 22nd April, 2005 and deposited a sum of Rs.5,98,986/- as earnest money. The opening of the tender was scheduled for 23rd April, 2005. The important condition of the tender was that the bids would be valid for a period of 90 days i.e. that they would come to an end on 21st July, 2005. RFA1572017 Page 1 of 14 3. On 29th July, 2005, after the expiry of the validity period of the tender, a letter was written by the DDA informing Geo Tech that the tender has been rejected on the ground that it is a conditional tender and the earnest money has been forfeited.

4. This forfeiture was challenged by Geo Tech on the ground that firstly; the bid is not conditional, only some clarifications had been sought. Secondly, that the tender period having expired, the forfeiture of the earnest money deposit (EMD) was illegal and unlawful.

5. Accordingly, legal notice was issued on 18th August, 2005 seeking refund of the EMD. Various letters were issued and exchanged between the parties. Finally, letter dated 30th May, 2008 was written by Geo Tech in which Geo Tech expressed its understanding that a decision has been taken at the appropriate level for release of EMD and sought release of the same 6. Vide letter dated 2nd June, 2007, the DDA rejected the various representations made by Geo Tech. In response to this letter, Geo Tech wrote to the DDA and asserted that a decision has been taken within the DDA to refund the EMD. DDA wrote back to Geo Tech saying that refund of EMD is under consideration. However, thereafter on 24th June, 2008, the DDA informed Geo Tech that the EMD amount cannot be released. Accordingly, the present suit came to be filed seeking recovery of EMD. The reliefs sought in the suit are as under: - “1. Set aside the order dated 27/09/2016 passed by the of Ld. ADJ Ms. Navita Kumari Bagha, Saket Courts, New Delhi in CS No.176/
in case titled “Cengers Geotechnica Pvt. Ltd. Vs. Delhi Development Authority”.” 7. In the written statement, the DDA took a stand that the suit is barred RFA1572017 Page 2 of 14 by limitation and that the forfeiture was as per the terms of the tender and within the validity of the tender period.

8. The following issues were framed by the Court on 10th March, 2010: - “1. Whether the suit of the plaintiff is barred by limitation?. OPD2 Whether the plaintiff is entitled to a decree a sprayed for?. OPD3 Relief.” 9. The Plaintiff-Geo Tech led the evidence of Shri Sanjay Gupta, Managing Director. The Plaintiff also summoned one Mr. Kamal Singh, Executive Engineer of the DDA as PW-1. The DDA led the evidence of Mr. M.K. Dharia, Executive Engineering as DW-1.

10. The trial court after considering the documents and the evidence on record, decreed the suit of Geo Tech by holding that the suit was filed within limitation. The operative portion of the relief granted by the trial court is set out herein below: - “27. The present suit is decreed in favour of the plaintiff and against the defendant for a sum of Rs.5,98,986/- (Rupees Five Lacks Ninety Eight Thousand Nine Hundred and Eighty Six only) along with pre-suit interest @12% per annum (i.e. w.e.f. 12.05.2009), pendentelite interest @ 12% per annum and future interest @ 9% per annum till realization. Cost of the suit is also awarded in favour of the plaintiff.” 22.07.2005 to 11. Mr. Sanjeev Sagar, learned counsel appearing for DDA in the present appeal, primarily challenges the impugned judgment on two grounds: - (i) That the letter dated 12th June, 2008 does not extend the period of limitation for the filing of the suit. RFA1572017 Page 3 of 14 (ii) That the forfeiture was in terms of the tender conditions and within the validity period of the tender conditions.

12. On the issue of limitation, it is urged by the DDA that there is no admission in the letter dated 12th June, 2008. The said letter also does not constitute an acknowledgment of any debt. The forfeiture having taken place on 29th July, 2005, the suit having been filed only on 13th May, 2009, it is barred by limitation. He relies on the judgment of the Supreme Court in J.C. Budhraja v. Chairman, Orissa Mining Corporation Ltd. & Another (2008) 2 SCC444especially para 21 and 22 to argue that if there is no admission of liability, there is no acknowledgment. He relies on Section 18 of the Limitation Act to submit that the period of limitation ran from the date of rejection and not any date thereafter.

13. On the other hand, Mr. Mahajan appearing for Geo Tech submits that the evidence on record shows that firstly, the rejection took place after the date of validity of the tender. The various letters written by Geo Tech were in fact under consideration by the DDA and so long as it was pending for consideration, the Plaintiff did not have a cause of action to sue. The letter dated 12th June, 2008 is relied upon to submit that this letter is not a standalone letter. According to him, within the DDA, the matter had been put up to the highest quarters and he relies on the oral evidence led by the DDA and its witnesses in support of the fact that until the final rejection on 24th February, 2008, no cause of action arose. He further submits that the letter dated 12th June, 2008 clearly states that the matter is under consideration. This clearly establishes that the DDA had admitted the existence of a jural relationship and hence for the purposes of limitation it constitutes an acknowledgment. He relies on the very same judgment cited RFA1572017 Page 4 of 14 by Mr. Sagar to submit that the letter in the present case which was considered by the Supreme Court wherein the authorities said that the dues would be ascertainable was held to constitute an acknowledgment.

14. The main issue urged before the Court being of limitation, this Court has considered the correspondence and the evidence on record. There is no doubt that the first forfeiture took place on 29th July, 2005. The said letter is extracted herein below: - “No.F/EE/ND.2/DDA/A/18/04-05/675 Dated:

29. 7/05 To, M/S Cengrs Geotechnica Pvt. Ltd. Civil & Geotechnical Engineer, B-3/87, Safdarjung Enclave, New Delhi. – 110029 N.O.W:-

"C/O320258 M.S. Flats at Motia Khan. S.H.:-

"Providing boared cast in situ R.C.C. Piles Foundation for Construction of 144 houses (72+72) in block 3 & 4 at Motia Khan. including R.C.C. Plate D/Sir, -.-.-.-.-.-.-.-.- Reference your tender dated 23.4.2005 for the above said work. In this connection, it is to inform you that your tender has been rejected by the competent authority being a conditional tender. Accordingly, the Earnest Money i.e. Rs.5,98,986/- deposited by you in r/o the aforesaid work has been forefited under clause 13(a) of PWD-6. This is for your information please. Yours faithfully, Sd/- (EXECUTIVE ENGINEER) ND.-2/D.D.A.” Page 5 of 14 RFA1572017 15. A perusal of the said letter shows that the letter does not give any clarification as to how the tender was a conditional tender. Further, the validity period of the tender had admittedly expired. Accordingly, the Plaintiff had issued a legal notice on 18th August, 2005 stating that the clarifications sought by it, did not make the tender a conditional one and accordingly sought recovery. This was followed up another letter dated 17th November, 2005, 18th November, 2005, 10th April, 2006, 31st October, 2006 and 12th April, 2006. On 2nd June, 2007 (Exhibit-P-9), the DDA informed Geo Tech as under: - “5.

7. It is correct that the tender had a validity period of 90 days but this period is for acceptance of tender only. Earnest Money was forefeited under Clause 13(a) of the PWD-6 which reads as under :

13. a) “It may please be carefully noted that no condition whatsoever shall be accepted by the department and the Contractor is not prepared to execute the work at the terms and conditions contained in the tender documents, he is requested not to tender for this work. It may be noted that if any contractor choose to submit conditional tender inspite of clear direction given above, his tender shall be liable to rejected sommarilisertily and his full earnest money shall stand forfeited. He will also be liable for being debarred from tendering in DDA for a period of six months”.” 16. The DDA relied upon clause 13(a) of the PWD Manual-6 to justify the forfeiture. The correspondence did not end here. Almost a year later, Geo Tech wrote letter dated 30th May, 2008 which concluded as under: - “However, during our various discussions, we RFA1572017 Page 6 of 14 17. understood that the decision had been taken at appropriate level for the release of Earnest Money Deposit. However, we have not received the Earnest Money Deposit till date.” In response to this letter, on 12th June, 2008, the DDA wrote a letter to the following effect: - “No.F.EE/ND-2/DDA/A/78/04-05/704 Dated:

12. 6/08 To M/s Cengrs Geotechnica Pvt. Ltd. B – 3/87, Safdarjung Enclave, New Delhi – 110029. Sub: Tender for C/o
M.S. Flats at Motia Khan, SH: Providing bored cast-in-situ RCC Piles foundation including plate for C/o 144 M.S. Flats in Block No.3 & 4 at Motia Khan, NIT No.7/DD/ND-2/DDA/04-05 (Specialized work) Ref: No.PF/DDA/ND-2/374 dated 30th May, 2008. Sir, Please refer to the above cited letter regarding above cited work. Parawise reply of your letter is given below: - Para 1 to 4: It is a matter of record and needs no Para 5: Para 6: Para 7: comments. Your legal notice has been replied by this office vide letter No.F.EE/ND- 2/DDA/A/78/04-05/63-9 dated 2.6.07. Earnest money deposited by you has not been released by this office which is under consideration. No comments.” 18. This letter admitted that the refund is under consideration. Finally, the RFA1572017 Page 7 of 14 rejection took place on 24th June, 2008 and DDA refused to release the amount.

19. In the course of trial, Geo Tech also relied upon the minutes of the meeting dated 29th November, 2005 and the various noting pages and the agenda of the WAB. As per the recommendation of the WAB, the tender of Geo Tech was rejected on the ground that it was conditional and it was the case of the Geo Tech that even the WAB had not recommended forfeiture of the EMD. All these note sheets, file, papers of the DDA were relied upon by Geo Tech to argue that the matter was considered at the highest level and was being deliberated upon. Finally, what is relied upon by the Geo Tech is the evidence of the Engineer, DW-1, who appeared and testified that the final rejection took place on 24th June, 2008. The relevant portion of the evidence of DW-1 is set out herein below: - the same “The witness is confronted with page no.171 of Ex.PW
and he accepts the recommendation of the Chief Engineer to WAB. I do not remember whether the decision of WAB was only for rejection of tender. The witness is confronted with page no.115-116 of Ex.PW
and he admits that the WAB had taken a decision with respect to only rejection of tender. to be It is correct that after the forfeiture of EMD by DDA, the plaintiff sent a notice dated 18.8.2005 calling upon DDA to refund the EMD. I do not remember whether the request of the plaintiff was finally rejected by DDA in June, 2008. The witness is shown Ex.PW1/12 and he agrees that the request of the plaintiff for refund of EMD was rejected by DDA on 24.06.2008. I do not remember as to when the decision for forfeiture of EMD was taken by DDA and by whom. I do not know as to when the tender in question for the same work was floated again by DDA. The witness is RFA1572017 Page 8 of 14 shown the Minutes of Meeting and Corrigendum dated 29.11.2005 where the decision for re-floating the tender for the same work was taken and he admits the same to be correct and the same are Ex.DW1/PX-1 and Ex.DW1/PX-2 respectively.” 20. On the basis of the above evidence, it is clear that the actual final rejection took place on 24th June, 2008. The short question, therefore, is as to whether the letter dated 12th June, 2008 constitutes an acknowledgment. A perusal of the judgment in J.C. Budhraja (supra) clearly shows that the letter under consideration in the said case was as under: - “In view of the several representations made by the contractor in respect of Contract No.30/F-2 as also other contracts, OMC sent the following letter dated 28-10-1978 to the contractor: “Re.: Settlement of pending claims. You had called on Chairman, OMC, recently and apprised him of the dues receivable by you in respect of certain long pending matters such as mine benches work and raising at Kaliapani Quarry I. In the matter of Kaliapani it has been decided to constitute a committee which will go separately into your claims and other facts, in which connection you are requested to given all possible help and assistance, so that your dues, if any, will be ascertainable. In regard to other pending matters, you had indicated yourself that you will give the details of claims and payment received by you. This may be given within a day or two so as to enable OMC to settle up the above at the earliest.” 21. In the context of the above letter, the Supreme Court observed as under: - “21. It is now well settled that a writing to be an acknowledgement of liability must involve an RFA1572017 Page 9 of 14 admission of a subsisting jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability. The admission need not be in regard to any precise amount nor by expressed words. If a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgement. But if the defendant merely says, without admitting liability, it would like to examine the claim or the accounts, it may not amount to acknowledgement. In other words, a writing, to be treated as an acknowledgement of liability should consciously admit his liability to pay or admit his intention to pay the debt. Let us illustrate. If a creditor sends a demand notice demanding payment of Rs.1 lakh due under a promissory note executed by the debtor and the debtor sends a reply stating that he would pay the amount due, without mentioning the amount, it will still be an acknowledgement of liability. If a writing is relied on as an acknowledgement for extending the period of limitation in respect of the amount or right claimed in the suit, the acknowledgement should necessarily be in respect of the subject-matter of the suit. If a person executes a work and issues a demand letter making a claim for the amount due as per the final bill and the defendant agrees to verify the the acknowledgement will save limitation for a suit for recovery of only such bill amount, but will not extend the limitation in regard to any fresh or additional claim for damages made in the suit, which was not a part of the bill or the demand letter. Again we may illustrate. If a house is constructed under the item rate contract and the amount due in regard to work executed amount, bill and pay the RFA1572017 Page 10 of 14 liability, for breach by is Rs. two lakhs and certain part-payments say aggregating to Rs.1,25,0000 have been made and the contractor demands payment of the balance of Rs.75,000 due towards the bill and the employer acknowledges that acknowledgement will be only in regard to the sum of Rs.75,000 which is due. If the contractor files a suit for recovery of the said Rs.75,000 due in regard to work done and also for recovery of Rs.50,000 as damages the employer and the said suit is filed beyond three years from completion of work and submission of the bill but within three years from the date of acknowledgement, the suit will be saved from bar of limitation only in regard to the liability that was acknowledged namely Rs.75,000 and not in regard to the fresh or additional claim of Rs.50,000 which was not the subject-matter of acknowledgement. What can be acknowledged is liability. a An acknowledgment made with reference to a liability, cannot extend limitation for a time- barred liability or a claim that was not made at the time of acknowledgment or some other liability relating to other transactions. Any admission of jural relationship in regard to the ascertained sum due or a pending claim, cannot be an acknowledgement for a new additional claim for damages. present subsisting 22. We will now examine this case with reference to the said principles. In this case, the cause of action accrued on 14-4-1977 when the final bill was signed by the contractor. It is not in dispute that the final bill showed that a sum of Rs.17,69,608.73 was payable to the contractor (after giving credit to the payments made and after withholding a sum of Rs.7,45,953.83 as 5% security deposit). Towards the said sum of RFA1572017 Page 11 of 14 informed Rs.17,69,608.73, Rs.17 lakhs was paid on 25-2- 1976 and Rs.70,000/- was paid on 6-8-1977. The contractor had made some claims and OMC wrote a letter dated 28-10-1978 in regard to the pending claims of the contractor. In regard to Kaliapani matters, OMC the contractor that it has been decided to constitute a committee which will go into the claims of the contractor so that the dues, if any, could be ascertained. It further stated that on the details of the claims and payments received being given to the contractor, OMC will settle up the pending matters at the earliest. This clearly showed an intention on the part of OMC to admit the jural relationship of contractor and employer and an intention to settle the pending claims after being satisfied about them. Therefore, the letter dated 28-10-1978 was clearly an acknowledgement in writing in so far as the “pending claims” of the contractor. What were the pending claims is made clear in the letter dated 16-11-1978 written by the contractor enclosing a statement showing that in all, a sum of Rs.50,15,820 was due. The committee constituted by OMC examined these claims and admitted the claims only to an extent of Rs.3,52,916 as per its final report dated 7-12-1979. OMC paid Rs.3,50,000 on 4-3-1980.” 22. Thus, in J.C. Budhraja (Supra), the letter which informed the contractor that a committee had been constituted going into the claims of the contractor so that the dues, if any, will be ascertainable, was held to constitute an acknowledgment. Such a letter establishes a jural relationship between the parties and an intention to settle the claims.

23. Thus, what is to be seen is the existence of the jural relationship which was admitted and the intention to settle the claim of the party. In the RFA1572017 Page 12 of 14 present case, there is no doubt from the evidence on record and the documents, that though the initial rejection took place in 2005, there is no doubt that, owing to the representations made by Geo Tech, the request for refund of the EMD was under consideration. There was an intention to explore the possibility of settling the said claim made by Geo Tech. For any acknowledgment to be termed as such, it is not necessary for the exact amount to be admitted. As held in J.C. Budhraja (supra), the existence of the jural relationship and the matter being under consideration, itself constitutes an acknowledgment. Thus, the finding of the trial court that the suit was within limitation cannot be faulted with and is liable to be upheld.

24. Insofar as the second issue of the validity period is concerned, there is no doubt that on the date when the first forfeiture of the EMD was communicated to Geo Tech, the tender had already lapsed and the validity period had gone by. The EMD deposit is given for the purposes of ensuring that the bidder is a serious bidder and to ensure that the bidder does not in any manner resile from the bid submitted. After the validity of the tender expires, the bid is no longer valid and so is the EMD submitted along with the bid. The EMD dies with the bid itself. After the date of validity, the EMD could not have been, therefore, forfeited by the DDA.

25. In Kailash Nath Associates v. DDA (2015) 4 SCC136 the Supreme Court has held that the forfeiture of EMD deposit being in the nature of a penalty cannot be done without showing actual damages/loss. The relevant portion of the Kailash Nath (supra) is extracted hereinbelow: - “44. ….. Further, we cannot accept the view of the Division Bench that the fact that the DDA made a profit from re-auction is irrelevant, as that would fly in the face of the most basic principle on the award of RFA1572017 Page 13 of 14 26. damages – namely, that compensation can only be given for damage or loss suffered. If damage or loss is not suffered, the law does not provide for a windfall.” In view of the above discussion, the judgement of the trial court is liable to be upheld and the appeal is liable to be dismissed.

27. In the facts of this case, the interest shall run for the entire period @ 9% instead of the rate of interest awarded by the learned ADJ.

On 13th February, 2017, this Court had stayed the impugned judgment/decree subject to the DDA depositing the entire decretal amount. The decretal amount stands deposited in this Court and is lying in a fixed deposit. It is accordingly directed that the worthy Registrar General may release the sum of Rs.5,98,986/- along with interest @ 9% per annum w.e.f. 22nd July, 2005 till date. Any excess amount shall be refunded to the DDA. The demand draft be prepared within four weeks and be handed over to the Respondent through counsel in the presence of the Respondent’s authorised signatories.

28. List before the Registrar General for giving the computation of the amount to be released on 15th January, 2019. PRATHIBA M. SINGH JUDGE DECEMBER14 2018 Rekha RFA1572017 Page 14 of 14