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1997 DIGILAW 333 (DEL)

KARTAR SINGH AND SONS PRIVATE LIMITED v. AUTO TENSION LIMITED

1997-04-04

B.K.RAMAMOORTHY

body1997
K. Ramamoorthy ( 1 ) IA No. 918/95 is filed on behalf of the plaintiff under Order 39 Rules 1 and 2 for injunction IA No. 6206/96 is filed on behalf of the defendant under Order 39 Rule 4, Civil Procedure Code to set aside the order passed by this Court on 10. 01. 1995. The plaintiff has filed a suit for recovery of Rs. 22. 81,602. 60. Briefly stated the case of the plaintiff is this. The defendant awarded the work of the construction of the factory building at Noida, Phase-II to the plaintiff vide letter dated 15. 10. 1986. M/s Andleys Associates Pvt. Ltd. was appointed as Architects for the said project by the said defendant. It was the duty of the Architect to issue certificate on the basis of which money would be paid by the defendant. Differences and disputes arose between the parties and under condition No. 123 of the Contract, the differences were to be settled in accordance with condition. The work had to be suspended owing to various acts and omissions of the defendant. There was reconciliation between the parties. The plaintiff wrote a letter dated 17. 11. 1988 agreeing to restart the work and the same was accepted by the defendant vide letter dated 26. 12. 1988. The scope of the work was extended by the defendant. The main factory building was completed and the possession was given to the defendant on 31. 03. 1990. The other miscellaneous item of works were completed in May 1990. On 31. 03. 1990 the plaintiff submitted the last interim bill for the main factory building and the same was certified by the Architect on 15. 01. 1991. On 20. 05. 1990 the defendant made the last interim payment to the plaintiff. The bills were sent to the defendant and the Architect certified on 12. 03. 1991 that a sum of Rs. 9,80,332. 00 was due from the plaintiff to the defendant. On 04. 10. 1991 the plaintiff issued a demand by registered letter making the demand for the sum of Rs. 16,39,651. 90 the final bill was submitted on 30. 06. 1992 and certified by the Architect on 06. 05. 1993. The Architect certified that a net sum of Rs. 2,14,660. 00 was payable in addition to the amount already certified. On 04. 10. 1991 the plaintiff issued a demand by registered letter making the demand for the sum of Rs. 16,39,651. 90 the final bill was submitted on 30. 06. 1992 and certified by the Architect on 06. 05. 1993. The Architect certified that a net sum of Rs. 2,14,660. 00 was payable in addition to the amount already certified. The total amount payable by the defendant to the plaintiff as per the certificate issued by the Architect was Rs. 17,17,643. According to the plaintiff a sum of Rs. 11,95,622. 80. On 27. 05. 1993 the plaintiff again wrote to the defendant calling upon the defendant to pay Rs. 11,95,622. 80 as principal amount and Rs. 5,22,020. 20 was the interest upto 15. 06. 1993. According to the plaintiff the defendant failed to send the TDS certificate for Rs. 1,66,219. 00. In terms of the contract between the parties, arbitration, in terms of Clause 123 of the contract was a condition precedent for any right of action under the contract. By a letter dated 05. 02. 1994, the plaintiff REFERRED TO the claim to the Architect for determination and final decision. On 12. 02. 1994, the Architect wrote to the defendant to produce evidence to establish if the defendant had made any payment against the certified amount of Rs. 9,80,332. 00 and Rs. 2,14,660. 00 with interest thereon and whether the defendant deposited TDS for an amount of Rs. 65,436. 00. The defendant did not reply to the letter dated 12. 02. 1994. On 28. 05. 1994, the Architect again wrote to the defendant that if the defendant failed to take any action within 10 days from the receipt of the letter, the plaintiff would be at liberty to take action against the defendant. There is no reply from the defendant. The Architect gave its final decision on 17. 06. 1994 in the following terms: "after reconsidering the whole position on record, we state our final decision as follows: 1) We reconfirm our certificate as already issued. 2) In case the payments made to the contractor by you are at variance with the amounts as certified by us, the balance should be cleared by you on or before 30. 06. 1994. 3) Outstanding certificates for TDS should be issued to the contractor as per the rules, on or before 30. 06. 1994. 2) In case the payments made to the contractor by you are at variance with the amounts as certified by us, the balance should be cleared by you on or before 30. 06. 1994. 3) Outstanding certificates for TDS should be issued to the contractor as per the rules, on or before 30. 06. 1994. In the alternative equivalent amount be paid by you to the contractor. 4) Liability to pay interest arises on account of and to the extent of delayed payments. The same be cleared simultaneously with the payment as per para 2 above. With this we treat the matter as finally closed at our end". This was communicated to the defendant by a registered post. The defendant could have challenged the decision of the Architect within 20 days after the receipt of the same under Clause 123 of the Contract that was not done. On 31. 08. 1994, the plaintiff issued notice to the defendant through plaintiff s counsel calling upon the defendant to pay the sum of Rs. 21,53,296. 72. There was no reply from the defendant. Hence the suit is filed by the plaintiff. The plaintiff has filed the documents as annexures to the plaint. ( 2 ) ON 03. 02. 1995, this Court passed the following orders in IA No. 918/95: Though the application is styled as one under attachment before judgment. Issue notice to the defendant calling upon them to furnish security in the suit amount or to appear and show cause why they be not required to furnish security. Notice be made returnable on 08. 03. 95. On 10. 10. 1995, this Court passed the following order in IA No. 918/95: Defendants have not complied with the order passed by this Court on 03. 02. 95. There shall be an attachment of the factory C-46, Noida, Phase-II, U. P. ( 3 ) ON 16. 04. 1996, the defendant filed the written statement. According to the defendant in May 1990 the plaintiff abandoned the work. The defendant intimated the Architect about the abandoning the work. The defendant also intimated about the defects of work executed by the plaintiff. The Architect did not visit the site and the defendant would state "it seems that he colluded with the plaintiff. The Architect is guilty of misconduct". The plaintiff is not entitled to any amount from the defendant. The defendant intimated the Architect about the abandoning the work. The defendant also intimated about the defects of work executed by the plaintiff. The Architect did not visit the site and the defendant would state "it seems that he colluded with the plaintiff. The Architect is guilty of misconduct". The plaintiff is not entitled to any amount from the defendant. The defendant denied the allegation of the plaintiff that the main factory building was completed on 31. 03. 1990 and the miscellaneous item of works were completed in May 1990. The defendant admits in para 9 in the written statement on the merit "it is correct that last interim payment was made to the plaintiff on 20. 05. 90". The defendant would challenge the certificate issued by the Architect. The certificate dated 06. 05. 1993 was issued by the Architect in collusion with the plaintiff. The defendant would state in para 19 that the defendant did not receive the Architect s letters dated 12. 02. 1994 and 28. 05. 1994. The defendant would state "the alleged decision of the Architect dated 17. 06. 1994 is also denied by the answering defendant". The defendant does not deny the receipt of the decision of the Architect. The receipt of the legal notice dated 31. 08. 1994 is admitted. A reading of the correspondence and the pleading makes it clear now that the defendant has projected the case of the defects and the abandonment of the work by the plaintiff for the purpose of this case. This is only my, prima facie view. No explanation has been forthcoming from the defendant as to why the defendant did not reply to any of the letters from the plaintiff and also the notice issued by the plaintiff through its counsel. In the light of the facts which I had adverted to above, it is my prima facie view that the plaintiff has established a strong case on the merits and the defendant is liable to pay the amount to the plaintiff. ( 4 ) THIS Court directed the defendant to furnish security and that was not done, therefore, the attachment order was passed on 10. 10. 1995. ( 4 ) THIS Court directed the defendant to furnish security and that was not done, therefore, the attachment order was passed on 10. 10. 1995. ( 5 ) IN the IA No. 6206/96, it is stated by the defendant that the plaintiff has not made out a case under Order 38 Rule 5, Civil Procedure Code and the plaintiff does not satisfy the requirements of Order 38 Rule 5, Civil Procedure Code and, therefore, in the light of language of the Order 38 Rule 5, Civil Procedure Code the order of attachment is void and, therefore, it should be vacated. It is also stated by the defendant that the defendant is a Company doing very well in the business owing big assets of several crores and in the event of plaintiff getting a decree there will be no difficulty for the plaintiff to release the same and, therefore, when the plaintiff has not made out a case under Order 38 Rule 5, CPC, the plaintiff is not entitled to an order of attachment of the property. ( 6 ) LEARNED counsel for the defendant Mr. Midha submitted that the order of attachment passed by this Court is void and the defendant is bound to furnish the security only when the requirement of law had been fulfilled by the plaintiff. He relied upon the decision of this Court reported in (1) Indian Railway Construction Co. Ltd. Vs. M/s Quadricon Pvt. Ltd 1994 (55) Delhi Law Times 694, (2) Mrs. Pampa Mukherjee Vs. Uri Civil Contractor A. B. 1994 (56) Delhi Law Times 423, (3) Bank of India Vs. M/s National Tile Work Industries and ors AIR 1989 Delhi 60 and (4) Shri Hari Shankar Vs. Shrimati Bhoori Devi 1975 (VOL. 9) Delhi Law Times 159. Learned counsel submitted that the ratio in these cases would apply to the facts of the case which is before me and, therefore, the order of attachment should be recalled. ( 7 ) LEARNED counsel for the defendant Mr. Midha also brought to my notice the balance sheets, the details of fixed assets of the defendant Company at page 18 of the printed booklet filed by the defendant for the year 1991-92 it was Rs. 9,24,02,914. 04, for the year 1992-93 Rs. 9,29,58,007. 03 and for the year 1993-94 Rs. 6,79,78,187. 40 and, therefore, the defendant is a Company of substantial means. 9,24,02,914. 04, for the year 1992-93 Rs. 9,29,58,007. 03 and for the year 1993-94 Rs. 6,79,78,187. 40 and, therefore, the defendant is a Company of substantial means. But on a perusal of this report would show that the assets of the Company are moveable assets and it is the business assets for the Company and they may change depending upon the business of the defendant in future. The only immoveable property available is the factory. ( 8 ) HAVING regard to the conduct of the defendant I am very clear in my mind, prima facie that the allegation made by the plaintiff that the defendant has got only this property and the defendant is likely to dispose of the property is not without any foundation. There is no hard and fast rule in matters like this. When the plaintiff has made out a prima facie case on the merits the defendant should be directed to furnish security pending the disposal of the suit. This Court on 03. 02. 1995, directed the defendant to furnish security and the application was filed by the defendant on 12. 07. 1996. No body can have any quarrel with the proposition of law laid down by this Court in the above cases REFERRED TO to by the learned counsel Mr. Midha. But as I pointed out above, the exercise of discretion by Court would depend upon the facts and circumstances of each case. The defendant has been keeping quite for a considerable length of time and it is not now open to say that there was defect in the work done by the plaintiff and the plaintiff abandoned the work. Having regard to the facts and circumstances of the case therefore, order dated 10. 10. 1995 attaching the immoveable property is made absolute. IA No. 918/95 filed by the plaintiff is allowed. Consequently, IA No. 6206/96 filed by the defendant under Order 39 Rule 4, Civil Procedure Code is dismissed. Post the matter for framing of issues on 20. 08. 1997.