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2010 DIGILAW 643 (CAL)

Devbhoomi Awas Limited v. Antelec Limited

2010-06-16

SANJIB BANERJEE

body2010
JUDGMENT SANJIB BANERJEE, J. 1. The petitioner claims as an unpaid creditor on account of services rendered. The petitioner was engaged for carrying out electrical works at leisure villas being constructed by the company in the sylvan surroundings near Rishikesh in the Garwal Himalayas. The agreement was executed on December 21, 2005. 2. The petitioner says that though the agreement specified a completion date, the electrical work could not be taken up as originally contemplated since the civil work had not been completed within time. The company claims at the hearing that there was delay on the part of the petitioner which resulted in the completion date being overshot. Both parties rely on the minutes of a meeting held between their representatives on March 12, 2008. The petitioner concedes that it is the copy of the minutes relied upon in the affidavit-in-opposition which is the more authentic. 3. The minutes of the meeting held at the company’s Nehru Place, Delhi office on March 12, 2008 recorded that the petitioner “will endeavour to complete the above mentioned works and all such works which are necessary for virtual completion by 15th April 2008.” The minutes further recorded that the petitioner had requested for compensation in view of the increase in the prices beyond the initially contemplated time schedule. The parties agreed at such meeting to enhance the rates of the items supplied and executed after March 12, 2007 by 12 per cent except for the rates of extra items on which the enhancement would not be applicable. 4. It is such increase in rate that the petitioner brandishes as its trump card. The petitioner says that the defence urged by the company that the delay was occasioned by the petitioner is belied by the fact that the delay is not attributed to the petitioner in the minutes of the meeting of March 12, 2008 and the fact that the price was increased because of the extended completion schedule. The company contends that the company was constrained to give in to the petitioner’s demand for enhancing the price since the company would have been seriously inconvenienced if the petitioner had withdrawn from the project and since agencies to carry out electrical works of such magnitude were not readily available in and around Rishikesh. 5. The company contends that the company was constrained to give in to the petitioner’s demand for enhancing the price since the company would have been seriously inconvenienced if the petitioner had withdrawn from the project and since agencies to carry out electrical works of such magnitude were not readily available in and around Rishikesh. 5. The manner in which the minutes of the meeting of March 12, 2008 have been recorded does not give credence to the company’s present stand that it was the petitioner who was to blame for the agreed schedule not being adhered to. The minutes do not ascribe any blame to the contractor and there appears to be an unqualified acceptance of the petitioner’s demand for increasing the rates. Indeed, if the company’s present stand were to be believed, the said minutes ought to have recorded that the contractor was, at least, partly to blame for the delay and the acceptance of the demand for enhancing the rates would have been couched in slightly more reserved and grudging words than used in the minutes. 6. The petitioner claims that a debit-note was thereafter raised on the company on or about May 8, 2008 to reflect the enhanced rates after the contract completion date. A copy of the debit-note appears as annexure “C” (page 54) to the petition. There is no denial that such debit-note was received by the company without any immediate grievance. By a letter of May 21, 2008 the petitioner informed the company that it had accomplished the targeted tasks and had demobilised from the site. The petitioner requested for appropriate gate-pass to be issued to enable the petitioner to remove the petitioner’s material from the site. Prior to such letter, the petitioner forwarded two sets of its final bill dated May 8, 2008 to the site office of the company under cover of a letter dated May 9, 2008. The endorsement on the letter reveals that the company’s site office forwarded the same to its head office. 7. On May 19, 2008 the petitioner issued an electronic mail informing the company that the petitioner had executed the work till May 13, 2008 and final measurements had been certified by the company’s site engineer. The petitioner says that there was no complaint by the company as to the workmanship or the final bill raised. 7. On May 19, 2008 the petitioner issued an electronic mail informing the company that the petitioner had executed the work till May 13, 2008 and final measurements had been certified by the company’s site engineer. The petitioner says that there was no complaint by the company as to the workmanship or the final bill raised. The petitioner refers to an e-mail message of May 23, 2008 where the company called upon the petitioner “to prepare a detailed and comprehensive status report of the work and list the works which you are unable to execute so that an alternative plan could be worked out.” By the same communication, the company complemented the petitioner for “the excellent work carried out by you” and emphasised that the status report was necessary for the satisfactory completion of the work. The status report was forwarded by a communication of May 28, 2008. There was no immediate response from the company. The petitioner says that the petitioner was permitted to remove the petitioner’s material from the site upon gate-pass being issued on or about June 29, 2008. 8. By a writing of August 7, 2008 the petitioner demanded that the payment due to it be released. A subsequent demand in writing followed on August 26, 2008. From a further e-mail message of December 16, 2008 issued by the petitioner, it is evident that an ad hoc amount of Rs.10 lakh was released by the company on November 5, 2008. There was no contemporaneous grievance expressed by the company despite the petitioner’s demands in writing for payment made on August 7, 2008, August 26, 2008 and December 16, 2008. It is not in dispute that such written demands were received by the company. 9. The statutory notice was issued on January 22, 2009, claiming a sum of Rs.41,88,876/- together with interest at the rate of 18 per cent per annum. The amount claimed included an interest component on compounding basis. The principal claim in such notice was in the sum of Rs.37,33,055/-. 10. The company responded on February 10, 2009. The reply runs into ten pages. At paragraph 6 thereof, the company alleged that the petitioner had failed to perform the work within the stipulated period of 15 months and insisted that the petitioner had failed to procure some key equipment. 10. The company responded on February 10, 2009. The reply runs into ten pages. At paragraph 6 thereof, the company alleged that the petitioner had failed to perform the work within the stipulated period of 15 months and insisted that the petitioner had failed to procure some key equipment. At paragraph 12 of the reply there is a reference to the increase in the rates at the meeting of March 12, 2008 without any explanation as to how the company was to suffer both on account of the petitioner failing to complete the work within the stipulated time and by having to pay at an enhanced rate. The reply referred to the correspondence exchanged between the parties including the company’s e-mail message of May 23, 2008 and suggested that the payment of Rs.10 lakh on November 5, 2008 was as per of the terms of the minutes of the meeting for items of work completed within time. The company asserted that not only was no further amount due to the petitioner, it was the company which was entitled to be compensated by the petitioner. 11. Two aspects of the matter stand out from the company’s answer to the statutory notice. There is no explanation in the letter as to why the stand taken therein was not reflected in the previous correspondence exchanged between the parties; as to why the two written demands of August, 2008 passed without any response and as to why the petitioner’s statement in its e-mail message of December 16, 2008 that the payment of Rs.10 lakh of November 5, 2008 was an ad hoc release of the amount due to the petitioner remained uncontroverted prior to the reply to the statutory notice. The other feature of the company’s reply to the statutory notice is the colossal failure therein to refer to a letter of May 26, 2008 which the company has now set up as its sheet-anchor. 12. A copy of the letter said to have been issued by the company to the petitioner on May 26, 2008 appears at annexure “A” to the company’s affidavit. The petitioner has altogether denied receipt of such letter in its affidavit-in-reply. 12. A copy of the letter said to have been issued by the company to the petitioner on May 26, 2008 appears at annexure “A” to the company’s affidavit. The petitioner has altogether denied receipt of such letter in its affidavit-in-reply. The petition was taken up for hearing at the pre-admission stage on an earlier occasion when, after the petitioner’s submission was concluded, the company submitted that the petitioner’s challenge to the existence and veracity of such letter of May 26, 2008 was without basis since the company could produce unimpeachable evidence of such letter having been served on the petitioner. Since the company had not, at the outset, sought leave to produce its best evidence to demonstrate that the petitioner had received such letter and since the company had failed to furnish proof of delivery of such letter in its affidavit-in-opposition, the company was required to pay substantial costs for being granted leave to use a supplementary affidavit to show that the letter had been served on the petitioner. 13. In its supplementary affidavit the company has produced a consignment note and the receipted copy thereof issued by the private courier apparently assigned the job. The petitioner has used a rejoinder to the company’s supplementary affidavit where it had denied the rubber stamp and signature attributed to it in the courier’s proof of delivery. The petitioner says that in the usual course of business it maintains a letter receipt register and the petitioner has relied on copies of the relevant pages from such register to show that no letter from the company was received during the period. The petitioner says that an incomplete address of the petitioner without even the postal index number appears from the consignment note and the consignor’s address is also not indicated therein. The petitioner has argued in its rejoinder that though the company has an office at Nehru Place in New Delhi, as would appear from some of the undisputed correspondence relied upon in these proceedings, the courier engaged by the company was from Naraina Vihar some 20 km away from Nehru Place. The petitioner has also questioned the purported rubber stamp that appears on the POD copy and says that the dimensions thereof do not match the uniform dimensions of the imprint of the petitioner’s rubber stamp that appears in the undisputed correspondence. 14. The petitioner has also questioned the purported rubber stamp that appears on the POD copy and says that the dimensions thereof do not match the uniform dimensions of the imprint of the petitioner’s rubber stamp that appears in the undisputed correspondence. 14. The letter that the company seeks to rely on, of May 26, 2008, apparently had this to say:- “This refers to our email dated 23rd May 2008 wherein we have expressed our concern about withdrawal of your team from the site without completing the work as per the contract. All along you have been assuring us that you would be completing the work, therefore this sudden action has put us in a difficult situation. Our project is in the final stages of handing over and your non cooperation will result in colossal financial loss. Please confirm that you would be deputing your team at the site immediately. We have scrutinized the Final bill prepared by you for the work carried out at the site. We are shocked to note that you have billed 100% for many items of work without completing the same. We, therefore, strongly refute the amounts claimed by you in the final bill. The attached list shows the pending works which must be completed without any further delay. We shall appreciate your cooperation in this regard and would except you to complete the works so that your final bill could be processed for payment.” 15. The contents of such document ring a jarring note. Notwithstanding the electrical work not being completed even a year after the schedule date of completion, there was no grievance as to the petitioner’s conduct made by the company at the relevant point of time nor was there any finger-pointing at the petitioner. Even if the minutes of the meeting of March 12, 2008 overlooked such aspect, the company had several opportunities between May and December, 2008 to suggest to the petitioner that the petitioner was at fault. Even the company’s e-mail of May 23, 2008 merely sought a status report so that an alternative plan could be worked out for the completion of the work that the petitioner was unable to execute. Even the company’s e-mail of May 23, 2008 merely sought a status report so that an alternative plan could be worked out for the completion of the work that the petitioner was unable to execute. If the company complemented the petitioner’s workmanship on May 23, 2008, it is difficult to accept that three days down the line it would word a letter in the manner that the document of May 26, 2008 would have one believe. 16. Again, if the company had refuted the petitioner’s final bill and if the company had, indeed, prepared a list of unfinished work which the company had called upon the petitioner to complete (the list is appended to the purported letter of May 26, 2008), the company would have said so and referred to the list upon receipt of the petitioner’s several demands between August and December, 2008. If the contents of the letter of May 26, 2008 were to be accepted, it would be difficult to fathom that the company would allow the petitioner to remove its men and material from the site without so much as a whimper. Further, if the company genuinely refuted the petitioner’s final bill and if the company’s assertion in the letter of May 26, 2008 that the petitioner had caused it loss was bona fide, there was no question of the company releasing the payment of Rs.10 lakh on November 5, 2008 – whether by way of an ad hoc release or on account of specific items of works completed by the petitioner. There was no reservation expressed by the company at the time of releasing the payment in November, 2008. It leads to the inescapable conclusion – particularly as the disputed letter of May 26, 2008 fails to find any mention in the undisputed correspondence or even in the company’s response to the statutory notice – that such document has now been brought into existence by the company to try and set up a defence to the petitioner’s claim. 17. There is no merit in the company’s defence and the petitioner is entitled to an order of admission. However, the company is afforded the luxury to contest the claim in a suit that may be brought by the petitioner, subject to the company furnishing security in respect of the principal claim of the petitioner in the sum of Rs.37,33,055/-. 17. There is no merit in the company’s defence and the petitioner is entitled to an order of admission. However, the company is afforded the luxury to contest the claim in a suit that may be brought by the petitioner, subject to the company furnishing security in respect of the principal claim of the petitioner in the sum of Rs.37,33,055/-. In the event such security is furnished within a period of four weeks from date before the Registrar, Original Side, the claim of the petitioner will stand relegated to a suit and the security will stand to the credit of the suit that may be brought by the petitioner within a period of ten weeks from date. The company will furnish the security upon intimation to the petitioner and the Registrar, Original Side, will make a fixed deposit of the money in a nationalised bank within the vicinity of this Court. 18. Upon the security being furnished as directed, CP No. 292 of 2009 will remain permanently stayed. The observations in this order should not prejudice either party to the proposed suit. 19. In default of the security being furnished within the time permitted, the petition will stand admitted for the principal sum of Rs.37,33,055/- together with interest thereon at 10 per cent per annum from the date of the statutory notice. In such event the petitioner will advertise the petition in The Statesman and in Aajkaal. Publication in the Official Gazette will stand dispensed with. The advertisements should indicate that the matter will appear in Court on the first available working day after the expiry of four weeks from the date of publication. 20. In the event the petitioner fails to file the suit within the time permitted notwithstanding the security having been furnished by the company, the company will have liberty to mention the matter upon notice to the petitioner for the security to be directed to be immediately released. There will be no order as to costs at this stage. Urgent certified photocopies of this judgment, if applied for, will be made available to the parties subject to compliance with all requisite formalities.