DELHI DEVELOPMENT AUTHORITY Vs. HARCHARAN DASS GUPTA

JUDGEMENT

(1.) THIS is a suit for recovery of Rs.7,82,41,640/-. The defendant no.1, which is a partnership firm of defendants no.2 to 5, was awarded a contract for construction of 400 LIG houses in Group-III, of the value of Rs.9,49,41,058/- and the stipulated date for completion of the work was 16.8.2005. It is alleged in the plaint that from the very beginning, the defendants did not adhere to the time-schedule as per the contract between the parties. The defendant No. 1 was required to sign the formal agreement within seven days of issue of award letter dated 7.8.2003. It, however, delayed the signing of the agreement and avoided to start the work on totally flimsy ground, that the terms and conditions of the tenders were contradictory. The objections raised by the defendant vide letter dated 11.8.2003 were clarified by the DDA vide letter dated 22.08.2003 and the defendant asked to start the construction work. The defendant however, did not commence the work and raised frivolous pleas vide letter dated 13.9.2003. The plaintiff was, therefore, constrained to issue notice dated 9.10.2003 giving last and final opportunity to the defendant to start the work. Thereafter, the agreement was signed by the defendant only on 17.10.2003 and the site was taken over on that very date, though it should have been taken over by 17.8.2003. It is alleged that deficient drawings were submitted on 4.11.2003, though they were required to be submitted by 15.9.2003 and a number of deficiencies were found in those drawings, which were later re-submitted on 24.11.2003. Again there were major mistakes in the earlier drawings and the same were accordingly returned to the defendants. Initially, the defendants informed the plaintiff that there were some mistakes in the design calculation, but later informed that there was no mistake in the design. The design was accordingly approved by the plaintiff on 20.02.2004. On account of delay on the part of the defendants, the work could not begin from 15.9.2003 to 27.01.2004. Since the defendants were delaying the construction of work on one pretext or the other, the plaintiff issued a show-cause notice to defendant No. 1 stating therein that it was required to achieve 25% progress within six months but the progress on the site was practically Nil. The reasons given by the defendant for the delay were not found satisfactory by the Superintendent Engineer. He, however, granted indulgence to them and cautioned that he reserved the right to impose compensation in case sufficient progress was not achieved within next three months. Since the defendants failed to achieve the desired progress, the plaintiff issued another show cause notice stating therein that the progress achieved at the site was only 7% as against the stipulated requirement of 50% which ought to have been achieved at that time. The defendant was time and again requested to accelerate the progress of the work. Since the defendants failed to adhere to the time-schedule for completion of the work, compensation amounting to Rs.94,94,106/- under Clause 16 of the agreement was levied upon them by the Superintendent Engineer vide letter dated 7.3.2005. Since defendant No. 1 had completely abandoned the work, a notice under Clause 17 of the Agreement was also issued to it on 9.3.2005 and the contract was later rescinded vide letter dated 7.5.2005.

(2.) THE plaintiff had paid mobilization charges of Rs.47.47 lac to the defendants against a bank guarantee of Rs.48 lac. The mobilization advance was to carry interest @ 16% per annum. Consequent to recision of the contract, the plaintiff is claiming Rs.18,93,622/- per annum being the balance of mobilization advance and interest on it after adjusting the bank guarantee furnished by the defendants. The plaintiff is also claiming Rs.4,36,023/- towards interest on the balance of mobilization advance @ 16% per annum for the period from 3.11.2006, till filing of the suit.

(3.) IT is alleged in the plaint that under Clause 17 of the Agreement, the plaintiff was entitled to get such part of the work which remained unexecuted from another contractor and recover the excess amount, if any, paid by it from the defendants. After rescinding the contract on 7.5.2005, the plaintiff invited tenders for the balance work to be executed at the risk and cost of the defendants. That work was awarded to M/s C.R.Sons Builders & Developers @ Rs.8801/- per sq. meter plinth area, whereas the work to the defendant had been awarded @ Rs.5109/- per square meter plinth area. The excess amount which the plaintiff had to pay on this account is Rs.6,30,51,492/-.