JYOTI SARUP MITTAL Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) This suit was filed by the plaintiff for permanent and prohibitory injunction wherein plaintiff claimed that plaintiff was awarded work of a group of 1080 LIG Houses on "Design and Construct Basis" as per approved architectural drawing of the total value of Rs.9 crores. The work was required to be started on 9.9.2003 and stipulated date of completion was 8.9.2005. In terms of the contract plaintiff got furnished a Bank Guarantee No.35/03-04 dated 17.10.2003 for a sum of Rs.22,50,000/- through defendant No.2 in favour of defendant No.1.

(2.) In the written statement by defendant No.2, defendant No.2 submitted that the bank guarantee was issued by it in favour of defendant No.1 on 17.10.2003 for a sum of Rs.22,50,000/- and it was valid upto 9.9.2006. The bank guarantee was invoked by defendant No.1 vide its letter dated 11.8.2005 for a sum of Rs.22,50,000/- i.e. within the validity period and pay order in respect of the same was prepared. In the meanwhile this Court passed an order dated 12.8.2005 directing the answering defendant to maintain status-quo with regard to the bank guarantee. Accordingly the pay order already prepared, was not handed over to defendant No.1 and was being retained. The defendant No. 2 was not concerned with the other averments made by the plaintiff and therefore, has not admitted or denied any thing in respect of other averments concerning the contract.

(3.) Defendant No.1 in its written statement raised preliminary objection that suit was not maintainable due to the fact that bank guarantee furnished by the plaintiff was unconditional. The amount of Bank Guarantee was to be paid to the defendant No.1 by defendant No.2 without demur or objection. It is also submitted that the suit was not maintainable in view of the provisions of section 53-B (1) of DDA Act, since the plaintiff has failed to serve the mandatory notice as contemplated under the above provision. Also in terms of clause 24 of the Agreement, in case of any dispute the decision of Chief Engineer was binding and conclusive on the parties. It is further stated by defendant No.1 that the plaintiff did not approach the Court with clean hands and concealed the material facts. As per terms of the contract, the plaintiff was required to complete 75% of the work before 3/4th of the time as stipulated in the contract. The time stipulated in the contract was two years and the plaintiff achieved only 8% progress in 3/4th time in respect of the work to be executed. The plaintiff miserably failed to perform in terms of the conditions of the contract. The defendant No.1 had no option but to invoke the bank guarantee. A number of notices were served upon the plaintiff by the defendant No.1 for slow progress of work in terms of clause 15 and 16 of the Agreement, but plaintiff failed to achieve the desired progress. Hence suit was not maintainable. It is pleaded that it was a lump sum contract inclusive of all material, labour cost, with no escalation clause and everything was to be furnished by the plaintiff themselves. Plaintiff lacked sufficient resources for timely execution of the work. Looking at the fact that only 8% of the work was done in 1 years, the defendant No. 1 had no option but to cancel the contract.