2018 (5) TMI 1834 - HC - Indian Laws

Decree for recovery - It was the case of the Plaintiff that it is only after complete satisfaction of the work carried out is done under Rules 65 to 69 of the Electricity Rules, that the fees for inspection by the electrical inspector is paid - Held that - A perusal of the evidence and the pleadings on record clearly shows that the only justification being raised to withhold the payment was non-certification by REL, the obligation of which was not upon the Plaintiff. In the absence of any deficiencies being pointed out in the work executed by the Plaintiff, there can be no justification in withholding payments. The arrangement between the Defendant and its own Joint Venture Partner i.e. REL is an internal arrangement between them, and the Plaintiff cannot be saddled with outstanding amounts in this manner owing to their own internal issues. The Defendant having not led any evidence whatsoever to justify the withholding of the payment and having not pointed out any deficiencies in the work executed and further having deducted the TDS and deposit of the said tax with the government for the entire bill amount, there can be no justification in withholding the outstanding payments. The witness of the Defendant categorically admits that this contract was not a part of the work order between the Plaintiff and the Defendant. Though the electrical inspector s approval is required for all installations, Clause 1.1 (h) does not fix the burden of obtaining the inspector s approval upon the Plaintiff/Contractor. As stated by the Plaintiff s witness, it was the Defendant s responsibility and in fact the Defendant had paid the fee required for obtaining the electrical inspector s approval. It is clear that it was the Defendant s responsibility to get the approval of the electrical inspector. Appeal dismissed - decided against appellant.

Issues Involved:
1. Entitlement of the plaintiff to a decree for recovery.
2. Entitlement of the defendant to a decree for counterclaim.
3. Entitlement of the plaintiff to interest.
4. Cause of action for the plaintiff to file the suit.
5. Relief.

Issue-wise Analysis:

1. Entitlement of the plaintiff to a decree for recovery:
The plaintiff, an electrical contractor, completed a work order for the defendant involving the erection and commissioning of a High Voltage Distribution System (HVDS) in Sangam Vihar, South Delhi. The plaintiff claimed an outstanding amount of ?17,14,128/- from the total invoice of ?77,58,011/-. The defendant's primary defense was that payments were not certified by its Joint Venture Partner, REL, and thus, were not liable to be paid. However, the court found that the defendant had deducted TDS on the entire invoice amount, which indicated an acknowledgment of the liability. The court also noted that the defendant had no grievance regarding the work executed by the plaintiff and had even deposited the fees for inspection by the electrical inspector, which would not have been done if the project was incomplete. Consequently, the court upheld the plaintiff's entitlement to the recovery amount.

2. Entitlement of the defendant to a decree for counterclaim:
The defendant raised a counterclaim for ?63,52,193/-, arguing that the total sum payable to the plaintiff was ?62,32,159/-, with deductions for TDS, Work Contract Tax, Watch and Ward amount, and material shortage recovery. However, the court found no documentary evidence supporting these deductions and noted that the defendant's witnesses did not challenge the validity of the plaintiff's bills. The court concluded that the defendant's counterclaim was unsubstantiated and dismissed it.

3. Entitlement of the plaintiff to interest:
The court awarded interest at 12% per annum on the outstanding amount from the date of filing the suit until its realization. This decision was based on the finding that the defendant's withholding of the payment was unjustified, as no deficiencies in the plaintiff's work were pointed out, and the defendant had deducted TDS on the entire billed amount.

4. Cause of action for the plaintiff to file the suit:
The court found that the plaintiff had a valid cause of action to file the suit, as the defendant had failed to clear the outstanding dues despite repeated requests and legal notice. The plaintiff's attempts to resolve the issue amicably were documented, and the court noted the defendant's lack of bona fide conduct in commercial dealings.

5. Relief:
The court upheld the trial court's judgment and decree, directing the release of the amount deposited in the court to the plaintiff within two weeks. The appeal was dismissed, and no order as to costs was made.

Conclusion:
The court dismissed the defendant's appeal and upheld the trial court's decision, granting the plaintiff recovery of the outstanding amount along with interest. The defendant's counterclaim was rejected due to a lack of supporting evidence, and the court emphasized the defendant's responsibility to fulfill its payment obligations irrespective of its internal arrangements with REL.

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