Delhi District Court
Neeraj Aggarwal vs Municipal Corporation Of Delhi on 31 July, 2025
DLCT010168132024
IN THE COURT OF SH. VIDYA PRAKASH
DISTRICT JUDGE (COMMERCIAL COURT)-01
CENTRAL DISTRICT, TIS HAZARI COURTS, DELHI
CNR NO.: DLCT01-016813-2024
CS (COMM)/1169/2024
IN THE MATTER OF:-
Sh. Neeraj Aggarwal
Proprietor of: M/s Aggarwal Associates
S/o: Sh. S. L. Aggarwal
R/o: C-6B/177, Janakpuri
New Delhi-110058
...... PLAINTIFF
VERSUS
Municipal Corporation of Delhi
Through Its Commissioner
Civic Centre, Minto Road
New Delhi-110002
......DEFENDANTS
Date of institution of suit [e-filing] : 22-10-2024
Date of Registration : 23-10-2024
Date of reserving judgment : 28-07-2025
Date of pronouncement of judgment : 31-07-2025
JUDGMENT
1. Vide this judgment, I shall dispose off the present suit for
recovery of ₹12,34,701/- along with interest and costs,
filed by plaintiff against the defendant.
BRIEF FACTS OF THE CASE:
2. The case of the plaintiff, as culled out from the plaint and
the documents filed therewith, is as under:-
CS (COMM)/1169/2024 Page 1 of 35
2.1 Plaintiff is stated to be a registered contractor of the
defendant/MCD, vide Registration No.179/280/
IV/Civil dated 04-04-2022. It is stated that since
long, the plaintiff has been executing the work
orders, civil in nature, for the defendant/MCD.
2.2 Defendant/ Municipal Corporation of Delhi is
shown to a body corporate of State of Delhi,
established and governed under the M.C.D. Act,
which had awarded the work contracts in dispute to
the plaintiff.
2.3 It is stated that upon fulfilling all requisite pre-work
order conditions to the satisfaction of defendant, the
plaintiff was awarded the following seven work
orders for nature of works as mentioned therein, by
the defendant:-
2.3.1 EE M-1 KBZ/SYS/2014-15/218 dated
28.11.2014 [hereinafter referred to as ‘Work
Order No.218’ in short];
2.3.2 EE M-1 KBZ/SYS/2014-15/217 dated
28.11.2014 [hereinafter referred to as ‘Work
Order No.217’ in short];
2.3.3 EE M-1 KBZ/SYS/2014-15/439 dated
09.01.2015 [hereinafter referred to as ‘Work
Order No.439’ in short];
2.3.4 EE M-1 KBZ/SYS/2014-15/141 dated
07.11.2016 [hereinafter referred to as ‘Work
Order No.141’ in short];
CS (COMM)/1169/2024 Page 2 of 35
2.3.5 EE M-1 KBZ/SYS/2014-15/142 dated
07.11.2016 [hereinafter referred to as ‘Work
Order No.142’ in short];
2.3.6 EE M-1 KBZ/SYS/2014-15/159 dated
27.12.2016 [hereinafter referred to as ‘Work
Order No.159’ in short]; and2.3.7 EE M-1 KBZ/SYS/2014-15/234 dated
09.0.2019 [hereinafter referred to as ‘Work
Order No.234’ in short].
2.4 Accordingly, the plaintiff entered into agreements
with the defendant.
2.5 It is the case of the plaintiff that he executed and
completed the said work orders to the satisfaction of
officials, including Engineer In-charge of the
defendant, and without any negative remarks;
and thus, the defendant completed the final
measurements of the aforesaid work orders in
Measurement Books and bills total amounting
to ₹29,84,145/-, were passed. Details of the
amount of bills and dates of passing and part
payments made thereof, are given in Para no.5 of
the plaint.
2.6 It is the further case of the plaintiff that despite
passing of the above mentioned bills, the
corresponding payments were neither disbursed to
the plaintiff, nor was the plaintiff informed of any
reason for withholding the said payments.
CS (COMM)/1169/2024 Page 3 of 35
2.7 It is further stated that the plaintiff, thus, was
constrained to file a writ petition bearing W.P. (C)
No.14989/2021 titled as ‘M/s. Aggarwal Associates
Vs. M.C.D.’ before the Hon’ble High Court of
Delhi, wherein the defendant was directed, vide
order dated 25-01-2023, to make the payment within
8 weeks from the date of passing of Judgment and
so far as the plaintiff’s prayer for interest on delayed
payment is concerned, it was ordered that they may
pursue their remedy by initiating appropriate
proceedings in accordance with law.
Further, it is stated that the defendant filed
L.P.A. No.253/2023 against the said order,
whereby the Division Bench of Hon’ble Delhi High
Court was pleased to modify the order,
vide order dated 26.04.2023 and the defendant was
given one year time for making the payment along
with interest 12% p.a. from the date of the order of
Ld. Single Judge. The Hon’ble High Court was
further pleased to hold that the order of Ld. Single
Judge relegated the writ petitioner to pursue their
remedy by initiating appropriate proceedings in so
far as the interest is concerned, was not being
interfered with.
2.8 Thus, it is stated that the plaintiff is entitled to
the interest calculated upto 25.01.2023, as
per the order of Hon’ble Delhi High Court, as per
the following details:-
CS (COMM)/1169/2024 Page 4 of 35
Sr. Work Date of Amount of Period No. of Interest
No. order bills Bill passed months amount
nos. and passed and security and
dates amount days
1. 218 15.09.15 3,50,358/- 15.09.15 82 1,92,294/-
dated to months
28.11.14 25.01.23 10
days
2. 217 31.08.16 6,19,426/- 31.08.16 67 2,79,932/-
dated to months
28.11.14 25.01.23 24
days
3. 439 30.11.15 3,69,896/- 30.11.15 81 2,01,657/-
dated to months
09.01.15 25.01.23 24
days,
4. 141 23.02.17 3,63,539/- 23.02.17 65 1,57,527/-
dated to months
07.11.16 25.01.23
5. 142 23.02.17 3,91,298/- 23.02.17 65 1,69,559/-
dated to months
27.12.16 25.01.23
6. 159 23.02.17 4,07,093/- 23.02.17 65 1,76,403/-
dated to months
27.12.16 25.01.23
7. 234 Upto 31st 4,82,535/- 28.01.21 17 57,329/-
dated March, to months
09.03.19 2024 25.01.23 25
payment days
not
received
2.9 Therefore, it is stated that the defendant/MCD is
liable to pay ₹12,34,701/- for the above-mentioned
period.
2.10 It is stated that the plaintiff got served legal notice
dated 16.05.2024 by Speed Post and in spite of
receipt of such notice, the defendant did not make
any payment.
2.11 In terms of S. 12A of the Commercial Courts Act,
2015, the plaintiff moved an application for
pre-institution mediation on 05.06.2024 before
Delhi State Legal Service Authority [DSLSA],
CS (COMM)/1169/2024 Page 5 of 35
Central, THC, Delhi, but to no avail and thus,
Non-Starter Report dated 07.09.2024 was issued by
said DSLSA.
2.12 Under these facts and circumstances of the case, the
present suit came to be filed for recovery of
₹12,34,701/-.
3. On being served with the summons of the suit, the
defendant put its appearance through counsel and also filed
written statement contesting the suit.
4. In written statement, the defendant has taken certain
preliminary objections, inter-alia stating therein that:-
4.1 The suit is barred by limitation, as the
plaintiff/contractor has calculated the interest on the
Work Orders executed between the year 2014 to
2019, which is the subject matter of the present suit
and the present suit is filed in the month of October,
2024 only and hence, the present suit is liable to be
rejected on this ground alone.
4.2 The plaintiff/contractor is relying upon the order
dated 26.04.2023 passed by Division Bench of
Hon’ble High Court of Delhi in order to claim
interest on delayed payment after passing of the
bills, to establish cause of action in his favour, but
the said Judgment/Order clearly specifies that the
Hon’ble High Court has not made any observation
regarding the claim of interest or the period from the
which the interest is payable to the contractors.
CS (COMM)/1169/2024 Page 6 of 35
4.3 It is further stated that the defendant had released
the payments into the account of the plaintiff before
filing of the present suit and the said fact was within
the knowledge of the plaintiff and hence, no
liabilities were pending on the part of the defendant.
Details of payment released to the plaintiff by the
defendant are given in Para no.5 of the written
statement.
4.4 Thus, it is stated that the plaintiff/contractor is not
eligible for any relief from this Court and no cause
of action arose in favour of plaintiff and against the
defendant to file the present suit.
4.5 Further, while referring to Clause 9 of GCC, it is
stated that the aforesaid work orders and said GCC
make it fundamentally clear that payment of bills
shall be made strictly on Queue basis i.e. first the
past liabilities will be cleared and after that, the
release of payment for passed bill, will be in order
of the demand received at HQ under particular head
of account, as also no interest shall be payable to the
contractor in case of delay in payment on account of
non-availability of funds in the particular head of
accounts of MCD.
4.6 Further, it is stated that the plaintiff has not
submitted the relevant documents, which are sine
qua non for release of payment.
5. Similarly, by way of ‘reply on merits’, the defendant has
controverted and denied the averments made in
CS (COMM)/1169/2024 Page 7 of 35
corresponding paras of the plaint and has prayed for
dismissal of the suit.
6. The plaintiff filed replication, thereby controverting and
denying the averments made in the written statement,
while reaffirming the averments made in the plaint.
ISSUES:
7. From pleadings of the parties, the following issues were
framed, vide order dated 29-04-2025, passed by
Ld. Predecessor of this Court:-
i. Whether the suit is barred by limitation?
OPD
ii. Whether the plaintiff has submitted the bill?
OPP.
iii. Whether the defendants are not liable to pay
interest due to non-submission of bill by the
plaintiff? OPDiv. Whether the plaintiff is entitled for suit
amount? OPP.
v. Whether the plaintiff is entitled for pendent-
lite and future interest? If so, at what rate?
OPP
vi. Relief.
EVIDENCE LED BY THE PARTIES:
8. It may be noted here that in support of his case, the
plaintiff has examined himself as PW1 and closed hisCS (COMM)/1169/2024 Page 8 of 35
evidence on 01-07-2025. Likewise, the defendant has also
examined only one witness namely Sh. Atul Kumar,
Assistant Engineer as DW1, towards DE and closed
evidence on 14-07-2025.
Plaintiff’s Evidence
9. Plaintiff /PW1 led his chief examination by way of
affidavit (Ex.PW1/1) and deposed on the lines of
averments made in the plaint. He has also relied
upon/proved the following documents:-
Srl. Document/Particulars Exhibit(s)
No.
1. Copy of Registration Certificate Ex.PW-1/1
2. Copy of Work Order No.218 Ex.PW-1/2A
dated 28.11.2014
3. Copy of Work Order No.217 Ex.PW-1/2B
dated 28.11.2014
4. Copy of Work Order No.439 Ex.PW-1/2C
dated 09.01.2015
5. Copy of Work Order No.141 Ex.PW-1/2D
dated 07.11.2016
6. Copy of Work Order No.142 Ex.PW-1/2E
dated 07.11.2016
7. Copy of Work Order No.159 Ex.PW-1/2F
dated 27.11.2016CS (COMM)/1169/2024 Page 9 of 35
Srl. Document/Particulars Exhibit(s)
No.
8. Copy of Work Order No.234 Ex.PW-1/2G
dated 09.03.2019
9. Vouchers qua work order nos. Ex.PW1/3A
142, 141, 439, 159, & 234 to Ex.PW1/3E
10. Legal Notice dtd. 16.05.2024, Ex.PW1/4 to
postal receipt, tracking report, Ex.PW1/7
courier receipt
11. Certified Copy of judgment dated Ex.PW1/8
25.1.2023 in WP(C) 116/2021
12. Certified Copy of judgment dtd. Ex.PW1/9
26.04.2023 in LPA 253/2023
10. It may be noted that certified copy of writ petition bearing
W. P. (C) 14989/2021 has been mentioned in affidavit in
evidence [Ex.PW1/A] and referred to same, as Ex.PW1/10.
However, since no such document was filed on record,
same was de-exhibited, while recording
examination-in-chief of PW1, by Ld. Predecessor of this
Court.
11. PW1 has been cross-examined at length by the defendant.
However, the same is not being mentioned herein and shall
be considered in subsequent paras of this judgment, while
rendering findings on the issues.
CS (COMM)/1169/2024 Page 10 of 35
Defendant’s Evidence
12. DW1 namely Sh. Atul Kumar, AE, also led his
examination in chief by way of affidavit (Ex.DW1/A) and
deposed on the lines of averments made in the written
statement. He has also been cross-examined at
length by the plaintiff. However, the same is not being
mentioned herein and shall be considered in subsequent
paras of this judgment, while rendering findings on the
issues.
13. I have heard Sh. Pankaj Roy Kotra, Advocate on behalf of
the plaintiff and Sh. Atul Tanwar, Advocate on behalf of
the defendant. I have also gone through the material
available on record, including the pleadings of the parties,
evidence, oral as well as documentary, led by both the
sides, as available on record. I have also duly considered
the submissions made on behalf of the parties.
14. My issue-wise findings are as under:-
ISSUE NO.1
15. Firstly, I shall take up the issue no.1, which is reproduced
hereunder:-
Issue no. (i) -Whether the suit is barred by
limitation? OPD
16. The initial burden of proving this issue was placed upon
the defendant in view of preliminary objection no.3 raised
in written statement to the effect that since plaintiff is
seeking interest in respect of work orders executed
CS (COMM)/1169/2024 Page 11 of 35
between 2014 to 2019, but has filed the present suit only in
the month of October, 2024, the present suit is barred
by limitation.
17. DW1 Sh. Atul Kumar has deposed on identical lines of the
plaint during his chief-examination by way of affidavit in
evidence (Ex.DW1/A).In Para no.5 thereof, he stated about
the relevant details of all the 7 work orders in question,
including the date of passing of bills, as also the dates of
part payments of the principal amount to the plaintiff.
During his cross-examination, he admitted that MCD had
not released any payment against the final bills in respect
of work orders in question, to the plaintiff till filing of Writ
Petition by plaintiff before Hon’ble Delhi High Court.
18. On the other hand, PW1 i.e. the plaintiff himself has
deposed during his chief examination by way of affidavit
in evidence (Ex.PW1/A) that since no payments
were forthcoming against the work orders in question from
the defendant, he filed writ petition bearing W.P.
(C) No.14989/2021 titled as ‘M/s. Aggarwal Associates
Vs. M.C.D.’ before Hon’ble High Court of Delhi, wherein,
the defendant was directed to make the payments within 8
weeks from the date of passing of Judgment,
while granting liberty to the plaintiff to pursue appropriate
remedy for grant of interest on delayed payment in
accordance with law, vide order dated 25-01-2023.
He further deposed that the defendant filed L.P.A.
No. 253/2023 against the said order passed by
Ld. Single Judge and vide order dated 26.04.2023,
Division Bench of Hon’ble Delhi High Court granted one
CS (COMM)/1169/2024 Page 12 of 35
year time to the defendant for making payment of principal
amount qua the work orders in question, along with
interest @ 12% p.a. from the date of order passed by Ld.
Single Judge i.e. 25-01-2023. He has also furnished
calculations qua each work order in question in Para no. 8
of Ex.PW1/A.
19. During his cross-examination he admitted that work orders
in question were awarded during the period ranging from
year 2014 till the year 2019. He, however, denied the
suggestion that suit is barred by limitation since it was
filed in the year 2024. However, he voluntarily stated that
part payments were being made by defendant from time to
time and lastly was made in the year 2023. He also denied
the suggestion that apart from last work order no. 234
dated 28-01-2021, he is not entitled to recover any interest
from defendant/ MCD qua the remaining work orders in
question, as the said remaining work orders are barred by
limitation.
Defendant’s arguments
20. After referring to the pleadings of the parties and
evidences, both oral and documentary, led during the trial,
Ld. Counsel of defendant vehemently argued that even as
per details of work orders in question furnished by plaintiff
in the plaint, work order nos. 218 and 217 are of the year
2014, work order no. 439 is of the year 2015 and work
order nos. 141, 142 and 159 are of the year 2016. He
contended that it is a matter of record that the present suit
has been filed by the plaintiff in the month of October,
CS (COMM)/1169/2024 Page 13 of 35
2024 and thus, claim of plaintiff for grant of interest in
respect of said 6 work orders in question is hopelessly
barred by limitation.
Plaintiff’s arguments
21. Per contra, Ld. Counsel of plaintiff vehemently argued that
claim of plaintiff qua work order nos. 217 dated
28-11-2014, 141 dated 07-11-2016, 142 dated 07-11-2016,
159 dated 27-12-2016 and 234 dated 09-03-2019 are
within the period of limitation. He, however, fairly
conceded that claim of the plaintiff on account of interest
qua work order nos. 218 dated 28-11-2014 and 439 dated
09-01-2015, is barred by limitation. In this regard, the
plaintiff has also filed his own affidavit along with
Annexure-1 and 2, disclosing therein details of said work
orders including contractual amounts thereof; the
respective dates of passed bills; and period to be excluded
as per GCC.
22. Ld. Counsel for plaintiff further contended that in view of
judgment of Hon’ble Apex Court in Suo Motu Writ
Petition (Civil) No. 03/2020, the relevant period from
15-03-2020 till 28-02-2022 is to be excluded while
computing the period of limitation. He further
contended that relevant period during which the
plaintiff had exhausted remedy of pre-institution
mediation, is also required to be excluded in terms of
S. 12 A of the Commercial Courts Act, 2015. Besides,
he also contended that period during which the plaintiff
had invoked the writ jurisdiction of Hon’ble Delhi
CS (COMM)/1169/2024 Page 14 of 35
High Court and time taken from the date of filing of
said writ petition till the date of its disposal, is also
required to be excluded while granting benefit of S. 14
of the Limitation Act, to the plaintiff. In this regard,
the plaintiff has also filed his own affidavit stating
therein that the writ petition bearing WP(C)
14989/2021 (supra) was filed on 22-12-2021 and same
was decided on 25-01-2023, and internet copy of
relevant details thereof as downloaded from the
website of Hon’ble Delhi High Court is also filed
therewith as Annexure-A. He, therefore, urged that the
defendant has failed to prove this issue and thus, it may
be decided against the defendant and in favour of the
plaintiff.
23. In support of his aforesaid submissions, Ld. Counsel of
plaintiff has also relied upon the following judgments:-
23.1 ‘Azam Jung v. Mohd. Abdul Razzack’, reported
as 1957 Hyderabad 4 (AIR V 44 C 2 Jan.);
23.2 ‘State of West Bengal v. Satyanarayan Rice Mill ‘
reported as AIR 1985 Calcutta 391; and23.3 ‘Kamta Prasad Singh v. Ram Narayan Lall ‘
reported as MANU/BH/0048/1957Analysis & Findings
24. Since, the plaintiff has fairly conceded that his claim on
account of interest qua work order nos. 218 and 439, is
barred by limitation, therefore, his claim regardingCS (COMM)/1169/2024 Page 15 of 35
payment of interest against said work orders is hereby
declined, being barred by limitation.
25. As regards remaining 5 work orders in question, it would
be apposite to refer to Clause 9 of General Condition of
Contract (GCC), which is applicable at the time of
awarding of contract and deals with final bill. Same is
reproduced here as under:-
CLAUSE 9
Payment of Final Bill :
The final bill shall be submitted by the contractor in the same
manner as specified in interim bills within three months of
physical completion of the work or within one month of the date
of the final certificate of completion furnished by the
Engineer-in-Charge whichever is earlier. No further claims shall
be made by the contractor after submission of the final bill and
these shall be deemed to have been waived and extinguished.
Payment of those items of the bill in respect of which there is no
dispute and of items in dispute, for quantities and rates as
approved by Engineer-in-Charge, will, as far as possible be made
after the period specified hereinunder the period being reckoned
from the date of receipt of bill by the Engineer-in-Charge or his
authorised Asstt. Engineer, complete with account of materials
issued by the department and dismantled. The payment of passed
bills will depend on availability of funds in particular head of
account from time to time in MCD. Payment of bills shall be
made strictly on Queue basis i.e. first the past liabilities will be
cleared and after that the release of payment for passed bills will
be in order of the demand received at HQ under particular head of
account. No interest shall be payable to the contractor in case of
delay in payment on account of non-availability of fund in the
particular head of account of MCD.
(i) If the tendered value of work is upto Rs.5 lacs: 6 months
(ii) If the tendered value of work exceeds Rs.5 lacs: 9. months”
26. From perusal of clause 9 of GCC, it can be safely said that
the cause of action to recover the amounts against the
said work orders would arose only after expiry of
six/nine months as the case may be, in terms of Clause
CS (COMM)/1169/2024 Page 16 of 35
9 of General Conditions of Contract (GCC) after the
passing of final bills by the defendant / MCD.
27. Further, Hon’ble Apex Court in the case titled as Suo
Motu [supra] has directed for grant of extension of the
period of limitation from time to time on account of
Covid-19 pandemic, and vide latest order dated
10-1-2022, inter alia, directed that period from
15-3-2020 till 28-2-2022 shall stand excluded for the
purposes of limitation and where the limitation would
have expired during the period between 15-3-2020 till
28-2-2022, notwithstanding the actual balance period
of limitation remaining, all persons shall have a
limitation period of 90 days from 01-3-2022 and in the
event, the actual balance period of limitation
remaining, with effect from 01-3-2022 is greater than
90 days, then such longer period shall apply. It is
apposite here to reproduce relevant Para of the said
judgment, which reads as under:-
“xxx
I. The order dated 23.03.2020 is restored and in
continuation of the subsequent orders dated
08.03.2021, 27.04.2021 and 23.09.2021, it is
directed that the period from 15.03.2020 till
28.02.2022 shall stand excluded for the purposes of
limitation as may be prescribed under any general
or special laws in respect of all judicial or quasi –
judicial proceedings.
II. Consequently, the balance period of limitation
remaining as on 03.10.2021, if any, shall become
available with effect from 01.03.2022.
III. In cases where the limitation would have
expired during the period between 15.03.2020 till
28.02.2022, notwithstanding the actual balance
period of limitation remaining, all persons shall
have a limitation period of 90 days from
CS (COMM)/1169/2024 Page 17 of 35
01.03.2022. In the event the actual balance period of
limitation remaining, with effect from 01.03.2022 is
greater than 90 days,that longer period shall apply.
IV. It is further clarified that the period from
15.03.2020 till 28.02.2022 shall also stand excluded
in computing the periods prescribed under Sections
23 (4) and 29A of the Arbitration and Conciliation
Act, 1996, Section 12A of the Commercial Courts
Act, 2015 and provisos (b) and (c) of Section 138 of
the Negotiable Instruments Act, 1881 and any other
laws, which prescribe period(s) of limitation for
instituting proceedings, outer limits (within which
the court or tribunal can condone delay) and
termination of proceedings.
xxx”
28. Thus, the period from 15-03-2020 till 28-02-2022 is to be
excluded while computing the period of limitation qua
these work orders in question.
29. Further, the plaintiff herein had also exhausted remedy of
pre-institution mediation in terms of S. 12A of the
Commercial Courts Act, 2015. In this regard, Ld. Counsel
of plaintiff drew attention of this Court towards
Non-Starter Report dated 07-09-2024, filed along with
plaint. A bare perusal thereof would show that the
pre-institution mediation petition was filed by plaintiff on
05-06-2024 and Non-Starter Report was issued on account
of failure of pre-institution mediation on 07-09-2024.
Hence, the relevant period from 05-06-2024 till
07-09-2024, is also required to be excluded in view of S.
12A of the Commercial Courts Act, 2015.
30. Now the question which arises for consideration before
this Court is as to whether or not the time period consumed
in invoking writ jurisdiction of Hon’ble Delhi High Court
CS (COMM)/1169/2024 Page 18 of 35
by filing writ petition bearing WP(C) 14989/2021
(supra), is also liable to be excluded by virtue of S. 14
of Indian Limitation Act.
31. Hon’ble Calcutta High Court in the cited case of State
of West Bengal (supra), has held that proceedings
under Article 226 of the Constitution of India is civil
proceedings and as such, it cannot be said that S. 14
does not apply to said proceedings while excluding the
period spent in writ petition. Relevant portions of the
said judgment are extracted here as under:-
“xxxx
15. In Black’s Legal Dictionary, 5th Edition, the
word ‘civil’ has been stated to be derived from the
Latin word Civitus meaning concerning the private
rights of a citizen. It has also been stated therein that
civil rights relate to or refer to civil rights of a
citizen including the rights, which are administered
in equity courts, as distinct from rights administered
in criminal courts. It is pertinent to refer to the
decision in AIR 1966 SC 1445 (Ramesh v. Gendalal
Motilal Patni). It has been observed by
Hidayatullah, J. as his Lordship then was, that the
term ‘civil proceeding’ has been held to include, at
least, all proceedings affecting civil rights, which
are not criminal. The dichotomy between civil and
criminal proceedings made by the Civil Law Jurists
is apparently followed in Arts. 133 and 134 and any
proceeding affecting civil, i.e., any private right,
which is not criminal in nature, is civil…..A
proceeding under Art. 226 for a Writ to bring up a
proceeding for consideration must be a civil
proceeding, if the original proceeding concerned
civil rights.” In AIR 1962 Ker 1 (FB) similar view
has been expressed and that if a right to property or
any other civil right is involved in a proceeding,
then the proceeding is a civil proceeding, on matter
the jurisdiction of the Court invoked is special or
extraordinary. It also does not matter whether the
proceeding under Art. 226 of the Constitution has
ended in dismissal.
16. Similar view has been expressed in AIR 1963
Cal. 364 that if a proceeding is in aid of establishing
CS (COMM)/1169/2024 Page 19 of 35
a civil right or for disputing one, it would be a civil
proceeding.
17. Therefore, on a consideration of the above
decisions there is no room for doubt that a
proceeding under Art. 226 of the Constitution
ascertaining the vires of para 4 of the West Bengal
Rice Levy Order, 1967 is a civil proceeding and as
such, the argument that has been advanced on
behalf of the appellant that it is not a civil
proceeding is not sustainable and S. 14(1) of the
Lim. Act applies. The plaintiff, as has been rightly
held by the court below, is entitled to get exclusion
of the time during which the proceeding under Art.
226 of the Constitution was actually proceeded with
in this Hon’ble Court. That proceeding undoubtedly
was initiated sometime in June, 1967 and it was
finally terminated on May 5, 1972 by B. C. Mitra, J.
The plaintiff is entitled to get exclusion of this
period during which the said proceedings continued.
xxxx”
32. In the cited case of Kamta Prasad ( supra), Hon’ble High
Court of Patna has held as under:-
“xxxx
19. Statues of limitation are statutes of repose. There
was a serious risk, of injustice arising if the period of
limitation should be strictly applied. Hence,the
necessity for some provisions to protect a bona fide
plaintiff from the consequences of some mistake which
had been made by his advisers in prosecuting his claim.
With this object in view, some provisions, like Section
14, were formulated, and provided in the Limitation
Act. Section 14 is to protect a former infructuous, but
bona fide litigation.
20. The principle underlying Section 14 of the
Limitation Act is that the bar of limitation should not
affect a person honestly doing his best to get his case
tried on merits, but failing through the Court being
unable to give him such a trial. The principle is clearly
applicable not only to cases in which a man brings his
suit in the Court, that is, a Court having no jurisdiction
to entertain it, but also where he brings the suit in the
wrong Court in consequence of a bona fide mistake of
law, or defect of procedure. A litigant should not be
deprived of his rights by reason of the applicability of
the law of limitation, when he is diligently and bona
fide proceeding to obtain the redress in the higher Court
also.
xxxx”
CS (COMM)/1169/2024 Page 20 of 35
33. Recently, Hon’ble Apex Court in the case of ‘M/s Laxmi
Srinivasa R & P Boiled Rice Mill v. The State of Andhra
Pradesh & Anr.‘ reported as 2022 LiveLaw (SC) 964, has
held as under:-
“xxxx
It is an accepted position that the appellant had
filed a writ petition before the High Court on 24.02.2018,
which was not entertained vide the order dated 07.03.2018
on the ground that the appellant should approach the
Appellate Authority. The appellant is entitled to ask for
exclusion of the said period in terms of Section 14 of the
Limitation Act, 1963. Exclusion of time is different, and
cannot be equated with condonation of delay. The period
once excluded, cannot be counted for the purpose of
computing the period for which delay can be condoned. Of
course, for exclusion of time under Section 14 of the
Limitation Act, 1963, the conditions stipulated in Section
14 have to be satisfied.
In the facts of the present case, we find that the
period from the date of filing of the writ petition on
24.02.2018 and the date on which it was dismissed as not
entertained viz. 07.03.2018, should have been excluded.
The writ proceedings were maintainable, but not
entertained. Bona fides of the appellant in filing the writ
petition are not challenged.
xxxx”
34. Now reverting back to the facts of the present case. It is an
admitted position on record that the plaintiff had also
sought relief of grant of interest for the delayed payment,
apart from payment of principal amount against the
defendant/ MCD in respect of all these work orders in
question, by way of writ petition bearing W.P. (C)
No.14989/2021. It is also a matter of record that Single
Bench of Hon’ble Delhi High Court, vide order dated
25-01-2023, had been pleased to allow the said writ
petition, thereby directing the MCD to release payments
due towards principal amount to the plaintiff within a
period of 8 weeks from the date of passing of said order,
CS (COMM)/1169/2024 Page 21 of 35
while granting liberty to the plaintiff to pursue his remedy
qua interest on delayed payment by initiating appropriate
proceedings in accordance with law. Indisputably, on an
appeal in the form of LPA No.253/2023 preferred by MCD
before Division Bench of Hon’ble Delhi High Court, order
of Hon’ble Single Judge was modified with consent of
both the parties only to the extent that MCD shall pay the
principal amount to the plaintiff in terms of the order
passed by Single Judge within one year along with interest
@ 12% per annum w.e.f. 25-01-2023. Further, Hon’ble
Division Bench expressly directed that the order of Ld.
Single Judge relegating the writ petitioner to pursue his
remedy by initiating appropriate proceedings in so far as
the interest is concerned, is not being interfered with.
Relevant portion of the said order, is extracted here as
under:-
“xxxx
4…… The order of the learned Single Judge relegating the
writ petitioners to pursue their remedy by initiating
appropriate proceedings in so far as the interest is
concerned is not being interfered with…
xxxx”
35. It is an undeniable fact that the plaintiff had initially
invoked the writ jurisdiction of Hon’ble Delhi High Court
seeking redressal of his grievance regarding non- payment
of principal amount, as also interest for the delayed period
by MCD. It is also an admitted position that MCD released
payment of the principal amount along with interest @
12% per annum from 25-01-2023 only in pursuance to the
directions issued by Division Bench of Hon’ble Delhi
High Court and not before that. Under these facts and
CS (COMM)/1169/2024 Page 22 of 35
circumstances and while applying the ratio of law laid
down by various High Courts and by Hon’ble Apex Court
in above referred decision, this Court is entirely in
agreement with the submission made on behalf of plaintiff
that the time period taken for pursuing the said writ
petition before Hon’ble Delhi High Court i.e. from
22-12-2021 till the date of order i.e. 25-01-2023 is
required to be excluded while computing the period of
limitation.
36. It is an admitted position on record that all the relevant
documents filed by plaintiff along with plaint are not
denied by the defendant/ MCD through their admission/
denial affidavit as is available on record. Apart from this,
there is also no dispute between the parties as regards the
details of remaining 5 work orders in question, their
contractual amount, their respective dates of completion of
work, and dates of passing of final bills against them. In
order to have better appreciation of facts and for ready
reference, the relevant details may be summarized in the
following tabulated form:-
Sr. Work Gross Date of Period to Period to be
No. Order Amount Passing be excluded due to
No. (net amount of Bill excluded Covid-19 in
+ Security) as per view of Suo
₹ GOC Moto judgment1 217 6,19,426/- 31.08.16 9 months 23 ½ months
2 141 3,63,539/- 23.02.17 6 months 23 ½ months
3 142 3,91,298/- 23.02.17 6 months 23 ½ months
4 159 4,07,093/- 23.02.17 6 months 23 ½ months
5 234 4,82,535/- 28.01.21 6 months 23 ½ monthsCS (COMM)/1169/2024 Page 23 of 35
37. Thus, while computing the period of limitation from
respective dates on which cause of action arose to the
plaintiff for filing the present suit qua each work order in
question (supra), after excluding the period from
15-03-2020 till 28-02-2022 in terms of Suo- Motu decision
of Hon’ble Apex Court, as also the period from
22-12-2021 till 25-01-2023 by virtue of S. 14 of
Limitation Act, and the period from 05-06-2024 till
07-09-2024 exhausted during pre-institution mediation in
terms of S. 12 A of the Commercial Courts Act, 2015, it is
held that the claim of plaintiff on account of interest
qua remaining five work orders is well within the
prescribed period of limitation as the suit has been e-filed
on 22-10-2024.
38. Accordingly, the issue no.1 stands decided in these terms.
ISSUE NOS. 2, 3 & 4
39. Now, I shall take up issue nos.2, 3 and 4. All these three
issues are being decided together as they are
interconnected. Said issues are reproduced hereunder:-
Issue no. (ii) -Whether the plaintiff has submitted
the bill? OPP.
AND
Issue no. (iii) -Whether the defendants are not liable
to pay interest due to non-submission of bill by the
plaintiff? OPDAND
CS (COMM)/1169/2024 Page 24 of 35
Issue no. (iv) -Whether the plaintiff is entitled for
suit amount? OPP.
40. Before proceeding further, it may be noted that the
defendant had raised defence by way of preliminary
submissions and preliminary objection no. 7 of the written
statement that the plaintiff had not submitted the relevant
documents, which are sine qua non for release of payments
and thus, there is no question of making any payments and
interest thereupon. In this backdrop, the issue nos.2 and 3
were framed by Ld. Predecessor of this Court. While the
initial burden to prove issue nos. 2 and 4 was placed upon
the plaintiff, the initial burden to prove issue no.3 was
placed upon the defendant.
41. PW1 has categorically deposed during chief examination
by way of affidavit in evidence (Ex.PW1/A) that he had
completed all the work orders in question to the entire
satisfaction of the officials of defendant/MCD and the final
bills were also passed by them. He further deposed that
officials of defendant/ MCD had carried out measurement
of works done by him and subsequent thereto, first RA Bill
pertaining to measurement for work orders in question,
were recorded in the Measurement Book and bills as
detailed in Para no. 4 of the said affidavit in evidence were
passed by officials of MCD/defendant, as also part
payments were also made by them. Further, he deposed
that writ petition bearing WP(C) 14989/2021 (supra)
was filed by him before Hon’ble Delhi High Court and
consequent upon the directions issued by Hon’ble
Single Judge and also by Hon’ble Division Bench of
CS (COMM)/1169/2024 Page 25 of 35
Delhi High Court passed in LPA No. 253/2023 ( supra),
the defendant released the payments qua work orders
in question. He also proved not only the work orders in
question, relevant vouchers thereof, but has also
proved legal notice dated 16-05-2024 along with postal
receipt, courier receipt and tracking reports thereof, as
well as certified copy of judgment passed by Single
Bench of Hon’ble DHC in WP (C) No. 116/2021 dated
25-01-2023 and certified copy of judgment dated
26-04-2023 passed by Division Bench of Hon’ble
Delhi High Court in LPA No. 253/2023.
42. PW1 has successfully withstood the test of
cross-examination conducted on behalf of defendant/
MCD. Pertinently, no question is shown to have been
put on behalf of defendant during his
cross-examination with respect to issue nos. 2 and 3. In
other words, the defendant has not even put any
suggestion falling in line with the plea raised by way of
preliminary submissions and objection no. 7 of the
written statement, during cross-examination of PW1.
On the other hand, the entire testimony of DW1 by
way of affidavit in evidence (Ex.DW1/A) is found to
be completely silent on this aspect. DW1 has simply
testified that release of payments of passed bills was
dependent upon availability of funds under particular
heads of account from time to time in defendant /
MCD and payment of release were made strictly on
queue basis and thus, no interest thereupon was
payable to the contractor in case of delay on account of
CS (COMM)/1169/2024 Page 26 of 35
non-availability of funds in view of Clause 9 of GCC/
Contract Agreement. During his cross-examination,
DW1 categorically admitted that the Competent
Authority of MCD had passed the final bill submitted
by plaintiff against work order No.159 dated
27.12.2016 and also that Competent Authority of MCD
had also passed the final bills submitted by plaintiff
against the aforesaid remaining work orders. He stated
that it is a matter of record that MCD had not released
any payment against the final bills in respect of
aforesaid work orders, to the plaintiff till filing of the
Writ Petition by him before Hon’ble Delhi High Court.
43. In the light of aforesaid discussion, this Court finds
considerable force in the submissions made on behalf
of plaintiff that the defendant has failed to bring on
record any document showing that there was any
breach of relevant terms and conditions of the contract
executed between the parties qua the work orders in
question, which would disentitle the plaintiff to claim
any interest. There is nothing on record to suggest that
the plaintiff had not submitted final bills as was alleged
in the written statement. Rather, materials brought on
record would show that Competent Authority of MCD
had already passed the final bills qua work orders in
question, as admitted by DW1 during his
cross-examination. Not only this, it is also an
undisputed fact that MCD did not release payments
qua the work orders in question till filing of writ
petition by plaintiff against MCD before
CS (COMM)/1169/2024 Page 27 of 35
Hon’ble Delhi High Court and consequent directions
issued therein.
44. Even otherwise, the plea raised by defendant that MCD
is not liable to pay any interest due to non-submission
of final bills by the plaintiff deserves to be rejected for
the simple reason that Division Bench of Hon’ble
Delhi High Court has already directed the defendant /
MCD to release balance payment qua all the work
orders in question to the plaintiff, and that too along
with interest @ 12 % per annum from the date of order
i.e. 25-1-2023, passed by Single Judge, Hon’ble Delhi
High Court and said direction has already been
complied with by MCD. Issuance of directions
regarding release of payment qua the work orders in
question and for making payment of interest for
delayed payment by DB of Hon’ble High Court,
demolishes the stand taken by the defendant regarding
denial of its liability to pay interest amount to the
plaintiff. For all these reasons, the Court is of the
considered opinion that the defendant has failed to
discharge the burden to prove issue no.3, whereas,
plaintiff has been successful in discharging the burden
of proving other two issues.
45. No doubt, there is an express stipulation in the form of
Clause 9 of GCC to the effect that defendant/MCD is not
liable to pay interest in case of delay in payment(s) on
account of non-availability of funds in particular heads of
account of MCD, however, the core issue is whether such
a stipulation is enforceable under the law. This issue
CS (COMM)/1169/2024 Page 28 of 35
directly came before Hon’ble Delhi High Court in the case
titled as ‘North Delhi Municipal Corporation V. Sanjeev
Kumar‘, bearing RFA 430/2017 decided on 22-03-2018. In
the said case, similar stipulation in the form of Clause
No.9 GCC was subject matter for consideration before
Hon’ble Delhi High Court and similar arguments were
advanced on behalf of appellant/MCD. After considering
the said clause and the arguments advanced on behalf of
both the sides, Hon’ble Delhi High Court has held as
under:-
“…It is therefore, necessary and important that all the steps of the
Contract are followed by the Contractors And the Corporations.
The following guidelines are being passed:
1. Along with the work order, all the Clauses of the General
Conditions of Contract should be attached;
2. On the award of the Work order, periodic inspections of the
work being carried out should be done by the
Engineer-in-Charge;
3. If possible, photographs of the works at different stages
should be taken and maintained on the record;
4. Interim bills should be submitted by the Contractor – duly
certifying the work, which has been carried out;
5. Final bills should be submitted by the Contractor -duly
certifying the work carried out along with photographs;
6. The Bill should be scrutinized by the Engineer-in-Charge,
works should be recorded in the measurement book and
thereafter, the bill should be passed;
7. Once the Bill is passed, the payment schedule of 6 months
and 9 months should be adhered to. Delay in payments
would result in Interest being levied;
8. For Refunds of Security deposit and Earnest Money deposit,
the Contractor should unscrupulously comply with the
conditions in Clauses 17 and 45. For refunds to be made,
payment of final bill need not be awaited. Once the
conditions of Clauses 17 and 45 are complied with and the
final bill is passed, refunds ought to be made;
9. In suits relating recovery of Contractor’s Dues, all the
evidence including the NIT. General Conditions of Contract,
periodic inspection reports, Final bill as submitted, Final bill
as passed, Measurements carried out, Photographs etc.,
should be produced and duly exhibited.
CS (COMM)/1169/2024 Page 29 of 35
10. It infrastructure ought to be created to maintain records of
the work orders, inspection reports, final bills, photographs
etc., digitally, as it is noticed that the trial court record does
not contain all the relevant documents and in several cases,
different versions of clauses are relied upon by both sides,
bills are not properly understandable and there is no
evidence of actual inspections on measurements having been
taken. Maintenance of digital records will make it more
transparent and easily accessible for the officials and for
production in the Court in case of future litigation.
Adherence to the above shall ensure that the works are duly
carried out as per the quality standards prescribed and there
is proper record of work being done. Once The work is
carried out payments ought not to be delayed, inasmuch as
delay in payments compromise on availability of quality
civil work for the Corporations, who take care of basic
amenities for citizens such as roads, pavements, civil works,
sewerage lines etc.”
46. In batch of matters including the case of ‘ EDMC Vs. Raj
Kumar Jain’, bearing RFA 397/2017 decided on
22-03-2018, similar issues were also raised, which were
discussed at length and after due consideration thereupon,
Hon’ble Delhi High Court came to the following
conclusion:-
” By applying the above said principles, in respect of final bills
raised by Contractors for works executed, that have been
approved by the Engineer-in-Charge, the Clauses have to be read
in the following manner:
(a) Reasonable time for making of payments of final bills in
respect of work orders up to Rs.5 lakhs shall be 6
months and work orders exceeding Rs.5 lakhs shall be 9
months from the date when the bill is passed by the
Engineer-in-Charge.
(b) The queue basis can be applicable for the payments to be
made in chronology. However, the outer limit of 6
months and 9 months cannot be exceeded, while
applying the queue system.
(c) The payments are held to become due and payable
immediately upon the expiry of 6 months and 9 months
and any non-payment would attract payment of interest
for the delayed periods.
(d) A conjoint reading of Clauses 7 & 9 along with the
amendment dated 19th May, 2006, clearly shows that for
the payment of bills, the contractors have to follow the
CS (COMM)/1169/2024 Page 30 of 35
queue basis and as and when the amount is available
under the particular head of account, the amount would
be payable. The amendment does not, however, have a
condition that no interest is payable for delayed
payment. Such a condition exists only in Clause 7.
Clause 9, therefore, when read with the amendment has
to mean that the Corporation itself considers 6 months
and 9 months to be the reasonable periods for which the
payments of the final bills can be held back. Obviously,
therefore, if payments are made, whether on a queue
basis or otherwise, beyond the period of 6 months and 9
months, interest is payable.
(e) To the extent that queue basis is applied only for
clearing of payments, which do not extend beyond the
period of 6 months and 9 months period, it is reasonable.
However, if the queue basis is applied in order to make
Contractors wait for indefinite periods for receiving
payments, then the same would be unreasonable and
would have to therefore be read down.
(f) The Security amount/Earnest money deposited would be
refundable upon the fulfilment of the conditions
contained in Clauses 17 and 45 of the General
Conditions of Contract. Interest would be payable on
delayed payments. ”
47. The facts of the present case are, thus, squarely covered by
the above-referred decisions of Hon’ble Delhi High Court.
Thus, applying the ratio of law laid down by Hon’ble
Delhi High Court in above referred decisions and in view
of discussion made hereinabove, this Court is of the
considered view that the plaintiff is entitled to recover
interest for the delayed period beyond the period of
six/nine months from the date of passing of final bills in
question. The plaintiff is shown to have claimed pre-suit
interest @ 12% per annum on the principal amount for the
period from 31-05-2017 till 25-01-2023 qua work order
no.217; from 23-08-2017 till 23-01-2023 qua work order
nos. 141, 142 and 159, and from 28-7-2021 till 25-01-2023
qua work order no. 234.
CS (COMM)/1169/2024 Page 31 of 35
48. As per the guideline No.7, as laid down in the case of
Sanjeev Kumar (supra) and the decision of Hon’ble High
Court in the case of Raj Kumar Jain (supra), once the Bills
are passed, the payment schedule of 6/9 months, as the
case may be, should be adhered to and delay in payments
would result in interest being levied. In the present case,
there is no denial of the fact that payments have been
delayed beyond the aforesaid period. Accordingly, it is
held that the plaintiff is entitled to pre-suit interest.
49. Now, the question, which arises for consideration
before this Court is as to whether the plaintiff
is entitled for entire suit amount.
While giving findings on issue no.1 hereinbefore, it
has already been noted that the plaintiff has conceded
at the stage of final arguments that his claim for
payment of interest qua work order nos. 218 and 439,
is barred by limitation, and consequently, the claim
of the plaintiff to that extent is held to be barred by
limitation by the Court. Hence, the plaintiff is held
entitled only to the extent of his claim for payment of
interest for delayed period qua work order nos. 217,
141, 142, 159 and 234.
50. In view for aforesaid discussion, this Court is of the
considered opinion that the plaintiff is entitled to
claim pre-suit interest for the period from 31-05-2017
till 25-01-2023 qua work order no.217; from
23-08-2017 till 23-01-2023 qua work order nos. 141, 142
and 159; and from 28-7-2021 till 25-01-2023 qua work
order no. 234.
CS (COMM)/1169/2024 Page 32 of 35
51. This brings me down to the next question as to the rate of
interest to be awarded in favour of the plaintiff. The
plaintiff has claimed the interest @ 12% per annum, but as
already mentioned above, nothing has been brought on
record by the plaintiff indicating that there was any
agreement between the parties that he shall be entitled for
interest @ 12% per annum in case the payment is delayed
by the defendant.
52. Section 34 CPC clearly provides that where the liability in
relation to the sum so adjudged had arisen out of
commercial transaction, the rate of such further interest
may exceed 6% per annum but shall not exceed the
contractual rate of interest, or where, there is no
contractual rate, the rate at which moneys are lent or
advanced by nationalized banks in relation to the
commercial transactions.
53. In view of overall facts and circumstances of the case and
keeping in view nature of transactions between the parties,
the claim of plaintiff to award interest @ 12% per annum,
from due date till the date of actual payment, in the
opinion of this Court, is excessive and on higher side.
Interest of justice would be met by awarding such interest
to the plaintiff @ 9% per annum for the above said period.
It is so ordered accordingly.
54. Accordingly, the issue nos. 2, 3 and 4 stand decided in
these terms.
ISSUE NO.5
CS (COMM)/1169/2024 Page 33 of 35
55. Now, I shall take up the issue no. (v), which is reproduced
hereunder:-
Issue no. (v) -Whether the plaintiff is entitled for
pendent – lite and future interest? If so, at what rate?
OPP
56. Since, the defendant has withheld the legitimate dues of
the plaintiff and contested the suit, this Court is of the
opinion that the plaintiff is also entitled to pendent-lite and
future interest. As regards the rate of interest, in view of
findings giving on issue nos. 4, pendent-lite and future
interest @ 9% per annum from the date of filing of the suit
till the date of realization is also awarded in favour of the
plaintiff.
57. The plaintiff has also claimed the cost of the suit. Keeping
in view the provisions contained in Sections 35 and 35A
CPC, it has been established that the defendant failed to
pay the outstanding dues not only despite service of legal
notice, but also, despite service of summons of the suit
upon it. Therefore, the said defendant is responsible for the
cost of the litigation to the extent of court fee and lawyers
fee etc. as per the relevant rules. In my view, the plaintiff
is accordingly held entitled for the cost of litigation against
the defendant/MCD.
58. The issue no. 5 stands decided in the aforesaid terms.
RELIEF:
59. In the light of the aforesaid discussion, Court
is of the view that the plaintiff has been able to prove
CS (COMM)/1169/2024 Page 34 of 35
his case on the basis of preponderance of probability.
The suit is decreed in favour of the plaintiff and
against the defendant/MCD and thus, the following reliefs
are granted:-
59.1 The plaintiff is entitled to pre-suit interest @ 9% per
annum on the principal amount for the period from
31-05-2017 till 25-01-2023 qua work order no.217;
from 23-08-2017 till 23-01-2023 qua work order nos.
141, 142 and 159, and from 28-7-2021 till 25-01-2023
qua work order no. 234; and
59.2 The plaintiff is also entitled to recover pendent-lite
and future interest @ 9% per annum on principal
amount qua work orders no.217, 141, 142, 159, and
234; from the date of filing of the suit till date of
realization of amount; and
59.3 Cost of the proceeding is also awarded in favour of
the plaintiff.
60. Decree sheet be prepared accordingly.
61. File be consigned to Record Room, after due compliance.
Digitally signed
Announced in the open Court VIDYA
by VIDYA
PRAKASH
On 31st Day of July,2025 PRAKASH Date:
2025.07.31
17:37:59 +0530
(VIDYA PRAKASH)
DISTRICT JUDGE (COMMERCIAL COURT)-01
CENTRAL DISTRICT/THC/DELHI
CS (COMM)/1169/2024 Page 35 of 35