#delay Archives - Prime Legal

7 Nov

Penalty Is Supposed To Be @ 1% Of The Cost Of Incomplete Work Per Week Of Delay Subject To Maximum Of 10 % Of The Total Cost Of Contract: High Court Of Delhi

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blog #arbitration, #Breach, #compensation, #contract, #delay, #Reward

Title: National Projects Constructions Corporation Ltd. (Npcc) V M/S Aac India Pvt. Ltd

Citation: Fao (Comm) 140/2021

Coram: Hon’ble Mr. Justice Yashwant Varma And Hon’ble Mr. Justice Dharmesh Sharma

Decided On: November 02, 2023

Introduction:

This Judgment shall decide the present appeal preferred by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 read with Section 13(1A) of the Commercial Courts Act, 2015 for setting aside the impugned judgment dated 12 March 2021 passed by learned Additional District Judge-03, South District, Saket Courts, New Delhi in ARBTN No.20824/2016, whereby the learned ADJ chose to partially set aside the award dated 29 August 2016 on the aspect of liquidated damages to be paid by the appellant to the respondent.

Facts:

The appellant, which is a Government Enterprise under the Ministry of Water Resources and also a company registered under the Companies Act, 1956 consequent to letter of intent dated 03 March 2017 entered into an agreement dated 13 March 2007 as Project Management Consultant of the Central Reserve Police Force with the respondent, which was a micro enterprise stated to be having a turnover of less than Rs. 10 Lacs, for installation of Fire Protection System for the Auditorium Block, CRPF Campus, Vasant Kunj, New Delhi. The project was stipulated to be completed within a period of 7 months from the date of issuance of LOI for total contract value of Rs. 90,79,200/-. However, performance got delayed.

appellant claimed that the respondent was in breach of its obligations under the contract and delayed its performance by taking about 33 months for completion of work, and therefore, in terms of clause 35.5 of the contract, LD was levied and adjusted against the payment payable to the respondent not only for the abnormal delay but also for causing damage to the reputation of the appellant for the delay caused; and accordingly payment for a sum of Rs. 1,13,97,341/- i.e., 10% of the work cost of the CRPF camp project was withheld. The respondent in terms of clause 52 of the ̳General Conditions‘ of the contract invoked arbitration.

The award was challenged by the respondent/claimant under Section 34 of the A&C Act and the learned ADJ vide the impugned judgment dated 12 March 2021 considered the proposition of law propounded in ONGC Ltd. v. Saw Pipes Ltd. And several other cases.

The impugned award is assailed in the present appeal before this Court inter alia on the grounds that the learned ADJ completely misconstrued the letter dated 09 October 2009 on the record and placed an erroneous construction on the provisions of the contract; and that despite concluding that there was delay on the part of the claimant/respondent in completing the project, contradicted itself by not allowing imposition of LD and rather modified the award, which course has no sanction in law.

Court’s Analysis and Judgement:

The court decided that liquidated damages and penalty were stipulated to be @ 1% of the cost of incomplete work per week of delay subject to maximum of 10 % of the total cost of contract value and it was stipulated that LD may be adjusted and set off against any sum payable to the Contractor/NPCC. It is also manifest that the contract stipulated payment by CRPF to the appellant alone. The appellant was enjoined upon to verify the bills towards the work done received from the sub-contractors. As an inevitable corollary, on imposition of LD, the appellant was well within its rights to withhold 10% of the contract value in such proportion from each of the sub-contractors including the claimant/respondent.

There are a catena of cases on the proposition that where damage or loss is difficult or impossible to prove, the Court is empowered to award liquidated amount stipulated in the contract, if it is a genuine pre-estimate of damage or loss, or reasonable compensation for the said amount loss or damage. So there was no ̳patent illegality‘ committed by the Arbitrator in passing the impugned award and the award could not have been modified by the learned ADJ in exercise of his powers under Section 34 of the A&C Act.

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Written by- Sushant Kumar Sharma

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17 Aug

Section 5 Limitation Act| Court Must Not Discriminate Against Government Agencies, Government Has Special Obligation To Perform Duties: High Court of Delhi

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Blog #delay, #delhi, #delhicourt, #delhihighcourt, #dismissed, #health, #healthdepartment

Title: Department of Health v. Kamla Mehndiratta and Ors.
Ordered on: 4th August, 2023

+ CM APPL. Nos. 20019/2019 and 20017/2019 in W.P.(C) 3613/2004 & CM APPL. 20068/2022 & CM APPL. 20069/2022

CORAM: HON’BLE MR. JUSTICE CHANDRA DHARI SINGH

Introduction

The Delhi High Court recently declined to condone an inordinate delay of 691 days in an application seeking restoration of a petition filed by a government agency. The Court emphasized that government agencies, despite facing bureaucratic delays, must provide valid reasons for such delays. The case raised questions about the admissibility of the application given the substantial delay and the requirement for sufficient cause to condone delay under Section 5 of the Limitation Act.

Facts

The petitioner, a government agency, sought restoration of a petition that had been dismissed in default by the Labour Court. The petition had challenged an order of the Labour Court concerning the appointment and promotion of the respondent, who was initially appointed on a temporary basis and later worked as a regular staff member. The petitioner filed the restoration application after a delay of 691 days.

Analysis and Held

Justice Chandra Dhari Singh, a Single Judge Bench, underscored the significance of providing sufficient cause to condone delay under Section 5 of the Limitation Act. While acknowledging that government agencies may encounter procedural delays, the Court emphasized that unexplained delays of such magnitude could set a precedent for more similar applications.

The Court acknowledged the petitioner’s argument, which cited frequent changes in panel advocates and the resulting delay in restoration application filing. However, the Court expressed dissatisfaction with the petitioner’s failure to act in a timely manner despite ample resources at its disposal.

Justice Singh highlighted the special obligation of government agencies to perform duties diligently and committedly. Condonation of delay should be an exception and not a convenience for government departments. The Court emphasized that the phrase “sufficient cause” is pivotal in seeking extension of the prescribed period, requiring the petitioner to justify the delay convincingly.

In light of these considerations, the Delhi High Court held that the petitioner failed to satisfy the court that there existed a sufficient cause justifying the delay of 691 days in filing the application seeking restoration. Consequently, the Court declined to condone the delay and upheld the dismissal of the application for restoration.

Written by- Ankit Kaushik

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8 Aug

The litigant should not suffer for want of necessary prayers for condonation of delay: Bombay HC

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Blog #bombayhighcourt, #delay, #sec.138NIAct

Title: Praveen Otarmal Parmar v. M/s. Abhiroop Associates and Mr. Uday Raghunath Manerikar

Decided on: 7^th AUGUST 2023

+ CRIMINAL APPEAL NO. 1045 OF 2006

CORAM: S. M. MODAK, J.

Facts of the Case:

The Court of 11th Jt. Judicial Magistrate First Class, Pune acquitted the respondent for the offence punishable under Section 138 of Negotiable Instruments Act vide judgment dated 23rd March, 2006 in Case No.298 of 2003. The complaint was not filed in time and hence respondent was acquitted. It was the complainant who has preferred this Appeal.

The appellant had first sent a notice on 31^st Mar, 2006 and received no response from the firm or the partner. Notice was sent again on 16^th April and 21^st April to the firm and the partner respectively. Finally, he filed a complaint on 5^th June. The trial court held that there was a delay of 4 days (time period calculated from 31 March) and therefore, the accused were acquitted.

Issues

a) When the complainant filed the complaint on the basis of notice posted on second occasion, whether it was proper for the trial court to dismiss the complaint as time barred?
b) Whether trial Court ought to have given an opportunity to the complainant to explain delay occurred?

Contentions

The appellant claimed that when the process was issued and when case has proceeded it was not proper for the trial Court to dismiss the complaint. It was obligatory on the trial Court either to condone delay on its own or ought to have given an opportunity to offer an explanation. They explained that the notices sent were not registered and were returned to him for being not claimed, which is why he sent fresh claims in the month of April. Thus, he explained this to be the right date from which the period of limitation should be calculated and also that the complaint was filed on the basis of second notice.

The Respondents supported the order and submitted that there is no duty cast upon the trial Court to condone the delay particularly when the complainant has not prayed for condonation of delay. The Respondents presented evidence that the notices were returned with the mark “intimation delivered.”

Decision

The Court held that since the prosecution under Negotiable Instruments Act is quasi-civil. The notices came back with the mark “unclaimed” and thus, the appellant needs to be given an opportunity to pray for condonation of delay. The Court added that the litigant should not suffer for want of necessary prayers for condonation of delay. Hence, the appeal was allowed.

Written by- Aparna Gupta, University Law College & Dept. of Studies in Law

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28 Jul

Delhi High Court dismissed the review petition on the grounds of inordinate delay with no grounds for condonation.

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Title: MONIKA GUPTA Versus SANJAY BANSAL

Date of Decision: 19.07.2023

+ RFA(OS) 59/2019 & CM APPL. 19452/2022

CORAM: HON’BLE MR. JUSTICE VIBHU BAKHRU

HON’BLE MR. JUSTICE AMIT MAHAJAN

Introduction

Delhi High Court dismissed the review petition on as the petitioner was lackadaisical in filing the review and there is no ground of reason to back this Inordinate delay of more than 1600 days.

Facts of the case

The appellant filed the current application in an effort to excuse the existing appeal’s 1969-day filing delay. The petitioner has chosen the current internal court appeal in opposition to a decision made on August 27, 2014, known as “the impugned order,” the respondent’s claim for particular judgement was heard by the learned Single Judge, wherein It was mandated to perform. According to the contested order, the parties had signed a contract to sell a piece of land known as Plot. Number 68, 50.40 square metres, Pocket 11, Block G, Sector 11, ‘The suit property’ in Rohini, New Delhi-110085, is up for sale Consideration in the amount of Rs. 80 lakhs.

The plaintiff said that on May 7, 2012—the day the Agreement to Sell was signed—it had paid the appellant/defendant a payment totaling Rs. 50,00,000/- (Rupees Fifty Lakhs). At the time of the Sale Deed’s execution, the remaining amount of Rs. 30,00,000/- (Rupees Thirty Lakhs) was due to be paid on or by May 15, 2012. The learned Single Judge observed that the defendant/appellant had not filed a written statement and that it was not on record despite having had enough opportunity to do so. Additionally, the appellant did not show up in front of the relevant court on the dates when the case was heard.

As a result, the respondent/plaintiff’s request for particular execution of the Agreement to Sell dated 07.05.2012 was granted by the learned Single Judge, who also decreed the suit.

Analysis of the court

The appellant claims that the respondent failed to file the reply despite being given enough opportunity to do so, which contributed significantly to the delay in the processes surrounding the review petition.

The appellant supported his claim by citing the ruling in the case of DSR Steel (Private) Limited v. State of Rajasthan & Ors.: (2012) 6 SCC 782, which held that the time spent by the party pursuing the review petition must not be taken into account when considering whether to excuse the delay in filing the appeal. He called this Court’s attention to paragraph 25.3 of the aforementioned ruling.

The appellant receives no benefit from the aforementioned ruling. Contrarily, the Court has mandated that the time spent by the party actively pursuing the remedy of review be excluded in suitable situations. In this instance, we determine that the appellant pursued its review petition in a careless manner, and we are unable to believe that the appellant did so conscientiously.

It is obvious that the current appeal has been filed with excessive delay, and court finds no reason to excuse this.

As a result, the appeal is denied.

Written By Shreyanshu Gupta

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7 Jul

Delhi High Court Dismissed the appeal challenging the order of a district court due to lack of filing of written statement on time.

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Title: SANTOSH KUMAR AGGARWAL vs M/S ALUCO PANEL LIMITED

Date of Decision: 05th July, 2023

+ RFA(COMM) 131/2023

CORAM: HON’BLE MR. JUSTICE MANMOHAN

HON’BLE MS. JUSTICE MINI PUSHKARNA

Introduction

Delhi High Court Dismissed the appeal challenging the order of a district court due to lack of filing of written statement on time thus defence for lack of territorial jurisdiction could not be raised.

Facts of the case

Present appeal has been filed challenging the order dated 11th November, 2022 passed by the learned District Judge in CS No.1235/2018 whereby the suit was decreed in favour of the respondent-plaintiff.

Analysis and Decision of the case

This Court determines that the appellant-defendant did not file the written statement or raise any defences despite participating throughout the suit processes, having heard the learned appellant’s counsel and having read the paper book. Despite the fact that an application under ruling IX Rule 7 CPC and an application under Order VII Rule 11 CPC were both submitted on October 17, 2019, both on the grounds that the Court lacked geographical jurisdiction, the applications were both rejected by a detailed ruling dated October 13, 2022. It is established law that a written statement cannot be filed more than 120 days after it is due. (See: 2019 SCC 210, SCG Contract (India) Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd. As a result, the order dated 17th October, 2019 is in accordance with law.

Additionally, this Court believes that the defences of non-delivery of goods against bills nos. 10 and 30 and lack of jurisdiction in the current case are valid arguments. The Trial Court was unable to address the aforementioned defences since, in the current instance, the opportunity to provide a written statement had expired because it had not been submitted within the allotted time frame.

Additionally, this Court also believes that the decision interpreting Section 12A of the Commercial Courts Act prospectively renders the statute effective as of August 20, 2022. The aforementioned judgement offers no support to the appellant because the lawsuit in the current instance was filed in 2018.

As a result, the current appeal is dismissed together with any pending petitions since it lacks merit.

Written By – Shreyanshu Gupta

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