Max Corona Enggs and Consultants (P) Ltd. vs Mukund Engineers Ltd.

Rajiv Sahai Endlaw, J.—The plaintiff filed a suit for recovery of Rs. 12,47,204/- from the Defendant before the court of the Additional District Judge, Delhi. The Defendant filed its written statement alongwith counter claim before the Additional District Judge before whom the suit was pending. On 15th September, 2004 none appeared on behalf of the plaintiff before the learned Additional District Judge where the suit was initiated by the plaintiff and accordingly the suit of the plaintiff was dismissed in default and the plaintiff was proceeded ex parte in the counter claim of the Defendant. On subsequent date, it was realized by the learned Additional District Judge that the counter claim was in excess of the pecuniary jurisdiction of that court and accordingly the counter claim was ordered to be placed before the District Judge and the District Judge vide order dated 29th October, 2004 ordered the file to be placed before this Court and directed appearance before this Court for the date fixed.

Upon receipt of the file before this Court, court notice was ordered to be issued to the parties. The Defendant/counter claimant appeared in pursuance to the said court notice. The order dated 27th April, 2006 records that the counsel for the plaintiff had been served with the court notice but the plaintiff had remained unserved. The counsel for the plaintiff on whom the court notice was reported to have been served, however, did not appear before the court. Subsequently, the plaintiff was also served by affixation at the last known address of the plaintiff but still none on behalf of the plaintiff appeared before the court and the plaintiff was proceeded ex parte (in the counter claim) again vide order dated 19th September, 2006 of this Court. The counter claimant thereafter led its ex parte evidence by filing the affidavit by way of examination-in-chief of its Deputy General Manager Shri Ramesh L Uttamani and by proving the documents Exhibit D1/1 to Exhibit D1/24.

The counter claimant has proved that the plaintiff had represented that it was the manufacturer of Flexivinyl (UPVC) sheets and was a specialist in undertaking water proofing works and was having enough experience in laying lining of the reservoirs; on the said representation of the plaintiff, the counter claimant placed a work order dated 26th March, 2001 on the plaintiff for supply and laying lining of 1mm UPVC sheets at the raw water reservoir site of the counter claimant at M/s Godawari Sugar Mills Limited, Sameer Wadi, Karnataka on the terms and conditions contained therein. The said work order has been proved as Exhibit DW1/13. As per Clause 10 of the said order, 70% of the price was to be released by the counter claimant to the plaintiff on getting the details regarding dispatch of materials by the plaintiff and the counter claimant was to deduct an amount equivalent to 5% from the bills of the plaintiff and which amount was to be returned to the plaintiff on expiry of defect liability period of 12 months from the date of completion of job. It is further a term of this work order that the plaintiff was to do testing at site and the sheet which the plaintiff was to lay for water proofing were to be manufactured strictly as per IS-2076-1961 from Virgin Resins. The said work order further provides that the plaintiff will give to the counter claimant standard performance guarantee of 10 years for the sheets supplied and laid by the plaintiff.

The witness of the counter claimant has further deposed that the quality of the work executed by the plaintiff was extremely poor and the plaintiff did not carry out the tests. It is further in evidence that heavy leakages occurred throughout the central bund of reservoir and the counter claimant had to engage consultant for ascertaining the cause of leakage; it was found that the leakage was from the field seams of PVC liner laid by plaintiff and from defects in PVC liner supplied by plaintiff and owing to damage caused by plaintiff by puncture while laying the liner. It is the evidence of the counter claimant that the works of the counter claimant were adversely affected owing to the aforesaid and the overall time schedule of the project and commissioning of the plant was delayed. It has further been deposed that the plaintiff inspite of repeated requests and reminders, did not take remedial actions and ultimately the counter claimant informed the plaintiff that if the plaintiff failed to carryout the rectification work, the counter claimant would carry out the same at the costs and risk of the plaintiff and the plaintiff was further informed that Rs 25-30 lacs may have to be spent on the rectification work. The witness of the counter claimant has deposed that the counter claimant has spent Rs 25 lacs in arresting the leakage and has suffered liquidated damages in the sum of Rs. 2,48,000/- and thus made the counter claim of Rs. 27,48,000/- together with interest at 18% per annum on the plaintiff.

I may at this stage notice that the plaintiff had instituted the suit for recovery of balance amount stated to be due from the Defendant/counter claimant to the plaintiff for the works carried out by the plaintiff. This suit, as aforesaid, was dismissed in default. It is the case of the counter claimant that the plaintiff instituted the suit as a counter blast to the aforesaid claims of counter claimant.

The evidence of the witness of the plaintiff remains unrebutted. I have satisfied myself that the counter claim was instituted within time. The counter claimant had vide letter dated 15th February, 2002 (Exhibit D1/20) given notice to the plaintiff to carry out the rectification work and the counter claim was filed on 9th July, 2004 and is as such within time. Moreover, the work order placed by the counter claimant on the plaintiff and which was accepted by the plaintiff, as noticed above, provided for the plaintiff to guarantee performance for ten years. Yet another clause of work order provided for 12 months as the defect liability period.

The counter claimant has thus made out a case for recovery of the sum of Rs. 27,48,000/- from the plaintiff. However, since the plaintiff did not contest the counter claim, the counter claimant is held and entitled to interest at 6% per annum only from the date of institution of the counter claim, till realization. The counter claimant is also entitled to costs limited to court fees paid on the counter claim. The counter claim is accordingly decreed.