Sunil Kumar v. Larsen and Toubro Ltd.

1. By way of captioned application, the plaintiff seeks following prayer: “Direct the Defendant to pay the amount admitted in tax certificates amounting to Rs. 98,00,000/- alternatively the amount admitted in reply to the legal notice amounting to Rs. 24,07,000/- due to the Plaintiff”

2. Plaintiff has instituted the underlying suit for recovery of Rs.1,33,28,000/-. In the plaint, it is claimed that the defendant was awarded a Contract by Haryana State Industrial & Infrastructural Corporation Ltd. for development of infrastructural work for development of an industrial township in Rohtak, Panipat and Rai. The defendant sub-contracted part of the work to the plaintiff by way of two separate contracts. The plaintiff claimed its entitlement to receive an amount of Rs.2.75 crores. After adjustment of accounts, the amounts remaining recoverable, plaintiff issued legal notice dated 05.07.2014 thereby asking the defendant to pay the balance remaining amounting to Rs.98 lacs. The defendant replied to the said legal notices vide its reply dated 19.07.2014.

3. Learned counsel for the plaintiff contends that in the reply to the legal notice, the defendant unambiguously admitted its liability to the extent of Rs.11.07 lacs. He submits that part liability being admitted by the defendant, the said admitted amount be directed to be released to the plaintiff. In support, learned counsel has placed reliance on the decision of Uttam Singh Duggal & Co. Ltd. v. United Bank of India And Others reported as (2000) 7 SCC 120.

4. Per contra, learned counsel for the defendant contended that the defendant in its written statement duly explained its reply sent in response to the legal notice. The defendant has denied any liability in entirety and no part of the claim was admitted. He placed reliance on the decisions in State Bank of India v. Midland Industries & Ors. reported as AIR 1988 Del 153, Express Tower P. Ltd. & Anr. v. Mohan Singh & Ors. reported as 2007 (97) DRJ 687 (DB) and Razia Begum v. Sahebzadi Anwar Begum & Ors. reported as AIR 1958 SC 886.

5. Order XII CPC relates to ‘Admissions’. Rule 6 provides that if a party has made admissions in the pleadings or otherwise, whether orally or in writing, the Court may at any stage of the suit pass a judgment on admission without first determining any other question between the parties. The Court can pass such a judgment either on the application of any party or in its own motion as well. The condition precedent for passing such a judgment is that the admissions must be clear, unambiguous, unconditional and unequivocal. Further the judgment on admission is not a matter of a right but is rather a discretion vested with the Court which, of course, is to be exercised judicially. The object of Rule 6 is to enable the party to obtain a speedy judgment atleast to the extent of relief to which according to the admission of the defendant, the plaintiff is entitled (Ref: Uttam Singh Duggal(Supra)).

6. In State Bank of India (Supra), a Coordinate Bench of this Court has held as follows:- (6) Having noted these facts of this case it would be appropriate to refer to Order 12 rule 6 Civil Procedure Code. which lays down as under:- "6(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions. (2) Whenever a judgment is pronounced under sub-rule (1), a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced. There is no doubt that Rule 6 of Order 12 has been couched in a very wide language. However, before a court can act under Rule 6, admission must be clear, unambiguous, unconditional and unequivocal. Furthermore a judgment on admission by the defendant under Order 12 rule 6 Civil Procedure Code is not a matter of right and rather is a matter of discretion of the court, no doubt such discretion has to be judicially exercised. If a case involves questions which cannot be conveniently disposed of on a motion under this rule the court is free to refuse exercising discretion in favour of the party invoking it. It is not in each case where Order 12 rule 6 Civil Procedure Code is invoked that the court would be obliged to pass a decree which case would depend upon its own peculiar facts. Where the defendants have raised objections which go to the very root of the case, it would not be proper to exercise this discretion and pass a decree in favour of the plaintiff. The purpose of Order 12 rule 6 Civil Procedure Code is to avoid waiting by the plaintiff for part of the decree when there is a clear, unequivocal, unambiguous and unconditional admission of the defendant in respect of the claim of the defendant. The rule only secures that if there is no dispute between the parties, and if there is on the pleadings or otherwise such an admission as to make it plain that the plaintiff is entitled to a particular order or judgment he should be able to obtain it at once to the extent of admission. But the rule is not intended to apply where there are serious questions of law to be asked and determined. Likewise where specific issues have been raised in spite of admission on the part of the defendants the plaintiff would be bound to lead evidence on those issues and prove the same before he becomes entitled to decree and the plaintiff in that event cannot have a decree by virtue of provision of Order 12 rule 6 Civil Procedure Code without proving those issues.”

7. In Express Tower (Supra), Division Bench of this Court held as under:-

8. Coming to the facts of the present case, it is apparent that the plaintiff has preferred the captioned application on the premise that defendant in its reply to plaintiff’s legal notice, admitted part liability. To appreciate the submission, it is deemed appropriate to reproduce the relevant extract of the reply, which reads as under:- “…..We are instructed by our Clients to deny the contents of your Notice in their entirety. Our Clients may not be taken as having admitted to the correctness of any of the statements made in your Notice, by not adverting to or denying the same specifically. The entire Notice rests on a completely wrong premise, and is replete with untrue and unsubstantiated allegations. We are issuing the present Reply Notice to place the correct factual position on record. Our Clients reserve their right to address a further detailed response to your Notice if they so choose, and if they are so advised. We are instructed to state that your Client's stand that he was allegedly not well versed with English language, and that the general terms and conditions were orally explained to him, and further that the parties had unequal bargaining power etc., are all completely in the nature of an afterthought, and contrived in an attempt to overcome the provisions of the Contract, and are strongly denied. Being a person engaged in carrying on business, he is presumed to be aware of the contents of documents he signs, and in the present case, he affixed his signature to the Contract only after being fully aware of the terms and conditions, and by consenting to the same. Your statements in this regard in the Notice on your Client's instructions, are frivolous to say the least, and do not even deserve any credence. We are further instructed to point out that your Client was awarded a total of 9 Work Orders. Further, he did not fulfill his obligations even in relation to these Work Orders, as he performed the work unsatisfactorily, resulting in the client under the Contract M/s. Haryana & Infrastructure Development Corporation Ltd. ('HSIDC') withholding payments to our Client. Not stopping with this, your Client abandoned the work abruptly and left the Site, resulting in the client under the Contract M/s Haryana State Industrial & Infrastructure Development Corporation Ltd. (‘HSIDC’) withholding payments to our Client. Not stopping with this, your Client abandoned the work abruptly and left the Site, constraining our Client to complete the balance works through other agencies. It is strongly denied by our Clients that unjustified deductions were made, or that the client under the Contract i.e. HSIDC, accepted the work of your Client without any issues relating to quality. As pointed out above, your Client's performance was extremely unsatisfactory and resulted in HSIDC frequently withholding payments to our Client. With regard to the statement that 5% of the gross bill value is allegedly payable to your Client, and that the same is in the nature of Retention Money to be released after the completion of the entire scope of works, we may point out that while 5% of the gross bill value of the Contract is in the nature of Retention Money, the same did not become payable to your Client as he did not even complete the works. The further statement that large amounts were withheld without any reason or explanation is completely incorrect and baseless. The correct position is that your Client did not complete, and even abandoned the Site abruptly, resulting in our Client having to execute the works through other agencies. As per our Client's records, as on date, it is only a total sum of Rs.11.07 lakhs that your Client is entitled to payment of. We are instructed to deny your Client's claim that the payment to be received for the work done by him was allegedly a sum of Rs.2.75 crores as allegedly evident from the Form 16A and Form 26AS provided by our Client. These forms cannot determine the entitlement of your Client in terms of the Contract, and your Client can only claim payments for work actually done, less deductions that our Client is entitled to make to terms thereof. We are instructed to strongly deny your statements that a sum of Rs.1.77 crores alone has been received as payment by your Client, and that a sum of Rs.85 lakhs and a further sum of Rs.13 lakhs as Retention Money are allegedly payable, amounting to Rs.98 lakhs in all. As per our Client’s records, the value of the work actually done by your Client is only a sum of Rs.2.19 crores, and the amount paid to your Client is a sum of Rs.2.05 crores. Further, and as per our Client’s records, only a total sum of Rs.11.07 lakhs is payable to your Client under all heads in terms of the Contract. Your Client may confirm that the said balance amount will be accepted by them in full and final settlement of all their claims under the Contract/Work Orders, issue a statement to this effect, and withdraw the present legal Notice upon which the said amount will be paid by our Client. Our Client once again deny the statements made in your Notice as false and unsubstantiated. You may advise your Client to withdraw their Notice and refrain from taking any action pursuant to the same. Should your Client, despite this Reply Notice, chose to take any misconceived legal action, the same will be suitably defended by your Clients at your Client’s risk, costs and consequences”.

9. Though the plaintiff relies on the defendant’s aforesaid reply, in the considered opinion of this Court, the said reply cannot be read in isolation and has to be read in light of the defence taken by the defendant in its written statement.

10. A careful perusal of the written statement would show that the defendant clarified that at the time of sending the reply, an amount of Rs.11.07 lakhs was offered, considering the long-term relationship between the parties as a goodwill gesture. However, post reconciliation of accounts, no amount was found payable.

11. A further perusal of the written statement would show that the defendant has taken an objection that the plaint was time barred. It has further challenged the territorial jurisdiction of the Court to entertain the plaint. On merits, it is averred that it was the plaintiff who had failed to perform its obligation and duties under the contract and in fact prior to issuance of legal notice, plaintiff had issued a ‘no claim certificate’. The defendant disputed the claims being frivolous and denied its liability to pay the plaintiff any claimed amount. It has also been averred that the defendant had cleared all its dues and liability against the work executed by the plaintiff. It is further averred that on account of plaintiff leaving the work midway, the defendant was forced to get the work finished through a third-party contractor and, as a result of that it suffered losses.

12. While the plaintiff claims that a combined reading of the reply to the legal notice and the written statement, there is a clear admission by the defendant of its liability, however, from a plain reading of the written statements, it is borne out that the defendant has not admitted its liability to pay any portion of the claimed amount. Rather, it is averred that after reconciliation of accounts, no amount was found pending/outstanding. For the Court to pass an order under the subject provision, the admission of liability has to be clear, unambiguous, absolute and unequivocal which is not so in the present case. As noted above, the reply to the legal notice has been explained by the defendant in its written statement leaving no doubt as to the defendant’s denial of its liability to pay any amount to the plaintiff. Resultantly, this Court finds no merit in the application, which being misconceived, is dismissed.

13. Needless to state that the observations made herein above are for the purpose of disposal of the captioned application and shall not have a bearing on the final outcome of the suit. CS(COMM) 538/2017 List on 14.12.2023.