SHRI AJAY KALRA vs DELHI DEVELOPEMENT AUTHORITY

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Decided on: 20th December, 2023

+ CS(COMM) 249/2017(earlier Suit no. 1214/2009) & CC(COMM) 130/2017
SHRI AJAY KALRA …..Plaintiff
Represented by: Mr. Puneet Taneja, Ms. Laxmi Kumar &Mr. Manmohan Singh Narula, Advocates.
versus

DELHI DEVELOPEMENT AUTHORITY& ORS.
….. Defendant
Represented by: Ms. Beenashaw N. Soni, Additional Standing Counsel, Ms. Mansi Bhatia & Mr. Bhupesh Pandotra, Advocates.

+ CS(COMM) 250/2017 (earlier suit no.1215/2009) & CC(COMM) 129/2017
SHRI AJAY KALRA …..Plaintiff
Represented by: Mr. Puneet Taneja, Ms. Laxmi Kumar &Mr. Manmohan Singh Narula, Advocates.
versus

DELHI DEVELOPEMENT AUTHORITY & ORS.
….. Defendant
Represented by: Ms. Beenashaw N. Soni, Additional Standing Counsel, Ms. Mansi Bhatia & Mr. Bhupesh Pandotra, Advocates.
CORAM:
HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA
J UDGEMENT

NEENA BANSAL KRISHNA, J.

1. The present two Suits for Recovery of Rs. 1,43,80,795/- in CS(COMM) 249/2017and Rs.2,62,53,812/- in CS(COMM) 250/2017have been filed on behalf of the plaintiff.
2. The facts in brief are that the plaintiff, a Civil Engineering Contractor was enlisted with the Delhi Development Authority (hereinafter referred to as “DDA”) as Class-I (B&R) Contractor. The defendant No. 1-DDA sometime in early April, 2002, invited the tenders for construction of 160 HIG Category-II Houses (four storey) and 160 Scooter Garages in LIC Pocket-II, Sector B, Vasant Kunj which was sub-divided into two groups i.e., Internal Development and Construction of 80 HIG Category-II Houses and 80 Scooters Garages (Group-I) and Internal Development and Construction of another 80 HIG Category-II Houses and 80 Scooter Garages (Group-II). The estimated cost of Group-I was Rs. 2,95,35,245/- and the estimated cost of Group-II was Rs.2,95,25,621/-.
3. Defendant No. 1-DDA accepted the Item Rate Tender of the plaintiff at Rs.2,55,24,764 and Rs.2,56,24,273/- for Group I and II respectively and the work was awarded by two separate Letters of Award, both dated 19th April, 2002 for each group. A formal Agreement dated 26th April, 2002 was executed between the plaintiff and the defendant No. 1 through defendant No. 2-Executive Engineer/SWD4/DDA.
4. According to the Agreement, the work for both the Groups had to be completed within a period of 24 months from the date of start i.e. 29.04.2002.
5. It is asserted by the plaintiff that heimmediately mobilized his resources, including men, material and machinery and reached the site on 28th April, 2002 with duly intimation to the defendant No.1-DDA vide Letter dated 06th May, 2002.
6. It is claimed that the Building Construction Contract was solely based on performance of reciprocal obligations.The following obligations were required to be fulfilled by defendant No.1 as a pre-requisite for the timely completion of the Contract which are as under:
(i) That the site belongs to DDA free from encroachments and good for construction, without any litigation’s and the same is in their (DDA’s) possession for this work.
(ii) That the building plans showing various services such as water supply, sewerage, storm water drains, land use etc. are duly approved by the local municipal/competent authorities.
(iii) That the detailed drawings, structural as well as architectural are available with the Department for smooth and efficient execution of the work to achieve the completion within the stipulated time period.
7. It is asserted that the defendant No. 1/DDA from the very beginning failed to honour the fundamental reciprocal obligations under the Contract.Though the site was handed over on 27th April, 2002, but immediately upon start of the earth work, it was soon found that the site was not conducive for construction as most of the blocks were located on back filled ditches and the strata was filled up or erratic in nature as a result of which the foundation bed/ground was not firm.
8. Further, the defendant No. 1/DDA failed to supply the layout plan and the structural drawings which were providedonly by 18.06.2002 and not at the start of the work. The plaintiff who had already mobilized his men, material and machinery as per the scheduled requirement of the Work, had to keep his labour, machinery and the establishment idle at site which resulted in losses to the plaintiff.
9. It is further asserted that the since the entire site was located at localized back filled ditches, there was a marked difference in the level of adjoining plots. Thus, the belated structural drawings that were provided to the plaintiff were of no use as in all the blocks expansion joints were to be provided and it was not clear from the drawings as to how the cross walls and plinth beam could be provided in view of the level difference between the adjoining blocks.
10. To resolve these issues, the plaintiff wrote a Letter dated 08.08.2002 requesting the defendants to provide the necessary clarifications by way of sketch/drawings. This request for revised structural and foundation drawings was also recognized by the Engineering staff of the DDA at the site and the same had also been recorded in the Hindrance Register, on 21.09.2002. The demand for revised structural and foundation drawings was reiterated by the plaintiff vide letter dated 04.10.2002 as the delay on the part of DDA was hampering the progress of the work and causing losses to the plaintiff on account of idling of men, material, machinery etc.
11. It is claimed that the DDA engineers and staff were aware from the very beginning that the Site was not conducive for construction, despite which the Site was allotted to the plaintiff. It was only on the repeated requests of the plaintiff that a fresh soil investigation in few blocks was initiated by the defendant No. 1 and the site was inspected by the senior officers of the DDA.
12. On realizing the impossibility to execute the work, the Executive Engineer (SWD-4)/defendant No. 2 vide his Letter dated 13.12.2002 directed the plaintiff not to execute any work at the site as the proposal for an alternative site was being considered by the Competent Authority. This unscheduled stoppage of the work resulted in severe losses to the plaintiff, which he registered in the Master Register maintained by the DDA.
13. According to the plaintiff, though officers assured an alternative site, nothing was heard from the DDA even after 10 months from the date of stoppage of work.In order to mitigate the losses, the plaintiffrequested the DDA vide Letter dated 03.10.2003carry out certain modifications in the layout plan which would enable the plaintiff to construct around 100 plus housesat the existing site until an alternative site was made available.
14. According to the plaintiff, after almost 20 months from the scheduled date of start, arevised layout plan reducing the number of flats from 160 to 136 i.e. 72 forGroup I& 64 for GroupII was handed over to him on17.12.2003 and it was informed to plaintiff that the revised structuraldrawings will be shortly issued.
15. Resultantly, the work could not still be started because of the non-availability of thestructural/foundation drawings. As per the revised layout plan also, someblocks were shifted to new locations for which soil investigation wasbeing done by the Department. Because of the aforesaid change in layoutand the ongoing soil investigation at the new site, plaintiff had to make large scalechanges in its plans and also shift the steel yards, water tanks, labour huts, site office etc. thereby causing further loss to plaintiff. In addition to this, the movement of labour and deployment of plant and machinery by other agencies forcarrying out soil investigation further disrupted the progress of work andalso led to increased losses for plaintiff.
16. Almost upon the completion of 24 months,plaintiff was instructed to start the work in some of the blocks for whichrevised structural drawings were issued to him only on 5.04.2004. Thesaid conduct of defendants was in total derogation to the terms of theAgreement and the promises made by defendant on the basis of which the plaintiff had quoted his rate for executing thepresent works. Moreover, the conducting of soil investigation thricewithin the scheduled period of contract, when various types of equipmentwere being brought to site by different agencies from time to time, furthershows the apathy and non-contractual conduct on the part ofDDA which increased plaintiff’s misery and losses.
17. It was asserted by the plaintiff that as the scope of work had drastically been reduced from 160 to 136houses and further DDA had miserably failed to honour its reciprocal obligations on which the timely completion of the contract was dependent, resulted in the plaintiff incurring heavy losses. Vide his letter dated 24.04.2004 the plaintiff notified DDA thatbecause of fundamental breach of contract committed by the defendants, plaintiff hasincurred substantial losses and he shall, amongst other claims, be entitled to the followingas compensation for the losses suffered by him:
(i) Expenditure towards maintaining the site staff due to change insite.
(ii) Idle charges towards maintaining the machinery and T&P due tochange in site.
(iii) Loss of turn over for prolongation of the contract due to change insite.
(iv) Loss of profit due to breach committed by the department for theportion ofwork not allowed to be completed.
(v) Head office-Overhead expenditure and loss for prolongation of thecontract beyond stipulated date.
(vi) Site Office- Overhead expenditure and loss for prolongation of thecontract beyond the stipulated date.
(vii) Market rise due to prolongation period of the contract over andabove 10CC/Escalation.
(viii) Loss due to bank charges for obtaining bank guarantee etc.
18. It was further asserted by the plaintiff that the defendants acknowledgedthe fact that the breach was on theirpart and as they miserably failed to fulfill their reciprocal obligations.Thus, DDAthrough its senior staff members requested the plaintiff to continue with thework and gave a positive assurance with regard to plaintiffs claim forcompensation.
19. Since the plaintiff had already started the work in some of the blocks for which structural drawings were supplied by the defendants, he quantified some of his claims and notified the same todefendants vide his letter dated 23.06.2004for the necessary payment in order to avoid further financial crunch.
20. It was asserted that the plaintiff vide his letter dated 25.06.2004 again requesteddefendants to issue drawings for the balance 4 blocks as plaintiff hadalready incurred huge losses dueto the delay and stoppage of work.The plaintiff further notified that DDA would have tocompensate him for the losses and expenditure incurred by him due to thedelay caused in not making available the drawings and shallbe submitting his claim shortly in this regard.
21. The plaintiff claimed that after he had remobilized entire men, material andmachinery on false assurances of compensation from the defendants for their various breached, theDepartment started coercing plaintiff to withdraw hisClaims vide letter dated 2.07.2004.DDA sought the plaintiff to give anUndertaking that he will not claim any 10CC/ escalation beyond thestipulated date of completion due to revised layout plan/ on account of soilcondition at site.
22. It is submitted that when the plaintiff opposedthe illegaldemand of furnishing an Undertaking, the defendants tried to coerce plaintiff by illegally trying to encash the performance Bank Puarantees by writing letter dated14.07.2004 to plaintiff’s the bank (Central Bank of India, Defence Colony). The plaintiff claimed that it was clear that the department and more specifically some of its officials had malafide intention of coercing plaintiff and taking benefit of their own wrongs, as the said encashment was evidentlyfraudulent.Thus, having no other option Engineer in Charge,DDA persuaded theplaintiffto keep the Bank Guarantees alivetill the pending issues were sorted out. Accordingly, plaintiff vide his letterdated 15.07.2004 enclosed the renewed Bank Guarantees having extendedthem for further period of one year i.e. upto 15.07.2005.
23. It came as utter shock and dismay of plaintiff when he received letter dated16.07.2004 from the Executive Engineer (SWD-4) alleging that there has beenpilferage of grinded soft rock (fine aggregate) from the site and aDepartmental Inquiry was in process.The plaintiff was directed to stop the work and maintain status quo till further orders.
24. It was asserted that the plaintiff was under the impression that work got stoppedfor some internal Departmental Inquiry as mentioned in Letterdated 16.07.2004 and thought that the work would be restarted in a day or two. However, nothing was heard from the defendants for almost two weeks.Thereafter, the plaintiff vide hisletter dated 3.08.2004 informed the Executive Engineer that though the work wasstopped in terms of his directions citing a Departmental Inquiry with respect to some alleged pilferage, however, anystoppage of work would adversely affect his finances and would furtherincrease his expenses as well as the losses and damages.A request was madefor the withdrawal of the Order for stoppage of work.He also requested for joint measurements of work done.
25. However, despite plaintiff requesting permission to re-start thework, no response camefrom the defendants.In order to mitigate the losses as a prudentcontractor, the plaintiff wrote a letter dated15.09.2004 to defendant informing that the cement lying at the site stores may betransferred to some other works as with the passage of time the same woulddeteriorate and become unusable.
26. It came as a further shock to the plaintiff when he received aShow Cause Notice dated 22.09.2004 on 25.09.2004 from the Secretary, Contractor’s RegistrationBoard, alleging that the CE (SWZ) reported about the illegalmining taking place at the site of work and that plaintiff was actively involved in it as the stonecrushing machine installed at the site of work belonged to plaintiff and as to why disciplinary action shouldnot be initiated against him.
27. Immediately on the receipt of the aforesaid Show Cause Notice,the plaintiff vide letter dated 1.10.2004 refuted all the allegationsmade in the Notice and requested the Secretary (CRB) tofurnish the report ofCE (SWZ) based on which the Show Cause Notice wasissued. He also sought all the relevant documents and statements relied uponfor framing the allegations and preparing the said report or to provide aninspection of the record to enable him to give a detailed reply to the Notice.
28. The plaintiff had bonafide apprehension that the authoritiesmay take an arbitrary decision prejudicing the interest of plaintiff withoutproviding a fair opportunity.He expressed hisapprehensions vide Letter dated 6.10.2004 and submitted a detailed account of the entire circumstancesleading to the issue of Show Cause Notice. He categorically pointedout that in the Letter dated 16.07.2004 only an allegation of pilferage ofgrinded soft rock was made and that too not against him,however, the same has been arbitrarily converted into alleged illegalmining.
29. Further, he denied that he haddone any mining activity as he neither owned a stone crushing machinenor was such a machine brought at site. It wasexplained that a stone crushing machine is of huge dimensions and is veryheavy which is not easily transportable.It requires specialinstallations and therefore such a machine cannot be brought at any place,be installed, run in a day and removed the next day as the site was constantlybeing inspected by DDA officers.Pertinently, at no point of time the DDA officers found anyactivity even remotely connected with illegal mining at site.
30. Also,necessary measurements had been taken by DDA during the period December,2003-July2004 and then also, no illegal mining orinstallation of stone crushing machine was alleged. The site was alsoinspected by Chief Engineer (SWZ) on 9.06.2004 and his inspectionreport/comments were noted in the Master Register where there is noassertion about the presence of stone crushing machine at site. Even on 29.06.2004, there was an inspection of the site by the ExecutiveEngineer and in his inspection Report/Comment as noted in the Site OrderBook there is not even a whisper of the presence of the crushingmachine or mining at the site. In these circumstances, plaintiff not onlyasked for a favorable decision but also asked for an opportunity ofpersonal hearing before any final decision was taken on the Show CauseNotice.
31. That almost after one year of submitting the aforesaid reply requestingfor a personal hearing and inspection of documents, CRB arbitrarily,illegally and against the principles of natural justice decided to remove the plaintiff from the list of DDA’s approvedcontractors on 3.06.2005 though the same was intimated to plaintiff after two months, videletter dated 3.08.2005.
32. It is submitted that the plaintiff suffered a huge financial crunch due to the arbitrary acts of the defendant No.1 and went into depression as his entire business wasruined and came to a grinding halt. After a few months,the plaintiffrealized that the work was still continuing on paper. Though plaintiff had no financial resources to continue plaintiff, requested DDAon 30.1.2006 to close the existing Agreement and clear hispending dues/claims at the earliest.
33. It is further asserted thatthe plaintiff was intimidated and coerced to such an extent that toavoid any arbitrary and illegal penal action, he was made to write that heis ready and willing to give up his genuine claims and shall not claimcompensation from DDA for the losses caused to him by the breachescommitted by the department.
34. It was asserted that the request to foreclose the Agreement, gave an opportunity to the DDA and some of its officials to further perpetrate their illegal and arbitrary actions against plaintiff. The plaintiff soon came to know that the Department instead of closing the Contract, had intention of terminating the contract.
35. AShow Cause Notice dated 4.11.2006 was then issuedstating that plaintiffwas allegedly associated with pilferage and grinding of soft rock at thesite and therefore, work had to be got stopped by the Department. It is submitted that it is the defendants who committed breach of terms and conditions ofthe Contract, resulting in the non-completion of work. However, the defendant malafidely put the plaintiff to ShowCause as to why an action under Clause 3 and sub – Clause 3(a) and/ or 3(b)and 3 (c) of the Agreement should not be taken against him.
36. It was asserted that the aforesaid Show Cause Notice was served on plaintiff’sservant on 15.11.2006 and since plaintiff was not available in the country,his father immediately on the next day i.e. 16.11.2006 informeddefendants that plaintiff is not available in the country. It was informed by plaintiff’s father that he shall be coming back after 10 days and therefore requested that no action be taken till then.
37. The plaintiff realizing that the Department and some of its erringofficers were hell bent upon ousting plaintiff from the contract and fromthis business, rushed back to India on 18.11.2006 itself and immediatelythereafter on 24.11.2006 submitted his detailed Reply negating all theallegations and further highlighted the shifting and wavering stand ofthe department with regard to alleged mining.He categorically mentionedthat the provisions of Clause 3 of the Agreement cannot be invoked in thepresent facts as the Department cannot be allowed to misuse its dominantposition as a an owner and take benefit of its own wrong.
38. However, before the aforesaid reply could reach the Department,defendants illegally and arbitrarily rescinded the Contract vide letter dated 23.11.2006 (received by plaintiffafter 24.11.2006), forfeited the security deposit by encashing the Bank Guarantees on the same day and further notifiedthat a new contractor would be engaged for the balance work which shall be done at plaintiff’s risk and costof the plaintiff. Further,the plaintiff was directed to be present at site on 30.11.2006 for thejoint measurements of work done by plaintiff. Immediately on the receiptof the said letter, plaintiff vide his letter dated 29.11.2006 sent by speedpost refuted the contents of the said Order and informed that he shall begiving his detailed reply shortly and further requested for a fresh date forjoint measurement as he was not available on 30.11.2006.
39. Keeping in view the past illegal conduct of DDA and its Officers,the plaintiff’s father Shri Kuldip Kalra went to the site on 30.11.2006 andremained there from 9.30 to 1.15(noon) but no official turned up atthe site for measurement. This was immediately informed by plaintiff’s father todefendants by sending a telegram on the same day. DDA replied vide Telegram dated 1.12.2006wherein it was admitted that plaintiff’s father was available at site butincorrectly stated that plaintiff’s father, being non-technical person, was of no help. It was further mentioned that 4thand 5.12.2006were fixed as next dates for joint measurements.
40. According to the plaintiff,no officials were present at the site for the recording of measurements, asthe joint measurements had already been recorded aswork hadstopped way back in July, 2004 itself. The present letters of theDepartment for joint measurement were a farce and a gimmick to re-open the already recordedmeasurements to further cause loss to plaintiff.
41. The plaintiffvidehis Lettersdated 29.11.2006 and 16.01.2007 gave a detailed reply to the Recission Order dated 23.11.2006 stating that the entire action of the Department from the very beginning was illegal and against the Clauses of Contract and further demonstrated the changing stand of the Department with respect to the alleged illegal mining and also the non-applicability of Clause 3 of the Agreementin the present facts.
42. According to the plaintiff, the illegality and arbitrariness on the part of the officials ofthe defendant is further highlighted from the fact that the Executive Engineer (SWD4), as an afterthought, vide its Letter dated 23.02.2007 informedplaintiff that some alleged measurements of the upto date value of workdone by plaintiff together with the stipulated material lying at the site ofwork, had been recorded at their own level, details of which had beenenclosed. However, to the shock of plaintiff no enclosures were foundalong with the said letter.
43. The plaintiff vide his letter dated20.03.2007 brought to defendants notice the details of the balancestipulated materials handed over to defendants as well as the details of themeasurement already available with the Department and further notifiedthat no enclosures have been found by him along with the said letter.
44. It was asserted that the defendants without any basis and as a strategy to further coerceplaintiff and increase the financial losses, insisted to handover of the balance stipulated material and accept the Department’sarbitrarymeasurements. Therefore, instead of clearing the dues of plaintiff, the defendant illegally adopted the strategy of effecting illegal recoveries.
45. The plaintiff through RTI, came toknow that this entire action of falsely implicating plaintiff in the alleged illegal mining, removing him from the list of approved contractors and thereafter rescission of Contract at the risk and cost of plaintiff, was malafide act of some of the erring Officials of defendant’s Department.Theyhad adopted a vindictive attitude against plaintiff when its own internalOfficials had in writing stated that there was no mining activitygoing on at the site as there is no evidence of the presence of any stonecrushing machine and thus, there is no involvement of agency.
46. Further, ithas also come on record that there is no applicability of Clause 3 of theAgreement to the present facts as there is no breach on the part of thecontractor and the action of rescission of Contract at the risk and costof plaintiff is also illegal, arbitrary and against the provisions of contract.
47. It was asserted that in fact, plaintiff by virtue of RTI also came to know thatdefendant’s officials had falsely implicated plaintiff with maliciousintent and the same is evident from DDA’s letter dated 14.09.2004 wherein the defendant No.1 through its CE(SWZ), had informed SE(CCI) that plaintiff may not be allowed to proceed with the work and the measurements may be finalized. It was alsointended by the CE that efforts be made to get prepared a NIT for the balance work. The aforesaid conduct of DDA’s officials goes to showthat the stoppage of work on account of alleged mining was a maliciousact on the part of the officials to somehow oust plaintiff as theDepartment had way back in September 2004 decided to terminateplaintiff’sthe Contract.Thus, the post facto decision of first de-panelingplaintiff from the List of Approved Contractors and then recession ofcontract without providing any opportunity of hearing at any stage, weremere formalities to give a justification to their illegal acts. Having come to know about theillegalities committed by defendant’s Officials, plaintiff reserves his rightto serve the said erring officials separate notices and initiate appropriatelegal action for their illegal acts of maliciously maligning, defamingplaintiff and thwarting his career and business which has caused severefinancial, social and emotional loss and damages to him.
48. The plaintiff has claimed that the aforesaid illegal actions and un-contractual conduct aswell as breaches on defendants’ part, has resulted in severe financial lossesand damages to plaintiff which are liable to be compensated by defendant.The plaintiff raised following claims in this regard which the defendanthad alreadybeen notified in the series of correspondence exchanged with the defendant including letter dated 8.08.2008. Vide Notice dated 4.03.2009, the defendants were called upon to make the payment of the aforesaid claims within a period of 2 months from the receipt of the present Notice, however, despite receipt of the said registered posts, the defendant has neither acknowledged or acted upon the said Notice.
49. The plaintiff has therefore, made the following claims in para 38 of the plaint:-

Claim
CS(COMM) 249/ 2017
CS(COMM) 250/ 2017
Claim no.1: Expenditure towards maintaining the site staff from 13.12.2002 to 17.12.2003 due to change in site.
Rs.2,06,534.30/-
Rs. 2,06.383.440/-
Claim no.2: Idle charges towards maintaining machinery, T&P etc. for the period from to 17.12.2003 due to proposal of change in site.
Rs.19,09,246.84/-
Rs.19,09,246.84/-
Claim no.3: Loss of profitability/ turnover for prolongation of the contract from 13.12.2002 to 17.12.2003 due to change in site.
Rs.7,74,038/-
Rs.7,73,473/-
Claim no.4:Loss of profit due to breach committed by the respondent for the portion of the work not allowed to be completed.
Rs.34,94,068/-
Rs.34,85,227/-
Claim no.5: Head Office overhead and profit for prolongation of the contract beyond the stipulated date.
Rs.24,61,544.35/-
Rs.24,59,745/-
Claim no.6: Site office overheads due to prolongation of the contract beyond the stipulated date.

Rs.36,92,316.76/-
Rs.36,89,617.13
Claim no.7: Cost due to rise in market in prolonged period of contract after the stipulated date over and above 10CC/escalation.

Rs.2,40,353/-
Rs.4,20,150/-
Claim no.8: Loss suffered on account of obtaining bank guarantee but the same was of no use.
Rs.1,50,141/-
Rs.1,49,878/-
Claim no. 9: Balance payment of the work done.
Rs.7,23,589/-
(work done for an of amount Rs.6,14,568/- and Rs.1.09,021/- on account of 10CC upto 28.04.2004)
Rs.2,52,724/-
Claim no.10: Bank charges due to extension of bank guarantee in the prolonged period of contract.
Rs.25,756/-
Rs. 25,765
Claimno.11:Security Deposit/Bank guarantee illegally encashed by the department.
Rs. 2,00,000/-
Rs. 2,00,000/-
Claim no.12:Interest@ 18% p.a. on the delayed release of payments
18% p.a
18% p.a
Claim no.13:Loss due to non-execution of any work even though claimant mobilized their resources at site of work i.e. maintaining staff from 29.04.2002 to 27.07.2002.
Rs.51,633.57/-
Rs.52,466.25
Claim no.14:Idle charges towards maintaining machinery T&P from 29.04.2002 to 27.07.2002.
Rs.4,51,575/-
Rs.6.29,595/-
Claim no.15:A declaration that the act of DDA of removing Mr.Ajay Kalra from the approved list of Contractors is illegal and arbitrary and therefore the order dated 3.08.2005 is liable to be quashed and the agency/contractor is entitled to damages for illegally and arbitrarily removing him from the approved list of Contractors.
Rs.70,00,000/-
Rs.70,00,000/-
Claim no.16:A declaration that the order dated 23.11.2006 of the department in rescinding the contract is illegal and arbitrary and therefore is liable to be quashed and the plaintiff is entitled to damages for the said illegally and arbitrary rescission of contract.

Claim no.17:Damages for loss of goodwill due to the illegal and arbitrary acts of DDA and its officers
(Since damages are claimed in Suit filed against defendant for Group no.II, the same are not being prayed for in the CS(COMM). 249/2017)
Rs.50,00,000/-
Rs.50,00,000/-
Claim no.18:Interest @ 18% on all the above claims from the due date till the date of payment.
18%
18%

50. It is further asserted that the plaintiff is restricting his claim for interest from the date offiling of suit till the date of payment due to the financial crunch created by theillegal acts of defendant.
51. Hence,CS(COMM.) No. 249/2017 &CS(COMM.) No. 250/2017 have been filed with the following prayers:
Prayer in CS(COMM.) No. 249/2017
Prayer in CS(COMM.) No. 250/2017
(i) pass a money decree of Rs.2,06,534.30/- being the expenditure towards maintaining the site staff from 13.12.2002 to 17.12.2003 due to change in site.
(i) pass a money decree of Rs.2,06,383.40/- being the expenditure towards maintaining the site staff from 13.12.2002 to 17.12.2003 due to change in site.
(ii) Pass a money decree of Rs. 19,09,246.84/- being the idle charges towards maintaining machinery, T&P etc. for the period from 13.12.2002 to 17.12.2003 due to proposal of change in site.
(ii) Pass a money decree of Rs.19,09,246.84/- being the idle charges towards maintaining machinery, T&P etc. for the period from 13.12.2002 to 17.12.2003 due to proposal of change in site.
(iii) Pass a money decree of Rs.7,74,038/- being the loss of profitability/ turnover for prolongation of the contract from 13.12.2002 to 17.12.2003 due to change in site.
(iii) Pass a money decree of Rs.7,73,473/- being the loss of profitability/ turnover for prolongation of the contract from 13.12.2002 to 17.12.2003 due to change in site.
(iv) Pass a money decree of Rs.34,94,068/- being the loss of profit due to breach committed by the respondent for the portion of the work not allowed to be completed.
(iv) Pass a money decree of Rs.34,85,227/- being the loss of profit due to breach committed by the respondent for the portion of the work not allowed to be completed
(v) Pass a money decree of Rs. Rs.24,61,544.35/- being the Head Office overhead and profit for prolongation of the contract beyond the stipulated date.
(v) Pass a money decree of Rs. 24,59,745/- being the Head Office overhead and profit for prolongation of the contract beyond the stipulated date.
(vi) Pass a money decree of Rs.36,92,316.76/- being the site office overheads due to prolongation of the contract beyond the stipulated date.
(vi) Pass a money decree of Rs.36,89,617.13/- being the site office
overheads due to prolongation of the contract beyond the stipulated date.
(vii) Pass a money decree of Rs.2,40,353/- being the cost due to rise in market in prolonged period of contract after the stipulated date over and above 10CC/escalation.
(vii) Pass a money decree of Rs.4,20,150.40/- being the cost due to
rise in market in prolonged period of contract after the stipulated date over and above 10CC/escalation.
(viii) Pass a money decree of Rs.1,50,141/- being the loss suffered on account of obtaining bank guarantee but the same was of no use.
(viii) Pass a money decree of Rs. 1,49,878/- being the loss suffered
on account of obtaining bank guarantee but the same was of no use.
(ix) Pass a money decree of Rs.7,23,589/- (work done amount Rs.6,14,568/- and Rs.1.09,021/- on account of 10CC upto 28.04.2004) being the balance payment of the work done.
(ix) Pass a money decree of Rs.2,52,274/- being the balance payment of the work done.
(x) Pass a money decree of Rs.25,756/- being the bank charges due to extension of bank guarantee in the prolonged period of contract
(x) Pass a money decree of Rs.25,756/- being the bank charges due to extension of bank guarantee in the prolonged period of contract
(xi) Pass a money decree of Rs.2.00 lacs being the Security Deposit/Bank guarantee illegally encashed by the department
(xi) Pass a money decree of Rs.2.00 lacs being the Security Deposit/Bank guarantee illegally encashed by the department
(xii) Grant interest@ 18%p.a. on the delayed release of payments
(xii) Grant interest@ 18%p.a. on the delayed release of payments
(xiii) Pass a money decree of Rs.51,633.57/- being the loss due to non-execution of any work even though claimant mobilized their resources at site of work i.e. maintaining staff from 29.04.2002 to 27.07.2002.
(xiii) Pass a money decree of Rs.52,466.25/- being the loss due to non-execution of any work even though claimant mobilized their resources at site of work i.e. maintaining staff from 29.04.2002 to 27.07.2002.
(xiv) Pass a money decree of Rs.4,51,575/- being the idle charges towards maintaining machinery T&P from 29.04.2002 to 27.07.2002.
(xiv) Pass a money decree of Rs.6,29,595/- being the idle charges towards maintaining machinery T&P from 29.04.2002 to 27.07.2002
(xv) Declare that the act of DDA in removing Mr.Ajay Kalra from the approved list of Contractors is illegal and arbitrary and therefore the order dated 3.08.2005 is quashed
(xv) Declare that the act of DDA in removing Mr.Ajay Kalra from the approved list of Contractors is illegal and arbitrary and therefore the order dated 3.08.2005 is quashed and a sum of Rs. 70,00,000/- (estimated) be awarded as damages in favour of plaintiff for illegally and arbitrarily removing plaintiff from the approved list of contractors vide order dated 3.08.2005.
(xvi) Declare that the order dated 23.11.2006 of the defendants in rescinding the contract of the plaintiff is illegal and arbitrary and therefore is liable to be quashed and the plaintiff is entitled to damages for the said illegal and arbitrary rescission of contract.
(xvi) Declare that the order dated 23.11.2006 of the defendants in
rescinding the contract of the plaintiff is illegal and arbitrary
and therefore is liable to be quashed and the plaintiff isentitled to damages for the said illegal and arbitrary rescissionof contract.
(xvii) Grant interest @ 18% on all the claims as enumerated in para no.38 of the plaint from the date of filing of suit till the date of payment
(xvii) Pass a money decree of Rs. 50,00,000/- (estimated) as damages for loss of goodwill due to illegal and arbitrary acts of DDA and its officers including the illegal recission of contract vide order dated 23.11.2006.
(xviii) Award costs of the suit in favour of the plaintiff and against the defendants.
(xviii) Grant interest @ 18% on all the claims as enumerated in para no.38 of the plaint from the date of filing of suit till the date of
Payment.
(xix) pass any other or further order(s) which this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.
(xix) Award costs of the suit in favour of the plaintiff and against the defendants.

52. The defendant in the Written Statement took a preliminary objection that the suit is based on concealment and suppression ofmaterial facts, which amounts to an abuse of the process of the Court.Further, there is no cause of action disclosed by the plaintiff and the suit is liable to be rejected. Moreover, the suit has been wrongly valued for the purpose of Court fees and is insufficiently stamped.
53. On merits, it is asserted that the site in question belonged to DDA and was free from encroachment and litigations. The site was handed over to the plaintiff on 27.04.2002 through site order book; noting made to this effect at Serial No. 1. However, the plaintiff failed to mobilize the resources at the start of the Contract as the essential equipment such as Vibrator needle, Surface vibrator. Machine for rubbing,Steel shuttering plates. Steel Props, Scaffolding pipes with cup locks, column steelplinth beam footing shuttering were not there at the Site.
54. It is further asserted that the soil testing was conducted twice, once by M/s. Magma Soil & Foundation Pvt. Ltd. and again by M/s. Cengers Geotechnics Pvt. Ltd. In addition to this, all bidders were suitably required through Special Condition No. 6 of the NIT to satisfy themselves about the characteristics of the soil at site through their own soil investigation before submitting the Tender and no claims due to the variation in the soil data were to be entertained at a later stage. The plaintiff was required to familiarize himself of the site and then only bid.Thus, it is the plaintiff who failed to perform its obligations.
55. It was claimed that the work for laying of services such as water supply, sewerage, SW drain etc. were usually taken up after the completion of the structure. It was denied that the defendant since inception of the contract failed to honour its fundamental reciprocal obligations under the Contract.In fact, defendant diligently and earnestly performed its obligations, which is inter alia as under:
Stipulated date of start of the work
as per agreement was 29.04.2002
layout plan handed over 29.04.02,17.05.02,17.12.02
architectural drawings handed over 29.04.02
structural drawings handed over 01-08-02, 28-08-02, 05-10-02, 18-05-04

56. It is submitted that the layout and the drawings were handed over to the plaintiff as and when required, as per schedule.It is denied that the entire Site was located in localized back-filled ditches as plaintiff himself stated in his Letter dated 03.10.2003 that the work could be resumed with the readjustment of a few blocks within the Site itself. Thus, it is denied that the alleged site was not fit for construction.
57. It is explained that Revised Layout Plan for construction of 136 houses against proposed construction of 160 houses was received on 17.12.2003 and the same was handed over to the plaintiff on 17.12.2003.The Revised Layout Plan was made after making adjustment within the existing site itself. As there were some ditches filled with malba in the alignment of some of the blocks, at plaintiff’s instance, vide letter dated 13.12.2002, he was informed that a proposal for alternative site was under consideration which was duly recorded in the Hindrance Register. The Revised Layout Plan was issued on 17.12.2003 and structural drawings good for construction, were issued on 05.04.2004 and 18.05.2004.
58. Furthermore, as per the terms of the contract, plaintiff was not entitled to any compensation or damages in the event the site was not available for any reason as the Agreement only provided for modification of the program of construction. It is submitted that the defendants had repeatedly made it clear, including by letter dated 03-07-04, thatplaintiffwas not entitledfor anyclaims/ compensation on account ofthe site. Despitethe clarification. Plaintiff at no stage requested for closure/termination of theAgreement.For the first time, he sought closure of the Agreement on 30.01.2006 and 13.02.2006. It is denied that the plaintiff had incurred any expenditure as alleged.
59. The defendanthad asserted that the plaintiff as per the provision of Clause 19D of the Agreement, was required to submit by the 4th and 19th of every month to the Engineer-in-Charge a statement in respect of second half of the preceding month. However, no such statement was ever submitted.
60. It is submitted that Clause 19G of the Agreement clearly provided that construction of labour huts near the workplace was to be avoided. The prior approval of the Engineer in Charge was required to beobtained by Plaintiff by submitting details on the layout planwhere heproposed to construct site office, labour huts, steel yards. No such approval was ever obtained.

61. Further, Clause 10CC makes provision for the compensation for only in the increase in prices of material and wages of labour required for execution of the work during stipulated period of the contract including such period for which the contract is validly extended. As per the provisions of the Agreement, the plaintiff is not entitled to compensation in any other circumstance.
62. Moreover, it has been asserted that the plaintiff would not be entitled to any compensation for prolongation of the Contract. The falsity of the claims of the plaintiff can be evinced from its two Letters dated 06.05.2002 and 23.06.2004 where the plaintiff had raised claims by varying idling of the mobilized resources, despite the fact that no work had taken place between that period. The differences in the claims have been produced below:
a. The no. of concrete mixers has been indicated as two in the letter dated 06-05-02 whereas the same has been raised to four in the letter dated 23-06-04. Only one concrete mixer would have been sufficient as design mix for which weigh batching plant was to be installed. The same was never installed by Plaintiff.
b. As per letter dated 06-05-02 mentions vibrator needle two in Nos. and surface vibrator one in no. whereas in letter dated 23-06-04 the same has been stated as 4 in nos. The work was only at the excavation stage and these were not even required much less requisitioned.
c. Similarly the claim made for submersible pump does not hold ground as permission for sinking of the tubewell is granted by the DC, Revenue & no such permission was obtained.
d. The allegedly false claims made regarding making arrangements for Steel shuttering plates. Steel pipes. Scaffolding pipes with cuplock are also baseless as the same were required at a later stage.
e. The work after the rescission of the contract was awarded to another agency. No building material such as bricks, stone aggregate or coarse sand was available otherwise it would have been mentioned in the NIT for the balance work to be carried out at the risk & cost of Plaintiff.
63. It is further asserted that the plaintiff was engaged in pilferage of grinded soft rock at the site and was actively involved in illegal mining with a stone crushing machine installed at Site. The work was stopped w.e.f. 9.7.2004 as the matter was under investigation and status quo had to be maintained so that evidence could be obtained. Therefore, the plaintiff was asked to renew the Bank Guarantees, which it tried to avoid, and thus the DDA had to write a letter to the Bank to encash the same.
64. It is claimed thatthe findings of the enquiry conducted by the Vigilance Cell also corroborated the fact that plaintiff was a party to the ongoing illegal mining and pilferage of grinded soft rock. Consequently, the plaintiffwas removed from the panel of the Approved List of Contractors by the Contractors Registration Board (CRB) vide Office Order dated 03.08.2005 issued by Secretary, CRB due to his own illegal activities.
65. The request of the plaintiff vide letter dated 15.09.2004 to transfer the cement to some other works so that losses could be mitigated, was conceded and accordingly, the requisite cement was transferred to other Works and the balance was made NIL. Despite the balance being NIL, the plaintiff vide Letter dated 30.01.2006,requested the foreclosure of the Agreement and clear his pending dues/claims.It is evident that the plaintiff sought closure of the Contract to avoid his liability which was not accepted by the defendant.
66. It is reiterated that the plaintiff was involved in the illegal mining and grinding of soft rock resulting in him getting blacklisted from the Approved List of Contractors. Therefore, Clause 3(a) of the Agreement was invoked, and the Contract was terminated. Along with the Termination, the security deposit was forfeited and the balance work was got completed at plaintiff’s risk and cost as per the Contract.
67. It is further asserted that the provision of joint measurement is to ensure that the parties agree on the record of measurements for the balance work and physical verification of balance stipulated material to rule out any possibility of the dispute at a later stage. Accordingly, defendant vide letter dated 01.12.2006 called upon plaintiff to be present at the site on 04.12.2006 and 05.12.2006. The defendant vide Letter dated 06.12.2006 informed the plaintiff that neither plaintiff nor his authorized representative was present though Engineer in Charge attended the site on the scheduled date for joint measurement. The physical verification of the balance quantity of steel was to be done by the defendants for which, it had to be weighed. It was asserted that updated measurements together with material lying at the site of the work were recorded and conveyed throughLetter dated 23.02.2007. The defendant has acted in accordance with the provisions of the Agreement. The recording of measurements and physical verification of balance quantity of stipulated material and conveying the same to the plaintiff was done lawfully and properly and is binding on both the parties.
68. The defendant has further asserted that in the 11th Meeting of the Work Advisory Board held on 20.10.2006, after due deliberation and discussion,it unanimously decidedto rescind the Contract and get the work executed at the risk and cost of original Agency. The Board directed the CE to convey the decision to the plaintiff. The rescission was done due to the acts, omissions and breaches of the plaintiff.
69. The defendant has claimed that the plaintiff was not entitled to any of the claims that have been raised in the two suits and both the suits are liable to be dismissed.

Counter Claim (COMM) 130/2017 in CS (COMM) 249/2017
70. It was asserted that the cause of action specifically arose in favour of counter-claimant on 14.03.2007 when the tender was opened at the risk and cost of plaintiff and on 01.06.2007 when the said tender was awarded to M/s. Shree Durga Construction Co. The recovery amount has been determined based on the differential rate quoted by Shree Durga Construction Co. The defendant-DDA in their counter-claim has sought recovery of Rs.1,13,90,588/- along with the pendente lite and future interest under Clause 3 of the Agreement.
Counter Caim (COMM) 129/2017 in CS (COMM) 250/2017
71. Similarly, the defendant-DDA in the counter-claim filed in the suit sought recovery of Rs.1,12,32,213/-for the completion of work at the site by M/s. Shree Durga Construction Co.
72. Identical issues were framedin both the suits as vide Order dated 22.12.2010:-

CS (COMM)249/2017
(i) Whether the contract dated 19th April, 2002 was validly terminated? OPP
(ii) Whether the plaintiff is entitled to the claims set out in paragraph 38 of the plaint? if so to what extent? OPP
(iii) Whether the plaintiff is entitled to pendent-e-lite and future interest? If so, the rate and the period for which it is payable? OPP
(iv) Reliefs.
CS(COMM) 250/2017
(i) Whether the contract dated 19th April, 2002 was validly terminated.? OPP
(ii) Whether the plaintiff is entitled to the claims set out in paragraph 38 of the plaint? if so to what extent? OPP
(iii) Whether the plaintiff is entitled to pendent-e-lite and future interest? If so, the rate and the period for which it is payable? OPP

(iv) Reliefs.

CC (COMM) 130/2017
(i) Whether the counter claimant was justified in getting the remaining work, envisaged under the agreement dated 19th April, 2002, completed through another contractor? OPP

(ii) Whether the counter claimant is entitled to a recovery of a sum of Rs. 1,13,90,588/- in terms of Clause 3 of the agreement dated 19th April, 2002? OPP

(iii) Whether the counter claimant is entitled to interest? If so the rate and the period for which it is payable? OPP

(iv) Reliefs.
CC COMM. 129/2017
(i) Whether the counter claimant was justified in getting the remaining work, envisaged under the agreement dated 19th April, 2002, completed through another contractor? OPP

(ii) Whether the counter claimant is entitled to a recovery of a sum of Rs.1,12,32,213/- in terms of Clause 3 of the agreement dated 19th April, 2002? OPP

(iii) Whether the counter claimant is entitled to interest? If so the rate and the period for which it is payable? OPP

(iv) Reliefs.

73. Initially, the evidence was recorded separately for CS(COMM) 249/2017. However, from 26.02.2013, common evidence was recorded in both the suits.
74. The plaintiff adduced evidence of himself as PW-1 and tendered his evidence by way of affidavit Ex.PW1/A.
75. Defendant No. 2, the Executive Engineer of DDA, had tendered his evidence by way of affidavit Ex.DW1/A.
76. Submissions heard and the record and evidence perused.
77. It is an admitted case that DDA had invited Tenders for construction of 160 HIG Category II houses (Four storeyed) and 160 scooter garages in LIC Pocket II, Sector B, Vasant Kunj which were sub divided into two grounds i.e. internal development and construction of 80 HIG Category II houses and 80 Scooter Garages (Group I) and internal development and construction of another 80 HIG Category II houses and 80 Scooter Garages (Group II). The estimated cost of Group I was Rs.2,93,35,245/- for which the plaintiff submitted his item rate Tender for a sum of Rs.2,55,24,764/- after giving a rebate of 0.5% on the quoted rates for the Group I houses. Likewise, he quoted the item rate Tender for a sum of Rs.2,95,25,621 for which the plaintiff submitted his item rate Tender for a sum ofRs.2,56,34273/- after giving a rebate of 0.5% on the quoted rates for Group II houses it came to Rs.2,55,06,102/-.
78. The Tender for the Group I and Group II was awarded to the plaintiff by two separate letters dated 19.04.2002 and a formal Agreement dated 26.04.2002 was executed in respect of the two Contracts. As per the agreed terms the stipulated date for commencement was 29.04.2002 and the work was to be completed within 24 months.

In CS(COMM) 249/2017 & CS(COMM) 249/2017:
Issue No.1:“Whether the contract dated 19th April, 2002 was validly terminated?” OPP
79. The plaintiff has deposed that on being given the contract, he immediately mobilized his resources including men, material and machinery and reached the site on 28.04.2002 about which he duly notified the defendants vide letter dated 06.05.2002 ExP6.The layout plan, structural drawings were handed over to the plaintiff on 29.04.2002 but the same were recalled on the same day due to deficiencies. Thereafter, another layout plan was issued on 17.05.2002 and only one structural drawing was given on 01.08.2002.Even the Hindrance Register Ex.P8 records the non-availability of Layout Plan on 29.04.2002 which was cleared on 17.05.2002.

Breaches committed by DDA:
80. The plaintiff has deposed that the execution of the Contract was dependent on the reciprocal obligations to be fulfilled by DDA for timely completion of the Contract. The detailed drawings, structural as well as architectural, were mandatorily required to be provided. The plaintiff started the earth work but soon found that the site was not conducive for construction as most of the blocks were located on localized backfilled ditches and the strata was filled up or erratic in nature.As a result, the Foundation bed/ground was not firm. Consequently, the plaintiff who had already mobilized his men, material and machinery as per the Schedule requirement of the work had to keep his labour, machinery and establishment idle at site, which resulted in losses.
81. The plaintiff has further explained in his testimony that there was a marked difference in the levels of adjoining blocks and therefore the belated structural drawings provided to the plaintiff were of no use.In all the blocks expansion joints were to be provided and it was not clear from the said Drawing as to how the cross walls and plinth Beam could be provided as there was a level difference between the adjoining Blocks. The plaintiff wrote aLetter dated 08.08.2002 ExP7 seeking necessary clarifications regarding the same. The request for clarification was admittedly recorded in the Hindrance Register of DDA on 21.09.2002 Ex P8 as well. The demand for revised Drawings was reiterated by the plaintiff vide letter dated 04.10.2002, Ex. P 9.
82. The excavation work was commenced immediately thereafter as is mentioned in the Site Order Book Ex. P11 wherein staff of DDA have also noticed that surplus excavated material is being disposed of as per the directions. Similarly, observations in regard to the excavation work in progress in Block A3 and B3, was noticed on 20.06.2002 and the plaintiff was advised to arrange proper barricading to avoid any mishappening. The noting of the Inspecting Staff on 13.12.2002 reflects that because of the soil condition the Contractor had been told not to execute any work till further Order. The work was stopped completely from 13.12.2002.
83. Thereafter, DDA initiated a fresh soil investigation and the site was also inspected by the Senior Officers including CE (CDO) and CE (SWZ) of DDA. SWD-4Executive Engineer vide his letter dated 13.12.2002 Ex.P10 directed the plaintiff not to execute any work at the already allotted site as the proposal for alternative site was being considered by the Competent Authority in Vasant Kunj. This is not denied or challenged by the defendant.
84. The evidence and the admitted documents, therefore proved that immediately after the commencement of work, the progress became abysmally lethargic because of the initial hic-ups due to non availability of Structural Drawings etc., and thereafter due tosoil strata condition which was acknowledged by DDA. The work was directed to be stopped completelyby the plaintiff within eight months vide letter dated 13.12.2002 Ex.P10 as alternative site was being explored.
85. Pertinently, the plaintiff received no further information regarding the alternative site from the defendants for several months.Subsequently, in Office Noting dated 13.10.2003 Ex.PW1/10, while considering the proposal for construction of 160 houses, it was proposed that if the adjoining area which has been earlier marked for Green can be interchanged with this area where the houses were previously marked while ensuring that the Green is not reduced, the scope of works is likely to get reduced to 112 to 120 houses against the sanctioned 160 houses. A request was made to modify the Lay out Plan accordingly, by the Chief Architect. The proposal was considered and eventually it was decided that the number of houses be reduced to 136 and the Lay out Plans be accordingly prepared vas was informed to the plaintiffthrough letter dated 20.01.03 Ex P13.
86. The revised Lay out Plan with the flats reduced to 136 was supplied on 17.12.2003 i.e. after almost one year, when the work recommenced.The factum of DDA providing an unconducive site is further corroborated from the admitted Soil Investigation Report by Cengrs Geotechnica Pvt Ltd. dated 31.12.2003 Ex P64 which records that the ground level varies over different parts of the Site and several pockets the Site, the soil contains loose materials that needs to be removed.It is, therefore, proved that the work remained stopped for one year, from 13.12.2002 till 17.12.2003, due to the DDA’s delay in finalizing an alternative site or reducing the scope of the work based on the soil conditions.

Allegations against the plaintiff:
87. It may be noted at the outset that there were infact, two breaches noted by the DDA; one was of grinding and pilferage of soft rock and the other was of illegal mining. While the Work was stopped on the allegations of grinding and pilferage of soft rock, the removal of the contractor from the approved List of contractors on the ground of illegal mining. However, the action of termination of Contract was taken on the ground of grinding and pilferage of soft rock; though significantly both the grounds could not be substantiated. The chain of events in regard to these two alleged breaches and two penal consequences of termination of contract and removal from the list of Contractors are analysed below.

Pilferage of grinded rock:
88. The revised structural drawings were provided on 18.05.2004 and the work had barely re-commenced at the site and continued for two months when DDA sent a letter dated 16.07.2004 ExP17 to the plaintiff claiming that allegedlythere was pilferage of grinded soft rock (fine aggregate) from the site and the Departmental Enquiry is in progress. He was requested to stop the work and to maintain status quo till further orders. He was also requested to carry out joint measurements of the work with the field staff. The allegation against the plaintiff thus, was of pilferage of grinded soft rock (fine aggregate).
89. The plaintiff responded through his letter dated 03.08.2004 Ex.P18 stating that stoppage of work would adversely affect their finances and also stated that joint measurements for most of the works done, had already been recorded and they would join the DDA for the remaining measurements. Since no further intimation was forthcoming after the stoppage of work, the plaintiff again wrote theletter dated 15.09.2004 Ex.P19 to the Department.
90. As the defendant had allegedly noticed pilferage of grinded soft rock (fine aggregate), the investigationwas carried out by SE (Vig.)in regard to alleged soft grinding of stone.The Vigilance Department found three DDA Officers working on site viz. JE, AE and Ex.E responsible who were suspended and after holding Disciplinary Inquiry, major penalty was imposed upon them. The Vigilance Committee had also recorded that there was perhaps the involvement of the Contractor i.e. the plaintiff in this soft stone grinding.
91. After, the Vigilance was concluded and with the approval of CVC major penalty Charge Sheet was issued to JE, AE and EE, the Superintendent Engineer (Vig) vide letter dated 03.06.05 Ex.P-48 recommended that the action as deemed fit, may be initiated against the Agency and the matter may be referred to CRB.
92. The complaint allegedly received by the defendant which had mobilized the department to initiate the enquiry and the final report of the Vigilance Department holding the plaintiffresponsible, has not been produced on record. Finally, the defendant alleged some involvement of the plaintiff in soft stone grinding and pilferage, but neither the Vigilance Committee concluded positively about the alleged role of plaintiff in being involved in soft stone grinding or the pilferage nor any evidence whatsoever to corroborate the evidence has been led by the defendant in the present suit. The allegations against the plaintiff in this regard remained in the realm of suspicion and have not been proved by the defendant.

Illegal Mining: removal from the List of Contractors
93. While the work had been stopped on the allegations of Stone grinding made against the plaintiff, Chief Engineer (Z) gave a Report vide letter No. PS/CE(SWZ)/2004/Conf./2245 dated 16.09.04 for taking Disciplinary action against the Agency in regard to its involvement in the illegal mining at the Work site. (This Report dated16.09.04 has not been produced by the defendant but finds mention in the Termination Letter dated 03.08.05). Pertinently, till now the allegations were of soft grinding of stone and recommendation for action against the plaintiff was on this ground but interestingly the allegations got transformed to that of illegal mining.
94. The matter was then referred to Contractors Registration Board (CRB) which then served the plaintiff with a Show Cause Notice dated 22.09.2004 Ex P20wherein it was claimed that plaintiff was actively involved in illegal miningand to Show Cause why disciplinary action be not taken against it within 15 days.
95. The plaintiff in response to the Show Cause Notice, sought all the documents which formed the basis of the allegations in order to give a detailed reply by his Letter dated 01.10.2004 Ex P21. He then gave a detailed Reply 06.10.2004 Ex P22, vehemently denying presence of stone crushing machine or of illegal mining at the site. It was claimed that the site was constantly inspected by DDA Officers as well as Vigilance Cell of DDA and at no point of time any such activity was ever found to be carried out.
96. He further explained in the Reply that because of the revision of Lay out Plans, location of some blocks had to be shifted. Some temporary structures like water tanks, steel yards, etc. were also shifted from one location to another. All excavations were carried out as were necessary for laying foundations for the buildings as per revised Plans and as directed by the Competent Authority. The excavated earth, rock and malba were dumped at the demarcated sites by DDA during the period from July to September, 2004.
97. The case in its entirety along with the response of the plaintiff dated 02.06.04,was placed before Contractors Registration Board (CRB) in its Meeting held on 03.06.05. The Minutes of this Meeting Ex.P41 recorded that CE(SWZ)DDA vide Letter dated 16.09.04 reported illegal mining and also three officers of DDA namely JE,AE and EE were placed under suspensionon account of illegal mining.It was further recorded that the EM recommended Blacklisting of the plaintiff vide his Letter dated 20.07.04 which was reiterated by the CE (SWZ) vide Letter dated 29.10.04.Furthermore, the CE(SWZ) was also advised by the CRB in its Meeting held on 29.11.04 to pursue the matter with the Vigilance Deptt about the final decision, but the same was not forthcoming.
98. The Vigilance Department was finally able to conclude in first week of June,2005 that along with the officers of DDA, plaintiff was also involved in illegal mining at site. The Departmental Enquiry was initiated against the officers and all the records were forwarded to the Vigilance Department.
99. CRB in the Meeting held on 03.06.05 further recorded that SE (Vig.) had finally arrived at a conclusion that there was illegal mining going on at the site of work in which not only the Field Engineers i.e JE, AE and EE (who all had been put under suspension) but also the Contractor were associated. Since the allegations made against the plaintiff were found to be of serious nature and prima facie appeared to be true, it decided to remove the Plaintiff from the DDA’s approved list of contractors.
100. Thereafter, the plaintiff was removed fromthe approved list of contractors vide Office Order dated 03.08.2005 Ex. P24 issued by Secretary, CRB, DDA,which records that the CRB had duly considered the Report received from CE (SWZ) vide Letter dated 16.09.2004 for taking disciplinary action against the Agency in regard to its involvement in the illegal mining at the site of work, in its Meeting held on 03.06.2005 and decided to remove the plaintiff from the DDA’s approved List of Contractors.
101. The Office Order dated 03.08.2005 Ex. P24 was issued by CRB which gave the reason for removal from the approved list of contractors as illegal mining taking place at Site, even though there was no such conclusive finding by the Vigilance Department. The relevant part of the Office Order reads as under:
“F4 (8) 80/19/93/1 (BNR)/SECY/538
OFFICE ORDER NO 57/2005
Whereas a Reportwas received from CE (SWZ) vide letter dated No. PS/CE(SWZ)/2004/conf./2245dated 16.09.2004 for taking disciplinary action against the agency in regard to its involvement in the illegal mining at the site of work.

Whereas in view of above a show cause notice was served to the agency vide office this letter dated F4(8)80/19/93/(B&R)/Secy/701 dated 22.09.2004 and reply of which was received vide agency’s letters dated 01.10.2004 & 06.10.2004 respectively.

Whereas the said reply of the agency was sent to CE (SWZ) for his specific comments and his response has been received vide his office letter No. PS/CE(SWZ)/05/confd/1547 dated 02.06.2005.

Whereas the case in its entirety was placed before the CRB in its meeting held on 03.06.2005.

Now after careful consideration, the CRB has decided to remove the above referred agency i.e. Shri AJAY KALRA, B-7/13/2, Safdarjung Enclave, New Delhi – 110029 from the DDA’s approved list of contractors.

No tender paper shall be issued and no work shall be awarded to Shri AJAY KALRA from the date of issue of this o