Delhi High Court

Contractor’s failure to prove actual deductions through statement of accounts precludes recovery of alleged retention money.

M/S Vvs Construction Pvt. Ltd. vs Indian Youth Centre Trust & Ors.

Delhi High CourtJUDGMENT: July 23, 20262 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The Appellant (Contractor) entered into an "Article of Agreement" dated 02.01.2007 with the Respondents for the construction of a dormitory building at Chanakyapuri

Source reference: p.2

Due to delays in obtaining statutory approvals, work commenced late, and the Respondents agreed to a 35% escalation of the original contract value of ₹1.94 Crores

Source reference: p.5, 9

The Appellant claimed that following a supplementary meeting on 08.05.2010, the total project value increased to ₹5.13 Crores due to non-tendered items

Source reference: p.10

The Appellant filed a suit for recovery of ₹55,86,883/-, asserting this was the 10% retention/security money withheld by the Respondents

Source reference: p.4

The Trial Court (ADJ) partly decreed the suit for ₹15,52,000/- (calculated as 8% of the original contract value) plus interest, prompting this appeal for the remainder

Source reference: p.1, 10
02

Issues

1. Whether the Appellant proved the exact quantum of retention money held by the Respondents beyond the amount already decreed by the Trial Court.

Source reference: p.19 / para. 69

2. Whether the Appellant was entitled to the balance bill amount of ₹10,25,193/- in the absence of specific documentary evidence of unpaid bills.

Source reference: p.24 / para. 84, 86
03

Law Applied

Clause 10 of the Article of Agreement stipulated that 92% of running bills were payable, while 8% was to be withheld. Upon completion, 50% of that withheld amount (i.e., 4% of the total value) was to be retained for twelve months as "retention money" to safeguard against defects

Source reference: p.15-16

The court further applied the principle that a plaintiff must prove their specific claim through a Statement of Accounts or primary documents (bills/receipts), and mere assertions in a legal notice do not constitute proof of exact liability

Source reference: p.21, 23
04

Reasoning

The High Court scrutinized the Appellant's failure to provide a mathematical or documentary basis for the claimed sum of ₹41,00,776/- as retention money

Source reference: p.22

While the project value had admittedly increased, the Appellant failed to produce a Statement of Account reflecting the total amount billed versus total payments received to isolate the exact retention figure

Source reference: p.21

The Court found a contradiction in the Appellant's claim: if 4% of the final verified bill (₹5.12 Crores) was to be kept as retention money, the figure would be approximately ₹20.52 lakhs, yet the Appellant claimed over ₹41 lakhs without explanation

Source reference: p.22

Regarding the claim for unpaid balance bills (₹10.25 lakhs), the court noted that the Appellant failed to exhibit the specific bills that remained unpaid

Source reference: p.24

Consequently, the court held that even though the Respondents' internal disputes did not absolve them of liability, the Appellant did not discharge the burden of proving the specific quantum of money illegally withheld

Source reference: p.23-24
05

Holding

The Court dismissed the appeal, holding that the Appellant failed to prove the quantum of money retained from the Running and Final Bills through any corresponding documents or accounting

The Court noted that the Trial Court's calculation (granting 8% of the original value) was mathematically erroneous under Clause 10 (which specified 4%), but it declined to interfere as the Respondents had not filed a cross-appeal

Source reference: p.23

The final holding affirmed the Trial Court's decree of ₹15,52,000/- with 6% interest but denied the Appellant's claim for the additional balance

Source reference: p.24
Delhi High Court

Original Court PDF

M/S Vvs Construction Pvt. Ltd.vsIndian Youth Centre Trust & Ors.

Delhi High Court · July 23, 2026

Click to open original judgment

Original judgment, available to read, download and summarize on LawLens.in

Click to open original judgment