Contractor Wins Rs 41.77 Lakh Decree Against DDA For Unpaid Construction Bill, As Delhi HC Says Six-Month DDA Act Limit Doesn’t Apply To This Contract Claim

Jai Singh, a construction contractor, sued the Delhi Development Authority (DDA) for Rs. 2,28,68,176, with interest, arising from a contract to construct 176 MIG houses.

The work, scheduled for completion by 24 June 1994, was completed on 22 February 1997; DDA granted an extension without imposing compensation under Clause 2 and made payments under Clause 10CC.

The plaintiff claimed, among other amounts, Rs. 41,77,809 under a final bill and compensation for delay, escalation, and other work.

DDA denied liability and contended that the suit was barred by Section 53B of the Delhi Development Act, 1957, and that the bill could not be finalised until rectification work was completed.

The Court framed issues concerning Section 53B, court fees, and the plaintiff’s entitlement to the amounts claimed.

Section 53B(1) of the Delhi Development Act requires prior written notice before a suit against DDA for acts done or purportedly done under the Act, and Section 53B(2) prescribes a six-month period for instituting such suits; the special period does not govern a claim founded on contractual obligations rather than an act under the Act.

Where Section 53B does not apply, the general limitation period under the Limitation Act, 1963 governs.

Under Section 73 of the Indian Contract Act, 1872, damages for breach require proof of resulting loss; unsupported estimates do not establish entitlement.

The Court relied on Unibros v. All India Radio for the requirement of credible evidence to prove loss of profit, and on Union of India v. Om Construction Co., ECO Green Buildtech (P) Ltd. v. Vikartan Infrastructure (P) Ltd., Kailash Nath Associates v. DDA and Fateh Chand v. Balkishan Dass in assessing claims for damages and loss.

The contract’s Clause 10CC governed price escalation, while Clause 25B provided for the Superintending Engineer’s decision on reductions for substandard work.

The Court held that the claims arose from alleged non-performance of contractual obligations, not from an act done under the Delhi Development Act; Section 53B therefore did not apply, and the suit was within the general three-year limitation period.

It found the court fee sufficient because DDA produced no material showing any deficiency.

As to the final bill, the Court accepted the detailed bill submitted on 10 March 1999, rejected DDA’s unsupported characterisation of it as merely an abstract, and found that DDA had not substantiated its asserted rectification costs or shown payment to the replacement agency.

The completion certificate recorded physical completion, and DDA’s general denial did not establish a basis to withhold the bill indefinitely.

The remaining claims failed for reasons including lack of proof of actual expenditure or loss, inadequate particulars or calculations, the plaintiff’s undertaking not to claim extra amounts due to delay, or failure to demonstrate that deductions were unauthorised.

It partly decreed the suit for Rs. 41,77,809, representing the final bill, with interest at 9% per annum from 10 March 1999 until actual payment.

The remaining claims were rejected, and the parties were directed to bear their own costs.