The Delhi High Court on 22nd March, 2018 laid down guidelines for making the payments of the contractors by the authorities as they are waited endlessly due to non-availability of the funds.
In the appeal filed in case of Contractors vs. New Delhi Municipal Corporation & East Delhi Municipal Corporation where disputes primarily concerned with non-payment of dues to Contractors, Justice Pratibha M. Singh observed that General Clauses of Contract are unreasonable and unfair. Clause 9 of the Contract provides that Contractors would be paid depending upon the availability of funds leaving no remedy for them as the authorities can delay it indefinitely which would make it illegal and contrary to lay.
The court further observed that as per Section 46 of The Contract Act, 1872 if the contract does not have time for its performance, then it has to be performed within reasonable time. Corporation being an instrument of the state, such contracts would also be opposed to public policy under Section 23.
The Court issued the following guidelines:
- Along with the work order, all the General Clauses of Contract should be attached.
- After assigning the work order, a periodic inspection should be done by the Engineer-in-Charge and if possible, photographs of the works at different stages should be taken and maintained on the record
- Duly Certified Interim bills and Final bills should be submitted by the Contractors of the work carried out by them with photographs.
- The Engineer-in-Charge should examine the bills and pass it accordingly.
- The payment schedule for 6 months for payment of bills under Rs. 5 lakhs and 9 months for payment of bills exceeding Rs. 5 lakhs should be adhered. Delay in such payment would levy interest on it.
- For refund of Security deposit and Earnest money deposit, the contractor should comply with conditions mentioned in Clause 17 which states Security deposit shall be refunded after one year from the date of completion of work and Clause 45 which prohibits refund of security deposit after getting clearance of Labour Officer.
- In suits relating to recovery of dues of Contractor, all the evidence should be produced including the General Clauses of Contract, Periodic inspection report, Final bills submitted and passed, photographs. All these documents should be maintained digitally as it makes it transparent and easy accessible for the officials and for the production in the court for future litigation.
Courtesy/By: Bhupendra Yadav
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28 Sep 2017
