State Of Ap Rep. By Dist. ... vs Suri Ankaiah R/O Anathsagaram M, ...
2023 Latest Caselaw 5534 AP

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     THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO

                    APPEAL SUIT NO. 95 OF 2007

JUDGMENT: -

1)      The Appeal, under Section 96 of the Code of Civil

Procedure      [for   short    'the       C.P.C.'],   is   filed   by     the

State     challenging    the    Decree        and     Judgment,         dated

12.12.2005, in O.S. No. 12 of 2003 passed by the learned

Senior Civil Judge, Kovur [for short 'the trial Court']. The

Respondent herein is the Plaintiff in the said Suit.

2) The Respondent/Plaintiff filed the Suit praying for

passing of a decree directing the Appellants/Defendants to

deposit the Suit amount of Rs.5,53,003/- with subsequent

interest on Rs.2,80,000/- @ 12.5% per annum from the date

of Suit till the date of decree and thereafter @ 6% per annum

till realization.

3) Both the parties in the Appeal will be referred to as they

are arrayed before the trial Court.

4) The brief averments of the plaint, in O.S. No.12 of 2003,

are as under:

(i) The Plaintiff is a Contractor carrying on the works

relating to Irrigation Department in the State of Andhra

Pradesh. The 1st Defendant called for tenders for the

work 'Formation of Mini Percolation Tank across

Devaracheruvu Vagu near Yeguvapalli Village of

Ananthasagaram Mandal, Nellore District', for an

estimated value of Rs.3,71,731/-. The tender submitted

by the Plaintiff was accepted by the Defendants on

25.02.1994 and, accordingly, an agreement was entered

into between the Plaintiff and the 2nd Defendant on

24.09.1994.

(ii) Upon receiving instructions from the 2nd Defendant, the

Plaintiff commenced the work and completed to an

extent of 80% by the end of March, 1995, which was

recorded in the measurements book. In the

interregnum, the 2nd Defendant asked the Plaintiff to

stop further work and, accordingly, the work was

stopped. When the Plaintiff sought for the amount due

for the work done and when his subsequent repeated

requests were unheeded by the Defendants, the Plaintiff

got issued a notice, dated 18.02.2002, to the

Defendants, which was though received by the

Defendants, no reply was given. Hence, the Suit came to

be filed as stated supra.

5) The brief averments of the written statement, filed by

the 2nd Defendant, which was adopted by the 1st Defendant,

are as under: -

(i) The Defendants, while admitting execution of an

Agreement between the Plaintiff and the Defendants and

allotment of work to the Plaintiff, pleaded that the

Plaintiff executed the work only to an extent of 70%,

which comes to Rs.2,60,000/- by the month of March

1995. The Defendants also admitted that, pursuance to

the instructions of Superintending Engineer Special

Irrigation Circle, Gudur, dated 06.03.1995, the

execution of work was stopped. The Defendants further

admitted that, as the contractors were pressing for

payment of work bills, the 2nd Defendant addressed a

letter to the Chief Engineer, Minor Irrigation,

Hyderabad, vide letter, dated 15.11.2002, to release an

amount of Rs.5,60,000/- for arranging payment to

them, which was in process. However, the Defendants

denied that the Plaintiff is entitled for the total value of

the work done but submitted that the Plaintiff is eligible

for the amount subject to effecting recovery of

Seigniorage Charges, Cess, Income Tax, Sale Tax,

Turnover Tax etc., as per the terms of the Agreement

and Rules and, accordingly, pleaded to dismiss the Suit

with costs.

6) Based on the above pleadings, the trial Court framed

the following issues:

(i) Whether the plaintiff is entitled for the amount of Rs.5,53,003/- with interest as prayed for?

(ii) To what relief?

7) During the course of trial in the trial Court, on behalf of

the Plaintiff, PW1 was examined and Ex.A1 to Ex.A4 were

marked. On behalf of the Defendants, DW1 was examined

and Ex.B1 and Ex.B2 were marked.

8) After completion of the trial and hearing the arguments

of both sides, the trial Court Decreed the Suit vide its

Judgment, dated 12.12.2005, against which the present

appeal is preferred by the State/Defendants in the Suit

questioning the Decree and Judgment passed by the trial

Court.

9) Heard learned Government Pleader for Appeals through

physical hearing and Sri. T.G. Prasad, learned Counsel for the

Respondent/Plaintiff through virtual hearing.

10) The learned Government Pleader for Appeals would

contend that, some portion of bund of percolation tank was

breached and that the Government sustained loss of

Rs.60,000/- He would contend that the Contractor/Plaintiff is

not entitled to claim interest in view of Clause 60 of the

preliminary specifications to Andhra Pradesh Detailed

Standard Specifications [for short 'A.P.D.S.S.'] and he would

further contend that the Appeal may be allowed.

11) Per contra, the learned Counsel for the

Respondent/Plaintiff would contend that the trial Court on

considering the entire material on record has rightly decreed

the Suit and there are no merits in the present appeal

12) Having regard to the pleadings in the Suit and the

finding recorded by the trial Court and in the light of rival

contentions and submissions made on either side before this

court, the following point would arise for determination:

Whether the decree and judgment passed by the trial court needs any interference? If so, to what extent?

13) Point: The factual matrix of the case is not in dispute.

The Plaintiff was entrusted with the work of 'Formation of Mini

Percolation Tank across Devaracheruvu Vagu near Yeguvapalli

Village of Ananthasagaram Mandal, Nellore District', and the

Government invited the tenders for the aforesaid work and

the tender submitted by the Plaintiff is accepted by the

Government. The approximate value of the work is

Rs.3,71,731/-. As per the case of the Plaintiff, 80% of the

work for Rs.2,80,000/- was executed by him. As per the case

of the Appellant, the Plaintiff executed the work to an extent

of 70%, which comes to Rs.2,60,000/-. It is also an admitted

fact that, it is not the case of committing default by the

Plaintiff in executing the remaining work. It was admitted by

the Defendants that in pursuance of the instructions of

Superintendent Engineer, Irrigation Department, they

directed the Respondent/Plaintiff to stop the remaining work.

It is also admitted by the Appellant that they did not pay any

money to the Plaintiff for the work done by him, due to

shortage of funds.

14) According to the Plaintiff, he has completed the work

upto 80% entrusted to him, which comes to Rs.2,80,000/-.

According to the Defendants, the Plaintiff completed the work

upto 70%, which comes to Rs.2,60,000/-. As per the evidence

of PW1, he completed the work to an extent of 80%, which

was recorded by the concerned Engineer in the measurement

book maintained by them. But, for the reasons best known to

the Defendants, they failed to produce the measurement

book. It is an admitted fact that, the Plaintiff was asked to

stop further execution of work due to some administrative

reasons. As stated supra, even though the measurement book

was available with the 2nd Defendant - Engineer, the

Defendants failed to produce the same before the trial Court.

As per the evidence of DW1 - the Deputy Executive Engineer,

the Plaintiff was not paid the amount due to him by DW1 and

DW2 for the work done. Therefore, a duty casts on the

Defendants to prove that the Plaintiff completed 70% work

only but not 80% of work. Therefore, by giving cogent

reasons, the trial Court rightly arrived at a conclusion that

the Plaintiff completed 80% of work, which comes to

Rs.2,80,000/-. I do not find any legal flaw or infirmity in the

said finding given by the trial Court.

15) The learned Counsel for the Appellant would submit

that interest of 12.5% per annum awarded by the trial Court

from the date of transaction till the date of filing of the Suit is

excessive and usurious. As stated supra, there are laches on

the part of the Government for paying due amount to the

Plaintiff. By spending huge amount, from out of his own

funds, the Plaintiff completed 80% of work, which comes to

Rs.2,80,000/-. It is not in dispute by the Defendants that, as

per their instructions the work was stopped by the Plaintiff

and the Defendants addressed a letter to that effect for

release of funds and due to shortage of funds, the

Government has not released the funds. Even though, there

are no laches on the part of the Contractor/Plaintiff, work

was stopped on the instructions given by the Defendants by

the Contractor/Plaintiff. Even, it is an admitted fact that due

to shortage of funds, the Government did not pay money in

respect of work carried out by the Contractor/Plaintiff. Action

of the Defendants/Government in not paying the amount for

the years together to the Contractor/Plaintiff for the work

already done by him, who spend huge money from out of his

own funds is not at all justifiable.

16) Even in the absence of contract, the Court can grant

interest at the current rate-of-interest as provided under

Section 3 of the Interest Act, 1978, which reads as under:

"In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period ".

17) In a decision reported in M. Rajeswar Rao & Others

Vs. Chitluri Satyam (died) & others1 and another decision

reported in Ms Surisetty Nookaratnam Vs. Saragadam

Gowri Ramalakshmi and another2, the composite High

Court of Andhra Pradesh has reduced the pre-lite interest

from 24% to 12% per annum and from 18% to 12% per

2013 S.C.C. OnLine AP 809

2013 S.C.C. OnLine AP 369

annum respectively by relying on the judgments of Hon'ble

Apex Court in Mahesh Chandra Bansal Vs. Krishna

Swaroop3 and in D.D.A. Vs. Joginer S. Monga4. In

ascertaining the rate of interest, the Courts of Law can take

judicial notice of both inflation and also fall in bank lending

rate of interest.

18) But, here in the case on hand the Plaintiff is claiming

rate of interest @ 12.5% per annum till the date of filing of

Suit and the trial Court awarded interest 6% per annum from

the date of decree till the date of realization. The Court is

empowered to grant interest for the delay payment.

Admittedly, as per the instructions of the Defendant

Government, the work was stopped by the Plaintiff. As per the

case of the Defendants, due to shortage of funds, the funds

were not released by the Government. Whatever may the

reasons, the fact remains is that the Defendants have not

(1997) 10 SCC 681

(2004) 2 SCC 297

paid the amounts covered under Ex.A1 within a specified time

period. Therefore, granting of interest @ 6% per annum from

the date of decree on the amount due to the Plaintiff herein by

the trial Court cannot be said to be exorbitant or excessive

and so also the granting of simple interest till the date of filing

of the Suit @ 12.5% per annum by the trial Court is

justifiable, because there are laches on the part of the

Defendant Government for not paying the due amount of

single paisa to the Contractor/Plaintiff for the years together.

19) The material on record reveals that the Plaintiff stopped

the work as per the instructions of the Defendants. Therefore,

absolutely, the Plaintiff is not responsible for the loss, if any,

sustained by the Government. Therefore, for the reasons

stated supra, there is nothing wrong on the part of the trial

Court for grating of interest @ 12.5% per annum from the

date of completion of work till the date of filing of the Suit on

a delay payment of Rs.2,80,000/-. The trial Court by giving

cogent reasons rightly decreed the Suit. The Judgment and

Decree passed by the trial Court is perfectly sustainable

under law. There are no grounds made out to interfere with

the Judgment and Decree passed by the trial Court.

20) In the result, the Appeal Suit is dismissed confirming

the Judgment and Decree, dated 12.12.2005, in O.S. No. 12

of 2003 on the file of the Senior Civil Judge Court, Kovur. No

order as to costs.

21) As a sequel, miscellaneous petitions, if any, pending in

the Appeal shall stand closed.

_____________________________ V.GOPALA KRISHNA RAO, J Date: 16.11.2023 Sm..

THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO

APPEAL SUIT NO. 95 OF 2007

Date: 16.11.2023

sm