Kerala High Court
M/S.Olam Exports (India) Ltd vs Suma Mammen on 9 July, 2025
RFA 677/2008 & Cross Objection 21/2023
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR
WEDNESDAY, THE 9TH DAY OF JULY 2025 / 18TH ASHADHA, 1947
RFA NO. 677 OF 2008
OS NO.364 OF 2002 OF ADDITIONAL SUBORDINATE COURT,KOLLAM
APPELLANT/DEFENDANT
M/S.OLAM EXPORTS (INDIA) LTD.
REGISTERED OFFICE AT BISHOP JEROM,, NAZAR NEW BLOCK,
IVTH FLOOR,, KOLLAM 691001, REPRESENTED BY ITS DIRECTOR,
MR. SANCHETI.
BY ADVS.
SRI.E.K.NANDAKUMAR (SR.)
SHRI.ANIL D. NAIR (SR.)
SHRI.BENNY P. THOMAS (SR.)
SHRI.K.JOHN MATHAI
SHRI.CHETHAN KRISHNA R.
RESPONDENTS/ADDL.PLAINTIFFS 2, 3 AND 4
1 SUMA MAMMEN, W/O K.C.MAMMEN,, KANDATHIL HOUSE,, KARSHAKA
ROAD, KOCHI 682016.
2 K.M.JOSEPH, S/O K.C.MAMMEN, KANDATHIL HOUSE,, KARSHAKA
ROAD, KOCHI 682016.
3 RAVI PHILIP MAMMEN
S/O K.C.MAMMEN, KANDATHIL HOUSE,, KARSHAKA ROAD,, KOCHI
682016.
BY ADVS.
SRI.ENOCH DAVID SIMON JOEL
SRI.S.SREEDEV
SRI.RONY JOSE
SMT.SUZANNE KURIAN
SHRI.CIMIL CHERIAN KOTTALIL
SHRI.LEO LUKOSE
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON
25.6.2025, ALONG WITH CO.21/2023, THE COURT ON 9.7.2025 DELIVERED
THE FOLLOWING:
RFA 677/2008 & Cross Objection 21/2023
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR
WEDNESDAY, THE 9TH DAY OF JULY 2025 / 18TH ASHADHA, 1947
CO NO. 21 OF 2023
RFA NO.677 OF 2008 OF HIGH COURT OF KERALA
CROSS OBJECTORS/RESPONDENTS
1 SUMA MAMMEN, AGED 66 YEARS
W/O. K C MAMMEN, KANDATHIL HOUSE, KARSHAKA ROAD, KOCHI
682 016.
2 K M JOSEPH
AGED 43 YEARS
S/O. K C MAMMEN, KANDATHIL HOUSE, KARSHAKA ROAD, KOCHI
682 016. REPRESENTED BY HIS MOTHER AND POWER OF ATTORNEY
HOLDER MRS. SUMA MAMMEN.
3 RAVI PHILIP MAMMEN
AGED 39 YEARS
S/O. K C MAMMEN, KANDATHIL HOUSE, KARSHAKA ROAD, KOCHI
682 016. REPRESENTED BY HIS MOTHER AND POWER OF ATTORNEY
HOLDER MRS. SUMA MAMMEN.
BY ADVS.
SRI.ENOCH DAVID SIMON JOEL
SRI.S.SREEDEV
SRI.RONY JOSE
SHRI.LEO LUKOSE
SHRI.CIMIL CHERIAN KOTTALIL
RESPONDENTS/APPELLANTS
M/S OLAM EXPORTS (INDIA) LTD., REGISTERED OFFICE AT
BISHOP JEROM, NAZAR NEW BLOCK, IVTH FLOOR, KOLLAM 691
001., REPRESENTED BY ITS DIRECTOR Mr.SANCHETI
SRI.CHETHAN KRISHNA R.
THIS CROSS OBJECTION/CROSS APPEAL HAVING BEEN FINALLY HEARD ON
25.6.2025, ALONG WITH RFA.677/2008, THE COURT ON 9.7.2025 DELIVERED
THE FOLLOWING:
RFA 677/2008 & Cross Objection 21/2023
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JUDGMENT
Dated : 9th July, 2025
This appeal has been preferred by the defendant in O.S.364/2002 on the file of
the Subordinate Judge's Court, Kollam. The plaintiff is the cross-objector. (For the
purpose of convenience, the parties are referred to as per their rank before the trial).
2. The plaintiff filed the suit for realisation of money due as per an
agreement by which he had undertaken the work of furnishing and interior decoration
of the office of the defendant at Kollam. As per the work order dated 26.8.1998, the
plaintiff had undertaken the furnishing and interior work of the defendant's office for
a total sum of Rs.45,45,931.60. The plaintiff completed the work on 16.2.1999 and
inauguration of the office of the defendant was held on 17.2.1999. During the course
of the work, the plaintiff received a sum of Rs.9,00,000/- on September 1998,
Rs.14,00,000/- during November 1998 and another Rs.10,00,000/- during February
1999. The plaintiff thus received a total sum of Rs.33,00,000/-. The defendant
entrusted the work to the plaintiff through the defendant's consultant M/s. Kumar
Group Total Designers, Kochi. Accordingly the plaintiff had presented final bill for
Rs.48,18,540.90 before M/s.Kumar Group after the completion of the work. From the
said bill amount, 10% was discounted as agreed in the contract. Though the final bill
was submitted before the defendant, the balance amount was not paid to the plaintiff.
As per the terms of the contract, the final bill was liable to be settled within three
months after certification of the bill by M/s.Kumar Group Total Designers. In addition
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to the same, the plaintiff has deposited earnest money of Rs.25,000/- also with the
defendant. Therefore, the plaintiff filed the suit demanding balance amount as well as
interest at the rate of 18% amounting to Rs.15,82,823.90.
3. The defendant filed written statement admitting the entrustment of the
work with the plaintiff. According to the defendant, as per the terms of the contract,
the plaintiff had to complete the work within a period of 60 days from the date of
issuance of the work order. As per the contract, in case of delay in executing the work
the defendant is entitled to realize pre-liquidated damages at the rate of 1% of the
tendered cost of the work per week subject to a maximum of 10% of the total contract
value. Time was essence of the contract entered into with the plaintiff. Though the
period stipulated in the contract was only 60 days, the plaintiff took about six months
to complete the work. Because of the delay in completing the work, the defendants
sustained huge loss to the tune of Rs.11,44,000/- The claim of final bill was raised
without any basis. Therefore, according to the defendant, the plaintiff is not entitled to
realise the amount claimed in the plaint.
4. In the light of the above pleadings, the trial court has framed four issues.
The evidence in the case consists of the oral testimony of PW1 and Exts.A1 to A13 on
the side of the plaintiff and on the side of the defendant DW1 was examined and
Exts.B1 to B8 were marked. After evaluating the evidence on record, the trial court
decreed the suit and permitted the plaintiff to realise a sum of Rs.15,82,823/- along
with interest at the rate of 12% per annum from the date of suit till the date of
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judgment and at the rate of 6% per annum thereafter till realisation. Being aggrieved
by the above judgment and decree of the trial court the defendant preferred this
appeal. Now the points that arise for consideration are the following :
i) Whether the suit is barred by limitation ?
ii) Whether the impugned judgment and decree of the trial court calls for
any interference in the light of the grounds raised in the appeal ?
5. Heard Sri.Chethan Krishna R., the learned counsel for the
appellant/defendant and Sri.S.Sreedev, the learned counsel for the
respondents/plaintiffs.
6. Point No.(i) :- The defendant entrusted the interior and decoration work
of its office with the plaintiff through their consultant M/s.Kumar Group Total
Designers. Ext.A1 is the letter dated 10.8.1998 sent by the plaintiff to M/s.Kumar
Group for work and also for furnishing demand draft for Rs.25000/- being earnest
money deposit. Ext.A2 is the work order issued by the defendant to the plaintiff dated
26.8.1998. The total tendered amount was shown as Rs.45,44,931.60. Ext.A2 also
states that the said amount is subject to deducting the discounts offered during
negotiations. Clause 2.1 and 2.2 of Ext.A2 states that, tender in original and tendered
drawings and covering letter enclosing the tender sent, are part of Ext.A2 contract.
Clause 2.4 of Ext.A2 states that the entire work shall be carried out under the
supervision of the defendant's architects/interior design personnel who should be
consulted for commencement of work and for other technical clarifications required
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regarding the work. Clause 3 of Ext.A2 states that this work order shall be treated as
commencement of the order for the execution of work and that the work shall be
completed within 60 days from the date of the order. Clause 4 states that, M/s.Kumar
Group Total designer, Architects shall be the consultants of the defendant for
Architectural/Design details as well as the site construction management. All the
technical correspondence on the project shall emanate from the consultant. It further
states that the contractors shall make replies to the consultants under advice to the
defendant. It further states that all policy decisions involving financial implications
shall be finalized by the defendant.
7. Though as per Ext.A2 the work is to be completed within a period of 60
days, the work could not be started in time and could not also be completed within the
above 60 days as stipulated. From the evidence available on record it is revealed that
there was default on the part of both the parties in the delayed commencement and
completion of the work. According to the learned counsel for the appellants, more
default was on the part of the plaintiffs and thereby it was the plaintiff who committed
breach of contract and as such in the light of the stipulations in Ext.A2, the plaintiff is
liable to pay penalty at the rate of 1% of the contract amount per week upto a
maximum of 10%. However in this case, no set-off or counter-claim is raised by the
defendants and as such, I do not find any merits in the argument advanced by the
learned counsel regarding realisation of any penalty from the plaintiff.
8. Ext.A3 is the letter dated 1.9.1998 issued by the plaintiff demanding a
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sum of Rs.9,00,000/- and accordingly in September 1998, the defendant paid a sum of
Rs.9,00,000/-. Ext.A4 is the letter dated 14.11.1998 issued by the plaintiff demanding
a further sum of Rs.14,00,000/- and accordingly in November 1998, a sum of
Rs.14,00,000/- was disbursed to the plaintiff. Ext.A6 is the letter dated 16.1.1999
issued by the plaintiff demanding a further sum of Rs.10,00,000/- and accordingly, the
same was released by the defendant in February, 1999. Admittedly, no further amount
was paid by the defendant to the plaintiff. Ext.A8 is the final bill dated 26.10.1999
issued by the plaintiff to the defendant through M/s.Kumar Group.
9. As per the plaint, the completion of the work was on 16.2.1999 and
inauguration of the office of the defendant was held on 17.2.1999. Therefore relying
upon the terms in Ext.B8 tender, the learned counsel for the appellant would argue
that the plaintiff had to submit the final bill and file the suit within a period of three
years from the date of completion of the work on 16.2.1999. It was in the above
context that the learned counsel argued that the suit is barred by limitation. On the
other hand, relying upon Ext.B8 tender, the learned counsel for the
respondents/plaintiffs would argue that as per Clause10 of Annexure-I of Ext.B8
tender, the period of honouring bills is seven days from the date of certification of the
bill by the Architect. Therefore, it was argued that though the bill was presented
before the Architect M/s.Kumar Group, the final bill was certified by the Architect
only belatedly and that is why the suit happened to be filed in the year 2002.
Therefore, it was argued that the suit is filed within the period of limitation.
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10. Relying upon the decisions of the Hon'ble Supreme Court in State of
Gujarat v. Kothari and Associates, 2016 (14) SCC 761, the learned counsel for the
appellants would argue that even though the prayer for limitation was not raised, it is
the duty of the Court to satisfy itself that the Suit is not barred by limitation. In
support of the above argument, he has relied upon the decision of Himachal Pradesh
Hugh Court in State of H.P. And Ors. v. Baldev and Ors., MANU/HP/0950/2015
also.
11. It is true that, even though the prayer for limitation was not raised, it is
the duty of the Court to satisfy itself that the Suit is not barred by limitation. As per
Ext.B8 tender, the liability of the defendant to honour the bill arose only within seven
days from the date of certification of the bill by the Architect. Though the virtual
completion of the construction was on 16.2.1999 and the inauguration was held on
17.2.1999, even thereafter some works were pending and it was completed only
subsequent to the inauguration. In Ext.A7 letter issued by the plaintiff on 11.9.1998, it
was informed to M/s.Kumar Group that though the plaintiff had deputed people on
8.9.1998 along with the representative of the consultant to do the necessary work, the
work could not be completed as about half the floor was waterlogged. Several other
matters to be done by the defendant was also narrated in the said letter and the said
letter reveals that, only if the above requirements were met, they could proceed with
the construction.
12. It is true that, as per Ext.B2 letter dated 3.3.1999 the defendant had
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given an ultimatum to the plaintiff to complete the work by 7.3.1999. Exts.B2, B3, B4
and B5 are the correspondence between the plaintiff and defendant as well as
M/s.Kumar Group and from the above documents also it is revealed that the
construction of the work was not complete even by 3.3.1999. Ext.B4 is another letter
issued by the defendant to M/s.Kumar Group on 4.3.1999 in reply to Ext.B3 letter.
Ext.B6 is the final bill dated 26.10.1999 duly verified and recommended for payment
by M/s Kumar Group and given to the defendant. Ext.B7 is the letter dated 1.11.1999
issued by the defendant to M/s.Kumar Group objecting to Ext.B6 final bill. One of the
reasons stated in Ext.B7 is that M/s Kumar Group has not invoked the penalty clause
while approving the final bill. Therefore, from Ext.B6 final bill produced by the
defendant itself it is revealed that the consultant M/s.Kumar Group has certified the
final bill only on 26.10.1999. Since as per Ext.B8 tender the final bill is to be certified
by the architect namely the consultant of the defendant and it was done by the
consultant only on 26.10.1999, the suit filed on 1.10.2002 is well within the period of
three years from 26.10.1999. In other words, the suit is not barred by limitation as
argued by the learned counsel or the appellant. Point No.1 is answered accordingly.
13. Point No.2:- Since as per Ext.B6 final bill approved by M/s.Kumar
Group the plaintiff is entitled to get a total sum of 42,93,278.90 and only
Rs.33,00,000/- was paid in advance, towards the balance amount due as per the final
bill, the plaintiff is entitled to get a sum of Rs.9,93,278.91 rounded to Rs.9,93,279/-.
Further, the plaintiff claimed a sum of Rs.25000/- being the earnest money deposited
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by him. Since the plaintiff has deposited Rs.25000/- as earnest money deposit along
with Ext.A1, he is entitled to get back Rs.25000/- also. Therefore, the total amount
due to the plaintiff will come to Rs.1018279/-(993279+25000). Along with the said
amount, the plaintiff has claimed interest at the rate of 18% per annum. The learned
counsel for the appellant relying upon Ext.B8 tender, would argue that as per Ext.B8,
the plaintiff is not entitled to get any interest for the delayed payment. In this context
it is to be noted that the plaintiff has completed the work and final bill was presented
before the consultant of the defendant and the consultant has approved the final bill as
early as on 26.10.1999. Since without assigning any valid reasons the defendant
refused to pay the balance amount, the plaintiff is entitled to get reasonable rate of
interest for the said amount from 26.10.1999 till the date of realization. The judgment
of the trial court to the extent it limited the rate of interest at 6% per annum from the
date of the judgment till payment was challenged by the plaintiffs in the Cross-
objection.
14. Relying upon the decision of a learned Single Judge of this Court in
State Bank of Travancore and Ors v. M.A.Beegum, MANU/KE/5901/2019, the
learned counsel would argue that in the case of arrears of rent, this Court has awarded
interest only at the rate of 6% per annum.
15. On the other hand, the learned counsel for the respondents/plaintiffs
relying upon the decision of a Division Bench of this Court in Indian Overseas Bank
v. Electro Accoustics Private Limited, MANU/KE/1153/2012 would argue that in a
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suit for realization of money, the Division Bench held that interest awarded by the
trial court at the rate of 12 % is reasonable. He has also relied upon anther Division
Bench decision of this Court in Rosy George v. State Bank of India , 1993 KHC 33,
in a Suit for money filed by Bank in which it was held that future interest awarded at
the rate of 14% which is the minimum rate of interest charged by the Bank, was
reasonable.
16. In this context it is to be noted that the decisions relied upon by the
learned counsel for the plaintiff are suits filed by Banks and their object is to earn a
return and make profit by doing business in money transactions. In the decision in
State Bank of Travancore (supra), cited by the learned counsel for the appellant, the
Suit relates to non payment of rent to the landlord. In the instant case, the plaintiff has
undertaken the work of interior and furnishing of the office of the defendant. In the
above circumstances, considering the entire facts, I hold that interest at the rate of 9%
per annum will be a reasonable rate of interest in this case. Point answered
accordingly.
17. In the result, this appeal and Cross-objection are disposed of limiting the
amount to be paid under the decree to Rs.1018279/- along with interest at the rate of
9% per annum from 26.10.1999 till the date of the decree and at the same rate
thereafter till realization with proportionate costs.
Sd/-
C.Pratheep Kumar, Judge
Mrcs/27.6.
