Priyadarshi Rameshwar Construc vs State Of Bihar And Ors
2026 Latest Caselaw 789 Patna

Patna High Court

Priyadarshi Rameshwar Construc vs State Of Bihar And Ors on 8 April, 2026

         IN THE HIGH COURT OF JUDICATURE AT PATNA
                          FIRST APPEAL No.106 of 2010
     ======================================================
     Priyadarshi Rameshwar Construction Company (P) Ltd. Main Road Pakri Ara
     S/O Ram Bhushan Tiwary R/O Mohalla- Pakri In Front Of Dr. Shamim, P.S.-
     Ara Nawada, Distt.- Bhojpur

                                                               ... ... Appellant/s
                                       Versus

1.   State Of Bihar And Ors.
2.   Secretary/Commissioner, Water Resource Department Sichai Bhawan,
     Patna, Bihar
3.   Engineer-In-Chief, Water Resource Department Sichai Bhawan, Patna, Bihar
4.   Managing Director, Bihar State Construction Corporation Ltd., Anishabad,
     Patna Near Mehesh High School
5.   Chief Engineer, Water Resource Department, Dehri-On-Sone, Rohtas
6.   Chief Engineer Water Resource Department, Aurangabad
7.   Superintending Engineer, Sone Canal Circle, Ara, Distt.- Bhojpur
8.   Superintending Engineer Flood Control Circle, Buxar
9.   Superintending Engineer, North Koal Canal Circle, Gaya
10. Executive Engineer, Flood Control Division No. 2, Ara, Bhojpur
11. Executive Engineer, Sone Canal Division, Ara, Distt.- Bhojpur
12. Executive Engineer, Flood Control Division, Buxar
13. Executive Engineer, North Koal Canal Division Goh, Distt.- Aurangabad
14. Commissioner/Secretary, Minor Irrigation Department New Secretariate,
    Patna, Bihar
15. Co-Ordinator/Chief Engineer, Tube-Well Project Bishwasaraiya Bhawan,
    Belli Road, Patna
16. Superintending Engineer, Tube Well Circle, Mithapur, Patna
17. Superintending Engineer, Tube Well Circle, Ara, Distt.- Bhojpur
18. Executive Engineer, Tube Well Division, Patna West Bihta, Distt.- Patna
19. Executive Engineer, Tube Well Division Ara, Distt.- Bhojpur

                                               ... ... Respondent/s
     ======================================================
     Appearance :
     For the Appellant/s    :     Mr. Rameshwar Tiwary (In person)
     For the Respondent/s   :     Mr. GA- 2
     ======================================================
     CORAM: HONOURABLE MR. JUSTICE RAMESH CHAND
     MALVIYA
                          CAV JUDGMENT

Patna High Court FA No.106 of 2010 dt.08-04-2026

Date : 08.04.2026

Heard the appellant appeared in person as well as

learned counsel for the respondents.

2. This First Appeal has been filed under Section 96 of

the Code of Civil Procedure (hereinafter referred to as 'CPC')

against the judgment and decree dated 03.04.2010 passed by the

learned Sub-Judge II, Bhojpur, Ara (hereinafter referred to as

'Trial Court') in Money Suit No. 04 of 1999 wherein the

plaintiff/appellant's suit for money claim arising out of

contract/agreement was dismissed by the learned Trial Court.

3. For the sake of convenience, the parties where

required shall be referred to in terms of their status before the

learned Trial Court.

4. The facts of the case, in brief, is that the

plaintiff/appellant, Priyadarshi Constructions Company Pvt.

Ltd., which is duly incorporated under the Companies Act, 1956

and having its headquarter at Ara, and in pursuance of tenders

invited by the State Government the plaintiff/appellant through

its Director Rameshwar Tiwary, was awarded 15 separate works

for which independent agreements were executed with the

concerned departments. The particulars whereof are detailed in

Annexure I. Further, in terms of the said agreements, the Patna High Court FA No.106 of 2010 dt.08-04-2026

plaintiff duly executed the works with due diligence and in

accordance with contractual stipulations to the satisfaction of

the competent authorities, whereupon the works were measured,

verified, and recorded in the departmental records and part

payments were released from time to time. However, certain

works were discontinued midway by the defendants on account

of administrative constraints, including non-availability of

funds, though the works already executed were duly accepted;

nevertheless, despite completion and acceptance of the works, a

substantial amount remained outstanding and payable to the

plaintiff as detailed in Annexure I, and notwithstanding repeated

demands and representations, including those made pursuant to

directions issued in earlier writ proceedings, the defendants

failed and neglected to release the admitted dues and rejected

the claims on arbitrary and untenable grounds; consequently, the

plaintiff was constrained to serve a statutory notice under

Section 80 of the CPC and, upon expiry of the prescribed period

without compliance, has instituted the present suit for recovery

of Rs. 17,40,989/- towards the outstanding dues.

5. Defendant No. 10 entered appearance and filed his

written statement, wherein he has categorically denied all the

averments made in the plaint and has stated that the claim made Patna High Court FA No.106 of 2010 dt.08-04-2026

by the plaintiff is wholly baseless, imaginary, and devoid of

merit, asserting further that no amount is due or payable by the

defendants. It has further been stated that no statutory notice

under Section 80 of the CPC was ever served upon the

defendants, and, as such, the suit is liable to be dismissed on this

ground alone; whereas, the remaining defendants having failed

to file their written statements within the prescribed period,

were accordingly debarred from filing the same by order of the

learned Trial Court.

6. In view of pleadings of both the parties, learned

Trial Court framed following issues for determination:

I. Whether the suit of plaintiff is maintainable as framed?

II. Have the plaintiff got valid cause of action for the suit?

III. Whether the plaintiff has served the notice under Section 80 of the CPC to the defendants.

IV. Whether plaintiff is entitle for the decree of of amount claimed by him?

V. Whether the plaintiff is entitle to get the relief and other reliefs as claimed under plaint?

7. In support of his claim, the plaintiff examined two

witnesses, namely, PW-1, Rameshwar Tiwary (the plaintiff

himself), and PW-2, Ramkrishna Tiwary, and exhibited one

documentary evidence i.e., photocopy of the notice issued under

Section 80 of the CPC, which is marked as Ext.-1. Moreover, Patna High Court FA No.106 of 2010 dt.08-04-2026

other documents have also been exhibited before the learned

Trial Court, which are as follows:

Ext.-2: Liability List (1 to 9); Ext.-4: Measurement Book; and Ext.-5: Agreement with Measurement Book.

8. The plaintiff asserted that he had entered into an

agreement with the concerned authorities for execution of

certain construction work and had duly performed part thereof.

It was further pleaded that measurements of the work executed

were recorded in the Measurement Book and that part payment

had also been made by the authorities. However, no agreement

was brought on record to establish the factum of contract, nor

was the Measurement Book produced to substantiate the alleged

execution of work. Equally, no documentary evidence was

adduced to prove the alleged part payment or its receipt.

9. On the other hand, although defendant no. 10 cross-

examined the witnesses produced by the plaintiff, the defendants

did not adduce any oral or documentary evidence in support of

their defence.

10. After considering the facts and circumstances of

the case and upon perusal of materials available on record, the

learned Trial Court, reiterated the settled principle that the

burden of proof lies squarely upon the plaintiff, who must stand Patna High Court FA No.106 of 2010 dt.08-04-2026

on the strength of his own case and cannot derive benefit from

any lacunae or lapse on the part of the defendants. Upon

appreciation of the material on record, the learned Trial Court

held that in the absence of foundational documentary evidence,

such as the agreement, Measurement Book, and proof of

payment, the plaintiff's oral evidence lacked probative value

and amounted to mere self-serving statements. The learned Trial

Court further observed that, despite alleging compliance with

Section 80 CPC, the plaintiff failed to produce the original or

carbon copy of the notice and offered no satisfactory

explanation for its non-production, thereby casting doubt on

such compliance. Consequently, it was concluded that the

plaintiff had failed to discharge the burden of proof and had not

established his case in accordance with law thereby the learned

Trial Court dismissed the suit filed by the plaintiff (appellant

herein).

11. Aggrieved by the aforesaid judgment and decree

passed by the learned Trial Court in Money Suit No. 04 of 1999,

the plaintiff has preferred the present First Appeal challenging

the findings recorded by the learned Trial Court and seeking

reversal of the impugned judgment and decree.

12. Appellant assailed the impugned judgment and Patna High Court FA No.106 of 2010 dt.08-04-2026

decree passed by the learned Trial Court and submitted that the

impugned judgment and decree is unsustainable both in law and

on facts, inasmuch as the same has been rendered without

proper appreciation of the pleadings and evidence on record and

is based on surmises and conjectures. It is submitted that the

learned Trial Court has failed to consider material documentary

evidence, particularly the Measurement Book, liability reports,

and agreement documents, which constitute primary and reliable

evidence establishing execution of work and subsisting liability

of the respondents. Learned counsel further submitted that the

appellant had duly executed the work in terms of the agreement

under the supervision of competent authorities, and the same

stands duly recorded in official records maintained by the

department; however, despite such cogent evidence, the learned

Trial Court has erroneously disregarded the same, thereby

vitiating the findings recorded.

12.i. Moreover, the plaintiff/ appellant, in support of

his case, have produced documentary evidence Measurement

Book agreement, liablity report in Annexure I of the plaint, as

under:

S. No. Name of Work Proof of Dues Amount Documents

1. Nakanam Tola M.B. No. 342, Rs.46,702/-

Patna High Court FA No.106 of 2010 dt.08-04-2026

Protection work of Agreement Chain 620 Liability Agreement No. 2F2 Report.

91/92 value Rs.

3,60,651.00 under Flood Control Division No.2. Ara.

2. Nakanam Tola M.Β. No. 306. Rs.1,27,121/-

                        protection work            Liability report
                        crate supply               and agreement
                        agreement no. 18           paper.
                        F2 89/90 Rs.
                        4,31,573.00 Flood
                        Control Division
                        No.2 Ara
          3.            Construction of    M.B.No. 131 Rs. 1,08,558/-
                        Dowel wall East    Agreement
                        Gangi Chain 293.30 liability report
                        to 312 agreements etc.
                        No. 38F2 88/89 Rs.
                        12,15,000.00 Flood
                        Control Division
                        No.2 Ara.
          4.            West Gangi gap             Μ.Β.No. 194, Rs. 4,430/-
                        filling work at            Agreement
                        Chain 180                  Liability
                        agreement no. 27           report.
                        F2 88/86 Rs.
                        28,000.00 Flood
                        Control Division
                        No.2 Ara
          5.            Ganga             M.B. No. 210 Rs. 4,970/-
                        Embankment Chain etc.
                        371.70 to 372.90  Agreement,
                        Agreement No. 057 liability report.
                        F2 87/88 Rs.
                        15000.00 Flood
                        Control Division

Patna High Court FA No.106 of 2010 dt.08-04-2026

No.2 Ara.

6. Ganga embankment M.B. No. 319 Rs. 1,65,001/-

Sinha Road Ramp etc. Agreement at Chain 376.50 liability Agreement No. 60 Report.

F2 89/90 Rs.

6,69,000.00 Flood Control Division No.2 Ara

7. Tilak Rai Ka Hata M.B. No. 513 Rs. 1,02,885/-

                        to Faukal Rai Ka    Agreement.
                        Hata Protection
                        work at Chain 0 and

                        27 F2 89/90 Rs.
                        4,36,000.00 Flood
                        Control Division,
                        Buxar.
          8.            Remolding and       M.B. No. 250 Rs. 1,00,372/-
                        widening of service (5) Agreement.
                        road Koilwar
                        Distribution Chain
                        244 to 264
                        Agreement no. 145
                        F2 89/90 Rs.
                        3,40,795=00 under
                        Sone Canal
                        Division Ara
          9.            Earth work Singhi          M.B. No. 73   Rs. 15,636/-
                        Distribution RD            Agreement
                        36.50 to 44.70             and R.T.I.
                        Agreement no.              Copy
                        20F2 87/88 Rs.
                        3,50,000=00 under
                        North Koul Canal
                        Division
                        Aurangabad
          10.           Metaling and               Bill made     Rs. 28,331/-

Patna High Court FA No.106 of 2010 dt.08-04-2026

welding service letter dated road Koilwar 23.07.1994 Distribution Chain and liability 0 to 25 Agreement report, A.I. no.146 F2 89/90 Fund.

Rs. 4,00,000=00

11. West Gangi Chain Agreement Rs. 21,782/-

315.55 to 320 and Bill letter Agreement No. 6F2 dated 88/89 Value Rs. 18.06.1992 1,17,810.00 Flood and liability Control Division report.

no.2 Ara

12. West Gangi Chain Bill letter Rs. 10,580/-

                        293 to 297.30              dated
                        Agreement no.              18.06.1992
                        20F2 89/90 Rs.             and liability
                        41000.00 Flood             repot.
                        Control Division           agreement
                        No.2 Ara
          13.           West Gangi 297.30 Agreement                Rs. 11, 313/-
                        to 200 Agreement and letter
                        No. 19 F2 89/90 Rs. dated
                        35,000.00 Flood     18.06.1992
                        Control Division    and liability
                        No.2 Ara            report
          14.           Remolding work     M.B.No. 142             Rs. 19315/-
                        Tiar Tube well
                        Agreement No.
                        29F2 93/94 Rs.
                        3,81,000.00 under
                        Tube Well Division
                        Ara.
          15.           Remolding work     R.T.I Copy     Rs. 13,518/-

                        Well Agreement     page 126 dated
                        No. 18F2 93/94 Rs. 21.10.1996
                        1,00,000.00

Patna High Court FA No.106 of 2010 dt.08-04-2026

TOTAL Rs. 7,80,513/-

12.ii. Appellant further submitted that, once execution

of work and its recording in official documents is established,

the appellant acquires a lawful right to receive payment, and any

denial thereof is arbitrary and contrary to settled principles

governing contractual obligations under the Indian Contract Act,

1872. It is submitted that the learned Trial Court has failed to

properly determine the amount due and payable to the appellant,

despite the fact that the outstanding dues amounting to Rs.

17,40,989/- was duly reflected in Government records and

supported by Measurement Book entries. He further submitted

that any lapse or delay on part of the respondent cannot be

permitted to prejudice the appellant, who has already discharged

his contractual obligations in entirety, and, therefore, the

appellant cannot be made to suffer irreparable loss due to

administrative inaction.

12.iii. He further submitted that the appellant had

earlier approached this Court by way of writ petitions, which

were disposed of with liberty to seek redressal before the

competent authority and thereafter before the learned Trial

Court, accordingly, upon issuance of statutory notices under

Section 80 of the CPC, the present suit was instituted in due Patna High Court FA No.106 of 2010 dt.08-04-2026

compliance with law. It is asserted that the learned Trial Court

has failed to consider the pleadings, evidence, and surrounding

circumstances in their proper perspective and has not correctly

adjudicated the rights and liabilities of the parties, thereby

occasioning a grave miscarriage of justice. Appellant thus

submitted that the impugned Judgment and Decree are liable to

be set aside and the appellant is entitled to the reliefs as prayed

for.

13. Learned counsel for the defendants/respondents

supported the impugned judgment and decree passed by the

learned Trial Court and submitted that the Interlocutory

Application, purportedly filed under Order XLI Rule 5 read with

Section 151 of the CPC, is wholly misconceived, not

maintainable in law, and liable to be rejected at the threshold. It

is submitted that Order XLI Rule 5 of the CPC contemplates

grant of stay of execution of a decree; however, in the present

case, no execution proceeding is pending, inasmuch as Money

Suit No. 04 of 1999 itself stood dismissed by the learned Trial

Court below. Consequently, in the absence of any executable

decree, the very substratum of the present application collapses,

rendering the relief sought legally untenable. Furthermore, the

appellant is seeking to introduce documents such as the Patna High Court FA No.106 of 2010 dt.08-04-2026

Measurement Book, Agreement, Liability List, and other

materials at the appellate stage, which were admittedly not

produced before the learned Trial Court. It is a settled principle

that the appellate court adjudicates upon the record of the court

below, and additional evidence cannot be permitted merely to

fill up lacunae or cure inherent defects in the case, particularly

in the absence of exceptional circumstances as contemplated

under Order XLI Rule 27 of the CPC, which are conspicuously

absent in the present matter. The attempt, therefore, is nothing

but an abuse of the process of law.

13.i. It is further submitted that the claims of the

appellant, particularly in relation to Agreement No. 20F2 of

1987-88 for an amount of Rs. 3,50,000/-, stand conclusively

negated by the appellant's own admission as contained in the

letter dated 25.02.2021, wherein it has been unequivocally

acknowledged that all dues, including the security amount, have

been fully paid and that no outstanding liability remains against

the department. Such admission, being clear, categorical, and

unequivocal, constitutes the best evidence against the maker and

operates as an estoppel, thereby precluding the appellant from

raising any claim contrary thereto. The said admission is further

corroborated by official departmental records, leaving no Patna High Court FA No.106 of 2010 dt.08-04-2026

manner of doubt that the alleged claim is devoid of substance.

13.ii. Furthermore, it is submitted by the learned

counsel for the respondents that no subsisting cause of action

survives in favour of the appellant, and the learned Trial Court

has rightly dismissed the suit on merits upon proper

appreciation of the materials available on record. The present

Interlocutory Application, as well as the connected First Appeal,

being devoid of merit, frivolous, and vexatious in nature, which

is liable to be dismissed with costs.

14. I have heard learned counsel for both the parties at

length and in view of the rival submissions made on behalf of

the parties, and upon consideration of the materials available on

record, the points that arise for determination in the present First

Appeal is "Weather the plaintiff/appellant entitled for claim

amount and accordingly entitled for decree?"

15. At this stage, upon careful perusal of the

pleadings, the evidence both oral and documentary brought on

record, as well as the impugned judgment and decree passed by

the learned Trial Court, the point for determination formulated

above go to the root of the matter and subsumes the entire

controversy involved in the present appeal.

16. Moreover in the interest of justice and for the Patna High Court FA No.106 of 2010 dt.08-04-2026

proper adjudication, it is pertinent to examine the documents

such as the Measurement Book, Agreement, Liability List, and

other materials which has been produced at the appellate stage

as an additional evidence. So, after hearing both the parties the

aforesaid documents have been admitted as an additional

evidence and exhibited in the list of exhibit as Exhibit nos. 15

and 16 from the order dated 27.11.2025. Furthermore, the

Appellate Court has the discretionary power to admit the

additional evidence, primarily to prevent the miscarriage of

justice and when the evidence is crucial for a just judgment.

Notably, it is well settled law that a First Appellate Court has

wide powers to re-appreciate evidence provided under Order

XLI Rule 27 of the CPC. It is apposite to reproduce Rule 27 of

Order XLI of the CPC, as under:

"27. Production of Additional Evidence in Appellate Court. (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court, But if:

(a) the Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the Patna High Court FA No.106 of 2010 dt.08-04-2026

decree appealed against was passed, or

(b)the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause,the Appellate Court may allow such evidence or document to be produced, or witness to be examined.

(2)Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission."

17. From the perusal of the entire Trial Court record it

appears that the document proposed to include as additional

evidence under Order XLI Rule 27 was on record before the

learned Trial Court but the same was not exhibited by the

learned Trial Court. So, the aforesaid documents are fit to be

exhibited as additional evidence under Order XLI Rule 27(1) of

the CPC.

18. Also, the Hon'ble Apex Court has made its stance

clear with respect to allowing additional evidence at the stage of

appeal in K. Venkataramiah v. A. Seetharama Reddy & Ors.,

reported in AIR 1963 SC 1526, and held that as under:

"The Appellate Court has the power to allow additional evidence, not only if it requires such evidence 'to enable it to pronounce judgment, but also for 'any other substantial cause'. There may be cases where the Court finds that it is able to pronounce a judgment on record as it is, and cannot strictly say that it requires Patna High Court FA No.106 of 2010 dt.08-04-2026

additional evidence to enable it to pronounce judgment, it still considers that, in the interests of justice, something which remains obscure should be filled up, so that it can pronounce its judgment in a more satisfactory manner, Such a case will be one for allowing additional evidence for only substantial cause under Rule 27."

19. It is also well settled that once execution of work

is established and the same has been accepted by the

department, the liability to make payment necessarily follows. It

would be unreasonable to deny payment for the work actually

done. The State cannot take advantage of its own wrong and

refuse to pay for work executed.

20. The Hon'ble Apex Court in State of West Bengal

v. B.K. Mondal & Sons, reported in AIR 1962 SC 779 observed

that, "if a person lawfully does anything for another person, or

delivers anything to him, not intending to do so gratuitously, and

such other person enjoys the benefit thereof, the latter is bound

to make compensation". Moreover, the aforesaid principle,

embodied under Section 70 of the Indian Contract Act, 1872,

clearly applies where the State derives benefit from work

executed.

21. Further, in A.T. Brij Paul Singh v. State of

Gujarat, reported in AIR 1984 SC 1703, at paragraph 11, the Patna High Court FA No.106 of 2010 dt.08-04-2026

Hon'ble Apex Court held as under:

"11. Now if it is well-established that the respondent was guilty of breach of contract in as much as the recission of contract by the respondent is held to be unjustified, and the plaintiff-contractor had executed a part of the works contract, the contractor would be entitled to damages by way of loss of profit, Adopting the measure accepted by the High Court in the facts and circumstances of the case between the same parties and for the same type of work at 15% of the value of the remaining parts of the work contract, the damages for loss of profit can be measured."

22. Likewise, in State of Rajasthan and Anr. v. Ferro

Concrete Construction Pvt. Ltd., reported in (2009) 12 SCC 1

the Hon'ble Apex Court observed that once execution of work is

established and accepted, the contractor becomes entitled to

payment in accordance with law. In the present case, the M.B.

entries, duly verified by competent authorities, clearly establish

execution of work and corresponding liability. The respondents,

having failed to rebut such evidence, cannot deny payment, as

the same would amount to unjust enrichment. In furtherance

thereto, it is well settled that though the plaintiff must succeed

on the strength of his own case, once prima facie evidence is

adduced, the burden shifts upon the defendant.

23. The Hon'ble Apex Court in Union of India v. Patna High Court FA No.106 of 2010 dt.08-04-2026

Ibrahim Uddin and Anr., reported (2012) 8 SCC 148 in has

observed that a party cannot succeed on the weakness of the

defence; however, once sufficient evidence is produced, the

burden shifts on the opposite party to rebut the same.

24. In the present case, the appellant has discharged

his initial burden, whereas the respondents have failed to adduce

any evidence in rebuttal. The learned Trial Court has thus erred

in law in placing undue emphasis on technical deficiencies

while ignoring substantive evidence on record. The findings

recorded by the learned Trial Court are therefore perverse, being

based on non-consideration of material evidence and

misapplication of legal principles.

25. The appellant, having established execution of

work and corresponding liability of the respondents, is also

legally entitled to interest on the decretal amount, both on

equitable and statutory considerations. It is well settled that

where a party is deprived of the use of money lawfully due to

him, interest is payable by way of compensation for such

deprivation.

26. In this regard, the Hon'ble Apex Court in

Secretary, Irrigation Department, Government of Orissa v.

G.C. Roy, reported in (1992) 1 SCC 508, held as under:

Patna High Court FA No.106 of 2010 dt.08-04-2026

"33. In the case before us, admittedly the contract does not provide that no interest is payable on the amount that may be found due to any one of them. If so, it follows that the seller, namely, the firm is entitled to claim interest from the date on which the price became due and payable. The finding of the arbitrator in this case is that the price became payable on June 7, 1958. As held by this Court in Union of India v. A.L. Rallia Ram which related to an arbitration proceeding, under Sub-section (2) of Section 61, in the absence of a contract to the contrary, the seller is eligible to be awarded interest on the amount of the price for the goods sold. On this principle it follows that the award of interest from June 7, 1958 is justified."

27. Further, in Alok Shanker Pandey v. Union of

India and Ors., reported in AIR 2007 SC 1198, the Hon'ble

Apex Court observed in para 9, as under:

"9. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence, equity demands that A should not only pay back the principal amount but also the interest thereon to B."

Patna High Court FA No.106 of 2010 dt.08-04-2026

28. Applying the aforesaid principles to the facts of

the present case, it is evident that the appellant had executed the

work and the same was duly recorded in official documents;

however, despite such execution and acknowledgment, the

respondents failed to release the admitted dues, thereby unjustly

retaining the amount and depriving the appellant of its lawful

use. Such retention of money by the State amounts to unjust

enrichment and warrants compensation by way of interest.

Further, under Section 34 of the CPC, the Court is empowered

to award reasonable interest on the principal sum adjudged from

the date of institution of the suit till realization. The grant of

interest, therefore, is not only equitable but also statutorily

recognized.

29. Upon consideration of the rival submissions and

the materials available on record, this Court finds that it is an

admitted and undisputed position that the appellant/plaintiff had

duly executed and completed the contractual work entrusted to

him in the year 2016 within the stipulated time and had

thereafter raised the requisite bills in accordance with the terms

of the contract. It is further not in dispute that the respondents

failed to release the admitted dues within a reasonable period

and ultimately made payment only in the year 2023, i.e., after an Patna High Court FA No.106 of 2010 dt.08-04-2026

inordinate and unexplained delay of nearly seven years. The

sole defence sought to be advanced by the respondents, both

before the court below and in the present proceedings, is that the

agreement does not contain any specific clause providing for

payment of interest on delayed disbursement. However, such a

contention cannot be countenanced in law, inasmuch as it is well

settled that the State and its instrumentalities are under a

constitutional obligation to act fairly, reasonably and in a non-

arbitrary manner in all contractual dealings. The failure to

release legitimate dues for an unduly prolonged period, without

any cogent justification, amounts to arbitrary withholding of

money lawfully due and payable, thereby entitling the claimant

to reasonable compensation by way of interest.

30. This Court is of the considered opinion that the

absence of an express stipulation in the contract for payment of

interest does not ipso facto disentitle the appellant from

claiming the same, particularly where the delay is wholly

attributable to the respondents and is neither justified nor

explained by any acceptable material. A contractor entering into

an agreement with the Government legitimately expects that

payments for completed works would be made within a

reasonable time, and while some administrative delay may be Patna High Court FA No.106 of 2010 dt.08-04-2026

anticipated, a delay extending to seven years is per se

unreasonable, arbitrary, and violative of settled principles of

fairness in State action. The appellant cannot be made to suffer

for lapses on the part of the authorities, and the retention of his

dues for such a prolonged period confers an unjust enrichment

upon the respondents. Accordingly, this Court holds that the

appellant is entitled to be compensated for the delayed payment

by way of reasonable interest, notwithstanding the absence of a

contractual clause, and the contrary finding, if any, recorded by

the learned court below cannot be sustained in the eye of law.

31. Accordingly, the point for determination framed

by this Court is answered in favour of the plaintiffs/appellants

and against the defendants/respondents. In view of the aforesaid

discussion and the settled legal position, this Court holds that

the appellant is entitled to interest on the decretal amount. The

impugned Judgment and Decree passed by the learned Trial

Court, to the extent it denies such interest, is unsustainable in

law and is hereby set aside.

32. In view of the aforesaid discussions, the present

First Appeal is allowed with following directions:

(i) The impugned judgment and decree dated 03.04.2010 passed by the learned Trial Court is unsustainable in the eyes of law and it is hereby set-aside;

Patna High Court FA No.106 of 2010 dt.08-04-2026

(ii) The respondents are directed to pay Rs.7,80,513/- (Rupees Seven Lakh Eighty Thousand Five Hundred Thirteen only) to the appellant towards the outstanding dues;

(iii) The respondents are directed to pay simple interest @6% per annum on the admitted/decretal amount to the appellant from the date of institution of the suit till its realization and such interest shall be calculated and paid to the appellant within a period of four weeks from the date of receipt of this judgment; and

(iv) It is made clear that in case of failure to comply with the aforesaid directions, the respondents shall be liable to pay simple interest @8% per annum on the admitted amount from the date of institution of the suit till its realization.

33. Let the Trial Court Records along with the copy of

this Judgment be transmitted to the Court concerned forthwith.

(Ramesh Chand Malviya, J) Mayank/-

AFR/NAFR                NAFR
CAV DATE                02.02.2026
Uploading Date          08.04.2026
Transmission Date       N/A