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Rajasthan High Court · body

2000 DIGILAW 378 (RAJ)

Krishna Khandelwal v. State of Rajasthan

2000-03-24

ARUN MADAN

body2000
Honble MADAN, J.–This first appeal arises out of Judgment and Decree dated 14.12.92 of the learned Additional District Judge No.2, Jaipur City, Jaipur in a Civil Suit No. 172/88 by which claim for interest as damages for delayed refund of bid amount was rejected. (2). The facts leading to this appeal, briefly stated, are that a suit for recovery of Rs. 41,395/- was filed before the trial court with the averments inter-alia that rehabilitation department of State of Rajasthan (defendant respondent) under advertisement published in the daily news paper Rajasthan Patricka in which application to participate in the auction of residential plots situated at Adarshnagar near playground of Adarsh Vidya Mandir, Jaipur pursuant thereto, auction was held on 18.4.95 by the defendant department and Smt. Krishna Khandelwal (plaintiff appellant) participated in the auction and the bid offered by the plaintiff for plot No. 591 was accepted as highest bid so, she deposited Rs. 26750/- as one fourth amount of the bid amount on 18.4.85 adjusting Rs. 1000/- deposited by her before the auction, with the stipulation that rest of 3/4th bid amount offered by her was to be deposited and only thereafter possession of auction plot was to be delivered to her. It has been averred in the plaint by her that by a letter dt. 17.5.86 the defendant department informed her that since the bid offered by her in the auction was much below the auction rate of plot in question fixed by the department, her bid was not approved and accepted and thereby Rs. 26,750/- lying as deposit towards 1/4th bid amount was directed to be refunded to her. (3). The case pleaded in the plaint on behalf of the plaintiff was that aforesaid 1/4th bid amount was lying deposited and withheld from 18.5.85 to 17.5.86 (date of communication). Unnecessarily without any justification or cause shown by the department and, therefore, she claimed that she was entitled to interest @ 18% per annum as well as damages for such delayed refund of the bid amount and thus decree for Rs. 41,395/- was sought in the suit. (4). Upon notice to the department, the suit was contested by the defendant by filing written statement. On the basis of the pleadings of the parties, following issues (translated) were framed:- (i) whether the plaintiff is entitled to the interest and if yes, then in what manner? (ii) What relief? (5). 41,395/- was sought in the suit. (4). Upon notice to the department, the suit was contested by the defendant by filing written statement. On the basis of the pleadings of the parties, following issues (translated) were framed:- (i) whether the plaintiff is entitled to the interest and if yes, then in what manner? (ii) What relief? (5). However, during the course of trial at the stage of recording statement of witnesses of the parties, the plaintiff filed an application under Order 12 Rule 5 CPC on 24.8.90 stating therein that she has received bank demand draft bearing No.B.W. 031770 dated 20.5.86 of Rs. 26,750/- by deposit in her bank account on 28.5.90. (6). To support her case plaintiff produced her husband as PW1 and got documents (Ex.1 to Ex.12) exhibited whereas the department produced Satyanarain Dhamani as DW1 and documents (Ex. D1 and Ex.D1/1). (7). After hearing both the parties and examining the oral as well as documentary evidence on record, the learned trial court deciding issue No.1 against the plaintiff, dismissed her suit for interest vide impugned Judgment and decree as referred to above. Hence this first appeal. (8). I have heard the learned counsel for the parties at length. (9). Shri Rajmal Jain, the learned counsel for the appellant contended that the learned trial court did not appreciate plaintiffs evidence in all respect in right perspective. He urged that though admittedly auction took place on 18.4.1985 and Rs. 26750/- 1/4 th bid amount was deposited at the spot after adjusting earnest money deposited prior to auction, but the decision rejecting bids of respective bidders participated in the auction was communicated after a lapse of about one year by letter dated 17.5.86 (Ex.5) but again the bid amount lying deposited with department since date of auction itself was not refunded even with letter dated 17.5.86 (Ex.5) or even after the draft was prepared on 20.5.86 despite after serving notice dated 18.3.88 u/s 80 CPC (Ex.6) upon the department and filing the present suit so also thereafter. It was only by letter dated 28.5.90 (Ex.9), bank demand draft dated 20.5.86 of Rs. 26,750/- was sent by the depart- ment during pendency of the suit after getting it revalidated extending period thereof without showing any justification for such delayed refund and payment in question. (10). It was only by letter dated 28.5.90 (Ex.9), bank demand draft dated 20.5.86 of Rs. 26,750/- was sent by the depart- ment during pendency of the suit after getting it revalidated extending period thereof without showing any justification for such delayed refund and payment in question. (10). Learned counsel also urged that the learned trial court erred in not appreciating and believing plaintiffs evidence/deposition as to the fact that despite her pursuing the matter for refund by personally going with her husband to the department where its officials demanded 10% commission for the refund of the bid amount lying with them. Learned counsel then urged that the learned trial court erred in holding that on what basis, the plaintiff claimed damages. (11). On the other hand, Shri B.M. Sharma, the learned Additional Govt. Advocate for the department respondent supporting the impugned Judgment contended that there is no error of law warranting any interference by invoking jurisdiction u/s 96 CPC by this Court because it is not a case of misreading or misappreciation of material brought in evidence on record. Moreover, it was not the case of the plaintiff either in plaint or in the notice u/s 80 CPC that the official of the department demanded 10% commission for release of the refund in pursuance of letter dated 17.5.86 (Ex.5) whereas for the first time only in evidence of PW1, such a case was pleaded but such an evidence in support of which there are no averments in the pleading cannot be read in the evidence. Learned Additional Govt. Advocate also urged that the Judgment of lower court rendered in another case cannot be taken into consideration nor any benefit thereof can be given to the plaintiff in the case on hand nor is binding for this court to act upon it as a precedent because though it was delivered on 23.10.92 whereas the impugned Judgment was delivered on 14.12.92 but that Judgment was not tendered or produced on record of the present case during trial nor brought to the notice of the trial court so as to take note of that fact. Learned Additional Govt. Learned Additional Govt. Advocate alternatively urged that even otherwise though the Judgment in another case rendered by another court than the present trial court in different set of pleadings, evidence and circumstances proved on record of that case, cannot be read in evidence in support of this case, but by that Judgment the case of plaintiff pleaded therein was not accepted and only u/s 34 CPC the interest @ 6% was allowed that too for the limited period i.e. 20.5.86 (date of demand draft) to 25.5.1990 only. (12). I have considered the rival contentions of the parties and examined these contentions qua the findings of the learned trial Court dismissing the plaintiffs suit, on the basis of the evidence on record. Prima-facie, I am of the view that the learned trial Court after appreciation of the evidence, on record has rightly concluded that as per the terms and conditions of the contract for the auction in question which have been admitted by the plaintiff and proved by documentary evidence (Ex.D1/1), the department (respondent) reserved its right to accept or reject any bid at any point of time and moreover, auctions conditions under the contract did not stipulate or prescribe as to the payment of damages or interest in the event of rejection of the bid itself subsequent to the auction, on refund of the bid amount lying deposited with it and as a result thereof, the plaintiff was rightly held to be not entitled to the interest on the refund of the bid amount. (13). (13). Once the plaintiff was admittedly communicated by letter of rejection dated 17.5.86 (Ex.5) so also asking the bidder like the plaintiff to collect refund of their bid amount from office at any point of time during office hours, then in my considered view, since the department was ready and willing to refund the bid amount after rejection of the bid and in view of the communication (Ex.5) it was for the bidder like plaintiff to go to the department and collect the refund and further more when there was no express stipulation in any of the terms and conditions of the auction (Ex.D1/1) to pay interest on refund of the bid amount in the event of the bid being itself rejected or the condition itself being cancelled by the department, either for the period prior to rejection of the bid or after communication of rejection till the payment is acknowledged. Even in the plaint as well as notice dated 18.3.88 (Ex.6) under Sec. 80 CPC, the plaintiff claiming only interest came with a case that the department kept reticence upto 17.5.86 for communicating rejection of the bid itself. But, her husband deposed in his statement that she and her husband after acknowledging the rejection letter (Ex.5) went to the department where 10% commission by its official was being demanded for refund of the bid amount. Curiously enough, such a case has never pleaded either in the notice under Section 80 CPC (Ex.6) or in the plaint by the plaintiff. So, on this court as well the plaintiffs case as urged by her learned counsel falls flat to the ground. Had there been any such demand by the departments official after she was communicated rejection of her bid by letter (Ex.5), then what prevented her from pleading in notice under Sec. 80 CPC or in the plaint, and why for the first time in oral evidence, and what were the reasons for her having not adduced any evidence by producing any document or filing any complaint so as to establish her case which she deposed in evidence during trial, all have not been explained. She failed to adduce any evidence to establish her reticence also as to what prevented her after rejection of her bid on 17.5.86 till notice dated 18.3.88 (Ex.6) to pursue either for collecting refund of bid amount or to make complaint in writing to superior officer against an employee of the department, if any, allegedly demanding commission to the refund. Therefore, I do not find any substance in the contentions advanced by learned counsel for the plaintiff as to the stand taken by her in evidence during trial for pursuing the refund by personally going to the department. This explanation to establish the delay on the part of the department has never been pleaded since before except only in the evidence before the trial court and hence cannot be accepted being a case of evidence beyond pleadings. (14). The plaintiff herself proved by producing in evidence communication (Ex.5) rejecting bid itself and directing bidders including her to collect the refund of the bid amount. Thus, it stands proved that the department already accorded sanction to refund the bid amount and according to sanction dt. 17.5.86 (Ex. 5), the department was very much and willing to refund and it was for the bidder to collect the bid amount as soon as the bidder like the plaintiff acknowledged the sanction (Ex.5) on or after 17.5.86. It also stands proved on record that after the sanction to refund the bid amount was communicated to the plaintiff by letter dated 17.5.1986 (Ex.5), Bank draft of Rs. 26750/- was prepared on 20.5.86, itself and was ready with the department to deliver the demand draft of the bid refund amount to the plaintiff, for whom it was incumbent upon to collect the refund. The plaintiff has failed to either plead in the plaint or notice u/s 80 CPC and then also failed to prove in evidence on record that after letter dated 17.5.1986 (Ex.5) was received by her and after the demand draft was ready to deliver, the plaintiff went to the department to collect the refunds demand draft or bid amount. On the other hand, the defendant proved that after sanction letter (Ex.5), demand draft of Rs. 26750/- was prepared on 20.5.86 to deliver the same to the plaintiff but she did not come to collect the refund order of bid amount whereas according to letter (Ex.5) it was incumbent upon her to do so. On the other hand, the defendant proved that after sanction letter (Ex.5), demand draft of Rs. 26750/- was prepared on 20.5.86 to deliver the same to the plaintiff but she did not come to collect the refund order of bid amount whereas according to letter (Ex.5) it was incumbent upon her to do so. No letter or reminder has been produced by the plaintiff to establish that the plaintiff made efforts or correspondence with the department to collect the refund money after letter dated 17.5.86 (Ex.5) or after demand draft dated 20.5.86 was ready to deliver it to her. Therefore, in my considered view, on the basis of material on record, the department cannot be blamed for the delay to collect the refund amount of the bid after letter dated 17.5.86. The plaintiff failed to collect the refund bid amount after she was communicated rejection of her bid by letter (Ex.5) and asked to collect the amount, after 20.5.86. Therefore, she is not entitled to claim interest muchless damage as there was delay explained or proved, on the part of the plaintiff, herself for collecting the refund of the amount. (15). Learned counsel for the plaintiff appellant relied upon the decisions in Union of India vs. S.S.H. Syndicate, Poona (1), and State of Rajasthan vs. Mahabeer Prasad (2). I have perused the afore cited decisions and examined the ratio of decisions. As regards the decision of the Apex Court in SSH Syndicates case (supra), it was a case dealing with delay in delivery of goods consigned due to negligence of railway and breach of contract and wherein the Apex Court held the case not falling U/s 76 of the Railways Act, 1961 and it held the suit for damages not barred. The Apex Court also held as under:- ``(2) that there was no question of Section 73 of the Contract Act overriding the provisions of the Interest Act, because in the instant case the Interest Act had no application at all inasmuch as no interest was claimed by the plaintiff at all but interest had been used as a measure to determine the compensation which the plaintiff could seek against the defendant for its negligence in causing inordinate delay in the delivery of the goods. (16). (16). The ratio of decision in SSH Syndicates case (supra), with due respect to the proposition of law laid down therein does not apply to the present case because here the plaintiff, as already held above, has failed to prove defendants negligence in causing inordinate delay in refund of the bid amount. That apart, as there was no stipulation or agreement of the auction between the parties for payment of interest in respect of the one fourth amount of the bid deposited by the plaintiff, interest cannot be allowed by way of damages for wrongful detention of money. I am fortified with decision in Bengal Nagpur Railway Co. Ltd. vs. Ruttanji Ramji (3), which was relied upon in Union of India vs. Watkins Mayor & Co. (4). In Watkin Mayor & Cos (supra), the Apex Court observed that under the Interest Act, 1839, the Court may allow interest to the plaintiff if the amount claimed is a sum certain which is payable at a certain time by virtue of a written instrument and the provision under the Interest Act that ``interest shall be payable in all cases in which it is now payable by law. only applies to cases in which the court of equity exercises jurisdiction to allow interest. In Ruttanji Ramjis case (supra), the Privy Council pointed out that as there was no stipulation which authorised the plaintiff to charge interest on the quantified amount of damages, the plaintiff was not entitled to any interest. (17). The Apex Court in SSH Syndicates case (supra) taking into consideration ratio of decisions of the Privy Council and its earlier decisions respectively in Ruttanji Ramjis as also in Watkins Mayor & Co.s cases (supra), observed that the ratio of decisions in two cases referred to above would apply only to such cases where interest by way of damages is claimed for wrongful detention of a debt or where the interest is claimed on a specified amount due or claimed against any debtor. It was also observed that the principle adumberated in the two cases, referred to above, will not apply to cases where the plaintiff does not claim interest on a quantified amount or on damages but where the plaintiff merely calculates interest as a yardstick or measure to assess the damages which he would be entitled to. (18). It was also observed that the principle adumberated in the two cases, referred to above, will not apply to cases where the plaintiff does not claim interest on a quantified amount or on damages but where the plaintiff merely calculates interest as a yardstick or measure to assess the damages which he would be entitled to. (18). Thus viewed, as held in Ruttanji Ramjis case (supra) interest cannot be allowed by way of damages, to a person for wrongful detention of money. The plaintiff is entitled to interest prior to the date of the suit either on the basis of contract or usage or under any provision of law justifying the award of interest. In the case on hand, as already held above, the usage has neither been alleged nor proved. There is also no agreement in the auctions terms and conditions to pay interest on the refund of the bid amount in the event of rejection or not approving the bid, itself, till the payment thereof is acknowledged. In these circumstances the plaintiffs suit after the principal was already paid during trial was rightly dismissed by the trial Court under the impugned judgment on her pleadings for the award of interest as damages. (19). As regards judgment delivered by another trial Court in another case which has been referred to by the plaintiffs learned counsel whereby the plaintiff therein was held entitled to interest @ 6% p.a. from 20.5.86 (date of demand draft) to 25.5.90 only. I am of the view that it having not been adduced in evidence in the instant case cannot be read in evidence and cannot be taken into consideration inasmuch as neither any benefit thereof can be given to the plaintiff nor acted upon being binding on this Court so as to award interest relying thereon. (20). Even in State of Rajasthan vs. Mahabeer Prasad (supra) this Court while allowing States first appeal against the judgment of trial court which had awarded interest prior to the date of notice u/S. 80 CPC in the case of refund of 1/4th bid amount, held that the plaintiff therein was entitled to interest only from the date of notice and specifically held that under the Interest Act, no interest can be allowed to the plaintiff prior to the date of notice. In the case on hand, as held above, since the plaintiff failed to prove that after getting rejection of the bid and intimation asking to collect the refund of bid amount as also after the date of demand draft i.e. 20.5.86, she went to collect it as communicated by letter dated 17.5.86 (Ex.5) but the draft was not delivered to her. She has not produced any letter to prove her case for efforts made by her, if any, to collect the refund amount after 20.5.86. She has only produced notice dated 18.3.1988 (Ex.6). She failed to explain as to why she did not send any letter narrating all circum- stances, which she deposed in her evidence for the delay on the part of the department and why she conspicuously kept silence from 20.5.86 to 18.3.88 in absence of any documentary evidence on record. Thus, she is not entitled to claim any interest in the facts and circumstances of the case on hand as pleaded by her for the period prior to the notice u/s 80, CPC. The interest Act allows interest on all debts or sums certain when a notice is given, that interest will be charged from the date of demand until the date of payment. In the case on hand it stands proved that the notice u/s 80 CPC dt. 18.3.88 (Ex.6) served by the plaintiff fully satisfied the conditions of Section 1 of the Interest Act. Thus, the plaintiff in the circumstances, is entitled to interest only from the date of notice i.e. 18.3.88 till the refund of bid amount of Rs. 26750/- was paid to the plaintiff through registered letter dated 25.5.90 during pendency of the present suit. (21). This raises to the question as to what will be the rate of interest? In the facts and circumstances of the case and in the interest of justice and trends on this aspect, in my considered view, the plaintiff is entitled to 12% interest per annum in view of aforesaid finding recorded by me that the interest is allowed for the period of only about two years and one month from the date of notice u/s 80, CPC. (22). (22). Before parting with this judgment, I may observe that it is a case where atleast after notice u/s 80 CPC was received by the respondent department on or about 18.3.1988 and when the departments case was that bank draft was ready of its earlier date i.e. 20.5.1986, it is surprisingly enough that after notice u/s 80 CPC the Rehabilitation Department of the Secretariat Government of Rajasthan took two years and one month to send the bank draft after its revalidation by letter dated 25.5.1990 (Ex.9) which has been admittedly sent by the defendant to the plaintiff. The uncalled for litigation could be avoided at the instance of the State by saving much time of the Court and public exchequer and the present one is a glaring example of the inaction on the part of the State functionary after notice u/s 80 CPC was received by the department. Therefore, in these circumstances, I deem it also appropriate to impose the costs on the respondent department. (23). As a result of the above discussion, this appeal is partly allowed with costs of this appeal as well as the suit, and the decree is directed to be issued only for interest calculating @ 12% per annum on Rs. 26750/- for the period from 18.3.1988 (date of notice u/s 80 CPC) till 25.5.90 (date of registered letter sending draft of Rs. 26750/- which is the principal refund amount and has admittedly been received during trial). To the above extent, the impugned judgment & decree dated 14.12.1992 are reversed and modified. (24). A copy of this judgment be sent to the Chief Secretary of the Government of Rajasthan who is directed to take initiative to avoid such recurrence of events for the delay in payment of refund amount after preparation of the cheques or rejection of the auction bid, itself, and that too after the notice u/s 80, CPC is served and ensure that whenever the rejection of the auction is communicated it should also accompany the cheque, itself, i.e. refund of requisite amount payable.