JUDGMENT Hon’ble S.U. Khan, J.—Heard learned Counsel for the parties. 2. This is defendant’s first appeal and is directed against judgment and decree dated 22.9.1978 given by IIIrd A.D.J., Jalaun at Orai in O.S. No. 79 of 1976, Sri Mewa Lal v. State of U.P. 3. The plaintiff respondent filed suit for recovery of Rs. 24,809/- alongwith pendente lite and future interest. The suit was decreed for recovery of Rs. 10,226.50. The said amount was directed to be paid within two months, failing which 6% interest from the date of order (decree) was directed to be paid. 4. The plaintiff was given contract for constructing quarters for the residence of Judicial Officers in Orai. The work was to be completed by 25.1.1972. Under issue No. 1, the Court below after thorough examination of the entire evidence on record held in Para-14 of its judgment that plaintiff had failed to establish that he completed the work by 25.1.1972 and that on the other hand, it was proved that he could complete the work on 30.6.1972. 5. Thereafter, the main dispute in between the parties remained regarding imposition of penalty. Relevant portion of clause-2 of the agreement concerning penalty as mentioned in the judgment of the Court below is quoted below : “Contractor shall pay as compensation an amount equal to 1 per cent or such smaller amount as the Superintending Engineer (S.E.) (whose decision in writing shall be final) may decide on the ground of the estimated costs of the whole work shown by the tender for every that the work remaining uncommenced or unfinished, the amount of compensation shall not exceed 10%.” (sic) 6. State could not show that S.E. took any decision with regard to percentage/ quantum of penalty. The argument of the State before the Court below was that decision of S.E. was required only if penalty of less than 1% was to be imposed and for imposition of penalty of 1%, no decision was required. On the other hand, learned Counsel for the plaintiff contended before the Court below as well as this Court that for any penalty either 1% or less than 1%, decision of S.E. was necessary and in the absence of such decision, no penalty could be imposed. The Court below accepted the contention of learned Counsel for the plaintiff. On the other hand, learned Counsel for the plaintiff contended before the Court below as well as this Court that for any penalty either 1% or less than 1%, decision of S.E. was necessary and in the absence of such decision, no penalty could be imposed. The Court below accepted the contention of learned Counsel for the plaintiff. However, I am unable to accept the said contention and finding of the Court below in that regard. In my opinion, the correct interpretation of the above clause is that 1% penalty is normally to be imposed however in case contractor asserts extenuating circumstance and requests for imposition of lesser penalty, then obviously he has to apply for the same and prove his case. Lesser penalty may be imposed only if contractor has got some valid cause/explanation for delay. S.E. is not supposed to know the causes of delay. He is also not supposed to call upon the contractor to explain the causes of delay. Something which is in special knowledge of a party is to be asserted, brought on record and proved by that party. This is also the underlying principle of Section 106, Evidence Act (I am not, by any stretch of imagination, holding that Section 106, Evidence Act, ipso facto, applies in such cases.) 7. Even the learned Court below did not mention any extenuating circumstance. On the contrary, in the detailed findings under Issue No. 1, the Court below categorically held that plaintiff was at fault in not completing the work within time. 8. Accordingly, finding of the Court below on Issue No. 5 cannot be sustained. In the absence of any representation on behalf of contractor for imposing lesser penalty, penalty of 1% was, ipso facto, to be imposed under Clause (2) of the agreement (supra). The defendant appellant rightly imposed penalty of Rs. 9,145. 9. As regards the other findings of the Court below, I do not find any error in the judgment of the Court below. Question of limitation was rightly decided in view of letter of Executive Engineer dated 24.11.1973 regarding 8th and final bill of the contractor. In the said letter, it was mentioned that final bill would be finalised after the sanction was received from the higher authorities. From the said date, suit had been filed within three years, i.e. on 18.11.1976. 10. Question of limitation was rightly decided in view of letter of Executive Engineer dated 24.11.1973 regarding 8th and final bill of the contractor. In the said letter, it was mentioned that final bill would be finalised after the sanction was received from the higher authorities. From the said date, suit had been filed within three years, i.e. on 18.11.1976. 10. Defendant appellant asserted that plaintiff had written a letter regarding no dues (farigh khati). The case of the defendant was that the said letter/acknowledgement was written by the plaintiff after giving notice under Section 80, C.P.C. It was rightly disbelieved by the Court below. It was further contended by the defendant appellant that at the said time an amount of Rs. 9,000/- and odd was found payable by the plaintiff which he paid. The State completely failed to prove the payment of the said amount. 11. The accounts submitted by the State were accepted as correct by the Court below under Issue No. 7. 12. The Court below also held that State could not forfeit the security deposit of Rs. 2,000/- made by plaintiff. After imposing penalty, the State had absolutely no right to forfeit the security deposit of Rs. 2,000/-. 13. Accordingly, appeal is allowed in part. Impugned judgment and decree is modified and suit of the plaintiff is decreed only for Rs. 1,081.50 (10,226.50 - 9,145 = 1,081.50) alongwith interest at the rate as awarded by the Court below. ————