EXECUTIVE ENGINEER, O & M DIVISION v. MALLESWARAPPA
2017-03-21
G.NARENDAR
body2017
DigiLaw.ai
JUDGMENT : G. Narendar, J. The appellants are the Executive Engineer and the Accounts Officer of the Karnataka Power Transmission Corporation Limited. The appellants are before this Court being aggrieved by the judgment and decree rendered by the Court of the I Additional Civil Judge (Sr.Dn.) at Chitradurga in O.S.No.35/2002, dated 14.8.2003. 2. The parties are referred to by the nomenclature before the trial Court for the sake of convenience. 3. The appellants and the respondent herein are the defendants and the plaintiff respectively. 4. The facts in brief are as follows :- It is the case of the plaintiff that he is an authorised P.W.D Contractor and that the defendants had invited tenders for construction of the extension of Sub-Divisional office buildings at Holalkere and the plaintiff was declared as the successful bidder and upon confirmation of the bid, approval was accorded by the Chief Engineer (Electrical), Hubli Zone, Hubli; That the plaintiff commenced and completed construction within the allotted time. Upon such completion, the defendants inspected the building and prepared the statement of bill of accounts and upon such preparation of statement of bill of accounts, the then Chief Engineer, Hubli, issued directions to defendants to release the bill amount for the completed work and that the bill of accounts were finalized on 30.11.1998; that on account of finalization of the bill, the plaintiff made several requests for release of amount due under the bill. But the defendants kept postponing the matter on one ground or the other and that on 16.6.1999, the plaintiff submitted a written requisition requesting for settlement of the bill amount but no satisfactory action was taken; that the plaintiff has clearly stated that if the bill amount is not settled, the defendants would be liable to pay the same along with interest at the rate of 2% for Rs.100/- and despite such a claim, no reply was elicited from the defendants; that left with no other alternative efficacious remedy, the plaintiff approached the High Court of Karnataka in W.P.No.490/2000. During the pendency of the writ petition, defendants filed memo dated 3.3.2000 stating that the bill amount would be settled.
During the pendency of the writ petition, defendants filed memo dated 3.3.2000 stating that the bill amount would be settled. It was contended by the plaintiff that even before the High Court in the writ petition, it was prayed that the defendants are liable to pay interest at the rate of 24% on the bill amount for the period of delay i.e. from the date of confirmation by the internal audit upto the date of payment of the amount. But the High Court did not order payment of interest, on the other hand it permitted the plaintiff to approach the Competent Court of law for appropriate relief; that thereafter the defendants issued the cheque for the bill amount on 4.4.2000 but the said amount was accepted under protest and by reserving the right of the plaintiff to recover damages for the delayed period of 17 months; that the defendants while paying the bill amount had orally assured the plaintiff of paying interest for the delay period of 17 months and when this did not fructify into action, the plaintiff got issued the legal notice dated 7.1.2002. Despite the service of notice the defendants did not respond and the suit for recovery of accrued interest for the delayed period of payment came to be filed. On the above pleadings, the plaintiff had sought for judgment and decree and reliefs against the defendants as follows :- (a) The plaintiff prays for recovery of amount of withheld bill interest amount for Rs. 5,44,418/- at the rate of 24% p.a. from 30.11.98 to 4.4.2000 which is about 17 months delay i.e. Rs. 1,83,842/- as by way of damages; (b) To pass judgment and decree as damages for Rs. 2,43,842/- as damages and directed to be paid by defendants with suit pendency interest at the rate of 24% p.a.; (c) Towards general damages, mental agony, hardship, inconvenience, injury caused to plaintiff for Rs. 50,000/-; (d) High Court costs towards legal expenses of Rs.10,000/-; (e) to award costs, legal expenses etc. incurred by the plaintiff in the suit proceedings. Upon notice the defendants entered appearance and filed the written statement. By the said written statement it was admitted that he was awarded the contract but the averment at paragraph 2 and other averments were denied. It was contended that the averments in paragraph 2 are false and concocted for the purpose of filing the suit.
Upon notice the defendants entered appearance and filed the written statement. By the said written statement it was admitted that he was awarded the contract but the averment at paragraph 2 and other averments were denied. It was contended that the averments in paragraph 2 are false and concocted for the purpose of filing the suit. It was contended that the plaintiff had completed all items of work as per tender but he has not completed the works item at 43, 44 & 46(a) and (b) of the sanctioned estimate but had submitted the final bill; that this fact was considered by the Asst. Executive Engineer (O and M) Sub-Divn., Holalkere vide letter bearing No. 2985, dated 26.12.1998; that these items of works had wrongly been deleted from the measurement book 8219 vide page Nos. 23 and 2; that the plaintiff has submitted his first and final bill even without completing the work even as per the tender conditions. Hence, instructions were sought from the Hubli office regarding the passing of the bill presented by the plaintiff as a final bill, as he had not completed all the agreed works. Since clarification from the Hubli office was awaited, the bill was kept pending. That subsequently the Supertintending Engineer (Electrical), O & M Circle, Hubli directed that the matter would be discussed with the Asst. Engineer (Civil) and would report, the Asst. Engineer had given a note on 14.10.1999; that in the meanwhile Chief Engineer, Electricity (HZ) KPTCL, Hubli had also called for a detailed report. Pursuant to the same, detailed report was also sent and instruction was sent to audit the bill. The defendants admits as a fact that, once the bills of account are passed payment are to be made thereafter. But the plaintiff has submitted his first and final bill without completing all the work as agreed under the tender and that the said lacunae came to the light and the bill was scrutinized and hence clarification was sought from the Superintending Engineer and other competent authorities as to whether the final bill could be passed without completion of the tendered works.
It was also contended that the works executed was not satisfactory and on inspection it was seen that the wall was cracked, wood used was not of standard quality, doors and windows were not functioning properly; toilets were of sub-standard quality and electric works and plastering works were not properly carried out and iron rods in the ceiling were exposed and that on account of the above facts, action was not taken on the representation of the plaintiff and they were yet to receive clarification from the higher authorities. It is contended that the Hon'ble High Court disposed of the W.P.No.490/2000 on 3.3.2000 directing the defendants to settle the bill within one month. In compliance of the order, the bill amount was settled on 4.4.2000. It is contended that as payment has been made within the time stipulated by the High Court i.e. within one month, question of the payment of interest does not arise. It is denied that the defendants gave assurance to the plaintiff that the interest amount would be released shortly. It is also contended that in respect of other contract and the plaintiff between July and August, 1995 had claimed certain amounts for soling metal and jelly spreading at Hiriyur, Challakere and Aimangala. That the said works were taken up for investigation and it was found that the plaintiff had not carried out any works entrusted to him and that by letter dated 15.12.2001 the defendants were directed to take immediate action to stop payment due to the plaintiff; that the plaintiff had moved the Hon'ble High Court by filing another petition in W.P. No. 143/2002 for release of the amount aforementioned and for stay of operation of the order directing the defendants to stop all payments to him. But the said writ petition came to be rejected and that as a measure of revenge, the plaintiff has now moved the Civil Court in respect of the sum that has already been settled before the High Court. It is contended that the delay in settlement of the bill amount was on account of the fact that the plaintiff submitted his first and final bill without completing the tender works and it was explained that the reason for the payment not being made immediately was on account of correspondences between the various departments and offices of the defendants' Organization and on account of obtaining clarification and explanation.
In the light of the above pleadings, the Trial Court framed the following three issues : 1. Does the plaintiff prove that, defendants are entitled to pay interest amount of Rs. 1,83,842/-? 2. Does plaintiff further prove that he is entitled to recover future interest at the rate of 24% per annum? 3. Whether the plaintiff is entitled for damages as claimed? 4. What order or decree? On the said pleadings and issues framed, the parties went to trial. The plaintiff got examined himself as PW1 and got marked Exs.P1 to P17. The defendants got examined three witnesses, DW1 to DW3, and got marked Exhibits D1 to D7. Based on the pleadings and the documents produced on both sides, the trial Court decreed the suit partly for a sum of Rs. 1,22,494/- together with current interest payable at 18% per annum within one month. Being aggrieved the defendants are in appeal. 5. Heard the learned counsel on both sides. 6. It is contended by the appellants/defendants that the present suit is not maintainable as the judgment and decree sought is for award of interest as damages. He would further contend that neither the terms of the contract nor the tender conditions provide for payment of interest. He would further contend that the trial Court has fallen into an error on account of misreading the provision of the contract, more particularly Clause (7) and arrived at the conclusion that the bills have to be settled within two months from the date of actual completion of the works. It failed to see that the very dispute was non-completion of all the tender works and that was the reason behind the withholding of payments. The trial Court erred in arriving at the conclusion that there is a delay in release of payments even without arriving at the conclusion as to whether the plaintiff had completed all the works. He would further contend that the said conclusion would amount to putting the cart before the horse.
The trial Court erred in arriving at the conclusion that there is a delay in release of payments even without arriving at the conclusion as to whether the plaintiff had completed all the works. He would further contend that the said conclusion would amount to putting the cart before the horse. He would submit that the court ought to have first rendered a finding that the plaintiff had completed the tendered works in all respects as required under Clause (7) of the contract before rendering a finding as to whether there was any delay in the release of payments because, only during such an exercise could the courts have been able to arrive at the date on which the plaintiff had actually completed the construction and only thereafter it could invoke Clause (7) to calculate the period of delay. It is also contended that the plaintiff had not prayed for payment of any interest. He would draw the attention of the court to Ex.P5, copy of the writ petition, and point out the correction carried out in the prayer coloumn, wherein the relief of interest at 2% from 30.11.1998 has been scored out. He would also draw the attention of the Court to Ex.P6, the memo filed by the respondent, whereby the court was intimated that the bill of the plaintiff is being settled as per the direction of the Chief Engineer vide letter dated 11.1.2000. He would also draw the attention of the Court to Ex.P7, which is the certified copy of the order passed by the Hon'ble High Court in W.P. No. 490/2000, and he would submit that no liberty was reserved in favour of the plaintiff to initiate any proceedings for recovery of any interest or damages. He would contend that the only leave that was sought from the court was to approach the appropriate court or authority if the bill is not settled to his satisfaction. In the absence of even a prayer for damages and interest in the writ petition, it is inconceivable that the court has granted such liberty to initiate proceedings to recover damages or interest for the period leading upto date of payment and hence the very reliefs sought for is barred by limitation.
In the absence of even a prayer for damages and interest in the writ petition, it is inconceivable that the court has granted such liberty to initiate proceedings to recover damages or interest for the period leading upto date of payment and hence the very reliefs sought for is barred by limitation. He would further contend that the court is entitled to award only pendente lite interest or for the period prior to the institution of the suit or for the period from the date of the decree till payment but could not have entertained a suit only for interest by way of damages. He would further draw the attention of the court to sub-section (2) of Section 34 of Civil Procedure Code, 1908 which reads as follows : Section 34(2). Where such a decree is silent with respect of payment of further interest on such principal sum from the date of the decree to the date of payment interest on such principal sum, the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit thereof shall not lie. 7. He would contend that the High Court had not awarded any interest either with respect to the period relating to the date of decree, to the date of payment or for the earlier period from date of claim to the date of decree and the basis for the suit was the order of the Hon'ble High Court. He would also place reliance on the rulings of the Apex Court reported in AIR 1966 SC 395 and would contend that in the absence of any usage of contract or any provision of law to justify the award of interest, the award of interest by way of damages is improper and unsustainable and no interest could be awarded for the period upto the date of the suit. He would also rely on the ruling of the Apex Court reported in AIR 1961 Supreme Court 990 and ruling of High Court of Judicature at Madras reported in AIR 1975 Madras 77. 8. Per contra, the learned counsel for the plaintiff/respondent would reiterate the findings of the Trial Court. He would contend that the liberty reserved by the High Court would also include the liberty to sue for damages.
8. Per contra, the learned counsel for the plaintiff/respondent would reiterate the findings of the Trial Court. He would contend that the liberty reserved by the High Court would also include the liberty to sue for damages. He would contend that the Trial Court had rightly penalized the officers as they have deliberately delayed the payment for extraneous reasons. He would also support the decree directing enquiry and fixing of responsibility on individual affair and recovery from them. 9. In the light of the above pleadings and contentions the issues that arise for consideration in the above appeal are :- (i) Whether this Court while disposing off the writ petition has reserved liberty to the plaintiff to seek damages or payment of interest? (ii) Whether the suit for award of interest by way of damages is maintainable? 10. The first issue is taken up for consideration in order to examine if the institution of the suit is on account of any liberty reserved by this court while disposing off the writ petition No. 490/2000. To render a finding it is necessary to look into the pleadings of the writ petition and the reliefs sought therein. A perusal of the pleadings would reveal that the only pleading regarding interest is at paragraph 7 of the writ petition which reads as follows :- "7. It is submitted that the petitioner has been paying interest at 3% per month on the amount borrowed from the financier. The claim of the petitioner was duly certified and passed by the internal auditor on 30.11.1998. Therefore, the respondents are liable to pay interest at 2% per month on the approved bill amount of Rs. 5,44,418.14 paise. And the respondents are collecting interest at 2% per month on the amount due from the customer. Under the circumstances, it is just and proper to pay interest for the delay in payment of the bill of the petitioner." Thereafter, the following prayer is made in the writ petition. "Wherefore, it is respectfully prayed that this Hon'ble Court be pleased to issue a writ of mandamus directing the respondents to settle the claim, i.e. BR No. 3289 dated 30.11.1998 as per Annexure "E" viz representation and grant such other reliefs as this Hon'ble Court deems fit to grant in the facts and circumstances of the case by allowing this writ petition in the interest of justice and equity." 11.
Thus a reading of the above makes it obrious that no relief for payment of interest or damages was made rather though made it was deleted. The plaintiff's banking his claiming on the liberty said to have been granted by this court in the writ petition. It is relevant to note that the writ petition came to be disposed off on the memo filed by the respondents whereby this court was intimated that pursuant to the directions of the Chief Engineer (Electricity) (HZ), Hubli bill amount would be settled within one month from the date. The said submission was recorded by this court and in the course of disposal the learned counsel for the petitioner has made a statement that the writ petition may be disposed off by recording the said submission of the defendants herein who are the respondents in the writ petition. Further the petitioner's (plaintiff's) counsel prayed for leave to approach the appropriate court or other authority if the bill is not settled to his satisfaction. At paragraphs 4 & 5 the court disposed of the writ petition in the following manner :- "4. Learned counsel for the petitioner states that petition may be disposed of recording the said submission. He also seeks leave to approach the appropriate Court or other authority if the bill is not settled to his satisfaction. 5. In view of the above, recording the submissions made on behalf of the respondents and reserving liberty to the petitioner as sought, this petition is disposed of." 12. Reading of the contents of paragraphs 4 and 5 of the order disposing of the writ petition W.P. No. 490/2000 would reveal that the court has recorded the submission of the respondents that they are willing to settle the bill amount. At this juncture a request was made to reserve liberty to initiate action if the bill is not settled to his satisfaction. No liberty was sought to seek damages or interest nor was such liberty granted. The only leave granted by the court was if the bill as settled was not cleared. This was the leave requested and this was the leave granted. It is not the case of the plaintiff i.e. the petitioner therein that the bill also included the demand for payment of interest.
The only leave granted by the court was if the bill as settled was not cleared. This was the leave requested and this was the leave granted. It is not the case of the plaintiff i.e. the petitioner therein that the bill also included the demand for payment of interest. Nor is it demonstrated before this court that the petitioner had made a demand for payment of interest under the final bill. That being the case it is futile to contend that this court while disposing of the writ petition preferred by the plaintiff has reserved liberty to claim interest by way of damages. By no stretch of imagination one can arrive at such a conclusion more so, in the light of the fact that the petitioner himself had deleted the prayer for grant of interest either pendente lite or for the period leading up to the date of payment. In the absence of such a prayer and such a prayer not being the scope of the writ petition it is impermissible in law to place an interpretation on the order of this court which is not reflected by the plain and unambiguous language used by the court while disposing off the writ petition W.P. 490/2000. It is settled law that orders of the court have to be read and understood in the light of the language used therein and cannot be stretched to draw inferences which is not supported by the language of the order. Hence the first issue is answered against the plaintiff and it is held that no liberty has been reserved by this court entitling the plaintiff to sue for interest by way of damage. Nextly, the second issue as to whether a claim for interest by way of damages would lie is no more res integra in the light of the law laid down by the Hon'ble Apex Court. 13. A perusal of the relief sought for in the suit would reveal that the plaintiff has sought for a relief for payment of interest by way of damages i.e. for the period leading up to the date of the suit. 14. The Hon'ble Apex Court in the case of Union of India v. The West Punjab Factories, Ltd. reported in AIR 1966 SC 395 has been pleased to hold as follows :- "9.
14. The Hon'ble Apex Court in the case of Union of India v. The West Punjab Factories, Ltd. reported in AIR 1966 SC 395 has been pleased to hold as follows :- "9. Learned counsel for the appellant has not and could not challenge the concurrent finding of the trial Court and of the High Court that the fire which caused the damage was due to the negligence of the railway administration. But the learned counsel has pressed the other four points which were raised in the Courts below. He contends - (i) that the suits as filed were not maintainable, (ii) that the High Court was in error in reversing the finding of the trial Court that the delivery had been given with respect to five of the consignments in the factory' s suit, (iii) that damages should have been awarded at Rs. 38/- per bale which was the contract price between the buyer and seller and not at the market price on the date on which the damage took place, and (iv) that interest could not be awarded for the period before the suit on the amount of damages decreed. 16. The next contention is that no interest could be awarded for the period before the suit on the amount of damages decreed. Legal position with respect to this is well-settled: (see Bengal Nagpur Rly. Co. Ltd. v. Ruttanji Ramji, 65 Ind App 66: ( AIR 1938 PC 67 ). That decision of the Judicial Committee was relied upon by this Court in Thawardas Pherumal v. Union of India, 1955 (2) SCR 48 : ((S) AIR 1955 SC 468 ). The same view was expressed by this Court in Union of India v. A.L. Rallia Ram, (1964) 3 SCR 164 : ( AIR 1963 SC 1685 ). In the absence of any usage or contract, express or implied, or of any provision of law to justify the award of interest, it is not possible to award interest by way of damages. Also see recent decision of this Court in Union of India v. Watkins Mayor and Co., Civil Appeal Nos. 43 and 44 of 1963, dated 10-3-1955: ( reported in AIR 1966 SC 275 ).
Also see recent decision of this Court in Union of India v. Watkins Mayor and Co., Civil Appeal Nos. 43 and 44 of 1963, dated 10-3-1955: ( reported in AIR 1966 SC 275 ). In view of these decisions no' interest could be awarded for the period upto the date of the suit and the decretal amount in the two suits will have to be reduced by the amount of such interest awarded." 15. Nextly, the Hon'ble Apex Court in the case of Mahabir Prasad Rungta v. Durga Datta reported in AIR 1961 SC 990 has been pleased to hold as follows :- "12. There remains the question of interest. Interest for a period prior to the commencement of suit is claimable either under an agreement, or usage of trade or under a statutory provision or under the Interest Act, for a sum certain where notice is given. Interest is also awarded in some cases by Courts of equity. Bengal Nagpur Rly. Co. Ltd. v. Ruttanji Ramji, 65 Ind App 66 : (AIR 1938 P C 67). In the present case no agreement about interest was made, nor was it implied. The notice which was given did not specify the sum which was demanded, and, therefore, the Interest Act does not apply. The present case also does not fall within those cases in which Courts of equity grant interest. Learned counsel for Durga Datta claimed interest as damages; but it is well-settled that interest as damages cannot be awarded. Interest up to date of suit, therefore, was not claimable, and a deduction shall be made of such interest from the amount decreed. As regards interest pendente lite until the date of realization, such interest was within the discretion of the Court. The rate fixed is 6 per cent. which, in the circumstances and according to the practise of Courts, appears high, interest shall be calculated at 4 per cent. per annum instead of at 6 per cent. and the decree shall be modified accordingly." 16. Reading of the above obviates any necessity for a discussion on the said issue.
The rate fixed is 6 per cent. which, in the circumstances and according to the practise of Courts, appears high, interest shall be calculated at 4 per cent. per annum instead of at 6 per cent. and the decree shall be modified accordingly." 16. Reading of the above obviates any necessity for a discussion on the said issue. The Apex Court, in the first ruling, while considering the specific contention that interest could not be awarded for the period before the suit on the amount of damages decreed was pleased to hold that the legal position in this respect is well settled and that in the absence of any usage or contract express or implied, or of any provision of law to justify the award of interest, it is not possible to award interest by way of damages. And in view of the catena of decisions of the Apex Court it held that no interest could be awarded for the period up to the date of the suit. The Apex Court yet again in the second ruling has also held, that with regard to interest for a period prior to commencement of the suit is claimable either under an agreement, or usage of trade or under a statutory provision. 17. In the instant case on hand, there is neither a plea nor evidence by the plaintiff to demonstrate that the claim for interest by way of damages is based on any agreement or usage of trade or under any statutory provision nor is the trial court granting any equitable relief. The jurisdiction of the trial court emerging from Section 9 of the Code is not an absolute right but contains inbuilt restrictions. 18. In view of the above, the appeal is allowed. The judgment and decree under appeal is set aside and the suit stands dismissed. 19. Office to draw the decree accordingly.