JUDGMENT : Abdul Quddhose, J. (Prayer: Appeal Suit filed under Order XLI Rules 1 & 2 r/w Section 96 of Code of Civil Procedure against the decree and judgment passed in O.S.No.42 of 2006 on the file of the learned II Additional District Judge at Puducherry dated 16.07.2009.) 1. The instant appeal has been filed challenging the judgment and decree dated 16.07.2009 passed by the learned II Additional District Judge, Puducherry in O.S.No.42 of 2006. 2. Heard Mr.S.Doraisamy, learned counsel for the Appellant and Ms.N.Mala, learned Additional Government Pleader (Puducherry). 3. The Appellant is the defendant in the suit O.S.No.42 of 2006 filed by the respondents/plaintiffs seeking for recovery of a sum of Rs.81,62,665.41/- together with interest and costs which was decreed as prayed for on 16.07.2009. The suit claim was laid on the basis that the respondents/plaintiffs awarded a contract dated 15.02.1999 to the Appellant/defendant to build a Patrol Vessel for the benefit of respondents/plaintiffs at a cost of Rs.51,73,000/-. As per the contract, the Appellant/defendant will have to build a patrol vessel for the respondents/plaintiffs as per the specifications contained in the contract and deliver the said patrol vessel to the respondents/plaintiffs within a period of nine months from the date of signing of the contract. As per the agreed specifications, the patrol vessel to be built by the Appellant/defendant will have to run at a speed of 20 knots. The respondents/plaintiffs were also making part payments in stages as per the contract to the appellant/defendant and in all put together a sum of Rs.43,45,698/- was paid by the respondents/plaintiffs to the Appellant/defendant out of the total contract value of Rs.51,73,000/- . Apart from the contract value of Rs.51,73,000/- an additional cost of Rs.1,02,298/- was also sanctioned by the respondents/plaintiffs towards technical committee fees and expenses for the purpose of checking the construction and other technical specifications of the vessel. Thus the total cost of the vessel was Rs.52,75,000/- . 4. It is the case of the respondents/plaintiffs that despite an undertaking given by the Appellant/defendant under the contract to complete the ship building project within a period of nine months from the date of signing of the contract, the Appellant/defendant failed to construct the patrol vessel within the stipulated period and further the vessel did not achieve the targeted speed of 20 knots. While under construction and before delivery, it is the case of the respondents/plaintiffs that the patrol vessel was three times inspected and in all the said inspections viz., (a) on 18.11.2002, the patrol vessel attained a speed of only 15.4 knots (b) on 27.05.2003 the vessel attained a speed of only 13 knots and (c) on 09.02.2004 the vessel attained only a speed of only 11.14 knots. 5. According to the respondents/plaintiffs, the performance of the patrol vessel worsened with each and every inspection and ultimately, the respondents/plaintiffs had to terminate the contract on 18.06.2004 through a registered notice to the Appellant/defendant. Since they failed to deliver the patrol vessel on or before 17.07.2004 as required under the said termination notice, the respondents/plaintiffs had sought for refund of the advance amount paid to the Appellant/defendant together with interest at 18% per annum from 12.07.2004. Since the advance amount was not refunded, the respondents/plaintiffs filed the suit for recovery of a sum of Rs.81,62,665.41/- in O.S.No.42 of 2006 before the learned II Additional District Judge, Puducherry as detailed below: 1. 1st instalment paid on 26.03.1999 Rs.5,17,300/- Interest at 18% per annum on Rs.5,17,300/- from 26.3.1999 to 15.12.2004..... (2,087 days) ... Rs.5,32,407.99/- 2. 2nd instalment paid on 24.08.1999 Rs.10,34,300/- Interest at 18% per annum on Rs.10,34 ,300/- from 24.08.1999 to 15.12.2004... (1,938 days) Rs.9,88,794.14/- 3. 3rd instalment paid on 4.1.2000 Rs.12,93,250/- Interest at 18% per annum on Rs.12,93,250/- from 4.1.2000 to 15.12.2004... (1,806 days) Rs.11,51,807.42/- 4. 4th instalment paid on 2.11.2000 Rs.12,93,250/- Interest at 18% per annum on Rs.12,93,250/- from 2.11.2000 to 15.12.2004... (1,504 days) Rs.9,59,201.75/- 5. Advance sanction amount paid on 30.1.2001 Rs.1,02,298/- . Interest at 18% per annum on Rs.1,02,298/- from 30.1.2001 to 15.12.2004..(1414 days)... Rs.71,333.93/- 6. 1st Consultation charges paid on 08.09.1998 Rs.75,000/- . Interest at 18% per annum on Rs.75,000/- from 08.09.1998 to 15.12.2004...(2289 days)... Rs.84,661.64/- 7. 2nd Consultation charges paid on 18.8.1999 Rs.30,000/- . Interest at 18% per annum on Rs.30,000/- from 18.8.1999 to 15.12.2004 ...(1944 days) Rs.28,760.54/- Total Rs.38,16,967.41/- Total (Principal) +Interest Rs.81,62,665.41/- 6. Rs.71,333.93/- 6. 1st Consultation charges paid on 08.09.1998 Rs.75,000/- . Interest at 18% per annum on Rs.75,000/- from 08.09.1998 to 15.12.2004...(2289 days)... Rs.84,661.64/- 7. 2nd Consultation charges paid on 18.8.1999 Rs.30,000/- . Interest at 18% per annum on Rs.30,000/- from 18.8.1999 to 15.12.2004 ...(1944 days) Rs.28,760.54/- Total Rs.38,16,967.41/- Total (Principal) +Interest Rs.81,62,665.41/- 6. The Appellant/defendant filed their written statement in the suit and they did not dispute the receipt of the advance amount from the respondents/plaintiffs amounting to Rs.43,45,698/- paid towards part payment for the construction of patrol vessel under the contract dated 15.02.1999, though they have denied that the patrol vessel, even after the repeated inspections, did not achieve the targeted speed of 20 knots as per the contract dated 15.02.1999. They have also pleaded in the written statement that the failure of the patrol vessel to achieve the targeted performance is not only due to their fault, but also due to the fault of the respondents/plaintiffs and therefore, according to them, the entire responsibility for such failure cannot be passed on to the Appellant/defendant alone. 7. According to the Appellant/defendant, only due to following reasons, there was a delay in executing the contract: (a) Delay by the respondents/plaintiffs at every stage of inspection. (b) Delay in certifying by the respondents/plaintiffs after inspection. (c) Frequent changes to the technical specifications for the vessel and delay in issuing the final sanction for further progress in the construction of the vessel. (d) Delay in payment of the fourth stage of payment as per the invoice dated 06.04.2000. According to the Appellant/defendant, the payment for the fourth stage was made by the respondents/plaintiffs only on 02.11.2000 even though, invoice for the fourth stage was raised on 06.04.2000 itself. 8. The Trial Court framed the following issues based on the pleadings of the Appellant/defendant and the respondents/plaintiffs: (a) whether the respondents/plaintiffs are entitled to recover the suit amount from the Appellant/defendant? (b) To what relief the respondents/plaintiffs are entitled for? 9. Before the Trial Court, five witnesses were examined on the side of the respondents/plaintiffs who were PW1 to PW5. The witnesses included the Chief Manager, National Ship Design and Research Centre, Vishakapatnam who is PW4 and Senior Designer, National Ship Design and Research Centre, Vishakapatnam who is PW5. (b) To what relief the respondents/plaintiffs are entitled for? 9. Before the Trial Court, five witnesses were examined on the side of the respondents/plaintiffs who were PW1 to PW5. The witnesses included the Chief Manager, National Ship Design and Research Centre, Vishakapatnam who is PW4 and Senior Designer, National Ship Design and Research Centre, Vishakapatnam who is PW5. National Ship Design and Research Centre, Vishakapatnam is the Technical Consultant and is the certifying authority under the contract which certifies as to whether the patrol vessel built by the Appellant/defendant satisfies the specifications stipulated under the contract of ship building awarded to the Appellant/defendant. 10. On the side of the respondents/Plaintiffs, 14 documents were marked namely Exs.A1 to A14. Exhibits namely, A3 to A9 included a copy of the cheque issued by the respondents/plaintiffs and the payment receipts issued by the Appellant/defendant for the part payments received by them totally amounting to Rs.43,45,698/- from the respondents/plaintiffs. Exhibits marked on the side of the respondents/plaintiffs during the course of the trial also included the minutes of the inspection for the first trial dated 18.11.2002, the second trial dated 27.05.2003 and the third trial dated 09.02.2004 which were marked as Exs.A10, A11 and A12 respectively. A pre suit notice dated 29.11.2006 was also sent by the respondents/plaintiffs which was marked as Ex.A13. 11. On the side of the Appellant/defendant, one Thomas Francis Raj was examined as witness (DW1). Excepting for marking the authorization letter dated 08.07.2009, in favour of Thomas Francis Raj to depose in the suit on behalf of the Appellant/defendant which is marked as Ex.B1, no other document has been filed by the Appellant/defendant in the suit. Under the contract dated 15.02.1999, awarded to the Appellant/defendant, the patrol vessel should perform its speed of 20 knots. Admittedly, at the time of three inspections namely, the first inspection dated 18.11.2002, the second inspection dated 27.05.2003 and the third inspection dated 09.02.2004, the patrol vessel did not achieve the targeted speed of 20 knots as stipulated under the contract. As seen from the evidence available on record, the Appellant/defendant has acknowledged the said fact of the vessel not achieving its targeted speed of 20 knots, but instead its performance only worsened at every stage of inspection by reduction in its speed. 12. As seen from the evidence available on record, the Appellant/defendant has acknowledged the said fact of the vessel not achieving its targeted speed of 20 knots, but instead its performance only worsened at every stage of inspection by reduction in its speed. 12. The Trial Court has considered Exs.A10, A11 and A12 which were the minutes of the meeting with regard to the inspections made for the first trial dated 18.11.2002, the second trial dated 27.05.2003 and the third trial dated 09.02.2004. The Technical Consultant under the contract namely, the National Ship Design and Research Centre, Vishakapatnam, has duly certified that the patrol vessel built by the Appellant/defendant did not achieve the targeted speed of 20 knots at every stage of trial. 13. The Trial Court has duly considered the aforesaid facts which have not been disputed by the Appellant/defendant by any contra evidence and has come to the conclusion that the evidence of PW1 to PW5 are supported by documentary proof and therefore, there is no need to suspect or disbelieve the evidence of the witnesses on the side of the respondents/plaintiffs. 14. The part payments made by the respondents/plaintiffs to the Appellant/defendant are confirmed by Exs.A3 to A9 included the copy of the cheque dated 26.03.1999 issued by the respondents/plaintiffs to the Appellant/defendant and the receipts issued by the Appellant/defendant in favour of the respondents/plaintiffs for the part payments received by them. The part payments totally amounting to Rs.43,45,698/- made by the respondents/plaintiffs to the Appellant/defendant have not been disputed by the Appellant/defendant as seen from the oral and documentary evidence produced by them. The Trial Court has also observed that the Appellant/defendant has not denied or disputed the part payments made by the respondents/plaintiffs under Exs.A3 to A9. But, instead have categorically admitted the receipt of the said part payments. 15. Under the contract, the patrol vessel on completion as per the specifications will have to be delivered by the Appellant/defendant within nine months from 15.02.1999 (Ex.A2) being the date of the contract. But, as seen from the evidence available on record, the Appellant/defendant failed to deliver the vessel despite several opportunities given by the respondents/plaintiffs to them. The respondents/plaintiffs by its legal notice dated 18.06.2004 under Ex.A13 called upon the Appellant/defendant to deliver the patrol vessel on or before 17.07.2004, but despite receipt of the said notice, the Appellant/defendant failed to deliver the vessel. 16. The respondents/plaintiffs by its legal notice dated 18.06.2004 under Ex.A13 called upon the Appellant/defendant to deliver the patrol vessel on or before 17.07.2004, but despite receipt of the said notice, the Appellant/defendant failed to deliver the vessel. 16. We have also examined the terms of the contract dated 15.02.1999 (Ex.A2). As per Article-VIII of the contract, if the Appellant/defendant commits default in proceeding with the construction work or to the comply the terms and conditions of the contract or fails to deliver the vessel within the stipulated period, the respondents/plaintiffs shall be entitled to cancel the contract and purchase the vessel elsewhere and that the Appellant/defendant has to make good the loss suffered by the respondents/plaintiffs by refunding the entire amount received by the Appellant/defendant. 17. Admittedly, in the instant case, the Appellant/defendant has committed breach of contract by not delivering the vessel to the respondents/plaintiffs as per the specifications despite having received part payments totally amounting to Rs.43,45,698/- from the respondents/plaintiffs. In view of the breach of contract, the respondents/plaintiffs filed a suit for recovery of a sum of Rs.81,62,665.41 together with interest at 18% per annum from the date of plaint i.e., 01.12.2004 till the date of realization. The details of the suit claim are as follows: 1. 1st instalment paid on 26.03.1999 Rs.5,17,300/- Interest at 18% per annum on Rs.5,17,300/- from 26.3.1999 to 15.12.2004..... (2,087 days) Rs.5,32,407.99/- 2. 2nd instalment paid on 24.08.1999 Rs.10,34,300/- Interest at 18% per annum on Rs.10,34 ,300/- from 24.08.1999 to 15.12.2004... (1,938 days) Rs.9,88,794.14/- 3. 3rd instalment paid on 4.1.2000 Rs.12,93,250/- Interest at 18% per annum on Rs.12,93,250/- from 4.1.2000 to 15.12.2004... (1,806 days) Rs.11,51,807.42/- 4. 4th instalment paid on 2.11.2000 Rs.12,93,250/- Interest at 18% per annum on Rs.12,93,250/- from 2.11.2000 to 15.12.2004... (1,504 days) Rs.9,59,201.75/- 5. Advance sanction amount paid on 30.1.2001 Rs.1,02,298/- . Interest at 18% per annum on Rs.1,02,298/- from 30.1.2001 to 15.12.2004..(1414 days) Rs.71,333.93/- 6. 1st Consultation charges paid on 08.09.1998 Rs.75,000/- . Interest at 18% per annum on Rs.75,000/- from 08.09.1998 to 15.12.2004...(2289 days) Rs.84,661.64/- 7. 2nd Consultation charges paid on 18.8.1999 Rs.30,000/- . Interest at 18% per annum on Rs.30,000/- from 18.8.1999 to 15.12.2004 ...(1944 days) Rs.28,760.54/- Total Rs.38,16,967.41/- Total (Principal +Interest) Rs.81,62,665.41/- 18. In the written statement, the Appellant/defendant has also not disputed the liability to pay interest under the contract as claimed by the respondents/plaintiffs in the suit. 2nd Consultation charges paid on 18.8.1999 Rs.30,000/- . Interest at 18% per annum on Rs.30,000/- from 18.8.1999 to 15.12.2004 ...(1944 days) Rs.28,760.54/- Total Rs.38,16,967.41/- Total (Principal +Interest) Rs.81,62,665.41/- 18. In the written statement, the Appellant/defendant has also not disputed the liability to pay interest under the contract as claimed by the respondents/plaintiffs in the suit. Therefore, it can be inferred that the Appellant/defendant is liable to pay the interest as per the suit claim to the respondents/plaintiffs for the breach of contract committed by them for not delivering the patrol vessel to the respondents/plaintiffs as per the contract dated 15.02.1999 despite having received part payments totally amounting to Rs.43,45,698/- from the respondents/plaintiffs. The Trial Court has awarded reasonable interest at the rate of 18% per annum and this Court considering the fact that being a commercial transaction and the respondents/plaintiffs being the Government are entitled for the said interest as it is public money. 19. The Trial Court has considered the pleadings, oral and documentary evidence of the parties and only thereafter, has come to the right conclusion that the respondents/plaintiffs are entitled for the suit claim. 20. We do not find any infirmity in the judgment and decree passed by the Trial Court and there is no merit in this appeal. Accordingly, the appeal shall stand dismissed with costs. Consequently, connected miscellaneous petition is closed.