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2025 DIGILAW 1890 (TS)

State of Telangana, Represented by its Principal Secretary v. Muthineni Santhosh Rao, S/o. Laxman Rao

2025-12-22

B.R.MADHUSUDHAN RAO

body2025
JUDGMENT : B.R.MADHUSUDHAN RAO, J. 1. This Memorandum of Appeal is filed under Section 96 of Code of Civil Procedure, 1908 (for short ‘CPC’) assailing the judgment and decree in OS.No.115 of 2015, dated 27.02.2020 passed by the I Additional District Judge at Karimnagar. 2. Appellants are defendant Nos.1 to 4 and respondent is the plaintiff in OS.No.115 of 2015. 3.1. Respondent-plaintiff has filed suit for recovery of Rs.17,21,834/- with interest @ 18% per annum for the delayed payment on the principle amount of Rs.31,85,170/- for 32 to 39 months and for costs from the appellants-defendants jointly and severally. 3.2. It is stated in the plaint that the respondent-plaintiff is a registered Contractor and executing works under various Departments including SRSP. Appellant No.4-defendant No.4 entered into contract for execution of (11) works. The (11) works are as under: ANNEXURE STATEMENT SHOWING THE LIST OF WORKS CARRIED OUT BY M.SANTHOSH RAO, CONTRACTOR ON WHICH INTEREST PAYABLE FOR THE DELAY CAUSED ON THE PART OF DEPARTMENT 3.3. Respondent-plaintiff has commenced the work and completed the same within the agreement time without compromising in quality and quantity and the Incharge Field Engineers was duly satisfied and recorded the measurements as per actuals. The works done by the respondent-plaintiff have been checked by the competent Engineers and there is a delay in making payments for 26 to 35 months, the reasons for delay in payment is best known to the appellants-defendant Nos.1 to 4. The Government in their Memo Nos.3697/Ser.VII (V&E)/A1/2010- 22, dated 28.04.2011 and 3697/Ser.VII (V&E)/2010-26, dated 16.06.2011 i.e., after a lapse of about three years from the date of execution, issued instructions to inspect the works. 3.4. In fact, the works have been executed and recorded in different Measurement Books during the year 2009 itself. The reasons for the delay are not informed to the respondent-plaintiff by the appellants-defendant Nos.1 to 4 at any point of time, though there is delay in arranging payment from October, 2009 to January, 2013. The Government has responded on the anonymous complaints and ordered for inspection by team of Engineers other than the Engineers working under the control of Administrator-cum-Chief Engineer. The Government has responded on the anonymous complaints and ordered for inspection by team of Engineers other than the Engineers working under the control of Administrator-cum-Chief Engineer. The complaints were not only with regard to the quality of the said works but also regarding the conduct of the Engineers, needless to say that as per the provisions of Para 75 of A.P. PWD Code, that no cognizance need be taken on anonymous complaints. There are no comments of bad quality or quantity in the works executed by the respondent- plaintiff. The Administrator-cum-Chief Engineer, SRSP, Hyderabad has again issued instructions to the Superintending Engineer GVC-IV, L.M.D. Colony to inspect the works before making payment. The respondent-plaintiff has suffered financially without any fault on his side since the amount was borrowed from the local Financiers at a higher rate of interest. 3.5. As per clause 68 PS to APDSS, payment will be made to the Contractor under the certificate to be issued at reasonable frequent intervals by the Executive Engineer or by the Sub-Divisional Officer within (14) days of the date of each certificate. In the instant case, work completion certificates were issued by the Executive Engineer in August 2009. As per Para 22 of G.O.Ms.No.94, I & CAD, dated 01.07.2003, the payment of work bills shall be paid within one month. Eventually after (3) years the payment of work bills have not been released to the respondent-plaintiff. The appellants- defendants have not even chosen to furnish the reasons for the delay and that they are liable to pay damages/interest @ 18% for Rs.17,21,834/- and further interest till realization. The appellants-defendants have withhold the payment which the respondent-plaintiff is entitled for abnormal period of 32 to 39 months which is clear breach of contract and violation of Article 14 of the Constitution of India, also against the spirit of G.O.Ms.No.94, dated 01.07.2003. Respondent-plaintiff has got issued legal notice to the appellants-defendants on 21.05.2015 but they failed to give reply in spite of receiving the same. The claims above the value of Rs.50,000/- shall be decided by the Civil Court of competent jurisdiction as the suit is valued above Rs.15,00,000/- as such the I Additional District Judge Court has jurisdiction to try the suit. 4.1. Appellant No.4-defendant No.4 has filed his written statement and contended that the respondent-plaintiff was entrusted with 16 works and 11 works were executed. 4.1. Appellant No.4-defendant No.4 has filed his written statement and contended that the respondent-plaintiff was entrusted with 16 works and 11 works were executed. During departmental inquiry, it was found that there was deficiency in quantities in 8 works out of 11 numbers of works entrusted by appellant No.4-defendant No.4 for a value of Rs.77,806.46/- (deficient quantities). During inquiry, it was found that the respondent-plaintiff has recorded the works to a tune of Rs.32,52,063.90/- than actual work done for Rs.31,74,257.44/-. The respondent-plaintiff fraudulently got recorded Rs.77,806,46/- for which Vigilance & Enforcement inquiry is initiated. One G.Vasanth Reddy filed WP.No.15126 of 2009 seeking enquiry in the irregularities of the works executed under SRSP. Vigilance & Enforcement filed its Report No.13, dated 05.02.2010 which advised the Department to conduct detailed inquiry in all the maintenance works executed between 2007-08, 2008-09, 2009-10. The respondent-plaintiff with a malafide motive only reflected delay in payments for 11 works where fraudulent measurements were recorded for 8 number of works. The delay is due to Vigilance & Enforcement in view of the fault committed by the respondent- plaintiff and other Contractors in SRSP in getting recorded more measurements than what was actually done by them. 4.2. There is no dispute as to quality with regard to 11 works as shown in the Annexure by the respondent-plaintiff. As per 100% verification by the Department there is a deficiency in quantities in 8 number of works out of 11 works to a tune of Rs.77,806.46/-. Inspection of all the maintenance works of SRSP during the years 2007-08, 2008-09 and 2009-10 is still continuing. The respondent-plaintiff has no moral right much less the legal right to question the delay in payment and the suit is barred by law. 5. Appellant Nos.1 to 3-defendant Nos.1 to 3 have adopted the written statement of appellant No.4-defendant No.4. 6. The learned Trial Court has framed the following issues: 1. Whether the plaintiff is entitled for recovery of damages at Rs.17,21,834/- with interest as prayed for? 2. Whether the plaintiff was entrusted with 16 works in the name of M.Santhosh Rao as contended by defendants in their written statement? 3. Whether the Vigilance and enforcement enquiry and departmental enquiry it revealed that plaintiff got recorded more work than the work done by him to get more money as contended by the defendants in their written statement? 4. Whether the plaintiff was entrusted with 16 works in the name of M.Santhosh Rao as contended by defendants in their written statement? 3. Whether the Vigilance and enforcement enquiry and departmental enquiry it revealed that plaintiff got recorded more work than the work done by him to get more money as contended by the defendants in their written statement? 4. Whether there is any deficiency in quantity of work done by plaintiff? 5. Whether the plaintiff is entitled to claim interest? 6. To what relief? 7. Respondent-plaintiff is examined as PW.1 and got marked Exs.A1 to A6. On behalf of the appellants-defendants DW.1-G.Srinivas is examined and got marked Exs.B1 to B7. 8. The learned Trial Court after analyzing the evidence adduced by the parties has decreed the suit in favour of the respondent-plaintiff against the appellants-defendants jointly and severally for a sum of Rs.17,21,834/- with interest @ 18% per annum for the delayed payment on principal amount of Rs.31,85,170/- with future interest @ 6% per annum from the date of suit till the date of realization. 9.1. Learned counsel for the appellants-defendant Nos.1 to 4 submits that the learned trial Court has held that the respondent-plaintiff is not responsible for inordinate delay in execution of works and therefore the appellants are liable to make the payments and the learned trial Court has incorrectly placed burden on the appellants-defendants. Suit is barred by limitation, the said issue is not framed by the learned trial Court and incorrectly awarded interest @ 18% per annum contrary to the settled proposition of law. 9.2. The learned trial Court incorrectly held that the appellants-defendants are liable to pay the amount and also failed to consider Ex.B1-Enquiry Report and prayed to allow the Appeal by setting aside the impugned judgment. 10.1. Learned counsel for the respondent-plaintiff submits that the learned trial Court has properly appreciated the facts of the case and rightly decreed the suit. It is the appellants- defendants who made delayed payments and no interference is called for. In support of his contention, he relied on the decisions in the cases of (1) Rakesh Kumar Jain and Another Vs. State of U.P.Thr.Collector and Another , AIR 2007 SC 917 , (2) G.V.Malla Reddy & Co., Hyderabad Vs. A.P. State Trading Corporation Ltd., Hyderabad and Another , 2010 (4) ALD 331 (DB) , (3) M/s. S.N.Nandy & Co. Vs. In support of his contention, he relied on the decisions in the cases of (1) Rakesh Kumar Jain and Another Vs. State of U.P.Thr.Collector and Another , AIR 2007 SC 917 , (2) G.V.Malla Reddy & Co., Hyderabad Vs. A.P. State Trading Corporation Ltd., Hyderabad and Another , 2010 (4) ALD 331 (DB) , (3) M/s. S.N.Nandy & Co. Vs. M/s. Nicco Corporation Ltd., CS(OS) No.2448 of 2000 dated 23.02.2011 of the High Court for the State of Delhi and prayed to dismiss the Appeal. 10.2. Respondent-plaintiff counsel has filed his written submissions in support of his contention. 11. Heard both sides, perused the material. 12. Now the point for consideration is: Whether the judgment and decree passed by the learned trial Court in OS.No.115 of 2015 dated 27.02.2020 suffers from any perversity or illegality? If so, does it require interference of this Court? 13. Ex.A1 is the letter addressed by Sri B.Radha Kishan, B.E., Executive Engineer, Pochampad - SRSP Dam Site to the Administrator-cum-Chief Engineer, Sri Rama Sagar Project, LMD Colony, Karimnagar, dated 13.08.2012 which shows that the Non Destructive Tests (NDT) has been conducted to assess the compressive strengths of different components of Cement Concrete Works executed by the respondent-plaintiff for 10 works. Ex.A2 is the Statement showing the list of works Non-Destructive Tests (NDT) conducted on the works carried out by the respondent- plaintiff. There are 10 items in Ex.A2 which are the same as shown in the plaint except AB.No.165/EE dated 19.08.2009. It is apt to note that in the Remarks column it is stated that the works are satisfactory. Ex.A3 is the copy of Legal Notice, dated 21.05.2015 got issued by the respondent-plaintiff to the appellants-defendants claiming interest for delayed payments. Ex.A4 is the Government Memo No.3697/Ser,VII(V&E)A1/2010-26, dated 16.06.2011 wherein guidelines were issued for processing the payments. Ex.A5 is the copy of Government Memo No.3697/Ser.VII(V&E)A1/2010-22, dated 28.04.2011 wherein instructions were issued regarding making of payments to Water User Associations. Ex.A6 is the Extract of G.O.Ms.No.94, dated 01.07.2003, clause 22 states as under: “22. Payment of Bills: The contractors will be permitted to submit their work bills once in a month and payment will be made after proper check of quantity and quality within a reasonable time limit. The final payment of the contractor should not be delayed for want of certificate from the quality control staff”. 14. Payment of Bills: The contractors will be permitted to submit their work bills once in a month and payment will be made after proper check of quantity and quality within a reasonable time limit. The final payment of the contractor should not be delayed for want of certificate from the quality control staff”. 14. The evidence of the respondent-plaintiff is the replica of its plaint averments. In his cross-examination he stated that he has done the contract works in the year 2008-09 and basing on the Writ Petition an inquiry was conducted by the Vigilance and Enforcement Department in the year 2011. Respondent-plaintiff denied the suggestion that he did not complete his contract work within the prescribed period and delay was caused in making the payment due to Vigilance and Enforcement enquiry in the year 2011 and also denied the suggestion that he did not complete the entrusted work within time, as the delay occurred on his side thereby he received the amount after the delay. 15. Ex.B1 is the Vigilance and Enforcement Department Enquiry Report No.13, dated 05.02.2010 for the years 2007-08, 2008-09 and 2009-10. The recommendations made in the report is to recover an amount of Rs.31,65,754/- from the agencies concerned for the works which were recorded and paid but not actually executed in the field and also initiate criminal action against the Farmers Organizations who has misappropriated by claiming bogus bills without executing the works and also initiate action against the Officers (81 Nos.) for the lapses as recommended. Ex.B2 is the copy of the order in W.P.No.15126 of 2009, dated 18.08.2010. The order reads as under: “Action of the respondents in respect of alleged irregularities appears to be the cause of the Writ Petition which is responded to by the action taken report based on the advice of the Andhra Pradesh Vigilance Commission suggesting action proposed which stands initiated. In that view of the matter, no further orders are called for. Dismissed. We hope and trust that the process initiated shall be taken to its logical end expeditiously and of course in accordance with law”. 16. Ex.B3 is the Agreement No.166, dated 19.08.2009 for an amount of Rs.6,05,000/- for the works to be carried out which is serial No.2 of Ex.A2. Ex.B4 is the Measurement Book Record pertains to Agreement No.1218/B which is not the subject matter of the works and is not covered in Ex.A2. 16. Ex.B3 is the Agreement No.166, dated 19.08.2009 for an amount of Rs.6,05,000/- for the works to be carried out which is serial No.2 of Ex.A2. Ex.B4 is the Measurement Book Record pertains to Agreement No.1218/B which is not the subject matter of the works and is not covered in Ex.A2. Ex.B5 is a Measurement Book pertains to Agreement No.164. Ex.B6 Measurement Book pertains to Agreement Nos.204 & 205 and Ex.B7 is the Measurement Book pertains to Agreement No.206 which are at serial Nos.1, 4, 5 and 6 of Ex.A2. 17.1. Executive Engineer of appellant No.4-defendant No.4 is examined as DW.1-G.Srinivas whose evidence is with regard to the works entrusted to the respondent-plaintiff for 11 items which is in consonance with the statement furnished by the respondent- plaintiff stated supra at Para No.3.2 and the High Court has directed inquiry with regard to the works executed under SRSP Canal between 2007-10. 17.2. In his cross-examination he stated that the payment for the works done by the respondent-plaintiff was already made to him and the suit is for the interest amount, there is no dispute about the quality of the work done by the respondent-plaintiff and all the works were concluded and WP.No.15126 of 2009 is filed by G.Vasanth Reddy which is not related to the subject matter of the suit and they have issued orders to stop the works after filing of the Writ Petition, the payment was not made even on the date of WP.No.3823 of 2011 and Batch of cases, the said Writ Petitions were disposed of on 01.03.2011 directing the payments to be made by 31.03.2011. The payment has to be made within one month from the date of completion of the work vide G.O.Ms.No.94 dated 01.07.2003 (Ex.A6) and there is no clause in the Agreement for payment of interest on the delayed payment. DW.1 denied the suggestion that they are liable to pay interest on the delayed payment as claimed in the suit. 18. As per Ex.B5 the Measurement Book is dated 05.07.2009, Ex.B6 also records the same Measurement date and Ex.B7 records the date of Measurement as 05.06.2009. Respondent-plaintiff has annexed statement which is stated supra at Para No.3.2 which goes to show that date of recording the measurements for all the 11 items are in the year 2010 (for serial Nos.1 to 8); in the year 2009 (for serial Nos.9 to 11). Respondent-plaintiff has annexed statement which is stated supra at Para No.3.2 which goes to show that date of recording the measurements for all the 11 items are in the year 2010 (for serial Nos.1 to 8); in the year 2009 (for serial Nos.9 to 11). In Column 9 of the table shows the date of payment is on 29.01.2013 for all the 11 items executed by the respondent-plaintiff. Admittedly payments were made to the respondent-plaintiff after three years of recording the measurements. 19.1. The learned counsel for the appellants-defendant Nos.1 to 4 contended that separate suits have to be filed for recovery of interest and the respondent-plaintiff cannot join different cause of action pertaining to the works. The learned trial Court has taken into consideration the provisions of Order 2 Rule 3 of Civil Procedure Code, 1908, which contemplates that the respondent- plaintiff may join in the same suit several causes of action against the same defendants (appellants herein) in which they are jointly interested. 19.2. It is the case of the appellant No.4-defendant No.4 in the written statement that altogether 16 works were entrusted to the respondent-plaintiff but no material is filed by them to substantiate their contention. 20. Appellant’s counsel contended during the course of arguments that suit filed by the respondent-plaintiff is barred by limitation. Though the learned trial Court has not framed the issue of limitation in the issues but has answered the same in Para 19 of its judgment. As per Ex.A6 Para 22 states that Contractor is permitted to submit their work bills once in a month and the final payment of the Contractor should not be delayed for want of Certificate from the Quality Control Staff. Admittedly, measurement pertaining to Agreements of 11 in number were taken in the year 2009 and 2010 and the final payments were made to the respondent-plaintiff on 29.01.2013. Ex.A3-Legal Notice came to be issued on 21.05.2015 and the suit came to be filed on 15.06.2015 which is filed within three years from the date of cause of action and it cannot be said that the suit is barred by limitation. 20.1. In Rakesh Kumar Jain 1 , the Supreme Court has awarded simple interest @ 18% per annum till the date of actual payment. 20.2. 20.1. In Rakesh Kumar Jain 1 , the Supreme Court has awarded simple interest @ 18% per annum till the date of actual payment. 20.2. In G.V.Malla Reddy 2 , the High Court held that denial of interest @ 18% per annum by the Court below is not justified. 20.3. In S.N.Nandy3, the High Court of Delhi observed that “the cause of action would arise from the date when the assertion of claim was made, where the bill has not finally prepared, the claim made by the claimant is the accrual of cause of action. 21. The learned trial Court has properly appreciated the contentions of the parties in detail and rightly decreed the suit of respondent-plaintiff with interest @ 18% per annum holding that the appellants-defendant Nos.1 to 4 are jointly and severally liable to pay Rs.17,21,834/- for the delayed payment of principal amount of Rs.31,85,170/-. The payment of delay is mentioned in column No.10 of the statement stated supra at Para No.3.2. Appellants-defendant Nos.1 to 4 have not made out any case to interfere with the judgment and decree passed by the learned trial Court. This Court is of the view that Appeal deserves no consideration and the Appeal is liable to be dismissed and is accordingly dismissed. 22. In the result, Appeal is dismissed without costs. Interim Orders if any stands vacated. Miscellaneous application/s stands closed.