Partly allowed

Cauvery Neeravari Nigama Limited v. Smt v Rekha

Karnataka HC29 Jul 2021RFA/1527/2011

Case brief

AI extract

What is this about?

Appeal and cross-objection against partial decree in a suit by a deceased contractor's legal representatives for unpaid bills, security deposit, royalty and penalty under a canal works contract. The High Court affirmed the decree of Rs.14,05,737 but reduced interest from 15% to 10.25% per annum, and dismissed the cross-objection.

What did the court decide?

Decree of Rs.14,05,737 affirmed with interest reduced from 15% to 10.25% per annum; cross-objection dismissed; deposit transferred to trial court; no costs.

Cauvery Neeravari Nigama Limited Vs Smt v… — Contract and Commercial Disputes | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 29^TH DAY OF JULY, 2021

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PRESENT

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THE HON’BLE MRS. JUSTICE S. SUJATHA

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AND

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THE HON’BLE MR. JUSTICE E.S. INDIRESH

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REGULAR FIRST APPEAL NO.1527 of 2011 c/w RFA CROB NO.2 OF 2013

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IN RFA NO.1527 OF 2011

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BETWEEN

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Cauvery Neeravari Nigama Limited Opposite to Kalamandir Vinoba Road

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Mysuru Rep. by its Managing Director Now Rep. by its General Manager (Finance).

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The Executive Engineer No.2 Hemavathi Canal Distributing Division Gubbi

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Tumkur District.

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The Chief Engineer No.2, Hemavathi Canal Zone Tumkur

Tumkur District.

… Appellants

(by Shri K S Bheemaiah, Advocate)

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AND

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Smt. V Rekha W/o late H A Vishweshwara Aged about 56 years

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Smt. Sumitha V. D/o late H A Vishweshwara Aged about 36 years

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Smt. Rajalakshmi Aruna M/o late H A Vishweshwara Aged about 81 years

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All are R/at No.462 9^th Main Road, 4^th Cross HAL III Stage Bengaluru-560 075.

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…Respondents

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(by Shri Y T Abhinay, Advocate for Shri N Byregowda, Advocate for R1 to 3)

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This Regular First Appeal is filed under Section 96 of CPC, against the Judgment and Decree dated 28.02.2011 passed in OS No.66/2005 on the file of the Additional Senior Civil Judge and CJM, Tumkur, partly decreeing the suit for recovery of money.

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IN RFA CROB NO.2 OF 2013

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BETWEEN

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Smt. V Rekha W/o late H A Vishweshwara Aged about 57 years

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Smt. V Smitha D/o late H A Vishweshwara Aged about 35 years

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Cross Objector 1 and 2 are R/at #462, 9^th Main Road 4^th Cross, HAL 3^rd Stage Bengaluru-560 075

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And Cross Objector No.1 and 2 Are represented by their SPA Holder Sri A Mohandas

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Smt. Rajalakshmi Aruna Since dead by her LR A Mohandas, Major S/o late H S Arunachalam R/at No.753, Ferns Paradise Doddanekkundi Marathahalli Bengaluru-560 037.

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...Cross Objectors

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(By Shri Y T Abhinay, Advocate for Shri N Byre Gowda, Advocate)

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AND

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The Government of Karnataka By its Secretary Water Resources Irrigation Department, M S Building Bengaluru-560 001.

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The Cauvery Neeravari Nigam Ltd.

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presently at Cauvery Bhavan Complex 4^th Stage, Behind ESI Hospital Gokulam Mysuru-570 020. By its Managing Director.

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The Executive Engineer No.2 Hemavathi Canal Distribution Division Gubbi, Tumkur District-572 101.

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The Chief Engineer No.2, Hemavathi Canal Zone Tumkur Tumkur District-572 101.

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...Respondents

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(by Shri T.P. Srinivas, GA for R1 vide Order dated 08.01.2021 (vakalat not filed)

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Shri K S Bheemaiah, Advocate for R3 and R4 Shri K S Bheemaiah accepts notice for R2

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V/o dated 08.01.2021 in RFA No.1527/2011 vakalat not filed)

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This RFA Crob No.2 of 2013 is filed in RFA No.1527 of 2011 under Section 96 Order XLI Rule 22 of Code of Civil Procedure, against the Judgment and Decree dated 28.02.2011 passed in OS.No.66 of 2005 on the file of the Additional Senior Civil Judge and JMFC, Tumkur, partly decreeing the suit for recovery of money.

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In this Regular First appeal and Cross Objection arguments being heard, judgment reserved, coming on for “pronouncement of orders”, this day, INDIRESH J., delivered the following:

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J U D G M E N T

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Regular First Appeal No.1527 of 2011 is filed by the defendants 2 to 4 against the judgment and decree dated 28^th February, 2011 passed in Original Suit No.66 of 2005 on the file of the Additional Senior Civil Judge and Chief Judicial Magistrate, Tumkur (for short, hereinafter referred to as 'the trial Court’) decreeing the suit in part. RFA Crob No.2 of 2013 is filed by the plaintiffs in Original Suit No.66 of 2005.

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For the sake of convenience, the parties in this appeal are referred to as per their rank and status before the Trial Court.

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Plaintiffs are the legal representatives of late H.A. Vishweshwara. It is the case of plaintiffs that deceased H.A. Vishweshwara was a Class-I Contractor (for short hereinafter referred to as ‘Contractor’). It is averred in the plaint that deceased H.A. Vishweshwara participated in the tender and he was allotted with the works contract for construction of cement concrete lining of Hemavati Canal by the defendants from 52,000 meters to 53,020 meters. Pursuant to acceptance of

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Tender, an agreement was entered into between the parties on 05^th March, 1996, with an estimate of Rs.99,06,872/- and with an agreed rate of Rs.1,12,95,935/-. It is further averred in the plaint that the Contractor complied with the terms and conditions of depositing earnest money of Rs.99,100/- and also paid security deposit of sum of Rs.13,52,936/- to the defendants. The time stipulated for completion of execution of work is six months. It is further stated in the plaint that the defendants failed to hand over the entire site with detailed engineering drawings and failed to visit the site in terms of agreement dated 05^th March, 1996. It is further stated that the defendants handed over the site to the Contractor on 12^th April, 1996 and thereafter, the Contractor initiated the implementation of the project, however, was unable to proceed with the work on account of release of water into the Canal and thereby the Contractor was constrained to stop the work due to seepage of water. In this regard, the Contractor addressed several letters to defendants stating about the difficulties in progress of work and as such, the Contractor addressed one more letter dated 02^nd January, 1997 to defendants and sought for extension of

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time. It is further averred in the plaint that, though the water in the Canal stopped in the month of February, 1997, however, seepage of water and collection of silt had accounted for delay in progress of the work, inter alia, the Contractor constrained to invest heavily than the requirement as contemplated under the Agreement on account of these unforeseen difficulties in completion of the project. In other words, the plaintiffs stated that the Contractor was constrained to do some additional work to complete the project which was otherwise than in the Agreement. Due to this, the Contractor suffered financial crisis and was forced to borrow loans at higher interest rate. It is further averred in the plaint that, even after resuming the work, water was released into Canal which forced the Contractor to stop the work for the second time and as such, sought extension of time and thereby, the Contractor completed the Project by 10^th July, 2000. It is the case of the plaintiffs that delay in completion of the project cannot be attributed on the Contractor. It is also stated in the plaint that the defendants have not complied with the terms of the agreement in respect of release of funds periodically and though the defendants were bound to

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supply raw materials and to supervise the site in addition to payment of bills, periodically, however, there was a delay in settling the bills by the defendants. Hence the plaintiffs state that, though the Contractor completed the project on 10^th July, 2000, however, the defendants failed to honour the final bills and therefore, the Contractor addressed letter to defendants No.3 and 4 on 30^th July, 2000 and same was rejected by the fourth defendant by order dated 24/25^th June, 2003. It is pertinent to mention here that the parties have entered into a supplementary agreement on 28^th March, 2002. It is further averred in the plaint that on account of denial of bills by the defendants, Contractor caused notice on 03^rd September, 2003, which came to be rejected by the defendant No.4 by letter dated 12^th September, 2003. Thereafter, the Contractor sent one more legal notice dated 20^th August, 2004 to the defendants. It is the case of the plaintiffs that the imposition of penalty of Rs.1/- per day amounting to Rs.1,333/- is without any basis and thereby, imposition of interest at the rate of 15% per annum on the said sum is erroneous. It is also stated by the plaintiffs that the Contractor is entitled for Rs.2,06,438.54 in respect of

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difference of amount and thereby, the plaintiffs are entitled for interest at the rate of 15% per annum on the said sum. It is also stated in the plaint that the Contractor had to borrow loan from the Bank as well as private parties on interest and thereby, the Contractor was made to forego an amount of Rs.23,54,761/towards interest to the borrowers, which the defendants are liable to pay. It is also stated in the plaint that defendants have recovered Rs.13,52,936/- at the rate of 6.5% per annum on the bill towards security deposit, which was agreed to be refunded after the completion of the work and thereby, it is the case of the plaintiffs that the balance of Rs.5,55,245/- was illegally claimed by the defendants. It is also further averred in the plaint that the defendants have illegally recovered Rs.1,73,878/and Rs.4,44,974/- towards royalty and same was required to be returned/refunded to the Contractor after completion of the work and therefore, the plaintiffs have filed suit for recovery of money in a sum of Rs.37,60,498/-, with interest at the rate of 15% per annum, from the defendants.

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After service of summons, defendants 1, 3 and 4

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entered appearance and defendant No.2 placed ex-parte. The contesting defendants 3 and 4 filed written statement denying the averments made in the plaint. It is the case of the contesting defendants that the said Contractor-H.A. Vishweshwara was allotted with the tender work of constructing Cement Concrete Lining of Hemavati Canal. They admit that the time limit for completion of the project was six months and accepted the factum of agreement dated 05^th March, 1996. It is the case of the defendants that in spite of reminders made by

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the Assistant Executive Engineer, the Contractor failed to execute the work as per the terms and conditions of the agreement stated supra. It is the grievance of defendants that the Contractor did not have sufficient wherewithal to complete the project and the method evolved by the Contractor was unplanned method of execution of work which has delayed the completion of the project. It is also stated by the defendants that Contractor failed to provide adequate raw material as required to complete the project, and as such, denied the averments made by plaintiffs with regard to supply of cement in

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time. It is also stated in the written statement that defendants 3 and 4 have entered into supplementary agreement dated 28^th March, 2002 with the Contractor and pursuant to same, the entire work was re-valued at Rs.2,96,05,919/- and therefore, defendants contended that the averments made in the plaint is far from truth. Insofar as payment of royalty is concerned, defendants contended that in view of clause 36(b) of Contract as per Schedule-C, the Contractor has to satisfy the royalty to the Government and therefore, denied the averments made in this regard. Lastly, defendants took up a contention that the suit is barred by limitation and as such, sought for dismissal of the suit.

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The trial Court, after considering the pleadings on record, formulated the following issues for its consideration:

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“ 1. Whether the plaintiffs prove that the deceased H A Vishweswara entered into an agreement with the defendants for construction of CC lining to Hemavathi on 05.03.1996?

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2. Whether the plaintiffs further prove that the defendants have failed to handover the entire

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site till 12.04.1996 inspite of the letter written by the deceased?

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3. Whether the plaintiffs prove that the deceased has suffered anticipated financial loss due to letting of water in the canal for trial run in the month of July 1996, February 1997, August 1998, due to above reasons the deceased was forced to stop the canal work, thereby he has sustained financial loss?

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4. Whether the plaintiffs further prove that the tender submitted by the deceased H A Vishweshwara on the prevailing rate of the materials but due to failure on the part of the defendants to hand over the site and failed to make payments for work done and also non supply of materials like cement and payment of bills and movement of vehicles in the site in the rainy seasons?

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5. Whether the plaintiffs are entitled to claim as stated in para 10(A) to (E) and 10(a to f) of the plaint?

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6. Whether the plaintiffs prove that they are entitled to claim decree of Rs.37,60,498/- with interest @ 15% per annum as prayed?

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7. Whether the defendants No. 3 and 4 proves that late H A Vishweswara has delayed the work without mobilizing men and machinery and unplanned method of work and not able to execute the work as per the terms and conditions of the agreement?

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8. Whether the defendant No.3 and 4 further proves that H A Vishweshwara went on seeking time for every six months and extended the time of completion of work upto July 2000. Therefore the first defendant took action to levy penalty of Rs.1/-per day, hence, the plaintiff is not eligible to repay the penalty amount, which was levied strictly in terms and conditions of the agreement?

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9. Whether defendant Nos. 3 and 4 proves that the defendants have made payment as and when the bills submitted, therefore they are not entitled to pay interest to compensate and also a supplementary agreement NO.11/01-02 therefore the suit filed by the Plaintiff is after thought?

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10. Whether the defendant Nos. 3 and 4 proves that the suit is barred by limitation as contended in para-12 of the written statement?

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11. Whether the plaintiffs are entitled to get decree as prayed for?

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12. What decree or order? ”

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In trial, plaintiffs have examined PW1-Power of Attorney holder of the plaintiffs. PW1 is the brother of Contractor–deceased H.A. Vishweshwara. Plaintiffs have produced 17 documents and same were marked as Exhibits P1 to P17. Defendant No.3 was examined as DW1 and produced 26 documents and same were marked as Exhibits D1 to D26. The Trial Court, after considering the material on record, by its judgment and decree 28^th February, 2011, decreed the suit in part and directed the defendants to pay Rs.14,05,737/- with interest at the rate of 15% per annum from the date of suit till realisation. Being aggrieved by the aforementioned judgment and decree passed by the trial Court, decreeing the suit in part, directing the defendants to pay Rs.14,05,737/- with interest at 15% per annum, defendants 2 to 4 have preferred Regular First Appeal No.1527 of 2011. Cross-objection No.2 of 2013 is filed by plaintiffs, contending that the entire claim made in the plaint was rejected erroneously by the trial Court.

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We have heard Shri K.S. Bheemaiah, learned counsel appearing for the appellants/defendants 2 to 4; Shri Y.T. Abhinay for Sri N. Byre Gowda, learned counsel appearing for the cross objectors/plaintiffs; and Sri T.P. Srinivas, learned Additional Government Advocate appearing for Respondent No.1 in the Cross-objections.

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Though appellants have urged several grounds in the memorandum of appeal, however, Sri K S Bheemaiah, learned counsel appearing for the appellants, confines his arguments with regard to following submissions:

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(a) Learned counsel appearing for the appellants, submitted that the contractor executed the work beyond 125% during the year 1997-98 which is contrary to Clause 13(b) of the Agreement dated 05^th March, 1996. He further contended that, in view of extension of time and increase in rate for the work done beyond 125%, the SR prevailing for the 1997-98 is applicable i.e. Rs.1,044.58 per cubic meter and not strictly in terms of clause 13(ii) of the agreement and this aspect of the matter was not considered by the trial court;

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(b) learned counsel for the appellants further contended that though there is no dispute with regard to refund of balance security deposit of sum of Rs.5,55,245/-, the appellants have deducted Rs.1,73,878/- towards royalty and Rs.1,54,819/towards excess rate paid, so also, the initial payment was wrongly calculated at Rs.1,261.99 instead of Rs.1,044.58 per cubic meter and therefore, having deducted the aforementioned amount, the appellants are liable to refund Rs.2,26,548/- instead of Rs.5,55,245/-. The deductions made by the appellants was not properly appreciated by the trial Court;

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(c) learned counsel appearing for the appellants submitted that the contractor has extracted the minerals from private quarry owners and when such being the case, the plaintiffrespondents are bound to submit the mineral dispatch permit issued by the private quarry owners and as such, the appellants have deducted the royalty from the final bill of the Contractor and same is in accordance with the judgment of this Court in Writ Appeal No.4892 of 2004 disposed of on 28^th March, 2007. Emphasising on these aspects, he argued that, if the contractor

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has purchased minerals from private quarry owners, the contractor is not liable to pay the royalty charges if documents are produced in that regard and therefore, it is the burden on the Contractor to produce the relevant document to prove that the minerals were extracted from the private quarry owners and in the instant case, since plaintiffs failed to produce such documents, and as such, appellants have deducted the royalty from the plaintiffs. He further contended that the trial Court has not properly considered the ratio laid down by this Court in writ Appeal No.4892 of 2004 and as such the impugned judgment and decree passed by the trial Court requires to be set aside;

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(d) learned counsel appearing for the appellants further argued that though the agreement entered into between the parties had not provided for imposition of interest, however, the trial Court erred in awarding interest at the rate of 15% per annum on the amount decreed in the suit and therefore, he submitted that the impugned judgment and decree passed by the trial Court requires to be set aside.

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Per contra, Sri Abhinay, learned counsel appearing for the cross-objector/plaintiffs contended that the relief sought for by the plaintiffs was not considered in its entirety by the trial Court. He further contended that some of the bills raised by the Contractor were not considered by the appellant/defendants. He further contended that there is inordinate delay for settlement of the bill by the appellants, resulting in plaintiffs availing loan from private persons paying higher interest rate, had cost the plaintiffs heavily. He further contended that there is a delay of 2,700 days in clearing the bills by the defendants for which the plaintiffs are entitled for interest with exemplary cost from the defendants. Accordingly, Sri Abhinay, learned counsel appearing for the plaintiffs submitted that the relief sought for in the crossobjection requires consideration in this appeal.

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Having heard the learned counsel for the parties at length, we have perused the original records. In the light of the arguments advanced by the parties, the following points would arise for our consideration:

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(i) Whether the finding recorded by the trial Court decreeing the claim of the plaintiffs, is just and proper?

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(ii) Whether the award of interest at the rate of 15% per annum on the decretal amount is justifiable?

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(iii) Whether the impugned judgment and decree passed by the trial Court is to be interfered with in this appeal?

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(iv) What order?

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Perusal of the record would clearly indicate that the undisputed facts of the case are that, the appellants invited tender on 28^th February, 1996 for construction of cement concrete lining of Hemavati Canal from 52.00 to 53.20 kilometers. In pursuance of the acceptance of bid, work order was issued to the Contractor and an agreement was entered into between the parties as per Exhibit P17, on 05^th September, 1996. It is stated in the agreement that the period of completion of the work is six months, however, same was extended from time to time at the instance of both the parties and finally the work was completed on 10^th July, 2000. Perusal

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of the testimony of PW1 substantiate that the delay for completion of the work was on account of the delay in handing over the possession of the site as well as seepage of water, inter alia, the time was extended, mutually between the parties. However, the DW1, in his cross-examination dated 20^th June, 2008, deposed as follows:

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“PÁè¸ï 2 (©) ¥ÀæPÁgÀ ¥Àæw wAUÀ¼ÀÄ PÉ®¸ÀzÀ PÁAiÀÄðPÀæªÀÄzÀ ¥ÀnÖAiÀÄ£ÀÄß ¤ÃqÀ¨ÉÃPÁVzÀÄÝ. D §UÉÎ FUÁUÀ¯ÉÃ ªÉÄÃ¯É PÉÆnÖgÀÄªÀ ¸ÁPÀëöåzÀ°è PÁgÀtUÀ½AzÀ DV®è JAzÀÄ w½¹gÀÄvÉÛÃ£É. 05/03/1996 gÀ PÀgÁj£ÀAvÉ ¤UÀ¢vÀ CªÀ¢üAiÀÄ°è £ÁªÀÅ PÉ®¸ÀªÀ£ÀÄß ¥ÀÆtðUÉÆ½¹®è JAzÀÄ ¢£À MAzÀPÉÌ 1 gÀÆ¥Á¬Ä zÀAqÀ «¢ü¹gÀÄªÀgÀÄ JAzÀgÉ ¤d. D jÃw zÀAqÀ ºÁPÀÄªÀAwzÀÝgÉ DgÀÄ wAUÀ¼À M¼ÀUÀqÉAiÉÄÃ ºÁPÀ¨ÉÃPÁVvÀÄÛ JAzÀÄ ¸ÁQë £ÀÄr¢gÀÄvÁÛgÉ. D §UÉÎ £ÀªÀÄUÉ MAzÀÄ CªÀPÁ±À PÉÆnÖ®è ªÀÄvÀÄÛ D jÃw zÀAqÀ«¢ü¹zÀÄÝ ¸ÀªÀÄAd¸ÀªÁzÀ zÀAqÀªÀ®è JAzÀÄ w½¹gÀÄvÁÛgÉ.”

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Careful examination of the testimony of PW1 and DW1 would establish the fact that the parties have entered into

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supplementary agreement with regard to giving consent for the expenditure incurred in the project as per the final bill. However, DW1 in his cross-examination deposed that as the appellant has not received any funds from the Government, the appellants were constrained to enter into supplementary agreement with the Contractor with certain modifications. DW1 further deposed that, withholding of royalty is as per the terms of the tender. Exhibit P14, letter dated 26^th April, 1999, addressed by the Assistant Executive Engineer, Hemavati Canal, to the Contractor, discloses that the site was handed over belatedly and same is not in consonance with the tender document. At paragraph 14 of the Affidavit in Chief Examination, DW1 admits that the defendants shall pay an amount of Rs.2,26,548/-, after deducting excess amount of Rs.1,54,819/-. DW1, in his cross-examination dated 19^th February, 2009 has deposed thus:

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CzÀPÉÌ £ÁªÀÅ §rØAiÀÄ£ÀÄß PÉÆqÀ¨ÉÃPÁUÀÄvÀÛzÉ JAzÀgÉ ¤d. 5,55,000.00 ªÀÄvÀÄÛ CzÀPÉÌ ±ÉÃ. 15 gÀAvÉ §rØAiÀÄÄ ¸ÉÃj MlÄÖ gÀÆ. 8,61,694.00 PÉÆqÀ¨ÉÃPÁUÀÄvÀÛzÉ. JAzÀgÉ ¸ÀÄ¼ÀÄî. Royalty Clause E®è¢zÀÝgÀÆ ¸ÀºÀ £Á£ÀÄ D jÃw Royalty »r¢zÉÝÃªÉ JAzÀgÉ ¸ÀÄ¼ÀÄî. Royalty EnÖgÀÄªÀ £ÀªÀÄä°è zÁR¯Áw EgÀÄvÀÛzÉ. Royalty »r¢gÀÄªÀÅzÀÄ ¤d, DzÀgÉ CzÀÄ ªÁ¥À¸ÀÄì PÉÆqÀ¨ÉÃPÉ£ÀÄßªÀÅzÀÄ ¸ÀÄ¼ÀÄî. D jÃw Royalty AiÀÄ£ÀÄß £ÁªÀÅ ªÁ¥À¸ÀÄì UÀÄwÛUÉzÁgÀjUÉ PÉÆqÀ¨ÉÃPÁUÀÄvÀÛzÉ JAzÀgÉ ¸ÀÄ¼ÀÄî. D jÃw ªÀÄtÄÚ ªÀÄvÀÄÛ RjÃ¢ ªÀiÁrzÀ eÁUÀzÀ §UÉÎ ºÁUÀÆ ©°ØAUï ªÉÄmÉÃjAiÀÄ¯ï ElÖ «ZÁgÀzÀ §UÉÎ £ÁªÀÅ Royalty ªÁ¥À¸ÀÄì PÉÆqÀ¨ÉÃPÁUÀÄvÀÛzÉ JAzÀgÉ ¸ÀÄ¼ÀÄî. D §UÉÎ 4,59,659.00 royalty AiÀÄ£ÀÄß PÉÆqÀÄªÀ CªÀ±ÀåPÀvÉ EgÀÄªÀÅ¢®è. AiÀiÁªÀÅ AiÀiÁªÀÅzÀPÉÌ ¥É£Á°Ö ºÁQzÉÝÃªÉAzÀÄ vÉÆÃj¸À®Ä AiÀiÁªÀÅzÉÃ zÁR¯ÁwAiÀÄ£ÀÄß £ÁåAiÀiÁ®AiÀÄzÀ ªÀÄÄAzÉ ºÁdgÀÄ ªÀiÁr®è.”

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On appreciation of the aforementioned deposition of the DW1, it would indicate that there is no document with the appellant with regard to payment of royalty to the Government

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and to recover the said sum from the Contractor. Even in this appeal, no document was produced by the appellants to fortify their contentions claiming reimbursement of royalty from the Contractor, despite relying upon the judgment of this Court in Writ Appeal No.4892 of 2004. We have no dispute with regard to payment of royalty by the Contractor to the appellants herein. However, in view of the admission made by DW1, as mentioned above, no documents were produced by the appellants in this regard and therefore, the finding recorded by the trial Court with regard to refund of penalty amount of Rs.1,942/- and refund of royalty of Rs.4,46,659/- is just and proper. Further, DW1 in his cross-examination on 09^th July, 2009 has deposed as follows:

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“ ¥sÉÊ£ï ¥Àæ¥ÉÆÃd®ì£ÀÄß JQìPÀÆåµÀ£ï £À°è vÀqÀªÁzÀ

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¸ÀAzÀ¨sÀðzÀ ¸ÀªÀÄAiÀÄzÀ°è ºÁPÀÄvÉÛÃ£É. ¤±Á£É r- 17 gÀ PÀ®A.£ÀA. 8 gÀ°è PÀAmÁæPÀÖgï «±ÉéÃ±ÀégÀAiÀÄå PÉ®¸À vÀqÀªÁzÀ §UÉÎ ¥ÀvÀæUÀ¼À£ÀÄß §gÉ¢gÀÄvÁÛgÉ JAzÀgÉ ¤d. £ÀªÀÄä E¯ÁSÉAiÀÄ ªÀw¬ÄAzÀ ¸ÀzÀj ¥ÀvÀæUÀ½UÉ GvÀÛgÀ PÉÆlÖ §UÉÎ £À£ÀUÉ UÉÆwÛgÀÄªÀÅ¢®è. ¤±Á£É r- 19 gÀ ¥ÀæPÁgÀ 19992000 gÀ ¸Á°£À°è 1236.40 gÉÃmï ¥Àæ¥ÉÆÃd¯ï EgÀÄvÀÛzÉ. CzÀgÀ ¥ÀæPÁgÀ £ÁªÀÅ ©®Äè PÉÆnÖgÀÄvÉÛÃªÉ JAzÀgÉ ¸ÀjAiÀÄ®è.

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¶123

Having taken note of the deposition of DW1 as stated above, we are of the considered view that the finding recorded by the trial Court on imposition of penalty and refund of royalty is correct and requires to be affirmed in this appeal.

¶124

In respect of the claim made by the Contractor on short payments, the trial Court has awarded Rs.82,442/-. In this regard, we have carefully considered the contentions raised by the defendants, particularly, at paragraph 11 of the written statement and paragraph 41 of the impugned judgment. The finding recorded by the trial Court is that, the defendants have finalised the bill for only Rs.1,044.58 instead of Rs.1,261.99 per cubic meter and the balance of Rs.217.48 per cubic meter ought to have been taken into consideration while clearing the final bills and therefore, the contention raised by the learned counsel for the appellants, cannot be accepted.

¶125

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In respect of refund of balance security deposit is concerned, we have noticed at page 67 of the Tender Document wherein Clause (f) under Security Deposit, provides for “refund of security deposit”. The same reads as under:

¶127

(f) The security deposit lodged/paid by a contractor shall be refunded to him after the final bill is paid or after twelve months, from the date of completion of work, during which period the work should be maintained by the contractor in good order, whichever is later.”

¶128

In view of this undisputed clause which provides for

¶129

refund of security deposit, no doubt there is a delay in completion of the project by the Contractor, however, seepage of water into Canal caused delay in completion of the work and same is not disputed by the defendants in their pleadings or during their evidence. Notably, the Contractor has addressed letters to the defendants, seeking extension of time and same was accepted by the defendants without any demur and in that view of the matter, withholding the security deposit by the defendants is unjust, and therefore, the finding recorded by the trial Court with regard to refund of security deposit by the

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¶131

defendants in favour of the Contractor is accepted and liable to be affirmed.

¶132

Be that as it may, we have also considered the arguments advanced by the cross-objectors claiming relief in entirety and we are of the opinion that it is a suit for recovery of money and same is based on the documentary evidence, inter alia, taking into consideration the oral evidence of PW1 and DW1, the finding recorded by the trial Court is just and proper, leaving no room for accepting the contentions of the crossobjectors to decree the suit in its entirety.

¶133

Lastly, with regard to ground urged by the appellant with regard to limitation and insofar as payment of interest as claimed by the cross-objector/plaintiffs is concerned, we have noticed that the trial Court has decreed the suit with interest at the rate of 15% per annum. Perusal of the facts would indicate that the parties have entered into an agreement on 05^th March, 1996 and Engineering drawings were made available to the Contractor beyond 12^th April, 1996, though there is provision contained in the tender document to complete the project within

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six months, and thereafter, delay in completion of the project was due to seepage of water into canal, in the meanwhile, the Contractor sought for extension of time beyond six months and finally completed the work by 10^th July, 2000. However, the defendants failed to honour the final bills in time and also running bills were not settled, and as such, the ground urged by the appellant/defendants with regard to dismissal of suit on the ground of limitation, cannot be accepted. Taking into account the facts and circumstances of the case and the fact that the original plaintiff (Contractor) died and legal representatives of the Contractor were brought on record; as well, the cause of action for the suit arises during 2005; Table-47 i.e. the structure of interest rates reveals that the interest rate for the year 20042005 is 10.25% per annum and the same is extended in these proceedings instead of payment of interest at the rate of 15% per annum as awarded by the trial Court. We have carefully reappreciated the evidence on record and examined the finding recorded by the trial Court with regard to the issues framed therein and taking into account the factual aspects in totality, we are of the view that the trial Court rightly decreed the suit in

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part for sum a of Rs.14,05,737/- with cogent reasons and we do not find any merit in the argument advanced the learned counsel appearing for the appellant/defendants to interfere with the decretal amount, however, we find substance in the arguments advanced with regard to reduction in interest rate. In the result, the finding recorded by the trial Court directing the defendants to pay Rs.14,05,737/- is just and proper. However, for the foregoing reasons, we have reduced the interest rate from 15% to 10.25% per annum on the decretal amount. Hence, we pass the following:

¶138

O R D E R

¶139

i) RFA Cross-objections dismissed;

¶140

ii) Regular First Appeal allowed in part;

¶141

iii) Judgment and decree dated 28^th February, 2011 passed in Original Suit No.66 of 2005 on the file of the Additional Senior Civil Judge and CJM, Tumkur is affirmed on decreeing the suit and directing the defendants to pay Rs.14,05,737/to the plaintiffs, however, with interest at the

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¶143

rate of 10.25% as against 15% per annum ordered by the trial Court;

¶144

iv) The amount in deposit before this Court, is directed to be transferred to the trial Court forthwith.

¶145

iii) No order as to costs.

¶146

Sd/JUDGE

¶147

Sd/JUDGE

¶148

lnn

Cauvery Neeravari Nigama Limited v. Smt v Rekha

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Cauvery Neeravari Nigama Limited v. Smt v Rekha

Case brief

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