year 2002. Any modification or novation on a contract is permissible when both the parties thereto agree. If no interest or penalty could be levied in terms of the provisions of the contract, the purported Office Orders, which have no force of law, would not make a demand of interest enforceable in law. Having regard to the fact that the respondents did not initiate any proceeding and no demand was made prior to 2006, even the provisions of the Interest Act, 1998 would not be applicable in the facts and circumstances of this case. Even the respondents had not issued any notice directing that payment should be made on a particular date failing which interest would be charged. The only communication received by the petitioner from the respondents was made on 26.3.2002 in terms whereof, time for making payment was extended till 15.4.2002. It has not been denied or disputed that the petitioners have made payments prior to the said date. The respondents, therefore, could levy interest and/or penalty prospectively and not retrospectively. The imposition of penalty @ 150% of the dues, thus, even if otherwise valid, could have been enforced only with a prospective effect. Even otherwise, if the demand of interest is not sustainable, no question of levy of penalty could arise in respect of the license fee and the WPC Charges. The demand of interest and penalty, thus, being not authorized under the contract, must also be, in the facts and circumstances of the case, held to be without any authority in law.
