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Judgment
K.L. Manjunath, J.—The appellants are challenging the legality and correctness of the judgment and decree passed by Civil Judge (Sr.Dn.), Sagar dated 30.11.2004 passed in O.S. No. 74/1988 wherein the suit filed by the respondent/plaintiff has been decreed for a sum of Rs. 1,68,670/- with interest at 9% p.a. from the date of suit till realisation. Heard Learned Counsel for the parties.
The facts leading to this case are as hereunder:
The plaintiff is an electrical contractor. The appellants/defendants awarded contract to draw electric lines to 8 villages in Soraba Taluk which work was required to be completed on or before 30.6.1985. According to the plaintiff, he completed the work and he also did certain extra work as recorded in the measure book maintained by the defendants. Contending that the appellants/defendants have deducted a sum of Rs. 86,235/- by way of penalty and failed to refund the security amount of Rs. 45,651/- and claiming loss of income of Rs. 30,000/- and penalty levied on the respondent in a sum of Rs. 2,922.30ps. and Rs. 20,991.43ps. and calculating interest at 18% p.a. on the amount not settled to the plaintiff and also claiming interest payable on the refund of security deposit and penalty, suit was filed for Rs. 2,19,234.73ps. with interest at 18% p.a.
The defendants filed written statement contending that the suit filed by the plaintiff was not maintainable and the amount was deducted in respect of work not executed by the plaintiff. It is also their case that since plaintiff did not execute the work within the stipulated time penalty levied in terms of the agreement and that the security deposit has been forfeited due to non-repairing the defective transformers within the stipulated time and requested the court to dismiss the suit of the plaintiff.
Based on the pleadings the following issues were framed by the court below:
Whether the plaintiff proves that he completed the work regarding supply lines for rural electrification of eight villages in Sorab Taluk before 30.6.1985 as per the terms of agreement?
Whether defendants 1 and 2 prove that as per terms of agreement the time for completion of suit contract work was before the end of February 1985?
Whether plaintiff proves that he has spent Rs. 86,221.30 ps. as contended in para 5 of the plaint for suit contract work as per terms of agreement?
Whether defendants 1 and 2 prove that plaintiff is not entitled to claim the amount for extra items of work, as claimed in para 5 of the plaint?
Whether plaintiff proves that he is entitled to recover Rs. 30,000/- as damage from defendants?
Whether defendants 1 and 2 prove that penalty of Rs. 16,235.70 recovered from plaintiff is as per terms of agreement?
Does defendants 1 and 2 prove that as the plaintiff has failed to rectify the defects by replacing faulty transformers and burnt insulators the security deposit of plaintiff is held up?
Whether defendants 1 and 2 prove that the defects in transformers and insulators attended by them by replacing defective materials, they are entitled to recover cost of replaced materials like transformers insulators out of security deposit?
Whether defendant No. 3 is neither necessary nor proper party to this suit?
Whether the suit against defendant No. 3 is not maintainable as contended in para 4 of written statement?
Whether the plaintiff is entitled for the reliefs asked for?
What decree or Order?
Additional Issues:
Whether the suit filed is maintainable as contended in para 1 of the written statement of defendant Nos. 1 and 2?
Whether the defendants 1 & 2 prove that they are entitled the deduction security amount of Rs. 45,651/- ?
Whether the defendants 1 & 2 prove that they are entitled the 18% of interest Rs. 29,991.43 ps. deducted towards interest upto 30.6.1987. interest as penalty Rs. 2,992.30 and interest on security deposit of Rs. 8,214/- ?
Whether the defendant 1 & 2 prove that the benefit of the materials made not available even though technically the permission was not obtained?
In order to prove their respective contentions on behalf of the plaintiff, 2 witnesses were examined. Between them PW1 is the plaintiff and one Nagaraja was examined as PW2. Plaintiff relied on Exs.P1 to P40. Two officials of the defendants were examined as DW1 and DW2 and defendants relied upon Exs.D1 to D10.
The Trial Court after considering the entire evidence held issues 1, 3, 9, 10 and additional issues 2 and 4 in affirmative: issues 2, 4, 6 to 8 and additional issue No. 1 in negative and issue No. 5 does not survives as per findings given in RFA No. 409/1992 and issue No. 11 and additional issue No. 3 in partly affirmative and ultimately suit of the plaintiff came to be decreed for Rs. 1,68,670/- with interest at 9% per annum from the date of suit till the date of realisation. Challenging the legality and correctness of the same, defendants have preferred this appeal.
The main contention of Mr. Rudragowda is that the Trial Court has committed an error in holding that the appellants have to refund a sum of Rs. 16,221.30ps. which was deducted in the bill submitted by the respondent. According to him, the appellants are not liable to pay the said sum since the aforesaid claim was not the subject matter of the agreement. He further submits that when the plaintiff has failed to replace the defective transformers, the plaintiff is not entitled for refund of security deposit in a sum of Rs. 45,651/- . He also submits that since the work in respect of 2 villages were not completed within the stipulated time, the defendants were entitled to recover penalty in a sum of Rs. 16,235/- . He further contends that awarding of interest at 9% p.a. on the aforesaid amount and further awarding at 9% p.a. from the date of suit till the date of realisation is also incorrect and not liable to be paid by the appellants.
According to Mr. Hegde, Learned Counsel for the respondent the measurement books are maintained by the appellant and measurements in the book are recorded by the engineer''s of the defendants and such measurements would be recorded based on the actual work executed by the plaintiff. When such being the case, deduction of Rs. 86,221.30ps. has been rightly held as illegal by the court below. According to him, when no material is placed before the Court to show that the defendants had pointed out the defective transformers alleged to have been supplied by the plaintiff and that there is a failure on the part of the plaintiff to replace the same, the question of forfeiting the security deposit does not arise. According to him, no evidence is placed before the Court to show that the plaintiff has failed to replace the defective materials and there is no order passed by competent authority to forfeit the security deposit.
Similarly, he contends that when the work has been completed in respect of the villages within the time stipulated or extended period, the question of recovering penalty from the plaintiff does not arise. Therefore, The Trial Court is justified in setting aside the penalty levied on the plaintiff. He lastly contends that the interest awarded by the court below does not call for any interference by this Court, as levying interest at 9% cannot be stated to be arbitrary or excessive. In the circumstances, he requested the court to dismiss the appeal.
Having heard Learned Counsel for the parties what is required to be considered by this Court is whether the decree granted by the court below is required to be interfered with or not?
The awarding of contract to draw the electrical lines in respect of 8 villages of Soraba Taluk is not disputed by the parties. The dispute in this appeal is in regard to deduction of Rs. 86,221.30ps. from the bills submitted by the plaintiff. Admittedly, measurement book is maintained by the defendants and whatever work executed by the plaintiff would be entered into by the engineers after considering the work executed by the plaintiff. DW1 has admitted the correctness of entries made in the measurement book. If it is so, it is for the defendants to prove why and how Rs. 86,221.30ps. has been deducted from out of the bills submitted by the plaintiff. When DW1 and DW2 have admitted execution of the work by the plaintiff, when there is no satisfactory explanation for deducting the aforesaid amount, when the work executed by the plaintiff is reflected in the measurement book, we are of the view that the Trial Court is justified in awarding the decree in respect of aforesaid claim.
DW1 in his cross examination has admitted that there is nothing to show that the plaintiff has failed to replace the defective transformers pointed out by the department. However, there is no correspondence to show that the transformers supplied by the plaintiff were defective and that the contractor has failed to replace the defective material, the question of forfeiting the security deposit will not arise. Therefore, the said point has to be answered against the appellant.
When the defendants have extended the time to complete the work as per Ex. P8 and when the plaintiff has completed the work within the extended period, the question of recovering penalty for not executing the work within the extended period does not arise at all. Therefore, the finding of the court below on the aforesaid point is also required to be confirmed.
Then the only question to be answered by us would be whether levy of interest at 9% p.a. till the date of suit and further awarding interest at 9% p.a. from the date of suit till the date of realisation is justified or not? Admittedly, the plaintiff has accepted the payment without raising any objection and it is also not his case that he received his payment without prejudice to right to claim for the balance amount. When the plaintiff has waited 3 years to institute the suit, we are of the view that he is not entitled for interest on the aforesaid 3 claims till the date of filing the suit. Accordingly, we set aside awarding of Rs. 20,564/- by the court below and similarly we are of the view that considering the order of contract and execution of the work, awarding of interest at 9% p.a. is on the higher side. Accordingly, we reduce the awarding of interest from the date of suit till the date of realisation from 9% to 6%. In the result, appeal is allowed in part. The judgment and decree passed by the court below is modified by holding that the respondent/plaintiff is entitled for a decree for Rs. 1,48,107.30ps. with interest at 6% p.a. from the date of suit till the date of payment. If any amount is paid by the appellant during the pendency of this appeal, the same shall be adjusted out of the decreetal amount.