(Per Vilas V. Afzalpurkar, J.)

This appeal is filed by the State of Andhra Pradesh and two others against the judgment and decree of the learned Chief Judge, City Civil Court, Hyderabad in O.s.No.306 of 2008 dated 22.01.2009.

2. The appellants, who are defendants in the suit, are aggrieved by the judgment and decree aforesaid whereunder the defendants were directed to pay to the plaintiffs the suit claim of Rs.78,49,052/- within a period of 60 days from the date of judgment and in default to pay interest on the said sum at 6% per annum from 05.09.2007 till the date of realization. The parties are referred to herein as they are arrayed in the suit for the sake of convenience.

3. The facts, in brief, are as follows:

(a) The plaintiffs filed the aforesaid suit alleging that the second defendant acting on behalf of the first defendants entrusted three different works for excavation and formation Embankment at different stretches of kilometers of Kakatiya Canal under Sri Ram Sagar Project and during the execution of these works the first defendant cancelled the first set of work vide G.O.Ms.No.137 dated 22.06.1993. As per the said GO the Irrigation Department was permitted to recover 10% of the performance Bank Guarantee and the entire balance due to mobilization advance granted in the aforesaid contract works on furnishing bank guarantee through Vijaya Bank, M.G. Road, Secunderabad. As per the terms of contract the bank guarantee was 10% of the contract value towards performance security and mobilization advance was 15%, which would carry interest at 14% per annum to be recovered from the running bills. The said entire amount of mobilization advance was secured by bank guarantee.

(b) The plaintiffs allege that several bank guarantees were given concerning all the three works covering the performance bank guarantee and mobilization advance totaling to Rs.6,30,00,599/-. It is further alleged that irrigation department invoked all the bank guarantees on 08.10.1993 and realized the total amount covered by the said bank guarantees. The aforesaid collected amount is alleged to be in excess by a sum of Rs.3,00,02,078/-. In fact, Late M. Mohan Reddy, the original contractor, who is now represented by the plaintiffs, as his legal representatives, filed W.P.No.19646 of1994 and the bank also filed WP.No.7888 of 1993 for direction against the irrigation department to refund the sum of Rs.3,00,02,078/-. In the counter filed by the irrigation department though the receiving of the said excess amount was admitted, the quantum thereof was disputed. However, the refund of the said excess amount remained pending.

(c) It is further alleged that meanwhile, the bank initiated recovery proceedings against the plaintiffs by approaching the Debts Recovery Tribunal, Hyderabad vide O.A.No.467 of 1999 and in view of the common judgment of this Court in batch 0 writ petitions referred to above dated 16.10.2003, the bank impleaded the irrigation department as a party to the said OA. Thereafter, the plaintiffs made several representations dated 02.07.2007 onward requesting the Government to settle the issue, thereupon a sum of Rs.51,30,379/- was paid to the plaintiffs on 05.09.2007 by way of a cheque but no interest thereon was paid Plaintiffs thereupon demanded the irrigation department by a representatior dated 12.09.2007 to pay the interest inasmuch as for the bank guarantees, the bank has charged the plaintiffs 22% compound interest. The plaintiffs, therefore, demanded interest at least at 14% pee annum from 1993 till the date of payment The said representation was followed by subsequent representations dated 08.11.2007 and 01.12.2007 but the amount having been remained unpaid viz. the balance amount as well as the interest or the refunded amount, the plaintiffs issued legal notice dated 07.03.2008 under Section 80 of the Code of Civil Procedure, 1908 and as there was a denial by the defendant vide their reply dated 27.03.2008, the plaintiffs filed the p