JUDGMENT :

Prashant Kumar Mishra, J.

The short question that arises for determination in these writ appeals is whether, despite there being a clause in the agreement disentitling the contractor to claim interest upon any guarantee fund or payments in arrears, nor upon any balance which may, on the final settlement of his accounts, found to be due to him and despite there being an arbitration clause or remedy of preferring civil suit, the writ court in exercise of powers under Article 226 of the Constitution of India can award interest on the amounts due to him pursuant to the work carried out by him in terms of the agreement.

2. All the writ appeals involve common questions of law and fact. Therefore, they are heard analogously and are being disposed of by this common judgment. For the purpose of disposal, W.A.No.484 of 2022 is taken as lead case.

3. Undisputedly, writ petitioners were awarded different contracts pertaining to construction of compound wall, barbed wire fencing etc., by the authorities/officers in the Department of Agriculture, Government of Andhra Pradesh. It is also not in dispute that consequent to the tender process and award of contract, similar agreements as have been filed with the material papers in the writ appeals, were executed between the parties and, further, upon execution of work, some amounts were paid to the contractors, but not the entire amounts as claimed by the contractors in terms of the contract. The impugned orders refer to the contention of the writ petitioners that estimated works have been completed but final payment has not been made despite representations submitted by them.

4. While allowing the writ petitions, the learned single Judge directed the respondents (appellants herein) to clear the bills submitted by the writ petitioners and release the payments with interest at 12% p.a., referring to the earlier decision in S. Srinivas v. State of Andhra Pradesh and others, reported in 2021 Lawsuit (AP) 390.

5. Assailing the impugned orders insofar as they concern award of interest at the rate of 12% p.a. on the amount due to the writ petitioners/contractors, learned Advocate General appearing for the appellants has argued that in terms of clause 43 of the Conditions of Contract, writ petitioners are not entitled to interest; therefore, the appeals deserve to be allowed. He would refer to the judgments in Orissa State Financial Corporation v. Narsingh Ch. Nayak and others, reported in (2003) 10 SCC 261, Garg Builders v. Bharat Heavy Electrical Limited, reported in AIR 2021 SC 4751 and Assistant Excise Commissioner and others v. Issac Peter and others, reported in (1994) 4 SCC 104.

6. Per contra, learned counsel for the writ petitioners have submitted that interest is always held admissible as compensation for wrongful withholding of the principal sum, as the person is deprived of the use of his money to which he is legitimately entitled. According to them, the words “interest” and “compensation” are used interchangeably. The following judgments of the Hon’ble Supreme Court and High Courts are referred :

Punjab and Sind Bank v. Allied Beverage Company Private Limited and others, reported in (2010) 10 SCC 640;

Secretary, Irrigation Department, Government of Orissa and others v. G.C. Roy, reported in (1992) 1 SCC 508;

Alok Shanker Pandey v. Union of India and others, reported in (2007) 3 SCC 545;

J. Devender Reddy v. Kakatiya University and another, reported in 2015 (3) ALD 97;

Edward B. John v. State of Kerala, reported in [2015 (3) KHC 867];

ABL International Limited v. Export Credit Guarantee Corporation of India Ltd., reported in (2004) 3 SCC 553;

S. Srinivas v. State of Andhra Pradesh and others, reported in 2021 Lawsuit (AP) 390;

M/s. Karnataka State Forest Industries Corporation v. M/s. Indian Rocks, reported in (2009) 1 SCC 150, and

Agni Aviations Consultant and others v. the State of Telangana and others, reported in 2020 SCC OnLine TS 1462.

7. The agreement executed between the parties forming pa