The main legal point established in this judgment is that the award of escalation charges and interest in a commercial contract dispute should be based on proper pleading, proof, and consideration of the applicable law, including the terms of the contract, statutory provisions, and mercantile usage.

JUDGMENT

D.V.S.S.SOMAYAJULU, J. - This appeal is filed questioning the judgment and decree dtd. 8/12/2017 passed in O.S.No.83 of 2017 by the Commercial Court-cum-Principal District Judge, Kurnool.

2. Sri B.Adinarayana Rao, learned senior counsel appeared for the appellant, whereas Sri N.Subba Rao, learned senior counsel appeared for the respondents.

3. Learned senior counsel for the appellant essentially argued that the judgment of the lower Court is against the settled principles of law. He points out that in the contract between the appellant and the 1st respondent, there is no condition for payment of escalation charges. In the parent contract between the appellant and the State, there is an escalation clause which is not, however, included in the agreement between the plaintiff and defendant No.1. It is also pointed out that the pleading about the escalation in the suit is absolutely lacking and that the trial Judge committed an error in awarding escalation. It is, according to him, a matter of contract and the Court cannot award escalation on the grounds of equity or otherwise. He also points out that the claim made is essentially for alleged balance due, whereas escalation was awarded. He also argues that the documents filed do not amount to evidence in the eye of law and merely on the basis of some consolidated and typed statements, huge sums of money were awarded without considering the fact whether these documents actually constitute evidence or not. He also points out that in the ultimate conclusion, learned Judge did not discuss the quantum of the claim or about the manner in which it was proved. Merely on the ground that the main parent agreement contained an escalation clause and the appellant received the escalation from the State Government, the trial Judge awarded the amounts. He submits that this is totally contrary to law.

4. He also points out that the conclusions are at page 51 and 52 of the impugned judgment are clearly erroneous. Prior to that he states there is a discussion on the various issues without leading to a legal conclusion. He also points out that although the issues were framed, the same are not answered. He points out that initially clear and cogent issues were framed and thereafter additional issues were also framed. Learned counsel points out that as per law, each of these issues must be answered properly and clearly, since they have a bearing on the final decision. In the end, these issues were not answered. This is a fatal flaw as per him. As far as interest is concerned, he contends that the issue No.5 is with regard to interest, but there is no discussion whatsoever about the 'delay' or the quantum of interest. He submits that the pleading and proof about interest is not there. Merely on the basis of a tabular statement interest was awarded.

5. Learned counsel therefore submits that the impugned judgment is not in accordance with law and should be set aside. He also files a compendium of case law, which is referred to later in the judgment.

6. In reply to this, Sri N.Subba Rao, learned senior counsel argues that the issues were all considered and thereafter only the order was passed. He points out that the learned Judge discussed the oral and documentary evidence before coming to the conclusions. He draws the attention of this Court to the various pages in the judgment where evidence of the witnesses and documents were also discussed and therefore, he submits that the impugned judgment cannot be commented upon only because all the issues were not separately answered. He submits that since issues 1 to 5 are interlinked, they were rightly clubbed together and a final order was passed. He also points out that admittedly from a reading of the evidence, there is a delay and therefore, he submits that it is within the competence of the Court to award interest. Learned counsel points out that almost five (5) witnesses were examined and 32 documents were marked for the plaintiff and another 17 docume