The court ruled that the plaintiff is entitled to recover the principal amount due under the lease agreement, but the claimed interest rate of 18% was reduced to 6% per annum.

JUDGMENT :

V. Gopala Krishna Rao, J.

1. The appeal is filed against the judgment and decree dated 28-02-2005 in O.S.No.102 of 2000 passed by the learned Senior Civil Judge, Proddatur, Kadapa District. The suit is filed for recovery of lease amount due by the defendant with interest amounting to Rs.2,66,400/-.

2. The case of the plaintiff/Municipality as narrated in the plaint, in brief, is as follows:

It is pleaded that the plaintiff/Municipality conducted auction of the lease hold rights for collection of kist from the vendors of vegetable market situated in K.K. Street, Proddatur town in respect of certain stalls specifically mentioned in the plaint for the year 1997-98 i.e. from 01-4-1997 to 31-3-1998 on 15-3-1997 after following due procedure in this regard including publication of the same in the Extraordinary Gazette, Kadapa District. In the said auction held on 15-3-1997, one S. Abdul Rasool, the defendant herein, was the highest bidder having bid for an amount of Rs.18,75,000/-. The plaintiff/Municipality confirmed the said bid in favour of the defendant in its Resolution No.378, dated 22-3-1997 and issued proceedings to that effect in Roc.No.1321/97-A, dated 22-3-1997. It is further pleaded that the defendant fulfilled the said contract up to the period agreed upon 31-3-1998. After completion of the said contract work, the defendant failed to pay the amount due to the plaintiff payable under the suit contract and became a defaulter. The defendant was due and payable to the plaintiff in an amount of Rs.1,80,000/- including sweeper charges. The authorities of the plaintiff demanded the defendant on several occasions for payment of the said sum payable to the plaintiff. The defendant is liable to pay interest over the said sum of Rs.1,80,000/- at 18% per annum from 01-4-1998. Hence, the suit.

3. Brief averments in the written statement filed by the defendant are as follows:

It is contended that previously lease amount of the Municipal market was only Rs.13,92,000/- i.e. for the year 1996-97, but the plaintiff auctioned the same for Rs.18,75,000/- by enhancing Rs.4,83,000/- because the plaintiff is going to extend the market area on the eastern side up to the Municipal road with a measurement of 70 feet east to west. It is further contended that the meat vendors refused to vacate the meat market and protested the action of the Municipality by staging dharnas and agitations. They also approached the Court of law. Hence, the plaintiff failed to hand over the entire area as stated in the Gazette to the defendant on 01-4-1997. On the demand of the defendant, the plaintiff handed over the entire area on 30-7-1997 to the defendant through proceedings No.1321/1997-A1, dated 03-7-1997. It is further contended that the plaintiff failed to perform the contract on his part as stated in the Gazette. Hence, there is no cause of action for this suit. It is prayed to dismiss the suit with costs.

4. Based upon the pleadings of both the parties, the trial Court framed the following issues and additional issues for trial:

(1) Whether the plaintiff is entitled for the suit amount as prayed for against the defendant? and

(2) To what relief?

Additional issues framed on 27-01-2005:

(1) Whether the counter claim of the defendant is barred by limitation? and

(2) Whether the defendant is entitled to claim damages from the plaintiff ?

5. During the course of trial, on behalf of the plaintiff/Municipality, P.W.1 is examined and Exs.A-1 to A-7 are marked. On behalf of the defendant, D.Ws.1 to 3 are examined and Exs.B-1 and B-2 are marked.

6. After completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.2,66,400/- with future interest at 6% per annum on Rs.1,80,000/- from the date of plaint till the date of realisation.

7. The defendant filed a counter claim, but the trial Court dismissed the said counter claim. For the reasons best known to the defendant, no appeal is filed by him to challenge the f