Back
2016 Supreme(Kar) 383
IN THE HIGH COURT OF KARNATAKA
N. KUMAR & B. VEERAPPA, JJ.
Reliance Infocomm Engineer Pvt. Ltd., Mumbai - Appellant
Versus
Vijaykumar - Respondent
RFA No. 1033 of 2015 (MON)
Decided On : 23-04-2016
For the Petitioner:S.V. Bhat, Advocate.
For the Respondent:K. Giri, Advocate.
Liability under a contract can be established based on the terms of the contract and the actions of the parties. The court may modify interest rates based on the absence of prior agreement between the parties.
Headnote:
defendants - Contract Dispute - [Contract Act, Section 2(h), Section 73] - The court discussed the contract between the parties and the issuance of invoices in the name of a third party. It interpreted the contract terms and the liability of the defendants based on the invoices. The court also considered the award of interest and modified the rate based on the absence of prior agreement between the parties.
Fact of the Case:
The plaintiff claimed payment for obtaining pre-construction permissions and raised invoices, but the defendants denied liability. The Trial Court decreed the suit for a reduced amount and awarded interest. The defendants appealed against the judgment and decree.
Finding of the Court:
The Court found that the defendants were liable to pay the amounts mentioned in the invoices, despite the invoices being raised in the name of a third party. The Court modified the interest rate awarded by the Trial Court.
Issues: Dispute over liability for invoices, entitlement to interest, and modification of the Trial Court's judgment.
Ratio Decidendi: The defendants' liability was based on the contract terms and their admission of issuing a work order to the plaintiff. The Court modified the interest rate based on the absence of prior agreement between the parties.
Final Decision: The appeal was partly allowed, and the interest rate awarded by the Trial Court was reduced to 9% p.a. from the date of suit till the date of payment.
1. This is defendants' regular first appeal against the judgment and decree passed decreeing the suit for a sum of Rs. 15,45,000/- with interest at the rale of 18% p.a. on the said amount from the date of suit till the date of realisation of the entire amount.
2. For the purpose of convenience the parties are referred to as they are referred to in the original suit.
3. The plaintiff Mr. Vijay Kumar contends that the defendant had proposed to build an Internet Data Centre 4 to be located at White Field, Bangalore. Before undertaking the said construction the defendant required pre-construction permissions from various authorities and they had entrusted the said work to the plaintiff as per work order dated 26-4-2008. In terms of the work order he obtained permission from the authorities and raised invoices on various dates totally amounting to Rs. 27,10,000/- but the said amount was not paid. He issued legal notice to the defendants which was duly served. There was no reply nor the demand was complied with. Therefore, he filed a suit in O.S. No. 347/ 2012 claiming a sum of Rs. 27,10,000/- with interest at the rate of 18% p.a.
4. After service of summons the defendants entered appearance, filed their written statement contesting the claim. The defendants admitted having entrusted the work to the plaintiff as per the work order dated 26-4-2008 they denied that the plaintiff had raised invoices for a sum of Rs. 27,10,000/-. They also admitted receipt of legal notice dated 9-11-2011. However, they did not admit the liability. On the aforesaid grounds they sought for dismissal of the suit and also on the ground of limitation.
5. On the aforesaid pleadings, the Trial Court framed the following issues :-
"1. Whether the plaintiff proves that defendant has issued work order dated 26-4-2008 to him for obtaining the pre-construction permission/NOC from the concerned authorities totally amounting to Rs. 30,97,530/-?
2. Whether the plaintiff proves that as per the work order the defendant has failed to make the payments after receipt of invoices dated 5-11-2008, 26-11-2008, 21-5-2009 and 21-5-2009 (sic)?
3. Whether the plaintiff proves that the defendant is due of Rs. 28,07,560/- as on the date of suit?
4. Whether there is cause of action for filing the suit?
5. Whether the court-fee paid by the plaintiff is proper?
6. Whether the suit is barred by limitation?
7. Whether the plaintiff is entitled for the decree as prayed for?
8. What order or decree?"
6. The plaintiff in order to substantiate his claim examined himself as RW. 1 and produced 17 documents which are marked as Exs. P1 to P17. On behalf of the defendant one Pareekshit Raja Bhat was examined as D. W. 1. However, no documents were produced.
7. The Trial Court on consideration of the aforesaid oral and documentary evidence on record, taking note of the admission of the plaintiff held that Exs. P3 and P5 invoices are issued in respect of the same transaction and therefore, the plaintiff is not entitled to double payment, but it held in all, plaintiff would be entitled to Rs. 15,45,000/- against the claim of Rs. 27,10,000/-. Thereafter it held that as there was no contract between the parties to pay the said amount, plaintiff is not entitled to any interest prior to the date of the suit. However, it awarded interest at 18% p.a. from the date of suit till the date of payment. Aggrieved by the said judgment and decree of the Trial Court the defendant has preferred this appeal.
8. The learned counsel for the appellants assailing the impugned judgment and decree contends the invoices on which the plaintiff relies are not issued to the defendants at all and therefore liability could not be foisted on the defendants on the basis of the said invoices. He further submitted that award of interest at 18% p.a. from the date of petition till the date of realisation is without any basis and therefore, it also requires to be set aside.
9. Per contra, learned counsel for the respondent supported the imp
