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2001 Supreme(Bom) 861
IN THE HIGH COURT OF BOMBAY
G.D. Patil A.M. Khanwilkar, JJ.
Satara Zilla Parishad, through
its Chief Executive Officer .... Appellant.
Versus
Dilip Bhaushaheb Pawar.... Respondent.
First Appeal No. 545 of 1990, decided on 20-9-2001.
Advocates appeared :
M.B. Mehere, for appellant.
Praful Shah, for respondent.
Headnote:Civil Procedure Code, 1908 - Section 34 - Interest - Suit for recovery of money - Tender - Condition No. 10 - Contractor cannot claim any interest on disputed amount or pending bills - Condition inapplicable regarding undisputed amount - Absence of commercial transaction - Contractor entitled to claim interest at rate not more than 6%. - Assuming that Condition No. 10 of the said instructions postulates that the respondent shall not be entitled to any interest in the case of any disputed amount or pending bill, however, the dispute if any in respect of the subject bills was at best relating to the excess billing due to longer route distance which amount was very minuscule. The respondent is right in contending that admittedly there was no dispute regarding the remaining amount which was substantial and the Appellant was therefore obliged to make that payment without any delay. In other words the Appellant s had unjustly withheld even the undisputed amounts to which condition No. 10 had no application. A priori. Condition No. 10 referred to above did not preclude the respondent or rob him of his right to claim interest in the amounts due and payable in accordance with law.
Reverting back to the purport of Section 34 of the Code, it essentially empowers the Court to award interest. This provision authorises the Court to award interest for three different periods, namely, (i) interest adjudged on the principal amount prior to the institution of the suit; (ii) between institution of the suit till the date of the decree and (iii) the third being from the date of the decree till the realisation or payment of the decretal amount. However, in this case Court is concerned only with the second and third periods (i.e. (1) from the institution of the suit till the date of the decree and (2) from the date of the decree till payment). In so far as the former period is concerned (i.e. from the date of institution of the suit till the date of the decree), the Court is authorised to award interest at such rate as it would deem reasonable to be paid on the principal sum adjudged. Obviously, the rate of interest so determined by the Court will have to be consistent with the pleadings and the evidence on record. Whereas, for the latter period (i.e. from the date of the decree till the payment). The Court is authorised to award interest ordinarily at the maximum rate of 6% p.a. unless the transaction in question was a commercial transaction in which case it can be upto the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
No evidence has been adduced that the subject transaction is a commercial transaction. In absence of any pleading or evidence in respect of the nature of the subject transaction whether it is a commercial transaction or not the respondent contractor would not be entitled for interest in excess of 6% p.a. in view of the mandate of Section 34 of the Code.
2. Briefly stated, the respondent original plaintiff is a transport Contractor. The appellant-defendant Zilla Parishad had invited tenders for the contract of transport of goods pertaining to its various departments. The respondent was one of the participant, who submitted his tenders which were accepted by the appellant. For the present, suffice it to mention that the respondent-plaintiff carried out work of transport as agreed in the tender; and consequent thereto raised bills of the work of transport done by him during the relevant periods, for which claimed total sum of Rs. 14,54,988-80. However, the appellant, acting on the basis of audit objections, decided to withhold the said bills submitted by the respondent. In the circumstances, the respondent filed subject suit against the appellant for recovery of the amounts under the said bills submitted by him for a total sum of Rs. 14,54,988-80 along with interest thereon. According to the respondent, the objections raised on behalf of the appellant for withholding the said bills were inappropriate; and, therefore, such action was unjust and has caused serious miscarriage of justice. The appellant resisted the said suit by filing written statement. It needs to be pointed out that the appellant has admitted that the respondent has executed the work of transport as per the tender. The appellant, however, denied its liability to pay the sum of Rs. 14,54,988-80 as claimed by the respondent towards the said outstanding bills. According to the appellant, as per the audit objections, amount due from the respondent under the sanctioned bills have been adjusted and that they did not withhold any bills as alleged. According to the appellant, the audit objections were essentially that: (a) that the respondent was not entitled to claim any charges for transporting goods for any distance between 0-0 km. to 100.00 kms. having regard to the terms prescribed for the mileages slab wise rate for internal transport; (b) that the respondent transported cement from Ratnagiri to Satara via Kolhapur route instead of via Chiplun, which route was of shorter distance by atleast 20 km. (c) about the excess mileage of destinations to and from as indicated in Schedule 3 to Exhibit 37. The appellant, asserted that audit objection taken by the A.G., Bombay and Local Funds' Auditor, Satara were correct, for which reason the appellant was justified in insisting upon adjustment towards the said heads. The appellant further asserted that the bills submitted by the respondent were only for a sum of Rs. 11,89,541-86 and not as claimed by the respondent being Rs. 15,81,420-55.
On the basis of the rival pleadings the trial Court framed 10 issues which read thus:---
“1. Whether the claim of the plaintiff for transport from Ratnagiri to Satara viz. Kolhapur is legal and valid?
2. Whether the claim for transporting goods for a distance of 00-00 to 100 kms. is legal and valid?
3. Whether plaintiff has shown correct distance of destinations to and from and consequently whether the claims of the plaintiff are correct?
4. Whether the plaintiff can claim loading charges from defendant?
5. Whether the claim for unscrutinised bills can be adjudicated?
6. What is the exact claim due to the plaintiff?
7. Whether the defendant is estopped from challenging the claim of the plaintiff?
8. Whether the objections of Auditor are within limitation?
9. Whether the plaintiff is entitled to interest on the amount adjudged due to him from the defendant?
10. What decree and order?”
3. It is relevant to point out that both the parties decided not to lead oral evidence and agreed for the disposal of the suit on the basis of documentary evidence already produced on record. In this view of the matter, the trial Court disposed of the suit within the record time of two month
