D. G. KARNIK, J.

This appeal is directed against the judgment and decree dated 12th January. 2006, passed by the 1st Ad-hoc Additional District Judge, Panaji.

2. Heard learned Additional Government Advocate for the appellant and learned Counsel for respondent Nos.1 and 2. None present for respondent No.3 - Reserve Bank of India.

3. Appellant is the original defendant No.1. respondent No. 1 is the original plaintiff and respondent Nos.2 and 3 are the original defendants No.2 and 3 respectively. The appellant-State of Goa, being desirous of raising a loan of Rs.9.5 crores, appointed respondent NO.3-the Reserve Bank of India (For short the RBI) as its manager to the issue. A press communique was issued by the State of Goa about its decision to float the issue called as "Goa State Development Loan, 2003", carrying 13.50% interest. The appellant and the respondent No.3 appointed designated branches of the State Bank of India at Panaji and Margao as their agent where the applications for the loan along with the money could be deposited. In addition to the designated branches of the State Bank of India (For short the SBI) the applications could also be deposited in the designated Branches of the RBI upto to the close of banking hours on 17th May, 1993. In case of over subscription, a partial allotment was to be made respondent No.1 applied for the allotment of the entire loan of Rs.9.5 crores by submitting an application along with money at the designated Treasury Branch of State Bank of India, at Panaji. The Treasury Branch was required to inform the RBI about the receipt of the application by express telegram in the evening of 17th May, 1993 itself. However, it informed the RBI about the application and receipt of the money on the next day i.e. on 18th May, 1993 by telex. In the meanwhile, RBI made the allotment of the loan of Rs.9.5 crores to a third person on 17th May, 1993 itself and, therefore, the application made by respondent No.1 could not be considered by the RBI at all. It appears that thereafter, the Treasury Branch of SBI transferred the money received by it from respondent No.1 to its Nagpur Branch on 21st May, 1993 and the Nagpur Branch in turn credited the amount to the account of the appellant i.e. the State of Goaon 24th May, 1993. Ultimately, the money was returned to respondent No.1 on 9th July, 1993, without any interest. Respondent No.1 thereafter filed a suit bearing Special Civil Suit No.28/1995/A(old) renumbered as Civil Suit No.111/2004 for damages and in the alternative for interest for the period from 17th May, 1993 till 7th July, 1993 (53 days). The appellant as well as respondents No.2 and 3 resisted the suit by filing separate written statements.

Respondent No.1 examined two witnesses (PW.1 and PW.2). The appellant-State of Goa did not examine any witness. However, the respondent No.2 SBI examined one witless (DW.1), respondent No.3 RBI examined one witness (DW.2). Parties also produced on record the press communique issued by the State of Goa (Exhibit 19), along with the notification and the terms and conditions of the loan (Exhibit-20 colly). Parties also produced on record copy of the loan application submitted by respondent No.1 (Exhibit-21), as also the correspondence between the parties (Exhibit22 to Exhibit-37).

4. On considering the pleadings as well as the evidence adduced by the parties, it is clear that there is no dispute between the parties that respondent No.1 had made an application for the loan within the time prescribed i.e. on 17th May, 1993 and had also paid the sum of s.9.5 crores to the respondent No.2-SBI along with the application. It is also not disputed that the respondent No.2 SBI was required to communicate to the RBI of the receipt of the application by express telegram to be dispatched on 17th May, 1993 itself, but t did not do so and instead communicated the same to the RBI on the next day i.e. on 18th May, 1993 by a telex. In the meanwhile, the RBI accepted the appli