The termination of a works contract can be justified by issues beyond the control of the contracting parties. Documentary evidence can support claims made after the initial proceedings. The court has the discretion to modify interest rates on monetary awards.

JUDGMENT :

Gita Gopi, J.

1. This appeal has been preferred against the judgment and decree dated 28.03.2005 passed by the Court of learned Civil Judge (S.D.), Gandhinagar in Special Civil Suit No. 55 of 1995 [New] (Special Civil Suit No. 162 of 1988 [Old]) whereby, the said suit preferred by the respondent herein, original plaintiff, was partly allowed and the appellants herein, State of Gujarat and The Executive Engineer, original defendants, have been directed to pay Rs. 1,03,661/- (Rupees One lac three thousand six hundred sixty one only) together with interest at the rate of 18 per cent per annum from the date of filing of suit till its realization to the respondent-plaintiff:

2. The facts in brief are that on 11.06.1979 the appellant- State had invited tenders for the construction of earthen dam, masonry water weir, etc. under the Dantiwada Irrigation Scheme. The respondent-plaintiff, who was engaged in the business of executing such works, had filled-in the tender along with other applicants. The tender of the respondent-plaintiff came to be accepted vide letter of acceptance dated 12.12.1980. The respondent-plaintiff provided requisite security deposit at the time of execution of the works contract. Thereafter, the appellant-State issued work order in favour of the respondent- plaintiff whereby, the respondent-plaintiff was required to commence the work on 17.12.1980. However, it appears that the work could not be commenced on account of some land acquisition related issues and therefore, the works contract came to be terminated in the year 1985.

2.1. Being aggrieved by the action of the appellant-State, the respondent-plaintiff filed the suit in question before the Court below claiming Rs. 83,14,988/- as damages along with interest at the rate of 18% per annum from the date of filing of suit till its realization along with costs. The said suit was partly decreed in favour of the respondent-plaintiff whereby, the appellant-State has been directed to pay the amount of security deposit of Rs. 1,03,661/- together with interest at the rate of 18% per annum from the date of the suit till its realization, by way of impugned judgment and decree dated 28.03.2005. Being aggrieved by the same, the appellant-State has preferred the present appeal.

3. Mr. Utkarsh Sharma, learned Assistant Government Pleader, submitted that the security deposit given by the respondent-plaintiff at the time of execution of the works contract was up to 31.11.1983(sic). However, when the contract came to be disseminated in accordance with the terms of the agreement, the amount of security deposit given as bank guarantee was released by the appellant-State vide letter dated 07.01.1985. The respondent-plaintiff has never deposited any amount in cash and therefore, there is no question of returning any amount, as directed by the Court below. It was, therefore, prayed that the impugned judgment and decree passed by the Court below is erroneous and deserves to be quashed and set aside.

4. Mr. Nirav Mishra, learned advocate appearing for the respondent-plaintiff, submitted that the Court below had not believed the say of the appellant-State that it had released the amount of security deposit taken from the respondent-plaintiff since the appellant-State had not produced any documentary evidence in support of such say. Therefore, the Court below had decreed the suit partly in favour of the respondent-plaintiff by directing the appellant-State to make payment of the amount of security deposit with interest. It was, accordingly, prayed that the Court may not entertain the present appeal.

5. Heard learned counsel on both the sides and perused the material on record. It respondent-plaintiff had filed the suit in question claiming damages of Rs. 83,14,988/-. It appears from the record that the respondent-plaintiff was awarded the work contract by the appellant-State for constructing an earthen Dam in pursuance of the tender issued on 11.06.1979. However, on account of som