The court clarified that interest disputes related to contracts should be resolved in civil courts, not through writ petitions, and that the learned Single Judge's order fixing interest at 12% lacked legal basis.

JUDGMENT :

Syam Kumar V.M., J.

This Writ Appeal is filed challenging the judgment of the learned Single Judge dated 19.07.2024 in W.P.(C) No.17963 of 2022. Appellants were respondents 3 to 6 in the W.P.(C) and respondents are the petitioner and respondents 1 and 2 in the W.P.(C). Parties are hereinafter referred to as per their status in the Writ Petition.

2. The Writ Petition was filed by the petitioner contractor inter alia seeking to quash Ext.P10 order dated 02.09.2021 and Ext.P12 letter dated 15.11.2021 issued by the Public Works Department and seeking a direction to the respondents to pay an amount of Rs.60,66,720/- as demanded by him in Ext.P13, which according to him is the interest payable for the amount which had been withheld by the Department.

3. The learned Single Judge allowed the Writ Petition and quashed Ext.P10 and P12 to the extent they limited the payment of interest to 1% below the Treasury Savings Bank rate. The learned Single Judge also directed the respondents to pay the petitioner interest on the sum of Rs.19,33,205/- at the rate of 12% per annum (simple interest) from 31.03.2010 till the date of payment, after deducting the amounts already paid. The said judgment is impugned in this appeal.

4. Heard Sri.K.P.Harish, learned Senior Government Pleader for the appellants (respondents 3 to 6 in W.P.(C)) and Sri.B.G.Harindranath, learned Senior Advocate instructed by Sri.Amith Krishnan H., Advocate for the 1^st respondent (petitioner in W.P.(C)).

5. The learned Senior Government Pleader assailed the impugned judgment contending that the Writ Petition was not even maintainable and the petitioner ought to have been relegated to the civil court seeking appropriate remedy on his claim for interest. It is also contended that the Single Judge ought not to have fixed interest at the rate of 12% merely based on the uncorroborated contentions put forth by the petitioner in the Writ Petition. There was no legally reliable material before the learned Single Judge to fix interest at the rate of 12% and the mandates of the Interest Act of 1978, which clearly described the power of the court to allow interest should have been taken note of. The purported reliance placed by the learned Single Judge on the two judgments of the Hon’ble Supreme Court in arriving at the interest rate of 12% was erroneous in so far as the learned Single Judge had overlooked the fact that the said decisions had been rendered by the Hon’ble Supreme Court in appeals preferred against judgment or decree in civil suits. The dictum laid down in the said judgments were not reliable precedents for fixing interest in a Writ Petition filed seeking payment of interest. The learned Single Judge ought to have dismissed the Writ Petition relegating the petitioner to his civil remedies, if any. The learned Single Judge without any reliable basis or reliable evidence fixed interest at the rate of 12% and computed an amount of Rs.23,97,174/- as payable to the petitioner towards interest and directed payment of the same less the amounts already paid. It is also contended that the learned Judge had quashed Exts.P10 and P12 without any valid reasoning and contrary to the dictum laid down in Central Council for Research in Ayurvedic Sciences v. Bikartan Das [ 2023 KHC 6774 ]. The learned Senior Government Pleader thus sought to set aside the judgment of the learned Single Judge and allow the Writ Appeal.

6. Per contra the learned Senior Advocate appearing for the petitioner contended that the judgment of the learned Single Judge does not call for any interference as it had been rendered in accordance with the law. The amount due to the petitioner had been withheld illegally by the respondents on an incorrect premise and finally, after a long drawn litigation when the amounts withheld were paid to the petitioner, he was legally entitled to interest for the delayed payment. The petitioner had paid a considerable sum of interest for the overdraft facility, which was availed