Current rate of interest means the highest of the maximum rates.

(This Appeal is filed under Order XXXVI Rule 1 of O.S.Rules r/w Clause 15 of Amended Letters Patent r/w Order IV Rules 28 to 32 of Appellate side Rules against the Judgment and Decree dated 26.10.1999 in C.S.No.937/98, on the file of the Hon'ble High Court, Madras.)

P.K. Misra, J.

The present appeal has been filed by Sports Development Authority against the Judgment and Decree of the learned Single Judge in C.S.No.937 of 1998, filed by the present respondent. In the impugned Judgment, the Trial Court has decreed the suit of the plaintiff/respondent for realisation of Rs.3,94,13,245/- with further interest at the rate of 18% p.a.

2. The facts in brief are as follows:- The plaintiff is a registered firm of Partnership engaged in engineering and construction works. The defendant/appellant is a Society registered under the Tamil Nadu Societies Registration Act, 1975 constituted as per G.O.Ms.No.641 of 1998 of Government of Tamil Nadu and as such an instrumentality of the State attached to the Education Department of Tamil Nadu. For the purpose of hosting South Asian Federation Games at Chennai, the Sports Development Authority, Chennai contemplated constructing four new stadiums. The Sports Development Authority called for tenders for construction of a Tennis Stadium, Aquatic Stadium, Hockey Stadium and Indoor Stadium. The tenders offered by the plaintiff for construction of Tennis Stadium, Aquatic Stadium and Hockey Stadium was accepted by the defendant and the total value of the contract was Rs.26,82,48,843.50/-. Three separate agreements containing similar terms were executed. Apart from the above three works, on the basis of instructions of the subordinate officers of the defendant, the plaintiff had also undertaken the work of Paving Block/Chain Link Fencing in the Hockey Stadium, even though no formal written order had been issued by the defendant or any official. The plaintiff submitted bill for Rs.30,42,942.36 on 24.01.1996 in relation to the work of the Aquatic complex which was duly certified by the defendant engineers on 10.02.1996. Similarly, plaintiff submitted bill for Rs.51,22,983.74 on 23.01.1996 of the Hockey Stadium, which was duly certified on 17.02.1996. A bill for Rs.1,64,19,123.89 dated 23.01.1996 was submitted for the Tennis Stadium, which was duly certified on 21.02.1996. For the additional work of Paving Block/Chain Link, bill for Rs.1,82,430.55 was submitted on 17.04.1996, which was duly certified on 15.07.1996. Thus, the plaintiff was entitled to Rs.2,47,67,480.54. In addition, Rs.74,03,781/- representing 2.5% of the retention amount was refundable after the completion of the Defects Liability period and subsequently the defendant realised a portion of the retention money, keeping the balance amount of Rs.9,83,531/-. The plaintiff had correspondence with the defendant regarding the amount due. The plaintiff also wrote a letter to the Chief Secretary, Government of Tamil Nadu indicating about the amount due to the plaintiff and also complaining regarding the higher rate of interest claimed by defendant on the mobilization advance made to the plaintiff. Since the correspondence with the defendant did not evoke any positive response, the plaintiff filed a suit for realisation of a sum of Rs.2,57,51,012/- towards the outstanding bills and the balance retention amount and further a sum of Rs.1,36,62,233/- towards interest at the rate of 18% on the aforesaid amount payable from the due date till the date of filing of the suit. The plaintiff also claimed further interest at the rate of 18% on the principal amount, as according to the plaintiff the work was commercial in nature. In fine, the plaintiff claimed a sum of Rs.3,94,13,245/- together with further interest on the principal amount of Rs.2,57,51,012/- at 18%.

3. A written statement was filed by the defendant, wherein it was indicated that as per the original terms and conditions, no mobilization advance was to be given to the plaintiff. But subse