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2026 Supreme(Mad) 1348

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SAKTHIVEL, J.
The State – Appellant
Versus
P.V. Murthy S/o P. Viswanathan – Respondent
S.A. No. 1839 of 2003
Decided On : 20-04-2026

Advocates Appeared:
For the Appellant : R. Siddharath

In works contracts, the party maintaining measurement records bears the burden to prove the quantity of work performed. Absent such evidence, the contractor's claim for work done must be upheld. Post-decree interest must strictly comply with statutory ceilings unless exceptional commercial circumstances are established.

Headnote:(A) Code of Civil Procedure, 1908 - Section 34 - Works contract - K2 Agreement - Contractor's entitlement to payment for measured work - Burden of proof - Obligation of the employer to maintain measurement records - Where the entity responsible for maintaining the measurement book fails to examine the author of the records to rebut a contractor's claim, it fails to discharge its burden of proof. (Paras 12, 13, 14)

(B) Interest - Rate of - Statutory limitations - Post-decree interest - Appellate court jurisdiction to modify interest rates - Discretion under Section 34 CPC - Statutory limit of 6% per annum for post-decree interest applies unless specifically excluded by commercial transaction norms recognized by the court - Modification of 12% post-decree interest to 6% deemed appropriate to align with law while sustaining pre-decree interest. (Paras 19, 20)

Facts of the case:
The respondent (plaintiff) was a contractor who entered into work agreements with the appellants (defendants). The contractor performed various excavation and lining works but faced disputes regarding payments, measurement of work completed, and the forfeiture of earnest money deposits. The Trial Court decreed the suit in favor of the contractor, finding the documentation provided by the state faulty. The First Appellate Court upheld the findings that the work was measured and the contractor was entitled to payment, albeit with partial modifications concerning the interest and deposit forfeiture.

Findings of Court:
The court found that in a measurement-based works contract, the employer holds the records and the obligation to prove the nature of work done. By failing to substantiate the entries in the measurement book, the appellants could not refute the respondent's claim. However, the court identified a legal error in the application of interest rates post-decree, noting the requirement to remain within statutory limits.

Issues: The main issues were whether the contractor successfully proved the quantity of work performed in the absence of reconciled official records, and whether the interest awarded by the lower courts complied with statutory procedural law regarding post-decretal obligations.

Ratio Decidendi: In a measurement-centric works contract, the party in custody of the measurement books carries the onus to effectively rebut work-done claims. Furthermore, appellate courts are duty-bound to ensure that interest awarded in decrees does not exceed the statutory ceiling stipulated in procedural law unless specific commercial exceptions are satisfied.

Result: Appeal allowed in part; decree modified to reduce post-decree interest to 6% per annum.

Table of Content
1. procedural context for second appeal proceedings. (Para 1 , 2)
2. plaintiff claim for measured work payments in k2 contract. (Para 3)
3. defense regarding contractual non-performance and bill interpolation. (Para 4)
4. trial and appellate findings on k2 agreement obligations. (Para 5 , 7 , 8)
5. questions of law regarding evidence and interest rates. (Para 9 , 10)
6. burden of proof concerning measurement and interest under cpc. (Para 11 , 12 , 13 , 14 , 16 , 17 , 18 , 19 , 20)
7. modification of decree for statutory post-decree interest. (Para 21 , 22)

JUDGMENT :

R. SAKTHIVEL, J.

1. Feeling aggrieved by the Judgment and Decree dated January 23, 2002 made in A.S. No.31 of 2000 by 'the V Additional City Civil Court, Chennai' ['First Appellate Court' for brevity], confirming the Judgment and Decree dated September 29, 1997 made in O.S. No.6231 of 1991 by 'the V Assistant City Civil Court, Chennai' ['Trial Court' for short], the defendants therein have preferred this Second Appeal.

2. For the sake of convenience, the parties will hereinafter be referred to as per their array in the Original Suit.

PLAINTIFF'S CASE IN BRIEF:

3. The plaintiff is a contractor registered with the Public Works Department, Madras. The second defendant floated tenders for the work of excavation and lining of canal from Tamil Nadu border to Poondi Reservoir reach under Krishna Water Supply Project.

3.1. The plaintiff submitted his tenders and made earnest money deposits for the following three works:

3.2. The tenders submitted by the plaintiff for the above works were accepted by the second defendant and three separate agreements were entered into between the plaintiff and the second defendant.

3.3. As regards the first work (work to be done at the canal stretch between LS 10900 metres and 10950 metres), the plaintiff completed 1350 cubic meters of earth work including 350 cubic meters in medium rock, 450 cubic meters in hard stiff clay and 550 cubic meters in soft disintegrated rock. However, the plaintiff was unable to complete the assigned work, as he was suffering from ulcer and fell sick. Hence, he requested the second defendant to settle the accounts for the work done so far, vide his letter to second defendant dated January 02, 1990 which was followed by reminders on January 22, 1990 and March 09, 1990. However, there was no response from the second defendant. While so, the plaintiff was shocked when it came to his knowledge, that the second defendant has recorded only 140 cubic meters as work done by the plaintiff in the aforesaid stretch the plaintiff contested this recording by way of a protest letter dated March 24, 1990. Further, the second defendant assigned the work to another contractor namely M/s.Regina & Co., without informing the plaintiff and without settling his account. Further, M/s.Regina & Co. were allowed to use 20 cubic metres of gravel and 7 cubic metres of 20mm metal, stocked at site by the plaintiff, worth Rs.3,000/-, without the consent and knowledge of the plaintiff by the second defendant. Furthermore, on May 15, 1990, when the plaintiff went to second defendant's office to sign the final bill as called upon by the second defendant, the plaintiff noticed multiple over-writings in the measurement book. Hence, the plaintiff signed therein under protest. The aforesaid gross irregularities were committed by the Assistant Executive Engineer. The same was conveyed to the Chief Engineer, Superintending Engineer as well as the Executive Engineer vide a letter dated June 21, 1990 by the plaintiff requesting re- measurement in his presence. In furtherance of the request, the second defendant vide his letter dated July 6, 1990, requested the plaintiff to be present at the work site on July 17, 1990. However, on July 17, 1990, the second defendant deliberately refused to measure by falsely stating that the work site shown by the plaintiff is not the concerned reach. The further steps taken by the plaintiff for re-measurement at seve

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