The court upheld that delayed payments must be compensated with interest, emphasizing that the appellants’ claims of irregularities were unsubstantiated and did not impede the contractors' right to recovery.

JUDGMENT :

B.R.MADHUSUDHAN RAO, J.

1. This Memorandum of Appeal is filed under Section 96 of Code of Civil Procedure, 1908 (for short ‘CPC’) assailing the judgment and decree in OS.No.115 of 2015, dated 27.02.2020 passed by the I Additional District Judge at Karimnagar.

2. Appellants are defendant Nos.1 to 4 and respondent is the plaintiff in OS.No.115 of 2015.

3.1. Respondent-plaintiff has filed suit for recovery of Rs.17,21,834/- with interest @ 18% per annum for the delayed payment on the principle amount of Rs.31,85,170/- for 32 to 39 months and for costs from the appellants-defendants jointly and severally.

3.2. It is stated in the plaint that the respondent-plaintiff is a registered Contractor and executing works under various Departments including SRSP. Appellant No.4-defendant No.4 entered into contract for execution of (11) works. The (11) works are as under:

ANNEXURE

STATEMENT SHOWING THE LIST OF WORKS CARRIED OUT BY M.SANTHOSH RAO, CONTRACTOR ON WHICH INTEREST PAYABLE FOR THE DELAY CAUSED ON THE PART OF DEPARTMENT

3.3. Respondent-plaintiff has commenced the work and completed the same within the agreement time without compromising in quality and quantity and the Incharge Field Engineers was duly satisfied and recorded the measurements as per actuals. The works done by the respondent-plaintiff have been checked by the competent Engineers and there is a delay in making payments for 26 to 35 months, the reasons for delay in payment is best known to the appellants-defendant Nos.1 to 4. The Government in their Memo Nos.3697/Ser.VII (V&E)/A1/2010- 22, dated 28.04.2011 and 3697/Ser.VII (V&E)/2010-26, dated 16.06.2011 i.e., after a lapse of about three years from the date of execution, issued instructions to inspect the works.

3.4. In fact, the works have been executed and recorded in different Measurement Books during the year 2009 itself. The reasons for the delay are not informed to the respondent-plaintiff by the appellants-defendant Nos.1 to 4 at any point of time, though there is delay in arranging payment from October, 2009 to January, 2013. The Government has responded on the anonymous complaints and ordered for inspection by team of Engineers other than the Engineers working under the control of Administrator-cum-Chief Engineer. The complaints were not only with regard to the quality of the said works but also regarding the conduct of the Engineers, needless to say that as per the provisions of Para 75 of A.P. PWD Code, that no cognizance need be taken on anonymous complaints. There are no comments of bad quality or quantity in the works executed by the respondent- plaintiff. The Administrator-cum-Chief Engineer, SRSP, Hyderabad has again issued instructions to the Superintending Engineer GVC-IV, L.M.D. Colony to inspect the works before making payment. The respondent-plaintiff has suffered financially without any fault on his side since the amount was borrowed from the local Financiers at a higher rate of interest.

3.5. As per clause 68 PS to APDSS, payment will be made to the Contractor under the certificate to be issued at reasonable frequent intervals by the Executive Engineer or by the Sub-Divisional Officer within (14) days of the date of each certificate. In the instant case, work completion certificates were issued by the Executive Engineer in August 2009. As per Para 22 of G.O.Ms.No.94, I & CAD, dated 01.07.2003, the payment of work bills shall be paid within one month. Eventually after (3) years the payment of work bills have not been released to the respondent-plaintiff. The appellants- defendants have not even chosen to furnish the reasons for the delay and that they are liable to pay damages/interest @ 18% for Rs.17,21,834/- and further interest till realization. The appellants-defendants have withhold the payment which the respondent-plaintiff is entitled for abnormal period of 32 to 39 months which is clear breach of contract and violation of Article 14 of the Constitution of India, also against the spirit o