HON’BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITIONS No. 10656 OF 2023

O R D E R:

This Writ Petition challenges that action of the respondents in withholding Rs.10,34,776/- towards balance final security deposit despite making innumerable representations. Consequently, petitioner seeks a direction to release the said amount with interest at 24% per annum from the date the amount fell due.

2. Petitioner, it is stated, had successfully and satisfactorily executed the works, details of works, date of completion, last date of defect liability have been mentioned in paragraph 3 of the affidavit, by entering into corresponding agreements, duly depositing amount towards final security deposit which has to be returned in terms of Clause 42.3.1 of the Agreement. In terms of the above clause, the defective liability period of 24 months is also over, however, respondents, have been dodging the payments for no reason. In fact, petitioner is stated to have submitted umpteen number of representations, both oral and written, the latest being the one dated 29.03.2023 requesting release of amounts, however, respondents are not acting upon the same.

3. This Court, by order dated 18.04.2023, directed respondents to consider representation of petitioner dated 29.03.2023 and pass orders within ten days from the date of receipt of a copy of the said order.

4. In this case, respondents have not filed any counter-affidavit. However, learned Government Pleader for Finance Department placed before this Court the letter dated 06.07.2023 addressed by Pay & Accounts Officer, (W&P), Ranga Reddy. Based on the said letter, it is submitted that after defect- liability period, petitioner presented bill for refund of security deposits of Rs. 10,34,776/- vide bill token NO. 2403276363, dated 19.04.2023; bill was verified and the same was presented to government on 11.05.2023; bill is awaiting government approval and once it is approved, amount would be credited to the bank account of the agency directly.

5. Agreeing with the said submissions, learned counsel for petitioner M/s Indus Law Firm filed a memo of calculation stating that during the pendency of Writ Petition and in terms of the interim order dated 18.04.2023, respondent authorities have remitted principal amount of Rs.10,34,776/- but failed to deposit interest amount accrued over a period of time. Hence, he seeks a direction to respondents to pay the interest component. Learned counsel relies on the judgments of the Hon’ble Supreme Court in TAMGEDCO Ltd. v. T.T. Industries Limited1 and that of this Court in M/s Raghava_HES-Navayuga (JV) v. State of Telangana (W.P.No. 12825 of 2023) and contends that petitioner is entitled to interest for the delayed payment.

6. Evidently, Clause 43 of the Agreement deals with ‘Interest on Money due to the contractor’. It specifies, ‘No omission by the Executive Engineer or the Sub-divisional Officer to pay the amount due upon certificates shall vitiate or make void the contract, nor shall the contractor be entitled to interest upon any guarantee fund or payments in arrear, nor on any balance which may, on the final settlement of his accounts, found to be due to him’. The said clause clearly says that contractor is not entitled to interest on any payments in arrear nor on any balance which are found to be due.

1 (2017) 5 SCC 550

7. If the contract contains specific clause which expressly bars payment of interest, then, it is not open for the Court to grant pendent lite interest. This decision is supported by the judgment in Union of India v. Manraj Enterprises, (2022) 2 SCC 331 relied on by the learned counsel for respondents. Here, it is also to be remembered that a party to a contract is only legally- bound to fulfil the specific duties and responsibilities explicitly outlined within the written terms and conditions of the agreement and cannot be held liable for anything outside of those stated parameters; essentially, the Court will interpret the contract strictly based on