R.N PATEL vs. GUJARAT STATE ROAD TRANSPORT CORPORATION

C/FA/2380/2003 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL NO. 2380 of 2003 With FIRST APPEAL NO. 968 of 2003

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE R.M.CHHAYA Sd/-

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO ================================================================ GSRTC....Appellant(s) Versus R.N.PATEL....Defendant(s) ================================================================ Appearance: MR HARDIK C RAWAL, ADVOCATE for the Appellant(s) No. 1 MR. ARCHIT P JANI, ADVOCATE for the Defendant(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA Date : 24/02/2014 ORAL COMMON JUDGMENT Page 1 of 28

C/FA/2380/2003 JUDGMENT 1. Both these appeals arise out of the same Civil Suit and as the question of law and facts are similar as well as the evidence is also the same both these appeals were heard together and are disposed of by this common judgment. 2. The parties as stand in the Trial Court are described accordingly in this judgment. 3. First Appeal No. 2380 of 2003 is filed by the plaintiff challenging the judgment and decree passed by the City Civil Court, Ahmedabad in Civil Suit No. 287 of 1985 dated 11.6.2002 and First Appeal No. 968 of 2003 is filed by the defendant challenging the order dated 23.7.2002 passed in Civil Misc. Application No. 277 of 2002 filed by the defendant under section 96 of the Code of Civil Procedure. 4. The facts which can be culled ouit from the record of these appeals are as under : 5. That the plaintiff Gujarat State Road Transport Page 2 of 28

C/FA/2380/2003 JUDGMENT Corporation invited tender for construction of Divisional Workshop with its sub-work at Bharuch for an estimated work of Rs.31,77,164/- . The tenders were opened on 27.2.1979 and out of the tenders so invited, the tender filled-in by the defendant being the lowest came to be accepted and accordingly the plaintiff issued the acceptance letter to the defendant on 29.5.1979. It appears that as per the condition of tender, defendant was asked to furnish security deposit of Rs.1,27,086/- by way of Bank Guarantee and was also further asked to execute B-2 agreement with the plaintiff Corporation on 29.6.1979 which was an agreement whereby the defendant agreed to the terms and conditions specified in the tender agreement for completion of the tender work. It appears that thereafter a work order was issued by the plaintiff on 19.6.1979 stipulating the completion period to be 24 months i.e. two years. It therefore records that defendant was supposed to complete the work latest by 18.6.1981. It is the say of the plaintiff that the possession of the site for carrying out the work was given to the defendant. It Page 3 of 28

C/FA/2380/2003 JUDGMENT is also the case of the plaintiff that all necessary documents for execution of the tender work were also given to the defendant. It is also the case of the plaintiff that the plaintiff corporation supplied and provided to the defendant all materials as provided in Schedule-A of the tender, as demanded by the defendant. It is the case of the plaintiff that even drawings, plans, maps etc. were supplied to the defendant and therefore the defendant was supposed to complete the work within time and it is the case of the plaintiff that time was the essence of the contract. 6. It further appears that though initially defendant started tender work but as the progress was very slow it was brought to the notice of the defendant by addressing letters dated 25.6.1979, 21.7.1979, 24.7.1979, 30.7.1979, 7.9.1979, 5.10.1979, 1.2.1980, 12.8.1980, 18.9.1980 and lastly on 8.10.1980. It is the case of the plaintiff that even though such notice and reminders were given to the defendant, the defendant did not carry out the work. Page 4 of 28

C/FA/2380/2003 JUDGMENT Even though the defendant was put to the notice that the plaintiff corporation will have to claim compensation as per Clause -2 of B-2 agreement, the defendant did not carry out the work. It is further the case of the plaintiff that the plaintiff also intimated the defendant to restart the work in right earnest and on failure threatened to take action under clause (3)(c). It is further the case of the plaintiff that by communication dated 14.3.1981 defendant requested the Chief Engineer of the plaintiff to take sympathetic consideration, however, the defendant did not make any attempt to restart the work. It is also the case of the plaintiff that defendant removed all his tools, plants, materials etc. from the site and the site was thus abandoned by the defendant. It is further the case of the plaintiff that on 21.4.1991 the competent officer of the plaintiff asked the defendant to remain present for taking measurement. However the defendant did not accede to such request. It is further the case of the plaintiff that five running bills have been paid and as a last resort the contract of the defendant came Page 5 of 28

C/FA/2380/2003 JUDGMENT to be rescinded by the plaintiff vide letter dated 3.4.1981. 7. It is further the case of the plaintiff that because of such inaction on the part of the defendant, the plaintiff corporation had to invite fresh tender for the said abandoned work. It further appears from the record that one Shri D.R. Mody was given work which was abandoned. According to the plaintiff the offer of Shri D.R.Mody was of Rs.5,69,975.25. On this factual matrix it is the case of the plaintiff that the plaintiff suffered a loss of Rs. 2,16,343.64 and the defendant is bound to pay the same to the plaintiff as per terms and conditions of the tender. It is the case of the plaintiff that the plaintiff prepared sixth and final bill of the defendant amounting to Rs.7,786.17 over and above this, credit of Rs. 33,882.03 towards material received from the site was also given to the defendant. It was further contended by the plaintiff that the plaintiff had to recover from the defendant an amount of Rs. 14,475/- for the material on which Page 6 of 28

C/FA/2380/2003 JUDGMENT the secured advance was given. Rs. 156/- towards income tax, Rs.1,503.88 towards non-accounted misuse of materials and Rs. 4,100/- towards electric consumption charges and further Rs.4,738/- /- towards water charges and Rs.3,000/- as roller charges. On this basis it is contended by the plaintiff that the plaintiff has to recover Rs. 27,972.82 and thus net amount that was payable to the defendant would come to Rs. 13,695.32. It is further contended that the defendant had deposited security deposit to the tune of Rs.1,27,086/- which has been encashed by the plaintiff and Rs. 500/- and Rs.300/- were recovered from the running bills towards the checking of measurements. It is therefore contended by the plaintiff that the plaintiff has Rs.1,41,581.32 which originally belonged to the defendant. On this basis, it is contended by the plaintiff that as the plaintiff had to incur extra expenditure to the tune of Rs.2,16,096.14, still an amount of Rs.74,514.82 is to be recovered from the defendant towards the loss suffered by the plaintiff along with interest @ 12% as prayed for in the suit. Page 7 of 28

C/FA/2380/2003 JUDGMENT 8. The defendant filed detailed written statement and also filed counter claim against the plaintiff. The learned Judge of the City Civil Court considered the pleadings i.e. plaint, written statement filed by the defendant at exhibit 16 along with counter claim and the written statement filed by the plaintiff against the counter claim of the defendant at exhibit 19 and framed issues at exhibit 45 as under :

“(1) Whether the plaintiff proves that the defendant completely abandoned the suit work or undertaken by him under the Tender and thereby committed a breach of contract ? (2) Whether the plaintiff proves that on account of breach committed by the defendant it has suffered a loss of Rs.2,16,343=64 ps ? (3) Whether the defendant proves that because of not supplying drawings/designs and certified copy of the tender, and due to location of site and due to monsoon the work was delayed ? (4) Whether the defendant proves that due to dispute Page 8 of 28

C/FA/2380/2003 JUDGMENT between the plaintiff and public works department for C.D. Works the work was delayed ? (5) Whether the defendant proves that the plaintiff failed to supply steel and cement in required quantity in accordance with the terms of the contract? (6) Whether the defendant proves that because of delay in placing C.D. works, there was delay in carting materials from High Way to the site ? (7) Whether the defendant proves that the plaintiff has sailed in giving line because the construction of C.D. work was not over ? (8) Whether the plaintiff proves that the time was an essence of the contract ? (9) What is found due to the plaintiff ? (10) Whether the defendant proves the counter claim ? (11) What order and decree ? “ 9. After appreciation of the evidence on record the learned Judge of the City Civil Court dismissed the suit of the plaintiff and partly allowed the counter claim of the defendant to the extent of Page 9 of 28

C/FA/2380/2003 JUDGMENT Rs.2,49,241.89. It further appears that thereafter the defendant filed Misc. Application being Misc. Application No. 277 of 2002 for amendment of the judgment under sections 151 & 152 of the Code and claimed interest on the amount of security deposit as well as the claim which was allowed by way of counter claim. The said application came to be rejected vide order dated 23.7.2002. The plaintiff has approached this Court against the dismissal of the suit and counter claim having been allowed and the defendant has challenged the order dated 23.7.2002 whereby the Misc. Application No. 277 of 2002 claiming interest on the amount awarded in the counter claim came to be rejected. 10. Heard Mr. Hardik Raval, learned Advocate for the plaintiff and Mr. Archit P. Jani, learned Advocate for the defendant and have also perused Record and Proceedings of the suit as well as Misc. Application. 11. Mr. Raval for the plaintiff has taken this Court through the impugned judgment and order passed in the Page 10 of 28

C/FA/2380/2003 JUDGMENT suit. Mr. Raval has raised the following contentions: (1) That the learned Judge of the City Civil Court has erred in coming to the conclusion that the plaintiff failed to prove that the defendant abandoned the work. (2) That the learned Judge of the City Civil Court has wrongly appreciated the evidence on record and wrongly held that the plaintiff failed to prove that the plaintiff was entitled to rescinding the suit contract. (3) It was further contended that the Trial Court has not correctly appreciated the evidence on record to the effect that the plaintiff had to get the abandoned work done through different contractor for which the plaintiff had suffered a loss of Rs.2,16,343.64. (4) The Trial Court has wrongly come to the conclusion that order of termination dated 3.4.1981 Page 11 of 28

C/FA/2380/2003 JUDGMENT was wrong. (5) The learned Judge of the City Civil Court has wrongly come to the conclusion that the defendant has proved that because of non supply of drawings/designs and certified copy of tender and due to location of site and due to monsoon the work was delayed. (6) The learned Judge of the City Civil Court has wrongly believed the case of the defendant that because of dispute with the Public Works Department there was delay in carrying out C.D. Work. (7) That the learned Judge of the City Civil Court has wrongly believed the case of the defendant and wrongly allowed the counter claim of Rs.2,49,241.89. (8) The learned Judge of the City Civil Court has wrongly believed the case of the plaintiff and has wrongly come to the conclusion that the plaintiff could not prove its case. Page 12 of 28

C/FA/2380/2003 JUDGMENT 12. Mr. Raval therefore submitted that the appeal filed by the plaintiff be allowed. Mr. Raval further submitted that as the defendant is not entitled to any counter claim, there is no question of paying interest to the defendant and by allowing this appeal this Court may be pleased to allow the appeal filed by the plaintiff and dismiss the appeal filed by the defendant. 13. Per contra Mr. Archit Jani, learned Advocate for the defendant has supported the judgment and decree passed in the suit and submitted as under : (1) The Trial Court has rightly allowed the counter claim. (2) That the findings arrived at by the Trial Court is based on correct appreciation of evidence on record and has rightly answered issue no.10. (3) It was contended that the defendant as such accepted the impugned judgment and award and filed its appeal only on the question of non grant of interest on the amount of counter claim allowed by the Trial Page 13 of 28

C/FA/2380/2003 JUDGMENT Court. (4) It was contended that the Trial Court has correctly come to the conclusion that the work was delayed because of plaintiff's inaction and the Trial Court has therefore on correct appreciation of the evidence has correctly come to the conclusion that the termination order dated 3.4.1981 was two and half months prior to the stipulated period and therefore the impugned judgment and decree as far as dismissing the suit of the plaintiff and awarding of counter claim is legal and proper. (5) It was further submitted that the Trial Court has erred in passing the order dated 23.7.2002 and has wrongly not awarded the interest. (6) It was contended that when the Trial Court had come to the conclusion that the order of termination dated 3.4.1981 was erroneous and therefore security deposit has been wrongly encashed by the plaintiff as per tender condition as the amount of security deposit was lying with the plaintiff since 1979 the defendant would be entitled to interest @ 12% p.a. on the said amount. Page 14 of 28

C/FA/2380/2003 JUDGMENT (7) It was also contended that the defendant has clearly proved that though the work was done by the defendant, the defendant has not paid such amount to the tune of Rs. 1,22,155/-. Having come to the conclusion that such amount is due and payable the learned Judge of the City Civil Court ought to have allowed the Misc. Application. (8) The learned Judge of the City Civil Court has wrongly concluded that the defendant is not entitled to any interest. (9) Mr. Jani therefore contended that the appeal filed by the plaintiff deserves to be dismissed and the appeal filed by the defendant deserves to be allowed. 14. No other and further submissions were made by the learned Counsels appearing for the plaintiff and the defendant. 15. Considering the submissions made by the learned Counsels appearing for the parties and on perusal of Record and Proceedings as well as on re-appreciation Page 15 of 28

C/FA/2380/2003 JUDGMENT of evidence on record, this Court is of the opinion that the learned Judge of the City Civil Court while examining issue no. 8 has rightly interpreted clause (2) & (3) of the contract. 16. Similarly considering the depositions of Shri Rasiklal at exhibit 46 and Bharatbhai at exhibit 94 examined by the plaintiff as well as oral deposition of defendant at exhibit 96, on re-appreciation of the said piece of evidence by this Court it has come on record that when the work order was issued in the month of June, 1979 it was admittedly monsoon season and as the evidence reveals 60% of the site was under water which is accepted by the witness of the plaintiff. The said witness has also stated that land upon which the work was to be executed by the defendant was black and slushy and therefore was not fit and proper for carrying out work. The said witness has also submitted that as per tender agreement the material like cement and steel was to be supplied by the plaintiff. The said witness has on the contrary admitted in his cross examination that Page 16 of 28

C/FA/2380/2003 JUDGMENT only 13.50% of the cement could be supplied. On re- appreciation of the evidence of the witness examined by the plaintiff it transpires that because of non carrying out C.D. Work in time and because of 'Kans' it was not possible for the defendant to carry any vehicle to the site. On re-appreciation of the evidence therefore that the learned Judge of the City Civil Court has rightly come to the conclusion that delay occurred not on account of any failure on the part of the defendant and has rightly appreciated the evidence on record and has rightly come to the conclusion that defendant cannot be said to be responsible for any delay and non compliance of work. The conditions of tender are to be harmoniously read and construed. The tender conditions therefore entails performance by both the parties. 17. As noted hereinabove, in the instant case steel and cement were to be supplied by the plaintiff. Similarly it was the duty of the plaintiff to see that even during monsoon the defendant can take vehicles to the site to carryout the work, it has Page 17 of 28

C/FA/2380/2003 JUDGMENT come on the evidence that both such vital conditions upon which progress of work depends is not performed by the plaintiff itself and therefore the Trial Court has committed no error in coming to the conclusion that order of termination dated 3.4.1981 which was two and half months prior to the period stipulated as per tender document is a wrongful termination and has therefore has rightly come to the conclusion that the plaintiff has wrongly rescinded the contract. It may be noted that in para 54 of the impugned judgment the plaintiff relied upon seven letters which were written by its officers to the defendant and it is observed by learned Judge of the City Civil Court that it is for the purpose of saving their skin. It may be noted that first such letter was written by Engineer of the plaintiff on 5.7.1979. 2nd. letter is dated 10.7.1979 i.e. after span of five days. The said letter indicates that because of rains it is not possible for the truck to reach the site. It is noticed that thereafter on 12.7.1979 a letter written came to be written by the Deputy Engineer to the defendant which speaks of approach road to be Page 18 of 28

C/FA/2380/2003 JUDGMENT constructed first. There is another letter dated 12.7.1979 which speaks the fact that the steel and material for fabrication have arrived and the defendant has been requested to send his labour contractor. The next letter is dated 24.7.1979 which speaks that because of slushy land terrain the truck got stuck. An allegation is made against the defendant that defendant did not cooperate. There are further letters dated 7.9.1979 and 1.2.1980. The Trial Court has rightly appreciated the contents of those letters at Exh.103 and has committed no error in coming to the conclusion that the defendant has not committed any breach of the condition of the tender and has correctly appreciated the evidence and has rightly come to the conclusion that it renders plaintiff liable for the breach of the contract. Clause (2) of the condition of the contract prescribes for compensation for delay and clause (3) provides for action when whole security deposit is forfeited. Clause (3) therefore is depending upon the previous actions that are required to be taken under clause (2). The plaintiff has not been able to bring Page 19 of 28

C/FA/2380/2003 JUDGMENT on record that any action as envisaged under clause (2) of the tender was taken by the plaintiff. The Trial Court has therefore not committed any error in coming to the conclusion that the order of termination dated 3.4.1981 was straight way passed even before the expiry period of 24 months. Considering all these cumulatively therefore the Trial Court has committed no error in coming to the conclusion that the plaintiff corporation has suffered no loss and has therefore rightly dismissed the suit filed by the plaintiff. The Trial Court while considering five items of counter claim filed by defendant at Exh. 16 along with its written statement has considered each item based on the evidence on record. The learned Judge of the City Civil Court has therefore on correct appreciation of evidence on record and on the basis of the details which are submitted by the defendant as well as extent of work which was undertaken by the defendant on basis of the record and in absence of any evidence to the contrary has rightly allowed the claim towards 'work done but not paid' to the tune of Page 20 of 28

C/FA/2380/2003 JUDGMENT Rs.1,22,155.89. Similarly the trial Court has rightly come to the conclusion that the contract was wrongly rescinded by order dated 3.4.1981 and the learned Judge of the City Civil Court has clearly arrived at the conclusion that the defendant would be entitled to return security deposit to the tune of Rs.1,27,086/- the same is legal and proper. On re- appreciation of the evidence therefore this Court is of the opinion that the learned Judge of the City Civil Court has committed no error in accepting counter claim to the tune of Rs. 2,49,241 as under : (i) security deposit Rs. 1,27,086/- (ii) Work done but not paid Rs. 1,22,155/- ----------------- Total Rs. 2,49,241/- 18. As far as the claim of interest raised by the defendant in First Appeal No. 968 of 20013 is concerned, as per condition of tender the plaintiff was to return back the security deposit within a period of three months from submitting of the final bill by the defendant. Evidence on record reveals and Page 21 of 28

C/FA/2380/2003 JUDGMENT even Mr. Jani has candidly submitted that final bill was not submitted by the defendant but it was submitted by the plaintiff itself. The learned Judge of the City Civil Court has not committed any error in coming to the conclusion that the defendant is not entitled to any interest on the amount of security deposit i.e. on Rs.1,27,086/-. However, as far as claim of interest of Rs. 1,22,155/-, which is the amount payable on work done but not paid, in opinion of this Court the defendant would be entitled to interest. The Trial Court has recorded the factum that the defendant has carried out that much work. In light of these facts therefore while allowing counter claim the Trial Court has observed that the defendant is entitled to recover the amount from the plaintiff corporation. 19. At this juncture it would be appropriate to refer to the judgment of the Apex Court in the case of Thazhathe Purayil Sarabi & Ors. Vs. Union of India & Anr. reported in AIR 2009 SC 3098, wherein it is observed that : Page 22 of 28

C/FA/2380/2003 JUDGMENT “15. As indicated hereinbefore, apart from the provisions of the Interest Act, Section 34 of the Civil Procedure Code also empowers the Court to order interest on a decree for payment of money in the following manner : "34. Interest.- (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, (with further interest at such rate not exceeding six per cent, per annum as the Court deems reasonable on such principal sum from) the date of the decree to the date of payment, or to such earlier date as the Court thinks fit : (Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Explanation I. - In this sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (5 of 1970). Explanation II. - For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability-) (2) Where such a decree is silent with respect to the payment of further interest (on such principal sum) from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not Page 23 of 28

C/FA/2380/2003 JUDGMENT lie." 16.It is, therefore, clear that the Court, while making a decree for payment of money is entitled to grant interest at the current rate of interest or contractual rate as it deems reasonable to be paid on the principal sum adjudged to be payable and/or awarded, from the date of claim or from the date of the order or decree for recovery of the outstanding dues. There is also hardly any room for doubt that interest may be claimed on any amount decreed or awarded for the period during which the money was due and yet remained unpaid to the claimants. 17-18. The Courts are consistent in their view that normally when a money decree is passed, it is most essential that interest be granted for the period during which the money was due, but could not be utilized by the person in whose favour an order of recovery of money was passed. As has been frequently explained by this Court and various High Courts, interest is essentially a compensation payable on account of denial of the right to utilise the money due, which has been, in fact, utilized by the person withholding the same. Accordingly, payment of interest follows as a matter of course when a money decree is passed. The only question to be decided is since when is such interest payable on such a decree.Though, there are two divergent views, one indicating that interest is payable from the date when claim for the principal sum is made, namely, the date of institution of the proceedings in the recovery of the amount, the other view is that such interest is payable only when a determination is made and order is passed for recovery of the dues. However, the more consistent view has been the former and in rare cases interest has been awarded for periods even prior to the institution of proceedings for recovery of the dues, where the same is provided for by the terms of the agreement entered into Page 24 of 28

C/FA/2380/2003 JUDGMENT between the parties or where the same is permissible by statute.” 20. Similarly the Division Bench of this Court in the case of Kothari And Associates Vs. State of Gujarat, reported in 2011 (5) GLR Pg.4297 has also observed thus : “16. Section 3(1)(b) of the Interest Act, 1978 reads as under: "3(1)(b) If, the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings : Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings interest shall not be allowed under this section for the period after such repayment.” 17. It would be evident from the above provision, that the plaintiff would be entitled to interest from the date on which it is demanded. Mr.Pahwa has relied upon the observations made by this Court rendered in First Appeal No.34 of 1992 dated 30.07.2003, which are as under: “5.14 As regards interest the learned counsel for the plaintiff has submitted that looking to the evidence at Exh.43, para 25 (page 119 of the paper book of the appellant) wherein witness has mentioned that for the ad hoc advance given by the appellant they have charged 15% interest and deducted from the bill. Thus, in fact, the trial court on the basis of the same, should have awarded 15% interest whereas interest awarded is 12% only. The principle of reasonability applied by the Hon'ble Supreme Court in the case of THE MANAGING DIRECTOR, J & K HANDICRAFTS VS. M/S. GOOD LUCK CARPETS reported in AIR 1990 SC 864 which clearly laid down in para 6 as under:- "para 6. This however, does not take away the jurisdiction of the Court to allow interest from the date on which the award is made rule of the Court. In the instant case this date is 28th May, 1987. We are of the opinion that it is a fit case where the respondent may be allowed interest on the amount of rupees 95,997.60 ps. from the said date. Coming to the question of the Page 25 of 28

C/FA/2380/2003 JUDGMENT rate of interest the agreement between the parties contemplates payment of interest to the appellant by the respondent in a certain contingency at the rate of 18% per annum. The said rate, in our opinion, can be taken as a reasonable basis for fixing the rate on which interest is to be awarded to the respondent for the simple reason that even the appellant considered that rate to be reasonable for recovery from the respondent".

5.15 However, the learned counsel for the plaintiff has stated that he supports the finding of the learned trial judge to that extent. The plaintiff has filed Cross Objection before this court in which the plaintiff has stated that the claimed interest from the date of written demand of the suit claim vide letter Exh. 262 wherein interest has been claimed from the due date i.e. 5.3.1982. The plaintiff has claimed interest from due date and even in notice under section 80 which is at Exh.57 wherein also the plaintiff has claimed interest from the due date i.e. from 5.3.1982 and therefore the plaintiff is entitled for interest from the date demanded in the notice and on construing due date, date will be 20.6.1980 when the work was completed. He has relied on the judgement of the Hon'ble Supreme Court in the case of B.V. RADHA KRISHNA VS. SPONGE IRON INDIA LTD. reported in AIR 1997 SC 1324 in which at paragraphs 15, 16 and 17 the Hon'ble Supreme Court has observed as follows: 5.15A "Para 15 - Learned counsel for the appellant also submitted that the High Court went wrong in awarding interest only from 14.6.1984, on the ground that the notice demanding the amount was issued on that date only and, therefore, the appellant was not entitled to any interest prior to that date. According to the learned counsel, Section 3(1)(b) of the Interest Act, 1978, in unequivocal terms specifies that interest would be available from the date mentioned in the demand notice and without noticing that provision the High Court has wrongly given interest from the date of the notice. 5.15B Para 16- On the question of interest we think the learned counsel for the appellant is right in placing reliance on Section 3(1)(b) of the Interest Act. The appellant-Company (sic) had issued notice on 14.6.1984, demanding payment of the specified amount and interest on that specified amount at the rate of 21% per annum from 1.4.1983 till payment. Section 3(1)(b) of the Interest Act, 1978, reads as follows: Page 26 of 28

C/FA/2380/2003 JUDGMENT "3. Power of Court to allow interest.- (1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the Court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say,- (a) ........ (b) If the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings.” 18.We find that the trial Court, after taking into consideration the totality of circumstances as per the evidence is correct in coming to the conclusion that the plaintiff would be entitled to interest @ 9% i.e. the prevailing bank rate. The claim of the present plaintiff was not for the payment of any unliquidated damages or for the payment of any amount arising out of an inchoate or contingent obligation. It was for the payment of sum which was uncertainable on calculation if made in accordance with the terms of the agreement and, therefore, it was clearly a sum certain within the meaning of the Interest Act. Therefore the trial Court, taking into consideration the vital factor of current bank rate has not committed any error while granting 9% interest. However, we find that the plaintiff has raised the demand of interest vide notice dated 28.03.1982 and had specifically claimed interest from 19.02.1981 and, therefore, the plaintiff would be entitled to interest @ 9% from the date of such demand.” 21. In light of the aforesaid, therefore, the defendant would be entitled to interest on Rs.1,22,155/- which the plaintiff is required to pay for the work done but not paid. Considering the fact that the contract was of 1979 even if prevailing bank rate is taken into consideration the plaintiff would Page 27 of 28

C/FA/2380/2003 JUDGMENT be entitled to interest @ 6% from the date of the suit till its realisation on Rs.1,22,155/-. 22. Resultantly, in light of the aforesaid discussion and observations, therefore, First Appeal No. 2380 of 2003 filed by the plaintiff is dismissed. First Appeal No. 968 of 2003 is partly allowed. judgment and decree passed by the learned Judge of the City Civil Court is confirmed as far as the amount of Rs.2,49,241/- to be paid by the plaintiff to the defendant. However, the defendant would be entitled to simple interest @ 6% p.a. Rs.1,22,155/- as aforesaid from the date of the filing of the suit till its realisation. Decree stands modified to that extent. Parties to bear their own cost. 23. Record & Proceedings to be sent forthwith to the Trial Court. Sd/- (R.M.CHHAYA, J.) M.M.BHATT Page 28 of 28