First appeal no. 85 of 2006 1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO. 85 OF 2006 M/s. H. L. Nathurmal, P. O. Box 39, Panaji, Goa. ... Appellant versus State of Goa, through the Executive Engineer, Stores and Workshops, Div. II, Electricity Department, Government of Goa, Panaji. ... Respondent Shri V. Menezes, Advocate for the Appellant. Shri S. Vahidulla, Government Advocate for the Respondent. CORAM : F. M. REIS, J. DATE : 21ST JULY, 2011. ORAL JUDGMENT The above appeal challenges the Judgment and Decree dated 21-4-2005 passed by the learned Additional District Judge at Panaji in Civil Suit No.164 of 2004. First appeal no. 85 of 2006 2 2. The Respondents filed a suit for recovery of an amount of Rs.2,71,873/- from the Appellants on the ground that the Appellants had placed an order with the Respondents for the supply of 100 metric tonnes of rails. It is further their case that the price quoted by the Appellants was a sum of Rs.16,707/- per metric tonne and that a total sum of Rs.16,70,700/- was duly paid by the Respondents to the Appellants. The Appellants were liable to supply 100 metric tonnes of the rails but, however, only 83.737 metric tonnes were supplied by the Respondents to the Appellants. The remaining supply was not made by the Respondents and consequently on account of short supply of material the Respondents filed the said suit and prayed interalia that the Appellants be directed to pay the said amount of Rs.2,71,873/- together with interest thereon. The Appellants filed their written statement and disputed the contentions of the Respondents. Though, there was no dispute with regard to the short supply of the rails but, however, the Appellants disputed the manner in which the quantum of the supply were arrived at by the Respondents. It is further their case that the Respondents did not comply with the manner in which the measurements and the weight of the rails was agreed to be worked out and as such, it was their contention that they are not liable to pay the amounts claimed by the Respondents. First appeal no. 85 of 2006 3 3. After framing the issues and recording the evidence, the learned Judge by Judgment and Decree dated 21-4-2005 decreed the suit filed by the Respondents and directed the Appellants to pay the said amount of Rs.2,71,873/- together with interest thereon at the rate of 10% per annum from 15-12-1987 upto the date of actual payment. Being aggrieved by the said Judgment, the Appellants/Respondents filed the present appeal. 4. Shri V. Menezes, learned Counsel for the Appellants has assailed the impugned Judgment and pointed out that the Appellants are not liable to pay any amounts to the Respondents as according to him they had supplied delivery challan which conclusively disclosed the quality and the number of the rails supplied by the Respondents and as such, the question of the Respondents disputing the correctness of such measurements does not arise. Learned Counsel has taken me through the evidence on record and pointed out that there was no breach as contemplated and as such the manner in which the volume of the rails supplied by the Appellants cannot stand the test of correctness on the basis of the terms and conditions of the supply. Learned Counsel has First appeal no. 85 of 2006 4 further pointed out that the learned Judge has not at all appreciated the evidence on record and has come to an erroneous conclusion that the Appellants were liable to pay Rs.2,71,873/- as prayed by the Respondents. Shri Menezes, learned Counsel further submitted that in any event, there was no demand for interest by the Respondents before the filing of the suit and as such, the question of granting any interest at the rate of 10% per annum from 15-12-1987 does not arise. Learned Counsel further submitted that in any event the rate of interest awarded by the learned Judge deserves to be reduced to 6% per annum. Shri Menezes, learned Counsel further submitted that during the pendency of the above appeal, the Appellants had paid a sum of Rs.1,08,000/- to the Respondents and in case the Appellants are liable to pay to the Respondents any amount, such amount paid is to be set off. Shri Menezes, learned Counsel further submitted that on 12-4-2005 the Appellants have tendered a sum of Rs.50,000/- to the Respondents before the learned District Judge and the said amount has also been received by the Respondents. 5. Shri S. Vahidulla, learned Government Advocate for the Respondents has supported the impugned Judgment. Learned First appeal no. 85 of 2006 5 Government Advocate has submitted that the measurements which have been taken and the volume assessed by the Respondents is in accordance with the terms and conditions of the supply of the rails. Learned Government Advocate has taken me through the evidence on record and has pointed out that the Appellants have failed to produce weighment slip. Learned Government Advocate further submitted that the weighment slips ought to have been brought from the Steel Authority of India at Belgaum which are normally accepted by the Respondents and the same have not been produced by the Appellants. Learned Government Advocate has further admitted that the said sum of Rs.1,08,000/- was paid by the Appellants to the Respondents during the pendency of the above appeal and upon instructions submits that the said amount can be set off. As far as Rs.50,000/-, learned Government Advocate points out from the records of the learned District Judge that there is an endorsement on 12-4-2005 to the effect that the amount was accepted by the learned Government Advocate for the Respondents. The learned Government Advocate further conceded that no notice was issued to the Appellants to pay interest before the filing of the suit but, however, submitted that the Respondents are entitled for interest as the Appellants have illegally withheld the amount payable to the First appeal no. 85 of 2006 6 Respondents. Learned Government Advocate as such submitted that the appeal deserves to be rejected. 6. Having heard the learned Counsel, the following points for determination arise:- 1. Whether the learned Judge was justified to direct the payment of the said sum of Rs.2,71,873/- to the Respondents? 2. Whether the learned Judge was justified to award interest at the rate of 10% per annum from 15-12-1997? 7. Dealing with the first point for determination and on perusal of the record, I find that considering the admission on the part of the Appellants that there was a shortfall in the supply of the rails, it cannot be faulted that the said sum of Rs.2,71,873/- is payable by the Appellants to the Respondents. The contention of Shri Menezes, learned Counsel for the Appellants to the effect that the measurements and the volume were not correctly assessed by the Respondents cannot be accepted. On the basis of the material on record, I find that the Respondents have assessed the Volume in accordance with the terms and conditions. The contention of First appeal no. 85 of 2006 7 Mr. Menezes that the mode of determination of the Volume was not as per the condition has not been established by any evidence on record. The Appellant have not produced the weighment slips for the challans as expected from the Appellant. In fact, Shri Menezes, learned Counsel was unable to point out any infirmity in such measurement carried out by the Respondents. Considering the evidence on record, I find that the learned Judge was justified to come to the conclusion that the Appellants are liable to pay a sum of Rs.2,71,873/- to the Respondents but, however, considering the contention of Shri Menezes, learned Counsel to the effect that during the pendency of the above appeal part amount of Rs.1,08,000/- was paid by the Appellants to the Respondents besides the said sum of Rs.50,000/- before the learned District Judge, as the payment of the said amount has not been disputed by the Respondents, the Appellants would be entitled for the set off of the said amounts whilst paying the decretal amount payable by the Respondents. The first point for determination is answered accordingly. 8. With regard to the second point for determination, the learned Judge whilst passing the impugned Judgment has directed the payment of the said amount with 10% interest from 15-12-1997 upto the First appeal no. 85 of 2006 8 payment. There is no dispute that the suit was filed on 14-12-2000. Shri S. Vahidulla, learned Government Advocate fairly concedes that no notice was given to the Appellants to pay any interest before the filing of the suit nor the agreement contemplated the payment of any interest. Hence, the Respondents will be entitled to recover interest from the Appellants from the date of the filing of the suit. The rate awarded by the learned Judge is 10% interest, but however considering that part of the amount was paid during the pendency of the suit, I find that the just interest would be at 8% per annum from the date of filing of the suit upto actual payment. To that extent, the impugned Judgment deserves to be modified. 9. In view of the above, I pass the following order:- ORDER 1. The appeal is partly allowed. 2. The impugned Judgment and Decree dated 21-4-2005 is modified and the Appellants are directed to pay the said sum of Rs.2,71,873/- together with interest at the rate of 8% p.a. from the date of filing of the said suit upto actual payment. First appeal no. 85 of 2006 9 3. The said sum of Rs.1,08,000/- paid by the Appellants during the pendency of the above appeal shall be set off. The Appellant's would also be entitled for adjusting any other amounts paid in the above proceedings to the Respondents. 4. The appeal stands disposed of accordingly with no order as to costs. 5. Decree accordingly. F. M. REIS, J. RD