CIVIL WRIT JURISDICTION CASE No.2958 OF 1994 ******* In the matter of an application under Articles 226 and 227 of the Constitution of India. ******* MESSRS R.K.INDUSTRIES, situated at, P.O. Dev Sangh, P.S. Deoghar, District- Deoghar, through its Partner Smt. Shushila Devi, Mourya Wala, resident of Maurya Niwas, Castair’s Town, P.S. Deoghar, District- Deoghar, Bihar. ….. Petitioner. Versus 1. THE STATE OF BIHAR, through its Secretary, R.E.O. Department, Secretariat, Patna. 2. The Chief Engineer, R.E.O. Department, Patna. 3. The Superintending Engineer, R.E.O., Works Circle, Mayaganj, Bhagalpur. 4. The Executive Engineer, R.E.O. Works Division, Banka. ……. Respondents. ----------- For the Petitioner : Dr. Anil Kumar Upadhyay, Advocate. For the Respondents: Mr. N.K. Sinha, A.A.G.-10 with Mr. Md. Anish Akhtar, A.C. to A.A.G.-10. ********* P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE BIRENDRA PRASAD VERMA ********* S.K. Katriar, J. The petitioner seeks a direction to the respondent authorities for payment of interest on the cheque amount. 2. A brief statement of facts essential for the disposal of this writ petition may be indicated. The petitioner is a manufacturer and supplier of hume pipes. He had made supply of hume pipes to the State of Bihar through respondent no.4, in March 1992, in pursuance of the supply order dated 25.3.1992. Cheque dated 31.3.1992, for Rs.81,008/-, was issued to him and was received by him on that date itself, being the last date of the financial year. 2 According to the petitioner, he made attempts to have the same encashed by presenting it before the concerned treasury but could not be encashed because of heavy rush of cheque-holders which the treasury was unable to handle. Consequently the cheque could not be encashed which the petitioner returned to respondent no.4 on 2.4.1992. After persistent efforts for a period of little less than 11 months, respondent no.4 issued cheque dated 23.2.1993 for the like amount which has been encashed. The present writ petition has been preferred for payment of interest for a period of 10 months and 22 days along with costs. 3. Learned counsel for the petitioner submits that he, being a businessman, arranges his finances from the bank and other sources for which he has to pay interest. Unless the petitioner is paid for supply of the goods in time, he would suffer losses and the entire profit earned by the supply would be eaten away by the interest he has to pay to his lender. He submits that there was no justification for the authorities to issue cheques on the last date of the financial year on which date the treasuries of the Government of Bihar are proverbially overburdened. He has relied on the following orders of one of us (S.K. Katriar, J.), sitting singly: (i) Order dated 1.3.2000, passed in C.W.J.C. No. 4927 of 1999 (Ramdeo Singh Vs. The State of Bihar and others), since reported in 2000 (2) P.L.J.R. 235. 3 (ii) Order dated 28.3.2000, in C.W.J.C. No.5704 of 1999 (M/s. Bharat Agriculture and Mechanical Engineering Co. Vs. State of Bihar and others), 2000(3) P.L.J.R. 126. 4. The learned Additional Advocate General has opposed the writ petition. He submits that altogether nine cheques were issued by respondent no.4 on that date and all the cheques, except that of the petitioner, were encashed on the same day. In his submission, therefore, non-encashment of cheque on 31.3.1992 may be presumed to be attributable to the negligence of the petitioner. He has also advanced submissions to distinguish the aforesaid reported decision of the learned Single Judge. 5. We have perused the materials on record and considered the submissions of learned counsel for the parties. Learned counsel for the petitioner is right in his submission that the Government treasury is proverbially over-crowded on the last date of the financial year, and it is common knowledge that the cheque- holders find it extremely difficult to have the cheques encashed on that date. The respondent authorities have not explained the justification for issuance of the cheque to the petitioner on the last date of the financial year. We have no manner of doubt that no fault can be attributed to the petitioner for non-encashment of the cheques on 31.3.1992. We also find no justification for such enormous delay 4 in issuance of the fresh cheque. It is equally common knowledge that businessmen arrange their liquidity from various sources including the bank on payment of interest. If interest is not granted to the petitioner on belated payment, then his profit would be eaten away by payment of interest to the bankers. We are, therefore, convinced that the petitioner should be compensated with payment of interest. 6. The next question arises is that at the rate at which the interest has to be allowed to the petitioner. Learned counsel for the petitioner rightly relied on the order of this Court in Ramdeo Singh Vs. The State of Bihar (supra). We are mindful of the position that the same was rendered by a learned Single Judge, and one of us. That was also a similar case for issuance of a fresh cheque by the State Government to a civil Contractor in a situation where the cheque could not be encashed within the same financial year because of the fault attributable to the treasury officer. The writ petition was, therefore, allowed with interest at the rate of 25%, and cost quantified at Rs.25,000/-. However, there is one significant difference with the present case, namely, cheque in that case was not issued till the order of the Court. Therefore, that writ petition had been preferred for a direction for payment of the principal amount as well as interest. On the other hand, in the present case, fresh cheque had already been issued to the petitioner, and this writ petition has 5 been preferred only for interest and costs. We are, therefore, not inclined to grant interest at the same rate. 6.1) In the present case, unlike the reported decision, the fresh cheque was issued after a delay of precisely 10 months and 22 days. We are, therefore, of the view that it does not appear to us that the present case is one of governmental arbitrariness. Nonetheless the petitioner has suffered because of being deprived of his money for quite some time. We are, therefore, of the view that interest of justice would be served if the petitioner is paid simple interest at the rate of 18%, from 31.3.1992 to 23.2.1993. 7. In the result, this writ petition is allowed. Respondent no.4 is hereby directed to ensure payment of interest in the aforesaid manner within a period of four months from today, failing which the petitioner shall be entitled to compound interest at the same rate for the same period. In the circumstances of the case, there shall be no order as to costs. (S K Katriar, J.) Birendra Prasad Verma, J. I agree. (Birendra Prasad Verma, J.) Patna High Court, Patna. Dated the 29th day of October, 2010. S.K.Pathak/ (NAFR).