IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE NINETEENTH DAY OF JULY, TWO THOUSAND AND ELEVEN PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.20115 of 2009 Between: Larsen and Tubro Ltd., Hyderabad. … Petitioner And Govt., of A.P., rep., by its Principal Secretary, Irrigation & Command Area Development Dept., Hyderabad & others. … Respondents Counsel for the petitioner: Sri Gd. Nagesh Counsel for respondents 1-3: AGP for Irrigation and CAD Counsel for respondents 4&5: None This Court made the following: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.20115 of 2009 ORDER:- This Writ Petition is filed for a Mandamus to set aside Memo No.SE/CCIII/KDP/DB/D3/L1-04/42P6, dated 17.02.2009, of respondent No.2 and for issuing a consequential direction to the respondents not to recover the mobilisation advance at the enhanced rate of interest. The petitioner participated in the tender process for the project of Pilot Micro Irrigation Scheme under Gandikota Reservoir and was awarded the contract work for package No.L1-04/2006-07 and entered into agreement, dated 18.08.2007, in respect of the works related to investigation, design, supply and erection of necessary lift systems with all electrical and mechanical components, surge protection systems and all control valve for lifting 7.50 TMC in 45 days from storage reservoir. In terms of clause 49.1 of the conditions of contract, the petitioner has availed the facility of mobilisation advance in two instalments equivalent to 10% of the contract amount. The mobilisation advance so paid to the petitioner was recovered from his running bills in accordance with clause 49.6.1. The dispute pertains to the rate of interest that is recoverable. It is not in dispute that clause 49.6.1 postulates recovery of mobilisation advance with interest at 8% per annum. However, under the impugned memo, the respondents sought to recover interest at 10% per annum for the year 2006-07 and 10.5% for the year 2007-08. This memo is questioned in this Writ Petition. It is the pleaded case of the petitioner that the rate of interest is specified in the agreement itself and therefore it is not permissible for the respondents to recover the interest in excess of what is prescribed under the agreement. In the counter affidavit filed by respondent No.2, it is inter alia stated that even though the interest rate of mobilisation advance is specified as 8% per annum in the agreement, the State Government in G.O.Ms.Nos.303 and 292, dated 19.10.2006 and 28.11.2007 respectively has fixed productive test rate on irrigation works at 10% for the year 2006-07 and 10.50% for the year 2007-08 and having regard to the same, the respondents proposed to recover the difference rate of interest on the mobilisation advance. In my opinion, the respondents cannot be permitted to act contrary to the specific provisions of the contract. The reciprocal obligations and mutual liabilities of the parties are governed by the concluded contract. It is not the pleaded case of the respondents that any right is reserved under agreement to recover interest over and above what is specified in the agreement on any future contingencies. In the absence of such a right having been reserved, it is not permissible for the respondents to ignore the specific agreement condition and act contrary thereto by seeking to recover interest in excess of what is stipulated in the contract. The two G.Os, referred to in the impugned memo, cannot be permitted to supersede the bilateral agreement between the parties. For the abovementioned reasons, the impugned memo cannot be sustained and the same is accordingly quashed by declaring that the petitioner is liable to pay interest at 8% per annum on the mobilisation advance paid to it. The Writ Petition is accordingly allowed. As a sequel to disposal of the Writ Petition in the manner indicated above, WPMP.No.26238 of 2009 filed by the petitioner for interim relief is disposed of as infructuous. ____________________________ C.V.NAGARJUNA REDDY, J Date: 19.07.2011 ES