THE HON'BLE SRI JUSTICE K.C. BHANU APPEAL SUIT NO. 72 OF 2006 JUDGMENT: This Appeal Suit, under Section 96 of the Code of Civil Procedure, 1908, (for short ‘C.P.C’), is directed against the judgment and decree, dated 04.10.2004 in O.S.No.20 of 2002 on the file of the Senior Civil Judge, Kovvur, Nellore district, whereunder and whereby, the suit filed for recovery of the suit amount, was decreed. 2. The brief facts that are necessary for disposal of the appeal suit may be stated as follows: Plaintiff filed the suit for recovery of amount stating that the defendant was a contractor carrying on the works of Irrigation Department in the State of Andhra Pradesh. He was entrusted with the work of ‘Formation of Percullation’ tank across Buskallavank near Bommavaram Agraharam Village of Ananthasagaram Mandal, Nellore District, for Rs.3,63,448/-. The plaintiff completed 80% of the work entrusted to him by the end of March, 1995 and the same was recorded in the measurement book. At that stage, further execution of work was stopped and the plaintiff was informed that it was due to some administrative reasons. But, the plaintiff was not paid the amount for the work completed by him, which was also recorded in measurement book. In this connection, the plaintiff approached the second defendant number of times, who said that the bill would be paid after clearance of administrative hurdles. Though the plaintiff agreed to complete the balance of work also, he was not permitted to execute the same. After waiting for sufficient time, plaintiff got issued lawyer’s notice, dated 25.1.1999 to the second defendant, to which the latter issued a reply dated 23.3.1999 admitting that plaintiff carried the work to a value of Rs.2,44,000/- and promising to arrange payment after funds are received. As the amount was not paid thereafter also, the present suit was filed for recovery of the same. 3 The written statement filed by the second defendant would reveal about the entrusting the work to the plaintiff, that the work was stopped due to administrative reasons and payment for the work completed by the plaintiff will be made soon after receiving funds, that as per Clause (69) of the A.P. Detailed Standard Specialization and Conditions stipulated in the agreement, the plaintiff is not entitled for claiming interest and hence, they pray to dismiss the suit. 4. Basing on the above pleadings, the following issues have been framed for trial: 1. Whether the plaintiff is entitled for interest as claimed? 2. To what relief ? 5. During trial, on behalf of the plaintiff, PW-1 was examined and Exs.A1 to A3 were marked. On behalf of the defendants, DW-1 was examined and no documents were marked. 6. On appreciation of evidence, the trial court decreed the suit for Rs.2,44,000/- together with costs and subsequent interest at the rate of 6% per annum from the date of suit till the date of realization. . Challenging the same the present appeal is filed. 7. Now, the points that arise for consideration are: i) whether the order of the trial court is correct, proper; and ii) Whether the plaintiff is entitled for interest as prayed for? 8. The learned counsel for the appellant contended that the department is at liberty to stop the work on administrative grounds; that, in the absence of any contract, granting of interest at the rate of 6% per annum from the decree is erroneous, and therefore, granting interest @6% is liable to be set aside. 9. On the other hand, the learned counsel for the respondents contended that in the absence of any contract or agreement, Section 3 of the Interest Act, 1978, provides for granting of interest at the prevailing rate of interest and therefore, the trial court has rightly granted interest and there are no grounds to interfere with the same. 10. The factual matrix is not in dispute. The respondent/plaintiff was entrusted with the contract work of ‘formation of percullation’ tank across Buskallavank near Bommavaram Agrraharam Village of Ananthasagaram Mandal, Nellore District. The approximate value of the work is Rs.3,66,448/-. It is not in dispute that the respondent executed the work to a tune of Rs.2,44,000/-. It is also an admitted fact that it is not a case of committing default by the respondent in executing the remaining work. It is admitted fact that the Government, due to administrative reasons, directed the respondent to stop the remaining 20% of the work. Even it is admitted fact that due to shortage of funds, the appellants did not pay the money in respect of work carried on by the respondent. 11. The respondent herein claimed interest @ 12.5 % p.a. from the date of suit till the date of decree. Now the only question to be answered in this appeal is whether the respondent/plaintiff is entitled for interest @6% per annum for the work done by him. 12. Though the tender notice was issued on 30.10.1990, it does not reveal about the payment of interest on the delayed payment of bills. Learned counsel appearing for the appellants placed reliance on Rules 68 and 69 of A.P. Detailed Standard Specialization and Conditions, which specifies that Government is not liable for payment of interest for the detailed payments. 13. On the other hand, the learned counsel for the respondents contended that the Clause (69) would apply when there is a default on the part of the contractor who delays in carrying out the work. So, on the admitted facts, 80% of the work has been completed by the respondent within the time prescribed in the contract and the respondent was ready and willing to carry on the remaining 20% of the work. But, he was not allowed to do the work by the appellant, because of administrative reasons. 14. Even in the absence of a contract, the court can grant interest at the current rate of interest as provided under Section 3 of the Interest Act, 1978, which reads. “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 things 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, Therefore, the Court is empowered to grant interest for the delayed payments. The Government has not made any efforts to pay the amount for the 80% of the contract work completed by the respondent which was entrusted to him. Therefore, when the respondent is admittedly entitled for Rs.2,44,000/- in respect of 80% of the work completed by him, the Government ought to have released the funds. Admittedly for no fault of the plaintiff, the funds have not been released due to shortage of funds. Whatever may be the reason, the fact remains the appellants have not paid the amounts covered by Ex.A1-tender notice within the time stipulated. Therefore, granting of interest @ 6% per annum on the amount due to the respondent herein by the trial court cannot be said to be exorbitant or excessive. Hence, there are no grounds to interfere with the judgment of the trial Court. 16. The Appeal Suit is dismissed, confirming the judgment and decree, dated 04.10.2004 in O.S.No.20 of 2002 on the file of the Senior Civil Judge, Kovvur, Nellore district. No costs. _______________ K.C.BHANU. J JUNE 10, 2010. YVL IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE TENTH DAY OF JUNE TWO THOUSAND AND TEN PRESENT THE HON'BLE SRI JUSTICE K.C.BHANU APPEAL SUIT NO. 72 OF 2006 Between : State of A.P., rep.by the District Collector and another. ... APPELLANTS A N D Suri Ankaiah. …RESPONDENT