IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA R.F.A. Nos. 66 & 67 of 1994 Date of decision: 6.5.2008 State of Himachal Pradesh ..Appellant Versus United Himachal Motors and Industries and others .Respondents Coram The Hon’ble Mr. Justice Jagdish Bhalla, Chief Justice The Hon’ble Mr. Justice R.B. Misra, Judge. Whether approved for reporting?1 For the Appellant: Mr.R.K.Bawa, Advocate General, with Mr.Ankush Sood, Deputy Advocate General. For Respondents No. 1 to 3: Mr. Y.Paul, Advocate For Respondent No. 4: Mr. L.C.Sood, Advocate. Per Jagdish Bhalla, C.J.(Oral) This regular first appeal arises out of a judgment dated 10.11.1993 passed by the learned Single Judge dismissing the original suit of the plaintiff. The plaintiff filed an original suit before the learned Single Judge after being aggrieved by the conduct of the defendants to the extent that the plaintiff wanted to purchase three Mahindra Jeeps and three Mahindra Pick-up vans and in the process, as required by defendants 1 to 3, the plaintiff in accordance with terms 1 Whether the reporters of the local papers may be allowed to see the Judgment? 2 and conditions of defendants No.1 and 4 paid full payment of cost of the vehicles to defendant No.1 through two bank drafts No. 313915 and 313861 amounting to Rs. 1,80,875.01 paise and Rs. 1,20,000 respectively in the name of defendant No.1. It is admitted case of the parties that the said drafts were encashed by defendant No.1. According to the plaintiff, inspite of the money deposited, the supplies were not made by the defendants. The learned counsel for defendant No.4 has indicated that on 23rd April, 1979, notice canceling the distributorship of defendant No.1 was issued , inter alia, indicating that after receipt of the said letter, the defendant No.1 will have one month’s time to carry the business. Thereafter the distributorship shall automatically stand cancelled. It was further called upon by defendant No.4 to send all the advance received by defendant No.1 so as the vehicles can be directly supplied. We find that there was correspondence between the department concerned and defendant No.4 directly with respect to supply of jeeps and vans. It has further come to our knowledge that inspite of the fact that the distributorship of defendant No. 1 was cancelled in the month of October, 1979, two jeeps earmarked for the plaintiff department were sent by respondent No.4. However, for the reasons best known to defendants 1 to 3 3, instead of supplying these two vehicles to the plaintiff department, they were sent to some other department. We have further been informed that there were lot of correspondence between the plaintiff and defendant No.1 with respect to the supply of the vehicles. However, in light of the non action of the defendants, two suits were filed i.e. suit No.15/82 pertaining to the recovery of principle amount and interest/damages with respect to supply of three jeeps, whereas civil suit No. 16/82 pertains to the recovery of principle amount and interest/damages with respect to the supply of three diesel pick up vans in this court. The learned Single Judge after calling upon the defendants to file their written statement framed nine issues, recorded the evidence and after hearing the parties, dismissed both the original suits by a common judgment dated 10th November, 1993. Aggrieved by the same, plaintiff filed these appeals. The land of the defendants No. 2,3 and two other brothers was acquired by the State of Himachal Pradesh for the purpose of development of H.P. Krishi Vishavavidlaya. The Finance Committee of the University on 15th September, 1981 decided that the amount of money paid by the Horticulture department towards the 4 Jeeps and Vans will be adjusted towards the payment of compensation to defendants No. 2 and 3. Learned counsel for the plaintiff, however, submitted that the plaintiff department had infact agreed for the adjustment. We find that the suit for recovery of money and interest was filed though in light of the decision taken by the Finance Committee and some adjustment of money has been made. The facts and issues framed have been discussed in detail by the learned Single Judge , therefore, we are not going in further details which would amount to simply repetition of facts. Learned counsel for the defendants had also submitted that the suit of recovery was not at all maintainable for the reasons that money was adjusted. Learned counsel for the defendants’ while defending their case of interest, submitted that there is no question of paying any interest because there was no written agreement on the record. We are of the considered opinion that the parties who agreed to enter into contract were competent to enter into contract. In light of above, this is a case of implied contract wherein the defendants had accepted the money for the supply of jeeps and pickup vans and in the process accepted the full amount of money. Therefore, it would be unfair on the part of the 5 defendants to say that there was no contract/agreement, as soon as the money for the supply of vehicles was accepted by the defendants. They entered into contract for the supply, therefore, the stand taken by the defendants has no legs to stand. We further find that to honour the contract once the two jeeps were sent by the defendant No.4 for the supply to the plaintiff, defendants 1 to 3 had no jurisdiction or authority to divert the same vehicles to another department of the State. However, for the reasons best known to the defendants, they had diverted two vehicles earmarked for the plaintiff department to some other department. Further they failed to indicate any reason except that the two vehicles have been supplied to another department which they could not have done. This led to breach of the implied agreement between the parties. Defendants No. 1 to 3 cannot get out of it with the explanation, referred to hereinabove. Defendant No.4, though had not directly come into the picture, however, had shown fairness to begin with by supplying two vehicles to the plaintiff through defendants No. 1 to 3 who had different intentions. The non action and fraudulent intention of defendants No. 1 to 3 has come to surface when they failed to supply two jeeps. In the process, we find that the money regarding the jeeps and vans was not sent to 6 defendant No.4 by defendant No.1. Since the money of other two vehicles was not sent to defendant No.4 by defendants No. 1 to 3, therefore, the other two vehicles were not sent by defendant No.4. We have reasons to believe in light of the above discussion that defendant No.4 would have sent the other two vehicles as well if the defendants No. 1 to 3 had sent the money which was accepted by defendants No. 1 to 3 but not sent to defendant No.4. The learned counsel for defendants No. 1 to 3 had raised issue that the suit for interest is not maintainable. However, the learned counsel for the appellant is only pressing for the payment of interest and damages. In support he has relied upon a Single Judge judgment in Municipal Committee, Akot Vs. Surajmal Shriram Ginning and Pressing Factory now styled as Brijmohan Jamnalal Ginning and Pressing Factory, Akola, AIR 1938 Nagpur 119. It has persuasive value whereas it has been argued on behalf of the defendants that the above judgment is binding on this Bench. Similarly, learned counsel for the plaintiff for the persuasive value has relied upon State of West Bengal and another Vs. Ajit Kumar Mukherjee, AIR 1977 Calcutta 273 and M/s Narendra Tractor Vs. Omkar 7 Singh 1979 Allahabad Weekly cases 555, wherein in similar circumstances interest was allowed. It has further been submitted on behalf of the plaintiff that the amount of interest to be recovered from the defendants is substantially one and there is no authority vested in the Head of department to relinquish any such right, title or interest as it is prerogative of the State only. It has further been submitted that the State has never relinquished its right to recover the principle along with interest. We would not like to go into the controversy regarding the adjustment made by the Finance Committee of the University. We have already held hereinabove that there was implied contract as soon as defendants No. 1 to 3 have accepted the money. Further it was strengthened by the fact that the two vehicles were sent to defendants No. 1 to 3 by defendant No.4 and earmarked to be supplied to the plaintiff. Inspite of the same, the defendants had not supplied the vehicles to the plaintiff. Further, if we take the argument of defendants 1 to 3 that there was adjustment made some time in the month of September, 1981, even then the money was with defendants 1 to 3 and in case they were not in a position to supply after their distributionship was cancelled, fairness would have been on their part to offer to return 8 the money at least, but the same was not shown on the part of defendants No. 1 to 3. The plaintiff had claimed 18% interest from the time of filing of the suit in the year 1982. While we are dealing with the matter, we do not find that any Nationalized Bank is giving interest at the rate of 18% Further, we find that no details of the amount claimed as damages have been indicated in the suit on the part of the plaintiff. Merely that the plaintiff was only asking for the interest and was not serious with the damages otherwise they would have supported their case for damages with some facts and figures which are missing from the record. Accordingly, it is very difficult for this court to come to the conclusion that what damages can be awarded. Learned counsel for the plaintiff has relied upon Section 61 of the Sales of Goods Act, 1930. We are of the considered opinion that the said section does not create any new right to claim interest. However, it only preserve the right to claim the interest, if any, under the law, independently the Sale of Goods Act. Learned counsel has further relied upon Section 73 of Indian Contract Act which deals with compensation, loss, or damages because of breach of contract and it has been submitted that there is breach of implied contract, as 9 referred to hereinabove. Further, the defendants did not offer to return the money for consiederable long time and had earned interest on the same. It had come in the evidence that defendants 1 to 3 had taken advances for the supply of vehicles not only from the plaintiff, but from the other agencies as well and only to satisfy one of such department the earmarked vehicles were not sent to the plaintiff, but to the other department. It appears to be a very intelligent game for taking total money in advance and keeping it in circulation. We find that the maximum interest which is paid at the prevailing rate of Reserve Bank of India and in certain matters under section 3 of the Interest Act, 1978 is 6% interest. The interest of justice will suffice if this court also awards 6% interest to the plaintiff to be paid by defendants 1 to 3 from the date of filing of the suit till the realization of the amount. In light of above, order passed by the learned Single Judge is set aside and the appeals stand allowed. (Jagdish Bhalla), C.J. ( R.B. Misra ), J. 6th May, 2008 (sl/rks)