Regular Second Appeal No. 3321 of 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Regular Second Appeal No. 3321 of 2008. (O&M) Date of Decision: 21.5.2009 *** Food Corporation of India & Ors. .. Appellants VS. M/s National Rice and General Mills .. Respondent CORAM: HON'BLE MR. JUSTICE ARVIND KUMAR, Present:- Mr. Ravi Kant Sharma, Advocate for the appellants. Mr. B.S. Bhalla, Advocate for the respondent. *** ARVIND KUMAR, J. Through the instant regular second appeal, the defendant- appellants are challenging the concurrent findings returned by the Courts below to the effect that the plaintiff-respondent is entitled to recovery of Rs.1,06,553/- along with 18% pendente lite and 6% future interest from the defendants. It emerges out from the records that the plaintiff filed the suit for recovery of the above-said amount from the defendants with the averments that in pursuance to a tender agreement entered between the parties the defendants were to supply 360 megatons of paddy, for which the requisite amount was deposited by the plaintiff, but later the defendants supplied 16.81 megatons short of the required quantity and also do not pay the amount of short paddy coming to Rs.55,473/-. After adding interest and cost of tender amount of Rs.15,000/-, the recovery of Rs.1,06,553/- was sought. The defendants contested the claim of the plaintiff on the ground that in another agreement there were dues against the plaintiff, against which the cost of short paddy was adjusted and hence nothing is due Regular Second Appeal No. 3321 of 2008 2 towards the plaintiff. The trial court decreed the suit of the plaintiff and awarded pendente lite and future interest @ 18% and 6% respectively and the findings returned by the trial court were uphold by the first appellate Court, leading to the institution of the instant regular second appeal by the defendants. Having heard the learned counsel for the parties, this Court is of the considered opinion that there is no room to interefere with the findings, so far as entitlement of the plaintiff to the decreetal amount is concerned. It is the admission of own official of defendants and otherwise not disputed by the defendants that the paddy was supplied short of the figure, as agreed upon between the parties, the initial cost of which was already paid by the plaintiff to the defendants and as generally the contractor is entitled for refund of security/ earnest money and the value of the unlifted quantity of paddy. The defendants have also not rebutted as to the costs of shortened paddy, as claimed by the plaintiff. On the contrary, the defendants have totally failed to substantiate their plea that the plaintiff is defaulter of the Corporation, since at no point of time, they claimed the alleged amount of Rs.1,10,53,140/-, the loss of which they allegedly suffered, from the plaintiff. Rather no stock books or account books were proved on record to corroborate the contents of balance sheet Ex.DW1/B, showing the outstanding of aforesaid amount towards the plaintiff firm, whereas their own witness i.e. DW3 admitted that the plaintiff had already completed his part of the contract of the present case. Thus, both the Courts below rightly ordered that the plaintiff is entitled to refund of earnest money and the costs of short paddy supplied along with interest. However, so far as rate of interest is concerned, as per admission of defendants' own witness i.e. DW2, as per agreement the FCI is bound to pay interest to the party for the delayed payment. A letter issued by Assistant Manager FCI Baghapurana to the District Manager FCI Faridkot was proved on record as Ex.P1 wherein the Corporation was asked to release the excess amount deposited by the plaintiff firm, but despite that the Corporation had not bothered to release the amount, rather took an evasive plea, which they failed to substantiate, just to wriggle out of their responsibility. Hence, there is no room to interefere with the rate of interest Regular Second Appeal No. 3321 of 2008 3 awarded by the Courts below prior to the institution of the suit i.e. @ 18% per annum. However, interest @ 18% pendente lite seems to be on higher side and requires modification. Although there is no hard and fast rule in the matter of award of interest and it is the discretion of the Courts, but such an exercise will have to be undertaken within the parameters of circumstances and reason and the rate of interest should not be fixed arbitrarily and the Courts should take into account the current bank rates which in recent years have shown a tendency to slide downwards and has been reduced substantially. In the instant case, the suit was filed by the plaintiff way back in the year 1999 and it took about 8 years in decision thereof, since it underwent tedious process of trial. Obviously, the plaintiff has to suffer for all these years, but the pendente lite interest @ 18% is not acceptable to this Court. Therefore, keeping in view the discussion above, the instant appeal is allowed to the extent that the plaintiff is entitled to the pendente lite interest @ 8% per annum. The judgments and decrees passed by the Courts are modified accordingly. (ARVIND KUMAR) JUDGE May 21,2009 Jiten