M/S. Shakti Tubes Ltd vs State Of Bihar & Ors

2. M/s. Shakti Tubes Ltd.-the appellant as plaintiff filed a suit which was registered as Money Suit No. 153 of 1997 praying for a decree for payment of Rs. 38,13,480/- with pendente lite and future interest compounding at monthly rest at the rate of 24% per annum on the aforesaid decreetal amount till realization with costs of the suit. The trial court decreed the said suit with costs in favour of the appellant-plaintiff and ordered for payment of interest compounding at monthly rest at 24% on the decreetal amount of Rs. 38,13,480/-.

3. Since the aforesaid decree was reversed by the High Court whereby the High Court while mentioning the decree for payment for Rs. 38,13,480/- reversed it to the extent of directing for payment of 9% interest per annum instead of 24% interest per annum, the present appeal is preferred by the appellant-plaintiff.

4. In order to effectively deal with the rival contentions raised by the parties herein it would be necessary to state a few facts leading to the filing of the aforesaid suit by the appellant-plaintiff before the trial court.

5. In the plaint filed by the appellant-plaintiff it was stated that the plaintiff is a company incorporated under the Indian Companies Act and registered as a Small Scale Industry in the Industries Department, Government of Bihar and that it entered into an agreement with the State of Bihar for supply of pipes at the rate of Rs. 174.95 paise. per metre subject to the terms and conditions mentioned in the tender paper. A supply order was placed by the respondent through Chief Engineer's letter No. 8956 dated 16.07.1992 2 with the appellant-plaintiff for making supply of the aforesaid pipes. It was mentioned in the said letter that 90% of the total value of the material received was to be paid after receipt of the material and the balance 10% of the value was to be paid within one month of the receipt of the material, after full verification of the same. It was a stipulation in the said agreement entered into between the parties that the payment would be made at the escalated rate applicable for the quantity of pipes supplied after such escalation come into force and that even in such cases other terms of payment would remain the same. It was alleged in the plaint by the appellant-plaintiff that they supplied the pipes as the per agreement to the concerned consignees, who duly accepted the pipes as per measurement, but the payment was not made. After some time, the payment was made at the rate of Rs. 190.48 paise per metre instead of actual escalated rate of Rs. 199.04 P. per metre. A sum of Rs. 38,13,480/- thus remained payable to the appellant-plaintiff which was withheld illegally by the respondents in respect of the goods supplied.

6. Consequently, the appellant-plaintiff had to file a suit seeking for a decree for payment of the aforesaid amount of Rs. 38,13,480/- with interest compounding at monthly rest at the rate of 24% per annum on the aforesaid decreetal amount. The trial court passed a judgment and decree 3 dated 31.05.1999 in terms of the prayer made in the plaint decreeing for a payment of Rs. 38,13,480/- along with interest compounding at monthly rest at the rate of 24% per annum on the aforesaid amount with effect form 01.06.1993 till realization.

7. The respondents herein being aggrieved by the aforesaid judgment and decree dated 31.05.1999 passed by the trial court filled an appeal in the High Court of Patna which was registered as First Appeal No. 8 of 2000. The only issue raised in the appeal before the High Court was with regard to the decree for payment of higher interest than what the plaintiff was actually entitled to. The High Court considered the contentions of the parties and by its judgment and order dated 20.02.2006 directed that instead of compound interest with monthly rest at the rate of 24% per annum, the appellant-plaintiff would be entitled to simple interest at the rate of 9% per annum with effect from 01.06.1993 till realization.

31. Therefore, in our considered opinion, the present appeal is held to be without any merit and is dismissed accordingly. However, in the facts and circumstances of the case we leave the parties to bear their own costs.

..........................................J. [Dr. Mukundakam Sharma] .......................................J. [Dr. B.S. Chauhan] New Delhi, July 7, 2009 21