Venuthurumalli Gopala Krishna Rao J
1. This Appeal, under Section 96 of the Code of Civil Procedure [for short ‘the C.P.C.’], is filed by the Appellants/defendants challenging the Decree and Judgment, dated 08.08.2006, in O.S. No.24 of 2005 passed by the Special Judge for SC ST (POA) Act-cum-VI Additional District & Sessions Judge, Kurnool [for short ‘the trial Court’]. The Respondent herein is the plaintiff in the said Suit.
2. The Plaintiff filed the above said suit against the defendants for recovery of a sum of Rs.17,87,200/- being the principal and interest relating to supply of goods and for costs.
3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court.
4. The brief averments of the plaint, in O.S. No.24 of 2005, are as under:
The plaintiff’s shop in the name and style of M/s.M.A. Engineering & Electrical agencies, is carrying the business of Electricals and other goods at Shop No.4-40/6/1, Achampet, Mahaboobnagar District. The defendants published paper notification calling tenders from the public for supply of steel Almarahs, Electrical goods and utensils etc., for using the same in Ashram, schools and hostels maintaining under its control. The plaintiff submitted a quotation for supply of material and the same was accepted by the first defendant and issued proceedings accordingly and the plaintiff supplied the material to the first defendant. After receiving the material, the first defendant verified quality and quantity of goods and passed sanction order proceedings, but till the date of filing the suit, the first defendant did not pay the price of the goods, supplied by the plaintiff, amounting of Rs.10,31,200/- to the plaintiff.
5. The first defendant filed a written statement, which was adopted by the defendants 2 to 4, by denying the averments mentioned in the plaint and further contended as under: -
The value of the material supplied by the plaintiff is assessed by the Multi Disciplinary Committee formed during the year 2003, as per the directions of the Director of Industries, A.P., Hyderabad, the value of the material is Rs.6,37,700/-, whereas, the firm (plaintiff) has been paid Rs.6,86,800/-, so the firm has to pay a sum of Rs.49,100/- to the department on total supplies made by the firm and prayed the Court to dismiss the suit.
6. Based on the above pleadings, the trial Court framed the following issues:
(i) Whether the material quoted by the plaintiff is only worth Rs.6,37,700/- as contended by the defendant?
(ii) Whether the plaintiff is entitled to seek for relief as sought for?
(iii) To what relief?
7. During the course of trial in the trial Court, on behalf of the Plaintiff, PW1 was examined and Ex.A1 to Ex.A53 were marked. On behalf of the Defendants DW1 and DW2 were examined and Ex.B1 to Ex.B42 were marked.
8. After completion of the trial and on hearing the arguments of both sides, the trial Court decreed the suit with costs vide its judgment, dated 08.08.2006, against which the present appeal is preferred by the appellants/defendants in the Suit questioning the Decree and Judgment passed by the trial Court.
9. Heard the learned Government Pleader for appeals appearing for appellants and Sri Peta Gnana Teja, learned counsel for respondent.
10. The learned counsel for appellants would contend that the plaintiff supplied the low quality material and quoted high rates of quotation. He would further contend that the committee members visited the place, where the material was supplied and observed that the suppliers including the plaintiff are not registered under APGST and the bills are fabricated in order to defraud the government and the quality of material supplied was also inferior. He would further contend that instead of dismissing the suit filed by the plaintiff, the trial Court decreed the suit and the said decree and judgment is liable to be set aside. He would further contend that the trial Court granted rate of interest at 24% p.a. till the date of filing of the suit even though there is no contract in between the plaintiff and defendants with regard to rate of interest. He would further contend that the decree and the judgment passed by the trial Court may be set aside and the appeal may be allowed.
11. Per contra, the learned counsel for the respondent would contend that on appreciation of entire evidence on record, the trial Court rightly decreed the suit and there is no need to interfere with the finding given by the Trial Court and the appeal may be dismissed.
12. Having regard to the pleadings in the Suit and the findings recorded by the trial Court and in the light of rival contentions and submissions made on either side before this court, the following points would arise for determination:
I. Whether the trial Court is justified in decreeing the suit in favour of the plaintiff and against the defendants?
II. Whether the decree and judgment passed by the trial court needs any interference, if so, to what extent?
13. Point Nos.1 and 2:
The case of the plaintiff is that the plaintiff is carrying the business under the name and style of M/s.M.A.Engineering and Electrical Agencies situated at Achampet and the plaintiff firm is a registered firm to carry the business under Ex.A14. The plaintiff further pleaded that the defendants published calling for tenders from the public towards the purchase of the material, accordingly, the plaintiff gave quotation for supply of the material and the Project Officer, ITDA, Srisailam have accepted the proposal and gave order to the plaintiff towards the supply of items and the first defendant issued the proceedings towards supply of material with regard to the quotation given by the plaintiff. It is not in dispute by both the parties that there was an agreement in between the plaintiff and defendants for supply of material as required by the defendants to the defendants from time to time by the plaintiff. It is not in dispute by both sides that the plaintiff supplied the material to the first defendant i.e., electric tube light, steel almyrahs, Philip charging lights, solar lights etc., for using the same in Ashram, schools and hostels maintaining under its control and the defendant No.1 call for the quotation and the plaintiff submitted a quotation for lower rates and the same was accepted by the first defendant. After accepting the quotations, the first defendant also issued a proceedings to that extent.
14. In order to prove the case of the plaintiff, the plaintiff relied on the evidence of PW1 and Ex.A1 to Ex.A53. The evidence of PW1 goes to show that the defendant No.1 called for the tenders in news paper for supply of material which is required in Ashram, schools and hostels maintaining under the control of first defendant. Since the plaintiff submitted a quotation for lower rates, the quotation of the plaintiff is accepted by the first defendant and the proceedings were also issued to that effect. Ex.A1 to Ex.A53 supports the case of the plaintiff. The fact remains the plaintiff supplied the material in pursuance of the order given by the first defendant and the said material is received by the first defendant. Having received the same, the defendants kept quite without making any payment of value of the material supplied by the plaintiff. It is not the case of the defendants that the defendants returned the material to the plaintiff. The case of the defendants is that the then Project Officer working in Project Office entered into the transactions collusively, brought the documents in to existence and insisted the plaintiff to supply the material. In order to prove the said alleged collusiveness no evidence is adduced by the defendants. Furthermore, the first defendant being the Project Officer have duly given a quotation for supply of the material. It is not in dispute that the Project Officer has issued instructions to the plaintiff towards supply of material, as per the request of the defendants, the plaintiff supplied the material in accordance with the terms and conditions entered into the agreement in between the plaintiff and first defendant. If really there is any violation in terms of the agreement, the first defendant ought to have return the said material and he ought to have cancel the contract in between the plaintiff and first defendant, but the defendant failed to do so. It is also not in dispute by the defendants that the defendants made some part payment to discharge the suit claim. Though the defendants relied on Ex.B43 alleged payments, the Project Officer, ITDA, Srisailam, DW1 admits in cross examination that Ex.B43 contains that a sum of Rs.3,29,800/- was paid to PW1 and another payment for Rs.3,57,000/- total amount under Ex.B43 arises to a sum of Rs.6,86,800/- and the said amount is paid under Ex.B43, it pertains to the payment made to the PW1 for the previous transactions. The above admissions of DW1 clearly goes to show that the payment under Ex.B43 relates to the previous transactions.
15. It is not in dispute that the defendants invited tenders from the general public by issuing the paper publication. It is also not in dispute that the plaintiff submitted quotation for lowest rates and the defendants accepted the same and proceedings were also issued to that extent. It is also not in dispute that the plaintiff supplied material as requested by the defendants as per the work order given by the defendants. The contract is entered in between the plaintiff and defendants, the said contract is bind on both the plaintiff and defendants. The plaintiff supplied the material to the first defendant for the cost mentioned in the said quotation and the same is accepted by the first defendant and the plaintiff accepted to send the material and supplied the material to the first defendant in accordance with the requirement as requested by the defendants and the defendants also accepted the rates as quoted by the plaintiff in the quotation and the first defendant issued proceedings to that effect and having received the said material the defendants kept quite and the defendants have not taken any steps to prove that the material supplied by the plaintiff is substandard and so also not in accordance with the terms and conditions in the agreement. If the defendants really found any defects in the material supplied by the plaintiff, the same has to be returned and the contract has to be cancelled. It is not the case of the appellants that the said contract in between the plaintiff and defendants is stands cancelled. The fact remains that the material supplied by the plaintiff is lying with the defendants. The defendants did not return the said material to the plaintiff on the pretext that the said material is substandard and not in accordance with the terms of the agreement in between the plaintiff and defendants. It was simply pleaded by the first defendant in the written statement that the material supplied by the plaintiff is substandard and the plaintiff quoted higher rates in collusion with the then Project Officer, ITDA. In order to prove the said bald allegations, the defendants did not adduce any evidence and the defendants relied on Ex.B43. As stated supra, the ITDA Project officer i.e., DW1 admits in his evidence in cross examination itself that the payment shown under Ex.B43 is pertains to the payment made to PW1 for the previous transactions. The fact remains that the defendants have not returned the material received from the plaintiff. Further more, the plaintiff issued a legal notice for payment of amount. DW1 admits that the proceedings under Ex.A1, Ex.A2, Ex.A10 to Ex.A13, Ex.A15 to Ex.A22, Ex.A24 to Ex.A27 reflects the material supplied by the plaintiff and the said proceedings were issued by the then Project Officer, ITDA towards the supply of material required. DW1 further admits that no document is available in the office of ITDA at present to show that the then Project Officer, ITDA have informed to PW1 that the value of the material mentioned in the quotation given by PW1 is too high than the market value prevailing for the said material during the said period in the market. On appreciation of the entire evidence on record the trial Court rightly came to conclusion that the plaintiff supplied the material to the first defendant as requested by the first defendant. But the first defendant failed to make any payment to the plaintiff. The fact remains that the then Project Officer, ITDA has duly accepted the quotation submitted by the plaintiff. It was simply pleaded by the defendants in the written statement that the then Project Officer has duly accepted the quotation for higher market value and material supplied by plaintiff is substandard, in such a case, the defendants have to return the said material to the plaintiff, but till today the defendants failed to do so. If the market value mentioned in the quotation is too high, the defendants have to raise their objection before the plaintiff, absolutely there is no evidence on record to show that the material supplied by the plaintiff is a substandard and the plaintiff quoted the quotation for higher rates. The plaintiff to discharge his burden relied on the evidence of PW1 and Ex.A1 to Ex.A53. As stated supra, the evidence of PW1 and Ex.A1 to Ex.A53 supports the case of the plaintiff. Furthermore, it is the bald allegation of the defendants in the written statement that the material supplied by the plaintiff is a substandard and the plaintiff quoted high rates in the rates prevailing in the market. In order to prove the same, no evidence is produced by the defendants. As stated supra, even though the defendants relied on the evidence of DW1, the evidence of DW1 is no way helpful to prove the defense of the defendants in the written statement. DW2, another officer of the defendants, admits in her cross examination that the material was supplied in the year 2002 and the material was inspected during the year 2005. The above admission clearly reveals that the material was supplied by the plaintiff in the year 2002 and the same is lying with the first defendant till the year 2005 and the defendants retained the material after receiving the material from the plaintiff for years together and did not pay the amount and also did not return the said material on the pretext that the said material supplied by the plaintiff is a substandard.
16. The learned Government Pleader for appeals would contend that the plaintiff claimed rate of interest at 24% p.a. from 21.08.2002 onwards till the date of filing of the suit on the principal amount of Rs.10,31,200/- and the said rate of interest is too high. The fact remains that there is no contract in between the plaintiff and defendants with regard to the rate of interest. The learned counsel for appellants fairly admits that infact there is no contract in between the plaintiff and defendants with regard to rate of interest of 24% p.a. It is settled law that the use of word may “in Section 34 of Civil Procedure Code confers a discretion of the Court to award or not to award interest or to award interest at such rate as it deems fit”.
17. In a decision reported in D.D.A. vs. Joginer S.Monga and others (2004) 2 SCC 297, the Apex Court has reduced the post-lite interest from 18% to 9% p.a. In ascertaining the rate of interest, the Courts of Law can take judicial notice of both inflation and also fall in bank lending rate of interest. The steep fall in the bank lending interest can be considered grounds for reducing the post lite interest from 24% p.a., this Court views that if the interest rate is unconscionable and usurious, the appellate Court has power to reduce the interest rate from what was granted by the trail Court. By following the case law cited above, this Court is inclined to reduce the interest awarded by the trial Court from 21.08.2002, i.e., the date on which plaintiff delivered the goods to the first defendant, till the date of filing of the suit i.e., from 24% p.a. to 12% p.a.
18. Considering the facts and circumstances and also in the light of the settled legal position, this Court views that the trial Court is not justified in granting interest at 24% p.a. from the date of delivery of goods i.e., 21.08.2002 to till the date of filing of the suit and in the facts of the case, it is just and reasonable to grant 12% interest p.a. from 21.08.2002 to till the date of filing of the suit and the plaintiff also entitled interest @12% p.a. on Rs.10,31,200/- from the date of filing of the suit till the date of decree and thereafter at 6% p.a. till the date of realization.
19. Considering the facts and circumstances, this Court views that the plaintiff is not entitled the rate of interest at 24% p.a. from 21.08.2002 to till the date of filing of the suit, however, the plaintiff is entitled interest at 12% p.a. from 21.08.2002 to till the date of filing of the suit, the other findings arrived by the trial Court on appreciation of the evidence in this case is therefore correct and does not call for interference, except the rate of interest as indicated above. Accordingly, the points are answered.
20. In the result, the appeal is allowed in part by modifying the rate of interest from 24% p.a. to 12% p.a. on the principal amount of Rs.10,31,200/- from 21.08.2002 to till the date of filing of the suit and the plaintiff is also entitled interest @12% p.a. on Rs.10,31,200/- from the date of filing of the suit till the date of decree and thereafter at 6% p.a. till the date of realization. No order as to costs.
As a sequel, miscellaneous petitions, if any, pending in the Appeal shall stand closed.
