Bangalore District Court
Bangalore Metropolitan Transport vs M/S Accord Advertising Pvt. Ltd on 12 February, 2015
Form No.9
(Civil) Title
Sheet for
Judgment
in Suits PRESENT: SRI SUDHEER H.KORADDI,
R.P. 91
B.Sc.,LL.B.,[Spl]
XXVII Additional City Civil Judge.
Dated this the 18th day of July 2013
PLAINTIFFS: 1. Bangalore Metropolitan Transport
Corporation, (BMTC), Central Offices,
K.H.Road, Shanthinagar,
Bangalore-560 027
By its Managing Director.
2. Chief Traffic Manager (Commercial)
BMTC Central Offices,
II Floor, Commercial Department,
K.H.Road, Shanthinagar,
Bangalore-560 027.
[By Sri R.V.Jayaprakash, Advocate]
/v e r s u s/
DEFENDANT: M/s Accord Advertising Pvt. Ltd.,
F-1, 8/3 Sai Villa,
Wood Street, Ashok Nagar,
Bangalore-560 005
Represented by its
Managing Director.
2
O.S.
No.5344/2011 .
[By Sri PS, Advocate]
Date of institution of the : 25/7/2011
suit
Nature of the suit : For recovery of money
Date of commencement : 6/12/2012
of recording of the
evidence
Date on which the :
Judgment was 18/7/2013
pronounced.
: Y e a r / Month/s Day/
Total duration s s
1 11 24
(S.H. Koraddi)
XXVII ACCJ: B'LORE.
This is a suit filed by the plaintiffs against
defendant for recovery of Rs.2,24,275/- with interest
@ 10% per annum from the date of suit till the
realisation.
2. In the plaint it is contended that, plaintiff
no.1 BMTC, Bangalore is established under Road
Transport Corporation Act, 1950 and operating in
3
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No.5344/2011 .
Bangalore City, and plaintiff no.2 Chief Traffic
Manager (Commercial), BMTC is serving under
plaintiff no.1 and with a view to grant license to erect
hoardings at Subhashnagar Depot, Bangalore, plaintiff
invited tenders on 1/6/2005 under Tender
Notification 3/2005-06. Defendant M/s Accord
Advertising Pvt. Ltd., was successful tenderer in
respect of the erection of hoardings at Subhashnagar
Depot, Bangalore, and in pursuant of it, defendant
was selected as the successful tenderer. An
agreement for grant of license for erection of
hoardings was also entered into on 29/7/2005
between the plaintiffs and defendant. Thereafter,
defendant permitted to put up 8 hoardings of 24 feet
x 12 feet, and further defendant had agreed to pay a
license fee of Rs.1,12,552/- per month and the said
monthly license fees was subject to escalation by 10%
over the existing license fees every year from the
4
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No.5344/2011 .
second year upto the end of the contract. In terms of
the conditions of the tender, the defendant has also
paid a sum of Rs.6,75,312/- as security deposit in
the form of demand draft bearing No. 323319 on
10/06/2005 drawn on UCO Bank. Further, defendant
also agreed to pay half yearly license fee in advance
for the privilege of using the space to erect hoardings
at Kempegowda Bus Stand. Plaintiffs after granting
license to the defendant, authorised defendant to use
the space subject to the conditions mentioned in the
agreement for a period of three years commencing
from 1/8/2005. Further, the parties were agreed that
security deposit will not carry any interest and the
same would be refunded after the expiry of the
agreement after adjusting dues, if any. So also, it was
agreed by the parties that the defendant shall pay half
yearly license fees in advance and advertisement tax
payable to BMP/City Municipal Council shall be paid
5
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No.5344/2011 .
by BMTC. However, the defendant had to pay other
taxes, duties, levies and penalties to Central
Government /State Government / Local Body
authorities. It was also agreed that defendant shall
leave the hoardings structures after expiry of license
period in "as is where is" basis without any
advertisement or damage of material, and it shall not
remove the hoardings without prior permission of the
plaintiffs. The license granted to the defendant is
expired on 31/7/2008 and during the period of
license on several occasions defendant made delayed
payments of the license fees in contravention of
Clause 3 of the agreement. Plaintiffs have adjusted
the security deposit towards arrears of service tax and
other dues. On account of delayed payment of license
fees, the defendant is liable to pay the interest at 10%
per annum under the Interest Act, 1978, and
plaintiffs are entitled to claim interest on delayed
6
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No.5344/2011 .
payment of license fee. The defendant is liable to pay
a sum of Rs.1,74,216/- towards interest at 10% per
annum on delayed payment of license fee upto
31/7/2008. In addition to that, defendant is also
liable to pay interest at the rate of 10% per annum
on the said sum from 1/8/2008 till date of filing the
suit i.e., Rs.50,069/-. As plaintiffs have issued notice
on several occasions to the defendant calling upon to
pay the arrears and final notice was issued on
15/3/2010 calling upon to pay total due of
Rs.21,32,377/- by adjusting security deposit towards
arrears of service tax. Notice is served upon the
defendant. Plaintiffs have restricted their claim only to
the tune of Rs.2,24,275/- reserving liberty to claim
balance arrears, and having accrued with the cause of
action, plaintiffs were constrained to file the suit, and
prayed to decree the suit.
7
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No.5344/2011 .
3. After registration of the suit, suit summons
was issued to the defendant and defendant has put
appearance through the Advocate and filed written
statement as well as counter claim denying the
averments of the plaint as false and contended that,
in pursuance of the agreement dated 29/7/2005,
defendant has deposited a sum of Rs.6,75,312/- as
security deposit through Demand Draft. Clause No.1
of the agreement clearly states that security deposit
shall be refunded after expiry of the agreement by
adjusting the dues if any. Said agreement came to an
end on 31/7/2008, and defendant successfully
handled the assignment during the term of agreement
and made all payments to the plaintiffs as per the
agreement. At termination of the agreement, plaintiffs
were liable to refund security deposit. However,
plaintiffs failed to adhere to the terms of the
agreement and it is in complete violation of the terms
8
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No.5344/2011 .
of the agreement and thereby plaintiffs have withheld
security deposit with malafide intention. The
defendant has issued request letters on 14/11/2008;
29/11/2008; 7/1/2009; 13/1/2009 but in vain.
Therefore, defendant was constrained to issue a legal
notice on 9/3/2009 for refund of security deposit.
But, even then plaintiffs have not refunded security
deposit. The defendant has also sent break up of
accounts of Subhash Nagar Hoardings to the plaintiff
and requested for return of entire security deposit
amount through letter dated 1/4/2009, but in vain.
Defendant has regularly paid license fee and there are
no arrears as such payable to the plaintiffs. Plaintiffs
have claimed interest on delayed payments without
basis and they have no right to claim the same under
the contract between the parties. Clause No.3 of the
agreement reads thus:
9
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No.5344/2011 .
"The licensee shall pay half-yearly
license fee in advance. If the payment is
not made, then the BMTC shall have the
right to remove the hoardings and adjust
the dues from the security deposit and
terminate the contract."
4. Hence, plaintiff could exercise right to
terminate the contract by refunding security deposit
after deducting the dues, if any. But, they have not
done so and filed false suit. No opportunity was given
to the defendant before forfeiting entire security
deposit amount by the plaintiffs and it is against the
principles of natural justice, and the suit is barred by
time.
5. Further, by way of counter claim, defendant
contended that, it is reputed and well established
company in the country, and defendant was permitted
to put up 8 hoardings of the size 24 feet x 12 feet in
Subhash Nagar Depot and it was asked to pay license
10
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No.5344/2011 .
fee of Rs.1,12,552/- per month and said monthly fee
was subject to escalation by 10% over existing license
every year. As per Clause 2 of the agreement, license
was issued for 3 years, and defendant deposited
Rs.6,75,312/- as security deposit through Demand
Draft. Defendant has paid license fee for entire term,
and plaintiffs have not remitted security deposit after
completion of the period and committed breach of
Clause No.1 of the agreement. The said amount was
deposited on 10/6/2005 through D.D.No. 323319 of
UCO Bank. Further, under clause no.1, it has been
enunciated that the security deposit will be refunded
after expiry of the agreement. So also, after expiry of
the said agreement, defendant ran from Pillar to post
to get security deposit refunded. However, plaintiffs
paid no heed to the requests and pleadings of the
defendant. The officials of defendant company made
several visits to the plaintiff /corporation but in vain
11
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No.5344/2011 .
and issued letters on 14/11/2008; 1/4/2009; and
legal notice on 9/3/2009 for refund of the security
deposit, but in vain. Further, plaintiff/corporation
refused to part with the security deposit even after
expiry of the term of agreement and wrongfully
withheld the amounts. Plaintiff being a Government
statutory Body cannot act in such manner and by way
of counter claim, defendant is seeking refund of
legitimate deposits from the plaintiff /corporation, and
accrued with the cause of action sought counter claim
and court fee of Rs. 59,868/- is paid thereon under
Karnataka Court Fees and Suits Valuation Act.
Therefore, it is prayed to decree the counter claim for
Rs.6,75,312/- with interest at 12% per annum i.e.,
Rs.2,89,629/- and future interest with costs. Thus,
suit of the plaintiff/corporation be dismissed with
exemplary costs.
12
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No.5344/2011 .
6. The plaintiff/corporation has filed the
written statement to the counter claim denying the
contents of the written statement, and contended
that, the defendant be put to strict proof of payment
of license fees, and clause no.1 of the agreement says
for refund of the security deposit after expiry of the
term of agreement, but it is only after adjusting the
dues, if any. The defendant has deposited sum of
Rs.6,75,312/- as interest free security deposit, and
there was an outstanding amount of Rs.4,96,387/-
from the defendant to the plaintiff /corporation
consisting of Rs.1,47,956/- towards service tax and
Rs. 3,48,431/- interest charged on delayed payments.
Further, defendant is informed through letter dated
30/7/2008 for removing the hoardings when the
license came to an end. But, defendant has continued
unauthorisedly the hoardings even after expiry of the
period, and defendant was to pay a sum of
13
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No.5344/2011 .
Rs.2,00,605/- towards license fee. The defendant had
used extra space of 696 sq. feet area apart from
permitted area and defendant had to pay
Rs.14,51,674/- to the plaintiffs in that regard. So also,
under GSO 2/2004, defendant was liable to pay
interest at the rate of 20% per annum for delayed
period and defendant was due to the tune of
Rs.21,32,377/- towards the interest payable to the
plaintiffs. Therefore, final notice was issued on
15/3/2010 to the defendant to remit the said amount
and it was intimated to the defendant that the
security deposit would be forfeited towards arrears
and action will be taken for recovery of balance
amount. In the meanwhile, plaintiffs have filed the
suit only for recovery of interest on delayed payments
of license fees, with further claim of interest on the
amount due from the date of expiry of license till the
date of filing of the suit by restricting their claim to
14
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No.5344/2011 .
the said extent and reserving liberty to claim the
balance arrears, if any, in due course. In the present
suit, the plaintiffs have claimed for grant of a decree
for a sum of Rs.2,24,275/- with interest at 10% per
annum from the date of suit till the date of realisation
and the interest at 10% is claimed on the basis of
GSO and as per the provisions of Interest Act 1978.
The security deposit amount paid by the defendant at
the time of entering into agreement has been
adjusted towards the part of the arrears due from the
defendant and question of refunding the security
deposit to the defendant will not arise. Further,
counter claim made by the defendant is barred by
time and it is not sustainable in law, and security
deposit amount has become due on the expiry of
license fee on 31/7/2008 as per the terms of the
agreement and the suit for recovery of dues ought to
have been filed within three years from 31/7/2008
15
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No.5344/2011 .
and a counter claim made on 14/2/2012 is barred by
time and it is liable to be dismissed. Hence, for these
reasons, it is prayed to dismiss the counter claim with
costs.
7. From the above pleadings of both the parties,
the following issues have been framed by my
predecessor in office:
(1) Whether the plaintiff proves that
defendant advertising private limited
have committed breach of agreement
and thereby he is liable to pay the
suit claim of Rs.2,24,275/- together
with interest at the rate of 10% per
annum from the date of suit till
realisation?
(2) Whether the defendant proves that it
successfully handled the assignment
during the term of the agreement
and hence upon the termination of
the agreement dated 31/7/2008,
plaintiff is liable to refund the
16
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No.5344/2011 .
security deposit of Rs.6,75,312/-
and has wantonly withheld the same
as alleged in the counter claim?
(3) Whether plaintiff is entitled for the
suit claim as prayed?
(4) Whether defendant is entitled for the
counter claim as prayed?
(5) What decree or order?
8. The Assistant Traffic Manager of the
plaintiff/corporation is examined as PW.1 and the
documents at Ex.P1 to Ex.P4 have been marked. The
authorised representative of defendant company is
examined as DW.1 and the documents at Ex.D1 to
Ex.D8 have been marked.
9. I have heard the arguments and perused the
written arguments of defendant and citation reported
by the Advocate for the defendant.
10. My findings on the above issues are as under:
17
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No.5344/2011 .
Issue No. 1) ............ In the affirmative;
Issue No. 2) ............ In the negative;
Issue No. 3) ............ In the affirmative;
Issue No. 4) ............ In the negative;
Issue No. 5) ............ As per final order for the
following:
11. ISSUES NO.1 TO 4 : These issues are taken
together since they are interconnected with each
other, and to avoid repetition of discussion.
12. It is the case of the plaintiff that, on 1/6/2005,
tenders were invited under Notification No.3/2005-06 for
erecting hoardings in Subhashnagar Depot, Bangalore
and defendant company being successful tenderer
entered into agreement on 29/7/2005 for putting 8
hoardings of 24 feet x 12 feet dimensions on paying
license fee of Rs.1,12,552/- per month subject to
escalation by 10% from the second year till the end of the
contract, and it was a period of 3 years and defendant
18
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No.5344/2011 .
company also deposited security deposit through DD on
10/6/2005 for Rs.6,75, 312/-.
13. Further, it is the case of the plaintiff that, said
security deposit was without interest and defendant also
agreed to bear half yearly license fee in advance for the
privilege of using the space to erect hoardings at
Kempegowda Bus Stand. Further, the plaintiffs
authorised the defendant to use the excess space subject
to conditions and period was commencing from
1/8/2005. So also, the security deposit was refundable
by adjusting dues if any, after termination of the contract
and defendant company had to pay half yearly license fee
in advance, and thereafter the defendant company had to
leave hoardings after expiry of period as it is without
damaging the material.
14. Further it is the case of the plaintiffs that, license is
expired on 31/7/2008, but the defendant has made
delayed payments of license fees in contravention of
19
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No.5344/2011 .
Clause No.3 of the agreement. However, plaintiffs have
adjusted the security deposit towards arrears of service
tax and other dues, and defendant company is also liable
to pay the interest at the rate of 10% per annum under
the provisions of Interest Act, 1978, and plaintiffs are
entitled to claim interest on delayed payment of license
fee. Thus, the defendant company is liable to pay
Rs.1,74,216/- towards the interest upto 31/7/2008, in
addition to the interest at 10% per annum from
1/8/2008 till the date of suit i.e., Rs.50,069/-. But,
defendant company has not paid the said amount inspite
of request and demands and issuance of final notice on
15/3/2010 and defendant company is liable to pay dues
to the tune of Rs. 21,32,377/- after adjusting security
deposit amount of service tax. However, the plaintiffs
have restricted their claim to the tune of Rs.2,24,275/-
after adjusting security deposit amount of service tax.
However, the plaintiffs have restricted their claim to the
20
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No.5344/2011 .
tune of Rs.2,24,275/- only reserving their liberty to claim
balance arrears.
15. On the other hand, defendant by denying these
aspects has contended that, it has deposited security
deposit of Rs.6,75,312/- through Demand Draft and
under Clause No.1 of the agreement, the security
deposit requires to be refunded after expiry of the
agreement by adjusting dues if any, and it has not
committed default in payments, and it has paid
amount as per the agreement and agreement came to
an end on 31/7/2008 and plaintiffs are liable to
refund the security deposit, but withheld the said
deposit with malafide intention inspite of issuance of
letters on 14/11/2008; 29/11/2008; 7/1/2009;
13/1/2009, and issuance of legal notice on
9/3/2009. The defendant company has sent break up
of accounts to the plaintiffs and requested to refund
the security deposit through letter dated 1/4/2009
21
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No.5344/2011 .
but in vain, and plaintiffs have illegally claimed the
interest on delayed payments. Clause No.3 of the
agreement reads thus:
"The licensee shall pay half-yearly
license fee in advance. If the payment is
not made, then the BMTC shall have the
right to remove the hoardings and adjust
the dues from the security deposit and
terminate the contract."
16. Further, plaintiffs instead of exercising right to
terminate the contract by refunding the security
deposit after deducting dues have filed false suit to
harass the defendant and claim is barred by time.
However, defendant company is entitled for security
deposit of Rs.6,75,312/- with interest at 12% per
annum i.e., Rs.2,89,629/- by way of counter claim
and plaintiffs being statutory bodies of the
Government cannot withheld the security deposit,
22
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No.5344/2011 .
and prayed to dismiss the suit by allowing the counter
claim.
17. Further, plaintiffs have contended that, the
security deposit cannot be sought by the defendant
company with interest since it has to be adjusted
towards dues after expiry of the term of the
agreement, and there was outstanding dues of
Rs.4,96,387/- consisting of service tax of
Rs.1,47,956/- and interest on delayed payments of
Rs.3,48,431/- and it is intimated to the defendant
company through letter dated 30/7/2008, but
defendant company unauthorisedly continued the
hoardings and it is liable to pay sum of Rs.2,00,605/-
towards license fee. The defendant company has used
extra space of 696 sq. feet apart from permitted area
and it had to pay Rs.14,51,674/- with interest of 20%
per annum on delayed payments under GSO 2/2004
and thus defendant is liable to pay dues to the tune of
23
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No.5344/2011 .
Rs.21,32,377/- and a notice in that regard is issued
to the defendant company on 15/3/2010 and the
security deposit has been forfeited towards arrears,
and question of refunding deposit will not arise, and
the counter claim made on 14/2/2012 after lapse of 3
years from 31/7/2008 is barred by time.
18. The Assistant Traffic Manager PW.1 Bailappa
Biradar of plaintiff corporation in his evidence has
deposed as per the averments of the plaint and
written statement filed to the counter claim and he
has produced Ex.P1 computerised statement of
particulars of delayed payment; Ex.P2 agreement
dated 29/7/2005; Ex.P3 final notice dated
15/3/2010; Ex.P4 postal acknowledgment. Further,
in his cross-examination, he has stated that he was
not present at the time of execution of agreement and
they have to maintain particulars of license in their
office and he knows the terms and conditions of
24
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No.5344/2011 .
agreement and admitted the deposit of security
amount by the defendant company which was
refundable after termination of license, and that they
have not refunded the deposit as there were dues and
arrears more than the security amount and they have
not sent final settlement bill before adjusting the
security deposit and they have not demanded interest
on arrears during the term of agreement.
19. On the other hand, the authorised
representative of defendant company DW.1 Alok
Bharadwaj has stated as per the contents of the
written statement, and he has produced Ex.D1 Board
resolution; Ex.D2, Ex.D3, Ex.D4, Ex.D5 letters issued
to the plaintiffs; Ex.D6 letter issued by the plaintiffs;
Ex.D7 legal notice; Ex.D8 letter issued to the
plaintiffs. However in his cross-examination, he has
admitted that he was not present at the time of
agreement and he knows the terms and conditions of
25
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No.5344/2011 .
agreement and license fee was to be deposited one
day in advance, but it is deposited on 3/8/2005
instead of 1/8/2005. Further, he has stated there is
delay payments of sl.no.1 to 6 shown in Ex.P1 and it
shows delay of 186 + 140 + 238 = 749 days of delay.
So also, he has stated there is clause in the
agreement for adjustment of security deposit.
20. The learned Advocate for the plaintiff by relying
upon the above said oral and documentary evidence
argued that, the plaintiffs have accepted delayed
payments to help the defendant company and
defendant company is liable to pay the interest on
delayed payments, and that counter claim of
defendant is not sustainable in law since the security
deposit has been adjusted towards arrears and
prayed to dismiss the counter claim as time barred
also.
26
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No.5344/2011 .
21. On the other hand, learned Advocate for the
defendant company by relying upon the above said
oral and documentary evidence submitted that
defendant company has not committed any default in
payments and paid amounts regularly as per the
agreement and plaintiffs themselves have to refund
the security deposit, but failed to refund the same
inspite of requests and demands and issuance of legal
notice. Thus, he has prayed for dismissal of the suit
by allowing the counter claim.
22. The copy of the agreement at Ex.P2 shows that
defendant company had agreed to pay half yearly
license fee in advance and plaintiffs had right to
remove the hoardings and adjust dues from the
security deposit by terminating the contract under
Clause No.3. Further, a security deposit of
Rs.6,75,312/- was agreed to be deposited and it is
interest free deposit and agreement was for 3 years
27
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No.5344/2011 .
commencing from 1/8/2005 as per Clause No.1 of
the agreement. The statement of particulars at Ex.P1
shows security deposit of Rs.6,75,312/- is forfeited
towards service tax of Rs.1,47,956/- and other
arrears, and there was interest of Rs.50,069/-
charged at the rate of 10% per annum on arrears of
Rs.1,74,216/- from 1/8/2008 to 30/6/2011. The
final notice at Ex.P3 shows that plaintiffs have called
for the defendant as per Clause No.9 of the
agreement to pay the dues of Rs.21,32,377/- by
charging interest at the rate of 20% per annum on
delayed payments. Postal acknowledgement at Ex.P4
shows service of said notice on the defendant
company.
23. The copy of the resolution at Ex.D1 shows that
authorised representative Alok Bharadwaj was
authorised to do the needful in this case. Letters at
Ex.D2 to Ex.D5 shows that defendant company has
28
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No.5344/2011 .
requested the plaintiffs for refund of security deposit
after completion of the license period on 31/7/2008.
Further, letter at Ex.D6 shows that plaintiffs have
intimated defendant company about the remittance of
dues and sought interest at the rate of 20% per
annum on delayed payments. The legal notice at
Ex.D7 shows that defendant company has called upon
the plaintiffs to pay the security deposit amount along
with interest at 18% per annum from 31/7/2008.
Ex.D8 shows break up account furnished by the
defendant company after service of the legal notice.
24. The learned Advocate for defendant by relying
upon the provisions of Section 3 of Interest Act, 1978
submitted that, it is the discretion of the court to
award interest and plaintiffs have no right to claim
interest by taking shelter under the said Act, and the
provisions of Section 3 (3) (ii) of the Act are not
applicable to debt, damages, and when the payment
29
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No.5344/2011 .
of interest is barred by virtue of agreement, the
plaintiffs cannot go behind the agreement by creating
rights, obligations [Ex contractus]. Further, by relying
upon the citations reported in AIR 1953 SC 443,
Gorakhram Saduram Vs. Lakshmibai submitted that,
the agreement at Ex.P2 is binding on both the parties
and by relying upon citation reported in AIR 1959 AP
352 State of Madras Vs. Jayalakshmi Rice Mills
submitted clause 3 of the agreement expressly
provides the remedy for the plaintiffs for delays in
payments and plaintiffs cannot go beyond the terms
of agreement by claiming interest etc., So also by
relying upon citation reported in 2008 Bombay Law
Report 3204 Friends Co-operative Housing Society
Vs. Nagpur Improvement Trust submitted that the
other things are excluded when there is express
mention of the similar things in the instrument as per
the maxim "expressio unis est exclusion altererius". I
30
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No.5344/2011 .
have gone through the said citations relied upon by
the advocate for the defendant.
25. The provisions of Section 3 of the Interest Act,
1978 reads thus:
"3. Power of court to allow interest.
(1) 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
thinks 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, that is to say, -
(a) If the proceedings relate to a
debt payable by virtue of
written instrument at a
31
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No.5344/2011 .
certain time, then, from the
date when the debt is
payable to the date of
institution of the
proceedings;
(b) If the proceedings do not
relate to any such debt,
then, from the date
mentioned in this regard in
a written notice given by the
person entitled or the
person making the claim to
the person liable that
interest will be claimed, to
the date of institution of the
proceedings:
Provided that where the
amount of the debt or
damages has been repaid
before the institution of the
proceedings interest shall
not be allowed under this
section for the period after
such repayment.
32
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No.5344/2011 .
(2) Where, in any such proceedings
as are mentioned sub section (1),
-
(a) Judgment, order or award is given for a sum which, apart from interest on damages, exceeds four thousand rupees, and
(b) The sum represents or includes damages in respect of personal injuries to the plaintiff or any other person, or in respect of a person's death, then, the power conferred by that subsection shall be exercised so as to include in that sum interest on those damages or on such part of them as the court considers appropriate for the whole or part of the period from the date mentioned in the notice to the date of institution of the 33 O.S. No.5344/2011 .
proceedings, unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages.
(3) Nothing in this section, -
(a) Shall apply in relation to -
(i) Any debt or damages
upon which interest is
payable as of right by
virtue of any
agreement; or
(ii) Any debt or damages
upon which payment of
interest is barred, by
virtue of all express
agreement;
(b) Shall affect -
(i) The compensation
recoverable for the
dishonour of a bill of
exchange, promissory
note or cheque, as
34
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No.5344/2011 .
defined in the
Negotiable Instruments
Act, 1881 (26 of 1881);
or
(ii) The provisions of rule 2 of Order 11 of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908);
(c) Shall empower the court to award interest upon interest."
26. The above said oral and documentary evidence shows that the defendant company after entering into contract on 29/7/2005 with the plaintiffs for erecting hoardings at Subhashnagar Depot, Bangalore deposited the security amount of Rs.6,75,312/- but paid the license fee with delays. However, the plaintiffs have accepted it and not terminated the contract till the date of expiry on 31/7/2008. Clause 3 of agreement at Ex.P2 shows that defendant 35 O.S. No.5344/2011 .
company had to pay half yearly license fee in advance and in case of non-payment, the plaintiffs had vested with right to remove the hoardings and adjust the dues from security deposit by terminating the contract. Further, under Clause 6 of the agreement, both the parties were required to issue three months notice in advance for terminating the contract in case of default. But, in the present case either of the parties have not invoked the said clauses. So also, in the final notice the plaintiffs have intimated about the unauthorised continuation of hoardings by the defendant company after the license period and using of extra space of 696 sq. feet for which the defendant company was liable to pay rentals of Rs.2,00,605/- along with Rs. 14,51,674/- of the extra space. The plaintiffs in their notice dated 2/6/2009 at Ex.D6 also intimated the defendant company in this regard and their liability to pay the interest on delayed payments.
36
O.S.
No.5344/2011 .
The calculation shown in Ex.P1 and break up account at Ex.D8 with respect to license fee, service taxes are not consistent and no reason is forthcoming as to why either of the party did not invoke Clause 6 of the agreement when there is breach of agreement. Under the circumstances, the hand in gloves on either side cannot be ruled out and the plaintiffs who have restricted the claim for Rs.2,24,275/- can very well recover the balance amount from the concerned officials of their Corporation.
27. In the present case also, there is delay of 749 days in payment of license fee by the defendant company as admitted by DW.1 Alok Bharadwaj, and admitted fact need not be proved. Further, the provisions of Section 3 (3) (ii) of Interest Act, 1978 are not applicable to debt or damages. But, the interest can be charged on delayed payments and express agreement at Ex.P2 is not coming in the way of 37 O.S. No.5344/2011 .
awarding interest. However, the interest of 20% mentioned in the notice by the plaintiff is rather on higher side and looking to the bank rate of interest, it is just and proper to award interest at the rate of 10% per annum on the claim amount. Under the circumstances, the issuance of letters at Ex.D2 to Ex.D5; break up account at Ex.D8 by the defendant company to the plaintiffs and issuance of legal notice at Ex.D7 is not of much assistance to the defendant company to establish its entitlement for the counter claim. The statement of particulars at Ex.P1 of the plaintiffs and break up account of defendant company at Ex.D8 are not consistent with respect of license fees, service taxes and charging of interest at the rate of 10% on delayed payments by the plaintiffs cannot be said to be illegal. Under the circumstances, the above said citations relied upon by the advocate for defendant company are not of much assistance and 38 O.S. No.5344/2011 .
the counter claim put forth by the defendant on 14/2/2012 after lapse of 3 years from 31/7/2008 is not sustainable and it is barred by time. The plaintiffs have sought interest of 10% per annum from the date of suit till realisation on the basis of GSO and under the provisions of Interest Act, 1978 and it can be recovered from the defendant company. Hence, I answer Issue No.1 in affirmative; Issue No.2 in negative; Issue No.3 in affirmative; and Issue No.4 in negative.
28. ISSUE NO.5: As a result of my foregoing discussion and the reasons stated thereon, suit of the plaintiff is fit to be decreed and defendant is not entitled for counter claim. Accordingly, I pass the following:
The suit filed by the plaintiff is decreed and counter claim sought by defendant company is rejected.
39
O.S.
No.5344/2011 .
Defendant company is liable to pay the claim amount of Rs.2,24,275/- with interest of 10% per annum from the date of suit till realisation within a month to the plaintiffs.
No order as to costs.
Draw decree accordingly.
*** [Dictated to the Judgment Writer, transcribed and computerised by her, Script corrected, signed and then pronounced by me, in the Open Court on this the 18th day of July 2013.) [S.H. KORADDI] XXVII Additional City Civil Judge.
BANGALORE.
1. List of witnesses examined on behalf of the Plaintiff/s:
PW.1 Billappa Biradar
2. List of witnesses examined on behalf of the Defendant/s:
DW.1 Alok Bharadwaj
3. List of documents marked on behalf of the Plaintiff/s:
Ex.P 1 Computerized particulars of delayed 40 O.S. No.5344/2011 .
payment Ex.P 2 Agreement between plaintiff and defendant dated 29/7/2005 Ex.P 3 Office copy of the final notice dated 15/3/2010 issued to defendant Ex.P 4 Postal acknowledgement
4. List of the documents marked for the defendants:
Ex.D 1 Board resolution authorizing DW.1 to give evidence Ex.D 2 Letter issued by the defendant to the Traffic Manager of the plaintiff Ex.D 3 Another letter dated 29.11.2008 addressed by the defendant to the plaintiff's Traffic Manager Ex.D 4 Letter dated 7.1.2009 addressed by the defendant to the plaintiffs' director Projects Ex.D 5 Another letter 13/1/2009 addressed to the same officer of the plaintiff Ex.D 6 Letter issued by the BMTC to the defendant dated 2/6/2009 Ex.D 7 Office copy of the legal notice dated 9.3.2009 Ex.D 8 Letter dated 1.4.2009 from defendant to the Chief Traffic Manager to the plaintiff.
[S.H. KORADDI] XXVII Additional City Civil Judge, BANGALORE.
41
O.S.
No.5344/2011 .
...Judgment pronounced in the Open Court....
(Vide separate detailed judgment) The suit filed by the plaintiff is decreed and counter claim sought by defendant company is rejected.
Defendant company is liable to pay the claim amount of Rs.2,24,275/- with interest of 10% per annum from the date of suit till realisation within a month to the plaintiffs.
No order as to costs.
Draw decree accordingly.
[S.H.KORADDI] XXVII Additional City Civil Judge.
BANGALORE.
2
O.S. 1487/2006