Karnataka High Court
Sikka-N-Sikka Engineers Private Ltd. vs Cargo Transports on 22 January, 1992
Equivalent citations: ILR1992KAR1421, 1992(2)KARLJ196
JUDGMENT K.A. Swami, J.
1. This Appeal by the defendant is preferred against the judgment and decree dated 26-2-1990 passed by the XIX Additional City Civil Judge, Bangalore, in O.S. No. 783/85, The respondent is the plaintiff.
2. The respondent filed the aforesaid suit on 8-3-1985 for recovery of a sum of Rs. one lakh. It also prayed for an enquiry into the true and proper account of the defendant's liability including the balance due, the damages for breach of contract, interest for nonpayment of dues and for a sum in excess of Rs. one lakh to be decided by such enquiry.
3. The suit claim was made on the ground that there was a contract between the plaintiff and the defendant to transport 100 Penstock Pipes of the defendant from its factory to the project site of the Kerala State Electricity Board viz., Edamalayar; that according to the terms of the contract, it had transported 48 penstock pipes; it also had to bring back certain steel plates in the return trip; that as per the terms of the contract, it was to be paid a sum of Rs. 500/- as halting charges whenever the carrier was required to halt for more than 36 hours to unload the penstock pipes; that the plaintiff had also paid a sum of Rs. 25,000/- as earnest money deposit; that on 12-3-1982 the plaintiff demanded for payment of a sum of Rs, 79,866-40 being the amount due from the defendant; that the defendant by its reply dated 19-3-1982 denied the liability and set up payment of certain charges entirely out of the generosity. Thus the defendant refused to make the payment. In addition to this, the plaintiff also further claimed a sum of Rs. 19,133-51 as damages on the ground that the defendant failed to keep up the contract and failed to deliver the remaining 52 penstock pipes for transporting the same to Edamalayar; that for the purpose of performing IN contract, the plaintiff was required to obtain a particular type of trolley; that as the defendant failed to give delivery of remaining 52 penstock pipes, the trolley which was specially prepared could not be used for any other purpose; that the plaintiff was also deprived of the profit which it would have earned as a result of transporting Therefore, on this ground, the plaintiff claimed damages to the tune of Rs. 19,133-51. On the sum of Rs. 79,866-40, the plaintiff claimed interest by way of damages. However, it did not claim the interest at a particular rate. It only quantified the interest at Rs. 1000/- in respect of the amount due from the defendant subject to further determination by the court.
4. In the written statement filed by the defendant, the claim made by the plaintiff was denied. The specific case of the defendant was that nothing was due from the defendant to the plaintiff; that the plaintiff was not entitled to halting charges of Rs. 500/- per day; that the claim for transportation of 48 penstock pipes amounting to Rs. 79,866-40 claimed as due under the contract was totally false. The defendant also denied that any loss was caused to the plaintiff on account of the defendant not giving one pipe a week for transportation; that the damages assessed by the plaintiff was untenable and was unjust and therefore the same Was liable to be rejected; that the plaintiff was not entitled to any interest as there was no agreement for payment of interest on the outstanding amount; that the suit was barred by time as it was filed beyond 3 years from the time the alleged cause of action arose; that the contention that the cause of action arose on 13-3-1982 and 19-3-1982 was totally untenable; that the cause of action arose when the payment became due on the date the last service was rendered by the plaintiff under the contract; that as the last service under the contract in the form of last trip was made in 1981, and as the suit was filed beyond three years from that date, it was barred by time, and therefore, the suit was liable to be rejected.
5. On the basis of these pleadings, the trial Court framed the following issues:
1. Does plaintiff prove that the defendant has committed breach of contract by not making payment towards transport charge according to the agreement?
2. Does plaintiff prove that one of the essential terms of the agreement was to bring back certain quantity of steel plates for delivery to the defendant during the return of journey?
3. Does plaintiff prove that due to unexpected detention of carrier near weigh bridge was beyond the control of plaintiff?
4. Whether to supply the penstock pipe at the rate of one pipe per week was essential term of the contract?
5. Whether plaintiff has sustained damages for non-fulfillment of the terms of the contract as prayed for?
6. Whether plaintiff is entitled for interest?
7. Whether defendant is liable to account for to ascertain the damages?
8. Whether the suit of the plaintiff is barred by limitation?
9. Whether plaintiff is entitled for suit reliefs?
6. in support of its case, the plaintiff examined three witnesses as P.Ws. 1 to 3 and also produced 24 documents which were marked as Exs.P.1 to P.24. We may also mention here that Ex.P.1 contains 90 claim cards. They are not given separate exhibit numbers but each one is marked as Ex.P.1(1), P.1(2), P.1(3) etc, upto Ex.P.1(90). The defendant in support of its defence, examined 2 witnesses as D.Ws.1 and 2 and produced 9 documents which were marked as Exs.D.1 to D.3.
7. The trial Court, on appreciating the evidence answered issue Nos. 1 & 3 in the affirmative; issue No. 6 partly in the affirmative; issues 4, 5, 7 and 8 in the negative. On issue No. 2, it was held that it did not arise for consideration. Accordingly the trial Court decreed the suit for a sum of Rs. 79,866-40 with proportionate costs and interest thereon at 18% per annum from the date of suit till the date of payment.
8. In the light of the contentions urged on both sides, the following points arise for consideration:
1. Whether the plaintiff has proved that it is entitled to a decree for a sum of Rs. 79,866-40?
2. Whether the interest awarded by the trial court at 18% per annum is unsustainable in law and on facts?
3. Whether the trial court is justified in law and oh facts in holding that the suit is in time?
4. Whether it is open to the plaintiff to contend without preferring cross-objections or a separate appeal that the trial court is not justified in law in denying the relief of damages claimed for a sum of Rs. 19,133-51?POINT NO. 1
9. It is not in dispute that the plaintiff and the defendant entered into an agreement under which the plaintiff agreed to transport 100 penstock pipes from the factory of the defendant at Bangalore to the place known as Idamalayar in Kerala as per Ex.P.7 dated 25-1-1980 and Ex.P.8 dated 19-7-1980 and on its return trip to transport the steel plates as per Annexure-1 to the agreement. It is also not in dispute that pursuant to Exs.P.7 and P.8, the plaintiff transported 48 penstock pipes and also brought the steel plates in the re-turn trip as per the terms of the contract evidenced by Exs.P.7 and P.8, The last trip made by the plaintiff was on 17-8-1981 as per Ex.P.2 which is the extract prepared by the Kerala State Electricity Board from Ex.P.1 to Ex.P.1(90) which are also produced by P.W.1. The relevant terms of the contract as contained in Ex.P.7 and Ex.P.8 are as follows:
EXHIBIT NO. 7Clause - 1: You have agreed to make available the trailer/trailers exclusively required for the company's requirements of transporting the above products and make the trailer/trailers available for use of the Company within 10th of February 1980. You have agreed to go ahead with the procurement of the trailer specially required for the purpose immediately. In case you fail to place the trailer at our factory for the first trip on or before 10th February 1980 you will be responsible for the loss incurred because of this delay.
Clause-2: You have agreed to transport the Steel pipes along with steel liners as per Annexure-II to this agreement from our factory premises at Bommasandra to K.S.E.B. Idamalyar site, at the rate of Rs. 5,000/- (Rupees five thousand only) per trip inclusive of all expenses for a maximum weight of 15 tonnes. We are at liberty to bad any of our products to the above destination upto a maximum weight of 15 tonnes.
Clause-3: You have agreed to transport the steel plates as per Annexure-1 to this agreement from K.S.E.B. Wellington Island, Cochin to our factory at Bommasandra at the rate of Rs. 200/- per tonne inclusive of all expenses.
Clause-8: You have agreed to take complete responsibility in case the vehicle is detained by any of the authorities during transportation for any reason whatsoever and to take complete responsibility for any delays due to your negligence, incompetence or fault and you have agreed to bear all the financial losses incurred for the period of delay.
Clause-13: You have agreed that you will positively lift one 4.2 diameter pipe and 1 No. of 2.9 dia pipes every week white we have assured you that the above pipes will be delivered to you positively from our works every week. You will make good any shortage/damage/loss reported by the receiving authorities either at Bommasandra, Bangalore or at K.S.E.B. Cochin.
Clause-16: We have agreed to effect payment on the 45th day after the receipt of the bills from your end along with the respective documents, confirming the delivery of the above items at Bommasandra, Bangalore and Cochin.
EXHIBIT P.8 Clause-1: The halting of 36 hours mentioned by Mr. Subramaniam, from the time of reaching Angarnaly with the pipes and leaving Cochin with the plates, were discussed in detail with Mr. T.G. Gopala Krishna of Kerala State Electricity Board. It was found that it was practically Impossible to improve the timings less than 36 hours and as such we will not be paying halting charges for these 36 hours. In case the vehicle is forced to hald at Angamaly or idamalayar or Cochin because of the fault of the K.S.E.B. authorities, then we have agreed to pay Rs. 500/-(Rupees five hundred only) per day as retention charges provided the transporter produced a certificate to the effect from the K.S.E.B. authorities. This will be operative from 15-7-80 onwards, it was, however, agreed by Mr. Subramaniam that his driver will give a telegram to, Wellington Island, Cochin as soon as he reaches Angamaly with the pipes, intimating them that the trailer will arrive there around 1 p.m. the next day. We will arrange to send a telegram to Angamaly from Bangalore intimating the arrival of the trailer.
Clause-2: It was pointed out by Mr. Subramaniam that their trailer is running 120 kms, extra during the return trip every time as the original contract envisaged only the distance between Bangalore to idamalayar and back. Considering this request, we have agreed to pay Rs. 37/- (Rupees thirty-seven only) extra per tonne and thus the revised transport charges for bringing the plates will Rs. 237/- (Rupees two hundred and thirty seven only) per tonne with effect from the date of our original contract. i.e., 25-1-1980.
Clause-3: The recent price increase of Diesel oil was discussed and considering the request of the transporter, we have agreed to pay Rs. 445/- (Rupees four hundred and forty-five only) extra, as lumpsum over and above the to and fro charges, with effect from 15-7-1980 onwards.
Claus-4: The Earnest Money Deposit for the fulfillment of the contract was clearly sorted out on the basis of the retensions and it has been agreed to maintain a lumpsum of Rs, 25,000/- (Rupees twenty-five thousand only) and the amount over and above due to the transporter should be paid every fortnight. Mr. Subramaniarn's suggestion of keeping a fixed deposit receipt for Rs. 25,000/- on his name duly discharged in our favour till the contract concludes will be discussed with our Banker and this point will be accepted, if the same is acceptable to our Bankers."
10. According to the case of the plaintiff as deposed to by P.Ws. 1 to 3, the bills were issued after performing the trips and the defendant also went on paying. In support of the plea that the plaintiff performed 48 trips and issued the bills and also the defendant made certain payments, the plaintiff has maintained the accounts. The account books were produced as Ex.P.6(a) and P.6(b). Extract from the account books were prepared and produced and the same was marked as Ex.P.6. P.W.3 has spoken to Ex.p.6, P.69(a) and P.6(b). From Ex.P.6 it is clear that the plaintiff had issued various bills commencing from 5-3-1980 to 31-1-1982. It is also evident from Ex.P.6, that the payments made by the defendant were not in answer to the bills issued or were not in conformity with the bills issued as and when but the payments were made in lumpsum without reference to the bills according to the convenience of the defendant. As the contents of Ex.P6. are also relevant for the purpose of determining the point raised as to limitation, we consider it just and appropriate to reproduce the entire Ex.P.6 at this stage itself which is as follows:
LEDGER EXTRACT OF THE ACCOUNT OF M/S SIKKA N SIKKA ENGINEERS PVT. LTD.
L/f No. Date J/f No. Particulars Credit Debit 1 2 3 4 5 6 Rs.
Rs.39
5-3-80 5 To 10,988-00 "
20-3-80 9 To 9,000-00 "
25-3-80 13 To 9,020-00 "
31-3-80 18 By 1,000-00 "
"
"
To 8,000-00 210 21-5-80 78 By Canara Bk Ch. No. 452313 7,500-00 "
"
"
By "
" " No. 452394 20,000-00 "
1-7-80 138 By "
" " No. 452637 25,000-00 "
19-7-80 "
By "
" " No. 452684 10,000-00 "
23-7-80 171 By "
" " No. 452514 13,974-40 "
20-8-80 32 By "
" " No. 697330 14,435-77 "
3-9-80 51 By "
" " No. 697358 6,542-59 "
12-9-80 69 By "
" " No. 697380 30,711-42 "
26-9-80 92 By "
" " No. 697405 8,876-76 "
25-10-80 145 By "
" " No. 697568 18,014-20 "
12-11-80 183 By "
" " No. 697645 17,223-00 "
28-11-80 220 By "
" " No. 697449 18,000-00 "
28-11-80 224 By "
" " No. 44724 18,142-20 "
31-1-81 59 By "
" " No. 447298 17,638-50 "
"
"
By "
" " No. 442328 17,843-58 "
"60
By "
" " No. 447449 8,741-35 "
"
"
By "
" " No. 447513 9,099-55 "
"73
To Bill No. 19 dt. 21/4 11,500-00 "
"
"
To "
No. 20 dt. 28/48,000-00 "
"
"
To "
No. 21 dt. 8/58,000-00 "
"74
To "
No. 22 dt. 15/58,000-00 "
"
"
To "
No. 23 dt. 16/53,000-00 "
"
"
To "
No. 24 dt. 16/53,000-00 "
"
"
To "
No. 25 dt. 23/58,400-00 "
"
"
To "
No. 26 dt. 5/68,000-00 "
"
"
To "
No. 27 dt. 5/69,000-00 "
"
"
To "
No. 28 dt. 15/79,000-00 "
"
"
To "
No. 29 dt. 28/711,000-00 "
"
"
To "
No. 30 dt. 5/820,000-00 "
"
"
To "
No. 31 dt. 5/81 ,000-00 "
"
"
To "
No. 32 dt. 12/89,000-00 "
"
"
To "
No. 34 dt. 14/89,000-00 "
"
"
To "
No. 35 dt. 21/89,251-22 "
"
"
To "
No. 36 dt. 21/8, 3,706-68 "
"
"
To "
No. 37 dt. 30/89,000-00 "
"
"
To "
No. 38 dt. 8/910,000-00 "
"
"
To "
No. 39 dt. 15/91,580-00 "
"
"
To "
No. 40 dt. 22/99,500-00 "
"
"
To "
No. 41 dt. 30/99,000-00 "
"
"
To "
No. 42 dt. 30/9500-00 "
"
"
To "
No. 43 dt. 9/109,142-20 "
"
"
To "
No. 44 dt. 10/101,000-00 "
"
"
To "
No. 45 dt. 20/109,000-00 "
"
"
To "
No. 46 dt. 24/1 09,000-00 "
"
"
To "
No. 47 dt. 30/109,000-00 "
"
"
To "
No. 48 dt. 30/10500-00 "
"
"
To "
No. 49 dt. 6/1 19,023-70 "
"
"
To "
No. 50 dt. 14/119,118-50 "
"
"
To "
No. 51 dt. 17/11500-00 "
"
"
To "
No. 52 dt. 22/118,918-16 "
"
"
To "
No. 53 dt. 29/119,000-00 "
"
"
To "
No. 54 dt. 5/129,284-40 "
"
"
To "
No. 55 dt. 13/129,000-00 "
"
"
To "
No, 57 dt. 28/1210,000-00 "
"
"
To "
No. 58 dt.
9,099-55 "
"
"
To "
No. 59 dt, 19/1 14,208-56 "
"
"
To "
No. 604,000-00 "
"
"
To "
No. 619,500-00 "
"
"
By Canara Bank, Ch. No. 897349 20,000-00 "
"87
By EMD 25,000-00 "
"
"
By Deductions Halting Charges 19,500-00 "
"
"
By deduction U/L 1,580-06 "
"
"
By Weight Difference 2,209-03 Total 3,31,032-41 3,54,740-97 Balance 23,708-55 SIKKA N SIKKA ENGG. P. LTD. LORRY HIRE RECEIVABLE A/c 212 31-1-81 87 To EMD deducted from running bills due now standing in separate account 25,000-00 SIKKA N. SIKKA ENGINEERS PVT. LTD. EMD A/C 212 31-1-81 87 To deductions in bills recoverable to lorry hire receivable a/c 23,289-09 65 9-3-81 54 By Canara Bank Ch. No. 447602 9,208-56 "
"
"
By " Ch. No. 447635 8,644-50 "
"55
By " Ch. No. 699370 15,620-52 "
7-4-81 116 By " Ch. No, 700012 8,488-08 "
7-5-81 171 To Bill No. 62 9,500-00 "
"
"
"63
9,000-00 "
"
"
"64
500-00 "
"
"
" 65 10,000-00 "
"
"
" 66 10,000-00 "
"
"
" 67 9,000-00 "
"
"
"68
9,000-00 "
14-5-81 185 By Canara Bank.
Ch No. 702534 8,559-18 "
"
"
By " No. 700193 8,611-82 "
26-6-81 212 By " No. 702598 7,440-00 B 23-6-81 269 By " No. 078805 4,000-00 "
6-7-81 289 By " No. 078822 9,000-00 "
27-7-81 323 By " No. 079635 8,625-54 4-9-81 387 By " No. 079726 8,241-60 "
"388
To Bill No. 70 4,000-00 "
"
"
To " No. 72 10,000-00 "
"
"
To " No. 73 9,000-00 "
"
"
To " No. 74 9,500-00 "
"
"
To " No. 75 11,000-00 "
"
"
To " No. 76 5,445-00 "
18-9-81 412 By Canara Bank Ch. No. 078818 8,236-86 "
31-1-82 184 To Bill No. 77, 78 and 79 6,600-00 Total 1,04,676-16 1,84,542-64 Balance Dr 79,866-49 in the cross-examination of P.W.3 and in the evidence of D.W.1, we do not find anything of importance challenging the correctness of the entries found in Ex.P.6 except assertion of the defendant that the plaintiff was not entitled to halting charges which we will consider a little later under this point only.
11. From the contents of Ex.P,7, it is dear that as on 31-1-1982, the defendant was due to the plaintiff in a sum of Rs. 79,866-49. At this stage itself we may also refer to the reply notice Ex.P.9 dated 19-3-1982 to the notice dated 13-3-1982 issued by the plaintiff to the defendant demanding a sum of Rs. 74,421-40 as on the date of issuance of the notice, From Ex.P.9, it is clear that the plaintiff on 13-3-1982 demanded a sum of Rs. 74,421-49 as stated in para 2 of Ex.P.9. That it is so is not disputed before us. However, in Ex.P.6 we find that the total sum due is Rs, 79,866-49. The difference between the two is Rs. 5,445/-. It is submitted on behalf of the plaintiff-respondent that this is due to the fact that the bill dated 4-9-1981 was not included in the amount claimed in the legal notice. The defendant has not challenged any specific entry found in Ex.P.6 which is the extract prepared out of the entries made in the account books of the plaintiff-company which were also produced. The defendant except stating that nothing is due to the plaintiff, has not produced any evidence. The defendant is a Registered Company. As such in the normal course it must have maintained its accounts. It is also not disputed that the defendant has maintained its accounts. If that is so, when the plaintiff produced its accounts in support of its claim and in the light of the contention of the defendant that nothing was due by it, it was all the more incumbent upon the defendant to produce its accounts. But the defendant has failed to produce any such accounts. It is also not the case of the defendant that it had no proper opportunity to produce its accounts. In fact, Ex.P.6 was filed along with the plaint itself. The account books Ex.P.6(a) and P.6(b) were produced and the same were taken back subsequently by leaving the extract Ex.P.6. Therefore, the defendant was fully aware of the details of the claim made by the plaintiff before it filed its written statement. As in the written statement no entry relating to any of the bills is specifically challenged except relating to halting charges, Ex.P.6 cannot be rejected in toto.
12. We shall now take up the contention relating to halting charges, it is contended on behalf of the defendant that as per the terms of the contract contained in Exs. P.7 and P.8, in order to claim the halting charges, it was incumbent upon the plaintiff to produce a certificate from the KSEB. that the truck in question was detained for more than 36 hours. The plaintiff has not produced any such certificate. Therefore, the plaintiff is not entitled for the halting charges amounting to Rs. 9,500/-.
13. It is no doubt true that the contract provides for production of a certificate from the K.S.E.B. relating to retention of the vehicle for over a period of 36 hours from the date of its arrival. The officials from the K.S.E.B have been examined as P.W.1 and P.W.2. P.W.1 is one B.J. Vijayan, Executive Engineer, Project, Central Stores, Angamaly of Kerala State Electricity Board. He has deposed that he was in charge of the Central Stores, Angamaly, and the defendant was to supply penstock pipes to Kerala State Electricity Board. He has produced Ex.P.1(1) to P.1(90) and also Ex.P.2. He has also further deposed as follows:
"We do not issue any certificate regarding the retention of vehicle within the project area. Even if the time taken exceeds 36 hours, we do not issue certificate of retention vehicle. The plaintiff had not applied for any certificate."
The case of the plaintiff is that there was no practice in the Kerala State Electricity Board to issue certificate of retention of vehicle for more than 36 hours, therefore, it was not possible for the plaintiff to produce such a certificate. It is no doubt true that in order to claim halting charges under the terms of the contract, the plaintiff was required to produce a certificate issued by the Kerala State Electricity Board. But the fact remains that the defendant had not at any time insisted for the production of the same. On the contrary, it had gone on making payments without reference to the question as to whether any such certificate was produced by the plaintiff, though the plaintiff had claimed halting charges for over a period of 36 hours. Ex.P.6 reveal that there is no co-relation between the bills issued by the plaintiff and the payments made by the defendant. As already pointed out, the bills were issued according to the convenience of the plaintiff and payments were made according to the convenience of the defendant. Therefore, in the absence of specific evidence as to insistence of production of certificate from the Kerala State Electricity Board regarding the retention of the vehicle for over a period of 36 hours, it is not possible to hold that the clause relating to production of certificate from the K.S.E.B. regarding the retention of the vehicle was insisted upon.
14. However, it is contended on behalf of the defendant that there is no evidence adduced to show that the retention of the vehicle for a period of over 38 hours was at the instance of the Kerala State Electricity Board and not due to the plaintiff or its staff, Ex.P.1(1) to Ex.P.1(90) are the cards issued by the officer of the Kerala State Electricity Board. They contain the time and date of the vehicle entering the project area and the time and date, the vehicle left the project area. If the retention of the vehicle for over a period of 36 hours in the project area was not due to Kerala State Electricity Board, it was not necessary for it to mention the time at which the vehicle entered the project area and the time at which the vehicle left the project area and it was also not necessary for it to maintain Ex.P.1(1) to Ex.P.1(90) and prepare and produce Ex.P.2. Ex.P.2 is the abstract of weighment cards of pipes weighed at Angamaly weigh bridge showing the dates and time of weighment. It contains trip number, pipe number, vehicle number, reporting date and time of the vehicle at the weigh bridge and incoming and outgoing time. Therefore, Ex.P.1(1) to Ex.P.1(90) read with Ex.P.2 which is the extract prepared from Ex.P.1(1) to Ex.P.1(90) and the oral evidence of P.W.1, it is established that the delay of over 36 hours was not at the instance of the plaintiff or its staff but it was due to the fact that there was delay in taking delivery of pipes by the K.S.E.B. itself for which the plaintiff cannot be held responsible. Therefore, it is not possible to accept the contention of the defendant that the retention of the vehicle or the delay for over 36 hours for the vehicle to leave the project area from the time it entered the project area was not at the instance of the Kerala State Electricity Board but it was due to the plaintiff. Therefore, we are of the view that the plaintiff has proved that the vehicle in which the penstock pipe was carried was retained by the K.S.E.B. for over a period of 36 hours on the number of trips in respect of which halting charges are claimed.
15. In Ex.P.6, there are certain entries in relation to Earnest Money Deposit and Halting charges, unloading and weight differences. The total amount under these 4 heads is to the tune of Rs. 48,289-09. In Ex.P.6, this amount has been credited and the debit and credit entries have also been made. Therefore, what is claimed by the plaintiff is only the amounts claimed in the various bills. It is not disputed before us that the defendant had deducted the halting charges and the EMD from the various bills issued by the plaintiff. It is also stated that the amount relating to halting charges also was retained by the plaintiffs in the various bills issued by it. Therefore, by reason of specific debit and credit entries relating to these claims, the plaintiff cannot be held to have made any additional claim in this have regard. Thus it is clear that the plaintiff has proved that a sum of Rs. 79868-49 including E.M.D. and halting charges, unloading charges and weight differences was due to be paid by the defendant in respect of the 48 penstock pipes. Accordingly Point No. 1 is answered in the affirmative.
POINT NO. 216. There was no agreement with regard to payment of interest on the amount outstanding and payable to the plaintiff by the defendant. In the notice dated 13-3-1982 (Ex.P.9), the plaintiff had not demanded payment of interest, The plaintiff has also not claimed interest in the plaint at a particular rate and from a particular date. The claim made by the plaintiff for interest as contained in para 11 of the plaint is as follows:
"11. The plaintiff becomes entitled to the the payment of damages by way of interest for the non-payment by the defendant of its dues. For the present, the plaintiff demands the payment of a sum of Rs. 1,000/- (Rupees one thousand only) being the amount of interest. Further upon the taking of a true and proper account if the Hon'ble Court were to revise the estimates, the plaintiff undertakes to pay the court fee on such an amount, Hence the suit".
Thus it is clear that the plaintiff did not make any specific claim for interest, However, curiously enough the trial Court has awarded interest at the rate of 18% per annum from the date of suit till the date of payment. As far as payment of interest from the date of suit which is otherwise known as current-interest is concerned, it is governed by Section 34 of the C.P.C, which says that where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding six per cent per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment or to such earlier date as the Court thinks fit. The proviso thereof further proves that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent per annum but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. The payment of interest prior to the date of suit, it does not arise in the instant case, as no such claim is made by the plaintiff. Therefore, the question for consideration is whether the plaintiff is entitled to interest from the date of the suit till the date of the decree and from the date of decree till the date of payment and if so, at what rate?
17. The plaintiff has also not pleaded the trade usage or custom with regard to interest payable on the claim in question. In fact, the plaintiff has also not relied upon Section 3 of the Interest Act. Therefore, this has to be considered under Section 34 of the C.P.C. Awarding of. interest from the date of suit till the date of decree is within the discretion of the Court. Of course, the Court has to exercise the discretion judiciously. The transaction in question is a commercial transaction. The plaintiff specifically demanded the amount by issuing a notice dated 13-3-1982 (Ex.P.9) and filed the suit on 8-3-1985. According to the plaintiff, the said amount was due on 13-3-1982 itself. Therefore, there is no doubt that at any rate, the plaintiff is entitled to interest from the date of the suit.
18. In the absence of contract regarding the rate of interest between the parties, in the case of commercial transactions, the Court has to award interest taking into consideration the monies lent or advanced by nationalised banks. In the instant case, there is also no evidence with regard to the rate at which monies are lent and advanced by Nationalised Banks in relation to commercial transactions at the relevant period viz., the date on which the suit was filed. However, in this regard, we place reliance on the various circulars issued by the Reserve Bank from time to time or the precedents of this Court.
19. In a recent Decision of this Court in J.M. SHAH AND ORS. v. THE SYNDICATE BANK AND ORS., , and also in KOTRA-BASAPPA v. INDIAN BANK, dealing with an appeal arising out of a suit for recovery of a sum of Rs. one lakh plus Rs. 33438-75 as interest claimed on the ground that there was a mistaken entry made in the accounts to the tune of Rs. one lakh, this Court has awarded interest at the rate of 9% p.a. from 26-6-1980 based on Section 2(b) of the Interest Act which defines 'current interest' which is in pari materia with the proviso to Section 34 of C.P.C. As the suit has been filed in the year 1985 and as per the circulars issued by the Reserve Bank of India from time to time, the rate of interest has been enhanced to more than 9%, we are of the view that in the facts and circumstances of the case, interest at the rate of 12% from the date of suit till the date of decree and also at the same rate from the date of the decree till the date of realisation would be just and proper. Point No. 2 is answered accordingly.
POINT NO.3
20. It is the contention of the defendant that the suit is barred by time because the cause of action for the suit arose no sooner the bills were issued by the plaintiff to the defendant because as per Clause 16 of the contract, the defendant was liable to pay the amount only on issuing of the bill by the plaintiff and within 45 days from the date of service of the bill. Clause 16 of the contract we have already reproduced while dealing with Point No. 1. It is true that the amount became payable by the defendant to the plaintiff on the service of the bill and on the expiry of 45 days from the date of service of the bill. The last bill was issued on 31-1-1982 for a sum of Rs. 6,600/-. It is submitted that the highest that could be said in favour of the plaintiff is that the claim of the plaintiff is in time in so far it relates to the bill 31-1-1982 and not in respect of the other bills which were issued prior to that date. From Ex.P.6 it is noticed that prior to 31-1-82, the last bill issued by the plaintiff was on 4-9-1981. The other bills were much earlier to that date. According to the defendant, even adding 45 days to 4-9-1981, the suit will be beyond the period of three years even applying Article 113 of the Limitation Act, 1963. Of course one limb of the argument of the defendant is that the claim is governed by Article 18 of the Limitation Act because the claim is in respect of the work done under the contract.
21. On the contrary, it is the claim of the plaintiff that it went on issuing bills under the contract as and when it transported the penstock pipes and the defendant went on paying according to its convenience and not in accordance with the bills as and when they I were issued by the plaintiff. Therefore, it was necessary to find out the balance due from the defendant to the plaintiff at the end of the performance of the contract and as the defendant did not deliver the penstock pipes after it delivered 48 penstock pipes and made payment of Rs. 8,236-88 on 18-9-1981, it became necessary for the plaintiff to strike out the balance and issue a notice claiming the balance of the amount remaining to be paid by the defendant to the plaintiff in respect of transporting of 48 penstock pipes by it. Therefore, it issued the notice on 13-3-1982 which was replied by the defendant on 19-3-1982 as per Ex.P.9 denying the claim of the plaintiff, Therefore, the right to sue accrued only on the receipt of the reply notice dated 19-3-1982, as such, from the date of receipt of Ex.P.9, the suit is filed within 3 years. Therefore, as per Article 113 of the Limitation Act, the suit is filed within time. It is also further contended that Article 18 of the Limitation Act is not applicable to the case on hand; that there is no other article which applies to the claim of the plaintiff. Therefore, only the residuary Article 113 alone is applicable.
22. We may point out that no doubt the plaintiff has transported the penstock pipes under the Agreement, it is also possible to characterise the claim as the one made for recovery of the price of the work done at the request of the defendant. But it is not possible to hold that Article 18 of the Limitation Act applies to the claim in question. The said Article roads thus:
Description of suit Period of Limitation Time from which period begins to run
18.
For the price of work done by the plaintiff to the defendant at his request, where no time has been fixed for payment.
Three years When the work is done, It is clear from Article 18 that in order to attract the same, it is necessary that no time must have been fixed for payment. In the instant case, as per Clause 16 of the contract, there is a time fixed for payment i.e., the amount has to be paid on the 46th day after the receipt of the bills from the plaintiff, Therefore, Article 18 is not applicable to the claim in question, as it Is not applicable to a case where time for payment is fixed in respect of the price payable for the work done by the plaintiff for the defendant at his request is also the view taken by a Division Bench of the High Court of Patna in STATE OF BIHAR v. RAMA BHUSHAN, AIR 1964 Patna 326. Hence we hold that Article 18 is not attracted to the claim in question.
23. We shall now take up for consideration whether Article 113 is attracted to the claim in question and if so, whether the suit is in time.
24. No other Article in the limitation Act is pointed out to us other than Article 113 which attracts the claim in question. Therefore, we have to hold that the claim falls under Article 113 which is a residuary Article which applies to suits for which no limitation is provided elsewhere in the schedule to the Limitation Act. The period prescribed is three years which commences when the right to sue accrues.
24.1. The expression 'right to sue' occurring in Article 113 which is equivalent to Article 120 of the old Limitation Act, has been considered by the Privy Council and the Supreme Court in various Decisions. Therefore, it is not necessary to make an attempt to place fresh construction over it In Mt. BOLO v. Mt. KOKLAN AND ORS., AIR 1930 PC 270, the Privy Council has interpreted the expression 'right to sue' occurring in Article 120 of the old Limitation and has held as follows:
"There can be no 'right to sue' until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted."
24.2. Again the Privy Council in ANNAMALAI CHETTIAR AND ORS. v. A.M.C.T, MUTHUKARUPPAN CHETTIAR AND ANR., AIR 1931 PC 9, considering the very same expression has held that where there are successive invasions or denials of a right, when the defendant has clearly and unequivocally threatened to infringe the right asserted by the plaintiff in the suit, the right to sue accrues. Every threat by a party to such a right, however ineffective and innocuous it may be cannot be considered to be a clear and unequivocal threat so as to compel the plaintiff to file a suit to establish that right.
24.3. In RUKHMABAI v. LALA LAXMINARAYAN AND ORS., , the Decision of the Privy Council in Mt. Bolo v. Mt. Koklan has been quoted with approval, and is also the Decisions in Annamalai Chettiar v. Muthkaruppan Chettiar and GOBINDA NARAYAN SINGH v. SHAM LAL SINGH, AIR 1931 PC 89. It has also been further held as follows:
"The legal position may be briefly stated thus: The right to sue under Article 120 of the Limitation Act accrues when the defendant has clearly and unequivocally threatened to infringe the right asserted by the plaintiff in the suit- Every threat by a party to such a right, however, ineffective and innocuous it may be, cannot be considered to be a clear and unequivocal threat so as to compel him to file a suit. Whether a particular threat gives rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardizes the said right"
24.4. In a recent Decision of the Supreme Court in STATE OF PUNJAB AND ORS. v. GURDEV SINGH, ASHOK KUMAR, , white considering the very same expression occurring in Article 113 of the Limitation Act, it has been held as follows:
"The court has to find out when the 'right to sue' accrued to the plaintiff, if a suit is not covered by any of the specific articles prescribing a period of limitation, it must fall within the residuary article. The purpose of the residuary article is to provide for cases which could not be covered by any other provision in the Limitation Act. The residuary article is applicable to every variety of suits not otherwise provided for. Article 113 (corresponding to Article 120 of the Act of 1908) is a residuary article for cases not covered by any other provisions in the Act. It prescribes a period of three years when the right to sue accrues. Under Article 120 it was six years which has been reduced to three years under Article 113. According to the third column in Article 113, time commences to run when the right to sue accrues. The words 'right to sue' ordinarily mean the right to seek relief by means of legal proceedings. Generally, the right to sue accrues only when the cause of action arises, that is, the right to prosecute to obtain relief by legal means, The suit must be instituted when the right asserted in the suit is infringed or when there is a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted."
In the aforesaid Decision, the Decision in GANNON DUNKERLEY AND CO. LTD. v. THE UNION OF INDIA, is followed
25. Therefore, it is clear that when the right is infringed or invaded by denial of a right, there is a clear proof of infringement of the right claimed in the suit, and the right to sue can be said to have accrued. These Decisions also point out that mere cause of action for the suit is not sufficient. In addition to that there must be real threat to the right or denial of the right or infringement of the right claimed in the suit it is however, contended on behalf of the defendant that as to when the right to use accrued would depend upon the facts and circumstances of each case, in the instant case as the bills were issued, on the expiry of 45 days from the date of receipt of each bill, the plaintiff became entitled to the amount and the defendant came under a legal obligation to pay it. Therefore, the right to sue accrued on those dates, and as the bills issued by the plaintiff except the last bill for Rs. 6600/- were long prior to 3 years from the date of suit, the suit was barred by time in respect of those bills.
26. it may be pointed out here that if only the payments had been made by the defendant in conformity with the bills issued by the plaintiff from time to time, by applying Clause 16 of the contract, there was no difficulty whatsoever in accepting this contention. But the defendant itself has chosen to ignore Clause 16 and the plaintiff also has not insisted upon Clause 16 in that it has not insisted upon payment of the amount as per the bills on the 45th day of the service of each of the bills. In fact, Ex.P.6 (which has been reproduced in extenso while dealing with Point No. 1) contains sufficient internal evidence. It reveals that at no point of time, the defendant had made payments in conformity with the bills issued by the plaintiff. To illustrate our view, we may point out here that Ex.P.6 reveals that the plaintiff had issued the bills on 5-3-80, 2Q-3-8Q, 25-3-80 and 31-3-80 for the amounts of Rs. 10,988/-; 9,000/-; 9020/-; and 8000/- respectively but the defendant had paid only Rs. 1,000/- on 31 -3-1980, The next payment made by the defendant was only on 21-5-1980 by way of cheque for Rs. 7500/- and another cheque for Rs. 20,000/-. Both these cheques put together were not sufficient to satisfy the 4 bills issued by the plaintiff during the month of March amounting to Rs. 37,008/-. The payments made and the bills issued for the subsequent period reflect the same position. Therefore, at no point of time during the performance of the contract, there was payment in accordance with the bills or bill issued by the plaintiff. Hence it became all the more necessary for the plaintiff to determine the balance of the amount due from the defendant which it did by issuing a notice dated 13-3-1982 which was replied by the defendant as per Ex.R.9 dated 19-3-1982 and the same was received by the plaintiff. In Ex.P.9, the defendant specifically denied the claim of the plaintiff. Therefore, on 19-3-1982 there was a clear denial of the claim of the plaintiff by the defendant. Hence the limitation commenced under Article 113 of the Limitation Act from the date of Ex.P.9, to be exact, from the date of receipt of Ex.P.9. But we have not been able to point out when Ex.P.9 was received by the plaintiff; but it is not disputed that Ex.P.9 was served upon the plaintiff. Therefore, we take the date of Ex.P.9 as the date of commencement of limitation. From that date, the suit was filed within three years as it was filed on 8-3-1985. Therefore, Point No. 3 is answered in the affirmative.
POINT NO. 427. It is not possible to agree with the contention of Sri Srinivasan, learned Counsel for the respondent-plaintiff that without filing an appeal or a cross-objection he can contend for reversal of that portion of the decree of the trial Court by which the claim of the plaintiff made for a sum of Rs. 19,133-51 has been rejected. It is contended that Rule 22 of Order 41 of the C.P. Code dearly enables the respondent-plaintiff to sustain the decree passed by the trial Court even if it is otherwise not sustainable by challenging the correctness of the findings recorded on issue No. 7 relating to damages of Rs. 19,133-51, claimed by the plaintiff. Rule 22 of Order 41 of the C.P.C reads as follows:
"22(1): Upon hearing respondent may object to decree as if he had preferred separate appeal. - Any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against in the court below in respect of any issue ought to have been in his favour; and may also take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.
Explanation - A respondent aggrieved by a finding of the court in the judgment on which the decree appealed against is based may, under this rule file cross-objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the court on any other finding which is sufficient for the decision of the suit, the decree, is wholly or in part, in favour of that respondent."
The words underlined are inserted by Act No. 104/1976. A close reading of the above provision reveals that it is open to the respondent in the appeal to support the decree passed by the trial court without filing a cross-objection or appeal challenging the finding recorded against him but it is not possible to hold that it would be permission for the respondent to have that portion of the decree reversed which has denied the relief claimed by the plaintiff in the suit without preferring cross-objection or appeal. If the contention of the learned Counsel is accepted, it would amount to permitting the respondent to challenge the correctness of the decree passed against him without preferring an appeal or cross-objection. In our view the Rule does not permit such a thing. Of course, out of the several issues framed in the suit relating to the same relief, if some are answered in favour of the plaintiff and some are answered against him and the decree is passed in favour of the plaintiff on the basis of the findings recorded on the issues in favour of the plaintiff, it would be open to the plaintiff in the appeal preferred by the defendant to challenge the correctness of the findings recorded against him on such of those issues which relate to the same relief in order to support the decree passed in his favour. Such is not the position in the instant case. In the instant case, the plaintiff made two specific claims - one relating to the amount due from the defendant for the work done under the contract and the other relating to the damages due to the breach of the contract alleged to have been committed by the defendant. The two claims are determined under different issues but the claim relating to damages has been negatived and the claim for recovery of the amount for the work done under the contract has been decreed. Thus the suit is dismissed in so far it relates to damages. In such a case, it would not be open to the plaintiff in an appeal preferred by the defendant to challenge the correctness of that portion of the decree which has denied damages to the plaintiff without either preferring an appeal or a cross-objection. Though, both the reliefs flow from the same contract but they are distinct and separate reliefs and one does not depend upon the other. Therefore, we are of the view that the plaintiff-respondent is not entitled to challenge the finding recorded on the issue of damages (Issue No. 7) by the trial Court as it has not preferred cross-objection or cross-appeal. Point No. 4 is answered accordingly.
28. For the reasons stated above, this Appeal has to be allowed in part. It is accordingly allowed in part. The judgment and decree of the trial Court in so far decree the suit of the plaintiff for a sum of Rs. 79,866-40 are confirmed but in so far award of interest at 18% are modified and it is decreed that the plaintiff would be entitled to interest on the aforesaid sum at 12% per annum from the date of the suit till the date of decree and also at the same rate of 12% per annum from the date of the decree till the date of realisation with proportionate costs.