Calcutta High Court (Appellete Side)
Unknown vs The Ceil Computer Engineering Private ... on 15 June, 2015
Author: Nishita Mhatre
Bench: Nishita Mhatre
Form no. J(2)
In the High Court at Calcutta
Civil Appellate Jurisdiction
Present:
The Hon'ble Justice Nishita Mhatre
And
The Hon'ble Justice Asha Arora
F.A. No. 209 of 2004
With
F.A. No. 333 of 2005
The Director of census Operation, West Bengal
...Defendant/Appellant
Versus
The Ceil Computer Engineering Private Limited
...Respondent
with
Ceil Computer Engineers Private Limited
...Appellant/plaintiff
Versus
The Registrar General India and others
...Respondents/defendants
For the appellant in F.A. No. 209 of 2004
and Respondent in F.A. No. 333 of 2005: Mr. Rudrajyoti Bhattacharyya
Ms. Debjani Ghoshal.
For the respondents in F.A. No. 209 of 2004
and the Appellant in F.A. No. 333 of 2005: Mr. Abhijit Kumar Roy
Mr. Tanmoy Kumar Dey.
Heard on: 11.05.2015, 12.05.2015 and 02.06.2015.
Judgment on: 15.06.2015
Asha Arora, J.:
1. Both the appeals being First Appeal No. 209 of 2004 and First Appeal No. 333 of 2005 arise out of a common judgment and decree dated 12th December, 2003 rendered by the Learned Judge 7th Bench, City Civil Court, Calcutta in Money Suit No. 567 of 1997 which was decreed in part with proportionate costs. The first mentioned appeal is at the instance of the Defendant No. 3 the Director of Census Operations, West Bengal. The plaintiff being Ceil Computer Engineers Private Limited also assailed the judgment and decree in the aforesaid money suit on the ground that the Trial Court, while decreeing the suit in respect of the principal amount, erred in refusing to grant any interest claimed on the said sum of Rs.2,18,685.72 paise.
2. The backdrop of the plaintiff's case in brief is that in pursuance of an advertisement in the daily issue of the Telegraph on 22nd December, 1992 issued by the Ministry of Home Affairs, Government of India, the plaintiff was entrusted with the contract of data entry work of 42 lac records of Individual slips 1991 Census Project of various districts of West Bengal in terms of letter dated 9th March, 1993 (Ext. 5). An agreement relating to the aforesaid contract was executed by and between the Plaintiff and the Defendant No. 3 on 19th April, 1993. The plaintiff accordingly started execution of the work at its office under the direct supervision of the officers deputed by the Defendant No. 3 who inspected the data entry work and at no point of time raised any dispute regarding the quality of the work. The plaintiff duly keyed in the data entries in respect of the different districts of West Bengal in terms of the agreement and supplied the connected tapes to the defendants. Simultaneous to the execution of the work in the districts the plaintiff raised bills for the districts of Murshidabad, Coochbehar and Hooghly which were duly received by the Defendant No. 3 and payment against the said bills were made to the plaintiff without raising any objection regarding the quality of the work. It is the further case of the plaintiff that the work of the first phase relating to the districts of Murshidabad, Coochbehar, Jalpaiguri, Howrah, Burdwan and Hooghly was completed within the period stipulated in the agreement but the bills relating to the work done for the districts of Howrah and Burdwan remained unpaid. Defendants failed and neglected to make payment regarding the bills dated 16th March, 1994, 21st March, 1994 and 20th August, 1994 by raising a sham dispute for the first time by a letter dated 2nd January, 1995 regarding the alleged discrepancies between the data figures entered by the plaintiff and the control figures maintained by the defendants. By another letter dated 29th March, 1995 the Defendant No. 2 alleged about the inconsistencies and errors regarding the data figures entered by the plaintiff but assured release of the payment of the unpaid bills after checking the data of the second phase of the work. By a letter dated 24th April, 1995 the plaintiff confirmed that the errors as observed by the defendants were duly rectified as and when advised and the data was sent to the defendants fully in conformity with the control data supplied by the defendants. Inspite of repeated demands defendants did not make payment of the aforesaid three bills amounting to Rs.2,18,685.72 in respect of the work done for the districts of Howrah and Burdwan. Hence the suit for recovery of the said amount with interest.
3. Defendants contested the suit by filing written statement wherein the material averments made in the plaint have been categorically denied and it has been contended that the suit is not maintainable. It is the specific case of the defendants that while examining the work it was found that there were errors in the data keyed which was not rectified by the plaintiff inspite of being informed. Plaintiff is therefore not entitled to the decree prayed for and the suit is liable to be dismissed.
4. After considering the oral and documentary evidence led by the parties in support of their respective contentions, the Trial Court arrived at the finding that the plaintiff is entitled to get a decree for Rs.2,18,685.72 on account of the three unpaid bills dated 16.03.1994, 21.03.1994 and 20.08.1994 but they are not entitled to any interest on the said amount as there was no agreement for interest on delayed payment. Holding thus, the suit was decreed in part for an amount of Rs.2,18,685.72 only.
5. Being aggrieved, both the parties brought the matter in appeal.
6. Mr. Rudrajyoti Bhattacharyya, learned Counsel for the appellant in First Appeal No. 209 of 2004 strenuously argued that the Trial Court went wrong in holding that the matter can be taken as closed since the defendants made payment for the work done in respect of the districts of Murshidabad, Jalpaiguri, Coochbehar and Hooghly. Mr. Bhattacharyya submitted that the payment in respect of the work of the aforesaid districts was made in good faith without scrutinizing the data entered. Laying much emphasis on the letters dated 2nd January, 1995 (Ext. F), 29th March, 1995 (Ext. H), 5th December, 1995 (Ext. M) and 2nd January, 1996 (Ext. N), learned Counsel for the appellant/Defendant No. 3 sought to impress upon us that in view of the discrepancies between the figures entered and the figures maintained by the defendants, data had to be extensively rekeyed. As the work done by the plaintiff was far from satisfactory, the Trial Court was not justified in decreeing the suit.
7. On the other hand, Mr. Abhijit Kumar Roy, learned Counsel for Ceil Computer Engineers Private Limited who is the appellant in First Appeal No. 333 of 2005 and the respondent of First Appeal No. 209 of 2004, contended that the letters relating to the alleged discrepancies and errors in the work of data entry were not communicated to the plaintiff nor was the plaintiff given any opportunity to rectify the discrepancies in question. Mr. Roy further submitted that the Trial Court did not err in decreeing the suit but the finding on the point of refusal to grant interest on delayed payment is not justified. In support of his submission for grant of interest from the date of demand Mr. Roy placed reliance on the case law reported in AIR 1979 Supreme Court 852 (State of Rajasthan versus Raghubir Singh and others). Reference has also been made to the case of B.S. Rajput versus M/s. The Cellar and another reported in AIR 1993 Karnataka 9.
8. Whether the work was executed in accordance with the terms and conditions of the agreement dated 19.04.1993 is the crucial point which needs to be determined with reference to the evidence on record.
9. Smt. Tithi Biswas is the Director and Principal Officer of the plaintiff firm who has been examined as P.W. 1. This witness testified in her evidence that the work was done under the direct supervision of the officers deputed by the Defendant No. 3 who inspected the day to day progress and accuracy of the data entries in respect of which no objection was raised at any point of time. This assertion of P.W. 1 remained unchallenged in cross-examination. In her evidence P.W. 1 averred that after execution of the work they raised three bills dated 10.12.1993 and one dated 25.01.1994 which were received by the Defendant No. 3 and payments were made on 25.04.1994 and 25.07.1994. No objection was raised before, during or after the payment regarding the quality of the work. We also get from the evidence of P.W. 1 that the first phase work was completed within time and payment was received in respect of the work of four districts out of six districts. The bills raised on 21.03.1994 for the districts of Howrah and Burdwan were received by the Defendant No. 3 but no payment was made in respect thereof. The above evidence of P.W. 1 was not controverted in cross-examination. It is the categorical assertion of P.W. 1 that the Defendant No. 3 instructed the plaintiff to scratch the tapes pertaining to the data entries relating to the districts of Murshidabad, Jalpaiguri and Coochbehar since the Defendant No. 1 had transferred the data after reconciliation vide letter dated 03.03.1994. The assertion of P.W. 1 on this score has been corroborated by the aforesaid letter dated 03.03.1994 (Ext. 16) of the Defendant No. 3 addressed to the plaintiff. The instruction to scratch the tapes relating to the data entries of the three districts mentioned in Ext. 16 was evidently given by the Defendant No. 3 upon satisfaction with the work done. The evidence of P.W. 1 further reveals that the Defendant No. 3 verified the bills dated 16.03.1994 and 21.03.1994 for Rs.47,136.84 and Rs.44,760/- relating to Burdwan and Howrah districts and certified the payment of the said bills vide letter dated 01.12.1994 (Ext. 17) but the said bills remained unpaid. In her evidence P.W. 1 referred to another bill dated 20.08.1994 which was not paid by the defendant on the ground of alleged discrepancies in the work of data entries. According to P.W. 1 the said dispute was raised by the defendants for the first time vide letter dated 02.01.1995 (Ext. 18) which was followed by another letter dated 29.03.1995 (Ext. 19). By the said letter the Defendant No. 2 informed the plaintiff that in several cases they have observed that the data was totally inconsistent with the control figures maintained by them so they have been compelled to rekey the data for those areas. By a letter dated 24.04.1995 (Ext. 20) the plaintiff informed the Defendant No. 2 that the errors observed by them were duly rectified to the satisfaction of the defendants. Being quizzed in cross-examination P.W. 1 affirmed that the Plaintiff completed the entire work in the concerned districts and she (P.W. 1) also received the payment for the work done in the districts of Hooghly, Murshidabad, Jalpaiguri and Coochbehar. P.W. 1 reiterated in her cross-examination that no payment was received in respect of the work done for the districts of Burdwan and Howrah. On query in cross-examination P.W. 1 categorically stated that the list of errors along with the letter dated 29.03.1995 was not supplied to her. This assertion of P.W. 1 is definitely not an after thought as is evident from her letter dated 24.04.1995 (Ext. 20) which corroborates her statement regarding the matter. At this juncture, it is significant to refer to a letter dated 17.05.1995 (Ext. 23) addressed to the Joint Director (EDP) of the Defendant No. 1 by which plaintiff offered to rekey the data in order to maintain good relation with the defendant but without admitting or accepting the alleged errors mentioned by defendants.
10. On behalf of the defendants, Mr. Trilochan Singh Hojar, the Deputy Director (Electronic Data Processing) in the office of the Defendant No. 1 adduced evidence as D.W. 1. This witness averred in his evidence that the careless manner in which the plaintiff entered the data resulted in delay and additional burden on the exchequer because of rekeying the job by the Defendant No. 3. In his cross-examination D.W. 1 admitted that they did not ask the plaintiff to remove the defects and submit the correct data. We also get from the cross-examination of D.W. 1 that all the data was rekeyed without reference to the plaintiff. Now this is clearly in violation of Clause X of the agreement dated 19.04.1993 (Ext. D) which provides as follows:
"Reconciliation of data, if any when required, in respect of the discrepancies intimated by this office, have to be got done by the contracted agencies and sending of revised/supplementary data tapes as indicated earlier to this office." From the evidence of D.W. 1 we find that the work of rekeying the data was done by the Defendant No. 3 using their internal resources without any reference to the plaintiff.
11. It is not in dispute that the plaintiff received payment for the work done in respect of the districts of Murshidabad, Jalpaiguri, Coochbehar and Hooghly. After acceptance of the bills and making payment with regard to the work of the aforesaid districts the defendants disputed the quality of the work of data entry. In this context we cannot lose sight of Clause XIII of the Agreement which reads thus: "The payment would be made by ORGI on satisfactory completion of the preparation, setting up of data entry software and keying in and verification of each assigned 1991 Census Project including reconciliation and submission of the tapes in full to ORGI." Mr. Bhattacharyya's argument that the payment was made in good faith without inspecting the quality of the work does not hold good for the simple reason that in view of Clause XIII of the Agreement it necessarily follows that the payment was made on being satisfied regarding the quality of the work. This apart, we get from the evidence of P.W. 1 that Defendant No. 3 instructed the plaintiff to scratch the tapes of Murshidabad, Jalpaiguri and Coochbehar since the Defendant No. 1 had transferred the data of the said districts after reconciliation. Such instruction was given by the Defendant No. 3 upon satisfaction regarding the work done. The evidence of P.W. 1 in this regard remained unassailed in cross-examination. Moreover, the letter dated 03.03.1994 (Ext. 16) corroborates this averment of P.W. 1. In the premises we are clearly of the opinion that the Trial Court did not err in holding that the question of disputing the quality of the work of the aforesaid districts does not arise for consideration and the said matter can be taken as closed.
12. We now take up the dispute regarding the work done for the districts of Howrah and Burdwan. It is on record that three bills dated 16.03.1994, 21.03.1994 and 20.08.1994 though received by the Defendant No. 3 remained unpaid. P.W. 1 proved the copy of the bill dated 16.03.1994 (Ext. 13) for an amount of Rs.44,760/- relating to the district of Howrah and the copy of the bill dated 21.03.1994 (Ext. 14) amounting to Rs.47,136.84 for the district of Burdwan. Another bill dated
20.08.1994 (Ext. 15) referred by P.W. 1 for the second phase job of Howrah district amounting to Rs.1,26,788.88 was also admittedly received by Defendant No. 3. According to the defendants payment of the aforesaid bills was not made on account of errors and discrepancies in the work of data entries which had to be rekeyed by them using their internal resources. In this context, it is significant to refer to the evidence of D.W. 1 wherein he admitted that as per the agreement, the plaintiff was required to remove the defects if any in the work of data entries and the Director of Census Operations (Defendant No. 3) was under the liability to refer to the plaintiff the letters of internal correspondences. There is no evidence to show that such letters were referred to the plaintiff by the Defendant No. 3. It is in the evidence of D.W. 1 that plaintiff was not asked to remove the defects and submit the correct data. We have already discussed the evidence of D.W. 1 wherein he admitted that they rekeyed all the data without reference to the plaintiff. This was in clear violation of Clause X of the agreement as noted by us earlier. Being quizzed in cross-examination D.W. 1 admitted that he has no knowledge regarding the letter dated 01.12.1994 (Ext. 17) and without consulting the original records of the data they cannot arrive at the figures of errors. It has also emerged in the cross-examination of D.W. 1 that the letters dated 13.06.1995 (Ext. J), 23.06.1995 (Ext. K), 12.04.1994 (Ext. O), 07.06.1994 (Ext. P), 02.09.1994 (Ext. S) and 14.05.1997 (Ext. T) are all internal correspondences which were not communicated to the plaintiff. In his cross-examination D.W. 1 gave out that the percentage of sample checking for Howrah was .42% and for the district of Burdwan it was 1.70%. He admitted that the said figures were not disclosed by any letter. There is nothing on record to show that the details of the errors or discrepancies in the work of data entries were communicated to the plaintiff for reconciliation of the said data by the contracted agency (plaintiff) in terms of Clause X of the agreement. Defendants allegedly rekeyed the data with their internal resources without getting the same done by the plaintiff. For the fault of the defendants who failed to abide by Clause X of the agreement, the plaintiff cannot be deprived of its legitimate claim of receiving payment on completion of the work. In this regard it is pertinent to refer to Clause XII of the Agreement which provides thus: "After the specified job is completed to the satisfaction of the DCO/ORGI the bill may be forwarded to the respective D.C.O for verification of the work done and certification of the same by the D.C.O and their onward transmission to ORGI for processing of the payments." This Clause clearly reveals that it was incumbent on the D.C.O to verify the work done and forward the bill with certification of the same to ORGI for processing of payment. We find that the Trial Court was justified in placing reliance on the letter dated 01.12.1994 (Ext. 17) of the Deputy Director of Census Operation (DDCO) addressed to the Deputy Director (Administration) office of the Registrar General India requesting him to look into the matter of payment of the bills relating to Howrah and Burdwan districts. In her evidence P.W. 1 referred to a copy of this letter dated 01.12.1994 (Ext. 17) which was forwarded to the plaintiff. Ext. 17 corroborates the evidence of P.W. 1 regarding the factum of verification and certification of the two bills relating to Burdwan and Howrah by the Defendant No. 3. As per Clause XII of the Agreement the condition precedent for the verification and certification of the bill was the completion of the job to the satisfaction of the DCO/ORGI. Ext. 17 therefore lends credence to the testimony of P.W. 1 and speaks in favour of the plaintiff's case.
13. For the reasons discussed, we are convinced that no case for interference with the impugned judgment and decree could be made out by the Defendant No. 3/appellant in consequence of which First Appeal No. 209 of 2004 is liable to be dismissed.
14. Coming to the appeal filed at the instance of the plaintiff (First Appeal No. 333 of 2005), the only point for consideration is whether the Trial Court was justified in refusing to grant interest for the period prior to the filing of the suit that is, from the date of the three unpaid bills up to 31.08.1997 as prayed for in the plaint. Plaintiff claimed interest at the rate of 18% per annum (on the amount due) from the date of the three unpaid bills up to 31.08.1997 which was refused on the ground that such claim was beyond the agreement. The Trial Judge reasoned that there was no agreement between the parties regarding payment of interest.
15. Learned Counsel for the appellant conceded that there was no clause in the agreement regarding payment of interest for delayed payment but it is his contention that the Court has the discretion to award interest by way of damages in cases where the plaintiff has to be compensated for any loss sustained by him consequent on the conduct of the defendant. To fortify his submission learned Counsel for the appellant referred to the case law reported in 1961 Andhra Pradesh 143 (Purushotham Haridas and others versus M/s Amruth Ghee Co. Ltd, Guntur and others). Inviting our attention to the letters dated 17.05.1995 (Ext. 23) and 19.03.1996 (Ext. 28) learned Counsel for the appellant submitted that the plaintiff issued notices to the defendants wherein the claim for interest has been made. Therefore, the plaintiff was at least entitled to interest from the date of the demand as per Section 3 of the Interest Act.
16. To determine the applicability of the Section 3(1) of the Interest Act let us refer to the aforesaid provision which reads thus: "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 a written instrument at a 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."
17. It is clear that under the Interest Act interest can be awarded if the following conditions are satisfied: (1) There must be a debt or an amount certain (2) It must be payable at a certain time (3) The debt or amount must be payable by virtue of a written contract at a certain time. (4) There must have been a demand in writing stating that the interest will be charged or claimed from the date of the demand. For the purpose of the instant case learned Counsel for the appellant pressed into service the condition relating to the demand for payment of interest. Now the question is whether the plaintiff had made a demand for payment by issuing notice that interest will be claimed from the date of such demand. The notice dated 19.03.1996 (Ext. 28) is a copy of the notice under Section 80 of the Civil Procedure Code for suits against the Government or against any public officer in respect of any act done by him in his official capacity. It is not a demand notice for payment of interest within the meaning of Section 3(1) of the Interest Act. The letter dated 17.05.1995 (Ext. 23) also does not contain a specific demand stating that interest will be claimed or charged from the date of demand. It is a reminder for payment of bills. Curiously enough, in a subsequent letter dated 15.12.1995 (Ext.
27) plaintiff simply demanded payment of the amount of Rs.2,18,625.64 towards the arrear bills without making any demand for payment of interest on the said amount.
18. In the circumstances, we are of the opinion that the requirement of Sub-Section (1) of Section 3 of the Interest Act could not be satisfied for awarding interest for the period prior to the institution of the suit. Therefore the decisions reported in AIR 1979 Supreme Court 852 (State of Rajasthan versus Raghubir Singh and others) and AIR 1993 Karnataka 9 (B.S. Rajput versus M/s The Cellar and another) both relating to cases where the Interest Act was applicable are of no assistance to the appellant. The case of Purushotham Haridas and others versus M/s Amruth Ghee Co. Ltd, Guntur and others reported in 1961 Andhra Pradesh 143 is also distinguishable on facts from our present case and hence is of no help to the appellant.
19. This leads us to conclude that the Trial Court did not err in refusing to grant interest for the period prior to the suit. However, we think that it would be just and appropriate to award interest pendentelite at the rate of six per cent per annum on the decretal amount.
20. Consequently, First Appeal No. 333 of 2005 is allowed in part while First Appeal No. 209 of 2004 is dismissed.
21. The judgment and decree of the Trial Court decreeing Money Suit No. 567 of 1997 for an amount of Rs.2,18,685.72 are hereby affirmed.
22. In the circumstances of the case the plaintiff is awarded interest at the rate of six per cent per annum on the decretal amount from the date of the suit upto the date of the decree.
23. There shall be no order as to costs.
24. LCR along with a copy of this judgment shall be sent forthwith to the learned Court below.
25. Urgent Photostat certified copies of the judgment, if applied for by the parties, shall be supplied subject to compliance of requisite formalities.
(Asha Arora, J.) (Nishita Mhatre, J.)