STATE OF KERALA Vs. EDWARD JOHN

JUDGEMENT

(1.) The appellants are the defendants in O.S. No. 313 of 2006 on the file of the Court of the Principal Subordinate Judge of Thiruvananthapuram. The said suit was filed by the respondent herein for realisation of the sum of Rs. 4,27,276/- due to him as per the statement of accounts furnished, from the appellants and their assets and for allowing him to realise future interest at the rate of 18% per annum on the aforesaid sum from the date of suit till realisation together with costs of the suit. The court below by judgment delivered on 30.9.2010 decreed the suit and allowed the respondent to realise the sum of Rs. 4,27,276/- together with interest at the rate of 12% per annum from the date of suit till realisation and costs of the suit from the appellants and their assets. Aggrieved by the said judgment and decree, the appellants are before this Court in this appeal. We heard the arguments of the learned Government Pleader appearing for the appellants/defendants and also the learned counsel appearing for the respondent/plaintiff.

(2.) Going by the plaint averments, the plaintiff is a registered PWD contractor, who had undertaken the contract work of "Improvements to Thirupurathoor-Pulluvila Road between Ch. 2/600 to Ch. 5/600" in pursuance of Ext. B1 agreement dated 14.12.2002 executed between the plaintiff and the second defendant (second appellant herein) acting for and on behalf of the Government of Kerala. The plaintiff had completed the entire work to the satisfaction of the defendants in September, 2003. During the execution of work, in terms of the provisions in the contract, a part bill for work amounting to Rs. 5,73,007/- was drawn up during March, 2003. While the part bill was pending payment, the plaintiff proceeded with the work and completed the same on the belief that the defendants would honour their contractual obligations. But, the defendants did not release the payment due under the part bill even after completion of the work. After completion of the work, final measurement of the work carried out by the plaintiff was recorded in the measurement books and a final bill in terms of such measurements was drawn up for a sum of Rs. 14,67,988/-, excluding a sum of Rs. 5,73,007/- covered by the part bill and passed for payment on 29.9.2003. The plaintiff contended that, as per the terms of contract, the defendants were liable to pay the final bill immediately on completion of the work. However, they released Rs. 5,73,007/- covered by the part bill only on 23.2.2005 and Rs. 14,67,988/- covered by the final bill only on 12.8.2005, nearly two years after the completion of work. Therefore, the plaintiff filed the suit to realise the sum of Rs. 4,27,276/- due as per the statement of accounts furnished together with interest at the rate of 12% per annum from the date of suit till realisation, with costs from the defendants and their assets.

(3.) The defendants (appellants herein) filed a written statement admitting the award of the contract work of "Improvements to Thirupurathoor-Pulluvila Road between Ch. 2/600 to Ch. 5/600" to the plaintiff vide Agreement No. 78/SESC/2002-03 dated 14.12.2002 and also the fact that, the first and part bill (CC 1st) amounting to a gross amount of Rs. 5,92,194/- was received in the office of the Executive Engineer on 5.3.2003 and CC 2nd and final bill for a gross amount of Rs. 19,09,733/- was received in that office on 27.9.2003. Though the Department is liable to make payment as per agreement conditions as and when work bills are received, payment of the work bills can be effected only based on strict seniority and availability of funds and letter of credit and that the plaintiff was fully aware of this fact when he entered into the agreement for the execution of work. According to the defendants, there was no willful delay in entertaining the request made by the plaintiff as payment can be released only by observing strict seniority, in accordance with the orders of this Court. According to the defendants, there is no oral provision or agreement condition to give interest on belated payments and that payment was made to the plaintiff observing strict seniority and also as per allotment of funds and letter of credit.