THE STATE OF MADRAS (NOW ANDHRA PRADESH) Vs. SRI VENKATASATYANARAYANA RICE MILL, CONTRACTORS, GOTTIPATI SURYANARAYANA & COMPANY

JUDGEMENT

(1.) This appeal is brought by the State of Madras against the judgment of the Subordinate Judge, Gudivada giving a decree to the plaintiff for Rs. 1,010-11-0. The suit giving rise to this appeal was instituted for recovering Rs. 6169-5-9 as interest by way of damages. The plaintiff supplied rice to the District Supply Officer, Vijayawada in the years, 1948 and 1949 in pursuance of an agreement entered into between him and the District Supply Officer as representing the State of Madras. There was considerable delay in the payment of the amounts due to him as the bills presented by him. Consequently, the defendant was sought to be made liable for interest on the amounts payable to him. The suit was resisted on the ground inter alia that there was no liability to pay interest. The trial court while holding that the plaintiff was not entitled to claim interest in respect of the amounts paid to him within six weeks of the supply of rice, decided that in cases where the bills were not made within six weeks the plaintiff could claim interest on equitable grounds. In that view, the allowed interest on 17 items amounting to Rs. 1,010-11-0. The defendant aggrieved by this judgment has brought this appeal.

(2.) The only point for consideration in this appeal is, whether the defendant is bound to pay interest to the plaintiff on account of the delay in meeting the bills. The agreement did not contemplate payment of any interest on the sums that might be outstanding nor was there any provision for paying for the supplies within any specified date. It is also not plaintiff's case that the claim for interest in this case comes under the Interest Act. Nor is any trade usage or custom having the force of law urged as a basis for payment of interest. The interest in this case is claimed on the ground of equity. In such a situation has a court power to allow interest on the amounts not paid within a particular time? Unless there is an agreement for payment of interest at a particular rate or is warranted by the usage of trade having the force of law or under substantive law as for instance under Section 80 of the Negotiable Instruments Act, when no rate of interest is specified in the promissory note or bill of exchange, no interest could be awarded to the plaintiff.

(3.) I shall see whether Section 73 of the Contract Act come to the rescue of the plaintiff. That Section recites: