(A.M. Khanwilkar and Sanjiv Khanna, JJ.)
State of Uttar Pradesh and Another ________________ Appellant(s);
v.
Abhishek Bansal _______________________________ Respondent.
Civil Appeal No. of 2021 (Arising out of SLP(C) No. 5466 of 2017), decided on August 19, 2021
The Order of the court was delivered by
Order
1. Leave granted.
2. This appeal takes exception to the judgment and order dated 04.09.2015 passed by the High Court of Judicature at Allahabad in WC No. 70975 of 2010, whereby the High Court allowed the writ petition filed by the respondent and directed the appellants to pay Rs. 9,37,000/- (Rupees Nine Lakhs Thirty Seven Thousand Only) being the principal amount along with interest at the rate of 12 per cent per annum thereon from the date payment became due till date of actual payment, for the work done by the respondent in pursuance to the agreement No. 40/EE/2007-08.
3. The principal argument of the appellants is that in light of the express condition stipulated in the agreement between the parties being Clause 9.02, there was no obligation on the part of the appellants to pay interest to the respondent for delayed payment. The said clause reads thus:
“No claims for interest or damage will be entertained by Government with respect to any money or balance which may be lying with the government, owing to any dispute, differences, or misunderstanding between the Engineer-in-charge on one hand and the contractor on the other hand or with respect to any delay on the part of the Engineer-in-charge in making the periodical and final payments or in any other respect what so ever.”
4. This Court had occasion to deal with similar clause in the case of State of U.P. v. Harish Chandra and Co. reported in (1999) 1 SCC 63. This Court held that such a clause cannot denude the contractor to claim damages for the delayed payment in the form of interest from the date it became due and payable until the realization of the amount. In paragraph 10, the Court has noted thus:—
“10. …The words “or in any other respect whatsoever” also referred to the dispute pertaining to the moneys or balances which may be lying with the Government pursuant to the agreement meaning thereby security deposit or retention money or any other amount which might have been with the Government and refund of which might have been withheld by the Government. The claim for damages or claim for payment for the work done and which was not paid for would not obviously cover any money which may be said to be lying with the Government. Consequently, on the express language of this clause, there is no prohibition which could be culled out against the respondent-contractor that he could not raise the claim for interest by way of damages before the arbitrator on the relevant items placed for adjudication. In fact, similar contention has been repelled by the aforesaid decision of the three-Judge Bench of this Court in paras 24 and 25 of the Report. …Therefore, the contention of learned Senior Counsel for the appellant-State that clause 1.9 barred the consideration of such a claim for interest cannot be sustained. The High Court, therefore, rightly came to the conclusion that clause was not a bar to such a claim. …”
(emphasis supplied in italics)
5. Applying the aforementioned ratio to the case on hand, as the fact situation is comparable and as the rate of interest specified in the reported case has been specified at the rate of 6 per cent per annum only — it is ordered that the impugned judgment stands modified to the extent of interest component only. The interest is now limited to 6 per cent per annum from the date it became due and payable until the date of actual payment. It has come on record that the amount became due and payable on 28.03.2008 and has been paid on 10.04.2015. Taking those dates into account, the appellants shall work out the interest amount at the rate of 6 per cent per annum for the relevant period and pay that amount within four weeks from today to the respondent.
6. The appeal is partly allowed in the above terms. No order as to costs.
7. Pending applications, if any, stand disposed of.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 5466/2017
(Arising out of impugned final judgment and order dated 04-09-2015 in WC No. 70975/2010 passed by the High Court Of Judicature At Allahabad)
The State of Uttar Pradesh & Anr.….Petitioner(s)
v.
Abhishek Bansal.….Respondent(s)
(IA No. 79471/2017 – AMENDMENT OF THE PETITION
IA No. 1/2017 – CONDONATION OF DELAY IN FILING)
Date : 19-08-2021 These matters were called on for hearing today.
(Before A.M. Khanwilkar and Sanjiv Khanna, JJ.)
For Petitioner(s) Mr. Sharan Singh Thakur, AAG
Mr. Rajeev Kumar Dubey, Adv.
Mr. Ashiwan Mishra, Adv.
Mr. Kamlendra Mishra, AOR
For Respondent(s) Ms. Ruchira Gupta, Adv.
Mr. Anurag Sharma, Adv.
Ms. Akanksha Sisodia, Adv.
Mr. Shishir Deshpande, AOR
UPON hearing the counsel the Court made the following
ORDER
8. Delay condoned.
9. Leave granted.
10. The appeal is partly allowed in terms of the signed order.
11. Pending applications, if any, stand disposed of.
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