Gujarat High CourtAssociated Construction And ... vs Dhanlaxmiben And Anr. on 24 April, 1996Equivalent citations: AIR1997GUJ39, (1997)1GLR256, AIR 1997 GUJARAT 39, (1997) 2 CIVLJ 335, (1998) 1 CIVILCOURTC 246, (1996) 2 MAD LJ 505, (1998) 2 BANKCAS 159, (1997) 1 GUJ LH 256JUDGMENT1. The plaintiff firm filed Civil Suit No. 740 of 1975 against the defendants for recovery of Rs. 42,859.64 ps. with costs and interest on following brief facts alleged in the plaint,2. The plaintiff No. 1 is a partnership firm in which plaintiff No. 2 is one of the partners. The defendant No. 1 is the defendant No. 2's wife. The defendants had a plot of land described in the plaint. They wanted to construct building and, therefore, after some amount of communication with the plaintiffs they entered into contract with plaintiffs regarding construction of Bungalow in the said plot of land. All printed quotation/sheet with estimates and quantity as well as rates of different items of construction had been attached with the contract. On February 4, 1975 the plaintiffs sent by Registered Post the bill of cost of construction to the first defendant. The second copy of the bill was sent on February 9, 1975. As per the said bill the cost of construction came to Rs. 63,435.29 ps. However, the items of the compound wall, the construction below the partitions and the items of difference in the value between the cost of send-face plaster and shagol-finishing were not included in those bills, as measurements and calculations of those items were not done by that time. The plaintiffs, therefore, stated to have reserved their right to give

supplementary bill for such items. Besides, the building material worth Rs. 8950/- belonging to the plaintiffs were lying at the site of the Suit Bungalow. However, the defendants did not permit them to complete the construction work so that such materials could be used. According to the plaintiffs if the defendants did not pay the cost of construction as and when the construction progressed, the defendant would be liable to pay interest and accordingly a sum of Rupees 424.35 ps, was added as interest. Accordingly as per the bills sent by the plaintiffs and after deduction of the amount paid by the defendants the decree for Rs. 42,859.64 ps. was claimed.3. The defendants filed leave to defend Ex. 9 and treated the same to be their written statement as per Ex. 25. While denying the allegations contained in the plaint the defendants asserted that the plaintiffs included the expenses of constructing privy, drainage, bath-room, etc., although none of such itmes of work had been carried out by the plaintiffs. Even windows were not fixed with shutters and the doors were not polished. According to the defendants the materials were already removed by the plaintiffs, although such materials were purchased by the plaintiffs at the cost of defendants. The defendants therefore prayed for dismissal of the suit and awarding of compensatory cost in the sum of Rs. 1000/-.4. Following issues were framed by the learned Judge of the City Civil Court, Ahmedabad, at Ex. 33 :(1) Whether plaintiff No. (1) is a registered partnership firm and whether the person-suing is or has been shown as a partner in the Register of firms?(2) Whether the plaintiffs prove that the value bf the construction of the property was Rs. 63,435.29?(3) Whether the plaintiffs prove that the defendants paid to them Rs. 21,000/- only towards the value of the construction?(4) Whether the plaintiffs are entitled to get interest? If yes, at what rate, on what

amount and how much-amount of interest?(5) Whether the defendants prove that they have paid Rs. 43,750/- to the plaintiffs towards the value of construction of the property?(6) What is due, if any, by the Defendants or any of them, to the plaintiffs?(7) What decree and order?5. The learned trial Judge rendered the following findings:(1) First Part: Yes Second Part: Yes   
 

 (2) The value of the construction payable by the defendants to the plaintiffs is proved to be Rs. 54,894.67 ps.(3) The payment of Rs. 22,000/- is proved to have been made by the defendants to the plaintiffs.(4) No. They are not entitled to get interest up to the date of the decree.(5) Same as on Issue No. 3(6) As per final decree   
 

 (7) As per final decree.6. As a result of the aforesaid findings the learned trial Judge passed the following operative order:"The defendants do pay to the plaintiffs and the plaintiffs do recover from the defendants, a sum of Rs. 32,894.67 ps. (Rupees thirty two thousand eight hundred ninety four and paise sixty seven only) with interest thereon at six per cent per annum from the date of this decree till payment. There shall be no order as to costs."7. It is the aforesaid Judgment and Decree dated 18-11-1978 which has been brought under challenge both by the plaintiffs and the defendants in this Appeal and the Cross-Objections respectively;8. I have heard the learned Counsels for the parties. The submissions made by them may be dealt with.9.   The learned Counsel for the appellant

mainly agitated the interest having not been awarded till up to the date of Decree. He, however, had formally read evidence with regard to the items of claim not allowed by the learned trial Judge and submitted that the learned trial Judge ought to have believed the evidence adduced on behalf of the plaintiff by allowing all the items of the bills. He placed reliance upon Ex. 48 which is a composite bill consisting of two bills/two part of the bills. Therefore, the question with regard to whether the plaintiffs proved all the items of the bill Ex. 48 shall have to be decided in this appeal, over and above the question of interest. The learned Counsel appearing for the defendant replied on all the points, by relying upon the reasonings given by the learned trial Judge. He, however, claimed further reduction in the decretal amount by a sum of Rs. 20,000/-, as according to the defendants the learned trial Judge did not rightly disbelieve the evidence of the defendants with regard to additional payment of Rs. 20,000/-.10. Having heard the learned Counsels for the parties, I find that following points for determination arise in this appeal:1. Whether the plaintiffs have proved their composite bill Ex. 48 entirely?2. Whether the defendants have established their additional payment of Rs. 20,000/-?3. Whether the plaintiffs would be entitled to interest till up to the date of decree?4. What should be the order in this appeal read with cross-objections?11.    POINT NO. 1:The first two items which have not been entertained by the learned trial Judge are items Nos. 17and 18 of Bill No. 1. They relate to flooring tiles. The quotation for flooring tiles at item No. 20 in the quotation sheet accompanying the contract Ex. 83 in terms speaks about the tiles of cement mosaic with fixing and polishing with its rate at Rs. 280 per brass i.e. Rs. 280/per 100 sq. ft. Referring to the bills the learned trial Judge has found that the item of flooring tiles and item of

flooring tiles with cement mosaic fixing and polishing in white cement has been split up into items Nos. 17 and 18. The learned trial Judge has set out the quantity of the items and has worked out the amount of Rs. 2,458.44 ps. claimed in the bills. The learned trial Judge has then taken up the evidence with regard to these items. The discussion of the evidence with regard to these items has remained unassailable. Accordingly, it would be appropriate to reiterate what the learned trial Judge has said in this regard. The description of the item in the quotation sheet shows that the rate quoted was inclusive of polishing the tiles. It has been admitted by the plaintiff in his deposition and it is also borne out from the Commissioner's report at Ex. 70 that at no place in the bungalow the tiles had been polished by the plaintiffs. Besides, there was a difference in the rates as between the quotation and the bills. In the quotation the rate was Rs. 280/-per 100 sq. ft. whereas in the split up of the items the rate was stated! in the bills at Rs. 325 per 100 sq. ft. Hence, the plaintiffs were certainly not entitled to these items as claimed in the bills. Further reasons for such non-entitlement were : firstly, there is no evidence to show that white cement tiles were used in contrast of any other variety of tiles, secondly there is no evidence to show that the defendant had ever agreed to pay for the tiles of different variety at different rates, and thirdly, the defendant had agreed to pay these items at a flat rate as stated above. On a reference to the Commissioner's Report Ex. 7.0 as was brought from the Civil Suit No. 357/75 which was filed by the defendants against the plaintiffs it has been found that the quantity was also not as claimed in the bills. It was 1521.92 sq. ft. (round figure of 1522 sq. ft.), the price whereof as per the flat rate stated above would come to Rs. 4621.60 ps. The learned Judge has upon appreciation of evidence worked out the amount of items Nos. 17 and 18 to be at Rs. 3886.60 ps. after considering the payment made by the defendants for polishing and other works. Accordingly, the learned trial Judge has held that the first deduction in the bill would, therefore, be of Rs. 1,152.12 ps. This can be seen from the detailed discussion of the items in the context

of evidence placed on record in para 18 of the judgment.12. Item No. 19 relates to R.C.C. staircase with regard to which the defendants asserted that the stair case contained only 17 steps and nor 18 steps as shown in the bill. After appreciating the evidence of the parties the learned Judge has believed the story of the defendants and accordingly the amount has been reduced by Rs. 60/- on this item.13. Items Nos. 21 and 22 relate to drainage line and item No. 23 relates to water pipe. According to the plaintiffs they led the water line up to the Bungalow and the drainage line inside the bungalow, whereas according to the defendants the plaintiff did not lay any water pipeline or drainage line as they claimed to have led. The learned trial Judge has upon reading of the evidence and assigning the reasons held that the defendants should succeed in full on these items. The learned trial Judge found that the plaintiffs had not led any drain line in the suit bungalow. The plaintiff were required to adduce satisfactory evidence with regard to these items in the face of clear and emphatic denial of the defendants right from the beginning. No mason, no drain layer and no plumber have been examined by the plaintiffs. No material or evidence to show the purchase of materials for these two lines has been produced by the plaintiffs. The Com-missioner's report/map Ex. 70 does not show laying of such line by the plaintiffs although the plaintiffs' another partner was present at the time of inspection by the Commissioner. Against this the defendants adduced oral evidence of defendant No. 2 saying that the defendants had got led two lines in the bungalow. This evidence has been supported by the Cash Memos and the bills for the purchase of required materials. They were placed in the record at Exs. 97 to 107. Besides, there is a receipt Ex. 96 showing the payment of Rs. 430/- to labourer for laying down the drain line. Repelling the arguments of the learned Counsel for the plaintiff that the defendant had been running the school in the suit bungalow right from June/July, 1974 and the students studying in the school would

require to use a bath and lavatory and such use could not have been made unless there was facility of the drainage and waterline. It has been held that the argument was without foundation and that defendant No. 2 had been running the school since June/July 1974, but no further evidence has been adduced to take the fact further. Thus, upon fullest appreciation of evidence the learned trial Judge came to the conclusion that plaintiff would not be entitled to the amount of drainage line and water line and accordingly the defendants would be entitled to a deduction of Rs. 1200/ -. The learned trial Judge has also come to the conclusion that the plaintiffs having removed the water meter could not charge the defendants for the value thereof and, therefore, the claim of Rs. 150/- in that respect was not-grantable.14. Item No. 34 is for fixing the door-frames and in Para 26 of the judgment the learned tral Judge has disallowed this item after referring to the bill and the quotation and comparing the two items in respective documents. The learned Judge has held that if really the plaintiff has to charge extra amount for fixing the door-frame they would never have to mention that fact in the quotation sheet. Hence, the amount of Rs. 370/- in item No. 34 was disallowed.15. At item No. 35 of the first bill, the plaintiffs claimed Rs. 1500/- as charges for preparing the plans, designs, N. A. plans, calculations and for cement permits and for preparing revised plans, etc. Reference was made to the contract between the parties and it was found that the plaintiff would not be entitled to claim such charges, but the defendant No. 2 admitted to have agreed to pay sum of Rs. 500/- for such services. After appreciating the oral evidence of the plaintiffs and the defendants, the learned trial Judge held that he would decree only Rs. 500/-under this head and would reduce the amount of that entry by Rs. 1000/-.16. Then there are two items Nos. 36 and 37 respectively of Rs. 50/- and Rs. 60/- by way of expenses for Khat Mahurat and Vastu Poojan, in respect of which the defendants' evidence was that the expenses were incurred

by defendant No. 2 himself for these ceremonies. Accepting this evidence the learned trial Judge disallowed these two items.17. Item No. 38 being the amount of Rs. 165/- as water connection charges is disallowed as part of claim under item No. 23 which has been wholly disallowed.18. The last item of the first bill which has been disallowed is item No. 39 for Rs. 837/-under the head of difference in rate. The learned trial Judge has discussed the evidence on this point and relying upon the admission of the plaintiff in the cross-examination that there was no agreement between the parties for paying the difference in price, this claim has been disallowed.19. The sum total of the hems of first bill of Ex. 48 which have been disallowed may be reproduced from para 30 appearing at page 45 of the judgment:Sr. No.
  
   
   

Item No. of Bill No. (1)
  
   
   

Amount Disallowed
  
 
  
   
   

I.
  
   
   

17 &18
  
   
   

Rs. 1,152.12 ps.2.19Rs.60.003.21Rs. 322.00422Rs. 600.005.23Rs. 1,200.006.32Rs. 150.00734Rs. 370.008.35Rs. 1,000.009.
  
   
   

36 & 37
  
   
   

Rs. 110.0010.38Rs. 165.0011.39Rs. 837.00 
   
 
  
 
 
   
Rs. 5,966. 12ps.20.   As regards the second bill the following items have been allowed to be reduced:(1) Rs. 250/-(2) Rs. 75/-(3) Rs. 832/-(4) Rs. 1417.50    
 

 totalling to Rs. 2574.50 leaving the balance of awardable amount to Rs. 5300.50 ps. instead of Rs. 7,875/-. In paras 31 to 33 the learned trial Judge discussed the evidence adduced before him, in respect of the items of supply of door-framing, windows and shutters, door

gaps, steel, section windows and supplying of fitting of doors and shutters. Referring to the evidence adduced on this point and appreciating the same in the context of the bills canvassed by the plaintiffs the learned trial Judge has come to the conclusion that the defendant would be entitled to the reduction as aforesaid.21.   In para 34 the learned Judge has worked out the amount which could be awarded to the plaintiffs. Such amount of both the bills would come to Rs. 54,894.67 ps.22. I have extensively heard the learned counsel for the appellant on the evidence placed on record, but the learned counsel for the appellant has not been able to show any infirmities in the reasons assigned and the conclusions drawn by the learned trial Judge for the reductions from the bills in question as stated above. The learned trial Judge has seen the parties deposing before him and unless some material is pointed out from their evidence so as to come to the conclusion that particular item is erroneously or wrongly allowed to be deducted it cannot be found that the learned trial Judge has committed any error in making deduction on various items as aforesaid.23. In the result the first point shall have to be answered against the appellants (plaintiffs).24. Although the plaintiffs have not much agitated the question with regard to the payment it has to be stated that upon appreciation of evidence the learned trial Judge has held that only an amount of Rs. 1,000/-should be adjusted against the admitted payment of Rs. 23,000/-.25. That takes the matter to the consideration of the submissions of Mr. R.N. Shah, the learned counsel for the defendant on the cross-objections. The relevant discussion with regard to this point may be noticed from para 37 of the judgment. Accordingly, as per the plaintiffs, the defendants had paid to them only Rs. 23,000/- by borrowing that amount from the Ahmedabad Peoples Cooperative Bank and nothing more, whereas according to the defendants an additional

sum of Rs. 20,000/- was paid in cash by four different payments of Rs. 5,000/- on June 2, 1973, August 1, 1973, January 7, 1974 and on February 3, 1974. The learned trial Judge has examined the question, and in my opinion, rightly, from the stand point of the burden of proof being on the defendants. The learned trial Judge has rightly held that the defendants failed to discharge the burden bearing in mind the circumstances that no receipt or writing for each of these documents has been obtained although the defendant No. 2 used to obtain such receipts or writings for payments being made by him and that defendant No. 2 being highly educated person could not have made payment in cash without obtaining receipt or writing for such big sum, particularly when his counter-part did not miss to obtain writing in the matter of small loan of Rs. 750/-. The arguments canvassed on behalf of the defendants were not accepted by the learned trial Judge, and rightly, on account of the aforesaid features of the evidence placed on the record of the case. Hence, this point raised  in the cross-objections deserves to be negatived.26.    The last question raised by the learned counsel for the appellants pertains to interest up to the date of decree.At first, it was submitted that by virtue of the provisions contained inSection 34of the Code of Civil Procedure, the learned trial Judge had discretion in the matter of rate of interest and not on the question whether to allow or not at all to allow the claim of interest. Reference in this connection was made to a decision of the Hon'ble Supreme Court in the case ofUnion of India v. Watkins Mayor & Co., reported in AIR 1966 SC 275. In para5 of the citation, it has been observed that interest may be awarded for the period prior to the date of the institution of the suit when there is an agreement for the payment of interest at fixed rate or when interest is payable by the usage of trade having the force of law, or under the provisions of any substantive law, as for instance, underSection 80of the Negotiable Instruments Act, 1881, when no rate of interest is specified in the promissory note or bill of exchange, the Court may

award interest at the rate of 6 per cent per annum. It is no doubt true that interest may be awarded as per the contract between the parties. In the present case there is no reference to the award of interest from the very inception. This can be seen from the following paragraphs reproduced from the judgment of the learned trial Judge. The question is whether there is discretion in the Court for allowing or not at all allowing interest prior to the date of decree. Reference in this connection has been made toSection 34of the Code of Civil Procedure, which deals with interest from the date of the suit up to and after the date of the decree.Section 34would read as under:34. (1) Where arid 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:[Provided 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.Explanation I: In this sub-section, "nationalised bank" means a corresponding new bank as defined in theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970(5 of 1970).Explanation II: For the purpose of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability].(2) Where such a decree is silent with respect to the payment of further interest

on such principal sum from the date of the
decree to the date of payment or other earlier
date, the Court shall be deemed to have
refused such interest, and a separate suit
therefor shall not lie.the proviso and the explanations to the proviso were added by the Amendment Act, with effect from 1-1-1997. However, the operative portion of the provisions as contained in Sub-section (1) and Sub-section (2) clearly go to indicate that the discretion in the Court vested under the said provision is not only with regard to the rate of interest, but it is with regard to whether the interest should be awarded or not. The discretion is two fold, the Court may award interest and may award such interest at such rate as the Court feels it reasonable to be awarded on the principal amount adjuged from the date of the suit till 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 6 per cent per annum as the Court deems it 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. Where the interest is not awarded at all subsequent to the date of decree the same shall be deemed to have been refused by the Court as per Sub-section (2). Even the Apex Court has observed in the case ofState of Madhya Pradesh v. Nathabhai Desaibhai Patel, reported in AIR 1972 SC 1545, that the question, whether the interest should be awarded on the principal amount claimed from the date of the suit, is within the discretion of the Court. The submission, therefore, that the Court has to award interest and the discretion is only with regard to rate of interest cannot be accepted.27. It has then been submitted that there was a contract of interest as reflected by the condition in the bills in question and, therefore, the learned trial Judge has erred in not awarding the interest prior to the date of the suit. Here also, in my opinion, the learned trial Judge has given cogent reasons as to why such interest could not be awarded to the plaintiff. It would be useful to reproduce

the relevant paragraphs from the judgment of the learned trial Judge on this point also. It has been submitted that the learned trial Judge has erred in not exercising his discretion judicially. In my opinion, the learned trial Judge has quite judicially and appropriately exercised the discretion in not awarding the interest up to the date of decree. The excellence of the reasoning for not awarding the interest prior to the date of decree might be noticed from the portion of the judgment of the learned trial Judge which may now be excerpted:"This then takes me to the question of interest. The agreement or the contract, Ex, 83, says that the defendants would be liable to pay twelve per cent interest on that amount of the bill if the amount of the bill is not paid within fifteen days from the receipt of the Bill. The evidence very clearly shows that the Bill Ex. 48 was, for the first time, received by the defendants on February 12, 1975; but soon after the receipt thereof, on February 21, 1975, the defendants through their Advocate, sent a provisional reply and disputed the correctness of the Bill. It must be remembered that in the bill as was sent by the plaintiffs to the defendants, the plaintiffs had not given credit for the amount of Rs. 23,000/- or even in that matter, the amount of Rs. 21,000/- towards the value of costs of construction and the bill purported to say that the defendants had to pay to the plaintiffs, a total sum of Rs. 63,435.29 ps. This was certainly not the correct statement. Even on the plaintiffs' own showing, on the date the bill was sent, the defendants owed to them, in no case, more than Rs. 43,000/-, and yet, the claim in bill was for Rs. 63,000/- and odd. The defendants were, therefore, not liable to honour the bill or pay the value as stated therein. It was for the first time in their reply dated March 5, 1975 (Exh. 145) that the plaintiffs stated that they were giving credit of Rs. 21,000/ - against the value of the Bill. This, reply dated March 5, 1975, would have reached the defendants, earlier, on March 6, 1975, and, without allowing even a fortnight to pass, the plaintiffs filed the present suit, on March 14, 1975. The plaintiffs, in my opinion, are therefore not entitled to claim any interest

prior to the suit on the amount found due to them from the defendant.40. So far as the interest pendente lite is concerned, there also, I think, no interest should be allowed to the plaintiffs. The simple reason is that, as shown earlier, Bill, Ex. 48, is an exaggerated Bill. Though, admittedly, certain items of work had not been executed, e.g. tiles polishing, and such other items, and certain shutter-doors had not been affixed, and, even though in certain area tiles had not been fixed and, yet, in the Bill, Ex 48, charges for alt those items of work had been levied. It is only after the scrutiny by the Court that the correct amount due and payable by the defendants to the plaintiffs could under the circumstances, be ascertained. In that view of the matter, I think, even for pendency of the suit, no interest should be awarded to the plaintiffs, and, on the same line of reasoning, should be decided the question of costs. As the suit claim is an exaggerated claim and is based upon a Bill Which admittedly contained certain wrong items, the parties should be left to bear their own costs. So far as interest, after the date of the decree, I think, the usual rate of six per cent, from the date of decree till payment, should prevail."28. In the result both, the appeal and the cross-objections, should fail. They accordingly stand dismissed with no order as to costs.