Ramachandran Nair v. T. Sasikumar

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN SATURDAY, THE 17TH DAY OF DECEMBER 2016/26TH AGRAHAYANA, 1938 AS.No.743 of 1998 (A) ----------------------AGAINST THE JUDGMENT & DECREE IN OS 667/1991 of PRL.SUB COURT, KOTTAYAM DATED 11.4.1997 APPELLANT : DEFENDANT :- --------------------- RAMACHANDRAN NAIR, S/O.BHASKARAN PILLAI, GOVT.SERVICE, RESIDING AT VELUTHEDATHUPARAMBIL AYMANAM VILLAGE, KUDAMALOOR KARA. BY ADVS.SRI.JOHN JOSEPH VETTIKAD SRI.SABU GEORGE RESPONDENT : PLAINTIFF : --------------------T.SASIKUMAR, S/O.S.THANKAPPAN PILLAI, RESIDING AT 'AJAYABHAVAN', T.D.ROAD, KOTTAYAM. THIS APPEAL SUIT HAVING BEEN FINALLY HEARD ON 13-10-2016, THE COURT ON 17-12-2016 DELIVERED THE FOLLOWING: ## **V.CHITAMBARESH & ANIL K.NARENDRAN, JJ. -------------------------------------------------------A.S.No.743 of 1998** ## **-------------------------------------------------------Dated this the 17[th] day of December, 2016** ## **JUDGMENT** ## **Anil K.Narendran, J.** The appellant is the defendant in O.S.No.667/1991 on the file of the Principal Subordinate Judge's Court, Kottayam a suit filed by the respondent herein for recovery of a sum of ₹79,237.55 together with interest at the rate of 18% per annum from 20.12.1990 till realisation with costs. The trial court by the judgment dated 11.4.1997 decreed the suit allowing the plaintiff to recover from the defendant a sum of 88,357.55 with interest₹ on 79,237.55 at the rate of 18% per annum from 7.8.1991 till₹ 10.4.1997 and thereafter at the rate of 6% per annum till realisation. The defendant made a counter claim for a sum of ₹35,000/-, which was rejected in the absence of any reliable evidence. Feeling aggrieved by the judgment and decree of the trial court, the appellant/defendant is before this Court in this appeal. A.S.No.743 of 1998 2 2. Going by the plaint averments the plaintiff and the defendant had entered into an agreement whereby the plaintiff undertook to construct a residential building for the defendant. On 5.3.1989, the defendant accepted the rates quoted by the plaintiff. The plaintiff completed the construction of the structure of the building and the total cost of the work comes to ₹1,50,237.55. However, the defendant who undertook to make payment according to the progress of the work, paid only ₹71,000/-. Thus a balance amount of 79,237.55 is due to the₹ plaintiff. The plaintiff, could not complete the construction because of the failure on the part of the defendant in performing his part of the contract. Therefore the plaintiff filed the suit for recovery of a sum of 79,237.55 from the defendant together₹ with interest at the rate of 18% per annum from 20.12.1990, the date on which the plaintiff furnished the statement of accounts to the defendant. 3. The defendant filed written statement contending that the plaintiff had agreed to construct the building for 1,75,000/-,₹ A.S.No.743 of 1998 3 within a period of one year. But he could not complete the work within the stipulated period and as such time was extended by six months. Even thereafter the progress in executing the work was slow. On 8.4.1990, an agreement was executed between the plaintiff and defendant whereby the plaintiff had agreed to complete the construction of the building at a cost of less than ₹1,75,000/-. According to the defendant, as he had made arrangements to supply wooden items, the plaintiff had agreed to deduct the cost of wooden items from the total amount of ₹1,75,000/-. The defendant had paid a sum of 60,000/- to the₹ plaintiff by way of cheques and a further sum of 46,000/- in₹ cash, out of which for an amount of 35,000/- no receipt was₹ issued by the plaintiff. Further, the plaintiff used teak wood supplied by the defendant at a cost of 3,560/-. On 5.12.1990,₹ the defendant caused to issue a lawyer notice to the plaintiff demanding settlement of accounts and to complete the work on or before 31.12.1990. In spite of receipt of that notice, the plaintiff did not complete the work. Instead, on 20.12.1990, the A.S.No.743 of 1998 4 plaintiff prepared a bill for 1,50.237.55 and handed it over to₹ the defendant. As the plaintiff failed to complete the construction, the defendant completed the construction by engaging another person for which he had to spent 1,26,538.50. Thus, the₹ defendant had to spent a sum of ₹69,886.50 above ₹1,75,000/-, the amount agreed to by the plaintiff to complete the construction. Therefore, the defendant raised a counter claim for a sum of ₹69,886.50 together with ₹5,000/for the inconvenience caused to him due to the delay in completing the construction of the building. 4. The plaintiff filed a replication contending that he had not undertaken to construct the building at a total cost of ₹1,75,000/and that, there was no agreement that the construction would be completed within one year. The plaintiff has also denied the execution of an agreement on 8.4.1990 for the construction of the building and also the alleged agreement for supply of wooden items by the defendant. The plaintiff has also contended that he was not paid ₹1,06,000/- by the A.S.No.743 of 1998 5 defendant and there was no payment of 35,000/- by cash, as₹ stated in the written statement. The plaintiff has also denied the averment that the defendant has got the construction of the building completed by spending ₹1,26,538.50 by engaging another person. Therefore, the plaintiff contended that the counter claim made by the defendant is liable to be dismissed with costs. 5. Before the trial court Exts.A1 to A7 were marked and PWs.1 to 4 were examined on the side of the plaintiff. On the side of the defendant, Exts.B1 to B19 were marked and DWs.1 to 6 were examined. Exts.C1 to C4 were marked as Court Exhibits. 6. After considering the pleadings and evidence on record the trial court came to the conclusion that there was no agreement between the plaintiff and the defendant for construction of the building at a cost of 1,75,000/-. After₹ considering the oral evidence of the defendant, who was examined as DW.1, the trial court found that the plaintiff had done all the items of work as mentioned in Ext.A2 bill and that, A.S.No.743 of 1998 6 the plaint claim is only the cost of the work done by the plaintiff. Regarding the plea of discharge as to payment of 35,000/- by₹ cash, the trial court found that such a claim made by the defendant is false. In the absence of any reliable materials the trial court has also rejected the case of the defendant as to supply of wooden items and accordingly the claim for the value of the wooden items supplied was also turned down. 7. The trial court found that the total cost of the work done by the plaintiff is 1,50,237.55, out of which the defendant₹ has paid only 71,000/-. As such the plaintiff is entitled for the₹ balance amount of 79,237.55 together with interest at the rate₹ of 18% per annum from 20.12.1990. Regarding the excess amount alleged to have been received by the plaintiff and also the cost alleged to have been incurred by the defendant for completing the construction of the building, the trial court found that, in the absence of any finding that the plaintiff had agreed to complete the construction of the building for a total cost of ₹1,75,000/-, the defendant is not entitled to recover any amount A.S.No.743 of 1998 7 from the plaintiff even if it is assumed that he had to spent ₹1,26,000/- for completion of the construction of the building. 8. The pleadings and evidence on record would show that the defendant has not denied the fact that he had entered into an agreement with the plaintiff on 5.3.1989, whereby the plaintiff had agreed to construct a residential building for him. Though the defendant contended that, on 8.4.1990 the parties have entered into an agreement by which the plaintiff undertook to construct the building for less than 1,75,000/-, no reliable₹ materials were produced before the trial court in order to substantiate the said contention. Ext.A1 is the rates quoted by the plaintiff for the construction of the building. The genuineness of Ext.A1 document was not disputed by the defendant. Ext.A1 contains an endorsement made by the defendant to the effect that, “accepted and permitted to start the work”. Ext.A1 document would prove that the contract between the parties was not to do the construction work for a specified amount, but on payment of the amount calculated on the rate quoted in Ext.A1. A.S.No.743 of 1998 8 9. Relying on Ext.B4 the defendant contended that, there was a subsequent contract between the parties on 8.4.1990 by which the plaintiff undertook to complete the construction at a total cost of 1,75,000/-. The plaintiff disputed the genuineness₹ of Ext.B4, which is a piece of envelope, which bears the signature of the plaintiff and the defendant. There is also an endorsement made by the defendant to the effect that the plaintiff undertook to construct the building at a cost of ₹1,75,000/-. After considering the facts and circumstances of the case, in the light of the oral evidence on record, the trial court arrived at a finding that Ext.B4 is not a genuine document, which cannot be acted upon merely for the reason that it contains the signature of the plaintiff. 10. As noticed by the trial court, even a cursory look at Ext.B4 will lead to a conclusion that it is a fabricated document, since much effort has been made to accommodate the contents of the document above the signature of the defendant. Further, the contents of Ext.B4 were written after erasing what has been A.S.No.743 of 1998 9 originally written. Therefore, it was in the absence of any reliable materials to contradict Ext.A1 that the trial court rejected the case of the defendant as to the alleged agreement on 8.4.1990, by which the plaintiff undertook to complete the construction at a cost of 1,75,000/-. The finding of the trial court in this regard is₹ neither perverse nor legally unsustainable, warranting an interference in this appeal. 11. The plaintiff claimed 1,50,237.55 towards the cost of₹ the work he had undertaken. Per contra, the defendant contended that the cost of the construction made by the plaintiff is only 80,835.50, including the cost of the wooden items₹ supplied by the defendant worth 12,438/- and as such, the₹ plaintiff is entitled only for 68,487.50. Ext.A2 is the bill issued₹ by the plaintiff to the defendant, which contains an endorsement made by the defendant as to its receipt. 12. During trial, the defendant put forward a case that, the size of the building constructed by the plaintiff was less than the size mentioned in Ext.B1 plan. As noticed by the trial court, in A.S.No.743 of 1998 10 Ext.B1 plan there are corrections in the measurements of the rooms. Ext.B11 is the estimate prepared by DW.4 Kuttappan, who alleged to have completed the construction of the building as entrusted by the defendant. In Ext.B11 the measurements are seen altered. In such circumstances, the trial court cannot be found fault with in not accepting the case put forward by the defendant, relying on Ext.B11 estimate. The defendant as DW.1 has admitted that the plaintiff had undertaken all the items of work mentioned in Ext.A2 bill and that, the plaint claim is only the cost of the work undertaken by the plaintiff, as per the said bill. It was after considering the pleadings and evidence on record that the trial court arrived at a conclusion that the plaintiff had undertaken the construction in accordance with Ext.B1 plan. 13. According to the plaintiff, he received only 71,000/-₹ from the defendant. Per contra, the defendant contended that he paid sum of 1,06,000/-, out of which the plaintiff has not issued₹ receipt for 35,000/-. In order to substantiate the said contention₹ the defendant relied on Exts.B5, B7 and B10 letters. In Exts.B5 A.S.No.743 of 1998 11 and B7 letters the plaintiff has stated that he would issue receipts for the amount for which no receipts have been issued. However, it has to be noticed that in Ext.A3 notice issued by the defendant he had no complaint as to non-issuance of receipts for any amount already paid to the plaintiff. Regarding the alleged nonissuance of receipt for 35,000/- the version of DW5, the mother₹ of the defendant was even contrary to the stand taken by the defendant. It was in such circumstances that the trial court concluded that the claim of the defendant as to non-issuance of receipt for 35,000/- paid to the plaintiff is false.₹ 14. According to the defendant, he had supplied wooden items for the construction of the building and as such he is entitled to deduct the cost of wooden items from the amount due to the plaintiff. The fact that the plaintiff undertook to fix the wooden items under the original contract is not in dispute. The defendant could not produce any materials to prove any change in the contract, other than his oral testimony as DW.1 and that of his mother and neighbour as DWs.5 and 6, who have deposed A.S.No.743 of 1998 12 that certain Anjili tree, jack tree, etc. were cut down from the property of the defendant, his mother and uncle and the timber was used for the construction of the building. Though Dws.5 and 6 deposed that it was the defendant who had engaged a carpenter to make the frames and shutters of the windows and doors, the said carpenter was not examined before the trial court. Further, in Ext.A3 notice the defendant has no case as to the supply of Anjili tree and jack tree for the construction of the building. It was in the absence of any reliable materials that the trial court rejected the claim of the defendant that it was he who supplied timber to the plaintiff for the construction of the building. 15. According to the defendant, the plaintiff who undertook to construct the building at a cost of 1,75,000/-₹ stopped the construction in the middle of the work and he had to get the work completed by DW.4 by spending 1,26,538.50. As₹ such, the defendant had to spent a total sum of 2,44,886.50₹ and accordingly he prays for recovery of 69,886.50 from the₹ A.S.No.743 of 1998 13 plaintiff and a further sum of 5,000/- as compensation for the₹ inconvenience caused. As rightly found by the trial court, in the absence of any agreement by the plaintiff to complete the construction for a total sum of 1,75,000/-, the claim made by₹ the defendant in this regard cannot be sustained, even if it is assumed that he had to spent a sum of 1,26,000/- for the₹ completion of the building. Further, after considering the evidence of DW.4 Kuttappan with reference to Ext.B13 statement prepared by him as to the work undertaken by the plaintiff, the trial court found that the calculation made by DW.4 cannot be the basis for granting the relief to the defendant. It was in such circumstances that the trial court rejected the counter claim made by the defendant and we find absolutely no grounds to interfere with the said finding of the trial court. 16. Section 3 of the Interest Act, 1978 deals with the power of the Court to allow interest. As per sub-section (1) of Section 3 of the said Act, in any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for A.S.No.743 of 1998 14 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 periods enumerated in clauses (a) and (b) of that sub-section. 17. In **M/s.MSK Projects (I) (JV) Ltd. v. State of Rajasthan (2011 (10) SCC 573)** the Apex Court held that, the provisions in Section 3 of the Interest Act empower the Court to award interest at the rate prevailing in the banking transactions. Thus, impliedly, the Court has a power to vary the rate of interest agreed by the parties. 18. In the instant case, the trial court decreed the suit granting interest at the rate of 18% per annum from 7.8.1991 till 10.4.1997 and thereafter at the rate of 6% per annum till realisation. The rate of interest granted by the trial court from the date of suit till the date of decree is on a higher side, considering the rate of interest prevailing at that point of time in A.S.No.743 of 1998 15 the banking transactions. Considering the facts and circumstances of the case, we deem it appropriate to scale down the rate of interest from 18% per annum to 9% per annum from 7.8.1991 till the date of decree and thereafter at the rate of 6% per annum till realisation. In the result, this Appeal Suit is disposed of modifying the judgment and decree of the trial court to the extent of reducing the rate of interest from 7.8.1991 till the date of decree as 9% per annum, as against interest at the rate of 18% per annum awarded by the trial court. The judgment and decree of the trial court is confirmed in all other respects. No order as to costs. Sd/- ## **V.CHITAMBARESH, JUDGE** Sd/- **ANIL K.NARENDRAN, JUDGE** skj True copy P.A to Judge