Posted On by &filed under High Court, Punjab-Haryana High Court.


Punjab-Haryana High Court
Food Corporation Of India vs M/S. Khurana And Co. on 4 October, 2000
Author: J Khehar
Bench: J Khehar


ORDER

J.S. Khehar, J.

1. This order will dispose of R.S.A.No. 3584 of 1999 and R.S.A. No. 3629 of 1999.

2. The Food Corporation of India (hereinafter referred to as ‘the FCI’) executed a contract with M/s. Khurana and Co., whereby M/s. Khurana and Co. was awarded handling and transport contract commencing from 28.9.1985 and expiring on 27.9.1986. It was also provided in the aforesaid contract that the period thereof could be extended by 3 months by the FCI.

3. M/s. Khurana and Co. continued to honour the contract till 22.9-1986, whereafter the FCI had to engage an alternative contractor to discharge the responsibility vested in M/s. Khurana and Co. for handling and transportation purposes under the contract.

4. After the expiry of the contract on 27.9.1986, it is

the case of the FCI that the contract was further extended for a period of 3 months as stipulated in the contract itself.

5. Learned counsel for the FCI has vehemently argued that M/s. Khurana and Co. was liable for the Provident Fund deposited by the FCI in respect of the employees who were liable to be engaged by M/s. Khurana and Co. and also for engaging alternative contractor during the duration it did not discharge its obligation under the contract, i.e. with effect from 23.9.1986 till 27.9.1986, and thereafter also for the extended period of 3 months which expired on 28.12.1986.

6. The trial Court as well as the lower appellate Court have both arrived at a concurrent finding of fact that there was no material on record to conclude that the contract was ever extended by the FC! beyond 27.9.1986. The Courts have also arrived at a concurrent finding of fact that it could not be established by the FCI that any Provident Fund deposit had been made by it in lieu of the employees engaged by M/s. Khurana and Co. Even during the course of arguments in this case, learned counsel for the FCI has not been able to bring to the notice of this Court any evidence to establish that either the contract had been extended by the FCI beyond 27.9.1986 for a period of 3 months i e. upto 28.12.1986: or that any Provident Fund had been deposited by the FCI in lieu of the employees engaged by M/s. Khurana and Co. I, therefore, find no infirmity in the orders of the Courts below, insofar as their aforesaid conclusions are concerned.

7. Learned counsel for M/s. Khurana and Co. has primarily based his submissions on the provisions of Sec lion 34 of the Code of Civil Procedure and has strongly contested the determination of the lower appellate Court in awarding interest at the rate of 12% per annum. Although Section 34 of the Code of Civil Procedure vests in a civil Court discretion of awarding interest as it considers appropriate from the date of filing of the suit till the date of the decree, yet so far as the interest beyond the date of the decree is concerned, a maximum of 6% interest per annum can be awarded if there is no subsisting contract between the parties stipulating the interest payable. It is not disputed by the learned counsel for the parties that there is no stipulation of the rate of interest payable insofar as the present contract is concerned. Accordingly. I find the submission made by the learned counsel for M/s. Khurana and Co. to be justified to the extent that the rate of interest payable beyond the date of decree can only be 6% per annum and not in excess thereof as there is no specific stipulation on the rate of interest in the contract executed between the parties. In the aforessaid view of the matter, while the rate or interest at the rate of 12% is reaffirmed till the date of decree, the rate of interest after the date of decree is modified to 6% per annum.

8. The second submission made by the learned counsel for M/s. Khurana and Co. is that the trial Court arrived at the conclusion that there was no violation of the handling and transport contract at the hands of M/s.

Khurana and Co. and thus viewed M/s. Khurana and Co. could be vested with any liability, whatsoever. A perusal of the evidence examined by the Courts below further leads to the conclusion that the contract was to expire on 28.9.1986 and that M/s. Khurana and Co. did not perform its obligation of handling and transport contract after 22.9.1986. In the aforesaid view of the matter it would not be correct to arrive at the conclusion that M/s. Khurana and Co. had fully discharged its obligation under the contract.

9. For the reasons recorded above, the appeal preferred by the FCI (RSA No. 3584 of 1999) is dismissed, whereas the appeal preferred by M/s. Khurana and Company and another (RSA No 3629 of 1999) is accepted to the limited extent that the rate of interest payable beyond the date of the decree shall be 6% per annum instead of 12% per annum as held by the lower appellate Court.

10. Appeal dismissed


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