# STATE OF RAJASTHAN v. RAGHUVEER SINGH & ORS

- **Citation:** [1979] 3 S.C.R. 6
- **Court:** Supreme Court of India
- **Decided:** 1979-02-05
- **Case number:** Civil Appeal No. 2008 of 1969
- **Bench:** R. S. Sarkaria, 0. Chinnappa Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-rajasthan-v-raghuveer-singh-ors-7665
- **Pages:** 6

## Headnote

Interest Act 1839 (32 of 1839)-Suit for recovery of aniount due in respect of building contract-Claim if a "sum certain" under the Act,
Notice oj demand for payment clain1ing "los.r by way of intcrest"-If, valid
and suffecient-Notice not to be strictly construed.
The Interest Ac~ 1839 (32 of 1839) empowers the Court to allow interest
to the plaintiff if the amount claimed is a sum certain which is payable at a
certaifl time by virtue of a written instrument at lei rate not
exceeding
the
current rate of interest from the time when such amounts were payable and
if the amount ~ payable otherwise, then from the time when the demand of
payment !hall have been made in writing.
D
As the amounts due in respect of a building work! contract renl6ined unE
F
G
H
paid despite demands and notices, the re,pondent (plaintiff) filed a suit for
its recovery together with interest.
Decreeing the suit, the trial court awarded interest at 4t per cent. But in appeal, the High Court enhanced the rate
of interest pendente Ute from 4t per cent to 6 per cent.
In the further appeal to this Court it vAl• contended that the Interest Act
1839, was not applicable as no sum certain was payable and there was no
demand for payment of interest.
Dismissing the appeal,
HELD : 1. The claim was for la "sum certainl! within the meaning of the
Act. [9F]
The claim was ascertainable on a calculation made in terms of the agreement and was therefore a sum certain within the meaning of the Act. It is
"a sum of money which is now payable or will become payable in the future
by reason of a present obligation" and in any case it was not for the payment of any unliquidated damages or for the payn1ent of any amount arising
out of an inchoate obligation.
[9E-F]
2. The respondent issued hvo notices. In the second notice
it
dc;finite
claim of interest had been made by them. The term "loss
by
way
of
interest" mentioned in the first notice suggested that what was being claimed
was compensation for the damages suffered by them. The notice should not
be construed literally or technically. The mention of loss was only explann~
tory. Without any manner of doubt the respondents were claiming interest as
such. [9G-10DJ
3. Nor again ctln it be said that there was no claim for future interest.
A claim for past interest would necessarily imply a claim for future interest.
[!OE]
.
,
' t
I
RAJASTHAN v. RAGHUVEER SINGH ( Chinnappa Reddy, !.)
7
.r
Kuppusanii Pillai v. Madras Electric Tramway Co. Ltd., ILR 23 Mad. 41;
A
Sita Ram & Ors. v. Mrs. S. Sullivan, [1901] 2 Punjab Law Reporter 464; referred to.
Mahabir Prashad Rungta v. Durga Datt, [1961] 3 SCR 639 and
Union
of India v. A.. L. Rallia Ram, [1964] 3 SCR 164; distinguished.
4. Having regard to the various continuous default'5 committed
by
the
B
appe1lant and its officers the High Court
v.~i justified in enhancing the
rate
•
of interest to 6 per cent.
[1 lE]

## Text

6
A
STATE OF RAJASTHAN
B
c
v.
RAGHUVEER SINGH & ORS.
February 5, 1979
(R. S. SARKARIA AND 0. CHINNAPPA REDDY, JJ.J
Interest Act 1839 (32 of 1839)-Suit for recovery of aniount due in respect of building contract-Claim if a "sum certain" under the Act,
Notice oj demand for payment clain1ing "los.r by way of intcrest"-If, valid
and suffecient-Notice not to be strictly construed.
The Interest Ac~ 1839 (32 of 1839) empowers the Court to allow interest
to the plaintiff if the amount claimed is a sum certain which is payable at a
certaifl time by virtue of a written instrument at lei rate not
exceeding
the
current rate of interest from the time when such amounts were payable and
if the amount ~ payable otherwise, then from the time when the demand of
payment !hall have been made in writing.
D
As the amounts due in respect of a building work! contract renl6ined unE
F
G
H
paid despite demands and notices, the re,pondent (plaintiff) filed a suit for
its recovery together with interest.
Decreeing the suit, the trial court awarded interest at 4t per cent. But in appeal, the High Court enhanced the rate
of interest pendente Ute from 4t per cent to 6 per cent.
In the further appeal to this Court it vAl• contended that the Interest Act
1839, was not applicable as no sum certain was payable and there was no
demand for payment of interest.
Dismissing the appeal,
HELD : 1. The claim was for la "sum certainl! within the meaning of the
Act. [9F]
The claim was ascertainable on a calculation made in terms of the agreement and was therefore a sum certain within the meaning of the Act. It is
"a sum of money which is now payable or will become payable in the future
by reason of a present obligation" and in any case it was not for the payment of any unliquidated damages or for the payn1ent of any amount arising
out of an inchoate obligation.
[9E-F]
2. The respondent issued hvo notices. In the second notice
it
dc;finite
claim of interest had been made by them. The term "loss
by
way
of
interest" mentioned in the first notice suggested that what was being claimed
was compensation for the damages suffered by them. The notice should not
be construed literally or technically. The mention of loss was only explann~
tory. Without any manner of doubt the respondents were claiming interest as
such. [9G-10DJ
3. Nor again ctln it be said that there was no claim for future interest.
A claim for past interest would necessarily imply a claim for future interest.
[!OE]
.
,
' t
I
RAJASTHAN v. RAGHUVEER SINGH ( Chinnappa Reddy, !.)
7
.r
Kuppusanii Pillai v. Madras Electric Tramway Co. Ltd., ILR 23 Mad. 41;
A
Sita Ram & Ors. v. Mrs. S. Sullivan, [1901] 2 Punjab Law Reporter 464; referred to.
Mahabir Prashad Rungta v. Durga Datt, [1961] 3 SCR 639 and
Union
of India v. A.. L. Rallia Ram, [1964] 3 SCR 164; distinguished.
4. Having regard to the various continuous default'5 committed
by
the
B
appe1lant and its officers the High Court
v.~i justified in enhancing the
rate
•
of interest to 6 per cent.
[1 lE]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 2008
of
1969.
,-4;-
From the Judgment and Order dated 7-4-1965 of the Rajasthan
r
High Court in D. B. Civil Regular Appeal No. 67153.
' .
S. M. Jain for the Appellant.
B. D. Sharma, Ramesh Chandra and B. P. Maheshwari for the
Respondent.
The Judgme_nt of the Court was delivered by
CHINNAPPA REDDY, J.-The Staie of Rajasthan, defendant in
Civil Suit No. 9 of 1963 in the Court of the Senior Civil Judge,
Udaipur, is the appellant in this appeal filed pursuant to a certificate
granted under Article 133(1) (a) of the Constitntion of India (as
it itood prior to the 30th amendment). The plaintiff respondent took
a building work on contract from the erstwhile Government of the
State of Udaipur.
He completed the work on 6th
June,
1950.
Despite demands and notices issued by the plaintiff a considerable
amount due to him remained unpaid. He, therefore, filed the suit out
of which the appeal arises to recover a sum of Rs. 3,19,458111/-
together with interest at the rate of 12 % .
The suit was contested
by the
State of Rajasthan.
An
interim decree for a sum of
Rs. 66,517/- was passed on 7th November, 1955.
After full trial a
decree for Rs. 1,67,6191- (including the sum of Rs. 66,517 /-
for
which a preliminary decree had already been passed) was passed ou
11-6-1958/30-6-1958. The decree also awarded interest at the rate
of 4!% on the amount decreed from the date of suit till the date of
realisation.
The plaintiff and the defendant preferred appeals to the
High Court of Rajasthan.
The High Court reduced the
decreetal
amount by a sum of Rs. 9,991/-.
The High Court, however, held
that the plaintiff was entitled to interest from 1st January, 1951, and
not merely from the date of suit. The High Court also enhanced the
rate of interest pendente lite from 4!% to 6%. The
High Court
having varied the decree of the Trial Court, the State of Rajasthan
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SUPREME COURT REPORTS
[1979] 3 s.c.R.
A
sought an<l obtained a certificate under Article 133(1) \a) of
the
Constitution and has filed this appeal.
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The controversy in the High Court related primarily to (i) conveyance and lift charges; (ii) alleged double benefit in regard
to
bond-stones, lintels and sills; (iii) use of Jodhpur slabs and
their
high cost; (iv) charge for C. P. Teak wood at the same rates as for
Burma Teak.
In regard to conveyance and lift charges the
High
Court pointed out that no question was raised in the Memorandum
of grounds of appeal and there ~as, therefore, no justification for
permitting the learned Counsel for the State to assail the finding of
the Trial Court relating to those charges. We do not see any reason
either why the learned Counsel should be permitted to agitate this
question in this appeal.
Regarding double-charge for bond-stone,
lintels and sills, the complaint of the appe!Iant was that while separate
payment was being made for them, they had also been included in
the measurements of the walls in which they happened to be fixed.
From the office circular issued by the Chief Engineer of the Public
Works Department of the United State of Rajasthan on 12th July,
1948, it appears that it was the practice uptill then to allow payment
for bond-stones, lintels and sills separately without deducting their
~ubic contents from the general wa!I masonry. This had always been
the practice and this was never objected to by
the
Accountant
General. In view of the practice obtaining till then it could not be
said that the contractor had wrongfully claimed double payment for
bond-stones, lintels and sills.
The nse of Jodhpnr slabs was
not
questioned in the written statement.
All that was said
was
that
the rate was high but at the trial there was no evidence worth the
name, as observed by the High Court to show that the charge was
excessive. Again there was no objection to the use of C.P.Teak-wood
instead of Burma teak wood as the latter was not available. According to the letter of the Superintending Engineer dated 6th February,
1950, where Burma teak wood was not available and C. P. Teak
wood was used, the rates specified for Burma teak wood should be
taken for C.P. teak wood. It could not, therefore, be said that the
contractor had charged more than what he should for C.P. Teak
wood.
The last question which was argued before us
by Shri
Jain,
learned Counsel for the State of Rajasthan was that no interest should
have been awarded for the period before the filing of the suit and
that the rate of interest should not have been enhanced by the High
Court for the period subsequent to the filing of the suit. It was
..
'
;
.
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RAJASTHAN v. RAGHUVEER SINGH (Chinnappa Reddy, !.)
9
submitted that the Interest Act, 1839, was not applicable as no sum
certain was payable and there was no demand for payment of interes~.
It was argued that what was demanded by the plaintiff was damages
and not interest. It was also contended that the Trial Court having,
in exercise of its discretion, awarded interest at the rate of 4t%
pendente lite, the High Court ought not to have interfered with the
discretion of the Trial Court. Reliance was placed upon
the decision in Maha]lir Prasad Rungta v. Durga Datt(')
and
Union of
India v. A. L. Ral/ia Ram(2 ).
We are unable to agree with the submission
of the learned
Counsel for the appellant.
Under the Interest Act, 1839, "upon all
debts or sums certain payable at a certain time or otherwise,
the
Court before which such debts or sums may be recovered may, if it
shall think fit, allow interest to the creditor at a rate not exceeding the
current rate of interest from the time when such debts or sums certain
were payable, if such debts or sums be payable by virtue of some
written instrument at a certain time; or if payable otherwise, then
from the time when demand of payment shall have been made in
writing, so as such demand shall give notice to the debtor that interest
will be claimed from the date of such demand until the term of payment : provided that interest shall be payable in all cases in which it
is now payable by law".
The claim of the present plaintiff was not
for the payment of any unliquidated damages or for the payment of
any amount arising out of an inchoate or contingent obligation. It
was for the payment of a sum which was ascertainable on a calculation made in accordance with the terms of the agreement. It was
clearly a "sum certain" within the meaning of the Interest Act. In
any case it would be a debt, i.e., "a sum of money which is now payable or will become payable in the future by reason of a present
obligation".
The further question for consideration is whether the
plaintiff had made a demand of payment, "so as such demand shall
give notice that interest will be claimed from the,date of such demand
until the term of p11.yment''.
The plaintiff issued two notices to the
defendant demanding payment.
The first was on 21st December,
1950, and the second was on 5th April, 1953. There is no dispute
that in the second notice of demand of payment of definite claim for
interest had been made. In the first notice it wall said "by with:holding payment of his bills absolutely, the Government h!!.S put my client
to enormous loss by way of interest also .......... I intimate to you
(I) !I %11 3 S.C.R. 639.
(2l r1%4J 3 S.C.R. 164.
2-196SCI!79
A
B
c
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10
SUPREME COURT REPORTS
[1979] 3 s.c.R.
:A ·through this notice that the said Sbri Ramsingh claims a sum of
Rs. 2,s0,519/- from the Rajastban State as under :
B
c
D
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1. Unpaid bills for work done
2. Interest on the above.
3.
4.
5.
6.
Total :
Rs. l,37,177/-
ll,511/-
R•. 2,50,519/-
The learned counsel submitted that what was claimed by the
plaintiff in this notice was damages and not interest and that too for
the past, without any indication that future interest was also being
claimed. It is true that the plaintiff
mentioned "loss by way
of
interest", suggesting that what he was claiming was compensation for
the damage suffered by him.
We are, however, not prepared
to
construe the notice so literally cir technically.
The mention of loss
was only explanatory. The plaintiff was, without any manner
or
doubt clai{ning interest as such.
Nor are we impressed with the argument that there was no claim for future interest .. In our opinion a
claim for past interest would necessarily imply a claim for future
interest, vide Kuppuswami Pillai v. Madras Electric Tramway Co.
Ltd.(') and Sita Ram & Ors. v. Mrs. S. Sulliv(m( 2).
In Mahabir Pras(ld Rungta v. Durga Datt(3) interest was disallowed on the ground that the notice which was given did not specify the
sum which was demanded and therefore, the Interest Act did not ap_ply.
On the question whether interest could be awarded on grounds of equiF, ty it was held that what was claimed by Durga Datt was interest as
damages and that it could not, therefore, be awarded. The suit itself
was one for damages for breach of contract. We do not think that
this case is of any assistance to the appellant. In Union of India v.
A. L. Ral/ia Ram, (supra)° the Arbitrator had awarded interest by way
.G
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of compensation since the party had to borrow a large amount of
money from its banker to meet its obligation under the contract. The
Supreme Court pointed out that interest 'could not be awarded by way
of damages. The Supreme Court also noticed that an Arbitrator was
not a Court within the meaning of the Interest Act. No question
. arose before the Supreme Court whether interest· could not be awarded
under the Interest Act merely because the notice demanding payment
(I) l.L.R. 23 Mad. 41.
(2) !l901J 2 P.L.R. 464 .
. !3) [1961) 3 S.G.R. 639.
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RAJASTHAN v. RAGHUVEER SINGH (Chinnappa Reddy, l.)
11
mentioned that the plaintiff IJ!!d snfl't.inw IP.SS of interest also.
In our
view the condition prescribed by the Interest Act that such demand
shall give notice to the debtor t)lat iμterest shall be claimed is fulfilled
if interest is claimed, notwithstanding the fact that the notice of demand
explains that Joss by way of loss of interest has been suffered.
To
take any qther view would be to be over teehni_cal in the copstruetion
of pleadings, including notices preceeding the action.
We 11m&t notice here an argument acjvanced by the learned counsel
for the appellant that the contract prohibited the award of interest.
•
H~ re)i~d upon the following sentence ocrnrring in paragraph lo of
vr. the Coμtract dated 1 Jth Mi!Y·
1947: "Neither the earnest money
-/
deposit nor the with-held amount shall bear any interest".
This sen-
•
tence far from supporting the case of the appellant appears to s4pp,c.ct
the ca&e of the plaintiff.
The reference to "tile wi\)1-):)e\d amounts"
is tq the al!IOl!nts represe11iflg jiye per cent of tl!e ruμning bills which
are required to be with-held at the time of payment of the rumiing
bills.
The provision that the contractor is not entitled to interest on
these with-held amounts appears to imply that inten,st is claimable on
otjier a111ounts pue to the contractor.
' .
While awarding interest pendente lite the Trial Court adopted the
rate of 4t% but the Trial Court gave no reasons for so doing.
The
Uigh court considered the matt!'!' in som1> detail a11d having regard to
the variQ!lS contjnqous defaults committed by the defendant and its
Officers, the High Court enhanced the rate of interest to 6%.
The
High Court was ·jl)stified in doing so and we see no reason to interefere
with th" c]jscretion exercised PY the Uigh Court.
ln the resiilt !lie
appeal is dismissed with costs.
N.V.\{.
Appeal dismissed.
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