The District Collector vs. R.Venkatesh

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WA(MD)/418/2024HC MadrasGSTCNR HCMD01011629202418 March 2024Bench: HONOURABLE MR JUSTICE D. KRISHNAKUMAR,HONOURABLE MR JUSTICE R.VIJAYAKUMAR5 pages
AI SummaryDismissed

Facts

The respondent, R. Venkatesh, a contractor, sought a Writ of Mandamus from the Madras High Court, Madurai Bench, directing the Block Development Officer to disburse Rs. 59,75,349/- for road construction works. This amount was to include enhanced 6% GST and 18% per annum interest on the principal sum, as per proceedings of the District Collector dated 09.03.2022 and 27.11.2022. The petitioner, the State (District Collector and Block Development Officer), filed a writ appeal challenging the Writ Court's order dated 17.07.2023, which had granted interest on the outstanding amount. The appellants conceded that there was a delay in settling the outstanding amount but argued that the agreement lacked a specific clause for granting interest.

Held

The Court held that the contention of the appellants (the State) that interest could not be awarded due to the absence of a specific clause in the agreement was not acceptable. The Court found that the Writ Court had rightly concluded to grant interest on the outstanding amount. Consequently, the writ appeal was dismissed. However, to provide clarity, the Court fixed the rate of interest at 6% per annum on the delayed payment, which amounted to Rs. 29 lakhs. This interest was to be calculated from the date of filing of the writ petition until the date of realization. The appellants were directed to comply with this order within twelve weeks. The issue of the exact rate of interest and its calculation was clarified by the appellate court.

Key Issues

1. Whether the Writ Court was justified in granting interest on the outstanding amount payable to the petitioner for road construction works, despite the absence of an explicit interest clause in the agreement? (Question of law) Arguments: Petitioner (State): The appellants argued that since the agreement did not contain a specific clause for granting interest on outstanding amounts, such interest could not be awarded. They contended that the Writ Court's order to grant interest was therefore liable to be set aside. Respondent (Contractor): The respondent sought a Writ of Mandamus to direct the disbursement of the principal amount along with enhanced GST and 18% per annum interest. While the judgment does not explicitly detail the contractor's arguments regarding interest, it implies their claim for interest was based on the delay in payment and the need for compensation.

Sections Cited

Article 226

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
W.A(MD)No.418 of 2024 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 18.03.2024 CORAM: THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR and THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR W.A(MD)No.418 of 2024 and C.M.P(MD)No.3570 of 2024 1.The District Collector, Sivagangai District, Sivagangai. 2.The Block Development Officer, Thirupathur Block, Thirupathur, Sivagangai District. ... Appellants/Respondents Vs. R.Venkatesh ... Respondent/writ petitioner PRAYER : Appeal filed under Clause 15 of the Letters Patent Act, against the order dated 17.07.2023 made in W.P(MD)No.17179 of 2023. 1/5 https://www.mhc.tn.gov.in/judis W.A(MD)No.418 of 2024 Prayer in WP(MD). 17179/ 2023 : Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Mandamus, directing the 2nd Respondent to disburse Rs. 59,75,349/- payable to the petitioner for the road construction works as per the 1st Respondent proceedings in Na.Ka.DA1/3360/19 dated 09.03.2022 and Na.Ka.DA5/3360/19 dated 27.11.2022 along with the enhanced 6 percentage taxes payable under the CGST and SGST and interest of 18 percentage per anuum to the amount of Rs.59,75,349/- till the final payment made by the 2nd respondent considering his representation dated 16.06.2023. For Appellants :Mr.Veera.Kathiravan, Additional Advocate General, assisted by Mr.S.P.Maharajan, Special Government Pleader For Respondent :Mr.S.M.Anantha Murugan

JUDGMENT [Judgment of the Court was delivered by D.KRISHNAKUMAR, J.] This writ appeal has been filed by the State, challenging the order passed by the Writ Court, dated 17.07.2023 made in W.P(MD)No.17179 of 2023, against the granting of interest for the settlement of the entire outstanding amount payable to the respondent/writ petitioner, for the road contract work executed by him. 2/5 https://www.mhc.tn.gov.in/judis

2.

The learned Additional Advocate General would submit that the delay in settling the outstanding amount has not been disputed by the appellants. However, there is no provision in the agreement for granting interest for such outstanding amount. Since there is no such clause in the agreement, the same cannot be awarded and hence, the order of the Writ Court is liable to be set aside.

3.

We have heard the learned counsel appearing on either side and perused the materials placed before us.

4.

Admittedly, there is outstanding amount payable to the respondent/writ petitioner. The contention of the appellants that since there is no clause in the agreement for granting interest for the outstanding amount, cannot be accepted. The Writ Court has rightly come to the conclusion to grant interest.

5.

Therefore, we are not inclined to interfere with the decision of the learned Single Judge in granting interest. Hence, this writ appeal stands dismissed. However, considering the fact that the Writ Court has not fixed the rate of interest and directed 3/5 https://www.mhc.tn.gov.in/judis the Department to settle the amount with permissible interest, (*)

for the sake of

clarity, we are fixing the interest at the rate of 6% per annum for the delayed payment which comes to Rs.29 lakhs, from the date of filing of the writ petition till the date of realization. The aforesaid order is to be complied with, within a period of twelve weeks from today. No Costs. Consequently, connected Miscellaneous Petition is closed. Assistant Registrar (P&A) (*)Corrected as per order of this Court dated 30/04/2024

made in W.A(MD)No.

418 of 2024

and C.M.P(MD)No.3570 of 2024 Assistant Registrar (P&A) //// / /2024 Sub Assistant Registrar(CS) PM To: (*)To be substituted the order which already despatched on 29/04/2024 1.The District Collector, Sivagangai District, Sivagangai. 2.The Block Development Officer, Thirupathur Block, 4/5 https://www.mhc.tn.gov.in/judis Thirupathur, Sivagangai District. +1 CC to M/s.S.M.ANANTHA MURUGAN, Advocate(SR.NO.23494)

18.03.

2024 PKP/17.04.2024/ 5P/ 4C MGJ/24/06/2024 5P/ 4C Madurai Bench of Madras High Court is issuing certified copies in this format from 17/07/2023 5/5 https://www.mhc.tn.gov.in/judis

Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.