Jaina Marketing And Associates Through Its Partner Pradeep Jain vs. The State Of Jharkhand

Held

The Court held that the petitioner's claim for interest on delayed payment could not be adjudicated in a writ petition as it involved disputed questions of fact, specifically whether the delay was attributable to the respondents. The Court noted that the entire claim arose out of a contract and the petitioner failed to demonstrate any clause in the contract mandating payment of interest on delayed payments. The Court found that a unilateral clause inserted in the petitioner's bills could not be considered a binding agreement between the parties regarding interest. Consequently, the Court found no merit in the writ petition and dismissed it, advising the petitioner to approach a Civil Court for the reliefs sought.

Facts

The petitioner, Jaina Marketing & Associates, filed a writ petition seeking interest on delayed payment for the supply of smartphones to the Department of IT and E-Governance, Government of Jharkhand. The petitioner claimed interest at 24% per annum on Rs. 3,36,68,860/- for the period from August 26, 2017, to December 17, 2021, and also sought release of balance dues with interest. The petitioner argued that the payment was delayed by over 4 years from the completion of supply. The respondents contended that the delay was due to confusion arising from the transition to the GST regime, as the purchase order was pre-GST but supply was post-GST. They stated that after consulting with a Chartered Accountant and obtaining necessary documents, the payment was disbursed. The respondents denied any fault on their part and thus any liability for interest.

Key Issues

1. Whether the petitioner is entitled to claim interest on delayed payment for the supply of smartphones, considering the contractual terms and the circumstances leading to the delay? (Question of mixed law and fact, turning on contract law and administrative procedures). Petitioner's Arguments: The petitioner argued that a significant amount of Rs. 3,36,68,860/- was paid over 4 years and 3 months after it was due, entitling them to interest at 24% per annum. They claimed that a clause for interest on delayed payment was present in the bills raised by them. The petitioner asserted that the delay was attributable to the respondents. Respondents' Arguments: The respondents contended that the delay was unintentional and beyond their control, caused by the transition to the GST regime. They argued that the purchase order was issued before GST, but the supply occurred after its implementation, leading to confusion and the need for clarification from the Commercial Taxes Department and a Chartered Accountant. They denied any fault and therefore any liability to pay interest. They also argued that a unilateral clause in the petitioner's bills does not constitute an agreement for interest.