SECO SAFE WORKS vs The CAPITAL DEVELOPMENT AUTHORITY S — 2024 CLC 1236 ISLAMABAD

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SECO SAFE WORKS VS The CAPITAL DEVELOPMENT AUTHORITY S. 34---Specific Relief act (I of 1877), S.12---Suit for recovery of contractual amount along with interest---Payment of interest---Scope---Discretionary powers of the Court---Scope---appellant (plaintiff / contractor) impugned judgment of Civil Court whereby his suit was decreed without interest---Validity---Section 34 of the Civil Procedure Code, 1908, provides that where a decree is for payment of money, the Court may "order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the Court deems reasonable on the aggregate sum so adjudged, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit"---In the present case, though it was correctly held by the Civil Court that defendant /respondent (Capital Development authority) was in breach of its contractual obligation, however, it (Civil Court) erred in not considering that the appellant was entitled to payment of interest on the outstanding amount due and payable as of 25.04.1997 i.e. ten days from the expiry of the 30-day period for submission of invoice after the date fixed for completion of work, which was 15.03.1997---Failure to pay such consideration at the time fixed in accordance with the contract established that respondent/CDa was in breach of its obligation to make such payment---appellant was out of pocket for over a decade during which period respondent /CDa continued to benefit from goods and services supplied by the appellant without having paid for such goods and services in accordance with the terms of the contract---after the appellant had established as a plaintiff that he was not in default of his obligations under the contract and had completed the supply of goods and services in the period prescribed in the contract i.e. 15.03.1997, and the respondent / CDa on the other hand was in default of its obligation to pay consideration by the period fixed within the contract i.e. 25.04.1997, the appellant was entitled to payment of interest on the amount as well as for monetary award in view of breach of contract on part of CDa---Once the Civil Court had concluded that the appellant was not a defaulting party and CDa was the defaulting party and had withheld payments to the appellant in breach of the provisions of the contract, it ought to have granted interest on the outstanding payments from date from which payment of consideration had become due, as under S. 34 of Civil Procedure Code, 1908, the Court is empowered to grant interest on payments even for a period prior to the institution of the suit---Grant or refusal of interest is a discretion vesting in court exercisable on the basis of known principles of administration of justice---Just as discretion vested in executive authorities cannot be exercised arbitrarily, the discretion vested in the court must be structured and exercised in a manner guided by principles of equity and fair administration of justice---Payment of the entire consideration under the contract became due on date fixed for completion of work (25.04.1997)---appellant was entitled to interest on the outstanding amount of consideration from such date till the time that the amount had been paid at average bank rate of interest---Therefore, CDa would pay interest, in addition to the decretal amount, calculated on the total consideration payable starting from date fixed for completion of work (25.04.1997)---appeal was allowed to the said extent.

SECO SAFE WORKS vs The CAPITAL DEVELOPMENT AUTHORITY S — 2024 CLC 1236 ISLAMABAD

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