1. The appeal suit is filed against the decree and judgment dated 29-07-2002 in O.S.No. 9 of 1997 on the file of the Court of learned Additional District Judge, Anantapur (for short, 'the trial Court'). The suit was filed by the plaintiff for recovery of Rs.11,00,000/- from the defendants with subsequent interest @ 12% p.a. from the date of suit till the date of realization with costs.

2. The case of the plaintiffs as narrated in the plaint, in brief, is as follows:

                  The plaintiff is a special class contractor having 40 years of experience and good reputation. The plaintiff entered into an agreement with defendant No. 1, undertaking the work of widening and lining of Gooty Sub-branch Canal from 3.70 to 4.100. The worth of the contract is Rs.20,86,250/-. As per the terms of the agreement, the work has to be done under the supervision of Executive Engineer, G.B.C. Division, Guntakal. The period of contract is 16 months. The rate of progress of work to be done is 25% work must be completed by the end of 4th month, 50% of work must be completed by the end of 8th month, 75% of work must be completed by the end of 12th month and 100% of work must be completed by the end of 16th month. Defendant No. 1 agreed to handover the work site on 07-12-1987 to enable the plaintiff to widen the canal from bottom point till ground level. The plaintiff collected men and material at the work site. The plaintiff installed nine cranes, one compressor for removal of earth and rock boulders to the canal bank. The work site was supervised by two site engineers. The plaintiff spent nearly Rs.1,00,000/- for raising sheds and for providing accommodation to workers. He paid Rs.2,00,000/- as advance to contract labourers. The total depth of the canal from ground level is about 12.3 meters. The full supply level of water is 1.6 meters. The plaintiff has completed widening of the canal from ground level to full supply level of water with great difficulty. The plaintiff, on many occasions, made oral requests to defendant Nos. 1 and 2 not to let water into the canal. The plaintiff also addressed a letter to defendant No. 1 expressing his difficulty in performing the contract while water was letting into the canal. The plaintiff made bona fide attempts from 27-07-1990 to 14-01-1991 to attend the work of removing earth from full supply level to bottom level. The bottom level of the canal is silted to a depth of one meter. Due to the said difficulty, the plaintiff was unable to complete the widening and excavation of the canal up to bottom level. Even after that, the defendants let the water into the canal from 05-02-1991 to 05-08-1991 for a period of 180 days. There is continuous breach of contractual obligations in letting of water into the canal. Thus, the defendants created an impossible circumstance at the site to tackle the work from full supply level to bottom level. The other difficulty expressed by the plaintiff is electrical power lines. There are power lines crossing the canal between the chainage K.M. 3.70 to K.M. 3.90. On account of the same, blasting operations could not be done. The authorities of electricity department obstructed blasting operations as power lines would be disturbed. The electricity department lodged cases against contractors. Due to shortage of power supply, the electricity department is not allowing contractors to conduct blasting operations in the canal. The plaintiff suffered mental agony and hardship and also loss of property and other contract works and therefore the plaintiff was constrained to file the suit.

3. Brief averments in the written statement filed by defendant No. 2 are as follows:

                  The defendants admitted that the plaintiff entered into an agreement with defendant No. 1 for a value of Rs.20,86,250/- for the work of widening and lining of Gooty Sub-branch Canal from K.M. 3.700 to K.M. 4.100. This work was against an estimated value of Rs.19,04,986/- with 9.52% tender premium excess over the estimated value. Time is essence of contract. The plaintiff agreed to complete the contract within 16 months. The defendants handed over the site on 17-12-1987. The contractor has not achieved the progress as per the terms of the contract. Thus, the plaintiff has breached the contract. The objections raised by the contractor for not executing the work are baseless. The plaintiff has to issue a notice in writing as per Preliminary Specifications 15 (B) and 15 (C) of the Andhra Pradesh Detailed Standard Specifications and General Principles of Engineering Contracts ( for short, 'the A.P.D.S.S.') whenever there is an obstruction for performing the agreement because of release of water into the canal during the period of 16 months contract. The plaintiff should obtain instructions from the concerned Executive Engineer or Superintending Engineer. Considering the situation, defendant No. 1 accorded extension of time up to 31-08-1991 to complete the remaining work. The plaintiff should have planned for excavation above the water level when the canal is flowing. If it is not possible, the plaintiff should have given it in writing at the time of placing tenders. Now, in the absence of such reference, it is to be construed that the rates quoted by him include that contingency.

                  The earnest money deposit of Rs.10,000/-, security withheld amount of Rs.48,000/- and reported work done not paid amount of Rs.50,000/- are the only amounts to be settled between the parties. The said amounts are to be released to the plaintiff when he fulfils the contract by completing the work. If the plaintiff fails to perform his part of contract, the above said amounts are to be used as penalty as per Preliminary Specification 61 of the A.P.D.S.S. The plaintiff is not entitled to claim the above amounts as he has not completed the contract. Therefore, the suit may be dismissed with costs.

4. Based upon the pleadings of both the parties, the trial Court framed the following issues for trial:

                  (1) Whether the plaintiff is entitled to recover damages from the defendants as prayed for?

                  (2) Whether the plaintiff has not completed the work to claim Rs.5,00,000/- under item No. (g) of particulars of suit claim as pleaded in the written statement?

                  (3) To what relief?

5. During the course of trial, on behalf of the plaintiff, P.Ws.1 to 5 were examined and Exs.A1 to A13 and Exs.C1 to C3 were marked. On behalf of the defendants, D.W.1 was examined and Exs.B1 and B2 were marked.

6. After completion of the trial and hearing the arguments of both sides, the trial Court partly decreed the suit for Rs.1,58,000/- along with interest @ 12 % p.a. from the date of filing of the suit till the date of realization with proportionate costs.

7. Aggrieved by the decree and judgment of the trial Court, the defendants have preferred the present appeal suit.

8. Heard learned Government Pleader for Appeals appearing for the appellants-defendants, Sri Kari Basaiah, learned counsel appearing for respondent Nos. 2, 3 and 5 to 9, and Sri Suneel Kumar Chitturi, learned counsel appearing for respondent No. 4.

9. Learned Government for Appeals would contend that the decree and judgment passed by the trial Court are contrary to law, weight of evidence and probabilities of the case. He would further contend that instead of dismissing the suit, the trial Court erroneously decreed the suit in part for Rs.1,58,000/- along with interest @ 12% p.a. from the date of filing of the suit till the date of realization and therefore the appeal may be allowed by setting aside the decree and judgment passed by the trial Court.

10. Now, the point that arises for determination in the present appeal is:

                  "Whether the trial Court is justified in decreeing the suit for Rs.1,58,000/- along with interest @ 12% p.a. from the date of filing of the suit till the date of realization with proportionate costs."

11. The undisputed facts are that the plaintiff entered into an agreement with the Superintendent Engineer, Irrigation Department, Anantapur, to undertake the work of widening and lining of Gooty Sub- branch Canal. It is contended by the plaintiff that after commencement of the work, the defendants let water into the canal and created an impossible condition to perform the contract and to complete the widening of the canal from ground level to full supply level of water. The plaintiff further contended that on many occasions, he made several requests to defendant Nos. 1 and 2 not to let water into the canal and despite of that, the defendants let water into the canal and due to the unavoidable circumstances, the work was stopped. It is not in dispute that there was an agreement between the plaintiff and the defendants in respect of the work allotted to the plaintiff and subsequently, the plaintiff completed 50% of the work after he entered into the agreement under Ex.A1 on 26-06-1987 with defendant Nos. 1 and 2. The plaintiff further contended that in the month of August, 1988, water was let into the canal and it was continued till February, 1989, for a period of six months and that he closed down his unit as the work has to be carried out only after Kharif season.

12. As could be seen from Ex.A1 and the evidence on record, though both the parties pleaded that time is essence of contract, the time was extended by the defendants on the application made by the plaintiff to perform part of the work by the plaintiff. Therefore, it is evident that though both the parties pleaded that time is essence of contract, the time was extended by the defendants after making application by the plaintiff. Therefore, time is not the essence of the contract and the contract also could not be completed by the plaintiff due to the unavoidable circumstances and that the plaintiff could not complete his total contract work.

13. The evidence produced by the plaintiff reveals that the plaintiff sustained loss due to letting of water by the defendants into the canal. The material on record reveals that on the application made by the plaintiff, the trial Court appointed a retired Executive Engineer as Commissioner as per the orders in I.A.No. 442 of 1994. The Commissioner visited the site in the presence of both the parties and noted the work done by the plaintiff as per the contract and he has also taken measurements. The material on record further reveals that as per the report filed by the Commissioner, the plaintiff turned out work up to 14.2 meters from the top and he left the work 1.6 meters at the bottom and at the time of inspection, there was water in the canal at full supply level for 1.6 meters. The plaintiff examined the retired Executive Engineer-Commissioner as P.W.2. In cross-examination when elicited by learned Assistant Government Pleader on behalf of the defendants, P.W.2 admits that the plaintiff has done the work up to 81.8% with respect to earth work and he left 18.2% of earth work undone. Therefore, his evidence reveals that the Government released water for five months and the canal was empty for the rest of the year.

14. The plaintiff claims an amount of Rs.11,00,000/- from the defendants towards damages under various heads but the trial Court, on appreciation of the entire evidence on record, came to the conclusion that the plaintiff is not entitled for the amount of Rs.5,00,000/- under the head of damages as sought for and the plaintiff was awarded an amount of Rs.50,000/- under the head of damages in addition to the last payment of Rs.50,000/- which is to be paid by the defendants to the plaintiff and the same is admitted by D.W.1 and the plaintiff is also entitled for refund of earnest money deposit of Rs.10,000/- and also security deposit of Rs.48,000/-. Aggrieved against the said decree and judgment, the defendants filed the present first appeal. No cross-objections are filed by the plaintiff against the decree and judgment passed by the trial Court. D.W.1 admits in his evidence that the value of the work completed by the plaintiff is Rs.14,22,647/- and the last payment of Rs.50,000/- was due to the plaintiff.

15. By giving cogent reasons, the trial Court held in its judgment that the plaintiff is entitled for Rs.50,000/- under the head of damages instead of Rs.5,00,000/- as claimed by the plaintiff. As noticed supra, no cross-objections have been filed by the plaintiff to challenge the said finding. As seen from the evidence of D.W.1, D.W.1 himself admitted that they have to pay Rs.50,000/- which is the last payment and due to the plaintiff. Admittedly, the plaintiff is entitled to the said amount and he is also entitled to the amounts of Rs.10,000/- towards earnest money deposit and Rs.48,000/- towards security deposit which was deposited by the plaintiff at the time of Ex.A1 agreement with the defendants. It is admitted by both sides before this Court that the defendants have deposited 50% of the decretal amount before the trial Court.

16. The defendants have taken a specific plea in the written statement that 12% interest sought by the plaintiff from the date of filing of the suit till the date of realization is usurious. The plaintiff has not placed any evidence justifying claiming interest @ 12% p.a. from the date of decree till the date of realization. In Mahesh Chandra Bansal Vs. Krishna Swardoop Singhal(1997 (10) SCC 681); and DDA and others Vs. Joginder S. Monga and others((2004) 2 SCC 297), the Honourable Apex Court held that in ascertaining the rate of interest, the Courts of law can take judicial notice of both inflation and fall in bank lending rate of interest. A reading of the precedents would suggest that steep fall in bank lending interest rate is the main reason for reducing interest. The trial Court awarded 12% interest from the date of decree till the date of realization which is not reasonable and the same is usurious. Therefore, the said interest of 12% p.a. from the date of decree till the date of realization has to be reduced to 6% p.a. from the date of decree till the date of realization.

17. Given the facts and circumstances, this Court views that the plaintiff is not entitled to the rate of interest at 12% p.a. from the date of decree till the date of realization. However, the plaintiff is entitled to simple interest @ 6% p.a. from the date of decree till the date of realization. The findings arrived at by the trial Court on appreciation of evidence in this case are therefore correct and do not call for interference of this Court except the rate of interest as indicated above. The point is answered accordingly.

18. For the reasons stated above, the appeal is partly allowed by reducing the interest rate from 12% p.a. to a simple rate of interest at 6% p.a. on the amount of Rs.1,58,000/- from the date of decree till the date of realization and the plaintiff is entitled to interest @ 12% p.a. from the date of filing of the suit till the date of decree. Two months time is granted to the appellants-defendants to deposit the balance amount with interest as stated supra before the trial Court. On such deposit, the legal representatives of the deceased plaintiff in the suit i.e. respondent Nos. 2 to 9 in the appeal are entitled to receive the same from the trial Court. Each party do bear their own costs in the appeal. Pending miscellaneous applications, if any, shall stand closed in consequence.