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Suit No. 796 of 1980, heard on 19th January, 1983.

--‑‑S. 34‑Interest‑Defendant found liable to pay an amount of money to plaintiff‑Claim of interest in plaint at rate of 15%. per annum date prior to date of demand‑Demand of interest made at simple rate‑Interest at reasonable rate only could be allowed in absence of any agreement, held, interests of justice would be met by allowing interest at rate 10% per annum from date of demand till payment.

Tahir Hussain for Plaintiffs

Nemo for Defendants.

Date of hearing : 19th January, 1983.

This suit has been brought by the plaintiff for recovery of Rs. 62,254 against the defendants.

The plaint which has been duly verified on oath discloses on oath the following facts.

1. That the defendant, No. 1 acting through its proprietor Mr. Muzamil Aziz, the defendant No. 2, having their office at Islamabad had contracted with M/s. Pakistan Services Limited, Hotel Intercontinental at Dr. Ziauddin Road, Karachi, hereinafter referred to as the purchasers' for the supply of 494 sets (988) single mirror light for Rs. 1,97,600 purchase order has been produced as Annexure "A" to the plaint. For the fulfilment of the said contract the said purchasers had given to the defendant No. 1 by way of advance against Advance Payment Bond No. FG‑1447, dated 8th July, 1978 for Rs. 98,800 in favour of the purchasers. The Advance Payment Bond executed by plaintiffs and defendant No. 1 and counter guarantee executed by defendant No. 1 have been produced with the plaint as Annexures B' and C' respectively. As per counter guarantee (Annexure C') the defendant No. I inter alia undertook that in case the plaintiffs were ever or at any time called upon to pay by the purchasers against the contract and/or the Advance Payment Bond Annexure "B" the defendant No. 1 would forthwith pay all such demand of demands and all sums of money not exceeding Rs. 1,97,600 alongwith all costs, charges, interest and expenses whatsoever which the plaintiff may suffer, incur or pay in consequence of the said surety given by the plaintiff vide Advance, Payment Bond Annexure B'.

2. Certain disputes arose which led to the cancellation of the contract by the defendant No. 3 due to failure and default on the part of the defendant No. 1 whereupon the plaintiffs were called upon by the defendant No. 3 to pay back and refund the balance of the advance payment of Rs. 59,040 to them. However, the said amount was not paid back consequently the plaintiff were called upon by the defendant No. 3 to fulfil their obligation under the bond Annexure B' and pay them the sum of Rs. 59,040. The plaintiffs have produced copies of the tele gram of the purchasers given to the defendant No. 1, the letter of the plaintiffs, dated 9th March, 1980 and the receipt for Rs.59,040 paid by the plaintiffs pursuant to the Advance Payment Bond. These documents are marked Annexures D‑1' D‑2' and D‑3' to the plaint.

3. Consequent to the payment thus made by the plaintiffs, they called upon the defendant No. 1 to repay the sum of Rs. 59,040 to them by way of reimbursement as they had made the payment to the defendant No. 3 under the Bond Annexure 'B', and as a duty for repayment thus arose under the counter‑guarantee (Annexure C') executed by defendant No. 1 in favour of the plaintiffs. The plaintiffs have produced the copy of the demand made by their telegram, dated 12th March, 1980 (Annexure B' to the plaint).

3. The defendant No. 1 by their letter, dated 24th March, 1980 accepted their liability to repay the amount thus demanded but requested for time promising that the same would be paid in three equal instal ments. The relevant passage from the aforementioned letter Annexure F' is produced herein below :‑---

"Reference your letter No. ALAD/80/60, dated 13th March, 1980 regarding reimbursement of Rs. 59,040 which has been paid by you to M/s. Pakistan Services Ltd. We would reimburse the said amount in three equal instalments. The first instalment will be paid to you latest by the end of April, 1980, second instalment will be paid by end of May, the third and the last instalment will be paid by early August, 1980."

The request for the grant of instalment made as above by the defen dant No. 1 was rejected by the plaintiffs by their letter, dated 24th March, 1980 (Annexure 'C' to the plaint). .

5. Finally by legal notice, dated 29th May, 1980, produced today in court, the plaintiffs called upon the defendant No. 1 to pay to the plaintiffs Rs. 59,040 with interest at the rate of 15 % per annum from the date of payment i.e. 9th March, 1980 and also the commission payable on the Advance Payment Bond. The plaintiffs warned the defendant No. 1 that in case on non‑compliance of the demand made, legal proceed ings would be initiated for recovery of the dues. No payment however was made which led to the filing of the present suit in which the defendant No. 3, namely M/s. Pakistan Services Limited, have also been joined as pro forma defendant but no relief has been claimed against them.

6. The defendants Nos. 1 and 2 have remained absent and the case has proceeded against them ex parte.

7. The perusal of the facts disclosed in the plaint duly verified on oath and the documents of which photo copies were filed with the plaint and have now been supplemented by originals produced in Court and in the absence of any evidence in rebuttal in the inescapable conclusion. I find, that the defendants Nos. 1 and 2 are liable to pay Rs. 59,040 to plaintiffs.

8. The only question remains for consideration relates to the, interest claimed in the plaint at, 15% per annum with quarterly rests from the date of the suit. It would be observed that till 24th March, 1980, the plaintiffs had claimed payment of Rs. 59,040 only and no demand for interest was made. For the first time interest was claimed by the plaintiffs by their legal notice, dated 29th May, 1980. In the said notice interest was claimed at the rate of 15% per annum from the date of the payment made 6y' them i.e. 9th March, 1980. Obviously, there fore, no interest could be granted for the period prior to the date when the demand for interest was made i.e. for the period prior to 29th May, 1980. It is also significant to note here that the demand was made at simple rate of interest. Accordingly in the absence of any agreement only reasonable rate of interest could be allowed.

In the circumstances, I am of the opinion that interests of justice would be met by allowing interest at the rate 10% per annum from 29th May, 1980. The claim in the suit for grant of interest @ 15% per annum with quarterly rests is not justified.

9. The upshot of the above discussion is that the plaintiffs are granted decree against the defendants Nos. 1 and 2 jointly and severally, for Rs. 59,040 with interest at the rate of 10% per annum from 29th May, 1980 till payment. The defendants Nos. I and 2 shall also pay proportionate costs of the suits to the plaintiff's.

The suit against defendant No. 3 is dismissed as they have been joined as mere pro forma defendants against whom no relief has been claimed.

S. Q. Order accordingly.

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