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TMI Blog1937 (12) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... bridge work and miscellaneous work respectively, in the construction of a branch railway line known as the Amda Jamda branch. The terms of each contract, which were embodied in a document variously described as schedule of works or schedule of rates, prescribed, inter alia, the rates at which payments were to be made to the contractor for various items of work to be done by him. 3. In May, 1920, the contractor commenced work in the section of the line allotted to him ; but he soon found that, owing to the wild and uninhabited nature of the locality through which the line had to pass, and to other local disadvantages, it was difficult to induce labourers from distant places to come and work there ; and he encountered many other difficult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by another letter in December, 1920, which sanctioned a further increase in certain rates mentioned in the schedule of rates. Even this revision of rates was unacceptable to the contractor, but the railway entered the revised rates in the printed schedules without obtaining the consent of the contractor. The work, however, continued and was completed early in 1925 ; the contractor receiving payments periodically on the basis of periodical statements of accounts or bills called on account bills. 5. It appears that during the progress of the work and even after its completion attempts were made by the parties to settle finally the rates at which pay-merit should be made to the contractor for the various items of work done by him, but th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay proposed to substitute for those rates certain enhanced rates, but the proposed increase was considered inadequate by the contractor and was not accepted by him. The result was that, while the old rates had disappeared, there were no new rates to take their place. The contracts employing the contractor to perform certain work for the railway, however, remained in operation ; and it is obvious that the contractor did the work for the railway, and that the latter accepted that work. 8. The question is how the price of that work should be determined. In their Lordships' opinion, the amount, which the contractor is entitled to recover from the railway, should be determined on the basis of fair and reasonable rates. Adopting this princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment on the sum found due to the plaintiffs at the date of the said decree, and this decision cannot be challenged. Nor can there be any objection to the order for the payment of interest from the date of the institution of the suit to the date of the decree. The rate of interest awarded by the High Court is, however, nine per cent., and this rate would be excessive, if it depended only upon the rule contained in the Civil Procedure Code. 12. The crucial question, however, is whether the Court has authority to allow interest for the period prior to the institution of the suit; and the solution of this question depends, not upon the Civil Procedure Code, but upon substantive law. Now, interest for the period prior to the date of the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-performance of a contract of which equity can give specific performance. 13. The present case does not, however, attract the equitable jurisdiction of the Court and cannot come within the purview of the proviso. 14. The learned Judges of the High Court have allowed interest by way of damages caused to the plaintiffs for the wrongful detention of their money by the railway, but the question is whether this view can be sustained. There is a considerable divergence of judicial opinion in India on the question of whether interest can be recovered as damages under Section 73 of the Indian Contract Act, where it is not recoverable under the Interest Act. Now, Section 73 of the Indian Contract Act gives statutory recognition to the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of damages for wrongful detention of debt. The judgment of the Privy Council in the case of Maine and New Brunswick Electrical Power Co. v. Hart (supra) dealt with a statute of New Brunswick, the relevant section of which was identical in terms with the Interest Act of India, and it was held in that case that the plaintiff was not entitled to interest at law, and, as the case did not attract the equitable jurisdiction of the Court, no rule of equity in regard to interest could have any application. 16. The law has, however, been amended in England by Section 3 of the Law Reform (Miscellaneous Provisions) Act, 1934, empowering a Court of Record to award interest on the whole or any part of any debt or damages, at such rate as it t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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