Fair and reasonable rates govern abandoned contract pricing, while pre-suit interest needs legal basis and post-suit interest is capped.

Where contract rates are mutually abandoned and no revised rates are accepted, payment for work actually executed may be assessed on fair and reasonable rates rather than the original schedule. Pre-suit interest is recoverable only if supported by agreement, usage or substantive law; it cannot be claimed as damages for wrongful detention of money without such legal basis. Interest from the date of suit is governed by section 34 of the Code of Civil Procedure, 1908, and must remain within the permissible rate. The result is that the principal claim is measured on a just basis, while interest relief is limited by the applicable procedural rule.

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Issues: (i) Whether the original contract rates were abandoned by mutual consent and, in the absence of agreed revised rates, the contractor was entitled to be paid on the basis of fair and reasonable rates; (ii) Whether interest was recoverable for the period before the suit and, if not, what interest could be awarded under the procedural law from the date of suit onwards.

Issue (i): Whether the original contract rates were abandoned by mutual consent and, in the absence of agreed revised rates, the contractor was entitled to be paid on the basis of fair and reasonable rates.

Analysis: The concurrent findings below established that the original scheduled rates were mutually abandoned. The proposed enhanced rates were not accepted, so the old rates had ceased and no new contractual rates had come into force. Since the work was nevertheless done and accepted, the price had to be assessed on a just basis. In such circumstances, the proper measure was fair and reasonable remuneration for the work actually performed.

Conclusion: The contractor was entitled to payment on the basis of fair and reasonable rates, and the amount fixed by the High Court was accepted.

Issue (ii): Whether interest was recoverable for the period before the suit and, if not, what interest could be awarded under the procedural law from the date of suit onwards.

Analysis: Pre-suit interest was not justified by agreement, usage, or any substantive law applicable to the claim. The conditions for applying the Interest Act were not satisfied, and the case did not attract equitable jurisdiction. Interest could not be recovered as damages for wrongful detention of money under section 73 of the Contract Act in the absence of a legal basis for such interest. However, interest from the date of suit was governed by section 34 of the Code of Civil Procedure, 1908, and the rate awarded for that period was reduced to the permissible rate.

Conclusion: Pre-suit interest was disallowed, while interest from the date of suit to payment was confined to six per cent per annum under section 34 of the Code of Civil Procedure, 1908.

Final Conclusion: The plaintiffs succeeded on the principal claim for the value of the work, but the defendants obtained partial relief on the question of interest, resulting in a modified decree.

Ratio Decidendi: Interest before suit is recoverable only where authorised by agreement, usage, or substantive law, and it cannot be claimed as damages for wrongful detention of a debt absent such legal foundation; post-suit interest is controlled by section 34 of the Code of Civil Procedure, 1908.

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