In Brief
The Supreme Court addressed whether a contractual suit for recovery of additional money (escalation charges and extra works) was barred by limitation. The plaintiff received final payment on 13 January 1981 but raised additional claims in a notice dated 16 May 1981. The defendant entertained the claim but rejected it on 6 November 1981. The Court held that the cause of action arose on the date of rejection (6 November 1981), not on the date of final payment, making the suit filed on 6 November 1984 within the three-year limitation period. The Court also reinstated the trial court's award of 50% escalation charges, holding that the contractual firm-rate clause could not penalize the plaintiff for delays caused by the defendant.
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