In Brief
The Supreme Court overturned a High Court judgment directing a State Electricity Board to pay Rs.12.92 crores to a contractor for labour escalation charges and additional work under a dam construction contract. The Court held that the contractor's own claim documents (Ex.P20) showed payments adjusted first to principal, not interest; therefore, the contractor could not later change this method. The Court also rejected claims for subsequent interest under Section 34(2) CPC, since no decree directed such payment. Regarding additional work (Ex.P59), the Court set aside uniform escalation rates contradicting the contractor's own monthly calculation method. The Court also invalidated an arbitrary referral to arbitration lacking written agreement. The appeals were allowed, treating earlier payments as full settlement of all claims."
The lawyer headnote and full judgment text are available to registered users.