{"id":195548,"date":"1997-01-27T00:00:00","date_gmt":"1997-01-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/himachal-pradesh-nagar-vikas-vs-ms-aggarwal-co-on-27-january-1997"},"modified":"2015-11-27T13:34:45","modified_gmt":"2015-11-27T08:04:45","slug":"himachal-pradesh-nagar-vikas-vs-ms-aggarwal-co-on-27-january-1997","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/himachal-pradesh-nagar-vikas-vs-ms-aggarwal-co-on-27-january-1997","title":{"rendered":"Himachal Pradesh Nagar Vikas … vs M\/S. Aggarwal & Co on 27 January, 1997"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Himachal Pradesh Nagar Vikas … vs M\/S. Aggarwal & Co on 27 January, 1997<\/div>\n
Bench: K. Ramaswamy, G.T. Nanavati<\/div>\n
           PETITIONER:\nHIMACHAL PRADESH NAGAR VIKAS PRADHIKARAN\n\n\tVs.\n\nRESPONDENT:\nM\/S. AGGARWAL & CO.\n\nDATE OF JUDGMENT:\t27\/01\/1997\n\nBENCH:\nK. RAMASWAMY, G.T. NANAVATI\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t\t O R D E R
\n     Leave granted.\n<\/p>\n
     This appeal  by special  leave arises from the judgment
\nand order  dated May  2,1996 of\t the Himachal  Pradesh\tHigh
\nCourt passed in O.M.P. No. 626\/93 in Ex. P. No. 27\/1993. The
\nadmitted facts\tar that\t the respondent\t had entered into an
\nagreement  with\t the  appellant\t to  execute  certain  works
\npursuant to  which there was a dispute which was referred to
\nthe  Arbitrator,  on  directions  of  the  High\t Court.\t The
\nArbitrator in  the Award  dated April  25,  1992  stated  as
\nunder:\n<\/p>\n
     “After  considering   whole  matter
\n     submitted\tto   me\t by   both   the
\n     parties,  both   verbally\tand   in
\n     writing  I\t  have\tcome   to   this
\n     conclusions that  delay lies on the
\n     part of  the respondent – Executive
\n     Engineer,
\n     It is  awarded that  the plaintiffs
\n     shall be  paid by\tthe  respondent-
\n     Executive Engineer\t an increase  of
\n     25% over  and above  their tendered
\n     rates for\tall  works  executed  by
\n     them after\t the stipulated\t date of
\n     completion i.e. 21.5.89.”<\/p><\/blockquote>\n
     The  awarded   was\t made\trule  of   the\t Court.\t  In
\nimplementation of  the award,  the appellant  worked out the
\ndetails, as  mentioned in  the letter  No. SDA\t(D) – Acctt-
\n7\/93-644-47 dated November 12, 1993 which reads as under :\n<\/p>\n
     “With  reference\tto  your  letter
\n     No.AV\/SIM\/804-93-94\t   dated
\n     5.10.1993, I  am enclosing herewith
\n     a cheque  bearing No.  807801 dated
\n     12.11.1993\t  amounting    to    Rs.
\n     4,99,307\/- on account of payment of
\n     award  announced  by  the\tdirector
\n     which has\tbeen  made  as\trule  of
\n     court  by\tthe  Hon’ble  H.P.  High
\n     Court. The\t details of  the awarded
\n     amounts and  recoverise due  to  be
\n     made from you are as under:
\n     Gross amount of the work done after
\n     11th R\/A  Bill i.e. after 21.5.1989
\n     onwards upto 26th R.A. Bill)
\n\t\t\tRs. 69,78,354.00
\n     Less   cost    of\t material   i.e.
\n     Cement\/Steel supplied  by the SDA o
\n     which there has been no increase in
\n     the issued rates. (-)
\n\t\t\t   23,25,685.00\n<\/p><\/blockquote>\n
\t\t\t   ————-\n<\/p><\/blockquote>\n
\t    Net\t amount\t   46,52,669,00
\n     25% increase  on Rs. 46,52,669\/0 as
\n     awarded\tby    the    Arbitrator.
\n     11,63,167.00
\n     Less  2%\tI-Tax  on   23,263\/-  on
\n     Rs.11,63,167\/-12% S.C on I. Tax
\n\t   Rs. 2,792.00\t  (-)  26,055.00\n<\/p><\/blockquote>\n
\t   —————————–
\n     Total Rs. 26,055.00    11,37,112.00
\n     With held\ton account of recoveries
\n     due to  be made  from  you\t against
\n     agreement No.  52 of  1987-88.  (-)
\n     6,37,805.00\n<\/p><\/blockquote>\n
\t\t\t —————\n<\/p><\/blockquote>\n
\t  Net payable\t    4,99,307.00
\n     Please send stamped receipt.
\n\t      Your faithfully,
\n\t(Executive Engineer (d),
\n\tShimla Development Authority,
\n\t     Kasumpti, Shimla-9″<\/p><\/blockquote>\n
     It is  seen from  the contents  of the  letter that the
\nappellant has  deducted only the cost of the material, i.e.,
\ncement and  steel supplied the SA on which there has been no
\nincrease in  the issue\trates.\tAfter  working\tout  of\t the
\nDetails,  a   sum  of  Rs.  4,99,307\/-\tbecame\tdue  to\t the
\nrespondent. The appellant calculated the amount actually due
\nand payable  to the  respondent under  the  award  less\t the
\nincome-tax and surcharge etc. and the balance amount came to
\nbe paid.  But when  the respondent  claimed a further sum of
\nRs. 5,81,421\/-, the appellant objected thereto under Section
\n47 of  the CPC.\t The High Court over-ruled the objection and
\ndirected payment  thereof.  Thus,  this\t appeal\t by  special
\nleave.\n<\/p>\n
     It is  submitted by Shri H.K. Puri, learned counsel for
\nthe appellant  that the\t enhancement of\t 25% is relatable to
\nthe tendered  rates for the works executed by the respondent
\nand does not relate to the rates of raw material supplied by
\nthe appellant.\tHe also submitted that cement and steel were
\nsupplied by the Department at the contract. Thus, escalation
\nin price  of raw  materials supplied  by the  appellant\t the
\nentire burden  was borne by the appellant and, therefore, no
\nextra payment  could have been intended to be made under the
\naward in  respect to  those items. Therefore, the High Court
\nwas not right in directing payment thereof. We find force in
\nthe contention.\t It is\tcontended by  Shri Upadhyay, learned
\ncounsel\t for   the  respondent,\t that  when  the  Arbitrator
\nrecorded a finding that delay in execution was on account of
\nthe laches on the part of the Executive Engineer and awarded
\n25% more than the agree normal rate, as per the contract and
\nthe award  having been\tallowed to  become final,  it is not
\nopen to the appellant to deny 25% escalation charges for the
\nperiod. In  other words, it amounts to interference with the
\naward which  has attained  finality. In support thereof, the
\nlearned counsel\t relied upon paragraph 12 of the judgment in
\nP.M. Paul  V. Union  of India<\/a>  [ 1989  supp. (1)  SCC  368].
\nTherein,  the\tquestion  was  whether\tthe  contractor\t was
\nentitled to escalated rates due to delay in execution of the
\naward on  the part  of the  Department. As seen, There is no
\ndispute on the proposition that when the award has been made
\nawarding escalation charges, necessarily the increased rates
\nof the\tcost of securing the material for performance of the
\ncontract are required to be compensated by paying the amount
\nto the\textent of  the escalated  charges. It  is seen\tthat
\nunder Clause  10 of the contract, the appellant was required
\nto supply  the material\t at the\t rates prevailing  as on the
\ndate of the execution and it was entitled to deduct the same
\nfrom  the   amounts  payable  after  the  execution  of\t the
\ncontract. In  other words,  when the  iron and\tcement\twere
\nsupplied, during  the relevant period, even after the expiry
\nof the\tyear for which the award came t be made, necessarily
\nit included  the increase  in rates.  It is stated that they
\ndid not\t charge increased  rates but the rates prevailing as
\non  the\t dates\tand  the  amount  worked  out  came  to\t Rs.
\n23,25,785\/-. The  respondent is\t not entitled  to 25% of the
\nescalated costs\t in that behalf. The very object of awarding
\nescalated cost\twas that  the  contractor  had\tsecured\t the
\nmaterial from the open market at the price prevailing at the
\nrelevant time  and used\t the same for execution of the work.
\nIn view\t of the fact that iron and that iron and cement were
\nnot procured  by the respondent during the extended time and
\nactual price  for which\t they were  supplied has been worked
\nout as\tdetailed earlier,  the respondent is not entitled to
\n25% more on that material supplied by the Department itself.
\nUnder these  circumstance, The\tHigh Court  was\t clearly  in
\nerror in directing payment of the said amount.\n<\/p>\n
     The  appeal   is,\taccordingly,   allowed\tbut  in\t the
\ncircumstances without costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Himachal Pradesh Nagar Vikas … vs M\/S. Aggarwal & Co on 27 January, 1997 Bench: K. Ramaswamy, G.T. Nanavati PETITIONER: HIMACHAL PRADESH NAGAR VIKAS PRADHIKARAN Vs. RESPONDENT: M\/S. AGGARWAL & CO. DATE OF JUDGMENT: 27\/01\/1997 BENCH: K. RAMASWAMY, G.T. NANAVATI ACT: HEADNOTE: JUDGMENT: O R D E R Leave granted. This […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-195548","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nHimachal Pradesh Nagar Vikas ... vs M\/S. 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