HIMACHAL PRADESH NAGAR VIKAS PRADHIKARAN versus M/S. AGGARWAL & CO.

HIMACHAL PRADESH NAGAR VIKAS PRADHIKARAN versus M/S. AGGARWAL & CO.

Where materials required for contract performance are supplied by the Department at prevailing rates, and the contractor does not procure such materials in the open market, escalation charges over and above such rates are not payable even under an arbitral award directing increased payment for delayed completion.

Parties
Appellant: HIMACHAL PRADESH NAGAR VIKAS PRADHIKARAN; Respondent: MIS. AGGARWAL & CO.
Jurisdiction
India
Judgment Date
27 January 1997
Procedural Posture
Civil Appeal / Supreme Court Appeal of High Court Order on Execution of Arbitral Award
Outcome
Appeal allowed
Legal Topics
Execution of Arbitral Awards, Escalation Charges, Public Works Contracts
Contract Law Arbitration Execution of Arbitral Awards Escalation Charges Public Works Contracts

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Parties

HIMACHAL PRADESH NAGAR VIKAS PRADHIKARAN

Appellant

MIS. AGGARWAL & CO.

Respondent

Procedural Posture

Civil Appeal / Supreme Court Appeal of High Court Order on Execution of Arbitral Award

Legal Issues

  1. 1 Whether escalation charges are payable on materials supplied by the Department and not procured by the contractor
  2. 2 Whether deduction of material costs supplied at schedule rates excludes further escalation payment

Ratio Decidendi

Where materials required for contract performance are supplied by the Department at prevailing rates, and the contractor does not procure such materials in the open market, escalation charges over and above such rates are not payable even under an arbitral award directing increased payment for delayed completion.

Court Disposition

Appeal allowed

Orders

  • High Court order directing further payment of escalation charges on department-supplied materials set aside
  • No costs awarded in Supreme Court