UNION OF INDIA versus M/S. VARINDERA CONSTRUCTIONS LTD. ETC.

UNION OF INDIA versus M/S. VARINDERA CONSTRUCTIONS LTD. ETC.

Where a contract stipulates, by clear clauses (Clause 19 and Clause 6.3), that no reimbursement or escalation in wages or prices shall be made during execution of the contract, no claim for reimbursement due to statutory wage increases can be allowed, even if caused by government notification. Interpretation contrary to such explicit contract terms is impermissible.

Parties
Appellant: Union of India; Respondent: M/s. Varindera Constructions Ltd. etc.
Jurisdiction
India
Judgment Date
19 April 2018
Procedural Posture
Civil Appeal / Final Judgment on Appeal From High Court and Arbitral Award
Outcome
Appeals allowed. High Court decision and arbitral award set aside. Respondent not entitled to reimbursement for escalation in minimum wages.
Legal Topics
Interpretation of Contract Clauses, Arbitration Award Review, Minimum Wages Escalation, Contract Terms and Conditions
Contract Law Arbitration Interpretation of Contract Clauses Arbitration Award Review Minimum Wages Escalation Contract Terms and Conditions

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Parties

Union of India

Appellant

M/s. Varindera Constructions Ltd. etc.

Respondent

Procedural Posture

Civil Appeal / Final Judgment on Appeal From High Court and Arbitral Award

Legal Issues

  1. 1 Whether the contractor is entitled to reimbursement for escalation in minimum wages during the subsistence of the contract, contrary to contract clauses
  2. 2 Whether the arbitral award and High Court findings are contrary to express contract provisions

Ratio Decidendi

Where a contract stipulates, by clear clauses (Clause 19 and Clause 6.3), that no reimbursement or escalation in wages or prices shall be made during execution of the contract, no claim for reimbursement due to statutory wage increases can be allowed, even if caused by government notification. Interpretation contrary to such explicit contract terms is impermissible.

Court Disposition

Appeals allowed. High Court decision and arbitral award set aside. Respondent not entitled to reimbursement for escalation in minimum wages.

Orders

  • Appeals allowed
  • High Court decision dated 28.05.2012 and arbitral award dated 24.08.2011 set aside