Sunday, 29 July 2018

Whether claimant can be granted escalation charges proportionate to delay caused by other side?

This will require the Court to consider the additional plea urged on behalf of the Plaintiff, namely, that the High Court was not justified in reversing the decree passed by the learned trial Court so far as 50% of the escalation charges is concerned.

12. The High Court in coming to the aforesaid conclusion took the view that the specific clause in the agreement which obliges the Plaintiff to continue to offer his rates for the entire duration of the contract prohibits grant of the said claim. We have also noticed that it is the Defendant's own case that it was responsible for the delay to the extent of nineteen and half (19 1/2) months that had occurred in the execution of the contract whereas the Plaintiff was responsible for the delay of the remaining fifteen and half (15 1/2) months. The said specific admission on the part of the Defendant and the finding arrived at by the High Court on the aforesaid basis could not have permitted the High Court to reverse the decree passed by the learned trial Court on the aforesaid count which coincidentally entitled the Plaintiff to only 50% of the escalation charges, as claimed. The aforesaid percentage (50%) roughly corresponds to the percentage of the delay attributable to the Plaintiff out of the total delay of 35 months. The clause in the contract which obliged the Plaintiff to continue to offer the rates initially offered by him would, naturally, be for the duration of the contract and cannot work to his peril for the period of delay for which the Department was admittedly responsible. Such a construction of the clause in the contract would not be reasonable. We, therefore, reverse the aforesaid finding of the High Court and hold that the Plaintiff would be entitled to the 50% of the escalation charges as decreed by the learned trial Court.


C.A. No. 1034/2008

Decided On: 21.03.2017

 Aries & Aries Vs.  Tamil Nadu Electricity Board

Hon'ble Judges/Coram:
Ranjan Gogoi and Navin Sinha, JJ.

Citation:(2018) 12 SCC 393.
Read full judgment: Click here
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