Case Note & Summary
This case involved a civil appeal by a construction firm against the State of Gujarat regarding a dispute over additional payments for work done on the Fulzer Dam II project. The appellant, a partnership firm, had submitted a tender for the construction work, which was accepted by the State Government. During the execution of the project, the firm was directed to perform additional work, leading to a claim for extra payment. After the completion of the work, the firm submitted a consolidated claim for Rs. 3,66,538.05, but the State Government only paid a portion of this amount. The firm subsequently filed a civil suit for the remaining amount, which was initially granted by the trial court. However, the High Court later set aside this decree, ruling that the firm was estopped from claiming further damages due to the acceptance of the final bill under protest. The Supreme Court, upon reviewing the case, found that the High Court's reliance on estoppel was misplaced and that the firm had a legitimate claim for additional payments based on the additional work performed. The Supreme Court restored the trial court's decree, allowing the firm to recover the amount initially awarded. The decision emphasized that acceptance of a final bill under protest does not negate the right to claim additional payments if substantiated by evidence. The judgment was delivered on January 14, 2011, and the appeal was allowed with no order as to costs.
Headnote
A) Contract Law - Acceptance of Final Bill - Effect of Acceptance Under Protest - Code of Civil Procedure, 1908, Section 80 - The court held that acceptance of the final bill under protest does not bar the contractor from claiming additional payments for extra work performed, provided the contractor can substantiate the claim with acceptable evidence. The High Court's reasoning based on estoppel was found insufficient as the contractor had a genuine claim for additional work. (Paras 5-10).
Issue of Consideration
Whether the acceptance of the final bill under protest barred the appellant from claiming additional payments for extra work done.
Final Decision
The Supreme Court set aside the High Court's judgment and restored the trial court's decree, allowing the appellant to recover Rs. 2,27,758/- with proportionate costs and interest at 6% per annum from the date of the suit till realization.
Law Points
- Contractual obligations
- Estoppel
- Additional claims
- Final bill acceptance
- Statutory notice under CPC
