PS Apdss

THE ANDHRA PRADESH
PRELIMINARY SPECIFICATIONS
DETAILED CONTENTS
Specification Name of Specification Page

No. No.
A. Preface
1. Intent and reference to A.P.S.S. 37
2. Applicability of the A.P.S.S. 37
3. Contractor to sign in the Divisional (or the Sub-Divisional)
copy of the A.P.S.S. 37
4. Term Specification apart from Standard Specification 38
5. Sub-Specifications 38
6. Additions and alterations to the standard specifications
in the A.P.S.S. 38
7. Powers of Superintending Engineers and Executive Engineers
to supplement or alter the A.P.S.S. 38
8. Definition of terms 38
9. Evidence of Experience 39
10. Legal address Notices 39
B. Statement of approximate quantities in Schedule A
11. Quantities approximate and contractor to verify the nature

and amount of work 39
12. Approximate not to mean deviation from drawings
and specifications 40
13. To compare tenders 40
C. Drawings and Specifications
14. Purpose 40
15. Conformance 40
16. Variations by way of modifications, omissions or additions 41
17. Copies of drawings and specifications 41
18. Signed drawings No authority to the contractor 41
19. Finished sizes 41
14 THE A.P. STANDARD SPECIFICATIONS

No. No.
D. Materials and Workmanship
20. To be the best quality 41

21. Conventions for proportions 42
22. Measurement and mixing 42
23. Data 42
24. Lay-out of material stacks 42
25. Source of purchase of materials and stores 42
26. Contractor liable for materials supplied by the Government 42
27. Test inspection and rejection of defective materials and work 42
28. Defects, shrinkage, etc., after completion 44
29. Executive Engineers decision 44
30. Dismissal of Workmen 44
31. Contractors maistri or agent and Contractors staff 44
32. Government maistries or agents 45
E. Included in the Contract Rates
33. Defining Contract Schedule Rates 45

34. Carriage 45
35. Construction Plant 46
36. Scaffolding instructions 46
37. Temporary instructions 47
38. Water and lighting 47
39. Latrines for Work-people 47
40. Sun protection, keeping dry and pumping 47
41. Tools and seigniorage 47
42. Setting out works 48
43. Cleaning up during progress and for delivery 48
F. Responsibilities and Liabilities of the Contractor
44. Observance of Laws Local regulations & notices Attachments 48

45. Accidents Hoarding, Lightings, Observations Watchmen 48
46. Blasting 50
47. Protection of adjoining and existing premises 50
48. Permit other Workmen Co-operation Afford facilities 50
49. Holes for water service, gas, electrical and sanitary fittings 50
No. No.
50. Contractors risk and insurance 50

51. Holidays 51
G. Miscellaneous
52. Sand and gravel 51

53. Old curiosities 51
54. Assignment or sub-letting 51
55. Specialists 51
56. Ratification of the orders of the Executive Engineer 51
57. Order book 51
H. Date of commencement, completion, delays, extensions,

suspension of work and forfeiture
58. Date of commencement and completion 52

59. Delays and extension of time 52
60. Delays in commencement or progress or neglect of work
and forfeiture of earnest money, security deposit and
withheld amounts 74
61. Suspension of the works by the Contractor 75
I. Particulars of Payment
62. Payment on lump-sum basis or by final measurement

or unit prices 76
63. Payment for additions and deductions for omissions 77
64. No payment for unsanctioned extras 78
65. Accounts, receipts and vouchers 78
66. Fraud, wilful neglect or default 78
67. Unfixed materials 78
68. Payments and certificates 78
69. Interest on money due to the contractor 79
70. Acceptance of Final measurements 91
71. Recovery of money from contractor in certain cases 91
72. Contractor dying, becoming insolvent, insane or imprisoned 93
J. Arbitration and Claims of Contractors

on Arbitration Cases
73. Arbitration 94
Preface 37
PRELIMINARY SPECIFICATIONS
A. Preface
P.S. 1. Intent and reference to Andhra Pradesh Standard Specifications : It

is intended by these Andhra Pradesh Standard Specifications to describe
(a) the character of the materials to be used;
(b) the method of execution of work; and
(c) the contractors responsibilities and liabilities to the Public, Government, and
his workmen and general contract conditions which are to be accepted by every
contractor who executes work entrusted to him by the Public Works Department of
Andhra Pradesh.
Whenever the term Standard Specification or the abbreviation A.P.S.S. is

used in estimates or contract documents, it shall refer to the relevant specification in the
Andhra Pradesh Standard Specifications book and its addenda volume.
P.S. 2. Applicability of the Andhra Pradesh Standard Specifications :It

shall be unnecessary to include in any contract documents a specification for any item of
work which is defined in the tender notice or in the contract schedule of work to be done,
by a standard specification number. The fact that the item is defined as standard
specification shall mean that the contractor is to execute the work according to such
standard specification, modified as may be necessary by an addendum specification for
that particular item of work.
This preliminary specification shall apply to all agreements entered into by

contractors with the Public Works Department and shall form an inseparable condition of
contract, and it shall not be necessary to append a copy of the same to agreement.
P.S. 3. Contractor to sign in the Divisional or the Sub-Divisional copy of the

A.P.S.S. :Every contractor who executes work for the Public Works Department shall
carefully study the standard specification for all items of work which are included in the
schedule for work to be done as standard specifications and his obligations under the
Preliminary Specification which apply to all agreements, and he shall sign in the
Divisional office copy of the A.P.D.S.S. (or the Sub-Divisional copy if so arranged by the
Executive Engineer) as evidence that he understands clearly the conditions of contract
governing his agreement and accepts the same.
It shall not be necessary for the contractor to sign the Divisional office copy of the
A.P.S.S. for every contract awarded to him, but his signature there in will be evidence
that he accepts the conditions of contract (which includes the standard specifications) as
detailed in the A.P.D.S.S. for every contract into which he enters. I shall also be the
contractors responsibility by frequent perusal of the Divisional office (or the Sub-
Divisional office) copy to become conversant with sanctioned alterations or additions
made to the A.P.S.S. as soon as they are made. A separate volume of addenda to the
A.P.D.S.S. will be maintained in each Division (or Sub-
Division office as the case may be) in which will be entered all sanctioned corrections
and additions. This must also be studied and signed by every contractor before executing
an agreement. Interleaving correction slips will not be made for this purpose. The
contractor should purchase a book of the A.P.D.S.S. for his reference while executing
work.
P.S. 4. Term Specification apart from Standard Specification :

Whenever the term Specification is used in contract documents apart from Standard
Specification, it shall mean the specification or plan prepared for the particular item
referred to in the document, for the instruction of the contractor in executing that item of
work.
P.S. 5. Sub-Specifications :Works of a similar nature having many common

clauses in their specifications are grouped under one specification number with a
General, preface thereto, and the sub-specifications are therefore given an alphabetical
affix.
P.S. 6. Additions and alterations to the standard specifications In the

A.P.S.S.:Which do not involve legal implications will be approved by the Chief
Engineer (General) in consultation with the other Chief Engineers. Additions and
alterations to the preliminary specifications and standard forms in the A.P.S.S. will be
approved by the Government.
P.S. 7. Powers of Superintending Engineers and Executive Engineers to

supplement or alter the A.P.S.S. :Superintending and Executive Engineers may alter
the standard specifications for any particular contract, which is within their respective
powers of sanction , when such alteration is found necessary, by attachment of a
correction sheet to the contract form, bearing the standard specification number, the
corrections, and the signature of the Superintending or the Executive Engineer, as the
case may be, together with the signature of the contractor. Similarly, additional
specifications for items for which there are no standard specifications will be made by
attachment to the contract documents of addendum specification sheets bearing the
signature of the Superintending or the Executive Engineer as the case may be and the
signature of the contractor.
P.S. 8. Definition of terms :Wherever the words defined in this clause or

pronouns used in their stead occur in contract documents (which includes the A.P.S.S.),
they shall have the meanings here given.
(a) Executive Engineer :Wherever the term Executive Engineer is used, it shall
be understood to refer the Executive Engineer for the time being in charge of the
concerned work under execution or such other departmental assistants or subordinates to
whom the Executive Engineer may have delegated certain duties, acting severally within
the scope of the particular duty entrusted to them.
(b) No delegation by Executive Engineer, Superintending Engineer or higher

authority which affects agreement. it is, however, to be distinctly understood that the
Executive Engineer or the Superintending Engineer or the higher authority who is vested
with the powers of acceptance of the particular agreement under reference will make no
delegation of powers to such assistant or subordinates which in any way affects the
agreement and its contracts condition when such agreement is to be or has been accepted
by the Executive Engineer or by the other higher
Statement of Approximate Quantities in Schedule A 39
authority respectively. The duties of such assistants or subordinates will be solely duties
of supervision to ensure compliance with contract conditions.
(c) Contractor :Wherever the term Contractor is used, it shall be understood

to refer to the particular person, firm or corporation with whom an agreement has been
made by the Executive Engineer or higher authority as the case may be, for executing
work defined in the concerned agreement, and for purposes of instructions regarding
compliance with contract conditions, it shall include the contractors authorized agent,
who is maintained on the work by the contractor. When two or more contractors are
engaged on installation or construction work in the same vicinity, the Executive Engineer
shall be authorized to direct the manner in which each shall conduct the work so far as it
affects other contractors.
Note :The terms Sub-Divisional Officer, Assistant Engineer, Executive

Engineer, Superintending Engineer and Chief Engineer used in the following clauses
shall, where the context so requires, be construed as including officers of the
corresponding grade in the Highways Department.
P.S. 9. Evidence of Experience :Tenderers shall, if required, present

satisfactory evidence to the Executive Engineer that they have been regularly engaged in
constructing such works as they propose to execute and that they are fully prepared with
the necessary capital, machinery and materials to begin the work promptly and to conduct
it as required by the A.P.S.S. and the other specifications for the particular work tendered
for, in the event of their tender being accepted.
P.S. 10. Legal address Notices :Tenderers should gave in their tender, their
place of residence and postal address. The delivering at the above named place or posting
in a post box regularly maintained by the Post Office Department or sending by letter
registered for acknowledgement of any notice, letter or other communication to the
contractor shall be deemed sufficient service thereof upon the contractor in writing as
may be changed at any time by an instrument executed by the contractor, and delivered to
the Executive Engineer.
Nothing contained in the agreement and its contract conditions shall be deemed to
preclude or render inoperative the service of any notice, letter, or other communication
upon the contractor personally.
B. Statement of approximate quantities in Schedule A
PS. 11. Quantities approximate and contractor to verify the nature and
amount of work :The quantities mentioned in tender notices and given in agreement
(Schedule A) are worked out from the relevant drawings in Public Works Department
Office and may or may not be the actuals required for execution. The Executive Engineer
does not expressly or by implication agree that the actual amount of work to be done will
correspond therewith but reserves the right to increase or decrease the quantity of any
class or portion of the work as he deems necessary. Provided there is no change in the
over all scope of the work.
(Amended by G.O.Ms.No. 1007, Tr. Roads & Blds. (c) Dept., Dt. 5-11-1976)
Tenderers must satisfy themselves by a personal examination of the site of the

proposed work, by examination of the plans and specifications and by other
means as they prefer as to the accuracy and sufficiency of the statement of quantities and
all conditions affecting the work and shall not at any time after the submission of their
tender, dispute or complain of such statement of qualities, not assert that there was any
misunderstanding in regard to the nature or amount of the work to be done nor in
consequence apply for extension of time for completion beyond the agreement date.
P.S. 12. Approximate not to mean deviation from drawings and

specifications:The declaration of the approximate nature of the statement of quantities
in Schedule A does not, however, in any way imply that the quantities will be increased
for departure by the contractor from strict compliance with sanctioned drawings and
specifications to suit his own given convenience or reduce
costs.
P.S. 13. To compare tenders :The quantities in Schedule A are for a uniform
comparison of lump-sum tenders.
C. Drawings and Specifications
P.S. 14. Purpose :The contract drawings if any read together with the contract
specification are intended to show and explain the manner of executing the work and to
indicate the type and class of material to be used.
P.S. 15. Conformance :(a) The works shall be carried out in accordance with
the directions and to the reasonable satisfaction of the Executive Engineer, in accordance
with the drawings and specifications which form part of the contract and in accordance
with such further drawings, details and instructions, supplementing or explaining the
same as may from time to time be given by the Executive Engineer.
(b) If the work shown on any such further drawings or details, or other work
necessary to comply with any such instructions, directions or explanations, be in the
opinion of the contractor, of a nature which the schedule rate in the contract does not
legitimately cover, he shall before proceeding with such work, give notice in writing to
this effect to the Executive Engineer. In the event of the Executive Engineer and the
contractor failing to agree as to whether or not there is any excess rate to be fixed and the
Executive Engineer deciding that the contractor is to carry out the said work, the
contractor shall accordingly do so, and the question whether or not there is any excess,
and if so the amount thereof, shall, failing agreement, be settled by an arbitrator as
provided in the arbitration clause, unless the subject is one which is left to the sole
discretion of the Executive Engineer under the clauses of his preliminary specification,
and the contractor shall be paid accordingly.
(c) It shall be the responsibility of the contractor to give timely notice to the
Executive Engineer, regarding anything shown on the drawings and not mentioned in the
specifications, or mentioned in the specifications and not shown on the drawings, or any
error or discrepancy in drawings or specifications and obtain his orders thereon Figured
dimensions are to be taken and not those obtained from scaling the drawings. In any
discrepancy between drawings and specifications, the latter shall prevail. In any such case
or in case any feature of the work is not
Materials and Workmanship 41
fully described and set forth in the drawings and specifications, the contractor shall
forthwith apply to the Executive Engineer for such further instructions, drawings, or
specifications as he requires, it being understood that the subject is to be dealt with under
building procedure of best modern practice. The Executive Engineer will furnish the
further instructions, drawings, or specifications, if in his opinion, they are required by
competent workmen, for the proper execution of the work.
P.S. 16. Variations by way of modifications, omissions or additions :- (a) For

all modifications, omissions from or additions to the drawings and specifications, the
Executive Engineer will issue revised plans, or written instructions or both and no
modification, omission or addition shall be made unless so authorized and directed by the
Executive Engineer in writing.
(b) The Executive Engineer shall have the privilege of ordering modifications,
omissions or additions at any time before the completion of the work and such orders
shall not operate to annul those portions of the specifications with which said changes do
not conflict.
P.S. 17. Copies of drawings and specifications :One copy of the available
drawings and specifications for (apart from the A.P.S.S. a copy of which the contractor
should purchase for his reference) shall be furnished free of cost to the contractor for his
own use. Such copies and copies of supplementary details furnished by the Executive
Engineer shall be kept on the work until the completion thereof, and the Executive
Engineer shall at all times have access to them.
P.S. 18. Signed drawings No authority to the contractor :No signed

drawing shall be taken as in itself an order for variation, unless either it is entered in the
agreement schedule of drawings under proper attestation of the contractor and the
Executive Engineer, or unless it has been sent to the contractor by the Executive
Engineer, with a covering letter confirm that the drawing is an authority for variation for
the contract under reference.
P.S. 19. Finished sizes :The whole of the specified or figured dimensions or
drawings are to be finished sizes, after dressing or planning or cutting, subject however to
the condition that, unless marked nett, 1.5 mm will be allowed for planning for each
planed finished surface of wood-work, when the contractor is permitted to use carefully
sawed market size cut scantlings. This allowance will only be permitted in the case of
Sections 15mm thick or over. The figure dimensions of masonry walls and reinforced
concrete are exclusive of the thickness of plaster or skirtings or cement or wall linings,
unless otherwise specifically stated.
D. Materials and Workmanship
P.S. 20. To be the best quality :All materials, articles and workmanship shall
be the best of their respective kinds for the class of work described in the contract
specification and schedule, materials being obtained from sources approved by the
Executive Engineer. The word best, as used in these specifications shall mean, that in
the opinion of the Executive Engineer there is no superior quality of material or finish or
articles on the market and that there is no better class of workmanship available for the
nature of the particular item described in the contract schedule. The contractor shall, upon
the request of the. Executive Engineer, furnish him with the vouchers to prove that the
materials are such as are specified.
Samples of materials shall be furnished at the contractors expense to the

Executive Engineer when called for in the tender notice or ordered to be furnished by the
Executive Engineer prior to execution of any work.
P.S. 21. Conventions for proportions :Wherever the proportions are written
by figures without further descriptions and there the meaning is otherwise clear as to
which figures is intended to apply to each material, then the usual conventions will be
understood to apply
For example :
1:2 means 1 lime (or cement in accordance with the context) and 2 sand.
1:2:4 means 1 lime (or cement in accordance with the context), 2 sand, and 4
broken stone (or other aggregate in accordance with the context).
P.S. 22. Measurement and mixing :In the case of loose materials such as lime,
sand, cement broken stone, surki, mortar, etc., the proportions demanded by the
specifications must be measured in properly constructed measuring boxes, or in such
other manner as shall be instructed by the Executive Engineer. Measurement is not to be
done in loose heaps when intimate mixtures such as mortar, concrete, etc., are to be
formed. The mixing must always be done on closely constructed platforms so that there
will be no leakage of any of the materials through the floor of the platform and also so
that no foreign material can be incorporated during the mixing. These platforms must be
approved by the Executive Engineer. The cost of such measuring boxes and platforms
and all the work referred to herein shall be borne by the contractor.
P.S. 23. Data :The materials and labour utilized in the execution work by the
contractor shall not be less than that given in the A.P.P.W.D. standard data for the
relevant item.
P.S. 24. Lay-out of material stacks :The contractor shall deposit materials for
the purpose of the work on such parts only of the ground as may be approved by the
Executive Engineer. He shall submit, for the approval of the Executive Engineer, before
starting work, a detailed site survey clearly indicating positions and areas where materials
shall be stacked and sheds built.
P.S. 25. Source of purchase of materials and stores :The Executive Engineer
shall, during the progress of the work, have power to cause the contractor to purchase and
use such materials, or supplies from Government brick-fields, stores or other sources as
may be specified in the contract, for the purposes therein specified.
P.S. 26. Contractor liable for materials supplied by the Government : The
contractor shall be responsible for all materials and other articles and things which may
be supplied by Government from the time he takes delivery thereof and shall use them
only for the purposes of this contract and shall make good any loss, damage, wastage or
undue wear and tear that may take place from whatever cause and pay to Government, for
such loss, damage, wastage or undue wear and tear such sum as the Executive Engineer
may determine.
P.S. 27. Test inspection and rejection of defective materials and work :
(a) The contractor shall provide proper facilities at all times, for the testing
Materials and Workmanship 43
of materials and inspection of the work by the Executive Engineer and the Executive
Engineer shall accordingly also have access at all times to the place of storage or
manufacture where materials are being made for use under the contract to determine that
manufacture is proceeding in accordance with the drawings and specifications.
(b) The contractor shall, upon demand, also forward for the Executive Engineers
inspection, test certificates supplied by the vendors, when he is purchasing consignments
of cement, steel and other materials in respect of which such certificates are usually
available.
(c) The Executive Engineer shall have power to reject at any stage, any work
which he considers to be defective in quality of material or workmanship and he shall not
be debarred from rejecting wrought materials by reason of his having previously passed
them in an unworked condition. Any portion of the work or materials rejected or
pronounced to be inferior or not in accordance with the drawings and specifications, shall
be taken down and removed from the work-site at the contractors expense, within 24
hours after written instructions to that effect have been given by the Executive Engineer.
Replacement shall at once be made in accordance with the specifications and drawings, at
the contractors expense.
In case of default on the part of the contractor to carry out such orders, the
Executive Engineer shall have power to employ and pay other persons to carry out the
orders at the contractors risk and all expenses consequent thereon and incidental thereto
shall be borne by the Contractor.
In lieu of rejecting work not done in accordance with the contract, the Executive
Engineer may allow such work to remain, and in that case shall make such allowance for
the difference in value, as in his opinion may be reasonable.
(d) Works opened for inspections :The contractor shall at the request of the
Executive Engineer, within such time as the Executive Engineer shall name, open for
inspection any work covered up; and should the contractor refuse or neglect to comply
with such a request, the Executive Engineer may employ workmen to open the same. If
the said work has been covered up in contravention of the Executive Engineers
instructions, or if on being opened up, it be found not in accordance with the drawings
and specifications or the written instructions of the Executive Engineer the expenses of
opening it and covering it up again, whether done by the contractor or such workmen,
shall be borne by, or recovered from the contractor. If the work has not been covered up
in contravention of such instructions, or if on being opened up it be found to be in
accordance with the drawings and specifications or the written instructions of the
Executive Engineer, then the expenses aforesaid shall be borne by Government and shall
be added to the contract sum, provided always that in the case of foundations, or any
other urgent work so opened up and requiring immediate attention, the Executive
Engineer shall, within reasonable time after the receipt of a notice from the contractor
that the work has been so opened, make or cause the inspection thereof to be made and at
the expiration of such time if such inspection shall not have been made, the contractor
may cover up the, same and shall not be required to open it up again for inspection except
at the expense of Government.
P.S. 28. Defects, shrinkage, etc., after completion :Any defects, shrinkage or
other faults which may appear within six months from the completion of the works
arising, in the opinion of the Executive Engineer, from faulty materials or workmanship
not in accordance with the drawings and specifications or the instructions of the
Executive Engineer, shall, upon the directions in writing of the Executive Engineer and
within such reasonable time shall as be specified therein, be amended and made good by
the contractor at his own cost, unless the Executive Engineer shall decide that the
contractor ought to be paid for the same at the rates agreed or such reduced or other rates
as the Executive Engineer may fix and in case of default, the Executive Engineer may
employ and pay other persons to amend and make good such defects, shrinkage or other
faults or damage and all expenses consequent thereon and incidental thereto shall be
borne by the contractor.
[In the event of Government taking over portions of the works as and when they
are completed, the liability of the contractor shall be limited to the period of six months
from the date of taking over the portion or portions of the work, provided that the portion
or portions taken over has no connection with the remaining portions of the main work
and is independent of it].
[Subs. by G.O.Ms.No. 1007, Tr., R. & B.(Cl) Dept., Dt. 5-11-1976]
P.S. 29. Executive Engineers decision :To prevent disputes and litigation, it
shall be accepted as in inseparable part of the contract that in matters regarding materials,
workmanship, removal of improper work, interpretation of the contract drawings and
contract specifications, mode of procedure, and the carrying out of the work, the decision
of the Executive Engineer shall be final and binding on the contractor, and in any
technical question which may arise touching the contract, the Executive Engineers
decision shall be final and conclusive.
[In the case of any difference between Executive Engineer and contractor on
matters regarding materials, workmanship, removal of improper work, interpretation of
contract drawings and contract specifications, mode of procedure and the carrying out of
work, the contractor shall have a right of appeal to the next higher authority viz., the
Superintending Engineer of the Circle, and the decision of the latter shall be final and
conclusive].
[Added by G.O.Ms.No. 1007, Tr.,Rds., & Blds. (Cl) Dept., Dt. 5-11-1976]
P.S.30. Dismissal of Workmen :The contractor shall, on the request of the

Executive Engineer, immediately dismiss from the works any person employed thereon
who may, in the opinion of the Executive Engineer, be incompetent or misconduct
himself, and such person shall not be again employed on the works without the written
permission of the Executive Engineer, but the contractor may appeal to the
Superintending Engineer of the Circle against such dismissal.
P.S. 31. Contractors maistri or agent and Contractors staff :The

contractor shall, in his own absence keep constantly on the works a competent maistri or
agent, and any directions or explanations given by the Executive Engineer or his
representatives to such maistri or agent shall be held to have been given to the contractor.
The contractor shall further provide all staff which is necessary for the
supervision, execution and measurement of the work to ensure full compliance with the
terms of the contract.
Included in the Contract Rates 45
P.S. 32. Government maistries or agents :The Government may be

represented on the works by an agent, clerk of the works, or maistri who is not borne on
the official list of officers and subordinates of the Public Works Department. He (if
appointed) shall, in the absence of the Executive Engineer, furnish the contractor with the
Executive Engineers or his representatives instructions and directions as to the progress
and execution of the works and the contractor shall duly comply with such instructions
and directions and shall, on the written requisition of the maistri, clerk of works or agent,
stay the further progress of any portion of the works which in his judgment is being
constructed with unsound or improper materials or workmanship, until the opinion and
determination of the Executive Engineer shall be obtained thereon, but such maistri, clerk
of works or agent, is to have no power whatever to order any extra works or deviation
from the specifications and drawings.
E. Included in the Contract Rates
The items mentioned in this Section E are to be provided by the contractor and
are therefore to be allowed for in his contract rates for the various items of work in the
contract schedule, notwithstanding any contrary manual procedure claimed by the
contractor, unless there are definite superseding instructions in the specifications relating
to the contract in question.
P.S. 33. Defining Contract Schedule Rates :The rate entered in a contract
schedule for any class of work shall be for finished work in site and shall include all
contingent expenses whether direct construction expenses involved in the building in
place in accordance with the drawings and specifications, or whether they be expenses
imposed by an outside authority such as a local body Such contingent expenses shall not
entitle the contractor to claim an extra in respect thereof.
P.S. 34. Carriage :(a) Rates for finished work shall always include the cost of
conveyance and all leads, lifts, loading, unloading and stacking in the manner and at the
place ordered by the officer in immediate charge of the work, unless circumstances
necessitate provisions for a separate schedule item, in which case such will be specified
in the tender notice or schedule. When materials are supplied by Government, the place
of supply shall be specified in the Descriptive Specification Sheet mentioned in the
Tender Notice and no extra payment will be stacking. If the place of supply is not so
specified, the parties intending to tender should obtain the information from the
Executive Engineer before tendering. Otherwise, the absence of information in regard to
place of supply will not entitle the contract to any extra payment.
(b) Whether the term carriage or conveyance is used in a schedule item, it

shall, in the absence of other schedule provision or modifying description in the
specification, be taken to include all leads, lifts, loading, unloading and stacking in
uniform stacks to the satisfaction, of the Executive Engineer, with careful attention to
close packing in the case of materials which are to be measured in stacks as a basis of
payment for finished work.
Note :In the case of important leads and lifts as may occur in River
Conservancy and other such works, where lifts over flood banks and long leads
may be involved, it is usual to make separate schedule item provision with a specification
defined the exact work to be done for each tendered rate.
Payment for carriage will ordinarily be by bulk or weight at a mileage rate

between specified places and on the basis of the method adopted in the standard schedule
of rates for carriage of materials. The distance will be measured by the nearest practicable
and cheapest route, whether metalled or unmettalled road or cart- track.
(c) When carts or vehicles of any sort are engaged by the day, the quantity of
material to be converted, the distance to be travelled and the number of trips to be made
shall, if he considers it necessary, be fixed by the Executive Engineer.
(d) The contractor is responsible for making good all loss in transporting material
entrusted to him or his agents, whether caused by wastage, breakage, theft, or any other
cause.
(e) No payment shall, in any case, be made for the return trip with carts empty.
Where there are loads also for the return trip, the agreement rates should allow for the
reduced cost thereby on each set of materials so conveyed..
P.S. 35. Construction Plant :The contractor shall include in his tendered price,
and shall provide and install all necessary construction plant and shall use such methods
and appliances for the performance of all the operations connected with the work
embraced under the contract as will secure a satisfactory quality of work and rate of
progress which, in the opinion of the Executive Engineer, will ensure the completion of
the work within the time specified. If at any time before the commencement, or during
the progress of the work, or any part of it, such methods or appliances appear to the
Executive Engineer to be insufficient or inappropriate for securing the quality of the work
required, or the said rate of progress, he may order the contractors to increase their
efficiency, or to improve their character, and the contractor shall comply with such
orders; but the failure of the Executive Engineer to demand such increase of efficiency or
improvement shall not relieve the contractor from his obligation to secure the quality of
work and the rate of progress required by the contract, and the contractor alone shall be
responsible for the efficiency and safety of his plant, appliances and methods.
[If the department intends to supply any tools and plant to the contractor on hire,
the details of such tools and plant, the hire charges leviable and the terms of hiring them
should invariably be specified in the tender schedules and in the agreement, and the same
should not be varied during the contract period. If, however, the department is not able to
supply any of the tools and plant indicated in the agreement, the contractor shall claim no
compensation but can only claim reasonable extension of contract tine. If any other tools
and plant, that are available with the department but are no indicated in the agreement,
are supplied to the contractor during the course of the work, the hire charges and
conditions of hire prevailing in the department at the time of actual supply shall be
applicable].
[Subs. by G.O.Ms.No. 1007, Tr., R&B (C) Dept., Dt. 5-11.1976]
P.S. 36. Scaffolding instructions :All requisite scaffolding shall be provided at

the contractors expense and shall be double, i.e., it must have two sets of upright
supports. Care must be taken to ensure the safety of the workpeople and
Included in the Contract Rates 47
the contractor must comply with such instructions as the Executive Engineer may issue to
ensure such safety. The contractor will be entirely responsible for any damage or injuries
to persons or property resulting from ill-erected scaffolding, defective la4ders, or -
otherwise arising out of his default in this respect.
P.S. 37. Temporary instructions :The contractor shall erect and maintain at
his own cost temporary weather-proof sheds at such places and in a manner approved by
the Executive Engineer for keeping materials under cover. The contractor shall also
provide and maintain at his own expense such temporary fences, guards, bridges and
roads as may be necessary for the execution of his contract work or for safeguarding or
accommodating the public. If the Executive Engineer shall order any departure from any
arrangements made by the contractor, the contractor shall comply with such orders as the
Executive Engineer may issue to safeguard or accommodate the public. Sheds for
housing workmen shall be provided at the contractors expense, if in the opinion of the
Executive Engineer such are necessary or desirable.
P.S. 38. Water and lighting :The contractor shall pay fees and provide water
and light as required from Municipal mains or other sources, and shall pay all charges
therefor (including storage tanks, meters, etc.) for the use of the works and workmen,
unless otherwise arranged and decided on, in writing, with the Executive Engineer. The
water for the works shall be, so far as practicable, free from earthy, vegetable, or organic
matter, and from salts or other substances likely to interfere with the setting of mortar or
otherwise prove harmful to the work.
P.S. 39. Latrines for Work-people :The contractor shall provide and erect,
prior to the commencement of work, sufficient latrines for the use of the work people,
male and female, and shall keep the same disinfected and clear at all time during progress
of the works, and shall remove the same, disinfect the ground and make good all damage
on the completion of the work.
P.S. 40. Sun protection, keeping dry and pumping :The contractor shall at
his own expense arrange all requisite protection of the work and materials against sun or
rain effects and shall keep all portions of the work free from water to the satisfaction of
the Executive Engineer and shall use his own plant for the purpose, unless otherwise
specifically provided in the contract specifications.
P.S. 41. Tools and seigniorage :The contractor shall, unless otherwise
specially stated in the tender notice and subsequently on this basis in the contract be
responsible for the payment wherever payable of all import duties, tolls, octroi duties,
seigniorages, quarry fees, etc., on all materials and articles that he may use.
The contractor shall be solely responsible for the payment of sales tax under the
provisions of the Andhra Pradesh General Sales Tax Act, as in force for the time being
and the rates for the various items of work shall remain unaffected by any change that
may be made from time to time in the rate at which such tax is payable.
Notwithstanding anything contained in Section 10 of the Indian Tariff Act of

1894 the rates for items involving the use or supply of articles obtained by the contractor
from outside India shall remain unaffected by any charges that may be introduced in the
Customs duties.
Note :For works carried out on behalf of the Government of India seigniorage
fees, etc., referred to in this clause will have to be levied in every case.
P.S. 42. Setting out works :The contractor shall be responsible-for the correct
setting out of all works, providing at his own cost all labour3 materials and staff required
for so doing.
P.S. 43. Cleaning up during progress and for delivery :All rubbish shall be
burnt or removed from the site as it accumulates. All floors, stairs, landings, doors,
windows, surface and soil drains shall be cleaned down and put in a thoroughly complete,
clean, sound and workman like state to the satisfaction of the Executive Engineer before
the work is finally handed over, all rubbish and surplus materials not required by the
Executive Engineer having first been removed by the contractor. The contractor shall
give notice in writing to the Executive Engineer when the work is so ready to be handed
over, and shall be responsible for its maintenance until it is taken over by the Executive
Engineer.
[The Executive Engineer should take over the work within one month of such
notice from the contractor, if the work has been satisfactorily completed in terms of the
agreement].
[Added by G.O.Ms.No. 1007, Tr., Roads and Blds. (Cl) Dept., Dt. 5-1 1-1 976]
F. Responsibilities and Liabilities of the Contractor
Explanation :This section sets forth some responsibilities which the contractor
shall assume in addition to those mentioned in other sections of this Preliminary
Specifications under every contract which he enters into, with the Andhra Pradesh
Public Works Department and he should therefore calculate his unit prices for schedule
items of work accordingly.
P.S. 44. Observance of Laws Local regulations and notices

Attachments:The contractor shall conform to the regulations and bye-laws of any
local authority and/or of any water or lighting companies with whose systems the
structure is proposed to be connected and shall, before making any variations from the
drawings or specifications that may be necessitated by so conforming, give to the
Executive Engineer written notice, specifying the variations proposed to be made and the
reasons for making them, and apply for instructions thereon. In case the contractor shall
not receive such instructions within seven days, he shall proceed with the work,
conforming to the provision; regulation or bye-law in question; and any variations in the
drawings or specifications so necessitated shall be dealt with under clause 63. The
contractor shall give all notices required by the said Acts, regulations or bye-laws and
pay all fees in connection therewith, unless otherwise arranged and deciding on in writing
with the Executive Engineer. He shall also ensure that no attachments are made against
materials or work forming part of or for the use of the contract. In every case referred to
in this clause the contractor shall protect and indemnify Government against any claim or
liability arising from or based on the violation of any such law, ordinance, regulation,
order, decree, or attachment whether by himself or by his employees.
P.S. 45. Accidents Hoarding, Lightings, Observations Watchmen :

(a) When excavations have been made or obstacles have been put in public
+
Responsibilities and Liabilities of the Contractor 49
through fares or in places where there is any likelihood of accidents, the contractors shall
comply with any requirement of law on the subject, and shall provide suitable hoarding,
lighting and watchmen as necessary.
[(b) it shall be the Contractors sole responsibility to protect the Public and his
employees against accident from any cause and he shall indemnify Government against
any claims for damages for injury to person or property, resulting from any such
accidents, and shall where the provisions of the Workmens Compensation Act, 1923,
apply, take steps to properly insure against any claims 3hereunder. The contractor shall
execute the Indemnity pond in the prescribed form noted below for the payment of
claims coming under (a) Workmens Compensation Act, 1923, (b) Minimum Wages Act,
1948, (c) Payment of Wages Act, 1936, (d) Contract Labour (Regulation and Abolition)
Act, 1970 and all other such Acts in force and that may be enacted from time to time
during the currency of the agreement.
The following Indemnity Bond is to be executed by the Contractor while entering

into an agreement in respect of contract Works:
Indemnity Bond
Name of the Works:
Agreement No.
I, . Contractor, s/o ..
Aged .. Resident of .
do hereby bind myself to pay all the claims which may come (a) under Workmens
Compensation Act, 1923, with any statutory modification thereof and rules thereunder or
otherwise for or in respect of any damage or compensation payable in connection with
any accident or injury sustained, (b) under Minimum Wages Act, 194, (c) under Payment
of Wages Act, 1936, (d) under the Contract Labour (Regulation and Abolition) Act, 1970
by any workmen engaged for the performance of the business relating to the above
contract i.e.
failing such payment of claims of workmen engaged in the above work I abide in
accepting for the recovery of such claims affected from any of my assets with the
Department.] (Subs. by G.O.Ms. No. 85, TR & B (B.I.(2) Dept. Dt. 12-2-1986)
(c) On the occurrence of an accident which results in the death of any of the
workmen employed by the contractor or which is so serious as to be likely to result in the
death of any such workmen, the contractor shall, within 24 hours of the happening of
such accident, intimate in writing to the concerned Section Officer of the Public Works
Department, the fact of such accident. The contractor shall indemnify Government
against all loss or damage sustained by Government resulting directly or indirectly from
his failure to give intimation in the manner aforesaid including the penalties or fines if
any payable by Government as a consequence of Governments failure to give notice
under the Workmens Compensation Act or otherwise confirm to the provisions of the
said Act in regard to such accident.
(d) In the event of an accident in respect of which compensation may become

payable under the Workmens Compensation Act, VIII of 1923 whether by the contractor
or by the Government as principal it shall be lawful for the
Executive Engineer to retain out of monies due and payable to the contractor such sums
of money as may, in the opinion of the said Executive Engineer, be sufficient to meet
such liability. The opinion of the Executive Engineer shall be final in regard to all matters
arising under this clause.
P.S. 46. Blasting :Blasting executed by contractors in connection with

Government works shall be carried out in the manner described under Blasting
operations - Instructions to contractors of the A.P.S.S.
P.S. 47: Protection of adjoining and existing premises :The contractor is to

protect the whole of the adjoining and, where necessary, the existing premises, and all
works and all fittings to all buildings on and adjoining the site against structural and
decorative damage caused by the execution of these works and make good in all respects
all such damage done or occurring to the same, and leave such reinstatement in perfect
order. He is also to make good any damage done in the execution of the work to existing
public or private footways or roadways.
P.S. 48. Permit other Workmen Co-operation Afford facilities : The

Executive Engineer shall have full empower to send workmen upon the premises to
execute fittings and other works not included in the contract, for whose operations the
contractor is to afford every reasonable facility during ordinary working hours, provided
that such operations shall be carried on in such a manner as not to impede the progress of
the work included in the contract, but the contractor is not to be responsible for any
damage which may happen to or to be occasioned by any such fittings or other works,
provided he complies with the Executive Engineers Instructions in connection therewith,
and provided that the damage is not caused by himself or his workmen.
The contractor shall, to all times, co-operate, assist, attend on, and afford facilities
for such specialist as may be employed by the Executive Engineer or other works in
connection with the building, allowing them, free of charge, the use of all plant, light and
water installed in the works. The contractor shall also cause such special work or protect
it as instructed to avoid injury during progress of the works. For failure so to protect, the
contract or must make good any damage caused.
P.S. 49. Holes for water service, gas, electrical and sanitary fittings : The
contractor shall leave all holes in masonry and floors for the insertion of water services,
gas and electrical connections and sanitary fittings in the exact positions indicated by the
Executive Engineer during the progress of the work. These holes must be properly built
up, in a workman like manner, at the contractors cost, as soon as the fittings have been
installed, in cases where the installations are made during the construction of the building
and where, in the opinion of the Executive Engineer, delays in settlement of accounts will
not thereby occur.
P.S. 50. Contractors risk and Insurance :The work executed by the
contractor under the contract shall be maintained at the contractors risk until the work is
taken over by the Executive Engineer. The contractor shall accordingly arrange his own
insurance against fire and other usual risks during such period unless otherwise specified:
Provided however that the contractor shall not be liable for all or any loss or
damage occasioned by or arising out of acts of God, and in particular unprecedented
Miscellaneous 51
flood, volcanic eruption, earthquake or other convulsion of nature, invasion, the act of
foreign enemies hostilities or warlike operations (before or after declaration of war)
rebellion, military or usurped power.
P.S. 51. Holidays :No work shall be done on Sundays without the written
permission of the Executive Engineer or of the officer in charge of the work, and the
contractor shall comply with the provisions of the Factories Act, in and so far as the same
are applicable.
G.Miscellaneous
P.S. 52. Sand and gravel :The contractor shall not make any excavation upon
the site for the purpose of obtaining gravel, sand or soil other than that shown on or
implied by the drawings, except with the previous permission of the Executive Engineer.
P.S. 53. Old curiosities :All old curiosities, relics, coins, minerals, etc., found
in excavating or pulling down, shall be the property of the Government and be handed
over to the Executive Engineer. Should any ancient masonry, or other old work of interest
be opened up, the Executive Engineers attention shall be called to the same before
demolition or removal.
P.S. 54. Assignment or sub-letting :The contractor shall not, without the
written consent of the Executive Engineer) assign the contract nor sublet any portion of
the same. Ordinarily no sub-letting will be permitted, but in case such should be
permitted by the Executive Engineer, it shall in no way free the contractor from any of
his responsibilities under any clause of his Preliminary Specification or of the Articles
of Agreement.
P.S. 55. Specialists :The Executive Engineer shall, during the progress of the
work, have power to select, nominate or recommend tradesmen or specialists to supply
material or execute such portion of the work as he may consider desirable in the interests
of the Government.
[P.S. 56. Ratification of the orders of the Executive Engineer :Should the
acceptance of the tender be beyond the authorized powers of the Executive Engineer ad
laid down in the Public Works Department Code, the orders and decision of such
Executive Engineer with regard to extension of time for completing the contract or the
termination of the contract or of the employment of specialists for certain portions of the
work as described in the previous clause will be subject to the ratification of the higher
authority who entered into the agreement].
[Amended by G.O.Ms.No. 1007, Tr. Roads & Buildings (C) Dept., Dt. 5-11-1976]
P.S. 57. Order book :An order book shall be kept at the Public Works
Department office on the site of the work. As far as possible, all orders regarding the
work are to be entered in this book. All entries shall be signed and dated by the Public
Works Department Officer in direct charge of the work and by the contractor or by his
representative. In important cases, the Executive Engineer or the Superintending
Engineer will countersign the entries which have been made. The order book shall not be
removed from the work, except with the written permission of the Executive Engineer.
H. Date of commencement, completion, delays, extensions,

suspension of work and forfeiture
P.S. 58. Date of commencement and completion: On notification of
possession of the site (or premises) being given to the contractor by letter registered for
acknowledgement as provided in paragraph 10 Supra, he shall forthwith begin the work,
shall regularly and continuously proceed with them, and shall complete the same (except
for painting or other work which, in the opinion of the Executive Engineer, it may be
desirable to delay) by the date of completion as defined in Articles of Agreement,
subject, nevertheless, to the provisions of extension of time mentioned in the next clause.
The contractor shall under no circumstances be entitled to claim any damages from
Government if he incurs any expense or liabilities to payment under the contract before
the date of commencement defined above. The contractor shall have the right to withdraw
from the contract and obtain refund of his security deposit is such intimation of handling
over the site is delayed more than two months from the date of acceptance of the
agreement by competent authority.
P.S. 59. Delays and extension of time :No claim for compensation on account
of delays or hindrances to the work from any cause whatever shall lie, except, as
hereinafter defined. Reasonable extension of time will be allowed by the Executive
Engineer or by the officer competent to sanction the extension for unavoidable delays,
such as may result from causes, which, in the opinion of the Executive Engineer, are
undoubtedly beyond the control of the contractor. The Executive Engineer shall assess
the period of delay or hindrance caused by and written instructions issued by him, at
twenty five per cent in excess of the actual working period so lost.
In the event of the Executive Engineer failing to issue necessary instructions and
thereby causing delay and hindrance to the contractor, the latter shall have the right to
claim an assessment of such delay by the Superintending Engineer of the Circle whose
decision will be final and binding. The contractor shall lodge in writing with the
Executive Engineer a statement of claim for any delay or hindrance referred to above,
within fourteen days from its commencement, otherwise no extension of time will be
allowed.
Whenever authorized alterations or additions made during the progress of the

work are of such a nature in the opinion of the Executive Engineer as to justify an
extension of time in consequence thereof, such extension will be granted in writing by the
Executive Engineer or other competent authority when ordering such alterations of
additions.
_____
JUDGMENT
P.S. 59. BARS A CLAIM FOR COMPENSATION ON ACCOUNT OF
ANY DELAYS CAUSED BY THE DEPARTMENT
The Honble Mr. Justice Jeevan Reddy

and
The Honble Mr. Justice Neeladri Rao
Date of commencement, completion, delays, extensions, etc. 53
1989 (2) ALT 372 (D.B.)

[C.M.A.No. 684/85 & C.R.P. 1581/85, Dt. 24-3-1989]
State of A.P. Petitioner.
vs.
M/s. Associated Engineering Enterprises, Hyderabad. Respondent.
Judgment
(Judgment of the Bench delivered by Jeevan Reddy, J.)
1. The appeal and the Civil Revision Petition arise from a common judgment and
order of the learned Subordinate Judge, Rajahmundry, marking the award a rule of the
Court and dismissing the petition filed by the appellant State for setting aside the
award.
2. An agreement was entered into between the State of Andhra Pradesh and the
respondent-contractor for execution of the work of constructing approaches the rail-cum-
road bridge across Godavari, at Rajahmundry. The agreement is dated 17-6-1970, and the
value of the work is Rs. 70,29,925/-. A period of 42 months was stipulated for
completing the work, i.e., on or before 21-12-1973. The respondent actually completed
the work by 10-12-1974, after the period of contract was extended twice. The first letter
of the contractor requesting for extension was addressed on 17-12-1973. Extension was
granted upto 31-5-1974. By another letter, dated 22-7-1974 the contractor requested
another extension till the end of August, 1974. It was granted subject to imposition of
penalty of Rs. 50/- per day, after 1-9-1974.
3. After the work was completed, disputes arose between the parties with respect
to the amount payable to the respondent. They were referred to the sole arbitration of the
Superintending Engineer, R & B, Cuddapah Circle, in accordance with the agreement.
The arbitrator made his award on 25-3-1981. Apart from interest and costs, the
respondent had preferred eight claims. The arbitrator awarded some or other amount
under each claim. Claim No. 9 related to interest. The arbitrator awarded interest as the
rate of 15% per annum from the date of award, till the date of payment. So far as costs
are concerned (claim No. 10), he directed the parties to bear their own costs.
4. The award is a non-speaking one. It does not give reasons for the several
amounts awarded under each of the claims. It reads as follows:
Now, I, Sri P. Vishnu Rao, Superintending Engineer, (R&B), Cuddapah

Circle, Cuddapah, having taken upon myself the burden of reference and having
examined and considered the statements of parties and arguments produced before
me and having heard the parties, do hereby make and publish this day my award
in writing of and concerning the matter referred to me.
Claim No. 1 :This includes:
(a) Compensation for delay in handing over site on Kovvur side involving
Rs. 1,61,790.93 towards escalation in price index and Rs. 1,65,
150-00 towards establishment and over-head charges. Total Rs. 3,26,940.93, and (b)
Compensation by way of reimbursement for extra expenditure incurred to an extent of
Rs. 14,330-00 for removal and re-erection of the sheds, fencing etc., of railway
contractors, Rs. 2,000-00 for removal of caving in earth and forming temporary roads,
and Rs. 30,000-00 towards compensation paid to owners of buildings, huts, etc., in the
area dismantling the same on Rajahmundry side.
Award :I award the respondents shall pay to the claimants Rs. 2,81,800-00
(Rupees two lath eighty one thousand eight hundred only) towards this claim.
Claim No. 2 :This includes:
(a) Rs. 45,000-00 towards refund of recovery made, and
(b) Rs. 38,000-00 towards reimbursement of expenditure incurred regarding load

testing. Total Rs. 83,000-00.
Award :I award that the respondents shall pay to the claimants under (a) and
(b), a total sum of Rs. 83,000-00 (Rupees eighty three thousand only) towards this claim.
Claim No. 3 :this comprises of Rs. 22,441-00 towards cost of excavation of

excess depth in foundations of Rajahmundry.
Award :I award that the respondents shall pay the claimants Rs. 22,441-00
towards the claim. (Rupees twenty two thousand four hundred forty one only).
Claim No. 4 :This comprises of Rs. 2,000-00 being the cost of expenditure
incurred for the footpath slab extension and coaxial centering.
(Rupees two thousand only) towards this claim.
Claim No.5 :This comprises of Rs. 32,050-00 being payment to be made for
conveyance of excess earth to embankment.
(Rupees thirty two thousand and fifty only) towards this claim.
Claim No. 6 :This comprises of waiver of refund of fines imposed to an extent

of Rs. 13,500-00.
Award :I award that the respondents shall pay claimants Rs. 13,500-00 (Rupees
thirteen thousand five hundred only) towards this claim.
Claim No. 7 :This comprises of Rs. 2,000-00 being the refund of fine imposed
for absence of Site Engineer on Rajahmundry side.
(Rupees two thousand only) towards this claim.
Claim No. 8 :This comprises of Rs. 72,645-42 towards refund of recovery

made for excess steel consumed.
Award :I award that the respondents shall pay the claimants Rs. 72,64542
(Rupees seventy two thousand six hundred and forty five and paise forty two only)
towards the claim.
Claim No.9 :This comprises of Rs. 1,32,359-00 towards interest on amounts

claimed and disputed.
Award :This claim is rejected. However, after careful consideration of all the
factors the claimants are awarded interest on the awarded amounts from the date of this
award, i.e., 25th March, 1981 till the date of payment of 15% (fifteen per cent) per
annum.
Claim No. 10 :This refers to costs of the claimants in these proceedings.
Award :Each party to the reference shall bear their costs. The claimants shall
bear the cost of the stamp-paper for this award of Rs. 200-00 (Rupees two hundred only).
This award is made, signed and published by me on this, the twenty fifth day of
March, one thousand nine hundred eighty one.
O.S.No. 119/1981 was filed by the respondent contractor to make the award a rule
of the Court. The state filed O.P.No. 51/1981 to set aside the award under Section 30 of
the Arbitration Act. No evidence was adduced by either party before the learned
Subordinate Judge. After hearing the parties, the learned Subordinate Judge, as stated
above, made the award a rule of the Court, and dismissed the petition filed by the State
for setting it aside. The result is that the award in favour of the respondent in a sum of Rs.
5,09,436-42 Ps. with interest thereon at 15% per annum from the date of award, i.e., 25-
3-1981, till the date of payment or decree, is affirmed. The present appeal and Civil
Revision Petition are directed against the said judgment.
5. The learned Addl. Advocate-General, appearing for the State, disputed the
validity and legality of the award in so far as claims Nos. 1, 8 and 9 are concerned. He
did not dispute the amounts awarded under other claims.
6. The respondent claimed a total sum of Rs. 3,73,270-93 Ps., under claim No. 1,
which was divided into two sub-heads. They are:
(a) compensation for delay in handling over site on Kovvur side involving
Rs. 1,61,790-93 Ps. towards escalation in price index and Rs. 1,65,150-00 towards
establishment and over-head charges, making a total of Rs.
3,26,940-93 Ps.
(b) compensation by way of reimbursement for extra expenditure incurred

to an extent of Rs. 14,330-00 for removal and re-erection of sheds, fencing etc., of
railway contractors;
Rs. 2,000-00 for removal of caving in earth and forming temporary roads; and
Rs. 30,000-00 towards compensation paid to owners of buildings, huts, etc., in the
area dismantling the same on Rajahmundry side.
The arbitrator awarded a total sum of Rs. 2,81,800-00 under the claim without
specifying the amount under each of sub-heads or each of the items under each sub-bead.
Claim No. 8 is in a sum of Rs. 72,645-42. The respondent claimed refund of this amount
which was recovered from him towards excess steel consumed by him. The arbitrator
allowed the claim in full. Claim No. 9 pertains to grant of interest from the date of the
award till the date of realization.
7. For the sake of convenience we may take up claim No. 9 first. Following the
principle of the decision of the Supreme Court in Executive Engineer (Irrigation)
Galimala vs. Abnaduta Jena (AIR 1988, SC, 1520), it has been held by two Benches of
this Court in (i) C.M.A.No. 292/1938 disposed of on 15-11-1988 (consisting of Jeevan
Reddy & Y. Bhaskar Rao, JJ.) and (ii) C.M.A.No. 993/1984 and batch, disposed of on
17-3-1989 (consisting of Jeevan Reddy & V. Neeladri Rao, JJ.), that the arbitrator has no
power in law to award interest even for the period subsequent to the date of award. In this
case, the arbitrator has not awarded interest for the period prior to the date of reference,
nor has he awarded interest for the period the dispute was pending before him. He has
awarded interest only from the date of the award. Since the reference to arbitration in this
case is governed by Chapter II, i.e., without the intervention of the Court, the arbitrator
was not competent to award the said interest. It must, accordingly, he held that the award
of interest is incompetent and to that extent the award suffers from an error apparent on
the face of the record. The awards is liable to be set aside to the extent it allows claim
No.9.
8. We shall next take up claim No. 8. The respondents claim in this behalf is to
the following effect: According to the agreement, the steel required for the work was to
be supplied by the department at a recovery rate of Rs. 877-00 per Metric Tonne. The
agreement provided a margin of 5% wastage over the requirements as per schedule. Any
excess quantity of steel used over and above the said 5% wastage margin was to be
charged at the market value plus 10%, or the supply rate, whichever is higher. By the
time the work was completed, the respondent utilized 1550-251 Metric tonnes of steel.
The quantity actually used on the work was 1439-174 Metric Tonnes, accounting for an
excess issue of 1111-077 Metric Tonnes. The excess thus worked out to 6.93%. For the
excess wastage the Government recovered an amount of Rs. 72,645-42 Ps. This recovery
was protested by the respondent, who set out his case in his letter, dated 26-2-1975.
According to him 110-235 Metric Tonnes of steel was used for bolts and frames of the
centering erected for execution of RCC items and that it cannot be treated as wastage.
The wastage actually comes to 0-842 Metric Tonnes, which is negligible. However, the
Government neither responded to this representation nor did it refund the amount
recovered. The respondent, therefore, claimed refund of this amount.
9. In their counter the Govt. disputed the respondents claim. They denied that the
steel used for bolts and frames of the entering erected for RCC items is a bona fide use of
the steel supplied by the Government. If any such material is required the contractor has
to procure his own steel therefor. The matter was indeed considered by the Government,
which refused to accept any wastage beyond 5%.
10. Condition 5.0.4 of the relevant Section of the agreement reads as follows:-
5.0. 4 :Cement and steel will be supplied in sufficient quantity as when

required as is consistent with the out turn of the work. In case of non- availability
of these materials, the contractors shall make their own arrangements at their own
cost. The department shall not be held liable for any loss that is likely to be
caused to the contractor on account of delay in supply. In case of delay the
contractor shall be eligible only for suitable extension of time. The scrap or cut
pieces of steel left over shall not be taken back by the department. The loss, if
any, on account of these scrap or cut pieces shall be borne by the contractor. The
recovery of steel supplied by the Department shall be made for the quantities
issued. The rates to be quoted by the contractor shall be for the supply and
fabrication of steel including probable wastage upto 5% over the requirement as
per schedule.
Recovery for any excess quantity used over 5% wastage, shall be made at
the market value plus 10% or supply rate whichever is higher. The contractor
shall get binding wire required for use on the work at his own cost .....
The preceding conditions in the same Section says that the cement, steel, and
bitumen required for the work shall be supplied by the department at the specified rates,
and that the cost thereof shall be recovered from the contractors bills and other dues. The
contractor was obligated to use the material exclusively for the purpose of the work, and
to make good any loss, damage, or wastage that may take place from whatever cause.
Condition 5.0.5 states that the recovery of steel supplied by the Department shall be
made for the quantities issued. It says further that the scrap or cut pieces of steel left
over shall not be taken back by the Department and that the loss, if any, on account of
these scrap or cut pieces shall be borne by the contractor. It also provides that recovery
for any excess quantity used over and above 5% wastage shall be made at the rates
specified. Now, in the case before us there was no dispute as to the quantity issued. The
only dispute was whether the steel used for bolts and frames of the centring erected for
execution of RCC items should be treated as wastage, or should be treated as having been
utilized for the purpose of the work. In the absence of any specific provision in the
agreement that steel used for bolts and frames shall not be treated as steel used for the
purpose of the work, we are unable to say that the arbitrator was not competent to allow
the said claim of the contractor. In the absence of any specific provision in that behalf it
was open to the arbitrator to decide the issue taking an overall view of the several terms
and conditions of the agreement. We are, therefore, unable to say that the arbitrator acted
contrary to, or outside the terms of contract in allowing the said claim.
11. We shall not take up the main dispute between the parties. It centres round
claim No. 1. The respondent contractors claim under claim No. 1, stated briefly, is this:
Though the site for the approach on Rajahmundry side was handed over well in time
there was abnormal delay in handing over the site on Kovvur side. The respondent
addressed several letters to the appropriate authorities in this behalf, but to no effect.
These was a delay ranging between two months to 26 months in handing over the piers.
The particulars of delays and the compensation claimed by the respondent-contractor are
the following:-
Compensation Particulars
Date on
which Difference
Date on which Difference
site is to in price
Location site is actually Delay in cost
be index in
handed over Rs.
handed points
over
(a) K23 to K12 22-6-1970 End of 12/1970 6 months 12(7.7%) 11,057.80
K11 6/71 8/71 2 months 9(4.89%) 7,022.40

K10 6/71 10/71 4 months 14(7.4%) 10,627.00
K9 6/71 1/72 6 months 13(6.9%) 9,909.00
K8 6/71 4/72 10 months 19(9.79%) 14,059.30
1/72 to
complete
foundations and
K1 to K3 1/72 17 months 34(15.31%) 21,987.00
5/73 to do
substructure &
superstructure.
K4 & K3 1/72 9/73 21 months 39(17.18%) 24,672.00

K5 & K6 1/72 10/73 22 months 45(19.3%) 27,716.00
K7 1/72 2/74 26 months 60(24.19%) 34,739.00
(b) ADD 5% for Establishment and Overheads on Rs.33,03,000/- 1,65,150.00
ADD for removing and re-erecting sheds, fencing, etc., of Railway

(c) 14,330.00
contractors as per Annexure I.
(d) ADD for removing caves in earth and forming Temporary Road 2,000.00
ADD compensation paid to owners of buildings, huts, etc., in the area and
(e) 30,000.00
dismantling the same on the Rajahmundry side.
Rs. 3,73,270.00
OR
Rs. 3,73,271.00
The Government disputed the respondents claim. It relied upon the letters of the
respondent, dated 23-1-1970 and 13-3-1970, and the letter of the Chief Engineer, dated 8-
3-1970 in this behalf. Under these letters the time for delivering the sites/piers was
postponed. It was also stated that because of the said delay, the period of contract will be
extended by six months. The Governments contention, therefore, is that there is no basis
of claiming any compensation on account of the delays in handling over the sites. It
submitted that there were several delays on the part of the contractor in carrying out the
work, and that he did not keep up to the schedule of work. Since no compensation was
contemplated either by the
agreement or by the letters aforesaid, it submitted, the contractor cannot claim any
compensation. Reliance was placed upon Section 55 of the Contract Act, and the several
terms and conditions of the agreement, including Clauses 58 and 59 of the A.P. Detailed
Standard Specifications (APDDS). It denied that the contractor paid any moneys to the
owners of the structures, as claimed by him, and submitted that he is not, therefore
entitled, to any compensation on that account also.
12. The agreement entered into between the parties contained, inter alia, clauses 4
and 5, which read :
(4) Time shall be considered as of the essence of the agreement and the
Contractor hereby agrees to commence the work as soon as the agreement is
accepted by the competent authority as defined by the Madras Public Works
Department Code and the site (or premises) is handed over to him as provided for
in the said conditions and agrees to complete the work within (42) Forty two
months from the date of such handling over of he site (or premises) and to show
progress as defined in the tabular statement, Rate of progress below, subject
nevertheless to the provisions for extension of time contained in Clause 59 of the
Standard Preliminary Specification.
(5) The said condition shall be read and construed as forming part of this
agreement and the parties hereto will respectively abide by and submit themselves
to the conditions and stipulations and perform the agreements on their parts,
respectively...
The Preliminary Specifications mentioned, in APDSS constitute the terms of

agreement between the parties, Clause 58 of Preliminary Specifications says that on
notification of possession or the site being given to the contractor, he shall begin the work
forthwith and shall regularly and continuously proceed with the work and complete the
same as provided in the agreement subject, nevertheless, to provision of extension of
time, mentioned in the next clause. Clause 59, which is relevant for our purposes, reads
thus:
59. Delays and extension of time :x x x
Clause 60 says that time shall be considered the essence of the contract, and if the
contractor is guilty of delay in commencing or carrying on the work and fails to improve
inspite of notice, it shall be lawful for the Executive Engineer to determine the contract,
which shall entail forfeiture of security deposit and other amounts. It shall open to the
Government to have the balance of the work carried out by another contractor at the risk
and cost of the contractor.
13. Before proceeding further, it would be appropriate to refer to certain other

relevant material. In his letter, dated 23-1-1970 the respondent-contractor wrote to the
Superintending Engineer, Eluru, stating inter alia : 12. We agree that compensation
need not be paid if the delay in handling over the site occupied by the Railway is not
more than 3 months. It is clear that certain portions of the site which were to be handed
over to the respondent were occupied by the railway in connection with its own work; the
agreement between the parties was that as soon as the Railway vacated its occupation, the
site shall be handed over to the contractor within three months. The next letter is dated 8-
3-70 from the Chief
Engineer, PWD, Hyderabad, to the respondent, in which it was stated, inter alia, 12. (a)
: In your letter reference (3) cited (reference is to the respondents letter, dated 23-1-1970
referred to above), you have agreed for not claiming any compensation for the delay in
handing over site at piers 14 to 21 on Kovvur side beyond middle of 71 if the delay is
not more than 3 months. You are informed that the last 6 spans can be handed over in the
beginning of 1972 This letter is rather ambiguous. It speaks of delivery of piers
14 to 21 beyond middle of 1971. Suffice it to note that as soon as the Railways
delivered possession of the said sites, they were to be handed over to the contractor
within three months.
14. The third letter is dated 13-3-1970 from the respondent to the Chief Engineer.
In this letter it was stated, inter alia, (12)(a) : We note that the site for piers 14 to 21 on
Kovvur side will be handed over ii3 the beginning of 1972. Since there is a delay of 6
months in handing over the site, the time of completion of the work on Kovvur side will
have to be extended by 6 months This letter shows that the site for piers 14 to
21 on Kovvur side was to be delivered in the beginning of 1972, which meant a delay of
six months over the time agreed earlier, and in lieu thereof it was agreed that the period
of contract shall be extended by six months.
15. Now, the contention of Sri P. Ramchandra Reddy, learned council for the
respondent-contractor, is that in as much as admittedly, there was delay in the handing
over the sites on Kovvur side, the cost of work went up and the contractor is entitled to be
compensated therefor. According to him, the consumer price-index went up by 24.19%
between June, 1971 and February, 1974. It is on this basis that he claimed Rs. 1,61,790/-
by way of compensation. To this he added establishment and overhead charges calculated
at the rate of 5% of the total cost of Viaduct on Kovvur side. Some other minor claims
were also made. Mr. Ramachandra Reddy says, because of the delay in handing over the
site, the period of contract had to be extended, which meant extra cost to the respondent,
and it must be paid for by the Government which is responsible for the delay. The
contention of the learned Addl. Advocate-General, on the other hand, is that no such
compensation is contemplated, or provided for, either by the contract, or by the
correspondence between the parties. Indeed, the letter of the respondent, dated 13-3-1970
clearly speaks of extension of the period of contract by six months in lieu of the delay in
handing over the site for piers 14 to 21. Even if there is any delay in handing over the
site, no claim for compensation can be made since any such claim is barred b Clause 59
of the APDSS. It is also submitted that the contract does not provide for any such
compensation, and hence the arbitrator, who had to operate within the four-corners of the
contract, had no power to award any compensation on this account.
16. The first aspect to be noticed in this behalf is that the contractor did not
choose to terminate the contract on account of the Governments delay in handing over
the sites. He requested for, and agreed to extension of the period of contract, and
completed the work. It is not the respondents case that while agreeing to extension of the
period of contract he put the Government on notice of his intention to claim
compensation on that account. Section 55 of the Contract Act reads thus :
55. Effect of failure o perform at fixed time, in contract in which time

is essential :When a party to a contract promises to do a certain thing at or
before a specified time, or certain things at or before specified times, and fails to
do any such thing at or before the specified time, the contract, or so much of it as
has not been performed, becomes voidable at the option of the promise, if the
intention of the parties was that time should be of the essence of the contract.
If it was not the intention of the parties that time should be of the essence
of the contract, the contract does not become voidable by the failure to do such
thing at or before the specified time; but the promisee is entitled to compensation
from the promisor for any loss occasioned, to him by such failure.
If, in case of a contract voidable on account of the promisors failure to

perform his promise at the agreed, the promisee accepts performance of such
promise at any time other than that agreed, the promisee cannot claim
compensation for any loss occasioned by the non-performance of the promise at
the time agreed, unless, at the time of such acceptance, he gives notice to the
promisor of his intention to do so.
According to this Section it was open to the respondent to avoid the contract on
account of the Governments breach of promise to deliver the sites at a particular time ;
but, he did not choose to do so, and accepted the delivery of sites. at a time other than
what was agreed upon between them earlier. If so, he is precluded from claiming
compensation for any loss occasioned by such delay, unless,, of course, at the time of
such delayed acceptance of the sites, he had given note to the Government of his
intention to claim compensation on that account. It must be remembered that this
provision of law was specifically referred to, and relied upon in the counter filed by the
Government to the respondents claim before the arbitrator. But, it is not brought to our
notice that the contractor bad given such a notice (contemplated by the last sentence in
Section 55). We must make it clear that we are not entering into the merits of the decision
of the arbitrator. What we are saying is that such a claim for compensation is barred by
law, except in a particular specified situationand inasmuch as such a particular
specified situation is not present in this case, the claim for compensation is barred. It is
well settled that an arbitrator, while making his award, has to act in accordance with law
of the land, except in a case where a specific question of law is referred for his decision.
17. Even apart from Section 55, we are of the opinion that the arbitrator had no
power to award compensation as claimed by the respondent. Clause 59 of the APDSS
specifically bars such a claim. We have set out the clause in full hereinbefore. The
meaning of the said clause was considered by a Bench of this Courtof which one of us
(Jeevan Reddy, 3.) was a memberin A.A.O. No. 677/ 81 & C.R.P.No. 385/1982
disposed of on 19-4-82. It was held:
Coming to Clause 59 of the preliminary specifications of APDSS, it

provides that neither party to the contractor shall claim compensation on account
of delays or hindrances to work from any cause whatever. That
the delays and hindrances contemplated by Clause 59 include the stoppage,

hindrances and delays on the part of the department as well, is clear from the
following sentence in this first part of the said clause, viz., the Executive
Engineer shall assess the period of delay or hindrances caused by any written
instructions issued by him, at 25% in excess of the actual work period so lost.
Indeed, the second para of the clause also contemplates delays and hindrances
being caused on account of the failure of the Executive Engineer to issue
necessary instructions. In such a case, the contractor has a right to claim the
assessment of such delay by the Superintending Engineer of the Circle, whose
decision is declared to be final and binding on the parties. But, any such claim has
to be lodged in writing to the Executive Engineer within fourteen days of the
commencement of such delay, or hindrances, as the case may be. We find it
difficult, therefore, to say that Clause 59 has no application to the present case.
The words from any cause whatever, occurring Clause 59, are wide enough to
take in delays and hindrance of all types, caused by the department, or arising
from other reasons, as the case may be. Thus, by virtue of Clause 59, the
contractor is precluded from claiming any compensation on account of delays or
hindrances arising from any cause whatever, including those arising on account of
the acts or omissions of the departmental authorities ..
In this context, we must refer to two conflicting decisions of this Court, though
they are not strictly relevant in the facts of this case. Since they are relied upon by the
parties before us, It would be appropriate to refer to them briefly. In these cases the
question arose whether a contractor is entitled to claim escalation charges on account of
delay on the part of the Government in handing over the site. The first decision is in Chief
Engineer, Panchayatraj Department vs. B. Balaiah, (1985 (1), APU 224). The Bench
held that inasmuch as the contract between the parties does not provide for payment of
escalation charges, awarding an amount on account of escalation charges is in excess of
the arbitrators jurisdiction, and is void. In the later decision of another Bench, in State of
A.P. vs. S. Shivaraj Reddy, (988(2), APLJ 465), a different view was taken. The claim in
this case pertained to the work done beyond the contract period. The Court held that the
contract or must be paid as per the standard specification rates, for the reason that the
Government had defaulted in handing over the site at the time agreed. It was held that
such a claim is not barred by Clause 59 of APDSS. When the decision of this Court in
C.M.A. No. 677/8 1 and C.R.P. No. 385/82, dated 19- 4-1982 was brought to the notice
of this Bench, it distinguished the same holding that was a case where the claim was for
compensation, whereas in the case before them the claim was not for compensation, but
for payment as per the standard specification rates for the reason that the site was not
handed over to the contractor at the agreed time. This is what the Bench said:
In our view Section 59 has no application. It pertain to compensation. In

the present case, we are concerned with the rates for the work done. The
contractor is not claiming any compensation for loss or damage or loss of profit
which he would have made but for the delay committed by the department. What
is asked for here is that beyond the contractual date he must be paid as per the
standard specification rates as the site was not handed
over in time due to the fault of the department itself. We do not think P.S. 59 has
any application at all. The decision of the Division Bench referred to by the
learned Government Pleader has as relevance in the present context. In this
Division Bench case, the contractor having agreed for reduction of rates and
executing the final agreement, demanded escalation of rates complaining that the
department committed delays and defaults. The Government relied upon Clause
59 and Foot Note 7 of Schedule A which prohibited payment of rates at the
enhanced rates even during the extended period. The Division Bench negatived
the claim of the contractor on the ground that the Foot Note 7 is clear to the effect
that the agreed rate should prevail even during the extended period of the
agreement. The judgment of the Division Bench was more based on the specific
prohibition contained in Foot Note 7 of Schedule A of the agreement therein.
There is no such clause in the present agreement. It is not a case of escalation of
rates. Here the major portion of the site was handed over beyond the period of
agreement during which period the cost of labour and other materials have gone
up. Without the site was impossible for the contractor to complete the work and
what the Arbitrators have done is only to permit the contractor to claim the rates
prevalent as per the S.S.Rs. in force. In our view, it is not prohibited either under
the APDSS Rules or by any clause in the agreement ...
We must clarify that, so far as the case before us is concerned the claim of the
respondent-contractor is not for escalation of rates, nor is it a claim for payment of rates
as per the standard specification rates in force for the period beyond the originally agreed
contract period. If so, the decision in State of A.P. vs. S. Shivaraj Reddy (3 Supra) has no
application herein. In the case before us, the claim is a pure and simple claim for
compensation. The amount claimed has been worked out on the basis of the rise in
consumer price-index, and also on account of establishment and overhead charges. It
would, therefore, be a case squarely governed by the principle of the decision in A.A.O.
No. 677/81 & C.R.P. No. 385/82, dated 19-4-1982.
18. The learned Addl. Advocate-General also relied upon the decision of the
Supreme Court in Continental Construction Co., Ltd. vs. State of M.P., (1988 (3), SCC 82
; AIR 1988, SC 1166). In that. case the contract was entered into between the State of
Madhya Pradesh and the applicant before the Supreme Court, for construction of a bund.
The work could not be completed within the stipulated time because of the delays on the
part of the State in allotment of work and discharge of its obligations under the contract.
On account of this, the appellant incurred unforseen extra expenditure, which claim was
referred to arbitration. The State denied that there was any delay on its part. Apart from
that, it submitted that the appellants claim was barred by Clause 3.3.15 of the contract,
which read: 3.3.15: Clause 15 : Time limit for a unforeseen claims : Under no
circumstances whatever shall the contractor be entitled to any compensation from
Government on any account unless the contractor shall have submitted claim in writing to
the Engineer-in-charge within one month of the cause of such claim occurring .
The contractor did not avoid the contract on the ground of delays or defaults on the part
of the State. He contemplated the work. On these facts, the Supreme Court held:
The arbitrator misconducted himself in allowing the claim without

deciding the objection of the State. In view of the specific clauses, the appellant
was not legally entitled to claim for extra cost. The decision of this Court in Seth
Thawardas vs. Union of India (AIR 1955, SC 468) is of no avail on this point. If
no specific question of law is referred, the decision of the arbitrator on that
question is not final however much it may be within his jurisdiction, and indeed
essential for him to decide the question incidentally. The arbitrator is not a
conciliator and cannot ignore the law or misapply it in order to do so what he
thinks is just and reasonable. The arbitrator is a tribunal selected by the parties to
decide their disputes according to law and so is bound to follow and apply the
law, and if he does not, he can be set right by the Court provided his error appears
on the face of the award. In this case, the contractor having contracted he cannot
go back to the agreement simply because it does not suit him to abide by it. The
decision of this Court in M/s. Alopi Prasad vs. Union of India (AIR 1960, SC
588) may be examined. There it was observed that a contract is not frustrated
merely because the circumstances in which the contract was made, altered. The
Contract Act does not enable a party to a contractor to ignore the express
covenants thereof, and the claim payment of consideration for performance of the
contract at rates different from the stipulated rates, on some vogue plea of equity.
The parties to an executory contract are often faced, in the course of carrying it
out, with a turn of events which they did not at all anticipate, a wholly abnormal
rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to
execution, or the like. There is no general liberty reserved to the Courts to absolve
a party from liability to perform his part of the contract merely because on
account of an uncontemplated turn of events, the performance of the contract may
become onerous .. .
When it was argued by the appellant that since the Award was a non- speaking
Award and no mistake of law was apparent on the face of the record, the Supreme Court
repelled the same holding that this being a general question, in our opinion, the District
Judge rightly examined the question and found that the appellant was not entitled to claim
for extra cost in view of the terms of the contract and the arbitrator misdirected himself
by not considering this objection of the State before giving the award.... Reference was
also made to the decision of the Privy Council in Champsey Bhara & Co. vs. Jivraj Ballo
Spinning & Weaving Co. Ltd. (AIR 1923, SC 6), where it was held that the award of an
arbitrator can be set aside on the ground of ah error apparent on the face of the record
only where the error is apparent either on the face of the award or from any document
incorporated in it. After referring to several authorities, the Supreme Court held that the
District Judge was entitled to examine the contract in order to find out the legality of the
claim of the appellant regarding extra cost towards rise in price of material and labour,
and observed further, as was pointed out by the learned District Judge, Cls. 2.16 and 2.4
stipulated that the contractor had to complete the work inspite of rise in prices of
materials and also rise in labour charges at the rates stipulated in the contract. There was
a clear finding of the arbitrator that the contract was not rendered ineffective in terms of
Section 56 of the Contract Act due to abnormal
rise in prices of material and labour. This being so and the contractor having completed
the work, it was not open to him to claim extra cost towards rise in prices of material and
labour. The arbitrator misconducted himself in not deciding this specific objection raised
by the State regarding the legality of extra claim of the appellant ...
19. Applying the principal of the above decision to the facts of the case before us,
it must be held that Clause 59 bars a claim for compensation on account of any delays or
hindrances caused by the department. In such a case, the contractor is entitled only to
extension of the period of contract. Indeed, such an extension was asked for, and granted
on more than one occasion. (The penalty levied for completing the work beyond the
extended period of contract has been waived in this case). The contract was not avoided
by the contractor, but he chose to complete the work within the extended time. In such a
case, the claim for compensation is clearly barred by Clause 59 of the APDSS which is,
admittedly, a term of the agreement between the parties.
20. Mr. P. Ramachandra Reddy, learned counsel for the respondent- contractor,
however, relied upon certain decisions as laying down a contrary proposition, to which
we should now refer. The first decision relied upon is in P.M Paul vs. Union of India,
(1989(1), Scale 221). In this case, the appellant-contractor urged that there was delay on
the part of the respondent-Government in handing over the site, and that, on that account,
he has incurred extra cost which he must be reimbursed. His claim was rejected, as also
his request to refer the same to arbitration. Thereupon, it is said, the appellant-contractor
abandoned the work. The dispute was thereafter referred to the arbitrator. One of the
claims put forward by the appellant-contractor and allowed by the arbitrator related to the
loss caused to the contractor due to increase in prices of material, cost of labour and
transport during the extended period of contract. The respondent-State submitted that no
such claim is contemplated, or provided for, by the agreement between the parties and
hence the arbitrator was not competent to allow the said claim. The Supreme Court
observed that the dispute referred to the arbitrator, inter alia was as to who is responsible
for delay and what are the repercussions of the delay in completion of the work and how
to apportion the consequences of such responsibility. It was observed: After discussing
the evidence and the submissions the arbitrator found that it was evident that there was
escalation and, therefore, he came to the conclusion that it was reasonable to allow 20%
of the compensation under Claim 1; he has accordingly allowed the same. This was a
matter which was within the jurisdiction of the arbitrator and hence, the arbitrator has not
misconducted himself in awarding the amount as he has done Once it was found that the-
arbitrator had jurisdiction to find that there was delay in execution-of the contract due to
the conduct of the respondent, the respondent, was liable for consequence of the delay,
namely, increase in prices. Therefore, the arbitrator had jurisdiction to go into this
question. He has gone into that question and has awarded as he did. Claim 1 is not
outside the purview of the contractor. It arises as an incident of the contract and the
arbitrator has jurisdiction .. It must, however, be noticed that in this case the
contract did not contain a clause like contained in Clause 59 of the APDSS. Where a
similar clause was found as in the case Continental Construction Co. Ltd. vs. State of
Madhya Pradesh (4 Supra) the Supreme Court held clearly
that the arbitrator had no jurisdiction. It must be noted that the award in this case was a
speaking/reasoned award.
21. Mr. Ramachandra Reddy placed strong reliance upon the decision of the
Supreme Court in M/s. Sudarsan Trading Co. vs. The Government of Kerala & another,
(1989 (1), Scale 395) Three questions were considered in this case, namely, (i) when is an
award a speaking award; (ii) in the case of a non-speaking award, how and to what extent
can the Court go to determine whether there is an error apparent on the face of the award;
and (iii) to what extent can the Court examine the contract between the parties which is
not incorporated or referred to in the award? We are not concerned with the first question
in this case. The second and third questions are, however, relevant. On the second
question arising before it, the Supreme Court referred to the decision of the Privy Council
in Champsey Bhara & Co. vs. Jivraj Balloo Spinning & Weaving Co. Ltd. (5 Supra) and
held that an award can be set aside on the ground of an error apparent on the face of the
award only where the award, or any document incorporated therein contain some legal
proposition which constitutes the basis of the award, and which is erroneous. It was
observed that in the case of a non-speaking award it is not open to the Court to probe the
mental process of the arbitrator and speculate as to what impelled the arbitrator to arrive
at the conclusion which he did. In this connection, the Court referred to its earlier
decision in M/s. Alopi Parshad vs. Union of India, (AIR 1960, SC 588), wherein it was
held that an award can be set aside on the ground of an error apparent on the face of it,
when the reasons given for the decision either in the award or in any document
incorporated in it, are based upon a legal proposition which is erroneous. The other
principle enunciated in the said decision to the effect that an award which ignores
express terms of the contract, is bad was also affirmed. It was pointed out that the
ground of error apparent on the face of the award is distinct from the ground that the
arbitrator exceed his jurisdiction. It was pointed out that while in the latter case the Court
can look into the arbitration agreement to determine whether the arbitrator exceed his
jurisdiction, in the former case the Court must confine its attention only to the award and
to any other document or material incorporated therein. It was held that for determining
whether there is an error apparent on the face of the award the Court has no jurisdiction
to look beyond the award and the documents, if any, incorporated therein. Now, in the
case before us the question is not whether the award suffers from an error apparent on its
face, but whether the arbitrator has exceeded his jurisdiction in awarding compensation
when the agreement specifically prohibits the same. In such a case, it is open to the Court
to look to the terms of the agreement between the parties.
22. Mr. P. Ramchandra Reddy also relied upon the decisions of the Supreme
Court in State of Orissa vs. M/s. Lall Brothers (AIR 1988, SC 2018) and Neelkantan &
Brothers Construction vs. Superintending Engineer, National Highways, Salem, (AIR
1988, SC 2045) but which, in our opinion, are not quite relevant to the issue before us. In
the first case it was held that a non-reasoned Award, which awards a lumpsum without
specifying the amount awarded under each claim/count is still good between the parties.
It is not open to the Court it was held to set it aside by speculating as to the reasons which
must have impelled the arbitrator to
come to the conclusion which he did, nor is it permissible for the purpose to establish by
a process of inference and argument that the arbitrator he committed some mistake in
arriving at his conclusion. In the second case, it was held that a non-reasoned award
which contains no legal proposition which can be said to constitute the basis of the award
cannot be interfered with by the Court.
23. We are, therefore, of the opinion that the decisions relied upon by Mr.
Ramachandra Reddy do not lay down the proposition that where an award is questioned
on the ground that the arbitrator had no jurisdiction to entertain a claim by virtue of the
terms of the contract the court is precluded from looking to the terms of the contract. On
the contrary such a power is expressly recognized in one of the decision cited, viz.,
Sudarsan Trading Company vs. The Government of Kerala & another (7 supra). Further,
as held by the Supreme Court in Continental Construction Co., Ltd. vs. State of Madhya
Pradesh (4 supra), where the argument bars a particular claim, the arbitrator has no
jurisdiction to award any amount towards such a claim, and that any such award would be
incompetent and void.
24. There is yet another objection to the competency of the arbitrator to award any
amount under claim No. i, in this case. A would be evident from the claim of the
respondent-contractor (extracted herein before), the claim for compensation pertains
(except in this case of one pier/K7) to the period of contract. The period of contract
stipulated in the agreement expired on 21- 12-1973. Out of 9 items, mentioned in the
Table (containing particulars of compensation), 8 items pertain to the original period of
contract itself. Moreover, in the case, it was agreed between the parties even before the
formal agreement was executed that the period of contract shall be extended by six
months, which is evident from the respondents letter, dated 13-3-70 referred to above.
(The formal contract was executed in this case on 17-6-70). It must, therefore, be
assumed that in this case the period of contract expired on 21-6-74. In any event, even if
we take the original period of contract, the claim for compensation to a very major extent
pertains to the original period of contract. The question is whether any claim for
compensation is permissible for the original period of contract? It was held by a Bench of
this Court of which one of us (Jeevan Reddy, 3.) was a member in A.A.O.No. 786/1986,
dated 1-12- 1988, that such a claim is not permissible by virtue of Clause 59 of the
APDSS. We may also mention that in this decision the Bench distinguished another
decision of this Court in State of Andhra Pradesh vs. R. V. Rajaram, (1988(1), APLJ
536), where the contractors claim on account of statutory increase in the minimum
wages and other categories of labour was allowed by the arbitrator and upheld by the
Court. We need not, whoever, refer to the facts and principles of the said decision since
in the case before us the claim is not similar to the one in the said case. As already stated,
in the case before us the claim is squarely one for compensation which is worked out on
two bases, viz., (i) rise in consumers price-index, and (ii) establishment and overhead
charges and a large portion of the claim pertains to the original period of contract itself.
25. We may also state that it is not possible for us to apportion the amount
awarded for the original period of contract and the amount awarded for the extended
period, even assuming that the arbitrator was competent to make such an award for the
extended period of contract.
26. For the above reasons, we are of the opinion that the arbitrator exceeded his
jurisdiction in awarding the amount of Rs. 2,81,800/- under claim No. 1. The award of
the said amount is liable to be deleted from the Award.
27. Accordingly, the Civil Miscellaneous Appeal and the Civil Revision Petition
are allowed in part, the amount awarded by the arbitrator under claim No. 1 shall be
deleted. It is also held that the arbitrator had no power, in law to award interest for the
period commencing from the date of Award till the date of decree of the Civil Court.
However, the respondent-contractor shall be entitled to interest from the date of the
decree (i.e., from 19-2-1985) at the rate of 15% per annum till realization. We are
awarding interest at the rate of 15% per annum since that happens to be the rate which
was adopted by the arbitrator in the Award. There shall be no order as to costs.
____
JUDGMENT
CLAIM FOR COMPENSATION WAWER OF RIGHT (P.S. 59)

BY THE DEPARTMENT
1996 (3) ALT 53 (D.B.)
The Honble Mr. Justice P. Venkatarama Reddy

and
The Honble Mr. Justice G. Bikshapathy
M. Gangareddy Petitioner.
vs.
State of A.P. Respondent.
Judgment
(Judgment of the Bench delivered by Venkatarama Reddy, J.)
Held:
In Prasad and Companys case [1995 (3) ALT 537], the Division Bench, of
which one of us (Venkatarama Reddi, J.) was a member, held that escalation over and
above the agreed rates during the currency of the agreement period was clearly barred by
P.S. 59 of APDSS. In Ramalinga Reddy s case (1994 (5) SCALE 67), the Supreme
Court had gone a step further and held that the claim for the payment of extra rate even
for the workdone beyond the agreement period was unsustainable in the light of the
specific prohibition contained in Clause 59. However, it is not discernible from the
Judgment whether the prolongation of the contract was for reasons attributable to the
contractor or on account of breach of contractual obligations by the employer as in the
instant case. Be that as it may, even assuming that Clause 59 would have in the normal
course come in the way of the petitioner claiming escalation in rates for the work done
beyond the contractual period, the special facts and circumstances of this case stand apart
and do not attract the bar of Clause 59. We agree with the learned counsel for the
contractor that the immunity conferred by the exclusionary clause 59 must be deemed to
have been waived and the Department is estopped from taking shelter under it. (Para 8)
On the facts of the case, it can be reasonably said that there was waiver f the right
to enforce Clause 59. Alternatively, we hold that the arbitrators finding that there was an
assurance to pay the extra rates cannot be said to be perverse or vitiated by an error of
law apparent on the face of the award. The assurance may not be direct or express but it
is possible to take the view that there was an implied promise to pay the extra rates for
the work done beyond the agreement period notwithstanding Clause 59. The promise had
emanated from a competent officer who signed the agreement itself. If the view taken by
the arbitrator is reasonably possible or plausible, we cannot interfere with the award on
the ground of error apparent on the face of the award. We, therefore, uphold the award in
regard to Claim No. 1 (e) and the learned Additional Judge, City Civil Court was justified
in confirming the award to this item. (Para 11)
Further see also S.E., Irrigation and another vs. M/s. Progressive Engineering
Co. Hyd and others, 1997 (2) ALT 701 (D.B.)
_____
JUDGMENT
PROHIBITION OF PAYMENT OF ANY AMOUNT OVER AND ABOVE THE

CONTRACTUAL RATE IS APPLICABLE TO COMPENSATION
BUT NOT IN THE RATES FOR THE WORK DONE
It was held by a Division Bench of A.P. High Court, in State of A.P. vs. S.S.
Reddy, reported in 1988(2), A.P.L.J., pages 465 to 469, consisting of Mrs. Justice
Amareswari and Bhaskar Rao, J., that Clause 59 pertains to compensation. If the present
case, we are concerned with the rates for the work done. The Contractor is not claiming
any compensation for loss or damage or loss of profit which he would have made but for
the delay committed by the department. What is asked for here is that beyond the
contractual date he must be paid as per the standard specification rates as the site was not
handed over in time due to the fault of the department itself. We do not think P.S. 59 has
any application at all. (Para 9)
The major portion of the site was handed over beyond the period of agreement
during which period the cost of labour and other materials have gone up. Without the site
it was impossible for the contractor to complete the work and what the Arbitrators have
done is only permit the contractor to claim the rates prevalent as per the S.S. Rs. in force.
In our view, it is not prohibited either under the A.P.D.S.S. Rules or by and clause in the
agreement. (Para 9)
LAPSE ON THE PART OF THE DEPARTMENT IN NOT HANDING

OVER THE SITE TO THE CONTRACTOR TN FULL AT A TIME -
CONTRACTOR IS ENTITLED TO BE PAID AT THE STANDARD
SCHEDULE OF RATES TN FORCE
Held :After the lapse of more than 2 years from the stipulated date of
completion namely, 13-11-1979, extension of time was granted by the department upto
September, 1982. This clearly shows that there was lapse on the part of the department in
not handing over the site to the Contractor in full at a time, since
there is an increase in the cost of labour, material and machinery during the period
beyond the agreement, the claimants are entitled to be paid at the standard schedule of
rates in force. (Para 12)
JUDGEMENT
(Judgment of the Bench delivered by Amareswari, J.)
1. These three appeals arise out of a common order of the IInd Additional Judge,
City Civil Court, Hyderabad, dated 27-12-1983. The matter arises under arbitration
proceedings.
2. O.S.No. 1557 of 1982 is filed under Sections 14 and 17 of the Arbitration Act
for making the award the rule of the Court and O.P.No. 377 of 1983 is filed under
Sections 30 and 33 of the Indian Arbitration Act for setting aside the award.
3. The Executive Engineer, Roads and Buildings Department entered into an

agreement with Shivraj Reddy, (3rd defendant in O.S.No. 1557 of 1982) on 14-7-1978
formation including metalling and Block topping of inner ring road at Uppal junction. As
disputes arose between the parties, the matter was referred to a panel of Arbitrator as per
the terms of the agreement. The Contractor made as many as 7 claims. The Arbitrators
allowed Claims 1(a) and 1(b) and rejected the other claims by their award, dated 13-9-
1982, Ex. A-i. Thereafter, the Arbitrators filed O.S.No.l557 of 1982 for making the award
the rule of the Court. The award is contested by the 1st and 2nd defendants.
4. The Contractor filed a written statement that the award should be made the rule
of the Court. The trial Court, after considering the material on record made the award the
rule of the Court and dismissed the O.P. filed by the 1st and 2nd defendants to set aside
the award.
5. Aggrieved thereby, the State preferred two appeals C.M.A. Nos. 470 and 471
of 1984 and Contractor preferred one C.M.A. No. 820 of 1984. The main contention of
the appellant-Government is that the Arbitrators exceeded their jurisdiction in accepting
claims 1(a) and 1(b) and the trial Court should have set aside the award to that extent.
6. In this case tenders were invited for the work in early 1977. Tenders were made
by the 3rd defendant on 2-5-1977 and the final agreement was concluded on 14-10-1978.
On 27-11-1978 the Department instead of handing over the entire site in one stretch, only
a portion was handed over to the Contractor with an assurance that the remaining portion
will be handed over shortly. The remaining site was handed over in bits on 23-7-1980 and
on 11-12-1981. That was more than 2 years from the stipulated date of completion on 26-
11-1979. The Contractor made a claim under head 1(a) for the work done upto the period
of agreed date of completion namely, 26-11-1979 for payment at the rates agreed to in
Schedule A and for quantities of work done beyond the agreed date of 26-11.1979 upto
31-12-1981 at the standard specification rates in force during the period of execution plus
over all tender percentage amounting to Rs. 2,43,800/-. The Arbitrators accepted the
claim of the Contractor in this regard and granted rates as originally agreed for the work
done upto the period of originally agreed date of completion
and for the work done thereafter at the standard specification rates in force during the
period of execution of further work beyond the date of completion pins over all accepted
percentage.
7. The main submission of Miss. V. Lakshmi Devi, the learned Counsel for the
appellant is that Clause 59 of the Andhra Pradesh Detailed Standard Specification Rules
prohibits payment of any amount over and above the contractual rate. In support of this
contention, she relied upon a decision of the Division Bench of this Court in C.M.A.
No.677 of 1981 and C.R.P. No.385 of 1982, dated 19-4- 1982.
8. P.S. 59 of the Andhra Pradesh Detailed Standard Specifications is as follows:
P.s. 59. Delays and extension of time :x x x
9. In our view P.S. 59 has no application. It pertains to compensation. In the

present case, we are concerned with the rates for the work done. The Contractor is not
claiming any compensation for loss or damage or loss of profit which he would have
made but for the delay committed by the department. What is asked for here is that
beyond the contractual date he must be paid as per the standard specification rates as the
site was not handed over in time due to the fault of the department itself. We do not think
P.S. 59 has any application at all. The decision of the Division Bench referred to by the
learned Government Pleader has no relevance in the present context. In this Division
Bench case, the contractor having agreed for reduction of rates and executing the final
agreement, demanded escalation of rates complaining that the department committed
delays and defaults. The Government relied upon Clause 59 and Foot Note 7 of Schedule
A which prohibited payment of rates at the enhanced rates even during the extended
period. The Division Bench negatived the claim of the Contractor on the ground that the
Foot Note 7 is clear to the effect that the agreed rate should prevail even during the
extended period of the agreement. The judgment of the Division Bench was more based
on the specific prohibition contained in Foot Note 7 of Schedule A of the agreement
therein. There is no such clause in the present agreement. It is not a case of escalation of
rates. Here the major portion of the site was handed over beyond the period of agreement
during which period the cost of labour and other materials have gone up. Without the site
it was impossible for the contractor to complete the work and what the Arbitrators have
done is only to permit the contractor to claim the rates prevalent as per the S.S.Rs. in
force. In our view, it is not prohibited either under the APDSS Rules or by any clause in
the agreement.
10. In Chellappan vs. Kerala State Electricity Board, (2) AIR 1975, Supreme
Court, Page 230, it was held that the award can be set aside only when it is vitiated by an
error of law apparent on the face of the record.
11. In Jeevarai Bai vs. Chintamani Rao, (3) AIR 1965, Supreme Court, Page 214,
it was held that the Courts cannot interfere with the decision of the Arbitrators on the
ground that a different conclusion is possible. The adjudication by the Arbitrators must be
considered as binding for he is a Tribunal selected by the parties.
12. As per the agreement, the work has to be completed within 12 months from
the date of handing over the site. A portion of the site was handed over on 27-11-1978
and the remaining portion in bits on 23-7-1980 and 16-12-1981. After the lapse of more
than 2 years from the stipulated date of completion namely, 30-11-1979, extension of
time was granted by the department upto September, 1982. This clearly shows that there
was a lapse on the part of the department in not handing over the site to the Contractor in
full at a time, since there is an increase in the cost of labour, material and machinery
during the period beyond the agreement, the claimants are entitled to be paid at the
standard schedule of rates in force. The award of the arbitrators is just and reasonable and
it is not vitiated by an error of law apparent on the face of the record.
13. In the result, the appeals preferred by the State dismissed with costs.
14. In C.M.A.No. 820 of 1984 preferred by the Contractor, it is contented that the
decree is not in accordance with the award passed by the Arbitrators. We find substance
in this connection. While the judgment said that the award is made the rule of the Court,
the decree refers to only one relief viz., that the contractor should be paid at the standard
schedule of rates in force from December, 1979 to June, 1980, July, 1980 to June, 1981
and July, 1981 to September, 1982 plus the accepted over all tender percentage. The
decree does not refer to Claim No. 1(a) which was allowed by the Arbitrators namely that
for the work done upto the period of original agreed rate of completion, the Contractor is
entitled at the rates agreed to in Schedule A including the work done in excess of the
quantities in Schedule A. Claim 1(b) which was also allowed by the Arbitrators says
that the Contractor is entitled for payment at the S.S.Rs. in force for the work done
beyond the original agreed date of completion during the period of execution of further
work plus over all accepted tender percentage. Hence the decree of the lower Court is
modified in terms of the award to the following effect:
(1) The defendants 1 and 2 shall pay the contractor, 3rd defendant at he agreed
rates in Schedule A including the work done in excess of the quantities in Schedule A
(2) The defendants 1 and 2 shall pay defendant No. 3 Contractor at the standard
schedule of rates-in force for the further work done beyond the originally stipulated date
of completion i.e., 30-11-1979 till the date of completion plus the accepted over all tender
percentage; and
(3) The amount deposited by the Department and withdrawn by the contractor
shall be adjusted in the final payment.
C.M.A. No. 820 of 1984 is allowed. No costs.
_____
JUDGMENT
CERTAIN CLAUSES OF P.S. 59 ARE ARBITRARY AND UNJUST
HON BLE SRI JUSTICE K RAMASWAMY
W.P.No. 9797 of 1983, dated 25-1-1988 (Reported in 1988 (1) A.L.T. 461
V. Raghunadha Rao Petitioner
vs.
State of A.P. and others Respondents
Held :The execution of the Government contracts has constitutional flavour

emanating from Articles 298 and 299 of the Constitution. Public law element imposes
limitation of imports and obligation upon the States executive power to conform to rule
of law. It cannot compel a citizen or person to forego the constitutional or statutory rights
as a condition to grant contracts. The conditions! covenants must satisfy the rigour of
Article 14 unless they are otherwise constitutionally authorized. Thereby the imposition
of the unconstitutional conditions is ultravires the executive power of the State. (Para 13)
Unless sufficient long time is given between the date of unilateral calling of the
tenders and the last date to submit tender, clause 11 remains to be a mere paper statement
affording no adequate opportunity to the intending contractor. Paragraph 2 of Clause II
by itself cannot be declared to be perse arbitrary but on a given facts and circumstances
and it has to be tested with reference to the timelag and relief given to the parties. (Para
41)
Limiting or self-relieving obligations on the part of the State are self- exculpatory
and breeding source to extra-constitutional behaviour. Omission to recompose a
contractor of the damages or loss suffered due to inaction, non- performance or under
performance or substantial unilateral variation of the terms of the contract are obnoxious
to justness, fairness, or reasonableness offending Article 14. Thus considered, the
opening part of first sub-clause of clause 59 and the supplementary specifications
(relieving the liability of the State) are arbitrary, unreasonable, unjust, unfair, and
unconscionable. (Para 42).
The Executive Engineer and the Superintending Engineer are the subordinates to
the State. Their decision shall not be made final and conclusive but must be left to a
decision, though may be raised at a later stage by an independent authority, viz., the
Court or an independent arbitrator or panel of arbitrators. No one shall be a Judge of his
own cause. Clause 29 of the specifications is not arbitrary but the exclusion of the
decisions of the authorities mentioned thereunder (Executive Engineer and
Superintending Engineer) from the purview of arbitration under Clause 73 is invalid
offending Articles 14 and 21. In matters relating to Government contracts fair procedure
is that the disputes shall be referred to an independent arbitrator or panel of arbitrators of
their known integrity. The procedure provided in Clause 73 to refer to an arbitrator or a
body of official arbitrators is an unfair procedure offending Article 21. (Paras 44 and 48)
Under Clause 62(b) power has been given to deduct part amounts pending
execution of the contract. It is an interim measure. Therefore it is not arbitrary. (Para 49)
The decision only applies to the petitioners contract and to the contracts to be
executed hereinafter. (Para 50)
P.S. 60. Delays in commencement or progress or neglect of work and

forfeiture of earnest money, security deposit and withheld amounts :(a) Time shall
be considered as of the essence of the contract. If, at any time the Executive Engineer
shall be of the opinion that contractor is delaying commencement of the work or violating
any of the provisions of the contract or is neglecting or delaying the progress of the work
as defined by the tabular statement Rate of progress in the Articles of agreement, he
shall so advise the contractor in writing and at the same time, demand compliance. If the
contractor neglects to comply with such demand within seven days after receipt of such
notice, it shall then, or at any time thereafter, be lawful for the Executive Engineer to
determine the contract, which determination shall carry with it the forfeiture of the
Security deposit and the total of the amount withheld under Clause 68 below, together
with the value of such work as may have been executed and not paid for, or such
proportion of such total sums, as shah be assessed by the Executive Engineer.
[However, any authority higher in rank than the Executive Engineer may, in his
absolute discretion, waive or modify any penalty or forfeiture imposed by the Executive
Engineer, under the provisions of the clause].
[Added by G.O.Ms.No. 1007, Tr.Roads & Blds.(C1) Dept., Dt. 5-11-1976]
[(b) If, however, the Executive Engineer notwithstanding the failure of the
contractor to comply with the demand referred to in sub-clause (a) of this clause or
failure to maintain the Rate of Progress specified in the Articles of Agreement plus
any extension of time that may have been allowed to the contractor as defined in Clause
59, shall permit the contractor to proceed with the whole or part and continue and
complete the whole or such part of the work, such permission shall not be deemed to be a
waiver in any respect by the Executive Engineer of the right of forfeiture under this
clause:
Provided however that any such forfeiture under this sub-clause shall not exceed 5
per cent of the total of the contract amount:
Provided however that any authority higher in rank than the Executive Engineer
may in his absolute discretion waive or modify any penalty or forfeiture imposed by the
Executive Engineer under the provisions of this clause].
[Amended by Memo No. 972, Codn./74-5, P.W.D., Dt. 18-9-1974]
(c) It shall be a further right of the Executive Engineer, under this clause, at any
time the Rate of Progress in the agreement is not maintained, to give any part of the
work to any other contractor at his discretion, in order to maintain the Rae of progress
upon the completion of that part of the work that is withdrawn. the Executive Engineer
shall certify the amount of expenditure incurred by the department for getting it
completed by another contractor or contractors. Should the amount so certified be less
than the amount which would have been due to the contractor on the completion of that
part of the work by him, the difference shall not be paid to the contractor. [Should,
however the former exceed the latter, the difference shall be recovered from the
contractor by the Government, provided however that such a recovery shall not exceed
5% of the total contract amount.
[Subs. by G.O.Ms.No. 140, Tr.R & B(B. III), Dept., Dt. 1-7-1992]
[Note :The contractor who makes a standing security deposit of Rs. 1,00,000
(Rs. one lakh) with the Chief Engineer under whom he wishes to tender
for works is eligible for concessional rates of Earnest money deposit and retention from
bills. However, for the purpose of forfeiture under the above clause, security deposit will
be reckoned at the normal rate, assuming that there is no standing security and not at the
concessional rate].
[Amended by G.O.Ms.No. 471, Tr., R.&B. (C) Dept., Dt. 7-10-1983]
Clarification
Execution of Balance work after determination of Contract under

Clause 60(c) of P.S. to A.P.D.S.S.
[Memo.No. 1778/C1/78-18, Tr.&R.B. (CI) Dept.. Dt. 10-8-1981]
Clarification has been made as to the mode of execution of balance Work and the
rate of which it may let out.
It is clarified that the Executive Engineer should have the right to allot the balance
work on nomination to any other contractor at his description in order to maintain the rate
and progress. No tenders need be invited so long as the Executive Engineer can get the
balance work executed satisfactorily at the rate in the agreement of the original
contractor. If the Executive Engineer is, however unable to find a contractor to execute
the balance work at the original agreement rate, he shall call for tenders at short notice
and obtain realistic rates. If the work so covered out and completed by the other
contractor or contractors involves any extra cost, the difference shall be received from the
original contractor under Clause 60(c) aforesaid provided, however, that such recovery
shall not exceed 5% of the total finished contract amount.
P.S. 61. Suspension of the works by the Contractor :If, the contractor
(except on account of any legal restraint not occasioned by his own wilful act or default
or orders from Government preventing the continuance of act or default or orders from
Government preventing the continuance of the extension of time has been sanctioned by
competent authority) shall suspend the works, or sublet the work or a portion thereof
without sanction of the Executive Engineer, or in the opinion of the Executive Engineer,
shall neglect or fail to proceed with due diligence in the performance of his part of the
contract as laid down in the schedule rate of progress, or if he shall continue to default or
repeat such default in the respects mentioned in Clause 27 the Executive Engineer shall
have power to give notice in writing to the contractor requiring that the works be
proceeded with in accordance with the terms of the contract. Such notice shall not be
unreasonable, or vexatiously given, and must signify that it purports to be a notice under
the provisions of this clause, and must specify that act or default on the part of the
contractor upon which it is based. After such notice shall have been given, the contractor
shall not be at liberty to remove from the site or the works, or from the ground contiguous
thereto, any plant or materials belonging to him, which shall have been placed thereon for
the purpose of the work; and Government shall have a lien upon all such plant and
materials, to subsist from the date of such notice being given until the notice shall have
been complied with. The Government shall have power to post watchmen at the site of
the works and or the ground contiguous thereto in order to prevent the removal of any
plant or materials upon which the Government shall have a lien. If the contractor shall
fail, for fourteen days after such notice has been given, to comply with the same to the
satisfaction of the Executive Engineer as certified by him in writing, Government may
enter upon and take possession of the works and
site, and of all such plant and materials thereon (or any ground contiguous thereto) and all
such plant and materials as above mentioned shall thereupon be at the disposal of
Government absolutely, for the purpose of completing the work.
If Government shall exercise the above power to enter upon the works and take
possession of the works, plant and materials they may engage any other person to
complete the works, and exclude the contractor, his agents and servants from entry upon
or access to the same, except that the contractor or any person nominated by him may
have access at all reasonable times to inspect, survey and measure the works already
executed by him. And Government shall thereupon take such steps as they may consider
necessary for completing the works without undue delay or expense, using for that
purpose the plant and materials above mentioned and obtain such additional plant and
materials as the Executive Engineer shall decide is necessary for the due prosecution and
competition of the work. Upon the completion of the works, the Executive Engineer shall
certify the amount of the expenses properly incurred consequent on, and incidental to, the
default of the contractor as aforesaid and in having the works completed by other persons
having credited the contractor with the value of the materials utilized as aforesaid. Should
the amount so certified be less than the amount which would have been due to the
contractor on the completion of the works by him the difference shall not be paid to the
contractor by Government; should the amount of the former exceed the latter, the
difference shall be paid by the contractor to Government. Government shall not be liable
to make any payment to the contractor on account of the use of such plant for the
completion of the works under the provisions hereinbefore contained. Government may
at any time give notice in writing to the contractor to remove any of his plant or materials
from the site and not required for completion of the works. If such plant and or materials
are not removed within fourteen days after notice shall have been so given Government
may remove and sell the same, holding the proceeds less the cost of removal and sale, to
the credit of the contractor.
In case Government shall exercise the power contained in this clause and shall
complete the works by any other person as therein provided, the Executive Engineer,
after instituting such inquiries as he may deem fit, with or without notice to the
contractor, shall certify what amount (if any) had at the time of the Government
exercising such power as aforesaid, been reasonably earned or would reasonably accrue
to the contractor in respect of work then actually done by him in the premises and such
certificate shall be final and binding on the contractor.
Notwithstanding anything contained in Clause 50 above, when possession of the

work and site is taken by Government in exercise of the power contained in this clause
the portion of the work actually completed by the contractor in the premises shall be
maintained by Government as the risk and expense of the contractor until the whole of
the work is completed by other agency and possession thereof taken by Government.
I. Particulars of Payment
P.S. 62. Payment on lump-sum basis or by final measurement or unit
prices:(a) Payment for the work done by the contractor will be made on the basis of
the measurements recorded in the measurement books or level field books
Particulars of Payment 77
by an officer not below the rank of the Supervisor and check measured by an officer not
below the rank of an Assistant Engineer. The measurements will be recorded at the
various stages of the work, while it is in progress, for the proper assessment of the
quantities of work, done and also after the work is completed or when the contract is
determined. The contractor or his authorized agent shall be present at the recording of
each set of measurement and check measurement and accept them, then and there, so as
to avoid disputes at a later stage. The set of measurements and check measurements may
also be taken by the Department even in the absence of the contractor or his authorized
agent, three days after the issue of a notice to the later, in writing of such intention by the
department.
[Subs. by G.O.Ms.No. 1007, Tr., Roads & Blds. (C1) Dept., Dt. 5-11-1976]
(b) In cases of over-payment or wrong payment made, if any, to the contractor

due to wrong interpretation of the provisions of the contract, the Andhra Pradesh
Standard Specification or otherwise, such unauthorized payment will be deducted in the
subsequent bills or final bill of the work, or failing that, from the bills under any other
contract with the Government or at any time thereafter, from his security deposits
available with the department.
[Subs. by G0.Ms.No. 1007, Tr., Roads & Blds. (Cl) Dept., Dt. 5-11-1976]
(c) It shall be accepted as a condition of the contract that a payment of the final
bill to the contractor less the withheld amount and his acceptance thereof shall constitute
a full and absolute release of Government from all further claims by the contractor under
the contract.
P.S. 63. Payment for additions and deductions for omissions:- The contractor
is bound to execute all supplemental items that are found essential, incidental and
inevitable during the execution of the work, at the rates to be worked out as detailed
below
[(a) For all items of work in excess of the quantities shown in Schedule A of the
tender the rates payable for such items shall be either the tender rates or the standard
schedule of rates for the items plus or minus the overall tender percentage accepted by
the competent authority whichever is less.
(b) For items directly deducible from similar items in the agreement, the rates
shall be derived by adding to or subtracting from the agreement rate of such similar item,
the cost of difference in quantity of material or labour between the new items and the
similar items in the agreement, worked out with reference to the Schedule of rates
adopted in the sanctioned estimate plus or minus the over all tender percentage].
[Subs. by G.O.Ms.No. 1007, Tr., Roads & Blds. (C) Dept., Dt. 5-11-1976]
(c) For new items which do not correspond to any items in the agreement, the
rates shall be the standard schedule rate plus or minus the overall tender percentage.
The terms standard schedule of rates used in the above sub-clauses (a), (b) & (c)
means the schedule of rates on which the sanctioned estimate was prepared.
(d) In the event of the Executive Engineer and the Contractor failing to agree on a
rate for such additional work, the Executive Engineer may, at his opinion either :
(i) employ other parties to carry out the additional work in the same
manner as provided for under Clause 48, or
(ii) the contractor shall execute the work upon written orders from the
Executive Engineer and the cost of labour and materials plus 10 per cent thereon shall be
allowed therefor, provided that the vouchers for the labour and materials employed shall
have been delivered to the Executive Engineer or his representative within seven days
after such work shall have been completed. If the Executive Engineer considers that
payment for such work on the basis of the vouchers presented is unduly high, he shall
make payment in accordance with such valuation as he considers fair and reasonable and
his decision to the matter shall be final, if the amount involved in additional payment is
Rs. 1,000 or less, for each occasion on which such additional works shall have been
authorized. If such amount exceeds Rs. 1,000, the contractor shall have the right to
submit the matter to arbitration under the provisions of the arbitration Clause 73.
(e) If, in the opinion of the Executive Engineer, a rate for the additional work is
not capable of being properly arrived at prior to execution of work, or if the work is not
capable of being properly measured, then the cost and payment thereof shall be dealt with
as provided for in the preceding sub-clause (d)(ii).
P.s. 64. No payment for unsanctioned extras :It shall be distinctly understood
that no payment whatever will be made to the contractor for variations by way of extras
in cases where such variations have been made without the written sanction of the
Executive Engineer.
P.S. 65. Accounts, receipts and vouchers :The contractor shall at any time,
upon the request of the Executive Engineer furnish him with all invoices, accounts,
receipts and other vouchers that he may require in connection with the contract.
P.S. 66. Fraud, wilful neglect or default :No final or other certificate of
payment of completion, acceptance or settlement of account shall, in any circumstances,
relieve the contractor from his liability for any fraud or wilful neglect or default in the
execution of the contract or any wilful or unauthorized deviations from the drawings,
specifications, instructions and directions for the time being binding upon him.
P.S. 67. Unfixed materials :No payment or advance will be made for unfixed
materials when the rates are for finished work in site.
P.S. 68. Payments and certificates :Payment will be made to the contractor
under the certificate to be issued at reasonably frequent intervals by the Executive
Engineer or by the sub-divisional officer. Within fourteen days of the date of each
certificate, an intermediate payment will be made by the Executive Engineer or the sub-
divisional officer of a sum equal to 92 per cent (96 % in the case of contractors who
have lodged the standing security deposit of [Rs. 1,00,000) (Rs. 1-00 lakh)] of the value
of work, as so certified and the balance of 7 percent, (3% in the case of contractors
who have the standing security deposit) will be withheld and retained as a security for the
due fulfilment of the contractor. Under the certificate to be issued by the Executive
Engineer or the Sub-
Divisional Officer on the completion of the entire works the contractor will receive the
final payment of all the moneys due or payable to him under or by virtue of the contractor
except earnest money deposit retained as security and a sum equal to 2 % of the total
value of the work done, provided there is no recovery from or forfeiture by the contractor
to be made under Clause 60. The amount withheld from the final bill will be retained
under deposits and paid to the contractor together with the earnest money deposit
retained as security after a period of six months as all defects shall have been made good
according to the true intent and meaning thereof. However in the case of works like
conveyance of materials, supply of materials, slit clearance where the fixation of
observation period is not necessary, the deposit amount could be refunded after the work
is completed in accordance with the terms of the agreement.
[Subs. by G.O.Ms.No. 471, Tr., Roads & Blds. (Cl) Dept., Dt. 7-10-1983]
No certificate of the Executive Engineer or the Sub-Divisional Officer shall be

considered conclusive evidence as to the sufficiency of any work or materials or
correctness of measurements to which it relates, nor shall it relieve the contractor from
his liability to make good defects as provided by the contractor. The contractor, when
applying for a certificate, shall prepare a sufficiently detailed bill, based on the original
figures of quantities and rates in the contract (Schedule A) to the satisfaction of the
Executive Engineer, to enable the Executive Engineer or the Sub-Divisional Officer to
check the claim and issue the certificate. The certificate as to such of the claims
mentioned in the application as are allowed by the Executive Engineer or the Sub-
Divisional Officer shall be issued within fourteen days of the application. No application
for a certificate shall be made within fourteen days of a previous application.
In calculating the amount of each item due to contractor in every bill submitted
for payment under this contract, fractions of below five paise shall be omitted and five
paise or over shall be reckoned as ten paise. In calculating the total on each bill
amounting to Rs. 25 or more under this contract, fractions of less than half rupee shall be
disregarded and half a rupee and over shall be reckoned as one rupee.
[The above clause will not apply to contracts entered into for designing,
manufacture, supply, erection, testing, etc. (mechanical contracts) where special
conditions are incorporated providing for retention of 10% of the contract value for
twelve months after the payment upto 90% on erection and testing].
[Inserted by G.O.Ms.No. 416, T., R. & B. (C) Dept., Dt. 27-12-1980]
P.S. 69. Interest on money due to the contractor :(a) No omission by the
Executive Engineer or the Sub-Divisional Officer to pay the amount due upon certificates
shall vitiate or make void the contract, nor shall the contractor be entitled to interest upon
any guarantee fund or payments in arrear, nor upon any balance which may, on the final
settlement of his accounts, be found to be due to him.
(b) Whenever the withheld amount reaches Rs. 1,000 or a multiple thereof, the
contractor may, at his option, deposit with Executive Engineer Rs. 1,000 or a multiple
thereof, in any of the forms of interest bearing securities recognized for
the purpose by the Andhra Pradesh Public Works Accounts Code and subject to the
provisions therein contained, in which case in the equivalent withheld amount shall be
paid to him forthwith. The contractor will be permitted to exercise the option in this
clause, subject only to the condition that the rate of progress contained in the Articles of
Agreement is properly maintained.
JUDGMENT
CANNOT BE CONSTRUED AS A TOTAL PROHIBITION OF

PAYMENT OF INTEREST
1989(1) ALT 195
The Hon ble Mr. Justice P. Kodandaramayya
Appeal No. 932 of 1986 and Memo. of Cross Objections, Dt. 5-2-1988
A.P.S.R.T.C. rep. by its General Manager

(Now re-designated as Managing Director)
Mushirabad, Hyderabad and others Appellant
vs.
P. Ramanareddi Respondent
Judgement
The Andhra Pradesh State Road Transport Corporation represented by its

Managing Director, the first defendant and its officers, defendants 2 and 3, are the
appellants in this appeal. The suit is laid for recovery of Rs. 81,018-93 Ps. towards the
work done for the Corporation for constructing a building and bus stand at Srikalahasthi,
Chittoor District.
2. The plaintiff case in short is that the plaintiff entered into an agreement Ex. A-i
on 19-11-1978 and the work was completed on 22-5-1980 and the amount due to him
under the work done by him and the deposits refundable to him were not paid even after
22-11-1980, six months period stipulated under the contract and with the details given in
the plaint the suit claim is made with interest. The defence is that the plaintiff failed to
comply with the terms of the contract and for recovery of amount due for two items 37
and 38 a separate suit was filed, by the plaintiff and the plaintiff refused to sign the final
bill and declined to accept the estimate-made by them and he is entitled to Rs. 21,401-48
Ps., towards the work done and Rs. 30,531/- towards deposits and a sum of Rs. 49,082-22
Ps., has to be adjusted from the bills and hence he is entitled to only a sum of Rs. 2,850-
25 Ps.
3. On this controversy, very strangely, the Court below framed a solitary issue,
whether the plaintiff is entitled to recover suit amount, from the defendants as prayed for.
This can hardly be described as a satisfactory method of framing issues. No doubt it
discussed the evidence in respect of each item claimed by the defendant for being
adjusted but took the view that the claim of the defendant constitutes set-off and in as
much as the Court-fee is not paid no claim can be sustained even in respect of the items
found due to the defendant which are liable to be deducted from the bill. However, in
view of the admission made by the
defendants that a sum of Rs. 51,922-48 Ps., is due negativing the claim of the plaintiff for
Rs. 49,082-22 Ps., decreed the suit for the said sum with interest at 12% p.a. from 22-1-
1980 upto the filing of the suit and also granted interest on Rs. 7 1,653-02 Ps., at 6% per
annum from the date of the suit till the date of realization. Against this decree and
judgment the present appeal is filed.
4. The learned counsel for the appellants, Sri K. Harinath, argued three questions
before me.
1. The view of the trial Court that the deductions sought from the bill
payable to the plaintiff constitute set off is incorrect and no Court-fee need be paid and
the claim of the defendants for adjustment of these items must be examined on merits.
2. Awarding of interest at 12% per annum from 22-1-1980 the date of

completion of contract is illegal and further awarding interest on interest is illegal.
3. He also canvassed the correctness of the finding of the trial Court on the
items claimed by the defendants.
5. It is true as per Section 8 of the Andhra Pradesh Court-fees and Suits Valuation
Act, 1956 (Act VII of 1956) a written statement pleading a set-off or counter-claim shall
be chargeable with fee in the same manner as plaint. It is necessary to examine whether
the present claim of deduction made by the defendants constitutes set-off. A perusal of
Ex. A-i shows the items supplied by the Corporation such as cement, steel and other
material had to be deducted in order to arrive at the total bill payable. They are virtually
in the nature of payments in kind. But they are not sums of money payable to the
defendants under the terms of the contract. If the total sum payable has to be arrived at on
the adjustment of these amounts, it does not amount to set-off and no Court-fee need be
payable. I may usefully refer to the following dicta of the Supreme Court in this regard
reported in M/s. Lakshmichand & Baichand vs. State of Andhra Pradesh, (1986(2), APLJ
45). No doubt in that case the question of Court-fee did not arise. It is also a case where
some amounts were deducted by the Government for the work done while upholding the
right of set-off. While dealing with the right of the defendant to claim set-off in the
execution proceedings under Order XXI, Rule 18 of the C.P.C., the Supreme Court
observed as follows with reference to Clause 68 of the contract which enables final
payment to be made to the contractor after taking into account the amount which had
been received by him earlier. They described such amount and the process of deduction
as adjustment. The passage runs thus
So far as the first claim to adjustment is concerned, t1ie matter is covered

by Clause 68 of the contract. What was awarded to the contractor under the
decree was an amount relating to a part only of the work entrusted to him. The
contract was still in the process of execution. Any amount claimed by him for
such work was subject to a final settlement of account on the preparation of the
final bill. The right to payment depended on the terms of the contract. Any
payment made while the contract was still being worked out was in the nature of a
provisional payment. It is always subject to adjustment against amounts found due
against the contractor on preparation
of the final bill. Such adjustment was implied in the very terms of the contract.
Therefore, in regard to the adjustment claimed by the State Government on the
first count the High Court is right in our opinion, in holding that the amount
claimed by the State Government as determined on arbitration, was entitled to set
off against the decretal amount claimed by the contractor and that payment of the
decretal amount was to be subject to such adjustment.
6. Though in this case the finding is in respect of set-off, the passage is relied
upon very rightly by the learned counsel to show that it is really in the nature of
adjustment. No doubt the Court is not concerned with reference to the Court fee payable
but only substantive right of set-off. It is necessary to remember that even if adjustment is
made if a dispute is raised about the right to adjustment, the Court may have to examine
it. It is not as if the adjustment pleaded will be accepted automatically or it must be one
which is indisputable. We are concerned with the problem of payment of Court-fee. The
Court is bound to make any enquiry and adjudicate the rights of the parties irrespective of
the plea raised by the plaintiff whether it is set-off or adjustment, but if it is an
adjustment, no Court-fee need be payable.
7. This view is fairly settled and there are decided judicial opinions on this
question. We have got a similar provision under the Central Court-fee Act, 1870. In
Schedule I, Item 1 which enjoins payment of Court-fee on plaint, written statement
pleading a set-off or counter-claim. Courts have examined this provision and ruled that
when the plea raised is only an adjustment or payment no Court fee need be payable. It is
necessary to distinguish set-off from adjustment. A Full Bench of this Court in
Boganandam Seshaiah vs. Budhi Veerabadrayya, (AIR 1972, A.P. 134; 1971(2), ALT
227 F.B.) defined set-off in the following terms
The principle of set-off may be defined as the extinction of debts of

which two persons are reciprocal debtors to one another, by the credits of which
they are reciprocally creditors to one another.
8. Strouds Judicial Dictionary defines set-off as
(A) A legal set-off is : where there are mutual debts between the
plaintiff and defendant, or if either party sue or be sued as executor or
administrator....one debt may be set against the other.
The author relying on a dicta of Brett L.J., also says, set-off and counter-claim confer
definite and independent remedies upon a defendant against the plaintiff. Thus it is seen,
set-off is a claim that arises under the same transaction which confers a right to recover
the same as an independent debt, but an adjustment or payment in respect of the amount
due to the plaintiff has extinguished the debt as the defendant is not claiming any right to
recover the amount but only seeking to establish that the claim of the plaintiff cannot be
arrived at without reference to the payment or adjustment already made.
9. It is unnecessary to multiply the authority on this question. A Division Bench

of the Orissa High Court in The Tata iron and Steel Co.Ltd. vs. R.N. Gupta, (AIR 1963,
Orissa 174), arising under the Central Court-fee Act rightly took the view holding that:
A plea of satisfaction or extinguishment of a debt or a claim, set up

merely by way of defence is very different. A plea of payment necessarily refers
to a satisfaction or extinguishment of a debt effected prior to the stage of the
defence, whereas a plea of set-off is in the nature of a cross-claim and in effect it
prays for a satisfaction, or extinguishment of a claim, to be made in the future
after the date when the plea has been set up. If it were held to be merely a plea
regarding adjustment of accounts and no more, no Court-Fee would be payable on
the amount mentioned in such a plea.
10. The above case also noticed earlier judgments in support of this view. Hence I
am clearly of opinion that the payment of adjustment is not set-off as the defendant has
no independent right to recover the amount without settling the claim of the plaintiff. It is
not a cross-claim though arising under the same transaction as in the case of set-off.
A plea of satisfaction or extinguishment of a debt or a claim, set up

merely by way of defence is very different. A plea of payment necessarily refers
to a satisfaction or extinguishment of a debt effected prior to the stage of the
defence, whereas a plea of set-off is in the nature of a cross-claim and in effect it
prays for a satisfaction, or extinguishment of a claim, to be made in the future
after the date when the plea has been set up. If it were held to be merely a plea
regarding adjustment of accounts and no more, no Court-Fee would be payable on
the amount mentioned in such a plea.
10. The above case also noticed earlier judgments in support of this view. Hence,
I am clearly of opinion that the payment of adjustment is not set-off as the defendant has
no independent right to recover the amount without settling the claim of the plaintiff. It is
not a cross-claim though arising under the same transaction as in the case of set-off.
11. Applying this principle to the facts of this case, it is clear Ex. A-1 envisages
that the Corporation should supply cement, steel and other material and the price must be
deducted in the bills payable to the plaintiff. The defendant has no right to recover as a
cross-claim though arising under the same transaction. He cannot plead that the plaintiff
must refund these amounts and he will pay the amount due to the plaintiff. On the other
hand, the amount paid by him should go towards the deduction of the claim made by the
plaintiff and hence in the absence of a right to recover as an independent debt due from
the plaintiff it clearly constitutes an adjustment or payment. Accordingly I am of the
opinion that the Court below misdirected itself in thinking that these deductions that have
to be made by the Corporation are in the nature of counter-claim and Court-fee requires
to be paid.
12. Fortunately the Court below alternatively examined each item claimed by the
defendant and rejected all the items except two items. But at the end of the judgment it
held that in view of the non-payment of Court-fee no claim made by the defendant can be
examined and hence I have new no examine the claim of the defendant on merits as I
hold that no Court-fee need be paid.
13. Now I shall deal with the merits of the case.
14. The defendant claimed as many as 8 items to be deducted out of the amounts
admitted by him due to the plaintiff. The first item is cement supplied
to the plaintiff. The defendants counsel made two alternative submissions. (1) The Court
below decreed only the amount admitted by the defendant i.e., Rs.51,932-43 Ps., but did
not deduct even 6.25 metric tons of cement admittedly deducted by the plaintiff in his
plaint while arriving at the total sum payable to him. Secondly the value of cement is not
125 bags as claimed by the plaintiff, but it must be 267 bags. This is refuted by the
learned counsel for the plaintiff stating no doubt the plaintiff deducted 6.25 metric tons of
cement in the plaint but on that basis total amount arrived at Rs.81,080-93 Ps. Unless the
Court examine these items and reject a part of the claim as untenable, the mere deduction
shown in the plaint at Rs.2,875-00 Ps., cannot constitute an admission. The alternative
argument was answered by him saying though the plaintiff deducted 6.25 metric tons on
the basis of his calculation, he claimed some illegal deductions made in the bill at Rs.
4,761-00 and that was accepted by the trial Court in which event the claim for 267 bags
of cement or the statement in the plaint for 6.25 metric tons is not fatal and the total
amount must be rejected. I am inclined to accept the submission on behalf of the plaintiff.
No doubt the plaintiff on the method of calculation arrived at sought to deduct 6.25
metric tons i.e., 125 bags but the Court did not examine the correctness of the figure
arrived by the plaintiff at Rs. 81,082-93 Ps. but proceeded to decree the suit claim on the
basis of the admission made by him. In view of the fact the plaintiff has claimed Rs.
4,761/- and the interest payable therein respect of the excess cement already used, he
might have shown the deduction for Rs. 6,25 Metric Tons or 125 bags. Both the counsel
did not take me to details of calculation adopted either by the plaintiff or the defendant.
The defendants counsel contended that the statement in the plaint constitutes an
admission whereas the plaintiffs counsel contended that when the Court rejected the
plaintiffs method of calculation the statement of deducting a portion of the cement used
by him cannot constitute an admission. In fact the Court also accepted the plea of the
plaintiff in this regard and said that DW-2 stated that the cost of 3866 bags of cement
given to the plaintiff was recovered by 11th bill itself and it also held that no evidence
has been produced to show that the plaintiff did not spend the cement of 3724 bags as per
the measurement in M.Book. The contention of the learned counsel for the defendant is
that though the plaintiff has used all 3991 bags his claim for the entire thing is illegal as
the estimated amount is less. The relevant clause in the agreement Ex. A-1 shows that the
plaintiff is entitled to use the cement required and hence the Court below also recorded a
finding that no evidence has been produced to show that the plaintiff did not use the
cement issued from the 1st bill to the 11th bill or subsequently except stating that the
measurements were noted in the M Book. Hence I am of the opinion that no separate
deduction towards the cement is warranted in view of the finding arrived at by the trial
Court.
15. The trial Court on the question of steel, recorded a finding that the defendants
are entitled to recover cost of excess steel 3.52 metric tons at Rs. 2,500-00 per metric ton
i.e., Rs. 8,800-00. It also held that a sum of Rs. 800-00 can be claimed by the defendant
for non engagement of technical agents. On these two items the learned counsel for the
plaintiff contended that if the Court-fee is paid, his claim can be allowed. But he did not
say how the finding is incorrect. In view of the fact that I have taken the view that the
Court-fee need not be paid, these two items must be allowed as deduction towards the bill
payable to the plaintiff.
16. The Court below also held seigniorage charge of Rs. 3,884-00 and also
Income-Tax of Rs. 428-00 cannot be deducted. When we look to the relevant clause 22 it
not only enables the defendant-Corporation to deduct that amount if it actually paid on
behalf of the plaintiff or if any outstanding income or other dues. If the plaintiff failed to
produce Income-tax clearance certificate, the Corporation is not entitled to deduct them
in the absence of any proof of payment made by them on behalf of the plaintiff.
17. The last item is damages claimed by them at Rs.16,130-84 Ps. The learned
counsel for the defendant vehemently argued that admittedly the plaintiff let out certain
items in the contract without performing them and they have to get it done by some other
person and the damages incurred by them must be allowed to be recovered from the bill
payable to the plaintiff. I must say there is no specific clause in the agreement enabling
the Corporation to deduct any amount towards damages. It is admitted by the defendant
that it is only under general law of damages. Assuming that the Corporation has a right, I
am clearly of the view that no one connected with the work entrusted was examined. The
actual amount spent is not forthcoming. But the learned counsel for the defendant argued
that this item was not disputed. I must say it is clearly an untenable contention. What was
urged by the defendant is that at the instance of the Corporations Engineer he released
certain items to the third parties. On the other hand he is disputing the plaintiffs
statement that the defendant committed default. The fact that he released certain items for
being entrusted to third parties does not mean that be admitted the claim of the
defendants. I must hold that in the absence of any evidence of actual loss, - the claim for
damages at Rs. 16,130-84 Ps. is clearly untenable. In the result out of the total amount
found due and admitted by the defendant at Rs. 51,922-48 Ps. the two sums i.e., Rs.
8,800-00 and Rs.. 800-00 totalling Rs. 9,600-00 are liable to be deducted and the plaintiff
is entitled to the said amount.
18. On the question of interest I took the assistance of Sri J. Prabhakar and I place
on record of my appreciation for his able assistance to the Court. The argument of the
learned counsel is two fold. Under Clause 69 of the Andhra Pradesh Detailed Standard
Specifications which is made applicable to the contract in question, no interest is payable.
In view of that prohibition the decree regarding payment of interest is unsustainable.
Secondly even assuming that Clause 69 is not a bear or inapplicable for a claiming
interest as stated in the plaint, the provisions of the Interest Act, 1839 are not attracted to
the facts of the case. On the first part of the argument, he relied on the judgment of this
Court in Koppisetti Venkateswara Rao vs. Superintending Engineer, P.H. East Circle
(1986 (2), ALT 547), wherein Ramaswamy, 3., held that Clause 69 bars the claim for
interest. Sri Prabhakar brought to my notice the judgement of another single Judge,
Amareshwari, 3., who took a contrary view. In view of the judgement of the Supreme
Court in Hyderabad Municipal Corporation vs. M. Krishnaswami Mudaliar (AIR 1985,
SC 607) and State of Rajasthan vs. Raghubir Singh (AIR 1979, SC 852), 1 cannot give
effect to this agreement. Before I draw support from these two cases it is necessary to
refer to Clauses 68 and 69 of the Andhra Pradesh Detailed Standard Specifications. The
first paragraph of Clause 68 reads as follows:
68. Payments and certificates :Payment will be made to the

contractor under the certificate to be issued at reasonably frequent intervals
by the Executive Engineer or by the Sub-divisional Officer. Within fourteen days

of the date of each certificate, an intermediate payment will be made by the
Executive Engineer or the sub-divisional officer of a sum equal to 92 %
(96 % in the case of contractors who have lodged the standing security deposit
of [Rs. 1,00,000) (Rs. 1-00 lakh)] of the value of work, as so certified and the
balance of 7 percent, (3 % in the case of contractors who have the standing
security deposit) will be with-held and retained as a security for the due
fulfilments of the contractor. Under the certificate to be issued by the Executive
Engineer or the Sub-divisional Officer on the completion of the entire works the
contractors will receive the final payment of all the moneys due or payable to him
under or by virtue of the contractor except earnest money Deposit retained as
security and a sum equal to 2 % of the total value of the work done, provided
there is no recover from or forfeiture by the contractor to be made under Clause
60. The amount withheld from the final bill will be retained under deposits and
paid to the contractor together with the earnest money deposit retained as Security
after a period of six months as all defects shall have been made good according to
the true intent and meaning thereof. However in the case of works like
conveyance of materials supply of materials, slit clearance where the fixation of
observation period is not necessary, the deposit amount could be refunded after
the work is completed in accordance with the terms of the agreement. [Subs. by
G.O.Ms.No. 471, Tr., R. & Bldgs. (C), Dept., Dt. 7-10-1983]
19. Clause 69 reads as follows:
69. Interest on money due to the contractor :(a) No omission by the

Executive Engineer or the sub-divisional officer to pay the amount due upon
certificates shall vitiate or make void the contract, nor shall the contractor be
entitled to interest upon any guarantee found or payments in arrear, nor upon any
balance which may, on the final settlement of his accounts, be found to be due to
him.
(b) Wherever the withheld amount reaches Rs. 1,000 or a multiple thereof,
the contractor may, at his option, deposit with Executive Engineer Rs. 1,000 or a
multiple thereof in any or the forms of interest bearing securities recognized for
the purpose by the Andhra Pradesh Public Works Accounts Code and subject to
the provisions therein contained in which case in the equivalent withheld amount
shall be paid to him forthwith. The contractor will be permitted to exercise the
option in this clause, subject only to the condition that the rate of progress
contained in the Articles of Agreement is properly maintained.
20. A close reading of these two clauses discloses that in respect of each bill and
after obtaining the certificate an amount of 3 % or 7 %, as the case may be, can be
withheld. Further even after completion of the entire work, the contractor cannot receive
the earnest money deposit and also a sum equivalent to 2 % of the total value of the
work done, and that will be payable only at the end of 6 months which is considered to be
observation period. By a reading of this clause we can easily follow the ambit of Clause
69 which envisages that no claim for interest can be entertained in respect of payment of
arrears or final settlement be
found to be due to the contractor. The balance of 3 % or 7 % that may be retained in

respect of each bill even after the completion of the work constitutes payment in arrears
and the earnest money deposit and also 2 % of the total value of the work done is the
balance due on the final settlement of the amount found due to him. So the scope of
Clause 69 is to retain these sums even though the work was done completely. This is
exactly what was held in Hyd. Municipal Corporations case (supra) when a similar
clause was relied on to deny the claim of interest. The clause relied on by the Supreme
Court judgment is identical. It read thus
The contractor shall not be entitled to interest, upon any payment in

arrears or upon any balance which may on final settlement of his accounts be
found due to him.
Considering the scope and effect of this clause, it was observed:
In our view the reliance on this clause is of no avail to the appellant for
the simple reason that this clause will be applicable provided the work was
completed according to the specifications and the time schedule fixed in the
original contract.
Thus it is clear that notwithstanding the completion of the work as per the
specifications, the terms of the contract contemplates retention of the sum without paying
them immediately. In view of the liability of the contracting party to pay the amount
immediately on completion of the work, this clause contemplates retention of the money
even though the work is completed and it specifically negatives the claim for interest on
any such arrears due or on any amount deposited with the Department as earnest money
deposit or sum equal to 2 % of the total value of the work done till the expiry of the
period of six months. Similarly in State of Rajasthan vs. Raghubir Singh, (AIR 1979, SC
852), the clause relied on to negative the claim of interest reads thus
Neither the earnest money deposit nor the withheld amount shall bear any
interest.
It was observed that:
This sentence far from supporting the case of the appellant appears to
support the case of the plaintiff. The reference to the withheld amounts is to the
amounts representing five percent of the running bills. The provision that the
contractor is not entitled to interest on these withheld amounts appears to imply
that interest is claimable on other amounts due to the contractor.
21. Thus it is clear that this Clause 69 is intended to really prevent any claim for
interest during the running period when final bills is not settled and also in respect of
earnest money deposit on the sum equal to 2 % of the total value of the work done till
the expiry of the period of six months. This six months period is called observation
period ; so that the Department can see whether the work was done satisfactorily or not.
Clause 69 cannot be construed as a total prohibition, but it operates a limited period of six
months from the date of the completion of the work and hence I negative this contention
that Clause 69 is a bar to claim interest.
22. It is fairly well settled that the claim for interest can either be under the
agreement, or under the usage of trade having force of law, or under the provisions of
substantive law or under the provisions of the Interest Act, 1839 or when the Court
exercises equitable jurisdiction as envisaged in the proviso to Sec. 1 of the said Act. Vide
Vithaldass vs. Rup Chand, (AIR 1967, SC 188). So far as the requirement of Interest Act
is concerned, the Supreme Court in Thawardas vs. Union of India, (AIR 1955, SC 468)
laid down five conditions :
1. the interest is not payable under any other law,
2. there must be a debt or a sum certain,
3. it must be payable at a certain time or otherwise,
4. these debts or sums must be payable by virtue of some written

instrument,
5. there must have been 34emand in writing stating that interest will be
demanded from the date of the demand.
23. The learned counsel for the defendant on the strength of this dicta urged that
the contract in question is such that no definite sum is due till it is settled by the parties or
by the Court and the claim of interest can only be made after the decree is passed.
Though the Interest Act 22 of 1839 is repealed by Act 14 of 1978, we are concerned with
the previous Act as substantive rights cannot be affected by the repeal of the Act as Sec. 6
of the General Clauses Act is made applicable. The learned counsel relied on a judgment
of the Division Bench of the Madras High Court in Sri Rajah Ravu Venkta
Kumaramahipati Surya Rao Bahadur Garu vs. Ballapragada Pallamraju, (XL MU 18 ;
1921, Mad. 76). There the claim for interest by a contractor who undertook a building
contract was negatived on the ground that no certain sum is due payable within the time
as contemplated under Section 1 of the Act apart from the infirmity in that case of want
of notice. It is necessary to refer the clause in that case.
The contract provides that, all work done by the contractor shall be paid
for by the Rajah according to the rates herein specified within a reasonable time
after it has been inspected and finally approved and passed.
In that view it was held that the said provision is not one for payment of sum
certain or for the payment of such sum on certain date. I cannot give effect to the
submission of the learned counsel on the strength of this case. We have already noticed
Clauses 68 and 69 of the Andhra Pradesh Detailed Standard Specifications. There is a
clear obligation on the part of the authority to pass the bill and also make payment and
finally pay entire amount within six months after the completion of the work. A sum
certain within the meaning of Section 1 does not mean the sum must be calculated sum.
It is enough it is capable of being calculated. Let us look to Section 1 of the Interest Act.
Power of the Court to allow interest :It is, therefore hereby enacted
that, upon all debts or sums certain payable at a certain time or otherwise, the
Court before which such debts or sums may be recovered may,
if it shall think fit, allow interest to the creditor at a rate not exceeding the current
rate of interest from the time when such debts or sums certain were payable, if
such debts or sums be payable otherwise, than from the time when demand of
payment shall have been made in writing, so as to such demand shall give notice
to the debtor that interest will be claimed from the date of such demand until the
terms of payment; provided that interest shall be payable in all cases in which it is
now payable by law.
24. It is true this provision envisages as held by the Supreme Court that sum must
be a certain sum and it is payable within a certain time and a demand thereof is made. It
is no doubt made payable under the contract which is an instrument within the meaning
of the Act. The word certain sum occurring in the Act does not mean sum actually
calculated or ascertained sum. A sum (which) is capable of being ascertained is sufficient
to attract the section. Once the bill is prepared as per the measurements it is capable of
being ascertained. It is not a case where it depends upon the consent of the parties as
envisaged in 1921, Madras, 76 as a matter of objective verification ascertainable and
capable of being ascertained. Regarding time factor also it is payable on certain times as
the right of retaining the amount beyond six months after the completion of the work is
not envisaged on the terms of the contract and the liability to pay entire sum arises on the
expiry of six months period after completion of contract, and hence I am satisfied that all
the requirements of sum certain and payable before certain time and making the
demand were satisfied. The plaintiff issued a notice under Ex. A-3 making the demand
and no reply was given to him. The fact that lesser amount was found due is not a ground
for rejecting the claim for interest. Once a sum is certain and payable at a particular time
and demand is made for that, the requirement of Section 1 of the Interest Act are satisfied
irrespective of the fact that Court came to a different conclusion about the actual amounts
payable. Hence I am clearly of the opinion that the interest is payable from 22-4-1982 till
the date o the suit. Regarding the rate once I hold Section 1 is attracted it is the current
rate of interest. The current rate of interest was considered by Courts as a fair and
reasonable rate in the absence of special circumstances. Hence I am of the opinion that
12% interest from the date of demand till the suit is just and proper. The suit is filed on 2-
2-1984 and pending to suit till the date of decree and from the date of decree till the date
of payment the plaintiff is entitled to only 6% interest as that period is governed by
Section 34, C.P.C.
25. In the result, the decree of the trial Court is modified directing that from a sum
of Rs. 51,932-48 Ps. a sum of Rs. 8, 925-00 should be deducted. The plaintiff is entitled
to interest at 12% p.a. from 22-4-1982 till 2-2-1984 on Rs. 43,007-48Ps. and on the same
amount he is entitled to interest at 6% per annum from the date of suit till the date of
decree and from the date of decree till the date of realization.
26. The appeal is allowed in part as indicated above with proportionate costs. The
cross-objections are not substantiated. Hence they are accordingly dismissed.
_____
Case law
Interest pendente lite
In Executive Engineer (Irrigation) vs. Abhaduta Jena , (1988) 1 SCC 418 it was
held that the arbitrator to whom the reference is made without the intervention of the
Court, does not have jurisdiction to award interest pendente lite.
A Constitution Bench in Secretary, Irrigation Dept., Govt. of Orissa vs. G. C.

Roy, (1992) 1 SCC 508, AIR 1992 SC 732 overruling Abhaduta Jena case held:
The arbitrator acted with jurisdiction in awarding pendente lite interest to the
contractor-respondent when the agreement was silent as to award of interest.
Where the agreement between the parties does riot prohibit grant of interest and
where a party claims interest and that dispute (along, with the claim for principal amount
or independently) is referred to the arbitrator, he shall have the power to award interest
pendente lite. This is for the reason that in such a case it must be presumed that interest
was an implied term of the agreement between the parties and therefore when the parties
refer all their disputes or refer the dispute as to interest as such to the arbitrator, he shall
have the power to award interest. This does not mean that in every case the arbitrator
should necessarily award interest pendente lite. It is a matter within his discretion to be
exercised in the light of all the facts and circumstances of the case, keeping the ends of
justice in view.
The following principles emerge:
(1) A person deprived of the use of money to which he is legitimately entitled has
a right to be compensated for the deprivation, call it, by any name. It may be called
interest, compensation or damages. This basic consideration is as valid for the period the
dispute is pending before the arbitrator as it is for the period prior to the arbitrator
entering upon the reference. This is the principle of S. 34, Civil Procedure Code and there
is no reason or principle to hold otherwise in the case of arbitrator.
(ii) An arbitrator is an alternative forum for resolution of disputes arising between

the parties. If so, he must have the power to decide all the disputes or differences arising
between the parties. If the arbitrator has no power to award interest pendente lite, the
party claiming it would have to approach the Court for that purpose, even though he may
have obtained satisfaction in respect of other claims from the arbitrator. This would lead
to multiplicity of proceedings.
(iii) An arbitrator is the creature of an agreement. It, is open to the parties to

confer upon him such powers and prescribe such procedure for him to follow, as they
think, fit, so long as they are not opposed to law. (The proviso to S. 41 and S. 3 of
Arbitration Act illustrate this point). All the same, the agreement must be in conformity
with law. The arbitrator must also act and make his award in accordance with the general
law of the land and the agreement.
(iv) Over the years, the English and Indian Courts have acted on the
assumption that where the agreement does not prohibit and a party to the
reference makes a claim for interest, the arbitrator must have the power to award
interest pendente lite.
(v) Interest pendente lite is not a matter of substantive law, like interest for
the period anterior to reference (pre-reference period). For, doing complete justice
between the parties, such power has always been inferred.
The decision in Abhaduta Jena case does not lay down good law on this
aspect. However, the present decision shall only be prospective in operation,
which means that this decision shall not entitle any party, nor shall it empower
any Court to reopen proceedings which have already become final. In other
words, the law declared herein shall apply only to pending proceedings.
See also M. Ganga Reddy vs. State of A.P., 1996 (3) ALT 53 (DB)
_____
P.S. 70. Acceptance of final measurements :The contractor agrees that before
payment of the final bill shall be made on the contract, he will sign and deliver to the
Executive Engineer either in the measurement book or otherwise demanded, a valid
release and discharge from any and all claims and demands whatsoever for all matters
arising out of, are connected with the contract; provided that nothing in this clause shall
discharge or release the contractor from his liabilities under the contract. He shall also
produce a certificate from the income tax authorities that all income tax payable by him
up-to-date has been duly paid in the case of contracts the value of which is over Rs.
10,000. It is further expressly agreed that Executive Engineer in supplying the final
measurement certificate, need not be found by the preceding measurements and
payments. The final measurements, if any, of the Executive Engineer shall be final,
conclusive and binding on the contractor.
P.S. 71. Recovery of money from contractor in certain cases :In every case
which provision is made for recovery of money from the contractor, Government shall be
entitled to retain or deduct the amount thereof from any moneys that may be due or may
be due or may become due to the contractor under these presents and/or under any other
extract or contracts or any other account whatsoever.
_____
JUDGMENT
CLAIM BY CONTRACTOR FOR CERTAIN AMOUNT
1988 (1) ALT 736
The Hon ble Mr. Justice M.N. Rao
C. Raghava Reddy Petitioner
vs.
Superintending Engineer, Irrigation

Circle No. 3, Nizamabad & another. Respondent
Order
1. The petitioner is a recognized Class I contractor. His tender for construction of

Masonry Blocks of spill way at left flank from Blocks 7 to 14 of Singoor Project was
accepted by the Superintending Engineer, ID., Irrigation Circle-3, Nizamabad, the first
respondent herein and an agreement was entered into on 5-9-1983 for execution of the
said work costing about Rs. 1,21,59,459/-. The agreement contemplated completion of
the work within eight months from the date of handing over of the site. The site was
handed over on 14.11-1983 and the work was to be completed by 23-5-1985. It so
happened that due to various reasons, the work could not be completed some of the main
reasons, according to the petitioner, are delay on the part of the Geologist to approve the
foundations, short supply of cement by the Department, deposit of heavy silt and slush
beyond the contemplation of the parties and out-break of cholera in the area affecting the
supply of labour, etc. The petitioner applied for extension of time for 4 months from 23-
5-1985. The Department granted extension of time only upto 30-6-1985 and subsequently
went on extending the contract period. The petitioner requested the Department to grant
enhanced rates in view of the steep escalation in the cost of material and labour after the
expiry of the original contract period. The Department did not agree. The petitioner,
therefore, stopped work from 4-1-1986.
2. The agreement provides for arbitration of disputes that arise under the contract.
The petitioner, therefore, filed O.S.No. 3 of 1986 in the Court of the Subordinate Judge,
Medak under Section 20 of the Arbitration Act for appointment of sole arbitrator. The
Executive Engineer, Singoor Project Division-2, the second respondent herein, addressed
all the Executive Engineers of Irrigation Department asking them to send him (Executive
Engineer) all the amounts payable to the petitioner under different bills pertaining to
different agreements. The petitioner, therefore, filed I.A.No. 106 of 1986 in O.S.No. 3 of
1986 seeking injunction restraining the respondents from stopping payments of bills or
any other amounts payable to him in respect of other contracts carried out by him. He
contended that he was entitled to get an amount of Rs. 33 lakhs from the Department and
the alleged claim of the Department in respect of the work in question for Rs. 12,58,300/-
was totally incorrect. The Civil Court, after hearing both sides, granted status quo. That
order was questioned by the petitioner in C.M.A. No. 1137 of 1986 in this Court. The
C.M.A. was dismissed by this Court taking the view that under Section 41(b) read with
Second Schedule of the Arbitration Act, an injunction restraining the Government from
withholding payments to the petitioner in respect of other contracts is not permissible
since the injunction cannot be said to be for the purpose of and in relation to the
proceedings before the Court.
3. The petitioner is seeking a, writ of Mandamus declaring that the action of the
respondents in seeking to withhold the amounts payable to him for the works executed
under agreements other than the agreement No. 10/83 is illegal and unconstitutional.
4. Sri V.R. Reddy, learned counsel for the petitioner, relying upon a decision in
M/s. Lakshmichand & Baichand vs. State of A.P., (AIR 1980, SC 20), contends that
unless the amount due from him is determined the respondents cannot take action to
withhold payments to him in respect of the other contracts carried
out. by him. On the other hand, the learned Government Pleader relying upon Cl. 71of
the Andhra Pradesh Standard Specifications which reads
71. Recovery of money from contractor in certain cases :In every case
in which provision is made for recovery of money from the contractor,
Government shall be entitled to retain or deduct the amount thereof from any
moneys that may be due or may become due to the contractor under these presents
and/or under any other extract or contracts or any other account whatsoever.
which formed part of the contract, contends that the Government is entitled to retain or
deduct the amounts from any moneys that may be due or may become due to the
contractor on any other account.
5. The question that fell for consideration before the Supreme Court
Lakshmichand & Baichand vs. State of A.P., (1 supra) is similar to the one that has now
arisen in this case. Dealing with the contentions based on C. 71, the Supreme Court
observed:
In regard to the claim to adjustment on the second count the position is

more controversial. The claim is founded in the doctrine of equitable set off but
we do not find evidence before us to bring the case within the operation of the
doctrine. It is not a case where cross demands rise out of the same transaction or
the demands are so connected in their nature and circumstances that they can be
looked upon as part of one transaction. Nor can assistance be derived from Clause
71. The benefit of that provision can be claimed only if the amount sought to be
retained is an ascertained, sum, an amount which can be readily adjusted against
the amount payable under the other contract. Here, the amount sought to be
adjusted has yet to be determined as a liability against the contractor. It has been
disputed by the appellant. Accordingly Clause 71 cannot be invoked.
The reasoning fully applies to the case on hand. Merely because the Government have
specified that a sum of Rs. 12,58,300/- was due from the petitioner, it would not become
a sum ascertained. In order to become an ascertained sum, there must be determination.
There was no determination in the present case. The petitioner wants the matter to be
decided by the arbitrator, his claim is that he is entitled for Rs. 33 lakhs from the
Government in respect of the contract in question and he is disputing that claim of the
Government that in respect of the very same contract, a sum of Rs. 12,58,300/. was due
from him. In the circumstances, invocation of Clause 71 is illegal.
6. For the foregoing reasons, the writ petition is allowed. A Mandamus will issue
directing the second respondent not to withhold the amounts payable to the petitioner for
the works executed under the agreements other than the agreement No. 10/83. There shall
be no order as to costs. Advocates fee Rs. 250/-.
_____
P.S. 72. Contractor dying, becoming insolvent, insane, or imprisoned :In

the event of the death or insanity or insolvency or imprisonment of the contractor or
where the contractor being a partnership or firm becomes dissolved
or being corporation goes into liquidation, voluntary or otherwise, the contract may, at
the option of the Executive Engineer, be terminated by notice in writing posted at the site
of the works and advertised in one issue of the local District Gazette, and all accepted and
acceptance works shall forthwith be measured up and paid for at the rates provided in the
contract schedule where such apply, or otherwise, by the most recent schedule of rates of
the division approved by competent authority, to the person or persons entitled to receive
and give a discharge for the payment.
J. Arbitration and Claims of Contractors on Arbitration Cases
P.S. 73. Arbitration :In case of any dispute or difference between the parties to
the contract either during the progress or after the completion of the works or after the
determination, abandonment, or breach of the contract, as to the interpretation of the
contract, or as to any matter or thing arising there under except as to the matters left to
the sole discretion of the Executive Engineer under clauses 20, 22, 27 (C), 29, 36, 37 and
40 of the Preliminary Specifications or as to the withholding by the Executive Engineer
or payment of any bill to which the contractor may claim to be entitled, then either party
shall forthwith give to the other notice of such dispute or difference, and such dispute or
difference shall be and is hereby referred to the arbitration of the Superintending
Engineer of the nominated circle mentioned in the Articles of Agreement (hereinafter
called the Arbitrator) and the award or such Arbitrator shall be final and binding of the
parties unless contested by either party in a Court of law. Provided however that in cases
where the Executive Engineer has entered into the contract on behalf of the Governor, the
dispute or difference shall, in the first instant, be referred by or through the Executive
Engineer to the Superintending Engineers of the Circle, in which the work lies and his
decision thereon obtained before referring such dispute or difference to arbitration under
this clause. Progress of the work shall not be suspended or delayed on account of the
reference of any dispute or difference to the Superintending Engineer of the circle in
which the work lies or to arbitration under this clause. The decision of the Executive
Engineer or the Superintending Engineer of the Circle in which the work lies, as the case
may be on such dispute or difference shall be conclusive until reversed by the
Superintending Engineer or the arbitrator. Either party may within a period, which shall
be fixed by the arbitrator, file before the arbitrator a statement of the case and also all the
documents relating to or having a bearing on the case. The arbitrator shall set that the
award is passed, if reasonably possible, within a period of four months from the date of
his entering upon the reference, but if any extension of that period is considered by him
to be necessary, either suo moto or on the application of either party to the reference, the
parties hereby agree and consent to such extension as the arbitrator may from time to
time consider reasonably necessary, and any such extension shall forthwith be
communicated by him in writing to each of the parties hereto. The arbitrator shall not be
bound to observe the ordinary rules of procedure applicable to trials before Judicial
tribunals not to hear to receive formal evidence but may pass on award on the documents
or statements of the case filed by both the parties under or on personal inspection. The
arbitrator shall have power to view the subject matter of the dispute with or without the
parties or their agents. The arbitrator shall also have power to open up, review and revise
any Certificate, opinion, decision, requisition or notice, save in regard to the matters
expressly excepted and to determine all
Arbitration and Claims of Contractors on Arbitration Cases 95
matters in dispute which shall be submitted to him, and of which notice shall have been
given as aforesaid, in the same manner as if no such certificate, opinion, decision,
requisition or notice had been given upon every any such reference the costs of any
incidental to the reference and award respectively shall be in the discretion of the
arbitrator, subject to the condition that the amount of such cost to be divided to either
party shall not in respect of, i.e., monitory claim exceed the percentage set out below of
any such award irrespective of the actual fees, Costs and expenses incurred by either
party; provided that where a monitory claim is disallowed in full, the said percentage
shall be calculated on the amount of the claim. The arbitrator may determine the amount
of the costs to be awarded or direct the same to be taxed as between solicitor and client or
a party and shall direct by whom and to whom and in what manner the same shall be
borne and paid.
The percentage above referred to in this clause is 5 per cent on any such monitory
award which does not exceeds Rs. 10,000, 3 per cent on the next Rs.40,000 or any part
thereof, 2 per cent on the next Rs.50,000 or any part thereof and I per cent on any excess
over Rs. 1,00,000
Provided that Government shall not be liable to any claim in respect of any such
dispute or difference until liabilities, and the amount referred to is decided by the
arbitrator ;
Provided that payment to the contractor based on the arbitration award shall be
made only after acceptance of the award by the Chief Engineer if the value of the award
is less than Rs. 20,000/- be and the Government if the value is Rs. 20,000 above.
Note 1 :Arbitration awards whose value is below Rs. 20,000:
The Chief Engineer is authorized to accept arbitration awards below Rs. 20,000 in
value. The Chief Engineer shall make a review of the arbitration award within 15 days of
service of the notice of the making of the awards in consultation with the local counsel
and if in his opinion the award has to be contested, he shall file an application in the
Court Within 30 days of service of the notice of making of the award for the filing of the
award and take steps to contest the award.
If, for any reason, the Chief Engineer considers it in advisable to act according to
the advice of the local counsel, he shall refer the matter to the Government for
examination within 15 days of the service of the notice of making of the award.
Arbitration Awards whose value is Rs 20,000 or above:
The Chief Engineer shall make a review of the arbitration awards whose value is
Rs. 20,000 and above and submit a report to the Government within 10 days of service of
the notice of the making of the award. In such case a summary of the case, a copy of the
agreement for the work, the facts pressed before the arbitrator by the parties along with
the recommendations of the Chief Engineer, should be furnished to the Government for
all appreciation of the case. The Government will then take a decision in consultation
with the law department whether the award should be accepted or not and communicate
the same within 25 days of service of the notice of making of the award so as to enable
the Chief Engineer either to take action on the basis of the award or to file an application
96 THE A.P. STANDAIW SPECIFICATIONS
in the Court within 30 days of service of the notice of the making of the award for filing
of the award and for contesting it.
Note 2 :Applications of contractors seeking arbitration should bear a Court fee

stamp as per clause 10(K) of Schedule (II) to the Andhra Pradesh Court Fees and Suits
Valuation Act, 1956 but no stamp duty need be levied.
The awards passed by arbitrators shall be made on stamped paper the value of
which should according to the value of claim to which the award relates as per Article 12
of Schedule I-A to the Indian Stamp Act.
If the aggrieved party goes to a Court of law challenging the award, he should pay
the necessary Court fee.
[Note 3 :Except as otherwise provided in the contract any disputes and

differences arising out of or relating to the Contract shall be referred to adjudication as
follows :
I. (i) Settlement of all Claims upto Rs. 50,000/- in value by way of Arbitration to
be referred as follows :
(a) Claims upto Rs. 10,000/- Superintending Engineer of

in value, another Circle in the Dept.
(b) Claims above Rs. 10,000/- Another Chief Engineer of

and upto Rs. 50,000/- in same Department.
value
The arbitration proceedings will be conducted in accordance with the provisions

of the Arbitration Act, 1940 as amended from time to time. The Arbitrator shall
invariably give reasons in the award.
II. Settlement of all Claims above Rs. 50,000/- in value:
All Claims above Rs. 50,000/- in value shall be decided by the Civil Court of
competent jurisdiction by way of a regular suit and not by arbitration.
A reference for adjudication under this Clause shall be made by either party to the
Contract within six months from the date of intimating the Contractor of the preparation
of final bill or his having accepted payment.
The relevant Clauses of Andhra Pradesh Detailed Standard Specifications stand

modified to the extent provided in this Clause].
[Added by G.O.Ms.No. 158, Tr. & B. (B. III), Dt. 13-7-1992]
_____
JUDGMENT
SPECIFIC ELIMINATION OF ARBITRATION CLAUSE

CLAUSE 73 WOULD BE INOPERATIVE
AIR 1989, Kerala 241
V. Siva Ramannair and N. Fathima Beevi, JJ.

M/s. Leo Construction Contractors Appellant
vs.
Government of Kerala Respondent
Sivaraman Nair, J. :The appellant is the Managing Partner of a registered firm

of contractors. He had filed O.S.No. 411 of 1981 under Sec. 20 of the Arbitration Act.
That suit was dismissed on the finding that the contract which the appellant had entered
into with the respondents did not provide for reference to the arbitrator. Hence this
appeal.
2. The appellant had submitted a tender for construction of a building for the
Government Secondary School, Quilandy, consequent on the acceptance of his tender, he
executed an agreement on 18-11-1978 with the second respondent. According to the
appellant, Cl. 14 of the Form of Tender and Cls. 24, 24(a) and 44 of Form No. 83 were
expressly made part of the agreement. These clauses were to the effect, that in case of any
dispute or difference that may arise in the working of the contract, the same should be
referred to arbitration before the Government Arbitrator, at the instance of either party.
Several disputes arose between the parties regarding execution of the work. It was
because his request for referring the dispute to the Arbitrator was not allowed that he
filed O.S.No. 411 of 1981.
3. In their written statement, the respondents submitted that condition No.

14 of the Form of Tender and Cls. 24 and 24(a) of Form No. 83 had been specifically
eliminated from the contract and the dispute could not be referred for Arbitration.
Reference was also made to Ext. B2 Government Order, Dt. 8-5-197 8 to the effect that
arbitration would be restricted only to works the estimated P.A.C. of which was Rs. 2
laths and below. They also contended that Art. 3 of the Agreement was deleted and the
appellant had endorsed such deletion. Consequence of such deletion, read in conjunction
with Ext. B2 Government Order, and the removal of Cls. 24 and 24(a) of Form No.83
was said to be to shut out Arbitration in the instant case, since, admittedly, the estimated
amount of contract exceeded Rs. 2 lakhs by over Rs. 2,40,000/-.
4. The trial Court considered the question whether the disputes were liable to be
referred for Arbitration under the terms of the contract. The trial Court found that Cl. 44
has the only effect of incorporating general conditions forming part of the contract
documents and that general Cl. 73 in Madras Detailed Standard Specifications which
necessarily formed part of the notice inviting tender and therefore of the agreement could
not survive the deletion of Cls. 3,24 and 24(a), which related specifically to arbitration.
Those clauses were scored off. The trial Court also found that in the light of the specific
deletion of Cls. 24 and 24(a), it was not reasonable to hold that Cl. 14 of the Tender Form
was incorporated in the agreement by virtue of the provisions of Cl. in Form No. 83. The
Court held further that the appellant having signed Form No. 83, from which Cl. 24 &
24(a) relating to Arbitration were deleted, could not be heard to seek arbitration in spite
of such deletion. Appellant submits, that Cl. 44 of Form No. 83 and Cl. 14 of the tender
notice do survive and such survival in the contract willingly entered into between the
parties do provide for a reference of dispute arising out of the contract to the Government
Arbitrator.
5. The very question as to whether the provision for arbitration as contained in the
Madras Detailed Standard Specifications, which are corporated as terms of the contract,
would enable a contractor to claim reference of disputes for arbitration notwithstanding
the deletion of clauses similar to Cls. 3, 24 and 24(a) had come up for consideration
before this Court in a number of decisions. State of Kerala vs. Joseph, 1983, Ker. LT 583,
a Division Bench of this Court held, that incorporation of the terms of M.D.S.S. had the
effect of providing for arbitration of disputes notwithstanding the specific deletion of
arbitration clauses in the agreement. A different view was taken in M.F.A. No. 158 of
1984. In yet another decision, State of Kerala vs. Siby Varghese, 1987 (1), Ker. LT 860,
another Division Bench adopted a slightly different view. In that decision, it was held in
unmistakable terms that the M.D.S.S. served an entirely different area and would not
supply or supplement provisions dealing with arbitration. A Full Bench of this Court
considered the divergetice of views expressed in the above decisions in the judgment in
M.F.A. Nos. 586 and 789 of 1987, 1988 (2), Ker. LT 768 ; (AIR 1989, Ker. 61) (FB), and
held that C1.73 of the M.D.S.S., which was to be read as part of the contract, was not
meant to render the deletion of Cls. 3, 24 and 24(a) of the contract ineffective. The Full
Bench, therefore, held that the effect of the deletion of those clauses was that not only the
arbitration clause, but the entire arbitration process itself was consciously annihilated.
The Full Bench also referred to G.O.Ms.No. 53/ 78/PW&E, Dt. 8-5-1978 (Ext. B2) and
held, that the order unmistakably indicated the intention of the Government to do away
with the provision for arbitration in contracts, the P.A.C. of which was more than Rs. 2
lakhs. The Full Bench concluded, that a situation in which Cls. 3 and 24 were deliberately
and consciously struck down, the entire arbitration provisions collapsed. We are bound
by the decision and have necessarily to dismiss this appeal.
6. We have to come to the said conclusion for yet another reason also. Art. 299 of
the Constitution of India deals with contracts made in the exercise of the executive power
of the Union or of a State. It provides for the manner in which the contract shall be
expressed to be made and executed on behalf of the President or the Governor. A contract
which does not comply with Art. 299 of the Constitution is not enforceable against the
executive Government. Art. 299 of the Constitution, dealing with the executive power of
the Union or a State in respect of contracts is in the following terms
299. Contracts :( 1) All contracts made in the exercise of the executive

power of the Union or of a State shall be expressed to be made by the President,
or by the Governor of the State, as the case may be, and all such contracts and all
assurances of property made in the exercise of that power shall be executed on
behalf of the President or the Governor by such persons and in such manner as he
may direct or authorize.
Ext. B2 is an order of the executive Government and is expressed in the name of

the Governor as required by Art. 166 of the Constitution of India. That clearly and
unmistakably indicated that no contract with the Executive Government, comprehended
by Art. 299 of the Constitution of India, shall contain a provision for arbitration if the
estimated PAC was more than Rs. 2 lakhs. Even assuming that Cl.73 of the M.D.S.S.
should be read as part of the Form of contract, the
existence of that condition which is contrary to the expressed intention of the executive
Government will be inoperative, because it will be contrary to the direction which the
Governor is competent to issue under Art.299 of the Constitution of India. A provision of
a contract which is contrary to the stipulations contained in directions issued by the
Governor under the above Article cannot be enforced against the executive Government.
7. Counsel for the appellant submitted that though the appellant had countersigned
the deletion of Cl. 3, he had not countersigned deletion of Cls. 24 and (a) of the
agreement. He submitted further, that according to Cl. 44 of the agreement, Cl. 14 of
Form No. 84 which provides for arbitration should be read into the contract. He,
therefore, submits that the finding of the trial Court is unsustainable. We have perused the
agreement, the tender notice and Cl. 14 of Form No. 84 dealing with specifications. What
we find is that Form No. 84 is not part of the tender notice and cannot therefore be read
into the contract by virtue of the provisions contained in Cl. 44 of the agreement.
8. In addition to the reasons stated by the Full Bench in the decision referred to
above, we hold that a provision for arbitration would not survive the promulgation of Ext.
B2 Order by the Governor in relation to the manner in which contracts shall be executed
on behalf of the executive Government. A term in a contract contrary to the directions
issued by the Governor is incapable of enforcement against the executive Government.
The appeal is, therefore, devoid of merits and is hereby dismissed. The parties
will suffer their respective costs.
_____
Claims of Contractors on Arbitration Cases

Claims of contractor on Arbitration cases revised procedure Orders
Issued.
[G.O.Ms.No. 430, irrigation (irr. V) Dept., Dt. 24-10-1983]
Ref :G.O.Ms.No. 876, PW., Dt. 31-7-1975.
Order :In the G.O. read above, orders were issued introducing the system of
arbitration by a Panel of Arbitrators as detailed below:
Value of amount Panel of Arbitrations

1. Claims upto Rs.20,000/- in value. Superintending Engineer of another
Circle.
2. Claims of Rs.20,000/- above upto 1. Superintending Engineer of
Rs.1.00 lakh. another Circle.
2. Directors of Accounts/Dy.Chief
Accounts Officer.
3. Chief Engineer.
3. Claims of Rs.1.00 lakh above. 1. Chief Engineer.
2. Representative of the Finance and

Planning Dept. to be nominated and
3. Director of Accounts or Dy.Chief

Accounts Officer.
2. The question of the revising the above procedure has been receiving the
attention of Govt. for some time past. The Govt. after careful consideration of various
aspects of issues involved direct the procedure be revised as follows:
Value of amount Panel of Arbitrations
1. Claims upto Rs.10,000/- Superintending Engineer of another Circle

in the same Department.
2. Claims above 10,000/- and upto (a) Another Chief Engineer of the
Rs.50,000/- same Department.
(b) Where there is only one Chief

Engineer, in the Dept., the Chief
Engineer will submit proposals to
Govt. in the Administrative Dept.,
for nomination of another Chief
Engineers as Arbitrator by Govt.
3. x x x xxx
3. All claims above Rs. 50,000/- shall be decided by a Civil Court of competent
jurisdiction by way of a regular suit.]
(Amended by G.O.Ms.No. 160, Irrigation & CAD (PW) Dept., Dt. 1-6-1987)
4. Claim means all claims in that contract.
5. The orders referred to in paras 2 and 3 above shall be applicable to all the
agreements entered into by Government from the date of issue of this order and will be
applicable to all the Engineering Department, in the State Govt. referred in para (6)
Supra.
6. The Engineer-in-Chief is requested to submit necessary suitable draft

amendments to the codal provisions wherever necessary including amendment to the
A.P.D.S.S. urgently.
7. Government also direct that pending amendments to the codal provisions and
A.P.D.S.S. referred to in para (5) above, the Chief Engineers/Superintending Engineers
of Irrigation Department, and the Chief Engineers of other Departments, i.e., Panchayat
Raj, Roads and Buildings and Public Health Depts., Chief Engineer (Electrical) are
hereby directed to take necessary action in regard to incorporation of the revised
procedure referred to in paras 2 and 3 above in all the future agreements to be entered
into with the contractors with immediate effect.
Claims of contractor on Arbitration cases revised procedure Orders

Issued.
[G. O.Ms.No. 20. Irrigation & CAD (PW) Dept, Dt. 31-1-1989]
Order :x x x x x
Except as otherwise provided in the contract, all disputes and differences arising
out of or relating to the contract shall be referred to adjudication as follows :
(1) (i) Settlement of all claims upto Rs. 50,000/- in value and below by way of
arbitration to be referred as follows :
(a) Claims upto Rs. 10,000/- Superintending Engineer of another

Circle, in the same Department.
(b) Claims above, 10,000/- and Another Chief Engineer of the same
upto Rs. 50,000/-. Department.
The arbitration proceedings will be conducted in accordance with the provisions

of the Arbitration Act, is to be prepared from time to time. The Arbitrator shall invariably
give reasons in the award.
(ii) Settlement of all claims above Rs. 50,000/- in value :All claims above Rs.
50,000/- in value shall be decided by a Civil Court of competent jurisdiction by way of a
regular suit and not by arbitration.
_____
Claims of Contractors on Arbitration cases Revised procedure Orders

Issued Nomination of Chief Engineers in Irrigation and Projects in respect of
claims above Rs. 10,000/- upto Rs. 50,000/- orders Issued.
[G. O.Ms.No. 456, irrigation (V) Department, Dt. 10-11-1983]
Ref :G.O.Ms.No. 430, Irrigation, dated 24-10-1983.
Order :In the G.O. read above, orders have been issued prescribing the revised
procedure on claims of contractors on Arbitration cases.
2. In of the orders issued in the GO. read above, Govt. direct that
I. In respect of claims upto Rs. 10,000/- the Engineer-in-Chief shall

nominate another Superintending Engineer of a circle as Arbitrator.
II. In respect of claims above Rs. 10,000/- upto Rs. 50,000/- the following
Chief Engineers are nominated as Arbitrators as indicated in columns (2) below:
Name of the Unit Arbitrator

(1) (2)
1. Chief Engineer, Major Irrigation Chief Engineer, Sriramsagar Project.
2. Chief Engineer, Medium and Chief Engineer, Srisailam Project.

Minor Irrigation.
3. Chief Engineer, Nagarjunasagar Chief Engineer, Medium & Minor

Project (Dam, Right & Left Irrigation.
Canals).
4. Chief Engineer, Srisailam Chief Engineer, Major Irrigation.
Project.
5. Chief Engineer, Sriramsagar Chief Engineer, Nagarjunasagar Project.

project.
6. Telugu Ganga Project Engineer-in-Chief.

(Including Somasila Project)
_____
ARBITRATION AWARDS STAMP DUTY

Arbitration awards bearing Cost of stamped papers Clarification.
[Memo.No. 176, - Codn/75-1, P. W.D., Dt. 5-3-1975]
An extract of item 12 in Schedule 1-A to the Indian Stamp Act is printed below:
Description of instrument Proper Stamp Duty

(1) (2)
12. Award
(a) Where the amount does not 3%

exceed Rs.1,000/-
(b) Where the amount exceeds 50 Rs.

Rs.1,000/- but does not
exceed Rs.5,000/-
and for every additional 2 Rs. subject to a maximum of Rs.200/-
Rs.1,000/- or part thereof in
excess of Rs.5,000/-
_____

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THE ANDHRA PRADESH

Specification Name of Specification Page

B. Statement of approximate quantities in Schedule A

11. Quantities approximate and contractor to verify the nature

C. Drawings and Specifications

Specification Name of Specification Page

D. Materials and Workmanship

20. To be the best quality 41

E. Included in the Contract Rates

33. Defining Contract Schedule Rates 45

F. Responsibilities and Liabilities of the Contractor

44. Observance of Laws Local regulations & notices Attachments 48

50. Contractors risk and insurance 50

52. Sand and gravel 51

H. Date of commencement, completion, delays, extensions,

58. Date of commencement and completion 52

62. Payment on lump-sum basis or by final measurement

J. Arbitration and Claims of Contractors

P.S. 1. Intent and reference to Andhra Pradesh Standard Specifications : It

(a) the character of the materials to be used;

(b) the method of execution of work; and

Whenever the term Standard Specification or the abbreviation A.P.S.S. is

P.S. 2. Applicability of the Andhra Pradesh Standard Specifications :It

This preliminary specification shall apply to all agreements entered into by

P.S. 3. Contractor to sign in the Divisional or the Sub-Divisional copy of the

P.S. 4. Term Specification apart from Standard Specification :

P.S. 5. Sub-Specifications :Works of a similar nature having many common

P.S. 6. Additions and alterations to the standard specifications In the

P.S. 7. Powers of Superintending Engineers and Executive Engineers to

P.S. 8. Definition of terms :Wherever the words defined in this clause or

(b) No delegation by Executive Engineer, Superintending Engineer or higher

(c) Contractor :Wherever the term Contractor is used, it shall be understood

Note :The terms Sub-Divisional Officer, Assistant Engineer, Executive

P.S. 9. Evidence of Experience :Tenderers shall, if required, present

B. Statement of approximate quantities in Schedule A

Tenderers must satisfy themselves by a personal examination of the site of the

P.S. 12. Approximate not to mean deviation from drawings and

C. Drawings and Specifications

P.S. 16. Variations by way of modifications, omissions or additions :- (a) For

P.S. 18. Signed drawings No authority to the contractor :No signed

D. Materials and Workmanship

Samples of materials shall be furnished at the contractors expense to the

P.S.30. Dismissal of Workmen :The contractor shall, on the request of the

P.S. 31. Contractors maistri or agent and Contractors staff :The

P.S. 32. Government maistries or agents :The Government may be

E. Included in the Contract Rates

(b) Whether the term carriage or conveyance is used in a schedule item, it

Payment for carriage will ordinarily be by bulk or weight at a mileage rate

P.S. 36. Scaffolding instructions :All requisite scaffolding shall be provided at

Notwithstanding anything contained in Section 10 of the Indian Tariff Act of

F. Responsibilities and Liabilities of the Contractor

P.S. 44. Observance of Laws Local regulations and notices

P.S. 45. Accidents Hoarding, Lightings, Observations Watchmen :

The following Indemnity Bond is to be executed by the Contractor while entering