Conversion of Currency

JUDGMENT :

VIKRAM NATH, J.

1. These two appeals have been filed under Article 134A read with Article 133(1)(a) of the Constitution of India by the rival parties before the High Court of Delhi in EFA (OS) No. 19 of 2017. The High Court, by the impugned order, certified that the case involved the following substantial question of law of general importance which required a decision by this Court:

“In terms of the agreement dated 29th June 1982 between the parties and in light of the judgment dated 24th February 2015 of the Supreme Court of India in Civil Appeal Nos. 2543-44/2015, what should be the relevant date for conversion of the awarded sum from USD to Indian rupees?”

2. Relevant facts necessary for adjudication of the issue are as follows:

2.1. An agreement was executed between the parties to carry out earth work in Iraq by the Royal Construction Company Private Limited¹ [RCCPL] given by the National Projects Construction Corporation Limited.² [NPCCL] According to the contract, Clauses 31 and 32 of the agreement along with their sub-paragraphs relate to payments and advances, the same are reproduced hereunder:

“31. PAYMENTS AND ADVANCES:

All amounts and schedule of prices as mentioned in the Agreement documents are in Iraqi Dinars³ [ID] and represent the total lump sum amount payable to the Associate for various components of works. For the purpose of payment, the schedule of prices shall be used and payment released against all monthly account bills submitted by the Associate after due verifications.

32. PAYMENT OF WORK IN PROGRESS

32.1. The NPCC may pay initial advance in the form of purchase of air tickets for workers and staff of the Associate from Delhi to Iraq.

2. The NPCC shall give advance, towards the construction of residential accommodation including field office, store at the site of work, towards cost of transport vehicles (1 mini - bus, 1 land Rover and Jeep, 2 Mobile lighting units garage tools and equipment).

3. Help required for setting up of camp and for initial running of equipment will be extended to by the Chief Project Manager to the extent he deems necessary in the interest of work.

The above advances shall be recovered from the “on account bills” after 10% of the work is completed and before 90% of the work is complete. The recovery will be in the same currency as NPCC has spent for the advance. The recovery shall be made on the pro-rata basis.

Payment of work in progress:

32.2 The monthly running account bills for the quantity of work executed by the Associate shall be presented to the Chief Project Manager, NPCG before the 10th of every month. The-Associate shall be paid the net amount due after all deductions towards advances, retention money and recoveries towards cost of materials and other services. The payment shall normally be made within 15 days of such presentation of the bill. All monthly payment shall be treated as advance payments only. The running payment shall be made in the from of 65% in U.5$ and 35% in I.D. The rate of exchange for the purpose of calculations will be 1 ID = 3.37778 U.S. Dollar and this rate of exchange shall be operative throughout the period as contract.

32.3 Payment Adjustment:

Any due payment under the Agreement to be made by the Associate or to him contrary to the work completed shall be added or deducted from the payment certificate issued by the Contractor.

The - Contractor may adjust any payment certificate, if necessary, with respect to other previous payment certificates. The Associate shall have no right to claim; thereto for compensation.

32.4 Deduction from payment due to the Associates: All payments due by the Associate to the Contractor under this Agreement shall be deducted from any other payments due to the Associate, and if the event of no such dues, the Contractor shall recover the same against the performance bond furnished by the Associate. The Associate must, thereafter immediately replenish such recoveries. All deductions shall be made irrespective of any