IMPORTANT POINT
Escalation of contract rates is permissible when delays are not due to the contractor's fault, allowing for additional payment for work done after significant delays.

JUDGMENT

Dated this the 17 ^th day of January, 2025 This appeal is at the instance of the defendants in O.S.No.84/1999 on the files of the Sub Court, Kasargod, where the plaintiff being the licenced PWD contractor prayed for grant of decree to the tune of Rs.9,57,330.14 with future interest and costs raising contention that he agreed to do the special repairs to Vidyanagar–Mudippu road (Morthana Meeyapadavu) from KM 0/00 to 3/00 on behalf of the Government of Kerala for enhanced rate and completed the work thereafter.

2. Heard the learned counsel for the appellants/defendants as well as the learned counsel for the respondent/plaintiff.

3. Parties in this appeal shall be referred as “plaintiff†and “defendants†with reference to their status before the trial court for easy reference.

4. The case of the plaintiff is that he is a licenced P.W.D. contractor. As per an agreement No. E.E./KSD/34/86-87 dated 22.9-1986 with the 2 ^nd defendant on behalf of the State, he undertook the work of special repairs to Vidyanagar-Mudippu road. The contract is a schedule rate percentage contract and the estimated cost of the work put to tender was taken for Rs. 4,94,625/- less cost of materials to be supplied by the department, amounting to Rs.89,565/-. The plaintiff agreed to execute the work at 45% above the estimated rates, except cost of the materials to be supplied by the Public Works Department. The stipulated time for completion of the work was 3 months. But due to non-supply of materials by the department in time, the work could not be completed within 3 months. Time was not the essence of the contract and the time was extended from time to time till 12.03.1996. In respect of the 1 ^st and 2 ^nd part of the work done, a sum of Rs.25,106/- and Rs.99,938/- was paid to the plaintiff. During the transportation of cement supplied by the Public Works Department to the site, the Vigilance Police seized the cement and registered a case as C.C.No. 59/1992. Since the measurement books were not available, the work could not be carried out thereafter till the case ended in acquittal on 29.03.1994. Thereafter the P.W.D. revised the estimate. A portion of the metalled part had been damaged and accordingly, the plaintiff was directed to proceed with the work as per the revised estimate made by P.W.D. The plaintiff was promised that the amount would be paid for the work at the revised rate prevailing at the time of the work. But P.W.D. paid the amount for the work done only at the rate fixed in 1986. Cost of the work as per the revised estimate was Rs.4,13,311/-. As per the old rate and the value of the materials to be supplied was Rs. 1,12,132/- and by estimating the amount payable at 45% above the estimate fixed, the amount payable was Rs.5,99,301/- and a sum of Rs.1,06,760/- and a sum of Rs. 2,75,677/- was paid to him on 31-7-1998 and 15-11-1997 respectively. The amount should have been paid at the new rate which prevailed at the time of commencement of the work in 1994. Revised Schedule as per the new rate was prepared as per letter No. C8A/37514/96/KD of the 3 ^rd defendant and file No.12535/C2/P.W.D. of the Secretary to Government P.W.D. Department. As per the new rate, the cost of the work done comes to Rs.9,51,872/- of which the cost of materials supplied by the department is Rs.1,12,132/-. The amount payable to the plaintiff comes to Rs.12,17,623/- and the amount paid to him, including deductions, is only Rs.5,99,301/-. The last payment was made on 15.11.1997 rejecting the claim for payment at the new rate due from the P.W.D. department to the plaintiff. Thus a sum of Rs.6,18,322/- is still due from the PW Department to the plaintiff. By way of cost of granite metal collected by the plaintiff in 1987 which could not be used till 1994 those materials were lost and the department has to pay damages of Rs.55,635.52 towards the work amount of 1940.78 M ³