Searching Case Laws & Precedent on Legal Query!
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query!
Scanned Judgements…!
Submission of Bills During Running and Final Phases - Contracts typically require contractors to submit their running account bills with measurements for approval, and final bills are to be submitted after completion, which are then subject to approval by the concerned authority (e.g., MCD). The courts have upheld that such submission and approval processes are integral to the contract, and delays or disputes regarding these submissions are to be resolved based on contractual clauses and procedural compliance 2023 0 Supreme(Del) 3034.
Court Ruling on Submission Timing and Payment of Bills - The courts have emphasized that the contractual terms govern the submission and payment of bills. In particular, courts have upheld that bills—both running and final—must be submitted and processed within reasonable timeframes, and delays in submission or approval do not automatically entitle contractors to interest unless explicitly provided for in the contract. The courts have also clarified that interest on delayed payments is payable only if the contract expressly permits, and such claims must be supported by proper notices and procedures 2022 0 Supreme(MP) 451, 2023 0 Supreme(Del) 141.
Interest on Running Bills - The courts have recognized that interest on delayed payments of running account bills is permissible if the contract explicitly provides for it. Where the contract clauses allow interest on blocked capital or delayed payments, courts have upheld awards of interest, provided the delay is unjustified and the contractor has complied with procedural requirements. However, if the contract is silent or restricts such interest, claims for interest are rejected 2024 Supreme(Online)(SC) 7965, 2024 6 Supreme 274.
Rejection of Claims for Interest Without Contractual Basis - Courts have rejected claims for interest on bills where the contract does not expressly provide for such interest or where statutory requirements (e.g., notice under the Interest Act, 1978) are not met. In such cases, even if bills are delayed, interest claims are not upheld unless contractual provisions or statutory conditions are satisfied
M/S AJAY DEEP CONSTRUCTION PVT.LTD vs MAHARASHTRA STATE POLICE HJOUSING and WELFARE CORPN. LTD - Bombay
, 2021 0 Supreme(Bom) 1130.Final Bill Submission and Disputes - Courts have held that final bills should be submitted with measurements and are subject to approval by the designated authority. Disputes over non-approval or delay are to be resolved based on contractual clauses and procedural compliance. Courts have also noted that delays in final measurement or approval, due to technical or procedural reasons, do not necessarily invalidate the bills or entitle the contractor to interest unless contractual provisions specify otherwise 2023 0 Supreme(Del) 3034.
Courts have consistently upheld the contractual requirement that bills—both running account and final—must be submitted for approval during the execution of work, not solely at the end. The legal rulings affirm that submission of bills during the contract's progress is valid and binding, and courts generally support payments based on these submissions if procedural norms are followed. Claims for interest on delayed bills are upheld only when the contract explicitly provides for such interest and statutory conditions are met. Overall, the courts' rulings favor adherence to contractual clauses regarding bill submission timing and payment, reinforcing that bills should be submitted during the contract's progress rather than only at completion, and interest claims require clear contractual or statutory authorization 2022 0 Supreme(MP) 451, 2024 Supreme(Online)(SC) 7965, 2024 6 Supreme 274, 2023 0 Supreme(Del) 3034.
References:- 2022 0 Supreme(MP) 451- 2024 Supreme(Online)(SC) 7965- 2024 6 Supreme 274- 2023 0 Supreme(Del) 3034
In the complex world of construction and development contracts, one common dispute revolves around when contractors should submit their bills or claims. Delays in payments can cripple cash flow, lead to project stalls, and spark lengthy legal battles. A pivotal court's ruling has clarified that claims must typically be submitted during () rather than deferred to the final bill stage. This decision underscores the importance of timely submissions aligned with project progress.
The key legal question at hand is: Court's Ruling which Upheld the Claim for Submission of Bills to be Submitted during the Running Bills and Not during the in a Construction or Development Contract. This article explores this ruling, drawing from judicial precedents, contractual practices, and a notable case involving Mathura Refinery's hospital project. While this provides general insights, consult a legal professional for advice specific to your situation.
Construction contracts typically distinguish between (also called ) and :
Running Bills: Submitted periodically (e.g., monthly or quarterly) during project execution to claim payments for work completed to date. These are verified by the engineer or authority based on measurements. As noted in standard practices, During the performance of the work, a contractor raises or interim bills. These are raised by a date which is fixed by Engineer. On such running bills being submitted, the Engineer carries out measurements. 2014 0 Supreme(Del) 8 2014 0 Supreme(Del) 2858 2010 0 Supreme(Del) 117
: Submitted after project completion, reconciling all payments and settling any outstanding claims.
Courts have consistently emphasized that bills and claims should be raised during the running phase to ensure transparency, timely payments, and compliance. Deferring them to can lead to rejections or disputes, as contracts often require ongoing submissions. For instance, Contracts typically require contractors to submit their with measurements for approval, and are to be submitted after completion, which are then subject to approval by the concerned authority. 2023 0 Supreme(Del) 3034
Judicial rulings reinforce that submission timing is governed by contract clauses. Courts uphold claims submitted with running bills but may reject those introduced only at the final stage, viewing them as untimely. This aligns with the principle that contractors must notify and claim during project progress to allow employers to verify and budget accordingly.
In one context, recoveries were linked to running bills: from the running bills of the petitioner shall be subject to further orders in the . 2024 0 Supreme(Telangana) 292 Payment terms often specify: 100% payment shall be made against running/ submitted to Manager (Finance & Accounts) within 30 days of submission of duly verified bills. 2021 0 Supreme(All) 1300 This highlights that verification precedes payment, and submissions must occur promptly post-work completion.
A compelling example is the Mathura Refinery hospital construction case, where court oversight emphasized adherence to schedules, including financial reporting. Key milestones included:
While not explicitly detailing bill timelines, the court implied bills should align with these intervals: Bills are typically submitted at intervals corresponding to the progress report schedule, often quarterly (every 3 or 4 months). Progress reports every four months suggest bills substantiate work for payments, ensuring compliance. Delays could breach obligations, risking penalties or disputes 1996 0 Supreme(SC) 2373.
Multiple rulings affirm that courts favor submissions during running bills:
Non-Refutation of Early Running Bills: Further, even in the reply to the claim statement, the appellant Nagarpalika has not refuted the said bills but only stated that the respondent contractor had requested the release of payment of the first and second at a very early stage. 2024 Supreme(Online)(GUJ) 7874 2024 Supreme(Online)(GUJ) 7875
Interest on Delayed Running Bills: Courts may award interest if contracts provide for it and delays are unjustified. However, without explicit clauses, claims fail: The courts have recognized that interest on delayed payments of is permissible if the contract explicitly provides for it. 2024 Supreme(Online)(SC) 7965 2024 6 Supreme 274
Rejection Without Contractual Basis: Interest claims are dismissed sans contract provisions or notices: Courts reject where the contract does not expressly provide for such interest.
M/S AJAY DEEP CONSTRUCTION PVT.LTD vs MAHARASHTRA STATE POLICE HJOUSING and WELFARE CORPN. LTD - Bombay
2021 0 Supreme(Bom) 1130Final Bill Procedures: However, he completed the construction work and submitted to the defendant for payment. 2018 0 Supreme(Raj) 1085 But disputes arise if not preceded by running submissions.
Overall, Courts have consistently upheld the contractual requirement that bills—both running account and final—must be submitted for approval during the execution of work, not solely at the end. 2022 0 Supreme(MP) 451 2024 Supreme(Online)(SC) 7965 2024 6 Supreme 274 2023 0 Supreme(Del) 3034
Benefits of Timely Running Bill Submissions:- Ensures cash flow and project continuity- Demonstrates accountability to courts or authorities- Facilitates early issue resolution- Supports interest claims if contractually allowed
Risks of Delays or Final-Only Submissions:- - Payment disputes or rejections- No interest without basis- Potential court penalties or project halts
The court's ruling affirming bill submissions during running phases rather than promotes efficiency and fairness in construction contracts. By integrating progress billing, parties mitigate disputes and ensure smooth project execution. Cases like Mathura Refinery and others illustrate that adherence to timelines is crucial 1996 0 Supreme(SC) 2373 2023 0 Supreme(Del) 3034.
Disclaimer: This article offers general information based on precedents and is not legal advice. Contract specifics and jurisdiction vary—seek qualified counsel for your case.
The running bills were not paid to him within time and due to non-cooperation by respondent No. 2 and his sub-ordinate staff, the progress could not be shown. ... Claim for interest on the amounts wrongfully withheld by the department has rightly been rejected as the rescission of the contract has been upheld. ... Since the applicant was not served an....
Saurav Agarwal submitted that the High Court under Section 37 ignored the plausible view of the Arbitrator, as upheld under Section 34, and substituted it with its own reasoning. 7.5. This submission is persuasive, but the contract clauses speak for themselves. ... Interest on delayed payment of Running Account Bills and Escalation BillsAwarded Rs. 54,....
Saurav Agarwal submitted that the High Court under Section 37 ignored the plausible view of the Arbitrator, as upheld under Section 34, and substituted it with its own reasoning. 7.5. This submission is persuasive, but the contract clauses speak for themselves. ... Payments on running account bills is guided by clause 7 of the Contract and there is no ....
The terms of the contracts required the contractors to submit their running account/final bill with measurement, after which the MCD was required to approve the final bills. 3. ... The High Court has based its order on the ground that after five monsoons, the final measurements could not be ascertained. ... as it does not have the expertise in respect ....
The contract does not provide for any. ... The bills submitted by the Plaintiff from time to time, both as running bills and as final bill, were recommended for payment by the claim arises out of a construction contract. ... Coming to the first type, interest has been claimed on (i) running accou....
The bills submitted by the Plaintiff from time to time, both as running bills and as final bill, were recommended for payment by the project management consultant, whose job was to oversee the work. ... The Defendants' submission is that the contract was a lumpsum contract and no separate payment was due for any extra work. It is submitted#HL....
bills and the 3rd respondent stated that the said charges might not be reimbursed. ... from the running bills of the petitioner shall be subject to further orders in the writ petition.” ... a) For increase in the rates of seigniorage charges after the last date of submission of tender the increased amount will be recovered by the Railway from the contractors, in "on account" and "final ....
Further, even in the reply to the claim statement, the appellant Nagarpalika has not refuted the said bills but only stated that the respondent contractor had requested the release of payment of the first and second running account bills at a very early stage. ... In respect of claim No.4 towards loss of interest on the delayed payment of running account bills....
Further, even in the reply to the claim statement, the appellant Nagarpalika has not refuted the said bills but only stated that the respondent contractor had requested the release of payment of the first and second running account bills at a very early stage. ... In respect of claim No.4 towards loss of interest on the delayed payment of running account bills....
Learned counsels for the petitioners submitted that the Corporation has not released the due payments, ostensibly relying on Clauses 7 and 9 of the General Conditions of Contract. ... A perusal of the petitions would show that the petitioners claim themselves to be registered contractors engaged with the Corporation for carrying out development work in various municipal wards. ... By applying the above sa....
Subject to Clause 7 and 8, 100% payment shall be made against running/final bills submitted to Manager (Finance & Accounts) within 30 days of submission of duly verified bills. Thus, even verification precedes the submission of bills and there is no process of finalization of bills but only payment of bills automatically after their submission by the contractor. If a bill is not submitted within 30 days after completion of work, then IFFCO will not take any responsibility for....
However, he completed the construction work and submitted final bills to the defendant for payment. In such circumstances, he wrote a letter dated 14th August, 2012.
These running account bills are raised by a date which is fixed by Engineer. 7. During the performance of the work, a contractor raises running account bills or interim bills. On such running bills being submitted, the Engineer carries out measurements. A conjoint reading of Clauses 6, 7, 8, 9 and 25, shorn of minor aspects, brings out the following position.
On such running bills being submitted, the Engineer carries out measurements. 7. During the performance of the work, a contractor raises running account bills or interim bills. These running account bills are raised by a date which is fixed by Engineer. A conjoint reading of Clauses 6, 7, 8, 9 and 25, shorn of minor aspects, brings out the following position.
7. During the performance of the work, a contractor raises running account bills or interim bills. These running account bills are raised by a date which is fixed by Engineer. On such running bills being submitted, the Engineer carries out measurements.
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