Summary: A court case between Subhash Infraengineers Private Limited and Indraprastha Power Generation Co Ltd led to a ruling on claims about extra costs for fly ash disposal, unused machinery, and loss of profit. The court decided on January 16, 2026, to change the original decision made by an arbitrator.
Subhash Infraengineers and Indraprastha Power Generation had a deal for removing fly ash from ash ponds in Delhi. The contract started on August 1, 1994, and was supposed to last three months. However, arguments came up over extra costs due to changes in disposal places and delays.
The issue was whether Subhash Infraengineers should get extra payment for transporting ash to a farther place than initially discussed. The original contract didn't specify a fixed disposal site or distance, just that the disposal would be within Delhi.
"The rates quoted by the contractor shall be valid for all distances and that no claim whatsoever shall be entertained for change in disposal point involving different distances."
Subhash Infraengineers claimed costs for unused machinery and loss of profit due to delays and site changes. The Arbitrator initially awarded them compensation, but the court reduced these amounts.
The court, led by Justices Anil Kshetrapal and Harish Vaidyanathan Shankar, found that the Arbitrator's decisions did not fully match the contract terms. The Special Conditions of Contract (SCC) specified that disposal could be anywhere in Delhi, and no extra payment was due for longer distances.
The court also reduced the interest rate on the awarded amounts from 18% to 9% per year, reflecting current economic conditions.
The court upheld the changes made by the Single Judge, supporting the view that the contract did not entitle Subhash Infraengineers to extra payments for changes in disposal distance. This case shows the importance of clear contract terms and the limitations of arbitration decisions when they conflict with what the contract says.
