In a recent decision by the Madras High Court, M/s. Chendur Associates faced a setback in their fight for payment over a delayed railway project. The court agreed with a previous decision, rejecting several payment claims against Southern Railway.
Back in 2012, M/s. Chendur Associates won a contract to build major bridges for a new railway track between Tindivanam and Nagari. The contract, valued initially at around ₹6.85 crore, was supposed to be completed by February 2013. However, due to various delays, it was extended until August 2018.
M/s. Chendur Associates blamed Southern Railway for the delays. They pointed out issues like:
The contract was finally closed in September 2018, but by then, the project had been delayed for over five years.
M/s. Chendur Associates took the issue to a decision-making panel in 2019, seeking payment for various losses, including business costs, increased costs, and loss of profit. On October 14, 2020, the panel agreed with some claims but rejected others, particularly claims numbered 9 to 12, 14, and 15, which were related to business costs and profits.
"No other payment shall be given for work extended over more time." — Clause 17A(ii) of the General Conditions of Contract
On December 4, 2025, Justice N. Anand Venkatesh ruled that the panel's decision was correct, citing Clause 17A(ii) of the contract, which allows only for more time without extra payment. The court noted that Southern Railway was indeed responsible for the delays but upheld the panel's decision due to the contract terms.
The court's decision means that while the contract allowed for more time, it did not allow for financial payment for delays, even if the delays were the fault of Southern Railway. M/s. Chendur Associates was advised they could start new legal action if they wished.
This case highlights the importance of understanding contract clauses and their implications, especially in projects prone to delays.
