EPC contractors cannot claim extra payment for variations lacking prior written departmental approval.

ISRO awarded RVR Projects an EPC contract for an Integrated Titanium Alloy Tank Production Facility at Tumakuru.

RVR claimed payment for additional works, including an enlarged cable trench, mezzanine-floor work exceeding the tender quantity, and related BOQ items.

ISRO disputed liability, relying on Clause 12 of the General Conditions of Contract (GCC), which governed variations and additional costs.

The Commercial Court decreed RVR’s claim for Rs.6,92,87,650, but did not award the interest sought.

ISRO appealed; RVR filed a cross-objection seeking interest at 18% per annum, which was delayed by 316 days.

1. Whether the Commercial Court’s decree for the claimed additional works was sustainable in light of Clause 12 of the GCC and the evidence of departmental approval and payment.

2. Whether RVR was entitled to interest at 18% per annum on its claim.

The Court applied Clause 12 of the GCC, which required the contractor to follow the Department-approved drawings and designs and required variations to be specifically approved; absent such approval, variations were to be carried out at no extra cost where the cost was deemed included in the contract price.

A party claiming payment for additional work must establish not merely that the work was physically executed, but that it fell outside the contractual scope, was undertaken pursuant to a duly authorised departmental variation, and was properly measured and valued.

The judgment cited no judicial precedents.

Section 13(1-A) of the Commercial Courts Act provided the basis for the appeal, and Order XLI Rule 22 CPC was invoked for the cross-objection.

The Court held that the tender documents and Clause 12 required prior departmental approval for the disputed variations.

RVR produced no contemporaneous written instruction or approval for the principal cable-trench and mezzanine claims; the later preparation of extra-item statements and evidence that some other extra works had been accepted did not establish entitlement to all disputed amounts.

The Commercial Court had not adequately distinguished approved extra work from work already within the EPC scope, nor established the contractual basis and valuation of each claimed item.

Because the consequential claims depended on the alleged additional mezzanine and cable-trench work, they also could not independently sustain the decree.

With the suit dismissed, the interest claim did not survive; the cross-objection was also barred by the unexplained 316-day delay.

RVR’s cross-objection for interest was dismissed on the merits and for delay.

The final order directed that the parties bear their respective costs.