Express 80% supply-stage payment cap governs despite separately priced BOQ items.

The appellants were contractors engaged by the Kerala Water Authority (KWA) on Jal Jeevan Mission projects.

Their contracts included BoQs separately describing and pricing supplies, including pipes.

After supplying tested materials at site, the contractors claimed payment at the full accepted BoQ rates.

KWA limited bills at the supply stage to 80% of the estimated rate or quoted rate, whichever was less, relying principally on Clauses 8.8 and 9.14.1.6 of the tender conditions.

The Single Judge rejected the contractors’ claims in a common judgment dated 8 June 2026; the contractors appealed.

Whether the contractors were entitled, upon supply and certification of materials separately priced in the BoQ, to immediate payment of 100% of the accepted rate, notwithstanding Clauses 8.8 and 9.14.1.6.

Whether the contractual provisions, read as a whole, limited payment at the supply stage to 80% of the estimate rate or quoted rate, whichever was less, with further payment governed by the contract’s staged-payment provisions.

A contract must be construed as a whole, giving effect to its express terms and reading its provisions harmoniously; a BoQ’s separate pricing of items does not, by itself, make the underlying works contract divisible or create an unconditional right to full payment upon supply.

Under Nabha Power Ltd. v. Punjab State Power Corporation Ltd., implied terms may be read into a contract only where the five conditions of the Penta Test are met, and express terms remain controlling.

The Kerala Public Works Account Code distinguishes an intermediate or secured advance against materials from final payment for completed work; the Code explains the nature of such payment, while the contract determines its permissible extent.

Clauses 8.8 and 9.14.1.6 expressly capped bills at the supply stage at 80% of the estimate rate or quoted rate, whichever was less.

The Court also referred to the deference ordinarily owed to the tendering authority’s interpretation of its tender documents, absent perversity, mala fides or arbitrariness.

The Court accepted that the contracts included item-rate BoQs, but held that the BoQs could not be read in isolation from the payment provisions and the wider contractual scheme.

Clauses 9.14.1.1–9.14.1.5 tied the timing and quantity of pipe supplies to the progress of laying works and written instructions from KWA; Clause 9.14.1.6 then expressly limited the bill that could be raised “on each supply”.

Clauses 8.8 and 9.14.1.6 therefore permitted an intermediate payment subject to the stated ceiling, while Clauses 8.16.2–8.16.5 provided for staged bills and final settlement upon completion of the contractual scope.

Treating the separately priced supply item as automatically payable in full on delivery would deprive the express 80% ceiling of effect.

The contractual ceiling governed payment at the supply stage, and the balance remained subject to the agreement’s staged and final-payment provisions.

The writ appeals were dismissed, the Single Judge’s judgment was left undisturbed, and the interim order was vacated.