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Monday, April 25, 2011


Can a person claim damages after he had signed NO DUE CERTIFICATE? What if he has addition amounts due but he had signed in advance the ‘no due certificate’. Supreme Court decision provides simple principles on which an aggrieved party can claim damages in spite of issuing a ‘no due certificate’.
Contractor entitled for additional amount/damages as per terms of the agreement, merely because it had accepted final bill and issued no due certificate, it cannot be deprived of its right to claim damages if it had incurred additional amount and able to prove same by acceptable materials6.

The Apex court in R.L Kalathia & Co. V State of Gujarat6, provided the following principles:

(1) Merely because the contractor has issued “No Due Certificate”, if there is acceptable claim, the Court cannot reject the same on the ground of issuance of “No Due Certificate”.

(2) In as much as it is common that unless a discharge certificate is given in advance by the contractor, payment of bills are generally delayed, hence such a clause in the contract would not be an absolute bar to a contractor raising claims which are genuine at a later date even after submission of such “No-Claim certificate”.

(3) Even after execution of full and final discharge voucher/receipt by one of the parties, if the said party able to establish that he is entitled to further amount for which he is having adequate materials, is not barred from claiming such amount merely because of acceptance of the final bill by mentioning “without prejudice” or by issuing “No Due Certificate”.

Prepared by: S. Hemanth