KERALA STATE ELECTRICITY BOARD versus HINDUSTAN CONSTRUCTION CO. LTD. AND ORS.

Citation: [2006] SUPP. 9 S.C.R. 25 · Decided: 16-11-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed
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Judgment (excerpt)

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KERALA STA TE ELECTRICITY BOARD 
A 
\( 
HINDUSTAN CONSTRUCTION CO. LTD. AND ORS. 
NOVEMBER 16, 2006 
[ARJJIT PASAYAT AND S.H. KAPADIA, JJ.] 
B 
Administrative Law: 
Decision in a meeting-Non-confirmation of Minutes-Effect of-State c 
Electricity Board entering into a contract with a company for construction 
of concrete power tunnel within a fixed period of time-Extension of time 
allowed by the Board-The Company claiming compensation for work during 
extended period-Board referring the claim to a committee constituted by 
it-Committee recommending the claim for sanction-Accepted by the Board-
Payment denied on ground of non-confirmation of minllfes of the meeting- D 
Filing of writ petition by the Company to issue directions to the Board to 
implement its orders-High Court directed the Board to implement its orders 
and make payment-On appeal, Held: Non-confirmation of minutes does not 
have any effect on the decision taken by the Board in earlier meeting-
Hence, High Court's view that the decision by the Board in the earlier 
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meeting has to be given effect to, cannot be faulted with. 
Appellant-Kerala State Electricity Board entered into a contract with 
respondent No. 1- Hindustan Construction Company Ltd. for the construction 
of a concrete power tunnel for Lower Periyar Hydro Electric Power Project 
to be completed within 68 months from the date of the contract. As the work F 
could not be completed in time, appellant accorded sanction to extend the time 
of completion of the work. Respondent-Company raises certain claims by way 
of compensation as against the work done during the extended period. The 
Board constituted an Ad hoc committee to look into the claims raised by the 
Company. The Ad hoc Committee submitted its report recommending the 
Board to make a payment of Rs. 808.26 lakhs against the aggregate claim of G 
Rs.1688.08 Iakhs made by the Company. The Board decided to sanction an 
interest free ad-hoc advance of Rs. 250 lakhs which shall be adjusted against 
the amount payable to the Company. However, the Board did not make the 
payment. Aggrieved, the Company preferred a petition before the High Court. 
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SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R. 
A The High Court directed the Board to take a final decision within two months. 
The Board moved the High Court for extension oOime to comply with the 
direction. The Board in view of the directions oft.he High Court considered 
Ad-hoc committee report and rejected it The Company filed a Writ Appeal 
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before the High Court. During the pendency of the Writ Appeal, the Company 
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filed an application for amendment of the writ appeal by adding additional 
grounds, which was allowed. By the impugned judgment, the Writ Appeal was 
allowed by the High Court directing the Board to implement its earlier order 
and to make necessary payments to the Company. Hence the present appeal 
and cross appeal. 
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c 
The appellant-Board contended that the High Court went wrong in 
concluding that non confirmation of minutes did not havethe effect of wiping 
out the decision taken earlier; and that the minutes of the meeting are not 
confirmed at the subsequent meeting, it means that the decision taken at the 
earlier Board's meeting was intended not to be given effect to; thus, the 
decision is not enforceable. 
D 
The respondents submitted that the Board's decision was taken 
unanimously and the effect of non confirmation of minutes cannot in any way 
affect the decision which had already been taken. 
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Dismissing the appeal with modification, the Court 
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HELD: 1.1. The High Court rightly took note of the fact that nothing 
happened for a long time. Counter affidavit was filed by the Board stating that 
the Board has not finally accepted the recomlfiendations of the Ad hoc 
Committee for payment of certain amounf as it was under no legal obligation 
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to implement the order. The Committee was constituted by the appellant-Board. 
The varying stands, taken at different points of time show that the object was 
to avoid payment [32-D-EJ 
1.2. The High Court's view that the decision taken by the Co!Dmittee 
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has to be given effect to cannot be faulted. As rightly submitted by the counsel 
G for the respondents that non confirmation of minutes does not have any effect 
on the decision taken at the earlier meeting. [38-H; 39-AI 
Chetkar Jha v. Viswanath Prasad Verma and Ors., [1971) 1 SCR 586, 
referred to. 
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"Law and Practice of Meetings"
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