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2009 (2) TMI 926 - SC - Indian LawsFailure to deposit the mandatory amount for proceedings before Arbitration Tribunal - Reasonableness of amount as 7% of total amount claimed - Unequal bargaining power of the parties - Payment in respect of allotted work - Prescription under Sub-clause (7) of Clause 25-A of the agreement was in conflict with the provisions of Section 31(8) read with Section 38 - It was submitted that the costs involved cannot be more than Rs. 20 crores and, therefore, the demand of Rs. 1.81 crores which is 7% of the total amount claimed is wholly arbitrary, unreasonable and capricious - HC dismissed the Writ Petition. HELD THAT:- It is to be noted that the plea relating to unequal bargaining power was made with great emphasis based on certain observations made by this Court in Central Inland Water Transport Corporation Ltd. and Anr. v. Brojo Nath Ganguly and Anr.[1986 (4) TMI 271 - SUPREME COURT]. The said decision does not in any way assist the appellant, because it has been clearly stated that the concept of unequal bargaining power has no application in case of commercial contracts. A bare perusal of the Sub-section (8) of Section 31 and Section 38, clearly shows that the provision is to operate in the absence of agreement with regard to cost. It cannot be pressed into service to get over Sub-clause (7) of Clause 25-A. The stand taken by the appellant is squarely answered by what has been stated by this Court in Assistant Excise Commissioner and Ors. v. Issac Peter and Ors.[1994 (2) TMI 294 - SUPREME COURT] held that in case of contracts freely entered into with the State, like the present ones, there is no room for invoking the doctrine of fairness and reasonableness against one party to the contract (State), for the purpose of altering or adding to the terms and conditions of the contract, merely because it happens to be the State. In such cases, the mutual rights and liabilities of the parties are governed by the terms of the contracts (which may be statutory in some cases) and the laws relating to contracts. It has been submitted by ld Counsel for the appellant that there should be a cap in the quantum payable in terms of Sub-clause (7) of Clause 25-A. This plea is clearly without substance. It is to be noted that it is structured on the basis of the quantum involved. Higher the claim, the higher is the amount of fee chargeable. There is a logic in it. It is the balancing factor to prevent frivolous and inflated claims. If the appellants' plea is accepted that there should be a cap in the figure, a claimant who is making higher claim stands on a better pedestal than one who makes a claim of a lesser amount. Appeal is clearly without merit, deserves dismissal which we direct.
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