UNION OF INDIA vs CHANDALAVADA GOPALAKRISHNA MURTHY .

The Supreme Court held that under Clause 17(3) of the contract, if there is a delay caused by the Railway, the contractor is not entitled to damages or compensation, but may receive an extension of the completion date. The Court reaffirmed the principle established in Ch. Ramalinga Reddy Vs. Superintending Engg. & Anr. (1999) and General Manager (Northern Railway) Vs. Sarvesh Chopra (2002), stating that compensation cannot be awarded if the contract is extended under its terms. Consequently, the order of the Andhra Pradesh High Court was set aside, and the appeals were allowed without costs.