Judgment :- Vikramajit Sen, AG.C.J. 1. This writ petition assails the order of the Debt Recovery Appellate Tribunal, passed on 17.04.2007 directing the petitioner, Andhra Pradesh State Electricity Board to pay a sum of `49.59 lakhs to the respondent bank viz., Vijaya Bank. Out of this sum of `48.45 lakhs had already been deposited with Vijaya Bank which it was permitted to appropriate. Accordingly the petitioner is required to pay the shortfall of `1.14 lakh to Vijaya Bank. 2. At the outset we must record our dissatisfaction with the documents placed on record by the petitioner. In particular, Annexure-B purports to be a true copy of the order of the Debt Recovery Tribunal in O.A. No.655/1995, in respect of which the impugned order came to be passed. One of the contentions of the learned counsel for the petitioner is that no adverse findings have been returned against the petitioner by the DRT. A perusal of that order however reveals that the Tribunal has gone into specific detail vis-à-vis the liability of the “8th defendant”. The true copy of the order depicts the petitioner as “defendant no.7”. Learned counsel for the respondents’ perseverance that the finding of the DRT was against the petitioner finally led us to call for the certified copy of the said order. It was at that stage that it came to be revealed that in actuality the petitioner was the 8th defendant before the DRT. Learned counsel for the petitioner would have us believed that in the preparation of Annexure-B, by inadvertent error, the petitioner had been depicted as the 7th Defendant while it had been arrayed as the 8th Defendant before the DRT. It appears that Systems Manufacturing (P) Ltd. which was the Defendant No.6 in O.A. 655/95 in the DRT has for reasons recondite and not adequately explained before us, been removed from the array of parties in Annexure-B. We accept that ‘errors’ of this nature can inadvertently creep into the preparation of a paper book. We, however, cannot accept this excuse in the case in hand for the reason that even though arguments were addressed in detail, counsel for the petitioner failed to point out the discrepancy. The petitioner would certainly be in the know of the position that the DRT had specifically considered its liability and passed orders in that context. The attempt to mislead the court must be deprecated. 3. Mr. The petitioner would certainly be in the know of the position that the DRT had specifically considered its liability and passed orders in that context. The attempt to mislead the court must be deprecated. 3. Mr. M.S. Bhagat, learned counsel appearing for the petitioner had laid emphasis on the fact that the petitioner’s liability has been crystallized consequent upon a compromise between the contesting parties, to which the petitioner was not privy. This however, is not the position as will presently become manifest. 4. Succinctly stated Bulk System International Ltd., (Bulk Systems) had been appointed by the petitioner-appellant as its contractor. Bulk Systems sought for and obtained financial accommodation from Vijaya Bank, predicated on a General Power of Attorney executed by Bulk Systems in favour of the bank. Payments perceived to the contract between the petitioner and the Bulk Systems were routed through Vijaya Bank. It will also be relevant to mention that on the instance of Bulk Systems, Vijaya Bank had issued bank guarantees in favour of the petitioner. One of the transactions between the several parties before us was inter-se Bulk Systems and Nirlons Ltd., towards the cost of supply of conveyor belt. It is also not disputed that a civil suit has been filed by Nirlons Ltd., against Bulk Systems in which the petitioner had also been arrayed as a party. 5. The defence of the petitioner can be gleaned from the affidavit of its Superintending Engineer (Civil), Construction Circle, Hydel Project, Sreesailam Project West, Andhra Pradesh State Electricity Board, Sreesailam filed before the DRT. It mentions the filing of a suit by Vijaya Bank for a sum of `64.60 lakhs against Bulk Systems, pleading therein that this amount was recoverable from the petitioner; attachment orders were thereupon passed in O.S 2062/94. The following asseverations in the affidavit call for reproduction, firstly they establish the position that the petitioner has admitted its liability to Bulk Systems for the sum of `49.59 lakhs. Secondly, the affidavit lays claim to a sum of `72 lakhs by way of damages incurred by the petitioner due to the alleged breach of contract by Bulk Systems. We asked learned counsel for the petitioner whether any legal action has been initiated by the petitioner against Bulk Systems in respect of its claim for damages and he has clarified that no such action or suit has been filed. We asked learned counsel for the petitioner whether any legal action has been initiated by the petitioner against Bulk Systems in respect of its claim for damages and he has clarified that no such action or suit has been filed. This fact is at the fulcrum of our decision. “2. I submit that Vijaya Bank had filed a suit for recovery of dues from the 1st Respondent and also made an application in O.S. No.2062/94 and also filed I.A. No.1 in the said suit for attachment of the amount of `64,60,000 alleging that the APSEB is liable to pay the said amount. Accordingly the Hon’ble Court has passed an order attaching the said amount of `64,60,000/- as per the affidavit filed by the Vijaya Bank. After service of the said order this Respondent had written a letter to the Manager of the Applicant herein stating that the Respondent Board is liable to pay to the BSIL `64,60,000/- gross and net amount payable to the said BSIL amounting to `49,59,000/-being the cost of conveyor belt supply by M/s Nirlons Ltd., and further stated that the Respondent is preserving the amount payable to the BSIL, if any, pending disposal of the I.A. Meanwhile, the said suit came to be transferred to this Hon’ble Tribunal. 3. I further submit that when the letter was written to the bank on 31.10.94, the contract dated 25.1.1991 which was entered into between BSIL and this Respondent was not terminated and except O.S. No.2062/94, no other suit was pending before any other court. 4. I further stated that in view of the fact that the BSIL did not complete the work in pursuance of the agreement dated 25.1.1991 in spite of repeated requests and demands made by this Board and affording number of opportunities. Hence this Respondent Board had issued a show-cause notice on 16.2.95 calling upon the BSIL to come forward and complete the work in pursuance of the agreement dated 25.1.1991. But in spite of service of the said notice dated 16.2.95, the BSIL did not come forward to execute the balance work and as such the Respondent had terminated the contract by its letter dated 15.3.95 and written a letter to the Applicant Bank for invocation of bank guarantees issued by it. But the Applicant Bank, for the reasons best known to it, did not honour the bank guarantees issued by it. But the Applicant Bank, for the reasons best known to it, did not honour the bank guarantees issued by it. In all fairness and in order to keep the credibility of the bank, the applicant bank should have honoured the bank guarantees issued by it. Instead of honouring the bank guarantees, in collusion with BSIL the applicant bank did not honour the bank guarantees and allowed BSIL to approach the court to get redressal of his grievances. Accordingly, the BSIL had filed a suit and obtained an ex parte order of injunction restraining the applicant bank from making any payment covered under the bank guarantees. I further submit that as per the terms of the contract if the BSIL continues default or did not complete the work, the Board is at liberty to entrust the contract to any other contractor and get the work done through him and recover the excess amount payable to the said contractor, from BSIL. 5. It is pertinent to submit here that in view of the stoppage of the work by the BSIL, the Board had incurred a loss to the extent of `72 lakhs. Since the Board has entrusted the balance work to be completed by another contractor by name APHMEL amounting to `86,73,370/- which was required to be completed by BSIL since the contract entrusted to the aforesaid contractor, the Board is paying a sum of `1,58,39,357/-. Thus under the circumstances the Board is incurring a loss to the extent of `72 lakhs. 6. Hence, the order passed by this Hon’ble Tribunal is liable to be recalled as the order is passed basing on the letter dated 31st October 1994 written by this respondent. I further submit that as stated above, when the letter was written, the contract with BSIL was not terminated and the Respondent Board was expecting that the BSIL would complete the work as per the contract dated 25.1.1991. Since the BSIL did not complete the work in spite of the show-cause notice issued to him, the Board had no other option except to terminate the contract and as such the Board incurred a loss to the extent of `72 lakhs, which is liable to be paid by the BSIL and as such the Board is not liable to pay any amount to the BSIL. Consequently, the amount of `49,59,000/- shall have to be adjusted towards the loss which is sustained by the Board. Under the circumstances, it is just and necessary to recall the order dated 13th January 1997 passed by this Hon’ble Tribunal calling upon the Board to send the amount of `64,60,000/-. If the annexed application is not allowed, the Board will be put to irreparable loss and hardship. Hence the annexed application.” 6. In a relationship of principal and contractor, normally payment or liability would flow from the former to the latter. The contractor performs tasks on the asking of the principal for which reimbursement has to be made. The liability of the principal is myriad and of various hues. In a turnkey project, liability would include price of the material procured by the contractor as well as payment of salary and wages. Prima facie it appears to us that the aforementioned sum of `49.59 lakhs was towards material (conveyor belts) purchased from Nirlon Limited by Bulk Systems (contractor) on account of the contract work awarded to it by the principal (APSEB). Obviously the petitioner, APSEB, was satisfied that payment had to be made under this head, as conceptually on several others heads, and hence liability to this extent came to be acknowledged. Since the petitioner had agreed to what we may loosely call as ‘lien’ in favour of Vijaya Bank, which in turn had made funds available to Bulk Systems, Vijaya Bank was within its contractual rights to claim any amount standing in the books of APSEB in favour of Bulk Systems. It is on this legal foundation that attachment orders were passed. We have already mentioned that Nirlon Limited has filed in the Bombay High Court a recovery suit against Bulk Systems for recovery of the price of the conveyor belts supplied through Bulk Systems ostensibly for completion of the turnkey project. That matter is sub-judice before another Court and we would be loathe to make any further comments. However it is also endemic in contractual relationships such as between APSEB and Bulk Systems that there may be mutual credits and debits, although these would be few and far between. The exception would be where advance payment has been released by the principal to the contractor against which very little or no work has commenced. However it is also endemic in contractual relationships such as between APSEB and Bulk Systems that there may be mutual credits and debits, although these would be few and far between. The exception would be where advance payment has been released by the principal to the contractor against which very little or no work has commenced. In such eventualities it is legally conceivable that while a certain sum is shown as payable by the principal to the contractor, other amounts may also find place in the respective Books of Accounts in favour of the principal from the contractor. However, a claim for damages cannot be shown as outstanding in favour of the principal until it is adjudicated upon. This is the basic and fundamental principle of the law of damages. It will be of advantage merely to refer to the decision of the Supreme Court in Union of India –vs-Raman Iron Foundry, AIR 1974 SC 1265 . The Apex Court observed-“A claim for damages for breach of contract is, therefore, not a claim for a sum presently due and payable and the purchaser is not entitled, in exercise of the right conferred upon it under clause 18, to recover the amount of such claim by appropriating other sums due to the contractor. On this view, it is not necessary for us to consider the other contention raised on behalf of the respondent, namely, that on a proper construction of clause 18, the purchaser is entitled to exercise the right conferred under that clause only where the claim for payment of a sum of money is either admitted by the contractor, or in case of dispute, adjudicated upon by a Court or other adjudicatory authority. we must, therefore, hold that the appellant had no right or authority under clause 18 to appropriate the amounts of other pending bills of the respondent in or towards satisfaction of its claim for damages against the respondent and the learned Judge was justified in issuing an interim injunction restraining the appellant from doing so”. The following passage from H.M. Kamaluddin Ansari & Co. vs. Union of India AIR 1984 SC 29 succinctly brings out what appears, at first blush only, as a divergence of opinion between the two benches of the Hon’ble Supreme Court:- “27. The following passage from H.M. Kamaluddin Ansari & Co. vs. Union of India AIR 1984 SC 29 succinctly brings out what appears, at first blush only, as a divergence of opinion between the two benches of the Hon’ble Supreme Court:- “27. Clause 18 of the standard form of contract earlier was slightly differently worded and it read ‘whenever under this contract any sum of money is recoverable from and payable by the contractor’. But this formula was deliberately and advisedly altered when the present standard form was introduced and instead the words ‘whenever any claim for payment of a sum of money arises’ were substituted and this change in phraseology indicated that in order to attract the applicability of the present Cl.18, it was not necessary that there should be a sum of money due and payable by the contractor to the purchaser, but it was enough if there was a mere claim on the part of the purchaser for payment of a sum of money by the contractor irrespective of the fact whether such sum of money was presently due and payable or not. This Court, however, did not attach importance to this aspect of the matter by observing: “We do not think it is legitimate to construe Cl.18 of the contract between the parties by reference to a corresponding clause which prevailed in an earlier standard form of contract. This is not a statute enacted by the legislature where it can be said that if the legislature has departed from the language used by it in an earlier enactment, it would be a fair presumption to make that the alteration in the language was deliberate and it was intended to convey a different meaning. It is a clause in a contract which we are construing and there any reference to a similar or dissimilar clause in another contact would be irrelevant.” ….. 30. We are clearly of the view that an injunction order restraining the respondents from withholding the amount due under other pending bills to the contractor virtually amounts to a direction to pay the amount to the contractor-appellant. Such an order was clearly beyond the purview of Clause (b) of Section 41 of the Arbitration Act. 30. We are clearly of the view that an injunction order restraining the respondents from withholding the amount due under other pending bills to the contractor virtually amounts to a direction to pay the amount to the contractor-appellant. Such an order was clearly beyond the purview of Clause (b) of Section 41 of the Arbitration Act. the Union of India has no objection to the grant of an injunction restraining it from recovering or appropriating the amount lying with it in respect of other claims of the contractor towards its claim for damages. But certainly Cl.18 of the standard contract confers ample power upon the Union of India to withhold the amount and no injunction order could be passed restraining the Union of India from withholding the amount”. 7. It is for this reason that we are unable to countenance and accept the arguments that the admission of liability of APSEB for the said sum of `64.60 lakhs or 49.59 lakhs (as the case may be) could be written-off and obliterated by the subsequent cancellation of the contract. While it is quite possible that APSEB has incurred damages due to the non-performance by Bulk Systems of the contract as per its terms, these damages would remain notional or speculative till such time as they are adjudicated upon by the competent forum. We use the term, ‘competent forum’ for the reason that in the event that an arbitration clause exists between the parties, this adjudication could be carried out by the arbitrator in place of the Court. 8. The liability admitted by the petitioner, APSEB remains steadfast because of the failure to initiate steps by the petitioner for adjudication of damages. The argument relating to the compromise behind the back of the petitioner therefore assumes the nature of a red-herring. The position that continues to hold good is that the petitioner remains liable to Bulk Systems, and because of inter se relationship with Vijaya Bank, for the admitted sum of `64.60 or 49.59 lakhs, as the case may be. 9. Therefore the impugned decision of DRAT remain unassailable. The interim orders passed in these proceedings are recalled. The petition fails. We shall now return to the observations made at the commencement which have caused disturbance to us. 9. Therefore the impugned decision of DRAT remain unassailable. The interim orders passed in these proceedings are recalled. The petition fails. We shall now return to the observations made at the commencement which have caused disturbance to us. In view of the categorical findings against the 8th Defendant in the DRT, which has been extensively reproduced in the impugned order of the DRAT, the arguments of learned counsel for the petitioner based on the erroneous array of parties was avoidably misleading. For this reason, the petition is dismissed with costs of `50,000/-. Costs to be paid by the petitioner to the Karnataka State Legal Services Authority within two weeks from today.