Interest Payment On Excess Deduction By Client

An agency is executing a work. According to contract-agency supposed to raise the bill which will be certified by d consultant for payment by client within 15 days. By mistake escalation was paid for which agency is not entitled. Inadvertently consultant also overlooked.Ultimately it came to the notice of client and client deducted the excess amount from the running bill. In addition client charged interest at the prevailing PLR rate on excess amount so paid. Now agency claims- 1) Excess payment may be recovered. 2)No interest should be charged for excess payment. 3)Rate of Interest prevailing in market should be paid on d recovered interest amount by client from the day the interest component was recovered. Now client side puts up their points 1) Bill was raised intentionally by d agency and took full advantage of inadvertent mistake of identifying d excess amt.Excess payment may be considered as advance& minimum possible interest prevailing PLR. What could be d best solution.