P. DIVAKARAN v. THE UNION OF INDIA
Case at a glance
- Decided
- 10 Feb 2009
- Bench
- P BHAVADASAN
Outcome
Dismissed
The appeal is dismissed
Judgment
J.B.KOSHY, Ag.C.J. & P.BHAVADASAN, J.--------------------------------------W.A.No.1534 of 2007-------------------------------------Dated 10th February, 2009JUDGMENTKoshy, Ag.C.J . Appellant/petitioner entered into a contract with the second respondent for construction of Central School etc.. Ext.P11 is clauses of contract. Petitioner has not completed the contract within the stipulated time. Time was extended for eight months. Stillpetitioner was not able to complete the contract and the contract was terminated and there was dispute regarding the payment due to the petitioner. Because of the abandonment of the work and delay incompletion of the work, the work has to be re-tendered on a higher cost. As per the provisions of the arbitration, an amount ofRs.3,29,058/= with interest was awarded to the petitioner. A counterclaim of Rs.65 lakhs including claim for the contract being terminated at the risk of the petitioner was rejected by the Arbitrator.
Thearbitration award was not challenged and it was implemented. Eventhough claim for liquidated damages was raised by the respondents before the Arbitrator, since it was not an arbitrable issue as per the contract conditions, no award was passed for the liquidated damages by the arbitrator. Thereafter, Superintending Engineer demanded W.A.1534/20072liquidated damages. Since that was not paid, recovery proceedings were taken. That was challenged by the petitioner before this court contending that recovery proceedings were time barred and also submitted that Superintending Engineer himself fixed the liquidated damages and if damages are payable, respondents ought to have approached the civil court and got a decree. He also relied on Circular No.TLC-27 of Government of India. In this case, it is admitted that the contract was not completed in time or even within the extended time and contract was abandoned by the petitioner.
While considering the escalation of contract, the Arbitrator found in the award as follows:
I, therefore, find delays attributable to the claimants. The respondents have extended the validity of contract under clause 5 of the contract reserving right to recover liquidated damages. Therefore, the action taken by the competent authority to recover liquidated damages for the extended period of contract is justified. Hence the claim of the claimants is rejected.
Therefore, the arbitrator held that claim for liquidated damages is fulfilled. W.A.1534/200732. Now, we will refer clause 2 of the contract which provides for demand of liquidated damages. Clause 2 reads as follows: “CLUSE 2If the contractor fails to maintain the required progress in terms of clause 5 or to complete the work and clear the site on or before the contract or extended date of completion, he shall, without prejudice to any other right or remedy available under the law to the Government on account of such breach, pay as agreed compensation the amount calculated at the rates stipulated below or such smaller amount as the Superintending Engineer(whose decision in writing shall be final and binding)may decide on the amount of tendered value of the work for every completed day/week (as applicable)that the progress remains below that specified in Clause 5 or that the work remains incomplete.
This will also apply to items or group of items for which a separate period of completion has beenspecified.i) Completion period (as originally stipulated) not exceeding 3 months @ 1% per day.ii) Completion period (as originally stipulated) exceeding 3 months @1% per week. Provided always that the total amount of compensation for delay to be paid under this Condition shall not exceed 10% of the TenderedValue of work or of the Tendered Value of the item or group of items of work for which a separate period of completion is originally given. W.A.1534/20074The amount of compensation may be adjusted or set-off against any sum payable to the Contractor under this or any other contract with the Government.” Here, liquidated damages payable is specifically mentioned in the contract and there is no necessity for any adjudication for assessing the quantum of damages and the parties agreed that SuperintendingEngineer is competent to demand liquidated damages.
Operative part
Even though arbitration award was satisfied by the respondents, petitioner challenged the claim for liquidated damages. Since the work was not completed, the Superintending Engineer demanded maximum amount of damages that is payable, i.e. 10% of the tendered value of work. Considering the facts and circumstances of the case, learnedJudge reduced the same to 5% . Respondents did not file any appeal and it has become final. In view of the provision for liquidated damages and fixation of damages in Clause 2 and in view of the finding that delay was caused due to the petitioner's fault etc. we are of the view that the demand cannot be questioned by the petitioner ina writ petition. It cannot also be stated that the demand is time barred. The amount is due to the Government and the demand was made within time. If at all petitioner has got a case that termination W.A.1534/20075of work was not on his fault, it is for the petitioner to approach the civil court instead of approaching this court. On the facts of this case, we are of the view that no interference is required in the impugned judgment. The appeal is dismissed. J.B.KOSHY ACTING CHIEF JUSTICE P.BHAVADASAN JUDGEtks
Questions this judgment answers
What did the Court decide in this case?
The Court recorded the following disposition: The appeal is dismissed
Which court decided this case, and when?
Kerala High Court, on 10 Feb 2009. The bench was P BHAVADASAN.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.