M/s Kohli Builders And Developers Private Limited vs M/s VISA Steel Limited

Arindam Sinhha, J

Mr. Das, learned senior advocatte appears on behalf of appellant and hands up copy of doocument dated 20th June, 2007, which was exhibit-5 in the reference. He submits, the document was the original contract. It contemmplated subsequent award of contract foor construction of admministrative building at same item rattes. The terms and conditions of the work order and amendment would be issued accordingly. The amendment no.(2) is dated 21st January, 2008. It also provided for, inter alia, completion period.

On query from Court Mr. Das submits, award was made on itemms of claim put forward by his client in the reference.

The award was set aside in challenge mounted by respondent, solely on the ground that the issue regarding stoppage of work and substantial application of the term for liquidated damages was, according to the Court below, not considered by the tribunal, leading to patent illegality. He refers to the time clause in the original contract/work order, reproduced in page 14 of the impugned judgment dated 23rd October, 2021. The clause is reproduced below.

“Completion of works is the essence of contract. Liquidated Damage (LD) will be levied for delay in completion of the works. If the contractor fails to complete the works within the completion period including extension if any, LD will be 1 % of the contract value per week of delay or part thereof subject to maximum 10 % of the contract value.”

He submits, there is discussion in impugned judgment regarding e-mail dated 4th November, 2008 but disregarded as not made exhibit in the reference and, therefore, illegally relied upon by the tribunal. He submits, time was not the essence of contract. By impugned judgment it was found that so far as the administrative building is concerned there was no agreement and the same was undertaken under mutual understanding between the parties. The first contention is, that was incorrect/erroneous appreciation by the Court below. He demonstrates original contract and amendment no.(2) in respect of administrative building.

Both the documents bear time clauses. The conclusion time was of the essence by impugned judgment is contradictory to the erroneous finding of mutual understanding between the parties. Lack of appreciation appears on face of impugned judgment and it should be set aside in appeal.

Respondent will be heard on adjourned date. Court will require satisfaction on application of section 55 in Contract Act, 1872 in view of following said in impugned judgment.

“It is true that the petitioner allowed the O.P. to continue construction despite the completion of the stipulated term/period, without notice to claim liquidated damage, but the same cannot be utilized to his discomfort.”

Appellant will supply copy of original work order dated 20th June, 2007 to respondent. Mr. Das has supplied a copy in Court.

List on 6th April, 2022.

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