Friday, March 6, 2026
Latest:
2025ArbitrationHigh CourtLatestLegalMay 2025

Contract clauses bar claim for damages for loss on account of delay

legaldeli

Contract between the parties for construction of three elevated Metro Stations in 22 months vide Agreement dated 21.12.2009. 

In all five extensions were sought by the contractor and granted but without compensation.  

Each extension was accepted without compensation / damages, it was acted upon by the contractor and subsequently the contractor claimed damages. 

Clause 2.2 of GCC provides that for any delay in handing over of site, contractors will be entitled to only reasonable extension of time and no monetary claim.

Clause 8.3 of GCC provides that in case of delay by the contractor, the contractor shall be liable to pay liquidated damages and any other compensation for the damages suffered by the employer.

However, the Arbitral Tribunal granted Rs.28,74,82,181/- vide Award on issue No.1(d) for the loss suffered by the appellant on account of delay.  It was held that clauses 2.2 and 8.3 of GCC are not applicable to the facts of the case.

This was set-aside in Section 34 Arbitration petition.  The High Court in section 37 confirmed the said decision.

 HELD that the respondent having accepted the performance by the appellant with no compensation further request for compensation is not contemplated. The extensions having been granted without compensation, any subsequent request for compensation shall not be maintainable.  Any inaction of the respondent on such request has no effect in law.   It is the decision of the respondent to give extension of time with price variation which shall bind the parties.  This requirement of putting the employer on notice about such claim for compensation itself is not clearly present in any of the applications for EOT. Moreover, in none of EOT letters, the respondent has agreed to pay the compensation.

 2002 (4) SCC 45 – General Manager, Northern Railways and Another  Vs.  Sarvesh Chopra case

 Judgment dated 20.5.2025 of the Division Bench of the High Court of Karnataka at Bangaluru in COMAP No.526 of 2022 of M/s. Larsen and Toubro Limited   and M/s Bangalore Metro Rail Corporation Limited

You May Also Like

Section 148 -NI Act – 20% payment pending appeal against conviction

legaldeli

Service Tax on Ocean Freight Imports under CIF contracts for Silvassa unit in 2017 – transportation cost upto customs station in India incurred by foreign supplier

legaldeli

Duty of Referral Court to examine dispute to screen the parties from being forced to arbitration

deliljosh

Leave a Reply

Your email address will not be published. Required fields are marked *

I HAVE READ THE DISCLAIMER AND AGREE TO IT.

User Acknowledgement

By proceeding further and clicking on the "AGREE" button herein below, I acknowledge that I of my own accord wish to know more about LegalDeli for my own information and use. I further acknowledge that there has been no solicitation, invitation or inducement of any sort whatsoever from LegalDeli or any of its members to create an Attorney-Client relationship through this knowledge site. I further acknowledge having read and understood the Disclaimer below.

Disclaimer
About: This knowledge-site (www.LegalDeli.in) is owned and operated by LegalDeli (“NDA”), and is a resource for your informational and educational purposes only.

No Warranty: NDA does not warrant that any content or information contained on this knowledge-site is accurate, correct, complete or up-to-date, and hereby disclaims any and all liability to any person for any actual or threatened loss or damage caused by errors or omissions, whether such errors or omissions result from negligence, accident or otherwise. NDA assumes no liability for the interpretation and/or use of the content and/or information contained on this knowledge-site, nor does it offer any warranty of any kind, either expressed or implied in relation to such content or information.

Third-Party Links: NDA does not intend that links / URLs contained on this knowledge-site re-directing users to third party websites be considered as referrals to, endorsements of, or affiliations with any such third party website operators. NDA is not responsible for, and makes no representations or warranties, express or implied, about the content or information contained on such third party websites to which links may be provided on this knowledge-site.

No Legal Advice: By clicking ‘I agree’ and proceeding further, you acknowledge, represent and undertake that you on your own accord wish to know more about NDA, its capabilities and research content and information contained on the knowledge-site, for your own knowledge and personal use. The content and information contained on this knowledge-site should not be construed as nor relied upon as legal advice. You as a reader or recipient of content or information contained in this knowledge-site should not act, nor refrain from acting, based upon any or all of such content or information, but should always seek the advice of competent legal counsel licensed to practice the relevant law in the appropriate jurisdiction.

No Attorney-Client Relationship: This knowledge-site is not intended to be and you should not consider the content or information contained therein to be an advertisement, solicitation, inducement or invitation for an Attorney-Client relationship. Transmission, receipt or use of this knowledge-site, including content and information contained therein, does not constitute nor create an Attorney-Client relationship between NDA and you.

I Agree