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