The General Manager and another Vs. M/s Raisingh and Company

Madhya Pradesh High Court (Division Bench (DB)- Two Judge)

AR, 7 of 2016, Judgment Date: Mar 13, 2018

Law Laid Down - 

The extension in time does not extend the period of completion of the agreement. It only permits the Contractor to complete works subject to payment of liquidated damages, as agreed to. Liquidated damages are claimed on account of breach of the contract and such amount cannot be said to be unreasonable or is by way of penalty.

In absence of any allegation that the Award passed by the Arbitrator is against the public policy, liquidated damages imposed in terms of the agreement entered into between the parties could not have been interfered with by the Arbitral Tribunal even if the claim is sought through the statutory arbitration. – Judgment of Supreme Court in the case of (2003) 5 SCC 705 (Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd.) relied upon.

The Arbitral Tribunal is not a Court of appeal and is bound by the terms of the agreement between parties.

The General Manager and another Vs. M/s Raisingh and Company