Contractual bar on delay damages upheld where contractor accepted extensions and later abandoned a fresh challenge.
A contractual clause excluding damages or compensation for employer-caused delay, while allowing only extension of time, was treated as enforceable where the contractor repeatedly relied on that mechanism, accepted extensions without penalty, and gave undertakings not to pursue claims beyond escalation. On those facts, the contractor was estopped from later disputing the clause. A fresh challenge based on Sections 23 and 28 of the Contract Act was not entertained because it had not been raised below, and interference under Section 37 of the Arbitration and Conciliation Act remained limited to the narrow scope akin to Section 34. The appeal therefore failed.
Issues: (i) whether the contractual clause barring damages for delay attributable to the employer was enforceable and whether the contractor, by its conduct and undertakings, was precluded from challenging it; (ii) whether the challenge based on Sections 23 and 28 of the Contract Act could be entertained in appeal and whether any interference was warranted under Section 37 of the Arbitration and Conciliation Act, 1996.
Issue (i): whether the contractual clause barring damages for delay attributable to the employer was enforceable and whether the contractor, by its conduct and undertakings, was precluded from challenging it.
Analysis: The contract expressly provided that delay by the employer would not entitle the contractor to damages or compensation, but only to extension of time. The contractor repeatedly sought extensions by invoking that clause, accepted extensions without penalty, and later gave undertakings that no claim other than escalation would be made for the delay. The delayed monetary claims were raised only much later, contrary to those undertakings. On those facts, the contractor's conduct amounted to acceptance of the contractual scheme and operated to estop it from disputing the clause.
Conclusion: The clause barring damages was upheld, and the challenge to it failed against the appellant.
Issue (ii): whether the challenge based on Sections 23 and 28 of the Contract Act could be entertained in appeal and whether any interference was warranted under Section 37 of the Arbitration and Conciliation Act, 1996.
Analysis: The validity challenge under Sections 23 and 28 had not been raised before the courts below and could not be introduced for the first time in appeal. The court also reiterated that interference under Section 37 is narrowly confined and cannot travel beyond the limited scope available under Section 34. No ground was shown to disturb the concurrent findings.
Conclusion: The additional challenge was not entertained, and no interference with the award or the concurrent orders was justified.
Final Conclusion: The appeal failed in view of the contractual bar, the appellant's own undertakings and conduct, and the restricted appellate scope under the arbitration statute.
Ratio Decidendi: A contractor who repeatedly invokes a contractual extension mechanism, accepts extension without penalty, and gives undertakings not to make claims beyond escalation is bound by that contractual arrangement and is estopped from later challenging the clause that bars damages for delay; appellate interference under Section 37 remains confined to the narrow limits applicable under Section 34.
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