https://www.taxtmi.com/caselaws?id=463690 Liquidated damages for delayed performance were examined to determine whether the contractual stipulation operated as a penalty under s.74 of the Contract Act. The SC held that delay in completing a public-utility sewerage project presumptively causes loss (including environmental consequences and interest on blocked capital), so strict proof of actual loss was not indispensable; the burden lay on the defaulting contractor to prove that no loss occurred or that the stipulated sum was penal. Where a contract stipulates a maximum amount rather than a fixed sum and evidence of actual loss is absent, the court may award a reasonable portion as compensation and treat the balance as penalty. Applying this, the SC reduced the award to 50% of the amount claimed, with interest as granted by the HC, and allowed the appeal in part. en-us Wed, 04 Feb 2015 00:00:00 +0530 Fri, 19 Dec 2025 13:12:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=463690 Liquidated damages for delayed performance were examined to determine whether the contractual stipulation operated as a penalty under s.74 of the Contract Act. The SC held that delay in completing a public-utility sewerage project presumptively causes loss (including environmental consequences and interest on blocked capital), so strict proof of actual loss was not indispensable; the burden lay on the defaulting contractor to prove that no loss occurred or that the stipulated sum was penal. Where a contract stipulates a maximum amount rather than a fixed sum and evidence of actual loss is absent, the court may award a reasonable portion as compensation and treat the balance as penalty. Applying this, the SC reduced the award to 50% of the amount claimed, with interest as granted by the HC, and allowed the appeal in part. Case-Laws Indian Laws Wed, 04 Feb 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=463690