TaxTMI 
TaxTMI 
2024 (7) TMI 1249
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.... within 60 days, it would have to pay simple interest at the rate of 8% per annum, commencing from the date of publication of the award. 3. A perusal of the arbitral award discloses that the following claims were lodged by the respondent before the learned Arbitrator : Claim no. Particulars Accepted Yes/No Reference Claimed Raised Claim Accepted 1(i) Wrong deduction of LD Yes 8.8c 1,25,60,065/- 1,25,60,065/- 1(ii) Interest on LD No 13.1c 34,06,000/- NIL 2(i) Unpaid Invoice for supply of spares Yes 11.4c 1,62,138/- 1,62,138/- 2(ii) Interest on Unpaid Invoice No 13.1c 30,384/- NIL 3 Interest for delay in payment No 13.1c 20,64,568/- NIL 4(i) Demurrage Charges Yes 11.1c 2,16,200/- 1,30,000/- 4(ii) Interest on Demurrage Charges No 13.1c 72,450/- NIL 5 Interest on delay in lifting spares No 13.1c 53,972/- NIL 6 Conciliation Expenses No 14.1c 42,500/- NIL 7 Higher material rates No 11.1c 1,30,28,366/- NIL 8 Financial & Man-hours losses No 11.2c 65,14,183/- NIL ....
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....the purchase orders, erroneously, referred to an earlier tax regime. Upon this aspect being brought to the notice of the appellant, an addendum concerning the purchase orders was issued to the respondent, via e-mail, on 03.08.2017, which was confirmed by the respondent via an e-mail on 17.10.2017. 9. It is not in dispute that the drawings and documents received the final approval of the appellant on 15.03.2018. 9.1 Resultantly, the final delivery date under the subject contract was fixed as 26.08.2018. 9.2 The record shows (and something which is not in dispute) that under the subject purchase order concerning transformers, the respondent was required to, initially, supply 44 transformers. Later on, though, the quantity was increased to 46 transformers. 9.3 It is also not in dispute that of the 46 transformers, 42 transformers were delivered within the timeframe agreed to between the parties, i.e., by 26.08.2018. There was a delay of about 4 months with regard to 4 transformers, which were, admittedly, delivered on 31.12.2018. 10. It is the delay in delivering these 4 transformers that propelled the appellant to levy liquidated damages calculated at the rate of 9.5% ....
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....ention was made as to how and in what manner loss had been suffered. 20. The learned Single Judge, while dismissing the petition filed under Section 34 of the 1996 Act, after hearing counsel for the parties and perusing the record, has come to the same conclusion. 21. Mr Malhotra reiterates that since it was an EPC project, the delay in supplying transformers has resulted in injury/loss. Mr Malhotra contends that another entity named NTPC, which was the ultimate employer, had imposed liquidated damages on the appellant. 21.1 Mr Malhotra, however, concedes that this aspect was neither pleaded nor argued before the learned Arbitrator. 21.2 Mr Malhotra fairly concedes that this aspect was also not part of the pleadings in the Section 34 proceedings preferred before the learned Single Judge. 21.3 Furthermore, there is no dispute that no such argument was put forth before the learned Single Judge. 21.4 Insofar as the present appeal is concerned, consistent with its conduct, the appellant has framed no such ground even in the appeal before us. The argument is raised across the Bar. 22. Therefore, we are disinclined to accept this submission as this would amount to am....
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....It is only where, for instance, the contract obtaining between the party is inveigled in complexity, that the law dispenses proof of actual loss or damage. This, however, does not relieve the aggrieved party from establishing that it had suffered legal injury as a result of the breach committed by the defaulting party. 27. As noticed above, although the learned Arbitrator noticed that there was some delay in delivering 4 out of the 46 transformers, his conclusion, based on material placed before him, was that, because only 8 of the transformers had been commissioned, no legal injury was suffered by the appellant. 27.1 In our opinion, the conclusion arrived at by the learned Arbitrator, albeit, after appreciating the evidence in the context of the pleadings placed before him, falls completely within the ken of the Arbitrator and was rightly not disturbed by the Single Judge. In this context, the following observations made by A K Sikri J. (as he then was) in the matter of Indian Oil Corpn. v. Lloyds Steel Industries Ltd., (2007) SCC OnLine Del 1169, being apposite, are extracted hereafter: "47. Insofar as imposition of liquidated damages is concerned, the discussion i....
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....t of the loss or damage. Section 74 exempts him from such responsibility and enables him to claim compensation inspite of his failure to prove the actual extent of the loss or damage, provided the basic requirement for award of „compensation‟, viz. the fact that he has suffered some loss or damage is established. The proof of this basic requirement is not dispensed with by Section 74. That the party complaining of breach of contract and claiming compensation is entitled to succeed only on proof of „legal injury‟ having been suffered by him in the sense of some loss or damage having been sustained on account of such breach, is clear from Sections 73 and 74. Section 74 is only supplementary to Section 73, and it does not make any departure from the principle behind Section 73 in regard to this matter. Every case of compensation for breach of contract has to be dealt with on the basis of Section 73. The words in Section 74 „Whether or not actual damage or loss is proved to have been caused thereby‟ have been employed to underscore the departure deliberately made by Indian Legislature from the complicated principles of English Common Law, and also to....
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....is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the court cannot grant reasonable compensation. 43.2. Reasonable compensation will be fixed on well-known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act. 43.3. Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the section. 43.4. The section applies whether a person is a plaintiff or a defendant in a suit. 43.5. The sum spoken of may already be paid or be payable in future. 43.6. The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded. 43.7. S....