Indian Kanoon - Search engine for Indian Law

O.M.P. (COMM) Nos.258/2016 & 47/2017 Page 3 As per GCC cl.29.1.1, the notice of termination should have been issued to us. Without issuing notice, you have straightway terminated contract. Termination of contract as per owner's Convenience, without issuing notice under cl 29.1. 1 and without making contractors payment in accordance to GCC (Part III of Contract document) cl.29.1.3 (a) & (b)is Arbitrary, against contractual provisions and against trade practice.

"6. We do not find any merit in the said stand and stance as Sub-clause (IV) of Clause (9) is clear and categoric and does not suffer from any doubt or ambiguity. Either party had option to terminate the contract by giving thirty days notice in writing. Sub- clause (II) on the other hand is a specific clause, which empowered and gave option to the respondent i.e., to the Project Manager and Consultant to terminate the agreement in case of non-payment of fees within thirty days from receipt of reminder by a courier letter. There would be instant termination on satisfaction of the stipulations under Sub-clause (II), whereas in case of Sub-clause (IV) termination would take place vide thirty days prior notice.

Sub-clause (II) had dealt with a specific eventuality, i.e., non- payment of fee by the owner/appellant to the Project Management and Consultant/respondent. Sub-clause (IV) obviously was incorporated with the intention giving an option to the either party to terminate the contract. No doubt, Sub-clauses (I) and (IV) would overlap insofar as right of the owner, i.e., the appellant is O.M.P. (COMM) Nos.258/2016 & 47/2017 Page 17 concerned, but this cannot be a ground to hold that Sub-clause (IV) would not be available to the respondent. Sub-clause (IV) in plain and simple words thus states that either party could terminate the contract by giving thirty days notice in writing to the other. In a way, both the appellant and the respondent were placed equally and given same right and option of termination by thirty days notice.

28. In Indian Oil Corporation Ltd. (supra ) the Supreme Court has held that where the contract empowers either party to terminate the Agreement by giving a notice of 30 days, the distributors/aggrieved party was entitled to compensation, being only the loss of earnings for the notice period.

29. In Comau UK Ltd.( supra ), the Queen's Bench Division has held that where the contract could be terminated at any time for convenience, the contracting party cannot be held entitled to the profit on the whole of the goods and services to be supplied pursuant to the Agreement, but only to such profit as it might have gained prior to any "termination for convenience". The Award of full damages would have the effect of giving it "the benefit of a better bargain than it actually made".