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2. Brief narration of facts is necessary before we embark upon the contentions raised on behalf of the appellant. On April 18, 1988, SAIL formulated a scheme entitled "Full Requirement Supply Scheme" (for short, `the Scheme'). The said scheme is said to have been designed for meeting the full requirements of HR Coils/Skolps to the customers. Those who wanted to avail the said material as per the scheme were required to register the requirements with SAIL. The scheme further stipulated that those who wanted material over and above what was likely to be available from indigenous sources and were willing to accept imported HR Coils were required to register the requirements separately. The scheme was in operation in respect of two quarters, namely, (i) July to September, 1988 and (ii) October to December, 1988.

Clause 7.2 "SAIL shall supply materials as described in the offer/work order(s)/Delivery order(s) issued by SAIL from time to time. SAIL, however, shall have a period of one month after expiry of the indicated quarter/quarters as grace period for the purpose of supply or supplies. In the event of SAIL's failure(s) to deliver the indicated quantities even after the expiry of the grace period, SAIL shall pay to the customer(s) compensation @0.25% (quarter per cent) per month or part thereof on the value of the materials of the supplies delayed beyond the quarter/quarters plus the grace period(s) subject to a maximum of 3% (three per cent ) of the value of the delayed supplies. The value for this purpose shall be worked out on the same basis as mentioned in note (iii) to para 3.1 regarding calculation of Initial Financial Cover. The aforesaid compensation shall be paid within three months from the date of completion of order. In case an order is not executed within 12 months from the expiry date of the grace period, the order would be treated as closed after payment of applicable compensation, if and as due. Delay(s) caused in effecting supplies on account of or all of the force majuere conditions and/or on account of the failure/non-observance of the required formalities by the customer(s) shall be accepted the SAIL shall not bear any liability for such period(s)."

29. Insofar as booking of July-September, 1988 quarter by the respondent is concerned, it is an admitted position that the appellant (SAIL) declined the supply of materials i.e. 1500MT of 2mm thickness HR coils on the ground of `reasons beyond control'. The arbitrator in the award observed that SAIL has admitted that the demand was validly registered by the claimant; that material was available in abundance specially from domestic source and that supplies were made to others ignoring the claim of the present respondent. The arbitrator held that the intimation of the SAIL to the present respondent that the material will not be supplied to the claimant cannot fall within the ambit of Clause 7.2.

The answer has to be plainly in the negative. It is well known that intention of the parties to an instrument has to be gathered from the terms thereof and that the contract must be construed having regard to the terms and conditions as well as nature thereof. Clause 7.2 that provides for compensation to the respondent for failure to supply or delayed supply of the materials by SAIL was never intended to cover refusal to deliver the materials of the supplies on the part of the SAIL. Refusal to supply materials by SAIL resulting in breach is neither contemplated nor covered in Clause 7.2. There is no impediment nor we know of any obstacle for the parties to a contract to make provision of liquidated damages for specific breaches only leaving other types of breaches to be dealt with as unliquidated damages. We are not aware of any principle that once the provision of liquidated damages has been made in the contract, in the event of breach by one of the parties, such clause has to be read covering all types of breaches although parties may not have intended and provided for compensation in express terms for all types of breaches. It is not a question of giving restrictive or wider meaning to clause 7.2 but the question is what is intended by the parties by making a provision such as this and does such clause cover all situations of breaches by SAIL.