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M/S Peto Dumpum Enterprise And Anr vs The Union Of India And 4 Ors on 7 May, 2026 cites

State Of Karnataka Etc vs Shri Rameshwara Rice Mills ... on 24 February, 1987

15. As far as liquidated damage is concerned, in the facts of the instant case, in our opinion, the issue cannot be adjudicated before this Court. It is seen that there is still a dispute about the percentage of completion of the Contract Work by the Appellants though the Appellants contended that they have completed 49% of the Contract Work. The respondent authorities contended that only 26.21% of the work has been completed by the Appellants. Further, the settled law regarding claiming of liquidity damages under Sections 73 and 74 of the Contract Act has been discussed in a catena of cases by the Hon'ble Supreme Court. The ratio laid down by the Hon'ble Supreme Court in the case of State of Karnataka v. Sri Rameshwara Rice Mill reported in (1987)2 SCC 160, Page No.# 13/14 which is followed in the case of J. G. Engineers Private Ltd vs. Union of India and Another reported in (2011)5 SCC 758, provides that the question of whether the other party committed breach cannot be decided by the party alleging breach. A contract cannot provide that one party will be the arbiter to decide whether he committed breach or the other party committed breach. That question can only be decided only by an adjudicatory forum, i.e., a Court or an Arbitral Tribunal. The entitlement to claim compensation against a breach of contract by opposite party is contained in Sections 73 and 74 of the Indian Contract Act, 1872. Section 73 of the Contract Act contemplates award of damages for losses suffered by breach of contract by the opposite party and Section 74 of the Contract Act stipulates that in a case, a contract is broken and a sum is named in the contract as the amount to be paid in case of such breach, whether or not actual damage or loss is proved to have been caused thereby, the aggrieved party is entitled to receive from the opposite party who has broken the contract, a reasonable compensation not exceeding the amount so named. Therefore, under Sections 73 and 74 of the Contract Act, before imposing any amount of compensation against a contractor, the primary responsibility of the employer is to fix the liability against the contractor on the basis of quotient facts that contractor has breached the contract by delaying performance beyond stipulated time. Unless such breach is established, the question of imposition of any amount of compensation does not arise at all.
Supreme Court of India Cites 4 - Cited by 222 - O C Reddy - Full Document

M/S.J.G.Engineers Pvt.Ltd vs Union Of India & Anr on 28 April, 2011

15. As far as liquidated damage is concerned, in the facts of the instant case, in our opinion, the issue cannot be adjudicated before this Court. It is seen that there is still a dispute about the percentage of completion of the Contract Work by the Appellants though the Appellants contended that they have completed 49% of the Contract Work. The respondent authorities contended that only 26.21% of the work has been completed by the Appellants. Further, the settled law regarding claiming of liquidity damages under Sections 73 and 74 of the Contract Act has been discussed in a catena of cases by the Hon'ble Supreme Court. The ratio laid down by the Hon'ble Supreme Court in the case of State of Karnataka v. Sri Rameshwara Rice Mill reported in (1987)2 SCC 160, Page No.# 13/14 which is followed in the case of J. G. Engineers Private Ltd vs. Union of India and Another reported in (2011)5 SCC 758, provides that the question of whether the other party committed breach cannot be decided by the party alleging breach. A contract cannot provide that one party will be the arbiter to decide whether he committed breach or the other party committed breach. That question can only be decided only by an adjudicatory forum, i.e., a Court or an Arbitral Tribunal. The entitlement to claim compensation against a breach of contract by opposite party is contained in Sections 73 and 74 of the Indian Contract Act, 1872. Section 73 of the Contract Act contemplates award of damages for losses suffered by breach of contract by the opposite party and Section 74 of the Contract Act stipulates that in a case, a contract is broken and a sum is named in the contract as the amount to be paid in case of such breach, whether or not actual damage or loss is proved to have been caused thereby, the aggrieved party is entitled to receive from the opposite party who has broken the contract, a reasonable compensation not exceeding the amount so named. Therefore, under Sections 73 and 74 of the Contract Act, before imposing any amount of compensation against a contractor, the primary responsibility of the employer is to fix the liability against the contractor on the basis of quotient facts that contractor has breached the contract by delaying performance beyond stipulated time. Unless such breach is established, the question of imposition of any amount of compensation does not arise at all.
Supreme Court of India Cites 12 - Cited by 265 - R V Raveendran - Full Document
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