Home Case Index All Cases Indian Laws Indian Laws + SC Indian Laws - 2019 (2) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 2091 - SC - Indian LawsPermission for claim in quantum meruit under Section 70 of the Indian Contract Act, 1872, when parties are governed by contract - whether the appellant was justified in adjusting this amount from the dues payable to the respondent by deduction from the bills raised by the respondent? - HELD THAT:- In Alopi Parshad and Sons Ltd. v. Union of India, [1960 (1) TMI 41 - SUPREME COURT], this Court dealt with an arbitration award which, inter alia, awarded certain amount on the basis of quantum meruit. In setting aside the Award on the ground of error apparent on the face of the record, this Court held Compensation quantum meruit is awarded for work done or services rendered, when the price thereof is not fixed by a contract. For work done or services rendered pursuant to the terms of a contract, compensation quantum meruit cannot be awarded where the contract provides for the consideration payable in that behalf. Quantum meruit is but reasonable compensation awarded on implication of a contract to remunerate, and an express stipulation governing the relations between the parties under a contract, cannot be displaced by assuming that the stipulation is not reasonable. In Mulamchand v. State of M.P., [1968 (2) TMI 116 - SUPREME COURT], this Court held that the provisions of Section 175(3) of the Government of India Act are mandatory in character and based on public policy. Therefore, the formalities that are stipulated when contracts are entered into on behalf of the Government cannot be waived or dispensed with. As has been correctly held by the impugned judgment, a maximum of 12% can be levied as liquidated damages under the contract, which sum would amount to a sum of INR 25 lakh. Since this clause governs the relations between the parties, obviously, a higher figure, contractually speaking, cannot be awarded as liquidated damages, which are to be considered as final and not challengeable by the supplier. This being the case, the appellant can claim only this sum. Anything claimed above this sum would have to be refunded to the respondent. The impugned judgment of the TDSAT upheld - appeal dismissed.
|