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2018 (5) TMI 2036 - HC - Indian LawsDemand for liquidated damages after dissolution of AMC - plea of the petitioner is that the respondent suffered no damages due to delay in delivery of the handsets and hence the respondent is not entitled to any damages/penalty - fraud and unjust enrichment or not? - Whether the Claimant is entitled to claim no. 1? - HELD THAT:- It is clear that the same is absolutely without merits. It is a fact recorded by the learned Arbitrator based on the agreement and documents placed on record that a sum of ₹ 2,47,43,500/- became payable on account of the delays by the petitioner - the terms and conditions of the AMC clearly provides that if the petitioner fails to deliver the repaired handsets within the stipulated period of 14 days the petitioner shall be liable to pay a penalty @ ₹ 100/- per day per terminal. In view of the specific clause merely because there was a delay in raising of the bill would not do away the liability of the petitioner under the said clause. Whether the claim no. 1 or any part thereof is barred by limitation? - HELD THAT:- Where a sum is named in a contract as liquidated amount payable by way of damages, the party complaining of a breach can receive such amount only if the amount is a genuine pre-estimate of damages fixed by both the parties and found to be such by the Court. In other cases where a sum is named in the contract as liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount, so stated. Reasonable compensation is to be fixed on well known principles that are applicable to the law of contract. Damage/loss caused is a sine qua non for applicability of the section. A perusal of the cross-examination of Shri Ramesh Singh shows that he has clearly pointed out that the customers of the respondent had to suffer as there was delay in return of the handsets. It is manifest that the reputation of the respondent suffered. In an industry disgruntled customers do not help in expansion of business. It is quite clear that when a manufacturer of mobile telephones is unable to speedily repair defective telephones supplied to its customers it is bound to cause a loss of reputation/image. Such loss of reputation/image would lead to loss of revenue. Such damages/loss of revenue cannot easily be quantified as is sought to be argued - this was clearly a case where the respondent had suffered damages. The nature of damages suffered would be such where it would not be easy to lead evidence to assess the nature of damages suffered. The damages quantified in the contract can be said to be a genuine pre-estimate of the damages. The learned Arbitrator rightly concluded that award of the said damages as stipulated in the contract does not lead to unjust enrichment of the respondent. It is not for this Court to reassess the evidence to negate the findings of fact recorded by the learned arbitrator - Further, the learned Arbitrator on account of the fact that part of the claim of the respondent was barred by limitation only awarded about 50% of the amount claimed by the respondent as damages for late repairing of the handsets. The above is in any case a reasonable compensation for damages suffered by the respondent and cannot be said to be contrary to Section 74 of the Contract Act. Petition dismissed.
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