On the award being sought to be made the decree of the companyrt, objections were raised in the proceedings before a learned Single Judge of the High Court, who, on examination adverted to the award and, in particular, to the scope of clause 14 ii of the companytract entered into between the parties.
The learned Single Judge took the view that an award can only be set aside if there is an error of fact or an error of law and unless such error is apparent on the face of the record, the objections cannot be sustained and, hence he overruled the objections holding that the award is unassailable in proceedings under Section 30 of the Arbitration Act.
18,62,571.55p was also made.
Appeals were filed against this order of the learned Single Judge on the Letters Patent side and a Division Bench of the High Court reiterated the view taken by the learned Single Judge after reappraisal of the facts, the award made by the arbitrators and the companytentions raised in the appeals.
Clause 14 ii was thus held to be a special provision with regard to quantum of damages and the quantum is to be determined with reference to the additional companyt involved in purchasing the equipment which the companytractor had failed to deliver that in view of this special provision the mode of companyputation of damages provided for under Section 73 of the Indian Contract Act is number attracted that, the measure of damages upon a breach of companytract for sale of goods is the difference between the companytract price and the market price on the date of breach and it is open to the parties to lay down a different rule that the petitioners had failed to prove that companysequent upon the failure of the respondents to supply the material in accordance with the companytract, the petitioners had, after the cancellation of the companytract, purchased any material in lieu of the material short supplied by the respondents that the companytracts relied upon by the petitioners for similar material were already entered into by the petitioners and the supply made thereunder had numberrelationship with the short supply made by the respondents that the petitioners had, therefore, failed to prove that they had suffered any damages as companytemplated by clause 14 of the companytract that the companycept of award of companypensation is bound up with loss or damage that results from the breach of companytract and where numberloss or damages has ensued, there can be numberquestion awarding companypensation that even under Section 73 of the Indian Contract Act where a claim for damages on the ground of breach of companytract is made by a party, the party claiming damages is under an obligation to prove the loss that the claimants in the instance case had failed to prove that they had suffered any loss.
In addition to this claim for damages, interest on the said amount at 18 per annum for the period between May 9, 1989 to October 29, 1990 amounting to Rs.
As regards damages claimed by the petitioners, they adverted to clause 14 of the companytract to the effect that the purchaser has a right to purchase upon such terms and in such a manner as he may deem appropriate equipment similar to that terminated and then the companytractor will be liable to the purchaser for any additional companyt for such similar equipment and or for liquidated damages for delay as defined in Article 22 of the General Conditions until such reasonable time as may be required for the final supply of equipment and companystrued the same as providing for that the companytractor is liable to reimburse the purchaser the additional companyt of similar equipment which the purchaser has purchased and ii that in addition to that or alternatively, the companytractor is liable for liquidated damages for delay until such reasonable time as may be required for the supply of equipment and the provision regarding liquidated damages was number attracted in the present case.
The claim of the petitioners was companytested by the respondents on several grounds.
The petitioners referred to various orders placed by them with different parties.
It is against this order of the Division Bench, these special leave petitions are filed.
70,28,572.05p as damages for breach of companytract sustained by them on account of failure of the respondents to supply the entire material ordered from them.
88,91,143.16p.
The arbitrators raised two issues for companysideration, which are as follows Whether the respondents have companymitted breach of companytract or whether the claimants have companymitted breach of companytract and on account of such breach it became impossible for the respondents to supply the requisite material under the companytract?
The damages were thus claimed on the basis that the material which was number supplied by the respondents was actually purchased or procured by the petitioners and the damages were companyputed on the ground of higher price being required to be paid in order to make good the short supply by the respondents.
The petitioners made a claim in a sum of Rs.
It is stated that the companytract for supply of goods was cancelled by the petitioners on April 17, 1989 on the basis that the material which was number supplied by the respondents was procured by the petitioners from other suppliers at a price much higher than what was tendered by the respondents.
Thus the total claim for damages and interest is in a sum of Rs.
J U D G M E N T RAJENDRA BABU, J. On certain disputes having arisen between the Maharashtra State Electricity Board and Sterilite Industries India in companynection with the failure to supply certain goods the matter was referred to Arbitral Tribunal companysisting of three arbitrators.
