Calcutta High Court
Sebabrata Bose And Associates (P) Ltd vs The Kolkata Metropolitan Development ... on 4 July, 2024
Author: Debangsu Basak
Bench: Debangsu Basak
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
AND
The Hon'ble JUSTICE PARTHA SARATHI SEN
APOT 220 of 2022
WITH
WPO 475 OF 2016
IA GA 1 OF 2022
SEBABRATA BOSE AND ASSOCIATES (P) LTD.
Versus
THE KOLKATA METROPOLITAN DEVELOPMENT AUTHORITY AND ORS.
APOT 190 OF 2022
IA GA 1 OF 2022
THE KOLKATA METROPOLITAN DEVELOPMENT AUTHORITY AND ORS.
Versus
SEBABRATA BOSE AND ASSOCIATES (P) LTD.
For the appellant in APOT 220 of 2022 and: Mr. Probal Kr. Mukherjee, Sr.Adv.
for the respondent in APOT 190 of 2022 Mr. Debanik Banerjee, Adv.
Mr. Akash D. Ganguly, Adv.
For the State: Mr. Kishore Datta, Ld. AG
Mr. Satyajit Talukder, Adv.
Mr. Abhisek Guha, Adv.
Ms. Sonal Agarwal, Adv.
Last Heard on: 20.06.2024
Judgement on: 04.07.2024
PARTHA SARATHI SEN, J:-
1. In these two appeals the judgement dated April 25, 2022 as
passed by the Learned Single Bench in WPO/475/2016 has
been assailed both by the writ petitioner( in APOT No. 220 of
2022) and by the respondent Authority( in APOT No. 190 of
2022).
2. By the judgement impugned the Learned Single Bench allowed
the writ petition and directed the respondent Authority of the
said writ petition that is; Kolkata Metropolitan Devlopment
Authority ( herein after referred to as the 'respondent
authority' in short) to disburse a sum of Rs.82,48,925/- in
favour of the writ petitioner in respect of the work done by the
writ petitioner in respect of Uluberia Project along with Rs. 1
crore, deposited by the petitioner with the respondent
authorities as security for Uluberia project positively within
May 31, 2022.
3. The respondent Authority felt aggrieved and thus preferred
appeal vide; APOT No. 190 of 2022.
4. The writ petitioner also felt aggrieved for not grant of any
interest upon the claim amount by the Learned Single Judge
and thus approached this Court by filling appeal vide; APOT
No. 220 of 2022.
5. Since in these two appeals common questions of facts and
laws are involved and since the parties to the instant two
appeals are identical and also since both these appeals arise
out of a common judgement, we propose to dispose the instant
two appeals by a common judgement.
6. For effective adjudication of the instant two appeals the facts
leading to filling of WPO/475/2016 before the Learned Single
Bench is required to be discussed in a nutshell.
7. The respondent authority issued two separate work orders
infavour of the writ petitioner, one of such was for the
Uluberia project and another was for the Bansberia Project by
executing two separate contracts of which Clauses 46(1) and
(3) and Clause 48(3) are identical. In respect of Bansberia
project, there occurred an alleged delay of the writ petitioner in
carrying out the work for which the respondent Authority
deducted a sum of Rs. 82,48,925/- towards liquidated
damages from the amount payable to the writ petitioner on
account of the work done by the writ petitioner in respect of
the Uluberia project.
8. The writ petitioner challenged the aforesaid action of the
respondent Authority by filling the aforesaid writ petition.
9. In course of hearing, Mr. Mukherjee, Learned Senior Counsel
appearing on behalf of the writ petitioner argued that when
the Learned Single Judge by the impugned order has found
that the deduction of Rs. 82,48,925/- by the respondent
Authority is contrary to the Law as well as contrary to the
aforesaid three clauses of the contract, there is no justification
on the part of the Learned Single Judge for not granting
interest on such illegal deducted amount.
10. Mr. Mukherjee, Learned Senior Counsel appearing on
behalf of the writ petitioner thus submits that the appeal being
APOT No. 220 of 2022 may be allowed by awarding adequate
interest upon the awarded amount.
11. Mr. Mukherjee, Learned Senior Counsel appearing on
behalf of the writ petitioner further submits that the Learned
Single Bench however in the impugned judgment rightly
noticed that the Law of the land as well as the aforesaid three
clauses of the contract do not permit the respondent
Authorities to recover the alleged liquidated damages by way
deduction of the dues of the writ petitioner in connection with
a separate project i.e.; Uluberia project and thus APOT No.
190 of 2022 may be dismissed.
12. Per contra, Mr. Dutta Learned Advocate General
appearing on behalf of the respondent Authority submits that
on meaningful reading of the aforesaid three clauses of the
contract it would reveal that the respondent Authority in order
to recover the liquidated damages as imposed by it is within its
power to deduct from any sum due or which may become due
to writ petitioner. It is thus submitted that the Learned Single
Bench has failed to visualize that aspect while passing the
impugned judgement.
13. Placing his reliance upon the reported decision of
'Kearla State Electricity Board & another -vs- Kurien
E.Kalathil & others' reported in (2000) 6 SCC 293, it is
argued by Mr. Dutta Learned Advocate General for the
respondent Authority that the Learned Single Judge acted
beyond its jurisdiction in interpreting the aforesaid three
clauses of the contract while sitting in a writ jurisdiction. Mr.
Dutta Learned Advocate General for the respondent Authority
thus submits that it is a fit case for allowing APOT No. 190 of
2022 by setting aside the impugned order and for dismissing
the APOT No. 220 of 2022.
14. Though the Learned Single Bench in the impugned
judgement has quoted the aforesaid three clauses of the
contract, we consider it necessary to reproduce the said three
clauses once again for effective disposal of the instant appeals.
15. Such clauses of the contract are reproduced herein
below in verbatim :-
"46(1) Liquidated Damages for Delay - If the
Contractor shall fail to achieve completion of the
Works within the time prescribed by Clause 42
hereof, then the Contractor shall pay to the Employer
the sum stated in the Contract as liquidated
damages for such default and not as a penalty for
every day of part or a day which shall elapse
between the time prescribed by Clause 42 hereof and
the date of certified completion of the Works. The
Employer may without prejudice to any other method
of recovery, deduct the amount of such damages from
any money in his hands, due or which may become
due to the Contractor. The payment or deduction of
such damages shall not relieve the Contractor from
his obligation to complete the Works, or from any
other of his obligations and liabilities under the
Contract."
"... ... (3) Extent of Liquidated Damages - The
liquidated damages referred to in sub-clause (1) for
delay of each day or part thereof, shall be at the rate
of one percent (1%) or such smaller amount as the
Employer may decide, or the total value of the
Contract Price excluding the value of such part or
section of the works as may have been covered by
certificate of completion in terms of the provisions of
subclause (2) above, Provided however that in no
case shall be total amount of liquidated damages
exceed ten percent (10%) of the total Contract Price
for whole Works."
"...48(3) Remedy on contractor's failure to carry
out work required - If the Contractor shall fail to do
any such work as aforesaid requirement by the
Engineer, the Employer shall be entitled to employ
and pay other persons to carry out the same, which
in the opinion of the Employer, the Contractor was
liable to do at his own expense under the Contract. In
the said event, all expenses consequent thereon or
incidental thereto shall be recoverable from the
Contractor by the Employer, or may be deducted by
the Employer from any sum due or which may
become due to the Contractor."
16. It is accepted, not only in India but also in other
countries, that the subject of liquidated damages and
penalties in the law of contracts is a complex one. There are
several conceptual differences as to whether the assessment of
reasonable compensation made ex ante (at the time of entering
into contract) is binding or is subject to ex post (after the
breach) review by the court. There are judgments in the
common law countries which widely differ, and there are
scores of articles by learned academicians dealing with the
advantages and disadvantages of the prospective or ex ante or
first look approach or of the retrospective or ex post or second
look approach. It is to be noted that, in legal literature, the
former is treated as a traditional concept while the latter is
treated as a modern concept.
17. It cannot be disputed that for construction of the
contract, it is settled law that the intention of the parties is to
be gathered from the words used in the agreement. If words
are unambiguous and are used after full understanding of
their meaning by experts, it would be difficult to gather their
intention different from the language used in the agreement. If
upon a reading of the document as a whole, it can fairly be
deduced from the words actually used therein that the parties
had agreed on a particular term, there is nothing in law which
prevents them from setting up that term. Further, in
construing a contract, the court must look at the words used
in the contract unless they are such that one may suspect
that they do not convey the intention correctly. If the words
are clear, there is very little the court can do about it.
18. Coming to factual aspects as involved in these two
appeals it appears to us that the Learned Single Bench on
meticulous scrutiny of the aforesaid three clauses of the
contract did not find any provision that for recovery of alleged
liquidated damages for Bansberia Project from the writ
petitioner, the respondent authority can deduct the said sum
from the legitimate dues of the writ petitioner from the
respondent Authority in respect of Ulberia project and
practically on such score, the writ petition was allowed.
19. In our understanding since Clause 48(3) of the said
Contract is placed after Clause 46(1) of the self same contract,
the later clause is to be interpreted and/or understood
keeping in mind the previous clause of the Contract.
20. From the wordings of Clause 46(1) of the Contract it
appears to this Court that the parties to the said agreement
had agreed that the employer is entitled to the deduct of the
amount of damages from any money in his hands or which
may become due to the contractor and Clause 48(3) of the said
Contract postulates that in the event of failure on the part of
the contractor to do the work, the expenses consequence
thereupon or incidental thereto as incurred by the employer
shall be recoverable from the contractor by the employer or
may be deducted by the employer from any sum due or which
may become due to the contractor.
21. On conjoint reading of the aforesaid two clauses, it
appears to us that it was never the intention of the parties to
the said Contract that the employer's right of recovery of
damages and/or the expenses incurred by the employer on
account of contractor's failure to carry out work is limited to
the amount to any sum due or which may become due to the
contractor on account of the self same contract only but on
the contrary the same can also be recovered from any money
in the hands of the contractor or which may become due to
the contractor on account of a separate contract in between
the same parties as has been done by the
respondent/authority which was challenged before the learned
single bench by filing the writ petition.
22. We thus find no infirmity in the action of the
respondent/authority and thus APOT 190 of 2022 is allowed
and APOT 220 of 2022 is dismissed along with all connected
applications.
23. Consequently, the judgement dated April 25, 2022 as
passed by the learned Single Judge in WPO 475 of 2016 is
hereby set aside.
24. There shall be no order as to costs.
25. Urgent Photostat certified copy of this judgement, if
applied for, be given to the parties on completion of usual
formalities.
[Partha Sarathi Sen, J.]
26. I Agree.
[Debangsu Basak, J.]
