NDLI: Mahanagar Telephone Nigam Ltd. Vs. Tata Communications Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	1872 ss. 74 and 70 liquidated damages Contract Act 12% Compensation for breach of contract
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Telecom Regulatory Authority of India Act, 1997 (24 of 1997) Indian Contract Act, 1872 (9 of 1872)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Contract Act, 1872 – ss. 74 and 70 – Compensation for breach of contract where penalty stipulated for – Claim in quantum meruit u/s. 70 when parties governed by contract – Permissibility of –Purchase Order wherein respondent was to provide last mile connectivity at two places of the appellant and levy of liquidated damages were to be limited to a maximum of 12% – Bills raised by the respondent for the services rendered amounting to Rs. 2,15,25,512/- – On account of limitation of 12%, the appellants could not have levied and deducted an amount more than Rs. 25,83,181/-, however, the appellant proceeded to unilaterally impose rentals at their own rate of dark fibre – Appellant adjusted the amount from dues payable to the respondent by deduction from the bill raised by the respondent – Respondent filed petition before the tribunal against the appellant for recovery of Rs.1,10,57,268/-plus interest thereon – Tribunal held that the principal amount to be paid back to the respondent by the appellant would be Rs.84,74,087/- with 9% interest thereon after deducting Rs.25,83,181/- (12% liquidated damages) from Rs. 1,10,57,268/- –On appeal, held: Instant case is covered by s. 74 – Tribunal rightly held that a maximum of 12% can be levied as liquidated damagesunder the contract, which would amount to Rs. 25 lakh – Since this clause governs the relations between the parties, contractually speaking a higher figure, cannot be awarded as liquidated damages,which is to be considered as final – Appellant can claim only thissum – Thus, the order of the tribunal upheld – Telecom Regulatory Authority of India Act, 1997.
Judge	Hon'ble Mr. Justice R.F. Nariman
Neutral Citation	2019 INSC 286
Petitioner	Mahanagar Telephone Nigam Ltd.
Respondent	Tata Communications Ltd.
SCR	[2019] 4 S.C.R. 885
Judgement Date	2019-02-27
Case Number	1766

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