Whether clause prohibiting payment of damages could be enforced?

 

A Clause in the contract disentitling the Appellant from raising any claim for damages or compensation for failure or delay caused by the Respondent in fulfilling its obligations under the contract. Interestingly, in this case the Appellant had also given an undertaking that they shall not make any claim other than escalation because of the delay in completion for which the extension was sought and was also duly granted by the Respondent. 

 

Whether such a clause prohibiting payment of damages could be enforced? 

 

In a recent decision by the Hon'ble Supreme Court of India delivered on 31.01.2025 of M/s. C & C Constructions Ltd. v. Ircon International Limited (CIVIL APPEAL NO. 6657 OF 2023), the Hon'ble Court, firstly, rejected the Appellant’s contention, wherein it had sought to challenge the validity of the above-mentioned clause in light the Section 23 and 28 of the Indian Contract Act as the said contention was never raised before the Section 34 Court, neither was it raised before the Section 37 Court. The Hon’ble Supreme court also rejected the argument of the waiver of the said clause by the Respondent, as on more than one occasion on the specific request made by the Appellant under the aforesaid clause, the extension of time was duly granted by the Respondent. Also, Considering the limited scope of interference, the Court dismissed the Appeal.


Read the entire judgment at  ~


https://www.sci.gov.in/view-pdf/?diary_no=184122021&type=j&order_date=2025-01-31&from=latest_judgements_order

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