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Supreme Court of India 2019-08-30 allowed

M/S TULSI NARAYAN GARG vs THE M.P. ROAD DEVELOPMENT AUTHORITY

Bench: 3 — N.V. Ramana, Indira Banerjee, Ajay Rastogi

In Brief

A contractor was awarded contracts to construct rural roads but the employer terminated the agreements and claimed liquidated damages. The contractor disputed the damages and filed for arbitration. Before arbitration could conclude, the employer initiated recovery proceedings treating the disputed amount as arrears of land revenue. The Supreme Court held that a party cannot recover disputed contractual amounts unilaterally pending arbitral adjudication, as it would make the party an arbiter in its own cause. The Court quashed the recovery proceedings, holding that amounts become due only after arbitration determines liability.

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Contract Law Arbitration Liquidated Damages Government Contracts Procedure

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