In Brief
Mahanagar Telephone Nigam (MTNL) contracted with Tata Communications to supply bandwidth with last mile connectivity under a Purchase Order. MTNL failed to complete the last mile connectivity within two months as required. Tata later adjusted amounts in their bills to cover costs MTNL should have borne. The dispute concerned whether this adjustment was valid. The Court held that when parties have an express contract, quantum meruit claims under Section 70 do not apply. Instead, the liquidated damages clause (clause 16.2) governs, capping damages at 12% of contract value. MTNL's unilateral deductions exceeded this limit. The Court upheld TDSAT's order, requiring MTNL to refund the excess with 9% interest. The appeal was dismissed.
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