In Brief
A contractor was awarded contracts for construction of rural roads but failed to complete them within the stipulated period. The government terminated the contracts and quantified liquidated damages. While the contractor's challenge to the damages was pending before an Arbitral Tribunal, the government sent notices for recovery. The Supreme Court held that once a dispute regarding liquidated damages is referred to arbitration, the government cannot unilaterally recover the amount before the arbitral award. The Court quashed the government's recovery proceedings, establishing that a party cannot be judge in its own cause and must await arbitral adjudication before enforcing its claims.
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