1222/2013 Suit Forte Pakistan (Pvt) Ltd. (Plaintiff) V/S Pakistan Petroleum Ltd. (Defendant)

1222/2013 Suit Forte Pakistan (Pvt) Ltd. (Plaintiff) V/S Pakistan Petroleum Ltd. (Defendant) Sindh High Court

Bench: Hon'ble Chief Justice Mr. Justice Muhammad Shafi Siddiqui(Author) Order Date: 07-FEB-17

-The contract in question contains specific terms in relation to any default of the plaintiff including but not limited to late delivery of the goods. It is also an admitted fact that on account of late deliveries of certain goods, in pursuance of such clauses relating to late deliveries the defendant No.1 had already deducted liquidated damages from the subject bills/invoice. Hence, once such late delivery charges have been recovered/deducted, the encashment of subject guarantee in relation to same issue is a debatable issue. It amounts to collecting liquidated damages twice over the same alleged default and can be termed as vexing the plaintiff twice which is also hit by Section 74 of the Contract Act. Therefore, any attempt to collect further amount on the basis of same default would tantamount to be in violation of Section 74 of the Contract Act which prima facie prohibits compensation/penalty in excess of any amount stipulated in the contract itself. --Insofar as second contention, which relates to complying with the terms and conditions of new obligations of the documents dated 09.10.2012 and performance guarantee dated 21.12.2010 is concerned, it only covers the obligation as contained in the purchase order dated 08.12.2010 and 13.12.2010 and any other subsequent amendment, novation, additional obligation, that may arise in relation to the project shall not be covered by the terms thereof. The ultimate paragraph of this performance guarantee is in support of above observation. Such recourse is deducible out of section 128 of the Contract Act, which allows the guarantee obligation to be limited by way of contract.