SANJAY KISHAN KAUL, J.

1. M/s. Indian Farmers Fertilizers Cooperative Limited (for short „M/s. IFFCO?) floated a tender for construction of “B” Type residential quarters for its township at its Fertilizer Plant in Aonla (District Bareilly, Uttar Pradesh). M/s. Duggal Construction (India) Ltd. (for short “M/s. Duggal”) submitted its bid for the same and vide letter dated 8.4.1985, contract No.117 was allotted to M/s. Duggal for construction of 257 quarters for contract value of `4,26,80,000.00. In response to the very same tender another contract No.117-A for construction of 128 quarters was awarded to M/s. Duggal vide letter dated 25.5.1985 of about the same value.

2. The contract was to be completed within a period of 18 months as per clause 2 of Letter of Intent (for short LoI) dated 8.4.1985. Any delay was to attract liquidated damages. The relevant clause 2 reads as under:

“The entire job has to be completed within a period of 18 (eighteen) months from the date of acceptance of this Letter of Intent. Any delay in completion of job will attract liquidated damages at the rate of ½ per cent (half per cent) of the contract price (as defined under clause 1 of the letter