ORDER

(1) The challenge in the writ petition is to the orders of recovery passed by the Tamil Nadu Generation & Distribution Corporation Limited [TANGEDO] on 03.11.2016 for the failure on the part of the petitioner to honour the Purchase Order in full.

(2) The petitioner was the successful tenderer in the contract for the supply of transformers to the respondents. A Purchase Order was placed with the petitioner for the purchase of 50 transformers at a total cost of Rs.66,20,869/-. The petitioner supplied 12 transformers and was not able to honour the commitment for supply of the remaining 38 transformer. Apart from cancelling the contract, the TANGEDCO imposed the following penalties on the petitioner for its failure to supply the transformers as per the Purchase Order.:-

1] Liquidated damages [maximum LD 10%]

towards non supply of 38 nos. of 250KVA /

11KV DTs :Rs.5,03,185.00

2] As per the T.R.1991.14[iii] since, the supplier has failed to supply the entire ordered quantity sum to be recovered from the EMD amount : -----

3] Difference in cost due to placing the order at a Higher price [M-43/10-11] :Rs.8,55,343.14

4] Penalty for delay in submission of SD :Rs.

57, 383.18

5] DT's repaired by Sp/Mtc Thiruvannamalai Circle as per Audit Slip No.41/24.11.10 :Rs. 61,920.00

6] Due to violation/break of any clauses of the contract as per P.O.Cluase 9.4 a sum to be recovered towards 5% SD :Rs.3,31,044.00

7] Negative PVC amount for the 12 Nos.DT supplied :Rs.1,31,570.00

8] Other recoveries if any : -----

Total proposed recoveries :Rs.19,40,445.00-Retention Amount Retention amount available :Rs.79,450.00 Total Effective Recoveries :Rs.19,40,445.00 – Rs.79,450.00 =Rs.18,60,995/-

[Rupees Eighteen Lakhs sixty thousand nine hundred and ninety five only]

(3) Mr.Neelakantan, learned counsel for the petitioner, would vehemently contend that the petitioner ought to have been given an opportunity before the impugned recoveries were ordered. According to the learned counsel, while Clause 12.2 of the Purchase Order provides for liquidated damages, Clause 12.3 authorises the respondent to recover the difference in price in addition to the liquidated damages. Similarly, the other recoveries made also are also subject to the proof of loss. Therefore, according to the learned counsel, there must have been an enquiry and the petitioner should have been given an opportunity to demonstrate that there was no loss before those recoveries are effected. While conceding that the recovery of liquidated damages to the tune of Rs.5,03,185/- is justified, the learned counsel would submit that the other recoveries are not justified in the absence of any opportunity having been given to the petitioner. He would also seek to rely upon various pronouncements of the Hon'ble Supreme Court and this Court in support of his submissions.

(4) Ms.V.Revathy, learned counsel appearing for the respondent/Corporation would submit that Clause 12.2 of the Purchase Order provides for liquidated damages and Clause 12.3 provides for recovery of difference in price. She would also rely upon the judgment of the Hon'ble Supreme Court in the case of Oil and Natural Gas Company Limited VS. SAW PIPES LIMITED reported in 2003 [5] SCC 705 : AIR 2003 SC 629 in support of her contention that the difference in price will also form part of the liquidated damages.

(5) I have considered the submissions of the learned counsel on either side.

(6) Clause 12.2 of the Contract which provides for liquidated damages, reads as follows:-

''12.2-If the supplier fails to deliver the equipments/materials within the time specified in the indent or any extension thereof, the purchaser shall recover from the supplier as liquidated damages, a sum of half a percent [0.5%] of the All-inclusive price* of the undelivered equipments/materials for each complete week of delay. The total liquidated damages shall not exceed ten percent [10%] of the All-inclusive price of the equipments / materials so delayed. The actual date of delivery of mat