Monoranjan Mallick, J - (1.) THIS is an appeal against the judgment and decree passed by the Assistant District Judge, 5th Court, Alipore on 10th March, 1988 in Title Suit No. 12 of 1985 directing the Respondent to get a decree of Rs. 1 lac against the appellant with costs together with interest on the basis of the award passed by the Arbitrator, Mr. Justice L. P. Nigam on 12th February 1985 and partially setting aside the part of the award by which the Arbitrator rejected the claim of the petitioner/respondent regarding the claim of the liquidated damages and directing the remission of the award for reconsideration of the Issues Nos. 3 and 4 decided against the respondent by new and qualified Arbitrator as to be decided by the contesting parties through their mutual consent.
(2.) THE facts may be briefly stated as follows: By an agreement, dated 3.2.72 between the plaintiff/respondent and the defendant/appellant, dated 3.2.72 the appellant agreed to supply, erect and commission machinery and equipment specified in schedule 'A' to the said Agreement and items and matters incidental thereto and agreed to erect and commission with entire satisfaction of M/s. Textile Corporation Ltd. for a total consideration of Rs. 1,57,96,300 on terms and conditions as contained in the agreement. It has, inter alia, been agreed that the machinery and equipment would be given at the site by 15th October, 1973 and in which respect time shall be the essence of contract, that the guarantee shall not be deemed to have been fulfilled until within one full crushing season available after commissioning of the machinery and equipment it handles and processes through 2000 tonnes sugar cane for a period of 7 consecutive days, that the sellers shall provide guarantee that the machinery and equipment to be supplied by them will be of standard quality, design and workmanship and that the parties agreed to and pre-estimated and determined the quantum of liquidated damages to be paid by the respondent to the petitioner in case the respondent defaulted in completing the installing and commissioning of the materials and equipment by the agreed date. It has also been agreed upon that in case of any default the liquidated damages and compensation payable to the respondent shall be calculated at the rate of 1/2% for the delay of every fortnight subject to a maximum of Rs. 7,89,832 being 5% of the entire contract price and that the respondent would furnish a bank guarantee for a Sum of Rs. 7,89,832 assuring the performance of the agreement. In order to ensure due performance of the agreement on the part of the appellant, the appellant executed two guarantee bonds. The appellant is alleged to have committed breach of contract and to have made default by not completing the erection and installation and failed to make commissioning of the plant and machinery within 15.10.73. The same was commissioned after delay of more than 10 fortnights, i.e., on 10th March 1974 thereby causing loss and damages to the production and as such the agreed amount of Rs. 7,89,832 by way of compensation became due and payable to the respondent in terms of the said agreement which sum or portion thereof the appellant failed to pay inspite of repeated demands.
(3.) THERE was another agreement, dated 28.7.72 by and between the parties by which the appellant agreed to supply, erect and commission machinery and equipment specified in Schedule 'A' annexed to the said agreement that the time agreed upon for commissioning of the boiler under the agreement, namely, by 15,10.73 was important and that is why it was made the essence of the contract.;