Case Note & Summary
The case involves two review applications filed under Order XIV Rule 8 of O.S. Rules read with Order XLVIII Rule 1(a) and Section 114 of the Code of Civil Procedure, 1908, seeking review of a common order dated 08.10.2025 passed by the Madras High Court in Arb.O.P.(Com.Div.) No.257 of 2021 and Arb.O.P.(Com.Div.) No.209 of 2022. The applicants in Rev.Appln.No.1 of 2026 are Prime Store, its partner S. Kaarthi, Padma Sivalingam, and Shruthi Kaarthi. The applicants in Rev.Appln.No.2 of 2026 are M/s.SCM Silks Private Limited and K. Sivalingam. The respondents include Sugam Vanijya Holdings Private Limited and others. The review applications were filed primarily on the ground that the court omitted to take notice of the Supreme Court judgment in Maula Bux v. Union of India, (1969) 2 SCC 554, which allegedly mandates that a claimant must prove loss before being entitled to damages under a liquidated damages clause. The applicants argued that the Arbitral Tribunal awarded liquidated damages without the claimant proving any loss, and that the court should have considered this judgment. The respondents opposed the review, contending that the judgment in Maula Bux was not applicable to the facts of the case. The court heard Mr. Anirudh Krishnan for the applicants and Mr. P.S. Raman, Senior Counsel for the respondents. The court examined the scope of review jurisdiction, noting that review is not an appeal and can only be entertained if there is an error apparent on the face of the record. The court distinguished Maula Bux, stating that the case involved a situation where loss could be proved, whereas in the present case, the liquidated damages clause was a genuine pre-estimate of damages and the claimant had proved breach. The court held that there was no error apparent on the face of the record and dismissed both review applications.
Headnote
A) Civil Procedure - Review - Error Apparent on Face of Record - Order XLVII Rule 1 CPC - Review applications filed under Order XIV Rule 8 of O.S. Rules read with Order XLVIII Rule 1(a) and Section 114 CPC seeking review of common order dated 08.10.2025 in Arb.O.P.(Com.Div.) No.257 of 2021 and Arb.O.P.(Com.Div.) No.209 of 2022 - Applicants contended that the court omitted to consider the Supreme Court judgment in Maula Bux v. Union of India which mandates proof of loss before awarding liquidated damages - Held that the judgment in Maula Bux was not applicable to the facts of the case as the liquidated damages clause was a genuine pre-estimate of damages and the claimant had proved breach - No error apparent on the face of the record - Review dismissed (Paras 1-6). B) Contract Law - Liquidated Damages - Section 74 Indian Contract Act, 1872 - Proof of Loss - Claimant need not prove actual loss if the stipulated sum is a genuine pre-estimate of damages - The court distinguished Maula Bux v. Union of India and held that where loss is difficult to prove, the pre-estimated compensation can be awarded if reasonable - In the present case, the Arbitral Tribunal found the liquidated damages clause to be a genuine pre-estimate and awarded damages - Held that the review was not maintainable as there was no error apparent on the face of the record (Paras 3-5).
Issue of Consideration
Whether the review applications should be allowed on the ground that the court omitted to consider the judgment in Maula Bux v. Union of India, which allegedly requires proof of loss before awarding liquidated damages.
Final Decision
Both review applications are dismissed. No order as to costs.
Law Points
- Review jurisdiction is limited to errors apparent on the face of the record
- not re-appreciation of evidence
- Liquidated damages under Section 74 of the Indian Contract Act
- 1872 do not require proof of actual loss if the amount is a genuine pre-estimate of damages
- Maula Bux v. Union of India distinguished on facts
