Law:

Section:

Contract Act (IX of 1872)-------S. 73---Construction contract---Completion of work by contractor through sub-contractor beyond stipulated date---Withholding of certain amount by principal out of running bills payable to contractor and its adjustment towards risk and cost---Validity---Amount of mobilization of advance stood adjusted towards work done and was not re-payable by contractor to the principal---Impugned adjustment of amount was not authorized by contract, thus, it was wholly unjustified---Principal was not justified to invoke mobilization advance payment bond, thus, was not entitled to seek refund of amount of mobilization advance in circumstances. Tamliz S. Burney for Appellant. Samiuddin Sami for Respondent No.1. Ejaz Ahmed for Respondent No.2. Muhammad Shahid for Respondent No.3. Date of hearing: 1st February, 2006. JUDGMENT MAQBOOL BAQAR, J.--- In the instant appeal, the appellant has assailed judgment and decree dated 31st May, 2002 passed by a learned Single Judge of this Court in Civil Suit No.97 of 1988. The facts of the case, in brief, are that, the appellant awarded to respondent No.1 "a contract of earthwork and lining of Sadiq Feeder Canal 80-162 R.D.and in pursuance of above contract, the appellant paid to the said respondent an amount of Rs.93,19,151 by way of mobilization advance, who furnished, in favour of the appellant, a mobilization advance payment bond. Whereas respondent No.3, at the request of respondent No.1, furnished a performance bond in favour of the appellant in the sum of Rs.93,19,151.55. In terms of the contract the entire work was to be completed by 17th December, 1988 and in the event of respondent's failure to complete the work within the stipulated period the said respondent was liable to pay to the appellant, liquidated damages at the rate of Rs.5,000 per day. However, the respondent No.1 failed to complete the project by the stipulated date of 17th December, 1988, causing heavy losses to the appellant. It is also claimed that at the request of respondent No.1 advance of Rs.5.800 millions was made to the said respondent in June, 1987 for purchase of spare parts but the respondent No.1 did not spend the entire amount…

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