Indian Contract Act, 1872  - Section 73 , Section 74

Breach of Contract - Compensation - Penalty - The appellant failed to execute the work of construction of sewerage pumping station within the stipulated or extended time - The said pumping station certainly was of public utility to maintain and preserve clean environment, absence of which could result in environmental degradation by stagnation of water in low lying areas - Delay also resulted in loss of interest on blocked capital -Loss could be assumed, even without proof and burden was on the appellant who committed breach to show that no loss was caused by delay or that the amount stipulated as damages for breach of contract was in the nature of penalty - Evidence of precise amount of loss may not be possible but in absence of any evidence by the party committing breach that no loss was suffered by the party complaining of breach, the Court has to proceed on guess work as to the quantum of compensation to be allowed in the given circumstances - The respondent also could have led evidence to show the extent of higher amount paid for the work got done or produce any other specific material but it did not do so -It will be fair to award half of the amount claimed as reasonable compensation - Decree granted by the High Court modified to the effect that the respondent-plaintiff is entitled to half of the amount claimed with rate of interest as awarded by the High Court.

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