Supreme Court of India
The State of Odisha & Ors. v. Radheshyam Agrawal
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What the Court ordered
In view of the above and for the reasons stated above, the High Court has rightly set aside the penalty levied while granting extension of time.
Judgment, page 7
From the headnote
Contract – Levy of Penalty – When not justified – P enalty imposed on respondents-Contractors while granting ex tension of time to complete the work awarded – Held: Penalty wa s levied by the State Government invoking Clause 3.5.5(v) of the Odisha P ublic Work Department Code (OPWD Code) – However, said Cla use is applicable in a case where the contract is terminated – Here, it is not a case of termination of the contract – Therefore, Cl ause 3.5.5(v) shall not be applicable at all – Neither the contract nor the OPWD code provides for imposition of penalty while extending t he contract –
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