CONTENTS - Central Public Works Department

186 SECTION 29
29.8 Processing cases of extension of time
(1) The Assistant Engineer shall decide upon the grant of extension of time within 15 days of the
completion of work, if it is in his competence to do so. Otherwise, he shall forward the case with
his recommendations to the Executive Engineer within 30 days of completion of work.
(2) The Executive Engineer shall take a decision within 15 days if it is within his power to do so, or,
otherwise, forward the case to the Superintending Engineer with his recommendations within this
period.
(3) The Superintending Engineer should then pass orders within 15 days of the receipt of the extension
case from the Executive Engineer. If the orders of the competent authority are not received in
time, Executive Engineer should extend the contract before the stipulated date actually expires so
that the contract might remain in force, but while communicating this extension of time, he must
inform the contractor that this was without prejudice to Government’s right to levy compensation
under clause 2 of the agreement.
(4) The sanction of extension of time will in all cases be issued by the Assistant Engineer/Executive
Engineer under clause 5 of the agreement in the proforma shown in Appendix 30A (Added as per
OM/MAN/221). The form provides that the extension of time is granted without prejudice to right of
Government to recover liquidated damages in terms of clause 2 of the agreement. In all cases, a
copy of the letter granting extension of time will be endorsed to the concerned Audit/Accounts
Officer. While doing so, it should be made clear in the endorsement whether the Superintending
Engineer has decided to levy or not to levy compensation or liquidated damages.
(5) The decision in regard to levy of liquidated damages for delay in the execution of works in terms of
clause 2 of the contract Forms 7 and 8 (and corresponding clause in other contract forms) should
not be recorded in the Measurement Book of the concerned work.
29.9 Extension of time without levy of compensation
In the case where extension is granted without levy of compensation (Performa shown in Appendix 30)
(Added as per OM/MAN/221) after approval of the competent authority, provision suggested in the preceding
paragraph should stand with a view to safeguard the interest of the Government, especially against unforeseen
circumstances.
29.10 Compensation under clause 2
The word ‘compensation’ should be used in relation to clause 2 of the agreement in CPWD Forms no. 7
and 8 and similar clauses in other contract Forms instead of the word ‘penalty’.
29.11 Section 74 of the Indian Contract Act, 1872
(1) When a contact has been broken, and if a sum is named in the contract as the amount to be paid
in case of such breach, or if the contract contains any other stipulation by way of compensation,
the party complaining of the breach is entitled, whether or not actual damage or loss is proved to
have been caused thereby, to receive from the party who has broken the contract, a reasonable
amount not exceeding the one so named or as the case may be the compensation stipulated for.
(2) According to clause 5 of the agreement, all letters of extension of time to be issued to the contractor
should be over the signature of the Engineer-in-charge, as he is the only officer so empowered
contractually to grant extension of time. Similarly, all letters intending to impose compensation or
to recover liquidated damages under clause 2 of the agreement should be issued over the signature
of the Superintending Engineer, as he is the only officer competent to do so under clause 2 of the
agreement, in order to fulfill contractual obligation.
29.12 Proforma for intimating compensation under clause 2
The Government of India have prescribed a proforma for intimating the contractor with regard to levy
of compensation under clause 2 of the contract as shown in Appendix 31.