Legal interpretation of the sentence

Naga Anil Kumar (Querist) 24 November 2014 This query is : Resolved
what is correct/legal interpretation of "......liquidated damages @ 500 per hour or part thereof, to an maximum of one month fees..." ..

Is it 1) per hour 500 and from 1-59 minutes it would be charged pro-rate; or 2) per hour 500 and from and 1-30 minutes it would rounded down to less than an hour and if it is 31-59 it would be rounded up to an complete hour; or 3) per hour 500 and from 1-59 minutes it would be rounded up and considered as compete hour and penalty will be charged. pls clarify...

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Guest (Expert) 24 November 2014
Dear Advocate Naga Anil Kumar,

The term, "per hour or PART thereof" denotes that any part of an hour (may be even 1 minute extra than an hour) would be treated as one complete hour for the purpose calculation of damages. No rounding off permissible, unless specifically mentioned in the concerned order or rule/ section of any Act of law.

Devajyoti Barman (Expert) 24 November 2014
agree with Mr Dhingra.

Guest (Expert) 24 November 2014
Barman ji,

Thanks for agreeing with me.

Naga Anil Kumar (Querist) 24 November 2014
sir thanks for your reply...but my way of interpretation is that "... penalty @500 per hour or part thereof ...." is opposite to it and i would like say that for every hour it would be complete amount but incase of less than hour it would/should be calculated pro-rate basis i.e., no of minutes as there is no explicit mention about rounding up/down... pls suggest if this stand can hold good or if there can be any better stand to justify my contention.

Anirudh (Expert) 24 November 2014
Dear Naga,

Your interpretation would mean inserting too many words into an otherwise explicit and unambiguous term. I completely agree with the views of Mr. Dhingra.

P.THANGAVEL (Expert) 24 November 2014
Your interpretation seems to be incorrect.Part thereof means any part beyond the completed hour which may even a fraction of a minute exceeding the completed hour. This is common practice prevailing in commercial transactions.

P.Thngavel, Advocate & Former Senior manager of a leading PSB

J K Agrawal (Expert) 24 November 2014
Dear Mr Anil. any part of hour means the same as said by Ld Dhingra JI.

You may think about some other defenses viz the liquidated damages should be reasonable and not by way of penalty. You can twist your defense that using words 'or any part' is not reasonable and it is by way of penalty which is not permissible under Indian Contract Act.

There may be so many other grounds with you.

Rajendra K Goyal (Expert) 25 November 2014
Academic query, state facts.

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