Facts:

• Mahanagar Telecom Nigam Ltd., (MTNL) a state-owned telecommunications service provider in India, was the Appellant.
• Tata Communication Ltd., ( Respondent) was a company having business interests in telecommunications.
• Tata failed to fulfil obligations under a purchase order contract, limiting liquidated damages to 12% of the purchase value. MTNL deducted amounts from Tata's bills, claiming damages.
• Tata filed a petition before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), arguing that MTNL's deductions exceeded the contractually stipulated liquidated damages.
• TDSAT directed MTNL to return the excess amount, stating the deductions were unilateral and lacked evidence of actual losses.
• Aggrieved by the decision MTNL appealed to the Supreme Court.
  
  

Background/ Procedural Posture:

TDSAT’s Holding

• The case was initially filed before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) by the Respondent.
• TDSAT found MTNL's deductions exceeding the 12% liquidated damages as excessive and ordered the return of the excess amount, retaining only the allowed 12%.
• The Tribunal found MTNL's quantum meruit claim (the amount one deserves ) lacked evidence, and highlighted the 12% limit in contracts. (Paragraph 1)
  
• MTNL approached the Supreme Court seeking a reconsideration of its claim and the validity of its deductions that went beyond the stipulated liquidated damages.
  

Main issue:

Whether a claim in quantum meruit (the amount one deserves ) under Section 70 of the Indian Contract Act, 1872 permissible when parties are bound by a contract? (Paragraph 2)