TMI Blog1984 (7) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... than the estimated cost of the works in the amount of ₹ 16,59,900/- only. The tender of the appellant was accepted on July 6, 1954 as per the letter of the Executive Engineer, Road Development Division, Rajkot. As agreed to between the parties, the appellant furnished security deposit in the amount of ₹ 24, 885/- and the Contract documents were executed between the parties. The only term of the contract which at present needs nothing is that the work was to be executed within a period of 14 months from the date fixed by the written order to commence the work. Indisputably, the appellant commenced the work, and completed sub-grading of the road in a distance of 5 miles and 5 furlongs and furnished cement concrete surface in the length of 2 miles. Certain disputes arose between the parties as a result of which the respondent rescinded the contract imputing that as the lime was of the essence of the contract and as the appellant failed to execute the work within the stipulated time he was guilty of committing breach of contract. The final bill in respect of the work done by the appellant was prepared but the payment thereunder was accepted by the appellant under protest. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntially dismissed the appeal but allowed the appeal for a few items and decreed the plaintiff's suit to the extent of ₹ 12,055. 90 p. However the High Court did not agree with the trial court on the question of justification or propriety of rescission of the contract by the defendant and reversed the finding. Consistent with the finding the High Court proceeded to examine the principal contention whether the appellant-contractor was entitled to recover damages for loss of expected profits and rejected the claim for want of proof. Hence this appeal by certificate under Article 133(1)(a) of the Constitution. 6. It may be recalled that plaintiff was also given a works contract for providing cement concrete surface in another portion of the same road for which a separate and independent contract was entered into. That contract was also rescinded by the defendant and the plaintiff had filed suit for recovering the damages. In that suit the trial court gave a decree to the plaintiff in the amount of ₹ 1,20, 053. 20 p. Against the decree, the defendant preferred appeal to the High Court of Gujarat, being Civil Appeal No. 384 of 1962. This appeal was heard by a Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im is made is 'loss of expected profit in the work'. The claim under this head as canvassed before the High Court was in the amount of ₹ 4,30,314/- 9. It was not disputed before us that where in a works contract, the party entrusting the work commits breach of the contract, the contractor would be entitled to claim damages for loss of profit which he expected to earn by undertaking the works contract. What must be the measure of profit and what proof should be tendered to sustain the claim are different matters. But the claim under this head is certainly admissible. Leaving aside the judgment of the trial court which rejected the claim for want of proof, the High Court after holding that the respondent was not justified in rescinding the contract proceeded to examine whether the plaintiff-contractor was entitled to damages under the head 'loss of profit.' In this connection, the High Court referred to Hudson's Building and Engineering Contract (1970), tenth edition and observed that 'in major contracts subject to competitive tender on a national basis, the evidence given in litigation on many occasions suggests that the head-office overheads and : p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to its own earlier judgment rendered by one of the Judges composing the Bench in First Appeal No. 384 of 1962 rendered on 3/6 July, 1970 between the same parties. When this was pointed out to Mr. Mehta, his only response was that the court cannot look into the record of the cognate appeal. We find the response too technical and does not merit acceptance. We are not disposed to accept the contention of Mr. Mehta for two reasons: (1) that in an identical contract with regard to another portion of the same Rajkot-Jamnagar road and for the same type of work, the High Court accepted that loss of profit at 15% of the price of the balance of works contract would provide a reasonable measure of damages if the State is guilty of breach of contract. The present appeal is concerned with the same type of work for a nearby portion of the same road which would permit an inference that the work was entirely identical. And the second reason to reject the contention is that ordinarily a contractor while submitting his tender in response to an invitation to tender for a works contract reasonably expects to make profits. What would be the measure of profit would depend upon facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent to give broad features of the work as well as the portion of the work executed by the appellant. Having heard them, we are satisfied that the appellant should be awarded ₹ 2 lakhs under the head 'loss of estimated profit' for breach of contract by the respondent. 13. Mr. Aneja next contended that the High Court was in error in substantially rejecting the claim in the amount of ₹ 1,19,686/- by way of compensation for loss sustained while executing the work and the claim of ₹ 1 lakh for extra items executed by the contractor while performing the contract. The High Court has examined the claim under both the heads. The items claimed under various subheads under each major head have been separately examined by the High Court bringing to bear upon each sub head the detailed evaluation of the evidenc. In the process the High Court had allowed an amount of ₹ 12,055.90 p. under various sub-heads under major heads 2 and 3. While reaching this conclusion, the High Court minutely examined the evidence and substantially rejected the claim. Haing read the judgment, we are not disposed to take a different view of the matter. Therefore, the claim unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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