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6) The disputes and differences between the parties arose on account of termination of the contract and on account of blacklisting of the JV. The JV filed Writ Petition No.11657 of 2013 challenging the order of blacklisting, which was disposed of by order dated 2 April 2014 constituting Arbitral Tribunal for adjudication of disputes and differences between the parties.

7) After constitution of the Arbitral Tribunal comprising of the learned sole Arbitrator, the JV filed Statement of Claim before the Arbitral Tribunal on 13 December 2014. In its Statement of Claim, the __________________________________________________________________________ 06 February 2026 Neeta Sawant CARBP-444 of 2024 JV challenged all the four penalty orders, termination order dated 9 December 2013 and blacklisting order dated 11 April 2014. The JV claimed amount of Rs. 25,49,76,121/- alongwith interest towards balance amount due under the 18th RA bill, Rs.4,35,79,728/- towards excess recovery on mobilisation advance from RA bill No.9, Rs.6,37,56,075/- towards encashment of security deposit. The JV further claimed sum of Rs.28,93,60,160/- towards delay damages alongwith interest and Rs.21,16,43,693/- towards damages for wrongful and illegal termination of the contract. The JV also claimed sum of Rs.50 crores towards damages arising out of blacklisting and Rs.10,87,26,000/- towards losses suffered in ongoing contracts.

25. It is a general principle of law of contract that in case of breach of contract, the injured must be put back in the same position that he would have been if he had not sustained the wrong. Once the contractor has established an illegal and unjustified termination of contract and a breach thereof on the part of the employer, which was also a finding of fact by the sole arbitrator in the present case, the contractor cannot be further obligated to establish a loss suffered on account of such breach, because a reasonable expectation of profit is implicit in a works contract. [See MSK Projects India (JV) Ltd. case12]. Therefore, any loss occasioned due to illegal termination of works contract, has to be compensated byway of damages once the breach on part of the erring party is established. This is obviously subject to the caveat that the compensation must be reasonable and the parties should not be allowed to make a windfall profit, by a mere allegation of breach of contract. However, it is a settled position of law that for estimating damages, courts are not required to go into the minute details; a broad evaluation of the same would suffice.

60) The conceptus of the above discussion is that the concept of 'loss of profit' and 'loss of profitability' cannot be conflated. The former refers to damages arising out of wrongful termination of contract, whereas the latter arises out of overstay of the contractor at the site due to delay in execution of the work. In the former case, the contractor is an injured party who is prevented from executing balance work. Therefore, his claim for loss of profit is dependent only on the issue of validity of termination of contract. Once termination is found to be unjustified, it is permissible for the Court to award reasonable percentage of unexecuted work as damages. However, in a case involving claim for loss of profitability it, becomes necessary for the contractor to prove as to how delay in execution of work and his overstayal at the site has led to actual sufferance of damages. In such case, it is necessary to prove as to how detention of manpower or machinery at the contract site prevented the contractor from utilizing (2024) 2 SCC 109 __________________________________________________________________________ 06 February 2026 Neeta Sawant CARBP-444 of 2024 the same at some other contract site and how he suffered loss on account of the same.

61) In the present case, the Arbitral Tribunal has awarded 10% of balance value of contract as damages in favour of the JV. Since termination of contract is found to be unjustified, the claim arose out of loss of profit due to wrongful termination of contract. It was therefore not necessary for JV to lead independent evidence of actual sufferance of losses. Therefore, the objection raised on behalf of the Municipal Corporation about absence of any evidence to prove actual cause of loss is misplaced deserving rejection.