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13. If a person earns profits by employing all avenues that he has, he cannot be said to have failed in mitigating his damages. But, can such earning of profit alone always lead to the conclusion that there has been no damage at all? The answer has to be in the negative as there can be situations where a person could be entitled to more profits than what he has actually earned but has been 2026:CHC-OS:122-DB deprived of the further profit element due to the breach of the contract complained of.

15. When a point of fact was not urged before the learned Arbitral Tribunal, we at this stage cannot and should not countenance such argument at all.

16. Furthermore, while it is well settled that the claimant has a duty to mitigate the damages, it is equally well settled that the burden of proof that the claimant did not discharge its duty of mitigation of damages lies on the defendant. Such position was clarified more than six decades back by the decision of a Bench of this Court in the case of Prafulla Ranjan Sarkar vs. Hindusthan Building Society Limited35 upon taking note of several English authorities and a judgment of the Hon'ble Madras High Court on the point. The following paragraphs of the said judgement are relevant to the context:-

"32. But I need not enter into this discussion at all. The question what is reasonable for a plaintiff to do in mitigation of damage is not question of law, but one of fact in the circumstances of each particular case, the burden of proof being upon the defendant; Halsbury's Laws of England, 3rd Edition, Vol. 11. Article 476, page 290. In the 35 1959 SCC OnLine Cal 55 : AIR 1960 Cal 214 2026:CHC-OS:122-DB footnotes under these observations have been cited the cases of Clayton-Greene v. De Courville, (1920) 36 TLR 790 at page 791 where the question was whether an actor should have mitigated the damages for breach of an agreement to take a leading part in a play by accepting the part of another character in the same play and Waterhouse v. H. Lange Bell and Co. Ltd., (1952) 1 LI Rep. 140 where damages were reduced because the plaintiff failed to mitigate by taking an alternative suitable employment.

34. I find these principles were applied by Leach, C.J. (Laskshmana Rao, J. agreeing with him) in Sundaram v. Chokalingam, AIR 1938 Mad 672. At page 674 Leach, C.J. has observed that "in a case like the present where the employment was for a definite period, the employer is bound to pay the stipulated salary unless he shows that the discharged servant had an opportunity of other employment but he refused to avail himself of it. In other words, the principle that a person must do what he can to mitigate damages applies to a contract of service just as it applies to an ordinary commercial contract."