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Himachal Joint Venture vs Panilpina World Transport (India) Pvt. ... on 8 August, 2008 cites

A.T. Brij Paul Singh And Ors. vs State Of Gujarat on 25 July, 1984

In M/s A.T. Brij Paul Singh and others v. State of Gujarat (1984) 4 SCC 59, a three Judge Bench specifically dealt with the issue of entitlement of loss of expected (FAO(OS)123/2008) Page 7 of 18 profit in the work. In that case the trial court categorically held that the respondent was guilty of breach of work contract, part of which was already performed and for which the appellant had transported machinery and equipment from Pune to the work site near Rajkot in Saurashtra, and the appellant would be entitled to damages. One of the heads of damages under which claim was made was "loss of expected profit in the work". The claim under this head as canvassed before the High Court was in the amount of Rs.4,30,314/-, which came to be rejected by the trial court 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 Contracts (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 profit is between 3 to 7 per cent of the total price of cost" which is added to the tender. In other words, the High Court was of the view that the claim under this head was admissible. The High Court, however, proceeded to reject the (FAO(OS)123/2008) Page 8 of 18 claim observing that the bare statement of the partner of the contractor's firm that they are entitled to damages in the nature of loss of profit at the rate of 20 per cent of the estimated cost is no evidence for the purpose of establishing the claim. Allowing the appeal, the Supreme Court held as under:
Supreme Court of India Cites 1 - Cited by 130 - D A Desai - Full Document

Mohd. Salamatullah And Ors. vs Government Of Andhra Pradesh on 19 January, 1977

In Mohd. Salamatullah and others v. Government of Andhra Pradesh AIR 1977 SC 1481 the then Hyderabad Government had placed orders with the plaintiffs-appellants for manufacture of certain number of guns, the price per gun being put at Rs.125/-. Although some of the guns were manufactured the contract could not be completed and it was held concurrently that there was a breach of contract on the part of the plaintiff. Although the plaintiff had claimed a much larger sum, the State, through its counsel, pointed out that the plaintiffs themselves had estimated the margin of profit at a sum of Rs.1,87,500/- which worked out to 15 per cent of the total amount invested in the gun-making. Based on this argument of the government counsel, the trial court awarded the aforesaid sum of Rs.1,87,500/-. In appeal, however, the High Court observed that it will be just and reasonable to put this profit at 10 per cent of the contract price which works out to Rs.1,25,000/-. The Supreme Court restored the order of the trial court by observing as under:
Supreme Court of India Cites 0 - Cited by 62 - V R Iyer - Full Document

Bharat Coking Coal Ltd vs L.K. Ahuja on 12 April, 2004

11. Learned counsel appearing for the appellant, however, submitted that in a recent decision in Bharat Coking Coal Ltd. v. L.K. Ahuja (2004) 5 SCC 109, a two Judge Bench of the Supreme Court has taken a different view. According to her in that case the Supreme Court has clearly held that in the absence of any evidence led by the claimant to substantiate loss of profit, the Arbitrator ought not to have passed award under that head. We are unable to agree with the learned counsel. In that case, Claim No.9 was for loss arising out of turnover due to prolongation of work and the claim made under that head was in a sum of Rs.10 lacs. The Arbitrator held that on account of (FAO(OS)123/2008) Page 12 of 18 escalation in wages and prices of materials, compensation was obtained and, therefore, there was not much justification in asking for compensation for loss of profits on account of prolongation of the work. However, the Arbitrator came to the conclusion that a sum of Rs.6 lacs will be appropriate compensation in a matter of such nature, being 15% of the total profit over the amount that has been agreed to be paid. While a sum of Rs.12,00,00/- would be appropriate entitlement, he held that a sum of Rs.6,00,00/- would be the appropriate entitlement. He also awarded interest on the amount payable at 15% p.a. Allowing the appeal, the Supreme Court held that when the claim for escalation of wage bills and price of materials compensation has been paid and compensation for delay in the payment of the amount payable under the contract or for other extra works is to be paid with interest thereon, it is rather difficult to accept the proposition that in addition, 15% of the total profit should be computed under the heading 'Loss of Profit'. It was observed that it is not unusual for the contractor to claim loss of profit arising out of diminution in turnover on account of delay in the matter of completion of the work. What he should establish in such a situation is that had he received the amount due under the (FAO(OS)123/2008) Page 13 of 18 contract, he could have utilised the same for some other business in which he could have earned profit. Unless such a plea was raised and established, claim for loss of profits could not have been granted. In the absence of any evidence, the arbitrator could not have awarded the same. The question before the Court was about the loss of profit arising out of diminution in turn over on account of delay in completion of the work. Moreover the Court was of the opinion that when the claim for escalation of wage bill and prices of materials is accepted and when the compensation for delay in payment of the amount payable under the contract and for other extra work is to be paid by way of interest, there was no justification for a separate claim for loss of profit. This would virtually amount to claiming compensation twice under the same head. This decision has no application to the facts of the present case.
Supreme Court of India Cites 8 - Cited by 81 - S R Babu - Full Document

Maula Bux vs Union Of India on 19 August, 1969

13. We may mention that the learned counsel tried to derive some support from the Supreme Court decision in Maula Bux v. (FAO(OS)123/2008) Page 14 of 18 Union of India 1969 (2) SCC 554. That judgment is an authority for the proposition that forfeiture of reasonable amount paid as earnest money does not amount to imposing a penalty. But if forfeiture is of the nature of penalty, Section 74 of the Contract Act applies and in such cases forfeiture is not permissible unless the actual loss is proved. We fail to see as to how this judgment has any application in the present case where the claim is for loss of profit on account of illegal termination of contract.
Supreme Court of India Cites 7 - Cited by 430 - J C Shah - Full Document

Roop Kumar vs Mohan Thedani on 2 April, 2003

"14. That written terms of an agreement has sanctity in law. These will prevail over verbal assertions. What transpired prior to reaching a concluded contract cann't alter the terms and conditions of a concluded written contract. Supreme Court in the case of ROOP KUMAR V. MOHAN THEDANI, ADR 2003 SC 2418 held that Section 91 of the Evidence Act relates to evidence of terms of contract, grants and other disposition of properties reduced to form of document. This section forbids proving the contents of a writing otherwise than by writing itself.
Supreme Court of India Cites 18 - Cited by 273 - A Pasayat - Full Document

M/S. Agencia E. Sequeira M/S. Fabril ... vs Labour Commissioner & Others on 31 January, 1997

Similar view was formed by the Apex Court in the case of M/s FABRIL GASOSA vs. LABOUR SQEUEIRA VS. LABOUR COMMISSIONER & ORS. JT 1997 (2) SC 171 wherein Apex Court observed that when terms of contract on settlement in the form of document are proved as per Section 91, no evidence of any oral argument of settlement shall be admitted between parties.
Supreme Court of India Cites 11 - Cited by 102 - S B Majmudar - Full Document
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