The main legal point established in the judgment is the application of Section 73 of the Indian Contract Act, which allows damages for the loss of reasonable profits arising from a breach of contract. The judgment emphasizes the need for the plaintiff to prove the financial loss for which they seek recovery and the requirement of reasonable certainty in estimating damages.

1. This is an appeal by the State. The trial court granted a decree for Rs. 11,480/- as damages for breach of contract.

2. Plaintiff is a contractor. He entered into a contract with the Government. His tender for the contract work was accepted on 24-6-1972. The contract was for execution of five items of work for flood control in Vamanapuram River. The contract was signed on 4-7-1972. Plaintiff deposited Rs. 6,600/- by way of security. The total amount of the contract was Rs. 1,64,300/- over and above the cost of materials.

3. The agreement provided that the Government has to supply the materials. Ext. BI gives the details of the work to be done. The time fixed for the completion of the work was before 30-9-1972. Plaintiff states that the Government was bound to supply the required quantity of cement to the plaintiff. Admittedly the work was not commenced. It is the case of the plaintiff that he was not able to commence the work since the Government did not supply the required cement.

4. By Exts. All and A12 letters the plaintiff requested for the release of the required cement. Ext. All is dated 31-7-1972 and Ext. A12 is 16-8-1972. Exts. All and A12 were not replied. Again in Ext. A20, the plaintiff reiterated his demand for the supply of cement. It is dated 22-3-1973. By Ext A22 dated 9-5-1973, the Government cancelled the work. The plaintiff was told that the Government will be taking steps to realise from the" plaintiff the loss suffered by the Government. When the contract was thus cancelled, plaintiff instituted the suit.

5. It is the definite case of the plaintiff that he was always ready and willing to execute the work. The Government committed breach of an essential term of the contract. By this conduct of the Government, the plaintiff was disabled from executing the work. As soon as the plaintiff signed the contract, realising the fact that the work has to be completed before 30-9-1972. plaintiff by letter dated 31-7-1972 requested the Executive Engineer to release the required quantity of cement for the execution of the work. This letter is Ext. All. He repeated his demand by another letter dated 16-8-1972 evidenced by Ext. A12. In Ext. A12, he told the Executive Engineer:

"Unless the cement required for the work is issued, I am not able to start the work and hence I should not be held responsible for the delay in completing the work as per the agreement."

Ext. A17 is a letter by the Executive Engineer dated 27-12-1972. In this letter he has stated that the plaintiff has not commenced the work so far and that he has to commence the work within a week on the receipt of Ext. A17 letter. It has to be noted that even though the Executive Engineer was insisting for the completion of the work expeditiously no cement was released to the plaintiff. Ext. A17 was replied promptly by Ext. A18 wherein plaintiff has said that be had 'collected materials, but work could not be commenced due to obvious reasons'. When Ext. AI8 letter was received, the Executive Engineer wrote a letter, Ext. A19 on 15-3-1973 to which a prompt reply Ext. A20 dated 22 3-1973 was given. On receipt of Ext. A20 it seems Ext. A22 letter was sent cancelling the contract.

6. The defence of the State is that the plaintiff has committed breach of contract insofar as he did not commence the work in time. It is further stated that the Government was not bound to release cement as and when asked by the plaintiff. They are bound to give cement only if they are satisfied that the cement is required for the specific work which has to be carried on. The relevant term in the contract provides that from time to time the required quantity of cement has to be released to the plaintiff.

7. Plaintiff submits that the work that has to be executed was putting up ring bunds, excavation in the river and putting up bunds in rubbles in the river. From the nature of the work it is said that the work has to be done expeditiously and continuously without interruption, since i