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2006 Supreme(MP) 208

HIGH COURT OF MADHYA PRADESH
S.S. Jha and A.P. Shrivastava, JJ.
Mukesh Kumar Singhal
Versus
Nagar Palika Parishad
Civil Revision 129 of 2003 Of
Decided On : Feb 07,2006

Advocates Appeared:
Brijesh Sharma, D.P.S.Bhadoriya, MAHESH GOYAL, R.D.Jain, S.P.SINGH, T.C.Singhal,

Headnote:(1) Contract Act, 1872 -- S.73 - termination of work contract in middle -- claim for overhead expenses and profit loss -- cannot be awarded in absence of pleading and evidence thereon. 2004 Arb WLJ 446 (MP) held not good law. (1984)4 SCC 59, 1999(2) JLJ 83 (SC) and (2004)5 SCC 109 followed. CR 2136 of 1995, CR 608 of 1989, Ref.No.85 of 1995 and Civil Revn. No.1342 of 1999 relied on. 21 [Paras 10, 11 & 13

       Precedent -- earlier binding view not considered -- decision not binding. [Paras 10 & 13

        ¼1½ lafonk vf/kfu;e] 1872 &&/kkjk 73 && ladeZ lafonk dh chp esa gh lekfIr && mifjO;; vkSj ykHk dh gkfu ds fy, nkok && bu fcanqvksa ij vfHkopu vkSj lk{; ds vHkko esa vf/kfu.khZr ugha fd;k tk ldrkA 2004 vkfcZ- MCY;w ,y ts 446 ¼e-iz-½ ekU; fof/k ughaA ¼1984½ 4 ,l lh lh 59] 1999 ¼2½ ts ,y ts 83 ¼mPpre U;k-½ rFkk ¼2004½ 5 ,l lh lh 109 vuqlfjrA flfoy iqujh{k.k dz- 2136 lu~ 1995] flfoy iqujh{k.k dz- 608 lu~ 1989] funsZ‘k ekeyk dz- 85 lu~ 1995 rFkk flfoy iqujh{k.k dz- 1342 lu~ 1999 voyafcrA

       ¼iSjk 10] 11 ,oa 13½

       ¼2½ iwoZ fu.kZ; && iwoZrj vkc)dj fofu‘p; ij fopkj ugha fd;k x;k && ,slk fofu‘p; vkc)dj ughaA

       ¼iSjk 10 ,oa 13½

Judgment

( 1. ) FOLLOWING question of law is involved in the aforesaid revisions : Whether in the absence of any proof, contractor is entitled to claim loss on account of infructuous overhead expenses and loss of profit ?

( 2. ) TRIBUNAL while rejecting the claim for loss of profits and overheads placed reliance upon the judgment of this Court in the case of M/s. Saluja Construction Co. v. State of M. P. Civil Revision No. 2136/1995, decided on 7-9-1999 and held that the claimant must prove the actual loss of profit and on failure to prove loss of profit, contractor is not entitled for loss of profit. It is held in Para 36 of the Award as under: In this case, petitioner has claimed Rs. 50000/- as loss of profit but has not produced any evidence to prove extent of profit. He has claimed loss of profit on fixed percentage basis. It is true that contractor is not expected to prove the actual loss towards profit but he should have placed the material to show on what basis he estimates a particular percentage of profit. In the present case, petitioner has not placed any material on record on the basis of which he is claiming loss of profit of unexecuted work. In view of Clause 14 of the agreement also petitioner cannot claim loss of profit in this case. In M/s. Saluja Construction Co. v. State of M. P. (Civil Revision No. 2136 of 1995), decided on 7-9-1999 by M. P. High Court, Apex Court judgment of Dwarkadas v. State of M. P. AIR1999 SC 1031 , 1999 (1 )CTC635 , JT1999 (1 )SC 375 , 1999 (I )OLR (SC )388 , (1999 )121 PLR820 , 1999 (1 )SCALE376 , (1999 )3 SCC500 , [1999 ]1 SCR524 , 1999 (2 )UJ895 (SC ) has been discussed and explained. Thus, the legal position is made clear that to prove loss of profit the contractor is required to produce some evidence oral or documentary. In the present case, petitioner has failed to produce any evidence to prove loss of profit hence in our considered view the petitioner is not entitled for any amount towards loss of profit. Therefore, his claim of Rs. 50000/- towards loss of profit is disallowed. ( 3. ) IN Civil Revision No. 129 of 2003, the Arbitration Tribunal has rejected the claim of the petitioner as he has failed to produce any evidence to prove loss of profit relying upon judgment of this Court in the case of State of M. P. v. Smt. Gyan Kaur Civil Revision No. 608 of 1989, decided on 17-8-1999 and Saluja Construction Co. Ltd. (supra), and Full Bench decision of the Arbitration Tribunal in the case of Bishnuprasad Agrawal v. M. P. State Tourism Development Corporation Reference Case No. 85/95, decided on 19-9-2002. It is further held that claim for loss of overhead and loss of profit cannot be allowed in the absence of cogent and reliable evidence.

( 4. ) IN Civil Revision No. 79 of 2003, Arbitration Tribunal while placing reliance upon Full Bench judgment of the Tribunal which has taken note of the judgments in the cases of M/s. Saluja Construction and Shrimati Gyan Kaur (supra), has held that in the absence of any evidence to prove loss of profit claimant is not entitled for the claim on head of loss of profit.

( 5. ) COUNSEL for the petitioner has referred to the Apex Courts judgment, the case of Dwarka Das v. State of M. P. AIR1999 SC 1031 , 1999 (1 )CTC635 , JT1999 (1 )SC 375 , 1999 (I )OLR (SC )388 , (1999 )121 PLR820 , 1999 (1 ) SCALE376 , (1999 )3 SCC500 , [1999 ]1 SCR524 , 1999 (2 )UJ895 (SC ) and submitted that the law has been settled by the Apex Court that since the contractor is granted only ten per cent of the contract price towards loss of profit, it was found to be reasonable and permissible. Referring to Section 73 of the Contract Act, it is held in Para 9 of the judgment that as and when breach of contract is held to have been proved being contrary to law and terms of the agreement, the erring party is legally bound to compensate the other party to the agreement and it was, therefore, held that the Appellate Court was not justified in disallowing the claim of the petitioner on



















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