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Issues involved: Breach of contract leading to termination, claim for damages, correction of judgment for interest pendent lite.
Breach of Contract and Claim for Damages: The appellant was allotted construction work for a hostel by the respondent-State, with specific completion milestones. Due to alleged obstruction by the Superintending Engineer, the work was not completed within the stipulated time, leading to the contract being rescinded by the respondent-State. The appellant claimed damages of Rs. 20,000 for breach of contract, contending that the termination was in breach thereof. The trial court decreed the suit for recovery of Rs. 32,000, including future interest at 6% per annum. The High Court partly allowed the appeal, holding the respondent liable to pay only Rs. 4,783.33 to the appellant with interest at 6% per annum. Correction of Judgment for Interest Pendent Lite: The appellant filed an application under Section 152 of the CPC seeking interest pendent lite from the date of the suit till the date of the decree, which the trial court allowed. However, the High Court set aside this order, stating that the omission in not granting pendent lite interest was not accidental but intentional, as the trial court had already rejected the claim for such interest. The High Court held that Section 152 CPC allows correction of only accidental omissions and not intentional ones, emphasizing that the court cannot modify its original judgment after passing it. Claim for Damages and Appellate Court's Decision: The High Court disallowed the appellant's claim for Rs. 20,000 as damages for breach of contract, stating that the appellant failed to prove actual loss suffered due to the breach. However, the Supreme Court held that damages can be claimed for loss of expected profit in case of breach of contract, citing precedents where damages were awarded based on a broad evaluation. The Supreme Court found the trial court's grant of 10% of the contract price as damages reasonable, disagreeing with the appellate court's reduction of the amount to Rs. 4,783.33. The Supreme Court allowed the appeal partly, modifying the judgment to award the appellant Rs. 24,783.33 with future interest at 6% per annum. In conclusion, the Supreme Court upheld the appellant's claim for damages based on loss of expected profit due to the breach of contract, emphasizing the legal entitlement to compensation in such cases.
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