Bombay High Court
WOCKHARDT HOSPITALS LTD.versusDR.NISHITH VYAS
- Decided
- Disposal
- Disposed Off
Holding
The appellant failed to establish the actual loss required under Section 73 of the Indian Contract Act, 1872, and therefore is not entitled to damages.
Summary
Wockhardt Hospitals Ltd. appealed an ex‑parte judgment that dismissed its claim for damages against Dr. Nitish Vyas for allegedly breaching a three‑month notice clause in his employment agreement. The hospital asserted that the doctor’s sudden resignation caused loss of business amounting to Rs 1,23,79,637 and sought compensation under Section 73 of the Indian Contract Act, 1872. The trial court held that the plaintiff had not produced any material evidence to prove the alleged loss or that no substitute doctor was engaged. On appeal, the High Court examined the contractual terms, the plaintiff’s burden of proving actual loss, and the principles governing damages under Section 73. Finding no substantive proof of loss, the Court affirmed the trial court’s dismissal and rejected the appeal.
Issues considered
- Whether the appellant proved actual loss of business caused by the respondent’s breach of the notice period clause.
- Whether damages under Section 73 of the Indian Contract Act, 1872 can be awarded in the absence of concrete evidence of loss.
- Whether the ex‑parte judgment dismissing the claim was legally sound.
Legislation cited
- Indian Contract Act, 1872 — s. 73
Subjects
- breach of contract
- notice period
- damages
- loss of business
- Section 73
- ex‑parte judgment
- commercial suit
- evidence
Judgment
9_COMFA_27_2026-2.DOC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
COMMERCIAL FIRST APPEAL NO.27 OF 2026
Wockhardt Hospitals Ltd. ...Appellant
Versus
Dr Nitish Vyas ...Respondent
_______
Mr Mohit Khanna a/w Svadha Shankar, Rucha Prabhu and Radhika Sarurkar i/by
PRASAD
RAJENDRASING
RAJPUT
Hommurabi & Solomon, partners, for Appellant.
Digitally signed by
PRASAD
RAJENDRASING
RAJPUT None for the Respondent.
Date: 2026.09.07
19:59:24 +0530
_______
CORAM: G. S. KULKARNI &
DR. NEELA GOKHALE, JJ.
DATE: 03rd SEPTEMBER 2026
ORAL JUDGMENT: (Per Dr Neela Gokhale, J.)
1. Admit.
2. By this appeal, the Appellant assails the ex-parte Judgment, Order and
Decree dated 16th March 2026 (‘impugned Judgment’), passed by the learned
Judge, City Court, Mazgaon, Mumbai in the Commercial Summary Suit No. 663
of 2024, by which the Appellant’s claim for damages against the Respondent, was
rejected on the ground that the Appellant failed to produce any material or
document on record to prove its claim.
3. Briefly the facts of the case are: The Appellant is stated to be a registered
company engaged in the business of setting up, developing, running and operating
super and multi-speciality hospitals, hospital management and healthcare services.
In 2009, the Appellant engaged the services of the Respondent, a doctor, as a full-
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time Senior Consultant, Internal Medicine and Critical Care, at its Rajkot unit. The
Respondent’s appointment was renewed vide appointment letter/agreement dated
14th August 2015, which set out certain terms and conditions, for a period of two
years, i.e., from 15th August 2015 to 14th August 2017. The Respondent, by letter
dated 23rd September 2023, resigned from the Appellant-Company and stopped
attending work from 30th September 2023, thereby giving 7 days’ notice. The
Appellant claims this was in breach of the terms and conditions of the appointment
letter dated 14th August 2015, more particularly Clause 11(a) of the said letter,
which provides for a notice period of 3 months before resigning.
4. The Appellant thereafter sent a letter dated 26 th November 2016 to the
Respondent claiming Rs. 1,23,79,637/- for loss of business to the Appellant due to
the Respondent’s resignation. On 16th December 2016, the Respondent replied to
the said letter, refuting any breach of the terms and conditions as well as any dues
payable to the Appellant. The Appellant instituted a Commercial Suit on 20 th July
2017, bearing Commercial Summary Suit No. 735 of 2017, before this Court for
recovery of Rs.1,44,67,432/- against the Respondent. Subsequently, on 18 th July
2024, the Suit was transferred to the City Civil & Sessions Court, Mazgaon,
Mumbai, and renumbered.
5. The suit summons was served upon the Respondent; however, the
Respondent failed to appear. Hence, the Trial Court proceeded against the
Respondent ex-parte. On 16th March 2026, the Trial Court passed the impugned
ex-parte Judgment, dismissing the Appellant’s Suit.
6. Mr Mohit Khanna, learned Counsel, appeared for the Appellant. Despite
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notice of the present Appeal being served upon the Respondent, none appeared for
the Respondent. We have proceeded to hear Mr Khanna, learned Counsel for the
Appellant.
7. Mr Khanna submitted that the impugned Judgment is arbitrary, unjust and
contrary to law since the Trial Court failed to consider that the Respondent had
violated Clause 11(a) of the agreement and had failed to give 3 months’ notice to
the Appellant. He further submitted that, due to the Respondent's breach of
contract, the Appellant suffered loss because the hospital was unable to provide a
special consultant to patients coming to the hospital. The loss of business was
calculated on a reasonable estimate of potential loss, and no exact figure could be
expected in a case where a senior doctor suddenly departs from the hospital with
insufficient notice, thereby completely violating his contract. Hence, according to
Mr Khanna, the Trial Court could not have expected the production of any
material or documents on record in support of the Appellant’s claim. He submitted
that the loss claimed by the Appellant arose naturally, in the usual course of
business, and was foreseeable by both parties, and as such the Appellant is entitled
to compensation as provided under Section 73 of the Indian Contract Act, 1872
(‘ICA’) for the Respondent’s breach of contract. He relied on the decision of the
Supreme Court in the matter of Construction and Design Services vs. Delhi
Development Authority1 and the decision of the Delhi High Court in the matter of
Cobra Instalaciones Y Servicios, S.A. & Shyam Indus Power Solution Pvt. Ltd. vs.
Haryana Vidyut Prasaran Nigam Ltd. (HVPNL).2
1 (2015) 14 SCC 263
2 2024 SCC OnLine Del 2755
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8. We have heard the learned Counsel for the Appellant. We have also gone
through the record of the proceedings with his assistance.
9. The limited grievance of the Appellant is the refusal of the Trial Court in
awarding damages of Rs.1,23,79,637/-, to the Appellant for breach of contract by
the Respondent. We have examined the Affidavit in lieu of Examination-in-Chief
filed by the Appellant before the Trial Court and the averments made in the plaint.
There is nothing in either of the two documents to demonstrate that the Appellant
would succeed and become entitled to the damages as claimed by it.
10. Clause 11 of the agreement dated 14.08.2015, deals with the termination of
the professional engagement of the Respondent. The relevant sub-clauses of
Clause 11 reads thus:
“11. Termination of the professional engagement
a. Either party will retain the right to terminate this engagement after giving
notice of three months to the other. During the notice period no minimum
guarantee shall be paid or contract shall be treated under Fee for Service work.
Doctor's right to terminate this engagement would be subject to clauses here
below.
b. In case you wish to exit with the arrangements with Wockhardt Hospitals
Limited prior to the period of our engagement of two years and during the period
of engagement if the minimum guarantee amount paid to you cumulatively
exceeds the actual fee, for service computed for the said period then the difference
between the minimum guaranteed amount and the actual fee for service payable
to you will be recovered from you at the time of exit within a period of 30 days.
Any delay beyond the stipulated period will attract an interest at the rate of 12%
per annum, payable on the recoverable amount.
c. …….
d. …….
e. …….”
11. Thus, Clause (a) provides that either party may terminate by giving three
months’ notice to the other party. It also provides that during the notice period no
minimum guarantee shall be paid or that the contract shall be treated under fees for
service work. It further provides that Doctor’s right to terminate the engagement to
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be subject to inter alia clauses (b) etc. Clause (b) sets out the consequences if the
consultant, i.e., the Respondent herein, seeks to exit with the arrangements prior to
the period two-years specified in the arrangement and during the period of
engagement in such eventuality if the minimum guarantee amount paid to the
respondent/defendant cumulatively exceeds the actual fee, for service computed for
the said period, then the difference between the minimum guarantee amount paid
to the Doctor (defendant/respondent) and the actual fee for service computed for
the said period, then the difference between the “minimum guaranteed amount”
and the actual fee for service payable to the Doctor (defendant/respondent), would
be recovered from him, at the time of exist, within the period of 30 days.
12. The appellant/plaintiff, on the premise that the respondent/defendant had
breached the agreement dated 14 August 2015 and more particularly of having not
terminated the agreement as agreed between the parties in terms of clause 11(a)
(supra) and which has caused damages to the appellant/plaintiff, approached the
Civil Court by the suit in question inter alia praying for damages. The only prayer
as made in the plaint is required to be noted which reads thus:
“(a) The Defendant be Ordered and Decreed by this Hon’ble Court to
pay to the Plaintiff the sum of Rs.1,44,67,432/- as per Particulars of Claim
being Exhibit E hereto along with further interest at the rate of 18% per
annum on the Principal amount of Rs.1,30,39,838/- from the date of filing of
this suit till the date of actual payment and/or realization and the costs of this
Suit as more particularly set out in the particulars of Claim being Exhibit E.”
13. It is thus clear that the amount as prayed for in the suit was for damages in
considering the breach of the terms and conditions of the agreement/ contract in
question by the respondents/defendants and in the manner as averred in the plaint.
The relevant averments as made in the plaint are required to be noted which read
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thus:
“7. Plaintiff submits that in view of breach of terms of Exhibit A and
more particularly Clause 11 (a), the Plaintiff has become entitled to
recover from the Defendant a sum of Rs. 6,60,201/- Plaintiff being
served with (7) seven days of notice. Plaintiff submits that with the
sudden withdrawal and absence from work by the Defendant, the
Plaintiff has suffered losses in business amounting to Rs.
1,23,79,637/-.
8. Plaintiff vide their letter dated 26th November, 2016 addressed to
Defendant stating inter alia the aforesaid facts called upon the
Defendant to pay the said sum of Rs. 56,60,201/ as the same became
liable to be paid by the Defendant as the Defendant was required to
give notice of three months which the Defendant deliberately failed
to do and also a further sum of Rs. 1,23,79,637/- for the loss of
business suffered by the Plaintiff at the Rajkot unit due to sudden
absence / withdrawal from work by the Defendant. By the said letter,
Rajkot Unit of Plaintiff called upon the Defendant to pay the said
sum within the (7) seven days of receipt thereof, failing which the
Plaintiff would initiate legal proceedings against the Defendant.
Hereto annexed and marked Exhibit "C" is the photocopy of the said
letter dated 26th November, 2016 addressed by Plaintiff to the
Defendant.
9. Plaintiff received letter dated 16th December, 2016 from the
Defendant addressed to the Rajkot Unit of the Plaintiff inter alia
stating therein a denial of commission of any breaches by him of any
terms and asserting that no amount is due and payable by him to the
Plaintiffs. Hereto annexed and marked Exhibit "D" is the photocopy
of the said letter dated 16th December, 2016 addressed by Defendant
to the Plaintiffs.
10. Plaintiff submits that the Defendant quit the services at the
Rajkot Unit of Plaintiff along with one Dr. Bhavin Patel, full time
Associate Consultant in the Internal Medicine and Critical Case at
the Rajkot Unit of Plaintiff assisting the Defendant. The resignation
tendered by the Defendant being a common one for Dr. Bhavin Patel
as well duly signed by Mr. Bhavin Patel.
11. Plaintiff submits that in the said backdrop, Defendant is liable to
pay to the Plaintiff and the Plaintiff is entitled to recover from the
Defendant a sum of Rs. 1,44,67,432/-comprising of the Principal
amount of Rs. 1,30,39,838/-along with interest @ 18% per annum
from the 10th December, 2015 i.e. 7 days after receipt of the letter
dated 26th November, 2016 Exhibit C hereto as set out hereunder: -
TABLE I
Sr.N Period Fees paid to Work Done Recovery
o. Defendant towards fees (Deficit)
1 August 2015 Rs.3,00,000/- Rs.2,58,734/- (Rs.41,266/-)
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2 September 2015 Rs.3,50,000/- Rs.2,78,859/- (Rs.71,141/-)
3 October 2015 Rs.3,50,000/- Rs.4,25,542/- (Rs.75,542/-)
4 November 2015 Rs.3,75,000/- Rs.3,65,649/- (Rs.9,351/-)
5 December 2015 Rs.3,50,000/- Rs.3,72,232/- (Rs.22,232/-)
6 January 2016 Rs.3,50,000/- Rs.3,57,689/- (Rs.7,689/-)
7 February 2016 Rs.3,50,000/- Rs.3,87,909/- (Rs.37,909/-)
8 March 2016 Rs.3,50,000/- Rs.3,85,194/- (Rs.35,194/-)
9 April 2016 Rs.3,50,000/- Rs.2,84,512/- (Rs.65,488/-)
10 May 2016 Rs.3,50,000/- Rs.3,23,716/- (Rs.26,284/-)
11 June 2016 Rs.3,50,000/- Rs.3,10,448/- (Rs.39,552/-)
12 July 2016 Rs.3,50,000/- Rs.3,19,988/- (Rs.30,012/-)
13 August 2016 Rs.3,50,000/- Rs.3,02,933/- (Rs.47,067/-)
14 September 2016 ----- Rs.4,59,727/- Rs.4,59,727/-
Total Amount Rs.45,25,000/- Rs.48,33,132/- Rs.3,08,132/-
(i) Work Done Column mentioned in the aforesaid Table I is
calculated as the amount of fees collected from the patients on behalf of the
Defendant.
(ii) Recovery column mentioned in the aforesaid II is the reccovery
from the Defendant of the amount of deficit of fees incurred on behalf of
Defendant.
TABLE II
F.F.S. Working (Fees Rs.3,08,132/-
for Service)
M. G. Recovery July, 2016 Rs.3,50,000/-
(Minimum Guarantee)
August,2016 Rs.3,50,000/-
September, 2016 Rs.2,68,333/-
Total Recovery Rs.6,60,201/-
TABLE III
Loss Oof business suffered by the
Plaintiff at the Rajkot Unit due to
sudden absence/withdrawal from
work by the Defendant Rs.1,23,79,637/-
Loss of business mentioned in the aforesaid Table III is the loss suffered by
the Plaintiff at the Rajkot Unit due to sudden absence / withdrawal from
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work by the Defendant and is calculated by averaging last 3 months fees
fetched by the Defendant which is amounting to Rs.11,79,013/-, this average
fees per month calculated upto 15th August,2017 totalling to Rs.1,23,79,637/.
The said is due and payable and as more particularly set out in the Particulars
of Claim being Exhibit “E” hereto.”
14. It is thus clear from the aforesaid averments that the suit claim is primarily
in the nature of losses in the business, suffered by the appellant/plaintiff as clearly
stated in paragraphs 7 and 8. It is an admitted position that if a party to a contract
suffers losses due to breach of the contract by the other party, as to whether such
amounts claimed are appropriate measure of damages, is required to be proved by
the plaintiff, by applying the well settled principles of law as laid down under
Section 73 of the Indian Contract Act, 1872. Admittedly, the present case is not a
case where the parties had agreed for any liquidated damages. This is hence, a case
which purely falls within the purview of the provisions of Section 73 of the Indian
Contract Act, 1872 providing for compensation for loss or damages caused by
breach of the contract. We note the relevant provisions of the Contract Act which
read thus:
73.Compensation for loss or damage caused by breach of contract.—When a
contract has been broken, the party who suffers by such breach is entitled to
receive, from the party who has broken the contract, compensation for any
loss or damage caused to him thereby, which naturally arose in the usual
course of things from such breach, or which the parties knew, when they
made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or
damage sustained by reason of the breach.
Compensation for failure to discharge obligation resembling those created
by contract.—When an obligation resembling those created by contract has
been incurred and has not been discharged, any person injured by the failure
to discharge it is entitled to receive the same compensation from the party in
default, as if such person had contracted to discharge it and had broken his
contract.
Explanation.—In estimating the loss or damage arising from a breach of
contract, the means which existed of remedying the inconvenience caused by
the non-performance of the contract must be taken into account.”
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15. The principles in regard to compensation for loss or damages caused by
breach of contract to be awarded by the Court, are well settled. Breach of contract
entitles the suffering party to claim compensation for any loss or damage caused to
him by such breach and which naturally arose in the usual course of things from
such breach or which the parties knew when they made the contract, to be likely to
result from the breach of it. Such compensation would not take into account any
remote or any indirect loss or damage, and a party who suffers a breach cannot sit
with folded hands in the good expectation of recovering compensation. It must
take steps to remedy the inconvenience caused by the non-performance of the
contract. Such obligation on the party not in breach, is recognized as its duty to
mitigate damages. The damages contemplated under Section 73 can be awarded
only for any loss actually suffered and not for any remote or indirect loss or
damage. The loss must be a real loss or actual damage and not merely a probable or
possible one. Also the damages arising out of a breach of contract are required to
be treated separately from damages resulting from obligations resembling those
created by contract. Considering that the theory of damages is that it is a
compensation and satisfaction for the injury sustained, in that the sum of money to
be given for reparation of the damages suffered should as nearly as possible, be the
sum which will put the injured party in the same position as he would have been if
he had not sustained the wrong for which he is getting damages.
16. Thus, applying these principles of law revolving around the said provision,
we consider as to whether the appellant/plaintiff was entitled to award of damages.
At the outset, we may observe that the averments as made in the plaint and which
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are not different in the affidavit of evidence which was filed on behalf of the
appellant/plaintiff, quantify the amount as set out in paragraphs 7, 8 and 11 on the
basis that such loss was suffered by the appellant/plaintiff due to sudden absence /
withdrawal from the work by the defendant. However, as to how such amount has
been arrived at, is set out in paragraph 11(supra) wherein the appellant has
quantified loss of business including as set out in Table III. It is calculated by
averaging last three months fees fetched by the defendant which was amounting to
Rs.11,79,013/-, and average fees per months calculated upto 15 August 2017
totaling to Rs.1,23,79,637/-, which has been quantified as damages so calculated.
However, it appears that the basic obligation of the appellant/plaintiff was to
establish that the appellant/plaintiff actually had suffered such losses. We do not
find that there is any material on record either in the evidence or in the plaint
demonstrating how such losses are incurred. The plaint is also silent on this aspect.
Section 73 casts obligation on the appellant/plaintiff to prove such losses. The
incurring of losses in the present facts could have been established only after the
appellant/plaintiff had placed substantive evidence on record demonstrating that,
after the respondent committed breach of the terms and conditions of the
agreement, and had ceased to discharge his obligations under the agreement with
effect from 30 September 2016, the actual work which was being performed by the
respondent, could not be performed by any other person, as also the
appellant/plaintiff could not secure the services of any alternate doctor to
undertake such obligations which were being discharged by the respondent.
Further by virtue of this situation all such patients who otherwise would have been
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treated by the respondent, in the normal course (in the absence of the breach of the
agreement by the respondent), could not be treated and thereby the corresponding
income which could have been earned, was lost. This was the basic premise which
was required to be established when the claim of the appellant/plaintiff was purely
on alleged loss of business. No evidence that no other Doctors were employed to
substitute the respondent, was brought on record, neither was any evidence of any
patient with all such elements, who would otherwise be treated by the respondent,
is placed on record, showing that in the absence of the respondent, any doctor who
would have otherwise treating the patients.
17. Thus, it cannot be a situation that on one hand the appellant/plaintiff claims
loss and on the other hand there was no material brought on record of the actual
loss as suffered by the appellant. The presumption would be that, there was thus no
loss. Thus, arguing only paper loss is of no consequence.
18. We test this proposition on a converse situation that in the event the
substitute doctor was appointed by entering into a separate contract and the
appellant/plaintiff has earned better than what it was otherwise earning, than the
respondent discharging his obligations under the contract in question, then such
situation, certainly no losses could be said to be caused, and in fact, it would be a
situation of an unjust enrichment, inasmuch as it would be required to be inferred
that the suit claim is made for earning an unjust amount and when it is not in
reality any losses suffered by the appellant. These are important considerations to
be taken into consideration, when the plaintiff approaches the Court praying for
compensation for loss of business. Thus, in our opinion, the appellant/plaintiff has
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miserably failed to discharge its basic burden of proving loss of business. Once such
burden is not discharged, there is no question of compensation being awarded for
loss of business.
19. We find that the learned Trial Judge has recorded appropriate reasons in
rejecting the claim when it observed thus in paragraph 8 which read thus:
“8. Plaintiff has claimed damages of Rs.1,23,79,637/- from the defendant
towards the loss suffered by it due to sudden withdrawal and absence of
defendant. However, plaintiff has not provided any details as to how that loss of
Rs.1,23,79,637/- is caused to the plaintiff hospital due to the absence of
defendant. Plaintiff has not produced any material or document to show that
due the absence of defendant any other doctor was in fact appointed by the
plaintiff hospital and such doctor was paid more remuneration than the
defendant. As per Sec.73 of Indian Contract Act, 1872 the plaintiff is entitled
only for such compensation for which naturally arose in usual course of things
from such breach of contract or which, the party knew at the time of contract.
In present case plaintiff has not produced any cogent evidence to prove that it
has suffered actual loss or damage to the extent of Rs.1,23,79,637/- due to the
absence of defendant. The appointment letter/ engagement agreement at
Exhibit-05 does not specify any liquidated damages or penalty. In such
circumstances in my view plaintiff is not entitled for damages as claimed.
Hence, while answering point No.1 in negative, I pass the following order:
ORDER
1. Commercial Summary Suit No.663 of 2024 is dismissed with costs.
2. Decree be drawn-up accordingly.”
20. We do not find any infirmity much less any illegality in the findings as
recorded by the learned Single Judge.
21. The appeal is devoid of merit. It is accordingly rejected. No costs.
(DR. NEELA GOKHALE, J) (G. S. KULKARNI, J.)
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