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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

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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                                                             9_COMFA_27_2026-2.DOC



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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