JUDGMENT [ENTITY], J.
1. Petitioner filed petition being [CASE NUMBER] under [SECTION] & [SECTION] of the [ACT] (for short the 'Act') seeking direction to respondents 1 & 2 to file the award and proceedings in Court and by the order dated 26th April, 1994, notice was ordered to be issued to respondent No.2 for 29th July, 1994. In the meantime, on arbitrator's filing the award and proceedings registered as [CASE NUMBER], notice was ordered to be issued to both the parties to file objections, if any, within statutory period, returnable on 7th September, 1994. [CASE NUMBER] is the objections filed on 26th August, 1994 under [SECTION], [SECTION] & [SECTION] of the Act by respondent No.1/[ENTITY] which is being contested by filing reply by the petitioner.
2. In said objection petition, although respondent No.1 had taken diverse grounds for setting aside the award dated 27th January, 1994 but during the course of argument, Sh. [ENTITY] appearing for the said respondent had only pressed the ground taken in [SECTION] of para No.1 thereof. It is alleged in this sub-para that the arbitrator erroneously ignored the costs of cement and steel to be supplied by respondent No.1 under Clause 10 of the contract while calculating the net tender amount. Submission advanced by Sh. [ENTITY] was that in the agreement being No. 13/ EEPCND/90-91 forming part of arbitrator's file, amount of Rs. 10, 96, 754/- has been shown as the estimated cost while Rs. 17,11,340.[SECTION] as the tender amount. Said amount of estimated cost was calculated after allowing deduction for Rs. 6,14,000/- being the total sum of costs of cement and steel to be supplied by respondent No.1 to the petitioner. According to Sh. [ENTITY], expected reasonable profit of 10% ought to have been awarded on the said estimated cost instead of tender amount. On the other hand, relying on the decision in [ENTITY] v. State of Madhya Pradesh and Anr. 1999 (3) Arb. L.R. 291 (SC), it was contended by Sh. [ENTITY] for petitioner that the arbitrator had rightly awarded Rs. 1, 45, 464/- calculated @ 10% of the tender/contract amount towards expected reasonable profit to the petitioner. Award dated 27th January, 1994 would show that amount of Rs. 14, 54,639/- on which estimated reasonable profit of 10% had been calculated, was arrived at after making deductions @ 15% towards profit and overhead expenses from the contract amount of Rs. 17, 11,340,[SECTION]. In [ENTITY]' case (supra), one of the points which fell fro consideration was whether appellant was entitled to profit of 10% on Rs. 2 lacs which was the value of contract? While dealing with that point, it was held in para No. 9 of the report (on pages 295-96):-
"This Court in [PRECEDENT], while interpreting the provisions of [SECTION] of the [ACT], has held that damages can be calimed by a contractor where the government if proved to have committed breach by improperly rescinding the contract and for estimating the amount of damages court should made a broad evaluation instead of going into minute details. It was specifically held that where in the works contract, the party entrusting the work committed beach of contract, the contractor is entitled to claim the damage for loss of profit which he expected to earn by undertaking the works contact. Claim of expected profits is legally admissible on proof of the breach of contract by the erring party. It was observed:
'What would be the measure of profit would depend upon facts and circumstances of each case. But that there shall be a reasonable expectation of profit is implicit in a works contract and its loss has to be compensated by way of damages if the other party to the contract is guilty of breach of contract cannot be gainsaid. In this case we have the additional reason for rejecting the contention that for the same type of work, the work site being in the vicinity of each other and for identical type of work between the same parties, a Division Bench of the same High Court has accepted 15 per cent of the value of the balance of the works contract would not be an unreasonable measure of damages for loss of profit.
Now if it is well-established that the respondent was guilty of breach of contract inasmuch as the rescission of contract by the respondent is held to be unjustified, and the plaintiff contractor had executed a part of the work contract, the contractor would be entitled to damages by way of loss of profit. Adopting the measure accepted by the High Court in the facts and circumstances of the case between the same parties and for the same type of work at 15 per cent of the value of the remaining parts of the work contract, the damages for loss of profit can be measured.' To the same effect is the judgment in [PRECEDENT]. After approving the grant of damages in case of breach of contract, the Court further held that the appellant court was not justified to interfere with finding of fact given by the trial Court regarding quantification of the damages even if it was based upon guess work. In both the cases referred to hereinabove, 15% of the contract price was granted as damages to the contractor. In the instant case, however, the trial court had granted only 10% of the contract price, which we feel was reasonable and permissible, particularly when the High Court had concurred with the finding of the trial Court regarding breach of contract by specifically holding that "we therefore see no reason to interfere with the finding recorded by the trial Court that the defendants by rescinding the agreement committed breach of contract." It follows therefore as and when the 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. The appellate Court was, therefore, not justified in disallowing the claim of the appellant for Rs. 20,000/- on account of damages as expected profit out of the contract which was found to have been illegally rescinded."
3. Applying the ratio of this decision, the submission referred to above advanced on behalf of respondent No.1 that profit of 10% ought to have been calculated on aforesaid estimated cost instead of contract amount, deserves to be repelled being without any merit. Arbitrator had rightly awarded expected reasonable profit of 10% on Rs. 14,54,639/- being the amount of contract to the petitioner.
4. Consequently, [CASE NUMBER] is dismissed and award dated 27th January, 1994 is made the rule of Court. In case respondent No.1 fails to pay the decretal amount to the petitioner within a month from today, the petitioner will be entitled to future interest @ 18% per annum. No order as to costs.