Facts

• Kanchan Udyog Ltd ( Appellant), was a company specialising in the establishment and operation of non-alcoholic beverages bottling plants.
• United Spirits Ltd (Respondent), was a company providing technical consultancy and supplying essences for beverage production.
• They entered into agreements to establish a non-alcoholic beverages bottling plant in Dankuni, West Bengal, under the Respondent’s trademarks 'Thrill', 'Rush', 'Sprint', and 'McDowell’s Sparkling Soda'.
• United Spirits Ltd ( Respondent) terminated the Bottler’s agreement on 16th March 1988, leading to the cessation of commercial production at the plant in May 1989.
• The Appellant filed Suit No. C.S. 839 of 1990 before a Single Judge against the Respondent for wrongful termination of the Bottler’s Agreement and claimed damages for loss of anticipated profits and installation costs. The suit was decreed in favour of the Appellant by a Single Judge on 02.12.1999, awarding substantial damages.
• On appeal (APD No. 14 of 2000), the Division Bench reversed the Single Judge's decree on 14.01.2005 and dismissed the Appellant's suit.
• Hence, the present appeal was filed before the Supreme Court.
  
  

Background/ Procedural Posture:

Decision of Single Judge:

The learned Single Judge, on 02.12.1999, decreed the suit in favour of Appellant, awarding them Rs. 2,73,38,000/- for loss of anticipated profits and Rs. 1,60,00,000/- for installation costs, after deducting Rs. 9.05 lakhs payable to United Spirits Limited as consultancy charges. This resulted in a total payable amount of Rs. 4,24,33,000/- with 10% interest from the date of the suit until payment.

Appeal to Division Bench:

However, on 14.01.2005, the Division Bench reversed this decree in the appeal (APD No. 14 of 2000) preferred by United Spirits Limited, dismissing the suit filed by Kanchan Udyog Limited and nullifying the damages awarded by the Single Judge.

Appeal Before the Supreme Court:

The Appeal was filed before the Supreme Court to challenge the Division Bench's reversal of the Single Judge's decision awarding damages to Kanchan Udyog Limited.

Main Issue:

1. Whether the breach of contract by the Respondent was the primary cause of the Appellant's loss of anticipated profits?
2. Whether reliance loss and expectation loss can coexist or are mutually exclusive? (Paragraph 28)