* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) No.2677/1986
% 10th January, 2018
SURESH KUMAR MALHOTRA & ORS. ..... Plaintiffs
Through: Plaintiff no.1 in person.
versus
GUJRAL ESTATES PVT. LTD. ..... Defendant
Through: Mr. Ashok Chhabra, Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? YES
VALMIKI J. MEHTA, J (ORAL)
I.A. No.12396/2017 (under Order VI Rule 17 CPC)
1.
This is an application filed by the plaintiffs in a suit for specific performance or damages for seeking amendment in the plaint so as to seek enhancement of the damages to be granted to the plaintiffs. Plaintiffs had originally claimed damages of Rs.20,06,800/- but subsequently plaintiffs were allowed to amend the plaint vide order dated 6.1.2009 in I.A. No.1846/2007 and thereby plaintiffs were allowed to enhance the claim of damages to Rs.3.25 crores. Now by the present amendment application moved at the stage of final CS(OS) No.2677/1986 Page 1 of 12 arguments this figure of damages is sought to be enhanced to Rs.7,17,72,000/-.
2. Whenever there is a contract between the parties, including the contract being an agreement to sell, if there is a breach of contract, then as a result of breach of contract by the proposed seller/defendant two alternative reliefs arise to the buyer/plaintiff. The first relief is the ordinary relief available in all cases of breach of contract that on account of breach of contract by the defendant in not selling the property to the plaintiff hence damages be granted as the plaintiff pleads that loss is caused to him as a result of the breach, and this relief is a relief which is granted under Section 73 of the Indian Contract Act, 1872. The second alternative relief is that plaintiff in a suit for specific performance insists that contract be not broken/breached but the same be performed i.e the performance means no-breach. In a way therefore the suit seeking the relief of specific performance filed under the Specific Relief Act, 1963 is in the nature of an exception to the ordinary relief of damages under Section 73 of the Contract Act because on account of contract being breached, and on the plaintiff satisfying the ingredients required to succeed in a suit CS(OS) No.2677/1986 Page 2 of 12 for specific performance in terms of the provisions of the Specific Relief Act, instead of damages specific performance is granted.
3. In the present case, admittedly plaintiffs claim damages in the alternative to the specific performance and also so argued before this Court. It is argued that damages which have to be granted to the plaintiffs in alternative to the specific performance should be the value of the property on the date of passing of the judgment of this Court. Reliance is placed upon the order of the learned Single Judge of this Court dated 6.1.2009 and it is argued that on the same principles by which amendment was allowed by entitling the plaintiffs to seek higher damages vide order dated 6.1.2009 hence now the present application should also be allowed.
4. A reading of the order dated 6.1.2009 does not show that the learned Single Judge of this Court has dealt with the issue as to the damages to be awarded in the alternative to the relief of specific performance should be those damages on the date of committing of breach by the defendant/proposed seller or on the date of the passing of the judgment in the suit for specific performance in which alternative relief of damages is claimed. Though in the third para of CS(OS) No.2677/1986 Page 3 of 12 the order dated 6.1.2009 there is by narration of argument of plaintiffs reference made to Explanation (i) to Section 10(b) of the Specific Relief Act for claiming damages as per value of property on date of passing of the judgment, this provision is not reproduced in the order dated 6.1.2009 and when this provision is read it is found that this provision does not state that damages which are to be awarded to proposed purchasers who are the plaintiffs in the suit for specific performance, are those damages which should be the value of the property on the date of passing of the judgment in the suit. Section 10 of the Specific Relief Act reads as under:-
"Section 10. Cases in which specific performance of contract enforceable.--Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the court, be enforced--
(a) when there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation.--Unless and until the contrary is proved, the court shall presume--
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases:--
(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff."CS(OS) No.2677/1986 Page 4 of 12
It is thus seen that Explanation (i) to Section 10(b) of the Specific Relief Act does not provide that amount of damages to be awarded to the plaintiff should be the value of the immovable property on the date of the passing of the judgment.
5.(i) The only relevant provision in this regard will be Section 21 of the Specific Relief Act and this provision has been reproduced in the order dated 6.1.2009. The order dated 6.1.2009 however in spite of reproducing the provision of Section 21 of the Specific Relief Act does not deal with the Sub-Section (4) of Section 21 of the Specific Relief Act, and which provision specifically states that for awarding compensation, the provision of Section 73 of the Indian Contract Act will govern. Section 21 of the Specific Relief Act reads as under:-
"21. Power to award compensation in certain cases.-- (1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.
(2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.
(3) If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly. (4) In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in section 73 of the Indian Contract Act, 1872 (9 of 1872).CS(OS) No.2677/1986 Page 5 of 12
(5) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint:
Provided that where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation.
Explanation.--The circumstance that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section."
(ii) In a suit for specific performance when a proposed buyer/plaintiff pleads a breach on behalf of the proposed seller/defendant, then the loss caused to the plaintiff has to be proved and for which suffering of loss compensation/damages are awarded, damages ordinarily being the difference in the value of the property which is agreed to be sold to the plaintiff i.e the difference between the agreed value as per the agreement to sell and the higher value of the immovable property on the date of the breach. In case the value of the property has in fact fallen on the date of breach i.e the value is lesser than as agreed in the agreement to sell, then, in fact plaintiff cannot be awarded damages because as a result of breach of contract by the defendant/proposed seller no loss is caused to the plaintiff because plaintiff could well have purchased the similar property on a lesser price than the price stated in the agreement to sell. Once there is no loss there does not arise actionable cause of action in favour of CS(OS) No.2677/1986 Page 6 of 12 the plaintiff. In fact on this similar principle that in spite of breach of an agreement to sell, the proposed seller is not entitled to forfeit the money received by him unless loss is pleaded and proved for being entitled to adjust the advance price paid, a suit filed by a proposed buyer for recovery of the advance price paid is decreed except to allowing the proposed seller a limited adjustment towards earnest money amount. This is the ratio of the judgment of the Supreme Court in the cases of Fateh Chand Vs. Balkishan Das, AIR 1963 SC 1405 and Kailash Nath Associates Vs. Delhi Development Authority and Another, (2015) 4 SCC 136 and which clearly holds that loss being caused by the breach of contract is a sine qua non for breach of contract.
(iii) Therefore in the suit filed by the proposed buyer under the agreement to sell seeking specific performance and in which suit the relief of damages is prayed in the alternative to specific performance, so far as the latter relief of seeking damages is concerned the same are the damages which have to be calculated in terms of Section 73 of the Contract Act. Section 73 of the Contract Act deals with grant of damages in the scenario of breach of contract by the defendant in the CS(OS) No.2677/1986 Page 7 of 12 suit with the damages being assessed as on or in around the date of breach. As already stated above, plaintiff will get damages because he suffers a loss on account of the value of the property proposed to be purchased being higher on the date of the breach than as stated in the agreement to sell because in such a scenario the plaintiff suffers a loss of having to purchase a similar property to what is agreed to be sold under the subject agreement to sell, at a higher price, and the difference between the agreed price in the agreement to sell and the higher actual price on the date of breach would be the loss which the plaintiff/proposed buyer has to bear so as to purchase a similar property. Accordingly, there is no provision of any law, much less the provision of Section 10(b) Explanation (i) of the Specific Relief Act, which provides that in a suit for specific performance when damages are granted in the alternative to the relief of specific performance, then the damages which have to be granted are the damages which would be the value of the immovable property on the date of the passing of the judgment. Adequate relief as stated in Section 10(b) Explanation (i) of the Specific Relief Act is generally the amount of damages as per Section 73 of the Indian Contract Act and so provided in Sub-Section (4) of Section 21 of the Specific Relief Act.
CS(OS) No.2677/1986 Page 8 of 12
6. I may note that ordinarily the order of the learned Single Judge dated 6.1.2009 would have been binding on this Court for allowing of the present application for amendment, however, it is noted that while passing the order dated 6.1.2009 the aforesaid aspects which have been dealt with by this Court including of applicability of Sub-Section (4) of Section 21 of the Specific Relief Act and the non- applicability of Explanation (i) to Section 10(b) of the Specific Relief Act were not dealt with in the said order dated 6.1.2009. This order hence deals with a totally separate defence being a totally separate cause of action of defence as argued on behalf of the defendant today for dismissing the application for amendment of the plaint seeking damages as per the value of the property on the date of judgment in the suit.
7. Finally I may note that the subject suit is at the stage of final arguments. If the application is allowed then once again this old suit of the year 1986 will have to be sent for trial with fresh evidence of both the parties to be led on the value of the property allegedly which would be the value of damages which the plaintiffs claim. In fact, if the applications such as the present are allowed then possibly CS(OS) No.2677/1986 Page 9 of 12 till the entire period in which the suit remains in the category of „Finals‟ there could be repeated applications at different points of time for time and again seeking to enhance the value of the damages on account of the alleged increase in the value of the property. In fact, reverse may also be the position that even the defendant may be able to file repeated applications for changing the defence to reduction of the value of the damages on the ground that value of the immovable property in fact has decreased. All these steps should not held to be permissible. As already stated above, value of the property as on the date of passing of the judgment is not a determining factor for awarding damages in view of Sub-Section (4) of Section 21 of Specific Relief Act and it is the principle contained in Section 73 of the Contract Act which applies to allow damages on the date of the breach, and which damages as already stated above, is a differential higher value of the property on the date of breach and not being the value of the property on the date of passing of the judgment in the suit.
8. An amendment application seeking reliefs which are not permissible in law cannot be allowed as amendments beyond law cannot be granted.
CS(OS) No.2677/1986 Page 10 of 12
9. In view of the aforesaid discussion, there is no merit in this application seeking amendment of the plaint. Dismissed. I.A. Nos.7841/2017 (for recalling of order dated 12.2.2016) & 7842/2017 (for condonation of delay)
10. By these applications, plaintiffs seek recall of the order dated 12.2.2016 by which evidence of the plaintiffs was closed with respect to additional evidence required to be led by the plaintiffs on the issue of enhancement of damages and with respect to which plaintiffs were allowed to amend the plaint vide order dated 6.1.2009. It is noted that the present applications have been filed after around one and a half years of the evidence of the plaintiffs being closed with respect to the additional evidence to be led as regards the enhanced value of the damages. After the plaintiffs‟ evidence was closed inasmuch as by an earlier order dated 15.1.2016 plaintiffs‟ application for extension of time was dismissed by the Joint Registrar, and consequently on 12.2.2016 the matter was listed in the category of „Finals‟. These applications were thereafter filed and brought up for hearing for the first time in Court on 19.7.2017. Therefore there is no reason to condone the delay and also that there are no reasons for CS(OS) No.2677/1986 Page 11 of 12 recalling of the order for allowing the plaintiffs to lead additional evidence qua the enhanced value of the damages.
11. I would like to state that I have already given today reasons for dismissing I.A. No.12396/2017 moved by the plaintiffs by which again sought to seek enhanced damages to be added by amendment to the plaint, and the reasons for dismissing the application under Order VI Rule 17 CPC will also apply with respect to disallowing of the applications for condonation of delay and for leading additional evidence by the plaintiffs on issue no.7 pertaining to the enhanced damages to be awarded to the plaintiffs.
These applications are accordingly dismissed.
CS(OS) No.2677/1986
12. List in the category of „Finals‟ as per the year of its seniority.
JANUARY 10, 2018 VALMIKI J. MEHTA, J
Ne
CS(OS) No.2677/1986 Page 12 of 12