2001 (4) TMI 830 - SC - Companies Law

Special court orders - suit filed by the respondent was decreed and it was, inter alia, ordered that the appellant herein should purchase units which had been agreed to be sold to the respondent and deliver the same to it - Held that - Modify the decree passed by the Special Court and direct that a sum of Rs. 212 crores was payable by the appellant to the respondent and as we value the said amount has already been received by the respondent the decree stands satisfied. We make it clear that the disposal of this appeal does not in any way approve or disapprove the reasoning of the Special Court.

Summary

Issues:
- Appeal against judgment of Special Court decreeing specific performance and damages for non-delivery of units
- Dispute over payment for units of Unit Trust of India
- Calculation of damages and interest for breach of contract

Analysis:
The appeal was filed against the judgment of the Special Court, which decreed that the appellant should purchase and deliver units of Unit Trust of India to the respondent, as agreed upon in the transactions. The respondent had paid a substantial amount for the units, but they were never delivered. The Special Court granted specific performance, requiring the appellant to buy the units and also sell the units representing the rights issue that the respondent missed out on due to non-delivery. The court also awarded costs to the respondent.

During the appeal, an interim order was passed directing the appellant to pay a significant amount or transfer units of Unit Trust of India to the respondent. Subsequently, units worth about Rs. 210 crores were handed over to the respondent, along with a cash payment. The appellant acknowledged that the respondent was entitled to a refund of the money paid, along with damages as per the Indian Contract Act, 1872.

The Supreme Court found that the decree for specific performance may not have been appropriate in this case, as the respondent could be adequately compensated with a refund and reasonable damages. The court determined that the respondent should receive a total sum of about Rs. 212 crores, considering the refund amount, interest, and damages. As the appellant had already transferred units and made a cash payment totaling around Rs. 212 crores, no further amount was deemed payable.

The Supreme Court modified the decree passed by the Special Court, stating that the appellant had fulfilled the payment obligation to the respondent. The court clarified that its decision did not imply approval or disapproval of the Special Court's reasoning. The appeal, cross-appeal, and interlocutory application were all disposed of, with each party bearing their own costs.