2022 (3) TMI 2 - SC - Indian Laws

Suit for specific performance of a collaboration agreement - termination of Collaboration Agreement - prayer for declaration of perpetual injunction - whether the Appellant is entitled for damages for the period between 24.08.2005 and 31.12.2009? - time limitation - HELD THAT - The relevance of 24.08.2005 is that the Supreme Court disposed of the SLP on that date vacating the interim order granted in favour of the Appellant. Since there was an interim order operating in favor of the Appellant damages are sought only from 24.08.2005 till 31.12.2009. The Appellant admits that no relief for damages or compensation was claimed in the suit. Admittedly such a relief was not sought for either before the Division Bench or before this Court. No steps were taken by the Appellant to amend the appeal even after the date of expiry of the Collaboration Agreement i.e. 31.12.2009. Whether even if a relief for damages has not been specifically sought for this Court can still award damages to the Appellant? - HELD THAT - In JAGDISH SINGH VERSUS NATTHU SINGH 1991 (11) TMI 246 - SUPREME COURT the Respondents suit for specific performance of an agreement for conveyance of certain properties was dismissed by the Civil Court and the judgment of the Civil Court was upheld in appeal. As the High Court reversed the findings of the First Appellate Court the defendant filed an appeal before this Court. The contention of the Appellant in that case was that the contract itself became incapable of specific performance as a proceeding for compulsory acquisition of suit properties was initiated during the pendency of the second appeal. It was not clear as to whether compensation in lieu of specific performance was sought by the plaintiff in the suit. However on a finding that there is no difficulty in assessing the quantum of compensation for the subject property which was ascertainable by determination of market value this Court permitted amendment of relief to do complete justice. The scope of Section 21 (4) and (5) was examined by this Court in SHAMSU SUMARA BEEVI VERSUS G. ALEX AND ANR. 2004 (8) TMI 694 - SUPREME COURT . This Court referred to the Law Commission of India s recommendation that in no case the compensation should be decreed unless it is claimed by a proper pleading. However the Law Commission was of the opinion that it should be open to the plaintiff to seek an amendment to the plaint at any stage of the proceedings in order to introduce a prayer for compensation whether in lieu or in addition to specific performance. In the said case no claim for compensation for breach of agreement of sale was claimed either in addition to or in substitution of the performance of the agreement. Admittedly there was no amendment to the plaint asking for compensation either in addition or in substitution of the performance of an agreement of sale - thus in the present case the Appellant is not entitled to claim damages for the period between 24.08.2005 and 31.12.2009. The request of the Appellant for grant of damages cannot be accepted - Appeal dismissed.

Summary

Issues Involved:
1. Termination of the Collaboration Agreement.
2. Allegations of conspiracy and procuring breach of contract.
3. Entitlement to relief of specific performance.
4. Entitlement to damages for the period between 24.08.2005 and 31.12.2009.

Detailed Analysis:

1. Termination of the Collaboration Agreement:
The Appellant entered into a Collaboration Agreement with Respondent No.3 on 01.11.1994, which was extended by supplementary agreements. The agreement was terminated by Respondent No.3 on 14.04.2004, claiming it would end on 31.10.2004. The Appellant sought relief through a civil suit, arguing the agreement was valid until 31.12.2009. The High Court agreed with the Appellant, ruling that the termination notice was illegal and the agreement was valid until 31.12.2009. The Division Bench upheld this judgment.

2. Allegations of Conspiracy and Procuring Breach of Contract:
The Appellant alleged that Respondents No.1 and No.2 conspired to procure a breach of the contract between the Appellant and Respondent No.3. The Single Judge found no evidence of conspiracy or procuring breach, concluding that the termination was economically motivated and not intended to specifically harm the Appellant. This finding was upheld by the Division Bench.

3. Entitlement to Relief of Specific Performance:
The High Court denied the relief of specific performance, citing Section 14(1)(b) of the Specific Relief Act, 1963, which bars specific performance for contracts involving continuous duties and unspecified future obligations. The court noted that the contract required ongoing technological updates and innovation, making specific performance impractical. Instead, the court granted an injunction against Respondent No.3 and its affiliates, preventing them from marketing 'Aral' products in India until 31.12.2009. The Division Bench upheld this decision.

4. Entitlement to Damages for the Period Between 24.08.2005 and 31.12.2009:
The Appellant, acknowledging that specific performance could no longer be granted, sought damages for the period from 24.08.2005 to 31.12.2009. The Appellant cited several judgments to argue that damages could be awarded even if not specifically pleaded. However, the court noted that the Appellant had not claimed damages in the original suit, before the High Court, or in the appeal. The court referred to Section 21(5) of the Specific Relief Act, which requires a specific claim for compensation in the plaint. The court also referenced the judgment in Shamsu Suhara Beevi v. G. Alex and Another, which emphasized that compensation cannot be granted without a specific claim. Consequently, the court denied the Appellant's request for damages.

Conclusion:
The Supreme Court upheld the High Court's judgment, denying specific performance but granting an injunction. The court also rejected the Appellant's claim for damages due to the lack of a specific plea for such relief. Civil Appeal No. 3127 of 2009 was disposed of, and Civil Appeal No. 3128 of 2009 was dismissed.