IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN WEDNESDAY, THE 10TH NOVEMBER 2010 / 19TH KARTHIKA 1932 RSA.No. 290 of 2005(A) ---------------------- AS.17/1998 of DISTRICT COURT & SESSIONS COURT,TRIVANDRUM OS.436/1996 of SUB COURT, NEDUMANGAD .................... APPELLANT/RESPONDENT IN THE COURT BELOW AND DEFENDANT IN THE TRIAL COURT: ----------------------------- NALINI SHEELA, W/O.C.K.BHASI, KALLASSAVIKKATHIL VEEDU, VENKAVILA, MANDAPATHILVILA, PAZHAKUTTY P.O., NEDUMANGAD, NOW RESIDING AT S.B.CLINIC, THATTATHUMALA P.O., KILIMANOOR, THIRUVANANTHAPURAM DISTRICT. BY ADV. SRI.K.B.PRADEEP RESPONDENT(S)/APPELLANT IN THE COURT BELOW AND PLAINTIFF IN THE TRIAL COURT: --------------- SUBRAMANIYAN CHETTIAR SHANMUGHOM CHETTIAR, BINDU BHAVAN, MANDAPATHIL VILA, PAZHAKUTTY P.O., NEDUMANGAD. ADV. SRI.L.MOHANAN FOR R1 SMT.LIGEY ANTONY FOR R1 THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 10/11/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.R. S.S.SATHEESACHANDRAN, J. ------------------------------- R.S.A.NO.290 OF 2005 ----------------------------------- Dated this the 10th day of November, 2010 J U D G M E N T The defendant in a suit for specific performance has filed this appeal. Suit filed by the respondent/plaintiff for enforcing a contract of sale entered with the appellant was tried along with two other suits, one of them filed by the same plaintiff for a decree of injunction to restrain the defendant from alienating the property, the subject matter covered by the agreement of sale, and the other suit, by the brother of the defendant, for partition, which included the property covered by the contract of sale. After joint trial, the suit for specific performance was decreed, and a preliminary decree was passed in the suit for partition. 2. In the suit for specific performance, the plaintiff, by way of amendment, had raised an additional claim for compensation as well in view of the breach of contract committed by the R.S.A.NO.290/2005 2 appellant/defendant in completing the contract of sale. With the suit, the respondent/plaintiff deposited the balance sale consideration due under the contract, that is, Rs.71,000/- and thus, he paid the entire sum of Rs.1,21,000/-, the sale price agreed upon by the parties. Since there was delay on the part of the defendant in executing the sale deed and completing the contract, plaintiff claimed 12% interest on the sale price aforesaid as damages. The trial court raised an issue as to whether the plaintiff is entitled to the claim of damages with the other issues of the suit. After appreciating the materials tendered in the case, the trial court concluded that for the reason the plaintiff had tendered the balance sale price with the plaint, he cannot claim compensation or damages from the defendant. In that view of the matter, the claim for compensation was negatived. Feeling aggrieved, the plaintiff preferred an appeal challenging the declining of his claim for compensation. The lower appellate court, after re-appreciating the materials, held that the plaintiff is entitled to claim compensation at the rate of 12% per annum on the sale price covered by the contract, and, accordingly, a decree for such R.S.A.NO.290/2005 3 damages was granted to the plaintiff. Correctness of that decree is assailed by the defendant in the appeal. 3. I heard the counsel on both sides. Though in a suit for specific performance, a plaintiff is entitled to claim compensation in addition to enforcement of the contract through court, as covered by Section 21 of the Specific Relief Act, 1963, hereinafter referred to as the Act, in the present case, there was no specific pleading as to what was the damage suffered by the plaintiff on account of the delay in the completion of the contract, and the claim of compensation reckoned at 12% interest on the sale price was canvassed only on the basis that the balance sale price had been deposited with the plaint, is the submission of the learned counsel for the appellant/defendant to contend that the lower appellate court went wrong in interfering with the conclusion formed by the trial court that no case for damages had been made out by the plaintiff. The decree granted by the lower appellate court awarding 12% interest on the sale price covered by the contract as compensation, according to the counsel, was based on matters which are not pleaded nor raised R.S.A.NO.290/2005 4 in the suit. Solely for the reason that Section 21 of the Act contemplate and permit grant of compensation in addition to a decree of specific performance, according to the counsel, the claim raised by the plaintiff had been granted by the lower appellate court without looking into whether such claim had been made out by the pleadings and materials tendered in the case. Per contra, the learned counsel for the respondent contended that a specific claim for compensation was urged amending the plaint and, further, it has come out in evidence that the defendant not only was recalcitrant but he committed breach of the contract wilfully and deliberately, and was culpable for the inordinate delay in completion of the contract of sale. It is submitted by the counsel that the suit for partition at the instance of another, the brother of the defendant, was an attempt by him to stall the completion of the sale. Plaintiff in the case, according to the counsel, has established his claim for damages, and the lower appellate court was justified in awarding 9% interest on the sale price as compensation, but, by mistake, it has been stated in the operative portion of the judgment and also in the decree as 12% on sale price per annum. The counsel R.S.A.NO.290/2005 5 submitted that except to the extent of modifying the compensation limiting it to 9% per annum, no interference with the decree awarding compensation, is called for. 4. Perusing the judgments rendered by the court below with reference to the submissions made by the counsel on both sides, I find the lower appellate court has failed to take note whether the essential foundation has been made to sustain the claim of compensation by the plaintiff in the suit, which was sought for by amending the plaint. In the suit for specific performance, the plaintiff claimed compensation stating that the balance sale price of Rs.71,000/- had been deposited with the plaint, and as there was delay on the part of the defendant, he is entitled to have compensation at the rate of 12% per annum on the sale price of Rs.1,21,000/-. The amendment incorporated in the plaint to claim compensation as spelt out under paragraph 8 (b) of the plaint indicate that the basis for such claim was deposit of the balance sale price before court and also the delay in completion of the contract. What he has stated, in fact, is that the sale in terms of the agreement has been delayed, and so in R.S.A.NO.290/2005 6 view of the deposit of the balance sale price, he should be awarded compensation at the rate of 12% on the total sale price of Rs.1,21,000/-. Whether such a plea raised in the plaint would suffice the grant of compensation, in addition to a decree for enforcing the contract, as under Section 21 of the Act is the question emerging for consideration. 5. Section 21 of the Act enables a party in a suit for specific performance of a contract to claim compensation for the breach of the contract, either in addition to, or in substitution of, such performance. Sub section (1) of the above section recognises the entitlement of the plaintiff in a suit for specific performance of a contract to claim compensation for its breach. Such claim may be raised either in addition to or in substitution of the performance of the contract. Sub section (2) of the section spells out the power of the court to award compensation to the plaintiff where it finds the defendant was at fault for breach of the contract but still specific performance could not be granted. Awarding of compensation to the plaintiff in addition to the decree for specific performance of the contract is subject to the R.S.A.NO.290/2005 7 conditions laid down under sub section (3) of the section, which reads thus: “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.” It is thus clear that to grant compensation in addition to specific performance is permissible only in a case where the court is satisfied that decree for specific performance is 'insufficient to satisfy justice' and the plaintiff who suffered from the breach of contract by the defendant should be compensated as well. The court must form a conclusion on the proved facts of the case that the specific performance ordered is insufficient to meet the ends of justice, to award compensation in addition to such relief to the plaintiff. 6. Where a claim of damages or compensation is made in a suit, it is incumbent upon the claimant thereof to plead and R.S.A.NO.290/2005 8 prove the essential particulars entitling him to claim such relief as against the opposite party. Mere plea and setting forth vague allegations to raise such a claim is hardly sufficient, as it has to be proved to have a decree thereof from the court. Other than the raising a plea for compensation by way of amendment, and that too, claiming it by way of interest on the amount covered by the sale price, plaintiff did not quantify the damages even tentatively nor pay any court fee to have an adjudication of such additional claim raised in his suit. So, essentially by way of the amendment, the plaintiff wanted the court to exercise its discretion under Section 34 of the Code of Civil Procedure, awarding interest to him while decreeing the suit for specific performance. Though the claim has been set up as one of compensation under the amendment, it would indicate that the plaintiff was seeking indulgence of the court for awarding of interest on the sale price, part of which was paid earlier and the rest deposited before the court taking note of the delay in completion of the contract. The trial court was not satisfied on the facts presented, that the plaintiff was entitled to any compensation, and so much so, the issue raised thereof was R.S.A.NO.290/2005 9 decided against him. In the context, it is also to be pointed out that if it was a case of claiming damages or compensation, the principles under Section 73 of the Contract Act would also arise for consideration in as much as the plaintiff has to prove the loss or damage caused to him, what mitigating steps had been taken to reduce the quantum of damages etc., and as indicated earlier, on those aspects as well, there is no pleading nor any evidence. Solely for the reason that there was breach or delay on the part of the defendant in completing the contract, a claim for damages, even assuming it was raised under Section 21 of the Act, cannot be granted. The lower appellate court, it is seen, taking note of the statements in the delivery report, as given expression to by the Amin, with respect to the property delivered over, in execution of the decree passed in the suit, had formed a conclusion that the property was much profit yielding, and so much so, the plaintiff had suffered a lot on account of the delay in completion of the sale. Perusal of the records would show that the appellant before that court (Plaintiff) with an argument note had produced the delivery kaichet, a sale deed in the appeal, and on the basis of such materials, the lower appellate R.S.A.NO.290/2005 10 court has formed the aforesaid conclusion, in respect of which, no foundation was laid either in the pleadings or in the evidence nor any notice given to the defendant. When such be the case, it follows that the conclusion so formed to grant a decree of damages in favour of the plaintiff cannot at all be sustained. The decree of damages granted to the respondent/plaintiff by the lower appellate court is set aside, and the appeal is allowed directing both sides to suffer their respective costs. S.S.SATHEESACHANDRAN JUDGE prp R.S.A.NO.290/2005 11