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Smart Summary

Judgment Summary — Extracted from the Provided Opinion

Factual and Procedural Background

The plaintiff-respondent filed T.S. 208/88 against the defendant-appellant seeking, inter alia, recovery of possession, alternatively specific performance directing the defendant to pay the balance consideration of Rs. 2,34,000/-, and damages for wrongful use and occupation (tentatively claimed at Rs. 50,000/-). The parties had an oral agreement for sale dated June 1986 for a flat in Calcutta for Rs. 3,25,000/-. The purchaser (appellant) had paid Rs. 10,000/- initially and further sums totalling Rs. 91,000/- (receipts issued). There was a dispute whether a garage formed part of the sale. The purchaser was put in possession in part performance of the contract but did not pay the balance consideration, whereupon the plaintiff filed suit.

The learned trial Judge delivered judgment dated 4-8-1994, decreeing specific performance in part: directing payment of the balance Rs. 2,34,000/- with interest at 10% p.a. from April 1988 to end of July 1994, subject to conditions and alternative reliefs (eviction and damages at Rs. 1,000/- per month if payment not made). The present appeal questions the propriety of granting interest at 10% p.a. on the balance consideration.

Legal Issues Presented

  1. Whether the plaintiff/respondent was entitled to interest at the rate of 10% per annum on the balance consideration (Rs. 2,34,000/-) directed to be paid as part of a decree of specific performance?
  2. More broadly, whether a court can award interest on such a sum in a decree for specific performance when interest was not claimed in the plaint and the relief sought fell within the Specific Relief Act, 1963?

Arguments of the Parties

Appellant's Arguments (Mr. S.P. Roychowdhury)

  • The trial court erred in awarding interest at 10% p.a. on the balance consideration of Rs. 2,34,000/- given the pleadings (paragraph 12 of the plaint and the prayer) did not claim interest.
  • The plaintiff was not entitled to equitable relief of interest because the appellant had already paid Rs. 91,000/- out of Rs. 3,25,000/-; thus equitable relief in the form of interest was inappropriate.

Respondent's Arguments (Mr. Bagchi)

  • The plaintiff was entitled to equitable relief by way of interest because possession had been in the appellant's hands since 17-12-96 (as argued), and equitable principles warranted interest.
  • Reliance was placed on Firm Sriniwas Ram Kumar v. Mahabir Prasad (AIR 1951 SC 177) to support entitlement to interest.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Firm Sriniwas Ram Kumar v. Mahabir Prasad, AIR 1951 SC 177 Where a money decree is passed (defendant admitted money advanced was a loan), plaintiff may be entitled to interest; used to support grant of interest where a money decree exists. Considered and distinguished: in that case a money decree was passed; in the present case the sum was not a money decree but part of specific performance, so the precedent did not support granting interest here.
Mohan Manucha v. Manzoor Ahmad, AIR 1943 PC 29 Authority relied upon by Firm Sriniwas to support interest on money decrees where facts admit a money obligation. Not applied directly; referenced as part of the chain of authority supporting the principle in Firm Sriniwas, and distinguished on facts from the present case.
Tejram v. Patirambhau, JT 1997 (4) SC 677; AIR 1997 SC 2702 Illustrates the Apex Court declining to grant interest in a similar situation where the sum became payable only at execution of the sale deed. Relied upon as supportive authority for refusing interest on the sum awarded in the context of specific performance.
Moulvi Ali Hossain Mian v. Rajkumar Haider, AIR 1943 Cal 417 Holds that the law of Specific Relief is in essence adjective (procedural) law. Used to support the proposition that the Specific Relief Act governs suits for specific performance and limits reliance on general provisions like CPC Section 34.
Radheshyam Kanila v. Sham Kiran Bala Dasi, AIR 1971 Cal 341 Also treated the Specific Relief Act as adjective law. Referred to in support of the nature of the Specific Relief Act as procedural/adjective law.
Giridhar Das Anandji v. Ziaram Madhabji Patel, 1971 PLJR 66 Division Bench view distinguishing earlier decisions and holding that Specific Relief Act also deals with rights (substantive aspects). Noted as a contrasting decision; the opinion acknowledges differing views on whether the Act contains substantive rights as well as procedure.
Md. Yonus v. B.V. Phenaki, 1987 PLJR 65 (Full Bench) Applied the principle generalia specialiabus non derogant — special statute overrides general provisions. Used to support the proposition that the Specific Relief Act, being special, prevails over general provisions like CPC Section 34 when determining remedies in specific performance suits.
(1978) 37 FLR 280 : AIR 1979 SC 65 Authority referenced on the interaction between special and general provisions. Relied on for the same general proposition that special statutory provisions override general ones.
Rama Ravalu Gavade v. Sataba Gavadue Gavade, 1997 (1) SCC 261 Illustrative authority on the precedence of special provisions. Referred to in support of the generalia specialiabus principle as applied to the Specific Relief Act.
Keshanlal v. Chandrababu Devi, AIR 1990 AP 72 Fact-specific case where buyer occupied as tenant at a monthly rent; distinguished on facts. Distinguished: facts (tenant relationship, no claim under Section 21) different from the present case.
Union of India v. Watkins Mayor & Co., AIR 1966 SC 275 Held that under the Interest Act the Court may allow interest if the amount is certain and payable at a certain time by virtue of a written instrument (case of bailment distinguished). Distinguished on factual basis: present case is governed by Specific Relief Act and not by the Interest Act's regime for certain sums due under written instruments.
Bengal Nagpur Railway Company v. Rattanji Ramji, LR LXVIA 66 : AIR 1938 PC 67 Case concerned with claim for work done (distinguishable subject-matter). Referred to illustrate distinguishable contexts where interest issues arose; not applied to support interest here.
New Brunswick Electrical Power Ltd. v. Alice M. Hori, AIR 1929 PC 185 Held that interest cannot be allowed on equitable principle (authority cited for the proposition). Used to show precedent where interest was not permitted on equitable grounds; supports restraint on awarding interest in equity.
Quinn v. Lealhain (1900-1903) AER (Rep) 1 Illustrative of the proposition that a decision is authority for what it decides and not for what may be deduced from it. Quoted to emphasize that prior decisions bind only on their decided points; used in reasoning about distinguishing authorities.
Krisehna Kumar v. Union of India, 1990 (4) SCC 207 : AIR 1990 SC 1782 Authority cited on the limits of what a decision is an authority for (illustrative). Referred to in the context of limiting precedential application to decided points.
Commissioner Of Income Tax v. Sun Engineering Works (P) Ltd., AIR 1993 SC 43 Illustrative case cited about limits of precedential value. Referred as part of the court's discussion on distinguishing cases and precedential scope.
Regional Manager v. Pawan Kumar Dubey, AIR 1976 SC 1766 Another illustrative authority on the limits of precedential reach. Referred to in the same vein as the other decisions emphasizing factual distinctions.
Municipal Corporation of Delhi v. Gurnam Kaur, 1989 (1) SCC 101 : AIR 1989 SC 38 Illustrative authority on precedential limits. Referred to by the court to support the point about factual distinctions affecting application of precedent.
Mittal Engineering Works (P) Ltd. v. Collector of Central Excise, 1997 (1) SCC 203 Settled law that a decision is not authority on a point which was not argued. Quoted to caution against relying on precedents for points not actually argued or decided in those cases.

Court's Reasoning and Analysis

The court framed the sole question as whether the trial Judge erred in granting interest on the balance consideration of Rs. 2,34,000/-. The analysis proceeded in the following steps:

  1. The court acknowledged that a civil court has power to grant interest in the absence of contract or statute under Section 34 of the Code of Civil Procedure (CPC). (Paragraphs 9–12)
  2. It then observed that the trial judge had decreed specific performance of the contract; that decree was not under challenge. Because specific performance was decreed, the Rs. 2,34,000/- was directed as the balance consideration to be paid to enable execution and registration of the sale deed. The court held that this sum was not granted as a conventional money decree. Therefore Section 34 CPC could not be invoked to justify awarding interest on that sum. (Paragraph 13)
  3. The court emphasized the binding nature of pleadings: the plaintiff had not pleaded or prayed for interest. Instead, the plaintiff sought damages in the alternative (Rs. 50,000/-) under Section 21 of the Specific Relief Act if specific performance were granted. (Paragraphs 14–15)
  4. The Specific Relief Act, 1963 was treated as a special statute governing suits for specific performance; Section 21 specifically deals with damages and contains both substantive and procedural elements. Sub-section (5) of Section 21 precludes awarding compensation unless it is claimed in the plaint; the proviso gives the court power to permit amendment if not claimed initially. The court held the Specific Relief Act is a complete code for rights and remedies in specific performance suits and thus overrides general provisions like Section 34 CPC in this context. (Paragraphs 16–20, 24–25)
  5. Applying the above, the court concluded the trial Judge should have confined relief to what was claimed under the Specific Relief Act. Because the plaintiff had claimed damages (Rs. 50,000/-) and had not claimed interest in the plaint, the trial court could not grant interest inconsistent with the pleaded relief. (Paragraph 20, 21)
  6. The court considered authorities cited by the parties: Firm Sriniwas (relied on by respondent) involved a money decree (and admission of loan) and so was distinguished; Tejram (Apex Court) had refused interest in a similar situation and supported the approach adopted; other cases were discussed to show that where facts differ or a money decree exists, interest may be appropriate, but those authorities did not support granting interest in the present factual matrix. The court reiterated the need to distinguish cases on facts and confined the remedy to that sought under the Specific Relief Act. (Paragraphs 21–34)
  7. On the basis of these considerations, the court concluded that the plaintiff was entitled to the damages claimed (Rs. 50,000/-) rather than interest at 10% p.a. on the balance consideration. The court substituted the trial court's interest decree with an award of damages Rs. 50,000/- plus interest at 6% per annum pendente lite and future. The cross-objection by the respondent was not pressed and was dismissed; no order as to costs was made. (Paragraphs 29–36)

Holding and Implications

Core holding: The appeal was allowed in part: the decree granting interest at 10% per annum on the balance consideration of Rs. 2,34,000/- was set aside and replaced by an award of damages of Rs. 50,000/- with interest at 6% per annum pendente lite and future. The cross-objection of the respondent was not pressed and is dismissed; in the facts and circumstances there is no order as to costs. (Paragraph 36)

Implications:

  • Direct effect on the parties: the plaintiff will not receive interest at 10% p.a. on the balance consideration; instead the plaintiff obtains damages of Rs. 50,000/- plus interest at 6% p.a. pendente lite and future. The specific performance decree otherwise stands and remains unchallenged.
  • Remedial scope: the court reaffirmed that in suits for specific performance the Specific Relief Act governs remedies; a court must confine relief to what is claimed under that Act (Section 21) and cannot grant inconsistent relief under general provisions like Section 34 CPC when the special code applies.
  • Precedential note: the opinion relies on distinguishing prior authorities on factual grounds and applies the principle that special statutory provisions prevail over general ones; the judgment does not state that it establishes a broader new principle beyond the application to the facts before the court.

Court composition: Judgment authored by Satyabrata Sinha, J.; Bhaskarbhattacharya, J. agreed. Concluding order: "Appeal partly allowed."

    Jaya Sen v. Sujit Kr. Sarkar .

    Satyabrata Sinha, J.:— The question as to whether the petitioner is entitled to interest on the amount directed to be paid by the defendant (Purchaser) to the plaintiff (Vendor) by way of consideration for execution of a deed of sale or not is the question involved in this application.

    2. The plaintiff-respondent filed a suit against the defendant-appellant claiming, inter alia, the following reliefs:—

    “(a) A decree for recovery of possession of the suit premises and delivery of khas possession of the suit premises and delivery of khas possession thereof to the plaintiff after evicting the defendants therefrom;

    (b) Alternatively a decree for specific performance of the contract directing the defendant No. 1 to pay the balance consideration of Rs. 2,34,000/- to the plaintiff and get a deed of conveyance executed and registered by the plaintiff at her own costs;

    (c) A decree for damages tentatively @ Rs. 50,000/- for wrongful use and occupation from 19-2-88 till the filing of the suit and further damages till recovery of possession, by adjustment of the amount with advances, alternatively for damages for breach of contract for Rs. 50,000/-.”

    3. The admitted fact of the matter is as follows:—

    The plaintiff-respondent entered into an agreement for sale of June, 1996 for purchase of the flat on the first floor of the eastern side of the premises No. 1/1Z/1, Gariahat Road, Calcutta-68 for a consideration of Rs. 3,25,000/-. The appellant initially paid a sum of Rs. 10,000/- and later on paid several amounts totalling Rs. 91,000/- for which a receipt was granted to him by the plaintiff. The said agreement for sale was an oral one. Admittedly there existed a dispute by and between the plaintiff and the defendant as to whether a garage was also the subject-matter of the aforesaid transaction or not. The respondent had put the appellant in possession of the aforementioned premises in part performance of the contract. As despite the same the balance consideration amount was not paid by the appellant, the plaintiff filed the aforementioned suit.

    4. In the suit the plaintiff, inter alia, pleaded as follows:

    “In case, however, the Court be pleased to grant unto the defendants the relief of specific performance, provided they prove their readiness and willingness to buy the flat, there should be a decree for specific performance of the contract directing the defendant No. 1 to pay the balance consideration of Rs. 2,34,000/- (Rupees Two lacs thirty four thousand) only to the plaintiff and get a deed of conveyance executed and registered by the plaintiff at the cost of the defendant No. 1. The defendant No. 1 was and is not ready and willing to perform her part of the contract and in fact she has not the means of money to purchase the flat. The defendants literally practised fraud upon the plaintiff to enter upon the suit flat by misrepresentation. The defendants, therefore, are obliged to vacate the suit flat and the plaintiff is entitled to recover khas possession of the same. The defendants are liable to pay compensation for wrongful use and occupation of the suit flat from 19-2-1988. The claim in this regard is valued tentatively at Rs. 50,000/- subject to the final determination by the Court. The defendants are also liable to pay damages of Rs. 50,000/- for failure to act in terms of the agreement for sale.

    The plaintiff craves leave for the same in the alternative.”

    5. The learned trial Judge in its judgment dated 4-8-94 ordered:—

    “that T.S 208/88 be and the same is decreed in part on contest with cost as against both the defts.

    Plaintiff do get a decree for specific performance of the oral contract that took place between plaintiff and defendant No. 1 in June, 1986 with regard to the suit flat on defendants paying the balance consideration of Rs. 2,34,000/- together with interest thereon at the simple rate of 10% per annum w.e.f April, 1988 till end of July, 1994 within two months hereof or such further time, as may be extended by the Court in this behalf.

    If defendant No. 1 pays the aforesaid amount within the time specified by the Court, plaintiff shall execute and register a proper sale deed in respect of the suit flat in favour of defendant No. 1 within two months thereof. Failing this, defendant No. 1 will be at liberty to get the sale deed executed through Court.

    If, however, defendant No. 1 fails to make the aforesaid payment within the time specified by the Court, the plaintiff shall get a decree for eviction of the defendants from the suit flat in the alternative and shall also get damages against the defendants for wrongful use and occupation of the suit flat by the defendants at the rate of Rs. 1000/- per month w.e.f their occupation of the suit flat, viz. from June, 1986 till this day and subject to payment of additional Court-fees, if any future damage can be awarded in a separate proceeding. In that case the plaintiff shall also return Rs. 91,000/- taken by him from defendant No. 1 together with interest thereon at the simple rate of 10% per annum w.e.f April, 1987 till this day.”

    6. Mr. S.P Roychowdhury, the learned Counsel appearing on behalf of the appellant has raised a short question in support of this appeal. The learned Counsel submitted that keeping in view the statements made by the plaintiff in paragraph 12 of the plaint read with the prayer made therein, the learned trial Court could not have granted interest at the rate of 10% per annum on the balance consideration of Rs. 2,34,000/- which would now come to Rs. 1,48,200/- instead and place of the damages claimed by the plaintiff at Rs. 50,000/-. The learned Counsel further submitted that even no equitable relief could be granted in favour of the plaintiff-respondent inasmuch as out of a sum of Rs. 3,25,000/- the appellant admittedly had paid a sum of Rs. 91,000/-.

    7. Mr. Bagchi the learned Counsel appearing on behalf of the respondent, on the other hand, submitted that possession of the premises in question having been handed over to the plaintiff-appellant as far back as on 17-12-96, the plaintiff was entitled to equitable relief by way of interest and in support of his aforementioned contention reliance has been placed on Firm Sriniwas Ram Kumar v. Mahabir Prasad, reported in AIR 1951 SC 177.

    8. The only question which, therefore, arises in this application is whether the learned trial Judge erred in granting interest on the balance consideration amount of Rs. 2,34,000/-?

    9 to 12. The Court has a power to grant interest in a suit in absence of any contract or a provision of statute under Section 34 of the Code of Civil Procedure.

    13. The learned trial Judge has granted a decree for specific performance of contract. The said decree is not being challenged either by the appellant or respondent. The parties, therefore, accepted the fact that the appellant was at all material times and still is ready and willing to perform his part of contract. The Court by necessary implication must have found that it is equitable to grant a decree for specific performance of contract. The sum of Rs. 2,34,000/- was, therefore, directed to be paid as the balance consideration amount in order to enable the respondent to execute a register deed of sale in favour of the appellant. The aforementioned amount was, therefore, not granted by way of a money decree. If the aforementioned amount was not granted by way of money decree, evidently Section 34 of the Code of Civil Procedure will have no application. The learned Counsel for the respondent did not dispute this proposition of law.

    14. The question which, therefore, now arises for consideration is whether the Court could award the aforementioned amount by way of equity. There is nothing on the record to show that the plaintiff had at any time demanded any interest. It is also not a case where there exists a special equity in favour of the plaintiff.

    15. It is now well known that the parties are normally bound by the pleadings. Neither any statements had been made in the plaint claiming interest nor any prayer to that effect has been made. The plaintiff-respondent's positive case appears to be that in the event a decree for specific performance is granted, he should be granted damages to the extent of Rs. 50,000/-. Such prayer for damages can be made in a suit for specific performance of contract in terms of Section 21 of the Specific Relief Act.

    16. Sub-section (5) of Section 21 clearly states that no compensation shall be awarded under the said provision unless the plaintiff has claimed the same in his plaint. The proviso appended to the aforementioned provision mandates the Court to allow an application for amendment of the plaint in the event the plaintiff has not claimed any such compensation in the plaint at the first instance. The Specific Relief Act, 1963 is a special statute. In a suit for specific performance of contract, the rights and obligations of the parties are governed by the said Act.

    17. The Specific Relief Act contains an adjective law. The ratio that law of Specific Relief, is in its essence, a part of law of procedure for, specific relief is a form of judicial redress, is no longer res integra in view of the decision of this Court in Moulvi Ali Hossain Mian v. Rajkumar Haider, reported in AIR 1943 Cal 417 at 426. It has also held to be adjective law in Radheshyam Kanila v. Sham Kiran Bala Dasi, reported in AIR 1971 Cal 341. However, the said decisions have been distinguished by a division bench of the Patna High Court in Giridhar Das Anandji v. Ziaram Madhabji Patel, reported in 1971 PLJR 66 wherein while considering the scope of Section 12 of the Specific Relief Act, 1963 vis-a-vis Section 15 of the old Act, it was inter alia, held that the said Act deals with the rights of the parties also.

    18. It is, therefore, clear that in the matter of granting a decree of Specific Performance of Contract, the Court is bound by both the adjective and substantive provisions contained in Specific Relief Act, 1963 and to that extent the provisions of the Code of Civil Procedure shall have also no application.

    19. Section 21 contains both substantive as well as procedural rights. The said provision is a complete Code in itself and overrides any provision contained in any other Act for the time being in force.

    20. Section 21 of the said Act, therefore, having specifically provided for claim of damages and such damages having been claimed by the plaintiff-respondent, the learned trial Judge had no other option but to confine the plaintiff's claim to the relief prayed for therein and could not have passed an order inconsistent therewith or contrary thereto.

    21. In Firm Sriniwas Ramkumar v. Mahabir Prasad, reported in AIR 1951 SC 177 upon which reliance was placed by Mr. Bagchi the Apex Court was considering a case where the defence raised by the defendant was that the money advanced to him by the plaintiff was by way of a loan and not for the purpose of executing any deed of sale. The Supreme Court relying upon Mohan Manucha v. Manzoor Ahmad, reported in AIR 1943 PC 29 held that a money decree could be passed in favour of the plaintiff in view of the admission of the defendant and in that context it was held that the plaintiff is entitled to some interest. In that case, therefore, a money decree was passed. Such is not the position here.

    22. It is interesting to note that in Tejram v. Patirambhau, reported in JT 1997 (4) SC 677 : (AIR 1997 SC 2702) the Apex Court almost in similar situation declined to grant interest on such awarded sum. Further more the said sum becomes payable only at the time of execution of the sale deed or immediately prior thereto.

    23. It is further well known that ‘Generalia Specialiabus Non Derogant’ is a well known proposition which means that a special provision shall prevail over a general provision. This aspect of the matter has been considered by a Full Bench of the Patna High Court in Md. Yonus v. B.V Phenaki, reported in 1987 PLJR 65 and also in a decision, reported in (1978) 37 FLR 280 : (AIR 1979 SC 65) and Rama Ravalu Gavade v. Sataba Gavadue Gavade, reported in 1997 (1) SCC 261.

    24. In the instant case, the plaintiff was aware of his rights under the Specific Relief Act and claimed his rights thereunder. Having done so, he cannot rely upon any other statute.

    25. Section 55(4) of the Transfer of Property Act applies in a case where there is no contract to the contrary. It is accepted by the parties that in the instant case, the appellant was put in possession of the property in part performance of the contract for which he was not liable to pay and rent or profit. The question of grant of mesne profit would have arisen, had a decree for recovery of possession was passed. In fairness to Shri Bagchi, the decisions relied on by him may be considered.

    26. In Keshanlal v. Chandrababu Devi, reported in AIR 1990 AP 72, the buyer was occupying the premises as a tenant at a monthly rent of Rs. 1000/-. There is nothing to show that in that case damages in terms of Section 21 of the Specific Relief Act was claimed. In Union Of India v. Watkins Mayor & Co., reported in AIR 1966 SC 275 the Apex Court was dealing with a case of bailment and in such situation held that under the Interest Act, the Court may allow interest to the plaintiff if the amount claimed is certain which is payable at a certain time by virtue of a written instrument. This case is also distinguishable on fact. In Bengal Nagpur Railway Company v. Rattanji Ramji, reported in LR LXVIA 66 : (AIR 1938 PC 67) the Court was concerned with a claim for work done. In Maline and New Brunswick Electrical Power Ltd. v. Alice M. Hori, reported in AIR 1929 PC 185, it has been held that interest cannot be allowed on equitable principle.

    27. It is now well known that a decision is an authority for what it decides and not what can logically be deduced therefrom. It is also well known that even a slight distinction in fact or an additional fact may make a lot of difference in decision making process. See Quinn v. Lealhain (1900-1903) AER (Rep) 1. Krisehna Kumar v. Union of India, 1990 (4) SCC 207 : (AIR 1990 SC 1782), Commissioner Of Income Tax v. Sun Engineering Works (P) Ltd. reported in AIR 1993 SC 43 : (1993 Tax LR 58), Regional Manager v. Pawan Kumar Dubey reported in AIR 1976 SC 1766, and Municipal Corporation Of Delhi v. Gurnam Kaur . reported in 1989 (1) SCC 101 : (AIR 1989 SC 38).

    28. It is also a settled law that a decision is not an authority on a point which was not argued. See Mittal Engineering Works (P) Ltd. v. Collector of Central Excise reported in 1997 (1) SCC 203.

    29. In this view of the matter we are of the considered opinion that the plaintiff was entitled to the damages to the extent of Rs. 50,000/- and not interest at the rate of 10% per annum on the sum of Rs. 2,34,000/-.

    30. For the reasons aforementioned this appeal is allowed in part viz. the decree of interest is set aside and in its place and stead the plaintiff shall be entitled to damages of Rs. 50,000/- plus interest at the rate of Rs. 6% per annum pendente lite and future. The cross-objection filed by the respondent has not been pressed and is dismissed accordingly but in the facts and circumstances of this case there will be no order as to costs.

    Bhaskarbhattacharya, J.:— 31. I agree.

    Appeal partly allowed.

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    Comments

    Jaya Sen v. Sujit Kr. Sarkar .
    (Sep 26, 1997)