SHAMSU SUHARA BEEVIversusG. ALEX AND ANR.

                     SHAMSU SUHARA BEEVI                                  A
                                   V.

                         G. ALEX AND ANR.

                          AUGUST 20, 2004
                                                                          B
              [ASHOK BHAN AND S.H. KAPADIA, JJ.)

     Specific Relief Act, 1963; Ss. 21 and 28(3)/Jndian Contract Act,
1872:

     Agreement of sale of land-Vendorjailed to execute within time
                                                                          c
period prescribed-Suit for specific performance filed by Vendee-Decreed
by Trial Court-Balance of the sale consideration deposited by Vendee in
the Court-Interim applications for grant of interest on the amount and
to measure the land before registration of sale deed allowed by trial
Court-Affirmed by High Court-On appeal, Held : Though Courts have D
discretionary powers to award damages without any pleading to that effect,
they cannot overlook the question of hardship caused to opposite party--
Jn no case should compensation be decreed unless it is claimed since it
is mandatory requirement under Section 21 of the Act-Vendee has neither
claimed compensation in the original petition nor claimed it by seeking E
amendment at any stage of the proceedings-High Court erred in granting
compensation without any prayer to that effect-However, Vendee could
withdraw the amount deposited in excess ofthe cost but it cannot be treated
as compensation-Vendor could also withdraw the balance amount with
interest thereon.                                                           F

      Appellant-Vendor entered into an agreement of sale of land with
the respondent-Vendee and made payment of earnest money towards
the sale consideration. Since Vendor fialed to execute the sale deed,
Vendees filed a suit for specific performance of the agreement. Trial G
Court decreed the suit directing the Vendee to deposit balance of the·
sale consideration in the Court and also directed the Vendor to cause
registration of the sale deed within the specified time period. In
compliance thereof, Vendee deposited the amount, which was kept in
a Nationalized Bank.
                                                                          H
                                   653
    654                 SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R.

A       In the meantime, Vendees filed Interim Applications seeking
  permission to measure the suit property, to obtain no objection
  certificate from Income Tax Office and also for claiming interest @
  12% on the amount so deposited by them from the date of deposit till
  registration of the sale deed. Trial Court allowed both the I.As.
B Aggrieved, Vendor filed a Revision petition, which was dismissed by
  the High Court holding that respondent-Vendees were entitled to get
  compensation as per provisions of Section 21 of the Specific Relief Act.
  Hence the present appeal.

C         It was contended for the appellant-Vendor that since the
    respondent-Vendees had failed to claim compensation either in the
    original plaint or by amendment it at any stage during its pendency
    in terms of Section 21(5) of the Act, the respondents were not entitled
                       I
    to any compensation for breach of agreement of sale even if there was
D a breach.

          Disposing of the appeal, the Court

       .HELD : 1.1. While it is proper that the Court should have full
  discretion to award damages in any case it thinks fit, one cannot, on
E the other hand, overlook the question of unfairness and hardship to
  the defendant, if a decree is passed against him without proper
  pleading. The Law Commisshm has also recommended that in no case
  should compensation be decreed unless it is tlaimed by a proper
  pleading. However, it should be open to the plaintiff to have an
F amendment, at any stage of the proceeding, in order to introduce a
  prayer for compensation, whether in lieu of or in addition to specific
  performanee. Legislature accepted the suggestions made by the law
  Commission of India and accepted the view expressed by the High
  Court of Madras in the case of Somasundaram v. Chidambaram* to that
G effect; sub-sections (4) and (5) of Section 21 of the Specific Relief Act
  resolve certain divergence of opinion in the High Courts on the aspect
  of jurisdiction with regard to award of compensation. (662-E-F-G-H)

          *Somasundaram v. Chidambaram, AIR (1951) Mad. 282, referred
H to.
                SHAMSU SUHARA BEEVI v. G. ALEX                      655

     9th Report of Law Commission, (1958) pp. 18-19, referred to.         A

     1.2. In the instant case, the respondents did not claim
compensation for the breach of agreement of sale either in addition to
or in substitution of the performance of the agreement in the original
plaint, nor did they amend the plaint. Sub-section (5) of Section 21 of B
the Act emphatically provides that no compensation shall be awarded
unless the rclieffor compensation has been claimed either in the plaint
or included later on by amending the plaint at any stage of the
proceedings. [663-A-B]

      2.1. In the applications filed by the respondents under Section C
28(3) of the Act, permission seeking to amend the plaint to include the
relief of compensation for breach of the contract in addition to the
specific performance has not been made. The High Court came to the
conclusion that Section 28 of the Act would not be applicable to the
facts of the case but granted the relief under Section 21 of the Act. The D
High Court has clearly erred in granting the compensation in addition
to the relief of specific performance in the absence of prayer made to
that effect either in the plaint or amending the same at any later stage
of the proceedings. Grant of such a relief in the teeth of express
provisions of the statute to the contrary is not permissible. On E
equitable consideration also Court cannot ignore or overlook the
provisions of the statute. Equity must yield to law. [663-C-D-E-F]

     Purushothaman v. Thulasi, (1995) 1 KLT 40, referred to.

     2.2. Of course, respondents are entitled to recover the amount of
                                                                          F
cost which has been decreed in the main suit but the same cannot form
part of compensation by way of additional relief to the specific
performance of the agreement of sale. Hence, the judgments of the
Courts below are set aside. Applications filed by the respondents under
Section 28(3) of the Act are dismissed. The appellants would be entitled G
to withdraw the amount deposited in the Court/Bank except the excess
amount deposited by the plaintiff/Respondents towards the sale
consideration of suit land along with accrued interest, if not already
withdraw. In case the respondents have withdrawn the deposited
amount from the Bank in pursuance to the earlier direction of the trial H
    656                   SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.              •
A Court, they shall redeposit the amount or pay the same to the appellant
    along with interest @ 6% after deducing the excess amount deposited
    by them within a period of 3 months from the date or withdrawal till
    its re-deposit. Failure to deposit the amount within the prescribed
    period would attract interest@ 12% from the date of withdrawal till
B   its redeposit/re-payament. [664-B-C-D-E]

         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3729 of
    2000.

       From the Judgment and Order dated 24.1.2000 of the Karala High
C Court in C.R.P. No. 2267 of 1999.
          E.M.S. Anam for the Appellant.

          V.J. Francis for the Respondents.

D         The Judgment of the Court was delivered by

          BHAN, J. : The defendant/appellant (hereinafter referred to as "the
    appellant") entered into an agreement of sale with the plaintiff/respondents
    (hereinafter referred to as "the respondents'') on 20.10.1994 for the sale
E   of land measuring 15.125 cents owned by her at the rate of Rs. 3, 15,000
    per cent for a total consideration of Rs. 44,66,385. The agreement was to
    be executed within a period of 3 months from the date of the execution
    of the agreement of sale. A sum of Rs. 10 Lakhs was paid by the
    respondents as advance/earnest money towards the sale consideration. As
F   the appellant failed to execute the sale deed the respondent on 26.4.1995
    filed a suit being O.S. No. 458 of 1995 in the Court of III Additional Sub-
    Judge, Ernakulam for specific performance of the agreement dated
    20.10.1994. Appellant filed the written statement. The suit was decreed on
    24.7.1997 in the following terms:

G            "!. That the defendants shall cause the plaint schedule property
             be sold in terms of Ext. A4 sale agreement dated 20. l 0.94 within
             three months from the plaintiffs depositing the balance sale
             consideration with the court after causing the property to be
             measured and satisfying the plaintiff about the measurements and
H            complying the requirements under the Indian Income Tax rules
          SHAMSU SUHARA BEEVI v. G. ALEX [BHAN, J.]                    657

        and Act obtaining necessary sanction and permission and certificate A
        from the authorities under the Income Tax Act. It is made clear
        that it shall not be the duty of the plaintiff to inform the defendant
        about the deposit of the balance sale consideration with the court
        and it is for the defendant to make enquiries with the office and
        ascertain as to whether the balance sale consideration was deposited B
        by the plaintiffs with the court.

        2. The plaintiff shall deposit the balance sale consideration with
        the court within three months from the date of this decree. The
        balance sale consideration shall be paid for the entire area shown
        in the plaint and if in any case it is found by measuring the C
        property that the actual extent is short of the area shown in the
        plaint the plaintiff shall get back the amount paid in excess by
        them by taking into consideration of the difference if any found
        in the measurements.
                                                                              D
        3. If defendant fails to cause the registration of the sale deed as
        aforesaid within the time mentioned above the plaintiffs are at
        their liberty to move the court in execution for causing the sale
        deed executed and then it shall be the duty of the defendant to
        obtain necessary permission and sanction and certificate from the E
        Income Tax authorities for the purpose of the sale in compliance
        with the requirements of the Indian Income tax Act and rules and
        shall take steps to get the property measured and the actual extent
        ascertained.

        4. The defendant shall pay the cost of the plaintiffs in the suit."   F
This judgment became final as the appellant did not contest the case by
filing further appeal.

     Respondents in terms of the decree deposited the sum of Rs.
34,66,385 in the Court as balance of the sale consideration on 23.10.1997 G
within the period of 3 months. The Court directed that the amount
deposited to be kept in a nationalised Bank and accordingly the amount
was deposited in the Indian Bank, Mattancherry Branch. Respondents
moved IA No. 5187 of I 997 for permission to measure the suit property
to ascertain the exact extent of land and a direction to the appellant to H
    658                  SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A obtain "no objection certificate" from the Department of Income Tax so
    that sale deed could be executed. On 17.2.1998 respondents moved another
    application, IA No. 851 of 1998, under Section 28(3) of the Specific Relief
    Act, 1963 (hereinafter referred to as "the Act") claiming interest @ 12%
    on Rs. 44,66,385 (sale consideration) from the date of deposit of the
B   amount till the registration of the sale deed and delivery of possession of
    the suit property. The sale deed was executed and registered by the
    appellant or. 17 .8.1999. It was found that clearance from the Department
    oflncome Tax was not required. Soon after the registration of the sale deed
    the respondents took possession of the property.

C         The trial Court disposed of IA Nos. 5187 of 1997 and 851 of 1998
    by a common order dated 15.10.1999. Both the !As. were allowed. The
    actual extent of land held by the appellant worked out to be 14.179 cent
    instead of 15.125 cents mentioned in the agreement of sale. It was held
    that the respondents were entitled to recover the sum of Rs. 12,77,870 by
D   way of compensation which included the costs awarded in the suit, excess
    amount deposited and interest by way of compensation on the sale
    consideration. Respondents were permitted to recover the amount of Rs ..
    12,77,780 from the amount lying deposited in the Bank. The break up of
    the sum of Rs. 12,77,780 under various heads for payment to the
E   respondents was worked out as under :

          I.   Costs decreed to the pldintiffs             Rs. 3,09,093.00

          2.   Survey Expenses                             Rs.     2,650.00

          3.   Excess amount deposited by
F              The plaintiff                               Rs.    16,065.00

          4.   Interest on excess amount of
               Rs.16,065 from 2~.10.1997 To
               17.8.1999 at 15%                            Rs.     4,371.00
G         5.   Interest on Rs. 44,50,320 from
               23.10.97 date of deposit till 1.8.1999
               at 12% towards compensation                 Rs. 9,45,691.00

                                                           Rs. 12,77,870.00
H
           SHAMSU SUHARA BEEVI v. G. ALEX [BHAN, J.]                659

     Appellant being aggrieved with the order passed by the Trial Court A
preferred CRP No. 2267 of 1999 in the High Court.

      The learned Single Judge before whom revision petition came up for
hearing agreed wich the contention raised by the appellant that Section 28
of the Act invoked by the respondents would not be applicable to the facts B
of the case as Section 28 applies to cases where rescission of the contract
takes place with regard to contract for sale or lease of immovable property.
Before us as well it was not argued that Section 28 of the act would be
applicable in the facts of the present case. However, learned Single Judge
invoking Section 21 of the Act held that the respondents would be entitled C
to get compensation. Learned Single Judge placed reliance upon the
judgment of the Single Judge of the High Court in Purushothaman v.
Thulasi, (1995) I KLT 40. It was observed that in Prurshothaman (supra)
case as well the plaintiff had not amended his plaint. Order of the Trial
Court was modified as to the rate of interest payable. The interest of 15%
granted on the excess amount of Rs. 16,065 from 23.10.1997 to 17.8.1999 D
by the Trial Court was reduced to 12% and the interest of 12% on Rs.
44,50,320 from 23.10.1997 till 1.8.1999 as compensation was reduced to
6%. The Court below was directed to disburse the sum lying deposited with
the Indian Bank to the parties in accordance with the judgment rendered
by the High Court. Aggrieved against the judgment of the High Court the E
 present appeal has been filed by the appellant.

      Counsel for the appellant strenuously contended that the High Court
has misunderstood the scope of Section 21 of the Act. According to him,
compensation for breach of agreement of sale either in addition to or in F
substitution of the performance of the agreement cannot be granted unless
the plaintiff claims such compensation in his plaint. Since the respondents
had failed to claim the compensation either in the original plaint or by
amending the plaint at a subsequent stage during the pendency of the said
proceedings as provided under Section 21 (5) the respondents were not
entitled to any compensation for breach of agreement of sale even if there G
was such a breach. It was further contended that the learned Single Judge
committed a factual error in observing that in Purushothaman (supra) the
plaint had not been amended in terms of Section 21(5) of the Act.
According to him, in Purushothaman (supra) the plaint had been amended
to claim the relief of compensation. That the sum of Rs. 3,09,093 towards H
    660                   SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A the cost in the suit could not be included while working the amount of
    compensation under sub-section (5) of Section 21. Such costs could be
    recovered by the respondents by filing an execution application for
    recovery of the cost and the same could not be recovered as a part of
    compensation payable in addition or in substitution of the relief of specific
B   performance. Counsel appearing for the respondents controverted the
    submission made by the counsel for the appellant and supported the
    findings recorded by the High Court.

          Section 21 of the Act reads :

c            "21. Power to award compensation in certain cases : (I) 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.

D            (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.
E
             (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.
F
             (4) In determining the amount of any compensation awarded
             under the section, the Court shall be guided by the principles
             specified in Section 73 of the Indian Contract Act, 1872 (9 of
             1872).
G
             (5) No compensatior1 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
H            compensation in the plaint the Court shall, at any stage of the
           SHAMSU SUHARA BEEVI v. G. ALEX [BHAN, J.]                  661

        proceeding, allow him to amend the plaint, on such terms as may A
        be just, for including a claim for such compensation.

        Explanation:- The circumstance that the contract has become
        incapable of specific performance does ot preclude the Court from
        exercising the jurisdiction conferred by this section."
                                                                            B
      This Section corresponds to Section 19 of the Specific Relief Act,
1877. Sub-section (1) re-enacts the law as contained in clause (1) of the
repealed Section 19 with suitable variations. The words "any person suing"
have been substituted by the words "in a suit". The word "claim" has been C
substituted for the words "ask for" and the word "plaintiff' has been
inserted before the words "perfonnance of a contract". Sub-clause (2)
reproduces verbatim the language of Clause 2 of the repealed Section 19
with the alteration that the word "such" has been prefixed before the word
"compensation". Sub-section (3) corresponds to Clause (3) of the Section
19 of the repealed Act. There is no modification in this sub-section. Clause D
(4) of section 19 of repealed Act has been substituted by the new sub-
section (4) of Section 21. It provides the mode and manner of determining
the amount of compensation under this Section. It lays down the principle
which would govern the determination of the award of compensation and
provides that the Court shall be guided by the principles specified in E
Section 73 of the Contract Act, 1872 while determining the amount of
compensation. Sub-section (5) of this Section is new. It provides that the
compensation under this Section shall not be awarded unless the plainti"'f
has claimed it in the plaint. An important rider has been attached to this
sub-clause which is to the effect that the Court shall, at any stage of the F
proceedings, pennit the amendment of the plaint to enable the plaintiff to
include his claim for compensation on such tenns, as the Court may deem
fit. Explanation to this sub-section re-enacts the language of the old
explanation without any change. Illustrations under Section 19 have been
deleted.
                                                                            G
     Reasons for recommending the changes have been given by the Law
Commission of India in its Ninth Report on the Specific Relief Act, 1877.
Since in the present case, we are considering whether the compensation
could be awarded in a suit for specific performance without making a
claim of compensation either in the original plaint or by amending the H
    662                  SUPREME COURT REPORTS (2004] SUPP. 3 S.C.I\..

A plaint during the course of the proceedings, we would refer to the
    suggestions made by the Law Commission for the enactment of such-
    clause (5) only.

          Sub-sections (4) and (5) of section 21 seem to resolve certain
B divergence of opinion in the High Courts on some aspects of jurisdiction
  to the award of compensation. The Law Commission in its 9th Law
  Commission Report dated 19th July, 1958 (pages 18 and 19) observed that
  there has been a difference of judicial opinion as to whether the Court has
  the power to award compensation in a suit for Specific Performance, where
C the plaintifhas not specifically prayed for it in the plaint. The Lahore High
  Court has taken the view in A.P. Pratinidhi Sabha v. Lahori, (1924) 5 Lah.
  509, that the Court has the power to award damages ' whether in substitution
  for or in addition to specific performance even though the plaintiff has not
  specifically claimed it in the plaint. The Madras High Court took a contrary
  view in Somasundaram v. Chidambaram, AIR (1951) Mad. 282 and held
D that the Court cannot award damages in addition to specific performance
  in the absence of a specific claim for damages and a proper pleading stating
  why the relief of specific performance would be insufficient to satisfy the
  justice of the case and the amount which should be awarded. The Law
  Commission recommended that the view expressed by the High Court of
E Madras appeared to be based on the principle that there should be a proper
  pleading in every case. While it is proper that the Court should have full
  discretion to award damages in any case it thinks fit, one cannot, on the
  other hand, overlook the question of unfairness and hardship to the
  defendant, if a decree is passed against him, without a proper pleading. The
F Commission accordingly recommended that in no case should compensation
  be decreed unless it is claimed by a proper pleading. However, It should
  be open to the plaintiff to have an amendment, at any stage of the
  proceeding, in order to introduce a prayer for compensation, whether in
   lieu of or in addition to specific performance. Legislature accepted the
  suggestions made by the Law Commission of India and accepted the
G view expressed by the High Court of Madras to the effect that the
  Court cannot award compensation in addition to specific performance
   in the absence of a specific claim for damages and a proper pleading
  stating why the relief of specific performance would be insufficient to
  satisfy the justice of the case and the plaintiff would not be entitled to
H compensation.
           SHAMSU SUHARA BEEVI v. G. ALEX [BHAN, J.]                    663

      It is admitted position before us that in the original plaint the A
respondents did not claim compensation for the breach of agreement of sale
either in addition to or in substitution of the performance of the agreement.
Further the respondents did not amend their plaint and ask for compensation
either in addition to or in substitution of the performance of the agreement
of sale. Sub-Section (5) of Section 21 emphatically provides that no B
compensation shall be awarded under section 21 (5) unless the relief for
compensation has been claimed either in the plaint or included later on by
amending the plaint at any stage of the proceedings. The need to file an
execution petition did not arise as the appellant executed the sale deed on
17.8.1999. We have perused the application filed by the respondents. It is
a simple application filed under Section 28(3) of the Act seeking permission C
to ascertain the extent of plaint schedule property by measuring the same
with the help of Village Officer or by deputing an Advocate Commissioner
and directing defendant/appellant to obtain 'no objection certificate' from
the Department oflncome Tax, in addition the respondents prayed that they
be permitted to recover interest @ 12% towards loss of income on the sale D
amount of Rs. 45,66,385 from 23.10.1997, i.e., the date of deposit till
delivery of the possession of the property. Permission seeking to amend
the plaint to include the relief of compensation for breach of the contract
in addition to the specific performance has not been made. The relief was
claimed under Section 28 and not under Section 21 of the Act. The High E
Court came to the conclusion that Section 28 would not be applicable to
the facts of the case but granted the relief under section 21 of the Act. In
our view, the High Court has clearly erred in granting the compensation
under Section 21 in addition to the relief of specific performance in the
absence of prayer made to that effect either in the plaint or amending the F
same at any later stage of the proceedings to include the relief of
compensation in addition to the relief of specific performance. Grant of
such a relief in the teet_h of express provisions of the statute to the contrary
is not permissible. On equitable consideration court cannot ignore or
overlook the provisions of the statute. Equity must yield to law.
                                                                              G
      We have perused the judgment in Purushothaman (supra) carefully.
The High Court in the impugned judgment has committed a factual error
in observing that in that case plaint had not be~n amended. The plaint had
in fact been amended and the relief of mesne profit claimed from the date
of deposit of the balance consideration in addition to the relief of specific H
    664                   SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

A perfonnance of the agreement. A factual error has crept in the impugned
    judgment of the High Court. The learned Single Judge has thus erred in
    placing reliance upon the judgment in Purushothaman (supra).

       The learned Single Judge has also erred in including the amount of
B cost which have been awarded in the main suit towards the amount of
  compensation. Of course, the plaintiff/respondents are entitled to recover
  the amount of cost which has been decreed in the main suit but the same
  cannot forn1 part of compensation by way ofadditional relief to the specific
  perfonnance of the agreement of sale.

c         For the reasons stated above, the judgments of the High Court as well
    as the Trial Court are set aside. Application filed by the respondents under
    Section 28(3) is dismissed. The appellants would be entitled to withdraw
    the amount deposited except the excess amount of Rs. 16,065 deposited
    by the plaintiff/Respondents towards the sale consideration of suit land
D   from the Indian Bank along with accrued interest, if not already withdrawn.
    In case the respondents have withdrawn the deposited amount from the
    Indian Bank in pursuance to the direction issued by the Trial Court then
    they are directed to redeposit the amount or pay the same to the appellant
    along with interest@6% after deducing a sum of Rs. 16,065 within a period
E   of3 months from the date of withdrawal till its re-deposit. Failure to deposit
    the amount within a period of 3 months as directed above, would attract
    interest @12% from the date of withdrawal till its redeposit/re-payment.
    This, however, would not debar the respondents from recovering the costs
    awarded in the suit in accordance with law.

F         Appeal is allowed and disposed of in tenns of the above directions.

    S.K.S.                                                  Appeal disposed of.