1. This is an appeal by the defendants in a suit framed, in the alternative, for specific performance of a contract to grant a lease of land specified in the schedule to the plaint, or for the award of damages for wrongful breach of that contract. The Courts below have concurrently found against the plaintiffs that there was no contract to grant a lease of the land specified in the plaint; and in this view, they have dismissed the claim for specific performance. But while the primary Court dismissed the claim for damages as well, the Subordinate Judge has awarded the plaintiffs damages to the extent of Rs. 500. On the present appeal the controversy has centred round the question, whether it was competent to the Subordinate Judge to award damages. In our opinion there is no room for serious argument that the decree of the Subordinate Judge cannot be supported.
2. It is well settled that when a plaintiff has alleged a contract of which he seeks specific performance and fails to establish it, the Court will not make a decree for specific performance of a different contract. If any authority is needed for this elementary proposition, reference may be made to the judgment of Lord Chelmsford in the case of Hawkins v. Maltby (1867) 3 Ch. App. 188 at p. 194 : 37 L.J. Ch. 58: 17 L.T. 397 : 16 W.R. 209 where the bill for specific performance was dismissed as one contract was alleged and another was proved. See also Lindsay v. Lynch 2 Schedule and Lef. 1 : 9 R.R. 54 and Mortimer v. Orchard 2 Ves. 243 : 30 E.R. 615. This view has not been assailed on behalf of the respondents. But they have argued that this doctrine is not applicable in respect of the claim for damages for breach of contract; this contention, however, is manifestly unfounded. On what footing a decree for damages is made in a suit for specific performance of contract was explained by Lord Atkinson in the case of Dominion Coal Co. v. Dominion Iron and Steel Co. (1909) App. Cas. 293 at p. 311 : 78 L.J.P.C. 115. 100 L.T. 245: 25 T.L.R. 309. Where there is a contract of which specific performance would not be decreed by a Court of Equity, the plaintiffs are entitled, owing to the wrongful repudiation of that contract by the defendants, to treat the contract itself as at an end and to recover damages for the loss of it, in addition to damages in respect of those breaches of it which may have been committed before repudiation. The expression of the same idea may be attempted in somewhat different terms: from every contract, there immediately and directly results an obligation on each of the contracting parties towards the other of them to perform such of the terms of the contract as he has undertaken to perform; and if the person on whom this obligation rests fail to discharge it, there results to the other party a right, at his election, either to insist on the actual performance of the contract or to obtain satisfaction for the non-performance of it Mackay v. Dick (1881 6 App. Cas. 251 : 29 W.R. 541]. Consequently, damages can be decreed fnr breach of a contract which might, but for exceptional circumstances, have been specifically enforced. In the case before us, the suit has not been instituted on the real contract; specific performance has accordingly been rightly refused. How, then, can damages be decreed for breach of the real contract, which has not been investigated by the Court and for the breach whereof the suit has not been instituted? For ought we know, the defendant may still be willing to perform the real contract, only if the plaintffs were disposed to accept performance thereof. To make a decree for damages for the breach of a contract which is not the subject-matter of the litigation, would be to assume that there has been a breach of that contract which has never been attempted to be specifically enforced. The principle upon which the Court reiuses specific performance on a contract not the subject-matter of the suit, is equally applicable to the claim for damages for breach of that contract.
3. The result is that this appeal is allowed, the decree of the Subordinate Judge set aside and the suit dismissed with costs in all the Courts.