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Rajendra Nath Saha Vs. Saraswati Press Ltd. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberSuit No. 1975 of 1946
Judge
Reported inAIR1952Cal78
ActsCode of Civil Procedure (CPC) , 1908 - Order 6, Rule 17; ;Specific Relief Act, 1877 - Section 19; ;Contract Act, 1872 - Section 73
AppellantRajendra Nath Saha
RespondentSaraswati Press Ltd.
Appellant AdvocateI.P. Mukherjee and ;S. Chatterjee, Advs.
Respondent AdvocateH.N. Sanyal and ;Subrata Roy Chaudhury, Advs.
Cases ReferredMama v. Sassoon
Excerpt:
- .....for damages for breach of contract.2. the suit was instituted on or about 17-12-1946. the plaint claims specific performance of an agreement dated 31-7-1946, under which the plff. agreed to sell the deft. premises nos. 3a, 3b & 3/1, maharani swarnamoyee road for a sum of rs. 2,30,000/-. there is no pleading in the plaint for damages for breach of contract but there is a claim for compensation in addition to or in substitution of the claim for specific performance.3. the amendment that the plff. now seeks in his application made on the petition affirmed on 19-6-1950 is to delete the averment of readiness & willingness & to delete the claim for specific performance & to substitute a claim for damages simpliciter for breach of the agreement. the reason put forward for this amendment is.....
Judgment:
ORDER

P.B. Mukharji, J.

1. This is an application for amendment of the plaint. It raises the important question whether a plaint for specific performance of a contract can be converted by amendment into a plaint for damages for breach of contract.

2. The suit was instituted on or about 17-12-1946. The plaint claims specific performance of an agreement dated 31-7-1946, under which the plff. Agreed to sell the deft. premises Nos. 3A, 3B & 3/1, Maharani Swarnamoyee Road for a sum of Rs. 2,30,000/-. There is no pleading in the plaint for damages for breach of contract but there is a claim for compensation in addition to or in substitution of the claim for specific performance.

3. The amendment that the plff. Now seeks in his application made on the petition affirmed on 19-6-1950 is to delete the averment of readiness & willingness & to delete the claim for specific performance & to substitute a claim for damages simpliciter for breach of the agreement. The reason put forward for this amendment is that the property in suit has been requisitioned by the Govt. pending suit with the result that the pltt. Himself can no longer specifically perform the agreement to convey the property.

4. Mr. H.N. Sanyal, learned counsel appearing for the deft, has opposed this application on two grounds. The first ground is that a suit for specific performance cannot be converted into a suit for damages. The second is that the claim for damage is now barred by limitation & therefore in any event such amendment should not be allowed.

5. The first ground of objection raises a question of considerable importable importance. Except by way of obiter the point does not appear to me to be concluded by any decision exactly on the point. It therefore becomes necessary to deal with the question from the first principles.

6. A good deal of the confusion on the subject arises from the fact that in English Law the only legal right which arose under the Common Law when there was non-performance of a contract was a claim for damages by the party injured by such breach. Common Law provided no relief for specific performance in England. Equity therefore had to step in aid of that court & provided that more complete remedy of specific performance where damage was obviously an insufficient & inadequate remedy for the breach.

7. It gradually came to be realised with experience that there were cases where the contract although for specific performance damages were the more adequate remedy & it was expedient that in such cases the court should not be compelled in England to send the plff. to the Common Law Courts but should itself have the power to award damages. This was met in 1858 by Lord Cairn's Act. Section 2 of Lord Cairn's Act provided:

'in all cases in which the Court of Chancery has jurisdiction to entertain an application for ?specific performance of any covenant, contract or agreement it shall be lawful for the same Court if it shall think fit to award damages to the party injured either in addition to or in substitution for such specific performance & such damages may be assessed as the Court shall direct.'

8. The difficulties did not end with the passing of the Lord Cairn's Act. The question was soon to arise & it did arise whether this new power in Court of Chancery to award damages in a claim for specific performance was merely an ancillary or alternative power in aid or substitution of specific performance, so that this new power granted under Lord Cairn's Act did not help in the case in which the plff. could not proceed with or prosecute his basic claim for specific performance. The point found favour with Lord Selborne & Brett L. J. in 'Hipgrave v. Case', (1885) 28 Ch. D. 356 where it was held that the plff. having by the form of his pleadings & by his conduct elected to put his claim as one of specific performance with an alternative claim for damages in case the Court felt unable to give effect to his prayer for' specific performance, could not be allowed to change the nature of his action by turning it into an ordinary action for damages at Common Law. The same view was taken by Chitty J. in 'Lavery v. Pursell', (1888) 39 Ch. D. 508 at p. 519. That is now taken by Mr. Sanyal as the foundation of his objection to the present application before me for amendment.

9. Before the fusion of law & equity by the Judicature Act of 1877 in England a plff's claim for specific performance had to be before the Court of Equity which did not award damages for breach of contract. As a result a bill for specific performance in the Court of Equity could not be converted into an action for damages for breach of contract at Common Law. This procedural dichotomy soon developed into a legal theory that a claim for specific performance could not be converted into a claim for damages.

10. Even after the fusion this theory survived. The justification for its survival was put on the juristic ground that when a party sued in Common Law for a breach of contract he elected to treat the contract as at an end discharging him from its obligation while in a suit for specific performance he not only treated but was required by equity to treat the contract as still subsisting & that he was ready & willing to perform the same. Readiness & willingness therefore were regarded as an integral part of the very foundation of his claim for specific performance. This legal dialectic developed a catechism that bade fair to become a law & Code.

11. It appears to me that the technicality of the form & procedure which are to be. found in the history of the evolution of Law and Equity in England need not conclude the question in India. Although the Specific Relief Act of 1877 in India maintains a good many of the English principles of proceedings in equity for specific performance, it is nonetheless a fact that in India both legal & equitable reliefs could be had in one set of Court unlike in England before the Judicature Act. The change effected by the Judicature Act however was one of procedure only because it enabled every Division of the High Court in London to give both legal & equitable remedy but such a rusion did not alter the consideration or effect of a claim framed under Section 2 of Lord Cairn's Act nor the principles upon which the different systems of Law & Equity were administered. The fusion of Courts did not lead to the fusion of principles. The legal ghosts of an outword & by-gone procedure continued to haunt the holy precincts of law, refusing to be laid to rest.

12. On the basis of first principles, I am of the opinion the cause of action either for a specific performance or for damages is breach of contract. In some cases the appropriate relief for the breach may be specific performance & in other cases the appropriate relief may be damages. A party who sues for specific performance must allege against the other party that the latter has not performed the contract. That is the breach on which he asks for specific performance. It is true that when such claim is made for specific performance the party claiming must show that on his part he has performed & is & has been ready & willing to perform the contract. But that is a requirement in aid of his claim which has already arisen by the other party's breach. The foundation in my judgment nevertheless remains the breach of contract by the other side. Equally so when the party claims damages. The cause of action for damages is the breach of contract. In the claim for damages the party claiming need not say that he is ready & willing because the contract is put an end to. The consideration that in the claim for specific performance the party claiming must be ready & willing & must treat the contract as subsisting although the other party has broken it or the consideration that a party claiming for damages need not treat the contract as subsisting does not in my view alter the nature & character of the cause of action in the suit which remains in either case breach of contract. These seemingly different considerations in either case are only incidental and ancillary to the very nature of the relief asked. Naturally if the court is to decree specific performance the party claiming at whose instance the court is acting must himself be ready & willing to perform the contract. Equally naturally when the party is claiming only damages he need not be ready & willing to perform the contract because he is not asking for performance but only damages for the other party's breach as sufficient recompense. Election of a remedy in such case cannot & should not be said to be the cause of action. In my opinion a mental attitude or conduct in such context cannot alter the cause of action.

13. The Privy Council decision in 'Ardeshir H. Mama v. Flora Sassoon', 55 I. A. 360 has launched a thousand legal battles & is an authority so well known on this branch of the law. Lord Blanes-burgh at p. 377 observes:

'For that amendment, properly construed, did not, as it should have done to be effective, operate to convert that suit into one for the recovery of damages for breach of contract.'

That seems to be an observation which suggests that in a proper case amendment to convert the suit for specific performance into one for damages for breach of contract can be made. Later on at that page the learned Lord observes further that the Court has the power to make such amendment. Although whether in the circumstances of a case such power should be exercised or not is quite another matter. One of the reasons which Lord Blanesburgh adduced to come to this conclusion is the provision contained in Section 29, Specific Relief Act, which makes the dismissal of a suit for specific performance of a contract a bar to a right to sue for compensation for breach from which it could be deduced & implied & the learned Lord so deduced & implied that prior to such dismissal the right is not barred.

14. My reading of the Privy Council decision in Ardeshir H. Mama v. Flora Sasson', is that in a proper case such an amendment as is sought now in the application before me can be allowed. It is necessary however to refer to certain other decisions of the Privy Council in this connection on which Mr. Sanyal has relied for his arguments. The first one is the case of 'Ram Saran v. Mahabir', 54 I. A. 55. Although Lord Sinha delivered judgment in this case Lord Blanesburgh was one of the Members of the Board. In that case, a suit was brought against the members of a Hindu joint family for specific performance of a written agreement for the sale of a joint family property alleged to have been made by the Karta or for damages, namely, the earnest money with interest. The plff. however did not allege nor was there any evidence in the trial court that the sale was for necessity. It was held by the trial judge that the agreement was a forgery & the suit was accordingly dismissed. There was an appeal & pending that appeal the Karta died & the title of the suit was amended by adding as his heirs his sons' & grandsons who were already parties to the suit. In the appeal the plff. who abandoned his claim for specific performance was given a decree for the earnest money with interest. In that case, it was held by the Privy Council that the decree could not stand because it was not permissible amendment to change the suit into one for money had & received or one to recover a debt. On the first reading of this decision, it looks as though it is an authority that a suit for specific performance cannot be amended into a suit for damages for breach of contract. On a closer consideration however it does not appear to me that is the ratio of the case. At p. 60 of the Report Lord Sinha made the following observation:

'It is not permissible by amendment to change the nature of the suit as framed & even if it were the defts. affected by such amendment must have an opportunity to rebut such new cause of action, a course which would involve fresh written statement & fresh trial. Their Lordships are unable to permit such a course at this stage.'

The point that was decided in that case turned on the question whether the heirs of a Karta under the Hindu Law could be liable in the circumstances of that case for money had & received or for debt. The case of 'Ma Shwe 'Mya v. Maung Mo Hnaung', 48 I. A. 214 is an authority for the proposition that an amendment of a plaint should not be allowed if such an amendment alters the nature of the suit or the real matter of contract between the parties. There was a further question in that case of limitation. The facts of that case show that the original plaint was based on an agreement of 1912 but the amendment that was sought to be made introduced a totally different cause of action based on a separate agreement of 18-12-1903, See the observations of Lord Buckmaster in that case at p. 216. That case therefore is no authority one way or the other on the question whether a plaint for specific performance could be converted into a plaint for damages for breach of contract. The principle that amendment should not be permitted which alters the very nature of the suit or the cause of action is very well settled & the latest pronouncement of the Judicial Committee in 'Kanada v. Waghu'. 77 I. A. 15 confirms such principle.

15. No difficulty is presented in deciding the theoretical problem whether an amendment is permissible to alter the cause of action or the nature of the suit. That cannot be done. The important legal problem is the more practical & specific one. Is it altering the cause of action of a suit when] a claim for specific performance of a contract is amended into a claim for damages for breach of such contract? On an anxious consideration of this point I have come to this conclusion that it is not. The cause of action is breach of contract whether the claim is for specific performance or damages. The reliefs follow as a consequence of the breach of contract. If the party aggrieved is ready & willing to carry out his part & he party complained against commits the the breach then the party aggrieved may either sue for specific performance or for damages. It is a choice of reliefs. It has been said that it is also an election of remedy. I cannot persuade' myself to the conclusion that the election is such that even subsequent to the filing of the suit which makes specific performance impossible prevent the plff. from converting the plaint into a suit for damages.

16. Some relevant facts should be set out here. The suit in this case was filed on 17-12-1946. About a year later when the suit was ready for hearing on 17-12-1947 the plff. was served with orders of requisition from the Govt. It is another well-known principle that the Court can always modify the decree according to subsequent events, i.e. events which happen subsequent to the filing of the plaint rendering the relief claimed in the plaint inadequate. See the observations in 'Nuri Mian v. Ambica Singh', 44 Cal. 47 at pp. 55 & 56 & 'Annapurna Dasi v. Sarat Chandra', 46 C. W. N. 355 at p. 361.

17. An analysis of the different provisions of the Specific Relief Act will not be out of place in coming to the conclusion that I have arrived at. I have already referred to Section 29 of Specific Relief Act. That section provides that the dismissal of a suit for specific performance bars the plff's right to sue for compensation for breach of such contract. As Lord Blanesburgh points out this implies that before dismissal the power to amend is there. In William's Vendor & Purchaser, 4th Edition 1025 the law is stated in the following terms:

'it has been mentioned that on breach of an essential stipulation in the contract the injured party electing to affirm the agreement as the alternative of suing at law for damages for the breach or suing in equity for specific performance of the contract. Under the present practice he can pursue these remedies in one action claiming alternative relief.'

On the election of remedy the provision contained in Section 24 (c), Specific Relief Act, is in my opinion relevant. It provides that specific performance of a contract cannot be enforced in favour of a person

'who has already chosen his remedy & obtained satisfaction for the alleged breach of contract.'

Therefore; the choice of remedy is not enough but superadded to that must be the obtaining of satisfaction of the alleged breach in order to exclude the relief of specific performance. The plff. in this case cannot be said to have obtained the satisfaction of the breach of contract. But neither the provision contained in Sub- section (b) nor Sub- section (c) of Section 24, Specific Relief Act, in any event can be said to exclude a claim for damages. A claim for specific performance under the Specific Relief Act can in my judgment co-exist with a claim for damages under the Indian Contract Act claim under one Act cannot preclude claim on the other so long as the requirements of the respective Statutes are satisfied. Section 37, Specific Relief Act, shows how even in a suit for specific performance the plff. may claim in the alternative that the contract be rescinded. If rescision can be claimed as alternative to specific performance I can see no principle why claim for damages should be excluded. The view that I take finds some support from the observations of Ameer AH J. in 'Calcutta Improvement Trust v. Subarnabala Debt', 44 C. W. N. 541 at pp. 548 to 553.

18. I see no reason why the procedural dichotomy & the legal dialectics of the history of English law & equity for which I find no fundamental juridical basis, should limit the operation of complete justice in India. I, therefore, hold both on the authority of 'Mama v. Sassoon', & the special observation made by Lord Blanesburgh which I have quoted & on analysis of the different sections of the Specific Relief Act that in a proper case a plaint for specific performance can be converted by amendment into a claim for damages for breach of contract & such an amendment does not amount to altering the cause of action or the nature of the suit.

19. The next argument of Mr. Sanyal is based on the question of limitation. He formulates his point in this way. The suit was filed on 17-12-1946. The amendment that is now sought today is more than three years after. The claim for damages if the plff. were to institute the suit today would therefore be barred by limitation. It is on that ground argued that the deft, has acquired a valuable right & the amendment should not be now permitted which will defeat that right. Here again there is controversial ground. The classic authority on which Mr. Sanyal relies for this breach of his argument is 'Weldon v. Neal, (1887) 19 Q. B. D. 394 where Lord Esther M. R. said:

'We must act on settled rule of practice which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments. If an amendment were allowed setting up a cause of action, which, if the writ were issued in respect thereof at the date of the amendment, would be barred by the Statute of Limitations, it would be allowing the plff. to take advantage of her former writ to defeat the statute & taking away an existing right from the deft., a proceeding which, as a general rule, would be, in my opinion, improper & unjust. Under very peculiar circumstances the Court might perhaps have power to allow such an amendment, but certainly as a general rule it will not do so.'

Lindly L. J. & Lopes L. J. concur with Lord Esther M.R.

20. On the basis of this authority, M. H. N. Sanyal argued that amendment should not be allowed in this case because there are no special circumstances. In fact the special circumstances in his opinion are against such amendment. He points out that the requisition was made as long ago as 17-12-1947 & if the plaint were amended at that time the claim for damages would not have been barred by limitation. But Mr. Sanyal argued that the plff. delayed & took no steps & allowed by his laches the claim for damages to be barred by limitation. There is considerable force in the argument put forward by Mr. Sanyal. But I am distressed by one fact which seems to me to afford the special circumstances in this case for allowing the amendment. It is true that the requsi-tion was made in 1947 about a year after the institution of the suit but it might have been released before the suit came for hearing & it might have been possible for the plff. to show his capacity to convey at the date when the decree was about to be made as that is the material point of time for consideration. Now therefore when the suit is ready for hearing, the piff. finds that there is no chance of the requisition being released. What happened in this case was that the suit did appear before me for hearing on 15-6-1949, & then the plff. contended that it was doubtful whether there was any effective requisition at all & even if so what was its nature & scope. The deft, contended that the property could not be conveyed as it was under effective requisition by the Govt. Upon that an order was made on 15-6-1949 pursuant to the plff's prayer in the plaint as to enquiry, adjourning the further hearing of the suit & referring the matter to the Registrar to enquire as to the good marketable title & whether there was any requisition & if so the nature & scope thereof. The plff. urges now in his petition that he made diligent efforts to get the property released from requisition but has not succeeded. With the result that the plff. has come to the conclusion & he has been so. advised that no useful purpose will be served by proceeding with the enquiry as to title before the Registrar. This conduct is consistent with the desire of the plff. to try his best until the very last to convey the property according to the agreement. I should, therefore, think that it will be a very great hardship on the part of the plff. if he is not allowed this amendment. It will mean that he will neither get specific performance nor will he get damages even if he is right in showing deft's breach.

21. The Privy Council in the case of 'Charan Das v. Amir Khan', 47 I. A. 255 says that although the power of a Court to amend the plaint in a suit should not as a rule be exercised where the effect is to take away from the deft. a legal right which accrued to him by lapse of time yet there' are cases in which that consideration is outweighed by the special circumstances of the case. In that case the suit asked for a declaration of right of pre-emption under Section 42, Specific Relief Act. but not for possession & the question arose whether plaint could be amended by claiming possession on pre-emption although the time had expired for bringing a suit to enforce the claim for possession. It was allowed & was said that such an amendment could be made inspite of limitation.

22. Now in the case before me, there was the prayer made alternatively to the claim for specific performance, for the forfeiture of the earnest money & damages in addition to or in lieu of specific performance.. This alternative claim of course was obviously made under Section 19, Specific Relief Act. While it is true that any defence which could defeat a claim for specific performance could defeat such an alternative claim for compensation it appears to me that this is a matter of mere form & not of substance in India. In 'Mama v. Sassoon', the Privy Council said that an amendment should not be allowed when the suit had been pending as one for specific performance for a long period during which the deft, had been prevented from dealing with the property. But that consideration does not apply here. In the case before me it is a vendor's suit for specific performance. In the case before the Privy Council the case was a purchaser's suit for specific performance. The consideration therefore that deft, was prevented from dealing with the property during the pendency of the suit for specific performance does not arise here.

23. As I am of the opinion that the amendment does not alter the cause of action which remains the breach of contract & it only modifies the relief in the sense that it gives up the claim for specific performance & asks for damages for the same breach, I in the exercise of my discretion allow the amendment.

24. There will, therefore, be an order in terms of Clauses (a) & (b) of the summons. The applicant must however bear the costs of this application & the costs of any additional written statement that the deft, may be advised to file by reason of such amendment. Certified for counsel.


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