- The Hon’ble Supreme Court (SC or Court),in the case of Universal Petro Chemicals v BP Plc,has disallowed the claim for damages in lieu of specific performance of the contract stating that the Plaintiff did not specifically pray for such relief in the compliant.
- Appeal before SC arose on account of the order passed by the Division Bench of the Calcutta High Court (HC) where the Court denied the relief of specific performance on account of specific bar laid down under Section 14(1) (b) of the Specific Relief Act, 1963 (Act).
- Upholding the judgment of the Learned Single Judge, the HC observed that since the contract involved performance of future unspecified obligations and duties, it would not be possible for the Court to enforce specific performance of the material terms of the contract. The HC, however, granted a decree of perpetual injunction.
- The Appellant entered into a Collaboration Agreement (CA) with a company (later acquired by the Respondent, BP Plc) by which it was given exclusive licence regarding the distribution, blending, rebranding and marketing of certain lubricants in India. All requisite approvals had been duly obtained in this regard.
- When the date of lapse of the approval was nearing, the Appellant sought an extension of the earlier approval. Upon receipt of the approval, the same was made an integral part of the CA by virtue of a Supplementary Agreement.
- However, the Respondent issued a termination notice on the ground that the Collaboration Agreement would come to an end and there would be no extension thereafter.
- Relying on earlier SC decisions in Jagdish Singh v Natthu Singh; Urmila Devi &Ors. v Deity, Mandir Shree Chamunda Devi, and Sukhbir v Ajit Singh, the Appellant argued that since specific performance of the contract could not be grantedin the current stage of appeal, the Appellant should be entitled for damages even though such a relief was not specifically sought for earlier.
- Referring to the proviso to Section 21 (5) of the Act to contend that the Appellant should be allowed to seek compensation at any stage of the proceeding, it was further submitted that the Appellant is also entitled to compensation owing to breach of contract under Section 73 of Indian Contract Act, 1872 (Contract Act).
- The Counsel for the Respondent, distinguishing the cases relied upon the Appellant as inapplicable to the given facts and placing reliance on SC’s decision in the case of Shamsu Suhara Beevi v G. Alex and Anr,submitted that since the Appellant failed to plead relief for damages either in the Civil Court or HC for 13 years and even in the instant appeal before the SC, the same should not be granted.
- Observing that the HC did not err in setting aside the termination notice, the SC affirmed the grant of perpetual injunction.
- On the point of damages, the Court refuted the Appellant’s reliance on Section 21(5) of the Specific Relief Act on the grounds that Section 21 (5) requires the aggrieved person to seek relief and where no relief has been sought, the same must be sought by amending the plaint. The Court observed that the Appellant neither sought relief at any stage of the appeal nor took steps to amend its appeal in this regard. Thus, the request of the Appellant on account of damages was rejected.
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