Case Note & Summary
This case involved an appeal by the State Bank of Saurashtra against a judgment of the Special Court under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992. The respondent, Punjab National Bank, had filed a suit for the delivery of units of the Unit Trust of India, for which it had made substantial payments. The respondent paid Rs. 26,82,00,000 on 10th September 1991 for 2 crore units and Rs. 75,83,12,500 on 23rd October 1991 for 5.50 crore units, but the units were never delivered. Following considerable correspondence, the respondent claimed damages and filed a suit after the appellant failed to deliver the units. The Special Court ordered specific performance, requiring the appellant to purchase and deliver the units, along with awarding costs. During the appeal, the Supreme Court noted that the respondent was entitled to a refund and damages under Section 73 of the Indian Contract Act, 1872. The court found that the Special Court's decree for specific performance was inappropriate given the circumstances and that the respondent could be compensated with a refund and damages instead. The court calculated the total amount payable to the respondent and noted that the appellant had already delivered units worth Rs. 210 crores and paid Rs. 2 crores in cash. Consequently, the court modified the decree, stating that the amount due was satisfied. The appeal was disposed of without approving or disapproving the Special Court's reasoning.
Headnote
A) Contract Law - Breach of Contract - Specific Performance and Damages - Indian Contract Act, 1872, Section 73 - The court found that the respondent was entitled to a refund of the amount paid along with reasonable damages due to the appellant's breach of contract. The court modified the decree of the Special Court, emphasizing that damages should have been awarded in addition to the refund rather than ordering specific performance (Paras 1-2).
Issue of Consideration
Whether the decree for specific performance was appropriate and the calculation of damages and refund due to the respondent.
Final Decision
The Supreme Court modified the decree of the Special Court, stating that the respondent was entitled to a refund of Rs. 102,65,12,500 and reasonable damages, which had been satisfied by the delivery of units worth Rs. 210 crores and Rs. 2 crores in cash.
Law Points
- Specific performance
- breach of contract
- damages
- refund
- interest calculation
