Case Note & Summary
The plaintiff, National Bank for Agricultural and Rural Development, filed a suit in 1989 against M/s. Shah Thakur & Sons and another defendant seeking declaration of validity of an agreement and specific performance thereof, along with ancillary reliefs including compensation and damages. The agreement required the defendants to construct 532 flats in 19 buildings for the plaintiff. The defendants completed construction and handed over possession of all flats: 380 flats in July 1990 and the remaining 152 flats on 22 January 1991. The plaintiff accepted possession. Thereafter, no dispute remained between the parties regarding the subject matter of the suit. However, instead of closing the suit, both parties continued to litigate over extraneous matters such as deposit of amounts, withdrawal under bank guarantees, and payment of interest. At the final hearing, both parties agreed that no evidence was required. The court observed that under Order XV Rule 1 of the Code of Civil Procedure, 1908, when parties are not at issue on any question of law or fact, the court may pronounce judgment at once. Since the defendants had fully performed their contractual obligations and the plaintiff had accepted performance, the suit had become infructuous. The court held that no further relief, including compensation or damages, could be granted because the plaintiff had already received what it was entitled to. Claims regarding interest on amounts deposited or withdrawn were extraneous to the suit and could not be agitated at the final hearing. The court also noted that interest under Section 34 CPC is payable only on the principal sum adjudged, and since no decree for principal sum was passed, no interest could be awarded. Consequently, the suit was dismissed as infructuous.
Headnote
A) Civil Procedure - Suit becoming infructuous - Order XV Rule 1 Code of Civil Procedure, 1908 - Where parties are not at issue on any question of law or fact, the Court may pronounce judgment at once - In a suit for specific performance of an agreement to construct flats, once the defendant has constructed and handed over possession of all flats and the plaintiff has accepted them, nothing remains for adjudication and the suit is infructuous (Paras 2-4). B) Interest - Post-filing interest - Section 34 Code of Civil Procedure, 1908 - Interest under Section 34 CPC is payable only on the principal sum adjudged; where no decree for principal sum is passed, no interest can be awarded - Claims for interest on amounts deposited or withdrawn under bank guarantees are extraneous to the suit and cannot be agitated at final hearing (Paras 5-9).
Issue of Consideration
Whether the suit for specific performance and damages survives after the defendant has fully performed the contract and possession of all flats has been handed over and accepted by the plaintiff.
Final Decision
The suit is dismissed as having become infructuous. No order as to costs.
Law Points
- Suit becomes infructuous upon full performance of contract
- Order XV Rule 1 CPC allows judgment when parties not at issue
- Interest under Section 34 CPC not applicable when no decree for principal sum
