TMI Blog2022 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 246 - SUPREME COURT] , the Respondents suit for specific performance of an agreement for conveyance of certain properties was dismissed by the Civil Court and the judgment of the Civil Court was upheld in appeal. As the High Court reversed the findings of the First Appellate Court, the defendant filed an appeal before this Court. The contention of the Appellant in that case was that the contract itself became incapable of specific performance as a proceeding for compulsory acquisition of suit properties was initiated during the pendency of the second appeal. It was not clear as to whether compensation in lieu of specific performance was sought by the plaintiff in the suit. However, on a finding that there is no difficulty in assessing the quantum of compensation for the subject property which was ascertainable by determination of market value, this Court permitted amendment of relief to do complete justice. The scope of Section 21 (4) and (5) was examined by this Court in SHAMSU SUMARA BEEVI VERSUS G. ALEX AND ANR. [ 2004 (8) TMI 694 - SUPREME COURT] . This Court referred to the Law Commission of India s recommendation that in no case the compensation should be decreed, un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal No.3127 of 2009 has also filed an appeal against the judgment of the Division Bench questioning the judgment relating to the perpetual injunction granted in favour of the Appellant. 2. The Appellant entered into a collaboration agreement with Respondent No.3, which is a German company, on 01.11.1994 by which the Appellant had to manufacture lubricants using the formulation of Aral and market the same in India (hereinafter referred to as the Collaboration Agreement ). By the Collaboration Agreement the Appellant was given exclusive licence regarding the distribution, blending, rebranding and marketing of Aral lubricants in India. Subsequent to the Collaboration Agreement, necessary approvals were obtained from the Reserve Bank of India under the Foreign Exchange Management Act, 1973 on 25.11.1994 which was incorporated in the Collaboration Agreement vide a supplementary agreement dated 03.01.1995. 3. In the year 2002, Veba Oil, the holding company of Respondent No. 3 was acquired by the Respondent No. 1 BP Plc., a UK entity, who was also the holding company for Respondent No. 2 Castrol India Ltd. As the approval granted by the Reserve Bank of India was lapsing, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d their associate, affiliate or agents from taking any step or from giving any effect to the letter of termination dated April 14, 2004 in any manner whatsoever; f) Perpetual injunction restraining the defendant No. 3. from acting in any manner contrary to or in breach of the collaboration agreement dated November 1, 1994 as modified by supplementary agreements dated January 3, 1995 and dated December 27, 2002 and the agreement upon trade mark and design being annexures A , B , D and F hereof and the defendants No. 1 and 2 from procuring breach thereof or acting contrary thereto in any manner whatsoever ; g) Decree for specific performance of the said collaboration agreement and agreement upon Trade Marks dated November 1, 1994 as modified by the supplementary agreement dated January 3, 1995 and December 27, 2002 executed by and between the plaintiff and the defendant No. 3; h) Perpetual injunction restraining the defendant No. 3 and/or its servants and/or its agents from interfering with the right of the plaintiff to market its products of finished automotive and industrial lubricants under the trade mark 'Aral' and by use of 'Aral' design ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . To what reliefs, if any is the plaintiff is entitled to? 7. Issues No.4 and 5 pertaining to the termination of the agreement were considered together. The contention of the Plaintiff (Appellant herein) in the suit was that the agreements stood extended till 31.12.2009 in view of the Supplementary Agreement dated 27.12.2002. The Supplementary Agreement was entered into between the parties pursuant to the letter dated 13.11.2002 of the Government of India by which the Reserve Bank of India s approval was extended till the duration of the Collaboration Agreement from 01.01.2003 to 31.12.2009. As against this, the Respondents contended that the Collaboration Agreement subsisted only till December, 2004 and the approval granted by the RBI in which the date of 31.12.2009 was mentioned was only for the purpose of remitting royalty in the foreign exchange. According to the Respondents, Clause 5 of the original agreement is relevant for the purpose of determining the date of expiry of the Collaboration Agreement, which provided that after the expiry of 3 years, the Agreement could be terminated by either party by giving a termination notice six months prior. After a careful examinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Collaboration Agreement cannot be granted by this Court as the Collaboration Agreement expired on 31.12.2009. He submitted that the Appellant is entitled for damages for the period from 24.08.2005 till 31.12.2009. He relied upon the judgments of this Court in Jagdish Singh v. Natthu Singh (1992) 1 SCC 647 , Urmila Devi Ors. v. Deity, Mandir Shree Chamunda Devi (2018) 2 SCC 284 and Sukhbir v. Ajit Singh (2021) 6 SCC 54 and argued that the Appellant is entitled for damages even though such a relief was not specifically sought for either in the suit or in the appeal. He referred to the proviso to Section 21 (5) of the Specific Relief Act to contend that the Appellant should be allowed to seek compensation at any stage of the proceeding. He further submitted that the Appellant is entitled for compensation due to the breach of contract under Section 73 of the Indian Contract Act, 1872. Mr. Dwivedi relied upon a letter dated 03.07.2003 written by the Finance Director, Castrol India Limited to state that the amount of compensation to be awarded to the Appellant can be gathered from this letter wherein the profit margins of Respondent No. 3 were discussed. 12. It was submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y could terminate the agreement by giving a notice six months prior, after the expiry of initial three years of the term. It was contended that since a termination notice which was issued on 15.04.2004 was in accordance with Clause 5, it was valid and therefore, the Collaboration Agreement expired on 28.10.2004. The Judgment of the trial Court relating to the injunction was found fault with on the ground that no reasons have been given. 15. The judgment of the learned Single Judge is after considering the Collaboration Agreement, and the Supplementary Agreements which were entered into by the parties. As the parties have agreed to extend the agreement till 31.12.2009 and have voluntarily incorporated such terms in the Collaboration Agreement, it cannot be said that there is any error committed by the High Court in setting aside the termination notice. The High Court has given cogent reasons for grant of injunction. Therefore, the appeal filed by the third Respondent deserves to be dismissed. 16. The only point that arises for our consideration is whether the Appellant is entitled for damages for the period between 24.08.2005 and 31.12.2009. The relevance of 24.08.2005 is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court can still award damages to the Appellant. In Jagdish Singh v. Natthu Singh (supra), the Respondents suit for specific performance of an agreement for conveyance of certain properties was dismissed by the Civil Court and the judgment of the Civil Court was upheld in appeal. As the High Court reversed the findings of the First Appellate Court, the defendant filed an appeal before this Court. The contention of the Appellant in that case was that the contract itself became incapable of specific performance as a proceeding for compulsory acquisition of suit properties was initiated during the pendency of the second appeal. It was not clear as to whether compensation in lieu of specific performance was sought by the plaintiff in the suit. However, on a finding that there is no difficulty in assessing the quantum of compensation for the subject property which was ascertainable by determination of market value, this Court permitted amendment of relief to do complete justice. 19. In Urmila Devi Ors. v. Deity, Mandir Shree Chamunda Devi (supra), this Court was concerned with the modification of the decree of specific performance of an agreement to sell granted by the Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include the relief of compensation in addition to the relief of specific performance. Grant of such a relief is in the teeth of express provisions of the statute to the contrary is not permissible. On equitable consideration court cannot ignore or overlook the provisions of the statute. Equity must yield to law. On a careful consideration of the judgments of this Court relied upon by learned Senior Counsel for the Appellant and the learned counsel for the Respondents, we are of the view that the Appellant is not entitled to claim damages for the period between 24.08.2005 and 31.12.2009. 22. The learned Single Judge expressly mentioned in his judgment that the Appellant did not claim any relief for damages. Even in the appeal filed by the Appellant, no relief for damages was claimed by the Appellants. In fact, it was a specific submission on behalf of the Appellant before the Division Bench that no relief in the nature of damages and/or compensation could be granted. It was submitted that it was difficult to quantify such damages/compensation as neither the anticipated loss of business nor estimated value of the goodwill could be prospectively assessed. It might be true th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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