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SUPREME COURT OF INDIA
(From the High Court of Calcutta)
L. NAGESWARA RAO, B.R. GAVAI, JJ.
Universal Petro Chemicals Ltd. – Appellant
Versus
B.P. PLC and Others – Respondents
Civil Appeal Nos. 3127, 3128 of 2009
Decided On : 18-02-2022
Specific Relief Act, 1963 – Section 21 – Suit for Specific Performance of Collaboration Agreement and Perpetual Injunction – Grant of Perpetual Injunction – Single Judge expressly mentioned in his judgment that Appellant did not claim any relief for damages – Even in appeal filed by Appellant, no relief for damages was claimed by Appellants – It was a specific submission on behalf of Appellant before Division Bench that no relief in nature of damages and/or compensation could be granted – It might be true that Appellant was interested in relief of specific performance of Collaboration Agreement when he filed Special Leave Petition in 2008 as collaboration agreement subsisted till 31.12.2009 – However, even thereafter no steps were taken by Appellant to specifically plead relief of damages or compensation – Request of Appellant for grant of damages cannot be accepted – No relief can be granted to Appellant – Civil Appeal dismissed. (Paras 22, 23 and 24)
Facts of the case:
Appellant-Universal Petro-Chemicals Ltd. in Civil Appeal No.3127 of 2009 filed a suit for specific performance of a collaboration agreement dated 01.11.1994 as modified by the supplementary agreements dated 01.03.1995 and 27.12.2002. The Plaintiff further prayed for a declaration of perpetual injunction. Single Judge of the High Court of Calcutta refused to grant a decree of specific performance of the agreement. However, a decree of injunction as prayed for was granted. Aggrieved thereby, the Appellant had filed an appeal questioning the judgment of Single Judge to the extent that no relief was granted. The Appeal was dismissed by a Division Bench of the High Court of Calcutta by a judgment dated 18.02.2008 which is impugned in the Civil Appeal No.3127 of 2009. Respondent No.3 – Aral Aktiengesellschaft in Civil Appeal No.3127 of 2009 has also filed an appeal against judgment of the Division Bench questioning the judgment relating to perpetual injunction granted in favour of Appellant. Only point that arises for consideration is whether Appellant is entitled for damages for period between 24.08.2005 and 31.12.2009.
Finding of Court:
It might be true that the Appellant was interested in the relief of specific performance of the Collaboration Agreement when he filed the Special Leave Petition in 2008 as the collaboration agreement subsisted till 31.12.2009. However, even thereafter no steps were taken by the Appellant to specifically plead the relief of damages or compensation.
Result : Appeal dismissed.
Based on the provided legal document, the key points are as follows:
The appellant, Universal Petro-Chemicals Ltd., filed a suit for specific performance of a collaboration agreement and for a perpetual injunction. The trial court refused to grant specific performance but granted a perpetual injunction. An appeal was filed, which was dismissed by the High Court, and subsequently by the Supreme Court.
The collaboration agreement was entered into with a foreign company and involved manufacturing and marketing lubricants under a licensed brand within India. The agreement was extended multiple times, with the last extension valid until 31.12.2009.
The termination notice issued by the respondent was challenged, with the court examining whether the agreement was validly terminated. The court found that the agreement was extended till 31.12.2009 and that the termination notice issued before this date was invalid.
The court observed that the relief of specific performance could not be granted because the agreement involved ongoing obligations and continuous technology transfer, making specific performance impractical and unenforceable.
The court granted a perpetual injunction restraining the respondent from marketing or distributing products under the Aral brand in India until 31.12.2009 but did not grant specific performance of the agreement.
The appellant sought damages for the period from 24.08.2005 to 31.12.2009, claiming that damages could be awarded in lieu of specific performance. However, the court noted that the appellant had not claimed damages in the plaint or during the proceedings and had not taken steps to amend the pleadings to include such relief.
The court emphasized that under applicable law, damages cannot be awarded unless specifically claimed in the plaint, and the appellant failed to do so. The court also referred to relevant legal principles that restrict awarding damages without a proper claim.
In conclusion, the court dismissed the appeal, holding that no relief for damages could be granted due to the absence of a claim for such relief in the pleadings. The appellant was not entitled to damages for the period in question, and the original orders were upheld.
The court reiterated that reliefs such as damages must be explicitly claimed and that the legal provisions restrict courts from awarding such damages in the absence of a proper claim, emphasizing the importance of following procedural requirements.
These points summarize the court’s reasoning and the outcome of the case, highlighting the importance of proper pleadings and adherence to legal procedures in claiming damages.
JUDGMENT :
L. NAGESWARA RAO, J.
1. The Appellant-Universal Petro-Chemicals Ltd. in Civil Appeal No. 3127 of 2009 (for the sake of convenience, hereinafter referred to as ‘the Appellant’) filed a suit for specific performance of a collaboration agreement dated 01.11.1994 as modified by the supplementary agreements dated 01.03.1995 and 27.12.2002. The Plaintiff further prayed for a declaration of perpetual injunction. The learned Single Judge of the High Court of Calcutta refused to grant a decree of specific performance of the agreement. However, a decree of injunction as prayed for was granted. Aggrieved thereby, the Appellant had filed an appeal questioning the judgment of the learned Single Judge to the extent that no relief was granted. The Appeal was dismissed by a Division Bench of the High Court of Calcutta by a judgment dated 18.02.2008 which is impugned in the Civil Appeal No. 3127 of 2009. Respondent No. 3-Aral Aktiengesellschaft in Civil Appeal 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, re-branding 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 Appellant applied to the Ministry of Commerce and Industry, Government of India for approval with respect to the royalty, extension of duration of the contract etc. On 13.11.2002, the Government approved the request of the Appellant and extended the approval of the Reserve Bank of India dated 25.11.1994. However, in the letter dated 13.11.2002, it was specified that the royalty was payable from 01.01.2003 to 31.12.2009 and that the duration of the extended Collaboration Agreement would be from 01.01.2003 to 31.12.2009. This approval dated 13.11.2002 was also made an integral part of the Collaboration Agreement by execution of yet another supplementary agreement dated 27.12.2002 (hereinafter referred to as the “Supplementary Agreement”).
4. A termination notice was issued by Respondent No. 3 on 14.04.2004 on the ground that the Collaboration Agreement would come to an end on 31.10.2004 as per Clause 5 of the Collaboration Agreement and that there would be no extension thereafter. Against this termination notice, the Appellant filed Civil Suit No. 214 of 2004 praying for the following reliefs:
(a) Perpetual injunction restraining the defendants No. 1 and 2 from marketing in India any lubricant and in particular finished automotive and industrial lubricant under the brand name of Aral or by using the design of Aral.
(b) Perpetual Injunction restraining the defendant No. 3 and/or its servants and/or its agents from allowing or permitting anybody other than the plaintiff to market finished automotive and industrial lubricant in India under the trade mark Aral or design of Aral.
(c) Declaration that the collaboration agreement dated November 1, 1994, read with supplementary agreements dated January 3, 1995 and December 27, 2002 incorporated therein a
Request for grant of damages cannot be accepted in absence of any specific prayer to that effect.
The limited scope of interference under Section 34 of the A&C Act, 1996 and the arbitrator's authority in interpreting the contract terms.
The main legal point established in the judgment is that the provisions of Sections 21 and 40 of the Specific Relief Act and Order 6 Rule 17 C.P.C mandate the court to allow the plaintiff to seek an ....
A unilaterally projected profitability which is a mere assumption, cannot be the basis of assessment of damages.
Grant of compensation/damages in addition to specific performance would only arise, if plaintiff/claimant were to establish entitlement for grant of relief of Specific Performance i.e., to say sina q....
Claim for damages will remain confined to what is expressly provided under Agreement.
In a suit for specific performance of contract, plaintiff may also claim compensation for its breach in addition to such performance.
Court is conscious of its limitation while exercising jurisdiction under Section 100 of the Civil Procedure Code. Unless the findings are so perverse, the same cannot be accepted, the Court would not....
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