STATE BANK OF SAURASHTRA versus P. N. B.

Citation: [2001] 3 S.C.R. 236 · Decided: 26-04-2001 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Disposed off
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Judgment (excerpt)

A 
STATE BANK OF SAURASHTRA 
v. 
P.N.B. 
APRIL 26, 2001 
B 
[B.N. KIRPAL, RUMA PAL AND BRIJESH KUMAR, JJ.] 
Specific Relief Act, 1963: 
Specific performance of contract-Breach of-Agreement for sale of 
C units of UT! by appellant to respondent-Payment of purchase money-Non-
delivery of units-Suit for delivery of units alongwith alternative plea for 
damages-Special Court directing respondent to deliver the units after 
purchasing the same from open market-Validity of-Held, since there was 
an alternative plea for damages, it would have been appropriate for the 
D court to have awarded damages, in addition to refut1d of money-Indian 
Contract Act, 1872-S. 73-Special Court (Trial of offences Relating to 
transactions in Securities) Act, 1992. 
An agreement was entered into, for sale of units of Unit Trust of India 
(UTI) by appellant bank to respondent bank. Consequently, respondent made 
E the payment for purchase of the said units. But appellant Bank failed to 
deliver the units. Res110ndent wrote a letter claiming compensation for breach 
of the contract treating the same to have taken place on 30.5.1992 and on 
that basis it claimed difference in price between the rate that was paid and 
the rate of units as on 30.5.1992. Thereafter, respondent filed a suit inter 
alia claiming delivery of µnits for which payment was made. An alternative 
F prayer for damages along with interest was alsQ made. Special Court 
constituted 101der the Special Court (Trial of Offences Relating to Transaction 
in Securities) Act. 1992 decreed the suit b_y directing the appellant to 
purchase the units from open market and deliver the same to respondent. 
Hence the present appeal. 
G 
Disposing of the appeals, the Court 
HELD: 1.1. In view of alternative plea for damages on the facts of the 
present case, a decree for specific performance in the manner in which it 
was passed was not appropriate especially when the respondent could be 
H compensated with the return of money and award of reasonable damages. It 
236 
,... 
STATE BANK OF SAURASHTRA v. P.N.B. [KIRPAL, J.] 
237 
would have been appropriate for the Special Com1 to have computed and A 
awarded the damages in addition to ordering refund rather then requiring 
the appellants to purchase the units and give the same to the respondent. 
[239-E] 
1.2. Since, there is no dispute on the principle applicable, namely, that 
the amount of Rs. 102, 65,12,500 which was paid by the respondent had to B 
be refunded to it and the respondent was also entitled to get reasonable 
amount of com11ensation or damages. Thus, the respondent would be entitled 
to, in addition to the refund of Rs. 102,65,12,500, interest at the lending rate 
on the aforesaid amount from the date of payment till the date of filing of suit. 
In addition, respondent would also be entitled to interest pendente lite and 
future interest calculated at the rate of 17.5 per cent per annum, as claimed C 
by it in the plaint. In view of the difference in the price per unit as on 30th 
May, 1992 and the rate at which the units had been agreed to be purchased, 
the total sum payable by the appellant to the respondent would be about Rs. 
212 crores. Accordingly, the decree passed by the Special Court is modified 
with the direction that a sum of Rs. 212 crores be paid by the appellant to D 
the respondent. However, since punuant to the interim order of this Court 
units worth Rs. 210 crores have already been given by the appellant to the 
respondent in addition to payment of about Rs. 2 crores, no further amount 
would now be payable and the decree stands satisfied. [239-G; 240-A-CJ 
CIVIL APPELLATE JURISDICTION:. Civil Appeal No. 7373 of E 
1996. 
From the Judgment and Order dated 11. 3. 96 of the Special Court at 
Bombay in Suit No. 33 of 1995. 
WITH 
Civil Appeal No. 8871of1996. 
·Harish N. Salve, Solicitor of General, Ashok H. Desai, R.F. Nariman, F. 
· Devitre, Darius Khan1batta, Jai Munim, Sameer Parekh, Sandeep Parekh, D. 
F 
Mohancy, Ms. Anuradha Bindra, P.H. Parekh, Mahesh Agrawal, Mannu 
Kri~hanan, Sumit Lal, Rishi Agrawala, E.C. Agrawala, Ms. Sunita Dutt, Pradeep G 
Sancheti and Shailendra Bhardwaj for the appearing parties. 
The Judgment of the Court was delivered by 
KIRPAL J. This is an appeal filed against the judgment of the Special 
Court constituted under the Special Court (Trial of Offences relating to H 
238 
SUPREME COURT REPORTS 
c200113 s,fR. 
A Transactions in Securities) Act, 1992 whereby the suit filed by th
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