40. Damages in lieu of, or in addition to, injunction

(1) The plaintiff in a suit for perpetual injunction under section 38, or mandatory injunction under section 39, may claim damages either in addition to, or in substitution for, such injunction and the court may, if it thinks fit, award such damages. 

(2) No relief for damages shall be granted under this section unless the plaintiff has claimed such relief in his plaint:

PROVIDED that where no such damages have been claimed in the plaint, the court shall, at any stage of the proceedings, allow the plaintiff to amend the plaint on such terms as may be just for including such claim.

(3) The dismissal of a suit to prevent the breach of an obligation existing in favor of the plaintiff shall bar his right to sue for damages for such breach

Example 1: A contracts to sell a hundred mounds of rice to B. B brings a suit to compel A to perform the contract or to pay compensation. The Court is of opinion that A has made a valid contract and has broken it, without excuse, to the injury of B but that specific performance is not the proper remedy. It shall award to B such compensation as it deems just.

Example 2: A contracts with B to sell him a house for Rs. 1000/- the price to be paid and the possession given on the 1st January, 2010. A fails to perform his part of the contract, and B brings his suit for specific performance and compensation, which is decided in his favour on the 1 January, 2011. The decree may, besides ordering specific performance, award to B compensation for any loss which he has sustained by A’s refusal.

Example 3: A, a purchaser, sues B, his vendor, for specific performance of a contract for the sale of a patent. Before the hearing of the suit the patent expires. The court may award compensation to A for the non-performance of the contract by B and may, if necessary, amend the plaint for that purpose.