Damages in Lieu of, or in Addition to, an Injunction

"The court may, if it thinks fit, award such damages." Discretionary, consistently with section 36.

When damages are given in substitution. Where the court declines the injunction: because of the plaintiff's delay or acquiescence, because compliance would be grossly disproportionate, because the injury is small and can be measured, or because section 41 bars the order.

When damages are given in addition. Where the injunction stops the future wrong but the plaintiff has already suffered loss.

Sub-section (2): it must be claimed

No damages unless claimed in the plaint, with the familiar curative proviso: where they were not claimed, the court shall allow an amendment at any stage on such terms as may be just.

The same discipline appears in section 21(5) and section 22(2). The Act repeatedly says: ask for everything you want in the one suit.

Sub-section (3): the bar after dismissal

The trap, and it is the mirror of section 24.

The dismissal of a suit to prevent the breach of an obligation bars the plaintiff's right to sue for damages for that breach.

So a plaintiff who sues only for an injunction, loses, and then sues for damages, finds the second suit barred.

Note the difference in wording from section 24. Section 24 preserves the plaintiff's right to sue for "any other relief" to which he may be entitled by reason of the breach. Section 40(3) contains no such saving. It is expressed simply as a bar on suing for damages for that breach.

The practical rule, in one line: claim damages in the injunction suit, and if you forgot, use the proviso to sub-section (2) before judgment.

Section 40 compared with sections 21 and 24

A worked example

Tara sues Umesh for a perpetual injunction restraining him from discharging effluent into the stream that feeds her farm, and for a mandatory injunction to remove the pipe he has laid.

• She should also claim damages. Section 40(1) allows her to claim them in addition to, or in substitution for, the injunctions, and sub-section (2) requires the claim to be in the plaint.
• The court grants the injunctions, but two seasons of crops have already been lost. Damages in addition, for the loss already suffered.
• The court refuses the mandatory injunction because removing the pipe would cost forty lakh while her loss is modest. Damages in substitution for that injunction, which is exactly what sub-section (1) is for.
• She did not claim damages in the plaint. The proviso to sub-section (2): the court shall allow her to amend at any stage of the proceedings on just terms.
• Her suit is dismissed altogether, and she then files a fresh suit for damages. Sub-section (3) bars it. The dismissal of a suit to prevent the breach of an obligation bars her right to sue for damages for that breach.
• Compare the position if this had been a specific performance suit. Under section 21(1) as amended she could have claimed compensation only in addition to performance, not in substitution; but under section 24 a dismissal would still have left her free to sue for any other relief, a saving section 40(3) does not contain.

What it does NOT mean

"Damages are an alternative the plaintiff may elect after judgment." They must be claimed in the plaint, though the proviso allows amendment at any stage before the suit ends.

"The court must award damages where it refuses the injunction." It may, if it thinks fit.

"Section 40 and section 21 work the same way." Section 21(1) lost the words "in substitution of" in 2018; section 40(1) kept them.

"A plaintiff who loses an injunction suit can sue for damages later." Sub-section (3) bars it.

"Section 40(3) preserves other reliefs, like section 24." It does not; it contains no equivalent saving.

Quick revision

• s.40(1): in a suit for a perpetual injunction (s.38) or a mandatory injunction (s.39), the plaintiff may claim damages either IN ADDITION TO, or IN SUBSTITUTION FOR, the injunction, and the court may, if it thinks fit, award them.
• s.40(1) was NOT amended in 2018, unlike s.21(1), from which "or in substitution of" was removed. So damages remain a genuine alternative in an injunction suit.
• s.40(2): no damages unless claimed in the plaint; the court shall allow amendment at any stage on just terms.
• s.40(3): the DISMISSAL of a suit to prevent the breach of an obligation BARS the right to sue for damages for that breach. The mirror of s.24, but with no saving for "any other relief".
• In substitution where the injunction is refused for delay, disproportion, triviality or a s.41 bar; in addition where loss has already been suffered.

Test yourself

1. What does section 40 allow a plaintiff to claim? Damages either in addition to, or in substitution for, a perpetual injunction under section 38 or a mandatory injunction under section 39, and the court may award them if it thinks fit. The relief is discretionary, consistently with section 36.

2. How does section 40(1) differ from section 21(1)? Section 21(1) was amended in 2018 so that compensation may be claimed only in addition to specific performance, the words "or in substitution of" being removed. Section 40(1) was not amended and still allows damages either in addition to or in substitution for the injunction, so damages remain a genuine alternative in an injunction suit but not in a specific performance suit.

3. Must damages be claimed in the plaint? Yes. Sub-section (2) provides that no relief for damages shall be granted under the section unless the plaintiff has claimed it in his plaint. The proviso requires the court, where no such damages have been claimed, to allow him at any stage of the proceedings to amend the plaint on such terms as may be just for including the claim.

4. What is the effect of a dismissal? Sub-section (3) provides that the dismissal of a suit to prevent the breach of an obligation existing in favour of the plaintiff bars his right to sue for damages for that breach. A plaintiff who sues only for an injunction and loses therefore cannot bring a fresh suit for damages.

5. How does section 40(3) differ from section 24? Both bar a later money claim after a dismissal, but section 24 expressly preserves the plaintiff's right to sue for any other relief to which he may be entitled by reason of the breach, whereas section 40(3) contains no such saving and is expressed simply as a bar on suing for damages for that breach.