Declaratory Decrees | Law of Contracts - CLAT PG PDF Download

Understanding Section 33 of the 1963 Act

•  Obligation to Restore Benefits:  Section 33 of the 1963 Act embodies the principle that "he who seeks equity must do equity." This means that when a party is granted relief through cancellation, they are obligated to restore any benefits received from the other party. 
•  Compensation Requirement:  In addition to restoring benefits, the party granted relief must also provide compensation to the other party as required by principles of justice. 
•  Applicability in Legal Cases:  This provision is relevant in situations where the plaintiff has not explicitly requested cancellation relief, and the defendant has successfully challenged the enforceability of the instrument on grounds of it being void or voidable. 

Declaratory Decrees

A declaratory decree is a legal ruling that clarifies the rights of the parties involved in a dispute. It aims to prevent future conflicts by addressing uncertainties in a transaction.

Key Points:

• Definition:A declaratory decree is a court order that clarifies the rights of the plaintiff in a legal matter. It is intended to provide clarity and prevent future disputes.
• Civil Procedure Code:In India, courts have the authority to entertain civil suits under the Civil Procedure Code, except for cases prohibited by law. However, courts do not have the general power to make declarations unless explicitly granted by statute.
• Preventing Future Litigation:The purpose of declaratory suits is to prevent future litigation by resolving existing controversies. This is in the interest of the state, as it helps eliminate causes of potential disputes, particularly regarding immovable property.
• No New Rights:A declaratory decree does not create new rights for the parties involved. Instead, it clarifies and removes ambiguity surrounding the plaintiff's status or title.
• Importance:Declaratory decrees are important in providing legal clarity and preventing unnecessary legal battles. They play a crucial role in maintaining order and reducing potential conflicts over property and other legal matters.

Sections 34 and 35 of the Specific Relief Act, 1963

Section 34 of the Specific Relief Act

• According to Section 34 of the Specific Relief Act, 1963, any individual who is entitled to a legal character or a right related to any property can file a lawsuit against someone who denies or has an interest in denying their title to that character or right.
• The court has the discretion to make a declaration affirming the plaintiff's entitlement in such cases.
• Importantly, the plaintiff does not need to seek any additional relief beyond the declaration of title in this type of suit.
• However, the court will not make such a declaration if the plaintiff has the option to seek further relief but chooses not to do so.

Explanation:

• A trustee of property is someone who is interested in denying a title that is opposed to the title of a person who does not yet exist. If this person were to exist, the trustee would be acting on their behalf.
• Section 34 allows for a lawsuit against anyone who denies or is interested in denying the plaintiff's title to the legal character or right to any property.
• The plaintiff's task is not finished once they prove their entitlement to the legal character or right to the property. They must also convince the court that the defendant is denying or has an interest in denying the plaintiff's legal character or right.
• The provision is a direct copy of Section 42 of the Specific Relief Act, 1877.
• It provides a remedy to the aggrieved person not only against those who actively claim an adverse interest but also against those who might do so in the future.

Requisites for Obtaining Declaratory Relief under Section 34 of the Specific Relief Act, 1963

• According to Section 34 of the Specific Relief Act, 1963, certain conditions must be met by the plaintiff to obtain declaratory relief.
• In the case ofState of M.P. v. Khan Bahadur Bhiwandiwala, the court outlined the following requisites:
• Legal Entitlement:The plaintiff must demonstrate that they were entitled to a legal character or a right to property at the time of the suit.
• Denial by Defendant:The defendant must have denied or shown an interest in denying the plaintiff's character or title.
• Nature of Declaration:The declaration sought must pertain to the plaintiff's entitlement to a legal character or a right to property.
• Limitation of Relief:The plaintiff should not be in a position to claim any further relief beyond a bare declaration of title.
• It is argued that the fourth requisite is not accurate, as Section 34 only states that if any further relief could be claimed, it should have been included in the prayer.
• Since declaratory relief is an equitable remedy, the court has the discretion to grant or refuse it based on the circumstances of each case.
• Therefore, a person seeking declaratory relief must establish the following:
• Entitlement:To a legal character or a right regarding property.
• Denial by Defendant:The defendant has denied or is interested in denying the plaintiff's title to such character or right.
• Comprehensive Reliefs:All reliefs have been sought in the suit.

Objective

• The aim of this section is to offer a continuous defense against challenges to the plaintiff's title, especially when doubts are raised about it. It seeks to prevent ongoing legal disputes by clearing up existing controversies. The threat to the plaintiff's legal standing must be genuine, not hypothetical.
• This section does not establish a principle that anyone claiming any interest in a property, whether present or future, can ask the court to determine their title. It does not support any declaration of the plaintiff's entitlement to a legal status or property right without special circumstances.
• The plaintiff must demonstrate that the defendant has denied or is likely to deny the plaintiff's legal status or title. There must be a real and present risk to the plaintiff's interests, necessitating a declaration to protect their rights and eliminate ambiguity.
• The denial must be communicated to the plaintiff to provide grounds for legal action. A declaratory decree is a judicial pronouncement that clarifies the plaintiff's rights. It is a binding decision where the court affirms certain rights in favor of the plaintiff, and such a decree arises only when the plaintiff is denied a right to which they are entitled.
• Subsequently, specific relief is granted to the plaintiff against the defendant who has infringed upon the plaintiff's right. According to Section 34 of the Special Relief Act, 1963, any individual entitled to a legal status or property right can file a suit against anyone denying or challenging their title to such status or right.
• The court has the discretion to make a declaration affirming the plaintiff's entitlement, and the plaintiff is not required to seek any additional relief in such a suit.
• Declaratory decree provisions are designed to fortify the plaintiff's position and deter adverse attacks, ensuring that such attacks do not undermine the plaintiff's case.
• In the case of Naganna v. Sivanappa, it is emphasized that these provisions encourage plaintiffs to assert and enjoy their entitled rights. If a defendant denies a plaintiff's rightful claims, the plaintiff is empowered to file a suit and seek special relief.

Discretion of Court in Declaration of Status

• According to Section 34 of the Special Relief Act, 1963, certain conditions must be met for the declaration of status or right:
• 1.The plaintiff must be entitled to a legal character or a right to property at the time of the suit.
• 2.The defendant must have denied or be planning to deny the plaintiff's rights.
• 3.The declaration sought must be the same as the one to which the plaintiff is entitled.
• 4.The plaintiff must not be in a position to claim any relief beyond a mere declaration of denied rights.

Discretion of the Court

• Even if all four conditions are met, it is not mandatory for the court to grant a declaration. The decision rests entirely on the court's discretion.
• Relief through declaration or specific relief is not a matter of right; it is at the court's discretion.
• In the case of Maharaja Benares v. Ramji Khan, it was established that if a necessary party is absent in a suit, the court will dismiss the declaration suit. Therefore, the presence of both parties is crucial.
• There are no specific rules to determine when the court should exercise its discretionary power. This power is exercised based on the circumstances of each case, without fixed criteria.

Essentials of a Declaratory Suit

A declaratory suit is a legal action where a person seeks a court's declaration regarding their legal rights or status. For a declaratory suit to be valid, certain essential elements must be present. Here are the four key elements:

• Entitlement to Legal Character or Right:The plaintiff must be entitled to a legal character or a right to property at the time of filing the suit. This means that the plaintiff has a legitimate claim to a specific legal status or ownership of property.
• Denial of Rights by the Defendant:The defendant must have denied or be planning to deny the plaintiff's rights. This denial can be explicit or implied, indicating a dispute over the plaintiff's legal entitlements.
• Consistency of Declaration:The declaration sought by the plaintiff should align with the declaration to which the plaintiff is entitled. In other words, the request for a legal declaration must be consistent with the plaintiff's actual rights.
• Limitations of Relief:The plaintiff should not be in a position to claim further relief beyond a mere declaration of rights. The focus of the suit should be on establishing the plaintiff's rights as denied by the defendant, without seeking additional remedies.

Legal Character

• Legal character is linked to an individual's legal status, which indicates their capacity and capabilities as recognized by law.
• It reflects the different capacities and roles a person may have in society, such as being a minor, a certain profession, or belonging to a specific caste or tribe.
• In the case ofHiralal v. Gulab, it was noted that the variety of statuses among natural persons can be attributed to factors likesex, minority, rank, caste, tribe, profession,and others.
• For example, a person's legal character might change if they become a minor or if their profession changes.

Person Entitled to a Right to any Property

The second condition that the plaintiff must fulfill to successfully seek a declaration or special relief related to their right to property is as follows:

• A person seeking special relief under the Special Relief Act, 1963, must have a right to any property. This is a prerequisite for pursuing special relief.
• The Bombay High Court has clarified the difference between "Right to Property" and "Right in Property." To claim a declaration, the plaintiff does not need to demonstrate a right in the property. Instead, they only need to show that they have a right to the property from which they have been denied access or entitlement.

Key Points on Declaration in Legal Context

• The declaration requested by the plaintiff must match the declaration to which the plaintiff is entitled.
• This is crucial because the plaintiff's request for a declaration from the court should align with their legal rights to any property.
• The third condition is essential for both Declaration and Special Relief, emphasizing the need for consistency between the plaintiff's request and their entitlements.

Cloud Upon Title

• A dispute between parties may involve issues related to a person's legal status, rights, or interests in a property.
• A cloud upon the title refers to something that appears to be valid but is actually invalid. It represents the illusion of legal or equitable title or a claim of interest in property that seems to have legal backing but is, in reality, unfounded or unjust to enforce.

Consequential Relief

• If there is a genuine dispute regarding the plaintiff's legal standing or right to property, and the parties involved are clearly defined, the court may refuse to make a declaration in favor of the plaintiff. This is especially true if the plaintiff has the option to seek further relief beyond just a declaration but chooses not to do so.
• The purpose of this legal provision is to prevent multiple lawsuits for the same issue. The legislature intends that if, at the time of the lawsuit, the plaintiff is entitled to claim some form of relief against the defendant that goes beyond a simple declaration of right, they should not burden the defendant with two separate legal actions. Instead, the matter should be resolved once and for all in a single lawsuit.

Discretionary Relief

• Even if the essential elements for relief are established, it is up to the court's discretion to grant it.
• The relief of declaration is not a right that can be claimed automatically.
• If necessary parties are not included in the case, the court has the authority to reject the suit for declaration.
• Under Section 34, the court's discretion is judicial and must be exercised based on established principles.
• The court considers the nature of the obligation for which performance is being sought.
• There is no strict rule for determining whether discretionary relief should be granted or denied.
• The decision depends on the specifics of each case.
• A very slim chance of success does not justify obtaining a declaration that an alienation by a limited owner is invalid.

Negative Declarations

A suit for a negative declaration can be maintained in certain situations, such as when it involves a specific relationship. Here are some key points:

• A suit can be filed to declare that a person is not the plaintiff's wife, and that the defendant is not her son through that person.
• Similarly, a suit can be brought to obtain a negative declaration that there is no landlord-tenant relationship between the plaintiff and the defendant.
• However, if the plaintiff's rights are not affected or likely to be affected, a suit for a negative declaration is not maintainable.
• Such a suit would concern the status of the defendant, which does not impact the civil rights of the plaintiff in any way.

When a Suit for Declaration is Not Maintainable

A suit for declaration may not be maintainable under certain circumstances, which are outlined below:

• When the declaration sought is that the Plaintiff did not infringe the defendant's trademark.
• When the declaration is for the invalidity of a will during the lifetime of the testator.
• No one can seek a declaration for a non-existent right of succession.
• A suit brought by a student against a university for a declaration of having passed an examination.

If a person is seeking only an injunction without any declaration of title to which the Plaintiff is entitled, then the suit will not be maintainable. In the case ofP. Buchi Reddy and Others vs. Ananthula Sudhakar, it was held that a suit for mere injunction without seeking a declaration of title is not maintainable.

Suits for Bare Injunction

• A suit for a bare injunction is not maintainable because both the Plaintiff and Defendant are claiming title on which effective possession cannot be proved. Such suits are not maintainable underSection 41(h) of the Specific Relief Act, 1963.
• In cases of bare injunction, effective possession cannot be established, making the suit invalid.

Effect of Declaration

When a declaration is made under Section 35, it is important to understand its implications. A declaration does not operate as a judgment in rem, meaning it is not binding on the whole world. Instead, it is binding only on specific parties involved in the suit.

Key Points:

• A declaration made under this section is binding only on the parties to the suit and persons claiming through them.
• If any of the parties are trustees, the declaration also binds the persons for whom the trustees would be acting, provided those persons were in existence at the date of the declaration.
• A declaratory decree does not bind strangers to the suit, only the parties and their representatives in interest.
• By virtue of Section 35, a judgment is binding only if it is inter partes (between the parties) and does not operate as res judicata (a matter already judged).
• Such a judgment may be admissible under Section 13 of the Evidence Act.

Preventive Relief

Preventive relief is a legal remedy used when specific performance of a contract is not possible or when damages would not be effective. It involves the court restraining a party from breaching the contract to the extent possible. For instance, if a person agrees to sing at a specific location and promises not to sing elsewhere during the same time, and then threatens to breach this agreement, the court cannot force them to sing. However, the court can enforce the part of the contract that prohibits them from singing elsewhere by issuing an injunction.

Key Points:

• Preventive relief is used when specific performance or damages are not suitable.
• It involves restraining a party from breaching a contract.
• For example, if a singer contracts to perform at a specific location and not elsewhere, the court can prevent them from performing elsewhere.
• Preventive relief is granted through injunctions, which direct a party not to do a specific act.
• Mandatory injunctions are used to compel a party to perform a specific duty.
• This type of relief is governed by Part III of the Specific Relief Act.