The dispute between State Bank of Saurashtra and Punjab National Bank over the purchase of 7.5 crore units of the Unit Trust of India has been settled in the Supreme Court with the former paying Punjab National Bank Rs 212 crore.
Saurashtra Bank had appealed to the Supreme Court against the order of the special court on securities which had given a decree in favour of PNB. It was alleged by PNB that it had paid more than Rs 100 crore for the units, but the units were never delivered.
It, therefore, wanted the amount back with interest apart from compensation following the breach of contract. No amount was paid by the Saurashtra Bank. Therefore, PNB moved the special court and it granted relief to it.
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In the Supreme Court, Saurashtra Bank admitted that the units were not delivered and PNB would be entitled to the refund of the money along with compensation calculated according to the principles contained in Section 73 of the Contract Act.
What was in dispute was the relief to be granted to PNB. The Supreme Court observed that it would have been appropriate for the special court to have computed and awarded damages in addition to ordering refund rather than requiring Saurashtra Bank to purchase the units and give them to PNB.
The way the special court decreed the specific performance was