Compensation Suits 

A compensation suit in Bangladesh is a civil proceeding seeking monetary redress for loss, injury, property damage or financial harm caused by an unlawful act, breach of contract or failure to fulfil a legal obligation. Claims may arise under the Contract Act, 1872; Specific Relief Act, 1877; CPC, 1908; and Limitation Act, 1908.

When to file a compensation suit?
Compensation may be claimed when a recognised legal right is violated and loss results. Under Sections 73 and 74 of the Contract Act, 1872, compensation covers losses naturally arising from, or contemplated at, the time of breach, but excludes remote or indirect losses. Where a contract specifies a sum for breach, compensation cannot exceed that amount.

Jurisdiction of the court
The proper court depends on the claim’s nature, value and where the cause of action arose. Under Section 19 of the CPC, suits for wrongs to a person or movable property may, in specified cases, be filed where the wrong occurred or where the defendant resides, conducts business or works for gain. Different rules apply to immovable property.

What must a claimant establish?
The claimant must prove the legal basis, defendant’s wrongful act or breach, resulting loss and causal link. Contracts, receipts, bank records, correspondence, photographs, medical or repair records and valuation papers may establish liability and loss. A claimed amount is not automatically awarded without evidence.

The CPC also provides specific remedies: Section 35A allows compensatory costs for false or vexatious claims or defences, while Section 95 provides compensation for unjustified arrest, attachment, injunction or proceedings without reasonable grounds.

Limitation period
The Limitation Act, 1908 prescribes different periods according to the cause of action. Libel, slander, malicious prosecution and wrongful seizure of movable property generally carry 1 year; trespass to immovable property and copyright infringement 3 years; breach of an oral contract 3 years; and breach of a registered written contract 6 years.

How a compensation suit proceeds
The case begins with a plaint stating the material facts, legal basis, jurisdiction, valuation and relief sought, followed by the defendant’s response, framing of issues, evidence and arguments. The plaintiff bears the burden of proof. The court may dismiss the claim or award compensation, costs and, where applicable, interest.
Filing a suit does not establish liability. The claimant must prove legal entitlement and actual loss. In contractual disputes, compensation generally covers natural or foreseeable losses, not remote or speculative damages.

Legal significance
Compensation suits provide a civil remedy for financial loss, property damage and other recognised injuries. However, the applicable law, limitation, jurisdiction, evidence and calculation of damages vary with each dispute. The appropriate remedy therefore depends on the facts and legal basis of the claim.