Analysis of the judicial precedent of Supreme Court No. 733; Emphasizing the nature of money and the distinction of depreciation, delayed compensation and damage caused by rising prices

دانشنامه حقوق اقتصادی

Article 1, Volume 27, Issue 17, June 2020, Pages 1-24   

Document Type: Scientific research

DOI: 10.22067/lowecon.2021.47236.0

Authors

Abbas Karimi¹; Mohammad Hadi Jvaherkalam^{* 2}

¹Professor University of Tehran, Faculty of Law and Political Sciences

²PhD Graduated in private law, University of Tehran.

Abstract

Introduction
Due to the high rate of inflation in Iran, which itself is caused by various factors, our legal system and judicial procedure has faced the problem of devaluation of money and how to compensate it for many years. To solve this problem, the legislator has limited and incomplete solutions in Article 522. In order to compensate for the decrease in the value of money and Article 1082 BC. It has provided for the adjustment of Rail dowries. In particular, in the case where the sale is void due to the merits of the seller and the non-enforceability of the owner and the seller of the invoice must return the price to the buyer, how the seller undertakes to reject the price due to devaluation has always been a matter of debate. This problem becomes more acute when a few years have passed since the transaction and then it is discovered that the seller belongs to another and the owner of the transaction does not enforce it. In this case, the purchasing power of money and its value has decreased due to high inflation and the return of the same nominal value seems unfair. In particular, the buyer is deprived of the minimum interest of his money which is in the possession of the prying seller and he has benefited from it, because if the customer had invested his price in the bank, he would at least receive the profit from his participation at the rate of inflation rate, and it is possible that the profit on account of the participation would be more than the inflation rate. In addition, due to rising prices, the buyer will have to pay a much higher price to buy similar financial goods, and therefore, the idea of compensation is necessary. The vote of procedure No. 733 of the Supreme Court seeks to resolve these issues; But it itself adds to the doubts and ambiguities and has many shortcomings and flaws.
 
Methodology
In the present study, descriptive and analytical research methods have been used and the method of collecting information and data is library. Also, the issue has been analyzed from a jurisprudential, legal and judicial point of view.
 
Results & Discussion
Paper currencies are of a special nature today and, unlike gold and silver, are of no intrinsic value; they are only of credit value, and the banknote is the only representative of money. Therefore, the value of today's money is its purchasing power and its exchange power. According to this analysis, the debtor's debtor must return to the creditor the value equivalent of what he has received in order to fulfill his obligation, and the mere reimbursement of its nominal value, if the purchasing power of money has decreased, does not absolve him of liability. So, what he owes in addition to the nominal value of money in terms of inflation is not an excess of his debt, but the fulfillment of the principle of his commitment, the value of which is diminished and compensated for by an amount equal to the rate of inflation. Accordingly, the devaluation of the currency differs from that of usury, as well as the damages for late payment, and its compensation must be accepted as a general rule.
 
Conclusion and Suggestions
According to the provisions of the vote of Procedure No. 733 of the Supreme Court, the prying seller should simply return the price in terms of "devaluation" and is not responsible for the increase in property prices. The General Legal Department of the Judiciary also commented in 2015 that the devaluation of the price in the vote of procedure No. 733 is calculated based on the Central Bank's index. This is while was predicted compensating for the devaluation of money as a general rule, before the vote of procedure in Article 522. The only advantage of the Unity of Procedure vote is that the conditions set out in Article 522 are not necessary to compensate for the devaluation of the price. Of course, this innovation is not very noticeable, because the volatile bond must return the price according to the rule of iodine guarantee, and the condition of the claim stipulated in the mentioned article about the reduction of the value of the price is automatically eliminated. In addition, "damages resulting from price increases", which were the main differences between Branches 3 and 11 of the Court of Appeals of West Azerbaijan Province, in the unanimous decision of the procedure has been compensated for the reduction of money laundering and thus, demanding price differences and daily prices. The prying scales are out of the scope of the vote. Therefore, in order to compensate for the difference between the contractual price in terms of inflation rate and the current day price, the general rules of coercive guarantee and Article 391 BC must be applied to the general rules. It turns out that the existing rules make the said damage compensable, because the buyer is deprived of having a seller by the invalidity of the sale, and this is a certain benefit to the detriment of custom, and therefore, the loss agent must compensate the said loss. The criterion for calculating the amount of compensable loss is basically the same, that is, the difference between the price and the price of the day should be calculated and paid according to the seller; however, conventional predictions of individuals and special conditions of the seller must also be considered. Therefore, it is suggested that the legislature of Article 522. Corrects and considers the devaluation of money as absolute and even without the conditions stipulated in this article. Also, the judicial procedure considers the damages caused by the increase in prices to be compensable based on the findings of the present research.
 

Keywords

judicial precedent No. 733؛ Devaluation of the Money؛ Damage for Raise of Price؛ Usury؛ Damage for delay in payment; Loss of Prospective Profits

References

[1] A group of researchers under the supervision of Seyyed Mahmoud Hashemi Shahroudi (2005), Encyclopedia of Jurisprudence according to the Religion of Ahl al-Bayt, v. 2, 1^st ed., Qom: Moaseseh daerato-al-Ma’aref-e Fegh’he Eslami. (In Persian).

[2] Al-Sanouri, A. Ahmad (no date), Alvasit, v. 4, Beyrout: Da’ar Ehya (In Arabic).

[3] Bahjat, Mohammad Taghi (2007), Estefta’at, v. 4, 1^st ed., Qom: Daftar Ayatollah Bahjat. (In Persian).

[4] Bazgir, Yadollah (2000), Civil Act in the mirror of the Supreme Court's Judgments: Sale and Rulings about it, 3^rd ed., Tehran: Entesharat Ferdosi. (In Persian).

[5] Behbahani, Vahid (1996), Hashiyat Majma al Fa’edeh, 1^st ed., Qom: Moghadas Ardabil Commemoration Congress. (In Arabic).

[6] Emami, Seyyed Hassan (2006), Civil Law, V. 1, 26^th ed., Tehran: Entesharat Eslamiyeh. (In Persian).

[7] Esfahani, S. A. (2001), Vasilat al Nejat, 1^st ed., Qom: Moaseseh Nashr Asar Emam Khomeini. (In Arabic).

[8] Fazel Lankarani, Mohammad (2004), Jame al Masa’el, v. 1, 1^st ed., Qom: Amir Ghalam. (In Persian).

[9] Ghanavati, Jalil, et al., (2019), Analysis of Theoretical Foundations the judicial precedent of Supreme Court No. 733 regarding the ZAMAN DARAK, Jurisprudence and Principles of Islamic Law, (1), 145-162. (In Persian).

[10] Gharibeh, Ali (2008), Legal Jurisprudence Review of the Ability to Claim the Amount of Devaluation of the Money and Compensation for Late Payment, Jurisprudence and the History of Culture, (16), 49-64. (In Persian).

 [11] Hashemi Shahroudi, Seyyed Mahmoud (1995), Responsibility for Devaluing Money, Fefgh Ahl Bayt, (2), 48-87. (In Persian).

[12] Hashemi Shahroudi, Seyed Mahmoud (2002), Ghara’at Feghhiyat  Mo’aserat, v. 2, 1^st ed., Qom: Moaseseh daerat-al-Ma’aref-e Fegh’he Eslami. (In Arabic).

[13] Hosseini Maraghi, S. A. (1996), Al-Anavin, 1^st ed., Qom: Daftar Entesharat Eslami. (In Arabic).

[14] Jalilvand, Yahya (2016), Criticism of Two Judicial Rulings: Compensation from the perspective of Rising Prices due to Economic Inflation, Journal of the Central Bar Association, (235), 159-168. (In Persian).

[15] Judiciary Jurisprudential Research Center (2003), Jurisprudential and judicial Istifta, Selling another property, Majalleh Payam Amouzesh, (5). (In Persian).

[16] Katouziyan, Naser (2008 A), Civil Law: General Rules of Contracts, v. 4, 5^th ed., Tehran: Enteshar Co. (In Persian).

[17] Katouziyan, Naser (2008 B), Out-of-Contract Responsibility: Civil liability, v. 1, 8^th ed., Tehran: Tehran University Press. (In Persian).

[18] Katouziyan, Naser (2013), Civil Law: Inheritance, 5^th ed., Tehran: Mizan. (In Persian).

[19] Khalessi, Mohammad Bagher (1994), Rafa’ al Gharar an Gha’edat La Zarar, 1^st ed., Qom: Daftar-e Entesharat Eslami. (In Arabic).

[20] Kharrazi, S. Mohsen (2005), Paper Money, Majalleh feghh Ahl bayt, (47), 93-110. (In Persian).

[21] Khomeini, S. Roohollah (2001), Estefta’at, v. 2, 5^th ed., Qom: Daftar Entesharat Eslami. (In Persian).

[22] Khomeini, S. Roohollah (no date), Tahrir al Vasilat, v. 1, 1^st ed., Qom: Dar al Elm. (In Arabic).

[23] Makarem Shirazi, Naser (2001), Usury and Islamic Banking, 1^st ed., Qom: Entesharat Madreseh Emam Ali. (In Persian).

[24] Makarem Shirazi, Naser (2006), Estefta’at-e Jadid, v. 2 & 3, 2^nd ed., Qom: Entesharat Madreseh Emam Ali. (In Persian).

[25] MirJalili, S. Mohsen (2009), Compensation for Devaluation; Theory and Application, Iran's Economic Research, (4), 207-229. (In Persian).

[26] Modarres, S. Hassan (1987), Al Rasa’el al Feghhiyah, 1^st ed., Tehran: The Commemoration of the 50^th Anniversary of the Martyrdom of Modarres. (In Arabic).

[27] Mohammadi, Pezhman (2012), Zarourat Ghahri Danestan Zaman Darak, Danesh va Pazhouhesh Hoghoughi, (2), 185-222. (In Persian).

[28] Montazeri, Hossein Ali (no date A), Estefta’at Masa’el Zaman, 1^st ed., Qom: No publisher. (In Persian).

[29] Montazeri, Hossein Ali (no date B), Resaleh Estefta’at, v. 2 & 3, 1^st ed., Qom: No publisher. (In Persian).

[30] Mousavi Bojnourdi, S. Mohammad (1980), Ghava’ed Feghhiyah, v. 1, 3^rd ed., Tehran: Moaseseh Orouj. (In Persian).

[31] Mousavi Bojnourdi, S. Mohammad (1993), Opinion of jurists on jurisprudential and legal issues arising from the devaluation of money, Majalleh Rahnamoun, (6), 103-120. (In Persian).

[32] Na’ini, M. Mohammad Hossein (1997), Monyat al Taleb, v. 3, Qom: Moaseseh Nashr Eslami.

[33] Najafi, Mohammad Hassan (1983), Javaher al Kalam, v. 25, 7^th ed., Beyrout, Dar Ehya.  (In Arabic).

[34] Naraghi, Mowla Ahmad (1996), Ava’ed al Ayyam, 1^st ed., Qom: Entesharat Daftar Tablighat Eslami. (In Arabic).

[35] Nikfar, Mehdi (1993), Civil Act in the Judgments of the Supreme Court, 2^nd ed., Tehran: Keyhan. (In Persian).

[36] Rostami, E., et al. (2014), The Nature and Extent of the Claimable Damages from the Seller if the seller does not own it (Review of the Judicial Precedent of Supreme Court No. 733), Judgment Quarterly: Judicial Studies, (7), 45-66. (In Persian).

[37] Rouhani, S. Sadegh (1991), Feghh al Sadegh, v. 18, 1^st ed., Qom: Dar al Ketab. (In Arabic).

[38] Sadr, S. Kazem (1996), The Economy of Early Islam, 1^st ed., Tehran: Shahid Beheshti University Press. (In Persian).

[39] Safaii, S. Hossein, & Rahimi, H. (2018), Civil Liability (out-of-Contract Responsibility), Tehran: Samt. (In Persian).

[40] Safi Golpaygani, L. (1996), Jame al Ahkam, v. 1, 4^th ed., Qom: Entesharat Hazrat Ma’asoumeh. (In Persian).

[41] Seifi Mazandarani, A. A. (2008), Dalil Tahrir al Vasilat – Feghh al Reba, 1^st ed., Tehran: Moaseseh Nashr Asar Emam Khomeini. (In Arabic).

[42] Shahidi, Mehdi (2007 A), Civil Law, v. 3: Effects of Contracts and Obligations, 3^rd ed., Tehran: Majd. (In Persian).

[43] Shahidi, Mehdi (2007 B), Civil Law, v. 5: Dissolution of Obligations, 8^th ed., Tehran: Majd. (In Persian).

[44] Shiravi, Abdolhossein (2001), Critique and Review of the Provisions of the Code of Civil Procedure regarding the Claim for Contractual Damages and Late Payment, Mojtama Amouzesh A’ali Qom, (9), 7-50. (In Persian).

 [45] Tabatabayi, S. Ali (1997), Riyaz al Masa’el, v. 14, 1^st ed., Qom: Moaseseh Al al Bayt. (In Arabic).

[46] Tabatabyi Yazdi, S. Mohammad Kazem (1993), Takmalat al Orvat al Vosgha, v. 1, 1^st ed., Qom: Davari. (In Arabic).

[47] Tabatabayi Yazdi, S. Mohammad Kazem (1994), So’al va Javab, 1^st ed., Tehran: Markaz Nashr al-Oloum al-Eslami. (In Persian).

[48] Tabibiyan, S. Mohammad (1988), Eghtesad Kalan, Tehran, Entesharat Sazman Barnameh va Boudjeh. (In Persian).

[49] Tabrizi, Javad (no date), Estefta’at-e Jadid,  v. 2, 1^st ed., Qom: No publisher. (In Persian).

[50] Tahmasebi, Ali, & Shirazi, Ali (2019), The Possibility of Claiming Damages Resulting from the Devaluation of the Price in case of Termination of the Contract, Journal of Islamic Law, (49), 247-270. (In Persian).

[51] Tajlil, Aboutaleb, et al., (1996), Jurisprudential Rulings of Money, Majalleh feghh Ahl bayt, (7), 9-53. (In Persian).

[52] Vahdati Shobeiri, S. Hassan (2003), Comparative Study of Compensation for Late Payment in Iranian Law and Imami Jurisprudence, Islamic economy, (12), 93-110. (In Persian).

[53] Yousefi, Ahmad Ali (1998), Poul Emrouz, Mesli, Gheimi ya Mahiyat Sevvom, Fefgh Ahl Bayt, (14), 95-122. (In Persian).

[54] Yousefi, Ahmad Ali (2002), Jurisprudential Study of Theories of Compensation for the Devaluation of Money (2), Fefgh Ahl Bayt, (31), 59-137. (In Persian).