An Indispensable Analogy of Specific Performance under the Specific Relief Act

An Indispensable Analogy of Specific Performance under the Specific Relief Act

Author: Abhay Saxena, Bharati Vidyapeeth New Law College, Pune.

Introduction:

Specific Performance is an equitable relief given by a court in case of breach of contract in the form of a judgment where the defendant has to perform the contract according to its terms and stipulations.

A contract is an agreement which is enforceable by law and it is the obligation of the contracting parties to towards the other to perform such terms of the contract but if one party fails to do so, then there arises the right of the other party at his discretion either to insist on the performance the contract or to obtain satisfaction for its non-performance.

Important sections concerning Specific Performance:

1. Section 10: “Cases in which specific performance of a contract is enforceable.”

This section talks about the cases or circumstances where the specific performance of a contract will be enforceable. Thus, Section 10 provides for specific performance either in the case where damages can’t be ascertained or where money doesn’t as active as an adequate relief for its non-performance. This can be understood for a case law:

Banwari Lal Agarwala v. Ram Swarup Agarwala: In this case, the plaintiff has entitled to a decree of specific performance under the Specific Relief Act as here the plaintiff was always ready to perform his part of the contract while the defendant, even after several notices, didn’t perform his part of the contract and thus the court granted the plaintiff the relief of specific performance.

The specific performance of the contract will also be granted in a case where the money is not an adequate relief in the facts and circumstances of the case. This can also be understood with the help of a case law:

Ram Karan V. Govind Lal: There was an agreement for the sale of agricultural land. The buyer had paid full sale consideration to the seller, but the seller even then avoided executing the sale deed as per the agreement. The buyer brought an action for the specific performance of the contract. It was held that the case is covered under Section 10(b) of the act.

2. Section 12: “Specific Performance of part of the contract”

Section 12 of the Specific Relief Act states that the court will not compel the specific performance of a contract unless it can enforce the whole contract.

This can be understood by the following case law:

 Merchants Trading Co. v. Banner: In this case, Lord Romilly observed that: “This court cannot specifically perform the contract piecemeal, but it must be performed in it’s entirely if performed at all.” A court of equity is not concerned to make the new contract for the parties.

Thus, this case laid down the guidelines for Section 12 and the rule above is laid down in Section 12(1).

The other three subsections are as follows:

Section 12(2) becomes applicable when the part of a contract that cannot be performed is the conveyance of an item which is only a small portion of the whole in value and admits of compensation in money.

Section 12(3) lays down the second exception the general rule under Section 12(1). The equitable principle underlying this section is that the specific performance of the contract will not be enforced for the benefit of the purchaser and cannot operate to his detriment.

 Section 12(4) lays down the third exception to the general rule under Section 12(1) is that when a contract consists of several parts which are separate from and independent of one another, and some of which cannot or ought not to be performed, such part or parts as can and ought to be performed may alone be specifically enforced. The court must not make a new contract for the parties, nor proceed merely on surmises that the requirements of the section would be satisfied, if further inquiry were allowed.

3. Section 14: “Contracts not specifically enforceable”

The contracts which cannot be specifically enforced are as follows:

(a) Where compensation is adequate: Courts will not offer the specific performance of a contract where the aggrieved party can be adequately compensated in terms of money.

(b) Contracts involving personal skill: The courts can’t supervise the performance of a contract that runs into the minute details or is dependent upon the personal qualifications of the promisor or is otherwise volitional.

(c) Contracts of determinable nature: Specific performance isn’t ordered where the contract is of a determinable nature. An example will help us understand better:

 A and B contract to become partners in a certain business, the contract didn’t specify the duration of the proposed partnership. The contract can’t be specifically enforced, for, if it were to be performed, either A or B might at once dissolve the partnership.

(d)  Contracts requiring constant supervision: A contract can’t be specifically enforced where it involves the performance of a continuous duty that the court cannot supervise.

4. Section 15: “Who may obtain specific performance?”

The following can obtain the relief of specific performance from the court:

1. Any party

2. The representative-in-interest or the principal, of any party

3. Contracts of marriage settlement

4. A contract entered by the tenant for life in the exercise of power

5. A reversioner in possession

6. A reversioner in remainder

7. Amalgamation of companies

8. Contracts entered into by the promoters of the company

5. Section 16:  “Personal bars to relief”

The specific performance of a contract cannot be enforced in favour of a person:

1. A person cannot seek specific performance where the circumstances are such that he would not have been entitled to compensation for breach of contract.

2. A person who is guilty of any of the following can’t claim specific performance:

(a) Incapable of performing the contract

(b) Violated an essential term of the contract on his part to be performed

(c) Has acted in fraud of the contract

(d) Has wilfully acted at variance with of the relation intended to create by contract.

3. A person who has failed to prove that he is willing or has performed the essential terms of the contract.

6. Section 20: “Discretion as to decreeing specific performance”

Section 20, further, lists circumstances in which the court may at its discretion refuse specific enforcement. The section opens with the remark that the jurisdiction to decree specific performance is discretionary and the court is bound to give such relief merely because it is lawful to do so. This case law will help us better understand this:

Lourdo Mari David v. Louis Chinnaya Arogiaswamy: In this case, the plaintiff’s case was based on certain false and incorrect facts and thus the relief of specific performance wasn’t granted to him.

The Supreme Court has restated the factors which have to be kept in mind in exercising the power of discretion:

(a) Whether the plaintiff was ready and willing to perform his part of the contract in terms of Section 16.

(b) Whether it is a case for exercise of discretion by the court for decreeing specific performance under Section 16.

(c) Whether there was laches on the part of the plaintiff in approaching the court.

7. Section 21: “Power to award compensation in certain cases”

(a) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach such performance.

(b) If in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.

(c) If in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.

(d) In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in section 73 of the Indian Contract Act, 1872 (9 of 1872).

(e) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint provided that where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation.

Conclusion:

Thus, specific performance is a relief which is granted by the court to the party who wants to insist on the performance of the contract by the other party who has forborne from performing it.

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