Contracts which cannot be specifically enforced under the Specific Relief Act, 1963

Contracts which cannot be specifically enforced under the Specific Relief Act, 1963

Author: Ayush Jain, Unitedworld School of Law, Gandhinagar, Gujarat

What is Specific Relief Act?

The Specific Relief Act is an act of the parliament which was passed on 13 December 1963. This act replaced an earlier Act of 1877. Many times the damages/ compensation given to the plaintiff are not enough, hence this Act talks about the reliefs which are enforced by the court on the other party which fails to perform a duty under the agreed contract. This relief is provided by the non-performing party itself as the monetary compensation in the form of damages could not satisfy the other party in the contract.

The remedies which are provided in this Act are as follows:

• Recovery of possession of the property.
• Specific performance of contracts.
• Preventive Relief.
• Declaratory Relief.
• Injunction.
• Rectification or Cancellation of Instruments and rescission of contracts.

To read the full Act, click on the official link provided here:-

http://legislative.gov.in/sites/default/files/Specific%20Relief%20Act%201963-47.pdf

In this section, we will talk about the types of Contracts that are not specifically enforceable under this Act.

Which types of Contracts are not specifically enforceable?

Section-14 in Part-2, Chapter-2 of The Specific Relief Act, 1963 specifically talks about the types of contracts that are specifically not enforceable. This article was amended on 1 October 2018, hence after which many parts were removed from the same.

This this Section says:-

“^[1]The following contracts cannot be specifically enforced, namely:–

(a) where a party to the contract has obtained substituted performance of a contract in accordance with the provisions of section 20;

(b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise;

(c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and

(d) a contract which is in its nature determinable.^[2]”

Now let us discuss these types of contracts one by one with suitable examples:-

(a) where a party to the contract has obtained substituted performance of the contract in accordance with the provisions of section 20.

Section 20 of the Specific Relief Act says that if any of the party is unable to perform the duties as per the contract, then the other party can execute the said performance by a third party or his own agency, and all the expenses incurred must be barred by the non-performing party.

Hence the Sub-clause (a) talks about those contracts which are mentioned in section 20 cannot claim a special relief.

Illustration:

If A and B enter into a contract of building a house by A and if due to some reasons A is unable to perform the contract then B can execute the said contract by some other third party eg. C. and all the expenses should be barred by the non-performer A, and after which this contract cannot claim the Specific relief under this act.

(b) A contract, the performance of which involves the performance of a continuous duty which the court cannot supervise.

This clause says that those contracts involve a type of duty that has a nature of continuous performance, hence it is practically impossible for the court to supervise the performance of the contract. So, in this situation, a party cannot get relief under this act.

For Example, a breach of contract that was involved in constructing a road cannot get relief under this act as it is a continuous duty that the court cannot supervise.

(c) A contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms.

This Sub-clause says that if in a contract which involves a duty of personal qualifications or some skills which is possessed by any of the parties, and hence the nonperformance of the contract cannot be relieved under this Act as the court cannot enforce a specific performance for personalized skills.

For Example, A and B enter into a contract in which B has to make a personalized painting for A. Due to some reasons A fails to do so. Now, A cannot enforce B for the performance of the contract under this Act, however, I may get the compensation for this non-performance.

(d) A contract which is in its nature determinable.

If a contract which involves a condition which says that after some time that contract will be terminated, hence these types of contracts which are determinable in nature cannot get relief under this Act due to nonperformance.

For Example, A and B entered into a contract which involves a condition that it may get terminated after some time. So in a condition or nonperformance of the contract, none of the parties may enforce the duty of performance on the other party involved in a contract under this Act.

Important cases

• GENERAL MANAGER, PENCH AREA, PARASIA, M.P. Vs. BARKAN ALIAS KANHAIYA^[3]

In this case, the High Court of M.P. held that the stand of the appellant that in view of Section 14 of the Specific Relief Act, 1963, the suit for specific performance is not maintainable and is also subject to certain exceptions. It was held that since there was a promise to employ four persons the appellants should not be permitted to wriggle out the promise by taking the plea that Section 14 of the Act bars a suit of this nature filed by the petitioner for enforcement of duty.

• SANJANA M. WIG (MS) Vs. HINDUSTAN PETROLEUM CORPN. LTD.^[4]

The appellant and one Smt Bimla Devi T. Obhan, who were partners in “M/s Tilak Automobiles” and the respondent entered into a dealership agreement. Admittedly the said agreement was terminated by the respondent by a notice dated 19-3-2004 in terms of clause 55 of the said agreement. Thus the court did not provide the petitioner with the relief as the agreement got terminated.

• STATE BANK OF INDIA AND OTHERS Vs. S.N GOYAL^[5]

In this case it was held “that whether a direction by the civil court to reinstate the respondent amounted to granting specific performance of a contract of personal service which is barred by Section 14 of the Specific Relief Act, 1963”

The court rejected this petition and did not give relief under the said Act it does not fulfill the conditions of the Act.

• Ram Awadh (dead) by LRs. and others vs. Achhaibar Dubey and another^[6]

It was submitted that the case of the plaintiff was not one for specific performance as this was a case wherein terms of clause 3 of the said agreement, the said defendants could have been ordered to pay double the amount of earnest money i.e. Rs.66,000/-. Shri Gude has further submitted that the case at hand is also a case in which the Court cannot supervise the agreement between the parties. Hence it was submitted that the default in non-execution of the sale deed was on the part of the plaintiff in reference to Section 14 of the Specific Relief Act 1963

CONCLUSION

Specific Relief Act of 1963 gives a right to the party involved in a contract and in which due to nonperformance of the contract, any of the parties may enforce the nonperforming party to perform their duty as many times compensation may not satisfy the other party which suffered damages due to nonperformance of the contract. Section-14 of this act talks about the Contracts which cannot be specifically enforced under the Specific Relief Act, 1963.

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^[1] Subs. by Act 18 of 2018, s. 5, for section 14 (w.e.f. 1-10-2018).

^[2]https://indiacode.nic.in/show-data?actid=AC_CEN_3_20_00009_196347_1517807320084&sectionId=30229&sectionno=14&orderno=14

^[3] (SC)-2007-12-58

^[4] Civil Appeal No. 7337 of 2004 (SC)

^[5] Appeal (civil)  4243-4244 of 2004 (SC)

^[6] A.I.R. 2000 S.C. 860)