Overview of Section 16 of the Specific Relief Act,1963.

Author: Manan Agrawal

Overview of Section 16 of the Specific Relief Act,1963.

Introduction –

Section 16 deals with persons for whom contract cannot be specifically enforced on a special ground of defence of the Plaintiff’s own conduct. This is because the remedy of specific performance does not depend upon merely on the existence of a valid contract, but the court in this regard has to conduct of the plaintiff and other circumstances have to exercise its own judicial mind. The court refuses specific performance if the plaintiff has been guilty of some wrong or wrongful conduct. He who comes into court must come with clean hands.

Refers to Section 16 related to a defect in title. Section 16 related to a personal bar created on the Plaintiff and it is easy to break the section in parts in parts and identify each condition therein. 

The obligation imposed by this section is upon the court not to grant specific performance to the plaintiff who has not met the requirements as mentioned under clauses  (a), (b), and (c ) of this section. A court may not grant specific performance to a plaintiff who has failed to prove that he has performed or is ready and willing to perform his part of the contract.   

Bare Act –

Section 16 read as — “Specific performance of a contract cannot be enforced in favour of a person—

(a) who has obtained substituted performance of the contract under section 20; or

(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in the subversion of, the relation intended to be established by the contract; or

(c) who fails to prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the performance of which has been prevented or waived by the defendant.

Explanation.—For the purposes of clause (c),

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

(ii) the plaintiff must prove the performance of, or readiness and willingness to perform, the contract according to its true construction.”

Explanation –

Clause (a) of the section has been amended in 2018 and now bar the plaintiff who has obtained the substituted contract under section 20 of the Specific relief act,1963 to seek specific performance. Clause (a) read as – “who has obtained substituted performance of the contract under section 20”. If a contract is broken due to non-performance of his part by a party, the party suffering the breach has the option of availing substituted performance through a third party or through its own agency after giving a notice in writing of not less than 30 days to the party in breach. The party suffering the breach is entitled to recover the costs and expenses for the substituted performance by a third party or through its own agency from the party committing the breach. The introduction of a substituted performance by amendment of 2018 in this act has enabled parties to satisfy the performance of the contract work even if there is a breach as the party not in breach can ensure the performance of the contractual objective through a third party or through its own agency. The party not in breach would not suffer inordinate delays of litigation in ensuring the performance of the intended contractual obligations.

Clause (b) – includes people who have become incapable of performing or if it violates any essential term of the contract of which specific performance is sort by the Plaintiff or even if the Plaintiff has acted in a fraudful manner or has wilfully acted invariance or in the subversion of the relation which was intended to be established by the contract which is sorted to be specifically performed.

Clause (b) outlines four grounds where the contract cannot be specifically enforced in favour of the plaintiff. These Four grounds are –

1) his incapability whether legal, physical, or mental to perform his part of the contract.

2) violation of his part of any essential or material term which is yet to be performed

3) fraudulent acts done in the course of contract

4) wilful acts at variance with or in the subversion of contractual relations intended to be established by the contract.

Any of the above mentioned four grounds disqualifies the plaintiff from obtaining specific performance. These grounds demonstrate a violation of essential terms and conditions contract by plaintiff, therefore the question of specific performance at his instance does not subsist.

Clause (c ) – describes conditions precedent to the enforcement of specific performance, the Plaintiff has performed or is ready and willing to perform his part of the contract. This performance or readiness or willingness is required as agreed in the contract. At times, upon the filing of a suit for a specific performance involving payment of money, the plaintiff only needs to prove that he was ready and willing to make the payment, he is not required to actually deposit the sum upon filing the suit, but only has to show (maybe showing his bank statement with enough cash, etc) that he was ready and willing to perform his part. The court at times may even direct the plaintiff to deposit the sum (not mandatory, but the court may as per the circumstances of each case), and if the plaintiff fails to deposit the sum even when so specifically directed, that is proof that the plaintiff was not ready and willing to perform his part. This can be ground to the refusal by the court for the relief sought. Section 16(c) of the Specific Relief Act, 1963 mandates “readiness and willingness” on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous “readiness and willingness” to perform the contract on his part from the date of the contract. The onus is on the plaintiff.

Case Laws –

• In R.C. Chandiok & Anr. vs. Chuni Lal Sabharwal & Ors., (1970) 3 SCC 140 it was observed by the court that “readiness and willingness” cannot be treated as a straight jacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is non- compliance with this statutory mandate, the Court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit.

• In M/S J.P. Builders & Ans. vs A.Ramadas Rao & Anr. has examined one of the most crucial aspects involved in a suit for specific performance. To succeed in a suit of specific performance the Plaintiff shall show that he is ready and willing to perform his part of the contract and that he has sufficient means to honour his obligations under the contract.

• In P.D’Souza vs Shandilo Naudu 2004, the court observed that the defendant did everything which was required of him to be done in the terms of the contract.

• In Sohan Lal vs Union of India AIR 1991, the court observed that for a decree for specific performance under section 16 there must be a proof of valid and enforceable contract between the parties. When the plaintiff in this case was unable to prove execution of the contract of sale between him and the defendant the same cannot be specifically enforced.

• In N.P. Thirugnanam v. Dr. R.J. Mohan Rao, 1995 it was observed that, where it is clear from the evidence that the plaintiff was not “ready and willing” to perform his part of the contract, he would not be entitled to get the decree of specific performance.