Specific Performance of Contracts under the Specific Relief Act, 1963

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This article is written by Anushka Singh, a second year student, pursuing BBA-LLB at Unitedworld School of Law, Karnavati University. This article aims to explain the term specific performance under the Specific Relief Act, 1963.

INTRODUCTION

The Specific Relief Act 1963 came in to force on 1st March, 1964. This act is an amended version of the previously repealed, Specific Relief Act 1877. This act was enacted in order to define the laws regarding the specific performance of contracts when the compensation awarded is not enough. It gave discretionary powers to concerned courts to provide specific performance as a relief when needed. However, recently this act did not seem to be up to date with the growth of the country and was amended. Consequently, the Specific Relief (Amendment) Bill, 2017 was passed by Lok Sabha and Rajya Sabha, on 15th March 2018 and 23rd July 2018 respectively. The amended version only allows the courts to award specific performance as a rule and ensure that it is enforced.

Specific Performance

Specific performance is offered by the court, in which a party must perform a specific action as outlined in the existing contract. As a rule, the relief of specific performance is allowed only when there is no other relief that will meet the circumstances of the case. Specific performance is usually ordered in cases where damages won’t be enough to remedy the situation. But for the court to order this exceptional remedy the plaintiff must first prove that the normal remedy of damages is insufficient. The presumption here is that the cases in the contract for the transfer of immovable property, damages will not be enough.

Therefore, specific performance will not be granted when compensation is enough relief. These include the following scenarios, where money won’t provide sufficient relief-

  • When the subject of the contract is an immovable property or a movable property,
  • And such properties or goods are not an ordinary article of commerce i.e. which could be sold or purchased in the market.
  • The article holds a special value or attention of the plaintiff or is not easily available in the market.
  • The property or goods held by the defendant as an agent of the plaintiff.

Section 10 of the Specific Relief Act, 1963 sheds light on the conditions for specific performance of contracts and can be enforced by the provisions contained in sub-section (2) of section 11, section 14 and section 13.

Contracts which cannot be Specifically Enforced

  1. Contracts in which money is enough compensation. In this scenario, the court does not order specific performance of the contract as the remedy of compensation is enough for the damage caused by the breach or non-performance of the contract. 
  2. Contract which requires continuous supervision. These require constant surveillance and supervision which may not be possible for courts to provide. 
  3. When a contract is so dependent on the personal qualification the parties that the court cannot ensure the specific performance of its material terms. Or where performance is dependent on the minute details of the contract.
  4. Contracts of determinable nature. These are contracts which can be revoked or put an end to by a party in the contract. For instance- a partnership in a firm.

Persons against whom Contract can be Specifically Enforced

The persons against whom contracts can be specifically be enforced are listed in section 15 of the act. They are-

  • Any person party to a contractor suit.
  • When the aim of the contract is to settle a marriage or a dispute between family members.
  • Contract with a tenant as a party over a property for life.
  • Representative in interest, which holds certain important ingredients-
  1. Any extra ordinary skill or qualification.
  2. The principal in interest shall not be entitled to specific performance.

Case Laws

Ram Karan v. Govind Lal, in this case, an agreement for the sale of land was communicated. The buyer then went ahead and paid the full consideration to the seller. But after securing the payment the seller refused to execute the sales deed as per the agreement. The buyer filed a suit seeking specific performance of the said contract. The court held that in this case compensation by the way of money would not be enough and the seller was instructed to execute the sale deed in favour of the buyer.

The Supreme Court in 2018, in the case of Sucha Singh Sodhi v. Baldev Raj Walia (Civil Appeal No.  3777 of 2018) held that specific performance and permanent/temporary injunction cannot be claimed in one suit.

In the case of Geeta Rani Paul v. Dibyendu Kundu, the apex court held that when a plaintiff files a suit about dispossession, if he can prove that he is entitled to that property it will be enough and other slight matters such as being divested from the property will not be needed to prove.

The Kerala High Court in 2017 held that a plaintiff is eligible to specific performance of a contract only if the original terms of the contract remain unchanged. Any variation in terms of the contract, including ones for the benefit of the defendant will make the plaintiff ineligible for specific performance. 

CONCLUSION

Commercial activities in India like foreign direct investments, infrastructure developments, public-private partnerships, etc. are taking place daily in huge numbers. Making the Specific Relief Act, 1963 a highly crucial legislation. And there are only a few legal remedies a party may consider when another party has breached the contract or not performed. Certain times in these cases the monetary values recovered are not enough to remedy the damage suffered by the plaintiff. In this scenario-specific performance comes into play. It is mentioned in section 10 of the said act. The decision of specific performance is largely left to the courts. However, for a plaintiff to be eligible for this remedy, he must prove that the regular remedy was not enough to compensate him to the court.

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