ALTERNATIVE REMEDIES OF OF

1. The terms “Specific Performance” is not defined in the Specific Relief Act,

1963. According to the Oxford Dictionary “Specific Performance” means, the performance of a contractual duty, as ordered in cases where would not be . Law of Specific Relief has been enacted for certain kinds of specific relief. Law of Specific Relief is a kind of procedural law and it supplements to the Code of Civil Procedure, 1908. Principles of specific relief are recognized by the English Courts and they are based on rules and practices of

Common law courts.

2. Specific relief is a remedy which aims at the exact fulfillment of an obligation.

The specific Relief Act, 1963 came into force on 13-12-1963 replacing old Specific

Relief Act, 1877. The real object of this Act is to give party seeking specific relief of protection of some civil right or the prevention of some civil wrong. Civil injury means violation of obligation. Specific relief is a form of judicial redress.

It is an equitable relief.

3. ‘Ubi jes ibi remedium’ means where there is a right there is a remedy. The constitution of India recognizes the “Right to

Property” in Article 300-A. Therefore, no person shall be deprived of his property save by authority of law. The enumeration of rights and duties guaranteed by the constitution is supplemented by legal devices which help the individual to enforce his rights.

4. In other words, a contract is an agreement upon sufficient consideration to do or not to do a particular act. The party on whom this contractual obligation rests must not fail to discharge such obligation. In case of his failure, the other party will have a right sue for performance of the contract. This is called

‘Specific Performance’. Orders of specific performance are granted when damages are not an adequate remedy, and in some specific cases such as land sale. Such orders are discretionary, as with all equitable remedies, so the availability of this remedy will depend on whether it is appropriate in the circumstances of the case. Under the Specific Relief Act, 1963, courts grant specific performance when they perceive that awarding damages will be inadequate relief. Specific performance is deemed an extraordinary remedy, awarded at the court’s discretion.

Object and Scope

5. The object of the Act may best be stated in the words of Statement of

Object and Reasons which runs as under:-

This Bill seeks to implement the recommendation of the Law Commission contained in its Ninth Report on the Specific Relief Act 1877, except in regard to

Section 42 which is being retained as it now stands. An earlier Bill on the subject introduced in the Lok Sabha on the 23 rd December, 1960, lapsed on its dissolution. The notes on clauses extracted from the Report of the Law

Commission, explain the changes made in the existing Act”.

6. The object of the Specific Relief Act is confined to that class of remedies which a suit or seeks to obtain and a court of justice seeks to give him the very relief to which he is entitled. The Law of Specific Relief seeks to implement the idea of Bentham, who said: “The law ought to assure me everything which is mine, without forcing me to accept equivalents, although I have no particular objection to them”.

7. The Specific Relief Act explains and enunciates the various reliefs which can be granted under its provisions, provides the law with respect to them. It provides for the exact fulfillment of the obligation of the specific performance of contract. It is directed to the obtaining of the very thing which a person is deprived of and ought to be entitled to ask for. It is a remedy by which party to a contract is compelled to do or omit the very acts which he has undertaken to do or omit. The remedies which has been administered by Civil Courts of Justice against any wrong or injury fall broadly into two classes:

(i) those by which the suit or obtains the very thing to which he is entitled, and (ii)those by which he obtains not that very thing, but compensation for the loss of it. The former is the specific relief.

Thus specific relief is a remedy which aims at the exact fulfillment of an obligation. It is remedial when the court directs the specific performance of contract and protective when the court makes a declaration or grants an .

BY WHOM CONTRACT MUST BE PERFORMED

1] By the promisor :- A contract may be performed by the promisor, either personally or thorough any other competent person

2] By the agent:- Where personal skill is not necessary and the work could be done by anyone, the promisor or his representative may employ a competent person to perform it. Thus a contract to sell goods can be assigned by the seller to his agent.

3] By the representative:- In the event of the death of the promisor before performance, their representatives are bound by the promises, unless personal consideration are the foundation of the contract.

4] By the third person:- If the promise accepts performance of the promise form a third party, there is discharge of the contract. Once the third party performs the contract, and that is accepted by the promisee there is an end of the matter and the promisor is thereby discharge.

Section 10 of the Specific Relief Act reads as under :-

Cases in which specific performance of contract enforceable. - Except otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced, -

(a)When there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done; or

(b) When the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.

Explanation – Unless and until the contrary is proved, the Court shall presume -

(i) that the breach of a contract to transfer immovable property can not be adequately relieved by compensation in money; and

(ii) the breach of a contract to transfer movable property can be also so relieved except in the following cases :-

(a)where the property is not an ordinary article of commerce, or of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;

(b)where the property is held by the defendant as the agent or trustee of the plaintiff.

From provisions of Section 10, it appears that specific performance can be granted when there is no standard for ascertaining actual damage or when monetary compensation for non-performance of the agreement is found to be adequate. What is unfolded from Section 10 is, that specific performance should be considered in cases where it is difficult to ascertain loss in monetary terms.

As a natural corollary, when non-performance of the agreement can be adequately compensated in terms of money, the Court should not exercise its discretion of granting specific performance. The exception appended to the

Section makes it clear that whenever there is breach of contact with regard to transfer of immovable property, unless and until the contrary is proved, the

Court should presume that monetary compensation can not be adequate for breach of contract to transfer immovable property. Same principle is applicable in case of movable property if movable property is of such a nature which is of special interest or value and which can not be substituted by another movable property.

Section 14 of the Specific Relief Act spell out circumstances in which specific performance can be refused. Under Section 14(1), in following cases specific performance can not be granted :-

(a) a contract for the non-performance compensation in money is an adequate relief; of which

(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the Court cannot enforce specific performance of its material terms;

(c) a contract which is in its nature determinable;

(d) a contract the performance of which involves the performance of a continuous duty which the Court can not supervise.

However, sub-section 3 has overriding effect over sub-section 1 and even though cases are covered by clause (a) or clause (c) or clause (d) of sub-section 1 yet Court may enforce specific performance in following cases :-

(a)(i)where the suit is for the enforcement of a contract, - to execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once : Provided that where only a part of the loan has been advanced, the lender is willing to advance the remaining part of the loan in terms of the contract; or

(ii) to take up and pay for any debentures of a company;

(b) where the suit is for, -

(I) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or

(ii) the purchaser of a share of a partner in a firm;

(c)where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land;

Provided that the following conditions are fulfilled, namely :

(i)the building or other work is described in the contract in terms sufficiently precise to enable the Court to determine the exact nature of the building or work;

(ii) The plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and the

(iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which building is to be constructed or other work is to be executed.

Section 20 of “ Specific Relief Act” provides that

Discretion as to decreeing specific performance:-

(1) The jurisdiction to decree specific performance is discretionary, and the

Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by

Judicial principles and capable of correction by a Court of appeal.

(2)The following are cases in which the Court may properly exercise discretion not to decree specific performance--

(a) Where the terms of the contract or the conduct of the parties at the time entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or,

(b) Where the performance of the contract would involve some hardship on the defendant which he did not foresee,

(c) Where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

Explanation 1:- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause(b).

Explanation 2:- The question whether the performance of a contract would involved hardship on the defendant within the meaning of clause(b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

(3) The Court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.

(4)The Court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforeable at the instance of the other property.

Before of granting decree for specific performance the Court must be satisfied that i.The contract is certain and unambitious in its terms. ii. A valuable consideration is passed, iii. The contract is fair, iv. The contract is not vitiated by fraud mistake and misrepresentation, v. The contract does not offend third party vi. The contract does not impose a harm and unconscionable bargain, viii. The plaintiff is not guilty of unreasonable delay and latches.

After considering the provision of Sec. 20 of the Act, it appears that merely because of contract is lawful, the specific performance should not be granted. Further, while using the discretion the court has to consider some of the factors in between the parties. The discretion of the court is not arbitrary but should be sound and reasonable, guided by judicial principles and capable of correction by court of appeal. Further while using discretion the court has to consider hardship to the parties. If the greater hardship would be caused to the defendant which he did not foresee and due to non performance of contract no such hardship would be caused to the purchaser then discretion it is not necessary to grant decree for specific performance.

In Sen Kukherjee and Co., Vs. Smt Chhaya Banerji AIR 1998 Culcatta 252,

The Hon’ble Supreme Court has held that the relief of specific performance having its roots in , the Specific Relief Act, 1963 has preserved the discretion of the Court not to grant the relief even though the agreement is specifically performable in law. The only letters imposed by the statue on the exercise of the discretion are that the discretion must not be exercised arbitrarily but soundly and reasonably and guided by judicial principles. The phrase

“capable of correction by Court of appeal’ has been inserted possibly to indicate the necessity for the trial Court to state the reasons for exercising its discretion in a particular way. The circumstances mentioned in the clauses (a), (b) and (c) of sub sec. (2) of S.20 are not expressly exhaustive. They indicate the situations in which the Court may properly exercise discretion not to decree specific performance. However, certain considerations have been excluded as relevant factors. These are contained in Explns 1 & 2 to the Section as well as in S.20(4). It is to be notices that each of these exclusions are preceded by the word ‘mere’.

The word ‘mere’ in the context means ‘sole’. In other words, any one of those factors by itself would not justify the exercise of discretion against granting specific performance. The factors cumulatively or with other factors may from the basis of a decision not to grant specific performance.

The conduct of the plaintiff is deciding Criteria:-

The relief of Specific Performance of contract is based upon the principles of Equity that “ He who seeks Equity must do Equity” and the plaintiff has to plead that he has always been ready and willing to perform his part of the essential terms of the contract and he has to prove the same. Thus, it do not suffice on the part of the plaintiff that he is ready and willing to perform his part of the contract but he has to prove the same. The readiness and willingness on the part of the plaintiff can be inferred from the surrounding circumstances and the conduct of the plaintiff, not only prior to filing of the suit but during the course of the trial. His conduct must be such that he shall not be blamed in any way for the failure of the contract and the said responsibility exclusively lies upon the defendant. Thus, the conduct of the plaintiff plays a vital role in adjudicating, whether he is entitled for the equitable relief of specific performance of the contract. (Man Kaur Vs. Haratr (2010) 10 SCC 512.

Clause(a) of sub sec.2 of Sec. 20 of Specific Relief Act mention about

“conduct of parties” but such conduct is referable to point of time of entering into contract. Conduct of defendant in taking up on sustainable or untrue defence does not come under this clause. Words” at time of entering into contract” in clause (a) would indicate this. Scope of enquiry under clause(a) is to find where any of three ingredients mentioned therein would give plaintiff an unfair advantage over defendant. Bonafide of party who approached to court for reief and his conduct are important factors to be taken into account.P.

Prabhakarrao -Vs-P. (AIR 2007 (Andhra Pradesh) 163.

False representation:

Mere false representation is not enough. It has to be further shown by defendant that this false misrepresentation resulted in adversely affecting their interest, or it altered the position of the parties in such a way that it would be inequitable to grant relief to the plaintiff. Vuppalapati Butchiraj and another – Vs- Rajah Sri Ranga Satyanarayana Ramchandra Venkata Narasmha Bhupala

Bhalavayubim Varu and others, A.I.R. 1967AP 69.

The words “ready” and willing used in Sec. 16(c) are very significant and in my opinion, where the performance on the part of plaintiff contemplates payment of certain money. The word “ willing” in the same context means the plaintiff’s desire to pay the money to the defendant. The term refers to both physical and mental elements, the combination of which answers the requirement of the term.

A plaintiff may have the money ready and with him or he may be capable of raising the requisite money, yet he may not have desire to pay the same.

Conversely a plaintiff may have an earnest and sincere desire to pay the money, but he may not have the same ready with him or he may not be in a position to raise the same. In either case, the result is the same. Such a plaintiff cannot perform his obligation to pay the consideration amount to his vendor and therefore, he cannot be regarded to be a person “ ready and willing” to perform the essential obligation regarding making payment”.

The plaintiff in a suit for specific performance has to allege and if the fact is traversed must prove his continuous readiness and willingness from date of contract to the time of hearing, to perform the contract on his part. Failure to make good that averment brings with it the inevitable dismissal of his suit.

Where the conduct of the plaintiff from the beginning to the end i.e. till the institution of the suit and even thereafter clearly indicated his readiness and willingness to perform his part of contract he would be entitled of decree for specific performance.

Popatlal Maneshankar Pande Vs. nanalal Nagardas Vhora 1987 Mah. L.J.

1055(1064). In Ardeshir H.Mama Vs. Flora Sassoon, AIR 1928 PC 208 “Where the injured party sued at law for a breath, going to the root of the contract, he thereby elected to treat the contract as at an end himself and as discharged from the obligations. No further performance by him was either contemplated or has to be tendered.

In suit for specific performance on the other hand, he treated and was required by the court to treat the contract as still subsisting. He had in that suit to allege, and if the fact was traversed, he was required to prove a continuous readiness and willingness from the date of contract to the time of hearing, to perform the contract on his part. Failure to make good that averment bring with it and leads to inevitable dismissal of the suit”.

In Fakir Chand V/s Sudehskumari 2006 (4) Mah. L.R. 553(SC) “ The language under Section 16(c) of the Act in our view, does not require any specific phraseology but not only that the plaintiff must aver that he has performed or has always been ready and willing to perform his part of contract.

Therefore, the compliance with the readiness and willingness has to be in spirit and substance and not in letter and form”.

Compliance of the requirement of Forms 47 and 48 of Appendix-A of the

C.P.C. Whether necessary:-

The language of Rule 3 of Order VI of the Code of Civil Procedure is mandatory and any plaint in a suit for specific performance of contract has to be strictly in conformity with form No. 47 or 48 of Appendix A of the Code of Civil Procedure. It shows that in a suit for specific performance there must be averments to the effect that plaintiff has applied to the defendant specifically to perform the agreement on his part, but the defendant has not done so.

“Ram Awadh(Dead) by L.Rs. And other V/S Achhaibar Dubey and another, AIR 2000SC 860”. It is held that a court may not, therefore grant relief to a plaintiff who has failed to aver and to prove that he has performed or has always been ready and willing to perform his part of the agreement the specific performance where of he seeks.

Where evidence clearly established that the plaintiff has capacity to pay and was also ready and willing to pay the balance amount, so in absence of any, material to show that the defendant was not acting in an unauthorized manner, it was held that the judgment of the High Court granting decree for specific performance cannot be faulted.

India Financial Assn. Seventh Day Adventists V. MN.A. Unneerikutty

2007(1) Civil L.J. 599 (C) Shaligram Vs. Ramesh 2014(3) Mh.L.J. 704.

Where vendor sold the suit property to third party during pendency of suit for specific performance of agreement to sell, and the third party purchaser was aware of the previous agreement and pendency of the suit, so the purchaser third party would be bound by the decree in the instant suit and the fact that he has invested huge amount on suit property would be no ground to refuse relief of specific performance of agreement Raghunath V. Rajendra, AIR 2007(NOC)

1089 (Bom).

To succeed in the suit, plaintiff has to prove his readiness and willingness. The readiness involves proof of capacity to perform, which in turn requires proof of financial ability at the relevant point of time. The willingness to perform the contract is not mere desire; it should be a genuine willingness, to be proved lie any other fact; circumstances may justify an interference that the assertion of the plaintiff as to his willingness is a mere verbal assertion and as a fact, his conduct may disclose that he was really interested in procrastination, because delay was to his advantage; in many cases, a person who agreed to purchase a property of which he is already in possession may not be anxious at all to complete the contract, either because, he has no ready case with him, or any consider it expedient not to part with the money, so that he can have the continued benefit of the money as well as the enjoyment of the property. The respective position of the parties to the agreement, the circumstances under which the agreement was entered into, the relative advantage or disadvantages to the parties by the performance or non- performance of the contract during the relevant period, are some of the relevant circumstances to be considered by the Court, while scrutinizing the evidence adduced before it. The main thrust of the analysis of the facts & circumstances, would be to scrutinize the plaintiff’s conduct in relation to the property and the term of the agreement. However, even if the plaintiff makes out his case for

Specific Performance, Court has to still consider as to whether the discretionary relief should be granted in favour of the plaintiff or it should be denied in the light of Section 20 of the Specific Relief Act; no doubt, it is a judicial discretion exercise of which depends upon several factors.

Doctrine of specific performance of contract

Specific performance of contract is an extraordinary equitable remedy that compels a party to execute the contract according to the precise terms agreed upon or to execute it substantially so that under the circumstances, justice will be done between the parties. It grants the plaintiff what he actually bargain for in the contract rather than the damages for not receiving it. Thus, it is an equitable rather than a . By compelling the parties to perform exactly what they had agreed to perform, more complete and perfect justice is achieved than by avoiding damages for breach of contract.

Doctrine of delay and : time – essence of contract

Laches cannot be equated with limitation. It is not a question of time. It is a question whether it shall be inequitable to permit the claim to be enforced.

Court has to see whether there has been some change in the condition or relation of the property and the parties. Mere lapse of time therefore short of limitation cannot operate as laches. Delay, short of statutory period of limitation will be fatal in cases of change in circumstances, accrual of right of third party or where there is inordinate delay etc.

Time: Essence of contract

Section 55 of the Contract Act provides that if a party to a contract fails to do a certain thing agreed upon within the stipulated period the contract becomes voidable at the option of other party for purpose of the part not performed if the parties intended that time would be of the essence of the contract. The Court has to look at the substance of contract and not at the letter to determine whether the parties intended completion of the obligation under the contract within the stipulated period notwithstanding fixation of a date for performance. If time is of essence of contract, delay operates as bar to a decree for specific performance.

It is the settled position of law that normally time is not of essence of a contract to save immovable property however, contract must be performed within a reasonable time. A provision in the contract that in the event of default by the vendee the vendor will be at liberty to cancel the contract and forfeit the earnest money does not necessarily make the time the essence of contract. It all depends upon the intention of the parties and therefore, to make time of essence of contract, the terms must be clear and unambiguous.

Whether time is the essence of contract has to be ascertained from the intention of the parties, nature of property and the surrounding circumstances.

Rectification and cancellation of instruments and rescission of

(Chapter III to V, Section 26 to 33) By law, many transactions are required to be in writing. Because of expediency, many more transactions are put into writing.

A written transaction is called an instrument. An instrument is a result of negotiations. Sometimes, an instrument may fail to express the intention of the involved parties. of such an instrument may become necessary.

Help towards parties who want to have their documents (which are mistakenly executed) rectified, is provided in Chapter III of the Specific Relief Act. Closely related with documents mistakenly executed, is the category of documents which are at a later point found to be void or which become void. These documents ought to be cancelled. Chapter V provides relief from such kinds of documents. Also, there is a category of contracts which, for some reason or the other (e.g. lack of free consent) can be deemed voidable by the party which consent was not free. This party has the right to have the contract rescinded.

Relief by way of rescission is provided by Chapter IV of the Specific Relief Act.

SPECIFIC PERFORMANCE OF PART OF CONTRACT

(Section 12 of the Specific Relief Act, 1963)

Provision regarding the specific performance of part of contract are contained in Section 12, sub-section 1 to 4 of the Specific Relief Act, 1963. Sub section (1) of Section 12 postulates that except as otherwise provided in the section, the Court shall not direct the specific performance of a part of contract.

Sub-section (4) thereto envisages that when a part of the contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part. Various reliefs provided by the Act are essentially equitable in nature and so the malafides or otherwise of the contestants are both relevant while deciding the dispute that crops up between them. The whole doctrine of specific performance of contract rests on the ground that party to the contract is entitled in equity to have in specie the specific thing for which he had bargained. Reference in this connection may be made to the authority reported in AIR 1964 S.C. 1385 Balmukund Versus Kamla

Wati.

Party to a contract which brings the suit under provisions of sub-section

(3) of Section 12 of the Specific Relief Act, 1963 for specific performance of contract, must frame its suit in the light of that sub-section incorporating the required averments to bring its case within its four corners. In other words the frame of the suit for specific performance of part of it, as different considerations arise in the two suits. The defendant must have an opportunity by pleading and if necessary by adducing evidence to show that plaintiff is not entitled to specific performance of part of contract. This can only be done if there is pleading by plaintiff bringing his case within the purview of sub-section(3) of

Section 12. Though plaintiff can make an alternate claim for specific performance of whole of the contract or only a part of it, but if he intends to do so, it must be clear from the plaint so as to give notice of it to the defendant.

Reference in this respect can be given from the authority reported in AIR 1979

Bombay 208 (Baburao Versus Mahadeo) In the leading authority in AIR 1990 SC

854 (Kartar Sing Versus Harjindar Sing) it has been settled that whenever a share in the property is sold, the vendee has a right to apply for partition of the property and get the share demarcated and there is no legal difficulty in granting decree for specific performance because property will have to be partitioned.

If the contract is one and indivisible, definitely it has to be enforced only in its entirety. But a part of contract is also enforceable if it comes within one or other of the exceptions provided in sub sections (2) to (4)of Section 12. Position under the present Specific Relief Act, 1963 is that plaintiff in a suit for specific performance can get the relief in respect of share of the property on paying the proportionate consideration provided therein and that is possible at the instance of either party if the part which is left unperformed bears only a small portion to the whole in value and admits of compensation in money. The Court may in such case direct specific performance of so much of the contract as can be performed and award compensation in money for the deficiency. It has been observed in AIR 1992 Bombay 8. (Farohar and Company Versus Hemant

Manohar Naban) that law does not prohibit the Court of arbitrators from granting specific performance of part of contract altogether. In a given situation depending upon the interpretation of the contract, facts and equity of the case, conduct of the party, severability of the consideration for different obligations under the contract etc., arbitrator or the Court may even grant specific performance of the part of contract.

LIMITATION:-Article 54 of the Limitation Act deals with the limitation of suit for specific performance. It is stated, in the third column of Article 54 of the

Limitation Act, 1963, that the suit for specific performance has to be filed within three years from the date stipulated in the contract or from the date of refusal to perform the contract.

In the case of Sultan Latif Shamshuddin Ahmed Versus Shaikh Alia Baksh

Jani,(2002) 4 ALD 799, (2003) 1 ALT 24, it has been held that the period of limitation begins from the date of refusal by the vendee or the defendant and applying the said principles the period of three years mentioned under Article

54 of the Limitation Act, shall be reckoned from the date of refusal to exercise the deed of reconveyance.

In the case of Ahmmadsaheb Abdul Mulla(deceased by L.Rs.) Versus

Bibijan and others. AIR 2009 Supreme Court 2193 Honourable Apex Court has observed as under--

“The inevitable conclusion is that the expression ‘date fixed for the performance’ is a crystallized notion. Thus is clear from the fact that the second part ‘time from which period begins to run’ refer to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on ‘ when the plaintiff has notice that performance is refused. Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from the circumstances. Whether the date was fixed or not the plaintiff had notice that performance is refused and the date thereof are to be established with reference to materials and evidence to be brought on record.

The expression’ date’ used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calander.

Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such to complete performance of the contract. It is typically available in the sale of land, but otherwise is not generally available if damages are an appropriate alternative. Specific performance is almost never available for contracts of personal service, although performance may also be ensured through the threat of proceedings for contempt of court.

Specific performance is commonly used in the form of injunctive relief concerning confidential information or real property.[clarification needed] While specific performance can be in the form of any type of forced action, it is usually to complete a previously established transaction, thus being the most effective remedy in protecting the expectation interest of the innocent party to a contract.

It is usually the opposite of a prohibitory injunction, but there are mandatory that have a similar effect to specific performance.

In practice, specific performance is most often used as a remedy in transactions regarding land, such as in the sale of land where the vendor refuses to convey title. The reason being that land is unique and that there is not another legal remedy available to put the non-breaching party in the same position had the contract been performed.

However, the limits of specific performance in other contexts are narrow.

Moreover, performance based on the personal judgment or abilities of the party on which the demand is made is rarely ordered by the court. The reason behind it is that the forced party will often perform below the party's regular standard, when it is in the party's ability to do so. Monetary damages are usually given instead.

Traditionally, equity would only grant specific performance with respect to contracts involving chattels where the goods were unique in character, such as art, heirlooms, and the like. The rationale behind this was that with goods being fungible, the aggrieved party had an adequate remedy in damages for the other party's non-performance.

There is an ongoing debate in the legal literature regarding the desirability of specific performance. Economists, generally, take the view that specific performance should be reserved to exceptional settings, because it is costly to administer and may deter promisors from engaging in efficient breach.

Professor Steven Shavell, for example, famously argued that specific performance should only be reserved to contracts to convey property and that in all other cases, money damages would be superior.[9] In contrast, many lawyers from other philosophical traditions take the view that specific performance should be preferred as it is closest to what was promised in the contract.[10] There is also uncertainty arising from empirical research whether specific performance provides greater value to promisees than money damages, given the difficulties of enforcement.[11]

The Specific Relief (Amendment) Act 2018 has been passed by both Houses of

Parliament after a brief discussion, but without debate. Like many other laws passed for enhancing business capabilities, this Amendment is likely to be yet another instance of ‘legislate in haste, amend at leisure’.

The amending Act, it has been stated in both Houses of Parliament, has an objective to prevent errant contractors from breaking their contracts and hampering infrastructure projects. The ultimate aim of the Act is to enhance the standing of India in the ‘ease of doing business’ ranking. The discussion in the Houses centred around infrastructure contracts only. The entire discussion in both Houses has overlooked the fact that the same amendment, and the Specific Relief Act as amended, is not restricted to business contracts, but applies to the common man and his personal contracts. The Amendment grossly violates his expectations of fairness and justice in enforcement of contractual remedies.

Expert Committee Report The amending Act follows a Report submitted to the Government by an Expert Committee of six members consisting of legal practitioners and academics constituted in January 2016 for suggesting amendments to the Specific Relief Act so that ‘specific performance is granted as a general rule’, and to ‘ensure that discretionary relief is done away with’ for ensuring ‘ease of doing business in India’. The Committee submitted its report two years ago (in June 2016) to the Union Law and Justice Minister recommending inter alia (i) a change of approach making specific performance a rule, and damages an alternative remedy, (ii) guidelines for reducing the discretion of Courts while granting specific relief. The Committee also suggested a regulatory mechanism for public works projects. The amending Act has not adopted all recommendations of the Committee relating to the changed approach of remedies, and has disregarded recommendations that ensured fairness in procedure. The amendment has become a patchwork of some contradictory and inconsistent provisions. The amendment has been rushed without consultation with the main stakeholders who administer this Act : advocates and judges. The Ministry did not publish the Report of the Expert Committee. It has, however, been made available under the RTI Act. The pre-legislative consultation policy that each Ministry should follow requires that proposed legislation should be published widely, feedback from stakeholders including Government departments and the public should be invited, and feedback received should also published. The amending Act did not go through this process.

Main provisions of the Amendment Act 2018 The most important changes in the amending Act are: (i) making specific performance available as a remedy by choice, (ii) providing a new remedy of substituted performance of contract, and (iii) restricting power of courts to grant injunctions that will stop progress of infrastructure projects.

Exceptional and discretionary Remedy Specific performance is an order of civil courts that requires the contract-breaker to perform the promise he has made. An order of compensation, on the other hand, requires the contract-breaker to pay in money terms for the loss suffered. Under the existing Specific Relief Act 1963, specific performance is granted as an exception only where compensation would not be adequate relief, and it is discretionary relief. This approach of the Act of 1963 is not outdated; it is in tune with the law currently in force in the UK, most states of the USA, Singapore and other countries. Although this exceptional nature of this relief traces its roots in the history of courts in England, there is much justification for this in current literature on the basis of economic analysis. On the other hand, the laws of France, Germany, other states of the USA, China and many other countries allow a contracting party to choose any of the two remedies. The amending Act seeks to remove the restriction that makes specific performance an exceptional remedy. Specific performance cannot be a compulsory remedy. The amending Act also does not make specific performance a rule, despite such interpretation made by the Minister of Law in the Rajya Sabha when he introduced the bill, and moved it after discussion. No person approaching any court can be compelled to adopt any remedy, he can choose from among the remedies available to him.

Remedies and contracting behaviour How does the nature of remedy affect contracts and contracting parties? Under the current law of 1963, if a party breaks his contract, the other party may not be able to prove and claim all the losses he suffered by the breach. Nor is he able to ask specific performance confidently, because there is no guarantee he will get it. With the amendment, he will be able to claim specific performance if he wishes to do so. This also fulfils the natural desire of contracting parties that their contracts shall be fulfilled. This approach, it is expected, will improve contracting culture, and encourage performance by a contracting party. To that extent, the change of approach is desirable. Specific performance and substituted performance are remedies available to a party aggrieved when the other party has broken the contract. Although these are granted by the court when a party approaches it, any design of remedies affects the contracting behavior of persons. The remedy, and its contours, affect the manner in which parties will negotiate their contract, the terms of the contract, how they will perform it, how they will renegotiate in cases of difficulty, and whether they would like to continue performance when performance becomes too costly. It affects transactions. It affects the advice that lawyers will give to clients about their contracts. The impact of the law relating to contractual remedies thus affects persons even before they make their contract. If making specific performance generally available would change contracting behavior for the better, it will be a desirable change.

Amendment removes mitigating factors The amending Act is not restricted in its application to infrastructure projects, nor to parties in a business relationship. It applies to and affects contracts made by any member of the public. It especially affects agreements for purchase or transfers of immovable property. The amending Act is a cause of concern, because it removes the mitigating factors that must surround grant of any remedy. However, any contract remedy cannot give full reparation to a party of what he has asked from the court. The law relating to the remedy of compensation in contracts (in force since 1872) does not compensate the entire loss that an aggrieved party may suffer because of breach. Requirements of causation, contemplation or foreseeability and mitigation restrict the power of a court to grant the entire loss. These conditions restricting remedies balance the interests of all parties when they approach a court. As a contract remedy, specific performance is also universally subject to restrictions on grant, even in legal systems in which it is available as a general remedy or the first remedy. These conditions ensure fairness and justice especially when parties, while remaining within their rights, indulge in sharp practices during formation of their contract or its performance. These conditions are also recognized by international documents and conventions viz. UNIDROIT Principles, Principles of European Contract Law, International Convention on Sale of Goods. The Expert Committee recommended that a court should be able to refuse specific performance and injunction on stated grounds. But this has not been considered in the amending Act.

No specific performance where substitutes available The primary restriction across all legal systems including international conventions is that specific performance should not be granted when the aggrieved party could have obtained substitutes. This forces an aggrieved party to get the contract completed by obtaining substitute performance from another person, and claim his loss, if he suffers any, from the contract-breaker. While this may appear very similar to the current provisions that make specific performance exceptional in nature, the restriction operates in a different way. The burden falls upon the contract breaker to show that the party seeking specific performance had substitutes. Under the existing Act of 1963, the burden fell on the aggrieved party to show that compensation will not be enough. The amending Act does not provide for this important restriction.

No specific performance where enforcement is not possible Across all jurisdictions, specific performance is refused where the contract has become incapable of performance, or where the terms of the contract prohibit the remedy of specific performance. These are also not incorporated into the Act. While under the existing Act of 1963, specific performance could be granted in certain circumstances ordering the defendant to construct a building although this would involve continuous supervision from the Court, the amendment removes this possibility. Other grounds for refusing relief recognized across most jurisdictions relate to situations where the terms of the contract or the relations between parties at the time of making the contract gives the contract breaker an unfair advantage, or subjects the aggrieved party to undue hardship. These grounds ensure fairness and justice between parties, and balance the interests of all parties before the court. These grounds allow a court to give hearing to the contract-breaker’s story. While these grounds were elements affecting court’s discretion under the existing Act of 1963, the expert committee suggested incorporating them as specific grounds to be proved before the relief can be refused or granted. These and other similar grounds for refusing relief have not be included in the amending Act.

Substituted performance: a new remedy The remedy of substituted performance is new only in its expression. It is a remedy under which, after giving an opportunity to the contract breaker to perform his part, the aggrieved party can get the contract performed through other channels, and claim the costs and expenses from the contract breaker. The amendment makes this a statutory right. The Indian Contract Act 1872 already recognised that an aggrieved party can get the contracted work done through another and claim the costs and expenses from the contract breaker. But this right was subject to the three conditions for grant of compensation mentioned earlier, and hence the aggrieved party was not assured of covering all his expenses. Parties, especially the government, also included ‘Risk and Cost’ clauses that gave the government the right to recover such costs and expenses. The new provisions will give him the right to these expenses, and hence the confidence of getting his work completed from a third person, after giving an opportunity to the contract breaker to fulfill his part of the contract. Parties having disputes indulge in sharp practices and take extreme positions. It is likely that the aggrieved party might incur unreasonable or spend extra amounts on extra works, and claim them from the contract breaker. It is only fair and just that some control over such claims is necessary. The recommendation of the Expert Committee suggesting such control is not part of the amending Act.

Certainty of enforcement essential in business contracting How does this affect business contracts. It cannot be denied that courts must and will find grounds that will allow them to give relief in a manner that will ensure fairness and justice. It is expected that exceptions to the grant of relief will eventually get moulded by case-law. It is likely that these exceptions will follow the well-trodden path of existing thought. This possibility makes grant of reliefs uncertain. Uncertainty in grant of remedies affects contracting the most. Certainty is essential if parties should have faith in their contracts. It is essential if they should find it ‘easy for doing business’ confidently. If grounds of refusing specific performance are recognized directly, it confines exceptions to those provided. It is better these be brought by legislation rather than leaving them to be decided by any High Court or the Supreme Court.

Injunctions in public works contracts restricted The introduction of the Bill in both houses, the discussions and the replies of the Minister of Law gave considerable importance to the new provision that restricts the powers of courts from granting injunctions that would delay the progress of infrastructure projects. The introduction and summing up by the Minister stated that such injunction will not be granted in favour of contract breakers. However, the relevant amendment is not restricted to contract disputes. Fear is expressed that the amendment will violate essential rights of parties, viz. relating to their property affected by infrastructure projects. Fears expressed about this aspect from all quarters are well-founded, because the amendment to section 41 allows a court to refuse injunction in all types of matters, whether involving contract dispute or not. Applicability of the Amending Act The amendment also suffers other defects. In the interest of, and pursuant to the objective of achieving certainty, provision should have been made relating to the contracts to which it will apply. The amendment should apply only to contracts that are made after the amendment becomes law, because parties, especially business parties, decide their terms and price with reference to remedies available when they make their contract.

No compensation in substitution of specific performance The amendment to section 21 takes away the right of a party seeking specific performance from claiming compensation instead of specific performance. When the court refuses to grant specific performance of grounds given in the law (some of which the amendment recognises), a plaintiff can pursue his claim for compensation. This is not possible under the amendment. The plaintiff loses his right because the Civil Procedure Code prevents him from bringing another suit. Such a plaintiff remains without a remedy.

Redundant provisions New sections 14(a) and 16 (a) provide that specific performance cannot be granted if a party has obtained substituted performance. This provision is not required because of the express provision in the amended section 20(3)

Other issues Many more smaller and finer aspects have been ignored in the amending Act. Providing remedy of substituted performance in section 20 can lead to confusion because section 20 of the existing Act of 1963 that provided for discretion in grant of specific performance will continue to apply to pending matters. The section dealing with substituted performance should have been numbered 20A

Wider consultation desirable If the Bill were circulated for consultation, comments would have come from the judiciary and the legal fraternity, especially trial lawyers who conduct specific performance suits, and are in a position to state the effect of the Bill’s provisions. Such opinions and views would have enhanced the usefulness of this legislation.

C O N C L U S I O N

Specific performance is a remedy developed by courts of equity. A party to a contract who has suffered damage because of breach of contract by another party has the option to file a suit for specific performance compelling the others to perform their part of the contract. Because equity court will compel specific performance, however, the contract must be one which can be specifically performed. As the law of specific performance is basically founded on equity, considerations such as conduct of the plaintiff, the element of hardship that may be caused to one of the parties, the availability of adequate alternative relief and such other factors are taken into consideration. Ultimately, it is a discretionary relief.