Specific Relief Act (SRA)
Power to Award Compensation: Section 21
A plaintiff who sues for specific performance may find that the decree alone does not make him whole, or that performance cannot be granted at all. Section 21 lets the court award compensation in the same suit, either in addition to the decree or in substitution for it, so that the whole dispute is settled in one action. It is the bridge between the equitable remedy of performance and the common-law remedy of damages. This note explains the two modes, what the plaintiff must show and must do, and how Section 21 relates to Section 73 of the Contract Act.
Figure: Section 21: compensation in addition to a decree or in substitution for it, what the plaintiff must show, and the link with Section 73
1. The Two Modes
How compensation may be awarded ▪ In addition to performance: Section 21(2). Where the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, it may also award compensation for the breach. The plaintiff gets the property and money for the loss the decree does not cover. ▪ In substitution for performance: Section 21(3). Where the court decides that specific performance ought not to be granted, but that there is a valid contract broken by the defendant, it may award compensation instead. The plaintiff does not get the property, but is compensated in that same suit. |
2. What the Plaintiff Must Show, and Must Do
The conditions ▪ A valid contract. There must be a valid, enforceable contract; if none exists, there is no ground for compensation under this section. ▪ A breach by the defendant. The compensation is for the defendant's breach, assessed on the principles of Section 73 of the Indian Contract Act. ▪ It must be claimed: Section 21(5). No compensation is awarded unless the plaintiff has claimed it in his plaint. ▪ Amendment is allowed. The court permits the plaintiff to amend the plaint, on such terms as are just, at any stage, to include a claim for compensation. |
3. The Measure and Assessment
- Drawn from the Contract Act. The court determines the compensation on the principles of Section 73: the loss naturally arising from the breach, or which the parties knew, when they contracted, to be likely to result from it.
- Not remote loss. Loss that is too remote, or not in the contemplation of the parties, is not compensated.
- One suit, complete justice. By allowing compensation within the performance suit, Section 21 lets the court do complete justice without forcing the plaintiff into a second action.
4. Section 21 and Section 73 of the Contract Act
Basis | Section 21, Specific Relief Act | Section 73, Contract Act |
|---|---|---|
What it is | A power to award compensation within a specific-performance suit | The general right to damages for breach of contract |
When used | In addition to, or in substitution for, a decree of performance | In an ordinary suit for damages |
The measure | Drawn from Section 73 principles | Loss naturally arising or in the parties' contemplation |
Advantage | Settles performance and compensation in one suit | Stands alone as the money remedy |
5. Frequently Asked Questions
Q. Can a court award compensation along with specific performance?
A. Yes. Under Section 21(2), if performance is granted but is not enough to do justice, the court may also award compensation for the breach.
Q. What if specific performance is refused?
A. Under Section 21(3), if there is a valid contract broken by the defendant but performance ought not to be granted, the court may award compensation instead, in the same suit.
Q. Must compensation be claimed in the plaint?
A. Yes. Section 21(5) provides that no compensation is awarded unless it is claimed, but the court may permit the plaint to be amended at any stage to add the claim.
Q. How is the compensation measured?
A. On the principles of Section 73 of the Contract Act: the loss naturally arising from the breach, or which the parties contemplated as likely, excluding remote loss.
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