Specific Relief Act (SRA)
Specific Performance of Contracts: A Complete Note
Specific performance is the heart of the Specific Relief Act. It is the remedy by which a court compels a party to do exactly what he promised, to convey the land, deliver the shares, or perform the contract itself, rather than merely pay damages for breaking it. Once a discretionary and exceptional remedy, it became, after the 2018 amendment, the general rule. This note gathers the whole law of specific performance, Sections 9 to 25, in one place: the rule, who may sue and against whom, what cannot be enforced, the crucial bar of readiness and willingness, and the new tools of substituted performance and expert help.
Figure: Specific performance across Sections 9 to 25, the doctrine of readiness and willingness, and the five things to check in any problem
1. The Rule: Section 10
Performance is now the rule ▪ Before 2018. Specific performance may, in the discretion of the court, be enforced, only where damages were inadequate. ▪ After 1 October 2018. The specific performance of a contract shall be enforced by the court, subject only to Section 11(2), Section 14 and Section 16. ▪ The effect. A party who is not caught by the bars is entitled to performance; the court no longer weighs whether to grant it. This applies to contracts executed on or after 1 October 2018 (*Katta Sujatha Reddy*, 2022). |
2. Contracts Connected with Trusts: Section 11
i. Section 11(1). A contract may be specifically enforced where the act agreed to be done is in the performance, wholly or partly, of a trust.
ii. Section 11(2). A contract made by a trustee in excess of his powers, or in breach of trust, cannot be specifically enforced. This is one of the express bars to which the new Section 10 is subject.
3. Part Performance and Imperfect Title: Sections 12 and 13
Section | What it provides |
|---|---|
s. 12: part of a contract | As a rule the court will not direct performance of a part only; but where the unperformed part is small, or admits of compensation in money, the court may enforce the rest with compensation for the deficiency |
s. 13: no title or imperfect title | Where a seller or lessor has no title or an imperfect title, the buyer or lessee may compel him to make good the title so far as he can, or take what title he has with an abatement, protecting the purchaser |
4. What Cannot Be Enforced: Section 14
The bars, as rewritten in 2018 ▪ Substituted performance obtained. A contract for which the party has obtained substituted performance under Section 20 cannot then be specifically enforced. ▪ Personal skill or numerous details. A contract so dependent on the personal qualifications of a party, or involving the performance of a continuous duty which the court cannot supervise, or so full of minute details, that the court cannot enforce its material terms. ▪ A determinable contract. A contract which is in its nature determinable (terminable at will) cannot be specifically enforced. ▪ Section 14A. A new power lets the court engage experts to assist it on any specific question in the suit; their opinion forms part of the record. |
5. Who May Sue, and Against Whom: Sections 15 and 19
Section | The persons |
|---|---|
s. 15: who may obtain performance | A party to the contract; his representative in interest or principal; and, as amended, a limited liability partnership formed on amalgamation and a company in a scheme of amalgamation, among others |
s. 19: against whom relief may be had | A party to the contract; any person claiming under him by a title arising after the contract, except a transferee for value who paid in good faith without notice; and, in certain cases, a company or LLP resulting from amalgamation |
6. Personal Bars: Section 16 and Readiness and Willingness
Section 16 ▪ Specific performance cannot be enforced in favour of a person: ▪ (a) who would not be entitled to recover compensation for the breach; or ▪ (b) who has become incapable of performing, or violates an essential term, or acts in fraud of the contract, or wilfully acts at variance with his relation under the contract; or ▪ (c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract that are to be performed by him. |
N. P. Thirugnanam v Dr. R. Jagan Mohan Rao (1995) 5 SCC 115 The Supreme Court held that readiness and willingness under Section 16(c) is a condition precedent to obtaining specific performance. The plaintiff must plead and prove that he was ready and willing to perform his part of the contract throughout, from the date of the contract to the date of the hearing. Readiness refers to the financial capacity to pay the price, and willingness to the conduct and intention to perform. A plaintiff who fails on this cannot succeed, however strong his case otherwise. |
7. Substituted Performance and Infrastructure: Sections 20 to 20C
The 2018 additions ▪ Section 20: substituted performance. An aggrieved party may, after thirty days' written notice, get the contract performed by a third party or his own agency and recover the cost from the party in breach, instead of suing for performance. ▪ Section 20A: infrastructure. No injunction shall be granted in a suit concerning a contract relating to a notified infrastructure project if it would cause impediment or delay. ▪ Section 20B: special courts. State Governments may designate special courts to try infrastructure suits. ▪ Section 20C: time limit. Such suits are to be disposed of within twelve months, extendable by up to six months. |
8. Damages and Other Powers: Sections 21 to 25
Section | What it provides |
|---|---|
s. 21 | The court may award damages in addition to, or in substitution for, specific performance |
s. 22 | In a suit for performance of a contract to transfer immovable property, the plaintiff may also claim possession, partition, refund of earnest money, or other relief, and must claim it in the plaint |
s. 23 | The mere fact that the contract fixes a sum as liquidated damages is not, by itself, a bar to specific performance |
s. 24 | Dismissal of a suit for specific performance bars a fresh suit for compensation for breach of the same contract |
s. 25 | The Chapter applies, so far as may be, to contracts constituted by an award, and to directions in a will or codicil |
9. Time and the Contract
Chand Rani v Kamal Rani (1993) 1 SCC 519 The Supreme Court held that in contracts relating to immovable property, time is generally not of the essence of the contract, unless the parties have clearly made it so by express terms, or the nature of the property or the surrounding circumstances show such an intention. Even where a time is fixed for completion, a failure to complete on that date does not, by itself, defeat a claim for specific performance of a contract for land. |
10. Frequently Asked Questions
Q. Is specific performance still discretionary?
A. For contracts made on or after 1 October 2018, no. The new Section 10 makes it a general remedy the court shall enforce, subject only to Sections 11(2), 14 and 16. For earlier contracts, the old discretionary law applies.
Q. What is readiness and willingness?
A. Under Section 16(c), the plaintiff must plead and prove he was ready and willing to perform his part of the contract throughout. Readiness is the capacity, chiefly financial, to perform; willingness is the intention and conduct. It is a condition precedent to relief.
Q. Which contracts cannot be specifically enforced?
A. Those barred by Section 14: contracts for which substituted performance has been obtained, contracts dependent on personal skill or requiring constant court supervision, and determinable contracts.
Q. Is time of the essence in a contract to sell land?
A. Generally not, unless the parties clearly make it so, as Chand Rani v Kamal Rani holds; a failure to complete on the fixed date does not by itself defeat specific performance of an immovable-property contract.
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