SPECIFIC RELIEF ACT, 1963

SPECIFIC PERFORMANCE OF
CONTRACTS

JAMIA MILLIA ISLAMIA

 SPECIFIC PERFORMANCE OF CONTRACT 2015

CONTENTS-
1. ACKNOWLEDGEMENT…………………………………………………………..3
2. INTRODUCTION…………………………………………………………………….4
3. FEATURES OF SPECIFIC CONTRACT OF CONTRACT………………..7
4. ELEMENTS THAT ARE INVOLVED IN A SUIT FOR SPECIFIC
PERFORMANCE OF CONTRACT…………………………………………….12
5. PRACTICAL PROBLEMS IN A SUIT FOR SPECIFIC PERFORMANCE
OF CONTRACT……………………………………………………………………..14
6. CONCLUSION……………………………………………………………………….17
7. BIBLIOGRAPHY……………………………………………………………………18

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ACKNOWLEDGEMENT
I sincerely acknowledge the kind guidance received time to time from our respected Dr.
Manjula Batra, Dean, Faculty of Law, Jamia Millia Islamia.
I also want to acknowledge Mr. Eqbal Hussain, Faculty of Contracts, Jamia Millia Islamia.
I am also grateful to Mr. Ankur Srivastava, alumni of NALSAR University of Law, Hyderabad for
providing me help and support time to time.
I am also thankful to Ms. Amrisha Srivastava, alumni of National Law University Odisha, Cuttack
for sharing her knowledge and experience with me which is becoming a guiding factor in my
career path.
I also wish to acknowledge the heartiest support provided to me by my senior Mr. Abhishek,
alumni of NLSIU Bangalore which is found very much helpful during my studies.
At the last, but not least, I will not forget to acknowledge the continuous blessings received
from my parents without which it was not possible for me to achieve anything.
Above all, by heart I am sincerely grateful to God for showering on me his blessings on
continuous basis at every step in my life as gradually I progress. I sincerely believe that he is
always with me.

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INTRODUCTION
Specific performance is equitable relief, given by the court to enforce against a defendant, the
duty of doing what he agreed by contract to do. Thus, the remedy of specific performance is in
contrast with the remedy by way of damages for breach of contract, which gives pecuniary
compensation for failure to carry out the terms of the contract. Damages and specific
performance are both, remedies available upon breach of obligations by a party to the
contract; the former is a ‘substitutional’ remedy, and the latter a ‘specific’ remedy. The remedy
of specific performance is granted by way of exception. A party to a contract who is damaged
because the contract is breached by another party has the option to file a suit for specific
performance compelling to perform his part of contract. 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 matters are taken into consideration.
The plaintiff seeking this remedy must first satisfy the court that the normal remedy of
damages is inadequate, the presumption being that in cases of contracts for transfer of
immovable property, damages will not be adequate. Even in these cases specific performance is
not always granted, as it is a discretionary remedy. The relief must be specifically claimed.
When the plaintiff claims specific performance of a particular agreement, the suit could be
decreed for specific performance of only that agreement, and not any other.
The prescribed period of limitation for a suit of specific performance is three years from the
date fixed for performance, or, if no such date is fixed, when the plaintiff has noticed that
performance has been refused.
Illustration-
A is owner of land. He executed an unregistered agreement of sale in favour of B and received
Rs. 50,000/- as an advance out of sale price of Rs.1,00,000/-. A has to execute a Regd. Sale deed
within three months from date of execution of agreement of sale. But, A refused to execute
Regd. Sale deed and sold the said property to C for higher price. B can sue against A for specific

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performance.
From the above illustration, no doubt, B can file a suit for specific performance. This case
involve several aspects such as, whether plaintiff is ready and willing to perform his part of
contract or not; when would time is essence of contract?; Can C be impleaded in the suit as
party? Is escalation of price is a ground in such a suit? Question of Lis Pendens; whether B is
entitled for damages and compensation or not; whether an unregistered agreement of sale is
admissible or not etc. All these aspects are dealt in the following paragraphs with relevant
illustrations.

Section 10 of the Specific Relief Act, 1963, states “Cases in which specific performance of
contract enforceable.
Except as 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 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 cannot be adequately relieved
by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the
following cases:—
(a) where the property is not an ordinary article of commerce, or is 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.”

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There is a clear distinction between the cases giving rise to the filling of a suit for specific
performance in the event of breach of recitals of an agreement for due performance of which
the parties have covenanted to agree and perform and those which the award of compensation
will be adequate relief.

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FEATURES OF SPECIFIC PERFORMANCE OF

CONTRACT
(i) Damages cannot be ascertained- The rule is based on the uncertainty of calculation of
damages in cases where they cannot be based on anything, but conjecture or surmise.
Thus, where A agree to buy, and B agrees to sell, a picture by a dead painter and two
rare China vases, A may compel B specifically to perform this contract, for, there is no
standard for ascertaining the actual damage which would be caused by its non-
performance.
By claiming damages for breach of contract, the plaintiff disentitles himself, on account
of his own election, to treat the contract from claiming specific performance of the
same contract as an alternative case, either originally or subsequently, by way
amendment. However, a stipulation in a contract to be liable to repay the amount paid
and to pay compensation if the promisor sold the property to another person , does not
detract from the right to specific performance.

(ii) Compensation not adequate relief- Specific performance will not granted where
compensation is enough relief. Damages may be considered to be an inadequate
remedy. If it is difficult to quantify them. Thus, specific performance may be ordered of
a contract to execute a mortgage for money advanced. A contract for execution of the
work contracted would fall within the types of contracts described in this section as
specifically enforceable, but the relief is not appropriate and, therefore, not granted
because the work is a kind which a court of justice has no means of supervising. A court
will, therefore, not usually grant this remedy on a contract for building or engineering
work.
Contract to transfer immovable property-
The view that a breach of contract for land cannot be adequately compensated is not
because of the real nature of land, but because damages, even where calculated upon

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the general money value of land, may not be a complete remedy to the purchaser, to
whom the land may have a peculiar and specific value.
Contract to transfer movable property-
A contract to deliver specific goods will be enforced by way of specific performance if
they are ‘articles of unusual beauty, rarity and distinction or of special value to the party
suing by reason of personal or family association or like.
Presumption-
This section raises a presumption that compensation would not be adequate in the case
of transfer of immovable property, and it would be adequate in case of breach of
transfer of movable property. Thus, the party alleging compensation is respectively
adequate or inadequate must prove it.

Section 12 of The Specific Relief Act, 1963 states that,

Specific performance of part of contract.—

(1) Except as otherwise hereinafter provided in this section the court shall not direct the
specific performance of a part of a contract.
(2) Where a party to a contract is unable to perform the whole of his part of it, but the part
which must be left unperformed by only a small proportion to the whole in value and admits of
compensation in money, the court may, at the suit of either party, direct the specific
performance of so much of the contract as can be performed, and award compensation in
money for the deficiency.
(3) Where a party to a contract is unable to perform the whole of his part of it, and the part
which must be left unperformed either—
(a) forms a considerable part of the whole, though admitting of compensation in money; or
(b) does not admit of compensation in money, he is not entitled to obtain a decree for specific
performance; but the court may, at the suit of other party, direct the party in default to
perform specifically so much of his part of the contract as he can perform, if the other party—

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(i) in a case falling under clause (a), pays or has paid the agreed consideration for the whole of
the contract reduced by the consideration for the part which must be left unperformed and a
case falling under clause (b), 1[pays or had paid] the consideration for the whole of the contract
without any abatement; and
(ii) in either case, relinquishes all claims to the performance of the remaining part of the
contract and all right to compensation, either for the deficiency or for the loss or damage
sustained by him through the default of the defendant.
(4) When a part of a 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.
Explanation- For the purposes of this section, a party to a contract shall be deemed to be
unable to perform the whole of his part of it if a portion of its subject matter existing at the
date of the contract has ceased to exist at the time of its performance.

Section 14 of The Specific Relief Act, 1963 provides certain circumstances where the specific
performance of the contract does not apply. These situations are as follows-
1. Where compensation in money is an adequate relief- Contracts, the non- performance
of which can be compensated by the damages cannot be specifically enforced according
to the section 14(a) of The Specific Relief Act, 1963. For example a contract for the
supply of commodities cannot be specifically enforced.
2. Where specific performance of the material terms cannot be enforced- Section 14(b)
of The Specific Relief Act, 1963 states that 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. For example a contract for personal service or
employment cannot be enforced by or against the employer, only damages can be
sought.

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3. A contract which in its nature determinable- The term determinable suggests a

situation where despite the court’s enforcement; the parties can immediately revert to
their original position, thereby making such enforcement futile. For example, where A
and B contract for partnership without providing a defined duration, the partnership
cannot be enforced as it could easily be dissolved at once. A contract the performance
of which involves the performance of continuous duty which the court cannot supervise:
The difficulty of supervision by the Court is the main reason why due performance in
certain contracts cannot be specifically enforced.

Thus the agreement by a landlord to provide a housekeeper cannot be specifically

enforced.

Exceptions- Despite the clauses of section 14(1) of The Specific Relief Act, 1963, the court can
enforce the specific performance in the circumstances provided in the section 14(3) of The
Specific Relief Act, 1963-
1. Where the suit is for the enforcement of the contract-
 To execute a mortgage or secure 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
 To take up and pay for any debentures of a company.
2. 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-
 The building or other work is described in the contract in terms precise enough
for the court to determine the exact nature of work; or
 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; or

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 The defendant has, in pursuance of the contract, obtained possession of the

whole or any part of the land on which the building is to be constructed or other
work is to be executed.

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ELEMENTS THAT ARE INVOLVED IN A SUIT FOR

SPECIFIC PERFORMANCE OF CONTRACT
1. Valid Contract- Normally, suit for specific performance of contract based on agreement
of sale. Vague and uncertain agreement could not be given effect to.1 It was observed in
Ambica Prasad v Naziran Bibi case2 and Balram v Natku case3 that there should be a
valid contract for suit for specific performance of contract.
2. Unregistered agreement of sale- Unregistered agreement of sale is admissible in
evidence under Section 49(c) of the Registration Act in a suit for specific performance of
contract. Unregistered sale deed is admissible in evidence in a suit for specific
performance.4
3. Conduct of the parties- Any person seeking benefit of specific performance of contract
must manifest that his conduct has been blemishless5. Similarly, conduct of defendant
cannot be ignored. The relief of specific performance is discretionary. It was held that if
the pleadings manifest the conduct of the plaintiff entitles him to get the relief on
perusal of the plaint he should not be denied the relief.
4. Readiness and willingness of the parties- Section 16(c) of the Act mandates the plaintiff
to aver in the plaint and establish the fact by evidence aliunde that he has always been
ready and willing to perform his part of the contract. Distinction between “readiness”
and “willingness” is that the former refers to financial capacity and the latter to the
conduct of the Plaintiff wanting performance. The plaintiff’s readiness and willingness,
which is a condition precedent, must be in accordance with the terms of the agreement,
however, the plaintiff need not carry money in his hand. In a suit for specific
performance, plaintiff is to approach Court with clean hands. Right from the date of the
execution till date of the decree he must prove that he is ready and has always been

1
Vimlesh Kumari Kulshrestha vs Sambhajirao, 2008 (2) Supreme 127
2
AIR 1939 All 64
3
AIR 1928 PC 75
4
S.Kaladevi vs V.R.Somasundaram, AIR 2010 SC 1654
5
H.P.Pyarejan vs Dasappa, AIR 2006 SC 1144

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willing to perform his part of the contract. Even subsequent purchaser is entitled to
raise objection as to readiness and willingness. To know the consequences in the case of
absence of plea of readiness and willingness in the plaint, see ruling6.
5. Time is the essence of contract- From the decision of a Constitution Bench of the
Hon’ble Supreme Court in Chand Rani v.Kamal Rani7 case, it is clearly known that in the
case of sale of immovable property, time is never regarded as the essence of the
contract. An intention to make time the essence of the contract must be expressed in
unequivocal language. As to the point of limitation is concerned, the suit for specific
performance has to be filed within reasonable time which depends upon facts and
circumstances of each case. Even if it is not of the essence of the contract, the Court
may infer that it is to be performed in a reasonable time if the conditions are:
1. From the express terms of the contract;
2. From the nature of the property; and
3.From the surrounding circumstances, for example: the object of making the contract8.

6
J.P. Builders and Anr. v A. Ramadas Rao and Anr, (2011)1SCC429)
7
MANU/SC/0285/1993 : 1993 (1) SCC 519
8
Smt. Chand Rani (dead) by LRs. v. Smt. Kamal Rani (dead) by LRs, 1993 (1) SCC 519

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PRACTICAL PROBLEMS IN A SUIT FOR SPECIFIC

PERFORMANCE OF CONTRACT
Problem 1- If the purchaser failed to pay Rs. 4,00,000 within one month and thereby prevented
the vendor from purchasing another property and shifting to such premises, the vendor will not
be able to perform his obligation to deliver vacant possession. If so, whether such contract is
valid?

Answer:- Section 53 of The Indian Contract Act, 1872, provides the answer to the problem.
Further, the following illustrations succinctly explain the solution for the problem.
Illustration:-
‘A’ executed an agreement of sale in favour of B. advance of Rs 4,00,000/- was paid to A out of
sale price of Rs.10,00,000/-. Rs.4,00,000/- is to be paid to paid within one month to A to enable
him to purchase an alternative property and to shift his residence from the property agreed to
be sold, and sale deed has to be executed within three months from the date of agreement of
sale and vacant possession of the premises should be given, against payment of balance price. If
‘B’ failed to pay Rs. 4,00,000 within one month and thereby prevented A from purchasing
another property and shifting to such premises, ‘A’ will not be able to perform his obligation to
deliver vacant possession. Thus the contract becomes voidable at the option of ‘A’.

Problem 2- Can a person from co- parcencer can enforce a specific performance of a contract?

Answer to this query of specific performance of contract is that a purchaser from a co-parcener
can enforce a specific performance of his contract against the other co-parceners with him.
Illustration-
"A and B are joint tenants of land, his undivided moiety of which either may be alien in his
lifetime, but which, subject to that right, devolves on the survivor. A contracts to sell his moiety
to C, and dies. C may enforce specific performance of the contract against B."
The above illustration, which is undoubtedly covered by the terms of the section 15 of the Act,

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is substantially the present case and shows that a purchaser from a co-parcener can enforce
specific performance of his contract against the other co-parceners.

Problem 3- Vendor did not sign on agreement of sale but vendee signed. This is contention of
vendor. Irrespective of written contract, the vendor and vendee both have same understanding
of the terms of agreement. In such a case, suit for specific performance is maintainable?

Answer- The answer is affirmative. Suit for specific performance is maintainable in such a case.
Illustration-
A is owner of land. A agreed to sell the land orally and receives Rs.80,000/- from B as an
advance out of sale consideration of Rs.2,00,000/-. A and B both have same understanding of
the terms of agreement. B vendee also signed on the agreement of sale. A vendor contends
that he did not sign on it and so there is no contract at all. A cannot contend that such
agreement is invalid for want of his signature. Specific performance is maintainable.

Problem 4- A party to a contract is unable to perform the whole of his part of it, and the part
which must be left unperformed forms a considerable portion of the whole, or does not admit
of compensation in money. If so, whether he is entitled to obtain a decree for specific
performance?

Answer- Where a party to a contract is unable to perform the whole of his part of it, and the
part which must be left unperformed forms a considerable portion of the whole, or does not
admit of compensation in money, he is not entitled to obtain a decree for specific performance.
But the Court may, at the suit of the other party, direct the party in default to perform
specifically so much of his part of the contract as he can perform: provided that the plaintiff
relinquishes all claim to farther performance, and all right to compensation either for the
deficiency, or for the loss or damage sustained by him through the default of the defendant.
The following illustration also gives answer to the problem.

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Illustration-
A contracts to sell to B a piece of land consisting of 100 bighas. It turns out that 50 bighas of the
land belong to A, and the other 50 bighas to a stranger, who refuses to part with them. A
cannot obtain a decree against B for the specific performance of the contract; but if B is willing
to pay the price agreed upon, and to take the 50 bighas which belong to A, waiving all right to
compensation either for the deficiency or for loss sustained by him through A's neglect or
default, B is entitled to a decree directing A to convey those 50 bighas to him on payment of the
purchase-money.

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CONCLUSION-
Inasmuch as the conduct of parties is very much important in a suit for specific performance,
the party who seek for relief of specific performance must approach the Court of law with clean
hands. Further, while preparing plaint and written statement of the parties, proper care and
caution must be taken and the relief must be clear and specific. I may conclude with
observations of Lord Chancellor Cottenham in Tasker v. Small 1834 (40) English Report 848 that
"It is not disputed that, generally, to a bill for a specific performance of a contract for sale, the
parties to the contract only are the proper parties; and, when the ground of the jurisdiction of
Courts of Equity in suits of that kind is considered it could not properly be otherwise. The Court
assumes jurisdiction in such cases, because a Court of law, giving damages only for the non-
performance of the contract, in many cases does not afford an adequate remedy. But, in equity,
as well as in law, the contract constitutes the right and regulates the liabilities of the parties;
and the object of both proceedings is to place the party complaining as nearly as possible in the
same situation as the defendant had agreed that he should be placed in. It is obvious that
persons, strangers to the contract, and, therefore, neither entitled to the right, nor subject to
the liabilities which arise out of it, are as much strangers to a proceeding to enforce the
execution of it as they are to a proceeding to recover damages for the breach of it."

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BIBLIOGRAPHY

1. articlesonlaw.worldpress.com
2. indiankanoon.org
3. Mulla, Pollock, The Secific Relief Act, 1963, Lexis Nexis,
Fourteenth Edition, 516 Pages
4. smallbusiness.findlaw.com
5. www.advocatekhoj.com
6. www.duhaime.org
7. www.legalservicesindia.com

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