1

PAPER PRESENTATION
ON
CONTOURS OF RELIEF OF SPECIFIC PERFORMANCE OF
CONTRACTS

By:
A.Pradeep,
II-Addl. Junior Civil Judge,
Karimnagar.

Introduction:-

The Specific Relief Act, 1963 extends to the whole of India, except the
State of Jammu and Kashmir. The Specific Relief Act deals only with certain
kinds of equitable reliefs and these are:

1) Recovery of Possession of property-Sections 5 to 8

2) Specific Performance of contracts- Sections 9 to 25
3) Rectification of Instruments- Section 26
4) Rescission of Contracts- Sections 27 to 30
5) Cancellation of instruments- Sections 31 to 33
6) Declaratory Decrees- Sections 34 and 35
7) Injunctions generally- Sections 36 and 37
8) Perpetual Injunctions- Sections 38 to 42

The other forms of Specific relief mentioned in the Code of Civil

Procedure and in statutes such as Transfer of Property Act, Trust Act, and
Partnership Act are different in origin and nature and are not included in this
Act. The cases of contract are governed by the statutory provisions contained
in the Indian Contract Act, 1872 and the provisions of the Specific Relief Act
do not apply to such cases.

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 fails to discharge such obligation. In case of his failure, the other party will
have a right to sue for performance of the contract. This is called ‘Specific
Performance’. Order 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 current law, courts grant specific performance when they perceive
that damages will be inadequate compensation. Specific performance is
deemed an extraordinary remedy, awarded at the court’s discretion.

Sections 9-25 deal with specific performance of contracts:

Basic rules:-
1. Decree of specific performance is discretionary relief. [Sukumar vs Susheel,
76 C.W.N 116] [See section 20 of S.R.Act]
2. There should be a valid contract.[ Ambica Prasad vs Naziran Bibi, AIR 1939
All 64], [Balram v Natku, AIR 1928 PC 75]
3. If damages are an adequate remedy, no specific performance would be
ordered.
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4. For the act which requires continued supervision of the Court, no specific
performance would be ordered. (Sec.14 (1) (d))
5. no specific performance would be ordered for contracts for personal work or
service
6. ‘Equity’ will insist on the principle of mutuality
7. The person against whom the relief is claimed may take plea by way of
defence under law relating to contract. (Sec.9)

When can specific performance of a contract be enforced?

According to section 10 of the Act, the specific performance of contract
can be enforced in the following cases:-

1. If there exists no standard for ascertaining the actual damage caused by the
non performance of the act which agreed to be done
2. When pecuniary compensation for its non performance would not afford
adequate relief.
3. When it is probable that pecuniary compensation cannot be got for the non
performance of the act agreed to be done

Can part of contract be enforced?

According to section 12 of the Act, the specific performance of part of
contract may be enforced in the following cases:-

1. Section 12 of the Act corresponds to Sections 13 to 17 of the Act with

certain modifications.
2. Section 12 (1), (2) and (4) of the Act provide exceptions to the general rule
of specific performance of a part of a contract.
3. As a general rule, a contract is intended to be deal with as a whole but not
piecemeal. However, section 12(1) is an exception to the general rule. Lord
Romilly M.R opined that ‘the Court can not specifically perform the contract
piece meal but it must be performed in its entirety if performed at all’.
4. The part unperformed must be a considerable portion of the whole; or
5. It does not admit of compensation in money;
6. The part to the contract who is not in default can sue for part performance.

What type of contracts cannot be enforced?

Under section 14 of the Act, the following contracts cannot be enforced:

1. Contracts in which compensation in money is an adequate relief.[ See

section 14 (1) (a) of S.R.Act) , [Devendar Singh vs Syed Khaja, AIR 1973 SC
2457]
2. Contracts involving personal service.[Vaish Degree College, Shamli vs
Lakshmi Narayan, AIR 1976 SC 888]
3. Contracts with uncertain terms.
4. Contracts in its nature determinable
5. Contracts which or not valid in Law
6. Contracts involving continuous supervision of the Court
7. Contracts to build or repair works ( subject to some exceptions) [Union
Construction Co. vs Chief Engineer,Estern Command,Lucknow,AIR 1960 All
72]
8. The Contract by Hindu parent or guardian to give a child in marriage cannot
be specifically enforced. [Gumpat Narain Singh inre, ILR 1 Cal.74]
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Who can obtain Specific performance of a contract?

Section 15 of the Act says specific performance of a contract may be
obtained by Any party thereto
1. The representative-in-interest, or the principal, or any party thereto
excepting where the earning skill, solvency or any personal quality of such
party is a material ingredient in the court.

2. If personal skill of one party is essential element of the contract of specific

performance is frustrated with death of that party and legal representative of
that party cannot demand specific performance of the contract

What are the defences available to the defendant in suit for specific
performance of contract?
The Defendant may set up any one of the following defences in a suit for
specific performance of contract.
1. Compensation in money would be adequate relief
2. Plaintiff’s unperformed part is large
3. Contract depends on personal qualifications or volition of parties.[Motiram
vs Khyli Ram, AIR 1967 All 484]
4. Wanting title
5. Wanting in mutuality
6. Contract is devoid of consideration
7. Essential part of contract has ceased to exist
8. Performance of contract would involve hardship to defendant than the
plaintiff
9. Performance of contract involves continuous duty over three years
10. Uncertainty in terms of contract

Personal bars to relief under specific performance of contract under

section 16:-
Specific performance of contract cannot be enforced in favour of a
person in the following cases:-

1. Who would not be entitled to recover compensation for its breach; or

2. Who has become incapable of performing or violates any essential term of,
the contract that in his part remains to be performed or acts in fraud of the
contract, or wilfully acts at variance with or in subversion of the relation
intended to be established by the contract; or
3. 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?

What does discretion and power of court mean?

Section 20 of the Act says:-
1. The jurisdiction to decree specific performance is discretionary.
2. The Court is not bound to grant such relief merely because it is lawful to do.
3. The discretion of the Court should be arbitrary but sound and reasonable,
guarded by judicial principles and capable of correction by a Court of appeal.

What are the circumstances in which the Court can exercise its discretion
properly ?

1. If the terms of contract give the plaintiff unfair advantage over the
defendant; or
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2. If the conduct of the parties of contract or other circumstances, gives the

plaintiff unfair advantage over the defendant
3. If the performance of contract would involve hardship on the defendant
which he did not foresee, whereas its non performance would involve no such
hardship on the plaintiff; or
4. Where the defendant entered into the contract under circumstances which,
though not rendering the contract voidable makes it inequitable to enforce
specific performance

What do the terms ‘Ready and willing to perform’ mean? Whether the
conduct of the plaintiff is to be considered in a suit for Specific
Performance Suit?
In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors.
MANU/SC/0025/1996: (1995) 5 SCC 115 at para 5, this Court held:

...Section 16(c) of the Act envisages that plaintiff must plead and prove
that he had performed or has always been ready and willing to perform the
essential terms of the contract which are to be performed by him, other than
those terms the performance of which has been prevented or waived by the
defendant. The continuous readiness and willingness on the part of the plaintiff
is a condition precedent to grant the relief of specific performance. This
circumstance is material and relevant and is required to be considered by the
court while granting or refusing to grant the relief. If the plaintiff fails to either
aver or prove the same, he must fail. To adjudge whether the plaintiff is ready
and willing to perform his part of the contract, the court must take into
consideration the conduct of the plaintiff prior and subsequent to the filing of
the suit alongwith other attending circumstances. The amount of consideration
which he has to pay to the defendant must of necessity be proved to be
available. Right from the date of the execution till date of the decree he must
prove that he is ready and has always been willing to perform his part of the
contract. As stated, the factum of his readiness and willingness to perform his
part of the contract is to be adjudged with reference to the conduct of the party
and the attending circumstances. The court may infer from the facts and
circumstances whether the plaintiff was always ready and willing to perform
his part of the contract.

Is specific performance of contract by Minor enforceable?

Sri Kakulam Subrahmanyam and another Vs. Kurra Subba Rao,
AIR1948PC95, Held: A minor’s agreement being now decided to be void, it is
clear that there is no agreement to be specifically enforced; and it is
unnecessary to refer to former decisions and distinctions, following English
authorities which were applicable only on the view now overruled by the Privy
Council.

Is specific performance of contract by Agent enforceable?

An agent cannot personally enforce contracts entered into by him on
behalf of his principal not is he personally bound by them in the absence of any
contract to that effect. See section 230 of Indian Contract Act,1872.

Can Legal representative enforce specific performance of contract?

The legal representative of a deceased party can enforce a contract of
sale. See ruling 1972 (2) MLJ 281, Dorai Swany vs Kanuiappa.
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Whether specific performance of contract can be granted with doubtful

title?
No. Where the doubtfulness of the title cannot be resolved except by
proving certain intruinsic facts or by agitating against the parties other than the
parties to the contract; the court cannot grant the relief of specific performance;
A doubtful title is one regarding which some doubt persists but a bad title one
defective in its nature. See Ahmedbhoy vs Sir Dinshaw.

When Time is essence of contract?

In AIR2011SC3234, 2011(5)ALD100(SC), Mrs. Saradamani
Kandappan’s case, it was observed that the legal position is clear from the
decision of a Constitution Bench of this Court in Chand Rani v.Kamal Rani
MANU/SC/0285/1993: 1993 (1) SCC 519, wherein this Court outlined the
principle thus:

It is a well-accepted principle that in the case of sale of immovable

property, time is never regarded as the essence of the contract. In fact, there is a
presumption against time being the essence of the contract. This principle is
not in any way different from that obtainable in England. Under the law of
equity which governs the rights of the parties in the case of specific
performance of contract to sell real estate, law looks not at the letter but at the
substance of the agreement. It has to be ascertained whether under the terms of
the contract the parties named a specific time within which completion was to
take place, really and in substance it was intended that it should be completed
within a reasonable time. An intention to make time the essence of the contract
must be expressed in unequivocal language.

In the case of Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani
(dead) by LRs, 1993 (1) SCC 519, it was held that in the case of sale of
immovable property there is no presumption as to time being the essence of the
contract. 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
contract.

Is suit for specific performance of contract by one of joint promisees

maintainable?
Smt. Nirmala Bala Dasi and Anr. Vs. Sudarsan Jana and Ors.
AIR1980Cal258. Reliance in this connection may also be placed on the
following passage from the judgment of Privy Council in the case of
Monghibai v. Cooverji Umersey, reported in MANU/PR/0023/1939 : AIR 1939
PC 170 :–
“It has long been recognized that one or more of several persons jointly
interested can bring an action in respect of joint property and if their right to
sue is challenged can amend by joining their co-contractors as plaintiffs if they
will consent or as co-defendants if they will not. Such cases as (1879) 11 Chn
D 121 and (1898) 2 QB 380 are examples of this principle. Nor indeed would it
matter that a wrong person had originally sued though he had no cause of
action : See (1902) 2 KB 485. Once all the parties are before the Court, it can
make the appropriate order and should give judgment in favour of all the
persons interested whether they be joined as plaintiffs or defendants.”
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Can an unregistered agreement of sale be marked in suit for specific

performance?

(i) A document produced for inspection of the Court cannot be admitted in

evidence under Section 49(c) of the Registration Act, if it is required
registration under Section 17 of the said Act.

(ii) Any document by whatever name called not creating, declaring, assigning,
limiting or extinguishing any right, title or interest, but merely creating right to
obtain another document does not require registration under Section 17(1) of
the Registration Act.

(iii) As a necessary corollary a document of contract for safe of immovable

property creating right to obtain another document shall not require registration
by reason of the payment of earnest money or whole or part of purchase money
by the purchaser.

(iv) In any event, the prohibition under Section 49(c) of the Registration Act
does not apply to an unregistered document effecting immovable property in a
suit for specific performance under the Specific Relief Act or as evidence of
part performance of contract of as evidence of any collateral transaction not
required to be effected by registered document.

What are the essential elements to constitute ‘Lis Pendens’?

In order to constitute a lis pendens the following elements must be
present :-

(I) There must be a suit or proceeding pending in a Court of competent

jurisdiction.
(II) The suit or proceeding must not be collusive.
(III) The litigation must be one in which right to immovable property is
directly and specifically in question.
(IV) There must be a transfer of or otherwise dealing with the property in
dispute by any party to the litigation.
(V) Such transfer must affect the rights of the other party that may ultimately
accrue under the terms of the decree or order.

Application of Order 22 Rule 10 of CPC and Order 1 Rule 10 CPC in

specific performance of contract?
The object of Order 1, Rule 10, C.P.C. is to discourage contest on
technical pleas, and to save honest and bona fide claimants from being non-
suited. The power to strike out or add parties can be exercised by the Court at
any stage of the proceedings. Under this Rule, a person may be added as a
party to the suit in the following two contingencies: -

(i) When he ought to have been joined as plaintiff or defendant, and is not
joined so, or

(ii) When, without his presence, the questions in the suit cannot be completely
decided.

Order 1 Rule 10 cpc is wider than the scope Order 22 Rule 10 Cpc.
Order 22 Rule 10 Cpc is merely an enabling provision and that it has certain
parameters. Order 22, Rule 10, C.P.C. speaks of cases of an assignment,
creation or devolution of any interest during the pendency of a suit and the suit
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may, by leave of the Court, be continued by or against the person to or upon

whom such interest has come or devolved. (See the ruling Lingaraja Mohanty
vs Binodini Mohanty & Ors. on 20 April, 2011)

Alternative relief of refund of earnest money?

Where the vendee suing for specific performance of contract of sale in
the same suit asked in the alternative for the relief of refund of earnest money
or advance money, paid under the contract of sale, can, as an aggrieved person,
prefer appeal against the judgment and decree of the first court which granted
him only the relief of return of the earnest money or advance money while
denying him the relief of specific performance. (See ruling AIR 1991 Madras
163, Ramani Ammal vs Susilammal)

Can amendment application be permitted relating to compensation in a

suit for specific performance?
Where an amendment relates to relief of compensation in lieu of or in
addition to specific performance where the plaintiff has not abandoned his
relief of specific performance the ourt will allow the amendment at any stage
of the proceeding. [See AIR 1992 SC 1604, Jagdish Singh vs Nathu Singh]

What is the distinction between ‘Compensation’ and ‘Damages’?

In the case of Mahamed Mozaharal Ahad Vs. Mahamed Azimaddin
Bhuinya, AIR1923Cal507, Held: As Lord Esher observed in Dixon v. Calcraft
(1892) 1 Q.B. 458 (463) the expression compensation is not ordinarily used as
an equivalent to damages, although as remarked by Fry, L.J. in Skinners’ Co. v.
Knight (1891)2 Q.B. 542 compensation may often have to be measured by the
same rule as damages in an action for the breach. The term Compensation as
pointed out in the Oxford Dictionary, signifies that which is given in
recompense, an equivalent rendered.Damages, on the other hand; constitute the
sum of money claimed or ad judged to be paid in compensation for loss or
injury sustained; the value estimated in money, of something lost or withheld.
The term compensation etymologically suggests the image of balancing one
thing against another; its primary signification is equivalence, and the
secondary and more common meaning is something given or obtained as an
equivalent.

Can Court make an order under section 151 CPc directing the plaintiff to
file an undertaking that he will pay some amount directed by the court to
the defendant as damages if he fails in the suit?
A Court in exercise of inherent power under Section 151 of the Code
cannot make an interim Order directing the Plaintiff to file an undertaking that
he will pay a sum directed by the Court to the Defendant as damages in case he
fails in the suit. [2010(5) ALD124(SC), Vinod Seth Vs. Devinder Bajaj and
Anr.]

Is escalation in the price of the land ground to deny relief of specific

performance? Explain section 20 of SR Act.

Escalation in the price of the land cannot, by itself, be a ground for

denying relief of specific performance. In K. Narendra v. Riviera Apartments
(P) Ltd. (supra), this Court interpreted Section 20 of the Act and laid down the
following propositions:

Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction
to decree specific performance is discretionary and the court is not bound to
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grant such relief merely because it is lawful to do so; 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. Performance of the contract
involving some hardship on the Defendant which he did not foresee while non-
performance involving no such hardship on the Plaintiff, is one of the
circumstances in which the court may properly exercise discretion not to
decree specific performance. The doctrine of comparative hardship has been
thus statutorily recognized in India. However, mere inadequacy of
consideration or the mere fact that the contract is onerous to the Defendant or
improvident in its nature, shall not constitute an unfair advantage to the
Plaintiff over the Defendant or unforeseeable hardship on the Defendant.[ See
AIR2012SC2035, Narinderjit Singh Vs. North Star Estate Promoters Ltd.]

Whether grant of relief for specific performance will cause hardship to

Defendant within meaning of Clause (b) of Sub-section (2) of Section 20 of
Specific Relief Act, 1963?
The question as to whether the grant of relief for specific performance
will cause hardship to the Defendant within the meaning of Clause (b) of sub-
section (2) of Section 20 of the Specific Relief Act, 1963, being a question of
fact, the first appellate court without framing such an issue ought not to have
reversed the finding of the trial court while concurring with it on all other
issues with regard to the Appellant’s entitlement to relief for specific
performance of contract.[ Prakash Chandra Vs. Narayan, AIR2012SC2826]

When does ‘false representation’ disentitle the plaintiff to the equitable

relief under section 22 of the Act?
The question naturally arises as to whether this false representation
disentitles the plaintiffs to the equitable relief under S. 22 of the Act. As stated
earlier, mere false representation is not enough. It has to be further shown by
the defendants that this false representation 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 plaintiffs.(AIR1967AP63, Vuppalapati
Butchiraju and Anr’s case)

The plea of ‘Bonafide purchaser’

Section 19(b) of the Specific Relief Act, 1963, protects the bona fide
purchaser in good faith for value without notice of the original contract. This
protection is in the nature of an exception tot he general rule. Hence the onus of
proof of good faith is on the purchaser who takes the plea that he is in innocent
purchaser. Good faith is a question of fact to be considered and decided on the
facts of each case. Section 52 of the Penal Code emphasises due care and
attention in relation to good faith. In the General Clauses Act emphasis is laid
on honesty.(Narayana Reddy (deceased) (D2) and Ors. Vs. P. Chandra Reddy,
MANU/TN/7408/2007)

Whether Court need to grant the order for specific relief on the ground
that it is lawful to grant specific relief?
“The jurisdiction to decree specific relief is discretionary and the Court
can consider various circumstances to decide whether such relief is to be
granted. Merely because it is lawful to grant specific relief, the Court need not
grant the order for specific relief; but this discretion shall not be exercised in an
arbitrary or unreasonable manner. Certain circumstances have been mentioned
in Section 20(2) of the Specific Relief Act, 1963 as to under what
circumstances the Court shall exercise such discretion.
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If under the terms of the contract the plaintiff gets an unfair advantage
over the defendant,
the Court may not exercise its discretion in favour of the plaintiff. So also,
specific relief may not be granted if the defendant would be put to undue
hardship which he did not foresee at the time of agreement. If it is inequitable
to grant specific relief, then also the Court would desist from granting a decree
to the plaintiff.” (This para was observed in Nallam Seeta Mahalakshmi and
Ors. Vs. Talari Vijayalakshmi, 2005(4)ALD130).

Would a bare averment in the plaint or a statement made in the

examination-in-chief suffice to prove ready and willing to perform
contract?

In Umabai and Anr. v. Nilkanth Dhondiba Chavan (Dead) by LRs and

Anr. MANU/SC/0285/2005 : (2005) 6 SCC 243, it was observed as follows.
It is now well settled that the conduct of the parties, with a view to arrive
at a finding as to whether the Plaintiff-Respondents were all along and still are
ready and willing to perform their part of contract as is mandatorily required
under Section16(c) of the Specific Relief Act must be determined having
regard to the entire attending circumstances. A bare averment in the plaint or a
statement made in the examination-in-chief would not suffice. The conduct of
the Plaintiff-Respondents must be judged having regard to the entirety of the
pleadings as also the evidences brought on records.

Can Karta Alienate of joint family property?

Even if it is to be assumed that the property in question was part of the
assets of the co-parcenerary or joint family, it is possible for a karta, which, the
appellant indeed is, to alienate the property for the family necessity. The right
of the karta of a Hindu Joint Family, in this regard, is almost unquestioned. The
only rider is that the co-parceners can challenge the sale so made, at a later
point of time, by pleading that there did not exist any genuine family necessity,
warranting the sale of the property.(Jala Anjaiah Vs. Ramisetty Anjaiah,
MANU/AP/1014/2011).

Sources referred:
Latestlaws.com
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LIMITATION
[Article 54 of the Indian Limitation Act]

In third column of Article 54 of the Limitation Act, it is

mentioned that “the date fixed for the performance, or, if no such date is fixed
when the Plaintiff has notice that performance is refused”.

Therefore, it is itself clear from said provision that this article is divided
in two parts. If in a contract time for its specific performance is fixed the first
part of this article would be applicable and other cases its second
part would be applicable. In absence of fixed date for the
performance of the contract the time doesn't start to run until there has been a
demand and there is refusal to perform the contract by the party who is bound
to perform the contract. The date then commences from the date when the
plaintiff got the notice of refusal.

Whether a party got notice of refusal or not depends on the facts and
circumstances of each case and the evidence put forth by the party to that
effect, if no specific evidence is brought before the Court then the Court will
have to draw inference from the surrounding facts and circumstances regarding
the refusal to perform the contract and subsequently when the limitation period
would begin to run.

The date mentioned in Article 54 suggests a specified date in the

calendar also the word “notice” means intimation, information, cognizance or
observance. Notice also indicates knowledge and this knowledge comes
from direct perception or from inference reasonably arising out of several facts
and circumstances.

In a case where no time for performance is fixed the Court is required to

find the date on which the plaintiff had notice that the performance had been
refused and on finding that date to see whether the suit was filed within three
years thereof.

The second part of the Article 54 is attracted only when the whole
evidence is considered in the Court and the Court on going
through the same will have to decide whether the suit had been filed within
three years of the date of refusal.

In a contract of sale if no date of performance is fixed and there is no

demand for performance and also no refusal to perform the contract and no
notice or knowledge that the contract was repudiated, cancelled then the
question of limitation would not arise as there would not be any
specific date or incidence for the limitation period to start for a suit for specific
performance. Also the refusal to perform the contract may be in various ways it
can be express, implied, it may be gathered from the circumstances for a
particular case.

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

Vs. Bibijan & Ors. AIR 2009 S.C. 2193, the Hon'ble Supreme Court has
observed :

“The inevitable conclusion is that the expression 'date fixed for

the performance' is a crystallized notion. Thus is clear from the
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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 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
other 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 calender.”

(b) Extension of Time for Performance by Contract.

The parties to the contract can mutually extend time for

performance of such contract. Extension of time can be implied and can be
also gathered from the conduct of the parties. There can be
contracts in which no time is fixed for performance of a contract. Time is
normally not of essence in contracts for purchase of an immovable property. In
such cases where extension of time is pleaded or no time is fixed, second part
of Article 54 applies and period of limitation begins from the date when the
plaintiff has notice that performance has been refused.

In Gunwantbhai Mulchand Shaha and others Vs. Anton Elis Farel and
others (2006)3 scale(82) : A.I.R.2006 SCW 1377, the Hon'ble Supreme Court
has observed :

"We may straight way say that the manner in which the question of
limitation has been dealt with by the courts below is highly
unsatisfactory. It was rightly noticed that the suit was governed by
Article 54 of the Limitation Act, 1963. When the enquiry could have been,
first, whether any time was fixed for performance in the agreement for sale and
if it was so fix, to hold that a suit filed beyond three years of the date was
barred by limitation unless any case of extension was pleaded and
established. But in a case where no time for performance was fixed, the court
had to find the date on which the plaintiff had noticed that the performance
was refused and on finding that date, to see whether the suit was
filed within three years thereof.''

The Limitation Act provides for a limitation period for a suit of specific
performance of agreement of sale of immovable property in Article 54 and the
said period of limitation is of three years for the purpose of filing the suit for
specific performance. The said period of limitation commences from the date
fixed for the performances in the agreement or in the event of no such
date being fixed, when the plaintiff had noticed that the performance is
refused.

The purpose of institution of the date for specific performance,

two dates are material i.e., i) The date fixed for performance or ii)
The date when the plaintiff had noticed that, the performance is refused. It
may be noted that, the date of agreement is irrelevant for the purpose of
limitation.
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There can also be situations wherein the original agreements

had fixed date for performance, but owing to the subsequent conduct,
the parties postponed the performance to a future date without fixing any
further date for performance. It would therefore be natural for the
performance being extended, although the original agreement may have fixed
date for performance.

However, these arrangements between the parties to the contract

are also permitted under the provisions of Sections 50, 55 and 63 of the
Contract Act. These provisions provide for
i) The performance of any promise at any time in the manner
which the promissee sanctions.
ii) If the promisee accepts the performance of the promise at any time other
than that agreed and iii) Every promissee may extend time for the performance
of contract.

Effect of Stipulation of Bringing Permission for Sale for Specific

Performance of Contract on Limitation. The agreements embodying
stipulation of bringing permission for sale from concerned authorities are
forbidden by law as its object is unlawful within the meaning of
Section 23 and are contingent within the meaning of Section 31 of Contract
Act. It means fate of such agreements is depend on the contingency (grant or
refusal) of permission. If authority grants permission for sale then agreement is
contract enforceable by law. If authority rejects permission for sale then
agreement is unenforceable at law owing to unlawful object and is
void. However, for the grant of decree of specific performance of
contract permission of concerned authorities is no bar.

In the case of Rojasara Ramjibhai Dahyabhai Vs. Jani Narottamdas

Lallubhai, AIR 1986 SC 1912., the Hon'ble Supreme Court has
observed:

“There was an agreement for sale of flat which had to be

finalized after obtaining permission of authorities to use as village site
was a precondition for the execution of the sale deed. The suit for
specific performance was filed within three years after obtaining
permission, it was held to be not barred by limitation.”

In the case of Nirmala Anand Vs. Advent Corporation Pvt. Ltd., AIR
2002 SC 2290, the Hon'ble Supreme Court has observed :

“ When the construction company refused construction on the

ground that the original lease of plot was terminated by the
municipality and the facts showed that there was a possibility of renewal
of lease and revalidation of building plan and the purchaser was
ready to perform her part of the contract, then specific performance
cannot be refused.”

In the case of Balu Babu Rao Vs. Shaik Akbar, AIR 2001 Bombay 364,
in the context of Section 43 of the Bombay Tenancy and
Agricultural Lands Act and Section 20 of the Specific Relief Act
the Hon'ble Bombay High Court has observed :
 13

“When the suit property was not transferable, without prior permission
of the collector a decree of specific performance granted subject to
sanction of collector cannot be held to be improper.”

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.

It is not disputed that, generally, to a suit 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 nonperformance 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.

Sources referred:
mja.gov.in
 14

CASES LAWS

The Hon’ble Supreme Court in CIVIL APPEAL NO.3777 OF 2018

between Sucha Singh Sodhi v Baldev Raj Walia, has held that a plaintiff
could not claim the relief of specific performance of agreement along with the
relief of a permanent injunction in a suit.

The cause of action to claim a relief of permanent injunction and the

cause of action to claim a relief of specific performance of agreement are
independent and one cannot include the other and vice versa. In other words, a
plaintiff cannot claim a relief of specific performance of agreement against the
defendant on a cause of action on which he has claimed a relief of permanent
injunction.

When both the reliefs/claims namely, (1) Permanent Injunction and (2)
Specific Performance of Agreement are not identical, when the causes of action
to sue are separate, when the factual ingredients necessary to constitute the
respective causes of action for both the reliefs/claims are different and lastly,
when both the reliefs/claims are governed by separate articles of the Limitation
Act, then, in our opinion, it is not possible to claim both the reliefs together on
one cause of action.

In CIVIL APPEAL No(s). 10191 OF 2018 between VIJAY KUMAR & ORS.
vs OM PARKASH

The Hon’ble Supreme Court, while restoring a trial court order that
dismissed a suit for specific performance of contract, has reiterated that, in
order to obtain a decree for specific performance, the plaintiff has to prove and
establish his readiness and willingness to perform his part of the contract
throughout.
Referring to evidence on record, the bench said: “In order to obtain a
decree for specific performance, the plaintiff has to prove his readiness and
willingness to perform his part of the contract and the readiness and
willingness has to be shown throughout and has to be established by the
plaintiff.

In A.C. Arulappan v. Smt. Ahalya Naik case the Hon’ble Supreme Court
made following observations :
".....7. The jurisdiction to decree specific relief is discretionary and the court
can consider various circumstances to decide whether such relief is to be
granted. Merely because it is lawful to grant specific relief, the court need not
grant the order for specific relief; but this discretion shall not be exercised in an
arbitrary or unreasonable manner. Certain circumstances have been mentioned
in Section 20(2) of the Specific Relief Act, 1963 as to under what
circumstances the court shall exercise such discretion. If under the terms of the
contract the plaintiff gets an unfair advantage over the defendant, the court may
not exercise its discretion in favour of the plaintiff. So also, specific relief may
not be granted if the defendant would be put to undue hardship which he did
not foresee at the time of agreement. If it is inequitable to grant specific relief,
then also the court would desist from granting a decree to the plaintiff." .....…
".....
 15

As per decision reported in 2011 (3) ALT 556 between

K.Venkat Reddy (died) as per L.Rs., K.Sudheer Reddy and others
vs. Banwari Lal Sharma and others the Hon'ble High Court held that
the subsequent conduct of the plaintiff also to be taken into consideration
though there is a direction for deposit of sale consideration by a specifid
date, it is stated that even as on today no such deposit has been made,
it is also pertinent to note that except the interested testimony of PW2
the scribe of Ex.A1 and the brother of PW1 no other independent
evidence is available. The Hon'ble Court opined that the plaintiff did not
approach the court with clean hands or with all the true facts the relief of
specific performance is an equitable relief such relief cannot be granted.

Hon'ble Supreme Court held (in case Modemshetti

Satyanarayana v. Yelloji Rao) that the readiness as contemplated
u/sec. 16 of Relief Act, is not confined to the one, referable to the date
on which the suit is filed. On the other hand, it must exist ever since the
payment of balance became due, and must subsist till the suit is filed.
On the other hand, it must exist ever since the payment of balance
became due and must subsist till the suit is filed, if not, thereafter. The
very fact that the appellant did not remit the amount with the bank, up
to the date of filing of suit which is more than two years from the due
date, is a strong indication that he was either not ready or not willing to
discharge his obligation. The Hon'ble Supreme Court opined that where
the discretion of the Court vested u/sec. 22 of Specific Relief Act, must
be exercised to refuse the relief of Specific Performance in favour of
appellant.

(ii) (2011) 1 SUPREME COURT CASES 429 J.P.BUILDERS AND ANOTHER V.

A.RAMADAS RAO AND ANOTHER would run thus:

It is settled law that even in

the absence of specific plea by the opposite party, it is the mandate of the statute that
the plaintiff has to comply with Section 16(c) of the Specific Relief Act and when
there is non-compliance with this statutory mandate, the Court is not bound to grant
specific performance and is left with no other alternative but to dismiss the suit. It is
also clear that readiness to perform must be established throughout the relevant
points of time. "Readiness and willingness" to perform the part of the contract has to
be determined/ascertained from the conduct of the parties."

In Syed Dastagir v. T.R.

Gopalakrishna Setty, 1999 (7) Supreme 175, the Supreme Court again reiterated that
compliance of readiness and willingness has to be in spirit and substance, and not in
letter and form. In a suit for specific performance, plaintiff must prove readiness and
willingness. The plaintiff has claimed a decree for specific performance and it is for
him to establish that he was, since the date of the contract, continuously ready and
willing to perform his part of the contract. If he fails to do so, his claim for specific
performance must fail. In a 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 transversed, he was required to prove a
continuous readiness and willingness from the date of the contract to the time of the
hearing, to perform the contract on his part. Failure to make good that averment
 16

brought with it the inevitable dismissal of his suit. The plaintiff must in a suit for
specific performance of an agreement plead and prove that he was ready and willing
to perform his part of the contract continuously between the date of the contract and
the date of hearing of the suit.

In a suit for specific performance it is the duty and part of plaintiff to establish that
she is always ready and willing to perform the contract. For a moment we assume that she is
able to prove the agreement of sale even though, she is not entitled to the relief of specific
performance when she failed to prove that she is always ready and willing to perform the
contract.
(i) 2010(10) SCC 512 [Man Kaur (Dead) By L.Rs. v. Hartar Singh Sangha]; certain excerpts from it
would run thus:
This contention has no merit. There are two distinct issues. The first issue is the
breach by the defendant vendor which gives a cause of action to the plaintiff to file a suit for
specific performance. The second issue relates to the personal bar to enforcement of a
specific performance by persons enumerated in Section 16 of the Act. A person 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 which are to be performed by him (other than the terms the
performance of which has been prevented or waived by the defendant) is barred from
claiming specific performance. Therefore, even assuming that the defendant had committed
breach, if the plaintiff fails to aver in the plaint or prove that he was always ready and
willing to perform the essential terms of contract which are required to be performed by him
(other than the terms the performance of which has been prevented or waived by the
plaintiff), there is a bar to specific performance in his favour. Therefore, the assumption of
the respondent that readiness and willingness on the part of the plaintiff is something which
need not be proved, if the plaintiff is able to establish that the defendant refused to execute
the sale deed and thereby committed breach, is not correct. when the contract has to be
performed, the plaintiff will not be entitled to specific performance, even if he proves breach
by the defendant, as he was not "ready and willing" to perform his obligations."

Highlights of the Specific Relief (Amendment) Act, 2018

Some key changes have been made to the Act. They are:

1. In Section 6 of the Act, the Parliament has widened its scope by

specifying that a suit for recovery of possession under Section 6 of the Act may
be filed either by the person who was dispossessed without his consent or any
person "through whom he has been in possession" or any person claiming
 17

through that person. Hence, the amendment has widened the scope of persons
who may file a suit under Section 6. Before the amendment, only the person
who had been wrongly dispossessed or any person claiming through him could
have filed this type of suit. Now, even a person through whom the aggrieved
person had been in possession of the immovable property, may file a suit under
Section 6 of the Act.

2. The second amendment is in Section 10 of the Act. It is one of the most

important amendments in the legislation as it has made specific performance of
a contract the rule instead of being an alternative in cases where the actual
damage for non-performance could not be ascertained or where the
compensation for non-performance would not be an adequate relief. Section 10
of the Act has been substituted and instead the newly inserted Section 10 states
that the specific performance of a contract shall be enforced by the court
subject to the provisions contained in sub-section (2) of Section 11, Section 14
and Section 16 of the Act.

Before this amendment, Section 10 of the Act read as under:

"10. 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."

The old Section 10 of the Act uses the phrase "may, in the discretion of
the court". It is clear from the usage of these words that the intention of the
legislature at the time of the enactment of the Act was to give discretion to
courts in deciding to direct or to not direct specific performance of a contract.
This discretion existed even when a contract satisfied the conditions that (i) the
actual damage due to non-performance was unascertainable or (ii) the
compensation in money for non-performance would not afford adequate relief.
Vide Explanation (i) to Section 10, in cases of contract to transfer immovable
 18

properties, the courts had to presume that the breach cannot be adequately
relieved by compensation in money. Vide Explanation (ii), in cases of transfer
of movable properties, the presumption was that the breach can be relieved by
compensation in money except in cases where the property is not an ordinary
one or is of special value or interest to the plaintiff or consists of goods not
easily obtainable, or where the property is held by defendant as the agent or
trustee of the plaintiff. This Explanation led to satisfaction of conditions to
prove a case for specific performance in cases of transfer of immovable
properties and in certain cases of transfer of movable properties. However,
even then the usage of the words "may, in the discretion of the court" ensured
that specific performance of any contract would not be ordered automatically
upon satisfaction of the abovementioned conditions and the courts had a
discretion in granting or not granting the relief of specific performance of
contracts.

However, by way of the amendment through the Specific Relief

(Amendment) Act, 2018 all the discretion in court is taken away by the
Parliament by stating that the specific performance of a contract "shall be
enforced" by the court subject to provisions contained in sub-section (2) of
Section 11, Section 14 and Section 16 of the Specific Relief Act, 1963.

The whole object behind this amendment seems to aim at strict

enforcement of specific performance of contracts not necessarily dealing
with transfer of immovable properties or other cases of transfer of movable
properties as referred in the Explanation to the unamended provision.
Therefore, the Bill seeks to permit specific performance by courts as a general
rule.

The amendment in this Section seems to have been moved to remove

uncertainty in the performance of contracts in order to encourage parties to
enter into developmental agreements and promote infrastructural projects for
rapid economic growth of the nation.

3. The third amendment is made in Section 11 of the Act which deals with
specific performance of contracts connected with trusts. The proposed
amendment is similar to that in Section 10. Here again, the words "contract
shall" instead of "contract may, in the discretion of the court" have been
substituted. The amendment seeks to take away the discretion of courts and is
aimed to guide the courts to mandatorily enforce specific performance.

4. The fourth amendment is in Section 14 of the Act which specifies the

contracts which are not specifically enforceable. The old Section is substituted
by the new one which aims to retain only some of the unamended clauses. It
states that only such contracts are not specifically enforceable where either (i)
substituted performance in accordance with Section 20 of the Act has been
obtained, or (ii) where the performance is of continuous duty which the courts
 19

cannot supervise; or (iii) where the contract is dependent on personal

qualifications of parties that the court cannot enforce it of its material terms;
and (iv) where the contract is determinable.

5. The fifth amendment is insertion of a new Section 14A which deals with
power of Courts to engage experts to assist the court on any specific issue
involved in the suit. The provision is made to empower civil courts to engage
an expert whose opinion or report will form part of the record of the suit and
can be examined on the same. Court may further direct any person to give
relevant information, or produce or provide to the expert access to any relevant
document, goods or property for inspection. However, it would be interesting
to see how courts will use this provision for achieving the ends. Also, the
provision saves the other provisions of the Code of Civil Procedure, 1908 on
this aspect.

6. The sixth amendment is in Section 15 of the Act which deals with the
persons who may obtain specific performance. It now includes a limited
liability partnership (LLP) formed from the amalgamation of two existing
LLPs, one of which may have entered into a contract before the amalgamation.

7. Section 16 of the Act has been amended as a consequence of the

Parliament's approach to enforce specific performance irrespective of grant of
damages or compensation as an alternative for breach or non-performance.
Also, the requirement stated in clause (c) of Section 16 to aver that the party is
ready and willing to perform the essential terms of the contract has been done
away with. Now, the party seeking specific performance only needs to prove
the same and is not required to aver in the pleadings. It would be interesting to
note the effect of this amendment on the suits seeking specific performance as
the courts were used to denying the relief of specific performance when the
plaintiff failed to aver its readiness and willingness to perform the contract. 


8. The eighth amendment is in Section 19 of the Act whereby provision has

been made by inserting clause (ca) which enables specific performance of a
contract to be enforced against a limited liability partnership which arises out
of amalgamation when the limited liability partnership which had entered into
a contract had got subsequently amalgamated with another limited liability
partnership.

9. The ninth amendment is in Section 20 of the Act whereby the concept of

substituted performance of contracts has been introduced. The whole
unamended Section 20 which provided for discretion to decree specific
performance has been substituted by a new section. This new provision gives
an option to the party which has suffered a breach to go for substituted
performance through a third party or by its own agency and recover the
expenses and other costs actually incurred, spent or suffered by such party
from the party which had committed the breach. However, sub-section(2) of
 20

Section 20 requires the party who has suffered such breach to give a written
notice of not less than 30 days to the party in breach. Also, the proviso to this
sub-section makes it clear that the party who has suffered such breach would
be entitled to recovery of such expenses and costs only if the contract has been
performed through a third party or by its own agency. Sub-section(3) makes it
further clear that once substituted performance has been opted, the party
suffering breach would not be entitled to claim relief of specific performance
against the party in breach. However, sub-section(4) protects claims of
compensation from the party in breach.

10. The Amendment Act of 2018 has further introduced Sections 20A, 20B
and 20C to the Act. Section 20A has made special provisions for contracts
relating to infrastructure projects which have been specified in the Schedule
inserted in the Act by the Amendment Act of 2018. It prohibits a civil court to
grant an injunction in relation to such infrastructure projects where grant of
such injunction would cause impediment or delay in progress or completion of
such projects. Section 20B provides for designation of Special Courts to try a
suit under the Act in respect of contracts relating to infrastructure projects.
Section 20C provides for expeditious disposal of suits filed under the
provisions of the Act to be disposed of within 12 months from the date of
service of summons to the defendant, which may be extended for a further
period not exceeding six months in aggregate.

11. There is a small amendment in Section 21 (which deals with power to

award compensation) wherein sub-section(1), the words "in addition to" have
been substituted for the words "either in addition to, or in substitution of". This
amendment is manifestation of the intention of the Legislature to promote
specific performance of contracts rather than claiming compensation in
substitution of specific performance.

12. The amendment in Section 25 is a consequence of the introduction of the

Arbitration and Conciliation Act, 1996 and repeal of the old Arbitration Act,
1940.

13. There is a further amendment in Section 41 of the Act which enlists the
situations in which an injunction cannot be granted. Clause (ha) has been
inserted which provides that an injunction cannot be granted if it would impede
or delay the progress or completion of any infrastructure project or interfere
with the continued provision of relevant facility related to such project or
services being the subject-matter of such project.

These amendments made by the Parliament clearly show the intention of

taking away the wide discretion of courts to grant specific performance and to
make specific performance of contract a general rule. Moreover, the provisions
introducing substituted performance of contracts and recovery of expenses and
costs, including compensation, from the party in breach are made so that
 21

projects are not delayed and development is not hindered by breaches. Special
provisions made in relation to infrastructure projects also carry the same
intention. The Amendment Act of 2018 has further empowered the courts to
engage experts in specific cases.

Sources referred:
Article by Apoorv sarvaria
VGC law firm