Friday, 18 May 2018

SHORT NOTES ON SPECIFIC RELIEF ACT PART 1

[Act 47 of 1963 as amended up to Act 34 of 2019]
S 2 Definition:
(a) Obligation includes every duty enforceable by law.
S 4. Specific relief is to be granted only for enforcing individual civil rights and not for enforcing penal law.

S 5. Recovery of specific immovable property in accordance with CPC.

S 6. Suit by person dispossessed of immovable property:-
—(1) If any person is dispossessed without his consent of immovable property otherwise than in due course of law, he or any person [through whom he has been in possession or any person] claiming through him may, by suit, recover possession thereof, notwithstanding any other title that may be set up in such suit.
Ins. by Act 18 of 2018, S. 2 (w.e.f. 1-10-2018).
(2) No suit under this section shall be brought—
(a) after the expiry of six months from the date of dispossession; or
(b) against the Government.
(3) No appeal shall lie from any order or decree passed in any suit instituted under this section, nor shall any review of any such order or decree be allowed.
(4) Nothing in this section shall bar any person from suit to establish his title to such property and to recover possession thereof.
S 7.Recovery of specific movable property in accordance with CPC.
S 10. Cases in which specific performance of contract is enforceable:
[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.]
Subs. by Act 18 of 2018, S. 3 (w.e.f. 1-10-2018).
11. Cases in which specific performance of contracts connected with trusts enforceable.—(1) Except as otherwise provided in this Act, specific performance of a [contract shall], be enforced when the act agreed to be done is in the performance wholly or partly of a trust.
Subs. for “contract may, in the discretion of the court” by Act 18 of 2018, S. 4 (w.e.f. 1-10-2018).
(2) A contract made by a trustee in excess of his powers or in breach of trust cannot be specifically enforced.
[14. Contracts not specifically enforceable.—The following contracts cannot be specifically enforced, namely—
(a) where a party to the contract has obtained substituted performance of contract in accordance with the provisions of Section 20;
(b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise;
(c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and
(d) a contract which is in its nature determinable.]
Subs. by Act 18 of 2018, S. 5 (w.e.f. 1-10-2018).
[14-A. Power of court to engage experts.—(1) Without prejudice to the generality of the provisions contained in the Code of Civil Procedure, 1908 (5 of 1908), in any suit under this Act, where the court considers it necessary to get expert opinion to assist it on any specific issue involved in the suit, it may engage one or more experts and direct to report to it on such issue and may secure attendance of the expert for providing evidence, including production of documents on the issue.
(2) The court may require or direct any person to give relevant information to the expert or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.
(3) The opinion or report given by the expert shall form part of the record of the suit; and the court, or with the permission of the court any of the parties to the suit, may examine the expert personally in open court on any of the matters referred to him or mentioned in his opinion or report, or as to his opinion or report, or as to the manner in which he has made the inspection.
(4) The expert shall be entitled to such fee, cost or expense as the court may fix, which shall be payable by the parties in such proportion, and at such time, as the court may direct.]
Ins. by Act 18 of 2018, S. 5 (w.e.f. 1-10-2018).
S 15. Who may obtain specific performance:-
a) any party to contract;
b)the representative in interest or the principal, of any party to contract.
c) Where contract is a settlement on marriage, or a compromise of doubtful rights between members of the same family, any person beneficially entitled thereunder;
(d) where the contract has been entered into by a tenant for life in due exercise of a power, the remainderman;
(e) a reversioner in possession, where the agreement is a covenant entered into with his predecessor-in-title and the reversioner is entitled to the benefit of such covenant;
(f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is entitled to the benefit thereof and will sustain material injury by reason of its breach;
[(fa) when a limited liability partnership has entered into a contract and subsequently becomes amalgamated with another limited liability partnership, the new limited liability partnership which arises out of the amalgamation.]
Ins. by Act 18 of 2018, S. 6 (w.e.f. 1-10-2018).
(g) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;
(h) when the promoters of a company have, before its incorporation, entered into a contract for the purposes of the company, and such contract is warranted by the terms of the incorporation, the company:
Provided that the company has accepted the contract and has communicated such acceptance to the other party to the contract.
16. Personal bars to relief.—Specific performance of a contract cannot be enforced in favour of a person—
[(a) who has obtained substituted performance of contract under Section 20; or]
Subs. by Act 18 of 2018, S. 7(i) (w.e.f. 1-10-2018). Prior to substitution it read as:
“(a) who would not be entitled to recover compensation for its breach; or”
(b) who has become incapable of performing, or violates any essential term of, the contract that on 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
(c) [who fails to 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 terms the performance of which has been prevented or waived by the defendant.
Subs. for “who fails to aver and prove” by Act 18 of 2018, S. 7(ii)(I) (w.e.f. 1-10-2018).
Explanation.—For the purposes of clause (c),—
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;
(ii) the plaintiff [must prove] aver performance of, or readiness and willingness to perform, the contract according to its true construction.
13. Subs. for “must aver” by Act 18 of 2018, S. 7(ii)(II) (w.e.f. 1-10-2018).

S 18 Non enforcement except with variation.
19. Relief against parties and persons claiming under them by subsequent title.—Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against—
(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;
(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant;
[(ca) when a limited liability partnership has entered into a contract and subsequently becomes amalgamated with another limited liability partnership, the new limited liability partnership which arises out of the amalgamation.]
 Ins. by Act 18 of 2018, S. 8 (w.e.f. 1-10-2018).
(d) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;
(e) when the promoters of a company have, before its incorporation entered into a contract for the purpose of the company and such contract is warranted by the terms of the incorporation, the company:
Provided that the company has accepted the contract and communicated such acceptance to the other party to the contract.
[20. Substituted performance of contract.—(1) Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.
(2) No substituted performance of contract under sub-section (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency:
Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency.
(3) Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach.
(4) Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach.]
Subs. by Act 18 of 2018, S. 10 (w.e.f. 1-10-2018). 
[20-A. Special provisions for contract relating to infrastructure project.—(1) No injunction shall be granted by a court in a suit under this Act involving a contract relating to an infrastructure project specified in the schedule, where granting injunction would cause impediment or delay in the progress or completion of such infrastructure project.
Explanation.—For the purposes of this section, Section 20-B and clause (ha) of Section 41, the expression “infrastructure project” means the category of projects and infrastructure Sub-Sectors specified in the schedule.
(2) The Central Government may, depending upon the requirement for development of infrastructure projects, and if it considers necessary or expedient to do so, by notification in the Official Gazette, amend the schedule relating to any category of projects or Infrastructure Sub-Sectors.
(3) Every notification issued under this Act by the Central Government shall be laid, as soon as may be after it is issued, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the notification or both Houses agree that the notification should not be made, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification.
20-B. Special Courts.—The State Government, in consultation with the Chief Justice of the High Court, shall designate, by notification published in the Official Gazette, one or more Civil Courts as Special Courts, within the local limits of the area to exercise jurisdiction and to try a suit under this Act in respect of contracts relating to infrastructure projects.
20-C. Expeditious disposal of suits.—Notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), a suit filed under the provisions of this Act shall be disposed of by the court within a period of twelve months from the date of service of summons to the defendant:
Provided that the said period may be extended for a further period not exceeding six months in aggregate after recording reasons in writing for such extension by the court.]
 Ins. by Act 18 of 2018, S. 10 (w.e.f. 1-10-2018).
S 21. Power to award compensation in certain cases:-
1) In a suit for specific performance of contract, plaintiff may also claim compensation for its breach, in addition to,such performance.
Subs. for “either in addition to, or in substitution of” by Act 18 of 2018, S. 11 (w.e.f. 1-10-2018).
2) Court may award damages if specific performance of contract is not granted.
3) Court may grant damages in addition to specific performance of contract.
4) In determining the amount of any compensation awarded under this section, Court shall be guided by principles of 73 of Indian Contract Act.
5) There should be pleading for grant of compensation. If not pleading, plaintiff can amend plaint.
S 22. Power to grant relief for possession, partition,refund of earnest money etc.
1) Any person suing for specific performance of contract may ask for a) possession or partition and separate possession of property, in addition to such performance;or
b) Any other relief to which he is entitled, including refund of any earnest money or deposit paid or made by him in case his claim for specific performance is refused.
2) No relief to be granted unless specifically claimed. Relief not claimed, plaintiff can be permitted to amend plaint.
S 23 Liquidation of damages not a bar to specific performance:-
Court will enforce specific performance of contract even though sum is mentioned in contract to be payable in case of breach of contract and party in default is willing to pay the same, if court having regard to terms of contract and other attending circumstances, satisfied that the sum was named only for the purpose of securing performance of contract and not for the purpose of giving to party in default an option of paying money in lieu to specific performance.


S 24. Bar of suit for compensation for breach after dismissal of suit for specific performance.

Read important judgment on specific performance of contract;

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