Sunday 20 February 2022

Whether the court can grant specific performance of construction contract?

 24.3. In order to determine the exact nature of the agreement

signed between the parties, the intent of the parties has to be

construed by reading the agreement as a whole in order to

determine whether it is an agreement simpliciter for

construction or an agreement that also creates an interest for

the builder in the property. Where under a development

agreement, the developer has an interest in land, it would be

difficult to hold that such an agreement is not capable of

being specifically enforced.”

(Italics and underscoring supplied)

22.7.2 Where, therefore, as in the present case, the agreement is not merely for development or construction on the property, but also envisages valuable rights enuring, in favour of the developer, in the constructed edifice, the Supreme Court itself holds, unequivocally, that it would be difficult to treat the agreement as incapable of specific performance.

22.8 The requirement of precision, in the construction contract, as a pre-condition for its enforceability, is relatable to the erstwhile Section 14(3)(c)(iii) of the Specific Relief Act. That requirement no longer figures on the statute book, after the amendment of Section 14 by the 2018 Amendment Act. In my prima facie opinion, lack of precision in the construction agreement can no longer be regarded, by itself, as a sufficient disqualification to its enforceability by specific performance. Else, it would be re-introducing, by a side wind, the consideration in the erstwhile Section 14(3)(c)(iii), which the legislature has consciously removed from the statute. Such anexercise is necessarily to be eschewed, as it would militate against the legislative intent.

22.9 The sequitur would, therefore, be that a construction contract can no longer be regarded as incapable of specific performance merely because its terms are imprecise or vague. If, however, owing to such imprecision or vagueness, any direction for specific performance would require continuous supervision by the Court, that would, even now, render the agreement incapable of specific performance by virtue of Section 14(b). For that, however, the Court would have to arrive at a finding that, owing to the imprecision of the agreement, or for any other reason, any direction for specific performance would require continuous supervision by the Court. In the scenario of Section 14 as it exists today, and without the support of the erstwhile Section 14(3)(c) and its various clauses, this would, in almost every case, be arguable at the very least.

22.10 Prima facie, in view of the above legal position, I am unable to convince myself to hold, prima facie, that the defendant has been able to make out a case of the PDA being incapable of specific performance, by operation of Section 14(b) of the Specific Relief Act, as would justify vacation of the interim direction to maintain status quo in respect of the suit property.


Pronounced on: 22nd October, 2021

IAs 6433/2020 & IA 7643/2020 in





Dated: 22.10.2021

Read full Judgment here: Click here

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