Re. Section 14(1)(b) of Specific Relief Act
55. Though, in the written submissions tendered by the defendant as encapsulating the submissions advanced at the Bar, this contention has not been raised, it was, in fact, argued, and I proceed, therefore, to deal with it.
56. Section 14(1)(b) of the Specific Relief Act completely bars grant of interlocutory relief as sought by the plaintiff, contends Mr. Garg. The provision, as it stands today, reads thus:
“14. Contracts not specifically enforceable. - The following contracts cannot be specifically enforced, namely:—
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(b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise;”
57. This, however, is the amended avatar of Section 14. Prior to its amendment by Section 5 of the Specific Relief (Amendment) Act, 2018, Section 14 (to the extent relevant) read as under:
“14. Contracts not specifically enforceable.-
(1) The following contracts cannot be specifically enforced, namely:—
(d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.
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(3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases:—
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(c) 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:
Provided that the following conditions are fulfilled, namely:—
(i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work;
(ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such nature that compensation in money for non-performance of the contract is not an adequate relief; and
(iii) 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.”
58. Prior to its amendment, therefore, Section 14 required, for specific performance of a contract for the construction of a building, the contract to describe the building “in terms sufficiently precise to enable the courts to determine the exact nature of the building or work”. That requirement is now done away with. Decisions, which have held a contract for construction of a building or other work not to be capable of being enforced by way of specific performance on the ground that the contract is imprecise or vague, relating to causes of action arising during the currency of the pre-amended Section 14 of the Specific Relief Act cannot, therefore, prima facie, constitute valuable precedents, to guide cases arising after Section 14 was amended.
59. Having said that, “a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise” still remains impervious to enforcement by way of specific performance.
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)
73. 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.
74. 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 an exercise is necessarily to be eschewed, as it would militate against the legislative intent.
75. 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.
76. 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.
In the High Court of Delhi at New Delhi
(Before C. Hari Shankar, J.)
Grovy India Ltd. Vs Balbir Singh
IAs 6433/2020, IA 7643/2020 and CS(COMM) INFRA 1/2020
Decided on October 22, 2021
Citation: 2021 SCC OnLine Del 4783
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