Get a Quote
Get a Quote and Find Services to Fit Your Needs 50000+ Satisfied Clients
5000+ Licenses & Registration
15 Branches across India
75 Years + Combined experience
The first-ever Specific Relief Act in India was a colonial-era Act enacted in 1877. However, this Act was later replaced by the current Specific Relief Act (SRA), 1963. The SRA is a crucial piece of legislation. It defines and amends the law relating to specific remedies for civil wrongs. It provides several types of specific relief, such as recovery of possession of property, injunctions, specific performance of contracts, rectification of instruments, cancellation of instruments, declaratory decrees and rescission of contracts.
The aim of the SRA is to provide relief to individuals whose civil rights have been violated particularly due to a breach of contract by compelling the defaulting party to perform the exact obligation or by granting remedies rather than only monetary compensation. In this blog post, we shall solely talk about the specific performance of contracts under the Specific Relief Act, 1963.
Specific performance refers to a legal remedy ordered by a court whereby the parties are compelled to perform their contractual duties. It was a discretionary remedy until the 2018 amendment, which made specific performance the general rule rather than a discretionary remedy.
This legal remedy ensures the contract’s true execution. It serves as a strong alternative to monetary compensation as it enforces the original promise that was made to the non-breaching party by the breaching party.
Let’s understand when the specific performance can be applied with the help of an example :-
A foreign corporation enters into a duly executed commercial agreement with an Indian company. As per the contract, the Indian company promises to establish and operationalize four liaison offices of the foreign corporation in specified metropolitan cities in India, namely, New Delhi, Bangalore, Pune and Mumbai, in accordance with applicable regulatory approvals and within a stipulated period.
In consideration thereof, the foreign corporation agrees to invest a sum of Rs. 50 crore for the establishment and operationalization of offices, which is duly remitted pursuant to the contractual terms.
Despite receipt of the agreed consideration and fulfilment of all conditions precedent by the foreign corporation, the Indian company fails to establish the promised offices in the cities agreed upon and does not take any substantive steps towards performance of its contractual obligations.
The nature of the contract is such that mere monetary compensation would not adequately remedy the loss suffered by the foreign corporation. This is because the objective of the agreement was the foreign corporation’s market entry and business presence in India. Therefore, the loss suffered cannot be sufficiently quantified in damages.
In this scenario, the foreign corporation may institute a suit to seek specific performance of the contract and request the court to direct the Indian company to perform its contractual obligations in accordance with the terms agreed upon in the contract rather than just awarding damages for contractual breach.
SRA provides for the specific performance of contracts under Sections 10 to 14A and Section 16. Let’s take a look at each section one by one :-
According to this Section, 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.
(1) Except as otherwise provided in this Act, specific performance of a 1 [contract shall], be enforced when the act agreed to be done is in the performance wholly or partly of a trust.
(2) A contract made by a trustee in excess of his powers or in breach of trust cannot be specifically enforced.
(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 the 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—
(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 in a case falling under clause (b) 2 [pays or has 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.
(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 be a 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 the 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—
(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 in a case falling under clause (b) 2 [pays or has 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
(1) Where a person contracts to sell or let certain immovable property having no title or only an imperfect title, the purchaser or lessee (subject to the other provisions of this Chapter), has the following rights, namely:—
(a) if the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest;
(b) where the concurrence of other person is necessary for validating the title, and they are bound to concur at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such concurrence, and when a conveyance by other persons is necessary to validate the title and they are bound to convey at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such conveyance;
(c) where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee;
(d) where the vendor or lessor sues for specific performance of the contract and the suit is dismissed on the ground of his want of title or imperfect title, the defendant has a right to a return of his deposit, if any, with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and costs on the interest, if any, of the vendor or lesser in the property which is the subject-matter of the contract.
(2) The provisions of sub-section (1) shall also apply, as far as may be, to contracts for the sale or hire of movable property.
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.
(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.
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
(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.
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 4 [must prove] performance of, or readiness and willingness to perform, the contract according to its true construction
The Specific Relief Act, 1963, provides remedies for enforcement of civil rights. One popular legal remedy under the Act is specific performance of a contract, under which the breaching party is obligated to fulfill what it originally promised to the non-breaching party. In the past, specific performance of a contract used to be a discretionary relief. However, since the 2018 amendment, it has become the general rule, subject to the statutory exceptions provided under the Act.
Also Read: Difference between Arbitration and Litigation
Disclaimer: This blog is meant for educational purposes only. While we have made every effort to provide our readers with accurate and complete information in this post, we cannot guarantee its accuracy or completeness. We encourage our readers to verify details via official and reliable sources. Information in this content should not be interpreted as professional, academic, business, financial or legal advice.
Ms. Kashish Kumar is a content writer with a background in legal studies and over five years of experience. She’s written extensively on legal topics and supported non-profits like PETA, CRY, and WWF. A passionate reader, she enjoys books and blogs alike.
Want to know More ?
