SPECIFIC PERFORMANCE OF CONTRACT

“Where there is a right, there is a remedy” In order to provide relief in cases relating to breach of contracts and in the cases relating to law of torts Specific Relief Act, 1877 was enacted which was later amended and a new act namely Specific Relief Act, 1963 was enacted by the parliament.

The need for this legislation was to provide adequate relief for the breach of contracts as there may be situations where providing compensation does not provide adequate relief, in such cases there is a need for the specific performance of contracts which are not covered in the legislation of The Contract Act, 1872 and hence, a specific legislation was required for the same. Specific Relief Act, 1963 came into force on 1 March, 1964. This act provides relief only in cases of enforcement of individual civil rights and not in the cases of enforcement of penal law.

Chapter 2 of the part 2 of Specific Relief Act, 1963 consists of the provisions relating to specific performance of contracts. Contracts can be divided into two categories.

First is the category of those contracts that can be specifically enforced and the second category consists of those contracts which cannot be specifically enforced. Section 10 of the Specific Relief Act, 1963 specifies the situations when the contracts can be specifically enforced. Firstly, when there is no standard to ascertain the actual damage caused to the party by non performance of contract and Secondly, when the act agreed to be done during the making of contracts is such that compensation cannot be considered as an adequate relief for the breach of contract.

The following section can be illustrated: where the buyer of a rare Chinese vase can compel the seller of the same to specifically perform the contract as there is no such standard to ascertain the actual damage in case of breach of the contract.

Section 10 extends to the fact that until and unless the contrary is proved the court shall presume that compensation of money cannot be considered as an adequate relief in case of breach of contract.

In a leading case of Damacherla Anjaneyulu and Anr. Vs. Damcherla Venkata Seshaiah The plaintiff had entered into a contract with the defendant for purchase of a land, on the breach of the following plaintiff filed a suit against the defendant in the High Court. The defendant pleaded that in the meantime he had built some costly structures on land and hence it would not be possible to specifically perform the contract, in this context the High Court held that the defendant is required to specifically perform the contract.

An appeal by the defendant in the Supreme Court held that since godowns and costly structures were built by the defendant and hence it would be difficult for him to specifically perform the contract and therefore the court of appeal held that compensation would be granted to the plaintiff for the loss caused to him by the non performance.

Section 11 of the act provides that in case of contracts where the performance is wholly or partially based on trust the specific performance of contract may depend on the discretion of court

Section 14 provides for situations where a contract cannot be specifically enforced. Situations where compensation of money is an adequate relief for breach of contract.

In cases where a contract is based on minute details where the performance is dependent on the qualifications of the parties in such cases the contract is not in a state to be specifically enforced.

In cases where the nature of the contract is determinable.

In cases where the contract requires the performance of some continuous duty of the parties where the courts cannot supervise.

Where in case of breach of contract compensation of money is an adequate relief is the contract cannot be specifically enforced: In Pench Area parasia vs. Barkan, an agreement was made where there was a provision for employment of four persons, the respondent alleged that only three persons were provided with employment and hence violated the agreement.

The Supreme Court held in this case that specific enforcement of the contract cannot be provided.

In the cases where the contract is based on minute details which is dependent on qualifications of the parties, in such cases the contract is not in a state to be specifically enforced. In a case Kayastha pathshala Allahabad vs. Rajendra Prasad, A teacher signed an agreement for practicing 25 years and teacher worked for only one or two years in this case Supreme Court held that specific performance of the contract is not possible in this case, as it is based on qualification of the parties and compensation of money will be an adequate relief.

In the cases where nature of contract is determinable, Situation where A has entered into a contract with B for a business not specifying the duration in this case the contract cannot be enforced for specific performance, for it may be dissolved by the parties.

In cases where contract is based on performance of continuous duty where supervision of court is not possible An illustration for such situation is A and B entered into a contract where A has lent certain parts of railway to B for 21 years and A was required to supply power and good repair to B , in this case a continuous duty of parties are required and hence specific performance of contract cannot be made as continuous supervision of the court in such cases is not possible.

According to the rule the granting of the decree in cases of specific performance of contract depend on the discretion of courts, it may be noted that while exercising its discretion the court must depend on the facts and circumstances of the case. Specific performance cannot be claimed as a right neither the court is compelled to grant the decree for enforcement of specific performance. Section 20 of The Specific Relief Act, 1963 provides that the jurisdiction in the cases related to the specific performance lies in discretion of courts and the court is not compelled to make the grant just for the mere fact that it is legal to do so, the discretion is required to be reasonable and the court of appeal shall have the capacity to make correction in the same.

Section 20 also specifies the situation where the court can exercise discretion not to specific performance.

Where the terms of the contracts are such that it gives the plaintiff an unfair advantage over the defendant.

Where the performance of contract will cause hardship to the defendant which he was not able to foresee and on non performance of which does not cause any hardship to the plaintiff.

Where the circumstances of the contract makes it inequitable to enforce specific performance.



This article is written by Shreya khare of Career College of Law.

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