(..14 b..)

Table of Contents

SPECIFIC PERFORMANCE OF CONTRACT[1]

(Ss. 9 to 25)

QUESTION BANK

Q.1. Explain the various modes in which a contract is discharged.

Q.2. Explain the contract, which cannot be specifically enforced under Specific Relief Act.

Q.3. Who may obtain specific performance of a contract?

Q.4. Enumerate and explain the general principles relating to specific performance of contract. Which contract can be specifically performed? Which cannot be specifically enforced? What are the defences in a suit for specific performance?

Q.5. Discuss the circumstances wherein specific contract can be enforced. Enumerate the contract which cannot be specifically enforced. State what are the defences in suit for Specific performance of contract?

Q.6. Who are the persons for or against whom contracts may be specifically enforced?

Q.7. What are the contracts that can be and can not be specifically enforced?

Q.8. What do you understand by the term ‘specific performance of contract’?

Q.9. Who are the persons for or against whom specific performance can be ordered?

SHORT NOTES

Discretion powers of court in awarding specific performance.
Contracts that can not be specifically enforced.

SYNOPSIS

Introduction-
When specific performance of Contract enforceable (S. 10)-
A) According to S. 10 in following circumstances, it is in discretion of the court to enforce contract specifically. Viz,
Existence of no standard for ascertaining the actual damages.
Inadequacy of the pecuniary compensation.
a) Not ordinary article of commerce or available in market.
b) Where property is held as agent or trustee.
B) Some more contracts enforceable specifically are stated in S. 14(3).
When contract is to execute mortgage or furnish security.
When contract is to take and pay for any debentures of a company.
Formal deed of partnership.
Purchase of share of a partner.
Contract for construction of any building.

III. Which Contract cannot be specifically enforced (S. 14)-

Where Compensation is adequate.
Contracts involving personal skill.
Contracts of determinable nature.
Contracts requiring constant supervision.
Defenses for suits in respect of reliefs based on contract-
Under Contract Act-
Under S. 14 of the Specific Relief Act
Contract of trust beyond his powers (S. 11 (2))
Conduct of plaintiff himself (S. 16)
Defective title (S. 17)
Contract giving unfair advantage to plaintiff (S. 20)
Performance involving hardship (S. 20)
When it is inequitable to enforce contract
Who may/ may not obtain specific performance (S. 15)?
A) Persons who may obtain specific performance of contract
Any party to the contract-
Representative in interest-
A beneficiary under the contract-
The reminder –
A revisioner in possession –
A revisioner in reminder-
New company by amalgamation-
A company-
Persons who cannot obtain specific performance of contract (S. 16)-
Person not entitled to recover compensation for its breach-
Inability of person to perform his part of contract-
Person not ready and willing to perform his part of contract-
Discretion and powers of the Court (S. 20)-
A) Discretion of court (S. 20)-

1) When in its discretion court can refuse specific performance?

a) An unfair advantage to the plaintiff-
b) Performance involving hardship (S. 20)-
c) When it is inequitable to enforce contract-

2) When in its discretion court can enforce specific performance-

a) Substantial performance by one side-
b) Mutuality of remedy-
B) Powers of the court-
a) Power of the court to award compensation (S. 21)-
b) Power to grant relief for possession, petition etc.-
c) Liquidation of damages not a bar to specific performance (S. 23)-

I. Introduction:-

When the party to the contract makes a breach of the contract, two possible alternatives are available to the other party. Firstly, he may bring an action for the breach of contract (i.e. to sue for damages), or secondly, he may bring an action for specific performance of the contract. Specific performance of a contract means the actual execution of the contract as agreed between the parties. To claim the specific performance of a contract, the plaintiff has to prove the existence of a concluded contract. So, such specific performance of a contract is enforceable under S. 10.

10 and 11 provide that the specific performance of a contract is at the discretion of the Court, and no party can claim it as a right.

The court has one rule of presumption. According to this presumption, if the contract is made with respect to immovable property, the contract cannot be adequately relieved without its specific performance. But in the case of movable property, the specific performance of a contract is an exception and not a rule.

In Cuddee V/s Rutter

Facts:- There was an agreement to sell or purchase personal chattels.

The Court held that the agreement would not be specifically enforced because ‘damages” is the adequate remedy.

II. When is the specific performance of the Contract enforceable? (S. 10):-

A) According to S. 10, in the following circumstances, it is at the discretion of the court to enforce the contract specifically. Viz,:-

1) Existence of no standard for ascertaining the actual damages[2]:-

When there exists no standard for ascertaining actual damage caused by the non-performance of the act agreed to be done.

2) Inadequacy of the pecuniary compensation[3]:-

When the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief unless and until the contrary is proved.

In Cuddee V/s Rutter

Facts:- There was an agreement to sell or purchase personal chattels.

The Court held:- This agreement will not be specifically enforced because “damages” is the adequate remedy.

Explanation (i) and (ii) to S. 10:-

There is one rule of presumption by the court. According to this rule-

i) If the contract is made concerning immovable property, the contract cannot be adequately relieved (by compensation in monetary terms) without its specific performance. In other words, specific performance is the general rule in contract with respect to immovable property[4].
ii) But in the case of a movable property, the specific performance of the contract is an exception and not a rule. In other words, in contracts relating to movable property, the general rule is to pay compensation in the form of money and not enforce the contract specifically. But there are some exceptions to this general rule. In other words, the contract relating to movable property can be specifically enforced only in the following circumstances. Viz.-

a) Not ordinary article of commerce or not easily available in the market[5]:-

Where the movable property is not an ordinary article of commerce, is of special value or interest to the plaintiff, or consists of goods that are not easily available in the market.

Illustrations

1) A agrees to buy, and B agrees to sell a picture by a dead painter. A may compel B

specifically to perform this contract, for there is no standard for ascertaining the

actual damage, which would be caused by its non-performance.

2) A contracts with B to sell his house for Rs 10000. B is entitled to a decree directing

A to convey the house to B.

3) A contracts to sell and B contracts to buy a certain number of Railway shares of

a particular description. A refuses to complete the sale. B may compel A

specifically to perform this agreement because the shares are limited in numbers and have not always been in the market.

4) A contracts with B to paint a picture for B, who agrees to pay Rs. 1,000/—for it. The picture is painted. B is entitled to deliver and possess it.

b) Where property is held by an agent or trustee[6]:-

Where the defendant holds the property as an agent or trustee of the plaintiff.

B) Some more contracts enforceable specifically are stated in S. 14(3):-

They are as follows:-

i) When the contract is to execute a mortgage or furnish security[7]:-

Where the suit is for the enforcement of a contract to execute a mortgage or furnish any other security for the repayment of any loan the borrower is unwilling to repay at once. However, in such a suit, if any part of the loan is advanced, the lender should also be willing to advance the remaining part of the loan.

ii) When the contract is to take and pay for any debentures of a company[8]:-

Where the suit is for enforcing a contract to take and pay for any company debentures, the contract can be specifically enforced.

iii) Formal deed of partnership:-

A contract can be specifically performed, where the suit is made for the execution of a formal partnership deed, in cases where the parties have already started the partnership’s business.

iv) Purchase of share of a partner[9]:-

Where the suit is for the purchase of a share of a partner of a firm.

v) Contract for construction of any building:-

Where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on the land. Provided the following three conditions are fulfilled-

a) 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,
b) The Plaintiff has a substantial interest in the performance of the contract, and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief and
c) in pursuance of the contract, the defendant has 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.

Mayor of Wolverhampton V/s Emmons[10]

Facts:- In this case, the plaintiffs, an urban sanitary authority, in pursuance of a scheme of street improvement, sold and conveyed to the defendant a plot of land attached to the street, the defendant covenanting with them that he would erect buildings thereon within a certain time. The covenant did not precisely specify the nature of the buildings to be erected, but subsequently, in consideration of the plaintiff’s giving the defendant further time to perform his obligation to erect buildings, he agreed to erect on the land eight houses in accordance with certain plans submitted by him to and approved by the plaintiffs, which definitely showed the nature and particulars of the houses to be erected. The defendant failed to perform this last-mentioned agreement, and the plaintiffs brought an action against him, claiming specific performance.

The Court held that the case came within the class of cases recognised by the courts as forming an exception to the general rule that the specific performance of a building contract should not be ordered. In this case, an order ought to be made against the defendant for the specific performance of his contract to build houses in accordance with the plans submitted.

III. Which Contract cannot be specifically enforced? (S. 14):-

14 of the Specific Relief Act contains provisions regarding contracts which cannot be specifically enforced. Viz.-

1) Where Compensation is adequate[11]:-

The court will not order specific performance of a contract where the aggrieved party can be adequately compensated in money. The underlying principle for the provision is that specific performance is an equitable remedy; it should not be available when an action by way of damages for the breach of contract can afford adequate relief.

Illustration

A contract to sell, and B contracts to buy 40 chests of indigo at Rs. 1000 per chest:

Considering certain property being transferred by A to B, B contracts to open a credit in A’s favour to the extent of Rs. 10,000 and to honour A’s drafts to that amount.

The above contracts cannot be specifically enforced, for in the first and the second, both A and B and in the third, A would be reimbursed by monetary compensation.

2) Contracts involving personal skill[12]:-

It is not possible for the court to supervise the performance of a contract which runs into a minute and numerous details or is dependent upon the personal qualifications of the promisor. Contracts of employment, contracts of personal service, contracts involving the performance of artistic skill, contracts to sing etc., cannot be enforceable specifically due to their very nature.

Illustrations

A contract to render personal service to B:-

an author contracts with B, a publisher, to complete a literary work.

B cannot enforce the specific performance of these contracts.

A contract with B that, in consideration of Rs 1,000/- to be paid to him by B, will paint a picture for B;

A contract with B to execute certain works which the Court cannot superintend;

A contract to supply B with all the goods of a certain class which B may require;

A contract to marry B.

The above contracts cannot be specifically enforced2.

3) Contracts of determinable nature[13]:-

Specific performance is not ordered of a contract, which is in its nature determinable. A contract is said to be determinable when the party to the contract can put it to an end at any time. The rational is that there is no use in enforcing a contract, which can be lawfully put to an end immediately after the decree for specific performance, is passed.

Illustration

A and B contracts to become partners in a certain business, the contract not specifying the duration of the proposed partnership. This contract cannot be specifically performed, for, if it were so performed, either A or B might at once dissolve the partnership.

4) Contract to require constant supervision[14]:-

A contract cannot be specifically enforced where it involves the performance of a continuous duty, which the court cannot supervise. The sole test under this clause is whether the contract is such that the court cannot supervise its performance in as much as it involves the performance of continuous duty.

Illustration

A contract to let for twenty-one years to B the right to use such part of a certain railway made by A as was upon B’s land, and that B should have a right of running carriages over the whole line on certain terms and might require A to supply the necessary engine-power, and that A should during the term keep the whole railway in good repair. Specific performance of this contract must be refused to B because it requires.

IV. Defenses for suits in respect of reliefs based on a contract:-

Following defences are available against suit for specific performance of a contract. Viz.

1) Under Contract Act:-

9 of the Specific Relief Act provides that those defences available under the Contract Act are also available to the defendant against the claim of the Specific Relief Act also. Under the law of Contract, several defences are available to a person when he is sued in a court of law, for instance, lack of capacity, absence of consideration or free consent, mutual mistake of fact, etc.

2) Under S. 14 of the Specific Relief Act:-

14 also lays down four defences available against the claim of specific performance of a contract. Those defences are discussed above in detail under the heading “contracts which cannot be specifically enforced”.

3) Contract of a trustee beyond his powers (S. 11 (2)):-

If a contract is made by a trustee in excess of his powers or in breach of trust, such contracts cannot be specifically enforced.

Illustrations

(i) A holds certain stock in trust for B. A wrongfully disposes of the stock. Relief Act, 1877. The relevant illustrations of that Act may be reproduced:

The law creates an obligation on A to restore the same quantity of stock to B, and B may enforce specific performance of this obligation.

ii) A is a trustee of land with the power to lease it for seven years. He enters into a contract with B to grant a lease of the land for seven years, with a covenant to renew the lease at the expiry of the term. This contract cannot be specifically enforced[15].

4) Conduct of the plaintiff himself (S. 16):-

The conduct of the plaintiff is such as to disentitle him from relief[16].

5) Defective title[17] (S. 17):-

Where the plaintiff cannot give a title free from reasonable doubt.

6) Contract giving an unfair advantage to the plaintiff[18] (S. 20):-

The contract, though not voidable when made, gives the plaintiff an unfair advantage over the defendant.

Illustration

A contract to sell and B contract to buy certain land. To protect the land from floods, its owner must maintain an expensive embankment. B does not know these circumstances, and A conceals it from him; specific performance of the contract should be refused to A.

7) Performance involving hardship[19] (S. 20):-

The performance of a contract would involve hardship on the defendant, which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff[20].

Illustration

A is entitled to some land under his father’s will on condition that if he sells it within twenty-five years, half the purchase money shall go to B. A, forgetting the condition, contracts, before the expiration of twenty-five years, to sell the land to C. Here, the enforcement of the contract would operate so harshly on A that the Court would not compel its performance in favour of C.

8) When it is inequitable to enforce a contract[21]:-

The court may refuse specific performance where the defendant entered into the contract under the circumstances, which makes it inequitable to enforce specific performance, even though the contract is not rendered Voidable.

In K. Narendra V/s Riviera Apartments (P) Ltd[22]

Facts:- there was a contract for the sale of land. Although no time limit had been fixed for the performance of the contract from the intention of the parties, it appeared that the performance had to be made within a reasonable time, say, within 2 to 3 years from the plans being sanctioned. The purchasers failed to perform their obligations within a reasonable time. There was a hike in the prices of land. Moreover, part of the property became inalienable, and it was either acquired by the State or became inalienable because of the Urban Land Ceiling Regulation Act.

The Court Held:- that the discretionary power of the court to grant specific performance conferred under S. 20 ought not to be exercised in favour of the purchasers of land.

The Court further observed, “Since specific performance is an equitable remedy, Plaintiff should come with clean hands before the court”.

V] Who may/ may not obtain specific performance? (S. 15):-

A) Persons who may obtain specific performance of a contract:-

According to S. 15, specific performance of a contract may be obtained by the following persons-

1) Any party to the contract:-

Any party to the contract may obtain specific performance of the contract. The general rule in the contract is that only parties to the contract can enforce the contract and not a stranger (privity of contract). When some of the plaintiffs who were parties to the contract die, and nobody is brought on record in their place (i.e. legal heirs), the suit is liable to be dismissed.

Shyam Singh V/s Daryao Singh[23]

Supreme Court held- that the expression ‘any party thereto’ or ‘their representative in interest’ includes transferees and assignees from the contracting party in whose favour the right exists.

2) Representative in interest[24]:-

A representative in interest may also obtain specific performance of a contract. Representative in interest includes any assignee or transferee of interest or a legal representative, viz, executor or administrator after the death of the principal.

A legal representative may sue provided that the contract is not dependent on the promisee’s personal skill or quality, e.g., a contract to paint a picture, a contract to write a book, etc.

3) A beneficiary under the contract[25]:-

A beneficiary under the contract may obtain specific performance of the contract where the contract is a settlement of marriage or compromise of doubtful rights between the members of the same family. It is the exception to the general rule that parties to the contract only can sue.

In Khwaja Muhammad Khan V/s Husaini Begum[26]

Facts:- There was an agreement between the fathers of a boy and a girl that if the girl (plaintiff in this case) married a particular boy, the boy’s father (defendant in this case) would pay a certain personal allowance known as Kharchi-i-pardon (beetle-box expenses) to the plaintiff. It was also mentioned that a certain property had been set aside by the defendant, and this allowance would be paid but of the income of that property. The plaintiff married the defendant’s son, but the defendant failed to pay the allowance agreed to by him. In action by the plaintiff to claim this allowance, the defendant contended that his contract to pay the allowance had been made only with the plaintiff’s father and not with the plaintiff, being a stranger to the contract, cannot sue.

Privy Council Held:- that the contract is enforceable.

4) The Reminder man:-

Where a tenant enters into the contract for life in due course of power, the remainder man[27] (the person who gets the right under the contract with the tenant) can specifically enforce the contract.

5) A Revisionar[28] in Possession:-

A revisionar in possession may require specific performance, where the agreement is a covenant entered into with his predecessor-in-title, and the revisioner is entitled to the benefit of such covenant.

A revisioner is a person who may claim the reversion (return of property or right) either as the grantor when the lessor’s estate granted has terminated or as the successor of such grantor[29].

6) A Revision in Reminder[30]–

A revision in reminder may specifically enforce the contract, where the agreement is such covenant and the revision is entitled to the benefit thereof and will sustain material injury by reason of its breach.

7) New company by amalgamation[31]:-

When a company enters into a contract and subsequently merges with another company, the new company that arises out of the merger can specifically enforce the contract.

8) A Company:-

When promoters of the company have, before its incorporation, entered into a contract for the benefit of the company, and the terms of the incorporation warrant such contract, the company may specifically enforce the contract, provided that the company has accepted the contract and has communicated such acceptance to the other party of the contract.

Persons against whom Specific Performance may be Enforced[32]:-

B) Persons who cannot obtain specific performance of a contract (S. 16):-

Specific performance of a contract cannot be enforced in favour of the following persons.

1) Person not entitled to recover compensation for its Breach:-

A person, by his conduct, has disabled himself from claiming compensation for the breach of the contract, and cannot claim the remedy of specific performance.

In Chandra V/s Banomali[33]

Facts:- A and B entered into a compromise by which A executed an ekrarnama (agreement) acknowledging B’s title as the adopted son of G and B executed the agreement to grant a permanent ijara in respect of certain lands. A filed a suit seeking to set aside the adoption, alleging that the ekrarnama was obtained by B from him by using fraud. He failed in that suit, and his heirs brought the suit for the enforcement of B’s agreement.

Privy Council Held:- that the conduct of A was at variance with and amounted to the subversion of the relation intended to be established by the compromise. As such, the suit for specific performance of the contract does not lie in such circumstances.

2) Inability of the person to perform his part of the contract[34]:-

The person who cannot perform his part of the contract cannot succeed in a suit for a specific performance. The person who has become incapable of performing or violates any essential terms of the contract, or his part remains to be performed, or acts fraudulently with the contract (agreement), or willfully acts at variance with, or in the subversion of, the relation intended to be established by the contract, is not entitled to enforcement of the same.

3) Person not ready and willing to perform his part of the contract[35]:-

In a suit for the specific performance of a contract, the plaintiff should establish the existence of a concluded contract between himself and the defendant. Moreover, he should prove that he was ready and willing to perform his part of the contract from the date of agreement till the date of hearing of the suit. His failure at any point of time to show his readiness and willingness disentitles him to claim specific performance.

Badru Nisha V/s Yogendraprasad Sinha[36]

Supreme Court observed:– that Plaintiff should be ready and willing to perform his part (obligation) of the contract agreed[37].

VI. DISCRETION AND POWERS OF THE COURT (S. 20)-

A) Discretion of Court (S. 20):-

The jurisdiction to decree specific performance is discretionary. Merely because it is lawful to decree specific performance, the court is not bound to grant the relief. However, discretion cannot be exercised arbitrarily; it must be sound and reasonably guided by judicial principles which an appellate court can correct.

1) When in its discretion court can refuse specific performance?-

In the following circumstances, the court may properly exercise discretion not to grant specific performance.

a) An Unfair Advantage to the Plaintiff[38]:-

The court may refuse specific performance where a contract gives an unfair advantage to the plaintiff over the defendant. The unfairness of the contract may appear from the terms of the contract, from the conduct of the parties at the time of entering into a contract, or other surrounding circumstances. It is not necessary that the contract should be Voidable.

In Pandian Chemicals Ltd. V. Purnitharalli

(AIR 2017 Mad. 198)

The Court held:- The plaintiff getting an unfair advantage over the defendant is not entitled to a specific contract13.

b) Performance involving Hardship[39] (S. 20):-

Specific performance is refused if the performance of a contract involves hardship on the defendant, which he did not foresee, whereas its non-performance would involve such hardship on the plaintiff.

Illustration

A is entitled to some land under his father’s will on condition that if he sells it within twenty-five years, half the purchase money shall go to B. A, forgetting the condition, contracts, before the expiration of twenty-five years, to sell the land to C. Here the enforcement of the contract would operate so harshly on A that the Court will not compel its performance in favour of C[40].

c) When it is inequitable to Enforce a Contract[41]:-

Since specific performance is an equitable remedy, Plaintiff should come with clean hands before the court.

2) When at its discretion court can enforce specific performance:-

Sub- Sections (3) and (4) of S. 20 provide that the specific performance can be ordered by the court in the following circumstances. Viz.

a) Substantial performance by one side[42]:-

If the Plaintiff has substantially performed his part or has suffered losses consequent to the contract, if the contract is capable of specific performance, the discretion is to be properly exercised by the court to decree specific performance.

Illustration

A sells land to a railway company, which contracts to execute certain works for his convenience. The company took the land and used it for its railway. Specific performance of the contract to execute the works should be decreed in favour of A.

b) Even though the other party is incapable of enforcing the contract[43]:-

The court shall not refuse any party-specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party. Thus, even though the minor is not competent to enter into a contract, he can very well get a contract specifically enforced in his favour[44].

B. Powers of the Court:-

a) Power of the court to award compensation (S. 21):–

In a suit for specific performance, the Plaintiff may claim compensation for its breach either in addition to or in substitution for the specific performance of the contract. If the Court decides that the specific performance should be granted, but it is not sufficient to satisfy the justice of the case and some compensation for the breach of contract should also be made to the Plaintiff, it shall be guided by the principles specified in S. 73 of the Indian Contract Act, 1872. No compensation shall be awarded unless Plaintiff has claimed it in his plaint. If the Plaintiff has not claimed it in the plaint, the Court shall at any stage of the proceeding allow him to amend the point on such terms as may be just for including a claim for compensation. If the contract has, under the circumstances, become incapable of performance, it does not preclude the court from allowing compensation[45].

b) Power to grant Relief for Possession, Partition etc.:-

Any person suing for specific performance for the transfer of immovable property may, in appropriate case,s ask for certain additional relief viz. possession or partition and separate possession. Such additional relief can be claimed in a suit for a specific performance with a view to avoiding a multiplicity of suits.

c) Liquidation of damages[46] , not a bar to Specific Performance (S. 23):-

Where the parties to the contract have fixed the amount of compensation, which would be payable in the event of default, shall not constitute any bar to the relief of specific performance.

NOTE

SPECIFIC PERFORMANCE OF PART OF A CONTRACT (S. 12)

QUESTION BANK

Q.1. When Court can grant specific performance of a part of contract?

SHORT NOTES

Specific performance of part of contract

SYNOPSIS

Court shall not direct specific performance of part (S. 12 (1)).
Exceptions (S. 12 (2), (3) and (4))-

1) When part of contract is capable to be performed.

2) When part remaining unperformed is small in value.

3) On application of other party.

I. Court shall not direct specific performance of part (S. 12 (1)):-

12 (1) contains the general rule as to the specific performance of a part. It provides that the Court shall not direct the specific performance of a part of a contract except in cases provided under Cl. (3) and (4) of S. 12.

II. Exceptions (S. 12 (2), (3) and (4)):–

1) When part of a Contract is Capable of being performed:–

When the part of a contract, which can be specifically performed stands on a separate and independent footing from another part of the same contract which cannot be specifically performed; the Court is empowered to direct the specific performance of the former part, which is capable of being specifically performed.

2) When the part remaining unperformed is small in Value:-

Where a party to the contract is unable to perform the whole of his part of the contract, but the part which must be left unperformed bears 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 for the remaining part.

Illustration

‘A’ contracts to sell to B a piece of land consisting of 100 Acres of land. It turns out that out of 100 Acres, two Acres belong to a stranger who refuses to part with them. The two Acres are not necessary for the use or enjoyment of the 98 Acres, nor so important that the loss of that may not be made good in money. A may be directed at the suit of B to convey to B 98 Acres and to compensate him for the loss of two Acres, or B may be directed at the suit of A to pay to A on receiving the conveyance and possession of the land, the stipulated purchase money, a sum awarded as compensation for deficiency.

3) On an application of the plaintiff and his readiness to relinquish the remaining clam[47]:-

Where a party to a contract is unable to perform the whole of his part of the contract and the part which must be left unperformed forms a considerable portion of the whole or does not admit of compensation in money, he is not entitled to obtain a decree of 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, provided that the plaintiff relinquishes all claim to further performance and the right to compensation either for the deficiency or for the loss or damage sustained by him, due to the default of the defendant.

Illustration

Thus, if in the above illustration, the portion belonging to the stranger is 98 Acres and only 2 Acres belong to A, B cannot obtain a decree against A for the specific performance of the contract, but if B still files suit for specific performance and shows his readiness to relinquish 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, he is entitled to a decree directing A to convey those 2 Acres to him.

*****

[1] करारात ठरल्याप्रमाणे कराराची पूर्तता करणे. [सहमति के अनुसार करार का प्रवर्तन]

[2] प्रत्यक्ष नुकसाणभरपाई मोजण्याचे योग्य ते साधन नसेल तर [वास्तविक नुकसान का पता लगाने के लिए कोई मानक नहीं होना]

[3] अथिक स्वरुपात नुकसाणभरपाई अपूर्ण होत असल्यास [आर्थिक मुआवजे की अपर्याप्तता]

[4] ठरल्याप्रमाणे कराराची अंमलबजावणी हा अचल संपत्ती बद्दलचा नियम आहे अचल [संपत्ति के संबंध में करारमें विशिष्ट पालन सामान्य नियम है|]

[5] व्यवसायातील ती वस्तू सर्वसाधरण नसलेस अथवा सहजपणे बाजारात उपलब्ध नसलेस [वाणिज्य की सामान्य वस्तु नहीं या बाजार में आसानी से उपलब्ध नहीं है|]

[6] जेव्हामिळकत एजंट अथवा विशवस्थ म्हणून ताब्यात असेल [जहां संपत्ति किसी एजेंट या ट्रस्टी के पास हो]

[7] गहाण अथवा तारण देणायासंबंधी करार [जब करार गिरवी छुडवाने के लिये या सुरक्षा प्रस्तुत करने के लिया है ]

[8] एखाद्या कंपनीचे कर्ज रोखे घेणे अथवा देण्यासंबंधी करार [जाब करार किसी कंपनी के ऋणपत्र लेणे या देणे के बारेमे होता है|]

[9] भागीदारीचा भाग विकत घेण्यसंबधीचा करार [पार्टनर के शेयर की खरीद]

[10] (1990) 1 Q.B. 515. Romer, LI. observed that there was no doubt that as a general rule the court will not enforce specific performance of a building contract, but an exception from the rule has been recognised.

[11] जेव्हा भरपाई योग्य रक्कमेत दिली जाऊ शकते [जहां मुआवजा पर्याप्त होता है]

[12] ज्या करारात व्य्क्तीगत नैपुणय अवशयक असते असते असा करार [व्यक्तिगत कौशल से जुड़े करार]

2 By a charter, party entered into in Calcutta between A, the owner of a ship, and B, the charterer, it is agreed that the ship shall proceed to Rangoon, and there load a cargo of rice, and thence proceed to London, freight to be paid, one-third on arrival at Rangoon and two-thirds on delivery of the cargo in London;

A lets land to B and B contracts to cultivate it in a particular manner for three years next after the date of the lease;

A and B contract that, in consideration of annual advances to be made by A, B will, for three years next after the date of the contract, grow particular crops on the land in his possession and deliver them to A when cut and ready for delivery;

A contracts to buy B’s business at the amount of a valuation to be made by two valuers, one to be named by A and the other by B. A and B each name a valuer, but before the valuation is made, A instructs his valuer not to proceed;

A contracts with B to take from B a lease of a certain house for a specified term, at a specified rent, “if the drawing-room is handsomely decorated”, even if it is Held to have so much certainty that compensation can be recovered for its breach;

[13] करार जे कधीही संपुष्टात आणता येतात [जब करार का पक्ष इसे किसी भी समय समाप्त कर सकता है]

[14] सतत देखरेख आवश्यक असलेला करार [निरंतर पर्यवेक्षण की आवश्यकता वाला करार]

[15] iii) The directors of a company have power to sell the concern with the sanction of a general meeting of the shareholders. They contract to sell it without any such sanction. This contract cannot be specifically enforced.

iv) Two trustees, A and B, empowered to sell trust property worth a lakh of rupees, contract to sell it to C for Rs. 30,000. The contract is so disadvantageous as to be a breach of trust. C cannot enforce its specific performance.

[16] Surygandhi V. Lourduswamy (AIR 2004 Mad. 8).

Facts- According to the sale agreement in the instant case the defendant vendor (Seller) was to execute sale deed within six months from date of agreement or receipt of balance consideration from the vendee (purchaser). The balance consideration was not paid by the plaintiff within 6 months and therefore sale deed was not executed. The plaintiff sent a notice to defendant after a lapse of about 9 years, stating that he was ready and willing to perform his part of the contract and asking the defendant to execute the sale deed.

Held- that even though time was not the essence of the contract it could not be said that the plaintiff has acted reasonably. Nine years and odd is not a reasonable time at all by all standards and the plaintiff has to blame himself in keeping quiet for nine years. Hence the suit is not maintainable.

[17] बाधित मालकी हक्क [दोषपूर्ण शीर्षक]

[18] करार जो वादीस गैरफायदा घेवू देतो [वादी को अनुचित लाभ देने वाला]

[19] करार का पालन जिसमें कठिनाई शामिल है|

[20] (2) A and B, trustees, join their beneficiary, C, in a contract to sell the trust estate to D, and personally agree to exonerate the estate from heavy encumbrances to which it is subject. The purchase-money is not merely enough to discharge those encumbrances, though, at the date of the contract, the vendors believed it to be sufficient. Specific performance of the contract should be refused to D.

(3) A, the owner of an estate, contracts to sell it to B, and stipulates that he, A, shall not be obliged to define its boundary. The estate really comprises a valuable property, not known to either to be part of it. Specific performance of the contract should be refused to B unless he waives his claim to the unknown property.

[21] जब करार को लागू करना असमानता है|

[22] AIR 1999 SC 2309.

[23] (AIR 2004 SC 348)

[24] ज्याच्या हितसाठी करार आहे असे प्रतिनिधी [हित में प्रतिनिधि]

[25] करार के तहत एक लाभार्थी

[26] ILR (1910) 32 All 410.

[27] उपभोग घेण्यासाठी ह्यात असलेली व्यक्ती [शेष राहे का उपभोग लेनेवाला आदमी] E.g. If after partition one of the brothers dies without issue and the wife, the property will be available for distribution among brothers, by this way brothers are reminder man.

[28] परतावा मिळणारा व्य्क्ती [पुनरीक्षणकर्ता] @ E.g. after death of Hindu woman without issue her estate reverts back to the root from where it had come i.e. in case she had received some property from her parents the property will revert back to her parents or their heirs, in case she had received property from her husband the property will revert to the husbands relatives i.e. father or brothers.

[29] In Habiba Khatoon v. Ubaidul Haq (AIR 1997 SC 3236).

Facts- A house was sold on the condition that the purchaser will reconvey (retransfer or resell) the property to the seller Habiba Khatoon, or her son on the death of the seller, within a period of three years, on the return of the same consideration on which the house was sold, if the seller i.e. Habiba Khatoon (Predecessor in title) desired or on the desire of the son (a revisioner) of the seller (i.e. Habiba) on her death. The son assigned his right to repurchase the house to the plaintiff.

Held- that the son could validly assign his right to repurchase the house.

[30] पर्ताव्यातील शिल्लक व्यक्ती E.g. If child less widow dies and she had received property from her parents who have serving only one son (i.e. brother of the deceased) he alone would inherit the property as reminder man in reversion.

[31] कंपनी एकत्रीकरणातून तयार झालेली नवी कंपनी

[32] S. 19. Persons against whom specific performance may be enforced.

(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;

(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.

[33] ILR 31 Cal 584 (PC).

[34] जो व्य्क्ती स्वत;चे वतीने करार पूर्ण करण्यास तयार नसतो [करारा का हिस्सा पूर्ण करणे मे व्यक्ति की असमर्थता]

[35] असा व्य्क्ती जो स्वत;चे वतीने करार पूर्ण करण्यास तयार नसता [व्यक्ति अनुबंध के अपने हिस्से को पूरा करने के लिए तैयार और इच्छुक नहीं है]

[36] (AIR 2006 Pat. 71) In Sandhyarani v. Sudhrani AIR 1978 SC 537.

Supreme Court observed– that “to prove himself to be ready and willing to perform his part of contract, a purchaser has not necessarily to produce the money or to vouch the concluded scheme for financing the transition. The question is one of the fact”

[37] The distinction between readiness and willingness was explained at length by Mithal J, of Allahabad High Court in Bijai Bahadur V Shrishiv Kumar, (AIR 1985 All 223) Observing that “ Readiness and willingness are sometimes treated as synonymous, but there is a clear cut distinction between the two. “Willingness” is merely a mental process, while “Readiness” has something to do with translating that will into action and is preceded by necessary preparation for being in a position to be ready. In short readiness must be said to be the total equipment of a person who is willing to do a thing before he actually does it”.

[38] वादीला गैरफायदा मिळत असल्यास, वादीला गैरफायदा [वादी को अनुचित लाभ होता हो तो]

13 (I) A, a tenant for life of certain property, assigns his interest therein to B. C contracts to buy, and B contracts to sell, that interest. Before the contract is completed, A receives a mortal injury from the effects of which he dies the day after the contract is executed. If B and C were equally ignorant or equally aware of the fact, B is entitled to specific performance of the contract. If B knew the fact, and C did not, specific performance of the contract should be refused to B.

(2) A contracts to sell to B the interest of C in certain stock-in-trade. It is stipulated that the sale shall stand good, even though it should turn out that C’s interest is worth nothing. In fact, the value of C’s interest depends on the result of certain partnership accounts, on which he is heavily in debt to his partners. This indebtedness is known to A, but not to B. Specific performance of the contract should be refused to A.

(3) A contracts to sell, and B contracts to buy, certain land. To protect the land from floods, it is necessary for its owner to maintain an expensive embankment. B does not know these circumstances, and A conceals it from him. Specific performance of the contract should be refused to A.

(4) A’s property is put up to auction. B requests C, A’s attorney, to bid for him. C does this inadvertently and in good faith. The persons present, seeing the vendor’s attorney bidding, think that he is a mere puffer and cease to compete. The lot is knocked down to B at a low price. Specific performance of the contract should be refused to B.

[39] वादीला गैरफायदा मिळत असल्यास,

[40] (2) A and B, trustees, join their beneficiary, C, in a contract to sell the trust estate to D, and personally agree to exonerate the estate from heavy encumbrances to which it is subject. The purchase-money is not merely enough to discharge those encumbrances, though, at the date of the contract, the vendors believed it to be sufficient. Specific performance of the contract should be refused to D.

[41] कारार की ज्याची पूर्तता अत्यंत कठीण होते, [जब किसी अनुबंध को लागू करना असमान है]

[42] एका पक्षाने त्यांचे करारा प्रमाणे असणारे कर्तव्य पूर्ण केल्यास [एक पक्ष ने उसके हिस्से का काफी हद तक कार्य पुरा किया तो]

[43] समोरील पक्ष पूर्व पक्षाकडून कराराची विशिष्ठ प्रकारे पूर्तता करून मागू शकत नसेल तरिहि पूर्व पक्ष ती मागू शकतो उद. अज्ञान व्यक्ती विरुद्ध समोरील पक्ष जरी कराराची विशिष्ठ प्रकारे पूर्तता करून मागू शकत नसेल तरी अज्ञान व्यक्ती ही समोरच्या व्यक्तीकडून मागू शकतो [भले ही दूसरा पक्ष करार को लागू करने में असमर्थ हो]

[44] Srikakulam Subramanyam v. Kurra Subha Rao (AIR 1948) PC 95.

[45] In Smt, Jamila Khatoon v. Ram Niwas Gupta, (AIR 1998 All 138).

Facts-There was an agreement for the sale of a property between the plaintiff as a purchaser and the defendant as a seller. The plaintiff in a suit for specific performance prayed for alternatively refund of earnest money together with damages. The plaintiff did not file the suit promptly even though it was filed within the limitation period.

Court Held- that since there was inordinate delay in presentation of the suit without giving proper explanation for filing the suit after a long lapse of time, to decree the suit for specific performance of contract was not justified. But a refund of the earnest money with interest @ 9% p.a. from the date of prosecution of suit together with damages of Rs. 5,000/- as alternative relief was granted.

[46] जेथे करारातील पक्षांनी नुकसान भरपाईची रक्कम पूर्वीच निश्चित केली आहे, जी चूक झाल्यास देय असेल,[ जहां, करार के पक्षकारों ने मुआवजे की राशि पाहिलेही तय कर दी है, जो कि चूक की स्थिति में देय होगी।

[47] वादी के आवेदन पर और शेष दावे को त्यागने की उसकी तत्परता पर