Specific Performance of Contract

SUBMITTED BY: - SUPERVISED BY: -

AVREET SINGH KHANGURA DR. RISHAM GARG

NATIONAL LAW UNIVERSITY, DELHI

Acknowledgements
I need to snatch this splendid opportunity to express my most bewildering gratefulness and
regards to Dr. Risham Garg for giving me such an interesting and testing wander. It would have
been really troublesome for me to complete this wander without her offer help. Her able bearing
and aggregation of our Study Material have been of huge help to me in my exploration venture.
I may moreover need to thank my folks, cohorts and roommates Ayush and Garvit who gave
me huge recommendations for solidifying in this assignment venture. Since my project
included regular visits to the library, I would moreover need to thank the entire library staff
and IT staff for each one of the solaces they have given me. Last however not the minimum, I
need to thank the god-like for keeping me in the best of my wellbeing and capacities to have
the capacity to finish this wander.
 SYPOSIS
Introduction

The Law of Specific Relief in India was initially arranged by Specific Relief Act, 1877. The
arrangement of this institution was considered by the Law Commission in its Ninth Report
which was later supplanted by the present demonstration of 1963. Specific performance of
contract is explained in Chapter II of Part II of Specific Relief Act, 1963. In this, the court
orders a party to act in a way which has been stated in a contract. It is used as an alternative to
awarding of damages.

The Specific Relief Act, 1963 manages the cures conceded at the caution of the court for the
requirement of individual social equality. If there should be an occurrence of break of contract,
the general cure accessible to the distressed party is remuneration or harms of misfortune
endured. For this, a common suit is recorded against the blameworthy party who had made the
default in execution of its obligation or commitment according to the terms of contract under
the statutory arrangement of Section 73-75 of Indian Contract Act 1872. Nonetheless, now and
then financial pay does not fulfill the offended party so he may request particular help.

For instance on the off chance that someone unlawfully seize a man without his assent having
serene ownership over the property then particular relief may empower him to have the
ownership of same property as opposed to guaranteeing monetary pay.

Literature Review

Specific performance of contract is explained in section 10 of Specific Relief Act, 1963. It was
required because all damages could not be ascertained in monetary terms so some of them
require specific performance. This law enforces the party to act in a way in which it had
promised to act and due to some reasons it was not able to fulfil the promise. In section 14 there
are contracts which cannot be specifically performed but in this section further there is section
14(3) which is an exception of contracts which cannot be specifically performed. Specific
performance implies authorization of correct terms of the agreement. Under it the offended
party claims for the particular thing of which he is entitled according to the terms of agreement.
For instance, if A consents to pitch certain offers to B of a particular organization which are
constrained in number and after the installment made by B, if A declines to offer the offers
then B is qualified for recuperation of those offers.
Statement of the problem

The researcher found out that the problem with Section 10 of Specific Relief Act, 1963 is that
specific performance can be granted even when compensation is not adequate relief in facts
and circumstances and so decision is on objective basis and on the discretion of court.

Hypothesis

This section helps in providing relief to parties which cannot get the desired relief from
compensation. It only enforces the contract in which the party had entered and does not put any
guidelines other than contract.

Research Objective

 To know about specific performance of contract.

 To analyse the transformation in section 10.
 To know the drawbacks of section 10.

Research Question

 What is the basis for specific performance of contract?

 What is the purpose of specific performance of contract?
 What are the conditions for applicability of section 10?

Research Methodology

The methodology in this project is descriptive, it is collected from primary sources like bills,
acts and statutes & secondary sources are articles, various trusted sites and legal databases. The
other source used is a case of Supreme Court and High Court.
INTRODUCTION

Specific Relief Act was established in 1877. The Act was initially drafted upon the lines of the
Draft, New York Civil Code, 1862, and its fundamental arrangements epitomized the
regulations developed by the English Equity Courts. The Specific Relief Act, 1963 is the result
of the acknowledgment by the Central Government on the proposals made by the Law
Commission of India. A bill to revoke the Act of 1877 was presented in Lok Sabha and was
passed by the both the places of Parliament and on thirteenth December, 1963 the President
consented to the same.

The Specific Relief Act accommodates specific reliefs. Specific relief implies help of specific
species, i.e. a correct or specific, a named, settled or decided relief. The term is by and large
comprehended and giving help of a specific kind instead of a general relief or harms or
remuneration. It is a remedy which goes for the correct satisfaction of a commitment or specific
performance of the contract. For example if some body unlawfully confiscates somebody of
his property, the general help might require the litigant to pay the other party pay identical to
the misfortune endured by him because of dispossession. Specific relief may empower to have
the ownership of a similar property over again by requiring the respondent to reestablish
ownership of the property. Specific performance is for the most part conceded when there exist
no standard for finding out real harms, for example the protest of the deal is picture by the dead
painter, or where pay in cash won't give sufficient relief to the offended party.

Section 10 of the Act privides the conditions where the specific performance of contract is
enforceable. As indicated by the area the specific performance of any contract may, in the
attentiveness of the court, be implemented when there exists no standard for finding out the
genuine harm caused by the non-performance of the demonstration consented to be done or
when the demonstration consented to be done is with the end goal that pay in cash for its non-
performance would not manage the cost of satisfactory help. The clarification to the area
expresses that the court if there should arise an occurrence of resolute property might assume
that the break of an contract to exchange relentless property can't be satisfactorily assuaged by
pay in cash; and that the rupture of an contract to exchange mobile property can be so alleviated
with the exception of in the accompanying cases:
(a) Where the property isn't a conventional article of trade, or is of extraordinary esteem or
enthusiasm to the offended party, or comprises of products which are not effectively reachable
in the market;
(b) Where the property is held by the respondent as the operator or trustee of the offended party.

The Constitution Bench on account of Chand Rani v. Kamal Rani,1 held that that on account
of offer of undaunted legitimately there is no assumption as to time being the substance of the
contract. The Explanation 1 to Section 10 which expresses that unless and until the point when
the opposite is demonstrated, the Court might assume that the break of an contract to exchange
enduring property can't be satisfactorily calmed by remunerated in cash, and that the rupture of
an contract to exchange portable property can be therefore eased. Regardless of whether it isn't
of the quintessence of the contract, the Court may induce that it is to be performed in a sensible
time if the conditions are : (1) from the express terms of the contract; (2) from the idea of the
property; and (3) from the encompassing conditions, for instance, the question of making the
contract". As such the Court should take a gander at all the significant conditions including the
time-limit(s) indicated in the assention and decide if its prudence to give specific performance
ought to be worked out. It is in this way obvious that there is legitimate assumption, albeit
rebuttable, that rupture of an contract to exchange steady property can't be enough remunerated
in cash. Therefore once an contract to exchange undaunted property is demonstrated, the run
ought to be give of specific performance and dissent of the same might be a special case. It
should likewise be said that it would be weight of respondents to exhibit that the break can be
sufficiently adjusted.

SECTION 10 AS IN ACT

Cases in which specific performance of contract enforceable.—Except as otherwise

provided in this Chapter, the specific performance of any contract may, in the discretion of the
court, be enforced—
(a) when there exists no standard for ascertaining the actual damage caused by the non-
performance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-
performance would not afford adequate relief.2

Explanation.—Unless and until the contrary is proved, the court shall presume—
(i) that the breach of a contract to transfer immovable property cannot be adequately
relieved by compensation in money; and

1
AIR 1993 SC 1742.
2
Specific Relief Act 1963, s 10.
 (ii) that the breach of a contract to transfer moveable property can be so relieved except
in the following cases—
(a) where the property is not an ordinary article of commerce, or is of special value
or interest to the plaintiff, or consists of goods which are not easily obtainable
in the market;
(b) where the property is held by the defendant as the agent or trustee of the
plaintiff.3

PURPOSE OF THIS SECTION

The contract is an agreement upon consideration to do or not to do specific thing, if the

individual on whom this authoritative commitment rests, neglects to release it, other gathering
has ideal to either to demand the literal and actual performance of the contract or to get
remuneration for the non-performance of it. The previous is known as the 'Specific
Performance.'

As per Halsbury Specific performance is "an evenhanded help given by the Courts in instances
of rupture of contract, as a judgment that the litigant do really play out the contract as per its
terms and stipulation."

As indicated by Pomeroy characterizes it as comprising in the getting party's correct

satisfaction of commitment which he has expected in his doing or precluding the very
demonstration which he has attempted to do or exclude.

The subject of Specific performance is managed in Part II, Chapter II of the Specific Relief
Act, 1963 which might be grouped under the accompanying heads:-

A. Contracts which my be specifically implemented;

B. Contracts which can't be specifically implemented;

C. Gatherings to an activity for specific performance.

3
Ibid.
REQUIREMENTS FOR APPLICABILITY OF THIS SECTION

The suit must identify with the particular execution of agreement; The case must fall inside any
of the Clauses (an) and (b);The case should in the attentiveness of the court, be fit one to
warrant particular execution; and The case must not fall inside any of the Section of Chapter II
which precludes particular performance.Explanation to Section 10 conveys assumption for
offended party and pronounces that it ought to be assumed that remuneration does not bear the
cost of satisfactory help in following cases:

In all situations where the agreement is for the exchange of relentless property.

If there should arise an occurrence of portable property where:

a) The property isn't a common article yet an article of exceptional esteem or of uncommon
enthusiasm to offended party.

b) The article isn't effectively reachable in the market.

c) The property is held by the litigant as a specialist or trustee of the offended party.

However these assumptions canbe refuted by the respondent by demonstrating the opposite.

CONTRACTS WHICH MAY BE SPECIFIALLY ENFORCED

The remedy of Specific performance being a fair remedy is at the prudence of the Court. Be
that as it may, in the activity of this carefulness, the Court is represented by specific standards.
The conditions in which specific performance might be conceded are identified in Section 10
of the very Act:

At the point when there exist no standard for learning real harm: It is the circumstance in
which the offended party can't decide the measure of misfortune endured by him. Where the
harm caused by the rupture of contract is ascertainable then the cure of particular execution
isn't accessible to the offended party. For instance, a man goes into an agreement for the buy
of a composition of dead painter which is just a single in the market and its esteem is
unascertainable then he is qualified for the same.

At the point when pay of cash isn't sufficient relief: In following cases remuneration of cash
would not give satisfactory help:
 1. Where the topic of the contract is an unflinching property.
2. Where the topic of the contract is versatile property and,
3. Such property or products are not a normal article of trade i.e. which could be sold or
bought in the market.
4. The article is of uncommon esteem or enthusiasm to the offended party.
5. The article is of such nature that isn't effectively accessible in the market.
6. The property or products held by the litigant as a specialist or trustee of the offended
party.

In Case of Ram Karan v. Govind Lal,4 an understanding available to be purchased of rural land
was made and purchaser had paid full deal thought to the merchant, however the dealer declines
to execute deal deed according to the assention. The purchaser brought an activity for the
particular execution of contract and it was held by the court that the pay of cash would not
manage the cost of satisfactory help and dealer was coordinated to execute deal deed for
purchaser.

Similarly, it was held by the court where the part payment was paid by plaintiff and defendant
admitted that he had handed over all documents of title of property to the plaintiff. Sale price
in an agreement is not low and defendant had failed to establish that said document was only a
loan transaction then the agreement is valid and defendant is liable to perform his part (M.
Ramalingam v. V. Subramanyam)5

Banwari Lal Agarwalla v. Ram Swarup Agarwalla it was held that the plaintiff tenant was
entitled to a decree of specific performance contract under Section 10 of Specific Relief Act.6
Where from some special or practical features or incidents of the contract either in its subject-
matter, or in its terms or in the relations of the parties, it is impossible to arrive at a legal
measure of damages at all, or at least with any sufficient degree of certainty so that not real
compensation can be obtained by means of action at law, the contract will be enforced in
specie.7

4
AIR 1999 Raj. 167.
5
AIR 2003 Mad 305.
6
AIR 1998 Pat 88.
7
Ibid.
CONCLUSION

Specific performance is required when there is no other relief available in the circumstances.
The damages in this are on the basis of judgement and are not based on anything. The promisor
may also have to pay the amount double the earnest money, if he sold the property to another
person. Specific performance is not ordered when compensation is an adequate relief. Damages
are inadequate were it is difficult to prove the loss. The section presumes that compensation
would not be adequate in the case of transfer of immovable property rather, it would be
adequate in case of movable property. Compensation for breach of contract of immovable
property cannot be adequate because it may have peculiar importance to a person. In this the
burden of proof is on the plaintiff unless the plaintiff has burden of presumption.

Thus, specific performance of contract has various conditions. For a contract to be specifically
enforced it needs to satisfy all the requirements of section 10. The purpose of Specific Relief
Act, 1963 was to differentiate between the the contracts which can be specifically performed
and which cannot be specifically performed. Section 14(3) also explains the exception of
contracts that cannot be specifically performed.