EQUITABLE INTEREST & REMEDIES

Equitable interest refers to a person's right or interest in property recognized by principles of

equity, rather than by strict legal ownership while equitable remedies refers to the remedy which
are granted by court and requires the party either to commit an act or refrain the party from doing
the act. The nature of equitable remedies are to provide a remedy by compelling a party to act or
refrain from acting, rather than awarding monetary damages. These remedies are granted by court
at their discretion. Some of the major equitable remedies are Injunctions, specific performance of
contract, rectification and Cancellation.

EQUITABLE REMEDY OF SPECIFIC PERFORMANCE

In general words specific performance means performance of ones obligation in the contract. This
concept is given under Specific Relief Act, 1963 under Section 9 to 13. It is the concept which
enforces the specific performance of a contract by the courts.

DEFENCES AVAILABLE TO AN ACTION FOR SPECIFIC

PERFORMANCE
Section 9 of the specific relief act provides that if any relief related to specific performance is
claimed against any person, then he can seek defense which is available to him by any law relating
to contract.
Some of the defenses which are available to a person as expressed by Snell in his Principles of
Equity are:
(i) No effective contract
(ii) Absence of writing
(iii) Plantiff`s misrepresentation
(iv) Mistake
(v) Misdescription
(vi) Plantiff at default
(vii) Lapse of time
(viii) Trickiness
(ix) Great Hardship
(x) Illegality
(xi) Defective Title

SECTION 10
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.

SECTION 11
  Section 11(1) provides that specific performance of a contract shall, be enforced when the
act agreed to be done is in the performance wholly or partly of a trust.
 Section 11(2) provides that A contract made by a trustee in excess of his powers or in
breach of trust cannot be specifically enforced.

SECTION 12(SPECIFIC PERFORMANCE OF PART)

 Section 12(1) provides that “Except as otherwise hereinafter provided in this section, the
court shall not direct the specific performance of a part of a contract”.
 Section 12(2) provides that, when a part is unable to perform a small part of the contract
and admits the compensation in money for that deficiency, then the court may, at the suit
of either party, direct the specific performance of so much of contract as may be performed
and award compensation for deficiency.
 Section 12(3) provides that, when a party to contract is unable to perform the whole of his
part, and part which is left underperformed either

(a) forms a considerable part of the whole, though admitting of compensation in money; or
(b) does not admit of compensation in money;
The person is not entitled to specific performance. But the court may at the suit of other party,
direct the party in default to perform as much of his part as he can perform, if the other party-
(i) If falling under clause(a), pays or had agreed to pay the consideration for the whole of
the contract reduced by the consideration of the part underperformed and falling under
clause(b) the consideration for whole of the contract without abatement.
(ii) In either case, the party relinquishes his right to claim compensation and performance
of remaining part for the loss or damage sustained by him.
 Section 12(4) provides that If the part of a contract which can be specifically enforced
stands on a separate and independent footing from another part of same contract which
cannot be perform, the court may direct specific performance of former part.

CONTRACTS WHICH ARE NOT SPECIFICALLY ENFORCEABLE

SECTION 14 (CONTRACTS NOT SPECIFICALLY ENFORCEABLE)
Section 14 of the specific relief act, 1963 defines the contracts which are not specifically
enforceable. In the following conditions contracts are not specifically enforceable:
a) Substituted performance of contract- When the party to the contract has obtained
substituted performance of contract.
b) Contracts requiring constant supervision- : A contract cannot be specifically enforced
where it involves the performance of continuous duty which the court cannot supervise.
 c) Contracts involving personal skiils- A contract which is so dependent on the personal
qualifications of the parties that the court cannot enforce specific performance of its
material terms.
d) Determinable nature- A contract which is in its nature determinable.

Section 17 of the specific relief act, 1963 defines that contract to sell or let any immovable property
cannot be specifically enforceable in favour of a vendor or lessor when:
a) who, knowing himself not to have any title to the property, has contracted to sell or let the
property.
b) Who, though he entered into the contract believing that he had a good title to property but
the title to the ownership is disputed at the time by the party or by the court for selling and
letting the property

SECTION 14A(POWER TO ENGAGE COURTS)

 Section 14A(1) provides that Without prejudice to provisions of Code of civil procedure,
1908, where the courts provide that it is necessary to get expert opinion to assist it on any
specific issue involved in suit. The court may engage one or more experts and direct to
report it on the issue.
 Section 14A(2) provides that, the court may direct any person to give relevant information
to expert or to provide access to, any relevant documents, goods or other property for
inspection.
 Section 14A(3) provides that, the report or opinion given by the expert shall form the part
of record of suit, and with the permission of courts 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.
 Section 14A(4) provides that, “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”

SECTION 15(WHO MAY OBTAIN SPECIFIC PERFORMANCE)

According to this section specific performance can be obtained by:
(a) Any party thereto
(b) the representative in interest or the principal, of any party thereto

Provided that where the learning, skill or solvency are material in contract and the contract provide
that this interest should not be assigned to his representative unless such party has performed his
part of contract or the performance by representative is accepted by other party.
(c) Where the contract is of settlement of marriage or compromise of doubtful rights of family,
any person beneficially entitled thereunder.
 (d) where the contract has been entered into by a tenant for life in due exercise of a power, the
remainderman
(e) a reversioner in possession, where the agreement is a covenant entered into with his
predecessor in title and the reversioner is entitled to the benefit of such covenant.
(f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is
entitled to the benefit thereof and will sustain material injury by reason of its breach

(fa) when a limited liability partnership has entered into a contract and subsequently becomes
amalgamated with another limited liability partnership, the new limited liability partnership which
arises out of the amalgamation
(g) when a company has entered into a contract and subsequently becomes amalgamated with
another company, the new company which arises out of the amalgamation
(h) when the promoters of a company have, before its incorporation, entered into a contract for
the purposes of the company, and such contract is warranted by the terms of the
incorporation, the company

PERSONAL BARS TO RELIEF

Section 16 deals with personal bars to relief and provides that the specific performance cannot be
enforce in favour of a person who:
1. Who has obtained substituted performance of contract under Section 20
2. One who has become incapable of performing or violates any essential term of contract
that he should be performed.
3. One who acts in fraud of contract, or wilfully acts at variance with or in subversion of
relations intended to established by contract.
4. One who is not willing to perform his part of contract from the starting itself.

RECTIFICATION OF INSTRUMENTS
Rectification is a remedy in equity where a court modifies a written document to reflect the true
intentions of the parties involved, correcting errors made in recording their agreement. Section 26
of the Specific relief act deals with the Rectification of instruments.
Section 26(1) provides that When due to fraud, or a mutual mistake of parties, the contract was
made of such a kind that it is not easy to express the real intention of the parties then-
(a) Either party or his representative may institute suit for rectification
(b) The plaintiff in any suit in which any right arise under suit, may file for rectification in that
suit.
(c) A defendant can file for rectification under clause (b)

Section 26(2) provides that the court after getting satisfied under clause (1) may grant rectification
of the instrument to express the true intention of the parties
Section 26(3) provides that the contract in writing may be first rectified and later can be
specifically enforced.
Section 26(4) provides that no relief for rectification should be granted to any person under this
section until it is specifically claimed

CANCELLATION OF INSTRUMENTS
SECTION 31
Section 31(1) provides when cancellation may be ordered. It give three essential conditions when
the contract is cancelled.
1. The instrument must be void or voidable.
2. The plaintiff must have a reasonable apprehension of serious injury if the instrument is left
outstanding.
3. Under the circumstances of the case, the court exercises its discretion and orders the instrument
to be delivered up and cancelled.
Section 31(2) provides that if the instrument is registered by the Indian Registeration Act, 1908,
the court shall also send copy of its decree to the officer in which instrument is registered and such
officer must also note it in the books of fact of his cancellation

SECTION 32
As per Section 32,to court in its discretion can very well cancel only a part of an instrument. It
means, in residue, the instrument can stand in a proper case where there is evidence of different
rights or different obligations. This means that rights and obligations identified must be distinct
and separable.

SECTION 33
Section 33(1) provide that when the court adjudged in cancellation of the contract, the court may
require the party to whom the relief of cancellation been granted to restore the benefit received by
him in the contract.
Section 33(2) provides the condition where a defendant can successfully resist the suit which are:
1. The instrument which is sought against him is voidable, the court may order to restore the
benefit received by the defendant or to give compensation to the other party.
2. That the agreement sought to be enforced against him in the suit is void by reason of his
not having been competent to contract the court may order to restore the benefit received
by the defendant or to give compensation to the other party.

INJUNCTIONS
Injunction is an order of the court to a party to the proceedings to do or to refrain from doing a
specified act. It is granted in cases where monetary compensation affords an inadequate remedy to
the aggrieved party.

SECTION 36
This section deals with the Preventive relief. It is granted at the discretion of the court by
injunction, temporary or perpetual.

SECTION 37
 Section 37(1) deals with the Temporary injunction. According to it Temporary injuction
are such which are continue until a specific time, or till the next order of court. They may
be granted at any stage of the suit and are regulated by the Code of Civil Procedure.
 Section 37(2) deals with the Perpetual injunction. A perpetual injunction is granted by
the decree on the merits of suit.

SECTION 38(WHEN PERPETUAL INJUNCTION BE GRANTED)

It deals with the condition when the perpetual injunction can be granted which are as:
 Section 38(1) provides that a perpetual injunction may be granted to the plaintiff to prevent
the breach of an obligation existing in his favour.
 Section 38(2) provides that When any such obligation arises from contract, the court shall
be guided by the rules and provisions contained in Chapter II.
 Section 38(3) provides that when the defendant invades or threaten to invade the plantiff
`s right, or enjoyment of property, the court may grant perpetual injunction in the following
cases:
a) When the defendant is trustee of the property for the plantiff.
b) Where there is no standard for ascertaining the actual damage caused, or likely to be caused
, by the invasion.
c) Where the compensation in money would not afford adequate relief.
d) Where the injunction is necessary to prevent a multiplicity of judicial proceedings.

SECTION 39 (MANDATORY INJUNCTIONS)

Mandatory injunctions are issued in the cases where it is necessary to compel the performance of
certain acts which the court is capable in enforcing, the court may in its discretion grant an
injunction to prevent the breach and also to compel performance of acts.

SECTION 40
 Section 40(1) provides that the plantiff in a suit for injunction can also claim damages in
addition to, or in substitution for injunction, and court may if think fit grant such damages.
  Section 40(2) provides that no relief for damages should be grant except which are written
in plaint, provided that where no such damage has been claimed in the plaint, the court
shall at any stage of proceedings, allow the plantiff to amend the plaint on such terms as
may be just.
 Section 40(3) provides that, “The dismissal of a suit to prevent the breach of an obligation
existing in favour of the plaintiff shall bar his right to sue for damages for such breach.”

SECTION 41(WHEN INJUNCTION CAN NOT BE GRANTED)

It defines the situation when the injunction can not be granted. Following are the conditions:
a) To restrain any person from prosecuting a judicial proceedings unless such restrain is
necessary to prevent multiplicity of proceedings.
b) To restrain any person from instituting or prosecuting any proceeding in a court not
subordinate to that from which the injunction is sought.
c) To restrain person from applying for any legislative body.
d) To restrain any person from prosecuting any proceeding in criminal matters.
e) to prevent the breach of a contract the performance of which would not be specifically
enforced
f) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will
be a nuisance.
g) to prevent a continuing breach in which the plaintiff has acquiesced
h) when equally efficacious relief can certainly be obtained by any other mode except in case
of breach of trust.
i) When the conduct of plantiff or his agents is such that it disentitle him to approach court.
j) When the plantiff has not personal interest in contract

EQUITABLE ESTOPPEL
The principal of equitable estoppel provides that a person cannot take a legal action that conflicts
with his previous given statements, claims or acts. This principle helps in averting the fraud
committed by one person against the other. Estoppel is defined clearly in section 115 to 117 of the
Indian evidence act, 1872
Section 115 of the Indian evidence act defines the definition of estoppel as, “When one person has,
by his declaration, act or omission, intentionally caused or permitted another person to believe a
thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in
any suit or proceeding between himself and such person or his representative, to deny the truth of
that thing.”
This section simply provides that if a person, by words, actions, or lack of action, has intentionally
led another to believe something as true and to act on that belief, neither they nor their
representative can later deny it in legal proceedings with that person or their representative.

DISTINGUISH BETWEEN EQUITABLE RIGHTS AND LEGAL RIGHTS

 Basis Legal Rights Equitable rights
Origin Derived from common law Derived from courts of equity
courts
Nature Fixed Changing nature
Enforcement By common law courts By courts of equity
Priority Takes precedence over Subordinate to legal rights
equitable rights

DIFFERENCE BETWEEN TEMPORARY AND PERPETUAL

INJUNCTION
Basis Temporary Injunction Perpetual Injunction
Nature Provisional or till further order It is final
Granted to Maintain status quo To protect the right
established by plantiff
Time during suit It can be granted at any period It is granted only after the trial
of the suit
Regulation It is regulated by Code of Civil It is regulated by section 38 to
Procedure, order 39, Rules 1 42 of the Specific relief act
and 2
Dissolution It can be dissolved It cannot be dissolved

PYQ
Q. Explain equitable interest(2014,2017) 1 marks
Q. Which sections cover ‘Injunction’ in specific relief act, 1963(2014, 2019) 1 marks
Q. Define specific performance(2014, 2019) 1 marks
Q. Explain equitable estoppels(2014, 2017) 1 marks
Q. Name the kinds of injunctions(2016,2017) 1 marks
Q. What is nature of equitable or specific relief(2018) 1 marks
Q. What is the meaning of equitable remedies(2019) 1 marks
Q. Define equitable rectification(2022) 1 marks
Q. Define injunction(2022) 1 marks
Q. Explain equitable rights. Distinguish between equitable rights and Legal rights(2022) 4 marks
Q. What are principles on which court acts in granting specific performance(2014, 2019) 8 marks
Q. Define Permanent and Mandatory injunctions. Explain the principles on the basis of which
court grants Temporary injunction(2014) 8 marks
Q. What do you mean by injunction? What are the differences between perpetual injunction and
temporary injunction(2017, 2019) 8 marks
Q. Discuss about such contracts which can be specifically enforced with the help of illustrations
of various decided cases(2018) 8 marks
Q. What do you understand by the term equitable remedy? Discuss any two most common
equitable remedy(2022) 8 marks