AN Analytical study OF SPECIFIC

PERFORMANCE OF CONTRACTS
SECTIONS 9-24 OF THE SPECIFIC RELIEF ACT, 1963

(INCLUDING SUBSTITUTED PERFORMANCE AND RECENT

AMENDMENTS)

A Postgraduate Teaching Practical

Introduction - The Essence of Specific Relief

What is Specific Relief?

▪ A remedy in civil law that compels a party to perform their contractual

obligation, rather than merely paying damages for non-performance.

▪ Fundamental Principle: Based on the equitable maxim, "Equity will not suffer a
wrong to be without a remedy."

▪ Governing Law: The Specific Relief Act, 1963 (SRA).

▪ Core Purpose: To provide a remedy where monetary compensation would be

inadequate or would not afford complete justice to the aggrieved party.

▪ Focus of this Presentation: A postgraduate-level deep dive into Sections 9-24,

which constitute the heart of specific performance jurisprudence in India.
Background and Object of the Act

▪ Predecessor: The Specific Relief Act, 1877.

▪ Pre-1963: Governed by the Specific Relief Act, 1877, which was based on the
Draft New York Civil Code of 1862.

▪ The 1963 Act: Enacted based on the recommendations of the 9th Law
Commission Report. It consolidated and amended the law, but retained the
discretionary nature of the remedy.

▪ Object of the 1963 Act: To define and amend the law relating to certain kinds
of specific relief.

▪ It is not an exhaustive code but a framework for granting equitable remedies.

▪ Nature of the Remedy: It is an equitable, discretionary (historically), and

specific remedy aimed at exact fulfillment of an obligation.
The Paradigm Shift: The 2018 Amendment

▪ Key Change: The Specific Relief (Amendment) Act, 2018, transformed the
nature of the remedy.

▪ From Discretion to Mandate: The amendment shifted the grant of specific

performance from being a discretionary power of the court to a mandatory
one, subject to certain exceptions.

▪ Objective of Amendment: To promote the ease of doing business, enhance

the sanctity of contracts, and reduce litigation uncertainty.

▪ New Concepts Introduced: Substituted Performance, special provisions for

infrastructure contracts, and special courts.
Section 9 - Defences in Suits for Specific Relief

▪ Principle: A defendant in a specific performance suit can raise any

defence available to them under the law of contract.

Examples of Defences:

▪ Incapacity of parties (minority, insanity).

▪ Absence of a valid contract (no consensus ad idem).

▪ Illegality of the contract's object.

▪ Fraud, coercion, undue influence, misrepresentation.

▪ Mistake of fact.

▪ The contract must be valid and enforceable in the first place.

Section 10 - Specific Performance: The General
Rule (Post-Amendment) (The Heart of the Act)

▪ The New Mandate: "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.“

▪ The word "may" (discretionary) was replaced with "shall" (mandatory).

▪ Removal of Discretion: If a contract is valid and enforceable, the court is now

bound to grant specific performance, unless barred by Sections 11(2), 14, or 16.
This shift from judicial discretion to contractual certainty

Pre-Amendment Discretion: K.S. Vidyanadam v. Vairavan (1997) 3 SCC 1

▪ A suit for specific performance was filed after a significant delay, during which the
price of the property had escalated enormously. The Supreme Court held that while
mere price escalation is not a ground to deny relief, the court can consider the
delay and subsequent hardship. The relief was denied as it would be inequitable.
Section 11 - Contracts Connected with Trusts

▪ Section 11(1): Specific performance shall be enforced when the act to be

done is in the performance of a trust.

▪ Section 11(2): A contract made by a trustee in excess of their powers or in

breach of trust cannot be specifically enforced.

▪ Rationale: The court protects the interests of the trust and its beneficiaries
over the contractual rights of a third party who knowingly entered into a
flawed contract with the trustee.
Section 12 - Specific Performance of Part of a
Contract

▪ General Rule: The court shall not direct specific performance of a part of a contract.

▪ Exceptions:

1. Small Unperformed Part (Sec 12(2))

2. Large Unperformed Part (Sec 12(3))

3. Independent Part (Sec 12(4)):

Case: Surjit Kaur v. Naurata Singh, (2000) 7 SCC 379

▪ A co-owner contracted to sell a property but other co-owners did not consent. The
plaintiff (buyer) was willing to accept the part of the property corresponding to the
vendor's share. The Supreme Court, applying principles analogous to Section 12(3),
allowed specific performance of the contract to the extent of the vendor's share, on
the condition that the plaintiff paid the full agreed price and relinquished claims
against the other co-owners
Section 13 - Rights of Purchaser Against Person
with Imperfect Title

▪ Principle: This section protects a purchaser when the seller's title to the
property is defective at the time of the contract.

▪ Purchaser's Rights: The purchaser can compel the seller to:

(a) Make good the contract if the seller subsequently acquires any interest
in the property (Doctrine of "feeding the grant by estoppel").

(b) Procure the concurrence of other persons having an interest in the

property, if possible.

(c) Pay off any encumbrances (like a mortgage) to convey a clear title.
Section 14 - Contracts Not Specifically
Enforceable
(cornerstone of the exceptions to Section 10)
▪ Specific performance cannot be granted for:

1. Substituted Performance (Sec 14(a))

2. Continuous Duty (Sec 14(b))

3. Personal Qualification (Sec 14(c))

4. Determinable Contract (Sec 14(d))

Case: Indian Oil Corporation Ltd. v. Amritsar Gas Service, (1991) 1

SCC 533

▪ A distributorship agreement was terminable by giving 30 days' notice. The

agreement was terminated. The distributor sought restoration. The
Supreme Court held that the contract was by its very nature
"determinable" and thus, under the old Section 14(1)(c) (now 14(d)), no
specific performance or injunction could be granted. The only remedy was
Section 14A & 20B - Role of Experts & Special
Courts

▪ Section 14A (New): Power of the court to engage experts.

1.In a suit for specific performance, the court may engage one or more
experts on specific issues and direct them to report to the court.

2.The expert's opinion will form part of the record of the suit.

▪ Section 20B (New): Designation of Special Courts.The State Government, in

consultation with the Chief Justice of the High Court, shall designate certain
Civil Courts as Special Courts to try suits under this Act in respect of
contracts relating to infrastructure projects.
Section 15 - Who Can Claim Specific
Performance?

▪ Specific performance can be obtained by:

1. Any party to the contract.

2. The representative in interest or the principal of any party.

3. Beneficiaries in a contract of settlement on marriage or compromise

of doubtful rights.

4. A remainderman (in certain cases).

5. A reversioner in possession/remainder.

6. Amalgamated companies (arising out of amalgamation).

7. A company, post-incorporation, for a contract entered into by its

promoters.
Section 16 - Personal Bars to Relief

▪ Specific performance cannot be enforced in favour of a person:

1. (a) Who has obtained substituted performance under Section 20.

2. (b) Who has become incapable of performing or violates any essential term
of the contract that on his part remains to be performed.

3. (c) Who fails to prove that he has performed or has always been ready and
willing to perform the essential terms of the contract.

▪ "Ready and Willing": This is a critical plea. "Readiness" refers to financial

capacity, and "Willingness" refers to the conduct of the plaintiff.

Case: Acharya Swami Ganesh Dassji v. Sita Ram Thapar (1996) 4 SCC 526

▪ Condition precedent for obtaining relief is the “readiness and willingness“. The
court held that it is not a straitjacket formula and must be determined from the
entirety of facts and circumstances.
Sections 17 & 18 - Nuances of Enforceability

▪ Section 17: Contract to Sell by One Without Title

▪ A contract to sell or let any immovable property cannot be specifically enforced in

favour of a vendor or lessor who does not have title or has only a doubtful title to
the property. This protects the buyer from being forced into a flawed transaction.

▪ Section 18: Non-enforcement Except with Variation

▪ Where a plaintiff seeks to enforce a contract in writing, the defendant can argue
that the written contract does not represent the true agreement due to fraud,
mistake of fact, or misrepresentation.

▪ In such cases, the court may refuse to enforce the contract unless the plaintiff
agrees to the variation pleaded by the defendant.
Section 19 - Against Whom Can a Contract be
Enforced?

▪ Specific performance of a contract may be enforced against:

1. (a) Either party thereto.

2. (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.
3. (c) Any person claiming under a title which, though prior to the contract,
might have been displaced by the plaintiff.
4. (d & e) Amalgamated companies or a company for pre-incorporation
contracts.
Case Law: R.K. Mohammed Ubaidullah & Ors v. Hajee C. Abdul Wahab (D) by
LRs. & Ors. (2000) 6 SCC 402)
▪ The Supreme Court unequivocally held that the burden of proving good faith and
lack of notice is on the subsequent purchaser, not the plaintiff.
Section 20 - Substituted Performance: A New
Remedy
▪ The New Mandate: "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. Breach: The promisor fails to perform the contract.

2. Notice: The aggrieved party (promisee) must give a written notice of not less
than 30 days to the breaching party, asking them to perform.

3. Failure to Perform: If the breaching party still fails to perform within the notice
period, the promisee has two options: 1. Get the contract performed by a third
party. 2. Get the contract performed by their own agency.

4. Recovery of Costs: The promisee can then recover the costs and expenses
incurred from the breaching party.

5. No Double Remedy: The promisee cannot claim both substituted performance

costs and specific performance.
Implications of Substituted Performance

▪ Section 20A (New): No injunction shall be granted by a court in a suit involving a

contract relating to an infrastructure project if it would cause impediment or
delay in the progress or completion of such project.

▪ Sec 20B: Designation of Special Courts by State Governments to try suits under
this Act in respect of infrastructure project contracts.

▪ Section 20C (New): Suits filed in respect of infrastructure project contracts must
be disposed of within a period of 12 months from the date of service of summons.

▪ Sec 20(3) Bar on Specific Performance: Once a party has obtained substituted
performance, they are barred from claiming specific performance of the original
contract [as per Sec 14(a) and 16(a)].

▪ The right to recover costs under Section 20(3) is a statutory right to

compensation. It does not preclude the party from claiming further compensation
for the breach.
Section 21 - Power to Award Compensation

▪ The court can award monetary compensation in the following situations:

1. In Addition to Specific Performance: When mere performance is not

enough to satisfy the justice of the case.
2. In Substitution of Specific Performance: When the court decides not to
grant specific performance (e.g., due to a bar under Sec 14) but finds
that the defendant has breached the contract, it can award
compensation.
▪ Mandatory Pleading: Sub-section (5) requires that the plaintiff must
specifically ask for compensation in the plaint. The court cannot grant it
otherwise, though it may allow an amendment to the plaint.
Section 22 & 23 - Ancillary Reliefs

▪ Section 22: Relief for Possession, Partition, Refund of Earnest Money

▪ Purpose: To avoid multiplicity of litigation. A plaintiff suing for specific

performance of a contract for the transfer of immovable property can
also ask for possession, partition, or a refund of earnest money in the
same suit. Like compensation, these reliefs must also be specifically
claimed in the plaint.

▪ Section 23: Liquidation of Damages Not a Bar

▪ The mere existence of a clause in a contract that stipulates a sum to

be paid upon breach does not oust the jurisdiction of the court to grant
specific performance. The court will examine the true intention of the
parties

Case Law: M.L. Devender Singh v. Syed Khaja (1973): The Supreme Court
held that the mere presence of a clause for liquidated damages does not oust
Section 24: Bar of suit for compensation

▪ Section 24: Bar of suit for compensation for breach after dismissal of suit
for specific performance.
▪ If a suit for specific performance is dismissed, a subsequent suit for
compensation for the same breach is barred. This enforces the
principle of finality in litigation.
Case Law: Sardar Singh v. Smt. Krishna Devi (1994) 4 SCC 18
▪ The Supreme Court held that the second suit was indeed barred. The Court
explained that the right to claim compensation for the breach, which
includes the refund of earnest money, arises from the same cause of action
as the suit for specific performance. When the suit for specific performance
was dismissed, the plaintiff lost the right to file another suit for
compensation for that breach. The dismissal of the main relief (specific
performance) also extinguishes the right to sue again for an ancillary relief
(compensation) based on the same contract.
Limitations and Critical Analysis

▪ Supervision Difficulty: Courts are still reluctant to enforce contracts

requiring continuous supervision (e.g., construction contracts), despite the
amendment(Sec 14C).
▪ Personal Services: Contracts for personal services remain unenforceable,
which is a necessary limitation to protect individual liberty.
▪ Expert Evidence (Sec 14A): The efficacy of this provision depends on the
availability of qualified experts and the court's ability to effectively integrate
their opinions.
▪ Readiness and Willingness: This remains a highly litigated issue and can be
a significant hurdle for genuine plaintiffs.
▪ Infrastructure Projects: The bar on injunctions (Sec 20A) could potentially
be misused against contractors with legitimate claims, creating a power
imbalance.
Conclusion

▪ The law of specific performance has undergone a transformative journey,

moving from a discretionary, equitable remedy to a mandatory, rule-based
one.
▪ The 2018 Amendment reflects a clear legislative policy to uphold the
sanctity of contracts and provide robust enforcement mechanisms,
especially in the commercial and infrastructure sectors.
▪ The new legal framework is centered on the interplay between the mandate
of Section 10 and the specific bars outlined in Sections 11(2), 14, and 16.
▪ The introduction of Substituted Performance (Sec 20) is a modern,
commercially pragmatic tool that empowers the aggrieved party.
▪ The jurisprudence will continue to evolve as courts interpret and apply
these new provisions, balancing the need for contractual certainty with the
enduring principles of fairness and justice.