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LAW ON SPECIFIC PERFORMANCE OF CONTRACT
Introductory:A contract is an agreement upon sufficient consideration to do or not to do a particular act. The party on whom this contractual obligation rests must not fails to discharge such obligation. In case of his failure, the other o ther party will have a right sue for performance of the contract. This is called ‘ Specific Performance’ . rder of specific performance are granted when damages are not an ade!uate remedy, and in some specific cases such as land sale. "uch orders are discretionary, as with all e!uitable remedies, so the availability of this remedy will depend on whether it is appropriate in the circumstances of the case. #nder current law, courts grant specific performance when they perceive that damages will be inade!uate compensation. "pecific performance is deemed an e$traordinary remedy, awarded at the court%s discretion
Sections 9-25 de! "it# s$eci%ic $er%or&nce o% contrcts: 'sic ru!es( 1. &ecree of specific performance is discretionary relief ( )Su*u&r +s Sus#ee!, . C(W(N //.0 '"ee section () of ".*.Act+
2( There should be a valid contract() A&1ic Prsd +s Nirn 'i1i, AIR /939 A!! .40, )'!r& + Nt*u, AIR /92 PC 50 . If damages are an ade!uate remedy, no n o specific performance would be ordered. -. or the act which re!uires continued supervision of the /ourt, no specific performance would be ordered. 0"ec.1- 01 0d 2. no specific performance would be ordered for contracts for personal wor3 or service 4. ‘5!uity% will insist on the principle of mutuality 6. The person against whom the relief is claimed may ta3e plea by way of defence under law relating to contract. 0"ec.7
6uestion no( /:- W#t re t#e de%ences +i!1!e under !" o% contrct7 Ans"er:- The defences that are available under law of contract are 89 1. Incapacity of parties (. #ncertainty of contract . Absence of concluded contract -. raud
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2. :isrepresentation 4. :ista3e 6. Illegality or want of authority to enter into contract
6uestion no( 2 :- W#en cn s$eci%ic $er%or&nce o% contrct 1e en%orced7 en%orced7 Ans"er:- According to section 1) of the Act, the specific performance of contract can be enforced in the following cases89 1. If there e$ists no standard for ascertaining the actual damage caused by the non performance of the act which agreed to be done (. ;hen pecuniary compensation for its non performance would not afford ade!uate relief. . ;hen it is probable that pecuniary compensation cannot be got f or the non performance of the act agreed to be done
6uestion no( 3:- Cn $rt o% contrct 1e en%orced7 Ans"er: - According to section 1( of the Act, the specific performance of part of contract may be enforced in the following cases89 1. "ection 1( of the Act corresponds to "ections 1 to 16 of the Act with certain modifications. (. "ection 1( 01, 0( and 0- of the Act provide e$ceptions to the general rule of specific performance of a part of a contract. . As a general rule, a contract is intended to be deal with as a whole but not piecemeal.
6uestion no(4 :- W#t ty$e o% contrcts c ontrcts cnnot 1e en%orced7 fo llowing contracts cannot be enforced8 Ans"er:- #nder section 1- of the Act, the following 1. /ontracts in which compensation in money is an ade!uate relief.' "ee section 1- 01 0a of ".*.Act , )8e+endr Sin# +s Syed #;, AIR /93 SC 2450
2( /ontracts involving personal service ()<is# 8eree Co!!ee, S#&!i +s L*s#&i Nryn, AIR /9. SC 0 . /ontracts with uncertain terms.
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-. /ontracts in its nature determinable 2. /ontracts which or not valid in >aw 4. /ontracts involving continuous supervision of the /ourt 6. /ontracts to build or repair wor3s 0 sub?ect to some e$ceptions e$ceptions )=nion Construction Co( +s C#ie% Enineer,Estern Co&&nd,Luc*no",AIR /9.> A!! 20 @. The /ontract by
6uestion no(5:- W#o cn o1tin S$eci%ic $er%or&nce o% contrct7 Ans"er:- "ection 12 of the Act says says specific performance of a contract may be obtained obtained by Any party thereto 1. The representative9in9interest, or the principal, or any party thereto e$cepting where the earning s3ill, solvency or any personal pe rsonal !uality of such party is a material ingredient in the court. (. If personal s3ill of one party party is essential element of the contract of specific performance is frustrated with death of that party party and legal representative of that that party cannot demand specific performance of the contract
6uestion no(. :- W#t re t#e de%ences +i!1!e to t#e de%endnt in suit %or s$eci%ic $er%or&nce o% contrct7 Ans"er:- The &efendant may set up any one of the following defences in a suit for specific performance of contract. 1. /ompensation in money would be ade!uate relief (. Plaintiff%s unperformed part is large
3( /ontract depends on personal !ualifications or volition of parties.' Motir& +s #y!i R&, AIR /9. A!! 440 -. ;anting title 2. ;anting in mutuality 4. /ontract is devoid of consideration 6. 5ssential part of contract has ceased to e$ist @. Performance of contract would involve hardship to defendant than the p laintiff 7. Performance of contract involves continuous duty over three years 1). #ncertainty in terms of contract
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6uestion no( :- Person! 1rs to re!ie% under s$eci%ic $er%or&nce o% contrct under section /.:Answer89 "pecific performance of contract cannot be enforced in favour of a person in the following cases89 1. ;ho would not 1e entit!ed to reco+er co&$enstion for its breach= or (. ;ho has become inc$1!e o% $er%or&in or +io!tes any essential term of, the contract that in his part remains to be performed or acts in fraud of the contract, or wilfully acts at variance with or in subversion of the relation intended to be established by the contract= or . ;ho fails to +er nd $ro+e that he has performed or has always been redy nd "i!!in to $er%or& the essential terms of the contract
6uestion no( 89 W#t does discretion nd $o"er o% court &en7 Ans"er:- "ection () of the Act says89 1. The ?urisdiction to decree specific performance is discretionary. (. The /ourt is not bound to grant such relief re lief merely because it is lawful to do. . The discretion of the /ourt should be arbitrary but sound and reasonable, guarded by ?udicial principles and capable of correction by a /ourt of appeal.
6uestion no(9 :- W#t re t#e circu&stnces in "#ic# t#e Court cn e@ercise its discretion $ro$er!y 7 Ans"er:1. If the terms of contract give the plaintiff unfair advantage over the defendant= or (. If the conduct of the parties of contract or other circumstances, gives the plaintiff unfair advantage over the defendant . If the performance of contract would involve hardship on the defendant which he did not foresee, whereas its non performance would involve no such hardship on the plaintiff= or -. ;here the defendant entered into the contract under circumstances which, though not rendering the contract voidable ma3es it ine!uitable to enforce specific performance
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6uestion no(/> :- W#t do t#e ter&s Redy nd "i!!in to $er%or&B &en7 W#et#er t#e conduct o% t#e $!inti%% is to 1e considered in suit %or S$eci%ic Per%or&nce Suit7 Ans"er:- In N(P( T#irunn& +( 8r( R( n Mo#n Ro nd Ors( MAN=DSCD>>25D/99. : /995 5 SCC //5 at para 2, this /ourt held8 B"ection 140c of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is re!uired to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To ad?udge whether the plaintiff is ready and willing to perform his part of the contract, the court must ta3e into consideration the conduct of the plaintiff prior and subse!uent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. *ight from the date of the e$ecution e $ecution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be ad?udged with reference to the conduct of the party and the attending circumstances. The court may infer from f rom the facts and circumstances whether the plaintiff was always ready and willing to perform his part of the contract.
6uestion no(// :- Is s$eci%ic $er%or&nce o% contrct 1y Minor en%orce1!e7 Answer89 Sri *u!& Su1r#&ny& nd not#er
6uestion no(/2 :- Is s$eci%ic $er%or&nce o% contrct 1y Aent en%orce1!e7 Answer89 An agent cannot personally enforce contracts entered into by h im on behalf of his principal not is he personally bound by them in the absence of any contract to that effect. "ee section () of of Indian /ontract /ontract Act,1@6(.
6uestion no(/3 :- Cn Le! re$resentti+e en%orce s$eci%ic $er%or&nce o% contrct7 Ans"er89 The legal representative of a deceased party can enforce a contract of sale . see ruling /92 2 ML 2/, 8ori S"ny +s nui$$( 6uestion no(/4 :- W#et#er s$eci%ic $er%or&nce $er%or&nce o% contrct cn 1e rnted "it# dou1t%u! tit!e7 Answer89 Co. ;here the doubtfulness do ubtfulness of the title cannot be resolved e$cept by proving certain intruinsic facts or by agitating against the parties other than the parties to the contract= the court cannot grant the the relief of specific performance= A doubtful title is one 2|Page
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regarding which some doubt persists but a bad title one defective in its nature. "ee A#&ed1#oy +s Sir 8ins#"(
6uestion no(/5 :- W#en Ti&e is essence o% contrct7 contrct7 Ans"er:- In AI*()11"/(-, ()1102A>&1))0"/, Mrs( Srd&ni nd$$nBs cse, it "s o1ser+ed t#t the legal position is clear from the decision of a /onstitution Dench of +(Kamal Rani :AC#E"/E)(@2E177 this /ourt in Chand Rani +( :AC#E"/E)(@2E177 8 177 01 "// 217, wherein this /ourt outlined the principle thus8 It is a well9accepted principle that in the case of sale of immovable property, time is never ne ver regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in 5ngland. #nder the law of e!uity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law loo3s not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to ta3e place, really and in substance it was intended that it should be completed within a reasonable time. An intention to ma3e time the essence of the th e contract must be e$pressed in une!uivocal language. In the case of S&t( C#nd Rni ded 1y LRs(
6uestion no(/. : G Is suit %or s$eci%ic $er%or&nce o% contrct 1y one o% ;oint $ro&isees &intin1!e7 Answer89 S&t( Nir&! '! 8si nd Anr(
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6uestion no(/ :- Cn n unreistered ree&ent o% s!e 1e &r*ed in suit %or s$eci%ic $er%or&nce7 AC";5*89 0i A document produced for inspection of the /ourt cannot be admitted in evidence under "ection -70c of the *egistration Act, if it is re!uired registration under "ection 16 of the said Act. 0ii Any document by whatever name called not creating, declaring, assigning, limiting or e$tinguishing any right, title or interest, but merely creating right to obtain another document does not re!uire registration under "ection 1601 of the *egistration Act. 0iii As a necessary corollary a document of contract for safe of immovable property creating right to obtain another document shall not re!uire registration by reason of the payment of earnest money or whole or part of purchase money by the purchaser. p urchaser. 0iv In any event, the prohibition under "ection -70c of the *egistration Act does not apply to an unregistered document effecting immovable property in a suit for specific performance under the "pecific *elief Act or as evidence of part performance of contract of as evidence of any collateral transaction not re!uired to b e effected by registered document.
6uestion no( /:- W#t re t#e essenti! e!e&ents to constitute Lis PendensB7 Answer89 In order to constitute a lis pendens the following elements must be present 89 0I There must be a suit or proceeding pending in a /ourt of competent ?urisdiction. 0II The suit or proceeding must not be collusive. 0III The litigation must be one in which right to immovable property is directly and specifically in !uestion. 0IL There must be a transfer of or otherwise dealing with the property in dispute by any party to the litigation. 0L "uch transfer must affect the rights of the other party that may ultimately accrue under the terms of the decree or order.
6uestion no( /9 :- A$$!iction o% Order 22 Ru!e /> o% CPC nd Order / Ru!e /> CPC in s$eci%ic $er%or&nce o% contrct7 Answer89 The ob?ect of rder 1, *ule 1), /.P./. is to discourage contest on technical pleas, and to save honest and bona fide claimants from being non9suited. The power to stri3e out or add parties can be e$ercised by the /ourt at any stage of the proceedings. #nder this *ule, a person may be added as a party to the suit in the following two contingencies8 9 0i
;hen he ought to have been be en ?oined as plaintiff or defendant, and is not ?oined so, or
0ii ;hen, without his presence, the !uestions in the suit cannot be completely decided.
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rder 1 *ule 1) cpc is wider than the scope rder (( *ule 1) /pc. rder (( *ule 1) /pc is merely an enabling provision and that it has certain parameters. rder ((, *ule 1), /.P./. spea3s of cases of an assignment, creation or devolution of any interest during the pendency of a suit and the suit may, by leave of the /ourt, be continued by or against the person to or upon whom such interest has come or devolved. 0"ee the ruling Linr; Mo#nty +s 'inodini Mo#nty H Ors( on 2> A$ri!, 2>//
6uestion no( 2>:- A!ternti+e re!ie% o% re%und o% ernest &oney Answer89 ;here the vendee suing for specific performance of contract of sale in the same suit as3ed in the alternative for the relief re lief of refund of earnest money or advance money, paid under the contract of sale, can, as an aggrieved person, prefer appeal against the ?udgment and decree of the first first court which granted him only the relief of return of the earnest money or advance money while denying him the relief of specific performance. 0"ee ruling AI* 1771 :adras 14 , R&ni A&&! +s Susi!&&!
6uestion no( 2/( Cn &end&ent $$!iction 1e $er&itted re!tin to c o&$enstion in suit %or s$eci%ic $er%or&nce7 Ans"er:- ;here an amendment relates to relief of compensation in lieu of or in addition to specific performance where the plaintiff has not abandoned his relief of specific performance the ourt ourt will allow the the amendment amendment at at any stage of the proceeding. '"ee AI* 177( "/ 14)-, dis# Sin# +s Nt#u Sin#0 6uestion no( 22( W#t is t#e distinction 1et"een 1et"een Co&$enstionB Co&$enstionB nd 8&esB7 8&esB7 Ans"er:- In the case of M#&ed Mo#r! A#d ord 5sher observed in 8i@on +( C!cr%t 01@7( 1 .D. -2@ 0-4 the e$pression compensation is not ordinarily used as an e!uivalent to damages, although as remar3ed by ry, >.M. in S*innersB Co( +( ni#t 01@71( .D. 2-( compensation may often have to be measured by the same rule as damages in an action for the breach. The term Co&$enstion as pointed out in the $ford &ictionary, signifies that which is given in recompense, an e!uivalent rendered. 8&es, on the other hand= constitute the sum of money claimed or ad ?udged to be paid in compensation for loss or in?ury sustained= the value estimated in money, of something lost or withheld. The term compensation etymologically suggests the image of balancing one thing against another= its primary signification is e!uivalence, and the secondary and more common meaning is something given or obtained as an e!uivalent. 6uestion no( 23( Cn Court &*e n order under section /5/ CPc directin t#e $!inti%% to %i!e n undert*in t#t #e "i!! "i! ! $y so&e &ount directed 1y t#e court to t#e de%endnt s d&es i% #e %i!s in t#e suit7 Answer89 A /ourt in e$ercise of inherent power under "ection 121 of the /ode cannot ma3e an interim rder directing the Plaintiff to file an underta3ing that he will pay a sum directed by the /ourt to the & efendant as damages in case he fails in the suit. '()1)02 A>&1(-0"/,
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6uestion no( 24( Is esc!tion in t#e $rice o% t#e !nd round to deny re!ie% o% s$eci%ic $er%or&nce7 E@$!in section 2> o% SR Act( Ans"er( 5scalation in the price of the land cannot, by itself, be a ground for denying relief of specific performance. In J ( Nrendr +( Ri+ier A$rt&ents P Ltd. 0supra, this /ourt interpreted "ection () of the Act and laid down the following propositions8 "ection () of the "pecific *elief Act, 174 provides that the ?urisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so= the discretion of the court is not arbitrary but sound and reasonable, guided by ?udicial principles and capable of correction by a court of appeal. Performance of the contract involving some hardship on the &efendant which he did not foresee while non9performance involving no such hardship on the Plaintiff, is one of the circumstances in which the court may properly e$ercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recogniHed in India.
6uestion no( 25( W#et#er rnt o% re!ie% %or s$eci%ic $er%or&nce "i!! cuse #rds#i$ to 8e%endnt "it#in &enin o% C!use 1 o% Su1-section 2 o% Section 2> o% S$eci%ic Re!ie% Act, /9.37 Ans"er:- The !uestion as to whether the grant of relief for specific performance will cause hardship to the &efendant within the meaning of /lause 0b of sub9section 0( of "ection () of the "pecific *elief Act, 174, being a !uestion of fact, the first appellate court without framing such an issue ought not to have reversed the finding of the trial court while concurring with it on all other issues with regard to the Appellant%s entitlement to relief for specific performance of contract.' Pr*s# C#ndr
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6uestion no( 2( T#e $!e $! e o% 'on%ide $urc#serB Answer89 "ection 170b of the "pecific *elief Act, 174, protects the bona fide purchaser in good faith for value without notice of the original contract. This protection is in the nature of an e$ception tot he general rule.
6uestion no( 2:- W#et#er Court need to rnt t#e order %or s$eci%ic re!ie% on t#e round t#t it is !"%u! to rnt s$eci%ic re!ie%7 Answer89 GThe ?urisdiction to decree specific relief is discretionary and the /ourt can consider various circumstances to decide whether such relief is to be granted. :erely because it is lawful to grant specific relief, the /ourt need not grant the order for specific relief= but this discretion shall not be e$ercised e $ercised in an arbitrary or unreasonable manner. /ertain circumstances have been mentioned in "ection ()0( of the "pecific *elief Act, 174 as to under what circumstances the /ourt shall e$ercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the /ourt may not e$ercise its discretion in favour of the plaintiff. "o also, specific relief may not be granted if the defendant d efendant would be put to undue hardship which he did not foresee at the time of agreement. If it is ine!uitable to grant specific relief, then also the /ourt would desist from granting a decree to the plaintiff.K p laintiff.K 0This para was observed in N!!& Seet M#!*s#&i nd Ors( &1).
6uestion no( 29(:- Wou!d 1re +er&ent in t#e t#e $!int or stte&ent stte&ent &de in t#e e@&intion-in-c#ie% su%%ice to $ro+e redy redy nd "i!!in to $er%or& contrct7 Answer89 In =&1i nd Anr( +( Ni!*nt# 8#ondi1 C#+n 8ed 1y LRs nd Anr( :AC#E"/E)(@2E())2 8 0())2 4 "// (-, it was observed as follows. It is now well settled that the conduct of the parties, with a view to arrive at a finding as to whether the Plaintiff9*espondents were all along and still are ready and willing to perform their part of contract as is mandatorily re!uired under "ection140c of the "pecific *elief Act must be determined having regard to the entire attending circumstances. A bare averment in the plaint or a statement made in the e$amination9in9chief would not suffice. The conduct of the Plaintiff9*espondents must be ?udged having regard to the e ntirety of the pleadings as also the evidences brought on records.
6uestion no( 3>:- Cn rt A!iente o% ;oint %&i!y $ro$erty7 Ans"er:- 5ven if it is to be assumed that the property in !uestion was part of the assets of the co9parcenerary or ?oint family, it is possible for a 3arta, which, the appellant indeed is, to alienate the property for the family necessity. The right of the 3arta of a
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the sale so made, at a later point of time, by pleading that there d id not e$ist any genuine family necessity, warranting the sale of the property.0 ! An;i#
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