Specific Relief Act

Legal Framework of the Specific Relief Act in India 

• The Specific Relief Act, 1963: It is a crucial piece of legislation in India that governs the enforcement of specific performance of contracts, along with other reliefs related to the restoration of rights. It is designed to provide remedies for the breach of certain types of contracts and situations where monetary compensation would be inadequate.
• Key Provisions for Specific Performance of Contracts (Section 9 to 25)
  • Contracts not Enforceable:: According to Section 17(a) contract to sell or to lease (whether property being movable or immovable) in favour of a seller or lessor cannot be enforced where (a) such seller or lessor have knowledge that they have no title over such property, (b) If such seller or lessor believes to have a good title over such property, enters into contract but is unable to transfer the title of the property to the respective purchaser or lessee at a time specified by the parties.
  • Variations in Contract: Section 18 applies only to written contracts, and it states that where the defendant claims that the contract produced before the court by the plaintiff for the specific performance of that contract is different from that which was mutually agreed or misses any significant term which was the basis of defendant signing for the contract or has variations which were agreed upon later can be specifically enforced only with certain variations.
  • Compensation: According to Section 21, a plaintiff can seek compensation in his plaint in addition to specific performance in a matter of specific performance of a contract, and court may award compensation where it finds to do so (with or without specific performance of contract), such amount of compensation shall be in accordance with Section 73 of the Indian Contract Act, 1872.
  • Additional Reliefs: Section 22 applies to immovable property. It states that where the plaintiff seeks specific performance of the contract for transfer of property, he can also claim additionally in his plaint for possession or partition, or any other reliefs, including refund of earnest money, e.g., A and B had entered into a contract where A is going to sell his house to B. B is going to pay ₹20 Lacs. At the time of making the contract, B paid an earnest money of ₹5000. If A refuses to perform the contract, and B approaches the court for specific performance. If the court disallows the relief of specific performance, he can still seek the relief of refund of the earnest money. Section 22(2) outlines that the court will not grant relief unless specifically claimed by the plaintiff, and Section 22(3) states that the plaintiff can claim any number of reliefs to which he is entitled.
• Key Provisions for Injunctions (Section 36 to 42)
  • Preventive Relief: Under Section 36, preventive relief in the form of Injunctions may be granted to prevent the breach of a contract, especially where specific performance is not possible or adequate.
  • Injunctions: Section 37 to 42 deal with the types of injunctions (temporary, perpetual, and mandatory) and the conditions for granting them.
• Key Provisions for Rescission of Contracts and Rectification of Instruments (Section 26 to 30)
  • Rescission: Section 27(1) allows for the rescission (cancellation) of a contract in cases of voidable or terminable contracts, or unlawful contracts, but the defendant is more at fault. Section 27(2) specifies cases where it may be refused, i.e., (a) contracts already ratified by the plaintiff, (b) change of circumstance, (c) third party acquires right, (d) not severable. Section 28 provides a mechanism for rescission of contracts for the sale or lease of immovable property if the purchaser or lessee fails to comply with a decree for specific performance.
  • Rectification: Section 26 empowers the court to rectify a contract and other written instruments if it does not express the parties' genuine intention concerning the instrument, either because of fraud or a mutual mistake committed by the parties.
• Limitation Period: The Specific Relief Act, 1963, does not prescribe a limitation period for suits. Article 54 in the second part of the schedule under the Limitation Act, 1963, prescribes the limitation period for suits for specific performance of a contract, i.e., three years from the date fixed for specific performance or, if no fixed date, the date of notice of refusal for performance.
• Application: Specific performance is available when monetary compensation is not adequate, for instance, in cases of real estate transactions, unique goods, or when one party seeks to prevent the other from breaching an agreement. Courts may refuse specific performance if the contract pertains to something that would be difficult to enforce or where the plaintiff's behavior during the contract indicates that they have unclean hands.

Significant Amendment

• Amendment of 2018
  • Substituted Section 10 by mandating the enforcement of specific performance. Such enforcement must comply with the provisions of Section 11(2), 14, and 16, which outline certain exceptions and conditions under which specific performance may not be enforced. A Schedule is inserted regarding the category of projects and infrastructure sub-sectors. The Amendment strengthened the primary objectives of the Act, specifically the performance of contracts.  
  • The amendment introduced a new Section to replace section 20. The aggrieved party may now seek substituted performance from a third party or agency and recover the costs of substituted performance from the breaching party. (This can only be done after serving a minimum 30-day notice to the defaulting party. Substituted performance does not apply if the contract specifies otherwise.)
  • The amendment introduced Section 20A, 20B, and 20C to the Act concerning Infrastructure Projects.
    
    • Section 20A provides special provisions for contracts related to infrastructure projects, prohibiting civil courts from granting injunctions that would impede or delay such projects.
    • Section 20B provides for the designation of one or more civil courts as Special Courts to handle suits related to infrastructure projects.
    • Section 20C mandates the expeditious disposal of suits, requiring them to be resolved within 12 months from the date of the defendant's summons, with an additional 6 months for extension.
  • Section 14A allows courts to engage one or more experts to provide opinions on specific issues in a suit. The expert's opinion becomes part of the court record, and parties have the right to cross-examine the expert in open court.
  • The insertion of clause (fa) under Section 15 states that a newly amalgamated LLP may enforce specific performance of contracts made with one of its component LLPs. Similarly, clause (ca) under Section 19 provides that specific performance may be enforced against a newly amalgamated LLP for contracts made with one of its component LLPs.

Remedies in Case of Violations

• Specific Relief: Section 4 of the Specific Relief Act clarifies that the Act is designed to provide remedies for the enforcement of individual civil rights rather than for the imposition of penal laws. Relief under this Act focuses on protecting substantive civil rights, and the nature of such rights must be established. 
• Recovery of Immovable Property
  • Section 5 provides remedies for individuals dispossessed of immovable property. If a person has been wrongfully deprived of their property, they may recover it by initiating proceedings under the Code of Civil Procedure, 1908, by establishing ownership or tenancy.
  • Section 6 allows a person unlawfully dispossessed of immovable property to file a suit for its recovery. Key conditions for invoking Section 6 include:
    • The claimant must have been in possession of the property.
    • The dispossession must have been unlawful and without the claimant's consent.
    • The claim must be filed within six months of the date of dispossession.
    • No suit under this section can be brought against the government.
  • If the suit is not filed within the prescribed time under Section 6, the individual can still seek relief under Section 5 by providing more conclusive proof of ownership. Additionally, any court order or decree under Section 6 is not subject to appeal or review, although it may be revised.
• Recovery of Movable Property
  • Section 7 governs the recovery of movable property and outlines the procedure to be followed under the Code of Civil Procedure, 1908. It further specifies:
    • A trustee may bring a suit concerning property held for a beneficiary.
    • A person with a special right over the property can also initiate legal action.
    • Requirements under Section 7 include:
      • The property in question must be movable and capable of being delivered.
      • The claimant must be entitled to possess the property.
      • There may exist a special or temporary right in favor of the claimant.
  • Section 8 compels the delivery of specific movable property under certain circumstances, including:
    • When the property is held in trust for someone entitled to immediate possession.
    • When monetary compensation is inadequate.
    • Determining the actual damages caused by deprivation is a challenging task.
    • When the property has been wrongfully transferred from the rightful claimant.
• Enforcement of Awards
  • Section 21 outlines the authority to grant compensation in certain cases, allowing courts to award monetary relief to the aggrieved party. These scenarios include the following:
    • In situations where a lawsuit is filed for the specific performance of a contract due to its breach, the aggrieved party may also seek compensation in addition to the performance.
    • If the court determines that specific performance cannot be granted but recognizes a breach of contract, it may direct the payment of compensation to the aggrieved party if it was claimed in the plaint.
    • When the court finds that granting specific performance alone would not provide adequate relief, it may order additional compensation in monetary terms.
    • However, compensation cannot be awarded if the relief in the form of monetary compensation is not explicitly claimed in the plaint.
• Preventive Relief: Preventive relief refers to a legal remedy designed to restrain a party from engaging in specific acts. It involves an order from the court directing the party to refrain from performing certain actions for which relief is sought. This form of relief is often granted in the form of injunctions.
  • Injunctions are court orders that require a party to refrain from performing specific actions. Under the Specific Relief Act, 1963, injunctions are categorized into three types: temporary, perpetual, and mandatory. The provisions for injunctions are outlined in Sections 36 to 42 of the Act.
  • Perpetual injunctions, also known as permanent injunctions, are issued after a thorough examination of the case on its merits. They are granted to protect the plaintiff's rights when the defendant's actions infringe those rights. Such injunctions prevent the breach of an obligation and safeguard the plaintiff's interests. A perpetual injunction may be granted as per Section 38 (3) in the following circumstances:
    • The defendant holds a trustee position over the property in question.
    • The harm caused to the plaintiff cannot be quantified in monetary terms.
    • Monetary compensation is deemed insufficient as a remedy.
    • The injunction is necessary to avoid multiple legal proceedings.

How Can Seasoned Advocates Help You?

• Legal Advice: Excels at assessing the merits of a case under specific performance, rescission, and rectification. Ensure that the client fulfills obligations under the "readiness and willingness" principle and that the evidence aligns with the statutory framework to maximize the chances of success. Advise on the procedural requirements, including issuing the mandatory 30-day notice for substituted performance.
• Representation: Can obtain temporary or perpetual injunctions to prevent breaches. Draft and argue for injunctions efficiently to protect the clients' interests. Efficient representation to secure preventive relief when damages are inadequate. Ensuring proper framing of claims to meet the nuances of temporary, perpetual, and mandatory injunctions is crucial. Assist in expediting cases in specialized courts and safeguard project timelines for provisions such as infrastructure projects. Handle the complexities of enforcing contracts involving newly amalgamated LLPs.
• Claims: Ensures compensation is included in pleadings when specific performance isn't feasible—advocate for proper and just compensation for the representing party in the litigation as an alternative remedy. 
• Alternative Dispute Resolution (ADR): If disputes arise in contracts governed by the Arbitration and Conciliation Act, 1996 (as referenced in section 25 of the SRA, 1963), an advocate ensures seamless integration of ADR mechanisms with court proceedings. 

Conclusion

The Specific Relief Act is a special piece of legislation designed to assist in matters related to civil litigation, such as breach of contract or non-performance, among other issues mentioned above. Civil Courts handle matters related to this Act, and seeking guidance is essential, as it requires a lot of legal knowledge and experience to navigate them efficiently. To know more, contact us.