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 (Sections 9 To 25)
  • Section 10: Specific performance can be enforced for contracts related to the transfer of immovable property (e.g., sale or lease agreements). Contracts that are not specifically enforceable under other provisions of law (e.g., personal service contracts).
  • Section 14: Contracts related to Personal Obligations, personal service contracts (e.g., employment contracts), and contracts that involve personal taste or discretion cannot be enforced through specific performance. The list of contracts that cannot be specifically enforced such as contracts involving personal qualifications or those with uncertain terms.
  • Section 15: A contract for the sale of goods cannot generally be enforced specifically unless the goods are unique. The court may not grant specific performance if the party seeking relief has not performed or offered to perform their part of the contract.
  • Section 20: Courts have discretion in granting specific performance and will consider the following factors
    • Whether the contract is fair and just.
    • Whether the party seeking performance is ready and willing to perform their part of the contract.
    • Whether the contract can be specifically performed, or is it impossible?
  • Section 25: Application of this section applies to awards to which the Arbitration Act doesn’t apply.
• Key Provisions for Injunctions (Sections 36 to 42)
  • Section 36: Injunctions may be granted to prevent the breach of a contract, especially where specific performance is not possible or adequate.
  • Section 37-42: Deals with the types of injunctions (temporary and perpetual) and the conditions for granting them.
• Key Provisions for Rescission and Rectification of Contracts (Sections 26 to 33)
  • Section 27: Allows for the rescission (cancellation) of a contract in case of a breach or misrepresentation.
  • Section 26: Empowers the court to rectify a contract to correct any mistake, misrepresentation, or ambiguity in the contract’s terms.
  • Section 28: Provides a mechanism for rescission of contracts for the sale of immovable property.
• Limitation Period: The Act prescribes a limitation period of three years from the date of the breach of contract for filing a suit for specific performance.
• Application of Specific Relief: 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 is for something that would be difficult to enforce, or where the parties' behavior during the contract shows unclean hands.

Major Amendment

• Section 6: Suit by Person Dispossessed of Immovable Property: In this section, the words "he or any person" are followed by the insertion of the phrase “through whom he has been in possession or any person”. Before the Amendment Act of 2018, Section 6 allowed a person forcibly removed from possession, or someone claiming through them, to file a suit for dispossession. The inclusion of "through whom he has been in possession or any person" broadens the scope, granting the right to file a suit to a person through whom the aggrieved party had had the immovable property.
• Discretionary to Statutory Remedy
  • Section 10: The amendment replaces the original section with a new one, making the enforcement of specific performance mandatory, rather than leaving it to the court’s discretion. Specific performance must comply with the provisions of Section 11(2), Section 14, and Section 16, which outline certain exceptions and conditions under which specific performance may not be enforced.
  • Section 11: The phrase "contract may, in the discretion of the court" is replaced with "contract shall". This change removes the court's discretion, directing courts to enforce specific performance.
  • Section 14: This section has been replaced by a new one, stating that substituted performance, contracts involving continuous duties, those dependent on the personal qualifications of a party, and contracts of a determinable nature cannot be specifically enforced.
• Expert Assistance: The insertion of 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.
• Limited Liability Partnership (LLP): The insertion of clause (fa) in Section 15 states that a newly amalgamated LLP may enforce specific performance of contracts made with one of its component LLPs. Similarly, clause (ca) in Section 19 provides that specific performance may be enforced against a newly amalgamated LLP for contracts made with one of its component LLPs.
• Persons Barred from Relief: Under Section 16, clause (a) was substituted, stating that specific performance cannot be enforced for a person who would not be entitled to compensation for its breach, but now includes individuals who have obtained substituted performance under Section 20.
• Substituted Performance: The amendment introduces a new section to replace Section 20. It removes the court's discretion to grant or deny specific performance. 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 introduces Sections 20A, 20B, and 20C to the Act concerning Infrastructure Projects
  • Section 20A: Makes 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 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 defendant’s summons, extendable by an additional 6 months.
• Section 41: Adds clause (ha), which prohibits injunctions that interfere with the progress or completion of infrastructure projects. A Schedule listing categories of infrastructure projects and sub-sectors is added after Part III.
• Section 21: Power to Award Compensation in Certain Cases. In this section, the words "either in addition to, or in substitution of" have been replaced by "in addition to", promoting specific performance of contracts over compensation as a substitute for it.
• Section 25: This amendment reflects the enactment of the Arbitration and Conciliation Act, 1996, replacing the repealed Arbitration Act, 1940.

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. Simply put, the Act aims to address violations of civil rights and does not extend to penal matters unless the nature of the case demands it.
• Recovery of Immovable Property
  • Section 5: This section 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, provided they can prove ownership or title.
  • Section 6: This section 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 from the date of dispossession.
    • No suit under this section can be brought against the government.
  • Note: If the suit is not filed within the prescribed time under Section 6, the individual can still seek relief under Section 5 by proving ownership more conclusively. Additionally, any court order or decree under Section 6 is not subject to appeal or review, though it can be revised.
• Recovery of Movable Property
  • Section 7: This section 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.
    • Key requirements under Section 7 include
      • The property in question must be movable and capable of being delivered.
      • The claimant must have possession of the property.
      • There may exist a special or temporary right in favor of the claimant.
    • Section 8: This section 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 challenging.
      • 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.
    • 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: Injunctions are court orders requiring a party to refrain from performing certain 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: 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 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?

• Case Assessment and Strategy Development: 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.
• Expertise in Injunctions: 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.  
• Handling Unique or Specialized Scenarios: Help expedite cases in special courts and safeguard project timelines for specialized provisions like Infrastructure Projects. Handle the complexities of enforcing contracts involving newly amalgamated LLPs.
• Compensation and Damages: Ensures compensation is included in pleadings when specific performance isn't feasible. Proper and deemed fit compensation for the representing party in the litigation as an alternative remedy.  
• Substituted Performance: Advise on the procedural requirements, including issuing the mandatory 30-day notice for substituted performance.
• Alternative Dispute Resolution (ADR): If disputes arise in contracts governed by the Arbitration and Conciliation Act, 1996 (as referenced in Section 25), an advocate ensures seamless integration of ADR mechanisms with court proceedings.

Conclusion

Specific Relief Act is a special piece of legislation designed to help in matters related to civil litigation, like breach of contract or non-performance, etc, and many more as mentioned above. Only an expert lawyer can help you in matters related to this act because it requires a lot of legal knowledge and experience. To know more, contact us.