The article is written by Sneha Mandal of Heritage Law College, University of Calcutta, B.A.LLB, 4TH YEAR during her internship with LeDroit India
INTRODUCTION
In today fast moving world, the legal aspect plays a crucial role in solving contractual dianutes. The court steps in through intimation from either of the parties to the contract, who feels aggrieved of their rights. The court resolves the matter through a fast-track mode of law in the Specific Relief. Under this, the court grants the remedy of specific performance of a certain obligation to be performed by the party in default.
Specific performance is an “equitable remedy. It is a court order telling a person to fulfil their exact promise, which the person promised at the time of the contract. When a contract is broken, the legal system usually offers two different types of remedies. “Compelling performance” is the second remedy. Usually, courts prefer giving money (Damages). Specific Performance is the exception, not the rule
An individual or a body of individual er a company enters into a contract on a daily bases out of which a few are successfully executed and a few of them go disputed. Any individual or body of individuals of a company desires to avoid the loss of time during the resolution of the dispute. So as soon as there is an contractual dispute arises, the move to court for a fast track remedy by opting for the option of specific performance under the Specific Relief Act
In India, the specific performance is guaranteed under a statutory act, the Specific Relief Act 1961. The contractual matters in India are governed by the Indian Contract Act, 1872. Any contract between two or more parties has to fulfil the obligations of both parties within the limitations of the Indian Contract Act, beyond which a party cannot move. Under the Indian Contract Act, the court has the power to compel the performance of the contract in a specific manner in specific circumstances and in specific duration.
Pomeroy defines.-
Specific performance consists in the contracting party’s exact fulfilment of the obligation which he has assumed in his doing or omitting the very act which he has undertaken to do or omit.
Halsbury defines.-
“Specific performance” is an equitable relief given by the court in cases of breach of contract in the form of a judgment that the defendant do actually perform the contract according to its terms and stipulations.
A contract, according to the Indian Contract Act, is an agreement enforceable by law. From every contract there immediately and directly results an obligation on each of the contracting parties towards the other to perform such of the terms of the contract as he has undertaken to perform.
Ameer Mohd v. Barkat Ali, MANU/RH/0442/2002: AIR 2002 Raj 406: If the person on whom this obligation rests fails to discharge it, this results in morality to the other party at his election either to insist on the actual performance of the contract or to obtain satisfaction for the non-performance of it.
In the Specific Relief Act 1963, Section 9 – 25 gives provision for the specific performance of a contract, which includes provisions related to which contracts can be specifically enforced or contracts which cannot be specifically enforced or persons for or against whom contracts may be specifically enforced.
The Indian Contract Act 1872 also provides various provisions related to the specific performance of a contract. In Various cases, the court compels the specific performances.
When Courts Compel Performance
A court may decree specific performance in the following circumstances:
- Uniqueness or Irreplaceability of the subject matter:
Contracts relating to immovable property, unique goods, or assets having special value to the claimant are classic cases where damages are considered inadequate.
- Existence of a Valid and Enforceable Contract
The contract must be lawful, certain, supported by consideration, and capable of performance. Vague or incomplete agreements are not enforceable by specific performance. - Readiness and Willingness of the Plaintiff
The claimant must plead and prove continuous readiness and willingness to perform their contractual obligations throughout the subsistence of the contract. - Absence of Adequate Monetary Remedy
If compensation in money can sufficiently redress the injury, courts ordinarily decline specific performance. - Equitable Conduct of Parties
Since the remedy is equitable, relief may be denied if the plaintiff has acted unfairly, fraudulently, or in breach of equitable principles.
When a Court will not Compel Performance (Exceptions)
Courts generally refuse to grant specific performance in the following scenarios:
- Contracts for Personal Services: Contracts dependent on the personal qualifications, skill or volition of a party (such as an employment contract, an artist painting a portrait, or a singer performing at an event) are not specifically enforceable, as forcing performance is impractical and infringes on personal liberty.
- Contracts Requiring Continuous Court Supervision: Courts will not give any orders in matters or contracts requiring continuous court supervision, such as long-term building or supervision contracts.
- Determinable Contracts: Contracts that can be terminated at will by either party are generally not specifically enforced.
- Unfair or Unconscionable Contracts: If in any contract the court feels that the Plaintiff gains an unfair advantage, or he has entered into a contract through fraudulent means or circumstances. Then the court may not enforce specific performance.
- Substituted Performance Already Obtained: If the aggrieved party has arranged the performance of the contract through a third party, then they are not entitled to specific performance of a contract.
Judicial Interpretation of the Specific Performance: An Analysis of Case Law
Judicial interpretation of specific performance under the Indian Contract Act plays a vital role in determining the scope and limitations of this legal remedy. Over the years, Indian courts have interpreted various provisions of the Act, establishing a substantial body of case law. This jurisprudence clarifies the principles and considerations that guide the granting of specific performance.
In the case of P. Ramanatha Aiyar v. P.S. Ramanathan Chettiar, the Supreme Court held that the grant of specific performance is not automatic and that the court must judiciously exercise its discretion. The court observed that specific performance is a remedy that is granted in exceptional circumstances where no other remedy is adequate, and where the breach of contract has caused irreparable harm to the aggrieved party.
In the case of Smt. Champaben v. Narayanbhai Jethabhai Patel, the Supreme Court held that the court should take into account the equities of the case when granting specific performance. The court observed that specific performance is an equitable remedy and that the court should ensure that it is granted in a manner that is fair and just to both parties. Another important principle that has emerged from case law is that specific performance is not a remedy that is available for every type of contract. The court will consider the nature of the contract and the possibility of performance before granting specific performance.
Shift in Indian Law on Specific Performance (Post-2018 Amendment)
The legal framework governing specific performance in India has undergone a major transformation, primarily due to the 2018 amendment to the Specific Relief Act. Historically, the remedy of specific performance was discretionary, with courts often considering whether monetary damages would provide sufficient relief.
However, the 2018 amendment introduced a fundamental change, establishing specific performance as the general rule, rather than an exceptional remedy, subject only to a few statutory exceptions. This legislative overhaul signals an intent to strengthen contract enforcement and increase certainty, especially in commercial dealings. This shift is particularly crucial for real estate, infrastructure, and other large commercial projects where a failure to perform or a significant delay can lead to irreparable losses that cannot be adequately compensated.
Key Reforms Introduced by the Specific Relief (Amendment) Act, 2018
The Specific Relief (Amendment) Act of 2018 brought about significant transformations to contract enforcement in India, signalling a major policy shift.
Key changes include:
- Mandatory Specific Performance: The Act significantly limited judicial discretion, making the specific enforcement of contracts the norm rather than an exception, unless explicitly prohibited by law.
- Introduction of Substituted Performance: An aggrieved party is now entitled to have the contract performed by a third party and subsequently recover the costs incurred from the defaulting party.
- Streamlining Infrastructure Projects: Injunctions are restricted for certain public infrastructure projects to prevent delays that could impede public interest.
- Removal of a Precondition: The requirement for the plaintiff to prove that monetary compensation (damages) would be an inadequate remedy before specific performance could be granted has been eliminated.
These amendments pivot Indian contract law from a framework based on equitable relief toward one prioritising performance-based enforcement, thereby aligning it with contemporary global commercial standards.
The Enduring Significance of Specific Performance in Modern Commerce
Specific performance has become an essential mechanism for upholding contractual discipline and fostering economic stability in the current commercial landscape. This remedy provides a crucial element of predictability, effectively deterring opportunistic breaches driven by the pursuit of unjust enrichment or shifts in market conditions.
Through a combination of thoughtful judicial interpretation, clear statutory frameworks, and developing legal precedents, specific performance remains a vital tool. It serves to safeguard the integrity of contractual agreements while ensuring a fair and equitable balance in the application of justice.
The Essential Requirement for Specific Performance: Readiness and Willingness
A fundamental prerequisite for a plaintiff to secure the equitable remedy of specific performance is the continuous demonstration of their readiness and willingness to fulfil their contractual obligations. Judicial precedents repeatedly underscore that this essential element must be both clearly pleaded and substantiated by the plaintiff’s conduct and surrounding circumstances.
As established by the Supreme Court in the landmark case of N.P. Thirugnanam v. Dr R. Jagan Mohan Rao (1995), a simple declaration of readiness and willingness is insufficient. Instead, a plaintiff’s actions must unequivocally prove a genuine commitment to performing the contract. Any evidence of delay, inconsistent behaviour, or insufficient financial capability may be grounds for a court to deny the plaintiff this specific equitable relief.
Criticisms and Debates surrounding the Doctrine of Specific Performance in India.
The doctrine of specific performances is a legal remedy available in India, which allows a court to order a party to perform their contractual obligations. One of the main criticisms of the Doctrine of Specific Performance in India is that it is often seen as a lengthy and cumbersome process. This is because specific performance is not an automatic remedy and requires the aggrieved party to file a lawsuit in court. Additionally, the court must be satisfied that specific performance is the appropriate remedy in the circumstances of the case.
There are also debates surrounding the scope of specific performance in India. Some argue that the scope of specific performance is too narrow and should be expanded to include other types of contracts, such as employment contracts. Others argue that the scope of specific performance is too broad and that it should only be available in exceptional circumstances, such as where the subject matter of the contract is unique or irreplaceable.
CONCLUSION
Specific performance occupies a distinctive and significant place in Indian contract law as an equitable and discretionary remedy aimed at ensuring the actual fulfilment of contractual obligations rather than mere monetary compensation. As discussed, while damages remain the general rule for breach of contract, specific performance serves as an exception, invoked primarily in circumstances where compensation in money is inadequate, impracticable, or incapable of restoring the aggrieved party to their original position. The statutory framework under the Specific Relief Act, 1963, read with the Indian Contract Act, 1872, provides a structured yet flexible mechanism through which courts balance legal rights with equitable considerations.
Judicial interpretation has consistently reinforced that the grant of specific performance is not a matter of right but one of judicial discretion, to be exercised on well-settled principles such as readiness and willingness of the plaintiff, fairness of the transaction, and the feasibility of enforcement. Courts have also clearly delineated the boundaries of this remedy by excluding contracts involving personal service, determinable agreements, and those requiring continuous supervision, thereby preserving individual liberty and judicial practicality.
Despite criticisms relating to procedural delays and debates on the scope of applicability, the doctrine of specific performance continues to play a vital role in protecting contractual sanctity, particularly in cases involving immovable property or unique subject matter. Ultimately, the remedy reflects a careful synthesis of statutory mandate and equitable justice, ensuring that contractual obligations are enforced not mechanically, but in a manner that is fair, reasonable, and consonant with the broader objectives of justice.
