SPECIFIC RELIEF ACT: AN OVERVIEW

Authors:

Riya Mathur, Durham University England

Sameera Naiyar, Jamia Millia Islamia University

Ishita Mishra, Presidency University, Bengaluru

Jyotsana Singh, CNLU Patna

Editor: Masoom Israney, Middlesex University Dubai



Introduction

The Specific Relief Act,1963, (hereinafter referred to as "the Act") is an Act of the Parliament of India which provides solutions for people whose common or authoritative rights have been disregarded. It superseded a previous Act of 1877.

The Act sets out the remedies accessible to parties whose legally binding or social rights have been violated. The Act becomes an integral factor when real damage for non-execution of a legally binding contract cannot be estimated or when monetary compensation is not sufficient. The party affected can move to the court for guiding the other party to satisfy the commitments or necessities under the agreement.

The Act accommodates a specific performance of an agreement without fiscal alleviation, making it an equitable remedy. Until now, the courts have had an optional force to enable the mitigation of specific performance or not. This is used to expand the vulnerability of agreements and authoritative reliefs.

As a component of the ‘Simplicity of Doing Business’ drive of the Government of India and expanded challenges in the presentation and execution of agreement dependent on framework advancements, open private associations and other public undertakings, including tremendous speculations, the substantial requirement for the modification in the current enactment emerged.


The main purpose of the specific relief act

The main purpose of the act has been vested in the nomenclature of the statute itself, i.e., SPECIFIC RELIEF. This provides a basic understanding of the act that ‘specific relief’ is a legal statute which deals with providing reliefs and recoveries to a person whose legal right has been injured. Section 4 of the act deals with how the act grants relief for the enforcement of individual rights and not for imposing penal laws.[1] The law prescribes that in an event where the actual damage for not performing the contract cannot be measured, or monetary compensation is not adequate, one party can ask the court to direct the other party to fulfil the requirements of the contract. This is called the specific performance of a contract.[2] This extends to contracts for infrastructure, like the construction of housing societies or sale and purchase of land. It is a positive remedy.

A court may grant the following remedies under the provisions of the Specific Relief Act:

· Recovery of possession of property: Getting an entire property back instead of the usual monetary compensation or damages is the gift of equity to common law.

· Specific performance of contracts: Section 10 includes in what condition-specific performance of the contract could also be enforceable; performance usually depends upon the discretion of the court, but there are certain conditions for performance mentioned namely:

1. When the damages or loss occurred, due to the non-performance of the contract cannot be ascertained.

2. When money as compensation is not an adequate relief, due to the non-performance of the contact.

Until the contrary is proved, it's presumed by the court that (i) the breach of contract of immovable property cannot be adequately fulfilled by money (ii) the breach of contract of movable property are often relieved except within the cases of (a) where the property is not a standard article of commerce, (b) where the property is kept by the defendant as a trustee for the property.

· Rectification of instruments: 'Rectification of instrument,' means correcting the errors, with instrument referring to a contract. The rectification of instruments under the Specific Relief Act is a fair or impartial remedy that is granted by the court when the facts are not according to the intention of the parties.

· Rescission of contracts: In contract law, rescission has been defined as the unmaking of a contract between parties. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract (the status -quo ante)

· Cancellation of Instruments: An equitable remedy by which a court relieves both parties to a legal instrument of their obligations thereunder due to fraud, duress, or other grounds.[3]

· Declaratory decrees: A declaratory decree is an order declaring the right of the plaintiff. A declaratory judgment is a judgment that states that the rights of the parties in an already complicated transaction.

· Injunction: Injunctions are a selected order under which a party must abstain from performing any act. Injunctions under the Specific Relief Act 1963 could also be divided into differing types, namely temporary, perpetual, and mandatory. The injunctions are mentioned from section 36 to 44.[4]


OVERVIEW OF THE PARTS OF THE SPECIFIC RELIEF ACT 1963

The Specific Relief Act of 1963 has been divided into three parts and further divided into eight chapters. Initially, this Act comprised of forty-four sections and the Schedule. However, Section 43 & Section 44 have been repealed. To better understand this important legislative enactment, it is crucial to deal with each part, chapter, and section individually.

Part I is Preliminary, consisting of Sections 1 to 4, which deal with the applicability, definitions, and savings clauses. This Act comes into picture only for the purposes of civil rights and not for penal laws.

Part II deals with specific relief, which has been divided into six chapters (Sections 5 to 35). Some of the critical provisions of this part are as follows:

§ If the person is dispossessed without his consent from the immovable property within six months, he has the right to sue (Section 6)

§ Specific Immovable Property over which the party has right to possession can be recovered (Section 5)

§ Delivery of movable property to the person who has the right to immediate possession (Section 8)

§ The specific performance of the contract shall be enforced by the court. Two categories of the contract have been mentioned in Chapter II, i.e., contracts that can be specifically enforced and contracts that cannot be specifically enforced.

o Specific performance was agreed to be done in the performance of trust by a trustee (Section 11)

o In case, the person having no title or insufficient title enters into a contract to sell or transfer any immovable property, the other party, i.e., purchaser or lessee has the right to specific performance (Section 13)

o And where the person knowingly enters into a contract to transfer the property with no or imperfect title, the court shall not order the specific Performance (Section 17)

o In the case where the part of the contract which is unperformed is small in proportion, and its non-performance could be monetarily compensated, the court could order the specific performance of the remaining part of the contract with compensation for the former part. And where the unperformed part forms a considerable part of the contract, the court should not direct the specific performance of the rest of the part even if it could be compensated (Section 12)

o Where the performance of the contract involves the performance of the continuous duty which the court could not supervise, where the contract is dependent upon the personal qualifications of the parties, and so on, are the examples of the contracts that could be specifically enforced (Section 14)

§ In a lawsuit for specific performance, the plaintiff may even claim compensation for the breach of contract (Section 21)

§ Where the claim for specific performance of a contract has been dismissed, the plaintiff also loses the right to sue for breach of contract (Section 24)

§ Where the contract is unlawful or is terminable or voidable, it could be rescinded (Section 27)

Part III deals with preventive relief. And this part consists of two chapters, i.e., Chapters 7 & 8 (Sections 36 to 42). This part provides for the grant of temporary and perpetual injunctions. However, there is a provision mentioned for not granting the injunction as well, which enhances the power of the court.

§ Where the contract both has negative and affirmative agreements, the court can grant an injunction to perform the negative agreements (Section 42)


Landmark Case under this Act

A significant case under this Act is N.P. Thirugnanam v Dr. R. Jagan Mohan Rao.

Facts of the case

N.P. Thirugnanam was the plaintiff (died December 1994) who entered into a contract on behalf of his mother, sisters, and brothers, with the respondent- Dr. R. Jagan Mohan Rao. It was an agreement of sale for the alienation of house property for a total amount of Rs. 2,30,000, for which an advance of Rs. 10,000 was paid. He gained possession of the property by becoming a tenant until the execution of the sale deed. A sum of Rs. 1650 per month was agreed upon as rent. [5]

He filed a suit for specific performance against the respondent claiming they had evaded executing the sale deed. In turn, the respondents claimed that they were more than willing to participate and perform the actions necessary to conclude the contract, and it was the plaintiff who had failed to pay a further advance of Rs. 20,000 as per the contract.

Upon considering the evidence, the High Court ruled that it was the plaintiff who was not ready or willing to fulfil his part of the contract. After this, an appeal was made, and the judgement of the Division Bench held the same.

Grounds for the appeal

The plaintiff filed for a Special Leave Petition stating the following reasons:

1. It was argued that the decree of dismissal against the dead plaintiff was a nullity. The fact was that the arguments of the appeal had already been heard, and the judgement reversed by the date of the plaintiff's death. A memorandum was filed informing about the death under Order 22 Rule 11-A of the Code of Civil Procedure, and a request was made to grant time in order to make the petitioners legal representatives of the deceased to further fight the case. However, this request was rejected. Under Rule 6 of Order 22, there can be no abatement because of the death of any party between the conclusion of the hearing and pronouncement of the judgement. Therefore, the claim that the judgement and the decree of the appellate court is a nullity did not hold any ground.

2. Secondly, it was claimed that the plaintiff was ready and willing to perform his part of the contract. For this, reliance was placed by the counsel on the testimony of PW-2, who claimed that he was willing and prepared to lend a sum of Rs. 2,00,000 to the plaintiff on the foot of a promissory note. It was argued that it is not important whether the plaintiff had the money on hand but whether he had the capacity to raise funds. This was dismissed by evidence since the plaintiff had failed to deposit money or furnish a bank guarantee. It was also found that the plaintiff was dabbling in real estate business and had a house on a hire purchase agreement with the T.N. Housing Board.

3. PW-2, although agreed to be willing to advance a sum of Rs. 2,00,000, did not have money, and had to hypothecate his property to obtain it.

The Final Judgement

After taking everything into consideration, both the trial judge and the Division Bench decided that the plaintiff was not ready or willing to perform his part of the contract.

It is settled law that the remedy for specific performance is an equitable remedy and is offered at the discretion of the court, which must be exercised according to settled principles of law and not arbitrarily as adumbrated under s.20 of the Specific Relief Act 1963. Under s.20, the court is not bound to grant the relief just because there was a valid agreement of sale. 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 needs to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to prove the same, he will lose.

Hence, the Special Leave Petition was dismissed.[6]


Conclusion

The Specific Relief Act 1963 features a set of reliefs given to the parties to claim. They need different reliefs and enforcing rules which specialise in providing enough compensation to all or anyone. This legal statute's main aim is that nobody shall accept the damages and losses. Additionally, people who have caused such a situation must be in a position to recover all unlawful benefits received by them. This act focuses on providing justice to all or any and is not inequitable, i.e., favouring one party.

There has been a recent amendment in the Specific Relief Act. The Specific Relief (Amendment) Bill, 2017, was introduced in the Parliament on 22nd December 2017. It was passed in the Lok Sabha on 15th March 2018 and the Rajya Sabha on 23rd July 2018. It received the assent of the President on 1st August 2018. There have been some changes in the civil dispute resolution practice area through the Specific Relief (Amendment) Act, 2018, which have made some important amendments to the Specific Relief Act, 1963. And amongst such amendments, the addition of Section- 14 A (appointment of experts), 20-A (provision for no injunction in case of infrastructure projects), 20-B (establishment of Special Courts), 20-C (mechanism for expeditious disposal of suits) and a schedule are a vital part, for both, the present legal regal requirements as well as the present-day political shift in the Indian Government and its policies. The ultimate aim of the amendment act is to enhance India's stand in the ‘ease of doing business’ ranking. Therefore, the Act has to be amended timely to keep up with the developing country and which is why it is always subject to alteration. Secondly, civil laws are developing at a faster pace every day, and in order to fulfil the legal requirements, the timely advancement of law is extremely essential for the development of the nation altogether.

[1] Law Finder Live <https://www.lawfinderlive.com/bts4/specific.htm?AspxAutoDetectCookieSupport=1 > accessed 24 August 2020 [2] Shreeja Sen “What is the Specific Relief Act, and why does the govt want to change it?" (Live Mint, 23 June 2016) <https://www.livemint.com/Politics/uNG9gJVysAolCNjYNW9XlI/What-is-the-Specific-Relief-Act-and-why-does-the-govt-want-t.html> accessed 24 August 2020 [3] Law Dictionary “cancellation of instruments” <https://law.academic.ru/15149/cancellation_of_an_instrument> accessed 24 august 2020 [4] THE SPECIFIC RELIEF ACT, 1963 [5] https://blog.ipleaders.in/introduction-to-the-specific-relief-act-1963/> accessed 24 august 2020 [6] '2020 ALL SCR 638, C.S. VENKATESH, A.S.C. MURTHY (D) BY LRS. & ORS.' (NearLaw.com, 2020) <https://nearlaw.com/PDF/SC/2020/2020-ALL-SCR-638.html> accessed 25 August 2020.

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