Alanges Law Classes, Maharashtra 1 Judicial Examination Seminar 2021

ALANGES LAW CLASSES, MAHARASHTRA

SPECIFIC PERFORMANCE OF CONTRACT (SEC. 9 TO 25)
According to Section 9 where any relief is claimed under this Chapter in
respect of a contract the person against whom the relief is claimed may plead by
way of defense any ground which is available to him under any law relating to
contracts.
What contracts may be specifically enforced –(Section 10 and 11)
Specific performance consists in the contracting party’s exact fulfillment of
obligation which he has assumed in his doing or omitting the very act which he has
undertaken to do or omit, as per terms of contract.
The remedy of specific performance being an equitable remedy, is at the
discretion of the court. But in the exercise of this discretion, the court is governed
by certain principles laid down in section 10 and 11.
Specific Performance in respect Of Contract – (Section 10)
The specific performance of contract shall be enforced by the court subject
to the provisions of section 11 (2), 14, 16
Note- Write section 11(2), 14, 16
Cases in which specific performance of contract connected w ith trust
enforceable (Section 11) –
1. Specific performance of a contract shall be enforced when the act agreed to
be done is in the performance wholly or partly of a trust.
2. A contract made by trustee in excess of his powers or in breach of trust
cannot be specifically enforced.
 What Contracts cannot be specifically Enforced? (Section 14) –
Specific relief is an equitable relief and is at the discretion of cou rt.
Therefore all contracts cannot be specifically enforced.
The following contracts cannot be specifically enforced –
a. Where a party to the contract has obtained substituted performance of
contract in accordance with the provisions of Section 20.
b. A contract the performance which involves the performance of continuous
duty which the court cannot supervise.
E.g. – ‘A’ contracts to let for 21 years to ‘B’ the right to use such carriage
for certain railway made by ‘A’. Such contract cannot be specifically
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enforced because it involves the performance of continuous duty extending

over 21 years.
c. A contract which is so dependent on the personal qualifications of the
parties that the court cannot enforce specific performance of its material
terms.
E.g. – Order for the specific performance of a contract of singing a song in
a theater for next one month cannot be made because which is so dependent
on the personal qualifications of the parties.
d. A contract which is in its nature determinable.
E.g. – ‘A’ and ‘B’ contract to become partners in a certain business the
contract not specifying the duration of the proposed partnership. It cannot
be specifically enforced because if performed, either ‘A’ or ‘B’ might
dissolve the partnership.
Personal bars to relief.( Section 16)
Specific performance of a contract cannot be enforced in favour of a person—
(a) who has obtained substituted performance of contract under section 20; or
(b) who has become incapable of performing, or violates any essential term of, the contract
that on his part remains to be performed, or acts in fraud of the contract, or willfully
acts at variance with, or in subversion of, the relation intended to be established by the
contract; or
(c) who fails to prove that he has 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 terms of the performance of which has been prevented or waived by the defendant.
Explanation
(i) where a contract involves the payment of money, it is not essential for the
Plaintiff to actually tender to the defendant or to deposit in court any money
except when so directed by the court;
(ii) The Plaintiff must prove performance of, or readiness and willingness to
perform, the contract according to its true construction.
 Specific Performance of the part of contract (Section 12) –
1. The court shall not generally direct the specific performance of a part of a
contract.
2. Where a party to contract is unable to perform the whole of his part of it, but
the part which must be left unperformed bears only a small proportion to the
whole in value and admits of compensation in money, the court may at the suit
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of either party, direct the specific performance of so much of the contract can
be performed and award compensation in money for the deficiency.
3. Where a party to a contract is unable to perform the whole of his part of it and
the part which must be left unperformed either forms –
a) Considerable part of the whole though admitted to compensation in money
or
b) Does not admit of compensation in money.
He is not entitled to obtain a decree for specific performance but the court
may at the suit of the other party direct the party in default to perform specifically
so much of his part of the contract as he can perform.
4. When a part of the contract which taken by itself can and ought to be specifically
performed, stands on separate and independent footing from another part of the
same contract which cannot or ought not to be specifically performed, the court
may direct specific performance of the former part.
EXPLANATION –
A party to a contract shall be deemed to be unable to perform the whole of
his part of it if a portion of its subject matter existing at the date of contract has
ceased to exist at the time if its performance.
E.g. – ‘A’, ‘B’ , ‘C’ and ‘D’ are members of a Joint Hindu Family. ‘C’ and ‘D’ are
minors. ‘A’ and ‘B’ as guardians of ‘C’ and ‘D’ agrees to sell certain land
belonging to the family to ‘P’. ‘P’ sues ‘A’, ‘B’, ‘C’ and ‘D’ for specific
performance of contract. The court finds that the contract was not binding on the
minors i.e. ‘C’ and ‘D’. Thus only ‘A’ and ‘B’ may be directed to convey their
shares in the property to ‘P’ if ‘P’ agrees to pay the price of the property. ‘P’ is
not entitled to a decree directing a transfer of the whole of the property but ‘P’ is
entitled to a decree directing a transfer of the part of the property.
Rights of purchaser or lessee against person with no title or imperfect title (Section
13):-
(1) Where a person contracts to sell or let certain immovable property having no title or
only an imperfect title, the purchaser or lessee, has the following rights:-
(a) If the vendor or lessor has subsequently to the contract acquired any interest in the
property, the purchaser or lessee may compel him to make good the contract out of
such interest;
(b) where the concurrence of other person is necessary for validating the title, and they
are bound to concur at the request of the vendor or lessor, the purchaser or lessee
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may compel him to procure such concurrence, and when a conveyance by other
persons is necessary to validate the title and they are bound to convey at the request
of the vendor or lessor, the purchaser or lessee may compel him to procure such
conveyance;
(c) where the vendor professes to sell unencumbered property, but the property is
mortgaged for an amount not exceeding the purchase money and the vendor has in
fact only a right to redeem it, the purchaser may compel him to redeem the mortgage
and to obtain a valid discharge, and, where necessary, also a conveyance from the
mortgagee;
(d) where the vendor or lessor sues for specific performance of the contract and the suit is
dismissed on the ground of his want of title or imperfect title, the defendant has a right
to a return of his deposit with interest, to his costs of the suit, and to a lien for such
deposit, interest and costs on the interest, of the vendor or lesser in the property which
is the subject-matter of the contract.
(2) The provisions of sub-section (1) shall also apply to contracts for the sale or hire of
movable property.
Contract to sell or let property by one who has no title, not specifically enforceable
(Section 17):-
(1) A contract to sell or let any immovable property cannot be specifically enforced in
favour of a vendor or lessor:-
(a) who, knowing himself not to have any title to the property, has contracted to sell or let
the property;
(b) who, though he entered into the contract believing that he had a good title to the
property, cannot at the time fixed by the parties or by the court for the completion of
the sale or letting, give the purchaser or lessee a title free from reasonable doubt.
(2) The provisions of sub-section (1) shall also apply to contracts for the sale or hire of
movable property.
Non-enforcement except with variation (Section 18):-
Where a Plaintiff seeks specific performance of a contract in writing, to which the
defendant sets up a variation, the Plaintiff cannot obtain the performance sought, except
with the variation so set up, in the following cases:—
(a) whereby fraud, mistake of fact or misrepresentation, the written contract of which
performance is sought is in its terms or effect different from what the parties agreed
to, or does not contain all the terms agreed to between the parties on the basis of
which the defendant entered into the contact;
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(b) where the object of the parties was to produce a certain legal result which the
contract as framed is not calculated to produce;
(c) where the parties have, subsequently to the execution of the contract, varied its
terms.

 Power of court to engage experts( Section 14 A)

(1) In any suit under this Act, where the court considers it necessary to get expert
opinion to assist it on any specific issue involved in the suit, it may engage one or more
experts and direct to report to it on such issue and may secure attendance of the expert
for providing evidence, including production of documents on the issue.

(2) The court may require or direct any person to give relevant information to the expert
or to produce, or to provide access to, any relevant documents, goods or other property
for his inspection.

(3) The opinion or report given by the expert shall form part of the record of the suit;
and the court, or with the permission of the court any of the parties to the suit, may
examine the expert personally in open court on any of the matters referred to him or
mentioned in his opinion or report, or as to his opinion or report, or as to the manner in
which he has made the inspection.

(4) The expert shall be entitled to such fee, cost or expense as the court may fix, which
shall be payable by the parties in such proportion, and at such time, as the court may
direct.

 By Whom Specific Performance Of Contract May Be Enforced (Section 15)

–
Specific performance of a contract may be obtained by –
1. A party to a contract.
2. Their representative in interest or the principal of any party.
3. Where the contract is a settlement of marriage or a compromise of doubtful
rights between members of the same family, any person beneficially entitled
there under.
4. Where the contract has been entered into by a tenant for life in due exercise
of a power, the reminder man.
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5. A Reverse-nor in possession where the agreement is covenant entered into

with his predecessor entitle and the Reversioner is entitled to the benefit of
such covenant.
6. A Reversioner in reminder, where the agreement is a covenant and the
reversioner is entitled to the benefit there of and will sustain material injury
by reason of its breach.
7. When a company has entered into a contract and subsequently becomes
amalgamated with another company, the new company which arises out of
the amalgamation.
8. When a limited liability partnership has entered into a contract and subsequently
becomes amalgamated with another limited liability partnership, the new limited
liability partnership which arises out of the amalgamation.
9. When the promoters of a company have before its incorporation entered into
a contract for the purpose of the company, the company.
Relief against parties and persons claiming under them by subsequent title (Section
19):-
Specific performance of a contract may be enforced against—
(a) either party,
(b) any other person claiming under him by a title arising subsequently to the contract,
except a transferee for value who has paid his money in good faith and without notice
of the original contract (bonafide transferee);
(c) any person claiming under a title which, though prior to the contract and known to the
Plaintiff, might have been displaced by the defendant;
(ca) when a limited liability partnership has entered into a contract and subsequently
becomes amalgamated with another limited liability partnership, the new limited
liability partnership which arises out of the amalgamation.]
(d) when a company has entered into a contract and subsequently becomes amalgamated
with another company, the new company which arises out of the amalgamation;
(e) when the promoters of a company have, before its incorporation, entered into a contract
for the purpose of the company and such contract is warranted by the terms of the
incorporation, the company:
Provided that the company has accepted the contract and communicated such
acceptance to the other party to the contract.
Alanges Law Classes, Maharashtra 7 Judicial Examination Seminar 2021

 Specific Relief – A Discretionary Remedy –( Old Law )

Generally specific relief is an equitable relief and at the discretion of court.
According to Section 20 –
1. The court may properly exercise discretion not to decree specific performance
where the terms of the contract or the conduct of the parties at the time of
entering into the contract or the other circumstances under which the contract
was entered into are such that the contract though not voidable, gives the
Plaintiff an unfair advantage over the defendant.
2. Where the performance of the contract would involve some hardship on the
defendant which he did not foresee whereas its non performance could involve
no such hardship on the Plaintiff the court may refuse specific performance of
it.
E.g. – ‘A’ contracts to sell certain land to ‘B’. The contract is silent as to the land.
No right of way can be shown to exist. In such a cases ‘B’ cannot claim specific
performance of the contract.

 Substituted performance of contract. ( Section 20)

(1) Where the contract is broken due to non-performance of promise by any party, the party
who suffers by such breach shall have the option of substituted performance through a third
party or by his own agency, and, recover the expenses and other costs actually incurred,
spent or suffered by him, from the party committing such breach.
(2) No substituted performance of contract shall be undertaken unless the party who
suffers such breach has given a notice in writing, of not less than thirty days, to the party
in breach calling upon him to perform the contract within such time as specified in the
notice, and on his refusal or failure to do so, he may get the same performed by a third
party or by his own agency.
(3) Where the party suffering breach of contract has got the contract performed through a
third party or by his own agency after giving notice, he shall not be entitled to claim relief
of specific performance against the party in breach.
(4) Nothing in this section shall prevent the party who has suffered breach of contract from
claiming compensation from the party in breach.

 Special provisions for contract relating to infrastructure project (Sec. 20 A)

(1) No injunction shall be granted by a court in a suit under this Act involving a contract
relating to an infrastructure project specified in the Schedule, where granting injunction
would cause impediment or delay in the progress or completion of such infrastructure
project.
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(2) The Central Government may, depending upon the requirement for development of
infrastructure projects, and if it considers necessary or expedient to do so, by notification
in the Official Gazette, amend the Schedule relating to any Category of projects or
Infrastructure Sub-Sectors.
(3) Every notification issued under this Act by the Central Government shall be laid, as
soon as may be after it is issued, before each House of Parliament, while it is in session,
for a total period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, both Houses agree in making any modification
in the notification or both Houses agree that the notification should not be made, the
notification shall thereafter have effect only in such modified form or be of no effect, as
the case may be; so, however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done under that notification.

Preventive Relief Or Injunctions Generally –

According to Section 36, preventive relief is granted at the discretion of the
court by injunction, temporary or perpetual.
Meaning of Injunction –
“An injunction is a specific order of the court forbidding the commission of
a wrong threatened or the continuance of a wrongful course of action already
started or in some cases, when it is called mandatory injunction, commanding
active restitution of the former state of things. Thus an injunction is a judicial
process whereby a party is ordered to restrain from doing or to do a particular act
or thing.”
E.g. – ‘A’ threatens to cut crop of ‘B’ then ‘B’ may ask for injunction to restrain
‘A’ from cutting the crop.
Kinds of Injunctions –
In respect of nature of act enjoined injunction may be divided into two kinds
–
1. Prohibitory Injunction –
A prohibitory injunction forbids a defendant to do a wrongful act and thus
put a stop to something in progress. It is a negative injunction according the
defendant not to do something.
2. Mandatory Injunction (Section 39)–
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A mandatory injunction prohibits the defendant to permit the continuance of

a wrongful state of things by ordering to do that which has b een done or to do a
particular act to restore things to their former condition. Thus it is a positive
injunction directing the defendant to do something.
In respect of period for which it is to be enjoyed, injunction may be divided
into two kinds (Section 37) –
1. Permanent or Perpetual Injunction –
A perpetual injunction is a final decree granted after the trial, restraining the
defendant from committing or continuing the act complained of for all time. It is
granted forever i.e. permanently.
2. Temporary Injunction –
It means an injunction for a temporary period i.e. during the pendency of the
suit and before the determination of the issues between th e parties.
Principles governing Grant of Temporary Injunction (Order 39 Rule 1 & 2 of
CPC) –
The Plaintiff should satisfy the court following things before the court uses
its discretion regarding grant of T.I. –
1. The Plaintiff must establish a prima facie case.
2. The Plaintiff must show that irreparable loss or damage will result him if the
injunction is not granted.
3. The balance of convenience is in favour of the Plaintiff.
4. The object of T.I. should be for the preservation of subject matter in status quo
until the question can be finally disposed off.
5. There is no other remedy open to the Plaintiff by which he could protect himself
from the consequences of the apprehended injury.
6. The Plaintiff should satisfy the maxims of equity –
a) He who seeks equity must do equity.
b) He who comes into equity, must come with clean hands.
7. If the legal right is not disputed the Plaintiff must be able to show that the act
complained of is in fact a violation of the right will result in such a violation.
8. Delay or laches on the part of the Plaintiff will debar him of the relief of T.I.
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Need for Temporary Injunction to create third party interest –

Generally Temporary Injunction is granted in a suit for specific performance
of contract or during lis pendance under T P Act, to avoid further complications &
the injunction is necessary to prevent a multiplicity of judicial proceedings.
Example:-A files a suit for specific performance of sale of land against B on the
basis of agreement to sale. Generally T I is granted restraining B from creating
third party interest. If T I is refused Plaintiff will suffer irreparable loss and it
creates complications in suit. Therefore in such circumstances T I is necessary to
prevent a multiplicity of judicial proceedings.
When Court Can Grant Perpetual Injunction (Section 38) –
A perpetual injunction may at the discretion of the court be granted to
prevent breach of an obligation existing in favour of the applicant such an
obligation may either arise out of a contract or otherwise.
In case such an obligation arises out of contract, the court shall be guided by
the rules and provisions contained in this Act regarding grant of specific
performance of the contract.
E.g. – ‘A’ lets certain land to ‘B’ and ‘B’ contracts not to dig the earth. ‘A’ may
sue for an injunction to restrain ‘B’ from digging in violation of his contract.
When the defendant invades, threatens to invades the Plaintiff right to, or
enjoyment of property, the court may grant a perpetual injunction in the following
cases.
1. Where the defendant is a trustee of the property for the Plaintiff.
2. Where there exists no standard for ascertaining the actual damage caused or
likely to be caused by the invasion.
3. Where the invasion is such that pecuniary compensation would not afford
adequate relief.
4. When it is probable that pecuniary compensation cannot be awarded for the
invasion.
5. Where, the injunction is necessary to prevent a multiplicity of judicial
proceedings.

Damages in lieu of, or in addition to, injunction (Section 40):-

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(1) The Plaintiff in a suit for perpetual injunction under section 38, or mandatory injunction
under section 39, may claim damages either in addition to, or in substitution for, such
injunction and the court may, if it thinks fit, award such damages.
(2) No relief for damages shall be granted under this section unless the Plaintiff has claimed
such relief in his plaint:
Provided that where no such damages have been claimed in the plaint, the court shall, at
any stage of the proceedings, allow the Plaintiff to amend the plaint on such terms as may
be just for including such claim.
(3) The dismissal of a suit to prevent the breach of an obligation existing in favour of the
Plaintiff shall bar his right to sue for damages for such breach.

When Perpetual Injunction Cannot Be granted? (Section 41)

A P.I. cannot be granted in following cases –
a) To restrain any person from prosecuting a judicial proceeding.
b) To restrain any person from instituting any judicial proceeding.
c) To restrain person from applying any legislative body.
d) To restrain from instituting or prosecuting any proceeding in any criminal
matter.
e) To prevent the breach of contract, the performance of which would not be
specifically enforced.
f) To prevent on the ground of Nuisance an act which is reasonably believed
that it will not be a Nuisance.
g) To prevent a continuing breach in which the applicant has acquiesced.
h) When equally efficacious relief can be obtained by any other mode of
proceedings.
ha) If it would impede or delay the progress or completion of any
infrastructure project.
i) When the conduct of the applicant or his agents has been such as to disentitle
to assistance to the Court.
j) Where the Plaintiff has no personal interest in the subject matter of the suit.
Injunction to perform negative agreement (Section 42):-
Where a contract comprises an affirmative agreement to do a certain act, coupled
with a negative agreement, express or implied, not to do a certain act, the circumstance that
the court is unable to compel specific performance of the affirmative agreement shall not
preclude it from granting an injunction to perform the negative agreement: Provided that
the Plaintiff has not failed to perform the contract so far as it is binding on him.
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THE SCHEDULE (SUMMARY)

Category of projects and infrastructure sub-sectors:-
The Schedule contains Category of projects and infrastructure sub-sectors like:-
1. Transport like road and bridges, ports, shipyards, airports, railways etc.
2. Energy like electricity generation, transmission, distribution etc.
3. Water and sanitation like solid waste management, water supply etc.
4. Communication like telecommunication, towers etc.
5. Social and commercial infrastructure like education institution, sports, hospitals,
tourism etc.