Civil Law

Specific Performance of Contracts: When Can You Force a Sale?

Specific performance is an equitable remedy that compels a defaulting party to perform their contractual obligations rather than merely paying damages for breach. In India, the Specific Relief Act, 1963 (SRA) was fundamentally amended in 2018. The most significant change: specific performance of contracts — especially for immovable property — is now the general rule rather than a discretionary remedy. Pre-2018, courts could refuse specific performance and award damages instead; post-2018, courts must decree specific performance unless the contract falls within the specific exceptions in Section 14 SRA.

What Section 10 actually says after 2018: the amendment (Act 18 of 2018, s. 3, w.e.f. 1 October 2018) deleted the old adequacy tests altogether and substituted one sentence: the specific performance of a contract "shall be enforced by the court", subject only to Section 11(2), Section 14 and Section 16. The two familiar limbs that used to open this section, no standard for measuring the damage and money being no adequate relief, are simply no longer in the statute. In an agreement-to-sell suit before a Jodhpur civil court that changes who has to persuade whom: the buyer no longer argues that damages would be a poor substitute for the plot, and the seller must bring his case within one of the three saving provisions or face a decree.

Non-enforceable contracts (Section 14, as substituted in 2018): the list is now four clauses and no more. (a) Where the party suing has already obtained substituted performance under Section 20. (b) A contract whose performance involves a continuous duty that the court cannot supervise. (c) A contract so dependent on the personal qualifications of the parties that the court cannot enforce its material terms. (d) A contract which is in its nature determinable. Note what has gone: "compensation in money is an adequate relief", "contracts running into minute detail" and "terms uncertain or inequitable" are not grounds of refusal any longer. Written statements in this district still plead them in the old form, and the answer is to put the substituted section on record and ask which of its four clauses is being invoked.

Readiness and willingness, and what Section 16(c) now requires: the clause was recast in 2018 so that relief cannot be enforced in favour of a person "who fails to prove" that he has performed, or has always been ready and willing to perform, the essential terms on his part; Explanation (ii) adds that the plaintiff "must prove" it. The provision that decides most agreement-to-sell trials is Explanation (i): where the contract involves payment of money, the buyer is not required to actually tender the balance to the seller or deposit it in court unless the court directs him to. So the seller's standard plea that the buyer "never brought the money" is not by itself an answer. What the buyer has to establish, in the pleadings first and then in the evidence, is capacity and conduct running through the whole period, not on one date.

Limitation, and where substituted performance really sits: the suit is governed by Article 54 of the Limitation Act, 1963, which gives three years from the date fixed for performance or, where no date is fixed, from when the plaintiff has notice that performance has been refused. Substituted performance is Section 20, not Section 20A; Section 20A is a different provision altogether, barring injunctions that would delay an infrastructure project listed in the Schedule. Section 20 requires a written notice of not less than thirty days calling upon the party in breach to perform. Section 20(3) is the trap for a client who has already gone ahead: once he has actually had the contract performed through a third party or his own agency, he cannot afterwards claim specific performance, though Section 20(4) leaves his claim for compensation intact. Section 20C separately directs that a suit under the Act be disposed of within twelve months from service of summons, extendable by not more than six months for reasons recorded in writing.

This article is for informational purposes only and does not constitute legal advice. For specific legal guidance on your matter, please consult a qualified advocate.
Shubham Ojha & Associates
Advocates, Rajasthan High Court, Jodhpur  ·  +91 70230 51275  ·  WhatsApp

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