The Specific Relief Act, 1963 (SRA) provides for special reliefs in breach of a contractual obligation.
The usual relief or legal remedy for breach of a contractual obligation is to provide monetary compensation or damages.
A contract binds the parties to it either to do or not to do certain things. When there is a breach in performance of the contractual obligation, either of the parties can sue the other.
SRA comes into picture in what circumstances
Special reliefs under SRA come into play when monetary compensation cannot adequately compensate the loss on account of any breach in a contractual obligation.
For example, in a contract when one party has an obligation to return an invaluable thing like an irreplaceable object of a particular kind, failure of which cannot be compensated by any other means, the only possible legal remedy is to return that object and nothing else.
Similarly, in a contract if someone dispossesses another person of his home which is invaluable to him, the only option is to recover the possession of that house.
In such a case, what the party wants is the other one to perform a specific thing – like delivery of any invaluable thing or perform any particular thing that has no other substitute.
What are the reliefs SRA provide?
The specific reliefs SRA provides are:
- recovery of possession of property u/s 5-8,
- specific performance of contracts u/s 10,
- substituted performance of contract u/s 20,
- rectification of instruments u/s 26,
- rescission of contracts u/s 27 – 30,
- cancellation of instruments u/s 31 – 33,
- declaration of status or rights u/s 34 – 35, and
- issue of prohibitory or mandatory injunctions u/s 38 – 42.
Recovery of possession of property u/s 5 – 8
Any person, who has the right of possession of a specific movable or immovable property involved in a contractual relation, can file a summary suit within six months to recover it, as laid down in the Code of Civil Procedure (CPC). A regular suit for possession can be filed within 12 years.
In law, possession is regarded as a good title against anyone who cannot show a better tittle.
Similarly, a person in possession of a movable property, when he is not its owner, has an obligation to deliver it to the possession of the person entitled to it. The court can compel the possessor to return it to the owner, as the CPC provides.
A person who is in possession of an immovable property cannot be dispossessed of it except by exercise of legal course of due process of law even if the possessor holds no title of the property.
The purpose of this provision is to prevent a person from using force to dispossess another one of a property he holds just as a possessor. The court has power to issue orders for enforcing any of the above said rights under the act.
Specific performance of contracts u/s 10
When a party in a contractual obligation files a suit for a specific performance of an obligation, the court shall direct the other party to perform it, after the enforcement of the 2018 amendment to the act.
Specific performance is ordered in the case of a breach of contract when the actual damage caused due to the breach cannot be ascertained in the absence of any standard for quantification of loss, or when monetary compensation cannot be treated as an adequate relief.
Under this section a court can specifically enforce a contract to execute a mortgage, or a security for ensuring a repayment of any loan, or a formal deed of partnership/purchase of a share of the partnership. A suit for the enforcement of a contract for the construction of any building or execution of any other work on land is also possible.
In some cases of specific performance, the plaintiff may claim compensation also in addition, or as a substitute, or both. But when the plaintiff does not claim compensation, the court cannot award compensation.
A suit for specific relief cannot be enforced when compensation for non-performance of a contract in money terms is an adequate relief. If a contract runs into minute details or dependent on the parties in performance in such a way that a court cannot enforce it in material terms, such a suit cannot be enforced for specific performance. If a contract is calculable in nature, that would not come under the specific relief law. If performance of a contract involves continuous duty which a court cannot supervise normally, such a contract also cannot be enforced under the act.
In the past before 2018 amendment to the act in allowing specific performance, the court could exercise sound and reasonable discretion in tune with well-established judicial principles. Nothing was granted by the court just because it is lawful for the court to do so. The comparative advantage of each party in the contract should be kept in mind by the court while taking a decision.
If the petitioner, in addition to specific performance, asks for some reliefs such as possession, partition or refund of earnest money, the court can provide them if it is claimed in the suit.
The court can allow him to amend the suit to add such a claim if it is not prayed for initially.
Substituted performance of contract u/s 20
In case of a breach of contract due to non-performance of a part of a contract by a party, the party who suffers by such a contract shall have the option of substituted performance of the contract through a third party or his own agency and recover the expenses form the party committing the breach.
Substituted performance shall be undertaken only after giving a notice in writing of not less than thirty days.
Rectification of instruments u/s 26
The act allows the court to issue orders for rectification of documents executed in mutual mistake of the parties. But rectification is not possible when mistake is unilateral.
If the instrument does not by mistake express the real intention of the parties, the court can allow and specifically enforce such a rectification of the instrument to express that intention.
Rescission of contracts u/s 27
A person may sue for rescission of voidable and terminable contracts or of contracts unlawful for causes not apparent on its face. This is quite opposite to the relief of specific performance. On rescission of contract the other party is relieved of discharging the contractual obligation.
However, if the plaintiff has ratified the contract or the position of parties cannot be restored to the original position or the third parties have acquired rights, the court cannot rescind the contract.
If the sale or lease of any property is decreed as a specific performance and the purchaser or lessee does not pay the purchase money or the amount, it is possible that the seller or lessor can seek rescission of contract and the court can rescind the contract.
A suit for specific performance can have alternate prayer of rescission. The court while rescinding the contact has to ensure equity to both parties equally.
Cancellation of instruments u/s 31
A person can sue for cancellation of an instrument, including registered ones, when he had an apprehension of any serious injury from it. Then the court can order cancellation of it on merit.
The court can cancel an instrument partially and retain the rest in force when it enforces a spectrum of different rights and obligations. While cancelling, the court can allow compensation or restoration of money already provided so as to ensure equity of justice on both parties.
Issue of declaratory decrees u/s 34
A person can ask the court to declare his right to a property he holds including a contingent right when it is being denied by someone else. Then the court can issue a declaration as to his entitlement in the property. This declaration would prevent some future litigation. This relief is invoked when there is a doubt about one’s right over a property.
The declaration thus made is binding only on the parties to the suit and not on others. A stranger to a contractual obligation cannot seek such declaratory decrees.
Preventive injunctions u/s 36 of SRA
Preventive reliefs are provided by issuing injunctions – either temporary or perpetual. Giving preventive relief is the discretion of the court. It is equivalent to a Writ. The guiding principle behind the prohibitory injunction is that it is issued based on the principle that to ensure exercise of a legal right, there is a need to prohibit its violation. In granting injunction, the court should weigh the gravity of mischief that the breach of contract provides to both the parties and arrive at an equitable decision.
Temporary injunction, under Section 37 of the SRA, will be in force for a specified time, or until further orders, but the perpetual injunction, under section 38 of the SRA, will be in force forever. Temporary injunctions are issued when there is irreparable injury, incomparable mischief, or grave injustice and it can be issued at any stage of the suit.
Perpetual injunctions can be granted only after hearing both parties and upon merit. By issuing injunction, the court prevents the defendant to perform or not to perform an act so as to prevent a breach of contract in assertion of the right of the plaintiff.
Damages in lieu of / in addition u/s 40
In addition to issuing injunction, the court can allow claim for damages or relief for specific performance in addition as prayed for, in genuine cases of irreparable injury under Section 40 of the SRA. The plaintiff can be allowed to amend the petition so as to add a claim for damages at any stage of the proceedings.
The power of the court to grant injunction is an exercise of discretion and not a matter of right of the plaintiff. But that exercise must be based on well settled principles of law.
Injunctions can be refused u/s 41
The Section 41 of the SRA speaks about when injunctions should be refused – such as restraining anybody from using a judicial process or a legislative body etc.
Conclusion
The law purports to ensure some sort of equitable justice in addition to normal remedies when there is an obvious failure in meeting a binding legal obligation under a contract.
The law upholds that one who does equity alone can seek equity and therefore the plaintiff who comes with no clean hands cannot seek any remedy. The plaintiff must be fair, honest, and free from any taint to invoke the provisions under this law.
The law is a bright spot in the body of Indian legal thought in terms of its fairness and right dispensation.
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