Specific Relief Amendment Bill, 2018: Importance of Discretionary Power of the Court with Relation to Specific Performance

Specific Relief Amendment Bill, 2018: Importance of Discretionary Power of the Court with Relation to Specific Performance

[Jennifer Maria D’Silva]

The author is a 4th year BA LLB (Hons) student of School of law, Christ University, Bengaluru

Introduction:

The Specific Relief Amendment Bill, 2018[1] (henceforth referred to as the bill) which was passed by the Lok Sabha in 2018 had recommended several changes to the Specific Relief Act, 1963 (henceforth referred to as the Act). Some of the major changes that was seen in the Amendment Bill was the changes in certain provisions and words that gave the courts discretionary powers, the substitute performance, special courts, experts and so on. The main focus here would be on the provisions relating to the courts discretionary powers and the previous decisions of the courts regarding importance of the same. Though there are provisions mentioning the grounds under which specific performance under the Act could be denied but the discretion still lies in the court as to whether to award the same of not.

Provisions to be changed in the Amendment Bill with regard to Specific Performance:-

Under the Act specific performance of contracts is seen under Section 11 which states that ‘specific performance of a contract may be enforced according to the courts discretion’ is to be amended by the Bill and changed to ‘specific performance shall be enforced’, taking away the discretionary power of the court. Section 14, which lists the contracts that cannot be specifically enforced is also amended. The main provisions that were removed were: contracts where compensation is adequate (Section 14(1) (a))  – to be replaced by ‘where a party has receive substitute performance’. Substitute performance is when the party whose contract has not been performed can get the said performance done by a third party. Section 20 of the Act is also to be amended by the Bill, the present provision talks about discretion as to decreeing specific performance, this will be changed to provisions regarding substitute performance and the manner in which substitute performance could be done by the aggrieved party. Under Section 21 of the act compensation could be given ‘in substitution or in addition to specific performance’, the same is changed in the bill to ‘in addition to specific performance’ ensuring that specific performance be given and compensation would not be an alternative.

Importance of Court Discretion in Specific performance cases

Before compensation was the only means of redressal for breach of contract and it was noticed that many people were not satisfied with the monetary remedy they received and so specific performance was considered for those that preferred their contract be completed than receiving monetary compensation. Though at first it was not preferred as the courts did not have the power to enforce such orders but when the court were given the power for the same more people started claiming specific performance. The specific performance was first seen in the Court of Chancery where this was given in cases of property disputes. In the Indian scenario the Specific Relief Act was first enacted in the year 1877 on the lines of the New York Civil Code, 1867. This legislation had a lot to clarify and the same was replaced by the current Act.[2]

The rule for a long time was considered to be compensation and specific relief the exception, when no other relief is available[3]. Specific Relief was only given in cases where the compensation could not be determined or the compensation would not suffice for the damages[4]. When giving specific performance the provisions were not solely considered, but the court was guided by the principles of equity[5].Specific performance was only granted by the courts when exercising its discretionary power because specific performance isn’t considered a matter of right[6]. It is because of the discretionary powers that the courts have found certain circumstances where specific performance could be substituted with compensation and cases where specific performance was considered better.

It was considered by the courts that if a commodity is easily available then compensation would be adequate as the same commodity could be bought by the claiming party.[7] But in cases where the commodity is not easily available then specific performance could be granted.[8] It is also seen that the courts consider the interests of the parties when awarding specific performance, mainly such a relief is given when there is readiness and willingness to do by the party.[9] Hence specific performance is given on reasonable conditions and not for the advantage of the claimant and disadvantage of the respondent. Things like permission of an authority for specific performance would not bar the same[10].Also there were times when the disadvantage of the party was considered due to escalation of prices, yet the court held that mere escalation of prices would not amount to refusal of specific performance.[11]

There are times when time is the essence of the contract and non completion of the same would make the claimant not want the performance done. In such cases if claim cannot be given after a certain time,[12] the damages are given instead of specific performance. The intentions of the claimant are very important when considering the decision of the courts. The court looks into the circumstances of both parties as well in order to determine whether the claims were just or not. Parties are not allowed to benefit from their own negligence and to seek relief as a result from it.[13] These are some of the circumstances where the court gives proper thought before granting specific performance.

Conclusion:

It is seen that the specific performance should be in the discretion of the court for various reasons mainly the circumstances stated above. The circumstances under which each party approach the court has to be taken into consideration when dealing with specific performance. The importance of the court giving specific performance in certain cases is to ensure that the best relief is given for both the parties and to ensure that proper compensation is received. The court looks into certain factors that are not mentioned in the provisions of the Specific Relief Act. Hence the interpretation by the courts in certain matters when relating to specific performance is very important when dealing with certain cases mainly pertaining to the interest and the intentions of both the parties.

[1] THE SPECIFIC RELIEF (AMENDMENT) BILL, 2018

http://164.100.47.4/BillsTexts/LSBillTexts/PassedLoksabha/248-C_2018_LS_Eng.pdf

[2] Pollock and Mulla: Indian Contract and Specific Relief Acts, 13th Edition, Volume II, Page: 2397-2399

[3] Syed Dastagir vs T.R. Gopalakrishnasetty 1999 6 SCC 337

[4] Y K Gopala Rao v D R Lakshminarayan and ors 1999(3) Kar JJ

[5]  Saukhi Sah v Mahamaya Prasad Singh AIR 1934 Pat 518

[6] Prasad Varma v Amarjit Singh AIR 1982 Pat 219

[7] Verral v Great Yarmouth Borough Council (1980) 1 All ER 839 (CA)

[8] UP State Electricity Board v Ram Barai Prasad AIR 1985 ALL 26

[9] Syed Dasatagir v T R Gopalakrishna 1999 6 SCC 337

[10] Ranjibhai v Narotham Das AIR 1986 SC 1912

[11] K Venkoji Rao v M Abdul Khuddar Kureshi AIR 1991 Kant 119

[12] Patel v Ali (1984) 1 All ER 978

[13] K Venkattasubbareddy v K Venkatesh Warhu and ors AIR 1971 AP 279