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SPECIFIC PERFORMANCE OF CONTRACTS (SECTIONS 9 to 25) :- Specific performance of a contract means performing the contract as per the terms

and conditions agreed to between the parties to it, rather than payment of damages or compensation for the non-performance of the contract. According to Haisbury, it is an equitable relief, given by the Court in cases of breach of contract, in the form of judgment that the defendant do actually perform the contract according to its terms and stipulations. Section 9 entitles a person, against whom suit for specific performance has been brought, to plead any of the defences available to him under the law of contracts. Section 9 reads as under 9. Defences respecting suits for relief based on contract.Except as otherwise provided herein, 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 defence any ground which is available to him under any law relating to contract. According to Section 2(h) Indian Contract Act, 1872, a contract is an agreement enforceable by law. If the agreement is not enforceable by law, a suit for specific performance of the same cannot lie. A valid contract has to satisfy the requirements of Section-10 of the Contract Act. There has to be an agreement. It has to be between the parties competent to contract. There must be free consent of the parties; It should be with lawful consideration and lawful object, and should not have been declared to be void. The effect of Section 10 of the Contract Act read with Section 9 of the Specific Relief Act is to bar the enforcement of all void, unlawful and imperfect agreements. Thus, when there is merely moral, religious or social obligation rather than a legal obligation, specific enforcement of the same cannot be claimed. The bar to a suit for specific performance would cover an agreement by a minor, as the same is void. Similarly, if the agreement Is unlawful, for Instance, it is an agreement to smuggle goods, or the agreement is without consideration, or the agreement is vague and ambiguous, or it is by way of wager. or it is in restraint of trade, or in absolute restraint of legal proceedings, specific performance of the same cannot be claimed as such agreements are void. In such agreements the defence, which the defendant can plead, is that since the agreement is not enforceable by law under the law of contract, specific performance of the same cannot be granted under the Specific Relief Act. Section 9 excludes void agreements and not voidable contracts. According to Section 2(i), Indian Contract Act, a voidable contract Is one which is enforceable by law at the option of one or more of the parties to the contract. It is a valid contract until avoided. If such a contact has not yet been avoided by the party entitled to do, it Is enforceable under the law of contract, and can be specifically enforced under the Specific Relief Act. Cases in which specific performance of contract enforceable.(Section 10). According to Section 10 specific performance of a contract may be enforced by the Court at its discretion in certain situations. Section 10 reads as follows -(a) When there exists no standard for ascertaining actual damage caused by the non-performance of the act agreed to be done; or

(b) When the act agreed to be done is such that that compensation in money for its nonperformance would not afford adequate relief. Explanation :- Unless and until the contrary is proved, the court shall presume. (i) That the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and (ii) That the breach of a contract to transfer movable property can be so relieved except in the following cases: (a) Where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods, which are not easily obtainable in the market; (b) Where the property is held by the defendant as the agent or trustee of the plaintiff. On the breach of contract by one party the other party has two alternatives : (i) To bring an action for breach of contract (ii) To sue .for the specific performance of the contract. In an action for specific performance he can require actual execution of the contract in terms of the agreement between the parties. In an action for specific performance the existence of validity concluded contract has got to be proved. If there is no concluded contract specific performance shall not be granted. Section 58 of the Sale of Goods Act, 1930 is an example of application of specific performance. The provision reads as 58. Specific performance object to the provisions of Chapter II of the Specific Relief Act, 1877, in any suit for breach of contract to deliver specific or ascertained goods, the Court may, if It thinks fit, on the application of the plaintiff, by Its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The decree may be unconditional or upon such terms and conditions as to damages, payment of the price or otherwise, as the Court may deem just, and the application of the plaintiff may be made at any time before the decree. The two situations when a contract may be specifically enforced are :(1) When there exists no standard for ascertaining actual damage.Specific performance, of a contract is permitted when there exists no standard of ascertaining actual damage caused by the breach of contract.9 If the damage caused by the breach of contract is ascertainable, the remedy available Is a claim for damages rather than specific performance of the contract. For instance, if the article sold is such that It Is available in the market, the loss is ascertainable on the basis of the difference between the contract price and the market price on the date of breach of contract. In such a situation specific performance is not permitted. On the other hand, for example, A agrees to buy and B agrees to sell, a picture by a dead painter and two rare
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China vases. A may compel B specifically to perform this contract; for, there is no standard for ascertaining the actual damage which would be caused by its non-performance. Union Of India (Uoi) And Ors. vs Prem Kumar Lihala AIR 2005 DHC 10. In order to appreciate the rival contentions, it has to be kept in mind that the contract was for supply of goods. Supply of goods would be governed by the Sale of Goods Act, 1930. Section 58 of the same reads as under: "Special performance--Subject to the provisions of Chapter II of the Specific Relief Act, 1877, in any suit for breach of contract to deliver specific or ascertained goods, the Court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The decree may be the unconditional, or upon such terms and conditions as to damages, payment of the price or otherwise, as the Court may deem just, and the application of the plaintiff may be made at any time before the decree." 11. The revival of the contract would amount to decree for specific performance of the contract. Chapter II of the Specific Relief Act, 1963 deals with specific performance of contracts. Section 10 deals with goods in which specific performance of contracts is enforceable and reads as under: "Cases in which specific performance of contract enforceable.--Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced-(a) when there exists no standard for ascertaining actual damage caused by the non-performance of the act agreed to be done; or (b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief. Explanation.--Unless and until the contrary is proved, the Court shall presume-(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and (ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases-(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market; (b) where the property is held by the defendant as the agent or trustee of the plaintiff."
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12. Reading of Section 10 of the Specific Relief Act shows that in case of breach of a contract to transfer immovable property, specific performance can be enforced only where the property is not an ordinary article of commerce or is not easily obtainable in the market. If damages as an alternative remedy are available, specific performance could not be granted in respect of movable property. 13. A reading of Section 58 of the Sale of Goods Act, 1930 also shows that specific performance for breach of contract to deliver specific or ascertained goods can be granted, but the same is subject to the provisions of Chapter II of the Specific Relief Act, 1877. In view of the various pronouncements on this aspect, it cannot be doubted that unless the goods are not easily available in the market or have some special value like antiques, the specific performance of goods ought not to be granted. In such cases damages are an adequate remedy. 14. The Courts of equity only exercise their jurisdiction when the chattel in question is of some peculiar value, but would not interfere where the goods are articles of normal commerce, readily available in the market as in such cases the action for damages would be an adequate remedy. In ordinary commercial contract, the condition of money not being an adequate compensation or the difficulty in assessment of damages, would not be conditions which would exist. (2) When money compensation would not provide adequate relief.Specific performance of a contract is also permitted when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief. Compensation in money would not provide adequate relief Is presumed in the following cases : (i) When the breach of contract relates to transfer of immovable property (ii) when it is movable property and the article transacted Is not an ordinary article of commerce, or Is of special value or interest to the plaintiff, or consists of goods which are not easily available in the market and (iii) where the property is held by the defendant as agent or trustee of the plaintiff. Union Of India (Uoi) And Ors. vs Prem Kumar Lihala on 6 September, 2005 :- The dispute originates from an order placed by the petitioner on the respondent vide letter dated 9.4.1996 for supply of 4.33 lakh grooved rubber sole plates. The contract was to be governed by the Indian Railways Standard (IRS) Conditions and Special Conditions of Contract. This order was accepted by the respondent unconditionally vide letter dated 13.4.96 which resulted in a formal contract between the parties dated 4.6.96. The tender terms and conditions contained Clause No. 2900 being the arbitration clause. 3. The petitioner stated that respondent was required to make the supplies by 12.12.97, but failed to supply despite final opportunity being given on account of inability of the respondent to set up the manufacturing facilities duly certified by the Research, Designs and Standards Organisation. The deficiencies pointed out by the petitioner could not be removed. The petitioner terminated the contract vide letter dated 16.11.99 as the respondent had failed to supply even the initial samples.
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There were some further communications between the parties, but despite the request of the respondent the petitioner did not consider it feasible to revive the contract. The formal request was sent by the respondent on 10.6.2003 in this behalf, which was rejected by the petitioners vide letter dated 8.7.2003. The respondent-firm thus invoked the arbitration clause vide legal notice dated 24.8.2003. The petitioners appointed the Sole Arbitrator in terms of the arbitration clause to decide the dispute and differences between the parties with regard to termination of the contract without any liability on either side being development contract on account of the failure of the respondent to supply material within the said period. 10. In order to appreciate the rival contentions, it has to be kept in mind that the contract was for supply of goods. Supply of goods would be governed by the Sale of Goods Act, 1930. Section 58 of the same reads as under: "Special performance--Subject to the provisions of Chapter II of the Specific Relief Act, 1877, in any suit for breach of contract to deliver specific or ascertained goods, the Court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The decree may be the unconditional, or upon such terms and conditions as to damages, payment of the price or otherwise, as the Court may deem just, and the application of the plaintiff may be made at any time before the decree." 11. The revival of the contract would amount to decree for specific performance of the contract. Chapter II of the Specific Relief Act, 1963 deals with specific performance of contracts. Section 10 deals with goods in which specific performance of contracts is enforceable and reads as under: "Cases in which specific performance of contract enforceable.--Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the Court, be enforced-(a) when there exists no standard for ascertaining actual damage caused by the non-performance of the act agreed to be done; or (b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief. Explanation.--Unless and until the contrary is proved, the Court shall presume-(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and (ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases--

(a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market; (b) where the property is held by the defendant as the agent or trustee of the plaintiff." 12. Reading of Section 10 of the Specific Relief Act shows that in case of breach of a contract to transfer immovable property, specific performance can be enforced only where the property is not an ordinary article of commerce or is not easily obtainable in the market. If damages as an alternative remedy are available, specific performance could not be granted in respect of movable property. 13. A reading of Section 58 of the Sale of Goods Act, 1930 also shows that specific performance for breach of contract to deliver specific or ascertained goods can be granted, but the same is subject to the provisions of Chapter II of the Specific Relief Act, 1877. In view of the various pronouncements on this aspect, it cannot be doubted that unless the goods are not easily available in the market or have some special value like antiques, the specific performance of goods ought not to be granted. In such cases damages are an adequate remedy. 14. The Courts of equity only exercise their jurisdiction when the chattel in question is of some peculiar value, but would not interfere where the goods are articles of normal commerce, readily available in the market as in such cases the action for damages would be an adequate remedy. In ordinary commercial contract, the condition of money not being an adequate compensation or the difficulty in assessment of damages, would not be conditions which would exist. 15. It has also been held that a seller is not entitled to enforce specific performance of contract under Section 58 of the Sale of Goods Act because it deals with a case of only a buyer or a specific goods in respect of a contract to deliver specific and ascertained goods. In Maheshwari and Co. v. Corporation of Calcutta, , it was held so. In the present case it is the seller seeking specific performance. 18. In view of the aforesaid, learned Counsel for the petitioner is right in this contention that the award is both contrary to the provisions of law and did not form subject matter of adjudication before the Arbitrator. The Arbitrator thus fell into an error in restoring the contract. In fact no findings have even been given on this issue as to whether the contract was rightly or wrongly terminated. It was this issue which was referred to be considered by the Arbitrator. Part Performance of contract :- Section 12. Specific performance of part of contract (1) Except as otherwise hereinafter provided in this section the court shall not direct the specific performance of a part of a contract. (2) Where a party to a contract is unable to perform the whole of his part of it. But the part which must be left unperformed by only a small proportion to the whole in value and admits of compensation in money, the court may, at the suit of either party, direct the specific performance
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of so much of the contract as 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(a) Forms a considerable part of the whole, though admitting of 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 other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party(i) In a case falling under clause (a), pays, or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and a case filling under clause (b), pays or had paid the consideration for the whole of the contract without any abatement; and (ii) In either caste, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant. (4) When a part of a contract which, taken by itself, call and ought to be specifically performed, stands on a 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 :- For the purposes of this section, a party to a contract shall he deemed to be unable to perform the whole of his part of it if a portion of its subject latter existing at the date of the contract has ceased to exist at the time of its performance. General Rule [Section 12(1):- Section 12(1) contains the general rule that the court shall not direct specific performance of a part of the contract except in those cases which are mentioned in clauses (2), (3) and 4 af Section 12. Exceptions [Section 12(2), (3), (4)] :- In the following exceptional cases the court may grant specific performance of part of contract (1) The Court may direct specific performance of contract (i) where a party is unable to perform the whole of his part of the contract. A party shall be deemed to be unable to perform the whole of his part of it. if a portion of its subject7

matter existing at the date of the contract has ceased to exist at the time of its performance. (ii) the part which is left unperformed bears only a small proportion to the whole in value and (iii)admits of compensation in money. Where the unperformed portion of contract is equal to or more than the other portion, or where unperformed part is not capable of being compensated in money, Section 12(2) shall not be applicable, and the Court shall not direct specific performance in such a situation. (2) Section 12(3) contains another exception where a court may grant decree for performance of the part of the contract. Section 12(3) deals with the following contingencies (a) Where unperformed part bears large proportion to the whole contract and the unperformed part admits of compensation in money and the party seeking part performance from the other party pays or has paid the agreed consideration for the part of the contract which has been, performed (b) where unperformed part does not admit of compensation in money and the party seeking part performance has paid consideration for the whole of the contract without any abatement and in either of the above case? The plaintiff relinquishes all his claims either regarding any further performance or claiming compensation. In the above mentioned contingencies the court may grant specific performance of part of the contract. Option to accept part performance :- It has been held by the Supreme Court in Surjit Kaur v. Naurata Singh, AIR 2000 SC 2927 that a party can elect to accept part performance of the contract/agreement at any stage of litigation. Merely filing a suit for specific performance of contract and not averring that the party was willing to accept part performance of the contract does not preclude the party seeking performance to accept the performance of the contract in part. However, if a party once categorically elects not to accept part performance, it cannot later resale or get out of the election made by him. (3) Section 12(4) contemplates another situation where specific performance of a part of the contract may be granted by the court. The provision pertains to a situation where the part which can be enforced is quite independent of the other part which cannot be specifically enforced. The provision is as follows : Where a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a 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.
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P.C. Varghese vs Devaki Amma Balambika Devi & Ors on 7 October, 2005 The First Respondent herein is the wife of K.R. Narayana Pillai (Respondent No.5). Respondent Nos. 2 and 3 are daughters of the First and the Fifth Respondent herein. The Fourth Respondent was their minor daughter. 15 cents out of the land in question measuring 19 cents were obtained by Respondent Nos.1 to 3 by reason of a partition under deed No.1598 of 1973. As Respondent No.4 was born subsequent to the execution of the said deed of partition, she became entitled to a onefourth share in 15 cents which comes to 3.75 cents. The balance 4 cents absolutely belonged to the First Respondent on the death of one Narayana Pillai and Devaki Amma. Respondent Nos.1 to 3 and 5 agreed to sell the said property to the Appellant herein, wherefor an agreement of sale was executed on 13.09.1980 in his favour. In terms of the said agreement, a sum of Rs.5,05,000/- was fixed as total consideration; and a sum of Rs.10,000/- was received by the Respondents by way of advance. The agreement contained a condition that the Respondents would obtain requisite permission from the appropriate court for sale of the minor's share therein. Such permission was to be obtained within a period of three months which was also the period fixed for performance of the terms of the agreement. However, an extension thereof had been granted. The Appellant made several requests to the Respondents to perform their part of contract. According to him, the Respondents had deliberately been delaying the disposal of the application for obtaining the aforementioned permission. A letter was also sent to the Fifth Respondent requesting him to get the sale deed executed at least with regard to the shares of Respondent Nos.1 to 3 on receipt of proportionate amount of consideration and to execute the sale deed relating to the minor's share after such permission was obtained. The Respondents, however, did not perform their part of contract. The Appellant deposited a sum of Rs.5,00,000/- in his name and in the names of his wife and children in fixed deposit No.28517-57-81 dated 03.08.1981 in the Federal Bank Limited. He also served a registered notice through his advocate asking the Respondents to execute the sale deed, in respect whereto a reply was sent by the Respondents stating that the sale deed can be executed only after obtaining the permission from the Court. The Appellant filed the suit against the Respondent Nos. 1 to 5 herein, inter alia, for a decree of specific performance of contract in respect of the said agreement of sale in respect of the entire 19 cents. He also made an alternative prayer, as per para 23C praying that if specific performance could not be granted in regard to entire extent, he may be allowed to take a sale deed in respect of the share of Defendants 1 to 3 and may be allowed to recover possession of that much property from defendants through court. It is, however, not in dispute that during the pendency of the suit, the application filed for obtaining permission for sale of minor's share was dismissed. The Appellant thereafter filed an application for amendment of plaint praying for substitution of prayer 'C'. The application for amendment was allowed and amended prayer 'C' reads as under : "C- If for any reason this Hon'ble Court finds prayers A & B cannot be allowed as such, the plaintiff may be allowed to take a sale deed of the share of defendants 1 to 3 in the plaint schedule property, through court, in the name of his wife and children as mentioned above. And for that purpose pass a preliminary decree to divide the aforesaid 15 cents in the schedule property
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separating the 3/4th share of the defendants 1 to 3 from the 1/4th share of the minor 4th defendant by metes and bounds and allowing plaintiff to recover possession of the four cents belonging to the first defendant and 3/4th share of defendants 1 to 3 in the 15 cents on payment by the plaintiff of the consideration agreed in the agreement for sale less the proportionate value of his minor's share." The learned Trial Judge in view of the rival contentions of the parties framed as many as seven issues. Issue Nos. 5 and 7 read as under : " (5) Is not a plaintiff entitled to specific performance of the agreement of sale dated 13.09.1980 ? (7) Whether the Specific Performance of the part of the agreement is allowable ?" The suit filed by the Appellant herein was decreed by the Trial Judge in the following terms : "In the result, a preliminary decree for partition is passed on the following terms : (1) The 3/4th share of the property of the defendants 1 to 3 shall be partitioned from the 15 cents of property which belongs to defendants 1 to 4 as also the 4 cents absolutely belongs to the first defendant. (2) The plaintiff is allowed to apply for passing a Final Decree for effecting the partition of 3/4th share in the 15 cents of property. (3) The plaintiff is also allowed to apply for issue of a Commission to effect partition of share of defendants 1 to 3 in 15 cents of property and to ascertain the value of 1/4th share of the minor 4th defendant in the 15 cents of property. (4) The defendants 1 to 3 are directed to execute the sale deed for their 3/4th share in 15 cents plus 4 cents when they will be allotted their shares in the final decree on receiving the sale consideration minus the value of the share of the minor 4th defendant which was ascertained in the Final Decree Proceedings within two months from the date of passing the Final Decree. (5) The plaintiff is directed to deposit the sale consideration as per the terms of the contract deducting the proportionate value of the minor's share within two months from the date of the final decree. (6) In case defendants 1 to 3 failed to execute the sale deed for the property allotted to them in the final decree within two months from the date of passing final decree after paying the proportionate sale consideration.

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(7) The plaintiff is allowed to get the document executed for 19 cents of property as scheduled in the plaint as stated above through court and plaintiff is also entitled to get delivery of that property from the defendant in execution of this decree. (8) In the circumstances of the case both parties are directed to suffer their respective costs." The Original Defendant Nos.4 and 5 did not prefer any appeal against the said judgment and decree. The Respondent Nos.1 to 3 herein only preferred an appeal. A cross-appeal was also filed by the Plaintiff- Appellant. The High Court allowed the appeal preferred by Respondent Nos.1 to 3 . Section 12 of the Specific Relief Act, the learned counsel would contend, enables the court to grant a decree in respect of a part of contract in a case where party to a contract is unable to perform the whole of his part of it. Mr. Mathew would urge that the findings of the High Court cannot be sustained in view of the fact that out of 19 cents only 3.75 cents came to the share of the minor and, thus, the provision of Section 12(3) of the Specific Relief Act was clearly attracted. In terms of the said agreement, the Respondents agreed : (i) to satisfy the purchaser about their title in respect of the property and also clear any encumbrance certificate, if found on verification; (ii) ascertain the extent of the property by measuring it and if there was any deficiency, agree for deduction of proportionate consideration; (iii) put up a wall separating the boundary at the entrance, (iv)change the names and enter new names in revenue records; (v) comply with all formalities which they were required to do under the law; (vi) obtain guardian and ward certificate, clearance certificate, permission of Town Planning Authority etc.; (vii) secure the amount of consideration payable to the minor in terms of the guardian and ward certificate which was to be obtained on application filed by Respondent No.5; (viii) receive the balance consideration and on the date specified by the Appellant, appear before the Sub-Registrar and register the deed of sale. It was further stipulated that in the event, the Respondents failed to register the sale deed in terms of the said agreement, the Appellant would be entitled to deposit in the court the balance consideration after adjusting the amount of advance; file a suit and obtain a decree for specific performance. Sub-section (3) of Section 12 of the Specific Relief Act, 1963 (for short "the Act") was enacted with a view to meet such eventualities when the whole of the contract cannot be performed, by the vendor. It reads as under :
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(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-(a) forms a considerable part of the whole, though admitting of 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, if the other party (i) in a case falling under clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and a case falling under clause (b), [pays or had paid] the consideration for the whole of the contract without any abatement; and (ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant." The said provision has been enacted for the benefit of the purchaser and, thus, cannot operate to his detriment. We may notice that under the old Specific Relief Act, the Plaintiff was not only required to relinquish his claim of specific contract as regard that part of the contract which cannot be performed but also was required to pay the entire amount of consideration; whereas in terms of Section 12(3) of the new Specific Relief Act, 1963 he is now required to pay the amount of consideration proportionately. In Sardar Singh vs Krishna Devi (Smt.) and Another [(1994) 4 SCC 18], it was held :The house being divisible and the appellant being not a consenting party to the contract, equity and justice demand partial enforcement of the contract, instead of refusing specific performance in its entirety, which would meet the ends of justice" In Rachakonda Narayana vs. Ponthala Parvathamma and Another [(2001) 8 SCC 173], Khare, J., the learned Chief Justice as he then was, observed : "Thus, the ingredients which would attract specific performance of the part of the contract, are: (i) if a party to an agreement is unable to perform a part of the contract, he is to be treated as defaulting party to that extent, and (ii) the other party to an agreement must, in a suit for such specific performance, either pay or has paid the whole of the agreed amount, for that part of the contract which is capable of being performed by the defaulting party and also relinquish his claim in respect of the other part of the
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contract which the defaulting party is not capable to perform and relinquishes the claim of compensation in respect of loss sustained by him. If such ingredients are satisfied, the discretionary relief of specific performance is ordinarily granted unless there is delay or laches or any other disability on the part of the other party." In Surinder Singh vs. Kapoor Singh (Dead) through LRs. and Others [(2005) 5 SCC 1`42], (wherein Dharmadhikari, J. was a member) a three- Judge Bench of this Court on a reference made on the purported conflict in Kartar Singh vs. Harjinder Singh [(1990) 3 SCC 517] and Rachakonda Narayana (supra), opined : "In this case, the Division Bench of the High Court passed a decree of specific performance of contract relying on or on the basis of a decision of this Court in Kartar Singh.". Strong reliance, however, has been placed by Mr. Reddy on HPA International etc. vs. Bhagwandas Fatehchand Daswani amd Others etc. [(2004) 6 SCC 537]. Therein, Dharmadhikari, J. in the facts and circumstances of the case held : "70. There was one integrated and indivisible contract by the vendor to convey full interest in the property i.e. his own life interest and the interest of the reversioners with sanction of the Court. As the Court had not granted the sanction, the contract could not be specifically enforced. The lesser relief of transfer of life interest was not claimed within a reasonable time after the vendor had intimated that the contract, as agreed for full interest, was not possible of performance. We find that neither equity nor law is in favour of the plaintiff vendee." Therein, in the agreement not only the interest of the vendor in presenti but also the interest of the remaindermen or reversioners after his death was the subject matter of contract. The agreement was furthermore subject to the passing of the vendor's title to the property and of the vendor's right to sell the entire interest, present and future in the property by the purchaser's advocate. For the reasons aforementioned,, the impugned judgment cannot be sustained, which is set aside accordingly. The Appeal is allowed. No costs. Shanker versus Narender Singh AIR 2011 SC :- On 12.1.1977 the appellant herein, a resident of Village Dera Saidan entered into an agreement to sell certain property with the respondent No. 1, a resident of Dera Mainda, both villages being in Tehsil Sultanpur, Distt. Kapurthala of State of Punjab. The property to be sold consisted of two parts viz. agricultural land, and a house property. The Agricultural lands were bearing Khasra nos. 25/21/1-1/11-19, 26//24/6-11, 10/8-0, 12/5-8, 19/6-13, 20/8-0, 25//5/8-0, 15/8-0, 16/8-0, 17-8-0, 18/6-14, 21/2/5/7, 22/5-14, 23/8-0, 24/8-0, 25/718, 26/2-0, 34//2/6-14, 25//13/3-13. 3. The relevant clause of the agreement stated as follows:- "Whereas the first party is the owner of = share in 65-13 and the total area of the first party is 92-K-17M and the remaining one house in the abadi Dera Saidan bounded by the custodian on the east, Kartar Singh on west, Paharpassage on the south and the = share belongs to the wife of the first party namely Pritam Kaur.
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Now I am in need of purchasing property and therefore, now I am executing this writing in my full senses and dealing to sell the = share in lands measuring 92K-17M along with motor, bore, passage, fan and water pump fitted with engine and without engine along with the place for placing garbage including shamlat and including passage and all the rights which vest in Pritam Kaur and also execute this deal for sale on behalf of Pritam, with the party of the 2nd part for a total consideration of Rs. 1,24,500/- and I have received a sum of Rs. 28,000/- in cash as advance money in front of the witnesses. The purchaser will get the registry executed on 25th day of Magh 2034 and the possession will be handed over at the time of registry." It was also agreed that if the appellant violated the terms of the agreement, then the respondents were entitled to the recovery of Rs. 28,000/- as earnest money and Rs. 28,000/- as damages, the total coming to Rs. 56,000/. It was further agreed that if there was any addition or decrease in the area agreed to be sold belonging to appellant, the price of the same was to be adjusted accordingly. 4. It so transpired, that on the agreed date of registration the appellant did not turn up at the office of the Sub-Registrar, and hence the respondent gave a notice to the appellant to execute the sale deed. The appellant did not respond, and therefore the respondent No. 1 filed Suit No. 21/1978 in the Court of Sub Judge 1st Class, Sultanpur Lodhi for the specific performance of the agreement. The wife of Shanker Singh, Pritam Kaur was joined as defendant No.2. (She is reported to have expired in 1997). The other co-sharers of the land had sold their land in dispute in favour of one Joginder Kaur and three others who were joined as defendant Nos. 3 to 6 (Respondent Nos. 4 to 7 in the Civil Appeal). 5. The appellant raised various defences. Firstly he denied having entered into the agreement, and then he claimed of having received only Rs. 8,000/- and not Rs. 28,000/- as earnest money. Thereafter, he contended that he did not have the authority to enter into the agreement to sell = share in the house property which belonged to his wife. Lastly he contended that he alongwith his two minor sons Amrik Singh and Balbinder Singh formed a Hindu Undivided Family (HUF), and that he could not sell the coparcenery property except in the case of legal necessity and for the benefit of the family. 6. The Trial Court framed the following issues: 4) Whether the plaintiffs have been ready and willing to perform their part of the agreement? 6) Whether the plaintiffs are entitled for specific performance of the amount claimed? 7) Relief. 10. The Trial Judge held that the respondents were of course ready and willing to perform their part of agreement, and it is the appellant who had failed to discharge his obligation. The learned Judge therefore decreed the suit for specific performance by his judgment and order dated 20.2.1980.

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15. The High Court therefore, framed the substantial questions of law as follows:- Whether the plaintiffs are entitled to specific performance of the agreement in respect of valid part of the agreement on payment of the entire sale consideration in terms of Section 12 of Specific Relief Act, 1963. It was submitted on behalf of the respondents herein that they were entitled to relinquish the part of the agreement which was not enforceable, and the same was permissible under Section 12 (3) of the Act. They relied upon the dicta of this Court in Kalyanpur Lime Works Ltd. Vs. State of Bihar reported in AIR 1954 SC 165 to the effect that such an relinquishment can be made at any stage of the proceedings. This proposition of a Bench of three Judges in Kalyanpur Lime Works (supra) has been reiterated by this Court in Rachakonda Narayana Vs. Ponthala Parvathamma reported in 2001 (8) SCC 173. The learned Judge hearing the second appeal accepted this submission, and by his impugned judgment and order allowed the second appeal, and decreed the suit filed by the respondents for specific performance for agriculture land admeasuring 92 Kanals and 17 Marlas after recording the statement of the counsel for the respondents that they were relinquishing that part of the agreement which was not capable of being performed. 17. It was then submitted that the agreement was incapable of being implemented as rightly held by the Additional District Judge, and that the High Court had erred in its application of the provisions of Section 12, 14 and 20 of the act. Firstly, this was on the ground that there was no specific reference to the price of the land per Kanal or per Marla as held by the Additional District Judge. Secondly, it was submitted that the relinquishment was not unambiguous. The respondents had offered to give up their claim for such excess land, but it was not possible to state that the claim was being given up with respect to a particular parcel of land bearing a specific Khasra number. The agreement was vague in nature and since the proposed relinquishment was also ambiguous, the agreement was incapable of being performed. 18. In this connection, we may refer to the relevant provisions of the Act. Section 12(3) of the Act permits a party to an agreement to relinquish a part of the agreement which is not enforceable. However, it should be possible to identify and demarcate that part of the agreement which is not to be enforced. We must also keep in mind the provision of Section 14 of the Act which deals with contracts which are not specifically enforceable, and Sub- Section 1 (b) thereof includes therein a contract which runs into minute and numerous details, as is seen in the present case. In this connection, we must as well refer to Section 20 (1) of the Act which reads as follows:Section 20. Discretion as to decreeing specific performance - (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal."

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19. Damages and specific performance are both remedies available upon breach of obligations by a party to the contract. The former is considered to be a substantial remedy, whereas the latter is of course a specific remedy. It is true that explanation (i) to Section 10 of the Act provides that unless and until the contrary is proved, the Court shall presume that breach of contract to transfer immovable property cannot be adequately relieved by compensation in money. However, this presumption is not an irrebuttable one. That apart, for a specific performance of a contract of sale of immovable property, there must be certainty with respect to the property to be sold. As held by this Court in para 18 of Mayawanti Vs. Kaushalya Devi reported in 1990 (3) SCC 1 :- 18. The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the courts direct the party in default to do the very thing which he contracted to do. The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem. The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff. If the stipulations and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all. Section 14. Contracts not specifically enforceable :- (1) The following contracts cannot be specifically enforced, namely(a) A contract for the non-performance of which compensation is an adequate relief, (b) A contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms; (c) A contract, which is in its nature determinable; (d) A contract the performance of which involves the performance of a continuous duty, which the court cannot supervise. (2) Save as provided by the Arbitration Act; 1940, no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit. (3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases: (a) Where the suit is for the enforcement of a contract- (i) To execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once: Provided that where only a part of the loan has been advanced the vendor is willing to advance the remaining part of the loan in terms of the contract; or
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(ii) To take up and pay for any debentures of a company; (b) Where the suit is for,- (i) The execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or (ii) The purchase of a share of a partner in a firm; (c) Where the suit is for the enforcement of a contract for the-construction of any building or the execution of any other work on land: Provided that the following conditions are fulfilled, namely:(i) The building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work; (ii) The plaintiff has a substantial interest in the performance of ale contract and the interest is of such a nature that compensation in money for non-performance of the contract is not in adequate relief, and (iii) The defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. 1. Where compensation in money is an adequate relief [section 14(1)(a)]. Courts will not order specific performance of a contract where the aggrieved party can be adequately compensated in terms of money. An ordinary contract to lend or borrow money whether with or without security is an example of a contract which cannot be specifically enforced, though where a loan has been already advanced on the understanding that a security would be provided against it, this can be specifically enforced. Ashok Kumar Srivastava v. National Insurance Co. Ltd., AIR 1988 SC 2046: In case of contract for the sale of something which has its special value and is not an ordinary article of commerce, such as rare coins, the contract can be specifically enforced, because compensation in money will not constitute an adequate relief in such a case. 2. Contracts which runs into minute or numerous details section 14(1)(b).The following kinds of contracts cannot be specifically enforced (i) A contracts which run into such minute or numerous details, or (ii) Which is so dependent on the personal qualification or volition of the parties, or (iii) otherwise from its nature is such, that the court cannot enforce specific performance of its material terms. Executive Committee, State Warehousing Corporation v. Chandra Kiran Tyagi, AIR 1970 SC 1244: The Supreme Court had that ordinarily, the contracts for personal services cannot be specifically enforced. But this rule is subject to following three exceptions:
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(1) where a public servant has been dismissed from service in violation of Article 311 of the Constitution, (ii) where a worker has been dismissed from service under industrial law, (iii) where a legal body acts in violation of the provisions of the statute. (1) Contract running into minute details :- If a contract requires continuous acts and involves watching of those acts by the court, the same can not be specifically enforced. For instances, a contract to build or repair a structure,33 as the same involves continuous acts running into minute details. (ii) Contract dependent on personal qualification or volition :- A contract of service depends on the personal volition of the parties and, therefore, the same cannot be specifically enforced either by the master or the servant.35 Thus, the court cannot either require a person to continue to employ another person,36 or require some one to continue to serve a particular master. iii) Contract not capable of specific performance :- If the contract from its nature is such that its material terms cannot be enforced by the court, specific performance of the same cannot be granted. For instance a contract of betrothal (engagement) or marriage between the parties cannot be specifically enforced by the court. Similarly, a contract for sale of immovable property which is under attachment is sold subject to Courts approval cannot be specifically enforced, if the court does not approve the sale. Similarly, if a contract is unlawful and requires sale of property if a departmental enquiry is hushed up, the same cannot be specifically enforced. Shanker Singh vs Narinder Singh & Ors. on 15 December, 2011 2. On 12.1.1977 the appellant herein, a resident of Village Dera Saidan entered into an agreement to sell certain property with the respondent No. 1, a resident of Dera Mainda, both villages being in Tehsil Sultanpur, Distt. Kapurthala of State of Punjab. The property to be sold consisted of two parts viz. agricultural land, and a house property. The Agricultural lands were bearing Khasra nos. 25/21/1-1/11-19, 26//24/6-11, 10/8-0, 12/5-8, 19/6-13, 20/8-0, 25//5/8-0, 15/8-0, 16/8-0, 17-8-0, 18/6-14, 21/2/5/7, 22/5-14, 23/8-0, 24/8-0, 25/7-18, 26/2-0, 34//2/6-14, 25//13/3-13. 3. The relevant clause of the agreement stated as follows:- Whereas the first party is the owner of = share in 65-13 and the total area of the first party is 92-K-17M and the remaining one house in the abadi Dera Saidan bounded by the custodian on the east, Kartar Singh on west, Pahar- passage on the south and the = share belongs to the wife of the first party namely Pritam Kaur. Now I am in need of purchasing property and therefore, now I am executing this writing in my full senses and dealing to sell the = share in lands measuring 92K-17M along with motor, bore, passage, fan and water pump fitted with engine and without engine along with the place for placing garbage including shamlat and including passage and all the rights which vest in Pritam Kaur and also execute this deal for sale on behalf of Pritam, with the party of the 2nd part for a total
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consideration of Rs. 1,24,500/- and I have received a sum of Rs. 28,000/- in cash as advance money in front of the witnesses. The purchaser will get the registry executed on 25th day of Magh 2034 and the possession will be handed over at the time of registry." It was also agreed that if the appellant violated the terms of the agreement, then the respondents were entitled to the recovery of Rs. 28,000/- as earnest money and Rs. 28,000/- as damages, the total coming to Rs. 56,000/. It was further agreed that if there was any addition or decrease in the area agreed to be sold belonging to appellant, the price of the same was to be adjusted accordingly. 4. It so transpired, that on the agreed date of registration the appellant did not turn up at the office of the Sub-Registrar, and hence the respondent gave a notice to the appellant to execute the sale deed. The appellant did not respond, and therefore the respondent No. 1 filed Suit No. 21/1978 in the Court of Sub Judge 1st Class, Sultanpur Lodhi for the specific performance of the agreement. The wife of Shanker Singh, Pritam Kaur was joined as defendant No.2. (She is reported to have expired in 1997). The other co-sharers of the land had sold their land in dispute in favour of one Joginder Kaur and three others who were joined as defendant Nos. 3 to 6 (Respondent Nos. 4 to 7 in the Civil Appeal). 5. The appellant raised various defences. Firstly he denied having entered into the agreement, and then he claimed of having received only Rs. 8,000/- and not Rs. 28,000/- as earnest money. Thereafter, he contended that he did not have the authority to enter into the agreement to sell = share in the house property which belonged to his wife. Lastly he contended that he alongwith his two minor sons Amrik Singh and Balbinder Singh formed a Hindu Undivided Family (HUF), and that he could not sell the coparcenery property except in the case of legal necessity and for the benefit of the family. 6. The Trial Court framed the following issues: 4) Whether the plaintiffs have been ready and willing to perform their part of the agreement? 6) Whether the plaintiffs are entitled for specific performance of the amount claimed? 10. The Trial Judge held that the respondents were of course ready and willing to perform their part of agreement, and it is the appellant who had failed to discharge his obligation. The learned Judge therefore decreed the suit for specific performance by his judgment and order dated 20.2.1980. 15. The High Court therefore, framed the substantial questions of law as follows:;Whether the plaintiffs are entitled to specific performance of the agreement in respect of valid part of the agreement on payment of the entire sale consideration in terms of Section 12 of Specific Relief Act, 1963. It was submitted on behalf of the respondents herein that they were entitled to relinquish the part of the agreement which was not enforceable, and the same was permissible under Section 12 (3) of
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the Act. They relied upon the dicta of this Court in Kalyanpur Lime Works Ltd. Vs. State of Bihar reported in AIR 1954 SC 165 to the effect that such an relinquishment can be made at any stage of the proceedings. This proposition of a Bench of three Judges in Kalyanpur Lime Works (supra) has been reiterated by this Court in Rachakonda Narayana Vs. Ponthala Parvathamma reported in 2001 (8) SCC 173. The learned Judge hearing the second appeal accepted this submission, and by his impugned judgment and order allowed the second appeal, and decreed the suit filed by the respondents for specific performance for agriculture land admeasuring 92 Kanals and 17 Marlas after recording the statement of the counsel for the respondents that they were relinquishing that part of the agreement which was not capable of being performed. 18. In this connection, we may refer to the relevant provisions of the Act. Section 12(3) of the Act permits a party to an agreement to relinquish a part of the agreement which is not enforceable. However, it should be possible to identify and demarcate that part of the agreement which is not to be enforced. We must also keep in mind the provision of Section 14 of the Act which deals with contracts which are not specifically enforceable, and Sub- Section 1 (b) thereof includes therein a contract which runs into minute and numerous details, as is seen in the present case. In this connection, we must as well refer to Section 20 (1) of the Act which reads as follows:Section 20. Discretion as to decreeing specific performance - (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. 19. Damages and specific performance are both remedies available upon breach of obligations by a party to the contract. The former is considered to be a substantial remedy, whereas the latter is of course a specific remedy. It is true that explanation (i) to Section 10 of the Act provides that unless and until the contrary is proved, the Court shall presume that breach of contract to transfer immovable property cannot be adequately relieved by compensation in money. However, this presumption is not an irrebuttable one. That apart, for a specific performance of a contract of sale of immovable property, there must be certainty with respect to the property to be sold. As held by this Court in para 18 of Mayawanti Vs. Kaushalya Devi reported in 1990 (3) SCC 1 :- ;18. The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the courts direct the party in default to do the very thing which he contracted to do. The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem. The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff. If the stipulations and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all; 20. Mr. Vishwanathan, learned senior counsel for the respondents submitted that the relinquishment of a part of the agreement was permissible. As far as the propositions of law concerning relinquishment as canvassed by the respondents are concerned, there is no difficulty in accepting the same. However, the relinquishment has to be unambiguous. As held by this Court in Surjit Kaur Vs. Naurata Singh reported in 2000 (7) SCC 379, the party seeking part
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performance must unambiguously relinquish all claims to performance of remaining part of the contract. In the present case the offer of relinquishment by the respondents cannot be said to be an unambiguous one, and it will be difficult to decide as to which portion of the land is to be segregated to be retained with the appellant, and which portion is to be sold. Firstly, this is because as rightly noted by the Additional District Judge, the agreement does not specifically mention the price of the land, and in the proposed relinquishment, the respondents have not stated as to which portion of land (admeasuring 1 Kanal and 19 Marlas) they were agreeable to retain with the appellant. Secondly, in the agreement there is also a mention of `a motor, bore, passage, fan and water pump fitted with engine and without engine along with the place for placing garbage including shamlat' amongst the properties which were being sold. It is not on record as to which parcel of land is having all these features. A question will therefore arise as to with whom such a parcel of land is to be retained. Obviously, a segregation of the land in dispute into two portions will be difficult. 3. Contracts which are determinable by their nature. When a contract is of the nature that it Is determinable the same cannot be specifically enforced; Determinable contract means a contract which can be determined or put to an end by a party to the contract. When a contract is determinable or revocable by a party to the contract it cannot obviously be enforced. In case of partnership at will any partner can put to an end of relation of partnership, re., he can retire by giving a notice in writing to all the other partners of his intention to retire. Similarly, in case of such a partnership, a firm may be dissolved by any partner giving a notice in writing to all the other partners of his intention to dissolve the firm. As a contract of partnership Is determinable, as seen above, in case of partnership at will, enforcement of such a contract carries no meaning. The point may be explained further through the following Illustration; A and B contract to become partners in a certain business, the contract not specifying the duration of the proposed partnership . This contract cannot be specifically performed or, if it were so performed, either A or B might dissolve the partnership D.R. Sondhi And Ors. vs Hella Kg Hueck & Co. The facts alleged are the petitioner No. 1 was the promoter of JMA Industries Ltd. (for short the company). It was incorporated in 1959. In 1961 respondent No. 1, Hella KG Hueck & Co. entered into a joint venture agreement with petitioner No. 1. The respondents initially had 34% stake in the company. The remaining shareholding was held by the petitioner and their friends and companies managed by the petitioner. In 1980 after public issue was taken out share holding of the petitioners became 40% and share holding of respondent became 26%. Till 1999 the business of the company was under the management and control of the petitioners. It made a mark in the field of automotive lighting signalling equipment. Respondents were actively involved in the functioning of the company and were aware of the aspects of the company. 3. In 1999 there was a change in the Governments policy and the Indian industry started opening up in the era of liberalization. Now it was possible for the foreign company to have majority stakes in the Indian companies. Respondents were desirous of having majority of stake in the company. With a view to make petitioners agree to their proposal they represented that they should be
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allowed to have majority shares in the company and they would bring in latest technical know-how and technology. it is alleged that respondents even went to the extent of indulging in deceitful campaign as regards the capability of the company. It is on basis of those false representations and assurance that petitioners agreed to allow the respondents to take over the control and management of the company. The respondents appointed M/s Arthur Anderson to carry out comprehensive due diligence of the company with a view to look into the financial, tax, commercial and legal aspects of the company. The due diligence which was spread over many months involved in depth verification, evaluation and analysis of assets and liabilities of the company. It was after being satisfied as regards all aspects of the functioning of the company and after careful scrutiny of due diligence report that respondents decided to take over control and management of the company. As per shareholders agreement it was agreed between the petitioners and the respondents that a preferential issue of the company would be taken out and allotment thereof was to be made to respondent No. 3 so that respondent No. 3 who had 51% of the issued and paid up shares. Following the allotment of these preferential shares the share holding of the petitioners came to 26%. The petitioners were not paid any consideration for allowing the respondents to take over the majority stakes and control and management of the company. Petitioners 1, 2, 3 and late Mrs. Kunti Sondhi entered into a non-competing agreement with respondent No. 1. Petitioner No. 2 assigned trade mark HELTEX and HELLATEX to respondent No. 1 under the Trade Mark Assignment Agreement of 18th June, 1999. 4. The respondents after taking over majority, management and control of the company held out to the petitioners that steps were being taken to give effect to all the undertakings and assurances given by the respondents to the petitioner which formed the basis of the petitioner to accept the offer of the respondent. After taking over the majority management and control of the company respondents started managing the company to the exclusion of the petitioners. They appointed their manages and executive and had complete control over all the assets and records of the company. After taking over the majority, control of the company respondents completely ignored their obligations towards petitioners. The petitioners had agreed to hand over management and control of the company to the respondents and had allowed the respondents to increase their stakes to 51% on basis of the undertakings given by the respondents. However, respondents not only failed to honour their commitment but sought to fabricate charges with a view to deny the petitioners their rights under the shareholders agreement. They alleged that petitioners had not given correct information to the respondents at the time of execution of the shareholders agreement. A legal notice was issued by the respondents which was an attempt to over up their breaches. They issued another notice of 3rd September, 2001 seeking to terminate shareholders agreement. A reply was sent by the petitioners stating that the same was illegal. Thereafter respondents through their counsel sent a letter of 18th September, 2001 in response to the reply of the petitioners to the legal notice. The petitioners have not been paid any amount for giving up control and management of the company. It is alleged that respondents failed and neglected to take steps to incorporate the shareholders agreement into Articles of Association of the Company and carry out necessary amendments in the Articles of Association. Similarly no steps were taken for re-organisation of the company to settle the issue of surplus lands. The petitioners gave a notice to the company under Section 169 of the Companies Act for calling Extraordinary General Meeting for incorporation of
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shareholders agreement into Articles of Association and for initiating steps for reorganisation of the company. 5. The respondents are stated to be having five directors on the board of the company but they in an illegal manner removed petitioner No. 2 from Chairmanship of the company in complete violation of the terms of the shareholders agreement. It is contended that respondents are further taking steps to call an extra ordinary general meeting for purposes of increasing the share capital of the company, to destroy the status and rights of the petitioners and their group holding 26% of the companies shares. The respondents are making frivolous claims in order to justify their failure to honour their commitments. Payments due and payable to petitioner No. 2 on account of fees towards retainer/advisor to the company are outstanding. No steps for reorganization of the company in accordance with understanding reached between petitioners and respondents for transfer of the surplus lands have been taken. The personal guarantee provided by the petitioners 1 to 3 to the lenders of the company have not been revoked. With the alleged cancellation of the shareholders agreement respondents are in illegal manner trying to deny the petitioners rightful dues. It is pleaded that there is an arbitration clause and the petitioners had acted in good faith for acceptance of promises made and assurances hold out. In these circumstances Section 9 of the Act has been pressed into service for an interim relief. 6. Notice had been accepted and petition has been contested. 9. Learned counsel for the respondents contended that in Section 14(1)(c) of the Specific Relief Act prohibits specific enforcement of a contract when the contract in which its nature is determinable. He further contended that no injunction can be granted under Section 41 and prohibition is under Section 41 of the Specific Relief Act to prevent the breach of the contract performance of which could not be specifically enforced. In answer to the same learned counsel for the petitioner in the first instance vehemently urged that the contract in the provisions of Specific Relief Act are not exhaustive. Herein it is not the case that damages is an adequate remedy. He further contended that keeping in view Section 41 of the Specific Relief Act and the negative covenants the interim relief can be granted in the facts of the case. 10. To appreciate the said controversy reference can well be made to Section 14(1)(c) of the and Section 41(e) of the Specific Relief Act. 14. Contracts not specifically enforceable- (1) The following contracts cannot be specifically enforced, namely:(c) a contract which is in its nature determinable; 41. Injunction when refused- An injunction cannot be granted(e) to prevent the breach of contract the performance of which would not be specifically enforced. 11. It is abundantly clear from aforesaid that a contract cannot be specifically enforced which in its nature is determinable and injunctions are not to be granted on breach of contract non performance of which could not be specifically enforced.
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13. Acting on the said agreement a notice had been issued to the plaintiff and thereupon it is alleged that the shareholders agreement of 18th June, 1999 have been terminated. The short question as referred to above and re-mentioned at the risk of repetition that comes up for consideration is as to whether the said agreement is terminable in terms of Section 14(1)(c) of the Specific Relief Act or not. It clearly provides that if one party itself in a material breach of any of its obligations which it ails to remit within 60 days of the receipt of the written notice the agreement can be terminated. The Supreme Court while looking into the said clauses and Section 14 of the Specific Relief Act held:- Sub-section (1) of Section 14 of the Specific Relief Act specifies the contracts which cannot be specifically enforced, one of which is a contract which is in its nature determinable'. In the present case, it is not necessary to refer to the other clauses of Sub-section (1) of Section 14, which also may be attracted in the resent case since Clause (c) clearly applies on the finding read with reasons given in the award itself that the contract by its nature is determinable. This being so granting the relief of restoration of the distributorship even on the finding that the breach was committed by the appellant-Corporation is contrary to the mandate in Section 14(1) of the Specific Relief Act and there is an error of law apparent on the face of the award which is stated to be made according to 'the law governing such cases'. The grant of this relief in the award cannot, therefore, be sustained." 19. More close to the facts of the present case is the decision of the Division bench of this court in the case of Rajasthan Breweries Ltd. v. Stroh Brewery Company AIR 2000 Delhi 452. The question as has been raised and pressed in the present controversy was alive to the Division Bench of this court. It was urged there as to if in such like contracts under Section 14(1)(c) of the Specific Relief Act would come into play or not. The argument that is being advanced in the present case was floated before the Division Bench. The same was rejected and the Division Bench held after noticing the argument that was advanced: 16. "Learned counsel for the appellant contended that the word "determinable" used in Clause (c) to Sub-section (1) of Section 14 means that which can be put an end to. Determination is putting of a thing to an end. The clause enacts that a contract cannot be specifically enforced if it is, in its nature, determinable not by the parties but only by the defendant. Although clause does not add the word "by the parties or by the defendant" yet that is the sense in which it ought to be understood. Therefore, all revocable deeds and voidable contracts may fall within "determinable" contracts and the principal on which specific performance of such an agreement would not be granted is that the Court will not go through the idle ceremony of ordering the execution of a deed or instrument, which is revocable at the will of the executant. Specific performance cannot be granted for a terminable contract. 17. We are unable to persuade ourselves to accept the submissions put forth on behalf of the appellant that when a contract was determinable by the parties, the same cannot be treated as such
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a contract as is referred to in Clause (c) to Sub-section (1) of Section 14 is a contract, which in its nature is determinable." 21. For these reasons petition fails and is dismissed. Contract Involving performance of a continuous which the Court cannot supervise [Section 14(1)(d) A contract, the performance of which involves the performance )f a continuous duty which the court cannot supervise, cannot be specifically enforced. Under the Specific Relief Act, 1877 if a contract involved performance of a continuous duty over a period longer than three years could not be specifically enforced. The Law Commission considered the limit of three years as artificial and arbitrary and It recommended the omission of the time limit. The Act of 1963 does not lay down any time limit of the performance of a continuous duty. Under the present provision the test Is whether the contract Is of such a nature that the court cannot supervise the same, and whether it involves performance of a continuous duty. Thus, a contract to give maintenance, or a contract to execute a deed every year, cannot be specifically enforced. THE HIGH COURT OF DELHI AT NEW DELHI M/S. IMAGE ADVERTISING & ANR. versus - ANAND PARKASH . 1. This is a suit for permanent injunction. The plaintiff No.2 who is the sole proprietor of plaintiff No.1 is engaged in the business of providing service relating to display of advertisements of various products. It is alleged in the plaint that defendant No.1 approached the plaintiffs and offered space on the roof/wall of his property No.1A, Lado Sarai, Near Petrol Pump, New Delhi, for Two Wall Wrap on both sides of building of size measuring 40X15 each, for displaying advertisements for customers of the plaintiffs. An Agreement dated 27.04.2010 was executed in this behalf between the plaintiffs and defendant No.1. Under the Agreement dated 27.04.2010, defendant No.1 allowed the plaintiff to put two wall on both sides of his building on payments of rent of Rs.40,000/- per month and the rent was to increase 10% every year for five years. The Agreement was to remain in force was for a period of five years and it was renewable by another five years, by mutual consent of parties. It was further agreed that during subsistence of the Agreement, defendant No.1 shall not grant permission to any other person for installation of any hoardings/neon sign and shall not allot hoardings/neon sign at the roof top of 1A Lado Sarai, near Petrol Pump, New Delhi. Since MCD allows wall wraps only on commercial buildings or on notified roads where building commercial tax/conversion charges are paid, conversion charges amounting to Rs.9,918/- was deposited by the plaintiffs with MCD, on behalf of defendant No.1. The plaintiffs also applied to MCD on 30.04.2010 for grant of permission for displaying advertisements, pursuant to the agreement between him and defendant No.1. He also deposited amounts of Rs.1,15,200/-, Rs.38,400/- and Rs.768/- with MCD for this purpose and obtained NOC from it on 09.06.2010. A pay-order of Rs.40,000/- was then given by the plaintiffs to defendant No.1 towards advance monthly rental in terms of the agreement dated 27.04.2010. However, when the display boards were sought to be installed on the site, defendant No.1 refused to allow them to be installed. It is alleged in the plaint that defendant No.1 intends to issue no objection in favour of
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some other person and wants to back out from the agreement executed by him with the plaintiffs on 27.04.2010. 2. The plaintiffs have therefore sought injunction restraining defendant No.1 from stopping him from installing the boards in terms of the agreement dated 27.04.2010. He has also sought injunction against defendant No.2 MCD, restraining it from cancelling the permission granted to him for display of advertisements vide its order dated 09.06.2010. He has also sought injunction against defendant No.2 granting permission to any other person to display advertisement on the space which is subject matter of the agreement dated 27.04.2010. 3. The suit has been contested by the defendants. Defendant No.1 has alleged that since the permission/NOC granted by MCD has already been withdrawn by it, the suit has become infructuous. It has also been alleged that the agreement between the parties stood determined on defendant No.1 withdrawing the no objection which he had given to MCD. He has also taken a preliminary objection that the relief sought by the plaintiffs being contrary to the provisions contained in Section 14(1)(a)(c) & (d) read with Section 41(e) of Specific Relief Act, cannot be granted. He has also claimed that the contract between the parties is a commercial contract which is determinable in nature. It has also been claimed in the written statement of defendant No.1 that the agreement dated 27.04.2010 was executed under coercion and duress. It has also been claimed by defendant No.1 that he is under no obligation to adhere to the terms of the agreement dated 27.04.2010. 8. Section 14(1)(a) of Specific Relief Act provides that a contract for the non-performance of which compensation in money is adequate relief cannot be specifically enforced. The contract dated 27.04.2010 was for display of advertisements of the products of various companies, which are clients of the plaintiffs, on the site owned by defendant No.1 at Lado Sarai, New Delhi. It is not possible to quantify, in monetary terms, the loss which the plaintiffs would sustain on a account of its not being able to display the advertisement of its clients on the site owned by defendant No.1. It is not known whether the plaintiffs had already contracted with his clients or not for display of the advertisements of their products on the site of defendant No.1 and if he had already entered into such contract (s), how much loss he would suffer not only in terms of loss of the commission/profit but also in terms of loss of reputation in the eyes of his client (s) on account of his inability to perform his contract with them and on account of the possible loss of other business with those clients on account of his inability to perform his contract, if any, with them for display of the advertisement of their products on the site of defendant No.1. Hence, at this stage, it cannot be said that compensation in money will be adequate relief for non-performance of the contract between the plaintiffs and defendant No.1. 9. Section 14(1)(c) of Specific Relief Act provides that a contract which is in its nature determinable cannot be specifically enforced, whereas clause (d) of sub-clause(1) of Section 14 provides that a contract the performance of which involves the performance of a continuous duty which the court cannot supervise, cannot be specifically enforced.

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10. As regards the applicability of Section 14(1)(c) of Specific Relief Act, the question which comes up for consideration is as to whether the agreement dated 27.04.2010 between the plaintiff and defendant No.1 is of a determinable nature. It is difficult to dispute that the permission granted by defendant No.1 to the plaintiffs to display advertisements on its site at Lado Sarai is in the nature of a licence. Section 60 of the Indian Easements Act, 1882, which deals with revocation of a licence, provides that a licence may be revoked by the grantor, unless it is coupled with a transfer of property and such transfer is in force, or if the licensee, acting upon the license, has executed a work of a permanent character and incurred expenses in the execution. 11. In the present case, the Agreement dated 27.04.2010 does not envisage any transfer of property of defendant No.1 to the plaintiffs and no work of a permanent character has been executed by the plaintiffs on the site of defendant No.1. It is, therefore, difficult to dispute that the licence granted by defendant No.1 to the plaintiffs under the Agreement dated 27.04.2010 is revocable in nature. Consequently, in view of the embargo placed by Section 14(1)(c) of Specific Relief Act read with Section 41(e) thereof which provides that an injunction cannot be granted to prevent the breach of a contract the performance of which would not be specifically enforced, the Court cannot enforce the agreement dated 27.04.2010 to the extent it pertains to display of advertisements of the clients of the plaintiffs on the site of defendant No.1. 12. However, Section 42 of Specific Relief Act which is in the nature of a proviso to Section 41(e) of the Act provides that where a Contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or 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. Therefore, even though the Court cannot direct defendant No.1 to allow installation of advertisements of the products of the clients of the plaintiff it can definitely restrain him, during the period of five years envisaged in the agreement dated 27.04.2010, from permitting any other person to display advertisements on his site at Lado Sarai, New Delhi. 15. In N.S.Golikari Vs. Century Spinning Co., AIR 1967 SC 1098, the Court inter alia, observed as under:The result of the above discussion is that considerations against restrictive covenants are different in cases where the restriction is to apply during the period after the termination of the contract than those in cases where it is to operate during the period of the contract. Negative covenants operative during the period of the contract of employment when the employee is bound to serve his employer exclusively are generally not regarded as restraint of trade, and therefore, do not fall under Section 27 of the Contract Act. A negative covenant that the employee would not engage himself in a trade or business or would not get himself employed by any other master for whom he would perform similar or substantially similar duties is not, therefore, a restraint of trade unless the contract as aforesaid is unconscionable or excessively harsh or unreasonable or one sided .

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The Court also referred to its decision in the case of Superintendence Company AIR 1980 SC 1717, where it had said that the doctrine of restraint of trade never applies during the continuance of a contract of employment; it applies only when the contract comes to an end. The Court observed that the underlying principle governing contracts in restraint of trade is the same and as a matter of fact the Courts take a more restricted and less favourable view in respect of a covenant entered into between an employer and an employee as compared to a covenant between a vendor and a purchaser or partnership agreements. It was also observed that the Court is not bound to grant an injunction in every case and an injunction to enforce a negative covenant would be refused if it would indirectly compel an employee to either idleness or to serve the employer. The reliance on this judgment is wholly misplaced for the simple reason that this is not a case of a contract of service between the employer and the employee. The contract between the plaintiffs and defendant No.1 was a contract for exploitation of the property of defendant No.1 for the mutual benefit of the parties by allowing the same to be used for displaying hoardings/neon sign for advertising the products of the clients of the plaintiffs. 23. All the four applications stand disposed of. 1. Admission/denial of documents has already been carried out. 2. To come up for framing of issues before the Court on 13th January, 2011. Agreement to refer to arbitration [Section 14(2):- According to Section 14(2), except as provided by the Arbitration Act, 1940, no contract to refer present or future differences to arbitration is all be specifically enforced It may be at Indian Contract Act, 1872 permits making of a valid contract to refer the existing or future disputes to arbitration and such contracts are valid and are not considered void as being in absolute restraint of legal proceedings. Section 14(2) which makes such contracts not specifically enforceable reads as follows : Save as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced : but if any person who has made such a contract (other than an arbitration agreement to which the provisions of the said Act apply and has refused to perform it), sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit. (3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub- section (1), the court may enforce specific performance in the following cases:(a) where the suit is for the enforcement of a contract,(i) to execute a mortgage or furnish any other security for security for securing the repayment of any loan which the borrower is not willing to repay at once: Provided that where only a part of the loan has been advanced the lender is willing to advance the remaining part of the loan in terms of the contract; or (ii) to take up and pay for any debentures of a company;
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(b) where the suit is for,(i) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or (ii) the purchase of a share of a partner in a firm, (c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land: Provided that the following conditions are fulfilled, namely:(i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work; (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non- performance of the contract is not an adequate relief; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. M/S. IMAGE ADVERTISING & ANR. versus ANAND PARKASH 1. This is a suit for permanent injunction. The plaintiff No.2 who is the sole proprietor of plaintiff No.1 is engaged in the business of providing service relating to display of advertisements of various products. It is alleged in the plaint that defendant No.1 approached the plaintiffs and offered space on the roof/wall of his property No.1A, Lado Sarai, Near Petrol Pump, New Delhi, for Two Wall Wrap on both sides of building of size measuring 40X15 each, for displaying advertisements for customers of the plaintiffs. An Agreement dated 27.04.2010 was executed in this behalf between the plaintiffs and defendant No.1. Under the Agreement dated 27.04.2010, defendant No.1 allowed the plaintiff to put two wall on both sides of his building on payments of rent of Rs.40,000/- per month and the rent was to increase 10% every year for five years. The Agreement was to remain in force was for a period of five years and it was renewable by another five years, by mutual consent of parties. It was further agreed that during subsistence of the Agreement, defendant No.1 shall not grant permission to any other person for installation of any hoardings/neon sign and shall not allot hoardings/ neon sign at the roof top of 1A Lado Sarai, near Petrol Pump, New Delhi. Since MCD allows wall wraps only on commercial buildings or on notified roads where building commercial tax/conversion charges are paid, conversion charges amounting to Rs.9,918/- was deposited by the plaintiffs with MCD, on behalf of defendant No.1. The plaintiffs also applied to MCD on 30.04.2010 for grant of permission for displaying advertisements, pursuant to the agreement between him and defendant No.1. He also deposited amounts of Rs.1,15,200/-, Rs.38,400/- and Rs.768/- with MCD for this purpose and obtained NOC from it on 09.06.2010. A pay-order of Rs.40,000/- was then given by the plaintiffs to defendant No.1 towards advance monthly rental in terms of the agreement dated 27.04.2010. However, when the display boards were sought to be installed on the site, defendant No.1 refused to allow them to be installed. It is alleged in the plaint
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that defendant No.1 intends to issue no objection in favour of some other person and wants to back out from the agreement executed by him with the plaintiffs on 27.04.2010. 2. The plaintiffs have therefore sought injunction restraining defendant No.1 from stopping him from installing the boards in terms of the agreement dated 27.04.2010. He has also sought injunction against defendant No.2 MCD, restraining it from cancelling the permission granted to him for display of advertisements vide its order dated 09.06.2010. He has also sought injunction against defendant No.2 granting permission to any other person to display advertisement on the space which is subject matter of the agreement dated 27.04.2010. 3. The suit has been contested by the defendants. Defendant No.1 has alleged that since the permission/NOC granted by MCD has already been withdrawn by it, the suit has become infructuous. It has also been alleged that the agreement between the parties stood determined on defendant No.1 withdrawing the no objection which he had given to MCD. He has also taken a preliminary objection that the relief sought by the plaintiffs being contrary to the provisions contained in Section 14(1)(a)(c) & (d) read with Section 41(e) of Specific Relief Act, cannot be granted. He has also claimed that the contract between the parties is a commercial contract which is determinable in nature. It has also been claimed in the written statement of defendant No.1 that the agreement dated 27.04.2010 was executed under coercion and duress. It has also been claimed by defendant No.1 that he is under no obligation to adhere to the terms of the agreement dated 27.04.2010. 6. Admittedly, the permission which MCD had granted to the plaintiffs to display advertisements on the property of defendant No.1 has since been cancelled by it. Hence, the plaintiffs cannot be allowed to put up advertisements on the property of defendant No.1 till the time requisite permission in this regard is granted by MCD. 8. Section 14(1)(a) of Specific Relief Act provides that a contract for the non-performance of which compensation in money is adequate relief cannot be specifically enforced. The contract dated 27.04.2010 was for display of advertisements of the products of various companies, which are clients of the plaintiffs, on the site owned by defendant No.1 at Lado Sarai, New Delhi. It is not possible to quantify, in monetary terms, the loss which the plaintiffs would sustain on a account of its not being able to display the advertisement of its clients on the site owned by defendant No.1. It is not known whether the plaintiffs had already contracted with his clients or not for display of the advertisements of their products on the site of defendant No.1 and if he had already entered into such contract (s), how much loss he would suffer not only in terms of loss of the commission/profit but also in terms of loss of reputation in the eyes of his client (s) on account of his inability to perform his contract with them and on account of the possible loss of other business with those clients on account of his inability to perform his contract, if any, with them for display of the advertisement of their products on the site of defendant No.1. Hence, at this stage, it cannot be said that compensation in money will be adequate relief for non-performance of the contract between the plaintiffs and defendant No.1.

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9. Section 14(1)(c) of Specific Relief Act provides that a contract which is in its nature determinable cannot be specifically enforced, whereas clause (d) of sub-clause(1) of Section 14 provides that a contract the performance of which involves the performance of a continuous duty which the court cannot supervise, cannot be specifically enforced. The contention of defendant No.1 is that the contract dated 27.04.2010 at best grants licence to the plaintiffs to display advertisements of various products on his site and a licence can always be determined by the licensor. In my view, the contract dated 27.04.2010 for display of advertisements on the site of defendant No.1 can by no stretch be said to be a contract performance of which involves the performance of a continuous duty which the Court cannot supervise. If defendant No.1 is restrained from interfering with installation of advertisements on his site, it is very much possible for the plaintiffs to install the advertisements of his clients on that site without any necessity of supervision on the part of the contract. Of course, the plaintiffs cannot be allowed to put advertisements on the site of defendant No.1 unless requisite permission in this regard is given by MCD and since MCD cannot grant the requisite permission without NOC from the owner of the property, it cannot be directed to grant the requisite permission to the plaintiffs unless defendant No.1 is directed to issue a fresh NOC to the plaintiffs or MCD is directed to consider grant of permission on the assumption that the NOC which defendant No.1 had issued to the plaintiffs did not stand revoked by defendant No.1. However, I need not go further into this aspect of the matter since the plaintiff himself did not press for any such relief and his request during the course of arguments was confined to an order restraining defendant No.1 from allowing any other person to display advertisements on the site which was subject matter of the agreement dated 27.04.2010. 12. However, Section 42 of Specific Relief Act which is in the nature of a proviso to Section 41(e) of the Act provides that where a Contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or 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. The Court also referred to its decision in the case of Superintendence Company AIR 1980 SC 1717, where it had said that the doctrine of restraint of trade never applies during the continuance of a contract of employment; it applies only when the contract comes to an end. The Court observed that the underlying principle governing contracts in restraint of trade is the same and as a matter of fact the Courts take a more restricted and less favourable view in respect of a covenant entered into between an employer and an employee as compared to a covenant between a vendor and a purchaser or partnership agreements. It was also observed that the Court is not bound to grant an injunction in every case and an injunction to enforce a negative covenant would be refused if it would indirectly compel an employee to either idleness or to serve the employer. 16. In the case of Shubhmangal Mercantile(P) Ltd.s case (supra), which is a decision by a learned Single Judge of this Court, it was observed that a negative covenant in the contract and the restriction imposed therein was operative only during subsistence of the main contract.
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Section 15 in The Specific Relief Act, 1963 15. Who may obtain specific performance.- Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by(a) any party thereto; (b) the representative in interest or the principal, of any party thereto: Provided that where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest of his principal shall not be entitled to specific performance of the contract, unless such party has already performed his part of the contract, or the performance thereof by his representative in interest, or his principal, has been accepted by the other party; (c) where the contract is a settlement on marriage, or a compromise of doubtful rights between members of the same family, any person beneficially entitled thereunder; (d) where the contract has been entered into by a tenant for life in due exercise of a power, the remainderman; (e) a reversioner in possession, where the agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant; (f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is entitled to the benefit thereof and will sustain material injury by reason of its breach; (g) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation; (h) when the promoters of a company have, before its incorporation, entered into a contract for the purposes 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 has communicated such acceptance to the other party to the contract.

(a) where the suit is for the enforcement of a contract, (i) to execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once Provided that where only a part of the loan has been advanced the lender is willing to advance the remaining part of the loan in terms of the contract or
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(ii)

to take up and pay for any debentures of a company

(b) where the suit is for, (I) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership or firm: (ii) the purchase of a share of a partner in a firm. (c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land Provided that the following conditions are fulfilled. namely : (i) the building or other work is described in the contract in terms sufficiently precise to enable the Court to determine the exact nature of the building or work (ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief ; and (iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. PERSONS FOR OR AGAINST WHOM CONTRACTS MAY BE SPECIFICALLY ENFORCED (SECTIONS 1519) Who may obtain specific performance (Section 15) According to Section 15 specific performance of a contract may be obtained by the following persons : (1) Any party to the contract may obtain specific performance of that contract. A contract is an agreement enforceable by law. Obviously, it is the parties to the contract who can enforce the contract against each other. Rather, the general rule under the law of contract is that only parties to the contract can sue and the stranger to the contract cannot sue. Therefore, primarily the parties of the contract may obtain specific performance of the contract. Section 37 of the Contract Act states that the parties to the contract, as a general rule, are to perform their respective promises and, therefore, specific performance may be obtained by any party to the contract. In case of sale of property, only the parties to the contract can be made parties to the suit. In a contract of agency, in the absence of any contract, only the principal can sue on the contracts, and an agent can neither personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. (2) A Representative in Interest may obtain specific performance of a contract,:- Representative in interest includes any assignee or transferee of interest or a legal representative, viz., executor or administrator after the death of the principal.

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A legal representative may sue provided that the contract is not dependent on the personal skill or quality of the promisee. If the contract depends on the personal skill of the parties, for instance, a contract to paint a picture. or write a book, the duty under the contract ends by the death, and legal representatives cannot claim specific performance. Similarly, a contract dependant on personal qualities, such as contract to marry, gets dissolved on the death of any party to it. In case of assignment, the party to a contract himself so desires, and therefore, the assignee of a contract may obtain specific performance of the contract. If, however, the contract depends on the personal quality of the assignor, or the contract bars any assignment, or the assignor has only a personal Interest in the contract, the assignment cannot confer any right of specific performance on the assignee. (3) A beneficiary, under the contract may obtain specific performance of the contract where the contract is a settlement on marriage, or a compromise of doubtful rights between the members of the same family. Although as a general rule only parties to a contract can sue on it, but the provision contained in Section 15(c) constitutes an exception to the same. In Khwaja_Muhammad Khan v. Husalni Begum, there was agreement between the father of the boy and the father of the girl, whereby the boys fathers promise In favour of the girl was held to be enforceable, by the Privy Council. According to the facts of the case, there was an agreement between the fathers of a boy and a girl that if the girl (plaintiff In this case) married a particular boy, the boys father (defendant in this case) would. pay certain personal allowance known as Kharchi-i-pandan (beetle-box expenses) or pin money to the plaintiff. It was also mentioned that a certain property had been set aside by the defendant and this allowance would be paid out of the income of that property. The plaintiff married the defendants son but the defendant failed to pay the allowance agreed to by him. In an action by the plaintiff to claim this allowance the defendant contended that his contract to pay the allowance had been made only with the plaintiffs father and not with the plaintiff, she being a stranger to the contract cannot sue. The defendants contention was that Tweddle v. Atkinson, which debars an action by a stranger to the contract, should be applicable in th1 case. It was held that in the present case the basis of the plaintiffs claim being a specific charge on immovable property in her favour she is entitled to claim the same as a beneficiary, and as such, the common law rule is not applicable to the facts and circumstances of the present case. It was observed : Here the agreement executed by the defendant specifically charges Immovable property for the allowance which he binds himself to pay to the plaintiff. She is the only person beneficiary entitled under It although (she Is) no party to the document, she is clearly entitled to proceed in equity to enforce her claim. Provisions for marriage expenses or maintenance under a family arrangement :- Where, under a family arrangement, the contract is intended to secure a benefit to a third party he may sue in his own right as a beneficiary. Such an action has been allowed in many cases where, on the partition of joint family property between the male members, a provision Is made for the maintenance of the female members of the family.
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Family Compromises :- The exception contained in Section 15(c) also covers family compromises, Le., when, (I) there is compromise of doubtful rights, (ii) between members of the same family. The family compromise or settlement should be properly arrived at. It should involve a family arrangement making a bona fide settlement of disputes, which may be either existing or future disputes. There should be fair settlement of doubtful rights between members of the same family. The specific performance in such a case can be enforced by the beneficiary of the family settlement even though he is not a party to the contract. (4) Where the contract has been entered into by tenant for life in due course of a power, the remainderman can specifically enforce the contract. (5) A reversioner In possession may require specific performance, where the agreement, is a covenant entered into with his predecessor-in-title and the reversioner is entitled to the benefit of such covenant. (6) A reversioner in remainder may specifically enforce the contract, where the agreement is such a covenant, and the reversioner is entitled to the benefit thereof and will sustain material injury by reason of its breach. A reversioner is a person who may claim the reversion either as the grantor, when the lesser estate granted has terminated, or the successor of such a grantor. (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 can specifically enforce the contract. (8) When the promoters of a company have, before its incorporation, entered into a contract for the purposes of the company, and such contract is warranted by the terms of the incorporation, the company may specifically enforce the contract Provided that the company has accepted the contract and has communicated such acceptance to the other party to the contract. Mukesh Kumar v. Col. Harbans Waratch, (1999) 2 SCC 380: In order to obtain a relief of specific performance, all co-contractees must be before the court but all of them need not to be on the same side others can be joined as co-defendants. Where there is a single indivisible contract to convey land to several persons, some of them only cannot seek specific performance if the others do not want it. T.M. Balkrishna Mudaliar v. M. Satyanarayan Rao, AIR 1993 SC 2449: A contract of right to repurchase was not personal but it is assignable. An assignee fall within the meaning of representative in interest as contemplated under clause (6) of section 15 acquired a valid title to claim specific performance.
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Persons who cannot claim specific performance (Section 16) :- According to Section 16 specific performance of a contract cannot be claimed in favour of the following persons : (1) A person who could not b entitled to recover compensation for the breach of a contract, he cannot specifically enforce that contract, For instance, when a person has entered into a contract on behalf of a principal, he cannot personally enforce the same. Similarly, if A, in the character of agent for B, enters into an agreement with C to buy Cs house. A is in reality acting, not as agent for B, but on his own account. A cannot enforce specific performance of the contract. (2) Specific performance cannot be claimed in favour of a person in the following situations (i) who becomes incapable of performing the contract that remains to be performed by him or (ii) who violates any essential term of the contract that remains to be performed by him or (iv)who acts in fraud of the contract or (v) who wilfully acts in variance with, or in subversion f, the relation intended to be established the contract. The above mentioned situations may be explained through the following illustrations (1) A contracts to sell B a house and to become tenant thereof for a term of fourteen years from the date of the sale at a specified yearly rent. A becomes insolvent (Incapable of performing his contract). Neither he nor his assignee can enforce specific performance of the contract. (2) A contracts to sell a house and garden in which there are ornamental trees, a material element in the value of the property as a residence. A, without Bs consent, fells the trees. A cannot enforce specific performance of the contract. (3) A holding land under a contract with B for a lease, commits waste, or treats the land in an unhusbandlike manner. A cannot enforce specific performance of the contract. (4) A contracts to let, and B contracts to take, an unfinished house, B contracting to finish the house and the lease to contain covenants on the part of A to keep the house in repair. B finishes the house in a very defective manner : he cannot enforce the contract specifically, though A and B may sue each other for compensation for breach of it. The same would be the position if the purchaser of immovable property is not willing to pay the price in accordance with the contract
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while the time is of the essence of the contract, Such a purchaser will not be granted specific performance of the contract. (3) A person cannot be granted specific performance If he fails to aver and 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. This does not cover such terms the performance of which has been either prevented or waived by the defendant. When a person himself is at fault and is not ready and willing to perform essential terms of the contract he cannot procure specific performance. If, however, he is not at fault but the defendant has prevented or waived performance of the contract by the plaintiff, the plaintiffs right of obtaining specific performance of the contract is not affected. It may be noted that for the purpose of Section 16(c) discussed above (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 aver performance of, or readiness and willingness to perform, the contract according to its true construction. Purchaser ready and willing to perform the contract :In Vimal Kumar v. Gyanchand, the purchaser paid the entire consideration of the land and was given possession of the same, but the registration had not been done as the land was encumbered. The purchaser came to know that the seller had executed second sale deed for the same land illegally. Thereupon the purchaser gave notice to the seller to register sale-deed within 3 days of service of the notice in the name of the plaintiff purchaser. It was held that the pleadings and evidence reflected that the purchaser was ready and willing to perform his part of the contract, be., he will bear the expenses of the execution of the sale deed. The plaintiff was, therefore, held entitled to the specific performance of the contract, be., registration of land in his name. Purchaser ready and willing to perform is entitled to specific performance :- A person willing to perform his part of the contract is entitled to specific performance. In Hakhn Slngh v. Ram Snehi, the purchaser was present before the sub-Registrar on the date mentioned in the notice sent to him by the vendor. On the other hand, inspite of the notice, the vendor failed to appear before the sub-Registrar. It was held that the purchaser was ready and willing to perform his part of the contract and hence he was entitled to specific performance. Merely because requisite court fee has not been paid by the purchaser at the time of filing of the suit and several adjournments are sought to pay the court fee, no presumption can be raised that the buyer is not ready and willing to perform the contract. Readiness and willingness to perform In spirit :- It has been held by the Supreme Court in Syed Dastagir v. T.R. Gopalkrishna Setty, the readiness and willingness to perform the contract as required by Explanation (i) to Section 16(c) means compliance in spirit and substance and not in letter and form. If the plaintiff avers that he has already paid the substantial amount and makes
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payment of the balance of Rs. 120 in the court without the courts order the plaintiff is supposed to be ready and willing to perform the contact and the delayed payment of the balance of Rs. 120/- is not to be construed adversely against the plaintiff. The plaintiff was therefore, held entitled to the specific performance of agreement to sell the properties. The readiness and willingness to perform the contract as required by Explanation (i) to section 16(c) means compliance is spirit and substance and not in letter and form. A person who makes himself a party to an illegal contract cannot enforce his right under this section. Plaintiff not ready and wining to perform :- the plaintiff himself is not ready and willing to perform his part of the contract, he is not entitled to specific performance. In Voleti Rangaiah v. Adapa Satyanarayana, there was agreement to sell property. It was stipulated that the payment of balance sale consideration was to made on a specified date and non-payment on the specified date would automatically result in the cancellation of the agreement. The plaintiff vendee failed to make the payment on the specified date although he was present in the sub-Registrars office on that day. The plaintiff sought specific performance of the contract. It was held the time being of the essence of the contract, non- payment on specified date, the plaintiff was held to be not ready and willing to perform the contact. Mere presence in sub-Registrars office was not enough. Hence, plaintiff was not entitled to specific performance of the contract. Plaintiff to aver and prove readiness and willingness to perform :- It has been held by the Supreme Court in Rain Awadh (dead) by LRs. and others v. Achhaibar Dubey, that the specific performance may not be granted to the plaintiff who fails to aver and prove the he is ready and willing to perform his part of agreement. Rakha Singh v. Babu Singh, AIR 2002 P&H 270: Where the plaintiff showed that he was ready and willing to pay the purchase price and continued to be so, the failure to plead that he had money in the bank and had not withdrawn it, was immaterial because their was a matter of evidence and had not to be pleaded.

Pushparani S. Sundaram v. Pauline Manomani James, (2002) 9 SCC 582 When the purchaser had not sent any communication to the vendor regarding his readiness and willingness, had paid only an insignificant amount as advance, had not obtained permission from Ceiling Authorities had taken no steps towards the valuation of the superstructure on the land or required under the sale agreement, neither led evidence nor entered the witness box in support of his willingness, the Supreme Court held that the High Court had rightly upheld the dismissal of his suit for specific performance. Manikial Mukherjee v. Commissioner of Sanchaita Investment Calcutta, AIR 1993 SC 1571: A right to recover loan amount against an unattached property is not sustainable.

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Chand Rani v. Kamla Rani, AIR 1993 SC 1742: In the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not being the essence of the contract the court may infer that it is to be performed in a reasonable time. The Supreme Court, in M/S J.P.Builders & Anr. vs A.Ramadas Rao & Anr., has examined one of the most crucial aspects involved in a suit for specific performance. To succeed in a suit for specific performance the Plaintiff must show that he is ready and willing to perform the contract and that he has sufficient means to honour his obligations under the contract. Reiterating the aforesaid settled principles, the Supreme Court has observed as under; Readiness and Willingness 8) Section 16(c) of the Specific Relief Act, 1963 provides for personal bars to relief. This provision states that specific performance of a contract cannot be enforced in favour of a person, a) who would not be entitled to recover compensation for its breach; 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 wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or c) who fails to aver and 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 the performance of which has been prevented or waived by the defendant. Explanation.- For the purposes of clause (c),- (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 aver performance of, or readiness and willingness to perform, the contract according to its true construction." Among the three sub-sections, we are more concerned about sub-section(c). "Readiness and willingness" is enshrined in clause (c) which was not present in the old Act of 1877. However, it was later inserted with the recommendations of the 9th Law Commission's report. This clause provides that the person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terms of the contract which are to be performed by him. 9) The words "ready" and "willing" imply that the person was prepared to carry out the terms of the contact. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness. 10) In N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao & Ors., (1995) 5 SCC 115 at para 5, this Court held: ".....Section 16(c) of the Act envisages that plaintiff must plead and prove that he had
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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 those terms the performance of which has been prevented or waived by the defendant. 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 is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit alongwith other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was always ready and willing to perform his part of the contract." 11) In P.D'Souza vs. Shondrilo Naidu, (2004) 6 SCC 649 paras 19 and 21, this Court observed: "It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstance of each case. No strait-jacket formula can be laid down in this behalf.... The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale." 12) Section 16(c) of the Specific Relief Act, 1963 mandates "readiness and willingness" on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous "readiness and willingness" to perform the contract on his part from the date of the contract. The onus is on the plaintiff. It has been rightly considered by this Court in R.C. Chandiok & Anr. vs. Chuni Lal Sabharwal & Ors., (1970) 3 SCC 140 that "readiness and willingness" cannot be treated as a straight jacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is noncompliance with this statutory mandate, the Court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. "Readiness and willingness" to perform the part of the contract has to be determined/ascertained from the conduct of the parties. Section 17. Contract to sell or let property by one who has no title, not specifically enforceable.(1) A contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor
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(a) who, knowing 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, as far as may be, to contracts for the sale or hire of movable property. Illustrations (1) A without Cs authority, contracts to-sell to B an estate which A knows to belong to C. A cannot enforce specific performance of this contract, even though C is willing to confirm it. (2) A bequeaths his land to trustee, declaring that they may sell it with the consent in writing of B. B gives a general prospective assent in writing to any sale which the trustee may make. The trustees then enter into a contract with C to sell him the land. C refuses to carry out the contract. The trustee cannot specifically enforce this contract. As, in the absence of Bs consent to the particular sale to C, the title which they can give is, as the law stands, not free from reasonable doubt. (3) A, being in possession of certain land, contracts to sell it to Z on enquiry it terms out that A claims the land as heir of B who left the country several years before, and is generally believed to be dead, but of whose death there is no sufficient proof A cannot compel Z specifically to perform the contract. Section 20. Discretion as to decreeing specific performance.(1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance(a) 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; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non- performance would involve no such hardship on the plaintiff;
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(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. Explanation 1.- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2.- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.

Discretion of the Court :- It has been noted above that the jurisdiction of the Court to grant specific performance is discretionary. However, the discretion of the Court is not to be exercised arbitrarily. It has to be sound and reasonable and is to be guided by judicial principles. The grant or non-grant of specific performance is subject to correction by court of appeal. Discretion based on justice, equity and good conscience :- Granting specific performance is at the discretion of the court. It has been held by the Supreme Court in Gobind Ram v. Glan ,Chand AIR. 2000 S.C. 3106 that in exercising discretion the court is to be guided by principle of justice, equity and good conscience. there was agreement for the sale of immovable property. The respondent had paid the earnest money but the appellant failed to execute the sale deed. The appellant, however, offered to pay money to the respondent to cancel the contract. The respondent, on the other hand, deposited the balance of the consideration. The appellant was trying to wriggle out of the contract due to esciation of the prices of the property. It was held that in the above circumstances specific performance, rather than the compensation, was the proper relief. However, the respondent was directed to pay further amount to the appellant on his giving possession of property. When the court has discretion to refuse specific performance :- In the following cases the court may properly exercise discretion not to decree specific performance : (1) Where the terms of the contract or the conduct of the parties at the time of making the contract or the other circumstances at the time of making the contract gives an unfair advantage to the plaintiff over the defendant, even if it is not a voidable contract.
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(2) Where the performance of the contract would cause unforeseeable hardship to the defendant, whereas non-performance will not cause any hardship to the plaintiff. Mere inadequacy of consideration or its being onerous to the defendant, or improvident in its nature shall not mean any unfair advantage to the plaintiff or unreasonable hardship to the defendant as contemplated above. (1) Unfair advantage to the plaintiff over the defendant :- It has been noted above that specific performance may be refused when the contract involves unfair advantage to the plaintiff over the defendant. This may be explained through the following illustrations A, a tenant for life of certain property, assigns his interest therein to B. C contracts to buy, and B contracts to sell, that interest. Before the contract Is completed, A receives a mortal injury, from the effects of which he dies the day after the contract is executed. If B and C were equally ignorant or equally aware of the fact, B is entitled to specific performance of the contract. If B knew the fact and C did not, specific performance of the contract should be refused to B. Sh. M.K. Sehgal Versus Smt. Mohinder Kaur AIR 2006 DHC 1. The plaintiff filed a suit for permanent injunction and specific performance against the defendant in relation to the built-up property bearing no.100, Block no.B, Jhilmil Colony, Shahdara, Delhi admeasuring 57.50 sq. yards, in furtherance to the agreement to sell entered into between the parties on 20.01.2004. Vide the above agreement, the defendant had agreed to sell the said property to the plaintiff, for a total consideration of Rs. 19 lacs and in terms thereof a sum of Rs. 6 lacs was received by the defendant from the plaintiff. The balance amount of Rs. 13 lacs was payable at the time of the registration of the Sale Deed. The sale deed was executed on 18.2.2004 and possession of the vacant property was to be delivered to the plaintiff on the said date. Having failed to get the sale deed registered in its favour and having not received any response from the defendant, the plaintiff on 1.2.2004 visited the suit property and learnt from a Real Estate Agent in the vicinity namely M/s. Bhasin Associates that the defendant had approached them with an intention to sell the said property. The intention of the defendant was to get more price and to commit breach of the terms of the agreement. Apprehending that the defendant would sell the said property to a third party and create further complications for the plaintiff, the plaintiff filed a suit for injunction and specific performance. At this stage, it would be appropriate to make a reference to the judgment in the case of Rattan Lal Vs. Smt.Bharpai & Ors 1998 (4) ICC 412, where the Court after considering the law at length and the judgment of the Supreme Court as well as of that Court in the case of Ram Dass Vs. Ram Lubhaya PLR 1998 (2) 326, held as under :"It is clear from the above finding that no fault can be attributed to the plaintiffs. They never attempted to gain undue advantage over the defendant. The plaintiffs were always willing and ready to perform their part of the agreement and had gone to the Court Complex with the money on the appointed dates. The stand of the
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defendant is totally inconsistent. No averments of fraud have been pleaded. The defendant claims to have gone to the court complex to perform the agreement. However, at no point of time he pleaded that plaintiffs had breached the terms of the agreement and as such the earnest money was liable to be forfeited. Coming to the legal aspect of the matter in the case of S.Rangaraju Naidu Vs. S.thiruvarakkarasu, the Supreme court never intended to lay down as a principle of law that specific performance should be denied, if alternative relief is asked for. Keeping in view the special facts of that case, as there was undue delay on the part of the plaintiff, the Hon'ble Supreme Court had denied the specific performance. Their Lordships specifically observed that the order is being passed in view of the fact of that case. This court in a recent judgment in the case of Ram Dass Versus Ram Lubhaya PLR, 1998 (2) 326 considered this aspect at a great length and observed as under :"Coming to the second contention, the learned counsel for the appellant has relied upon the judgment of the Hon'ble Supreme Court in the case of Kanshi Ram Vs. Om Parkash Jawal and others JT 1996 (4) SC 733 and Rangaraju Naidu Vs. S.Thiruvarakkarasu AIR 1995 SC 1769. The principles of law enunciated in these case is the reiteration of settled principles of law. The principle of equity good conscience and fairness being very foundation for grant of relief of specific performance is the concept not introduced by judicial pronouncement but explicitly indicated by the Legislature in the provision of Section 20 of the Specific Relief Act. The very language of section 20 spells out and indicates the wide discretion that is vested in the Court of competent jurisdiction to grant or decline to grant a relief of specific performance for transfer of immoveable property. The guiding principles for determination of such controversies have been consistently cogitated by various courts but to a common end. The common weal sought to be achieved is to avoid resultant undue hardship to one party while avoiding undue gain to the other by mere lapse of time attributable to erring party. An alternative prayer by a plaintiff in a suit cannot be construed as a waiver or abandonment of the main relief in the suit. An alternative prayer is a relief which is claimed by the party if the party is found to be not entitled to the principle of main relief claimed in the suit. The submission of the learned counsel appears to be totally contradictory to the well accepted concept of pleadings and cannot be accepted. The jurisdiction vested in the Court to decline specific performance and grant alternative relief is a jurisdiction of equity and good conscience and must be exercised in consonance of the settled principles of law. Even principles emerging from judicial verdicts which are to guide the courts concerned while passing such a
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decree and which have been specifically acted upon, are still open to correction by the court of appeal. The provisions indicate the intention of the Legislature to vest the Court with the wide discretion but still define the extent of caution with which such power should be exercised. Settled canons of limitations on the discretion of the court have been well defined by various judicial pronouncements. Precept of equity are accepted good in law. Reliefs in equity are founded on the principle of good conscience and grant of effective relief. The maxim Actio de in rem verso appears to be the underlining feature under the provision of Section 20 of the Act. Exercise of judicial discretion does not admit a limitation extending to a prohibition for grant of relief of specific performance. It is only where the judicial conscience of the court is pricked to an extent that the Court first is able to see inequities, imbalances created against one party and in favour of other, that it would consider exercising its discretion under these provisions. The scheme of this Act clearly shows that where a contract is proved in accordance with law and party has acted without undue delay and has pursued its remedy in accordance with law without infringing the settled canon of equity the grant of specific relief by enforcing the contract would certainly be a relief which equity would demand. The Legislative intention behind Section 20 cannot be stated to be that a party first fails to perform its part of the agreement later contests litigation on frivolous basis then that party cannot be permitted to raise a plea in equity that value of the property has increased disproportionately resulting in an undue advantage to the plaintiff in a suit. Resultantly it would not be fair to deny specific performance against such a party. A lawful agreement being proved and judicial conscience of the court being satisfied the equity would demand enforcement of an agreement rather than granting an alternative relief of damages to the plaintiff. It need not be reiterated that equity must give relief where equity demands. Equitas nuquam liti ancillatur ubi remedium potest dare is a clear illutration which has been duly accepted by the Indian Courts. The time taken by the courts in deciding suit or appeals would normally be not permitted to work to the disadvantage of the party to the lis. Acts of the courts shall cause prejudice to none was so stated by the Hon'ble Apex Court in the case of Atma Ram Mittal Vs. Ishwar Singh Punia AIR 1988 SC 2031. xx xx xx

Further more the courts have also found that the respondent was always ready and willing to perform his part of the agreement. The litigation before the Courts has been prolonged for all this time by the appellant without any fruitful result. In these circumstances I am unable to see any equities in favour of the appellant and reliance placed upon the observations of the Hon'ble Supreme Court in the case of S.Rangaraju Naidu Vs Thiruvarakkarasu (supra) is misplaced one. No facts and circumstances have been brought on the record nor any evidence has been adduced to show that the case of the appellant was covered under any of the exceptions carved under sub clause (a) to (c ) of sub Section (2) of Section 20. The appellant
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has suffered no unfair disadvantage. No such hardship has been caused to the appellant which would justify nonperformance on his part. The appellant has also not been placed at any inequitable situation. Equities have to be balanced. It is only when totally unequitable and unjust and unfair advantage is given to one party that court has to consider such factors. The conduct of the appellant is certainly not worthy of claiming any special equities while conduct of the respondent has been to the accepted standard demanded by the equity and he has persued his remedy carefully and in the earliest point of time, while things are taken to be done in their normal course. Reference is made to Krishna Singh Vs. Krishna Devi 1994(4) S.C.C. 18." In view of the above settled principles of law, the contention raised on behalf of the defendant is without merit. The plaintiffs had no point of time delayed the legal remedies available to them and acted with prudence and reasonable expectation." The principle of wide discretion vested in the Courts, in terms of Section 20 of the Specific Relief Act has consistently been upheld by the Courts. No doubt such discretion is to be guided by settled principles of law and is applicable to the facts of a given case. It is a well settled norm that Court may amplify, extend justice but within the prescribed limitation of its jurisdiction. This was also accepted by the Supreme Court in the case of Her Highness Maharani Shantidevi P. Gaikwad Vs. Savjibhai Haribhai Patel & Ors. JT 2001 (4) SC 43. The relevant extract of the judgment is as under :"The grant of decree for specific performance is a matter of discretion under Section 20 of the Specific Relief Act, 1963. The court is not bound to grant such relief merely because it is lawful to do so but the discretion is not required to be exercised arbitrarily. It is to be exercised on sound and settled judicial principles. One of the grounds on which the Court may decline to decree specific performance is where it would be inequitable to enforce specific performance. 7. The discretion of the court is a judicial discretion and must have a plausible reasoning which can be sustained in law. The reasoning is the soul of any judgment and reasoning ought to be within the four corners of the statute. A reason which is alien to the provisions of law where the legislature has opted to provide such limitations illustratively, would hardly stand the scrutiny of law. 8. Sub-Section (2) of Section 20 further clearly indicates the kind of cases where it is proper for the court to exercise its discretion in not decreeing the suit for specific performance. The present case does not fall in any of the clauses (a) to (c) of the sub-section (2). The discretion must be exercised within the circumscribed limits of the dos and dont's enumerated by the Legislature in Section 20 of the Act.

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Plaintiff, taking unfair advantage :(2) When specific performance would involve unforseeable hardship to the defendant :- The following illustration explain the situation where the specific performance of the contract would Involve unforseeable hardship to the defendant, but no hardship would be caused to the plaintiff A Is entitled to some land under his fathers will on condition that, if he sells it within twenty-five years, half the purchase-money shall go to B. A forgetting the condition, contracts, before the expiration of the twenty-five years, to sell the land to C. Here, the enforcement of the contract would operate so harshly on A, that the Court will not compel its specific performance in favour of C. In K. Narendra v. Riviera Apartments (P) Ltd.1999 VI AD (S.C.) 256 = (1999) 5 SCC 77, the Court observed thus: 29. Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. Performance of the contract involving some hardship on the Defendant which he did not foresee while non- performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the Defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the Defendant or unforeseeable hardship on the Defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy, (1996) 5 SCC 589 by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court. 30. Chitty on Contracts (27th Edn., 1994 1 1296) states: Severe hardship may be a ground for refusing specific performance even though it results from circumstances which arise after the conclusion of the contract, which affect the person of the Defendant rather than the subject- matter of the contract, and for which the plaintiff is in no way responsible. In Gobind Ram v. Gian Chand, 2000 VII AD (S.C.) 389 = (2000) 7 SCC 548, the Court observed thus: 7. It is the settled position of law that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience.
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. A.C. Arulappan v. Ahalya Naik, (2001) 6 SCC 600 The Court observed thus:- 7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the Defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the Defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff." "11. Even in these circumstances, the learned Single Judge had declined to pass a decree for Specific Performance. The decisions in Sardar Singh v. Krishna Devi, (1994) 4 SCC 18 as well as K. Narendra and Nirmala Anand v. Advent Corporation Pvt. Ltd., 2002 V AD (S.C.) 239 = (2002) 5 SCC 481 were noted. These decisions emphasize the discretionary nature of the relief of Specific Performance. The learned Single Judge has kept in perspective the conduct of the Respondent/Owner in that he had endeavoured to return the "Token Advance" of `50,000/- within ten days of the event. The learned Single Judge has further noted that since the so-called repudiation or cancellation, or as best put - refutation, had taken place within ten days, no damage by way of loss of profit because of escalation in prices would have resulted to the plaintiff/Appellant. He accordingly directed the plaintiff to revalidate the draft of `50,000/- sent to the plaintiff as a return of the "Token Advance" along with ` 1,00,000/- as damages. Mindful of the decision in N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, 1995(5) SCC 115, the learned Single Judge has also found it relevant that the plaintiff was dealing in real estate." (Emphasis added) A.C. Arulappan v. Smt. Ahalya Naik, AIR 2001 SC 2783 - The Honble Supreme Court held as under:- "7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff. 8. In D. Anjaneyulu vs. Damacherla Venkata Seshaiah, AIR 1987 SC 1641, the High Court declined to grant a decree for specific performance in favour of the plaintiff, even though the defendant was guilty of breach of agreement. That was a case where the defendant had constructed costly structures and if a decree for specific performance was granted, the defendant would have
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been put to special hardship. This Court directed the defendant to pay compensation to the plaintiff. 9. In Parakunnan Veetill Joseph's Son Mathew vs. Nedumbara Kuruvila's Son, AIR 1987 SC 2328, this Court cautioned and observed as under: "Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter in the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff". 10. In Lourdu Mari David vs. Louis Chinnaya Arogiaswamy, AIR 1996 SC 2814, the plaintiff, who sought for specific performance of an agreement to purchase immovable property, filed a suit with incorrect and false facts. In the plaint, it was alleged that the plaintiff was already given possession of Door No.2/53 as a lessee and he was given possession of Door No. 1/53 on the date of the agreement itself. But he did not give any evidence that he had got possession of Door No.1/53 on the date of agreement. It was found that his case as regards Door No.1/53 was false. He also alleged that he had paid Rs.400/- in addition to the sum of Rs.4,000/- paid as advance, but this was proved to be an incorrect statement. He alleged that the third defendant had inspected the house during the course of negotiations, but this also was found to be false. This Court held that it is settled law that the party who seeks to avail of the jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. In other words, the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief. 11. In Gobind Ram vs . Gian Chand, AIR 2000 SC 3106, it was observed in paragraph 7 of the judgment that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has consider whether it would be fair, just and equitable. The court is guided by the principles of justice, equity and good conscience."(Emphasis added) 11. Bal Krishna v. Bhagwan Das, AIR 2008 SC 1786 The Honble Supreme Court held as under:"8......It is also settled by various decisions of this Court that by virtue of Section 20 of the Act, the relief for specific performance lies in the discretion of the court and the court is not bound to grant such relief merely because it is lawful to do so. The exercise of the discretion to order specific performance would require the court to satisfy itself that the circumstances are such that it is equitable to grant decree for specific performance of the contract. While exercising the discretion, the court would take into consideration the circumstances of the case, the conduct of parties, and their respective interests under the contract. No specific performance of a contract, though it is not vitiated by fraud or misrepresentation, can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee. In other words, the court's discretion to grant specific performance is not exercised if the contract is not equal and fair, although the contract is not void." (Emphasis added)
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(3) When it is inequitable to enforce a contract :- The court may also properly refuse specific performance where the defendant entered into the contract under the circumstances which makes it inequitable to enforce specific performance, even though the contract is not rendered voidable. When specific performance may be granted by the Court :- (1) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. This may be explained through the following illustration A sells land to a railway-company, who contract to execute certain work for his convenience. The company take the land and use it for their railway. Specific performance of the contract to execute the works should be decreed in favour of A. (2) The Court shall not refuse to any party specific performance of the contract merely on the ground that the contract is not enforceable at the instance of the other party. It means that if the contract is enforceable at the instance of the plaintiff who is seeking its specific performance, the relief shall not be refused to him merely because the contract is not enforceable at the instance of the defendant. The plaintiff should come with clean hands :When the plaintiffs have concocted documents on the basis of which they claim specific performance, the court shall have no hesitation in negativing specific performance for the reason that the plaintiffs have not come forward with clean hands in asking for equitable relief. There should be a valid concluded contract :If there is no concluded contract between the parties and, moreover, the plaintiff fails to prove that he is willing to perform his part of the contract, the court shall refuse to grant specific performance of the contract. In Ganesh Shet v. C.S.G.K. Shetty, there were negotiations for the sale of joint property at Shimoga, Karnataka State, which was jointly owned by three brothers. One of the brothers who negotiated with the purchaser told that the question of consideration had yet to be discussed by him with his brothers. Tenor of correspondence between the parties also indicated that sale consideration had not yet been settled between the parties. It was held that there was no concluded contract between the parties and, therefore, specific performance of the contract could not be granted. If the agreement between the parties is not enforceable specific performance of the same cannot be granted. In State Bank of India v. Aditya Finance & Leasing Co. Pvt. Ltd. there was an agreement regarding lease of property earmarked for residential purpose. The same was proposed to be used for non-residential purpose in contravention of Section 14 of the Delhi Development Act, 1957. The contract in contravention of the Delhi Development Act was prima facie unlawful
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and void under Section 23 of the Indian Contract Act, 1872. It was held that in such a situation specific performance of the contract cannot be granted. M. Meenakshi & Ors vs Metadin Agarwal (D) By Lrs. & Ors AIR 2006 SC :Section 20 of the Specific Relief Act confers a discretionary jurisdiction upon the courts. Undoubtedly such a jurisdiction cannot be refused to be exercised on whims and caprice; but when with passage of time, contract becomes frustrated or in some cases increase in the price of land takes place, the same being relevant factors can be taken into consideration for the said purpose. While refusing to exercise its jurisdiction, the courts are not precluded from taking into consideration the subsequent events. Only because the Plaintiff-Respondents are ready and willing to perform their part of contract and even assuming that the Defendant was not entirely vigilant in protecting their rights in the proceedings before the competent authority under the 1976 Act, the same by itself would not mean that a decree for specific performance of contract would automatically be granted. While considering the question as to whether the discretionary jurisdiction should be exercised or not, the orders of a competent authority must also be taken into consideration. While the court upon passing a decree for specific performance of contract is entitled to direct that the same shall be subject to the grant of sanction by the concerned authority, as was the case in Mrs. Chandnee Vidya Vati Madden v. Dr. C.L. Katial and Others [AIR 1964 SC 978] and Nirmal Anand v. Advent Corporation (P) Ltd. and Others [(2002) 5 SCC 481]; the ratio laid down therein cannot be extended to a case where prayer for such sanction had been prayed for and expressly rejected. On the face of such order, which, as noticed hereinbefore, is required to be set aside by a court in accordance with law, a decree for specific performance of contract could not have been granted. Sardar Singh vs Krishna Devi AIR 1994 SCC (4) 18 :- Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief, merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract. Vimleshwar Nagappa Shet vs Noor Ahmad Sheriff And Ors on 11 May, 2011 9) It is settled law that Section 20 of the Specific Relief Act, 1963 confers discretionary powers. [vide: M. Meenakshi & Ors. vs. Metadin Agarwal (2006) 7 SCC 470, Nirmala Anand vs. Advent Corporation (P) Ltd. & Ors. (2002) 5 SCC 6 21. Power to award compensation in certain cases.(1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.
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(2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly. (3) If, in any such suit, the court decides that specific performance ought to be granted, but that is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly. (4) In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in section 73 of the Indian Contract Act, 1872 (9 of 1872 ). (5) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint: Provided that where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation. Explanation.The circumstance that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section.

Power to award compensation in a suit for specific performance (Section 21) Section 21 contains the following rules regarding grant of compensation in a suit for specific performance of contract. (1) Plaintiff may claim compensation also :- The plaintiff filing the suit for specific performance of a contract. may also claim compensation for breach of contract. Such compensation may be claimed either In addition to specific performance or in lieu thereof. In B.R. Mulani v. Dr. A.B. Aswathaflarayalla, the Supreme Court awarded compensation to the plaintiff in lieu of specific performance of the contract. The S.C. also decreed suit for repayment of monies paid against mortgage with interest accruing on that amount. It may be noted that Section 21(5) also specifically provides that no compensation shall be awarded under Section 21 unless the plaintiff has claimed such compensation in his plaint. However, where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation. (2) Compensation when specific performance ought not to be granted Section 21(2) :- If, in Zany suit for specific performance the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly. In jamila Khatoon v. Ram Niwas Gupta, there was an agreement for sale of certain property by the defendant to the plaintiff. The plaintiff prayed for specific performance of the contract and also
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prayed for the alternative remedy, i.e., refund of earnest money together with damages. There was inordinate delay in the filing of the suit by the plaintiff, though the suit was filed within the limitation period. It was held that since there was considerable delay in the presentation of the suit without any proper explanation for the same, specific performance ought not to be granted to the plaintiff. The plaintiff was allowed the alternative relief claimed by him and decree for refund of earnest money alongwith simple Interest of 9% p.a. from the date of presentation of the suit alongwith damages of Rs. 5,000/- was passed in favour of the plaintiff. It may be noted that the mere fact that the contract has become incapable of specific performance does not preclude the Court from exercising the power conferred by Section 21. The Court may grant compensation in lieu of specific performance in such a case. (3) When specific performance is not enough to satisfy the justice of the case Section 21(3):- If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly. Standard of compensation Section 2 1(4):- In determining the amount of any compensation award under Section 21, the court shall be guided by the principles specified in Section 73 of the Indian Contract Act, 1872. Veluyudhan Sathyadas vs Govindan Dakshyani AIR 2002 (5) SC 357 2. A suit was filed by the respondent for specific performance in respect of the property measuring about 21 cents which was agreed to be sold for Rs. 3,150/- at the rate of 150 per cent under an agreement dated 9.8.1982. 3. The trial court on the basis of the proceedings placed before it raised the following issues: 5} Whether the plaintiff is entitled to reliefs claimed in the plaint? 7. The High Court after explaining the legal position in relation to Section 20 of the Act stated as follows:- "On an advertence to the materials referred to by the lower appellate, court in its judgment and the failure of the plaintiff to properly explain some of the circumstances surrounding the alleged transaction, I am of the view that this is a fit case where the discretion ought not to be exercised in favour of the plaintiff. I am satisfied that this is a case where the plaintiff should be given only a decree for recovery of the advance paid by him at the time of entering into the agreement for sale and some compensation in lieu of specific performance as provided by Section 21(2) of the Specific Relief Act. I think that a sum of Rs. 1000 would be the reasonable compensation in lieu of specific performance in terms of Section 21(2) of the Specific Relief Act in addition to the grant of a decree for return of the advance with interest at 10% per annum." 8. It is clear that mere establishment of the facts that the agreement for sale had been entered into is not sufficient to grant a decree for specific performance and if the circumstances as indicated in Section 20 of the Act, exist in a particular suit, the court ought to certainly exercise its discretion in
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favour of the defendant and give lesser or limited relief to the plaintiff as indicated in Section 21 of the Act. Therefore, in the present case while the High Court referred to certain aspects rather vaguely without clearly setting out what those aspects are, the order of the High Court cannot be sustained. Lrs Of Bhinva Ram vs Sohan Ram on 28 April, 2005 Equivalent citations: RLW 2005 (4) Raj 2433, 2005 (4) WLC 34 Section 21 of the Specific Relief Act reads thus: 77. In a plaint omitting to state averments required by Section 16(c) of Act, the significance of the claim of relief of compensation not in addition but in substitution of the relief of specific performance cannot be ignored. 78. Mere omission to state the elements as required by Section 16(c) may not by itself be sufficient to deny specific performance if otherwise the plea could be culled out from the pleadings and material on record taken as a whole; and, mere claim of refund of the purchase price with interest may also by itself be not sufficient to deny specific performance, if otherwise, found available; but scenario in the present case is that the want of necessary pleadings and proof of performance or continuous willingness to perform is coupled with the demand for refund of entire consideration. 79. This Court is clearly of opinion that want of necessary plea and proof coupled with demand for refund strikes at the bottom of the case of the plaintiff. It is not a case of mere omission to plead and show willingness to go along with contract, it is further a case of showing unwillingness. The plaintiff has claimed a relief which it was not necessary to claim and has omitted to plead which it was necessary to plead. 80. In the present case, the plaintiff has not only failed to aver and prove that he has performed or has always been ready and willing to perform his part of the contract but has specifically prayed for a relief in the form of refund of the sale price with interest at the rate of 1% per month specifically in the alternative and not in addition. The fact that the plaintiff did not plead and prove essentials of Section 16(c) of the Act coupled with the fact that plaintiff asked for refund of the entire amount with interest, operate against the plaintiff and it at least shows that he was not continuously willing to go alongwith contract and to perform his part of the essentials of the same. It would have been a different matter if the plaintiff would have pleaded and proved his readiness and willingness and would have explained the reasons for his asking for compensation in the alternative but the plaintiff has not only omitted to do so, but has further over-emphasized on the relief of refund of the amount by hastening to add in para 6 (kha) while claiming alternative relief that 'for this reason full court fee has been paid'. 81. The pleading read as a whole cannot be construed to be answering the requirements of Section 16(c) of the Act. Even by putting liberal construction on the case set up by the plaintiff and not insisting upon the repetition of the letters of the statute, on a total comprehension of the case set up
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by the plaintiff, it is found that the necessary averments are conspicuously omitted in the plaint and the surrounding circumstances do not indicate that plaintiff was ready and willing to perform the contract according to its true construction and rather the entirety of facts and circumstances show that his primary election was to get back the amount of Rs. 1500/- with interest. The decree for specific performance in such circumstances ought not to have been granted. Both the courts below have not adverted to the essentials of the requirements of law. The decree for specific performance cannot be sustained and deserves to be set aside. Question (e) :- 83. Taking up Question (e) now, one may usefully refer to the relief granted by the Trial Court and affirmed by the appellate court. As quoted hereinabove, the learned Trial Court has proceeded to grant both the reliefs as claimed in the alternative by the plaintiff that is of specific performance of the contract and in the alternative for refund of amount of Rs. 1500/- with interest at the rate of 1% per month. The Trial Court also granted a decree for injunction which has been set aside by the Appellate Court. However, the Appellate Court has otherwise endorsed the decree granted by the Trial Court in the aforesaid alternative form. 84. The decree granted by the Trial Court suffers from the fundamental error of jurisdiction. A plaintiff could definitely seek the reliefs in the alternative but the Court cannot grant both the reliefs in the alternative in the manner and form as granted in the present case. In a suit for specific performance of the contract when the plaintiff has claimed relief of specific performance and in the alternative of refund of entire amount paid by him with interest either, the decree for specific performance of contract could have been granted or the relief of compensation or of refund of the price or earnest, as the case may be. The relief of refund of amount under Section 22 is granted when specific performance is refused and relief of compensation could either be in addition or substitution of specific performance under Section 21. In the present case, the amount was claimed in the alternative, that is in substitution of the specific performance. In such circumstances, question (e) is answered to the effect that the learned Trial Court has erred in granting both, the decree for specific performance of contract and an alternative decree for refund of the sale price with interest without specifying the reasons for such a course and without specifying as to how and when the alternative money decree was to be enforced? 85. The plaintiff cannot be left at the option or election to either get the document executed or in the alternative to have the amount refunded. Money decree in the present case was claimed and could have been granted only when specific performance was refused. Leaving a plaintiff at election without specifying the reasons and basis for such a course to either get specific performance or to have amount refunded back is not compatible with the nature of relief being granted by the court. 86. However, in the present case, as found in the answers to Questions (a) & (b) supra, the plaintiff is not entitled for the relief of specific performance and that part of the decree deserves to be set aside. With setting aside of the said part of the decree, this Court is of opinion that now remaining part of the decree of refund of amount by the defendant to the plaintiff could not only be
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maintained but deserves to be maintained for the reason that the finding of fact on the question that the defendant entered into the agreement and received the amount of Rs. 1500/- stands concluded being the concurrent finding of fact and in equity, the defendant ought to return the amount with interest as allowed by the two courts below. 87. In the case of Kanshi Ram v. Om Prakash Jawal and Ors.: AIR 1996 SC 2150, the Hon'ble Supreme Court considered the balance of equities wherein a suit was filed in the year 1970 for specific performance and alternatively damages for sum of Rs. 12,000/-. The courts below had granted decree for specific performance and the appellant offered an amount of Rs. 10 lacs as alternative relief though the respondent claimed only Rs. 12,000/- instead of granting specific performance. Having regard to the facts of the case, the Hon'ble Supreme Court considered the question as to whether it would be just, fair and equitable to grant the decree for specific performance. Although the rise in price during the pendency of the suit may not be the sole consideration for refusing the decree but this is equally well settled that the decree for specific performance is in the discretion to be exercised on sound principles. In those circumstances, the Hon'ble Supreme Court took into consideration the fact that the plaintiff himself has claimed alternative relief for damages and observed thus: "When the Court get into equity jurisdiction, it would be guided by justice, equity, good conscience and fairness to both the parties. Considered from this perspective, in view of the fact that the respondent himself had claimed alternative relief for damages, we think that the Courts would have been well justified in granting alternative decree for damages, instead of ordering specific performance which would be unrealistic and unfair. Under these circumstances, we hold that the decree for specific performance is inequitable and unjust to the appellant." 88. The Hon'ble Supreme Court, therefore, allowed the appeal and instead of specific performance granted a compensation of Rs. 10 lacs to the respondent. 89. In the case of Joseph's Son Mathew v. Kuruvila's Son and Ors. : , the Hon'ble Supreme Court held that Section 20 preserves the judicial discretion of the Court and the Court is not bound to grant specific performance merely because it was lawful to do so. The Hon'ble Supreme Court held thus,"14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff." 90. In the case of B.R. Mulani v. Dr. A.B. Aswathanarayana and Ors.: AIR 1993 SC 1318, the Hon'ble Supreme Court upheld the refusal of relief for specific performance on the ground that the plaintiff had taken unfair advantage of the agreement and if the equity jurisdiction would be exercised in favour of the plaintiff, it would result in great hardship to the defendants. The Hon'ble
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Supreme Court however observed that certain equities were required to be taken note of and adjusted in moulding the relief. The Hon'ble Supreme Court, therefore, directed for repayment of the monies paid against the mortgage with accrued interest thereon and further compensation in lieu of specific performance was also granted. 91. On the facts and in the circumstances of the present case, as noticed above, the balance of equities lies in maintaining the decree for refund of the amount of Rs. 1500/- with interest awarded by the courts below @ 12% per annum. In that view of the matter, the later part of the decree is upheld while deleting the relief of specific performance. 94. As a result of the aforesaid, this appeal is partly allowed, the decree under appeal is reversed so far the relief of specific performance is concerned and the suit for specific performance of the agreement stands dismissed. However, the plaintiff is held entitled for refund of the amount of Rs. 1500/- with interest at the rate of 12% per annum from the date of agreement till realisation. In the circumstances of the case, the parties are left

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