Source: https://ja.scribd.com/doc/90480384/Specific-Performance-of-Contracts
Timestamp: 2019-04-24 11:49:16+00:00

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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."
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.
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.
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.
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:- &quot;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.
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.&quot; 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.
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.
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.
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 .
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.
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.
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.
(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.
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.
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.
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.
(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.
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.
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.
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 &amp; Ors. vs. Metadin Agarwal (2006) 7 SCC 470, Nirmala Anand vs. Advent Corporation (P) Ltd. &amp; 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.
(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.

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