September 12, 2019

In cases of non-performance of contract, relief of specific performance cannot be granted: SC

[ by Legal Era News Network ]


The question of law that arose in this appeal before the Supreme Court of India is whether a vendee who does not perform one of his promises in a contract can obtain the discretionary relief of specific performance of that very contract.

A bench of Justices Deepak Gupta and Aniruddha Bose ruled that a party cannot claim that though he may not perform his part of the contract he is entitled to specific performance of the same.

The Court held that the vendee by not paying the rent for 13 long years to the vendor, even when he had been put in possession of the land on payment of less than 18% of the market value, caused undue hardship to vendor. The land was agricultural land which was under cultivation by the vendee. He failed to pay the rent and, therefore forfeited his right to get the discretionary relief of specific performance in the Court’s opinion.

According to section 51 of the Contract Act, 1872 when a contract consists of reciprocal promises to be simultaneously performed, no promisor needs to perform his promise unless the promisee is ready and willing to perform his reciprocal promise.

The Supreme Court ruled that the explanation (ii) to Section 16(c) of The Specific Relief Act, 1963 lays down that it is incumbent on the party, who wants to enforce the specific performance of a contract, to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract. Further, the Court held that relief of specific performance is discretionary. Merely because the plaintiff is legally right, the Court is not bound to grant him the relief.

The Court while exercising its discretionary power is bound to exercise the same on established judicial principles and in a reasonable manner. The discretion cannot be exercised in an arbitrary or whimsical manner. Section 20(2)(c) of the Specific Relief Act provides that even if the contract is otherwise not voidable but the circumstances make it inequitable to enforce specific performance, the Court can refuse to grant such discretionary relief. Further, the section provides that the hardship has to be considered at the time of the contract, unless the hardship is brought in by the action of the plaintiff.

The vendee in this case was not entitled to claim the discretionary relief of specific performance of the agreement having not performed his part of the contract even if that part is held to be a distinct part of the agreement to sell.

The Supreme Court thus dismissed the suit for specific performance.

Full View Judgement

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