Who May Obtain Specific Performance
Who May Obtain Specific Performance
What is a Contract?
As per section 2(h) of the Indian Contract Act, 1872, a contract is a legally binding
agreement. A contract can be both written and oral agreement. Certain elements are required
to convert an agreement into a contract.
Section 10 of the Indian Contract Act, 1872 lays down certain essentials which are required
to form a valid contract, such as free consent, competency, lawful consideration, and a lawful
object.
Halsbury said that specific performance is an equitable remedy given by the court in case of
breach of contract in the form of a judgment that the dependent perform the contract
following its terms and conditions. The accused party has the option to file a suit for specific
performance against the one who has not performed the contractual obligations.
Example: A has a piece of land that can be used for commercial purposes. A and B had a
contract, and B paid the half amount for purchasing his land and decided that rest of the
amount will be paid when A will transfer his land to B. But later on, A refused to sell his
land. B sued A and is entitled to recovery of the losses incurred by him.
In Beemaneni Maha Lakshmi vs Gandumalla Appa Rao, Honourable Supreme Court held
that in the case of a specific contract, the defendant is required to mention the losses in the
written statement which he might have suffered if he would have performed the specific
contract.
According to section 15 of the Specific Relief Act, 1963, specific performance of a contract
may be obtained by:
1. Any party: Illustration: In a contract, there are two parties, A and B. Therefore, either of
the parties can obtain specific performance of the contract.
Illustration: A has an interest in B’s property. Then A or his principal (if A is an agent) will
be considered as a representative in interest.
Conditions in which a representative in interest or his principal cannot obtain specific
performance of the contract are-
i. If the knowledge, ability, solvency, or any personal trait of such party is a material factor in
the contract.
ii. If the contract provides that his interest shall not be assigned.
Illustration: A made a contract with B for painting (skill). Hence A cannot obtain the specific
performance of this contract as it is made on an individual’s skills.
Illustration 1: A made a contract with B to marry C for a specified amount, and if B denied
paying then, A can obtain specific performance of the contract.
Illustration 2: A, B, C, D are brothers and have a joint property in the village. A, B, C made a
contract to give whole property to D. D is the beneficiary entitled here and can claim specific
performance of such contract.
4. If a tenant for life has entered into a contract in the due exercise of a power, the
remainderman;
Tenant for life: A person who is beneficially entitled under a settlement to possession of
settled land to use a property for the rest of his life. He is entitled to hold the legal estate but
only for the duration of his life.
Illustration: A gave his house to B for his life but had a contract that after his death, the
property will accelerate to C.
Remainderman: A person who inherits or is entitled to inherit property upon the termination
of the estate of the former owner. A remainderman is a person who has an interest in the
remaining property and will eventually own it at some time in the future.
Illustration: A gave his house to B for lifetime. B is a tenant for life but had a contract that
after B’s death, the property will accelerate to C. C is remainderman.
Reversioner in possession: Any person to whom the property is reversed back, and he is in
possession of that particular property. When a property owner effectively transfers property
to another yet retains some future rights in the property, it is known as a reversioner in
possession.
Illustration: A (grandfather), B (father), and C (son). A does not want to give his property to
B. Instead, he wanted to give his property to C. A entered into a contract with Z (tenant for
life) to enjoy his property till his life and pay the rent to C, and after Z’s death, the property
will be accelerated to C (reversioner in possession).
Here, the reversioner in possession also has the right to obtain the specific performance of the
contract entered by another person.
The reversioner will be responsible for the injury caused by the non-performance of the
contract by the remainder.
Illustration: A gave his house to B and asked to pay the rent to C. If B does not pay the rent,
then C has to bear the injury caused.
6A. when a limited liability partnership has entered into a contract and subsequently
becomes amalgamated with another limited liability partnership, the new limited
liability partnership arises out of the amalgamation.
This clause has been inserted by the Specific Relief Amendment Act, 2018.
Illustration: A (LLP) merged into B (LLP) and formed C (LLP). Therefore a contract entered
by A can be specifically performed by C as it emerged as a result of an amalgamation of A
and B.
7. If a company merges with another company under the terms of a contract, the new
company will form as a result of the merger (amalgamation).
8. If the promoters of a company entered into a contract before for the company’s
purposes before its incorporation and such contract is warranted by the terms of the
incorporation, the company has to accepted that contract and communicated such
acceptance to the other party of the contract.
Rectification of Instruments
Introduction
If any written contract does not convey the real intention or the specific agreement
made by the parties, the court can order rectification. Modification to a contract can
be made under the directions of the court and the changes made resume the parties
to a place where they would have been if the error hasn’t been made. It must be
proved that the parties had a consensus of mind to the contract but was entered
incorrectly when reduced to writing
SRA was enacted to provide remedies against contractual and civil rights breaches.
This comes into play when the compensation or damages provided are not
adequate.
A legal instrument is a legal document that is in written form and is legally
enforceable. It may confer certain rights, duties, promises, and obligations to the
parties of the document. Rights and liabilities may be created, transferred, restricted,
or extended. “Rectification of an instrument” means correcting the instrument’s
errors. Under the Specific Relief Act, rectification is seen as an impartial remedy of a
grant by the court when facts do not align with the intention of the parties. In a
contract, rectification means corrections or changes made to the contract.
Chapter III and Chapter V of the Specific Relief Act, 1963 deal with the rectification of
instruments and cancellation of instruments respectively. Relief of rectification can be
sought for contracts or any written instruments.
(3) A contract in writing may first be rectified, and then if the party claiming
rectification has so prayed in his pleading and the court thinks fit, may be specifically
enforced.
(4) No relief for the rectification of an instrument shall be granted to any party under
this section unless it has been specifically claimed: Provided that where a party has
not claimed any such relief in his pleading, the court shall, at any stage of the
proceeding, allow him to amend the pleading on such terms as may be just for
including such claim.”
There are certain circumstances when the rectification shall be made to a contract:
B) If rectification is made under clause (1) and the court eventually discovers that
there is the involvement of fraud or mutual mistake of parties, then the
discretionary powers lie with the court for rectification.
C) If a claim for rectification is made, then it is at the discretion of the court to
grant and enforce it.
D) No relief shall be granted until the parties specifically claim for rectification of
the instrument.
1. Fraud
Any act to deceive a person amounts to fraud. Fraud is said to have been
committed when there is the presence of untrue facts, voluntary concealing of
fact, or failure to fulfill a promise which was committed with the same intent.
So when someone intentionally suggests or falsifies a fact with the motive to
misrepresent them, there lies a way to rectify the instruments.
3. Intention of parties
The real intention of the parties is important to decide rectification. Court
decides the authentic intention of the parties in framing the contract. The
objective of Section 26 is to ensure that the defects do not prevail over the
intention of the parties.Pre-requisites for Section 26 include the existence of
fraud and mutual or common mistakes. The burden of proof rests with the
person claiming for rectification of the instrument.
An instrument shall be rectified by the court only.The confirmation of the court vests
for the authenticity of the deed as to the real intention of the parties. This ensures
the affirmation of the true intention of the parties to the contract while executing it.
After the execution of the rectified instruments, it is to be read and construed as if
the original one had been drafted incorporating the changes in the rectified
instrument. A deed of the transfer becomes a conveyance when rectified by the
court. The court’s order should declare that the deed is rectified and specify the
manner of rectification along with the direction of endorsement on the order of
conveyance. If rectification is allowed then the changes shall have a retrospective
effect.
Section 31 of the Specific Relief Act, 1963 deals with the cancellation of the
instrument which occurs when there is a potential cause of damage to the parties
rendering the document void or voidable. It is at the discretion of the court to cancel
it.
Case Laws
InNatarajan Asari Vs Pichamuthu Asari AIR 1972 Mad 192, it was held that a suit for
rectification can be claimed for a sale deed on grounds of mutual mistake concerning
the description or cost of the property.
In the case of Gerela Kalita Vs Dharmeshwar Saika (2961), the suit can be filed for
rectification on grounds of fraud or mutual mistake at whatever time they may be
discovered.
Introduction
The law of limitation finds its roots in the maxim Interest Reipublicae Ut Sit
Finis Litium which means that in the interest of the state as a whole there should be a
limit to litigation and vigilantibus non dormientibus Jura subveniunt which means the law
will assist only those who are vigilant with their rights and not those who sleep upon it.
The Limitation Act, 1963 (Act hereafter) prescribes different periods of limitation for
filing of suits, appeals or applications.
The statute of limitation are statutes of repose because they extinguish stale demands
and quiet titles.
They secure peace by ensuring the security of rights and justice as by lapse of time, evidence
may get destroyed.
Period of Limitation
Section 2(j) of the Act defines the period of limitation and prescribed period.
o Period of limitation refers to the time period which is prescribed for any suit, appeal or
application by the Schedule of the Limitation Act, 1963.
o The prescribed period is the period of limitation computed in accordance with the provisions
of this Act.
Section 3 of the Act describes the Bar of limitation as subject to the provisions contained
in Sections 4 to 24 (inclusive) every suit instituted, appeal preferred, and application made
after the prescribed period shall be dismissed although limitation has not been set up as
defense.
Extinguishment of Right
General Rule that the law of limitation only bars the remedy but does not bar the right
itself.
Section 27 is an exception to this rule. It talks about adverse possession. Adverse
possession means someone who has possession over another’s land for a long time can
claim a legal title over it.
o In other words, the title of the property will vest with the person who resides in or is in
possession of the land or property for a long period.
If the rightful owner sleeps over his rights, then the rights of the owner will be
extinguished, and the possessor of the property will confer a good title over it.
Section 27 is not limited to physical possession but also includes de jure possession. As
per the wordings of this Section, it applies and is limited only to suits for possession of the
property.
Exception
Section 5 is not applicable to applications made under any of the provisions of Order
XXI of the Code of Civil Procedure, 1908 (states that the decree must be signed by the
judge, and then the decree must be entered in the register of decrees and further states
that the decree should be dated and authenticated by the judge's signature) and to suits.
The Court has no power to admit a time barred suit even if there is a sufficient cause for
the delay. It applies only to appeals or applications as specified therein.
Case Laws
Craft Centre v. Koncherry Coir Factories (1990):
o It was held by the Kerala High Court that the plaintiff's duty is to convince the Court that
his suit is within time.
o If it is out of time and the plaintiff relies on acknowledgments to save the limitations, he
must plead or prove them, if denied.
o The Court further held that, provision of Section 3 is absolute and mandatory and if a suit
is barred by the time, the court is under a duty to dismiss the suit even at the appellate
stage though the issue of limitation may not have been raised.
ICICI Bank Ltd v. Trishla Apparels Pvt Ltd (2015):
o It was held by Madras High Court that there is no doubt that the court is duty-bound to
dismiss the suit in a case it is barred by time even though no such plea has been taken
by the opposite party.
Introduction
The ‘Law of Limitation’ provides an aggrieved party with the time limit for
different suits within which the party can approach the court for relief.
The suit is dismissed by the competent court where the time limit provided by the
limitation act expires. A situation may exist where, due to his physical or mental
condition, the person is not able to file a suit or make an application.
In such cases, the law may not be the same and additional rights and benefits may be
accorded to individuals with disabilities.
(2) Where such person is, at the time from which the prescribed period is to be reckoned,
affected by two such disabilities, or where, before his disability has ceased, he is affected by
another disability, he may institute the suit or make the application within the same
period after both disabilities have ceased, as would otherwise have been allowed from
the time so specified.
(3) Where the disability continues up to the death of that person, his legal
representative may institute the suit or make the application within the same period after
the death, as would otherwise have been allowed from the time so specified.
(4) Where the legal representative referred to in sub-section (3) is, at the date of the death of
the person whom he represents, affected by any such disability, the rules contained sub-
sections (1) and (2) shall apply.
(5) Where a person under disability dies after the disability ceases but within the period
allowed to him under this section, his legal representative may institute the suit or make
the application within the same period after the death, as would otherwise have been
available to that person had he not died.
Explanation —For the purposes of this section, ‘minor’ includes a child in the womb.
Minority
Insanity
Idiocy
Minority
Minor is a person who has not attained the age of 18 years according to Indian
Majority Act, 1875.
The calculation of the age has to be done according to Section 3(2) of the Majority
Act, 1875 - In computing the age of any person, the day on which he was born is to be
included as a whole day and he shall be deemed to have attained majority at the
beginning of the eighteenth anniversary of that day.
Insanity
Another case on the point of insanity is that of Hari Singh Gond v. State of Madhya
Pradesh (2008) in which the Supreme Court categorized insanity into further four
categories:
Idiocy
A person who acts in an extremely foolish way is said to be an idiot. Idiocy is not an
acquired form of mental instability, rather a person is an idiot since his/her birth.
Persons with insanity, minority and idiocy as disabilities are exempted under Section
6 to file a suit or an application for the execution of the order in the time prescribed by the
law. They are allowed to file a suit or an application when their disability has ceased and
counting the period starts from the day their disability comes to an end.
It is only a person “entitled to the suit” who can claim benefit of legal disability. Where the
person dies with such disability the ‘Legal Representative’ of such person may sue and all
the rules provided by Section 6 would apply to such legal representative as well.
The provision provides that the plaintiff must be suffering from the disability at the
time when the cause of action accrues.
In the case of Udhavji Anandji Ladha and Ors. v. Bapudas Ramdas Darbar
(1949) Bombay High Court held that Section 6 does not cover in any way
any “intervening” kind of legal disability. When a legal disability is in existence,
only then can Section 6 be successfully applied.
Explanation I —This section applies to a discharge from every kind of liability, including a
liability in respect of any immovable property.
Explanation II —For the purposes of this section, the Manager of a Hindu undivided family
governed by the Mitakshara law shall be deemed to be capable of giving a discharge without
the concurrence of the other members of the family only if he is in management of the joint
family property.
Section 7 had to be taken as an exception to the general principle set out in Section
6 and provides that if there were several persons who were jointly entitled to file suits
and if one of them were disabled, the time would not run against either of them until
the disability ceased to exist. But if one of the persons entitled to institute a suit was
competent to grant discharge without concurrence from others, then time would begin
to run against both of them.
This provision provides that if the limitation period is extended under Section 6 or
7 then in no case it should be extended for more than 3 years.
Also, the extension under Section 6 or 7 will not be applicable to suits for pre-
emption.
Continuous running of time —Where once time has begun to run, no subsequent
disability or inability to institute a suit or make an application stops it: Provided that,
where letters of administration to the estate of a creditor have been granted to his debtor, the
running of the period of limitation for a suit to recover the debt shall be suspended while the
administration continues.
Acquisition of Ownership by Possession Under the Limitation Act
Introduction
Possession is one of the most important concepts in the entire range of Legal History as
it is the Prima facie incidence of ownership. According to Salmond, Possession is the most
fundamental interaction between man and things. However, Henry Maine defined it
as “interaction with an object that includes the exclusion of other people from enjoying
it.”
The concept of adverse possession (Possession by someone who has had another’s
land for a long time and can claim a legal title over it) is important to be discussed
here, adverse possession stems from the idea that land must not be left in
abeyance, instead, be put to judicious use.
Section 25
(1) Where the access and use of light or air to and for any building have been peaceably
enjoyed therewith as an easement, and as of right, without interruption, and for twenty years,
and where any way or watercourse or the use of any water or any other easement (whether
affirmative or negative) has been peaceably and openly enjoyed by any person claiming title
thereto as an easement and as of right without interruption and for twenty years, the right to
such access and use of light or air, way, watercourse, use of water, or other easement shall be
absolute and indefeasible.
(2) Each of the said periods of twenty years shall be taken to be a period ending within two
years next before the institution of the suit wherein the claim to which such period relates is
contested
(3) Where the property over which a right is claimed under sub-section (1) belongs to the
Government that sub-section shall be read as if for the words “twenty years” the words
“thirty years” were substituted.
Easement by prescription occurs where someone uses another's property for a certain
amount of time without permission in a way in which the owner should be aware
of.
States set the time limit required for one to achieve a prescriptive easement which can
range from a few years to over twenty years.
This section is remedial in nature, but it does not exclude or prevent the acquisition
of easement rights in other modes. For acquiring easement under this provision, 20
years of uninterrupted and continuous use is necessary.
o Peaceful Possession: The word peaceably means that the plaintiff who claims
to be the owner, has neither been obliged to resort to physical force himself at
any time to exercise his right within twenty years nor he has been prevented
by the use of physical force by the defendant in his enjoyment of such right.
o Openly: The word openly means that the enjoyment has been from the very
beginning which was visible or manifest and not furtive or secret.
Case Laws
In Rachhaya Pandey and Ors v. Sheodhari Pandey and Ors (1963), it has been
held that the right to drain off rainwater according to the position of the land in a
natural way does not attract Section 25.
In Manindra Nath Bose v. Balaram Chandra Patni and Ors, (1973) Calcutta
High Court held that the customary right of way for all the villagers is not a right
which can be acquired by prescription under Section 25.
Section 26