EQUITY, TRUST AND SPECIFIC RELIEF

PROJECT

IV TRIMESTER

Topic:

An Analysis of changes proposed in the Specific Relief Act, 1963

Submitted to :

Dr.Sanjay Kumar Yadav

Associate Professor

NLIU BHOPAL

Submitted by :

Akanksha Singh Baghel

2015BALLB38

NLIU BHOPAL

i
 TABLE OF CONTENTS

EQUITY, TRUST AND SPECIFIC RELIEF ...................................................................................................... i

TABLE OF CONTENTS............................................................................................................................... ii
STATEMENT OF PROBLEM ..................................................................................................................... iii
RESEARCH METHODOLOGY ................................................................................................................... iii
INTRODUCTION ...................................................................................................................................... iv
ANALYSIS OF 147TH LAW COMISSION REPORT ...................................................................................... v
HISTORY OF THE LEGISLATION ............................................................................................................ v
NEED FOR RECONSIDERATION ............................................................................................................ v
1. TERRITORIAL COVERAGE ................................................................................................................ vi
2. SUIT FOR RECOVERY OF POSESSION ............................................................................................. vii
3. PERSONS BY WHOM CONTRACTS CAN BE SPECIFICALLLY ENFORCED ........................................ viii
4. READINESS AND WILLINGNESS ..................................................................................................... xii
5. DOCTRINE OF MUTUALITY ............................................................................................................xvi
6. POSSESSION AND PARTITION.......................................................................................................xvii
7. RESCISSION OF CONTRACT ...........................................................................................................xix
8. CANCELLATION OF DECREE ............................................................................................................xx
RECOMMENDATIONS OF THE EXPERT COMMITTEE FOR EXAMIMING SPECIFIC RELIEF ACT 1963 ......xx
BACKGROUND ...................................................................................................................................xxi
THE LAW AS IT STANDS .....................................................................................................................xxi
CHANGES RECOMMENDED .............................................................................................................. xxii
CONCLUSION....................................................................................................................................... xxiv
REFERENCES ........................................................................................................................................ xxvi

ii
 STATEMENT OF PROBLEM

This project aims to study the changes recommended by 147th Law Commission of India Report
and the ones suggested by the Expert Committee recently and also to find out whether these
suggestions are relevant or not. The project also aims to find out whether these suggestions
have been implemented by yet or not.

RESEARCH METHODOLOGY

The relevant Law Commission Report has been studied, various cases which have been decided
after the 147th Law Commission Report have been studied, also Research Papers from various
Journals have been refers. The Report of the Expert Committee (head – Anand Desai) which
submitted its report on 28th Jan 2016 has also been studied. Hence both primary and secondary
sources have been used to do research.

iii
 INTRODUCTION

The Specific Relief At, 1963 came into force on 1st March 1964. The Parliament enacted the
Act by repealing the Specific Relief Act, 1877. The Act is based on the principle of equity and
is used for granting specific relief for enforcing civil rights. It has no application in enforcing
penal laws. The Specific Relief Act, 1877 contained the principles of equity, justice and good
conscience. The need for a new statute suited for the new requirements lead to the enactment
of the Act of 1963. The Bill of the new Act was drafted on the basis of the 9 th Report of the
Law Commission of India. From the preamble of the Act, it is clear that the Act was not an
exhaustive one. It only deals with certain kinds of specific reliefs and there are other reliefs
about which the Act was silent and are used by the courts. The problems and difficulties posed
in the course of interpretation of various provisions of Specific Relief Act have prompted the
Law Commission to consider various issues suo motu, with a view to make to make the Law
simpler and to avoid litigation on technicalities and hence 147th Law Commission Report
recommended various changes in the Specific Relief Act. Also recently The Expert Committee
set on examining Specific Relief Act, 1963 submitted its Report to Union Law & Justice
Minister.

iv
 ANALYSIS OF 147TH LAW COMISSION REPORT

HISTORY OF THE LEGISLATION

The Law of Specific Relief in India was originally codified by the Specific Relief Act 1887.The
provisions of this enactment were considered by the Law Commission in the Ninth Report
which led to the enactment of Specific Relief Act (Act 47 of 1963) in place of the earlier
enactment. The Ninth Report of the Commission pointed out valid reasons for the then state of
affairs and the new legislation proposed by it was confined to seven forms of specific relief viz
–

i. Recovery of possession of property

ii. Specific performance of contracts
iii. Rectification of Instruments
iv. Cancelation of instruments
v. Declaratory decrees
vi. Injunction

Compensatory relief of various kinds and certain forms of specific relief specifically mentioned
in certain enactments were kept out of the purview of 1963 Act.

NEED FOR RECONSIDERATION

The Specific Relief Act 1963 has posed several problems and difficulties.Indeed it has given
rise to divergence of judicial opinion on some the provisions. (i)There is a conflict of judicial
opinion on the question wheather an owner can bring can bring a suit for possession under
section 6 when not he but a person deriving title from him is in possession of the property (ii)
Section 15 of the Act is not free from difficulty.Courts in India have often been confronte with
a situation where a contract is clearly intended for the benefit of third party but still have been
reluctant to enforce the contract at the instance of such third parties.This is despite
consideration for the contract may move even such third party (iii) The expression ‘failed to
aver and prove’ in Section 16 has given rise to lot of litigation (iv) The decision of the Supreme
Court in Bulal v. Harari Lal Kishori Lal1, while analysing the provisions of Section 22(2),

1
1982 SCC (1) 525

v
emphasised the need for adding after the word “proceeding” in the proviso to section 22(2), the
words “including a proceeding in execution” (Iv) There is a divergence of judicial opinion on
the question whether courts can extend the time originally fixed for payment, notwithstanding
the terms of the decree under Section 28 (vi) Doubts have also been expressed as to whether
decree other than compromise decree will fall within the meaning of the expression “written
instruments” under Section31 and (vii) Section 1 requires reconsideration i order to bring
uniformity at national level. These difficulties have prompted the Law Commission to consider
these questions suo motu, with a view to make the law simpler and to avoid litigation on
technicalities.

With the above objective we proceed to examine Section 1,6,15,16,20,22,28 and 33 of the
Specific Relief Act and to analyse the case law giving rise to judicial controversies and
deficiencies therein. At the end we have made recommendations in this regard. Since 1963,
various other reas calling for specific relief have also opened up.2But, having considered this
question afresh, we think that there may be need for different types of solutions to meet those
difficulties3 but at present there is no justification to change the arrangement f the 1963 Act in
this respect to make the Act more comprehensive to cover other types of specific reliefs as
well.

1. TERRITORIAL COVERAGE

Before 1963, the Specific Relief Act as amended from time to time, was not applicable to the
State of Jammu and Kashmir as well as to the territories known as ‘Scheduled districts’. The
removal of the latter of these restrictions was suggested in the Ninth Report. This was accepted
and the 1963 Act was made applicable to the whole of India except the State of Jammu and
Kashmir. In the opinion of the Commission, there is no reason why this exclusion should now
continue. Several Central enactments including the Income Tax Act and Wealth Tax Act
(which fall under List I in the Seventh Schedule of the Constitution) have been extended to the
State. It is the time that enactments such as the Contract Act, the Specific Relief Act and the
Partnership Act are also extended to the State of Jammu and Kashmir to take the place of local
laws. If any , even though they deal with topics covered by List III of the Seventh Schedule. In
the view of the Law Commission Report, All India uniformity is necessary, proper and

2
For example compensatory relief in respect of death or personal injury in various kinds of situation including
those while in police custody
3
The Commision is proposing to consider the wider issues and to cover them in a later report

vi
desirable in respect of statues like the above which are based on general principles universally
organised the world over. Hence the Law Commission recommended that the words: except
the State of Jammu and Kashmir” in S.1 (2) of the Act be omitted. It is however, necessary that
before this is done, an appropriate Presidential Order is issued under Article 370 of the
Constitution to enable such laws, falling under List III of Seventh Schedule to the constitution,
being extended to the State.

In my opinion Article 370 has caused the State more harm than good and therefore it must be
repealed. Since, no outsider can buy property in J&K.This is the reason J&K lags behind when
it comes to industrial growth. It has been hampering the development scene of the state. No
outside companies can setup which leaves a blank to fill in the infrastructure scene and also,
lesser job opportunities to the people. Even if Article 370 is not repealed, the Presidential Order
must be issued under Article 370.

2. SUIT FOR RECOVERY OF POSESSION

S.9 of the 1877 Act provided a summary relief to a person dispossessed without his consent
of immovable property , otherwise than in due course of law and enabled him to recover
possession immediately, without the need to go into questions of title and other controversies
provided he files a suit within six months of his dispossession. Though the Ninth Report4 had
recommended the omission of this provision. The provision has been retained in the 1963 Act
as S.6.

On the interpretation of Section 6 , there has been a judicial divergence of opinion on the
question whether an owner can bring a suit for possession under the section when not he but a
person deriving title from him is in possession of the property. One view is that when the owner
confers an interest on a derivative holder which entitles the latter to actual use and possession
of the property. It is only the matter and not the former that can maintain an action under
Section 6.5 The other view is that dispossession of the derivative holder by a trespasser is in
reality , the dispossession of the owner himself and entitles even the former to maintain an
action under this section.6 It has been suggested that the latter view is the only possible view
and that the other line of cases is distinguishable. It is unnecessary to go into the merits of the

4
Paraa 16 of the Ninth Report
5
Veeraswami v. Venkatchala AIR Madras 18; Ramachandra v. Sambashiv AIR 1928 Nagpur 313.
6
Rahuvar Dayal v. Har Govind AIR 1953 Raj 287; Gobind Ram v. Mewa AIR 1953 Pesu 188; Sailesh Kumar v.
Rama Devi AIR 1952 A.P 339

vii
controversy but it seems desirable to clarify the position legislatively. We are of the opinion
that , if Section 6 is to stand , it should be available even to a person in the position of an owner
who may be in possession through a derivative holder. A contrary view would make it possible
for a person in derivative possession to collude with a third party and deprive the real owner of
the possession of the property. We would , therefore, suggest that S.6 (1) be amended to read
as follows:

“6(1)” If any person is dispossessed without his consent of immovable property

otherwise than in due course of law, he or any person through whom he has been in possession
or any person claiming through him may, by suit recover possession thereof, not withstanding
any other title that maybe set up such suit.

Recently in the case of Sadashiv Shyama Sawant v. Anita Anant Sawant7, the ain question for
consideration was where a tenant in exclusive possession is dispossessed forcibly by a person
other than landlord, can landlord maintain suit under Section 6 of Specific Relief Act, 1963
against such person for immediate possession. The incidental question is, whether tenant is a
necessary party in such suit. After considering various arguments and referring to various cases
the court in its concluding lines said that the view of Bombay High Court in Ratanlal
Ghelabhai8 that landlord can sue in his own name where there is an injury to the reversion
exposits the correct position of law. It may be desirable that a landlord in a suit under Section
6 of the Act against a trespasser for immediate possession when, at the date of dispossession,
the house was in occupation of a tenant, impleads the tenant, but his non-impleadment is not
fatal to the maintainability of such suit. Hence the view that the landlord can sue without the
involvement of tenant was uphold. Hence we need to clearly legislate this in Section 6 of
Specific Relief Act 1963 in order to prevent any confusion and in order to prevent judges from
giving verdict in favour of the contrary view.

3. PERSONS BY WHOM CONTRACTS CAN BE SPECIFICALLLY ENFORCED

.1 Section 15 of the 1963 Act the provisions of Section 23 of 1877 Act. It enumerates persons
for or against whom contracts may be specifically enforced. The general rule is that a suit on a
contract can be maintained by one of the parties to the contract is enumerated in clause (a). The
right of successor in interest of any of the parties to the contract is enunciated in clause (b)
Clause (d) to (g) provide for special cases where the cause of action (being assignable) is

7
2008 (110) Bom L R 1114
8
AIR 1929 Bom 467

viii
assigned by , or survives by operation of law on the death or extinction of , one of the parties
to the contract. They all indirectly emphasis the rule that a third party to a contract cannot sue
which stands established by a long catena of judicial decisions.9

In England, the rule is that a third party to a contract cannot sue was inextricably intertwined
with the principle that the consideration for a contract can move only from a party to it and not
a third person. The courts there have, therefore, consistently insisted on strict adherence to the
rule in common law though equity often sought to intervene, on one consideration or another ,
to give relief in appropriate cases.

The Summary of the position in England on this aspect can be seen in Cheshire & Fifoot (11th
Edition), pp.435-455 and Anson (23rd Edition), Chapter X. Cheshire observes (p.441):

“Thus the doctrine of privity, while not an irrational inference from the nature of
contract in general and of English Contract in particular, has needs Parliament. When it has
intervened has offered only spasomodic and occasional relief. In these Circumstanced, it is not
surprising that many and various attempts have been made to induce the courts to sanction
evasions of the doctrine. These have indeed met with a considerable measure of success”.

Arson has this to say (p.398):

“The doctrine of privity of contract has been the subject of considerable criticism both
in the courts and among the writers of the tect books on the law of contract. It is said that it
seems only to defeat the legitimate expectations of the third party, that it undermines the social
interest of the community in the security of bargains, and that it is absent from the law of
Scotland and generally from the legal systems of the United States. In their Sixth Interim
Report10 of the Law Revision Committee recommended the abolition of the doctrine. The
actual terms of their recommendations read :

Where a contract by its express terms purports to confer a benefit directly on a third party, the
third party shall be entitled to enforce the provision in his own name, provided that the promise
shall be entitled to raise as against the third party any defence that would have been valid
against the promise. The rights of the third party shall be subject to cancellation of the contract

9
Dunlop Penuomatic Tyre Co. V. Selfridge & Co. 1915 AC 847; Scrutons Ltd v. Midland ilicons Ltd 1962 AC
446; Beswick v. Beswick 1967-2 AER (H.L) Clause (c) is perhaps the only real exception to this rule, very
limited in its scope.
10
1937 9Cmnd 5449, para 48

ix
by the mutual consent of the contracting parties at any time before the third party had adopted
it either expressly or by conduct”.11

It is seen that Lord Denning was a persistent critic of the rule but his attempt to treat it as a
nineteenth century innovation irrelevant to present modern times were unsuccessful.12 But
though the House of Lords has reiterated the rule as one firmly entrenched in the law of
England, there is no doubt that it does call for revision and relaxation.13

There is no reason why such and inequitable rule should prevail in India particularly when,
under the Indian Contract Act. The consideration for the promise need not move from the
promise but can move from any other person as well”.14

Indian Courts have been frequently faced with situations where a contract is clearly intended
for the benefit of a third party but still have been reluctant to enforce the contract at the instance
of such third parties15, although in India, unlike under the English Law, Consideration for a
contract may move even from a third party16”. Some relief has been granted in a very few cases
by straining the law and importing some doctrine of equity of some special consideration of
agency, trust, assignment or statute”.17

It is clear that there is no justification to continue this type of limitation on action in India. In
the U.S.A., after much debate and controversy, it is now settled that third persons can sue on
contracts made by others for their benefit.18 In Australia also the position is that while a person
who is not a party to a contract may not sue on it so as to directly enforce its obligations, it is
possible for that person to obtain the benefit “by steps other than enforcement by himself in his
own right.”19 As already pointed out, the Law Revision Committee in England recommended

11
The recommendation of the Committe has not ben implemente in England
12
Beswick v. Beswick 1968 AC 58
13
Wodar Investment Development Ltd v. Wimpey Construction (UK) Ltd. 1980-1 All E.R 571
14
S2(d) of the Indian Contract Act
15
See, for example, Shiv Dayal v. Union AIR Pun. 538 But there are soe dissenting voices as in Kshirde Bihari
v. Man Govinda AIR 1934 Cal. 682, Debnarayan Dutt v. Chunilala Ghose AIR 1941 Cal 129 and Dwarika Nath
V. Priya Nath (1917) 22 C.W.No.279.See in this context Pollock & Mulla.Indian Contract Act (10 th Edition) pp.
28-37
16
S2(d) of the Indian Contact Act See also Subbu Cheti v. Arunachalan Chetty AIR 1930 Mad 382; Krishna Lal
Sundhu v. Pramila Bala AIR 1928 Cal 518 and Kepong Prospecting Co. Ltd v. Schmidt (1968) 2 WLR 55a Privy
Council decision on a Malayan Ordinance which contains a provision identical with S2(d)
17
Khwaja Muhammad Kahn v. Hussainni Begum 1910 37 IA 152 PC;Shuppu Ammal v. Subhrmania ILR 1910
33 Mad 238
18
See Pollock & Mulla, the Indian Contract Act Tenth Edn p . 35
19
Coulls v. Bagot’s Executor & Trustee Co. Ltd 1967 40 ALJR 47

x
a revision of the law to provide “that when a contract by its express terms purports to confer a
benefit directly on a third party, it shall be enforceable by a third party in his own name. 20

On the same lines, it is recommended that S.15 of the 1963 Act be amended by inserting a
clause (i) to the following effect :-

“(i) Any Person, where the contract by its express terms purports to confer a
benefit directly on such person.”

In my opinion the doctrine of privity has come under serious attack for its refusal to recognise
the right of a 3 rd party beneficiary to enforce contractual provisions made for his/her benefit.
Law reforms, commentators and judges have pointed the gaps that sometimes exist between
contract theory on the one hand, and commercial reality and justice on the other. The
availability of the above mentioned exceptions doesn’t always correspond with their need. It is
no surprise that law reform bodies in various common law jurisdictions have critically
examined the doctrine and recommended its reform.21 In Australia (Western Australia and
Queensland), Canada (New Brunswick), England, New Zealand and Singapore the privity
doctrine has eventually been abrogated by the legislation.22

The followings are the criticisms of doctrine of privity:

First, It causes injustice to the third party who may have relied on the contract to regulate his
affairs, and thus upsets the reasonable expectations of the third party to get benefit under
contract.

Secondly, it frustrates the intentions of parties to the contract when they intended to confer
some benefit to the third party.23

20
Cmd. 5449 ( p 31) reffered to in Beswick v. Beswick 1967 2 AER 1197
21
Such as the Queensland Law Reform Commission, Report on a Bill to Consolidate, Amend and Reform the
Law Relating to Conveyancing, Property, and Contract and to Terminate the Application of Certain Imperial
Statutes (1973); the Law Commission (England), Privity of Contracts: Contracts for the Benefit of Third Parties
(1996); the New Zealand Contracts and Commercial Law Committee, Report on Privity of Contract (1981); and
Law and Revision Division, Attorney General Chambers (Singapore), Report on the Proposed Contracts (Rights
of Third Parties) Bill 2001: Law Reform Commission of Nova Scotia, Report on Privity of Contract (Third Party
Rights) (2004).
22
See the Western Australian Property Law Act 1969 (Western Australia), the Queensland Property Law Act
1974 (Queensland), the Law of Property Act 2000 (the Northern Territory), the Law Reform Act 1993 (New
Brunswick), the Contracts (Rights of Third Parties) Act 1999 (England), the Contracts (Privity) Act 1982 (New
Zealand), and the Contracts (Right of Third Parties) Act 2001 (Singapore).
23
(1861) 1 B. & S. 393. Cited from Robert Fennigan, Privity-The End Of An Era (Error), vol.103, Law
Quarterly Review, (Reprint, 2001) .pp.567-568.

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Thirdly, In case, third party suffers any damage then he has no option to claim compensation
due to this privity rule.

Fourthly, such a third party who suffers a loss cannot sue, however the promisee who has
suffered no loss can.

Fifthly, this doctrine is undue complex and uncertain. During the passage of time, judiciary has
made chinks into this doctrine to lessen its rigidity and it has been reduced into a vulnerable
and weak principle.

The courts have developed exceptions to the doctrine to avoid injustice, as we seen that with
the passage of time exceptions are continuously increasing, it demonstrates its basic
deficiencies and shows that the existing exceptions have not solved the problem in toto and the
scope of further amendments are still lingering, shaking the very existence of this doctrine.24

According to 13th Law Commission Report, 1958, the better course would be to adopt a general
exception to cover all cases of contracts conferring benefits upon 3rd parties and dispense with
the particular instances where the rule of privity should not apply.25

Hence the concerned section of the Specific Relief Act should also be changed accordingly.

4. READINESS AND WILLINGNESS

S.16(c) of the Act, which was inserted primarily to give effect to the principle that he who
seeks the aid of equity must himself do equity has created certain difficulties and given rise to
certain problems of interpretation. The clause run thus:-

“ Specific performance of a contract cannot be enforced in favour of a person.

(c) Who fails to ever 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”.

Two difficulties caused by the words “fails to aver and prove “, have come to the fore. The first
is that they obviously refer to an averment in the plaint and , where the averment is traversed,

24
Pollock & Mulla,supra n. 4 ,p. 112, see also Chesire, Fifoot & Furmston, supra n.2,p.582
25
http://www.hkreform.gov.hk/en/docs/rprivity-e.pdf (Last visited on August 20,2011)These options are taken
from Law Commission Report from various common law countries.

xii
proof in the course of the trial by the plaintiff that he is so ready and willing.26 By some mistake
, in the head note the Privy Council ruling in Ardeshir Mama’s Case27, an impression has been
created to the effect that there should be readiness and willingness on the part of plaintiff to
perform the contract right up to the date of the decree.28 The second is the nature and form of
the averment that has to be made by the plaintiff.

So far as the first of these difficulties is concerned, no remedial measures are necessary. The
court can adjudicate the readiness and willingness of the plaintiff only on the basis of the
averment in the plaint and the evidence at the trial. There is no way by which his readiness and
willingness beyond these dates and up to date of the decree can be ascertained or adjudged nor
is called for.29 Moreover, it will be appreciated that, if the plaintiff after the trial develops an
unwillingness or lack of readiness to perform his obligation under the contract, he will either
not press for a decree for specific performance, or if he has obtained one, will refrain from
putting it into execution.

In regard to the second question, the difficulty is caused by the proformas prescribed by the
Code of Civil Procedure,1908 for plaints in respect of suits for specific performance (Sch. I,
forms 47&48).Question have been raised (1) as to whether the averment in the plaint should
be in exactly the same terms as prescribed in the pro forma or whether a substantial compliance
therewith will suffice, and (2) whether an initial omission to make such an averment in the
plaint is fatal or can be permitted to be amended subsequently.

The first question is well settled by the decision of the Supreme Court in Premraj V. D.L.F.
Housing & Construction (P) Ltd.,30 Ouseph Verghese V.Joseph Aley31 and Abdul Khader
Rowther v.Sarabai32 laying down the proposition that in absence of averment in the prescribed
form, the suit should stand dismissed.33 This would be so even though is a close nexus between
the provisions of the Specific Relief Act and the formats of the suit prescribed under C.P.C.,
as pointed out in the Ninth Report of the Law Commission. Once ad averment is made in the

26
Gomathinayangam Pillai v. Palaniswamy Nadar AIR 1967 SC 868.In Pakhar Singh v. Krishna Singh AIR
1947 Raj 112 it has been mentioned that the readiness and willingnesss should cover the period from the date of
contract to the date of filling the suit
27
Ardeshir Mama v. Flora Sasson AIR 1928 P.C 208 which was applied in Gomathinayagam (supra)
28
See Mulla, Specific Relief Act, 10th Edition p. 997
29
Gomathinayangam Pillai v. Palaniswamy Nadar AIR 1967 SC 868
30
AIR 1968 SC 1355
31
1969 (2) SCC 539
32
AIR 1990 SC 682
33
See Dhinn Sinngh v. TAR Chand AIR 1984 All 5 and Kumdev NAath Choudhary v.Devendar Kumar Nath AIR
1979 Gau. 65)

xiii
plaint on the lines of the section, courts have invariably applied the rule of substantial
compliance and declined to dismiss the suit on a mere technicality as to its form. But Indian
courts seem to have almost unanimously34 taken a view, following the dicta of the Supreme
Court in the Gomathinayagam case (supra)35, that the complete absence of an averment in the
plaint will be fatal to the suit36. If this is so, the question would arise whether it would be open
to the court to permit the plaintiff in such a suit, either at his request or even suo motu by the
court, to amend the plaint either at the trial or at the appellate stage. So as to include an averment
originally omitted to be included.

In the above state of the authorities, one view may be that the above difficulties may be left to
be sorted out by judicial determination in each casse and that the rule in the statute, properly
interpreted, does not involve any irremediable hardships. It may be said that it is always open
to a plaintiff to withdraw such a defective plaint in terms of Order 23 , Rule 1(2) of the Code
of Civil Procedure with liberty to file a fresh suit, if possible, within the period of limitation37,
or alternatively, that it is open to him to seek an amendment of the plaint.38

We do not think that this course is advisable. Real difficulties will continue to arise and suits
may continue to run the danger of dismissal on a technical plea if the section is left as it is. As
pointed out above , courts will insist that the pleadings must contain a formal plea of readiness
and willingness and Supreme Court decisions39 have sometimes been understood as insisting
also on a rigid conformity with the requirements of Forms No. 47 and 48 in the First Schedule.
Although, the state of pleadings being what it is in India, a liberal judicial attitude towards
amendent of pleadings is desirable and is also in general, adopted by Courts, it does not appear
to be a satisfactory solution to leave issues for the Court’s determination in individual cases.
Defective Pleadings, sometimes give rise to frivolous issues.40 The filing of defective
pleandings, the subsequent submission of an application. Often belatedly, for amendment and
the hearing there on are all steps which clog the speedy disposal of the case. Also occasionally
courts do not grant an amendment41 and sometimes feel constrained to do so in view of certain

34
Idris Ali v. Abdul Samad AIR 1973 au 132
35
AIR 1967 SC 228
36
See Madan v. Kamaluddin AIR 1930 Pat. 121
37
Thankamma Mathew v. Azamatua Khan JT 1991-1 SC 35.
38
Code of Civi Procedure Or. 6 R 17
39
Ouseph Verghese v. Joseph Aey 1969 (2) SCC 439

40
See Smbhsiv Ra v. Bagya Rain AIR 1985 AP 392
41
Mahmood Khan v. Ayab Khan AIR 1978 All 463

xiv
Supreme Court Decisions.42 It is therefore , better that the reference to a specific averment in
the plaint regarding readiness and willingness is omitted from the statute, though such readiness
and willingness will have to be established on the evidence before a favourable decree can be
obtained. We therefore, recommend. In order to avoid unnecessary litigation, that the words
“aver and “ in Section 16 (C) be deleted

In various cases it has been decided by the courts of our country that the procedure should be
strictly followed and it is important that the plaint should contain averment about plaintiff’s
readiness and willingness. However there are also cases in which the courts have supported the
contrary view. In the case of Unni Madhavan Nair vs Kamalakshy And Ors.43 the plaint as it
was originally filed on October 24, 1979 did not contain any specific averment about the
plaintiffs readiness and willingness to perform his part of the contract as required under Section
16(c) of the Specific Relief Act, 1963 (the Act) read with forms 47 and 48 of Appendix A to
the Code of Civil Procedure, 1908. The plaintiff got the plaint amended by filing I. A. No. 646
of 1981 on February 4, 1981 by incorporating an averment to the effect that he was ready to
pay the balance consideration to the appellant/defendant at any time. This amendment was
allowed despite opposition subject to payment of costs on August 19, 1981. The nature of the
opposition and how it was dealt with will be evident from the order of the Subordinate Judge
which was as under:--

"The plaintiff in this petition filed under Order 6, Rule 17, CPC now seeks to amend the plaint
incorporating an additional plea that he was and is ready and willing to pay the balance of
purchase price. The petition is opposed by the respondent-defendant on the ground that in the
absence of such a plea, the suit would have failed for the reason of Section 16 of the Specific
Relief Act, 1963. It might be perhaps true that the absence of a plea in the plaint in the suit of
this nature that the plaintiff always was and is willing and ready to perform his part of the
contract is fatal. But for that reason alone, the petitioner-plaintiff cannot be denied the relief
sought for by amending the plaint suitably. Of course, the suit was in late 1979 and the
amendment petition comes up only in February 1981. In that way, the petition is belated for
which the defendant shall be compensated by payment of costs.

42
Ganesh Trading Co. V. Moji Khan AIR 1978 SC 484
43
MANU/KE/0563/1993

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Further it was held that Section 16(c) does not insist on the use of any particular words. All
that it requires is that the plaintiff must aver and prove his readiness and willingness to perform
the essential terms of the contract. The suit is one for specific performance, and normally the
plaintiff will plead all the essential prerequisites which alone will entitle him to a decree of
specific performance. The averment of readiness and willingness is part of the pleadings in the
case. If by inadvertence, or otherwise, the specific words are not recited, but otherwise the
necessary details or particulars are found in the plaint, a just cause should not be defeated by
reason of non-recitation of the exact words of the section. The question is one of construction
of the plaint, whether it contains the facts, details or particulars from which the readiness and
willingness of the plaintiff could be inferred. If therefore it is possible to read in the plaint the
essential facts which lead to an inference of his readiness and willingness, I am of the opinion;
the suit is not liable to be defeated for not being verbally loyal to Section 16(c).

5. DOCTRINE OF MUTUALITY

Section 20 (4) of the Act provides:

“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 option of the other party”.

This Sub-section was inserted on the recommendations of the Ninth Report which, after a
detailed discussion of the principles involved44 , felt that, in the absence of a specific provision
to this effect, “ there would still be scope for the application of the rule in Mir Sarwarjan’s
case45” in the case of contracts for the purchase of property on behalf of a minor which cannot
be said to be for the benefit of the minor.” Mulla observes that it is difficult to appreciate the
necessity for this sub section46 for two reasons: one is that S.12 has clearly discarded the
doctrine of mutuality and secondly, that the language of sub-section (4) will not be of any
relevance in cases of the type envisaged by the Commission as it applies only to the
enforcement of contracts and in cases like Mir Sarwarjan there was no valid contract at all of
which specific performance could be sought. The only situation in which doctrine of mutuality
can be sought to be availed of is where one of the partied to a contract cannot seek specific
performance thereof while the other will be able to do so and that situation has been amply
provided for in S.12 of the Act. There seems to be some force in this criticism of the provision

44
See pa 51 of the 147th Law Commission Report
45
Mir Sarwajan v. Fadduruddin ohammad 1912 39 I.A 1
46
Mula. Specific Relief Act p.1025

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as an unnecessary superfluity. However, we do not think it necessary to suggest the omission
of S.20 (4) from the Act. It has remained in the statute for thirty years and given rise to no
difficulties. It only reiterates a principle , well settled in several jurisdictions, as pointed out in
the Ninth Report, that want of mutuality should be no ground for denial of a decree for specific
performance.

6. POSSESSION AND PARTITION

The object of Section 22, newly introduced in 1963, was to enable parties to sue in one suit for
specific performance as well as possession, etc. This provision was considered necessary
because, under the 1877 Act. Some High Courts had taken the view that since title would pass
only after specific performance is decreed. Possession could be claimed only thereafter in a
separate suit. Other High Cours, however, favored the view that ossession could be asked for
in the same suit. Some courts47 went to the extent of saying that even if there was no prayer for
possession in the suit, it could be claimed in execution proceedings in the suit after the deed is
got executed in pursuance of the decree. In Babulal v. Hazarilal Kishorilal48 the Supreme
Court, analyzing the provisions of Section 22(2), observed:-

The word ‘proceeding’ is not defined in the Act. Shorter Oxford Dictionary defines it
as carrying on of an action at law, a legal action or process: any act done by authority of a court
of law: any step taken in a cause by either party”. The term ‘proceedings’ is a very
comprehensive term and generally speaking means a prescribed course of action for enforcing
a legal right. It is not a technical expression with a definite meaning attached to it, but one the
ambit of whose meaning will be governed by the statute. It indicates a prescribed mode in
which judicial business is conducted. The word ‘proceeding’ in Sec.22 includes execution
proceedings also. In Rameshwarnath v. Uttar Pradesh Union Bank Ltd. 49 Such a view was
taken. It is a term giving the widest freedom to a court of law so that it may do justice to the
parties in the case. Execution is a stage in the legal proceedings; It is a step in the judicial
process. It marks a stage in litigation there are various stages. One of them is execution, We
recommend accordingly.

47
Arjun v. Ahu AIR 1950 All 415
48
AIR 1982 sc 818
49
AIR 1956 All 586

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Section 22, read with the above decision, gives legislative recognition to the latter of the two
views set out earlier. It, however, appears desirable to clarify the position and incorporate the
effect of the decision of the Supreme Court by adding, after the word ‘proceeding’ in the
proviso to Section 22(2). The words ‘including a proceeding in execution’ We recommend
accordingly.

In 2015 in the case of Smt.Sarverunnisa Begum vs Syed Rafeeq one of the contentions of the
petitioner was that in view of the provisions of Section 22 of the Specific Relief Act, 1963, the
order passed by the Court below is totally one without jurisdiction.In the plaint, no relief for
delivery of possession was sought nor the Court passed decree for delivery of possession and
as per Section 22(1)(a) of the Specific Relief Act, no relief was claimed nor the proviso
to Section 22 was invoked and made use of, as such, the Court below erred in ordering delivery
of property. Since there is no decree granted by the original Court, the executing Court grossly
erred in ordering delivery of property in execution and it is a settled law that the executing
Court cannot travel beyond the decree. To bolster his submissions and contentions the learned
counsel for the petitioner places reliance on the following judgments:

(i) Adcon Electronics Pvt. Ltd., v. Daulat and another

(ii) Gloster Limited v. Bowreah Jute Mills Private Limited and other .

(iii) Durisamy and others v. V.P.Periyasamy Gounder and others .

(iv) Anwar Hasan Khan v. Mohammed Shafi and others

(v) Dipak Babaria and another v. State of Gujarat and
others
(vi) Hardeep Singh v. State of Punjab and others

The defendant contended that The area of operation of Section 22 is completely and entirely
different and the sub-section (1)(a) of Section 22 cannot be applied for the instant case and the
respondent decree holder cannot be deprived of the fruits of the decree which has become final.

To substantiate and strengthen his submissions and contentions, the learned counsel for the
respondent takes the support of the following decisions:

(i) Babu Lal v. M/s Hazari Lal Kishori Lal and others

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(ii) Mr.Nakshtrapum Venkateswarlu v. Smt. Bathula Ankamma and others

(iii) Smt.Suluguru Vijaya and others v. Pulumati Manjula .

(iv) Kalivarapu Lakshmi Kumari v. Burada Appalanaidu

(v) V.Narasimha Chary v. P.Radha Bai and others
(vi) Mohammed Ali Abdul Chanimomin v. Bisahemi Kom
Abdulla Saheb Momin and another
(vii) Balmukund v. Veer Chand
(viii) Lotu Bandu Sonavane v. Pundalik Nimba Koli
(ix) Debabrata Tarafder v. Biraj Mohan Bardhan
(x) S.S.Rajabathar v. N.A. Sayeed
(xi) Gyasa v. Smt.Risalo

The court after referring to all the judgements finally held that plaintiff was wrong. The court
said that “In the teeth of the statutory duties imposed by the provisions of Section 28 of the
Specific Relief Act and Section 55 of the Transfer of Property Act on the seller and keeping in
view the area of operation of Section 22 of the Specific Relief Act, 1963 and keeping in view
the interpretation given to the phrase "inappropriate cases" as stipulated in Section 22 of the
Specific Relief Act in the above referred judgments and keeping in view the reality that the
property is only in the possession of the judgment debtor but not in the possession of any third
party and having regard to the ratio laid down in the authoritative pronouncement of the Apex
Court, wherein the Supreme Court elaborately and extensively considered the impact of the
provisions of Section 28 of the Specific Relief Act and Section 55(1)(f) of the Transfer of
Property Act, this Court expresses absolutely no scintilla of hesitation nor any traces of doubt
to hold that the there is no legal infirmity in the impugned order, warranting interference of this
Court under Section 115 of CPC. This Court also finds that the order under revision is well
reasoned and well crafted and this Court finds no reason to meddle with the impugned order.”

7. RESCISSION OF CONTRACT

Section 28(1) of the Act provides for rescission of certain contracts of sale or lease of
immovable property where the purchase or lease money is not paid within a specified period.
Sometimes, the Court may pass a “self-operative” final decree: that is to say, one that provides
that, if the payment is not made within the tie fixed by the decree, the suit shall stand dismissed.

xix
On the fixed for payment notwithstanding the terms of the decree, there is a difference of
judicial opinion.”50 Strictly speaking, it appears, such a “self-operative” decree would be
against the law and in any event, would clearly run contrary to the express provisions of Section
28. Whatever that might be, we think that it should be clarified that section 28 would be
applicable even in such cases. We, therefore, recommend that a new sub-section (1A) be
inserted, after sub-section (1), in Section 28 as follows:

“(1A) An application under sub-section(1) for the extension of the period within which the
purchase money or other sum was payable under the decree or for the rescission of the
contract may be made by vendor or lessor at any time and may be made notwithstanding that
the decree may have provided that certain consequences should follow automatically on
the default of the purchaser or lessee to pay the said sums within the period
specified in the decree or other wise allowed by the Court.”

8. CANCELLATION OF DECREE

Section 31 provides for the cancellation of “written instruments”. This expression is not
confined to contracts and is wide enough to cover unilateral documents such as receipts,
acknowledgements, gifts and wills. It has also been held to cover awards and compromise
decrees. There is, however, a doubt as to whether decrees other than compromise decrees will
fall within the meaning of the expression.’ 51

We are mentioning this in passing. We do not recommend any statutory amendment for
the present and we would leave the matter open for judicial clarification, if and when an
occasion should arise.

RECOMMENDATIONS OF THE EXPERT COMMITTEE FOR

EXAMIMING SPECIFIC RELIEF ACT 1963

50
Bhujangrao Gapan v. Seshrao Rajaram AIR 1974 Bom 101
51
Shnti Prasad v. Kunj Ltd AIR 1953 Pepsu 151

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In light of Union Government’s ‘Make in India’ initiative, and to propel the ease of doing
business in India, the Ministry of Law and Justice constituted an expert committee, around the
end of January, 2016, to review and suggest amendments to the Specific Relief Act, 1963
(“Act”). The Expert Committee, headed by Mr. Anand Desai, Managing Partner, DSK Legal,
New Delhi, on June 20, 2016, submitted its “Report” to Union Law and Justice Minister
recommending modifications to the said Act.

BACKGROUND

Infrastructure and development projects have seen a surge in litigation with a number of
petitions being filed in the Supreme Court and various High Courts, most citing ecological
reasons. As a result, these projects, which largely involve huge investments, are met with
uncertainty.

The existing legal framework is also seen as hindering investors from investing in India. India
has been notoriously low on the doing business ratings, particularly when it comes to ease of
enforcing contracts.

Specific performance of contracts is a discretionary remedy whilst monetary compensation for

breach is the norm for remedying non-performance of contracts. Consequently, in the event a
breach of contract is to be litigated, the non-defaulting party is often left with protracted
litigation and no methodology to enforce a contract.

In view of the above, the Union Government was of the opinion that amendment of the 50-year
old Act was in order, to further the cause of making India an investment friendly country.

THE LAW AS IT STANDS

The Act empowers the Courts to direct the performance of contracts, when there is a breach of
the contract.

Section 10 of the Act entitles the Court to grant specific performance of a contract only when
it is of the opinion that the actual damage caused to the aggrieved party cannot be ascertained

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or in case when the Court thinks that monetary compensation for the breach would not suffice
the damage caused by the aggrieved party.

Section 20 read with section 10 of the Act further affirms that the relief of specific performance
is subject to the Court being convinced that monetary damages cannot serve as a fitting
compensation for the loss suffered. The grant of this relief is the discretion of the Court, and
cannot be claimed as a matter of right.52

In addition to the above, Courts are empowered to grant injunctions enjoining a party from
breaching a contract or benefitting thereupon. In essence, a civil court may grant a perpetual
injunction preventing a party from breaching a contract and compel performance of the
requisite acts for the purpose.53

CHANGES RECOMMENDED

The Expert Committee was constituted to review the Act keeping in mind the “present scenario
involving contract based infrastructure development, public private partnerships and other
public projects involving huge investments and enforceability of such
contracts.”54 Additionally, the Committee was also required to review the Act and suggest
changes “so that specific performance is granted as a general rule and grant of compensation
of damages for non-performance remains as an exception” together with suggesting
amendments to do away with the discretionary powers of the courts55.

In its Report submitted to the Ministry of Law and Justice, the Expert Committee suggested
the following modifications to the Act:

1. Relief of specific performance should be made as the general rule of remedy for breach
of contract and monetary compensation to be made as an alternate remedy.

52
Bishwanath Prasad Verma v. Bhagwat Pandey, AIR 1982 Pat 219
53
Section 38 and 39 of the Act.
54
PIB Press Release dated January 28, 2016 – Expert Committee Set up to Review the Specific Relief Act, 1963
55
Office Order No. F. No. 11 (2)/2015-Leg.III from the Legislative Department of Ministry of Law and Justice
dated January 28, 2016.

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2. For the purpose of streamlining the interpretation of the Courts in matters of public
works, Centre should provide guidelines to the courts and tribunals to limit the Court’s
discretionary powers while granting performance and injunctive reliefs.

3. In cases of contracts, excluding government contracts, the Act should be modified to

address the right of third parties as well.

4. Inclusion of provisions addressing unconscionable contracts, unfair contracts,

reciprocity in contracts etc. and implied terms in a contract in the Act.

5. Furthermore, the Committee saw the need to address the Public Utility Contracts as a
separate class of contracts. The Committee was also of the opinion that in order for the
public work to progress without interruption, the Courts’ intervention in such contracts
should be kept to a minimum. Subsequently the public works can then be managed
through a monitoring system and regulatory mechanisms.

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 CONCLUSION

The modifications suggested by the 147th Law Commission Report can be summarised as
follows:

1. Sec. 1(2) – The words “except the State of Jammu & Kashmir” in S.1(2) may be
omitted. A presidential Order under Act 370 of the Constitution to make this
amendment effective may also be issued.
2. Sec. 6(1) of the Act may be amended to read as follows :
“6(1) If any person is dispossessed without his consent of immovable property
otherwise than in due course of law, he or any person through whom he has been in
possession thereof, not with standing any other title that may be set up in such suit”.
3. Sec. 15 – In Sec. 15 the following may be inserted as clause (i):
“(i) by any person , where the contract by its express terms purports to confer some
benefit directly on such person”.
4. Sec. 16 (C) – The Words “aver and” may be deleted.
5. Sec. 22 – In the provision to sub-section (2) of Sec.22 the words “including a
proceeding in execution” may be inserted after the word “proceeding”.
6. Sec. 28 – In Sec. 28 after sub-section (1) a sub-section (1A) may be inserted in the
following terms :-
“(1A) An application under sub-section (1) for the extension of the period within
which the purchase money or other sum was payable under the decree or for the
rescission of the contract may be made by the vendor or lessor at any time and may
be made not with standing that the decree may have provided that certain
consequences should follow automatically on the default of the purchaser or lessee
to pay the said sums within the period specified in the decree or otherwise allowed
by the Court”.

However most of the changes suggested such that they are already being implemented by the
judiciary but on some the law needs to be clearly laid down and therefore it is important to
legislate on those points.

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The modifications suggested by the Expert Committee aspire to considerably boost foreign
investment in the infrastructure and development sector. They aim at bringing about certainty
as to the fate of the infrastructure and developmental works by standardizing the relief for non-
performance.

The report also provides for unconscionable and unfair contracts. Although the erstwhile
Monopolies and Restrictive Trade Practises Act, 1969 addressed the issue pertaining to unfair
trade practices, however, currently pursuant to the revocation of the MRTP Act, this issue is
only covered under the Consumer Protection Act, 1986 which is limited to retail end users.
Enactment of the recommended amendments would help fill the lacuna in respect of unfair
contracts (not being consumer contracts). In the United Kingdom, the statute law relating to
unfair contracts is primarily regulated by the Unfair Contract Terms Act, 1977 which mainly
resists wide application of the disclaimers of liability and reasonableness of various covenants
in a contract. At present, there is no statute in India which correlates to the Unfair Contract
Terms Act, 1977. The amendment of the Act addressing the issue of unfair contracts will be a
welcome change in this regard.

On the flip side, if enacted, parties could be compelled to perform the contracts even if certain
obligations under the contract are not fulfilled. Further, diminished powers of the judiciary in
respect of these contracts may not be all the more fair to a party who is wronged in such cases.

Though the Committee has in its report recommended broad modifications to the Act, it will
be interesting to see if to what extent will these recommendations are adopted and enacted.

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 REFERENCES

i. 147th Law Commission of India Report

ii. 13th Law Commission of India Report
iii. Government of India Report by the Expert Committee on Specific Relief Act 1963
(20th June 2016)
iv. Mulla, Specific Relief Act 10th Ed.
v. Pollock, Indian Contract Act 10th Ed
vi. Mulla, Indian Contract Act 5th Ed.
vii. Chesire, Fifoot & Furmston, Indian Contract Act 12th Ed.
viii. www.manupatra.co.in
ix. www.indiankannon.co.in

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