Suit For Specific Performance of Contract in India

Specific performance is a remedy developed by principle of equity. A party to a contract who is

damaged because the contract is breached by another party has the option to file a suit for
specific performance compelling to perform his part of contract. Before an equity court will
compel specific performance, however, the contract must be one which can be specifically
performed. Section 16 (c) of the Act envisages that plaintiff must plead and prove that he had
performed or has always been ready and willing to perform the essential terms of the contract
which are to be performed by him, other than those terms the performance of which has been
prevented or waived by the defendant

Specific performance is a remedy developed by principle of equity. A party to a contract

who is damaged because the contract is breached by another party has the option to file a
suit for specific performance compelling to perform his part of contract. Before an equity
court will compel specific performance, however, the contract must be one which can be
specifically performed. Section 16 (c) of the Act envisages that plaintiff must plead and
prove that he had performed or has always been ready and willing to perform the essential
terms of the contract which are to be performed by him, other than those terms the
performance of which has been prevented or waived by the defendant.

Suit For Specific Performance of Contract- Practical Problems

Specific performance is a remedy developed by principle of equity. A party to a contract who is
damaged because the contract is breached by another party has the option to file a suit for
specific performance compelling to perform his part of contract. Before an equity court will
compel specific performance, however, the contract must be one which can be specifically
performed. Section 16 (c) of the Act envisages that plaintiff must plead and prove that he had
performed or has always been ready and willing to perform the essential terms of the contract
which are to be performed by him, other than those terms the performance of which has been
prevented or waived by the defendant. In our country, most of the specific performance suits
relate to sales of immoveable properties and to some extent, transfer of shares. As the law of
specific performance is basically founded on equity, considerations such as conduct of the
plaintiff, the element of hardship that may be caused to one of the parties, the availability of
adequate alternative relief and such other matters are taken into consideration. It is a
discretionary relief.

Suit For Specific Performance:

Illustration
A is owner of land. He executed an unregistered agreement of sale in favour of B and received
Rs. 50,000/- as an advance out of sale price of Rs.1,00,000/-. A has to execute a Regd. Sale deed
within three months from date of execution of agreement of sale. But, A refused to execute
Regd. Sale deed and sold the said property to C for higher price. B can sue against A for specific
performance.

From the above illustration, no doubt, B can file a suit for specific performance. This case
involve several aspects such as, whether plaintiff is ready and willing to perform his part of
contract or not; when would time is essence of contract?; Can C be impleaded in the suit as
party? Is escalation of price is a ground in such a suit? Question of Lis Pendens; whether B is
entitled for damages and compensation or not; whether an unregistered agreement of sale is
admissible or not etc. All these aspects are dealt in the following paragraphs with relevant
illustrations.

Elements That Are Involved In A Suit For Specific Performance Of Suit:-

Valid Contract :-
Normally, suit for specific performance of contract based on agreement of sale. Vague and
uncertain agreement could not be given effect to.( Vimlesh Kumari Kulshrestha vs
Sambhajirao, 2008 (2) Supreme 127). It was observed inAmbica Prasad vs Naziran Bibi, AIR
1939 All 64], [Balram v Natku, AIR 1928 PC 75 that there should be a valid contract for suit
for specific performance of contract.

Unregistered agreement of sale :-

Un registered agreement of sale is admissible in evidence under Section 49(c) of the Registration
Act in a suit for specific performance of contract. Unregistered sale deed is admissible in
evidence in a suit for specific performance.( S.Kaladevi vs V.R.Somasundaram, AIR 2010 SC
1654).
Conduct of the parties:-
Any person seeking benefit of specific performance of contract must manifest that his conduct
has been blemishless (H.P.Pyarejan vs Dasappa, AIR 2006 SC 1144). Similarly, conduct of
defendant cannot be ignored (Silvey vs Arun Varghese, AIR 2008 SC 1568). The relief of
specific performance is discretionary ( V.R.Sudhakara Rao vs T.V.Kameswari, (2007) 6 SCC
650). It was held in Aniglase Yohannan v. Ramlatha, 2005 (7) SCC 534 that if the pleadings
manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he
should not be denied the relief.

Readiness and Willingness:-

Section 16(c) of the Act mandates the plaintiff to aver in the plaint and establish the fact by
evidence aliunde that he has always been ready and willing to perform his part of the contract.
Distinction between “readiness” and “willingness” is that the former refers to financial capacity
and the latter to the conduct of the Plaintiff wanting performance ((2011)1SCC429). The
plaintiff’s readiness and willingness, which is a condition precedent, must be in accordance with
the terms of the agreement (Bala Krishna vs Bhgawan Das, AIR 2008 SC 1786), however, the
plaintiff need not carry money in his hand 
( M.K.Watts vs Usha Sharma, AIR 2004 P&H 295). In a suit for specific performance, plaintiff
is to approach Court with clean hands.( G.Jayashree vs Bhagawan Das, AIR 2009 SC 1749).
Right from the date of the execution till date of the decree he must prove that he is ready and has
always been willing to perform his part of the contract.( N.P. Thirugnanam v. Dr. R. Jagan
Mohan Rao and Ors, (1995) 5 SCC 115 at para 5). Even subsequent purchaser is entitled to
raise objection as to readiness and willingness. (AIR 2009 SC 2157). To know the consequences
in the case of absence of plea of readiness and willingness in the plaint, see ruling J.P. Builders
and Anr.Vs. A. Ramadas Rao and Anr, (2011)1SCC429).

Time is essence of contract:-

From the decision of a Constitution Bench of the Hon’ble Supreme Court in Chand Rani
v.Kamal RaniMANU/SC/0285/1993 : 1993 (1) SCC 519, it is clearly known that in the case of
sale of immovable property, time is never regarded as the essence of the contract. An intention to
make time the essence of the contract must be expressed in unequivocal language. As to the
point of limitation is concerned, the suit for specific performance has to be filed within
reasonable time which depends upon facts and circumstances of each case. (AIR 2009 SC 2157,
Azhar Sultana’s case). Even if it is not of the essence of the contract, the Court may infer that it
is to be performed in a reasonable time if the conditions are: 1. from the express terms of the
contract; 2. from the nature of the property; and 3. from the surrounding circumstances, for
example: the object of making the contract.( Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal
Rani (dead) by LRs, 1993 (1) SCC 519)