1

PAPER SUBMITTED

 on the topic

ALTERNATIVE REMEDIES FOR
SPECIFIC PERFORMANCE OF
CONTRACTS
                           

                                   

   by

Dr.H Amara Rangeswara Rao,

Junior Civil Judge cum

Judicial Magistrate of First Class,

Alamuru, E.G.Dt.,
 2

Table of Contents
Introduction................................................................................. 3
What is specific performance of a contract?.............................4
Discretionary Power- inadequacy test:.....................................4
Discretion as to decreeing specific performance: [OLD]............5
Justice, equity, and good conscience are guiding principles......6
Balance of convenience test....................................................8
Parties conduct test...............................................................9
Whether the inadequacy test is adequate :............................11
Burden of proof - Heavy Burden to prove...............................13
Alternative remedies for Specific Performance of Contracts:.........13
Power to award compensation in certain cases: (OLD)............13
Provision of contract providing for liquidated damages, does not
bar jurisdiction of the Court to grant decree of specific
performance........................................................................14
It is open to a plaintiff to pray for inconsistent reliefs.............15
Substitution of new cause of action is not permissible............15
Recession of the contract......................................................16
Principles of granting alternative relief..................................18
Are the alternatives are efficient and sufficient ?..........................20
Why specific performance shall be the right...........................20
Grant of damges shall be exception.......................................21
Demand for removal of inadequacy test.................................21
Shift from discretionary to mandatory...................................22
Substituted performance :..........................................................23
Substituted performance of contract : [NEW].........................23
What Section 20 (new) of the Act provides:............................23
Power to award compensation in certain cases: (NEW).................24
Whether the enforcement of the amendment is prospective or
retrospective?............................................................................26
Section 6 of the General Clauses Act :....................................26
 3

ALTERNATIVE REMEDIES FOR SPECIFIC
PERFORMANCE OF CONTRACTS

                                                      Dr. H.AmaraRangeswara Rao,
*
 
                                                 

Introduction
‘Ubi jus,ibi remedium’ denotes where there is a right, there is a remedy. In
the era of Globalization, a strong  contract  enforcement  system  is  essential
for  the  smooth  flow  of  trade  and  commerce,  and  for  developing
confidence  of  investors.  Globally  the  approach  to  contract  law  remedies
are  either:  (i)  compelling  performance,  by  holding  parties  to  their
contract  through  grant  of  specific  performance  and  injunctive  reliefs,  or
(ii)  compensating  for  loss  and  damages  caused  by  breach  of  contract,
with  specific  performance  being  in  the  nature  of  exception  rather  than
the  rule.  A contract being  a correlative set of rights and obligations for the
parties would be of no value, if there were no remedies to enforce the rights
arising there under. The remedies for breach of contract are:
1. Suit for damages or compensation

2. Suit for specific performance

3. Suit for injunction

4. Suit for rescission

5. Punitive damages

The law on this issue is dealt with in two statues viz., The Specific Relief
Act,   1963   and   The   Indian   Contract   Act,   1872.  The  approach   relating   to
specific performance  has  been  preferred  in India  under  the  Specific  Relief
Act,  1963.

Currently  under  Indian  law,  compensation  is  the  usual,  normal

and  natural  remedy,  and is  provided  under  sec.73  of  the  Indian  Contract
Act  1872.  An  order  of  compensation  must  put  the  promisee  in  a
position  as  if  his  contract  is  performed.  But  such  an  order  does  not
give  to  the  promisee  the  benefit  of  the  promise.  An  award  of
compensation  is  circumscribed  by  strict  tests  of  foreseeability
(contemplation)  and  mitigation.  A  promisee  may  not  be  able  to  prove  a"

*Junior Civil Judge cum Judicial Magistrate of First Class, Alamuru, E.G.Dt.,
 4

losses  he  has  suffered  by the  breach,  nor  will  such  amounts  claimed  be
awarded  to  him.  Proving  losses  with  certainty  is difficult.  A  decree  for
compensation  may  not  give  to  the  promisee  the  equivalent  of the  promise
that   is  broken.  A  decree  of  specific  performance  comes  closest  to
protecting  this  interest  it  gives  the  promisee  what  was  promised. 

Specific performance is an equitable  relief, given by the court to enforce
against a defendant, the duty of doing what he agreed by contract to do. Thus,
the remedy of specific performance is in contrast with the remedy by way of
damages for breach of contract, which gives pecuniary compensation for failure
to carry out the terms of contract. Damages and specific performance are both
remedies available upon breach of obligations by a party to  the  contract. The
former is a ‘Substitutional’ remedy, and the latter a ‘specific’ remedy.

What is specific performance of a contract?

Specific     Performance     is     equitable     relief     given     by     the     court     to

enforce  against a   defendant,   the   duty   of   doing   what   he   agreed   by
contract     to     do.     Specific performance means fulfillinng  a promise made
under a contract as agreed. A suit for specific performance can be led by any
party, in a court of competent jurisdiction, who has suffered loss due to non­
performance of contract on part of the other party to the contract. Remedy of
specific performance which is affected in case of breach of contracts is provided
by the equity courts. Prior to Amendment 2018, this cannot be asked for as a
right,  because  it   is  provided  on  the  satisfactory   discretion  of  the  court.  The
plaintiff   seeking   Specific   Performance   must   satisfy   the   court   that   the
normal  remedy  of  damages  is  inadequate. The  relief  must  be  specifically
claimed. When   the   plaintiff   claims   specific   performance   of   a   particular
agreement,     the     suit   could   be   decreed   for   specific   performance   of   that
particular   agreement   only,   but   not   for   any   other   agreement.   Parties   to   a
contract must perform their contractual obligations. In case of breach, they will
be sued for non­performance.

Discretionary Power­ inadequacy test:

As   per   THE   SPECIFIC   RELIEF  ACT,  1963,   the   remedy   of   specific

performance is not available to a party as a matter of right, but its grant was
based on the discretion of the court. The Amendment Act has brought about
a  substantive  change  in the  substratum  and  ethos  of  the  Act.  As per  the
 5

Amendment Act, the courts are bound to enforce the specific performance of
a contract as a rule, subject to limited exceptions.

Discretion as to decreeing specific performance: [OLD]

(1) 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.
(2) Following   are   the   cases   in   which   the   court   may   properly   exercise
discretion not to decree specific performance:
(a) where the terms of the contract or the conduct of the  parties at

the time of entering into the contract or the other circumstances
under   which   the   contract   was   entered   into   are   such   that   the
contract,   though   not   voidable,   gives   the   plaintiff   an   unfair
advantage over the defendant; or
(b) where   the   performance   of   the   contract   would   involve   some

hardship on the defendant which he did not foresee, whereas its
non­performance   would   involve   no   such   hardship   on   the
plaintiff; or
(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
 6

contract merely on the ground that the contract is not enforceable at
the instance of the party.

Justice, equity, and good conscience are guiding principles

Currently, Section 20 of the Act lays down that specific performance is a
discretionary remedy, and specifies certain non­exhaustive situations in which
specific   performance   is   not   to   be   granted.   While   Courts   have   opined   that
discretion is not to be exercised arbitrarily, and is to be exercised only on the
basis of sound judicial principles, the scope of the discretion is considerably
wide. The basic tenets on the basis of which discretion is to be exercised are
"justice, equity, and good conscience.  A.C. Arulappan v. Ahilya Naik.1  This
leads to a lack of certainty for those asking for this remedy, and creates the
need for limiting this discretion.

 As per the provisions of Sec.10 of the Act, as contained in Chapter II of
the Act, 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 non­performance of the act agreed to be done; or 

(b) when the act agreed to be done is such that compensation in money
for its non­performance would not afford adequate relief. 

As   per   Explanation   added   to  sec.10  of   the   Act,   unless   and   until   the
contrary is proved, the Court shall presume that the breach of a contract to
transfer immovable property cannot be adequately relieved by compensation in
money, It is a case of immovable property, breach on the part of the defendants
is   well   proved   and   in   such   circumstances,   specific   performance   should   be
enforced unless the case of the plaintiff is covered by any of the exceptions as
contained in Sec.12 or 16 of the Act. 

In Ram Dass v. Ram Lubhaya2 it was held that the principle of equity,
good   conscience   and   fairness   is   the   foundation   of   grant   of   relief   of   specific
performance.   The   object   of  Section   20  of   the   Specific   Relief   Act   is   to   avoid
resultant undue hardship to one party while avoiding undue gain to the other.
Mere lapse of time and in adequate consideration are no grounds to exercise
discretion under  Section 20  because  Section 20  is an exception to the rule of
grant of relief of specific performance. Once lawful agreement is proved, equity

1AIR 2001 SC 2783.

21998(2) R.C.R. (Civil) 642,
 7

would demand enforcement of an agreement rather than grant of alternative
relief of damage if the plaintiff was always ready and willing to perform his part
of the contract. Equity has to be balanced. If the defendant was guilty of the
breach of agreement he cannot be held entitled to any protection of equity. 

Further, In  Rattan Lal v. Smt. Bharpal and Ors.3  it was observed as

follows:­ 

"The  principles  of  law  enunciated  in these  cases  is  the  reiteration  of  settled
principles of law. The principles of equity, good conscience and fairness being
very foundation for grant of relief of specific performance is the concept not
introduced   by   judicial   pronouncement   but   explicitly   indicated   by   the
Legislature in the provision of  Section 20  of the Specific Relief Act. The very
language   of  Section   20  spells   out   and   indicates   the   wide   discretion   that   is
vested in the Court of competent jurisdiction to grant or decline to grant a relief
of   specific   performance   for   transfer   of   immovable   property.   The   guiding
principles   for   determination   of   such   controversies   have   been   consistently
cogitated by various Courts but to a common end. The common goal sought to
be achieved is to avoid resultant undue hardship to one party while avoiding
undue gain to the other by mere lapse of time attributable to erring party." 

The   jurisdiction   of   the   Court   to   decree   specific   performance   is

discretionary. Yet the discretion of the court is not arbitrary, but is on "sound
and reasonable" to be guided by judicial principles. Sub­section (2) of Section
20   contains   a   stipulation   of   those   cases,   where   the   court   may   exercise   its
discretion not to grant specific performance. 

The   jurisdiction   vested   in   the   Court   to  decline   specific   performance   and
grant alternative relief is a jurisdiction of equity and good conscience and must be
exercised in consonance of the settled principles of law. Even principles emerging
from judicial verdicts which are to guide the courts concerned while passing such
a decree and which have been specifically acted upon, are still open to correction
by the court of appeal. The provisions indicate the intention of the Legislature to
vest the Court with the wide discretion but still define the extent of caution with
which   such   power   should   be   exercised.   Settled   canon   of   limitations   on   the
discretion of the court have been well defined by various judicial pronouncements.
Precept of equity are accepted good in law. Reliefs in equity are founded on the
principle of good conscience and grant of effective relief. The maxim Actio de in
rem verso appears to be the underlining feature under the provision of Section 20

3 (1998­3)120 P.L.R. 525,
 8

of the Act. Exercise of judicial discretion does not admit a limitation extending to a
prohibition for grant of relief of specific performance. It is only where the judicial
conscience of the court is pricked to an extent that the Court first is able to see
inequities,   imbalances   created   against   one   party   and   in   favor   of   other,   that   it
would consider exercising its discretion under these provisions. The scheme of this
Act clearly shows that where a contract is proved in accordance with law and party
has acted without undue delay and has pursued its remedy in accordance with
law without infringing the settled canon of equity the grant of specific relief by
enforcing the contract would certainly be a relief which equity would demand. 

Balance of convenience test

  Performance of contract involving some hardship on the defendant, which
he   did   not   foresee,   while   non­performance   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   suit   arbitrarily.   Ordinarily,   the
respondent/plaintiff   is   not   to   be   denied   the   relief   of   specific   performance   on
account of phenomenal increase in price during the pendency of litigation As a
general rule, only the respondent/plaintiff alone cannot be allowed to have the
entire benefit of the increase in value of the property pending lis. The test is to see
who is the defaulting party. Only the totality of the circumstances have to be seen.
Inadequacy   of   consideration   or   the   fact   that   the   contract   is   onerous   to   the
defendant is not sufficient to deny the relief of specific performance. 

  In  K.S.   Vidyanadam   v.   Vairavan,4  petitioners   before   the   Supreme

Court   entered  into  an  agreement   with  the  respondent   to  sell   their  property.
However, the sale was not concluded and in the meantime, the property value
in Madurai has increased tremendously. Trial Court had granted the relief of
specific performance and it was reversed by the High Court with an observation
that   the   plaintiff   has   been   requesting   for   execution   of   the   sale   deed   by   the
defendants. Before the Supreme Court, the plaintiffs contended that time was
not the essence of contract in the case of an immovable property and as such,
rise in price in the meantime cannot be a reason to reject the prayer for specific
performance.   Supreme   Court   examined   the   entire   issue   in   the   light   of   the
earlier decisions and observed thus :­ 

"11. ... May be, the parties knew of the said circumstance but they have
also specified six months as the period within which the transaction
should be completed. The said time­limit may not amount to making

4 [(1997) 3 SCC 1],
 9

time the essence of the contract but it must yet have some meaning.
Not for nothing could such time­limit would have been prescribed. Can
it be stated as a rule of law or rule of prudence that where time is not
made the essence of the contract, all stipulations of time provided in
the contract have no significance or meaning or that they are as good
as non­existent? All this only means that while exercising its discretion,
the   court   should   also   bear   in   mind   that   when   the   parties   prescribe
certain time­limit(s) for taking steps by one or the other party, it must
have some significance and that the said time­limit(s) cannot be ignored
altogether on the ground that time has not been made the essence of
the contract (relating to immovable properties). 

Parties conduct test

  In  Sita   Ram   v.   Radhey   Shyam,5,   the   Supreme   Court   indicated   the

necessity of examining the conduct of the person seeking the relief of specific
performance thus :­ 

“The basic principle behind Section 16(c) read with Explanation (ii)
is   that   any   person   seeking   benefit   of   the   specific   performance   of
contract   must   manifest   that   his   conduct   has   been   blemishless
throughout entitling him to the specific relief. The provision imposes a
personal bar. The court is to grant relief on the basis of the conduct of
the person seeking relief. 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. (See Aniglase Yohannan v. Ramlatha
and ors. [2005(7) SCC 534].” 

  In  Lourdu Mari David v. Louis Chinnaya Arogiaswamy,6  the issue
before   the   Supreme   Court   was   regarding   the   specific   performance   of   the
agreement to sell the property. The suit filed by the plaintiff was dismissed by
the   trial   Court   on   the   ground   that   the   property   was   sold   to   a   bona   fide
purchaser for value without notice. The decree was confirmed in first appeal. In
the further  appeal before the Division Bench, a finding  was rendered to the
effect that the plaintiff has not come to the Court with clean hands. When the
matter   was   taken   up   before   the   Supreme   Court,   it   was   found   that   false
contentions were raised by the plaintiff in the suit. The Supreme Court was of
the   view   that   specific   performance   being   an   equitable   relief,   any   party   who

5 [(2007) 14 SCC 415]

6 [(1996) 5 SCC 589]
 10

comes   to   the   Court   with   unclean   hands   should   be   denied   the   remedy.   The
relevant paragraph would read thus:­ 

"2.It is settled law that the party who seeks to avail of the equitable
jurisdiction of a court and specific performance being equitable relief,
must come to the court with clean hands. In other words the party who
makes   false   allegations   does   not   come   with   clean   hands   and   is   not
entitled to the equitable relief." 

In Umabai and another vs. Nilkanth Dhondiba Chavan (dead) by Lrs
and another,7  necessity to produce some evidence to show that the plaintiff
was in a position to arrange the balance sale consideration was indicated by
the Supreme Court thus :­ 

"33. ... There must, thus, be some evidence to show that the plaintiff
could arrange for the amount stipulated for payment to the vendor as
and when called upon to do so." 

   Thus, the jurisdiction vested in the Court to decline specific performance
and grant alternative relief is a jurisdiction of equity and good conscience and
must   be   exercised   in   consonance   of   the   settled   principles   of   law.   Even
principles   emerging   from   judicial   verdicts   which   are   to   guide   the   courts
concerned while passing such a decree and which have been specifically acted
upon, are still open to correction by the court of appeal. The provisions indicate
the intention of the Legislature to vest the Court with the wide discretion but
still define the extent of caution with which such power should be exercised.
Settled   canon   of   limitations   on   the   discretion   of   the   court   have   been   well
defined   by   various   judicial   pronouncements.   Precept   of   equity   are   accepted
good in law. Reliefs in equity are founded on the principle of good conscience
and grant of effective relief. The maxim Actio de in rem verso appears to be the
underlining feature under the provision of Section 20 of the Act. 

Exercise of judicial discretion does not admit a limitation extending to a
prohibition   for   grant   of   relief   of   specific   performance.   It   is   only   where   the
judicial conscience of the court is pricked to an extent that the Court first is
able   to  see  inequities,  imbalances   created  against   one  party   and  in  favor   of
other, that it would consider exercising its discretion under these provisions.
The   scheme   of   this   Act   clearly   shows   that   where   a   contract   is   proved   in
accordance   with   law   and   party   has   acted   without   undue   delay   and   has
pursued its remedy in accordance with law without infringing the settled canon

7 [2005(6) SCC 243]
 11

of equity the grant of specific relief by enforcing the contract would certainly be
a relief which equity would demand. The Legislative intention behind  Section
20  cannot   be   stated   to   be   that   a   party   first   fails   to   perform   its   part   of   the
agreement later contests litigation on frivolous basis then that party cannot be
permitted   to  raise   a  plea   in  equity   that   value  of   the   property   has  increased
disproportionately resulting in an undue advantage to the plaintiff in a suit.
Resultantly it would not be fair to deny specific performance against such a
party. 

  A lawful agreement being proved and judicial conscience of the court being
satisfied   the   equity   would   demand   enforcement   of   an   agreement   rather   than
granting an alternative relief of damages to the plaintiff. It need not be reiterated
that   equity   must   give   relief   where   equity   demands.  Equitas   nuquam   liti
ancillatur ubi remedium potest dare is a clear illustration which has been duly
accepted by the Indian Courts. The time taken by the courts in deciding suit or
appeals would normally be not permitted to work to the disadvantage of the party
to the lis. Acts of the courts shall cause prejudice to none was so stated by the
Hon'ble Apex Court in the case of Atma Ram Mittal v. Ishwar Singh Puniab.8 In
the said judgement it was observed that   actus curiae neminem gravabit  and
held that once rights are crystallised, the adjudication must be in accordance with
law

Whether the inadequacy test is adequate :

A  promisee  who  wants  to  enforce  performance  by  the  promisor

through  arbitration  or  civil  courts  seeks  reliefs  of  specific  performance
or  injunction,  which  are  extraordinary  remedies  in  Indian  law,  the
Specific  Relief  Act,  1963. A  plaintiff  must  satisfy  a  threshold  test,  i.e.  he
must  show  that  compensation  is either  unascertainable or  is inadequate.
This  is  the.  inadequacy  test.  It  makes  these  remedies  exceptional  and
restricts  the  availability  of  specific  relief.  Also,  these  remedies  are  not
available  as  a  matter  of  right,  but  their  grant  is in the  discretion  of  the
Court.  The  inadequacy  test  is  the  first  hurdle  any  plaintiff  must  meet.
The  Act  prescribes  this  test  in  Section  10,  which  faithfully  follows,  with
a  small change,  the  provisions  of  Section  12 of  the  repealed  Specific Relief
Act,  1877.  

The  inadequacy  test  does  not  permit  the  remedy  of  specific
performance  (or  injunction)   for  every  contract.  By  operation  of  a

8 (1988) 4 SCC 284].
 12

presumption,  it  is in fact,  and  is considered  to  be,  generally  available  for
contracts  to  transfer  immovable  property.  In  the  case  of  contracts  to
transfer  movable  property,  the  presumption  operates  to  cast  contracts
into  types  or  categories.  Specific  performance  thus  gets  granted  for
certain  types  or  classes  of  contracts. In other classes, viz., contracts other
than for transfer of property, a plaintiff has to satisfy the inadequacy test. The
origin of this test lies in the history of English law. Equity courts could give
these reliefs only in those matters where compensation was not an adequate
remedy.
  The   operation   of   the   inadequacy   test   renders   uncertain   whether   the
remedy will be available. The possibility of exercise of court's discretion under
section   20     of   the   Act   increases   this   uncertainty.   Some   legal   systems
(Denmark, France, Germany, Louisiana (USA), Quebec (Canada), Spain ) do not
prescribe   the   test.   Some   common   law     systems   have   relaxed   the   test.
International conventions do not have this precondition (Principles of European
Contract   Law;   UNIDROIT   Principles   )(   Restatement   (Second)   of   Contracts
(1981), Chapter 16, Introductory Note. ). Academic writing suggests that the
test   be   removed.     One   view   is   that   the   test   is   dead.(Douglas   Laycock,   'The
Death of the Irreparable Injury Rule' (1990) 103 Harv LR 687; see para 7.)

Where the legal system prefers compensatory relief, the promisor has an
incentive to break his contract if such course of action is more beneficial for
him than performing it. Economic analysis"  endorses such efficient breach. It
has been observed: 'The duty to keep a contract means a prediction that you
must   pay   damages   if   you   do   not   keep   it   and   nothing   else'.   (Oliver
WendeHlomes'   Path   of   the   Law'(1997)3D   If   the   legal   system   were   to   make
available   specific   performance   or   injunction   as   a   natural   remedy   to   the
promisee, parties to the contract will consider themselves bound to perform it.
Such   provisions   will   affect   contractual   behaviour,   and   will   encourage
performance, 'and will discourage breach. 

The exceptional nature of specific relief arises from the inadequacy test.
It is justified on many grounds. A strong justification is made on the basis of
economic   analysts,"   which   recommends   breach   when   it   is   efficient.   When
compensation is the primary remedy and specific performance is exceptional,
the promisor is able to break the contract when it is more beneficial for him
than performing it. The promisee is expected to get compensated for his loss,
and get into the same position as if the promise is performed. In this view,
specific   performance   is   efficient     only   when   the   promisee   cannot   find   a
 13

substitute. This view assumes that the promisee can calculate all his losses,
and   that   a   decree   for   compensation   will   not   fully   compensate   his   losses.
However, there is also ample support in terms of economic analysis for routine
availability of speedy performance."  

  Giving  primacy  to  specific relief is based  upon  the  moral obligation to

honour  one's promises."  It  is a well­accepted view that  a regime that  allows
specific   relief   encourages   promisors   to   perform"   and   deters   breaches.   This
enables parties to plan their activities and transactions." 

Burden of proof ­ Heavy Burden to prove

  Inadequacy, or lack of it, must be proved." It  falls naturally on the plaintiff
seeking   specific   performance   or   injunction   to   prove   that   compensation   will   be
inadequate, having first proved the contract, its terms, and its breach. If it is a
contract for transfer of immovable property, the presumption assists him, shifting
the burden on the defendant to show adequacy of compensation." If it is a contract
for transfer of movable property, the plaintiff must show circumstances that will
satisfy  the presumption of inadequacy, i.e. that­the goods are unique, or  have
special  value for  him,  or  are  not  an  ordinary  article  of  commerce,  or  are  not"
available  in  the  market."   In  all  other   cases,  he  must   show   that   compensation
would be inadequate. There are difficulties in establishing this test. Inadequacy
often   gets   decided   as   a   matter   of   inference,   and   depends   on   the   individual
perception of the judge. 

Alternative remedies for Specific Performance of Contracts:

As   per   THE   SPECIFIC   RELIEF  ACT,  1963   a   plaintiff   can   claim

compensation   in   addition   to,   or   in   substitution   of   a   relief   for   specific
performance in a suit for specific performance of a contract. It means as per
old   Act,   compensation   can   be   claimed   as   an   alternative   relief   for   specific
performance.
As per The Specific Relief (amendment) Act, 2018 in section 21(1) of the
principal Act, for the words “, either in addition to, or in substitution of,” the
words “in addition to” was substituted. It means as per latest amendment,
compensation  can only   be  claimed  as an  additional relief ,  but  cannot  be
claimed as an alternative relief to the relief of specific performance.

Power to award compensation in certain cases: (OLD)

(1) In a suit for a specific performance of a contract, the plaintiff may also

claim   compensation   for   its   breach,   either   in   addition   to,   or   in

 14

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.  If, in any such suit, the court decides that
specific performance ought to be granted, but that it 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.
(3) 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.
(4) 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.

Provision   of   contract   providing   for   liquidated   damages,   does   not   bar

jurisdiction of the Court to grant decree of specific performance.
M.L. Devender Singh v. Syed Khaja9  in which after referring to Section
10  of   the   Specific   Relief   Act   and   the   Explanation   appended   thereto,   and
Sections 14,  20  and  23  it was held that the jurisdiction of a court to grant
specific performance "cannot be curtailed or taken away by merely fixing a sum
even as liquidated damages". The Supreme Court interpreted the wording  of
Sections   20  and  23  as   requiring   the   court   "to   determine,   on   the   facts   and
circumstances of the each case before it, whether specific performance of the
contract to convey a contract ought to be granted". Emphasis was placed on
the presumption to be drawn in terms of the Explanation 1 to Section 10 which
states that "unless and until the contrary is proved, the Court shall presume
that   the   breach   of   a   contract   to   transfer   immovable   property   cannot   be
adequately   relieved   by   compensated   in   money,   and   that   the   breach   of   a

9 [AIR 1973 SC 2457]
 15

contract to transfer movable property can be thus relieved."

  In  P.   D'Souza   v.   Shondrilo   Naidu,10  a   two­judge   Bench   of   the

Supreme   Court   referred   to   the   decisions   in  M.L.   Devender   Singh   v.   Syed
Khaja  and   Dadarao   v.   Ramarao,   and   concluded:   "a   distinction   between
liquidated damages and penalty may be important  in common law but as
regards equitable remedy, the same does not play any significant role". It was
noticed that in  Manzoor Ahmed Magray v. Ghulam Hassan Aram 11  and  A.
Abdul Rashid Khan v. P.A.K.A. Shahul Hamid,12  the ratio of M.L. Devender
Singh had been reiterated. It was held by the Supreme Court in P. D'Souza
that   inasmuch   as  the   decision   in  Dadarao  v.   Ramarao   did   not   notice   the
binding decision in M.L. Devender Singh and the statutory provisions, it was
per incuriam. Later in P.S. Ramakrishna Reddy v. M.K. Bhagyalakshmi, III13.
the   Supreme   Court   followed   its   earlier   decision   in  P.D'Souza   v.   Shondrilo
Naidu and rejected the contention that specific performance could be refused
if   there   was   a   default   clause   which   stipulated   that   in   the   event   of   the
commission of a breach, the appellant was entitled to forfeit the amount paid
by way of advance. It is emphasized that the document should be read as a
whole keeping in view the intention of the parties.

It is open to a plaintiff to pray for inconsistent reliefs

Under   0rder  VII  R.  7,  Civil  Procedure  Code  the  plaintiff  is  entitled  to
claim a relief in the alternative on the facts stated in the plaint and it was
open   to   him   to   pray   to   the   Court   to   award   damages   or   recision   of   the
contract may  be granted if the  Court did not  accept  his case for  grant  of
specific performance. Under 0. 7, r. 7, Civil Procedure Code it is open to a
plaintiff to pray for inconsistent reliefs. 

Substitution of new cause of action is not permissible.

When   a   suit   was   filed   for   recovery   of   earnest   money   or   damages,

subsequently he cannot substitute the relief of possession by way of specific
performance of the contract, which amounts to substituting a new cause of
action, as it would change the earlier cause of action. Earlier the claim was

10 [(2004) 6 SCC 649 ]

11 (1999) 7 SCC 703

12 (2000) 10 SCC 636

13 (2007) SLT 704
 16

set up to recover the amount but subsequently, if he wants to claim specific
performance   of   the   contract.   It   would   amount   to   abandoning   the   original
claim   and,   as   such,   amendment   of   the   plaint,   if   allowed,   would   certainly
amount   to  substituting   the  relief  as  well  as  cause   of  action,  which   would
cause serious prejudice to the defendants. This proposition of law arose in
Roop Chand Chaudhari v. Smt. Ranjit Kumari,14  wherein it was held as
under:­ 
"While   a   suit   to   claim   first   relief   of   specific   performance   with
alternative relief of  declaration/damages is permissible,  converse is
not   true.   Once   a   suit   for   return   of   the   earnest   money/advance   or
grant of damages is filed, such a plaintiff disentitles himself to the
alternative relief of specific performance even if claimed in the suit.
He cannot be allowed to amend his plaint later on to claim specific
performance of the contract as the first relief and return of earnest
money/advance   and/or   damages   as   an   alternative   relief.   This   is
primarily   on   the   rule   that   a   claim   for   return   of   earnest
money/advance and/or damages can be based on repudiation of the
contract   for   one   reason   or   the   other   and   once   the   contract   is
repudiated, the relief of specific performance would not be available
either as an alternative relief nor would such a relief be admissible by
amendment."

Following   the   law   enunciated   in   Roop   Chand   Chaudhary   (supra),   in

Rajinder Mohan Versus Manohar Lal15  held that the plaintiff having filed a
suit only for recovery of money and for interest is precluded to convert that
suit on a later date into suit for possession by way of specific performance by
seeking amendment of the plaint. 

Recession of the contract 

 Section 37 of the Specific Relief Act expressively provides for filing the
suit   for   specific   performance   with   an   alternative   plea   for   recession   of   the
contract but the converse is not provided. Similarly, a mere reading of the
Specific Relief Act  would show that the plaintiff sueing for recession of the
contract may not sue in the alternative for specific performance.
 In this connection reference may be made to s. 37 of the Specific Relief Act   16

14 [AIR 1991 (P&H) 212],

15 1999 (1) PLR 314
16 (Act No. 1 of 1877)
 17

which is to the following effect : 

"A plaintiff instituting a suit for the specific performance of a contract
in writing may pray in the, alternative that, if the contract cannot be
specifically   enforced,   it   may   be   rescinded   and   delivered   up   to   be
cancelled;   and   the   Court,   if   it   refuses   to   enforce   the   contract
specifically   may   direct   it   to   be   rescinded   and   delivered   up
accordingly." 

It is expressly provided by this section that a plaintiff suing for specific
performance   of   the   contract   can   alternatively   sue   for   the   rescission   of   the
contract but the converse is not provided. It is therefore not open to a plaintiff
to sue for rescission of the agreement and in the alternative sue for specific
performance.  Section 35  of the Specific Relief Act, 1877 states the principles
upon   which   the   rescission   of   a   contract   may   be   adjudged.   But   there   is   no
provision in this section or any other section of the Act that a plaintiff suing for
rescission of the agreement may sue in the alternative for specific performance.
In our opinion, the omission is deliberate and the intention of the Act is that no
such alternative prayer is open to the plaintiff. This view is borne out by the
following passage in "Fry on Specific Performance,17

"It   remains   to  remark   that   the   plaintiff,   bringing   an   action  for   the
specific performance of a contract, may claim in the alternative that,
if the contract cannot be enforced, it may be rescinded and delivered
up to be cancelled, provided that the alternative relief is based on the
same state of facts, 'though with different conclusions as to law.

When the action is brought by the vendor, and the purchaser has been
in possession, this alternative claim may embrace an account of the rents
and   profits.   Bu   t,   for   the   reason   already   stated,   a   suit   to   set   aside   a
transaction   for   fraud   or,   in   the   alternative,   for   specific   performance   of   a
compromise   could   not   be   sustained   in   the   Court   of   Chancery.   And
notwithstanding   the   provisions   of   the   Rules   of   the   Supreme   Court   as   to
alternative   claims   for   relief,   it   seems   probable   that   the   same   conclusion
would still be arrived at, on the ground that the claims were inconsistent and
embarrassing."

17. 6th Edn.', p. 493" : 
 18

Principles of granting alternative relief
In    Kanshi   Ram   vs.   Omprakash 18  it   was   held   that   in
working   out   equities,   courts   would   in   appropriate   cases   grant
alternative   relief   instead   of   granting   decree   for   specific
performance. 

In   Leelavathi Vs P.Sarada devi19  It was held that  “alternative relief

can be granted  to  plaintiff only  when  defendant  in  the  suit  does  not
dispute  the  facts relevant to such a relief and when such an issue is raised
at the trial“.

In, “Balasaheb Dayandeo Naik Vs. Appasaheb Dattatraya Pawar  20
the Hon'ble Apex Court held that, the plaintiff is entitled to seek alternative
relief   of   refund   of   earnest   money   in  event   of   decree   for   specifc   performance
cannot be granted for any reason. 
In, “P.C. Varghese Vs. Devaki Amma Balambika Devi” 21  the Hon'ble
Apex Court held that, Decree for partition and separate possession of property
can   be   granted   in   addition   to   decree   for   specific   performance   of   contract.
Section   22   enacts   a   rule   of   pleading   that   in   order   to   avoid   multiplicity   of
proceedings, the plaintiff may claim a decree for possession and or partition in
a   suit   for   specific   performance,   ordinarily,   a   proceeding   for   grant   of   a   final
decree   for   partition   should   be   initiated   after   the   sale   deed   in   terms   of   the
decree   for   specific   performance   of   contract   is   executed   registered   and   not
viceversa.
Hon'ble Supreme Court in Babu Lal v. M/s.Hazari Lal Kishori Lal,22
was of the view that when the court grants a decree for specific performance,
what  it  promises  to do  is  all such  things  as the  parties  would have been
bound   to   do   had   this   been   done   without   the   intervention   of   the   Court.
Therefore, when the decree for execution of a sale deed is realised, it pre­
supposes   that   the   decree   holder   would   be   put   in   possession.     In
K.M.Rajendran   v.   Arul   Prakasam,23  wherein   it   is   held   that   in   a   suit   for
18 (AIR 1996 S.C 2150)

19 [2010(1)ALT 89].

20 [2008 A.I.R. SCW 1183]
21 [2006 A.I.R. (SC) 145],
22 [AIR 1982 SC 818],

23 1998 (3) CTC 25: AIR 1998 Mad 336
 19

specific   performance   of   an   agreement   to   transfer   an   immovable   property,

once a decree for specific performance is granted, it includes the term for
delivery   of   possession   and   it   is   unnecessary   for   the   court   to   direct   such
delivery   of   possession   expressly   because   the   Court   was   directing   the
enforcement   of   the   entire   agreement,   including   the   agreement   to   deliver
possession.   In para 25 of the judgment recollected the difficulties faced by
the decree holder in getting the fruits of the decree for nearly 20 years and
held that successive vendors cannot be allowed to raise the same issue again
and again. It is held so by pointing out the observation of the Bombay High
court   in  Prataprai   Trambaklal   Mehta   v.   Jayant   Nemchand   Shah,24  that
...there would be no end to litigation and justice would be defeated, thereby
defeating the right of the decree holder forever.
one view being that the cause of action for   claiming relief for partition
and possession could accrue to the plaintiff only after he acquired title to the
property on the execution of a sale deed in his favour and since the relief for
specific performance of the contract for sale was not based on the same cause
of action as the relief for partition and possession, the two reliefs could not be
combined   in   one   suit.   Similarly,   a   case   may   be   visualized   where   after   the
contract   between   the   plaintiff   and   the   defendant   the   property   passed   in
possession of a third person. A mere relief for   specific   performance   of   the
contract   of   sale  or  may  not  entitle  the plaintiff to obtain possession as
against   the party in actual possession of the  property.  As  against  him,  a
decree  for  possession  must  be  specifically claimed for such a person is not
bound by the contract ought to be enforced.
In a case where exclusive possession is with the contracting party, a
decree  for  specific  performance   of   the   contract   of   sale simplicitor,
without specifically providing for delivery of possession, may give complete
relief   to   the   decree   holder.   In   order   to   satisfy   the   decree   against   him
completely he is bound  not  only  to  execute  the  sale deed but also to put
the property in possession of the decree holder. This is consonance with the
provisions of Section 55(1) of the Transfer of Property Act which provides that
the seller is bound to give, on   being   so   required,   the   buyer   or   such
person  as  he directs,   such possession of the property as its nature admits.
To sum up the topic it can said in short. The relief of specific performance of
contract is discretionary relief.  However the discretionary must be   used   in
lawful manner the court has  to  consider  the  general principles of  Indian
Contracts   Act   equitable   principles   while   exercising   the   discretion.   It   is

24 AIR 1996 Bom. 296,
 20

necessary to consider the circumstances in case in each case the conduct of
parties and the respective interest under the contract.
Further,   in   a   breach   of   contract,   recovery   of   possession   of   Property.
Rectification  and  cancellation  of   Instruments,  preventive  relief,  declaratory
relief and Suit for quantum merit are some other modes of the alternative
remedies. 
Are the alternatives are efficient and sufficient ?
Under the present law, a plaintiff is required to seek, plead and prove his
alternative claim for compensation in his suit for specific performance." Under
the existing law, compensation in suits for specific performance are assessed
with reference to section 73 of the Indian Contract Act, and are assessed at the
time of breach. Case law suggests that a court can assess compensation with
reference to a later date.
As   noted   earlier,   the   present   system   compels   the   victim   of   breach   to
justify   his   claim   so   that   he   can   get   the   benefit   of   his   contract.   The   initial
burden of proof lies on him to show non­existence of substitutes. This negative
burden is a difficult one to discharge. It is expected that if the promisee has
substitutes available, he will avail of that opportunity. If he suffers  loss, he will
claim compensation. He will aim to complete his business. The law should also
encourage   him   to   do   so   because   this   course   of   action   will   achieve   for   the
promisee the completion of his task, leaving him free to claim compensation if
his loss is substantial enough to warrant filing litigation.

Why specific performance shall be the right.

Where specific performance is not available as a right, but is based on
the Court's finding about inadequacy or satisfaction of other criteria for grant
of equitable relief, the plaintiff can never be sure about the remedy. Moreover,
when the defendant can change the situation and make transactions pending
litigation,  enforcing   an order  of  specific  performance  becomes more  difficult.
Many a defendant has pleaded rise in prices as a defence in a suit for specific
performance." Circumstances can be created in such manner that a plaintiff's
rights can be defeated by events after the suit. Where specific performance lies
in   discretion   of   the   Court,   and   is   not   available   as   a   right,   the   breaching
promisor can continue to hope for forgiveness of his breach and avoid specific
performance by making offers   and seeking compromises pending litigation."
He might also hope for a settlement in Court discounting breach." The party
who has the stamina and resources to keep litigation going can hope for such
indulgence   from   the   higher   courts.   When   specific   performance   is   routine/
 21

promisors will refrain from changing the state of affairs pending proceedings. It
is   therefore   essential   that   the   rights   of   the   aggrieved   party   should   remain
unaffected by the progress of and time involved in litigation.
If a promisee has the right to receive the amount he has spent, he will be
able to obtain cover and will prefer to do so with confidence. He will seek the
amount   spent   by   him   for   obtaining   substitute   performance,   as   an   effective
alternative to specific performance. He will have the benefit of his contract very
close to the time fixed for performance in the contract, rather than having to
wait for the decree of specific  performance. 
Further, if the promisor knows that  the promisee can exercise such a
right  at  the  promisor's cost, the promisor  is likely   to perform  himself.  Such
provision   will   match   the   legal   provision   that   generally   allows   a   promisor   to
delegate   the   task   of   performing   the   act   promised.   Such   a   scheme   also
complements   the   system   that   recognizes   the   inadequacy   test,   and   can   be
provided even if the inadequacy test is retained.  However, the promisee might
abuse   his   right   and   create   a   heavy   burden   on   the   promisor.   This   can   be
prevented by requiring him to give an opportunity to the promisor, and notice
to promisor about the cost of substitute performance that the promisor would
have to bear. 

Grant of damges shall be exception

  A   study   about   applying   the   inadequacy   test   (or   its   relative   ­   the
irreparable   loss   test   in   interim   matters)   concludes   that   the   test   is   applied
without   appropriate   analysis,   and   judgments   deciding   inadequacy   without
giving   reasons,"   and   based   on   inferences   rather   than   facts."   The   study   also
concludes that the inadequacy test is granted in many situations and cases for
protection of monetary interests." If specific performance and injunction are no
longer   exceptional,   courts   can   deal   with   such   cases   with   a   consistent
approach. 

  A   decree   for   compensation   does   not   compensate   fully.   This   is   because

compensation   is   calculated   with   reference   to   date   of   breach."Interest   on   the
amount of compensation is rarely awarded." The decree does not take into account
events after breach until execution of the decree. Specific performance can give the
promisee the fullest relief possible. 

Demand for removal of inadequacy test

Even   if   specific   performance   is   a   routine   remedy,   parties   would   seek

specific   relief   in   the   same   type   of   cases   in   which   it   is   available   under   the
 22

present   law."   This   is   actually   also   the   strongest   justification   of   relaxing   the
grant of specific relief." If the promisee has the choice of his remedy, he will
choose   compensation   after   obtaining   substitutes.   He   will   also   ask   for
compensation where he expects the promisor to be reluctant or hostile, where
the performance will require supervision not available from the court, or where
he cannot suspend his affairs pending orders from the court. He will choose
specific performance only if there is no substitute, either because the subject
matter is not available, or is of special value to him, and where he is willing to
wait for relief till execution of the decree. Hence there need not be any fear of
increase in litigation and administrative costs.
The   legislators   thought   that   If   the   inadequacy   test   is   removed,   the
promisee can choose his own remedy. The promisee is the best judge of his
own   interest,   and   whether   substitutes   satisfy   his   needs.   He   has   more
information than the courts whether compensation is adequate, what it would
cost him to get specific performance, and whether his promisor will obey the
decree." He is unlikely to sue for specific performance if he finds a substitute or
where compensation will be adequate.
Such a regime will change contract behaviour, encourage performance of
contracts, and will deter breach. It will ease the burden of proof that presently
lies   on   the   promisee,   who   has   already   suffered   by   the   breach.   It   will   also
encourage   parties   to   think   en­ante     about   remedies,   and   make   appropriate
provisions in their contracts choosing remedies. 

Shift from discretionary to mandatory

In view of the afore stated reasons, three major changes are suggested in
the recommendations contained in a Report submitted by an Expert Committee
to the Government of India in 2016 :­
(i)   Specific     performance   and   injunction   should   no   longer   be   an
exceptional remedy, but should be available to any promisee who
seeks   these   reliefs,   whether   through   courts,   tribunals,   or   in
arbitration.   Interference   with   these   remedy   in   exercise   of
discretionary powers of the court should be minimal, and on specific
grounds only.
(ii)   If   the   promisor   refuses   or   fails   to   perform   his   promise,   the
promisee should be entitled get the performance completed through
a third party, at the cost  of the promisor.
(iii)   Where   a   promisee   seeks   specific   performance,   his   interests
should not be prejudiced by passage of time during litigation. His
 23

interests should be protected by appropriate interim orders.
Accordingly the following amendments were made to the Act

Substituted performance :

In  THE  SPECIFIC  RELIEF  (AMENDMENT)  ACT,  2018,  Section  20  of the
old   Act   was   totally   substituted   with   the   new   provision   as   shown  below.  It
provides an alternative to the party who suffers by breach of contract to go for
substituted performance through a third party or by his own  agency,  and  he
can  recover the expenses and other costs actually incurred, spent or suffered
by   him,   from   the   party   committing   such   breach,   subject   to   conditions
mentioned below.

Substituted performance of contract : [NEW]

(5) Without prejudice to the generality of the provisions contained in the

Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed
upon   by   the   parties,   where   the   contract   is   broken   due   to   non­
performance of promise by any  party,  the party who suffers by such
breach   shall   have   the   option   of   substituted   performance   through   a
third party or by his own agency, and, recover the expenses and other
costs   actually   incurred,   spent   or   suffered   by   him,   from   the   party
committing such breach.
(6) No substituted performance of contract under sub­section (1) shall be

undertaken   unless   the   party   who   suffers   such   breach   has   given   a
notice in writing, of not less than thirty days, to the party in breach
calling upon him to perform the contract within such time as specified
in the notice, and on his refusal or failure to do so, he may get the
same performed by a  third  party or by his own agency: Provided that
the party who suffers such breach shall not be entitled to recover the
expenses   and   costs   under   sub­section   (1)   unless   he   has   got   the
contract performed through a third party or by his own agency.
(7) Where   the   party   suffering   breach   of   contract   has   got   the   contract

performed   through   a   third   party   or   by   his   own   agency   after   giving

notice under sub­section (1), he shall not be entitled to claim relief of
specific performance against the party in breach.

What Section 20 (new) of the Act provides:

When there is a breach of contract by any  party,  then the party who

suffers   by   such   breach   shall   have   the   option   of   substituted   performance
 24

through a third party or by his own agency PROVIDED, he has given a notice
in writing, of not less than thirty days, to the party in breach calling upon
him to perform the contract within such time as specified in the notice, and
on his refusal or failure to do so, he may get the same performed by a third
party or by his own agency
 He can recover the expenses and other costs actually incurred, spent
or suffered by him, from the party committing such breach.
 The  party  who  suffers  such  breach  shall not  be  entitled  to  recover the
expenses and costs under sub­section (1) unless he has got the contract
performed through a third party or by his own agency.
 Where   the   party   suffering   breach   of   contract   has   got   the   contract
performed   through   a   third   party   or   by   his   own   agency   after   giving
notice   under   sub­section   (1)  i.e.,  substituted   performance,   then   he
shall not be entitled to claim relief of specific performance against the
party in breach, as he has already got the contract performed through
third party or by his own  agency.  At this point he can only claim to
recover   the   expenses   and   other   costs   actually   incurred,   spent   or
suffered by him, from the party committing such breach.
 If the party suffering breach of contract has not opted for substituted
performance,   then   he   can   claim   the   relief   of   specific   performance.
Further   if   he   intends   to   claim   compensation,   then   he   can   claim
compensation as an additional relief to that of specific relief, but not as
an alternative relief.

Power to award compensation in certain cases: (NEW)

(1) In a suit for specific performance of a contract, the plaintiff may also

claim compensation for its breach [in addition to] 1 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 it 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
 25

section, the court shall be guided by the principles specified in section
73   of   the   Indian   Contract   Act,   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.
As per Section 21, in a suit for specific performance of a contract, if the
plaintiff claimed specific relief in addition to compensation, then:

 If the court is of the opinion that specific performance should not to be
granted, but there is a breach of contract between the parties and that the
plaintiff is entitled to compensation for that breach, then the court shall
award him such compensation accordingly.
 If the court is of the opinion that specific performance should be granted,
but that it 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, then court shall award him such compensation along with the
specific relief.
 The   amount   of   any   compensation   awarded   under   this   section   shall   be
guided by the principles specified in section 73 of the Indian Contract Act,
1872.
 Unless   the   plaintiff   has   claimed   the   compensation   specifically,   No
compensation   shall   be   awarded   to   the  plaintiff.  If   the   plaintiff   has   not
claimed   any   such   compensation   in   the   plaint,   at   any   stage   of   the
proceeding the plaint can be amended and can include a claim for such
compensation.
Section   22:   Power   to  grant   relief   for   possession,   partition,   refund   of
earnest money, etc.

Under Section 22(1) any person suing for the specific performance of a
contract for the transfer of immovable property may, in an appropriate case,
ask for:

(a) possession, or partition and separate possession, of the property as an

additional relief or
 26

(b) refund of any earnest money or deposit paid or made by him as an

alternative  relief,  in case his claim for specific performance is refused

or
(c) any other relief to which he may be entitled Above reliefs under section

22(1)  shall  be  granted  by  the  court  only  if  they  are   specifically
claimed. If the plaintiff has  not  claimed any such relief in the plaint,
then at any stage of the proceeding court shall allow him to amend the
plaint for including a claim for such relief.

Whether the enforcement of the amendment is prospective or
retrospective?
Now the crucial question for consideration is whether the benefit of the
said   amendments   can   be   extended   and   applied   to   the   contracts   entered
between the parties, which were entered prior to the amendment came in to
force? An important element in the examination of whether the Amendment Act
is prospective or retrospective in its application is to understand the objectives
behind the amendments.  The amendments seek to bring about a substantive
change   in   the   law   by   stating,   for   the   first   time,   that   the   remedy   of   specific
performance   when   sought   for   breach   of   contract,   would   no   longer   be
exceptional or discretionary and would be available to a party as a matter of
right.   The   amendments   do   away   with   the   discretion   of   the   courts   to   grant
specific performance of contracts. 

This  is  crystal clearly   a  substantive  change  in law   that  is  remedial  in

nature.   Remedial   statutes   are   necessarily   regarded   as   prospective   unlike
declaratory   or   clarificatory   statutes,   which   are   considered   retrospective.
Therefore,   from   this   perspective,   the   Amendment   Act   would   need   to   be
construed   as   not   having   retrospective   effect.  [Union   of   India   v.   Indusind
Bank Limited25

Section 6 of the General Clauses Act :

As   the   Amendment   Act   has   led   to   the   repeal   and   substitution   of   the
corresponding   provisions   of   the   Act,  the   general   law   in   relation   to  repeal   of
statutory provisions would be applicable, which is to be found in Section 6 of
the General Clauses Act. Section 6 inter alia states that a repeal shall not affect
any right, privilege, obligation or liability acquired, accrued or incurred under
any   enactment   so   repealed.   It   also   saves   the   previous   operation   of   any
25 (2016) 9 SCC 720]
 27

enactment   so   repealed   or   anything   duly   done   or   suffered   thereunder.[The

Gujarat   Electricity   Board   v.   Shantilal   R.   Desai 26]   Section   6   protects
accrued and vested rights by stating that the said rights can still be enforced
notwithstanding   the   repeal   of   the   statute   under   which   that   right   accrued
unless the repealing statute took away such right expressly or by necessary
implication.

Under the Act (un­amended), there was an obligation cast on the plaintiff
seeking specific performance to prove that compensation as a remedy is either
inadequate   or   unascertainable.   Specific   performance   as   a   remedy   was   not
available to a party as a matter of right, but its grant was dependent on the
discretion   of   the   court.   This   obligation   of   the   plaintiff   can   be   viewed   as   a
corresponding right or privilege enjoyed by a defendant. By virtue of Section 6,
the   aforementioned   right   and   obligation   that   accrued   when   the   Act   (un­
amended) was in force, would stand preserved even after the introduction of
the Amendment Act. This is particularly so because the plain language of the
Amendment Act (which is the repealing statute in the present case) does not in
any way indicate an intendent to take away accrued and vested rights.

When can the right or obligation be said to have accrued or vested upon a
party? This right accrues or vests only when a breach of the contract occurs or,
in other words, when the dispute arises.[Baroda Cement and Chemical Ltd.
v. Commissioner of Income Tax,27] In the absence of a breach or a dispute, no
right   under   the   Act   (un­amended)   can   be   said   to   have   accrued.   It   does   not
matter that the contract was entered into prior to the Amendment Act coming
into force – i.e. at a time when the Act (un­amended) was in force. Therefore,
the   applicability   of   the   Amendment   Act   would   extend   to   all   breaches   and
disputes that have arisen subsequent to the Amendment Act coming into force,
regardless   of   whether   those   contracts   were   entered   into   prior   to   the
Amendment Act coming into force. 

­­­­***­­­­­ 

26 AIR 1969 SC 239

27 1986 158 ITR 636 Guj.