Relief Of Specific Performance Of Contract Is No Longer Discretionary After 2018 Amendment: SC [Read Judgment]

Relief of specific performance of a contract is no longer discretionary, after the 2018 amendment, observed the Supreme court in a judgment delivered on Friday.

The bench comprising Justices Uday Umesh Lalit and Indira Banerjee observed thus in an appeal arising out of a specific performance suit. Though the case involved interpretation of Specific Relief Act prior to 2018 amendment, the bench observed thus:

"After the amendment of Section 10 of the S.R.A., the words "specific performance of any contract may, in the discretion of the Court, be enforced" have been substituted with the words "specific performance of a contract shall be enforced subject to ...". The Court is, now obliged to enforce the specific performance of a contract, subject to the provisions of sub-section (2) of Section 11, Section 14 and Section 16 of the S.R.A. Relief of specific performance of a contract is no longer discretionary, after the amendment."

Section 10 now reads as follows: The Specific performance of a contract shall be enforced by the court subject to the provisions contained in subsection (2) of section 11, section 14 and section 16.

In this case, the vendor, after execution of the sale agreement with the Vendee, executed a registered deed of conveyance transferring 100 sq. yards of the suit land in favour of another person Pratap Reddy.  This made Vendee file a suit for specific performance of the agreement of sale, but did not array Pratap Reddy as a party. The trial Court held that the Vendee, was not entitled to seek specific performance of the agreement in respect of 100 sq. yards covered by the sale deed , but entitled to relief of specific performance in respect of the remaining 200 sq. yards of the suit land. The High Court dismissed the appeals.

In the appeal filed by Vendor, the Apex Court bench noted that Section 12 of the Specific Relief Act carves out exceptions, where the Court might direct specific performance of a contract in part. It said:

"Where a party to the contract is unable to perform the whole of his part of the contract, the Court may, in the circumstances mentioned in Section 12 of the S.R.A., direct the specific performance of so much of the contract, as can be performed, particularly where the value of the part of the contract left unperformed would be small in proportion to the total value of the contract and admits of compensation.. The Court may, under Section 12 of the S.R.A. direct the party in default to perform specifically, so much of his part of the contract, as he can perform, provided the other party pays or has paid the consideration for the whole of the contract, reduced by the consideration for the part which must be left unperformed. ."

Section 12 of the SRA is to be construed and interpreted in a purposive and meaningful manner to empower the Court to direct  specific performance by the defaulting party, of so much of the contract, as can be performed, in a case like this. To hold otherwise would permit a party to a contract for sale of land, to deliberately frustrate the entire contract by transferring a part of the suit property and creating third party interests over the same.. Section 12 has to be construed in a liberal, purposive manner that is fair and promotes justice. A contractee who frustrates a contract deliberately by his own wrongful acts cannot be permitted to escape scot free."

After having entered into an agreement for sale of 300 Sq. yards of land, with her eyes open, and accepted a major part of the consideration (Rs.45,000/- out of Rs.75,000/-) it does not lie in the mouth of the Vendor to contend that the contract should not have specifically been enforced in part, in respect of the balance 200 sq. yards meters of the suit land which the Vendor still owned, the bench observed, while dismissing the appeal.

Case no.: CIVIL APPEAL NO.3574 OF 2009

Case name: B. SANTOSHAMMA vs. D. SARALA

Coram: Justices Uday Umesh Lalit and Indira Banerjee

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