Meaning and Scope

In cases of breach of contract, the most common remedy is the award of damages (monetary compensation). However, in certain situations, damages may not be an adequate remedy. The law provides an alternative remedy called Specific Performance, which is an equitable remedy.

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Meaning

Specific Performance is a discretionary remedy granted by a court that compels the breaching party to perform the actual promise made in the contract, rather than merely paying damages for the breach. It is an order by the court directing the defendant to carry out their contractual obligations exactly as agreed.

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Enforcement of the actual terms of the contract

The core idea behind specific performance is the enforcement of the precise terms of the contract. While damages provide monetary compensation for the loss, specific performance aims at achieving the very performance that was promised. It is granted when the subject matter of the contract is unique or has a special value that cannot be adequately compensated by money.

The law governing specific performance in India is primarily the Specific Relief Act, 1963. It is a discretionary remedy, meaning the court is not bound to grant it even if a breach is proven. The court considers various factors before deciding whether to grant specific performance, including the adequacy of damages, the nature of the contract, the conduct of the parties, and whether enforcing specific performance would be equitable and just.

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Answer:

Contracts which can be specifically enforced (Section 10 of Specific Relief Act, 1963)

Section 10 of the Specific Relief Act, 1963 specifies the types of contracts that can ordinarily be specifically enforced. While the remedy remains discretionary, these are the cases where the court is more likely to grant specific performance.

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Cases where specific performance may be enforced:

Section 10 (as amended by Specific Relief (Amendment) Act, 2018):

"The specific performance of a contract shall be enforced by the Court, save as otherwise provided in this Act."

Prior to the 2018 amendment, Section 10 listed circumstances where specific performance *may* be granted, emphasizing the discretionary nature. The amendment makes specific performance the *rule*, stating it "shall be enforced", except where otherwise provided in the Act (e.g., Section 11(2), 14, 16, etc., which still allow for refusal or declare certain contracts as not specifically enforceable). The intent of the amendment is to make specific performance a more readily available remedy, particularly in contracts relating to infrastructure projects and where damages are not ascertainable.

However, interpreting the amended Section 10 requires reading it alongside other provisions of the Act that still permit the court to refuse specific performance in various situations. Essentially, specific performance is now the primary remedy unless there are grounds for refusal under other sections. The types of contracts where it is typically enforced include:

• Where damages are not an adequate remedy: Section 10, even in its amended form, must be read in light of the principle that specific performance is typically granted when monetary compensation is not sufficient to put the aggrieved party in the position they would have been in. This is usually the case in contracts for:
  • Sale or transfer of immovable property: Damages are generally considered inadequate because each piece of land is unique.
  • Sale of movable property which is unique or has special value (e.g., rare painting, antique, shares in a private company that are not readily available in the market).
• Where the compensation cannot be ascertained: Where it is impossible to ascertain the actual damage caused by the non-performance of the act agreed to be done. (This was a ground in the unamended Section 10, and remains relevant).
• Infrastructure Project Contracts (Section 20A, 20B, 20C - inserted by 2018 amendment): The Act specifically provides for specific performance of contracts related to infrastructure projects, recognizing their importance for public interest and the difficulty in quantifying damages for delays or non-performance in such projects. Courts are now generally required to grant specific performance in such cases unless it is explicitly excluded or impossible.

The 2018 amendment aimed to reduce judicial discretion in favour of specific performance, especially for commercial contracts and infrastructure projects, while still retaining grounds for refusal in certain cases.

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Answer:

Contracts which cannot be specifically enforced

Notwithstanding the general rule in Section 10, the Specific Relief Act, 1963, in Section 14 (as amended in 2018), lists specific types of contracts which cannot be specifically enforced. These are cases where granting specific performance is either impossible, impractical, or undesirable for various reasons.

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Contracts not specifically enforceable (Section 14)

Section 14 (as amended by Specific Relief (Amendment) Act, 2018):

"The following contracts cannot be specifically enforced, namely:—

(a) a contract where a party has obtained substituted performance of contract in accordance with the provisions of section 20;

(b) a contract which runs into such minute or numerous details or which is dependent on the personal qualifications of the parties, or otherwise from its nature is such that the court cannot enforce specific performance of its material terms;

(c) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise;

(d) a contract of which the performance involves the exercise of a discretion which the court cannot enforce."

Let's break down these categories:

• **(a) Substituted Performance (Section 20):** The 2018 amendment introduced Section 20, which allows an aggrieved party, upon breach, to obtain performance of the contract from a third party or by their own agency and recover the costs from the breaching party. If the aggrieved party has already opted for and obtained such 'substituted performance' as per Section 20, they cannot subsequently seek specific performance of the original contract.
• **(b) Contracts based on Personal Qualifications or Difficult to Supervise:** This is a significant category.
  • Personal Qualifications: Contracts that depend on the personal skill, ability, taste, or confidence of the parties (e.g., contracts to paint a picture, sing, write a book, perform a service requiring unique expertise). The court cannot compel a person to exercise their personal talents.
  • Minute or Numerous Details / Difficult to Enforce: Contracts that involve extensive details, continuous acts, or complex tasks that the court cannot effectively supervise. Enforcing such contracts through court orders would be burdensome and impractical for the judiciary. (Building contracts can sometimes fall into this category, though there are exceptions).
• **(c) Continuous Duty Requiring Supervision:** Contracts that require ongoing performance or a continuous duty over a period, which would necessitate continuous monitoring and supervision by the court. Courts are generally not equipped for such prolonged administrative tasks.
• **(d) Contracts Involving Discretion:** Contracts that require a party to exercise discretion or make subjective judgments, which the court cannot compel or replicate.

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Examples of contracts not specifically enforceable:

• A contract to employ someone (involves personal service/qualifications).
• A contract to sing at a concert (personal skill).
• A complex building contract requiring ongoing supervision of quality and detail (can be difficult to enforce, although exceptions exist).
• A contract to manage a business (continuous duty, discretion).
• A contract to paint a picture (personal skill).
• A contract to lend money (money is not unique, damages are adequate remedy - though recovery of loan might be subject to other laws).
• A contract which is determinable (can be terminated by either party - Section 14(d) of pre-2018 Act, principle still relevant).

The rationale behind these exclusions is that specific performance is an equitable remedy, and the court will not grant it if it would be futile, oppressive, or require the court to undertake tasks it is not designed for.

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Answer:

When specific performance may be refused

Even in cases where a contract is of a type that is ordinarily specifically enforceable (under Section 10), the court still retains the discretion to refuse the remedy under certain circumstances. Section 16 (as amended) and Section 20 (of the unamended Act, principles still relevant unless contrary to new Section 14) list various grounds upon which specific performance may be refused, even if not absolutely prohibited by Section 14.

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Grounds for refusing specific performance (Section 16, etc.)

Section 16 (as amended):

"Specific performance of a contract cannot be enforced in favour of a person—

(a) who has obtained substituted performance of contract under section 20; or

(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be carried out, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or

(c) who fails to 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."

This section outlines grounds related to the conduct of the plaintiff seeking specific performance:

• **(a) Opting for Substituted Performance:** If the plaintiff has already chosen to get substituted performance from a third party under Section 20, they cannot then seek specific performance from the original breaching party.
• **(b) Plaintiff's Own Default/Misconduct:** Specific performance is refused if the plaintiff themselves is in breach of essential terms, or has acted fraudulently, or in a manner inconsistent with the contract, or is incapable of performing their own obligations. The plaintiff must come to the court with clean hands.
• **(c) Lack of Readiness and Willingness:** The plaintiff must show that they have performed their part of the contract (or are ready and willing to perform) all essential terms that are yet to be performed by them. This is a crucial requirement for getting specific performance.

Other relevant grounds for refusal (principles from pre-2018 Act, still relevant):

• Unfairness or Hardship (Section 20 of unamended Act - principle still relevant): Specific performance may be refused if granting it would cause extreme hardship to the defendant which was not foreseen, or if the contract is inequitable, oppressive, or gives the plaintiff an unfair advantage (unless the hardship is self-inflicted by the defendant).
• Contract obtained by unfair means: If the contract was obtained by fraud, misrepresentation, coercion, undue influence, or surprise which is not sufficient to render it voidable but makes it inequitable to grant specific performance.
• Laches or Delay: If the plaintiff has unduly delayed in seeking specific performance, causing prejudice to the defendant or third parties.
• Mistake: If specific performance would cause hardship due to a mistake of fact, even if the mistake does not render the contract void.
• Specific Performance would be ineffective: If the court cannot ensure the performance of the contract (e.g., requires continuous supervision, or the defendant is unable to perform).
• Revocable Contract: A contract which is in its nature revocable cannot be specifically enforced.

The court balances the interests of both parties and considers principles of equity and justice before deciding whether to grant or refuse specific performance.

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Meaning and Types of Injunctions

An Injunction is a judicial remedy in the form of a court order that commands a person to do or refrain from doing a particular act. It is an equitable remedy, granted at the discretion of the court, primarily to prevent future wrongful acts or to compel the performance of a legal duty where damages are not an adequate remedy.

In the context of contract law, injunctions are often sought to prevent a party from breaching a contract, particularly where the breach involves doing something that was contractually prohibited (negative covenant) or to prevent ongoing harm resulting from a breach.

The law relating to injunctions in India is primarily contained in the Specific Relief Act, 1963, and also regulated by the Code of Civil Procedure, 1908 (especially Order XXXIX for temporary injunctions).

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Meaning and Purpose

The purpose of an injunction is to maintain the status quo, prevent irreparable injury, or enforce a legal obligation. It is a coercive order backed by the power of the court; failure to comply with an injunction can result in penalties, including imprisonment for contempt of court.

Injunctions can be prohibitive (preventing an act) or mandatory (compelling an act). They can also be temporary (for a limited period) or perpetual (permanent).

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Types of Injunctions

The Specific Relief Act, 1963, and the CPC recognize various types of injunctions:

Temporary Injunctions (Sections 37(1) and Order XXXIX, CPC)

A temporary (or interlocutory) injunction is granted by the court during the pendency of a suit. Its purpose is to maintain the status quo until the suit is finally decided or until a further order of the court. It is called 'temporary' because its effect is limited in time. Order XXXIX of the CPC governs the procedure for granting temporary injunctions.

Conditions for granting a Temporary Injunction (Order XXXIX, Rules 1 & 2, CPC): The court may grant a temporary injunction if the applicant satisfies the court on three essential conditions:

1. Prima facie case: The applicant must show that they have a strong case that is likely to succeed at trial. This is not about proving the case conclusively, but showing a serious question to be tried.
2. Irreparable injury: The applicant must show that if the injunction is not granted, they will suffer irreparable injury that cannot be adequately compensated by damages. Irreparable injury means an injury that is substantial and cannot be fixed by money alone.
3. Balance of convenience: The court must assess the potential harm to the applicant if the injunction is refused versus the potential harm to the defendant if the injunction is granted. The balance of convenience must be in favour of granting the injunction.

Temporary injunctions can be prohibitory (restraining an act) or mandatory (directing a temporary action, though less common than prohibitory). They are often sought in contract disputes to prevent a party from disposing of property, breaching a non-compete clause during the contract term, or continuing an action that violates contractual rights while the main suit is ongoing.

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Perpetual Injunctions (Sections 37(2) and 38, Specific Relief Act, 1963)

A perpetual (or permanent) injunction is granted by the decree made at the hearing and upon the merits of the suit. It is called 'perpetual' because it finally disposes of the rights of the parties and prohibits the defendant from doing an act (or, less commonly, compels an act) permanently.

Section 38: Subject to other provisions of the Specific Relief Act, a perpetual injunction may be granted to the plaintiff to prevent the breach of an obligation existing in their favour, whether the obligation is contractual or otherwise.

When perpetual injunctions are granted (Section 38(3)):

When the defendant invades or threatens to invade the plaintiff's right to, or enjoyment of, property, the court may grant a perpetual injunction in the following cases:

• Where the invasion is such that compensation in money would not afford adequate relief. (Similar to specific performance grounds).
• Where the invasion is such that it is not capable of being ascertained.
• Where the injunction is necessary to prevent a multiplicity of judicial proceedings.
• Where the defendant is a trustee of the property for the plaintiff.

Perpetual injunctions are often granted in contract cases to restrain the breach of negative covenants (as discussed in Section 42) where damages for such a breach would be inadequate.

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Mandatory Injunctions (Section 39, Specific Relief Act, 1963)

While most injunctions are prohibitive, a mandatory injunction compels a party to do something. It is granted to prevent the breach of an obligation and to compel the performance of certain acts which the court considers necessary to prevent such breach.

Section 39:

"When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the court is capable of enforcing, the court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts."

Mandatory injunctions are less common than prohibitory ones and are granted only when necessary to undo a wrong that has already been done or to compel a necessary action to prevent a breach from continuing or causing further harm. They are granted at the final hearing (perpetual mandatory injunction) or sometimes temporarily (temporary mandatory injunction, but granted only in exceptional circumstances).

Example: A builds a wall that encroaches on B's land in breach of a contract. B can seek a mandatory injunction compelling A to demolish the wall.

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Injunctions to enforce Negative Covenants

A contract may contain both positive promises (to do something) and negative promises (to refrain from doing something). While specific performance is generally not granted for personal service contracts (Section 14(b)), an injunction can sometimes be used to enforce a negative covenant within such a contract, even if the court cannot compel the positive performance.

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Section 42 of Specific Relief Act, 1963

Section 42 deals specifically with this situation:

"Notwithstanding anything contained in clause (e) of section 14, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the court is unable to compel specific performance of the affirmative agreement, shall not preclude it from granting an injunction to perform the negative agreement: Provided that the plaintiff has not failed to perform the contract so far as it is binding on him."

Explanation:

• Affirmative + Negative Agreement: The contract must contain both a positive promise (e.g., to work for someone, to sell goods) and a negative promise (e.g., not to work for anyone else, not to sell goods to others). The negative agreement can be express or implied.
• Inability to enforce Affirmative: The court cannot compel the specific performance of the positive promise (e.g., because it's a contract of personal service, or requires continuous supervision - Section 14(b), (c)).
• Injunction for Negative Permitted: Despite being unable to enforce the positive promise, the court *can* grant an injunction to prevent the breach of the negative promise.
• Plaintiff's Performance: This is subject to the proviso that the plaintiff has not failed to perform their part of the contract. The plaintiff must be ready and willing to perform their obligations.

Example: A contracts to sing exclusively at B's theatre for one year (affirmative agreement: sing for B; negative agreement: not sing elsewhere). The contract also states B will pay A a certain amount. A refuses to sing for B and threatens to sing at C's theatre. The court cannot compel A to sing at B's theatre (personal service). However, B can seek an injunction to restrain A from singing at C's theatre (enforcing the negative covenant), provided B is ready and willing to pay A as per the contract.

This principle is based on the idea that a party should not be allowed to actively violate a negative restriction they agreed to, even if their positive obligation cannot be specifically enforced. However, the court will ensure that granting the injunction does not effectively compel the positive performance (e.g., by leaving the defendant with no other reasonable option for employment). The restriction must not be unduly harsh or in restraint of trade beyond what is reasonable during the contract period.

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