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SPECIFIC RELIEF ACT, 1963: THE CORNERSTONE OF THE NATIONAL ECONOMY

Introduction

The Indian economy can be considered at a very crucial stage and every action and step we take has a deepening effect on the next many generations. Indian economy is like a cloth with several strings attached to it forming an integral and reliable business module for the nation to display globally. It shall be noted that businesses are operated on several terms and conditions to maintain fair play and trust in the system so the funds are appropriated in the best interest of the people. In the same fashion, contracts are formed between two parties so that mutual trust and likewise responsibility is shared among the parties to provide a safe business environment. But no economy module or contract can be said to not have risk and it is natural to cause some kinds of contingencies. Usually, when such contingencies have occurred, compensation is a primary thing parties would claim subject matter to their contractual rights. However, compensation is not always the relief that the party wants in cases of not fulfilment of the contract. When such a situation arises, the Specific Relief Act, 1963 comes to the rescue for businesses to protect their interest. The At enables both parties’ civil rights protection so there is no kind of civil wrong conducted against the individuals in the contract.

Importance of the Act section-wise   

Understanding the sections individually helps to analyse the impact they create on the business working module. It even helps in understanding the civil rights and remedies that the law has provided in the best interest of the people. Section 11 of the Specific Relief Act is an important part of structuring a larger goal and it is read as follows:- 

“Section 11-. Cases in which specific performance of contracts connected with trusts are enforceable.—

(2) A contract made by a trustee in excess of his powers or in breach of trust cannot be specifically enforced.”[1] When contracts are formed many dealings shall happen between individuals and trusts. Usually, in trust, it is a legal arrangement set up in a manner that a person or group of people collectively controls the assets and investments of another person or organisation. Many times the trustees that are liable to deal with external matters carry out the contract in the interest of the trust. As sub-section 2 of section 11 explains that when the trustee uses his power in excess then breach of trust cannot be specifically enforced. This is done to protect the best interest of the trust and misappropriation of resources is restricted to promote more allocative efficiency. In this act, even the opposite party is given the duty to conduct multiple checks and go through relevant rights and duties that the trustee holds. In case of such misappropriation and excess use of power the opposing party also has an equal responsibility to learn about the trust to maintain clarity in the contract.

Section 15[2] solves an extremely critical question against whom can the contracts can be specifically enforced. This is a common question that shall be raised by many individuals that finally who would be responsible to get specific performance. The section states that any party to the contract or any part of the suit can, further any representative in interest or principal (where the learning, skill, solvency or any personal quality of such party is a material ingredient). Further, the section states any person beneficial in settlement on marriage or in the same relation can enforce specific relief. Even a tenant over a property for life can claim the same relief. The elements mentioned here are still limited considering the wide ambit of the section but the elements are mentioned to explain the core strength that the section provides to the legal structure of the economy.

Different ways of specific performance

Section 12[3] deals with important ways and methods in which specific relief can be provided to the parties in the contract. It deals with Specific performance of part of contract. Section 12(2) describes an important problem that usually arises in a business transaction. In many instances, one of the parties might have entered into the contractual agreement but as the contractual obligations take place- it might be difficult to perform the promised part of the contractual liability. When a party is not able to perform the whole of its part and the part that the party left unperformed is only a small portion of the entire value of the contract then the first essential to section 12(2) is fulfilled.

The second essential will talk about the compensation in money when one party is not able to perform a small portion of their contractual obligations but agrees to compensation for the part unperformed then the second essential to the section gets fulfilled. The court would now allow specific performance to the part possible to be performed and might award compensation to the part unfinished.

In the case of Surjit Kaur v. Naurata Singh[4], there was a sale deed for Rs. 30,250/- per killa. The part performance of the payment had been initiated but due to a lack of trust and misunderstanding, the contractual obligation was not fulfilled. The party requested the Hon’ble Court to award them compensation and part performance as they have suffered due to the non-fulfilment of the contractual obligations. The court gave two important observations in this case. At first, the Court stated a party can decide to take on the part performance of the contract at any stage of litigation. This is done to give both parties a fair chance to get their best interest served. But if the party elects to not accept the part performance then at the later stage of the litigation when Court decides on an order, the party can no longer decide to go for alternatives.

The second point that the Hon’ble Court decided upon was compensation. The Court stated that compensation shall be awarded upon the terms of the contract and no lesser amount can be assigned without any proper reason for it. In the case of N.P. Thirugnanam v. Dr R.J. Mohan Rao[5] helps in understanding the basic essence of the Act. The court in this case observed that before claiming for specific performance the plaintiff party should also perform or at least have the willingness to perform their part of the contract. If the plaintiff does not perform their part of the contract and approaches the court with a prayer against the defendant then the order of specific relief will be issued under this favour.

What unique element does the Specific Relief Act, 1963 provides? 

The economic prosperity that the entire world is aiming to achieve does not have a simple bypass route. The country has to go through each positive as well as a negative phase to become a favourable economy for all. In the business cycle, it is common to have disruptions due to various reasons, but such instances create mistrust between the companies investing in India. Specific Relief Act helps businesses in several ways that other legislations are not helpful at. Section 21[6] allows the power to award compensation when the Court finds it appropriate compensation is awarded and ease of doing business is promoted. Businesses even request the Court to provide injunctions so that their work is not disturbed and their business is not affected. Section 36 to 44 in the Act mentions temporary, perpetual and mandatory injunctions that assist the business to trust the judicial system more and easily conduct their business in India.

Conclusion  

Acts and legislations like the Specific Relief Act, 1963 are the backbone of the trust and economic mechanism of India. A country is as strong as its legislature intends, without a positive intention of inviting and promoting businesses shall be difficult and even far-fetch. When we allow the businesses the way forward in terms of not only long Court hours but also a system that makes the business run at a fast pace a sense of confidence and trust is developed. When so much assistance is provided from one since legislation then ease of doing business and accessing the Courts become easy and no sense of fear is left in the business world.

Author(s) Name: Devya Shah (Institute of Law, Nirma University, Ahmedabad)

References:

[1] The Specific Relief Act, 1963, s 11(2)

[2] The Specific Relief Act, 1963, s 15.

[3] Ibid at s 12.

[4] Surjit Kaur v. Naurata Singh,(1994) Civil Appeal No. 4701/1994

[5] N.P. Thirugnanam v. Dr. R.J. Mohan Rao, 1996 AIR 116, SCC (5) 115

[6] The Specific Relief Act,1963, s 21.