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WHO CAN OBTAIN SPECIFIC PERFORMANCE OF CONTRACTS: AN ANALYSIS CONCERNING SECTION 15 OF THE SPECIFIC RELIEF ACT, 1963

INTRODUCTION

Specific Relief Act, of 1963 is a very special act that deals with the specific performance of various types of contracts, or in other words precise performance of a duty obliged by law on a person, which he/she has failed to perform. As can be understood by the name of the act in itself, this act discusses and enunciates the different reliefs available under its provisions. It is aimed at acquiring the same thing that a person is lacking and has the right to request. For example, if A has trespassed and occupied B’s house for six months, then B is not only entitled to getting compensation for the six months in which B stayed in A’s house but also entitled to get his house back, which is precisely the specific relief for which A is expected to file his suit. But the provisions of the Specific Relief Act also act under Order 2 Rule 2 of the Civil Procedural Code, under which B is expected to mention the specific relief he is entitled and he wishes to get in his suit to obtain that. Order 2 Rule 2 of the Civil Procedural Code also states that if the plaintiff fails to mention any part of his relief or relinquishes his claim to any relief, then he is prohibited from filing a suit again for the part of the claim omitted in the suit or relinquished.[1]

WHAT IS A CONTRACT?

A contract is a legally binding agreement by parties competent to contract and made under certain essentials such as free consent, lawful object and lawful consideration, and others.[2]

WHY IS THE SPECIFIC PERFORMANCE OF A CONTRACT NECESSARY?

There are many instances when parties suffer heavy losses due to the non-performance of the contract by the other party. For example, A and B enter into a contract where A would sell his house to B. B, in turn, enters into a contract with C to sell the same house. Later, A refuses to sell the house. In that case, B may sue A for the specific performance of the contract.

There are many circumstances where the specific performance of a contract becomes highly necessary, like when the damages cannot be ascertained or where the damages or compensation to be given is not enough. Such things can be the value of the painting by a dead painter or the emotional attachment related to one’s dead grandfather’s antique watch. Specific performance becomes an issue of high discussion in such cases.

WHO MAY OBTAIN SPECIFIC PERFORMANCE UNDER SECTION 15 OF THE ACT?

In cases of non-performance of contracts, the victimized party always has the option of filing a suit against the party who has failed to fulfil the contractual obligation. But these also include the beneficiaries of such contracts. So let us see who all comes under the ambit of section 15.

The Parties Involved (General Rule Of Privity Of Contract): – The parties involved in the contract are the primary people who can file a suit for obtaining a specific relief under a contract. For example, if a contract of buying and selling sugar is made between two parties, C and D, then both C and D are eligible to file a suit for obtaining the specific performance of the contract, on its non-compliance by the other party.

The Principal, Or The Representative In The Interest Of Any Party: – The representative in interest to a contract may include the brother, sister, daughter, son, or any such assignee to any of the parties to a contract while the principal includes the agent or assistant of any of the parties. For example, if there is a contract between C and D, the representative in interest or the principal, such as the assignee or agent of C can file a suit for specific performance of the contract in C’s absence. But it must be noted that such a suit cannot be filed in cases where the personal skills and qualities learned, skill or solvency of the party involved is material to the contract, but again, where the party, here D, has already performed his part and such performance has been accepted by the other party’s representative in interest, or where it has already been mentioned in the contract that suit can only be filed by the parties, such a suit can be filed for the fulfilment of the contract by the other party. But if the contract is something like C would sing at D’s wedding, and C dies before the day of the wedding, then D’s father cannot sue for the specific performance of the contract. If we take another case, like C’s performance being substituted by a famous local singer by C’s agent after C’s death, and D has accepted the performance, then C’s agent can file a suit for the specific performance of the contract on the part of D.

Beneficiary If the Contract Involves a Marriage Settlement Or Compromise Of Disputed Rights Amongst Family Members: – If there is a contract between A’s father and B’s father that if A, a female would marry B, a male, then B’s father would give A Rs. 10000 as monthly allowance and allocate property in her name, and B’s father refuses to fulfil his part of the contract after the marriage, then A can sue B’s father for specific performance as a beneficiary to the contract. Again, if there are three brothers in a family A, C, and D, and C and D enter into a contract that they would use the money they get from their share of the property for the marriage of their younger brother, A, then A can sue C and D for specific performance of the contract as a beneficiary.

The Remainderman In Case a Tenant For Life Enters Into a Contract In The Proper Exercise Of His Power: – A is the tenant for life in the house of B, and C is the son of B. If A enters into the contract for the renovation of the house with D and dies before the contract is fulfilled, C can sue D for the specific performance of the contract on behalf of A as the remainderman.

Reversioner In Possession In Case Such a Person Is Entitled To The Benefit Which Comes As a Result Of The Contract: – A reversioner in possession is a person who will get the property reversed back to him, after the death of the owner or his heir. For example, A, the owner of the property, dies, leaving his property to his wife, without any legal heir. A’s wife enters into a contract with D to sell A’s property for a huge amount. Soon after, the wife also dies. Then, A’s brother would act as the reversioner in possession and can sue D for the specific performance of the contract.

Reversioner In Remainder In Case Such a Person Suffers Material Injury If There Is a Breach Of Such Contract: – If the property in the previous is to be passed on to the brother after the death of the wife but the wife does not die, then the brother acts as the reversioner in the remainder, and can sue if he is materially harmed by the violation of the terms of the contract.

New Limited Liability Partnership Arising Out Of The Amalgamation Of Two Limited Liability Partnerships: – This is a relatively simple one where when two limited liability partnerships (LLPs) amalgamate, the new LLP resulting out of the amalgamation has the authority to sue.[3]

The Company Arising Out Of The Merger Of Two Companies: – Similarly, in this case also, when two companies merge, the new company resulting out of the merger has the authority to sue. For example, Company Z resulting out of the merger of Company G and Company H can institute a sue

If a Business’s Promoters Entered Into a Contract For The Company’s Purposes Before Its Incorporation And Such Contract Is Supported By The Requirements Of The Incorporation, The Company Must Accept That Contract And Announce Such Acceptance To The Other Party To The Contract: – If B and C are promoters of Company Y, then Y can sue for specific performance of a contract entered by B for the benefit of the company.[4]

CONCLUSION

Thus, suits for specific performance of contracts can not only be filed by the parties to the contracts but by several others related to them as well like their representative in interest, agent, or reversioner. Further, contracts entered into by one company can be enforced by the bigger company in case of a merger. Even suits entered into by one partner before the incorporation of a company can be enforced by the other partners after the company comes into existence. These suits ensure that the linkage of various contracts is not broken by the non-performance of any one contract by a specific party since contracts are legal promises on which the world works and such broken linkages can cause great material damage to all the parties involved. The Specific Relief Act, through its Section 15, empowers people to enforce such contracts in which they are not directly involved but are of great material importance to them.

Author(s) Name: Anwesha Nayak (Institute of Law, Nirma University)

Reference(s):

 [1] The Code of Civil Procedure 1908, Order 2 Rule 2

[2] Indian Contract Act 1872, s 2(h) and s 10

[3] Specific Relief Act 1963, s 15(fa)

[4] Specific Relief Act 1963, s 15