Supreme Court: The bench of UU Lait and Indira Banerjee, JJ has explained that Section 12 of the Specific Relief Act, 1963 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.”
While hearing a case relating to sale of land in the year 1984, the Court held that Section 12 of the Specific Relief Act 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.”
The Court explained that the relief of specific performance of an agreement, was at all material times, equitable, discretionary relief, governed by the provisions of the Specific Relief Act 1963. Even though the power of the Court to direct specific performance of an agreement may have been discretionary, such power could not be arbitrary. The discretion had necessarily to be exercised in accordance with sound and reasonable judicial principles.
After the amendment of Section 10 of the Specific Relief Act, 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 …”. Hence,
“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.”
Referring to suits relating to sale of land, the Court explained that
“an agreement to sell immovable property, generally creates a right in personam in favour of the Vendee. The Vendee acquires a legitimate right to enforce specific performance of the agreement.”
The Court ordinarily enforces a contract in its entirety by passing a decree for its specific performance. However, Section 12 of the Specific Relief Act carves out exceptions, where the Court might direct specific performance of a contract in part.
Further, 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 Specific Relief Act, 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 Specific Relief Act 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.
[B. Santoshamma v. D. Sarala, CIVIL APPEAL NO.3574 OF 2009, decided on 18.09.2020]