Who May Obtain Specific Performance Section 15 Specific Relief Act

What is a Contract?

As per section 2(h) of the Indian Contract Act, 1872, a contract is a legally binding agreement. A contract can be both written and oral agreement. Certain elements are required to convert an agreement into a contract.

Section 10 of the Indian Contract Act, 1872 lays down certain essentials which are required to form a valid contract, such as free consent, competency, lawful consideration, and a lawful object.

Bare Act PDFs

What is Specific Performance of a Contract?

Halsbury said that specific performance is an equitable remedy given by the court in case of breach of contract in the form of a judgment that the dependent perform the contract following its terms and conditions.

The accused party has the option to file a suit for specific performance against the one who has not performed the contractual obligations.

Example: A has a piece of land that can be used for commercial purposes. A and B had a contract, and B paid the half amount for purchasing his land and decided that rest of the amount will be paid when A will transfer his land to B. But later on, A refused to sell his land. B sued A and is entitled to recovery of the losses incurred by him.

In Beemaneni Maha Lakshmi vs Gandumalla Appa Rao, Honourable Supreme Court held that in the case of a specific contract, the defendant is required to mention the losses in the written statement which he might have suffered if he would have performed the specific contract.

Who May Obtain Specific Performance?

According to section 15 of the Specific Relief Act, 1963, specific performance of a contract may be obtained by:

Bare Act PDFs
  1. any party;
  2. the principle or the representative in interest, of any party;
  3. any beneficiary is entitled to specific performance if the contract involves a marital settlement or a compromise of disputed rights between members of the same family.
  4. if a tenant for life has entered into a contract in the due exercise of a power, the remainderman;
  5. a reversioner in possession, if an agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant;
  6. if an agreement is a covenant and the reversioner suffers material injury in case of breach of contract, then reversioner in remainder will be entitled to the benefit.
    • 6A. when a limited liability partnership has entered into a contract and subsequently becomes amalgamated with another limited liability partnership, the new limited liability partnership arises out of the amalgamation.
  7. if a company merges with another company under the terms of a contract, the new company will form as a result of the merger (amalgamation).
  8. if the promoters of a company entered into a contract before for the company’s purposes before its incorporation and such contract is warranted by the terms of the incorporation, the company has to accepted that contract and communicated such acceptance to the other party of the contract.

1. Any party: Illustration: In a contract, there are two parties, A and B. Therefore, either of the parties can obtain specific performance of the contract.

2. The principle or the representative in interest, of any party.

Representative in Interest: It is a broader term that includes an agent, assignee, or legal representative.

Illustration: A has an interest in B’s property. Then A or his principal (if A is an agent) will be considered as a representative in interest.

Conditions in which a representative in interest or his principal cannot obtain specific performance of the contract are-

i. If the knowledge, ability, solvency, or any personal trait of such party is a material factor in the contract.
ii. If the contract provides that his interest shall not be assigned.

Illustration: A made a contract with B for painting (skill). Hence A cannot obtain the specific performance of this contract as it is made on an individual’s skills.

3. Any beneficiary is entitled to specific performance if the contract involves a marital settlement or a compromise of disputed rights between members of the same family.

Illustration 1: A made a contract with B to marry C for a specified amount, and if B denied paying then, A can obtain specific performance of the contract.

Illustration 2: A, B, C, D are brothers and have a joint property in the village. A, B, C made a contract to give whole property to D. D is the beneficiary entitled here and can claim specific performance of such contract.

4. If a tenant for life has entered into a contract in the due exercise of a power, the remainderman;

Tenant for life: A person who is beneficially entitled under a settlement to possession of settled land to use a property for the rest of his life. He is entitled to hold the legal estate but only for the duration of his life.

Illustration: A gave his house to B for his life but had a contract that after his death, the property will accelerate to C.

Remainderman: A person who inherits or is entitled to inherit property upon the termination of the estate of the former owner. A remainderman is a person who has an interest in the remaining property and will eventually own it at some time in the future.

Illustration: A gave his house to B for lifetime. B is a tenant for life but had a contract that after B’s death, the property will accelerate to C. C is remainderman.

5. A reversioner in possession, if an agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant;

Reversioner in possession: Any person to whom the property is reversed back, and he is in possession of that particular property. When a property owner effectively transfers property to another yet retains some future rights in the property, it is known as a reversioner in possession.

Covenant: It is a legal promise or an agreement between two people, or companies, or even countries.

Illustration: A (grandfather), B (father), and C (son). A does not want to give his property to B. Instead, he wanted to give his property to C. A entered into a contract with Z (tenant for life) to enjoy his property till his life and pay the rent to C, and after Z’s death, the property will be accelerated to C (reversioner in possession).

Here, the reversioner in possession also has the right to obtain the specific performance of the contract entered by another person.

6. If an agreement is a covenant and the reversioner suffers material injury in case of breach of contract, then reversioner in remainder will be entitled to the benefit.

The reversioner will be responsible for the injury caused by the non-performance of the contract by the remainder.

Illustration: A gave his house to B and asked to pay the rent to C. If B does not pay the rent, then C has to bear the injury caused.

6A. when a limited liability partnership has entered into a contract and subsequently becomes amalgamated with another limited liability partnership, the new limited liability partnership arises out of the amalgamation.

This clause has been inserted by the Specific Relief Amendment Act, 2018.

Illustration: A (LLP) merged into B (LLP) and formed C (LLP). Therefore a contract entered by A can be specifically performed by C as it emerged as a result of an amalgamation of A and B.

7. If a company merges with another company under the terms of a contract, the new company will form as a result of the merger (amalgamation).

8. If the promoters of a company entered into a contract before for the company’s purposes before its incorporation and such contract is warranted by the terms of the incorporation, the company has to accepted that contract and communicated such acceptance to the other party of the contract.

Case Laws

  1. Robin Ramjibhai Patel vs Anandibai Rama Rajaram Pawar & Ors, 2016: In this case, the Supreme Court said that when a plaintiff wants to implead certain persons as defendants in a suit for specific performance on the ground that they may be adversely affected by the outcome of the suit, then the interest of justice also requires allowing such a prayer so that those likely to be affected are aware of the proceedings and can take appropriate defence as suited to their vendors.
  2. Kerala High Court in 2017 ruled that a plaintiff is entitled to specific performance of a contract only if he follows the original provisions of the contract. In case of any variation in terms of the contract, let it be for the defendant’s benefit, the plaintiff will still not be entitled to seek specific performance.
  3. Bommaka Nagabhushna Reddy vs W Srinivasa Rao
  4. Swiss Bank Corpn vs Lloyds bank Ltd.
  5. Hari Krishna Agarwala vs K C Gupta
  6. HPA International vs Bhagwandas Fateh Chand Daswani

Read Next: What Is the Doctrine of Part Performance Under the Transfer of Property Act?

Anushka Saxena
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