Specific Relief Act

[Cites 149, Cited by 0]

Law Commission Report

Specific Relief Act

"CONFIDENTIAL--Not for Publication"

LAW COMMISSION
OF INDIA
WA.--y NINTH REPORT

(SPECIFIC RELIEF ACT, 1317)

G9VERNMENT& OF A LX051-AW

CHAIRMAN.
LAW COMMISSION
NEW DELHI,

JULY 19, 1958.
Shri A. K. Sen,

Minister of Law,
New Delhi.

My dear Minister,

I have great pleasure in forwarding herewith the Ninth
Report_ of the Law Commission on the Speciﬁc Relief Act.

2. At its ﬁrst meeting held on the 17th September, 1955
the Commission decided to take up the revision of the
Speciﬁc Relief Act and entrusted the task to a Committes
consisting of Shri D. Narasa Raju and Shri S. M. Sikri.

3. It was subsequently decided that Shri P. Satya-
narayana Rao, the senior Member of the Section of the
Commission dealing with Statute Revision should assist the
Committtee in drawing its report. The consideration of the

subject was "initiated by Shri Narasa'Raju who explained

the scheme for the revision of the Act. The principles un-
derlying the scheme were discussed at a meeting of the
Statute Revision Section held on the 14th April, 1956. A
draft Report prepared on the basis of the scheme by Sltri
Sikri in consultation with the Members of the Committee
was thereafter circulated to all the Members of the Com-
mission and their views were invited. thereon. These views
with. the draft Report were discussed at meetings of the
Statute Revision Section held on the 13th July, 1957 and
the 7th -December, 1957. Important suggestions made by
Members at these meetings were accepted and itiwas left
to the Chairman to ﬁnally settle the Repo}'t_in the light
of the discussion. . A ' M V

4. Dr. N. C. Sen Gupta has signedithe Report subject to
a separate note which has been annexed to the Report.

5. The Commission wishes to acknowledge the services
rendered by its Joint Secretary, Shri D. Basu, in connec-
tion with the preparation of this Report. _ C

Yours sincerely,
M. C. SETALVAD.

..F""'

CONTENTS

REPORT
PARAGRAPHS Pmaas
1-2. History of the legislation . . . . . I
3----4. Maior suggestions of revision considered . . . I---~~2
5-8. Scheme adopted for revision . . . . . 2-«3
9--Io6. Examination of the provisions of the Act, indicating
the changes required . . . . . . 3-- 56
APPENDICES

APPENDIX I--ProposaIs as inserted in the body of the existing
Act 5 . . . . .. . .p . . 57--78

APPENDIX 11- Comparative Tables

TABLE A : Showing the provisions in the existing Act and the

corresponding provisions in Appendix I . . . 79-80
TABLE B : Showing the provisions in Appendix I and the
corresponding provisions in the existing Act . . 81 -82
APPENDIX III-x--Su'ggestions in respect of other Acts , . . 83
Note by Dr. Sen Gupta 84-85

REPORT
ON THE
SPECIFIC RELIEF ACT, 1877.

1. The Speciﬁc Relief Act was passed in 1877, and has 1i1'iSt'0rS_'.ff
since been amended by Acts 4 of 1882, 12 of 1891, 9 of §,§,,_°g""'"'
1899, 21 of 1929, 10 of 1940 and 3 of 1951. It has also been
adapted, by the Adaptation Orders, A.0. 1937, A.O. 1948
and A.O. 1950. In 1951, it was extended to Part B States
and now it extends to the whole of India except the State
of Jammu and Kashmir and the Scheduled Districts under

the Scheduled Districts'Act, 1874.

2. The Act was originally drafted upon the lines of the
draft New York Civil Code, 1862, andits main provisions
embody the' doctrines evolved by the English Equity
Courts, which had previous to the Act' been applied in
India as principles of equity, justice and j"g'0.od conscience.
The Act, on the whole, has worked we1'l'b,1it'L"yth'e1-:5:isirbom'
for improvement both in the expression the
V I 1 ' . ;_ ...'~,§*., ,.".», * {
_ 3. In making our recommendations we haven eonsider- Maior
ed the various suggestions received by, us and have SW81!
efiect to such of them as appearedtto .113 to be suitable. considered.
We may. at the outset, ;deal with two suggestions of a
fundamental nature. 1 E .-

It has been suggested that there ) is no justification
for ,a separate enactment on .1 fspeciﬁpc, ,relie:;? and
that the pr0VisiQn$._0f,t}iis Act ,,,shou1,di_be, trarisf
tothe Code of Civil Procedure and _other;enactr3;e
suggestion, is founded ,on certain observations ,
anc1.Mu11a.= " V or 7

"Speciﬁc 'Relief, as" a' form of judicialeredifess, be-
" longs to the law of Procedure, and, 'iiféac body,
of written 1aW'"arranged' according' to the
natural aﬂinities 'of ' the A subject-matter, A I would
find its place as a distinct Part? other

division of the Civil Procedure Code .... ...... ..

If the work were to be done afresh without regard
to historical accidents, there would be no reason

of Speciﬁc Relief, 2nd Ed., p. 34.
3, Speciﬁc Relief Act,8th ppi.,735,1 -/37.',

Scheme
adopted for
revision.

for having a separate Speciﬁc Relief Act at all;
its contents would be divided between the
Civil Procedure Code and the Transfer of Pro-
perty Act. Such a drastic reform may: well, as
things are, not be worth the pains, but some
revision in detail appears desirable".

It is to be noticed that even Pollock and Mulla did not
consider such a drastic change worth the labour involved.
We have given careful consideration to the suggestion, and
are unable to accept it. The main consideration which has
brought us to this conclusion is that the Speciﬁc Relieﬁ Act
deals with certain equitable principles and remedies which
stand apart, both historically as well as intrinsically, from
the common law rules which are embodied in our Code of
Civil Procedure. The subjects dealt with by the Act. such
as, speciﬁc performance, declaratory decrees, injunctions,
rescission and rectiﬁcation, usually ﬁnd a separate treatment
ir. legal literature. Moreover, the legal profession and the
Courtshave become used to the present arrangement and a
change with the sole object of ii-ormal perfection would
not be justified.

. 4. A further suggestion.is that the Act should also deal
with compensatory relief. We are, however, of the-' view
that compensatory relief is inconsistent with and generally
an alternative to speciﬁc relief and istlierefore best dealt
with separately. In so far asiit is complementary to
speciﬁc relief, the Act deals with it. ' i . s y

5. The Act, as revised by us, deals' only with certain
kinds of equitable remedies. These are (1) Recovery iii'
possession of property, (2) Speciﬁclperivormancei of conti~actIs'{
(*3) Rectiﬁcation of instruments',""(4")' J Rescission éﬁicort.
tractsf (5) Cancellation of instrumentisl,'"'(6) Declaratory'
decrees and (7) Injunctions. The other forms of speciﬁc
releieftmentioned in Appendix A, Eormszéglvﬁ and 49:, of the

* Code of Civil Procedure and ir1.«stat1-zstestsuoh as the Transfer

of Property Act, Trusts Act. Partnership Act. are different
in origin and nature and noiadvaintage will be gained by
including them in this Act." 7 . ! ~ g ,

6..We have tried to improve both the language and the
substance of the Act. But it is _ 'difficult to A avoid the
inherent defects which must exist in the codiﬁcation of

3. Speciﬁq Relief Act, 81:}: Ed. pp. 735, 737.

practice of inserting illustrations in Acts. is A

equitable principles. As Sir Raymond Evershed, Master
of the Rolls, has said, "As an equity lawyer, let me acknow-
ledge that I have a natural inclination to favour the
undeﬁned and undeﬁnablei in the form of principles which
have never lost, by unnecessary and constricting deﬁnition,
their capacity for useful growth. And I would like, here,
to make the important point that these undeﬁned principles
of equity could never, as far as I can see (save to a very
limited extent) be effectively or usefully comprehended,
by codiﬁcation, in the enacted law. At least in so far as
they were so comprehended, the functions oil the courts in
regard to them might thereby be chan,ged--and surely not
changed for the public adVantage----from the more or less
creative faculty of seeing whether the new relationship-
or the new set of] facts was within or without the embrace
of the principle to the narrower task of interpreting the
Parliamer. tary language"?

7. Though we have suggested occasional changes «in the
language of the Act we recognize that this is a matter for
the drafting expert and We have left it Iargelymto, the
oiﬁcial draftsman.

8. In consonance with the recommendations our
previous reports, we propose that all the illustrations in the
Act should be omitted. It is true that Whitley Stokes, in
his Introduction to the Anglo--Indian Cod-es,'7 quoted
Macaulay's expectation that the' A 7 "illustrations twill,
greatly facilitate the iunderstanding offthe 1aw":=? Wendie of L
the view, however, that the illustrationsihave enotitin the
whole. served to clarify the provisions ofthe Act: 'Sbjme of
the illustrations are not warranted, by 'the terihseof the
relevant sections; others have "tended to prevent the
development of equitable jurisprudence: Moreover, .the
Indian' Legislature has for some rpast» given up the

!.V',,;,

A L 9. Wetnow proceed to examine provisioii§,sﬂof.,ithe Act Emmi".
pointing out the difﬁculties which have arisen' inthe 3:"! 05
application of the Act and indicating' '.yf3rop'ésaIs"cfor v;§;,,,'§§°.;g

their solution. =zs_tl1ce"Acé;
In G!
A i _ l i, v theehanges
,, _ _ V ' requltecl. J y
10. We are of the opinion that the Act should be'g¢Q, Q' ~

extended to the territories known as ltlie Scheduled Dis-

I. 72 L.Q.R., pp. 43--44.
2. Vol. 1, p. x_xivv _ _
*The reference in the margin is to the existing Sections,

Sec. 3.

Sec.4., _

tricts. If the Transfer of Property Act, 1882 can apply to
the Scheduled Districts, there is no reason why the Speciﬁc
Relief Act should not, particularly in View of the fact that
Courts have applied the provisions of the Act to these
areas, as principles of 'justice, equity and good consci-
ence".

No doubt, there are the Scheduled and Tribal Areas
for which special provisions have been made in the Fifth

and Sixth Schedules to the Constitution. Paragraph 5 of '

the Fifth Schedule and Paragraph 12(1) (b) of the Sixth
Schedule empower the Governor of the State in which a
Scheduled or Tribal Area is included, to exclude the
operation of general Acts of Parliament or of the Legisla-
ture of the State to such Areas, by issuing notiﬁcations.
Thus, the present practice would appear to be to extend all
general Acts of Parliament to the whole of India, leaving
it to the Governor to exclude the operation of» such of
them in any Tribal or Scheduled Area, as he may deem
ﬁt. It is therefore unnecessary' to make any special pro-
vision for such Area. A' A

We recommend that the Act should extend to the whole
of India except the State of Jammu & Kashmir.

11. The deﬁnition of 'trust' in section 3 of the Act is
not satisfactory: inasmuch as it refers to 'express', 'implied'
and 'constructive' ﬁduciary ownership, without explain-
ing those terms. Since a deﬁnition of 'trust' has subse-
ouently been enacted in the Trusts Act (II of 1882), it is
desirable that there should be parity between the provi-
sions of. the two enactments. We, therefore, recommend
that the existing deﬁnition be replaced by one which
would comprise a trust as deﬁned in section; 3 of the Trusts
Act as well as allobligations in the nature' of trusts
which are included in Chapter IX of that Act. Conse-

quential changes in the deﬁnition of 'trustee' have also '

been suggested.'

4 -sAl'f.ew other draftingschanges have been suggested by
us in the section. ' V

12. Clause (a) of section 4 may be omitted as un-

necessary. According to the deﬁnition clause, words
occurring in this Act, which are deﬁned in the Indian

r. Yanardan v. Bhairab, 3o_I.C. 36; (C313
2. Vida s. 2 (d), Appendixl.

-4

Contract Act, 1872, are to have the meanings respective-
ly assigned to them in that Act. Under section 2(h) of
the Contract Act, only "an agreement enforceable by law
is a contract". A mere agreement is not enforceable in
law. There is, therefore, no question. o-f any speciﬁc relieﬁ
being granted in respect of a mere agreement which is not
a contract. This position will be clear from the new
section 8 proposed by us.

13. We are of the opinion that sections 5 and 3 should S°°9'5'5*
be omitted. They embody propositions too elementary
to be codiﬁed and serve no useful purpose. Whitley
Stokes' considered them unnecessary and recommended
their repeal.

14. Pollock and Mullaz have criticised the form of Sec.7~
section 7 in the following words-

"S. 7 is a negative statement of the principle more
clearly expressed by saying that, speciﬁc relief
being a civil remedy, the plaintiff must show

» some individual right to it in every case. . . ."

We have suggested certain drafting alterations in the
section in order to meet this criticism. A

15. Except for the substitution of the word 'provided' Sec. 8.
for the word 'prescribed', no change is proposed in
section 8. L ' A T by A'

16. As suggested in our earlier Report on the Limita-
tion Act, section 9 should be omitted.' Thetobject of this
section, which corresponds to section 15 of the Limitation
Act.' 1859, was to discourage people7'*from taking the law
"into their own hands, however good their title.' It pro-
vides a summary and speedy remedy through the 'medium
of the 'Civil Court for the restoration of tpossession 'to a'
party dispossessed by another, leaving the parties 'to
fight out the question of their respective titles in a
regular suit.

But the section has not served its purpose. The
remedy has not been speedy because the evidence which
is generally led to establish possession is nearly the same
as would be necessary in a title suit. It has been felt
that the question of possession cannot be determined
without going into the question of title to, some extent.

1. 'Introduction to S.R. Act in the Anglo-Indian 'coaesfvol. I. p. 939.
2. S eciﬁc Relief Act, 8th Ed., p.745. p
3. likde para.)145 of the Third Report of the Commission (Limitation
ct 1908 .
4. Polloék & Mulla, Speciﬁc Relief Act, 8th 12¢, 13. 749,

Sec. 9.

Sec. IO.

Sec. II.

A decree under section 9 does not determine title, and it
is generally followed by; a suit for recovery of possession
based on title. The result has been a multiplicity of pro-
ceedings-. .

17. But for a verbal change, no alteration is proposed
in section 10.

18. It has been suggested that section 11 is unnecessary
and should be omitted. But this section confers a right
to a relief wlﬁch is not given by any other provision of
the Act.

First, speciﬁc delivery' under section 11 is to be
distinguished from speciﬁc performance of a contract
inasmuch as the right of recovery in section 11 is not
based on contract but on the right to possess.

Secondly, section 11 is to 'be distinguished from section
10. The distinction between the two kinds of action is
fully explained in Banerji's Tagore Law Lecturesl.
Under section 10, the suit is, in reality, a suit for recovery
of movable property: or damages in the alternative and
the decree and its execution are governed by the provi-
sions of 0.20, r.10 and 0.21, rr.30-31- Plaintiff himself is
obliged to state in his p1aint.the estimated value of the
movables [vide Form No. 32, Sch. I, App. A oﬁ the C.P.
Code], which would be paid to him if delivery cannot be

_ had [o.21I,,,r.31 (2), C.P. code], ,

I Under section 11, the plaintiff seeks recovery of the
articles in specie and has not to state in his plaint the
estimated money value of the article; on the other hand,
he states that no. pecuniary compensation can be assessed
or will be adequate relief to him (vide Form 39 of Sch. 1,
App. A of the CP. Code). Of course, ev.en,in such a case,
in default. of .-compliance with the decree, the Court has
the power, inter alta, to attach and sell the judgment-
debtor's property and pay compensation to the decree-
holder out of such sale proceeds, Butpin. this case, the
amount of compensation need. not be equivalent to any
estimated value of the article; it is compensation in the
proper sense oﬁ the term',---the,amoun,t being left to the
discretion of the Court [0_j21,ir.31(2i), Code]. In
short, "The amount of legal coercion, which can be brought
against a defendant to enforce a decree for speciﬁc deli-
very under section 11, is therefore clearly greater than

1. Law of «Specific Relief, 2nd Ed., pp, 74-75.

that which can be employed to enforce a decree under
section 10"1.

In fact, both sections 10 and 11 relate to what is called
an action of dettnue in England, but while section 10 re-
presents the common law rule, section 11 represents the
equitable gloss upon it. As Pollock and Mu1la9 put it
brieﬂy.»-

"In England a person entitled to the immediate
possession oﬁ a speciﬁc chattel was in principle
entitled to recover it by an action of detinue.
The writ in that action demanded specific
delivery. But owing to the defective proce-
dure for the execution of common-law jtudg-
ments, this could not in practice be enforced.
Then a court of equity, when applied to for
relief, had to be satisﬁed that the remedy in
damages to the value of the goods, which alone
was available for the plaintiff at common law,
would not be adequate, or that some specially
equitable right of the plaintiff under a trust,
for example, was involved." a *

The equitable gloss, however, applied only to cases
where damages could not afford adequate relief' or where
there was a ﬁduciary relationship between the e parties"
by reason of which the defendant would. be bound, in
conscience, to make speciﬁc delivery. These special cases

are speciﬁed in section 11.

In the circumstances we are of the View that Section
11 should not be omitted. '

19. We think, however, that it is necessary to clarify
the question of the burden of proof under the section. It
has been held by the Madras High Court' that in order
to obtain relief under the section, the' plaintiff must allege
and prove not only that' the defendant is in possession of
the property but that the plaintiffs case is covered by
any of the four clauses of the section.' This view has been
criticised by Pollock and Mulls" as unjust . and i this
criticism has met with judicial approval'. New, since

I. Nelson, Speciﬁc Relief Act, 1:. I15, quoted in Banerii's Lavféf Spedli:

Relief. 2nd Ed., p. 75, v . ~ .

. Speciﬁc Relief Act, 8th Ed., pp. 756-7.
. Vida Winﬁeld on Tort, 6th Ed. . 415.
Cf. Wood v. Rowclz'ﬁ'e,(I847) 2 Ca. 382 (383).
. I'é(rx1§aBtasubba Rao v. Asiatic Steam Navigation Co., (1916) 39 Mad.
I

. Speciﬁc Relief Act, 8th Ed., p. 757.
. Subbarayalu V. Azmamalai, I.L.R. 1946 Mad. 174-r79,

\lO\ VI-;LUJN

in an action of detinue Courts in England direct a resti-
tution in specie whenever there exists a ﬁduciary' relation-
ship between the parties, it should be for the plaintiff in
cases falling under Cl. (a) to establish such relationship.

In cases falling under clause (d) also, it should be in- ,

cumbent upon the plaintiff to establish that the possession
of the defendant originated in a wrongful transfer of
possession. But so far as cases falling under clauses (b)
and (c) are concerned, it should be for the defendant to
establish that the article in respect of which possession
is claimed by the plaintiff is an ordinary article of com-
merce having no special value or interest to the plaintiff
or that the damage is assessable in money. The principle
followed in an action. of dettnue, as explained by Swinfer
Eady MB.' is that----

"The power vested in the Court to order the delivery.
up of a particular chattel is discretionary, and
ought not to be exercised when the chattel is
an ordinary article of commerce and of no
special value or interest, and not alleged to be
of any special value to the plaintiff, and where
damages would fully compensate".

We recommend that the foregoing principle should be
incorporated into the section, as an Explanation.

20. In England" and in Arnerica.3, one ﬁnds that the
'textbooks on Speciﬁc Performance deal with the defences
open under the law of contract as well as the defences
available in equity Courts in proceedings to enforce a
contract by way of speciﬁc performance. In India, the
defences that are available under the law of contract, such
as incapacity of parties, the absence of a -concluded contract,
the euncertaintye of the contract, coercion, fraud, misrepre-
sentation, mistake, illegality, or Want of authority to
enter into the contract, have all been dealt with in the
Contract Act. Further, it is provided by section 4(a) of
the SpeciﬁceRelieﬁ Act that an agreement which is not a
valid contract under the Contract Act is not speciﬁcally
enforceable. - ' _ .
Hence, a repetition, in the Speciﬁc Relief Act, of the
defences available "under the law of contract' may be
avoided by inserting in the Act a specific provision to the

I. Whiteley Ltd. v. Hill, (1918) 2 K.B. 808 at 819.

2. Fry, Speciﬁc Performance, 6th Ed., pp. 125 et seq.; Halsbury, 2nd Ed,
Vol. 31, p. 345. ' -
49 American Jurisprudence, pp. 24 et seq.

9
effect that all defences open under the law relating to
contracts shall be Open to a defendant in a suit for speciﬁc
performance. We, therefore, propose to insert a new

section' to the above effect and to omit clause (a) of section
4 which -becomes redundant.

21. Clause (a) of' section 12 relates to an obligation
arising out of a trust. S'ome jurists consider such an obli-
gation as appertaining to the law of contracts. but, in View
of the deﬁnition of a trust in the Indian Trusts Act, such
an obligation arises out of an executed contract. The
relief' by way of speciﬁc performance is, on the other hand,
available only in respect of executory contracts,2 to which
the other clauses of section 12 relate.' It seems to us,
therefore, appropriate to delete clause (a) from section 12
and to place all the provisions relating to trusts together
in one section. The only references to trusts, so far as
speciﬁc performance is concerned, are in sections 12 (a) and
21(e). We propose to include both of them in a new
section?

Sec. 12:
Cl. (a).

22. Clause ((1) of section 12, as pointed out by Banerji,4 C1-(d)-

seems to sanction the doubtful doctrine that insolvency of
the defer. dant is a ground for decreeing speciﬁc performance.

The ability of the defendant to pay damages never entered'

into the consideration of Courts oﬂ Equity. "Such arule,"
as 'observed by Pomeroy, "makes one under such a contract
a preferred creditor". Further, the inadequacy of the legal
relief, which is the 'basis of equitable remedies, is ordinarily
in the nature of that relief in cases of a certain type, not in
the difficulty of recovery of damages in h the 2 individual

instance. "It is the contract itself" said? Andrews, C. .1,"

"which gives to or takes away from the court its jurisdic-
tion; not the wealth or poverty pf the party defend'ant".5l
In short, this clause is totally inconsistent with the basic
principle followed by the Courts of ,Equity in Englandini
granting speciﬁc performance, namely, the non-existence
or inadequacy of the remedy at law, but not merely the
impracticability of enforcing such a remedy. t l '

We, therefore, recommend that this clauselbe omitted. '

23. As regards the Explanation to section 12, we think

that the presumption relating to movable propertyiis S0n'1e'VExpl, '1':

. Vide s. 8, App. I.

. Banerji, Law of Speciﬁc Relief, 2nd Ed., 10. 84.
. Vide s. 12, App.I.

. Law of Speciﬁc Relief, 2nd Ed., p. 129.

. Ibid, p. 130.

u..p'.»JN>-c

Sec. 13.

what misleading in its present form and it would be
conducive to a better understanding of the law if the

'exceptional cases where the presumption of adequacy' of

damages is not applied by the Courts, are also speciﬁed.
We, therefore, propose to split up the Explanation into
two independent sections,-----one relating to immovable and
the other relating to movable property. While no change
is necessary as to the presumption relating to immovable
property,--we propose to specify the exceptional cases where
Courts in England and India grant speciﬁc performance of
contracts to transfer movable property, on the presumption
that damages would not in such cases give an adequate
relief. These are---- '

(a) Where the property is not an ordinary article of
commerce or is otherwise of special value or
interest to the plaintiff'. '

(b) Where the property is held by the defendant as
agent or trustee of the plaintiff". M

The last exception has been specially developed in the
United States' Courts have enforced speciﬁc performance
of contracts to furnish gas, water or other necessary
materials to a manufacturing establishment,' where» the
thing contracted for is not immediately available from
other sources and a breach of the contract would stop the
operations of the p1aintiif's establishment. The » same
principle is applied where the goods are such that they
can be supplied by no one except the defendant. A contract
to furnish stone from a certain quarry for building vtgas
enforced where the stone was of a peculiar colour and the
building was partially con'structed from the stone already
furnished. Even a contract for the delivery of a motion-V
picture ﬁlm to an exhibitor has been enforced. A

In view of the vast economic «developments which are
taking place in India, we would' recommend the adoption
of this exception from the American Law.

24. It is not clear from the language of section 13
whether the section has an independentexistence or has
to be read along with the succeeding sections relating to

1. Cf. Pusey v. Pusey: (I684)1 Vern. 273; Falcke v. Gray,(i859)4 Drew C65.

2. Wood v.Rozqcliy7'e,(1844)3 I-Iare 304.
3. 49 Am. Jur1s., ss. I26, 128, p p. I49: I52.

partial performance. Collettll as well as Banerjtiz have
taken the latter view. We think it should, be made clear
that the principle embodied in section 13 is a general prin-
ciple which" has to be borne in mind while applying
sections 14 to 16. We propose to amalgamate sections 14-17
into one section and to append section 13 in a modiﬁed
form as an Explanation thereto, omitting the reference
therein to section 56 of the Contract Act.

25. While section 17 enunciates the general rule that S°°3-14"'17-
the Court will not enforce speciﬁc performance of a part
of a contract, sections 14, 15 and 16 provide exceptions to
this general rule, and the Privy Council has held5 that
sections 14-17 taken together constitute a complete Code
and that any claim for speciﬁc relief of a part of a contract
must be brought within the terms of these sections. In
these circumstances, it is desirable to amalgamate sections
14 to 17 into one section and to provide that the court shall
not direct the speciﬁc performance of a part of a contract

except as provided therein.
\

26. No change in principle is required in sections 14, Secs. 14,16
and 17_ , _ and I7.
..\

27. Section 15 co-ntemplates two types of cases, namely, Sgc, 15,

(i) Where the part, which must be left unperformed, forms
a considerable portion of the whole but admits of compen-
sation in money, and (ii) where it does not admit of
compensation. In our opinion, the principle embodied in
the section, as it stands, is inequitable so far as the former
case is concerned; for, where monetary' assessment of the
part unperformed is possible, there is no reason why the
plaintiff should not get a proportionate abatement of the
consideration when he is to relinquish all claim to
further performance or any further compensation for the
breach. In the latter case, on the other hand, no question
of abatement arises because apportionment of the consi-
deration is not possible. i

We have, in Appendix I, suggested a redraft of the
section, in conformity with the above view.

28. There is some uncertainty as to whether section sec, 13,
18 covers the case of an absence of title as distinguished
from that of an imperfect title. The section mentions only

1.Co11ett, Law of Speciﬁc Relief, p. I17.
2. Banerii, Speciﬁc Relief, 2nd Ed. p. 282.
3. Graham v.KrzshnachandraDey, (1925) 52 Cal. 335 PC. at p.338.

'imperfect title'. But according to a Nagpur decision,' the
wording of clause (a) of section 18, whereby the vendee
can compel the vendor to make good the contract out of
'any' interest in the property subsequently acquired by the
vendor, "indicates that an imperfect title would include
even complete absence of title".

The English law, as stated in Holroyd v. Marshall-'4, is
that---- .

" . . . . ..if a contract be in other respects good and ﬁt
to be performed, and the consideration has been
received, incapacity to perform it at the time of
its execution will be no answer when the means
of doing so are afterwards obtained."

A defendant cannot be permitted to say that he did not
mean to acquire that interests" Accordingly, it would be
advisable to make the position clear by including in sec-
tion 18 the case of a total absence of title. *

29. The applicability of sections 14 to 16 in a case
falling under section 18(a) came up for the consideration

of the Supreme Court in Kalyanpwr Lime Works Ltd. ,v,,«

State of Bihar and am: 4 / ~

_ In that case, the facts,5 in short, were that A agreed
to grant a lease to B for a period of 20 years commencing
from a speciﬁed date. At that time A had no title to
grant the lease, but, subsequently, A acquired title at a
time when only 6 years were left out of the -20 year-
period of the lease agreed to be given to B. B brought
a suit for speciﬁc performance claiming a lease 'for a
period of 20 years from the date when A acquired titﬂe
to grant the lease. It was contended' on behalf of B
(plaintiff) that he was entitled to speciﬁc periormahce of
the original contract and that the Court was competent
to reconstruct the contract in the context of the changed
circumstances in order to give, him the relief to Whigh
he was entitled under the original contract. The Patna
High Court5 held that section 18(a) gave nogpower to the
Court to reconstruct the contract, but that the Court
could enforce the contract only to the extent that it WES

. Pundlile v.3ain.am:v¢.m, A-LR I949 Nas- 83-
. 10 H. L. C. 191 (211)-
. Fry, Speciﬁc Performance, 6th Eda: p- 454-
. (1954) S._C.R- 953-
. See Dalmzajain 69' Co. Ltd 0. K. L. Works, A' I. R. 1952 Pat. 393.-

.Ibid., pp. 400-401.

QKII-FD) N H

r1 .r u - 137

possible in the changed circumstances, if the plaintiff so
desired, and that the plaintiff might get a decree for the
remaining six years of his term under the original con-
tract, provided he complied with the provisions of section
15. These two propositions of law were accepted by the

Supreme Court".

It is, therefore, advisable to make it clear that sections
14 to 16 apply also to cases covered by section 18.

30. In Dailmia Jain & Co. v. K. L. Works2,------there was
a controversy whether section 18(a) of the Speciﬁc
Relief Act applied to executory contracts at all. Das J.
accepted the contention of the appellants that both section
18(a) oﬂ the Speciﬁc Relief Act and section 43 of the
Transfer of' Property Act related to the same subject-
matter, viz., executed contracts and observed:

"I am of the View that the words used in clause (a)
such as 'sale or lease' are only apt and appro-
priate to executed contracts."

It is, however, to be noted that the opening words of
section 18 refer to 'contracts to sell or let' and the word
'contract' is also mentioned in the latter portion oﬁ clause
(a) itself. It is obvious that section 18(a) refers to contracts
to sell or lease, i.e., executory contracts, while section 43
of the Transfer of Property Act applies tolexecutedv con-
tracts. Otherwise, it is difﬁcult to distinguish-'be"tween the
two provisions. The distinction is thus, brought out by
lvliilla-"-- A

"Section 43 follows the equitable rule inrthat until
the option is exercised, it treats the transferee
as the beneﬁciary of a trust ....... ..But it 'departs

from the equitable rule in that it: does not'

require the transfer to be effected by' a'*ftu1'th'ér
conveyance ............. .. If the transferee were en-

forcing the contract under section 18e(a)"of3 the
Specific Relief Act, the trahsferor would be
required to execute a further conveyance. But'

under section 43 the exercise oﬂ the option or

I. (1954) S.C.R. 95x8.

2, A.I.R. 1952 Pat. 392 (409); (see also
observes that "the words 'sale or
the word 'contract' ").

3. Transfer of Property 'Act., 4th Ed., p.196.

, Reuben J. at pp._ 404-5, who
lease appear to be used in contrast to

Cl. (3).

C]. (b).

C]. (c).

the mere requisition of the transferee is suffi-
cient to bring the subsequent interest within
the scope of the original transfer."

The words 'sale or lease', as observed by Das J.,1 do
appear to be apt or appropriate to executed contracts only.
We recommend that these words be substituted by the
word 'contract', which will refer to the 'contract to sell
or let' mentioned in the opening sentence of section 18.

31. Clause (b) of section 18 refers to cases like contracts
for the assignment oﬂ leasehold interest where the lessor's
consent is necessary for the same. As was observed in
Batn v. Fothergill,9--

"whenever it is a matter of conveyancing and not a
matter of title it is the duty of the vendor to do
every thing that he is able to do by force oﬁ his
own interest and also by force of the interest
of others whom he can compel to concur in the
conveyance."

"But Equity will not compel a vendor to procure the
concurrence of parties whose concurrence he has no right
to require".

The requirement of concurrence seems to 'be the
essence of the clause but there are cases where concurrence
alone may not be enough and if a conveyance by another
person, who is bound to convey at the vendor's request, is
required, there is no reason why the vendor should not
be compelled to get the conveyance from that person by a
resort to legal proceedings, if it cannot be had amicably.
Suitable changes have been suggested _in clause (b)_ to
make this clear.

32. Clause (c) imposes an obligation upon the vendor to
obtain a conveyance from the mortgagee, in case of sales
of mortgaged properties. A conveyance from the mortgagee
is however not necessary except in the case of an English
mortgage or a mortgage by conditional sale. The words
'where necessary' should, therefore, be inserted in clause

(a).

' 33. Where a claim for speciﬁc performance is refused,
the plaintiff may, in certain cases, 'be entitled to get a

1. Dalmia v. K.L.Works, A.I.R. 1952 Pat. 393 (409).
2. (1874) 7 H.L. 158,209.
3. Dart, Vendor & Purchaser, 8th Ed., Vol. II, p. 9214.

, , 15

refund of earnest money or purchase money' or other
sum deposited by him as a pre--payment.

Section 18(d) of the Act deals only with the right of the
defendant to a refund in a case of refusal of speciﬁc
performance on the ground of imperfect title of the vendor
or lessor. But there are cases where the plaintiff who is
a purchaser or lessee and whose claim for speciﬁc perform-
ance is refused is entitled to a refund2.

In England, it was held in earlier cases3' that where the
remedy of speciﬁc performance was refused on merely
equitable grounds, the purchaser could recover damages
for breach of contract but could not recover his deposit.
But section 49(2) of the Law of Property Act, 1925, now
provides that the Court may "order the repayment of any
deposit" either in an independent action for its return or in
a suit for speciﬁc performance "where the Court refuses to
grant speciﬁc performance". Hence, either party may, in a
suit for speciﬁc performance, claim repaymentof any deposit
when the claim for speciﬁc performance is refused.

In India, in some cases, a claim for refund of the
earnestmoney has been made in the alternative in a suit
for speciﬁc performance' and it has been held that even in
the absence of a speciﬁc prayer5 for return of earnest
money, the Court may, in a suit for speciﬁc performance,
direct a refund while refusing speciﬁc performance, if the
facts disclose a case for such a refund.

On the other hand, there has been some uncertainty as
to the right of the plaintiff to ask for and amendment claim-
ing such a relief at a late stage of the proceeding. While
in some cases it has been held. that such an amendment
should be allowed at any stage of the litigation5 there is
a contrary view' that the appellate court should not give
this relief where the plaintiff has not initially claimed it
as an alternative relief in his suit for speciﬁc performance.

~l--.--Munni v.Kamtd, A.I.R..*f;;;Al1. 321; Goan-d*V'Ii_Miraji, (I944)

718. _ _
2. Amma v. Udit,(r898) 31All. 68 P.C.; Abdul Rahman v. Rahzm Baksht,

A.I.R. I929 Lah. 332.; Raghu Nath v. Chandra, 11 C.W.N.1oo.; Fibvosa v.
Fairbairn;(1942)2 All.E.R. 122 (H.L.); Munshi v. Vzshnu, A.I.R.1954 A11. 450.

3. Cf. Re. National Provincial Bank, (1895) I Ch.19o.

4. Amma v. Udit,(r898) 3: All. 68 P.C.;Karsz_mdas v. Chhatalal, A.I.R.

1924 Bom.119; Natesa Aiyar V. Appavu Paawyarhz, 38 Mad. 178.
5. A.]. Mujith v. Krishmzswamz A.I.R. I955 Mad. £91693) ;
Ragunath V. Chandra, 17 C.\W.N. loo.
6. Irbrahimbhai v. Fletcher Ors.,_Raad, (I896) 21 _Bom. 827.
7. Somasundaram Chettizzr v. Chtdambaram Chemar, A.I.R. 1951 Mad.

282.

L 1950 415.

We are of the view that, as in the matter of compensa-
tion, the law should not allow a decree to be made with-
out a proper pleading, but that the Court should try to
prevent multiplicity of proceedings by allowing amend-
ment seeking to introduce a claim for a refund or a similar
relief, even at a late stage. We recommend that a speciﬁc
provision, on the above lines, should be inserted in the
Act, enabling a person to obtain a refund or similar relief
in a suit for speciﬁc performance.

34. We h-ave next to consider whether it should be made
obligatory on the plaintiff to make the claim for a refund
in the suit for speciﬁc performance itself.

Pollock and l\/Iulla' have- suggested that it is ....... ..
desireable that the right to return of the
deposit should be determined in the suit for
speciﬁc performance. . . . .. . ."

It has however been generally held that a separate suit
lies for a refund of the earnest money, even though the
suit for speciﬁc performance has been dismissed'.

Having regard to the fact that the number of such
suits cannot be considerable. We do not think it right
to recommend a provision barring such suits.

35; It will be useful, we think to introduce a rule which
has beenn-ow settled by judicial decisions, that in order to
avoid multiplicity of proceedings the plaintiff may claim
a decree for possession in a suit for speciﬁc performance
even though, strictly speaking, the right to possession ae-

t crues only when speciﬁc perﬂormance is decreed!

No doubt. it has been laididowns that possession can bet
askedfor in execution of a decree for specific performance
even though possession was not claimed in the plaint, on
the ground that the relief of possession. isimerely incident-
al to that of execution oﬁ= a deed of i conveyance". At the
same time it has been» held that the plaintiff decree-holder
does not acquire title or the right to recover possession

"1. Speciﬁc Relief. Act, 8th 1~:a.., p. 782-
2. Mmmi Bibi v.Ka'mta Singh, (1923) 45 A11- 373- (T1113 1' 315° 9"' law
in England under the Law of Property Act, 1925). ' _ ,
or course, in the case of default by the vendor, the purchaser mars Instead
of suing for speciﬁc performance, sue only for refund of the depo W1 -
or without damages (Naturam v. Uluk Chanda A-I-R-' 1935 C31~ 1°41)
' " .S A.. . v . 8 'V1 da .Kumara'swami
523I§T8fm'¥7)(l.'o<: (Bjllﬁfgizpakargaghgztggaiglﬁlglyulul'V. elz€3:rlzgac'I':aryulu, A-I-R-,

1926 Mad, 1117. _
4.Kam'k v. niba1m,A.I.R. 1952 cal. 362;Ar1un Sm: v. Sahu, A.I-R

' 17

unless a sale-deed is executed in execution of the decree
for speciﬁc performance'. We think it would be simpler
to make a statutory provision enabling the plaintiff to ask
for possession in the suit for speciﬁc performance and em-
powering the Court to provide in the decree itself that
upon payment by the plaintiff of the consideration money
_within the given time, the defendant should execute the
deed and put the plaintiff in possession'.

On the same principle, where the vendor or lessor is a
joint tenant. and the suit for speciﬁc performance is
brought by his purchaser against the co-tenant in posses-
sion of the entire property, it has been contended that the
plaintiff should be permitted to ask for a partition as well
as possession in the same suit-". In Bhagwan V. Krishmiji',
Heaton J ., 'however, thought that on principle it was not
proper that a transferee should have speciﬁc performance
in such cases as it would lead to further litigation because
"he will be unable to obtain separate possession of it with-
out bringing a suit for partition."

In the circumstances, we consider it advisable to pro-
vide that the plaintiff, in a suit for speciﬁc performance,
may also claim the ancillary reliefs of partition on pos-
session either initially or by an amendment at a later

stage without prejudice to his right to compensation under
section 19.

36. There has' been some difference of opinion among Sec- I9

the High Courts as to the meaning of the word 'compensa-
tion' in section 19. The Calcutta High Court", while inter-
preting Article 116 of the Limitation Act, has observed:

"As Lord Esher observed in Dixon v. Calcraft', the ex-
pression compensation is not- ordinarily used'as,an equiv-
alent to damages, although as remarked by Fry, LJ. in
Skinnefs Co. V. Knight', compensation may often have to
be measured by the same rule as damages in an action for
the breach. The term compensation as pointed out in the
Oxford Dictionary, signifies that which is given in recom-
pense, an equivalent rendered. Damages, on the other hand,

I. Enayat Ullah v. Khalil Ullah A.I.R. I938 All.,{43_2.
2. Cf. Abdul v. Abdul, 45_Mad' 1,3.
3. Rangayya v. Subrahmama, 40 ad. 365 (373-4).
4. (I920) 44 Born. 967,972. _ '_ ,
,5. Md. Mozzzharai Ahad v. Md. Azzmaddin Bhuzya, A.I.R. I923 Cal. 507,
II, I2.
5 6? (1892) 1 QB. 458.
7 (:89!) 2 QB. 542

' ..' c;a«'i

constitute the sum of money claimed or adjudged to be
paid in compensation for loss or injury sustained; the
value estimated in money, of something lost or withheld.
The term compensation etymologically suggests the image
of balancing one thing against another ...." '

On the other hand, the Nagpur High Court' has held
that the word compensation used in section 19 of the Speci-
ﬁc Relief Act should be understood in the sense of damages
as contemplated in section 73 of the Contract Act. The
same conclusion might be said to follow also from the ob-
servation of the Privy Council in Ardeshir's case" that sec~
tion 19 of the Speciﬁc Relief Act, with the exception of the
Explanation, embodies the same principle as Lord Cairns'
Act, which enabled a suitor to claim both speciﬁc perform-
ance and damages for breach of contract in the same pro-
ceedings. But the Privy Council did not disapprove of the
view expressed in the Bombay High Court3 by Macleod
C.J. that the word compensation was used with the intent
to emphasise the fact that the Court in awarding com-
pensation was not bound to follow the ordinary rules with
regard to damages for breach of contract and that the
measure of damages was not necessarily the same as in a
suit for damages for breach of contract. Later,
however, the Privy Council in a case" under S. 19 upheld a
decree on the footing of 'damages' for breach of contract.
In a Bombay case5 Chagla J. (as he then was) has held
that in deciding whether the plaintiff is entitled to
compensation, the principle, which the Court must adopt,
is the same as underlies section 73 of the Contract Act,
that is to say, the plantiff is bound to prove some loss or
damage. But there may be cases where the injury can-
not be assessed in terms of money. In such cases, the
Court would award nominal damages.

In these circumstances, we think it is desirable to pro-
vide that compensation under the present section should
be assessed on the same principles as are followed under
section 73 of the Contract Act.

37. There has been a difference of judicial opinion'as
to whether the Court has power to award compensation

I. Pratapchand v. Raghunath, A.I.R. I937 Nag. 243$ DwWkaf'm3ad V-
Kathelen, A.I.R. 1955 Nag. =28.

2. (19283 52 Born. 597 P.C.

3. Sassoon v. Ardeshir A.I.R. 1926 Born. I89.

4. Ramji v. Kishore, (I927) 117 I.C. r (PC,).

5. Ramchandra v. Chinubhai, A.I.R. 1944 Born. 76.

in a suit for speciﬁc performance, where the plaintiff has
not speciﬁcally prayed for it in the plaint.

The Lahore' High Court has held that the Court has
the power to award damages whether in substitution for
or in addition to speciﬁc performance even though the
plaintiff has not speciﬁcally claimed it in tlie plaint.

The Madras" High Court has, however, held that the
Court cannot award damages in addition to speciﬁc per-
fdrmance in the absence of a speciﬁc claim for damages
and a proper pleading stating why the relief of speciﬁc
performance would be insufﬁcient to satisfy the justice
of the case and the amount which should be awarded.

'The Madras view would appear' to be based on the
principle that there should be a proper pleading in every
case. While it is proper that the Court should have full
discretion to award damages in any case it thinks ﬁt. one
cannot, on the other hand, overlook the question of un-
fairness and hardship to the defendant, if a decree is
passed against him, without a proper pleading.

What we recommend is that in nd case should com-
pensation be decreed unless it is claimed by a proper
pleading. It should be open to the plaintiff to have an

amendment, at any stage of the proceeding: order to

introduce a prayer for compensation; whether in lieu of
or in addition to speciﬁc performance,» * V i
38. Section 20 does not state thesieiiitiiié law' relating to
liquidation of damages as a bar to s eciﬁc performance.
It appears that the principles of Eng ish law 615 "l:l"§is5_ sub-
ject have been applied by the courts in our' Ebtiiiltry'. It
would therefore be expedient to codify those, principles.
In interpreting sectpion 27) the
aiiidibial Committee' always scugm téi,a§¢e'I't .,ptli:e'i'inten-
V C ' i the. cénr

it'i6ri'* of: the 'parties, on ﬁfe' trufe' pcofristrufctfoziiff
Zttiict,' , ' -- C " '

\_ ,There may however be =ca,ses,«in,.vrhich -the eir¢ums-
tances, indicate that the parties intended; as ,that in: the
event of a breach of the contract' only tlgggggﬁent; .0!
money by way :of damages should be dared' and not
speciﬁc performance". ~ 7 " ;r "

x *1: ' #3.

:. A.~P.Pratz'nidhz'Sabha v.Lahor:', (1924) ,5 Laaxsog.

2. Somasundaram v. Chidambaram, A.I.R. 195!Mad_, 282.

3. Cf. Sadiq Hussain v. Anup Sir:e'h,(x923) 4 Lab. 327; Iéandésami shan-
mugha,[}.I.R. I949 Mad. 302. . i
4. Btssessar V: Vas, (1927) 55 Cal. 238 P.Q,
5. Kandasam: v. Shanmugha, A.I.R. I949 Mad. 302, (303).

'Sec. 2

Sec. 21.

Cl. (a).

A reading of the decisions referred to will show that
our courts have followed the English law thus stated in
Halsbury'---

"Where the contract contains a stipulation that in
the event of non-performance a certain sum
of money shall be paid, that fact is not in itself
decisive in considering whether or not speciﬁc
performance should be granted. Nor does the
distinction between penalty and liquidated
damages affect the answer to this question.
The answer is to be found by considering the
intention of the parties, that is, whether the
party bound to performance has an alternative
choice given to him by the contract, to per-
form or to pay the agreed sum, or whether he
is bound to do a certain thing, with a penal
sum or sum by way of liquidated damages
attached as security. In the latter case the
Court, notwithstanding the penal clause, en-
forces performance, if the contract be such
that without the penal clause it would have
been proper for speciﬁc performance".

We recommend that these principles should be incor-
porated into the section, with a proviso that the plaintiff
cannot have both speciﬁc performance and the sum spe-
ciﬁed in the contract.

39. Some of the clauses of section 21 require in our View
ampliﬁcation. -

Thus, while as a general rule, contracts to lend or
mortgage are not speciﬁcally enforced,' as they come
under clause' (a), there are certain gexceptional y cases
where speciﬁc performance has been granted bygwthe
Courts upon the vassurnption that damages wouldpnot
afford adequaté"reIief in stitch cases, and these exceptions
silbuld sb'e?m'entioned in the 'section itse'"11-','*'~ to gmagkéf it
comprehensive'; M '

'l'.~
n7§?«-

These exceptional cases are as follows?-'-

1. Where a loan has been advanced" either in whole
or in part by the lender on a contract to execute a

I 2nd Ed, Vol. 31, Para¢§373.

mortgage but the borrower refuses to execute the mort-
gage, specific performance of the contract can 'be
obtained if the borrower is not willing to repay: the loan
at once'. Where a part of the loan only has been advanced,
the lender must be ready and willing to advance the
remaining sum according to the agreement.

-2. Another such case is the speciﬁc performance of a
contract to subscribe for debentures of a company.
Though Section 122 of the Companies Act, 1956 provides
for the speciﬁc performance of such a contract we think
it would be expedient, for the sake of comprehensive-
ness, to make a provision in this Section.

40. No change is necessary in clause (b).

Cl. (b).

41. Pollock and Mullaz point out that clause (c) Cl. (C)-

appears to be redundant inasmuch as under section 29
of the Contract Act, a contract "which is not certain, or
capable of being made certain," is void. We agree with
this view and recommend that clause (c) be omitted.

42. As the illustration to clause (d) says, an agree- Cl.(d).

me-nt for partnership is
forced? But there are some exceptional cases 'where
such agreements have been enforced. Thus, where the
parties have actually entered on the partnership by
having commenced the business to be carried on in
partnership, a suit lies for obtaining execution of a
formal deed of partnership'. A contract for the pur-
chase of the share of a partner has also been speci-
ﬁcally enforced".

We therefore propose to provide for such cases. We
also suggest that the word "revocable" in clause (d) be
substituted by the Word 'determinable', for, as Pollock,
and Mulla° observe, the expression 'revocable contract'
is inaccurate.

43. We have transferred clause (e) to a
section relating to trusts which We have suggested'.

1. jewan Lal v. Nilmani, A.I.R. 1928 P.C. 80; Fry, Speciﬁc Performance,
6th Ed. p. 24; 49 Am. Juris., S. 83, p. 101.
2. Speciﬁc Relief Act, 8th Ed., 790.
3. Iéiéndley on Partnership, nth d, p. 582; Halsbury, 2nd Ed.., Vol. 3r,.
para. 4 . . - ' _
4. Byme v. Rezd, (1902) 2 Ch. 735 ; Vmdachala v. Ramaswamz, (18633 I
M.H.C.R. 341.
5. Dodson v. Dmwney, (1901) 2 Ch. 620.
6. Speciﬁc Relief Act, 8th Ed., p. 790.
7. See s. 12, App. I

not generally speciﬁcally en- A

. "» 53%)':

separate CI. (c)~~

Cl. (f).

Cl. (g).

Cl. (h).

Sec. 22
Cls. 1-11.

22
44. In View of the new section 8 proposed by us

clause (f) appears to us to be unnecessary and should be
omitted.

45. In clause (g), the limit of three years, which is a
departure from the English rule, is artiﬁcial and arbi-
trary. We have no hesitation in recommending the
omission of the time-limit and the substitution of the
proper rule, viz., that the Court will not decree speciﬁc
performance if the contract involves the performance
of such a continuous duty that the court is not able to
supervise if.

46. A contract to build or repair would come within
clause (g) and would not, generally be speciﬁcally en-
forcedl. But such a contract is enforced in England." and
in America" in certain exceptional circumstances. Such
a contract would be speciﬁcally enforced if the building
or work is. deﬁned by the contract with sufficient parti-
cularity so as to enable the court to determine the exact
naturedof the work, or that the plaintiff has a substantial
interest, inithe performance of the contract, so that com-
-pensation for its breach would not be an adequate relief
and that the defendant has under the contract obtained
possssion of the land on which the work is to be carried
out.

{In our view provision should be made in the clause
for such a case.

47. We recommend the omission of clause (h)
view of the new provision recommended by us in
section 8.

48. Clause I of section 22, as it stands, is somewhat.
If -the circumstances mentioned in the clause.

vague. ,
are such as render the contract voidable, it is open to,
the party who has the option, to avoid it and no ques-
tion of speciﬁc performance'y"rriaythereafter arise.

There are, however, certain circumstances in which a
Court of equity refuses to decree speciﬁc' perfortnatflcé,

1, Ramchandra V. Ramchandra, 22 B031. 45.'

2. Halsbury, 2nd Ed., Vol. 31, para. 365. p. 333; Fry, 6th Ed., p.48;
Dart, Vendor & Purchaser,Vol .II, p. 879; Wolverhampton Corporation v.
Bmmans (1901) I .K-B- 515- _ . ,

3, Pomcroy, Spcc1ﬁcPerformanoe, 3rd Ed., 5. 23 5 Story, l!q1uty.Jurxsprpu-
deuce, 1920. p. 308- y , E ,.:

23
on the ground of unfairness, even though in law the cir-
cumstances are not such as to render the contract
voidable. Such unfairness may be due either to the
terms of the contract or the conduct of the parties, or
other circumstances, existing at the time of the contract.
Thus, the Court will not decree speciﬁc performance to
compel the defendant to perform an act which would
inevitably subject him to some penal consequences, such
as an action for damages or to a criminal prosecution.
Even if the performance of the agreement does not
involve a breach of trust. a court of equity is always
reluctant to enforce an agreement against trustees
which may injuriously affect their interest or that of
their beneﬁciaries. A contract of sale, therefore, made
by trustees in an unbusinesslike manner will not
generally be enforced, unless it is clearly established
that the price was adequate. The general doctrine in
regard to contracts the performance of which involves a
breach of trust or an unlawful act applies not only to
technical trustees but also to all persons occupying a
ﬁduciary relation or position of conﬁdence towards
others, including agents, directors of corporations,
assignees in bankruptcy and the like. We, therefore,

suggest that the scope of clause I should be clariﬁed by .

providing that the unfair advantage referred to in this
clause may be due to circumstances which may not be

sufficient to render the contract voidable. T r

49. It is not possible to exhaustively enumerate the
grounds of unfairness or of hardship mentioned in
clause II. As stated by Pomeroyl, "the variety of forms of
hardship and unfairness is inﬁnite; the Courts, therefore,
in dealing with these subjects have wisely refrained
from limiting themselves by; special rules. In this
particular ﬁeld precedents are of comparatively little
value." There are however certain circumstances which,
by themselves, have, been held not to constitute an un-
fair advantage or hardship. Thus the fact that the con-
tract is onerous to the defendant' or improvident in
nature", or that there is inadequacy of consideration'-5,
will not be circumstances falling within clause II. It

1. Pomeroy, Speciﬁc Performance, p. 126:1. V
2. Davis v. Maung Shwe Goh., 38 Cal. 805 (PC); Ram Sandar v'; Kali,

A.I.R. 1927 Cal. 889. . '

3. 9 American Jurisprudence, p. 75.

4,. aywood v. C e, (1858) 25 Beav. 140 (150-3).

5. Cf. Narasmga , ow v. Rangasamz Theran, 35 I. C. 871,; Pichai

Chaturbhuja A.I.R., _1g33 It/lad." 736. . "5,

would be advisable to add an Explanation to the section
making this position clear.

50. It is not clear from clause II at what point of time
the «circumstances causing the hardship must exist in
order to be a ground for refusing speciﬁc performance.

In England, it has been established that as a general
rule hardship, to operate as a ground of defence, must
have existed at the time of the contract, and not arisen
subsequently from a change of circumstanceslz.

In India, too, it has been held that circumstances. which
have subsequently arisen such as a rise in prices owing to
external circumstances. like war 'conditi0ns3, or the re-
sults of litigation', do not constitute 'hardship' which can
be relieved against, under clause II:

A subsequent change of conditions causing hardship
may, however, be a ground for refusing speciﬁc perform-
ance Where it has been brought about by the acts of the
plaintiff'.

We recommend that the foregoing principles be incor-
porated in an Explanation to the section.

51.. It is not clear from the Act, to What extent, if at
all, the doctrine of mutuality is applicable in India. The
principle of mutuality of remedy is thus stated by Fry":

"A contract to, be speciﬁcally enforced by the Court
must, as a general rule, be mutual,----that is to
say, such that it might, at the time it was en-
tered into, have been enforced by either of the
parties against the other of them. When,
therefore, Whether from personal incapacity to

contract, or the nature of the contract, or any I

other cause, the contract is incapable of being
enforced against one party, that party is gene-'
rally, incapable of enforcing it against the other,
though its execution in the latter Way might in
itself be free from the difficulty attending its
execution. in the former."

I. Halsbury, 2nd Ed., Vol 31, Para. 4-20.

2. Fry on Specific Performance, 6th Ed., pp. 199, 202.

3. Sankaralmga v.Ratnasamz, A.I.R. 1952 Mad. 389 (_393).

4. Ramalinga v. jagdammal, A.I.R. 1951 Mad, 612; Shzb Lal v. Collector
of Bareill , 16 A11. 423. _
5. Ha sbury 2nd', Ed., 'Vol. 31, Para. 420- 49 Am. Juris., p. 78.
6. Fry on Speciﬁc Performance, 6th E ., p. 219.

The doctrine has been criticised both in England' and
the U.S'.A.2 '

According to Ashburner' the doctrine of want of mutu-
ality as formulated by Fry "appears to be an unfortunate
invention of Lord Redesdale and although it has often
been spoken of with respect, it does not appear to form
the ratio decidendi of any line of cases." He points out
that the illustrations given by Fry i.n support of his pro-
position do not support him.

In an illuminating article on the subject, Ames3
strongly criticizes the rule as generally stated, and sets out
no less than eight propositions, each one of which is at
variance with the statement just quoted.

In Imdia, it was at one time thought" that the doctrine
of mutuality had been rejected by the Indian Legislature
on the ground of its artiﬁciality. But the Privy Council
applied it in Sarwa'rjan's case5 and o'bserved that since it
was not Within the competence of a manager or guardian
to bind the minor or his estate by a contract for the pur-
chase of immovable property, the minor also could not

enforce such a contract, after attaining majority, because

there was a Want of mutuality.

In the aforesaid decision their Lordships of the Judi-
cial Committee5 did not examine 'the provisions of the
Speciﬁc Relief Act nor consider the question whether
there was any reason for applying the doctrine of mutu-
ality under it. After this decision, the question has come
up for consideration before the High Courts on several
occasions, particularly with reference to contracts for
the purchase or sale of immovable property entered into
by guardians on behalf of minors. The decisions are, by
no means, uniform and the attempt of the courts has, of

late, been to avoid as far aslpossible the application of

the doctrine.

In cases governed by Hindu Law after a later decision
of the Judicial Committee', it is settled that a guardian

I. Ashburner,_Equity, 2nd Ed., p. 405. , '
2. 49 Am. Jur1s.,_ s. _35, p.49_; Williston on Contracts, ss. 1439, 1440. ;

_ 3. Ames, Mutuality ln Speciﬁc Performance, 3' Columbia Law Rev. I.
4. Whitley-Stokes, Anglo-Indian Codes,3,Vo1.I, p. 93I;Krz':hna,;am;'

v. Swndrjagppayyar, (1894) 18 Mad. 415. ~-
33. Sarwarjan zz. fakhruddin, (1911) 39 Cal. 232 P.C.
. 1 ., p. 237.

7. Subrahmanyam v. Subba Rm, A.I.R. i948 P.C, 95.

is competent to alienate the property of a minor for pur-

poses of legal necessity or for the beneﬁt of the estate.

and that, accordingly, such a contract is speciﬁcally en-
forceable both by and against the minorl. The Full Bench
of the Andhra High Court has extended this doctrine to
contracts for purchase of property entered into on behalf
of a Hindu minor, though the Court conceded that "It
may perhaps be more difﬁcult in the case of a purchase by
a guardian on behalf of a minor to sustain it on the
ground of necessity or beneﬁt .......... ..".
In any event, where the personal law of a minor en-
ables a valid contract to be made by a guardian on behalf
of the minor, no question of mutuality really arises, for
the contract is binding on both parties. The position is
the same where such a power is conferred by or under
other law, e.g., the Guardians and Wards Act, 1890".

Now contracts made by the guardian of a Hindu minor,
whether for purposes of legal necessity or not, have ceas-
ed to create any problem which might necessitate the
application of the doctrine of mutuality, for, the Hindu
Minority and Guardianship Act, 1956 (XXXII of 1956)
lays down the conditions under which only the guardian
can bind the minor's property, and further enacts a speci-
ﬁc prohibition that in no case can the guardian bind the
minor by a personal covenant [S. 8(1)].

There exists no such statutory provision in rega'rd to
persons other than Hindus. But even under the Mahome-
dan law, it has been held that a contract for the sale of
a Mahomedan. minor's property by his de jure guardian
is enforceable both by and against the minor, if it is for
the minor's beneﬁt'. i

There is still however scope for the application of the
rule in Sa'rwa'rjan's case in_ the case of contracts for the
purchase of property on behalf of a minor which cannot
be said to be for the benefit of the minor'. We do not con-
sider it necessary to import the doctrine of mutualityyinto
our codiﬁed law of speciﬁc performance to cover 'such
cases. On the contrary we would do away with the doc-
trine in Sarwarjan's case5 by inserting, in section 22, a

1. Sitarama Rao v. Venkatarama Reddiar, A,I.R.-1956 Mad. 261' (F;B.)5
Suryaprakasam v. Gangaraju, A.I.R.4 I955' Andhra 33 (40) RB. '

2. Babu Rang v. Saidunmssa, (I913) 35 All. 499. *
3. Ima_mbandz v. Mutsaddi,A.I.R. 1918 PC. 11.

4. Agmr Ahmmad v. Meer, A.I.R. 1952 Hyder. I20 (F.B.)

5. Mir Sarwarjan v.Fakhruddin, (1911) 39 Cal. 232 P.C.

.« as

pfovisilon embodying the law as stated in the American
Restatementi as fol1ows:-----

"The fact that the remedy of speciﬁc enforcement
is not available to one party is not a sufficient
reason for refusing it to the other party".

There Will thus be no room for the application of the
doctrine of mutuality in any suit for speciﬁc perform- .
ance.

52. The words 'his part' in the concluding portion of Sec. 23-
clause (b) of section 23 are ambiguous and have led to a C1-(b)-
difference of opinion amongst commentators. While
according to Banerji2, the representative or principal of
the contracting party can, in the case of a contract per-
sonal in nature, sue only if the party had himself per-
formed his part of the contract, Nelson's3 View is that the
representative or principal could sue after performing
what was to be performed by the party. But in a con-
tract of a personal nature, it would be unfair to impose
on the other party a performance by a third party except
where he has accepted such substituted performance. We
have suggested that suitable changes should be made in
the clause to make this clear.-

53. In our coming report on the Contract Act, we in- C1- (C)-(fl

tend to recommend a general rule that a third party to a
contract who is entitled to a beneﬁt thereunder or has an
interest' therein is entitled to sue upon the contract, sub-
ject to certain limitations. Once such a general' provision
is made, it will be urmecessary to retain the provisions
contained in clauses (c) to (f) of section 23 of the Speciﬁc
Relief Act. We suggest that these clauses be replaced by
one clause,--referring to the relevant provision of the
Contract Act. T

54. In clause (g), we suggest the omission of the word Cl. (8)-
'public', since the nature of the provision is such that it
should be made applicable to all companies governed by
the Companies Act. T

A similar change should also be made in clause (d) of
section 27-

1. Contract, s. 372(1). ' '
2. Baner)1, Law of Spe_c1ﬁc Relief, 2nd Ed., 13. 399 (The same view ap-
pears to have been taken In Mahendra v. Samu, 7 C.W.N. 229).
3. Nelson, Speciﬁc Relief Act, p. 203. T .

C1. (11).

sec. 24.

~ 28

55. Clause (h) of section 23 and clause (e) of section
27 deal with the 'pre-incorporation contracts of compa-
nies'.

Clause (h) of section 23 says that a company may,
after its incorporation, enforce contracts made by the pro-
moters of the company' with third parties, provided such
contracts were within the purposes of the company and
the terms of its incorporation. Section 27(e) lays down
the converse rule of liability of the company in respect
of similar contracts made by the promoters. These two
provisions of our Act are founded on the English law as
it stood at the time when the Act Was passed'.

Later English decisions have taken the View that a
company is neither bound by2 nor entitled to take the
beneﬁt of" the pre-formation contracts made by its promo-
ters.

The provisions of the Speciﬁc Relief Act have, how-
ever, been applied in India even recently', without refer-
ring to the change in judicial opinion in England. Though
a company cannot technically ratify a contract made.be-
fore its incorporation, there would appear to be no reason
why the company should not be entitled to choose to take
the beneﬁt or the burden of a contract made on its behalf
by its promoters, by communicating its acceptance of the
beneﬁt or the burden to the other party to the contract.
There is no provision in the Companies Act, 1956 which
prevents a company from accepting the beneﬁt or burden
of a pre-incorporation contract. »

s»

We, therefore, recommend that clause .(h) of section
23 and clause (e) of section 27 be retained, with suitable
verbal changes indicating that the contract «would be en-
forceable by or against a company if the company accepts
the contract and signiﬁes its acceptance to the other party
to the contract. " "

56. In clause (a) of section 24, the words fcbuld Inuit'
are not quite clear and have occasioned a'"diﬂ'erencet'of
views among the commentators as to their meaning'.

I. Earl of Shrewsbury v. North Statﬂordshire Ry. Co., (I865-66) I Eq. 5:3'
2. In re English & Colonial Produce Co., I__.td., (I9o6)2 Ch. 435 (C. .).
3. Natal Land Co. v. Pauline Colliery Syndzcate Ltd., (1904) A.C. I20;

Newbome v. .S_'ensol1'd Ltd., (1953) I All. E.R. 708 C.A.).

4. Commissioner of I. T. v. Bhurq ya Coal Co., A. .R. I953.Pat. 298 (300).

5. Collett, Law of Speciﬁc l_{el1eA , 3rd Ed, p. 2075 Baneru, Law of spe-
ciﬁc Relief, 2nd Ed., Appendix p.79. ,

We, therefore, recommend that in clause (a) of section
24 the words 'would not be entitled to' be substituted for

the words 'could not'.

57. It has been laid down in England as well as in
India that the plaintiff in an action for speciﬁc perform-
ance of a contract is disentitled to the remedy not only
where he has violated any of its essential terms but also
where he has acted in contravention of it, without violating
any of its terms.

Thus, in Fryl it is observed:

"We shall now 'consider the closely allied cases
-where he (the plaintiff) has disentitled him-
self, not by default merely, but by acts in
fraud or contravention of the contract, or at
variance with it, or tending to its rescission and
the subversion of the relation established by it.
For where the party to a contract, who asks
the intervention of the Court, for its speciﬁc
execution, has been guilty of such conduct, that
circumstance may be put forward as a defence
to the action".

This principle has been applied in India by the Privy
Council in Srish v. Banomali". In dismissing a suit for
the speciﬁc performance of a compromise,--tl:e judicial
committee observed:

"the conduct of Krishna was at variance with, and
amounted to a subversion of, the relation in-
tended to be established by the compromise".

In our view this principle should be incorporated
into the section by adding suitable words at the end of
clause (b) of section 24.

. , 58. We are of the opinion that clause (c) is unnecessary
in View of the provisions of Order II, r.2 ofthe Code of
Civil Procedure. If a person has obtained a decree for
compensation for breach of contract he cannot again sue
for speciﬁc performance, whether satisfaction of the dec-
ree is obtained or not, as his cause of action gets merged
in the decree. The cause of action in breach of contract,
whether the relief claimed is damages or-speciﬁc perform-
ance, is the same and if the plaintiff is entitled to more

I. Speciﬁc Performance, 6th Ed., s. 957, p, 4 o,
2- (I904) 31 Cal. .584 (596) P.(.'.. 5. I

Cl. (3).

C]. (b).

Cl. (c)

Cl. (d).

than one relief, either singly or in the alternative, he
must sue for the same in the same suit and cannot reserve
it except with the leave of the Court [O.II, r.2(3),C.P.
Code].

59. Clause ((1) of section 24 and clause (c) of section
25 may be omitted as both of them are founded on the
English law as it stood under a Statute of the 16th cen-
tury, which has since been altered by legislation. A con-
veyance without valuable consideration was voidable at
the suit of a supervening purchaser for value with notice.
This has ceased to be the law in England since the Voluntary
Conveyance Act, 1873 (56 & 57 Vic.,),--now replaced by
the Law "of Property Act, 1925 (s. 173). Again, under our
Law, a prior settlement of property divests the title of the
settler immediately and any conveyance thereafter from
the settlor to another, even if it be for consideration, would
be ineffective to convey any title. '

60.. It has been held by the Privy Council that in a suit
for speciﬁc performance, the plaintiff must show that all
conditions precedent have been fulﬁlled and also allege
and (where the fact is traversed) prove a continuous
readiness and willingness to perform the contract on his
part, from the date of the contract to the time of hearing'.
Though there is no express requirement to this effect in
the Speciﬁc Relief Act, it has been held that failure to
allege readiness and willingness will lead to a dismissal
of the suit"'.

But the plaintiff need not prove performance of » or
over readiness and willingness to perform non-essential
terms; or
terms of a separate or collateral contract; or

terms the performance of which has been prevented -or
waived by the defendant; or '

terms, the performance of which has became impossible
. without the plaintiff's fault.

We consider that the doctrine of readiness and willing-
ness so formulated should be incorporated into our Act.

61. There is, however, a conﬂict of judicial opinion as
to the exact scope of the plaintiﬁ"s readiness and willing-
ness required by the doctrine. i

I. Ardeshir Mama v. Flora Sassoon, 52 Born. 597.
2. Madan v. Kamaldhari, A.I.R. 1930 Pat. I21-I27.

In England, it has been held1 that a plaintiff claiming
speciﬁc performance, who insists on a wrong interpreta-
tion of the contract, does not lose his right to speciﬁc
performance in accordance with its right interpretation
where the defendant offers to perform the contract as
rightly interpreted.

In India, the Calcutta? and Nagpur3 High Courts have
taken the view that the plaintiff must allege and prove
his readiness to perform the contract as it really was and
not as it was alleged by him to be. Thus, Where a pur-
chaser sought speciﬁc performance alleging that he was
always ready and willing to pay Rs. 85 which, according
to him, was the price ﬁxed by the contract, but the Court
found that the price ﬁxed by the contract Was, in fact,
Rs. 130, the suit for speciﬁc performance was dismissed'.
Similarly, it has been held that, if the plaintiff insists on
a condition which he is not entitled to under the contract
as properly interpreted, his suit for speciﬁc performance
must fail5. '

The Madras High Court" has taken the View that even
where the plaintiff alleges that the consideration payable
by him Was different from the real amount, there is a
sufficient averment on the part of the plaintiff of his readi-
ness and Willingness to perform his part of the contract,
if he adds in the plaint that 'he has no objection to paying
the defendant any sum that the Court should be pleased
to fix". I

We are, inclined to prefer the Madras view and
recommend that the plaintiff, should be entitled ' to
speciﬁc performance if he aversperformance or readiness
and willingness to perform the contract according to its
true construction. '

_ .62., In connection with contracts for sale, a question
has arisen whether inorder to establish his readiness and
willingness the plaintiff should have made a tender of the

" money due from him to the defendant. The . further

question which has been raised is whether the purchaser

: must, in order to show his readiness and willingness,
I tender the money on the date ﬁxed by the contract for

I. Bernerx .v. Fleming, (1925) Ch. 264 (CA); Halsbury, 2nd Ed.. Vol.~ 31.
para.
337- .. .i '

3. Shamﬂbhdl v. fagoo, I949 Nag. 581 (607-Io).
4. Ru:tom_ali v. Ahider, 45 C.W.N. 837.

5. Shamitbhai v.3'agoo,_I.L.R. (I949) Nag. 581 (607-IO).
6. Arjuna v. Lakshnn, A.I.R.(1949) Mad. 265.

36- I - .
2. 'kzrul v. Saroj, A.I.R. 1948 Cal. 147; Rustomalf v. Ahidar. C45 C.W.N.

Sec. 25.

completion. In a Calcuttal case, it was held that such a
tender must -be made, while in a Bombay case", it was
held that an actual tender was not necessary for a suit for
speciﬁc performance, and it was enough if payment was
made as directed by the Court. The Bombay View seems
to have support in the observations of the Privy Council

in Bank of India v. Chino;/5, where it has held that the

plaintiff in such a suit need not deposit the money in
court or prove his ﬁnancial competence.

Having considered the different aspects of the ques-
tion, We recommend that it should be provided that it is
not essential that the plaintiff should tender the money to
the defendant or deposit it in Court except ywhen so
directed'.

63. Section 18 speaks of property generally and sec-
tion 25 refers to movable and immovable property. It is,
however, not clear how far the provisions of these two
sections apply to contracts for the letting of movable
property. Nor do the reported decisions throw any light
on this point.

It may not be strictly accurate to describe contracts for
the letting and hire of movable property as contracts of
lease. Letting and hiring of movables is really a contract
of bailment which is governed by Chapter IX. (sections
148 to 170) of tlce Indian Contract Act, 1872. If the bailor
'does not deliver the movable property which is the,sub-
ject<-matter of the contract, the bailee may have a his

remedy against the bai1or'for recovery of possess;ion,.Qf»

the property. There is no provision in the Indian,Contr;u;t-
Act for the enforcement of. such a contract. The matter
must, therefore, be governed by, sections 10 and 11 of the
Speciﬁc Relief Act. After the termination of the peribdfof
letting or hiring the bailor would be entitledto a return
ofthe property and a corresponding duty is on
the bailee by ss. 160 and 161 of the Indian Qpntractl Act
1872. p . _ . t

Even in the case of contracts for the sale oil "n1ovaBIes
the scope for the application of sections 18 and 25 is rather
narrow inasmuch as it is only in the case of Aartﬁiclesf *6'!

I. Manik v. Abhoy, 37 I.C. 257.
2. Tribhobandas v. Balmukundas, 67 I.C. 865,
3. A.I.R. (I950 RC. 90 (96).
to s. 24',App. I. i

4. Vide Expl. (i

special value that contracts for the sale of movables are
speciﬁcally enforced.

We therefore recommend that, for the sake of clarity,
sections 18 and 25 should deal only with immovable pro-
perty and, that, a residuary section should be enacted,
extending the provisions of these two sections, mutatis
mutandis, to movabl'es, so that possible cases calling' for
the application of either of those provisions may be
covered.

64. We have already recommended the omission of
clause (c), of section 25 [Para. 59, ante].

65. Clause (b) contains certain non-technical words Sec. 26.

such as 'surprise' and fmisapprehension', the use of which
has? been commented upon. Thus, Pollock' says-~

§"Th'e use of the word 'surprise' now seldom if ever
heard in an English Court, ........ .. _may be taken as no
more than a piece of abundant caution." '

Banerjiz observes that at one time the word 'surprise'
was used as almost synonymous with 'fraud'. Col1ett's view
is that 'surprise' takes place "when something has been
done which operated to mislead or confuse the party on
the sudden"3. 'Surprise', accordingly, does not go beyond
the concept of fraud. We have not been able to ﬁnd any
Indian decision where speciﬁc performance has been
granted with a variation on the ground of surprise.

As regard 'misapprehension', Collett" suggests that it
means mistake in regard to the effect or consequence of
the contract as contrasted, with mistake in regard to the
terms of the contract. ' Banerji5, further, says that the
addition, of 'the, word i'r,ea'son,able' to qua1ifyp',niisapprehen-
sion' does not make much material diﬁerence in its Incan-
ing. While clause' (:51) deals with a mistake as to the
tlerinsof, contract, clause (b) seems to' deal with a, mistake
as' to the effects (iii the contract. a i

If so, it is possibleto incorporate c1ause,(b). with clause
(a), with suitable drafting changes. »

Cl. (b).

66. As Banerjitpoints out,' clause' (c) means c1.(¢),

more than that the terms of ' the contract in writing

I. Tagore Law; Lectures on Fraud. p. 74.

2. Speciﬁc Rene , 2nd Ed., p. 342. :
3. Collect, Law of Speciﬁc Relief, 3rd Ed. p. 220.
4. Ib:'d., 3rd Ed., pp. 220,244-5.

5. S ciﬁc Relief, 2nd Bd., 1:. 343.

6. 'd., p. 257,

Cl. (d).

Cl. (e).

Sec. 27.

Sec. 17 A

, - be 'gathered from

do not embody the whole agreement between the parties',
and that the plaintiff must fulﬁl his entire engagement
before he can have speciﬁc performance.

That being so, clause (c) also may be amalgamated
with clause (a), with suitable drafting changes.

67. Clause (d), however, cannot be amalgamated with
clause (a) because here, as Banerjil points out---

"Neither party is to blame; both were agreed as to
their object, viz., some legal result; but by reason of error
in drafting, they' are both balked of their purpose....._.".

In other words, the discrepancy in the written instru-
ment may not be due to any fraud, mistake or misrepresen-
tation of either party but may be due to the ignorance or
carelessness of the draftsman, and that is why clause (d)
does not start with the words "where by fraud or mis-
take . . . . . . . . ..", as clauses (a) and (d) do.

We do not propose to alter clause (d).

68. Only a drafting change has been suggested in clause
(er). '

69. In section 27, clause (e) has to be omitted in view
of the present state of the law relating to promoter con-
tracts (vide Para. 55, ante). In clause (d), the word 'public'
should be omitted inasmuch as the principle embodied in
the clause is applicable to all companies.

70. In our report on the Registration Act", we have re-
commended the exclusion of 'agreement to lease' from the
deﬁnition of lease in section 2 and the omission of clause
(c) from section 49. The result of these changes willbe
that an agreement to lease, even if in_ writing, will not
require registration; and, even an unregistered deed of
lease will be admissible in evidence to prove an agreement
to lease. .A I 1

In the result, a person will be entitled to enforce speci-
ﬁc performance of an agreement to lease even if it has to
an unregistered lease deed. Hence,
section 27A of the Speciﬁc Relief Act will be unnecessary,
whether it is interpreted to be applicable to an unregis-
tered agreement for leaseor an unregistered deed of

lease.

1. Ibid., App. p. 87. . .
2. Sixth Report of the Law Commission, para. 2I,~ p. 10. '

We therefore recommend that section 27A be omitted.

71. The entire contents and arrangement of section 28 S°°-38-

have been severely criticised by Pollock and Mul1a':----

"This section is incongruous, misplaced, and altoge-
ther an unsatisfactory piece of work. If it
means more than an exhortation to administer
the remedy now in question on the principles
declared in the Contract Act, secs. 15-22; if it
purports to confer on the Court a discretion to
apply, for this purpose, a standard different
from that of the general law; and if, in particu-
lar, I, C. A., sec. 22 is to be considered inappli-
cable in suits for speciﬁc performance-----then it
ought not to have been mixed up with provisions
relating merely to procedure, but, as materially
enlarging the discretion of the Court, should have
followed sec. 22 of the present Act and should
have made the intention more explicit .......... ..".

Having regard to this comment we recommend the in-
corporation of the provision into section 22,----making it
clear that even where the mistake or misrepresentation is
not such as to render the contract voidable, the Court may
refuse to enforce speciﬁc performance where it would be
inequitable on the part of the plaintiff to obtain the relief
[See s. 21(2) (c) of Appendix I].

Section 28 may, therefore, be omitted.

72. As we have included in the Act speciﬁc provisions
enabling a plaintiff to ask for reliefs such as a refund of
earnest money, in a suit for speciﬁc performance, We
recommend that, by way of abundant caution, 'it should
be made clear that the dismissal of a suit for speciﬁc per-
formance will not bar a suit 'for any relief other than

damages. We have suggested suitable alterations in sec-.

tion 29 in this behalf.

73; Section 30 provides, inter alia, that the provisions
of Chapter II relating to speciﬁc. performance of con-
tracts'wi1l also apply to a suit for the enforcement of an
award. When this provision was made there was no en-
actment in force in India relating to arbitration.

Since the enactment of a comprehensive law of arbit-
ration in the Arbitration Act, 1940, the scope of the

,._..._._.._.

I. spcciﬁc.ReliefAct, 8th Ed., p. 823.'

Sec. 29.

Sec. 30,

application of section 30 has become very limited. Under
section 14(2) of the Arbitration Act, an award made by
arbitrators without intervention of Court may be ﬁled in
Court for enforcement, by application made by either
party to the arbitration agreement, within 90 days of the
date of the service of notice of the making of the award
(Art. 178, Limitation Act). Thereupon follows an execut-
able decree under section 15, if the Court sees no reason
to remit or set aside the award. Hence, if the procedure
under Section 14(2) of the Arbitration Act be followed,
there would be no need for any of the parties to resort to
a suit for speciﬁc performance.

But under the provisions of section 30 of the Speciﬁc
Relief Act a party to an award may also bring a regular
suit to enforce such award without adopting the proce-
dure laid down in the Arbitration Act. Prior to the en-
actment of the Arbitration Act, 1940, it was held that the
procedure laid down in Schedule II of the Civil Proce-
dure Code was not exclusive and it was not imperative
upon a plaintiff who sought to enforce an award, to re-
sort to that procedure'.

But after the passing of, the Arbitration Act, 1940,
there has been a difference of opinion on the question
whether a suit still lies to enforce the award under the
provisions of the present section of the Speciﬁc Relief Act
in view of section 32 of the Arbitration Act, which says:

"Notwithstanding any law for the; time being in
force, no suit shall lie on any ground whatso-
ever for a decision upon the existence, effect
or validity of an arbitration agreement or
award, nor shall any arbitration agreement or
award be set aside, amended, modiﬁed or in
any way affected otherwise than as provided in
this Act".

The Madras" and Patna" High Courts have held that by '

reason of the words 'notwithstanding any law' in' the
above section, the only procedure for enforcing an award
now is an application under section 14 of the Arbitration
Act and that a suit is no longer maintainable.

x. Subbaraya Chem' v. Sadasiva Chem', 20 Mad. 490.
2. Moolrhand v. Rashid. A.I.R. I19? Mad. 346.
3. Ramchander v. Munshimian. A. . . 1950 Pat. 4): (5a).

The Nagpur' and Calcuttaz High Courts, on the other
hand, maintain that section 32 of the Arbitration Act bars
a suit challenging an award and not a suit for enforcing
the award and that section 32 of the Arbitration Act has
not abolished the right to bring a suit under section 30 of
the Speciﬁc Relief Act.

The Arbitration Act is a consolidating enactment and
its territorial application is co-extensive with that of the
Speciﬁc Relief Act. The enforcement of the award under
the Arbitration Act takes place through the Court Which
has jurisdiction, in the same proceeding, to remit, modify
or set aside the award. All the reliefs relating to the
award are, accordingly, available in the proceeding under
the Arbitration Act.

We are, therefore, of the view, that no separate suit
should lie in cases where the Arbitration Act is applicable
and that the scope of section 30 of the Speciﬁc Relief Act
should be conﬁned to cases of arbitration under other
laws, the operation of which is saved by sections 46 and
47 of Arbitration Act.

It is, accordingly, suggested that the following amend-
ments be made:----

(1) Section 30 of the Speciﬁc Relief Act:

Add the words "to which the Arbitration Act, 1940
does not apply" after the word 'awards'.

(2) Section 32 of the Arbitration Act 1940;

Insert the word "enforced" after the words "nor shall
any arbitration agreement or award be", and amend the
marginal note in the section accordingly.

74. In England, the Court of Appeal has held' that Sec.3I.
the articles of association of a company cannot be rectiﬁ-
ed by a court even though they. do not conform to the
concurrent intention of the signatories to the.articles and
that the only mode of altering them is the passing of a
special resolution in the manner provided by the Com-
panies Act [vide s. 23 of the Companies Act, 1948 (11 and
12 Geo. 6, c. 38)]. Since there is a corresponding provision
in section 31 of our Companies Act, 1956, articles of
association may be excluded from section 31 of the

I. Nanhelal v. Singhai. A.I.R. I944 Nag. 24.
2. Munshilal v. Modi Bros., (1947) 51 C.W.N. 563.
3. Scott v. Frank P. Scott (Lond.) Ltd. Or:., (1940) Ch. 794 (804) CA.

Speciﬁc Relief Act, following the principle laid down in
the English decision.

75. The words "may institute a suit" are not qliite
happy and seem to suggest as if the relief of rectiﬁcation
can be granted only if a separate suit is 'brought for the
purpose. It has been held that in a suit for damages
for breach of contract, the court may allow the plaintiff
to ask for the necessary rectiﬁcation by amending the
plaint', subject of course to the law of limitation.

The court has sometimes given substantive relief to
the plaintiff, after rectifying the instrument, even though
the relief of rectiﬁcation had not been' speciﬁcally' asked
for2. "A justiﬁcation for such power is given in American
Jurisprudence3 thus-

"According to strict practice, in a law action in which
an equitable cause for reformation is not asserted, the
written contract will be given full force and effect and a
plaintiff will not 'be heard to say that it does not express
the real agreement of the parties. . . . . . . . . . . . ......But in
jurisdictions . . . . . . . . . . ..in which the distinctions bet-
ween law and equity are abolished, or in which both
forms of relief are administered by the same court, in an
action at law upon an instrument the court may, in a
proper case, construe the contract as it was intended by
the parties, or supply matters omitted either by mutual
mistake or fraud, and render a proper judgment on the
basis thereof. as if there had been ﬁrst a reformation of the
contract. The judgment may confer only the ﬁnal legal
remedy, the preliminary equitable relief being assumed
as a pre-requisite, but not in terms awarded.'_'

There is greater reason for the exercise of such a
power in India Where there exists no distinction between
law and equity. 7It is therefore proposed that it should
be provided that the relief of rectiﬁcation may be ob-
tained not only in a suit speciﬁcally brought for the pur-
pose but also in a suit in which any right arising under
the instrument is in issue.

76. It is not quite clear from the Statute itself whe-
ther a plea by way of rectiﬁcation can be taken in de-
fence and, if so, what are the conditions subject to which
it is available.

1. Raipur Mfg. Co. v. Venkatasubba Rao F9' Co., A.I.R. 1921 Mad. 664.
2. Kora v. Kangzekant, A.I.R. 1916 Mad. 795.
3. 45 Ain. Juris., pp. 589-90.

a
.

ln England, it is now clearly laid down by s. 39(1) of the Supreme Court of Judicature (Consolidation) Act, 1925 as follows:

"The Court or Judge shall have power to grant to any defendant in respect of any equitable estate or right or other matter of equity and also in respect of any legal estate right or title claimed or asserted by him--(a) all such relief against any plaintiff---or petitioner as the defendant has properly claimed by his pleading, and as the court or judge might have granted in any suit ins- tituted for that purpose by that defendant against the same plaintiff or petitioner:"

In India, it has been held by the High Courts of Bombayl, Calcutta2, Madras3 and Nagpur' that even where under the law of procedure the defendant is not entitled to make a counter-claim, the defendant should on the principle of 'justice, equity and good conscience'5, be allowed to raise in defence any plea that would have enabled him to obtain rectiﬁcation in a suit, instead of being driven to a separate suit. So long as the remedy of counter-claim is not available in all courts, it would be desirable to enact the principle established by the cases ~ just cited. '

77. The question then arises, under what conditions should the defendant be permitted to raise this plea. In the case of Shiddappa v. Rudrappa", the defendant's right to bring a suit for rectiﬁcation was not barred by limitation and emphasis was laid on that fact.

But there are cases7 in which it has been held that the defendant should be 'allowed to raise the plea even though his right to sue for rectiﬁcation is barred by limitation. . ' We are of the view that the conditions in the case of the plaintiff and the defendant should be the same. This result could be secured by providing that either the plain- tiff or the defendant may have relief by way of rectiﬁca-

I. Shiddappa v. Rudrappa, A.I.R. I954 Bom. 463;' Dagdu V. Bhqna, (I904, 28 Bom. 420 (426).

. Binns v. W. {'9' T./lvery Ltd.,(I9i2) 61 Cal. 548.

. Rangasami v. Souri, (I916) 39 ad. 792.

. Rajaram v. Manik A.I.R. I952 Nag. 90.

. Pollock and Mulla support this View (Contract and Speciﬁc Relief Act, 8th Ed., pp. 831-2). It is also in conformity with S. 92 (I) of the Evid- ence Act.

6. A.I.R. i954 Bom. 463. _

7. Kesho Smgh v. Roopan Smgh, A.I.R. 1927 A11. 355.

Ul-ht» N Sicl 32'33- Sec. 34.

40 .< ..',.

tion, but only if it is speciﬁcally asked for in his plead- ing, whether initially or by amendment.

78. We propose to omit both sections 32 and 33.

So far as section 32 is concerned, it is an ambiguous provision which has led to speculation amongst com- mentators and We have not been able to ﬁnd any decision where this section has been applied or interpreted.

Pollock in his Tagore Law Lectures' observed-

"The 32nd section is a striking example of the misguid- ed ambition that pervades the New York draft ............. .. What is the 'equitable and conscientious agreement' which the Court must be satisfied that the parties in- tended to make? Is it something more than a lawful agree-

ment? And if so, what are the additional' elements? On what authority this section is supposed to be founded I -

know not".

Banerjiz thinks that the section was enacted so that the court may not be compelled to "go through the use- less formality of rectifying the written expression of a contract which it will not enforce speciﬁcally."

It is doubttul, however, whether the scope of rectiﬁca- tion should be so narrowed down. For, a plaintiff suing or intending to sue for damages, may be in need oﬁ recti- ﬁcation. In the U.S.A.3, it has been held that the Court willnot rectify an instrument which will remain invalid or inoperative even if it is brought into conformity with the alleged intention of the parties.

In our view, there is no need for a provision that the Court will not rectify an invalid agreement; for, the word 'contract' in section 31 means an enforceable agreement.

As to section 33, its object is only to enjoin the Court to discover the real intention of the parties instead of in- ferring the intention from the language of the instru- ment itself. But no separate section is necessary for this purpose. We propose to make this duty of the court clear by verbal changes in section 31, after dividing it into sub-

sections.

79. We recommend no change in section 34 except that it may be amalgamated with section 31, as a sub-section thereof.

1. Pollock on Fraud (T.L.L.)_. p. 122.

2. Law of Specific Relief, 2nd Ed. APP., cp. I02.

3. 45 Am. Juris. p. 586.

80. In England, where the defendant in an action for speciﬁc performance fails to comply with a judgment against him, the plaintiff may, at his election, move in the action to have the contract rescinded'. This right ex- tends to the vendor and the vendee. The Indian Courts have taken the same view?

In all probability, the English rule was sought to be adopted, without modiﬁcation," in the third paragraph of section 35(c) of our Speciﬁc Relief Act. But, as has been pointed out by Collett,' as well as in the cases mentioned below3--5, the words, 'in the same case' are not happily chosen and "It is not at all clear to what these words in the same case refer whether to the second paragraph or the ﬁrst paragraph of clause (c)".5 The question is, whether the vendor or lessor should have the option of bringing a separate suit for rescission, in a case coming under cl. (c). As the section stands, he has the option of bringing a separate suit under the first paragraph of section 35 -or to apply for rescission in the same suit under the third paragraph of the section.

But, as Banerjis observes, there is no reason why the vendor or lessor should be allowed to harass the other party in a separate proceeding when the remedy of rescis-- sion can be made available in the same suit.

We therefore propose a new section" which will enable the vendor or lessor to apply for rescission in the suit for speciﬁc performance, if the purchaser or lessee fails to comply with the terms of the decree'. In View of this new provision, clause (c) of section 35 and the two succeeding paragraphs become unnecessary and should be omitted.

81. While section 35(c) deals with the consequences which will follow from the default of the purchaser or lessee to comply with the terms_of a decree for speciﬁc performance, there is no provision in tlte Act as to what would happen if the purchaser or lessee makes the pay- ments due from him but the vendor or lessor does not

1. Fry, 6th Ed., pp. 546-7.

2. Akshayalinqam v. Avavambala & Ammal, A.I.R. 1933 Mad. 386.

3. Ramji v. Chinai, 82 I.C. 73;Kurpal v. Shamrao, A.I.R. I-923 Born. 211.

4. Colletr, Sp. Rel. Act, 3rd Ed., p. 277.

5. Per Macleod C]. in Kurpal v. Shamrao, 47 Born. 589

6. Law of Speciﬁc Relief, 2nd Ed., pp. 468-70.

7. S. 26, App. 1. i (592).

CI. (c).

comply with the decree by executing a conveyance or how the purchaser or lessee should obtain possession of the property. At present. the latter contingency is dealt with in proceedings for the execution of tlﬁe decree. But, if in the former case, the vendor or lessor may obtain relief by way of rescission in the same suit. there is no reason why the other party may not have his reliefs against the vendor or lessor in the suit itself. inasmuch as the principle of avoidance of multiplicity of proceedings is equally applicable to both cases. V We have already provided* that consequential reliefs like possession or partition can be claimed in the suit for speciﬁc performance itself and included in the decree. We are now speaking of the enforcement of such reliefs in- cluded in the decree which are at present available only by executing the decree, in separate execution proceedings.

We recommend." that complete relief in terms of the decree in a suit for speciﬁc performance shall be avail- able by application in the suit itself, without lraving to resort to separate execution proceedings and that appro- priate provisions should be made in the Code of Civil Procedure enabling such applications to be made and orders thereon and also for appeals.

82. There are certain well-known limitations to the equitable right to rescind. which'are not incorporated into the existing section 35, but which have been applied by our Courts, on general considerations. For the sake of clarity and comprek ensiveness, we may codify and in- clude these principles in section 35. taking care not to make the propositions rigid so as to restrict the powers of the Courts to do justice. The Court may refuse to rescind a contract in any of the following cases:

(a) Where the plaintiff has elected, whether'ex-

pfessly or impliedly, to abide by the contract';

(b) Where owing to the change of circumstances which has taken place since the making of the contract (not due to any act of the defendant

1. S. 19 of App. I

2. Cf. s. 26 (3) of App. I. V a . Fry, sth Ed,,p, 348; Clough v. L.N.W. Ry., Co., (1871) L.R. 7 Ex. 26 3 (34) gﬁﬂangasawi Gounden v. Nathiappa Gounden,(1918)éa Mad. 523 (538) P.C.; Ramgawda v. Bhausaheb, (1927) 52 Born. 1 P. 'gt. . 4 himself) the parties cannot be substantially restored to the position in which they stood when the contract was made':

Where the contract is of such a nature that it is not severableg and a part thereof is sought to be rescinded;

Where third parties have, during the subsis- tence of the contract, bona. ﬁde acquired rights under it, without notice of the facts which make the contract liable to be rescribed5.

It is proposed that the above propositions be included in a new sub-section to section 35.

(c)

(d)

83. The requirement of 'writing' at the beginning of section 35 has long been omitted by the Transfer of Pro-

perty Act, 1882, as regards the territories where that Act is in force. We have made this Explanation at the end of the section.

84. Section 36 has been rightly criticised by Pollock and Mul1a4, as being in conflict with section 22 of the Con- tract Act, in these words---

"It is difficult to reconcile the language either with sound principle or with the terms of I.C.A.,' section 22. Mistake may prevent any: real agreement from being form- ed; we are not aware of any case in which, on the ground of 'mere mistake', a contract is only voidable ................ ..".

We 'recommend that section 36 be omitted.

85. No change is considered necessary in sectin 37.

86. The second part of section 64 of the Contract Act deals-with another corollary which follows from the same principle as underlies section 38 of the Speciﬁc Relief' Act, namely, "he who seeks equity must do equity". While section 38 of the Speciﬁc Relief Act enjoins the Court, while decreeingrescission, to direct the plaintiff to make any compensation to the defendant which justice may require, the second part of section 64 of the Contract Act enjoins the party who rescinds to restore any beneﬁt which he may have received from the defendant under

1. Fry, pp. 346-352;Hardei v. Bhagwan Sing, 24 C.W.N. 105.

2. ghid v.hDEo5shu, A.I.Ré 1:92: Ca1Il'.I?(_5%}1I2nde€'-za. Cc§mp)beill,R 7 474.

3. ry,6t ., .38; ug v. . . .y. o.(r7I ..7.'x.263 .

4. Speciﬁc Relilgf 8th Ed.. 1), 8,36. ' < 5) . 9 clear by inserting an M 'Sec. 36.

Sec. 37.

sCCo'38w Secs. 39-4o.

Sec. 4!.

the contract. It is desirable that the same equitable principle should also be included in section 38, so that while decreeing rescission the Court may direct not only payment of compensation to the defendant (for instance, for improvements made by him on the property) but also restoration of any beneﬁt received by the plaintiff under the contractl.

We suggest that section 38 be amended accordingly

87. No change is recommended in sections 39 and 40.

88. We recommend that in section 41, the obligation to restore any beneﬁt obtained under the instrument in question should be provided for, for the reasons we have already given in connection with section 38 [Para. 86, ante].

89. Under sections 38 and 41, a plaintiff who obtains "relieﬂ on the ground that a contract to which he was a party is void or voidable, may be required by the Court to make compensation to the defendant. To this we have added the obligation of restoring any beneﬁt which the plaintiff may have obtained under the instrument.

The question is whether the equitable principle should not similarly apply in favour of the plaintiff in a case where the deﬁendant successfully resists the suit of the plaintiif on the ground (a) that the instrument is void or.

(b) that it is voidable and he has avoided it.

It may be pointed out, at the outset, that_ though the above sections of the Speciﬁc Relief Act and section 19A of the Contract Act provide the equitable relief only to the defendant in the suit, section 65 013 the Contract Act enables the relief to be awarded against 'any person'. The Privy-

Council? applied this section to give relief to a mortgagee, who had brought a suit on his mortgage, to recover the amount lent by him under the mortgage, with compound' interest. The principle followed by the Privy Council was explained very clearly in a subsequent case arising out of the same transaction5--» "A defendant .who when sued for money lent pleads that the contract was void can hardly regard with surprise a demand that he restore what he received thereunder."

1. Lodge v. National Union Investment Co., ( 1907) I Ch. 300. (C . Nagappa v. Brahadambal, 39 C.W.N 909 P.C.).

2. isar Ahmad V. Mohan Manucha, A.I.R. 1940 RC. 204-

3. Mohan Manucha V. Mznxoar Ahmad, A.I.R. I943 P-C. 29 (34).

A further question which arises is whether the same principle should be made applicable to the case of voida'b~le contracts. The modern principle of unjust enrichment does not make any distinction between void and voidalole contracts. There is an obiter dictum of the Privy Councill to the effect that section 65 of the Contract Act extends also to voidable contracts.

As however section 65 uses the word 'void' and the observation of the Privy Council is in the nature of an obiter dictum, we propose, by way of abundant caution, 'that the principle underlying section 65 should be expres-

sly made applicable to avoidable contracts, Where the defendant relies on the voidability of the contract.

A speciﬁc provision to this effect may beadded at the end of the Chapter on Cancellation [vide s. 36(1) of App.I].

90. Though section 65 of the Contract Act applies in' terms to void contracts, the Privy Council has held" that»-/-"H that section has no application to contracts entered into by parties who were not competent to enter into» any contract, and this View has been followed by the High Courts3.

As to section 41 of the Speciﬁc Relief Act, the consensus of opinion is that E applies Where the minor is the plaintiff and seeks to set aside a transaction on the ground of his minority or asks ﬁor other relief on the footing that the transaction is a nullity'.

But as regards the application of section 41 as against a minor defendant, there is a sharp difference of opinion between the Lahore' High Court on the one hand and the Allahabad' and Andhra" High Courts on the other. Accord- ing to the Lahore High Court5, the equitable principle underlying the section should be equally applicable to the plaintiff and the defendant, and that, accordingly, when a minor enters into a contract on a false representation as to his age, and in a suit on the contract refuses to perform it on the ground of his minority, he must restore the pro- prietary or pecuniary beneﬁt derived by him from the I. Satgur_ Pr_asad v. Har Narain, A.I.R. 1932 P.C. 89 (91).

2. Mphor_: Bzbee v.Dharmadas, (I90) 30 Cal. 539 P.C.

3. Ajudhza v. Chandan, A.I.R. I937 A 1. 6Io(6I3-4) F.B.; Tikkilal v.I<omaI, I-L-K (I940) Nag. 632; Punjabai v. Bhagvandas, A.I.R. 1929 Born. 89. 4- Abpaswami v. __Narayanasami, A.I.R. 1930; Mad. 945 ; Mahadeo V- Nana Btmajz, A.I:R. 1946 Nag. 359. 5-Kh_an _Gul V. Lakha Smgh,A.I.R. I928 Lah. 609 (617-8) KB.

6. Ajudhta v. Chandqn, A.I.R. 1937 All. 610 (618) E13.

7. Lutch Arao v. Bhzmayya, A.I.R. (I956) Andhra 182.

"'~~Lahore case".

Se'. 42.

contract, whether he is the plaintiff or the defendant in the suit.

In other words, according to the Lahore High Court, the minor defendant should be bound not only to restore the property, if any, but also the monetary consideration obtained under the contract.

Sulaiman, C. J ., in the Allahabad case', was prepared to accept this principle so far as restoration of speciﬁc pro- perty Was concerned, but not to the extent of repayment of the pecuniary beneﬁt, for that, according to him, "would be tantamount to enforcing the minor's pecuniary liability under the contract which is voidz." This view has been followed by the Andhra High Court".

Having co-nsidered the rival points of view we are inclined to prefer the View of Shadi Lal, C. J., in the We have already recommended the accept- ance of tie doctrine of unjust enrichment5. According to that doctrine, the obligation to restore an unjust beneﬁt should not depend upon the mere accident of a person coming before the Court as a plaintiff or defendant. We also agree with the View that restoration of status quo amte would not amount to the enforcement of the void contract against the defendant. The principle applicable to a minor will also apply to the case of a person of unsound mind.

We recommend, therefore, that a sub-section should be included in the new provision suggested by us' to the effect that when a defendant successfully resists a suit on the ground that the contract is void, owing to his incapacity at the time of the contract, .he must restore any beneﬁt, whether proprietary or monetary, which he has actually received under. the contract. But no question of liability to make any compensation, would arise in such a case.

91. We are of the opinion. that in view«of the devel>op+ ment of this highly eiﬁcacious remedy both in England and in the U.S.A., the scope of section 42 of our Act requires' to be enlarged. The increasing importance of this remedy' I. A;_udhz}z v. Chandan, A.I.R. I937 A11. 610 (618) F.B<.

2. Ajudhza v. Chandan, A.I.R. 1937 All. 610 (617) F'.B.,

3. Lutcharao v. Bhimayy_a, A.I.R. (1956) Andhra I82 (187).

4, Khan Gul v. Lakha Smgh, A.I.R. 1928 Lab. 609 FB».

5. Vzde pp. 7-9 of our Report on the Limitation Act [Third Report of the Law Commission].

6. S. 36 of App. I. 47 in modern times is best expressed in the following words of Prof. Jennings.' "The declaratory judgment is the symbol of twentieth century conception of law"'.

92. The ﬁrst point on which our law differs from the present--day English and American law is that a mere declaration is not available where further relief is not asked for, the plaintiﬁ' being able to claim it.

In England 0' 25, r.5 of the R.S.C. provides----

"No action or proceeding shall be open to objection, on the ground that a merely declaratory judg- ment or order is sought thereby, and the Court may make binding declarations of right whether any consequential relief is or could be claimed, or not."

Similarly, the Federal Act and the Uniform Declaratory ' Judgments law in the U.S.A. empower courts to 'declare rights, status and other legal relations, whether or not further relief is or could be claimed.

In the U.S.A., the provision relating to further relief is an enabling provision". It is left to the option of the plaintiff whether he should ask for further relief in the declaratory suit itself or reserve it for a separate action.

As has been observed-by American writers a ssuimple declanitoryi decree without 'furthe--r're1ief, where it has «to i be sought for, is not necessarily useless, for, ."this=r possi-I bility of further relief gives, in practice, an immediate coercive effect to the declaration itself''''. If the defendant voluntarily complies with the declaratory decree,-yby» giv-; ing up his unlawful interest, the partiesgneed notincugr furtlter. expense in litigation concerning consequeyntia1_.;re-. lief. This wou1d.particularly be- the case where the. defend»:

ant is a responsible person or some public body or the State. itself. In such cases. it can hardly be presumed that the defendant would not set matters right as soonas a declaration is made by the Court and that some coercive decree from the Court shouldstill be necessary'.

I. Iermlngs, Declaratory Judgments against Public Authorities, (I932) 41 Yale Law Journal, p. 407 (416). I

2. 62 Harvard Law Review, p. 826.

3. Ibid.. PD-AZ88, 789. _

4. (I955) 18 odern Law Review, p. 138.

But the Proviso to section 42 of our Act expressly prohibits such a decree where the plaintiff, being able to seek further relief, 'has omitted to do so.

Itis to be noted that the Proviso marks a retrograde step in the development of our law, for, at a very early stage, it had been provided in section 29 of Act VI of 1854 and, then, in section 15 of the Code of Civil Procedure of 1859 that-

"No suit shall be open to objection on the ground that a merely declaratory decree or order is sought thereby and it shall be lawful for the civil courts to make binding declarations of right without granting consequential relie ."

The Proviso was introduced by the Speciﬁc Relief Act with the object of preventing multiplicity of proceedings'. The Proviso has, however, given rise to a mass of case-law M as to What is 'further relief'? and whether 'further relief' A is such relief as could be sought for in the suit in which or in the court before which the declaration is sought. It leads to injustice in many cases and it only results in an addition to the revenue to a certain extent.

We cannot, however, adopt the American provisions in their entirety by reason of the fact that, we have, in our Civil Procedure Code, a provision in Order II, r. 2, which is salutary and which has been accepted in our country, without any criticism, for a fairly long time. Sub-clause (3) -of that rule provides that if a person is entitled to more than one relieﬁ in respect of the same cause of action, he may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for any of such reliefs, he shall not afterwards sue for the relief so omitted. Hence, iii the plaintiff sues merely for a declaration in respect of a present right and omits other reliefs to which he is entitled in respect of the same cause of action, he will be debarred from suing ﬁor 'it. The expression "able to seek" in the Proviso to section 42 has however a larger import and includes not only the reliefs which arise out of the same cause of action but also those which would follow from the declaration sought by the plaintiﬂf. In other

1. Kombi v. Aundz',(I89o) 13 Mad. 75, per Muthuswami Iyer J. at. p 78.

2. In some cases (e.g., Midnapore Zemindary Co. Ltd. v. Secretary 0 State, (1917) 44 Cal. a52,it has been held that a second declaration asked on t e basis of the ﬁrst declaration was a further relief (contra Tewary v. Bhupat,(r9I9) so I.C 298 Pat,).

words, the 'further relief' referred to in the Proviso to section 42 includes "such relief as he would be in a position to claim from the defendant in an ordinary suit 'by virtue of /the title which he seeks to establish and of which he prays for a declaration'?

Our intention is not to affect the principle of Order II, r. 2 of the Code in cases where it is properly attracted except as regards suits for declaration as to the validity or the invalidity of statutes.

This object will be achieved if we omit the Proviso to section 42 and make the ﬁrst paragraph of the section subject to the provisions of Order II, r. 2.

93. Under the existing law, a declaratory decree can be obtained, apart from cases involving a legal character, only in respect of a proprietary right. But there is no""' reason, except an apprehension as to multiplicity of decla- ratory suits, why this beneﬁcial remedy should not extend to all legal rights. ' In the United States, both in the Federal and Uniform laws, the word "right" alone is used, so that a party may obtain a declaration as to any legal rights which, of course, mean justiciable rights2. The word 'right' has been inter- preted to include 'liability' also, so that actions have been entertained against the Government a and other public bodies, to determine their liability', duty or power'. Right also includes immunity, e.g., that a statute is not applicable to the plaintiff'. Since the word 'right' is not conﬁned to proprietary right, the Courts have had no difﬁculty in making a declaration as to a contractual right5 or a right to practise a profession or the like".

_ On the other hand, the ﬁrst paragraph of section 42 of the Speciﬁc Relief Act speaks only of a 'right as to any property', there has been a prolonged controversy as to whether section 42 is exhaustive or declaratory actions lie in cases not covered by it, and whether aniypparticular right is a right as to propertj or not. Declarations under I. Abdulkadar v. Mahomed, (18927 :5 Mad. 15 at p. 18, 2;; A6.v2l;§va;z;tie1I')-v.6g'9e'rtnessee Valley Authority, 297 U.S. 288 (325); 80

3. Cf. 62 Harvard Law Review, p 875-6.

4. Ibid., p. 873.

5. Ibid., pp. 848-9.

-section -42 have been refused in regard to pecuniary' and 'contractual rights'? V In our view, if the relief is extended to legal rights of all kinds, it might, instead of multiplying litigation, lead to its reduction. Doubtless, a large number of persons would give up a contest as soon as the dispute as to the 'existence of the right is settled by a Court of law. More- over, certainty and security' with respect to ordinary legal rights are as important as in the case of proprietary rights. The purpose of laws similar to section 42 is, as the Uniform Declaratory Judgments Act puts it, to afford relief' from uncertainty and insecurity with respect to rights.

We, therefore, recommend that the word 'as to any property' in the ﬁrst paragraph of section 42 be omitted.

94. Section 42 is also deﬁcient in its omission to» make " 'any express provision for a declaration as to the constitu-

tionality of a law.

Under the Constitution, the Supreme Court-has decreed a declaratory suit on appeal3 and declared the impugned law to be unconstitutional. The basis of the declaratory action was. of course, not determined in this case, but since the Court held that the plaintiff's fundamental right under Article 31 had been violated, the suit fell clearly the language of section 42 because a"right asto property' had been denied. The Court observed' that only ' a person "whose own right or interest" had been violated or-threatenedicould impugn the law. = Gnl-yriﬂeiple», there is no reason why a person whose fighfésfaréisaffected or likely to be affected by an unconsti- tutional statute or bye-law should not be entitled ito-aobtaih "a declaration from the Court that it is invalid."Even under the existing law, it has been held5 that when a §person's rights .are affected by an ultra vires governmental act; he need not ask for any relief other than a declarationythat the executive act or order is null andfvoid. The tt'St;;te being the deiiendant, it is presumed that once the order is declared null and void, the plaintiffs rights will be restored. We think this principle should apply with "a

1. Gopaldas v. -Mul Raj, A.I.R. 1937 Lab. 389.

2. Ramakrishna v. Narayana, (I914) 39 Mad.8o.

3. Dwarkadas V. Shalapur Spinning C0,, (1954) S.CR . . 674. V

4. Dwarleadas v. Sholapur S inning Co.(I954) S.C.R. 674 (721,-2). _

5. Fischer v. Secy. of State, 1898) 22 Mad, 27o P.C._ i 2 51 greater force where the law under which the executive has purported to act, is itself unconstitutional and void. Thus, if an individual's possession has been disturbed under an unconstitutional statute, he may ask for a declaration that the statute is invalid and has not affected his right, Without speciﬁcally' asking for the restoration of possession.

We propose to insert a sub-section. in section 42 embody- ing the foregoing principle. We want to make it clear that a plaintiff who' seeks to have a law declared invalid need not seek any further relief than that the law is in- valid and that his right is not affected by it.

In order to prevent frivolous actions, we have provided that no suit for declaring the constitutionality of a law will lie unless the plaintiffs right or legal character which depends, on the validity or invalidity of such law has been' invaded or threatened to be invaded by the defendant.

95.. No change is necessary in section 43.

96. The mode and effect of appointment of a Receiver, his rights, duties, powers and liabilities are regulated by 0'40, rr. 1-5 of the C.P. Code. While Order 40, r. 1 of the Code provides for appointment of a Receiver both before and after the decree, section 44 of the Speciﬁc Relief Act deals only with the appointment of a Receiver before decree. 'C \ We are of the view that the section serves no useful purpose and, therefore, recommend its omission.

97. Chapter VIII (sections 45-51) provides for an order in the nature of mandamus. In view of Art. 226 of the Constitution, there would appear to be no need for retain- ing this Chapter. The scope of section 45 of theAct is narrower than that of Art. 226. In fact, clauses (f) and (8') of the Proviso to section 45 are inconsistent 'with Art. 226 and section 50 which was substituted by the Adaptation Order, 1950, practically renders these clauses nugatory.

It was urged that while evidence can be taken a pro- ceeding under section 45, the High Courts while exercising jurisdiction under Art. 226 are generally averse to investi- gating disputed facts by taking evidence. But there is nothing in Art. 226 to prevent their doing so. . In fact, we ﬁnd that just as the Rules framed under section 45 confer discretionary power upon the High Court to» take evidence, Sec. 43.

Sec. 44.

SGCS. 45-SI.

Secs. 52-53.

Sec. 54.

Cl. ((1).

'Sec. SSJ 52 so the Rules framed under Art.

Courts, such as those of Orissa, Mysore, Madhya Pradesh, Allahabad, Rajasthan, Bombay and Assam, confer similar discretionary power on the court to take evidence, oral or documentary. For instance, Rule 7 of the Rules framed by the Orissa High Court says---

226 by a number of High "All questions arising for determination under this chapter shall ordinarily be decided upon aﬁidavits, but the Court may direct that such questions as it may consider necessary be decided on such other evidence as it may deem ﬁt. Where the Court orders that certain matters in controversy between the parties shall be decided on such evidence, the procedure prescribed in the Code of Civil Procedure, 1908, for the trial of suits shall, so far as applicable, be followed."

We recommend that sections 45-51 be omitted, and questions such as that of taking evidence, should be left to the rule-making power of the High Courts, and that Rules similar to the aforesaid Rule of the Orissa High Court may be framed by those High Courts which have not made similar rules.

98; No change is necessary in sections 52 and 53.

99. The use of the word 'applicant' in the ﬁrst para- graph of section 54 is not appropriate, for, a perpetual injunction cannot be had upon an application as distin- guished from a suit. Later in the section, the word 'plaintiff' is used. Accordingly, the word 'applicant' in the section should be replaced by the word 'plaintiﬁ'-

l00. Clause (d) of section 544should be_omitted for the reasons for which we have recommended the omission of clause (d) of section 12 [Para 22, a'nte.].

101. No change is considered necessary in section 55.

102. In England, it is well-settled that since the passing of the Judicature Act, 1873, the High Court can, in any action for injunction, exercise its discretion to award damages either in addition to, or in substitution for, an injunction, whether or 'ot damages have also been speci-

ﬁcally claimed'.

._..__._____.______._.____

1. Vide I-Ia1sbury's Laws of England, second Edition, Vol. 18, Para. 33, WW 23- .

.._ , ----- , , _ K .

The same view has been taken in India' even though the principle adopted in section 19 was not extended by the framers of the Act to an action for an injunction.

In the circumstances, it is advi.sable to make a speciﬁc provision in the Act for this purpose. We recommend that a new provision on the lines of section 19 of the Act be added, to cover cases arising under sections 54 and 55 of the Speciﬁc Relief Act.

103. The expression used in clauses (a), (b) and (e) of section 56 is "to stay" "proceedings". This has led to S°°- 55- a controversy as to whether an injunction can be directed to the Court itself before which the proceeding is pending. We agree with the view taken by' the Patna High Courtz, C15' @'(b) that an injunction is a remedy in personam which is directed against the litigant and not against the Court.

We recommend that suitable changes be made in clauses (a), (b) and (e) of section 56, to remove doubts on this point.

104. Clause (d) may be omitted. The ﬁrst part of the Cl.(d). clause, referring to any Government department in India, is inconsistent with the principle embodied in the second Proviso to Article 361(1) of our Constitution. The second part is unnecessary because the immunity of a foreign sovereign in respect of his sovereign acts is Well accepted-

105. No alteration is necessary in the remaining clauses of section 56, except verbal changes.

106. It has been suggested to us that section 57, which see, 57, is based on the "decision in Lumley v. Wagner', requires to be modiﬁed in View of the subsequent decisions in England.

Upon a careful examination of the authorities, however, we ﬁnd that the actual decision in that case has not been the subject of adverse comment in the later case. What has been objected to is the extension of the principle involved in that case.

It is to be noted that in Lumley's case', there was, in fact, an express negative covenant not to sing at p

1. Kaliandas v. A.I.R. 1954 Sau. I39 ;Callianjz' Hiralal v. Nam"; 19 Born; 764 ;Kalliadas v. Tulsi, 23 Born. 786.

2. Rameshwar v. Baldeo, A.l'.R. I938 Pat. 606.

3. (1852) 91 R. R. 193 : 42 E. R. 687.

4. Lumley v. Wagner, (1852) 91 R. R. 1935 42 ER. 687.

"we 54 any other theatre; and so far as express negative coven- ants are concerned, there is no difference of opinion that the Court will, as a rule enforce them by injunction} The controversy' has arisen on the question whether a negative covenant should, in any circumstances, be inferred from an affirmative agreement. While granting the injunction in Lumley's casez, Lord St. Leonards suggested that a negative covenant not to sing elsewhere would have been implied, in the circumstances of the case, even had there been no such express covenant:

" .... ..the engagement to perform. . . .at one theatre must necessarily exclude the right to perform at the same time at another theatre ........ ...I am of opinion that if she had attempted, even in the absence of any negative stipulation, to perform at another theatre, she would have broken the spirit and true meaning of the contract as much as she would now do with reference_.to the contract into which she had actually entered".

The above observation was, followed in subsequent cases as implying negative covenants liberally almost in every case and in Montague v. Flockton', Malins V. C. dbserved: "A negative covenant is as necessarily implied as if it had been plainly expressed".

The decision in Lumley v. Wagner' did not lay down that a negative covenant must be implied in every case, of an alﬁrmative covenant. Against this wide extension of the doctrine laid down in Lumley's case protests were raised in later cases like Wolverhampton 8: Walsall Rly. Co. v. L. &N.W. Rly. Co.' and Whitwood Chemical Co. v. Hardman'. In the former case, Lord Selbourne laid down the modern rule that whether a negative covenant ﬁt to be enforced by an injunction would be implied in a given case was a question of substance and not of form. The later case of Mortimer v. Beckett' says that an injunction will not be granted unless the negative stipulation is . Kerr on Iniunctions, 6th Ed., DD. 422-3.

. Lumley v. Wagner. (1852) 91 R.R. I93 ; 42 E.R. 687, 693. . Montague v. Flockton, (1873) 16 Eq. I89 ; zor.

. (1873) I6 Eq. 4z3.

. (1.891) 2 Ch. 416.

Jl-Kb)"-a

5. (1920) I Ch. 571.

independent of the positive part. The present position, in short, is that the doctrine of implied covenants Wlll be applied with scrupulous care'.

But section 57 of the Act does not in any way suggest that a negative covenant would be inferred from every affirmative covenant. It simply says that a negative agreement may be either express or implied. The circum- stances in which such an implication should be made is left entirely to the discretion of the Court. Banerji"

rightly observes:

"As the jurisdiction is conferred by Statute in India, there is no ground to treat it as exceptional or anomalous. It is not a technical or artiﬁcial rule which the Indian Statute Book professes to enforce, it looks to the substance and not to the form of the contract ................... ..".

We do not wish to take away this discretion of the Court, and any misunderstanding that might have arisen by reason of some of the illustrations to the section will now disappear as we have recommended their omis- sion. There may be cases where a negative covenant can be properly implied and in such cases, it should not be open to the defendant, to go back on his undertaking to the plaintiff. In the words of Lord St. Leonards'', in such cases the Court should operate "to bind men's con- sciences, as far as they can be bound, to a true and literal performance of their agreements; and it will not suffer them to depart from their contracts at their plea- sure. . . . .".

We are also in agreement with Maclean, C. J., of the Calcutta High Court' that if upon a consideration of all the circumstances, the Court ﬁnds that an injunction should issue. it is no argument to say that the defendant would then starve; As Maclean, C. J., put it. "he (the defendant) ought to have thought of that before he deliberately broke his contract". ' ' In our opinion. the section requires no change.

107. With a view to presenting a clear picture of the recommendations made by us in this Report we have

1. Halsbury. 2nd Ed., Vol. 18, para. 87.

2. Law of Speciﬁc Relief, 2nd Ed.. p. 626.

3. Lumlev v. Wagner, (1852) 91 R. R. 193; 42 E.R. 687 at 693,

4. Burn E' Co. v. McDonald, (1908) 36 Cal. 354 (365).

made alterations giving effect to them in the text of the existing Act as shown in Appendix 1.

Appendix II contains two comparative Tab1es~-- Table A showing the sections in the existing Act with the corresponding sections in Appendix I, and Table B showing the sections in Appendix I and the corresponding sections in the existiong Act.

Appendix III contains the suggestions made by us in respect of other Acts.

M. C. SETALVAD.

(Chairman).

M. C. CHAGLA, K. N. WANCHOO, P. SATYANARAYANA RAO, N. C. SEN GUPTA*, V. K. T. CHARI, ' ~ D. NARASA RAJU, S. M. SIKRI, G. S. PATHAK, G. N. JOSHI, N. A. PALKHIVALA.

(Members).

K. SRINIVASAN, DURGA DAS BASU, Joint Secretaries.

NEW DELHI:

July 19, 1958.

%i3}}' 'sE}1"Gu§I;"ﬁ§§ E§.«;§{§d"{1§é"}}éi$S;FC§GS}éé1 'iitgftiié Note appended at the end.

APPENDIX I Proposals as inserted in the body of the existing Act. (This is, however, not to be treated as a"Draft Bill).

[Corresponding sections of the existing Act are noted in the margin, and additions to the provisions of the existing Act are shown in the text in italics, wherever possible] THE SPECIFIC RELIEF ACT, 19 ...... .. A PART 1 PRELIMINARY

1. Short title and extent.

(1) This Act may be called the Speciﬁc Relief Act, ---- [sec_ 1,] (2) It extends to the Whole of India except the State of J arnmu and Kashmir .........................

2. Deﬁnitions.

In this Act, unless the context otherwise requires---- [Sec. 3.]

(a) "obligation" includes every duty enforceable by law;

(b) "settlement" means any instrument (other than a will or codicil as deﬁned by' the Indian Succes- sion Act, 1925). whereby the destination or 39 of 1925. devolution of successive interests in movable or immovable property is disposed of or is agreed to be disposed of; 4

(c) "trust" includes a trust as deﬁned in section 3 of the Indian Trusts Act, 1882, and an obligation 20*" 1332- in the nature of a trust arising under Chapter IX of 'that Act:

(d) "trustee" includes every person holding property in trust; and

(e) all other words and expressions used but not defined in this Act, and deﬁned in the Indian 57 9 of 1872].

[Sec. 4] (sec. 4 can [Sec. 4 (c)] 16 of 1908.

[Scc. 7.] [Sec. 8.] 5 of 1908 [Sec. 10] 5 of I508 [sec. '11.] 58 Contract Act. 1872, have the meanings respec- tively assigned to them in that Act.

3. Savings.

Except as otherwise expressly provided, nothing in this Act shall be deemed----

* * *

(a) to deprive any person of any right to relief, other than speciﬁc performance, which he may have under any contract; or

(b) to aifect the operation of the Indian Registration Act, 1908, on documents.

4. Speciﬁc relief granted only to enforce civil rights.

Speciﬁc relief under this Act can be granted only for the enforcement of individual civil rights and not for the mere purpose of enforcing a penal law.

PART II SPECIFIC RELIEF CHAPTER I. RECOVERING POSSESSION OF PROPERTY.

5. Recovery of speciﬁc immovable property.

A person entitled to the possession of speciﬁc immovable property may recover it in the manner provided by the Code of Civil Procedure, 1908.

6. Recovery of secicﬁc movable property.

A person entitled to the possession of speciﬁc movable property may recover the same in the manner provided by the Code of Civil Procedure, 1908.

Explanation 1.--A trustee may sue under this section for the possession of property to the beneﬁcial interest in which the person for whom he is trustee is entitled.

Explanation 2.----A special or temporary right to the present possession of property is suﬁicient to support a suit under this section. -

7. Liability of person in possession, not as owner, to deliver to person entitled to immediate possession.

Any person having the possession or control of a parti- cular article oﬂ movable property. of which he is not the 59 owner, may be compelled speciﬁcally to deliver it to the person entitled to its immediate possession, in any of the following cases:-----

(a) when the thing claimed is held by the defendant as the agent or trustee of the plaintiff;

(b) when compensation in money would not afford the plaintiff adequate relief for the loss of the thing claimed;

(cl) when the possession oil the thing claimed has been wrongfully transferred from the plaintiff.

Explanation.----The burden of proving that the case does not fall under clause (b) or (c) shall be on the defendant.

CHAPTER II.

SPECIFIC PERFORMANCE OF CONTRACTS _8. Defence relating to the existence or validity of the [New] contract.

All defences open under the -law relating to contracts to a person contesting the existence, validity or enforce- ability of a contract shall be open to him under this Act.

9. Jurisdiction to grant speciﬁc performance. [Sec. :2.) Except as otherwise provided in this Chapter, the speciﬁc performance of any contract may in the dis-

cretion of the court be enforced---- it *' I' it

(a) When there exists no standard for ascertaining the actual damage caused by non-performancelsec-13(5). of the act agreed to be done; or

(b) when the act agreed to be done is such that [see 1z(c)_ 4 pecuniary compensation for its non-perfor-

mance would not afford adequate relief. =0' * II' #

10. Presumption regarding contracts for transfer of im- [Sec. :2, movable property. E*9''] / Until the contrary is proved, the court shall presume that the breach of a contract to transfer immovable pro-

perty cannot be adequately relieved by compensation in money . . . . . . . . . . . . . . . . . . ..

11. Preswmption regarding contracts for transfer of mov- gee. 12. able property. *9"

Except in the following cases, the court shall presume that the 'breach of a contract to transfer.... ..

movable property can be adequately relieved by competi- sation in money..............:--

[New] (a) where the property is not an ordinary article of commerce and is unique or of special value or interest to the plaintiff;

(b) where the property is held by the defendant as agent or trustee of the plaintiff;

(c) where the property consists of goods not easily procurable in the market.

12. Contracts connected with trust.

(1) Except as otherwise provided in this Act, speciﬁc performance of a contract may in the discretion of the [SCC_ 12 (a)_] court be enforced when the act agreed to be done is in the performance, wholly or partly, of a trust.

[sec 21 (em (2) A contract made by a trustee either in excess of his powers or in breach of his trust ' cannot be speciﬁcally enforced.

[s¢c,§\""I3. Contracts not speciﬁcally enforceable, (1) The following contracts cannot be speciﬁcally enforced:--

[scan (am (a) A contract for the nonpperformance of which com- pensation in money is an adequate relief;

A Notwithstanding anything contained in this clause, the court may enforce specific performance: of a contract in the following cases:---- i ' - ~ ' ' (i) where the money was advanced in whole or in part on a promise to give security, and the lender has advanced the whole of the loan or has advanced part of it and is ready and willing to advance the balance, and sues to obtain speciﬁc performance of the contract, the defen-V dant having failed to repay the loan;

(ii) where it is a contract with a companyto take up and pay for any debentures of the company.

[Sea ,,x.(b),] (b) a contract which runs 'into such minute or » V numerous details, or which is so dependent on the personal L qualiﬁcations or volition of the parties, or otherwise from its nature, is such, that the court cannot enforce speciﬁc performance of its material terms; 5 61

(c) a contract which is in its nature determinable: [Sec-21(1)] ' Notwithstanding anything contained in this clause, the court may-

, (i) under the execution of a formal deed of partner'- ' ship where the parties have commenced to carry on the business of the partnership;

(ii) enforce the specific performance of a contract for the purchase Of the share of a partner; * * * 1!

(d) a contract the performance of which involves the performance of continuous acts which the Court cannot [S°°'2' (gm supervise: -

Notwithstanding anything" contained in this clause, the court may enforce speciﬁc performance of a contract to build or execute other work on land, provided the fol- lowing conditions are fulfilled----

(i) the building or work to be executed under the contract is deﬁned by the contract with parti-

culars sufficiently precise to enable the court to | determine the exact nature of the building or- work; A \\

(ii) the plaintiﬁ has a substantial interest in the performance of the contract of such a nature that compensation in money for non-perform- ance thereof is not an adequate relief; and

(iii) the defendant has under the contract obtained possession, in whole or in part, of the land on which the building or work is to be executed.

"(2) Save as provided by the Arbitration Act, 1940, no contract to refer present or future diiferences to arbitra-1[,§:t°',,2,I,;,'.

tion shall be speciﬁcally enforced, but if any person who step I has made such a contract (other than an arbitration [10 0': 1940'] agreement to which the provision of the said Act apply) and has refused to perform it sues in respect oﬁ any . subject" which he has contracted to refer, the existence of such contract shall bar the suit.

14. Speciﬁc performance of part of contract. [Sm In (1) The court shall not direct the speciﬁc performance of a part of a contract except as provided by this section.

(2) Where a party to a contract is unable to perform [s¢¢, 14;] the whole of his part of it, but the part which must be left [Scc. 15.] [Sec. 16] '[ Sec. 13].

44 62 unperformed bears only a small proportion to the whole in value, and admits of compensation in money, the court may, at the suit of either party, direct the speciﬁc per- formance of so much' of the contract as can be per' formed, and award compensation in money for the deﬁciency.

(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed-

(a) though admitting of compensation in money, forms a considerable portion of the whole, or

(b) does not admit of compensation in money, he is not entitled to obtain a decree for speciﬁc performance. But the court may, at the suit of the other party, direct the party in default to perform speciﬁcally so much 0." his part of the contract as he' can perform-

(i) in the case 'referred to in clause (a) above, provided the plaintiff pays or has paid the consideration promised by him as proportiona-

~_2$, tely abated and also relinquishes all claim to further performance and all right to compen- . sation either for the deﬁciency ortfor the loss or damage sustained by him throu h the default ' of the defendant; -

(ii) in the case referred to in clause (b) above, provided the plaintiﬁ' pays or has paid the consi- deration promised by him without any abate- ment and also relinquishes all claim to further performance and all right to compensation as speciﬁed in sub-clause (i).

(4) When a part of a contract which, taken by itself, can and ought to be speciﬁcally performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be speciﬁcally performed, the court may direct speciﬁc performance of the former part.

Exp.lanation.--For the purposes of this section, a party to a contract shall be deemed to be unable to perform the whole of his part of it if a portion of its subject matter, existing at the date of the contract, has ceased to exist at the time of the performance.

15. Purchaser's rights against vendor with no title or imperfect title.

Where a person contracts to sell or let certain [3°°- 133 immovable property, having no title or only an imperfect title thereto, the purchaser or lessee (subject to the other provisions of this Chapter) has the following rights:---

(a) if the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest;

(b) where the concurrence of other persons is necessary to val'idate the title and they are bound to concur at the vendor's or lessor's request, the purchaser or lessee may compel him to procure such concurrence, and where a conveyance by other persons is necessary to validate the title and they are bound to convey f,_V\ at the vendor's or lessor's request, the purchaser ' or lessee may compel the vendor or lessor to procure such conveyance by such proceedings as may be necessary;

(c) where the vendor professes to sell unincum- bered; property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a valid conveyance from the mortgagee;

l (d) where the vendor 'or lessor sues for speciﬁc performance of the contract, and the suit is dismissed on the ground of his imperfect title or want of title, the defendant has a right to a return of his deposit (if any) with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and costs on the interest of the vendor or lessor in the property agreed to be sold or let.

[Sec 25] 16. Person contracting to sell without title not entitled to specific performance. ' A c-ontract for the sale or letting of........immovable property cannot be speciﬁcally enforced in favour of a vendor or 1essor--

(a) who, knowing himself not to have any title to the property, has contracted to sell or let the same;

(b) who, though he entered into the contract believing that he had a good title to the pro- perty, cannot at the time ﬁxed by the parties or by the court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt.

* * =3' at [New] 17. Application of certain sections to contracts for sale or hire of movable property.

The provisions of sections 15 and 16 as to contracts for the sale or letting of immovable property shall, mutatis _mutandis, apply to contracts for the sale or hire of mov- Z'/x able property.

[Sec-I9] 18. Power to award compensation in certain cases.

(1) Where any person suing for the specific perform- ance of a contract . . . . . . . . . . ..also claims compensation for its breach, either in addition to or in substitution for such performance, the court, in determining such claim, shall be guided by the following principles:---

(a) if .... ..the court decides that speciﬁc performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant' and that the plaintiif is entitled to compensation for that breach, it shall award him such compensation accordingly;

(b) if ....... ..the court decides that speciﬁc perform- ance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the con-

' tract should also be made to the plaintiff, it shall award him such compensation accordingly.

(2) Compensation for the breach of a contract, in addition to or in substitution for speciﬁc performance of the contract, shall not be awarded unless it has been 85 specifically asked for; but the court shall at any stage grant leave to amend the plaint for including a prayer for such compensation onisuch terms as may be just.

'(3) Compensation awarded under this section may be assessed according to the principles laid down in section 73 of the Indian Contract Act, 1872, and under such proce- dure as the court may d-irect.

Explanation.--Tke circumstance that the contract has become incapable of speciﬁc performance does not pre- clude the court from exercising the jurisdiction conferred' by this section.

19. Power to grant relief for possession, partition, refund of earnest money etc. (1) Notwithstanding anything to the contrary con- tained in the Code of Civil Procedure, 1908, any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for--

9 of 1872.

[New] 5 of 1908.

(a) possession, or partition and separate possessionvv/~\ in addition to such performance; or

(b) any other relief to which he may be entitled, including refund of earnest money or deposit, in case his claim for speciﬁc performance is refused.

(2) If in any such suit the court decrees speciﬁc per- formance and ﬁnds that the plaintiff is entitled to any of i the reliefs mentioned in clause (a) of sub-section (1), it may also award him the same accordingly.

(3) If in any such suit the court decides that speciﬁc performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant and that the plaintiff is entitled to any of the reliefs mentioned in clause (b) of sub-section (1), it "shall award him the same accorclingly. .

(4) Relief under clause (a) or (b)' of sub-section (1) shall not be granted unless it has been specifically claimed: but the court shall at any stage grant leave to amend the plaint for including a prayer for such relief on such terms as may be just.

(5) The power to award relief under clause (b) of sub- section (1) is without prejudice to the power to award compensation under section 18. c ' V -' [Sec. 20] [Sec. 22] [Sec. 22-1] [Scc. 32-II] 33

20. Liquidation of damages not a bar to speciﬁc perform-

ance. ' A contract, otherwise proper to be speciﬁcally enforced, may be so enforced, though a sum be named in it as the amount to be paid in case of its breach, and the party in default is willing to pay the same, if the court ﬁnds from the terms of the contract and the attending circumstances that it was the "intention of the parties that the sum was named only to secure performance of the contract and not as giving the party in default an option to pay money in lieu of performance:

Provided that the court, when enforcing speciﬁc per- formance, shall not also decree payment of the sum so named in the contract. -

21. Discretion as to decreeing specific performance.

(1) The jurisdiction to decree speciﬁc perforance is dis- cretionary and thecourt is not bound to grant such relief r/nerelyi because it-is lawful to do so; but the discretion of "the'court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.

(2) The following are cases in which the court may properly' exercise a discretion not to decree speciﬁc per-

formance :--

(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or other circumstances under which the contract was made are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or ' where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;

(«b) or

(c) where the defendant entered into the contract under circumstances which, though not. render- ing the contract voidable, make it inequitable to enforce speciﬁc performance. ' Explanation 1.-The. question of hardship is to be determined with reference to , the circumstances existing n 1 at the time of the contract, except in the case of hardship which has resulted from the subsequent acts of the plaintiﬁ.

Explanation 2.----Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defen-i dant or improvident in nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b)-.

(3) The following is a casein which the court may [Sec.22-III] properly exercise a discretion to decree speciﬁc perform- ance:----

Where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of speciﬁc performance.

(4) The court shall not refuse to any party speciﬁc per- [New] formance of a contract merely on the ground 'that the contract is not enforceable at the instance of the ' other party.

22.~Who may obtain speciﬁczperformance. ' l * Except as' otherwise 'provided "by this Chapter, the [Sea 23 (8)) I speciﬁc' perform'ance'of iaicontract may be o'b'ta'i1'1'ed--

(a) by any party" thereto; . 'L f i '(b) by the-representative-in-interest, or the pricipal, of any party thereto; '-

Provided that; where the learning,-skill, solvency or any [Sec. 23 (b)] V personal quality of such party is a miaterialringredient in _ the contract or where the contract provides that the interest shall not be assigned, his representative-im interest or his" principal shall notpgbe entitled to speciﬁc performance of the contract, unless such party has already performed his part of the contract' or . the performance thereof by his representative--in-interestA or principal has already been accepted by the other party;

(c) subject to the provisions of the, Indian Contract [Sec. 23 (c)l Act, 1872, by a person who, though nota Vpafty"9 °f1373- i to/Athe contract, is entittedleiptafii l beneﬁtn there- ' under or has an interest their-ietn; . M to i * * o it o It

(d) when a......company has entered into a contract (Sec. 23 1. L and subsequently becomes amalgamated with another... .company, by the new company which arises out of such amalgamation;

[Sec 23 (h)] [Sec. 27 (a)] [ Sec. 27 (b)] [$cc. 27 (c)] (Sec. 27 (d)] [S€¢- 27 (¢)] [Sec. 24 (a)] l3¢°~ 14 (b)] 68

(e) when the promoters of a ...... .. company have, before its incorporation, entered into a contract for the purposes of the company, and such contract is warranted by the terms oi) the incor- poration, the company, provided the company has accepted the contract and communicated such acceptance to the other party to the contract.

23. Relief against parties and persons claiming under them by subsequent title.

Except as otherwise provided by this Chapter, speciﬁc performance of a contract may be enforced against-

(a) either party thereto;

(b) any other person claiming under him by a title; arising subsequently to the contract, except a transferee for value who has paid the considera- tion in good faith and without notice of the original contract; '

(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have- been displaced by the other party to the contract;

(cl) when a .... ..company has entered into a contract ' and subsequently becomes amalgamated with another. company, the new company whic arises out of such amalgamation; of

(e) when the promoters of a ........company have,"

' before its incorporation, entered into a contract L for the purposes of the company, and such con?"

tract is warranted by the terms of the incorpdrf-ta'-'l tion, the company, provided.;......the company' has accepted the "contract and rcommunicated"

such acceptance to the "other party to, the contract ........... ..; ' i " l l

24. Personal bars to the relief.

Speciﬁc performance of a contract cannot be enforced ' in favour of a person-- s «

(a) who would not be entitled to recover compensa- tion for its breach; i ' l

(b) who has become incapable of performing, or violates, any essential term of, the contract that V V3; "":_- ,,.-,5 . »¢---~«s«....s .,~. ..\.M ,.

on his part remains to be performed, or acts in fraud of the contract, or wilfubly acts at variance with or in subversion of the relation intended to be established by the contract;

(c) who fails to aver and prove that he has performed, [New] or has been ready and willing from the date of the contract till the hearing of the suit to perform, the essential terms of the contract to"

' be performed by him, except terms the perform-

ance of which has been waived by the defen- dant. "

E.7cplanation.--For the purposes of clause (c)--

(i) it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money, except when so directed by the court;

(ii) the plaintiff must aver performance of, or readi-

- e ness and willingness to perform, the contract t according to its true construction.

' .i 25: 'Non-enforcement except with variation} _ M Where a plaintiff seeks speciﬁc performance of a con- [Sec.26] * 'tract'in writing, to which the defendant sets up a variation, the plaintifflcannot obtain the performance sought, except gwithttliep variation, so set yup,_ in the Mzﬁollowing cases, namé1y.:,__ V * . ( p ) Sec. 26 (n) V (a) where by fraud, mistake of or;lmisrepresen- L (on tation the written contract of which perform- ' ance is sought is in its terms for eifect diiferent ' ' from whdtithe partiesi'ag'reed "to,'or"does not contain all the"ternis adreebl to between the i parties on the faith of" which the" defendant entered into the contract;-' 'W (»b) where. the object of the parties was to produce [Sec-26-'(did a certain legal result. which the contract a ' ' framed is not calculated to produce; ~ ' (C) where the parties have, subsequently to the [Sm 36 ")1 execution of the contract, varied its terms.

/ I "V ' 70

26. Rescission of contracts for sale or lease on failure of performance by plaintiﬂ'.

[Seuss (C), (1) Where a decree for speciﬁc performance of a con-

part] tract for the sale or lease of immovable property has been made, all subsequent proceedings hereafter mentioned in this section shall be taken only in the suit in which the decree is made, in the manner provided by the Code of 5of1958 Civil Procedure, 1908.

[Sec. 35 (c), (2) . ...Ifi the purchaser or lessee does not, within the pan] time allowed by the decree or extended by an order of the court made on the application of either party, pay the purchase-money or other sum which the c__ourt has ordered him to pay, the vendor or lessor may apply -to have the [s¢¢_ 35,3"; contract rescinded and ....... ..the court may, by order in 9"" the suit, ............. ..rescind the contract, either so far as regards the party in default or altogether, as the justice of the case may require.

(3) Where a contract is rescinded under sub-section (2), the court---- .

(Sec. 35, e (a) shall pass an order -directing: thevpurchaser or 2"' "'""] lessee,T:if<t-he; obtained possession of the pro- perty under the contract, to restore such posses- sion to the vender or lessor, and may also -pass an order for payment of the rents or proﬁts which have accrued in respectjgof the property l l g from the date on which the"p6ssessio_n was "so, ' l V obtained by the purchaser or lessee until restora- ' tion of possession to the vendor or lessor,'-and

(b) may, if the justice of the -case so requires, direct the venaor or lessor to refund any sum paid by thevendee or lessee' as earnestmaney or deposit. [New] . (4) If the purchaser or lessee complies, within the time mentioned in ysub-sectifon, (g) with theitermsof the decree ?'€f€7'?'éd for therein, the comimay, by orderin the suit, made. on his application, award him such further relief as he may be entitled to,including,in,app;-op¢;§,afe cases,---

(a) execution of a proper conveyance or lease by the vendor or lessor; .

[New] (b) delivery of possession, or partitibn and separate ' possession, of the property onieiicecution of the conveyance or lease. ' --

(5) The costs of proceedings under this sectibn shall M be in the discretion of the court.

27. Bar of suit for breach after dismissal.

The dismissal of a suit for (speciﬁc performance of a[sec.29] contract or part thereof shall bar the plaintiff's right to sue for compesation for the breach of such contract or part, as the case may be, but shall not bar his right to sue for any other relief to which he may be entitled by reason of such breach.

28. Application of preceding provisions «to awards and testamentary directions to execute settlement-

The provisions of this Chapter as to contracts shall, [Sec. 30] mutatis mutandis, apply to awards to which the Arbitra- tion Act, 1940, does not apply and to directions in a wi11mofI94o, or codicil to execute a particular settlement.

CHAPTER III.

RECTIFICATION OF INSTRUMENTS.

29. When instruments may be.§rectiﬁed.

(1) When, through fraud or a mutual mistake of the [Sec. 31.] parties, a contract or other instrument inivirriting (not being the articles of association of a. (company to which thesCompa'nies Act, 1956, applies) does notﬁexpress their I°f '95'- real intention, then--,+ to .

(a) either party -or his . representative-in-interest may institute a suit to have the instrument rectified; or . I. a " g

(b) the plaintiﬂ may, in any. suit.5'in which any right (under the- instrumentiis in-issue, ask for rectification of the instrument; or

(c) a defendant in any suchsuit as -is referred to in clause (b) may, in addition to any other defence that he may put forth,'ask;' for rectifica- tion of the instrument 7 '- b (2) If, in any suit in which a contract or other instru- mentsis :sought«to;be--- rectified undercllause (a), (b) or

(c) of sub--section (1), the court' ﬁnds that thescontract or other instrument, through» fraudor nfiistakeiinisframing it, does not express the real intention of; the parties.) . . . . . . ., the court may in its discretion direct rectiﬁcation of the contract or other instrument so as to express that inten- tion, so far as this can be done, without prejudice to rights acquired by third persons in good faith and for value. V , .L..

/: __.u.a¢U~a.;»_ 72 (3) The court shall not, in any such suit, direct recti- fication of the contract or other instrument unless the same has been speciﬁcally asked for in the pleading of the party concerned; but the court shall at any stage grant leave to amend the pleading» by asking for rectifica- tion on such terms as may be just.

(4) A contract in writing may be ﬁrst rectiﬁed, and tken, if the plaintiff has so prayed in his plaint and the court thinks ﬁt, speciﬁcally enforced.

' CHAPTER IV.

RESCISSION or CONTRACTS.

30. When rescission may be adjudged.

[Sec. 34] S (1) Any person interested in a contract ....... ..may sue ([a)°€f,)3j5 to have it rescinded, and such rescission may, subject to the provisions of sub-section (2),, be adjudged by the court in any of the following cases, namely:---

(a) where the contract is voidable or terminable by the plaintiff; l

(b) where the contract is unlawful for causes not ,appa.rent.,on its face andthe defendant more to blame than the plaintiff. 4 [New] (2) ifhe gourt may refitse to rescind' the contract---

(a) where the plaintiff has, expressly or impliedly, ratiﬁed the contract;__ UH 3» (b) where, owing to the 'change "of circumstances which has taken place isincevthe making of the contract (not due to any actyof the defendant himself), the parties cannot, be substantially restored to the position in which they stood when the contract was made; ('

(c) where third parties have, during the subsis- tence of the contract, acquired rights in good faith withoutnotice and for value; or ' (d) where -only a part of the contract is sought to be rescinded and such part is not severable from the rest of the contrdct.

Explanation.--In this section, "contract" means a con-

tract in writing, except in the territories to which the Transfer of Property Act, 1882, extends for the time being.

(New) 4 of 1882.

» ' )(.>a« i§

31. Alternative prayer for rescission in a suit for speciﬁc performance.

A plaintiff instituting a suit for the speciﬁc perform- [Sec.3'/'J ance of a contract in writing may pray in the alternative that, if the contract cannot be speciﬁcally enforced, it may be rescinded and delivered up to be cancelled, and the court, if it refuses to enforce the contract speciﬁcally, may direct it to be rescinded and delivered. up accordingly.

32. The court may require a party rescinding to do equity.

On adjudging the rescission of a contract, the court [sea 33] may require the party to whom such relief is granted, if he has received any beneﬁt under the contract from the other party, to restore such beneﬁt, so far as may be, to that party and to make any compensation to him which justice may require.

CHAPTER V. CANCELLATION OF INSTRUMENTS

33. When cancellation may be ordered. , (1) Any person against whom a written instrument is [Sm 39)] void or Voidable, who has reasonable apprehension that such instrument, if left outstanding, xmay cause him serious injury, may sue to have it "adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled. M (2)'If the instrument has been "registered under the Indian"RE-gistration' Act, 1908, the éoui'l5'i§s1,1all alsoisend a ,5 of ,9°3_ copy of its qdecreeto the oﬁicer¢in"{vvhos'é'"oﬁice the instru- merit has been so reg'isté'red;i arid, such oﬁlc'er'§h'a'l1 note onifthe copy of the instrument conltaineldyin his Hdbiés ale' fact of its cancellation. /V' ""' i it '

34. What instruments may be partially cancelled. V {[Sec,4o] Where an instrument' is evidence of diiferentlriglrits or different obligations, the court ' may, in a3 proper case; "

cancel it in part and allow it toestandfor tlie resti: '

35. Power to require party H for whom instrument is' cancelled to make compensation. ' l ' ' ' On adjudging the cancellation of an instrument, the [Sec. 41]' I if i court may require the party to whom such, relief is [New] 9 of 1872.

[Sea 42] [ New] it granted, if he has received any beneﬁt under the instru- ment from the other party, to restore such benefit, so far as may be, to that party and to make any compensation to the other which justice may require.

36. Power to require defendant to restore benefit when instrument is void or voidable.

(1) Where a defendant successfully resists any suit on the ground that the instrument sought to be enforced against him in the suit is voiclable, the court may, if the defendant has received any beneﬁt under the instrument from the other party, require him to restore such beneﬁt, so far as may be, to that party, or to make compensation for it. , (2) Where a defendant successfully resists any suit on the ground that the agreement sought to be enforced against him in the suit is void by reason of his not having been competent to contract under section 11 of the Indian Contract Act, 1872, the court may, if the defendant has received any benefit under the agreement from the other party; require him to restore such benefit, so far as may be, to that party, to the extent to guihichg he or his estate has beneﬁtedthereby. ' V ' ' CHAPTER VI.

DECLAR./ATORY DECREES.

'37.' Discrétionttof 'court astto declaration ofstatusgwori' rights.

(1) Any person entitled to.any legal cl§5!¥§'°'FF3t" .°r"»""t right, . ...may institute : a A' Suit against~ 'person' or interested togideny, his title £0 Such character or right.

and the court may inits discretion make therein. a Adecla'-_ ration that he is so entitled; and thevplaintiﬁt in such _suit_ need not ask for any further relief, though hey is able to_ seek such relief. .

_Explanation,----Atrustiee of V property a "person tereystedi to deny" a title, adverse to the title of some one who is not in eicistencefand for'wlrom, if infexistence, he would be a trustee. g A L 1 (2) Without prejudice to [thef generality j, of the provi- sions of sub-section (1), any person entitled to any legal character" or right, the existence, extent or nature of which depends on' the validity or ini?alidity_'0f' a'ny"laut_ '

-.«:..... NH , i 'i5 may institute a suit against any person or authority (in- cluding, in appropriate cases, the Government) denying his title to such character or right or threatening to invade such right, for a declaration about the validity or iiwalia dity of the law and about his legal character or right without asking for any further relief; and the court may, in its discretion, make therein such a declaration.

Eacplanation.--In this sub-section, "law" includes an enactment, ordinance, regulation, order, by-law, rule, scheme, notiﬁcation or other instrument having or intend- ed to have the force of law in the whole or in any part of the territory of India.

(3) The provisions of sub-section (1) shall, but the [New] provisions of sub-section (2) shall not, be subject to those of Rule 2 of Order II of the First Schedule to the Code of Civil lirqcedure, 1908. 5 0' 19°?

38. Eifect of declaration.

A declaration made under this Chapter is binding [gm 433 only on the parties to the suit, persons claiming through them respectively, and, Where any of the parties are trustees, on the persons for whom, if in existence at the date of the declaration, such parties would be trustees.

CHAPTER VVII.

INJUNCTIONS GENERALLY.

39. Preventive relief how granted.

Preventive relief is granted at the discretion of the [Sec.5a§ court by injunction temporary or perpetual. '

40. Temporary injunction.

(1) Temporary injunctions are such as are to continue (Sec. 53] until a speciﬁed time, or until the further order of the court. They may be granted at any period of a suit, and are regulated by the Code of Civil Procedure, 1908.' sot' 1908 (2) A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act. which would be contrary to the rights of the plaintlﬁ. , (Sec. 54] [Get 551 [New] '76 'r"1"""< ssssn. . ~ . ..» . .

CHAPTER VIII.

PERPETUAL INJUNCTIONS.

41. Perpetual injunction when granted.

(1) Subject to the other provisions contained in, or referred to by, this Chapter, a perpetual injunction may be granted to prevent the breach of an obligation exist- ing in favour of the plaintiff, whether expressly or by implication.

(2) When such obligation arises from contract, the court shall be guided by the rules and provisions con- tained in Chapter II of this Part.

(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, namely:----

(a) where the defendant is a trustee of the property for the plaintiff;

(b) where there exists no standard for ascertaining tlte actual damage caused, or likely to be caused, by the invasion;

pensation would not afford adequate relief-, * It It

(d) where the injunction is necessary to prevent a multiplicity of judicial proceedings. Eacpianation.--For the purpose of this section a trade- mark is property.

42. Mandatory injunction.

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, tizeicourt may in' p . its discretion grant an injunc tion to prevent the breach complained of, and also to compel performance of the requisite acts._ I

43. Damages in lieu of or in addition to injunction.

(1) In any suit in which the court has jurisdiction to grant an injunction under section 41 or 42, the court may, if it thinks ﬁt, award damages to the plaintiﬂ' for any injury, either in addition to or in substitution for such injunction.

I ,..a.._-.....-.._w.._._.._w.._ ., -._._.,. _ 77 ._ .

(2) No damages shall be awarded under this section unless speciﬁcally asked for.

44. Injunction when refused.

An injunction cannot be grantedm

(a) to restrain persons from prosecuting a judicial lsecv S6) proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;

(b) to restrain persons from instituting or prosecut- ing proceedings in any other court not subordi- nate to that from which the injunction is sought;

* from if :0:

(d) to restrain persons from instituting or prosecut-

ing proceedings in any criminal matter;

(e) to prevent the breach of a contract the perfor- mance of which would not be speciﬁcally enforced;

the ground of nuisance, an act not reasonably clear that it will

(f) to prevent, on of which it is be a nuisance;

(g) to prevent a continuing breach in which the plaintiﬁ has acquiesced; -

(h) when equally efficacious relief can.§ . . . . . . be obtained by any other usual mode of pro- ceeding, except in case of breach of trust;

(i) when the conduct of the plaintiff or his agents has been such as to disentitle him to the assistance of the court; '

(j) where the plaintiﬁ has no personal interest in the matter.

45. Injunction to perform negative agreement.

Notwithstanding anything contained in section 44, 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 pre- clude it from granting an injunction to perform the

111.-d K4 clause (e) of [see'. 57] 7 78 negative agreement: provided that the plaintiff hes not V failed to perform the contract so far as it is binding on him.

PART III MISCELLANEOUS.

[New] 46. Repeal.

I°f1377- The Speciﬁc Relief Act, 1877, is hereby repealed.

(39 APPENDIX II TABLE A Showing the provisions in the existing Act and the corresponding prozfsions, if any in Appendix I. Existing provision Corresponding provision, if any. in Appendix I Section I Section 2--[R-epealed] Section 3 .

Section 4 (a) .

Section 4 (b) 9 Section II .

Section 12 (0) Section 12 Section 12 (d) Section 12, Explanetion .

Section 17 Section 19 .

Section 20 .

Section 21(a) .

Section 21 (b) Section 21 (c) Section 21 (d) Section 21 (e) Section 21 (f).

Section 21 ) Section 21 h) o

b) & (6.

o a Section 21, Last paragraiih

--.-Second paragra

-« frd paragrapll-A) III Section 23 (a) . . . .

,, ( ) . . .

,, c . .

,, 23 (d). . .

,, 23 (e) . . .

,. 23( ) - - -

,, 23 . .

as 23 (h)- - -

Section 22--Fii-st paragraph o hiszif Section 12 Section 2 Omitted.

Section 3 (a) Section 3(b) Omitted.

Omitted.

Section 4 Section 5 Omitted.

Section 6 Section 7 Section 12(1) Section 9 Omitted.

. ;Sections 10 and II Section 14, Explanation Section 14(2) Section 14(3) Section 14(4) Section 14 1) Section 15 gectioti 18 ection 20 Section I3(I)(a) S(§cti,<t>n dI3(I)(b) mi te .

(Section 13(1) (c) Section 12(2) gmitted. (Md) ection 13 1 Omitted. 1 Section 13 (2) _ Section 21(1) ' Section 21 2) 1 Section 21 (3) Section 22 éa) Section 221:) ' Section 22(c).

Omitted.

Section 52(4) Section 22(4) 79 I 2 Section 24 (a'). . . . . . Section 24 (a; 24 (b) . . . . . Section 24 (b :: 24 (c) . . . . . Omitted.

,3 24 (d). . . . I . . Omitted.

Section 25 (a) . . . . . Section 16 (a) ,, 25 (b) . . . . . ,, 16(5) ,, 25 (c) . . . . . Omitted.

Section 26 (a)----(c) . . . . . Section 25 (a) ,, 26 (d) . . . . . ,, 25 (b) ,, 26 (e) . . . . . ,, _ 25 (c) Section 27 (a) . . . . . Section 23 (a) as 27 - - - - - 3: 23 3! ' ' ' ' ' S' )3 ' ' ' ' ' 3) ,, 27 (e) . . . . . ,, 23 e) Section 27A . . . . . Omitted.

Section 28 . . . . . ». Omitted.

Section 29 . . . Section 27 Section 30 . . Section 28 Section 31 . .~ . Sect;on 29 (1)--(2) Section 32 . . i . Omitted.

Section 33 .-- . . Omitted.

. . . Section 29 (4) Section 34 . . .

Section 35 (a), (la) . . . . . Section 30(1) Section 26 (1) Section 35 (c), part . . .

Section 35 (:2), part i . . . . Section 26 (2), part. ,, 35, 2nd paragraph . .' . ,, 26 (3) ca) * - ,, 35, 3rd paragraph . . . ,,_ 26(2), part, Section 36 . . ~ . . '. . Omitted. . ,.

Section 37 . . . . . Section 3! Section 38 . . . . . . Section 32 Section 39 . . . . . Section 33 Section 40 . . . . . Section 34 ection 41 . . . . . Section 35 ection 42, Para. I . . . . . Section 37 (I) ,, 42, Proviso ~ . . . . Omitted. ._ ,, 42, Exp}. . . . . Section 37 (I), Expi. Section 43 . . . . Section 38 .

Section 44 . . . . .- Omitted.

Sections 45 to 51 . . . . Omitted.

Section 52 . . . . . Section 39 Section 53 . . . . . . Section 40 Section 54; First paiﬁagraph . . . Section 4: (I) ,, 54, Second paragraph, . . . ,, 41 2) 54, Third paragraph, clause (a -. ,, 41 (3) (a) ,, 54, 'I'inrd paragraph, clause (b) - ,, 41 (3)(b) ,. 54. Third. paragraph, clause (c) - .,_ 41 (3)(c) ,, 54, Third paragraph, clause (d) . A Omitted. 6 ,, 54, Third pg;-agraph, clause (e) Section 41 (3) (J) ,, 54, Explanation . . . . ,, 41, Expl. SCCti0I'l o 4;? 4 . . . . s 'S¢CtiOn Section 56 (a) __. Section 44' .:

,, 56 as) I , 44 ,, 56 5;) ,. - ,3 44 cc) ,, 56 d) . Omitted.

,, 56 (e) . . - Section 44 (d) as 56 H ' 7: 44 (9) >9 ' - - - an ( ' 3: 56 I 4 -5 - - - - 3: ' ,, 56 (1) ,1 . . . . ~ ,, 44% ) .

44 .2') S) V' ' ' ' ' 3) ,,_ 56 (k . . ' . . . . ,, 44 (1') Section 57 . . . . . . Section 45 'II O\ o'?

s./ o £23 M "V"

TABLE B Showing the provisions in Appgndi x I a_naf the corrufonding 1>rovisi'o:.-5, if any, in the exzstmg Act.

€ r J6/9

: 1:.

Provision in Appendix I Corresponding provision, if any, in the existing Act.

I 2 Section I . . . . . Section I Section 2 (a) . . . . . . Section 3 2; 2 ' - - - - - as ,, 2 (c) . . . . . New ,, 2 (d) . . . . . . New_ ,, 2 (e) . . . . . . Section3 (last para). Section 3 (a) . . . . . . Section 4 (I2) ,, 3(b)- . . . . . 4<c> Section 4 . . . . . . Section 7 Section 5 . . . . . . Seczion 8 Section 6 . . . . . . Section I0 Section 7» . . . . . . Section II \Sect_ion 7 Explanation . . . . New Section 8 . . . . . . New Section 9 . . . . . . Section 12 (b) & (c) Section to . . . . . . Section 12, Explanation (earlier portion) Section II (1). . . . . . . New ,, 11 (2). . . . . . Section 12, Explanation (last portion) Section 12 (1). . . . . . Section I2 (a) . Section 21 (e) , I2 2 Section 13 (I) (a) . . . . . Section 21 (a) ,, 13,(z) (a) Exception . . . New ,, I3 (i)( ) . » . . . Section 21 (b) ,, 13 (1)(c) . ' . . . . ,, 21 (d) ,, 13, (1) Exception . . . . Neuv_ ,, 13 (1)(d) . _ . . . . Section 21 (g) ,, 13(1), Exception . . . New ,, I3 (2) Section 21, last paragraph.

section 14(1) . . . . . Section 17 " 14 (2) . . . . . Section 14 ,,_ 14 (3) . . . . . Section 15 ,, 14(4) ._ . . . . Section 16 " 14, Explanation . . . Section I3 Section 15 . . . . . . Section 18 Section 16 . . . . . Section 25 Section 17 . . . . . . New_ Section I8 . . . . . . Section 19 Section 19 . . . . . . New_ Section 20 .. , . . . . . . Section 20 * Section 21 (I). . . . . . Section 22, first para.I Section 21 (2) (a) . . . . . Section 22, second para. -1. Section 21 (2) (b) . . . t . . Section 22, second para -«II. , 2: (am) - ,~ - - - New , S _._. 21 (2), Explanations I & 2 . New ,, 2i (3) . . . Section 22, third para.--III ,._ 21(4) . . . New J , 2 1 Section 22 Section 23 (a) 5 H 22 9: ' ,, 22 cc) ,, :3 (c) M 22 (J) ~ :2 23 (E) as 22 (9) - 3, 23 Section 23 (a) . Section 27 (2) » 22:2; ~ » 2 3: - 27 C _ T} as ' 2; ' L 3 as 2 3 Section 24 (a) Section 24 (a) ' ., 24 (b) ,, 24 (b) ' :3 24 1 - . - xew ) ,, 24 xp ananon .

Section 2s'(a). seegéion 26 (a) ---(c) as b) ,, 2 (d) u_ 25 (5) gr, _ 25 (9) Section t . Sectxon 3s( ()6), part. P31" 35 c , part.

:: 22 E2): Daft» - 35, 3rd paragraph. ., 226 . . . Ngw 3 5, 2nd paragraph.

,, . . .

, 26 (4 8: (5) . . . New ,_/~' gecigon 2; . . . . . Section 29 , ec non 2 . . . . t' o getégon 29 (I . . . . . §§c°;t§3§s3 31 and 34 5 e on 3% 2) . . . . Agcglon 35 (a) (b) 9, v I I C I so Expla t' . . . . N Sec't'ion 31' . na. Ion . . . . Sggion 37 . Scctgon 32 4 . . . . . . Secti_on 38 ' Sectgon 33 . . . . . . Sectgon 39 Sectnon 34 . . . . . Sectlon 4o , §ec:i_on 3 g . . . . lsvection 41 ec non 3 . . . . . e .

Section . . . . §;:§ion'42 . . . . . w 2 . :

Sec?§on 38 . . . . Sectfon 43 2 Sectgon 39 . . . Sectgon 52 Sectgon 4o . . Sectlon 53 , Section 41 (I) . . Section 54, first para. :3 41 2 . . ,, 54, second para.

1: 41 (3)01) - - - - 2, 54, thgrd para., clause Eu; 2: 41 (3)(b) - - - - 2, s4,thgrd para., clause b E » 41 (3) (6) - - - ,, 54, thgrd para., clause (c) 3' S 1;' ~ 41 (3) (d) . - - - ,, , 54, thud para., clause (2) . Sgégg . . . . izeecizxon 55 Section 44 (a) . . . . Section 56 (a) 3: 44 - 0 - 2: 56 ,, 44 (c) . . . . ,, 56 (c) ,, 44 (d) . . . . ,,_ 56 (e) 92 44 (9) - - - - ui 55 9: 44 ' ° - - as 'S5 (3) ,. 44 (5) - - . - ,. 56 (I5) 3: 44 E ) ' ' ' ' 29 S5 as 44 1:) ' ~ - - as 55(1) S n_ 44 . . . . ,? . 6 cctxon 45 . . Sectnon 57 New Section 46 AK' » ¥--C'>''\k*§'L , . _,ﬁ,_(' \ .

APPENDIX III.

SUGGESTIONS IN RESPECT OF OTHER ACTS.

I. Arbitration Act, 1940.

See. 32.--After the words "nor shall any arbitration agreement or award be" the word "enforced" should be inserted and in the marginal note the word "contesting" should be substituted by "relating to". [Para 73]. I

11. Code of Civil Procedure, 1908.

Appropriate provisions should be' made in Orders XX---XXI of the Code to the effect that all post-decree proceedings necessary to get complete relief in terms of the decree in a suit for speciﬁc performance shall be by appliéafion in the suit itself, together with provision for appeal from orders passed in such proceedings. [Para. 8!].

NOTE BY DR. N. C. SEN GUPTA.

I generally agree with the provisions of the report' regarding the Speciﬁc Relief Act and have only a few points to refer to.

Regarding section 4, clause (a) has been recommended to be deleted. It has been said that "There is no question of any speciﬁc relief being granted in respect of a mere agreement". As a statement of the law, it is hardly precise and it depends ﬁrst of all on the deﬁnition of 'Contract' in the Contract Act and its distinction from an agreement. Secondly, even assuming the present deﬁnition of 'Agreement' and 'Contract' to be retained, which I should say should not be done, this is not precisely correct. There are some agreements which are enforcible, although they are not contracts. The most apposite case is that of an agreement under section 53A of the Transfer of Property Act. Such an agreement is ordinarily negatively enforcible as a defence. But as interpreted by the Cal- cutta High Court, the right of the landlord, as provided by the agreement, shall be enforcible, notwithstanding section 53A being defensive. Therefore, this should remain in any case. This paragraph has to be taken along

-with the provisions in section 53A.

With regard to section 5, the propositions may be elementary. Then this_section serves as the deﬁnition of "Specific Relief". There is nothing else to indicate what in this Act speciﬁc relief means. This section may be substituted by the section deﬁning "Speciﬁc Relief".

1 Section 9-For reasons already indicated by me in my note on-the Indian Limitation Act, I th'nk it is necessary to retain the provisions of section 9.

I must say that there is some justiﬁcation for the complaint that a suit under section 9 does not serve the purpose of expediting litigation but often results in a further litigation on title. Nevertheless, as the question 84 23 ga £~.'»< gas' 6*»: tr?! . ,. ., k\( .A ' .151 85 «of title should not be made an issue in the suit, the party in possession who is dispossessed gets an initial advantage by getting back possession and throws the burden on the disseisor to prove his title, this advantage should not be taken away. A title suit would ordinarily be a long drawn

-one followed by more than one appeal and it would be inequitous to allow a trespasser who has taken the law into his own hands to keep his possession for all the time that the suit formed as a title suit would take. In a plaint in a title suit the plaintiff will have to aver and prove his 'title though he has a clear case of possession, and thus bears an initial burden of proof of title. There is no posi- tive law which would in such a case place the burden on the disseisor. It is conceivable that where a plaintiﬁ .alleges dispossession while in possession the case may be tried in two stages, ﬁrst on the issue of possession and

---dispossession, the burden would shift on the defendant 'who would then have to prove his title. But that would "not simplify the litigation, while it will keep the unlaw- ful disseisor much longer in possession. In any case this _:matter may be considered in connection with burden of proof in the Evidence Act. .

(Sd.) N. c. SEN GUPTA 'GMGIPND -D ME--2MofL--- 15-7-S3

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