14. Contracts not specifically enforceable.-The following contracts cannot be specifically enforced, namely:-
(a) where a party to the contract has obtained substituted performance of contract in accordance with the provisions of Section 20;
(b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise;
(c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and
(d) a contract which is in its nature determinable.]
Contracts which cannot be specifically enforced
1. Where compensation is adequate remedy [original]
Courts will not order specific performance of a contract where the aggrieved party can be adequately compensated in terms of money.
2. Contracts involving personal skill [original]
It is not possible for the court to supervise the performance of a contracts which runs into minute and numerous details or is dependent upon the personal qualifications of the promisor or is otherwise of volitional nature.
Contracts of employment, contracts of personal service, contracts involving performance of artistic skill, like contracts to sing, to paint, to act, contracts of authorship, are ordinary examples of things requiring personal skill and, therefore, beyond the capacity of the judicial process to enforce their actual performance. The only choice in such cases is to be content with damages.
Contracts involving personal, confidential and fiduciary service
The specific performance of contracts involving personal, confidential and fiduciary services, which are based on mutual trust, faith and confidence, have been held to be outside the ambit of Section 14(1)(a), (b) and (d).
3. Contracts of determinable nature [original]
Specific performance is not ordered of a contract which is in its nature determinable. An illustration appearing under the corresponding provision in the repealed Act of 1877 sufficiently explains this point:
A and B contract to become partners in a certain business, the contract did not specify the duration of the proposed partnership. The contract cannot be specifically performed, for, if it were so performed, either A or B might at once dissolve the partnership.
A contract of employment is not specifically enforceable. A person who was selected was not allowed to get the position to which he was selected. The court observed: "Courts do not ordinarily enforce performance of contracts of a personal character, such as a contract of employment.
The remedy is to sue for damages. The grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice.
In the absence of any statutory requirement, courts do not ordinarily force an employer to recruit or retain in service an employee not required by the employer."
4. Contract requiring constant supervision [original]
Clause (d) of Section 14(1) says that a contract cannot be specifically enforced where it involves the performance of a continuous duty which the court cannot supervise.
Construction contracts [S. 14(3)(c)] [original provision]
As for agreements for the construction of a building, the principles crystallised in English law have been adopted by sub-section (3)(c).
The agreement will be enforceable if the nature of the building is of exact nature, the plaintiff has a substantial interest in the work and the work is also of such nature that it cannot be compensated for in terms of money and the defendant is in possession of the whole or a part of the site.
Where the contract involved a project of public interest and the plaintiff was not able to prove any prime facie case in his favour and his loss was also ascertainable in monetary terms, the court refused to grant an injunction restraining the execution of a public project.
Appointment of experts [S. 14-A]
This section provides for appointment of experts. The section is to operate consistently with the provisions of CPC, 1908. A case may involve complicated issues and the court may consider it necessary to have expert opinion to assist it on such complicated matters.
The court may engage one or more experts for the purpose. The court may also seek the attendance of an experts for the purpose. The court may also seek the attendance of an expert for providing evidence including production of documents on the issue.
Persons for or against whom contracts may be specifically enforced [S. 15]
15. Who may obtain specific performance.- Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by-
(a) any party thereto;
(b) the representative-in-interest or the principal,
Provided that where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative-in-interest or his principal shall not be 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-interest, or his principal, has been accepted by the other party.
(c) where the contract is a settlement on marriage, or a compromise of doubtful rights between the members of the same family, any person beneficially entitled thereunder;
(d) where the contract has been entered into by a tenant for life in due exercise of a power, the remainder man;
(e) a reversioner in possession, where the agreement is a covenant entered into with his predecessor-in-title and the reversioner is entitled to the benefit of such covenant;
(f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is entitled to the benefit thereof and will sustain material injury by reason of its breach;
[(fa) when a limited liability partner has entered into a contract and subsequently becomes amalgamated with another limited liability partnership, the new limited liability partnership which arises out of the amalgamation.]
(g) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;
(h) 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 of the incorporation, the company:
Provided that the company has accepted the contract and has communicated such acceptance to the other party to the correct.
Assignee from legal heir
The expression "representative-in-interest" includes the assignee of a right to purchase the property and, therefore, he would have the title to claim specific performance.
Lease or sale in favour of company before incorporation
Where a lease was granted in favour of a company before its incorporation and the promoters of the company, instead formed only a partnership, it was held that such partnership firm could not claim any rights or interest under clause (h) in the property. The lease deed was signed only by the lessor. The transaction was ineffective even otherwise.
The promoters of an unincorporated company purchased certain property for the purposes of the company. Clause (h) provided that such lease can be enforced by the company after incorporation provided that it has contract and communicated its acceptance to the other party. In this case, after its incorporation, the company filed a suit against the seller for a declaration that the company was the owner of the property. The court said that this amounted an acceptance of the contract and communication to the other party.
On the facts, however, the company could not get the relief of recovery of property because there was undesirable conduct of frivolous litigation on the part of both parties. The company was allowed compensation and refund of the earnest money with 12 per cent interest.
All buyers or contractees must join
Where there is a single indivisible contract to convey land to several persons, some of them only cannot seek specific performance if the others do not want it.
The relief of specific performance cannot be awarded in favour of the following persons:
1. A person cannot seek specific performance where the circumstances are such that he would not have been entitled to compensation for breach of contract.
2. A person who is guilty of any of the following cannot claim specific performance:
(a) who has obtained substituted performance of contract under Section 20; or
(b) he has violated any essential term of the contract that on his part remained to be performed;
(c) he has acted in fraud of the contract;
(d) he has wilfully acted at variance with or in subversion of the relation intended to be established by the contract.
3. A person who has failed to prove that he has performed or has always been ready and willing to performance of which he has prevented from performing by the other party or the performance of which the other party has waived.
Where the contract involves payment of money, it is not essential for the plaintiff to actually tender to the other party or to deposit in court any money except when so directed by the court. Performance must be offered according to the true construction of the contract.
Before acting under Order 8, Rule 10 of the Civil Procedure Code, the court in a suit for specific performance has to scrutinise the facts set out in the plaint to find out whether all the requirements, in particular those indicated in Section 16 of the Specific Relief Act regarding readiness and willingness, have been complied with or not.
Ready and willing [Cl. (c)]
Clause (ii) of the Explanation makes it necessary for a party claiming specific performance to aver and prove that he has been all the time ready and willing to perform his part of the contract. Continuous readiness and willingness to perform his part of the contract on the part of the plaintiff is a condition precedent for the grant of the relief.
Where the plaintiff neither had sufficient funds to pay the consideration amount nor was he acting promptly within the stipulate time where time was the essence of the contract, it was held that he was neither read nor willing to perform his part of the contract. Hence he was not entitled to a decree for specific performance of the contract.
A person who makes himself a party to an illegal contract cannot enforce his rights under this section.
Default of first buyer available as defence to subsequent buyer
Burden lies on the second defendant to prove that he was a bona fide purchaser in good faith without notice of the earlier agreement of sale. Such burden cannot be cast upon the plaintiff.
Selling or letting property without title [S. 17]
A person who contracts to sell or let out immovable property with knowledge that he has no right to do so cannot ask for specific enforcement in his favour. This will be so even if he honestly believed that he had the title but is not able to give at the time of performance a title free from reasonable doubt. The same principle is applicable to sale or letting of movable property also.