Specific Performance of Contracts (Sec-12 to 18 of SR Act, 1877)

Sec-12 to 18 of SR Act
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Of The Specific Performance of Contracts

(a) Contract which may be specifically enforce

Sec-12: Contract which may be specifically enforceable:

The specific performance of any  contract may in discretion of the Court be enforced.

(i) Where the contract includes a trust.

(ii) Where there is no criterion for determining compensation.

(iii) Where monetary compensation is inadequate.

(iv) Uncertainty of financial compensation.

Illustrations:

A agrees to buy, and B agrees to sell, a picture by a dead painter and two rare china vases. A may compel B specifically to perform this contract, for there is no standard for ascertaining the actual damage which would be caused by its non-performance.

Case Reference of Sec-12:

  • Ram Chandra Das vs. Md khalilur Rahman, 37 DLR (AD) 21
  • Tahera Khatun v. A.K.M. Shafiul Islam, 2 BLC 311
  • Kajol Das v. Manowara Begum, 8 BLC 414.

Sec-13. Contract of which the subject has partially ceased exist:

Notwithstanding anything contained in section 56 of the Contract Act (IX of 1872), a contract is not wholly impossible of performance because a portion of its subject-matter, existing at its date, has ceased to exist at the time of the performance.

Illustrations:

(a) A contracts to sell a house to B for a lakh’ of taka. The day after the contract is made the house is destroyed by cyclone. B may be compelled to perform his part of the contract by paying the purchase-money,

(b) In consideration of a sum of money payable by B. A contracts to grant an annuity to B for B’s life. The day after the contract has been made, B is thrown from his house and killed. B’s representative may be compelled to pay the purchase-money.

Purpose of sec-56 of the Contract Act, 1872:

The general law relating to contracts is referred to here only so far it has bearing upon the relief of specific performance; the ordinary grounds of suit or defence upon a contract are not otherwise stated. So, a general defence that there was an implied condition that the things, the subject-matter of the contract, should be existing when the time for performance came, is taken for granted. Same applies to a defence that there has been a subsequent rescission of the contract, either by mutual agreement or under a stipulation reserving such a right to one of the parties are not warranted by the language of the section.

Objective of Sec-13:

Specific performance of the contract is possible unless performance of the contract whose subject matter is partially extinguished after the contract is executed is not entirely impossible. If the subject matter of the contract is partially destroyed after the execution of the contract, it has to be considered as per Section 13 whether the specific performance of the contract is completely impossible or not. A contract is not void unless it is absolutely impossible to perform in accordance with the contract. The contract can be performed in part. Later sections (sections 14-17) are partial.

Specific performance of the contract is stated. Section 13 itself does not give right to partial performance of the contract. Section 13 only states that performance of the contract shall not be totally impossible if the subject matter of the contract is partially destroyed. That is, the contract can be partially executed if it falls within the ambit of clauses 14, 15 and 16. Section 13 of the Specific Remedies Act can be said to be an exception to Section 56 of the contract act.

In illustration (a) the subject-matter ceased to exist. This kind of contract comes under s.50 of the contract Act and does not conform be language of s.13. This illustration is said to have been taken the case of Paine v. Miller’. It embodies the general rule that a dee being the equitable owner of the estate from the time of the act for sale must pay the consideration for it, although the estate be destroyed between the agreement and conveyance.

Under the provisions of the Transfer of Property Act, 1882 (Act No. IV of 1882) and the Registration Act (Act No. XVI of 1908) title is passed on the execution and registration of the conveyance and not on the completion of the contract. So, the rule of law envisaged by illustration (a) is not applicable in Bangladesh.

In India, however, the Punjab High Court applied illustration (a) in Ruldee Ram v Bhurilal

illustration (b) is based on the same general principle of equity In this principle which is agreed to be done is considered as actually performed. So, if a person agrees to give a contingent consideration for an estate as an annuity for the life of the vendor, and the vendor dies before the conveyance is executed, by which event the annuity ceases, yet the purchaser will be entitled to specific performance of his contract. Mortimer contracted to purchase an estate for a certain sum of money and an annuity for the life of the vendor, capper Capper was found drowned before the conveyance could be executed. A suit for specific performance was resisted on the ground of failure of consideration in that the annuity was not paid, the annuitant having died. It was held that if the contract was fair when it was made, meaning thereby that if the consideration and the amount of annuity which would have to be paid on a reasonable expectation.

Sec-14. Specific performance of part of contract where par unperformed is small:

Where a party to a contract is unable perform the whole of his part of it, but the part which must b left unperformed bears only a small proportion to the whole i value, and admits of compensation in money, the Court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.

illustrations

A contracts to sell B a piece of land consisting of 100 bighas. It turns out that 98 bighas of the land belong to A, and the mo remaining bighas to a stranger, who refuses to part with them. The two bighas are not necessary for the use or enjoyment of the 98 bighas, nor so important for such use of enjoyment that the loss of them may not be made good in money. A may be directed at the suit of B to convey to B the 98 bighas and to make compensation to him for no conveying the two remaining bighas; or B may be directed at the suit of A, to pay to A, on receiving the conveyance and possession of the land, the stipulated purchase-money less = sum awarded as compensation for the deficiency.

Example:

A contract was signed for the sale of 100 bighas of land to Momin Naveen. Later it came to light that Momin owns 98 bighas and the remaining 2 bighas is owned by another person who does not want to sell it. These two bighas of land are small compared to the entire land. For this reason, the court will order the specific performance of this 98 bigha land sale agreement based on the application of any party. Order compensation for the remaining 2 bighas. But since the whole part of the agreement cannot be executed, the Momin agreement cannot be completely avoided.

According to Article 14 the original contract must exist for partial performance of the contract. Partial performance of the contract shall not be permitted if the defendant can or is capable of performing the entire part of the contract. The plaintiff in an Article 14 suit must be willing and ready to perform his part of the contract. Willingness and preparation will continue continuously. Partial performance of the contract is not possible if the plaintiff is willing but not ready or ready but not willing.

Elements of Article 14

The ingredients of Section 14 are given below:

  1. The whole of a contract must be unenforceable. In other words a party to the contract will be unable to fulfill his part of the contract.
  2. The part of the whole contract which would be unenforceable is one of the original contract will be the smallest part.
  3. Financial compensation for the smallest portion thereof that is unenforceable shall be considered adequate remedy. And either party to the contract shall be unable to perform in accordance with the entire contract, either party do not be unable.
  4. Either party to the contract has to sue for specific performance
  5. The plaintiff in the suit must be willing and ready to perform the whole of his part in the contract. Willingness and preparation will continue.
  6. The entire agreement must remain valid and enforceable.

Sec-15: Specific performance of part of contract where part performed is large:

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 forms a considerable portion of the whole, or 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 so much of his part of the contract as he can perform. provided that the plaintiff relinquishes all claim to further specifically performance, and all rights to compensation either for the deficiency, or for the loss or damage sustained by him through the default of the defendant.

illustrations

A contracts to sell to B an estate with a house and garden for a lakh taka. The garden is important for the enjoyment of the house. It turns out that A is unable to convey the garden. A cannot obtain a decree against B for the specific performance of the contract, but if B is willing to pay the price agreed pon, and to take the estate and house without the garden, waiving all right to compensation either for the deficiency or for loss sustained by him through A’s neglect or default, B is entitled to a decree directing A to convey the house to him on payment of the purchase-money.

Ss. 14 to 16 and s. 26 distinguished.

Ss.14, 15 and 16 deals cases in which specific performance of a contract may be decreed in its entirety but in part only. Cases within these sections must be distinguished from the cases within s.26. In both classes of can specific performance, when carried out, leads to a result differ from that provided in the contract. But in the former the variations not in the agreement itself, but in its application to the sub matter, while in the latter, the variation is not in its application, bus the terms of the agreement itself. In other words, in the first, thus an objective variation, in the second, a subjective variations.

Case reference:

In Mahadeo Presad V. Narain Chandra an agreement for sale land and machinery was entered into. It was provided in agreement that the purchase would be completed within three week from the date of the contract and that if the purchaser should fail complete the contract within that time, the vendor would be at lien to terminate the contract, forfeit the earnest money and claim either damages or specific performance of the contract. It was held the time was not of the essence of the contract. The mere fact that a de was mentioned for the performance of the agreement was t conclusive proof that time was intended to be of the essence of the contract. In this case it was further held that although in a contract for the sale of land the time fixed for completion is not initially the essence of the contract, either party may be guilty of such unnecessary delay as entitles the other to serve upon him a fig limiting a time at the expiration of which he will treat the contract  at an end.

Sec-16. Specific performance of independent part of contract:

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 be specifically performed, the Court may direct specific performance of the former part.

Performance of separate parts of the same contract:

The same contract may have several independent and distinct parts. One of these parts has nothing to do with the function of the other. Performance of one part has nothing to do with the other part. If the subject matter of a contract is such that one party is capable of specific performance and the other party cannot or should not perform the specific performance, then the party capable of specific performance can be ordered to perform the contract.

Specific remedies for specific performance of individual parts of the contract are provided for in Section 16 of the Act. According to this Article 16, where one part of the contract can or should be separately performed and the other part of the same contract is separate and independent and the specific performance of the other part of the same contract cannot or should not be performed, the court shall consider the former part of the contract. specific task can issue execution orders.

Case Reference:

  • Safiur Rahman v. Maharamanessa Bibi ILR 24
  • Harendra v. Nandalal AIR 1933 cal 98

Sec-17: Bar in other cases of specific performance of part of the contract:

The court shall not direct the specific performance of a part of a contract except in cases coming under one or other of the three last preceding sections.

Scope and object of Sec-17:

It is of the essence of specific performance except under special circumstances the court shall not direct to specific performance of a part of a contract. The general rule is that a contract is either to be performed in its entirely or not to be prepared at all. This general rule of law is embodied in s. 17 while the exceptions are contemplated in ss.14, 15 and 16 which exhaust all the circumstances under a partial performance of a contract will be enforced.

Case Reference:

  • Abdul Haq v. Yahia Md. 2009
  • Marha Singh v. Mohammad Umar 71.C.393

Sec-18. Purchaser’s rights against vendor with imperfect title:

Where a person contracts to sell or let certain property, having only an imperfect title thereto, the purchaser or lessee (except as otherwise provided by this Chapter) has the following rights:

(a) if the vendor or lessor has subsequently to the sale or lease 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 validate the title, and they are bound to convey at the vendors or lessors request. The purchaser or lessee may compel him to procure such concurrence;

(c) where the vendor professes to sell unincumbered 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 conveyance from the mortgagee;

(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, 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.

COMMENTARY

Scope and applicability:

1.1. When due to circumstances such as personal incapacity of one of the parties or the nature of the contract itself. It is incapable at law of being enforced against one of the parties, the other party has no right to enforce it. This doctrine of mutuality can have no application when the SRA lays down that the rights and disabilities in respet of doubts as to title in respect of the vendor are to be found in S.25 and these relating to the vendee in S.18. The two sections are complementary to each other and the rights of a vendee who brings a suit are not to be deducted by an attempted application of the doctrine of mutuality to the conditions laid down in S.25, but are to be determined by the conditions in S. 18 which defines the right of the purchaser.

(Imperfect title) Defective property means absence of property and dept conditional theory from the property of future heirs. If a person makes an auction purchase, deposits money and waits for the sale to be confirmed by observing other necessary conditions, then he is said to have acquired a defective title.

Where there is a defect in property and it is due to the fault of the plaintiff, the plaintiff cannot sue for specific performance of the contract.

Differences between Sections 18 and 25 of the Specific Remedies Act, 1877

1. Section 18 of the Specific Remedies Act does not apply to the seller’s or lessor’s defective contract. On the other hand 25 those in case of non-ownership of the seller or lessor.

2. Section 28 deals with the rights of the purchaser or lessee. on the other hand.

Article 25 enunciates the principle that a person who has no rights of his own cannot impose any obligation on another person.

3. Defects in property as described in section 18 are rectifiable, but defects in 25a are not rectifiable.

4. Specific Remedies Section 18 (a), (b) and sub-section (b) of the Act prescribes the provision for satisfaction of the seller or defective property. On the other hand, in sub-section (a) (1) (c) of Article 25, it is stated that no person or his representative can perform specific functions of the contract.

5. Clause 18 also provides for refund of deposit with interest by the buyer or lessee has been done, but no such provision has been made in section 25.


Written By- BDLRP Team of BGC Trust university Bangladesh.

79 thoughts on “Specific Performance of Contracts (Sec-12 to 18 of SR Act, 1877)”

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  50. 해운대고구려와 룸싸롱: 부산의 역사적 매력과 현대적 즐거움

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  54. Pharmacology’s Role and Drug Development in Modern Society

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