SPECIFIC PERFORMANCE CANNOT BE CLAIMED WHEN ESSENTIAL PROMISE IN CONTRACT HAS NOT BEEN PERFORMED
A division bench of the Supreme Court in a recent judgment[1] has laid down that a party is not entitled to specific performance of a contract if he has not fulfilled the essential terms of the contract. The judgment arose in a case pertaining to a contract of sale of property between individuals. The issue in this case was whether a vendee who does not perform one of his promises in a contract can be awarded the discretionary relief of specific performance of that contract.
In the present case, the sale of property was delayed by a period of 13 years due to litigation regarding the property itself. After the settlement of that dispute, the owner of the property, in contravention of the agreement to sell and despite payment of earnest money, refused to sell the property. A suit for specific performance of the contract was filed. The defendant raised the plea that the plaintiff had failed to pay the rent of the land, as per the terms of the contract, and thus he was not entitled to a decree for specific performance.
The Court noted that in this instance, the possession of land was handed over to the vendee on the basis that he would be bound to pay rent for the land if the case was not decided within one year. This promise between the parties is reciprocal in nature. When a contract consists of reciprocal promises to be simultaneously performed, no promisor needs to perform his promise unless the promisee is ready and willing to perform his reciprocal promise.[2] The Court read this along with the Specific Relief Act, 1963 which lays down that specific performance can’t be enforced if a person is unable to prove that he has either performed or was willing to perform the essential terms of the contract which were to be performed by him.[3]
Further the
Court went on to state that specific performance of a contract is a discretionary
relief as per the provisions of the Specific Relief Act as it stood at the time
of filing, and one that the Court is not bound to grant merely because it is
lawful to do so. When circumstances make it inequitable to enforce specific
performance in a suit, the Court can refuse to grant such discretionary relief.[4]
On this basis, the Court held that the vendee could not claim specific performance of the contract when he has not performed his part of the contract. It pointed out that the land in question was agricultural land spanning around 9 acres and the vendee having been a cultivator must have earned a fairly large amount. It held that the vendee had caused undue hardship and acted unfairly, thus forfeiting his right to get the discretionary relief of specific performance.
Submitted by
Navia Ninan
Student Reporter, INBA
School
of Excellence in Law, Chennai
[1] Surinder Kaur (D) v. Bahadur Singh (D).
[2] Section 51 of the Indian Contract Act, 1872.
[3] Section 16 (2) of the Specific Relief Act, 1963.
[4] Section 20(2)(c) of the Specific Relief Act, 1963.