Specific relief Act, 1963

Intro - Specific Relief Act was enacted in 1877. The Act was originally drafted upon the lines of
the Draft, New York Civil Code, 1862, and its main provisions embodied the doctrines evolved by
the English Equity Courts. The Specific Relief Act, 1963 is the outcome of the acceptance by the
Central Government on the recommendations made by the Law Commission of India. A bill to
repeal the Act of 1877 was introduced in Lok Sabha and was passed by the both the houses of
Parliament and on 13th December, 1963 the President assented to the same.

Specific relief means - The Specific Relief Act provides for specific reliefs. Specific relief means
relief of certain type, i.e. an exact or particular, a named, fixed or determined relief. The term is
generally understood and providing relief of a specific kind rather than a general relief or damages
or compensation.

The Specific Relief Act, 1963 extends to the whole of India, except the State of Jammu and
Kashmir. The Specific Relief Act deals only with certain kinds of equitable reliefs and these are
now:

i) Recovery of possession of property

ii) Specific Performance of contracts

iii) Rectification of Instruments

iv) Rescission of Contracts

v) Cancellation of instruments

vi) Declaratory decrees

vii) Injunctions
1. Recovery of possession of property

Recovery of Possession is dealt with in Sections 5 to 8 of the Specific Relief Act. Here property
may be immovable property or movable property, act provides for the recovery of the property.
Section 6 deals with the immovable property and Section 7 and Section 8 deals with the movable
property.

Recovery of immovable property

Section 6 of the act deals with the suit by person dispossessed of immovable property.-

(1) If any person is dispossessed without his consent of immovable property otherwise than
in due course of law, he or any person claiming through him may, by suit, recover possession
thereof, notwithstanding any other title that may be set up in such suit.

(2) No suit under this section shall be brought- (a) after the expiry of six months from the date
of dispossession; or (b) against the Government.

(3) No appeal shall lie from any order or decree passed in any suit instituted under this
section, nor shall any review of any such order or decree be allowed.

(4) Nothing in this section shall bar any person from suing to establish his title to such property
and to recover possession thereof.

Object of Sec 6

Bai Dani v. A.G. Barot; AIR 1974 The main object of Section 6 is to discourage forcible
dispossession on the principle that disputed rights are to be decided by due process of law and
no one should be allowed to take law into his own hands, however good his title may be. The
operation of Section is not excluded in cases between landlords and tenants where there is no
question of title involved.

Wali Mohd. V. Ajodhya Kunda Section 6 provide summary and speedy remedy through the
medium of Civil Court for the restoration of possession to a party dispossessed by another, within
6 months of its dispossession.

Requisites of Sec. 6

Judicial possession of the plaintiff at the time of dispossession: The plaintiff must establish
his judicial possession at the time of dispossession. Judicial possession is not equivalent to lawful
possession. If a person has the possession of property as a fact and once he becomes settled as
such, it is enough for the purpose of relief under Section 6, irrespective of his being without any
right to the same or mere trespasser.

Dispossession of the plaintiff without his consent otherwise than in due course of law: -
For the application of this section the dispossession must be without the consent of plaintiff or
against the process of and operation of law invoked by the ordinary method of Civil Court.
Dispossession has not been made by the Government, but by any other person.

The suit must be instituted within 6 months from the date of dispossession: - The Section
6 prescribes its own period of limitation for suits to be filed there under.

Dispossession must be of ‘immovable property’: - The expression ‘immovable property’

means only such properties of which physical possession can be given under the Act and it does
not cover incorporeal rights, since the incorporeal rights are not rights of which possession can
be taken and delivered to the claimant.

Under this Section, an order or decree is final in the sense that it is not open to review or appeal,
although it is subject to revision by High Court.

Recovery of specific movable property

Section 8. -- Liability of person in possession, not as owner, to deliver to persons entitled to

immediate possession.

Any person having the possession or control of a particular article of movable property, of which
he is not the 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;

(c) When it would be extremely difficult to ascertain the actual damage caused by its loss;

(d) When the possession of the thing claimed has been wrongfully transferred from the plaintiff.

Sec. 8 of the Specific Relief Act which is similar to the equitable relief of English law in an action
of detenue entitles a person to recover the specific movable property itself from the defendant
who is not the owner thereof in cases where the property has a peculiar value or association and
cannot be adequately compensated in terms of money.
Requisites of Section 8: - In order that Section 8 may come into operation the following
ingredient must exist:

1) The defendant has possession or control of the particular article claimed;

2) Such article is movable property;

3) The defendant is not the owner of the article;

4) The plaintiff is entitled to immediate possession; and

Provisions of Section 8 are applicable in the following situations only:

i. When such property is held as agent or trustee of the property.

ii. When compensation is not an adequate relief for the loss to the plaintiff.

iii. When ascertainment of actual damage is not possible.

iv. When possession of the property is wrongfully transferred from the plaintiff.

In case of situations under I and II burden of proof is on the plaintiff and under III and IV burden
is on the defendant.

Kizhakkumpurath V. Thanikkuzhiyil 1998 There was oral and documentary evidence that the
plaintiff was the owner of certain scheduled items and the defendants had trespassed into those
items. The plaintiff was held entitled to recover those items from the defendants, and also mesne
profits or compensation as well.
2. Specific performance of contracts

Q. Explain various contracts which can be specifically enforced?

The contract is an agreement upon consideration to do or not to do particular thing, if the person
on whom this contractual obligation rests, fails to discharge it, other party has right to either to
insist on the literal and actual performance of the contract or to obtain compensation for the non-
performance of it. The former is called the ‘Specific Performance.’

According to Pomeroy defines it as “consisting in the contracting party’s exact fulfillment of

obligation which he has assumed- in his doing or omitting the very act which he has undertaken
to do or omit.”

Contracts which may be specifically enforced

The remedy of Specific performance being an equitable remedy is at the discretion of the Court.
But in the exercise of this discretion, the Court is governed by certain principles. The
circumstances in which specific performance may be granted are enumerated in Section 10 of
the very Act.

Section 10. -- Cases in which specific performance of contract enforceable

Except as otherwise provided in this Chapter, the specific performance of any contract may, in
the discretion of the court, be enforced-

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

(b) When the act agreed to be done is such that compensation in money for its non-
performance would not afford adequate relief.

Explanation.-Unless and until the contrary is proved, the court shall presume-

(i) That the breach of a contract to transfer immovable property cannot be adequately relieved by
compensation in money; and

(ii) That the breach of a contract to transfer movable property can be so relieved except in the
following cases:-

(a) Where the property is not an ordinary article of commerce, or is of special value or interest to
the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) Where the property is held by the defendant as the agent or trustee of the plaintiff.

Analysis of sec.10

No Standard for ascertaining damages - Section 10 providers for specific performance of

contract in those cases where there is no standard for ascertaining damages or where the money
cannot form adequate relief for the non-performance. Further enforcement of the specific
performance is at discretion of the court and no one claim it as a matter of right.

Banwari Lal Agarwala v. Ram Swarup Agarwala 1998 It was held that the plaintiff tenant was
entitled to a decree of specific performance contract under Section 10 of Specific Relief Act.
Where from some special or practical features or incidents of the contract either in its subject-
matter, or in its terms or in the relations of the parties, it is impossible to arrive at a legal measure
of damages at all, or at least with any sufficient degree of certainty so that not real compensation
can be obtained by means of action at law, the contract will be enforced specifically.

Pecuniary compensation not adequate relief - The specific performance will also be granted
when compensation in money is not adequate relief in facts and circumstances of case. Damages
may be considered to be an inadequate remedy if it is difficult to count them.

Ram Karan V. Govind Lal 1999 there was an agreement for the sale of agricultural land. The
buyer had paid full sale consideration to the seller, but the seller even then avoided executing the
sale deed as per the agreement. The buyer brought an action for the specific performance of the
contract. It was held that the case is covered under Section 10(b) of the act.

Explanation to Section 10 carries presumption in favor of plaintiff and declares that it should be
presumed that compensation does not afford adequate relief in following cases:

In all cases where the contract is for the transfer of immovable property.

In case of movable property where:

a) The property is not an ordinary article but an article of special value or of special interest
to plaintiff.

b) The article is not easily obtainable in the market.

c) The property is held by the defendant as an agent or trustee of the plaintiff.

However these presumptions can be disproved / disproved by the defendant by proving the
contrary.

Nivarti Govind Ingale vs. R B Patil 1997 - A woman took a loan from a relative and executed a
deed of sale in favor of the relative's minor son with an agreement of re- transfer at the repayment
of loan. This contract was held to be specifically enforceable. The relative had sold the property
off to a buyer. This decree was allowed to be enforced against such buyer also.

Section 11. Cases in which specific performance of contracts connected with trusts
enforceable. - Section 11 says that specific performance can be enforced when the act agreed
to be done is wholly or partly is in the performance of a trust. An exception is that the contract
must not be in excess of the power of a trustee.

Section 12. Specific performance of part of contract - Section 12 says that if, in the discretion
of the court, only a small part of a contract cannot be specifically performed and if such part can
be alternatively compensated, the rest of the part can be specifically enforced.

Section 23. Liquidation of damages not a bar to specific performance -According to Section
23, even if a contract includes a penalty or fixed amount of damages in case of default, its specific
performance can be ordered depending on the intention of the penalty. If the intention of the
compensation for damages is to secure the performance of the contract and not to give an
alternative way of fulfilling the contract, it can be specifically enforced.

Conclusion -
General defenses against suit instituted under this Act (Sec. 9)

Q. What grounds may be taken by a defendant in a suit for specific performance of the
contract?

Provision of Sec.9 provides defenses for suit instituted under this Act. There is no enumeration of
such defenses in Specific Relief Act. It is simply incorporated all defenses in such cases in any
law relating to contracts. The defendant has following general defenses against the suit instituted
under this Act.

1. Material alteration in agreement - A., the owner of three houses, lets one house situated at
lane 3 to B. B. make alterations in agreement without consent of A and change the situation of
house in an agreement lane 2 in the place of lane 3. B. cannot sue A. for specific performance of
agreement as unauthorized material alteration in agreement restrain him from suing.

2. Forgery or fraud - A. contracts to sell, and B. contracts to buy, certain land. To protect the
land from floods, it is necessary for its owner to maintain an expensive embankment. B. does not
know of this circumstance, and A. conceals it from him. Specific performance of the contract
should be refused to A.

3. Ultra-vires contract - A. in the capacity of agent for B., enters into an agreement with C. to
buy C.’s house. A. is in reality acting as agent for B. but B. allotted him express limited express
authority about the price of house not to sell bellow certain price but A. make an agreement bellow
that specified certain price. A. cannot enforce specific performance of this contract on account of
ultra vires agreement.

4. Limitation - The Limitation Act, 1963 lays down that the contract should be performed within
a specified period called period of limitation. If it is not performed and no action is taken by the
promise within the period of limitation he is deprived of his remedy at law. In other words we may
say that the contract is terminated or discharged by laps of time.

5. Suit filed by plaintiff before maturity - If in contract there is time stipulated for its performance
the party cannot file suit for its performance before that stipulated time elapsed. Suit filed by
plaintiff before maturity of time of performance is good defense for defendant.

6. Doctrine of frustration- Due to doctrine of frustration contract comes to an end no specific

performance can be claim on the basic of frustrated contract.
7. Unlawful agreement - An agreement would be void for its unlawfulness. An agreement if
comes under category enumerated under sec, 23-30 of Indian Contract Act cannot be specifically
enforced.

8. Agreement without free consent - A. contracts to sell, and B. contracts to buy, certain land.
To protect the land from floods, it is necessary for its owner to maintain an expensive
embankment. B. does not know of this circumstance, and A. conceals it from him. Specific
performance of the contract should be refused to A.

9. Absence of privity - It is the general rule of law that only parties to contract may sue and be
sued. A person who is not party of contract cannot sue upon it for specific performance of the
contract.

10. Absence of consideration In general, law enforces only those promises which are made for
consideration. Thus every agreement must be supported by consideration so as to enforceable
even though it may not be adequate. A person cannot sue upon it for specific performance of the
contract if it lacks consideration.

In spite of above defenses the defendants in the suit of specific performance have special
defenses under Specific Relief Act 1963. These are enumerated u/sec. 14, 16, 17& 20 of
Specific Relief Act 1963.
Q. Explain various contracts which cannot be specifically enforced?

The effect of the provisions in Section 14 can be stated in terms of certain propositions, namely,
that in the case of following contracts the relief of Specific performance cannot be allowed:

1. Where Compensation is Adequate - Courts will not order specific performance of a contract
where the aggrieved party can be adequately compensated in terms of money.

When a loan has already been advanced on the security against it, this cannot be specifically
enforced without default of mortgager & the mortgagee cannot keep or sale property without prior
notice and confirmation of financial disability to repay the loan amount.

2. Contracts involving personal skill / minute and numerous details - It is not possible for the
court to supervise the performance of a contract which runs into minute and numerous details or
is dependent upon the personal qualifications of the promisor. Contracts of employment, contracts
of personal service, contracts involving performance of artistic skill, like contract to sing, to paint,
to act, contract 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.

Purshottam v. Purshottam it was held that a contract to marry would fall under the category of
such contracts for which a court cannot enforce the specific performance.

3. Contracts of Determinable Nature - Determinable Contracts derive their existence from the
termination clause envisaged therein. There are essentially three types of termination clauses,
viz. (i) termination for cause (upon a contingent event), (ii) termination for convenience and (iii)
termination upon expiry of the term. (Determinable - Capable of being brought to an end under given conditions.)

In simple words if any contract entitles either party to terminate a contract for convenience subject
to notice period then as per the provisions of the Act and precedents, such a contract may qualify
as "determinable"; hence, not capable of being specifically enforced. Meaning thereby, in such
cases specific performance may not be 'the' remedy, but a claim for compensation could be
resorted to.

Jawahar Sao v. Shatrughan Sonar 1961 it has been held that where a contract of sale is
determinable at the option of the seller within a specified period on repayment of the
consideration, the other party cannot get decree of specific performance of the agreement.
4. Contracts requiring Constant Supervision - Clause (d) of Section 14(1) says that the
contract cannot be specifically enforced where it involves the performance of continuous duty
which the court cannot supervise. Contracts requiring the performance of a continuous duty
extending over period longer than three years from the date of the contract cannot be specifically
enforced.

Central Bank Yeotmal v. Vyankatish 1949 the respondent-defendant was required to execute
a Kabuliyat every year for 25 years and it was held there was continuous duty in the sense that it
had to be performed annually for 25 years and, therefore, the contract must be held to be
specifically unenforceable. (Kabuliyat - Instruments of settlement)

5. Contract for Arbitration- Sec. 14(2) A contract to refer a present or future dispute to an
arbitration cannot be specifically enforced.

This section has no application where a person having made a contract to refer a arbitration has
refused to perform it and institutes a suit in respect of subject matter in disobedience of the
contract, it is not open to enforce specific performance of the agreement.

6. Borrower is not willing to repay at once – Sec. 14(3) a contract of mortgage cannot be
specifically enforced unless in which the borrower is not willing to repay at once. Once he denied
to repay the lone the mortgagee can file suit for specific performance of mortgage deed.

6. Conduct of plaintiff is such as disentitled him to relief under this Act.-Sec. 16

A. contracts to sell B. a house and garden in which there are ornamental trees, a material element
in the value of the property as a residence. A. without B.’s consent, fells the trees. A. cannot
enforce specific performance of the contract.

7. Party does not have the title or ownership of the property- Sec. 17. A contract involving
transfer of property when the party does not have the title or ownership of the property.

A. in the character of agent for B., enters into an agreement with C. to buy C.’s house. A. is in
reality acting not as agent for B. A. cannot enforce specific performance of this contract.

8. The contract though not voidable but confer an unfair advantages to the plaintiff over
defendant. – Sec.20. A. contracts to sell, and B. contracts to buy, certain land. To protect the
land from floods, it is necessary for its owner to maintain an expensive embankment. B. does not
know of this circumstance, and A. did not tell it to B. Specific performance of the contract should
be refused to A.
Q. Who may obtain specific performance?

It is a general rule that a contract cannot be got enforced except by a party to the contract. This
general rule is embodied in clause (a) of Section 15. But there are certain exceptions to this
general rule. These exceptions are contained in clause (b) to (h) of the section and contain list of
persons who although not a party to the contract, are entitled to obtain specific performance of
contract. These are:

Section 15. Who may obtain specific performance.-

(a) Any party to contract

(b) The representative in interest.

A. contracts to convey certain land to B. by a particular day. A. dies intestate before that day
without having conveyed the land. B. may compel A.’s heir or other representative in interest to
perform the contract specifically.

Shyam Singh, v. Daryao Singh 2004 under the provisions of S. 15(b) specific performance of
the contract may be obtained by 'any party thereto' or their representative in interest.'

(c) Where the contract is a settlement on marriage, or a compromise of doubtful rights between
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.

A remainder man is a person who inherits or is entitled to inherit property upon the termination of
the estate of the former owner. It means during the tenancy the landlord sale the property the
tenant can enforce the contract of tenancy even against the new landlord.

(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;

A reversioner means a person who is entitled to an estate in return can file suit for specific
performance if he possess property.

(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. In simple
words if the lease granted for particular period and the tenant died before tenancy period comes
to end the heirs of tenant can enforce the tenancy contract specifically.
(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.

The promoters of a mine company contract that the company, when formed, shall purchase
certain mineral property. They take proper precautions to assert the value of such property, and
in fact agree to pay a proper price. They also stipulate that the vendors shall give them a bonus
out of the purchase-money. This contract can be specifically enforced by company after
incorporation.

Personal bars to relief (short note)

To succeed in a suit for specific performance the Plaintiff must show that he is ready and willing
to perform the contract and that he has sufficient means to honor his obligations under the
contract.

Sec. 16- Specific performance of a contract cannot be enforced in favor of a person-

(a) Who would not be entitled to recover compensation for its breach; or

A. in the capacity of agent for B., enters into an agreement with C. to buy C.’s house. A. is in
reality acting not as agent for B. A. cannot enforce specific performance of this contract.

(b) who has become incapable of performing, or violates any essential term of, the contract
that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance
with, or in subversion of, the relation intended to be established by the contract; or

A. contracts to sell B. a house and to become tenant thereof for a term of 14 years from the date
of the sale at a specified yearly rent. A. becomes insolvent. Neither he nor the official receiver of
his estate can enforce specific performance of the contract.

A. contracts to sell B. a house and garden in which there are ornamental trees, a material element
in the value of the property as a residence. A. without B.’s consent, fells the trees. A. cannot
enforce specific performance of the contract.
(c) Who, fails to prove that he has performed or has always been ready and willing to
perform the essential terms of the contract which are to be performed by him.

A, in the character of agent for B, enters into agreement with C to buy C’s house. A is in reality
acting not as agent for B, but of his own account. A cannot enforce specific performance of
contract.

Discretion and the powers of court. (Sec. 20 to 23) (Short note)

The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant
such relief merely because it is lawful to do so. The following are cases in which the court may
properly exercise a discretion.

Sec. 21 Power to award compensation in certain cases the plaintiff in a suit for specific
performance of contract, under Section 21 may also ask for compensation in case of the breach
of the contract,

a. either in addition to or in substitution for such performance

b. Court can award compensation without granting specific relief if contract broken by the
defendant, and that the plaintiff is entitled to compensation for that breach

c. Court can award compensation along with granting specific relief if contract broken by the
defendant, if it is necessary in the interest of justice.

d. In determining the amount of any compensation the court shall be guided by the principles
specified in section 73 of the Indian Contract Act, 1872

e No compensation shall be awarded under this section unless the plaintiff has claimed such
compensation in his plaint: Provided that where the plaintiff has not claimed any such
compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend
the plaint on such terms as may be just, for including a claim for such compensation.

Sec. 22. Power to grant relief for possession, partition, refund of earnest money, etc.-

Under this section when court granting specific performance, it has power to ask for possession,
or partition of immovable property.

When court refuse the specific performance, it has power to ask for refund of any earnest money
or deposit paid.
For application of this section the plaintiff must claim above reliefs in his plaint.

Sec. 23. Liquidation of damages not a bar to specific performance - Under this section if
court refuse the specific performance the court have power to decide liquidated damages as it
think fit in the interest of justice irrespective of liquidated damages mentioned in the contract so
broken.

When enforcing specific performance under this section, the court shall not also decree payment
of the sum so named in the contract.
Rectification of instruments

By law, many contacts are required to be in writing. Because of convenience, many more
transactions are put into writing. A written transaction is called an instrument. An instrument is a
result of negotiations. Sometimes, an instrument may fail to express the intention or will of the
involved parties. Rectification of such an instrument may become necessary.

Doctrine of Rectification - Rectification means correction of an error in an instrument in order to

give effect to the real intention of the parties. Where a contract has been executed into writing
due to fraud or mutual mistake, fails to express the real intention of the parties, the court will rectify
the writing instrument in accordance with their true intent.

Here the fundamental assumption is that there exists in between the parties a complete and
perfectly unobjectionable contract but the writing designed to embody it, either from fraud or
mutual mistake is incorrect or imperfect and the relief required is to rectify the writing so as to
bring it into conformity with true intent.

In such a case to enforce the instrument as its stand must be to injure at least one party to it; to
rescind it all together must be to injure both, but rectify it and then enforce it is to injure neither
but to carry out the intention of both.

Sec. 26 – When instrument may be rectified:

Fraud or a mutual mistake of the parties in an instrument either party, or his representative
in interest, may institute a suit to have the instrument rectified - When, through fraud or a
mutual mistake of the parties, a contract or other instrument in writing does not truly express their
intention, either party, or his representative in interest, may institute a suit to have the instrument
rectified: and if the court find it clearly proved that there has been fraud or mistake in framing the
instrument, and ascertain the real intention of the parties in executing the same, the court may in
its discretion rectify the instrument so as to express that intention, so far as this can be done
without prejudice to rights acquired by third persons in good faith and for value.

Court must be satisfied about the party’s intention to make an equitable agreement - For
the purpose of rectifying a contract in writing, the court must be satisfied that all the parties thereto
intended to make an equitable and thorough agreement.

Enforcement after rectification by court if plaintiff prayed for -A contract in writing may be
first rectified and then, if the plaintiff has so prayed in his plaint and the court thinks fit, specifically
enforced.
For example - A., intending to sell to B. his house and one of three godowns neighboring to it,
executes a transfer through contract prepared by B., in which, through B.’s fraud, all three
godowns are included. Of the two godowns which were fraudulently included, B. gives one to C.,
and lets the other to D. for a rent, neither C. nor D. having any knowledge of the fraud. The suit
for rectification can be filed by A. to exclude the names of C. & D.

A. contracts in writing to pay his advocate, B., a fixed sum in lieu of costs. The contract contains
mistakes as to the name of the client, which, if construed strictly, would exclude B. from rights to
get fixed sum under it. B. is entitled to file suit for rectification or correction of name of his client.

Effect of rectification - An instrument rectified by court represents the true intention of the
parties. It removes all previous defects, ambiguities and uncertainties.

Dagdu vs. Bhana 2006 it was observed: “If mistakes be established and proved, then the court
can give relief of rectification, but what is rectified is not the agreement, but the mistaken
expression of it.”

Conclusion -
Rescission of Contract Sec. 27 to 30

This provision is based on the administration of protective and preventive justice. If there is
reasonable apprehension of serious injury because of any agreement, security or deed or any
other instrument which may resulted in an injustice the court may grant the relief of recession of
contract.

Rescission - Rescission means the abolition of a contract, effective from its beginning, thereby
restoring the parties to the positions they would have occupied if no contract had ever been
formed.

Rescission may be by an agreement & by an order of the court - Mutual rescission, or

rescission by agreement, is a discharge of both parties from the obligations of a contract by a new
agreement made after the execution of the original contract but prior to its performance.

Sec. 27 – When rescission may be adjudged and when it may refused.

When rescission may be adjudged

1. Any person interested in contract may sue to have it rescinded and such recession may be
adjusted by the court in following cases.

(a) Where the contract is voidable and terminable by the plaintiff.

(b) Where contract is unlawful for causes not apparent on its face and the defendant is more
blame then plaintiff.

When rescission may be refused

2. Notwithstanding anything contained in subsection 1 of Sec. 27 the court may refuse to rescind
the contract.

(a) Where the plaintiff has expressly or impliedly ratified the contract.

(b) Where due to the change of circumstances which has taken place since the making of contract
the parties cannot be subsequently restore the position in which they stood when the contract
was made.

(c) Where during the subsistence of the contract third party have acquired rights in good faith
without notice and for value.
(d) Where only a part of the contract is sought to be rescinded and such part is not severable
from the rest of the contract.

Time for rescission - A right to rescind must be exercised promptly or within a reasonable time
after the discovery of the facts that authorize the right. A reasonable time is defined by the
circumstances of the particular case. The rule that rescission must be prompt does not operate
where an excuse or justification for a delay is shown.

Cancellation of Instrument Sec. 31 to 33

Under section 31 of the Act, a person can sue for the cancellation of the document when he had
an apprehension of serious injury from it.

Meaning and object – These provisions of cancellation of instrument comprising in Sec. 31 to

33 are based upon the administration of protective and preventive justice. If there is reasonable
apprehension about violation of legal rights of either party to contract that instrument can be
cancelled before its effect take place. The relief of cancellation is granted before the violation of
plaintiff legal right under concerned instrument.

Sec. 31 – When cancellation may be order – A cancellation of instrument may be order by court
when….

1. A written instrument becomes void or voidable - There is reasonable apprehension if the

instrument is left unresolved may cause serious injury to either party.

Such party entitled to file suit for declaration to that effect (Cancellation).

Order for cancellation and delivery of instrument to the aggrieved party may be passed by court.

2. If the instrument is registered the court shall also send a copy of its decree to officer in whose
office the instrument has been registered, such officer shall note the fact of its cancellation on the
copy of the instrument.

Sec. 32 – Instrument may be partial cancelled: If on the evidence plaintiff proves successfully
the requirements of clause 1 of Sec. 31 the instrument may be cancelled partially by court.

Sec. 33 – Compensation: At the time of passing of decree for cancellation of instrument court
can award compensation but if the contract is made without consideration then no award of
compensation in that case.
A., the owner of a ship, by fraudulently representing it to be seaworthy, induces B.an insurance
agent, to insure it. After making insurance policy B. come to know about fraudulent representation
by A. about ship B. may obtain the cancellation of the policy.

General knowledge - Rescission made on account of voidable and terminable contract by the plaintiff where contract is unlawful for
causes not apparent on its face.

Basic object behind cancellation is stops any future obligations on account of reasonable apprehension about violation of legal rights.

It means reason behind recession is immediate i.e. threat of loss is existed at the time of recession. While reason behind cancellation
is future threat of loss. By nbopk qflibmf.

Declaratory decrees
Declaratory reliefs are available through the decrees of the court. Sections 34 and 35 provided
this relief under which a person can approach the court for declaring his right or status over some
property.

The object of this relief is to prevent future litigation. This remedy can be requested when there
were doubts regarding right over property. It can be sought against any person who denied or
tried to deny the right of the plaintiff.

Sec. 34 Discretion of court as to declaration of status or right.-

Any person entitled to any legal character, or to any right as to any property, may institute a suit
against any person denying, or interested to deny, his title to such character or right, and the court
may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in
such suit ask for any further relief:

Provided that no court shall make any such declaration where the plaintiff, being able to seek
further relief than a mere declaration of title, omits to do so.

For ex. A. is in possession of certain property. B., alleging that he is the owner of the property,
requires A.to deliver it to him. A. may obtain a declaration of his right to hold the property.

Essential to be set up for relief under sec.34

1. That the plaintiff is entitled to a legal character at the time of the suit, or to any right as to any
property.

2. That defendant has denied these or he is interested in denying that character or right of the
plaintiff, and

3. The plaintiff is not in a position to ask for relief consequential upon the declaration.
Man Kunwar Asram v. Badlu Mukandi AIR 1957 if these conditions are satisfied the plaintiff
need not ask for any further relief than a mere declaration but the court shall not make any such
declaration if he, being able to seek further relief than a mere declaration of title, omits to do so.

Section 35. Effect of declaration.-A declaration made under this Chapter is binding only on the
parties to the suit & persons claiming through them respectively

Prabhakar Adsude v. State of M.P., 2004 According to this section the declaratory decree is not
binding on everybody in the world. It cannot bind strangers and as such a declaration will not
operate as a judgment in rem and will be binding only between parties to the suit and their
representatives. Hence, a declaratory decree is binding between the parties inter se and its effect
does not bind persons who are not connected with the suit in question.
Preventive reliefs / Injunction

Generally the court give order when the dispute is brought before it. It resolve the dispute and
determine the rights of party. In certain occasion the dispute arises and there will no time to decide
the rights of the parties. If delay occurs injury may be caused to the plaintiff. To prevent such
injury the court is empowered to issue an ordered called as injunction / Preventive reliefs
restraining the defendant to stop their acts.

Preventive reliefs are granted by the courts by way of issuing injunctions. Injunctions under
Chapter VII prevents a person to do or not to do something. Granting of such reliefs are within
the discretion of the court. By virtue of Section 36 of the Act, there are temporary or interlocutory
injunctions and perpetual injunctions. Perpetual injunctions can be granted only after hearing both
sides and considering the merits of the case. Under Section 39, court can grant mandatory
injunctions to compel a person to do an act. It is issued to prevent the breach of an obligation. A
plaintiff can claim damages in the suit for both mandatory and perpetual injunctions.

Following types of Injunctions are granted by the Court.

Temporary and Permanent Injunctions (Sections 36 & 37)

Perpetual Injunctions (Section 38)

Mandatory Injunctions (section 39)

Damages in lieu of or in addition to Injection (Section 40)

Injunction to perform a negative covenant (section 42)

We shall now discuss all injunctions respectively;

Temporary and Permanent Injunction; (Sections 36 & 37)

An injunction is an order of competent court which prohibits commission of a threatened wrong,

or forbids the commission of a wrong already began, or commands the restoration of status quo

Clauses 1 and 2 deal with preventive relief, whereas clause 3 refer to mandatory injunction, which
seeks to rectify the defendants’ wrongful conduct.
The Preventive Injunction wills b granted on sole discretion of the court, which will be based and
guided by sound and reasonable judicial principals.

Temporary Injunctions or Interim Injunctions are those which remain in force until specified time
or till date of next hearing of the case, or until further orders of the court. Such injunctions can be
granted at any stage of the suit and are governed by Order 39 of the Code of Civil Procedure,
1908 and not by Specific Relief Act, 1963.

Permanent Injunctions on the other hand, are contained in a decree passed by the court after fully
hearing the case. Such an injunction perpetually prohibits the defendants from asserting a right
or committing an act which would contrary to the rights of plaintiff. It is based on end suit. It
remains in force for all time to come.

Perpetual Injunctions may be granted, at the discretion of the court, to prevent the breach of an
obligation existing in the plaintiff’s favor, whether expressly or by implication.

Whenever the defendant invades or even threatens to invade the plaintiff’s right to property or the
enjoyment thereof, the court may grant a Perpetual Injunction to the plaintiff in the following four
cases;

Where the defendant is a trustee of the property for the plaintiff.

Where there is no standard for ascertaining the actual damage caused, or likely to be caused, to
the plaintiff, by invasion of his rights.

Where the invasion of the plaintiff’s right is such that compensation in money would not afford
adequate relief.

Where injunction is necessary to prevent multiplicity of judicial proceedings.

If the payment of damages will not adequately compensate the plaintiff, the court will grant an
injunction, unless there is special reason against it. The court may refuse injunction and award
damage in the following cases, if the injury is (i) small and (ii) capable of being estimated in money
and being adequately compensated by a sum of money and grant of injunction would be
oppressive. An injunction may also be refused on the ground of the plaintiff’s acquiescence and
delay. Similarly, injunctions should not be granted where they inflict more injury on the person
sought to be injected than advantage on the applicant as decided in the case of Tituram V. Cohen.

Perpetual Injunction when refused (section 41) in following cases perpetual injunction cannot be
granted;
To restrain any person from prosecuting a judicial proceeding pending at the institution of the suit
in which the injunction is sought, unless such restraint is necessary to prevent multiplicity of
judicial cases.

To restraint any person from insulting or prosecuting any proceeding in a court not subordinate to
that from which injunction is sought.

To restraint any person from applying any legislative body.

To restraint any person from instituting or persecuting any proceeding in a criminal matter.

To prevent breach of a contract, the performance of which would not specifically enforced.

To prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a
nuisance.

To prevent a continuing breach in which the plaintiff acquiesced.

When equally efficacious relief can certainly be obtained by any other usual mode of proceeding,
except in case of breach of trust.

When conduct of plaintiff or his agent is such to disentitle him to the assistance of the court.

When the plaintiff has not personal interest in the matter.

The provisions of Section 41 is not exhaustive a refusal of injunction will depend on the discretion
of the court.

Mandatory Injunctions (section 39) at times it so happens that, in order to prevent the breach of
an obligation, it is necessary to compel the performance of certain acts which the court is capable
of enforcing. In such case the court may in its discretion , grant an injunction (i) to prevent such
brech , and also (ii) to compel the performance of the requisite acts.

This relief is applicable to the breach of any obligation, whether arising out of a contract or tort. It
may be perpetual or temporary, though in rare cases that of temporary injunction of this nature
will be issued.

An injunction is, in its nature, prohibitory. The defendant is first called up to restore the place to
the position in which it was before the act was done, and then he is restrained , when he has so
restored it, from doing anything in respect of it which would be breach of obligation on his part.
The object in every case is to compel the defendant to restore things to their former condition.
This type of injunction will be granted to prevent more injury and damages to the plaintiff.
Lane V New gate, a lased his land to B for erecting a mills and bound himself to supply water
thereto from canals and reservoirs on his own land. An impeded the enjoyment of water by B, by
keeping works out of repair by the use of locks, and by removing the stop-gate. B asked for an
injunction which was granted. In this case an affirmative covenants were enforced.

Damages in lieu of, or in addition to, injunction ( section 40) When a plaintiff sues for Perpetual
Injunction or a Mandatory Injunction , he may also claim damages, either in addition to , or in
substitution for , theinjuction, and the court, if it thinks fit , award such damages.

An injunction or damage are not alternate remedies but can be granted at the discretion of the
court.

The damages cannot be granted unless the plaintiff has claimed damages in the plaint or in
proceedings he will be allowed to amend the plaint by incorporating clause for damages.

Injunction to perform a negative covenant (section 42) some time in a given contract, there may
be affirmative agreement to do certain act, coupled with a Negative Covenant, express or implied,
not to do a certain other act. Now the fact that the court is unable to compel specific performance
of the affirmative part does not mean that it cannot grant an injunction in respect of the negative
part. It is necessary in this case that the plaintiff has performed its part mentioned in the contract.

Lumley V Wagner , A a singer , agreed that she would sigh for 12 months at B’s theatre and that
she would not sing elsewhere in the public during that period. Here B cannot obtained specific
performance of the first part of the contract (i.e. to sing at his theatre), but he is entitled to an
injunction, restraining A from singing at other public places during that period. In this case though
there is one contract but contain two parts one is positive and other is negative. The two parts are
independent contracts. In this case court cannot debar itself to give injunction in case of negative
covenant.

The Supreme Court has also observed that the jurisdiction to grant an injunction under the Act is
discretionary and must be exercised according to sound principals of law, and ex debito justito.
The plaintiff cannot claim this relief as a matter of right. Before refusing or granting the injunction,
the court must weigh the pros and cons in each case, consider the facts and circumstances in
their proper perspectives, and then exercise its discretion in the best interest of justice