The Specific Relief (Amendment) Bill, 2017: S Introduced IN OK Abha

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AS INTRODUCED IN LOK SABHA

Bill No. 248 of 2017

THE SPECIFIC RELIEF (AMENDMENT) BILL, 2017


A

BILL
further to amend the Specific Relief Act, 1963

BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as


follows:—
1. (1) This Act may be called the Specific Relief (Amendment) Act, 2017. Short title and
commencement.
(2) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint and different dates may be appointed for different provisions
5 of this Act and any reference in any such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.
47 of 1963. 2. In section 6 of the Specific Relief Act, 1963 (hereinafter referred to as the principal Amendment of
Act), in sub-section (1), after the words “he or any person”, the words “through whom he has section 6.
10 been in possesion or any person” shall be inserted.
3. For section 10 of the principal Act, the following section shall be substituted, Substitution of
namely:— new section for
section 10.

“10. The specific performance of a contract shall be enforced by the court Specific
subject to the provisions contained in sub-section (2) of section 11, section 14 and performance in
respect of
15 section 16.”. contracts.
2
Amendment of 4. In section 11 of the principal Act, in sub-section (1), for the words “contract may, in
section 11. the discretion of the court”, the words “ contract shall” shall be substituted.
Substitution of 5. For section 14 of the principal Act, the following sections shall be substituted,
new sections for namely:—
section 14.

Contracts not “14. The following contracts cannot be specifically enforced, namely:— 5
specifically
enforceable. (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 10
parties that the court cannot enforce specific performance of its material terms;
and
(d) a contract which is in its nature determinable.
Power of court 14A. (1) Without prejudice to the generality of the provisions contained in the
to engage Code of Civil Procedure, 1908, in any suit under this Act, where the court considers it 15 5 of 1908.
experts.
necessary to get expert opinion to assist it on any specific issue involved in the suit, it
may engage one or more experts and direct to report to it on such issue and may secure
attendance of the expert for providing evidence, including production of documents
on the issue.
(2) The court may require or direct any person to give relevant information to 20
the expert or to produce, or to provide access to, any relevant documents, goods or
other property for his inspection.
(3) The opinion or report given by the expert shall form part of the record of the
suit; and the court, or with the permission of the court any of the parties to the suit,
may examine the expert personally in open court on any of the matters referred to him 25
or mentioned in his opinion or report, or as to his opinion or report, or as to the manner
in which he has made the inspection.

(4) The expert shall be entitled to such fee, cost or expense as the court may fix,
which shall be payable by the parties in such proportion, and at such time, as the court
may direct.”. 30

Amendment of 6. In section 15 of the principal Act, after clause (f), the following clause shall be
section 15. inserted, namely:—
“(fa) when a limited liability partnership 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.”. 35

Amendment of 7. In section 16 of the principal Act,—


section 16.
(i) for clause (a), the following clause shall be substituted, namely:—
“(a) who has obtained substituted performance of contract under
section 20; or”;
(ii) in clause (c),— 40

(I) for the words “who fails to aver and prove”, the words “who fails to
prove” shall be substituted;
(II) in the Explanation, in clause (ii), for the words “must aver”, the words
“must prove” shall be substituted.
3
8. In section 19 of the principal Act, after clause (c), the following clause shall be Amendment of
inserted, namely:— section 19.

“(ca) when a limited liability partnership has entered into a contract and
subsequently becomes amalgamated with another limited liability partnership, the new
5 limited liability partnership which arises out of the amalgamation.”.

9. For the sub-heading “Discretion and powers of Court” occuring after section 19, Amendment of
the sub-heading “Substituted performance of contracts, etc.” shall be substituted. sub-heading
under Chapter
II.

10. For section 20 of the principal Act, the following sections shall be substituted Substitution of
namely:— new sections for
section 20.

10 “20. (1) Without prejudice to the generality of the provisions contained in the Substituted
9 of 1872. Indian Contract Act, 1872, and, except as otherwise agreed upon by the parties, where performance of
contract.
the contract is broken due to non-performance of promise by any party, the party who
suffers by such breach shall have the option of substituted performance through a
third party or by his own agency, and, recover the expenses and other costs actually
15 incurred, spent or suffered by him, from the party committing such breach.
(2) No substituted performance of contract under sub-section (1) shall be
undertaken unless the party who suffers such breach has given a notice in writing, of
not less than thirty days, to the party in breach calling upon him to perform the contract
within such time as specified in the notice, and on his refusal or failure to do so, he
20 may get the same performed by a third party or by his own agency:
Provided that the party who suffers such breach shall not be entitled to recover
the expenses and costs under sub-section (1) unless he has got the contract performed
through a third party or by his own agency.
(3) Where the party suffering breach of contract has got the contract performed
25 through a third party or by his own agency after giving notice under sub-section (1),
he shall not be entitled to claim relief of specific performance against the party in
breach.
(4) Nothing in this section shall prevent the party who has suffered breach of
contract from claiming compensation from the party in breach.
30 20A. (1) No injunction shall be granted by a court in a suit under this Act involving Special
a contract relating to an infrastructure project specified in the Schedule, where granting provisions for
contract relating
injunction would cause impediment or delay in the progress or completion of such to infrastructure
infrastructure project. project.
Explanation.—For the purposes of the section, section 20B and clause (ha) of
35 section 41, the expression “infrastructure clause project” means the Category of projects
and infrastructure Sub-Section specified in the Schedule.
(2) The Central Government may, depending upon the requirement for
development of infrastructure projects, and if it considers necessary or expedient to
do so, by notification in the Official Gazette, amend the Schedule relating to any
40 Category of projects or Infrastructure Sub-Sectors.
(3) Every notification issued under this Act by the Central Government shall be
laid, as soon as may be after it is issued, before each House of Parliament, while it is
in session, for a total period of thirty days which may be comprised in one session or
in two or more successive sessions, and if, before the expiry of the session immediately
45 following the session or the successive sessions aforesaid, both Houses agree in making
any modification in the notification or both Houses agree that the notification should
not be made, the notification shall thereafter have effect only in such modified form or
be of no effect, as the case may be; so, however, that any such modification or annulment
shall be without prejudice to the validity of anything previously done under that
50 notification.
4
Special Courts. 20B. The State Government, in consultation with the Chief Justice of the
High Court, shall designate, by notification published in the Official Gazette, one or
more Civil Courts as Special Courts, within the local limits of the area to exercise
jurisdiction and to try a suit under this Act in respect of contracts relating to
infrastructure projects. 5

Expeditious 20C. Notwithstanding anything contained in the Code of Civil Procedure, 1908, 5 of 1908.
disposal of a suit filed under the provisions of this Act shall be disposed of by the court
suits.
within a period of twelve months from the date of service of summons to the
defendant:
Provided that the said period may be extended for a further period not exceeding 10
six months in aggregate after recording reasons in writing for such extension by the
court.”.
Amendment of 11. In section 21 of the principal Act, in sub-section (1), for the words “, either in
section 21. addition to, or in substitution of,” the words “in addition to” shall be substituted.
Amendment of 12. In section 25 of the principal Act, for the words and figures “the Arbitration 15
section 25. Act, 1940”, the words and figures “the Arbitration and Conciliation Act, 1996” shall be 10 of 1940.
substituted. 26 of 1996.

Amendment of 13. In section 41 of the principal Act, after clause (h), the following clause shall be
section 41. inserted, namely:—
“(ha) if it would impede or delay the progress or completion of any infrastructure 20
project or interfere with the continued provision of relevant facility related thereto or
services being the subject matter of such project.”
Insertion of 14. After Part III of the principal Act, the following Schedule shall be inserted,
Schedule. namely:—
‘THE SCHEDULE 25

[See sections 20A and 41 (ha)]


Category of projects and Infrastructure Sub-Sectors

Sl. No. Category Infrastructure Sub-Sectors


1 2 3
1. Transport (a) Road and bridges 30

(b) Ports (including Capital Dredging)


(c) Shipyards (including a floating or land-based facility
with the essential features of waterfront, turning
basin, berthing and docking facility, slipways or ship
lifts, and which is self sufficient for carrying on 35
shipbuilding/repair/breaking activities)
(d) Inland Waterways
(e) Airports
(f) Railway Track, tunnels, viaducts, bridges, terminal
infrastructure including stations and adjoining 40
commercial infrastructure
(g) Urban Public Transport (except rolling stock in case
of urban road transport)
5

1 2 3
2. Energy (a) Electricity Generation
(b) Electricity Transmission
(c) Electricity Distribution
5 (d) Oil pipelines
(e) Oil/Gas/Liquefied Natural Gas (LNG) storage facility
(including strategic storage of crude oil)
(f) Gas pipelines (including city gas distribution network)
3. Water and (a) Solid Waste Management
10 Sanitation (b) Water supply pipelines
(c) Water treatment plants
(d) Sewage collection, treatment and disposal system
(e) Irrigation (dams, channels, embankments, etc.)
(f) Storm Water Drainage System
15 (g) Slurry pipelines
4. Communication (a) Telecommunication (Fixed network including optic
fibre/wire/cable networks which provide broadband/
internet)
(b) Telecommunication towers
20 (c) Telecommunications and Telecom Services
5. Social and (a) Education Institutions (capital stock)
Commercial (b) Sports infrastructure (including provision of
Infrastructure Sports Stadia and Infrastructure for Academies for
Training/ Research in Sports and Sports-relating
25 activities)
(c) Hospitals (capital stock including Medical Colleges,
Para Medical Training Institutes and Diagnostic
Centres)
(d) Tourism infrastructure viz. (i) three-star or higher
30 category classified hotels located outside cities with
population of more than one million; (ii) ropeways
and cable cars
(e) Common infrastructure for industrial parks and other
parks with industrial activity such as food parks,
35 textile parks, Special Economic Zones, tourism
facilities and agriculture markets
(f) Post-harvest storage infrastructure for agriculture and
horticulture produce including cold storage
(g) Terminal markets
40 (h) Soil-testing laboratories
(i) Cold chain (including cold room facility for farm level
pre-cooling, for preservation or storage of agriculture
and allied produce, marine products and meat)
6

1 2 3

(j) Affordable Housing (including a housing project


using at least 50% of the Floor Area Ratio (FAR)/
Floor Space Index (FSI) for dwelling units with carpet
area of not more than 60 square meters 5

Explanation.—For the purposes of this sub-clause,


the term “carpet area” shall have the same meaning
as assigned to it in clause (k) of section 2 of the Real
Estate (Regulation and Development) Act, 2016 (16
of 2016).'. 10
STATEMENT OF OBJECTS AND REASONS
The Specific Relief Act, 1963 was enacted to define and amend the law relating
to certain kinds of specific relief. It contains provisions, inter alia, specific performance
of contracts, contracts not specifically enforceable, parties who may obtain and against
whom specific performance may be obtained, etc. It also confers wide discretionary
powers upon the courts to decree specific performance and to refuse injunction, etc. As
a result of wide discretionary powers, the courts in majority of cases award damages as
a general rule and grant specific performance as an exception.
2. The tremendous economic development since the enactment of the Act have
brought in enormous commercial activities in India including foreign direct investments,
public private partnerships, public utilities infrastructure developments, etc.; which
have prompted extensive reforms in the related laws to facilitate enforcement of
contracts, settlement of disputes in speedy manner. It has been felt that the Act is not in
tune with the rapid economic growth happening in our country and the expansion of
infrastructure activities that are needed for the overall development of the country.
3. In view of the above, it is proposed to do away with the wider discretion of
courts to grant specific performance and to make specific performance of contract a
general rule than exception subject to certain limited grounds. Further, it is proposed
to provide for substituted performance of contracts, where a contract is broken, the
party who suffers would be entitled to get the contract performed by a third party or by
his own agency and to recover expenses and costs, including compensation from the
party who failed to perform his part of contract. This would be an alternative remedy at
the option of the party who suffers the broken contract. It is also proposed to enable the
courts to engage experts on specific issues and to secure their attendance, etc.
4. A new section 20A is proposed for infrastructure project contracts which
provides that the court shall not grant injunction in any suit, where it appears to it that
granting injunction would cause hindrance or delay in the continuance or completion
of the infrastructure project. The Department of Economic Affairs is the nodal agency
for specifying various categories of projects and infrastructure sub-sectors, which is
provided as Schedule to the Bill and it is proposed that the said Department may amend
the Schedule relating to any such category or sub-sectors.
5. Special courts are proposed to be designated to try suits in respect of contracts
relating to infrastructure projects and to dispose of such suits within a period of twelve
months from the date of service of summons to the defendant and also to extend the
said period for another six months in aggregate, after recordings reasons therefor.
The Bill seeks to achieve the above objectives.

NEW DELHI; RAVI SHANKAR PRASAD.


The 15th December, 2017.

7
ANNEXURE
EXTRACTS FROM THE SPECIFIC RELIEF ACT, 1963
(47 OF 1963)
* * * * *
Suit by person 6. (1) If any person is dispossessed without his consent of immovable property otherwise
dispossessed of than in due course of law, he or any person claiming through him may, by suit, recover
immovable
property.
possession thereof, notwithstanding any other title that may be set up in such suit.
* * * * *
Contracts which can be specifically enforced
Cases in which 10. Except as otherwise provided in this Chapter, the specific performance of any
specific contract may, in the discretion of the court, be enforced—
performance of
contract (a) when there exists no standard for ascertaining the actual damage caused by
enforceable. the non-performance of the act agreed to be done; or
(b) when the act agreed to be done in 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.
Cases in which 11. (1) Except as otherwise provided in this Act, specific performance of a contract
specific may, in the discretion of the court, be enforced when the act agreed to be done is in the
performance of
contracts
performance wholly or partly of a trust.
connected with
* * * * *
trusts
enforceable. Contracts, which cannot be specifically enforced
Contracts not 14. (1) The following contracts cannot be specifically enforced, namely:—
specifically
enforceable. (a) a contract for the non-performance of which compensation in money is an
adequate relief;
(b) a contract which runs into such minute or numerous details or which is so
dependent on the personal qualification or volition of the parties, or otherwise from its
nature is such, that the court cannot enforce specific performance of its material terms;
(c) a contract which is in its nature determinable;
(d) a contract the performance of which involves the performance of a continuous
duty which the court cannot supervise.
(2) Save as provided by the Arbitration Act, 1940, no contract to refer present or 10 of 1940.
future differences to arbitration shall be specifically enforced; but if any person who has
made such a contract (other than an arbitration agreement to which the provisions of the said
act apply) and has refused to perform it, sues in respect of any subject which he has contracted
to refer, the existence of such contract shall bar the suit.
(3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-
section (1), the court may enforce specific performance in the following cases:—

8
9
(a) where the suit is for the enforcement of a contract,—
(i) to execute a mortgage or furnish any other security for securing the
repayment of any loan which the borrower is not willing to repay at once:
Provided that where only a part of the loan has been advanced the lender
is willing to advance the remaining part of the loan in terms of the contract; or
(ii) to take up and pay for any debentures of a company;
(b) where the suit is for,—
(i) the execution of a formal deed of partnership, the parties having
commenced to carry on the business of the partnership; or
(ii) the purchase of a share of a partner in a firm;
(c) where the suit is for the enforcement of a contract for the construction of any
building or the execution of any other work on land:
Provided that the following conditions are fulfilled, namely:—
(i) the building or other work is described in the contract in terms
sufficiently precise to enable the court to determine the exact nature of the building
or work;
(ii) the plaintiff has a substantial interest in the performance of the contract
and the interest is of such a nature that compensation in money for non-
performance of the contract is not an adequate relief; and
(iii) the defendant has, in pursuance of the contract, obtained possession
of the whole or any part of the land on which the building is to be constructed or
other work is to be executed.
Persons for or against whom contracts may be specifically enforced
15. Except as otherwise provided by this Chapter, the specific performance of a contract Who may
may be obtained by— obtain specific
performance.
* * * * *
(f) a reversioner in remainder, where the agreement is such a covenant, and the
reversioner is entitled to the benefit to the benefit thereof and will sustain material
injury by reason of its breach;
* * * * *
16. Specific performance of a contract cannot be enforced in favour of a person— Personal bars to
relief.
(a) who would not be entitled to recover compensation for its breach; or
* * * * *
(c) who fails to aver and 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, other than terms of the performance of which has been prevented or waived by
the defendant.
Explanation.— For the purposes of clause (c),—
* * * * *
(ii) the plaintiff must aver performance of, or readiness and willingness to
perform, the contract according to its true construction.
* * * * *
19. Except as otherwise provided by this Chapter, specific performance of a contract Relief against
may be enforced against— parties and
persons
* * * * * claiming under
them by
subsequent title.
10
(c) any person claiming under a title which, though prior to the contract and
known to the plaintiff, might have been displaced by the defendant;
* * * * *
Discretion and powers of court
Discretion as 20. (1) The jurisdiction to decree specific performance is discretionary, and the court
to decreeing is not bound to grant such relief merely because it is lawful to do so; but the discretion of the
specific
performance.
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 discretion not to
decree specific performance:—
(a) where the terms of the contract or the conduct of the parties at the time of
entering into the contract or the other circumstances under which the contract was
entered into are such that the contract, though not viodable, gives the plaintiff an
unfair advantage over the defendant; or
(b) 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; or
(c) where the defendant entered into the contract under circumstances which
though not rendering the contract voidable, makes it inequitable to enforce specific
performance.
Explanation 1.— Mere inadequacy of consideration, or the mere fact that the
contract is onerous to the defendant or improvident in its nature, shall not be deemed
to constitute an unfair advantage within the meaning of clause (a) or hardship within
the meaning of clause (b).
Explanation 2.— The question whether the performance of a contract would
involve hardship on the defendant within the meaning of clause (b) shall, except in
cases where the hardship has resulted from any act of the plaintiff subsequent to the
contract, be determined with reference to the circumstances existing at the time of the
contract.
(3) The court may properly exercise discretion to decree specific performance in any
case 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 performance of a contract merely
on the ground that the contract is not enforceable at the instance of the other party.
Power to award 21. (1) In a suit for specific performance of a contract, the plaintiff may also claim
compensation compensation for its breach, either in addition to, or in substitution of, such performance.
in certain cases.
* * * * *
Application of 25. The provisions of this Chapter as to contracts shall apply to awards to which the
preceding Arbitration Act, 1940, does not apply and to directions in a will or codicil to execute a 10 of 1940.
sections, to
certain awards particular settlement.
and testamentary
directions to
execute * * * * *
settlements.

Injunction when 41. An injudction cannot be granted—


refused.
* * * * *
(h) when equally efficacious relief can certainly be obtained by any other usual
mode of proceeding except in case of breach of trust;
* * * * *
LOK SABHA

————

BILL
further to amend the Specific Relief Act, 1963

————

(Shri Ravi Shankar Prasad, Minister of Law and Justice)

GMGIPMRND—2941LS(S3)—18-12-2017.

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