SPECIFIC RELIEF ACT, 1877
SPECIFIC RELIEF ACT, 1877
Last Updated: 18770207
Contents
PREAMBLE. .
PART I. PRELIMINARY
1 SHORT TITLE
2 COMMENCEMENT
3 INTERPRETATIONCLAUSE
4 SAVINGS
5 SPECIFIC RELIEF HOW GIVEN
6 PREVENTIVE RELIEF
7 RELIEF NOT GRANTED TO ENFORCE PENAL LAW
PART II. SPECIFIC RELIEF
CHAPTER I. RECOVERING POSSESSION OF PROPERTY
A POSSESSION OF IMMOVEABLE PROPERTY
8 RECOVERY OF SPECIFIC IMMOVEABLE PROPERTY
9 SUIT BY PERSON DISPOSSESSED OF IMMOVEABLE PROPERTY
B POSSESSION OF MOVEABLE PROPERTY
10 RECOVERY OF SPECIFIC MOVEABLE PROPERTY
11 LIABILITY OF PERSON IN POSSESSION, NOT AS OWNER, TO DELIVERTO PERSON ENTITLED TO IMMEDIATE POSSESSION
CHAPTER II. THE SPECIFIC PERFORMANCE OF CONTRACTS
12 CASES IN WHICH SPECIFIC PERFORMANCE ENFORCEABLE
13 CONTRACT OF WHICH THE SUBJECT HAS PARTIALLY CEASED TOEXIST
14 SPECIFIC PERFORMANCE OF PART OF CONTRACT WHERE PARTUNPERFORMED IS SMALL
14 A A CONTRACTS TO SELL A PIECE OF LAND
14 B IN A CONTRACT FOR THE SALE AND PURCHASE OF A HOUSE ANDLANDS
15 SPECIFIC PERFORMANCE OF PART OF CONTRACT WHERE PARTUNPERFORMED IS LARGE
15 (A) A CONTRACTS TO SELL A PIECE OF LAND CONSISTING OF 100 BIGHAS
15 (B) A CONTRACTS TO SELL AN ESTATE WITH A HOUSE AND GARDEN
16 SPECIFIC PERFORMANCE OF INDEPENDENT PART OF CONTRAC
17 BAR IN OTHER CASES OF SPECIFIC PERFORMANCE OF PART OFCONTRACT
18 PURCHASERS RIGHTS AGAINST VENDOR WITH IMPERFECT TITLE
19 POWER TO AWARD COMPENSATION IN CERTAIN CASES
20 LIQUIDATION OF DAMAGES NOT A BAR TO SPECIFIC PERFORMANCE
21 CONTRACTS NOT SPECIFICALLY ENFORCEABLE
22 DISCRETION AS TO DECREEING SPECIFIC PERFORMANCE
22 ( A) A TENANT FOR LIFE OF CERTAIN PROPERTY
22 ( B) A CONTRACTS TO SELL TO B THE INTEREST OF C IN CERTAINSTOCKINTRADE
22 ( C) A CONTRACTS TO SELL, AND B CONTRACTS TO BUY
22 ( D) AS PROPERTY IS PUT UP TO AUCTION
22 ( E) WHERE THE PERFORMANCE OF THE CONTRACT WOULD INVOLVESOME HARDSHIP
22 (F) A AND B, TRUSTEES, JOIN THEIR BENEFICIARY, C, IN A CONTRACTTO SELL THE TRUSTESTATE TO D
22 (G) A, THE OWNER OF AN ESTATE, CONTRACTS TO SELL IT TO B
22 (H) A CONTRACTS WITH B TO SELL HIM CERTAIN LAND, AND TO MAKEA ROAD TO IT FROM A CERTAIN RAILWAYSTATION
22 (I) A, A LESSEE OF MINES, CONTRACTS WITH B,
22 (J) A CONTRACTS TO BUY CERTAIN LAND FROM B THE CONTRACT ISSILENT
22 (K) A CONTRACTS WITH B TO BUY FROM BS MANUFACTORY
23 WHO MAY OBTAIN SPECIFIC PERFORMANCE
24 PERSONAL BARS TO THE RELIEF
25 CONTRACTS TO SELL PROPERTY BY ONE WHO HAS NO TITLE ORWHO IS A VOLUNTARY SETTLER
26 NON ENFORCEMENT EXCEPT WITH VARIATION
27 RELIEF AGAINST PARTIES AND PERSONS CLAIMING UNDER THEM BYSUBSEQUENT TITLE
27 (A) SPECIFIC PERFORMANCE IN CASE OF PART PERFORMANCE OFCONTRACT TO LEASE
28 WHAT PARTIES CANNOT BE COMPELLED TO PERFORM
29 BAR OF SUIT FOR BREACH AFTER DISMISSAL
30 APPLICATION OF PRECEDING SECTIONS TO AWARDS ANDTESTAMENTARY DIRECTIONS TO EXECUTE SETTLEMENTS
CHAPTER III. THE RECTIFICATION OF INSTRUMENT
31 WHEN INSTRUMENT MAY BE RECTIFIED
32 PRESUMPTION AS TO INTENT OF PARTIES
33 PRINCIPLES OF RECTIFICATION
34 SPECIFIC ENFORCEMENT OF RECTIFIED CONTRACT
CHAPTER IV. THE RESCISSION OF CONTRACTS
35 WHEN RESCISSION MAY BE ADJUDGED
36 RESCISSION FOR MISTAKE
37 ALTERNATIVE PRAYER FOR RESCISSION IN SUIT FOR SPECIFICPERFORMANCE
38 COURT MAY REQUIRE PARTY RESCINDING TO DO EQUITY
CHAPTER V. THE CANCELLATION OF INSTRUMENTS
39 WHEN CANCELLATION MAY BE ORDERED
40 WHAT INSTRUMENTS MAY BE PARTIALLY CANCELLED
41 POWER TO REQUIRE PARTY FOR WHOM INSTRUMENT ISCANCELLED TO MAKE COMPENSATION
CHAPTER VI. DECLARATORY DECREES
42 DISCRETION OF COURT AS TO DECLARATION OF STATUS OR RIGHT
43 EFFECT OF DECLARATION
CHAPTER VII. THE APPOINTMENT OF RECEIVERS
44 APPOINTMENT OF RECEIVERS DISCRETIONARY
CHAPTER VIII. OF THE ENFORCEMENT OF PUBLIC DUTIES
PART III. PREVENTIVE RELIEF
CHAPTER IX. INJUNCTIONS GENERALLY
52 PREVENTIVE RELIEF HOW GRANTED
53 TEMPORARY INJUNCTIONS
CHAPTER X. PERPETUAL INJUNCTIONS
54 PERPETUAL INJUNCTIONS WHEN GRANTED
55 MANDATORY INJUNCTION
56 INJUNCTION WHEN REFUSED
57 INJUNCTION TO PERFORM NEGATIVE AGREEMENT
SCHEDULE. ENACTMENTS REPEALED
1Act No. I of 1877
[7th February, 1877]
An Act to define and amend the law relating to certain kinds of Specific Relief.
WHEREAS it is expedient to define and amend the law relating to certain kinds of specific relief obtainable in civil suits; It is hereby enacted as follows :
PART I
Preliminary
1. Short title. This Act may be called the Specific Relief Act, 1877.
Local extent. 2[It extends to the whole of Pakistan.]
Commencement. And it shall come into force on the first day of May, 1877.
2. [Repeal of enactments.] Rep. by the Amending Act, 1891 (XII of 1891).
1For the Statement of Objects and Reasons, see Gazette of India, 1875, Pt. V, P. 258 ; for the Report of the Select Committee, see ibid., 1876, Pt. V, p. 1445 ; for discussions in Council, see ibid., 1875, Supplement, pp. 981 and 1025 ; ibid., 1876, Supplement, p. 1284 and ibid., 1877, Supplement, p. 177. It has been extended, by notification under s. 5 of the Scheduled Districts Act, 1874 (14 of 1874), to the following Scheduled Districts, namely : the Scheduled Districts of the Punjab . . See Gazette of India, 1877, Pt. I, p. 562. SindhH . . Ditto, 1880, Pt. I, p. 676. It has been applied to Phulera in the Excluded Area of Upper Tanawalto the extent the Act is applicable in the N.W.F.P., subject to certain modifications ; and extended to the Excluded Area of Upper Tanawal (N.W.F.P.) other than Phulera with effect from such date and subject to such modifications as may br notified, see N.W.F.P. (Upper Tanawal) (Excluded Area) Laws Regulation, 1950. S. 9 has been declared to be in force in Balochistan by the British Balochistan Laws Regulation, 1913 (2 of 1913), s. 3. (w.e.f. 18th August, 1913). It has also been extended to the Leased Areas of Balochistan, see the Leased Areas (Laws) Order, 1950 (G.G.O. 3 of 1950) (w.e.f.I5th August, 1947); and applied in the Federated Areas of Balochistan, see Gazette of India, 15th August, 1937, Pt. I, p. 1499. 2Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (21 of 960), s. 3 and 2nd Sch. (w.e.f. 14th October, 1955), for the original para, as amended by A. O., 1949, Arts. 3 (2) and 4. (w.e.f. 28th March, 1949).
3. Interpretationclause. In this Act, unless there be something repugnant in the subject or .context,___
“obligation” includes every duty enforceable by law:
“trust” includes every species of express, implied, or constructive fiduciary ownership:
“trustee” includes every person holding, expressly, by implication, or constructively, a fiduciary character:
Illustrations
(a) Z bequeaths land to A, “not doubting that he will pay thereout an annuity of Rs. 1,000 to B for his life”. A accepts the bequest. A is a trustee, within the meaning of this Act, for B, to the extent of the annuity.
(b) A is the legal, medical, or spiritual adviser of B. By availing himself of his situation as such adviser, A gains some pecuniary advantage which might otherwise have accrued to B. A is a trustee, for B, within the meaning of this Act, of such advantage.
(c) A, being B’s banker, discloses for his own purpose the state of B’s account. A is a trustee, within the meaning of this Act, for B, of the benefit gained by him by means of such disclosure.
(d) A, the mortgagee of certain leaseholds, renews the lease in his own name. A is a trustee, within the meaning of this Act, of the renewed lease, for those interested in the original lease.
(e) A, one of several partners, is employed to purchase goods for the firm. A, unknown to his copartners, supplies them, at the marketprice, with goods previously bought by himself when the price was lower, and thus makes a considerable profit. A is a trustee for his co partners, within the meaning of this Act, of the profit so made.
(f) A, the manager of B’s indigofactory, becomes agent for C, a vendor of indigoseed, and receives, without B’s assent, commission on the seed purchased from C for the factory. A is a trustee, within the meaning of this Act, for B, of the commission so received.
(g) A buys certain land with notice that B has already contracted to buy it. A is a trustee, within the meaning of this Act, for B, of the land so bought.
(h) A buys land from B, having notice that C is in occupation of the land. A omits to make any inquiry as to the nature of C’s interest therein. A is a trustee, within the meaning of this Act, for C, to the extent of that interest.
“settlement “ means any instrument (other than a will or codicil as defined by the Indian Succession Act (X of 1865)1) whereby. the destination or devolution of successive interests in moveable or immoveable property is disposed of or is agreed to be disposed of :
Words defined in Contract Act. And all words occurring in this Act, which are defined in the Contract Act, 1872 (IX of 1872), shall be deemed to have the meanings respectively assigned to them by that Act.
4. Savings. Except where it is herein otherwise expressly enacted, nothing in this Act shall be deemed—
1See now the Succession Act, 1925 (39 of 1925).
(a) to give any right to relief in respect of any agreement which is not a contract;
(b) to deprive any person of any right to relief, other than specific performance, which he may have under any contract; or
(c) to affect the operation of the Indian Registration Act1 on documents.
5. Specific relief how given. Specific relief is given—
(a) by taking possession of certain property and delivering it to a claimant;
(b) by ordering a party to do the very act which he is under an obligation to do ;
(c) by preventing a party from doing that which he is under an obligation not to do ;
(d) by determining and declaring the rights of parties otherwise than by an award of compensation; or
(e) by appointing a receiver.
6. Preventive relief. Specific relief granted under clause (c) of section 5 is called preventive relief.
7. Relief not granted to enforce penal law. Specific relief cannot be granted for the mere purpose of enforcing a penal law.
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PART II
Of Specific Relief
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CHAPTER I
OF RECOVERING POSSESSION OF PROPERTY
(a) Possession of Immoveable Property
8. Recovery of specific immoveable property. A person entitled to the possession of specific immoveable property may recover it in the manner prescribed by the Code of Civil Procedure 2.
39. Suit by person dispossessed of immoveable property. If any person is dispossessed without his consent of f immoveable property otherwise than in due course of law, he or any person claiming through him may, by suit 4* * * recover possession thereof, notwithstanding any other title that may be set up in such suit.
1See now the Registration Act, 1908 (16 of 1908). 2See now the Code of Civil Procedure, 1908 (Act 5 of 1908). 3But see as to tenancies in the Punjab, the Punjab Tenancy Act, 1887 (16 of 1887), s. 51. 4The words “instituted within six months from the date of the dispossession” rep. by the Repealing and Amending Act, 1891 (12 of 1891) (w.e.f.21st March, 1891).
Nothing in this section shall bar any person from suing to establish his title to such property and to recover possession thereof.
No suit under this section shall be brought against 1[the 2[Federal Government] or any Provincial Government].
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.
(b) Possession of Moveble Property
10. Recovery of specific moveable property. A person entitled to the possession of specific moveable property may recover the same in the manner prescribed by the Code of Civil Procedure3.
Explanation 1. A trustee may sue under this section for the possession of property to the beneficial interest in which the person for whom he is trustee is entitled.
Explanation 2. A special or temporary right to the present possession of property is sufficient to support a suit under this section.
Illustrations
(a) A bequeaths land to B for his life, with remainder to C. A dies. B enters on the land, but C, without B’s consent, obtains possession of the title deeds. B may recover them from C.
(b) A pledges certain Jewels to B to secure a loan. B disposes of them before he is entitled to do so. A, without having paid or tendered the amount of the loan, sues B for possession of the jewels. The suit should be dismissed, as A is not entitled to their possession, whatever right he may have to secure their safe custody.
(c) A receives a letter addressed to him by B. B gets back the letter without A’s consent. A has such a property therein as entitles him to recover it from B.
(d) A deposit books and papers for safe custody with B. B loses them and C finds them, but refuses to deliver them to B when demanded. B may recover them from C, subject to C’s right, if any, under section 168 of the Contract Act, 1872 (IX of 1872).
(e) A, a warehousekeeper, is charged with the delivery of certain goods to Z, which B takes out of A’s possession. A may sue B for the goods.
11. Liability of person in possession, not as owner, to deliver to person entitled to immediate possession. Any person having the possession or control of a particular article of moveable property, of which he is not the owner, may be compelled specifically to deliver it to the, person entitled to its immediate possession, ill any of the following cases :
(a) when the thing claimed is held by the defendant as the agent or trustee of the claimant;
1The original words “the Government” were first subs. by A. O., 1937 (w.e.f. 1st April, 1937) and then amended by A. O., 1949 (w.e.f. 28th March, 1949) to read as above. 2Subs. by F. A. O., 1975, Art. 2, for “Central Government” (w.e.f. 28th July, 1975). 3See now the Code of Civil Procedure, 1908 (Act 5 of 1908).
(b) when compensation in money would not afford the claimant 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 claimant.
Illustrations
of clause (a)—
A, proceeding to Europe, leaves his furniture in charge of B as his agent during his absence. B, without A’s authority, pledges the furniture to C, and C, knowing that B had no right to pledge the furniture, advertises it for sale. C may be compelled to deliver the furniture to A, for he holds it as A’s trustee.
of clause (b)—
Z has got possession of an idol belonging to A’s family, and of which A is the proper custodian. Z may be compelled to deliver the idol to A.
of clause (c)
A is entitled to a picture by a dead painter and a pair of rare China vases. B has possession of them. The articles are of too special a character to bear an ascertainable marketvalue. B may be compelled to deliver them to A.
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CHAPTER II
OF THE SPECIFIC PERFORMANCE OF CONTRACTS
(a) Contracts which may be specifically enforced
12. Cases in which specific performance 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 the act agreed to be done is in the performance, wholly or partly, of a trust;
(b) when 1[their] exists no standard for ascertaining the actual damage caused by non performance of the act agreed to be done;
(c) when the act agreed to be done is such that pecuniary compensation for its non performance would not afford adequate relief; or
(d) when it is probable that pecuniary compensation cannot be got for the nonperformance of the act agreed to be done.
1See. should read “there”.
Explanation.Unless and until the contrary is proved, the Court shall presume that the breach of a contract to transfer immoveable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer moveable property can be thus relieved.
Illustrations
1* * * * * * *
of clause (b)—
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 nonperformance.
of clause (c)—
A contracts with B to sell him a house for Rs. 1,000. B is entitled to a decree directing A to convey the house to him, he paying the purchasemoney.
In consideration of being released from certain obligations imposed on it by its act of Incorporation, a railwaycompany contract with Z to make an archway through their railway to connect lands of Z served by the railway, to construct a road between certain specified points, to pay a certain annual sum towards the maintenance of this road, and also to construct a siding and a wharf as specified in the contract. Z is entitled to have this contract specifically enforced, for his interest in its performance cannot be adequately compensated for by money: and the Court may appoint a proper person to superintend the construction of the archway, road, siding and wharf.
A contracts to sell, and B contracts to buy, a certain number of railway shares of a particular description. A refuses to complete the sale. B may compel A specifically to perform this agreement, for the shares are limited in number and not always to be had in the market, and their possession carries with it the status of a shareholder, which cannot otherwise be procured.
A contracts with B to paint a picture for B, who agrees to pay therefor Rs. 1,000. The picture is painted. B is entitled to have it delivered to him on payment or tender of the Rs. 1,000.
of clause (d)—
A transfers without endorsement, but for valuable consideration, a promissory note to B. A becomes insolvent, and C is appointed his assignee. B may compel C to endorse the note, for C has succeeded to A’s liabilities, and a decree for pecuniary compensation for not endorsing the note would be fruitless.
13. Contract of which the subject has partially ceased to exist. Notwithstanding anything contained in section 56 of the Contract Act, 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.
2* * * * * * *
1The first Illustration omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s.3 and 2nd Sch. 2Omitted by Ord. No. XXII of 1983, s.2.
14. Specific performance of part of contract where part unperformed is small. Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in 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) A contracts to sell B a piece of lane consisting of 100 bighas. It turns out that 98 bighas of the land belong to A, and the two 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 not 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 purchasemoney less a sum awarded as compensation for the deficiency.
(b) In a contract for the sale and purchase of a house and lands for two lacs of rupees, it is agreed that part of the furniture should be taken at a valuation. The Court may direct specific performance of the contract notwithstanding the parties are unable to agree as to the valuation of the furniture, and may either have the furniture valued in the suit and include it in the decree for specific performance, or may confine its decree to the house.
15. Specific performance of part of contract where part unperformed 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 specifically so much of his part of the contract as he can perform, provided that the plaintiff relinquishes all claim to further performance, and all right to compensation either for the deficiency, or for the loss or damage sustained by him through the default of the defendant.
Illustrations
(a) A contracts to sell to B a piece of land consisting of 100 bighas. It turns out that 50 bighas of the land belong to A, and the other 50 bighas to a stranger, who refuses to part with them. A cannot obtain it decree against B for the specific performance of the contract; but if B is willing to pay the price agreed upon, and to take the 50 bighas which belong to A, 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 those 50 bighas to him on payment of the purchasemoney.
(b) A contracts to sell to B an estate with a house and garden for a lakh of rupees. 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 B is willing to pay the price agreed upon, 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, be is entitled to a decree directing A to convey the house to him on payment of the purchasemoney.
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 to be specifically performed, the Court may direct specific performance of the former part.
17. Bar in other cases of specific performance of part of 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.
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 vendor’s or lessor’s 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 purchasemoney, 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.
19. Power to award compensation in certain cases. Any person suing for the specific performance of a contract may also ask for compensation for its breach, either in addition to, or in substitution for, such performance.
If in any such suit the Court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant and that the plaintiff is entitled to compensation for that breach, it shall award him compensation accordingly.
If in any such suit the Court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly.
Compensation awarded under this section may be assessed in such manner as the Court may direct.
Explanation. The circumstance that the contract has become incapable of specific performance does not preclude the Court from exercising the jurisdiction conferred by this section.
Illustrations of the second paragraph___
A contracts to sell a hundred maunds of rice to B. B brings a suit to compel A to perform the contract or to pay compensation. The Court is of opinion that A has made a valid contract and has broken it, without excuse, to the injury of B, but that specific performance is not the proper remedy. It shall award to B such compensation as it deems just.
of the third paragraph___
A contracts with B to sell him a house for Rs. 1,000, the price to be paid and the possession given on the 1st January 1877. A fails to perform his part of the contract, and B brings his suit for specific performance and compensation, which is decided in his favour on the 1st January, 1878. The decree may, besides ordering specific performance, award to B compensation for any loss which he has sustained by A’s refusal.
of the Explanation___
A, a purchaser, sues B, his vendor, for specific performance of a contract for the sale of a patent. Before the hearing of the suit the patent expires. The Court may award A compensation for the non performance of the contract, and may, if necessary, amend the plaint for that purpose.
A sues for the specific performance of a resolution passed by the Directors of a public company, under which he was entitled to have a certain number of shares allotted to him, and for compensation for the nonperformance of the resolution. All the shares had been allotted before the institution of the suit. The Court may, under this section, award A compensation for the nonperformance.
20. Liquidation of damages not a bar to specific performance. A contract, otherwise proper to be specifically enforced, may be thus enforced, though a sum be named in it as the amount to be paid in case of its breach, and theparty in default is willing to pay the same.
Illustration
A contracts to grant B an underlease of property held by A under C, and that he will apply to C for a license necessary to the validity of the underlease, and that, if the license is not procured, A will pay B Rs. 10,000. A refuses to apply for the license and offers to pay B the Rs. 10,000. Bis never theless entitled to have the contract specifically enforced if C consents to give the license.
(b) Contracts which cannot be specifically enforced
21. Contracts not specifically enforceable. The following contracts cannot be specifically enforced:–
(a) a contract for the nonperformance 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 qualifications 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 the terms of which the Court cannot find with reasonable certainty; (d) contract which is in its nature revocable; (e) a contract made by trustees either in excess of their powers or in breach of their trust;
(f) a contract made by or on behalf of a corporation or public company created for special purposes, or by the promoters of such company, which is in excess of its powers;
(g) a contract the performance of which involves the performance of a continuous duty extending over a longer period than three years from its date;
(h) a contract of which a material part of the subjectmatter, supposed by both parties to exist, has, before it has been made, ceased to exist.
And, save as provided by the l[Arbitration Act, 1940 (X of 1940)], no contract to refer 2[present or future differences] to arbitration shall be specifically enforced; 3but if any person who has made such a contract 4[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.
Illustrations
to (a)___
A contracts to sell, and B contracts to buy, a lakh of rupees in the four per cent, loan of the 5[Federal Government].
A contracts to sell, and B contracts to buy, 40 chests of indigo at Rs. 1,000 per chest:
In consideration of certain property having been transferred by A to B, B contracts to open a credit in A’s favour to the extent of Rs. 10,000, and to honour A’s drafts to that amount;
The above contracts cannot be specifically enforced, for in the first and second both A and B, and in the third A, would be reimbursed by compensation in money.
to (b)___
A contracts to render personal service to B:
A contracts to employ B on personal service:
A, an author, contracts with B, a publisher, to complete a litrary work:
B cannot enforce specific performance of these contracts.
A contracts to buy B’s business at the amount of a valuation to be made by two valuers, one to be named by A and the other by B. A and B each name a valuer, but before the valuation is made, A instructs his valuer not to proceed:
1Subs. by the Arbitration Act,1940 (10 of 1940), s. 49 and IV Sch., (w.e.f. 1st July, 1940) for “Code of Civil Procedure, [and the Indian Arbitration Act, 1899”. The words in brackets had been ins. by the Indian Arbitration Act, 1899 (9 of 1899), s. 21 (w.e.f. 1st July, 1899). 2Subs. by Act, 9 of 1899, s. 21 for “a controversy”. 3The last thirtyseven words of s. 21, do not apply to any submission or arbitration to which the provisions of the Indian Arbitration Act, 1899 (9 of 1899), for the time being apply (see s. 3 of that Act), or to any agreement to refer to arbitration or to any award to which Sch. II of the Code of Civil Procedure, 1908, applies, see para. 22 of that Schedule. 4Ins. by Act 10 of 1940, s. 49 and IV Sch. 5Subs. by F.A.O., 1975, Art. 2, for “Central Government” (w.e.f . 28th July, 1975) which had been subs. by A. O.,1937, for “G. of I.”.
By a charterparty entered into in l[Chittagong] between A, the owner of a ship, and B, the charterer, it is agreed that the ship shall proceed to 2[Karachi] and there load a cargo of rice, and thence proceed to London, freight to be paid, onethird on arrival at 2[Karachi], and twothirds on delivery of the cargo in London;
A lets land to Band B contracts to cultivate it in a particular manner for three years next after the date of the lease:
A and B contract that, in consideration of annual advances to be made by A, B will for three years next after the date of the contract grow particular crops on the land in his possession and deliver them to A when cut and ready for delivery:
A contracts with B that, in consideration of Rs.1,000 to be paid to him by B, he will paint a picture for B :
A contracts with B to execute certain works which the Court cannot superintend:
A contracts to supply B with all the goods of a certain class which B may require:
A contracts with B to take from B a lease of a certain house for a specified term, at a specified rent, "if the drawingroom is handsomely decorated," even if it is held to have so much certainty that compensation can be recovered for its breach:
A contracts to marry B :
The above contracts cannot be specifically enforced.
to (c)–
A, the owner of a refreshmentroom, contracts, with B to give him accommodation there for the sale of his goods and to furnish him with the necessary appliances. A refuses, to perform his contract. The case is one for compensation and not for specific performance, the amount and the nature of the accommodation and appliances being undefined.
to (d)–
A and B contract to become partners in a certain business, the contract not specifying the duration of the proposed partnership. This contract cannot be specifically performed, for, if it were so performed, either A or B might at once dissolve the partnership.
1Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (21 of 1960), s. 3 and 2nd Sch., for "Calcutta” (w.e.f. 14th October, 1955). 2Subs. ibid., for “Rangoon” (w.e.f. 14th October, 1955).
to (e)–
A is a trustee of land with power to lease it for seven years. He enters into a contract with B to grant a lease of the land for seven years, with a covenant to renew the lease at the expiry of the term. This contract cannot be specifically enforced.
The Directors of a company have power to sell the concern with the sanction of a general meeting of the shareholders. They contract to sell it without any such sanction. This contract cannot be specifically enforced.
Two trustees, A and B, empowered to sell trustproperty worth a lakh of rupees, contract to sell it to C for Rs. 30,000. The contract is so disadvantageous as to be a breach of trust. C cannot enforce its specific performance.
The promoters of a company for working mines contract that the company, when formed, shall purchase certain mineral property. They take no proper precautions to ascertain the value of such property and in fact agree to pay an extravagant price therefor. They also stipulate that the vendors shall give them a bonus out of the purchasemoney. This contract cannot be specifically enforced.
to (f)–
A company existing for the sole purpose of making and working a railway contract for the purchase of a piece of land for the purpose of erecting a cottonmill thereon. This contract cannot be specifically enforced.
to (g)–
A contracts to let for twentyone years to B the right to use such part of a certain railway made by A as was upon B’s land, and that B should have a right of running carriages over the whole line on certain terms, and might require A to supply the necessary enginepower, and that A should during the term keep the whole railway in good repair. Specific performance of this contract must be refused to B.
to (h)–
A contracts to pay an annuity to B for the lives of C and D. It turns out that, at the date of the contract, C, though supposed by A and B to be alive, was dead. The contract cannot be specifically performed.
(c) Of the Discretion of the Court
22. Discretion as to decreeing specific performance. 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; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal.
The following are cases in which the Court may properly exercise a discretion not to decree specific performance:___
I. Where the circumstances under which the contract is made are such as to give the plaintiff an unfair advantage over the defendant, though there may be no fraud or misrepresentation on the plaintiff’s part.
Illustrations
(a) A, a tenant for life of certain property, assigns his interest therein to B. C contracts to buy, and B contracts to sell, that interest. Before the contract is completed, A receives a mortal injury from the effects of which he dies the day after the contract is executed. If B and C were equally ignorant or equally aware of the fact, B is entitled to specific performance of the contract. If B knew the fact, and C did not, specific performance of the contract should be refused to B.
(b) A contracts to sell to B the interest of C in certain stockintrade. It is stipulated that the sale shall stand good, even though it should turn out that C’s interest is worth nothing. In fact, the value of C’s interest depends on the result of certain partnershipaccounts, on which he is heavily in debt to his partners. This indebtedness is known to A, but not to B. Specific performance of the contract should be refused to A.
(c) 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.
(d) A’s property is put up to auction. B requests C, A’s attorney, to bid for him. C does this inadvertently and in good faith. The persons present, seeing the vendor’s attorney bidding, think that he is a mere puffer and cease to compete. The lot is knocked down to B at a low price. Specific performance of the contract should be refused to B.
II. Where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its nonperformance would involve no such hardship on the plaintiff.
Illustrations
1* * * * * * *
(f) A and B, trustees, join their beneficiary, C, in a contract to sell the trustestate to D, and personally agree to exonerate the estate from heavy encumbrances to which it is subject. The purchasemoney is not nearly enough to discharge those encumbrances, though, at the date of the contract, the vendors believed it to be sufficient. Specific performance of the contract should be refused to D.
(g) A, the owner of an estate, contracts to sell it to B, and stipulates that he, A, shall not be obliged to define its boundary. The estate really comprises a valuable property, not known to either to be part of it. Specific performance of the contract should be refused to B unless he waives his claim to the unknown property.
(h) A contracts with B to sell him certain land, and to make a road to it from a certain railwaystation. It is found afterwards that A cannot make the road without exposing himself to litigation. Specific performance of the part of the contract relating to the road should be refused to B, even though it may be held that he is entitled to specific performance of the rest with compensation for loss of the road.
(i) A, a lessee of mines, contracts with B, his lessor, that at any time during the continuance of the lease B may give notice of his desire to take the machinery and plant used in and about the mines, and that he shall have the articles specified in his notice delivered to him at a valuation on the expiry of the lease. Such a contract might be most injurious to the lessee’s business, and specific performance of it should be refused to B.
(j) A contracts to buy certain land from B. The contract is silent as to access to the land. No right of way to it can be shown to exist. Specific performance of the contract should be refused to B.
(k) A contracts with B to buy from B’s manufactory and not elsewhere all the goods of a certain class used by A in his trade. The Court cannot compel B to supply the goods, but if he does not supply them, A may be ruined unless he is allowed to buy them elsewhere. Specific performance of the contract should be refused to B.
The following is a case in which the Court may properly exercise a discretion to decree specific performance:__
III. Where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
Illustration
A sells land to a railwaycompany, who contract to execute certain works for his convenience. The company take the land and use it for their railway. Specific performance of the contract to execute the works should be decreed in favour of A.
1Omitted by Ord. No. XXII of 1983, s.3.
(d) For whom Contracts may be specifically enforced
23. Who may obtain specific performance. Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by–
(a) any party thereto;
(b) the representative in interest or the principal, of any party thereto: provided that where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned his representative in interest or his principal shall not be entitled to specific performance of the contract, unless where his part thereof has already been performed;
(c) where the contract is a settlement on marriage, or a compromise of doubtful rights between members a of the same family, any person beneficially entitled there under;
(d) where the contract has been entered into by a tenant for life in due exercise of a power, the remainder man;
(e) a reversioner in possession, where the agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant;
(f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is entitled to the benefit thereof and will sustain material injury by reason of its breach;
(g) when a public company has entered into a contract and subsequently becomes amalgamated with another public company, the new company which arises out of the amalgamation;
(h) when the promoters of a public 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.
(e) For whom Contracts cannot be specifically enforced.
24. Personal bars to the relief. Specific performance of a contract cannot be enforced in favour of a person
(a) who could not recover compensation for its breach;
(b) who has become incapable of performing, or violates, any essential term of the contract that on his part remains to be performed;
(c) who has already chosen his remedy and obtained satisfaction for the alleged breach of contract; or
(d) who, previously to the contract, had notice that a settlement of the subjectmatter thereof (though not founded on any valuable consideration) had been made and was then in force.
Illustrations
to clause (a)
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, but on his own account. A cannot enforce specific performance of this contract.
to clause (b)
A contracts to sell B a house and to become tenant thereof for a term of fourteen years from the date of the sale at a specified yearly rent. A becomes insolvent. Neither he nor his assignee 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.
A, holding land under a contract with B for a lease, commits waste, or treats the land in an unhusband like manner. A cannot enforce specific performance of the contract.
A contracts to let, and B contracts to take, an unfinished house, B contracting to finish the house and the lease to contain covenants on the part of A to keep the house in repair. B finishes the house in a very defective manner: he cannot enforce the contract specifically, though A and B may sue each other for compensation for breach of it.
to clause (c)
A contracts to let, and B contracts to take, a house for a specified term at a specified rent. B refuses to perform the contract. A thereupon sues for, and obtains, compensation for the breach. A cannot obtain specific performance of the contract.
25. Contracts to sell property by one who has no title or who is a voluntary settler. A contract for the sale or letting of property, whether moveable or immoveable, cannot be specifically enforced in favour of a vendor or lessor–
(a) who, knowing himself not to have any title to the property, has contracted to sell or let the same;
(b) who, though he entered into the contract believing that he had a good title to the property, cannot; at the time fixed by the parties or by the Court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt;
(c) who, previous to entering into the contract, has made settlement (though not founded on any valuable consideration) of the subjectmatter of the contract.
Illustrations
(a) A, without C’s authority, contracts to sell to B an estate which A knows to belong to C. A cannot enforce specific performance of this contract, even though C is willing to confirm.
(b) A bequeaths his land to trustees declaring that they may sell it with the consent in writing of B. B gives a general prospective assent in writing to any sale which the trustees may make. The trustees then enter into a contract with C to sell him the land. C refuses to carry out the contract. The trustees cannot specifically enforce this contract, as in the absence of B’s consent to the particular sale to C, the title which they can give C is, as the law stands, not free from reasonable doubt.
(c) A, being in possession of certain land, contracts to sell it to Z. On inquiry it turns out that A claims the land as heir of B, who left the country several years before, and is generally believed to be dead, but of whose death there is no sufficient proof. A cannot compel Z specifically to perform the contract.
(d) A, out of natural love and affection, makes a settlement of certain property on his brothers and their issue, and afterwards enters into a contract to sell the property to a stranger. A cannot enforce specific performance of this contract so as to override the settlement, and thus prejudice the interests of the persons claiming under it.
(f) For whom Contracts cannot be specifically enforced, except with a Variation.
26. Non enforcement except with variation. Where a plaintiff seeks specific performance of a contract in writing, to which the defendant sets up a variation, the plaintiff cannot obtain the performance sought, except with the variation so set up, in the following cases (namely):
(a) where by fraud or mistake of fact the contract of which performance is sought is in terms different from that which the defendant supposed it to be when he entered into it ;
(b) where by fraud, mistake of fact, or surprise the defendant entered into the contract under a reasonable misapprehension as to its effect as between himself and the plaintiff ;
(c) where the defendant, knowing the terms of the contract and understanding its effect, has entered into it relying upon some misrepresentation by the plaintiff, or upon some stipulation on the plaintiff’s part, which adds to the contract, but which he refuses to fulfill ;
(d) where the object of the parties was to produce a certain legal result, which the contract as framed is not calculated to produce;
(e) where the parties have, subsequently to the execution of the contract, contracted to vary it.
Illustrations
(a) A, B and C sign a writing by which they purport to contract each to enter into a bond to D for Rs. 1,000. In a suit by D, to make A, B and C separately liable each to the extent of Rs. 1,000, they prove that the word “each” was inserted by mistake; that the intention was that they should give a joint bond for Rs. 1,000. D can obtain the performance sought only with the variation thus set up.
(b) A sues B to compel specific performance of a contract in writing to buy a dwellinghouse. B proves that he assumed that the contract included an adjoining yard, and the contract was so framed as to leave it doubtful whether the yard was so included or not. The Court will refuse to enforce the contract, except with the variation set up by B.
(c) A contracts in writing to let to B a wharf, together with a strip of A’s land delineated in a map. Before signing the contract, B proposed orally that he should be at liberty to substitute for the strip mentioned in the contract another strip of A’s land of the same dimensions, and to this A expressly assented. B then signed the written contract. A cannot obtain specific performance of the written contract, except with the variation set up by B.
(d) A and B enter into negotiations for the purpose of securing land for B for his life, with remainder to his issue. They execute a contract, the terms of which are found to confer an absolute ownership on B. The contract so framed cannot be specifically enforced.
(e) A contracts in writing to let a house to B, for a certain term, at the rent of Rs. 100 per month, putting it first into tenantable repair. The house turns out to be not worth repairing, so, with B’s consent, A pulls it down and erects a new house in its place: B contracting orally to pay rent at Rs. 120 per mensum. B then sues to enforce specific performance of the contract in writing. He cannot enforce it except with the variations made by the subsequent oral contract.
(g) Against whom contracts may be specifically enforced.
27. Relief against parties and persons claiming under them by subsequent title. Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against
(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;
(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;
(d) when a public company has entered into a contract and subsequently becomes amalgamated with another public company, the new company which arises out of the amalgamation;
(e) when the promoters of a public company have, before its incorporation, entered into a contract, the company: provided that the company has ratified and adopted the contract and the contract is warranted by the terms of the incorporation.
Illustrations
to clause (b)–
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.
A contracts to sell certain land to B for Rs. 5,000. A afterwards conveys the land for Rs. 6,000 to C, who has notice of the original contract. B may enforce specific performance of the contract as against C.
A contracts to sell land to B for Rs. 5,000. B takes possession of the land. Afterwards A sells it to C for Rs. 6,000. C makes no inquiry of B relating to his interest in the land. B’s possession is sufficient to affect C with notice of his interest, and he may enforce specific performance of the contract against C.
A contracts, in consideration of Rs. 1,000, to bequeath certain of his lands to B. Immediately after the contract A dies intestate, and C takes out administration to his estate. B may enforce specific performance of the contract against C.
A contracts to sell certain land to B. Before the completion of the contract, A becomes a lunatic and C is appointed his committee. B may specifically enforce the contract against C.
to clause (c)__
A, the tenant for life of an estate, with remainder to B, in due exercise of a power conferred by the settlement under which he is tenant for life, contracts to sell the estate to C, who has notice of the settlement. Before the sale is completed, A dies. C may enforce specific performance of the contract against B.
A and B are joint tenants of land, his undivided moiety of which either may alien in his lifetime, but which, subject to that right, devolves on the survivor. A contracts to sell his moiety to C and dies. C may enforce specific performance of the contract against B.
1[27A. Specific performance in case of part performance of contract to lease. Subject to the provisions of this Chapter, where a contract to lease immoveable property is made in writing signed by the parties thereto or on their behalf, either party may, notwithstanding that the contract, though required to be registered, has not been registered, sue the other for specific performance of the contract if,__
(a) where specific performance is claimed by the lessor, he has delivered possession of the property to the lessee in part performance of the contract; and
(b) where specific performance is claimed by the lessee, he has, in part performance of the contract, taken possession of the property, or, being already in possession, continues in possession in part performance of the contract, and has done some act in furtherance of the contract:
Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.
This section applies to contracts to lease executed after the first day of April, 1930.]
(h) Against whom Contracts cannot be specifically enforced
28. What parties cannot be compelled to perform. Specific performance of a contract cannot be enforced against a party thereto in any of the following cases:
(a) if the consideration to be received by him is so grossly inadequate, with reference to the state of things existing at the date of the contract, as to be either by itself or coupled with other circumstances evidence of fraud or of undue advantage taken by the plaintiff ;
(b) if his assent was obtained by the misrepresentation (whether willful or innocent), concealment, circumvention or unfair practices, of any party to whom performance would become due under the contract, or by any promise of such party which has not been substantially fulfilled;
(c) if his assent was given under the influence of mistake of fact, misapprehension or surprise: Provided that, when the contract provides for compensation in
1S. 27A ins. by the Transfer of Property (Amdt.) Supplementary Act, 1929 (21 of 1929), s. 3 (w.e.f. 1st April, 1930).
case of mistake, compensation may be made for a mistake within the scope of such provision, and the contract may be specifically enforced in other respects if proper to be so enforced.
Illustrations
to clause (c)__
A, one of two executors, in the erroneous belief that he had the authority of his coexecutor, enters into an agreement for the sale to B of his testator’s property. B cannot insist on the sale being completed.
A directs an auctioneer to sell certain land. A afterwards revokes the auctioneer’s authority as to 20 bighas of this land, but the auctioneer inadvertently sells the whole to B, who has not notice of the revocation. B cannot enforce specific performance of the agreement.
(i) The effect of dismissing a Suit for Specific Performance
29. Bar of suit for breach after dismissal. The dismissal of a suit for specific performance of a contract or part thereof shall bar the plaintiff’s right to sue for compensation for the breach of such contract or part, as the case may be.
(j) Awards and Directions to execute Settlements
30.Application of preceding sections to awards and testamentary directions to execute settlements. The provisions of this Chapter as to contracts shall, mutatis mutandis, apply to awards and to directions in a will or codicil to execute a particular settlement.
_____
CHAPTER III
OF THE RECTIFICATION OF INSTRUMENT
31. When instrument may be 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.
Illustrations
(a) A, intending to sell to B his house and one of three godowns adjacent to it, executes a conveyance 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 conveyance may, as against B and C, be rectified so as to exclude from it the godown given to C; but it cannot be rectified so as to affect D’s lease.
(b) By a marriage settlement, A, the father of B, the intended wife, covenants with C, the intended husband, to pay to C, his executors, administrators and assigns, during A’s life, an annuity of Rs. 5,000. C dies insolvent and the official assignee claims the annuity from A. The Court, on finding it clearly proved that the parties always intended that this annuity should be paid as a provision for B and her children, may rectify the settlement and decree that the assignee has no right to any Part of the annuity.
32. Presumption as to intent of parties. 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 conscientious agreement.
33. Principles of rectification. In rectifying a written instrument, the Court may inquire what the instrument was intended to mean, and what were intended to be its legal consequences, and is not confined to the inquiry what the language of the instrument was intended to be.
34. Specific enforcement of rectified contract. 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.
Illustration
A contracts in writing to pay his attorney, B, a fixed sum in lieu of costs. The contract contains mistakes as to the name and rights of the client, which, if construed strictly, would exclude B from all rights under it. B is entitled, if the Court thinks fit, to have it rectified, and to an order for payment of the sum, as if at the time of its execution it had expressed the intention of the parties.
______
CHAPTER IV
OF THE RESCISSION OF CONTRACTS
35. When rescission may be adjudged. Any person interested in a contract in writing 1may sue to have it rescinded, and such rescission may be adjudged by the Court in any of the following cases, namely:__
1The words “in writing” are rep. wherever the Transfer of Property Act, 1882 (4 of 1882), is in force, see ss. 1 and 2 of that Act.
(a) where the contract is voidable or terminable by the plaintiff ;
(b) where the contract is unlawful for causes not apparent on its face, and the defendant is more to blame than the plaintiff ;
(c) where a decree for specific performance of a contract of sale, or of a contract to take a lease, has been made, and the purchaser or lessee makes default in payment of the purchasemoney or other sums which the Court has ordered him to pay.
When the purchaser or lessee is in possession of the subject matter, and the Court finds that such possession is wrongful, the Court may also order him to pay to the vendor or lessor the rents and profits, if any, received by him as such possessor.
In the same case, the Court may, by order in the suit in which the decree has been made and not complied with, rescind the contract, either so far as regards the party in default, or altogether as the justice of the case may require.
Illustrations
to (a)–
A sells a field to B. There is a right of way over the field of which A has direct personal knowledge, but which he conceals from B. B is entitled to have the contract rescinded.
to (b)–
A, an attorney, induces his client B, a Hindu widow, to transfer property to him, for the purpose of defrauding B’s creditors. Here the parties are not equally in fault, and B is entitled to have the instrument of transfer rescinded.
36. Rescission for mistake. Rescission of a contract in writing1 cannot be adjudged for mere mistake, unless the party against whom it is adjudged can be restored to substantially the same position as if the contract had not been made.
37. Alternative prayer for rescission in suit for specific performance. A plaintiff instituting a suit for the specific performance of a contract in writing may pray in the alternative that, if the contract cannot be specifically enforced, it may be rescinded and delivered up to be cancelled; and the Court, if it refuses to enforce the contract specifically, may direct it to be rescinded and delivered up accordingly.
38. Court may require party rescinding to do equity.–On adjudging the rescission of a contract, the Court may require the party to whom such relief is granted to make any compensation to the other which justice may require.
________
CHAPTER V
OF THE CANCELLATION OF INSTRUMENTS
39. When cancellation may be ordered. Any person against whom a written instrument is void or voidable, who has reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, may sue to have it adjudged void or voidable; and the Court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.
If the instrument has been registered under the Indian Registration Act2, the Court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation.
Illustrations
(a) A, the owner of a ship by fraudulently representing her to be seaworthy, induces B, an underwriter, to insure her. B may obtain the cancellation of the policy.
(b) A conveys land to B, who bequeaths it to C and dies. Thereupon D gets possession of the land and produces a forged instrument stating that the conveyance was made to B in trust for him. C may obtain the cancellation of the forged instrument.
(c) A, representing that the tenants on his land were all at will, sells it to B, and conveys it to him by an instrument, dated the 1st January 1877. Soon after that day, A fraudulently grants to C a lease of part of the lands, dated the 1st October, 1876, and procures the lease to be registered under the Indian Registration Act.3 B may obtain the cancellation of this lease.
1The words “in writing” are rep. wherever the Transfer of Property Act, 1882 (4 of 1882), is in force, see ss. 1 and 2 of that Act. 2See now the Registration Act, 1908 (16 of 1908). 3See now the Registration Act, 1908 (16 of 1908).
(d) A agrees to sell and deliver a ship to B, to be paid for by B’s acceptances of four bills of exchange, for sums amounting to Rs, 30,000 to be drawn by A on B. The bills are drawn and accepted, but the ship is not delivered according to the agreement. A sues B on one of the bills, B may obtain the cancellation of all the bills.
40. What instruments may be partially cancelled. Where an instrument is evidence of different rights or different obligations, the Court may, in a proper case, cancel it in part and allow it to stand for the residue.
Illustration
A draws a bill on B, who endorses it to C, by whom it appears to be endorsed to D, who endorses it to E. C’s endorsement is forged. C is entitled to have such endorsement cancelled, leaving the bill to stand in other respects.
41. Power to require party for whom instrument is cancelled to make compensation. On adjudging the cancellation of an instrument, the Court may require the party to whom such relief is granted to make any compensation to the other which justice may require.
______
CHAPTER VI OF DECLARATORY DECREES
42. 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:
Bar to such declaration. 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.
Explanation. A trustee of property is a “person interested to deny” a title adverse to the title of some one who is not in existence, and for whom, if in existence, he would be a trustee.
Illustrations
(a) A is lawfully in possession of certain land. The inhabitants of a neighbouring village claim a right of way across the land. A may sue for a declaration that they are not entitled to the right so claimed.
(b) A bequeaths his property to B, C and D, “to be equally divided amongst all and each of them, if living at the time of my death, then amongst their surviving children.” No such children are in existence. In a suit against A’s executor, the Court may declare whether B, C and D took the property absolutely, or only for their lives, and it may also declare the interests of the children before their rights are vested.
.
(c) A covenants that, if he should at any time be entitled to property exceeding one lakh of rupees, he will settle it upon certain trusts. Before any such property accrues, or any persons entitled under the trusts are ascertained, he institutes a suit to obtain a declaration that the covenant is void for uncertainty. The Court may make the declaration.
(d) A alienates to B property in which A has merely a life interest. The alienation is invalid as against C, who is entitled as reversioner. The Court may in a suit by C against A and B declare that C is so entitled.
(e) The widow of a sonless Hindu alienates part of the property of which she is in possession as such. The person presumptively entitled to possess the property if he survive her may, in a suit against the alienee, obtain a declaration that the alienation was made without legal necessity and was therefore void beyond the widow’s lifetime.
(f) A Hindu widow in possession of property adopts a son to her deceased husband. The person presumptively entitled to possession of the property on her death without a son may, in a suit against the adopted son, obtain a declaration that the adoption was invalid.
(g) 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.
(h) A bequeaths property to B for his life, with remainder to B’s wife and her children if any, by B, but if B die without any wife or children, to C. B has a putative wife, D, and children, but C denies that B and D were ever lawfully married. D and her children, may, in B’s lifetime, institute a suit against C and obtain therein a declaration that they are truly the wife and children of B.
43. Effect of declaration. A declaration made under this Chapter is binding only on the parties to the suit, persons claiming through them respectively, and, where any of the parties are trustees, on the persons for whom, if in existence at the date of the declaration, such parties would be trustees.
Illustration
A, a Hindu, in a suit to which B, his alleged wife, and her mother, are defendants, seeks a declaration that his marriage was duly solemnized and an order for the restitution of his conjugal rights. The Court makes the declaration and order. C, claiming that B is his wife, then sues A for the recovery of B. The declaration made in the former suit is not binding upon C.
CHAPTER VII OF THE APPOINTMENT OF RECEIVERS
44. Appointment of receivers discretionary. The appointment of a receiver pending a suit is a matter resting in the discretion of the Court.
Reference to Code of Civil Procedure. The mode and effect of his appointment, and his rights, powers duties and liabilities, are regulated by the Code of Civil Procedure1.
1See now the Code of Civil Procedure, 1908 (Act 5 of 1908).
CHAPTER VIII.____[Of the Enforcement of Public Duties.] Omitted by the Federal Laws (Revision and Declaration ) Ordinance, 1981 (XXVII of 1981), s. 3 and IInd Sch.
PART III Of Preventive Relief
______ CHAPTER IX
OF INJUNCTIONS GENERALLY
52. Preventive relief how granted. Preventive relief is granted at the discretion of the Court by injunction, temporary or perpetual.
53. Temporary injunctions. Temporary injunctions are such as are to continue until a specified time, or until the further order of the Court. They may be granted at any period of a suit, and are
regulated by the 1[Code of Civil Procedure, 1908 (Act V of 1908).]
Perpetual injunctions. A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit: the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff.
–––– CHAPTER X
OF PERPETUAL INJUNCTIONS
54. Perpetual injunctions when granted. Subject to the other provisions contained in, or referred to by, this Chapter, a perpetual injunction may be granted to prevent the breach of an obligation existing in favour of the applicant, whether expressly or by implication.
When such obligation arises from contract, the Court shall be guided by the rules and provisions contained in Chapter II of this Act.
When the defendant invades or threatens to invade the plaintiff’s right to, or enjoyment of, property, the Court may grant a perpetual injunction in the following cases (namely):
(a) where the defendant is trustee of the property for the plaintiff ; (b) where there exists no standard for ascertaining the actual damage caused, or likely to be caused, by the invasion;
(c) where the invasion is such that pecuniary compensation would not afford adequate relief; (d) where it is probable that pecuniary compensation can not be got for the invasion; (e) where the injunction is necessary to prevent a multiplicity of judicial proceedings.
lSubs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and 2nd Sch., for “Code of Civil Procedure”.
Explanation.For the purpose of this section a trademark is property .
Illustrations
(a) A lets certain lands to B and B contracts not to dig sand or gravel thereout. A may sue for an injunction to restrain B from digging in violation of his contract.
(b) A trustee threatens a breach of trust. His cotrustees, if any, should, and the beneficial owners may, sue for an injunction to prevent the breach.
(c) The directors of a public company are about to pay a dividend 1out of capital or borrowed money. Any of the shareholders may sue for an injunction to restrain them.
(d) The directors of a fire and lifeinsurance company are about to engage in marine insurances. Any of the shareholders may sue for an injunction to restrain them.
(e) A, an executor, through misconduct or insolvency, is bringing the property of the deceased into danger. The Court may grant an injunction to restrain him from getting in the assets.
(f) A, a trustee for B, is about to make an imprudent sale of a small part of the trustproperty. B may sue for an injunction to restrain the sale, even though compensation in money would have afforded him adequate relief.
(g) A makes a settlement (not founded on marriage or other valuable consideration) of an estate on B and his children. A then contracts to sell the estate to C. B or any of his children may sue for an injunction to restrain the sale.
(h) In the course of A’s employment as a vakil, certain papers belonging to his client, B, come into his possession. A threatens to make these papers public, or to communicate their contents to a stranger. B may sue for an injunction to restrain A from so doing.
(i) A is B’s medical adviser. He demands money of B which B declines to pay. A then threatens to make known the effect of B’s communications to him as a patient. This is contrary to A’s duty, and B may sue for an injunction to restrain him from so doing.
(j) A, the owner of two adjoining houses, lets one to B and afterwards lets the other to C. A and C begin to make such alterations in the house let to C as will prevent the comfortable enjoyment of the house let to B. B may sue for an injunction to restrain them from so doing.
(k) A lets certain arable lands to B for purposes of husbandry, but without any express contract as to the mode of cultivation. Contrary to the mode of cultivation customary in the district, B threatens to show the lands with seed injurious thereto and requiring many years to eradicate. A may sue for an injunction to restrain B from sowing the lands in contravention of his implied contract to use them in a husband like manner.
(l) A, B and C are partners, the partnership being determinable at will. A threatens to do an act tending to the destruction of the partnershipproperty. B and C may, without seeking a dissolution of the partnership, sue for an injunction to restrain A from doing the act.
(m) A, a Hindu widow in possession of her deceased husband’s property, commits destruction of the property without any cause sufficient to justify her in so doing. The heirexpectant may sue for an injunction to restrain her.
(n) A, B and C are members of an undivided Hindu family. A cuts timber growing on the familyproperty, and threatens to destroy part of the familyhouse and to sell some of the familyutensils. B and C may sue for an injunction to restrain him.
1A Railway Company may, however, pay interest on its paidup share capital out of capital, for a certain period and subject to certain restrictions and conditions: see the Indian Railway Companies Act, 1895 (10 of 1895), s.3.
(o) A, the owner of certain houses in 1[Karachi], becomes insolvent B buys them from the Official Assignee and enters into possession. A persists in trespassing on and damaging the houses, and B is thereby compelled, at considerable expense, to employ men to protect the possession. B may sue for an injunction to restrain further acts of trespass.
(p) The inhabitants of a village claim a right of way over A’s land. In a suit against several of them, A obtains a declaratory decree that his land is subject to no such right. Afterwards each of the other villagers sues A for obstructing his alleged right of way over the land. A may sue for an injunction to restrain them.
(q) A, in an administrationsuit to which a creditor, B, is not a party, obtains a decree for the administration of C’s assets. B proceeds against C’s estate for his debt. A may sue for an injunction to restrain B.
(r) A and B are in possession of contiguous lands and of the mines underneath them2. A works his mine so as to extend under B’s mine and threatens to remove certain pillars which help to support B’s mine. B may sue for an injunction to restrain him from so doing.
(s) A rings bells or makes some other unnecessary noise so near a house as to interfere materially and unreasonably with the physical comfort of the occupier, B . B may sue for an injunction restraining A from making the noise.
(t) A pollutes the air with smoke so as to interfere materially with the physical comfort of B and C, who carry on business in a neighbouring house. B and C may sue for an injunction to restrain the pollution.
(u) A infringes B’s patent. If the Court is satisfied that the patent is valid and has been infringed, B may obtain an injunction to restrain the infringement.
(v) A pirates B’s copyright. B may obtain an injunction to restrain the piracy, unless the work of which copyright is claimed is libellous or obscene.
(w) A improperly uses the trademark of B. B may obtain an injunction to restrain the user, provided that B’s use of the trademark is honest.
(x) A, a tradesman, holds out B as his partner against the wish and without the authority of B. B may sue for an injunction to restrain A from so doing.
(y) A, a very eminent man, writes letters on familytopics to B. After the death of A and B, C who is B’s residuary legatee, proposes to make money by publishing A’s letters. D, who is A’s executor, has a properity in the letters, and may sue for an injunction to restrain C from publishing them.
(z) A carries on a manufactory and B is his assistant. In the course of his business, A imparts to B a secret process of value. B afterwards demands money of A, threatening, in case of refusal, to disclose the process to C, a rival manufacturer. A may sue for an injunction to restrain B from disclosing the process.
lSubs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and 2nd Sch., for “Chittagong” which was subs. by the Central Laws (Statute Reform) Ordinance, 1960 (21 of 1960), s. 3 and 2nd Sch., for “Calcutta” (w.e.f. 14th October, 1955). 2As to the working of mines under land, the surface of which has been acquired by Government, see the Land Acquisition (Mines) Act, 1885 (18 of 1885).
55. Mandatory injunction. When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the Court is capable of enforcing, the Court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts.
Illustrations
(a) A, by new buildings, obstructs lights to the access and use of which B has acquired a right under the l[Limitation Act, 1908 (IX of 1908)] Part IV. B may obtain an injunction, not only to restrain A from going on with the buildings, but also to pull down so much of them as obstructs B’s lights.
(b) A builds a house with eaves projecting over B’s land. B may sue for an injunction to pull down so much of the eaves as so project.
(c) In the case put as illustration (i) to section 54, the Court may also order all written communications made by B, as patient, to A, as medical adviser, to be destroyed.
(d) In the case put as illustration (y) to section 54, the Court may also order A’s letters to be destroyed.
(e) A threatens to publish statements concerning B which would be punishable under Chapter XXI of the Pakistan Penal Code (XLV of 1860). The Court may grant an injunction to restrain the publication, even though it may be shown not to be injurious to B’s property.
(f) A, being B’s medical adviser, threatens to publish B’s written communications with him, showing that B has led an immoral life. B may obtain an injunction to restrain the publication.
(g) In the cases put as illustrations (v) and (w) to section 54 and in illustrations (e) and (f) to this section, the Court may also order the copies produced by piracy, and the trademarks, statements and communications, therein’ respectively mentioned, to be given up or destroyed.
56. Injunction when refused. An injunction cannot be granted–
(a) to stay a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;
(b) to stay proceedings in a Court not subordinate to that from which the injunction is sought; (c) to restraint persons from applying to any legislative body; (d) to interfere with the public duties of any department of 2[the 3[Federal Government], 4* * * or any Provincial Government], or with the sovereign acts of a Foreign Government;
(e) to stay proceedings in any criminal matter; (f) to prevent the breach of a contract the performance of which would not be specifically enforced;
(g) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;
(h) to prevent a continuing breach in which the applicant has acquiesced;
1Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and 2nd Sch., for “Indian Limitation Act”. 2 Subs. by A. O.,1937 for “the G. of I. or the L.G.”. (w.e.f.1st April, 1937). 3 Subs. by F. A. O., 1975, Art. 2, for “Central Government” (w.e.f. 28th July, 1975). 4The words “the Crown Representative” omitted by A. O., 1949, Sch., (w.e.f. 28th March, 1949).
(i) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;
(j) when the conduct of the applicant or his agents has been such as to disentitle him to the assistance of the Court;
(k) where the applicant has no personal interest in the matter.
Illustrations
(a) A seeks an injunction to restrain his partner, B, from receiving the partnershipdebts and effects. It appears that A had improperly possessed himself of the books of the firm and refused B access to them. The Court will refuse the injunction.
(b) A manufactures and sells crucibles, designating them as “patent plumbago crucibles,” though, in fact, they have never been patented. B pirates the designation. A cannot obtain an injunction to restrain the piracy.
(c) A sells an article called “Mexican Balm,” stating that it is compounded of divers rare essences, and has sovereign medicinal qualities. B commences to sell a similar article to which he gives a name and description such as to lead people into the belief that they are buying A’s Mexican Balm. A sues B for an injunction to restrain the sale. B shows that A’s Mexican Balm consists of nothing but scented hog’s lard. A’s use of his description is not an honest one and he cannot obtain an injunction.
57. Injunction to perform negative agreement. Notwithstanding section 56, clause (f), where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the Court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement: provided that the applicant has not failed to perform the contract so far as it is binding on him.
Illustrations
(a) A contracts to sell to B for Rs.1,000 the goodwill of a certain business unconnected with businesspremises and further agrees not to carry on that business in l[Karachi]. B pays A the Rs. 1,000 but A carries on the business in 1[Karachi]. The Court cannot compel A to send his customers to B, but B may obtain an injunction restraining A from carrying on the business in 1[Karachi].
(b) A contracts to sell to B the goodwill of a business. A then sets up a similar business close by B’s shop and solicits his old customers to deal with him. This is contrary to his implied contract, and B may obtain an injunction to restrain A from soliciting the customers, and from doing any act whereby their goodwill may be withdrawn from B.
(c) A contracts with B to sing for twelve months at B’s theatre and not to sing in public elsewhere. B cannot obtain specific performance of the contract to sing, but he is entitled to an injunction restraining A from singing at any other place of public entertainment.
(d) B contracts with A that he will serve him faithfully for twelve months as a clerk. A is not entitled to a decree for specific performance of the contract. But he is entitled to an injunction restraining B from serving a rival house as clerk.
1 Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981) s. 3 and 2nd Sch., for “Chittagong” which was subs. by the Central Laws (Statute Reform) Ordinance, 1960 (21 of 1960), s. 3 and 2nd Sch., for “Calcutta” (w.e.f. 14th October, 1955).
(e) A contracts with B that, in consideration of Rs.l,000 to be paid to him by B on a day fixed, he will not set up a certain business within a specified distance. B fails to pay the money. A cannot be restrained from carrying on the business within the specified distance.
SCHEDULE.[Enactments Repealed] Rep. by the Repealing and Amending Act, 1891 (Xll of 1891).
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