Specific Relief Act

January 6, 2018: How to take possession of property? And how to take possession back? In case where
a person alleges a better title over property then you use Section 5. Section 6 is when you had
possession and then you were disposed in a way not allowed by law.

Section 6: To file a suit you need to prove three ingredients. A) You had lawful possession; b) you were
thrown out through illegal means c) limitation period of 6 months. The limitation period is 6 months,
whereas limitation act has a different period but a special law prevails over a special law.

The first ingredient is the juridical possession of property. What is possession? There are two key
concepts. There is theory of ownership and theory of possession. Under 6 what you need to prove is
possession and under 5 it is ownership. Possession means you exercise control over the property : but
the kind of control can be different. Possession should be construed on a case to case basis. If a
particular person has been in possession of land and he cant manage the whole thing then does it mean
that he is in possession of only that small part or the whole thing even though he is not managing the
entire thing. Suppose it is 100 acres and he is farming in 20 acres and the rest he is not doing anything.
In such a situation can you argue that he has possession only over 20 acres? Even if a person is
exercising actual possession over a limited area it does not matter the section does not say actual
possession it only says possession. So it is juridical possession that matters : person who has control over
the property is said to be possession of a property ; exception is when you are controlling a property as
a trustee, or agent then he is not in possession. Suppose I have leased a property to Mr. X. If I have
issued a PoA in respect of my property to an agent of mine, in that case the agent is holding the
property on behalf so legally he does not have possession. Possession is when a person controls a
property for himself and not on behalf on someone else. If we say the control has been transferred to
another person in such a way that another person is acting on behalf of the first person then there is no
transfer of possession.

What are the similarities between 5 and 6? Section 6 comes to the rescue of possessor. 5 is if a person is
claiming that he is entitled to an immovable property then he can prove better title than possessor and
get it back. Section 6 is about the possessor. These are two different possibilities that these sections
assume and therefore their operation and scope is different. Several Courts have argued that these two
sections are disjunct and they cannot co-exist. But this statement to a large extends it incorrect and you
cannot say there are mutually exclusive all the time. If you look at carefully, section 6 impliedly talks
about Section 5. Section 6 you cannot dispossess someone unlawfully so that means you can dispossess
someone through lawful means which is mentioned in Section 5. These two sections are mutually
exclusive in their own spheres but if we look carefully Section 6 has been incorporated to ensure that
when people do dispossess they do it lawfully.

Under section 6 if a person has been restored possession, that does not imply that the owner is barred
from filling a suit under Section 5. A person has rented his house. Now the tenant defaults and brings
the agreement to end because material breach. In this case, assume the landlord says move out to the
possessor. Tenant has been restored possession but this does not mean you as owner cannot file under
5. This is because lawful possession because it was secured in the right way, it does not matter that you
are holding it illegally (because you haven’t paid rent and you are in default of the tenancy agreement).
So it is important to understand the concept of lawful possession: it only means you secured legally.

The second aspect is: if a particular person has unlawfully taken possession of property maybe through
trespass. Now, the owner what can he do? He does not file a suit under Section 6 within the limitation
period.

It is easier to prove under Section 6 than under Section 5. So assuming that I am living in my house and I
am the owner and tomorrow someone comes to throw me out then I have been disspossed. Now, does
limitation act apply to me? SC said as long as you have ownership and you show that you have been
dispossessed then it does not matter that it is after limitation period. Is there a difference between
better title and title? Does this mean it is just an application 5 and 6 together?

Another conflict: can you include your intangible rights under 5 & 6? Because property can intangible
property as well. Can you ever possess intangible property? This is something that is very difficult to
show because it is intangible. Some HC’s are of the opinion that when you have possession over fishing
rights in pond has rights over the fish and therefore has possession over fish whereas other HC have said
you only have an interest in the fish in the pond because you do not control the affairs of the pond.

What is the position of a person who has been conferred a gratuitous possession? Can he seek
possession under 6? Courts have said that you have such a position only because of the fiduciary
relationship that you have and not in law and therefore if such a person throws you out you cannot seek
relief under Section 6.

Section 7 and 8 talk about movable property. Entitlement due to special circumstances and entitlement
due to ownership. Due to entitlement will cover, agents, bailee, trustee etc. Which section is this?
Because initially in 6 we had said such relationships are an exception to the idea of possession.

Section 8 is an extension of 7 as in, in what circumstances you can claim back specific possession.
Section 7 uses the term specific movable property. Specific is important to understand. If a person has
given family idol to another person and that person says no I won’t give it back in such a situation
damages can’t really be good enough. This is in relation to one of the conditions in Section 8 being that
damages should not make good the loss. This will be presumed by the Court. Thus the other party will
have to prove that no damages can make good the loss. This tells us really the essence of specific reliefs.

9th January 2018

Title v Better Title : If a person has leased property for 99 years and leassee has right to do
improvements over property. And now he builts some structures over the property. And now the owner
is throwing the person out. In such a situation if a owner wants to throw the lessee out he won’t be able
to because even though he is owner the lessee has 98 years left in the lease. He has that much interest.
Also Section 6 is summary procedure. There is no appeal.
10th January 2018

How do we go for specific relief for recovery of movable and immovable property? Only in conditions
met in Section 8 such as damages are not adequate etc only in these cases can specific relief be given.
The nature of specific relief is very specific : show specific harm in specific circumstances. If damages can
be granted in each and every situation why can’t specific relief be granted? If we look at the nature of SR
and the way it has evolved, it is an equitable relief. In UK there were two kinds of courts. Common law
and Chancery courts. Common law dealt with legal issues whereas Chancenary Court considered equity
principles : whether or not common law has anything to do with it is the question they would ask.
Common law when it comes to remedies says take the damages and move on. But on equity and
morality did not allow damages to be adequate relief. In those cases the courts of equity devised the
remedy of specific relief or specific performance of contract. Damages is very common remedy and in
exceptional situations you need something more than damages. The persom should be restored to the
position he was before the breach : in many times damages cannot do this. Damages are not adequate
in many cases.

Ex: There was a person who delivered a horn which had family importance to him. The clan believed
that the entire business is held by the horn and it was a belief that they had for a very long time. Due to
some circumstances a person had to deliver the horn to one another person and to be delivered back to
him after conditions are met. Court said we will pay damage that will not meet the ends of justice. Apart
from monetary value there are several other historical factors at play and those factors cannot be
quantified. Therefore you need to specifically deliver the property back to the person. It came as a
remedy in equity and not in law and now we have codified it under law and as a legal remedy but still
treated as a secondary and extraordinary remedy in common law which is invoked when primary
remedy fails. This is an extra ordinary remedy available only on the discretion of the Court which means
that even if you show reasons and extra ordinary circumstances and Court is not satisfied then Court can
give damages because the Act does not oust the jurisdiction of Court to give damages. This discretion
has to be exercised in a fair manner. If it falls well within section 8 then it has to give because it falls
well. Or if someone can cite precedent that the it has been given in similar cisrcumstances then you
cannot exercise discretion however you like : it has to be exercised in vires of the law. However all these
conditions attached with it makes it think that it is an extra ordinary remedy.

Specific Performance of Contracts

Law is not exhaustive in nature : there could be many other specific reliefs which lie in other laws and
judgments and they remain to be equitable remedies . Always seek it is a primary relief because if you
seek damages first then you wont be allowed to amend your pleadings. If you seek damages then it is
assumed that the contract has come to an end whereas when SP is seek then the assusmption is that he
has breached it but contract subsists and I want the relationship to continue. So once you have asked
damages then Court will not ask you to shift to SP. Amending pliant is allowed only after permission of
Court and in these situations the law is very settled that the Court will not allow you to amend your
plaint to help you now seek SP.
Past consideration: It is allowed in some cases and it is not in some cases. Privity of contract – someone
who is not privy to contract cannot seek SP. Then existing obligations : that is not consideration as that is
something you had to as consideration under some other contract. Legal existing obligations : the law
requires you to do this. Contractual Legal obligations.

Still v Mayerik : There was a ship and then there was a sea strom. And because of this some of the
people died. The captain said if everyone helps then I will give you remuneration of the two dead people
along with their own. Court said these two people who died and whose remuneration is to be given that
the captain cannot be forced because they did not give any extra consideration for the offer the captain
made because under their service terms they were required to do it under the terms of the service
agreement. The Court did not allow this because consideration you offered for additional remuneration
was not good consideration and contract will not be enforced. In those cases where a particular person
has a defence as to why the contract should not be enforced that contract will not be enforced
specifically if the defense is successful. For example,unlawful contract etc.

Premature suit has been filed the suit for specific performance will not hold good. Baiknath v Saigal
properties : There was a person who booked a flat with dealers who were the defendants who were
building flats. They said we are already booked and in case the Government increases our flat area ratio
in the future. Before the flat ratio could be increased the person went to Court. The Court said this suit is
premature because the entire performance of the contract is contingent on permit for increase in flat
area ratio and therefore you should not file a suit at this point of time because it will be a premature
suit. The Court said remedy will not hold good. He could have sought for damages? Time has already
gone by and they should give me damages because they have not manages to get flat property. Specific
performance cannot be sought in cases where the suit is premature. Similarly when a party has altered
the contract SP cannot be sought. Material alternation: when alternation happens with the consent of
both parties then it is novation and that is valid. In case of material alternation it has affect of novation
in case it is mutual. When it is unilateral and it has an implication of the obligation of other party you
cannot say that the other party should perform a contract which has been alterted materially.

Panchaksharam v Kanniah : there was a person who entered into an agreement to sell a property with
another person. Now the deed was executed. After the parties had negotiated the buyer unilaterally
altered the contract saying that the seller will have to evict the legal tenant from that property before
transferring the property rights to me. The seller could not do this ad buyer went to Court saying
enforce this contract. Court said there was a material alternation and that too a unilateral alteration and
therefore you cannot force a party to perform a contract that he did not agree to.

Janab Yakub v M. Krishnan: Read.

Inadequacy of consideration shall not make it invalid but it will have some impact as far as free consent
contestation is concerned. Inadequacy of consideration: it is unconscionable in still that situation the
agreement will be valid.

Central Inland Water Authority : A PSU appointed a person and his terms of service said that he can at
any point of time be fired, without giving any reasons as to why he is fired and by not giving any notice.
The authority fired him without any reason and the authority said look at our contract this is specifically
allowed under the contract. This was a contract which was negotiated by the parties in their free will.
But the Court said these terms which allow a particular person to be thrown away and these terms on
their face is unconscionable and unjust and should not be upheld.

Falcke v Gray: In this case, there was a person who wanted to sell from artifacts. Now, the purchaser
was aware that the artifacts was rare and very expensive and seller was not aware. Seller said we will
sell at very cheap price. Whereas, real price was really high. After agreement was signed seller got to
know real value and that price is really high and I cannot sell it at this low price and question in Court
was should this be specifically performed. Court said purchaser from day 1 knew the value of artifact
and he kept the seller under the illusion that the value is much lesser than what it was and therefore the
contract cannot be enforced because the consideration is so low that it is unconscionable.

Section 10 of SRA. It mentions the circumstances in which it can be specifically enforced.

In transfer of immovable property there is a presumption that damages will not be enough and the
burden will be on defendant to show that damages are necessary.

In those cases where damages cannot ascertain the loss that has occurred to other parties.

Damages cannot be ascertained : or do not have means to ascertain damages : cases in which a
particular person has an attachment or nostalgia and that thing matters a lot more than anything else.
Pussey v Pusey : The horn case which was the goodluck charm. You cannot reduce emotion to monetary
value.

Similarly, there is a separation deed between husband and wife and Court decrees the separation in 6
months.

Ascertainable v Inadequate : inadequate falls into the emotional question. Because you can always find
damages w.r.t to some standard but you can say look emotions are involved and therefore this is not
enough.

Partnership at will: get this.

Specific Performance of license agreements : the license is, it is subjective, whether the license should
be specifically enforced or not. The Court will go into facts, what is the license, what was it sought for, in
case it is breached can the licensee seek the license from someone else and it is only after that the Court
will come to the conclusion on whether it shall be enforced or not.

January 16th, 2018.

Section 10 : in what all cases can specific performance be sought. Plaintiff must show that there is no
standard to ascertain damages or that it is not adequate remedy. Partnership can be divided into two
parts. At will and partnership created for a specified reason. At will, you can leave at any time and you
can give notice to dissolve the firm at any time, this depends upon the partnership deed. Courts are
reluctant to enforce deeds in partnership at will. At partnership deed it is difficult for damages to cover
the loss. This is because people have not come not just for monetary relief but also other factors as well.
Therefore it becomes difficult to give damages in case someone says that they want to stop at the
middle of the process before completing the objective. There is a partnership deed between 5 people
and now what happens is one person wants to move out when firm has incurred some liabilities and the
capital of all the five people are responsible for liabilities. One of them say they want to move out at this
point of time. At this point, the trust in which the liability was incurred was affected : the Court can say
that the partnership must perform the liabilities and therefore ask the person to continue. But when it is
a partnership at will, the Court does not ask them to specifically ask them to perform the contract,
because it is the legal right of the person to leave the partnership at any time and therefore it will be an
idle exercise for the Court to pass a decree.

Sale of intellectual property : there is no measure for damages here as well. There is no standard. In
those cases, the courts are eager enough to perform these contracts.

Second part : damages even if ascertained would not be an adequate remedy. This is the greater
concern. When we say we do not have a standard to ascertain the damages it is clear it is not adequate
remedy, but this is not visa versa. Because sometimes, there maybe a standard but it is not adequate. If
we allege 10(1)(a) in those cases where damages are not ascertained in those cases we will go by clause
(b). When you are claiming (b) then do not go by (a). If there are no standards then it is implied that
damages will be inadequate.

If I hold shares in a particular company and say those shares are transferable to a certain extend and
suppose shares cannot be traded easily since it is not listed and now I enter into agreement with
someone saying that I will sell these shares to you and I say that I am receeding from my promise, will
damages be appropriate? You can check damages in this, market value, but will damages will be
enough? Because these shares are rare in the market and are not readily available. Damages will not be
adequate remedy – example, when a trade is happening in a commodity which is not easily available in
the market.

A person entered into an agreement with thermal power station for thermal ash. Can you sell it to me?
In the market relevant to the buyer and seller fly ash was not an easy commodity to buy and it was
shown and the Court said it should be specifically enforced even though it is generally available in it is
rare in the market which is relevant to the market. These judgments are very contextual and this cannot
lead to a general rule.

Building contracts : as a general rule, if you enter into an agreement with another person where you
want to build on a specific piece of land and even if the land owner breaches the contract, damages will
be adequate remedy. You were just building for profit and you take the profit in form of damages. But in
order to show that damages are not adequate the person will have to show certain conditions. If he is
able to show that that particular builder had a specific interest in developing the piece of land apart
from profit motive and those interests have been very particularly determined in the deed and the
possession of the land has been taken by the defendant, it can be said that the contract be specifically
enforced. Project: drafting the contract in such a way to include a non-monetary component to ensure
that specific relief can happen.

Specific performance in case of insolvent person is as difficult as giving damages.

Section 11: Trust. May, wholly or partly in enforcement, trust. Before discussing this section, we will
discuss what a trust is. Trust is incorporated for the benefit of the beneficiary. Section 3 of the Indian
Trust Act:. It is an obligation annexed to ownership. Ownership is defined in terms of basket of rights.
The moment you say you are owner you are saying that there are a number of rights associated with the
property. Ownership and obligation. Ownership annexed with obligation.

When a trust is created a fiduciary relationship is created between the trustee and beneficiary. The
beneficiary is completely depended upon trustee. Mere silence does not amount to fraud.

Example : Suppose there is a person who wrote a will, he bequeaths the property to a person and the
person says after I die you should use it because my kids are small, you will hold the property in trust for
you and whatever you do will be in favour of them and you will hold it favour of my kids. There is no
vested interest in the ownership created. Ownership is transferred but with condition.

January 19th

Trustees should act in a unanimous way. If the decision of the board was not unanimous then such an
agreement would not be considered valid. Decisions taken or agreements entered without consent of
the board is as good as an agreement entered by a minor- this is an agreement that by parties are
competent to enter. All board members must be present and there must be unanimous decision. In
some cases trustees say we are selling a property but in doing so involves a loss of value of the property.
There is a condition put which results in the loss of value of the property : lease of property and
condition is lessee can collect rent from tenant but cannot evict the tenant. Such a condition has the
result of depreciating the value of the property. Anyone will want a free property and no one would
want to share it with a tenant who cannot be evicted at all : thus such a contract cannot be specifically
enforced. The level of diligence involved in a trust transaction would be huge.

Latent defects and Patent defects: A PARTICULAR defect is patent we mean the defect is on the face of it
and if someone enquired into it he would have been able to identify it and correct. Other categories are
latent which cannot be found find. If the person is not the owner and he sells it and you purchase it
bonafide you will not be accorded any benefit and the agreement can be declared as void and at least
the Court can put an injunction on the performance without considering the intention because
ownership issues are a patent defect.

A trust property being sold and the trustees have not taken a unanimous decision on the same then it is
on the person buying to find out if the same was done according to unanimous decision or not. This is
basic due diligence. In these cases, a particular board transfers the property without a unanimous
decision the third party will not get any benefit even though the property was purchased with bonafide
intentions : in this case it is a patent defect.
In all the cases, where the property is being sold the law imposes a greater burden on the buyer as
opposed to the seller. Trustee cannot buy the property for himself. Exception: a person is a trustee but
the property moved out of the trust property much before we came into the trust he can purchase the
trust property because that property has gone into adverse possession and therefore it can anyway not
serve the purpose of the beneficiaries of the trust.

Can the trustees purchase the beneficial interest of trust? They can, but they have to show and disclose
all information relating to the trust to the beneficiary.

22nd January 2018

Agreements which can be specifically enforced in part : Generally the remedy is in whole but here we
are talking about it being in part. In part means, a party has chunk of obligations and they say because of
these and these reasons which we did not foresee we cannot perform the whole part but we can
perform a part of it. In those cases, we generally say that the agreement can be enforced in a partial
fashion. The text refers to 14, 15 and 16- these are not the sections of the present act. We have
consolidated all the sections to one section: 12. As a general rule, we say that an agreement cannot be
in enforced in part you just have 2 options: either perform the whole or perform damage for non-
performance. Why is partial performance not valid? Parties say I have these obligations and I EXCEPT
THIS FROM the other party : every promise has a corresponding promise. The moment you say I cannot
perform some of these terms and in return the other party can determine consideration then you are
renegotiation and you are pushing the burden of negotiation to another party and generally Court do
not want to this burden and the onus of performance should not be on Court because it is a private
arrangement. How do you except the other party alter the consideration : should it be allowed to reduce
or should it not? All these considerations come into play. The Court does not want to enter into this
because this is a private agreement and shifting the burden is not appropriate.

Party made contract for 1000sq but as it so happened it could only own 900. The remaining 100 can be
set for damages and can be ascertained- on application of either party can allow part performance.

When an agreement cannot perform whole of its obligations but can perform part of it, in those cases
when what it cannot perform is a major part : it is barred from seeking specific relief but there are rights
for the other parties :

8th February 2018

Specific with variation into the contract

Section 18 example : Person A is a sub lease. Now he leases it to B. In the contract with B he says he is
the owner and he can lease it. Now, A asks for specific performance and B says it was induced by fraud
and he will perform only if A perfects his title in the property.

Section 20 : SR is an extremely extra ordinary remedy.

Discretion as regards enforcement of contracts? In what cases can hardship be taken into account and in
which cases it should not be. If you want compensation, then you need to ask for the same case in
which you ask for specific performance because after it will not be entertained. The other point is not
just to compensation and SR we are limiting ourselves to : you can ask for possession or partition and we
cannot give positive definition and approporaite case is not one ……………. In those cases, you can file a
separate suit.

Section 26 to 33

There are two categories of documents : wither the contracts or the instruments. Contracts and
instruments are different : contract : mutual consensus of parties and rights and obligations have to be
performed inter se. Instruments is a broader term ; obviously contracts are instruments but there are
other instruments as well : instruments to enforce a contract for example. There are many instruments
that exists, either they are addition to contract or they are essential for enforcement of contract. For
example, an agreement of sale and sale deed ; these are two different things. Agreement of sale is a
contract which stipulates the terms of the contract ; what terms the land will be sold and before selling
what would the rights be and sale deed whereas is concerned with execution of sale. Instruments are a
broader category of written things which include contracts but is not limited to it. For example, Tender
document. Anything which is a legal document, but not a contract.

Rectification of instruments : extra ordinary instrument the Court has. In those cases when you say an
instrument has to be rectified the Court will say it has to be enforced in this say or it says the clause to
be interpreted in a certain way. The Court may order a change in the instrument. For example, A,B, C
and D and A,B, and C enter into agreement that A,B,C shall further a bond each in favour of D. At the
time of performance they realized that the term each was made by mistake and against the intention of
the parties, or fraudulently. It was supposed to be done jointly. The Court may read the contract in a
way that each was never mentioned in the contract in order to provide for the intention as well.