10. Specific Performance in respect of contracts.-
The specific performance of a contract shall be enforced by the court subject to the provisions contained in Sec. 11(2), Sec. 14 and Sec. 16.
Section 10 of the Act has been entirely substituted. Now, specific performance will be granted mandatorily, subject to certain exceptions which are elaborated in Secs. 11(2), 14, and 16 of the amended Act.
This change is aimed at providing greater protection of contractual expectations by ensuring that a non-defaulting party can obtain the performance he bargained for. With ‘specific performance’ as the new rule, the likelihood of a judicial order mandating specific performance may well act as a deterrent for defaulting parties. This amendment may also discourage errant parties who may deem it more viable to breach a contract than perform it, as the cost of damages may still be less than the cost of the performance.
Mutuality is essential in suits for specific performance:
It is well settled that a court will not order specific performance of a contract unless there is mutuality in the sense that the plaintiff could also be compelled to specifically perform his part of the obligation. No person can sue for specific performance if he cannot be sued for it (whether because he is minor or for any other reason). The doctrine of mutuality means that the contract must be mutually enforceable by each party against the other. Mutuality, however, does not mean equality and exact arithmetical correspondence. It means each party to the contract must’ve the freedom to enforce his right under the contract against the other [Dasarath Gayan v Satyanarain Ghose AIR 1963 Cal 325].
Agreement for reconveyance or repurchase;
An agreement to repurchase property which had been sold (‘agreement of reconveyance’) has been held to be specifically enforceable. In a case, a family woman (appellant’s mother) borrowed a sum of money from a family member (respondent’s father) and executed a sale-deed of her property in favour of the lender’s minor son with an agreement of reconveyance on repayment of the loan. The dues under the loan were paid back and on denial of reconveyance, the Supreme Court upheld the decree of specific performance ordering reconveyance [Nivarti Govind Ingale v R. B. Patil (1997) 1 SCC 475].
Such an agreement, not being merely a privilege or concession, such as an option to purchase, granted to the owner, remains an agreement for sale of immovable property and must be governed by the same provisions of law as are applicable to ordinary agreements for sale [V. Pechimuthu v Gowrammal AIR 2001 SC 2446].
Sale by joint owners:
Where any property is held jointly, and once any party to the contract has agreed to sell such joint property by agreement, then, even if the other co-sharer has not joined, at least to the extent of his share, he is bound to execute the sale deed [A. Abdul Rashid Khan v P.A.K.A. Shahul Hamid (2000) 10 SCC 636].