 Good evening one and all, and amongst us we have Neelima Badbadi ma'am, as formerly known by students and others also. The professionals also are too happy to be learned from her. And specific performance 2018 act amendments has given different facets and if you Google around we will find ma'am has a specific contribution towards this particular act and the way how to understand the things. I request ma'am to share her insights and we are too glad to call her, request her to be on this platform time and again and she is always ready to be proceeding to our request. Thank you so much Vikasthi, it's not just a pleasure to join, to speak on your channel, but also to visit all the other videos that have been put up by experts, judges, lawyers and so many others. Whenever I find time I do listen to them and I especially enjoy listening to insights on the law of evidence. Thank you for inviting me and Namaste to all of you from all over India. The topic today is how do we look at the relief of specific performance after the amendment effective from 1st of October 2018. And before I proceed I would like to ask Vikasthi, can you hear me well and can you see the presentation? Yes ma'am both are fine. So what we do in today's session is to look at specific performance which is no longer an exceptional or discretionary remedy, it's a general remedy and it is only subject to sections 14 and 16. Has the slide changed Vikasthi? Yes. Yes ma'am. Yes. Then a very important part of that change is that the remedy is no longer discretionary so the court does not exercise discretion. On the other hand the amendment provides for a new remedy of what it calls substituted performance and we will see how that is a good way instead of asking for specific performance itself and then another important aspect which probably has not been discussed anywhere is that compensation in substitution is no longer available in the section relating to compensation. So broadly these are the four aspects which I will cover. My presentation is restricted to the relief of specific performance. Now when we go for a relief of specific performance it is basically a remedy, one of the remedies for breach of contract. Therefore a plaintiff who asks for specific performance and there may be some situations where a defendant asks for it, very rare but whenever even when the defendant asks for specific performance I will still call him the plaintiff, he is the person who asks for specific performance. So this plaintiff has to establish that there is a breach. In specific performance language we refer to it as refusal to perform. So the plaintiff has to first of all establish that is plead and prove that there is a valid contract between the parties. Then he will have to show which part is left for performance for which he has come to court. So he will either say it is broken or he will use another terminology that I am willing and the defendant is not performing so there is a refusal to perform and then he has to show that the other party has not performed what he has agreed and that is the breach. Now this aspect has to be shown by the plaintiff whether the case is for specific performance or it is for compensation. So this is the common part. Now we have to look at section 9 in the chapter of specific performance which says that a plaintiff who has to establish breach to him sorry in his case the defendant can forward any defense which is available to him under the contract law. This is the section and the last part the last two lines say that he may plead by way of defense any ground which is available to him under the law relating to contracts. This is actually the substantive part of claiming the remedy. So if a plaintiff says here is a contract and it is broken the other party may say that there is a mistake I come to the later part of this life. The other party may say that there is an uncertainty and therefore the agreement is void that there is an illegality that there is material alteration that there is an impossibility a subsequent impossibility which discharges the contract that the performance has been remitted that parties have substituted a new contract that parties have altered the terms of the contract and therefore the term which is stated to be broken was actually altered that the plaintiff himself has failed to perform the contract and therefore I am no longer liable to perform that the plaintiff has broken the contract and therefore he cannot claim compensation or he cannot claim relief that I have validly rescinded the contract because the consent is not free or because there are breaches elicited in section 39 53 and 55 of the contract tax or he has terminated the contract according to the provisions in the contract and so on so basically he has to show that now that this has happened and the defendant has raised a defense so it falls upon the court to see whether the defense operates and what is its effects on the plaintiff's claim and if the plaintiff shows that the contract is valid and the defense is no longer available which the defendant has to prove then only we proceed towards the relief and therefore we have this suit for specific performance or compensation in two stages the first stage is show under the contract law that you are entitled to the relief and then we go to the relief itself and see whether the requirements of that relief are fulfilled or not these two stages I will be coming to these two stages again later but we bear in mind that this works in two stages now when he asks for that relief the next question in stage number two or phase number two is does he fulfill the requirements of granting the relief granting the relief the provisions of law take into account the interests of both parties so when it comes to the claim for compensation the plaintiff is required to show that the breach has caused the loss first of course he has to show that there is a loss but the breach has caused it which I call causation then he has to show that the loss is either natural or it was within the contemplation of parties I've used the word foreseeability what I mean is contemplation of parties and third the defendant will try to show that the plaintiff has not mitigated he having the obligation to mitigate so it may happen that the plaintiff shows that he has suffered a loss of 1 crore rupees because of the breach and he actually is able to show that it is because of the breach he will not be entitled to get that 1 crore rupees because there are two more conditions to fulfill and these conditions if they arise then the amount of loss will get reduced what I mean to say is that even if the plaintiff suffers this whole loss whether he will get it or not depends on the conditions for granting that relief which we find in section 73 of the contract act now when it comes to specific performance or injunction injunction under a contract we apply the specific relief act so what were these requirements for that relief under the specific relief act before 2018 you know I am just using before 2018 and after 2018 the date is first of October 2018 and that came by an amendment act of 2018 so before 2018 he had to show what that compensation would not have been enough that it is inadequate and this was given in section 10 then he had to show that the contract is of such a nature that it can be effectively enforced this was the requirement of section 14 then his own personal conduct as he violated an essential term is he ready and willing which is section number 16 and that even despite all these hurdles even if he has fulfilled the grant of the relief fell within the discretion of the court and this was under section 20 and many criteria were given which the courts must consider while granting the relief in the matter of distribution now what has happened after 2018 after 2018 the test of inadequacy in section 10 has gone away so if you want specific performance ask for it that's all the test of effective enforcement which I will be in detail later still remains but it is modified and the plaintiff's own conduct is still relevant and there's a small change in the requirement of readiness and willingness which actually makes it easy for the plaintiff so these are the conditions subject to which the release is granted so a person may say that yes are now that the contract is broken give me my relief and the law says wait wait there are other conditions which we must see then only you will get that relief this is the phase 2 of the grant of reliefs in contracts so let us come to the relief of specific performance what is meant by specific performance the plaintiff asks the court to grant an order that he will get what is exactly promised under the contract so if he has agreed to purchase goods and the defendant has broken the supplier has broken the contract then he might go into the market and buy them and claim the difference in price means he is not claiming what he's agreed but he's getting the loss however if he's able to get an order that the defendant must supply the goods he must do what has been agreed then this is the order of specific performance so the essence of it is that the promise he must get what has been promised to so here in the order the there is a compulsion on the promissor to perform the promise so the order says Mr. Defendant you are here by order to do these things you know sign the sale deed etc etc so order may either be you sell the property transfer the property or the order will be Mr. Defendant you deliver these these goods to the plaintiff or the order could be that Mr. Defendant you construct the building according to this plan and here the order is against the defendant who is the promissor who gave the promise so Mr. Defendant you sign the sale deed so the defendant is here by order to do these things you know it's an order against the promissor now I come back to my first point in the slide the real question is the promise he should get what he has promised is there any other way in which it can be achieved this is what we asked why run after the promissor if I can get the promise performed then what is the problem I will hold the promissor liable later on okay so here we are talking of the promise he getting the promise but not through the promissor somebody he's getting it done himself and this aspect of specific performance that the promise he gets what he's promised but not necessarily from the promissor this aspect is dealt with in the new remedy substituted performance so promise he obtains the performance but from a third party right then he has a claim against then he has a claim against the promissor later so this is substituted performance and I'll be speaking about that too because ultimately what is specific performance if I am the plaintiff I want what is promised and there are two ways of getting it done and these are the two ways which we will see let us look at the sections relating to specific performance I'm only taking those sections which are changed and which are material for our discussion section 10 of the specific relief act provided about specific performance because he has the slide changed because my mobile probably slow yes ma'am yes very good so now section 10 dealt with I don't know but on my screen it has changed it shows specific performance promise he gets what it was so this is slow what shall I do just let it just keep it very well I will keep talking the slide will come let me see if I have to remove the burden on my computer by closing some programs then okay okay section 10 refers to cases in which specific performance of the contract was impossible cases in which and then it said that there are two things one in in clause A it said when there exists no standard for ascertaining the actual damage caused by the performance of the act no standard for ascertaining means that compensation is unassertainable and the second is clause B when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief here we are talking of inadequate so even if compensation is paid it will not be adequate and therefore this test of inadequacy was about not being able to ascertain compensation or even if compensation is granted it will not be adequate this I call and it's called in many academic writings as the inadequacy test some writings also call it the adequacy test what does it mean it means come and ask for specific performance only if compensation is not an adequate release and then in the explanation there was a presumption and I refer you to the last part of the slide where there was a strong presumption in case of contracts to transfer immovable property that compensation will not be adequate and therefore if there was a contract to transfer immovable property like an agreement of sale then the purchaser could have asked for and likely to get specific performance because of the operation of this presumption so let us move further this made the remedy nature of the remedy exceptional before 2018 this is the threshold test of inadequacy under section 18 what is that threshold test one compensation is unassertainable it means that you just can't prove the loss so there is an antique item and you can't prove the loss here it this this situation arises where the subject matter is either unique or where it is of special value to the plaintiff unique special value two important words so let us suppose that I am I have agreed to buy a shirt not an agreement to buy an ordinary shirt I mean it's compensable an agree an agreement to buy a shirt which a very well-known star singer used to wear in concerts 40 years ago this is a unique subject matter and then otherwise there is a shirt which used to belong to my great grandfather if I get into the market it won't fetch me anything but for me it has special value so it should be unique or it should be of special value this is what makes compensation unassertainable the second is where compensation would be inadequate which means that you can't obtain a substitute obtaining the substitute would be costly even if you give the substitute there will be something more which the person has lost such cases come under what is called compensation is inadequate this happens when an especially goods they are available in the market but not ordinarily available it also it is not an ordinary article of commerce it's not usually sold in the market such items therefore compensation is inadequate because she shall I stop the share and share again you can try that one yes because you know I have already moved one slide but apparently it's not moved it started with the first team only I know had you helped me resolve this problem yes this is the slide I was talking about yeah right it is unassertainable or it is inadequate so let me proceed ahead there were presumptions before 2000 dating is this visible because see yes it's a visible very good so presumptions would operate before 2018 that if it's a contract to transfer immovable property there's a presumption that compensation is inadequate and if it is movable then the presumption would apply only if it is not an ordinary article of commerce not easily available in the market or it was of special value to the plaintiff now what does it mean in terms of practice it means that if I am enforcing a contract relating to a movable property I just ask for that relief but if I am asking to specifically enforce a contract relating to movable property that is good I must not only plead and prove that this is a contract for transfer of goods but I must also plead and prove one of these three circumstances that it's not available in the market it's of special value to me and so on then only I got specific specific performance now in case of other contracts why because if you go to my first point this applied only to contracts to transfer property there are so many other contracts typically there was a contract where it was about giving or handing or giving satellite signals now this is not transfer of property and then will the presumption apply well there is no presumption and therefore one has to go to the general provisions of the section to say that this is inadequate now why was this an exceptional remedy let us ask why was specific performance an exceptional remedy at all first is reason lies in the history of this distinction between common law and equity courts the second reason was that if you disobey the order the only remedy is contempt of court and this was rather too drastic the third reason was that this protects the personal liberty especially in cases where contracts are of a personal nature the fourth reason is that it is required to balance the interest between the parties but also interest between the parties for the courts look at the cost of enforcement if the cost is going to be too high then the courts will not grant it you know then they let the parties ask for compensation and lastly sometimes it will not be possible to enforce an order to do exactly what has been promised under the contract these are the reasons I have an article called exceptional nature of specific performance it's on my website but it just Google exceptional nature of specific performance nearly my body and in that I have discussed many of these and therefore before 2018 the procedure was like this that the plaintiff has to identify the contract and the judge also so is it a contract to transfer property or is it some other contract is the property movable property or is it not so you have to categorize the contract and then depending on the category you look at the other requirements and you establish inadequacy and the burden of proofing all this was on the plaintiff to the plaintiff first had to show that there is a breach for fellow is the victim of breach and the victim is required to again show that look I am entitled to specific performance so this was the position before 2018 now the effect of this test was that a plaintiff cannot choose his remedy if he wants specific performance why not give him let him judge then the burden of showing specific performance was on the victim let the contract breaker show that the victim is not entitled to it and the best and the worst part of it was that obtaining the remedy was answered so if you are a lawyer and a client would come to you and say can I ask for specific performance I'm sure none of you could say yes of course you will get it everyone would have said well let us see whether we get it or not this is the uncertainty so was this test relevant now I come to the study I did as part of my PhD thesis and I'll just tell you what I observed I studied about 1500 judgments wherever the word inadequacy repairable repairable adequate values and they were suits for specific performance out of those 1500 plus judgments involving suits for specific performance 69 cases talked about the question of inadequacy so that point was raised most cases were about dismissal and then I found that the decision involves inadequacy but it is decided on other factors for example phase one which we saw so inadequacy is not decided second wherever it is decided it is not on the basis of evidence but inference it depended on the perception of the judge very often no reasons were given and therefore I would say that the inadequacy test was not really relevant in deciding matters it only stood as a hurdle but it wasn't used for deciding matters in other legal systems specific performance has been a general remedy so what is proposed now is asked for specific performance if you like this anyway is the case in many civil law countries and many conventions like the CISQ or the PECL they also make available specific performance without making it exceptional so it's not that the law now in the law is something new let us now look at section 10 as amended in 2018 I'll just wait till the slide comes section 10 ma'am the screen is wrong yes yes I'm starting it again because it's important to look at this section section 10 now simply says that the specific performance of a contract shall be enforced by the court subject to the provisions contained in subsections 2 of section 11 section 14 and section 16 right it is made so simple you remember the earlier one a long one specific performance of a contract shall be enforced by the court means when the plaintiff asks you give it but the only thing which will stop its granting is that this grant is subject to 11-2 which is about trust so for all of us other than who are enforcing trust we just have to look at section 14 and 16 it means that the defendant has only the defenses given in section 7 14 and 16 so now this is a general remedy you can ask for it for any contract the burden of showing that specific performance should not be granted which is under section 14 and 16 now falls on the breaker because that becomes his defense the promise he can choose his remedy because he's the best judge whether he should ask for specific performance or not he also understands the promissor for example if I am the plaintiff I know whether I will wait the last one is he will ask only if he can wait so I will know whether I can wait for 10 years when the decree will be granted and this will be useful for me I will wait because I know that even if the promissor is ordered there are ways of enforcing it against him so let me be the judge if I am the plaintiff why should the law preempt right my my desire to obtain a particular relief and the best part of it is that very often parties contractual behavior depends upon how the courts respond to remedies so a specific performance is generally available then perhaps parties will be encouraged to perform rather than to break this is the observation of in many academic articles of well-known authors renowned academicians that if you make this a general remedy then it will encourage performance now the next part of this is that okay specific performance can be granted but it is very important in any legal system that whatever order the court passes should fulfill two things there are many but I'll talk of two things number one will this order be effectively completely enforced in such a manner that the person who has asked for it will be happy about it he will be satisfied so the enforcement must lead to satisfaction of the person in whose favor the decree is granted and the other is even even a broader question is it possible to effectively enforce the decree at all and the third question is cost so let us look at these now that the slide has come if courts were unable to enforce their orders then the prestige and honor of the courts will go it is so essential to maintain the prestige and honor of course therefore whatever order is passed it must be possible of effective enforcement it should satisfy the decree holder secondly there is an unwilling promissor how much can you compel him to perform so we ask that is the act such that it can be got done by another person so let me give you an example if I am ordered to sign a sale deed in your favor you know as a specific performance then somebody else can sign it on my behalf the commissioner can sign it on my behalf so the involvement of this unwilling promissor is not required and such situations where this unwilling promissor need not come are actually good for granting specific performance because then it will get enforced to the satisfaction of the and the other thing about enforcement is that enforcing it shouldn't cost so high that it becomes a burden on the courts courts have many more matters to fulfill so it's a question of cost and time now let us look at section 14 from this angle section 14 before the amendment had got this clause what is this clause yes it's nature is such it's nature is such that the court cannot enforce specific performance of its material term this language encapsulates what exactly is required by section 14 can the court actually enforce means get it executed specific performance okay this language is no longer there I will come to that again so an enforceable decree must be possible it is for this reason that personal promises are not enforced so if I had a contract that I will sing for you Mr. Producer for the next one year and I will not sing for anybody else if you were to compel me to sing I will not sing well because I am an unwilling promissor the second is even if I were to sing properly our relations are so strange that you will never be satisfied with what I do so this may never satisfy the plaintiff and therefore personal promises cannot be specifically enforced constant supervision of the court is required it means that the costs of enforcement are too high a person constructs up to a certain level the other party says no no it's not according to contract so they go back to the court the court has to decide whether this construction is according to contract or not the court says this is fine yes proceed the contractor again constructs again the plaintiff says this is not according to contract this cannot go on so constant supervision involves costs too many minute details the court cannot go into and assess or judge about them and this is where we say that under section 14 these contracts will not be specifically enforced so let us now look at section 14 before the amendment the following contracts cannot be specifically enforced namely a contract for the non performance of which compensation in money is an adequate release this clause a which is called don't grant compensation if substitutes are available this is no longer applicable and it is really very sad I was on the member of the company I was a member of the committee which recommended these change changes and we had retained clause a as it is because universally when substitutes are available specific performance is not granted universally in all systems but the amendment has taken it away and this is rather sad the second clause b says the contract which runs into such minute or numerous details which is so dependent on the personal qualification or volition of parties or otherwise from its nature is such that the court cannot enforce performance of its material terms so please note the part which is highlighted a contract which is in its nature determinable this remains a contract the performance of which involves the performance of a continuous duty which the court cannot supervise this also remains in the law so now what has happened post amendment it says that the following contracts cannot be specifically enforced yeah clause a is where the party has obtained substituted performance this is actually redundant and I will not dwell with it clause b is the same as before clause c is the same as before but it removes personal volition it only retains personal qualifications so personal volition is where I am supposed to sing right this is my volition that has been removed qualification means you are going to see whether my qualifications are important which is objective volition is subjective so the subjective element in that personal contract is removed and it says it is so dependent on the personal qualification that the court cannot enforce specific performance our earlier clause said the contract is of such a nature that you can't enforce right so these are broadly the changes now section 14 3 this is a very important part section 14 3 said that you know the earlier part said that if it involves constant supervision it will not be enforced and then subsection 3 said that nevertheless a contract to construct can be enforced construct construction of any building or of any work right this is the slide and then it said that can you order the defendant to complete the construction and then it said yes if three conditions are fulfilled one the work is described in a certain way to the plaintiff has a substantial interest in its performance and third and the most important part was where the defendant has obtained possession of the whole work now where is this important first of all this part has been taken away so before the amendment a contract to construct could be specifically imposed even though it involves constant supervision but after the amendment the constant supervision rule or exception remains and we do not know how the courts will interpret this the problem lies here that if you are the developer and I have given my land to you to develop or I have given you land for constructing a building for me and you are in possession of the land then I can't even get it done myself if I've just appointed you as a contractor and you have not proceeded to work the land is in my possession I can work and claim from you the difference but if once you are in possession of the land I cannot do anything on it unless I get back possession so at least I had this remedy of compelling you to carry out that work please remember to retrieve possession one is required to claim in a suit for possession and therefore this right to get the building constructed was indeed an extremely important right which has been taken away by the amendment and I do not know why this was not recommended so section 14 after 2018 is like this there is no exception for contracts to construct this is what we discussed second the contracts which otherwise cannot be enforced could not be enforced earlier that also is now taken away so what does this mean you know sometimes the terms are uncertain but they are good enough for compensation so if I have a contract with you that I will supply you the usual goods because we have earlier transactions right then this language usual goods is good enough to compensate but an order taking this cannot be drafted difficulty in framing an order so this is a contract which is otherwise valid the terms are not uncertain enough to enforce a decree of compensation but the later the last item and even though the slides are not moving I will mention it that after the suit is filed if the law changes so I have agreed to sell you land and their law has come after the suit is filed because of which I can no longer sell you or you cannot purchase it then this is not affected by the doctrine of impossibility but under the old law the court could say that we will not grant you specific performance right but you are entitled to compensation this aspect of the law that there may be circumstances sometimes where the court can't enforce various reasons this aspect has now been taken away from section 14 again I repeat this was not the recommendation of the committee the last item on the slide now I come to the third aspect and that specific performance is no longer a discretionary remedy this was the section and I read those 1500 judgments of different high courts involving suits of specific performance out of them more than half of them where decisions their courts did or did not exercise this I mean that was the issue relating to specific relief argued in the court we all know that specific performance is the discretionary remedy and that there are some factors like unfair terms like unfair advantage etc which do not initiate the contract but where the court can exercise discretion in order to justice between the parties this aspect was a necessary aspect so let me tell you what the committee had done these factors of unfair advantage looking at the terms of the contract at the time of making the contract or the plaintiff suffering a disadvantage on the basis of terms agreed at the time of making the contract they were taken from section 20 and incorporated into section 14 so what was an element of discretion we made it a subject matter of refusing a grant that it's contract of such a nature that you cannot enforce it and then it was clearly stated that factors after the making of the contract will not be considered by the court so you look at the making of the contract look at the terms of the contract and see whether there's advantage unfair advantage etc and then probably that will be a defense but anything like rising prices after the suit is filed or after the contract shouldn't the plaintiff and get the benefit of those prices why give it to the defendant now the whole reason for removing discretion was that when the element is of grant of discretion when there's an element of grant of discretion then it becomes very uncertain whether a person will get specific performance or not so the lawyer is also uncertain cannot give full advice the client also is not aware and you know as a part of my study although it was not based on discretion there were cases where there are three concurrent findings for grant of specific performance and the supreme court exercised discretion in not granting it what i mean to say is that a person can gamble on litigation he says let me go ahead let me go ahead and let me see perhaps that there is discretion i will get a remedy sometime a person who has the clout the strength and the finance to go up to the supreme court can take a chance that somewhere discretion will be exercised and he will not be liable to specifically perform so two aspects uncertainty and gambling of litigation gambling in litigation these two factors were to be considered but i will again repeat that although section 20 has been deleted the committee had actually recommended incorporating those factors into some other section not all of them but some of them so what were the recommendations of the expert committee it gave its report in 2016 first of all grant specific performance as a routine take away the exceptional nature inadequacy tests then refuse only in stated performance circumstances that incorporated in section 14 and when they get incorporated in section 14 then it is for the defendant to show that the circumstances exist this is a normal burden of proof and certain grounds were recommended for refusal of grants and these where that substitutes are possible performance has become impossible after the suit is filed there is an unforeseen undue hardship if you look at the contract at the time of making it there's an unfair advantage if you look at the contract at the time of making it it involves personal volition continuous duty or constant supervision or it would cause undue prejudice to third parties so these grounds were actually suggested in our report but they were not accepted in the legislation so the question is will the courts continue to exercise discretion is discretion good while it renders things uncertain should there be a power in the court to exercise discretion I would say that judges would not like to give up that power and therefore I rather thought that these circumstances should have been in the law so that people know that these are the grounds on which specific performance can be refused I wonder whether courts will still exercise discretion they may want to but we have to wait and see what approach courts will take very quickly in about five minutes I will talk about this new remedy of substituted performance right never mind if the promissor does not perform I will get it done myself and then claim it from the promissor so we are substituting the promissor I don't want the promissor to perform I'll get it done myself so my performance will happen right but at the liability of the promissor this is the nature of the remedy now could compensation be claimed on cost or cost of cure basis what does it mean there's a faulty performance I am the plaintiff I have got that repair and now I am claiming all those costs from the defendant was that possible this is an important slide so let me stop sharing and share again I'm sorry but I don't know why slides are not moving if we go to section 73 of the contract act and illustration f and illustration l illustration f is like this that a contract to repair b's house receives payment it repairs the house but not according to contract so b can recover the cost of making the repairs conform to the contract now here the cost of repairs are likely to be more than in in value or price than the original contract but that can be recovered this is called compensation on cost of cure basis the other is where there's a builder who agreed to erect the house and then he built the house so badly that it was required to be rebuilt so I come back to the last part the cost of rebuilding the house can be claimed and rebuilding is likely to be at a higher price also there's a cost of demolishing the existing building and putting back the new building perhaps getting the plants resanction all that can be claimed so it could be claimed getting done from outside and then claim buy goods from outside and claim the difference this was also possible but then why this change is required this is because when you come under 73 you have to fulfill the requirement of contemplation and litigation and therefore even if a person has spent 75 lakhs of rupees in rebuilding the house there is never a guarantee that 75 lakh rupees he will receive so he will not get exactly what he has asked for that is the uncertainty of the remedy of compensation so how then there were also risk and cost clauses what is it that in the contract parties would provide that if you don't fulfill the contract we will get it done from a third party and whatever are the costs of that you are liable to pay them many government contracts contain this clause so when the risk and cost clause is there there's a remarkable judgment of the Supreme Court which says that if this clause is there then you can claim compensation only on this basis you cannot claim it on any other basis but my point is that we're putting a clause in the contract also subject to that clause compensation could be claimed so what is the whole idea of having the remedy of substituted performance so let us see what this remedy is section 20 that is also sad this section should have been worded 20 capital A because section 20 which is of discretion is still applied in in pending proceedings so section 20 there's an option of specific substituted performance what does it mean if I have not fulfilled my contract with you then you first give me a notice in writing and you give me at least 30 days at least 30 and you fix a reasonable time that please do this work within this time after receiving the notice if I refuse or if I fail to fulfill it then you can do it yourself or get it done from a third party so you can engage another contractor and get it done and whatever costs and expenses you suffer in getting it done you can claim from me directly there is no question of applying section 73 right only thing is you can claim it from me only after getting the work done and further thing is that you know all this waiting period probably you are required to also you know there's a compensation or loss arising from the delay which is an additional loss can you claim it the answer is yes so even if section 20 is there you needn't go for section 20 you can still claim it under your ordinary height of claiming compensation you can also claim compensation in addition to substituted performance especially relating to delay so section 20 therefore that is substituted performance therefore is an option so now very quickly what is the effect of these amendments to the relief or specific performance people will realize that what we promise must be fulfilled and they will probably start fulfilling their promises if specific performance is granted in many cases it actually fulfills the expectation that the parties have you know common people say if I've made a contract why can't the court order it that is a simple expectation that gets fulfilled it is also said that when specific performance is a general remedy parties are more willing to perform otherwise they can easily say ha ha when they claim compensation we will see they are actually encouraged to perform and this therefore enables parties confidence in making their contracts one of the question is will it increase litigation not at all I believe that very few plaintiffs will ask for specific performance who will ask for it someone who can wait for so many years to get that order and then get it fulfilled from an unwilling person that person who is the judge of his own own interest that person will ask for it so I don't think that there will be any increase in litigation because of the change of law and the lastly when we have provided for substituted performance our discussion in the committee was like this that we hope that this remedy of substituted performance is rarely used but once the remedy is available parties will be willing to negotiate a resettlement right so that the work is done on conditions which are acceptable to both parties and if this negotiation and settlement happens then that is actually the success of the provision of substituted performance so this is about specific performance there are small amendments in section 21 and section 16 and they are quite good so I think I can stop my presentation yes ma'am we can dispense with the screen sharing yes I have removed will there be questions on chat shall I check them yes I will only answer questions which are about today's session right yes yes I can take the question if you feel it is connected it says no no yeah my first question we can take how to show readiness and willingness for the purposes of section 53 of the tp act whether balance amount of rupees 500 or 500 plus registration and stamp duty which amounts to at least nine lakhs as of 2020 should be available 53 is part performance of contract part performance means the person is actually resisting a probably a claim for possession so readiness is to be shown which means that I am one thing is that in in connection with specific performance it has constantly been stated that you need not jingle the money in your pocket in the sense that you need not show that you have the money it is enough if you show that you will have the money when the need for it arises and I think that should be enough for readiness and willingness readiness is having access to that amount and willingness is wanting to pay so long as these two things are available there shouldn't be a problem and the screen sharing is not gone is that so or probably you are not on this video that will be a challenge no my video is there I don't know what has happened like custom live streaming service your video is not forthcoming but am I visible probably yeah fine then the other part probably that screen sharing of needy my birthday that will continue just check it out yes my video should be visible yes I'll open the chat it's got lost yes then the next one is about section six of the specific really fact I don't think I'll answer it first advance legal notice to perform contact is given but not complied and breaches committed is it required to be one more notice before filing a suit if the suit is I'm assuming that it's not for substituted performance actually no notice is also required unless the contract requires it the more notices you give the more you are able to say that the other party is not willing to do it but so long as you are able to show breach notice or no notice if reach is committed then the claim for compensation comes if the contract itself provides that one more opportunity must be given or that notice should be given then the notice must be given in all these cases whether there is breach or not and whether the notice compliant with the contract is given or not it is for the courts to decide then can compensation be claimed if substituted performance is very example if during substituted performance marble at a higher cost is installed instead of ceramic tiles this is actually a problem Mr. Bhavik Rajani that I believe that substituted performance must be the same as what has been agreed and therefore this remedy is possible to be abused by both parties so abused by one party who is getting it done again means that he'll probably get the work better work done at a higher cost than higher cost or rather material which is of a better quality and therefore higher in terms of value that is very likely and then it will be for the court to decide whether that is to be awarded or not so this possibility of abuse is there even by the other party that is the contractor also can abuse this provision we have to wait and see how things pan out Gidyan says ma'am what if the contractor employed by the cooperative society carrying repairs of building causes damage to individual flat can society file srs suit this will actually not be a suit for compensation srs suit it will be a simple claim for compensation I believe that there may be provisions in the contract which say that if any damage is done then that will be set off from the amount which is owed to the contractor I suppose such provisions might be there and those can be used but this is not a specific relief act suit this is a simple suit for compensation then KLE society's law college is the adequacy test done with completely wouldn't the substituted performance give an edge to the plaintiff to ensure the better quality performance by taking privilege objections with the contracting party the first one is that there is the adequacy test done away with completely the answer is yes and the current case which is Katta Sujata Reddy versus Siddham Seti Reddy Siddham Seti Infra projects which is 2023 Supreme Court judgment of justice Krishna Murari by the bench of three judges it says that section 10 will apply to contracts which have been made after the amendment I mean param 59 as in the supreme court cases it is prospective and cannot apply to transactions that took place prior to its coming into force so if this applies section 10 applies only to contracts which are made after first of October 2018 as regards the substitutive performance question I totally agree with you I have answered it just now that yes it can be abused I think the questions on chat have are over two only short questions for students young students like what is the adequacy test yeah the test which I told you is either called the adequacy test or it's called the adequacy test what is that test before 2018 amendment can you ask for specific performance I mean you ask any ordinary person that if the contract is broken what do you want that ordinary person will say well I want that the other party should perform it that's the order the court should be is natural so was that possible would the court have ordered given an order telling the defendant to do what he has agreed and the answer was that no it's not available unless he showed that unless he showed that compensation will not be adequate and it will not be adequate in two ways one you can't ascertaining or second it is inadequate this requirement that the contract should fulfill this test that compensation is not adequate therefore give me specific performance this test was called the inadequacy test it's a hurdle you can't get specific performance just because you asked this was the position before 2018 yeah and second is uh there's no like a definition what what do you mean by substituted performance yeah okay the word substituted performance is has been manufactured there is a very good article I can share it with you later the link to it vikasi where the authors calls it calls it virtual specific performance virtually you get what you want but you get it by obtaining it from a third party and then you make the promissor liable it's like asking compensation but you're asking for the whole amount you're not saying loss prove the loss contemplation and so on so what we are saying is that if I have a contract with vikasi and I have to perform that contract and I don't perform it if vikasi gets an order against me mrs verbede you must perform this is the order the court gives against me this is specific performance but instead of that because he can take another route he gives me a notice and he says that perform within 30 days and then I don't perform then he finds some other contractor he gets the work done and after getting the work done whatever are the costs and expenses he can claim from now if I am actually gone into liquidation he will not get that also that's another matter but he he can he's confident enough that he will get it from me so he gets it done what happens is that if he wants to have his building constructed then instead of having it constructed after 15 years he gets it constructed immediate and that is the main thing so performance happens very close to the performance date rather than after the decrease this is substituted so there's a substitute for the promissor this is substituted performance ma'am Bhavegh Rajni as performance could be obtained through a third party would it impact the ability of the arbitral tribunals to grant such relief actually in substituted performance the relief asked is money relief so there shouldn't be any problem for an arbitrator to grant it but this question actually leads to one more point can you repeat the question we can see can arbitrators as performance could be obtained through third party would it impact the ability of arbitral tribunals to grant such relief or should not be any problem it's a money relief after all and arbitrators can grant specific performance that's what supreme court has referred to in this case olympus structures versus mana vijay khetan in 1999 followed in a number of judgments later by the high courts there's one more question here in case any liquidated damage are received by the promissory due to deficiency of service as per contractual terms will it amount to another service performed by the promissory to promissor or it will be part of the same contract only i'm asking this with reference to the new amendment post-2008 now if liquidated damages are received it means that promise if they are for delay it means that that represents the loss for the delay it is not a separate promise it's actually a remedy there are judgments which say that the promise to give liquidated damage is a separate promise what i think it is a separate clause in the contract that if a clause is not fulfilled then big laws of liquidated damages will apply even if liquidated damages are agreed specific performance can still be granted that is section i think 26 or 27 or 20 the section relating to liquidated damages still stands that has not been amended thank you ma'am for sharing all your insights thank you so much it was brought on you had said that you will take the session around for 55 minutes and then Q&A but it went longer i'm so sorry no no i'm saying those questions took up that time so that's okay that's the hallmark of a successful person it's good it's good to know how people understand the law the new law that's true that's true and that's why the vietnam two three sessions but we always i'll share a secret with you all that this whole remedy of substituted performance i don't know whether it's a good one or a bad one but that part of the law is my baby one of your student has written the wonderful section advocate manan 2010 thank you so much thank you so much and congratulations ma'am for your all your insights and the way you're moving forward