What’s spe­cific per­for­mance?

If an agree­ment to sell has not cul­mi­nated in a sale deed, courts can or­der the de­fault­ers to ful­fil their obli­ga­tions

HT Estates - - Front Page - Su­nil Tyagi

Prop­er­ties are sold through trans­ac­tions of agree­ment to sell (ATS) fol­lowed by a sale deed. In an ATS, the par­ties set out terms such as ad­vance sale price and to­tal sale price, man­ner and time­lines of pay­ment, time pe­riod within which the sale deed is to be ex­e­cuted, con­di­tions to be ful­filled by the seller, if any, be­fore the sale can take place, etc. How­ever, there are nu­mer­ous cases where an ATS has not cul­mi­nated into sign­ing of a sale deed be­cause of the buyer or seller de­fault­ing. One such in­stance in a seller’s case is where he re­fuses or de­lays the ex­e­cu­tion of the sale deed in favour of the buyer. What an ag­grieved buyer can do is take re­course to spe­cific per­for­mance un­der Spe­cific Re­lief Act, 1963.

When a court or­ders ‘spe­cific per­for­mance’, it es­sen­tially man­dates that the de­fault­ing ful­fil its obli­ga­tions and take on the which oth­er­wise re­quires com­pul­sory regis­tra­tion ren­ders it in­ad­mis­si­ble as ev­i­dence in courts. If the ATS is in­ad­mis­si­ble as ev­i­dence, the court may refuse to grant spe­cific per­for­mance on its ba­sis.

In Ut­tar Pradesh, an ATS with pos­ses­sion as well as ATS with­out pos­ses­sion re­quire com­pul­sory regis­tra­tion. How­ever, in Delhi, an ATS with­out pos­ses­sion does not re­quire com­pul­sory regis­tra­tion. In the event of the seller breach­ing a term of an ATS which does not re­quire com­pul­sory regis­tra­tion, the buyer can get his rights un­der ATS specif­i­cally en­forced, ir­re­spec­tive of whether ATS has been reg­is­tered or not. If the seller breaches term of an ATS which re­quires com­pul­sory regis­tra­tion but has not been duly reg­is­tered, the court may not or­der spe­cific per­for­mance in favour of the buyer.

One must also bear in mind that spe­cific per­for­mance of a con­tract is not an ab­so­lute right un­der the act. The court's power to de­cree spe­cific per­for­mance of a con­tract is dis­cre­tionary and not manda­tory. Af­ter tak­ing into con­sid­er­a­tion the unique facts of each par­tic­u­lar case, the court may ei­ther grant spe­cific per­for­mance of the con­tract, or grant com­pen­sa­tion in lieu of spe­cific per­for­mance, or grant com­pen­sa­tion in ad­di­tion to spe­cific per­for­mance. Nev­er­the­less, spe­cific per­for­mance is a valu­able le­gal rem­edy in con­tracts re­lat­ing to im­mov­able prop­erty, where of­ten mon­e­tary com­pen­sa­tion alone may not pro­vide ad­e­quate re­lief to the ag­grieved party.

THINKSTOCK

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