Specific Relief Act, 1963

Why in news?

To enhance “Ease of Doing Business”, government is planning amendments in this act. These amendments were proposed by Anand Desai led Expert committee


What does the Act do?

The law prescribes that in an event where the actual damage for not performing the contract cannot be measured or monetary compensation is not adequate, one party can ask the court to direct the other party to fulfil the requirements of the contract. This is calleed specific performance of a contract. This extends to infrastructure contracts, like construction of housing societies or sale and purchase of land


What are the proposed changes?

  • To limit the compensation and relief that courts can grant in cases relating to execution of infrastructure and development projects
  • It seeks to lay down guidelines for reducing the discretion granted to courts and tribunals while granting performance and injunctive relief


Why these changes?

  • In the governments assessment, some provisions in the existing law are an impediment for investors, as they fear a long-drawn litigation process
  • Courts have extensive power to review and award compensation under current Act
  • It is also a discretionary relief, that is, it is left to the court to decide whether specific performance should be given to a party asking for it. This gives rise to uncertainty in contracts


Features of Bill

  • Specific performance: The Bill seeks to remove conditions of specific performance is limited right, which may be given by court at its discretion and permit specific performance by courts as general rule. It adds limited liability partnership (LLP), a new entity formed from amalgamation of two existing LLPs, one of which may have entered into a contract before the amalgamation.
  • Substituted performance: The Bill gives affected party (i.e. party whose contract has not been performed by other party) option to arrange for performance of contract by third party or by his own agency (substituted performance).
  • Injunctions: It prevent courts from granting injunctions in contracts related to infrastructure projects, if such injunction hinder or delay completion of project in infrastructure sectors and their sub-sectors like transport, energy, water and sanitation, communication and social and commercial infrastructure. The central government may amend list of sectors through notification.
  • Special Courts: It allows state government to designate certain civil courts as Special Courts in consultation with Chief Justice of High Court. These courts will deal with cases related to infrastructure projects. Such cases must be disposed off within 1 year from date of receipt of summons by defendant. This period can be extended by courts for another 6 months.
  • Recovery of possession: It permits person through whom dispossessed got possession of immovable property, to file a suit for recovery.
  • Experts: It inserts new provision for engaging technical experts in suits where expert opinion may be needed.  The court will determine terms of payment of such expert. The payment of experts will be borne by both parties.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top