Suing for Specific Performance: The Bars in the Act of 1877

Specific performance is one of the most heavily litigated civil remedies in Pakistan and one of the most frequently pleaded from the wrong statute. The reason is historical and easy to state: Pakistan and India began with the same Act, India replaced it in 1963, and a great deal of the commentary and precedent circulating online is Indian.

Pakistan continues to apply the Specific Relief Act 1877.

Where the section numbers went

In the Act of 1877, the personal bars to specific performance are in section 24, headed "Personal bars to the relief".

In India's Specific Relief Act 1963, the corresponding provision was renumbered to section 16, and its clause (c) was recast to require the plaintiff to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract on his part.

That requirement, in that form, is the Indian enactment. It is not in the Pakistani Act, which never took the 1963 recasting. A plaint or a written statement in a Pakistani court citing "section 16(c) of the Specific Relief Act" is citing a foreign statute, and the citation will not survive an opponent who checks it.

The underlying idea is not foreign. A plaintiff's readiness and willingness has long been treated as material in Pakistan, and clause (b) of section 24 covers a good deal of the same ground. But the ground is covered by our section 24, argued from our authority, and the number matters because a wrong number invites the court to look at a provision that does not exist here.

What section 24 actually says

Specific performance of a contract cannot be enforced in favour of a person

(a) who could not recover compensation for its breach;

(b) who has become incapable of performing, or violates, any essential term of the contract that on his part remains to be performed;

(c) who has already chosen his remedy and obtained satisfaction for the alleged breach of contract; or

(d) who, previously to the contract, had notice that a settlement of the subject-matter thereof (though not founded on any valuable consideration) had been made and was then in force.

Clause (b) is the workhorse and repays close reading. It bars relief to a plaintiff who has become incapable of performing, or who violates, an essential term remaining to be performed on his part. It is directed at the plaintiff's own position under the contract, and it is the provision behind most successful defences that the buyer never had the money.

Clause (c) is the election provision. A plaintiff who has already taken and obtained satisfaction on another remedy for the same breach cannot then ask for the contract to be performed.

The relief is discretionary, and the Act says so

Section 12 sets out when specific performance may be enforced, and it opens with the words "may in the discretion of the Court". Its Explanation carries the presumption most property litigation runs on: unless the contrary is proved, the court shall presume that the breach of a contract to transfer immoveable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer moveable property can be.

Section 22 then states the discretion openly:

The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal.

It goes on to give categories in which the court may properly decline, beginning with circumstances giving the plaintiff an unfair advantage over the defendant even where there is no fraud or misrepresentation.

The consequence for pleading is that establishing the contract and the breach is necessary and not sufficient. The plaint has to give the court a reason to exercise a discretion, and the written statement has to give it a reason not to.

Section 21 and the contracts that cannot be enforced at all

Section 21 lists contracts that cannot be specifically enforced, and two of its clauses come up more often than the rest. Clause (a) covers a contract for the non performance of which compensation in money is adequate relief, which is the mirror of the section 12 presumption. Clause (g) covers a contract the performance of which involves a continuous duty extending over a longer period than three years from its date, which quietly disposes of a range of management and service arrangements.

Against whom the decree runs

Section 27 answers the question that arises whenever the property has moved on. Specific performance may be enforced against either party to the contract, and against a person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract.

That exception is the whole of the subsequent purchaser's defence, and it has three elements, each of which has to be established: value, good faith, and absence of notice. Where a suit is filed against a subsequent transferee, the pleadings on notice are usually where the case is won or lost.

Limitation

Article 113 of the First Schedule to the Limitation Act 1908 gives three years for a suit for specific performance of a contract, running from the date fixed for performance or, where no date is fixed, from when the plaintiff has notice that performance has been refused.

The second limb causes most of the difficulty, because a refusal is often oral and its date is often disputed. Where there is no date fixed in the agreement, the correspondence establishing when refusal was communicated should be identified before the plaint is settled rather than after limitation is pleaded.

A short checklist

Cite section 24 and never section 16. Plead the plaintiff's own performance and continued willingness under clause (b) rather than under the Indian formula. Give the court a positive reason to exercise the section 22 discretion. Where a subsequent transferee is on the record, plead notice specifically. And fix the Article 113 starting point in the plaint rather than leaving it to be argued.

None of this is exotic. It is simply the Act we actually have, which is a different Act from the one most of the available commentary is written about.