SPECIFIC RELIEF (AMENDMENT) ACT, 2018

SPECIFIC RELIEF (AMENDMENT) ACT, 2018

Preamble - SPECIFIC RELIEF (AMENDMENT) ACT, 2018

THE SPECIFIC RELIEF (AMENDMENT) ACT, 2018

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[01st August, 2018]

PREAMBLE

An Act further to amend the Specific Relief Act, 1963.

Be it enacted by Parliament in the Sixty-ninth Year of the Republic of India as follows:--

Section 1 - Short title and commencement

(1)     This Act may be called the Specific Relief (Amendment) Act, 2018.

(2)     It shall come into force on such date[1] as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

Section 2 - Amendment of section 6

In section 6 of the Specific Relief Act, 1963 (47 of 1963) (hereinafter referred to as the principal Act), in sub-section (1), after the words "he or any person", the words "through whom he has been in possession or any person" shall be inserted.

Section 3 - Substitution of new section for section 10

For section 10 of the principal Act, the following section shall be substituted, namely:--

"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 sub-section (2) of section 11, section 14 and section 16.".

Section 4 - Amendment of section 11

In section 11 of the principal Act, in sub-section (1), for the words "contract may, in the discretion of the court", the words "contract shall" shall be substituted.

Section 5 - Substitution of new sections for section 14

For section 14 of the principal Act, the following sections shall be substituted, namely:--

"14. Contracts not specifically enforceable.

The following contracts cannot be specifically enforced, namely:--

(a)      where a party to the contract has obtained substituted performance of contract in accordance with the provisions of section 20;

(b)      a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise;

(c)      a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and

(d)      a contract which is in its nature determinable

14A. Power of court to engage experts.

(1)     Without prejudice to the generality of the provisions contained in the Code of Civil Procedure, 1908 (5 of 1908), in any suit under this Act, where the court considers it necessary to get expert opinion to assist it on any specific issue involved in the suit, it may engage one or more experts and direct to report to it on such issue and may secure attendance of the expert for providing evidence, including production of documents on the issue.

(2)     The court may require or direct any person to give relevant information to the expert or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

(3)     The opinion or report given by the expert shall form part of the record of the suit; and the court, or with the permission of the court any of the parties to the suit, may examine the expert personally in open court on any of the matters referred to him or mentioned in his opinion or report, or as to his opinion or report, or as to the manner in which he has made the inspection.

(4)     The expert shall be entitled to such fee, cost or expense as the court may fix, which shall be payable by the parties in such proportion, and at such time, as the court may direct.".

Section 6 - Amendment of section 15

In section 15 of the principal Act, after clause (f), the following clause shall be inserted, namely:--

"(fa) when a limited liability partnership has entered into a contract and subsequently becomes amalgamated with another limited liability partnership, the new limited liability partnership which arises out of the amalgamation.".

Section 7 - Amendment of section 16

In section 16 of the principal Act,--

(i)       for clause (a), the following clause shall be substituted, namely:--

"(a) who has obtained substituted performance of contract under section 20; or";

(ii)      in clause (c),--

(I)      for the words "who fails to aver and prove", the words "who fails to prove" shall be substituted;

(II)     in the Explanation, in clause (ii), for the words "must aver", the words "must prove" shall be substituted.

Section 8 - Amendment of section 19

In section 19 of the principal Act, after clause (c), the following clause shall be inserted, namely:--

"(ca) when a limited liability partnership has entered into a contract and subsequently becomes amalgamated with another limited liability partnership, the new limited liability partnership which arises out of the amalgamation.".

Section 9 - Amendment of sub-heading under Chapter II

For sub-heading "Discretion and powers of Court" occurring after section 19, the sub-heading "Substituted performance of contracts, etc." shall be substituted.

Section 10 - Substitution of new sections for section 20

For section 20 of the principal Act, the following sections shall be substituted, namely:--

"20. Substituted performance of contract.

(1)     Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.

(2)     No substituted performance of contract under sub-section (1) shall be undertaken unless the party who suffers such breach has given a notice in writing, of not less than thirty days, to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency:

Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency.

(3)     Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach.

(4)     Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach.

20A. Special provisions for contract relating to infrastructure project.

(1)     No injunction shall be granted by a court in a suit under this Act involving a contract relating to an infrastructure project specified in the Schedule, where granting injunction would cause impediment or delay in the progress or completion of such infrastructure project.

Explanation.-- For the purposes of this section, section 20B and clause (ha) of section 41, the expression "infrastructure project" means the category of projects and infrastructure Sub-Sectors specified in the Schedule.

(2)     The Central Government may, depending upon the requirement for development of infrastructure projects, and if it considers necessary or expedient to do so, by notification in the Official Gazette, amend the Schedule relating to any Category of projects or Infrastructure Sub-Sectors.

(3)     Every notification issued under this Act by the Central Government shall be laid, as soon as may be after it is issued, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the notification or both Houses agree that the notification should not be made, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification.

20B. Special Courts.

The State Government, in consultation with the Chief Justice of the High Court, shall designate, by notification published in the Official Gazette, one or more Civil Courts as Special Courts, within the local limits of the area to exercise jurisdiction and to try a suit under this Act in respect of contracts relating to infrastructure projects.

20C. Expeditious disposal of suits.

Notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), a suit filed under the provisions of this Act shall be disposed of by the court within a period of twelve months from the date of service of summons to the defendant:

Provided that the said period may be extended for a further period not exceeding six months in aggregate after recording reasons in writing for such extension by the court.".

Section 11 - Amendment of section 21

In section 21 of the principal Act, in sub-section (1), for the words ", either in addition to, or in substitution of," the words "in addition to" shall be substituted.

Section 12 - Amendment of section 25

In section 25 of the principal Act, for the words and figures "the Arbitration Act, 1940 (10 of 1940)", the words and figures "the Arbitration and Conciliation Act, 1996 (26 of 1996)" shall be substituted.

Section 13 - Amendment of section 41

In section 41 of the principal Act, after clause (h), the following clause shall be inserted, namely:--

"(ha) if it would impede or delay the progress or completion of any infrastructure project or interfere with the continued provision of relevant facility related thereto or services being the subject matter of such project.".

Section 14 - Insertion of Schedule

After Part III of the principal Act, the following Schedule shall be inserted, namely:--

'THE SCHEDULE

[See sections 20A and 41 (ha)]

Category of projects and Infrastructure Sub-Sectors

Statement of Objects and Reasons - SPECIFIC RELIEF (AMENDMENT) ACT, 2017

STATEMENT OF OBJECTS AND REASONS

(1)     The Specific Relief Act, 1963 was enacted to define and amend the law relating to certain kinds of specific relief. It contains provisions, inter alia, specific performance of contracts, contracts not specifically enforceable, parties who may obtain and against whom specific performance may be obtained, etc. It also confers wide discretionary powers upon the courts to decree specific performance and to refuse injunction, etc. As a result of wide discretionary powers, the courts in majority of cases award damages as a general rule and grant specific performance as an exception.

(2)     The tremendous economic development since the enactment of the Act have brought in enormous commercial activities in India including foreign direct investments, public private partnerships, public utilities infrastructure developments, etc.; which have prompted extensive reforms in the related laws to facilitate enforcement of contracts, settlement of disputes in speedy manner. It has been felt that the Act is not in tune with the rapid economic growth happening in our country and the expansion of infrastructure activities that are needed for the overall development of the country.

(3)     In view of the above, it is proposed to do away with the wider discretion of courts to grant specific performance and to make specific performance of contract a general rule than exception subject to certain limited grounds. Further, it is proposed to provide for substituted performance of contracts, where a contract is broken, the party who suffers would be entitled to get the contract performed by a third party or by his own agency and to recover expenses and costs, including compensation from the party who failed to perform his part of contract. This would be an alternative remedy at the option of the party who suffers the broken contract. It is also proposed to enable the courts to engage experts on specific issues and to secure their attendance, etc.

(4)     A new section 20A is proposed for infrastructure project contracts which provides that the court shall not grant injunction in any suit, where it appears to it that granting injunction would cause hindrance or delay in the continuance or completion of the infrastructure project. The Department of Economic Affairs is the nodal agency for specifying various categories of projects and infrastructure sub-sectors, which is provided as Schedule to the Bill and it is proposed that the said Department may amend the Schedule relating to any such category or sub-sectors.

(5)     Special courts are proposed to be designated to try suits in respect of contracts relating to infrastructure projects and to dispose of such suits within a period of twelve months from the date of service of summons to the defendant and also to extend the said period for another six months in aggregate, after recordings reasons therefore.

The Bill seeks to achieve the above objectives.