Section 16

16. Personal bars to relief-

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

(a) Who has obtained substituted performance of contract under Section 20; or

(b) Who has become incapable of performing, or violates any essential term of, the contract than on his part remains to be performed, or acts in fraud of the contract, or willfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or

(c) Who fails to [prove] that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.

Explanation- For the purposes of clause (c)-

(i) Where a contract involves the payment of money, it is not essential for the plain­tiff to actually tender to the defendant or to deposit in court any money except when so directed by the court.

(ii) The plaintiff must prove performance of, or readiness and willingness to perform, the contract according to its true construc­tion.

Personal bars to relief i.e., persons not enti­tled for relief

Section 16 talks about the person who can­not claim relief of specific performance. Signifi­cantly, under Section 16 relief cannot be granted in favour of following persons:

(a) A person who has obtained substituted performance of contract: who has obtained substituted performance of contract under Section 20. See discussion under Section 20.

(b) A person who becomes incapable or commits any wrong: Another person who is not entitled to specific relief is a person who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or willfully acts at variance with, or in subversion of, the relation intended to be established by the contract. Therefore, Section 16(1)(a) mentions following persons who are not entitled to claim specific relief:

(i). A person who becomes incapable of performing the contract.

(ii). A person who violates any essential term of the contract.

(iii). A person who acts in fraud of the contract;

(iv). Willfully acts at variance with, or in subversion of, the relation intended to be established by the contract;

(i). A person who becomes incapable of performing the contract- Where after entering into the contract the promisor has become incapable of performing the contract he cannot claim specific relief, i.e., insolvent or person of unsound mind;

Example– A, a singer or dances enters into a contract to give her performance on B’s birthday. Subsequently, she met with an accident and became incapable of giving her performance. She cannot claim specific performance as performance becomes impossible and the contract becomes void.

Example 2- A, a singer or dance enters into a contract to give her performance on B, Birthday. Subsequently, she met with an accident and became and insane person. She cannot claim specific performance as performance becomes impossible and the contract becomes void.

(ii). A person who violates any essential term of the contract- where a party to the contract violates any essential term of the contract that is to be performed on his part then it is personal bar and he cannot claim specific performance.

Example 1- A contracts to sell rare goods to B, who was to pay advance money. B failed to pay advance money he cannot claim specific relief.

Example 2- A contracts to sell his house to B who agreed to pay advance money so that A can get that property free from mortgage before selling. B failed to pay advance money. Accordingly A could not get his property free from mortgage and could not sell to B. No claim of specific relief shall be granted in favour of B.

(iii). A person who acts in fraud of the contract- another personal bar to the party is when he is acting in fraud of contract.

Example 1- A contracts to sell B a house and garden in which there are ornamental trees, which are a material element in the value of the property. A without B’s consent, cut the trees. A cannot enforce specific performance of the contract.

Example 2- Where A, holding land under contract with B for a lease, commits waste, or treats the land in an inappropriate manner. A cannot enforce specific performance of contract.

(iv). Willfully acts at variance with, or in subversion of, the relation intended to be established by the contract;- where the party to contract willfully acts at variance with, or in subversion of, the relation intended to be established by the contract, it acts as personal bar and he cannot claim specific relief.

Example- A, agent of X enters into a contract to sell X’s property to B. Subsequently, A flies a suit to challenge his status as agent of X on the ground that his consent for the contract of agency was obtained by X due to fraud. If B makes breach of contract. A cannot claim specific relief as he willfully acts at variance with, or in subversion of, the relation intended to be established by the contract.

Readiness and willingness to performWillingness is a mental element whereas readiness is translating the will into action and is preceded by the necessary preparation to be ready. It means readiness must be backed by willingness and its imminent physical action is shown when it is about to put into action. It is important to note that both willingness and readiness must be there. There may be a situation where a person is willing to do but not ready to do or he is ready to do due to some pressure but not willing to do. Therefore, if any of them is lacking the cannot claim specific performance.

In Jai Gopal Goyal v. Bishen Dayal Goyal, defendant had agreed to sell house to plaintiff. It was averred by plaintiff that amount of loan advanced by them to defendant was treated as advance and balance sum was to be paid by plaintiffs at the time of execution and registration of sale deed. But defendant had issued notice to plaintiff to return money advanced by plaintiffs earlier and vacate suit property. As evidence was led by plaintiffs in support of averments made in plaint; that he had paid advance money and willing to pay balance at the time of execution of sale deed, which remained unrebutted, hence, plaintiffs were entitled to decree for specific performance, as they were ready and willing to perform their obligation under agreement. (AIR 2005 Del 39)

In Hakim Singh V Ram Snehi, the purchaser was present before the sub-Registrar on the date mentioned in the notice sent to him by the vendor for registration. On the other hand, inspite of the notice, the vendor failed to appear before the sub- Registrar. It was held that the purchaser was ready and willing to perform his part of the contract and hence he was entitled to specific performance. (AIR 2001 All 231)

Other than terms the performance of which has been prevented or waived by the defendant cannot claim specific relief- Significantly, where a party to contract has performed a part of the contract and is ready and willing to perform remaining part and claims that he is either prevented by the defendant from performing that part or defendant has waived performance of that part then he can file a suit for specific performance provided he proves in the court that he was ready and willing to perform remaining part or performance was either prevented or waived by the defendant. 

Not essential for the plaintiff to actually tender to the defendant or to deposit in court any money [Explanation i]- Where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

Syed Dastagir v. T.R. Gopalkrishna Setty, the readiness and willingness to perform the contract as required by Explanation (i) to Section 16 (c) means compliance in spirit and substance and not in letter and form. If the plaintiff proves that he has already paid the substantial amount and makes payment of the balance of Rs. 120 in the court without the court’s order the plaintiff is supposed to be ready and willing to perform the contract and the delayed payment of the balance of Rs. 120 is not to be constructed adversely against the plaintiff. The plaintiff was therefore, held entitled to the specific performance of agreement to sell the properties.

Plaintiff must prove performance of, or readiness and willingness to perform according to its true construction [Explanation ii]- Explanation ii to this sub section provides that the plaintiff must [prove] performance of, or readiness and willingness to perform, the contract according to its true construction. The requirement of this provision is that plaintiff must prove that he had always been ready and willing to perform the additional term of the contract. Therefore, sufficient evidence to indicate readiness and willingness of the plaintiff from the date of suit till date hearing of suit must be there.

Immediately after the expiry of the six months period lawyer’s notice was given calling upon the appellant defendant to execute the sale deed. It is also averred in the plaint that the plaintiff met the defendant several times and requested him to execute the sale deed. On finding inaction in his part, the suit for specific performance of contract was filed and there was clear averment in plaint that the plaintiff was always ready to get the sale deed prepared after paying necessary consideration and also that defendant is bound to execute the sale deed on receiving the balance amount and the plaintiff was entitled to get the document executed by the defendant. It was held that order decreeing suit for specific performance in favour of plaintiff would be proper.

Readiness and willingness to perform: time is essence of contract

According to Pollock & Mulla the intention can be ascertained from-

(i). The express words used in the contract.

(ii). The nature of the property which forms the subject matter of the contract.

(iii). The nature of the contract, and

(iv). The surrounding circumstances.

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