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Report No. 199

(b) Specific Relief Act, 1963 (Procedural unfairness):

Principles of 'fairness' are the basis of section 20 of the Specific Relief Act, 1963 which deals with the 'Discretion as to decreeing specific performance'. Discretion, says subsection (1) is not to be arbitrary but sound and reasonably guided by judicial principles. Subsection (2) enumerates certain guidelines in which the Court may properly exercise not to decree specific performance. Clauses (a) and (c) of sub-section (2) of section 20 deal with procedural unfairness and refer to the following situations:

(a) where the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage, over the defendant; or

(b) where the defendant entered into the contract under circumstances which though not render the contract voidable, makes it inequitable to enforce specific performance."

There are two Explanations below sub-section (2) of section 20. Explanation I states that mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within clause (b). Explanation II states that the question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

Subsection (3) of section 20 states that the 'Court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance'.

Subsection (4) of section 20 states that the 'Court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party'.

Unfair (Procedural and Substantive) Terms in Contract Back

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