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How the Specific relief Act can come to rescue at the time of COVID-19 Pandemic?

Due to the sudden outbreak of Corona virus pandemic, a large number of areas have been affected, contracts being one of them. Renegotiation of contracts is being done and discussions are being made regarding their applicability at the current times. Through this research paper, an attempt has been made to look into the usefulness of the Specific Relief Act, 1963 in this situation. The act generally, deals with civil rights and not penal laws.

The paper has been broadly divided into four parts namely:
  1. Recovering possession of property (section 5-8)
  2. Specific performance of contracts ( section 9-25)
  3. Preventive relief i.e. injunctions ( section 36-44)
  4. Other important chapters such as rectification of instruments, rescission of contracts, cancellation of instruments, declaratory decree, etc.

Recovering possession of property

Immovable property: Sections 5 & 6 of the act lists down the provisions for recovery of possession of immovable property. Section 5 says that a person who is entitled to possession of specific immovable property can recover it through the manner provided under the Code of Civil Procedure, 1908. The title under this section must be of ownership or possession. Under Section 6, a person who is dispossessed of his immovable property can file a suit.

The requirements for this section to be applicable are:
  • The plaintiff is in Juridical possession of the immovable property in dispute
  • He has been dispossessed without his consent and without following the due process of law.
  • The dispossession has taken place within six months of filing the suit.

Under section 6, the possession refers to a legal possession which may exist with or without actual possession. Section 14 of the Limitation Act, 1963 applies to proceedings against dispossession. But a relief comes as Supreme Court while invoking its plenary powers under article 142extended the limitation period of appeals from high courts or tribunals.[1]

This is because difficulties might be faced by the litigants all over the country to file their applications/ petitions/ suits, etc. as given under the general law of litigation or other central/ state laws.

Movable property:
section 7 provides that a person who is entitled to possession of specific movable property may recover it in the manner as provided under code of civil procedure, 1908 but for that some ingredients need to be fulfilled:
  • Only the persons who are having the present/ current possession of the movable property can file a suit under this section.
  • The possession may be by ownership or through a temporary or special right as provided under explanation 2 of section 7. The right may arise through bailment, pawn or by finding of goods.
Under article 91 (b) of Limitation Act, 1963, a period of three years is provided for filing of suit starting from the date when the property is wrongfully taken. Under section 7, a suit can be brought even against the owner if the person is enjoying special or temporary right to the present possession. Section 8 provides for liability of person, not as owner, to do delivery to a person who is entitled to immediate possession.

But the person under section 8 must:
  • Hold property as an agent or trustee of owner
  • When it is impossible to ascertain monetary value of property
  • When it is not possible to calculate damage to be awarded if loss happens to such loss
  • Hold the property wrongfully

Therefore, section 6 of the specific relief act can be used by the tenants to regain the possession of their property but other factors are also included in it such as the presence of the force majeure clause in the lease agreement, the rental laws of the given state, etc. Also, the 2018 amendment to section 6 of the act by including the persons through whom the said person has been in possession in filing the suit for dispossession, proved to be of great help.

Specific Performance of contracts

The specific performance of contracts means the performance or implementation of the exact terms of the contract. But for this to come to rescue, the following conditions must be met under section 10of the specific relief act, 1963:
  1. When there is no standard for ascertaining the actual damage
  2. When compensation in terms of money is not adequate relief. This includes the cases where subject matter of the contract is an immovable or movable property, when they are not an ordinary article of commerce, or are not easily available in market, etc.
    Although under section 14, there are certain contracts which cannot be specifically enforced such as the contracts where:
    1. Compensation in terms of money is an adequate relief
    2. Where the contract has very minute details.
    3. Contracts involving performance of continuous duty which can't be supervised by the courts
    4. the contracts of determinable nature such as the partnership contracts

Although under section 14 (3), there are also some contracts which are specifically enforceable. In general terms, the court can refer to any kind of forced action, though it is mostly enforced to complete a transaction which was previously agreed upon. So, if any situation arises at the time of the present pandemic due to which the performance of contract is interrupted, then at least under this chapter, the court can't grant any relief according to the changed circumstances.

The specific performance has a lot to do with the real estate contracts at the current time because each parcel of land is termed as unique and the monetary damages are not adequate. However, in terms of specific performance in employment context, the court may not order specific performance because of the unwanted character of two parties being forced into an employment agreement.

According to section 20 of the original act, the courts were having discretion to grant the remedy of specific relief. Earlier, it was granted only in exceptional cases. But through the 2018 amendment act, this concept was removed. But there are still limited grounds on which the court can deny the specific relief. So, there are chances of increased number of cases in which specific relief can be granted.

Also, the requirement in clause (c) section 16 of the act that required the parties to plead that they are ready and willing to perform the contract has been done away with. Now, the party has no burden to prove its readiness to perform the contract. Although the mere plea that plaintiff is ready to pay consideration can't be considered. It is mandatory on his part to prove that he is having means to generate the same.[2]

Preventive relief i.e. injunctions

Injunction is a kind of equitable remedy to prevent the defendant party from doing certain acts so that they do not cause any kind of nuisance to the plaintiff.

There are basically three types of injunctions provided under the specific relief act namely:
  1. Temporary injunction
  2. Perpetual injunction
  3. Mandatory injunction
Without dealing with each one of them section wise, I would just like to restrain myself to talk about their applicability at the time of current pandemic. The temporary injunctions are dealt with under section 37 of the specific relief act. They are granted for a specific period of time or until further orders of the court. This is done to protect the interests of the individual or the property of the suit till the time of final judgement.

There are some of the cases under which temporary injunction can be granted such as:
  • Where the defendant threatens to deprive the plaintiff of his property
  • To prevent the defendant to commit the breach of contract or any other such injury
  • To stay the operation of an order related to transfer, suspension, retirement, dismissal, removal or termination of service of a person appointed in public service or engaged in state's affairs. This may include employee of a company owned or controlled by state government.
Many other cases are also included under it. The Bombay high court in a recent judgement dated March 30, 2020granted injunction against sale of pledged shares taking note of the present COVID-19 situation[3]. But that leads to a lot of questions as the order is not descriptive.

On the other hand, the perpetual injunction (section 37(2)) is given at the time of final judgement. Section 38 deals with the cases in which the plaintiff can be granted with perpetual calendar injunction. The burden of proof lies on the plaintiff to prove the breach of obligation by the way of showing the infringement of legal right.

Although cannot be granted on the basis of wrongful possession against the lawful owner. The continuing possession by a lessee without the consent of lessor may not count as lawful possession but it is 'juridical possession' and therefore, injunctions can be granted on n such cases.

At this time of the pandemic, the courts are limiting the in-person hearing and only most important cases will be heard through video conferencing because of the social distancing and shelter at home orders. Because of this many businesses are worried about obtaining the injunction reliefs. Also, with an increase of the work from home arrangement for a large number of employees, there is a greater threat of employees' taking or misusing their employer's confidential information. So, it becomes very important for the company to prevent irreparable harm to their businesses by obtaining injunction.

Ex parte injunction: The Uttarakhand high court in one of its judgments echoed that there are three essentials for the purpose of granting an ex parte interim injunction by a court namely[4]
  1. Prima facie case
  2. Balance of convenience
  3. And irreparable loss
The ex parte injunction is generally, a direction granted after hearing only one party. It takes place in matters of urgency without any notice to the other party involved. But there are chances that this kind of order may restrain a party or an entity from pursuing his profession. This might result in a loss which can't be compensated in money.

So, while thinking of granting an ex parte relief, the court needs to look into several aspects so that no party suffers from unwanted damages which will make their situation even worse at this time.

Other important chapters
Rectification of instruments and rescission of contracts: rectification basically means correcting the errors in a legal document/ contract. It is a fair and equitable remedy granted by the court when the facts do not seem according to the intention of the parties. The rectification is provided in cases where there is fraud and mutual mistake of both the parties.

The party who wants rectification needs to establish that a prior complete agreement was reduced in writing according to the common intention of parties but due to reason of mistake, the common intention could not be expressed.

It may be that during this outbreak or possibly, even after it ends, few parties to a contract try to waiver away from their contractual obligation seeking the excuse of the disruption caused due to pandemic. So, if a party to a contact commits a contractual breach, the other can rescind the contract and free himself from it. This is done with the aim to put an end to the contract and bring the parties back to their original position. If the contract rescinds, the court can ask the party to restore the benefits (section 30 of the specific relief act).

Cancellation of instruments: in simple terms, the cancellation of instruments means bringing down to zero a written document which is proof of transaction between the parties who are part of transaction.

The main requirements for filing a suit of cancellation are:
  • If the instrument becomes void
  • If it becomes voidable
  • If the instrument has potential to cause injury/harm to the party that is filing the suit.
  • If the party that has filed the suit is under reasonable apprehension of injury by the other party or it has already caused the damage/injury.
There are also provisions relating to power of court, requiring restoration of benefits received and fair compensation under section 33of the act. This serves the end of justice for the parties who are in fear of being harmed with the performance of such instruments. At the time of this pandemic, there may arise a number of cases where a party may fear being harmed by the other party in the contracts such as lease deed, insurance policy, mortgage, etc.

But again that depends on a case to case basis. Also, the will deeds at this time will required to be cancelled and restructured a lot. A prominent case in this regard is the Ganga Prasad vs. Munna Lal & others decided on 21 December, 2017.

Conclusion:
So, the specific relief act can serve a fruitful purpose at the time of pandemic if used correctly. There are some provisions related to recovery of property and preventive relief that can come to direct rescue. Although it's difficult to bring to the front the exact purposes that will be served by the Specific relief act, 1963 or any other act or legislation at this point of time. This may be because such kind of crisis and some of the situations arising because of it have never been experienced before. But still there is a scope for the specific relief act to prove its efficacy and application.

End-Notes:
  1. Suo Moto writ petition (civil) No(s). 3/2020
  2. Supreme Court In C.S. Ventakesh v. A.S.C. Murthy ( civil appeal no.8425 of 2009) on 07.02.2002
  3. Rural Fair price Wholesale Limited & Anr. v. IDBI Trusteeship Services Limited & Ors Commercial Suit No. (L) 307 of 2020
  4. Balwant Singh Chauhan v. Mahavidyalaya Sabha, Jwalapur, Haridwar decided on 14.05.2019

    Award Winning Article Is Written By: Ms.Srishti Yadav
    Awarded certificate of Excellence
    Authentication No: SP125401934075-11-0921

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