📚 Specific Relief Act: Substituted Performance of Contract – Section 20
🕰️ Section 20: Amended Section (Effective 1.10.2018)
Section 20(1) – Substituted performance of contract
- Without prejudice to the generality of provisions in the Indian Contract Act 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 or suffered by him from the party committing such breach
Section 20(2)
- No substituted performance shall be undertaken unless the party suffering 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 the time specified in the notice
- On refusal or failure, the party may get the contract performed by a third party or by his own agency
Proviso
- The party who suffers breach shall not be entitled to recover the above expenses and costs unless the contract is performed through a third party or by his own agency
Section 20(3)
- Where the party suffering breach has got the contract performed through a third party or by his own agency after giving notice
- He shall not be entitled to claim relief of specific performance against the party in breach
Section 20(4)
- This section shall not prevent the party who has suffered breach from claiming compensation from the party in breach
🕰️ The Old Section 20 (Before 1.10.2018)
Section 20(1) – Discretion as to decreeing specific performance
- The jurisdiction to decree specific performance is discretionary
- The court is not bound to grant such relief merely because it is lawful to do so
- The discretion of the court is sound and reasonable, guided by judicial principles and capable of correction by a court of appeal
Judicial Principles:
- Nirmala Anand v. Advent Corporation [2002 SC]
- Grant of specific performance lies in the discretion of the court
- Reasonable conditions, including payment of additional amount, can be imposed
- Ordinarily, plaintiff is not denied relief only due to phenomenal increase in price during pendency of litigation
- Shenbagam v. K.K. Rathinavel [2022 SC]
- Readiness of respondent refers to financial capacity to pay balance consideration
- Time is generally not of the essence in agreements for sale of immoveable property
⚖️ Supreme Court Case: Shenbagam v. K.K. Rathinavel [2022 SC]
The inconsistency in the respondent’s conduct, lack of communication with appellants, and delay of about three years from the date fixed for performance are indicative of lack of will to perform.
Readiness refers to whether the respondent was financially capable to pay the balance consideration. The plaintiff must prove readiness and willingness to perform the contract; the burden lies on the plaintiff.
Generally, time is not of essence in agreements for sale of immoveable property. Courts consider conduct of parties, escalation of property price, and whether any party unfairly benefits from the decree to ensure no injustice is caused.
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💡 FAQs on Section 20 – Substituted Performance of Contract (Specific Relief Act)
⚖️ What is meant by “substituted performance of contract” under Section 20 of the Specific Relief Act?
Under Section 20 (1), when one party fails to perform their promise, the aggrieved party may have the option to get the contract performed through a third party or by their own agency, after serving a 30-day notice, and recover the actual expenses or losses from the defaulting party. This modernized remedy was introduced by the 2018 Amendment.
📜 How is Section 20 of the Specific Relief Act different after the 2018 amendment?
Before 2018, Section 20 dealt with the discretionary power of courts to grant or refuse specific performance. After 1 October 2018, the new Section 20 focuses entirely on substituted performance, giving parties the ability to remedy a breach without necessarily seeking a court decree for specific performance.
🧾 What are the conditions to exercise substituted performance under Section 20(2)?
The party suffering the breach must serve a written notice of at least 30 days to the defaulting party, requiring them to perform the contract within the specified time. Only on their refusal or failure can the aggrieved party perform the contract through a third party or their own agency.
⚖️ Can a party still claim specific performance after substituted performance is undertaken?
No. According to Section 20(3), once a party has obtained substituted performance through a third party or their own agency, they cannot claim specific performance from the defaulting party. However, under Section 20(4), they may still claim monetary compensation for losses.
⚖️ What judicial principles guided courts under the old Section 20 before 2018?
The old Section 20 gave courts discretionary power to grant or deny specific performance. In Nirmala Anand v. Advent Corporation (2002 SC), the Supreme Court held that even if legally permissible, granting specific performance was not mandatory — the court could deny it if it caused hardship or unjust advantage to a party.
💰 Does substituted performance bar a claim for damages or compensation?
No. Section 20(4) expressly provides that even after obtaining substituted performance, the aggrieved party may still seek compensation for loss suffered due to the breach. Thus, substituted performance and compensation can co-exist as separate remedies.
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