JOINT PROMISORS AND THE NATURE OF THEIR LIABILITY

 Specific performance of part of contract [S. 12 of Specific Performance Act]

Section 12 deals with specific performance of a part of a contract. It provides in clause (1) that as a general rule, the court shall not grant specific performance of a part of a contract. The section, however, recognises in clauses (2) to (4) certain exceptions to the above rule. Whether specific performance of a part of the contract is to be ordered or not has been wholly left by the section to one deciding factor, namely, the proportion the part which can be performed bears to that which cannot be performed. Where the part which cannot be performed bears only a small proportion to the whole in value and the unperformed part can be compensated adequately in terms of money, the court may order specific performance of one part and compensation for the other.

A slightly different principle comes into play where the part which cannot be performed forms a considerable part of the whole. In such cases the court has first to see whether the major part which has to be left out admits of money compensation or does not do so. If the unperformed portion can be compensated in terms of money the court may order specific performance of the rest, provided that the party seeking relief has paid his consideration under the contract as reduced by the amount of compensation for the unperformed portion. Where the matter does not admit of compensation the court may order specific performance only when the party seeking relief has paid his whole consideration without any reduction whatsoever.

Where the part that would remain unperformed does not admit of compensation in terms of money, the court would order specific performance only if the party seeking performance undertakes to pay the consideration for the whole of the contract without any abatement. In either situation, the party seeking performance of a part of a contract has to relinquish all claims to the performance of the remaining part and also all rights to compensation either for the deficiency or for any loss or damage sustained through the defendant's default as to performance. An illustrative account of the working of the principle is to be found in Rutherford v Acton Adams.

If a vendor sues and is in a position to convey substantially what the purchaser has contracted to get, the court will decree specific performance with compensation for any small and immaterial deficiency, provided that the vendor has not, by misrepresentation or otherwise, disentitled himself to this remedy. Another possible case arises where a vendor claims specific performance and where the court refuses it unless the purchaser is willing to consent to a decree on the terms that the vendor will make compensation to the purchaser who agrees to such a decree on condition that he is compensated. If it is the purchaser who is suing, the court holds him to have even a larger right. Subject to considerations of hardship, he may elect to take all he can get, and to have a proportionate abatement of the purchase money. But this right applies only to a deficiency in the subject-matter described in the contract.

Where a contract was incapable of being performed and a party categorically refused to accept part-performance, it was held that there was no readiness and willingness at all stages to accept part-performance. Therefore, such a party could not be permitted later to change its position and elect to accept part-performance. The Court said:

"In cases where a contract is not capable of being performed in whole then the readiness and willingness, at all stages, is the readiness and willingness to accept part-performance. If a contract is not capable of being performed in whole and a party clearly indicates that he is not willing to accept part-performance, then there is no readiness and willingness, at all stages, to accept part-performance. In that case there can be no specific performance of a part of the contract at a later stage." In a case under the J&K Specific Relief Act, 1977 (Section 15) it was held that where a party was unable to perform the whole of his part, the court could direct the performance of so much of his part as he was capable of performing (1/3rd share of the property).

Section 12 is reproduced below:

12. Specific performance of part of contract.

(1) Except as otherwise hereinafter provided in this section, the court shall not direct the specific performance of a part of a contract.

(2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value and admits of compensation in money, the court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.

(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either-

(a) forms a considerable part of the whole, though admitting of compensation in money; or

(b) does not admit of compensation in money; he is not entitled to obtain a decree for specific performance; but the court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party-

(i) in a case falling under clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and in a case falling under clause (b), [pays or has paid] the consideration for the whole of the contract without any abatement; and (ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant.

(4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part.

Explanation. For the purposes of this section, a party to a contract shall be deemed to be unable to perform the whole of his part of it if a portion of its subject-matter existing at the date of the contract has ceased to exist at the time of its performance. he requirements of the section were stated by the Supreme Court as follows:

"The ingredients which would attract specific performance of the part of the contract under the latter part of sub-section (3) of Section 12 are: (1) if party to an agreement is unable to perform a part of the contract, he is to be treated as defaulting party to that extent, and (ii) the other party to an agreement must, in a suit for such specific performance, either pay or have To paid the whole of the agreed amount, for that part of the contract which is capable of being performed by the defaulting party and also relinquish his claim in respect of the other part of the contract which the defaulting party is not capable of performing and relinquishes the claim of compensation in respect of loss sustained by him. If such ingredients are 10 satisfied, the discretionary relief of specific performance is ordinarily granted unless there is delay or laches or any other disability on the part of the other party."

Illustrations as to Explanation-(a) A contracts to sell a house to B for a lakh of rupees. The day after the contract is made, the house is destroyed by a cyclone. B may be compelled to perform his part of the contract by paying the purchase-money.

(b) In consideration of a sum of money payable by B, A contracts to grant an annuity to B for B's life. The day after the contract has been made, B is thrown from his house and billed. B's representative may be compelled to pay the purchase-money.