Comments on the Specific Relief (Amendment) Bill, 2018

After a long time, the Specific Relief Act, 1963 is likely to be amended (Bill). Some significant changes have been introduced into the law and the implications of these are far-reaching. It is surprising that the Bill has received little attention in the academic community. 

The Government, as usual, is doing a sordid job in failing to communicate the legislative intent in introducing the amendments to the courts by not publishing the Report of the Expert Committee. Except for a press release or two, nothing about the deliberations of the Committee or its report is in public domain, which is really sad. Considering the ground breaking changes that are being suggested, it is important for the government to make the Report publicly available. We will do a section by section comment on the Bill (Bill No. 248/2017) in a few parts.

Just a tiny detour prior to the discussion of the provision. This Reply by the then law minister on the Expert Committee gives a description about the constitution of the Committee and its Terms of Reference. 

A summary of the proposed amendments can be culled out from the Statement of Objects and Reasons to the Bill and are listed below:

• Due to wide discretion conferred on courts, the courts award damages in majority of the cases as a general rule and award specific performance in exceptional cases. The Bill proposes to do away with damages as a general rule and provide for specific performance as a general rule. 
• The Bill seeks to provide for substituted performance of contracts as an alternative remedy by getting the broken contract performed through a third party and to recover costs, expenses, including compensation for failure to perform.
• In respect of infrastructure projects as enumerated in the Schedule proposed to be added, no injunction would be granted in any suit where it would appear that the grant of injunction would cause hindrance or delay in the continuance or completion of the project.
• Special courts are to be designated to try suits relating to infrastructure projects and the same are to be disposed of in 12 months.

The first change listed above, is a fundamental change to contract law since in the entire common law world, damages is the default remedy and specific performance is the exception. The basis of this principle is the efficient breach theory. The proposed amendments therefore go to the root of contract law theory and requires extensive discussions.

Even so, the Bill was introduced in the Lok Sabha on 21.12.2017 and was passed by the Lok Sabha on 15.03.2018. Despite the substantial changes that the Bill seeks to achieve, there was hardly any discussion in the Lok Sabha on the Bill. Except for Mr. NK Premachandran from Kollam, nobody even discussed the proposed amendments in the Lok Sabha.

In this post, we will discuss the change proposed to Section 6 of the 1963 Act. Subsequent posts on this topic will discuss the remaining amendments proposed to be made.  

Section 2 of the 2018 Amendment Bill seeks introduction of the phrase "through whom he has been in possession or any person" in the existing Section 6(1) of the 1963 Act. Post-amendment, the provision would look like this:

"If any person is dispossessed without his consent of immovable property otherwise than in due course of law, he or any person through whom he has been in possession or any person claiming through him may, by suit, recover possession thereof, notwithstanding any other title that may be set up in such suit."

The first amendment proposed allows a person through whom the dispossessed came to possess the immovable property to file a suit against the party who dispossesses such dispossessed. For instance, if Ramu is the owner of an immovable property and has allowed Shamu possession of the said property, in case Gholu dispossesses Shamu forcibly, Ramu, as the owner of the property, could sue Gholu for repossession. Thus, the provision grants an additional remedy to the owner in case of dispossession by a third party. Such an owner could file a suit under the Code of Civil Procedure, 1908 based on his title to the property.

It would seem that the proposed amendment gives statutory backing to the decision of the Supreme Court in Sadashiv Shyama Sawant v Anita Anant Sawant (2010) 3 SCC 385. In Sadashiv the two judge Bench of the Supreme Court had to decide whether in order to invoke Section 6, actual possession is necessary. The Supreme Court took note of contradictory rulings by different High Courts and settled the law by holding: "The key words in Section 6(1) are "dispossessed" and "he or any person claiming through him". A person is said to have been dispossessed when he has been deprived of his possession; such deprivation may be of actual possession or legal possession. Possession in law follows right to possession. The right to possession, though distinct from possession, is treated as equivalent to possession itself for certain purposes."

As regards the rights of a landlord if the tenant is forcibly dispossessed by a third party, the court's view requires to be extensively quoted: 

"19. A landlord by letting out the property to a tenant does not lose possession as he continues to retain the legal possession although actual possession, user and control of that property is with the tenant. By retaining legal possession or in any case constructive possession, the landlord also retains all his legal remedies. As a matter of law, the dispossession of tenant by a third party is dispossession of the landlord. The word "dispossessed" in Section 6(1) must be read in this context and not in light of the actual possession alone. If a tenant is thrown out forcibly from the tenanted premises by a trespasser, the landlord has implied right of entry in order to recover possession (for himself and his tenant). Similarly, the expression "any person claiming through him" would bring within its fold the landlord as he continues in legal possession over the tenanted property through his tenant. As a matter of fact, on plain reading of Section 6(1), it is clear that besides the person who has been dispossessed, any person claiming through him can also file a suit seeking recovery of possession. Obviously, a landlord who holds the possession through his tenant is competent to maintain suit under Section 6 and recover possession from a trespasser who has forcibly dispossessed his tenant. A landlord when he lets out his property to the tenant is not deprived of his possession in the property in law. What is altered is mode in which the landlord held his possession in the property inasmuch as the tenant comes into physical possession while the landlord retains possession through his tenant..."

The view taken by the court is correct. On the question on whether while bringing the suit the tenant should be made a necessary party, the court held that it is possible that a tenant may not be interested in suing the third party, Therefore, according to the court, it was not absolutely necessary to implead the tenant as a party in all cases.

The proposed amendment seeks to clarify this shift in the legal position through an amendment. 

We will discuss the remaining amendments in the next few posts on the topic.