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The Amendment For Infrastructure Projects In Specific Relief Act

The Specific Relief Act was originally introduced and enacted in the year 1877 while India was under the British, which was replaced in the year 1963. The Specific Relief Act, 1963 is an Act of the Parliament of India, that provides for remedies to such0 persons whose contractual rights have been violated by breach or non-performance.

Performance of a contract can be of 2 kinds, either primary performance or secondary performance. In a contract, each party has to perform its promise. Specific or primary performance means performing the respective duties of the parties to the contract. When a breach is made by a party to the contract then the court may direct the party in breach to perform his respective duty as promised in the contract. This is known as the Specific or Primary performance of the contract.

Further, Secondary performance means asking the party who has made a breach of contract to give compensation to the other party. Generally, relief of secondary performance is granted by the court when specific performance is not possible.

In crux, the purpose of the Specific Relief Act is to get the contracts specifically enforced or provide some other sort of specific relief when monetary compensation is not adequate or the actual damage caused due to the breach of obligation cannot be evaluated in monetary terms.

The Amendment And Section 20

The amendment of 2018 bought significant changes in various sections including section 10, section14, and section 20, along with introducing whole new schedules under section 20, which talks about special provisions for the performance of infrastructure projects.

Section 14[1] provides exceptions to the specific performance of contracts, i.e., it provides those conditions and situations where the contracts are not specifically enforceable, and the very first sub-section talks about those contracts for which substituted performance has been opted for. This substituted performance has been discussed in detail in section 20, which was bought in light by the new amendment of 2018. The earlier title of Section 20 was "discretion of the Court to grant specific performance".

Section 20 of the Specific Relief Act, 2018[2] can be elaborated as follows:

Sub-section 1 of this section provides that where the contract is broken due to non-performance of promise by any party, the affected party shall have the option of substituted performance through a third party or by his agency. Also, such an affected party shall have the option to recover the expenses and other costs incurred, spent, or suffered by him, from the party committing such breach.

Illustration: A agrees to sell his mansion built at a particular location to B, A fails to sell the house to B and after impending delay, B buys a similar mansion in the same locality from C, Thus, B has got substituted performance of the contract he had with A.

Sub-section 2 of this act says that the affected party cannot undertake substituted performance of contract unless he gives a notice in writing to the wrongdoer party who has made a breach of contract. The affected party must give a minimum of 30 days' notice to the party in breach mentioning the time by which the party in breach should perform his promise. Hence, after the breach, the party in breach is again given a chance to perform within the time mentioned in the notice and when the party still fails to perform then the affected party can undertake a substituted performance. Therefore, where the affected party undertakes the substituted performance without giving notice to the party in breach, then he cannot claim expenses and other costs incurred, spent, or suffered by him, from the wrongdoer.

Sub-section 3 specifies that where the party suffering breach of contract has got the contract performed through a third party or by his agency after giving notice he shall not be entitled to claim relief of specific performance against the party in breach.

The very last sub-section talks about the situation where the aggrieved party, who has obtained specific performance, can claim compensation and other damages that were caused as a result of getting that substituted performance from the party in breach. But the essential condition provided for this claim is that the party must have given a minimum of 30 days' notice to the party in breach before getting the substituted performance. Also, the damages can be claimed only after the contract has been performed by the substituted party, and hence not before the actual performance.

What is worth noting is the immunity provided to the specified infrastructural projects by the new amendment of 2018, which has been bought into light through Sections 20-A, 20-B, and 20-C of the Specific Relief Act, 2018.

New Schedules For Infrastructure Projects

According to Dr. V. K. R. V. Rao, "The link between infrastructure and development is not a once for all affair. It is a continuous process and progress in development has to be preceded, accompanied, and followed by progress in infrastructure; if we are to fulfill our declared objectives of a self-accelerating process of economic development".[3]

Infrastructure has a significant role in the growth and development of a nation whether it be economic, social, or cultural. Infrastructure helps in the development of overall production and the GDP contribution of the nation. Hence, an obstruction in the development of infrastructure would yield negative consequences for the whole nation, leading to stagnancy in the economy and the downfall of the nation's position in the global market.

For such reasons, the amendment bought in section 20 prevents injunctions bought against the infrastructural projects mentioned in Schedule A of Section 20[4], as such injunctions would cause an impediment to the completion and further progress of such infrastructure projects.

This schedule mentions 5 categories of infrastructure projects, with various projects under it, a few have been mentioned as follows:
  1. Transportation

    • Road and Bridges
    • Ports
    • Shipyards
    • Airports
    • Railway tracks, tunnels, bridges, stations
    • Inland Waterways

  2. Water And Sanitation

    • Solid Waste Management
    • Water Supply Pipelines
    • Water Treatment Plants
    • Sewage collection, treatment, and disposal

  3. Energy

    • Electricity generation
    • Electricity transmission
    • Electricity distribution
    • Oil Pipelines
    • Gas Pipelines
       
  4. Communication

    • Telecommunication
    • Telecommunication Towers
    • Telecom Services
       
  5. Social And Commercial Infrastructure

    • Education Institutions
    • Sports Infrastructure
    • Hospitals
    • Tourism Infrastructures
    • Terminal Markets
    • Special Economic Zones

Illustration:
The Government of India has entered into a contract relating to road construction, as included under this schedule, with a company say "X". Work is started by the X company and subsequently, the Government opted for a substituted performance and gave that contract to another, say "Y" company. An injunction suit is filed by X company. No injunction shall be granted by the Court where the Court is satisfied that granting an injunction would cause impediment or delay in the progress or completion of such infrastructure project.

Schedule A of this section also provides for the provision of amendment in the categories or projects under it relating to infrastructural development by the Central Government, as it is done through a notification in the Official Gazette

However, every notification issued under this Act by the Central Government shall be laid, as soon as may be after it is issued, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions.

Both Houses may agree to any modification in the notification or may agree that the notification should not be made. Accordingly, the notification shall affect only in a modified form or be of no effect. However, any such modification or annulment shall not affect the validity of anything previously done under that notification.

Schedule B of Section 20[5] provides for Special Courts as they are conferred with the power to decide upon the cases bought in for such substituted performance against the government. This schedule provided that the State Government in consultation with the Chief Justice of the High Court of that state shall designate one or more Civil Courts of that state with the status of Special Courts, as notified through the Official Gazette. These Special Courts shall deal with the cases related to substituted performance and injunctions regarding such infrastructural projects as per the Specific Relief Act (amended), 2018.

Sub-section C of Section 20[6] provided for the limitation period for disposal of such cases filed under this section as dealt with by the Special Courts. The suit filed under this section shall be disposed-off within 12 months of the date on which summons have been provided to the defendant. But, this limitation period can be extended for a maximum of 6 months in aggregate after stating in writing a valid reason for this extension by the court.

Conclusion
These were the amendments bought in Section 20, which gave special immunity to the infrastructure projects that are stated in the Official Gazette against the injunctions in case they opt for getting substituted performance to prevent any delay in the development of such infrastructural projects.

This amendment is often criticized for causing a lack of security to those who have taken up the contracts of infrastructural development as offered by the Government. But actually, this amendment has proved to be of great importance as the contractors attempt to perform their part of the contract speedily to prevent them from being substituted by some other party.

End-Notes:
  1. Specific Relief Amendment Act,2018 s14.
  2. Specific Relief Amendment Act, 2018 s20.
  3. Samia Rekhi, 'Infrastructure Development in India' (Economics Discussion) <https://www.economicsdiscussion.net/india/infrastructure-development-in-india/20948> accessed on 15 July, 2022.
  4. The Specific Relief Amendment Act, 2018, s20A.
  5. The Specific Relief Amendment Act, 2018, s20B.
  6. The Specific Relief Amendment Act, 2018, s20C.

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