Question

A contracts with B to construct a cold storage facility for ₹ 50 lakh within 6 months. After the expiry of the time period, B fails to perform the contract. A immediately hires C to complete the construction at ₹ 60 lakh and later files a suit against B claiming ₹ 10 lakh as the additional cost incurred. Which of the following statements is correct under the Specific Relief Act, 1963?

• A. A must sue only for damages and not substituted performance.
• B. A cannot recover the cost because A did not give B prior notice.
• C. A can recover ₹ 10 lakh because B breached the contract.
• D. A can recover only if the court first declares B guilty of breach.

Hint:

Section 20 is the "Substituted Performance" section. The magic number is "30 days"—you MUST give the defaulter 30 days' notice before hiring someone else if you want to recover the extra cost!

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The Specific Relief Act, 1963 (amended in 2018), introduced the concept of "substituted performance" under Section 20.

Step 2: Detailed Explanation:
- Section 20(2) of the Act mandates that if a party seeks substituted performance (hiring a third party like 'C' to do the work), they must first provide a written notice to the party in default (B) requiring them to perform within a period of not less than 30 days.
- If the party (A) fails to provide this prior notice, they lose the statutory right to recover the additional costs incurred from the defaulting party (B).

Step 3: Final Answer:
Since 'A' did not give the mandatory notice required by the Act, 'A' cannot recover the additional ₹ 10 lakh. Option (B) is correct.