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.

Answer 2

Section 20 of the Specific Relief Act, 1963 lets a party get a contract performed through someone else and then recover the extra cost from the defaulting party, but only if certain conditions are met. The question asks whether A can recover the extra ten lakh from B, and each option needs to be checked against those conditions.

1. A must sue only for damages and not substituted performance: Section 20 does allow a party to seek recovery through substituted performance as an available remedy, so it is wrong to say A is confined only to an ordinary damages claim.
2. A cannot recover the cost because A did not give B prior notice: Section 20 requires that before getting the work done by a third party, the party seeking substituted performance must first give the defaulting party written notice, allowing at least thirty days to perform. A hired C immediately after B's default without sending any such notice, so A never satisfied this precondition.
3. A can recover ₹ 10 lakh because B breached the contract: B's breach alone is not enough to entitle A to recover the extra cost. Section 20 conditions this recovery on A having first followed the prescribed notice procedure, which did not happen here.
4. A can recover only if the court first declares B guilty of breach: Section 20 does not require any prior judicial declaration of breach as a precondition to substituted performance. The actual precondition is the written notice requirement, not a separate court declaration.

Only the missing prior notice, not the general availability of substituted performance, not B's breach on its own, and not any need for a prior court declaration, is what actually bars A's recovery here.

Therefore, the correct answer is A cannot recover the cost because A did not give B prior notice.