Section 23 of SRA : Section 23: Liquidation Of Damages Not A Bar To Specific Performance

Explanation using Example

Imagine that Raj and Priya enter into a contract where Raj agrees to sell Priya a unique vintage car for ₹5,00,000. The contract states that if Raj fails to deliver the car, he must pay Priya ₹50,000 as compensation for breach of contract. However, when the time comes, Raj changes his mind and offers to pay the ₹50,000 instead of selling the car. Priya, being a collector of vintage cars, insists that she wants the specific car as it is rare and cannot be easily found elsewhere. Priya sues for specific performance of the contract.

The court considers the uniqueness of the car and the fact that monetary compensation is insufficient for the loss of opportunity to acquire that specific car. The court decides that the sum was included in the contract as a deterrent to ensure Raj's performance, not to offer an alternative to performance. Therefore, the court orders specific performance, compelling Raj to sell the vintage car to Priya as per the contract, and does not require Raj to pay the additional ₹50,000 since it enforces the specific performance.