AI Overview...
Specific Performance of Contract in Loss-Making Commercial Projects
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Commercial Unviability and Write-offs - Projects may become commercially unviable, leading management to write off losses instead of pursuing specific performance. For instance, certain projects, such as those in Assam, were deemed unviable and were written off as losses (Source: SAB INDUSTRIES LIMITED VS CHIEF EXECUTIVE OFFICER, CGEWHO - Delhi).
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Disputes and Arbitration Proceedings - When disputes arise, parties often resort to arbitration or legal proceedings. In some cases, arbitration resulted in awards denying damages or specific performance, especially when contractual obligations are disputed or deemed unenforceable (Sources: INDURE PRIVATE LIMITED VS HEIDELBERG CEMENT LIMITED - Delhi, G. + H Schallschutz Gmbh VS Bharat Heavy Electricals Ltd. - Delhi, Rites Ltd. VS Subrata Kumar Ghose - Delhi).
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Legal Framework and Principles - Under the Specific Relief Act, 1963, specific performance is generally considered the primary remedy for breach of contract, especially in infrastructure projects where damages may be inadequate. However, courts tend to deny specific performance if the contract is deemed determinable, or if the performance involves complex, minute details that are difficult to enforce (Sources: DEVIKA SHARMA & ORS. vs NIRA INFRASTRUCTURES ENGINEERS PVT. LTD. & ORS. - Delhi, N. G. Projects Limited VS Vinod Kumar Jain - Supreme Court, B. E. Billimoria & Company Limited VS Mahindra Bebanco Developers Ltd. - Bombay).
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Performance Conditions and Contract Nature - The enforceability of specific performance depends on the contract's terms and the nature of the obligation. For example, contracts dependent on specific goods or services, such as delivery of goods or infrastructure work, may be more amenable to specific performance unless the contract is frustrated or deemed impossible to perform (Sources: G. + H Schallschutz Gmbh VS Bharat Heavy Electricals Ltd. - Delhi, Food Corporation of India, rep. By its Senior Regional Manager, Hyderabad VS Karri Nagi Reddy - Andhra Pradesh).
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Frustration and Non-availability of Resources - Situations where performance is hindered due to unforeseen circumstances, such as non-availability of wagons or resources, can lead to the contract being frustrated, thereby denying specific performance (Source: Food Corporation of India, rep. By its Senior Regional Manager, Hyderabad VS Karri Nagi Reddy - Andhra Pradesh).
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Remedies and Damages - When specific performance is denied, damages are often awarded as an alternative remedy. However, courts evaluate whether damages are adequate and whether the breach was remote or foreseeable (Sources: KANCHAN UDYOG LIMITED VS UNITED SPIRITS LIMITED - Supreme Court, INDURE PRIVATE LIMITED VS HEIDELBERG CEMENT LIMITED - Delhi).
Analysis and Conclusion
In loss-making commercial projects, courts are generally reluctant to grant specific performance if the project is deemed commercially unviable, the contract is determinable, or performance involves complex, detailed obligations. Arbitration awards frequently deny damages or specific performance when contractual disputes involve legality, feasibility, or resource constraints. The overarching legal principle favors damages over specific performance when the latter is impractical or when the project has become commercially unviable, aligning with the provisions of the Specific Relief Act, 1963, and relevant arbitration laws.
References: - SAB INDUSTRIES LIMITED VS CHIEF EXECUTIVE OFFICER, CGEWHO - Delhi - INDURE PRIVATE LIMITED VS HEIDELBERG CEMENT LIMITED - Delhi - G. + H Schallschutz Gmbh VS Bharat Heavy Electricals Ltd. - Delhi - DEVIKA SHARMA & ORS. vs NIRA INFRASTRUCTURES ENGINEERS PVT. LTD. & ORS. - Delhi - N. G. Projects Limited VS Vinod Kumar Jain - Supreme Court - B. E. Billimoria & Company Limited VS Mahindra Bebanco Developers Ltd. - Bombay - Rites Ltd. VS Subrata Kumar Ghose - Delhi - Food Corporation of India, rep. By its Senior Regional Manager, Hyderabad VS Karri Nagi Reddy - Andhra Pradesh - KANCHAN UDYOG LIMITED VS UNITED SPIRITS LIMITED - Supreme Court
Search Results for "In Loss Making Commercial Project Specific Performance of Contract is Denied"
1997 0 Supreme(Del) 330 • India - Delhi
C.M.NAYAR
No specific instances in this regard have been pointed out. ... However, in the opinion of the management these projects have become commercially unviable. Therefore the same has been written off as commercial loss and charged to the Profit and Loss Account. ... Similarly, it was not denied by the petitioner company that in respect of the Assam project they had to resort to arbitration proceedings as disputes and differences arose between the parties. ... may be enter....
2017 0 Supreme(Del) 1612 • India - Delhi
DEEPA SHARMA
Civil Procedure Code, 1908 - Order 39 Rule 1, 2, 4 - Bank guarantee - Invocation of - Injunction, denied - ... Civil Procedure Code, 1908 - Order 39 Rule 1, 2 - Contract - Termination - Bank guarantee - Invocation of ... Plaintiff and the defendant had executed a Letter of Intent - An agreement was entered - Termination of the contract ... course of the contract as also to secure performance of the work entrusted under the contract. ... the advance payment bond and for perf....
2020 0 Supreme(Del) 76 • India - Delhi
SANJEEV NARULA
ARBITRATION - INTERNATIONAL COMMERCIAL ARBITRATION - GROUNDS FOR SETTING ASIDE AWARD - PATENT ILLEGALITY - SCOPE OF INTERFERENCE ... In the Final Award, the AT denied Petitioner's damages claim, awarded storage costs, and interest. ... 44 - APPLICABILITY - SELLER'S OBLIGATION TO DELIVER GOODS - BUYER'S OBLIGATION TO ACCEPT AND PAY FOR GOODS - INTERPRETATION OF CONTRACT ... In this case, Claimant argues that the Parties made specific provision for performance in an alternative fashion. Accordingly, the #....
2025 Supreme(Online)(Del) 7667 • India - IN THE HIGH COURT OF DELHI AT NEW DELHI
ANIL KSHETARPAL, HARISH VAIDYANATHAN SHANKAR, JJ
performance, thus relief was denied. ... for possession - The collaboration agreement between parties is deemed determinable, affecting the enforceability of specific performance ... ... ... Issues: The main issues included wrongful possession and the nature of the collaboration agreement concerning specific performance ... At the very outset, it is observed that as per the Specific Relief Act, 1963 [hereinafter referred to as ‘SRA 1963’], specific....
2017 0 Supreme(AP) 467 • India - Andhra Pradesh
RAMESH RANGANATHAN, T.RAJANI
Arbitration and Conciliation Act, 1996 – Section 37 – Commercial Courts, Commercial Division and Commercial ... Appellate Division of High Courts Act, 2015 – Section 13 –Appellant filed four C.O.Ps. under Section 9 of the 1996 Act requesting the Commercial ... grant an injunction restraining the 1st respondent, its agents, servants, or any other persons claiming through or under it, from taking ... However, this claim is denied by CMRL by stating that the applicant cannot expect CMRL t....
2022 4 Supreme 177 • India - Supreme Court
HEMANT GUPTA, V. RAMASUBRAMANIAN
(Paras 10, 13, 16 and 17) (B) Constitution of India – Article 226 – Specific Relief Act, 1963 – Section 41 ... – Since construction of road is an infrastructure project and keeping in view intent of legislature that infrastructure projects ... primarily upon authority inviting bids – Such authority is aware of expectations from tenderers while evaluating consequences of non-performance ... , to specific performance being the rule and damages being the alternate remedy. ... scheme of th....
2007 0 Supreme(AP) 564 • India - Andhra Pradesh
G.V.SEETHAPATHY
contract or might have extended the time of performance. ... of the contract - Non-availability of wagons was not contemplated by the parties when the contract was made. ... of the contract under Ex.A.1 is defeated and the contract remained frustrated for no fault of the defendant. ... ... When persons enter into a contract the performance of which is dependent on the continued availability of a specific thing and by reason of circ....
2017 5 Supreme 165 • India - Supreme Court
RANJAN GOGOI, NAVIN SINHA
62 – Respondent originally supplying concentrates to appellant under Bottlers’ agreement – Changing supply arrangement and making ... (a) Indian Contract Act, 1872 – Section 62 – Award of damages – Claim made on the basis ... (Para 13, 16, 24) ... (b) Indian Contract Act, ... The loss may include expenses incurred in preparation by the innocent party’s own performance, expenses incurred after the breach or even pre-contract expenditure but subject to remoteness. ... The appellant had....
2017 0 Supreme(Bom) 569 • India - Bombay
R.D.DHANUKA
Arbitration & Conciliation Act, 1996 - Section 9 - Petitioner seeks an injunction against the respondent no.1 from taking any steps ... enforce specific performance of its material terms. ... He submits that since the compensation in terms of money is an adequate relief in this case and since the performance of the contract runs into Minute or numerous details, specific performance cannot be granted by the arbitrator. ... Under Section 14(1)(a) of the Specif....
2019 0 Supreme(Del) 452 • India - Delhi
SANJEEV NARULA
of contract terms. ... Arbitration - Engineering Consultancy Company - Arbitration and Conciliation Act, 1996, Commercial Courts Act, 2015 - Section ... Issues: Challenge to findings on specific claims, preliminary objections regarding arbitration process, and interpretation ... The present Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act” in short) read with Section 10 (2) of The Commercial Courts, Commercial Division and Commercial Appellate Division....
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