(1) Where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach.
(2) No substituted performance shall be undertaken unless the party who suffers such breach has given a notice in writing of not less than thirty days to the party in breach calling upon him to perform the contract within such time as specified in the notice, and on his refusal or failure to do so, he may get the same performed by a third party or by his own agency:
Provided that the party who suffers such breach shall not be entitled to recover the expenses and costs under sub-section (1) unless he has got the contract performed through a third party or by his own agency.
(3) Where the party suffering breach of contract has got the contract performed through a third party or by his own agency after giving notice under sub-section (1), he shall not be entitled to claim relief of specific performance against the party in breach.
(4) Nothing in this section shall prevent the party who has suffered breach of contract from claiming compensation from the party in breach.
Legal Commentary & Landmark Judgments: Section 20
Section 20 of the Specific Relief Act, 1963 introduces the statutory mechanism of 'Substituted Performance of Contracts', enabling an aggrieved party to engage a third party or agency to complete contractual obligations upon default.
Sub-section (2) prescribes a mandatory statutory notice: the promisee must give a notice in writing of not less than thirty days to the party in breach, calling upon them to perform within that time; only upon their refusal or failure may substituted performance be effected. Under sub-section (3), once substituted performance is undertaken, the promisee cannot claim specific performance against the defaulting party, but retains the right to recover all costs and damages.
Section 20 is particularly vital for infrastructure, construction, and supply contracts. To recover the costs of a replacement contractor, strict adherence to the 30-day notice requirement under Section 20(2) is mandatory. Failure to issue the statutory notice before engaging a substitute defeats the claim for cost recovery under this section.