Section 21 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 21 lets a plaintiff who sues for specific performance also claim compensation for the breach, in addition to performance. It tells the court to award compensation where performance is refused but a broken contract exists, or where performance alone does not satisfy the justice of the case, and it requires the claim to be made in the plaint, with amendment allowed at any stage.
This article follows the consolidated text of the Act consulted (amendments shown up to Act 18 of 2018). Later amendments should be checked before you rely on any provision.
In a suit for specific performance the plaintiff may also claim compensation for breach in addition to performance. If specific performance is refused but a contract has been broken and compensation is due, the court shall award compensation. If performance is granted but not sufficient to satisfy the justice of the case, the court shall award some compensation too. The amount is guided by section 73 of the Indian Contract Act, 1872. Compensation must be claimed in the plaint, but the court shall allow amendment at any stage on just terms.
What the 2018 Act changed in sub-section (1)
The footnote to section 21(1) reads: "Subs. by Act 18 of 2018, s. 11, for ', either in addition to, or in substitution of,' (w.e.f. 1-10-2018)." So the words "in addition to" were substituted for ", either in addition to, or in substitution of,". The earlier words were therefore "either in addition to, or in substitution of", and the 2018 Act left only "in addition to". The text consulted prints no other change to the section.
If you are the plaintiff or the defendant in a suit for performance and the question of money is open, it helps to get the claim framed correctly before the plaint is filed.
Section 21(1): the plaintiff's claim
"In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach in addition to such performance."
The plaintiff is the person who sues. He may ask the court for the contract to be performed and, "in addition", for compensation for the breach. The word "may" makes it his choice.
Section 21(2): performance refused, but a broken contract
"If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly."
Three findings lead to a mandatory award: (i) specific performance ought not to be granted; (ii) there is a contract between the parties that the defendant has broken; and (iii) the plaintiff is entitled to compensation for the breach. The words "it shall award" make the award obligatory once those findings are made.
Section 21(3): performance granted but not enough
"If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly."
Here the court grants performance but finds that performance alone does not do justice, for example because of loss suffered before performance. Then it "shall award" compensation as well.
Section 21(4): how the amount is measured
"In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in section 73 of the Indian Contract Act, 1872 (9 of 1872)." The Specific Relief Act does not set out its own method; it points to section 73 of the Contract Act. For those principles, see our post on compensation for breach of contract and remoteness of damage under section 73 of the Indian Contract Act, 1872. Where the contract names a sum payable on breach, see also the Contract Act post on liquidated damages and penalty and section 23 of this Act.
Section 21(5) and its proviso: claim it in the plaint
"No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint". So the claim must appear in the plaint.
The proviso softens the rule: "where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation." The word "shall" and the phrase "at any stage of the proceeding" make the right to amend strong, but it comes "on such terms as may be just". For how a plaint is drafted, see our guides on the structure and essential parts of a plaint and a specimen plaint format.
The Explanation
"The circumstances that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section." Even if the contract has become incapable of specific performance, the court can still award compensation under section 21. The sentence has a small grammar slip in the print ("circumstances ... does not"), which does not change its sense.
An invented example: Bhatia Logistics agreed to sell a warehouse to Mehta Foods. Mehta sued for specific performance, claimed compensation in the plaint for rent paid on temporary storage during the delay, and the court found that the warehouse had meanwhile been sold on to someone against whom performance could not be enforced. Under section 21(2) and the Explanation, the court can award compensation for the breach, guided by section 73 of the Contract Act, even though performance can no longer be ordered.
| Sub-section | Situation | Court's duty |
|---|---|---|
| 21(1) | Plaintiff sues for specific performance | Plaintiff may also claim compensation in addition to performance |
| 21(2) | Performance refused; contract broken; plaintiff entitled | "shall award" compensation |
| 21(3) | Performance granted but not sufficient for justice | "shall award" some compensation |
| 21(4) | Measure of compensation | Guided by section 73 of the Indian Contract Act, 1872 |
| 21(5) and proviso | Plaint requirement | Must be claimed in plaint; amendment allowed at any stage on just terms |
| Explanation | Contract incapable of specific performance | Does not stop the court using section 21 |
How section 21 connects with other sections
Compensation interacts with several sections. After a suit for specific performance is dismissed, section 24 bars a later suit for compensation for the breach, which is why the claim in this section matters. Section 22 on possession, partition and refund of earnest money has a similar requirement of specific claim; see section 22. If you got the contract performed through someone else under section 20, compensation remains open under section 20(4).
Practical points
Put the claim for compensation in the plaint, with the facts and figures on which it rests. If it was left out, apply to amend: the proviso says the court shall allow amendment at any stage, on just terms. Keep proof of loss, because the court is to be guided by section 73. Do not assume that if performance is refused you will recover compensation later in a separate suit: section 24 deals with that. The Act prints no limitation period for the suit; for the period, see the Limitation Act article on specific performance and compensation for breach of contract.
Need help claiming compensation alongside performance?
The plaint is where the claim for compensation must appear, and the figures matter. You can ask us about a recovery suit and have the contract, the breach and the loss reviewed before anything is filed.
Key takeaways
- A plaintiff in a suit for specific performance may also claim compensation in addition to performance.
- If performance is refused but a contract was broken and compensation is due, the court shall award it.
- If performance is granted but not sufficient to do justice, the court shall award some compensation as well.
- The court is guided by section 73 of the Indian Contract Act, 1872.
- The claim must be in the plaint, but amendment must be allowed at any stage on just terms.
- The 2018 Act substituted "in addition to" for ", either in addition to, or in substitution of,".
Read next
- Section 22 of the Specific Relief Act, 1963: possession, partition and refund of earnest money
- Section 23 of the Specific Relief Act, 1963: liquidated damages clause not a bar to specific performance
- Sections 24-25 of the Specific Relief Act, 1963: bar of later suit for compensation, and awards and wills
Disclaimer: Based on a consolidated text of the Specific Relief Act, 1963 showing amendments up to the Specific Relief (Amendment) Act, 2018 (in force from 1 October 2018), as consulted on 2 October 2026. Later amendments, notifications under the Act and the law of limitation should be checked. This article is general information, not legal advice; check the official text before acting.