specific performance in personal service contractsspecific performance in personal service contracts

In the context of Pakistani law, it is well-established that courts generally avoid awarding specific performance in personal services contracts. The Specific Relief Act of 1877 stands as a cornerstone of civil and contractual law in Pakistan, delineating the circumstances under which specific performance of a contract can be compelled by the courts. Section 21 of the Act is particularly pivotal as it outlines the types of contracts that are exempt from the remedy of specific performance. Among these, contracts for personal services, as specified under clause (b) of Section 21, have been a subject of considerable judicial scrutiny and interpretation. The jurisprudence developed through various High Court and Supreme Court decisions provides nuanced insights into the legal treatment of personal service contracts within the Pakistani legal framework.

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This body of case law clarifies the legal stance on the enforceability of personal service contracts and the appropriateness of specific performance as a remedy. The judicial approach has been to carefully balance the equitable principles that underlie the Specific Relief Act with the practical realities of contractual relationships that are personal and dependent on the will and qualification of the individuals involved. The introduction of this legal analysis aims to synthesize the principles enshrined in the Act with the interpretations provided by the courts, offering a coherent understanding of the enforceability of personal service contracts in Pakistan. Through a thorough review of pertinent case law, this analysis will elucidate the prevailing legal doctrine that shapes the remedies available for breaches of such contracts, with a particular focus on the application of Section 21(b) of the Specific Relief Act 1877.

The relevant parts of Section 21 of the  Specific Relief Act 1877 which can relate to a contract for personal services are reproduced below: 

  1. Contracts not specifically enforceable.–The following contracts cannot be specifically enforced:-

      (a)  a contract for the non-performance of which compensation in money is an adequate relief;

      (b)  a contract which runs into such minute or numerous details, or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the Court cannot enforce specific performance of its material terms;

      (c)  a contract the terms of which the Court cannot find with reasonable certainty;

      (d) a contract which is in its nature revocable;

      (e)  a contract made by trustees either in excess of their powers or in breach of their trust;……..

      (g)  a contract the performance of which involves the performance of a continuous duty extending over a longer period than three years from its date;

The reluctance of courts to grant specific performance in personal services contracts reflects a respect for the individual’s free will. Courts may be hesitant to compel someone to perform a personal service through an order of specific performance, which is why they often prefer awarding monetary damages instead.

On the other hand, in civil law legal systems (unlike the common law system of Pakistan, which is similar to the UK), specific performance is a more favored remedy, and damages are considered a sub-optimal option. In such systems, courts assess whether specific performance is the most desirable solution and if damages would be a more effective and preferred outcome.

A review of case law in Pakistan

The specific performance of contracts for personal services under Section 21(b) of the Specific Relief Act 1877 has been judicially considered and interpreted in various cases, which are pivotal for understanding the principles that govern such matters. The essence of the rulings is that contracts for personal services are generally not specifically enforceable due to the inherent nature of personal services and the impracticability of compelling an unwilling party to honour such a contract.

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In the case of GAJADHAR ANAND v. MUSLIM COMMERCIAL BANK LIMITED (2022 CLC 1797), the Karachi High Court underscored the principle that a master cannot be compelled to accept the services of an employee they are unwilling to employ. The judgment clarifies that where specific performance of a contract of service is barred by law, the only remedy available to the aggrieved party is to seek damages. The court declined to grant an interim injunction for the reinstatement of the plaintiff, emphasizing that damages are the suitable remedy for breach of a contract of personal service.

Similarly, in SANJAY KUMAR v. SIEMENS PAKISTAN ENGINEERING COMPANY LTD. (2020 PLC(CS) 80), the court reasserted that contracts for personal services are not specifically enforceable, and in instances where specific performance is not possible, the aggrieved party is entitled only to damages.

The Peshawar High Court in Lieutenant Colonel SAEED AHMAD AWAN (Retired) v. FAUJI FOUNDATION TRUST (2019 YLR 305) held that contracts for personal services, particularly in cases where the employment is contractual in nature and not governed by statutory rules, cannot be enforced. The court stated that in such scenarios, the plaintiff can only claim damages upon the breach of such a contract.

Furthermore, the Karachi High Court in several cases, including those involving SAADULLAH KHAN v. AL BARAKA BANK (PAKISTAN) LIMITED (2019 PLC(CS) 940) and SHAKEEL AHMED SHAIKH v. AGA KHAN UNIVERSITY (2017 PLC(CS) 1080), has consistently held that contracts for personal services are not specifically enforceable under Section 21(b) of the Specific Relief Act. The judgments elucidate that an employer, particularly in the private sector, is not obliged to continue employment against their will, and an aggrieved employee is confined to seeking damages rather than reinstatement.

The principle that a contract for personal services cannot be specifically enforced is further supported by the cases of LIPS RECORDS (PRIVATE) LTD. v. MS. HADIQA MAHMOOD KIANI (2002 PLD 141) and Syed ALI IMAM RIZVI v. ALL PAKISTAN TEXTILE MILLS ASSOCIATION (2002 YLR 3946), where the court refused to grant interim injunctions based on the nature of personal services and the adequacy of monetary compensation.

The Supreme Court in OBAID ULLAH v. HABIBULLAH (1997 PLD 835) ruled that in the absence of any constitutional or statutory guarantee of employment continuity, a contract of employment is revocable under Section 21(d) and not specifically enforceable when the terms of employment are not clear, or the employment contract is beyond the employer’s authority.

In the case of YAR MUHAMMAD v. ANJUMAN-E-ISLAMIA (1987 SCMR 1776), the Supreme Court of Pakistan dealt with a case concerning the dismissal of an employee from an educational institution. The contention was that the educational code applicable had the effect of statutory rules, and thus, the suit challenging wrongful dismissal was maintainable. The Supreme Court highlighted that even if certain codes are applicable, a contract of personal service generally cannot be specifically enforced, which means an employee cannot compel the employer to reinstate them through a court decree if the relationship is of a personal nature.

The QUETTA-HIGH-COURT-BALOCHISTAN, in an unnamed case (1986 PLC 909), reinforced this principle by stating that the jural relationship between employer and employee is that of master and servant, and such contracts of personal service cannot be enforced by legal action. The enforceability of a legal right requires recognition by the legal system, and a suit filed by a terminated employee of a privately managed school would not be maintainable under Sections 21(b) and 42 of the Specific Relief Act.

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MUHAMMAD AFZAL v. HOUSE BUILDING FINANCE CORPORATION KARACHI (1976 PLD 1121) further underlines the principle that a contract for personal service, which the court cannot supervise in terms of its execution, cannot be specifically performed. The personal nature of the service and the impracticality of judicial oversight make specific performance an unsuitable remedy.

Interestingly, the case of NASIRA SULTANA v. H. B. L. (1975 PLD 608) deviates from the context of employment and addresses the specific performance of a contract for the sale of land. In this instance, specific performance was deemed an appropriate remedy where the vendor had received full payment and provided documents and an irrevocable power of attorney to enable the transfer of the plot.

Lastly, KASSAMALI v. MST. SHAKRA BEGUM (1968 PLD 307) deals with a contract of sale of a plot of land where the vendor was a bare licensee. Here, the specific performance was refused because the license to the land was inherently revocable and enforcement would depend on the violation of third-party rights.

Key Takeaways 

(1) The overarching takeaway from these cases is that contracts of personal service are inherently bound to the individuals involved and their personal qualifications or volition. The court’s ability to enforce such contracts is limited, and it is generally impractical for courts to compel parties to perform such personal services against their will. The legal system prefers the remedy of damages in such cases, acknowledging the subjective nature of personal services and the difficulties in enforcing specific performance. Contracts for personal service fall under the ambit of Section 21(b) of the Specific Relief Act, where the remedy of specific performance is not granted due to the impossibility or impracticality of enforcement, or because compensation in money is deemed an adequate relief.

(2) The other takeaways from these rulings are that contracts for personal services are intricately linked to the individuals involved and cannot be enforced by the courts where the relationship is of a personal nature or involves the willingness or personal qualifications of the parties. The consistent thread in these judgments is the preference for damages as a remedy over specific performance, acknowledging the practical difficulties and the often subjective nature of personal service contracts. This reflects a judicial recognition of the complexities involved in personal service contracts and respects the autonomy of the parties in employment relationships, particularly within the private sector.

These cases collectively affirm that the courts are inclined to uphold the legislative intent behind Section 21(b) of the Specific Relief Act, which is to avoid the impracticality and potential injustice of forcing personal services upon an unwilling party. The remedy of damages is thus seen as an adequate and practical solution to breaches of such contracts.

Conclusions

The jurisprudence emanating from the decisions of various High Courts and the Supreme Court of Pakistan, with regard to Section 21(b) of the Specific Relief Act 1877, establishes a clear and consistent legal principle regarding the non-enforceability of contracts for personal services. These cases collectively assert that the courts are reluctant to decree specific performance in matters where the services are of a personal nature due to the intrinsic difficulties associated with enforcing such contracts.

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The crux of these rulings is that personal service contracts are founded upon, and intricately linked to, the personal qualifications, volition, and trust between the employer (master) and employee (servant). It is understood that enforcing specific performance in such contexts would not only be challenging but also contrary to the nature of voluntary service provision.

The judgments articulate that when an employment relationship is terminated, the appropriate legal recourse for the aggrieved party is not to seek reinstatement through specific performance but rather to pursue compensation for damages. This legal stance underscores the principle that monetary compensation is generally an adequate relief for the breach of a personal service contract. The courts have consistently dismissed suits seeking the enforcement of personal service contracts, reinforcing the master’s right to terminate the contract and refusing to compel a master to accept the services of an unwilling servant.

Moreover, the courts have determined that specific performance cannot be granted where the execution of the contract cannot be effectively supervised by the courts or where the contract is by its nature revocable. This principle is evident not only in cases involving employment contracts but also in contracts concerning other personal services, such as those in the arts and entertainment sectors.

Section 21 of the Specific Relief Act of 1877, outlines the types of contracts that are not specifically enforceable by law, particularly those relating to personal services. The sub-section (b) is of particular interest as it deals with contracts that are heavily reliant on personal qualifications or volition, or are so detailed that the enforcement of their material terms is impractical.

The crux of these cases underlines the impracticality of the court’s direct involvement in ensuring the execution of contracts that are deeply personal or where the outcome is contingent on the individual’s unique skills or will. This is because the court’s supervision would either be too burdensome or the enforcement would result in a service qualitatively different from what was contracted for, due to the personal element involved.

The takeaway is that while contracts for personal services can be legally binding, the specific performance of such contracts is not favored under Section 21(b) of the Specific Relief Act because of the subjective nature of personal skills and discretion. The courts are more likely to award damages for non-performance rather than compel parties to act against their will or enforce a standard of personal performance that is not measurable or supervisable. This reflects a broader principle in contract law that the courts do not serve as overseers of performance quality in matters requiring subjective personal skill or judgement.

In conclusion, the legal position in Pakistan, as delineated by the aforementioned cases, is that the specific performance of personal service contracts is generally not a viable remedy under Section 21(b) of the Specific Relief Act 1877. The preferred remedy in instances of breach of such contracts is the award of damages, which is considered an adequate and practicable form of relief. This conclusion maintains the autonomy of the contracting parties and upholds the principle that personal service contracts are underpinned by personal choice and mutual consent, which cannot be effectively mandated by the courts.

By The Josh and Mak Team

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