Where an instrument is evidence of different rights or different obligations, the court may, in a proper case, cancel it in part and allow it to stand for the residue. This provision is provided in the Specific Relief Act under

Option (1) is incorrect: Section 21 of Specific Relief Act provides power to award compensation in certain cases. Option (2) is correct: Section 32 of the Act states that where an instrument is evidence of different rights or different obligations, the court may, in a proper case, cancel it in part and allow it to stand for the residue. Option (3) is incorrect: Section 40 of the Act states about injunction to perform negative agreement. Option (4) is incorrect: Section 40 of the Act states provision for damages in lieu of, or in addition to injunction.