The Specific Relief (Amendment) Act, 2018

What it does

The Act is an amending statute. It changes the Specific Relief Act, 1963, which sets out when a court will order a person to perform a contract or to do or refrain from doing something, instead of leaving the other side to a claim for damages.

Before 2018, specific performance was a discretionary remedy. The court could refuse it even where the contract was valid and the claimant was ready to perform. The amendment turned that round. Section 10 now provides that specific performance of a contract shall be enforced, subject to the exceptions in section 14 of the Act. The court's discretion under the old section 20 was removed. The remedy is now the ordinary one, and the party resisting it has to bring itself within an exception.

The amendment also introduced a remedy of substituted performance. A party who is entitled to performance can, after notice to the defaulting party, have the work done through a third person or by its own agency and recover the cost from the defaulter. It restricted the courts' power to grant injunctions against infrastructure projects, and provided for designated special courts to try suits connected with them. And it allowed a court to engage an expert where a case requires one.

Who it binds

Parties to contracts, and the courts that hear claims on them. A buyer under a contract for the sale of land or a supply contract, a contractor, a licensor and any other party with a contractual right to performance is affected.

What has changed, and when

The Act is the 2018 change to the 1963 statute. It is not retrospective. The firm's note on corporate and commercial law records that the Supreme Court held in Katta Sujatha Reddy v. Siddamsetty Infra Projects Private Limited, decided in 2023, that the 2018 amendment is prospective, so transactions entered into before it are judged under the unamended, discretionary section 20. A dispute about an older agreement therefore has to be tried on the older law.

What turns on it in practice

The practice area on this site for civil disputes covers representation in commercial suits, shareholder disputes and civil litigation before trial, commercial and appellate courts, and the Act is part of its working law. The firm's note says the change transformed specific performance from discretionary to presumptive and, together with the expedited procedure of the Commercial Courts Act, 2015, has strengthened the enforceability of commercial contracts in India.

Two practical points follow. The first is the date of the contract, which decides whether the claimant benefits from the presumption or has to persuade the court to exercise its discretion. The second is the claimant's own position. Specific performance is not available to a party that has failed to perform its own part or is not ready and willing to do so, and the old requirement that the claimant plead and prove readiness and willingness continues to matter. A party facing a claim should look at whether the case falls within an exception in section 14, and at whether a claim for damages, or the substituted performance route, is the more suitable remedy.