Specific Performance After 2018: the Rule, Not the Discretion

And it did not happen only in section 10. Section 4 of the amending Act made the identical change in section 11(1), where "contract may, in the discretion of the court" became "contract shall". The footnote to section 11 in the bare Act records it.

What "shall" means, and what remains

Specific performance is now the rule. But it is not unconditional, and the section names its own three limits. Those limits are the whole of the modern law and each has a chapter here.

So the modern structure of an answer is: the court shall enforce, unless the case falls within section 11(2), section 14, or section 16.

What has gone. The requirement that the plaintiff show damages to be inadequate. It is no longer a condition, and the old presumptions about when damages are inadequate went with the old section 10. Inadequacy of damages may still be relevant to whether a court grants an injunction under section 38, but it is not a gateway to specific performance.

Why Parliament made the change

Two reasons, and they are worth a sentence each in an answer.

Ease of doing business. The Committee whose report led to the amendment was concerned that contracts in India were, in practice, breakable on payment of damages, and that this made India an unattractive place to contract. Making performance the norm strengthens the bargain.

Infrastructure. The same amendment inserted sections 20A, 20B and 20C and section 41(ha), restricting injunctions against infrastructure projects and providing for special courts and disposal within twelve months. The theme is the same: contracts, especially large project contracts, should be performed and not litigated over. See [Infrastructure Projects, Special Courts and Expeditious Disposal].

Does the amendment apply to contracts made before 1 October 2018?

This is the question the topic cannot avoid, and it must be answered carefully, because the case everything cites no longer exists.

M/s Siddamsetty Infra Projects Pvt. Ltd. v. Katta Sujatha Reddy, Review Petition (C) No. 1565 of 2022 in Civil Appeal No. 5822 of 2022, Supreme Court, decided 8 November 2024.

Facts. Review petitions were brought against the Supreme Court's own judgment of 25 August 2022 in Katta Sujatha Reddy v. Siddamsetty Infra Projects, a suit for specific performance of agreements to sell land. The 2022 judgment had held that section 10 is substantive and not procedural, so that the 2018 amendment does not apply retrospectively to pending proceedings; that under the unamended section the discretion should not be exercised in the purchaser's favour; and that the suit was in any event barred by limitation.

Held. Per Dr D.Y. Chandrachud CJI, J.B. Pardiwala and Manoj Misra JJ, errors apparent on the face of the record went to the root of the reasoning on both limitation and specific performance. The Court did not reopen the finding that the pre amendment section 10 governed a suit instituted before the amendment; it proceeded on that footing and held that, on it, the Court had committed a grave error in analysing whether the discretion ought to be exercised. The judgment of 25 August 2022 was RECALLED, the High Court's judgment of 23 April 2021 was restored, and the review petitions were allowed.

Why it matters here. Everything written between 2022 and 2024 cites the 2022 judgment as the authority that the 2018 amendment is prospective. That judgment no longer exists. A student who cites Katta Sujatha Reddy (2022) is citing a recalled decision.

State the position with precision, because the distinction is easy to get wrong. The review Court did not decide the prospectivity question the other way. It proceeded on the footing that the unamended section applied and found the error elsewhere. So what the recall does is remove the judgment that was being cited as deciding the point, leaving the question without the settled Supreme Court answer it was thought to have.

The safe answer in an exam. Say that the amendment came into force on 1 October 2018; that the prevailing view has been that the change to section 10 is substantive and therefore prospective, so that suits instituted before that date are governed by the old discretionary section; and that the Supreme Court judgment usually cited for that proposition was recalled on 8 November 2024, so the point cannot be treated as concluded by it.

A curiosity in the review judgment itself. It prints "the 2008 amendment to Section 10 of the Specific Relief Act" where it plainly means 2018. Noted so that a reader who checks the text is not thrown.

Time, and what has not changed

The removal of the discretion did not make specific performance available to a plaintiff who has slept on his rights, because the bars in section 16 remain and limitation still applies.

Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18.

Facts. A suit for specific performance of an agreement to sell immovable property in which the purchaser had failed to pay instalments of the price by the agreed dates.

Held. The Court reiterated that time is not ordinarily of the essence in a contract for the sale of immovable property, but observed that the reasoning behind the rule, which assumed that the value of immovable property is stable, no longer holds in conditions of steep and continuous escalation in prices, and that the rule needs to be revisited. A purchaser who does not perform his obligations as to payment within the time stipulated cannot expect the court to ignore the delay merely because the subject matter is land.

Why it matters here. It is the modern gloss on Chand Rani, and it supplies the answer to a plaintiff who assumes that because time is not of the essence in a land sale, delay costs him nothing. Under section 16(c) he must still prove that he has performed or has always been ready and willing.

A worked example

Vasudha agrees on 1 February 2026 to sell a specific plot to Waman for two crore rupees, completion on 1 August 2026. She refuses to convey.

• Must Waman show that damages would be inadequate? No. That was the pre 2018 requirement. Section 10 now says specific performance shall be enforced.
• What must he show? That there is a contract, and that his case is not caught by section 11(2), section 14 or section 16. Under section 16(c) he must prove that he has performed or has always been ready and willing to perform the essential terms on his part.
• Vasudha argues that the court should exercise its discretion against Waman because the price has risen sharply and the bargain is now hard on her. The discretion no longer exists in the terms she is relying on. Hardship arising from a rise in price is not one of the bars in sections 11(2), 14 or 16.
• Vasudha argues that Waman never had the money and was never ready. This is the live defence. Section 16(c) bars relief to a plaintiff who fails to prove readiness and willingness, and on Ram Awadh the obligation is on the court not to grant a decree to such a plaintiff.
• The contract had been made in 2016 and the suit filed in 2017. Then the pre amendment section 10 would ordinarily govern, on the view that the change is substantive and prospective; but the Supreme Court judgment usually cited for that proposition stands recalled, and the point should be stated as unsettled rather than as concluded.
• Waman delayed four years in paying an instalment and now sues. On Saradamani Kandappan, although time is not ordinarily of the essence in a land sale, the court will not disregard the delay, and section 16(c) requires him to prove continuous readiness and willingness.

What it does NOT mean

"Specific performance is a discretionary equitable remedy in India." Not since 1 October 2018 for the purposes of section 10.

"The plaintiff must prove that damages are inadequate." He must not. The condition and the old presumptions went with the old section 10.

"The court must grant specific performance in every case." It must, subject to sections 11(2), 14 and 16, and those three are real limits.

"Katta Sujatha Reddy settles that the amendment is prospective." That judgment was recalled on 8 November 2024.

"The recall means the amendment is retrospective." It does not. The review Court did not decide the point the other way; it removed the judgment that was thought to have decided it.

"Because time is not of the essence in a land sale, delay does not matter." Saradamani Kandappan says otherwise, and section 16(c) requires readiness and willingness to be proved.

Quick revision

• s.10 as substituted by s.3 of the Specific Relief (Amendment) Act 2018, in force 1 October 2018: specific performance "shall be enforced by the court" subject to s.11(2), s.14 and s.16.
• The old s.10 said "may, in the discretion of the court" and presumed damages inadequate for a trust and where there was no standard for ascertaining actual damage. Both are gone.
• s.11(1) was amended the same way by s.4 of the amending Act: "may, in the discretion of the court" became "shall".
• The modern structure: the court SHALL enforce, unless s.11(2), s.14 or s.16 applies.
• Inadequacy of damages is no longer a gateway to specific performance.
• Katta Sujatha Reddy (25 August 2022) was RECALLED on 8 November 2024 in M/s Siddamsetty Infra Projects Pvt. Ltd. v. Katta Sujatha Reddy, Review Petition (C) No. 1565 of 2022, decided 8 November 2024, by Chandrachud CJI, Pardiwala and Manoj Misra JJ. Do not cite the 2022 judgment.
• The recall did not decide prospectivity the other way; it removed the authority on the point.
• Saradamani Kandappan, (2011) 12 SCC 18: time is not ordinarily of the essence in a land sale, but that rule rests on an assumption of stable prices that no longer holds, and delay is not to be ignored.

Test yourself

1. State section 10 as it now stands and say what it replaced. The specific performance of a contract shall be enforced by the court subject to the provisions contained in sub-section (2) of section 11, section 14 and section 16. It replaced a section under which specific performance might, in the discretion of the court, be enforced, and which directed the court to presume that damages were inadequate where the act to be done was in performance of a trust or where there was no standard for ascertaining the actual damage. The substitution was made by section 3 of the Specific Relief (Amendment) Act 2018 with effect from 1 October 2018.

2. What must a plaintiff now show to obtain specific performance? That there is a contract, and that his case is not excluded by section 11(2), which bars enforcement of a contract made by a trustee in excess of his powers or in breach of trust; by section 14, which lists contracts that cannot be specifically enforced; or by section 16, the personal bars, under clause (c) of which he must prove that he has performed or has always been ready and willing to perform the essential terms on his part. He need not show that damages would be inadequate.

3. Why can Katta Sujatha Reddy (2022) not be cited? Because it was recalled. On 8 November 2024, in M/s Siddamsetty Infra Projects Pvt. Ltd. v. Katta Sujatha Reddy, a Bench of Chandrachud CJI, Pardiwala and Manoj Misra JJ held that errors apparent on the face of the record went to the root of the reasoning on both limitation and specific performance, recalled the judgment of 25 August 2022, restored the High Court's judgment of 23 April 2021, and allowed the review petitions.

4. Does the recall decide that the 2018 amendment is retrospective? No. The review Court did not reopen the finding that the pre amendment section 10 governed a suit instituted before the amendment; it proceeded on that footing and found a grave error in how the discretion had been analysed. The effect is to remove the judgment that had been treated as deciding the prospectivity question, leaving the point without that settled authority.

5. How does MU's own syllabus show that the amended Act is being examined? Because topic 4.2.4 is "Substituted Performance of Contract". Substituted performance did not exist before 2018: section 20 was then the section conferring the discretion, and it was replaced by the substituted performance remedy by the Specific Relief (Amendment) Act 2018. A syllabus naming that topic is necessarily built on the amended Act.