Specific Performance: Before versus After the 2018 Amendment

The single most examinable point in this subject is what the 2018 Amendment changed. Before it, specific performance was an exceptional, discretionary remedy, granted only where damages would not do and even then in the court's discretion. After it, specific performance is the general rule that the court shall enforce, subject only to a few statutory bars. This note sets out the old law and the new each in its own right, compares them, works through an example, and closes with the question of which law governs a given contract.

Figure: Specific performance before and after 2018 compared, from its character to which contracts each law governs

1. The Old Law in Its Own Right

Under the Act as it stood before 1 October 2018, specific performance was the exception, not the rule. The old Section 10 allowed it in only two cases: where there was no standard for ascertaining the actual damage caused by non-performance, or where money would not afford adequate relief. An explanation presumed that damages were not adequate for a contract to transfer immovable property, but were adequate for movables. Even where a case fell within Section 10, relief remained discretionary under the old Section 20; the court could refuse it on equitable grounds, for example hardship or the conduct of the plaintiff. The gateway question was always whether damages would be an adequate remedy.

2. The New Law in Its Own Right

The 2018 Amendment substituted Section 10 and recast Section 20. The new Section 10 provides that specific performance shall be enforced by the court, subject to the provisions of Sections 11(2), 14 and 16. The adequacy-of-damages test is gone, and with it the property presumption. The old wide discretion under Section 20 was repealed; Section 20 now deals with substituted performance. Specific performance has become the general rule, and damages the alternative. The plaintiff no longer has to show that money would not do; he shows a valid contract and his readiness and willingness, and the court enforces unless a statutory bar applies.

3. The Old Law and the New Compared

4. The Shift in One Line

5. A Worked Example

Take two identical contracts to sell a commercial shop, one made in 2015 and the other in 2020, each broken by the seller. Under the 2015 contract the buyer must satisfy the court that damages would not be adequate, and even then the court may, in its discretion, refuse performance and leave him to damages. Under the 2020 contract the buyer need only prove a valid contract and his continuous readiness and willingness; the court shall order the sale unless the contract falls within Section 14 or a personal bar under Section 16 applies. Same facts, different law, because the two contracts fall on opposite sides of the amendment's commencement.

6. Which Law Governs a Given Contract

A caution to verify: this decision was carried to a review, and the point has been litigated since. The exact present position, including the outcome of any review, should be checked against the latest Supreme Court ruling before the note is relied on. The safe general statement, and the one an examiner will expect, is that the amendment is treated as prospective, so the date of the contract decides which law applies.

7. Frequently Asked Questions

Q. What is the main change the 2018 Amendment made?
A. It made specific performance the general rule the court shall enforce, subject to Sections 11(2), 14 and 16, instead of a discretionary remedy limited to cases where damages were inadequate.

Q. Is the adequacy of damages still the test?
A. No. For contracts on or after 1 October 2018 the adequacy of damages is no longer the gateway; the old two-case rule and the property presumption were removed.

Q. Does the amendment apply to older contracts?
A. In Katta Sujatha Reddy v Siddamsetty Infra Projects the Supreme Court held it applies prospectively, so pre-2018 contracts remain under the old law. The point went to review, so the latest ruling should be verified.

Q. What new remedies did the amendment add?
A. Substituted performance under Section 20, the power to engage experts under Section 14A, and the infrastructure regime under Sections 20A to 20C.