Radhika Mittal
On November 8, 2024, the Supreme Court of India has revisited its earlier judgment concerning the 2018 amendment to the Specific Relief Act, 1963 and determined that the amendment should apply retrospectively, allowing parties involved in contracts executed before October 1, 2018, to seek specific performance based on the new provisions.
The Specific Relief (Amendment) Act, enacted in 2018, aimed to enhance the enforceability of contracts by making specific performance a mandatory remedy under certain conditions. Prior to this amendment, Courts had considerable discretion in granting specific performance, often weighing whether monetary damages would suffice. The new provisions eliminated this discretion, emphasizing the importance of honoring contractual obligations.
Initially, in August 2022, the Supreme Court ruled that the amendment would apply only prospectively, affecting transactions entered into after its enactment. This decision was based on the understanding that the amendment created new rights and obligations that did not exist prior to October 1, 2018. However, concerns arose regarding its implications for ongoing cases and the potential injustice faced by parties whose agreements predated the amendment.
The recent review was prompted by appeals from both parties involved in Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt. Ltd. where it was argued that the amended provisions should apply retrospectively. The Court acknowledged that its previous ruling might have overlooked critical aspects of legal interpretation regarding substantive versus procedural changes.
In its latest judgment, the Supreme Court clarified that while the 2018 amendment introduced significant changes to the framework of specific performance, it also recognized that these changes should benefit all parties involved in contracts executed before its enactment. The Court emphasized that specific performance is essential for maintaining contractual integrity and protecting aggrieved parties’ rights.
The bench comprising of Chief Justice DY Chandrachud and Justices Krishna Murari and Hima Kohli noted that allowing retrospective application would not only serve justice but also align with legislative intent to uphold contractual commitments. This decision is expected to impact numerous pending cases and alter how courts approach specific performance claims moving forward.
This ruling has far-reaching implications for contract law in India. It enables parties with pre-amendment contracts to invoke the benefits of the 2018 changes, potentially leading to a surge in litigation as individuals reassess their legal positions under this new interpretation. Legal experts predict that this could result in a significant number of cases revisiting previously settled disputes.
Moreover, this decision challenges prior judgments where courts may have applied amended provisions retrospectively without clear legislative guidance. Stakeholders will need to navigate these complexities as they prepare for future legal proceedings.
The Supreme Court’s reconsideration of the 2018 amendment reflects its commitment to ensuring fairness and clarity in contractual relationships. As this legal landscape evolves, it is crucial for all parties engaged in contractual agreements to stay informed about their rights under this revised framework.
Case Name: Smt. Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt. Ltd.
Case Number: Civil Appeal No. 5822 of 2022.
Bench: Chief Justice DY Chandrachud and Justices Krishna Murari and Hima Kohli.