The Specific Relief (Amendment) Act

2018 : An Overview

Submitted by

Pratyush Kumar

Batch 2018-2023

Programme of Study BBA LLB

Division B

PRN 18010224207

Symbiosis Law School, NOIDA

Symbiosis International (Deemed University), Pune

In January’2019

Under the guidance of

DR. KANAN DIVETIA

ASSISTANT PROFESSOR
 C E R T IF IC AT E

The Project entitled “The Specific Relief (Amendment) Act 2018 : An

Overview” submitted to the Symbiosis Law School, NOIDA for Contracts as part
of Internal assessment is based on my original work carried out under the
guidance of DR. KANAN DIVETIA from 18 December 2018 to 22 January 2019. The
research work has not been submitted elsewhere for award of any degree.

The material borrowed from other sources and incorporated in the research report
has been duly acknowledged. We understand that we would be held responsible
and accountable for plagiarism, if any, detected later on.

Names & Signatures of the candidates

Date:
 INTRODUCTION

The Specific Relief (Amendment) Act, 2018 (Amendment Act)1 was published
in the official gazette on 1 August 2018. The Amendment Act has been introduced
with the primary intent of introducing greater certainty in enforcement of contracts
and enabling faster and easier enforcement of contracts and resolution of contractual
disputes. The Amendment Act was introduced pursuant to the recommendations of
the Expert Committee’s Report on the Specific Relief Act, 19632(SRA), which was
constituted to suggest measures to ensure that the law relating to specific relief is
made more business friendly and enhance the ease of doing business. Provisions of
the Amendment Act will come into force on such dates as may be notified by the
Central Government.

Explanation of the topic as per the statute

Mandatory enforcement of contract by specific performance: Previously, specific

performance of a contract was a remedy that courts had the discretion to grant,
only when,

(i) The actual damage caused due to the non-performance of the action
could not be ascertained;
(ii) When monetary compensation would not be adequate relief for the
non-performance of contract. However, the Amendment Act now
makes it mandatory for a court to grant specific performance of a
contract (including those relating to performance of an action agreed
to be done in performance of a trust), unless: (i) a contract was made
by a trustee in excess of his powers or in breach of trust; (ii) the
contract for which specific performance is sought, falls with the
categories of contracts specified in Section 14 of the SRA (discussed

1 The Amendment is published in the Gazette of India, Extraordinary Part II, S 1, dated August 1, 2018
2 The Act received the assent of the President on December 13 , 1963 and published in the gazette of India,
Extra.,Part II,
S. 1 , dated December 16, 1963
 below); or (iii) specific performance is to be enforced in favour of a
person who falls within the category of persons listed in Section 16 of
the SRA (discussed below). Section 21 of the SRA has further been
amended to clarify that specific relief can be sought in addition to
compensation and does not have to been in substitution of specific
performance. Even so the act does not cover all specific reliefs
conceivable.3

Contracts which cannot be specifically enforced: Section 14 of the SRA has now
been amended to state that the following categories of contracts cannot be
specifically enforced:

(i) Where an aggrieved party has obtained substituted performance of the

contract (as discussed below);
(ii) Where the contract involves performance of a continuous duty which
cannot be supervised by the court; (iii) where the contract is
dependent on personal qualifications of an individual, such that
enforcement of the material terms is not possible; and (iv) the
contract is determinable by its nature.

Persons in favour of whom specific performance cannot be enforced: Section 16 of

the SRA has been amended to provide that specific performance cannot be
enforced in favour of a person:

(i) who has obtained substituted performance of the contract (as discussed
below);

(ii) who himself (a) has become incapable of performing the contract; (b) has
violated essential terms of the contract; (c) has not performed his part of the
contract; (d) acts in fraud, wilful variance and in subversion of the contract; or

(iii) who fails to prove that he has performed or has been ready and willing to
perform the essential terms of the contract, other than those terms which were
waived / prevented by the defendant.

The Amendment Act has also amended Section 16 of the SRA to suggest that a
party seeking specific performance, only has to “prove” that such party has

3
Ashok Kumar Srivastav v National Insurance Co.Ltd(1998) 4SSC 361: AIR 1998 SC 2046
performed or has been ready and willing to perform the essential terms of the
contract and an averment to such effect in the pleadings is no longer mandatory
when seeking specific performance. Therefore, in case the courts can infer that a
party seeking relief has performed or has been ready and willing to perform the
essential terms of the contract, courts can still grant specific relief, even if the
pleadings do not contain an averment to such effect.

Substituted performance of contracts: Section 20 of the SRA now permits a party

suffering from a breach of contract, to have the contract performed by a thirdparty
or through its agent and recover the costs and expenses incurred in substituting
such performance, from the defaulting party (unless agreed otherwise under the
contract). However, before substituting such performance, the non-defaulting
party will be required to provide a 30 days’ prior notice to the defaulting party,
requiring the defaulting party to perform the contract within a specified time frame
and notifying the defaulting party that the non-defaulting party intends to have
the contract performed by substitution. In case a nondefaulting party exercises
the option of such substituted performance, then, such party can no longer seek
any specific performance of contract; although such party will still be entitled to
claim damages from the defaulting party on account of the defaulting party’s
breach of contract.

Infrastructure projects: Pursuant to the Amendment Act, courts are not

permitted to grant an injunction in respect of infrastructure projects (listed in the
schedule to the Amendment Act), if such injunction would cause an impediment or
delay in the progress or completion of the infrastructure project or interfere with
related facility or services that are a part of such a project. The Amendment Act
also mandates state governments to designate civil courts as special courts to try
suits under the SRA pertaining to infrastructure project contracts. The aforesaid
amendment is intended to minimise court intervention in infrastructure projects
and to ensure that contracting parties do not wriggle out of contractual
commitments, especially in large infrastructure projects where public interest is
intrinsic.

Expert opinion: The Amendment Act permits courts to engage experts on specific
issues as determined by it, and the court inter alia has the power to direct persons
to give documents, information and access for inspection, to the expert and also
has the power to examine the expert or the expert’s report in open court. Also,
courts can direct disputing parties to bear the fee payable to such expert, as it
may appoint in relation to such proceedings.

LITERATURE REVIEW

Review 1-

By Indranil Deshmukh, Vineet Unnikrishnan & Harpreet Singh

Gupta on September 12, 2018

“Notification of the coming into force of the different provisions introduced by the
Amendment Act is presently awaited. The Specific Relief Act, 1963 codifies the law in
relation to grant of the relief of specific performance including injunctions. Under the
Act,the remedy of specific performance was not available to a party as a matter of
right, but its grant was based on the discretion of the court. The Amendment Act has
brought about a substantive change in the substratum and ethos of the Act.”

“The Specific Relief Act, 1963 (Act) codifies the law in relation to grant of the
relief of specific performance 4 including injunctions.”As per the Amendment Act, the
courts are bound to enforce the specific performance of a contract as a rule, subject to
limited exceptions.”

The other major changes include

“A new Section 20A to the principal Act provides that for infrastructure project
contracts,the court shall not grant an injunction in any suit, where it would cause
hindrance or delay in the continuance or completion of the infrastructure project. The
Amendment Act itself does not provide any guidance on whether the amendments would
operate prospectively or retrospectively. A similar controversy in the context of the 2015
amendments to the Arbitration and Conciliation Act, 1996 is still unsettled, in so far as the
Arbitration and Conciliation Bill, 2018 is pending approval with the Parliament . Let’s
examine the extent and magnitude of the controversy on the basis of some well settled
legal principles.”

4 ‘Specific Performance’ is a remedy ordered by courts, that requires precise fulfillment of the contractual or
legal obligation. See Specific Performance, Black’s Law Dictionary (10th ed., 2014).
Background and Nature of Amendments

The Amendment Act is based on the recommendations contained in a Report submitted by

an Expert Committee to the Government of India in 20165. “What emerges is that the
amendments do not purport to be either declaratory or clarificatory. The amendments do
away with the discretion of the courts to grant specific performance of contracts.Remedial
statutes are necessarily regarded as prospective unlike declaratory or clarificatory
statutes, which are considered retrospective.”

Therefore, from this perspective, the Amendment Act would need to be construed as not
having retrospective effect.

Section 6 of the General Clauses Act

“Notification of the coming into force of the different provisions introduced by the
Amendment Act is presently awaited. The Specific Relief Act, 1963 codifies the law in
relation to grant of the relief of specific performance including injunctions. Under the
Act,the remedy of specific performance was not available to a party as a matter of
right, but its grant was based on the discretion of the court. The Amendment Act has
brought about a substantive change in the substratum and ethos of the Act.”

As per the Amendment Act, the courts are bound to enforce the specific performance of a
contract as a rule, subject to limited exceptions.

The other major changes include

“A new Section 20A to the principal Act provides that for infrastructure project
contracts,the court shall not grant an injunction in any suit, where it would cause
hindrance or delay in the continuance or completion of the infrastructure project. The
Amendment Act itself does not provide any guidance on whether the amendments would
operate prospectively or retrospectively.” A similar controversy in the context of the 2015
amendments to the Arbitration and Conciliation Act, 1996 is still unsettled, in so far as the
Arbitration and Conciliation Bill, 2018 is pending approval with the Parliament 6. Let’s
examine the extent and magnitude of the controversy on the basis of some well settled
legal principles.

5
Expert Committee’s Report on Specific Relief Act, 1963 submitted on 26 th May 2016
6
The Arbitration and Conciliation (Amendment) Bill, 2018 seeks to introduce Section 87 to the principal Act to clarify that
the provisions of the Arbitration and Conciliation (Amendment) Act, 2015 are applicable to fresh arbitrations and court
proceedings relating thereto viz. arbitration and court proceedings relating to the arbitrations invoked on or after
23.10.2015. In any case, whether the provisions of the Arbitration and Conciliation (Amendment) Act, 2015 would apply to
Section 34 application which were pending as on 23.10.2015 is still res integra.
Background and Nature of Amendments

“The Amendment Act is based on the recommendations contained in a Report submitted

by an Expert Committee to the Government of India in 2016. What emerges is that the
amendments do not purport to be either declaratory or clarificatory. The amendments do
away with the discretion of the courts to grant specific performance of contracts.Remedial
statutes are necessarily regarded as prospective unlike declaratory or clarificatory
statutes, which are considered retrospective.”

“Therefore, from this perspective, the Amendment Act would need to be construed as not
having retrospective effect.”

Section 6 of the General Clauses Act

“Under the Act , there was an obligation cast on the plaintiff seeking specific performance
to prove that compensation as a remedy is either inadequate or unascertainable. Section
6 inter alia states that a repeal shall not affect any right, privilege, obligation or
liability acquired, accrued or incurred under any enactment so repealed.” It also
saves the previous operation of any enactment so repealed or anything duly done
or suffered thereunder7.”This obligation of the plaintiff can be viewed as a
corresponding right or privilege enjoyed by a defendant. By virtue of Section 6, the
aforementioned right and obligation that accrued when the Act was in force, would stand
preserved even after the introduction of the Amendment Act. This is particularly so
because the plain language of the Amendment Act does not in any way indicate an
intendment to take away accrued and vested rights.”

“In the absence of a breach or a dispute, no right under the Act can be said to have
accrued. It does not matter that the contract was entered into prior to the Amendment
Act coming into force – i.e. at a time when the Act was in force. One of the main
objectives of the Amendment Act is to reduce the intervention of the courts to ensure that
public works contracts can function smoothly. The consequent ambiguity is likely to result
in a lot of judicial time being spent to quell the controversy.”

Let us hope that some remedial measures are taken by the legislature to prevent this
oversight from blowing up into extensive litigation at the cost of hapless litigants.

7
The Gujarat Electricity Board v. Shantilal R. Desai AIR 1969 SC 239
Review 2- By S.S. Rana & Co. Advocates

The Specific Relief Act, 1963

“In order to ensure the specific relief to the individuals or entities in furtherance to
the enforcement of their civil rights, the Specific Relief Act, 1968 (hereinafter
referred to as the "Act") was introduced. In certain cases where no amount of
compensation or any other legal remedy can mitigate losses of the suffering party,
such party may seek relief requiring performance of the specific obligations
undertaken in the original agreement between the parties.”

Amendment to Specific Relief Act

“The Government brought forth modifications in the provisions of the Specific

Relief Act for the effective management of the same on August 1, 2018 vide the
Specific Relief (Amendment) Act, 2018 (hereinafter referred to as the
"Amendment Act"). Some of the features of the said Amendment Act are listed
below:”

 “Section 10 of the Act - The specific performance of a contract shall be

enforced by the court of law subject to the contracts which cannot be
specifically enforced as provided in Sections 11(2), 14 and 16 of the Act.”
 “Section 14 of the Act - The following contracts cannot be specifically
enforced, namely:”

(a) “where a party to the contract has obtained substituted performance of

contract as per Section 20 of the Act;”

(b) “a contract, the performance of which involves the performance of a

continuous duty which the court cannot supervise;”

(c) “a contract which is so dependent on the personal qualifications of the parties

that the court cannot enforce specific performance of its material terms; and”

(d) “a contract which is in its nature determinable.”

 “Section 14A of the Act - Where the court considers it necessary to get
expert opinion to assist it on any specific issue involved in the suit, it may
engage one or more experts for providing evidence, including production of
documents on the issue which shall be based on relevant information and
form a part of the record.”
 “Section 15(fa), Section 19(ca) of the Act - Specific performance of a
contract may also be obtained when a limited liability partnership has
entered into a contract and subsequently becomes amalgamated with
another limited liability partnership, the new limited liability partnership
which arises out of the amalgamation.”
 “Section 20 of the Act - Substituted performance of contract may be allowed
without prejudice to the generality of the provisions contained in the Indian
Contract Act, 1872, and, except as otherwise agreed upon by the parties,
where the contract is broken due to non-performance of promise by any
party, the party who suffers by such breach shall have the option of
substituted performance through a third party or by his own agency, and,
 recover the expenses and other costs actually incurred, spent or suffered by
him, from the party committing such breach after the party who suffers such
breach has given a notice in writing, of not less than thirty days.”
 “Section 20A of the Act - Special provisions for contract relating to
infrastructure project stating that no injunction shall be granted by a court in
a suit in this regard which would cause impediment or delay in the progress
or completion of such infrastructure project.”
 “Section 41(ha) of the Act - An injunction cannot be granted if it would
impede or delay the progress or completion of any infrastructure project or
interfere with the continued provision of relevant facility related thereto or
services being the subject matter of such project.”

“The changes brought about by the Amendment Act are in furtherance to

objectives of the Act to prevent the obligator from refraining to fulfil the promises
made by him which may be detrimental to the interests of the other party.”

CONCLUSION

Seeking to improve India's track record on the enforceability of contracts and

accelerate the time taken to dispose of pending cases, the Amendment Act aims at
protecting contractual expectations and wiping out uncertainties.

Although several of the provisions introduced by the Amendment Act, such as the
appointment of experts and substituted performance are common contractual
terms, they are nevertheless, a welcome statutory addition.

However, compelling specific performance in certain circumstances might be

impractical, in particular, where the defaulting party to a contract is on the brink
of financial distress or potential insolvency proceedings under the Insolvency &
Bankruptcy Code.

Likewise, the alternative of monetary compensation may be meaningless in such

circumstances, unless a third-party guarantor underwrites the obligations of the
defaulting party.

While the intention to compress the court proceedings to a period of 18 months is

a laudable aim, it begs the question as to what would happen at the end of that
time period.
 BIBLIOGRAPHY

The Bibliography should contain a list of all the books, journals, articles and
pamphlets that the researcher has consulted during the course of the study. It
should be arranged alphabetically.

https://blog.ipleaders.in/specific-relief-amendment-act-2018/

https://corporate.cyrilamarchandblogs.com/2018/09/specific-relief-amendment-
act-2018-prospective-retrospective/

Contracts and specific relief Act – Avtar Singh

http://www.egazette.nic.in/writereaddata/2018/187919.pdf

http://www.mondaq.com/india/x/760920/Contract+Law/The+Specific+Relief+Am
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