Statutory Provisions
- Specific Relief Act, 1963 (“The Act”)
- Specific Relief Amendment Act, 2018 (“Amendment Act”)
The Act governs the grant of specific relief and conditions precedent and the Amendment Act effective from October 01, 2018 further refines provisions on specific performance, injunctions and declaratory decrees. In this Response, we shall review the whether the Amendment Act shall have a retrospective effect or a prospective one.
Amendment Act – Key Changes
Section 6 Suit by person dispossessed of immovable property
Expanded the right to sue for dispossession of immovable property to include not only the dispossessed person but also any person through whom that person had been in possession, thereby broadening the scope of who may initiate such suits.
Section 10 Discretionary to statutory remedy
Mandates specific performance rather than discretionary, but enforcement is subject to exceptions under Sections 11(2), 14, and 16 of the Act. Section 11 now mandates courts to enforce specific performance of contracts, removing their discretion and making enforcement largely obligatory under the Amendment Act.
Section 14 Expert Assistance
Exempts substituted performance, continuous duty, personal qualification contracts, and determinable contracts from specific enforcement; Section 14A inserted to empowers courts to appoint experts for key issues.
Limited Liability Partnership (“LLP”)
Insertion of clause (fa) in Section 15 and clause (ca) in Section 19, allows a newly amalgamated LLP to obtain or be subjected to specific performance of contracts entered into by any of its component LLPs, thus recognizing amalgamated LLPs as parties for enforcing such contracts.
Other Changes
Section 16(a) now bars specific performance for parties who have obtained substituted performance under Section 20, while Section 16(c) requires only proof of readiness and willingness, not specific pleadings. Section 20 introduces a mandatory right to substituted performance, recoverable after 30 days’ notice. Newly inserted Sections 20A, 20B, and 20C restrict injunctions on infrastructure projects and provide for Special Courts. Further, Section 25 now allows compensation only “in addition to” specific performance, emphasizing performance over monetary relief.
Retrospective vis-à-vis Prospective
The effect of the Amendment Act can be better understood by understanding the following judicial rulings of various courts:
Katta Sujatha Reddy v. Siddamsetty Infra Projects Private Limited
The Hon’ble Supreme Court held that the Amendment Act is prospective and cannot apply to those transactions that took place prior to its coming into force. The Court observed the following:
“When a substantive law is brought about by amendment, there is no assumption that the same ought to be given retrospective effect. Rather, there is a requirement for the legislature to expressly clarify whether the aforesaid amendments ought to be retrospective or not.
However, if the substituted provisions contain any substantive provisions which create new rights, obligations, or take away any vested rights, then such substitution cannot automatically be assumed to have come into force retrospectively. In such cases, the legislature has to expressly provide as to whether such substitution is to be construed retrospectively or not.
In the case at hand, the amendment act contemplates that the said substituted provisions would come into force on such date as the Central Government may appoint, by notification in the Official Gazette, or different dates may be appointed for different provisions of the Act. It may be noted that 01.10.2018 was the appointed date on which the amended provisions would come into effect.”
Hitendra Vishnu Thakur v. State of Maharashtra
The Hon’ble Supreme Court made the following observation:
“Every statute which takes away or impairs vested rights, or creates new obligations, or imposes new duties in respect of past transactions, must be presumed to be prospective unless a contrary intention appears.”
A similar observation was also made by the Hon’ble Supreme Court in the matter of Binani Industries Limited v. Commissioner of Income-Tax. Thus, it can be determined that the Amendment Act shall have a prospective effect and cannot apply to those transactions that took place prior to its coming into force.
Since the Amendment Act created new rights and removed existing judicial discretion, it was deemed substantive, not procedural. The court clarified that while a substitution generally replaces old provisions, it does not operate retrospectively when it alters rights or obligations unless the legislature explicitly says so. Henceforth, the Amendment Act applies only to transactions after October 01, 2018; and not to earlier contracts or suits.
Analysis
The Amendment Act was introduced to make a specific performance a rule and not an exception. Nevertheless, this is not a procedural, but a substantive change. Therefore, it does not apply to the suits filed or contracts signed before October 01, 2018. The Hon’ble Supreme
Court made the same observation regarding the effect and nature of the Amendment Act in the review petition filed in the case of Katta Sujatha Reddy v. Siddamsetty Infra Projects Private Limited.
Until 2018, Sections 10 and 14 of the Act gave the discretion to courts on whether a specific performance should be granted or not. Section 10 in its original form gave that specific performance is enforceable in some situations, thus granting a judicial discretion. In section 14, a number of contracts was listed, which cannot be enforced specifically. This approach was substantially modified by the Amendment Act and specific performance became a rule, not an exception. The Act does not merely provide procedure; it defines substantive legal remedies available to contracting parties. The Amendment Act changes the nature of the right to specific performance from a discretionary equitable remedy to a statutory right enforceable as of course.
Conclusion
In view of the above discussion, it can be concluded that the Amendment Act shall have a prospective effect and shall apply only to transactions occurring after October 01, 2018, as it creates new rights and therefore cannot be applied retrospectively unless expressly stated.
Author Name- Aarushi Dubey (Student – B.A. LL.B. (Hons.),Dr. D.Y. Patil Law College, Pune).
