Specific Relief (Amendment) Act, 2018 — Key Provisions and Judicial Interpretation

The Legal Question Before the Court

Under the pre-amendment Specific Relief Act, 1963, specific performance of a contract — compelling the breaching party to perform the contract as agreed — was a discretionary remedy. Courts routinely awarded only monetary damages instead, even for contracts for the sale of immovable property, on the ground that damages were an "adequate remedy." This approach had been criticised as commercially unrealistic: in property and infrastructure contracts, damages are often incapable of adequately compensating the non-breaching party, who may have made financial commitments in reliance on the contract that cannot be undone by money alone.

The Court's Decision

The Specific Relief (Amendment) Act, 2018 fundamentally changed the remedial framework. The amended Section 10 of the Specific Relief Act, 1963 now makes specific performance ordinarily enforceable for contracts to transfer immovable property and other classes of contracts. The discretion to deny specific performance where damages would be adequate has been substantially curtailed.

The amendment also introduced two new institutional mechanisms: (a) the concept of "substituted performance" — where the non-breaching party can arrange for a third party to perform the contract and recover the cost from the breaching party; and (b) special courts for infrastructure and commercial disputes to hear specific performance claims on a priority basis.

Judicial decisions post-2018 have consistently applied the amended provision to property transactions, holding that a buyer who has paid consideration and had a contract for sale registered is entitled to compel specific performance — not merely to recover the advance amount with interest.

The Court's Reasoning

The amendment was recommended by the Law Commission of India (239th Report, 2012) and was driven by the practical experience of infrastructure and property markets. In large infrastructure projects, the government and private developers enter contracts that are performable over years; a party who walks away from such a contract knowing only that it will pay damages has little incentive to honour its commitments. The inadequacy of the damages remedy in such contexts is well-established in commercial practice.

The shift from discretion to near-mandate for specific performance brings Indian law closer to the civil law tradition — and to the approach taken in many commercial law jurisdictions — where the primary obligation is to perform contracts as agreed, and damages are the secondary, compensatory remedy.

Practical Implications — What This Means Today

For property transactions in Kerala, the amendment has significant practical consequences. A seller who repudiates a registered agreement for sale — perhaps because property prices have risen and a better offer is available — now faces a much stronger specific performance claim from the buyer. The buyer's remedy is not merely recovery of the advance and interest; it is a court order compelling the seller to execute the conveyance deed.

For businesses entering long-term service, supply, or infrastructure contracts, the amendment means that the breaching party faces the risk of being compelled to perform — not merely to pay an estimated sum. Contract risk management must account for the reality that an opponent can seek and obtain specific performance rather than damages.

Relevant Statutory Provisions

• Section 10, Specific Relief Act, 1963 (as amended 2018) — Specific performance of contract — now ordinarily enforceable
• Section 14, Specific Relief Act, 1963 (as amended 2018) — Contracts not specifically enforceable — narrowed exceptions
• Section 20, Specific Relief Act, 1963 (as amended 2018) — Substituted performance — new remedy introduced
• Section 41A, Specific Relief Act, 1963 (as amended 2018) — Special courts for infrastructure contracts

Analysis by Vinode V. Luka, Advocate | Published: May 2026 | Last reviewed: May 2026