The Supreme Court has ruled that the 2018 amendment to the Specific Relief Act, 1963—which made the grant of specific performance a mandatory remedy—does not have retrospective effect and will not apply to suits or transactions prior to October 1, 2018.

A Bench of Justice JB Pardiwala and Justice Manoj Misra delivered the ruling while reiterating that, before the 2018 amendment (via Act 18 of 2018), granting specific performance was a matter of judicial discretion, not an obligation.

Referring to Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd. (2022), the Court noted that the amendment was held to be prospective in nature. Even though this judgment was later reviewed and recalled in Siddamsetty Infra Projects (P) Ltd. v. Katta Sujatha Reddy (2024), the Supreme Court clarified that no finding was made in the review decision to suggest that the amended provisions applied to pre-2018 suits.

“No doubt, the earlier decision was reviewed and recalled, but the review judgment did not specifically hold that the amended provisions would govern suits instituted before the 2018 amendment. It merely assumed that grant of specific performance remained discretionary for such cases,” the Bench observed.

Since the impugned judgment in the present case had been delivered on February 2, 2018, before the amendment came into force, the Court applied the pre-amendment law.

The case involved an agreement to sell between the appellant (buyer) and the respondent (vendor). Despite having no right to terminate, the vendor attempted to do so even after accepting additional consideration from the buyer six months after the contract period expired.

While the Trial Court dismissed the buyer’s specific performance suit for not seeking a declaration invalidating termination, the First Appellate Court reversed this, holding that acceptance of additional payment amounted to waiver of termination rights.

The High Court, however, overturned the appellate court’s decision, prompting the buyer to approach the Supreme Court.

Allowing the appeal, Justice Manoj Misra’s judgment restored the First Appellate Court’s decree, observing that once the vendor accepted further payment, it waived the right to terminate and acknowledged the contract’s continuing validity.

“Acceptance of additional money not only signified waiver of the right to forfeit the advance but also acknowledged subsistence of the agreement,” the Court said. The subsequent termination notice was therefore a wrongful repudiation, and the buyer was entitled to sue directly for specific performance without seeking a prior declaration.

The appeal was accordingly allowed.

Case Title: Annamalai v. Vasanthi and Others