The Supreme Court on Friday held that the 2018 amendments to the Specific Relief Act are retrospective in its application and not prospective. [Siddamsetty Infra Projects (P) Ltd v Katta Sujatha Reddy and Ors]

A Bench of Chief Justice of India (CJI) DY Chandrachud with Justices JB Pardiwala and Manoj Misra allowed the review petitions against an August 2022 decision of the top court which had held that the amendments would apply only prospectively.

The Court today observed that the 2022 judgment contained errors, and clarified that the doctrine of lis pendens would apply.

The 2018 ruling, which set aside a Telangana High Court verdict, meant that parties could no longer benefit from the amended provisions of the Act if the underlying contract was executed prior to its enactment.

The earlier decision had reasoned that the 2018 Amendment created new rights and obligations that had not existed earlier.

The 2018 amendment addresses the issue of delays in contract enforceability and provides additional remedies to affected parties.

It eliminates the inadequacy test and enshrines specific relief as a regular statutory remedy, impacting civil remedies in cases of breach of contract, recovery of property, possession, specific performance, and injunctions.

The inadequacy test had made any grant of an enforceable decree of specific performance an exceptional remedy given only when compensation under common law was either not determinable or sufficient.

It refers to the requirement that aggrieved parties must satisfy the concerned court of the same, and presupposes that any breach of contract is adequately compensable financially, while harping on specific performance affects the liberty of the promisor.

The High Court ruling has now been restored.

[Read judgment]