Amended act reduces court’s discretionary powers

The Specific Relief (Amendment) Act, 2018 (act), which received presidential consent on 1 August 2018, attempts to facilitate rapid economic and infrastructural growth. It removes the discretionary powers of the courts to stay applications for specific performance of contracts. By making enforcement a mandatory rule the act allows companies to enter into contracts with a legislative and judicial assurance that they will be specifically performed. This nullifies previous advantages enjoyed by defaulting parties of evading their obligations, and gives the enforcing party maximum advantage.

The act amends the Specific Relief Act, 1963 (SPA), as described above and, in a major development, inserts a new schedule of infrastructure projects. This provides that courts may not grant injunctions to prevent the application for, and grant of orders for specific performance in disputes over contracts for such projects.

The highlights of the act are:

Compulsory specific performance. The act amends sections 10 and 11 of SPA, so that, save for specific exceptions, it is mandatory for courts to grant orders for specific performance of contracts. Courts no longer have discretionary power to refuse to issue such orders.

Exceptions. Amended section 14 of SPA now allows only four exceptions to the mandatory issuance of a specific performance order. These are where a) a party has already obtained an order for substituted performance of a contract (see below); (b) the performance of a contract involves continuous obligations which the court cannot supervise; (c) there is a contract that is so dependent on the personal qualifications of the parties that the court cannot order specific performance of its material terms, and (d) where there is a contract that is, by its nature, determinable.

Deepak Sabharwal is the managing partner of Deepak Sabharwal & Associates.