Specific performance of the contract – As a rule enforced by court

In one minute

When a party breaks a contract, the injured party can ask the court to make the other side keep its promise. That order is called specific performance. It is the most important remedy in the Specific Relief Act, 1963.

Since 1 October 2018, the court shall enforce a contract as a rule, unless a section bars it. Three provisions can bar it: the kind of contract (sections 11(2) and 14) and the plaintiff's own conduct (section 16). Substituted performance under section 20 works through sections 14(a) and 16(a). In exams, you must know all of these, with the main cases.

Legal provision

• Section 9: the defendant may raise any defence that the law of contract allows.
• Section 10: specific performance shall be enforced, subject to section 11(2), section 14 and section 16.
• Sections 11 to 13: contracts connected with trusts, part of a contract, and rights against a vendor with a defective title.
• Section 14: four kinds of contract that cannot be specifically enforced. Section 14A: the court may engage experts.
• Sections 15 to 19: who may sue and against whom, personal bars, no title, enforcement only with a variation.
• Section 20: substituted performance.
• Sections 21 to 25: compensation, possession and refund of earnest money, a sum named for breach, bar of a later suit, and awards.

Meaning and definition

Specific performance is a court order that a party must actually do what he promised in the contract. It differs from damages, which give money. It is the natural remedy where the subject matter is unique, such as land.

A plaintiff must clear a series of tests. The flowchart shows the order. The Act does not say that the court has no freedom left. It says the court shall enforce the contract unless a named bar applies.

1. 1. Is there a valid, subsisting contract, with no defence under the law of contract?No: there is nothing to enforce (section 9).
2. 2. Is the suit filed in time, within three years of the date fixed for performance or of refusal?No: the suit is barred by Article 54 of the Limitation Act, 1963.
3. 3. Is the contract one that the Act allows to be enforced?No, it is barred by section 11(2) or section 14: damages are the remedy.
4. 4. Is the plaintiff free of the personal bars?No, he took substituted performance, cannot perform, or cannot prove readiness and willingness (section 16).
5. 5. All the tests are met.The court shall enforce the contract (section 10). It may add compensation and possession (sections 21 and 22).

Detailed explanation

1. Section 9: ordinary defences remain

A defendant can plead any ground available under the Indian Contract Act, 1872. He can say that consent was not free, that the agreement is void or unlawful, or that the contract is discharged. The Specific Relief Act gives a remedy only once a valid, subsisting contract is shown.

2. Section 10: enforced as a rule

Before 1 October 2018, a contract "may, in the discretion of the court" be enforced. Old section 20 gave the court wide discretion and let it refuse relief even in a lawful case. That discretion was not arbitrary. It had to be sound and reasonable, guided by judicial principles. Two similar cases could still end differently.

Section 10 now works as a formula: the court shall enforce the contract, minus three named carve-outs. There is no fourth. The three exceptions are a trustee's contract in excess of his power (section 11(2)), the four classes in section 14, and the personal bars in section 16. The timeline shows how the rule changed.

1. Before 1 October 2018Specific performance "may, in the discretion of the court" be enforced. Old section 20 governs the discretion.
2. 1 August 2018The Specific Relief (Amendment) Act, 2018 receives the President's assent.
3. 1 October 2018The Amendment takes effect. Section 10 now says "shall be enforced".
4. 25 August 2022Katta Sujatha Reddy: the Supreme Court holds the amendment prospective.
5. 8 November 2024The Court recalls that judgment in review. It does not decide the prospective question again.

Point	Before 1 October 2018	After 1 October 2018
Wording of section 10	Could be enforced in the court's discretion	Shall be enforced
Reason to refuse	Damages adequate, hardship, delay, sound judicial principles	Only sections 11(2), 14 and 16
Old section 20	Discretion and powers of Court	Replaced by substituted performance

The rule leaves three things untouched.

• The defendant's ordinary contract defences (section 9).
• The plaintiff's duty to prove readiness and willingness (section 16(c)).
• The time limit of three years (Article 54, Limitation Act, 1963).

Which law applies to which contract? In Katta Sujatha Reddy v. Siddamsetty Infra Projects (2022), the Court held that the 2018 amendment is substantive, not merely procedural. It said there is no assumption that a substantive amendment is retrospective. So the earlier law, with its discretion, applied to a transaction made before 1 October 2018. On 8 November 2024 the Court allowed review petitions and recalled that judgment. It held that the 2022 Court had made errors in reading the agreements. It said that even if the relief stayed discretionary, the discretion had been used wrongly. The review order did not decide whether the amendment is prospective. An exam answer should give both lines.

3. Section 11: contracts connected with trusts

Under section 11(1), specific performance shall be enforced where the act is the performance, wholly or partly, of a trust. Before 2018 the word was "may". Under section 11(2), a contract made by a trustee in excess of his powers, or in breach of trust, cannot be specifically enforced. Enforcing it would let the trustee's wrong bind the trust property.

4. Section 12: part of a contract

The general rule is that the court shall not direct specific performance of a part of a contract (section 12(1)). There are three softer cases.

• Small unperformed part (12(2)). The part left is a small proportion of the whole in value and money can compensate for it. The court may order the rest to be performed and award compensation for the shortfall.
• Large unperformed part (12(3)). The part left is a considerable part, or money cannot compensate for it. The plaintiff cannot get a decree for the whole. The other side may still ask for the part that can be performed. He must pay the agreed price, less the price of the missing part. Where money cannot compensate, he pays in full. He must also give up all claim to the rest and to compensation.
• Separate part (12(4)). A part that stands on a separate and independent footing, and ought to be enforced, may be enforced alone.

The Explanation says a party is unable to perform the whole if part of the subject matter existing at the date of the contract has ceased to exist.

5. Section 13: a vendor with a defective title

A person may contract to sell or let immovable property with no title or an imperfect title. The buyer or lessee then has four rights.

• (a) If the vendor later acquires an interest, the buyer may compel him to make good the contract out of it.
• (b) The buyer may compel him to procure the concurrence or conveyance of other persons who are bound to give it.
• (c) If the property is mortgaged for no more than the price and the vendor has only a right to redeem, the buyer may compel him to redeem.
• (d) If the vendor sues and loses for want of title, the defendant gets back his deposit with interest and his costs, with a lien on the vendor's interest.

6. Section 14: contracts that cannot be enforced

The 2018 Amendment rewrote section 14. Four classes remain, and "money is an adequate relief" is no longer one of them. The table below sets them out. Two Supreme Court cases show how they work.

• A contract that is determinable cannot be enforced. In Indian Oil Corporation v. Amritsar Gas Service (1991), the Court refused to enforce a distributorship agreement that either side could end on 30 days' notice without giving a reason.
• A contract of personal service cannot be enforced. In Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan (2006), the Court held that an injunction would amount to specific performance of a personal service contract, which is barred.

7. Section 14A: experts

Section 14A is a 2018 addition. In any suit under the Act, the court may engage one or more experts to report on a specific issue. It can examine the expert in open court. The expert's fee is fixed by the court and paid by the parties as the court directs.

8. Sections 15 and 19: who may sue, and against whom

Section 15 lists the persons who may obtain specific performance.

• (a) any party to the contract;
• (b) the representative in interest or the principal of a party. A proviso limits this. Suppose the party's learning, skill, solvency or personal quality is a material part of the contract, or the contract bars assignment. The representative or principal cannot then sue, unless the party has performed or the other side has accepted the performance;
• (c) a person beneficially entitled under a settlement on marriage or a compromise of doubtful family rights;
• (d) to (f) a remainderman or reversioner, in the cases stated;
• (fa) and (g) a new LLP or company arising from an amalgamation;
• (h) a company, for a contract that its promoters made before it was formed, if the company accepted it and told the other party.

Section 19 is the mirror. The contract may be enforced against either party, and against a person claiming under him by a later title. The exception is a transferee for value who paid in good faith and without notice of the original contract. It also covers the same amalgamation and pre-incorporation cases.

9. Section 16: personal bars

Specific performance cannot be enforced in favour of a person in three situations.

• (a) Substituted performance. He has already obtained substituted performance under section 20.
• (b) Incapacity or misconduct. He has become incapable of performing. Or he violates an essential term that remains on his side. Or he acts in fraud of the contract, or wilfully acts at variance with or in subversion of the relation the contract intended.
• (c) Readiness and willingness. He fails to prove that he has performed, or has always been ready and willing to perform, the essential terms that are to be performed by him. Terms that the defendant prevented or waived are left out.

The Explanation adds two points. Where the contract involves payment of money, the plaintiff need not tender the money or deposit it in court unless the court directs. He must prove performance, or readiness and willingness, according to the true meaning of the contract. Before 2018 the plaintiff also had to "aver" this in his plaint. Now the Act asks him to prove it.

The cases explain "ready and willing". In J.P. Builders v. A. Ramadas Rao (2010), the Court said readiness means financial capacity and willingness means conduct. In N.P. Thirugnanam v. R. Jagan Mohan Rao (1995), it said continuous readiness and willingness is a condition precedent, but the buyer need not keep the money in hand. He must show he can raise the funds.

10. Time, delay and hardship

A suit for specific performance must be filed within three years (Article 54, Limitation Act, 1963). The period runs from the date fixed for performance or, if none is fixed, from notice of refusal. Filing in time is not enough. In K.S. Vidyanadam v. Vairavan (1997), the buyer did nothing for about two and a half years while prices rose steeply. The Court refused relief. In Saradamani Kandappan v. S. Rajalakshmi (2011), the Court held time was of the essence. It added that the old presumption, that time is not of the essence in land sales, must be applied with care. Prices have risen so fast.

In K. Narendra v. Riviera Apartments (1999), the Court refused specific performance of a 1972 agreement. Performance after so many years would cause the seller hardship that he did not foresee. The buyer was given a refund with interest and Rs 3,25,000 as compensation under section 21. These decisions arose under the old discretion. They still guide the questions of delay and readiness.

11. Sections 17 and 18: no title and variation

Section 17 bars specific performance in favour of a vendor or lessor who knew he had no title. It also bars one who cannot, at the fixed time, give a title free from reasonable doubt. Section 18 deals with a written contract to which the defendant sets up a variation. The plaintiff can then get performance only with the variation in three cases. First, fraud, mistake of fact or misrepresentation made the writing different from what was agreed. Second, the object was a legal result that the contract as framed does not produce. Third, the parties changed the terms after signing.

12. Section 20: substituted performance

Unless the parties agreed otherwise, the party who suffers a breach may have the contract performed through a third party or by his own agency. He recovers the expenses and costs he actually incurred from the party in breach. He must first give written notice of at least 30 days calling on the other side to perform. He cannot recover the costs unless he has actually got the contract performed.

Once he takes this route, he cannot claim specific performance against the party in breach (section 20(3)). He keeps his right to compensation (section 20(4)). The old section 20, which gave the court wide discretion, no longer exists.

13. Sections 21 to 25: compensation and other reliefs

• Section 21: compensation. The plaintiff may claim compensation in addition to performance. If the court refuses performance but finds a broken contract, it shall award compensation. If performance is not enough to do justice, it shall also award compensation. The court follows section 73 of the Indian Contract Act. The plaintiff must claim it in the plaint, but the court must allow an amendment at any stage.
• Section 22: possession, partition and refund. In a suit on a contract to transfer immovable property, the plaintiff may also ask for possession or partition, and for refund of earnest money if performance is refused. He must claim these specifically. In Adcon Electronics v. Daulat (2001), the Court held that a suit only for specific performance of a sale is not a suit for land, because possession is not claimed.
• Section 23: a named sum. A contract naming a sum payable on breach can still be enforced. The sum must have been named only to secure performance, and not to let the defaulter pay instead. The court cannot also decree the named sum.
• Section 24: bar. Dismissal of a suit for specific performance bars a later suit for compensation for that breach. It does not bar other reliefs.
• Section 25: the chapter applies to awards to which the Arbitration and Conciliation Act, 1996 does not apply, and to directions in a will to execute a settlement.

14. Covid-19 and specific performance

The pandemic was not an automatic defence. A defendant must show that the lockdown actually prevented performance, as under section 56 of the Contract Act. The Supreme Court also excluded the period from 15 March 2020 to 28 February 2022 when it counted limitation. Where limitation would have ended in that period, it gave a minimum of 90 days from 1 March 2022. This helped plaintiffs whose three-year period under Article 54 fell in that window.

Contracts that cannot be specifically enforced

Provision	Class of contract	Why the law bars it	Example
Section 11(2)	A trustee's contract in excess of his powers or in breach of trust	The trust property should not be bound by a wrong	A trustee sells trust land without power to sell
Section 14(a)	Substituted performance already obtained	The plaintiff has chosen another remedy	The owner has had the wall built by a new contractor
Section 14(b)	A continuous duty the court cannot supervise	The court cannot watch day-to-day performance	A 20-year contract to run and maintain a plant
Section 14(c)	So dependent on personal qualifications that the court cannot enforce its material terms	Forced skill is worthless	A contract to sing or to paint a portrait
Section 14(d)	A contract that is in its nature determinable	The other side could end it at once	A dealership ended by 30 days' notice without cause

Don't confuse: specific performance and substituted performance

Students often treat the two as the same. Both aim at getting the contract carried out, but the route differs.

Point	Specific performance	Substituted performance
Who carries out the work	The party in breach, under a court decree	A third party or the injured party, without a decree
Court order needed	Yes	No. Written notice of at least 30 days is needed
Section	10	20
What follows	The other side must perform	Costs are recovered. Specific performance can no longer be claimed (section 20(3))

Common mistakes

• Writing that specific performance is still wholly discretionary. Section 10 now says "shall be enforced", subject to three bars.
• Listing "compensation is an adequate relief" as a bar under section 14. The 2018 Amendment removed it.
• Forgetting that the plaintiff must prove readiness and willingness, and that the word "aver" was dropped in 2018.
• Thinking that a suit filed within limitation must succeed. Delay and changed prices can still defeat it.
• Mixing up substituted performance and specific performance, or forgetting the 30-day notice.

Apply it

Leading case laws

• Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd. (2022)

  Facts. A purchaser under two 1997 agreements to buy 40.08 acres missed the three-month deadline for the balance and sued on 9 August 2002. (2023) 1 SCC 355.

  Principle. The 2018 amendment to section 10 is prospective. The suit was barred under Article 54, the purchaser was not ready and willing in time, and section 12 did not help. The Court recalled the judgment in review on 8 November 2024 without deciding the prospective question again.

  Why it matters. It is the leading authority on the date of effect of the amended section 10.

• Saradamani Kandappan v. S. Rajalakshmi (2011)

  Facts. A buyer under an agreement of 17 January 1981 paid Rs 1,25,000 of the balance of Rs 2,75,000 and missed the rest. The sellers cancelled on 2 August 1981. (2011) 12 SCC 18.

  Principle. Time for payment was of the essence, and the buyer did not prove readiness and willingness. The Court said the old presumption that time is not of the essence in land sales must be applied with care because prices have risen steeply.

  Why it matters. It links delay, price rise and section 16(c).

• K.S. Vidyanadam v. Vairavan (1997)

  Facts. A buyer of a Madurai house for Rs 60,000 gave notice only in July 1981 and sued in August 1981, after prices rose. (1997) 3 SCC 1.

  Principle. A suit need not be decreed merely because it is within limitation. Total inaction for two and a half years, with steep price rise, made relief inequitable.

  Why it matters. It shows that a court looks at all circumstances, not only the limitation period.

• J.P. Builders v. A. Ramadas Rao (2010)

  Facts. Owners of 30 acres 86 cents agreed on 3 February 2006 to sell for Rs 5,55,48,000 and took Rs 75 lakh in advance. The land was mortgaged to a bank for a sister concern's loan. (2011) 1 SCC 429.

  Principle. The buyer proved readiness and willingness. Readiness means financial capacity and willingness means conduct. A buyer need not tender the money in court unless directed.

  Why it matters. It explains the two limbs of section 16(c).

• N.P. Thirugnanam (D) by LRs. v. Dr. R. Jagan Mohan Rao (1995)

  Facts. A buyer agreed to buy a Madras house for Rs 2,30,000, paid Rs 10,000 and took possession as tenant. The courts found he was not ready and willing. (1995) 5 SCC 115.

  Principle. Continuous readiness and willingness is a condition precedent. The plaintiff need not keep the money ready, but must show he can raise it.

  Why it matters. It is a standard authority for readiness and willingness.

• K. Narendra v. Riviera Apartments (P) Ltd. (1999)

  Facts. A builder paid Rs 3,25,000 under a 1972 agreement to buy a Delhi plot. Building plans were refused, and the land was partly excess land and partly acquired. AIR 1999 SC 2309.

  Principle. Specific performance in 1999 would cause hardship that the seller did not foresee. The builder got a refund with interest and Rs 3,25,000 as compensation under section 21.

  Why it matters. It shows compensation under section 21 where performance is refused.

• Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan (2006)

  Facts. A sports agency had a three-year promotion agreement with a cricketer and claimed a right to match third-party offers after the term. AIR 2006 SC 3426.

  Principle. A covenant that operates after the term is prima facie void under section 27 of the Contract Act. An injunction would be specific performance of a personal service contract, which is barred.

  Why it matters. It explains section 14(c) with section 41(e).

• Indian Oil Corporation v. Amritsar Gas Service (1991)

  Facts. A distributorship agreement allowed either side to end it on 30 days' notice without giving reasons. (1991) 1 SCC 533.

  Principle. Such a contract is determinable in nature. It cannot be specifically enforced. The remedy is compensation for the notice period.

  Why it matters. It is the standard authority for section 14(d).

How to write this answer in the exam

Key points to remember

• Section 10 (after 2018): specific performance shall be enforced as a rule, subject to sections 11(2), 14 and 16. Before 1 October 2018 it was "may", in the court's discretion.
• Katta Sujatha Reddy (2022): the amendment is prospective. The 2024 review recalled that judgment without deciding the point again.
• Section 14 has four classes: substituted performance obtained, continuous duty, personal qualifications, determinable contracts.
• Section 16(c): the plaintiff must prove continuous readiness and willingness. Readiness is capacity and willingness is conduct.
• Filing within limitation (three years, Article 54) is not enough. Delay and price rise can defeat relief.
• Section 20: substituted performance after 30 days' written notice. It bars a later claim for specific performance but not compensation.
• Sections 21 and 22: compensation, possession and refund of earnest money must be claimed in the plaint, but the court must allow amendment.

Quick self-test

Related topics

• Specific Relief Act including 2018 Amendment
• Specific performance of the contract – As a rule enforced by court
• specific performance of contracts and force majeure
• Injunctions to perform negative agreement
• Discharge by impossibility of performance (Doctrine of Frustration)