The Specific Relief (Amendment) Act, 2018 - Applicability To Pending Suits

The Amendment Act had been enacted since on account of tremendous economic development, extensive reforms which had been carried out in various related statutory provisions towards greater enforcement of contracts and settlement of disputes in a speedy manner, were not truly reflected in the existing provisions of the Specific Relief Act, 1963. It was felt that the provisions of Specific Relief Act, 1963 were not in tune with the rapid economic growth happening in the country.

Three most essential aspects of the Amendment Act is relating to substitution of existing Section 10, 14 and 20 of the Specific Relief Act, 1963 with substituted provisions. A question which is bound to arise is as to whether the substituted provisions under Sections 10, 14 and 20 would govern the suits / original proceedings, that were filed prior to 01.10.2018 and were pending as on the said date?

The primary answer to the aforesaid question probably lies in the Amendment Act itself. A perusal of the Amendment Act shows that the present is not a case of amendment of the said provisions. However, the legislature has 'substituted' the existing provisions under Section 10, 14 and 20 of the Specific Relief Act, 1963, with new provisions, albeit some parts of the substituted provisions may have remained the same as the original provisions. The legislature has intentionally used the word 'substituted' under the Amendment Act. The same connotes that the earlier provisions stand substituted by the new provisions.

In KoteswarVittal Kamath vs. K. RangappaBaliga& Co. (1969) 1 SCC 255, a three-judgesBench of the Hon'ble Supreme Court of India elaborated that the process of substitution consisted of two steps (i) The old rule (or statutory provision) is made to cease to exist; and (ii) The new Rule (or statutory provision) is brought into existence in it's place.

Another three-judges Bench of the Hon'ble Supreme Court of India in Zile Singh vs. State of Haryana& Ors. (2004) 8 SCC 1 had clearly created a distinction between 'Substitution' and 'supersession' or a mere repeal of the existing provisions. The Hon'ble Supreme Court held that substitution of a provision results in repeal of the earlier provision and its replacement by the new provision.

In Government of India & Ors. Vs. Indian Tobacco Association (2005) 7 SCC 396, the Hon'ble Supreme Court of India relied upon the definition of the word 'substitute' in Collins English Dictionary, to mean "to serve or cause to serve in place of another person or thing"; "to replace (an atom or group in a molecule) with (another atom or group)"; or "a person or thing that serves in place of another, such as a player in a game who takes the place of an injured colleague".

In Gottumukkala Venkata Krishamraju Vs. Union of India (UOI) and Ors.2018 (11) Scale 9, the question relating to effect of 'substitution' of a statutory provision as to the prospective or retrospective operation of the substituted provision came up before the Hon'ble Supreme Court of India. In the said judgment, the Hon'ble Supreme Court reiterated that wherever the word 'substitute' or 'substitution' is used by the legislature, it has the effect of deleting the old provision and making new provision operative, as well as the two steps involved in the process of substitution. The Hon'ble Supreme Court of India conclusively held that the Rule is that when a subsequent Act amends an earlier one in such a way so as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all. The Hon'ble Supreme Court of India held that unless it is found that the legislature intended to give prospective operation to the substituted provision, the aforesaid position will prevail.

Applying the aforesaid principles to the Amendment Act would show that the legislature has intentionally used the word 'substituted', while deleting the existing Section 10, 14 and 20 and bringing into existence the substituted provisions. The Amending Act nowhere gives any indication that the substituted provisions shall not apply to suits or original proceedings, pending as on the date of coming into force of the Amending Act. Even considering the intention of the legislature in enacting the Amending Act i.e. to bring it in sync with the related laws to facilitate enforcement of contracts, settlement of disputes in speedy mannerand to bring it intune with the rapid economic growth happening in our country and the expansion of infrastructure activities that are needed for the overall development of the country,it cannot be said that the same would not apply to suits / original proceedings, pending as on the date of coming into force of the Amending Act.

Another test to determine whether the substituted provisions under Section 10, 14 and 20 would apply to pending suits / original proceedings or not is as to whether provisions of Specific Relief Act are substantive or merely procedural. It is settled law that Procedural law and its amendments would be applicable to pending cases as well, while Substantive laws and its amendments may not apply to pending cases.

The Hon'ble Supreme Court of India, in Adhunik Steels Ltd. vs. Orissa Manganese and Minerals Pvt. Ltd. (2007) 7 SCC 125 held that law of specific relief, by its essence, part of procedural law. The Hon'ble Supreme Court held as under:

"13. Injunction is a form of specific relief. It is an order of a court requiring a party either to do a specific act or acts or to refrain from doing a specific act or acts either for a limited period or without limit of time. In relation to a breach of contract, the proper remedy against a defendant who acts in breach of his obligations under a contract, is either damages or specific relief. The two principal varieties of specific relief are, decree of specific performance and the injunction (See David Bean on Injunctions). The Specific Relief Act, 1963 was intended to be "An Act to define and amend the law relating to certain kinds of specific reliefs." Specific Relief is relief in specie. It is a remedy which aims at the exact fulfilment of an obligation. According to Dr. Banerjee in his Tagor Law Lectures on Specific Relief, the remedy for the non performance of a duty are (1) compensatory, (2) specific. In the former, the court awards damages for breach of the obligation. In the latter, it directs the party in default to do or forbear from doing the very thing, which he is bound to do or forbear from doing. The law of specific relief is said to be, in its essence, a part of the law of procedure, for, specific relief is a form of judicial redress. Thus, the Specific Relief Act, 1963 purports to define and amend the law relating to certain kinds of specific reliefs obtainable in civil courts. It does not deal with the remedies connected with compensatory reliefs except as incidental and to a limited extent….."

Thus, even on that count, it can safely be said that since the Amending Act only amends the procedural aspects of law, the substituted provisions would apply and govern the pending suits as well.

Another ancillary aspect is as to whether the discretion in grant of Specific Performance, which was available to the Courts under the un-substituted Section 20 of the Specific Relief Act, 1963, would be available to the Hon'ble Court in suits / original proceedings, which were pending as on coming into force of the Amending Act, on account of such discretion having been taken away by substitution of Section 20 by the Amendment Act?

It is a well established principle that for considering as to whether the discretion under un-substituted Section 20 is to be exercised or not, the Court would consider all the facts and circumstances upto the date of the passing of the decree.

In Satya Jain vs. Anis Ahmed Rushdie (2013) 8 SCC 131, the Hon'ble Supreme Court opined that the parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. It was further held that the ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case.

Thus, it is clear that the date on which the Court is called upon to apply Section 20 and decide as to whether discretion is to be exercised in favour of the Plaintiff or not, is the date on which the Court is required to pass a decree in the suit / original proceeding. In case the said provision is substituted by a new provision, prior to the date on which the Court is called upon to apply the said provision, only the substituted provision can apply.

A similar question had come up before the Hon'ble Supreme Court of India in State of Rajasthan vs. Arjun Singh &Ors. (2011) 9 SCC 115 in relation to the right of pre-emption. In the said judgment the Hon'ble Supreme Court held that in a suit for pre-emption, the pre-emptor must prove his right to pre-empt upto the date of the decree of the first Court. The Hon'ble Court further opined that although the plaintiff had such right of pre-emption as on the date of filing of the suit, however, since during the pendency of the suit, such right of pre-emption had been deleted by way of an Amendment, no such right was available to the Plaintiff.

Applying the said principle to the un-substituted Section 20 of the Specific Relief Act, 1963, it can be safely deducted that since the discretion under the said provision is to be exercised at the time of passing of the decree, on account of substitution of the said provision prior to the passing of the decree, the discretion under un-substituted Section 20, would no longer be available.

The question relating to applicability of substituted Section 20 came up for consideration before a Single Judge of the Hon'ble High Court of Allahabad in Mukesh Singh &Ors. Vs. Saurabh Chaudhary &Ors. MANU/UP/1893/2019. In the said judgment, after considering the legal position, including the applicability of Section 6 of the General Clauses Act, 1897, the Hon'ble Court held that the provisions of substituted Section 20 would govern any pending proceedings.

The question of applicability of substituted Section 14 to pending proceedings came up before another Single Judge of Hon'ble High Court of Calcutta in Church of North India vs. Ashoke Biswas MANU/WB/0960/2019. In the said judgment the Hon'ble Court held that the language of Section 14 indicated that the relevant date would be the date of the passing of the decree since the said provision death with enforcement of the contracts and the question of enforcement comes only on the date of the passing of the decree. Consequently, the Hon'ble Court held that since Section 14 had been substituted by the Amending Act, prior to the date of the passing of the decree, the substituted Section 14 would govern the said proceedings.

In light of the aforementioned legal principles and the judicial pronouncements, it can clearly be argued that the suits / original proceedings which had been instituted prior to coming into force of the Amendment Act and have remained pending hereafter, would be governed by substituted Section 10, 14 and 20 of the Specific Relief Act, 1963 and not by the un-amended provisions.

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