Time-sensitive specific performance contracts, prospective amendment rule, and limits on part-performance relief under the Specific Relief Act

A contract fixing a three-month period for payment of the balance consideration, with forfeiture on default, was treated as time-sensitive for limitation purposes, so Article 54 ran from the date fixed for performance and the suit filed after three years was barred. The substituted Section 10 of the Specific Relief Act, 1963 was held to be prospective because it introduced a substantive change and did not apply retrospectively. Specific performance was denied where the purchaser failed to prove continuous readiness and willingness within time. Section 12 could not be used to grant part-specific performance to overcome limitation, delay, or lack of contractual compliance.

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Issues: (i) whether the suit for specific performance was barred by limitation; (ii) whether the substituted Section 10 of the Specific Relief Act, 1963 operated retrospectively; (iii) whether the purchaser was entitled to specific performance; and (iv) whether Section 12 of the Specific Relief Act, 1963 could support a decree for part of the contract.

Issue (i): Whether the suit for specific performance was barred by limitation.

Analysis: The agreements fixed a three-month period for payment of the balance consideration and contemplated forfeiture on default. The limitation period under Article 54 of the Limitation Act, 1963 therefore ran from the date fixed for performance, not from later notices alleging refusal. The suit was instituted after expiry of the three-year period.

Conclusion: The suit was barred by limitation.

Issue (ii): Whether the substituted Section 10 of the Specific Relief Act, 1963 operated retrospectively.

Analysis: The amendment substituted a substantive rule governing enforcement of specific performance and altered the pre-existing discretionary regime. A substantive amendment creating new rights and obligations is not retrospective unless the legislature so provides expressly or by necessary implication.

Conclusion: The substituted Section 10 was prospective and did not apply to the transactions in question.

Issue (iii): Whether the purchaser was entitled to specific performance.

Analysis: On the facts, the purchaser did not establish continuous readiness and willingness within the contractual time frame. The agreement was treated as time-sensitive, the balance consideration was not paid within time, and the purchaser also failed to show possession in the manner asserted. In such circumstances, relief of specific performance could not be granted under the pre-amendment regime.

Conclusion: The purchaser was not entitled to specific performance.

Issue (iv): Whether Section 12 of the Specific Relief Act, 1963 could support a decree for part of the contract.

Analysis: Part-performance relief under Section 12 is available only within its statutory limits and cannot be used to cure default, delay, laches, or a claim already defeated by limitation. The purchaser's conduct did not satisfy the conditions for partial enforcement.

Conclusion: Section 12 could not be invoked to grant part-specific performance.

Final Conclusion: The challenge to the decree for specific performance succeeded, while the amount paid under the agreements was directed to be refunded with interest, and the matters stood finally disposed of on that basis.

Ratio Decidendi: A contractual stipulation fixing time for payment of consideration, coupled with forfeiture consequences, can make the contract time-sensitive for the purpose of limitation and specific performance; a substantive amendment to the law of specific performance is prospective unless clearly made retrospective; and part-specific performance cannot be granted to defeat limitation or to excuse lack of readiness and willingness.

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