Katta Sujatha Reddy v. Siddamsetty Infra: the prospectivity ruling reversed on review

The 2018 amendment and the question it raised

The Specific Relief (Amendment) Act, 2018, in force from 1 October 2018, changed the character of specific performance in Indian law. Before the amendment, specific performance of a contract was an equitable, discretionary remedy: a court might decline it even where the contract was valid and breach proved. The amendment substituted Section 10 so that specific performance became a general remedy — the norm rather than a discretion — subject to defined exceptions. That shift raised an immediate temporal question: does the new, mandatory regime apply to contracts entered into before 1 October 2018, or only to those concluded after that date?

Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt. Ltd. arose from a dispute over specific performance of an agreement to sell immovable property in Telangana, with part of the consideration paid. The legal hook that elevated the matter was the amendment, because the answer to the temporal question would shape the remedy available.

The temporal question is not a technicality. Under the pre-amendment regime, a defaulting seller could resist a decree by appealing to the court's equitable discretion — arguing, for instance, that damages would adequately compensate the buyer, or that performance would be inequitable in the circumstances. Under the amended regime, that discretion largely disappears: specific performance is the ordinary entitlement of a buyer who has performed his side, and the court's room to refuse it is confined to the statutory exceptions. For a contract signed before 1 October 2018, the difference between the two regimes can be decisive, which is why the prospectivity question generated litigation across the country and why a definitive answer mattered.

The 2022 judgment

The three-judge bench — N.V. Ramana, C.J.I., Krishna Murari and Hima Kohli, JJ. — decided on 25 August 2022 that the 2018 amendment is prospective. Its reasoning was that the change from a discretionary to a mandatory remedy is a substantive change affecting vested rights, not a mere procedural adjustment. A party who contracted before the amendment did so against a legal background in which specific performance was discretionary, and that background formed part of the rights and expectations attaching to the transaction. To apply the new mandatory regime to such a contract would alter those vested rights retrospectively. On that basis the bench treated 1 October 2018 as the reckoning date and disturbed the High Court's specific-performance relief.

For a time this was treated as a settled proposition, cited for the rule that the 2018 amendment does not reach back to pre-amendment contracts.

The distinction the bench relied on — substantive versus procedural — is the classic lever of retrospectivity analysis. A procedural change ordinarily applies to pending and future proceedings, because no party has a vested right in a particular mode of procedure; a substantive change, which alters rights or liabilities, ordinarily applies only prospectively unless the legislature clearly says otherwise. By classifying the shift from discretionary to mandatory specific performance as substantive, the 2022 bench placed it on the prospective side of that line. The classification was plausible but contestable, because one could equally argue that the remedy a court grants is a matter of the relief regime rather than of the parties' antecedent rights — and it was precisely this contestability that the review would later expose.

The 2024 review

The story did not end there. The aggrieved party sought review under Order 47 of the Code of Civil Procedure, and on 8 November 2024 a three-judge bench — D.Y. Chandrachud, C.J.I., J.B. Pardiwala and Manoj Misra, JJ. — allowed the review petitions and restored the Telangana High Court's judgment decreeing specific performance, proportionate to the consideration paid. This is a rare instance of a successful review on a reported specific-performance question.

The review bench found errors apparent on the face of the record in the 2022 judgment's appreciation of the contract and the parties' conduct — the threshold that Order 47 demands, since review is not a rehearing but a correction of patent error. On the merits, the Court applied the doctrine of lis pendens under Section 52 of the Transfer of Property Act, holding that the doctrine attaches even where a petition lies in the court registry in a defective state. The buyer who had shown readiness and willingness and paid part-consideration was entitled to a proportionate specific-performance decree, and the High Court's contrary-to-2022 result was reinstated.

A careful reading matters here. Commentary treats the review as restoring the High Court's result — which had effectively applied the amendment as if procedural — on the merits, without authoritatively re-settling the prospective-versus-retrospective question. The 2024 judgment is best read as reversing the outcome and correcting the appreciation of the record, while leaving the abstract prospectivity holding arguably open for a future bench rather than cleanly overruling it.

The review power itself deserves emphasis, because it explains why the 2024 bench did not simply rehear the appeal. Review under Order 47 is a narrow jurisdiction: it is not a route to re-argue the case or to substitute one permissible view for another, but a remedy confined to errors apparent on the face of the record, the discovery of new and important matter, or some other sufficient reason of like kind. For a review to succeed on a reported three-judge holding is therefore unusual; the petitioner had to show not merely that the 2022 view was debatable but that it suffered from a patent error. The 2024 bench found that threshold met in the way the earlier judgment had read the contract and weighed the parties' conduct, and it corrected that error while applying lis pendens to the transfers made during the pendency of the litigation. The outcome is a buyer's decree restored — but restored through the disciplined lens of review, not a free reconsideration.

What practitioners must take from it

Four propositions follow. First, the 2022 judgment held the 2018 Specific Relief amendment prospective — a substantive change to vested rights, reckoned from 1 October 2018. Second, that prospectivity ruling was reviewed and the result reversed in 2024, restoring the High Court's specific-performance decree. Third, lis pendens under Section 52 attaches even to a petition lying defectively in the registry. Fourth, a buyer who is ready and willing and has paid part-consideration may obtain a proportionate specific-performance decree.

The practical caution is unavoidable. Anyone citing Katta Sujatha Reddy for the proposition that the 2018 amendment is "settled prospective" must now confront the 2024 review at 2024 INSC 861, which restored the contrary result and is read as leaving the prospectivity question unsettled. A digest that stops at 2022 would mislead. The pairing is also a clean teaching example of the Order 47 review power exercised on a reported point — a reminder that even a three-judge holding on a substantive question can be corrected when the record discloses apparent error.

For the property and contract field, the case sits at the remedy end of the spectrum. Where Satyabrata Ghose governs when a contract is discharged by frustration, Katta Sujatha Reddy belongs to the question of when a court will compel a defaulting party to perform rather than leave the innocent party to damages — and the doctrine of lis pendens that the review applied is the mechanism by which that compelled performance survives intervening transfers. A buyer who sues for specific performance is protected against the seller defeating the suit by selling to a third party during its pendency, because the transferee takes subject to the result of the litigation. The 2024 judgment's reliance on Section 52 — extending the doctrine even to a petition lying defectively in the registry — closes a gap that a defaulting seller might otherwise have exploited, and it is on that combined footing of corrected merits and lis pendens that the High Court's decree was restored.

Related on Valkya

• Satyabrata Ghose v. Mugneeram Bangur: frustration as a rule of positive law
• Ravinder Kaur Grewal v. Manjit Kaur: adverse possession as a sword
• Esha Bhattacharjee: the condonation-of-delay checklist

Sources

1. LiveLaw — judgment PDF, Katta Sujatha Reddy v. Siddamsetty Infra Projects (25 Aug 2022): https://www.livelaw.in/pdf_upload/712-katta-sujatha-reddy-v-siddamsetty-infra-projects-pvt-ltd-25-aug-2022-432490.pdf
2. Supreme Court of India — 2024 review judgment PDF (8 Nov 2024): https://api.sci.gov.in/supremecourt/2022/30567/30567_2022_1_1504_56986_Judgement_08-Nov-2024.pdf
3. Verdictum — Siddamsetty Infra Projects v. Katta Sujatha Reddy, 2024 INSC 861, doctrine of lis pendens: https://www.verdictum.in/court-updates/supreme-court/siddamsetty-infra-projects-pvt-ltd-v-katta-sujatha-reddy-2024-insc-861-doctrine-of-lis-pendens-1557387
4. SCC Times — Specific Relief (Amendment) Act, 2018 and prospectivity: https://www.scconline.com/blog/