Specific Performance after 2018: Statutory Bars and Substituted Performance

Section 14 and other limits

The amended Section 14 excludes contracts where substituted performance has already been obtained under Section 20; contracts involving a continuous duty the court cannot supervise; contracts materially dependent on personal qualifications; and contracts that are determinable in nature.

Section 11(2) excludes a trustee's contract exceeding the trustee's powers or breaching the trust. Section 16 contains personal bars, including material non-performance or conduct contrary to the contract.

The earlier article mislocated the old discretionary rules and described vague “superior equity” and hardship tests as if they were the amended statutory scheme. For a subsequent transferee, the relevant protection in Section 19(b) concerns a transferee for value who paid in good faith and without notice of the original contract; it is not a general test that any defendant may invoke simply by asserting fairness.

What substituted performance actually means

Section 20 does not authorise a court to replace a promised property with a different property of similar value. The earlier example to that effect was incorrect.

Subject to the contract and the statutory conditions, a party suffering breach may arrange performance through a third party or through its own agency and recover the expenses and costs actually incurred from the party in breach.

Before undertaking that substituted performance, the affected party must give written notice of not less than thirty days, calling on the defaulting party to perform within the time specified. If the default continues, the affected party may arrange the performance. Recovery of the expenses requires that the substituted performance has actually been obtained.

Once that route has been used in accordance with Section 20, specific performance against the defaulting party is no longer available. Section 20(4) preserves the claim to compensation. This is materially different from a court rewriting the bargain or treating an impossible contract as automatically enforceable in another form.

Older transactions: correct the case history

The earlier guide cited Katta Sujatha Reddy v. Government of Andhra Pradesh. That was the wrong case name for the authority it discussed. The relevant 2022 decision was Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt. Ltd.

More importantly, the Supreme Court recalled its 25 August 2022 judgment in M/s Siddamsetty Infra Projects Pvt. Ltd. v. Katta Sujatha Reddy & Ors., 2024 INSC 861, and restored the High Court judgment. See paragraphs 52–53 of the official review decision dated 8 November 2024.

In Nagaraj V. Mylandla v. PI Opportunities Fund-I & Ors., decided on 25 March 2026, the Supreme Court expressly noted that recall when addressing reliance on the earlier decision. Read paragraph 86 of the official signed decision.

It is therefore unsafe to repeat the earlier guide's categorical contract-date rule while citing the 2022 decision as though it remained untouched. Equally, the recall should not be converted into a blanket assertion that every amendment applies retrospectively to every older dispute. For a pre-amendment transaction, identify the provision, procedural history and controlling authority relevant to the particular question.

Before choosing a remedy

Check the contract, the performance and breach dates, reciprocal obligations, the requested relief and any applicable limitation issue. Decide whether the intended route is specific performance, substituted performance or compensation, and examine how using one remedy affects another. The statutory notice and election consequences should be considered before commissioning replacement performance.

Correction — 20 October 2026: Replaced the invented alternative-property explanation of substituted performance with Section 20, restored the plaintiff’s burden and statutory bars, corrected the cited case name, and disclosed the 2024 recall and 2026 treatment of the earlier judgment.