In Shreeram Builders v. Upendra Kantilal Thanawala (2026 INSC 1176), decided on 29 October 2026, the Supreme Court of India considered the validity of an arbitral award granting specific performance of an agreement concerning the development and transfer of interests in immovable property. The majority tribunal had directed the respondents to execute a conveyance in favour of the claimant against payment of an adjusted consideration. The Supreme Court declined to restore the award, holding that the tribunal had departed from the contractual arrangements governing the parties’ respective obligations. It concluded that the tribunal had effectively substituted its own terms for those agreed by the parties. The decision provides an opportunity to examine the availability of specific performance as a remedy in Indian arbitration and the extent to which an arbitral tribunal may order a party to perform its contractual obligations.
The power of an arbitral tribunal to grant specific performance
The power of an arbitral tribunal to grant specific performance is well established under Indian law. In Olympus Superstructures Pvt Ltd v. Meena Vijay Khetan ((1999) 5 SCC 651), the Supreme Court rejected the argument that specific performance could only be granted by a civil court as the Specific Relief Act, 1963 conferred the relevant discretion on courts. The Court held that a claim for specific performance concerns contractual rights and that neither the Specific Relief Act nor the Arbitration and Conciliation Act, 1996 prohibited an arbitral tribunal from granting the remedy. The fact that specific performance requires an assessment of the parties’ contractual rights and conduct does not reserve that determination to the courts. An arbitral tribunal may therefore direct a party to perform its contractual obligations rather than confining the successful claimant to damages.
The statutory position has since changed. Before the Specific Relief (Amendment) Act, 2018, Section 10 of the Specific Relief Act allowed specific performance to be granted at the court’s discretion where either no standard existed for ascertaining the actual damage caused by non-performance or monetary compensation would not afford adequate relief. The provision also presumed, unless the contrary was proved, that a breach of a contract to transfer immovable property could not be adequately remedied by compensation in money. Section 20 separately provided that the jurisdiction to decree specific performance was discretionary and that a court was not bound to grant relief merely because it was lawful to do so. The amended Section 10, which came into force on 1 October 2018, provides that specific performance shall be enforced, subject to Section 11(2), Section 14 and Section 16. The general discretion to refuse specific performance has therefore been removed, as has the requirement to establish the inadequacy of damages as a separate threshold for obtaining relief. The Delhi High Court has also considered the amendment in the context of arbitration. In Shon Randhawa v. Ramesh Vangal (FAO(OS)(COMM) 95/2020, decided on 5 November 2020), the Court observed that the amendment had removed the discretion previously vested in courts and arbitral tribunals to refuse specific performance. It nevertheless held that the subsequent change in the law could not affect the validity of an arbitral award made before the amendment.
The remedy remains subject to statutory restrictions. Section 14 excludes contracts where a party has already obtained substituted performance under Section 20, contracts involving continuous duties which cannot be supervised, contracts dependent on personal qualifications which cannot be enforced in their material terms, and contracts which are determinable by their nature. Section 16(c) further requires the claimant to establish that it has performed, or has always been ready and willing to perform, the essential terms of the contract falling to be performed by it. A claimant cannot obtain specific performance merely by establishing a breach by the other party. Its own performance, including compliance with payment obligations and conditions precedent, remains relevant.
The temporal application of the 2018 amendment remains an unresolved question in Indian law, particularly in relation to suits instituted before the amendment came into force but decided thereafter. In Annamalai v. Vasanthi (2025 INSC 1267), the Supreme Court considered the issue following the review of Katta Sujatha Reddy v. Siddamsetty Infra Projects, in which the Court had held that the amendment was prospective. The original judgment was subsequently recalled, but the review judgment did not determine whether the amended provisions would apply to suits instituted before 1 October 2018. In Annamalai, the Court applied the former provisions because the judgment under appeal had been delivered before the amendment came into force. The question of whether the amended regime applies to suits instituted before 1 October 2018 but decided thereafter therefore remains open and the legal position uncertain.
The limits of specific performance in Shreeram Builders
The dispute in Shreeram Builders arose from an agreement dated 6 August 2003 concerning the respondents’ undivided 2/9th share in three parcels of land in Thane. Although titled an “Agreement for Development”, the agreement contemplated both development and eventual conveyance of the respondents’ interest in the property. The consideration was calculated at ₹915 per square foot by reference to the floor space index (FSI) available when the municipal development plan was sanctioned. The agreement also provided for adjustments in consideration if additional FSI became available, the respondents’ adverse possession over part of the land was regularised or basements were constructed. Payment was to be made in instalments, and execution of the conveyance deed was conditional upon payment of all amounts due.
The majority tribunal treated the agreement as one for sale, declared its termination unlawful and granted specific performance. In doing so, it increased the agreed rate sixfold to account for the passage of time and escalation in land values. It also took account of payments allegedly made under an earlier memorandum of understanding, notwithstanding a clause in the 2003 agreement which expressly superseded previous agreements. The conveyance directed by the tribunal also included property which the agreement had expressly excluded. Although the award excluded the respondents’ 2/9th share in that property, it included the remaining 7/9th share belonging to other owners who were not parties to the arbitration.
The Supreme Court held that the tribunal had failed to give effect to the contractual sequence governing performance. Under Section 28(3) of the Arbitration Act, an arbitral tribunal must take account of the terms of the contract and applicable trade usages when determining the dispute. The Court considered that it was not necessary to determine conclusively whether the agreement was one for development or an agreement for sale. The obligations of the parties were clearly set out, and the sequence in which they were to be performed governed the dispute irrespective of the agreement’s classification. The tribunal had instead approached the matter as an ordinary suit for specific performance of an agreement to sell, overlooking the contractual conditions governing the parties’ respective obligations.
The treatment of the payment schedule was particularly relevant. Although the respondents had accepted the first six instalments despite delayed payment and without issuing the notice required under the agreement, the Supreme Court held that this had the effect of curing the delays in those instalments but did not extinguish the contractual time stipulations for subsequent payments. The seventh, eighth and ninth instalments were offered late by way of cheques, which the respondents returned. The tenth instalment, due on 1 March 2008, was never tendered by that date. The Court, therefore, found that the balance consideration had not been paid within the agreed timeframe. Further, the total consideration remained undetermined because the municipal plan had not been sanctioned and the additional amounts contemplated by the agreement could not yet be calculated. The conveyance obligation was expressly conditional upon payment of the full consideration. The tribunal could not replace that arrangement with a new rate of consideration and order conveyance before the agreed conditions had been fulfilled.
The Court also rejected the tribunal’s treatment of payments under the superseded memorandum of understanding and its inclusion of property outside the contractual arrangement. These were not independent matters of accounting or interpretation. They formed part of the tribunal’s reconstruction of the transaction and affected the rights which the award purported to enforce. The award therefore did not merely adopt a different interpretation of an ambiguous contractual provision, rather, it departed from the express terms of the agreement. The Court accordingly held that specific-performance award could not stand.
The Supreme Court’s decision concerned an agreement entered into in 2003 and an arbitral award made in 2011. It did not consider the amended Section 10 of the Specific Relief Act. Its reasoning on the grant of specific performance concerned the tribunal’s obligation under Section 28(3) of the Arbitration Act to give effect to the parties’ contractual arrangements. The Court nevertheless found that the respondents had themselves failed to comply with Clause 54 of the agreement by retaining the consideration received, which they were required to refund following termination. Exercising its powers under Article 142 of the Constitution, the Court directed repayment of the amounts received, together with simple interest at 9% per annum from the respective dates of payment until the date of refund.
Preparing for a claim for specific performance
Shreeram Builders demonstrates the importance of considering the availability of specific performance when structuring the underlying contractual agreement. Parties wishing to preserve this remedy should ensure that the contractual obligations are sufficiently precise to permit an order for performance. The agreement should identify the subject matter of the obligation, the consideration and the mechanism for calculating it, as well as the events upon which performance becomes due. Particular care should be taken with conditions precedent, payment schedules and termination provisions, since uncertainty or inconsistency in these terms may complicate the enforcement of the agreement.
Once a dispute arises, the claimant should preserve evidence of its compliance with the agreement, including payments, notices, approvals and any steps taken to perform its obligations. The relief sought should correspond to the contractual entitlement and should not require the tribunal to determine rights belonging to third parties or reconstruct the parties’ bargain. The claimant’s ability to demonstrate its own performance, alongside the other party’s failure to perform, will remain central to obtaining specific performance.
References:
Annamalai v. Vasanthi, 2025 INSC 1267
Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt Ltd, (2023) 1 SCC 355; 2022 INSC 865 (Supreme Court of India, 25 August 2022).
M/s Siddamsetty Infra Projects Pvt Ltd v. Katta Sujatha Reddy & Ors, 2024 INSC 861.
Olympus Superstructures Pvt Ltd v. Meena Vijay Khetan & Ors (1999) 5 SCC 651.
Shon Randhawa v. Ramesh Vangal & Ors, FAO(OS)(COMM) 95/2020 (Delhi High Court, 5 November 2020).
Shreeram Builders v. Upendra Kantilal Thanawala & Ors, 2026 INSC 1176
Arbitration and Conciliation Act, 1996, Section 28(3).
Constitution of India, Article 142.
Specific Relief Act, 1963 (Act 47 of 1963), Sections 10, 11(2), 14, 16 and 20.
Specific Relief (Amendment) Act, 2018.
