Summary Judgment for Specific Performance cannot be granted if Readiness and Willingness is a Triable Issue

The dispute involves a failed 2004 Joint Venture (JV) between Appellant No. 1 (Aperam) and Respondent No. 1 (Jindal Saw).

Following management disputes, the parties entered a Settlement Agreement on 20.12.2013.

Under the agreement, Appellant No. 1 was to transfer its 19.29% shareholding in the JV (Respondent No. 2/IUP) to Respondent No. 1 for USD 50,000, while Respondent No. 2 was to pay Appellant No. 2 (Imphy) USD 450,000 for past gear supplies.

In 2016, Appellant No. 1 terminated the agreement, alleging the share price was fraudulently undervalued.

Respondent No. 1 sued for specific performance; Appellant No. 2 sued for recovery of USD 450,000.

The Single Judge granted a summary judgment under Order XIII-A CPC, decreeing specific performance in favour of Respondent No. 1 and ordering the money payment to Appellant No. 2.

Whether the purchase price of USD 50,000 for the share transfer was vitiated by misrepresentation or fraud.

Whether Respondent No. 1 established continuous "readiness and willingness" to perform the contract as required under Section 16(c) of the Specific Relief Act.

Whether the 2018 Amendment to the Specific Relief Act applies retrospectively to a suit instituted in 2016.

The Court applied Section 17 (Fraud), Section 18 (Misrepresentation), and the Exception to Section 19 of the Indian Contract Act, 1872, which prevents avoidance of a contract if the party had the means of discovering the truth with ordinary diligence.

Regarding pleadings, the Court strictly enforced Order VI Rule 4 CPC, requiring specific particulars for fraud.

For specific performance, it applied Section 16(c) of the Specific Relief Act, 1963.

Crucially, it relied on the Supreme Court ruling in Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt. Ltd., which established that the 2018 Amendment to the Specific Relief Act is substantive and operates prospectively from 01.10.2018.

The Court upheld the Single Judge’s rejection of the fraud plea because the Appellants failed to provide specific particulars—names, dates, and direct representations—required under Order VI Rule 4 CPC.

Documentary evidence proved the price was settled via negotiations in 2012, long before the disputed 2013 valuation report.

However, the Court reversed the summary judgment on specific performance. It found a triable issue regarding Respondent No. 1’s readiness and willingness; Respondent No. 1 had withheld the USD 50,000 payment since 2014 despite having all necessary transfer documents, erroneously linking the share transfer to a separate RBI permission required only for the USD 450,000 supply payment.

The Court determined that the Single Judge erred in applying the 2018 "mandatory" specific performance rule, as the suit was filed in 2016 and must be governed by the unamended Act, where the relief remains discretionary and equitable.

However, it set aside the summary decree for specific performance in CS(COMM) 1314/2016 because the issue of "readiness and willingness" necessitated a full trial.

It further set aside the money decree in CS(COMM) 45/2017, remanding both matters for fresh adjudication.

The Court held that the 2018 Amendment to the Specific Relief Act is prospective and does not apply to this case.

Case remanded for trial on the limited issue of readiness and willingness.