CONTRACT TO SELL OR LET PROPERTY BY ONE WHO NO TITLE NOT SPECIFICALLY ENFORCEABLY UNDER SPECIFIC RELIEF ACT

 INTRODUCTION

Law of Specific Relief in India was originally codified by Specific Relief Act, 1877. The provision of this enactment was considered by the Law Commission in its Ninth Report which was later replaced by the present act of 1963. The Specific Relief Act, 1963 deals with the remedies granted at the discretion of the court for the enforcement of individual civil rights. In case of breach of contract, the general remedy available to the aggrieved party is compensation or damages of loss suffered. For this, a civil suit is filed against the guilty party who had made the default in performance of its duty or obligation as per the terms of contract under the statutory provision of Section 73-75 of Indian Contract Act 1872.

However, sometimes pecuniary compensation does not satisfy the plaintiff so he may ask for specific relief. For example if somebody unlawfully dispossess a person without his consent having peaceful possession over the property then specific relief may enable him to have the possession of same property instead of claiming pecuniary compensation.

17. CONTRACT TO SELL OR LET PROPERTY BY ONE WHO HAS NO TITLE, NOT SPECIFICALLY ENFORCEABLE.

(1) A contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor-
(a) who, knowing not to have any title to the property, has contracted to sell or let the property;
(b) who, though he entered into the contract believing that he had a good title to the property, cannot at the time fixed by the parties or by the court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt.

(2) The provisions of sub-section (1) shall also apply, as far as may be, to contracts for the sale or hire of movable property.

Where a plaintiff seeks specific performance of a contract in writing, to which the defendant sets up a variation, the plaintiff cannot obtain the performance sought, except with the variation so set up, in the following cases, namely:
(a) where by fraud, mistake of fact or misrepresentation, the written contract of which performance is sought is in its terms or effect different from what the parties agreed to, or does not contain all the terms agreed to between the parties on the basis of which the defendant entered into the contract;
(b) where the object of the parties was to produce a certain legal result which the contract as framed is not calculated to produce;
(c) where the parties have, subsequently to the execution of the contract, varied its terms.

JUDGEMENT

Justice Subba Reddy Satti of the Andhra Pradesh High Court noted that as per Section 17, Specific Relief Act, the agreement of sale becomes unenforceable when the vendor and others have share in suit schedule property. The court while dismissing the appeal observed that no substantial questions of law are involved.

The first and second defendant entered into a contract of sale regarding plaint schedule property with the plaintiff and received an advance sale consideration of Rs 90,000/- with

balance sale consideration to be paid by the plaintiff in a span of 30 days else the plaintiff has to pay with interest. Though the plaintiff was ready to perform their part of the contract while the first and second defendants failed to do so. Also, the first and second defendants did not own the entire property since the third and fourth defendants had a share in it. So, the plaintiff filed a suit that sought specific performance of agreement of sale. Plaintiff filed a suit before the Trial Court whereby the court had granted alternative relief of refund of Rs 90,000/- with an interest of 24% per annum against the first and second defendant while dismissing the suit against the third and fourth defendant.

A First Appeal was filed before the First Appellate Court and the court confirmed the decision of the Trial Court. In a Second Appeal that had been filed by the plaintiff-appellant before the High Court, the court opined:

17. Ex.A-1 agreement of sale is unenforceable, since the defendants 1 and 2 had no absolute right and title over the suit schedule property to sell the same in view of Section 17 of the Specific Relief Act, 1963. The plaintiff being native of the village, though aware of the share of defendants 3 and 4 in the suit schedule property, entered into agreement with defendants 1 and 2.

SPECIFIC PERFORMANCE OF CONTRACT AND ITS ENFORCEABILITY

Specific performance means enforcement of exact terms of the contract. Under it the plaintiff claims for the specific thing of which he is entitled as per the terms of contract. For example, if A agrees to sell certain shares to B of a specific company which are limited in number and after the payment made by B, if A refuses to sell the shares then B is entitled to recovery of those shares.

According to Section10 of Specific Relief Act 1963 in the following conditions specific performance of the contract is enforceable:

  • When there exist no standard for ascertaining actual damage: It is the situation in which the plaintiff is unable to determine the amount of loss suffered by him. Where the damage caused by the breach of contract is ascertainable then the remedy of specific performance is not available to the plaintiff. For example, a person enters into a contract for the purchase of a painting of dead painter which is only one in the market and its value is unascertainable then he is entitled to the same.
  • When compensation of money is not adequate relief: In following cases compensation of money would not provide adequate relief:
  • Where the subject matter of the contract is an immovable property.
  • Where the subject matter of the contract is movable property and,
  • Such property or goods are not an ordinary article of commerce i.e. which could be sold or purchased in the market.
  • The article is of special value or interest to the plaintiff.
  • The article is of such nature that is not easily available in the market.
  • The property or goods held by the defendant as an agent or trustee of the plaintiff.

Contracts which cannot be specifically enforced

According to Section 14 of Specific Relief Act 1963, there are certain contracts which cannot be specifically enforced and these are:

  • Where compensation in money is an adequate relief: Here the court will not order specific performance of contract as it is expected that the plaintiff will bank upon the normal remedy for breach of contract.
  • Where a contract runs into minutes or numerous detail: These contracts includes contract which depends upon the personal qualification or the violation of the parties or is of such nature that the court cannot enforce specific performance of its material terms.
  • Contracts of determinable nature: Determinable contract means a contract which can be determined or revoked or put to an end by a party to the contract. For example in case of partnership at will any partner can retire by giving notice in writing to other partners and can dissolve the firm.
  • Contracts which involve the performance of continuous duty which court cannot supervise: Earlier under Specific Relief act, 1877 the continuous duty which court cannot supervise is considered over a period of 3 years which was omitted under Specific Relief Act, 1963 and no time limit restricted for the performance of a continuous duty. These include contract of appointment of employees for continuous service or contract to execute sale deed every year.
  • Contract of arbitration: According to Section 14(2)a contract to refer present or future differences to arbitration shall not be specifically enforceable.

REFERENCES

https://lawrato.com/indian-kanoon/the-specific-relief-act/section-17

https://www.pathlegal.in/S.-17-Specific-Relief-Act–Agreement-Of-Sale-Unenforceable-A-blog-2391097

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

We do conduct several Courses, Quizs and Webinars, Click here to register

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at secondinnings.hr@gmail.com

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Create a website or blog at WordPress.com

Up ↑

%d bloggers like this: