Court Decisions
Discretion of court to decree suit for specific performance of contract. How to exercise.
Rational behind provision of section. Jurisdiction to decree specific performance is
discretionary, and court is not bound to grant such relief merely because it is lawful to do
so, but discretion of court is not arbitrary but sound and reasonable, guided by Judicial
principles and capable of correction by court of appeal. It is further provided in S. 22 of
Specific Relief Act that where performance of contract would involve some hardships on
defendant, which he did not foresee, whereas his non-performance would involve no such
hardship on plaintiff, court would be exercising discretion properly by refusing to order
decree for specific performance. P.L.J.1996 Kar. 756 = 1995 CLC 1323.
Specific performance of agreement rests in judicial discretion, exercised according to the
principles of equity and with reference to the facts of the case - Such right should never be
granted unless the terms of the agreement sought to be enforced are clearly proved, or
where it is left in doubt whether the party against whom the relief is asked in fact made
such agreement 2002 CLC 218
Colson v. Thompson (US SC) 4L. ed 253 and William a. Carr v. Samuel H. Duval (US SC)
10 L. ed. 361 ref.
Seller in part performance of agreement handed over vacant and peaceful possession of
property and documents of title to purchaser upon execution of agreement--No other
consequence except only 10% of total sale consideration provided in agreement in event of
breach--Time mentioned in agreement, for its performance, was not essence of contract-Delay
simpliciter,
either
on
the
part
of
seller
or
purchaser,
held,
was
not
of
much
consequence
in
the
absence
of
prejudice
to
either
party--Court
could
not, therefore,
refuse
specific
performance
of
agreement
unless
exceptional
circumstances
were
shown
to
exist
which
had
caused
serious
prejudice
to
seller
on
account
of
delay
which
could
not be
compensated
except
by refusing
specific
performance.
1984
CLC
3462.
Discretion of contract to grant specific performance. Discretion of a court to grant specific
performance must be exercised an sound Judicial principles and not in arbitrary manner.
Court is bound to grant such relief merely because it is lawful. Court may decline to
exercise of granting specific performance of a contract, namely, (i) where circumstances
under which contract is made are much, as to give plaintiff an unfair advantage over
defendant, though there may not be fraud or misrepresentation on plaintiff's part and (ii)
where performance of contract would involve some hardship on defendant which he did not
fore see whereas its non-performance would involve such hardship on plaintiff. Court may
properly exercise discretion to decree specific performance where plaintiff had done
substantial acts or suffered losses in consequence of a contract capable of specific
performance. A party in breach of commitment cannot seek discretion of court in his favour
as it would amount to providing a premium on his on wrong. Plaintiff, in law and equity has
made out a strong case for specific performance of contract. He has approached the court
with clean hands and has always been ready and willing to perform his part of contract.
Suit decreed with costs. P.L.J.1996 Kar. 1072 = 1996 MLD 322.
As such relief is discretionary and when the contract is abandoned, the same cannot be
enforced at the instance of plaintiffs. 2002 CLC 218
Ashrafi (Pvt.) Limited and another v. Kar. Transport Syndicate Limited, Kar. and another
PLD 1973 Note 119 at p. 184 and NarainJan and others v. Muhammad Yunus AIR 1932
Lah.265 ref.
Time specified in decree for balance 'sale price. The relief of specific performance u/S. 22
being discretionary in nature, cannot be allowed, if one does not act with promptness and
prove with his conduct of bona fide to perform obligation in terms of agreement. The
learned trial court would in law, warn pre-hand while passing the decree for specific
performance that non-payment of the balance sale price, will ipso facto result in rescission
of the contract and dismissal of suit and while doing so, it did not commit any error of law.P.L.J.1998 Lah. 434 = 1998 CLC 55 = NLR 1998 Civil 103.
Court may properly exercise discretion to decree specific performance where the plaintiff
has done substantial acts or suffered losses in consequence of a contract capable of specific
performance. P.L.J.1996 Kar. 703 = 1996 MLD 322.
Entitlement of plaintiff to specific performance. Alleged power of attorney' executed by
vendor in favour of vendee was got registered at a place where-neither land in question
was situated nor party resided or worked for gain. Scribe of document had stated in Court
that he did not know vendor and he was unable to give even most rudimentary description,
of vendor. Provisions of S, 22 Specific Relief Act, 1877, stipulates that Jurisdiction to
decree specific performance of contract was discretionary. Court was not expected to
decree specific performance where circumstances in which contract was made were such as
to give plaintiff unfair advantage over vendor, even though there was no fraud or
misrepresentation on plaintiffs part. Plaintiff was thus not entitled to relief of specific
performance. Judgment and decree passed by trial Court was set aside and plaintiffs suit
was dismissed in circumstances. P.L.J.1999 Lah. 1770.
23. Who may obtain specific performance
Except as otherwise provided by this Chapter, the specific performance of a contract may
be obtained by-
(a) any party thereto;
(b) the representative-in-interest, or the principal, of any party thereto: Provided that,
where the learning, skill, solvency or any personal quality of such party is a material
ingredient in the contract, or where the contract provides that his interest shall not be
assigned, his representative-in-interest or his principal shall not be entitled to specific
performance of the contract, unless where his part thereof has already been performed;
(c) where the contract is a settlement on marriage, or a compromise of doubtful rights
between members of the same family, any person beneficially entitled thereunder;
(d) where the contract has been entered into be a tenant for life in due exercise of a
power, the remainder man;
(e) a reversioner in possession, where the agreement is a covenant entered into with his
predecessor-in-title and the reversioner is entitled to the benefit of such covenant;
(f) a reversioner in remainder, where the agreement is such a covenant, and the
reversioner is entitled to the benefit thereof and will sustain material injury by reason of its
breach;
(g) when a public company has entered into a contract and subsequently becomes
amalgamated with another public company, the new company which arise out of the
amalgamation;
(h) when the promoters of a public company have, before its incorporation, entered into a
contract for the purposes of the company, and such contract is warranted by the terms of
the incorporation, the company.
Court Decisions
Specific performance of agreement to sell:- Such suit was decreed on the basis of the
pleadings of the parties without attending to specific questions and important aspects of
the case and without going into the controversial questions of facts required to be proved
and decided on the basis of evidence - Neither the specific issues were framed on
important mixed questions of law and fact nor the parties produced the evidence essential
for decision of such questions o without proper decision of which, there could be no
effective adjudication of the dispute between the parties - Supreme Court, while pointing
out the important issues and aspects of the case to be noticed, remanded the case to the
Trial Court to enable the parties to produce further evidence on all issues including the
additional issues to be framed by the Trial Court on the questions raised by the Supreme
court. PLD 2003 SC 594
24. Personal bars to the relief
Specific performance of a contract cannot be enforced in favour of a person-
(a) Who could not recover compensation for its breach;
(b) Who has become incapable of performing, or violates, any essential term of the
contract that on his part remains to be performed;
(c) Who has already chosen his remedy and obtained satisfaction for the alleged breach of
contract; or
(d) Who, previously to the contract, had notice that a settlement of the subject-matter
thereof (though not found on any valuable consideration) had been made and was then in
force.
Illustrations .
to clause (a)
A, in the character of agent for B, enters into an agreement
the same;
(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;
(c) who, previous to entering into the contract, has made a settlement (though not
founded on any valuable consideration) of the subject-matter of the contract.
Illustrations
(a) A, without C‘s authority, contracts to sell to B an estate which A knows to belong to C.
A cannot enforce specific performance of this contract, even though C is willing to confirm
it.
(b) A bequeaths his land to trustees, declaring that they may sell it with the consent in
writing of B. B gives general prospective assent in writing to any sale which the trustees
may make. The trustees then enter into a contract with C to sell him the land. C refuses to
carry out the contract: The trustees cannot specifically enforce this contract, as, in the
absence of B‘s consent to the particular sale to C. the title which they can give C is, as the
law stands, not free from reasonable doubt.
(c) A, being in possession of certain land, contracts to sell it to Z. On inquiry in tarns out
(hat A claims the land as heir of B, who left the country several years before, and is
generally believed to be dead, but of whose death there is no sufficient proof. A cannot
compel Z specifically to perform the contract.
(d) A out of natural love and affection makes a settlement of certain property on his
brothers and their issue, and afterwards enters into a contract to sell the property to
stranger. A cannot enforce specific performance of this contract so as to override the
settlement, and thus prejudice the interest of the persons claiming under it.
Court Decisions
Principles.- Plaintiff was bound to implead the subsequent vendee in case his name was in
his knowledge - Such duty of the plaintiff was not a mere formality or exercise in routine
but a dire requirement of the circumstances - All such three parties were supposed to have
interacted among themselves with regard to the sale and purchase of one and the same
property - Actions and conduct of such persons individually were most likely to give rise to
certain facts which were co-related to the actions and conduct of all others - some facts
were alleged while others were withheld by all or some of the parties surrounding one
pivotal question in the dispute - PLD 2003 SC 639
26. Non-enforcement except with variation
Where a plaintiff seeks specific performance of a contract in writing, to which the defendant
sets up a variation, plaintiff cannot obtain the performance sought, except with the
variation so set up, in the following cases (namely):-
(a) where by fraud or mistake of fact the contract of which performance is sought is in
terms different from that which the defendant supposed it to be when he entered into it;
(b) where by fraud, mistake of fact, or surprise the defendant entered into the contract
under a reasonable misapprehension as to its effect as between himself and the plaintiff;
(c) where the defendant, knowing the terms of the contract and understanding its effect,
has entered into it relying upon some misrepresentation by the plaintiff, or upon some
stipulation on the plaintiff‘s part, which adds to the contract, but which he refuses to fulfill;
(d) where the object of the parties was to produce a certain legal result, which the contract
as framed is not calculated to produce;
(e) where the parties have subsequently to the execution of the contract; contracted to
vary it.
Illustrations
(a) A. B and C, sign a writing by which they purport to contract each to enter into a bond
to D for Rs. 1.000. In a suit by D. to make A. B and C separately liable, each to the extent
of Rs. 1.000 they prove that the word ‗each‘ was inserted by mistake; that the intention
was that they should give a joint bond for Rs. 1.000. D can obtain the performance soughtonly with the variation thus set up.
(b) A sues B to compel specific performance of a contract in writing to buy a dwelling
house. B proves that he assumed that the contract included an adjoining yard. and the
contract was so framed as to leave it doubtful whether the yard was so included or not.
The Court will refuse the contract, except with the variation set up by B.
(c) A contracts in writing to let to B a wharf, together with a strip of A‘s land delineated in
a map. Before signing the contract, B proposed orally that he should be at liberty to
substitute for the strip mentioned in the contract another strip of A‘s land of the same
dimensions, and to this A expressly assented. B then signed the written contract. A cannotobtain specific performance of the written contract, except with the variation set up by B.
(d) A and B enter into negotiations for the purpose of securing land for B for his life with
remainder to his issue. They execute a contract, the terms of which are found to confer an
absolute ownership on B. The contract so framed cannot he specifically enforced.
(e) A contracts in writing to let a house to B, for the certain term, at the rent of Rs. 100
per month, putting it first into tenable repair. The house turns out to be not worth
repairing; so with B‘s consent A pulls it down and erects a new house in its place B
contracting orally to pay him at Rs. 120 per mensem. B then sues to enforce specific
performance of the contract in writing, He cannot enforce it except with the variation madeby the subsequent oral contract.
27. Relief against parties and persons claiming under them by subsequent title
Except as otherwise provided by this Chapter, specific performance of a contract may be
enforced against-
(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract,
except a transferee for value who has paid his money in good faith and without notice of
the original contract;
(c) any person claiming under a title which, though prior to the contract and known to the
plaintiff, might have been displaced by the defendant;
(d) when a public company has entered into a contract and subsequently becomes
amalgamated with another public company, the new company which arises out of the
amalgamation;
(e) when the promoters of a public company have, before its incorporation, entered into a
contract, the company: provided that the company has ratified and adopted the contract
and the contract is warranted by the terms of the incorporation.
Illustrations to clause (b)
A contracts to convey certain land to B by a particular day. A dies intestate before that day
without having conveyed the land. B may compel A‘s heir or other representatives-ininterest
to perform the contract specifically.
A contracts to sell certain land to B for Rs. 5,000. A afterwards conveys the land for Rs.
6,000 to C, who has notice of the original contract. B may enforce specific performance of
the contract as against C.
A contracts to sell land to B for Rs. 5,000. B takes possession of the land. Afterwards A
sells it to C, for Rs. 6,000. C makes no inquiry of B relating to his interest in the land. B‘s
possession is sufficient to effect C with notice of his interest and he may enforce specific
performance of the contract against C.
A contracts, in consideration of Rs. 1,000 to bequeath certain of his lands to B.
Immediately after the contract A dies intestate, and C takes out administration to his
estate. B may enforce specific performance of the contract against C;
A contracts to sell certain land to B. Before the completion of the contract, A becomes a
lunatic and C is appointed his committee. B may specifically enforce the contract against C.
to clause (c)
A, the tenant for life of an estate, with remainder to B, in due exercise of a power
conferred by the settlement under which he is tenant for life, contracts to sell the estate to
C, who has notice of the settlement. Before the sale is completed A dies. C may enforce
specific performance of the contract against B.
A and B are joint tenants of land, his undivided moiety of which either may alienate in his
life-time but which, subject to that right, devolves on the survivor. A contracts to sell his
moiety to C and dies. C may enforce specific performance of the contract against B.
Court Decisions
Bona fide purchaser. What requirements a subsequent vendee must prove in order to
succeed on ground. Determination of. It would appear that in order to succeed on this
issue, subsequent vendees must establish, apart from payment of value, that.
-They acted in good faith;
-They had no notice of the original contract, and .
-In the above two aspects, they took reasonable care.
In order to prove above requirements, it would not be enough to say that mere denial in
this behalf by subsequent vendees would be enough to discharge onus. Even if it be
assumed that absence of notice could be affirmatively established by denial and relevant
negative evidence, other requirements will have to be established by positive material. It
would, be for the subsequent vendees to show that they act in good faith and with
reasonable care. It cannot be said that a mere "denial" in this behalf would be enough to
prove something positive in nature of reasonable case and good faith. P.L.J.2000 Lah.
1485.
Whether respondent was a transferee for value paid in good faith and without notice of
original contract. Trial court had held that according to appellant's own admission in crossexamination,
respondent
had
no knowledge
of
agreement
prior
to
purchase
of
suit
plot
by
him.
Factum
that
lesser
consideration
was shown
in
sale
deed
would
not
make
above
provision
of
Act
inapplicable.
This
fact
would
not
show
that
respondent
had
'knowledge
of
agreement
at time
of
purchasing
suit
plot
or
that
he had
"purchased
plot
without
valuable
consideration.
P.L.J.1994
SC
350
= PLD
1994
SC
674
= 1994
PSC
798.
Suit for specific performance of agreement to sell property- Vendor entered into
agreement to sell with plaintiff and also executed a registered power of attorney in his
favour authorising him to sell land - Vendor later on sold land in favour of vendees -
Plaintiff filed suit, which was contested by subsequent vendees claiming to be bona fide
transferees for consideration and without notice of plaintiff‘s rights - Both deeds had been
executed on the same date - Subsequent vendees could at most in exercise of due
diligence make a probe either into Revenue Record or Registration Office - Property in
Revenue Record was still in the name of vendor - Registered deed, if scrutinized, would not
have provided any opportunity to subsequent vendees to be alert as same was a simple
general power of attorney in favour of plaintiff - Real document to put subsequent vendees
on alert was agreement to sell, which had never been registered - Had the Parties executed
only one document and all contents of both documents been every occasion for subsequent
vendees to have become alert of rights of plaintiff-agent - Registered power of attorney
was silent that principal had allowed agent-plaintiff to get property transferred in his own
name - Subsequent vendees in such circumstances, despite exercise of due diligence, could
not have known or supposed to have known about existence of any agreement to sell
between original vendor and plaintiff - Subsequent vendees were, thus, bona fide
purchasers for consideration and without notice within contemplation of S. 27 of Specific
Relief Act, 1877 - No decree for specific performance could be granted in favour of plaintiff.
PLD 2003 SC 494
Suit decreed by trial Court, set aside in appeal. Whether Judgment rendered by Addl.
District Judge was no Judgment in eye of law. Suit was for specific performance. It was
pleaded by plaintiff that vendor proceeded to sell plot to defendant No. 2 during
subsistence of agreement to sell in his favour while defendant No. 2 inspite of notice of
agreement purchased same, therefore, he had prayed for setting aside of sale deed.
Appellate Court did not advert to legal question as to whether appellant was purchaser for
consideration without notice of previous agreement to sell or not? District Judge accepted
appeal on sole ground that he would prefer registered sale deed over mere agreement to
sell. Sale deed could not be preferred in view of provisions of Section 27of Specific Relief
Act. It is clear from Judgment of Addl. District Judge that he even did not go through
Judgment of Trial Court and precedents referred to by him otherwise it was not possible to
record findings. He has failed to decide appeal by speaking Judgment. He has neither
referred to evidence nor arguments nor issues in clear violation of provisions of Order XLI
and XX C.P.C.. Learned Addl. District Judge has neither noted points argued before him by
parties nor disposal of issues with reference to evidence. None of issues framed by trial
court was given up by either of parties, therefore, he was under obligation to decide all
.issues. Judgement rendered by Addl. District Judge is not adjudication in eye of law.
Impugned Judgment/decree would be deemed pending on file of District Judge who shall
decide afresh in accordance with law. P.L.J.1998 Lah. 1062 = 1999 CLC 62.
Transfer of property by ostensible owner. When a person ostensibly being owner transfer
property for consideration and such transfer is questioned on the ground that transferor
had no legal power to vacate same, transferee may be exempted from its consequences,
provided, he establishes that he has taken reasonable care to ascertain power of transferor
and has acted in good faith. This is known as "caveat emptor" rule and requires transferee,
apart from acting in good faith, to take all reasonable care to apprise himself of any defect
in transferor's title or clog on his power to effect transfer. On the other 4and Section 27-B
of Specific Relief Act, 1877 contemplates that equity of specific performance may not be
enforced against a person who had, subsequently, purchased property and paid his money
in good faith and without notice of original contract. Duty to ascertain as contemplated by
S. 41 of Transfer of Property Act, 1882, is not stipulated in Specific Relief Act, 1877.
Burden on transferee under Specific Relief Act, 1877 is less onerous and specific
performance against him can be refused if it is shown that he acted in good faith and was
not aware of pre-existing equity in favour of other person. P.L.J.1999 Kar. 633 = 1999 CLC
296.
Relief by way of cancellation of sale-deed not sought by petitioner-Both Courts below had
not suited plaintiff on ground that he had not sought relief by way of cancellation of saledeed
in respect of property in question,which had been got registered in favour of subsequent vendee
(respondent)-Such findings being in derogation of S. 27 of Specific Relief Act1877, were not
maintainable,PLD 2003 Lah.49
27-A. Specific performance in case of part performance of contract to lease
Subject to the provisions of this Chapter where a contract to lease immovable property is
made in writing signed by the parties thereto or on their behalf, either party may,
notwithstanding that the contract, though required to be registered has not been
registered, sue the other for specific performance of the contract if.-
(a) where specific performance is claimed by the lessor, he has delivered possession of the
property to the lessee in part performance of the contract; and
(b) where specific performance is claimed by the lessee, he has in part performance of the
contract, taken possession of the property, or, being already in possession, continues in
possession in part performance of the contract, and has done some act in furtherance of
the contract:
Provided that nothing in this section shall effect the rights of a transferee for
consideration who has no notice of the contract or of the part performance thereof.
This section applied to contracts to lease executed after the first day of April, 1930.
Court Secisions
Transferee of suit property in good faith:-- defendant who all along projected his case
on the basis of registered sale-deed in respect of suit property, had clamed that he was the
transferee of suit property in good faith without notice of previous agreement of sale
property in good faith without notice of previous agreement of sale allegedly executed
earlier in favour of plaintiff on the basis of which plaintiff had founded his case - Specific
performance of contract could be enforced under S. 27(b), Specific Relief Act, 1877 against
any other person claiming under him by a title arising subsequently to the contract, except
a transferee for value who had paid money in good faith and without notice of original
contract - Specific performance could not be enforced against defendant it he
demonstrated that he was a transferee in good faith without notice of the original contract,
Specific performance could not be enforced against defendant if he demonstrated that he
was a transferee in god faith without notice of the original contract, allegedly executed in
favour of plaintiff earlier - Burden to prove such fact, heavily lay on the defendant. 2004 M
L D 251
28. What parties cannot be compelled to perform
Specific performance of a contract cannot be enforced against a party thereto in any of the
following cases:-
(a) if the consideration to be received by him is so grossly inadequate, with reference to
the state of things existing at the date of the contract, as to be either by itself or coupled
with other circumstances evidence of fraud or undue advantage taken by the plaintiff;
(b) if his assent was obtained by the misrepresentation (whether willful or innocent),
concealment, circumvention or unfair practices, of any party to whom performance would
become due under the contract, or by any promise of such party which has not been
substantially fulfilled;
(c) if his assent was given under the influence of mistake of fact, misapprehension or
surprise: Provided that, when the contract provides for compensation in case of mistake,
compensation may be made for a mistake within the scope of such provision, and the
contract may be specifically enforced in other respects if proper to be so enforced.
Illustrations to clause (c)
A, one of two executors, in the erroneous belief that he had the authority of his co-
executor enters into an agreement for the sale to B of the testator‘s property. B cannot
insist on the sale being completed.
A directs an auctioneer to sell certain land: A afterwards revokes the auctioneer‘s authority
as to 20 bighas of this land, but the auctioneer inadvertently sells the whole to B, who has
no notice of the revocation. B cannot enforce specific performance of the agreement.
29. Bar of suit for breach after dismissal
The dismissal of a suit for specific performance of a contract or part thereof shall bar the
plaintiff‘s right to sue for compensation for the breach of such contract or part, as the case
may be.
Court Decisions
Appellants having purchased property in dispute from respondents 5 to 16 during pendency
of suit have stepped into their shoes and agreement for sale in favour of
plaintiffs/respondents 1 to 4 can be specifically enforced as against them in terms of Section 29of Act which ordains that not only parties to agreement but also their successors
are bound by it. Only exception in this behalf is that of a bonafide purchaser for value
without notice of existing agreement, which is not available to appellants. Appellants being
successors of respondents 1 to 4, are bound, to convey property to respondents/plaintiffs
in specific performance of agreement which binds them also. P.L.J.1995 Lah. 468 = PLD
1995 Lah. 255.
30. Application of preceding sections to awards and testamentary directions to
execute settlements
The provisions of this Chapter as to contracts shall, mutates mutandis, apply to awards and
to directions in a will or codicil to execute a particular settlement.
31. When instrument may be rectified
When, through fraud or a mutual mistake of the parties, a contract or other instrument in
writing does not truly express their intention, either party, or his representative-in-interest,
may institute a suit to have the instrument rectified; and if the Court find it clearly proved
that there has been fraud or mistake in framing the instrument, and ascertain the real
intention of the parties in executing the same, the Court may in its discretion rectify the
instruments so as to express that intention, so far as this can be done without prejudice to
rights acquired by third persons in good faith and for value.
32. Presumption as to intent of parties
For the purpose of rectifying a contract in writing, the Court must be satisfied that all the
parties thereto intended to make an equitable and conscientious agreement.
33. Principles of rectification
In rectifying a written instrument, the Court may inquire what the instrument was intended
to mean, and what were intended to be its legal consequences, and is not confined to the
inquiry what the language of the instrument was intended to be.
34. Specific enforcement of rectified contract
A contract in writing may be first rectified and then, if the plaintiff has so prayed in his
plaint and the Court thinks fit, specifically enforced.
Illustration
A contracts in writing to pay his attorney. B, a fixed sum in lieu of cost. The
contract contains mistakes as to the name and rights of the client, which if
construed strictly, would exclude B from all rights under it. B is entitled, if
the Court thinks fn. to have it rectified, and to an order for payment of the
sum. as if at the time of its execution it had expressed the intention of the
parties.
35. When rescission may be adjudged
Any person interested in a contract in writing, may sue to have it rescinded, and such
rescission may be adjudged by the Court in any of the following cases, namely:-
(a) where the contract is voidable or terminable by the plaintiff;
(b) where the contract is unlawful for causes not apparent on its face, and the defendant is
more to blame than the plaintiff;
(c) where a decree for specific performance of a contract of sale, or of a contract to take a
lease, has been made, and the purchaser or lessee makes default in payment of the
purchase-money or other sums which the Court has ordered him to pay.
When the purchaser or lessee is in possession of the subject-matter, and the Court finds
that such possession is wrongful, the Court may also order him to pay to the vendor or
lessor the rents and profits, if any, received by him as such possessor.
In the same case, the Court may, by order in the suit in which the decree has been made
and not complied with, rescind the contract, either so far as regards the party in default, or
altogether as the justice of the case may require.
Illustrations
to clause (a)—
A sells a field to B. There is right of way over the field of which A has direct personal
knowledge, but which he conceals from B. B is entitled to have the contract rescinded.
to clause (b)-
A, an attorney, induces his client, B, a Hindu widow to transfer property to him for the
purpose of defrauding B‘s creditor. Here the parties are not equally in fault, and B is
entitled to have the instrument of transfer rescinded.
Court Decisions
Decreed subject to condition that purchase price shall be deposited in court
within a specific period. Court has power to extend time or not. Where trial court has
decreed suit for specific performance of contract subject to condition that purchase price
shall, be deposited in court within a specific time and also ordered that if that money is not
put in within that time, suit shall stand dismissed, court has no power to extend time as in
such a case; that decree by court is final and self-operative . and in case of default of
payment of purchase price; mandate of court tantamounts to rescission of contract. In
such a case recourse to sections 148 and 151 CPC will not be permissible. Court will not
allow plea for extention of time if it finds that it will occasion a wrong to other side. Further
more, in order to succeed in an action for specific performance, plaintiff led to show that he
had been willing and ready to perform his part of contract.-P.L.J. 1997Lah. 896 = PLD
1997 Lah. 177.
Suit for specific performance of agreement to sell immovable property - court while passing
decree in such suit fixed time for deposit of sale price and provided consequences of
dismissal of suit in case of failure to comply with the decree - Extension of such time -
Powers of Court - Scope - Such decree was not preliminary, but to all intents and purposes
was final in nature - court had no jurisdiction to extend the time under S. 148, C.P.C., on
principle of becoming functus officio - Such rule was not absolute, but subject to certain
exceptions including situations beyond control of the decree-holder to comply with decree
or the act of court which impeded compliance thereof - When judgment and decree was
corrected, then time provided in original decree for such deposit would start from the time,
when the correction was allowed - Principles and exceptions illustrated. PLD 2004 Lah.
103
36. Rescission for mistake
Rescission of a contract, in writing cannot to be adjudged for mere mistake, unless the
party against whom it is adjudged can be restored to substantially the same position as it
the contract had not been made.
37. Alternative prayer for rescission in suit for specific performance
A plaintiff instituting a suit for the specific performance of a contract in writing may pray in
the alternative that, if the contract cannot be specifically enforced, it may be rescinded and
delivered up to be cancelled; and the Court, if it refuses to enforce the contract specifically,
may direct it to be rescinded and delivered up accordingly.
38. Court may require party rescinding to do equity
On adjudging the rescission of a contract, the Court may require the party to whom such
relief is granted to make any compensation to the other which justice may required.
39. When cancellation may be ordered
Any person against whom a written instrument is void or void able, who has reasonable
apprehension that such instrument, if left outstanding, may cause him serious injury, may
sue to have it adjudged void or voidable; and the Court, may, in its discretion, so adjudge
it and order it to be delivered up and cancelled.
If the instrument has been registered under the Indian Registration Act, the Court shall
also send a copy of its decree to the officer in whose office the instrument has been so
registered; and such officer shall note on the copy of the instrument contained in his books
and fact of its cancellation.
Illustrations
(a) o A, the owner of a ship, by fraudulently representing her to be sea worthy, induces B,
an underwriter, to insure her. B may obtain the cancellation of the policy.
(b) A conveys land to B, who bequeaths it to C and dies. Thereupon D gets possession of
the land and produces -a forged instrument stating that the conveyance was made to B in
trust for him. C may obtain the cancellation of the forged instrument.
(c) A, representing that the tenants on his land were all at will, sells it to B, and conveys to
him by an instrument, dated the 1st January, 1877. Soon after that day, A fraudulently
grants to C a ‗lease of part of the lands, dated the 1st October, 1876, and procures the
lease to be registered under the Registration Act. B may obtain the cancellation of this
lease.
(d) A agrees to sell and deliver a ship to B, to be paid for by B‘s acceptance of four bills of
exchange, for sums amounting to Rs. 30,000 to be drawn by A on B. The bills are drawn
and accepted, but the ship is not delivered according to the agreement. A sues B on one of
the bills. B may obtain the cancellation of all the bills.
Court Decisions
Cancellation of gift deed:-- Donor (when he was alive) appeared as witness and denied
execution of gift deed - Trial Court dismissed the suit, but appellate Court decreed the
same -- No evidence was available on record regarding intention of donor to declare gift -
deed did not show as to why donor in presence of his wife and son had made gift in favour
of the defendants - Defendants had neither rendered any service to donor nor had such
close relations with donor for which preference could be given to them donor his wife and
son - Defendants had failed to prove that donor had appeared before Court to prove its
execution - Gift deed contained general words that possession had been delivered to
defendants, when in fact they were already in possession as tenants of donor - Gift deed,
in such a situation, should have mentioned that defendants already retaining possession as
tenants would now retain the same as owners - Such fact proved that possession in reality
had not been transferred to defendants on basis of gift deed, rather they were retaining
possession as tenants of donor - Appellate Court had rightly set aside gift deed in
circumstances. PLD 2003 Azad J&K 25
Suit for cancellation of registered gift deed in respect of land in question, in favour of one
daughter by donor while leaving out his sole son and other daughters---Donor's son being
in possession, seeking cancellation of such gift deed, by denying factum of gift and
claiming gift deed to be a fabricated transaction---Plaintiffs suit was dismissed by trial
Court but decreed by Appellate .Court---Validity---Donor was old and aged person and
illiterate---Burden to prove execution of gift deed by him and its valid registration at his
instance lay upon donee who did not appear in witness box to depose about voluntary
execution of gift deed by her father and its registration at his instance---Neither stamp
vendor nor scribe of gift deed were produced in evidence---None from the village where
land in question, was situated and donor resided was associated with execution and
registration of gift deed ---Lambardar of the village where land was situated was also
excluded from the transaction in question---Attesting witnesses of gift deed were from a
far-off village--*Appellate Court had disbelived their testimony on proper scan of
evidence--*No other relation of donor had accompanied him at the time of execution and
registration of alleged gift---No good reason was shown for donor to prefer one daughter to
his sole son and three other daughters---Transaction in question, was against ordinary
human conduct ---Plaintiff was .in possession of land in question, during lifetime of his
father and even after his death---In case of denial of execution defendant (daughter) who
had to prove voluntary nature of transaction had failed to prove that same was voluntary
and its execution and registration was at the instance of donor---Gift in question was, thus,
not binding on plaintiff in circumstances. 1995 C L C 7
Respondent's plea was that parties had agreed to execute lease agreement, but appellant
in connivance with petition-writer and marginal witnesses got it executed as agreement to
sell ---Respondent also filed suit for cancellation of agreement to sell being based on fraud
and ineffective on his rights---Both the suits were consolidated---Trial Court decreed
appellant's suit and dismissed respondent's suit holding that appellant had proved by
examining one marginal witness and scribe of agreement that it was executed as
agreement to sell---Respondent's appeal was dismissed by Appellate Court, but his revision
petition was accepted by High Court----Respondent had neither denied execution of
agreement nor appellant's possession over suit-land nor had claimed relief for getting its
possession from appellant in suit for cancellation of agreement--*Neither any jurisdictional
defect nor non-reading and misreading of evidence could be pointed out in
judgments/decrees passed by Trial Court and Appellate Court---High Court had interfered
with such concurrent findings without indicating misreading or non-reading of evidence or
the same being in any way in violation of law---High Court had granted relief to respondent
on the ground not raised either in written statement or during trial--- S. C. accepted
appeals with costs and set aside judgment of High Court. as a result of which
judgments/decrees of Appellate Court were restored. P L D 2002 S. C. 293
Suit had been filed for cancellation of sale deed and possession but there was no prayer
clause to the effect of cancellation of sale-deed. It would not be appropriate however, not
to grant relief of cancellation of sale-deed and possession thereof, merely on the ground
that plaintiff, had not paid Court-fee. Plaintiffs would be required to pay Court fee, if any,
on such relief at the time of execution of decree. Trial Court had rightly rejected contention
of defendants as to maintainability of suit on the ground that mother of minors had not
filed affidavit in respect of minors. Finding of Trial Court was Just and proper in holding
that such being simple irregularities plaintiffs could not be non-suited on such grounds.
P.L.J.2000 Kar. 3.
Suit for cancellation of power of attorney and sale-deed---Defendant on the basis of
power of attorney allegedly executed by' one of the brothers of plaintiff, had executed
sale-deed in respect of property of plaintiff and her brothers in favour of his sons---Plaintiff
being sister of alleged executant of power of attorney had stated on oath that she or her
relatives having not heard of him for more than ten years before filing of the suit, he would
Discretion of court to decree suit for specific performance of contract. How to exercise.
Rational behind provision of section. Jurisdiction to decree specific performance is
discretionary, and court is not bound to grant such relief merely because it is lawful to do
so, but discretion of court is not arbitrary but sound and reasonable, guided by Judicial
principles and capable of correction by court of appeal. It is further provided in S. 22 of
Specific Relief Act that where performance of contract would involve some hardships on
defendant, which he did not foresee, whereas his non-performance would involve no such
hardship on plaintiff, court would be exercising discretion properly by refusing to order
decree for specific performance. P.L.J.1996 Kar. 756 = 1995 CLC 1323.
Specific performance of agreement rests in judicial discretion, exercised according to the
principles of equity and with reference to the facts of the case - Such right should never be
granted unless the terms of the agreement sought to be enforced are clearly proved, or
where it is left in doubt whether the party against whom the relief is asked in fact made
such agreement 2002 CLC 218
Colson v. Thompson (US SC) 4L. ed 253 and William a. Carr v. Samuel H. Duval (US SC)
10 L. ed. 361 ref.
Seller in part performance of agreement handed over vacant and peaceful possession of
property and documents of title to purchaser upon execution of agreement--No other
consequence except only 10% of total sale consideration provided in agreement in event of
breach--Time mentioned in agreement, for its performance, was not essence of contract-Delay
simpliciter,
either
on
the
part
of
seller
or
purchaser,
held,
was
not
of
much
consequence
in
the
absence
of
prejudice
to
either
party--Court
could
not, therefore,
refuse
specific
performance
of
agreement
unless
exceptional
circumstances
were
shown
to
exist
which
had
caused
serious
prejudice
to
seller
on
account
of
delay
which
could
not be
compensated
except
by refusing
specific
performance.
1984
CLC
3462.
Discretion of contract to grant specific performance. Discretion of a court to grant specific
performance must be exercised an sound Judicial principles and not in arbitrary manner.
Court is bound to grant such relief merely because it is lawful. Court may decline to
exercise of granting specific performance of a contract, namely, (i) where circumstances
under which contract is made are much, as to give plaintiff an unfair advantage over
defendant, though there may not be fraud or misrepresentation on plaintiff's part and (ii)
where performance of contract would involve some hardship on defendant which he did not
fore see whereas its non-performance would involve such hardship on plaintiff. Court may
properly exercise discretion to decree specific performance where plaintiff had done
substantial acts or suffered losses in consequence of a contract capable of specific
performance. A party in breach of commitment cannot seek discretion of court in his favour
as it would amount to providing a premium on his on wrong. Plaintiff, in law and equity has
made out a strong case for specific performance of contract. He has approached the court
with clean hands and has always been ready and willing to perform his part of contract.
Suit decreed with costs. P.L.J.1996 Kar. 1072 = 1996 MLD 322.
As such relief is discretionary and when the contract is abandoned, the same cannot be
enforced at the instance of plaintiffs. 2002 CLC 218
Ashrafi (Pvt.) Limited and another v. Kar. Transport Syndicate Limited, Kar. and another
PLD 1973 Note 119 at p. 184 and NarainJan and others v. Muhammad Yunus AIR 1932
Lah.265 ref.
Time specified in decree for balance 'sale price. The relief of specific performance u/S. 22
being discretionary in nature, cannot be allowed, if one does not act with promptness and
prove with his conduct of bona fide to perform obligation in terms of agreement. The
learned trial court would in law, warn pre-hand while passing the decree for specific
performance that non-payment of the balance sale price, will ipso facto result in rescission
of the contract and dismissal of suit and while doing so, it did not commit any error of law.P.L.J.1998 Lah. 434 = 1998 CLC 55 = NLR 1998 Civil 103.
Court may properly exercise discretion to decree specific performance where the plaintiff
has done substantial acts or suffered losses in consequence of a contract capable of specific
performance. P.L.J.1996 Kar. 703 = 1996 MLD 322.
Entitlement of plaintiff to specific performance. Alleged power of attorney' executed by
vendor in favour of vendee was got registered at a place where-neither land in question
was situated nor party resided or worked for gain. Scribe of document had stated in Court
that he did not know vendor and he was unable to give even most rudimentary description,
of vendor. Provisions of S, 22 Specific Relief Act, 1877, stipulates that Jurisdiction to
decree specific performance of contract was discretionary. Court was not expected to
decree specific performance where circumstances in which contract was made were such as
to give plaintiff unfair advantage over vendor, even though there was no fraud or
misrepresentation on plaintiffs part. Plaintiff was thus not entitled to relief of specific
performance. Judgment and decree passed by trial Court was set aside and plaintiffs suit
was dismissed in circumstances. P.L.J.1999 Lah. 1770.
23. Who may obtain specific performance
Except as otherwise provided by this Chapter, the specific performance of a contract may
be obtained by-
(a) any party thereto;
(b) the representative-in-interest, or the principal, of any party thereto: Provided that,
where the learning, skill, solvency or any personal quality of such party is a material
ingredient in the contract, or where the contract provides that his interest shall not be
assigned, his representative-in-interest or his principal shall not be entitled to specific
performance of the contract, unless where his part thereof has already been performed;
(c) where the contract is a settlement on marriage, or a compromise of doubtful rights
between members of the same family, any person beneficially entitled thereunder;
(d) where the contract has been entered into be a tenant for life in due exercise of a
power, the remainder man;
(e) a reversioner in possession, where the agreement is a covenant entered into with his
predecessor-in-title and the reversioner is entitled to the benefit of such covenant;
(f) a reversioner in remainder, where the agreement is such a covenant, and the
reversioner is entitled to the benefit thereof and will sustain material injury by reason of its
breach;
(g) when a public company has entered into a contract and subsequently becomes
amalgamated with another public company, the new company which arise out of the
amalgamation;
(h) when the promoters of a public company have, before its incorporation, entered into a
contract for the purposes of the company, and such contract is warranted by the terms of
the incorporation, the company.
Court Decisions
Specific performance of agreement to sell:- Such suit was decreed on the basis of the
pleadings of the parties without attending to specific questions and important aspects of
the case and without going into the controversial questions of facts required to be proved
and decided on the basis of evidence - Neither the specific issues were framed on
important mixed questions of law and fact nor the parties produced the evidence essential
for decision of such questions o without proper decision of which, there could be no
effective adjudication of the dispute between the parties - Supreme Court, while pointing
out the important issues and aspects of the case to be noticed, remanded the case to the
Trial Court to enable the parties to produce further evidence on all issues including the
additional issues to be framed by the Trial Court on the questions raised by the Supreme
court. PLD 2003 SC 594
24. Personal bars to the relief
Specific performance of a contract cannot be enforced in favour of a person-
(a) Who could not recover compensation for its breach;
(b) Who has become incapable of performing, or violates, any essential term of the
contract that on his part remains to be performed;
(c) Who has already chosen his remedy and obtained satisfaction for the alleged breach of
contract; or
(d) Who, previously to the contract, had notice that a settlement of the subject-matter
thereof (though not found on any valuable consideration) had been made and was then in
force.
Illustrations .
to clause (a)
A, in the character of agent for B, enters into an agreement
the same;
(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;
(c) who, previous to entering into the contract, has made a settlement (though not
founded on any valuable consideration) of the subject-matter of the contract.
Illustrations
(a) A, without C‘s authority, contracts to sell to B an estate which A knows to belong to C.
A cannot enforce specific performance of this contract, even though C is willing to confirm
it.
(b) A bequeaths his land to trustees, declaring that they may sell it with the consent in
writing of B. B gives general prospective assent in writing to any sale which the trustees
may make. The trustees then enter into a contract with C to sell him the land. C refuses to
carry out the contract: The trustees cannot specifically enforce this contract, as, in the
absence of B‘s consent to the particular sale to C. the title which they can give C is, as the
law stands, not free from reasonable doubt.
(c) A, being in possession of certain land, contracts to sell it to Z. On inquiry in tarns out
(hat A claims the land as heir of B, who left the country several years before, and is
generally believed to be dead, but of whose death there is no sufficient proof. A cannot
compel Z specifically to perform the contract.
(d) A out of natural love and affection makes a settlement of certain property on his
brothers and their issue, and afterwards enters into a contract to sell the property to
stranger. A cannot enforce specific performance of this contract so as to override the
settlement, and thus prejudice the interest of the persons claiming under it.
Court Decisions
Principles.- Plaintiff was bound to implead the subsequent vendee in case his name was in
his knowledge - Such duty of the plaintiff was not a mere formality or exercise in routine
but a dire requirement of the circumstances - All such three parties were supposed to have
interacted among themselves with regard to the sale and purchase of one and the same
property - Actions and conduct of such persons individually were most likely to give rise to
certain facts which were co-related to the actions and conduct of all others - some facts
were alleged while others were withheld by all or some of the parties surrounding one
pivotal question in the dispute - PLD 2003 SC 639
26. Non-enforcement except with variation
Where a plaintiff seeks specific performance of a contract in writing, to which the defendant
sets up a variation, plaintiff cannot obtain the performance sought, except with the
variation so set up, in the following cases (namely):-
(a) where by fraud or mistake of fact the contract of which performance is sought is in
terms different from that which the defendant supposed it to be when he entered into it;
(b) where by fraud, mistake of fact, or surprise the defendant entered into the contract
under a reasonable misapprehension as to its effect as between himself and the plaintiff;
(c) where the defendant, knowing the terms of the contract and understanding its effect,
has entered into it relying upon some misrepresentation by the plaintiff, or upon some
stipulation on the plaintiff‘s part, which adds to the contract, but which he refuses to fulfill;
(d) where the object of the parties was to produce a certain legal result, which the contract
as framed is not calculated to produce;
(e) where the parties have subsequently to the execution of the contract; contracted to
vary it.
Illustrations
(a) A. B and C, sign a writing by which they purport to contract each to enter into a bond
to D for Rs. 1.000. In a suit by D. to make A. B and C separately liable, each to the extent
of Rs. 1.000 they prove that the word ‗each‘ was inserted by mistake; that the intention
was that they should give a joint bond for Rs. 1.000. D can obtain the performance soughtonly with the variation thus set up.
(b) A sues B to compel specific performance of a contract in writing to buy a dwelling
house. B proves that he assumed that the contract included an adjoining yard. and the
contract was so framed as to leave it doubtful whether the yard was so included or not.
The Court will refuse the contract, except with the variation set up by B.
(c) A contracts in writing to let to B a wharf, together with a strip of A‘s land delineated in
a map. Before signing the contract, B proposed orally that he should be at liberty to
substitute for the strip mentioned in the contract another strip of A‘s land of the same
dimensions, and to this A expressly assented. B then signed the written contract. A cannotobtain specific performance of the written contract, except with the variation set up by B.
(d) A and B enter into negotiations for the purpose of securing land for B for his life with
remainder to his issue. They execute a contract, the terms of which are found to confer an
absolute ownership on B. The contract so framed cannot he specifically enforced.
(e) A contracts in writing to let a house to B, for the certain term, at the rent of Rs. 100
per month, putting it first into tenable repair. The house turns out to be not worth
repairing; so with B‘s consent A pulls it down and erects a new house in its place B
contracting orally to pay him at Rs. 120 per mensem. B then sues to enforce specific
performance of the contract in writing, He cannot enforce it except with the variation madeby the subsequent oral contract.
27. Relief against parties and persons claiming under them by subsequent title
Except as otherwise provided by this Chapter, specific performance of a contract may be
enforced against-
(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract,
except a transferee for value who has paid his money in good faith and without notice of
the original contract;
(c) any person claiming under a title which, though prior to the contract and known to the
plaintiff, might have been displaced by the defendant;
(d) when a public company has entered into a contract and subsequently becomes
amalgamated with another public company, the new company which arises out of the
amalgamation;
(e) when the promoters of a public company have, before its incorporation, entered into a
contract, the company: provided that the company has ratified and adopted the contract
and the contract is warranted by the terms of the incorporation.
Illustrations to clause (b)
A contracts to convey certain land to B by a particular day. A dies intestate before that day
without having conveyed the land. B may compel A‘s heir or other representatives-ininterest
to perform the contract specifically.
A contracts to sell certain land to B for Rs. 5,000. A afterwards conveys the land for Rs.
6,000 to C, who has notice of the original contract. B may enforce specific performance of
the contract as against C.
A contracts to sell land to B for Rs. 5,000. B takes possession of the land. Afterwards A
sells it to C, for Rs. 6,000. C makes no inquiry of B relating to his interest in the land. B‘s
possession is sufficient to effect C with notice of his interest and he may enforce specific
performance of the contract against C.
A contracts, in consideration of Rs. 1,000 to bequeath certain of his lands to B.
Immediately after the contract A dies intestate, and C takes out administration to his
estate. B may enforce specific performance of the contract against C;
A contracts to sell certain land to B. Before the completion of the contract, A becomes a
lunatic and C is appointed his committee. B may specifically enforce the contract against C.
to clause (c)
A, the tenant for life of an estate, with remainder to B, in due exercise of a power
conferred by the settlement under which he is tenant for life, contracts to sell the estate to
C, who has notice of the settlement. Before the sale is completed A dies. C may enforce
specific performance of the contract against B.
A and B are joint tenants of land, his undivided moiety of which either may alienate in his
life-time but which, subject to that right, devolves on the survivor. A contracts to sell his
moiety to C and dies. C may enforce specific performance of the contract against B.
Court Decisions
Bona fide purchaser. What requirements a subsequent vendee must prove in order to
succeed on ground. Determination of. It would appear that in order to succeed on this
issue, subsequent vendees must establish, apart from payment of value, that.
-They acted in good faith;
-They had no notice of the original contract, and .
-In the above two aspects, they took reasonable care.
In order to prove above requirements, it would not be enough to say that mere denial in
this behalf by subsequent vendees would be enough to discharge onus. Even if it be
assumed that absence of notice could be affirmatively established by denial and relevant
negative evidence, other requirements will have to be established by positive material. It
would, be for the subsequent vendees to show that they act in good faith and with
reasonable care. It cannot be said that a mere "denial" in this behalf would be enough to
prove something positive in nature of reasonable case and good faith. P.L.J.2000 Lah.
1485.
Whether respondent was a transferee for value paid in good faith and without notice of
original contract. Trial court had held that according to appellant's own admission in crossexamination,
respondent
had
no knowledge
of
agreement
prior
to
purchase
of
suit
plot
by
him.
Factum
that
lesser
consideration
was shown
in
sale
deed
would
not
make
above
provision
of
Act
inapplicable.
This
fact
would
not
show
that
respondent
had
'knowledge
of
agreement
at time
of
purchasing
suit
plot
or
that
he had
"purchased
plot
without
valuable
consideration.
P.L.J.1994
SC
350
= PLD
1994
SC
674
= 1994
PSC
798.
Suit for specific performance of agreement to sell property- Vendor entered into
agreement to sell with plaintiff and also executed a registered power of attorney in his
favour authorising him to sell land - Vendor later on sold land in favour of vendees -
Plaintiff filed suit, which was contested by subsequent vendees claiming to be bona fide
transferees for consideration and without notice of plaintiff‘s rights - Both deeds had been
executed on the same date - Subsequent vendees could at most in exercise of due
diligence make a probe either into Revenue Record or Registration Office - Property in
Revenue Record was still in the name of vendor - Registered deed, if scrutinized, would not
have provided any opportunity to subsequent vendees to be alert as same was a simple
general power of attorney in favour of plaintiff - Real document to put subsequent vendees
on alert was agreement to sell, which had never been registered - Had the Parties executed
only one document and all contents of both documents been every occasion for subsequent
vendees to have become alert of rights of plaintiff-agent - Registered power of attorney
was silent that principal had allowed agent-plaintiff to get property transferred in his own
name - Subsequent vendees in such circumstances, despite exercise of due diligence, could
not have known or supposed to have known about existence of any agreement to sell
between original vendor and plaintiff - Subsequent vendees were, thus, bona fide
purchasers for consideration and without notice within contemplation of S. 27 of Specific
Relief Act, 1877 - No decree for specific performance could be granted in favour of plaintiff.
PLD 2003 SC 494
Suit decreed by trial Court, set aside in appeal. Whether Judgment rendered by Addl.
District Judge was no Judgment in eye of law. Suit was for specific performance. It was
pleaded by plaintiff that vendor proceeded to sell plot to defendant No. 2 during
subsistence of agreement to sell in his favour while defendant No. 2 inspite of notice of
agreement purchased same, therefore, he had prayed for setting aside of sale deed.
Appellate Court did not advert to legal question as to whether appellant was purchaser for
consideration without notice of previous agreement to sell or not? District Judge accepted
appeal on sole ground that he would prefer registered sale deed over mere agreement to
sell. Sale deed could not be preferred in view of provisions of Section 27of Specific Relief
Act. It is clear from Judgment of Addl. District Judge that he even did not go through
Judgment of Trial Court and precedents referred to by him otherwise it was not possible to
record findings. He has failed to decide appeal by speaking Judgment. He has neither
referred to evidence nor arguments nor issues in clear violation of provisions of Order XLI
and XX C.P.C.. Learned Addl. District Judge has neither noted points argued before him by
parties nor disposal of issues with reference to evidence. None of issues framed by trial
court was given up by either of parties, therefore, he was under obligation to decide all
.issues. Judgement rendered by Addl. District Judge is not adjudication in eye of law.
Impugned Judgment/decree would be deemed pending on file of District Judge who shall
decide afresh in accordance with law. P.L.J.1998 Lah. 1062 = 1999 CLC 62.
Transfer of property by ostensible owner. When a person ostensibly being owner transfer
property for consideration and such transfer is questioned on the ground that transferor
had no legal power to vacate same, transferee may be exempted from its consequences,
provided, he establishes that he has taken reasonable care to ascertain power of transferor
and has acted in good faith. This is known as "caveat emptor" rule and requires transferee,
apart from acting in good faith, to take all reasonable care to apprise himself of any defect
in transferor's title or clog on his power to effect transfer. On the other 4and Section 27-B
of Specific Relief Act, 1877 contemplates that equity of specific performance may not be
enforced against a person who had, subsequently, purchased property and paid his money
in good faith and without notice of original contract. Duty to ascertain as contemplated by
S. 41 of Transfer of Property Act, 1882, is not stipulated in Specific Relief Act, 1877.
Burden on transferee under Specific Relief Act, 1877 is less onerous and specific
performance against him can be refused if it is shown that he acted in good faith and was
not aware of pre-existing equity in favour of other person. P.L.J.1999 Kar. 633 = 1999 CLC
296.
Relief by way of cancellation of sale-deed not sought by petitioner-Both Courts below had
not suited plaintiff on ground that he had not sought relief by way of cancellation of saledeed
in respect of property in question,which had been got registered in favour of subsequent vendee
(respondent)-Such findings being in derogation of S. 27 of Specific Relief Act1877, were not
maintainable,PLD 2003 Lah.49
27-A. Specific performance in case of part performance of contract to lease
Subject to the provisions of this Chapter where a contract to lease immovable property is
made in writing signed by the parties thereto or on their behalf, either party may,
notwithstanding that the contract, though required to be registered has not been
registered, sue the other for specific performance of the contract if.-
(a) where specific performance is claimed by the lessor, he has delivered possession of the
property to the lessee in part performance of the contract; and
(b) where specific performance is claimed by the lessee, he has in part performance of the
contract, taken possession of the property, or, being already in possession, continues in
possession in part performance of the contract, and has done some act in furtherance of
the contract:
Provided that nothing in this section shall effect the rights of a transferee for
consideration who has no notice of the contract or of the part performance thereof.
This section applied to contracts to lease executed after the first day of April, 1930.
Court Secisions
Transferee of suit property in good faith:-- defendant who all along projected his case
on the basis of registered sale-deed in respect of suit property, had clamed that he was the
transferee of suit property in good faith without notice of previous agreement of sale
property in good faith without notice of previous agreement of sale allegedly executed
earlier in favour of plaintiff on the basis of which plaintiff had founded his case - Specific
performance of contract could be enforced under S. 27(b), Specific Relief Act, 1877 against
any other person claiming under him by a title arising subsequently to the contract, except
a transferee for value who had paid money in good faith and without notice of original
contract - Specific performance could not be enforced against defendant it he
demonstrated that he was a transferee in good faith without notice of the original contract,
Specific performance could not be enforced against defendant if he demonstrated that he
was a transferee in god faith without notice of the original contract, allegedly executed in
favour of plaintiff earlier - Burden to prove such fact, heavily lay on the defendant. 2004 M
L D 251
28. What parties cannot be compelled to perform
Specific performance of a contract cannot be enforced against a party thereto in any of the
following cases:-
(a) if the consideration to be received by him is so grossly inadequate, with reference to
the state of things existing at the date of the contract, as to be either by itself or coupled
with other circumstances evidence of fraud or undue advantage taken by the plaintiff;
(b) if his assent was obtained by the misrepresentation (whether willful or innocent),
concealment, circumvention or unfair practices, of any party to whom performance would
become due under the contract, or by any promise of such party which has not been
substantially fulfilled;
(c) if his assent was given under the influence of mistake of fact, misapprehension or
surprise: Provided that, when the contract provides for compensation in case of mistake,
compensation may be made for a mistake within the scope of such provision, and the
contract may be specifically enforced in other respects if proper to be so enforced.
Illustrations to clause (c)
A, one of two executors, in the erroneous belief that he had the authority of his co-
executor enters into an agreement for the sale to B of the testator‘s property. B cannot
insist on the sale being completed.
A directs an auctioneer to sell certain land: A afterwards revokes the auctioneer‘s authority
as to 20 bighas of this land, but the auctioneer inadvertently sells the whole to B, who has
no notice of the revocation. B cannot enforce specific performance of the agreement.
29. Bar of suit for breach after dismissal
The dismissal of a suit for specific performance of a contract or part thereof shall bar the
plaintiff‘s right to sue for compensation for the breach of such contract or part, as the case
may be.
Court Decisions
Appellants having purchased property in dispute from respondents 5 to 16 during pendency
of suit have stepped into their shoes and agreement for sale in favour of
plaintiffs/respondents 1 to 4 can be specifically enforced as against them in terms of Section 29of Act which ordains that not only parties to agreement but also their successors
are bound by it. Only exception in this behalf is that of a bonafide purchaser for value
without notice of existing agreement, which is not available to appellants. Appellants being
successors of respondents 1 to 4, are bound, to convey property to respondents/plaintiffs
in specific performance of agreement which binds them also. P.L.J.1995 Lah. 468 = PLD
1995 Lah. 255.
30. Application of preceding sections to awards and testamentary directions to
execute settlements
The provisions of this Chapter as to contracts shall, mutates mutandis, apply to awards and
to directions in a will or codicil to execute a particular settlement.
31. When instrument may be rectified
When, through fraud or a mutual mistake of the parties, a contract or other instrument in
writing does not truly express their intention, either party, or his representative-in-interest,
may institute a suit to have the instrument rectified; and if the Court find it clearly proved
that there has been fraud or mistake in framing the instrument, and ascertain the real
intention of the parties in executing the same, the Court may in its discretion rectify the
instruments so as to express that intention, so far as this can be done without prejudice to
rights acquired by third persons in good faith and for value.
32. Presumption as to intent of parties
For the purpose of rectifying a contract in writing, the Court must be satisfied that all the
parties thereto intended to make an equitable and conscientious agreement.
33. Principles of rectification
In rectifying a written instrument, the Court may inquire what the instrument was intended
to mean, and what were intended to be its legal consequences, and is not confined to the
inquiry what the language of the instrument was intended to be.
34. Specific enforcement of rectified contract
A contract in writing may be first rectified and then, if the plaintiff has so prayed in his
plaint and the Court thinks fit, specifically enforced.
Illustration
A contracts in writing to pay his attorney. B, a fixed sum in lieu of cost. The
contract contains mistakes as to the name and rights of the client, which if
construed strictly, would exclude B from all rights under it. B is entitled, if
the Court thinks fn. to have it rectified, and to an order for payment of the
sum. as if at the time of its execution it had expressed the intention of the
parties.
35. When rescission may be adjudged
Any person interested in a contract in writing, may sue to have it rescinded, and such
rescission may be adjudged by the Court in any of the following cases, namely:-
(a) where the contract is voidable or terminable by the plaintiff;
(b) where the contract is unlawful for causes not apparent on its face, and the defendant is
more to blame than the plaintiff;
(c) where a decree for specific performance of a contract of sale, or of a contract to take a
lease, has been made, and the purchaser or lessee makes default in payment of the
purchase-money or other sums which the Court has ordered him to pay.
When the purchaser or lessee is in possession of the subject-matter, and the Court finds
that such possession is wrongful, the Court may also order him to pay to the vendor or
lessor the rents and profits, if any, received by him as such possessor.
In the same case, the Court may, by order in the suit in which the decree has been made
and not complied with, rescind the contract, either so far as regards the party in default, or
altogether as the justice of the case may require.
Illustrations
to clause (a)—
A sells a field to B. There is right of way over the field of which A has direct personal
knowledge, but which he conceals from B. B is entitled to have the contract rescinded.
to clause (b)-
A, an attorney, induces his client, B, a Hindu widow to transfer property to him for the
purpose of defrauding B‘s creditor. Here the parties are not equally in fault, and B is
entitled to have the instrument of transfer rescinded.
Court Decisions
Decreed subject to condition that purchase price shall be deposited in court
within a specific period. Court has power to extend time or not. Where trial court has
decreed suit for specific performance of contract subject to condition that purchase price
shall, be deposited in court within a specific time and also ordered that if that money is not
put in within that time, suit shall stand dismissed, court has no power to extend time as in
such a case; that decree by court is final and self-operative . and in case of default of
payment of purchase price; mandate of court tantamounts to rescission of contract. In
such a case recourse to sections 148 and 151 CPC will not be permissible. Court will not
allow plea for extention of time if it finds that it will occasion a wrong to other side. Further
more, in order to succeed in an action for specific performance, plaintiff led to show that he
had been willing and ready to perform his part of contract.-P.L.J. 1997Lah. 896 = PLD
1997 Lah. 177.
Suit for specific performance of agreement to sell immovable property - court while passing
decree in such suit fixed time for deposit of sale price and provided consequences of
dismissal of suit in case of failure to comply with the decree - Extension of such time -
Powers of Court - Scope - Such decree was not preliminary, but to all intents and purposes
was final in nature - court had no jurisdiction to extend the time under S. 148, C.P.C., on
principle of becoming functus officio - Such rule was not absolute, but subject to certain
exceptions including situations beyond control of the decree-holder to comply with decree
or the act of court which impeded compliance thereof - When judgment and decree was
corrected, then time provided in original decree for such deposit would start from the time,
when the correction was allowed - Principles and exceptions illustrated. PLD 2004 Lah.
103
36. Rescission for mistake
Rescission of a contract, in writing cannot to be adjudged for mere mistake, unless the
party against whom it is adjudged can be restored to substantially the same position as it
the contract had not been made.
37. Alternative prayer for rescission in suit for specific performance
A plaintiff instituting a suit for the specific performance of a contract in writing may pray in
the alternative that, if the contract cannot be specifically enforced, it may be rescinded and
delivered up to be cancelled; and the Court, if it refuses to enforce the contract specifically,
may direct it to be rescinded and delivered up accordingly.
38. Court may require party rescinding to do equity
On adjudging the rescission of a contract, the Court may require the party to whom such
relief is granted to make any compensation to the other which justice may required.
39. When cancellation may be ordered
Any person against whom a written instrument is void or void able, who has reasonable
apprehension that such instrument, if left outstanding, may cause him serious injury, may
sue to have it adjudged void or voidable; and the Court, may, in its discretion, so adjudge
it and order it to be delivered up and cancelled.
If the instrument has been registered under the Indian Registration Act, the Court shall
also send a copy of its decree to the officer in whose office the instrument has been so
registered; and such officer shall note on the copy of the instrument contained in his books
and fact of its cancellation.
Illustrations
(a) o A, the owner of a ship, by fraudulently representing her to be sea worthy, induces B,
an underwriter, to insure her. B may obtain the cancellation of the policy.
(b) A conveys land to B, who bequeaths it to C and dies. Thereupon D gets possession of
the land and produces -a forged instrument stating that the conveyance was made to B in
trust for him. C may obtain the cancellation of the forged instrument.
(c) A, representing that the tenants on his land were all at will, sells it to B, and conveys to
him by an instrument, dated the 1st January, 1877. Soon after that day, A fraudulently
grants to C a ‗lease of part of the lands, dated the 1st October, 1876, and procures the
lease to be registered under the Registration Act. B may obtain the cancellation of this
lease.
(d) A agrees to sell and deliver a ship to B, to be paid for by B‘s acceptance of four bills of
exchange, for sums amounting to Rs. 30,000 to be drawn by A on B. The bills are drawn
and accepted, but the ship is not delivered according to the agreement. A sues B on one of
the bills. B may obtain the cancellation of all the bills.
Court Decisions
Cancellation of gift deed:-- Donor (when he was alive) appeared as witness and denied
execution of gift deed - Trial Court dismissed the suit, but appellate Court decreed the
same -- No evidence was available on record regarding intention of donor to declare gift -
deed did not show as to why donor in presence of his wife and son had made gift in favour
of the defendants - Defendants had neither rendered any service to donor nor had such
close relations with donor for which preference could be given to them donor his wife and
son - Defendants had failed to prove that donor had appeared before Court to prove its
execution - Gift deed contained general words that possession had been delivered to
defendants, when in fact they were already in possession as tenants of donor - Gift deed,
in such a situation, should have mentioned that defendants already retaining possession as
tenants would now retain the same as owners - Such fact proved that possession in reality
had not been transferred to defendants on basis of gift deed, rather they were retaining
possession as tenants of donor - Appellate Court had rightly set aside gift deed in
circumstances. PLD 2003 Azad J&K 25
Suit for cancellation of registered gift deed in respect of land in question, in favour of one
daughter by donor while leaving out his sole son and other daughters---Donor's son being
in possession, seeking cancellation of such gift deed, by denying factum of gift and
claiming gift deed to be a fabricated transaction---Plaintiffs suit was dismissed by trial
Court but decreed by Appellate .Court---Validity---Donor was old and aged person and
illiterate---Burden to prove execution of gift deed by him and its valid registration at his
instance lay upon donee who did not appear in witness box to depose about voluntary
execution of gift deed by her father and its registration at his instance---Neither stamp
vendor nor scribe of gift deed were produced in evidence---None from the village where
land in question, was situated and donor resided was associated with execution and
registration of gift deed ---Lambardar of the village where land was situated was also
excluded from the transaction in question---Attesting witnesses of gift deed were from a
far-off village--*Appellate Court had disbelived their testimony on proper scan of
evidence--*No other relation of donor had accompanied him at the time of execution and
registration of alleged gift---No good reason was shown for donor to prefer one daughter to
his sole son and three other daughters---Transaction in question, was against ordinary
human conduct ---Plaintiff was .in possession of land in question, during lifetime of his
father and even after his death---In case of denial of execution defendant (daughter) who
had to prove voluntary nature of transaction had failed to prove that same was voluntary
and its execution and registration was at the instance of donor---Gift in question was, thus,
not binding on plaintiff in circumstances. 1995 C L C 7
Respondent's plea was that parties had agreed to execute lease agreement, but appellant
in connivance with petition-writer and marginal witnesses got it executed as agreement to
sell ---Respondent also filed suit for cancellation of agreement to sell being based on fraud
and ineffective on his rights---Both the suits were consolidated---Trial Court decreed
appellant's suit and dismissed respondent's suit holding that appellant had proved by
examining one marginal witness and scribe of agreement that it was executed as
agreement to sell---Respondent's appeal was dismissed by Appellate Court, but his revision
petition was accepted by High Court----Respondent had neither denied execution of
agreement nor appellant's possession over suit-land nor had claimed relief for getting its
possession from appellant in suit for cancellation of agreement--*Neither any jurisdictional
defect nor non-reading and misreading of evidence could be pointed out in
judgments/decrees passed by Trial Court and Appellate Court---High Court had interfered
with such concurrent findings without indicating misreading or non-reading of evidence or
the same being in any way in violation of law---High Court had granted relief to respondent
on the ground not raised either in written statement or during trial--- S. C. accepted
appeals with costs and set aside judgment of High Court. as a result of which
judgments/decrees of Appellate Court were restored. P L D 2002 S. C. 293
Suit had been filed for cancellation of sale deed and possession but there was no prayer
clause to the effect of cancellation of sale-deed. It would not be appropriate however, not
to grant relief of cancellation of sale-deed and possession thereof, merely on the ground
that plaintiff, had not paid Court-fee. Plaintiffs would be required to pay Court fee, if any,
on such relief at the time of execution of decree. Trial Court had rightly rejected contention
of defendants as to maintainability of suit on the ground that mother of minors had not
filed affidavit in respect of minors. Finding of Trial Court was Just and proper in holding
that such being simple irregularities plaintiffs could not be non-suited on such grounds.
P.L.J.2000 Kar. 3.
Suit for cancellation of power of attorney and sale-deed---Defendant on the basis of
power of attorney allegedly executed by' one of the brothers of plaintiff, had executed
sale-deed in respect of property of plaintiff and her brothers in favour of his sons---Plaintiff
being sister of alleged executant of power of attorney had stated on oath that she or her
relatives having not heard of him for more than ten years before filing of the suit, he would
No comments:
Post a Comment