The Liability Cap, the Indemnity and the One-Sided Arbitrator
Meera entered into an agreement dated 12 February 2023 to purchase Rakesh's flat in Pune for ₹1.2 crore. She paid ₹12 lakh as earnest money; the balance was payable on 31 August 2023, when Rakesh was to execute the sale deed and hand over possession. Rakesh refused to complete on 10 September 2023. Meera sent a legal notice on 15 January 2025 and filed a suit for specific performance in the Pune court on 10 March 2025. The plaint avers that 'the plaintiff has always been ready and willing to perform her part of the contract' but does not state when she tendered the balance, whether she had funds, or what she did after the refusal. Meera was abroad from June to December 2023. Rakesh has applied under Order VII Rule 11 CPC, contending that the suit is time-barred and that the plaint does not disclose readiness and willingness. The plaint values the suit at ₹12 lakh for court fee.
1. Is the suit barred by limitation? Apply Article 54 of the Limitation Act, 1963 and identify the date from which time runs.
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Article 54 of the Limitation Act, 1963 prescribes three years for a suit for specific performance. Time runs from the date fixed for performance; if no date is fixed, from the date on which the plaintiff has notice that performance is refused.
Here the agreement fixed 31 August 2023 as the date for execution of the sale deed and payment of the balance. Time therefore began on 31 August 2023 and would ordinarily expire on 31 August 2026. The suit was filed on 10 March 2025, well within three years. Even if the court takes the refusal date of 10 September 2023 as the starting point, the suit is still within time. The legal notice of 15 January 2025 neither extends nor shortens limitation; it is evidence of refusal and of the plaintiff's stand.
For rejection under Order VII Rule 11(d) CPC, limitation must be apparent from the plaint itself. The plaint pleads the agreement date, the performance date and the filing date. On those facts the suit is not ex facie barred. The application on limitation should fail.
2. Will the court reject the plaint under Order VII Rule 11 CPC for want of readiness and willingness, or allow amendment? Explain.
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Readiness and willingness is a condition of the grant of specific performance under section 16(c) of the Specific Relief Act, 1963. The plaintiff must not only aver it but also prove it. A bare formal averment may not satisfy the court at trial.
However, Order VII Rule 11 is a drastic power. The court reads the plaint as a whole and asks whether it discloses a cause of action. Here the plaint pleads a concluded agreement, payment of earnest money, a date for completion and refusal by the defendant. That discloses a cause of action for breach and for specific performance. The absence of particulars of readiness and willingness is a defective pleading, not necessarily the absence of a cause of action. Many courts would direct better particulars or permit amendment rather than reject the plaint outright. Rejection is more likely only where the plaint contains no averment at all of readiness and willingness.
Meera should immediately apply under Order VI Rule 17 CPC to amend the plaint. The amendment should plead: her bank balance and financial capacity as on 31 August 2023; the steps she took to tender the balance; her request to Rakesh to attend the sub-registrar; his refusal; and her continued willingness. Such particulars do not change the cause of action; they elaborate an existing averment. If the amendment is allowed before trial, the plaint can proceed. She should also correct the valuation and pay the court fee demanded by the local Court Fees Act.
3. Draft the essential averments and prayer clause that Meera should include.
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Essential averments
- The agreement dated 12 February 2023 between the plaintiff and the defendant for sale of the flat described in the schedule for ₹1.2 crore.
- Payment of ₹12 lakh as earnest money and the terms that the balance of ₹1.08 crore was payable on 31 August 2023 against execution and registration of the sale deed and possession.
- That the plaintiff was throughout ready and willing to perform her part; that she had sufficient funds in her bank account; that she attended the sub-registrar's office on 31 August 2023 and requested the defendant to execute the deed; and that the defendant failed and refused to do so.
- The defendant's refusal on 10 September 2023 and the legal notice dated 15 January 2025.
- That the plaintiff has not rescinded the contract and continues to be ready and willing.
- That the suit is within limitation under Article 54; that this court has territorial jurisdiction because the property is situated in Pune under section 16(c) CPC; and that the suit is properly valued.
Prayer clause (a) A decree for specific performance of the agreement dated 12 February 2023, directing the defendant to execute and register the sale deed in respect of the scheduled flat in favour of the plaintiff on receipt of the balance consideration of ₹1.08 crore; (b) In the alternative, a decree directing the defendant to refund ₹12 lakh with interest at 12% per annum from 10 September 2023 till payment; (c) A declaration that the plaintiff is entitled to possession on registration, with police assistance if necessary; (d) Costs of the suit and such further or other relief as the court deems just.
An interim application should also seek an injunction restraining the defendant from alienating or encumbering the flat during the pendency of the suit.