Specific Performance After the Vendor's Second Sale
In Ranchi, A agrees on 10 January 2022 to sell a 3-decimal plot to P for ₹48,00,000. P pays ₹4,00,000 earnest money; the balance is payable at registration within 120 days. The agreement says time is not of the essence and A must first obtain updated revenue records and mutation. A repeatedly postpones, and P sends a legal notice on 20 May 2022 offering to pay the balance and requesting registration by 10 June 2022. On 1 August 2022 A sells the plot to B, his cousin, for ₹55,00,000. B admits he knew of P's agreement and did not verify possession. P files a suit on 15 January 2025 seeking specific performance and alternatively damages. P has a banker's cheque for the balance and pleads that he was always ready and willing. A pleads limitation and says the remedy is damages because the property has passed to B. B pleads bona fide purchaser.
1. Is the suit barred by limitation? Identify the starting point and decide maintainability.
Read the worked answer
Framework. Article 54 of the Limitation Act, 1963 gives three years from the date fixed for performance, or, if no date is fixed, from the date of refusal. The date fixed here was 9 May 2022 (120 days from 10 January 2022), but the agreement expressly says time is not of the essence and A was to complete mutation first. P's notice of 20 May 2022 fixed 10 June 2022 for registration; A's failure and subsequent sale amount to refusal.
Application. The suit was filed on 15 January 2025. Even taking the earliest date of 9 May 2022, the three-year period would expire on 9 May 2025; from the refusal on 10 June 2022 it would expire on 10 June 2025. The suit is therefore within time. The plea that limitation runs from the original 120-day period is too technical because A's own postponements and the mutation condition explain the delay.
Conclusion. The suit is maintainable on limitation. Readiness and willingness under Section 16(c) of the Specific Relief Act, 1963 is a separate merits issue, not a ground to hold the suit time-barred.
2. Should the court decree specific performance against A and B? Discuss readiness and willingness and the position of the subsequent purchaser.
Read the worked answer
Readiness and willingness. Section 16(c) requires P to aver and prove continuous readiness and willingness, not mere financial capacity. P sent a notice offering the balance, holds a banker's cheque, and explains delay by A's promises and mutation condition. His conduct is not perfect, but the court looks at substance: he did not resile and was not unable to pay. The 2018 amendment makes specific performance the general rule under Section 10, subject to Sections 14 and 16.
B's position. Under Section 19(b), specific performance may be enforced against a subsequent transferee who takes with notice. B is A's cousin, admits knowledge of the agreement, paid a higher price, and did not verify possession. That defeats bona fide purchaser status. B cannot claim protection as a transferee without notice.
Decree. The court can direct A and B to execute the sale deed in favour of P on payment of the balance within a fixed time, or direct B to convey. If B had been a genuine purchaser without notice, P's remedy would ordinarily be damages against A, not the property. On these facts, a decree against the property is justified, with costs.
3. What interim order should be passed on P's application for injunction?
Read the worked answer
Test. Order XXXIX Rules 1 and 2 read with Section 94 CPC require a prima facie case, irreparable injury, and balance of convenience. The court should also consider whether the application is aimed at gaining an unfair advantage.
Application. P has a prima facie case in the agreement, notice, and B's admitted knowledge. If B is allowed to alienate or raise construction, the subject matter may be irreversibly altered. P's delay in filing the suit weakens his case but is explained by settlement attempts; delay alone is not a bar to injunction. B is already in possession, so the court should not dispossess him at this stage.
Order. The court should restrain B from alienating, mortgaging, or creating third-party rights and from making permanent construction, and direct status quo on possession. The order should be limited until disposal and should not prevent B from ordinary agricultural use or necessary repairs.