Agreement to Sell, a Second Sale, and the Readiness Question
By a written agreement dated 12 January 2019, Sushanta Samanta agreed to sell a 3 cottah plot at Rajpur, South 24 Parganas, to Debjani Ghosh for ₹24,00,000. She paid ₹2,00,000 on signing; the balance was payable at registration within 90 days of her obtaining a municipal no-objection certificate, which the agreement made her responsibility. Clause 7 provided that if the NOC were delayed for reasons beyond her control, the time for completion would stand extended correspondingly. Possession was delivered on the date of the agreement and Debjani has remained in possession. Her NOC application lapsed during the 2020 lockdown and was granted on 14 October 2020. Between November 2020 and April 2021 she wrote three letters fixing registration dates and tendering the balance; the vendor replied once, asking her to wait until the family settlement was over. On 5 June 2021 Sushanta sold and registered the same plot to his nephew Ritwik for ₹35,00,000; Ritwik had read Debjani's agreement. Debjani sued on 20 August 2023 for specific performance and for an injunction against Ritwik. Sushanta pleads limitation and want of readiness.
1. Is the suit barred by Article 54 of the Limitation Act? Identify the date from which the three years began to run, and assess the effect of Clause 7 and of the correspondence between the parties.
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Framework. Article 54 has two limbs: three years from the date fixed for performance, and, where no date is fixed, three years from the date on which the plaintiff has notice that performance is refused.
Applying the first limb. Clause 7 makes the completion date depend on an event - the grant of the NOC - and expressly extends time correspondingly. Until 14 October 2020 no certain date was fixed within the meaning of the article; the 90-day period had not even begun to run in a determinate way. A date then had to be fixed by agreement or by notice, and the three letters of November 2020 to April 2021 did precisely that.
Applying the second limb. The vendor did not treat 12 April 2019 as a deadline. He asked the purchaser to wait, which is conduct inconsistent with insistence on the original date. The first unequivocal refusal was the sale to Ritwik on 5 June 2021. Time therefore began on that date and expired on 5 June 2024; the suit of 20 August 2023 is within time.
Counter-argument. The vendor will say the first limb is mandatory once a date is fixed, and that Clause 7 does not apply because the lockdown was not the reason for the entire delay. That is a question of fact, but the burden of proving that the clause is inapplicable is on him, since he drafted the agreement. Even if the first limb were applied mechanically and the suit held barred, the court would have to consider whether his conduct amounted to an extension or waiver of the time clause - an issue that cannot be decided without evidence.
2. What must Debjani prove to satisfy Section 16(c) of the Specific Relief Act, and how should the court assess her letters, the tendered balance and her delay in suing?
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The requirement. Section 16(c) requires the plaintiff to aver and prove that she has performed, or has always been ready and willing to perform, the essential terms of the contract which were to be performed by her. Readiness is financial capacity; willingness is the mental element shown by conduct. Both must be continuous, from the date of the contract until the decree.
Material supporting her. The three letters, each fixing a date and tendering the balance, show conduct rather than bare assertion. The vendor's single evasive reply - 'wait until the family settlement is over' - is evidence that he, not she, was not ready. A purchaser is not required to keep knocking at a closed door; once the other side refuses, further tender becomes futile. Her continuous possession since 2019 shows that she treated the contract as subsisting.
Weaknesses. She did not deposit the balance in court with the plaint, but deposit is not a condition precedent; she must prove capacity through bank statements or a ready source of funds. There is a gap of about four weeks between the NOC and her first letter, which she must explain in evidence. More seriously, she waited over two years after the refusal of 5 June 2021 before suing.
Effect of the delay. Delay does not defeat Section 16(c) where the contract is admitted, the price is ascertainable and possession was given; but it is a relevant circumstance in the court's discretion under Section 20, particularly where the property has risen in value from ₹24,00,000 to ₹35,00,000. The court should weigh it, not treat it as an automatic bar.
3. What relief, if any, can be granted against Ritwik, the subsequent purchaser? Discuss Section 19(b) of the Specific Relief Act, lis pendens and Section 53A of the Transfer of Property Act.
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Section 19(b). Specific performance may be enforced against a person who has acquired title from the vendor with notice of the original contract. Ritwik had read Debjani's agreement, and Debjani was in open possession of the plot, which itself put any purchaser on inquiry. Notice is therefore established both directly and constructively, and the decree can be executed against him.
Lis pendens. Section 52 of the Transfer of Property Act does not assist the plaintiff here. The doctrine protects only against transfers made after the suit is instituted, and the sale to Ritwik on 5 June 2021 preceded the suit of 20 August 2023. The plaintiff must therefore rely on Section 19(b), not on Section 52.
Section 53A. Ritwik cannot take shelter under Section 53A: that provision protects a transferee who has taken possession, and he has none. Conversely, Debjani, as the prior transferee under a written agreement with possession, could resist any attempt by the vendor to disturb her possession.
The decree. The proper decree directs Sushanta to execute and register a sale deed in Debjani's favour within a fixed period on her depositing the balance, and restrains Ritwik from interfering with her possession; his registered deed would be declared ineffective as against her. If the court refuses specific performance in its discretion under Section 20 - because of the delay and the price rise - Section 21 permits compensation for the breach. Ritwik would then retain the land but remain exposed to a claim by the vendor for the return of the price, since he purchased with notice.