what legal action can be taken if the sale deed is cancelled

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Specific performance is a remedy developed by principle of equity. A party to a contract who is damaged because the contract is breached by another party has the option to file a suit for specific performance compelling to perform his part of contract. Before an equity court will compel specific performance, however, the contract must be one which can be specifically performed. Section 16 (c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. In our country, most of the specific performance suits relate to sales of immoveable properties and to some extent, transfer of shares. As the law of specific performance is basically founded on equity, considerations such as conduct of the plaintiff, the element of hardship that may be caused to one of the parties, the availability of adequate alternative relief and such other matters are taken into consideration. It is a discretionary relief.

Suit For Specific Performance:
Illustration
A is owner of land. He executed an unregistered agreement of sale in favour of B and received Rs. 50,000/- as an advance out of sale price of Rs.1,00,000/-. A has to execute a Regd. Sale deed within three months from date of execution of agreement of sale. But, A refused to execute Regd. Sale deed and sold the said property to C for higher price. B can sue against A for specific performance.

From the above illustration, no doubt, B can file a suit for specific performance. This case involve several aspects such as, whether plaintiff is ready and willing to perform his part of contract or not; when would time is essence of contract?; Can C be impleaded in the suit as party? Is escalation of price is a ground in such a suit? Question of Lis Pendens; whether B is entitled for damages and compensation or not; whether an unregistered agreement of sale is admissible or not etc. All these aspects are dealt in the following paragraphs with relevant illustrations.

Elements That Are Involved In A Suit For Specific Performance Of Suit:-
Valid Contract :-
Normally, suit for specific performance of contract based on agreement of sale. Vague and uncertain agreement could not be given effect to.( Vimlesh Kumari Kulshrestha vs Sambhajirao, 2008 (2) Supreme 127). It was observed in Ambica Prasad vs Naziran Bibi, AIR 1939 All 64], [Balram v Natku, AIR 1928 PC 75 that there should be a valid contract for suit for specific performance of contract.

Unregistered agreement of sale :-
Un registered agreement of sale is admissible in evidence under Section 49(c) of the Registration Act in a suit for specific performance of contract. Unregistered sale deed is admissible in evidence in a suit for specific performance.( S.Kaladevi vs V.R.Somasundaram, AIR 2010 SC 1654).

Conduct of the parties:-
Any person seeking benefit of specific performance of contract must manifest that his conduct has been blemishless (H.P.Pyarejan vs Dasappa, AIR 2006 SC 1144). Similarly, conduct of defendant cannot be ignored (Silvey vs Arun Varghese, AIR 2008 SC 1568). The relief of specific performance is discretionary ( V.R.Sudhakara Rao vs T.V.Kameswari, (2007) 6 SCC 650). It was held in Aniglase Yohannan v. Ramlatha, 2005 (7) SCC 534 that if the pleadings manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief.

Readiness and Willingness:-
Section 16(c) of the Act mandates the plaintiff to aver in the plaint and establish the fact by evidence aliunde that he has always been ready and willing to perform his part of the contract. Distinction between “readiness” and “willingness” is that the former refers to financial capacity and the latter to the conduct of the Plaintiff wanting performance ((2011)1SCC429). The plaintiff’s readiness and willingness, which is a condition precedent, must be in accordance with the terms of the agreement (Bala Krishna vs Bhgawan Das, AIR 2008 SC 1786), however, the plaintiff need not carry money in his hand
( M.K.Watts vs Usha Sharma, AIR 2004 P&H 295). In a suit for specific performance, plaintiff is to approach Court with clean hands.( G.Jayashree vs Bhagawan Das, AIR 2009 SC 1749). Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract.( N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors, (1995) 5 SCC 115 at para 5). Even subsequent purchaser is entitled to raise objection as to readiness and willingness. (AIR 2009 SC 2157). To know the consequences in the case of absence of plea of readiness and willingness in the plaint, see ruling J.P. Builders and Anr.Vs. A. Ramadas Rao and Anr, (2011)1SCC429).

Time is essence of contract:-
From the decision of a Constitution Bench of the Hon’ble Supreme Court in Chand Rani v.Kamal Rani MANU/SC/0285/1993 : 1993 (1) SCC 519, it is clearly known that in the case of sale of immovable property, time is never regarded as the essence of the contract. An intention to make time the essence of the contract must be expressed in unequivocal language. As to the point of limitation is concerned, the suit for specific performance has to be filed within reasonable time which depends upon facts and circumstances of each case. (AIR 2009 SC 2157, Azhar Sultana’s case). Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are: 1. from the express terms of the contract; 2. from the nature of the property; and 3. from the surrounding circumstances, for example: the object of making the contract.( Smt. Chand Rani (dead) by LRs. Vs. Smt. Kamal Rani (dead) by LRs, 1993 (1) SCC 519)

Adding parties in specific performance suit:-
Order 1 Rule 10 CPC is wider than the scope of Order 22 Rule 10 CPC as to person whose presence before the court is necessary or proper for effective adjudication of the issue involved in the suit. . Order 22 Rule 10 CPC is an enabling provision and that it has certain parameters to continue the suit where right to sue is survival. Order 22, Rule 10, C.P.C. speaks of cases of an assignment, creation or devolution of any interest during the pendency of a suit and the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved. (See the ruling Lingaraja Mohanty vs Binodini Mohanty & Ors. on 20 April, 2011; Thomson Press (India) Ltd. Vs. Nanak Builders and Investors P. Ltd. and Ors, 2013(3)SCALE26).

Essential elements to constitute ‘Lis Pendens’:-
Answer:- Section 52 of T.P.Act delas with ‘Lis Pendens’. In order to constitute a lis pendens the following elements must be present :-
(I) There must be a suit or proceeding pending in a Court of competent jurisdiction;
(II) The suit or proceeding must not be collusive;
(III) The litigation must be one in which right to immovable property is directly and specifically in question;
(IV) There must be a transfer of or otherwise dealing with the property in dispute by any party to the litigation;
(V) Such transfer must affect the rights of the other party that may ultimately accrue under the terms of the decree or order.

Advocate Siddhant Sharma LawRato