Who May Obtain, and Against Whom It May Be Enforced

Section 19: against whom it may be enforced

Again subject to the rest of the Chapter.

(a) Either party to the contract.

(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.

This exception is the most important line in the section. It is the bona fide purchaser for value without notice defence, and three things must all be true for it to succeed: the transferee gave value; he paid the money; and he acted in good faith and without notice of the earlier contract. A person who took as a gift, or who knew of the earlier agreement, is bound.

(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.

(ca) Amalgamated limited liability partnerships. Inserted by section 8 of the 2018 amendment, matching clause (fa) of section 15.

(d) Amalgamated companies.

(e) A company on a pre incorporation contract, with the same proviso as section 15(h): the company must have accepted the contract and communicated the acceptance.

Section 17: the vendor or lessor with no title

"(1) A contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor

(a) who, knowing himself not to have any title to the property, has contracted to sell or let the property;

(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.

(2) The provisions of sub-section (1) shall also apply, as far as may be, to contracts for the sale or hire of movable property."

Two cases, and the second is the wider one. Clause (a) catches the vendor who knew he had no title. Clause (b) catches the honest vendor who nevertheless cannot give a title free from reasonable doubt at the time fixed. Good faith is no answer under (b): what matters is whether he can deliver.

"Free from reasonable doubt" is the standard. A buyer is not obliged to accept a title that would leave him exposed to litigation.

Read this with section 13, which gives the purchaser or lessee four rights in the same situation. See [Rights of a Purchaser or Lessee Against a Person with No Title].

Section 18: performance only with the variation

Where a plaintiff seeks specific performance of a contract in writing, and the defendant sets up a variation, the plaintiff cannot obtain the performance he asks for except with the variation so set up, in three cases:

"(a) where by fraud, mistake of fact or mis-representation, the written contract of which performance is sought is in its terms or effect different from what the parties agreed to, or does not contain all the terms agreed to between the parties on the basis of which the defendant entered into the contract;

(b) where the object of the parties was to produce a certain legal result which the contract as framed is not calculated to produce;

(c) where the parties have, subsequently to the execution of the contract, varied its terms."

What the section does. It stops a plaintiff enforcing the document where the document does not represent the real bargain. He may still have specific performance, but of the contract as varied.

The choice it forces. A plaintiff who will not accept the variation gets nothing under this section. He must either take performance on the varied terms or fail.

Relationship with rectification. Section 18 and section 26 overlap: both address a written instrument that does not express the real agreement. Section 26 lets a party have the instrument rectified; section 18 operates as a limit on the relief where the other party sets the variation up in defence. See [Rectification of Instruments].

The four sections in a table

A worked example

Ira agrees to sell a plot to Jai for two crore rupees.

• Jai sues. He is a party, section 15(a).
• Jai dies and his son sues. A representative in interest, section 15(b). The proviso does not bite, because no personal quality of Jai was a material ingredient in a sale of land and there is no non assignment clause.
• The contract had been with Kabir, a portrait painter, for a painting, and his son sues. The proviso does bite: Kabir's skill was a material ingredient, so the representative cannot obtain specific performance unless Kabir had already performed, or the other party has accepted performance by the representative.
• A family compromise provides that Ira will convey a plot to her niece, who is not a party. Section 15(c): a person beneficially entitled under a compromise of doubtful rights between members of the same family may sue. An exception to privity.
• After the agreement Ira sells the plot to Lata, who knew of Jai's agreement. Section 19(b): Lata claims under Ira by a subsequent title and is not protected, because she had notice. The decree may be enforced against her.
• Ira instead sells to Manish, who paid full value, in good faith, knowing nothing of Jai. Section 19(b) protects him: a transferee for value who has paid his money in good faith and without notice. Jai's remedy lies in damages against Ira.
• Ira sues Jai for specific performance but cannot show a title free from reasonable doubt. Section 17(1)(b) bars her, even though she believed her title good. And section 13(1)(d) gives Jai his deposit back with interest and costs, and a lien for them.
• Jai sues on the written agreement; Ira says both parties had agreed a right of way that the writing omits by mistake. Section 18(a): Jai cannot obtain performance except with that variation.

What it does NOT mean

"Only a party to the contract may sue for specific performance." Section 15 lists eight classes, several of whom are not parties, and clause (c) is a recognised exception to privity.

"A representative may always sue in place of the original party." Not where a personal quality was a material ingredient, or where assignment is forbidden, unless the party has performed or the other side has accepted the representative's performance.

"A subsequent purchaser is always safe." Only a transferee for value who paid and took in good faith and without notice. A donee, or a purchaser with notice, is bound.

"An honest seller with a doubtful title may enforce." Section 17(1)(b) says he may not, whatever he believed.

"Section 18 defeats the plaintiff's suit." It confines him to performance with the variation. He may take that or nothing.

Quick revision

• s.15, who may sue: (a) a party; (b) a representative in interest or principal, subject to the proviso on learning, skill, solvency or personal quality and non assignment; (c) a person beneficially entitled under a marriage settlement or a family compromise of doubtful rights; (d) a remainderman; (e) and (f) reversioners, the remainderman needing material injury; (fa) an amalgamated LLP (inserted 2018); (g) an amalgamated company; (h) a company on a pre incorporation contract it has accepted and communicated.
• s.19, against whom: (a) either party; (b) anyone claiming under him by a subsequent title, EXCEPT a transferee for value who paid in good faith and without notice; (c) a displaceable prior title known to the plaintiff; (ca) an amalgamated LLP (inserted 2018); (d) an amalgamated company; (e) a company on a pre incorporation contract.
• s.17: no specific performance in favour of a vendor or lessor who knew he had no title, or who cannot give a title free from reasonable doubt at the time fixed. Applies to movables too.
• s.18: where the defendant sets up a variation, the plaintiff can have performance only with it, in three cases: fraud, mistake of fact or misrepresentation; the intended legal result not produced; or a subsequent variation.

Test yourself

1. Who may obtain specific performance under section 15? Any party to the contract; the representative in interest or principal of a party, subject to the proviso; a person beneficially entitled under a settlement on marriage or a compromise of doubtful rights between members of the same family; the remainderman where a tenant for life contracted in due exercise of a power; a reversioner in possession, and a reversioner in remainder who will sustain material injury; a new limited liability partnership or company arising out of an amalgamation; and a company on a pre incorporation contract it has accepted and communicated acceptance of.

2. Explain the proviso to section 15(b). Where the learning, skill, solvency or any personal quality of a party is a material ingredient in the contract, or the contract provides that his interest shall not be assigned, his representative in interest or principal is not entitled to specific performance, unless that party has already performed his part or the other party has accepted performance by the representative or principal. The reason is that the other side bargained for that particular person.

3. Against whom may specific performance be enforced, and who is protected? Against either party, and against any other person claiming under him by a title arising subsequently to the contract, as well as against a person claiming under a displaceable prior title known to the plaintiff, and against amalgamated limited liability partnerships and companies and a company on a pre incorporation contract. The person protected is a transferee for value who has paid his money in good faith and without notice of the original contract.

4. When can a vendor not obtain specific performance? Under section 17, where he knew he had no title to the property when he contracted to sell or let it, or where, though he believed his title good, he cannot at the time fixed by the parties or the court for completion give the purchaser or lessee a title free from reasonable doubt. The provisions apply, as far as may be, to the sale or hire of movable property as well.

5. What is the effect of section 18? Where a plaintiff seeks specific performance of a written contract and the defendant sets up a variation, the plaintiff cannot obtain the performance sought except with that variation, in three cases: where by fraud, mistake of fact or misrepresentation the writing differs from what was agreed or omits terms on the basis of which the defendant contracted; where the object was to produce a legal result the contract as framed will not produce; and where the parties have varied the terms after execution.