BLS LLB 5 Years Sem 5 Contract I 2025-26 - ATKT Set 2 75/25 Question Paper with Solutions

An invitation to offer, or invitation to treat, is a statement by which a person invites others to make proposals to him. It is not a proposal within Section 2(a) of the Indian Contract Act, 1872, and so cannot be accepted into a contract.

Two examples:

1. Goods displayed in a shop with a price tag, whether in a window or on a self service shelf. The customer makes the offer at the counter and the shopkeeper accepts it. Pharmaceutical Society of Great Britain v. Boots Cash Chemists (1953); Fisher v. Bell (1961).
2. An advertisement, catalogue or price list. Partridge v. Crittenden (1968). Equally, a tender notice, a company's prospectus inviting applications for shares, and an auctioneer's call for bids are invitations, the bid being the offer.

Misrepresentation is defined in Section 18: a positive assertion, in a manner not warranted by the information of the person making it, of that which is not true though he believes it to be true; any breach of duty which, without intent to deceive, gains an advantage by misleading another to his prejudice; and causing, however innocently, a party to make a mistake as to the substance of the thing which is the subject of the agreement.

Effect. Section 19: where consent to an agreement is caused by misrepresentation, "the agreement is a contract voidable at the option of the party whose consent was so caused."

The aggrieved party has an election: he may rescind the contract, restoring benefits received under Section 64; or he may affirm it and insist that he be put in the position in which he would have been if the representation made had been true.

The proviso to Section 19 is the limit: the contract is not voidable if the party whose consent was caused by misrepresentation had the means of discovering the truth with ordinary diligence.

Section 73 fixes the extent. The party who suffers by a breach is entitled to receive compensation for any loss or damage caused to him thereby which:

1. naturally arose in the usual course of things from such breach, or
2. which the parties knew, when they made the contract, to be likely to result from the breach of it.

"Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach."

The Explanation requires the court, in estimating the loss, to take into account the means which existed of remedying the inconvenience caused by the non performance, which is the statutory form of the duty to mitigate.

This section codifies the two rules in Hadley v. Baxendale (1854): ordinary damages, arising naturally, and special damages, arising from special circumstances communicated to the other party at the time of contracting.

Section 31(1) of the Specific Relief Act, 1963: "Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled."

Three conditions must be satisfied:

1. The instrument must be void or voidable against the plaintiff;
2. The plaintiff must have a reasonable apprehension of serious injury if it is left outstanding; and
3. The court must think it reasonable, in its discretion, to cancel it.

Section 31(2) provides that where the instrument has been registered under the Registration Act, 1908, the court shall send a copy of its decree to the registering officer, who shall note the cancellation on the copy of the instrument in his books.

The other two heads in Section 14 are: (a) where a party has obtained substituted performance under Section 20, and (b) a contract involving the performance of a continuous duty which the court cannot supervise, such as a building or maintenance contract requiring constant oversight.

For full marks, cover: the definition in the Information Technology Act, 2000, how it works, Sections 3, 5, 15 and 35, the electronic signature added in 2008, and the link to the Indian Contract Act through Section 10A.

A digital signature is a method of authenticating an electronic record by means of an asymmetric crypto system and a hash function. It is the electronic equivalent of a handwritten signature, and it is governed by the Information Technology Act, 2000, not by the Indian Contract Act.

Definitions.

• Section 2(1)(p), IT Act, 2000: "digital signature" means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of Section 3.
• Section 2(1)(ta), inserted in 2008: "electronic signature" means authentication of an electronic record by a subscriber by means of the electronic technique specified in the Second Schedule, and includes a digital signature. Electronic signature is therefore the wider term, and digital signature is one species of it.

• Section 10A, inserted in 2008: where a contract is formed by electronic means, "such contract shall not be deemed to be unenforceable solely on the ground that such electronic form or means was used for that purpose". This is the provision that connects the IT Act to the Indian Contract Act.
• Section 15: the subscriber must exercise reasonable care to retain control of the private key and must inform the Certifying Authority without delay if it is compromised.
• Section 35: a person may apply to a Certifying Authority for a Digital Signature Certificate, which binds the public key to the identity of its holder.
• Sections 17 to 34 establish the Controller of Certifying Authorities and the licensing regime.
• Section 85B of the Indian Evidence Act, 1872 raises a presumption as to electronic records and digital signatures, and Section 65B governs the admissibility of electronic records.

What it achieves:

• Authentication, that the record came from the named signatory;
• Integrity, that the record has not been altered since signing;

For full marks, cover: Section 2(d) and Currie v. Misa, the essentials with their cases, the rule in Section 25 with all its exceptions, adequacy under Explanation 2, and privity.

Section 2(d) of the Indian Contract Act, 1872: "When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise."

In Currie v. Misa (1875) it was defined as "some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other". It is the price for which the promise of the other is bought, and the maxim is ex nudo pacto non oritur actio, out of a bare promise no action arises.

Essentials

1. Natural love and affection. Section 25(1). The agreement must be in writing, registered, made on account of natural love and affection, and between parties standing in a near relation to each other. All four conditions are necessary: in Rajlukhy Dabee v. Bhootnath Mookerjee a registered maintenance agreement between a quarrelling husband and wife failed for want of natural love and affection.
2. Compensation for past voluntary service. Section 25(2). No writing is needed. Illustration: A finds B's purse and gives it to him; B promises to give A Rs. 50; this is a contract.
3. Promise to pay a time barred debt. Section 25(3). Must be in writing and signed by the person to be charged or his authorised agent.
4. Completed gift. Explanation 1 to Section 25: nothing in the section affects the validity, as between donor and donee, of any gift actually made.
5. Agency. Section 185: no consideration is necessary to create an agency.
6. Guarantee. Section 127: anything done, or any promise made, for the benefit of the principal debtor, is sufficient consideration to the surety.

For full marks, cover: Section 73 and the two rules in Hadley v. Baxendale as the framework, then each type with a definition and example, Section 74 on liquidated damages and penalty, and the duty to mitigate.

Damages are the monetary compensation payable to the party injured by a breach of contract. Section 73 allows compensation for loss which naturally arose in the usual course of things from the breach, or which the parties knew when they made the contract to be likely to result from it, and forbids compensation for any remote and indirect loss. This codifies Hadley v. Baxendale (1854).

1. Ordinary or general damages

Damages for loss arising naturally in the usual course of things. They are the normal measure and need no special notice. In a contract for the sale of goods, the measure is the difference between the contract price and the market price on the date of breach.

• breach of a promise to marry, where the injury is to feelings and reputation; and
• wrongful dishonour of a cheque by a banker when the customer has sufficient funds, where the rule is that damages are inversely proportionate to the amount of the cheque, since the smaller the cheque, the greater the damage to the customer's credit.

5. Liquidated damages and penalty (Section 74)

Where a sum is named in the contract as payable on breach, or the contract contains any other stipulation by way of penalty, the aggrieved party is entitled to reasonable compensation not exceeding the amount so named, whether or not actual damage or loss is proved.

• Indian law does not draw the English distinction between a genuine pre estimate of loss (liquidated damages, recoverable in full) and a penalty (irrecoverable). Section 74 allows only reasonable compensation in either case, and the named sum is a ceiling, not an entitlement.

For full marks, cover: Sections 36 and 37, then Section 38 in all three sub-sections with its illustrations, Section 41 on refusal, Section 40 on damages, and the contrast with temporary and mandatory injunctions.

Section 36 of the Specific Relief Act, 1963: "Preventive relief is granted at the discretion of the court by injunction, temporary or perpetual."

Section 37(2): "A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff."

When a perpetual injunction is granted (Section 38)

38(1). A perpetual injunction may be granted to the plaintiff to prevent the breach of an obligation existing in his favour, whether expressly or by implication.

38(2). When any such obligation arises from contract, the court shall be guided by the rules and provisions contained in Chapter II of the Act, that is by the law of specific performance.

• to restrain proceedings in a court not subordinate to that from which the injunction is sought;
• to restrain a person from applying to a legislative body;
• to restrain criminal proceedings;
• to prevent the breach of a contract which could not be specifically enforced;
• to prevent an act of which it is not reasonably clear that it will be a nuisance;
• to prevent a continuing breach in which the plaintiff has acquiesced;
• where equally efficacious relief can certainly be obtained by any other usual mode of proceeding, except in case of breach of trust;
• where the conduct of the plaintiff or his agents has been such as to disentitle him to the assistance of the court;
• where the plaintiff has no personal interest in the matter;
• (ha), inserted in 2018, where it would impede or delay the progress or completion of any infrastructure project.

Related provisions

• Paragraph 2. Each promisor may compel contribution. "Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract."
• Paragraph 3. Sharing of loss by default in contribution. "If any one of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares."

So D was entitled to compel C alone to pay the whole Rs. 3,000, and C is now entitled to contribution from A and B.

(i) What amount can C recover from B?

C can recover Rs. 1,250 from B.

The working, step by step:

1. Equal shares. There are three joint promisors, and the debt is Rs. 3,000. Under paragraph 2, each must contribute equally, so each share is Rs. 1,000.
2. C has paid the whole Rs. 3,000, so he has paid Rs. 2,000 more than his own share and is entitled to recover that from A and B.

• A's insolvency does not extinguish his liability to contribute; it only limits what can actually be realised. C's right of contribution under paragraph 2 of Section 43 stands, and he may prove his claim as a creditor in the insolvency proceedings.
• Since A's assets pay half of his debts, C will receive a dividend of fifty paise in the rupee on his Rs. 1,000 claim, that is Rs. 500.
• The balance of Rs. 500 is A's default, and it is that default which paragraph 3 spreads equally between B and C, as worked out above.

Section 58. Alternative promise, one branch being illegal. "In the case of an alternative promise, one branch of which is legal and the other illegal, the legal branch alone can be enforced."

Illustration. "A and B agree that A shall pay B 1,000 rupees, for which B shall afterwards deliver to A either rice or smuggled opium. This is a valid contract to deliver rice, and a void agreement as to the opium."

Applying the section:

1. Bheem's promise is an alternative promise: he will deliver either rice or opium.
2. Delivery of rice is lawful. Delivery of opium without authority is forbidden by law, being an offence under the Narcotic Drugs and Psychotropic Substances Act, 1985, so that branch has an unlawful object within Section 23 and is void.
3. Under Section 58, the legal branch alone can be enforced. The contract stands as a valid contract to deliver rice, and is void only as to the opium.
4. Amar has already paid the Rs. 1,000, so consideration has moved, and he may sue for delivery of the rice, or for damages under Section 73 if delivery is not made.

1. Agreements by persons incompetent to contract. Sections 10 and 11, read with Mohori Bibee v. Dharmodas Ghose (1903).
2. Agreements made under a bilateral mistake of fact essential to the agreement. Section 20.
3. Agreements the consideration or object of which is unlawful. Section 23, that is forbidden by law, defeating the provisions of any law, fraudulent, involving injury to person or property, or immoral or opposed to public policy.
4. Agreements with unlawful consideration or object in part. Section 24, where the unlawful part cannot be severed.
5. Agreements without consideration. Section 25, subject to its three exceptions.
6. Agreements in restraint of marriage. Section 26, other than a marriage of a minor.
7. Agreements in restraint of trade. Section 27, subject to the exception for the sale of goodwill.
8. Agreements in restraint of legal proceedings. Section 28, subject to the two exceptions for arbitration.
9. Agreements the meaning of which is uncertain. Section 29.
10. Agreements by way of wager. Section 30.

(ii) In what circumstances can a person who is not a party to a contract sue upon it?

For full marks, cover: the doctrine of privity of contract, Dunlop v. Selfridge which is this exact fact pattern, the Indian position in M.C. Chacko, the conclusion that Amit cannot sue Charu, and then all the exceptions to privity.

(i) Can Amit sue Charu?

No. Amit cannot sue Charu. There is no privity of contract between them.

This is the fact pattern of Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge and Co. Ltd. (1915) with the names changed.

3. Amit, not being a party to the Bhavna and Charu contract, cannot sue upon it, however clearly the condition was intended for his benefit.
4. Bhavna, however, can sue Charu, since she is a party to that contract. Whether she chooses to do so is another matter, and it is precisely this practical gap that makes the rule inconvenient for manufacturers.

The Indian position is the same. In M.C. Chacko v. State Bank of Travancore (1970), the Supreme Court held that a person not a party to a contract cannot enforce its terms, even if the contract was made for his benefit, unless the case falls within a recognised exception.

Distinguish privity of contract from privity of consideration. Section 2(d) allows consideration to move from "the promisee or any other person", so privity of consideration is not required in India (Chinnaya v. Ramayya, 1882 Mad). But privity of contract still is. Candidates constantly confuse the two, and the distinction is worth stating expressly.

3. Acknowledgement or estoppel. Where a party to the contract acknowledges his liability to the third person, expressly or by conduct, he may be sued by him. Where A gives money to B to be paid to C, and B acknowledges to C that he holds it for him, C may sue B.
4. Agency. A principal, even undisclosed, may sue on a contract made by his agent within the scope of his authority.
5. Covenants running with land. A person who purchases land with notice of restrictive covenants affecting it is bound by them, even though he was not a party to the covenant. Tulk v. Moxhay (1848).
6. Assignment of contract. The assignee of a benefit under a contract may sue upon it, though the burden of a contract cannot be assigned without consent.
7. Contracts entered into through an agent, and rights under a negotiable instrument in the hands of a holder in due course.
8. Statutory exceptions, such as the right of a third party to sue an insurer directly under Section 149 of the Motor Vehicles Act, 1988, and the wide definition of "consumer" and of a "complainant" under the Consumer Protection Act, 2019.

Riya has a right of way to the main road. It may rest on any of the following, and the plaint should plead whichever the facts support:

• an easement of right of way by grant, if the way was expressly granted;
• an easement by prescription under Section 15 of the Indian Easements Act, 1882, acquired by peaceable and open enjoyment, as of right, without interruption, for twenty years;
• an easement of necessity under Section 13 of that Act, which arises where the land cannot be used at all without the way. The facts say this is Riya's only access to the main road, which points directly at a way of necessity.

Blocking the only access to a person's land is both an infringement of that right and an actionable private nuisance, since it substantially interferes with the enjoyment of her property.

Step 4. Perpetual injunction, Section 38. At the trial, Riya should seek a perpetual injunction restraining Karan from obstructing the way in future. Section 38(3) applies: the invasion is of her right to the enjoyment of property, there is no standard for ascertaining the actual damage caused by being cut off from the road, compensation in money would not afford adequate relief, and an injunction prevents a multiplicity of proceedings that would otherwise follow every fresh obstruction.

Step 5. Damages, Section 40. The court may award damages in addition to, or in substitution for, the injunction, provided Riya claims them in her plaint, with liberty to amend at any stage.

Conclusion: an interim injunction now, and at trial a mandatory injunction to demolish the obstruction together with a perpetual injunction restraining further interference.

(ii) Perpetual injunction distinguished from mandatory injunction

For full marks, cover: all six modes with sections, that is performance, agreement, impossibility, lapse of time, operation of law and breach, and finish with the remedies available for breach.

Discharge of a contract means the termination of the contractual relation, so that the parties are freed from the obligations they undertook. There are six modes.

1. Discharge by performance (Sections 37 to 61)

Section 37: "The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law."

• Actual performance. Both parties do precisely what they promised. Performance must be complete, precise and unconditional.

2. Discharge by mutual agreement or consent (Sections 62 to 67)

The maxim is eodem modo quo quid constituitur, eodem modo destruitur: a thing may be undone in the same way it was done.

• Novation (Section 62), the substitution of a new contract for the old, between the same or different parties.
• Rescission (Section 62), cancelling the contract without substituting another.
• Alteration (Section 62), changing a material term by mutual consent, the parties remaining the same.
• Remission (Section 63), where the promisee dispenses with or remits performance wholly or in part, extends the time, or accepts any satisfaction he thinks fit. No consideration is required, a departure from the English rule in Foakes v. Beer.
• Waiver, the intentional abandonment of a right.
• Merger, where an inferior right is absorbed into a superior right vested in the same person.
• Section 67: where the promisee neglects or refuses to afford reasonable facilities for performance, the promisor is excused for non performance so caused.

3. Discharge by impossibility of performance (Section 56)

• Section 65: restitution of any advantage received.
• Satyabrata Ghose v. Mugneeram Bangur and Co. (1954 SC): Section 56 is a positive rule of law, and "impossible" means impracticable and useless from the point of view of the object of the contract, not physically impossible.

4. Discharge by lapse of time (Limitation Act, 1963)

If a party does not sue within the period prescribed by the Limitation Act, 1963, his remedy is barred. The period for a suit for breach of contract is three years from the accrual of the cause of action; for specific performance, three years under Article 54. A written and signed promise to pay a time barred debt is enforceable under Section 25(3) of the Contract Act.

5. Discharge by operation of law

• Death, where the contract depends on the personal skill of the deceased; other rights and liabilities devolve on the legal representatives.
• Insolvency. The insolvent's property vests in the official assignee, and an order of discharge releases him.
• Merger of rights.

3. Suit upon quantum meruit;
4. Specific performance and injunction under the Specific Relief Act, 1963.

Section 10 states what makes an agreement enforceable: "All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void." It adds that nothing in the section affects any law by which a contract must be made in writing or in the presence of witnesses, or registered.

The essentials follow.

1. Offer and acceptance, resulting in an agreement

There must be a lawful offer by one party and a lawful acceptance by the other.

• Section 2(a) defines a proposal; Section 2(b) an acceptance.
• Acceptance must be absolute and unqualified (Section 7(1)), expressed in a usual and reasonable manner (Section 7(2)), and communicated (Section 4).
• A counter offer destroys the original offer: Hyde v. Wrench (1840).
• Silence is not acceptance: Felthouse v. Bindley (1862).
• There can be no acceptance in ignorance of the offer: Lalman Shukla v. Gauri Dutt (1913 All).

3. Lawful consideration

Section 2(d) defines consideration; Section 25 provides that "an agreement made without consideration is void", subject to its exceptions.

• Consideration must move at the desire of the promisor: Durga Prasad v. Baldeo (1880 All).
• It may move from the promisee or any other person: Chinnaya v. Ramayya (1882 Mad). Privity of consideration is not required in India.
• It may be past, present or future.
• It need not be adequate but must be real (Explanation 2 to Section 25).
• It must be lawful (Section 23).
• Exceptions where no consideration is needed: Sections 25(1), 25(2), 25(3), Explanation 1 (completed gift), Section 185 (agency), Section 127 (guarantee), Section 63 (remission), and charitable subscriptions where a liability has been undertaken on the faith of the promise (Kedar Nath v. Gorie Mohamed, 1886 Cal).

4. Capacity of parties

Section 11: every person is competent to contract who is of the age of majority, of sound mind, and not disqualified by any law to which he is subject.

• Undue influence: Mannu Singh v. Umadat Pande (1890 All); Subhas Chandra Das Mushib v. Ganga Prasad Das Mushib (1967 SC). Section 16(3) shifts the burden of proof to the dominant party where the transaction is unconscionable.
• Fraud: Derry v. Peek (1889); mere silence is not fraud unless there is a duty to speak or silence is equivalent to speech.
• Misrepresentation: the contract is voidable, but there are no damages.
• Mistake: a bilateral mistake of essential fact makes the agreement void (Section 20); a unilateral mistake does not affect it (Section 22).
• Effect: coercion, undue influence, fraud and misrepresentation make the contract voidable (Sections 19 and 19A); mistake makes it void.

8. Certainty and possibility of performance

Section 29: "Agreements, the meaning of which is not certain, or capable of being made certain, are void." Illustration: A agrees to sell to B "a hundred tons of oil", without saying what kind; the agreement is void for uncertainty. Section 56, first paragraph: an agreement to do an act impossible in itself is void.

9. Legal formalities

The Act generally requires no writing, and an oral contract is as valid as a written one. But the saving clause in Section 10 preserves any law requiring writing, attestation or registration, and other statutes impose such requirements, for example the Transfer of Property Act, 1882 for the sale of immovable property, the Registration Act, 1908, and Section 25(1) and 25(3) of the Contract Act itself.

1. Agreements by incompetent persons (Sections 10 and 11)

An agreement by a minor, a person of unsound mind, or a person disqualified by law is void. Mohori Bibee v. Dharmodas Ghose (1903 PC) settled that a minor's agreement is void ab initio.

2. Agreements made under a bilateral mistake of fact (Section 20)

"Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void." The Explanation excludes an erroneous opinion as to value. Contrast Section 21, under which a mistake as to a law in force in India does not make a contract voidable, and Section 22, under which a unilateral mistake of fact does not.

3. Agreements with unlawful consideration or object (Section 23)

The consideration or object is unlawful if it is forbidden by law; is of such a nature that if permitted it would defeat the provisions of any law; is fraudulent; involves or implies injury to the person or property of another; or the court regards it as immoral or opposed to public policy. Every such agreement is void.

6. Agreements in restraint of marriage (Section 26)

"Every agreement in restraint of the marriage of any person, other than a minor, is void."

The restraint may be total or partial: an agreement not to marry at all, not to marry a particular person, or not to marry for a fixed period, is equally void. The only exception is a minor, whose marriage may lawfully be restrained. The policy is that marriage is a matter of personal liberty and status, and a contract may not fetter it. A penalty on marriage is void for the same reason.

7. Agreements in restraint of trade (Section 27)

"Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void."

Exception 1 (in the section itself). Sale of goodwill. One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer or any person deriving title to the goodwill from him carries on a like business there, provided the limits appear to the court reasonable, regard being had to the nature of the business.

India has no reasonableness test. Unlike English law, which upholds a restraint that is reasonable in duration, area and scope (Nordenfelt v. Maxim Nordenfelt, 1894), Section 27 avoids every restraint, partial or total, reasonable or unreasonable, except those saved above. Madhub Chunder v. Rajcoomar Doss (1874 Cal) settled this.

8. Agreements in restraint of legal proceedings (Section 28)

An agreement is void to the extent that it:

• (a) restricts a party absolutely from enforcing his rights under or in respect of any contract by the usual legal proceedings in the ordinary tribunals, or limits the time within which he may enforce them; or
• (b) extinguishes the rights of any party, or discharges any party from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights.

Exception 1. Arbitration of future disputes. The section does not render illegal a contract by which two or more persons agree that any dispute which may arise between them shall be referred to arbitration, and that only the amount awarded shall be recoverable.

10. Agreements by way of wager (Section 30)

"Agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made."

Exceptions in the section: it does not render unlawful a subscription or contribution towards any prize of five hundred rupees or upwards to be awarded to the winner of a horse race, and it does not affect any law relating to lotteries.

A wager is void but not illegal under the general law, so collateral transactions are enforceable: Gherulal Parakh v. Mahadeodas Maiya (1959 SC). In Maharashtra and Gujarat the Bombay Wagers (Amendment) Act, 1865 makes wagers illegal, and collateral transactions fall with them.

11. Agreements contingent on an impossible event (Section 36)

"Contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties at the time when it is made." Illustration: A agrees to pay B Rs. 1,000 if B marries A's daughter C; C was dead at the time of the agreement; the agreement is void.

Section 65 applies where the invalidity is discovered. It does not assist a party who knew from the outset that the agreement was unlawful, which is why the moneylender in Mohori Bibee could not recover, and why a party to an agreement unlawful under Section 23 cannot recover what he paid under it.

• Before 2018, specific performance was discretionary and exceptional. The old Section 10 allowed it where there was no standard for ascertaining actual damage or where compensation would not afford adequate relief, and the old Section 20 conferred a wide discretion on the court, with recognised grounds of refusal such as unfair advantage, hardship, and inequitable conduct.
• From 1 October 2018, specific performance is the rule. Section 10 now reads: "The specific performance of a contract shall be enforced by the court subject to the provisions contained in sub-section (2) of section 11, section 14 and section 16." The general discretion is gone, and the old Section 20 has been substituted by a provision on substituted performance.

When specific performance is enforced

Section 10. Enforcement is mandatory, subject to Sections 11(2), 14 and 16.

Section 11. Contracts connected with trusts. 11(1): a contract shall be specifically enforced where the act agreed to be done is in the performance, wholly or partly, of a trust. 11(2): a contract made by a trustee in excess of his powers or in breach of trust cannot be specifically enforced.

Section 12. Specific performance of part of a contract.

Who may sue, and against whom

Section 15. Who may obtain specific performance. Besides a party to the contract: his representative in interest or principal, unless the contract depends on personal skill or volition; a person beneficially entitled under a marriage settlement or a family arrangement compromising doubtful rights; a remainderman; a reversioner in possession and, in a proper case, a reversioner in remainder; the new company on an amalgamation; a company in respect of a pre incorporation contract made by its promoters for its purposes and warranted by the terms of incorporation, if the company has accepted the contract and communicated the acceptance; and a limited liability partnership after amalgamation.

Section 19. Against whom relief may be enforced. Against either party; against any person claiming under him by a title arising subsequently, except a transferee for value who has paid his money in good faith and without notice of the original contract; against a person claiming under a prior title which could have been displaced by the defendant; and against the new company or limited liability partnership on amalgamation, and the company in a pre incorporation contract case.

Section 16. Personal bars to relief. Specific performance shall not be enforced in favour of a person who (a) has obtained substituted performance; (b) has become incapable of performing, or violates any essential term, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by it; or (c) fails to prove that he has performed, or has always been ready and willing to perform, the essential terms on his part. Explanation (ii) provides that where the contract involves the payment of money, actual tender or deposit is not essential unless the court so directs, but readiness and willingness must be averred and proved.

Section 17. A contract to sell or let immovable property cannot be enforced in favour of a vendor or lessor who knew he had no title.

Ancillary reliefs

• Section 21. The plaintiff may claim compensation in addition to or in substitution for performance, provided it is claimed in the plaint, with liberty to amend.
• Section 22. He may also claim possession, partition and separate possession, or a refund of earnest money or deposit, again if specifically claimed.

For full marks, cover: Section 5 as the title based remedy and Section 6 as the summary possessory one, each in full, the table of differences, then the injunctions that protect possession under Sections 38 and 39, and the policy against self help that ties them together.

The Specific Relief Act, 1963, deals with the recovery of possession of immovable property in Sections 5 and 6, in Chapter I of Part II, and protects possession further by injunction under Sections 36 to 42.

1. Section 5. Recovery of specific immovable property

"A person entitled to the possession of specific immovable property may recover it in the manner provided by the Code of Civil Procedure, 1908."

Features:

• The suit is founded on title. The plaintiff must prove that he is entitled to possession, ordinarily as owner, and he recovers on the strength of his own title and not on the weakness of the defendant's.

6(4). "Nothing in this section shall bar any person from suing to establish his title to such property and to recover possession thereof."

Features:

• The suit is possessory, not proprietary. The only issues are whether the plaintiff was in possession and whether he was dispossessed otherwise than in due course of law.
• Title is no defence. However good the defendant's title, he cannot set it up in this suit, because he had no right to take the law into his own hands.
• The proceeding is summary and quick, which is the whole reason for the six month limitation and the bar on appeal and review. The only recourse against the decree is a writ petition or revision, on the limited grounds available there.
• The possession protected is settled possession, not the momentary possession of a trespasser who has just moved in. The section does not protect a rank trespasser against the true owner's lawful entry.
• Section 6(4) preserves the defeated party's right to sue on title under Section 5; the two are complementary, not alternatives.

3. Section 5 and Section 6 compared

4. Injunctions protecting possession (Sections 36 to 42)

Possession is also protected by preventive relief.

• Section 38. Perpetual injunction may be granted where the defendant invades or threatens to invade the plaintiff's right to, or enjoyment of, property, in particular where there is no standard for ascertaining the actual damage, where compensation in money would not afford adequate relief, or to prevent a multiplicity of judicial proceedings. The Explanation treats a trespass occasioning irreparable injury as such an invasion.
• Section 39. Mandatory injunction, to compel the defendant to undo what he has done, for example to demolish an encroaching structure or to restore possession of a part encroached upon.
• Temporary injunction under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, on a prima facie case, balance of convenience and irreparable injury, to preserve possession during the suit.
• Section 40, damages in addition to or in substitution for an injunction.
• Section 41 lists the grounds of refusal, including acquiescence and the availability of equally efficacious relief.