“A valid contract requires voluntary offer, acceptance, and consideration.”

The Indian Contract Act, 1872, regulates the law relating to contracts in India, and is the key Act formulating contract law in India. The Act is based on the principles of English Common Law. It is applicable to all the States of India and determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by law.

A proposal on the basis of a trust becomes a promise and further cumulates into a valid enforceable contract.

Section 2 of The Indian Contract Act, 1872, reads:

Section 2

(a) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal;

(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;

(c) The person making the proposal is called the “promisor“, and the person accepting the proposal is called the “promisee“;

(d) 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;

(e) Every promise and every set of promises, forming the consideration for each other, is an agreement;

(h) An agreement enforceable by law is a contract;

Thus, whenever a proposal completes the parameters of becoming an enforceable legal agreement, it is called a contract. A contract may be, for the transfer of property, movable or immovable; service; or to complete anything that has a legal backing, and is not immoral or illegal.

It is believed that “Until a contract is signed, nothing is real”. However, a contract may be in writing or oral, but if it fulfils the parameters of being a valid contract, the same is duly enforceable. It may also be considered to be a valid contract, even if it is signed by the vendor alone, and not by the purchaser who accepted it, the said principle of law was recognised by the Supreme Court in Alka Bose v. Parmatma Devi & Ors. 2009(2) SCC 582 and again in K. Nanjappa (Dead) By Lrs. v. R.A. Hameed alias Ameersab (Dead) by Lrs. and Another 2015 AIR (SC) 3389.

Merely because there is a transition of a trust to promise to further a contract for consideration, it doesn’t really mean that it will always be honoured and completed for the purpose for what it was incorporated. As said earlier, a lot depends on the intention of the parties to the contract.

There may be circumstances where the contract is breached purposely, or it was based upon a contingency that never happened, or it becomes impossible to honour the contract because of “Force Majeure” popularly described as an act of God.

The term `Force Majeure‘ has been defined in Black’s Law Dictionary, as `an event or effect that can be neither anticipated nor controlled. It is a contractual provision allocating the risk of loss if performance becomes impossible or impracticable, especially as a result of an event that the parties could not have anticipated or controlled.’ Collins Dictionary defines “Force Majeure” as an “irresistible force or compulsion such as will excuse a party from performing his or her part of a contract”. The concept has its origins in French law where there are express force majeure provisions in the French civil code which excuse contractual performance where events have happened outside the parties’ control which could not have been foreseen at the time of contracting and which could not have been avoided by appropriate measures. It can also operate to exclude a claim for damages. However, force majeure is not a standalone concept of English law. Under English law, contractual performance will be excused due to unexpected circumstances, only if they fall within the relatively narrow doctrine of frustration. This doctrine will apply by default unless the parties agree something else in their contract.

While force majeure has neither been defined nor specifically dealt with, in Indian statutes, some reference can be found in Section 32 and Section 56 of the Indian Contract Act, 1872 (the “Contract Act”) which envisages that if a contract is contingent on the happening of an event or the an act which event becomes impossible to do, then the contract becomes void.

Yet, again there may be contracts which are legal when entered into, but becomes illegal by efflux of time or change of law. In such a situation, it is often said that no court will lend its aid to a man who files a claim based on an illegal act. Simply put, what this means is that the law will not afford relief to those who claim entitlements from an illegal act.

When it comes to “illegal” contracts, the general position has always been that the “loss will lie where it falls”, meaning that if a party that suffers loss due to an illegal contract, he cannot sue the other contracting party to recover such losses.

However, when a party cannot perform its obligations under a contract, because of an “act of God” or other unforeseen circumstances, the “act of God does not relieve the parties of their contractual obligations to an otherwise legal contract unless the parties expressly provide otherwise. However, where the parties include a force majeure clause in the contract – provision that allocates risk of non-performance in circumstances beyond the parties’ control – such “acts of God” or other circumstances, it may exempt them from performance.

Courts typically construe force majeure clauses narrowly. Therefore, whether disruption based on a pandemic, like COVID-19, can excuse performance will depend on the language of the particular force majeure clause. Under the law of many States in Unites States of America, including New York and Texas, the force majeure clause will be triggered only where the clause expressly includes the contingent event. Where a force majeure clause explicitly uses terms such as “disease,” “epidemic,” “pandemic,” “quarantine,” “act of government” or “state of emergency,” parties may, depending on the circumstances, be able to assert force majeure as a defense to non-performance or anticipatory breach in a situation like the COVID-19 pandemic.

Notably, it is not enough for the party asserting the force majeure clause to show that the “act of God”, or any other event made performance merely more difficult, or more economically burdensome; the party must show that performance of its contractual obligations has been prevented by the event. Taking precautionary measures, or making a voluntary decision not to perform, is not the same as being prevented from performance. In the absence of an express force majeure provision within an English law contract, parties may be able to rely upon the doctrine of frustration. By contrast, the doctrine of frustration is not available, if the contract contains an express force majeure provision, since the provision will be regarded as the agreed allocation of risk between the parties.

Having referred to the doctrine of frustration, it would be relevant to state the position of Indian law recognising the said doctrine. Under the Contract Act, it is Section 56 thereof, which lays down that principle.

Section 56 of The Indian Contract Act, 1872, lays down:

56. Agreement to do impossible act. – An agreement to do an act impossible in itself is void. – An agreement to do an act impossible in itself is void.” Contract to do act afterwards becoming impossible or unlawful.-A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.1 -A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.2″ Compensation for loss through non-performance of act known to be impossible or unlawful.-Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise. -Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.

Thus, Section 56 of the Contract Act provides for the doctrine of frustration.

The doctrine of frustration will apply if:

• The underlying event is not the fault of any party to the contract;

• The event or circumstance occurs after the formation of the contract and was not foreseen by the parties;

• It becomes physically or commercially impossible to fulfil the contract, or transforms the obligation to perform into a radically different obligation from that undertaken initially.

The doctrine of frustration results in the contract automatically coming to an end. The parties to the contract will no longer be bound to perform their future obligations. Because of the dramatic consequence’s contractual frustration, the threshold for proving frustration is much higher than that for most force majeure provisions, since it must be shown that the obligations impacted by the event or circumstance are fundamental to the contract.

Thus, it is apparent that at times even where both the parties to a contract have been ready and willing to perform their part of the contract, but because of some unforeseen reason, which is beyond their control, the contract becomes impossible to perform, and as a result gets frustrated.

However, the law envisages that in the case the contract cannot be performed, having become void, impossible or has become frustrated, then in such a situation, the advantages received by any party to the contract must be restored. This is a principle of equity and fair play.

Section 65 of the Indian Contract act which reads as under: –

Section 65 : Obligation of person who has received advantage under void agreement, or contract that becomes void – When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore, it, or to make compensation for it, to the person from whom he received it.

The above provision is based on the principle of equity and fair play, and to avoid undue enrichment, and is well elucidated in the English case, Fibrosa Spolka v. Fairbairn Lawson 1943 AC 32.

This case may be explained as follows:

The respondent contracted with the appellant, a Polish company, to manufacture certain machinery and deliver it to Gdynia. Part of the price was to be paid in advance, and the appellant accordingly paid Rs. 1000. The contract was frustrated by the occupation of Gdynia by hostile German forces in September 1939. The appellant thereupon requested the return of the Rs. 1000. This amount was not returned only because considerable work had already been put into construction of the machinery.

The amount recovered in the above case is to be construed, not as an action on the contract, but an action in restitution to recover the money paid on a consideration which had failed. Further, the term consideration as used in the above sentence is to be construed, not in the sense of consideration as may be necessary to the formation of the contract, but rather in the sense of the performance of an obligation already incurred. Therefore, the essence of Section 65 may be captured in that a party who has paid money but has received no part of the bargained – for performance, is entitled to recover it, for the consideration has completely failed.

There may be another set of circumstances where though the parties to an agreement or contract have entered into a valid agreement, and have fixed a target date to complete that contract, but one of the parties to the contract becomes dishonest, or has no means to fulfil the promise so made, or maybe is not ready or willing to perform his part, in all such circumstances the contract can be enforced for its due performance through the process of court, as is so defined under Section 2(h) of the Indian contract act that “An agreement enforceable by law is a contract”.

Under such circumstances, where there is a breach by a party to a contract and the other party wants its enforcement in a court of law, then a suit can be filed under the provisions of Specific Relief Act, 1963, claiming Specific Performance of the contract. Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract.

Section 16 of the Specific Relief Act reads as:

16. Personal bars to relief:

Specific performance of a contract cannot be enforced in favour of person–

(a) who has obtained substituted performance of contract under section 20; or

(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or

(c) who fails to prove that he has 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 terms of the performance of which has been prevented or waived by the defendant.

Explanation–For the purposes of clause (c)-

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

(ii) the plaintiff must prove performance of, or readiness and willingness to perform, the contract according to its true construction.

Thus, a suit for specific performance can be filed by any party, in a court of competent jurisdiction, who has suffered loss due to breach or non-performance of contract on part of the other party to the contract. The relief so claimed by a party, who has suffered a breach, was considered to be a discretionary relief, as provided under section 20(1) of the Specific Relief Act. However, enforceability of a contract was always considered as an alternative to awarding damages, and was classed as an equitable remedy, commonly used in the form of injunctive relief, concerning confidential information or real property.

It may well be noted that with the amendment of 2018 in Section 10 of the Specific Relief Act, the court’s discretion to order specific performance has been taken away, and now the courts must enforce the specific performance of the contract. Thus, the court shall now provide for the specific performance of the contract subject to the amended provisions of Section 11(2), Section 14 and 16. The amended section 10 reads as under: –

10. Specific performance in respect of contracts-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 old unamended Section 10 of the Act used the phrase “may, in the discretion of the court”. It is clear from these words that the intention of the legislature at the time of the original enactment of the Act was to give a discretion to courts in deciding to direct or to not direct specific performance of a contract. This discretion existed even when a contract satisfied the conditions that: –

The actual damage due to non-performance was unascertainable or

The compensation in money for non-performance would not afford adequate relief.

Further the explanation to the unamended section 10 gave the court a power of presumption, unless and until the contrary was proved.

• The courts had to presume vide explanation (i) to Section 10, in the cases of contract to transfer immovable properties, that the breach cannot be adequately relieved by compensation in money.

• The courts also had to presume vide explanation (ii), that in a case of transfer of movable properties, the breach can be relieved by compensation in money except in cases where the property is not an ordinary one or is of special value or interest to the plaintiff or consists of goods not easily obtainable,

• The said presumption also existed where the property is held by defendant as the agent or trustee of the plaintiff

Thus, relief of specific performance was granted only in some circumstances as a discretion of the court and the same was never an absolute rule. The discretionary nature of remedy created uncertainty and the grant of the relief was not uniform. The Courts were not bound to grant relief of specific performance merely because it was lawful to do so, and had a right to exercise its discretion owing to hardship, escalation of prices, grant of alternate relief and various other factors.

The Amendment in section 10 has entirely removed the concept of the court’s discretionary powers in granting relief of specific performance. In the amended Section 10, it is now clear that specific performance of a contract shall be enforced by the court subject to the limited grounds of refusal defined in the statute. With the amendment, specific performance now must be granted by courts unless the claim for relief is barred under limited grounds prescribed in the statute. Thus, specific performance of a contract has now been made a general rule and not a discretion as it used to be. However, the same is subject to the provisions of section 11(2), section 14 and 16. The Amendment has changed the nature of this specific relief from an equitable, discretionary remedy to a statutory remedy.

The said Act No. 18 of 2018 also amended the provisions of Section 14 of the Act which specifies the contracts which are not specifically enforceable. The old Section 14 is now substituted by the new one which specifically states the following category of contracts are not specifically enforceable: –

• Where a party to the contract has obtained substituted performance of a contract in accordance with the provisions of Section 20, or

• where the performance involves the performance of a continuous duty which the courts cannot supervise; or

• where a contract is dependent on the personal qualifications of parties that the court cannot enforce specific performance of its material terms; and

• where a contract in its nature is determinable.

As discussed above the said rule of specific performance is subject to the provisions of section 11(2), section 14 and 16.

It may further be noted that Section 16(c) of the Act put the onus of proof on the plaintiff to prove by way of evidence, that he had performed his part of contract or was willing to perform his part of contract. Clause (c) emphasizes the phrase `ready and willing’. It is the most important pre-requisite on the part of the plaintiff to file a suit for specific performance. This clause provides that the person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terms of the contract, which are to be performed by him.

These two words ‘readiness and willingness‘ are sometimes treated as synonymous, and are treated to have almost the same sense or meaning, but there is a clear-cut distinction between the two. While ‘willingness’ is merely a mental process, ‘readiness’ is something to do with translating that will into action, and is preceded by necessary preparation for being in a position to be ready. The words readiness and willingness, though often clubbed and termed together, are in-fact two different words, having entirely different requirements and parameters. In other words, we can say that while ‘willingness’ may he something to do mainly with a person’s mental process to do an act, his readiness implies a close proximity of such willingness and its ultimate physical manifestation. ‘Readiness’ must in all cases be backed by ‘willingness’, and its imminent physical action is demonstrated when it is about to be put into action. Time lag between the two may sometimes be very short, may even be negligible, but it must always be preceded by an intention or a will to do. In short, ‘readiness’ must be said to be the total equipment of a person who is willing to do a thing before he actually does it.

According to Bouvier’s Law Dictionary, IIIrd Revision, the expression ‘ready and willing‘ has been defined as “implies capacity to act as well as disposition.”

In Stroud Dictionary, the said expression is defined as under: “It implies not only the disposition but the capacity to do the act.”

In Webster Dictionary page 796, ‘ready‘ is defined as “prompt in performance or action” and ‘willing’ at page 1138 is defined as “having the mind inclined not averse, desirous, ready, relating to or pertaining to power or process of choice, volitional”

Corpus Juris Secundum defines the word “ready” as “variously defined as meaning prepared for what one is about to do or experience; prepared for immediate movement or action; causing no delay for lack of being prepared; equipped or supplied with what is needed for some act or event, inclined or willing.” It also mentions that ‘ready’ has been held to be synonymous with ‘prompt’ ‘Willing’ has been defined as “desirous, inclined or favourably disposed in mind; Ready; it has been compared with ‘justified.” `Willingness‘, according to Corpus Juris Secundum, “Signifies a mental state and may be evidenced by consent.”

There may be cases, where though a person may be willing, yet may not be able to do, or in a capacity to do, what he wills. He cannot be said to be ready to do it. In other cases, the person may possess all that is necessary to do an act. He may be ready, but if the will to do is not there, his willingness will be lacking. One cannot remain unaware of such cases, in which the plaintiff may go on demanding performance of the contract for keeping the agreement alive, yet really speaking he does not intend to pursue the matter, but only wants to keep it alive for some ulterior motives. Since while granting specific performance the Court acts in equity, it becomes necessary that a high standard of equitable conduct must be displayed by the plaintiff. It is for this reason that a rigor of this kind has been provided in Section 16. It is primarily to eliminate any element of fraud and risk of a party taking undue advantage of the other that the discretion to grant a decree of specific performance has still been left with the Court.

Many judicial decisions have dealt with the concept of readiness and willingness, but no strait jacket formula is available, and readiness and willingness in each case depend on its own facts. The Supreme Court of India in His Holiness Acharya Swami Ganesh Dass ji v. Sita Ram Thapar 1996 (4) SCC 526, drew a distinction between readiness to perform the contract and willingness to perform the contract. It was observed that by readiness it may be meant the capacity of the plaintiff to perform the contract which would include the financial position to pay the purchase price. However, as far as the willingness to perform the contract is concerned, conduct of the plaintiff has to be properly scrutinized, along with other attendant circumstances. The factum of readiness and willingness to perform plaintiff’s part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances.

It was held by a Division Bench of Delhi High Court in Raj Rani Bhasin And Ors. v. S. Kartar Singh Mehta AIR 1975 Del. 137:

“10 A distinction may be drawn between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract. This includes his financial ability to pay the purchase price. We will assume for the sake of argument that the plaintiff respondent could have raised the money to pay the purchase price if he wanted to do so. But the more important question is whether he was willing to perform his part of the contract even if ‘he had the financial capacity to do so. It is here that the plaintiff’s conduct has to be properly scrutinised. In our view, the trial Court has not done so. It has merely concentrated its attention on the financial ability of the plaintiff to raise the money to pay the purchase price but has not noticed the unwillingness of the plaintiff to perform his part of the contract and to present a sale deed on stamp paper for the execution of the defendants and to pay the purchase price from 16-8-1962 to 16-9-1962………..”

In M/s J.P. Builders and another v. A. Ramadas Rao and another 2011 (1) RCR (Civil) 604, further reasserting the distinction between the two words it was held by the Supreme Court:

“The words “ready” and “willing” imply that the person was prepared to carry out the terms of the contact. The distinction between “readiness” and “willingness” is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness.

Relying upon its earlier decision, it was again asserted by the Supreme Court in Kalawati (D) v. Rakesh Kumar 2018 AIR (SC) 960:

“There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. For determining his willingness to perform his part of the contract, the conduct has to be properly scrutinised….. The factum of readiness and willingness to perform plaintiff’s part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. The facts of this case would amply demonstrate that the petitioner/plaintiff was not ready nor had the capacity to perform his part of the contract as he had no financial capacity to pay the consideration in cash as contracted and intended to bide for the time which disentitles him as time is of the essence of the contract.”

“45……Further, the plaintiff is required to prove the fact that right from the date of execution of the agreement of sale till the date of passing the decree he must prove that he is ready and has always been willing to perform his part of the contract as per the agreement…”

Thus, it is apparent that for a person to seek specific performance for the breach of his contract, he must establish that the contract was a valid and legally enforceable contract and that he has not only been ready but also willing throughout to perform his part of the contractual obligations.

Though a sub clause (i) to explanation of section 16 (c) of Specific Relief Act clearly provides that where the contract involves payment of money, it shall not be essential for the plaintiff to tender the same in the court or to the defendant as was held in Sukhbir Singh v. Brij Pal Singh (1997) 2 SCC 200. However, taking a different view It was held in Vijay Kumar & Ors. v. Om Parkash, AIR 2018 SC 5098:

7.”……………………… As rightly pointed out by the Trial Court, the respondent-plaintiff could not produce any document to show that he had the amount of L 22,00,000 (Rupees Twenty Two Lakhs) with him on the relevant date; nor was he able to name the friends from whom he raised money or was able to raise the money. Further more, as rightly pointed out by the Trial Court, the respondent-plaintiff could have placed on record his Accounts Book, Pass Book or the Statement of Accounts or any other negotiable instrument to establish that he had the money with him at the relevant point of time to perform his part of the contract. We are, therefore, in agreement with the view taken by the Trial Court that the respondent-plaintiff has not been able to prove his readiness and willingness on his part.

8. The relief for specific performance is purely discretionary. Though the respondent-plaintiff has alleged that he was ready and willing to perform his part of the contract, the First Appellate Court ought to have examined first whether the respondent-plaintiff was able to show his capacity to pay the balance money. In our considered view, the First Appellate Court as well as the High Court has not properly appreciated the evidence and the conduct of the parties. The First Appellate Court as well as the High Court, in our view, was not right in reversing the judgment of the Trial Court and the impugned order cannot be sustained and liable to be set aside.”

It was further held in Ritu Saxena v. J.S. Grover & Anr. 2019 (4) RCR (C) 540:

15.”………………………………Such self-serving statements without any proof of financial resources cannot be relied upon to return a finding that the appellant was ready and willing to perform her part of the contract. The appellant has not produced any income tax record or the bank statement in support of her plea of financial capacity so as to be ready and willing to perform the contract. Therefore, mere fact that the bank has assessed the financial capacity of the appellant while granting loan earlier in respect of another property is not sufficient to discharge of proof of financial capacity in the facts of the present case to hold that the appellant was ready and willing to perform her part of the contract. Such is the finding recorded by both the courts below as well”

It was also held by the Supreme Court in Madhukar Nivrutti Jagtap & Ors. v. Smt. Pramilabai Chandulal Parandekar & Ors 2019 (4) RCR (C) 114:

13.2 “…………………… The question as to whether the plaintiff seeking specific performance has been ready and willing to perform his part of the contract is required to be examined with reference to all the facts and the surrounding factors of the given case. The requirement is not that the plaintiff should continuously approach the defendant with payment or make incessant requests for performance. For the relief of specific performance, which is essentially a species of equity but has got statutory recognition in terms of the Specific Relief Act, 1963[5*], the plaintiff must be found standing with the contract and the plaintiff’s conduct should not be carrying any such blameworthiness so as to be considered inequitable. The requirement of readiness and willingness of the plaintiff is not theoretical in nature but is essentially a question of fact, which needs to be determined with reference to the pleadings and evidence of parties as also to all the material circumstances having bearing on the conduct of parties, the plaintiff in particular………….”

While examining a case of Specific Performance of a Contract, the Apex Court, has laid down the parameters in which circumstances the relief of specific performance can be granted. In Kamal Kumar v. Prem Lata Joshi 2019 (1) RCR (C) 576, it was held:

10. “It is a settled principle of law that, the grant of relief of specific performance is a discretionary and equitable relief. The material questions, which are required to be gone into for grant of the relief of specific performance, are First, whether there exists a valid and concluded contract between the parties for sale/purchase of the suit property; Second, whether the Plaintiff has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract; Third, whether the Plaintiff has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed and whether such performance was in conformity with the terms of the contract; Fourth, whether it will be equitable to grant the relief of specific performance to the Plaintiff against the Defendant in relation to suit property or it will cause any kind of hardship to the Defendant and, if so, how and in what manner and the extent if such relief is eventually granted to the Plaintiff; and lastly, whether the Plaintiff is entitled for grant of any other alternative relief, namely, refund of earnest money etc. and, if so, on what grounds.( Emphasis supplied by the writer )

11. The aforementioned questions are part of the statutory requirements. These requirements have to be properly pleaded by the parties in their respective pleadings and proved with the aid of evidence in accordance with law. It is only then the Court is entitled to exercise its discretion and accordingly grant or refuse the relief of specific performance depending upon the case made out by the parties on facts”

Thus it is apparent from the above mentioned judicial pronouncements that readiness and willingness are two separate requirements, which have to be fulfilled by anyone seeking a discretionary relief of Specific Performance of his contract, and though both these phrases are used together, and are even inter mingled and sound synonymous, yet they are entirely different, always supplementing and complimenting each other.

The said requirements of readiness and willingness, as already discussed above, are like a backbone of the contract enforceability, and not only has to be proved once or at one stage, but has to be pleaded and proved throughout, from the date of the agreement to the accumulation of a same into a decree. A single default can change the fate of the case, whereby the discretion can be exercised by the court for refund of earnest money, or damages or simpliciter dismissal of the suit. Thus, based of the legal maxim that “he who seeks equity must do equity”, it can very well be said that readiness and willingness both must go hand in hand, and a single default on either side can result into fatality of the contract resulting in the failure of enforcement of the rule of specific performance.

Thus, it will be just apt to conclude by saying that “The readiness of doing doth expresse, No other but the doer’s willingnesse” – Robert Herrick.

(The author of this article is a practising advocate in the Punjab and Haryana High Court at Chandigarh and the views shared herein are personal only. The research conducted while writing this article was done with the help of Aarushi Mittal, a student of +2 whose hard work and inputs have really helped to write this article.)

“A contract is only as good as the people signing it.”

Contract Act is one of the principal statutes governing all the contractual relations, not only in the business world, but also words and promises that form a part of one’s daily routine. It is one of the most important legislations ever drafted by Britishers with an identical basic principle throughout the world, where they ruled. Before the said Act was brought on the statute book, the contractual relationship between people were governed by the personal customary laws of different communities – like different laws each for Christians, Greeks, Romans, Hindus and Muslims. Barter was also one of the common recognised modules for completing the business transactions.

Also, prior to the Contract Act, Britishers had their own law to govern to, but because of the existence of so many divergent laws, it created confusion for implementation of a contract. Therefore, with a view to promote the smooth business transactions, Contract Act was enacted.

The Indian Contract Act, 1872, regulates the law relating to contracts in India, and is the key Act formulating contract law in India. The Act is based on the principles of English Common Law. It is applicable to all the States of India and determines the circumstances in which promises made by the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act defines a contract as an agreement which is enforceable by law.

A proposal on the basis of a trust becomes a promise and further cumulates into a valid enforceable contract.

Section 2 of The Indian Contract Act, 1872, lays down:

Section 2

(a) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal;

(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;

(c) The person making the proposal is called the “promisor“, and the person accepting the proposal is called the “promisee“;

(d) 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;

(e) Every promise and every set of promises, forming the consideration for each other, is an agreement;

(h) An agreement enforceable by law is a contract;

Thus, whenever a proposal completes the parameters of becoming an enforceable legal agreement, it is called a contract. A contract may be, for the transfer of property, movable or immovable; service; or to complete anything that has a legal backing, and is not immoral or illegal.

A property, movable or immovable, is transferred from one person to another, under different situations and various circumstances and for different values. The transfer may be a gift, an inheritance or an asset acquired by paying full value.

A contract may be in writing or oral, but if it fulfils the parameters of being a valid contract, the same is duly enforceable. It may also be considered to be a valid contract even if it is signed by the vendor alone, and not by the purchaser who accepted it, the said principle of law was recognised by the Supreme Court in Alka Bose v. Parmatma Devi & Ors. 2009(2) SCC 582 and again in K. Nanjappa (Dead) By Lrs. v. R.A. Hameed alias Ameersab (Dead) by Lrs. and Another 2015 AIR (SC) 3389.

The transfer of movable goods and services was regulated to an extent by the Indian Contract Act, 1872. When a movable property is transferred inter-vivos, (between two living persons), Sales of Goods Act, 1930 comes into play (which was bifurcated from the main enactment i.e. Indian Contact Act, 1872). When an immovable property is transferred from a living person to another living person(s), the Transfer of Property Act, 1882, comes into play.

The Transfer of Property Act, 1882, (TPA) is an Indian legislation which regulates the transfer of property in India. It contains specific provisions regarding what constitutes a transfer and the conditions attached to it. It came into force w.e.f. 1st of July, 1882.

According to the Act, ‘transfer of property’ means an act by which a person conveys the property to one or more persons, or himself and one or more other persons. The act of transfer may be done in the present or for the future. The person may include an individual, company or association or body of individuals, and any kind of property may be transferred, including the transfer of immovable property.

Section 7 of the Transfer of Property Act lays down:

7. Persons competent to transfer.-Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force.

Thus, though a contract may be entered into between the parties to transfer the property, yet it has to be given legal transfer in the form of lease, sale, gift etc. under the provisions of Transfer of Property Act.

However, there may be occasions whereby one party to a contract is ready and willing to perform his part of the contract, and the other party is evasive or is guilty of breach. In those circumstances the party wanting an enforcement of the contract can seek legal protection by filing a civil suit under the provisions of Specific Relief Act. Yet again, there may be a situation where a party to a contract have done some act in furtherance of his contractual obligations, like delivery of possession of immovable property on receipt of earnest money. In such like situations Section 53A of the Transfer of Property Act comes as a protective shield to the person, who has taken the possession of the immovable property in furtherance of the contract, and has performed his part of the contract or is ready to perform his part of the contractual obligations. It was held by the supreme court in Delhi Motor Company v. UA Basrukar AIR 1968 SC 794 that any right available under 53A is available only as a defence and does not create a title in the defendant and he cannot maintain a suit on title. It was further held in Chetak Constructions Ltd v. Om Prakash AIR 2003 MP 145 that “it is a weapon of defence and not attack”.

The Doctrine of Part Performance, based on principle of equity, developed in England and was subsequently added to the Transfer of Property Act, 1882 via the Amendment Act of 1929. In law of contracts (for e.g., a contract for sale), no rights pass to another till the sale is complete But if a person after entering into a contract performs his part or does any act in furtherance of the contract, he is entitled to reimbursement or performance in case the other party becomes dishonest and is guilty of non performance or breach.

This section was first enacted in 1929 by the Transfer of Property (Amendment) Act, 1929, and import into India a modified form of the equity of part- performance as developed in England in Maddison v. Alderson (1883)8 App Cas 467. The enactment of the section sets at rest the considerable uncertainty prevailing in Indian Law, as can be seen by three decisions of the Privy Council in Mohomed Musa v. Aghore Kumar Gangoli (1914) ILR 42, Ariff v. Jadunath AIR 1931 PC 79 and Mian Pir Bux v. Sardar Mohomed Tahar AIR 1934 PC 235.

The section has been described by the Privy Council, and the Supreme Court, as a partial importation of the English equitable doctrine of part performance. By virtue of this section, part performance does not give rise to an equity, as in England, but to a statutory right. Though an oral agreement to sell or a contract is duly recognised by law in India, yet in order to take the defence of part-performance under section 53-A of the Transfer of Property Act the same is required to be in writing. This right is more restricted than the English equity in two respects, (1) there must be a written contract, and (2) it is only available as a defence.

Section 53A of TPA reads:

Part performance.-Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that 2 where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.

The provisions of Section 53A, aforesaid, envisage situations where under a contract for transfer of immovable property, the purchaser has paid the price, and has taken possession of the property, even though the transfer deed or conveyance has not been registered. In such cases the transferor is debarred from agitating his title to the property against the purchaser.

The essential conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53-A are:

(1) There must be a contract to transfer for consideration of any immovable property;

(2) the contract must be in writing, signed by the transferor, or by someone on his behalf;

(3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained;

(4) the transferee must in part performance of the contract take possession of the property, or of any part thereof;

(5) the transferee must have done some act in furtherance of the contract; and

(6) the transferee must have performed or be willing to perform his part of the contract.

If these conditions are fulfilled, then in a given case there is an equity in favour of the proposed transferee, who can protect his possession against the proposed transferor, even though a registered deed conveying the title is not executed by the proposed transferor. In such a situation equitable doctrine of part performance provided under Section 53-A comes into play and provides that the transferor, or any person claiming under him, shall be debarred from enforcing against the transferee, and persons claiming under him, any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract.

However, any transfer of rights with regard to anything that is valued for more than Rs 100 requires registration under the provisions of The Registration Act, 1908.

Section 17 of The Registration Act lays down:

17. Documents of which registration is compulsory

(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877 or this Act came or comes into force, namely:-

(a) instruments of gift of immovable property

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees, and upwards, to or in immovable property;

(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and

(d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

(e) non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property:]

PROVIDED that the State Government may, by order published in the Official Gazette, exempt from the operation of this sub-section any leases executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rent reserved by which do not exceed fifty rupees.

(2) Nothing in clauses (b) and (c) of sub-section (1) applies to-

(i) any composition-deed; or

(ii) any instrument relating to shares in a joint Stock Company, notwithstanding that the assets of such company consist in whole or in part of immovable property; or

(iii) any debenture issued by any such company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except insofar as it entitles the holder to the security afforded by a registered instrument whereby the company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or

(iv) any endorsement upon or transfer of any debenture issued by any such company; or

(v) any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or

(vi) any decree or order of a court 13[except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject-matter of the suit or proceeding;] or

(vii) any grant of immovable property by government; or

(viii) any instrument of partition made by a revenue-officer; or

(ix) any order granting a loan or instrument of collateral security granted under the Land Improvement Act, 1871, or the Land Improvement Loans Act, 1883; or

(x) any order granting a loan under the Agriculturists Loans Act, 1884, or instrument for securing the repayment of a loan made under that Act; or

(xa) any order made under the Charitable Endowments Act, 1890, (6 of 1890) vesting any property in a Treasurer of Charitable Endowments or divesting any such treasurer of any property; or]

(xi) any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the mortgage-money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or

(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a civil or revenue-officer.

[Explanation: A document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase money.]

(3) Authorities to adopt a son, executed after the 1st day of January, 1872, and not conferred by a will, shall also be registered.

However, with the passage of time and development of various legal complications, the said Section was amended by an Act No. 48 of 2001, w.e.f. 29.9.2001, whereby section 17 (1A) was incorporated which reads as:

17(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A.

Although, after the amendment in the Registration Act, it has become incumbent upon a party to a contract, who wishes to take the plea of 53A as part performance of his contract to have a registered agreement, yet, since a mere agreement to sell did not convey any title and as such did not require any registration, originally, a contract/agreement that satisfies the ingredients of Section 53A of 1882 Act was not compulsory registrable, whether under the Transfer of Property Act or the Indian Registration Act, 1908.

The said inconsistency led to two conflicting judgements, in the High Court of Punjab and Haryana, when a question arose as to whether in the absence of registration of a contract, which is not compulsorily registrable, whether a suit for specific performance of a contract is maintainable.

It was held in Gurbachan Singh v. Raghubir Singh 2010 (5) RCR (Civil) 737

“15. Thus, the substantial question of law involved in this appeal is as to “whether a suit for specific performance can be decreed on the basis of an unregistered agreement to sell in view of Section 17(IA) of the Indian Registration Act, 1908 (for short the ‘Act of 1908’) if the plaintiff claims himself to be in possession in part performance of the agreement.”

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“18. The facts are not much in dispute. The plaintiff is in possession of the property in dispute in part performance of the agreement to sell which has been made the basis of the suit for specific performance and is unregistered. Section 53-A of the Act of 1882 empowers the transferee to resist any attempt on the part of the transferor to disturb transferee’s lawful possession under the contract of sale in case of a suit having been filed for seeking decree for specific performance on the basis of an agreement to sell in which the plaintiff is already in possession in part performance of the contract but according to Section 17(1A) of the Act of 1908, the agreement shall have to be registered if it is executed on or after the commencement of the Registration and Other related laws (Amendment) Act, 2001 and if such documents are not registered, on or after such commencement, then the agreement shall have no effect for the purposes of the said Section. In the present case, since the agreement to sell is unregistered, therefore, in view of Section 49 of the Act of 1908 such an agreement would not be received as an evidence of any transaction affecting the property in question. Thus, the substantial question that has been raised by the learned counsel for the appellant is answered in his favour in affirmative and it is held that the agreement to sell being unregistered does not confer any right or title upon the plaintiff as the same cannot be received in evidence in view of Sections 17 (1A) and 49 of the Act of 1908……………………………………………

Thus, an unregistered agreement does not give a right to seek decree for specific performance and as a necessary corollary the plaintiff is not entitled to retain possession under the garb of such an agreement”

The said judgement though, clearly held that an unregistered agreement to sell does not give a right to the agreement holder in possession to seek specific performance, yet the relief for refund of earnest money, along with interest was granted. However, another coordinate bench of the Punjab and Haryana High Court in the case of Birham Pal and Ors. v. Niranjan Singh and Anr. 2011 (2) Law Herald (P&H) 1136 held that:

“12. Learned counsel for the appellants vehemently contended that according to impugned agreement, possession of the suit land was also delivered to the plaintiff and, therefore, the agreement required compulsory registration, but it is unregistered and, therefore, cannot be used as evidence. Reliance in support of this contention has been placed on judgment of Allahabad High Court in the case of Prag Narayan Mook Badhir Vidalaya Samiti v. Hukam Singh and others, 1997(1) Civil Court Cases 0458, judgment of this Court in the case of Gurbachan Singh v. Raghubir Singh, 2010(3) Civil Court Cases 731 (P&H) and judgment of Hon’ble Supreme Court in the case of K.B. Saha and sons Private Ltd. v. Development Consultant Limited, (2008) 8 Supreme Court Cases 564. I have carefully considered this contention, but the same cannot be accepted. Sub-Section (1A) of Section 17 of the Registration Act, requiring compulsory registration of an agreement whereby possession is also transferred, came into force with effect from 24.9.2001 whereas the impugned agreement is dated 10.4.2001. The said provision was thus not in existence, when the impugned agreement was entered into and, therefore, the impugned agreement did not require compulsory registration. In addition to it, even as per Section 17(1A) of the Registration Act, if an agreement whereby possession is delivered is unregistered, it cannot be used as defence for the purpose of Section 53A of the Transfer of Property Act. However, Section 17(1A) of the Registration Act does not make such an unregistered agreement completely invalid. Such an unregistered agreement can certainly be the basis of suit for specific performance of such agreement and at best same cannot be used as defence for the purpose of Section 53A of the Transfer of Property Act. Judgments cited by counsel for the appellants are not applicable to the instant case.”

The said conflict of judgements led to the matter being referred to a larger bench, whereby a division bench of Punjab and Haryana High Court, in the case of Ram Kishan and another v. Bijender Mann alias Vijender Mann and others 2013 (2) RCR (Civil) 419 held that:

“A reference relating to the apparent conflict between two Single Bench judgments titled as Gurbachan Singh v. Raghubir Singh, 2010(5) R.C.R.(Civil) 737 : 2010(2) Punjab Law Reporter 511 and Birham Pal and others v. Niranjan Singh and another, 2011 (2) Law Herald (Punjab and Haryana) 1136, has been placed before us. The questions that require to be answered are whether an unregistered agreement to sell, accompanied by delivery of possession or executed in favour of a person in possession, i.e. an agreement that envisages part performance, of an agreement to sell as envisaged by Section 53A of the Transfer of Property Act, can be received in evidence as proof of the agreement and as a natural corollary whether a suit for specific performance would lie on the basis of such an unregistered agreement to sell.

2. A relevant extract from the reference order reads as follows :-

“However, since there is a conflict regarding the legal position as to whether the suit for specific performance can be decreed on the basis of unregistered agreement to sell in view of Section 17(1A) of the Registration Act, 1908 and the other provisions referred to above, if the plaintiffs claim to be in possession in part performance of the agreement. Therefore, it would be appropriate, if the matter is referred to the Division Bench to decide the said issue of law.”

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“11. A conjoint appraisal of Sections 53A of the Transfer of Property Act, 1882 Sections 17(1A) and 49 of the Indian Registration Act, 1908, particularly the proviso to section 49 of the Indian Registration Act, in our considered opinion, leaves no ambiguity that, though, a contract accompanied by delivery of possession or executed in favour of a person in possession, is compulsorily registrable under Section 17(1A) of the Registration Act, 1908, but the failure to register such a contract would only deprive the person in possession of any benefit conferred by Section 53A of the 1882 Act. The proviso to section 49 of the Indian Registration Act clearly postulates that non-registration of such a contract would not prohibit the filing of a suit for specific performance based upon such an agreement or the leading of such an unregistered agreement into evidence.

12. A suit for specific performance based upon an unregistered agreement to sell accompanied by delivery of possession or executed in favour of a person who is already in possession, cannot, therefore, be said to be barred by Section 17 (1A) of the Registration Act, 1908.

13. Section 17(1A) merely declares that such an unregistered contract shall not be pressed into service for the purpose of Section 53A of the Transfer of Property Act, 1882. Section 17(1A) of the Registration Act, 1908, does not, whether in specific terms or by necessary intent, prohibit the filing of a suit for specific performance based upon an unregistered agreement to sell, that records delivery of possession or is executed in favour of a person to whom possession is delivered and the proviso to section 49 of the Indian Registration Act, 1908 put paid to any argument to the contrary.

14. We, therefore, hold that:

(a) a suit for specific performance, based upon an unregistered contract/agreement to sell that contains a clause recording part performance of the contract by delivery of possession or has been executed with a person, who is already in possession shall not be dismissed for want of registration of the contract/agreement;

(b) the proviso to Section 49 of the Registration Act, legitimises such a contract to the extent that, even though unregistered, it can form the basis of a suit for specific performance and be led into evidence as proof of the agreement or part performance of a contract.

15. We, therefore, express our respectful disagreement with the judgment in Gurbachan Singh v. Raghubir Singh (supra) and affirm the judgment in Mool Chand Mindhra v. Smt. Indu Bala, 2012(5) R.C.R.(Civil) 646 : P.L.R, 378 (R.S.A.No. 2056 of 2011). The reference is answered accordingly. The appeal be set down for hearing, as per roster.”

The cumulative effect of all these judgements is that although a suit for specific performance is clearly maintainable, even if the agreement in question is unregistered, yet for taking the plea of part performance under section 53A of the Transfer of Property Act, the said agreement is required to be compulsorily registered.

It would be pertinent to notice that still there is another set of unregistered documents, such as agreements to sell, will, a Special Power of Attorney (SPA), General Power of Attorney (GPA), etc., whereby though the intention of the vendor/ testator is clearly to transfer the 100% rights in the property by virtue of the said document, yet the same are not registered as title documents, in order to save the stamp duty and other registration charges.

The Supreme Court of India, while dealing with the abovementioned set of documents in the case of Suraj Lamp and Industries Pvt. Ltd. v. State of Haryana and another 2011(4) RCR (Civil) 669 has held that:

“15. Therefore, a SA/GPA/WILL transaction does not convey any title nor create any interest in an immovable property. The observations by the Delhi High Court, in Asha M. Jain v. Canara Bank, 2002(1) R.C.R.(Civil) 543 : 94(2001) DLT 841, that the “concept of power of attorney sales have been recognised as a mode of transaction” when dealing with transactions by way of SA/GPA/WILL are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/WILL transactions are some kind of a recognised or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognise or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.

16. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of ‘GPA sales’ or ‘SA/GPA/WILL transfers’ do not convey title and do not amount to transfer, nor can they be recognised or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognised as deeds of title, except to the limited extent of section 53A of the Transfer of Property Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales.

17. It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are not legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions and they should be given sufficient time to regularise the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship.

18. We have merely drawn attention to and reiterated the well-settled legal position that SA/GPA/WILL transactions are not ‘transfers’ or ‘sales’ and that such transactions cannot be treated as completed transfers or conveyances. They can continue to be treated as existing agreement of sale. Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their title. The said ‘SA/GPA/WILL transactions’ may also be used to obtain specific performance or to defend possession under section 53A of Transfer of Property Act. If they are entered before this day, they may be relied upon to apply for regularisation of allotments/leases by Development Authorities. We make it clear that if the documents relating to ‘SA/GPA/WILL transactions’ has been accepted acted upon by DDA or other developmental authorities or by the Municipal or revenue authorities to effect mutation, they need not be disturbed, merely on account of this decision. (Emphasis Supplied by the writer)

19. We make it clear that our observations are not intended to in any way affect the validity of sale agreements and powers of attorney executed in genuine transactions. For example, a person may give a power of attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance. A person may enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings and in that behalf execute an agreement of sale and grant a Power of Attorney empowering the developer to execute agreements of sale or conveyances in regard to individual plots of land or undivided shares in the land relating to apartments in favour of prospective purchasers. In several States, the execution of such development agreements and powers of attorney are already regulated by law and subjected to specific stamp duty. Our observations regarding ‘SA/GPA/WILL transactions’ are not intended to apply to such bona fide/genuine transactions.”

Thus what transpires from the above mentioned ratio of law is that though it is the mandate of law for anyone taking the plea of part performance to have his agreement registered after the amendment of 2001 under Section 17 of the Registration Act, 1908, yet the same does not bar the validity of the said agreements and the same are legally enforceable, as per law, in case of any of its breach.

Doctrine of Part Performance is an equitable doctrine and it is incorporated to protect breach of contractual frauds where one of the parties has already acted in good faith in furtherance to a written contract. This Doctrine is based on legal maxim, Equity looks to the intent rather than the form.

(The author is a practising advocate in the Punjab and Haryana High Court at Chandigarh and the views shared are personal only)