The law is well settled that a Suit for Specific performance of a Contract, under Article 54 of the Indian Limitation Act, 1963, involving Sale of an immovable property, must be filed within three years from the date fixed for the performance of such contract, or, if no such date is fixed, when the Buyer has notice that performance is refused.
Section 55(6)(b) of the Transfer of Property Act, 1882, lays down buyer’s rights before completion of Sale transaction. The Section, inter alia, mandates that buyer is entitled to a charge on the property, as against the seller and all persons claiming under him, to the extent of the seller's interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount, except in cases where the Buyer has improperly declined to accept delivery of the property.
Therefore, a careful reading of Section 55(6)(b) would infer that a statutory charge is created upon the concerned immovable property, by virtue of Contract for Sale of an immovable property, unless contrary intentions of the parties appears from the terms of the contract.
Now let us look at Article 62 of the Limitation Act, 1963. It says that, for the recovery of money which is secured by a Mortgage or which is secured by a charge upon an immovable property, a Suit may be filed for the said money, within twelve years from the date, when the money which is sued for, becomes due.
Therefore, a safe inference may be drawn that to recover Purchase Money paid (alongwith interest) under a Contract for Sale of an immovable property, the Limitation period extends to 12 years and not 3 years. The only distinction is that, under Article 62, the Buyer can recover only the purchase money alongwith interest; but cannot claim damages, if he has sustained by reason of non performance of the Contract.
The Apex Court in a case before it dealt with this proposition.
Delhi Development Authority Versus Skipper Construction Company Private Limited [AIR 2000 SC 573]
Para 28: Learned counsel made submissions on the following issues:
(1) Whether the purchasers under agreements in respect of Jhandevalan property have a statutory charge in view of Section 55(6)(b) of the Transfer of Property Act -against the vendor's interest in the property? Whether such charge can be enforced against any substituted security?
(2) Whether the purchasers are entitled to interest under Section 55(6)(b) of the Transfer of Property Act and also in view of the observations made in the Judgement of this Court dated 6.05.1996?
(3) Whether the period of limitation for enforcing claims by the purchasers would be 12 years under the Limitation Act?
Points 1 & 2
Para 29: Those points depend upon the effect of the provisions in Sub-clause (6) of Section 55 of the Transfer of Property Act. That Section starts with the words "In the absence of a contract to the contrary, and reads thus (insofar as it is material for our purpose):
“Section 55 (6) (b) : The buyer is entitled
(a) . . . . . . . . . . . . .
(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him to the extent of the seller's interest in the property, for the amount any purchase-money property paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescissions."
It is plain from the above provision that, in the absence of a contract to the contrary, the buyer will have a charge on the seller's interest in the property which is the subject matter of the sale agreement insofar as the purchase money and interest on such amount are concerned, unless the buyer has improperly declined to accept delivery. The charge is available against the seller and all persons claiming under him. This charge in favour of the buyer is the converse of the seller's charge under Section 55(4)(b). The buyer's charge under the Section is a statutory charge and differs from a contractual charge which a buyer may be entitled to claim under a separate contract (Chettiar Firm V/s. Chettiar), AIR 1941 PC 47. No charge is available unless the agreement is genuine. (T.N. Hardas V/s. Babulal, AIR 1973 SC 1363). As pointed out in Mulla's Commentary of Transfer of Property Act, 8th Ed. the charge on the property under Section 55 (6) (b) is enforceable not only against the seller but against all persons claiming under him. Before the amending Act of 1929, the words 'with notice of payment' occurred after the words "all the persons claiming under him". These words were omitted as they allowed a transferee without notice to escape. After the Amendment of 1929, notice to the purchaser has now become irrelevant.
Para 30: When the property upon which the charge is created gets converted into another form, the buyer will be entitled to proceed against the substituted security. This is a general principle of law and Section 73 of the Transfer of Property Act is only an example of the said principle. The above principle has been applied to enforce mortgage on substituted securities the same principle which is applicable to mortgages applies to cases of statutory charge under Section 55(6)(b). If immovable property is charged and is converted into another property or money, then the charge will fasten on the property or money into which the subject-matter of the agreement is converted.
POINT 3:
Para 32: Article 62 of the Limitation Act, 1963 (which corresponds to Art. 132 of the Limitation Act 1908) provides a period of 12 years, “to enforce payment of money secured by a mortgagee or otherwise charged upon immovable property”. Time runs from the date “when money becomes due.”
Para 33: From the above Article, it is clear that the period of limitation for enforcement of the statutory charge created under Section 55(6) (b) is 12 years from the date when becomes due and not 3 years. The period remains the same even for enforcement of the charge on the substituted security. Point 3 is decided accordingly.
Temporary Injunction upon the property: The Apex Court in a case before it, have held that the Buyer would be entitled to a temporary injunction restraining the defendants from disposing of the land during the pendency of the suit. Videocon Properties Ltd. Versus Dr.Bhalchandra Laboratories [AIR 2004 SC 1787]
Thank you.
Sandeep Jalan
Advocate.
Legal issues !!
If you are facing any of these issues like (a) Recovery of Moneys (b) Immovable property disputes (c) grievances against Municipalities & Govts., including challenge to legitimacy of laws etc. (d) grievances against illegalities and highhandedness of Police like illegal arrests, refusal to register FIR, deliberately flawed investigations, etc (e) False FIRs (f) False Claims (g) False evidences (h) Grievances against Judges (i) Illegal or perverse Orders of the Courts / Tribunals, among others.
or
If you are looking for draft of any legal proceeding; or if you want to know the nature and attribute of any legal proceeding; or if you want to know the procedure followed in any legal proceeding; or if you want to know the grounds on which any order of the court / tribunal is challenged; or if you are facing any frivolous litigation.
https://www.litigationplatform.com/
Thank you.
Dear Readers,
Shailesh Gnadhi, the former Central Information Commissioner, at
Delhi, has written a E-Book on RTI. The said Book is co-authored by Mr. Pralhad
Kachare who is a bureaucrat and was heading the RTI training cell at YASHADA.
He has developed the training material at YASHADA and trained many officers. A
unique feature of this book is that its draft was shared with former Chief
Information Commissioner Mr. Satyananda Mishra and Mr. Toby Mendel who is one
of the leading international experts in transparency laws. I believe the said
Book is the most authentic interpretation of the RTI Act. Many decisions
presently being followed do not reflect the words of the Act passed by
parliament, and the law is slowly being amended by misinterpretation. Most of
the decisions violate the Supreme Court’s earlier pronouncements given in the
Raj Narain , SP Gupta, ADR and Rajagopal cases# . This book could empower
citizens and is a plea to all adjudicators to follow the words of the law. Presently,
the ebook can be downloaded free of cost at link http://www.satyamevajayate.info/
Comments
Office Spaces in Sector 137
Section 54 of the TP Act makes it clear that a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property. Refer to this Court's judgment in Narandas Karsondas v. S.A. Kamtam and Anr.
The protection provided under Section 53A of the Act to the proposed transferee is a shield only against the transferor. It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance to such an agreement.
It has nothing to do with the ownership of the proposed transferor who remains the full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee. Such a right to protect possession against the proposed vendor cannot be pressed in service against a third party.
It is thus clear that a transfer of immovable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred.
Adv.vishal Bhat
9326198179
Dhule Maharashtra