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Our legal system is one of the most inefficient in the world is not a secret, with bottom ranking on contract enforceability in ease of doing business index. Even CJIs have been record predicting complete breakdown of our legal system since time immemorial (I recall justice PN Bhagwati saying this in 1985). That we are still surviving as a sovereign and democratic nation is nothing short of a miracle. How long could it go on is a big question mark, given that legal reforms have never been a priority for any government in India so far.

From my personal experience, I have learnt that our legal system is tailor made for the blackmailers in property cases which has made it extremely easy to embroil anybody in court for decades, preventing him from using or selling his property even if injunction is not granted, and ultimately succeeding through forced compromise at some stage. Kindly consider the following:-

Legal presumptions/bias in suits under Specific Relief Act 1963

1. Law assumes that money is not an adequate relief for breach of contract for sale of immovable property.

a. In most suits, plaintiff is claiming monetary loss due to breach of contract, and his intention/purpose of buying the property was to sell the same as it is or after development/construction.

b. Very rarely, plaintiff will have anything more than monetary consideration where the above assumption could be justified.

c. Plaintiff targets and will invariably reach compromise with monetary compensation at some stage.

d. Since suit for compensation does not prevent a defendant from selling his property, enough pressure is not created on him. Hence, plaintiff has been armed with this legal assumption which either through injunction or the principle of lis pendence effectively prevents seller from selling his property until this case is settled.

e. Even if defendant wins trial court, plaintiff will invariably go into appeals, and thus, armed with weapon to publicise to whole world that the subject property is disputed, and scare the buyers away. Eventually, defendant will succumb one day regardless of merits in the case.

2. Law assumes that time is not essence of the contract for sale of immovable property.

a. This allows a plaintiff to default on his payment obligations, and yet come to court which assumes that time is not essence of the contract.

b. Even if contract specifically means payment to be within this particular month, courts interpret that not to be essence of

the contract.

3. Law allows enforcement of oral contracts.

a. This is despite provisions of Stamp Act and Registration Act requiring contracts for sale of property to be registered and properly stamped.

b. This is also despite the provisions of evidence act stating that an oral contract which needs to be executed in writing by law cannot be taken as evidence.

c. Since in most suits, proper stamp duty has not been paid, the plaintiff concocts the story of there being an oral contract for enforcement.

d. Registration Act proviso to Sec 49 which provides an exception to bar on production of any unregistered document as evidence in court, has been mis-interpreted by courts giving boost to such frivolous litigation. The section states

“…Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) 55, 56 [***] or as evidence of any collateral transaction not required to be effected by registered instrument. …”. Now, I have never understood how could the Chapter II of the Specific Relief Act, 1877 be allowed to be interpreted as Specific Relief Act 1963? And why is legislation completely unconcerned with this malady?

4. Law only wants plaintiff to state that he was willing and capable to discharge his obligation, but there is no need for him to actually tender the payment. Even case laws have repeatedly held that plaintiff need not actually tender payment.

a. It allows plaintiff who actually has no means to pay for the property under the contract to come to court. Of course, he will not win the trial but he is still entitled to file an appeal, and then, second appeal. His lawyers can easily buy him one or two decades in court to enable him to scare buyers of the property that long, and ultimately force seller to come to terms with him.

b. The defendant is not allowed to demand depositing of the purchase consideration in court. Consequently, buyer’s property (the money) remains free while seller’s property remains stuck. This is inbuilt injustice in the legal system.

5. Supreme Court has held that there could be no counter claim for damages on the plaintiff who manages to secure injunction on defendant’s property which is ultimately held to be unnecessary or unjust. This makes the entire litigation lopsided.

6. Courts are extremely reluctant and strict in accepting applications under order 7 rule 11 for dismissal. They do not consider probability of the suit succeeding but they only want to see extremely strictly asto why the suit is legally barred. This allows every frivolous suit a direct right to trial which means another right to appeal, and so on.

It is high time we replace right-to-litigate with right-to-justice !!!

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Category Property Law, Other Articles by - Anil Kr Garg