According to Section 54 of the Transfer of Property Act 1882, “sale” means the transfer of ownership in exchange for a price paid or promised or part paid and part promised which is made in the case of tangible immovable property................

 2023 SCMR 815

According to Section 54 of the Transfer of Property Act 1882, “sale” means the transfer of ownership in exchange for a price paid or promised or part paid and part promised which is made in the case of tangible immovable property of the value of one hundred rupees and upwards or in the case of a reversion or other intangible thing, can be made only by a registered instrument with further rider that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties but it does not, of itself, create any interest in or charge on such property. Whereas under Section 42 of the Specific Relief Act 1877, a person entitled to any legal character or to right as to any property, may institute a suit against any person denying, or interested to deny, his title to such character or right and the Court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief, but according to the attached proviso, no Court shall make any such declaration where the plaintiff, being able to seek further relief than mere declaration of title, omits to do so. The expression “legal character” has been understood to be synonymous with the expression status. A suit for mere declaration is not permissible except in the circumstances mentioned in Section 42 of the Specific Relief Act. The claim of mere declaration as to alleged title does not suffice.

2023 SCMR 815

Caveat emptor (“let the buyer beware”) is based on a Latin phrase and for all intents and purposes lays down an obligation on buyers to rationally and intelligently scrutinize status including the clear title of the property before embarking into the transaction of sale. This is a rudimentary doctrine stuck between vendor and vendee in all contractual relationships and arrangements. According to Broom’s Legal Maxims (Tenth Edition), Chapter IX, (page 528), the maxim caveat emptor applies, with certain specific restrictions, not only to the quality of, but also to the title to land which is sold, the purchaser is generally bound to view the land and to inquire after and inspect the title-deeds, at his peril if he does not. He does not use common prudence, if he relies on any other security. The ordinary course adopted on the sale of real estates is that the seller submits his title to the inspection of the purchaser, who exercises his own judgment, or such other as he confides in, on the goodness of the title; and if it should turn out to be defective, the purchaser has no remedy, unless he take special covenant or warranty, provided there be no fraud practiced on him to induce him to purchase. Whereas under Black’s Law Dictionary (Sixth Edition), page 222, this maxim summarizes the rule that a purchaser must examine, judge, and test for himself. This maxim is more applicable to judicial sales, auctions, and the like, than to sales of consumer goods where strict liability, warranty, and other consumer protection laws protect the consumer-buyer. Caveat emptor, qui ignorare non debuit quod jus alienum emit. Let a purchaser beware, who ought not to be ignorant that he is purchasing the rights of another. Let a buyer beware; for he ought not to be ignorant of what they are when he buys the rights of another. While the Words and Phrases (Permanent Edition), Volume 6A ( Pages 8 & 9), describes the doctrine of caveat emptor as a rule of law that the purchaser buys at his own risk. Wood v. Ross, Tex.Civ.App., 26 S.W. 148, 149. Under the rule purchaser takes all the risks, being bound to examine and judge for himself as to title of land purchased unless he is dissuaded from so doing by representations of some kind. Kain v. Weitzel, 50 N.E.2d 605, 607, 72 Ohio App. 229. The maxim is used with reference to sales of property with respect to which the buyer must use proper diligence to inform himself as to its quality, and, in the case of real estate, as to its location. The quality of land on which its value depends, and which is too various for a market standard, the purchaser can see, if he will but look. No action lies against the vendor of real estate for false and fraudulent representations as to the location of lands. Land is not like a ship at sea; it has a known location and can be approached, and, even should it be necessary to purchase the land unseen, covenants may be inserted respecting the quality as well as seisin or title. Sherwood v. Salmon, 2 Day, 128, 136. He must look to the title papers under which he buys, and is charged with notice of all the facts appearing upon their face, or to the knowledge of which anything there appearing will conduct him. He may not shut his eyes or his ears to the inlet of information, and then say he is a bona fide purchaser without notice. Burwell's Adm'rs v. Fauber, Va., 21 Grat. 446, 463. Whereas the Major Law Lexicon (Fourth Edition), (page 6035-see page number, ) the ‘rule of caveat emptor’ means that the buyer is bound to see that, what he buys, he buys after satisfying himself that there is good title. If a person chooses to buy a property without looking into title he does so at his own and the law will not help him to get rid of the bargain. Gour Kishan v. Chunder Kishore, per Gart T CJ, (1876) 25 SUTH WR 45 (46).

2023 SCMR 815

On the basis of a sale agreement, no legal character or right can be established to prove the title of the property unless the title is transferred pursuant to such agreement to sell, but in case of denial or refusal by the vendor to specifically perform the agreement despite the readiness and willingness of the vendee, a suit for specific performance may be instituted in the court, but suit for declaration on the basis of a mere sale agreement is not the solution for appropriate relief

2023 SCMR 815

First part of Article 113 of the Limitation Act refers to the exactitudes of its application when time is of the essence of the contract, which means an exact timeline was fixed for the performance of obligations arising out of the contract/agreement hence, in this particular situation, the limitation period or starting point of limitation will be reckoned from that date and not from date of refusal, however, if no specific date was fixed for performance of agreement and time was not of the essence, then the right to sue will accrue from the date of knowledge about refusal by the executant.

2023 SCMR 815

Under Section 22 of the Specific Relief Act, the exercise of jurisdiction by the Court for decreeing the suit for specific performance of contract is discretionary in nature in which the Court is not bound to grant such relief, but in tandem the discretion is not to be exercised arbitrarily but should be based on sound legal principles after analyzing and gauging the circumstances, inter alia, whether the contract is such which gives an unfair advantage to the plaintiff over the defendant or the performance of the contract encompasses some hardship on the defendant which he could not foresee or whether its non-performance would embroil some hardship to the plaintiff and whether the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. The person seeking specific performance has to establish that he is enthusiastic and vehement to act upon his obligations as per the contract but the opponent is refusing or delaying its execution. So far as the limitation period for the institution of a lawsuit against non-performance is concerned, the starting point of limitation under Article 113 of Limitation Act, 1908 for institution of legal proceedings enunciates two limbs and scenarios. In the first segment, the right to sue accrues within three years if the date is specifically fixed for performance in the agreement itself whereas in its next fragment, the suit for specific performance may be instituted within a period of three years from the date when plaintiff has noticed that performance has been refused by the vendor but in both scenarios, the right to sue has not been left open ended.

2023 SCMR 815

The phrase “consensus ad idem” in the law of contract connotes and epitomizes a meeting of the minds inured to describe the intention of the parties. This also speaks of the set of circumstances where there is a reciprocal understanding in the manifestation of the contract. Section 10 of the Contract Act, 1872 does not exclude an oral contract from being enforced, although in the case of an oral contract the clearest and more satisfactory evidence would be required by the Court.

2023 SCMR 815

According to Black’s Law Dictionary (5th Edition), a ‘contract’ is “an agreement between two or more persons which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, subject matter of a legal consideration, mutuality of agreement and mutuality of obligations.” Anson has defined the word contract in the following words: “A contract consists in an actionable promise or promises. Every such promise involves two parties, a promisor and promisee, and an expression of a common intention and expectation as to the act or forbearance promised”. Ref: Anson’s Law of Contract, 23rd Edition, by A.G. Guest, 1971, p. 23. According to Treitel, “A contract is an agreement giving rise to obligations which are enforced or recognized by law. The factor which distinguishes contractual from other legal obligations is that they are based on agreement of the contracting parties. This proposition remains generally true, in spite of the fact that it is subject to a number of important qualifications.” Ref: G.H. Treitel, The Law of Contract, Tenth Edition (1999) by Sir Guenter Treitel, Sweet & Maxwell (1999), p. 1. (Source: Moitra’s Law of Contract & Specific Relief, Fifth Edition). No doubt to constitute a valid contract one of the conditions is “consensus ad idem” which must exist with regard to the terms and conditions of the contract and, in case of any ambiguity, it may adversely reflect on its very existence. In fact it is a Latin term in the law of contract that means the existence of meeting of minds of all parties involved which is the elementary constituent for the enforcement and execution of a contract and in case of no consensus ad idem there shall be no binding contract and in case of any palpable inexactitude or obliviousness in the settled terms and conditions then there shall be no probability to get a hold of any outcome of such defective agreement. Where an effective and enforceable contract is not structured by the parties, it is not the domain or province of the Court to make out a contract for them but the lis would be decided on the basis of terms and conditions agreed and settled down in the contract. The decree for specific performance may not be passed if the substratum of the contract suffers from shortcoming or legal infirmities which renders the contract unacceptable and unenforceable.