A contracted to buy land from B. A failed to perform. B sued for specific performance. Evidence shows right of way exists over land. Decide.

The Position of the Parties: Who Is Suing Whom?

Here, B is the vendor and A is the purchaser who has failed to perform. B sues for specific performance. It is B, therefore, who invokes the court's power to compel A to complete the purchase. The moment B, as vendor, seeks specific performance, the law turns the searchlight firmly upon B's title — because the court will not coerce an unwilling purchaser into accepting land burdened with an encumbrance that was not disclosed and not bargained for.

This is where Section 17 of the Specific Relief Act enters with decisive force. Section 17(1)(b) provides, in unambiguous terms, that a contract to sell immovable property cannot be specifically enforced in favour of a vendor who, though he entered into the contract believing that he had a good title to the property, cannot at the time fixed by the parties or by the court for completion of the sale, give the purchaser a title free from reasonable doubt. An encumbrance in the form of a right of way, subsisting over the land and discoverable by evidence, casts precisely such a doubt over the title. The vendor cannot transfer the land in the condition in which it was promised to the purchaser.

The Nature of a Right of Way as an Encumbrance

A right of way is an easement — the right of a third person to pass over the land. It operates as a burden on the title and restricts the owner's exclusive enjoyment of the property. Courts have consistently held that a defect of title includes encumbrances such as restrictive covenants, mortgages, rights of third parties over the property, and undisclosed easements. The principle is traceable to the core equitable rule that a purchaser must not be compelled to buy a lawsuit. As has been observed from the English decisions adopted by Indian courts, a marketable title is one which may at all times and under all circumstances be forced upon an unwilling purchaser — and a title shadowed by a right of way in favour of a third party falls far short of that standard.

The question then becomes: did B profess to sell unencumbered property? If B contracted to sell the land as though it were free of encumbrances, whether expressly or by implication through silence in circumstances where there was a duty to disclose, Section 13(1)(c) of the Specific Relief Act becomes immediately relevant. That clause applies precisely to the case where the vendor professes to sell unencumbered property, but the property is in fact burdened.

Section 17 Bars B's Suit for Specific Performance

Returning to Section 17(1)(b), the test is clear: can B, at the time of suit, give A a title free from reasonable doubt? The answer, in the light of the subsisting right of way, is no. B cannot transfer the land shorn of this encumbrance unless B first removes it — and no evidence suggests that is possible here. The Judicial Committee and the Supreme Court have repeatedly affirmed that a vendor who cannot deliver a good title is not entitled to call upon the court to coerce the purchaser. In Kisanlal v. Namdeo (AIR 1943 Ngp 299), the Nagpur High Court held that a vendor who knows he has no good title cannot secure specific performance even if he manages to make out title later. Courts have similarly refused specific performance where encumbrances cloud the title at the material time.

B's suit must therefore fail. Section 17(1)(b) stands squarely in the way.

What Rights Does A Have? Section 13(1)(d)

B's defeat does not leave A without a remedy — indeed, the law confers specific and valuable rights upon A by virtue of Section 13(1)(d). Where the vendor or lessor sues for specific performance and the suit is dismissed on the ground of the vendor's want of title or imperfect title, the defendant-purchaser acquires three positive entitlements in the very same suit:

First, the right to a return of his deposit, if any, with interest thereon. Second, the right to his costs of the suit. Third, a lien on whatever interest the vendor may hold in the property for the amount of the deposit, interest, and costs. These rights are automatically available to A without the need for a separate suit and without any additional pleading beyond the defence already raised.

A Note on Section 13(1)(c) and A's Option

There is an additional dimension worth examining. Section 13(1)(c) applies where the vendor professes to sell unencumbered property but the property is in fact mortgaged for an amount not exceeding the purchase money — in which case the purchaser can compel the vendor to redeem the mortgage and obtain a valid discharge. While this clause specifically addresses mortgages, the broader principle underlying it — that a purchaser should not be forced to accept less than what was promised — applies with equal strength to a right of way.

If A, despite the right of way, is still willing to purchase the land subject to the encumbrance, the law does not leave A without recourse. The courts have held that where the purchaser is willing to take such title as the vendor has, the vendor cannot use his own encumbrance as a shield to resist performance. In R. Velammal v. R. Daivasigamani (AIR 1993 Mad 100), the Madras High Court held that when the purchaser is willing to purchase even with encumbrances, the vendor cannot refuse to execute the sale deed on the ground that the property is not free from encumbrance. However, on the facts of this problem, it is B who is seeking to enforce, not A — and A is the defendant resisting performance. A is well within his rights to resist, precisely because B cannot deliver a clear title.

Decision

The court should dismiss B's suit for specific performance. B, as vendor, cannot give A a title free from reasonable doubt in light of the subsisting right of way over the property, and this falls squarely within the bar imposed by Section 17(1)(b) of the Specific Relief Act, 1963. Upon such dismissal, A becomes entitled under Section 13(1)(d) to a decree in the same suit for the return of his deposit with interest, his costs of the suit, and a lien on B's interest in the property for those amounts. B's failure to disclose and remove the encumbrance is entirely his own and the court will not compel an unwilling purchaser to accept the burden of a right of way he never bargained for.