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Source: Supreme Court 

Why in News? 

A bench of Justice Vikram Nath and Justice PB Varale held that a suit filed after the period of limitation is liable to be dismissed.    

• The Supreme Court held this in the case of Usha Devi & Ors v. Ram Kumar Singh & Ors. 

What is the Background of Usha Devi & Ors v. Ram Kumar Singh & Ors. Case? 

• The dispute in this case relates to a plot situated in District Ranchi. 
• During his lifetime Bihari Lal entered into an agreement with the plaintiff on 22nd July 1983 for sale consideration of Rs. 70,000, out of which Rs. 1000 was paid in advance. 
• This sale deed was to be executed within 9 months. However, the sale deed was not executed within the stipulated time. 
• The amount of 69,000 was later paid and the plaintiffs- respondents were put in possession of the property at that stage. 
  • The sale deed was not executed, in fact, a fresh agreement came to be executed between the parties on 17th December 1989. 
  • A clause in the agreement provided that the sale deed with respect to the fresh agreement was to be executed within one month i.e. upto 16th January 1990. 
• Since the sale deed was not executed a suit for specific performance was filed in September 1993. 
• The High Court decreed the suit confirming the judgment and decree of the First Appellate Court, decreeing the suit of specific performance filed by the respondents 

What were the Court’s Observations? 

• There were several issues in this case but the Court limited itself to the issue of whether the suit was barred by limitation. 
• The Court observed that Article 54 of The Limitation Act, 1963 provides that period of limitation for filing the suit of specific performance.  
• As per the facts the sale deed was to be executed within one month i.e. till 16th January 1990.  
• Once the specific performance date has expired, the period of limitation shall start running. Thus, here the suit could have been filed till 16th January 1993. 
• However, in the present facts the suit was filed on September 1993. 
• Thus, the Court dismissed the suit on the grounds of limitation.   

What is a Suit of Specific Performance? 

• Meaning: 
  • Specific performance is a remedy provided under the Specific Relief Act, 1963 (SRA). 
  • It aims at the exact fulfillment of an obligation that is promised. 
  • Section 10 of SRA provides that the specific performance of contract shall be enforced subject to provisions contained in Section 11 (2), Section 14, Section 16 of SRA. 
  • Section 11 (2) provides that any contract made by a trustee cannot be enforced if it is:  
    • In excess of his powers, or 
    • In breach of trust 
  • Section 14 provides that the following contracts are not enforceable: 
    • Where there is substituted performance under Section 20 
    • The contract is determinable in nature 
    • The contract is so dependent on personal qualifications of the party that it cannot be specifically enforced in it’s material terms 
  • The contract involves continuous performance of a duty which Court cannot supervise. 
  • Section 16 of SRA provides for personal bars to relief. Specific performance cannot be allowed in favour of following person: 
    • Who has obtained substituted performance under Section 20 
    • Who : 
      • Has become incapable of performing  
      • Violates any essential term of contract 
      • Contract on his part remains to be performed 
      • Acts in fraud of the contract 
      • Wilfully acts in variance with the contract 
      • Acts in subversion of relation intended to be established by the contract. 
    • 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 the performance of which has been prevented or waived by the defendant.  
  • For the purpose of this clause: 
  • 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; 
  • the plaintiff must prove performance of, or readiness and willingness to perform, the contract according to its true construction. 
• Relief of Specific Performance Mandatory or Discretionary: 
  • The SRA was amended in 2018 which brought some of the major changes to the Act. 
  • The primary reason behind this Amendment was to introduce a greater certainty in the enforcement of contract and consequently improve the ranking of India in “Enforcement of Contracts” and “Ease of Doing Business”. 
  • In the case of Global Music Junction Pvt. Ltd v. Shatrughan Kumar AKA Kheshari Lal Yadav & Ors. (2023) the Delhi High Court held that with the introduction of amendment in the year 2018 specific performance of contract is a general rule rather than exception. 
    • The Court held that the nature of specific relief has been converted from a equitable, discretionary remedy to a statutory remedy.   
• 2018 Amendment Retrospective or Prospective 
  • A 3-judge Bench comprising of Chief Justice of India NV Ramana, Justice Krishna Murari and Justice Hima Kohli held that the 2018 Amendment is prospective in the case of Katta Sujatha Reddy v. Siddamsetty Infra Projects (2022).  
  • Thus, the Court held that the 2018 amendment shall not apply to transactions that took place prior to coming into force of the 2018 Amendment (1st October 2018). 
  • The Court held that the amendment is retrospective as it is not a mere procedural enactment, rather it has substantive principles built into it’s working. Thus, the Court held that the amendment is not retrospective.
• Readiness and Willingness 
  • One of the most important things to be proved in a suit of specific performance is “readiness” and “willingness” to perform the contract on the pliantiff. 
  • Section 16 of SRA lays down personal bars to relief. 
  • Section 16 (c) provides that specific performance cannot be performed in favour of a person who fails to prove that he has been ready and willing to perform his part of the contract. 
  • The Supreme Court in the case of UN Krishnamurthy v. AM Krishnamurthy (2022) held that  
    • Readiness means the capacity of the party to perform the contract 
    • Willingness would imply the conduct of the plaintiff

What is the Period of Limitation? 

• Section 2(j) of the Limitation Act, 1963 defines “period of limitation” means the period of limitation prescribed for any suit, appeal or application by the Schedule.  
• Section 3 of Limitation Act, 1963 provides that every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.

What is Period of Limitation of a Suit of Specific Performance? 

• Article 54 of Limitation Act, 1963 provides that the period of limitation for filing a suit for specific performance of contract is 3 years. The time from which the period shall be calculated is 
  • The date fixed for performance, or 
  • If no such date is fixed when the plaintiff has notice that the performance is refused.

What are the Case Laws on Period of Limitation of a Suit of Specific Performance? 

• Rajesh Kumar v. Anand Kumar & Ors. (2024) 
  • The Supreme Court in this case held that all suits of specific performance will not be decreed merely because it is filed within the limitation period ignoring the time limits stipulated in the agreement. 
  • The fact that the limitation is three years does not mean that a purchaser can wait for one or two years to file a suit. 
  • The Court held that a limitation period of three years does not grant liberty to the plaintiff to file a suit at the last moment and obtain specific performance despite knowing about the breach of contract.   
• Sabbir (Dead) Through LR’s v. Anjuman (Since Deceased) Through Lr’s (2023) 
  • The Court held that the period of limitation of filing a suit of specific performance as per Article 54 of the Schedule is 3 years from the “date fixed by the contract” or if no such date is fixed when the plaintiff has “notice that performance is refused” 
• A. Valliammai v. K.P. Murali (2023) 
  • The Supreme Court held that where time of performance is not fixed by the contract then as per Article 54 Part II of the Schedule the limitation period will run from the date on which the plaintiff had notice of refusal on part of the defendant to perform the contract to determine the period of limitation.  

Source: Allahabad High Court 

Why in News? 

Recently, the Allahabad High Court in the matter of Ram Niwas Singh and 5 Others v. State of U.P. Thru. Addl. Chief Secy. Basic Edu. Lko And 5 Others has held that the doctrine of relation back to be applied from the time when the cause of action arose. 

What was the Background of the Ram Niwas Singh and 5 Others v. State of U.P. Thru. Addl. Chief Secy. Basic Edu. Lko And 5 Others Case?

• In the present case, the petitioner was appointed as the Assistant Teacher in the respondent institution and the other petitioners were appointed on Class IV post in the same institution. 
• The petitioner contented that the respondent is an aided institution which cancelled the petitioner's appointment and the salary in the year 1998. 
• The same was challenged by filing the writ which was disposed off by directing the Director of Education to pass appropriate orders on grievance of the employees and their salary entitlements as per the Uttar Pradesh Recognized Basic Schools (Junior High Schools) (Recruitment & Condition of Service of Teachers) Rules, 1978 on 30th June 2021. 
• Petitioners pleaded in the present petition that the State Government has found the them qualified and eligible for being granted salary through State Exchequer after noticing the fact that their appointments were valid, and it should be applicable retrospectively. 
• However, the state government argued that the salary would not be given retrospectively as there were no directions by the State Government regarding retrospective applicability of the order. 
• The dispute was presented before the Allahabad High Court by filing the writ. 

What were the Court’s Observations? 

• The Allahabad High Court observed that the institution was a recognized aided Junior High School brought under grant in aid and salary payment to employees including petitioners was made through State Exchequer. 
• It was also noted by the Court that through the order of the State Government that the appointment of the petitioner the State had directed payment of salaries to the petitioners. 
• The Allahabad High court referred to the judgement Delhi Jal Board v. Mahinder Singh (2000) and applied the doctrine of relation back to the present case. 
• The Court concluded that the cause of action arose when the petitioner’s appointment was cancelled and therefore the state government’s order related to salary to be applied retrospectively irrespective of the fact that the orders of the State Government did not clearly mention the same.

What is the Doctrine of Relation Back 

About

• As per the black’s law dictionary the doctrine is defined as ‘a principle that an act done today is considered to have been done at an earlier time’. 
• It means an act done by a person in the present can be linked with the previous acts. 
• The doctrine has different applicability with the different laws. 

Objective

• The doctrine is useful for removing ambiguity at the time of delivery of justice. 
• It helps to avoid limitations and restrictions in a case. 
• It further reduces the chances of making mistakes. 

Applicability

• Hindu law:  
  • Section 12 of Hindu Adoption and Maintenance Act, 1956 (HAMA)provides that the child so adopted will not divest or deprive any person of any estate which is vested in him before the adoption. Thus, adoption would have no effect on the estate which is already vested in a person.   
  • Section 12(c) of HAMA denies the theory of relation back which was applied and used in the case of vesting and divesting of property. 
• Code of Civil Procedure, 1908 (CPC): The doctrine of relation back is impliedly given under Order VI Rule 17 of the Code. It provides that a court can allow a party to a suit to amend the pleadings at any time before the trial, if it is necessary to determine the issues between the parties.   
• Indian Contract Act, 1872 (ICA): The application of the doctrine of relation back under the ICA can be found in the concept of ratification given under Section 196 of the ICA. 
• Limitation Act, 1963: Section 21 of the Limitation Act, 1963 clearly provides that the substitution or addition of parties will be governed by the doctrine of relation back.   

Landmark Judgement 

• Delhi Jal Board v. Mahinder Singh (2000): The Supreme Court in the case held that the findings of the disciplinary inquiry exonerating the officer would have to be given effect to as they obviously relate back to the date on which the charges are framed. If the disciplinary inquiry ended in his favour, it is as if the officer had not been subjected to any disciplinary inquiry. 

Source:  Allahbad High Court 

Why in News? 

The Allahabad High Court recently ruled that oral gifts under Mohammedan Law, which are subsequently documented in writing but remain unregistered, are not subject to proceedings under Section 47-A of the Indian Stamp Act.  

• Justice Piyush Agrawal held in the case of Sahas Degree College Thru Secretary Nadeem Hasan v. State of U.P. Thru District Magistrate J.P. Nagar And Others.   

What was the Background of Sahas Degree College Thru Secretary Nadeem Hasan v. State of U.P. Thru District Magistrate J.P. Nagar And Others.? 

• Ale Hasan made an oral gift (hiba) of Bhumidhari land in Khata No. 76, Khasra Nos. 602/3 and 605/2, total area 1.250 Hectare, situated in Village Bilana, Tehsil Amroha, District J.P. Nagar, in favor of Sarvari Educational Society on 22nd December 2005. 
• The gift was accepted by Sarvari Educational Society, and possession of the land was handed over to the society. 
• A memorandum of the oral gift was drawn on the same date (22nd December 2005). 
• Subsequently, on 06th February 2006, Mohd. Aslam, acting as Manager of the Sarvari Educational Society, made an oral gift in favor of Sahas Degree College. 
• This gift was accepted by Sahas Degree College through its Secretary, Nadeem Hasan (son of Ale Hasan). 
• A memorandum in the form of "Yaddast" (written record) of this second gift was created on 28th February 2006. 
• Both gifts were made orally in accordance with Muslim Personal Law. 
• Proceedings were initiated under Section 47-A of the Indian Stamp Act based on an ex-parte report. 
• An order was passed determining a deficiency in stamp duty amounting to Rs. 11,25,000/- and imposing an equal amount as penalty. 
• The petitioners appealed against this order, but the appeal was rejected. 
• The petitioners contend that the gifts were noted in written memoranda only for record-keeping purposes ("yaddast") and were not required to be registered, therefore no stamp duty was payable on them. 
• The petitioners filed writ petitions challenging the orders passed under Section 47-A of the Indian Stamp Act and seeking to declare Section 2(14-A) of the Indian Stamp Act, 1882 (as inserted by U.P. Act No. 38 of 2001) unconstitutional, void, and ultra vires. 

What were the Court’s Observations? 

• The Allahabad High Court held that oral gifts under Mohammedan Law, which are reduced to writing on unregistered documents, cannot be subjected to proceedings under Section 47-A of the Indian Stamp Act,1899.  
• The court affirmed that Section 47-A of the Indian Stamp Act is applicable only when an instrument or document is presented for registration, and not otherwise. 
• The court observed that if the authorities believed stamp duty was required on the hiba/gift deed, proceedings under Section 33 of the Stamp Act should have been initiated instead of Section 47-A. 
• Relying on the Supreme Court's decision in Hafeeza Bibi & Ors. v. Shaikh Farid (Dead) by LRs. & Ors.,2011 the court reiterated that the three essentials of a gift under Mohammadan Law are declaration of gift, acceptance, and delivery of possession. 
• The court held that Section 129 of the Transfer of Property Act, 1882 preserves the rule of Mohammadan Law and excludes the applicability of Section 123 of the Transfer of Property Act to gifts of immovable property by Mohammadans. 
• The court concluded that the impugned orders could not be sustained in law and quashed them, directing the refund of any amounts deposited by the petitioners pursuant to the impugned orders within two months.

What is Gift under Muslim Law? 

• Hiba, or gift under Muslim law, is defined as an immediate transfer of property from one person to another without any consideration, where the recipient or someone on their behalf accepts the transfer. 
• The legal framework governing Hiba is derived from three primary sources in Islamic jurisprudence: the Quran, Hadith (recorded sayings and actions of Prophet Muhammad), and interpretations by various schools of Islamic thought. 
• The Islamic encouragement of gift-giving is rooted in a hadith attributed to Prophet Muhammad, which states: "Exchange gifts among yourselves so that love may increase." 
• The authoritative Islamic legal text "Kanz al Daquiq" provides a formal definition of Hiba that is recognized in Islamic jurisprudence. 

What are the Essentials of a valid Gift?  

• Declaration by Donor: 
  • A person intending to gift or dispose of property must make a declaration. 
  • The declaration can be either oral or written according to Muslim Law. 
  • A written declaration is known as 'Hiba-Nama', but registration is not mandatory. 
  • The declaration must be express and unambiguous; implied declarations are not valid. 
  • The declaration must be made with free consent and bona fide intention. 
  • For a valid declaration, the following conditions must be met:  
    • It can be oral or written 
    • It must be express, not implied  
    • It must be made with free consent, without coercion, undue influence, fraud, mistake, or misrepresentation  
    • It must be made with bona fide intention, without malice 
  • The Andhra Pradesh High Court has ruled that a declaration of gift requires: 
    • A public statement by the donor, either in the presence of witnesses or otherwise  
    • Clear indication that the property is gifted to the donee  
    • Evidence that the donor has divested ownership by delivering possession to the donee  
    • Acceptance of the gift by the donee 
  • A unilateral declaration without a public statement is not sufficient to establish a valid gift. 
• Acceptance by the Donee: 
  • The donee must clearly express their willingness to accept the Hiba. 
  • Acceptance can be either express or implied. 
  • If the donee denies acceptance, the Hiba becomes void. 
  • A donor cannot force a Hiba upon an unwilling recipient. 
  • Any person capable of holding property can be a donee of a gift. 
  • There are no restrictions based on age, sex, or religion for accepting a Hiba. 
  • Transfers to non-Muslims are valid. 
  • The donee must be in existence at the time of the Hiba, as a living person. 
  • For minors, acceptance can be made with the consent of their legal guardian. 
  • Essential conditions for a valid acceptance by a donee include:  
    • Capability of holding the property 
    • No restrictions based on age, sex, creed, or religion 
    • Can be any legal or juristic person 
    • May include lunatics, minors, or guardians (on behalf of their wards) 
• Delivery of Possession:  
  • A Hiba is not valid unless possession is complete. 
  • Mere transfer of ownership is insufficient; delivery of possession is essential. 
  • The mode of delivery depends on the nature of the property gifted. 
  • Writing is not necessary for a valid gift inter vivos among Muslims, but delivery of possession is required. 
  • Possession can be delivered either actually or constructively. 
  • A donee is considered in possession when they obtain dominion rights over the property. 
  • Registration does not cure the defect of non-delivery of possession in a gift. 
  • Delivery of possession is not required in certain cases:  
    • Hiba from father to minor or lunatic person 
    • Hiba between husband and wife 
    • When donor and donee reside in the same house 
    • When donor and donee have a co-share in the property 
    • Cases of part delivery or incorporeal property 
    • When the donee is already in possession 

What are Requisites and Restrictions for Gift? 

• Competence of Donor:  
  • The donor must be of sound mind and not a minor.   
  • They must have the legal capacity to transfer the property.  
• Competence of Donee: 
  • The donee must be capable of holding and owning the property.   
  • Minors and persons of unsound mind can receive gifts through their guardians.  
• Property Must Exist:  
  • The subject matter of the gift must exist at the time of the Hiba, future properties cannot be given as a Hiba.  
• Lawful Object:  
  • The object of the gift must be lawful under Muslim law.   
  • Any property that is prohibited (haram) cannot be given as a gift.  

What are the Kinds of Gift under Muslim Law? 

• Hiba-bil-iwaz (Gift with Exchange):  
  • This is a gift made with a return.   
  • In this gift, the donor gives something to the donee and, in return, receives something of approximately equal value.  
  • Such a gift must be registered, and an oral promise is not sufficient.  
• Hiba-ba-shart-ul-iwaz:  
  • This type of gift is made with a condition of receiving something in return, if the condition is not fulfilled, the gift may be revoked.  
  • Delivery of possession is necessary to make the gift valid.  
  • The gift becomes irrevocable on delivery by the donee of the iwaz(return) to the donor.  
• Areeat:  
  • An Areeat is not a transfer of ownership, but a temporary license to enjoy the profits so long as the grantor pleases.  
  • Upon the death of donee, the property will be reverted to the donor.  
• Sadaqah:  
  • A Sadaqah is a gift made with the object of acquiring religious merit.  
  • Once the gift of Sadaqah has been made and possession has been delivered, it becomes irrevocable.  
  • Sadaqah is not valid if it consists of an undivided share in property.  

What are the Methods of Transfer of Gift? 

About:

• The mode of possession transfer is contingent on the nature and circumstances of the property involved. Broadly, possession can be transferred through two methods: 
  • Actual Possession: For tangible movable property (e.g., coins, jewelry), actual possession requires physical transfer of the property from one party to another. For immovable property, mere documentation is insufficient; the donor must physically relinquish the property, and the donee must formally take possession. 
  • Constructive Possession: This method involves symbolic transfer when physical delivery is impractical. For incorporeal property, actions must indicate transfer, while for corporeal property, all rights or interests must be formally transferred. The donee must perform an act demonstrating the transfer of ownership. 

Completion of Delivery of Possession:

• For movable property, delivery of possession is deemed complete when the donee physically receives the property. For intangible or immovable property, two theories are applied: 
  • Benefit Theory: The gift is considered complete when the donee begins to enjoy the benefits of the gift. 
  • Interest Theory: The completion of the gift depends on the donor's intent. Judicial decisions are based on the specific facts and circumstances of each case. 

Revocation of Gift: 

• A gift may be revoked by the donor at any time before delivery of the possession.  
• A gift may be revoked even after delivery of possession except in the following cases:  
  • When the gift is made by a husband to his wife or by wife to her husband  
  • When the donee is related to the donor within the prohibited degrees  
  • When the donee is dead  
  • When the thing given has passed out of the donee’s possession by sale, gift or otherwise  
  • When the thing given is lost or destroyed   
  • When the thing given has increased in value, whatever be the cause of the increase   
  • When the thing given is so changed that it cannot be identified, as when wheat is converted into flour by grinding  
  • When the donor has received something in exchange(iwaz) for the gift.

What is Section 47-A of the Indian Stamp Act,1899?

• Section 47-A of the Indian Stamp Act deals with Instruments under-valued, how to be dealt with. 
• Referral to Collector: Upon registration of an instrument related to property transfer, if the Registering Officer suspects that the market value or consideration stated in the instrument is understated, he must refer the instrument to the Collector for valuation and determination of the proper duty payable. 
• Determination by Collector: The Collector, upon receiving such a reference, shall provide the parties with a reasonable opportunity to be heard and conduct an inquiry as per prescribed rules. The Collector will determine the accurate market value or consideration and the appropriate duty. Any deficiency in duty must be paid by the liable party. 
• Collector's Initiative: The Collector, either on his own accord or upon referral from the Inspector General of Registration or the District Registrar, may within three years of the instrument's registration, review the document to ensure the correctness of its market value or consideration. The Collector will follow the procedure outlined in sub-section (2) to determine any additional duty due. This provision does not apply to instruments registered before the commencement of the Indian Stamp (Himachal Pradesh Amendment) Act, 1988. 
• Non-production of Original Document: If the original document is not available or cannot be produced, the Collector may request a certified copy from the Registering Officer and proceed with the assessment as described in sub-section (3). 
• Appeal: Any person aggrieved by the Collector’s order under sub-sections (2) or (3) may appeal to the District Judge within thirty days from the date of the order. Appeals shall be handled in accordance with rules prescribed under this Act. 
• Market Value Definition: For the purposes of this section, the "market value" of property is the price the property would have fetched if sold in the open market on the date of execution of the instrument related to the property transfer, as estimated by the Collector or appellate authority.