Case Note & Summary
The appellant/plaintiff filed a suit for specific performance of an agreement to sell dated 24.01.2023 executed by the respondent/defendant in respect of a property. The defendant filed an application under Order VII Rule 11(a) and (d) CPC seeking rejection of the plaint on the ground that the suit was barred by Section 10 of the Transfer of Property Act, 1882 read with Section 41(h) of the Specific Relief Act, 1963. The trial court allowed the application and rejected the plaint, holding that the agreement contained a condition restraining the defendant from alienating the property to third parties, which was void under Section 10 of TPA, and that the plaintiff had an alternative remedy of damages, thus the suit was barred under Section 41(h) of SRA. The High Court, in appeal, set aside the order. It held that the restriction in the agreement was a personal covenant binding only the defendant and did not create an absolute restraint on alienation within the meaning of Section 10 of TPA. The court further held that Section 41(h) of SRA does not bar a suit for specific performance as the remedy of specific performance is the primary relief sought and there is no alternative efficacious remedy. The plaint disclosed a cause of action and could not be rejected at the threshold. The appeal was allowed, the impugned order was set aside, and the trial court was directed to proceed with the suit in accordance with law.
Headnote
A) Civil Procedure - Rejection of Plaint - Order VII Rule 11(d) CPC - Bar of Suit - The trial court rejected the plaint holding that the suit for specific performance was barred under Section 10 of the Transfer of Property Act, 1882 read with Section 41(h) of the Specific Relief Act, 1963. The High Court held that the restriction in the agreement to sell that the defendant shall not alienate the property to third parties is not a condition restraining alienation within the meaning of Section 10 of TPA, as it is a personal covenant binding only the defendant. The suit is not barred and the plaint cannot be rejected at the threshold. (Paras 1-3) B) Transfer of Property Act - Restraint on Alienation - Section 10 TPA - Agreement to Sell - A condition in an agreement to sell that the vendor shall not sell the property to any other person does not fall under Section 10 of TPA, which applies to absolute restraints on alienation of property. Such a condition is a negative covenant enforceable against the vendor and does not make the contract void. (Paras 2-3) C) Specific Relief Act - Bar of Suit - Section 41(h) SRA - The bar under Section 41(h) applies only when the plaintiff has an alternative efficacious remedy. In a suit for specific performance of an agreement to sell, the remedy is specific performance itself, and there is no alternative remedy. Hence, Section 41(h) does not bar the suit. (Paras 2-3)
Issue of Consideration
Whether the plaint is liable to be rejected under Order VII Rule 11(d) CPC on the ground that the suit is barred by Section 10 of the Transfer of Property Act, 1882 read with Section 41(h) of the Specific Relief Act, 1963.
Final Decision
The High Court allowed the appeal, set aside the impugned order dated 24.01.2025 passed by the XXIV Additional City Civil and Sessions Judge, Bangalore City in OS No.4479/2023, and directed the trial court to proceed with the suit in accordance with law.
Law Points
- Order VII Rule 11 CPC
- Section 10 Transfer of Property Act
- 1882
- Section 41(h) Specific Relief Act
- 1963
- Rejection of Plaint
- Bar of suit
- Restrictive covenant
- Agreement to sell
