13. Rights of purchaser or lessee against person with no title or imperfect title.-
(1) Where a person contracts to sell or let certain immovable property having no title or only an imperfect title, the purchaser or lessee (subject to the other provisions of this Chapter), has the following rights:
(a) If the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest;
(b) Where the concurrence of other persons is necessary for validating the title, and they are bound to concur at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such concurrence, and when a conveyance by other persons is necessary to validate the title and they are bound to convey at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such conveyance;
(c) Where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee;
(d) Where the vendor or lessor sues for specific performance of the contract and the suit is dismissed on the ground of his want of title or imperfect title, the defendant has a right to a return of his deposit, if any, with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and costs on the interest, if any, of the vendor or lessor in the property which is the subject-matter of the contract.
(2) The provisions of Section 13(1) shall also apply, as far as may be, to contracts for the sale or hire of movable property.
Rights of partial specific performance of purchaser or lessee in case of Immovable property [Section 13(1)]-
Section 13(1) provides that where a person enters into contracts to sell or let certain immovable property but he has no title or his title is an imperfect title, then the purchaser or lessee has the following rights:
(a) Where the vendor or lessor has subsequently to the contract acquired any interest in the property-
Where the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to sell or let on hire such interest;
Example- X agrees to sell three stories building in Chandigarh to B. However, A’s title was imperfect title as that building was owned by three brothers (X, Y and Z). After entering into the contract, partition took place and X got 1/3rd share. B can sue A to sell his 1/3rd share.
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(b) Where the concurrence of other persons is necessary for validating the title-
Where the concurrence of other persons is necessary for validating the title, and they are bound to concur at the request of the vendor or lessor, then the purchaser or lessee may compel him to procure such concurrence. Significantly, in such situation the vendee or lessee has a right of specific performance and may compel the vendor or lessor to procure such concurrence.
(c) Where the vendor professes to sell unencumbered property-
Where the vendor professes to sell unencumbered property, but the property is mortgaged for an amount not exceeding at the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee.
Significantly, this clause is applicable to the sale only and not to the lease. Therefore, where at the time of entering into the contract the vendor claims that his property is free from any charge or encumbrance but the property is mortgaged by the vendor and he has in fact only a right to redeem it, then the purchaser may compel him to redeem the mortgage and to get the property free from mortgage and sell it to him (vendee).
Example- A fraudulently informs B that A’s estate is free from encumbrance. B thereupon enters into the agreement to buy the estate. The estate was already subject to a mortgage. B may insist and ask A to get the estate free from mortgage and then sell it to him.
(d) Vendee or lessee’s right to take any deposit etc.-
Where the vendor or lessor sues for specific performance of the contract and the suit is dismissed on the ground of his want of title or imperfect title, the defendant has a right to return of his deposit, if any, with interest thereon, to his costs of the suit and a lien for such deposit, interest and costs of the suit, if any, of the vendor or lessor in the property which is the subject matter of the contract.
Another right of the vendee or lessee is to a return of his deposit, if any made by him, with interest thereon, to his costs of the suit.
Example- X agrees to sell three stories building in Chandigarh to B. However, A’s title was invalid as it is jointly owned by three brothers. B has already paid advance money of Rs. 10 Lac. If suit is filed by A for specific performance and is dismissed for imperfect title then he has a duty to a return advance money to B, if any, with interest thereon, to his costs of the suit. Further B also has right to a lien for such deposit, interest and costs, or the interest, if any, of the vendor or lessor in the property which is the subject-matter of the contract.
