IMPORTANT POINTS
1. Only because the Plaintiffs are ready and willing to perform their part of contract, the same by itself would not mean that a decree for specific performance of contract would automatically be granted. While considering the question, the orders of a competent authority under Urban Land Ceiling Act must also be taken into consideration.
2. There cannot be any doubt that in exercise of its letters patent jurisdiction, the Appellate Court may review findings of fact as well as law arrived at by a Single Judge, but while doing so, it must bear in mind its limitations that the court would not normally interfere with the discretionary jurisdiction exercised by the Courts below.
3. It is a well settled principle of law that even a void order is required to be set aside by a competent court of law inasmuch as an order may be void in respect of one person but may be valid in respect of another. A void order is necessarily not non est.

Headnote:(i) Specific Relief Act, 1963—Section 20—Urban Land (Ceiling and Regulation) Act, 1976—Section 26—Suit for specific performance—Agreement to sell was subject to grant of permission by the competent authority under the Urban Land Ceiling Act as the proceedings under the 1976 Act were pending—Refusal on part of competent authority to grant such permission to sell the land—However, Trial Judge decreed the said suit in part—While rejecting prayer for grant of specific performance of contract, defendant was directed to refund the amount of advance as also damages—Letters Patent Appeal—Decree for specific performance granted by the Division Bench—Whether High Court acted illegally and without jurisdiction in ignoring the orders passed by the competent authority—(Yes)—Decree for specific performance granted by the Division Bench is contrary to the statutory provisions.
       Held : It is not disputed that the parties to the agreement were aware of the proceedings pending before the ceiling authorities. It is also not in dispute that the Central Government was the appropriate authority to deal with the matter as the lands pertained to a cantonment area. The agreement envisaged that the Defendant would obtain necessary sanction from the competent authority. It was made clear that he had not submitted any lay out nor had he got any sanction therefor.(Para 9)
       The parties were aware of the proceedings under the 1996 Act. The Plaintiff-Respondents were also aware that sanction under the said Act is necessary. The consequence for non-grant of such sanction was expressly stipulated. Even the parties were clear in their mind as regards the consequences of willful non-execution of a deed of sale or willful refusal on their part to perform their part of contract.(Para 29)
       The High Court, in our considered view, also committed a manifest error in opining that the Appellants should have questioned the orders passed by the competent authority. If they have not done so, the same would not mean that the Division Bench could go thereinto suo motu. Furthermore, Section 20 of the Specific Relief Act confers a discretionary jurisdiction upon the courts. Undoubtedly such a jurisdiction cannot be refused to be exercised on whims and caprice; but when with passage of time, contract becomes frustrated or in some cases increase in the price of land takes place, the same being relevant factors can be taken into consideration for the said purpose. While refusing to exercise its jurisdiction, the courts are not precluded from taking into consideration the subsequent events. Only because the Plaintiff-Respondents are ready and willing to perform their part of contract and even assuming that the Defendant was not entirely vigilant in protecting their rights in the proceedings before the competent authority under the 1976 Act, the same by itself would not mean that a decree for specific performance of contract would automatically be granted. While considering the question as to whether the discretionary jurisdiction should be exercised or not, the orders of a competent authority must also be taken into consideration. While the court upon passing a decree for specific performance of contract is entitled to direct that the same shall be subject to the grant of sanction by the concerned authority.(Paras 37 and 38)
       (ii) Letters Patent Appeal—Scope of Powers—Held, Appellate Court may review findings of fact as well as law arrived at by Single Judge—However, Courts would not normally interfere with the discretionary jurisdiction exercised by the courts below.
       Held : There cannot be any doubt that in exercise of its letters patent jurisdiction, the Appellate Court may review findings of fact as well as law arrived at by a learned Single Judge, but while doing so, it must bear in mind its limitations. It is now well-settled principle of law that the courts would not normally interfere with the discretionary jurisdiction exercised by the courts below.(Para 40)

JUDGMENT

S.B. Sinha, J.—The heirs and legal representatives of the Original Defendant in a suit for specific performance of contract and the subsequent purchaser are before us in these appeals which arise out of a judgment and order dated 10.09.2003 passed by a Division Bench of the Andhra Pradesh High Court in Letters Patent Appeal Nos. 168 and 169 of 1996 whereby and whereunder the judgment and decree passed by a learned Single Judge dated 05.11.1996 affirming a judgment and decree dated 30.04.1990 passed by the Additional Chief Judge-cum-Spl. Judge for SPE & ACB Cases, City Civil Court, Hyderabad, was set aside.

2. The Defendant in the suit together with his other co-sharers were owners of Survey No.71, West Marredpalli, Secunderabad. A proceeding under the Urban Land (Ceiling & Regulation) Act, 1976 (for short, the 1976 Act) was initiated against them. In the said proceeding at the hands of the landholders, excess land was directed to be vested in the Central Government. The owners were allowed to retain 1000 sq. metres of land each.

3. Allegedly, on that premise a piece of vacant land bearing Plot No.2 in Survey No.71 measuring 1000 sq. metres which had been allotted to the defendant was allowed to be retained by him. On or about 27.06.1978 he (original Owner) entered into an agreement with the Plaintiff for sale in respect thereof on a consideration of Rs. 50/- sq. yard. As on the said date, a proceeding under the 1976 Act was pending, the agreement to sell was subject to the grant of permission by the competent authority under the said Act. It stipulated that in the event of refusal on the part of the competent authority to grant such permission, the advance paid to the Defendant would be refunded. It was further stipulated that in the event of refusal on the part of the vendor to execute the sale deed upon obtaining permission, if any, not only the amount paid by way of advance was to be refunded but also damages to the extent of Rs.15,000/- was to be paid by the Defendant to the Plaintiff. The application under Section 26 of the 1976 Act filed for seeking permission to sell the said land was rejected by the competent authority by an order dated 24.08.1978.

4. An application was filed under Section 10 of the 1976 Act on 29.04.1980 which was again rejected by an order dated 26.06.1980 stating that no vacant land measuring 1000 sq. metres was available, in view of the order passed in the proceedings under the 1976 Act and as such no permission could be granted. A clarification of the said order was sought for. Allegedly, on the ground that permission to sell the vacant land had been rejected by a notice dated 26.06.1980, the agreement was sought to be cancelled by the Respondent on the premise that the same stood frustrated. The Plaintiff-Respondent in C.A. No.2023 of 2004 thereafter filed a suit for specific performance of contract.

5. The learned Trial Judge decreed the said suit in part. While rejecting the prayer for grant of specific performance of contract, the Defendant was directed to refund the amount of advance as also damages of Rs. 15,000/- together with interest @ 6 p.a. An appeal was preferred thereagainst by the Plaintiff-Respondent and by a judgment and order dated 05.11.1996, a learned Single Judge of the High Court dismissed the appeal. Be it placed on record that the learned Single Judge appointed a Advocate-Commissioner for taking measurement of land in question; whereupon a report was filed. A Letters Patent Appeal was filed by the Plaintiff-Respondent before a Division Bench of the High Court and by reason of the impugned judgment, the said Letters Patent Appeal had been allowed.

6. In the said suit an order of status quo was passed. Allegedly, in violation of the said order, all co-sharers sold portions of the house property which could be retained by them under the 1976 Act.

7. Mr. Deepankar Gupta, the learned Senior Counsel appearing on behalf of the Appellants, urged that : (i) The High Co

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2006 Supreme(SC) 792

Cases Referred (4)