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1989 Supreme(AP) 150

Andhra Pradesh High Court
Judges : A.RAMANUJULU NAIDU, D.JAGANNADHA RAJU
M.Devakumar Reddy - Appellant
Versus
V.S.Gopal Rao - Respondent
C.C.CA. No. 116/85
Decided On : 03-17-89
Advocates Appeared :
.

Headnote:URBAN LAND (CEILING AND REGULATION) ACT, 1976 - Secs 5 (3), 26 and 27 - Agreement of sale of a building with open space inter alia stipulating obtaining of permission by Vendor from Competent Authority and to handover vacant possession to Vendee and to execute registered sale deed - Refusal of Vendor to execute sale deed after obtaining permission from Competent Authority - Suit for specific performance of agreement by Vendee - Plea of defendant that pending determination of declaration under the Act by Vendor transfer is null and void - Plaintiff is entitled to decree.

       Held : Section 5 (3) is not applicable to the facts of this case and the agreement of sale is not hit by sub-Sec. (3) of Sec. 5 and it follows therefore, that the agreement is not null and void. On the other hand it is covered by Sec. 27 of the Act and the necessary permission having been obtained from the competent authorities under the Urban Land (Ceiling and Regulation) Act, the agreement is valid and binding on the defendants. If ultimately it is found that the defendants hold any excess vacant land, the same shall be surrendered to the Government irrespective of the transfer of the land.

       The object of the Urban land [Ceiling and Regulation) Act is to exercise social control over the scarce resource of Urban Lind to ensure equitable distribution and avoid speculative transactions of land in urban agglomerations. The Act is not concerned with buildings, which are necessarily to be constructed on land. If Sec. 5 (3) operates even in a case of a land with a building. Section 27 is rendered otiose and ineffective.

       C.C.C.A. Dismissed

AMARESWARI, J.

( 1 ) THIS is an appeal against the Judgment and Decree of the First Additional Judge, City Civil Court, Hyderabad in O. S. No. 336 of 1979 dated 7-8-1982.

( 2 ) DEFENDANTS 1, 2 and 3 are the appellants. Defendants 1 and 2 are brothers. Defendant No. 3 is their mother. MR. Reddy is the husband of defendant No. 3 and father of defendants 1 and 2.

( 3 ) THE suit is one for specific performance of an agreement dated 24-11-1978 entered into between defendants 1 to 3 on one hand and plaintiffs 1 to 3 rn the other. The suit property is a building with a dwelling unit and the other structures such as servant quarters, out houses, garages etc. , in an extent of 4315 square metres situate in Central Jail Road, malakpet, Hyderabad. Plaintiffs 1 to 3 agreed to purchase the suit property for a total consideration of Rs. 5,75,000/- under an agreement of sale dated 24-11-1978 Ex. A-1. On the date of the agreement, the defendants received rs. 45,000/- as earnest money and they have agreed to convey the property to plaintiffs 1 to 3 or their nominee or nominees.

( 4 ) THE relevant Clauses of the agreement are Clauses 5, 6 and 8. As per Clause 5, the vendor shall obtain permission from the Competent authority under the Urban Land (Ceiling and Regulation) Act, 1976. Clause 6 requires that the vendor should hand over vacant possession of the building after getting the tenants vacated and that the sale deed shall be executed and registered immediately on receipt of permission from the authorities under the Urban Land (Ceiling and Regulation) Act. Clause 8 provides that in case the provisions of law enabling the vendors to invest the sale proceeds jn Government securities or National Savings Certificates or in Fixed deposits in the State Bank of India for a period of not less than 3 years as an alternative to the payment of the Capital Gains Tax is repealed, deleted or modified at any time before the the permission for sale from the Special officer and Competent Authority, Urban Land Ceilings, Hyderabad is obtained and the sale deed is executed in favour of the plaintiffs or their nominee the agreement shall stand cancelled and the earnest money of rs. 45. 000/- shall be refunded to the vendees of their nominee or nominees without interest,

( 5 ) IT is common case that permission under the Urban Land Ceiling Act was obtained on 9-1-1979 under Ex. A-2 for sale of the suit property to the 4th plaintiff, which is a partership firm and who is the nominee of plaintiffs 1 to 3. After the permission under the Urban Land (Ceiling and regulation) Act was obtained, we find a gradual change in the attitude of the defendants. While the plaintiffs were exhibiting great anxiety to get the sale deed registered as expeditiously as possible, the defendants were displaying a lukewarm attitude. The plaintiffs were constantly informing the defendants that the balance sale price was kept ready for payment at the time of registration and the party should hasten to have the sale deed executed and that the defendants should obtain and keep ready the wealth-tax and Income-tax clearance certificates 2nd Nil Encumberance Certificate so that the registration of the sale deed would not be delayed and could be completed by the end of January, 1979 if not earlier. The letter dated 12-1-1979 Ex. A-3 by the 1st plaintiff indicates this altitude. Even after a month after receiving the permission from the Competent Authority, nothing happened and no concrete steps for obtaining delivery of possession were taken by the defendants. The. plaintiffs again reminded the 3rd defendant by their letter dated 11-2-1979 Ex. A-4 drawing her attention to the delay which had already occurred reiterating that the 4th plaintiff was always ready and willing to perform his part of the contract by depositing the entire balance of sale price and calling upon the defendants to execute the sale deed in terms of the agreement without any further delay. The defendants were also informed that































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