Back
2024 Supreme(AP) 515
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
VENUTHURUMALLI GOPALA KRISHNA RAO, J.
Korukonda Appala Surya Rao S/o Nagamayya – Appellant
Versus
M/s Stel Authority of India Limited – Respondent
First Appeal No. 763 of 2005
Decided On : 07-08-2024
Advocate Appeared:
For the Appellant : K. Sairam Murthy.
For the Respondent: J. Prabhakar.
IMPORTANT POINT
A contract may be deemed impossible to perform if regulatory changes fundamentally alter the terms, justifying non-performance.
Headnote:
Contract - Specific Performance - Urban Area Development Act - The court interpreted the impossibility of performance due to regulatory changes affecting plot dimensions, leading to the dismissal of the plaintiff's claim for specific performance.
Fact of the Case:
The plaintiff sought specific performance of a contract for the sale of an industrial plot after making an initial payment. The defendant, a government undertaking, cited regulatory changes that made the sale impossible and refunded the initial payment.
Finding of the Court:
The court found that the defendant had valid reasons for not proceeding with the sale due to changes in regulatory requirements, which rendered the contract impossible to perform.
Issues: Whether the trial court was justified in dismissing the suit for specific performance of the contract.
Ratio Decidendi: The court held that a contract may become impossible to perform due to unforeseen regulatory changes, which justified the defendant's refusal to complete the sale.
Result: The appeal is dismissed, confirming the trial court's judgment.
JUDGMENT :
VENUTHURUMALLI GOPALA KRISHNA RAO, J.
1. The appeal is filed against the judgment and decree dated 01-12-2005 passed by the learned Senior Civil Judge, Gajuwaka, Visakhapatnam District, in O.S. No. 301 of 2003. The suit is filed for the relief of a direction of specific performance of contract by the defendant, directing him to execute a registered sale deed and deliver vacant possession in respect of suit schedule property or alternatively, to direct the defendant to pay damages to a tune of Rs.7,50,000/- to the plaintiff and for costs of the suit.
2. The case of the plaintiff as narrated in the plaint, in brief, is as follows:
(a) It is pleaded that the defendant is a company incorporated under the Companies Act, having its branch office at Visakhapatnam and Head Office at New Delhi. The defendant gave an advertisement in “The Hindu” English Daily dated 12-12-2002 offering to sell industrial plots each measuring 2002.5 square metres i.e. 90 metres x 22.25 metres. The price quoted by the defendant is Rs.370.64 paise. The interested parties have to deposit a sum of Rs.40,000/- by way of demand draft besides an application fee of Rs.500/-.
(b) It is further pleaded that in response to the advertisement, the plaintiff submitted an application dated 05-3-2003 making payment of Rs.500/- towards cost of application and a sum of Rs.40,000/- by way of demand draft towards plot booking amount. The defendant by a letter dated 06-3-2003 intimated the plaintiff that he was allotted plot No. 19 at the rate of Rs.37.64 paise per sq. mtr in an extent measuring 90 mtrs x 22.25 mtrs, which is of the value of Rs.7,42,207/- payable within 30 days by way of postal order/banker’s cheques/demand draft/etc. The amount of Rs.40,000/- was appropriated by it as part of sale consideration. In the said letter, it was further informed that the defendant would hand over the plot within 7 days after receipt of payment from the plaintiff. Then the plaintiff obtained banker’s cheques for Rs.7,02,207/- and with that amount, he approached the defendant but the defendant refused to receive the same by informing that an approval from Visakhapatnam Urban Development Authority (VUDA) is awaiting and the amount shall be received only thereafter and asked him to contact after 10 days. He accordingly visited the office of the defendant, but no information was given by the defendant company.
(c) It is further pleaded that the plaintiff during his enquiry came to know that in case of plots lying in industrial zones, the competent authority for approval is APIIC. He also came to know that the defendant already sold away some plots in pursuance of the notification and denying sale of plots to him and some other applicants. Though he requested the defendant authorities for registration of the plot, it became futile and having no other go, he got issued a registered notice dated 19-8-2003 demanding the defendant to register and deliver the schedule property by receiving balance sale consideration. The said notice was acknowledged by the defendant, who sent a reply dated 13-9-2003 with false and untenable contentions. Thus, he sent a rejoinder dated 22-9-2003, which was acknowledged and a reply was also given on 12-10-2003 with evasive, false and untenable contentions.
(d) It is further pleaded that the plaintiff was forced to incur debts at high rates of interest with a view to deposit amount as per the schedule given by the defendant in its letter dated 06-3-2003, that he was paying high rates of interest at 3% per annum. Due to the breach of contract committed by the defendant, he suffered loss, which the defendant is liable to compensate for mental agony. He filed a writ petition bearing No. 22971 of 2003 before this Court for a direction in the nature of mandamus to register the plot, but the said writ petition was dismissed giving him liberty to approach the civil court. He is always ready and willing to have the sale deed registered. He retained the banker’s cheq
