V.K. Jain, J. (Oral)

IA 10720/2011 (filed by defendant No. 3 & 5 under Section 14(1)(c) of Specific Relief Act read with Section 151 of CPC

1. Clause 20 of the first agreement and clause 17 of the second agreement both dated 16.09.2009 which are the subject matter of this suit, read as under:-

"If this Agreement is not implemented within twelve calendar months from the date hereof this Agreement shall stand terminated and extinguished automatically without any further act of parties and the Vendors shall be at liberty to sell the said property to any other person after refund of earnest money, as also other lawful charges hereinabove mentioned if paid by the Vendee on behalf of the Vendor'; the intention of the parties is that they shall all be restored to the same position as at the date hereof and as if this Agreement had not been executed."

2. Relying upon the provisions contained in Section 14(1)(c) of Specific Relief Act, defendants No. 3 and 5 have contained that since the agreements are determinable in nature, the suit is hit by the aforesaid provision and the agreements in question cannot be enforced. In support of their contention, the applicants have relied upon the decision of the Supreme Court in Her Highness Maharani Shantidevi P. Gaikwad v. Savjibhai Haribhai Patel and Others, (2001) 5 SCC 101 and Central Bank of India v. Hartford Fire Insurance Co. Ltd. AIR 1965 SC 1288.

3. The application has been opposed by the plaintiff who states that the contract is not determinable in nature and reliance on Section 14(1)(c) of Specific Relief Act, therefore, is totally misplaced.

4. Section 14(1) of Specific Relief Act deals with the contracts which cannot be specifically enforced and such contracts include a contract which by its nature is determinable. Therefore, the question which comes up for consideration is as to whether the agreements dated 16.09.2009 can be said to be determinable by nature within the meaning of Section 14(1)(c) of Specific Relief Act. In my view, Section 14(1)(c) of Specific Relief Act deals with the contracts which a party to the contracting is entitled to determine, during the subsistence of the contract. This clause, in my view, does not refer to a contract which would stand determined on account of non-performance of his obligation by a party to the agreement. Defendant No. 5 states that clause 20 of the first agreement and clause 17 of the second agreement, which are identical clauses, provide for termination of the contract in the event of its not being implemented within the time frame fixed in the agreement and not by an action of a party to the agreement. Even if the interpretation being given by defendants No. 3 and 5 is accepted, a clause providing for automatic termination of the contract on account of its not being implemented within a given time frame would not make the contract terminable in nature, within the meaning of Section 14(1)(c) of Specific Relief Act, which I feel only to such contracts which provide for its termination by a party to the agreement, during the subsistence of the agreement. Section 14(1) (c) refers to agreements, which, either from their special character or from special stipulations, are determinable at the option or pleasure of the party against whom the relief is sought.

5. In the case of Her Highness Maharani Shantidevi v. Savjibhai Haribhai Patel and Others, (2001) (5) SCC 101, an agreement dated 24.03.1977 was entered into between the owner and the licensee in respect of a property known as Laxmi Vilas Palace Estate, Vadodra. The plaintiff in that case had evolved a scheme for constructing dwelling units for the accommodation of the weaker sections of society and those units were to be constructed on the portion of the properties. Clause 17 of the agreement provided that it would not be unilaterally rescinded by either party, after the licensee had been put in the possession of the property. It was held by the Court that the contract was of a determinable nat