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2003 Supreme(Mad) 801

Madras High Court
A. K. RAJAN
Sushila - Appellant
Versus
Nihalchand Nahata - Respondent
Decided On : 06/17/2003

Advocates:
T. Viswanatha Rao, for Plaintiff; M/s. Aiyar and Dolia, for Defendant.

An agreement for sale of land is valid and enforceable if it is not contrary to law or public policy.

Headnote:

SPECIFIC PERFORMANCE - SALE OF LAND - AGREEMENT - EXEMPTION FROM URBAN LAND CEILING ACT - INCOME TAX CLEARANCE CERTIFICATE - NON-PERFORMANCE OF CONDITIONS - READINESS AND WILLINGNESS TO PERFORM - TIME ESSENCE OF CONTRACT - DELAY - SUIT FOR SPECIFIC PERFORMANCE - MAINTAINABILITY - LIMITATION - URBAN LAND CEILING ACT, 1976 - SECTION 6 - TAMIL NADU URBAN LAND (CEILING AND REGULATION) ACT, 1978 - SECTION 6.

Fact of the Case:

Plaintiff and the original defendant entered into an agreement for sale of land. The agreement contained reciprocal promises, including obtaining exemption from the Urban Land Ceiling Authority and income-tax clearance certificate. The plaintiff paid an advance of Rs. 5 lakhs. The defendant did not take steps to comply with the terms and conditions of the agreement. The plaintiff made a demand on the defendant to complete the sale transaction, but the defendant sent a letter cancelling the agreement. The plaintiff filed a suit for specific performance.

Finding of the Court:

1. The agreement for sale of land was valid and enforceable. 2. The plaintiff was not guilty of breach of the terms of the contract. 3. The defendant was not entitled to cancel the agreement unilaterally. 4. The suit for specific performance was maintainable and was not barred by limitation. 5. The plaintiff was entitled to a decree of specific performance with respect to the land that had been exempted by the Urban Land Ceiling Authorities.

Issues: 1. Whether the suit is legally valid and enforceable? 2. Whether the suit as framed and filed is defective since the defendant was described as represented by his Power of Attorney Agent ? 3. Whether the suit is barred by limitation? 4. Whether the suit was under-valued for the purpose of court fee? 5. Whether the plaintiff was ready and willing to perform his part of the contract? 6. To what relief the parties are entitled?

Ratio Decidendi: 1. An agreement for sale of land is valid and enforceable if it is not contrary to law or public policy. 2. A party to a contract cannot be held guilty of breach of contract if he/she is prevented from performing the contract by the other party. 3. A unilateral cancellation of a contract is not valid. 4. A suit for specific performance is maintainable if the plaintiff is ready and willing to perform his/her part of the contract and the defendant is not entitled to cancel the contract unilaterally. 5. A suit for specific performance is not barred by limitation if it is filed within the period prescribed by the Limitation Act.

Final Decision: The suit for specific performance was decreed partly with proportionate costs. The defendants were directed to execute the sale deed transferring the extent of suit land to which the Urban Land Ceiling Authorities had granted exemption under the Urban Land Ceiling Act, in favour of the plaintiff or his nominees within a period of two months from the date of the judgment, failing which the plaintiff was entitled to get the sale deed executed through Court.

JUDGMENT :- This suit for specific performance was filed originally against one defendant. Since he died pending suit, his legal representatives were added as defendants-1 to 4.

2. The plaint averments are as follows : The plaintiff intended to start an Educational Society with various teaching institutions; she was in search of suitable extent of vacant land to start the institution. While so, the original defendant represented to her that he is the sole and absolute owner of the suit property, having purchased the property in public auction held by Murrey and Company on 12-11-1975, under a registered sale deed; he further represented that a portion of the said property together with the bungalow and the appurtenant land was already sold to one Saraswathy Kailasam under a registered deed of sale, dated 29-3-1984 and the balance of the land to the extent of 9 acres 50 cents were available and it was free from all encumbrances and he was ready and willing to sell the land for a sum of Rs. 15 lakhs; the plaintiff agreed to purchase the same, subject to the approval of title and some other conditions. Accordingly, the plaintiff entered into an agreement for sale with the original defendant, represented by his Power of Attorney, on 4-11-1985 at Madras; on 17-3-1985, a sum of Rs. one lakh was already paid as advance and the defendant further received another sum of Rs. 4 lakhs on 18-6-1985 amounting to a total advance of Rs. 5 lakhs; the original defendant acknowledged the receipt of the same in the agreement. The original defendant agreed to obtain exemption for the transfer of property, in favour of the plaintiff from the Urban Land Ceiling Authority and also necessary Income-tax Clearance Certificate. The defendant agreed to sign and give necessary documents to enable the plaintiff to make applications to the Urban Land Ceiling Authority to obtain necessary exemption certificate and to obtain and produce the necessary income-tax clearance certificate; he also agreed to make available all the title deeds for scrutiny and investigation of the title of the defendant by the counsel for the plaintiff. The plaintiff agreed that in the event of sale transaction being completed, she should obtain vacant possession from the Madras Race Club, an occupier in respect of a portion of the property. Subject to all the above conditions, the parties agreed that the sale transaction shall be completed within six months. The plaintiff had been requesting the defendant to sign and present necessary documents for obtaining permission from the Urban Land Ceiling Authority and from the Income-tax Department. The defendant was lethargic and was postponing to comply with the request of the plaintiff. The plaintiff was all along ready and willing and continued to be ready and willing to pay the balance of the sale price to the defendant and complete the sale transaction in her favour, provided the defendant complies with the condition of the agreement. Though the defendant informed the plaintiff that he was taking steps to get necessary Income-tax Clearance Certificate from the authorities, no such certificate was either obtained or furnished to the plaintiff. The plaintiff requested the defendant several times to obtain such certificate. The plaintiff also requested the defendant to file an application for obtaining clearance certificate from the Land Ceiling Authority. But the defendant did not co-operate with the plaintiff; though the plaintiff furnished some of the original title deeds relating to the property, the defendant did not take steps. Therefore, the defendant clearly committed default of the agreement; the plaintiff made a demand on the defendant to complete the sale transaction; hence, the suit is filed praying for a direction to the defendant to execute the sale deed conveying the suit property in favour of the plaintiff after receiving the balance of sale consideration of Rs. 10 lakhs and also to give possession of the suit property to th







































































































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