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PUNJAB & HARYANA HIGH COURT
J.V.Gupta, J.
Harbans Atma Singh
Versus
Ramesh Kumar
First Appeal No. 1169 of 1984,
Decided On : APRIL 30, 1985
SPECIFIC PERFORMANCE - AGREEMENT OF SALE - RESUMPTION OF PLOT - RESTORATION SUBJECT TO CONSTRUCTION - NO PERMISSION FOR TRANSFER - SPECIFIC PERFORMANCE NOT MAINTAINABLE - DAMAGES.
Fact of the Case:
The defendant was allotted a residential plot by the Chandigarh Administration from the defence quota. The conveyance deed provided that the transferee was to complete the construction of the house within one year and that the plot could not be transferred for a period of 10 years from the date of completion of construction. The plot was resumed for non-construction of the building. The Chief Commissioner restored the site subject to the condition that the construction was completed by a certain date. During the pendency of these proceedings, the defendant entered into an agreement to sell the plot to the plaintiff. The Estate Officer refused permission for the sale. The plaintiff filed a suit for specific performance of the agreement.
Finding of the Court:
The court held that the plaintiff was not entitled to a decree for specific performance of the agreement in the absence of the necessary permission for transfer from the Estate Officer. The court also held that the defendant was entitled to damages for breach of the agreement.
Issues: Whether the plaintiff was entitled to a decree for specific performance of the agreement in the absence of the necessary permission for transfer from the Estate Officer.
Ratio Decidendi: The court held that the plaintiff was not entitled to a decree for specific performance of the agreement because the permission of the Estate Officer was required for the transfer of the plot and such permission had been refused. The court also held that the defendant was entitled to damages for breach of the agreement because the parties had agreed upon the compensation to be paid by the defaulting party.
Final Decision: The appeal was allowed, the judgment and decree of the trial Court was set aside, and instead the plaintiff's suit was decreed for the recovery of Rs.40,000/- by way of damages for the breach of the agreement for sale. The plaintiff was also entitled to interest on the earnest money of Rs.20,000/- from the date of the suit till its realization at the rate of 6% per annum.
1. This is a defendant s appeal against whom decree for possession by specific performance of the agreement of sale has been passed by the trial Court.
2. The defendant Smt. Harbans Atma Singh wd/o Major General Atma Singh was allotted a residential plot on instalments by the Chandigarh Administration from the defence quota in the year 1967. Regular conveyance deed for the said plot was executed between the defendant and the Chandigarh Administration on 27th July, 1971, Photostat copy of which is Exhibit Dy. According to the terms of the conveyance-deed the transferee was to complete the construction of the house on the said site, in accordance with the Punjab Capital (Development and Regulation) Building Rules, 1952 within one year from the date of issue of allotment order, i.e. from 29th May, 1967, provided that the time limit could be extended by the Estate Officer if he was satisfied that the failure to complete the building within the said time was due to some causes beyond the control of the transferee.
It was also provided therein that since the plot was allotted at a concessional price, the transferee was refrained, except with the previous permission in writing of the Estate Officer, from transferring by way of sale, gift, mortgage or otherwise the site or any right, title or interest therein for a period of ten years from the date of completion of construction on the said date. Subsequently, on 31st Dec., 1979 the said plot was resumed for non-construction of the building as per the terms of the conveyance-deed. The transferee approached the Chief Commissioner, Union Territory, Chandigarh by way of revision petition against the said order of resumption. Vide order dated 29th May, 1980, copy Exhibit D.4, the learned Chief Commissioner found that it was a fit case in which relief should be granted, the operative part of the order is as under :-
"The site is restored subject to the condition that the petitioner completes the construction by the 31st (sic) June, 1981, failing which the site shall stand resumed. The petition is allowed accordingly."
In the meanwhile, the transferee entered into an agreement Exhibit P1, of sale of plot on 2nd April, 1980 with the plaintiff Shri Ramesh Kumar, for a sum of Rs.2,90,000/-. A sum of Rs.20,000/- was paid by way of earnest money at the time of the execution of the agreement. As per the terms of the said agreement last date for the execution of the sale-deed was fixed on or before 5th June, 1980 or after thirty days of receipt of "No Objection Certificate" from the Estate Officer, Chandigarh. It was also provided in the said agreement that if the seller-party backs out, he will pay double the amount received by him or paid on behalf of the sellers to the Estate Office, Chandigarh. According to the plaintiff he was ready and willing to perform his part of the agreement but from the act and conduct of the defendant it was revealed that she was not interested in the sale of the plot from the very beginning and she has very cleverly duped the plaintiff and cheated him of Rs.20,000/-. It was also alleged that no steps were taken by the defendant for obtaining the requisite permission and certificates from the concerned authority. He even did not apply for the said purpose to any officer or authority for getting the necessary permission to transfer of the said plot. With these allegations a suit for possession by specific performance of the agreement of sale of plot was filed on 16th July, 1980. In para 11 thereof it was also stated:-
"That in case, this Hon ble Court holds that the plaintiff is not entitled to the possession of the plot by specific performance of the contract due to any reason or reasons and can be compensated otherwise (which facts are not admitted by the plaintiff) in that event the plaintiff is entitled to compensation by way of damages for more than Rs.50,000/-."
In the written statement filed on behalf of the defendant the execution of the agreement as suc
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