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2024 Supreme(Online)(GUJ) 26531

HIGH COURT OF GUJARAT
MS. JUSTICE SANGEETA K. VISHEN, MR.JUSTICE SANJEEV J.THAKER, JJ
VAIKUNTH PURUSHOTTAM MASHROO – Appellant
Versus
S K ASSOCIATES – Respondent
FIRST APPEAL NO. 4222 of 2024



Petitioner Advocates:MR V Z BHARDA(12667) ,Respondent Advocate:

A suit for specific performance is not maintainable without challenging the cancellation of the agreement, emphasizing the necessity of adherence to contractual terms.

Headnote:(A) Specific Relief Act, 1963 - Section 10 - Development Agreement - The appellants executed a development agreement for consideration of Rs.1 crore and an additional Rs.58,00,000/-, with time being the essence of the contract. The original plaintiff's failure to adhere to the contract terms led to a revocation notice, yet the court directed the parties to pay the remainder amount and execute the sale deed. (Paras 2 and 3)

(B) Specific Performance - A suit for specific performance is not maintainable without a challenge to the cancellation of the agreement. Reliance placed on Sushil Kumar Agarwal vs. Meenakshi Sadhu and I. S. Sikandar

(D) By Lrs. vs. K. Subramani. (Paras 3)

Facts of the case:
The appellants entered into a development agreement with the respondent for Rs.1 crore and Rs.58,00,000/-, with specific payment timelines that were not adhered to, resulting in a revocation notice.

Findings of Court:
The court extended the stay on execution of the sale deed until the next hearing date.

Issues: The main issues addressed were whether the suit for specific performance was maintainable without challenging the cancellation of the agreement.

Ratio Decidendi: The court emphasized that without contesting the termination of the agreement, a suit for specific performance cannot proceed.

Result: Notice issued to respondents, stay extended.

ORAL ORDER

(PER : HONOURABLE MS. JUSTICE SANGEETA K. VISHEN) Order in First Appeal:

1. Heard Mr Varun Z. Bharda, learned advocate appearing with Mr Vivik J. Barot, learned advocate for the appellants.

2. Mr Varun Z. Bharda, learned advocate submitted that development agreement dated 11.02.2016 was executed between the appellants on one hand and the respondent no.1 on the other, for a consideration of Rs.1 crore, for developing the land in question, followed by another agreement of the same date, agreeing for payment of consideration of additional Rs.58,00,000/-. It is submitted that first installment of Rs.58,00,000/- was to be paid within three months from the date of execution of the agreement, that is, on or around 11.05.2016. Another consideration of Rs.1 crore, was to be paid in two installments by six months and 9 months, respectively, that is, in the month of August 2016 and November 2016. Clearly, time was the essence of the contract; however, original plaintiff failed to adhere to the conditions agreed which led to the issuance of revocation notice dated 25.11.2016 clearly cancelling the agreement, followed by another notice dated

03.01.2017. It is submitted that non-adherence of the terms of the contract has been clearly proved; however, the learned Judge, has directed the parties to pay the remainder amount and execute the sale deed.

3. Reliance is placed on the judgment in the case of Sushil

Kumar Agarwal vs. Meenakshi Sadhu reported in (2019) 2 SCC 241. It is also submitted that without there being any challenge to the cancellation of the agreement, suit for specific performance was not maintainable. For that proposition, reliance is placed on the judgment in the case of I. S. Sikandar (D) By Lrs. vs. K. Subramani reported in 2013 (15) SCC 27. It is submitted that it has been held and observed that in absence of any challenge to the termination agreement, the suit filed for specific performance of the agreement to sell, would not be maintainable in law. It is submitted that the appellants have been directed to execute the sale deed at the earliest and hence, some protection.

4. Considered the submissions. Issue notice to the respondents, returnable on 18.12.2024. Direct service is permitted.

Order in Civil Application: Issue notice, returnable on 18.12.2024.

Till next date of hearing, stay granted by learned 16 th Additional Senior Civil Judge vide order dated 05.11.2024, is extended till then. Direct service is permitted.

(SANGEETA K. VISHEN,J) (SANJEEV J.THAKER,J) RAVI P. PATEL

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