Important point
The High Court was wrong in upholding decree of specific performance in respect of land in question subject to issue of final declaration under Section 21 of Urban Land (Ceiling and Regulation) Act, 1976. In fact no such decree could be passed in this case.

Headnote:Specific Relief Act, 1963—Sections 14(1)(c), 14(1)(d), 20—Contract Act, 1872—Section 202—Urban Land (Ceiling and Regulation) Act, 1976—Sections 21 and 42—Agreement between husband of appellant and respondent 1 followed by General Power of Attorney and declaration on affidavit giving respondent 1 right to construct flats on surplus open land in his palace for weaker sections of society—Later revoked though they were termed as irrevocable—Suit for specific performance—Granted by Trial Court—Affirmed by High Court subject to approval under Section 21 of Urban Land Ceiling Act—Appeal against—Whether High Court or Trial Court were right? (No)—Appeal allowed subject to undertaking in statement of appellant to offer 66 acres of land to Gujarat State Government.
       (Paras 39, 40, 41, 45, 46, 49, 51, 56 to 63)
       Held : Under Clause 17 of the agreement the contract could be unilaterally rescinded before delivery of possession (Para 51). It was so determined and to such agreement Section 14(1)(c) of Specific Relief Act, 1963 applies. Therefore, agreement cannot be specifically enforced (Para 57). Agreement is also not specifically enforceable under Section 14(1)(d) of the Specific Relief Act, 1963 as performance of the agreement involves performance of a continuous duty which the Court cannot supervise (Para 58). The grant of divorce of specific performance can be refused under Section 20 of Specific Relief Act (Para 59). Repeal of Urban Ceiling Act does not help specific enforcement of agreement (Para 60). It is neither a case of contract of agency coupled with interest (Para 48). Nor a contract for transfer of property plaintiff could have claimed damages as an alternative relief (Para 61). Appeal allowed setting aside decree of specific performance (Para 65). But appellant is bound by her undertaking to offer 66 acres of land to Government of Gujarat (Paras 62, 63). Conduct of Specific Authority. Competent Authority and State of Gujarat in Trial of case criticised (Para 64). Case Law discussed.

Judgment

Y.K. Sabharwal, J.—By judgment under challenge, the High Court modifying the decree passed by the trial court for specific performance in respect of land in question, directed that the plaintiff-respondent No.1 in this appeal, shall be entitled to enforce the said decree subject to the issue of final declaration under Section 21 of the Urban Land (Ceiling and Regulation) Act, 1976 (For short, the ‘ULC Act’) by the authorities in accordance with law. In other respects, substantially the judgment and decree of the trial court was upheld.

2. The defendants are in appeal.

3. In the appeal and other connected counter matters the main question is about the interpretation of certain provisions of the ULC Act. This Act, in the first instance, came into force on the date of its introduction in the Lok Sabha, i.e., 28th January, 1976 and covered the Union Territories and 11 States which had already passed the requisite resolution under Clause (1) of Article 252 of the Constitution. This provision of the Constitution empowers the Parliament to legislate for two or more States on any of the matters with respect to which it has no powers to make laws except as provided in Articles 249 and 250. The effect of passing of a resolution under clause (1) of Article 252 is that the Parliament, which has no power to legislate with respect to the matter which is the subject matter of the resolution, becomes entitled to legislate with respect to it. On the other hand, the State Legislature ceases to have a power to make a law relating to that matter.

4. On 14th August, 1972 the Gujarat Assembly had resolved that the imposition of the ceiling on the holding of urban immovable property and acquisition of such property in excess of the ceiling and matters connected therewith or ancillary and incidental thereto should be regulated in the State of Gujarat by the Parliament by law.

5. The ULC Act received assent of the President on 17th February, 1976. The primary object and the purpose of the ULC Act is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good, in furtherance of the directive principles of Article 39(b) and (c).

6. Section 3 of the ULC Act provides that except as otherwise provided in the Act, on and from the commencement thereof, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under sub-section (2) of Section 1. The expression ‘vacant land’ is defined in Section 2(q) to mean land not being land mainly used for the purpose of agriculture, in an urban agglomeration, but does not include certain categories as stated in the section. The term ‘urban land’ is defined in Section 2(o) of the ULC Act which reads as under :

"2(o) "urban land" means,—

(i) any land situated within the limits of an urban agglomeration and referred to as such in the master plan; or

(ii) in a case where there is no master plan, or where the master plan does not refer to any land as urban land, any land within the limits of an urban agglomeration and situated in any area included within the local limits of a municipality (by whatever name called), a notified area committee, a town area committee, a city and town committee, a small town committee, a cantonment board or a panchayat,

but does not include any such land which is mainly used for the purpose of agriculture.

Explanation.—For the purpose of this clause and Cl. (q),—

(A) "agriculture" includes horticulture, but does not include,-

(i) raising of grass,

(ii) dairy farming,

(iii) poultry farming,

(iv) breeding of live-stock, and

(v) such cultivation o

Click Here to Read the rest of this document

2001 Supreme(SC) 533

Important pointThe High Court was wrong in upholding decree of specific performance in respect of land in question subject to issue of final declaration under Section 21 of Urban Land (Ceiling and Regulation) Act, 1976. In fact no such decree could be passed in this case.

Cases Referred (8)

Important point
The High Court was wrong in upholding decree of specific performance in respect of land in question subject to issue of final declaration under Section 21 of Urban Land (Ceiling and Regulation) Act, 1976. In fact no such decree could be passed in this case.