Summary
A July 1978 agreement to sell Hyderabad property required the vendor to obtain Urban Land Ceiling permission within 75 days, and let the purchaser reclaim his Rs. 15,000 advance between 75 and 90 days. When an exemption under Section 20 of the ULC Act could not be obtained, the vendor cancelled in April 1982. The purchaser did nothing for two years and sued for specific performance only after the exemption was granted in 1984. The High Court refused specific performance and awarded about Rs. 3 lakh. The Supreme Court upheld the refusal. Under K.S. Vidyanadam, time limits fixed for urban property in a rising market cannot be ignored, and the purchaser's conduct disentitled him to discretionary relief. Because the vendor had held the advance since 1978, the Court raised the payment to Rs. 15 lakh.
Issues
- Whether a purchaser was entitled to specific performance where the agreement fixed time limits for obtaining Urban Land Ceiling permission and reclaiming the advance, the vendor had cancelled after permission was not obtained, and the purchaser sued only after a two-year lull when permission was later granted.
- What monetary relief was just given that the vendor had held the advance since 1978.
Provisions considered
- Section 20 (discretion), Specific Relief Act, 1963Specific performance is discretionary. Time limits in the contract and the purchaser's conduct, especially for urban property in a rising market, weigh against granting it (K.S. Vidyanadam). (¶¶ 12, 13, 16)
- Section 20, Urban Land (Ceiling and Regulation) Act, 1976The sale required exemption under this provision. The agreement made the vendor responsible for obtaining it within 75 days, failing which the purchaser could recover the advance within 90 days. (¶¶ 2, 4, 9, 10)
Held
- Clauses 3 and 5 required the vendor to obtain ULC permission within 75 days and allowed the purchaser to reclaim the advance between 75 and 90 days. The High Court rightly read them as showing that the parties intended those time limits to matter. (¶¶ 9, 10, 13)
- Time limits fixed by the parties must be given significance even if time is not of the essence, particularly for urban property whose price rises sharply (K.S. Vidyanadam). (¶ 12)
- After the vendor cancelled in April 1982, the purchaser did nothing until the exemption was granted in February 1984. His conduct disentitled him to specific performance, and the concurrent refusal by the Single Judge and the Division Bench called for no interference. (¶¶ 11, 13, 14, 16)
- Since the vendor had received Rs. 15,000 as early as 1978, the respondents were directed to pay the appellants Rs. 15 lakh within three months. (¶ 16)
Result
Appeal allowed in part. The refusal of specific performance was upheld, but the respondents were directed to pay the appellants Rs. 15,00,000 within three months in place of the High Court's award. No costs.