Summary
The Court restored specific performance of a land-sale agreement requiring the vendors to obtain Urban Land Ceiling permission. The binding Full Bench ruling did not invalidate that contractual arrangement; in any event, repeal removed the statutory impediment without affecting a saved or vested right here. Litigation delay and price escalation alone did not justify refusing performance to the ready and willing purchaser. Its own offer of Rs.1.25 crores was made payable within eight weeks.
Issues
- Whether the binding Full Bench decision invalidated this agreement requiring the vendors to obtain permission.
- Whether repeal during the appeal removed the asserted statutory bar.
- Whether court delay and rising property prices justified substituting compensation for specific performance.
Provisions considered
- Sections 2 and 3, Tamil Nadu Urban Land (Ceiling and Regulation) Repeal Act, 1999Applied repeal where no steps had been taken under the principal Act and no saving or vested right prevented relief. (¶¶ 22, 23, 24, 25, 26, 27)
- Section 20, as applicable before the 2018 substitution, Specific Relief Act, 1963Required judicial exercise of discretion and rejected refusal based solely on litigation delay or price escalation. (¶¶ 28, 29, 30, 31, 32)
Held
- The inter-partes Full Bench decision bound the parties even on legal issues arising from the same cause. Properly read, it did not bar enforcement of this agreement, whose express clause obliged the vendors to obtain the relevant permission; enforcing that obligation did not rewrite the bargain. (¶¶ 14, 15, 16, 17, 18, 19)
- The agreement was not void at inception, making authorities on revival of void agreements inapplicable. Whether Section 5(3) and its proviso applied did not require determination. Conditional specific-performance decrees subject to obtaining competent-authority permission are recognised. (¶¶ 19, 20, 21)
- No steps had been taken under the ceiling legislation, so the repeal saving did not apply. An appeal continues the suit, and the relevant change in law could be applied at the appellate decree without taking away a vested right. The defendants had no such vested right under the ceiling legislation. (¶¶ 22, 23, 24, 25, 26, 27)
- Under the former Section 20, discretion must be sound and guided by judicial principles. Mere escalation in land prices or passage of time is insufficient by itself to refuse specific performance. Delay caused by court proceedings cannot be attributed to the plaintiff, though additional payment may be appropriate on the particular facts. (¶¶ 28, 29, 30, 31)
- The purchaser’s default where time is of the essence may justify a different result, but this purchaser remained ready and willing while the vendors breached the permission obligation and advanced dishonest pleas. Their compensation offer did not justify withholding performance. The purchaser was bound to its own additional offer of Rs.1.25 crores. (¶¶ 31, 32)
Result
Appeal allowed without costs. Division Bench judgment substituting compensation set aside and Single Judge’s specific-performance decree restored. Appellant directed to pay Rs.1.25 crores to respondents within eight weeks, as it had offered.