Summary
Subsequent purchasers sought specific performance against landowners through agreements with the original vendees. The Supreme Court found no valid assignment with the owners’ consent: the arrangements involved intertwined development obligations and were contingent on performance of the original sale agreement. Those original rights had not fructified and were abandoned. Specific performance was refused, but refund and damages against the original vendees were ordered.
Issues
- Whether the subsequent purchasers were valid assignees entitled to specific performance against the original owners.
- Whether contingent later agreements remained enforceable after abandonment of the original agreement.
- What alternative monetary relief was appropriate.
Provisions considered
- Section 15(b), Specific Relief Act, 1963An assignee’s entitlement depends on the contract and the law of assignment. The original obligations were unperformed and the owners had not accepted their transfer to the plaintiffs. (¶¶ 7, 9, 10, 11, 12, 14)
- Sections 40 and 53, Indian Contract Act, 1872Personal performance and consent were relevant to transfer of the development obligations; prevention of reciprocal performance supported compensation against the original vendees. (¶¶ 10, 19)
Held
- Contractual rights may ordinarily be assigned, but obligations require the promisee’s consent. Benefits coupled with corresponding burdens and personal contractual considerations require examination of the contract and circumstances. (¶¶ 7, 8, 9, 10, 11)
- Signing development permissions and attending the ceremony did not establish the owners’ consent to assignment. The later agreements were contingent independent arrangements rather than an enforceable assignment against the owners. (¶¶ 12, 13, 14)
- The original vendees had neither fulfilled their obligations nor maintained their effort to enforce the original contract. Its abandonment made enforcement of the contingent later agreements impossible. (¶¶ 16, 17)
- Although specific performance failed, the apparent effort to frustrate the later agreements justified damages against the original vendees; no monetary remedy lay against owners lacking privity. (¶ 19)
Result
Appeals partly allowed and the High Court judgment set aside. Specific performance was refused. Refund of Rs. 5,000 under each later agreement with 9% annual interest from 14 September 1987 until realization was upheld. Original vendees were also directed to pay the plaintiffs Rs. 1,80,000 damages with 9% annual interest from the suits. The High Court was to return the plaintiffs’ deposited consideration expeditiously.