2001 (3) TMI 1056 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the agreement, power of attorney, and affidavit-cum-declaration.
2. Entitlement to specific performance of the agreement.
3. Conditions required for specific performance.
4. Applicability and interpretation of the Urban Land (Ceiling and Regulation) Act (ULC Act).
5. Impact of the repeal of the ULC Act on the agreement.
6. Applicability of Section 202 of the Indian Contract Act.
7. Applicability of Section 14(1)(c) and Section 14(3)(c) of the Specific Relief Act, 1963.
8. Equitability of enforcing specific performance.

Detailed Analysis:

1. Validity of the Agreement, Power of Attorney, and Affidavit-cum-Declaration:
The High Court held that the agreement, power of attorney, and affidavit-cum-declaration were valid and subsisting documents, binding on the original defendant and his legal representatives. The agreement could not be rescinded, and the power of attorney could not be revoked.

2. Entitlement to Specific Performance of the Agreement:
The High Court concluded that the plaintiff was entitled to specific performance of the agreement, as monetary compensation was not adequate relief. However, the Supreme Court disagreed, stating that the agreement was incapable of being specifically enforced due to the land being reserved for open space in the master plan, making the construction of residential units impossible.

3. Conditions Required for Specific Performance:
The High Court imposed a condition that the decree for specific performance could be enforced only if a final declaration under Section 21 of the ULC Act was issued. The Supreme Court found that the agreement was terminable before the delivery of possession and thus could not be specifically enforced.

4. Applicability and Interpretation of the ULC Act:
The ULC Act aimed to impose a ceiling on vacant land in urban areas to prevent concentration of land and profiteering. The Supreme Court emphasized that the master plan relevant for considering schemes under Section 21 of the ULC Act is the one in existence when the scheme is considered, not the one at the time of the Act's enforcement.

5. Impact of the Repeal of the ULC Act on the Agreement:
The ULC Act was repealed during the pendency of the appeal. The Supreme Court noted that the repeal did not save orders sanctioning schemes under Section 21, and thus, no rights had accrued in favor of the plaintiff that could be protected under Section 6 of the General Clauses Act.

6. Applicability of Section 202 of the Indian Contract Act:
The High Court held that the agreement constituted an agency coupled with interest under Section 202 of the Indian Contract Act. However, the Supreme Court disagreed, stating that no interest was created in favor of the plaintiff by merely preparing the scheme and taking ancillary steps.

7. Applicability of Section 14(1)(c) and Section 14(3)(c) of the Specific Relief Act, 1963:
The Supreme Court found that the agreement was determinable before the delivery of possession and thus fell under Section 14(1)(c) of the Specific Relief Act, making it incapable of specific enforcement. The Court also noted that the performance of the contract involved continuous supervision, which the Court could not undertake, further supporting the non-enforceability under Section 14(1)(d).

8. Equitability of Enforcing Specific Performance:
The Supreme Court held that enforcing specific performance would be inequitable due to the impossibility of constructing residential houses for weaker sections on the reserved land, the difficulty of supervising the construction, and the potential for uncalled-for benefits to the plaintiff. The Court emphasized that the primary objective of the ULC Act was to prevent land concentration and profiteering, which would not be achieved in this case.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, dismissed the plaintiff's suit, and disposed of the transferred writ petition and SLP in terms of its judgment. The appellant's undertaking to offer 66 acres of land to the Government of Gujarat for constructing residential units for low-income groups was accepted. The Court expressed its dissatisfaction with the conduct of the specified authority, competent authority, and the State of Gujarat throughout the proceedings.