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1989 (5) TMI 323 - HC - FEMA

Issues Involved:

1. Whether the suit in the present form is maintainable.
2. Whether the plaintiff is not entitled to the relief claimed due to the provisions of Section 27 of the Urban Land (Ceiling Regulation) Act, 1976, and for want of permission from the Land & Development Officer, New Delhi.
3. Whether the plaintiff has committed a breach of the contract as alleged in paras 8 and 9 of the written statement.
4. Whether the plaintiff has been ready and willing and is still ready and willing to perform his part of the contract.
5. In case specific performance is refused to the plaintiff, whether he is entitled to damages in the alternative, and if so, to what amount.
6. Whether the agreement to sell is void and inoperative in view of the reasons stated in preliminary objection No. 4 of the amended written statement dated 12th February 1980.

Issue-wise Detailed Analysis:

Issue 1: Whether the suit in the present form is maintainable
The court noted that the plaintiff initially filed the suit only for possession, reserving the right to claim specific performance after obtaining the requisite permission from the Land and Development Officer. However, the plaintiff later amended the plaint to claim specific performance of the agreement dated 19.12.76. The court found that the objection regarding the form of the suit was no longer available to the defendants due to the amendment. The court ruled in favor of the plaintiff on this issue.

Issue 2: Whether the plaintiff is not entitled to the relief claimed due to the provisions of Section 27 of the Urban Land (Ceiling Regulation) Act, 1976, and for want of permission from the Land & Development Officer, New Delhi
The court addressed the argument that the sale was subject to permission from the Land and Development Office, as stated in the agreement. The court noted that the plaintiff had averred in the plaint that he was always prepared to pay the amount and perform his obligations under the agreement. The court found no valid objection to the maintainability of the suit in the form filed and ruled in favor of the plaintiff on this issue.

Issues 3, 4, and 5: Whether the plaintiff has committed a breach of the contract, whether the plaintiff has been ready and willing to perform his part of the contract, and whether the plaintiff is entitled to damages in the alternative
The court found no substantial dispute regarding the agreement dated 19.12.76, which was signed by all defendants except defendant No. 3, who was represented by his father and attorney, defendant No. 6. The court noted that the main defense raised by the defendants was that the plaintiff wanted to pay Rs. 65,000 from unaccounted money, which was not initially pleaded by the defendants. The court found that the defendants failed to prove this allegation and that the letters purportedly sent by defendant No. 6 to the plaintiff were fabricated.

The court observed that the plaintiff had made every effort to pay the amount and take possession of the property, as evidenced by the telegram, notice, and letters sent by the plaintiff. The court found that the plaintiff had always been ready and willing to perform his part of the contract and that the defendants had been avoiding their obligations. The court also noted that the permission from the Land and Development Office was not a condition precedent for granting a decree for specific performance, citing the Supreme Court's decision in Mrs. Chandnee Widya Vati Madden v. Dr. C.L. Katial & Ors.

The court ruled in favor of the plaintiff on these issues, concluding that the plaintiff did not commit a breach of the contract and had always been ready and willing to perform his part of the contract. The court found no merit in the defendants' argument that it was not equitable to grant specific performance and ruled that the relief of specific performance could not be refused to the plaintiff.

Issue 5A: Whether the agreement to sell is void and inoperative in view of the reasons stated in preliminary objection No. 4 of the amended written statement dated 12th February 1980
The defendants argued that the agreement to sell was void because defendant No. 2, a non-citizen of India, could not transfer immovable property in India without prior permission from the Reserve Bank of India, as per Section 31 of the Foreign Exchange Regulation Act, 1973. The court found that Section 31 only placed a restriction on the transfer or sale of immovable property by a foreign citizen and did not bar entering into an agreement to sell. The court held that the agreement was not void and that the question of permission from the Reserve Bank of India would arise at the stage of executing the sale deed. The court ruled against the defendants on this issue.

Relief:
The court concluded that the plaintiff was entitled to a decree for specific performance of the contract and ruled in favor of the plaintiff on all relevant issues. The court found that the provisions of Section 27 of the Urban Land (Ceiling and Regulation) Act and the need for permission from the Land and Development Officer did not bar the grant of a decree for specific performance. The court also ruled that the agreement to sell was not void under Section 31 of the Foreign Exchange Regulation Act.

 

 

 

 

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