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TMI Blog2001 (3) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... are in appeal. 3. In the appeal and other connected counter matters the main question is about the interpretation of certain provisions of the ULC Act. This Act, in the first instance, came into force on the date of its introduction in the Lok Sabha, i.e., 28th January, 1976 and covered the Union Territories and 11 states which had already passed the requisite resolution under Clause (1) of Article 252 of the Constitution. This provision of the Constitution empowers the Parliament to legislate for two or more States on any of the matters with respect to which it has no powers to make laws except as provided in Articles 249 and 250. The effect of passing of a resolution under clause (1) of Article 252 is that the Parliament, which has no power to legislate with respect to the matter which is the subject matter of the resolution, becomes entitled to legislate with respect to it. On the other hand, the State Legislature ceases to have a power to make a law relating to that matter. 4. On 14th August, 1972 the Gujarat Assembly had resolved that the imposition of the ceiling on the holding of urban immovable property and acquisition of such property in excess of the ceiling and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed mainly for the purpose of agriculture, if such land is not entered in the revenue or land records before the appointed day as for the purpose of agriculture : Provided that where on any land which is entered the revenue or land records before the appointed day as for the purpose of agriculture, there is a building which is not in the nature of a farm-house then, so much of the extent of such land as is occupied by the building shall not be deemed to be used mainly for the purpose of agriculture : Provided further that if any question arises whether any building is in the nature of a farm-house, such question shall be referred to the State Government and the decision of the States Government thereon shall be final; (C) notwithstanding anything contained in Cl. (B) of this explanation, land shall not be deemed to be mainly used for the purpose of agriculture if the land has been specified in the master plan for a purpose other than agriculture. 7. The expression 'master plan' is defined in Section 2(h). It reads : 2. (h) master plan , in relation to an area within an urban agglomeration or any part thereof, means the plan (by whatever name called) prepare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or cases where excess land will not to be treated as excess. The said section reads thus : 21. Excess vacant land not to be treated as excess in certain cases.-(1) Notwithstanding anything contained in any of the foregoing provisions of this chapter, where a person holds any vacant land in excess of the ceiling limit and such person declares within such time, in such form and in such manner as may be prescribed before the competent authority that such land is to be utilised for the construction of dwelling unit (each such dwelling unit having a plinth area not exceeding eighty square meters) for the accommodation of the weaker sections of the society, in accordance with any scheme approved by such authority as the State Government may, by notification in the official Gazette, specify in this behalf, then, the competent authority may, after making such inquiry as it deems fit, declare such land not to be excess land for the purposes of this chapter and permit such person to continue to hold such land for the aforesaid purpose, subject to such terms and conditions as may be prescribed, including a condition as to the time limit within which such buildings are to be constructed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,00,000,000/-. It is not in dispute that even this scheme was evolved by the plaintiff. The plaintiff as power of attorney holder of original defendant No. 1 submitted a second scheme on 5th October, 1977 for construction of 38,375 dwelling units at the estimated cost of about ₹ 78,38,00,000/-. On 6th February, 1978 another scheme was submitted by the plaintiff which stipulated construction of 35,660 dwelling units at the proposed cost of ₹ 39,59,00,000/-. On 5/8th January, 1979 yet another scheme (4th scheme) for construction of 25,482 dwelling units at the estimated cost of about ₹ 48,35,00,000/- was submitted. Finally, a scheme (5th scheme) proposing construction of 4,356 dwelling units at the estimated cost of about ₹ 13,37,00,000/- was submitted on 29th January, 1979 by the plaintiff as a power of attorney holder of original defendant No.1. 14. Soon after the submission of the scheme dated 6th February, 1978, original defendant No.1 executed on 10th February, 1978 an affidavit-cum-declaration. This document, inter alia, declares that all terms and conditions contained in Para 1 to 19 of the agreement were agreed to and approve by original defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the scheme. 18. In the first appeal filed in the High Court challenging the judgment and decree of the trial court, three main questions considered were; (1) Whether the agreement could be rescinded; power of attorney cold be revoked and affidavit-cum-declaration ceased to be operative or not. (2) Whether it is a case for grant of relief of specific performance and; (3) If specific performance was to be ordered, whether any conditions were required to be imposed. 19. The High Court by impugned judgment dated 15th June, 1998 held that the main purpose for which the agency was created was the execution of the scheme for constructing dwelling units for weaker sections of the society and with that end in view the plaintiff had to prepare the scheme and get sanction from the authority in accordance with law and invoking Section 202 of the Contract Act, the High Court concluded that it is a case of agency coupled with interest. Answering the first question, the High Court held that the agreement could not be rescinded, power of attorney could not be revoked and affidavit-cum-declaration did not cease to be operative. The second question was also answered in favour of the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the passing of the impugned judgment and pursuant to directions contained therein. The said declaration, as already stated, is the subject matter of challenge in the transferred writ (SIC) entitled to enforce prior to issue of declaration under Section 21 of the ULC Act and before the plaintiff is put into possession. Is the plaintiff entitled to seek specific performance of the agreement or is he entitled to sue for only damages? 24. Now, with regard to documents executed between the plaintiff and original defendant No.1 the agreement and power of attorney were executed on the same day, i.e., 24th March, 1977. The affidavit-cum-declaration was executed by original defendant No.1 on 10th February, 1978. The plaintiff was to undertake the development of the property in the manner provided in the agreement in conformity with Section 21 read with rules and guidelines issued under the ULC Act. The original defendant No. 1, as stipulated in the agreement, agreed that the plaintiff shall construct dwelling units for the accommodation of the weaker sections of the society on his land. The delivery of possession by original defendant No. 1 to the plaintiff is contemplated by clause (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant No.1 is required to sign relevant papers, applications, plans, drawings etc. as and when required by the plaintiff for the purpose of declaration and inquiries contemplated by Section 21(1) of the ULC Act. On making of declaration, as per clause (4), original defendant No.1 is required to deliver possession of the land to the plaintiff for execution of the scheme and construction in terms thereof. The plaintiff is authorised to recover the price of the land as may be determined by the competent authority and/or the State Government from their prospective members in the scheme; and is also entitled to receive deposits from the members and obtain loans from banks and other financial institutions and/or individuals for financing the scheme. Likewise, in the power of attorney also, the plaintiff has been authorised to take certain steps on behalf of the owner before the grant of declaration under Section 21 and being put into possession and certain steps after being put into possession. It is correct, as contended by Mr. Dhanuka, that these documents form part of same transaction. These documents have to be read together with a view to find out the manifest intention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Mr. Dhanuka contended that the applicable master plan is the one that existed on the date when excess vacant land first acquired the character of such land, i.e., on enforcement of the ULC Act and according to the said master plan the land is reserved for residential houses. Further contention of leaned counsel is that assuming modification of the master plan is required to be considered, even then there is no impediment in the implementation of the scheme inasmuch as there does not exist absolute bar for construction of residential houses. It is submitted that as a matter of fact, the declaration dated 20th June, 1998 provides for obtaining of all requisite permissions whatever, if any, which may be required before commencing the actual construction or work. Further, it is contended, in case of inconsistencies, if any, between the provisions of Town Planning laws and the ULC Act, provisions of the ULC Act will prevail in view of overriding provisions as contained in Section 42 of the ULC Act. 29. In the draft development plan dated 29th February, 1963 prepared under the Bombay Town Planning Act, 1954, the entire area of Laxmi Vilas Palace Estate (Except the block of land alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame into force w.e.f. 1st February, 1978. 30. If the position had rested in terms of what has been stated above, the consequences may have been different. It was, however, not so. Under the aforesaid Gujarat Act, on 17th May, 1979, draft development plan under Section 13 was published wherein the suit land was designated as 'open space, sport stadium, Bus terminus and court'. During the pendency of the suit, on 25th January, 1984, the final development plan prepared by the Vadodara Urban Development Authority issued under the Gujarat Act came into effect. As per the said final development plan, the land in question is reserved for open space etc. as stated in draft development plan dated 17th May, 1979. 31. The Government of Gujarat issued a circular dated 1st April, 1978 regarding implementation of guidelines issued under Section 21 of the Act and amended ULC Rules. One of the salient feature of the said circular was that the scheme shall be in consistence with the Master plan. It also provided that the scheme submitted should adhere to the prevailing municipal Regulations, Town Planning requirements and other statutory requirements. If any development is required as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court following the decision of this Court in Atia Mohammadi Begum (Smt.) v. State of U.P. Ors. [1993]2SCR295 held that the construction of residential units cannot be said to be forbidden because of subsequent change in the master plan and for considering whether residential units can be constructed or not, the relevant master plan to be considered is the one which was in existence on 17th February, 1976, when the ULC Act was enforced. The High Court has held that : ..the construction of residential units on such land cannot be said to be forbidden by any law merely because in the subsequent master plan it has been shown to be open space. The right of the parties were crystallised on the date of the commencement of the Act and such rights have to remain unaffected by the subsequent events. 34. The High Court has further held: Atia Mohammadi begum (supra) cannot be ignored or cannot be held to be inapplicable to the facts of the present case on any of the grounds raised by the learned counsel for the defendant appellant and the matter has to be examined on the basis of the position as it was in existence with reference to the master plan on the date when the Ceilin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case is not of quantification of vacant land. Atia Begum was not concerned with the question of Town Planning Laws and the schemes under Section 21 of the ULC Act which is one of the principle question with which we are concerned here. It was not held in Atia Begum that planning and development which is a state subject would stand frozen on 17th February, 1976. The said decision cannot be read as laying down the law that for all and every purpose, the master plan as in existence on 17th February, 1976 will freeze. We leave open the question whether even for the purpose of quantification of vacant land that has become such after 17th February, 1976, would the position in regard to the master plan as existing on 17th February, 1976 remain unaltered or not. In the present case, on this aspect, it is not necessary to examine the correctness of the decision in Atia Begum's case. 38. It deserves to be emphasised that by passing a resolution under clause (1) of Article 252, the State Legislature only surrendered the right to legislate in respect of laws relating to the imposition of a ceiling on the holding of urban immovable property in excess of the ceiling and all matters c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of town planning or on coming into force of the ULC Act, the Master Plan would freeze. The Rules made under the ULC Act further make the position quite clear. Rule 11-A was introduced and brought into force by amendment of Urban Land (ceiling and Regulation) Rules on 19th December, 1977. Rule 11-A reads as under : 11-A. Terms and conditions subject to which a person may be permitted to continue to hold excess vacant land under sub-section (1) of Section 21.-The terms and conditions subject to which the competent authority may permit a person to continue to hold vacant land, in excess of the ceiling limit, under sub-section (1) of Section 21, for the construction of dwelling units for the accommodation of the weaker sections of the society in accordance with any scheme shall be the terms and conditions specified in Schedule 1-A. 39. Schedule 1-A sets out terms and conditions subject to which a person may be permitted to continue to hold excess vacant land under sub-section (1) of Section 21. The said conditions also make it clear that the construction of dwelling units has to be consistent with the master plan. Condition No.1 of Schedule 1-A reads thus : 1. The construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t freeze on the enforcement of the ULC Act or presentation of the scheme. 42. In the present case, in the draft development plan of 1979 which was finalised during the pendency of the suit, the land in question is reserved for open space etc. It cannot be doubted that the agreement had been entered into between the parties mainly and rather only with the object of construction of residential houses under the scheme under Section 21 of the ULC Act for accommodation of weaker sections of the society. In May 1976, it became evident that it will not be possible to construct residential houses in view of what was provided in the master plan. There is no substance in the contention that assuming the prescribed land use is 'open space', still there will be no impediment in the implementation of scheme in as much as there is no absolute bar for construction of residential houses. This is not the basis on which the competent authority had considered the matter. The agreement is clearly incapable of being specifically enforced. Under these circumstances, there is no question of any inconsistency and thus Section 42 of the ULC Act cannot have any applicability. 43. We may also c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where any Central Act repeals any enactment, unless a different intention appears, the repeal shall not affect anything duly done or affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed. 45. Reliance has been placed by the learned counsel on decision in the case of Bansidhar Ors. v. State of Rajasthan Ors. [1989]2SCR152 in support of the contention that provision of Section 3 of the Repealing Act is not exhaustive. Para 13 on which reliance has been placed reads as under : A saving provision in a repealing statute is not exhaustive of the rights and obligations so saved or the rights that survive the repeal. It is observed by this Court in I.T. Commissioner, U.P. v. Shah Sadiq Sons [1987]166ITR102(SC) : ... In other words whatever rights are expressly saved by the 'savings' provisions stand saved. But, that does not mean that rights which are not saved by the 'savings' provision are extinguished or stand ipso facto terminated by the mere fact that a new statute repealing old statute is enacted. Rights which have accrued are saved unless they are taken away expressly. This is the princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. Mr. Dhanuka, on the other hand, contended that the contract is not determinable and, therefore, Section 14(1) has no relevance and also that to the agreement in question, clause (c) of Section 14(3) is applicable and, therefore, notwithstanding clause (c) of Section 14(1), contract is specifically enforceable. Section 14(3), inter alia, provides that notwithstanding clause (c) of sub-section (1), the court may enforce specific performance where the suit is for the enforcement of a contract for the construction of any building or the execution of any work on land. A bare reading of clause (c) of Section 14(3) shows that it has no applicability. The building contract stipulated by clause (c) of Section 14(3) is not the type of the contract with which we are concerned in the present case. Now, let us examine whether to the agreement in question, clause (c) of sub-section (1) of Section 14 is applicable or not. 49. Clause (17) of the agreement states that the agreement shall not be unilaterally rescinded ny either party after the plaintiff has been put in possession of the property. Clause (4) stipulates the stage at which the plaintiff is required to be put in possession. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing that express clause to terminate the agreement was absent. 50. We are unable to agree with the approach of the High Court and find substance in the contention of Mr. Nariman. Clause (17) is in the nature of express stipulation that before delivery of possession, the contract could be unilaterally terminated. When there is no ambiguity in the clause, the question of intendment is immaterial. The fact that the clause is couched in a negative form is of no consequence. The intention is clear from the plain language of clause (17) of the agreement. In the case in hand, Section 202 has no applicability. It is not a case of agency coupled with interest. No interest can be said to have been created on account of plaintiff being permitted to prepare the scheme and take ancillary steps. Plaintiff could not get possession before declaration under Section 21 of the ULC Act. Mr. Dhanuka also contended that the agreement is not determinable is clear from the conduct of original defendant No.1 and also what he stated in the affidavit-cum-declaration dated 10th February, 1978 about agreement not being terminable. The contention of learned counsel is that what original defendant No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t? In the case of an unambiguous document, the answer is 'No'. 52. It has been held that in the case of an ambiguous instrument, there is no reason why subsequent interpreting statement should be inadmissible . In the present case we are concerned with an unambiguous document and, therefore, we have to go by its plain meaning. Further, affidavit-cum-declaration only reiterated what was contained in the agreement. It did not enlarge the agreement. It did not substitute any clause in the agreement. It was not a document executed between the parties. It was a document executed by original defendant No.1 alone for the purposes of filing it before the competent authority. Clause 17 of the agreement does not call for any other interpretation except that the contract could be unilaterally rescinded before delivery of possession. 53. Mr. Dhanuka also contended that if clause (17) is construed to mean that power had been conferred on the parties to cancel the contract unilaterally at their wish, then such a power of termination has to be exercised for good and reasonable cause otherwise unilateral power of cancellation would have to be treated as void and ineffective in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uate and valid or not confers an absolute and arbitrary power on one of the parties to a contract and is, therefore, void and unenforceable. Therefore, a clause in a contract of supply of goods to the Railway Administration conferring on the Railway Administration the right to cancel the contract at any stage during the tenure of the contract without calling upon the outstandings on the unexpired portion of the contract was held to be a clause under which it was open to one of the parties, without assigning any reason valid or otherwise, to say that it was not enforceable. It conferred an absolute and arbitrary power on one of the parties to cancel the contract. On appeal against the Madras High Court decision, the Supreme Court upheld the order passed but held that the clause authorising cancellation applied only where a formal order had not been placed for supply of the goods contracted for at which stage no legal contract can be said to have been made and so the cancellation made in the Railway case could not be said to have been covered by the clause. The Madras Bombay cases were reviewed by the Supreme Court in a subsequent judgment and distinguished and the correctness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Insured , and The Insurance may also at any time be terminated at the instance of the Company . There are all the words of the clause that matter for the present purpose. The words at any time can only mean at any time the party concerned likes . Shortly put clause 10 says Either party may at its will terminate the policy . No other meaning of the words used is conceivable. 56. Regarding validity of the clause which gave power as aforesaid, this Court held : The next argument was that clause 10 was bad as it gave more option to the insurer than to the assured. We express no opinion as to whether the clause would be bad if it did so, for we are clear in our mind that it did not. The argument that it did was based on the use of the word 'request' in the case of a termination by the assured and 'option' in the case of a termination by the insurer. It was said that the word 'request' implied that the request had to be accepted by the insurer before there was a termination whereas the word 'option' indicated that the termination would be by an act of the insurer alone. We are unable to agree that such is the meaning of the word 'requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement in question was terminable before delivery of possession; it was so determined and to the agreement clause (c) of Section 14(1) of the specific Relief Act, 1963 applies. Therefore, agreement cannot be specifically be enforced. 59. It was further contended by Mr. Nariman that the agreement is not specifically enforceable also in view of clause (d) of sub-section (1) of Section 14 of the Specific Relief Act, 1963. This provision provides that a contract the performance of which involves the performance of a continuous duty which the Court cannot supervise, is not specifically enforceable. There is considerable force in the submission of learned counsel. Even the High Court had substantially proceeded on the basis that the implementation of the scheme may require supervision but held that it can be supervised by the competent authority. Having regard to the nature of the scheme and the facts and circumstances of the case, to our mind it is clear that the performance of the contract involves continuous supervision which is not possible for the court. After repeal, such continuous supervision cannot be directed to be undertaken by the competent authority as such an auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention of Mr. Dhanuka that reputation of the plaintiff as a builder would be adversely affect if houses are not built is hardly of any relevance. In any case, in this regard we may refer to the decision of this Court in K. Narendra v. Riviera Apartments (P) Ltd. [1999]3SCR777 , a case in which this Court examined an agreement which contemplated several sanctions and clearances that were not within the power of the parties. The result was that the feasibility of a multi-storeyed complex as proposed and planned became impracticable. In that case too the seller continued to remain in possession. Under these circumstances, it was held that the contract though valid at the time when it was entered, is engrossed in such circumstances that the performance thereof cannot be secured with precision and that the discretionary jurisdiction to decree the specific performance ought not to be exercised. Dealing with the question of reputation of the purchaser as a builder being at stake, this Court held that 'this is hardly a consideration which can weight against the several circumstances.. If a multi-storeyed complex cannot come up on the suit property, the respondent's plans are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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