E B VEERA RAGHAVAIAH Vs. MOHAMMAD IMTHIAZUDDIN

JUDGEMENT

(1.) This Letters Patent Appeal by the plaintiff is from the judgment and decree of a learned single Judge of this Court in A.S.No.2120 of 1990 reversing the decree for specific performance with certain conditions granted by the learned II Additional Subordinate Judge, Vijayawada in O.S.No. 459 of 1981. The parties are referred to in this judgment for the sake of convenience as they are arrayed in the suit. The suit was laid by the plaintiff (appellant herein) against defendants 1 and 2 (respondents 1 and 2 herein) for specific performance of a contract of sale dated 2-9-1977, Ex.A-1, in respect of an urban house-site admeasuring 3,000 sq. yards situate in Ward No. 28, Labbipet, Vijayawada. The defendants are natural brothers each owning an extent of 3,394 square yards of Urban Land in N.T.S.No. 147 Patamata Village within the urban agglomeration of Vijayawada and each of them is entitled to retain under the provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (for short "the Act") only an extent of 1,500 sq. yards and as such the excess land in possession of each of them is 1,894 sq. yards. The first defendant is the General Power of Attorney holder of the second defendant. In and by the contract of sale, Ex. A-1, dated 2-9-1977, the defendants agreed to sell 3,000 sq. yards from out of the aforesaid urban land in favour of the plaintiff at the rate of Rs. 70/-per sq. yard and as consideration for the same, they received Rs. 30,000/- in cash on that very day. Ex. A-l recites that the defendants should apply for permission at their own expense to the Vijayawada Town Urban Land Ceiling Competent Authority and after obtaining permission inform the same in writing to the plaintiff and within one week thereafter a registered sale deed should be executed in favour of the plaintiff at the expense of the latter. The balance sale consideration should be paid at the time of the registration. Ex. A-l also recites that if within two months from the date of the agreement, the defendants do not obtain permission from the Urban Land Ceiling authority and allow time to lapse, they should return the amount of Rs. 30,000/- with interest at the rate of 18% per annum with effect from 2-11-1977 till the date of execution of the sale deed. A further relevant clause in Ex. A-l is that if for any reason permission is not granted by the Urban Land Ceiling Authority, the defendants shall refund the said amount of Rs. 30,000/- to the plaintiff with interest at 18% per annum and until such payment was made, the site in question shall constitute, the first charge.

(2.) It was alleged in the plaint that the first defendant backed out of the contract with an evil idea and addressed a letter Ex. A-2 dated 17-1-1980 to the plaintiff informing that the State Government by Memo No. 2041 /UC- 2/77-2 dated 27-9-1978, Ex.B-1, rejected the request for exemption under Section 20 of the Urban Land Ceilings Act. The plaintiff sent Ex.A-3 reply on 23-1-1980 stating that the defendants informed him that they sent representations for re-consideration of the order of the Government in the light of certain new guidelines issued and, therefore, the defendants had no right to resile from the contract. This was replied to by the first defendant by a lawyer's notice Ex. A-4 dated 12-2-1980 stating that Ex.A-1, the contract of sale, stood cancelled by 27-9-1978 when Ex.B-1 memo was issued by the Government rejecting the request for exemption. It was alleged in the plaint that the defendants deliberately were attempting to wriggle out of the obligations under Ex. A-1 and that as each of them could retain 1,500 sq. yards, there was no difficulty for them to convey 3,000 sq. yards in accordance with Ex. A-l. The plaintiff, therefore, sought a decree against the defendants based upon Ex. A-l directing them to execute a sale deed in his favour and deliver vacant possession of the plaint schedule house site.

(3.) Resisting the plea of the plaintiff, it was asserted, inter alia, by the defendants in their written statement that the material term in Ex. A-l is that the failure on their part (defendants) to get exemption from the Government should result in automatic cancellation of the contract and as a consequence of which, the money received by them should be returned to the plaintiff with interest at 18% per annum. They are not bound to convey 3,000 sq. yards from out of the land which they are entitled to retain under the provisions of the Urban Land Ceilings Act.