KOLLI SATYANARAYANA (DEAD) BY LRS. VERSUS VALURIPALLI KESAVA RAO CHOWDARY (DEAD) THR. LRS. AND OTHERS

KOLLI SATYANARAYANA (DEAD) BY LRS.  VERSUS VALURIPALLI KESAVA RAO CHOWDARY (DEAD) THR. LRS. AND OTHERS

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1013 OF 2014
KOLLI SATYANARAYANA (DEAD)
BY LRS. ...APPELLANT(S)
VERSUS
VALURIPALLI KESAVA RAO CHOWDARY (DEAD)
THR. LRS. AND OTHERS ...RESPONDENT(S)
J U D G M E N T
B.R. GAVAI, J.
1. This appeal challenges the judgment dated 17th
October 2008 passed by the learned Division Bench of the
High Court of Judicature, Andhra Pradesh at Hyderabad in
Letters Patent Appeal No. 26 of 1999, thereby partly allowing
the appeal filed by the present appellants.
2. Facts in brief giving rise to the present appeal are as
under:
The defendant is the owner of the suit property. The
defendant executed an agreement of sale in favour of the
plaintiff for sale of the suit property. The total consideration
was fixed at Rs.45,315/-. The plaintiff paid an amount of
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Rs.15,000/- by way of Demand Draft dated 7th July 1978 as
advance payment. The defendant addressed a letter to the
plaintiff on 13th October 1978 stating therein that, she was
ready to execute the sale deed and that she was coming to
Hyderabad the week thereafter for the said purpose. The
said communication was responded to by the plaintiff on 20th
October 1978, requesting to confirm whether the necessary
permission from the Competent Authority (hereinafter
referred to as the “ULC Authorities”) under the Urban Land
(Ceiling and Regulation) Act, 1976 (for short “ULC Act”) to
sell the suit property had been obtained or not. Immediately
thereafter, the plaintiff purchased stamp papers on 23rd
October 1978. On 8th December 1978, the defendant applied
to the Secretary to Government of Andhra Pradesh, Revenue
Department for granting exemption under Section 20 of the
ULC Act for selling the suit property. Another
communication was addressed by the plaintiff on 30th
December 1978, requesting the defendant to inform him as
soon as the requisite permission under the ULC Act has been
obtained. On 3rd March 1980, the defendant addressed a
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communication to the plaintiff stating therein that the
concerned official had promised her to do the needful.
3. On 12th April 1982, the defendant addressed a
communication to the plaintiff stating therein that the
requisite permission from the ULC Authorities could not be
obtained and therefore, she had cancelled the agreement of
sale dated 29th July 1978. The defendant had also enclosed
a Demand Draft of Rs. 15,000/- for the purpose of refund of
advance amount. The plaintiff replied to the defendant vide
communication dated 2nd May 1982 that, the contract was
binding and returned the said Demand Draft. He reiterated
that he was always ready to make the payment and execute
the sale deed. It was also contended by him that because of
the spiralling price rise, the defendant was going back on the
promise. The defendant, on 2nd June 1982 addressed a letter
to the plaintiff, stating therein that, she was forfeiting the
advance payment of Rs.15,000/- since the plaintiff had not
claimed the refund within 90 days from the date of the
agreement of sale. Thereafter, there were certain other
communications between the parties.
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4. The Government of Andhra Pradesh, vide G.O. Ms.
No. 161 dated 7th February 1984, granted exemption to the
defendant under the provisions of Section 20 of the ULC Act.
After coming to know about the same, on 19th February
1984, the plaintiff issued a legal notice to the defendant for
execution of the sale deed in pursuance of the agreement of
sale dated 27th July 1978. Since the defendant did not
respond, the plaintiff filed a suit bearing OS No. 139 of 1984
before the trial court seeking specific performance of the
agreement of sale dated 29th July 1978. The trial court, vide
judgment and decree dated 29th April 1988, decreed the suit
directing the defendant to execute the sale deed within 2
months from the date of the judgment and decree.
5. Being aggrieved thereby, the defendant (since
deceased) through legal representatives filed an appeal being
Appeal No. 1415 of 1998 before the High Court. The learned
Single Judge of the High Court, vide judgment dated 24th
September 1998, allowed the appeal and dismissed the suit
of the plaintiff. Being aggrieved thereby, the plaintiff filed an
appeal being LPA No.26 of 1999 before the Division Bench of
the High Court. The learned Division Bench of the High
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Court, vide impugned judgment dated 17th October 2008,
denied the relief to the plaintiff for specific performance.
However, it held that the plaintiff was entitled to get the
refund for the advance payment of Rs.15,000/- along with
the accrued interest or a sum of Rs.3,00,000/- in all. Being
aggrieved thereby, the plaintiff has approached this Court.
6. We have heard Shri C. Nageswara Rao, learned
Senior Counsel appearing on behalf of the appellants and
Shri Sridhar Potaraju, learned counsel appearing on behalf of
the respondents.
7. Shri Rao submitted that the learned Single Judge of
the High Court has erred in reversing the well-reasoned
judgment and decree passed by the trial court. He further
submitted that the Division Bench of the High Court also
erred in upholding the judgment passed by the learned
Single Judge denying specific relief. The learned Senior
Counsel submitted that the findings of the learned Single
Judge as well as the Division Bench of the High Court are
based upon misinterpretation of evidence. He submitted that
the learned Single Judge and the Division Bench have,
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through their own interpretation, imported a condition which
is not in existence.
8. Shri Sridhar, on the contrary, submitted that the
learned Single Judge as well as the Division Bench of the
High Court has concurrently held that the conduct of the
plaintiff was not such which entitled him for specific relief.
He further submitted that no interference is warranted in the
present appeal.
9. The learned Single Judge, while reversing the
judgment and decree passed by the trial court, has relied on
Clauses 3 and 5 of the agreement of sale dated 29th July
1978, which read thus:
“3. The sale deed shall be executed within
three months from the date of this agreement
or within one month from the date of receipt of
intimation from 'the vendor' stating that the
necessary permission from the concerned
authority under Urban Land Celling Act is
obtained or within such further period as
mutually agreed upon on payment of the
balance of consideration. If the balance of
consideration is not paid within the stipulated
period of agreed period rendering it difficult for
'the vendor' to execute the sale deed, this
agreement of sale shall stand cancelled.
4. ….
5. That 'the vendor' shall obtain permission for
alienation under Urban Land Ceiling Act or
any other Act as early as possible but not later
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than 75 days from the date of this agreement
and 'the vendor' shall be sole responsible for
obtaining the above permission, 'the
purchaser' shall be entitled to get back the
advance paid after 75 days from the date of the
agreement, but not later than 90 days under
any circumstances.”
10. Upon interpretation of the aforesaid clauses, the
learned Single Judge of the High Court came to a conclusion
that a reading of the said clauses made it clear that the
parties intended that that the permission should be obtained
by the defendant within 75 days. It held that in the event the
permission was not obtained by the defendant within the
stipulated time, the plaintiff was entitled to get back his
advance money. It has found that under the agreement of
sale, even for the said purpose, the limit of 90 days was fixed.
After the said period of 90 days, the plaintiff was not even
entitled to get back the advance money and the defendant
was entitled to forfeit the same.
11. The learned Single Judge further found that the
conduct of the parties to the contract was also significant. It
found that both the parties tried to get the exemption from
the Government of Andhra Pradesh under Section 20 of the
ULC Act for about a year after the agreement of sale dated
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29th July 1978. It is further to be noted that though the
defendant had communicated to the plaintiff on 12th April
1982 that, since the requisite permission from the ULC
Authorities could not be obtained and as such, she had
cancelled the agreement, the plaintiff did not file any
proceeding against the defendant. It was only after a period
of almost 2 years when the defendant obtained the
permission after cancellation of the earlier agreement, the
plaintiff chose to file the suit.
12. In the case of K.S. Vidyanadam and Others v.
Vairavan1, this Court has held that the court should look at
all the relevant circumstances including the time limit(s)
specified in the agreement and determine whether its
discretion to grant specific performance should be exercised.
It has been held that in case of urban properties, the prices
have been rising sharply. It has been held that while
exercising its discretion, the court should bear in mind that
when the parties prescribe certain time limit(s) for taking
steps by one or the other party, it must have some
significance and that the said time limit(s) cannot be ignored

1
(1997) 3 SCC 1
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altogether on the ground that time is not the essence of the
contract.
13. Taking into consideration the fact that the
agreement of sale provided that in the event the permission
was not obtained within 75 days, the purchaser shall be
entitled to get back his advance money paid after 75 days but
not later than 90 days under any circumstances, the findings
of the learned Single Judge cannot be said to be erroneous.
After the defendant terminated the agreement on 12th April
1982 stating therein that since the permission from the ULC
Authorities could not be obtained, she had cancelled the
agreement of sale, the plaintiff did not take any step till 19th
February 1984. Only after the ULC permission was granted
on 7th February 1984, the plaintiff had issued a legal notice
to the defendant on 19th February 1984.
14. The Division Bench of the High Court, after
elaborately discussing the terms and conditions stipulated in
the agreement of sale, also agreed with the view taken by the
learned Single Judge.
15. Though, the Division Bench of the High Court denied
the relief for specific performance to the plaintiff, it has
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directed the respondents-defendants to refund the advance
amount of Rs.15,000/- along with accrued interest or a sum
of Rs.3,00,000/- in all.
16. We do not find any reason to differ with the
concurring judgments passed by the learned Single Judge as
well as the Division Bench of the High Court denying a
decree for specific performance. However, taking into
consideration the facts and circumstances and an
undisputed position that the defendant had, in fact, received
an amount of Rs.15,000/- as early as 1978, we direct the
respondents-defendants to pay an amount of Rs.15,00,000/-
to the appellants-plaintiffs. The said amount shall be paid
within a period of 3 months from the date of this judgment.
17. In the result, the appeal is allowed in the aforesaid
terms. Pending application(s), if any, shall stand disposed of
in the above terms. No order as to costs.
…..….......................J.
[B.R. GAVAI]
…….......................J.
[C.T. RAVIKUMAR]
NEW DELHI;
SEPTEMBER 27, 2022.

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