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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: D.V. Sitaram Murthy, K.F. Baba, S.C. Rangappa, Advocates.
Judges
  • P. Ramakrishnam Raju, J.
Acts
  • sub - section (9) of section 4 as also of sub - section (11) of section 4
  • sub - sections (2) and (3) of section 22
  • sub - section (1) of section 10
  • sub - section (9) of section 4,
  • section 4 (9) , 2 (g)
  • section 2 (g)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: D.V. Sitaram Murthy, K.F. Baba, S.C. Rangappa, Advocates.
Judges
  • P. Ramakrishnam Raju, J.
Acts
  • sub - section (9) of section 4 as also of sub - section (11) of section 4
  • sub - sections (2) and (3) of section 22
  • sub - section (1) of section 10
  • sub - section (9) of section 4,
  • section 4 (9) , 2 (g)
  • section 2 (g)
See more information ...
Smart Summary

Factual and Procedural Background

The plaintiff (appellant) sued for specific performance of an agreement for sale dated 27-7-1978 (or alternatively for refund of Rs. 15,000 advance plus Rs. 15,000 as damages). Under the agreement the first respondent agreed to sell 1,000 sq. metres (equivalent to 1,196 sq. yards) of vacant site in survey no. 71 at a specified rate; the first respondent was to obtain necessary permission from the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 ("the Act") and execute a registered sale deed within six months of written intimation of grant of such permission. The appellant paid Rs. 15,000 as advance.

The first respondent made applications to the competent authority. The competent authority issued refusals (letters dated 24-8-1978 and 26-6-1980, recorded as exs. B-9 and B-10) and, as per correspondence, indicated that the first respondent was not permitted to alienate 1,000 sq. metres of open site because his entitlement included built-up area and his open site entitlement was only 436.75 sq. metres. At trial, the appellant testified and produced exhibits (A-1 to A-40); the first respondent also testified and produced exhibits (B-1 to B-20).

The trial court held the agreement unenforceable in view of refusal by the competent authority and granted a decree in favour of the appellant for refund of Rs. 15,000 with 6% interest and damages of Rs. 15,000 (alternate relief). The appellant appealed seeking specific performance. While the appeal was pending, the appellant sought to implead several persons (respondent nos. 2–13). The court below and the appellate court considered statutory provisions, documentary records of the competent authority and competing legal authorities before dismissing the appeal and affirming the trial court decree. A separate but factually similar appeal (involving respondent no. 6) was also dismissed for the same reasons.

Legal Issues Presented

  1. Whether the appellant is entitled to specific performance of the agreement to sell (i.e., whether the agreement can be specifically enforced given that permission from the competent authority under the Act was a pre-condition)?

Arguments of the Parties

Appellant's Arguments

  • The appellant contended he was always ready and willing to perform his part of the contract and that the first respondent repeatedly represented that proceedings before the competent authority were pending and final orders awaited.
  • The appellant's counsel argued that the documents (exs. A-25 and A-35) do not demonstrate that the competent authority had permitted the first respondent to retain 1,000 sq. metres of open site; those documents merely indicate applicability of 1,000 sq. metres but do not prove allowance of 1,000 sq. metres of vacant site to the first respondent.
  • The appellant relied on State of U.P. v. L.J. Johnson to submit that the vendor was entitled to retain 1,000 sq. metres of open site in addition to built-up area (i.e., an interpretation favourable to the appellant as to entitlements under the Act).
  • The appellant pointed to subsequent sale deeds (including a sale in favour of Murthy Co-operative Housing Society Ltd.) as evidence that the first respondent had more than 1,000 sq. metres of vacant land, implying the first respondent could have performed the contract.
  • The appellant relied on division bench authority (Shariff Iqbal Hussain Ahmed v. K. V. Subamma and B. Manmadha Rao v. Raja R.R.K. Ranga Rao) to argue that when specific relief of possession is sought the court should not exercise discretion to substitute compensation if the plaintiff has a right to specific performance; the court must record impossibility before granting alternative relief.

First Respondent's Arguments

  • The first respondent stated the agreement was subject to obtaining permission from the competent authority and that in case permission was not granted the appellant would only be entitled to refund of the advance.
  • The first respondent relied on competent authority letters (exs. B-9 dated 24-8-1978 and B-10 dated 26-6-1980) showing refusal of permission; he denied fabricating such letters and denied representations alleged by the appellant.
  • Counsel for the first respondent argued there is a statutory bar on alienation of vacant land under section 5(3) of the Act until a notification regarding excess vacant land has been published under section 10(1); transfers in contravention are null and void. He further relied on the non-obstante clause in section 42 of the Act to contend that orders of the competent authority prevail and cannot be challenged in a civil court while undisturbed.
  • The first respondent submitted that his entitlement to retain under the Act was only 1,000 sq. metres inclusive of built-up area (resulting in less than 1,000 sq. metres of alienable vacant site), and so performance (conveyance of 1,000 sq. metres of vacant land) was impossible.
  • He contended subsequent sanctioned sales to a housing society were made under special government relaxation and therefore did not prove an entitlement to freely alienate 1,000 sq. metres to the appellant.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
State of U.P. v. L. J. Johnson Interpretation of sections of the Act (including section 4(9), section 2(g) and 2(q)) to the effect that built-up area is first excluded and deductions (including 1,000 sq. metres) are then applied; the judgment was read to allow a landholder an entitlement equivalent to deduction rules used there. The court noted this earlier position was relied upon by the appellant to assert entitlement to 1,000 sq. metres of open site. The court observed that Johnson represented the earlier understanding of entitlement prior to later Supreme Court clarification (Meera Gupta).
Meera Gupta v. State of W.B. The Supreme Court held that land on which a building was constructed or where construction was in progress on the appointed day is not "vacant land" under clause (9) of section 4; such land should be excluded when calculating vacant land. The court treated Meera Gupta as the later authoritative interpretation, noting that it altered the earlier position in Johnson and that it supports the conclusion that the first respondent's entitlement did not include 1,000 sq. metres of vacant site separate from built-up area.
Shariff Iqbal Hussain Ahmed v. K. V. Subamma (Division Bench) Authority relied on by appellant to argue that when specific relief is sought, the court should not substitute compensation unless it has recorded that specific performance is impossible and the party seeks alternate relief. The court noted the submission but, in the factual circumstances (refusal of permission by competent authority, long delay and discretion under specific relief law), did not accept it as a basis to disturb the trial court's exercise of discretion in granting alternate relief.
B. Manmadha Rao v. Raja R. R. K. Ranga Rao (Division Bench) Division bench authority cited to support the proposition that a plaintiff entitled to specific performance should not be given only compensation on the ground of rise in price without appropriate findings. The court recorded the citation but applied other precedents (Kanshi Ram and Mulani) and the facts to hold that specific performance was properly refused in the present conditional-agreement context.
Kanshi Ram v. Om Prakash Jawal (Supreme Court) Holds that specific performance is discretionary; rise in property prices during pendency is not the sole consideration for refusing specific performance; where the respondent claims alternate relief for damages, courts may grant damages instead of specific performance. The court relied on this authority to support the view that specific performance is not automatic, that discretion exists, and that granting alternate relief (damages/refund) was justified where the respondent claimed such relief and permission under the Act was refused.
B. R. Mulani v. A. B. Aswathanarayana (Supreme Court) Demonstrates that specific performance is in the discretion of the court (under the Specific Relief Act) and may be refused where an agreement is conditional or allows alternatives. The court cited this decision to justify refusal of specific performance because the agreement here was conditional upon obtaining permission from the competent authority.
Satyanarayana v. Yelloji Rao (Supreme Court) Explains that the discretion under section 22 of the Specific Relief Act cannot be exhaustively defined; courts must exercise discretion in accordance with sound judicial principles and appellate interference is limited. The court relied on this to affirm that the trial court's discretionary refusal of specific performance (in favour of alternate relief) was not arbitrary and should not be lightly disturbed on appeal.

Court's Reasoning and Analysis

The court's analysis proceeded in stages, focused on statutory pre-conditions and the doctrine of judicial discretion:

  1. Identification of condition precedent: The agreement explicitly required "necessary sanction" from the competent authority under the Act as a sine qua non for executing the registered sale deed. Therefore, the availability of such permission was a pre-condition to specific performance.
  2. Examination of records of the competent authority: The court relied on letters and proceedings before the competent authority (notably exs. B-9 dated 24-8-1978 and B-10 dated 26-6-1980, and the letter of 8-8-1980) showing refusal to grant permission to alienate 1,000 sq. metres of open site because the entitlement included built-up area and only 436.75 sq. metres of open site was allowed to be retained by the first respondent.
  3. Legal effect of statutory bar: The court accepted the first respondent's contention (based on section 5(3) and the non-obstante clause in section 42 of the Act) that orders of the competent authority have overriding effect and cannot be set aside in a civil suit while they remain unchallenged. Thus the statutory regime prevented unconditional alienation.
  4. Consideration of precedents about entitlement to vacant site: The court reviewed earlier and later Supreme Court authorities (Johnson and Meera Gupta). It noted that Johnson represented an earlier approach to deductions and entitlements, but Meera Gupta clarified that land covered by building or construction in progress on the appointed day is not to be treated as "vacant land." The court used this to conclude that the first respondent did not have 1,000 sq. metres of vacant site alienable to the appellant.
  5. Assessment of performance impossibility and frustration: Given the competent authority's refusals and the entitlement calculations, the court found that performance (conveyance of 1,000 sq. metres of vacant site) was beyond the first respondent's capacity under the Act and thus had become impossible/frustrated.
  6. Discretion under Specific Relief law: The court emphasized that specific performance is discretionary (citing Kanshi Ram, Mulani and Satyanarayana). It accepted the trial court's exercise of discretion in awarding alternate relief (refund of earnest money with interest and damages) rather than ordering specific performance or directing fresh government applications (which would prolong litigation and involve contingent governmental permission).
  7. Rejection of appellant's reliance on subsequent sanctioned sales and analogous decrees: The court held that sanctioned sales to a housing society effected under specific government relaxations do not prove an unconditional right to alienate 1,000 sq. metres to the appellant. A prior analogous suit where letters were found fabricated had materially different circumstances and could not be analogized to the present case.
  8. Conclusion on appellate interference: Because the trial court's exercise of discretion was grounded in statutory records, accepted legal principles and the lengthy pendency and uncertainty, the appellate court found no ground to interfere and dismissed the appeal.

Holding and Implications

APPEAL DISMISSED

Holding:

  • The appellate court affirmed the trial court's decree which refused the main relief of specific performance and granted the alternate relief of refund of the advance amount of Rs. 15,000 with interest at 6% per annum together with damages of Rs. 15,000. The appeal by the plaintiff-appellant was dismissed and no costs were awarded.
  • The separate but identical appeal involving respondent no. 6 was similarly dismissed for the same reasons.

Implications:

  • Direct effect on the parties: The appellant is not entitled to specific performance of the agreement to sell in respect of 1,000 sq. metres of vacant site because the competent authority refused the requisite permission and the vendor did not have the requisite alienable vacant land; the appellant's remedy was confined to refund plus damages as granted by the trial court and affirmed on appeal.
  • No broader precedent was announced beyond application of existing statutory interpretation and discretionary principles: the court applied established principles (statutory priority of the competent authority's orders, the effect of Meera Gupta on the treatment of built-up area, and the discretionary nature of specific performance) and did not purport to lay down a novel rule; the decision affirms that specific performance will be refused where statutory permission is essential and has been refused and where the court, in its discretion, finds alternate relief appropriate.

This summary is prepared exclusively from the text of the provided opinion and does not add information beyond that opinion.

Show full summary ...

    Matadin Agarwal And Etc. v. Syed Abdul Razack And Others

    (1) Plaintiff is the appellant. He filed the suit for specific performance of agreement for sale dated 27 - 7 - 1978, or in the alternative for refund of the advance money of rs. 15,000/ - together with damages of rs. 15,000/ -. The appellant's case is that he entered into an agreement with the first defendant to purchase the plaint schedule land measuring 1,000 sq. Metres at the rate of rs. 50/ - per sq. Yard. The appellant paid a sum of rs. 15,000/ - as advance. The terms of the sale were negotiated by the first respondent, his brother syed abdul rahman (r - 2) and his sister mahamooda begum (r - 6) who also entered into agreements to sell their continguous land to some other persons under separate agreements. The first respondent represented to the appellant that as per the proceedings of the competent authority under urban land (ceiling and regulation) act, 1976 - hereinafter called "the act", he was permitted to retain 1,000 sq. Metres in survey no. 71, syed jalal garden, maredpalli, within the limits of secunderabad contonment area. Along with the agreement of sale, a plan was also attached. As per the terms of the agreement, the first respondent had to obtain necessary permission from the competent authority under the act. The sale transaction had to be completed by executing a registered sale deed within a period of six months from the date of intimation in writing by the first respondent to the appellant about the grant of such permission. The first respondent also agreed to get his brother, sister and mother to sign the sale deed as attesting witnesses as a token of expressing their consent. The first respondent accordingly made an application to the competent authority. However on 1 - 4 - 1980 the first respondent represented to the appellant that it had become necessary to make a fresh application to the competent authority in view of the objections to the earlier application. Accordingly, he submitted a fresh application after obtaining the signature of the appellant. The appellant was repeatedly enquiring about the result of the proceedings before the competent authority and the first respondent went on stating that the matter was pending and final order; are awaited. However on 19 - 3 - 1981 the first respondent by a notice informed the appellant to take back the advance paid by him as the competent authority refused permission 24 - 8 - 1978. The appellant was always ready and willing to perform his part of the contract. The first respondent had committed default. Hence the suit.

    (2) The first respondent in his written statement stated that he executed an agreement on 27 - 6 - 1978 and net on 27 - 7 - 1971 as wrongly mentioned in the plaint. It is further stated that it is made clear to the apellant that the agreement of sale was subject to obtaining permission to sell me said land from the competent authority, and in case permission was not granted, the appellant would only be entitled for refund of the advance money. In spite of his best efforts permission was refused by the competent authority by its letter dated 24 - 8 - 1978. The allegation that the first respondent made a representation that he should send a fresh application etc. , is denied. At the request of the appellant another application dated 29 - 4 - 1980 was made and the same was rejected on 26 - 8 - 1980 which was duly intimated to the appellant the application dated 30 - 7 - 1982 was not made by the first respondent in pursuance of any agreement to sell, but it was. In the nature of enquiry as to how much he could retain or sell under the act. As the permission contemplated in the agreement was refused twice, the appellant was intimated that he is entitled to collect back the advance money and also through a reply notice dated 1 - 7 - 1981. As the permission was refused, the agreement stands cancelled and therefore, the question of enforcing the same does not arise.

    (3) In the trial court, the appellant examined himself as p. W. I and marked exs. A - 1 to a - 40; while the first respondent examined himself as d. W. I and marked exs. B - 1 to b - 20. The trial court on a consideration of the entire evidence on record held that the agreement of sale became unenforceable in view of refusal of exemption by the competent authority; and consequently a decree was granted in favour of the appellant for refund of the advance money of rs. 15,000/ - with interest at 6 per cent per annum, together with damages of a further sum of rs. 15,000/ -. Dissatisfied with the said decree, this appeal is filed by the plaintiff - appellant seeking for the main relief of specific performance.

    (4) While the appeal is pending in mis court, the appellant filed c. M. P. No3543 of 1991 to implead respondent nos. 2 to 13 in the above appeal, who are the brother, mother, sisters of the respondent no. 1 and also subsequent purchasers.

    (5) The execution of the suit agreement (ex. A - 1) is admitted by the first respondent. As per the terms of the said agreement, it is seen that the first respondent along with respondent nos. 2 to 6 own survey no. 71 and they have filed separate statements under the act before the competent authority and the competent authority had permitted the first respondent to retain 1,000 sq. Metres equivalent to 1196 sq. Yards in survey no. 71 situated at syed jalal garden, maredpalli, secunderabad under section 9 of the act and the first respondent had agreed to sell 1,000 sq. Metres at the request of the appellant for a total consideration of rs. 59,800/ - i. E. , at the rate of rs. 50/ - per sq. Yard and the first respondent received a sum of rs. 15,000/ - as advance and the balance of rs. 44,800/ - shall be paid at the time of registration of the sale deed. It is further stipulated that the first respondent undertakes to obtain necessary sanction from the concerned ceiling authority to sell the land to the appellant and the registered sale deed shall be executed within six months from the date of intimation in writing by the first respondent to the appellant about the grant of permission by the concerned authority. If the first respondent fails to execute the sale deed after permission is granted, the first respondent shall not only refund the advance amount of rs. 15,000/ - but also pay an additional sum of rs. 15,000/ - as damages. A plan is annexed to the said agreement.

    (6) The point that arises for consideration in this appeal is whether the appellant is entitled to specific performance of the agreement to sell as claimed by the appellant?

    (7) Point: the contention of the first respondent is mat in spite of all efforts permission to sell the land was refused by the competent authority and the said decision was communicated to him by its letter no. Ulc/s. Bad/glr/ sy. No/sec 26/339/78 dated 24 - 8 - 1978 under ex. B - 9 dated 24 - 8 - 1978. At the request of the appellant another application dated 29 - 4 - 1980 was made by submitting prescribed forms signed by both the appellant and the first respondent and the same was also rejected by the estate officer, ulc by his letter dated 26 - 6 - 1980 under ex. B - 10, and the appellant was accordingly informed about the said refusal by furnishing a copy of the said letter. The application dated 30 - 7 - 1982 made by the first respondent for permission to sell plot no. 2 or whatever area he is entitled under the act is not in pursuance of any specific agreement to sell. No mention is made in the said application about the sale of land to the appellant. But the contention of the appellant is that the first respondent was not actively pursuing the application for exemption, but went on representing that the matter is pending and final order is awaited. Though the competent authority directed the first respondent to submit a plan showing the built up area of the vacant land which the first respondent wishes to retain, the first respondent purposely avoided complying with the said direction in order to avoid performance of the agreement as the prices of the property are raising.

    (8) From a perusal of the agreement and the plan attached to it, it is not dear where the plot no. 2 is exactly situated in survey no. 71. It is not disputed that by the time of the execution of the agreement (ex. A - 1) , the declaration of the first respondent was not finalised and notification regarding excess vacant land held by him has not been published under section 10 (1) of the act. The first respondent and the other five sharers, respondent nos. 2 to 6 own 29,900 sq. Metres including the built up area. Ex. A - 16 is me letter issued by the military estate office (ulc) which is me competent authority. The break up of the built up and open areas permitted to be retained by the first respondent and respondent nos. 2, 4 and 6 is indicated, according to which the first respondent is permitted to retain only 436. 75 sq. Metres of open site together with 563. 25 sq. Metres of built up area. What is agreed to be sold under ex. A - 1 is only the vacant site and not the built up area as is evident from both the agreement (ex. A - 1) and the plan attached there to (ex. A - 2). Therefore, even by 8 - 8 - 1980 the competent authority has not allowed 1,000 sq. Metres of open site to the first respondent which can be alienated in favour of the appellant. Under the terms of me agreement prior permission from the competent authority is sine - qua - non for executing the sale deed. Therefore, in the absence of permission from the competent authority the first respondent could not execute any registered sale deed in pursuance of the agreement (ex. A - 1).

    (9) Sri k. F. Baba, the learned counsel for the first respondent submits that there is a bar of alienation of vacant land under section 5 (3) of the act until a notification regarding the excess vacant land has been published under sub - section (1) of section 10 of the act, and any transfer made in contravention of this provision shall be null and void. He also further submits that in view of the non obstante clause contained in section 42 of the act, the orders passed under this act shall prevail over any other law for the time being in force. In other words his contention is that the orders passed by the competent authority under this act cannot be challenged in a civil court; as long as the orders passed by the competent authority remained undisturbed, they shall be given effect to and when the competent authority intimated the first respondent that he shall hold only 436. 75 sq. Metres of open land, the performance of the contract for alienating 1,000 sq. Metres of open land is frustrated, and as such, me default cannot be laid at the door of the first respondent

    (10) Sri s. C. Rangappa, the learned counsel for the appellant submits mat even as early as 13 - 4 - 1977 the competent authority has intimated the first respondent to surrender 0. 6744 nectars of vacant and the details of the land which the person concerned desires to retain is shown as 1,000 sq. Metres. From this i am afraid it cannot be construed that the competent authority has allowed 1,000 sq. Metres of open site to the first respondent, as there is no indication in the said proceeding marked as ex. A - 25 that the first respondent was allowed 1,000 sq. Metres of vacant site. Even under ex. A - 35 what is mentioned is that the total extent of vacant land applicable to the person to whom the statement relates is shown as 1,000 sq. Metres. Therefore, from this it cannot be culled out that the first respondent was allowed 1,000 sq. Metres of open site for retention.

    (11) Sri s. C. Rangappa, the learned counsel for the appellant relying on state of u. P. Vs. L. J. Johnson submits that the first respondent is entitled to retain 1,000 sq. Metres of open site in addition to his share in the built up area in survey ,no. 71. The facts of the case before the supreme court are simple. One l. J. Johnson had a piece of land of 2,530 sq. Metres in dehradun, the state of uttar pradesh including a building. After interpreting section 4 (9) , 2 (g) and 2 (q) (ii) and (iii) of the act, the supreme court observed that the built up area which is 464 sq. Metres should be excluded first and then the deductions allowed under 2 (g) i. E. , 1,000 sq. Metres also should be deducted which comes to 1464 sq. Metres. As the ceiling limit is 2,000 sq. Metres at dehradun, as the total deductions which come to 1464 metres is less man the said ceiling limit, the appellant therein will have to surrender 530 sq. Metres. It is also made clear that when the parcel of land over which a building is existing, the owner is entitled to one unit of vacant land in addition to the land covered by a structure. It is necessary to extract the following passage from the judgment of the supreme court to understand the correct interpretation to be placed in this respect.

    "to sum up, the effect of the view taken in johnson's case (1 supra) virtually comes to this. Section 4 (9) would be attracted regardless of whether the landholder owned a distinct part of land on which there is no construction along with any other parcel of land where there is some construction. In other words, whether or not there is a surplus will not depend on whether the landholder holds a separate plot of land which is open land. To take the other view is to hold that if there is no separate plot but the construction is on the same plot then even if the entire plot comprises 10,000 sq. Metres that would fall beyond the purview of section 4 (9) even if the structure is built only on 1000 sq. Metres of land. Such an interpretation of section 4 (9) cannot be accepted by us as it goes against the very spirit and intent of the act and allows the landholder to escape the ceiling area by merely putting a construction on a plot of land owned by him."

    (12) Sri s. C. Rangappa, the learned counsel for the appellant next relied on meera gupta vs. State of w. B. In this decision the main question that came up for decision was whether the land which was vacant on the appointed day as applicable for the city of calcutta which is 28 - 1 - 1976 and where the actual construction of a building was commenced before the date of enforcement of the act which is 17 - 2 - 1976, should be treated as vacant land as per clause (9) of section 4. The supreme court held that if the construction of a building with a dwelling unit thereon had commenced after the appointed day, then the land on which such construction had commenced shall be the same as any other land to be reckoned for calculating the extent of vacant land held by a person, and if the construction of a building with a dwelling unit thereon had been completed, or was in progress on the appointed day, then it cannot be treated as "any other land" to be reckoned for calculating the extent of vacant land held by a person.

    (13) In fact this matter was referred to a three judge bench of the supreme court as the dicta in l. J. Johnson's case (1 supra) is doubted. The observations of the supreme court may be usefully extracted:

    "this means that if the building stood constructed on the land prior to january 28,1976, the land occupied under the building is not vacant land. It also covers the land on which any building was in the process of construction on january 28,1976 with the approval of the appropriate authority. That too is not "vacant land". Additionally, the land appurtenant to these two kinds of buildings is also not "vacant land". The third category likewise conditioned is of land occupied by any building in an area where there are no building regulations, which has been constructed before january 28,1976 or is in the process of construction on such date, and the land appurtenant to these two kinds of buil+dings. "

    Xxxx" xxxx xxxx if we wipe out the distinction of "vacant land" and "any other land" as demonstrated in sub - section (9) of section 4, we strangulate and destroy the spirit and life - blood of the "appointed day" and the gap period, xxxx xxxx xxxx if the construction of a building with a dwelling unit therein had begun after the appointed day, then it is all the same "any other land" to be reckoned for calculating the extent of vacant land held by a person. And if the construction of a building with a dwelling unit therein on land had been completed or was in progress by and on the appointed day, then it is not "any other land" to be reckoned for calculating the extent of vacant land held by a person. This is the interpretation which commends to us of sub - section (9) of section 4 as also of sub - section (11) of section 4 and the definitive expressions used therein as explained and highlighted earlier. "

    (14) No doubt this later decision took the view that the land on which a building was constructed should be excluded from the definition of vacant land. But in johnson's case (1 supra) , out of 2,530 sq. Metres, the supreme court first excluded the built up area which is 464 sq. Metres and then excluded the deductions allowed under section 2 (g) i. E. , 1,000 sq. Metres. By this process the total deduction would come to 1,464 sq. Metres. As the ceiling limit is 2,000 sq. Metres, the court found 530 sq. Metres is in excess of the ceiling limit which will be taken over by the state. Therefore, it is clear that until the judgment in the later case meera gupta vs. State of w. B. (2 supra) was delivered on 22 - 10 - 1991, the position was that the land on which the buildings were constructed also should be reckoned for purpose of determining the ceiling area. That is the reason why the parties have contemplated that the vendor (first respondent) should obtain necessary permission from the competent authority before executing the sale deed.

    (15) Sri k. F. Baba, the learned counsel for the first respondent, in my view has rightly contended that the decision rendered by the competent authority declaring the excess land cannot be questioned in a civil court in view of the overriding effect of the provisions of the act contained under section 42 of the act. As long as the proceedings of the competent authority stand unquestioned before appropriate forum, they have to be given effect to, and the first respondent being a party to it cannot ignore the same or act in derogation. Therefore, i am of the view that the first respondent could not execute the sale deed in pursuance of the suit agreement for want of necessery permission from the competent authority as his share of open land was only 436. 75 sq. Metres as per the letter of the competent authority dated 8 - 8 - 1980 and as such, he could not convey 1,000 sq. Metres of open site as per the agreement (ex. A - 1). It is nobody's case that 1,000 sq. Metres, the site proposed to be sold under ex. A - 1 should include the built up area also. Accordingly, i agree with the finding of the lower court on mis aspect that as the first respondent has not got 1,000 sq. Metres of vacant land, he is justified in pleading that he cannot be compelled to part with 1,000 sq. Metres inclusive of built up area in performance of ex. A - 1 contract

    (16) Sri s. C. Rangappa, the learned counsel for the appellant submits that the first respondent sold 1,313 sq. Metres of land in favour of murthy co - operative housing society limited on 6 - 8 - 1992 and this circumstance shows that the first respondent was having more man 1,000 sq. Metres of vacant land. This sale deed was executed in favour of a housing society after obtaining necessary permission from the government. The housing society as per the relaxation granted by the government under the specific g. Os. Is entitled to purchase the surplus land from the owner. Therefore, this sale, in my view, cannot help the contention of the appellant. So also the subsequent sale deeds under exs. A - 18 and a - 20 by the first respondent on 7 - 7 - 1982 and 29 - 7 - 1982 in favour of murthy co - operative housing society limited cannot come in aid of the appellant.

    (17) Sri s. C. Rangappa next contended that the third respondent sold certain land under an agreement of sale dated 4 - 6 - 1978 under similar circumstances, the vendee filed a suit for specific performance and obtained a decree. The said decree was confirmed in l. P. A. No. 208 of 1992, and therefore, the appellant also is entitled to a decree. In the said suit, the third respondent produced two letters dated 17 - 8 - 1978 and 19 - 10 - 1978 marked as exs. B - 6 and b - 7 respectively, alleged to have been issued by the competent authority refusing grant of permission. The courts found that the said letters are fabricated and that the third respondent did not seek any permission from the competent authority. It was also found mat notice under section 26 was issued by the third respondent to the competent authority and the state government did not exerdse its option for purchase of the land within a period of 60 days from the date of receipt of the notice. Therefore, taking all the circumstances into consideration the trial court decreed the suit which was confirmed in appeal as well as in letters patent appeal. The situation in this case is entirely different. The circumstances mentioned above are not present in this case, and therefore, there is no analogy or similarity between the two cases.

    (18) Although ex. A - 1 contemplates permission from the competent authority for executing the sale deed in pursuance of the agreement of sale, it is not clear whether the parties contemplated permission under section 20 for alienating the land in excess of the ceiling limit or under section 27 for disposing the land within the ceiling limit. However, the first respondent made application under section 26 of the act, and the said applications were refused under exs. B - 9 and b - 10. Under ex. B - 9 dated 24 - 8 - 1978 the competent authority refused permission in view of section 5 (3) of the act, since the notification regarding excess land of the first respondent was not published under section 10 (1) of the act. Ex. B - 10 is another rejection letter issued by the competent authority rejecting the application of the first respondent under section 26 (1) of the act stating that the area applied for includes built up area, and hence the request of the first respondent for transfer of the vacant land admeasuring 1,000 sq. Metres cannot be granted. Even assuming that the first respondent had made application for permission under section 27 of the act, still the competent authority has rejected the said application as the area applied for includes the built up area also and there is no vacant land admeasuring 1,000 sq. Metres available for transfer. The first respondent has also made an application under section 20 of the act marked as ex. B - 17 dated 14 - 7 - 1980 and the stand of the competent authority is that the first respondent is not entitled to 1,000 sq. Metres of open site as his entitlement of 1,000 sq. Metres is inclusive of built up area. What is contracted by the first respondent is only the vacant land of 1,000 sq. Metres; whereas he was allowed to retain under the act 1,000 sq. Metres including the built up area. So, it was beyond the reach of the first respondent to perform the contract. Therefore, the lower court is right in coming to the conclusion that the contract has become frustrated and has become impossible of performance.

    (19) As already seen unless necessary permission is granted under the act, the first respondent cannot alienate 1,000 sq. Metres of vacant land as contemplated under the agreement. Under section 20 of the act even the excess land can be alienated after obtaining necessary permission from the government. The grant of such permission is not a certainty. The lower court considering the question of giving a direction to the first respondent to make an application under section 20 of the act observed that such a permission from the government is a contingency and it cannot be definitely stated whether the government will grant permission or not, if such an application is made and that will again make the proceedings a long - drawn and cumbersome process. It also observed that already 12 years have elapsed; so at this stage it is not proper to direct the first respondent to make an application under section 20 of the act and to execute a sale deed on exemption being granted by the government by this process the litigation will be practically unending. As specific performance cannot be granted directly, the possibility of granting conditional relief was examined by the lower court. In view of the long - drawn litigation which has consumed 12 years and in view of the doubtful interpretation of the terms of the agreement as well as the relevant provisions of the act, the lower court rightly in my view thought of granting alternate relief rather than main relief of specific performance, even assuming that the appellant is entitled to the main relief since asked by the appellant himself by way of alternate relief.

    (20) Sri s. C. Rangappa, the learned counsel for the appellant relying on a division bench judgment in shariff iqbal hussain ahmed vs. K. V. Subamma submits that when specific relief of possession is sought, court cannot exercise discretion to grant a decree for compensation by invoking doctrine of equity when the plaintiff has got right to recover possession. No doubt the division bench observed that if an alternate prayer is sought for in the relief of possession, the courts should record a finding that it is impossible to grant the main relief and hence alternative relief is being granted. He also next relied on another division bench judgment of this court in b. Manmadha rao vs. Raja r. R. K. Ranga rao in support of his contention that the plaintiff who is entitled to specific performance cannot merely be granted a decree for compensation on the ground that prices have gone up.

    (21) Sri k. F. Baba, the learned counsel for the first respondent to meet this contention relies on a recent judgment of the supreme court in kanshi ram vs. Om prakash jawal. In the said judgment, the supreme court observed that though the rise in prices of the property during the pendency of the suit may not be the sole consideration for refusing to decree the suit for specific performance, but granting of a decree for specific performance of a contract of immovable property is not automatic, but it is one of discretion. When the respondent himself has claimed alternate relief for damages, the courts would have been well justified in granting alternate decree for damages instead of ordering specific performance. In the said case an agreement of sale was executed on 7 - 4 - 1969 for sale of 100 sq. Yards of site in dayanand colony, new delhi for rs. 16,000/ - by paying rs. 2,500/ - as earnest money. The suit was filed on 13 - 7 - 1970 for specific performance of the agreement, and alternatively for damages for a sum of rs. 12,000/ - with interest. In view of the claim for alternative relief for damages, the supreme court allowed the appeal, set aside the decree for specific performance and granted substantial damages.

    (22) V the learned counsel next relied on a decision of the supreme court in b. R. Mulani vs. A. B. Aswathanarayana, to show that under section 20 of the specific relief act, 1963, the decree for specific performance is in the discretion of the court. In the said case the agreement in question was a conditional agreement with an option to the respondents therein to pay off the debt or in the alternate to sell the property to the petitioner therein. The supreme court upheld the view taken by the high court that inasmuch as the agreement is not without an option to pay off the amount advanced specific performance should be refused. Following these decisions, i am of the view that a decree for specific performance should be refused in this case also since the agreement in question is conditional on obtaining necessary permission from the competent authority.

    (23) In satyanarayarta vs. Yelloji rao the supreme court observed that the discretion referred to in section 22 of the specific relief act cannot be defined as it is not possible or desirable to lay down the circumstances under which the court will exercise its discretion against the plaintiff, but at the same time the said discretion shall not be arbitrary and must be in accordance with the sound and reasonable judicial principles. Therefore, it is clear that the illustrations given under sub - sections (2) and (3) of section 22 in which the court could refuse specific performance are not exhaustive and there may be umpteen number of cases in which court may deny such relief to the plaintiff. Specific performance is by no means an absolute right, but one which rests entirely in judicial discretion depending on the facts and circumstances of a particular case. When once the discretion has been exercised in a particular way by the trial court, it is not open to the appellate court to interfere lightly unless it is shown that the discretion has been exercised arbitrarily or against judicial principles. What emerges from the above discussion is that as the appellant is aware of the fact of refusal of permission by the competent authority, he has rightly resorted to alternate remedy for refund of earnest money. As already noticed the supreme court in kanshi ram vs. Om prakash jawal (5 supra) granted alternate relief of damages as the plaintiff himself claimed alternate relief of damages instead of ordering specific performance. The contract was executed 17 years ago. No doubt the period consumed in litigation may not by itself a ground justifying denial of relief of specific performance, but as observed by the supreme court in kanshi ram vs. Om prakash jawal (5 supra) that though the rise in prices of the property during the pendency of the suit may not be sole consideration for refusing to decree the suit for specific performance, but it is equally settled law mat granting decree for specific performance of contract of immovable property is not automatic. As the permission contemplated by the parties as per the terms of the agreement from the competent authority was refused, i cannot hold that the discretion exercised by the trial court in refusing the relief of specific performance, but granting alternate relief of damages is arbitrary.

    (24) For all the above reasons, i do not find any ground to interfere with the decree and judgment of the trial court. The appeal therefore fails and is accordingly dismissed. No costs. C. C. C. A. No. 48 of 1990:

    (25) Respondent no. 6 in c. C. C. A. No. 47 of 1990 is the respondent herein. She also entered into an agreement with the appellant herein for sale of 1,000 sq. Metres comprised in plot no. 4 in survey nos. 71 and 10, west maredpalli, secunderabad on 26 - 7 - 1978 on identical terms as the one entered into by the first respondent in the other appeal. The rate per sq. Yard was fixed at rs. 48/ - and on that day, the appellant paid a sum of rs. 15,000/ - as advance. Here also under the terms of the agreement, the respondent had to obtain necessary sanction from the competent authority under the urban land (ceiling and regulation) act, 1976. As the respondent committed default of the terms of the agreement, the suit was filed for specific performance of the agreement, and in the alternate for recovery of the advance amount of rs. 15,000/ - together with a further sum of rs. 15,000/ - by way of damages.

    (26) Identical written statement was filed and as the suit was decreed for alternate relief refusing the main relief of specific performance, this appeal is filed.

    (27) The learned counsel for both parties did not advance any separate arguments in this appeal, but they merely expressed that the arguments advanced in the other appeal are adopted in this appeal also.

    (28) Therefore, for the reasons already recorded in me above appeal, this appeal also fails and is accordingly dismissed. No costs.

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