FERRODOUS ESTATES (PVT.) LTD. versus P. GOPIRATHNAM (DEAD) & ORS.

Citation: [2020] 13 S.C.R. 673 · Decided: 12-10-2020 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 17 · see the full citation network in Lexace

Judgment (excerpt)

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FERRODOUS ESTATES (PVT.) LTD.
v.
P. GOPIRATHNAM (DEAD) & ORS.
(Civil Appeal No. 13516 of 2015)
OCTOBER 12, 2020
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Specific Relief Act, 1963 – Agreement to sell entered into
between appellant and defendants (represented by respondents) in
1980 – Necessary permissions from the competent authority under
the 1978 Act (later repealed by 1999 Repeal Act) not obtained by
the defendants – Appellant filed suit for specific performance –
Decreed by Single Judge – In first appeal, Division Bench referred
the matter to a Full Bench on various questions – Full Bench inter
alia holding that s.6, 1978 Act prohibited even agreements to sell,
declared law inter-parties and the matter went back to Division
Bench – Division Bench remanded the matter to Single Judge who
inter alia recorded a finding that the suit property stood as excess
lands within the meaning of the 1978 Act before it was repealed –
Matter returned to the Division Bench, which by applying the Full
Bench decision relating to the matter inter-parties vide the impugned
judgment has reversed the judgment of the Single Judge – On
appeal, held: Agreement contained a specific clause in which it
was for the vendor to obtain permission from the competent authority
under the 1978 Act – Thus, the agreement cannot be said to be hit
by the decision of Full Bench judgment as the Full Bench itself
recognised that there may be agreements with such clauses, in which
case it is the Court’s duty to enforce such clause – Agreement to sell
cannot be said to be void ab initio, as a result of which the basis of
the Division Bench judgment under appeal goes – Further, on the
date on which the appellate decree was passed, the 1978 Act having
been repealed would not stand in the way of a decree for specific
performance – There is no vested right under the 1978 Act in favour
of the respondents – Division Bench incorrect in stating that since
the court process took 27 years to decide the specific performance
suit, it being a discretionary relief ought not to be granted – A suit
for specific performance filed within limitation cannot be dismissed
on the sole ground of delay or laches – Appellant was ready and
   [2020] 13 S.C.R. 673
673
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SUPREME COURT REPORTS
[2020] 13 S.C.R.
willing throughout to perform its part of the bargain – Defendants
took up dishonest pleas and were in breach of a solemn agreement
in which they were to obtain the Urban Land Ceiling permission
which, if not obtained, would, under the agreement itself, not stand
in the way of specific performance of the agreement between the
parties – Division Bench judgment set aside – Decree passed by
Single Judge restored – Tamil Nadu Urban Land (Ceiling &
Regulation) Act, 1978 – ss.4, 5(3), 6 – Tamil Nadu Urban Land
(Ceiling & Regulation) Repeal Act, 1999.
Specific Relief Act, 1963 – s.20 – Scope of – Held: s.20 prior
to its substitution by the 2018 Amendment Act makes it clear that
the jurisdiction to decree specific performance is discretionary –
This discretion is not arbitrary but has to be exercised soundly and
reasonably, guided by judicial principles, and capable of correction
by a court of appeal – Specific Relief (Amendment) Act, 2018.
Allowing the appeal, the Court
HELD: 1.1 It is not open to the appellant to go behind the
Full Bench judgment as it is inter-parties, as a result of which the
law laid down by the Full Bench judgment must apply to the parties,
res judicata clearly attaching even to issues of law based on the
same cause of action. This being the case, it is important now to
analyse what was held by the Full Bench. The Full Bench
judgment, while stating that section 6 of the Tamil Nadu Urban
Land Ceiling Act prohibited even agreements to sell, as a result
of which there would be no transaction at all in the eyes of law, ,
was careful thereafter to point out:
“40. …… While considering suit for specific performance,
Court is only concerned whether purchaser has come to
Court for enforcing the agreement in terms thereof.
Asking vendor to get exemption and then to execute the
agreement will be deviating from the terms of contract and
the Court will not enforce such a contract. That will mean
that purchaser is not willing to purchase the land as per
agreement, but only with deviation, i.e., vendor must get
exemption and execute the sale deed.”
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In paragraph 41, the Full Bench also went on to state that
it is possible to obtain 

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