SUSHIL KUMAR AGARWAL versus MEENAKSHI SADHU & ORS.

Citation: [2018] 12 S.C.R. 756 · Decided: 09-10-2018 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Dismissed

Cited by 3 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
756
SUPREME COURT REPORTS
[2018] 12 S.C.R.
SUSHIL KUMAR AGARWAL
v.
MEENAKSHI SADHU & ORS.
(Civil Appeal No. 1129 of 2012)
OCTOBER 09, 2018
[A. M. KHANWILKAR AND DR. D. Y. CHANDRACHUD, JJ.]
Specific Relief Act, 1963 – s.14(3)(c)(i) and (ii) – Specific
performance of contract under – Appellant-developer and
predecessor-in-interest of the respondents entered into a
development agreement for construction of a building on the land
of the respondents – Respondent denied execution of the agreement
– Appellant filed for specific performance of the contract against
the respondent – Held: The appellant-developer need to satisfy the
two conditions laid out in sub clause (i) and (ii) of s.14(3)(c), for
the suit for specific performance to be maintainable against the
owner – The clauses 8, 13, 20 and 22 of the agreement had not
clearly brought out, the exact extent of work to be carried out by
the developer and the obligation of the parties – Parties had not
clearly defined, inter alia, the nature of material to be used, the
requirements of quality, structure of building, sizes of flats and
obligations of the owner after the plan is sanctioned – Also, clause
9 of the agreement stated that the owner shall pay the contractor
costs, expenses along with agreed remuneration only after
completion of the building on receiving the possession – However,
exact amount of remuneration payable by the owner to the contractor
was not found in the agreement – Agreement between the parties
was vague, so the first condition in s.14(3)(c)(i) was not fulfilled –
Furthermore, the developer had incurred an expenditure of
Rs.18,41,000/- towards clearing outstanding dues, security deposit
and development, incidental and miscellaneous expenses – The
alleged losses/damages incurred by the plaintiff could be quantified
and recompensed with – Thus, developer had failed to satisfy the
conditions under sub-clause (i) and (ii) of s.14(3)(c) of the Act – In
such a case, specific performance could not be granted.
Specific Relief Act, 1963 – s.14(3)(c)(iii) – Interpretation of
– Held: Anomaly is created by the use of the words “the defendant
has, by virtue of the agreement, obtained possession of the whole
756
[2018] 12 S.C.R. 756
A
B
C
D
E
F
G
H
757
or any part of the land” in s.14(3)(c)(iii) – Under a development
agreement, an interest in the property may have been created in
favour of the developer – If the developer is the plaintiff and the
suit is against the owner, strictly applied, clause(iii) would require
that the defendant should have obtained the possession under the
agreement, however, the owner is in possession of the land by virtue
of the lawful title, the defendant-owner cannot be said to have
obtained possession of the land by way of the agreement – This
would lead to an anomalous situation where the condition in
s.14(3)(c)(iii) would not be fulfilled in the case of a suit by a
developer – Thus, purposive interpretation has to be given to
s.14(3)(c)(iii), departing from the literal rule of interpretation – By
giving a purposive interpretation to s.14(3)(c)(iii), the anomaly and
absurdity created by the third condition will have no applicability
in a situation where the developer who has an interest in the property,
brings a suit for specific performance against the owner – The
developer will have to satisfy the two conditions laid out in sub
clause (i) and (ii) of Section 14(3)(c), for the suit for specific
performance to be maintainable against the owner – This will ensure
that both owners and developers can avail of the remedy of specific
performance under the Act – Interpretation of Statutes – Purposive
rule of Interpretation.
Appellant and predecessor-in-interest of the respondents
entered into a development agreement for construction of a
building on the land of the respondents. Respondent denied
execution of the agreement. Appellant filed a suit against the
respondent for specific performance of the contract. Trial Court
held that sanctioned plans of the proposed building was not
obtained by the appellant as per agreement and therefore, it could
not be said that he had obtained possession of the land, as a result
suit was barred by s.14(3)(c). Appeal was dismissed by the High
Court. Thus, the present appeal.
Dismissing the appeal, the Court
HELD: 1. The issue before this Court is whether Section
14(3)(c)(iii) of Specific Relief Act, 1963 is a bar to a suit by a
developer for specific performance of a development agreement
bet

Excerpt shown. Read the full judgment & AI analysis in Lexace.