THE ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED AND versus S. N. RAJ KUMAR AND ANOTHER

Citation: [2018] 3 S.C.R. 455 · Decided: 10-04-2018 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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THE ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE
CORPORATION LIMITED AND OTHERS
v.
S. N. RAJ KUMAR AND ANOTHER
(Civil Appeal No. 3020 of 2018)
APRIL 10, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Transfer of Property Act, 1882: ss. 5, 8, 10, 11 and 55 –
Allotment of industrial plots to the respondents/entrepreneurs by
appellant-Corporation to construct transport offices and godowns
– Allotment letters contained terms and conditions that respondents
to establish their units within two years from taking possession,
otherwise allotment would be cancelled – Thereafter, agreement/
sale deeds entered into between the Corporation and the respondents
– Subsequently, issuance of notices for cancellation of plots since
respondents failed to establish their units – Later Corporation revised
its decision of cancelling the allotments and demanded payment of
50% of the prevailing market value of the plots for condoning the
delay in raising the construction – Challenge to, by the respondents
– Single Judge of the High Court allowed the writ petitions – Upheld
by the Division Bench – On appeal, held: There was no condition
of completion of construction within a period of two years in the
sale deed but was only in the allotment letter – However, after the
said allotment, the Corporation not only received entire
consideration but executed the sale deeds wherein no such condition
was stipulated – Thus, the High Court rightly held that after the
registration of sale deed of the property by the Corporation to the
respondents, transferring the ownership in the plots in the favour
of the respondents whereby the respondents acquired absolute
marketable title to the property, the Corporation had no right to
insist on the conditions mentioned in the allotment letter, which
ceased to have any effect after the execution of the sale deed –
Further, the High Court rightly held that the Corporation had
withdrawn the action of cancellation of the plots, instead, it
demanded 50% of the prevailing market value in lump sum towards
[2018] 3  S.C.R. 455
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SUPREME COURT REPORTS
[2018]  3 S.C.R.
the cost of the plots – There was no legal basis for such a demand
– Thus, the order passed by the High Courts upheld.
Dismissing the appeals, the Court
HELD: 1.1 There is no condition of completion of
construction within a period of two years in the sale deed. Such a
condition was only in the allotment letter. However, after the said
allotment, the appellant-Corporation not only received entire
consideration but executed the sale deeds as well. In the sale
deeds no such condition was stipulated. Therefore, the High Court
is right in holding that after the sale of the property by the
appellant-Corporation to the respondents, whereby the
respondents acquired absolute marketable title to the property,
the appellant-Corporation had no right to insist on the conditions
mentioned in the allotment letter, which cease to have any effect
after the execution of the sale deed. [Para 14] [464-A-C]
1.2 Section 5 of the Transfer of Property Act defines
‘transfer’ as conveyance of property from one living person to
one or more living persons. Sections 8, 10 and 11 thereof attach
sanctity and solemnity to a transfer of immovable property.
Section 55 of the Act deals with rights and liabilities of buyer and
seller. As per this provision, when the buyer discharges
obligations and seller passes/conveys the ownership of the
property, the contract is concluded. Thereafter, the liabilities,
obligations and rights, if any, between the buyer and seller would
be governed by other provisions of the Contract Act and the
Specific Relief Act, on the execution of the sale deed. The seller
cannot unilaterally cancel the conveyance or sale. [Paras 15-16]
[464-D; 465-F]
1.3 The submission that the doctrine of proportionality is
not applicable in these cases, cannot be accepted. In the realm of
Administrative Law ‘proportionality’ is a principle where the Court
is concerned with the process, method or manner in which the
decision-maker has ordered his priorities and reached a
conclusion or arrived at a decision. The very essence of decision-
making consists in the attribution of relative importance to the
factors and considerations in the case. The doctrine of
proportionality thus steps in focus true nature of exercise-the
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elaboration of a rule of permissible priorities. ‘Proportionality’
involves ‘balancing test’ and ‘necessity test’. The 

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