Case Note & Summary
The plaintiff, Bastion Constructions, a partnership firm engaged in building and development, filed a suit for specific performance of an agreement for sale of two parcels of land owned by the F.E. Dinshaw Trust, a public charitable trust, represented by its trustees (the defendants). The suit properties were located at Village Malad, Mumbai. The defendants had issued a public notice in November 2001 inviting offers, and the plaintiff's revised offer of Rs. 14 crores was accepted by letter dated 18 March 2002. The plaintiff paid Rs. 5 crores as earnest money. The defendants applied to the Charity Commissioner under Section 36 of the Maharashtra Public Trusts Act, 1950, for sanction of the sale, which was granted on 27 December 2002. The plaintiff then paid the balance consideration of Rs. 9 crores, and the Charity Commissioner modified the time for payment by order dated 25 March 2004. The plaintiff claimed to have taken possession and constructed a retaining wall. However, the transfer could not be completed because the land was subject to the Urban Land (Ceiling and Regulation) Act, 1976 (ULC Act), which required exemption of surplus vacant land. The defendants applied for exemption under Section 20 of the ULC Act on 3 October 2006, but before the application was decided, the ULC Act was repealed in Maharashtra on 29 November 2007. The plaintiff then called upon the defendants to execute the conveyance by letter dated 12 February 2008. The defendants refused, leading to the suit. The court framed issues including whether the plaintiff was ready and willing to perform the contract. The court held that the plaintiff failed to prove readiness and willingness because it did not pay the stamp duty and registration charges, nor did it take steps to obtain the necessary permissions. The court also noted that time was not of the essence, but the plaintiff's conduct showed lack of diligence. The suit was dismissed with costs.
Headnote
A) Specific Performance - Readiness and Willingness - Section 16(c) of the Specific Relief Act, 1963 - The plaintiff must plead and prove continuous readiness and willingness to perform the contract from the date of the contract until the decree. The court held that the plaintiff failed to demonstrate readiness and willingness as it did not take steps to obtain necessary permissions or pay stamp duty and registration charges despite the defendants' readiness to execute the conveyance. (Paras 10-25) B) Contract for Sale of Trust Property - Sanction under Section 36 of Maharashtra Public Trusts Act, 1950 - The Charity Commissioner's sanction is a condition precedent for sale of trust property. The court held that the sanction obtained was valid and the defendants had complied with the condition. (Paras 5-8) C) Urban Land (Ceiling and Regulation) Act, 1976 - Repeal and Effect on Pending Transactions - The repeal of the ULC Act on 29 November 2007 removed the requirement for exemption under Section 20. The court held that after repeal, the defendants could execute the conveyance without further permission, but the plaintiff's failure to pay the balance consideration and stamp duty indicated lack of readiness. (Paras 15-20)
Issue of Consideration
Whether the plaintiff was ready and willing to perform its part of the contract for sale of immovable property and whether the defendants were obliged to execute the conveyance after the repeal of the ULC Act.
Final Decision
The suit is dismissed with costs.
Law Points
- Specific performance
- readiness and willingness
- contract for sale of immovable property
- time not of essence
- charitable trust
- sanction under Section 36 of Maharashtra Public Trusts Act
- 1950
- Urban Land (Ceiling and Regulation) Act
- 1976
- repeal of ULC Act
- burden of proof
- conduct of parties
