Case Note & Summary
The appellant, M/S Divyajyothi Vidya Kendra, a society registered under the Karnataka Society Registration Act, 1960, was allotted a civic amenity site by the Karnataka Housing Board vide allotment letter dated 16.12.2003. The appellant paid the allotment price of Rs.53,10,293/- along with interest of Rs.7,11,157/-. A conditional sale deed was executed and registered on 20.10.2005, which contained a condition that the allottee shall construct a school building within a period of 5 years from the date of the deed, failing which the allotment would stand rescinded. The appellant failed to construct the building within the stipulated period, citing shortage of funds and unavailability of loans or credit, although BBMP had issued the khata. The appellant applied for extension of time on 09.01.2014, but the Housing Board cancelled the allotment. The appellant challenged the cancellation in W.P.No.50859/2018, which was dismissed by the learned Single Judge on 04.07.2023, with a direction to the Housing Board to determine the quantum of forfeiture and refund the remaining amount within four weeks. The appellant filed an intra-court appeal under Section 4 of the Karnataka High Court Act. The Division Bench, after hearing the learned Senior Advocate for the appellant, held that the condition in the sale deed was a condition precedent and the appellant's failure to construct within 5 years justified the rescission. The court found no merit in the appeal and dismissed it, upholding the order of the learned Single Judge. The court also noted that the appellant had not challenged the condition in the sale deed and had accepted it. The appeal was dismissed with no order as to costs.
Headnote
A) Contract Law - Conditional Sale Deed - Condition Precedent - Rescission - The allotment of a civic amenity site was made subject to the condition that the allottee shall construct a school building within 5 years, failing which the allotment would stand rescinded. The allottee failed to construct within the stipulated period despite having obtained khata from BBMP. The court held that the condition was a condition precedent and the failure to fulfill it justified the rescission of the contract and forfeiture of the amount paid, as per the terms of the deed. (Paras 2-4)
B) Writ Jurisdiction - Contractual Matters - Scope of Interference - The court declined to interfere with the cancellation of allotment in a contractual matter where the appellant had failed to comply with the express terms of the conditional sale deed. The court held that the writ court cannot rewrite the contract or grant relief contrary to the agreed terms. (Paras 3-4)
Issue of Consideration
Whether the cancellation of allotment of a civic amenity site and forfeiture of the amount paid by the appellant was justified when the appellant failed to construct the school building within the stipulated period of 5 years as per the conditional sale deed.
Final Decision
The appeal is dismissed. The order of the learned Single Judge dated 04.07.2023 in WP No.50859/2018 is upheld. No order as to costs.
Law Points
- Conditional sale deed
- Condition precedent
- Rescission of contract
- Forfeiture of amount
- Breach of condition
- Specific performance
- Writ jurisdiction
Case Details
WA No. 873 of 2023 (GM-RES)
Prasanna B. Varale, Chief Justice, Krishna S Dixit, Justice
Sri. K Diwakar, Senior Counsel for Sri. Neeraj Rajiv Shivam, Advocate
M/S Divyajyothi Vidya Kendra
Karnataka Housing Board, The Assistant Executive Engineer, Karnataka Housing Board, The System Analyst, Karnataka Housing Board
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Nature of Litigation
Intra-court appeal against dismissal of writ petition challenging cancellation of allotment of civic amenity site.
Remedy Sought
The appellant sought to set aside the order of the learned Single Judge dated 04.07.2023 in WP No.50859/2018 and allow the writ petition.
Filing Reason
The appellant challenged the cancellation of allotment of the subject land by the Karnataka Housing Board due to failure to construct a school building within 5 years as per the conditional sale deed.
Previous Decisions
The learned Single Judge dismissed the writ petition on 04.07.2023, directing the Housing Board to determine the quantum of forfeiture and refund the remaining amount within four weeks.
Issues
Whether the cancellation of allotment and forfeiture of amount was justified when the appellant failed to construct the school building within the stipulated period of 5 years as per the conditional sale deed.
Submissions/Arguments
The appellant argued that the allotment was made vide letter dated 16.12.2003 and the allotment price of Rs.53,10,293/- along with interest of Rs.7,11,157/- was paid. A conditional sale deed was executed on 20.10.2005 subject to construction within 5 years. Due to shortage of funds and unavailability of loans, the construction could not be completed, though BBMP had issued khata. The appellant applied for extension on 09.01.2014.
Ratio Decidendi
The condition in the conditional sale deed requiring construction within 5 years is a condition precedent. Failure to fulfill it justifies rescission of the contract and forfeiture of the amount paid. The writ court cannot interfere with contractual terms agreed upon by the parties.
Judgment Excerpts
This intra-Court appeal seeks to call in question a learned Single Judge’s order dated 04.07.2023 whereby appellant’s W.P.No.50859/2018 (GM-RES) challenging the cancellation of allotment of the subject land has been dismissed, with a direction to the respondent Karnataka Housing Board to pass orders determining the quantum of forfeiture and refund of remaining amount to the appellant within a period of four weeks.
Learned Senior Advocate argues that the allotment of subject civic amenity site was made vide letter dated 16.12.2003 and that the appellant has paid the allotment price of Rs.53,10,293/- along with interest of Rs.7,11,157/-; a conditional sale deed dated 20.10.2005 has been executed and registered by the Housing Board on 20.10.2005, subject to the condition that the allottee should construct the school building within a period of 5 years and that should he fail to do it, the allotment would stand rescinded.
Procedural History
The appellant filed W.P.No.50859/2018 before the High Court of Karnataka challenging the cancellation of allotment. The learned Single Judge dismissed the writ petition on 04.07.2023, directing the Housing Board to determine forfeiture and refund. The appellant filed the present intra-court appeal under Section 4 of the Karnataka High Court Act on 10.10.2023, which was dismissed by the Division Bench.
Acts & Sections
- Karnataka High Court Act: Section 4
- Karnataka Society Registration Act, 1960:
