NDLI: P. Purushottam Reddy and Anr. Vs. M/s Pratap Steels Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Code of Civil Procedure
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Code of Civil Procedure, 1908: Order 41 Rules 23, 23A & 25-Section 151-Agreement of sale of suit property-Cancellation of the agreement by vendor for failure to get requisite permission under the Urban Land (Ceiling and Regulation) Act, 1976 within stipulated time-Suit for specific performance by purchaser-Suit decreed by trial court-Happening of subsequent events during pendency of appeal before High Court-Remand by High Court to trial court after framing additional issues-Propriety and legality of remand-Inherent power of High Court- Held, remand by High Court under the provisions of the Code and on facts not proper-Inherent powers can be exercised only in absence of express provisions in the Code-Hence, order of remand made by High Court set aside and case sent back to High Court for fresh disposal after considering subsequent events-Specific Relief Act, 1963-Sections 16(e) & 28.Appellant entered into an agreement of sale of the suit property with respondent-company for a consideration of Rs. 40,25,000 in October 1987. Earnest money of Rs. 8,00,000 was paid by the respondent and the remaining amount was to be paid on execution and registration of the sale deed. The agreement of sale provided that the appellant would obtain the requisite permission from the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976 by June 1998. The agreement further provided for refund of the earnest money if the requisite permission was not forthcoming by June 1998 or such extended time as may be mutually agreed to. In December 1998, the appellant cancelled the agreement of sale on the ground of not obtaining the requisite clearance from the competent authority within the stipulated time and refunded a part of the earnest money to the respondent and promised to repay the balance by the end of the month.The respondent filed a suit for specific performance of agreement to sell, against the appellant. The trial court decreed the suit. The appellant filed an appeal before High Court against the decree of the trial court. When the appeal was pending, two subsequent events occurred i.e. (i) communication of the order of the competent authority (Urban Land Ceiling) holding the land of the appellants to be within ceiling limits, and (ii) order of BIFR holding the respondent-company to be a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985. The appellant filed an application before the trial court under Section 28 of the Specific Relief Act, 1963 for cancellation of the agreement of sale due to failure of the respondent to comply with trial court decree by nonpayment of the balance purchase money. On rejection by the trial court, the appellant filed a civil revision petition before the High Court. The High Court, by a common order, set aside the judgment and decree of the trial court and remanded the case back to the trial court to decide the case afresh on three additional issues viz. (i) whether the suit for specific performance by the respondent is maintainable; (ii) whether the respondent was ready and willing to perform his part of the contract; and (iii) whether the respondent was entitled for specific relief of the contract. High Court held that time was not the essence of the contract and therefore the factum of not obtaining the clearance under the Urban Land Ceiling Act by the appellant within the stipulated time did not render the agreement inoperative and unenforceable. Hence the appeals by the appellants.
Judge	Honble Mr. Justice R.C. Lahoti
Neutral Citation	2002 INSC 38
Petitioner	P. Purushottam Reddy And Anr.
Respondent	M/s Pratap Steels Ltd.
SCR	[2002] 1 S.C.R. 586
Judgement Date	2002-01-21
Case Number	679-680

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