Holding

The agreement cannot be specifically enforced because it is terminable before possession and its performance requires continuous supervision, making specific performance inequitable under the Specific Relief Act.

Summary

The plaintiff entered into an agreement with the original defendant to develop dwelling units for weaker sections under Section 21 of the Urban Land (Ceiling and Regulation) Act, 1976, but possession of the land was never transferred and the agreement contained a clause allowing unilateral termination before possession. The plaintiff sought declaration of the agreement's validity and specific performance, which the trial court granted and the High Court modified to make the decree conditional on a final declaration under the Act. The Supreme Court held that the agreement is terminable before possession, falls within Section 14(1)(c) and (d) of the Specific Relief Act, and its performance would require continuous supervision that the court cannot provide, especially after the repeal of the ULC Act and the land's reservation as open space in the master plan. Consequently, specific performance is inequitable and cannot be enforced. The appeal was allowed, setting aside the lower courts' orders and dismissing the plaintiff's suit.

Issues considered

The applicability of Sections 14(1)(c) and 14(1)(d) of the Specific Relief Act to the agreement.
Whether the agreement can be specifically enforced given its terminable nature before possession.
The effect of the land being designated as open space in the master plan on the feasibility of the scheme.
The impact of the repeal of the Urban Land (Ceiling and Regulation) Act on rights accrued under it.
The validity of the unilateral termination clause (clause 17) and its effect on enforceability.
The court's discretion under Section 20 of the Specific Relief Act and the equity considerations.

Legislation cited

General Clauses Act, 1897s. 6
Gujarat Town Planning and Urban Development Act, 1976
Indian Contract Act, 1872s. 202
Specific Relief Act, 1963s. 14(1)(c), s. 14(1)(d), s. 20
Urban Land (Ceiling and Regulation) Act, 1976s. 21, s. 3, s. 42

Subjects

Specific performanceSpecific Relief ActUrban Land Ceiling ActMaster planOpen space reservationContract terminationRepeal of statuteEquitable discretionContinuous supervision

Judgment

A HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD
v. ~-~
SAVJIBHAI HARIBHAI PATEL AND ORS.

MARCH, 21, 2001

B [S.P. BHARUCHA, N. SANTOSH HEGDE AND Y.K. SABHARWAL, JJ.]

Specific Relief Act, 1963 :

Sections 14(1)(c) and (d)-Specific peiformance-Owner entered ir.to
*
an agreement with plaintifffor construction ofdwelling units for weaker section
c of society-However, plaintiff was not put in possession of suit land-Agree-
ment was terminable before delivery of possession-Power of Attorney ex-
ecuted in favour ofplaintiff-Plaintiff filed 5 schemes before competent author-
• ity-Subsequently, agreement and Power of Attorney cancelled-Under the
revised Master Plan, suit land designated as openspace-Plaintifffiledsuitfor
D declaration and specific peiformance ofagreement-Trial coul1 decreed suit-
In appeal, High Coul1 modified the decree and held that plaintiff was entitled
to enforce specific peiformance subject to final declaration under S.21 of
Urban Land Ceiling Act-Competent authority issuedfinal declaration-Valid-
ity of-Held: As there is no delivery of possession S.14(1)(c) applies and,
therefore, agreement cannot specifically be enforced-Fun her, if the peiform-
E
ance of a contract cannot be continuously supervised by the co"ul1 such contract
y
be specifically enforced in view of S.14( 1 )(d)-S.202 of Contract Act has no
application-Urban Land (Ceiling and Regulation Act, 1976-Contract Act,
1872, S.202-Bombay Town Planning Act, 1954-Gujarat Town Planning and
..
Urban Development Act, 1976.
F
Section 20-Specific peiformance-Decree-Grant of-Judicial Princi-
pies-Held: Grant ofdecree ofspecific peiformance is a matter of discretion- ~·
Coun is not bound to grant such relief merely because it is lawful to do sa-
But such discretion is to be exercised on sound and judicial principles and not
arbitrarily-Where it is inequitable to enforce specific peiformance, coul1 may
G decline to decree specific peiformance.

The predecessor-in-interest (original defendant No. 1) of the appel-
lant entered into an agreement in respect or a portion of his property with ~::'
respondent No. 1 plaintiff for evolving a scheme for construction or
H dwelling units (or the weaker sections of the society as envisaged hy
590
HER HIGHNESS MAHARANI SHANTIDEV! P. GAIKWAD v. S.H. PATEL 591
Section 21 of Urban Land (Ceiling and Regulation) Act, 1976. However, A
respondent No. 1 was not put in possession ?f the suit property. Clause 17
-~ of the agreement stipulated that before delivery of possession of the
property in question, the contract could be unilaterally terminated. An
irrevocable Power of Attorney was also executed in favour of respondent
No. 1·plaintiff. Five schemes under S.21 of the Act were filed before the
B
competent authority for construction of dwelling units. Soon after the
submission of the third scheme original defendant No. 1 executed an
affidavit-cum-declaration. Subsequently, the original defendant No. 1 can-
celled the agreement and Power of Attorney.

Being aggrieved, respondent No. 1-plaintiff filed a suit against origi· c
nal defendant No. 1 seeking declaration that cancellation of the agree·
ment and the Power of Attorney were illegal and also praying for decree of
specific performance of the agreement. The trial court decreed the suit. In
appeal, the High Court modified the decree and held that respondent No.
1 was entitled to enforce the specific performance subject to final declara·
tion under Section 21 of the Act. Accordingly the competent authority
D
made a declaration under Section 21 of the Act. During the pendency of
this appeal the Act had been repealed.

On behalf of the appellant it was contended that under the applicable

.. Master Plan the suit land was reserved for 'open space' and residential
houses could not be constructed thereupon and, therefore, the agreement
E

was incapable of specific performance.

Allowing the appeal, the Court

HELD : 1.1. In the present case, in the draft development plan which F
was finalised during the pendency of the suit, the land in question is
reserved for open space etc. It cannot be doubted that the agreementhad
been entered into between the parties mainly and rather only with the
object of construction of residential houses under the scheme under Sec·
tion 21 of the Urban Land (Ceiling and Regulation) Act, 1976 for accom·
modation of the weaker sections of the society. Later on it became evident
G
that it will not be possible to construct residential houses in view of what
was provided in the master plan. There is no substance in the contention
that assuming the prescribed land use is 'open space', still there will be no
-~
impediment in the implementation of the schemes inasmuch as there is no
absolute bar for construction of residential houses. This is not the basis on H
592 SUPREME COURT REPORTS [2001] 2 S.C.R.
A which the competent authority bad considered the matter. The agreement
is clearly incapable of being specifically enforced. Under these circum· ~ -"·
stance, there is no question of any inconsistency and thus Section 42 of the
Act cannot have any applicability. (612-F·H]

1.2. The sanction of the scheme for construction of residential dwell·
B ing units was contrary to the prescribed land use in the master plan, which
had reserved the land for being used as open space. It cannot he held, on
the facts of the case that any rights accrued in favour of the plaintiff only
on execution of the agreement. Assuming any rights accrued in favour of
the plaintiff on passing of declaration under Section 21 of the Act the same
c would fail in view of the said declaration having been passed erroneously.
There is no substance in. the ·contention that any rights bad accrued in
favour of the plaintiff, which have the protection of Section 6 of the
General Clauses Act. [615-B-C]

S. Chattanatha Karavalar v. The Central Bank of India, (1965] SCR
D 318 and Bansidhar v. State of Rajasthrui, (1989] 2 SCR 152, referred to.

Atia Begum (Smt.) v. State of U.P, (1993] 2 SCC 546, held inapplica·
ble.

I.T. Commissioner, U.P. v. Shah Sadiq & Sons, AIR (1987) SC 1217,
E cited.

2.1. Clause (17) of the agreement is in the nature of an express
stipulation that before delivery of possession, the contract could be unilat·
erally terminated. When there is no ambiguity in the ~lause, the question
of intendment is immaterial. The fact that the clause is couched in a
F negative form is of no consequence. The intention is clear from the plain
language of clause (17) of the agreement. In the case in hand, Section 202
of the Contract Act, 1872 has no applicability. It is not a case of agency
coupled with interest. No interest can be said to have been created on
account of the plaintiff being permitted to prepare the scheme and take
G ancillary steps. The plaintiff could not get possession before declaration
under Section 21 of the Act. (616; 617-A-B]

2.2. In the case of an ambiguous instrument, there is no reason why
subsequent interpreting statement should be inadmissible. The agree· ;---
ment in question is an unambiguous document and, therefore, one has to
H go by its plain meaning. Further, affidavit-cum-declaration only reiterated
HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD v. S.H. PA1EL 593
its plain meaning. Further, affidavit-cum-declaration only reiterated what A
~;.. was <eOntained in the agreement. It did not enlarge the agreement. It did
not substitute any clause in the agreement. It was not a document executed
between the parties. It was a document executed by the original defendant
No. 1 for the purposes of filing it before the competent authority. Clause
(17) of the agreement does not call for any other interpretation except that
B
the contract could be unilaterally rescinded before delivery of possession.
[618-C-D]

Godhra Electricity Co. !Jd. v. State of Gujarat, [1975) 2 SCR 42 and
National Fertilizers v. Puran ChandNangia, [2000) 8 SCC 343; Central Bank
of India lJd. v. Hartford Fire Insurance Co. !Jd., AIR (1965) SC 1288 and c
Union of India v. Maddala Thathaiah, [1964) 3 SCR 774, referred to.

Odger's Construction of Deeds and Statutes, 5th Edn., By G. Dworkin
pp.118-119 and Mulla's Contract Act 10th Edn. pp. 371-372, referred to.

Maddala Thathaiah v. Union ofIndia, AIR (1957) Mad. 82, cited. D

3.1. The agreement in question was terminable before delivery of
possession; lt was so determined and to the agreement Section 14(1)(c) of
the Specific Relief Act, 1963 applies. Therefore, the agreement cannot be
specifically enforced. [622-E]
y E
3.2. The agreement is not specifically enforceable also in view of
Section 14(1)(d) of the Specific Relief Act, 1963. This provision provides
that a contract, the performance of which involves the performance of a
continuous duty, which the Court cannot supervise, is not specifically
enforceable. Even the High Court had substantially proceeded on the basis F
that the implementation of the scheme may require supervision but held
that it can be supervised by the competent authority. Having regartl to the
nature of the scheme and the facts and circumstances of the case, it is clear
that the performance of the contract involves continuous supervision,
which is not possible for the court. Arter repeal of the Urban Land (Ceiling G
and Regulation) Act, 1976, such continuous supervision cannot be directed
to be undertaken by the competent authority, as such an authority is now
non-existent. [622-F-H)
-.._-4...
3.3. The grant of decree for specific performance is a matter of
discretion under Section 20 of the Specific Relief Act, 1963. The court is H
594 SUPREME COURT REPORTS [2001] 2 S.C.R.
A not bound to grant such relief merely because it is lawful to do so but the
discretion is not to be exercised arbitrarily. It is to be exercised on sound
and settled judicial principles. One of the grounds on which the court may
... -
decline to decree specific performance is where it would be inequitable to
enforce specific performance. The present is clearly such a case.[ 623-B]
B
3.4. It would be wholly inequitable to enforce specific performance
for (i) residential houses for the weaker sections of the society cannot be
constructed in view of the existing master plan and, thus, no benefit can be
given to the said section of the society; (ii) In any case, it is extremely
difficult, if not impossible, to continuously supervise and monitor
c the construction and thereafter allotment of such houses; (iii) the decree
is likely to result in uncalled for bonanza to the plaintiff; (iv) patent
illegality of the declaration order passed by the competent authority; (v)
absence of law or any authority to determine excess vacant land after
construction of the dwelling units; and (vi) agreement does not contem· -t-
b plate the tran~rer or land in favour or the plaintiff for construction or the
dwelling units for which a certain area of land is required. The object of
the Act was to prevent concentration of urban land in the hands of few
and also to prevent speculation and profiteering therein. The object of
Section 21 of the Act is to benefit the weaker sections of the society and not
the owners. If none of these objects can be achieved, which is the factual
E/ position, it would be inequitable to still maintain decree for specific y "
performance. (623-C-F]

K Narendra v. Riviera Apartments (P) Ltd., [1999] 5 SCC 77, relied on.

F 4. The agreement is not a contract for transfer of the property !mt it
is a contract to carry out, the scheme which is incapable of being ca~ed
out at this stage on account of reservation in the Master Plan and also
>
repeal of the Act. It was not and cannot be the case of the plaintiff tl~at in
case the scheme has been carried out, he would have enjoyed the property.
He would have only enjoyed the specified profits. At best the plaintiff could
'

G pray for damages. [624-D]

CIVIL APPEILATE JURISDICTION: Civil Appeal No. 3530of1998.
_>..,--
From lhe Judgment and Order dated 15.6.98 of lhe Gujarat High Court
in F.A. No. 1164 of 1992.
H
HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD 11. S.H. PATEL [Y.K. SABHARWAL, J.] 595
Willi A
~~
T.C. (C) No. 63/1998 and SLP (C) No. 1692199

F.S. Nariman, Nirupam Nanavati, Harin P Raval, Huzefa Ahmadi,
Nagendra Singh Chauhan and Krishnan Kumar for the Appellant.
B
D.R. Dhanuka, B .H. Antia, Shri Narain, Milind Sathe, Sandeep Narain,
Er. A.K. Mittal, Ms. Anjali, for Mis. S. Narain & Co. for the Respondents.

R.P. Bhatt, Anip Sachthey, Ms. Rashmin Chhaya, Ms. Sandhya Rajpal
and Arijit Prasad for the State of Gujarat.

The Judgment of the Court was delivered by
c
Y.K.SABHARWAL, J. By judgment under challenge, the High Court
modifying the decree passed by the trial court for specific performance in
respect of land in question, directed that the plaintiff-respondent No. I in ihis
appeal, shall be entitled to enforce the said decree subject to the issue of final D
declaration under Section 21 of the Urban Land (Ceiling and Regulation) Act,
1976 (For short, the 'ULC Act') by the authorities in accordance with law.
In other respects, substantially the judgment and decree of the trial court was
upheld.

The defendants are in appeal. E
In the appeal and other connected counter matters the main question
is about the interpretation of certain provisions of the ULC Act. This Act,
in the first instance, came into force on the date of its introduction in the Lok
Sabha, i.e., 28th January, 1976 and covered the Union Territories and 11 states
which had already passed the requisite resolutio'1 under Clause (I) of Article F
252 of the Constitution. This provision of the Constitution empowers the
Parliament to legislate for two or more States on any of the matters with
respect to which it has no powers to make laws except as provided in Articles
249 and 250. The effect of passing of a resolution under clause (I) of Article
252 is that the Parliament, which has no power to legislate with respect to G
the matter which is the subject matter of the resolution, becomes entitled to
legislate with respect to it. On the other hand, the State Legislature ceases
to have a power to make a law relating to that matter.
_._~

On 14th August, 1972 the Gujarat Assembly had resolved that the
imposition of the ceiling on the holding of urban immovable property and H
~-

596 SUPREME COURT REPORTS (2001] 2 S.C.R.
A acquisition of such property in excess of the ceiling and matters connected
therewith or ancillary and incidental thereto should be regulated in the State ~-
of Gujarat by the Parliament by law_

The ULC Act received assent of the President on 17th February, 1976.
The primary object and the pmpose of the ULC Act is to provide for the
B imposition of a ceiling on vacant land in urban agglomerations, for the
acquisition of such land in excess of the ceiling limit, to regulate such land
and for matters connected therewith, with a view to preventing the concen-
tration of urban land in the hands of a few persons and speculation and
profiteering therein, and with a view to bringing about an equitable distri-
c bution of land in urban agglomerations to subserve the common good, in
furtherance of the directive principles of Article 39(b) and (c).

Section 3 of the ULC Act provides that except as otherwise provided
in the Act, on and from the commencement thereof, no person shall be
entitled to hold any vacant land in excess of the ceiling limit in the
D territories to which this Act applies under sub-section (2) of Section I. The
expression 'vacant land' is defined in Section 2(q) to mean land not being
land mainly used for the pmpose of agriculture, in an urban agglomeration,
but does not include certain categories as stated in the section, The
-term 'urban land' is defined in Section 2(o) of the ULC Act which reads
as under :
E
"2.(o) "urban land" means-

(i) any land situated within the limits of an urban agglomeration
and referred to as such in the master plan; or

F (ii) in a case where there is no master plan, or where the master
plan does not refer to any land as urban land, any land within
the limits of an urban agglomeration and situated in any area
included within the local limits of a municipality (by whatever
name called), a notified area committee, a town area commit-
G. tee, a city and town committee, a small town committee, a
cantonment board or a panchayat,

but does not include any such land which is mainly used for the
pmpose of agriculture.

Explanation - For the pmpose of this clause and CL(q) :-
H
HER 1-llGHNESS Mt.HARANI SHANTIDEVT P. GAIKWAD v. S.H. PATEL [Y.K. SABHARWAL, J.] 597
(A) "agriculture" includes horticulture, but does not include - A
(i) raising of grass,
(ii) dairy farming,
(iii) poultry farming,
(iv) breeding of live-stock, and
(v) such cultivation or the growing of such plant, as may be B
prescribed;

(B) land shall not be deemed to be used mainly for the purpose of
agriculture, if such land is not entered in the revenue or land
records before the appointed day as for the purpose of agricul-
ture :
c
Provided that where on any land which is entered the revenue

-
or land records before the appointed day as for the purpose of
agriculture, there is a building which is not in the nature of a farm-
house then, so much of the extent of such land as is occupied by the
D
building shall not be deemed to be used mainly for the purpose of
agriculture :

Provided further that if any question arises whether any building
is in the nature of a farm-house, such question shall be referred to the
State Government and the decision of the State Government thereon E
shall be final;

(C) notwithstanding anything contained in Cl.(B) of this explana-
tion, land shall not be deemed to be mainly used for the purpose
of agriculture if the land has been specified in the master plan
for a purpose other than agriculture." F

The expression 'master plan' is defined in Section 2(h). It reads :

"2.(h) "master plan", in relation to an area within an urban agglom-
eration or any part thereof, means the plan (by whatever name called)
prepared under any law for the time being in force or in pursuance G
of an order made by the State Government for the development of
such area or part thereof and providing for the stages by which such
development shall be carried out."

Section 4 fixes different ceiling limits with respect to vacant land
falling in categories A, B, C and D. By Section 4(l)(c), the ceiling limit H
598 SUPREME COURT REPORTS (2001] 2 S.C.R.
A placed on such land situated in an urban agglomeration falling within
category C specified in Schedule I is fixed at 1500 square meters. Section
5 prohibits certain transfers of vacant land.Section 5(3), inter alia, provides
that transfer made in contravention of the said provision shall be deemed to
be null and void. Section 6 provides for the filing of statements before the
competent authority by persons holding vacant land in excess of ceiling limit.
B
Section 8 provides for preparation of draft statement as regards vacant land
held in excess of ceiling limit. The particulars of the statement shall contain
details as enumerated in sub-section (2). Sub-section (3) provides for service
of the draft statement on the person concerned and also for calling from him
objections to the draft statement. Sub-section (4) provides that the competent
c authority shall duly consider any objection received from such person and it
shall, after giving such person a reasonable opportunity of being heard, pass
such orders as it deems fit. After disposal of the objections, if any, received
under sub-section (4)of Section 8, final statement is.prepared under Section

D
9 of the Act. Section 10 provides for acquisition of vacant land in excess of
the ceiling lim.it whereas Section 11 provides for the payment for such -
acquired land. Section \15 provides that where any person acquires by
inheritance etc. any. vacant land which, together with the vacant land, if any,
already held by him, exceeds in aggregate the ceiling limit, such person will
have to file a statement before the competent authority and the provisions of
Sections 6 to 14 shall; so far as may be, apply to the statement filed under
E this section and to the vacant land held by such person in excess of the ceiling
limit. Section 20 empowers the Statement Government to exempt any vacant
land in public interest and also in cases where such exemption is considered
to be necessary to avoid undue hardship to any person.

F Section 21 of the ULC Act provides for cases where excess land will
not to be treated as excess. The said section reads thus :

"21. Excess vacant land not to be treated as excess in certain cases.-
(!) Notwithstanding anything contained in any of the foregoing
provisions of this chapter, where a person holds any vacant land in
G excess of the ceiling limit and such person declares within such time,
in such form and in such manner as may be prescribed before the
competent authority that such land is to be utilised for the construction
of dwelling unit (each such d.welling unit having a plinth area not
exceeding eighty sq':'l"'e meters) for the accommodation of the weaker
H sections of the society, in accordance with any scheme approved by
HERHIOHNE.SS MAHARANI SHANTIDEVI P. GAIKWAD \t S.H. PATEL{Y.K. SABHARWAl., J.] 599
such authority as the State Government may, by notification in the A
official Gazette, specify in this behalf, then, the competent authority
may, after making such inquiry as it deems fit, declare such land not
to be excess land for the purposes of this chapter and permit such
person to continue to hold such land for the aforesaid purpose, subject
to such terms and conditions as may be prescribed, including a B
condition as to the time limit within which such buildings are to be
constructed.

(2)Where any person contravenes any of the conditions subject to
which the permission has been granted under sub-section (!), the
competent authority shall, by order, and after giving such person an C
opportunity of being heard, declare such land to be excess land and
thereupon all the provisions of this chapter shall apply accordingly."

Section 23 provides for disposal of vacant land acquired under the Act.

The land in Vadodara falls in Category C. The ceiling limit is 1500
D
square meters. On 14th September, 1976 a declaration in Form No.(!) under
Section 6(1) was filed by Fatehsinhrao Gaikwad declaring 242 acres as vacant
land under the ULC Act.

From facts it is evident that the transaction in question was entered into E
because of enactment of the ULC Act. An agreement dated 24th March, 1977
was entered into between the Fatehsinhrao P Gaikwad as the owner
and Savjibhai Haribhai Patel as the licensee in respect of a portion of property
known an Laxmi Vilas Palace Estate, Vadod.ara. For sake of convenience
hereinafter Fatehsinhrao P Gaikwad has been referred as 'original defendant
F
No. I' and Savjibhai Haribhai Patel as 'plaintiff. The Memorandum of
Agreement (for short, 'the agreement') recites that the plaintiff has evolved
a scheme for constructing dwelling units for the accommodation of
the weaker sections of the society as envisaged by Section 21(1) of the
ULC Act. The said units are to be constructed on a portion of land
of the owner's property - Laxmi Vilas Palace Estate, save and except G
Laxmi Vilas Palace, Moti Baug Palace and Nazar Baug Palace. The
area under these three palaces which is to be excluded is said to
be approximately I00 acres - equivalent to about 4,00,000 square meters.
The total land of the property is about 707 acres. A Power of Attorney (For
short, 'the power') was also executed on 24th March, 1977 by original H
600 SUPREME COURT REPORTS (2001] 2 S.C.R.
A defendant no. I in favour of the plaintiff. It, inter alia, stipulates that the power
is irrevocable.

Five schemes under Section 21 of the ULC Act were filed before the
competent authority for the construction of the dwelling units for accommo-
dation of the. weaker sections of the society. The first scheme was filed under
B the signatures of original defendant No.I on 15th March 1977. It stipulated
construction of 64,306 dwelling units at the proposed cost of about
89,00,000,000. It is not in dispute that even this scheme was evolved by the
plaintiff. The plaintiff as power of attorney holder of original defendant No. I
submitted a second scheme on 5th October, 1977 for construction of 38,375
c dwelling units at the estimated cost of about Rs. 78,38,00,000. On 6th
February, 1978 another scheme was submitted by the plaintiff which stipu-
lated construction of 35,660 dwelling units at the proposed cost of
Rs.39,59,00,000. On 5/8th January, 1979 yet another scheme (4th scheme) for
construction of 25,482 dwelling units at the. estimated cost of about
Rs.48,35,00,000 was submitted. Finally, a scheme (5th scheme) proposing
D construction of 4,356 dwelling units at the estimated cost of .about
Rs.13,37,00,000 was submitted on 29th January, 1979 by the plaintiff as a
power of attorney holder of original defendant No. I.

Soon after the submission of the scheme dated 6th February, 1978,
original defendant No.I executed on 10th February, 1978 an affidavit-cum-
E
declaration. This document, inter alia, declares that all terms and conditions
contained in Para I to 19 of the agreement were agreed to and approved by
original defendant No. I and that the agreement was executed by him volun-
tarily while in sound state of mind and consciousness and is in no circum-
stances liable to, be cancelled. It also reiterates the execution of the irrevocable
F Power dated 24th March, 1977 authorising the plaintiff to administer the
property of the declarant and to put the housing scheme for constructing the
houses for the weaker sections on the said property and to make necessary
additions and alterations in the scheme and to modify the same consistent with
the ULC Act and the guidelines issued thereunder :
G On 23rd February, 1980, original defendant No. I through his advocate
sent a notice to the plaintiff, inter alia, stating that the agreement and the
power dated 24th March, 1977 and affidavit-cum-declaration dated 10th
February, 1 978 were illegal and inoperative and cancelling the agreement and
the power. A letter was also sent to the competent authority requesting the
H said authority not to proceed with any application in respect of the property
HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD "'· S.H. PATEL [Y.K. SABHARWAL, J.] 601
under Section 21 of the ULC Act which may either be pending or may be A
made in future by the :plaintiff.

Under the aforesaid circumstances, a suit was filed by the plaintiff
against original defendant no.1 on 7th April, 1980 seeking declaration that
cancellation of the agreement and the power was illegal and also praying for
decree of specific performance of the agreement besides seeking injunction B
and other consequential reliefs. The suit was originally filed against
Fatehsinhrao Gaikwad as the only defendant. Later, however, the specified
authority, the competent authority and the State of Gujarat were impleaded
as defendants to the suit. Original defendant No.1 died during the pendency
of the suit and his legal representatives were brought on record. C
By judgment and decree dated 12th March, 1992 the trial court decreed
the suit declaring the agreement and the power and affidavit-cum-declaration
as valid and subsisting documents binding on original defendant no.1 and on
his legal representatives. A decree for specific performance of the agreement
was also granted in favour of the plaintiff. The defendants were ordered to D
specifically perform the agreement and were restrained from committing
breach of the agreement, power of attorney and obstructing the plaintiff from
acting as constituted attorney of defendant no.I and from taking any action
regarding the scheme.

In the first appeal filed in the High Court challenging the judgment and E
decree of the trial court, three main questions considered were: (!) Whether
the agreement could be rescinded; power of attorney could be revoked and
affidavit-cum-declaration ceased to be operative or not. (2) Whether it is a
case for grant of relief of specific performance and; (3) If specific perform-
ance was to be ordered, whether any conditions were required to be imposed. F
The High Court by impugned judgment dated 15th June, 1998 held that
the main purpose for which the agency was created was the execution of the
scheme for constructing dwelling units for weaker sections of the society and
with that end in view the plaintiff had to prepare the scheme and get sanction
from the authority in accordance with law and invoking Section 202 of the G
Contract Act, the High Court c·oncluded that it is a case of agency coupled
with interest. Answering the first question, the High Court held that the
agreement could not be rescinded, power of attorney could not be revoked
--..._ and affidavit-cum-declaration did not cease to be operative. The second
question was also answered in favour of the plaintiff holding that the H
602 SUPREME COURT REPORTS [2001] 2 S.C.R.
A compensation in money was not adequate relief and the plaintiff was entitled
to specific perfonnance of the agreement.

In respect of the third question the High Court held that the decree for
specific performance could be enforced subject to conditions but for the said
purpose it was not necessary to remand or reverse the decree and it could
B be modified imposing the condition. It, therefore, held that the plaintiff was
entitled to enforce the specific performance. as granted by the trial court
subject to the condition of final declaration under Section 21 of the ULC Act
being issued With regard to the land in question by the specified authority,
the competent authority and the State of Gujarat in accordance with Jaw. The
c authorities were directed to take a final decision either way with regard to
the issue of the declaration. under Section 21 of the ULC Act at the earliest
possible opportunity but in no case later than 15th Augus~ 1998.

On 20th June, 1998, an order was passed by the Competent Authority
under Section 21(1) of the ULC Act approving the fifth scheme dated 29th
D January, 1979 and declaring that the plaintiff is entitled to hold as a power
of attorney holder the land admeasuring 23,91,125 sq.mtrs. (approximately
598 acres) as additional vacant land for the purpose of Chapter III of the ULC
Act and has right to make maximum construction as admissible under the
rules. The order dated 20th June, 1998 was challenged in a writ petition filed
in the High Court of Gujarat. The said writ petition has been withdrawn to
E
this Court to be heard and disposed of along with this appeal.

The ULC Act has since been repealed during the pendency of this
appeal by Repealing Act No.IS of 1999. The Repealing Act was passed by
the Parliament on 22nd March, 1999 and was adopted by a Resolution
F passed by the legislature of State of Gujarat under Clause (2) of Article 252
of the Constitution, on 30th March, 1999.

Reverting to facts, admittedly possession of the land in question was
with original defendant No. I when the suit was filed. It is not the case of
the plaintiff that the possession was delivered to him either when the
G agreement was entered into or till date. The plaintiff is not in possession
of the land. Declaration under Section 21 of the ULC Act had not been made
when the suit was filed. It has been made after the passing of the impugned
judgment and pursuant to directions contained therein. The said declaration,
as already stated, is the subject matter ·of challenge in the transferred writ
H petition. One of the questions which falls for our determination is as to what
HER HIGHNESS MAHARANI SHANTIOEVI P. GAIKWAO v. S.H. PATEL [Y.K. SABHARWAL. J.] 603
rights the plaintiff is entitled to epforce prior to issue of declaration under A
Section 21 of the ULC Act and before the plaintiff is put into possession.
Is the plaintiff entitled to seek specific performance of the agreement or is
he entitled to sue for only damages?

Now, with regard to documents executed between the plaintiff and
original defendant j\fo. l the agreement and power of attorney were executed B
on the same day, i.e., 24th March, 1977. The affidavit-cum- declaration was
executed by original defendant No.I on 10th February, 1978. The plaintiff
was to undertake the development of the property in the manner provided in
the agreement in conformity with Section 21 read with rules and guidelines
issued under the ULC Act. The original defendant No. I, as stipulated in the c
.:cagreement, agreed that the plaintiff shall construct dwelling units for the
accommodation of the weaker sections of the society on his land. The
delivery of possession by original defendant No.I to the plaintiff is contem-
plated by clause (4). The construction as per scheme is contemplated under
clause (13). Clause (17) deals with rescission of the agreement by either party.
The said three clauses read as under : D

"(4) On the Competent Authority making a declaration that the land
of the said property is not in excess of the Ceiling area and on
his granting permission to the owner to continue to hold theland
of the said property for purpose of the scheme above referred E
to be prepared by the Licensee of the Second Part, the owner
of the First Part shall deliver possession of the said property to
the Licensee of the Second Part for the execution of the said
scheme and construction of the buildings under the said scheme.

xxx xxx xxx F
(13) On the delivery of possession of the said property to him as
stated in clause (4) above, the Licensee of the Second Part shall
be entitled to construct dwelling units and other building in
accordance with the scheme.
G
(17) This agreement shall not be unilaterally rescinded by either
party after the Licensee of the Second Part has been put in
possession of the said property."

In S. Chattanatha Karayalar v. The Central Bank of India & Ors.,
[(1965) 3 SCR 318], the observations of Moulton, L.J. in Manks v. Whitley H
604 SUPREME COURT REPORTS [2001] 2 S.C.R.
A were quoted and are relevant while dealing with the question of interpretation
of several deeds which form part of same transaction. The observations read
as follows :

"Where several deeds form part of one transaction and are contem-
poraneously executed they have the same effect for all purposes such
B
as are relevant to this case as if they were one deed. Each is executed
on the faith of all the others being executed also and is intended to
speak only as part of the one transaction, and if one is seeking to make
equities apply to the parties they must be equities arising out of the
transaction as a whole."
c
The agreement and power contemplate two stages for the parties to take
steps required of them. Certain steps are required to be taken by the plaintiff
prior to the grant of declaration under Section 21 and before he is put into
possession and certain steps after such grant and on being put into possession.
The plaintiff is required to prepare a scheme in conformity with Section 21 ~-
D
at his cost and to file on behalf of the owner a declaration in regard to the
said property before the competent authority within the prescribed period. The
original defendant No. I is required to sign relevant papers, applications,
plans, drawings etc. as and when required by the plaintiff for the purpose of
declaration and inquiries contemplated by Section 21(1) of the ULC Act On
E making of declaration, as per clause (4), original defendant No.I is required
to deliver possession of the land to the plaintiff for execution of the scheme
and construction in terms thereof. The plaintiff is authorised to recover the
price of the land as may be determined by the competent authority and/or
the State Government from their prospective members in the scheme; and is
F also entitled to receive deposits from the members and obtain loans from
banks and other financial institutions and/or individuals for financing the
scheme. Likewise, in the power of attorney also, the plaintiff has been
authorised to take certain steps on behalf of the owner before the grant of
declaration under Section 21 and being put into possession and certain steps
after being put into possession. It is correct, as contended by Mr. Dhanuka,
G that these documents form part of same transaction. These documents have
to be read together with a view to find out the manifest intention of the
parties. It may, however, be noticed that affidavit-cum-declaration dated 10th
February, 1988 was executed only by original defendant No.l for the purpose
of filing it before the competent authority and it reiterates the agreement and
H the power. By execution of this document it was neither intended to confer
HER HIGHNESS MAHARANI SHANTIDEVI P. OA!KWAD 11. S.H. PATEL [Y.K.SABHARWAL,J.} 605
--~
any additional rights in favour of the plaintiff nor to place any restriction on A
original defendant no. I which was not envisaged by the agreement.

The disputes between the parties arose before the scheme was sane-
tioned and the plaintiff was put into possession and the agreement and the
power were terminated in terms of notice dated 23rd February, 1980 sent on
B
behalf of original defendant No. 1. At this stage the suit was filed. In the
plaint, the plaintiff states that it is necessary for protection and preservation
of his rights that defendant No.! be restrained from parting with possession
of the property. The first prayer of theplaintiff is that it may be declared that
the Memorandum of agreement dated 24th March, 1977, the irrevocable
power of attorney dated 24th March, 1977 and the affidavit-cum-declaration c
dated 10th February, 1978 are valid, subsisting and binding on the Defendant

-.- No. I. There is no prayer in the plaint seeking a mandatory injunction against
the authorities directing them to sanction the scheme. It has not been and
cannot be disputed that in the event of non-grant of the scheme by the
authorities the agreement would have fallen through. Agreement does not
D
contemplate that title in the land would pass on to the plaintiff. Further even
the title in the superstructure, i.e., dwelling units to be constructed was to
remain with the plaintiff ~nly till such time the same is transferred by him
in favour of the allottees or their society. It is not disputed that the plaintiff
could not retain any dwelling unit for his own benefit.
E
It is common ground that the main purpose for which the agreement
was entered into between the parties was the construction of residential
houses for the weaker sections of the society in term of Section 21 of the

..
ULC Act. Mr. Nariman contended on behalf of the appellants that under the
applicable master plan the suit land is reserved for 'open space' and residen- F
" tial houses cannot be constructed thereupon and, therefore, the agreement is
incapable of specific performance. On the other hand, Mr. Dhanuka con-
tended that the applicable master plan is the one that existed on the date when
excess vacant land first acquired the character of such land, i.e., on enforce-
ment of the ULC Act and according to the said master plan the land is
reserved for residential houses. Further contention of learned counsel is that G
~
assuming modification of the master plan is required to be considered, even
--ll._ then there is no impediment in the implementation of the scheme inasmuch
as there does not exist absolute bar for construction of residential houses. It
is submitted that as a matter of fact, the declaration dated 20th June, 1998
provides for obtaining of all requisite permissions whatever, if any, which H
606 SUPREME COURT REPORTS [2001] 2 S.C.R.
A may be required before commencing the actual construction or work. Further,
it is contended, in case of inconsistencies, if any, between the provisions of
Town Planning laws and the ULC Act, provisions of the ULC Act will prevail
in view of overriding provisions as contained in Section 42 of the ULC Act.

In the draft development plan dated 29th February, 1963 prepared
B
under the Bombay Town Planning Ac~ 1954, the entire area of Laxmi Vilas
Palace Estate (except the block of land along the river Vishwamitri and on
north and south of the Zoo Road) was left undesignated. This excepted part
of block of land was designated for agricultural use. The State Goverrunent
on 21st September, 1976 issued a notification under Section 10(1) of the
c aforesaid Act sanctioning the draft development plan subject to the modifi-
cations, inter alia, that the part of the area of Laxmi Vilas Palace Compound
which had been left undesignated in the development plan shall be designated
for residential use under Section 7(a) of the said Act and the block of land
situated along the river Vishwamitri and on north and south of the Zoo Road
passing through Laxmi Vilas Palace which had been designated for agricul-
D
tural use shall be released from the said designation and the land so released
shall be reserved for recreational purposes under Section 7(b) of the Act. A
further notification dated 17th May, 1975 under Section lOA(l) of the Act
was issued by the Goverrunent of Gujarat proposing to modify the develop-
ment plan dated 21st September, 1970 providing that the lands of Laxmi Vilas
E Palace shown as residential zone in the sanctioned development plan Vadodara
shall be released from the said use and the lands thus released shall be
reserved for open space under Section 7(b) of the Act as shown in the plan.
A notification dated 16th January, 1978 issued by the Gujarat Goverrunent

F
in exercise of powers conferred under Section lOA of the Bombay Town
Planning Act, 1954 sanctioning the variations proposed by the notification
dated 17th May, 1975 to Final Development Plan dated 21st September,
.
1970 notified 15th March, 1978 as the date from which the variations would
come into force. By clause (23) of the Schedule appended to the said
notification, it was provided \hat the land of Laxmi Vilas Palace shown as
residential zone in the sanctioned development plan of Vadodara shall be
G released from the said use and the lands thus released shall be reserved for
open space under Section 7 (b) of the said Act. Mr. Dhanuka is, however, right
in contending that the notification dated 16th January, 1978 never became
operative for the reason that before the said notification came into force, the
Bombay Town Planning Act, 1954 was repealed w.e.f. !st February, 1978 and
H the said notification was not saved under Section 124(2) of the Gujarat Town
HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD Y. S.H. PATEL [Y.K. SABHARWAL, J.J 607
Planning and Urban Development Act, 1976, which came into force w.e.f. A
!st February, 1978.

If the position had rested in terms of what has be'en stated above, the
consequences may have been different. It was, however, not so. Under the
aforesaid Gujarat Act, on 17th May, 1979, draft development plan under
Section 13 was published wherein the suit land was designated as 'open B
space, sport stadium, Bus terminus and court'. During the pendency of the
suit, on 25th January, 1984, the final development plan prepared by the
Vadodara Urban Development Authority issued under the Gujarat Act came
into effect. As per the said final development plan, the land in question is
reserved for open space etc. as stated in draft development plan dated 17th C
May, 1979.

The Government of Gujarat issued a circular dated !st April, 1978
regarding implementation of guidelines issued under Section 21 of the Act
· and amended ULC Rules. One of the salient feature of the said circular was
that the scheme shall be in consistence with the Master plan. It also provided D
that the scheme submitted should adhere to the prevailing municipal Regu-
lations, Town Planning requirements and other statutory requirements. If any
development is requireu as per these regulations, then the scheme should
include such development. It also provided that permissible density and
other regulations like minimum size, cornmon plot, minimum height, speci- E
fication and construction of stories etc. will also have lo be adhered to. It
further provided that the petmission to undertake the scheme will be given
only in residential zones as indicated in the Development Plan.

The Gujarat Government in supersession of the earlier circular dated
!st April, J.978 issued fresh guidelines on 22nd May, 1979 regarding the F
implementation of schemes under Section 21 of the ULC Act. These
guidelines, inter alia, stipulated that the area of 50% of the total house shall
not increase 40 square meters and the plinth area and the remaining building
plinth area shall not exceed 80 square meters. The construction work under
the scheme should be in consonance with the provisions of the Master plan
G
and should be over within 5 years from the date of the sanction under Section
21(1) granted by the competent authority. The units constructed under the
·- ...__
scheme shall be allotted to the weaker sections of the society by way of sale
or hire-purchase or on hire basis. It also provided that the construction shall
be made in accordance with the Town Planning Regulation, Municipal
Regulations, Building Regulations etc. The competent officer shall grant the H
608 SUPREME COURT REPORTS (2001] 2 S.C.R.
A scheme subject to the building regulation, margin of the municipal corpora-
tion, panchayat etc. According to the guidelines, the specified officer and the
competent officer are required to ensure that the conditions are complied with.
The guidelines stipulated the withdrawal. of exemption in case of violation
of any of the conditions. It is of significance to note that it was specifically
provided that at the time of sanctioning the scheme, the competent authority
B
shall ensure that the land in respect of which the scheme is submitted is not
placed in reservation. As already stated, the land in question is shown as open
space in the draft development plan of Vadodara.

The High Court by impugned judgment, as already noticed, modified
C the decree of the trial court and directed that the decree for specific
performance shall be operative only if declaration is issued under Section
21 of the ULC Act. On the question whether construction of residential units
on the suit land was permissible or not, the High Court following the
decision of this Court in Alia Mohammadi Begum (Smt.) v. State of U.P.
& Ors., (1993] 2 SCC 546, held that the construction of residential units
D cannot be said to be forbidden because of subsequent change in the master
plan and for considering whether residential units can be constructed or not,
the relevant master plan to be considered is the one which was in existence
on 17th February, 1976, when the ULC Act was enforced. The High Court
has held that :
E
" ... the construction of residential units on such land cannot be said
to be forbidden by any law merely because in the subsequent master
plan it has been shown to be open space. The rights of the parties were
crystallised on the date of the commencement of the Act and such
rights have to remain unaffected by the subsequent events."
F
The High Court has further held :

"Atia Mohammadi begum (supra) cannot be ignored or cannot be held
to be inapplicable to the facts of the present case on any of the
grounds raised by the learned counsel for the defendant appellant and
G the matter has to be examined on the basis of the position as it was
in existence with reference to the master plan on the date when the
Ceiling Act came into force on 17th February, 1976, the date on which
the rights of the parties had become crystallised and, therefore, at that
time if the land in question could be utilised for residential purposes,
H the mere change in the development plans subsequently would not
HER HIGHNESS MAHARANI SHANTI DEVI P. GAIKWAD v. S.H. PATEL (Y.K. SABHARWAL, J.] 609
create any legal impediment against the use of the same for the same A
land purpose, which too is a public purpose and it would not amount
to any contravention of law, if such land is permitted to be used for
raising the construction of dwelling units for the weaker sections of
the society. In the facts and circumstances of this case, therefore, it
cannot be said that, the MOA was no more capable of being enforced
B
and that the concerned authorities could not sanction the scheme as
such even if they wanted to sanction and the plaintiff respondent
could claim to enforce the MOA."

The competent authority in the order dated 20th June, 1998 approving
the scheme dated 29th January, 1979 for construction of 4358 dwelling units c
says that the ULC Act has superior powers over the concerned rules of the
State and, therefore, on the date the land was declared as vacant, it was in
-~ residential zone and for the purposes of Section 21, it cannot be taken that
the land is meant for open space. The competent authority further says that
the land would permanently remain in the residential zone.
D
In Atia Begum's case it was held :

"The 'master plan' defined in Section 2(h) and referred in the
definition of 'urban land' in Section 2(o), including Explanation (C)
therein, is obviously a master plan prepared and in existence at the
time of commencement of the Act when by virtue of Section 3 of the E
Act, right of the holder of the land under the Act get crystallised and
extinguish his right to hold any vacant land in excess of the ceiling
limit. The proceedings for determining the vacant land in excess of
the ceiling limit according to the machinery provisions in the Act is
merely for quantification, and to effectuate the 1ights and liabilities F
which have crystallised at the time of commencement of the Act. The
contrary view taken on the construction made of these provisions by
the High Court cannot, therefore, be accepted."

The facts of Atia Begum's case show that it is a case which relates to
quantification of vacant land. The present case is not of quantification of G
vacant land. Atia Begum was not concerned with the question of Town
Planning Laws and the schemes under Section 21 of the ULC Act which is
one of the principle question with which we are concerned here. It was not
held in Atia Begum that planning and development which is a state subject
would stand frozen on 17th February, 1976. The said decision cannot be read H
610 SUPREME COURT REPORTS [2001] 2 S.C.R.
A as laying down the law that for all and every purpose, the master plan as in +-
existence on 17th February, 1976 will freeze. We leave open the question
whether even for the purpose of quantification of vacant land that has become
such after 17th February, 1976, would the position in regard to the master
plan as existing on 17th February, 1976 remain unaltered or not. In the present
case, on this aspect, it is not necessary1 to examine the correctness of the
B
decision in Atia Begum's case.

It deserves to be emphasised that by passing a resolution under clause
(!)of Article 252, the State Legislature only surrendered the right to legislate
in respect of laws relating to the imposition of a ceiling on the holding of
c urban immovable property in excess of the ceiling and all matters connected
therewith or ancillary and incidental thereto in favour of the Parliament by
law. It was only a limited surrender in terms of the said resolution. The aspect
of Town PlaJ)lling and Development by the State has not been surrendered.
The imposition of ceiling on urban immovable property is an independent
subject. The primary object of the Act, as already noticed, was to prevent the
D concentration of urban land in the hands of a few persons and speculation
and profiteering therein, and to bringing about an equitable distribution of
land in urban agglomerations to subserve the common good. Basically one
uniform policy is fully understandable on such a subject and that is why on
this aspect there was surrender by most of states in favour of the Parliament.
E The town planning, however, is altogether an independent and different
subject. It is a State subject. It differs from State to State. It cannot be said
that by surrendering its right to legislate on the aspect of imposition of ceiling
on urban immovable property, the State Legislature also surrendered the right
of development and town planning. These are essentially the rights within the
purview of the State Government. The object of the ULC Act is not to
F sanction or permit development in the States contrary to their statutory town
planning laws. The development and the town planning is an ongoing process.
It goes on changing from time to time depending upon the local needs. The
definition of 'master plan' contemplates the plan prepared under any law 'for
the time being in force' or 'in pursuance of an order made by the State
G Government for the development. of such area or part thereof and providing
for the stages by which such development shall be carried out'. The definition
does not contemplate a static master plan. For claiming the benefit of Section
21, the construction of the dwelling units for the accommodation of the
weaker sections of the society on the land bas to be if permissible as per
relevant master plan when the scheme is considered by the authorities for
H
HER HIGHNFSS MAHARANI SHANTIDEVI P. OAIKWAD v. S.H. PATEL (Y.K. SABHARWAL, J.) 611
sanction. If the land use requires the land to be used for some other purpose, A
it cannot be said that to grant benefit under Section 21, the land should be
permitted to be used for construction of residential units. It was not intended
and could never have been intended that Section 21 will take away the State
power of town planning or on coming into force of the ULC Act, the Master
Plan would freeze. The Rules made under the ULC Act further make the
B
position quite clear. Rule 11-A was introduced and brought into force by
amendment of Urban Land (Ceiling and Regulation) Rules on 19th December,
1977. Rule 11-A reads as under :

"11-A. Terms and conditions subject to which a person may be
permitted to continue to hold excess vacant land under sub-section c
(1) of Section 21.-The terms and conditions subject to which the
competent authority may permit a person to continue to hold vacant
land, in excess of the ceiling limit, under sub-section (!)of Section
21, for the construction of dwelling units for the accommodation of
the weaker sections of the society in accordance with any scheme
shall be the terms and conditions specified in Schedule I-A." D

Schedule I-A sets out terms and conditions subject to which a person
may be permitted to continue to hold excess vacant land under sub-section
(I) of Section 21. The said conditions also make it clear that the construction
of dwelling units has to be consistent with the master plan. Condition No. I
E
of Schedule \-A reads thus :

"I. l11e construction of dwelling units for the accommodation of the
weaker sections of the society in the vacant land, in relation to which
the declaration of the competent authority is sought or made under
sub-section (I) of Section 21 shall be consistent with the Master Plan, F
if any, for the urban agglomeration or that part of the urban agglom-
eration wherein such land is situated or, if there is no Master Plan for
the urban agglomeration or such part thereof such directions as the
State Government may give in relation to land used in the urban
agglomeration, or such part have regard to the planned development
G
of the urban agglomeration or any part thereof."

Various guidelines issued from time to time also show that the master
plan to be considered is the one in existence at the relevant time when the
scheme under Section 21 is considered by the authorities. As already noticed,
the circular dated 22nd May, 1979 stipulates that at the time of sanctioning H
612 SUPREME COURT REPORTS [2001] 2 S.C.R.
A the scheme, the competent authority shall ensure that the land in respect .of
+-
which the scheme is permitted is not proposed to be acquired for any public
purpose or it is not placed in reservation and that the construction under the
sanctioned scheme shall be done in accordance with town planning regula-
tions etc.

B In view of above position, the High Court erroneously relying on Atia
Begum held that the user as provided in the master plan as in existence on
17th February, 1976 alone is to be seen and the subsequent change in the
master plan reserving the land for open space is of no consequence. The view
of the competent authority in the order dated 20th June, 1998 that the land
c would permanently remain in residential zone is also erroneous. Further, the
competent authority erroneously assumed, it seems, that the High
Court directed it to grant sanction under Section 21 of the ULC Act. The High
Court only directed the competent authority to decide the matter according
to law. Atia Begum's case cannot be held to have laid down a proposition
that use as provided in the master Plan as in existence on 17th February,
D
1976 will remain unchanged. The relevant master plan is the one which is
prevalent when the scheme under Section 21 is taken up for consideration

E
by the authorities and for this purpose neither the date of filing the scheme
nor the date of enforcement of the ULC Act is relevant. The development
will not freeze 0.1 the enforcement of the ULC Act or presentation of the
scheme.
-( -
In the present case, in the draft development plan of 1979 which was
finalised during the pendency of the suit, the land in question is reserved
for open space etc. It cannot be doubted that the agreement had been entered
into between the parties mainly and rather only with the object of construc-
F
tion of residential houses under the scheme under Section 21 of the ULC Act
for accommodation of weaker sections of the society. In May 1979, it became
evident that it will not be possible to construct residential houses in view of
what was provided in the master plan. There is no substance in the contention
that assuming the prescribed land use is 'open space', still there will be no
G impediment in the implementation of scheme in as much as there is no
absolute bar for construction of residential h?uses. This is not the basis on
which the competent authority had considered, the matter. The agreement is
clearly incapable of being specifically enforced. Under these circumstances,
there is no question of any inconsistency and thus Section 42 of the ULC
H Act cannot have any applicability.
HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD v. S.H. PATEL [Y.K. SABHARWAL, j.} 613
We may also consider another contention urged on behalf of the A
appellants which is based on repeal of the ULC Act. Section 3 of the repealing
-t Act deals with the saving of certain acts despite the repeal. That section reads
as under :

"3. (I) The repeal of the principal Act shall not affect-
B
(a) the vesting of any vacant land under sub- section (3) of section
10, possession of which has been taken over by the State
Government or any person duly authorised by the State Gov-
ernment in this behalf, or by the competent authority;

(b) the validity of any order granting exemption under sub-section c
(1) of section 20 or any action taken thereunder, notwithstand-
ing any judgment of any court to the contrary;

(c) any payment made to the State Government as a condition for
~.,.._
granting exemption under sub-section (1) of Section 20.
D
(2) Where-

(a) any land is deemed to have vested in the State Government
under sub-section (3) of section 10 of the principal Act but
possession of which has not been taken over by the State
E
- ')- Government or any person duly authorised by the State Gov-
ernment in this behalf or by the competent authority; and

(b) any amount has been paid by the State Government with respect
to such land,

then, such land shall not be restored unless the amount paid, if any, F
has been refunded to the State Government."

A bare reading of the aforesaid provision shows that it is not applicable
to Section 21 of the ULC Act. Orders sanctioning schemes under Section 21
have not been saved by Section 3. The contention urged on behalf of the
G
appellants and also the State Government is that the schemes under Section
21 are not saved by Section 3 of the ULC Act. Admittedly, the land has not
vested with the Government under Section 10(3). Possession continues to be
with the appellants. Mr. Bhatt, learned counsel for the State Government as
-.....i. well for the authorities has argued that the necessary consequence of the
repeal, on the facts of the present case, is that the land would be free from H
614 SUPREME COURT REPORTS (2001] 2 S.C.R.
A any constraints to which it may have been subjected under the ULC Act. Mr.
Dhanuka, however, contended that Section 3 of the repealing Act is not
exhaustive. Relying upon Section 6 of the General Clauses Act, learned
counsel submits that the repeal does not affect rights accrued in favour of
the plaimiff under the ULC Act. Section 6 of the General Clauses Act, inter
alia, provides that where any Central Act repeals any enactment, unless a
B
different intention appears, the repeal shall not affect anything duly done or
affect any right, privilege, obligation or liability acquired, accrued or incurred
under any enactment so repealed.

Reliance has been placed by the learned counsel on decision in the case
c of Bansidhar & Ors. v. State of Rajasthan & Ors., [1989] 2 SCR 152 in
support of the contention that provision of Section 3 of the Repealing
Act is not exhaustive. Para 13 ou which reliance has been placed reads as
under :

"A saving provision in a repealing statute is not exhaustive of the
D rights and obligations so saved or the rights that survive the repeal.
It is observed by this Court in I. T. Commissioner, U. P. v. Shah Sadiq
& Sons, AIR (1987) SC 1217 at 1221

" ..... In other words whatever rights are expressly saved by the
'savings' provisions stand saved. But, that does not mean that
E rights which are not saved by the 'savings' provision are
extinguished or stand ipso facto terminated by the mere fact th~t
a new statute repealing old statute is enacted. Rights which have
accrued are saved unless they are taken away expressly. This is
the principle behind Section 10(22).6(c), General Clauses Act,
F 1897 ..... ".

We agree with the High Court that the scheme of the 1973 Act does
not manifest an intention contrary to, and inconsistent with, the saving
of the repealed provisions of sec.6(6A) and Chapter III-B of '1955
Act' so far as pending cases are concerned and that the rights accrued
G and liabilities incurred under the old law are not effaced. Appellant's
contention (a) is, in our opinion, insubstantial."

We have no difficulty in accepting the contention that a repealing
statute is not exhaustive and does not automatically extinguish the accrued
rights unless taken away expressly. The question in the present case, however,
H is whether any rights under the ULC Act had accrued in favour of the plaintiff
J
HER HIGHNESS MAHARAI\'1 SHANTIDEVI P. GAIKWAD v. S.H. PATEL (Y.K. SABHARWAL, J.) 615
before its repeal. It is only then the question of the saving of the said rights A
would arise.

To consider the aforesaid contention, it has again to bC kept in view
that the sanction of the scheme for construction of residential dwelling units
was contrary to the prescribed land use in the master plan which had reserved
the land for being used as open space. It cannot be held, on the facts of the
B
case, that any rights accrued in favour of the plaintiff only on execution of
the agreement. Assuming any rights accrued in favour of the plaintiff on
passing of order dated 20th June, 1998, the same would fall on our view that
the said order dated 20th June, 1998 was passed erroneously. There is no
substance in the contention that any rights had accrued in favour of the c
plaintiff which have the protection of Section 6 of the General Clauses Act.

We may consider another argument which is in respect of construction
of the clause (17) of the agreement. Mr. Nariman contended that the agree-
ment could be unilaterally determined under that clause. The contention is
D
that clause (17) is to be read with clause (4) of the agreement and thus read,
there is clearly an express provision in the agreement giving rights to parties
to unilaterally terminate the agreement and that it was tenninated by original
defendant No.I by serving notice dated 23rd February, 1980 on the plaintiff.
Further contention is that to such an agreement, clause (c) of Section 14(1)
of the Specific Relief Act, 1963 applies. A contract which is in its nature E
determinable cannot be specifically enforced (Section 14(l)(c)]. Mr. Dhanuka,
on the other hand, contended that the contract is not detenninable and,
therefore, Section 14( 1) has no relevance and also that to the agreement in
question, clause (c) of Section 14(3) is applicable and, therefore, notwith-
,standing clause (c) of Section 14(1), contract is specifically enforceable. F
Section 14(3), inter alia, provides that notwithstanding clause (c) of sub-
section(!), the court may enforce specific performance where the suit is for
the enforcement of a contract for the construction of any building or the
execution of any work on land. A bare reading of clause (c) of Section 14(3)
shows that it has no applicability. The building contract stipulated by clause
(c) of Section 14(3) is not the type of the contract with which we are G
concerned in the present case. Now, let us examine whether to the agreement
in question, clause (c) of sub-section (1) of Section 14 is applicable or not.

Clause (17) of the agreement states that the agreement shall not be
unilateraIIy rescinded by either party after the plaintiff has been put in H
616 SUPREME COURT REPORTS [2001] 2 S.C.R.
A possession of the property. Clause (4) stipulates the stage at which the
plaintiff is required to be put in possession. It is undisputed that the plaintiff
was never put into possession. In fact, that stage did not arise because the
scheme itself was sanctioned only after the judgment under appeal and
pursuant to directions contained in the said judgment. In this appeal, an order
of stay was passed in favour of the appellant and consequently the possession
B
has remained with the appellants. The High Court in the impugned judgment
has, however, held that the agreement could not be terminated as it constitutes
a contract of agency coupled with interest to which Section 202 of the Indian
Contract Act, 1872 applies. Mr. Nariman, however, relying on clauses (17)
and (4) of the agreement and Section 9 of the Indian Contract Act, contended
c that there is an express provis.ion giving right to the parties to terminate the
agreement and that the said right was exercised before delivery of possession
to the plaintiff and there is thus no question of applicability of Section 202
of the Indian Contract Act. On the other hand, the contention of Mr. Dhanuka
is that, at best, clause ( 17) can be said to be silent on the question of
D termination of agreement before delivery of possession. The contention of
learned counsel is that there is no positive term in the agreement stipulating
that before delivery of possession, the agreement can be unilaterally termi-
nated by the parties. The agreement [clause (17)] is said to be in negative
form. The contention of learned counsel further is that it could never have
been intended that the original defendant No.I can unilaterally terminate the
E agreement as the plaintiff under the agreement had to take various steps and
to spend huge amounts for preparation of scheme and for pursuing the same.
Therefore, the plaintiff could have never agreed to a term that such an
agreement may be unilaterally terminated. Learned counsel also relies upon
Section 202 of the Indian. Contract Act and submits that it is a case of an
F agency in favour of the plaintiff coupled with the subject matter of agency,
which in the present case, is the right to work out the scheme and to construct
the dwelling units irrespective of the repeal or amendment of the ULC Act
·which aspect was also duly taken note of in the agreement. The High Court
held that it was a case of agency coupled with interest to which Section 202
applied and for its view the High Court also sought support from clause ( 17)
G observing that express clause to terminate the agreement was absent.

We are unable to agree with the approach of the High Court and find
substance in the contention of Mr. Nariman. Clause (17) is in the nature of
express stipulation that before delivery of possession, the contract could be
H unilaterally termindted. When there is no ambiguity in the clause, the question

•
HER HIGHNESS MAHARANI SHANTI DEVI P. OAIKWAD v. S.H. PATEL [Y.K. SABHARWAL, J.] 617
of intendment is immaterial. The fact:"that the clause is couched in a negative A
fonn is of no consequence. The intention is clear from the plain language of
clause (17) of the agreement. In the case in hand, Section 202 has no
applicability. It is not a case of agency coupled with interest. No interest can
be said to have been created on account of plaintiff being permitted to prepare
the scheme and take ancillary steps. Plaintiff could not get possession before
B
declaration under Section 21 of the ULC Act. Mr. Dhanuka also contended
that the agreement is not detenninable is clear from the conduct of original
defendant No.I and also what he stated in the affidavit-cum-declaration dated
10th February, 1978 about agreement not being terminable. The contention
of learned counsel is that what original defendant No. I has said in the said
document is his interpreting statement which is admissible in law and this C
interpreting statement and also his conduct, clearly shows that agreement was
not tenninable by original defendant No. I. Strong reliance has been placed
on Godhra Electricity Co. l.Jd & Anr. v. The State of Gujarat & Anr., (1975]
2 SCR 42 in particular to the following passage :
"In the process of interpretation of the tenns of a contract, the court D
can frequently get great assistance from the interpreting statements
made by the parties themselves or from their conduct in rendering or
in receiving perfonnance under it. Parties can, by mutual agreement,
make their own contracts; they can also by mutual agreement. remake
them. The process of practical interpretation and application, how- E
ever, is not regarded by ihe parties as a remaking of the contract; nor
do the courts so regard it. Instead, it is merely a further expression
by the parties of the meaning that they give and have given to the
tenns of their contract previously made. There is no good reason why
the courts should not give great weight to these further expressions
by the parties, in view of the fact that they still have the same freedom F
of contract that they had originally. The American Courts receive
subsequent actions as admissible guides in ijlterpre_tation. It is true that
one party cannot build up his case by making an in"terpretation in his
own favour. It is the concurrence therein that such a pa:rty .can use
against the other party. This concurrence may be evidenced by the G
other party's express assent thereto, performances that indicate it, or
by saying no'.f.ng when he knows that the first party is acting on
reliance upon the interpretation." ·
There is no merit in the contention of Mr. Dhanuka. The decision relied
upon by Mr. Dhanuka is not applicable to unambiguous documents. That is H
618 SUPREME COURT REPORTS [2001] 2 S.C.R.
A clear from the decision itself. In respect ofunarnbiguons documents, Odgers'
Construction of Deeds and Statutes, 5th &In. By G. Dworkin at pages 118-
119, has been quoted in the aforesaid decision as under :
+---
"The question involved is this : Is the fact that the parties to a
document, and particularly to a contract, have interpreted its terms in
B a particular way and have been in the habit of acting on the document
in accordance with that interpretation, any admissible guide to the
construction of the document? 1n the case of an unambiguous
docwnent, the answer is 'No'."

It has been held that "in the case of an ambiguous instrument, there
is no reason why subsequent interpreting statement should be inadmissible".
In the present case we are concerned with an unambiguous document and,
therefore, we have to go by its plain meaning. Further, affidavit-cum-
declaration only reiterated what was contained in the agreement. It did not
enlarge the agreement. It did not substimte any clause in the agreement. It
D was not a document executed between the parties. It was a document
executed by original defendant No.1 alone for the purposes of filing it before
the competent authority. Clause 17 of the agreement does not call for any
other interpretation except that the contract could be unilaterally rescinded
before deli very of possession.
E Mr. Dhanuka also contended that if clause ( 17) is construed to mean
that power had been conferred on the parties to cancel the contract
unilaterally at their wish, then such a power of termination has to be
exercised for good and reasonable cause otherwise unilateral power of
cancellation would have to be treated as void and ineffective in law. Reliance
F has beeu placed by the learned counsel on National Fertilizers v. Puran
Chand Nangia, [2000] 8 SCC 343 at 351 paragraph 23 which reads thus :

"23. We may also state that under the general law of contracts, once
the contract is entered into, any clause giving absolute power to one
party to override or modify the terms of the contract at his sweet will
G or to cancel the contract - even if the opposite party is not in breach,
will amount to interfering with the integrity of the contract (per
Rajarnanner, C.J. in Maddala Thathiah v. Union of India, AIR (1957)
Mad 82. On appeal to this Court, in that case, in Union of India v.
Maddala Thathaiah, [1964] 3 SCR 774 the conclusion was upheld on
H other grounds. The said judgment of t.'ie Madras High Court was
_,
HER HIGHNESS MAHARANI SHANTIDEVI P. OAIKWAD v. S.H. PATEL[Y.K. SABHARWAL, J.] 619
considered again in Ce,;tral Bank of India Ltd v. Hartfort Fire A
Insurance Co. ltd., AIR (1965) SC 1288 but the principle enunciated
by Rajamanner C.J. was not differed from (See the discussion on this
aspect in Mu/la's Contract Act, (10th Edn.) pp 371-72, under Section
31 of the Indian Contract Act.)"

We have perused the decision of Madras High Court referred to in the B
aforequoted passage as also the two decisions of this Court and Mulla's
Contract Act. With utmost respect, we are unable to agree with the broad
proposition that the absolute power of tennination would be void. Referring
to Madras case and two cases of this Court, Mulla says that correctness of
Madras case was doubted. We reproduce as to what has been stated in the c
Contract Act by Mulla at pages 371-372. It reads :

"If two parties stipulate that the contract shall be void upon ·the
happening of an event over which neither party shall have any
contract then the contract is void on the happening of that event. But
where the contract is that the contract shall be void on the happening D
of an event which one cir either of them can bring about then the
blameworthy party cannot take advantage of that stipulation because
to do so would be to permit him to take advantage of his own wrong.
This principle was accepted in Australia but with this modification
that in both cases the contract is voidable and not void in one case
E
and voidable in the other, because the construction cannot differ
according to events. Some Indian courts held that a clause in a
contract giving one of the parties the option to cancel the contract for
any reason whether ade4uate and valid or not confers an absolute and
arbitrary power on one of the parties to a contract and is, therefore,
void and unenforceable. Therefore, a clause in a contract of supply F
of goods to the Railway Administration conferring on the Railway
Administration the right to cancel the contract "at any stage during
the tenure of the contract without calling upon the outstandings on
the unexpired portion of the contract" was held to be a clause under
which it was open to one of the parties, without assigning any reason G
valid or otherwise, to say that it was not enforceable. It conferred an
absolute and arbitrary power on one of the parties to cancel the
contract.

On appeal against the Madras High Court decision, the Supreme
Court upheld the order passed but held that the clause authorising H
620 SUPREME COURT REPORTS [2001] 2 S.C.R.
A cancellation applied only where a formal order had not been placed
for supply of the goods contracted for at which stage no legal contract
can be said to have been made and so the cancellation made in the
Railway case could not be said to have been covered by the clause.
The Madras & Bombay cases were reviewed by the Supreme Court
in a subsequent judgment and distinguished and the correctness of the
B
Madras case also doubted. And the Supreme Court held that where
the language of a clause in a contract is clear it must be interpreted
according to its language. In that case, a clause in an insurance policy
authorising both parties to cancel the policy at will was upheld. It is
submitted that the two· Supreme Court judgments show that such
c clauses are valid and enforceable except where, as in the Madras
Railway case, the contract is an executed contract in that as formal
order of supply had already been made."

In our view, the aforesaid passage has been misread in National
Fenilizer's case. Further in The Central Bank of India i.Jd., Amritsar v. The
D
Hanford Fire Insurance Co. i.Jd., AIR (1965) SC 1288, decisions of Madras
High Court and of this Court Union oflndia v. Maddala Thathaiah, [1964]
3 SCR 774 were considered. The question in that case was whether the
insurance policy had been terminated. This Court was concerned with a clause
in an insurance policy which, inter alia, provided that the Policy can be
E terminated at the option of the Insurance Company. The contention of the
respondent-Insurance company was that it had power under the said clause
to terminate the contract at will and it had duly exercised that power. The
appellant's contention was that it was implied in the clause that termination
could only be for a reasonable cause which did not exist in that case. It was
F further contended that if this interpretation of implied term is not accepted,
the clause giving such right to terminate at will without reasonable cause must
be treated as void and ignored. This Court said :

"The contention of the appellant is based on the interpretation of
clause 10. Now it is commonplace that it is the court's duty to give
G effect to the bargain of the parties according to their intention and
when that bargain is in writing the intention is to be looked for in the
words used unless they are such that one may suspect that they do
not convey the intention correctly. If those words are clear, there is
very little that the court has to do. The court must give effect to the
H plain meaning of the words however, it may dislike the result. We
HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD \t S.H. PATEL [Y.K. SABHARWAL, 1,J 621
have earlier set out clause 10 and we find no difficulty or doubt as A
to the meaning of the language there used. Indeed the language is the
plainest. The clause says "This insurance may be terminated at any
time at the request of the Insured", and "The Insurance may also at
any time be terminated at the instance of the Company". There are
all the words of the clause that matter for the present purpose. The
B
words "at any time" can only mean "at any time the party concerned
likes". Shortly put clause 10 says "Either party may at its will
terminate the policy". No other meaning of the words used is
conceivable."

Regarding validity of the clause which gave power as aforesaid, this C
Court held :

"The next argument was that clause 10 was bad as it gave more option
!O the insurer than to the assured. We express no opinion as to whether
the clause would be bad if it did so, for we are clear in our mind that
it did not. The argument that it did was based on the use of the word D
'request' in the case of a termination by the assured and 'option' in
the case of a termination by the insurer. It was said that the word
'request' implied that the request had to be accepted by the insurer
before there was a termination whereas the word 'option' indicated
that the termination would be by an act of the insurer alone. We are
E
unable to agree that such is the meaning of the word 'request'. In our
view, the clause means that the intimation by the assured to terminate
the policy would bring it to an end without more, for the clause does
not say that the termination shall take effect only when the assured' s
request has been accepted by the insurer.
F
Lastly, it was said that the termination of the contract by the letter
of August 7, 1947 was a conditional termination and as the condition
was impossible of performance in the circumstances prevailing, there
was in fact no termination. That condition, it was said, was the
removal of the goods from Bakarwana Bazar, Amritsar to a safer
G
locality. We have nothing to show that the condition, if it was such,
was impossible of performance. However, that may be, there is no
question of any condition. The letter clearly terminated the policy. It
gave an option to the assured to keep the policy on its feet if it did
something. Further we do not think that it can be said that if a party
has a right at will to terminate a contract, the imposition by him of H
622 SUPREME COURT REPORTS [2001] 2 S.C.R.
A a condition, however hard, on failure to fulfil which the termination -f -
was to take effect, would make the termination illegal, for the party
affected was not entitled even to the benefit of a difficult condition.
The agreement was that the power to terminate could be exerr:ised
without more and that is what we think was done in this case. "
B (Emphasis has been supplied by us)

From the aforesaid, it is clear that this court did not accept the
contention that the clause in the insurance policy which gave absolute right
to the insurance company was void and had to be ignored. The termination
as per the term in the insurance policy was upheld. Under general law of
c contracts any clause giving absolute power to one party to cancel the
contract does not amount to interfering with the integrity of the contract.
The acceptance of the argument regarding invalidity of contract on the
ground that it gives absolute power to the parties to terminate the agreement
would also amount to interfering with the rights of the parties to freely enter
D into the contracts. A contract cannot be held to be void only on this ground.
Such a broad proposition of law that a term in a contract giving absolute
right to the parties to cancel the contract, is itself enough to void it cannot
be accepted.

In view of above discussion, we frnd force in the contention that the
E agreement in question was terminable before delivery of possession; it was
so determined and to the agreement clause (c) of Section 14(1) of the Specific
Relief Act, 1963 applies. Therefore, agreement cal1!1ot be specifrcally be
enforced.

It was further contended by Mr. Nariman that the agreement is not
F
specifically enforceable also in view of clause (d) of sub- section (1) of ~
Section 14 of the Specific Relief Act, 1963. This provision provides that a
contract the performance of which involves the performance of a continuous
duty which the Court cannot supervise, is not specifically enforceable. There
is considerable force in the submission of learned counsel. Even the High
G Court had substantially proceeded on the basis that the implementation of the
scheme may require supervision but held that it can be supervised by the
competent authority. Having regard to the nature of the scheme and the facts -~ __
and circumstances of the case, to our mind it is clear that the performance
of the contract involves continuous supervision which is not possible for the
H court. After repeal, such continuous supervision cannot be directed to be
HER HIGHNESS MAHARAt-.1 SHANTIDEVI P. OAIKWAD v. S.H. PATEL [Y.K. SABHARWAL, J.] 623
undertaken by the competent authority as such an authority is now non- A
existent.

The grant of decree for specific performance is a matter of discretion
under Section 20 of the Specific Relief Act, 1963. The court is not bound
to grant such relief merely because it is lawful to do so but the discretion
is not required to be exercised arbitrarily. It is to be exercised on sound and B
settled judicial princples. One of the grounds on which the Court may decline
to decree specific performance is where it would be inequitable to enforce
specific performance. The present is clearly such a case. It would be wholly
inequitable to enforce specific performance for (i) residential houses for
weaker sections of the society cannot be constructed in view of the existing C
master plan and, thus, no benefit can be given to the said section of the
society; (ii) In any case, it is extremely difficult, if not impossible, to
continuously supervise and monitor the construction and thereafter allotment
of such houses; (iii) the decree is likely to result in uncalled for bonanza to
the plaintiff; (iv) patent illegality of order dated 20th June, 1998; (v) absence
of law or any authority to determine excess vacant land after construction of D
4356 dwelling units; and (vi) agreement does not contemplate the transfer of
nearly 600 acres of land in favour of the plaintiff for construction of 4356
units for which land required is about 65 acres. The object of the act was
to prevent concentration of urban land in hands of few and also to prevent
speculation and profiteering therein. The object of Section 21 is to benefit E
weaker sections of the society and not the owners. If none of these objects
can be achieved, which is the factual position, it would be inequitable to still
maintain decree for specific performance.

The contentions urged on behalf of the plaintiff by their learned counsel
that in view of clauses (6) and (7) of the agreement, despite repeal of the F
ULC Act, plaintiff would be entitled to specifically enfor~e the agreement has
also no merit. The acceptance of the contention will mean that original
defendant No.! before delivery of possession had no right to terminate the
agreement. This contention placed on behalf of the plaintiff has already been
rejected by us. Reading clauses (6) and (7) harmoniously with clauses (4) and
G
(17), the contention of learned counsel cannot be accepted. In view of these
conclusions, the contention of Mr. Dhanuka that repntation of the plaintiff as
a builder would be adversely affect if houses are not built is hardly of any
relevance. In any case, in this regard we may refer to the decision of this
Court in K. Narendrav. Riviera Apartments (P) l.Jd., [1999] 5 SCC 77, a case
in which this Court examined an agreement which contemplated several H
I

624 SUPREME COURT REPORTS [2001] 2 S.C.R.
A sanctions and clearances that were not within the power of the parties. The
result was that the feasibility of a multi-storeyed complex as proposed and
planned became impracticable. In that case too the seller continued to remain
in possession. Under these circumstances, it was held that the contract though
valid at the time when it was entered, is engrossed in such circumstances that
the perfonnance thereof cannot be secured with precision and that the dis-
B
cretionary jurisdiction to decree the specific perfonnance ought not to be
exercised. Dealing with the question of reputation of the purchaser as a builder
being at stake, this Court held that 'this is hardly a consideration which can
weight against the several circumstances.... If a multi- storeyed complex
cannot come up on the suit property, the respondent's plans are going to fail
c in any case'. The position in the present case is quite similar. Under the scheme
as postulated by the ULC Act, it is not pennissible to construct dwelling units
for the residence of the weaker sections of the society.

It also deserves to be noticed that, strictly speaking, it is not a contract
for transfer of the property but is a contract to carry out the scheme which
D is incapable of being carried out at this stage on account of reservation in
the Master plan and also repeal of the ULC Act. It was not and cannot be
the case of the plaintiff that in case the scheme had been carried out, he
would have enjoyed the property. He would have only enjoyed the specified
profits. At best the plaintiff could pray for damages. In the plaint, it was
E asserted that Rs.16,75,000 were spent on execution andlor implementation of
the scheme. The plaintiff, for reasons best known to him; has not sought a
decree for any damages, even as an alternate relief.

Before concluding, we may place on record that during the course of
hearing, a statement was made by the appellants that in the event of the appeal
F and the transferred writ petition being allowed, they will unconditionally offer
in writing 66 acres of land to the Government of Gujarat. The said statement
reads as under:

I. The Appellant through his counsel states : that even in the event
of this Hon'ble Court ailowing the appeal and Transferred Writ
G Petition:

(a) the Appellant will unconditionally offer in writing 66 acres of
land (unencroached and unencumbered earmarked in the plan
attached) to the Government of Gujarat by way of gift or for
H acquisition (on a compensation of Rs. I) for the specific purpose
HER HIGHNESS MAHARANI SHANTIDEVI P. GAIKWAD v. S.H. PATEL [Y.K. SABHARWAL, J.] 625
of constructing residential dwelling units (permissible under A
VUDA or L!G Schemes of the Gujarat Housing Board) at the
cost of Government for low-income groups.

(b) if such offer is not accepted within a period of four months from
the date of offer the appellant will undertake the responsibility
of utilising the said land (i.e. to say approximately 65.95 acres) B
of land for constructing thereon dwelling units (if permitted
under the relevant Town Planning Laws) for housing persons in
the low-income group and letting or selling the same to such
persons in low income group on no profit no loss basis : the total
cost of such a project will be got certified by a reputed Chartered C
Accountant."

The appellant would be bound by the aforesaid undertaking which we
accept.

Before parting, we wi>h to express, to put it mildly, our deep anguish D
on the manner in which the specified authority, competent authority and the
State of Gujarat has been conducting itself before the trial Court, High Court
and this Court. Different stands at different points of time have been taken

- sometimes supporting the plaintiff and sometimes the defendants.

For the aforesaid reasons, we allow the appeal, set aside the impugned E
judgment and dismiss the suit of the plaintiff. Transfer Case (C) No.64 of
1998 and SLP (C) No.1692 of 1999 are also disposed of in terms of this
judgment. Parties to bear their own costs.

V.S.S. C.A. No. 3530/98 allowed.
T.C. (C) No. 64/98 and F
SLP (C) No. 1692/99 dismissed.