Sovarani Ghose vs Bengal Steel Industries Ltd.

Monoranjan Mallick, J.—This is a plaintiffs suit for Specific Performance of Contract for sale prayed by way of declaration that the defendant do execute the conveyance in respect of the property mentioned in Schedule ''A'' to the plaint in favour of the plaintiff and alternatively the Registrar of this Court be directed to execute and register the conveyance in favour of the plaintiff in respect of the property mentioned in Schedule ''A'' and for mandatory injunction directing the defendant to execute the Deed of Conveyance. The facts are, briefly, as follows:

By an agreement dated 14th June, 1975 with Bengal Central Building Society Ltd. as vendor on the one part and the plaintiff Sovarani Ghosh as the purchaser of the other part, it was agreed that the defendant would sell to the plaintiff all the piece and parcel of the land measuring 2 cottahs 4 chittaks being plot No. 100 of Sil Lane Land Scheme of the defendant society being a portion of premises No. 15C of Sil Lane, Calcutta outside the jurisdiction of this Court. The terms and conditions of the said agreement for sale is set out in para 1 of the plaint. The plaintiff paid from time to time a total sum of Rs. 25,105/- only and the last payment of which has been made on 27th Dec. 1982. After the completion of all the formalities, a draft Conveyance was prepared and sent to the defendant at the defendant''s office at 41 Free School Street, Calcutta within the jurisdiction of this Court which was duly approved by the defendant. As the defendant has committed breach of the obligations of the terms of the agreement, it is necessary to compel the performance of the said conveyance deed and the curt shall grant injunction to prevent the breach complained of and also to compel the defendant to perform its obligation by executing and registering the Conveyance Deed. The Bengal Central Building Society Ltd., the original defendant, as filed a written statement and substituted defendant has adopted the said written statement and is contesting the suit on the basis of the original written statement filed.

The Bengal Central Building Society has filed a written statement contending that the name of the defendant company was changed to that of Bengal Central Estates and Steel Industries Ltd. w.e.f. 26th March, 1981 and the suit is liable to be dismissed because the defendant has not been impleaded in its present name.

The defendant has, however, admitted that an agreement for sale dt. 14th June 1975 was entered into between the plaintiff and the original defendant but it is submitted that before that sale could be completed in terms of the said agreement, the Urban Land (Ceiling and Regulation) Act, 1976 came in to force w.e.f. Feb., 1976 and the provisions whereof became applicable to the defendant, in as much as, the defendant was holding excess vacant land, a part whereof was a subject matter of the said agreement for sale, that the defendant filed a return on or about 17th July, 1976 u/s 6(l) of the said Act and also applied for exemption u/s 20 of the said Act, that permission was sought by the defendant thereby from the competent authority under the said Act to complete the sale and/or convey the plot of land to the plaintiff but in spite of the details of the agreement having been shown in the said return filed by the defendant before the said authorities, no exemption as such was granted by the said authorities as a consequence whereof the said sale could not be completed, and that pursuant to the said agreement all steps have been taken by the defendant for making plots and for laying down streets in terms of the Rules and Regulations of the Calcutta Corporation but in view of the rejection on the part of the authorities to grant exemption in the manner as stated hereinbefore, the question of proceeding with the alleged claim of development does not arise. The defendant, therefore, denies that the defendant is refusing to execute such conveyance on some false pretext or other as alleged or at all. Under the circumstances, the question of executing and registering any conveyance cannot and does not arise, The fact of rejection of the exemption u/s 20 of the Urban Land (Ceiling arid Regulation) Act was within the knowledge of the plaintiff arid as without such permission, no document, and/or conveyance can be registered, the question of any alleged delay on the part of the defendant does not arise. The defendant denies that it has committed breach of the obligation which are necessary to compel the performance of the said conveyance as alleged and in view of the provision of the Urban Land (Ceiling and Regulation) Act, 1976 and in the aforesaid circumstances, the said agreement entered into between the parties became void and was liable to be delivered up and cancelled. Therefore, the question of granting any purported injunction to prevent alleged breach completion cannot and does not arise. The defendant, therefore, denies that the plaintiff is entitled to get specific performance of the said agreement, in as much as, the said agreement being void, there could be no question of specific performance as alleged or at all. It is also alleged that the suit relates to land which is situated in outside the jurisdiction of this Court and this Court has no jurisdiction to try and determine the suit.

After the written statement has been filed intimating the change of the name of the defendant, the plaintiff has amended the plaint and substituted the name of Bengal Central Building and Steel Industries Ltd. and has also prayed that the substituted defendant is also liable to perform the obligations of the original defendant. The name of the defendant has again been changed and the name of the Bengal Steel Industries Ltd. has been substituted for the substituted defendant Bengal Central Estates and Steel Industries Ltd. and the plaintiff also claims that the present company Bengal Steel Industries Ltd. is liable to perform the obligation of the original defendant.

From the pleadings the following issues have been framed:

Issues:

Has the court jurisdiction to entertain the present suit?

Is the defendant unable to execute the Deed of Conveyance in favour of the plaintiff for the said property on account of the refusal by the Competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976 to grant permission, to complete the sale and also to grant exemption u/s 20 of the above Act?

Are the provisions of Urban Land (Ceiling & Regulation) Act, 1976 applicable to the contract for sale entered into by and between the plaintiff and the defendant on 14th June, 1975?

Is the plaintiff entitled to get the specific performance of the agreement for sale as prayed for?

To what other relief, if any, is the plaintiff entitled?

Issue No. 1 : On behalf of the defendant, it is urged that this is a suit for "Land" and the land being situated at municipal premises No. 15C Sil Lane, Calcutta P.S. Entally which is outside the jurisdiction of the original Side of High Court, Calcutta, the High Court cannot entertain the jurisdiction to decide this suit which though garbed in the nature of the suit for specific performance of Contract in substance seeks relief in respect of the land situated outside the jurisdiction of this Court and consequently the court cannot decide this suit. In support several decisions of the Calcutta High Court reported in Hindusthan Gas and Industries Ltd. and Another Vs. Adhish Chandra Sinha, , Tridandeeswami Bhakti Kusum Sraman Maharaj and Others Vs. Mayapore Sree Chaitanya Math and Others, and Macneill and Magor Ltd. and Another Vs. Mouhsen Ali and Another, have been cited.

On behalf of the plaintiff it is, however, urged that this is a suit for declaration and mandatory injunction and in substance a suit for Specific Performance of Contract simpliciter. It is also urged that the defendant received the full consideration money on execution of the agreement for sale with the plaintiff demarcated the land in presence of the plaintiff and handed over possession of the suit property and only formalities for execution of the Deed of Conveyance remained and as the defendant failed and/or neglected to execute the Deed of Conveyance, the plaintiff has been obliged to file the suit for the said relief for enforcing the agreement for sale and calling upon the defendant to execute the Deed of Conveyance and in default by the defendant to do so for the Registrar of this Court to execute the Deed of Conveyance in terms of the decree to be passed in this suit. It is, therefore, urged that as he is in possession, he does not seek any relief of the possession of the land and such a suit being a suit for Specific Performance of Contract simpliciter is not a suit for land and when the agreement for sale has been executed at the office of the defendant at 41 Free School Street, Calcutta, which is within the jurisdiction of the court, this Court has jurisdiction to entertain the present suit and the contention of the defendant should not be accepted.

In support, a decision of Calcutta High Court reported in Debendra Nath Chowdhury Vs. Southern Bank Ltd., , has been cited in which a Division Bench of this Court has held that a suit for specific performance of contract can be filed in the original side of the High Court. If the contract is executed within the jurisdiction of this Court even if the land is situated outside its jurisdiction.

I have carefully considered the decisions cited by-the Learned Advocate for the plaintiff. None of these decisions relates to any suit for Specific Performance of Contract. In all these suit, directly and indirectly relief in respect of the land was sought for. Consequently in those decisions it was held that the suits being in substance suits for land, the original side of this Court cannot have any jurisdiction when the land is situated outside the jurisdiction of this Court. But on perusing the decision of the Division Bench reported in Debendra Nath Chowdhury Vs. Southern Bank Ltd., , I am of the view that the Division Bench of this Court has clearly held that a suit for Specific Performance of Contract can be filed within the jurisdiction of this Court if the contract is executed within the jurisdiction but in respect of the land situated outside the jurisdiction. The present suit is also a suit for Specific Performance of Contract simpliciter. The agreement was>executed within the jurisdiction of this Court. Therefore, even though the property is situated outside the jurisdiction of this Court, this Court can entertain and dispose of this suit. The Issue No. 1 is, therefore, answered in the affirmative.

Issue Nos. 2 to 5 : All these issues being inter-connected are taken up together for reasons of convenience. The defendant has raised a plea that even though he executed the agreement for sale with the plaintiff and with many other persons in respect of the entire plots situated at 15C, Sil Lane, Calcutta and also in respect of surrounding lands in the area in terms of the Building Scheme adopted by the defendant, the defendant could not complete the sale transaction as in the meantime the Urban Land (Ceiling and Regulation) Act, 1976 has come into force w.e.f. 17th Feb. 1976 and the defendant being holders of excess vacant land submitted return with the Land Ceiling Authority and applied for exemption u/s 20 of the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as the said Act) for exemption of such vacant land from the purview of the said Act, but the State Government has refused to grant the exemption and consequently the agreement has been rendered void and the plaintiff cannot seek the relief for Specific Performance of Contract for sale of such land. It is also contended that the defendant did not have any mala fide motive and the agreement having been rendered void, the present contract stood frustrated and cancelled and no question of granting any relief by way of declaration and/or mandatory injunction arises.

On behalf of the plaintiff, it is contended that as the agreement for sale was executed prior to the date when the said Act came into force, then the provisions of the said Act are not attracted to the agreement for sale entered into between the plaintiff and the defendant, that in respect of some other land of the defendant, in respect of the Land Development Scheme, Mrs. Manjula Bose, J. of this Court granted one Baren Das, a decree for specific performance of contract and the provisions of the said Act are not attracted, when the court ordered the defendant to execute the deed of conveyance. It is also submitted that when the permission for sale was made by the defendant and 60 days has passed after such application for permission and the Urban Land Ceiling Authority did not exercise the option for purchase of land itself, then the permission for sale of the land must be deemed to have been granted by the Urban Land Ceiling Authority and this Court can grant necessary relief for Specific Performance of Contract of such sale which agreement was executed bona fide by the plaintiff prior to the date on which the said Act has come into force and for which the whole consideration money has been paid and the possession has been delivered.

I have carefully perused the provisions of the Urban Land (Ceiling and Regulation) Act, 1976. There is nothing in the said Act to exclude any prior agreement for sale entered into between the owner of excess vacant land and another from the purview of the Act. An agreement for sale does not create any interest in the land. So the plaintiff did not acquire any interest in the land prior to the said Act. On the contrary, Section 3 has clearly laid down that on and from the commencement of the said Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies. The ceiling limit has been prescribed in Section 4 of the Act. It is an undisputed position that the original defendant which was a limited company was holding on the date, on which this Act has come into force, i.e. on 17th Feb. 1976, land in excess of the Ceiling limit. The defendant has stated that before the sale transaction, in terms of the agreement dated 14th June, 1975, between the defendant company and the plaintiff could be completed, the Urban Land (Ceiling & Regulation) Act, 1976 came into force w.e.f. 17th Feb. 1976 and the provisions thereof became applicable to the defendant. The defendant has also disclosed that he filed a return on or before 17th July, 1986 u/s (l) of the said Act and also applied for exemption u/s 20 of the said Act, and the permission was sought by the defendant from the competent authority to complete the sale and/or convey the plot of land to the plaintiff and to others. But in spite of the said return filed by the defendant to the authorities, no exemption as such was granted by the said authorities as a consequence whereof said sale could not be completed. u/s 6 of the said Act, a person holding vacant land in excess of the ceiling limits at the commencement of the Act has to file a return in the prescribed form. The land ceiling authority, in view of the mandatory provisions of the said Act, on giving proper opportunity of hearing to all persons concerned have the right to declare u/s 10 of the said Act that the excess land of the owner was with effect from such date as may be specified in the declaration to be deemed to have been acquired by the State Government and upon the publication of such declaration such land shall be deemed to have vested absolutely in the State Government free from all encumbrances with effect from the date so specified. It is true that there is no such evidence before this Court as to whether all these formalities have been complied with or whether the excess land including the land agreed to be sold by the defendant to the plaintiff has been declared to be acquired to the State or not under the provisions of Section 10 of the Act. But what has been disclosed from the documents exhibited before this Court is that in respect of the land and other lands for which the defendant entered into agreements for sale with the plaintiff and other persons, exemption was asked for u/s 20 of the said Act, first on 10th August 1976 and again on 17th June, 1982 and on 14th October 1982 by the defendant in respect of the premises No. 10 Atul Sur Road, 19/1 Sil Lane and 19C Sil Lane for the purpose of Group Housing Scheme. The Government of West Bengal, Land and Land Reforms Department, Urban Land Ceiling Branch, by the letter issued by the Deputy Secretary dated 26th July, 1983, refused to grant such exemption finally. It has been indicated in the said letter that the application dated 10th August, 1976 of the defendant in respect of 672.24 sq. mtrs. of vacant land of premises No. 19A Sil Lane and 1358 Sq. mtr. of vacant land at premises No. 15C Sil Lane, where exemption was sought for the purpose of sale of the land to seven prospective buyers, had earlier been rejected by the letter No. 3776-UL dated 20th May, 1980. The said land has again been included in the subsequent applications dated 7th June, 1982 and 14th October, 1982. "By that letter of these applications for exemption of land from the provision of the said Act filed u/s 20 of the said Act have been rejected. So, the defendant has failed to obtain the necessary exemption in respect of the suit land u/s 20 of the Land (Ceiling and Regulation) Act, 1976 and in respect of the excess vacant land, the defendant did not have any authority to complete the said transaction until and unless the land in question can be exempted from the provisions of the said Act by the State Government. As the State Government has refused to grant such exemption, the agreement in view of the clear provisions of Section 56 of the Indian Contract Act has been rendered void and the defendant has no obligation to perform such contract. The relevant provisions of Section 56 read as follows:

A contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

The Supreme Court has held in Boothalinga Agencies Vs. V.T.C. Poriaswami Nadar, that when subsequent change of law makes a performance impossible, the contract is void. From the discussions as in the above, it is clear that because of subsequent change of law, namely, the coming into force of the Urban Land (Ceiling and Regulation) Act, 1976, the defendant who is the owner of excess vacant land is unable to complete the sale transaction in respect of any portion of the excess vacant land until and unless he gets exemption from the State Government u/s 20 for the said excess land from the purview of the said Act. The defendant not having obtained such exemption cannot complete such sale transaction. So the performance of contract of sale in view of the provision of the said Act has become impossible as well as unlawful. So, the agreement for sale has been rendered void in view of the clear provision of Section 56 of the Indian Contract Act.

In the circumstances, I am of the view that the plaintiff is not entitled to seek any relief by a Specific Performance of Contract in respect of the agreement for sale entered into between the plaintiff and the original defendant dated 14th June, 1975.

Thus, the issue Nos. 2 and 3 are answered in the affirmative and Issue Nos. 4 and 5 in the negative. The suit is, therefore, dismissed with costs.