Statutory refusal of permission bars specific performance and limits appellate interference with discretionary relief

An express refusal of statutory permission to sell land under the Urban Land (Ceiling & Regulation) Act could not be ignored or treated as a nullity in a suit for specific performance, especially where the agreement itself contemplated such permission and refund on refusal. A decree for specific performance could not be granted after refusal of permission, and the competent authority's orders could not be collaterally invalidated in that suit. The Court also reiterated that relief under Section 20 of the Specific Relief Act is discretionary and appellate interference is limited; the High Court had reappreciated the matter beyond permissible limits and was not justified in disturbing the refusal of specific performance.

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Issues: (i) whether the orders of the competent authority under the Urban Land (Ceiling & Regulation) Act, 1976 could be ignored or treated as void in a suit for specific performance and whether a decree for specific performance could be granted after refusal of permission to sell; (ii) whether the High Court was justified in interfering with the exercise of discretionary jurisdiction under Section 20 of the Specific Relief Act, 1963.

Issue (i): whether the orders of the competent authority under the Urban Land (Ceiling & Regulation) Act, 1976 could be ignored or treated as void in a suit for specific performance and whether a decree for specific performance could be granted after refusal of permission to sell.

Analysis: The agreement itself contemplated the need for permission from the competent authority and provided for refund if permission was refused. The competent authority had rejected the request for permission to sell, and those orders were neither challenged in the suit nor were the authorities parties to it. Such orders could not be treated as nullities or collaterally invalidated in proceedings for specific performance. A court could, in an appropriate case, decree specific performance subject to sanction, but that principle does not extend to a case where sanction has been expressly refused.

Conclusion: The refusal of permission under the ceiling law could not be disregarded, and the decree for specific performance could not stand.

Issue (ii): whether the High Court was justified in interfering with the exercise of discretionary jurisdiction under Section 20 of the Specific Relief Act, 1963.

Analysis: Relief under Section 20 is discretionary, and appellate interference with such discretion is limited. Relevant factors include subsequent events, frustration of the contract, and the effect of the competent authority's refusal. The court below had declined specific performance on relevant considerations, whereas the Division Bench reappreciated the matter beyond permissible limits and gave undue weight to extraneous factors.

Conclusion: The High Court was not justified in disturbing the refusal of specific performance in exercise of appellate discretion.

Final Conclusion: The impugned judgment was set aside and the decree for specific performance granted by the High Court was reversed, leaving the parties to bear their own costs.

Ratio Decidendi: An express refusal of statutory permission to transfer property cannot be disregarded or invalidated collaterally in a suit for specific performance, and discretionary relief under Section 20 of the Specific Relief Act, 1963 should not be interfered with on appeal unless the discretion is shown to have been exercised arbitrarily or on irrelevant considerations.

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