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Issues: (i) whether the agreement was terminable before possession was delivered and therefore not specifically enforceable; (ii) whether the contract involved continuous obligations requiring supervision and, on the facts, specific performance ought to be refused in the exercise of discretion; (iii) whether the scheme under Section 21 of the Urban Land (Ceiling and Regulation) Act, 1976 had to be tested against the master plan prevailing when the scheme was considered and whether repeal of the Act preserved any enforceable right in the plaintiff.
Issue (i): whether the agreement was terminable before possession was delivered and therefore not specifically enforceable.
Analysis: The agreement and the power of attorney formed part of one transaction and had to be read together. The contract expressly contemplated that possession would be delivered only after the Section 21 declaration and, until that stage was reached, the agreement could be unilaterally rescinded. On its plain language, the contract was not one creating an agency coupled with interest within Section 202 of the Indian Contract Act, 1872. A contract that is determinable in this manner falls within the bar in Section 14(1)(c) of the Specific Relief Act, 1963.
Conclusion: The agreement was terminable before possession and could not be specifically enforced.
Issue (ii): whether the contract involved continuous obligations requiring supervision and, on the facts, specific performance ought to be refused in the exercise of discretion.
Analysis: The contemplated project required preparation, sanction, execution and allotment of dwelling units, all of which involved continuing obligations and repeated oversight. The Court held that such performance could not be supervised effectively by the Court and that, after repeal of the ULC Act, no competent authority remained to supervise performance. Specific performance is discretionary relief under Section 20 of the Specific Relief Act, 1963, and may be refused where enforcement would be inequitable. In the present case, the statutory object could not be achieved, the land use prohibited the intended construction, and enforcement would confer an unwarranted advantage on the plaintiff.
Conclusion: Specific performance was properly refused as continuous supervision was required and enforcement would be inequitable.
Issue (iii): whether the scheme under Section 21 of the Urban Land (Ceiling and Regulation) Act, 1976 had to be tested against the master plan prevailing when the scheme was considered and whether repeal of the Act preserved any enforceable right in the plaintiff.
Analysis: The definition of master plan in the ULC Act is not static. For a Section 21 scheme, the relevant master plan is the one in force when the scheme is taken up for consideration, not the plan existing on the date of commencement of the Act. The earlier view that rights crystallised permanently on 17 February 1976 was rejected as too broad. The Court also held that the saving provision in the repealing legislation did not save a Section 21 scheme where no enforceable right had accrued and where the sanction itself was contrary to the prevailing land-use reservation. Section 6 of the General Clauses Act, 1897 did not assist the plaintiff on these facts.
Conclusion: The prevailing master plan controlled the Section 21 inquiry, and repeal did not preserve any enforceable right in favour of the plaintiff.
Final Conclusion: The decree for specific performance could not stand, the suit was liable to be dismissed, and the challenge to the scheme approval and connected proceedings was determined against the plaintiff.
Ratio Decidendi: A Section 21 ULC scheme must conform to the master plan in force when sanction is considered, and a contract dependent on such a scheme is not specifically enforceable if it is determinable, requires continuous supervision, or enforcement would be inequitable.
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