Specific performance and foreign-exchange restrictions: agreement to sell not void, and statutory permissions did not bar decree.

A suit for specific performance was treated as maintainable after amendment of the plaint, and the plaintiff's continuous readiness and willingness were accepted because notices, telegrams and proof of funds showed performance was pursued. The alleged need for Land and Development Office permission, and any issue under the Urban Land (Ceiling and Regulation) Act, 1976, did not operate as a bar to the decree, as such questions were not conditions precedent and could arise, if at all, at execution. Section 31 of the Foreign Exchange Regulation Act, 1973 did not render the agreement to sell void merely because one vendor was a foreign citizen, since a contract for sale does not itself transfer an interest in land.

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Issues: (i) Whether the suit for specific performance was maintainable and whether the plaintiff was ready and willing to perform his part of the contract, including the effect of the alleged requirement of permission from the Land and Development Office and the Urban Land (Ceiling and Regulation) Act, 1976. (ii) Whether the agreement to sell was void under section 31 of the Foreign Exchange Regulation Act, 1973 because one of the vendors was a foreign citizen.

Issue (i): Whether the suit for specific performance was maintainable and whether the plaintiff was ready and willing to perform his part of the contract, including the effect of the alleged requirement of permission from the Land and Development Office and the Urban Land (Ceiling and Regulation) Act, 1976.

Analysis: After amendment of the plaint, the objection to the form of the suit no longer survived. The plaintiff had pleaded and proved continuous readiness and willingness to perform his obligations, had issued telegrams and notices demanding performance, and had arranged the requisite funds. The defendants failed to establish that delivery of possession depended upon prior permission from the Land and Development Office or that the plaintiff had refused to comply with his contractual obligations. Permission from the Land and Development Office was not a condition precedent to the grant of specific performance, and any question of permission under the Urban Land (Ceiling and Regulation) Act, 1976 could arise, if at all, at the stage of execution. The court also found no merit in the contention that specific performance should be refused on equitable grounds.

Conclusion: The issue was decided in favour of the plaintiff. The plaintiff was held ready and willing to perform the contract, and neither the Urban Land (Ceiling and Regulation) Act, 1976 nor the Land and Development Office permission barred the decree for specific performance.

Issue (ii): Whether the agreement to sell was void under section 31 of the Foreign Exchange Regulation Act, 1973 because one of the vendors was a foreign citizen.

Analysis: The restriction in section 31 of the Foreign Exchange Regulation Act, 1973 was held to regulate transfer and disposal of immovable property and not to invalidate an agreement to sell. A contract for sale does not by itself create any interest in or charge on the property, and any question of Reserve Bank of India permission would arise only at the stage of transfer or execution of the sale deed.

Conclusion: The issue was decided against the defendants. The agreement was not void on this ground and did not prevent specific performance.

Final Conclusion: The plaintiff established entitlement to specific performance, and the defendants' statutory and equitable objections failed.

Ratio Decidendi: Readiness and willingness must be assessed in the sequence of contractual obligations, and statutory permissions that are not conditions precedent to performance do not bar a decree for specific performance; a mere agreement to sell is not void because later governmental permission may be required for transfer.

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