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of <h1>Supreme Court Affirms Decision: Contingent Contract Unenforceable, Orders Refund and Compensation for Construction Costs.</h1> The SC upheld the Division Bench's decision, dismissing the appeals and confirming the directions for adjusting equities. The contract was deemed ... - Issues Involved:1. Delay in Judicial Process2. Breach of Contract3. Specific Performance of Contract4. Lesser Relief under Section 12(3) of the Specific Relief Act5. Contingent Contract and Court Sanction6. Adjustment of EquitiesDetailed Analysis:1. Delay in Judicial Process:The judgment highlights the detrimental effect of delays in the judicial process, noting that 'delay more often defeats justice invariably adds complications to the already complicated issues involved in cases.' The initial appeal was heard by the Division Bench of the High Court on 22.3.1989 but the judgment was delivered after about five years on 24.1.1994. This delay led to further complications and necessitated a fresh decision by the Division Bench after remand from the Supreme Court.2. Breach of Contract:The vendor entered into an agreement to sell the suit property to the vendee, which was contingent upon obtaining court sanction for the sale. The vendor later rescinded the contract, citing prolonged proceedings and pressing demands from tax authorities. The vendee alleged that the vendor's actions were mala fide, aimed at selling the property to a third party for a higher price. The court found that the vendor's actions were justified due to the pressing need to clear public dues and taxes, and there was no breach of contract.3. Specific Performance of Contract:The learned single judge initially decreed specific performance of the contract to the extent of the vendor's life interest in the property. However, the Division Bench reversed this decision, stating that the contract was contingent on obtaining court sanction, which was not granted. The Division Bench held that the contract was an 'integrated whole' and could not be split into separate agreements for the life interest and the reversionary interest.4. Lesser Relief under Section 12(3) of the Specific Relief Act:The vendee sought lesser relief under Section 12(3) of the Specific Relief Act, requesting specific performance of the vendor's life interest alone. The Division Bench rejected this claim, noting that the contract was indivisible and the lesser relief was claimed conditionally and not at the earliest opportunity. The court emphasized that the reversioners were not parties to the sale agreement and had already executed release deeds in favor of the subsequent vendee.5. Contingent Contract and Court Sanction:The contract was contingent on obtaining court sanction for the sale of the reversionary interest. The Division Bench held that the failure to obtain sanction rendered the contract unenforceable. The court noted that the vendor had applied for sanction and waited for a reasonable period (two years) before rescinding the contract. The vendee's actions, including filing an affidavit restricting the claim to the life interest, contributed to the dismissal of the suit for sanction as infructuous.6. Adjustment of Equities:The Division Bench made directions to adjust the rights and equities between the parties, considering the long pendency of the appeal and the actions taken by both parties. The court directed that the vendee be refunded the full sale consideration and deducted a sum of Rs. 5.5 lakhs from the rental income realized by the vendee due to the subsequent vendee's misconduct. The vendee was also directed to be compensated for the construction cost incurred on the property.Conclusion:The Supreme Court upheld the Division Bench's decision, dismissing the appeals and confirming the directions for adjusting equities. The court emphasized that the contract was contingent and could not be enforced without the required court sanction, and the lesser relief sought by the vendee was not justified under the circumstances. The judgment underscores the importance of timely judicial decisions and the complexities arising from contingent contracts and the need for court sanctions.
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