)) IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 1164 of 1992 with CIVIL APPLICATION NO.3721 OF 1996 For Approval and Signature: Hon'ble MR. JUSTICE M.R. CALLA and MISS JUSTICE R.M.DOSHIT ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgement? - YES 2. To be referred to the Reporter or not? - YES 3. Whether Their Lordships wish to see the fair copy of the judgement? - NO 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? - NO 5. Whether it is to be circulated to the Civil Judge? - NO -------------------------------------------------------------- HER HIGHNESS MAHARANI SHANTADEVI Versus SAVJIBHAI H PATEL -------------------------------------------------------------- Appearance: Mr.S.B.Vakil, seniour counsel, with Mr.P.M.Amin, Mr.K.R.Modi and Mr.A.C.Gandhi for the appellant. Mr.D.R.Dhanuka, senior counsel, with Mr.S.J.Shah, Mr.Prashant G.Desai, Mr.H.M.Parikh, Mr.M.C.Bhatt, Mr. B.H.Antia Advocates and Mr.Manek Kalyaniwala, Solicitor for respondent No.1. Mr.J.M.Thakore, learned Advocate General, with Mr.K.C.Shah, learned A.G.P. and Mr.L.R.Pujari, learned A.G.P.for respondents Nos.2 to 4. ------------------------------------------------------------- CORAM : MR.JUSTICE M.R.CALLA and MISS JUSTICE R.M. DOSHIT Date of decision: 15/06/1998 JUDGEMENT (Per M.R.Calla,J) 1. The facts of this case depict a lis between an Ex Ruler turned politician on one side and a builder developer - organizer on the other side who joined hands at the beginning apparently showing concern for the members of the weaker sections of the society through a highly ambitious project of raising 64306 dwelling units in the city of Baroda as a joint venture to implement and farther the 20 point programme of the then Prime Minister Mrs. Indira Gandhi. One was prepared to give the land which he was even otherwise likely to part with as an excess land under the Urban Land (Ceiling and Regulation) Act,1976 and the other offered his efforts, resources and initial expenditure for getting the scheme approved under S.21 of the above referred Ceiling Act, ofcourse not without any profit motive. 2. This is the defendant's first appeal under S.96 of the C.P.C. against the judgment and decree dt.12.3.92 passed by the learned 2nd Joint Civil Judge (S.D.), Baroda decreeing the Special Civil Suit No.70/80 with costs. The questions involved in this Appeal mainly hinge around the provisions of the Specific Relief Act, 1963, Urban Land (Ceiling & Regulation) Act, 1976 and Urban Land (Ceiling and Regulations) Rules 1976and the relevant notifications and guidelines issued thereunder, the Bombay Town Planning Act,1954, the Gujarat Town Planning & Urban Development Act, 1976, the Indian Contract Act, 1872, the Indian Evidence Act, 1872 and the Civil Procedure Code 1908. 3. Briefly stated the relevant facts of this case are as under: I. Shrimant Fatesinh Rao P.Gaikwad ( Maharaja) Ex-Ruler of Baroda owned an immovable property popularly known as Laxmi Vilas Palace Estate situated in the city of Baroda admeasuring about 707 Acres of land bearing S.No.1 of Tika No.9C and 10C of Baroda Taluka and District Baroda.This property is situated within the limits of Baroda Municipal Corporation. II. The Municipal Corporation,Baroda had prepared a development plan in respect of the lands within its jurisdiction under the provisions of Bombay Town Planning Act, 1954 , invited objections against the same and after considering the objections submitted the said development plan for sanction of the Government of Gujarat. III. The Govt of Gujarat issued a Notification dt.21.9.70 under S.10(1) of the Bomaby Town Planning Act, 1954, finalising the modification in the said development plan for the city of Baroda subject to modifications so finalised. The date 1.12.70 was specified as the date on which final development plan was to come into force. According to the development plan the part of the Laxmi Vilas Palace Estate or compound was under reservation for three purposes in three parts - (a) agriculture subsequently altered to recreation, (b) sports stadium and (c) bus terminus. The remaining part of the estate or compound was designated for residential use. The City Survey map shows that in Tika No.8/1C there is a jail and Tika No.8/2C is to the north of Tika No.8/1 IV. The Govt. of Gujarat then issued a Notification dt.17.5.75 under S.10A (1) of the Bombay Town Planning Act 1954 proposing to modify the aforesaid development plan dt.21.9.70. The variations included at item No.23 is the land of Laxmi Vilas Palace shown as "residential zone" in the sanctioned development plan of Baroda to be released from the said use and the land so released to be reserved for "open space" under S.7(b) of the Act. as per the accompanying plan; itemNo.24(1) the lands under reservation of "bus terminus No.4" towards the west of Rajmahal in the sanctioned development plan of Baroda to be released from the said reservation and the land thus released to be designated for "residential use" under S.7(a) of the Act as shown in the accompanying plan and item No.24(2) the lands marked as "W", "X", "Y", "Z" in the accompanying plan designated for "residential use" in the sanctioned development plan of Baroda to be released from the said use and the land thus released shall be released for "bus terminus No.4" under S.7(b)of the act as shown in the accompanying plan. V. The Urban Land (Ceiling and Regulation) Act, 1976 was published in the Gazette of India dt.17.2.76, which will be hereinafter referred to as 'the Ceiling Act'. The Gujarat Town Planning and Development Act,1976 was enacted on 19.6.76. VI. As required under the Ceiling Act which came into force on 17.2.76 and as it became applicable to the State of Gujarat every owner of the vacant land, as defined in the said Act, was required under S.6 of the said Act to make a declaration as to the vacant land held in excess of the ceiling limit prescribed therein. Accordingly, on or about 14.9.76 Shrimant Fatesinh Rao P.Gaikwad made a declaration for an area admeasuring about 250 acres out of the said immovable property and it was declared by him as excess vacant land. In this declaration made under S.6(1) of the said Act, he indicated that exemption was being sought in respect of the said vacant land. VII. On or about 11.11.76 Shri F.P.Gaikwad moved an application for exemption under S.20 of the said Act. VIII. It appears that at this juncture Shri Savjibhai Haribhai Patel, a main partner of builders and organizers of M/s. Ashok Associates and Shrimant F.P.Gaikwad met and discussed about a Scheme for construction of dwelling units for the accommodation of the weaker section of the society to be presented for consideration under S.21 of the Ceiling Act. They arrived at some understanding and accordingly Savjibhai Haribhai Patel after some spade work and after entering into correspondence with certain financial Institutions conceived and prepared the Scheme for constructing 64306 dwelling units for members of the weaker section of the society estimating a cost of nearly 89 crores 3 lacks and 88 thousand rupees and the Draft Scheme was submitted to Shrimant F.P.Gaikwad for his own scrutiny. IX. On 15.3.77 the Scheme with Plan and a Vakalatnama of one Shri Kureshi Advocate under signatures of Shri F.P Gaikwad were submitted for consideration under S.21 of the Act. X. On 24.3.77 the memorandum of agreement which will be hereinafter referred to as 'MOA" was executed between Shri F.P.Gaikwad as "the owner" of the first part and Said Shri Savjibhai Haribhai Patel as "the licensee" of the second part. This MOA refers to the owners property popularly known as Laxmi Vilas Palace Estate, situate in the city of Baroda admeasuring about 707 Acres of land bearing S.No.1 of City, Tika No.9C and 10C of Taluka and District Baroda mentioning further that the licensee of the second part had evolved a Scheme for the construction of dwelling units for the accommodation of the weaker section of the society as envisaged by S.21(1) of the Ceiling Act on a portion of land of owner's property; i.e. property popularly known as Laxmi Vilas Palace Estate, save and except Laxmi Vilas Palace, Motibaug Palace and Nazar Baug Palace to be referred to as "the said property" ( which expression shall include standing structures, pucca as well as kutcha, and all natural growths thereon and all trees ad plants etc.) and the parties agreed to 19 terms in all, as set out in this MOA at No.1 to 19, and this MOA was signed by Shri F.P.Gaikwad and Shri S.H.Patel. XI. On this very date i.e. 24.3.77 Shri F.P.Gaikwad also executed a Power of Attorney (which will be hereinafter referred to as "POA") in favour of Shri S.H.Patel to be his true and lawful Attorney and to do and caused to be done on his behalf all or any of the acts, deeds, matters and things detailed out at Items Nos.1 to 13 of this POA duly signed and delivered by Shri F.P.Gaikwad. XII. Acting under this Memorandum of Agreement and representing Shri F.P.Gaikwad under this POA the Scheme which had been earlier submitted on 15.3.77 ( when there were no guidelines) was revised on 5.10.77 in view of the first guidelines which were issued on 1.10.77 pending the finalization of the guidelines by the Central Government. XIII. On 19.12.77 Central Government finalised the guidelines and, therefore, another Scheme dt.6.2.78 was submitted. Town planning notification dt.16.1.78 was to be effective from 15.3.78 with regard to the change from residential to open space. This was also kept inview in the scheme dated 6.2.78. XIV. On 10.2.78 an affidavit-cum-declaration was sworn in by Shri F.P.Gaikwad before the Chief Judicial Magistrate, Baroda which will be hereinafter referred to as "ACD" XV. On 14.3.78 the competent authority under the ceiling Act issued notices for the date 22.3.78 to Shri F.P.Gaikwad as well Shri Savjibhai Haribhai Patel. XVI. On 22.3.78 Shri Ranjitsinh P.Gaikwad the holder of the constituted Power of Attorney of Shri F.P.Gaikwad appeared before the competent authority. He was accompanied by lawyer and he also submitted that the scheme dt.6.2.78 which has been accepted as such by the owner Shri F.P.Gaikwad may be sanctioned. XVII. On 1.4.78 the Government. of Gujarat published the guidelines under the Ceiling Act elaborating the guidelines issued by the Government. of India. XVIII. On 8.1.79 the scheme dt.5.1.79 was submitted and the revised drawing was submitted on 16.1.79 XIX. On 29.1.79 alternative scheme was submitted reducing the number of houses to 4000 only because the authorities considered that the number of houses under the scheme should be reduced keeping in view the practical aspects. This scheme was processed by Municipal Corporation, the Town Planning Dept. and the City Engineer. XX. On 15.11.79 the specified authority under the Ceiling Act accorded its approval to the alternative scheme dt.29.1.79 XXI. On 2.2.80 the Deputy Secretary, Revenue Department of the Government of Gujarat sent the confidential letter to the competent authority and Additional Collector, Urban Land Ceiling as also to the Superintending Engineer, Roads and Buildings with reference to Government letter dt.15.12.78, final confidential letter dt. 19.2.79 of the competent authority and Government letter dt.31.9.79 and the confidential letter dt. 3.12.79 of the competent authority calling upon the competent authority that it should accord sanction to the scheme U/S 21 of the Act immediately and he should not mention confidential instructions of the Government therein. XXII. On 7.2.80 the specified authority sent the letter to the competent authority mentioning therein that the scheme may be approved after scrutinizing the same with reference to the Circular dt.22.5.79 and particularly para 6 thereof. In this letter reference was also made to the Revenue department confidential letter dt.2.2.80 and that the land under reservation for stadium, bus terminus and Akota road cannot be acquired under the Ceiling Act but Shri S.H.Patel had submitted the housing scheme with all the required amenities on Laxmi Vilas Palace Estate ground land admeasuring 2391125 sq.mt. by providing agricultural zone, stadium, bus terminus and road (Akota) which conforms with the development plan of Baroda city and that since it is a satellite township request was made to the competent authority to exempt this 2391125 sq.mts. of land declared in Form No.5 for the purpose of S.21(1) of the Ceiling Act. The plans duly signed by the architect and specified authority were also enclosed therewith. XXIII. It appears that at this juncture Shri F.P.Gaikwad became non desirous of proceeding with the scheme and on 23.2.80 sent his advocate's letter to Shri S.H.Patel stating therein that MOA dt.24.3.77, the irrevocable power of attorney dt.24.3.77 and ACD 10.2.78 were void, illegal and inoperative in law so as to cancel or revoke the said agreement and irrevocable power of attorney. An advertisement to this effect was also issued in newspapers. This was followed by letter dt.25.2.80 to the competent authority by the advocate of Shri F.P.Gaikwad requesting him not to proceed further with any applications in respect of his property under S.21, whether pending or which may be made in future by Shri S.H.Patel, who had no authority to act on behalf of Shri F.P.Gaikwad. XXIV. Shri S.H.Patel through his advocate's letters dt.4.3.80 and dt.3.4.80 refuted the allegations contained in the letter dt.23.2.80 which had been sent by the advocate of Shri F.P.Gaikwad and called upon Shri F.P.Gaikwad to withdraw the letter dt.23.2.80. XXV. On 7.4.80 the present Civil Suit being Special Civil Suit No.70/80 was filed in the Court of Civil Judge (S.D.) at Baroda by Shri Savjibhai H.Patel (who will be hereinafter referred to as "the plaintiff respondent) seeking the specific performance of the agreement, the injunction and interim and ad interim reliefs etc. The exact reliefs claimed in the plaint are at items Nos.(a) to (j) under para 35 of the plaint. In this plaint, as it was filed on 7.4.80, Shri F.P.Gaikwad was the sole defendant. Later on the specified authority, the competent authority and the State of Gujarat were impleaded as defendant Nos.2, 3 and 4. During the pendency of the suit, Shri F.P.Gaikwad expired on 1.9.88 and,therefore, while keeping his name as such as defendant No.1,his legal representative her Highness Maharani Shantadevi P.Gaikwad was arrayed as defendant No.1/1. XXVI. On 14.7.80 the written statement dt.12.7.80 had been filed on behalf of Shri F.P.Gaikwad under the signatures of his constituted attorney Shri R.P.Gaikwad. XXVII. Thereafter, the supplementary written statement dated 20.4.85 appears to have been filed on 24.6.85 by the defendant Shri F.P.Gaikwad. XXVIII. On 19.12.85 the written statement was filed on behalf of defendants Nos.2 to 4 i.e. specified authority, competent authority and State of Gujarat. XXIX. On 30.6.89 the written statement was filed on behalf of defendant no.1/1 i.e. Her Highness Maharani Shantadevi. XXX. On 21.4.90 amended written statement was filed on behalf of defendant No.1/1/ Her Highness Maharani Shantadevi. XXXI. On the basis of the pleadings of the parties the following 25 issues were framed vide Exh.235 dt.30.4.90. 1. Whether deft.No.1/1 proves that the Memorandum of Agreement and/or Power of Attorney and/or declaration deed 10.2.1978 is illegal, null and void and not binding on the parties thereto for the reason stated in para 2 (xiv) executed by deft.no.1 is not valid and not binding on the original deft.no.1? 2. Whether deft.No.1/1 proves that the Memorandum of Agreement read with irrevocable power of attorney or declaration is vague, uncertain and unmeaningful and/or meaning thereof is capable of being accepted on the grounds stated in para 2 (xii) of the written statement? 3. Whether deft.no.1/1 proves that Cl.17 of the Memorandum of Agreement expressly and/or impliedly refers a right of the parties inclusive of original deft.no.1 to unilaterally rescind the said agreement at any time before the plaintiff was put in the possession of the said property as contended in para 2(xiii) of written statement? 4. If yes, whether rescission of the agreement is legal and valid? 5. Whether deft.no.1/1 proves that the declaration deed dated 10.2.1978 by original deft.no.1 was made in ignorance facts as alleged in para 2(x) of written statement Ex.46? 6. Whether deft.No.1/1 proves that the agreement Ex.4/1 is unlawful or contrary to the provision of Sec.26 and 27 of Urban Land (Ceiling and Regulation ) Act, 1976 as contended in para (xvi) of the written statement Ex.46? 7. Is it proved that in view of the Urban Land (Ceiling and Regulation) Act, 1976 schemes submitted by the plaintiff before the authorities under Urban Land (Ceiling and Regulation) Act, 1976 and action taken thereon by the authorities are legal? 8. If yes, does deft.no.1/1 proves that the scheme submitted before the authorities were ineffective and not binding on the deft. as contended in para 2(xi)(1)? 9. Does first deft. proves that there is no concluded or enforceable agreement arrived in between the parties as contended in para 2(xii) of the written statement? 10. Was the original first deft. entitle to rescind and/or termination and/or revoked the suit memorandum of agreement and/or suit power of attorney and/or declaration dated 10.2.1978 as contended in para 2 of the written statement? 11. Whether original first deft. is estopped from rescinding agreement and/or raising contention against the scheme submitted by the plaintiff under the irrevocable power of attorney Ex.4/2? 12. Whether deft.no.1 proves that 2nd, 3rd and 4th deft. have acted beyond their powers and illegally in receiving letters dated 15.11.1979, 5.2.1980 and 2.2.1980 as per para 6 of the written statement Ex.46 and as contended in para 18 of supplementary written statement Ex.127? 13. Whether plaintiff proves that he has paid about Rs.16,75,000/- for the purpose of execution and/or implementation of the scheme and/or agreement as alleged in plaint para 29? 14. Whether plaintiff proves that he was at all times material and is yet ready and willing to perform as part of the contract as alleged in plaint para 26? 15. Whether alleged Power of Attorney dated 24.3.1977 and/or alleged agency or authority created or conferred by the original deft. no.1 in favour of the plaintiff come to an end or stood revoked and/or is deemed to have come to an end and/or stood revoked on the death of original defendant no.1 as alleged in para 4 of the written statement of deft.no.1/1? 16. Whether the plaintiff is entitled to perpetual injunction as alleged in para 27 of the plaint? 17. Whether plaintiff is entitled to an order directing the original deft.no.1 to withdraw and/or cancel any letter to any authority as alleged in para 26 of the plaint? 18. Whether the plaintiff is entitled to a decree or order directing original deft.no.1 to specifically perform an agreement as alleged in para 26 of the plaint? 19. Whether in view of absence of any relief being claimed against deft.no.1/1 a suit has against the deft. is liable to be dismissed? 20. Whether deft.no.1/1 proves that the plaintiff has no right to modify, alter or revise the agreed scheme? 21. Whether the breach is committed by the plaintiff alleging to the termination of the suit agreement vide letter/notice dated 1.9.1980? 22. Whether the plaintiff is not entitled to decree for specific performance and injunction? 23. Whether the plaintiff is entitled to a decree of specific performance and injunction as prayed in para 35 of the plaint? 24. Whether the plaintiff is not entitled to specific performance as prayed for for the reasons alleged in para 8 of the written statement of the deft.no.1/1? 25. What order and decree? XXXII. On the basis of the trial the judgment was delivered on 12.3.92 by the 2nd Joint Civil Judge (S.D.), Baroda whereby the suit had been decreed. The operative part of the order is as under:- "ORDER The plaintiff's suit is decreed with costs,as prayed for. It is hereby declared that Memorandum of Agreement dated 24.3.1977, irrevocable power of attorney dated 24.3.1977 and affidavit cum declaration dated 10.2.78 are valid and subsisting and those were binding on original deceased deft.no.1 and are binding on deft.no.1/1 also. The Specific performance of Memorandum of agreement dated 24.3.1977 is granted in favour of the plaintiff. The deft.no.1/1 is ordered to specifically perform the Memorandum of agreement dated 24.3.1977. The deft.no.1/1 is restrained by a permanent injunction from committing breach of agreement, irrevocable power of attorney and acting contrary to the said agreement and said power of attorney and representing to competent authority or any other authority that authority of plaintiff to act as a constituted attorney of original deft. No.1 is withdrawn and obstructing the plaintiff from acting as constituted attorney of deft.no.1 for the purpose and period mentioned in the said power of attorney and preventing the plaintiff from taking any action regarding the execution of the scheme under the said agreement and doing any act so as to prejudice the rights of the plaintiff under the said agreement dated 24.3.1977, power of attorney dated 24.3.1977 and affidavit cum declaration dated 10.2.1978 and making any application for revocation or cancellation of the scheme presented or which may be presented by the plaintiff to the competent authority and from selling, mortgaging, exchanging, leasing or assigning the suit property and from creating any charge or interest in favour of any person in respect of suit property. Thus, the deft. no.1/1 is restrained by permanent injunction as prayed for in para 35(d) of the plaint. The deft.no.1/1 is hereby ordered to forthwith withdraw or cancel the letter written by original deft. deceased no.1 to the competent authority or other authority intimating them about the termination of the agreement and irrevocable power of attorney as prayed for in para 35(e) of the plaint. The deft.no.1/1 shall pay the costs of the plaintiff and defendants no.2 to 4. The deft.no.1/1 shall bear her own costs. Decree be drawn accordingly." XXXIII. On 18.6.92 this First Appeal was presented before this Court. 4. Alongwith this First Appeal a Civil Application No.2278/92 was filed seeking the stay of the operation, implementation and execution of the judgment and decree dt.12.3.92. This Appeal alongwith the aforesaid Civil Application came up before the court on 19.6.92 and on 19.6.92 the matter was made to stand over to 6,.7.92 and the order of the stay granted by the trial court was extended up to 7.7.92 and the same was further extended from time to time. On 22.12.92 the Appeal was admitted with an order that hearing be expedited and on this very date the service was waived on behalf of plaintiff-respondent No.1 and while issuing notices as to interim relief to respondents Nos.2,3 and 4 in the Civil Application which were made returnable on 22.1.93, ad interim relief in terms of para 3(A) was granted in the meantime, with the condition that the ad interim relief shall be subject to the condition that the appellant shall maintain status quo as regards the suit property. This interim order was also extended from time to time and on 30.3.93 an order was passed in the Civil Application, that the Civil Application will be heard with the First Appeal which is fixed on 15.4.93 and on this date also the interim relief was ordered to continue till then. On 15.4.93 the interim relief was extended till further orders. In the main Appeal also an order was passed on 30.3.93 fixing the first appeal on 15.4.93 and that record and papers be called for immediately and further that the plaintiff-respondent No.1 may prepare the paper book and the print was dispensed with for the present. The defendant- appellant herein preferred Letters Patent Appeal before the Division Bench being L.P.A.No.198/93 against that part of the order dt.30.3.93 whereby the appeal was fixed for hearing on 15.4.93 and the Division Bench disposed of the L.P.A. fixing the Appeal for final hearing on 17.1.94 before the Division Bench. This order was passed in the Letters Patent Appeal on 22.4.93 and this is how this matter which was so far heard by the single Bench and which was otherwise to be heard by the single Bench, as was fixed for hearing on 15.4.93, came up before the Division Bench as ordered by the Division Bench in the Letters Patent Appeal on 22.4.93. The matter came up before different Division