Dhananjaya Y Chandrachud, J. - (1.) The present appeal is from the judgment of a Division Bench of the High Court of Calcutta[2] . The appellant, who is a builder, instituted a suit for specific performance of a development agreement, against the respondents, who are owners of the premises. The suit was dismissed by the City Civil Court. The High Court dismissed the first appeal.
(2.) The subject matter of the suit for specific performance is a development agreement dated 14 April 1992, entered into by the appellant with the predecessor-in-interest of the respondents (Late Kalidas Sadhu)[3] in respect of premises situated at 243N, Acharya Prafulla Chandra Road, P.S. Burtolla, Kolkata - 700 006. The agreement recites that the owners had approached the appellant for construction of a building on the land and that the following terms, inter alia, were agreed upon by and between the parties: a) The appellant agreed to apply at his own costs and expenses for sanction of the plan of a proposed building complex on 14 cottahs 5 chittacks and 40 square feet, to the Calcutta Municipal Corporation (Clause-1 of the agreement); b) The plan of the building complex would be prepared and submitted by the appellant to the Calcutta Municipal Corporation, after the approval of the respondent (Clause -2 of the agreement); c) The appellant shall deposit with the respondent an amount of Rs. 4,00,000/- without interest which shall be refundable upon the completion of the building (Clause-3 of the agreement); d) If for any reason after the plan is sanctioned or for any act or omission on the part of the appellant, the construction cannot take place, the appellant shall refund the deposit in addition to all costs, charges and expenses incurred by the respondent (Clause-22 of the agreement); e) The respondent shall retain 42% of the total constructed area as 'sole owned' and the balance 58% of the total constructed area shall remain secured for due payment of the construction costs. The total construction cost shall not exceed the value of 58% of the constructed area. The respondent agreed to pay the appellant the costs and expenses along with agreed remuneration upon completion of the construction and if the respondent failed to pay, the appellant was entitled to realise its money by selling 58% of the total constructed area (Clauses - 6, 10 and 11 of the agreement); and f) The respondent was entitled to demand any loss and/or damage suffered by him for any illegal activities of the appellant and the appellant was also entitled to recover damages from the respondent for lapse and negligence, in addition to the right of the parties to claim specific performance (Clause -24 of the agreement).
(3.) The appellant alleged that upon the execution of the agreement, he found that the premises were encumbered and that there were arrears of municipal tax and electricity dues, besides which there were labour and industrial disputes and 'factory closure problems'. The respondent is alleged to have requested the appellant to make payments and assured that he will reimburse him before the sanction of the building plan was obtained. Accordingly, the appellant claims to have made a payment of Rs. 7,03,000/-.;