M. Seetharama Murti, J. - (1.)THIS Second Appeal under Section 100 of the Code of Civil Procedure (for short, 'the Code') by the unsuccessful plaintiff is directed against the judgment and decree dated 28.01.2004 of the learned IX Additional District Judge (Judge, Fast Track Court), Visakhapatnam in A.S. No. 137 of 2000. The learned Additional District Judge while dismissing the said Appeal had confirmed the judgment and decree dated 05.06.2000 passed by the learned II Additional Junior Civil Judge, Visakhapatnam in O.S. No. 936 of 1996. At the time of admission of the Second Appeal, this Court having regard to the grounds (a) to (c) mentioned in the grounds of objection had formulated the following substantial questions of law:
"(1) Whether the respondent herein can cancel the Ex. A -6 allotment letter dated earlier than that of Ex. A -4 sale deed without seeking cancellation of Ex. A -4 sale deed in a civil court?

(2) Whether the judgment of the courts below is perverse in holding that Ex. A -4 sale deed can be cancelled by the respondent herein by an executive order without seeking cancellation of the same from a competent civil court?

(3) Whether imposition of condition in a sale deed is contrary to the provisions of the Transfer of Property Act and the Contract Act? [Reproduced verbatim]"

(2.)I have heard the submissions of the learned counsel for both the sides. I have perused the material record.
To adjudicate the lis and answer the substantial questions of law, it is necessary to first refer to, in brief, the respective cases pleaded by the parties.

(3.)(a) The case of the plaintiff may be stated, in brief, is as follows: "The plaintiff had applied on 25.03.1981 to the Visakhapatnam Urban Development Authority ('the VUDA', for brevity) for allotment of a house site. On accepting the request of the plaintiff, an allotment letter dated 16.10.1984 was issued allotting the site in an extent of 325 square yards in MIG 290 of Madhavadhara layout covered by Survey No. 14 within Visakhapatnam Municipal Corporation limits, which is more fully described in the schedule annexed to the plaint. Thereafter, the plaintiff had paid the entire consideration to the VUDA. On that, the VUDA had submitted on 20.11.1987, the duly executed sale deed before the Sub Registrar concerned for registration. However, the registration of the said document was kept pending for want of fixation of stamp duty charges payable on the transaction by the Government. The sale deed, the registration of which was kept pending, was finally registered on 27.04.1996 on receipt of the stamp duty payable on the said sale deed. After such registration, the sale deed was released to the plaintiff. The plaintiff had thus purchased the schedule site from the VUDA. The plaintiff, who was employed and was residing in Madhya Pradesh, has no site in Visakhapatnam or anywhere else and had intended to construct a house and settle down at Visakhapatnam and never had an intention to sell away the assigned plot to make profit. As the plaintiff had no financial sources, he did not construct a building either by borrowing a loan from his employer or other financial institutions. While so, the plaintiff had received a letter dated nil. 10.1994 cancelling the allotment and forfeiting the registration fee and 50% of the amount paid towards the land cost. No notice was given prior to the issuance of such letter of cancellation and no opportunity of hearing was also given to explain as to why the plaintiff could not construct a building in the allotted site. Therefore, the plaintiff had made a number of representations to withdraw the letter/order of cancellation and the same are of no avail. The plaintiff had also received a cheque for 1 14,439.50ps dated 15.03.1996 along with the covering letter dated 21.03.1996 informing that the plot sold to the plaintiff was allotted in a public auction to a third party and that the cheque was being sent towards the amount refundable to the plaintiff consequent upon the cancellation of the allotment of the plot. The said cancellation of the plot allotted to the plaintiff is illegal, arbitrary and beyond the powers of the defendant authority for the following reasons: 'The VUDA has never made known the terms in conditions of the sale deed to the plaintiff either prior to the submission of the application or at the time of the allotment or at the time of execution of the sale deed; Since the sale deed was released to the plaintiff on 27.04.1996, there was no opportunity to the plaintiff to know the terms and conditions of the sale deed; The sale in favour of the plaintiff is absolute in nature and cancellation of such a sale deed can only be made by following the due process of law but not by an executive order; the allotment made in favour of the plaintiff was confirmed by execution of a sale deed and hence, mere cancellation of the allotment without the cancellation of the sale deed is bad in law; the cancellation of a registered sale deed can only be done by following the legal process but not by his administrative order that too by the Vice Chairman of the VUDA, who is not empowered under law to cancel the sale deed executed by and on behalf of the VUDA; the possession and enjoyment of the plaintiff over the schedule plot are not disturbed; the plaintiff is continuing in possession and enjoyment of the property; as per the terms and conditions of the sale deed the VUDA is entitled to cancel the sale deed/sale in default of the compliance of the terms and conditions and is entitled to repay the sale price after adjusting the cancellation charges; however, the VUDA had illegally retained 50% of the sale price arbitrarily; the unilateral cancellation of the sale deed was done in violation of law and such cancellation of registered sale deed is neither recognised by the provisions of the Indian Registration Act nor any other law in force; a conditional sale deed with right to cancel is in violation of law and is hit by Section 23 of the Indian Contract Act; the Board of the VUDA by its resolution dated 10.07.1995 had clearly and categorically revoked the cancellation orders earlier made giving two years time for construction of the building; However, for reasons best known to the officers of the VUDA, the sale price with 50% deduction was refunded to the plaintiff by violating the orders of the Board of the VUDA, which is the supreme authority; the plaintiff is having title over the suit schedule site and the selling of the same to another person by VUDA without cancelling the registered sale deed would result in unnecessary litigation.' Hence, the suit is filed for declaration that the cancellation of allotment by order dated nil. 10.1994 and consequent refund of the amount by cheque dated 15.03.1996 to the plaintiff as illegal, arbitrary and capricious and for a consequential mandatory injunction directing the VUDA to cancel the allotment of plot (schedule plot), if any, made to the third parties."
4. (b) In the defence, while admitting the allotment of plot and the execution of the sale deed and the presentation of the same before the Sub Registrar, Visakhapatnam for registration, and further stating that it is for the plaintiff to bear the stamp duty and registration charges and that the VUDA has nothing to do with the payment of the same and that at the instance of the plaintiff the sale deed was executed on 20.11.1987 in his favour in respect of the schedule site at his expenditure and that the VUDA has no role to play in the matter of delay in the actual registration and release of the document by the registering authority on account of the dispute regarding market value of the property and that it is for the plaintiff to sort out the dispute, if any, in that regard, the VUDA had contended inter alia as follows: - -"The plaintiff is not entitled to the suit claims. The suit is liable to be dismissed. The schedule plot was allotted to the plaintiff in the year 1984. The VUDA had taken up the task of Integrated Urban Development Programme; and as a part of the said programme the VUDA and its predecessor i.e., the Town Planning Trust of Visakhapatnam had acquired lands in and around Visakhapatnam for the public purpose of providing house sites and to see that the house construction activity is taken up on a large scale. The object of acquiring the lands, laying out the same and allotting sites to the members of the public is intended to encourage speedy development and the growth of the areas in which construction of large number of houses is vital and indispensable. Thus, the house sites were allotted to the public for immediate purpose of constructing houses; and the plots were allotted only to those who were eager to construct houses and it was thought fit to discourage persons who want to keep the house sites only either for speculative gain or in anticipation of remote necessity such as a future asset, for appreciation of value or for leaving it as a legacy for the offerings. That is precisely the reason for imposing a condition in regard to construction of houses within a period of two years of allotment and also a condition against transfer of the site allotted until expiry of five years after such construction. And, such conditions are invariably incorporated in the sale deeds so as to achieve the above mentioned object, which is intended for larger public interest. The conditions imposed are all valid, binding and enforceable. The plaintiff had also signed the sale deed in token of acceptance of conditions contained in the sale deed and the plaintiff is obliged to construct the house. In the sale deed the consequences of non compliance thereof were clearly indicated. After completely understanding the same the plaintiff had signed on the sale deed and the same was submitted for registration and therefore, the contentions to the contra that the plaintiff is not made known the conditions of the sale deed as stated in the plaint are all false. The plaintiff is also aware of the allotment conditions which were reiterated in the sale deed. Despite several reminders, the plaintiff did not commence the construction of a building in the schedule site and hence, show cause notices were issued to him requiring him to show cause as to why the allotment shall not be cancelled. But, the plaintiff had paid a deaf ear and therefore, the VUDA was constrained to take action and accordingly, the allotment was cancelled and the same was intimated to the plaintiff; and subsequently a cancellation deed dated 25.04.1996 was also executed by the defendant and was submitted for registration. Hence, under facts and in law the plaintiff cannot take exception. The schedule site along with some other sites, which were covered by similar cancellation orders for non -construction of buildings by the respective allottees, were advertised in a newspaper for auction through sealed quotation -cum -auction basis scheduled to be held on 30.10.1994 and 31.10.1994 and the schedule plot was allotted to one D.V.C. Reddy in such auction held on 30.10.1994 and the said allottee had paid the cost of the said plot to the VUDA and he is lawfully entitled to the said plot and the plaintiff had ceased to have any right or interest in the schedule plot. The said person is a necessary party to the suit. The cancellation of the allotment and the execution of cancellation deed were all done in accordance with the law and there is nothing illegal; and the objections for the cancellation alleged in the plaint are misconceived. The plaintiff is guilty of default, delay and laches on his part and had failed to comply with the terms and conditions of the allotment and in the sale deed, despite an adequate opportunity that was afforded to him by the VUDA. The plaintiff is estopped by his conduct from claiming shelter under self -invited complication and the Vice Chairman, VUDA is amply empowered to cancel the allotment and execute a cancellation deed. The plaintiff is in enjoyment and possession of the schedule plot and that he was not dispossessed is denied. The possession was resumed by the VUDA and it is with the VUDA. The contention that the VUDA is liable to refund the entire sale consideration and that the retention of 50% of the sale price is illegal and that the same is retained arbitrarily, is false and denied. The VUDA is entitled to forfeit the entire deposit amount of f 500/ - and 50% of the cost of the site. Unilateral cancellation of the sale deed is perfectly valid under facts and in law. The cancellation is not hit by the provisions of law under the Indian Contract Act as alleged by the plaintiff. Initially a resolution dated 10.07.1995 was passed by the Board recommending grant of two years time to the original allottees by requesting the subsequent purchasers to accept the refund of money or choose an odd bit available with the VUDA, but the subsequent purchasers did not accept the said proposal. After obtaining legal opinion, the matter was again placed before the Board and by resolution dated 12.02.1996 the Board has taken an amendment to the resolution dated 10.07.1995 and had ordered for registration of the sites to the eight new allottees whose allotments were not covered by any Court cases or stay orders. The schedule site fell in that category and therefore, the new allottee, D.V.C. Reddy, alone is lawfully entitled to the schedule site. The rights of the third party cannot be disturbed. The plaintiff ought to have valued the suit on the basis of the market value as he was out of possession."

4. (c) Taking into consideration the above pleadings, the trial Court had framed the following issues.

"1. Whether the defendant is entitled to cancel the allotment of plot made in favour of the plaintiff?

2. Whether the suit is bad for non -joinder of necessary parties?

3. Whether this court is having no pecuniary jurisdiction?

4. Whether the plaintiff is entitled for the declaration as prayed for?