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Section 11 Of Tp Act Does Not Entitle The Lessor To Breach The Essential Conditions Of The Transfer Agreement: Supreme Court

Megha Nautiyal ,
  09 March 2023       Share Bookmark

Court :
Hon’ble Supreme Court of India
Brief :

Citation :
CIVIL APPEAL NO(S). 572-573 OF 2010


Aman Semiconductors (Pvt.) Ltd. v. Haryana State Industrial Development Corporation Ltd. & Anr.


27 February 2023


Hon’ble Justice Ravindra Bhat and Hon’ble Justice Dipankar Datta


Appellant: Aman Semiconductors (Pvt.) Ltd.

Respondent: Haryana State Industrial Development Corporation Ltd. & Anr.


The Hon’ble Supreme Court (hereinafter referred to as ‘the Court’), dismissed the appeal filed against the impugned judgement of the NCDRC allowing a revision petition filed by the respondent corporation.


Transfer of Property Act, 1882

  • Section 11 - Restriction repugnant to interest created - Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction. Where any such direction has been made in respect of one piece of immovable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof. 
  • Section 31 - Condition that transfer shall cease to have effect in case specified uncertain event happens or does not happen - Subject to the provisions of section 12, on a transfer of property an interest therein may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happen.
  • Section 32 - Such conditions must not be invalid - In order that a condition that an interest shall cease to exist may be valid, it is necessary that the event to which it relates be one which could legally constitute the condition of the creation of an interest.


The appellant, a proprietary concern, had applied for an industrial plot of a proposed project on 28-02-1994 in Industrial State Udyog Vihar, Gurgaon. The respondent corporation, HSIDC, called the appellant’s proprietor, Modi Lal Gupta, and issued him a letter of intent 05-10-1994 indicating certain conditions. 

  • The appellant informed the respondent corporation that the production could not be started in time as there were no basic infrastructure facilities such as electricity, sewerage, telephone and proper road, etc., and requested an extension of time of three months. The appellant continued asking for extension of time on the same grounds for years. 
  • Finally in 1998, the respondents asked the appellant to return the possession of the plot land which was lying vacant due to the fault of the latter. The appellant reached the District Forum, Gurgaon and was given a relief of extended time. 
  • The respondents approached the State Commission against the impugned order of the District Forum. However, the same was dismissed. 
  • Finally, the respondents approached the National Consumer Disputes Redressal Commission (NCDRC) where an order was passed in their favour. 
  • The present appeals are filed by the appellant against the orders of the National Consumer Disputes Redressal Commission (NCDRC), by special leave, wherein thye revision petition filed by the respondent corporation was allowed.


Whether the NCDRC erred in allowing the revision petition of the respondent corporation?


  • The Counsel for the applicant contended that the appellant compiled with all the terms of the allotment letter and did not violate any of them. In fact, they took all the required steps as mentioned in terms of the allotment letter. 
  • It was also contended by the appellant that they are a qualified engineer, who wanted to act upon the novel idea of manufacturing components for FM radios and audios. However, by no fault of his, there was a delay on the part of the government in granting permission and not releasing capital resulted in no construction. The appellant took all the required steps to implement the project which were within his power and control.


  • The Counsel for the respondents urged the Apex Court not to interfere with the findings of the NCDRC. It was argued that the record shows sufficient opportunities that were granted to the appellant. Several show cause notices too were issued to him, demanding the answers for the delay in the construction of industrial units. 
  • The respondents presented various letters exchanged between the parties and argued that the appellant did not show substantial or any progress or interest in working on the industrial activity on the plot. 


  • The Ld. Court observed that the parties entered into an agreement in 1995 where the appellant was to construct industrial units in a plot issued by the respondents subject to a few conditions. One of the conditions was to complete the said project within 2 years by 1997.
  • During this period, the respondent corporation kept sending letters to the appellant demanding the answer to why the work had not begun. To which the appellant replied that there is a delay due to lack of basic facilities like electricity and telephone, etc. Finally in 1998, the respondents sent back the cheque initially paid by the appellant and resumed possession of the concerned plot of land. 
  • The Court further observed that it was the fault of the appellant which led to the delay in the construction of the industrial plots. There was a clear breach of the agreement entered upon between the parties. 
  • Hence, the respondents are well within their rights to resume the possession of the land.


It was held by the Ld. Court that the NCDRC was right in allowing the revision petition of the respondents on the ground that the appellant breached the agreement entered into between the parties by not completing the construction project within 2 years.

However, the Court held that the respondents would have to pay an interest at 6% per annum on the cheque amount to the appellant.

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