Seller's failure to obtain mandatory No Objection Certificate constitutes breach entitling purchaser to refund of earnest money.

The Appellants (Sellers) entered into an Agreement to Sell dated 18.07.2007 with the Respondent/Plaintiff and M/s Raisina Villas Pvt. Ltd. (Purchasers) for agricultural land in village Pandawla Kalan for Rs. 8,07,50,000/-

The Plaintiff paid a total advance of Rs. 80,75,000/-

Under Clause 7, the parties were to obtain a ‘No Objection Certificate’ (NOC) from revenue authorities within three months

The Plaintiff later settled with the co-purchaser, acquiring full rights to the transaction

The sale remained unexecuted; the Defendants claimed the Plaintiff failed to pay the balance, while the Plaintiff alleged the Defendants failed to obtain the mandatory NOC and satisfy Section 33 of the Delhi Land Reforms Act (DLRA)

The Trial Court decreed the suit in favor of the Plaintiff for recovery of the advance amount

1. Whether the suit for recovery was barred by limitation under the Limitation Act, 1963

2. Whether the Defendants committed a breach of the Agreement to Sell by failing to obtain the requisite NOC

3. Whether the Plaintiff was entitled to a refund of the earnest money rather than seeking specific performance

4. Whether the suit was barred under Section 69 of the Indian Partnership Act

Article 58 of the Limitation Act, 1963, which stipulates a three-year limitation period from the date the right to sue first accrues

Section 5 of the Delhi Lands (Restriction on Transfer) Act, 1972, which places the burden of obtaining transfer permission on the seller

Section 33 of the Delhi Land Reforms Act, 1954, which restricts land transfers that leave a Bhumidhar with less than eight standard acres

Doctrine derived from Umesh Gaur v. Shamsher Rana regarding the enforceability of agreements involving Section 33 DLR

Section 69 of the Indian Partnership Act concerning the registration of firms

The Court rejected the limitation plea, ruking that the cause of action arose not on the agreement date (18.07.2007), but when the Defendants issued a forfeiture notice on 06.06.2008, making the 2010 filing timely

The Court found the Defendants in breach for failing to procure the NOC, a statutory and contractual pre-condition for the sale

The Court noted that while Section 33 of the DLRA does not void an agreement, the Defendants failed to show they took any steps to satisfy the revenue authorities or offered their entire land holding to bypass the 8-acre restriction

The Defendants’ claim of visiting the Sub-Registrar’s office was deemed a "created" defense lacking evidence of prior notice to the Plaintiff

The Court held that the joint purchase did not constitute a formal partnership, rendering the Section 69 bar inapplicable

The Court dismissed the appeal and upheld the decree for recovery of Rs. 80,75,000/- with 7% interest per annum from the date of filing until realization

All pending applications were disposed of