In Brief
A contractor agreed to purchase a site allotted by the Bangalore Development Authority (BDA) under statutory rules that prohibited alienation for ten years and mandated construction of a residential building. The plaintiff paid Rs. 50,000 but the vendor refused to execute the sale deed. The Supreme Court held the agreement unenforceable under Section 23 of the Indian Contract Act as it defeated the object of the statutory scheme—replacing the vendor's obligation to build a residential house with immediate transfer for profit. The Court found statutory rules constitute "law" and the illegality went to the root of the matter. While dismissing the specific performance suit, the Court awarded Rs. 20 lakhs to the plaintiff as partial relief under Article 142 to do complete justice.
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