Final Land Price Can't Be Disowned, Even Decades Later – MMTC Cooperative Liable for Revised Payment to VUDA: Andhra Pradesh `High Court

High Court of Andhra Pradesh delivered its judgment in the Appeal Suit No. 393 of 1998, involving the Minerals & Metals Trading Corporation (MMTC) Employees Co-operative House Building Society Limited and the Visakhapatnam Urban Development Authority (VUDA). The court upheld the trial court's decision, confirming VUDA's demand for additional payment from MMTC Cooperative, following the finalization of land acquisition compensation.

The MMTC Cooperative had entered into a sale agreement with the Visakhapatnam Town Planning Trust (later VUDA) for 66 house plots at Maddilapalem, Visakhapatnam, in 1973. The sale deed specified that the purchase price was tentative, pending final compensation for the land acquisition. In 1986, VUDA issued a demand for additional payment based on the final land cost, resulting in a dispute over the amount due.

The MMTC Cooperative filed a lawsuit seeking a declaration that VUDA’s demand for an additional ₹533,275.37 was excessive and illegal. The trial court dismissed the case, prompting this appeal.

The central legal issue was whether VUDA’s demand for additional payment was enforceable, given the sale deed's provision for a tentative price. The sale deed clearly stated that the final price could be adjusted after the completion of land acquisition proceedings.

The appellant (MMTC Cooperative) argued that the variation in compensation for land acquisition should have been reconsidered and communicated again before enforcing it. They contended that the enhanced price demand was arbitrary and should not include legal expenses or interest.

The respondent (VUDA) maintained that the sale deed explicitly stated that the price was tentative and subject to revision, and the appellant had voluntarily agreed to this term. VUDA argued that the MMTC Cooperative was bound to pay the final price once the land acquisition compensation was finalized.

The High Court, presided over by Justice Venuthurumalli Gopala Krishna Rao, dismissed the appeal, confirming that the MMTC Cooperative was bound by the sale deed terms, which explicitly allowed for a revised final price. The court ruled that:

“The plaintiff cannot disown its liability to pay the final price… the terms and conditions in [the sale deed] are binding on both the parties.”

The court further noted that there was no illegality in VUDA’s actions, as they followed the contractual terms agreed upon by both parties. The claim of the appellant that the demand was arbitrary was dismissed, as the final price was based on proper calculation following the land acquisition proceedings.

Thus, the High Court affirmed the lower court's decision, ruling in favor of VUDA and requiring the MMTC Cooperative to pay the additional amount.

Date of Decision :July 1, 2024

MMTC Cooperative Society Ltd. vs. Visakhapatnam Urban Development Authority​.