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2003 DIGILAW 608 (MAD)

Chandrasekaran v. T. L. Valliammal

2003-04-04

N.V.BALASUBRAMANIAN

body2003
Judgment : 1. This appeal is directed against the judgment and decree in A.S. No.10 of 1999 and cross-objection on this file of the Court of Principal District Judge, Chengalpattu confirming the judgment and decree dated 20.10.1998 in O.S. No.224 of 1991 by the learned Sub Court, Trivellore. 2. The suit was filed for specific performance by the plaintiffs on the ground that the first defendant in the suit has entered into an agreement of sale with S.P.Lakshmanan for a sum of Rs.95,000 non 12.7.1978, and on the same day the first defendant received a sum of Rs.16,000 by way of demand draft and another sum of Rs.4,000 in cheque from the said S.P. Lakshmanan. Subsequent to the agreement, S.P. Lakshmanan died and his legal representatives have filed a suit for specific performance on the ground that in spite of the demand made by them to execute the sale deed in pursuance of the agreement, the first defendant was evading the execution of the deed of sale. The case of the Plaintiffs is that in spite of the agreements of sale entered between the first defendant and late S.P.Lakshmanan, the first defendant subsequently sold the suit properties for Rs.85,000 to the second defendant and the second defendant was informed by P.W.2, Devi Lakshmanan with regard to the agreement of sale entered into between the first defendant and late S.P.Lakshmanan and as such the second defendant is not a bona fide purchaser for value without notice of the prior agreement of sale and according to the plaintiffs they are entitled to the relief for specific performance. It is stated that the sale agreement executed by the first defendant wound bind on his sons and grandsons and, the plaintiffs are entitled to the relief of specific performance of the agreement of sale dated 12.7.1978. 3. The suit was originally filed on the file of this Court in C.S. No.360 of 1979 seeking leave of this Court to admit the suit as the suit properties were situated outside the jurisdiction of this Court and the necessary leave was granted. Subsequently the suit was transferred to City Civil Court, Chennai and was taken on file of the City Civil Court, Chennai on O.S. No.2590 of 1981. Subsequently the suit was transferred to City Civil Court, Chennai and was taken on file of the City Civil Court, Chennai on O.S. No.2590 of 1981. The case of the first defendant as seen from the written statement is that there was no agreement of sale in respect of Survey No.1096/2 and 1097/2 in Madhavaram Village. However the first defendant has not disputed the receipt of Rs.20,000. But according to him, the amount was received, but there was no agreement of sale between him and late S.P. Lakshmanan. It is his case that the deceased Lakshmanan had not chosen to execute the agreement of sale to be executed after passing of the receipt and since he has not followed up by executing the agreement in pursuance of the receipt, the plaintiffs are not entitled to suit for specific performance. It is also his case that the plaintiffs are not entitled for the return of advance money as the amount was not claimed by the plaintiffs within three years from the date of payment made under the receipt dated 12.7.1978. It is their case that the receipt cannot be construed as an agreement of sale. It is also stated that the second defendant was informed about the cancellation of earlier agreement and the second defendant has purchased the property and he is a bona fide purchaser for the value without notice. 4. The second defendant has filed separate written statement stating that he was not aware of the alleged agreement between S.P. Lakshmanan and the first defendant. The second defendant also denied the fact that he was informed by the plaintiffs’ representative Devi Lakshmanan about the said agreement of sale. He also denied the case that Devi Lakshmanan contacted him in the first week of April, 1979 or on subsequent date and enquired him as to how he purchased the suit property when there was already an agreement of sale subsisting between the first defendant and the late S.P. Lakshmanan. The second defendant raised various other contentions and according to him, the plaintiffs at best can claim only damages from the first defendant and the suit against the defendants for specific performance is not maintainable and the second defendant is a bona fide purchaser for the value. The third defendant who is the son of the second defendant remained ex parte after filing the written statement. The third defendant who is the son of the second defendant remained ex parte after filing the written statement. The third defendant in his written statement raised the same averments which were raised by the second defendant, his father in his written statement. The fourth defendant also filed written statement supporting the case of the defendants 1 and 2. The second defendant died during the trial and the defendants 3 to 5 have been added as legal representatives. The defendants 3 and 5 remained ex parte. 5. The trial Court framed necessary issues for consideration and after considering the oral and documentary, decreed the suit as prayed for. The trial Court held that there was an agreement of sale dated 12.7.1978 and the plaintiffs were ready and willing to perform their part of the agreement and the second defendant with the knowledge of the earlier agreement, purchased the property and hence he cannot be considered to be a bona fide purchaser for value and decreed the suit for specific performance. 6. The fourth defendant has filed an appeal in A.S. No.10 of 1999 and the first defendant also filed an appeal in 38 of 2001. The plaintiffs filed cross-objection in A.S. No.10 of 1999 claiming relief against the defendant 4 and 5, who are the legal representatives of the deceased, second defendant. Both the appeals as well as the cross-objection were heard together and the learned Principal District Judge, Chengalpattu modified the judgment and decree of the trial Court in O.S. No.224 of 1991 and held that the plaintiffs are entitled to the decree as prayed for. The learned Appellate Judge dismissed both the appeals with cost and allowed the cross objection filed by the plaintiffs in A.S. No.10 of 1999. 7. The second appeal is coming now for admission and it is not yet admitted. Hence, no substantial question of law has been framed for consideration. 8. Learned counsel for the appellant vehemently contended that Ex.A-12, the receipt cannot be regarded as an agreement of sale and it is only a receipt as the receipt contemplates the execution of further agreement of sale and therefore, the document Ex.A-12 can only be regarded as a receipt and not an agreement of sale. The learned counsel for the appellant relied upon a decision of this Court in H.G.Krishna Reddy and Company v. M.M.Thimmiah (1983)1 M.L.J. 467 : A.I.R. 1983 Mad. The learned counsel for the appellant relied upon a decision of this Court in H.G.Krishna Reddy and Company v. M.M.Thimmiah (1983)1 M.L.J. 467 : A.I.R. 1983 Mad. 169, wherein this Court held as follows: “Where a receipt was executed by the purposed vendor in favour of the proposed vendee for certain amount towards th agreed price of the sale of suit property and under that receipt a regular agreement of sale on a stamp paper had to be executed within 15 days from the date of the receipt, the said recital being a condition of the bargain between the parties under the receipt the said receipt was not intended to be a concluded contract.” 9. The learned counsel for the appellant submitted that there was no concluded contract as further agreement has not at all been executed between the parties. Hence, his submission is that Ex.A-12 should be regarded only as receipt and not an agreement of sale. 10. The second submission of the learned counsel for the appellant is that P.W.2, Devi Lakshmanan has been examined on the side of the plaintiffs. His evidence shows that he informed the second defendant about the prior agreement of sale and his evidence does not inspire confidence for acceptance as he happens to be a close family friend of the plaintiffs and he is an interested party and his evidence has to be discarded. He therefore submitted that the plaintiffs has not proved that the second defendant had the knowledge of prior agreement of sale and both the Courts were not correct in relying on the evidence of P.W.2s evidence to come to a conclusion that the second defendant had the prior knowledge about the agreement of sale and dismissed the case of the second defendant that he was a bona fide purchaser for value without notice. 11. I have careful considered the submission made by the learned counsel for the appellant. Inspite of several opportunities granted by this Court, the learned counsel for the appellant did not produce the copy of document Ex.A-12, relied upon by the appellant. However, the contents of the documents are extracted in the judgment of the appellate Court. 11. I have careful considered the submission made by the learned counsel for the appellant. Inspite of several opportunities granted by this Court, the learned counsel for the appellant did not produce the copy of document Ex.A-12, relied upon by the appellant. However, the contents of the documents are extracted in the judgment of the appellate Court. The document Ex.A-12, styled as “receipt” and it recites that the first defendant has received a sum of Rs.20,000, namely Rs.16,000 by way of demand draft in favour of S.S.Palaniappan and also a cheque for Rs.4,000 towards the sale consideration of Rs.95,000 for selling his lands to late S.P. Lakshmanan measuring an extent of 11. 89 grounds in Survey No.1096/2 and 1097/2 in Madhavaram village. In the said agreement, it is also stated that the first defendant agreed and undertook to execute the regular sale agreement within a week and the first defendant shall utilise the advance amount solely for the purpose of repaying utilise the advance amount solely for the purpose of repaying the security deposit of S.S.Palaniappan for cancelling the lease agreement dated 18.3.1973. It is also stated in the said document that the first defendant has got valid title deeds to convey and willing to refund the amount if any defect is found in the title to the suit property. In my view, the document Ex.A.12 relied upon by the counsel for the appellant shows that it was an agreement of sale. The document contains all essential ingredients for an agreement of sale and it is only an evidence of a prior agreement of sale of the suit property. It specifies the amount of consideration for sale of property and it identifies the property agreed to be sold and it also assures the proposed vendee that the first defendant has valid title to convey the suit properties. No doubt, the document contemplates that the parties to execute a regular sale agreement within a period of one week. The regular sale agreement in this context does not mean that there was no agreement of sale entered into between the parties and it means that there should be formal deed incorporating the terms of agreement already agreed to between the parties. The regular sale agreement in this context does not mean that there was no agreement of sale entered into between the parties and it means that there should be formal deed incorporating the terms of agreement already agreed to between the parties. I therefore, hold that the document Ex.A-12 itself can be regarded as an agreement of sale evidencing that the first defendant agreed to sell the suit property in favour of S.P. Lakshmanan for a total consideration of Rs.95,000 and it is also stated that he received a sum of Rs.20,000 by way of advance. In other words, it contains all the essential terms of the agreement for the sale of the property. So far as the decision relied upon by the learned counsel for the appellant in H.G.Krishna Reddy and Company v. M.M.Thimmiah (1983)1 M.L.J. 467 : A.I.R. 1983 Mad. 169is to be concerned, this Court on that case held as under: “If a document which is entered into between two parties and which is relied on as constituting contract contemplates the execution of a further regular agreement between the parties, it is a matter of construction whether the execution of a further contract is a condition of the terms of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the original agreement should be performed. In the former case, there cannot be any enforceable contract unless the condition is fulfilled or on the ground that law does not recognise a contract to enter into a contract.” 12. I find that on the basis of construction of Ex.A-12, it is not a condition between the parties that they should enter into a further agreement of sale for conveying the suit properties. I hold that it is merely an expression or desire on the part of the parties to enter into a formal agreement of sale in terms of agreement already agreed upon. The intention of t he parties as per document Ex.A-12 is that the first defendant has agreed to sell the land for a sum of Rs.95,000 in favour of late S.P. Lakshmanan and there was valid agreement of sale between the parties. The intention of t he parties as per document Ex.A-12 is that the first defendant has agreed to sell the land for a sum of Rs.95,000 in favour of late S.P. Lakshmanan and there was valid agreement of sale between the parties. Though time for performance of the agreement is not mentioned, it must be presumed that the performance should be done within a reasonable time and the omission to mention the time for performance does not disentitle the plaintiffs from claiming the same as an agreement of sale. It is well settled that the time is not an essential term in an agreement of sale of immovable property. I hold that the trial Court as well as the First Appellate Court was correct in holding that Ex.A-12 is an agreement of sale and not a mere receipt. I hold that the construction placed by the First Appellate Court on Ex.A-12 is justifiable and no ground has been made to interfere with the said finding. 13. As far as the submission of the learned counsel for the appellant with regard to knowledge of the earlier agreement of sale is concerned, there are three circumstances against the appellant. P.W.2 in his evidence has stated that he informed the second defendant prior agreement of sale during the end of 1978. Further the first defendant in his deposition has stated that he informed the second defendant about the receipt of Rs.16,000 by way of demand draft and Rs.4,000 by cheque. The learned counsel for the appellant submitted that the first defendant only informed about the receipt of money and informed the subsequent purchaser only about the loan transaction with late S.P.Lakshmanna and that cannot be constructed to mean that the first defendant has informed agreement of sale. I am unable to accept the same. If the sum of Rs.20,000 was received purely as loan, I am of the view that there was no occasion for the first defendant to inform a third party about the loan transaction as it would disclose a personal transaction between the first defendant and S.P. Lakshmanan. Hence, it is possible to infer from the fact that the first defendant has informed the receipt of a sum of Rs.20,000 from S.P.Lakshmanna, the first defendant has also informed the second defendant about the agreement of sale entered into by him with late S.P.Lakshmanan. 14. Hence, it is possible to infer from the fact that the first defendant has informed the receipt of a sum of Rs.20,000 from S.P.Lakshmanna, the first defendant has also informed the second defendant about the agreement of sale entered into by him with late S.P.Lakshmanan. 14. The third circumstance is, in the earlier agreement dated 12.7.1978 between the first defendant and late S.P.Lakshmanan the total sale consideration was fixed as Rs.95,000, but, whereas the second defendant has purchased the property for a sum of Rs.85,000. I am of the view that when the first defendant had earlier entered into an agreement of sale for a sum of Rs.95,000 it cannot be assumed that the first defendant would have sold the same property to the second defendant for a lesser amount of Rs.85,000 without any reason and only plausible reason that can be drawn from such conduct is that both the parties knew about the prior agreement of sale and in spite of them, the second defendant had purchased the property. 15. All the circumstances clearly go to show that the second defendant had prior knowledge of the agreement and that is the reason for the purchase of the property at a lower price. No other arguments were addressed. I find that both the Courts found that the plaintiffs are entitled to the relief of specific performance and they have proved that they are already ready and willing to purchase the suit property and they have complied with all other requirements of law. I therefore held that both the Courts were right in coming to the conclusion that the plaintiffs have established the agreement of sale and the second defendant is not bona fide purchaser for value and rightly exercised their discretion in granting the decree for specific performance. 16. Hence, I do not found any justifiable reason to interfere with the judgments and decrees of the Courts below as no substantial question of law arises in this case. The second appeal is dismissed in limineat the admission stage itself. No costs. Consequently, connected C.M.P. is also dismissed.