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2008 DIGILAW 3325 (MAD)

M. M. J. Namazi v. Gani and Sons & Others

2008-09-10

M.CHOCKALINGAM, M.VENUGOPAL

body2008
Judgment :- M. Chockalingam, J. Challenge is made to a judgment of the learned Single Judge of this Court made in C.S.No.273 of 1992 whereby a suit for specific performance on an agreement for sale was dismissed. 2. The case of the appellant/plaintiff is as follows: The suit property originally belonged to the first defendant. The second defendant has been the tenant under the first defendant since 1914. On the grounds of demolition and reconstruction, the first defendant initiated eviction proceedings against the second defendant. It went upto Apex Court. In order to purchase peace, the plaintiff, who is one of the partners of the second defendant, offered to purchase the suit property. Accordingly, an agreement for sale was entered into between the parties on 11. 1990 whereby the sale consideration was fixed at Rs.13.15 lakhs, and an advance of Rs.1.10 lakhs was paid that day. As per the agreement, the sale was to be completed on or before 22. 1991. Though the plaintiff made further payments, he could not proceed further since the first defendant handed over only the xerox copies of the title deeds. In November 1991, the first defendant agreed to complete the sale transaction provided the plaintiff paid the enhanced consideration. It was also agreed between the parties that the sale consideration would be Rs.14.25 lakhs, and the time for completing the sale was extended to 31. 1992. An endorsement was made on the reverse of the original agreement as to the variation of the terms. Though the time was fixed, the same was not intended to be the essence of the contract. So far, the plaintiff has paid Rs.8 lakhs. He has been ready and willing to pay the balance. But, the first defendant did not take steps to comply with the mandatory provisions of the Income Tax Act. While the matter stood thus, the first defendant sent a letter on 22. 1992, cancelling the agreement. Hence the suit for specific performance. 3. He has been ready and willing to pay the balance. But, the first defendant did not take steps to comply with the mandatory provisions of the Income Tax Act. While the matter stood thus, the first defendant sent a letter on 22. 1992, cancelling the agreement. Hence the suit for specific performance. 3. The suit was resisted by the first defendant by filing a written statement stating that as per the initial agreement, a sum of Rs.3.05 lakhs should be paid by the plaintiff on or before 30.11.1990; but, it was not done by the plaintiff; that under the circumstances, the plaintiff has committed breach as he did not have funds to pay the said sum; that time was the essence of the contract since the intention of the parties was to put a quietus to the litigation; that having fully aware of the same, the plaintiff sought for further time, and extension of time was given only because he did not have the funds; that increase in sale consideration was made only as a deterrent to avoid any further delay; that the objections regarding the title of the first defendant and non-production of the title deeds have been now raised only to cover up the lack of readiness and willingness on the part of the plaintiff; that the plaintiff was also aware that the originals were not with the first defendant; that under the circumstances, the plaintiff has committed breach; that the mere plea that the plaintiff was ready and willing will not help him in any way, and hence the suit was to be dismissed. 4. On the above pleadings, six issues were framed, and the parties went on trial. The plaintiff examined himself as P.W.1 and marked 10 documents. On the side of the defendants, the third defendant was examined as D.W.1 and no documents were marked. The learned Single Judge after hearing both sides, took the view that the plaintiff was not entitled for the relief of specific performance and dismissed the suit. Hence this appeal at the instance of the plaintiff. 5. The learned Senior Counsel Mr. On the side of the defendants, the third defendant was examined as D.W.1 and no documents were marked. The learned Single Judge after hearing both sides, took the view that the plaintiff was not entitled for the relief of specific performance and dismissed the suit. Hence this appeal at the instance of the plaintiff. 5. The learned Senior Counsel Mr. M.K. Kabir appearing for the appellant/plaintiff, would submit that the plaintiff was always ready and willing to perform his part of the contract; that it is pertinent to point out that time was not the essence of the contract; that the first defendant did not produce the original documents of title for inspection; that the mere fact that some of the original deeds were torn or lost would be sufficient to establish that at least the advertisement was a normal regular measure; that the doubts raised by the plaintiff were genuine; that the plaintiffs conduct was bonafide; that in the instant case, the original documents were necessary and there was nothing wrong in insisting upon production of the original documents; that out of the total sale consideration, a huge sum of Rs.8 lakhs has been paid by the plaintiff; that it was not the case of the first defendant that the matter was dragged on by the plaintiff to mobilize funds; that merely because Rs.3,05,000/-was not paid by 30.11.1990, it cannot be said that the plaintiff did not have funds; that it is pertinent to point out that Ex.P1 was entered into for the purpose of purchasing peace; that in fact, the first defendant had not given the necessary documents to establish title to the property; that the learned Single Judge was not correct in dismissing the suit, and hence the judgment of the learned Single Judge has got to be set aside. 6. 6. The learned Counsel for the respondents 2 to 4 would submit that the plaintiff was never ready and willing to perform his part of the contract; that time was the essence of the contract; that it was the plaintiff who prolonged the matter; that xerox copies of the documents were produced; that the insistence of advertisement in newspapers was irrelevant since that was not one of the terms of the contract; that the plaintiffs conduct was not bonafide; that the first defendant had fulfilled her obligations; but, the plaintiffs lack of readiness is apparent in the instant case, and hence the plaintiff was not entitled for the discretionary relief and the appeal be dismissed. 7. The admitted facts could be stated as follows: The suit property belonged to the first defendant and on her death it devolved upon the legal representatives namely the defendants 3 and 4. The second defendant has been a tenant in the property from 1914. The eviction proceedings were initiated against the second defendant on different grounds. The parties agitated the matter till the Apex Court. In order to purchase peace and put an end to the litigation, one of the partners of the firm who is the plaintiff in the suit, and the first defendant entered into an agreement for sale of the property under Ex.P1 on 11. 1990. The consideration was fixed at Rs.13,15,000/-. It was agreed that the transaction should be completed on or before 22. 1991. An advance of Rs.1.10 lakhs was paid on the day of agreement itself. Thereafter, the plaintiff paid Rs.40,000/-, Rs.95,000/- and Rs.1,05,000/- on 1. 1991, 21. 1991 and 21. 1991 respectively. The transaction could not be completed on or before 22. 1991 as agreed under Ex.P1. The time for completion was extended on 211. 1991 by making an endorsement in the original agreement. It was extended till 31. 1992, and the sale consideration was also enhanced to Rs.14.25 lakhs. On 21. 1991, the plaintiff paid Rs.4.50 lakhs by way of cash Rs.1 lakh and D.D. For Rs.3.50 lakhs. Thus, the plaintiff has paid Rs.8 lakhs. The plaintiff wrote a letter on 21. 1992 asking for the original title deeds in order to ascertain the marketable title of the first defendant. The first defendant replied on 21. 1992 stating that the originals were lost. The plaintiff sent a rejoinder on 12. 1992. Thus, the plaintiff has paid Rs.8 lakhs. The plaintiff wrote a letter on 21. 1992 asking for the original title deeds in order to ascertain the marketable title of the first defendant. The first defendant replied on 21. 1992 stating that the originals were lost. The plaintiff sent a rejoinder on 12. 1992. Then, there were exchange of notices. The plaintiff filed the suit on 3. 1992 seeking the relief of specific performance. 8. The contentions put forth by the parties centered upon the only question whether the plaintiff was ready and willing to perform his part of the contract. Sec.16(c) of the Specific Relief Act reads as follows: "16. Personal bars to relief Specific performance of a contract cannot be enforced in favour of a person – .(a) ... .(b) ... .(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the performance of which has been prevented or waived by the defendant." .9. It is well settled principle of law that in a suit for specific performance, a duty is cast upon the plaintiff who seeks the relief to specifically plead and prove that he has been ready and willing to perform his part of the contract from the time of the agreement till he seeks the relief. In order to satisfy the requirements of Sec.16(c) of the Act, mere issuance of a pre-suit notice or making the mere plea in the plaint that the plaintiff is ready and willing to perform his part of the contract would not be sufficient, but it should be strictly proved by acceptable evidence. The mere fixation of time within which the contract was to be performed, did not make the stipulation as to the time as the essence of the contract. The Court has to necessarily look into the recitals in the contract in order to find out the circumstances under which the contract was entered into and also the subsequent conduct of the parties. With the above legal principle in mind, the Court has to now look into the factual position in the case on hand. .10. The Court has to necessarily look into the recitals in the contract in order to find out the circumstances under which the contract was entered into and also the subsequent conduct of the parties. With the above legal principle in mind, the Court has to now look into the factual position in the case on hand. .10. Admittedly, the second defendant has been the tenant under the first defendants family from 1914 onwards, and eviction proceedings were initiated by the first defendant against the second defendant apart from fixation of fair rent. Those proceedings were initiated between 1975 and 1990 and were pending. The last payment of rental before the agreement was entered into was at the rate of Rs.2,500/- and an application was filed by the landlady namely the first defendant, to fix the rent at Rs.20,000/-. However, the parties wanted to avoid further litigation. Under the circumstances, the first defendant came forward to sell the property, and the plaintiff one of the partners of the second defendant firm, was ready to purchase the same. Accordingly, Ex.P1 agreement was entered into on 11. 1990. The said agreement reads "whereas the Vendor has decided to sell the property for the purpose of avoiding further protracted proceedings and for the purchase of another property and offers to sell the property to the Purchaser Mr. M.M.J. Namazi or his nominee or nominees for a price of Rs.13,15,000/- (Rupees Thirteen Lakhs and fifteen thousand only) and the Purchaser accepts to purchase the property for the said price and paid Rs.1,10,000/-(Rupees One Lakh and ten thousand only) as advance". This part of the agreement would clearly indicate the circumstances, which compelled the vendor namely the first defendant, to enter into such agreement. The consideration was fixed at Rs.13.15 lakhs under Ex.P1. It could be further seen under the said agreement, "further advance of Rs.3,05,000/-(Rupees Three lakhs and five thousand only) on or before 30.11.1990"; but, the said payment was not made within the stipulated time. It is pertinent to point out that the said amount of Rs.3.05 lakhs was mentioned in the agreement as further advance. As could be seen, further payment of Rs.40,000/- was made only on 1. 1991. But, the said further advance of Rs.3.05 lakhs was not made on or before 30.11.1990 as agreed upon by the parties. The plaintiff had no explanation to offer. As could be seen, further payment of Rs.40,000/- was made only on 1. 1991. But, the said further advance of Rs.3.05 lakhs was not made on or before 30.11.1990 as agreed upon by the parties. The plaintiff had no explanation to offer. The parties agreed to make a variation in the terms of the agreement as could be seen under Ex.P2. The sale consideration was enhanced to Rs.14.25 lakhs, and the time for completion was extended to 31. 1992. .This Ex.P2 has come into existence after an interval of 9 months. Even at that time, the further advance as agreed upon, was not fully paid. 11. The main contention put forth by the plaintiff before the learned Single Judge and equally here also is that the plaintiff was always ready and willing to perform his part of the contract; but, the first defendant has failed to perform her part of the contract by not furnishing the original title deeds or certified copies of the same in order to ascertain her marketable title to the property. Both the contentions have got to be rejected necessarily in view of the evidence both oral and documentary, put forth and also the circumstances attendant. The plaintiff was one of the partners of the second defendant firm which has been carrying on the business in the same property for nearly about 7 or 8 decades. Concededly, they have been making payment of rental all along the period, and number of litigations were also pending between them. Nowhere the title of the first defendant was questioned. Without ascertaining the title, the plaintiff could not have entered into an agreement under Ex.P1 for purchase of the property for a consideration of Rs.13.15 lakhs and paid an advance of Rs.1.10 lakhs that day. The further advance of Rs.3.05 lakhs was not paid within the time as stipulated. It is not the case of the plaintiff that he had entertained doubt over the marketable title of the first defendant over the property, and hence he delayed the payment. On the contrary, P.W.1 has categorically admitted that he has not raised any doubt or discrepancy. The consideration originally agreed at Rs.13.15 lakhs under Ex.P1 dated 11. 1990, was enhanced to Rs.14.25 lakhs under Ex.P2 dated 211. 1991. On the contrary, P.W.1 has categorically admitted that he has not raised any doubt or discrepancy. The consideration originally agreed at Rs.13.15 lakhs under Ex.P1 dated 11. 1990, was enhanced to Rs.14.25 lakhs under Ex.P2 dated 211. 1991. Had the plaintiff really entertained any doubt over the title of the first defendant in respect of the property, enhancement of consideration from Rs.13.15 lakhs to Rs.14.25 lakhs could not have taken place at all. By consent, the consideration has been enhanced to Rs.14.25 lakhs which would be clearly indicative of the fact at that juncture, that it was the plaintiff who has defaulted in making payment as agreed upon between the parties under Ex.P1. 12. As could be seen under Ex.P2, by consent it was entered into, and an endorsement was made on 211. 1991 which reads as follows: "The Balance of Rs.6,25,000/- will be paid on or before 31st day of January 1992, at the time of Registration of the Sale Deed." Even under Ex.P2, the marketable title of the owner was never questioned or in that regard any recital is found. It is for the first time under Ex.P3, the plaintiff came forward to state as follows: "8. Further I would like to inform you that the Xerox copy of the document of 1904 is most illegible and you are requested to kindly furnish a legible and certified copy (preferably in English) of the same and also certified copies of all other documents also since I have been given typed/xerox copies only so far. ... 12. Before I proceed with further payments to you I must satisfy myself that you have an absolutely good and marketable title to the property in question." .13. The aforesaid contents as found in paragraphs 8 and 12 of Ex.P3, would clearly indicate that the plaintiff would never be ready and willing to perform his part of the contract. It is not in controversy that the xerox copies of the document of the year 1904 was handed over by the first defendant to the plaintiff at the earliest when Ex.P1 was entered into. It is stated in paragraph 8 referred to above that the said xerox copy of the document was illegible and hence the first defendant should furnish a legible and certified copy of the document. At this juncture, it is pertinent to point out that Ex.P1 was entered into on 11. 1990. It is stated in paragraph 8 referred to above that the said xerox copy of the document was illegible and hence the first defendant should furnish a legible and certified copy of the document. At this juncture, it is pertinent to point out that Ex.P1 was entered into on 11. 1990. But, this communication was addressed on 21. 1992. If the xerox copy which was handed over at the time of Ex.P1 agreement was not legible, the plaintiff need not have waited for such an interval of time. Further, a reading of paragraph 12 would clearly indicate that the plaintiff was to satisfy himself that the first defendant had absolute, good and marketable title to the property in question, after entering into an agreement as stated above. The plaintiff being a partner of a firm which happened to be the tenant of the same landlady for eight decades, without ascertaining the ownership of the property, could not have entered into such an agreement as evidenced under Ex.P1. It remains to be stated that the communication was addressed on 21. 1992. As per the endorsement in Ex.P2, the transaction must be completed on or before 31. 1992 and the balance of Rs.6.25 lakhs should be paid on or before the said date. This communication Ex.P3 was addressed just a week before the said date. From the time of Ex.P1 dated 11. 1990 till Ex.P3 dated 21. 1992, the plaintiff never raised any doubt as to the marketable title of the owner over the property. The contents in the above paragraphs in Ex.P3 would be indicative of the fact that not only the plaintiff was not having sufficient funds to make the payment, but also he was searching for reasons to avoid the performance of the contract. 14. It is pertinent to point out that under Ex.P4, the reply, the first defendant made it clear that the plaintiff entered into the agreement after being thoroughly satisfied with the title and also the area of the property. After the receipt of the reply under Ex.P4, on 12. 1992, the plaintiff had sent a rejoinder stating, "You know fully well that unless you finish all the particulars, original documents, etc., your title to the property is not complete. After the receipt of the reply under Ex.P4, on 12. 1992, the plaintiff had sent a rejoinder stating, "You know fully well that unless you finish all the particulars, original documents, etc., your title to the property is not complete. Unless all the particulars are given it is not possible to complete the sale." Contrary to the contents in Ex.P5 stating that it was a blatant lie to state that the plaintiff has satisfied himself about the title and the area after which he bargained to purchase the property, the plaintiff as P.W.1 has categorically stated that though he had no doubt regarding the title of the first defendant to the property, he raised certain doubts because he wanted the documents so that the recitals can be incorporated to show the marketable title. The plaintiff as witness added in his evidence that the owner of the property in 1955 was G.R. Muthuvelu, the father of the first defendant, and he never denied the title of G.R. Muthuvelu in 1955, and he asked the documents only in order to get clarification. All these would go to show that Ex.P3, the notice, was issued on 21. 1992 in order to evade the performance of the agreement within the stipulated time as evidenced under Ex.P2. .15. After receiving the said rejoinder, the first defendant has issued Ex.P6, the notice, on 22. 1992, cancelling the agreement and expressed that she was ready to return the advance after deducting the damages. The same was followed by Ex.P7, the notice, whereby the plaintiff made an attempt to dilate the question as to the title over the property by stating that in respect of the lost documents, an advertisement could be given, and inspection of original or the certified copies of the documents which were in possession of the first defendant, could be made. Even under Ex.P1 agreement, it was made clear that the only available title deeds were to be produced by the vendor and the xerox copies were also furnished. This would be quite indicative of the fact that the plaintiff was clearly aware that the original title deeds were not at all available with the first defendant. Even under Ex.P1 agreement, it was made clear that the only available title deeds were to be produced by the vendor and the xerox copies were also furnished. This would be quite indicative of the fact that the plaintiff was clearly aware that the original title deeds were not at all available with the first defendant. Having clear knowledge about the same, the plaintiff who has failed to perform his part of the contract within the stipulated time even after the extension, issued notices and rejoinders as if he was ready and willing to perform his part of the contract by paying the balance of consideration and would state that the original documents were not furnished and if done so, he would have been ready. But, all the circumstances would clearly indicate otherwise. .16. What is readiness and willingness to perform the terms of the contract as understood in Section 16(c) of the Specific Relief Act came up before the Apex Court in a case reported in (2002) 9 SCC 582 (PUSHPARANI S.SUNDARAM AND OTHERS VS. PAULINE MANOMANI JAMES (DECEASED) AND OTHERS wherein the Supreme Court has held as follows: ."4. The only question raised before the High Court, which it considered, to which we are called upon for consideration is, whether the appellants were always ready and willing to perform their part under the contract. The High Court came to the conclusion that willingness and readiness is no doubt pleaded but they led no evidence to prove it. Thus held, that the plaintiff is not entitled to the decree of specific performance. The submission by the learned counsel for the appellants is that the plaintiff was always willing and ready to perform his part under the contract but mere non-leading of any evidence is not sufficient to reject it. Inference of readiness and willingness could be drawn by the conduct of the plaintiff, the circumstances in a particular case in other words to be gathered from the totality of circumstances." 17. In a case reported in (2005) 6 SCC 243 (UMABAI AND ANOTHER VS. NILKANTH DHONDIBA CHAVAN AND ANOTHER), the Apex Court has held thus: "30. Inference of readiness and willingness could be drawn by the conduct of the plaintiff, the circumstances in a particular case in other words to be gathered from the totality of circumstances." 17. In a case reported in (2005) 6 SCC 243 (UMABAI AND ANOTHER VS. NILKANTH DHONDIBA CHAVAN AND ANOTHER), the Apex Court has held thus: "30. It is now well settled that the conduct of the parties, with a view to arrive at a finding as to whether the plaintiff-respondents were all along and still are ready and willing to perform their part of contract as is mandatorily required under Section 16(c) of the Specific Relief Act must be determined having regard to the entire attending circumstances. A bare averment in the plaint or a statement made in the examination-in-chief would not suffice. The conduct of the plaintiffs/respondents must be judged having regard to the entirety of the pleadings as also the evidences brought on records. .... 38. "Inference of readiness and willingness could be drawn by the conduct of the plaintiffs, the circumstances in a particular case in other words to be gathered from the totality of the circumstances."" 18. Applying the above principles laid down by the Apex Court, the Court has to necessarily come to the conclusion that the plaintiff has not proved that he is ready and willing to perform his part of the contract by paying the balance of consideration. Hence it is not a fit case where the Court could grant the discretionary relief of specific performance. The learned Single Judge was perfectly correct in dismissing the suit. The order of the learned Single Judge does not require interference. 19. In the result, this original side appeal is dismissed confirming the judgment of the learned Single Judge and leaving the parties to bear their costs.