Nandhini Promoters, rep. by Proprietrix Ms. E. Thenmozhi, Chennai v. A. Sadiq Ali, Son of Abbas Ali and Another
2008-02-25
V.RAMASUBRAMANIAN
body2008
DigiLaw.ai
Judgment : V. RAMASUBRAMANIAN. J. Pending suit for specific performance of an agreement of sale dated 24.7.2006, the plaintiff has come up with an application in O.A. No. 437 of 2007 for an interim order of injunction restraining the respondents from alienating or encumbering the suit schedule property to any third party. Since the respondents had entered caveat, they took notice at the time when the application for injunction was moved and thereafter, filed a counter. Simultaneously, the respondents have also filed an application in A. No. 3096 of 2007, seeking revocation of the leave to sue earlier granted by this Court in A. No. 2612 of 2007. 2. Both the applications were taken up together and I have heard Mr. S.V. Jayaraman, learned senior counsel appearing for the applicant/plaintiff and Mr. S. Parthasarathy, learned senior counsel appearing for the respondents/defendants. Application For Revocation of Leave: 3. Admittedly, the plaintiff is carrying on business at Nanganallur, outside the jurisdiction of this Court. The defendants are residing within the jurisdiction of this Court. The suit property is situate at Aanapakkam Panchayat, Sriperumbudur Taluk, Kancheepuram District, outside1 the jurisdiction of this Court. Originally, the prayer of the plaintiff in the suit was – (a) for specific performance of the agreement of sale; (b) for a permanent injunction restraining the respondents from alienating or encumbering the suit property to any third party and (c) for a permanent injunction restraining the Sub Registrar, Saidapet, from admitting any instrument for registration in respect of the suit property. 4. However, it appears that the applicant/plaintiff gave up, the Sub Registrar from the array of parties and also gave up the prayer No. (c) relating to an order of permanent injunction restraining the Sub Registrar from admitting any document for registration. Therefore, as on date, the reliefs sought for by the plaintiff in the suit, are confined to prayer Nos. (a) and (b), mentioned in the preceding paragraph. 5. It is in the above background of facts that the applicant was granted leave to sue under Clause 12 of the Letters Patent, by an order dated 26.3.2007, passed in A. No. 2612/2007. The respondents/defendants do not dispute the fact that a part of the cause of action arose within the jurisdiction of this Court.
5. It is in the above background of facts that the applicant was granted leave to sue under Clause 12 of the Letters Patent, by an order dated 26.3.2007, passed in A. No. 2612/2007. The respondents/defendants do not dispute the fact that a part of the cause of action arose within the jurisdiction of this Court. The plaintiff has taken a stand that the negotiations took place at Chennai; that the advance was paid and copies of documents obtained at Chennai; that the original documents were inspected at Chennai and that the agreement of sale was executed at Chennai. One has to go only by the averments contained in the plaint, for the purpose of determining the question of grant of leave to sue. Therefore, as per plaint averments, a part of the cause of action arose at Chennai within the jurisdiction of this Court. But the respondents have come up with an application for revocation of the leave on the short ground that the reliefs sought for in the suit, would nevertheless make the suit, one for land and that since the land is outside the jurisdiction of this Court, the leave earlier granted should be revoked. 6. The fact that a suit for mere specific performance of an agreement of sale, without seeking any further relief relating to possession, is not a suit; for land, is now well settled by the judgment of the Division Bench of this Court in Thamiraparani Investments Pvt. Ltd. v. Meta Films Pvt. Ltd. (2006) 1 MLJ 357 : (2006) 1 CTC 270 . But in addition to a prayer for specific performance of the agreement of sale, the plaintiff has also sought a decree of permanent injunction. The nature of injunction sought for, is only to restrain the respondents from alienating the suit property. Therefore, according to the applicant“plaintiff, the injunction sought for is not with respect to possession, but only for a personal enforcement and hence, the suit will not be one for land. 7.
The nature of injunction sought for, is only to restrain the respondents from alienating the suit property. Therefore, according to the applicant“plaintiff, the injunction sought for is not with respect to possession, but only for a personal enforcement and hence, the suit will not be one for land. 7. Dealing with a similar suit for specific performance, where a relief of permanent injunction was also sought for, just to restrain the respondents from alienating or dealing with the property, a Division Bench of this Court held in N. Dhanalakshmi and Others v. S. Eknathan N. Dhanalakshmi and Others v. S. Eknathan N. Dhanalakshmi and Others v. S. Eknathan (1998) 1 MLJ 132 : (1997) 3 LW 391 , as follows at p. 134 of MLJ: “ 14. Looking to the relief sought for in the plaint, it is plain that principally the suit is for Specific Performance of the agreement, and alternatively for the relief of refund of money. Even the ancillary relief of permanent injunction is also for restraining the defendants from alienating or dealing with the suit property in any way. In other words the suit is not one for title or possession. The ancillary reliefs of injunction sought did not affect the title or possession. The reliefs sought for are against the defendants in personem. In this view, it is not possible to hold that the suit filed by the plaintiff is for land, even having regard to the decisions cited by the learned counsel for the defendants.” 8. Even in an unreported decision of recent origin, another Division Bench of this Court (comprising of the Hon‘ble Chief Justice and Justice D. MURUGESAN), also took a view, similar to the view taken in N. Dhanalakshmi and Others v. S. Eknathan N. Dhanalakshmi and Others v. S. Eknathan N. Dhanalakshmi and Others v. S. Eknathan (supra)case cited above. This was in A. C. Subba Reddy v. Jawahar International Trading Corporation Company and Others (O.S.A. No. 52 of 2007 dated 4.4.2007). In para 4 of the said unreported decision, the Division Bench held as follows: “ 4. If we took at the prayer “a”” and “c” alone, it is clear that principally the suit is for specific performance of the agreement and even the ancillary relief of permanent injunction is also for restraining defendants from alienating or dealing with the suit property in any way.
If we took at the prayer “a”” and “c” alone, it is clear that principally the suit is for specific performance of the agreement and even the ancillary relief of permanent injunction is also for restraining defendants from alienating or dealing with the suit property in any way. Prayers “a” and “c” are not for title or possession and the injunction relief sought for also does not affect the title or possession.” Therefore, the consistent view taken by this Court is that the suit for specific performance, even with a prayer for permanent injunction only to restrain the defendants from alienating the property, does not amount to a suit for land. 9. Despite the aforesaid rulings of the Division Benches, Mr. S. Parthasarathy, learned senior counsel appearing for the respondents/defendants contended that neither the aforesaid decisions of the Division Bench nor the earlier decisions, on the basis of which, the aforesaid Division Bench decisions were rendered, went into the core issue, arising in a suit for specific performance. According to the learned senior counsel, Section 22(1) of the Specific Relief Act, 1963, entitled a person suing for specific performance, to seek the reliefs of possession or partition or any other relief including refund of earnest money deposit. Sub-section (2) of Section 22 prohibited the grant of any such additional relief unless it was specifically claimed. The proviso to the sub-section enables the Court to permit any amendment at any stage of the proceedings, so that such an additional relief could be incorporated. While considering the purport of Section 22 of the Specific Relief Act, 1963, the Supreme Court, in Babu Lal v. Hazari Lal Kishori Lal and Others Babu Lal v. Hazari Lal Kishori Lal and Others Babu Lal v. Hazari Lal Kishori Lal and Others AIR 1982 SC 818 : (1982) 7 SCC 525, held that the purpose of the said provision is to avoid multiplicity of suit and to enable the plaintiff to get appropriate relief without being hampered by procedural complications. 10. Considering the combined effect of Section 22(1) of the Specific Relief Act, 1963 and Section 55(1) of the Transfer of Property Act, the Supreme Court held in paragraph Nos. 13 and 14 of the aforesaid decision, as follows: “ 13. The expression in sub-section (1) of Section 22 in an appropriate case‘ is Very significant.
10. Considering the combined effect of Section 22(1) of the Specific Relief Act, 1963 and Section 55(1) of the Transfer of Property Act, the Supreme Court held in paragraph Nos. 13 and 14 of the aforesaid decision, as follows: “ 13. The expression in sub-section (1) of Section 22 in an appropriate case‘ is Very significant. The plaintiff may ask for the relief of possession or partition or separate possession ‘in an appropriate case‘. As pointed out earlier, in view of Order 2Rule 2 of Civil P.C. some doubt was entertained whether the relief for specific performance and partition and possession could be combined in one suit; one view being that the cause of action for claiming relief for partition and possession could accrue to the plaintiff only after he acquired title to the property on the execution of a sale deed in his favour and since the relief for specific performance of the contract for sale was not based on the same cause of action as the relief for partition and possession, the two reliefs could not be combined in one suit. Similarly, a case may be visualized where after the contract between the plaintiff and the defendant the property passed in possession of a third person. A mere relief for specific performance of the contract of sale may not entitle the plaintiff to obtain possession as against the party to obtain possession of the property. As against him, a decree for possession must be specifically claimed for such a person is not bound by the contract sought to be enforced, in a case where exclusive possession is with the contracting party, a decree for specific performance of the contract of sale simpliciter, without specifically providing for delivery of possession, may give complete relief to the decree-holder. In order to satisfy the decree against him completely he is bound not only to execute the sale-deed but also to put the property in possession of the decree-holder. This is in consonance with the provisions of Section 55(1) of the T.P. Act which provides that the seller is bound to give, on being so required, the buyer or such person as he directs such possession of the property as its nature admits. 14.
This is in consonance with the provisions of Section 55(1) of the T.P. Act which provides that the seller is bound to give, on being so required, the buyer or such person as he directs such possession of the property as its nature admits. 14. There may be circumstances in which a relief for possession cannot be effectively granted to the decree-holder without specifically claiming relief for possession, viz., where the property agreed to be conveyed is jointly held by the defendant with other persons. In such a case the plaintiff in order to obtain complete and effective relief must claim over the share of the defendant. It is in such cases that a relief for possession must be specifically pleaded.” 11. From the law laid down by the Supreme Court as aforesaid, Mr. S. Parthasarathy, learned senior counsel contended that even a mere prayer for specific performance, however innocuous it may be, includes within its ambit, a prayer for possession. In other words, according to the learned senior counsel, the relief of possession, is inherent or inbuilt in a prayer for specific performance of an agreement of sale, by virtue of Section 55(1) of the Transfer of Property Act. Therefore, it is the contention of the learned senior counsel that a suit for specific performance, is actually a suit for land, since the relief of possession inheres and is actually in-built in a prayer for specific performance; 12. There is some force in the contention of the learned senior counsel for the respondents/defendants that none of the earlier decisions either of the Supreme Court or of this Court, considered the effect of Section 55 of the Transfer of Property Act upon a suit for specific performance of an agreement of sale of immovable property. But I do not think that Section 55 of the Transfer of Property Act, alters the character of a suit for specific performance, from being a mere suit for enforcement of a contract into one for land. 13. Let me now explode the myth around Section 55 of the Transfer of Property Act. Section 55 of Transfer of Property Act, merely lists out the rights and obligations of the buyer and the seller.
13. Let me now explode the myth around Section 55 of the Transfer of Property Act. Section 55 of Transfer of Property Act, merely lists out the rights and obligations of the buyer and the seller. Sub-section (1) lists out the obligations of the seller, sub-section (2) reads into every contract for sale, a covenant relating to the right of the seller to transfer the property, sub-section (3) imposes an obligation upon the seller to deliver the documents of title to the property and sub-section (4) lists out the rights of the seller. Similarly, sub-section (5) and sub-section (6) list out the obligations and rights of the buyer respectively. 14. Clause (f) of sub-section (1) of Section 55 requiring the seller to hand over possession, contains one of the several obligations cast upon the seller. The relevant portion of Section of 55 of Transfer of Property Act reads as follows: “ 55. Rights and liabilities of buyer and seller: In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold: (1) The seller is bound- ( a) …….. ( b) ……… ( c) …………. ( d) …………. ( e) ……….. ( f) to give, on being so required, the buyer, or such person as he directs such possession of the property as its nature admits:” 15. Interestingly, the aforesaid obligation to hand over possession goes with a rider in the form of the expression “ on being so required” under Clause (f) extracted above. While all other obligations enlisted under Clauses, (a) to (g) under Section 55(1) (with the exception of Clause (b)) are to be performed by the seller even without a demand or request from the buyer, the obligation under Clause (f) to hand over possession, is to be performed “ on being so required.” 16. The expression “on being so required” appears to be significant in the light of the right of the buyer enshrined under Clause (b) of sub-section (6) of Section 55. Section 55(6) (b) of the Transfer of Property Act reads as follows: “ 55(6) The buyer is entitled - ( a) ………….
The expression “on being so required” appears to be significant in the light of the right of the buyer enshrined under Clause (b) of sub-section (6) of Section 55. Section 55(6) (b) of the Transfer of Property Act reads as follows: “ 55(6) The buyer is entitled - ( a) …………. ( b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, to the extent of the sellers interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.” 17. A reading of Section 55(6)(b) extracted above shows that a buyer is entitled as a matter of right, to decline to accept delivery of the property. In such cases, he would be entitled to certain rights, if his decline to take delivery was proper. In other cases, he would be entitled to lesser rights. Therefore, it is clear that even the Transfer of Property Act gives a choice to the buyer to accept or not, the delivery or possession. The buyers right to decline delivery of possession, is recognised by the statute and his other rights are determined on the basis of whether such decline was proper or improper. This is why the corresponding obligation on the seller under Section 55(1) (f), to hand over possession, comes into operation “ on being so required.” 18. It is in the light of the choice given to the buyer under Section 55, that Section 22 of the Specific Relief Act, 1963 describes the relief of possession in a suit for specific performance, as an additional relief, which a plaintiff may choose to seek or not. In other words, both the enactments viz. the Specific Relief Act and the Transfer of Property Act, do not appear to treat the relief of possession as a twin brother or the other side of the same coin, of the relief of specific performance.
In other words, both the enactments viz. the Specific Relief Act and the Transfer of Property Act, do not appear to treat the relief of possession as a twin brother or the other side of the same coin, of the relief of specific performance. The relief of possession need not necessarily be treated as inherent or in-built in a relief of specific performance. Once it is found that the relief of possession need not be treated as part and parcel of the relief of specific performance, there is no escape from the conclusion that a mere suit for specific performance without a specific prayer for possession, is not a suit for land. Therefore, I am unable to accept the contention, of the learned senior counsel for the respondents/defendants that a suit for specific performance automatically becomes a suit for land (by virtue of Section 55 of the Transfer of Property Act), despite its ingenuity. 19. In Adcon Electronics Pvt. Ltd. v. Daulate and Another Adcon Electronics Pvt. Ltd. v. Daulate and Another Adcon Electronics Pvt. Ltd. v. Daulate and Another AIR 2001 SC 3712 : (2001) 7 SCC 698 : (2001) Supp MLJ 30 : (2001) 4 CTC 39, the Supreme Court held as follows at p. 35 of MLJ: “ 19. We cannot also accept the contention of Mr. Chitale that the suit is for acquisition of title to the land and is a “suit for land‘. In its true sense a suit simpliciter for specific performance of contract for sale of land is a suit for enforcement of terms of contract. The title to the land as such is not the subject-matter of the suit.” Therefore, the present suit, where the reliefs prayed for are restricted only to specific performance and permanent Injunction restraining alienation, is not one for land. Hence, there is no ground for revocation of the leave already granted. The application, A. No. 3096 of 2007, It, therefore, dismissed. Application For Injunction: 20. To show that the applicant/plaintiff has a prima facie case and balance of convenience, Mr. S.V. Jayaraman, learned senior counsel for the applicant/plaintiff drew my attention to Clauses 10 and 11 of the agreement of sale dated 24.7.2006. Under Clause 10, the respondents/defendants had agreed to obtain affidavits of confirmation from the brothers of the 2nd respondent before the registration of the sale deed.
S.V. Jayaraman, learned senior counsel for the applicant/plaintiff drew my attention to Clauses 10 and 11 of the agreement of sale dated 24.7.2006. Under Clause 10, the respondents/defendants had agreed to obtain affidavits of confirmation from the brothers of the 2nd respondent before the registration of the sale deed. The agreement of sale has been filed as Document No. 23. The applicant“plaintiff claims that it was only due to his efforts that the respondents/defendants were issued with patta and chitta, copies of which are filed as document Nos. 24 and 25. The applicant/plaintiff contends that he paid advance commission to the mediators, in respect of the transaction and they issued a receipt on 1.8.2006 filed as document No. 26. According to the plaintiff, the plaintiff obtained the signatures of the defendants in the plan for sub division, plan for demolition of the building and also processed the same with the Kundrathur Panchayat Union. The applicant has produced document Nos.28, 29, 30 and 33 in order to show that she acted swiftly to go ahead with the development and also complete the transaction. The bills raised by B.S.N.L. for the periods from 1.7.2006 to 31.7.2006, 1.8.2006 to 31.8.2006, 1.9.2006 to 30.9.2006, 1.10.2006 to 31.10.2006 and 1.11.2006 to 30.11.2006 have been filed as document Nos. 27, 31, 34, 41 and 44 respectively. These bills show that calls had emanated from the telephone of the plaintiff to the telephone of the respondents on various dates. The plaintiff has also contended that she sold another property on 27.7.2006 for a consideration of Rs. 50,00,000/- for the purpose of completing the present transaction. 21. Thus the applicant/plaintiff, according to the learned senior counsel appearing for them, was fully ready and willing to perform her part of the obligations under the agreement of sale. But the plaintiff was unable to proceed on account of the fact that the defendants did not produce the affidavits of the brothers of the 2nd defendant in accordance with Clause 10 of the agreement of sale. 22. By a letter dated 18.10.2006, a copy of which is filed as document No. 36, the defendants called upon the plaintiff to complete the transaction before the expiry of the deadline, viz., 24.10.2006, set under the agreement of sale.
22. By a letter dated 18.10.2006, a copy of which is filed as document No. 36, the defendants called upon the plaintiff to complete the transaction before the expiry of the deadline, viz., 24.10.2006, set under the agreement of sale. Immediately, the plaintiff sent a telegram dated 23.10.2006, a copy of which is filed as document No. 37, informing the defendants of her readiness and willingness to complete the transaction and requesting the defendants to produce the affidavits of the brothers of the 2nd defendant. The telegrams were sent both to the residential address as well as to the official address of the defendants. But the defendants sent a reply telegram on 24.10.2006, a copy of which is filed as document No. 38, claiming that the affidavits, had already been handed over. Immediately, the plaintiff sent a registered letter dated 25.10.2006, a copy of which is filed as document No. 39, denying the claim of the defendants that the affidavits of the brothers of the 2nd defendant was ever sent. The plaintiff claims to have prepared even a draft sale deed on the same day for the approval of the defendants. 23. The entire set of documents in the form of telephone bills, plans, telegrams and the exchange of letters give a prima facie indication that the plaintiff was ready and willing to perform her part of the obligations, But unfortunately, a subsequent development took place in the form of a letter dated 3.11.2006, a copy of which is filed as document No. 42, by the plaintiff herself. By this letter, the defendants claimed that the sale agreement got terminated on the expiry of 3 months stipulated in the agreement. Not stopping at that, the defendants also called upon the plaintiff to collect the advance amount, after deducting a sum of Rs. 50,000/-. In response to this letter (plaint document No. 42), the plaintiff sent a reply dated 9.11.2006, a copy of which is filed as document No. 43. Thereafter, the defendants sent a letter dated 6.12.2006 to the plaintiff enclosing two demand drafts, one for a sum of Rs. 15,00,000/- and another for a sum of Rs. 4,50,000/- towards refund of the advance amount after deducting a sum of Rs. 50,000/- towards damages.
Thereafter, the defendants sent a letter dated 6.12.2006 to the plaintiff enclosing two demand drafts, one for a sum of Rs. 15,00,000/- and another for a sum of Rs. 4,50,000/- towards refund of the advance amount after deducting a sum of Rs. 50,000/- towards damages. This letter dated 6.12.2006 and the copies of the two demand drafts sent by the defendants are filed by the plaintiff herself as document No. 45 series. Instead of returning the demand drafts or just keeping them in safe custody, the plaintiff encashed those demand drafts and sent a legal notice dated 12.12.2006. In the said legal notice dated 12.12.2006 filed as plaint document No. 46, the plaintiff claimed that she recorded her protest in receiving the demand drafts. While in the 1st paragraph of the said legal notice dated 12.12.2006 (plaint document No. 46) the plaintiff has merely recorded her protest in receiving the demand drafts, in the last but the second paragraph, the plaintiff has admitted to have received the money under protest. Thus, it is an admitted fact that out of the total advance money of Rs. 20,00,000/- paid by the plaintiff up to 24.6.2006, the defendants have refunded a sum of Rs. 19,50,000/- after adjusting a sum of Rs. 50,000/-towards damages, by 6.12.2006. Whether such a person is entitled to have the benefit of an interim order of injunction is a question that has to be considered now. 24. It has been held by a Division Bench of this Court in H. G. Krishna Reddy and Co. v. M. M. Thimmiah and Another H. G. Krishna Reddy and Co. v. M. M. Thimmiah and Another H. G. Krishna Reddy and Co. v. M. M. Thimmiah and Another AIR 1983 Mad. 169 , that once an agreement purchaser receives back the advance money, even if it be under protest, his right to seek specific performance would get jeopardised. The relevant portion of the said judgment is as follows at p. 484 of MLJ: “ 34. ………………… Assuming that Exhibit P-1 amounted to a concluded contract for sale, the first respondent has accepted the refund amount of Rs. 13,000 knowing fully well that the second respondent has cancelled the contract.
The relevant portion of the said judgment is as follows at p. 484 of MLJ: “ 34. ………………… Assuming that Exhibit P-1 amounted to a concluded contract for sale, the first respondent has accepted the refund amount of Rs. 13,000 knowing fully well that the second respondent has cancelled the contract. In the context, therefore, the mere conditional acceptance by the use of the words without prejudice to his rights under the contract for sale cannot in any manner derogate from the fact that he had acquiesced in the breach of the contract committed by the second respondent. As was observed in Doe D. Morecraft v. Meux Doe D. Morecraft v. Meux Doe D. Morecraft v. Meux , (1824) 1 Car and P 347, what was of importance was what the first respondent did and not what he said. The first respondent had received the money back and, the effect of it cannot be taken away by the words without prejudice‘ which he said. 35…………………. We therefore hold that assuming Exhibit P-1 constituted a concluded contract for sale the acceptance of the refund amount of Rs. 13,000 the first respondent waived his right to enforce the contract and that his right cannot be preserved merely because he had accepted the amount ‘without prejudice‘ to his right.” Therefore, even if it is admitted that the plaintiff was doubly ready and willing to perform her part of the obligations and that she has a prima facie case, she does not have balance of convenience in her favour so as to entitle her to an order of interim injunction. 25. As a matter of fact, the total sale consideration fixed under the agreement of sale dated 24.7.2006 is Rs. 59,50,000/-. The advance money of Rs. 20,00,000/- paid by the plaintiff has been received back except to the extent of Rs. 50,000/-. Therefore, I do not find balance of convenience in favour of the plaintiff for the grant of an order of injunction. 26. Mr. S.V. Jayaraman, learned senior counsel, contended that under Clause 11 of the agreement of sale dated 24.7.2006 no provision was made for the termination of the agreement. Clause-11 of the agreement reads as follows: “ 11. The Vendors and the Purchaser shall have the option for specific performance to enforce this agreement under due process of law and also Rs.
S.V. Jayaraman, learned senior counsel, contended that under Clause 11 of the agreement of sale dated 24.7.2006 no provision was made for the termination of the agreement. Clause-11 of the agreement reads as follows: “ 11. The Vendors and the Purchaser shall have the option for specific performance to enforce this agreement under due process of law and also Rs. 50,000/- (Rupees Fifty Thousand only) as damages in case of default and both parties agreed for the same.” Therefore, according to the learned senior counsel, the claim of the defendants that the agreement got terminated, cannot be sustained in law. But I do not think that the said controversy can be decided, at the interlocutory stage. The interpretation to be given to Clause 11 would depend upon various factors and the parties may have to lead evidence for the said purpose. Therefore, the right of the defendants to terminate the agreement can be decided only after trial. 27. In view of my finding that the balance of convenience is not in favour of the plaintiff, no case is made out for the grant of interim injunction. Therefore, this application for injunction is dismissed.