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Madras High Court · body

2012 DIGILAW 2007 (MAD)

P. Selvakumar v. A. R. Dhinakaran

2012-04-20

P.R.SHIVAKUMAR

body2012
Judgment :- 1. The plaintiff has filed the present suit for specific performance directing to the defendant to execute a sale deed in favour of the plaintiff with respect to the house and ground bearing New No.2/47, part of Old Door No.47, Anandavelu Mudali Street, Perambur, Chennai – 11 comprised in R.S.No.434/59 with a land area of 2853 sq.ft and to deliver vacant possession of the schedule mentioned property, for permanent injunction restraining the defendant, his men, servants and agents in any way alienating the schedule mentioned property in favour of any third parties and for the cost of the suit. 2. Plaint averments, in brief, are as follows:- Suit property bearing Old Door No.47 part and New No.2/47, Anandavelu Mudali Street, Perambur, Chennai – 11, comprised in R.S.No.434/59 with a land area of 2853 sq.ft belongs to the defendant. He entered into an agreement with the plaintiff on 31.05.2006 agreeing to sell the property to the plaintiff for a sale consideration of Rs.47, 25,000/-and received a sum of Rs.5,00,000/- as advance on the date of agreement. It was agreed between the parties that the sale must be completed within six months from the date of agreement. Pursuant to the agreement, plaintiff mobilized the balance amount of sale consideration and was about to get the sale deed registered in his favour. But to his shock and surprise, plaintiff received a lawyers notice on 25.09.2006 from the defendant informing the plaintiff that the defendant was revoking the sale agreement, with false allegation that the plaintiff was making attempts at speculation for the sale of the suit property to third parties. In the said notice, the defendant had found fault with the plaintiff as if he was not prepared to complete the transaction and hence, the right of purchase under the agreement would stand forfeited. A suitable reply was sent by the plaintiff by a reply notice dated 10.10.2006 denying the allegations made by the defendant in his letter dated 25.09.2006 and also expressing in unequivocal terms the plaintiff's intention to purchase the schedule mentioned property and his readiness and willingness to pay the balance sale consideration and get the sale deed registered in his name. The plaintiff had also annexed a copy of the draft sale deed along with the reply notice dated 10.10.2006 for the consideration and approval of the defendant. The plaintiff had also annexed a copy of the draft sale deed along with the reply notice dated 10.10.2006 for the consideration and approval of the defendant. Though the said reply notice was received by the lawyer of the defendant on 14.10.2006 and a copy of the reply notice, which was sent directly to the defendant was received on 19.10.2006, the defendant failed to come forward to execute the sale deed in favour of the plaintiff in accordance with the terms of the suit sale agreement, pursuant to which the plaintiff published a public notice in the news paper "Daily Thanthi" and "Malaimalar" dated 03.11.2006 informing the public of the agreement and warning them that if any transaction that might be entered into with the defendant, would not be binding upon the plaintiff. By sending a legal notice stating that he was revoking the sale agreement on flimsy and untenable reasons, the defendant has denied his obligation to perform his part of the contract. On the other hand, the plaintiff has been always and is ready and willing to perform his part of the contract by making payment of the balance consideration and getting the sale deed executed and registered in his favour. The plaintiff arranged the balance sale consideration from various sources and incurred heavy expenditure in the said process and he would be put to irreparable loss and great hardship, if the transaction is not completed. Hence, the plaintiff has approached this Court with the present suit for the relief of specific performance directing the defendant to execute a sale deed in favour of the plaintiff in respect of the suit property after receiving the balance sale consideration of Rs.42,25,000/-and directing execution of the sale deed by the Court in favour of the plaintiff and directing the defendant to deliver vacant possession of the suit property to the plaintiff and for a permanent injunction restraining the defendant, his men, servants and agents in any way alienating the suit property in favour of third parties. 3. 3. The suit was resisted by the defendant by filing a written statement containing the following contentions:- The facts that suit property bearing New Door No.2/47 (Old Door No.47 part) Anandavelu Mudali Street, comprised in part of R.S.No.434/59 measuring an extent of 2853 sq.ft belongs to the defendant and that the defendant entered into an agreement with the plaintiff on 31.05.2006 at Chennai for the sale of the same for a sum of Rs.47,25,000/- and received a sum of Rs.5,00,000-as advance and that both the parties to the agreement agreed that the transaction should be completed within six months are all not disputed. Defendant's brother A.R. Vikram and his mother filed a suit on the file of the Subordinate Court, Vellore in O.S.No.226 of 1995 claiming a share in the suit property. Before entering into the sale agreement, plaintiff agreed to settle the above said dispute. But after the date of agreement, plaintiff changed his mind and expected the defendant to settle the dispute regarding the suit property in violation of the terms and conditions of the agreement. The plaintiff never intended to pay the balance amount of the sale consideration and get the sale deed executed in his favour. On the other hand, one Anandan approached the defendant by introducing himself as a prospective purchaser of the suit property. Pursuant to the negotiations between Anandan and the defendant, the said Anandan approached the plaintiff, introduced him as his brother and requested the defendant to execute the sale agreement in favour of the plaintiff. Later on, defendant came to know that the said Anandan was a land broker and mediator and after the date of agreement the plaintiff allowed third parties to come and visit the suit schedule property and also to inspect the title deeds. The intention of the plaintiff was to sell the suit schedule property to third parties even before completion of the sale with the defendant. It is true that the plaintiff issued a legal notice on 10.10.2006. By the issuance of a legal notice on 10.10.2006, plaintiff violated the sale agreement and revealed the fact that he did not intend to pay the balance sale consideration and complete the sale transaction. Hence, the sale agreement was revoked and a notice was issued on 25.09.2006. It is true that the plaintiff issued a legal notice on 10.10.2006. By the issuance of a legal notice on 10.10.2006, plaintiff violated the sale agreement and revealed the fact that he did not intend to pay the balance sale consideration and complete the sale transaction. Hence, the sale agreement was revoked and a notice was issued on 25.09.2006. For the said notice alone the plaintiff issued a reply denying the allegations made by the defendant in his notice and stating that the plaintiff was ready and willing to purchase the suit property. A rejoinder was also sent on 19.10.2006 after the receipt of the plaintiff's notice dated 10.10.2006. The plaintiff is a Real Estate broker, who brings several parties to purchase the properties, not with intention to buy the same for himself. The plaint averments that the plaintiff arranged the balance sale consideration from various sources and incurred heavy expenditure in the said process and that he would be put to irreparable loss and great hardship if the transaction is not completed, are all false. It is for the plaintiff to prove the same and that he did have the means to pay the sale consideration and complete the sale process. As the plaintiff did not show any interest in completing the transaction and he was not ready and willing to purchase the suit property, the defendant is prepared to return the advance amount of Rs.5,00,000/- together with interest to the plaintiff . As such the suit should be dismissed. 4. Based on the above pleadings the following issues have been framed: "1. Whether the plaintiff was ready and willing to perform his part of the contract of sale?" 2. Whether the Defendant is entitled to revoke the sale agreement? 3. Whether the plaintiff is entitled to the decree of specific performance? 4. Whether the plaintiff has sufficient source for paying the entire sale consideration for purchase of the suit schedule property and complete the sale transaction? 5. To what relief the plaintiff is entitled? 5. The plaintiff was examined as the sole witness (PW1) and produced 8 documents were marked as Exs.P1 and P8 on the side of the plaintiff to prove the plaint averments. The defendant was examined as the sole witness (DW1) on his side and no document was produced on the side of the defendant. 6. 5. The plaintiff was examined as the sole witness (PW1) and produced 8 documents were marked as Exs.P1 and P8 on the side of the plaintiff to prove the plaint averments. The defendant was examined as the sole witness (DW1) on his side and no document was produced on the side of the defendant. 6. It is not in dispute that the defendant is the owner of the property bearing Old Door No.47 part and New No.2/47, Anandavelu Mudali Street, Perambur, Chennai – 11, comprised in R.S.No.434/59; that he entered into an agreement with the plaintiff on 31.05.2006 for the sale of the said property to the plaintiff for a sale consideration of Rs.47,50,000/- and that on the date of agreement, he received a sum of Rs.5,00,000/-as advance and part consideration. It is also not in dispute that both the parties agreed that the sale transaction should be completed within six months from the date of agreement. The agreement was entered into on 31.05.2006 and hence, the period of six months would expire on 30.11.2006. Contending that the plaintiff was ready and willing to perform his part of the contract under the suit agreement and he had mobilized funds to make payment of the balance sale consideration and get the sale executed and registered in his name and that on the other hand, the defendant chose to unilaterally revoke the agreement by issuing a notice even before the expiry of the said period of six months and the same was the reason why the plaintiff was constrained to approach the Court with the suit for specific performance, the plaintiff has filed the present suit. Issue No.2: 7. The plaintiff as PW1 has deposed in conformity with the plaint averments. The original agreement for sale dated 31.05.2006 to which the plaintiff and the defendant are parties has been marked as Ex.P1. The total sale consideration as evidenced by Ex.P1 is Rs.47,25,000/- and a sum of Rs.5,00,000/- was paid as advance on the date of agreement itself. The balance sale consideration payable as per the agreement is Rs.42,25,000/-. Within four months thereafter, the defendant seems to have issued a notice through his lawyer J. Janarthanan under Ex.P2 admitting the execution of Ex.P1 agreement and the other clauses contained therein but revoking the said agreement. The balance sale consideration payable as per the agreement is Rs.42,25,000/-. Within four months thereafter, the defendant seems to have issued a notice through his lawyer J. Janarthanan under Ex.P2 admitting the execution of Ex.P1 agreement and the other clauses contained therein but revoking the said agreement. However, the defendant in the said notice chose to state that he learnt that the plaintiff had been taking steps to enter into another sale agreement for a higher price in respect of the suit property with another person, which according to him was in violation of Clause 5 of the suit Sale agreement, as the reason for his unilateral revocation of sale agreement. Even though the defendant chose to unilaterally revoke the agreement on the supposed violation of clause 5 of the agreement by the plaintiff, the defendant did not chose to return the advance amount admittedly received by him or even a portion of the same after adjusting a portion as damages. On the other hand, the defendant chose to simply call upon the plaintiff to negotiate the amount which he would be entitled to receive on the revocation of the sale agreement. The concluding sentence of the notice reads as follows: "Under these circumstances my client hereby revokes the said sale agreement and require you to negotiate the amount which you are entitled to receive and give response to this notice to terminate the sale agreement without any legal consequences thereof." 8. It seems a suitable reply was sent by the plaintiff through his advocate S. Jeevanandham stating that the defendant was not entitled to unilaterally revoke the agreement and expressing his readiness and willingness to make payment of the balance sale consideration and get the sale deed executed in his favour. Along with the reply notice, a draft sale deed was also sent to the advocate for the defendant. Copy of the reply notice dated 10.10.2006 along with a the copy of the draft sale deed annexed to the said notice has been produced as Ex.P3. The receipt of the said reply notice and the draft sale deed has not been disputed. In fact, the said notice was sent to the defendant's lawyer and a copy was also sent to the defendant directly. Both of them were received by the addressees as evidenced by the postal acknowledgment cards marked as Exs.P4 and P5. The receipt of the said reply notice and the draft sale deed has not been disputed. In fact, the said notice was sent to the defendant's lawyer and a copy was also sent to the defendant directly. Both of them were received by the addressees as evidenced by the postal acknowledgment cards marked as Exs.P4 and P5. Though the defendant might have stated in his written statement that a rejoinder was sent to the reply notice dated 10.10.2006 and such rejoinder notice was issued on 19.10.2006, neither the copy of the rejoinder notice nor the postal acknowledgment card in proof of service of the same has been produced by the defendant. On the other hand, clear evidence has been adduced by the plaintiff to the effect that after the receipt of the reply notice dated 10.10.2006, no further notice in reply to the said reply notice dated 10.10.2006 was issued by the defendant. It is obvious from the evidence of PW1 and Exs.P6 and P7 that since there was no response from the defendant for the reply notice dated 10.10.2006, the plaintiff caused public notice in newspapers informing the public that any transaction with the defendant in respect of the suit property would be subject to the right of the plaintiff under the suit agreement and such publication was made in the Chennai edition of "Daily Thanthi" on 03.11.2006 and Chennai edition of "Malaimalar" on 03.11.2006, which have been marked as Exs.P6 and P7 respectively. 9. The plaintiff has come forward with a clear plea that the parties to the suit agreement agreed that the sale transaction would be completed within 6 months from the date of agreement and that he was ready and willing to make payment of the balance sale consideration and get the sale deed executed in his favour, whereas the defendant with ulterior motive chose to issue a notice within four months from the date of agreement stating that he was cancelling the sale agreement and that the same was suitably replied by the plaintiff under his reply notice, a copy of which has been marked as Ex.P3. It has also been made clear by the plaintiff in the pleadings and also in his testimony that the plaintiff not only issued the reply notice disputing the propriety of the act on the part of the defendant purporting to revoke the sale agreement and expressing his readiness and willingness to make payment of the balance sale consideration and get the sale deed executed in his favour in terms of the condition stipulated in the suit agreement, but also chose to send a draft sale deed for the consideration and approval of the defendant. All these facts have been admitted by the defendant also. Even after the receipt of the said reply notice in which the plaintiff not only expressed his readiness and willingness to complete the transaction by making payment of the balance sale consideration but also sent a draft sale deed for consideration and approval of the defendant, the defendant did not chose to issue any reply either refuting the contention of the plaintiff made in his reply notice or expressing his readiness to execute the sale deed on receipt of the balance sale consideration. A perusal of Ex.P2 notice dated 25.09.2006, under which the suit sale agreement was sought to be revoked by the defendant, will show that the defendant invented a reason for going back from the commitment and revoke the agreement unilaterally. The reason thus invented by him is that he had learnt that the plaintiff was taking steps to enter into a sale agreement with another person for a higher price in respect of the suit property. In the said notice, in the paragraph assigned Serial No.3, the defendant has stated that the plaintiff violated Clause No.5 of the sale agreement by approaching a third party to whom the plaintiff promised to sell the suit property for a higher price. The said reason assigned by the defendant in the said notice as a ground for revoking the agreement has not been fully substantiated. 10. The said reason assigned by the defendant in the said notice as a ground for revoking the agreement has not been fully substantiated. 10. On the other hand, even if it is assumed that the plaintiff was a Real Estate broker and he entered into an agreement with the defendant for the purchase of the suit property with the intention of selling it to a third person for a higher price and the plaintiff made attempt to secure a purchaser who would offer a higher price for purchasing the suit property, the same is not in violation of any one of the conditions found in Ex.P1 agreement for sale. Such an act on the part of the purchaser under the agreement for sale is also not an act which is against law. In fact, in the agreement for sale, it has been agreed that on payment of the balance sale consideration within the period stipulated in the agreement, the defendant should execute a sale deed either in favour of the plaintiff or his nominee and handover possession. When the agreement does not contain a clause that the plaintiff cannot seek execution of the sale deed in any other name than in his own name and on the other hand it contains a clause that the sale deed must be executed either in favour of the plaintiff or in favour of his nominee, the contention of the defendant that the attempts made by the plaintiff to secure a purchaser for a higher price shall be in violation of the conditions of the agreement, cannot be countenanced. In fact, while deposing as DW1, the defendant himself has candidly admitted that there is no clause in the agreement that if the plaintiff (purchaser) makes attempts to secure a third party purchaser for a better price, his right to get the sale deed executed either in his favour or in favour of his nominee will get extinguished. The defendant has also admitted that the agreement contains a clause enabling the plaintiff (purchaser) under the agreement to get the sale deed executed on payment of balance sale consideration either in his favour or in favour of his nominee which shall include a prospective purchaser secured by the plaintiff for a price which will give him a margin over the sale price agreed under the suit agreement for sale. Therefore, the very reason assigned by the defendant for the unilateral revocation of the agreement for sale is untenable and the same has got to be held invalid and insufficient for giving him a right to unilaterally revoke the agreement. Issue Nos.1, 3, 4 and 5: 11. Clause 10 of the Ex.P1 sale agreement is to the effect that if the defendant (vendor) is ready to complete the transaction within the time stipulated in the agreement and on the other hand the plaintiff (purchaser) commits default, then the defendant is entitled to deduct a sum of Rs.50,000/- as damages out of the advance amount of Rs.5,00,000/-paid by the plainitff and repay the balance amount of Rs.4,50,000/- immediately to the plaintiff (purchaser). In the same clause, it has also been provided that in case the purchaser shall be ready and on the other hand the vendor (defendant) commits default, then the plaintiff (purchaser) shall be entitled to the refund of advance amount of Rs.5,00,000/- together with interest with a further sum of Rs.50,000/- as damages. Even though a liquidated damages of Rs.50,000/-has been mentioned in clause 10 of the agreement, in the very same clause it has been provided that the same shall be without prejudice to any one of the parties approaching the Court by filing a suit for specific performance of the contract. In this case, as pointed out supra, the defendant chose to issue a notice on 25.09.2006 expressing his intention to unilaterally revoke the agreement on a flimsy ground that the plaintiff was trying to sell the property to a third person for a higher price. At the cost of repetition it is pointed out that the purchaser under the agreement, in the absence of a clause in the agreement to the contrary, shall always be entitled to arrange for a purchaser of the property for a price to be agreed upon between such third party and the purchaser under the agreement for sale, regarding which the vendor under the agreement for sale shall not have anything to say. 12. The only point that arises for consideration in such cases shall be whether the time was agreed to be the essence of the contract and if so, whether the party filing the suit was ready and willing to perform his part of the obligations under the contract within the stipulated time. 12. The only point that arises for consideration in such cases shall be whether the time was agreed to be the essence of the contract and if so, whether the party filing the suit was ready and willing to perform his part of the obligations under the contract within the stipulated time. Of course, it is true that normally the time prescribed in an agreement for the sale of immovable property shall not be construed to be an essential condition of the agreement unless the contents of the agreement reveal the unequivocal intention of the parties and their consensus that the time should be the essence of the contract. In this case, the said question does not assume importance because both the parties have proceeded on the assumption that the time of six months stipulated in the agreement was agreed to be the essence of the contract. When that is so, whether the plaintiff was ready to complete the transaction by fulfilling his obligations under the agreement within the time of six months specified in the agreement and whether the defendant is justified in revoking the agreement within that period of six month for the reasons stated in Ex.P2 notice have to be considered. As pointed out above, the reason assigned in Ex.P2 notice for the unilateral revocation of the agreement by the defendant is untenable and unsustainable. On the other hand, it is quite obvious from Ex.P3-reply notice that the plaintiff was not only ready and willing to pay the balance sale consideration and get the sale deed executed in his favour within the time stipulated in the agreement for sale, but also sent a draft sale deed for the consideration and approval of the defendant in an attempt to see that the sale transaction would be completed within the period stipulated in the agreement. It is also obvious from the evidence that despite the receipt of said reply notice and the draft sale deed, the defendant kept mum and drove the plaintiff to file the suit for specific performance. In fact, the suit itself has been filed on 09.11.2006 within six months from the date of agreement showing that the suit was filed well within the period mentioned in the agreement as the period for completion of the transaction. 13. In fact, the suit itself has been filed on 09.11.2006 within six months from the date of agreement showing that the suit was filed well within the period mentioned in the agreement as the period for completion of the transaction. 13. It is also pertinent to note that while the defendant, who chose to issue Ex.P2 notice expressing his decision to revoke the agreement, has not chosen to act in accordance with the terms of the agreement by returning the advance amount after deducting the liquidated damages, which he would have been entitled, in the event of the plaintiff having committed default. A new case was sought to be projected by the defendant in the written statement by stating that before the suit sale agreement came to be executed, the defendant's mother and brother had filed a suit on the file of the subordinate Court, Vellore in O.S.No.226 of 1995 claiming share in the suit property and that the plaintiff, who was very much aware of the pendency of the suit, undertook to settle the dispute on his own by having a negotiation with them, but later on went back from the commitment and insisted upon the defendant settling the dispute with his mother and brother. The said contention has been refuted by the plaintiff in his evidence as PW1. Nothing has been mentioned regarding such undertaking in the suit sale agreement Ex.P1. Not even a reference has been made to the above said suit allegedly filed by the mother and brother of the plaintiff. It is also pertinent to note that even in Ex.P2 notice defendant has not referred to any such suit and the undertaking of the plaintiff on himself to settle the dispute with the mother and the brother of the defendant. Absence of reference to such a dispute and the suit in the agreement and in the notices marked as Exs.P1 and P2 respectively, has been admitted by the defendant while he was examined as DW1. In addition, a copy of the parent sale deed under which the defendant had purchased the suit property, which had been given to the plaintiff, has been produced and marked as Ex.P8 through DW1 during cross-examination. It shows that defendant alone had purchased the property on 08.03.1979. In addition, a copy of the parent sale deed under which the defendant had purchased the suit property, which had been given to the plaintiff, has been produced and marked as Ex.P8 through DW1 during cross-examination. It shows that defendant alone had purchased the property on 08.03.1979. No document showing the existence of such a dispute between the defendant and his mother and brother and pendency of any such suit has been produced by the defendant. A consideration of a pleading and the evidence adduced by the defendant will make it obvious that at the first instance he wanted to revoke the agreement for sale on one pretext which is unsustainable and subsequently he made an attempt to make an improved version in his defence plea in the written statement by adding one more ground to the effect that the plaintiff undertook to settle the dispute the defendant was having with the mother and brother of the defendant, but contrary to the undertaking the plaintiff wanted the defendant to settle the same. Be that as it may, when the plaintiff, the purchaser under the suit agreement came forward to purchase the property for the agreed price within the period stipulated in the agreement by issuing Ex.P3 reply notice to which also a draft sale deed was annexed for the consideration of the defendant, it is not open to the defendant (vendor) to contend that there was a cloud on his title and the plaintiff was not ready to get the transaction completed unless the cloud was cleared. There was not even a whisper in Ex.P2 notice as to the alleged dispute between the defendant on the one hand and his mother and brother on the other hand and on the alleged insistence made by the plaintiff for the settlement of the said dispute as a condition for the completion of the sale transaction. Without adverting to any such dispute, the plaintiff seems to have expressed his readiness and willingness to make payment of the balance sale consideration and get the sale deed executed in his favour. Still the defendant was not prepared and that is the reason why the plaintiff has been compelled to approach the Court for the relief of specific performance. Without adverting to any such dispute, the plaintiff seems to have expressed his readiness and willingness to make payment of the balance sale consideration and get the sale deed executed in his favour. Still the defendant was not prepared and that is the reason why the plaintiff has been compelled to approach the Court for the relief of specific performance. Therefore, this Court has to come to a necessary conclusion that the plaintiff has made the necessary pleading that he was always ready and willing and continues to be ready and willing to perform his part of the contract under the suit sale agreement and on the other hand, it was the defendant who was not ready and willing. 14. Of course, it is true that the defendant suffered an ex-parte decree and within the time prescribed in the ex-parte decree, the plaintiff did not deposit the balance sale consideration to the credit of the suit. But subsequently on the application of the defendant, the said decree came to be set aside for the trial of the suit on merit. The mere fact that the plaintiff did not deposit the balance sale consideration in terms of the decree which came to be subsequently set aside on an application made by the defendant and the further fact that the plaintiff has not chosen to deposit the sale consideration to the credit of the suit even after the defendant entering appearance and filing his written statement, will not be sufficient to negative the plaintiff's readiness and willingness to perform his part of the contract. A plaintiff, who seeks specific performance, need not deposit the amount to the credit of the suit till he is called upon by the Court to do so. Suffice to show that he is always ready, willing and capable of arranging funds to make payment as and when called upon by the Court. 15. In this case, contrary to the clear evidence adduced on the side of the plaintiff in proof of his readiness and willingness to perform his part of the contract, there is no reliable evidence adduced by the defendant to show that the plaintiff was not prepared to arrange for the funds to make payment of the balance sale consideration when called upon. In fact, the defence plea of the defendant is not that of absence of readiness and willingness on the part of the plaintiff. It was the defendant who was not ready and willing to perform his part of the obligations under the suit agreement for sale. The same is manifest from his plea in the written statement that he is ready to return the advance amount of Rs.5 lakhs with interest to the plaintiff . He has not stated that he is entitled to deduct any amount as damages from the advance amount on the ground that there was default on the part of the plaintiff. The same alone will show that it was the defendant who was not ready and willing and on the other hand, the plaintiff was always ready and willing and continues to be ready and willing to perform his part of the obligations under the agreement for sale. The plaintiff has made the necessary pleadings to be made under Section 16(c) of the Specific Relief Act and proved the same by sufficient evidence. 16. For all the reasons stated above, this Court comes to the conclusion that the plaintiff has made out a clear case for the grant of the relief of specific performance of the contract. 17. In the result, the suit is decreed as prayed for in respect of all the reliefs. The plaintiff is granted two months time from today for deposit of the balance sale consideration and the defendant is directed to execute the sale deed in favour of the plaintiff within one month thereafter.