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2013 DIGILAW 4149 (MAD)

N. P. Kandasamy v. Selvan @ N. N. Palanisamy

2013-12-10

S.PALANIVELU

body2013
JUDGMENT The case of the appellant/plaintiff is as follows:- 1.(a) The defendants are brothers. Suit properties are self-acquired and inherited by the defendants. On 2.2.1999, the plaintiff and the 1st defendant entered into an agreement of sale Ex.A.2 in respect of the suit property. As per the said agreement, the 1st defendant had agreed to sell the suit property in favour of the plaintiff. The agreement has been cancelled on 11.5.2000 by a Cancellation Deed Ex.A.3. In order to get better title, a fresh agreement of sale has been entered into between the plaintiff and the defendants on 11.5.2000 for a sale consideration of Rs.1,20,000/-which has been marked as Ex.A.4. Rs.1,00,000/- has been paid as advance to the defendants and it was agreed that the sale had to be completed within one year from the date of sale agreement. 1.(b) The plaintiff has repeatedly requested the defendants to execute and register the sale deed and the defendants were continuously evading the execution and registration of the sale deed. Hence, the plaintiff himself has issued a notice dated 5.5.2003 Ex.A.5. Though the defendants received the notices separately, they neither sent any reply nor came forward to execute and register the sale deed. The acknowledgment cards have been marked as Exs.A.6 and A.7. Again the plaintiff has sent a legal notice through counsel on 26.8.2003 under Ex.A.8, which was received by the defendants and they sent their reply notice on 15.9.2003 through their advocate stating that Ex.A.4 agreement of sale has been executed only for the purpose of borrowing loan of behalf of one Mr.Kandasamy who is said to be the Chairman of Nambiyur Panchayat. Since the defendants failed to execute and register the sale deed as agreed, the plaintiff has been constrained to file the above suit. 2. In the written statement filed by the defendants it is averred as follows: The averments in the plaint that the suit properties are self-acquired and inherited by the defendants are false. It also false to state that the plaintiff and the 1st defendant entered into an agreement and 1st defendant had agreed to sell the suit property in favour of the plaintiff and after that a fresh sale agreement of sale was executed cancelling the first agreement. It also false to state that the plaintiff and the 1st defendant entered into an agreement and 1st defendant had agreed to sell the suit property in favour of the plaintiff and after that a fresh sale agreement of sale was executed cancelling the first agreement. The real fact is that the plaintiff is a financier and the 1st defendant, to get loan from him for ex-panchayat Union Chairman one Kandasamy, stood as guarantor. At the time of getting loan, the plaintiff obtained the signatures of the said Kandasamy and himself in the blank papers and unfilled stamped pronotes. For the security purpose the plaintiff also executed and registered a sale agreement dated 2.2.1999. Again on 11.5.2000 another sale agreement was entered between the said Kandasamy and the plaintiff. The above facts would clearly show that these documents are created for security purpose and there is no Purchaser and Seller relationship and it is only a Creditor, Guarantor relationship. Hence, the above sale agreements were not executed for the sale purpose. It is false to state that as per the sale agreement dated 11.5.2000 the plaintiff is ready to pay the balance sale consideration of Rs.20,000/- and execute the sale deed on his own cost. The averment in the plaint that the defendants contacted the plaintiff in person and requested not to take any legal action and they would settle the issues between them within three months and thereafter execute the sale deed are all false. These averments were all denied in the reply notice sent by these defendants. The suit is barred by limitation. Hence the suit may be dismissed with costs. 3. On the plaintiff's side two witnesses were examined and 11 documents were exhibited and on the side of the defendants side 1st defendant was examined as D.W.1. No witness was examined on the defendants side. After perused the documents and arguments of both sides, the trial Court has decreed the suit in favour of the plaintiff. Against which the defendants have preferred appeal and the first appellate court came to a conclusion that the suit is barred by limitation and reversed the judgment and decree of the trial Court. Aggrieved against that judgment the plaintiff is before this Court by way of this second appeal. 4. The following substantial questions of law have arisen for consideration in this Second Appeal: 1. Aggrieved against that judgment the plaintiff is before this Court by way of this second appeal. 4. The following substantial questions of law have arisen for consideration in this Second Appeal: 1. After having executed the sale agreements Exs.A.2 and A.4 and registered the same, are the Defendants entitled to claim the said sale agreements executed for the purpose of security to a loan availed by some third party from the plaintiff? 2. Whether the Lower Appellate Court is correct in holding that the suit is barred by limitation without considering the fact that the Suit was filed well within a period of 3 years from the date of cause of action? 3. Whether the Lower Appellate Court is correct in dismissing the suit for Specific Performance in toto without granting alternative relief, when the Defendants specifically admit the borrowel of money from the Plaintiff? 5. The suit property is belonging to the defendants. They entered to an agreement of sale on 2.2.1999 with the plaintiff agreeing to sell the properties for a sum of Rs.75,000/- and both parties agreed to complete the same within one year from the date of sale agreement. The agreement of sale is registered one and it is marked as Ex.A.2. The defendant had purchased the properties by means of sale deed Ex.A.1 on 21.3.1994. Interalia Ex.A.2 the parties also incorporated usual default clause. But on 11.5.2000 both the parties entered into a sale agreement cancellation deed, cancelling the Ex.A.2 sale agreement, thereby Ex.A.2 stood cancelled, at the same time they entered another agreement of sale with respect to the suit properties in which the defendants again agreed to sell the properties for Rs.1,20,000/- to the plaintiff and paid an advance of Rs.1,00,000/-. The sale had to be completed within one year period from the date of sale agreement. This sale agreement is Ex.P.4. 6. Thereafter, the plaintiff himself sent notice Ex.A.5 to the defendants on 5.5.2003 calling upon them to execute the sale deed and after getting Rs.20,000/- from him forthwith. Both the defendants received notices on 6.5.2003 and 8.5.2003 as evident from postal acknowledgments Exs.A.6 and A.7. This sale agreement is Ex.P.4. 6. Thereafter, the plaintiff himself sent notice Ex.A.5 to the defendants on 5.5.2003 calling upon them to execute the sale deed and after getting Rs.20,000/- from him forthwith. Both the defendants received notices on 6.5.2003 and 8.5.2003 as evident from postal acknowledgments Exs.A.6 and A.7. When there was no reply from the defendants, the plaintiff again sent notice on 20.8.2003 Ex.A.8 to the defendants through lawyer stating that though the appellant is always ready and willing to pay the balance sale consideration the respondents have not come forward to receive and execute the sale deed, that they had not come forward to perform their part of contract and that they were also representing that they would execute the sale deed within three months and hence he was again waiting. But there was no reply from the other end. He had called upon the defendants in Ex.A-6 to come to the Nambiyur Sub Registrar Office on 5.9.2003 during office hours, where the plaintiff would be waiting and after getting the balance sale consideration of Rs.20,000/- they have to execute the sale deed, in default, he would initiate necessary proceedings before the Civil Court. 7. This notice was received by the defendants on 29.8.2003 and 2.9.2003 respectively as evident from the postal acknowledgments Ex.A.9 and A.10, much earlier to 5.9.2003. Inspite of this notice, the defendants did not turn up to the Sub-Registrar's Office to execute the sale deed. But after that on 5.9.2003 they sent reply notice to the plaintiff through their lawyer denying transaction of sale agreement of selling the properties, admitting execution of Ex.A.4 Sale Agreement. They also pleaded in the reply notice that the first defendant arranged loan to one Kandasamy who was Ex-Panchayat Union Chairman of Nambiyur and stood as guarantor for the said amount for which the plaintiff obtained signatures from the said Kandasamy in blank pro-notes and got signatures of 1st defendant on the unfilled pro-notes with affixed stamps and that the said fact is inferable from the execution of Exs.A.2 to A.4. 8. In order to prove the loan transaction between the plaintiff and the Chairman Kandasamy, the defendants should have examined the said Kandasamy, but they did not do so. 8. In order to prove the loan transaction between the plaintiff and the Chairman Kandasamy, the defendants should have examined the said Kandasamy, but they did not do so. In the cross examination, the first defendant who was examined as D.W.1 deposes that the said kandasamy is his Pangali, that he owns 10 to 15 acres of land, that he asked him money and that he arranged money from P.W.1. But in the same cross examination he deposed that he has no necessity to borrow amounts from anybody else and that if necessary he is ready to examine Kandasamy. But he did not bring Kandasamy as witness to the Court. For proving the loan transaction Kandasamy is very much essential. In the absence of his evidence and other materials, getting loan to the said Kandasamy and the allegation that the first defendant stood as guarantor to the said Kandasamy are not believable. 9. Yet another defence is taken by the defendants is time is essence of contract. It is well settled law that in order to ascertain whether the time is essence of contract, the conduct of the parties has to be seen. In this juncture, the learned counsel for the Appellant would rely upon a Division Bench decision of this Court in [S.Krishnakumar v. V. Arumugham] wherein the extract of a decision of the Honourable Supreme Court goes thus: "13. The said ratio of the Honourable Apex Court was reiterated in a recent pronouncement in Laxman Tatyaba Kankate and Another v. Taramati Harishchandra Dhatrak [ (2010) 7 SCC 717 ] wherein it has been held that in the absence of specific evidence, an adverse inference can be drawn against the defendant. It was further held that the conduct of the parties play an important role in a Suit for specific performance." As far as the facts of the present case are concerned, the plaintiff sent notice to the defendants in Ex.A.5 calling upon them to perform their part of contract on 5.5.2003 as per article 54 of the Limitation Act. Hence, time is essence of contract. 10. As regards readiness and willingness, whether the plaintiff had been ready and willing to perform his part of contract, his conduct has to be seen. Hence, time is essence of contract. 10. As regards readiness and willingness, whether the plaintiff had been ready and willing to perform his part of contract, his conduct has to be seen. Even though he did not require the defendants to execute the sale deed within one year as stipulated in the sale agreement, he sent notice on 5.5.2003 as per Article 54 of Limitation Act. Hence, he had expressed his willingness within the time limit. Further, by means of Ex.A.8 he called upon the defendants to come to Nambiyur Sub-Registrar's office on 5.9.2003. In the plaint he pleaded that on receipt of Ex.A.8 notice, the defendants did not turn up. There is no specific denial in reply notice nor in the written statement as to this pleading. These instances would show that the plaintiff was ready and willing to perform his part of contract. 11. In para 7 of the plaint it is specifically pleaded that the plaintiff is ready to pay the balance sale consideration of Rs.20000/- from the date of agreement till today. But there is no specific denial in the written statement. 12. Yet another defence in the defendants side is that the suit is barred by limitation and Article 54 of the Limitation Act is not applicable to this case. But the said provision is very much applicable. The sale agreement was executed on 11.5.2000; two notices Exs.A.4 and A.8 were sent by the plaintiff on 5.5.2003 and 26.8.2003 respectively. The suit was filed on 30.09.2003. Hence, the suit was filed before the date of expiry of Ex.A.4 within three years. Hence, the suit is filed within time. The suit is not barred by limitation. 13. In view of the observations aforestated, on an in depth study of the materials, the judgment and decree of the First Appellate Court are liable to be set aside and confirmed the decree and judgment of trial court. This Second Appeal deserves to be allowed. 14. In fine, the Second Appeal is allowed with costs throughout, granting decree for specific performance of contract in favour of the plaintiff. The plaintiff is directed to deposit the balance sale consideration of Rs.20,000/- into the Court within two months from the date of receipt copy of this order and the defendants shall execute the sale deed within two months thereafter.