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2014 DIGILAW 2270 (MAD)

A. R. Dinakaran v. B. Selvakumar

2014-07-31

M.M.SUNDRESH, SATISH K.AGNIHOTRI

body2014
Judgment : 1. The defendant before the learned Single Judge is the appellant herein. The suit filed by the respondent seeking the relief of specific performance was decreed. Challenging the correctness of the judgment and decree of the learned Single Judge, this appeal has been preferred. 2. The appellant herein is the owner of the suit property situated in Old Door No.47/30, New No.2/47, Anandavelu Mudali Street, Perambur, Chennai 600 011. An agreement was entered into between the parties on 31.05.2006 under Ex.P.1, by which, it was agreed that the suit property will be sold in favour of the respondent by the appellant for a total sum of Rs.47,25,000/-. The advance of Rs.5 lakhs was also paid by the respondent and acknowledged in the agreement of sale itself. 3. As per the covenants contained under Ex.P.1, the respondent will have to pay the balance sale consideration of Rs. 42,25,000/- within six months from the date of Ex.P.1, agreement of sale dated 31.05.2006. Under Clause 5, the sale deed has to be executed either in the name of the respondent or any person nominated by him. Under Clause 10, in the event of the appellant being ready for completing the sale transaction within the stipulated time and the respondent failing to comply with his agreed terms, the sum of Rs.5 lakhs recieved by him as advance, will have to be returned to the respondent, after deducting a sum of Rs.50,000/-as damages. Similarly, in the event of the respondent being ready to purchase the property within the time stipulated in the agreement and the appellant failing to comply with his agreed terms, the appellant will have to return the advance amount of Rs.5 lakhs to the respondent, together with Rs.50,000/-being damages. Apart from the same, both the parties can work out their remedy towards execution of the sale deed before the Court, seeking specific performance. 4. The appellant sent a notice dated 25.09.2006 under Ex.P.2 to the respondent, cancelling the agreement for sale unilaterally. Under the said document, the appellant has contended that the respondent had been taking steps to enter into another sale agreement for a higher sale price with respect to the suit property with a third party, which is illegal. The appellant came to know of this information through reliable sources. Under the said document, the appellant has contended that the respondent had been taking steps to enter into another sale agreement for a higher sale price with respect to the suit property with a third party, which is illegal. The appellant came to know of this information through reliable sources. The respondent, by misinterpreting the sale agreement, as if it was a complete sale deed, had been receiving advance amount from various persons. Therefore, the legal notice was issued on the ground that the respondent was not prepared to complete the sale transaction within the meaning of clause 10 of the sale agreement, as he had already created a verbal encumbrance over the suit property by entering into an unlawful sale agreement with a third party. 5. On receipt of the legal notice issued under Ex.P.2 dated 25.09.2006, a reply dated 10.10.2006 under Ex.P.3 was given by the respondent through his lawyer enclosing a draft sale deed, being the allegations made. It has been stated therein that the respondent is ready and willing to execute the sale deed. It has been further stated that the respondent is ready and willing to pay the balance consideration immediately. The allegation made regarding the sale agreement for a higher sale price with a third party was also denied. It has been specifically stated therein that the respondent had already arranged the balance sale consideration. 6. Pursuant to Ex.P.3, reply notice, the respondent effected a paper publication (Ex.P.6) in a vernacular daily newspaper on 03.11.2006. Similarly, under Ex.P.7, another paper publication was made in the evening newspaper on the very same day. Thereafter, even before the expiry of six months as stipulated under Ex.P.1, agreement for sale, the respondent had filed a suit in C.S. No.830 of 2006 seeking the relief of specific performance. 7. The following issues were framed by the learned Single Judge: 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 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? 8. 2. Whether the defendant is entitled to revoke the sale agreement? 3. Whether 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? 8. The respondent, apart from examining himself as the sole witness, marked eight documents, which were marked as Exs.P.1 to P.8. The appellant examined himself as D.W.1. Apart from the same, no documents were marked on the side of the appellant. 9. The learned Single Judge, after considering the relevant materials and after taking note of the arguments advanced, decreed the suit, as prayed for. Challenging the judgment and decree rendered in C.S. No.830 of 2006, the appellant, being the defendant in the suit, filed this appeal before us. 10. During the pendency of the suit, the appellant was set ex parte. The learned Single Judge, while granting the ex parte decree on 31.07.2009, granted time till 07.08.2009, i.e. a period of seven days, to deposit the remaining amount. The respondent did not comply with the same and in the meanwhile, the appellant filed an application to set aside the ex parte decree, which was allowed thereafter. After the decree was passed on contest, the respondent has deposited the entire amount awarded by the learned Single Judge, which lies in the deposit. Submissions of the learned counsel for the appellant: 11. Mr. After the decree was passed on contest, the respondent has deposited the entire amount awarded by the learned Single Judge, which lies in the deposit. Submissions of the learned counsel for the appellant: 11. Mr. A.Palaniappan, learned counsel for the appellant submitted that the respondent, being the plaintiff, has not proved his readiness and willingness to execute the sale deed; such a requirement is mandated under Section 16(c) of the Specific Relief Act; the legal notice issued under Ex.P.2 by the appellant will have to be seen in the context in which it was issued; the learned Single Judge has misconstrued the covenants contained in Ex.P.1; clause 5 of the covenant which states that the sale deed has to be executed either in the name of the respondent or any other person nominated by him, cannot be construed as mandatory; under clause 10, the respondent is only entitled for damages, apart from advances paid, in the event of the appellant repudiating the agreement; the appellant did not execute the sale deed in view of the fact that the respondent has entered into an oral agreement with third parties; therefore, the respondent, being a middleman, would not be having sufficient funds to pay the remaining sale consideration; the respondent did not comply with the condition imposed in the ex parte decree; he has also deposed that he did not have sufficient funds at the relevant point of time and in view of the said categorical admission, which should be construed as a relevant fact, as contemplated under Section 17 of the Indian Evidence Act, the learned Single Judge ought to have dismissed the suit. 12. In support of his submissions, the learned counsel for the appellant has made reliance upon the following decisions: 1. 2010 (6) CTC 652 Man Kaur (D) by LRs vs. Hartar Singh Sangha 2. 2008 (4) CTC 494 .Fathima Majeed vs. Subhapratha Ravikumar 3. (1993) 1 SCC 519 Chand Rani (Smt) (Dead) by LRs vs. Kamal Rani (Smt) (Dead) by LRs 4. (1997) 3 SCC 1 K.S. Vidyanadam and Others vs. Vairavan 5. (2011) 9 SCC 147 Citadel Fine Pharmaceuticals vs. Ramaniyam Real Estates Private Ltd. 6. 1995 MLJ (SC) 118 N.P. Tirugnanam (Died) by LRs vs. Dr. R. Jagan Mohan Rao and Others 7. (2011) 12 SCC 18 Saradamani Kandappan vs. S. Rajalakshmi and Others 8. (1997) 3 SCC 1 K.S. Vidyanadam and Others vs. Vairavan 5. (2011) 9 SCC 147 Citadel Fine Pharmaceuticals vs. Ramaniyam Real Estates Private Ltd. 6. 1995 MLJ (SC) 118 N.P. Tirugnanam (Died) by LRs vs. Dr. R. Jagan Mohan Rao and Others 7. (2011) 12 SCC 18 Saradamani Kandappan vs. S. Rajalakshmi and Others 8. (2010) 1 SCC 287 A.K. Lakshmipathy (Dead) and Others vs. Rai Sahed Pannalal H. Lahoti Charitable Trust and Others 9. 2009 (5) CTC 365 Inderchand Jain (D) through LRs vs. Motilal (D) through LRs 10. LAWS (SC) 1996-4-105 His Houness Acharya Swami Ganesh Dassji vs. Sita Ram Thapar 11. 2004 (4) CTC 375 Ranganatha Gounder vs. Sahadeva Gounder and Others 12. (2010) 2 MLJ 253 R. Rajaram and another vs. T.R. Maheswaran 13. (2006) 2 MLJ 651 Yesudass (died) and Others vs. Henry Victor and Others 14. 2007 (1) CTC 243 G. Ramalingam vs. T. Vijayarangam 15. 2011 (3) CTC 205 S. Narayanappa vs. Sampangi Ramayya and 2 others 16. 2003 (1) CTC 355 Arunachala Mudaliar vs. Jayalakshmi Ammal and another 17. 2010 (3) CTC 411 Manoharakumari vs. Anitha and another 18. 1997 (I) CTC 360 Seeni Ammal vs. Veerayee Ammal" Submissions of the learned Senior Counsel for the respondent: 13. Mr. 2011 (3) CTC 205 S. Narayanappa vs. Sampangi Ramayya and 2 others 16. 2003 (1) CTC 355 Arunachala Mudaliar vs. Jayalakshmi Ammal and another 17. 2010 (3) CTC 411 Manoharakumari vs. Anitha and another 18. 1997 (I) CTC 360 Seeni Ammal vs. Veerayee Ammal" Submissions of the learned Senior Counsel for the respondent: 13. Mr. M.S. Krishnan, learned Senior Counsel appearing for the respondent submitted that the learned Single Judge has considered the entire issues, both in law and on facts, in extenso; while considering the discretionary relief as contemplated under Section 20 of the Specific Relief Act, the conduct of the defendant/seller also will have to be seen; the respondent has satisfied the requirement under Section 16(c) of the Specific Relief Act; a statement culled out in the cross-examination, cannot be termed as a conclusive proof; the appellant has taken contrary stands; a specific plea has been taken by him that a suit has been filed by his brother and mother against him regarding the suit property, without any particulars; even otherwise, the said contention itself shows the intention of the appellant; there is no proof pertaining to the allegations made regarding the agreement having been entered into between the respondent and the third parties; the respondent has shown his readiness and willingness through his reply notice in which a draft sale deed has been enclosed; a specific stand has been taken therein that the respondent was willing even at that point of time which is prior to the period of six months, as mentioned in Ex.P.1, sale agreement; the suit itself has been filed after issuing publications in the local newspapers within six months from the date of execution of Ex.P.1, sale agreement; it is not necessary that the respondent will have to keep the money all the time; the order passed by the learned Single Judge in the ex parte decree could not be complied with due to certain practical difficulties in obtaining the copy of the judgment and decree; even otherwise, evidence will have to be taken as it is given at the relevant point of time; in the evidence, P.W.1 has stated that he did not have money at the time of passing the decree; such a stray statement culled out from the cross examination cannot be the sole basis to deny the relief of specific performance; the attending circumstances will have to be taken cognizance of; the delay was due to the conduct of the appellant in dragging on the case and the respondent has promptly deposited the amount as per the decree. 14. In support of his contentions, the learned Senior Counsel appearing for the respondent has made reliance upon the following judgments: 1. AIR (37) 1950 Privy Council 90 The Bank of India Ltd. And Others vs. Jamsetji A.H. Chinoy and M/s. Chinoy and Co. 2. 1969 (3) SCC 120 Nathulal vs. Phoolchand 3. AIR 1996 SC 2510 Sukhbir Singh and others vs. Brij Pal Singh and Others 4. AIR 1997 SC 463 Pandurang Ganpat Tanawade vs. Ganpat Bhairu Kadam and Others 5. (1997) 2 SCC 200 Sukhbir Singh and Others vs. Brij Pal Singh and Others 6. AIR 2000 SC 3106 Govind Ram vs. Gian Chand 7. (2004) 8 SCC 689 Swarnam Ramachandran (Smt.) and another vs. Aravacode Chakungal Jayapalan 8. AIR 2009 SC 2157 Azhar Sultana vs. Rajamani and Others 15. During the course of the hearing, this Court suggested for an amicable settlement between the parties. Accordingly, the learned Senior Counsel appearing for the respondent, on instructions, submitted that the respondent is ready and willing to pay a further sum of Rs.10 lakhs, without prejudice to the contentions on merits. However, the said offer made was not accepted by the appellant. Thereafter, we heard the learned counsels on either side, at length. 16. We are not inclined to reiterate the settled principles of law governing a suit filed seeking the relief of specific performance. Under Section 16(c) of the Specific Relief Act, 1963, the plaintiff/buyer will have to mandatorily satisfy the Court that he has been ready and willing to perform his part of the contract. This readiness and willingness will have to be extended throughout the suit and sometimes, even thereafter. The jurisdiction to a decree for specific performance is discretionary and the said discretion will have to be exercised on sound and reasonable grounds, based on judicial principles. However, it is not necessary that the entire amount of consideration should be kept ready by the plaintiff, all the time. What is sufficient is the capacity of the intending purchaser to buy the property. While exercising its discretion, the Court is supposed to look into the conduct of the parties. While dealing with the conduct of the parties, the conduct of the defendant as against the plaintiff is also equally relevant. Bearing in mind, the above said principles, let us analyse the facts of the case. 17. While exercising its discretion, the Court is supposed to look into the conduct of the parties. While dealing with the conduct of the parties, the conduct of the defendant as against the plaintiff is also equally relevant. Bearing in mind, the above said principles, let us analyse the facts of the case. 17. The execution of Ex.P.1 dated 31.05.2006 between the parties is not in dispute. A perusal of Ex.P.1 would show that the appellant has received a sum of Rs.5 lakhs by way of advance. Under clause 5, the sale deed has to be executed either in the name of the respondent or any other person nominated by him. Therefore, it cannot be said that the said clause has been incorporated by force or coercion. In view of the said clause, the very basis upon which the legal notice was issued terminating the agreement unilaterally by the appellant, cannot be accepted. 18. Now, coming to clause 10, it merely states that in the event of the appellant being ready for completing the sale transaction within the stipulated time and the respondent failing to comply with his agreed terms, the sum of Rs.5 lakhs recieved by him as advance, will have to be returned to the respondent, after deducting a sum of Rs.50,000/-as damages. From that, the learned counsel for the appellant submitted that it is not open to the respondent to file the suit. Clause 10 contains another provision as well. It stipulates, in no uncertain terms, that apart from the earlier provision, either of the parties shall be entitled to approach the Court for the purpose of filing a suit for specific performance to enforce the agreement. Therefore, on a conjoint reading of clause 5 and clause 10 of Ex.P.1, sale agreement, it is abundantly clear that the appellant did not wish to execute the sale deed and in such a case, it is well open to the respondent to seek remedy through Court. 19. The appellant issued a legal notice under Ex.P.2. A perusal of the legal notice would show that it has been issued on the ground that the respondent had been taking steps to enter into another sale agreement for a higher sale price, which, according to the appellant, is illegal. 19. The appellant issued a legal notice under Ex.P.2. A perusal of the legal notice would show that it has been issued on the ground that the respondent had been taking steps to enter into another sale agreement for a higher sale price, which, according to the appellant, is illegal. The legal notice further proceeds to state that, contrary to clause 5 of the sale agreement, the respondent has approached third parties and had been receiving advance amounts, as if the agreement for sale is a sale deed. Accordingly, the appellant informed the respondent about his desire to revoke the sale agreement for which he was threatened. Under those circumstances, the notice under Ex.P.2 was issued revoking the sale agreement by requiring the respondent to negotiate the amount, which he was entitled to receive. 20. A reply notice dated 10.06.2006 was given by the respondent under Ex.P.3, stating that the respondent is ready and willing to execute the sale deed even at that point of time. In the said exhibit, viz., Ex.P.3, the allegations made in the legal notice issued by the appellant in Ex.P.2 were also denied and along with the reply notice, a draft sale deed was also enclosed. As there was no further reply from the appellant, the respondent proceeded to give paper publication on 03.11.2006 in two local dailies. It was only thereafter that the respondent was constrained to file the suit. 21. The summation of facts, as given above, would explicitly bring to light, the conduct of the appellant. It only proves that the appellant was not ready to execute the sale deed. According to the appellant, the respondent was attempting to sell the suit property to third parties for a higher price. Even though there is no material to substantiate the same, there is no law which estops the respondent from demanding the appellant to execute the sale deed in the name of a third party, as per clause 5 of Ex.P.1, sale agreement. Even that is not the situation before us. In fact, the respondent, while denying the said averment, presented a draft sale deed to be executed in his name only. Admittedly, the appellant has entered into an agreement with the respondent. There is no demur on the sale consideration fixed. It is not the case of the appellant that the respondent was not ready and willing to execute the sale deed. Admittedly, the appellant has entered into an agreement with the respondent. There is no demur on the sale consideration fixed. It is not the case of the appellant that the respondent was not ready and willing to execute the sale deed. Contrarily, much prior to the period of six months from the date of execution of Ex.P.1, legal notice under Ex.P.2 was issued by the appellant, terminating the sale agreement unilaterally. 22. The learned counsel for the appellant laid much emphasis on the deposition of P.W.1 made during the cross-examination. To attract Section 17 of the Indian Evidence Act, a statement will have to be clear, certain, definite and unambiguous. Merely because a statement has been obtained during cross-examination, the same cannot be termed as a clear admission. At this juncture, it is worth pointing out that cross examination is an unequal duel between a rustic witness and a refined advocate. Besides, even a perusal of the deposition of P.W.1 would show that he has merely said that at the time of decree, he did not have funds. However, he has also stated that at the time of deposition, he had sufficient funds to pay the sale consideration. The time granted by the Court was hardly a week. As rightly submitted by the learned Senior Counsel appearing for the respondent, the respondent could not even get the copy of the decree by that time. In the deposition, it has been wrongly noted as if the time granted is one month, which in fact, as admitted by both sides, is only one week. Further, the appellant has filed an application to set aside the ex parte decree within time. Thereafter, the decree itself was set aside. The readiness and willingness will have to be seen on the facts and circumstances of each case. In the case in hand, the respondent has expressed his willingness even at the time of giving his reply to Ex.P.2, by enclosing a copy of the draft sale deed. He has also deposed his readiness and willingness at the time of deposing before the Court. This apart, he has also deposited the entire amount after the decree was passed on merits. Only due to the fault of the appellant, ex parte decree was passed. The suit was also filed at the earliest point of time. 23. He has also deposed his readiness and willingness at the time of deposing before the Court. This apart, he has also deposited the entire amount after the decree was passed on merits. Only due to the fault of the appellant, ex parte decree was passed. The suit was also filed at the earliest point of time. 23. Therefore, considering the above said facts, we are of the considered view that the finding rendered by the learned Single Judge on the readiness and willingness with respect to the respondent is perfectly correct. 24. Coming to the other issues, we are of the considered view that the facts of the case would clearly disclose the clear intention on the part of the appellant in not executing the sale deed. When the appellant has executed the sale agreement, which is not in dispute, he cannot be allowed to wriggle out of the same, in the absence of any violation on the part of the respondent. The appellant, as rightly held by the learned Single Judge, has not proved any violation on the part of the respondent. The learned Single Judge has taken note of all the relevant materials for coming to the just conclusion. 25. Insofar as hike in price, now, nearly eight years have rolled over. When the delay is not due to the respondent, then, it cannot enure to the benefit of the appellant. It is the appellant who has been dragging on, by refusing to execute the sale deed and thereafter, even before this Court. After the decree was passed, the respondent has complied with the same by depositing the remaining amount. Therefore, the respondent cannot be found fault with. 26. Even though we are not inclined to interfere with the judgment and decree rendered by the learned Single Judge, in view of the fair offer made by the learned Senior Counsel appearing for the respondent, we deem it fit and proper to direct the respondent to pay a further sum of Rs.10 lakhs in addition to the remaining sale consideration already deposited. The said amount will have to be paid within a period of eight weeks from the date of receipt of a copy of this judgment. 27. The said amount will have to be paid within a period of eight weeks from the date of receipt of a copy of this judgment. 27. Accordingly, the judgment and decree dated 20.04.2012 passed in C.S.No.830 of 2006 are modified only to the effect that the respondent has to deposit a further a sum of Rs.10 lakhs, within a period of eight weeks from the date of receipt of a copy of this judgment. In fine, this appeal stands allowed to the extent indicated above. In all other respects, the judgment and decree dated 20.04.2012 passed in C.S. No.830 of 2006 are confirmed. No costs.