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2017 DIGILAW 507 (MAD)

Ravindran v. Danton Shanmugam

2017-02-27

R.SUBRAMANIAN

body2017
Judgment :- 1. The plaintiff whose suit for specific performance or in the alternative for refund of advance was decreed for the alternative relief, is the appellant. Specific performance of the agreement of sale dated 24/09/2007 was sought for by the plaintiff. 2. According to the plaintiff the 1st defendant agreed to sell an extent of 42 Ares 35 centiares equivalent to 316 kuzhies and 21/64 veesams at the rate of Rs. 3,550/- per kuzhie. The said agreement was reduced to writing. The plaintiff had paid an advance of Rs. 5 lakhs on the date of the agreement out of the total consideration of Rs.11,22,965/-. A period of 15 days was fixed for performance of the agreement. According to the plaintiff, as per the agreement, the original sale deed is to be produced by the defendant before execution of the sale deed. 3. The defendant had purchased the suit property under the sale deed dated 28/08/2000. As opposed to the recitals in the sale agreement, in the sale deed it was found that the suit property namely, an extent of 42 Ares and 35 centiares having in O.S.No:359/6B is actually covered by two resurvey numbers namely R.S.No:301/1 and 300/1B1. The sale deed dated 28.08.2000 under which the 1st defendant had purchased the suit property refers only to R.S.301/1. The extent of property in survey number 301/1 was only 15 Ares. At the request of the plaintiff, the defendant had agreed to get the sale deed dated 28/08/2000 rectified. 4. The 1st defendant also appointed the 3rd defendant as his power attorney agent on 20/08/2008. The plaintiff would contend that the defendant neither took steps to rectify the sale deed nor came forward to execute the sale deed pursuant to the agreement dated 24/09/2007. The plaintiff also came to know that the 1st defendant had cancelled the power executed in favour of the 3rd defendant on 13/10/2008. It is also alleged by the plaintiff that the 3rddefendant had sold the property to the 2nd defendant on 14/10/2008, after the cancellation of the power. The plaintiff would contend the sale deed was ante-dated as if it was executed on 10/10/2008 and was registered on 14/10/2008. 5. The plaintiff had issued a notice demanding performance 19/8/2009. It is also alleged by the plaintiff that the 3rddefendant had sold the property to the 2nd defendant on 14/10/2008, after the cancellation of the power. The plaintiff would contend the sale deed was ante-dated as if it was executed on 10/10/2008 and was registered on 14/10/2008. 5. The plaintiff had issued a notice demanding performance 19/8/2009. The first defendant sent a reply claiming that the time was the essence of the contract and the plaintiff having failed to perform his part of the contract within the time stipulated under the agreement dated 24/09/2007, is not entitled to demand specific performance. It is also further claimed that the sale deed in favour of the 2nd defendant is not valid. The 1st defendant would claim that he continues to be in possession of the property as the owner. Upon receipt of the said reply the plaintiff filed the suit on 05/09/2009 seeking specific performance or in the alternative for refund of advance. 6. The 1st defendant resisted the suit contending that the plaintiff was never ready and willing to perform his part of the contract. It was agreed between the parties that time should be the essence of the contract inasmuch as the 1st defendant is a French National and his stay at Karaikal can only be for a limited period. The 1st defendant would also claim that since the plaintiff was not ready and willing he is entitled to forfeit the advance. 7. Apart from denying the claim of the plaintiff for specific performance, the 1st defendant would also allege that he was betrayed by the 3rd defendant. According to him the sale deed in favour of the 2nd defendant executed by the 3rd defendant is a fraudulent document and the same will not confer any title on the 2nd defendant. Apart from filing a written statement, the 1st defendant also filed a counterclaim challenging the validity of the sale deed dated 10/10/2008 registered on 14/10/2008. The said counterclaim was rejected by the trial court and the 1st defendant did not challenge the said order of rejection. 8. The 2nd defendant would contend that she is bona fide purchaser for value without notice of the earlier agreement of sale. She would also claim that the plaintiff had in fact abandoned the agreement. The delay in filing the suit was set up as a defence to the claim for specific performance. 8. The 2nd defendant would contend that she is bona fide purchaser for value without notice of the earlier agreement of sale. She would also claim that the plaintiff had in fact abandoned the agreement. The delay in filing the suit was set up as a defence to the claim for specific performance. 9. The 3rd defendant filed a separate written statement. He would plead that the 2nd defendant's husband who is known to them promised to pay the sale consideration to the 1st defendant. On the strength of the said promise he executed a sale deed without receiving any consideration. He would further contend that he was unaware of the agreement between the plaintiff and the 1st defendant. He would also deny the claim of the plaintiff that there is a flaw in the title of the 1st defendant. The 3rd defendant also claimed that the 1st defendant did not take any action against him for his wrongful act out of magnanimity. 10. On the above pleadings the Learned District Judge, Karaikal framed the following issues: “1. Whether time is the essence of the contract? 2. Whether the suit is hit by the provisions of the Foreign Exchange Management Act, as alleged by the first defendant? 3. Whether the first defendant had rescinded the sale agreement as alleged in his written statement? 4. Whether the plaintiff was always willing and ready to perform his part of the contract? 5. Whether the second defendant is a bone fide purchaser of the suit property? 6. Whether the plaintiff is entitled for a decree of specific performance as prayed for or in the alternative a decree for Rs. 5 Lakhs with 24% interest till date of suit with future interest until repayment and compensation of rupees 2 Lakhs with costs? The following additional issue was also framed: Whether the first defendant is entitled for decree of prohibitory injunction restraining the plaintiff, his men and agents from interfering with the peaceful possession and enjoyment of the suit property?” 11. Upon a consideration of the pleadings and evidence on record, the learned Trial Judge concluded that the plaintiff was not ready and willing to perform his part of the contract. He however found that time is not the essence of the contract. Upon a consideration of the pleadings and evidence on record, the learned Trial Judge concluded that the plaintiff was not ready and willing to perform his part of the contract. He however found that time is not the essence of the contract. On the claim of the 1st defendant that he has rescinded the contract, the learned Trial Judge rejected the said claim and held that that was no recession of the contract on the part of the 1st defendant. 12. The learned Trial Judge, however, concluded that the plaintiff was not ready and willing to perform his part of the contract and therefore, he is not entitled to the relief of specific performance. Considering the defence, the learned Trial Judge decreed the suit for the alternative relief of refund of advance and directed the 1st defendant to refund the advance amount of Rs.5 Lakhs with interest at 12% per annum from the date of the agreement till date of the suit and at 6% per annum from the date of suit till date of realisation. 13. Aggrieved by the said decree the plaintiff is on appeal. 14. I have heard Mr. T.M. Hariharan learned counsel appearing for Mr. B.K. Srinivasan, learned counsel for the appellant, Mr. S. Sounthar, learned counsel appearing for the 1st respondent and Mr. S. Venkatesh, learned counsel appearing for the 2nd respondent. The 3rd respondent though served has not appeared either in person or through counsel. 15. The following points arise for determination in this appeal:- 1. Whether the plaintiff can be said to have been ready and willing to perform his part of the contract in terms of section 16 (c) of the Specific Relief Act? 2. Whether the first defendant is guilty of attempting to mislead the Court by producing exhibit-B2 series as if they are acknowledgements for the receipt of exhibit-B1 dated 13/10/2008? 3. Whether the second defendant is a bona-fide purchaser for value without notice of the suit agreement? POINT No.1 16. Mr. T.M. Hariharan, the learned counsel appearing for the appellant would contend that time cannot be said to be the essence of the contract and the Trial Court having held that time is not the essence of the contract, has erred in non-suiting the plaintiff on the ground of absence of readiness and willingness. POINT No.1 16. Mr. T.M. Hariharan, the learned counsel appearing for the appellant would contend that time cannot be said to be the essence of the contract and the Trial Court having held that time is not the essence of the contract, has erred in non-suiting the plaintiff on the ground of absence of readiness and willingness. Inviting my attention to the evidence of DW-3 husband of the 2nd defendant, the learned counsel would contend that the fact that there was a mistake in the sale deed dated 28/08/2000 has been admitted by the said witness. He would further contend that the delay was due to the mistake in the sale deed and the failure is on the part of the 1st defendant to get it rectified. The learned counsel would further contend that the 2nd defendant cannot be said to be a bona-fide purchaser for value without notice, since DW-4 had admitted that he had also engaged the same document writer and that he knew about the agreement between the plaintiff and the 1st defendant. 17. The learned counsel would further contend that the very sale deed in favour of the 2nd defendant had been brought about by the 1st defendant only with a view to defeat the claim of the plaintiff. He would also point out that the 1st defendant in fact attempted to mislead the Court by producing the acknowledgement cards relating to the reply notice dated 03/09/2009 as if they relate to the notice dated 13/10/2008 marked as Exhibit B-1. 18. He would refer to the evidence of DW-1 particularly in cross-examination, where he had denied the suggestion that exhibit B-2 series, acknowledgement cards, do not relate to Exhibit B-1. Therefore, according to the learned counsel, the plaintiff has always been ready and willing to perform his part of the contract and the Trial Court has erroneously concluded that the plaintiff is not entitled to specific performance because of lack of readiness and willingness. He would further plead that the conduct of the 1st defendant should be taken into account while considering the grant of discretionary relief. 19. Mr. S. Sounthar the learned counsel appearing for the 1st defendant would contend that the plaintiff is not entitled to specific performance because of the huge delay even in making a demand for performance. He would further plead that the conduct of the 1st defendant should be taken into account while considering the grant of discretionary relief. 19. Mr. S. Sounthar the learned counsel appearing for the 1st defendant would contend that the plaintiff is not entitled to specific performance because of the huge delay even in making a demand for performance. The learned counsel would point out that the agreement provides for a period of 15 days for performance and the first demand was made by the plaintiff only on 19/08/2009 that is nearly after the expiry of two years from the date of the agreement. The suit came to be filed on 12/10/2009. According to the learned counsel, this inordinate delay would disentitle the plaintiff from seeking a decree for specific performance. It must be pointed out here that the learned counsel has no answer for the conduct of his client in attempting to mislead the Court by producing Exhibit B-2 series namely, the acknowledgement cards evidencing the receipt of the notice dated 19/08/2009, while the acknowledgements actually relate to the notice said to have been issued by his counsel on 13/10/2008. 20. Mr. S. Ventatesh, learned counsel appearing for the 2nd respondent would contend that the Trial Court has found that the plaintiff was not ready and willing to perform his part of the contract apart from rendering a finding that the 2nd respondent is a bona-fide purchaser for value without notice. According to the learned counsel the portions of cross-examination relied upon by the learned counsel for the appellant cannot be read in piecemeal. He would submit that the entire cross-examination must be read so as to find out the intention of the witness. The learned counsel would also rely upon the following judgments of the Honourable Supreme Court in support of his contention that the delay of nearly 2 years in filing the suit is fatal to the claim of the plaintiff. 1. K.S. Vidyanandam vs. Vairavan reported in (1997) 3 SCC 1 2. Saradamani Kandappan vs. S.Rajalakshmi and others reported in (2011) 2 SCC 18 3. Padmakumari and others vs. Dasayyan & ors reported in 2015 8 SCC 695 21. I have considered the rival submissions. 22. 1. K.S. Vidyanandam vs. Vairavan reported in (1997) 3 SCC 1 2. Saradamani Kandappan vs. S.Rajalakshmi and others reported in (2011) 2 SCC 18 3. Padmakumari and others vs. Dasayyan & ors reported in 2015 8 SCC 695 21. I have considered the rival submissions. 22. In view of the law laid down by the Honourable Supreme Court in a series of recent decisions, the question of readiness and willingness of the plaintiff in a suit for specific performance assumes greater significance. No doubt true, the Honourable Supreme Court has pointed out that the conduct of the defendant would also be a factor while considering the excise of discretion in granting or refusing the relief of specific performance, that would arise only when the Court concludes that the plaintiff was always ready and willing. If the plaintiff falls, short of the required parameters when his readiness and willingness is tested by the court, the fact that the defendant/defendants have come up with a false case, may not help the plaintiff in succeeding in a suit for specific performance. 23. If we are to analyse the case on hand in the above backdrop, I am afraid that I will have to necessarily conclude against the plaintiff. As already stated the suit agreement was entered into on 24/09/2007 and a period of 15 days was fixed for performance. The plaintiff had first demanded specific performance through his notice dated 19/08/2009. The explanation of the plaintiff for the delay is that there were some mistakes in the sale deed dated 28/08/2000 under which the 1st defendant had purchased the suit property. He would further claim that the 1st defendant agreed to get the sale deed rectified. It should immediately be pointed out that the evidence in support of the above version of the plaintiff is very weak. 24. In fact the plaintiff had filed a complaint before the Judicial Magistrate No: II, Karaikal claiming that the 1st and 3rd defendants are attempting to cheat him by arranging for sale of the property to the 2nd defendant. This complaint is dated 19/05/2009. There is no reference whatsoever to the alleged defect in title of the 1st defendant in the said complaint. This complaint is dated 19/05/2009. There is no reference whatsoever to the alleged defect in title of the 1st defendant in the said complaint. Therefore, it is clear that the allegations made with regard to the defect in title of the 1st defendant, for the first time, in the suit notice are afterthought with a view to justify the inaction on the part of the plaintiff. 25. The learned counsel for the appellant would point out certain portions of cross-examination of DW-3, the husband of the 2nd defendant, and contend that the said witness had in fact admitted the correctness of the claim of the plaintiff that there are certain mistakes in the sale deed dated 28/08/2000. The witness has deposed that he came to know about the fact that there are two re-survey numbers for the suit property namely, 301/1 and 300/1B1 which correlates to the old survey number 359/6B only after the filing of the suit. The sale deed in favour of the 2nd defendant is dated 10/10/2008 and the same has been registered on 14/10/2008. 26. Of course it is claimed by the plaintiff that the sale deed is ante-dated and has been registered in order to get over the cancellation of the power of attorney effected on 13/10/2008. The validity or otherwise of the sale deed in favour of the 2nd defendant cannot be gone into in the present proceedings. The attempted counterclaim by the 1st defendant has been rejected by the Court and the 1st defendant has not come up on appeal against the said rejection of the counter claim. The plaintiff has to stand or fall on his own legs and he cannot attempt to encash on the dispute between the 1st and 2nd defendants. 27. The learned counsel appearing for the appellant would contend that the Trial Court having concluded that the time is not the essence of the contract should not have dismissed the suit, more so, when the suit has been filed within the period prescribed under Article 54 of the Limitation Act. The learned counsel would also submit that the question of plaintiff being not ready and willing should be tested in comparison with the conduct of the defendants. The plaintiff as PW-1 in his cross-examination would admit that a reading of the agreement would show that importance has been assigned to the period fixed under the agreement. The learned counsel would also submit that the question of plaintiff being not ready and willing should be tested in comparison with the conduct of the defendants. The plaintiff as PW-1 in his cross-examination would admit that a reading of the agreement would show that importance has been assigned to the period fixed under the agreement. He would also further depose that he had obtained a copy of the sale deed, from the Sub-Registrar's office. The copy of the sale deed dated 28.08.2000 has been produced as Ex.A2 by the plaintiff. He has applied for the copy on 27.08.2009 and a copy has been issued on 19.10.2009. 28. I already pointed out that the plaintiff has not whispered about the alleged defect/mistake in the sale deed dated 28.08.2000, in the complaint filed by him before the Judicial Magistrate-II, Karaikal on 19.05.2009. A copy of the said complaint is marked as Ex.A5. Though the defendant has sent a reply notice indicating that he will not be able to comply with the demand of the plaintiff made in the notice dated 19.08.2009, on 03.09.2009 itself, the plaintiff has filed the above suit on 12.10.2009, that is almost a month thereafter. In his evidence during cross-examination, the plaintiff would claim that he had the balance sale consideration ready in cash and would admit that he is an income tax assesee. He would claim that he had shown the balance consideration namely, Rs.6,36,000/- in his income tax return for the year 2009. But he has not chosen to produce the said document. It could therefore, be seen that the plaintiff has not established his readiness and willingness to perform his part of the contract within the period stipulated in the agreement. 29. Admittedly, the notice calling upon the defendants to execute the sale deed was issued only on 19.08.2009 i.e. almost two years after the agreement. There is no explanation for the delay on the part of the plaintiff except the bald claim that the 1st defendant had agreed to get the sale deed rectified. In the above circumstances, I am constrained to conclude that the Trial Court was right in rejecting the relief of specific performance on the ground that the plaintiff was not ready and willing to perform his part of the contract. I am supported to the view of mine by the recent pronouncements of the Hon'ble Supreme in: 1. In the above circumstances, I am constrained to conclude that the Trial Court was right in rejecting the relief of specific performance on the ground that the plaintiff was not ready and willing to perform his part of the contract. I am supported to the view of mine by the recent pronouncements of the Hon'ble Supreme in: 1. Saradamani Kandappan vs. S.Rajalakshmi and others reported in (2011) 2 SCC 18 2. Padmakumari and others vs. Dasayyan & ors reported in 2015 8 SCC 695 Point No.2 30. The 1st defendant claimed to have cancelled the power of attorney dated 20.08.2008, in favour of the 3rd defendant, marked as Ex.A7 by a registered document of cancellation deed dated 13.10.2008. The said deed of cancellation has been produced as Ex.A3. The 1st defendant would also claim that he had informed the 3rd defendant regarding the said cancellation deed on 13.10.2008 itself under Ex.B1. Ex.B1 is dated 13.10.2008 and has been issued by the counsel for the 1st defendant, a copy of which is also marked to the Sub-Registrar, Karaikal. The 1st defendant would claim that Ex.B2 series which are the three acknowledgements relate to the receipt of Ex.B1 by the addressees. 31. From the postal seal, it is seen that the three acknowledgements do not relate to Ex.B1. In all of them, the sender's address is that of the 1st defendant and not that of the counsel. They have been acknowledged by the addressees on 12.09.2009 and 14.09.2009. The reply notice issued by the 1st defendant is dated 03.09.2009, the same has been issued by the 1st defendant and not by his counsel. Therefore, it is clear that Ex.B2 series, acknowledgements relate to the reply notice dated 03.09.2009 and not to the Ex.B1 dated 13.10.2008. It is therefore, clear that the 1st defendant had not communicated the cancellation of power to the agent namely, the 3rd defendant. As per Section 208 of the Contract Act, termination of power comes to effect only after the agent comes to know of it. Only with a view to get over the above legal hurdle, the 1st defendant had claimed Ex.B3 series acknowledgements relate to Ex.B1. In his evidence regarding the said acknowledgements, the 1st defendant as DW1 would depose as follows: “TAMIL” 32. Only with a view to get over the above legal hurdle, the 1st defendant had claimed Ex.B3 series acknowledgements relate to Ex.B1. In his evidence regarding the said acknowledgements, the 1st defendant as DW1 would depose as follows: “TAMIL” 32. The above oral evidence of the 1st defendant coupled with the postal seals in Ex.B2 series would show that the 1st defendant had attempted to mislead the Court by producing Ex.B2 series, as if they relate to the notice issued by his counsel on 13.10.2008. Therefore, the conduct of the 1st defendant in attempting to mislead and make the Court to believe that he had informed the agent about the cancellation of the power, in my opinion, is an attempt to interfere with the course of justice. However, I refrain from initiating any action either under Contempt of Courts Act or under Article 215 of the Constitution of India, considering the fact that the said attempt has not, fortunately, derailed the Course of Justice in the case on hand. POINT No.3 33. It remains to be considered as to whether, the 2nd defendant is a bona-fide purchaser for value without notice of the existing contract. The learned counsel for the appellant would contend that the scribe of the sale agreement marked as Ex.A1, namely, Senthilnathan is also the scribe of the deed of cancellantion dated 13.10.2008 marked as Ex.A3. Pointing out the fact that DW3, husband of the 2nd defendant has admitted that he had engaged Senthinathan to prepare the document and he is aware of the sale agreement dated 24.09.2007, he would also invite my attention to the following statement of DW3 in his cross-examination: “TAMIL” 34. Relying upon the above said evidence, the learned counsel would contend that the 2nd defendant cannot be said to be a bona-fide purchaser for value without notice. The learned Trial Judge had concluded that the 2nd defendant is a bona-fide purchaser for value without notice of the earlier agreement. Unfortunately the learned Trial Judge has not adverted to the evidence of DW3, the husband of the 2nd defendant. A perusal of the proof affidavit itself would show that the said witness was aware of the agreement between the plaintiff and the 1st defendant. Unfortunately the learned Trial Judge has not adverted to the evidence of DW3, the husband of the 2nd defendant. A perusal of the proof affidavit itself would show that the said witness was aware of the agreement between the plaintiff and the 1st defendant. The following statement in his proof affidavit would show that he had knowledge of the agreement: “TAMIL” In the light of the above statement in the proof affidavit and the admissions in the cross-examination, I find that the 2nd defendant cannot be said to be a bona-fide purchaser for value without notice of the prior agreement. 35. The Trial Court has while rejecting the claim for specific performance directed the 1st defendant to repay the advance with interest at 12% per annum from the date of agreement till the date of claim and at 6% per annum from the date of plaint till date of realisation. While exercising the power of granting alternative relief, the Court should be alive to the fact that the agreement vendor had in fact enjoyed the fruits of the advance amount and by the dismissal of the suit for specific performance, stands to gain further. Therefore, I find that the grant of interest on the advance amount at the rate of 6% from the date of the suit till date of realisation is really on the lower side. Granting of interest at 6% per annum is not a statutory obligation imposed upon the Court. 36. The conduct of the 1st defendant in this case would require a stiff penalty. The 1st defendant should atleast be mulcted with interest at a higher rate. I am therefore, of the considered opinion that the interest of justice will be better served by directing the 1st defendant to pay interest on the advance amount of Rs.5,00,000/- at 12% per annum from 24.09.2007 namely, the date of the agreement till date of realisation. 37. I am aware that the plaintiff who is the appellant has come forward with this appeal against the rejection of the main relief of specific performance and he has been found to be dis-entitled to the main relief and the same need not stand in the way of plaintiff being granted interest at a higher rate. 37. I am aware that the plaintiff who is the appellant has come forward with this appeal against the rejection of the main relief of specific performance and he has been found to be dis-entitled to the main relief and the same need not stand in the way of plaintiff being granted interest at a higher rate. Moreso, when the 1st defendant has been found to be guilty of attempt to mislead the Court by producing Ex.B2 series, acknowledgements as if they relate to Ex.B1. 38. In fine, the appeal is partly allowed. While confirming the rejection of the main prayer for specific performance, granting alternative prayer for refund of advance amount, the decree of the Trial Court will stand modified and the plaintiff would be entitled to decree for refund of advance amount with interest at 12% per annum from 24.09.2007 ( date of the suit agreement) till date of repayment. The 1st respondent will pay costs of this appeal to the appellant. Consequently the connected miscellaneous petitions are closed.