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2018 DIGILAW 2894 (MAD)

D. Ravi v. S. Paranjothi

2018-09-12

S.S.SUNDAR

body2018
JUDGMENT 1. The plaintiff in the suit in O.S. No. 770 of 2010 on the file of the Principal Sub Court, Madurai is the appellant in this second appeal. 2. The appellant herein, as plaintiff, filed the suit in O.S. No. 770 of 2010 before the Principal Sub Court, Madurai for specific performance of an agreement of sale, dated 21.12.2009 in respect of the suit property or in the alternative for a decree for return of the advance amount of Rs. 2,15,000/- with an interest at 12% from 21.12.2009 till the date of payment. 3. The case of the plaintiff as stated in the plaint is as follows: 3.1. The defendant is the owner of the suit property. In December'2009, the defendant offered to sell the property to the plaintiff. The plaintiff and defendant mutually fixed the sale price at Rs. 5,15,000/- for the suit property and a registered agreement was entered into on 21.12.2009 between them and the plaintiff has paid a sum of Rs. 2,15,000/- as advance on the date of the agreement. It was further agreed that the defendant should produce all the original documents and the original title deed and other documents relevant to the suit property. It was also agreed by the defendant to register the sale deed within a month. Though the plaintiff was ready and willing to pay the balance of sale consideration and requested the defendant to register the sale deed in favour of the plaintiff, the defendant dragged on and evading from executing the sale deed. Since the defendant appears to have got a higher offer from a third party for the suit property, the plaintiff apprehend that the defendant refused to perform his part of the contract. The plaintiff issued a publication in a news paper "Daily Thanthi" on 11.02.2010 and issued a legal notice through his Counsel on 17.02.2010. The defendant sent a reply notice on 01.03.2010, admitting the sale agreement, but refused to execute the sale deed. Since the plaintiff was ready and willing to pay the balance sale consideration to have the sale deed executed, he filed the above suit. 4. The suit was resisted by the defendant by filing a written statement. In the written statement, the sale agreement, dated 21.12.2009 is admitted. The payment of a sum of Rs. 2,15,000/- as advance is also admitted. 4. The suit was resisted by the defendant by filing a written statement. In the written statement, the sale agreement, dated 21.12.2009 is admitted. The payment of a sum of Rs. 2,15,000/- as advance is also admitted. However, it is stated that time is the essence of the contract and that the plaintiff, who has agreed to complete the sale deed within a month from the date of agreement, after paying the entire sale consideration, was not ready and willing to pay the balance sale consideration to complete the transaction within the time stipulated in the agreement. It was stated by the defendant that the suit property originally belonged to the father of plaintiff, one Dharmalingam Pillai and that he executed a gift deed in favour of his daughter, by name, Jegatha, by a registered gift deed, dated 30.01.2003. It is stated that the defendant purchased the suit property from the said Jegatha by a registered sale deed dated 30.01.2003. It is stated that the plaintiff's father thereafter, unilaterally, cancelled the gift deed by way of a deed dated 30.03.2007. 5. It is further stated that on the basis of cancelation of gift deed, the plaintiff and his father tried to interfere with the peaceful possession and enjoyment of the defendant and that therefore, the defendant was forced to file a suit in O.S. No. 376 of 2007 on the file of the Additional District Munsif Court, Madurai for permanent injunction restraining the plaintiff and his father from interfering with the defendant's peaceful possession and enjoyment of the suit property. It is further stated that during the pendency of the suit, the plaintiff approached the defendant and entered into a sale agreement dated 03.08.2009. It is further stated that the plaintiff though agreed to purchase the property for a lesser amount, did not come forward to pay the balance and complete the sale within the time specified in the sale agreement. It is further sated that the plaintiff thereafter approached the defendant along with his sister and made a fresh sale agreement on 21.12.2009, which is the subject matter of suit. It is further sated that the plaintiff thereafter approached the defendant along with his sister and made a fresh sale agreement on 21.12.2009, which is the subject matter of suit. It was further stated in the written statement that the defendant was compelled to make a sale agreement only for meeting the medical expenses for the treatment given to his wife and that, therefore, the time for performance is the essence of the contract, particularly, in view of the escalation of price. Since the plaintiff failed to pay the balance sale consideration on or before 23.01.2010 and he was not ready and willing to complete the same within the time, it is sated in the written statement that the plaintiff is not entitled to the relief of specific performance. Though it is the defendant's specific case that the plaintiff was not ready and willing to perform his part of the contract in terms of the sale agreement, the trial Court did not frame any issue as regards readiness and willingness of the plaintiff. 6. The trial Court, after referring to the reply, wherein, the defendant has not agreed to execute the sale, held that the defendant has not proved that he was ready and willing to execute the sale deed. Since no notice was issued by the defendant, calling upon the plaintiff to execute the sale deed within the time stipulated in the sale agreement, the trial Court came to the conclusion that the defendant can not rescind the contract. Ultimately, the suit filed by the plaintiff was decreed as prayed for. Challenging the judgment and decree of the trial Court in O.S. No. 770 of 2010, the defendant preferred an appeal in A.S. No. 1 of 2013 before the 4th Additional District Court, Madurai. 7. The appellate Court, however, elaborately discussed the issue whether the parties to the suit were ready and willing to perform their part of the contract. After finding that the trial Court wrongly put the burden on the defendant, the lower appellate Court further observed that the findings of the trial Court, without considering the prior agreement dated 03.08.2009 and the other facts and circumstances of the case, is unsustainable. After finding that the trial Court wrongly put the burden on the defendant, the lower appellate Court further observed that the findings of the trial Court, without considering the prior agreement dated 03.08.2009 and the other facts and circumstances of the case, is unsustainable. Though the suit was filed immediately after the reply was sent, the lower appellate Court found that the plaintiff cannot succeed merely because he filed the suit without any delay, especially when time is the essence of the contract and that the plaintiff has not proved his readiness and willingness. As a result, the appeal was allowed and the judgment and decree of the trial Court was set aside by the lower appellate Court. Aggrieved by the judgment and decree of the lower appellate Court in A.S. No. 1 of 2013, the above second appeal has been filed. 8. At the time of admitting the second appeal, this Court has framed the following substantial questions of law: "1. Whether the appellant/plaintiff is always ready and willing to perform is part of the contract. 2. Whether time is the essence of contract as pleaded by the respondent/defendant. 9. The execution of the sale agreement is not in dispute. On 21.12.2009, the plaintiff had entered into a sale agreement with the defendant and agreed to purchase the property for a sum of Rs. 5,15,000/- and the payment of a sum of Rs. 2,15,000/- on the date of agreement is acknowledged by the defendant. However, it was specifically agreed that the plaintiff should complete the sale agreement on or before 23.01.2010 and to pay the balance sale consideration. It was also agreed that in case, the plaintiff or defendant fails to perform their respective part of the contract, the agreement will become unenforceable. The person, who commits breach, is liable to compensate for the loss and expenditures suffered by the other side. The defendant refused to execute the sale deed only on the ground that the plaintiff did not come forward to pay balance within time. The sale agreement, dated 21.12.2009, read as follows: xxx xxx xxx 10. From the reading of the sale agreement, it is peculiar but unambiguous. The parties had entered into an agreement earlier and rescinded as it could not be performed within time. The sale agreement, dated 21.12.2009, read as follows: xxx xxx xxx 10. From the reading of the sale agreement, it is peculiar but unambiguous. The parties had entered into an agreement earlier and rescinded as it could not be performed within time. The defendant wanted the agreement to become unenforceable, if anyone of them fails to perform their part, within the time stipulated in the agreement. From the facts admitted, it is seen that the defendant was in need of urgent money for his wife's treatment. The sale was intended and the agreement was executed by defendant only because he wanted urgent money for a specific purpose. Hence, the contract was designed in such a way that it will become unenforceable, if the sale could not be completed on or before 23.01.2010 for any reason. The Honourable Supreme Court, in the case of Saradamani Kandappan vs. S. Rajalakshmi and Others, (2011) 4 CTC 640, considering the law on the subject elaborately, has held that when parties prescribe specific period for taking certain steps or for completion of contract, such stipulation must have some significance and cannot be ignored. After following the Judgment in K.S. Vidyanadam and Others vs. Vairavan, (1997) 1 CTC 628 , the Honourable Supreme Court has held as follows: "28. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam: (i) Courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored. (ii) Courts will apply greater scrutiny and strictness when considering whether the purchaser was ready and willing to perform his part of the contract. (iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time- limits stipulated in the agreement. Courts will also frown upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. Courts will also frown upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three year period is intended to assist purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser......" 11. Hence, this Court is of the view that time is the essence of the contract and that the second substantial question of law is answered against the plaintiff and in favour of respondent/defendant. 12. The next question is about the readiness and willingness of the plaintiff. In this case, it is not in dispute that the plaintiff and the defendant had entered into a previous sale agreement on 03.08.2009 for a lesser amount. It is also admitted that the property originally belonged to the plaintiff's father and that the defendant had purchased the property from the sister of the plaintiff, after plaintiff's father executed a gift deed in her favour. However, it is stated that a suit came to be filed by the defendant himself as against the plaintiff and his father for a permanent injunction alleging that the plaintiff and his father were trying to interfere with the peaceful possession and enjoyment of the suit property by the defendant on the strength of a deed of cancelation of the gift deed executed by the plaintiff's father earlier in favour of the plaintiff's sister. It is also admitted that the said suit was decreed in favour of the defendant holding that the defendant is in possession and enjoyment of the suit property and that the unilateral cancellation of the gift deed is void. The first agreement was rescinded only because of delay. Hence, the plaintiff is aware that time is the essence. The means of plaintiff is questioned. No evidence let in to prove plaintiff's readiness or willingness to pay balance within time. Either in the sale agreement, dated 03.08.2009 or in the suit sale agreement dated 21.12.2009, possession was handed over to the plaintiff. Hence, the plaintiff is aware that time is the essence. The means of plaintiff is questioned. No evidence let in to prove plaintiff's readiness or willingness to pay balance within time. Either in the sale agreement, dated 03.08.2009 or in the suit sale agreement dated 21.12.2009, possession was handed over to the plaintiff. But quite contrary to the agreement and the decree in the prior suit filed by the defendant, the plaintiff pleaded in para V of the plaint that he is in possession of the suit property. In paragraph 4 of the plaint, the plaintiff has stated as follows: "IV.......It was further agreed, inter-alia, the defendant should produce all the original documents and the original title deeds and all other documents related to the property. It was further agreed by the defendant to register the sale deed within a month. Though the plaintiff was always ready and willing with the balance of sale-consideration amount and requested the defendant to register the sale deed in favour of the plaintiff. The defendant dragged on and answered evasively. Though the defendant was agreeing to the above said condition and incorporating in writing an agreement of sale executed on 21.12.2009......" 13. It is to be noted that the suit sale agreement does not require the defendant to produce the original document or original title deeds relating to the suit property. It is not the case in the notice issued by the plaintiff that the defendant has failed to hand over the documents of title pertaining to the suit property. The plaintiff very well knew the title of defendant who has purchased the property from the plaintiff's sister. The plaintiff further knew that he cannot interfere with the possession and enjoyment of the suit property by the defendant in view of the decree in the earlier suit. However a reading of the plaint gives an indication that the plaintiff still referred to an obligation and insisted the defendant to produce title deeds which is not required or agreed as per the agreement. This shows the unfair conduct of plaintiff. Hence the plea regarding his readiness and willingness appears to be subject to the production of original document. A plea which may help him to prove that the defendant was not ready, is consciously raised by plaintiff with an ulterior purpose. 14. This shows the unfair conduct of plaintiff. Hence the plea regarding his readiness and willingness appears to be subject to the production of original document. A plea which may help him to prove that the defendant was not ready, is consciously raised by plaintiff with an ulterior purpose. 14. The learned Counsel for the appellant referred to the evidence of PW-1 to show that the plaintiff has categorically deposed to the fact that he was always ready and willing to perform his part of the contract. However, in the cross examination, the plaintiff has stated as follows: xxx xxx xxx 15. Hence, the plaintiff is very well aware that the period specified in the agreement of sale is important and that the agreement will be unenforceable, if the plaintiff fails to pay the balance of sale consideration and to complete the sale deed before the time stipulated in the agreement. The defendant in the written statement questioned the financial capacity of plaintiff to pay the balance of sale consideration at the relevant point of time. The defendant cited the same as a reason for him to rescind the contract by sending reply notice. Even in the notice, the plaintiff demanded the registration of the sale deed within 15 days time and stated that the plaintiff would pay the balance amount of Rs. 3,00,000/- at the time of registration. The suit notice was issued on 13.02.2010 nearly about a month after the time fixed. The learned Counsel for the appellant submitted that the defendant entered into an agreement for the treatment of his wife and that he was not willing to execute the sale deed because the defendant's wife expired in the meanwhile. This explanation is absurd and cannot be accepted. When time is the essence of the contract and it is also agreed by the parties, the fact that the plaintiff has failed to pay the balance sale consideration within the time stipulated in the agreement is a vital factor that cannot be ignored in a suit for specific performance. 16. The case of the plaintiff is that he is in possession of the suit property and his plea that the defendant agreed to hand over the original document of title deed would show the conduct of the plaintiff while approaching the Court to enforce the contract of sale. 16. The case of the plaintiff is that he is in possession of the suit property and his plea that the defendant agreed to hand over the original document of title deed would show the conduct of the plaintiff while approaching the Court to enforce the contract of sale. The plaintiff, who claimed that he is in possession of the suit property, despite a decree obtained by the defendant as against the plaintiff is an act to threaten and coerce the defendant out of frustration exhibiting his weak position. In this case, the readiness and willingness is not proved to the satisfaction of Court. The lower appellate Court, after considering the entire evidence, has given a categorical finding that the plaintiff is not ready and willing to perform his part of the contract in terms of the sale agreement. The judgment of the lower appellate Court is based on proper appreciation of evidence and pleadings and this Court do not find any material irregularity or illegality in the findings of the lower appellate Court. Hence the second substantial question of law is answered against the plaintiff. Apart from the fact that the plaintiff has not proved his readiness and willingness, this Court is of the view that the plaintiff is also not entitled to the equitable relief of specific performance, having regard to the conduct of the plaintiff in this case in setting up a false case that he is in possession of the property and pleading something contrary to the terms agreed as per sale agreement. 17. As pointed by the lower appellate Court, the plaintiff has not come forward with a clean hand and not entitled to equitable relief of specific performance. As a result, this second appeal is liable to be dismissed and the suit for specific performance stands dismissed. However, the plaintiff has prayed for an alternative relief to recover the money paid by the plaintiff as advance, namely, the sum of Rs. 2,15,000/- It is to be seen that the defendant has admitted the receipt of money. Even in the reply notice, the defendant also agreed to repay the money. Since the sale agreement itself shows that the plaintiff even if he fails to perform his part of the contract within the time stipulated, is entitled to get back the money paid by him as advance. Even in the reply notice, the defendant also agreed to repay the money. Since the sale agreement itself shows that the plaintiff even if he fails to perform his part of the contract within the time stipulated, is entitled to get back the money paid by him as advance. Hence, there is no irregularities or illegality in the Judgment of Lower Appellate Court. This Court do not find any question of law. This Court is of the view that the plaintiff is entitled to the alternative relief for refund of advance money. Hence the second appeal is partly allowed. The judgment and decree of the IV Additional District Judge, Madurai in A.S. No. 1 of 2013 setting aside the judgment and decree in O.S. No. 770 of 2010 on the file of the Principal Sub Court, Madurai is confirmed. However the suit in O.S. No. 770 of 2010 is partly decreed by directing the defendant to return the advance amount of Rs. 2,15,000/- with interest at 12% per annum from the date of suit, namely, 23.04.2010, to the plaintiff/appellant. No costs.