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2020 DIGILAW 381 (MAD)

C. Madanraj v. N. Kamalammal

2020-02-20

KRISHNAN RAMASAMY, M.M.SUNDRESH

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JUDGMENT : M.M. SUNDRESH, J. 1. The unsuccessful plaintiff is the appellant in the suit filed for specific performance. On 05.01.2007, an agreement for sale has been entered into between respondents 1 to 8/defendants 1 to 8 being the owners of the suit property and the 9th respondent/9th defendant being the agreement holder. This unregistered agreement for sale fixes the sale consideration at Rs. 59,05,500/-. It also says the receipt of Rs. 5,00,000/- as an advance. The endorsement made in Ex.A1 sale agreement shows that the amount has been paid, further amount of Rs. 5,00,000/- has been paid thereafter on 17.02.2007, which has been marked as Ex.A2. 2. Thereafter, the appellant/plaintiff, being the agreement holder, entered into another sale deed under Ex.A3 with the 9th respondent/9th defendant. The covenants in Ex.A1 are to the effect that within the time stipulated, respondents 1 to 8/defendants 1 to 8 will have to execute the sale deed in favour of either the 9th respondent/9th defendant or the person nominated by him at his cost. It further goes on to state that in the event of the sale being carried out as agreed upon, the 9th respondent/9th defendant will lose all the advance amount paid apart from the agreement getting cancelled. 3. Thereafter, the appellant/plaintiff entered into an agreement with the 9th respondent/9th defendant on 05.02.2007. This document which has been marked as Ex.A3, fixes the sale consideration at Rs. 66,67,500/- for the suit property. This agreement has been entered into on the premise that the 9th respondent/9th defendant has got legal right to sell the suit property. 4. Thereafter, the appellant/plaintiff filed a suit for specific performance after issuance of the legal notice. Defendants 1 to 8 replied the legal notice under Ex.A4. 5. The suit has been laid for specific performance by the appellant/plaintiff by fixing the cause of action starting from 05.01.2007 onwards. The valuation of the suit property has been given at Rs. 66,67,500/-. 6. Before the trial Court, the appellant/plaintiff marked Exs.A1 to A25 and examined three witnesses including himself as PW-1. Respondents 1 to 8/Defendants 1 to 8 examined two witnesses while not marking any document. The 9th respondent/9th defendant did not appear before the trial Court and accordingly set ex-parte. 7. 66,67,500/-. 6. Before the trial Court, the appellant/plaintiff marked Exs.A1 to A25 and examined three witnesses including himself as PW-1. Respondents 1 to 8/Defendants 1 to 8 examined two witnesses while not marking any document. The 9th respondent/9th defendant did not appear before the trial Court and accordingly set ex-parte. 7. The trial Court framed the following issues: (i) Whether the agreement entered into between defendants 1 to 8 and the 9th defendant can be assigned in favour of the plaintiff/appellant, if so, it binds defendants 1 to 8 or not? (ii) Whether time is the essence of contract insofar as Ex.A1 dated 05.01.2007 is concerned? (iii) Is it correct to state that Ex.A1 has been acknowledged? (iv) Is the plaintiff entitled to the relief sought for? (v) If not, what other relief? 8. The trial Court, after holding that the time is not the essence of the contract, held that the appellant/plaintiff does not have legal right to enforce Ex.A1. Incidentally, it has been held that there is a cloud of suspicion over Ex.A3 since Ex.A2 says the payment of Rs. 5,00,000/- on 17.02.2007 which is contrary to the statement made that after the execution of Ex.A1 dated 05.01.2007, the same has been handed over in favour of the appellant/plaintiff. It has been further held that there is no evidence to show that intimation having been given by the 9th respondent/9th defendant to respondents 1 to 8/defendants 1 to 8. Challenging the judgment and decree rendered by the trial Court, the present appeal has been filed. 9. Learned counsel appearing for the appellant contends that in view of the specific covenants contained in Exs.A1 and A3, the appellant would become the nominee, therefore the assignee, and thus, he is entitled for a decree for specific performance. The 9th respondent/9th defendant has been set ex-parte. Respondents 1 to 8/Defendants 1 to 8 did not reply the communications sent. The trial Court is not correct in not decreeing the suit without considering the scope and ambit of Sections 15 and 16 of the Specific Relief Act, 1963. Therefore, the appeal will have to be allowed. In support of his contention, learned counsel relied on the following decisions: (i) Habiba Khatoon vs. Ubaidul Huq and Others, (1997) 7 SCC 452 (ii) Shyam Singh vs. Daryad Singh (dead) by LRs. and Others, (2003) 12 SCC 160 10. Therefore, the appeal will have to be allowed. In support of his contention, learned counsel relied on the following decisions: (i) Habiba Khatoon vs. Ubaidul Huq and Others, (1997) 7 SCC 452 (ii) Shyam Singh vs. Daryad Singh (dead) by LRs. and Others, (2003) 12 SCC 160 10. Per contra, the learned counsel appearing for respondents 1 to 8/defendants 1 to 8 submits that there is no evidence to show that the 9th respondent/9th defendant has informed respondents 1 to 8/defendants 1 to 8. Admittedly, the appellant/plaintiff is not a party to Ex.A1. The trial Court rightly doubted the execution of Ex.A3. Ex.A1 merely says the 9th respondent/9th defendant as a nominee. Therefore, the word “nominee” is different from “assignee.” There is sufficient clause to show that what is required is the execution of the sale deed to a person nominated by the 9th respondent/9th defendant and nothing beyond. Therefore, such a person cannot have any independent right. He can, at best, step into the shoes of the 9th respondent/9th defendant as against the independent rights. The question as to whether there is readiness or willingness on the part of the 9th respondent/9th defendant and the terms of the contract under Ex.A1 can never be agitated by the appellant/plaintiff when the 9th respondent/9th defendant is very much available. The question of assignee would come when the rights of the 9th respondent/9th defendant gets extinguished. To support his contention, learned counsel placed reliance upon the Division Bench judgment of this Court in Binny Limited vs. Jagannathan and Co. 2003 (1) CTC 129 . 11. The question for consideration is as to whether the appeal will have to be allowed or not in the light of the issues framed and answered by the trial Court. DISCUSSION: 12. Ex.A1 is admittedly the agreement for sale between respondents 1 to 8/defendants 1 to 8 and the 9th respondent/9th defendant. If one goes through this agreement, it merely says that the sale deed has to be executed either in the name of the 9th respondent/9th defendant or his nominee. Therefore, Ex.A1 merely says the factum of execution of sale deed. There is no difficulty in appreciating Ex.A1. This would come when the 9th respondent/9th defendant complies with the terms of agreement. Therefore, Ex.A1 merely says the factum of execution of sale deed. There is no difficulty in appreciating Ex.A1. This would come when the 9th respondent/9th defendant complies with the terms of agreement. Whether the sale deed executed in the name of the 9th respondent/9th defendant or his nominee can never be the concern of respondents 1 to 8/defendants 1 to 8. This position has been reiterated under Ex.A1. Now, if we read further Ex.A1, it also says about the consequence of non-compliance of the 9th respondent/9th defendant. If the 9th respondent/9th defendant fails to execute the sale deed, he would lose his advance payment and the agreement gets cancelled. This clause also reiterates the fact that there is no independent right available to any third party. The question as to whether there is non-compliance on the part of the 9th respondent/9th defendant or not can never be substituted through any other third party on the premise that he is having another agreement with him. This is a matter to be adjudicated upon between respondents 1 to 8/defendants 1 to 8 and the 9th respondent/9th defendant. 12.1. As stated, Ex.A1 does not create any interest or right in favour of the appellant/ plaintiff or any third party but merely acknowledges that of the 9th respondent/9th defendant to get the sale deed either in his favour or the person of his choice. Final decision is expected to be taken by the 9th respondent/9th defendant at the time of execution of sale deed as Ex.A1 also says that it is his lookout to prepare the sale deed at his cost. 12.2. Ex.A2 states about the acknowledgement of the further amount of Rs. 5,00,000/- from the 9th respondent/9th defendant in favour of respondents 1 to 8/defendants 1 to 8. As rightly observed by the trial Court, this document belies the case of the appellant/plaintiff. Ex.A3 is dated 05.02.2007 whereas Ex.A2 acknowledgement is dated 17.02.2007. If it is the case of the appellant/plaintiff that after execution of Ex.A1, it has been handed over to him, it would not have been possible to get the acknowledgement of respondents 1 to 8/defendants 1 to 8 when it is obviously produced from the 9th respondent/9th defendant. Therefore, the finding of the trial Court cannot be faulted in this regard. 12.3. Coming to Ex.A3, it is only an agreement between the 9th respondent/9th defendant and the appellant/plaintiff. Therefore, the finding of the trial Court cannot be faulted in this regard. 12.3. Coming to Ex.A3, it is only an agreement between the 9th respondent/9th defendant and the appellant/plaintiff. This document also says that the 9th respondent/9th defendant has got the power of alienation. An agreement holder can never have the power of alienation. Admittedly, he was alive even at the time of filing of the suit. We also note the fact which has been brought before us by the learned counsel appearing for respondents 1 to 8/defendants 1 to 8 that it is not a simple case of giving effect to Ex.A1. The sale consideration under Exs.A1 and Ex.A2 obviously differ. This factum alone would be sufficient enough to show that the appellant/plaintiff cannot step into the shoes of the 9th respondent/9th defendant. Therefore, he can either be an assignee or successor in interest. The doctrine of estoppel also would not come as the 9th respondent/9th defendant is yet to get title. Therefore, looking from any perspective, the right can never be enforced either under Ex.A3 or Ex.A1, as the case may be. 12.4. The decisions relied upon by the learned counsel appearing for the appellant/plaintiff, in our considered view, are not applicable to the case on hand. We are dealing with a case of sale followed by right to re-purchase or the conditional sale. On the contrary, the decision relied upon by the learned counsel for respondents 1 to 8/defendants 1 to 8 in Binny Limited vs. Jagannathan and Co. 2003 (1) CTC 129 is squarely applicable to the case on hand. In the aforesaid case, the Division Bench was pleased to hold after taking note of the earlier judgments of various other High Courts and that of this Court that there must be a contract. We may note that the appellant/plaintiff was not even the beneficiary at the relevant point of time. This is for the reason that the name of the appellant/plaintiff has never been mentioned under Ex.A1 and Ex.A3 has come into being, even assuming the same is found true and genuine, after a month. Further, Ex.A2 also creates a cloud over Ex.A3. Obviously, we cannot expect respondents 1 to 8/defendants 1 to 8 either prove or disprove Ex.A3. We may appositely refer the following paragraph of the Division Bench:- 48. So, to enforce the contract, thee must be a privity of contract. Further, Ex.A2 also creates a cloud over Ex.A3. Obviously, we cannot expect respondents 1 to 8/defendants 1 to 8 either prove or disprove Ex.A3. We may appositely refer the following paragraph of the Division Bench:- 48. So, to enforce the contract, thee must be a privity of contract. But, no one other than the parties to the contract is entitled to enforce the same. The third party for whose benefit a contract has been made may sue on the contracting party making the contract, for specific performance to the benefit of the third party. This view has been taken in Subbu vs. Arunachalam, AIR 1930 Mad. 382, holding as follows: “With respect it seems to us that if the law is that a person not a party to a contract cannot sue on the contract though a benefit is secured to him and unless the case falls within the exceptions in the cases above referred to the plaintiff has no cause of action it is no answer to say that all the parties are before the Court.” 13. In such view of the matter, we do not find any reason to interfere with the judgment and decree rendered by the trial Court. Accordingly, the appeal suit stands dismissed. No Costs. Consequently, connected miscellaneous petition is closed.