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2022 DIGILAW 176 (TS)

T. Vijay Kumar v. Swasodhan Trust

2022-03-10

A.RAJASHEKER REDDY, M.LAXMAN

body2022
JUDGMENT : M. Laxman, J. 1. The present appeal is arising out of the order dated 16.10.2019 in I.A.No.370 of 2019 in O.S.No.47 of 2019 on the file of the Court of the Principal District Judge, Mahabubnagar (for short, trial Court), wherein and whereby the application filed by the respondent herein for grant of restraint order against the appellants herein from alienating the suit schedule property was allowed. 2. The appellants herein are the respondents/defendants and the respondent herein is the petitioner/plaintiff in the above suit. For the sake of convenience, the parties hereinafter are referred to as they are arrayed in the above suit. 3. The case of the plaintiff is that he entered into an agreement of sale with the defendants on 06.06.2018 in respect of land admeasuring Ac.27-36 guntas in Sy.Nos.191, 192, 193, 195, 196 & 197, situated at Kodicherla Village, Kothur Mandal, Mahaboobnagar District. The agreed price was Rs.14,00,000/- per acre and the total sale consideration was Rs.3,90,60,000/-. Prior to the agreement of sale i.e., on 13.03.2018, an amount of Rs.5,00,000/- was paid by the plaintiff to M/s.C.S.K. Realtors Limited, as requested by the defendants, through a cheque. Further, the plaintiff has paid Rs.40,00,000/- through a cheque dated 06.06.2018 on the date of agreement. It was also agreed that the defendants were to procure a way to the lands in Sy.Nos.191, 192 and 193 from the land owner of Sy.No.194, to have access to the said lands. It was agreed that the said obligation had to be discharged by the defendants within two months, failing which the agreement of sale gets terminated, unless time is extended by the plaintiff. The balance sale consideration was agreed to be paid within seven days from the date of compliance of condition of procuring the way to the lands in Sy.Nos.191, 192 and 193 by the defendants. 4. The agreed terms of contract were reduced into writing under the agreement of sale dated 06.06.2018 which is Ex.A-3. Thereafter, the defendants neither procured the way nor have taken any steps to fulfill their part of obligation under the agreement. In the said circumstances, a legal notice dated 29.01.2019 was issued calling upon the defendants to comply with the condition of securing the way within a time frame. Thereafter, the defendants neither procured the way nor have taken any steps to fulfill their part of obligation under the agreement. In the said circumstances, a legal notice dated 29.01.2019 was issued calling upon the defendants to comply with the condition of securing the way within a time frame. When there was no response, further notice was issued on 20.02.2019, calling upon the defendants to execute the registered sale deed without even procuring the way, as agreed. The defendants have issued a reply dated 01.03.2019 claiming that the agreement of sale stands cancelled and they came forward to repay the amount with interest, but the plaintiff refused for the same. The defendants also stated in the reply that the agreement of sale stands automatically cancelled on account of non-procurement of way to the lands in Sy.Nos.191, 192 and 193. The plaintiff has also issued a rejoinder dated 10.03.2019 to the said reply, calling the defendants to perform their part of obligation by completing the execution of registered sale deed, but there was no response, as such, the plaintiff filed the present suit seeking specific performance of agreement of sale. The plaintiff filed I.A.No.370 of 2019 seeking temporary injunction. 4. The defendants filed counter-affidavit admitting the execution of agreement of sale as well as receipt of part sale consideration. According to them, the performance of agreement was conditioned by procuring the way to the lands in Sy.Nos.191, 192 and 193 from the land owner of Sy.No.194. When they failed to procure the land, the same was informed to the plaintiff about their inability and offered to refund the money paid by the plaintiff with interest @ 12% per annum, but the plaintiff refused to take the money. According to the defendants, from the terms and conditions of the contract, the time of two months is the outer limit for procuring the way, but it was not procured, as such, the contract gets automatically terminated, unless it is extended by the plaintiff. According to them, the contract has already been terminated and there is no enforceability of the contract and prayed to dismiss the application. 5. According to them, the contract has already been terminated and there is no enforceability of the contract and prayed to dismiss the application. 5. The trial Court, after appreciating the pleadings and the documents relied upon by the parties, came to the conclusion that the plaintiff has made out prima facie case and held that the right to terminate the contract is vested with the plaintiff in spite of condition of procuring the way, as such, it has granted injunction as prayed for. Aggrieved by the same, the present appeal has been filed. 6. Learned counsel for the appellants/defendants has contended that the trial Court has not properly appreciated the prima facie case with reference to the conditions contained in the agreement of sale which specifically contemplate termination of the contract in the event of non-fulfillment of obligation within the stipulated time, and such termination was automatic, unless it is extended by the plaintiff. Without there being any material to show that the plaintiff has chosen to extend the time before termination of the contract as per the terms of the contract, the trial Court has wrongly interpreted the contract term and came to the conclusion that the right is vested with the plaintiff to terminate the contract. It is also her contention that the other terms of the contract clearly show that the balance sale consideration was agreed to be paid within seven days from the date of procuring the way. If really the plaintiff wants to get the contract executed dispensing with the condition of procuring the way, he ought to have paid the balance sale consideration when he choose to initiate the present proceedings, but he has not done so for nearly three years. Therefore, according to her, there is no prima facie case and prayed to allow the appeal. 7. Learned counsel for the plaintiff has contended that the trial Court has rightly interpreted the condition of the terms of the contract wherein the right is vested with the plaintiff whether to extend or not the time contemplated for performance of procuring the way to the lands. When such a right is vested with the plaintiff, the defendants cannot claim that the contract is terminated unless such a right is exercised by the plaintiff. When such a right is vested with the plaintiff, the defendants cannot claim that the contract is terminated unless such a right is exercised by the plaintiff. In the present case, the contract was not terminated by exercise of his right of termination by the plaintiff, and hence, there is a deemed extension of time for compliance of conditions. He has further contended that the plaintiff expressed to proceed further with the contract by dispensing with the condition of procurement of way. In the said circumstances, there is a triable issue before the trial Court with regard to readiness and willingness on the part of the plaintiff to go with the contract. Hence, the plaintiff has made out all the requirements for grant of injunction and the trial Court rightly granted the injunction and the same does not require any interference. 8. In the light of the above contentions, the only requirement to be seen is whether prima facie case has been established by the party who is seeking injunction apart from other requirements. 9. To consider the existence of prima facie case, the contentions are revolving around clause No.5 of the agreement of sale, which reads as under: “5. It is agreed that the pathway/road to the lands are available only to the land in survey No.197, 196 and 195 of Kodicherla Village, Kothur Mandal, Mahabubnagar District. There is no way for the lands in survey No.191, 192 and 193. The Vendor further agrees that he would arrange for sale of the land in S.No.194 of Kodicherla Village, Kothur Mandal, Mahabubnagar District from its original owners. Such procurement should be only upon the vendee satisfied with the title of the property and upon the vendee/its legal team scrutiny the title deeds of the said survey No.194, and upon their consent only. Time period of procurement of land should be done within 2 months from signing this agreement of sale failing which this agreement of sale gets terminated automatically unless this time period can be extended by vendee only. If this agreement is terminated, the vendors shall return the advance consideration paid as per clause No.8.” 10. A reading of the above clause would indicate that the performance of the contract was contingent in the sense that it is depended upon the uncertain future event of procuring the way to the lands within two months. If this agreement is terminated, the vendors shall return the advance consideration paid as per clause No.8.” 10. A reading of the above clause would indicate that the performance of the contract was contingent in the sense that it is depended upon the uncertain future event of procuring the way to the lands within two months. There is also a term in the said clause that in the event of not procuring the way within two months, the agreement stands automatically terminated unless time is extended by the plaintiff. This shows that the plaintiff is required to exercise his right of extension before the contract is terminated by virtue of automatic clause. 11. In this regard, it is apt to refer to Sections 32 and 35 of the Contract Act which read as under: “32. Enforcement of contracts contingent on an event happening:-Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void. 35. When contracts become void, which are contingent on happening of specified event within fixed time:- Contingent contracts to do or not to do anything, if a specified uncertain event happens within a fixed time, become void if, at the expiration of the time fixed, such event has not happened, or if, before the time fixed, such event becomes impossible. When contracts may be enforced, which are contingent on specified event not happening within fixed time:- Contingent contracts to do or not to do anything, if a specified uncertain event does not happen within a fixed time, may be enforced by law when the time fixed has expired and such event has not happened, or before the time fixed has expired, if it becomes certain that such event will not happen.” 12. The terms of contract clearly show that the agreement is contingent contract and the performance of which is depending upon the contingent uncertain event which may happen. The contingent uncertain event in the present case is to procure a way in Sy.No.194 by the defendants. Upon happening of such event, the contract can be executed and the contract becomes void if the event becomes impossible. 13. The contingent uncertain event in the present case is to procure a way in Sy.No.194 by the defendants. Upon happening of such event, the contract can be executed and the contract becomes void if the event becomes impossible. 13. Section 35 of the Contract Act clearly shows that when a fixed time is contemplated for future uncertain event to happen, and if it is not happened within the time fixed, the contract becomes void on the expiration of time fixed. 14. In the present case, the termination clause is not vested with the plaintiff and it is automatic. The only right vested with the plaintiff was to extend the time for performance of contingent event of securing the way from the land in Sy.No.194 belonging to other owner. In the event of non-procuring such a way within two months, the contract was to be terminated within the said period unless time is extended and such a termination was automatic and not controlled by the plaintiff. To save from the voidness of the contract on account of not happening of the event within the time stipulated, the plaintiff had to extend the time before its expiration, so that he could postpone the voidness of the contract on account of non-fulfillment of the condition of procuring the land. 15. In the present case, the plaintiff has not pleaded any material to show that he has chosen to extend the time before the time gets expired. Even in the first legal notice also, the plaintiff demanded to procure the land, and such notice was issued after nearly one year. Further, in the second notice, the plaintiff had come up with a new plea that he was ready to proceed with the sale transaction without such a condition. When there is a condition in the contract, the executability of the contract prima facie comes when the condition is fulfilled. In the present case, even though the condition is not fulfilled, the plaintiff expressed his readiness to go with the contract and such readiness was made after nearly two years, and such an option was not exercised within the time stipulated. 16. It is also relevant to refer to condition No.4 of the agreement which requires the payment of balance sale consideration of Rs.3,45,60,000/- within seven days from the date of compliance of the condition. 16. It is also relevant to refer to condition No.4 of the agreement which requires the payment of balance sale consideration of Rs.3,45,60,000/- within seven days from the date of compliance of the condition. When the plaintiff expressed readiness to proceed with the contract in dispensing with the condition, still the plaintiff had to pay the balance sale consideration within seven days from the date of expression of his willingness to proceed further. The trial Court has misinterpreted the said clause in coming to the conclusion that there is prima facie case in favour of the plaintiff. 17. For the aforesaid reasons, we do not find existence of prima facie case in favour of the plaintiff to grant temporary injunction. The trial Court erred in this regard. Therefore, the findings of the trial Court are required to be set aside. It is admitted by the defendants that the sale consideration which they have received was to be refunded with interest @ 12 per annum from the date of receipt of amount till the date of payment. To test the bona fides, such amount shall be deposited with the trial Court in the suit account within three months from the date of this order, failing which, the injunction granted by the trial Court gets revived. 18. In the result, the Civil Miscellaneous Appeal is partly allowed, setting aside the impugned order of the trial Court conditionally. The defendants are directed to deposit the advancement amount received by them with interest @ 12% per annum from the date of receipt of amount till the date of deposit. Such deposit shall be made to the suit account within three months from the date of this order, failing which the injunction granted by the trial Court gets revived. Till such deposit, there shall be charge over the suit schedule property to the extent of amount due. Miscellaneous petitions pending, if any, shall stand closed. There shall be no order as to costs.