Madras High Court
U.Monisha vs M/S.South India Scheduled Tribes on 5 October, 2021
A.S.No.784 & 785 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment Reserved on : 19.11.2021
Judgment Pronounced on : 03.02.2022
CORAM :
THE HON'BLE MR. JUSTICE T.RAJA
AND
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
A.S.No.784 & 785 of 2019
1.U.Monisha
2.C.U.Prashanth ... Appellants
(in both Appeal suits)
Versus
M/s.South India Scheduled Tribes
Welfare Association, (Reg.No.205 / 1972),
No.579, (379) Anna Salai, Saidapet,
Chennai – 600 015.
rep.by its Secretary : Mrs.Chitra Kannan ... Respondent
(in both Appeal suits)
[ Mrs.Chitra Kannan, substituted in the place of the deceased
Mr.K.Raghupathy, vide Court order dated 05.10.2021 made in
CMP.No.16551 & 16554 of 2021 in A.S.Nos.785 &784 of 2019]
Common Prayer : First Appeals against the impugned Judgment (Common
Judgment) and decree dated 03.06.2019 made in O.S.No.122 of 2017, on
the file of the IV-Additional District Judge, Ponneri.
For Appellants : Mr.A.R.L.Sundaresan, Senior Advocate
for Mr. M.S. Mani
For Respondent : Mr.P.Subba Reddy
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COMMON JUDGMENT
Mr.Justice.D.Bharatha Chakravarthy:
A. The Appeals:
By a Judgment dated 03.06.2019 the Learned IV-Additional
District Judge, Ponneri, dismissed the suit in O.S.No.122 of 2017 filed by
the appellants herein, praying for specific performance of the suit agreement
dated 20.06.2011 directing the respondent/defendant to execute and register
the sale deed in respect of B schedule properties and decreed the counter
claim filed by the defendant, directing the plaintiff to pay a sum of
Rs.31,80,000/- (Rupees Thirty One Lakhs Eighty Thousand only) along
with interest at the rate of 6% per annum, from the decree and till the date of
realisation.
2.Aggrieved by the same, the appellants/plaintiffs have filed
A.S.No.784 of 2019 as against the dismissal of their suit in O.S.No.122 of
2017 and A.S.No.785 of 2019 as against the decree passed in the counter
claim in O.S.No.122 of 2017.
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3.For the sake of convenience the parties U.Monisha and
C.U.Prashanth, who are the appellants in this case and M/s.South India
Scheduled Tribes Welfare Association, which is the respondent, in this case,
are referred to as plaintiffs and defendant as per the array in the Original
Suit itself.
B.The case of the plaintiffs:
4.The first plaintiff being the daughter and the second plaintiff
being son, are the legal heirs of one C.S.Udhayashankar, who died on
24.08.2016. The defendant is a Society registered under the Tamil Nadu
Societies Registration Act, bearing registration No.205/1972. The Schedule-
A property totally admeasuring Acre.15.00 cents, belonged to the defendant
association, they, having purchased the same by three sale deeds dated
05.11.1986 registered as document Nos.3236/1986, 3242/1986, 603/1987
on the file of the Sub-Registrar, Ponneri. The plaintiffs' father was a regular
donor to the Educational Institution run by the defendant and he actively
participated in the development of the said Institution. While so, on
11.12.2009 an agreement of sale (Ex.A4) was entered into between the
plaintiffs' father and the defendant, however, the transaction was not
completed. While so, on 19.06.2011, the defendant/association convened an
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extraordinary General Body Meeting and passed a resolution to sell the said
10 Acres of land, which was subject matter of the earlier agreement dated
11.12.2009 along with 5 more Acres, totally amounting to 15 Acres on the
agreed sale consideration at the rate of Rs.8,50,000/- (Rupees Eight Lakhs
Fifty Thousand only) per acre, totally amounting to Rs.1,27,50,000/-
(Rupees One Crore, Twenty Seven Lakhs, Fifty Thousand only) to the
plaintiffs' father. Pursuant to the resolution a fresh agreement of sale dated
20.06.2011 (Ex.A6) was executed by the defendant in favour of the
plaintiffs' father. Pursuant to the agreement three Power of Attorney
documents dated 30.06.2011, registered as document Nos.920/2011,
921/2011, 922/2011 on the file of the Sub-Registrar, Redhills were also
executed by the defendant constituting plaintiffs' father
Mr.C.S.Udhayashankar, as power of attorney with due powers to identify
and sell the suit schedule property to an extent of 15 Acres and to execute a
sale deed and present such sale deeds for registration. Even though Ex.A-6
agreement mentioned that the transactions should be completed within 90
days, the same could not be completed, however, between the period from
2012 upto 15.05.2016 i.e., the total sale consideration of Rs.1,27,50,000/-
(Rupees One Crore Twenty Seven Lakh Fifty Thousand only) was
periodically paid by the plaintiffs' father and accepted by the defendant.
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5.To be more specific, while executing Ex.A6, agreement of sale,
a sum of Rs.3,00,000/- (Rupees Three Lakhs only) was paid and a sum of
Rs.21,15,000/- (Rupees Twenty One Lakhs Fifteen Thousand only) was
periodically received from the plaintiffs' father, for which, Ex.A9
acknowledgement and Statement of Accounts was issued by the defendant
and a further sum of Rs.1,17,05,000/- was paid from the plaintiffs' father
bank account and the account statements, three in series, have been marked
as Ex.A10 in all totalling to Rs.1,28,20,000/- i.e., excess payment of
Rs.1,20,000/- was made and all the said sums have been accepted without
any demur by the defendant.
6.On the strength of the powers of attornies, the plaintiffs' father
also sold Ac.4.00 cents out of Ac.15.00 cents in schedule A property to a
third party, namely, M/s.Dingo Commodeal Private Limited, by four sale
deeds dated 30.10.2014 registered as document Nos.7736 of 2016, 7737 of
2016, 7738 of 2016 and 7739 of 2016 on the file of the Sub-Registrar, Red
Hills. While being so, the plaintiffs' father suddenly died on 24.08.2016 due
to heart attack. The plaintiffs being the legal heirs of the agreement holder
requested the defendant to execute Powers of Attorneys in their favour for
the remaining Ac.11.00 cents of land or to execute sale deeds. But,
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however, the defendant did not come forward to do so. Therefore, the
plaintiffs filed the above suit in O.S.No.122 of 2017 for specific
performance of the agreement.
C. The case of the defendant :
7.The defendant filed a written statement and resisted the suit.
The contention of the defendant is that as per the agreement dated
20.06.2011, the plaintiffs' father ought to have paid the entire sale
consideration within three months i.e., before 20.09.2011. The plaintiffs'
father did not make the payments within the stipulated time. Even though
the defendant has received the money, one important condition in the sale
agreement dated 20.06.2011 is that the defendant should accompany the
plaintiffs' father and the defendant alone can execute the sale deed in favour
of the subsequent purchasers which condition was violated by the plaintiffs'
father, which amounted to cheating, fraud and breach of trust. Therefore, the
four sale deeds executed by him are not valid in law. Relying upon Sections
213 to 238 of the Contract Act, the defendant contended that as mentioned
in the power of attorney documents, the plaintiffs' father, when he sold the
part of the Suit Schedule properties to a third party, ought to have obtained
the sale consideration, only in the name of the defendant and therefore, the
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sale is invalid. The purchasers are not bonafide purchasers. By the sale of
these four acres alone, the plaintiffs' father has received a total sale
consideration of Rs.1,60,00,000/- (Rupees One Crore Sixty Lakhs only) and
he has paid Rs.1,27,50,000/- only as sale consideration for the entire extent
of 15 acres of land. The plaintiffs' father was only a power agent and
therefore the excess amount than the amount paid by him to the defendant
has to be recovered from the plaintiffs. The violation of two conditions, that
is, one in the sale agreement and another in the power of attorney amounted
to fraud and cheating and therefore, the suit is liable to be dismissed.
However, taking into account, the sale agreement has been made for the
four acres, the defendant prayed that the difference in amount of sale
consideration of Rs.32,50,000/-, with further interest 12% p.a., in all
totalling to Rs. 44,52,500/- by way of counter claim with further interest at
the rate of 12% p.a., on the principal amount of Rs.32,50,000/-.
8.The plaintiffs also filed a written statement to the counter claim
of the defendant, by contending that the same is totally untenable as the
plaintiffs' father had sold the properties as an agreement holder and he is not
a mere power agent.
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D. The Trial and Evidence:
9.Upon the said pleadings, the Trial Court framed the following
the six issues :
"1) Whether the plaintiff is entitled to the relief of
specific performance of the contract?
2) Whether the sale agreements dated 20.06.2011
and 11.02.2009 are true, valid and executed by the defendants?
3) Whether the entire sale consideration was paid to
the defendants in pursuance of the agreement, alleged by the
plaintiff is true?
4) Whether the plaintiffs have performed their part of
the contract?
5) Whether the defendants are entitled to the relief as
claimed in the counter-claim?
6) To what relief if any the plaintiffs are entitled to?"
10.On the side of the plaintiff, the second plaintiff was examined
as PW.1. The title deeds of the defendant viz., the three sale deeds under
which, the defendant purchased the Schedule-A property were marked as
Exs.A1 to A3. The first agreement between the plaintiffs' father and the
defendant dated 11.12.2009 is marked as Ex.A4. The extract from the
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minute book containing the resolution passed in the General Body Meeting
of the defendant dated 19.06.2011 is marked as Ex.A5. The suit agreement
for the sale of 15 Acres entered into between the plaintiffs' father and the
defendant dated 20.06.2011 is marked as Ex.A6. The three power of
attorney documents executed in favour of the plaintiffs' father were marked
as Ex's.A7, A8, A17. The acknowledgment of receipt of part sale
consideration along with the Statement of accounts furnished by the
defendant dated 15.03.2013 is marked as Ex.A9. The Bank passbook of the
plaintiffs' father containing entries as to transfer of the sale consideration to
the defendant is marked as Ex.A10. The legal heir certificate is marked as
Ex.A11. The death certificate of the plaintiffs' father dated 06.09.2016 is
marked as Ex.A12. The death certificate of the plaintiffs' mother is marked
as Ex.A13. The encumbrance certificate of items No.1, 2 & 3 of the
schedule B properties dated 04.05.2017 were marked as Ex's.A14 to A17
respectively. The four sale deeds were executed by the plaintiffs' father to
M/s.Dingo Commodeal Private Ltd., dated 30.10.2014 was marked as
Ex's.A18 to A21. The guideline value downloaded through the internet in
respect of the Schedule mentioned properties, is marked as Ex.A22.
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11.On the side of the defendant, one Mr.Raghupathy, the
Secretary of the defendant's Society was examined as DW.1 and
representative of the subsequent purchaser company viz., M/s.Dingo
Commodeal Private Ltd., one Mr. Madhanlal P. Jain was examined as
DW.2. The guideline value of the suit schedule properties downloaded from
the website is marked as Ex.B1. The Authorization letter issued by the said
purchaser/company to DW.2 Madhanlal P.Jain is marked as Ex.B2. The
copy of the receipt for a sum of Rs.10 Lakh, by the, said third party dated
06.09.2014 is marked as Ex.B3. The true copy of the Statements of accounts
of one Mr.Ramesh Kumar P.Jain is marked as Ex.B4. The Memorandum of
Understanding (Mou) is executed between the plaintiffs' father and
M/s.Dingo Commodeal Private Ltd., dated 06.11.2014 is marked as Ex.B5.
And another Statement of accounts of the account of Mr.Ramesh Kumar
P.Jain is marked as Ex.B6. The Demand notices issued by the Revenue
Divisional Officer (RDO) dated 16.09.2006 in respect of the four numbers
of the sale deeds for deficit stamp duty is marked as Ex.B7 series. And the
Challan evidencing the payment of difference in duty, dated 21.10.2016
paid by the said purchaser is marked as Ex.B8.
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The contention of the plaintiffs:
12.The plaintiffs contention is that even though the period of 90
days was mentioned, by the subsequent conduct of the parties, that is, the
plaintiffs' father paying the balance sale consideration over the period
continuously, the defendant accepting the same and as a matter of fact
issuing the acknowledgment under Ex.A9 would clearly prove that by
subsequent conduct, the original clause in the agreement as if 90 days time
is the essence in the contract stood negated and novated and the plaintiffs
have already performed their part of a contract and paid the entire sale
consideration and there was absolutely no problem whatsoever as the
plaintiffs' father had started selling the property in part.
13.It is the further contention of the plaintiffs that being the
agreement holder for executing the sale deed for himself or his nominees
and in consideration of the sale agreement, the power of attorney documents
have been executed. The plaintiffs' father, had he been alive, would have
sold the remaining extent in parts as per his will and wish and there was no
further obligation whatsoever on his part, towards the defendant.
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14.Further contention of the plaintiffs is that even though in the
original sale agreement, it is stated that the defendant would accompany the
plaintiffs' father and the defendant would execute the sale agreement,
subsequently, that was also given a go-bye and three power of attorney
documents were executed empowering the plaintiffs' father to execute the
sale deeds and present the same for registration. As far as clause (6) in the
power of attorney documents, it would only mean that, whatever the amount
disbursed, the same should be by way of a cheque or demand draft in the
name of the defendant association and the plaintiffs' father disbursed the
entire amount only in the name of the defendant association and as a matter
of fact monies were transferred directly to its account. Therefore, there is no
violation or fraud, or cheating. On the mere ground of subsequent
appreciation of land value, no right would accrue to the defendant to
wriggle out of the contract. As a matter of fact, the initial amounts were
paid by selling the plaintiffs' mother's Sridhana jewellery. Therefore, the
subsequent rise in prices alone cannot be a factor to deny the specific
performance of the agreement.
The contention of the defendant :
15.The contention of the defendant is that time is essence of the
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contract and upon the expiry of 90 days, the agreement stood lapsed and
even though, thereafter, the plaintiffs' father have been making the payment
of sale consideration and the defendant accepting the same, it must be seen
that there are two important violations committed by the plaintiffs' father.
First is the agreement of sale clearly stipulates that the defendant should
accompany the plaintiffs' father to the Registrar Office and while making
the four sales, the defendant did not accompany and the plaintiffs' father did
not put them on any notice. Secondly, while receiving the money from the
said purchaser's company, as per clause (6) of the power of attorney, being
the agent, the plaintiffs' father is liable to receive the sale consideration only
in the name of the defendant association. These two violations by the
plaintiffs' father amounted to fraud and cheating. Therefore, the prayer of
specific performance cannot be granted.
16.On top of the same, when the plaintiffs' father has received
excess amount from the third party purchaser than the amount paid by him
to the defendant, the same has to be recovered from the plaintiffs herein
with interest at the rate of 12% p.a., and hence, they prayed for dismissing
the suit and decreeing the counter-claim.
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The findings of the Trial Court:
17.After considering the contention of both sides, the Trial Court
in Paragraph No.24 found that after execution of Ex.A6/agreement, the
power of attorney documents were executed and as per the power deeds, the
agent has to do his duty only within the four corners of the powers granted
to him and any violation or deviation would render the action illegal. It
further found that as a power agent, when the plaintiffs' as collected
Rs.1,60,00,000/- but has remitted only Rs.1,28,20,000/-, the balance of
Rs.31,18,000/- is liable to be returned to the defendant. In paragraph No.26,
it found that after execution of Ex.A6 agreement, three powers have been
executed and power deeds become unenforceable upon the death of the
power agent and it holds that the legal heirs of the power agent have no
locus standi or any right to claim succession in respect of the agreement
under Ex.A6. On the strength of the findings, the Trial Court further holds
that the remaining 11 acres of the suit schedule property are vested with the
defendants free from any claim of the plaintiffs. It further found in
paragraph No.27 that because of the subsequent execution of the power
documents, Ex.A6 agreement is not intended to benefit the agent i.e.,
plaintiffs' father and therefore, the action of the plaintiffs' father is in
violation of the tenor of the power deeds and thus, it dismissed the suit and
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decreed the counter-claim.
The Submissions :
18.Heard Mr.A.R.L.Sundaresan, Learned Senior Counsel
appearing for the Plaintiffs/Appellants for Mr. M.S. Mani, learned counsel
for the Appellants and Mr.P. Subba Reddy, Learned Counsel for the
defendant/respondent.
19.Mr.A.R.L.Sundaresan, Learned Senior Counsel submits that
the reasoning of the Trial Court is absolutely not sustainable in law and the
transaction is one relating to the immovable property. The general rule is
that time is not the essence of the contract unless the contrary is proved. In
this case, even though the parties have stipulated 90 days time, by the
subsequent conduct of the parties, the same was given up and the entire sale
consideration was periodically accepted by the defendant without any
demur. As a matter of fact until the death of the father of the plaintiffs they
did not even cancel the powers of attornies. Only because of the unfortunate
incident of the plaintiffs' father’s sudden death due to heart attack, the
defendant is now trying to wriggle out of the contract. It is his further
submission that the contention of the respondent as if upon execution of the
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power document, the rights under Ex.A6 agreement would fade away is
absolutely ill-logical and the three power documents are aid of Ex.A6
agreement. He would submit that though it is mentioned in Ex.A6
agreement that the defendant would accompany and execute the sale deeds,
subsequently, it may be seen from the Clauses 1 & 2 of the power
documents that the plaintiffs' father himself was empowered to execute the
sale deeds and present the deeds for registration. According to the Learned
Senior Counsel, a proper reading of clause 6 of the power document would
show that the words, "nkYk; midj;J gzg;gl;Lthlhf;fis
r';fk; bgahpnyna fhnrhiy my;yJ tiut[ nfl;nghiy
K:yk; bra;J bfhs;sntz;Lk;/ " would only mean that the disbursal
to be made by the power agent should be in the name of the association by
Cheque or Demand draft alone and therefore, the submissions made on
behalf of the defendant as if plaintiff’s father committed fraud by executing
the sale deeds himself and in accepting the sale consideration to himself, is
absolutely without any merit.
20.The Learned Senior Counsel would further submit that merely
because there is price rise, and the plaintiffs would be profited cannot by
itself be a reason for the defendant to breach the contract and therefore, the
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Court ought to have directed the defendant to execute sale deed in favour of
the plaintiffs. He would submit that since the three power documents were
executed pursuant to Ex.A6 sale agreement by virtue of Sections 202 to 204
of the Contract Act, the power being given in consideration of the sale
agreement and the plaintiffs' father having partly exercised the authority, the
defendants in the first place did not even have the right to revoke the same
and therefore, just because, the plaintiffs' father died, the defendant
association cannot be permitted to repudiate the contract.
21.The Learned Senior Counsel for the appellants would rely on
the Judgment of the Hon'ble Supreme Court of India in Rambaran Prosad
Vs. Ram Mohit Hazra & Ors.,1. By placing reliance on Paragraph Nos. 4 &
5 he would submit that by virtue of Section 23(b) of the Specific Relief Act,
the representatives in interest can pray for specific performance of the
contract. Referring to Sections 37 to 40 of the Indian Contract Act, the
Learned Senior Counsel submits that promises made are liable to be
enforced by the legal representatives/transferees of the promisee.
22.The Learned Senior Counsel, relied upon the Judgment
1 AIR 1967 SC 744
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reported in T.M.Duraisamy and others Vs. Kanniappa Reddi2, again for the
proposition that legal representatives of the person in whose favour the
agreement was executed, will be entitled for the specific performance of the
contract. He also placed before us a Judgment of the Learned Single Judge
of the Allahabad High Court, in Sheomurat Ram Vs. Savitiri and others3
wherein, placing reliance on Section 15(a)(b) of the Specific Relief Act,
1963, it was held that the legal representatives of the deceased can
undoubtedly sue for the specific performance of the agreement, and the
Judgment of Culcutta High Court in Ramanand Agarwalla Vs. Richardson
Hooghly Holding Ltd & anr4 was also relied upon for the same proposition.
23.Per contra, Mr.P.Subba Reddy, Learned Counsel appearing for
the Respondent/defendant placed reliance on the following passage in
Ex.A6/agreement, which is extracted hereunder:-
",dp Kjy; jh';fs; vd;Dila
mf;upbkz;l; ncwhy;lh; vd;w Kiwapy; ,jd;
fPH;fz;Ls;s brhj;ij guhkhpj;Jtut[k;. rh;nt
bra;at[k;. nuhL tpl;L fhzpfw;fs; el;L tPLfl;Lk;
2 AIR 1972 Mad 640
3 AIR 1977 Allahabad 322
4 AIR 1979 Culcutta 335
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kidfshf gphpf;ft[k;. gphpj;j kidfis
bkhj;jkhfnth. gFjp. gFjpahfnth jh';fs;
tpUk;g[k; tpiyf;F fpiuak; ngrp fpiuak;
epr;rapf;ft[k;. mjw;fhd ml;thd;!; bjhifia
bgw;Wf;bfhz;L mf;hpbkzl;-urPJ vGjp
bfhLf;ft[k;. kPjp fpiuaj;bjhifia
bgw;Wf;bfhz;L vd;id miHj;J gj;jpu
gjpt[bra;J bfhLf;ft[k; ehd; mjpfhuk;
mspf;fpnwd;/ "
He would submit that it is a very important clause in the
agreement that the defendant/association's representative to be present while
executing the sale deeds to third parties. The said obligation has been
violated by the plaintiffs' father. Similarly relying on clause (6) in three
power of attorney documents which is extracted above, the Learned
Counsel would submit that clause (6) would mean that the amounts received
by the plaintiffs' father from the prospective purchasers should be only in
the name of the defendant association. Therefore, the plaintiffs' father had
violated this clause also. He would submit that since there is a blatant
violation of clause in the agreement Ex.A6 as well as the three powers of
attorney documents in Ex's.A7, A8 & A17, the plaintiffs are not entitled to
any relief whatsoever. The plaintiffs' father was a mere power of attorney
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agent. As the time mentioned in the sale agreement got lapsed, even though
it may be a fact that the defendant has been receiving the sale consideration
even after the period of 90 days, he would submit that the Trial Court has
rightly dismissed the suit filed by the plaintiffs and decreed the counter-
claim filed by the defendant.
The Questions:
24.On the strength of the pleadings of the parties, the evidence on
records and findings of the Trial Court and the submissions made by the
counsel on either side, the following questions do arise for determination in
this appeal:-
1.Whether or not time is essence of contract between the
parties and whether the plaintiffs' father and thereafter, the
plaintiffs are entitled to claim rights under Ex.A6 agreement?
2.Whether the execution of the three powers of attorney
documents under Ex's.A7, A8 & A17 would have on over
riding effect of Ex.A6 sale agreement ?
3.Whether the action of the plaintiffs' father in executing
Ex's.A18 to 21 sale deeds and obtaining the sale consideration
in his own name amounts to fraud?
4.To what reliefs the parties are entitled to?
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Questions 1-3:
25.As submitted by the Learned Senior Counsel, generally in
contracts relating to sale of immovable property there is no presumption that
time is the essence of the contract and the contrary is to be proved (Para 21
of the Constitution Bench judgment of the Hon'ble Supreme Court of India
in Chand Rani -Vs- Kamal Rani5. To prove the contrary, the clause
prescribing 90 days in Ex.A6 agreement is relied upon by the defendants.
The Hon'ble Supreme Court of India in the recent Judgment of Welspun
Speciality Solutions Ltd vs Oil and Natural Gas Corporation Ltd.,6 held as
follows :
“35. It is now settled that ‘whether time is of the essence in
a contract’, has to be culled out from the reading of the
entire contract as well as the surrounding circumstances.
Merely having an explicit clause may not be sufficient to
make time the essence of the contract.”
In this case, clearly and categorically the parties have continued Ex.A6
agreement beyond the 90 days time and the defendant had issued Ex.A9
acknowledgement/ Statements of accounts, for receipt for sale consideration
on various dates. Subsequently also, the plaintiffs' father kept on
transferring the entire sale consideration in parts and the same has been
5 2021 SCC online SC 1053
6 1993 1 SCC 519
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accepted by the defendant without any demur whatsoever. Therefore, it is
not now open to them to contend that, the time is essence of contract.
26. We find that (i) Ex.A6 agreement is valid and the time stood
enlarged; (ii) its execution is admitted; (iii)the resolution of the defendant
association preceding the agreement is very clear that the defendant's
association wanted to sell the property for a sale consideration of
Rs.8,50,000/- per acre ; (iv) the plaintiffs' father himself having performed
his part of the contract by paying the entire sale consideration of
Rs.1,27,50,000/-; (v) Simultaneously he started selling the schedule
property by executing four sale deeds in favour of a third party by virtue of
the right accrued to himself under Ex-A6 sale agreement; (vi) Till the life
time of the plaintiffs' father, the defendant did not raise any objection
whatsoever, nor it cancelled the power or repudiated the contract and all
was well between the parties, until the sudden death of the plaintiffs' father;
(vii) Only because, the legal representatives thereafter, approached the
defendant, they are refusing to execute further documents and complete the
transaction. Therefore, as the legal representatives, the plaintiffs are vested
with the rights under the contract in Ex.A6, and they are entitled to
approach the Court for specific performance of the agreement, as held by
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the Hon'ble Supreme Court of India in the Judgment of Rambaran Prosad
referred above.
27.Coming to the contentions of the defendant, on a reading of
Ex.A6 agreement it would be clear that the agreement was for sale of 15
acres of land mentioned in the schedule and in the capacity as 'the
agreement holder, the plaintiffs' father was given permission to maintain the
lands, survey the lands, to form a layout and roads required for the layout
and to sell as plots out of the layout and to receive the entire sale
consideration and can call the defendant to execute the sale deed. This is
understandable, because, on the date of execution of Ex.A6 sale agreement
(20.06.2011), no power of attorney was executed in favour of the plaintiffs'
father. However, subsequently, on 30.06.2011, the three power of attorney
documents were executed and Clause 1 and 2 of the power documents are
extracted hereunder:-
"1. fpnH brhj;J tptuj;jpy; bjspthf
tpthpf;fg;gl;Ls;s fhypepyj;jpid ,d;W Kjy;
r';fk; rhh;ghf jh';fs; guhkupj;J. ghpghydk;
bra;;a KG mjpfhuk; mspf;fpd;nwd;/
2/ fPnH brhj;J tptuj;jpy; bjspthf
tpthpf;fg;gl;Ls;s fhyp epyj;jpid fpiuak;
bra;tjhf ,Ue;ejhy; jh';fns r';fk; rhh;ghf
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A.S.No.784 & 785 of 2019
fpiuajhuiu epakpj;J fpiuaj; bjhif. fpiua
ml;thd;!; ,itfis jh';fns eph;zak; bra;J
fpiua xg;ge;jk; bra;at[k;. fpiua ml;thd;!;
bgwt[k;. fpiua xg;ge;jk; Koe;jt[ld; fpiua
gj;jpuk; jahu; bra;J kpFjp fpiua bjhifiag;
bgw;W bfhz;L vdf;F gjpyhd r';fk; rhh;ghf
jh';fns jdpj;jdpahfnth my;yJ bkhj;jkhfnth
ifbaGj;jJ bra;J rk;ge;jg;gl;l Jiz gjpthsh;
mYtyfj;jpy; gjpt[ bra;J bfhLf;ft[k;. jpUk;g
bgw;Wf; bfhLf;ft[k; j';fSf;F ,jd; K:yk; KG
mjpfhuk; mspf;fpd;nwd;/"
Therefore, now, the power to execute the sale deed and to present
the same, for registration before the Sub-Registrar was also specifically
given to the plaintiffs' father. Therefore, the first argument that the
plaintiffs' father violated the condition in Ex.A6 sale agreement is without
any merits and is rejected.
28.The second submission is that as per clause (6) of the power
document, the plaintiffs' father ought not to have obtained the sale
consideration to himself and should have to get Cheques or Demand draft
from the third parties/prospective purchasers only in the name of the
defendant association is per se ill-logical and self-contradictory. On the one
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A.S.No.784 & 785 of 2019
hand, the defendant receives the sale consideration fixed under Ex.A6 sale
agreement from the plaintiffs' father i.e., the sum of Rs.1,27,50,000/-; while
on the other hand, it also contends that if the plaintiffs' father sells portions
of lands to third parties those amounts should also be paid, in the name of
the defendant as Cheque or Demand draft. On the face of it, this submission
is absurd. The defendant cannot approbate and reprobate. The Hon'ble
Supreme Court of India in recent Judgment reported in Union of India &
Others Vs.N. Murugesan7 ( C.A. Nos. 2491-2492 dated 07/10/2021) held as
follows :
“26.These phrases are borrowed from the Scott’s law.
They would only mean that no party can be allowed to
accept and reject the same thing, and thus one cannot
blow hot and cold. The principle behind the doctrine
of election is inbuilt in the concept of approbate and
reprobate. Once again, it is a principle of equity
coming under the contours of common law. Therefore,
he who knows that if he objects to an instrument, he
will not get the benefit he wants cannot be allowed to
do so while enjoying the fruits. One cannot take
advantage of one part while rejecting the rest. A
person cannot be allowed to have the benefit of an
instrument while questioning the same. Such a party
either has to affirm or disaffirm the transaction. This
principle has to be applied with more vigour as a
common law principle, if such a party actually enjoys
the one part fully and on near completion of the said
enjoyment, thereafter questions the other part.An
element of fair play is inbuilt in this principle. It is
also a species of estoppel dealing with the conduct of
7 2021 (12)
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A.S.No.784 & 785 of 2019
a party. We have already dealt with the provisions of
the Contract Act concerning the conduct of a party,
and his presumption of knowledge while confirming
an offer through his acceptance unconditionally ”
Thus, it is clear that the defendant cannot be permitted to approbate and
reprobate and as such the second submission made on behalf of the
defendant is also rejected. Therefore, we hold that the plaintiffs being a
legal representatives are entitled to specific performance of the Ex. A6 sale
agreement.
29.A careful perusal of the materials on record would show the
developments and progress of the transaction, from the first agreement to
sell only 10 acres to the second agreement to sell 15 acres and execution of
power documents thereafter and selling the land in parts thereafter. After the
execution of second agreement, upon realising the ground situation that
only by plotting out the land or selling in a smaller extent alone the
plaintiffs' father can pay the sale consideration and complete the transaction,
the three power of attorney documents are given to him for the purpose.
Therefore, in this case, the three power of attorney documents viz., Ex.A7,
A8, & A17 are executed in aid of, to carry out and in consideration of sale
agreement and they cannot be in any manner construed as negating or
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A.S.No.784 & 785 of 2019
overriding the Ex.A6 agreement. Therefore, the contentions made in this
regard and the findings of the Trial Court in this regard are fallacious. We
see no commission or omission by the plaintiffs' father, which would
disentitle the plaintiffs to seek specific performance.
Question No. 4 :
30.Having found that there was no commission or omission by the
plaintiffs' father, now the final question is as to what reliefs the parties are
entitled to ? Normally this would be automatic and consequential in any
other suit. But when it comes to the suit for specific performance, this is a
court of equity and therefore, on the principles of justice, equity and good
conscience, the Court would still do equities between the parties.
31.Equity jurisdiction is the jurisdiction where the Court balances
the equities between both sides and considers what is just and fair. The
exercise and grant of the discretionary relief are guided by Sections
10,11,14, 16 etc., of the Specific Relief Act, 1963 and the various decisions
of the Hon'ble Supreme of India. Two submissions are made on behalf of
the defendant on this score. First, there is a huge price rise and second that
the defendant association will be put to hardship. It must be first seen that
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A.S.No.784 & 785 of 2019
in this case, the defendant's plea is one of fraud and violation of the
agreement and power documents and there are no specific pleadings in the
written statement for the above submissions to stand. Be that as it may, let
us consider the merits of the above submissions.
32.First, regarding the issue of price rise, the Hon'ble Supreme
Court of India has laid down broad contours within which the Court has to
exercise its jurisdiction, in the recentJudgment reported in Ferrodous
Estates (P) Ltd -Vs- P. Gopirathnam(Died) & others8 , wherein it has
considered all the earliear judgments, and to our mind, the following are the
salient principles laid down: (a) The normal rule is to grant specific
performance and refusal would be an exception; (b) The increcase in the
real estate value of the property even if its manifold or mega increase,
should enure solely to the party who complied with and abided by the
contract, as against the defaulting party; (c) However, in appropriate cases,
additional sums can be ordered to be paid by the plaintiff depending upon
the facts and circumstances of the case.
8 2021 SCC Online SC 825
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A.S.No.784 & 785 of 2019
33.Coming to the plea of hardship, the defendant pleads that it is
an association that is taking care of socially and economically backward
Tribal children. The plaintiffs plead that they had pledged the family jewels
and have also spent huge sums for evicting the encroachers. Under these
circumstances, we deem it fit and proper that the interests of justice will be
well served by directing the plaintiffs to pay an additional consideration of
Rs.80,00,000/-(Rupees Eighty Lakhs Only). The plaintiffs shall deposit the
said additional consideration amount within 3 months from the date of
receipt of this Judgment.
Findings on the Issues :
34.For the forgoing reasons and conclusions reached by us, we
upturn the findings of the trial court regarding issue No. 1 and answer the
same in favour of the plaintiffs that the plaintiff will be entitled to Specific
Performance on deposit of the additional consideration as indicated above.
Regarding issue No. 2, we hold that the Ex-A6 agreement is valid as it is
executed by the defendant reversing the findings that it is lapsed and
overridden by the power documents. On issue No. 3, we hold that the entire
sale consideration is paid by the plaintiffs' father, hence, we reverse the
findings of the trial court as if the amounts are paid in the capacity of a
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A.S.No.784 & 785 of 2019
power agent. As regards the issue No. 4, we hold that the plaintiffs have
performed their part of the contract and reversing the findings of the trial
court to the contrary. We also reverse the findings of the trial court on issue
No.5 and hold that the defendants will not be entitled to the counter claim
and dismiss the counter-claim. On issue No. 6, we reverse the findings of
the Trial court and hold that the plaintiffs will be entitled to specific
performance on payment of additional sum as mentioned above and the
defendant is not entitled to the counter-claim.
Reliefs :
35. In the result,
(1) A.S. No.784 of 2019 is allowed on additional conditions. The Suit
filed by the plaintiffs in O.S. No. 122 of 2017 on the file of the IV
Additional District Judge, Ponneri is decreed by (a) directing the
plaintiffs to pay to the defendant or on refusal of the defendant, to
deposit into the trial court, an additional sum of Rs. 80,00,000/-
(Rupees Eighty Lakhs only) within three months from the date of
receipt of a copy of this Judgment; (b) directing the defendant to
execute sale deed(s) in favour of the plaintiffs or their nominees in
respect of the Schedule B mentioned property within two months
from the date of payment of the above said sum by the plaintiffs;
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A.S.No.784 & 785 of 2019
(2) That the plaintiff will be entitled to the relief of permanent injunction
restraining the defendant or its office bearers from in any manner
interfering with the peaceful possession and enjoyment of the plaintiff
on and from the date of payment/deposit of the additional sum as
order in clause (1) above;
(3) That A.S.No.785 of 2019 is allowed and the counter-claim filed by
the defendant in O.S. No. 122 of 2017 on the file of the IV Additional
District Judge, Ponneri, shall stand dismissed;
(4) However, on the facts and circumstances of the case, parties shall
bear their own costs.
(5) All the connected Miscellaneous petitions, if any, shall stand closed.
(T.R., J.) (D.B.C., J.)
03.02.2022
Index : yes
Internet :yes
Speaking order
klt
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A.S.No.784 & 785 of 2019
T.RAJA, J.,
and
D.BHARATHA CHAKRAVARTHY, J.,
klt
Pre-Delivery Judgment in
A.S.No.784 & 785 of 2019
03.02.2022
https://www.mhc.tn.gov.in/judis
