Madras High Court
V.Ramamoorthy vs Leelavathi ..1St on 11 April, 2022
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 11.04.2022
CORAM:
THE HONOURABLE MR. JUSTICE N.ANAND VENKATESH
SA.No.404 of 2013
V.Ramamoorthy ..Plaintiff /
1 respondent / Appellant
st
Vs.
1. Leelavathi ..1st Respondent /
2nd respondent /
1st respondent
2. C.Nagaraj ..2nd Defendant /
Appellant / 2nd respondent
Prayer: Second Appeal filed under section 100 of the Code of
Civil Procedure against the judgment and decree dated 12.09.2012
made in A.S.No.42 of 2011 on the file of Principal District Court,
Krishnagiri reversing the judgment and decree dated 12.04.2011
made in O.S.No.6 of 2007 on the file of the Subordinate Judge of
Hosur.
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2
For Appellant : Mr.D.Venkatasubban
for M/s.Sarvabhauman
Associates
For Respondents : MR.D.Shivakumaran for R2
No appearance for R1
JUDGMENT
The plaintiff is the appellant in this second
appeal.
2. The plaintiff filed the suit seeking for the relief of
specific performance based on the agreement of sale dated
25.01.2006, marked as Ex.A1.
3. The case of the plaintiff is that he entered into
an agreement of sale dated 25.01.2006 with the 1st Defendant and
the total sale consideration was fixed as Rs.2,43,000/-. On the
date of the agreement, a sum of Rs.15,000/- was paid as advance
amount. As per the agreement, the balance sale consideration of
Rs.2,28,000/- was expected to be paid within one month and on
receipt of the same, the sale deed had to be executed by the 1st
defendant in favour of the plaintiff.
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4. The further case of the plaintiff is that he issued
a legal notice dated 13.03.2006, marked as Ex.A2. In the said
legal notice, the plaintiff expressed his readiness and willingness
to pay the balance sale consideration and called upon the 1st
defendant to come to the Sub Registrar office on 27.03.2006 and
execute the sale deed in favour of the plaintiff. The grievance of
the plaintiff is that the 1st defendant after receiving the legal
notice, hurriedly executed a sale deed dated 20.03.2006 in
favour of the 2nd defendant and thereafter, gave a reply notice
dated 21.03.2006, marked as Ex.A3. In the reply notice, even
though the 1st defendant admitted the execution of the sale
agreement, he took a stand as if time fixed under the agreement
lapsed and therefore, the advance amount was forfeited and that
the sale deed has been executed in favour of the 2nd defendant.
Left with no other option, the plaintiff had filed the suit seeking
for the relief of specific performance.
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5. The 1st defendant did not contest the suit and
was set ex-parte. The subsequent purchaser namely the 2nd
defendant alone contested the suit. The 2nd defendant filed a
written statement and he feigned ignorance of the transaction
between the plaintiff and the 1st defendant. According to the
2nd defendant, he was not aware about the sale agreement and
he was also not aware about the notice that was exchanged
between the parties. He claimed himself to be a bonafide
purchaser for value and according to the 2nd defendant, it is the
1st defendant who had connived with the plaintiff and is
attempting to harass the 2nd defendant, who was a bonafide
purchaser. The 2nd defendant took a further stand that the
possession of the property was also handed over to him by the 1st
defendant on the date of execution of the sale deed. Accordingly,
the 2nd defendant sought for the dismissal of the suit.
6. The Trial Court on considering the facts and
circumstances of the case and after appreciating the oral and
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documentary evidence decreed the suit through a judgement and
decree dated 12.04.2011. Aggrieved by the same, the 2nd
defendant filed an appeal in A.S.No.42 of 2011 and the Lower
Appellate Court on considering the findings of the Trial Court and
after re-appreciating the oral and documentary evidence,
through a judgment and decree dated 12.09.2012, allowed the
appeal and set-aside the judgement and decree of the Trial
Court. Consequently, the suit filed by the plaintiff was dismissed.
Aggrieved by the same, the plaintiff has filed the present second
appeal.
7. When the second appeal was admitted, this Court
framed the following substantial questions of law :-
(a) Whether the Lower Appellate Court is correct
in non-suiting the appellant especially when Ex.A1
agreement and the receipt of advance is accepted
by the second respondent and there is no proof to
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show that the second respondent had cancelled
the agreement and intimated the same to the
appellant?
(b) Whether the Lower Appellate Court is correct
in law in upholding Ex.B2 sale totally overlooking
the fact that the same has come about on account
of the fraud and collusion between the
respondents?
8. Heard Mr K.Venkatasubban for M/s.Sarvabhauman
Associates, learned counsel for the appellant and
Mr.D.Sivakumaran, learned counsel for the 2nd respondent and
this Court also carefully perused the materials available on
record and the findings of both the Courts below.
9. The Trial Court has exhaustively considered the sale
agreement and the notice that was exchanged between the
plaintiff and the 1st defendant and also the oral evidence of PW1
and PW2. On considering the same, the trial Court came to a
categoric conclusion that the plaintiff has proved Ex.A1 Sale
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agreement and also the receipt of the advance amount by the 1st
defendant. The said finding of the Trial Court has not been
disturbed by the Appellate Court and this Court also concurres
with the findings of the Courts below with regard to the
genuineness of the Sale agreement marked as Ex.A1.
10. The plaintiff had issued a legal notice dated
13.03.2006 to the 1st defendant calling upon the 1st defendant
to receive the balance sale consideration and to execute the sale
deed in his favour. Even though, no acknowledgment has been
filed to prove the receipt of the legal notice by the 1st
defendant, the fact that the 1st defendant had given a reply
notice dated 21.03.2006 to the plaintiff shows that the legal
notice was received and the 1st defendant was aware of the fact
that the plaintiff was willing to pay the balance sale
consideration and get the sale deed executed in his favour.
11. The Lower Appellate Court while dealing with this
issue has gone on the footing that the plaintiff did not file the
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acknowledgment to prove the receipt of the legal notice by the
1st defendant. Therefore, the Lower Appellate Court came to a
conclusion that the 1st defendant had intentionally executed a
sale deed in favour of the 2nd defendant on 20.03.2006, marked
as Ex.B2 and thereafter had created a reply notice as if it was
sent on 21.03.2006. Basically, the Lower Appellate Court has
entertained a doubt on the conduct of the 1st defendant and it
has also doubted the conduct of the plaintiff. The reason that
has been assigned by the Lower Appellate Court was that the
total sale consideration was fixed as 2,43,000/- and there was no
reason as to why the 1st defendant would receive a lesser sale
consideration from the 2nd defendant to the tune of Rs.78,000/-
and there cannot be such a huge variation in the sale
consideration. The Lower Appellate Court therefore has come to
a conclusion that the plaintiff and the 1st defendant have
created the sale agreement and have also created the legal
notice and the reply notice as if it was sent by the 1st defendant
and thereby, have attempted to deprive the right of the 2nd
defendant who had purchased the property through a registered
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sale deed after paying a valid sale consideration.
12. The reasons assigned by the Lower Appellate Court
was a probable reason that could be given considering the facts
and circumstances of the case. It is also possible that a different
reasoning can be given by this Court on the very same set of
evidence that is available on record. However, that is not a
reason for this Court to interfere with the findings of the Lower
Appellate Court in exercise of its jurisdiction under Section 100
of CPC, unless this Court finds the reasoning given by the Lower
Appellate Court to be perverse.
13. The sale agreement between the plaintiff and the 1st
defendant and the fact that an advance amount of Rs.15,000/-
was paid by the plaintiff has been proved by examining PW1 to
PW3. Unfortunately, the 1st defendant has not contested the
case nor was he examined on the side of the defendants.
Therefore, an adverse inference has to be drawn and it has to be
taken that the plaintiff has proved the execution of the sale
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agreement. Therefore, the findings of the Lower Appellate Court
doubting the very execution of the sale agreement is perverse.
The 1st substantial question of law is answered accordingly.
14. In the present case, there is nothing on record to
show that the 2nd defendant was aware about the sale
agreement between the plaintiff and the 1st defendant. The 2nd
defendant has independently entered into a transaction with the
1st defendant and a sale deed has been executed in his favour.
The sale deed itself reflects the payment of a sum of Rs.78,000/-
towards the sale consideration. The conduct of the 1st defendant
is highly questionable in this case. It looks like the 1st defendant
has taken both the plaintiff and the 2nd defendant for a ride.
There is nothing to show that there was collusion between the
defendants in order to defeat the right of the plaintiff under the
sale agreement dated 25.01.2006. The sale deed dated
20.03.2006 marked as Ex.B2 cannot be held to be a document
that has come about on account of any fraud or collusion. The
only issue will be as to whether the sale deed marked as Ex.B2
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can be independently sustained in the light of the agreement of
sale dated 25.01.2006 that stood in favour of the plaintiff. Under
normal circumstances, the Sale agreement can be enforced if the
plaintiff is able to prove readiness and willingness to perform his
part of the contract. The subsequent sale deed executed in
favour of the 2nd defendant will not take away the right of the
plaintiff in getting the sale agreement specifically enforced.
Under such circumstances, where the Court upholds the sale
agreement and grants the relief of specific performance, the sale
deed has to be executed by the original owner and the
subsequent transferee in favour of the agreement holder. The law
on this issue is too well settled.
15. In the light of the same, it has to be seen as to
whether the plaintiff was ready and willing to perform his part of
the contract. The Trial Court had held that time is not the
essence of the contract and has found that the plaintiff was
ready and willing to perform his part of the contract. On the
contrary, the Lower Appellate Court has held that time is the
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essence of the contract and since the plaintiff did not act within
the time stipulated under the agreement, he is not entitled to
get the sale agreement specifically enforced.
16. In order to appreciate this issue, this Court has to
take into consideration the specific clause that is available under
the agreement of sale and for proper appreciation, the same is
extracted hereunder :-
,d;iwa jpdk; v';fspy; 1 yf;fkpl;lthpd; mtru epkpj;jpak;
Flk;gr; bryt[fs; kw;Wk; rpy;yiuf; fld;fs; jPh;g;gjw;fhft[k; nrh;e;J fPH;
bcl;a[ypy; fz;l tPl;Lkidia 2 yf;fkpl;ltUf;F U. 2 43000/00
vGj;jhy; ,uz;L ,yl;rj;jp ehw;gj;jp Kd;whapuk; Ugha;fSf;Fr; Rj;jf;
fpuak; bra;J fpuaj; bjhifapy; ,d;iwajpdk; Kd;gzkhf U. 15000
(vGj;jhy; gjpize;J Mapuk; Ugha;fs; kl;Lk;) Ugha;fs; buhf;fkhf
moapy; fz;l rhl;rpfspd; Kd;dpiyapy; 2 yf;fkpl;lthplkpUe;J 1
yf;fkpl;lth; bgw;Wf;bfhz;Ls;shh;/ ghf;fpaj; bjhifahd 238000/00
vGj;jhy; ,uz;L ,yl;rj;jp Kg;gj;jp vl;lhapuk; Ugha;fs; ,d;W Kjy; 1
(xU) khjk; fhy tha;jhtpw;Fs; ghf;fpjp bjhifia 2 yf;fkpl;lth; 1
yf;fkpl;ltUf;F brYj;jp brhj;jpid 2 yf;fkpl;ltnuh my;yJ mth;
tpUk;g[k; egh;fs; bgahpnyh brhj;jpd; rhpahd fpuag; gj;jpuk; vGjp gjpt[
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bra;Jf;bfhs;s ntz;oaJ/ nkw;go tha;jhtpw;Fr; rhpahf ghf;fpj;
bjhifia 2 yf;fkpl;lth; 1 yf;fkpl;ltUf;Fr; brYj;jj; jtwpdhy; 2
yf;fkpl;ltUf;Fr; brYj;jj; jtwpdhy; 2 yf;fkpl;lth; brYj;jpa Kd;gzk;
,Hf;f nehpLk;/
17. A plain reading of the above clause shows that the
total sale consideration was fixed at Rs.2,43,000/- and the
plaintiff had paid a sum of Rs.15,000/- as advance amount on the
date of the agreement. The balance sale consideration of
Rs.2,38,000/- was liable to be paid by the plaintiff within a
period of one month from the date of agreement to the 1 st
defendant. On receipt of the same, the 1st defendant had to
execute the sale deed in favour of the plaintiff or in favour of his
agent or representative. The agreement also provides that if the
balance amount is not paid within the time stipulated, the
advance amount paid by the plaintiff is liable to be forfeited by
the 1st defendant.
18. The classical test to determine as to whether a
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condition stipulated in an agreement is mandatory or directory is
to see if the agreement itself provides for a consequence if the
condition is not complied with. If a consequence is provided, it
can be safely concluded that the condition is mandatory.
19. In the present case, the agreement specifically stated
that the balance sale consideration must be paid by the plaintiff
to the 1st defendant within a period of one month from the date
of agreement. On failure to comply with this condition, the 1st
defendant was given the right to forfeit the advance amount.
That makes it very clear that the condition was mandatory and
consequently, the time is the essence of this contract. This
crucial factor was not properly appreciated by the Trial Court and
the Trial Court went wrong in rendering a finding as if time is not
the essence of the contract.
20. There used to be a time where insofar as immovable
property is concerned, time was not considered to be the
essence. This position of law was subsequently altered by the
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Hon'ble Supreme Court and it was categorically held that the
parties can fix a time limit in the agreement itself and in such a
case, the time can be held to be the essence of the contract
even insofar as a immovable property is concerned. This
preposition of law will squarely apply to the facts of the present
case. The Lower Appellate Court has rightly held that the time is
the essence of the contract and the plaintiff has not shown his
readiness and willingness within the time stipulated under the
agreement. The agreement was dated 25.01.2006 and the
plaintiff ought to have expressed his readiness to pay the balance
sale consideration on or before 24.02.2006. However, the first
step that was taken from the side of the plaintiff was only on
13.03.2006, when the legal notice was issued to the 1st
defendant. There is no explanation as to why the plaintiff never
acted between 24.02.2006 to 13.03.2006. The series of
judgments of the Hon'ble Supreme Court clearly insist that the
plaintiff who is seeking for the relief of specific performance
must show his readiness and willingness right from the date of
the agreement till the date of the passing of the decree in the
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suit. If the plaintiff is found wanting during the interregnum
period, the equitable remedy of specific performance cannot be
granted in favour of the plaintiff.
21. In view of the above discussion, this Court holds that
the Lower Appellate Court was right in upholding the sale deed
dated 20.03.2006 executed in favour of the 2nd defendant and
this sale deed cannot be held to be as a result of fraud or
collusion between the defendants. The moment the plaintiff had
failed to establish readiness and willingness in performing his
part of the contract under the sale agreement dated 25.01.2006,
he becomes dis-entitled for the relief of specific performance
and consequently, the sale deed executed by the 1st defendant in
favour of the 2nd defendant has to be upheld. The 2nd substantial
question of law is answered accordingly.
22. In the result, this Court does not find any ground to
interfere with the judgment and decree passed by the Lower
Appellate Court and the same is hereby upheld. Accordingly, this
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Second Appeal is dismissed. Considering the facts and
circumstances of the case, there shall be no order as to costs.
11.04.2022
Speaking Order
Index : Yes / No
Internet : Yes / No
rka
To
1. The VI Addl. Judge, City Civil Court, Chennai
2. The V Asst. Judge, City Civil Court, Chennai
Copy To:-
The Section Officer
VR Section, High Court
Madras.
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N.ANAND VENKATESH.,J
rka
SA.No.404 of 2013
11.04.2022
https://www.mhc.tn.gov.in/judis
