Madras High Court
M/S Pan Resorts Ltd vs H.H.Pooyam Thirunal Gouri ... on 2 August, 2023
O.S.A.No.277 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 27.06.2023
DATE OF DECISION : 02.08.2023
CORAM :
THE HON'BLE MR.JUSTICE S.S.SUNDAR
AND
THE HON'BLE MR.JUSTICE C.KUMARAPPAN
O.S.A.No.277 of 2013
and
C.M.P.Nos.8323 & 8324 of 2023
M/s Pan Resorts Ltd
Having its Registered Office at:
125, St. Mary's Road
Alwarpet, Chennai 600 018
rep by its Director Mr.Sarath Kakumanu
substituted in the place of Sri.K.Subbiah,
as per order dated 9.3.2010 in A.No.1372/2010
and order dated 4.7.2012 in A.No.2742/2012 .. Appellant
v.
H.H.Karthika Thirunal Lakshmi Bayi (deceased)
1. H.H.Pooyam Thirunal Gouri Parvathi Bayi
2. H.H.Aswathi Thirunal Gauri Lakshmi Bayi
3. H.H.Moolam Thirunal Rama Varma
____________
Page 1 of 74
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
4. H.H.Princess Thiruvathira Thirunal Lakshi Bayi
5. H.H.Pooratathi Thirunal Marthanda Varma
6. H.H.Aswathy Thirunal Rama Varma
7. H.H.Avittam Thirunal Aditya Varma
8. H.H.Uthradam Thirunal Padmanabhadasa (deceased)
Marthanda Varma
9. Indian Bank
Adyar Branch
Chennai 600 020
rep by its Chief Manager
10.A.C.R.Raj Ganesan
(R10 impleaded as party respondent vide Court
order dated 04.03.2021 in OSA.277/13)
11. H.H.Padmanabhavarma
12. H.H.Parvati Devi
(R11 & R12 brought on record as LRs
of deceased 8th respondent (H.H.Uthradam Thirunal)
vide order of Court dated 19.06.2023 in MP.1/15
in OSA.277/13) .. Respondents
(Respondents 1 to 3 recorded as LRs of
deceased H.H.Karthika Thirunal Lakshmi Bayi
as per order dated 19.4.2012 in Memo dated
19.3.2010 and order dated 4.7.2012 in
A.No.2743/2012)
Memorandum of Grounds of Original Side Appeal under Order
XXXVI, Rule 1 of the Madras High Court Original Side Rules read with
Clause 15 of the Letters Patent, against the judgment and decree dated
____________
Page 2 of 74
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
01.10.2012 made in C.S.No.632 of 1997 on the file of this Court.
For Appellant :: Mr.Om Prakash
Senior Counsel for
M/s Abitha Banu
For Respondents :: Mr.T.V.Ramanujam
Senior Counsel for
Mr.S.Prabakar for R1 to R3, 7 & 11
Mr.S.Rajendrakumar for R6
Mr.Rajendran Raghavan for R9
Mr.Ajmal Khan
Senior Counsel for
M/s Ajmal Associates for R10
No appearance for R5
R8-Died (steps taken)
R12- Batta due
JUDGMENT
S.S.SUNDAR,J.
The above original side appeal has been filed by the plaintiff as
against the judgment and decree of the learned single Judge dated
01.10.2012 made in C.S.No.632 of 1997 on the file of this Court.
2. The appellant herein has originally filed the suit in C.S.No.632 of
1997 for the relief of specific performance directing the defendants 1 to 9 to
execute the sale deed in favour of the plaintiff after receiving the balance of
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
sale consideration payable to the defendants in proportion to their respective
shares in terms of the agreement of sale dated 3.8.94 and for consequential
relief including the relief of directing the defendants to put the plaintiff in
full possession of the suit property.
3. The case of the appellant in the plaint can be summarized as
follows:-
(a) Defendants 1 to 9 are the joint owners of the suit property called
Travancore House/Adyar House situated at L.B.Road, Padmanabha Nagar,
Adyar, Chennai measuring about an extent of 20 grounds. Defendants 1 to 8
are entitled to 11.25% of shares and the ninth defendant is entitled to 10%
share in the suit property. Earlier, defendants 1 to 9 entered into an
agreement of sale dated 10.3.93 with one Shankar Khandadi and one Usman
Fayaz along with Indian Bank represented by its Chief Manager, Adyar
Branch. Since the said agreement with third parties did not come through,
the plaintiff entered into an agreement for sale by executing a memorandum
of agreement with the defendants 1 to 9 on 3.8.94. As per the said
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
agreement, a sum of Rs.325 lakhs was fixed as sale consideration and a sum
of Rs.50 lakhs was paid as advance. A sum of Rs.50 lakhs paid under the
previous agreement dated 10.3.93 is also adjusted towards part of sale
consideration and therefore the balance of sale consideration payable by the
plaintiff to the defendants was Rs.225 lakhs.
(b) In terms of clause 4 of the agreement, the plaintiff agreed to pay a
sum of Rs.50 lakhs to the defendants 1 to 9 on production of urban land
ceiling clearance if produced before the NOC from the authorities of Income
Tax Department or on production of NOC under Chapter XX-C of the
Income Tax Act.
(c) In terms of clause 5 of the agreement, the plaintiff was to pay the
balance of sale consideration without waiting for clearance under the Urban
Land Ceiling Act and complete the transaction and get the sale deed
executed within four months from the last date from which the defendants 1
to 9 obtain and produce (a) no objection certificate under Chapter XX-C of
the Income Tax Act and (b) income tax clearance in respect of each of the
defendants 1 to 9 under Section 230-A of the Income Tax Act.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
(d) In terms of clause 8 of the agreement, defendants 1 to 9 had
agreed to register the sale deed at the cost of plaintiff on or before 31.3.95
after obtaining all the necessary clearances and certificates. Though the
plaintiff was to be put in possession only on the registration of the sale deed
as per the agreement dated 3.8.94, as per clause 15 of the agreement, the
plaintiff was in fact put in possession and it had undertaken not to demolish
the existing palace over the suit property for a period of two years from
3.8.94 or till the receipt of any statutory notice for demolition, whichever is
earlier. Therefore, there was already part performance of the agreement as
evident from the conduct of parties, from the terms of agreement dated
3.8.94 and from the subsequent correspondences.
(e) In terms of the agreement, defendants 1 to 9 made an application
seeking no objection from the income tax authorities under Chapter XX-C
of the Income Tax Act on 4.8.94 and proceeded to obtain urban land ceiling
certificate in September, 1994. The income tax authorities granted no
objection certificate under Chapter XX-C of the Income Tax Act for the sale
of the property in favour of the plaintiff on 21.11.94. However, income tax
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
clearance certificates in respect of the defendants 1 to 9 under Section
230-A were yet to be obtained and in order to facilitate the same, a letter
dated 2.12.94 was sent by the plaintiff enclosing draft copies of the sale
deeds to apply for income tax clearance certificate under Section 230-A of
the Income Tax Act. Even in the said letter, the plaintiff pointed out that it
would be paying the balance sale consideration to the defendants 1 to 9
before the end of January, 1995 well ahead of the time stipulated under the
agreement. Plaintiff also sent a letter dated 19.1.95 to the ninth defendant
admitting their commitment to pay the entire consideration before the end of
January 1995, in case defendants 1 to 9 obtained income tax clearance
certificate by 10.1.95. However, since there was no intimation from the
defendants regarding income tax clearance certificate, the plaintiff sent a
letter dated 28.3.95 pointing some problem regarding the transfer and rights
in the common passage connecting the suit property and L.B.Road.
(f) The plaintiff further highlighted that on survey, the total extent of
property was found to be only to an extent of 18 grounds, 2053 sq.ft., and
not 20 grounds. The plaintiff wanted to know from the defendants whether
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
all the defendants have obtained income tax clearance certificate under
Section 230-A of the Income Tax Act and whether the furniture and fittings
have been removed from the suit property and whether the defendants were
in a position to comply with the requirements of clause 8 of the agreement
dated 3.8.94 to complete the sale transaction by 31.3.95. However, the
defendants agreed to be present in Trivandrum on 4.4.95 for execution of
sale deeds and that in the meanwhile, actual area found on measurement
would be exchanged for arriving at the balance of sale consideration.
However, the meeting fixed on 4.4.95 could not go through in view of the
inconvenience expressed by most of the defendants. Defendants 1 to 9 were
duly informed by a communication dated 29.6.95 that the sale transaction
could be completed in all respects before the end of June, 1995 emphasising
the plaintiff's readiness and willingness to pay the entire balance of sale
consideration, so that the sale transaction as per the agreement could be
completed at least before 15.7.95.
(g) However, defendants 1 to 9 did not respond to the registered letter
dated 29.6.95. But a letter dated 13.8.95 was sent by the counsel for the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
second defendant in response to the communication dated 7.8.95, wherein
plaintiff had informed that it had secured banker's payment order dated
2.8.95 for the remaining sale consideration of Rs.23,22,006/- in favour of
the second defendant. In all the communications addressed to the
defendants, the plaintiff had expressed its readiness and willingness to
complete the transaction and requested the defendants to execute the sale
deed within 15 days of the receipt of notice sent through its counsel dated
21.8.95. A reply notice was sent by the defendants 1,2,4,5,7 & 9 on 7.9.95
refusing to execute the sale deed. Since defendants refused to comply with
the demand made by the plaintiff and thereby committed breach of the
agreement dated 3.8.94, the plaintiff caused a public notice dated 7.9.95 in
The Hindu newspaper dated 13.9.95, cautioning everyone who may be
dealing with the property, about the existence of its rights under the suit
agreement. After receipt of the legal notice, defendants 5 & 6 realizing their
obligations under the agreement, after producing the necessary income tax
clearance certificate under Section 230-A of the Income Tax Act, proceeded
to execute the sale deed in favour of plaintiff in respect of their shares. Fifth
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
defendant executed two registered sale deeds on 6.11.95 in favour of
plaintiff after receiving consideration and accepted correct measurement of
the property as put forth by the plaintiff. Similarly, sixth defendant also
executed two registered sale deeds dated 24.11.95 conveying his undivided
interest in favour of the plaintiff accepting measurement. However, the sale
deeds executed by defendants 5 & 6 were pending for registration for
complying with certain mandatory formalities. Execution of sale deed
would prove that the plaintiff is not anyway responsible for the delay in
obtaining the income tax clearance certificate required under Section 230-A
of the Income Tax Act. Since the plaintiff did not want to precipitate the
matter and was hopeful of an amicable settlement with the defendants, they
once again issued notice through their counsel on 22.12.95. In order to show
that the plaintiff was always ready and willing to perform its part of the
contract, the plaintiff made sufficient arrangements for payment of the
balance sale consideration. However, defendants 1 to 4 and 7 to 9 avoided
the contract, even though the plaintiff was always ready and willing to part
performance of the contract in accordance with the agreement dated 3.8.94.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
The plaintiff gave long rope to the defendants. Being left with no other
option, the plaintiff was constrained to institute the suit, as the defendants
refused to come forward to execute the sale deed.
4. The suit was resisted by all the defendants, except defendants 5 &
6. Written statements were filed by the fourth and ninth defendants. In the
written statement filed by fourth defendant, it is contended that the plaintiff
has not come forward with clean hands and hence the plaintiff is not entitled
to the equitable relief of specific performance or the consequential relief.
The suit agreement dated 3.8.94 is admitted by all defendants. It is the
specific case of the defendants that they have obtained urban land ceiling
clearance and the necessary certificates under Section 269-UL(i) as well
under Section 230-A of the Income Tax Act. Stating that the plaintiff failed
to pay a sum of Rs.50 lakhs to the defendants in September, 1994 after the
production of urban land clearance as well as the certificate under Section
269-UL(i) of the Income Tax Act, it is contended by the defendants that the
defendants failed to honour their commitment, as per the agreement dated
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
3.8.94. It was also pointed out in the written statement that the plaintiff
proceeded to create correspondences to show that they are ready and willing
even though they failed to fulfill or perform their part of the contract.
Pointing out that there was some delay in getting the draft sale deed for
submission to the Income Tax Department for getting no objection
certificate under Section 230-A of the Income Tax Act, the specific case of
defendants is that they have obtained necessary income tax clearance on
22.2.95 and on 16.3.95 and that the same was informed to the plaintiff.
Referring to the clearance obtained under Chapter XX-C of the Income Tax
Act and the clearances from urban land ceiling authorities, the defendants
expressed their disappointment referring to the letter dated 28.3.95 received
from the plaintiff complaining about the reduction in extent. The alleged
averment in the plaint that the plaintiff was put in possession as part
performance of the agreement is specifically denied in the written statement
filed by fourth defendant. It is also contended that the plaintiff was never
ready and willing to perform their part of the contract even though they
have been pretending that they are ready with the money and willing to
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
perform their part of the contract. With regard to the contention of plaintiff
that the plaintiff had obtained banker's pay order to pay the balance of sale
consideration, the defendants pointed out that the plaintiff was not ready to
pay the balance as agreed under the agreement and that the amount covered
by the pay orders do not represent the balance amount payable to the actual
extent agreed to be sold. It is also the stand of defendants that the plaintiff
had failed to perform its part of the contract and that therefore, plaintiff
committed a breach. The defendants therefore justified their reply to put an
end to the contract. Though the ninth defendant in his written statement
referred to certain facts and contended that the suit is not maintainable for
want of valid contract and other formal defence, the ninth defendant also
raised all the contentions found in the written statement filed by the fourth
defendant.
5. During the pendency of suit, the plaintiff obtained an order of
injunction restraining the defendants 1 to 4 and 7 to 9 from alienating the
suit property. The learned single Judge framed the following issues and
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
additional issues:-
Issues:-
(i) Whether the plaintiff was ready and willing to perform
his part of the contract?
(ii)Whether the plaintiff has committed breach of the terms
of agreement dated 03.08.1994, as alleged by the
defendants?
(iii)Whether the plaintiff is entitled to the relief of specific
performance sought for?
(iv)To what relief the parties are entitled to?
Additional Issues:-
(i) Whether the plaintiff is entitled to the relief of
specific performance based on the alleged agreement for sale
dated 03.08.1994 as against the 4th defendant?
(ii) Whether the alleged agreement for sale dated
03.08.1994 was valid and executable at the time of filing the
present suit?
(iii) Whether the time is essence of the contract viz., the
alleged agreement for sale dated 03.08.1994?
(iv) Whether the claim of the plaintiff for specific
performance based on the alleged agreement for sale dated
03.08.1994 is barred by limitation?
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
(v) Whether the plaintiff is entitled for a relief of
consequential relief of possession?
Before the learned single Judge, the Director of plaintiff company was
examined as P.W.1 and Exs.P1 to P25 were marked. The eighth defendant
was examined as D.W.1 and documents Exs.D1 to D5 were produced in
support of the defendants' case.
6. The learned single Judge found that the agreement of sale dated
3.8.94 is valid and executable at the time of filing the suit and that the suit is
not barred by limitation. On the question whether time is the essence of the
contract, namely, the agreement of sale dated 3.8.94, the learned single
Judge observed that time fixed to execute the sale deed on or before 31.3.95
was not treated as the essence of contract, as the plaintiff was required to
perform its part of the contract after the clearance from the urban land
ceiling authorities and NOC from the income tax authorities, both under
Chapter XX-C and Section 230-A of the Income Tax Act. On the admitted
fact that the plaintiff did not pay the further sum of Rs.50 lakhs as agreed to
by the plaintiff under the agreement and that the plaintiff has not come
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
forward to pay the balance of sale consideration, despite the defendants
having obtained income tax clearance and NOC as required under Chapter
XX-C and Section 230-A of the Income Tax Act, the learned single Judge
has held that the plaintiff was never ready and willing to perform its part of
the contract in terms of the memorandum of understanding under Ex.P3.
Referring to the conduct of the plaintiff, as seen from the communications
and the case pleaded by the plaintiff in the plaint, the learned single Judge
came to the conclusion that the plaintiff is not entitled to the equitable relief
of specific performance. Though the learned single Judge found that the
plaintiff had paid a substantial amount towards advance, holding that the
Court cannot grant a decree for refund of advance amount without prayer,
held that the suit as such is liable to be dismissed. Aggrieved by the same,
the plaintiff has preferred the above appeal.
7. During the pendency of appeal, the appellant took out M.P.No.2 of
2015 for amendment of plaint, seeking alternative relief for refund of a sum
of Rs.1,00,00,000/- (rupees one crore only) paid by the appellant to the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
respondents as advance under the agreement for sale dated 3.8.94 along
with interest at a rate to be fixed by this Court. After hearing the respective
counsels appearing for the parties, by order dated 19.06.2023, this Court
ordered the interlocutory application and took the additional prayer on
record. The appellant has then, filed C.M.P.Nos.8323 & 8324 of 2023
seeking permission to raise additional grounds and to file certain additional
documents. These interlocutory applications are also taken up along with
the appeal.
8. We have heard the submissions of Mr.Om Prakash, learned Senior
Counsel appearing for the appellant, Mr.T.V.Ramanujam, learned Senior
Counsel appearing for the respondent Nos.1 to 3, 7 & 11, Mr.Ajmal Khan,
learned Senior Counsel appearing for the respondent No.10 and the
respective learned counsels appearing for the respondent Nos.6 & 9 and also
perused the materials available on record.
9. Having heard the learned Senior Counsels and the learned counsels
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
appearing for the respective parties, this Court finds it appropriate to frame
the following issues for consideration in this appeal:-
(i) Whether time is the essence of the contract having regard to the terms
of the agreement dated 3.8.94?
(ii)Whether the plaintiff was ready and willing to perform its part of the
contract in terms of the suit agreement?
(iii)Whether the plaintiff has committed breach of contract as contended
by the defendants and therefore, the defendants are entitled to rescind
the contract or put an end to the contract?
(iv)Whether the plaintiff is entitled to the equitable relief of specific
performance, particularly having regard to the conduct of plaintiff all
along and the change of events and circumstances after the filing of
suit?
(v) Whether the appellant can be permitted to file additional documents
and raise additional grounds by allowing the interlocutory
applications as mentioned above?
10. It may be mentioned herein that immediately after the dismissal of
the suit by the learned single Judge and before filing the appeal, it appears
that the defendants 1 to 9 have sold the property in favour of the tenth
respondent. Therefore, the tenth respondent was impleaded as party
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
respondent by order dated 4.3.2021. Further, the eighth respondent also died
during the pendency of appeal and respondent Nos.11 and 12 were brought
on record as legal heirs of the deceased eighth respondent, by order dated
19.6.2023.
11. Issue No.(i): To a specific issue framed as to whether time is the
essence of the contract, the learned single Judge, referring to the
communications and few judgments of the Hon'ble Supreme Court,
observed that 31.3.95 was not the crucial date to comply with the execution
of sale deed and the learned single Judge specifically held that the time
fixed to execute the sale deed on or before 31.3.95 was not treated as the
essence of the contract. Though this finding of the trial Court was relied
upon by the learned Senior Counsel appearing for the appellant, the learned
Senior Counsels appearing for the contesting respondents submitted that the
findings of the learned single Judge are contrary to admitted facts as time
was always considered by the parties as the essence of the contract not only
from the terms of the agreement, but also from the series of communications
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
between the parties and the conduct of parties. Pointing out that the
defendants have rescinded the contract only on the ground that the plaintiff
had not performed its part of the contract in terms of the agreement within
the time frame, they submitted that it is open to the respondents to challenge
the findings of the learned single Judge on this issue.
12. The execution of the contract and the terms thereon are not in
issue. It is admitted that the defendants 1 to 9 had entered into a sale
agreement earlier on 10.03.1993 with a third party and later entered into the
suit agreement for fresh term. It is to be noted that the previous sale
agreement dated 10.3.93 came to an end, as the execution of sale could not
be completed before the last date of validity of the NOC. It is further
admitted that a sum of Rs.50 lakhs was paid as advance and a further sum of
Rs.50 lakhs was adjusted by settling the dues of previous agreement holder.
Therefore, a sum of Rs.100 lakhs was acknowledged by the defendants 1 to
9 towards sale consideration and it is the common case of both sides that the
plaintiff has to pay a sum of Rs.2.25 crores towards balance of sale
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
consideration.
13. As per clause 4 of the sale agreement, the plaintiff had agreed to
pay a further sum of Rs.50 lakhs on the production of urban land ceiling
clearance or NOC from the appropriate authority and Income Tax
Department or on the production of NOC under Chapter XX-C of the
Income Tax Act, whichever is earlier. It is also agreed by the parties to the
agreement that the balance sale consideration should be paid within four
months from the date of production of NOC under Chapter XX-C of the
Income Tax Act and the Income Tax clearance certificate under Section
230-A of the Income Tax Act. Further the parties in any event agreed to get
the sale deed executed personally by the defendants 1 to 9 and the plaintiff
should arrange to register the same at their cost on or before 31.3.95 after
obtaining all the necessary clearances and certificates. In case the
defendants fail to execute the sale deed within time, the plaintiff is entitled
to recover the advance amount together with interest at 24% per annum
from the respective dates of payment till the recovery of amount. Similarly,
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
the defendants 1 to 9 had liberty to retain 10% of the advance as liquidated
damages when the plaintiff fails to pay the balance of sale consideration
within the time stipulated. If the defendants fail to execute the sale deed in
favour of plaintiff, it is open to the plaintiff to enforce the agreement by
seeking remedy under the Specific Relief Act on depositing the balance
amount of sale consideration or claim interest at 24% per annum for the sale
consideration already paid from the date of expiry of period fixed for the
purpose of the agreement. It is also relevant to point out an important clause
to the effect that in case of failure to obtain urban land ceiling clearance
certificate, the same cannot be construed as failure on the part of defendants
1 to 9 and that the defendants 1 to 9 shall be discharged from all obligations
under the agreement on returning the advance received by them earlier with
interest at 6% per annum.
14. It is pertinent to mention that the plaintiff had agreed to do all and
whatever necessary at its risk and cost to obtain clearance under the urban
land ceiling. The defendants 1 to 9 also have further undertaken to sign all
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
applications necessary for the purpose of getting urban land ceiling
clearance. Under the terms of agreement, it is seen that the urban land
ceiling is not mandatory, as the plaintiff had undertaken the burden to
obtain urban land ceiling clearance at their cost. Clause 4 of the agreement
is specific that the plaintiff should pay a further advance of Rs.50 lakhs on
the production of urban land clearance or NOC from appropriate authority
of Income Tax Department or on production of NOC under Chapter XX-C
of the Income Tax Act, whichever is earlier. Similarly, parties fixed the
outer time limit and 31.3.95 is specified as the last date for completion of
sale deed, of course, after obtaining all the necessary clearances and
certificates.
15. The learned single Judge, taking note of the fact that the
defendants did not terminate the contract when plaintiff failed to complete
the sale deed before 31.3.95, has observed that the crucial date 31.3.95 was
not treated as the essence of the contract. However, the obligation of
plaintiff to pay Rs.50,00,000/- after obtaining NOC is relevant. The
defendants only expressed their inability to come to Registrar's office on
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
31.3.95, but agreed to execute the sale deed on 4.4.95.
16. Question whether time is the essence of the contract cannot
always be decided merely because the defendants did not terminate the
contract upon failure to complete the transaction within the stipulated time
by the plaintiff. Rather the question whether time is the essence of the
contract should be decided on the basis of (a) intention of the parties at the
time of agreement and (b) terms of the agreement and the conduct of parties.
In the present case, we have no difficulty in holding that the intention of
parties is evident from the terms of the contract. The time specified in the
agreement by express language cannot be interpreted to mean quite the
opposite to the terms of agreement in its natural meaning. Having said that
the contract should be performed on or before 31.3.95, the Court has to
analyze the facts with reference to the understanding of parties as borne out
from the agreement. Parties never agreed to insist urban land clearance for
the due performance of agreement by plaintiff to pay the balance.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
17. In the present case, the plaintiff has agreed to pay a sum of Rs.50
lakhs on getting urban land clearance or income tax clearance under Chapter
XX-C of the Income Tax Act or the no objection certificate under Section
230-A of the Income Tax Act. The plaintiff has also not expressed any
grievance about the urban land clearance, as they have admitted in their
plaint about the urban land clearance. It is admitted during the course of
evidence that the income tax authorities granted the certificate under
Section 269-UL(i) on 21.11.94. As per the agreement, the plaintiff was
required to pay a further sum of Rs.50 lakhs at least in November, 1994. It
is also established by the defendants 1 to 9 that they had obtained the
necessary income tax clearance on 22.2.95 and no objection certificate in
terms of Section 230-A of the Income Tax Act on 22.2.95 and on 16.3.95
and it is not in issue that the NOC obtained was also informed to the
plaintiff. Therefore, there is no question of construing the contract to enable
the plaintiff to plead that time is not the essence of the contract and the
parties were unable to perform some of the terms as contemplated under the
agreement before the time stipulated in the agreement. When the defendants
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
have obtained urban land clearance and clearance from the income tax
authorities under Chapter XX-C and NOC in terms of Section 230-A of the
Income Tax Act, this Court is unable to find a ground for the plaintiff to
contend that time was never the essence of the contract. In every
communication from the plaintiff, the stipulation regarding time is
acknowledged. Hence it is not open to the plaintiff to contend otherwise by
referring to the fact that the defendants 1 to 9 did not repudiate the contract
immediately on the expiry of time specified in the agreement. Whenever a
contract is entered into in relation to sale of immovable properties, the
inability to perform the contract due to some technical or on unforeseen
circumstances not due to the default or negligence of anyone of the parties
to the contract, may with mutual consent of either side can be condoned on
equitable grounds. This can be explained on the basis of principles of equity
and good conscience. Defendants 1 to 9 were required to assemble on a
particular day before 31.3.95 on a false promise that the plaintiff was ready
and willing to complete the sale deed. The defendants therefore expressed
their consent to execute the sale deed on 4.4.95 instead of 31.3.95.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
Similarly, the conduct of parties in the present case would clearly indicate
that the parties never had an intention to give a go-by to the time stipulated
at any point of time and that the whole contract was designed in such a way
that time was the essence of the contract.
18. In this regard, a Constitution Bench of the Hon'ble Supreme Court
in the case of Chand Rani (dead) by Lrs v. Kamal Rani (dead) by Lrs
reported in (1993) 1 SCC 519, after referring to several judgments, has held
that there is no presumption as to time being the essence of the contract.
Even if time is not the essence of the contract, the Court may infer that the
contract should be performed within a reasonable time. It is specifically
observed by the Hon'ble Supreme Court that the question whether time is
the essence of contract has to be decided from the express terms of the
contract, from the nature of the property and from the surrounding
circumstances. Stressing on the expression to make time as the essence of
the contract in unequivocal terms, the Hon'ble Supreme Court in the said
judgment has examined the terms of the agreement which was the subject
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
matter of lis before it and one such term reads as follows:-
“1. That in pursuance of the said agreement, the 1st party has
received a sum of Rs.30,000 (Rupees thirty thousand only)
from the second party as earnest money the receipt whereof
the 1st party hereby separately acknowledges. Rs.98,000
(Rupees ninety eight thousand only) will be paid by the
second party to the 1st party within a period of ten days only
and the balance of Rs.50,000 (Rupees fifty thousand only) at
the time of registration of the sale deed before the Sub-
Registrar, New Delhi.”
The question argued before the Hon'ble Supreme Court was whether the
time stipulation applies to the amount or the time limit of 10 days from
August 26, 1971. The Hon'ble Supreme Court confirming the view taken by
the Division Bench of the High Court that the word “only” is to qualify the
amount as well as the period of 10 days, held that the intention of parties to
make time as the essence of the contract is established. Since the plaintiff in
the case before the Supreme Court has not proved his readiness and
willingness to pay the said sum of Rs.98,000 within the stipulated time, the
Hon'ble Supreme Court held that the plaintiff is not entitled to the relief
only on the ground of readiness and willingness. Therefore, the judgment of
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
the Hon'ble Supreme Court in Chand Rani's case is applicable in this case to
hold that the time is essence of the suit agreement.
19. This Court also, in several similar cases, after referring to various
judgments of the Hon'ble Supreme Court, has held in unambiguous terms
that stipulation with regard to time cannot be ignored. In the case of
K.S.Vidyanadam v. Vairavan reported in (1997) 3 SCC 1, the Hon'ble
Supreme Court has held that the Court should look into all the relevant
circumstances including the time limit specified in the agreement and
determine whether its discretion to grant specific performance should be
exercised. Referring to the ground realities that prices of lands are going up
sharply after 1973, the Hon'ble Supreme Court observed that the Court
cannot be oblivious to the realities and the rigor of the rule evolved by
Courts that time is not of the essence of the contract in the case of
immovable properties, evolved in times when prices and values were stable
and inflation was unknown, need not be followed and that the principle
evolved earlier in judicial precedents requires to be modified/relaxed,
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
particularly in the case of urban immovable properties. It is to be noted that
the judgment of the Constitution Bench in Chand Rani's case was also
relied upon by the Court in K.S.Vidyanadam's case and pointed out that the
plaintiff must perform his part of the contract within a reasonable time even
where time is not of the essence of the contract.
20. The Hon’ble Supreme Court in the case of Saradamani
Kandappan v. S.Rajalakshmi and others, (2011) 12 SCC 18, after referring
to several of its earlier judgments including K.S.Vidyanadam, (1997) 3 SCC
1, has held as follows:-
“43. Till the issue is considered in an appropriate
case, we can only reiterate what has been suggested
in K.S.Vidyanadam:
(i) The 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) The courts will apply greater scrutiny and
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
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. The 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 that 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 the 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.”
From the terms of the agreement and the communications between parties,
this Court finds that time is the essence of the suit agreement.
21. Issue Nos.(ii) & (iii): The learned Senior Counsel appearing for
the appellant submitted that the non-payment of Rs.50 lakhs as per the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
agreement cannot be a reason to repudiate the contract, as the defendants
have impliedly agreed for completion of sale deed even after March, 1995
as seen from Exs.P7 to P10. The learned Senior Counsel further submitted
that the parties were in consensus for completing the sale deed till the end of
August, 1995 as evident from Ex.B4 letter dated 1.7.95 filed by the
defendants themselves. Since the parties have arranged for a meeting on
17.6.95 and 18.6.95, the learned Senior Counsel pointed out that the time
stipulated originally for execution of sale was mutually extended and that
there was no failure on the part of plaintiff to perform its obligations in
terms of the contract. Referring to the fact that two of the defendants,
namely, defendants 5 & 6, have executed the sale deed in compliance with
the terms of the suit agreement, the learned Senior Counsel submitted that
the findings of the learned single Judge that the plaintiff was not ready and
willing to perform its part of the contract is erroneous. The learned Senior
Counsel referred to the copies of the demand draft produced by the plaintiff
to prove the bona fide attempt to make the payment to each one of the
defendants 1 to 9. The learned Senior Counsel then submitted that the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
overall analysis of all the communications chronologically would only show
that the readiness and willingness of the plaintiff in the present case have
been established.
22. Mr.T.V.Ramanujam and Mr.Ajmal Khan, learned Senior Counsels
appearing for some of the vendors and the tenth respondent respectively,
referred to the pleadings and the documents in chronological order to
substantiate their contention that the plaintiff was never ready and willing to
perform its part of the contract in terms of the suit agreement marked under
Ex.P3 dated 3.8.94. They highlighted that the plaintiff has produced Ex.P4
and Ex.P6 to show that the defendants have obtained urban land clearance
and income tax clearance under Chapter XX-C of the Income Tax Act. It is
pointed out from the plaint averments that the plaintiff admits clearance of
urban land ceiling and no objection as required under Chapter XX-C of the
Income Tax Act. Referring to the document in Exs.P13 & P14 and Ex.D5
series, the learned Senior Counsel Mr.T.V.Ramanujam pointed out that the
defendants have performed their obligation under the agreement. Referring
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
to the evidence of P.W.1 during cross examination and other documents, the
learned Senior Counsel contended that the plaintiff was never ready and
willing to perform its part of the contract by paying a sum of Rs.50 lakhs
immediately on production of the urban land clearance and the income tax
clearance. Since the plaintiff failed to come forward to pay the entire
balance on or before 31.3.95, the learned Senior Counsel submitted that the
plaintiff was never ready and willing, but committed breach of agreement to
the disappointment of defendants 1 to 9.
23. Having regard to the submissions of the learned Senior Counsels
appearing for the respective parties, it is necessary to refer to the following
sequence of events as borne out from the records. After the agreement dated
3.8.94, the defendants appear to have gone for getting urban land clearance
certificate from the authorities under the Urban Land Ceiling Act, 1978. It is
to be noted that the urban land clearance is not required for the plaintiff to
perform its part of the contract either for the payment of Rs.50 lakhs or for
the remaining amount. It is seen that ULC clearance was obtained in 1983.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
It is once again clarified in September 1994 that the suit properties are
within the ceiling limits of present owners as seen from Ex.P4. It is admitted
that the plaintiff has produced Ex.P6, the no objection certificate issued by
income tax authorities under Chapter XX-C of the Income Tax Act. This
document is dated 21.11.94. It is to be seen that the plaintiff has sent a letter
only on 2.12.94 with the draft sale deed so as to enable the defendants 1 to 9
to get income tax clearance certificate in terms of Section 230-A of the
Income Tax Act. The draft sale deed is essential for getting clearance
certificate. Even here, the plaintiff has not explained, the delay of nearly
four months in sending the draft sale deed. However, the plaintiff very
promptly reminding the ninth defendant of the requirement of getting
income tax clearance certificate even by a letter dated 19.1.95. It is stated by
defendants that they have obtained no objection certificate under Section
230-A of the Income Tax Act in favour of all of them. Even though the
certificates through Ex.D5 series dated 22.2.95 and 16.3.95 were not in
favour of 5th defendant and 9th defendant, it is admitted in the plaint, in the
notice and proof affidavit that defendants 5 & 9 have obtained NOC in their
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
favour. In other words, the plaintiff's complaint is that income tax clearance
certificate under Section 230-A produced by defendants was only in respect
of defendants 3,4,5,7 & 9. Since the plaintiff admitted the certificate in
favour of defendants 5 & 9 and Ex.D5 series is in respect of other
defendants, this Court finds that the defendants have obtained the clearance
certificate or NOC under Section 230-A of the Income Tax Act in favour of
the defendants 1 to 9 long before the final date agreed or specified in the
agreement for performance. Hence, defendants have fulfilled their
obligation under the suit agreement by getting ULC clearance, NOC and
clearance from Income Tax Department for executing the sale deed.
24. It is seen from the evidence of D.W.1 that the plaintiff was duly
informed about the clearance obtained from the Urban Land Ceiling
authorities, income tax authorities, both under Chapter XX-C and under
Section 230-A of the Income Tax Act. By a letter dated 19.1.95, the plaintiff
without reference to their obligation to pay Rs.50 lakhs as agreed under the
agreement, remind the 9th defendant about plaintiff's previous letter dated
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
19.1.95, in which the plaintiff expressed their intention to pay entire balance
before end of January and informed that they would make final payment
within three weeks of receipt of income tax clearance certificates. The
plaintiff has produced Ex.P9 a letter dated 28.3.95 addressed to the
defendants. This letter gives a clear indication that the plaintiff is now in
search of some excuses to perform their part of the contract by paying a sum
of Rs.50 lakhs before September, 1994 and the remaining balance amount
on or before 31.3.95. It is stated in this letter that one of the defendants
informed the plaintiff as if there was some problem regarding transfer of
rights in the common road connecting the suit property and L.B.Road in
favour of plaintiff. It is also stated in this letter that on survey, there
appears to be some shortage of extent and the defendants have now
arranged for a surveyor. It is further indicated that the plaintiff was not
informed about the clearance and NOC required from defendants in terms of
provisions of the Income Tax Act. Further the plaintiff called upon the
defendants 1 to 9 to inform the plaintiff about the defendants' readiness to
fulfill their obligations for delivery of vacant possession of an extent of 20
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
grounds with an uninterrupted right of way in the common path to the
plaintiff. It is the specific case of defendants that they obtained IT clearance
on 22.2.95 and 16.3.95 and that the same was duly informed to the plaintiff.
Therefore, they also informed the plaintiff that the defendants are ready to
execute sale deed on 4.4.95. However, it is admitted that the plaintiff did not
respond to the letter dated 28.3.95 (Ex.D2) addressed to plaintiff's advocate
in this regard. Even in their letter under Ex.P10 dated 29.6.95, the plaintiff
maintained that on survey, extent of property is only 18 grounds and odd
and not 20 grounds as per the agreement. Further the plaintiff wanted the
defendants to inform the plaintiff whether all the furniture and fittings have
been removed from the building to facilitate delivery of vacant possession
of the property and that all the defendants are in a position to comply with
the requirement of clause 8 of the sale agreement. Plaintiff referred to their
advocates visit to Trivandrum and make a reference that the plaintiff’s
advocate had confirmed the plaintiff’s desire to pay the balance of sale
consideration and to complete the transaction in all respects before the end
of June, 1995.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
25. We have seen that even before receipt of the letter under Ex.P9
dated 28.3.95, the defendants sent a notice through their advocate. The
counsel indicated that it is possible to bring all the defendants for execution
of sale deed only on 4.4.95, as the plaintiff did not want execution of sale
deed through power of attorney. In this letter, on behalf of defendants, it
was informed to the plaintiff that by exchange of communications
simultaneously, the parties can finalize the measurement. In this letter, the
defendants have expressed in unequivocal terms that the date 4.4.95 is the
convenient date for them for execution of sale deed. To this letter, there is
no response and the impression anyone can get is that the plaintiff has
committed breach of contract not only by non payment of Rs.50 lakhs even
in September 1994 but also by paying balance well before 31.3.95.
26. Again the plaintiff issued a letter under Ex.P10 dated 29.6.95 to
the defendants 1 to 9 reiterating what they have said in their letter under
Ex.P9 dated 28.3.95. The two letters, namely, Ex.P10 dated 29.6.95 and
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
again the letter under Ex.D4 dated 1.7.95 clearly indicate that the plaintiff
had no intention of paying either the sum of Rs.50 lakhs which he had
agreed to pay in September, 1994 or the entire balance payable before
31.3.95. The plaintiff's letter dated 7.8.95 under Ex.P11 is only the xerox
copies of banker’s pay order dated 2.8.95. Without an explanation for the
lapses and in utter disregard to the terms of the agreement specifying time,
the plaintiff has issued this letter with the xerox copies of demand drafts
drawn in favour of defendants in their individual name. To the notice issued
by the plaintiff to the defendants, the defendants sent a reply immediately on
13.8.95, which is marked as Ex.P12. This reply was by the advocate of the
defendants. In the reply, it is informed that the sale deed which was to be
executed on or before 31.3.95, did not get through and that the contract is
determined as per the option given to the defendants. It was also pointed out
that the amount as per the banker’s payment order is not in conformity with
the terms of agreement. It was only after this letter dated 13.8.95, plaintiff
issued a legal notice dated 21.8.95 without even referring to the reply sent
to the plaintiff on behalf of one of the defendants. By this letter/notice, the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
defendants were called upon to execute the sale deed in respect of the suit
property in terms of the agreement dated 3.8.94 within a period of 15 days
from the receipt of notice under Ex.P13. It was thereafter the defendants
through their advocate sent a reply notice dated 17.9.95 marked as Ex.P14.
In the notice, the plaintiff stated as if the plaintiff was never at fault and that
the delay was purely on account of failure to give NOC in favour of some of
the defendants. In the reply notice, the defendants relied upon the terms of
the agreement and how the plaintiff failed to perform his part of the contract
specifically referring to the clearance certificates issued to the defendants on
various days and handed over to the plaintiff. In fact, it was specifically
mentioned that the doubt as to area entertained by the plaintiff regarding
extent is without bona fides and that there was no mention as to the
deficiency in area at any point of time earlier. It is stated in the reply that the
plaintiff was never ready and willing to perform its part of the contract and
that the parties have mutually agreed to drop the agreement. It was made
clear to the plaintiff that the plaintiff has no right to demand for specific
performance or possession or damages, as the plaintiff had miserably failed
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
to perform its obligations under the suit agreement. Simultaneously, the
plaintiff issued a public notice about the subsisting agreement dated 3.8.94
between the plaintiff and the defendants. Thereafter, it is admitted that the
fifth defendant executed two sale deeds dated 6.11.95 and the sixth
defendant executed two sale deeds dated 24.11.95 in favour of plaintiff.
However, it is also admitted that the sale deeds are yet to be registered and
the petition filed by the plaintiff for compulsory registration of the
document is opposed seriously by the defendants 5 & 6. Even though the
defendants repudiated the contract followed by specific reply legal notice
under Ex.P14 dated 17.9.95, on the ground that the agreement has come to
an end by efflux of time, the suit came to be filed by the plaintiff only on
3.5.97.
27. This Court has already held that time is the essence of the
contract. Question now is whether the plaintiff was ready and willing to
perform its part of the contract or whether the plaintiff has committed
breach of the terms of agreement dated 3.8.94 as alleged by the defendants.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
On the question of readiness and willingness of the plaintiff, the
submissions of the learned Senior Counsels appearing for the respondents
are acceptable. As evident from the agreement, as per clause 4 of the
agreement, the plaintiff agreed to pay a further advance of Rs.50 lakhs on
production of either urban land ceiling clearance certificate or no objection
certificate under Chapter XX-C of the Income Tax Act or the clearance
under Section 230-A of the Income Tax Act. Admittedly, the urban land
ceiling clearance certificate was obtained in September 1994 and the no
objection certificate was obtained on 21.11.94 under Chapter XX-C of the
Income Tax Act by the defendants. It is now demonstrated before this
Court that the income tax clearance as required under Section 230-A is
obtained in the name of defendants 1 to 9. From the evidence it is seen that
the plaintiff was duly informed about the income tax clearance both under
Chapter XX-C and Section 230-A of the Income Tax Act as evident from
the communications. Even though the income tax clearance as seen from
Ex.D5 series is not there for defendants 5 & 9, in the pleading, in the proof
affidavit and in the evidence, the plaintiff has admitted the income tax
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
clearance under Section 230-A of the Act issued to the defendants 5 & 9.
When the defendants had promptly applied and obtained income tax
clearance within a reasonable time from the date when draft sale deed was
furnished by the plaintiff, this Court finds no reasonable cause for the non
performance by the plaintiff. Absolutely there is no reason stated anywhere
in the pleading or evidence for non-payment of a sum of Rs.50 lakhs which
was agreed to be paid even in September, 1994 or at least in November,
1994, when no objection certificate was obtained under Chapter XX-C of
the Income Tax Act as per the documents Exs.P4 & P6 filed by the plaintiff.
During the cross examination of D.W.1, P.W.1 has admitted that he has not
filed any proof to show the availability of funds as on the date of agreement
or in September, 1994. When a specific issue is raised by the defendants
that the plaintiff was not ready and willing, burden lies on the plaintiff to
prove its case. The contention of plaintiff that there is shortage of extent and
that there is some problem in getting NOC from income tax department in
relation to all the defendants cannot be accepted as an excuse for non
payment of a sum of Rs.50 lakhs which is an essential term of the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
agreement. The balance amount of Rs.2.25 crores was not paid before
31.3.95 as agreed. This Court finds no evidence to prove plaintiff's
readiness and willingness to perform the contract as agreed. The plaintiff
has no material or evidence to justify their doubt to complain about the
reduction of extent or about the inability of defendants to transfer the right
of way. This Court from the conduct of plaintiff finds that the plaintiff was
never ready and willing to perform its part of the contract in terms of the
agreement.
28. Let us examine whether the contention of the plaintiff about
reduction of extent can be considered as a valid excuse. This Court finds
that the suit agreement is in continuation of the previous agreement, where
the parties have referred to the same extent and sale consideration. The
parties have no dispute at the time of entering into the agreement about the
extent. What was the reason for this disagreement by the plaintiff regarding
extent is not known. It was not the case of the plaintiff that the plaintiff
made an arrangement for measurement of land on its own and found that
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
there was reduction in extent. However, in the course of correspondence,
the plaintiff complained about the reduction of extent. The defendants have
no quarrel to reduce the balance of sale consideration corresponding to any
reduction. The defendants have also informed the plaintiff that
measurement can be done in due course. However, the plaintiff who is in
Chennai did not invite the defendants or their representatives for fixing
actual extent. In the absence of any reason for the plaintiff to suspect or
doubt the actual extent available on ground, this Court finds that the
complaint regarding reduction of extent is purposely made to delay
execution. Even without making further payment of Rs.50 lakhs, the
plaintiff wanted the defendants to vacate the suit property.
29. Secondly, the plaintiff had obtained sale deeds from two of the
defendants in respect of their share in total extent. From the description of
the property, it is seen that each one of the defendants had sold their share in
an extent of 20 grounds and thereabouts with the building measuring about
2374 sq.mts. Even though the measurement given in the sale agreement is
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
20 grounds approximately, the sale deed executed in favour of all the
defendants refers to the extent precisely. The defendants have also executed
the sale deed after the disposal of the suit in favour of the tenth defendant
showing the entire extent as 20 grounds. The suit itself is laid for the entire
extent of 20 grounds of land together with building in terms of the
agreement. Therefore, this Court finds no merit in the contention that the
plaintiff could not complete the sale deed due to reduction in extent.
30. Under the sale agreement, the defendants have agreed to convey
an extent of 20 grounds together with the right of way and right of amenities
and facilities through a common way having 33 feet width. However, in
some of the correspondence, the plaintiff’s advocate has referred to the
information from one of the defendants about the problem relating to the
conveyance in respect of common passage or the right of way. The learned
Senior Counsel relied upon the fact that the entire title in respect of the
pathway is also conveyed along with the land which is abutting the road. It
is not in dispute that the plaintiff is the absolute owner of not only the suit
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
property, but also the property which is adjacent to the suit property
abutting the road. Since the defendants have not executed any sale deed in
favour of third parties before the suit agreement, the defendants who had
absolute right over the property, had absolute right to convey easementary
right of way. Hence, this Court finds that the stand taken by the plaintiff’s
counsel in some of the letters shows the real conduct of the plaintiff who
has specifically instructed their counsel to invent reasons only to delay
further payments. A person who is ready and willing to purchase the
property should be fair, honest and perform his obligation under the
agreement so that the other party to the agreement will have no reason to
rescind the contract. The intention of the plaintiff in the present case to
delay payment is expressed in all the communications and the learned
Senior Counsel appearing for the appellant has no explanation for the
conduct of the plaintiff in complaining reduction of extent or regarding the
right of way which was agreed to be conveyed under the agreement. The
defendants 1 to 9 had no reason to believe that the plaintiff would perform
its part and hence the defendants have rightly put an end to the contract.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
31. The learned Senior Counsel appearing for the appellant relied
upon the following judgments of the Hon’ble Supreme Court. In P.D'Souza
v. Shondrilo Naidu, reported in (2004) 6 SCC 649, the Hon’ble Supreme
Court dealt with a case where the defendants had consciously revived the
contract at a later stage. Hence it was held that it is too late in the day for the
defendant to contend that the contract should be performed within time as
per the agreement, after waiving his right. In other words, the defendants
who had brought about a situation waiving their right to seek performance
within the time stipulated, cannot turn around and contend that time was of
the essence of the contract and that the plaintiff was not ready and willing to
perform their part of the contract within the time specified. In that case the
defendant who had agreed to discharge the mortgage before May 1981,
failed to discharge its mortgage, but demanded further amount and sought
extension of time. Hence it was held that the defendant cannot insist the
time stipulation after receiving substantial amounts even after the expiry of
time stipulated in the agreement. The Hon’ble Supreme Court relied upon
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
its judgment in the case of Nirmala Anand v. Advent Corporation (P) Ltd.,
reported in (2002) 5 SCC 481, wherein the Hon’ble Supreme Court has
observed that the defendants cannot take advantage of their own wrong and
then plead that the decree for specific performance would give an unfair
advantage to the plaintiff.
32. The judgment of the Hon’ble Supreme Court in Boramma v.
Krishna Gowda and others, reported in (2000) 9 SCC 214 relied upon by
the learned Senior Counsel appearing for the appellant is by interpreting
Explanation to clause (c) of Section 16 of the Specific Relief Act which
makes it clear that where a contract involves the payment of money, it is not
essential for the plaintiff to actually tender to the defendants or to deposit in
Court, except when so directed by the Court. This judgment has no
application to the facts of the present case, where the plaintiff was never
ready and willing to perform its part of the contract in terms of the
agreement. When the plaintiff establishes its readiness and willingness, may
rely upon this judgment to show that it is not necessary for them to jingle
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
coins, unless the Court directs the plaintiff to deposit the money in Court.
Again the learned Senior Counsel appearing for the appellant relied upon
the judgment of the Supreme Court in the case of Laxman Tatyaba Kankate
and another v. Taramati Harishchandra Dhatrak, reported in (2010) 7 SCC
717, wherein the Hon’ble Supreme Court has held as follows:-
“25. It was contended on behalf of the appellants
that there has been considerable increase in the
price of the land in question. Though that may be
true, it cannot be a ground for denying the decree of
specific performance to the respondent. The learned
first appellate court, by a well-reasoned judgment,
has granted the relief of specific performance
instead of only granting refund of money, as given
by the trial court. The judgment of the first
appellate court has been upheld by the High Court
and we see no reason whatsoever to interfere with
the concurrent findings of facts and law as stated in
the judgment under appeal. However, the learned
counsel appearing for the respondent volunteered
and after taking instructions stated that they would
be willing to pay a sum of Rs.1,50,000/- instead of
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
Rs.40,000/- as the total sale consideration. We find
this offer of the respondent to be very fair.
26. We have already held that the defence
taken up by the appellants in the suit was totally
unbelievable. There is no reason or ground as to
why the relief of specific performance should be
declined to the respondent. She satisfied all the
requirements of Section 20 of the Act. Even then, if
we examine this case purely from the point of view
of equity, the offer now made by the respondent
substantially balances the equities between the
parties and the very argument raised on behalf of
the appellants that there has been increase in the
price of the land in question loses its significance.
Now, no prejudice will be caused to the appellants
in any manner whatsoever.”
The above judgment has no application to the facts when the plaintiff has
not proved their readiness and willingness. The learned Senior Counsel in
the course of hearing mentioned that the plaintiff is willing to pay around
three times more than the balance to compensate the defendants for the
delay. This plea cannot be accepted when the property had already been sold
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
in favour of tenth respondent after dismissal of suit.
33. The learned Senior Counsel then relied upon the judgment in
B.Santoshamma and another v. D.Sarala and another, reported in (2020)
19 SCC 18 and contended that the plaintiff is entitled to enforce part of the
agreement, as they have already obtained sale deed from two of the
defendants on their accepting substantial amount as consideration. The
learned Senior Counsel also relied upon the judgment of the Hon'ble
Supreme Court in the case of Prakash Chandra v. Angadlal and others,
reported in (1979) 4 SCC 393 for the proposition that ordinarily specific
performance should be granted and that it can be denied only when
equitable considerations of the case point to its refusal and the
circumstances show that damages would constitute an adequate relief. We
do not find any support from the said judgments to the arguments of the
learned Senior Counsel for the appellant.
34. The learned Senior Counsel relied upon a judgment of the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
Division Bench in the case of Rajamani and others v. L.P.Alagappa
Chettiar, reported in 2017 SCC Online Mad 8006 for the proposition that
mere escalation of price is not a ground for rejecting relief of specific
performance for the plaintiff in a case for specific performance based on his
readiness and willingness to perform its part of the contract from the
inception of sale agreement. We have no quarrel with the said proposition.
But the said judgment has no application to the facts of this case. Similarly,
he relied upon the judgment of Hon'ble Supreme Court in Silvey and others
v. Arun Varghese and another, reported in (2008) 11 SCC 45, where the
plaintiff's suit for specific performance was dismissed despite the trial Court
having found that the defendants had not yet obtained the certificates of
registration from the Rubber Board as envisaged by the agreement for sale
and that they had not even obtained possession certificates. The principle or
the point raised and answered in the said judgment cannot be applied in the
present case.
35. The learned Senior Counsel appearing for the appellant relied
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
upon the judgment of the Hon'ble Supreme Court in the case of
R.Lakshmikantham v. Devaraji, reported in (2019) 8 SCC 62, wherein the
Hon'ble Supreme Court has relied upon its earlier judgment in Mademsetty
Sathyanarayana v. G.Yelloji Rao, reported in AIR 1965 SC 1405 to hold that
the suit filed within the period of limitation cannot be dismissed on any
equitable principle. In other words, the Hon'ble Supreme Court held that
the delay may not be a ground to dismiss the suit when it is filed within the
period of limitation. The Hon'ble Supreme Court in several other judgments
had considered the delay and laches on the part of plaintiff as a reason not to
exercise discretion in favour of the plaintiff who has approached the Court
with unexplained delay and has put the defendants in a precarious and
disadvantageous position. At least the Court's power under Section 20 of the
Specific Relief Act cannot be curtailed when the Court decides several
issues on the principle of equity.
36. Another judgment of the Hon'ble Supreme Court in the case of
Ferrodous Estates (Pvt.) Ltd. v. P.Gopirathnam (dead) and others, reported
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
in 2020 SCC Online SC 825 was relied upon for the same proposition that a
suit for specific performance filed within limitation cannot be dismissed on
the sole ground of delay and laches. It is to be noted that in the said
judgment, quoting earlier judgments, while exercising discretion, it is held
that the Court should decide, regard being had to the facts of each case.
Section 20 confers a discretion to Court while granting specific performance
or refusing specific performance depending upon the facts. As held
repeatedly by Hon'ble Supreme Court in several other judgments which we
have referred to in several of our decisions, the plaintiff who is expected to
prove his readiness right from the agreement till execution of sale, if fails to
prove his case, this Court cannot grant relief on the basis of any of the
judgments relied upon by the learned Senior Counsel appearing for the
appellant.
37. We have already discussed the facts of the case elaborately.
Though the Specific Relief Act, 1963 has seen a drastic change by the
Specific Relief (Amendment) Act, (18 of 2018), whereby Sections 10, 14,
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
16 and 20 have been amended, the amendment is held to be prospective by a
three-Judge Bench of the Hon'ble Supreme Court in the case of Smt.Katta
Sujatha Reddy v. Siddamsetty Infra Projects Pvt.Ltd. and others etc.
reported in AIR 2022 SC 5435. In tune with the said judgment of the
Supreme Court, this Court finds that the 2018 amendment to the Specific
Relief Act cannot be applied to the transactions in the present case which
took place prior to coming into force of the amendment. Therefore, the
judgments on the existing provisions of Specific Relief Act prior to the
amendment alone are relevant.
38. The Hon'ble Supreme Court in Saradamani Kandappan v.
S.Rajalakshmi and others, (2011) 12 SCC 18 has applied the provisions of
the Contract Act, 1872, particularly, Sections 51 to 55, in terms of Section 9
of the Specific Relief Act. It is to be noted that the issue whether the
plaintiff in a suit for specific performance is ready and willing to perform
the terms of the contract or not, can be assessed without much guess work,
if the Court examines the rights, obligations, privileges of parties to the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
contract in terms of the provisions of the Contract Act, particularly, Sections
46 and 51 to 55 of the Contract Act. Section 52 of the Contract Act relates
to the order of performance of reciprocal promises. In the present case, the
plaintiff who had agreed to pay a sum of Rs.50 lakhs immediately after the
urban land clearance or income tax clearance in terms of the provisions of
the Income Tax Act has not paid the amount and therefore has failed to
perform in the order in which the plaintiff was supposed to. Section 55 of
the Contract Act renders the contract voidable at the option of the party who
has prevented the other from performing his promise. The Supreme Court
in Saradamani Kandappan's case, in similar circumstances, has held as
follows:-
“70. We are therefore of the view that the failure of
the appellant to pay the balance of Rs.75,000 on
6-4-1981 and failure to pay the last instalment of
Rs.75,000 on or before 30-5-1981 clearly amounted
to breach and as time for such payment was the
essence of the contract, the respondents were
justified in determining the agreement of sale
which they did by the notice dated 2-8-1981 (Ext.P-
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
5). Therefore rejection of the prayer for specific
performance is upheld.”
39. This Court finds that the view expressed by the Hon'ble Supreme
Court in Saradamani Kandappan's case can be applied in the present case,
where the plaintiff has failed to establish their readiness and willingness and
did not come forward to pay a sum of Rs.50 lakhs as agreed under the
agreement and the entire balance on or before 31.3.95. The Hon'ble
Supreme Court in the case of Man Kaur v. Hartar Singh Sangha, reported in
(2010) 10 SCC 512, has held as follows:-
“40. This contention has no merit. There are two
distinct issues. The first issue is the breach by the
defendant vendor which gives a cause of action to
the plaintiff to file a suit for specific performance.
The second issue relates to the personal bar to
enforcement of a specific performance by persons
enumerated in Section 16 of the Act. A person
who fails to aver and prove that he has performed
or has always been ready and willing to perform
the essential terms of the contract which are to be
performed by him (other than the terms the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
performance of which has been prevented or
waived by the defendant) is barred from claiming
specific performance. Therefore, even assuming
that the defendant had committed breach, if the
plaintiff fails to aver in the plaint or prove that he
was always ready and willing to perform the
essential terms of contract which are required to be
performed by him (other than the terms the
performance of which has been prevented or
waived by the plaintiff), there is a bar to specific
performance in his favour. Therefore, the
assumption of the respondent that readiness and
willingness on the part of plaintiff is something
which need not be proved, if the plaintiff is able to
establish that the defendant refused to execute the
sale deed and thereby committed breach, is not
correct. Let us give an example. Take a case where
there is a contract for sale for a consideration of
Rs.10 lakhs and earnest money of Rs.1 lakh was
paid and the vendor wrongly refuses to execute the
sale deed unless the purchaser is ready to pay
Rs.15 lakhs. In such a case there is a clear breach
by defendant. But in that case, if the plaintiff did
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
not have the balance Rs.9 lakhs (and the money
required for stamp duty and registration) or the
capacity to arrange and pay such money, when the
contract had to be performed, the plaintiff will not
be entitled to specific performance, even if he
proves breach by the defendant, as he was not
“ready and willing” to perform his obligations.”
40. This Court has already seen that P.W.1 has admitted that he has
not produced any document to show that the plaintiff was ready with the
money to perform its part in terms of the agreement. When readiness and
willingness is an issue, the burden lies on plaintiff to prove readiness and
willingness which are required in terms of Section 16(c) of the Specific
Relief Act. From the conduct of plaintiff, this Court is convinced that the
plaintiff has not proved its readiness and willingness to pay a sum of Rs.50
lakhs immediately after urban land ceiling and income tax clearances and
the remaining balance on or before 31.3.95 as agreed under suit agreement.
Therefore, the plaintiff has committed breach of suit agreement for no good
reasons and the defendants 1 to 9 are therefore entitled to put an end to the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
contract. Therefore, issue Nos.(ii) and (iii) are decided against the plaintiff.
41. Issue No.(iv): In the present case, this Court has already referred
to the relevant dates. The defendants, consequent to the legal notice issued
by the plaintiff dated 21.8.95, have issued a reply notice through their
advocate with specific reference to the failure on the part of the plaintiff to
come forward to pay the balance of sale consideration in terms of clause 4
of the agreement and the final payment as specified in the agreement. By
this notice, the defendants have informed that the plaintiff had no right to
demand for specific performance, as the plaintiff has failed miserably.
Earlier, in the reply, they also refer to the option of dropping the agreement.
In such circumstances, the termination of agreement was also referred to in
the previous reply issued by one of the defendants. The plaintiff, though
issued a paper publication dated 7.9.95, came with the suit for specific
performance only in May, 1997. Absolutely there is no explanation for not
filing the suit after the repudiation of agreement. As pointed out by the
Hon'ble Supreme Court in several judgments, particularly, in the judgments
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
in K.S.Vidyanadam's case and in Saradamani Kandappan's case (supra),
though an attempt was made by the plaintiff to explain the delay by saying
that the plaintiff wanted to settle the issues amicably between the plaintiff
and the defendants, absolutely there is no material on record about the bona
fide attempt made by the plaintiff. The delay of nearly two years to file the
suit after the repudiation of contract by the defendants in unequivocal terms,
only proves the case of defendants. The property is situated in a prime
locality at Adyar. In fact, the plaintiff even at the time of filing the suit has
come with different figures and the learned Senior Counsel appearing for
the appellant has now come with a proposal by quoting a price which is few
times more than the price agreed. However, the learned Senior Counsels
appearing for the respondents pointed out that the market price has gone
very high and the offer even now is unfair. Therefore, the unreasonable
delay in approaching the Court is one of the circumstances for this Court not
to exercise its discretion in favour of the appellant/plaintiff. The learned
single Judge has held that the plaintiff is not entitled to the discretionary
relief giving several reasons.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
42. The learned Senior Counsel Mr.T.V.Ramanujam relied upon a
few judgments of this Court where conduct of the plaintiff has been
considered to refuse the discretionary relief of specific performance. A
learned single Judge of this Court in the case of Ramasamy Gounder v.
K.M.Venkatachalam and others, reported in 1976 (1) MLJ 243, has held that
the false case put forth by the plaintiff would disentitle him from obtaining
the discretionary relief of specific performance. The learned single Judge
referred to the few earlier decisions of this Court, wherein it is reiterated
that the plaintiff who is setting up a false case cannot expect a Court of
equity to grant him relief. In the said judgment, an unreported judgment of
this Court in A.S.Nos.367 and 696 of 1970 dated 11.04.1975 (Kuppuswami
Naidu v. Mannarswami Naidu), the judgment in Easwari Amma and
another v. M.K.Korah and others, AIR 1972 Mad 339 and the judgment of
this Court in the case of Sririgineedi Subbarayadu v. Kopsnathi Tatayya
and others, 1973 M.W.N. 1158 were relied upon for the proposition that a
person who comes forward with a false case is not entitled to discretionary
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
relief of specific performance.
43. In the present case, the learned Senior Counsel referred to the
plaint where the plaintiff has come forward with a false case that possession
was handed over pursuant to the agreement by relying upon one of the
clauses in the agreement quite contrary to the specific clause in the
agreement that the plaintiff is entitled to possession only after the
registration of the sale deed. Referring to the proof affidavit and the
evidence let in on behalf of the plaintiff, the learned Senior Counsel
submitted that the plaintiff who came to Court with a false case will not be
entitled to the equitable relief. The learned Senior Counsel relied upon a
judgment of the Division Bench of this Court in the case of Nallaya
Gounder and another v. P.Ramaswami Gounder (died) and 3 others
reported in 1993-2-L.W. 86 for the same proposition.
44. The Hon'ble Supreme Court in the case of Lourdu Mari David
and others v. Louis Chinnaya Arogiaswamy and others reported in (1996) 5
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
SCC 589, has also reiterated the principle that a person who comes to Court
with a false plea is not entitled to the equitable relief of specific
performance. A Division Bench of this Court in the case of Arunachala
Mudaliar v. Jayalakshmi Ammal and another, 2003 (1) CTC 355 (Mad),
where a plea of plaintiff regarding possession was found to be false, held
that the plaintiff is not entitled to the relief of specific performance. In the
said judgment, the previous judgment of the Division Bench of this Court in
the case of Nallaya Gounder and another v. P.Ramaswami Gounder etc.
(supra) was relied upon. A learned single Judge of this Court in the case of
G.Anbazhagan and another v. G.Manoharan (deceased) and others,
reported in 2013 (6) CTC 624 has followed the principle that the plaintiff
who has come with a false plea that possession was given to him under the
agreement of sale, is not entitled to the specific relief.
45. It is true that the plaintiff in paragraph-13 of the plaint has
pleaded that the plaintiff was in fact put in possession and it had undertaken
not to demolish the existing building in the suit property for a period of two
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
years from 3.8.94. Though this Court finds such a false plea is made, is not
inclined to record a finding that the plaintiff is not entitled to equitable relief
solely on the ground that there is a false plea in the plaint about the plaintiff
being put in possession. However, this could certainly be one of the reasons
for which the plaintiff can be non-suited when there are several other
circumstances indicated in this judgment. As pointed out earlier, the delay
in filing the suit is also an important factor to be considered. The plaintiff
was never honest and fair to fulfill its obligations. Complaining reduction of
extent and entertaining doubt regarding transfer of right to have access
through the common passage is a deliberate attempt of plaintiff to gain time.
This shows that plaintiff has projected a false case just for the purpose of
this case. Therefore, issue no.(iv) is also decided against the plaintiff.
46. Issue No.(v): The appellant, just before the commencement of
arguments, filed two applications. C.M.P.No.8323 of 2023 is filed by the
appellant to raise additional grounds with specific reference to the
subsequent events. C.M.P.No.8324 of 2023 is filed for reception of
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
additional documents. In the affidavit filed in support of C.M.P.No.8324 of
2023, the appellant has prayed for permission to file the following
documents:-
“i. Agreement of sale between the Respondents 1,2,3,7
and Raj Ganesh, for the sale of their undivided share in
Plot No.2
ii. Power of Attorney given by the Respondents
1,2,3,6,7 and 8 to Raam Prabhu Raaj, son of 10th
Respondent to sell, register and collect the money from
the buyer
iii. Sale deed dated 09.10.2012 registered as Document
No.2249 of 2012
iv. Memorandum of Understanding dated 04.11.2012
between the Appellant company and 6th Respondent
v. Memorandum of Understanding dated 04.11.2012
between the 6th Respondent and Kakumanu Charitable
Trust
vi. Cancellation of Power of Attorney dated 19.11.2012
registered as Document No.457 of 2012 by the 6th
Respondent in favour of B.R.Raam Prabhu Raaj
vii. Copy of sale deed dated 10.07.2013 executed by
Aswathi Thirunal Rama Varma in favour of the
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
Appellant Company but not registered by the Sub
Registrar of Adyar
viii. FIR No.297 of 2014 lodged against Royal Family
Members
ix. Letter from Aswathi Thirunal Rama Varma to
Mr.Sarath Kakumanu dated 28.05.2013
x. Unregistered Sale Deed to be executed by Aswathi
Thirunal Rama Varma in favour of Pan Resorts Ltd
dated 10.07.2013
xi. Payment receipt from the Registration Department
for Rs.10,100/- dated 11.07.2013
xii. Letter from P.Kannadasan to the Sub Registrar
Assurances, Adyar dated 16.08.2013
xiii. Letter from R.Manikandan, SRO Adyar to
Mr.P.Kannadasan dated 06.09.2013
xiv. Letter from P.Kannadasan to the IG, Registration
dated 25.10.2013
xv. Stay obtained by Raj Ganesh in C.S.No.501 of 2013,
O.A.No.549 of 2013
xvi. Affidavit of Aswathi Thirunal Rama Varma in
C.S.No.869 of 2013
xvii. Letter from Aswathi Thirunal Rama Varma to IG
Registration dated 04.01.2014
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
xviii. Letter from Pooratathi Thirunal Marthanda Varma
to Mr.Sarath Kakumanu dated 20.10.2014
xix. Letter from Adithya Varma to Mr.Sarath Kakumanu
dated 01.11.2014
xx. Payments made to Aswathi Thirunal Rama Varma,
Pramodh Kumar and Gulam Mohideen
xxi. Letter from Aswathi Thirunal Rama Varma to
Advocate Mr.R.Sibi Chakravarthy regarding withdrawal
of C.S.No.869 of 2013.”
A common affidavit is filed by the appellant indicating that the
additional grounds raised by the appellant are necessary having regard to the
subsequent events and the events that had happened after the institution of
the suit. The documents which are sought to be filed as additional
documents are not required to be considered in the present case for deciding
the issues framed by this Court. The tenth respondent is not claiming any
right under Section 19(b) of the Specific Relief Act, as he purchased the
property with the knowledge of this litigation. All the documents relied
upon by the appellant are after the suit agreement or after the filing of suit
and that this Court, having found that the documents are not relevant for
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
deciding the enforceability of suit agreement, cannot accept those
documents to enlarge the scope of litigation. The learned Senior Counsel
appearing for the appellant has not made any submissions to convince this
Court that the application is filed satisfying the requirement of Order XLI,
Rule 27 of the Code of Civil Procedure. Therefore, this Court finds no merit
in the petition for reception of additional documents. For the same reasons,
this Court is unable to find any merit in the petition to raise additional
grounds also. Therefore, issue no.(v) is also decided against the plaintiff.
47. The learned Senior Counsel appearing for the defendants
submitted that the sale in favour of the plaintiff by the defendants 5 & 6 was
not registered and that therefore property is not conveyed. In other words, it
is stated that the transfer in favour of the plaintiff by the defendants 5 & 6
has not taken place. The learned counsels appearing for the respondents
have expressed their willingness to refund the amount. This Court finds
that the plaintiff may have an independent cause of action to pursue the
remedy, in case the plaintiff is not successful in getting the documents
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
compulsorily registered.
48. In a suit for specific performance, the Court is expected to frame
issues regarding the enforceability of contract and the entitlement of the
plaintiff to get the discretionary and equitable relief of specific performance.
In the present case, all the issues have been answered against the
appellant/plaintiff. However, this Court finds no valid reasons to deny the
alternative relief to the plaintiff. By order dated 19.06.2023, this Court
ordered the interlocutory application in M.P.No.2 of 2015 to amend the
plaint to introduce the alternative prayer refund for of a sum of
Rs.1,00,00,000/- (Rupees one crore only) paid by the appellant to the
respondents as advance under the suit agreement dated 3.8.94 along with
interest. Though as per the agreement dated 3.8.94, the plaintiff is entitled to
refund with interest at the rate of 6% per annum, considering the fact that a
huge amount of Rs.1,00,00,000/- had been paid as advance and the property
value has gone manifold, this Court is inclined to grant interest at the rate of
12% per annum.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
49. In view of the conclusions we have reached above on all the
issues, while confirming the judgment and decree of the trial Court in
C.S.No.632 of 1997 dismissing the suit for specific performance, the
alternative prayer for refund of advance is allowed by directing the
defendants 1 to 9 to refund a sum of rupees One Crore with interest at 12%
per annum from the date of agreement till the date of payment. The
appellant is entitled to enforce a charge over the suit property in terms of
Section 55(b) of the Transfer of Property Act.
50. The original side appeal is thus partly allowed as indicated above.
Consequently, C.M.P.Nos.8323 & 8324 of 2023 are also dismissed. No
costs.
Index : yes/no (S.S.S.R.,J.) (C.K.,J.)
Neutral citation : yes/no 02.08.2023
ss
To
The Sub Assistant Registrar (O.S.)
High Court, Madras.
____________
https://www.mhc.tn.gov.in/judis
O.S.A.No.277 of 2013
S.S.SUNDAR, J.
AND
C.KUMARAPPAN,J.
ss
Judgment in
O.S.A.No.277 of 2013
02.08.2023
____________
https://www.mhc.tn.gov.in/judis
