Madras High Court
Muniraj vs Gangammal on 28 October, 2024
S.A.NO.211 OF 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
JUDGMENT RESERVED ON : 19 / 10 / 2024
JUDGMENT PRONOUNCED ON : 28 / 10 / 2024
CORAM:
THE HON'BLE MR.JUSTICE R.SAKTHIVEL
S.A.NO.211 OF 2019
AND CMP NO.3475 OF 2019
Muniraj ... Appellant /
Respondent /
Plaintiff
Versus
1.Gangammal
2.D.Anbazhagan ... Respondents 1&2 /
Appellants 1&2 /
Defendants 1&2
PRAYER: Second Appeal filed under Section 100 of Code of Civil
Procedure, 1908 praying to set aside the Judgment and Decree dated
March 10, 2010 passed in A.S.No.35 of 2008 on the file of the Principal
Sub Court, Krishnagiri reversing the Judgment and Decree dated October
29, 2007 passed in O.S.No.386 of 2005 on the file of the District Munsif
Court, Krishnagiri.
For Appellant : Mr.P.Mani
For Respondents : Mr.M.Venkatesh
for M/s.R.Jayaprakash
JUDGMENT
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
This Second Appeal is filed by the unsuccessful plaintiff
before the First Appellate Court challenging the Judgment and Decree
dated March 10, 2010 passed in A.S.No.35 of 2008 by the 'learned
Principal Subordinate Judge, Krishnagiri' [henceforth 'First Appellate
Court' for brevity and convenience] reversing the Judgment and Decree
dated October 29, 2007 passed in O.S.No.386 of 2005 by the 'learned
District Munsif, Krishnagiri' [henceforth 'Trial Court' for brevity and
convenience].
2. For the sake of convenience, hereinafter, the parties will be
referred to as per their array in the Original Suit.
Plaintiff's case
3. The plaintiff and the defendants entered into a Sale
Agreement on April 26, 2001, whereby the defendants agreed to sell the
property to the plaintiff for a sum of Rs.60,000/-. A sum of Rs.50,000/-
was paid as advance on the date of agreement itself and the balance
amount of Rs.10,000/- was to be paid on or before April 25, 2003. The
plaintiff sent a notice on March 19, 2003, calling upon the defendants to
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
receive the balance sale consideration and execute the Sale Deed. On
receipt of the said notice on March 27, 2003, the Defendant Nos.(1) and
(2) sent reply notices on March 29, 2003 and April 3, 2003 respectively. In
the reply notices, the defendants had denied the execution of the Sale
Agreement and averred that the Sale Agreement was executed for loan
transaction as security. Hence, the plaintiff filed a Suit for specific
performance and for alternative relief of refund of advance amount with
interest at the rate of 12% per annum.
Defendants' case
4. The case of the defendants is that they obtained loan of
Rs.45,500/- from the plaintiff for their urgent family expenses and
executed a sham and nominal Sale Agreement as insisted by the plaintiff.
The plaintiff is running a finance business at Palacode. The Suit property is
a Mango Grove and has a market value of Rs.4,00,000/-. The defendants
never intended to sell the Suit Property to the plaintiff. The defendants
were ready to repay the amount to the plaintiff with legal interest. The
plaintiff never ever requested the defendants to execute the Sale Deed in
his favour. The plaintiff was not ready and willing to get the Sale Deed
executed since the Sale Agreement was executed for security purpose only.
Accordingly, the defendants prayed to dismiss the Suit.
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
Trial Court
5. At trial, the plaintiff was examined as P.W.1 and Ex-A.1 to
Ex-A.6 were marked on the side of the plaintiff. The first defendant was
examined as D.W.1 and no document was marked on the side of the
defendants.
6. The Trial Court, after considering the documents and
evidence, decreed the Suit as prayed for by the plaintiff.
First Appellate Court
7. Feeling aggrieved with the Judgment and Decree passed by
the Trial Court, the defendants preferred an appeal in A.S.No.35 of 2008
before the First Appellate Court. The First Appellate Court, after hearing
both sides came to the conclusion that the plaintiff was not ready and
willing to perform his part of contract. Accordingly, the First Appellate
Court allowed the appeal and set aside the Judgment and Decree passed by
the Trial Court and consequently, dismissed the Suit for specific
performance and decreed the Suit for the alternative relief of refund of
advance money of Rs.50,000/- with interest at the rate of 12% per annum
from the date of agreement i.e., April 26, 2001 till the date of realization.
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
Substantial Question of Law
8. Feeling aggrieved with the Judgment and Decree, the
plaintiff preferred this Second Appeal under Section 100 of the Code of
Civil Procedure, 1908. This Second Appeal was admitted on August 13,
2024 on the following substantial question of law:
“Whether in law the deposit of the balance sale
consideration is essential for proving the plaintiff's readiness
and willingness as required under Section 16(c) of the
Specific Relief Act?”
Arguments
9. The learned counsel for the appellant / plaintiff would argue
that the Trial Court rightly appreciated the evidence and documents and
decreed the Suit and granted the main relief of specific performance of
contract. The First Appellate Court concurred with the Trial Court's
finding that Ex-A.1 – Sale Agreement is true and valid. But the First
Appellate Court without fully appreciating the facts and circumstances of
the case, came to the conclusion that the plaintiff was not ready and willing
to perform his part of contract, as he had not deposited the balance sale
consideration of Rs.10,000/- into the Court as per the agreement, when the
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
defendants had not taken a defense that the plaintiff has no sufficient
wherewithal to deposit the balance sale consideration before the Trial
Court. He further would submit that in a Suit for specific performance,
readiness and willingness to perform the contract alone is sufficient. The
plaintiff need not deposit the money unless the Court specifically directed
to deposit the same. In this case, the Trial Court has not directed the
plaintiff to deposit the balance sale consideration at the time of filing the
Suit or before the date of judgment. In these circumstances, the First
Appellate Court's finding is erroneous and liable to be set aside.
Accordingly, he prayed to allow the Second Appeal.
10. Per contra, learned counsel for the respondents /
defendants would contend that the transaction held between the plaintiff
and the defendants was a money transaction. The defendants never
intended to sell their property, that too for a meagre amount. In fact, the
Suit property would fetch more than a sum of Rs.4,00,000/- as on the date
of Sale Agreement. If really the defendants intended to sell the Suit
property to the plaintiff, the plaintiff could have obtained a Sale Deed
within a short span of time. On the other hand, in the Sale Agreement, two
years period has been fixed for performance of the contract. That itself
would show that Ex-A.1 – Sale Agreement is not intended for the purpose
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
of executing a Sale Deed and on the other hand, Ex-A.1 – Sale Agreement
was executed for the purpose of security for the loan obtained by the
defendants. In these circumstances, the First Appellate Court rightly
appreciated the facts and circumstances of the case and allowed the appeal
and further, decreed the Suit for refund of advance amount in which there
is no illegality or irregularity. Accordingly, he prayed to dismiss the
Second Appeal.
Discussion
11. This Court has considered the submissions made on either
side and perused the materials available on record.
12. As per Ex-A.1 – Registered Sale Agreement dated April
26, 2001, on the date of agreement itself, a sum of Rs.50,000/- was paid by
the plaintiff to the defendants. The balance sale consideration is only
Rs.10,000/-. The plaintiff issued notice to the defendants on March 19,
2003. After exchange of notices, the plaintiff filed the Suit. In the reply
notices itself, the defendants contended that Ex-A.1–Registered Sale
Agreement was executed only for money transaction as a security. In these
circumstances, the plaintiff did not examine any independent witnesses; he
examined himself alone. Further, the First Appellate Court held as follows:
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
“Both parties specifically agreed that if the defendant
failed to execute the sale deed the plaintiff is bound to
produce the agreement into the court and deposited the
amount into court. Then only he is entitled for decree. That is
the specific agreement between the parties. But in this case
the plaintiff has not deposited the balance consideration till
the pronouncement of the judgment of the lower court. Hence
the lower court granted 2 months time to deposit of balance
consideration. Even in the appeal till the argument was over
the plaintiff has not deposited the balance sale consideration.
In the above said Ramalingam case it was specifically held
that the plaintiff is to become entitled decree for specific
performance the plaintiff must establish continuous readiness
and willingness at all stages from date of agreement till date
of hearing of suit. But still the plaintiff has not deposited the
balance consideration and show his readiness and
willingness...”
13. This Court specifically put a question to the appellant's
(plaintiff's) counsel whether the plaintiff deposited the balance sale
consideration into the Court as per the Trial Court's decree. The plaintiff's
counsel has not answered positively to the above question.
14. It is settled law that in a Suit for specific performance, the
plaintiff should be ready and willing to perform his part of contract not
only throughout the period of performance mentioned in the agreement but
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
also throughout the course of the Suit. In this case, even after passing of
the Trial Court's decree, the appellant did not deposit the balance sale
consideration amount into the Court. That itself shows the conduct of the
plaintiff.
15. Plaintiff is a practicing Advocate. Plaintiff (P.W.1) in his
cross examination has deposed as follows:
“ . . . vt;tst[ epyk; th';fpaJ vd;W
Qhgfkpy;iy. fpuak; th';fpajhf brhy;yg;gLtJ –
1 Vf;fh; 15 brd;l; vd;why; Qhgfkpy;iy.
rhl;rpfis gpujpthjpfs; Tl;ote;jhh;fs;.
mth;fis vdf;F bjhpahJ. ehd; 50 Mapuk;
bfhLj;njd;. mth;fs; ghh;j;jhh;fs;. . . ”
15.1. He has deposed that he does not remember the extent of
land purchased. If really the plaintiff had entered into Ex-A.1 – Sale
Agreement with an intention to buy the property described thereunder, the
plaintiff would have known the extent of the land intended to be
purchased. The plaintiff being a practicing Advocate, was not even aware
of the extent of the Suit property he intended to be purchased. Hence, from
the evidence of P.W.1, it can be inferred that Ex-A.1-Sale Agreement is
executed for the purpose of standing as a security to the loan transaction.
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
In their words, it is a sham and nominal document.
16. It is true that the plaintiff need not jingle the coin or
deposit the balance consideration before the Court unless the Court has
specifically directed the plaintiff to do so. But in this case, even after
passing of the Trial Court's judgment and decree, whereby the Trial Court
directed the plaintiff to deposit the balance sale consideration, the plaintiff
did not deposit the balance sale consideration. This strengthens the case of
the defendant that Ex-A.1–Sale Agreement was executed as a security for
money transaction. The conduct of the plaintiff invites adverse inference.
17. Considering the facts and circumstances of the case, this
Court is of the view that the First Appellate Court rightly applied the
discretionary power and refused the relief of specific performance and
ordered the return of advance money. In the above findings of the First
Appellate Court, this Court does not find any illegality or irregularity.
18. As stated supra, in law, deposit of balance sale
consideration is not mandatory for proving the plaintiff's readiness and
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
willingness as required under Section 16(c) of the Specific Relief Act,
1963. However, the plaintiff should prove his readiness and willingness to
perform his part of contract not only at the time of filing the Suit but
throughout the Suit proceedings. In this case, the Suit was decreed on
October 29, 2007. The defendants preferred the appeal in A.S.No.35 of
2008 before the First Appellate Court on July 1, 2008 with a delay of 23
days. As per the Trial Court's Judgment and Decree, the plaintiff ought to
have deposited the balance sale consideration within two months from the
date of judgment i.e., on or before December 29, 2007. The First
Appellate Court has categorically held that appellant till the date of First
Appeal argument, has not deposited the balance sale price as per the Trial
Court's decree. To be noted, as stated supra in paragraph (13) till date, the
plaintiff has not deposited the balance sale consideration. In view of the
conduct of the appellant (plaintiff), the defendants/respondents are entitled
to invoke Section 28 of the Specific Relief Act, 1963 and seek for
rescission of contract also.
19. In view of the foregoing discussion, there is no merit in
the Second Appeal and accordingly, the Second Appeal is dismissed. No
costs. Consequently, connected Civil Miscellaneous Petition is closed.
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
28 / 10 / 2024
Index : Yes
Internet : Yes
Neutral Citation : Yes
Speaking Order
TK
To
1.The Principal Sub Judge
Principal Sub Court
Krishnagiri.
2.The District Munsif
District Munsif Court
Krishnagiri.
https://www.mhc.tn.gov.in/judis
S.A.NO.211 OF 2019
R.SAKTHIVEL, J.
TK
PRE-DELIVERY JUDGMENT MADE IN
S.A.NO.211 OF 2019
28 / 10 / 2024
https://www.mhc.tn.gov.in/judis
