Madras High Court
Jeyam Constructions vs M.Velu on 6 October, 2025
Author: G.Jayachandran
Bench: G.Jayachandran
O.S.A.(CAD) No.34 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 06.10.2025
CORAM:
THE HONOURABLE DR. JUSTICE G.JAYACHANDRAN
and
THE HONOURABLE MR. JUSTICE MUMMINENI SUDHEER KUMAR
O.S.A.(CAD) No.34 of 2022
and
C.M.P.No.3648 of 2022
1.Jeyam Constructions
Rep by its Proprietrix,
Mrs.E.Jayanthi
No.36/99, Karneeswarar Koil Street,
Mylapore, Chennai 600 004.
2.E.Jayanthi
W/o. R.Ellangovan
No.36/99, Karneeswarar Koil Street,
Mylapore,
Chennai 600 004. .. Appellants
Vs.
1.M.Velu
2.V.Jayashree
3.J.Rifaya Parveen
4.S.Guganathan
5.M.A.Ahamed Uduman
6.Mohammed Gayasuddin
Rep by his Power Agent
A.Mohammed Adam .. Respondents
1/12
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O.S.A.(CAD) No.34 of 2022
PRAYER: Original Side Appeal is filed under Order XXXVI Rule (1) of
the Original Side Rule read with Clause 15 of the Letters Patent Appeal
read with Section 37 of Arbitration and Conciliation Act, 1996 and 13(1)
of Commercial Courts Act, praying to set aside the Judgment and Decree
dated 10.08.2021 made in O.P.No. 197 of 2021 on the file of the Original
Side of this Honble Court.
For Appellants : Mr.K.Gowthamkumar
For Respondents : Mr.S.R.Sundar
JUDGMENT
The 2nd appellant herein, being the sole proprietor of the property
developed into flats, had sold the same to the respondents. However,
there were deviations and violations of the approved building plan.
Hence, the dispute has been referred to the arbitration and an award was
passed by the sole Arbitrator on 21.12.2019.
2. Being aggrieved by the said award, the appellant filed
O.P.No.197 of 2021. Some of the purchasers have filed O.P.No.226 of
2021. The learned Single Judge of this Court, by a common order dated
10.08.2021, dismissed both Original Petitions.
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3. Aggrieved by the dismissal, the promoter of the property,
who is the petitioner in O.P.No.197 of 2021, has preferred an appeal
under Section 37 of the Arbitration and Conciliation Act, 1996, read with
Clause 15 of the Letters Patent. The said O.S.A(CAD) No.34 of 2024 is
pending adjudication before the Division Bench of this Court.
4. It is reported that the 5th respondent, Mr.M.A.Ahamed
Uduman, who is one of the purchasers of the Flat No.S3, on the second
floor of Jeyam Apartments, has sold the property and has no interest in
the litigation. The remaining respondents have entered into a Joint
Compromise Memo, wherein they have set out the terms of settlement
with the intent to give quietus to the litigation. All parties in
O.S.A(CAD) No.34 of 2022 are present in person, except M.A.Ahamed
Uduman, who has filed a memo stating that he has no interest in the
matter and may be given up.
5. As far as the 6th respondent is concerned, he is represented
through his power agent, who is present before this Court. The parties
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have signed the Memorandum of Settlement on 24.09.2025, duly attested
by their respective counsel. The terms of settlement are as follows:-
“1. The Appellants shall through their
sources identify purchasers to buy the Flat Nos.
F1, F2, F3 and S4 (belonging the respondents
1. Mr.M.VELU; 2.Mrs.V.JAYASHREE;
3.Mrs.J.RIFAYAPARVEEN;4.Mr.S.GUGANATH
AN, 6.?.?.?.?????MED GAYAZUDDIN Rep. By
its Power Agent Mr. Mohammed Adam) in the
building.
2. The consideration to be paid to the
respective owners of the above mentioned flats
shall be Rs.15,000/- (Rupees Fifteen Thousand
only) per square feet.
3. Even though the claim was in respect
of five flats, one of the original respondents has
since sold the flat and abandoned his claim and
the present MOS is in respect of the four
remaining flat owners alone. The appellants
have no claim against the said respondent who
has sold the property and the said respondent
has also given up claim concerning the
proceedings between the parties.
4. In the event the consideration offered
by such identified purchasers falls short of the
said rate, the Appellants shall pay the
differential amount to the respondents so that
the respondents receive not less than
Rs.15,000/- per square feet in respect of their
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flats within the agreed period of six months
from the date of MOS.
5. The Respondents undertake that the
flats will be discharged of any mortgage prior
to execution of the sale deeds. The Respondents
further warrant that the flats are free from any
encumbrance, claim, or third-party rights, save
for such mortgage which shall be cleared prior
to registration.
6. The appellants /buyers shall pay
sizeable advance which amount shall be
utilised to discharge the mortgage or in the
alternative the prospective buyers as identified
by the Appellants will take over the mortgage
prior to the sale and adjust the outstanding
dues from the Sale consideration. In the event
of any undisclosed encumbrance, the
Respondents alone shall be responsible for
clearing the same, and the Appellants shall not
bear any liability.
7. The Flats are sold on an "as is where
is" basis and all responsibility for construction,
approvals, title, or related claims shall rest
with the Appellants, who shall indemnify both
the Respondents and the purchasers in case of
any claims regarding the construction or
alleged deviation or other claims relating to
the building. The Appellants are willing to sign
the sale deeds as confirming parties, if so
desired by the purchasers.
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8. All claims arising out of the selling of
flats from the prospective buyers shall rest on
the appellants and the respondents are not
liable for any claim arising thereof on any
account since the building was developed and
sold by the Appellants. The Appellants also
agree to indemnify the respondents on account
of any claim from any quarters arising out of
sale of the property to the prospective
purchasers.
9. The entire process of sale, including
execution and registration of sale deeds, shall
be completed within six months from the date of
this MOS. It is expressly agreed that the sale
cannot be done simultaneously and the sale
would happen one after the other but all the
four sale deeds shall be executed within six
months.
10. If the appellants are unable to secure
purchasers within this period, the Appellants
themselves shall purchase the flats from the
respondents at the rate of Rs.15,000/- per
square feet.
11. In default of such purchase, the
Appellants shall pay the amounts to the
Respondents as prescribed in the Arbitral
award dated 21.12.2019 to such unsold flat
owners and abide by the terms of the award. In
lieu of the said undertaking the Appellants are
jointly depositing the post-dated cheques all
dated 23.03.2026, drawn on Bank of India,
Santhome Branch, as security in favour of the
Respondents namely (1.M.VELU or (for himself
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and his wife Mrs.V.JAYASHREE) (No.084509),
2. Mrs.J.RIFAYAPARVEEN (084510),
3.Mr.S.GUGANATHAN (084511) and 4.
Mr.M.A.MOHAMMED GAYAZUDDIN
(084512) each amounting to Rs.11 lakhs) in the
joint custody of both the Counsels of the
Appellants and the Respondents. In the event of
the sale could not be fructified and the
Appellants are not honour the payment within
the period of six months as agreed hereunder,
the Respondents are entitled to deposit the
cheques.
12. The Respondents agree to enter into
Agreement to sell with such identified
purchasers upon intimation from the
Appellants. On execution of each Agreement to
Sell, the Respondents shall be paid such
amount as is being paid by the purchaser
directly ie., amounts apart from the loan
amount. The prospective buyers are also
entitled to pay the mortgaged amount out of the
sale consideration and adjust the same. Each
Agreement to sell shall stipulate that the
purchaser shall obtain bank sanction, if
required, within three months thereafter, and
the sale deed shall be registered within three
months from the date of such sanction. In all
cases, the registration of sale deeds shall be
completed within the overall six months period
fixed herein.
13. In the event of any failure to enter
into a Sale Deed after the execution of
Agreement to Sell, the Respondents shall return
the money that they received at the time of
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Agreement to Sell forthwith. The time shall be
essence and spirit of this MOS.
14. The Respondents shall extend full
cooperation in the sale process, including
execution of documents, furnishing signatures,
providing vacant possession at the time of
registration, and not creating any obstruction,
delay or encumbrance.
15. The Respondents shall hand over
vacant and peaceful possession of the
respective flats F1, F2, F3 & S4 at the time of
registration.
16. In the event any purchaser identified
by the Appellants defaults in completing the
transaction, such default shall not be construed
as a failure on the part of the Appellants,
provided that the Appellants secure another
purchaser or exercise the buyout obligation
within the overall six-month period or the
appellants purchase the property from the
respondents as agreed.
17. The original title deeds of the flats as
handed over by the Appellant shall be handed
over to the learned counsel for the Appellants
and respondents jointly, for inspection by
prospective purchasers. The Respondents
confirm that certain parent title deeds are not
in their possession. Prospective purchasers,
together with their bankers or technical
representatives, may inspect the flats upon
prior notice. Except for the Appellants and
such purchasers, no other persons shall be
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permitted access. The Appellants are not
entitled to carry-out any building related
activity such as construction and giving
representation to the authorities concerning the
building till the tenure of this MOS. In the event
of the selling of Flats within the stipulated
period of Six months could not go through or if
there is a breach on the part of the Appellant
the Title Deeds of the flats will be handed over
to Respondents concerning the respective Flats.
18. The Respondents shall withdraw all
pending proceedings only upon full receipt of
consideration at Rs.15,000/- per square feet
and execution and the registration of the sale
of the flats. Specifically, the parties agree that
O.S.No.2207 of 2021 pending on the file of the
II Additional City Civil Court, Chennai,
between the same parties, shall also only be
withdrawn as part of this settlement, upon
completion of the transaction. Till such time,
the proceedings shall be kept pending but
adjourned for settlement, and upon completion
of sale, they shall be withdrawn. The
respondents shall also withdraw the Review
Petition No.141 of 2019 against W.P.No.27869
of 2016.
19. The Appellants shall ensure mutation
of revenue and tax records into the names of
the purchasers and provide proof thereof. The
Respondents confirm that property and water
taxes are paid up to date.
20. Both parties agree to desist from
making defamatory or scurrilous statements
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against each other and undertake not to initiate
any fresh cases, criminal complaints, or legal
notices except for enforcement of this MOS
during the tenure of the MOU. Any breach
shall entitle the aggrieved party to damages
and such other reliefs as are available in law.
21. Upon completion of the transactions
contemplated herein, the Respondents confirm
that they have no further claims of any nature
against the Appellants, including claims
relating to construction, damages,
compensation, or otherwise. This MOS shall
operate as a full and final settlement between
the parties.
22. Both parties agree that upon
completion of the transactions contemplated
herein, they release each other from all past,
present, and future claims, suits, proceedings,
or demands, save and except enforcement of
this MOS.
23. This MOS shall be filed before this
Hon'ble Court in O.S.A. (CAD) No.34 of 2022,
and the parties respectfully pray that the same
be recorded as a compromise decree.”
6. Since the parties have arrived at a settlement and want to
withdraw the appeal in terms of settlement, this Original Side Appeal
stands disposed of in accordance with the terms of settlement as against
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respondents 1, 2, 3, 4 and 6 and is dismissed as against the 5th
respondent. Consequently, the connected Civil Miscellaneous Petition is
closed. No costs.
[Dr.G.J., J.] & [M.S.K., J.]
06.10.2025
Index : Yes/No
Internet : Yes/No
rpl
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Dr.G.JAYACHANDRAN., J.
and
MUMMINENI SUDHEER KUMAR., J.
06.10.2025
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