In the High Court of Judicature at Madras Dated: 06.06.2011 Coram: The Honourable Mr. Justice R.SUBBIAH Second Appeal No.388 of 1998 K.R.Chinnappan ..Appellant ..vs.. The North Arcot District Consumers Co-operative Wholesale Stores Limited, Vellore, by its Secretary, Vellore, N.A.A.District. ..Respondent Second Appeal under section 100 of Civil Procedure Code filed, against the judgment and decree dated 19.07.1996 made in A.S.No.55 of 1995 on the file of Principal District Court, Vellore, confirming the judgment and decree dated 28.04.1995 made in O.S.No.68 of 1990 on the file of Sub Court, Thirupattur. For Appellant : Mr.P.Jayaraman, Senior Counsel for Mr.G.Elanchezhian For Respondent : Mr.S.Parthasarathy, Senior Counsel for M/s.Sarvabhauman Associates JUDGMENT
The appellant, who lost before the courts below, has filed the second appeal aggrieved over the judgment and decree dated 19.07.1996 passed by the learned Principal District Judge, Vellore, in A.S.No.55 of 1995, confirming the judgment and decree passed by the learned Subordinate Judge, Tirupattur, dated 28.04.1995 in O.S.No.68 of 1990.
2. The appellant/plaintiff filed the suit directing the respondent/defendant to execute a sale deed in his favour in respect of the suit properties and for a permanent injunction restraining the respondent from putting up any construction in the suit properties or interfering with his possession and enjoyment of the same, alleging that building sites detailed in items 1 and 2 of the suit properties belonged to the respondent, having been purchased under two sale deeds dated 15.10.1962. It is the further case of the appellant that in March, 1973, the respondent invited tenders for sale of the said properties and various persons submitted their tenders; among whom, the appellant was the highest bidder for a sum of Rs.25,500/- for the said sites and it was accepted by the respondent. The appellant was called for to deposit the sale price and accordingly, he also deposited the sale price, after adjusting the earnest money deposit of Rs.750/- and for which, the respondent issued a receipt No.459 dated 30.04.1973 in favour of the appellant and as requested by the respondent, the appellant took possession immediately on 30.04.1973 itself. The unauthorised huts put up by the third parties in the suit properties were also removed. The appellant requested the respondent to send copies of prior title deeds as well as the encumbrance certificate for drafting the sale deed and accordingly, they were sent by the respondent and after perusing the same, the appellant returned the same to the respondent. The then Secretary of the respondent promised to get the draft sale deed approved by his higher authorities and to execute the sale deed at an early date; but he has not done so. The appellant made repeated demands for execution of the sale deed at his cost and he also tendered the necessary stamp papers to the respondent in the year 1974. The appellant continues to be in possession of the said sites openly, exclusively and continuously from 30.04.1973 onwards by putting up a fence around the suit sites and as such, he perfected his title to the suit properties by adverse possession for more than the statutory period and he also paid the property tax for the same for the period from 1970-71 to 1975-76. While so, the respondent sent a letter dated 28.04.1990 stating that since the sale deed was not executed and registered and possession was not delivered, it was proposed to construct a godown; that the appellant would have a right to obtain refund of the sale price paid by him and that the land has been sold at a lower price having regard to the market value and for which, the appellant sent a suitable reply. The respondent did not intimate to the appellant at any time that the sale was cancelled or that the price was low and for the first time after 14.08.1973, the respondent has denied the right of the appellant to obtain the sale deed executed. Having been purchased the said sites for Rs.9,500/- in 1962, the respondent has accepted the highest tender of the appellant for Rs.25,500/- in 1973. The appellant had always been ready and willing to have the sale deed executed and registered at his cost, but the respondent had failed and neglected to perform its part of the contract. Having confirmed the sale and having accepted the entire sale price, the respondent cannot take advantage of its own lapses in execution of the sale deed. No time limit was prescribed for execution of the sale deed and therefore, the suit is within the time under Article 54 of the Limitation Act. Hence, the suit.
3. Resisting the case of the appellant, the respondent filed a written statement stating that the respondent is the absolute owner of the suit properties. It is a society registered under the Tamil Nadu Co-operative Societies and the Rules framed thereunder and is controlled and regulated by the Government of Tamil Nadu as well as the Registrar of Co-operative Societies. The society purchased the suit properties which are adjoining vacant sites under two registered sale deeds dated 15.10.1962. Though the Government of Tamil Nadu initially sanctioned loan as well as subsidy for construction of godowns and shop at the suit premises, the said plan was given up subsequently and the respondent made proposals for sale of the suit properties. Thereafter, tenders were called for and the appellant was the highest bidder; but the amount paid by the appellant was kept in deposit. There was no concluded contract and there was no assurance given by them for execution of the sale deed and the possession was never handed over to the appellant. Since it was not accepted by the higher authorities, the proposal to sell the properties was dropped. Even in 1974, the appellant was asked to surrender the receipt and receive back the amount deposited by him and even in 1974, the demand for a sale deed was refused and negatived. The appellant cannot wait for 17 long years and file the suit claiming specific performance of contract. The suit is barred by limitation and hence, the suit has to be dismissed.
4. Apart from the said suit, the respondent society has also filed a suit in O.S.No.141 of 1990 as against the appellant for a permanent injunction restraining him from interfering with its peaceful possession and enjoyment of the suit properties contending that the society is in possession of the suit properties.
5. On the said pleadings, the trial court framed necessary issues separately and conducted a joint trial in O.S.No.68 of 1990 and on the side of the appellant, P.Ws.1 to 3 were examined and Exs.A-1 to A-17 were marked and on the side of the respondent society, one Narasimhan was examined as D.W.1 and Exs.B-1 to B-14 were marked and the Advocate Commissioner’s report and plan were marked as Exs.C-1 and C-2. The trial court, after considering the entire evidence on record, both oral and documentary, had dismissed the suit filed by the appellant in O.S.No.68 of 1990 for specific performance, directing the respondent society to pay Rs.25,500/- with interest to the appellant and decreed the suit filed by the respondent society for injunction in O.S.No.141 of 1990 as prayed for. Aggrieved over the same, the appellant filed A.S.Nos.54 and 55 of 1995 against the decretal of the suit O.S.No.141 of 1990 and dismissal of the suit O.S.68 of 1990 respectively before the Principal District Court, Vellore, wherein both appeals were dismissed by the lower appellate court, confirming the common judgment and decrees of the trial court. Aggrieved over the dismissal of the appeal in A.S.No.55 of 1995 filed against the dismissal of the suit in O.S.No.68 of 1990, the present appeal has been filed.
6. At the time of admission of the second appeal, this Court has framed the following substantial question of law for consideration:
Whether not the acceptance of tender, the confirmation letter, receipt of the full sale value, acceptance of stamp papers concluded the contract in favour of the appellant entitling the specific performance of execution of sale deed ?
7. Learned Senior Counsel appearing on behalf of the appellant/appellant submitted that pursuant to the tenders called for by the respondent/respondent society, the appellant has submitted his tender on 31.03.1973 and he was declared as the highest bidder by the Joint Register of the respondent society on 14.04.1973. The appellant has also paid the entire sale price on 30.04.1973 and for which, Ex.A-2 receipt was issued to the appellant. The appellant has also sent a draft sale deed for the approval of the respondent and he has also furnished stamp papers for preparing the sale deed. The cumulative effect of these facts would show that the appellant has completed his part of the contract. That apart, the appellant had been put in possession of the suit properties by the respondent on 30.04.1973 itself. From 30.04.1973, the appellant was in continuous, open and uninterrupted possession of the suit properties. Only on 28.04.1990, the Special Officer of the respondent Society sent a letter stating that the society has proposed to construct a godown in the vacant site and since no sale deed was executed in favour of the appellant, they are the owners of the vacant site. Thereafter, the appellant sent a reply and filed the suit for specific performance on 19.07.1990. Thereafter only, the respondent has filed the suit for injunction in O.S.141 of 1990. Since the appellant had been in possession of the properties, there was no need for him to file a suit for specific performance immediately, after paying the entire sale amount. However, when the respondent has refused to execute a sale deed in the year 1990, the suit for specific performance was filed immediately. Therefore, it cannot be said that there was laches on the part of the appellant in filing the suit. But the courts below have come to an erroneous conclusion that there was laches on the part of the appellant in filing the suit for specific performance.
8. The learned senior counsel for the appellant/plaintiff further submitted that in order to prove possession of the suit properties, on the side of the appellant, the property tax receipts pertaining to the years 1971 to 1973, 1975 and 1976 were marked as Exs.A-8 to A-13. On the side of the respondent, the demand made by the Commissioner, Thirupathur Municipality dated 21.03.1990 and the receipt issued towards payment of property tax dated 23.03.1990 were marked as Exs.B-8 and B-9. In this regard, the learned senior counsel submitted that these two documents were created by the respondent just two days before filing of the suit. Therefore, the courts below ought not to have relied upon these documents. The learned senior counsel further submitted that the trial court, having come to a conclusion that the suit properties were only under the possession of the appellant, erroneously rendered a finding that the said possession of the appellant was only as a trespasser. Apart from that, the lower appellate court entirely came to a wrong conclusion as if the possession of the suit properties was only with the respondent and not with the appellant. The learned senior counsel vehemently argued that irrespective of possession of the suit properties, the appellant is entitled for specific performance since he has proved his readiness and willingness to get the sale deed executed by paying the entire amount. In support of his contentions, the learned senior counsel has relied upon the judgments reported in WILLIAMS .vs. LOURDUSAMY AND ANOTHER ((2008) 5 SCC 647), MANICKA GOUNDER AND ANOTHER .vs. LAKSHMI AMMAL (2002-3-L.W.281) and CHOKKAMMAL .vs. K.BALRAJ (2008(5) CTC 690), SHAKUNTALA .vs. NRAYAN GUNDOJI CHAVAN ((1999) 8 SCC 587), D.S.THIMMAPPA .vs. SIDDARAMAKKA ((1996) 8 SCC 365) and LAXMAN TATYABA KANKATE .vs. TARAMATI HARISHCHANDRA DHATRAK (AIR 2010 SC 3025).
9. Per contra, the learned Senior Counsel appearing on behalf of the respondent/defendant submitted that the present appeal has been filed only as against the dismissal of the first appeal filed against the dismissal of the suit for specific performance and the appellant has not preferred any appeal as against the judgment delivered in O.S.No.141 of 1990 filed by the respondent society for injunction. The courts below have granted injunction in favour of the respondent society on a finding that the property is in possession of the respondents. Since no appeal has been preferred against the order of injunction, the finding rendered by the lower appellate court with regard to the possession aspect had reached finality and hence, the present appeal is barred by res judicata. Therefore, on this ground alone, the appeal is liable to be dismissed. The learned senior counsel further submitted that though the appellant has paid the entire amount, the contract was not concluded and in fact, the respondent society has returned the stamp papers as early as 1974 itself. Under such circumstances, the appellant ought to have filed a suit for specific performance within three years from the date of return of the stamp papers, whereas he filed the suit after the lapse of 17 years. Therefore, the suit is hit by limitation as per Article 54 of the Limitation Act. Therefore, on this ground also, the suit is liable to be dismissed.
10. By way of reply, the learned counsel for the appellant submitted that the suit filed by the respondent was only for permanent injunction and suit filed by the the appellant was for specific performance. Therefore, the decree of injunction will not operate as res judicata for the suit filed by the appellant for specific performance. In support of the said contentions, the learned senior counsel has relied on the decisions reported in LONANKUTTY .vs. THOMMAN AND ANOTHER ((1976) 3 SCC 528), PREMIER TYRES LIMITED .vs. KERALA STATE ROAD TRANSPORT CORPORATION (1993) Supp (2) SCC 146) and K.VISWANATHN .vs. R.APPAVOO CHETTIAR (2010(3) CTC 799).
11. This Court has considered the submissions of the learned senior counsel for both sides and perused the materials available on record.
12. The sum and substance of the arguments advanced on behalf of the appellant/plaintiff are as follows:
(1) The appellant/plaintiff had paid the entire sale consideration as early as 30.04.1973 itself;
(2) consequent to the payment of entire sale consideration, the appellant had been put in possession of the suit properties;
(3) since the appellant was in open, continuous and uninterrupted possession of the suit properties for more than the statutory period, there is no necessity to file a suit for specific performance immediately after the payment of entire sale consideration;
(4) when he received notice dated 28.04.1990 for the first time, marked as Ex.A-14, he immediately filed the present suit for specific performance;
According to the learned senior counsel, the above facts would show the readiness and willingness on the part of the appellant to perform his part of the contract and in fact, he performed his part of the contract by paying the entire amount in 1973 itself. Therefore, he is entitled for the equitable relief of specific performance.
13. Per contra, it is the submission on behalf of the respondent that though the amount was received by the respondent society, the contract was not concluded and in fact, in the year 1974 itself the appellant was asked to get back the sale amount. Moreover, the stamp papers furnished by the appellant for preparing a sale deed were also returned to him.
14. As contended by the learned senior counsel for the appellant, absolutely, there is no documentary evidence to show the intention of the respondent to refund the amount paid by the appellant; however, I find that the appellant as P.W.1 had admitted in his evidence that the stamp papers were returned to him within one or two years from the date of payment of the said amount. The relevant portion from the evidence of P.W.1 is extracted hereunder:
VERNACULAR (TAMIL) PORTION DELETED
15. In view of the above admission, now it is submitted by the learned senior counsel for the respondent that as per Article 54 of the Limitation Act, the suit ought to have been filed within three years from the date of return of the stamp papers, on which date, the cause of action for filing a suit for specific performance arose, whereas the appellant filed the suit only in 1990 after 17 years from the date of return of the stamp papers. For this, it is the contention of the appellant that for the first time on 28.04.1990, the respondent had sent a letter expressing their intention to construct a godown in the suit site. Having known the fact of refusal of execution of the sale deed by the defendant from the said letter Ex.A-14, the appellant has filed the suit for specific performance immediately within a period of one month. Therefore, it cannot be said that there are laches on the part of the appellant in filing the suit. Moreover, it is the submission of the learned senior counsel for the appellant that since he was in possession of the suit properties, no occasion had been arisen for him to file a suit for specific performance.
16. But it is the submission of the learned counsel for the respondent that the issue with regard to possession had reached finality in the suit filed by the respondent in O.S.No.141 of 1990, which was confirmed in A.S.No.54 of 1995 and it would operate as res judicata in the present appeal. Countering the same, the learned senior counsel for the appellant submitted that the suit filed by the respondent is only for injunction. Therefore, the decree of injunction will not operate as res judicata for the suit filed by the appellant for specific performance.
17. In view of the above submissions, the only two vital issues to be decided to find out the correctness of the finding rendered by the courts below are (i) whether the suit was barred by limitation and (ii) whether the principle of res judicata is applicable to the facts and circumstances of the case ?
18. First let us deal with the issue of res judicata. In this regard, an useful reference could be placed on the judgment relied on by the appellant in (2008)5 SCC 647 (supra), wherein the relevant paragraphs are extracted hereunder:
“12. As a matter of fact even such an issue was not framed. The High Court, therefore, in our opinion posed unto itself a wrong question. In a suit for permanent injunction, the Court had rightly proceeded on the basis that on the date of the institution of the suit, the first respondent was in possession of the disputed land or not. It was not required to enter into any other question. It, in fact, did not.
13. It is one thing to say that a person is in possession of the land in suit and it is another thing to say that he has a right to possess pursuant to or in furtherance of an agreement for sale which would not only bind the vendor but also bind the subsequent predecessor. Had such an issue been framed, the appellant or Respondent 2 could have contended that Section 53-A of the Transfer of Property Act had no application. For application of Section 53-A of the Act, an agreement has to be entered into in writing. The said section provides for application of an equitable doctrine of part-performance. Requisite ingredients therefor must be pleaded and proved.
14. A competent court of law has dismissed the suit for specific performance of contract filed by the first respondent opining that the respondent had failed to prove the existence of an oral agreement. If the suit for specific performance of contract had not been decreed in favour of the first respondent, the question of his continuing to remain in possession in part-performance of contract would not arise. The appellant herein filed a suit for declaration of title and recovery of possession. He proceeded on the basis that the first respondent was in possession. The learned trial Judge and the first appellate court, in our opinion, have rightly held that the principle of res judicata was not attracted in this case.
15. In Sajjadanashin Sayed v. Musa Dadabhai Ummer ((2007) 2 SCC 355) this Court considered the cases where in spite of specific issue and an adverse finding in an earlier suit, the same was not treated as res judicata being purely incidental or auxiliary or collateral to the main issue stating: (SCC pp. 362-63, para 24)
24. Before parting with this point, we would like to refer to two more rulings. In Sulochana Amma v. Narayanan Nair ((1994) 2 SCC 14) this Court held that a finding as to title given in an earlier injunction suit would be res judicata in a subsequent suit on title. On the other hand, the Madras High Court, in Vanagiri Sri Selliamman Ayyanar Uthirasomasundareswarar Temple v. Rajanga Asari (AIR 1965 Mad 335) held (see para 8 therein) that the previous suit was only for injunction relating to the crops. Maybe, the question of title was decided, though not raised in the plaint. In the latter suit on title, the finding in the earlier suit on title would not be res judicata as the earlier suit was concerned only with a possessory right. These two decisions, in our opinion, cannot be treated as being contrary to each other but should be understood in the context of the tests referred to above. Each of them can perhaps be treated as correct if they are understood in the light of the tests stated above. In the first case decided by this Court, it is to be assumed that the tests abovereferred to were satisfied for holding that the finding as to possession was substantially rested on title upon which a finding was felt necessary and in the latter case decided by the Madras High Court, it must be assumed that the tests were not satisfied. As stated in Mulla, it all depends on the facts of each case and whether the finding as to title was treated as necessary for grant of an injunction in the earlier suit and was also the substantive basis for grant of injunction. In this context, we may refer to Corpus Juris Secundum (Vol. 50, para 735, p.229) where a similar aspect in regard to findings on possession and incidental findings on title were dealt with. It is stated:
Where title to property is the basis of the right of possession, a decision on the question of possession is res judicata on the question of title to the extent that adjudication of title was essential to the judgment; but where the question of the right to possession was the only issue actually or necessarily involved, the judgment is not conclusive on the question of ownership or title. (emphasis in original)
Following the principle of law as enunciated in the aforementioned decision, we are of the opinion that the principle of res judicata is not attracted to the facts of the case”.
19. But, a reading of the facts of the cited case would show that the 2nd respondent was not a party to the earlier suit and only in that situation, the Supreme Court has held that the principles of res judicta although provide for a salutary principle that no person shall be harassed again and again, for his own limitations and since the 2nd respondent was not impleaded as a party, in his absence, the issue as to whether the 2nd respondent had entered into an oral agreement or not could not have been adjudicated upon and as such, the principle of res judicata will not apply. In my considered opinion, the facts of that case are not applicable to this case because in both matters, common judgment was pronounced by the courts below and the appellant and respondent herein are parties to the suits. Under such circumstances, the appellant herein ought to have filed an appeal as against the finding rendered in the other suit filed by the respondent for injunction. Therefore, the issue with regard to the possession of the suit properties by the respondent had reached finality and, hence, the decree and judgment granted in the other suit will act as res judicata.
20. In this regard, an useful reference could be placed on the judgments relied on by the respondent. In 1993 Supp.(2) SCC 146 (supra), it has been held as follows:
“Effect of non-filing of appeal against a judgment or decree is that it becomes final. This finality can be taken away only in accordance with law. Same consequences follow when a judgment or decree in a connected suit is not appealed from. Thus the finality of finding recorded in the connected suit, due to non-filing of appeal, precluded the court from proceeding with appeal in the other suit. In any view of the matter the order of the High court is not liable to interference”.
21. In 2010 (3) CTC 799 (supra), a Division Bench of this Court has held as follows:
“17. Thus, the parties to the proceedings, the reliefs sought for and the issue that arose for consideration, were inextricably intertwined. This is why, the Trial Court grouped the issues arising in all the Suits into 4 or 5 categories and rendered common findings. In such circumstances, the failure of K.Viswanathan to file Appeals against the decrees passed against him in all other Suits,would certainly operate as res judicata, in so far as his present Appeal against the Scheme decree framed in O.S.No.368 of 1991 is concerned. Hence his Appeal A.S.No.524 of 1996 is liable to be dismissed”.
22. In (1997) 9 SCC 543 (supra), the Hon’ble Supreme Court has held as follows:
“It would be obvious that since the claims of the petitioner and the respondents have arisen from the same cause of action and the finding of the appellate court that damages had accrued to the respondents due to misfeasance or malfeasance having been allowed to become final, the decree which is the subject-matter of the special leave petition cannot be assailed. The selfsame question was directly in issue and was the subject-matter of both the suits. The same having been allowed to become final, it cannot be gone into since the same had attained finality, the petitioner having not filed any appeal against the appeal dismissing the suit. In view of this situation, the High Court was right in concluding that the decree of dismissal of the suit against the petitioner would operate as res judicata under Section 11 CPC in the appeal against which the petitioner has filed the second appeal.
23. The Supreme Court has held in (1976) 3 SCC 528 (supra), as follows:
“The issue whether respondents had the easementary right to the flow of water through the appellants land for fishing purposes was directly and substantially in issue in the respondents suit. That issue was heard and finally decided by the District Court in a proceeding between the same parties and the decision was rendered before the High Court decided the second appeal. The decision of the District Court was given in an appeal arising out of a suit, which though instituted subsequently, stood finally, decided before the High Court disposed of the second appeal. The decision was therefore one in a former suit within the meaning of Section 11, Explanation I, Civil Procedure Code. Accordingly, the High Court was in error in deciding an issue which was heard and finally decided in a former suit and was therefore barred by res judicata”.
The principles laid down in the said judgments are appropriate to decide the issue involved in the appeal. In the case on hand, both suits were tried together and disposed of by the common judgment; but the aggrieved party had chosen to file the appeal against the judgment in one suit. Therefore, I am of the view that the appeal is hit by the principle of res judicata. Even assuming for the arguments’ sake that the issue with regard to possession cannot be gone into in this appeal, irrespective of possession, I find that P.W.1 had admitted in his cross examination that the respondent had returned the stamp papers as early as 1973 itself. When that being so, he ought to have filed the suit immediately after return of the stamp papers, but he did not do so and he filed the suit only in 1990. There is no proper explanation on the side of the appellant in this regard. Therefore, the suit is barred by limitation under Article 54 of the Limitation Act.
24. Learned senior counsel for the appellant has relied upon the judgments, namely, MANICKA GOUNDER AND ANOTHER .vs. LAKSHMI AMMAL (2002-3-L.W.281) and CHOKKAMMAL .vs. K.BALRAJ (2008(5) CTC 690) in order to substantiate his contention that there was a valid contract and the appellant had always been ready and willing to perform his part of the contract. There cannot be any controversy in accepting the proposition laid down in the said judgments; but, in the instant case, the appeal has to fail on two grounds i.e. On the grounds of res judicata and limitation and as such, there is no need for this Court to go into this aspect.
25. The concurrent findings of the courts below dismissing the suit filed by the appellant do not suffer from any serious or substantial error warranting interference and the second appeal has no merits and is bound to fail and in my view, no question of law, much less, substantial question of law is involved in the matter.
For the foregoing reasons, the second appeal fails and it is dismissed. No costs.
gl
To
1. The Principal District Judge,
Vellore.
2. The Subordinate Judge,
Tirupattur.
Copy to:
The Section Officer,
V.R.Section,
High Court
Madras