IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.09.2008 CORAM THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM AND THE HONOURABLE MR.JUSTICE M.VENUGOPAL O.S.A.NO.274 OF 2006 1.A.Parvathy 2.A.Jayanthi 3.A.Jayaprakash 4.A.Rajeswari .. Appellants Vs. 1.Vanaja Aranganayagi (died) 2.Purasawalkam Permanent Fund Ltd., Vellala Street, Purasawalkam, Madras-600 086. 3.V.Pushpalatha 4.Padmaja 5.Durga Prasad 6.Babulal K.Voara Navin P.Shah (died) 7.Jatin K.Joshi 8.Sandeep S.Shah Associates, rep. by Sandeep S.Shah 213 & 214, Rajendra Apartments, 158, Baracah Road, Kilpauk, Chennai-600 010. 9.E.Ekambaram 10.Ranjaban N.Shah 11.Ajit N.Shah 12.A.Ramalingam .. Respondents This original side appeal has been preferred under Order 36 Rule 1 of O.S. Rules and Clause 15 of Letters Patent against the judgment and decree of the learned Single Judge made in C.S.No.1139 of 1993, dated 9.5.2006. For Appellants : Mr.S.V.Jayaraman, SC for Mr.S.Raghu For Respondents : Mr.T.V.Ramanujan, SC for Mrs.Sudha Ramalingam for R-1 Mr.S.Meer S.Shah for R-8 Mr.Suchit Anant Palanda for R-12 No appearance for others - - - - JUDGMENT
(The judgment of the Court was made by M.CHOCKALINGAM, J.)
This appeal challenges a judgment of the learned Single Judge of this Court made in C.S.No.1139 of 1993, whereby a suit for specific performance on the strength of a written agreement for sale, was decreed.
2.The plaintiff filed the suit for the relief of specific performance with the following averments:
a)The suit property belonged to the first defendant, whose legal representatives are the defendants 13 to 17. An agreement for sale was entered into between the first defendant, the owner and the plaintiff, who proposed to purchase the same, on 14.12.1992, whereby the sale consideration was agreed at Rs.19,50,000/-. An advance of Rs.6,50,000/- was paid by the plaintiff to the first defendant and the same was also recorded in the agreement. As per the terms of the agreement, the property mortgaged with Purasawalkam Permanent Fund Ltd. should be redeemed by the first defendant and vacant possession should be handed over on or before 13.6.1993. Since the first defendant failed to comply with the terms, the plaintiff issued a notice on 14.6.1993, demanding the execution of the sale deed and also the vacant possession of the property. There was a reply from the first defendant on 16.6.1993. The plaintiff never agreed to discharge the mortgage. As found in the reply notice, the first defendant was delaying the execution of sale by not furnishing no objection certificate from the appropriate authority. After reply notice, the plaintiff again issued the second notice, making demand on the first defendant for receiving the balance sale consideration on completion of the sale transaction, but the same was also denied and there was a frivolous reply. Following the same, the plaintiff issued rejoinder reiterating her case.
b)So far as the mortgage was concerned, the details were not furnished to her. Without redemption of the mortgage, the sale could not be completed. As per the terms of the agreement, the first defendant had also not taken steps to evict the tenants from the suit property. The first defendant having received Rs.6,50,000/- caused loss of Rs.13,000/- per month to the plaintiff by way of interest. Instead of honouring the agreement entered into with the plaintiff, the first defendant executed a power of attorney with the third defendant and she had created two sale deeds, purporting to convey the suit property in favour of the defendants 4 and 5. An application for contempt was also made. In the counter filed in the contempt application, it was contended that the first defendant had executed a power of attorney in favour of third parties. The defendants 3 to 10 are only speculators. The defendants 6 to 10 were also added as parties, since they are the persons, who were shown as purchasers of the property pending agreement in force. Pending suit, the first defendant died and the legal representatives of the first defendant were impleaded as defendants 13 to 17. Similarly, pending suit, the seventh defendant died and his legal representatives were impleaded as defendants 11 and 12. The plaintiff is ready and willing to perform her part of the contract and hence specific performance has got to be granted.
3.The first defendant resisted the suit inter-alia stating that it is true, there was an agreement for sale on 14.12.1992; that at the time of agreement for sale, the first defendant informed the plaintiff that the property was under mortgage with Purasawalkam Permanent Fund Limited and out of balance sale consideration, the mortgage has got to be redeemed, but the plaintiff neglected to pay the dues nor has paid the remainder, enabling the first defendant to discharge the mortgage and thus, the interest has been mounted, which the first defendant was to pay; that the plaintiff alone, despite request, failed to submit the draft sale deed to obtain income tax clearance certificate from the Department deliberately; that the main reason brought forth was the financial strain; that the plaintiff was never ready and willing to perform her part of the contract and under these circumstances, the plaintiff sent a fresh agreement for sale in the year 1993, but the first defendant refused to sign; that apart from that, when notices are issued, proper replies were given by the first defendant through the counsel; that the plaintiff has committed breach of contract and not the first defendant; that inspite of repeated request made by the defendant, the plaintiff failed to redeem the mortgage and that it would be indicative of the fact that she was not having sufficient funds to pay the balance consideration and to get the sale deed executed and further, the draft sale deed has not been prepared by her and all would go to show that the plaintiff committed breach of the terms as found in the agreement and hence the suit was to be dismissed.
4.The 13th defendant filed written statement inter-alia stating that cause of action for the suit arose on the date of agreement entered into between the plaintiff and the first defendant; that the first defendant died and her legal representatives were brought on record; that when the agreement was entered into between the parties, the legal representatives were not parties to the agreement and hence there was no cause of action against the legal representatives of the first defendant and hence it would not be binding on them; that it is not correct to state that the plaintiff was ready and willing to perform her part of the terms and hence the suit was to be dismissed.
5.The 14th defendant filed written statement, which was adopted by the defendants 15 to 17, stating that they were not parties to the agreement and hence it would not be binding on them.
6.On the above pleadings, originally 5 issues were framed on 24.11.1998 and subsequently, as per the order, dated 5.3.2004, 7 issues were framed. At the time of trial, on the side of the plaintiffs, two witnesses were examined and 12 documents were marked. On the side of the defendants, one witness was examined. The learned Single Judge, after hearing the arguments advanced and looking into the materials available, took the view that the decree for specific performance has got to be granted. Accordingly, it has been granted. Hence this original side appeal has arisen.
7.Advancing arguments on behalf of the appellants, the learned Senior Counsel has made the following submissions:
In the instant case, it is not in controversy that the agreement for sale was entered into between the parties. It is true, as per the terms of the contract, only specific performance could be ordered. The agreement contains the term that vacant possession has got to be handed over. It is an admitted position that the property, at the time of execution of agreement between the parties, was actually occupied by number of tenants and thus, the term stipulated in the agreement is that the first defendant should hand over the vacant possession of the property, but the tenants have not vacated the property and they are occupying the same and under these circumstances, vacant possession could not be given and thus, one of the important and relevant terms in the agreement could not be performed. If the said term in the agreement could not be performed, it is nothing but impossibility of performance of contract and under these circumstances, specific performance could not be ordered.
8.Added further the learned Senior Counsel that it is the case where the plaintiff actually breached her part of the contract. As could be seen from the materials, though it appears in the plaint that the plaintiff was ever willing and ready to perform her part of the contract, she was never ready and willing to perform the contract. The learned Senior Counsel took the court to a part of the agreement and would contend that it was actually the plaintiff who has to prepare the draft sale deed, but she has never prepared the same, for which when notice was issued, there was proper reply sent, calling upon her to give draft sale deed; that in order to obtain income tax clearance certificate, draft sale deed was required, but it was not prepared.
9.The learned Senior Counsel would further add that in the instant case, it was originally well known that the property was mortgaged by the first defendant with Purasawalkam Permanent Fund Ltd. It was actually understood between the parties that the mortgage should be redeemed only on payment of balance consideration of Rs.13 lakhs. The plaintiff never came forward to make the payment. There was exchange of notices. It was made clear in the reply given under Ex.P.7 that the plaintiff should redeem the mortgage, but she did not come forward to do so. For the act of the plaintiff, the interest is mounted and the defendant could not make the payment of the same. Thus, the plaintiff has acted detrimental to the interest of the first defendant and under these circumstances, it would be quite indicative of the fact that because of financial strains, the plaintiff has not come forward to redeem the mortgage. All would go to show that it was the plaintiff who breached her part of the contract. The contract is one which could not be performed and there is impossibility of performance. The plaintiff actually did not have sufficient funds to pay the balance consideration and hence the relief should not have been granted.
10.Added further the learned Senior Counsel that it was a case for specific performance on the strength of an agreement for sale of an immovable property and it was actually a discretionary relief. If the facts and circumstances and both oral and documentary evidence were looked into, the learned Single Judge should have denied the relief, but not done so. It is a case where the court, considering the circumstances attendant and narrated above, should have denied the relief and hence the judgment of the learned Single Judge has got to be set aside, dismissing the suit.
11.Contrary to the above contentions, the learned Senior Counsel appearing for the respondents would submit that the learned Single Judge has recorded a finding that it was the breach committed by the first defendant and she should not be allowed to make a comment that the plaintiff has made any breach; that it was a case where there was an agreement for sale between the parties; that payment of Rs.2 lakhs has been made and further payment of Rs.4,50,000/- has also been made and they were all admitted facts; that even as per the agreement, the property was under mortgage; that it was to be redeemed by the first defendant; that despite the fact that the first defendant received a sum of Rs.6,50,000/-, she did not come forward to redeem the mortgage; that on the contrary, what was contended was that it was the plaintiff who should redeem the mortgage, which is contrary to the terms of the agreement; that apart from that, in the instant case, when the suit was pending before the court, the property was actually brought for sale and an application was filed by the plaintiff, seeking permission to redeem the mortgage; that at this juncture, the defendant came forward to redeem the mortgage and thus, it was a case where the first defendant has breached her part of the agreement; and that having breached the agreement, she should not have been allowed to take advantage of her own breach.
12.Added further the learned Senior Counsel that in the instant case, the plaintiff is all along willing to perform her part of the contract; that Rs.6,50,000/- has been paid as advance and the balance amount has also been deposited in the court in order to show her bona fide; that apart from that, in the instant case, the comment made by the defendant’s side that draft sale deed was not prepared was of no avail for the simple reason that mortgage was not redeemed by the first defendant and the tenants have also not vacated the property and under these circumstances, no useful purpose would be served by preparing the draft sale deed; and that apart from that the exchange of notices would make it clear the delaying tactics made by the first defendant.
13.The learned Senior counsel would further submit that in the instant case, all the allegations found in the written statement filed by the other defendants subsequent to the death of the first defendant, have been rejected by the court correctly; that it is an admitted fact that power of attorney was made in order to make transfer of the property, which would indicate that the defendant has come with the defence with unclean hands; that the contention that the tenants are in occupation of the property and as per the terms of the agreement, vacant possession should be given and hence the contract could not be performed has got to be rejected for the simple reason that the defendant should not be allowed to say that the contract could not be performed; that even assuming that the tenants are occupying the same, major part of the property could be directly handed over and in respect of the property, in which the tenants are in occupation, the plaintiff is ready and willing to take the same and under these circumstances, the court can mould the relief and that in a given case, there was breach committed by the first defendant and thereafter by the other defendants and under these circumstances, the learned Single Judge was perfectly correct in granting decree and hence the decree of the learned Single Judge has got to be sustained.
14.The only question that would arise for consideration in this appeal would be whether the plaintiff is entitled for decree for specific performance of agreement entered into between the parties on 14.12.1992 under Ex.P.1?
15.The court has paid its anxious consideration on the submissions made and looked into the materials available. Concededly, an agreement for sale under Ex.P.1 was entered into between the first defendant, the owner of the property and the plaintiff, the proposed purchaser, on 14.12.1992 and the consideration as agreed was Rs.19,50,000/-. An advance of Rs.2 lakhs was made and it was incorporated in Ex.P.1, the agreement and subsequently, further sum of Rs.4,50,000/- was made, which were all admitted facts. The balance consideration was Rs.13 lakhs for completion of sale. What was contended by the defendant before the learned Single Judge and equally here also is that the plaintiff was never willing and ready to perform her part of the contract and the properties were under occupation of the tenants and hence the contract could not be performed and also the plaintiff has not performed her part of the terms as found in the agreement for sale and hence discretionary relief has got to be denied. After a perusal of all the materials available and also after hearing the submissions of the learned counsel, the court is of the considered opinion that the judgment of the learned Single Judge has got to be affirmed for the reasons as narrated hereunder.
16.An agreement was entered into between the parties on 14.12.1992 and Rs.6,50,000/- has been paid as advance. As could be seen, it was well understood between the parties that the property, in question, the subject matter of sale under Ex.P1, agreement, was actually under mortgage with Purasawalkam Permanent Fund Ltd. at the relevant point of time. It could be seen from the recitals in the agreement, which is more important in the opinion of the court, that the Vendor further covenants that the schedule property is presently mortgaged with Pureasawalkkam Permanent Fund Ltd. and there is no other charge other than the one mentioned above and the Vendor shall redeem the schedule property from the mortgagor and hand over the vacant possession of the schedule property on or before 13.6.93 to the purchaser and the sale shall be completed on or before 13.6.93.
17.At this juncture, it would be quite clear that the sale agreement was entered into between the parties on 14.12.1992, where Rs.2 lakhs has been paid as advance and on 18.2.1993, a further sum of Rs.1 lakh has been paid and on 26.3.1993, a further sum of Rs.3,50,000/- has been paid and the same were recorded in the agreement. As per the agreement, the sale shall be completed on or before 13.6.1993. When the clause found in the agreement looked into, it could be seen that the property originally mortgaged by the first defendant with Purasawalkam Permanent Fund Ltd. should be redeemed by the vendor. Thus, it would be quite clear that when the defendant has got the first payment of Rs.2 lakhs as advance on the date of agreement and thereafter, when another sum of Rs.4,50,000/- has been paid, it is only the first defendant who should redeem the mortgage, but she has thoroughly failed to do so. Now, the contention put forth by the learned counsel for the appellants that in the instant case, though it was stated in the agreement that it was the first defendant who should redeem the mortgage, it was understood between the parties that it was for the plaintiff to make the balance consideration and out of which, the mortgage has got to be redeemed, cannot be countenanced for the reason that while the agreement specifically provides that it is the vendor of the property who should redeem the mortgage, no amount of any oral evidence could be allowed, which is repugnant to the specific terms in the agreement found in Ex.P.1.
18.The other contention put forth by the learned Senior counsel for the appellants that for the delay caused in redeeming the mortgage, the interest is mounted and hence the plaintiff has acted prejudicial to the interest of the defendant cannot be countenanced. In the instant case, till the suit was filed for specific performance before the court, the mortgage was not redeemed. When the property was brought for sale, it was the plaintiff who filed an application seeking permission to redeem the mortgage. At that juncture only, the defendant came forward to redeem the mortgage. This would go to show that either the first defendant or on his death, the other defendants, who resisted the suit, did not come forward to perform their part of the contract. The other contention is that the property was actually under the occupation of the tenants and it was well understood that under the terms of the agreement, the vacant possession should be given and hence so long as the tenants are not vacating, free possession should not be given and hence the terms of the agreement that free possession should be given could not be performed and hence it would be nothing but impossibility of performance of the contract under Ex.P.1. This contention though attractive, in the opinion of the court, will not stand the scrutiny of law. It is true, the property was under the possession of tenants during the relevant point of time. The first defendant has agreed that she would hand over the vacant possession of the property, but there is nothing to indicate that from the time of agreement under Ex.P.1, namely on 14.12.1992 till the suit was filed, she has taken any steps to vacate them. Not taking any steps to vacate the tenants, who are occupying the property, the first defendant came forward with the defence stating that they are not vacating and the property was not free from possession and hence the contract could not be performed, which cannot be accepted. The court can mould the relief even if the tenants are in occupation, which could be granted subject to the same. The learned counsel for the respondents would submit that the plaintiff are ready and willing to take the property as it is and therefore, the plaintiff will see to vacate the tenants. Under these circumstances, the defendant, who has made breach of the agreement, cannot be allowed to take advantage of the said breach as stated by the learned counsel for the respondent/plaintiff.
19.Apart from that, in the instant case, insofar as the readiness and willingness is concerned, originally, there was an advance payment of Rs.2 lakhs and further an amount of Rs.4,50,000/- has been made. The rest of the amount, namely Rs.13 lakhs, in order to show the bona fide of the plaintiff, has been deposited at the trial stage. All would indicate that the comment made by the learned counsel for the defendant that the plaintiff was not ready in performing her part of the contract, cannot be accepted. So far as exchange of notices is concerned, the court is of the considered opinion that the plaintiff has been ready and willing, but evasive process was taken by the defendant. Further, for redeeming the mortgage, no steps have been taken by the defendant, but the first defendant made a comment that the plaintiff has not prepared the draft sale deed. All would indicate that the first defendant, who has actually committed breach, came forward with a defence to state that such a relief is a discretionary one and the plaintiff has acted prejudicial to the interest of the first deceased and hence the relief should not have been granted. In the instant case, the plaintiff has paid 1/3rd of the sale consideration as advance and even she has deposited the balance consideration in the court and she has also came forward to redeem the mortgage. All would go to show that the plaintiff is always ready and willing to perform her part of the contract. Having failed to perform her part of the contract, the defendants cannot be allowed to say that the plaintiff has breached the same and therefore, the relief should not be granted. The evidence marshalled would clearly indicate the other way about. Hence the plaintiff is entitled for the relief, which has been rightly granted by the learned Single Judge. The defendants were not entitled for the counter claim, which has been rightly rejected.
20.Under these circumstances, this appeal has got to be dismissed, without disturbing the judgment of the learned Single Judge. Accordingly, this original side appeal is dismissed, leaving the parties to bear their costs.
(M.C., J.) (M.V., J.)
23.09.2008
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M.CHOCKALINGAM, J.
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M.VENUGOPAL, J.
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O.S.A.NO.274 OF 2006
23.09.2008