High Court Kerala High Court

Jacobs Private Limited vs Thomas Jacob on 28 September, 1994

Kerala High Court
Jacobs Private Limited vs Thomas Jacob on 28 September, 1994
Equivalent citations: AIR 1995 Ker 249
Author: Thomas
Bench: K Thomas, B Patnaik


JUDGMENT

Thomas, J.

1. As construction of a multi-storeyed building on one of the prime sites at Ernakulam was in progress, a suit for partition was filed by one of the co-owners of the land concerned. In the suit he sought for an injunction restraining the defendants from proceeding with the construction. As the lower Court granted the injunction the aggrieved first defendant-company has filed this appeal.

2. The land in dispute has an extent of 45.408 cents. It belonged to a firm called “J’kobs” which was later dissolved and thereafter ownership of the land became vested with the erstwhile partners of the firm. Plaintiff is one among them. First defendant — a private limited company — entered into an agreement with the co-owners of the aforesaid land for purchasing the same. Ext. A1 is the agreement for sale which is dated 16-9-1988. Purchase price has been fixed as Rs. 17.5 lakhs and this has to be paid to the co-owners in accordance with the share of each one of them. On the date of agreement half of a lakh of rupees was paid by the first defendant. The co-owners put the first defendant-company in possession of the

land and permitted the company to construct buildings thereon subject to the condition that the entire sale consideration should be cleared on or before 31-3-1990. Though it was stipulated that time was the assence of the contract, plaintiff has agreed to extend the time on a condition that interest at the rate of 18% per annum would accrue on the sale consideration remaining unpaid.

3. Plaintiff’s case is that first defendant-company failed to pay his share of sale consideration even after the extended time and hence the company has no right under the agreement as against the plaintiff. As the first defendant, who got possession of the land, started construction of the building, the suit was filed for partition to safeguard the plaintiffs right in the property.

4. Substantial part of plaintiff’s case seems to be undisputed. However, first defendant resisted the suit mainly on two premises. First is that the agreement for sale could not be performed due to the default of the plaintiff. Second is that the plaintiff is debarred from enforcing any right against the first defendant in view of Sec. 53-A of the Transfer of Property Act (for short ‘the T. P. Act’).

5. Both contentions were not prima facie acceptable to the learned sub Judge and hence he granted the injunction prayed for.

6. Learned counsel for the appellant argued that since first defendant-Company has already started construction of the multi-storeyed building in the plaint schedule property and the work has progressed considerably the balance of convenience should have been found weighing more with the refusal of the equitable relief of injunction.

7. We do not think it necessary to vex our mind with the question whether time was the essence of the contract since plaintiff, on his part, has subsequently agreed to extend the time till 14-4-1993. Ext. B 23 is a letter written by the first defendant on 1 -4-93 to the plaintiff in which the latter was told that the balance amount due to the plaintiff would not be paid since plaintiff has got income-tax arrears. The balance amount payable to the plaintiff,

according to the plaintiff, was more than Rs. 1,75,000/- including interest. Thus means that first defendant did not perform its part of Ext. A1 agreement towards the plaintiff. Of course, first defendant-company has advanced an excuse for it that the income-tax department has prohibited it from paying the amount to the plaintiff.

8. Ext. B3 is a communication dated 13-12-1988 received from the income-tax department directing the first defendant company to remit an amount of Rs. 45,953/-as arrears of income-tax due from the plaintiff. About five years later (i.e., on 23-7-93) the tax recovery officer informed the first defendant-company that the tax arrears due from the plaintiff was only Rs. 27,570/-‘(vide Ext. B 36). It is a matter for consideration whether the first defendant’s excuse is justifiable for withholding payment of more than Rupees 1,76,000/ – due to the plaintiff on the premise that the plaintiff owed about Rs. 28,000/- to the income-tax department. If the first defendant-company had cleared the income-tax arrears on behalf of the plaintiff and claimed credit for it the position would have been different.

9. In the above background we have to consider the resistance offered by the first defendant on the strength of Sec. 53-A. of the T.P. Act. The following postulates are sine qua non for basing a claim on Sec. 53-A (1) The contract should have been in writing signed by the transferor, (2) The transferee should have got possession of the immovable property covered by the contract. (3) The transferee should have done some act in furtherance of the contract. (4) The transferee has either performed his part of the contract or is willing to perform his part of the contract. Section 53-A makes it clear by employing the word “then” after laying down the pre-requisites that a transferee can seek refuge under it only after satisfying the above pre-requisites. In other words, the bar envisaged in the section against enforcement of the transferor’s right can be exercised only on compliance with the postulates. The said bar is intended to be used by a transferee only as a shield and not as a award. (Vide Munuswami

v. Erusa Gounder, AIR 1975 Madras 25 and Chinna Thevar v. Ammal, AIR 1979 Madras 47 : ILR (1978) 3 Mad 381.

10. In this case learned counsel contended that the transferee i.e., first defendant-company is willing to pay the amount payable to the plaintiff and that the company did not pay it as the income-tax department raised objections. According to the counsel, willingness to perform the transferee’s part should be understood in the light of his own difficulties to comply with the condition.

11. Willingness to perform the roles ascribed to a party in a contract is primarily a mental disposition. However, such willingness in the context of Sec. 53-A of the T. P. Act must be absolute and unconditional. If willingness is studded with a condition, it is in fact no more than an offer and cannot be termed as willingness. As a right is created by the statute in favour of a transferee through Sec. 53-A, the transferee has to fulfil all the conditions for acquiring the right. In other words, what is contemplated is the complete performance or complete willingness and not performance in part or conditional willingness or even willingness in part (vide K. B. Damodardas v. The Borough Municipality of Ahmedabad, ILR (1941) Bombay 529 : AIR 1941 Bom 346 and Pusaram Maniklal v. Deorao Gopalrao, AIR 1947 Nagpur 188 : ILR (1946) Nag 991.

12. Here there is no dispute that the transferee (first defendant) has not performed his part of the contract. So the first alternative is out of scope. Regarding the other alternative i.e., willingness to perform, the first defendant says that it is willing to perform its part (i.e., payment to the plaintiff) provided the plaintiff clears his income-tax arrears. It is not complete willingness but a conditional willingness or partial willingness which is not sufficient to arm the company with the shield provided by Section 53-A of the T. P. Act.

13. In this context a reference can be made to the decision of the Supreme Court in Chand Rani v. Kamal Rani (AIR 1993 SC 1742) : 1993 AIR SCW 1371. It was a suit for specific performance of a contract. When the

purchaser insisted on obtaining income-tax clearance certificate for making payment of the balance sale consideration, Supreme Court pointed out that since such a condition was not covered by the contract the purchaser cannot claim specific performance on such a condition.

14. It was next contended that as the construction of the building has attained considerable progress the balance of convenience will not be in favour of the grant of injunction. The legal position is well settled that one co-owner has no right to place any constriction upon what belongs to all without the consent of other co-owners. A Full Bench of the Allahabad High Court has stated this position a century ago in Shadi v. Anup Singh, ((1890) ILR 12 All 436). If several owners are in possession of an undivided property, none of them has a right to appropriate to his exclusive use of any portion of this property. Quoting Woodroffe, the Full Bench had observed thus : “Every co-proprietor has a right of vote to forbid anything being done to the common property without his consent and with a view to enforce this right, a person can use to restrain his co-sharers from building on the common property”. This was followed by a learned single Judge of this Court (T. Chandrasekhara Menon, J.) in Gouri v. C. H. Ibrahim (AIR 1980 Kerala 94). Same line has been adopted by another learned single Judge of this Court (M. M. Pareed Pillay, J.) in Muthu v. Ammalu, (1993) (1) KLT 301 : (AIR 1993 Ker 272 : ILR (1993) 3 Ker 22. Legal position has been corectly stated by the learned single Judges in the said decisions.

15. Learned counsel, however, contended that a deviation from the stated position is warranted in this case since first defendant has started construction with the express permission of the plaintiff as could be discerned from Ext. A1. But the permission granted in the agreement for such construction cannot be segregated from the obligation cast on the first defendant to pay the sale consideration. The permission is thus a conditional permission and it stands revoked when the condition stands violated.

For the aforesaid reasons, we are not

inclined to interfere with the impugned order. We make it clear that all the above observations are relevant only for the disposal of the interlocutory application for injunction. We, therefore, dismiss this appeal without any order as to costs.