Allowed

S.Sakkubai v. S.M.Jaya Saravanan

Madras HC29 Jun 2021AS/325/2013

Case brief

AI extract

What is this about?

This appeal challenged a decree for specific performance of an agreement for sale. The appellate court found time was essence and the appellant failed to prove readiness and willingness. The appeal was allowed, quashing the decree for specific performance but granting relief for the return of the advance amount with interest.

What did the court decide?

The appeal is allowed; decree for specific performance set aside; defendant directed to return advance amount of Rs.5,00,000/- with interest at 6% per annum within eight weeks.

S.Sakkubai Vs S.M.Jaya Saravanan — Specific Performance | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated : 29.06.2021 CORAM:

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THE HON'BLE MR.JUSTICE G.K.ILANTHIRAIYAN

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AS.No.325 of 2013 and MP.No.1 of 2013

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S.Sakkubai ... Appellant/Defendant Vs. S.M.Jaya Saravanan ...Respondent/Plaintiff

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PRAYER: Appeal Suit is filed under Section 96 of CPC against the judgment and decree of the learned Principal District Judge of Krishnagiri dated 28.01.2013 in OS.No.79 of 2011

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For Appellant : Mr.J.Hariharan for Mr.V.Nicholas

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For Respondent : Mr.S.R.Varun Karthik for Mr.C.Jagadesh

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JUDGMENT

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The Appeal suit is filed against the judgment and decree of the learned Principal District Judge of Krishnagiri dated 28.01.2013 in OS.No.79 of 2011.

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2.For the sake of convenience, the parties are referred to as per their ranking in the trial Court.

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3.The case of the plaintiff is that the defendant is the absolute owner of the suit property. He agreed to sell the suit property to the plaintiff by fixing rate at Rs.15,500/per cent, totally to be paid Rs.15,15,000/- for the total extent of one acre. Accordingly, on 05.11.2008, the agreement for sale was entered between the plaintiff and the defendant and received a sum of Rs.2,00,000/- as advance towards part of the sale consideration. It was also agreed by the parties that the defendant should make arrangement to survey the suit property and after surveying the same, to hand over the encumbrance certificate, FMB sketch along with legal opinion. The time limit was stipulated in the agreement for sale till 20.04.2009. Though the time limit was fixed, time was not considered to be essence

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of the contract. On 20.01.2009. the plaintiff also paid further sum of Rs.3,00,000/- towards part of the sale consideration to the defendant, thereby the plaintiff was put in possession of the suit property. Thereafter, to level the suit property, the plaintiff spent more than Rs.1,50,000/- for the suit property. The plaintiff further averred that at the time of entering into agreement for sale, the defendant never disclosed that a canal was running in a portion of the suit property. As per the terms of the agreement, the defendant did not cooperate in measuring the suit property so as to ascertain the exact extent of one acre. And as such, the plaintiff could not able to make balance sale consideration. At that juncture, the defendant sent a legal notice on 17.07.2009 with false averments, for which the plaintiff had issued reply notice on 01.08.2009. Though the plaintiff was always ready and willing to perform his part of the contract by paying the balance sale consideration and get sale deed executed from the defendant, the defendant refused to execute the sale deed by receipt of balance sale consideration. Hence, the suit for specific performance.

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4.Resisting the same, the defendant filed written statement and stated that the plaintiff and the defendant have executed agreement for sale on 05.11.2008 and received a sum of Rs.2,00,000/- towards part of the sale consideration in respect of purchasing the suit property. On 11.01.2009, further sum of Rs.3,00,000/- was paid towards part of the balance sale consideration. The allegation of extent of the suit property found only at 90 cents is denied. At the time of entering into the agreement for sale, the defendant agreed to sell the suit property within one acre and not exactly one acre as alleged in the plaint. In fact, the rate was fixed only per cent at Rs.15,500/-. Therefore, the plaintiff made false allegation with a view to find fault on the part of the defendant and those allegations are baseless and against the terms of the agreement for sale. The defendant intended to sell the suit property for her urgent need of money to discharge debts incurred by her. Therefore, the time fixed in the agreement for sale is essence of the contract and there is specific clause in the agreement for sale that if the plaintiff failed to pay balance sale consideration and get execution of the sale deed within 20.04.2009, the plaintiff not only lost his advance amount paid to the defendant and also not entitled to claim right over the agreement for sale. Therefore, the defendant issued notice on 17.07.2009 to the plaintiff, thereby called upon the plaintiff that he lost his advance amount and also not entitled to any right over the agreement for sale. On receipt of the same, on 01.08.2009, the plaintiff had sent reply notice with false and

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imaginary allegations. Even after issuance of the notice, the plaintiff kept quite till 17.10.2011 and filed suit for specific performance. Therefore, the plaintiff was not ready and willing to perform his part of contract at any point of time and as such prayed for dismissal of the suit.

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5.On hearing the rival pleadings, the learned trial Judge framed the following issues for determination of the suit :-

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1/ fpua xg;ge;jg; gj;jpuk; vGjpa fhyj;jpy; tpy;y';frhd;wpjH;. epy tiuglk;. tHf;fwp"h; fUj;J Mfpatw;iw gpujpthjp bfhLj;J fpiuag;gj;jpuk; vGjpf;bfhLg;gjhf epge;jid tpjpf;fg;gl;ljh>

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2/ fhy mtfhrk; (Time is essence) xU Kf;fpa c&uj;jhf nghlg;gl;ljh>

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3/thjp. kPjp gzj;ij bfhLj;J fpuak; bra;Jbfhs;s vg;nghJk; jahuhf ,Ue;jjhf brhy;tJ rhpah>

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4/thjp tHf;Fiuapy; nfhhpa[s;sgo kPjpg; gzj;ij brYj;jp gpujpthjpaplkpUe;J fpuag;gj;jpuk; vGjp bgw chpatuh>

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5/gpujpthjp fpuag;gj;jpuk; vGjp bfhLf;f kWf;Fk; gl;rj;jpy; kPjpg; gzj;ij ePjpkd;wj;jpy; brYj;Jtpl;L ePjpkd;wj;jpd; K:yk; fpuag; gj;jpuk; vGjpg; bgw chpatuh>

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6/ thjp tHf;Fiuapy; nfhhpa[s;s epue;ju cWj;Jf; fl;lis

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ghpfhuk; bgw chpatuh>

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7/thjp bgwf;Toa ntW ghpfhuk; vd;d>

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In support of the plaintiff's case, P.W.1 and P.W.2 were examined and five documents were marked as Ex.A.1 to Ex.A.5. On the side of the defendant, D.W.1 was examined and no exhibits were marked. On considering the oral and documentary evidences adduced by the respective parties and the submission made by the learned counsel, the trial Court decreed the suit and enhanced the sale consideration by 20% and directed the defendant to execute the sale deed. Aggrieved by the same, the present first appeal has been preferred by the defendant.

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The learned counsel for the defendant submitted that the time was essence of the contract. The agreement for sale categorically specified the time limit for execution of the sale deed on or before 20.04.2009. Admittedly, the plaintiff failed to pay the balance sale consideration till such time as agreed by him. And as such, the plaintiff is not entitled for specific performance. In fact, the defendant only caused notice, which was marked as Ex.A3 dated 17.07.2009 to the plaintiff, thereby called upon to forfeit the advance amount since he did not pay the balance sale consideration in time as fixed in the agreement for sale dated 05.11.2008 and duly terminated the agreement for sale. Further stated that the plaintiff was not

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entitled to any right over the agreement for sale. On receipt of summon, the plaintiff issued reply notice only on 01.08.2009 and even then, the plaintiff failed to file suit immediately. The present suit was filed only after two years and three months from the date of the notice caused by the defendant.

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7.1 He further submitted that even assuming that the defendant agreed to measure the property to find out 100 cents and hand over the encumbrance certificate along with legal opinion, no specific date was mentioned in the agreement for measuring the property. There is absolutely no issue in respect of the extent of the property since the sale consideration was fixed only per cent at Rs.15,500/-. Therefore, what are all the extent of the property, accordingly calculate and liable to pay the sale consideration within the time stipulated in the agreement. Though the plaintiff stated that the defendant cheated the plaintiff, no iota of evidence produced by the plaintiff to substantiate the said allegation. The plaintiff marked exhibits A1 to A5. Those are agreement for sale, notice issued by the defendant, reply notice issued by the plaintiff and acknowledgment. Except these documents, no other documents to substantiate the other contention put forth by the plaintiff. Therefore, the plaintiff failed to prove his readiness and willingness to perform his part of contract before the expiry of the time limit stipulated in the agreement for sale. Therefore, the trial court ought not to have decreed the suit for specific performance. In support of his contention, he relied upon the following judgments:

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(i) Indravathi Vs. Kamala reported in 2000 (3) MLJ 106

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(ii) Padmakumari & Ors. Vs. Dasayyan & Ors.

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reported in 2015 (6) CTC 545

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(iii) Muthukrishna Gounder Vs. Gowri and others reported in 2014 (1) CTC 603

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Per contra, the learned counsel for the plaintiff submitted that the time is not essence of the contract, though specific time fixed in the agreement for sale. On the date of agreement, the plaintiff paid a sum of Rs.2,00,000/- as advance towards part of sale consideration and on 11.01.2009, further sum of Rs.3,00,000/- was paid towards part of the sale consideration. On the said date, the possession of the suit property was handed over and the plaintiff spent Rs.1,50,000/for leveling out the portion of the suit property to form house sites. The defendant agreed to make arrangement for surveying the suit property to determine the agreed extent of one acre. Whenever the plaintiff requested for surveying the property, the defendant did not take any steps for surveying the suit property. The defendant also failed to hand over the encumbrance

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certificate, FMB, legal opinion within the stipulated time as per the agreement for sale. Therefore, the time is not essence of the contract. The plaintiff was always ready and willing to perform his part of the contract and even then, the defendant failed to act upon as agreed by her. In support of his contention, he relied upon the judgment in the case of Shivaji Yallappa Patil Vs. Ranajeet Appasheb Patil and others reported in (2018) 16 SCC 725.

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9.Heard, Mr.J.Hariharan, the learned counsel for the appellant, and Mr.S.R.Varun Karthik, the learned counsel for the respondent.

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10.Admittedly, the plaintiff and the defendant entered into an agreement for sale on 05.11.2008 and the plaintiff agreed to purchase the property by fixing rate at Rs.15,500/per cent, which was marked as Ex.A1. The defendant received a sum of Rs.2,00,000/- as advance towards part of the sale consideration on the date of agreement for sale, and on 11.01.2009, further sum of Rs.3,00,000/- was paid by the plaintiff towards part of sale consideration.

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11.Now the points arising for determination in this appeal are as follows:

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(i) Whether time is essence of the contract dated 05.11.2008?

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(ii) Whether the plaintiff proved his readiness and willingness to perform his part of the contract dated 05.11.2008?

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(iii) Whether the plaintiff is entitled to alternative relief to get back the advance amount?

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12.On perusal of the agreement for sale, revealed that time fixed for execution of sale deed till 20.04.2009. Only a sum of Rs.5,00,000/- was paid by the plaintiff on or before 20.04.2009. Therefore, the defendant caused legal notice on 17.07.2009, which was marked as Ex.A3, thereby called upon the plaintiff that the defendant cancelled agreement dated 05.11.2008 and forfeited the advance amount paid by the plaintiff. Further stated that the plaintiff was not entitled to seek any right based on the agreement for sale dated 05.11.2008. On receipt of the same, the plaintiff issued reply notice on 01.08.2009, which was marked as Ex.A4, thereby called upon the defendant to comply with the demand within ten days from the date of receipt of notice, failing which the plaintiff is entitled to seek return of advance amount Rs.5,00,000/- with interest at the rate of 18% with cost incurred by him for

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leveling the suit property at Rs.2,00,000/-. After two years from the date of reply notice, the present suit was laid on 17.10.2011. Even till filing of the suit, the plaintiff did not take any steps to perform his part of the contract. When the agreement for sale dated 05.11.2008 stipulated specific time for execution of the sale deed, the time is essence of the contract dated 05.11.2008. In this regard, the learned counsel for the appellant relied upon the judgment in the case of Muthukrishna Gounder Vs. Gowri and others reported in 2014 (1) CTC 603, wherein it is held as follows:

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17.So far as the issue, whether time is the essence of the contract or not is concerned, in Ex.A1 Agreement, it has been stated that the sale should be completed on or before 20.03.2003. There is nothing on record to show that the plaintiff had taken steps to get the Sale Deed executed before 20.03.2003. The only document available, asking the defendants to execute the Sale Deed, is Ex.A2 legal notice issued on 17.07.2003. Therefore, in the absence of any evidence to show that the plaintiff had demanded execution of the Sale Deed before 20.03.2003 and when a specific date has been mentioned in Ex.A1 Agreement for the completion of the sale, though the general proposition in the case of sale of immovable property, there is no presumption as to time being the essence of contract, in the case on hand, when a specific date has been mentioned for the completion of the sale, I am of the view that the general proposition of law is not applicable to the facts and circumstances of the present case. The Court may infer that Agreement is to be performed in a reasonable time if the conditions are evident from the express terms of the contract. It has been specifically stated in Ex.A1 Agreement that the sale should be completed on or before 20.03.2003. In these circumstances, I find no error in the finding of the lower Appellate Court that time is the essence of the contract.

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13.As stated supra, the plaintiff failed to perform his part of the contract in time. Therefore, in the absence of any evidence to show that the plaintiff had demanded execution of sale deed before 20.04.2009 and when specific date has been mentioned in Ex.A1, agreement for sale, the agreement for sale is to be performed in time.

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14.Insofar as the readiness and willingness are

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concerned, except two payments paid towards part of the sale consideration on 05.11.2008 and 11.01.2009, admittedly the plaintiff did not pay any amount towards sale consideration. The plaintiff also failed to prove that he was ready and willing to perform his part of the contract till 20.04.2009 and even till filing of the present suit, i.e. on 17.10.2011. In fact, the defendant caused legal notice on 17.07.2009 Ex.A3 and only thereafter the plaintiff caused reply notice on 01.08.2009. Even after reply notice, till filing of the suit, the plaintiff did not take any steps to perform his part of the contract. In this regard, the learned counsel for the appellant relied upon the judgment in the case of Indravathi Vs. Kamala reported in 2000 (3) MLJ 106, wherein it is held as follows:

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Even in Ex.A-2, dated 23.1.1980 the respondent has not stated as to why the third instalment of Rs.20,000 was neither paid nor offered. There is a reference to return of Rs.10,000 but as regards the further advance, the notice stated as follows:

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"My clients state that till date you have not come forward to receive the further advance as per the agreement."

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15.He also relied upon the judgment in the case of Padmakumari & Ors. Vs. Dasayyan & Ors. reported in 2015 (6) CTC 545, wherein it is held as follows:

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The second important legal contention raised by defendant Nos. 12 to 15 is that the pleadings of the plaintiff is not in conformity with Order 6 Rule 3 CPC, clause 3 of Form No. 47 in Appendix 'A', extracted hereinabove. By a careful reading of paragraph 6 of the plaint makes it very clear that the averment as provided under clause 3 is not in stricto sensu complied with by the plaintiff. The same is evidenced from the averments made at paragraph 6 of the plaint which reads thus:

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"6. The plaintiff is ready and willing to perform his part of the contract by paying the balance of sale consideration of Rs. 63,000/- and take the sale deed in accordance with the provisions of the agreement deed dated 19.04.1992."

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Upon a careful reading of the abovesaid paragraph we have to hold that the plaintiff has not complied with the legal requirement which is mandatory as provided under Section 16(c) of the Specific Relief Act. Section 16(c) fell for consideration and has been

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interpreted by this Court in a number of cases, referred to supra, upon which reliance has rightly been placed and the said decisions are applicable to the fact situation in support of defendant Nos. 12 to 15 and, therefore, we have to hold that the concurrent finding of fact recorded by the High Court on Issue No. 1 is erroneous in law and is liable to be set aside.

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The last contention urged is whether defendant Nos. 12 to 15 (the appellants herein) are protected under Section 19(b) of the Specific Relief Act as they being the bona fide purchasers. Learned counsel for defendant Nos. 12 to 15 has rightly invited our attention that the non-compliance of the contract regarding payment of balance consideration to defendant Nos. 1 to 11 on the part of the plaintiff within nine months is an undisputed fact and further the agreement of sale is not registered, as is evidenced from the encumbrance certificate obtained by defendant Nos. 12 to 15 before they entered into an agreement (Exhibit B- 1). Both the Courts below have erroneously recorded an erroneous finding on the non existent fact holding that the agreement of sale in favour of the plaintiff is a registered document which, in fact, is not true. The same is evidenced from the encumbrance certificate. More so, defendant Nos. 12 to 15 before entering into the agreement with defendant Nos. 1 to 11 have made proper verification from the competent authority to purchase the part of the suit schedule property and got the agreement of sale (Exhibit B-1) executed in their favour, from defendant Nos. 1 to 11 and thereafter, they got the sale deed registered by paying sale consideration amount. As could be seen from the agreement of sale and registered sale deed, which is marked as Exhibit B-3, it is very clear that defendant Nos. 12 to 15 have paid the sale consideration amount of the property, therefore, the reliance placed upon Section 19(b) of the Specific Relief Act as they being the bona fide purchasers, the specific performance of contract cannot be enforced against the transferees. Defendant Nos. 12 to 15 being the transferee as they have purchased the suit schedule property for value and have paid the money in good faith and without notice of the original contract.

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The Hon'ble Supreme Court of India and this Court held that when the plaintiff failed to prove his readiness and willingness to perform his part of the contract, the plaintiff is not entitled

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for decree of specific performance. Therefore, the above judgments are squarely applicable to the case on hand.

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16.The defendant caused notice on 17.07.2009 informing about the cancellation of the agreement for sale, whereas the plaintiff filed suit only on 17.10.2011, which itself would show that the plaintiff has no funds to pay the balance sale consideration and he was not ready and willing to perform his part of the contract. That apart, except averments made in the plaint, the plaintiff failed to prove the development made in the suit property subsequent to the agreement. Therefore, the plaintiff is not entitled for relief of specific performance.

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17.Insofar as the alternative relief is concerned, the plaintiff did not pray for alternative relief to return back the advance amount. The defendant categorically admitted that the plaintiff paid a sum of Rs.2,00,000/- on the date of the agreement i.e. 05.11.2008 as advance towards part of sale consideration and on 11.01.2009, further sum of Rs.3,00,000/was paid towards part of the sale consideration. In fact, in Ex.A3, legal notice caused by the defendant, the defendant categorically admitted the receipt of the above said payments. Therefore, the plaintiff is entitled for alternative relief to get back the advance amount with accrued interest though the plaintiff did not ask for alternative remedy to return the advance amount.

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18.In view of the above discussion, this first appeal is allowed and the judgment and decree passed by the learned Principal District Judge of Krishnagiri dated 28.01.2013 in OS.No.79 of 2011 is set aside. However, the plaintiff is entitled to get back his advance amount with interest. Accordingly, the defendant is directed to return the advance amount of Rs.5,00,000/- (Rupees Five Lakhs only) with interest at the rate of 6% per annum from the date of the agreement for sale to the plaintiff, within a period of eight weeks from the date of receipt of copy of this order. Consequently, connected miscellaneous petition is closed. No order as to costs.

Sd/-

Assistant Registrar

//True Copy//

Sub Assistant Registrar

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Lok

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