Dismissed

Vukkadala Ramamurthy v. Gandrala Subbarao

Telangana HC14 Sept 2011AS/61/2003

Case brief

AI extract

What is this about?

The court dismissed the appeal and cross objections. Holding that the defendant's admission of receiving consideration as 'sale consideration' proved the agreement's genuineness. The court found no evidence establishing the property was joint Hindu family property, rejecting the defense. Damages for default were dismissed due to lack of evidence of loss.

What did the court decide?

Both the appeal and the cross objections are dismissed; no order as to costs.

Vukkadala Ramamurthy Vs Gandrala Subbarao — Specific Performance | Telangana HC (2011)

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THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR

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APPEAL SUIT NO.61 OF 2003 AND CROSS OBJECTIONS SR.NO.15316 OF 2003

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Date: 14.09.2011

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APPEAL SUIT NO.61 OF 2003: Between: Vukkadala Ramamurthy and others …..Appellants And Gandrala Subbarao …..Respondent CROSS OBJECTIONS SR.NO.15316 OF 2003: Between: Gandrala Subbarao …..Cross Objector And Vukkadala Ramamurthy and others …..Respondents

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THE COURT MADE THE FOLLOWING:

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THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR

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APPEAL SUIT NO.61 OF 2003 AND CROSS OBJECTIONS SR.NO.15316 OF 2003

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COMMON JUDGMENT:

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This appeal is directed against the Judgment and decree in O.S.No.34 of 1995, dated 29.11.2002, passed by the learned Principal Senior Civil Judge, Eluru, West Godavari District (for short, lower court).

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2. The appellants herein are the defendants and the respondent herein is the plaintiff before the lower court. The suit filed by the plaintiff for specific performance of contract directing the defendants to execute regular sale deed in pursuance of the sale agreement dated 5.2.1992 has been decreed. The plaintiff also sought damages for a sum of Rs.50,000/- for committing default and delay in execution of the sale deed, but the same was dismissed by the lower court. Challenging the same, the plaintiff filed cross objections SR.No.15316 of 2003.

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3. For the sake of convenience, the parties will be referred to as they are arrayed in the lower court.

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4. The brief facts of the case are as follows:

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The property is a tiled house with open space on South, West and North. The front portion of it is Madras-terraced portion. The total extent is 725 square yards in T.S.No.352 of Eluru Municipality. Originally the property belonged to one Gundrala Narayanamma and her son G.Bhaskara Rao. Out of 725 square yards, G.Bhaskara Rao had residential premises covering an extent of 150 square yards on the southern side and the same was leased out to the plaintiff in the year 1973 on a rent of Rs.200/- per month. The first defendant took premises of G.Bhakskara Rao and his mother (marked in red

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colour as XYDK in the plan) on lease for carrying on venkatagiri saree business. Subsequently, the first defendant purchased under different sale deeds on different dates total extent of 725 square yards. Out of 725 square yards, the first defendant had been in physical possession of 150 square yards (marked as XYDK in red colour in the plan) for his business purpose and the remaining about 53 square yards (marked in yellow colour) covering the office room and its eastern portion touching the road, was in the possession of the plaintiff as tenant of the said G.Bhaskara Rao and his mother Narayanamma.

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The defendants were living together. The first defendant acquired the above mentioned property with his own self-earnings. The first defendant offered to sell the property of about 515 square yards (marked as ABCDEFG in blue colour in the plan) and the plaintiff agreed to purchase the same, as he was already in possession of the same. The price was settled at Rs.648/- per square yard including the vacant site and the constructed portion of the building site. The total price was arrived at Rs.3,33,720/- for the area of 515 square yards. The office portion of the terraced upstair room and its corresponding downstair room with vacant site (marked as BX in the plan), immediately to the east of it touching the municipal road, are excluded from the property and the plaintiff agreed to deliver vacant possession of the same (marked as BXKC in yellow colour in the plan) to the first defendant. In pursuance of the said agreement, the plaintiff gave possession of the office room and the vacant site covering an extent of 53 square yards adjoining it. Later, when the time of sale agreement, it was represented that the second son of the first defendant was a minor and the first defendant had executed the sale deed as his guardian. At the time of agreement of sale, the first defendant having received a sum of Rs.2,50,000/- as advance from the plaintiff, signed for himself and also for his second son. The first son of the first defendant has also signed on the agreement. The first defendant subsequently received a sum of Rs.20,000/- on 16.3.1992, Rs.30,000/- on 1.6.1992 and another Rs.20,000/- on 16.8.1992 and endorsed the said

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payments on the sale agreement in his own handwriting and also delivered possession of his two title deeds dated 1.3.1988 and 29.6.1988 relating to the property to the plaintiff. The plaintiff was always ready and willing to perform his part of the contract and requested the defendants to receive the balance sale consideration of Rs.13,720/- and subsequently issued registered notice. As a reply to the notice, the defendants denied the execution of the sale agreement through reply notice dated 20.8.1993. Thereafter, the plaintiff issued another notice to the defendants on 4.10.1993 and the defendants sent a reply on 19.10.1993. Later, the plaintiff filed a suit for specific performance.

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5. It is the case of the plaintiff that he had incurred Rs.60,000/- for the improvements and repairs made to the building and fixing iron gate with two doors and that he has suffered due to the wrongful refusal to complete the sale transaction in accordance with the terms of the sale agreement and assessed his damages at Rs.50,000/-. The plaintiff filed a suit for specific performance seeking a direction to the defendants to execute a regular sale deed for the property in question and also for damages and costs.

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6. The defendants 1 and 2 filed a written statement denying the execution of the agreement of sale and further averred that the defendants 2 and 3 are the sons of the first defendant and they are members of a joint Hindu family and the first defendant is the manager of joint Hindu family, and the entire property was purchased with the funds of joint Hindu family and that the third defendant was a major on the date of alleged sale agreement on 5.2.1992 and that the property was never sold to the plaintiff. Their further plea is that the plaintiff continued to be a tenant, but failed to pay the rents of Rs.5,000/per month and that all of a sudden, on 5.2.1992 at about 10.00 p.m., the plaintiff called them to their godown and produced a prepared sale agreement and asked the defendants to sign without giving any time to the first defendant to think over the matter. Though the defendants 1 and 2 have admitted that they received a sum of Rs.2,50,000/- on 5.2.1992, their specific case is that they received the said amount towards arrears of rent @ Rs.5,000/- per

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month. The subsequent payments received by the first defendant i.e. Rs.20,000/- on 16.3.1992, Rs.30,000/- on 1.6.1992 and Rs.20,000/- on 16.8.1992 have been admitted, but their case is that the plaintiff made those payments with a view to simply gain time. The plaintiff, on his own admission, has not chosen to pay the entire balance sale consideration of Rs.83,720/- by 31.3.1992 i.e. within the stipulated time as per agreement.

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7. The third defendant has also filed separate written statement. His specific case is that the first defendant had no right or authority to represent him by describing him as a minor and that he never agreed to sell his interest in the property and that the plaintiff is aware of the same fact, but still induced the first defendant to join the third defendant by falsely describing him as a minor. His specific case is that the property had been acquired by the first defendant with the joint Hindu family funds consisting of the first defendant and his younger brother that he has given a separate reply dated 20.8.1993 through his advocate. His further case is that the plaintiff agreed to pay monthly rent of Rs.5,000/- for the portion of the building in his occupation, but not paid any amount towards rent upto the date of agreement of sale and that the plaintiff is also liable to pay rent or damages for use of occupation for four years which comes to Rs.2,40,000/- and to pay interest @ 18% per annum and therefore, the amounts paid by the plaintiff is towards the arrears of rent and not for the advance sale consideration amount.

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8. Based on the pleadings, the lower court framed the following issues:

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(i) Whether the plaintiff is entitled for specific performance of the agreement of sale dated 5.2.1992?

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(ii) Whether the plaintiff is entitled for damages for Rs.50,000/- from the defendants for committing the default and delay in execution of the sale deed?

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(iii) Whether the time was the essence of the contract and the plaintiff is not entitled for specific performance for his unreadiness?

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(iv) Whether the suit is barred by limitation?

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(v) To what relief?

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9. On behalf of the plaintiff, P.Ws.1 to 3 were examined and Exs.A-1 to A- 33 were marked. One behalf of the defendants, the first defendant was examined as D.W.1, the second defendant was examined as D.W.3, the third defendant was examined as D.W.4 and vendor of the defendants G.Bhaskara Rao was examined as D.W.2 and Exs.B-1 to B-13 were marked.

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10. The lower court having considered the oral and documentary evidence, came to the conclusion that the agreement of sale is genuine and that the plaintiff has paid the amounts of Rs.2,50,000/- and subsequently other amounts as per the endorsements under Exs.A-6 to A-8 and that the property is not the joint Hindu family of the first defendant and his brother and accordingly, decreed the suit. Further, the lower court dismissed the claim of the plaintiff for damages.

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11. Sri A.Ramalingeswara Rao, the learned counsel for the appellants/defendants submitted that the defendants and the plaintiff were tenants under common owner G.Narayanamma and the first defendant has purchased the properties under different sale deeds. The portion occupied by the plaintiff is also covered by the sale deeds dated 1.3.1988 and 29.6.1988 and that the plaintiff himself helped the first defendant in purchasing the properties and after the purchase of the properties, the plaintiff became the tenant of the first defendant, but he was not paying rents to the first defendant. His main submission is that on the date of alleged agreement of sale i.e. on 5.2.1992, the plaintiff paid an amount of Rs.2,50,000/- towards arrears of rent and obtained the signatures of the first defendant and his elder son and also asked the first defendant to sign on behalf of his second son showing him as a minor in the agreement of sale. His further submission is that since the monthly rent was Rs.5,000/- per month, the rough calculation of the arrears of

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rent with interest come to Rs.2,50,000/- and that first defendant and his elder son were made to believe that they were receiving only the arrears of rent and under the said impression they had signed on the agreement of sale and that till they received a legal notice on 5.3.1993, they had no knowledge that their signatures were obtained on an agreement of sale and that the said notice was a surprise to them and that they were deceived by the plaintiff and therefore, they gave suitable reply to the plaintiff. His further submission is that an agreement of sale must be signed by both the parties, but this agreement of sale is not signed by the plaintiff and father’s name of the plaintiff was left blank and that when the first defendant purchased the property in the year 1988, the value of the property was only Rs.2,70,000/and the value of the property was shown in the agreement of sale as Rs.3,33,720/- and that amount is much less than the market rate prevailing during the year 1992 and that these circumstances go to show that the agreement of sale is not genuine one. His further submission is that the plaintiff was not always ready and willing to perform his part of contract and there is much delay in filing the suit and that the plaintiff issued legal notice on 5.8.1993 and filed suit on 11.2.1995 i.e. after 1½ years after the date of legal notice and there is no explanation from the plaintiff for the said delay. His further submission is that when the property belongs to a joint Hindu family and when the third defendant is a major and when he is not a party to the agreement of sale, the third defendant is not bound by the agreement of sale and the first defendant has no right to sell the share of the third defendant. Thus his submission is that even if for any reason the agreement of sale is accepted as true and genuine, the relief of 1/3^rd share of the third defendant in the said property cannot be decreed in favour of the plaintiff. His last submission is that according to Section 55(4) of the Transfer of Property Act, 1882, until the sale is completed, the seller is entitled for the rents and that admittedly no rent was paid by the plaintiff from the date of agreement and that equitable relief of specific performance cannot be granted where there are suspicious circumstances with regard to execution of the agreement of sale.

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12. In support of his contentions, he has relied upon the Judgments of the Apex Court in cases of P.V.Joseph’s Son Mathew V. Kuruvila’s Son^[1] , A.C.Arulappan V. Smt.Ahalya Naik^[2] and M.P.Mathur and Ors. V. D.T.C. and Ors .^[3] .

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13. Sri V.L.N.G.K. Murthy, the learned counsel for the respondent/plaintiff submitted that the first defendant admitted his signature in the agreement of sale and that the endorsements made in Exs.A-6 to A-8 are in his own handwriting. His further submission is that recitals of Exs.A-6 to A-8 go to show that the first defendant had categorically admitted in those documents that the amounts received by him were towards part of sale consideration amount and not towards the arrears of rent. The learned counsel had taken me through the evidence and recital of the documents marked on either side and further submitted that recital of the agreement of sale and endorsements categorically reveal that the amount received by the defendants is towards the advance of part of sale consideration and that the balance of amount to be paid was only Rs.13,720/-. His further submission is that the defendants have subsequently introduced a theory of joint Hindu family property, but the admissions made by the first defendant himself reveal that there was no joint Hindu family when the properties were purchased by him. It is also argued that a reading of the reply notice given by the defendants and the evidence of D.W.1 reveal that they are self contradictory and prove that the version of the defendants is false. His last submission is that D.W.2 deposed that the rent per month was only Rs.400/- which is contradicting the version of the defendants that rent was Rs.5,000/- per month. In support of his contentions, he has relied upon the Judgment of the Apex Court delivered in case of Makhan Singh V. Kulwant Singh^[4] . Sri V.L.N.G.K. Murthy, in reply, submitted that merely because the signatures of sons of the first defendant have been taken on the agreement of sale, it cannot be said that the property is the joint family property of the defendants or that the first defendant

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acquired the same with the nucleus of the joint Hindu family. He has taken me through Exs.A-2 and A-3-sale deed under which the D.W.1 has purchased the property in support of his contention. He further submitted that the property, which was in the possession of the plaintiff, has been given to the first defendant in pursuance of the agreement of sale and it shows that the agreement of sale was acted upon. All the circumstances show that the agreement of sale is a genuine one and the defendants have taken major part of the sale consideration and when only a part amount was to be received by the defendants, the defendants refused to execute the sale deed and that the lower court rightly decreed the suit. It is also submitted that defendants by not executing the registered sale deed caused loss and mental agony to the plaintiff and therefore he was entitled for the damages as prayed by him.

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14. The points that arise for consideration are:

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(i) Whether the agreement of sale is genuine one?

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(ii) Whether the suit schedule property is a joint Hindu family property? And

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(iii) Whether the plaintiff is entitled for the damages as claimed by him?

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POINT NO.1:

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15. It is not in dispute that originally entire property belonged to G.Bhaskara Rao, a part of it was leased out to the plaintiff and another part of it was leased out to the first defendant. The first defendant took the premises for carrying on saree business and later he has purchased the property under three different sale deeds. After the first defendant had purchased the property, the plaintiff continued in a portion of the property as tenant. Admittedly, the property covered by the sale deeds dated 1.3.1988 and 29.6.1988 was in the possession of the plaintiff. It appears that the plaintiff and the first defendant were closely moving and it is the case of the first defendant that the plaintiff himself helped him in purchasing the property.

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16. It is clear from the evidence that the first defendant admitted that he has received an amount of Rs.2,50,000/- on the date of agreement of sale. It is also clear from his evidence that the plaintiff told him that he wanted to purchase the property. It has to be seen that the first defendant himself admitted that Exs.A-6 to A-8 are in his own handwriting. He has categorically deposed as follows:

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“It is true, on 5.2.1992 under Ex.A.5, I have received a sum of Rs.2,50,000/-. I have also collected Rs.20,000/- on 16.3.1992, Rs.30,000/- on 1.6.1992 and another Rs.20,000/- on 16.8.1992. The handwriting on part payment endorsement Ex.A-6 to A-8 belongs to me. I have mentioned in those endorsement that the amount represents the balance of sale consideration.”

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In view of these categorical admissions made by the first defendant, now it has to be seen whether he could be permitted to say that what was received by him was not either towards the advance of sale consideration or balance of sale consideration, but it is only towards the payment of rent. It has to be seen that as seen from the recitals of the reply notice sent by the first defendant, he has not admitted the receipt of Rs.2,50,000/- and the subsequent payments. More-over in the said notice, which was issued on behalf of the defendants 1 and 2, it is stated that the plaintiff has to pay the defendants 1 and 2 a rent of Rs.5,000/- per month since 1988 which comes to Rs.2,50,000/-. Thus, it is clear that the version of the defendants is not consistent. The defendants having received the amount, have denied the receipt of advance amount in their notice, but when D.W.1 entered into witness box, he has admitted the receipt of the amount paid on the date of agreement of sale. The version of the defendants that they were under the impression that they were receiving arrears of rent also is not acceptable in view of the categorical endorsements made by the first defendant in Exs.A-6 to A-8. A reading of the Exs.A-6 to A-8 makes it crystal clear that D.W.1, in his own handwriting, endorsed that they have received a part of the sale consideration amount and not the arrears of rent. Therefore, there cannot be any doubt to say that the amounts received by the first defendant were towards advance of sale consideration or part of the sale consideration amount and therefore, the version of the defendants on

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this aspect cannot be accepted. There is nothing to say that the agreement of sale is not genuine. The defendants have failed to prove their contentions. Their case is not probable and against normal human conduct. The other submissions made on behalf of defendants are also not convincing. It has to be seen that the agreement of sale was acted upon and a portion of the property in the possession of plaintiff was handed over to the first defendant in pursuance of the agreement of sale. It has to be seen that there is considerable variance between the value of the property when first defendant purchased in 1988 and when he sold it in 1992. There is an increase of about Rs.60,000/-.

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POINT NO.2:

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17. Now coming to the aspect whether the property is the joint Hindu family property purchased with the ancestral nucleus of the first defendant and his brother. The evidence of D.W.1 itself is not satisfactory. The first defendant, who is examined as D.W.1, categorically deposed that he came down to Eluru from Venkatagiri for eking out his livelihood and that he does not remember the extent of land as his family had at Venkatagiri, but however, admitted that it was a little extent. He further deposed that the said land was sold when he was minor and he does not know what was the consideration received for that land. According to D.W.1, his brother died about 1½ years ago (he was examined before the lower court on 1.12.2001). He admitted that a house in assessment No.3593 stands in the name of the wife of his brother and another house in his own name. He further deposed that he has been paying income tax for the business at Eluru in his own name and his brother was paying income tax for the business in his own name and they did not have any joint account in any bank. Thus, the evidence of D.W.1 itself reveals that the D.W.1 and his brother were doing separate business. There is no evidence in this case to say that the first defendant purchased the property with the nucleus of their joint Hindu family. In the absence of any evidence to show that there was nucleus of joint Hindu family, it is difficult to draw a presumption. Initial burden lies on the defendants to prove that there

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was nucleus of joint family which they failed to prove. More-over, the admissions made by D.W.1 himself clearly go to show that there was no nucleus of joint Hindu family along with his brother. It is not the case of the first defendant that he and his sons jointly purchased the property and the theory of lending is also not pleaded by him. Therefore, there is nothing to say that third defendant get 1/3^rd share by his birth or that the first defendant had no right to sell the property. Merely he came, the elder son of first defendant signed in the agreement of sale, the property would not become joint Hindu family property. It has to be seen that first defendant has been doing venkatagiri saree business.

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18. In case of Makhan Singh V. Kulwant Singh (4 supra), the Apex court held as follows:

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“The legal principle, therefore, is that there is no presumption of a property being joint family property only on account of existence of a joint Hindu family. The one who asserts has to prove that the property is a joint family property. If, however, the person so asserting proves that there was nucleus with which the joint family property could be acquired, there would be presumption of the property being joint and the onus would shift on the person who claims it to be self-acquired property to prove that he purchased the property with his own funds and not out of joint family nucleus that was available.”

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19. Therefore, in view of the facts and circumstances, I hold that the defendants failed to prove their case and no presumption can be drawn that the property is a joint family property of the defendants.

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POINT NO.3:

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20. As far as the damages claimed by the plaintiff in the counter claim are concerned, having regard to the facts and circumstances of the case, I am of the view that the lower court has rightly rejected the claim for damages and there is no evidence to show that the plaintiff sustained any loss or that he is entitled to any damages. Therefore, there are no merits in the appeal and also in the cross objections.

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21. Accordingly, both the appeal and the cross objections are dismissed. There shall be no order as to costs.

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______________________________ JUSTICE B.CHANDRA KUMAR

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14^th September, 2011 Tjmr

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THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR

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APPEAL SUIT NO.61 OF 2003 AND

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CROSS OBJECTIONS SR.NO.15316 OF 2003