Dismissed

B.Sathyanarayana Chetty v. Srinivasamahal Tirupathiand 14 Others

Telangana HC14 Mar 2013AS/1574/1991

Case brief

AI extract

What is this about?

The appeal challenged the dismissal of a suit for specific performance of a lease agreement and damages. The court held the agreement unenforceable under Section 14(1)(b) of the Specific Relief Act due to vagueness regarding the construction of stalls. The claim for damages was dismissed due to lack of evidence, and the refund of earnest money was dismissed as not pleaded.

What did the court decide?

The plaintiff's appeal is dismissed; no order as to costs.

B.Sathyanarayana Chetty Vs Srinivasamahal… — Specific Performance | Telangana HC (2013)

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HON’BLE SRI JUSTICE K.G.SHANKAR

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Appeal Suit No.1574 of 1991

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Date: 14-3-2013

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Between

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B.Sathyanarayana Chetty ... Appellant/ Plaintiff

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and

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M/s. Srinivasa Mahal, Regd. Firm, Rep. by its Partner: S.Radha Bai (partner name amended as per order In I.A.1243/86, Sub-Court, Tirupathi); and 14 others

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... Respondents/

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Defendants

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HON’BLE SRI JUSTICE K.G.SHANKAR

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Appeal Suit No.1574 of 1991

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Judgment:

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This is a plaintiff’s appeal. The plaintiff filed the suit seeking for the specific performance of Ex.A-1 lease agreement and for delivery of possession of the property covered by Ex.A-1 lease agreement. The plaintiff sought for the alternative relief of the recovery of Rs.1,40,000/- as damages for breach of contract. While the plaintiff examined two witnesses on his side including himself as P.W.1, the defendants examined defendant No.1 as D.W.1 and examined two other witnesses. Exs.A-1 to A-8 and B-1 to B-3 were marked. After fullfledged trial, the learned trial Judge dismissed the suit without costs. Aggrieved by the same, the present appeal is laid.

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2. The plaintiff amended the plaint some time after filing the suit. The averments of the amended plaint briefly are:

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(a) The 1^st defendant is a registered Firm by name M/s Srinivasa Mahal. The defendants 1 and 2 started constructing a Cinema Theatre at Tirupathi under the name and style of Srinivasa Mahal. The plaintiff and the

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2^nd defendant entered into Ex.A-1 lease agreement dated 08-02-1978. The terms of the lease are that (a) a cool drinks stall, (b) a tea stall, (c) a tobacco stall and (d) cycle stand at the Theatre shall be leased out by the defendants 1 and 2 to the plaintiff for a period of 5 years from the date of the commencement of the exhibition of pictures at the Theatre. The lease was renewable for a further period of 5 years. The plaintiff was to deposit Rs.18,000/- in all and shall pay rent at Rs.25/- per day for all the four stalls put together. The defendants 1 and 2 received Rs.10,000/- as advance while the balance of Rs.8,000/- was agreed to be paid at the time of the commencement of the Cinema Theatre. It was also agreed that the plaintiff has the option of subleasing one or two stalls out of the four stalls.

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(b) While exhibition of the films commenced at the Theatre from 09-12-1983, the 2^nd defendant demanded the plaintiff to give a go-by to the agreement under Ex.A-1 and enter into a fresh agreement with new terms, viz., deposit of Rs.50,000/- and daily rent of Rs.50/-. The plaintiff did not agree for the suggestion of the defendants 1 and 2. The defendants, in fact, constructed only one stall in the Theatre and laid foundation for construction of another stall deliberately to commit breach of the terms of Ex.A-1 agreement.

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(c) On 05-9-1983, the 2^nd defendant wrote Ex.A-2 letter informing the plaintiff that the Theatre was

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transferred to the 3^rd defendant-Firm styled as M/s Srinivasa Exhibitors. The 2^nd defendant was claimed to be a partner of the 3^rd defendant-Firm.

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The 2^nd defendant further requested the plaintiff to contact the 3^rd defendant and enter into a fresh lease agreement. The plaintiff replied Ex.A-2 letter through Ex.A-3 on 12-91983 informing the 2^nd defendant that he would call on her on 16-9-1983. However, the

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2^nd defendant made herself scarce on that day.

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(d) The plaintiff is ready and willing to perform his part of the agreement by paying Rs.8,000/- constituting the balance of the deposit. The 2^nd defendant did not agree for the same. The plaintiff consequently got issued Ex.A-5 legal notice dated 29-9-1983 demanding specific performance of the lease agreement. As there was no response, the plaintiff got issued another notice on

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23-10-1983. The 2^nd defendant evaded to receive the notice. She however issued reply to Ex.A-5 notice through Ex.A-8 on 27-10-1983 claiming that in May, 1981, the plaintiff took back the deposit of Rs.10,000/- and got Ex.A-1 lease agreement cancelled. Aggrieved by the reluctance of the defendants 1 and 2 to abide by Ex.A-1, the plaintiff laid the suit seeking for specific performance of the lease agreement. Claiming that the plaintiff would derive a net profit of Rs.78/- per day had he been inducted in terms of the lease agreement, calculating the income

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for 5 years, the plaintiff calculated damages at Rs.1,40,000/-. The plaintiff consequently laid the suit seeking for specific performance of the lease agreement under Ex.A-1 and in the alternative, for damages at Rs.1,40,000/-.

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3. The defendants 1 and 2 admitted Ex.A-1 agreement of lease. They however claimed that the lease agreement was cancelled in May, 1981, when the 2^nd defendant informed the plaintiff that she was unable to proceed with the project. The 2^nd defendant further averred that the 1^st defendant could not complete the construction of the Theatre and that the entire project was transferred to the 3^rd defendant on 22-6-1981 consisting of as many as 11 partners including the 2^nd defendant. The 3^rd defendant completed the construction and commenced exhibition of the films. No stall was constructed except for a stall on the northeastern side of the Theatre. The 3^rd defendant decided not to construct any stalls at any place including on the north-eastern side of the Theatre.

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4. The 5^th defendant filed a written statement, which was adopted by the defendants 3 and 4. They claimed that on 22-6-1981, a partnership agreement was entered into by the 2^nd defendant and the defendants 4, 7 and others and constituted the 3^rd defendant-Firm.

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The agreement under Ex.A-1 is not binding on the 3^rd defendant and stood extinguished when the 3^rd defendant-Firm was constituted. That apart, the 3^rd defendant could not make construction of any stalls owing to objection from the concerned authorities under the Andhra Pradesh Cinematograph Act. The plaintiff is aware of the formation of the 3^rd defendant-Firm and the plaintiff consequently is estopped by acquiescence and conduct from seeking for the specific performance of the lease agreement. In view of the 3^rd defendant taking over the Cinema Theatre, Ex.A-1 lost its validity and enforceability, so much so, the suit deserves to be dismissed.

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5. During the pendency of the suit, the

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2^nd defendant died. The defendants 6 to 12 were brought on record as legal representatives of the 2^nd defendant. The 7^th defendant filed a written statement on behalf of the legal representatives of the 2^nd defendant claiming that the 2^nd defendant did not leave any moveable or immoveable properties and that no properties of the 2^nd defendant are in the hands of the defendants 6 to 12. They consequently claim that the suit is not maintainable against the defendants 2 and 6 to 12 once the 2^nd defendant died.

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6. After the filing of the appeal, the 4^th defendant died. The 4^th defendant was arrayed as respondent No.3. As the 3^rd respondent died, the respondents 13 to 15 were arrayed as the legal representatives of the 3^rd respondent/4^th defendant. However, the appeal stood dismissed as against the respondents 13 and 15 through orders dated 21-01-2011.

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7. The point for consideration is whether the plaintiff is entitled to specific performance or the alternative relief of money decree as prayed for ?

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8. Point:- The plaintiff seeks for the enforcement of a lease agreement. Ex.A-1 lease agreement admittedly was entered into between the plaintiff and the 2^nd defendant on behalf of the 1^st defendant-Firm. Thus, there is no dispute regarding the truth of Ex.A-1 lease agreement.

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9. However, the 2^nd defendant pleaded that Ex.A-1 stood cancelled at the mutual consent of the plaintiff and the 2^nd defendant. Inter alia, the 2^nd defendant admitted through his pleadings that he received Rs.10,000/- in advance from the plaintiff out of Rs.18,000/- payable by the plaintiff. It is the case of the 2^nd defendant that as the contract could not be executed, the plaintiff demanded the 2^nd defendant for the refund of the advance paid by him

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and that as the 2^nd defendant returned the advance of Rs.10,000/- to the plaintiff, the plaintiff cancelled Ex.A-1 lease agreement.

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10. The defendants explained the circumstances in which the lease agreement could not be implemented. It is the case of the 2^nd defendant that the 2^nd defendant indeed thought of constructing stalls in the north-eastern part of Srinivasa Mahal, that as the 2^nd defendant could not continue the project, he transferred the entire project to the 3^rd defendant-Firm and that as the Theatre went out of the hands of the 2^nd defendant, the lease agreement between the plaintiff and the 2^nd defendant had to be shelved. On the other hand, the plaintiff contended that the lease agreement under Ex.A-1 was never cancelled and that the same is liable to be enforced.

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11. As rightly submitted by Sri M.V.Suresh, learned counsel for the plaintiff, onus is upon the 2^nd defendant to show that the lease agreement under Ex.A-1 was cancelled and that the 2^nd defendant paid back the advance of Rs.10,000/- paid by the plaintiff to the 2^nd defendant; since the 2^nd defendant admitted Ex.A-1 in entirety but contended that Ex.A-1 was cancelled by mutual consent of the plaintiff and the 2^nd defendant.

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To prove his claim, the 7^th defendant examined himself as D.W.1. The evidence of D.W.1 can be neither here nor

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there. D.W.1, who is the 7^th defendant, is one of the sons of the 2^nd defendant. He had nothing to do with Ex.A-1 or the cancellation of the same.

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12. The defendants also examined D.W.2 to prove the alleged cancellation and alleged refund of the advance paid by the plaintiff to the 2^nd defendant. D.W.2 claimed that he was present when the

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2^nd defendant refunded Rs.10,000/- to the plaintiff. There is no entry anywhere in the records of the

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2^nd defendant showing that he refunded Rs.10,000/- to the plaintiff. There is no endorsement on Ex.A-1 that it was cancelled and that the plaintiff received Rs.10,000/from the 2^nd defendant. In the light of absence of documentary evidence, whether the evidence of D.W.2 can be accepted or not deserves to be considered. D.W.2 is admittedly a full time employee in the factory of the 2^nd defendant. Thus, he is interested in speaking on behalf of the 2^nd defendant. D.W.2 overstepped and claimed that he contributed Rs.2,000/- to the

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2^nd defendant for payment of Rs.10,000/- by the

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2^nd defendant to the plaintiff. The 2^nd defendant never urged so in his pleadings. The evidence of D.W.2 consequently cannot be accepted regarding its reliability. D.W.3 has nothing to do with Ex.A-1 and its cancellation. It is D.W.2 who alone was directly involved in the

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cancellation. Where the evidence of D.W.2 is not reliable, the cancellation of Ex.A-1 as alleged cannot be accepted. I hold that the defendants failed to prove that Ex.A-1 was cancelled by the 2^nd defendant and that the plaintiff received the advance of Rs.10,000/- paid by him.

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13. However, it is the case of the defendants that even if Ex.A-1 is true and valid, it cannot be enforced as the subject matter of the lease is unidentifiable, so much so, Ex.A-1 cannot be enforced. The defendants also contended that the Joint Collector refused to grant licence if stalls are constructed on the north-eastern side of the Cinema Theatre as evidenced by Ex.B-2 Proceedings of the Joint Collector. The defendants consequently contend that the lease agreement itself became frustrated, so much so, it became unenforceable in law.

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14. Section 14(1)(b) of the Specific Relief Act, 1963 (the Act, for short) envisages that a contract which cannot be enforced in view of the material terms of the contract is unenforceable. I am afraid that the present contract under Ex.A-1 falls within Section 14(1)(b) of the Act. The contract is very vague. It does not show that the stalls to be leased to the plaintiff are existing. The lease agreement does not show where the stalls are to be constructed. It further does not obligate the

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2^nd defendant to compulsorily construct the stalls. The reading of Ex.A-1 leaves an impression that if the

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stalls are erected in the Theatre, 3 such stalls + cycle stand should be let out to the plaintiff. In Suseela Devi v. Hari Singh^[1] , the Court held that if the performance of a contract is impracticable, the contract cannot be enforced. There is no doubt that the contract under Ex.A1 has become impracticable, so much so, the plaintiff cannot seek for the enforcement of the same. The plaintiff consequently is not entitled to specific performance of the agreement of lease. The trial court is justified in refusing to grant specific performance of the agreement of lease.

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15. The plaintiff claimed damages at Rs.1,40,000/as an alternative relief. There was no breach on the part of the defendants to entail the plaintiff to seek for the damages. The contract could not be performed first, on account of vagueness of Ex.A-1 and secondly, owing to matters beyond the control of the defendants. Added to it, the plaintiff is not able to satisfactorily explain daily income at Rs.78/-. There is no evidence to support the claim of the plaintiff regarding the estimate of damages.

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I consider that the plaintiff consequently failed in establishing the quantum of damages that he is entitled to. The plaintiff however would have been entitled to refund of the Earnest Money deposited by him. Curiously, the plaintiff did not even seek the same as an alternative relief. Where the plaintiff did not seek for such a relief, the trial court was justified in not decreeing the suit ordering

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the refund of Earnest Money deposited by him.

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16. In this background, the judgment of the trial court does not suffer from any infirmity. The evidence on record does not support the case of the plaintiff.

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The plaintiff consequently is not entitled to the reliefs as prayed for. The appeal therefore is found to be devoid of merits and is accordingly dismissed. However, there shall be no order as to costs.

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__________________ K.G.SHANKAR, J. 14^th March, 2013. Ak

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HON’BLE SRI JUSTICE K.G.SHANKAR

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Appeal Suit No.1574 of 1991 (P.D. Judgment)

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14^th March, 2013. (Ak)

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[1] AIR 1971 SC 1756

B.Sathyanarayana Chetty v. Srinivasamahal Tirupathiand 14 Others

Case brief

What is this about?

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B.Sathyanarayana Chetty v. Srinivasamahal Tirupathiand 14 Others

Case brief

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