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Judgment
M. Chockalingam, J.—This suit has been filed by the plaintiffs for specific performance of the agreement dated 13.5.1981 and direct the
defendants to execute the sale deed in favour of the plaintiffs or their nomines as per the terms of the agreement on payment of the balance of
consideration of Rs.4,90,896/- and if the defendants fail to execute the sale deed, direct them to put possession of the suit property with other
reliefs as mentioned in the plaint.
The plaint averments are as follows:
The first defendant entered into an agreement dated 13.5.1981 with the plaintiffs and their mother and one S. Padmanabhan making the first
defendant''s wife and children as partners to safe guard the interest of the first defendant in the deed to sell the property situate at Nos.15, 16 and
17, Wallers Road, Madras for a consideration of Rs.13,00,000/- and received an advance of Rs.2 lakhs from the plaintiffs and their mother and
handed over all the original documents as collateral security for the advance paid. The first defendant undertook to demolish the superstructure
within two months for starting their construction work. Some portion of the building was not demolished since the same was under attachment as
per the order of the court. The contractor is still occupying the entire area for completing the demolition work. The plaintiffs submitted the building
plan to M.M.D.A. and the Corporation Authorities and paid demolition fees. Because of the attachment proceedings the work was stopped and
the first defendant promised to get an order raising the attachment proceedings in OS No.4 of 1984 and therein the first defendant had given an
undertaking not to sell the Wallers Road property and commercial accommodation at the Blue print stage was stopped. Apart from Rs.2 lakhs, the
first defendant received further payments from the plaintiffs under stamped receipts for a sum of Rs.1,44,500/- on various dates ending 6.2.1982.
The first defendant was not in a position to repay the principal and interest and postponing the renewal of the pronotes. As surety and Guarantor
the first plaintiff paid the principal and interest and got necessary endorsements and receipts for claiming from the first defendant. The total amount
under the pronotes with interest comes to Rs.1,18,336/- as on July, 1987 for which also the original documents stands as collateral security as per
the understanding and arrangements. The payment through the discharge of pronotes to clear the title kept as collateral security through the first
plaintiff comes to Rs.1,89,236/- which can be treated as further payments apart from Rs.2 lakhs under the agreement and Rs.1,44,500/- paid after
the agreement. Therefore, the total payment as per the agreement comes to Rs.5,33,736/- out of the total consideration of Rs.13 lakhs. Under the
agreement of sale, the first defendant wanted to have about 2000 sq. ft. in the first floor for his own use agreeing to pay a reasonable price a little
less than the prevailing market price mutually agreed upon. The plaintiff undertook to clear the balance of consideration within 18 months from the
date of handing over the vacant site for construction and if the plaintiffs fail to pay within 18 months, the plaintiffs have to pay interest at 18% for
the balance of consideration after working out of the cost and giving credit for the 2000 sq. ft. in the first floor. The first defendant has to execute
the sale deeds to the plaintiffs or to their nominees or allottees for the proportionate considerations paid as per the agreement. The plaintiffs''
mother Indrani died on 5.2.1983 leaving the plaintiffs as class-1 heirs since their father released his interest in the estate of S. Indrani in favour of
the plaintiffs. S. Padmanabhan who also died, was only a working Engineer for the scheme under the first plaintiff. The first defendant, all of a
sudden, sent a notice dated 25.6.1987. For that notice the plaintiffs'' Advocate sent a reply dated 3.7.1987 stating the correct state of affairs.
Under the partnership deed dated 13.5.1981, the other partners, Mrs. D''Monte and her children on their retirement are entitled to share the profit
and loss. In the rely dated 3.7.1987 the plaintiffs claimed Rs.2,77,368/- as loss from the defendants. Further the first plaintiff has discharged the
pronotes executed by the first defendant which comes to Rs.1,18,336/-. Therefore the total investment of the plaintiffs for the purpose of
partnership as on July, 1987 come to Rs.9,45,236/- on the retirement of the partners the defendants controlling 50% share have to pay
Rs.2,41,200/- + Rs.34,168/- to the plaintiffs as on July, 1987. The first defendant sent a rejoinder dated 20.8.1987. After this rejoinder the
plaintiffs were negotiating with the first defendant and the first defendant wanted to give up their family claim of profit if a lump-sum is paid into the
credit of an appeal against the company petition and wanted to share the profit in appreciation of the land value if sold to third parties. The talks
were never ending due to third parties fluctuating offer for the land due to daily appreciation. There is a part performing for the agreement dated
13.5.1981. The plaintiffs are entitled to file a suit for specific performance under Article 54 of the Schedule of the Limitation Act. The plaintiffs are
still ready and willing specifically to perform the agreement on their part of which the defendant has had notice. Hence, the suit has got to be
decreed as prayed for in the plaint.
The averments in the written statement filed by the first defendant are as follows:
Since the suit has been filed on 20.2.1990 after a lapse of 9 years, the suit is barred by limitation and in view of the facts that there is no
compliance with Section 16(C) of the Specific Relief Act, the suit is liable to be dismissed in limine and the suit is liable to be dismissed in limine on
the ground that the contract of sale is between the first defendant on the one hand and 13 persons on the other hand as joint purchasers. Of the 13,
the third purchaser S. Indirani is no more and the 8th purchaser also is no more. The purchaser No.5 is also no more. Of the rest the purchasers 7
to 13 have abandoned the contract consequent on the termination of the agreement between them to form a partnership. The plaintiffs were never
ready and willing to perform the obligation on the part of the purchasers. As a matter of fact, the plaintiffs were never in the scene and it was their
father A. Narayanaswamy who acted in the name of the plaintiffs who were then studying in colleges. The plaintiff''s father is a dealer in real estate
and he has entered into the contract in the name of the plaintiffs. There is no legal bar to implement an agreement entered into prior to the order of
attachment. The plaintiffs have not even advanced any reason as to why they did not take any step. The plaintiffs have no resources of their own. It
is plaintiffs'' father who has been speculating and the very contract itself was a piece of speculation made by the plaintiffs'' father. In the prayer it is
said that the balance of sale consideration remaining unpaid is Rs.4,90,896/-. This is the amount the plaintiffs state that they are willing to pay on
the date of the plaint. Nowhere have they alleged that they were ready and willing to pay this sum and called on this defendant to execute the sale
deed. The allegation that the amount of Rs.4,90,894/- is due is a palpable falsehood. The plaintiffs claim that they have paid Rs.2 lakhs as advance
and they have paid subsequent on the date of agreement Rs.1,44,500/-. They have further paid to N. Valakrishnan a sum of Rs.1,18,336/- and
claim interest of Rs.70,800/-. The sum so paid is Rs.5,33,736/-. The non payment of part of this amount is implied in the very averment because it
is claimed that a sum of Rs.70,000/- represent interest on amount said to have been paid to Balakrishnan. What is relevant in this context is that
even assuming that there was a payment of Rs.5,33,736/- towards the sale consideration what remains is Rs.7,66,264/-. The plaint is silent about
making any offer of this amount at any point of time. The loss in the alleged partnership between the plaintiffs and the defendants 2 to 8 is
Rs.2,75,368/- and that this defendant is liable to pay this amount and if this amount is also brought to the account of this defendant the balance
remaining is Rs.4,40,896/-. According to the averment in the plaint this amount was not paid and this amount being a notional loss of a non existent
firm to which even according to the plaint averment this defendant was not a party has been accounted in relation to the sale consideration. The
only basis for such accounting is that the other defendants are the plaintiffs'' benamidars in the partnership firm. The very claim is illegal. The
payment of Rs.2 lakhs as advance and the payment of Rs.1,44,500/- are all denied. The accounting for Rs.1,89,236/- as if the plaintiffs had
cleared the promissory notes for Rs.40,000/- from N. Balakrishnan is really extraordinary. The claim for this amount as if paid to N. Balakrishnan
and that has been adjusted in the sale consideration is indeed a deliberate falsehood. In the absence of a specific authorisation to adjust any amount
due and in the absence of any order of binding nature issued by any court of law the claim for adjustment of amount said to have been paid to
promissee in the sale consideration cannot be considered as discharging the obligation of the purchaser under the contract of sale. A payment if not
authorised is not binding and a payment to a third party if voluntary is also not binding. This defendant denied that the original documents were
deposited as collateral security for the advance paid and other amount to be paid. It is true that the demolition work was started, but then as the
contract was abandoned that work also was stopped and this defendant continues to be in possession of the suit property. The contractor is still
occupying the entire area is a false one. The agreement being prior to the order of attachment there is no legal bar against the plaintiffs to enforce
the agreement. The plaintiffs did not pay demolition fee and an amount for the preparation of plan and for approval expenses. The allegation that
this defendant postponed the renewal of the promissory note as security and as guarantor the plaintiffs paid the principal and interest before the
expiry date and got the necessary endorsements and receipt for claiming from the first defendant is denied as false. The claim for interest of
Rs.70,800/- is unsustainable and illegal. The allegation that the plaintiffs stood guarantee for the repayment of the loan under the promissory note is
denied. The promissory notes were time barred. The plaintiffs were not authorised to make payment to the promissee. The statement as made by
the plaintiffs in the plaint that they undertook to clear the balance of sale consideration within 18 months from the date of handing over of the vacant
site for construction is not correct. The clause relating to payment of interest is also mis-interpreted. This defendant is not liable to execute the sale
deed either to the plaintiffs or to their nominees or allottees. The allegation that the first plaintiff is the main party to arrange the negotiation of the
purchase and the plaintiffs alone paid the entire consideration is not admitted and is a matter between the partners. The other partners are not
bound to contribute any capital is also not correct. The statement in the notice dated 25.6.1987 is true. Mrs. D''Monte and her children retired
from the partnership is not admitted. The plaintiffs'' claim of Rs.2,77,368/- against this defendant is unsustainable in law. In any event the claim
cannot be made against this defendant because this defendant is not a party to the partnership. It is denied that there were negotiations between the
plaintiffs and the first defendant and it is also denied that this defendant wanted to give up their family claim of profit if a lump sum is paid into the
credit of an appeal against the company petition and wanted to share the profit in appreciation of the land value if sold to third parties. The claim
that there is part performance of agreement is totally incorrect. The allegation that the plaintiffs are entitled to file a suit for specific performance
under Article 54 of the schedule of the Limitation Act is also denied. It is not admitted that the defendants 2 to 8 are benamis for this defendant. In
the partnership there was loss and that even assuming there was loss, such loss could be mulcted on this defendant. Such loss could be adjusted
against the sale consideration. Hence, for all the above reasons, the suit has to be dismissed with costs.
The first defendant filed further additional written statement stating that for the plaint filed in 1990, now only by way of amendment in 1995, the
plaintiffs state about their readiness and willingness to specifically perform the contract; that it exposes the lack of bona fides on the part of the
plaintiffs and it shows that from the inception they have not been so ready; that the relief for damages as an alternate remedy is for breach of
contract dated 13.5.1981, and hence, this claim is barred by limitation because the amendment was allowed on 23.4.1998. Hence the claim is to
be rejected.
On the above pleadings by the respective sides, the following issues were framed:
Whether the suit is barred by limitation?
Whether the suit is liable to be dismissed for want of compliance with Section 16(c) of the Specific Relief Act?
Whether the suit by three out of 12 purchasers for specific performance of the contract where 9 purchasers have repudiated the contract
maintainable?
Whether the plaintiffs were ready and willing to perform their part of the contract dated 13.5.1981?
Is it true that the plaintiffs have abandoned the contract?
Is it true that the plaintiffs paid a sum of Rs.2,00,000/- as advance?
Whether the payment of Rs.1,44,500/- alleged by plaintiff is true?
Whether the plaintiff is entitled to adjust the sum payable under the promissory note dated 23.8.1981, 21.12.81 and 5.1.1982 towards the sale
consideration?
Whether the claim for interest in the sum of Rs.70,800/- sustainable?
Whether the plaintiffs have resources to purchase the suit property?
Whether the plaintiff has carried out his part of the agreement?
Whether the defendants 2 to 8 are not name-lenders for 1st defendant?
Whether the profit or loss has to be carried out in the account of the first defendant?
To what relief is the plaintiff entitled to?
ISSUES 1 TO 14:
The plaintiffs have filed this suit seeking the relief of specific performance of an agreement of sale dated 13.5.1981 or in the alternative to direct the
defendants to specifically perform the terms of the joint venture agreement dated 13.5.1981 on payment of balance of Rs.4,90,896/- or in the
alternative to direct the defendants to pay to the plaintiffs a sum of Rs.8,09,204/- with interest at 24% from the date of plaint till the date of
realisation and consequential injunction. The contesting first defendant has opposed the suit on the grounds that the suit is hit by law of limitation;
that the suit is liable to be dismissed since the contract of sale is between the first defendant on one hand and the 13 persons on the other hand as
joint purchasers; that the plaintiffs were never ready and willing to perform their part of the contract; that a payment if not authorised, is not binding,
and a payment to a third party if voluntary, is also not binding; that the agreement being prior to the order of attachment, there is no legal bar
against the plaintiffs to enforce the agreement; that the first defendant is not liable to execute the sale deed either to the plaintiffs or to their
nominees or allottees; that the relief for damages as an alternate remedy is for breach of contract dated 13.5.1981; and thus, the suit has to be
dismissed.
On the side of the plaintiffs, P.W.1 was examined, and Exs.P1 to P9 were marked. On the side of the defendants, D.W.1 was examined and
Exs.D1 to D7 were marked.
Arguing for the first plaintiff, the learned counsel would submit that the plaintiffs have filed the suit for specific performance of an agreement of
sale dated 13.5.81 marked as Ex.P2 entered into with the first defendant who is the owner of the suit property situated in Door No.15, 16 and 17,
Wallers Road, Madras 2; that the plaintiffs, their mother Indrani, one Padmanabhan along with the wife of the first defendant Mrs. D''Monte and
the defendants 2 to 8, who are the children of the first defendant entered into an agreement of sale with the first defendant; that on the same day,
the plaintiffs, their mother Indrani, Mr. Padmanabhan and Mrs. D''Monte and her children constituted a partnership firm for construction of a
commercial complex in the suit property; that the said document is marked as Ex.P1; that a perusal of the same would clearly reveal that the
defendants 2 to 8 were not required to invest any amount and were taken as partners at the suggestion of the first defendant for protecting his
interest, as per the partnership deed; that the first defendant as DW1 has categorically admitted this fact also; that the plaintiffs, their mother and an
Engineer Padmanabhan were required to invest for the purchase of the suit property and also for construction purposes; that as per Ex.P2 sale
agreement, the first defendant received Rs.2.00 lacs on the date of the agreement; that he should demolish the existing building within a period of
two months from the date of the agreement and hand over possession; that the balance of consideration was payable within 18 months from the
date of delivery of vacant site; that the first defendant demolished only a part of the property, and he could not proceed with the demolition in view
of an order of attachment by the court in the proceedings initiated by his creditors; that in view of the non completion of the demolition, the demand
for payment of the balance of consideration has not arisen; that despite the same, the plaintiffs have paid major part of the consideration; that even
if there was any delay in payment, the balance of sale consideration shall carry interest at 18% per annum; that without delivering vacant
possession, the first defendant sent a notice under Ex.P5 on 25.6.1987 and informed that the agreement of sale was abandoned and unenforceable
for the lapse of time; that on receipt of the said notice, the plaintiffs through their counsel sent a reply on 3.7.87 under Ex.P4; that the first
defendant sent Ex.P5 rejoinder on 20.8.87; that since the first defendant did not come forward with the execution of the sale deed, the plaintiffs
were constrained to file the suit; that the plaintiffs have proved that they were ready and willing to perform their part of the contract from the date
of agreement till date, and thus, the plaintiffs have come forward to get the relief with clean hands. Added further the learned counsel that the sale
consideration was fixed at Rs.13.00 lacs; that the first defendant has received a sum of Rs.2.00 lacs as advance and the balance amount was
payable within 18 months from the date of delivery of the vacant possession; that the plaintiffs have further paid Rs.1,44,500/- on various dates as
evidenced by Ex.P6 series and have also discharged various amounts which the first defendant was liable to pay to one Balakrishnan and others
and have filed the discharged promissory notes under Exs.P7, P8 and P9; that the first plaintiff has also stood as guarantor for those loans also;
that the first defendant by a communication addressed to the counsel for the plaintiffs have authorised to discharge all those debts, which was
accordingly done, and hence, the first defendant cannot be permitted to say that he did not authorise the plaintiffs to discharge the debts; that
though the plaintiffs executed the agreement of sale along with the other persons, they were entitled to claim for specific performance, since their
mother Indrani, the Engineer Padmanabhan and Mrs. D''Monte have died; that with respect to the other parties shown as defendants 2 to 8 in the
suit, since they are not required to invest any amount for the purchase of the suit property, they need not be joined with the plaintiffs either to prove
the genuineness of the agreement or to prove the readiness and willingness; that they were the nominees of the first defendant, and hence, they
could not be expected to join with the plaintiff, and hence, the court has to take into consideration the conduct of the plaintiffs who have been
ready and willing to perform their part of the contract and not that of the defendants 2 to 8; that it remains to be stated that though the plaintiffs
constituted the partnership firm under Ex.P1 on 13.5.1981, the agreement for sale was not executed by the firm represented by its partners; that
the agreement for sale was only by 13 individuals out of whom three died, seven have been added as defendants 2 to 8 and three parties have filed
the suit as plaintiffs 1 to 3; that according to Ex.P3, the legal notice dated 25.6.87, the defendants 2 to 8 as per their letter dated 23.6.87 were
claimed to have abandoned the business venture; that the retirement of some of the partners from the firm will not ipso facto dissolve the firm or
make the other partners not to continue the joint venture, and thus, the plaintiffs are entitled to the specific performance, and under such
circumstances, the contention of the first defendant that the three plaintiffs cannot maintain the suit is baseless and unfounded. Added further the
learned counsel that according to the plaintiffs, they have paid a total sum of Rs.8,09,204/-, and the balance amount payable was Rs.4,90,846/-;
that the plaintiffs have paid Rs.2.00 lacs by way of advance, Rs.1,44,500/- on different dates towards further sale consideration, and
Rs.1,18,336/- towards the discharge of pronote liabilities, and thus, the plaintiffs have paid a total sum of Rs.5,33,736/-, and the balance of
Rs.2,75,468/- represented the interest for the said amounts; that however, with respect to the balance amount payable by the plaintiffs, the court
has to fix the same, and the plaintiffs are ready and willing to pay the said amount; that the plaintiffs were ready and willing to perform their part of
the contract from the date of the agreement; that in fact the plaintiffs submitted the building plan to the Madras Metropolitan Development
Authority and the Corporation authorities in February and March 1982 for necessary approval; that it is admitted by the first defendant in his letter
dated 11.5.83 that building plan has already been submitted; that further things have to be done only after the delivery of vacant site by the first
defendant; that the first defendant has not delivered the vacant possession till date; that under the circumstances, the plaintiffs are entitled to
purchase the suit property; that as per the partnership deed, the defendants 2 to 8 and their mother as nominees of the first defendant, have been
offered 50% share in the profit and loss; that if the first defendant pleads that in case of joint venture his nominees who are defendants 2 to 8 will
be benefited, the plaintiffs have alternatively claimed for specific performance of the agreement; that the plaintiffs have come with clean hands, and
thus, if the relief of specific performance is denied, the specific performance for joint venture agreement has to be decreed; that only because of the
joint venture agreement, in Clause 1 of the Agreement of Sale, the delivery of title deeds has been referred as delivery of title deeds by way of
security; that only under the legal notice dated 25.6.87 under Ex.P3, the first defendant wriggled out of the contract; that the suit having been filed
on 20.2.1990, is well within limitation; that since the first defendant addressed a letter under Ex.D7 dated 11.5.83 to the father of the plaintiffs to
do certain things, there is no question of denial of performance of the contract; and that for all the above reasons, the suit has to be decreed.
Arguing for the plaintiffs 2 and 3, the learned Senior Counsel Mr. R. Krishnaswami would submit that the suit property belonged to the first
defendant; that the purpose of the agreement was to develop the property, thereby providing shares to the children of the first defendant and the
remaining share to the plaintiffs; that the agreement under Ex.P2 provides that on payment of Rs.2 lacs, the first defendant should provide all the
original documents relating to the property and within two months, he should demolish the existing building and deliver vacant possession; that
within 18 months after the demolition of the building and handing over of vacant possession by the first defendant, the building should be
completed; that there is no clause for foreclosure of the agreement, nor was there any condition to cancel the agreement in case of any breach by
the plaintiffs; that in to the plaintiffs have paid to the first defendant a sum of Rs.5,33,736/-; that further the plaintiffs have claimed loss in the
partnership, since the children of the first defendant retired from the partnership unilaterally as and from 23.6.1987; that the said loss was estimated
at Rs.2,75,368/-; that it is pertinent to note that the agreement between the parties is admitted; that the agreement under Ex.P2 relates only to sale
of vacant site; that there is a breach by the first defendant; that since the delivery of possession is not effected as per the agreement, the plaintiffs
are not obliged to make any further payment; that it has to be noted that there is no breach on the part of the plaintiffs; that the first defendant relies
upon the letter dated 11.5.83 addressed to the plaintiffs'' father, who was not a party to the agreement; that the contents of the said letter dated
11.5.83 are contrary to the terms of Ex.P2; that this letter does not say any refusal to perform as it purports to be demand for payment; that there
is no evidence available for inferring abandonment by the plaintiffs; that after attachment was raised, to which the plaintiffs have no notice, the first
defendant wanted to avoid the agreement and, therefore, the 1st defendant complained of abandonment of the agreement; that since the
negotiations for compromise failed, the present suit was instituted; that it is pertinent to note that only in 1987, when the notice was issued, the
receipt of Rs.2 lakhs is disputed; that the existence of the loans is not denied by the first defendant; that the plaintiffs have proved the discharge of
those loans by producing documentary evidence; that PW1 has categorically stated that the plaintiffs were ready to pay the balance of
consideration as per the terms of the agreement, and hence, it can be well stated that the plaintiffs were ready and willing to perform their part of
the agreement; that the readiness and willingness would mean the obligations of the plaintiffs to perform from the date of suit and thereafter; that in
the instant case, the plaintiffs have never denied their part of obligations to perform under the agreement; that the law does not require deposit of
the entire balance amount or showing the resources for making payment of the balance; that the decisions of the Apex Court reported in Bibi
Jaibunisha Vs. Jagdish Pandit and Others, and Motilal Jain Vs. Smt. Ramdasi Devi and Others, are applicable to the present facts of the case with
regard to readiness and willingness of the plaintiffs; that it has to be noted that the adequacy of compensation cannot be substituted for the relief of
specific performance; that the suit is not barred by limitation; that the plaintiffs have filed the suit in their capacity as agreement holder and not
representing the partnership firm; that it is not the case of the defendants that Ex.P2 agreement was entered into with the partnership; that it is only
a matter between the plaintiffs and the first defendant as the first defendant himself has admitted in evidence that his children the defendants 2 to 8
are parties to the agreement only to safeguard his interest; that the children of the first defendant are entitled to share of allotment and not allotment
under Ex.P2, and thus, the suit is maintainable; and therefore, the suit has to be decreed as prayed for.
Countering to all the above contentions of the plaintiffs'' side, the learned Counsel for the contesting first defendant would argue that it is true
that the first defendant entered into an agreement for sale in respect of his properties situated in Door No.15, 16 and 17, Wallers Road, Madras 2
for a consideration of Rs.13 lacs on 13.5.81, which is marked as Ex.P2; that apart from the three plaintiffs, their mother Indrani, one Engineer by
name Padmanabhan, the wife of the first defendant and defendants 2 to 8 who are the children of the first defendant have also signed the same; that
of the 13 persons who constituted the second part, Indrani, the mother of the plaintiffs 1 to 3 and the Engineer Padmanabhan and the 8th
purchaser Mrs. D''Monte were dead; that the rest of the purchasers 7 to 13 who are shown as D2 to D8 have abandoned the contract consequent
to the termination of the partnership firm entered into between those 13 persons under Ex.P1; and under such circumstances, 3 out of 13
purchasers cannot maintain a suit for specific performance, and on that ground, the suit has got to be dismissed. Added further the learned counsel
that the suit is also barred by limitation; that though it is recited under Ex.P2 sale agreement that Rs.2 lacs was paid as advance, no such sum was
paid on the date of agreement; that according to the first defendant, a sum of Rs.1,05,000/- was paid on different dates prior to the said
agreement; that since the plaintiffs did not pay even the advance amount as found under Ex.P2 agreement, the first defendant was constrained to
send a communication under Ex.D7 dated 11.5.83, wherein he has clearly spelt about the breach of the contract made by the plaintiffs, and he has
made his intention to repudiate the contract very explicit; and hence, the plaintiffs should have filed the suit within a period of three years therefrom,
but they have filed the suit nine years after Ex.P2 agreement, and hence, the suit has got to be dismissed not only on the question of limitation, but
also for latches on the part of the plaintiffs. Added further the learned counsel that admittedly the partnership firm under Ex.P1 was not a registered
one, and hence, the suit filed by the plaintiffs is not at all maintainable; that it is true that as per Ex.P2 agreement, the first defendant undertook to
complete the demolition of the existing construction within a period of two months, but he did no do so in view of the fact that Narayanaswami,
father of the plaintiffs had not paid the advance amount; that it is not correct on the part of the plaintiffs to state that the demolition could not be
completed due to the court attachment and also because the property was kept under the lock and key; that it is pertinent to note that the
attachment did not continue up to a certain period; that the undertaking given by the first defendant under Ex.P2 agreement regarding the
demolition of the existing construction had relevancy with the payment of advance amount; that it was not understood between the parties that the
payments were to be made only after the handing over of possession; that on the date of the agreement, the first defendant had handed over the
title deeds of the suit property to the plaintiffs; that it is true that the first defendant had received those amounts found under Ex.P6 series; that the
father of the plaintiffs Narayanaswami alone was in charge for the entire activities; that the first plaintiff examined as PW1 has admitted in his
evidence that he was doing his college course during the relevant period, and hence his evidence that he had discussion with the first defendant in
respect of the sale of the property is false and has got to be rejected; that the plaintiffs were never ready and willing to perform their part of the
contract; that only a sum of Rs.1,05,000/- out of Rs.2 lacs recited under Ex.P2 agreement as advance was paid, and hence, the first defendant has
not received Rs.95,000/- which formed part of the said advance; that the first defendant never authorised the plaintiffs to discharge any debts, and
the claim of the plaintiffs that they have discharged three promissory notes under Exs.P7, P8 and P9 was false; that it is pertinent to note that the
creditor Balakrishnan was the uncle of the plaintiffs, and hence, the alleged discharge of the debts by the plaintiffs should not be taken into
consideration for the simple reason that those discharge was not at all authorised by the first defendant; that apart from the same, the plaintiffs have
calculated the interest to the tune of Rs.70,000/- on those principal amounts; that it remains to be stated that the said sum of Res.,18,000/- alleged
to have been paid by the plaintiffs to the third party creditors would represent only a part of the sale consideration, which cannot carry any interest;
that apart from the above, the plaintiffs have also adjusted a sum of Res.,75,368/- stating that it represents the loss sustained by them, and thus, the
plaintiffs have averred that after making the above adjustments, they are ready and willing to pay Res.,90,846/- and seeking the orders of this court
to direct the first defendant to execute the sale deed; that this would clearly indicate that the plaintiffs have come with a false case; and hence, on
the two grounds that the plaintiffs were not ready and willing to perform their part of the contract by paying the balance of consideration as
understood between the parties; and that they have come with a false case, the court has to necessarily refuse the equitable relief of specific
performance; that apart from that during the relevant period, they had no sufficient source of income or capacity to pay the balance of
consideration; that Ex.P1 agreement recites that the capital of the partnership was only Rs.60,000/- to be contributed by the parties 1 to 5th part
equally, and thus, this would indicate that each was to contribute only Rs.12,000/-; and that this would show that the plaintiffs to start with, had no
sufficient funds at all. Added further the learned counsel that the contention of the plaintiffs that the first plaintiff stood as guarantor for the loan
amounts availed by the first defendant was an utter falsehood; that even as per Ex.P2 document, all the title deeds were handed over to the
plaintiffs; that as per the copy of the plaint in O.S.No.7022/87 marked as Ex.D3, filed by the first plaintiff against the first defendant for recovery of
money, it was stated that the title deeds were deposited by the first defendant to Balakrishnan as collateral security; that it is pertinent to note that
the said suit was dismissed for default, but the first plaintiff has not taken any steps to restore the same, and thus, the plaintiffs who have not been
ready and willing to perform their part of the contract from the very beginning, have come forward for the equitable relief of specific performance
with unclean hands, and hence, they are not entitled for the reliefs, asked for; that apart from that the suit is also not maintainable in law, and hence,
the suit has got to be dismissed.
Admitted facts by the parties can shortly be stated as follows:
The plaintiffs 1 to 3 are the sons of one Mr. A. Narayanaswami, who was a practising Advocate. The first defendant is the owner of the plaint
Schedule property. The defendants 2 to 8 are the sons and daughters of the first defendant. The plaintiffs 1 to 3, their mother Ingrain, an Engineer
by name Padmanabhan and the defendants 2 to 8 and their mother entered into an unregistered Partnership Agreement marked as Ex.P1 only with
the object of promoting a commercial complex in the property at door No.15, 16 and 17, Wallars Road, Narasimhapuram, Madras 2. All the said
13 persons who constituted the said partnership entered into an agreement of sale marked as Ex.P2 with the first defendant on 13.5.81 in respect
of the suit property. The sale consideration was fixed at Rs.13,00,000/-. Under the said agreement, the first defendant undertook to demolish the
existing superstructure within two months'' time and hand over vacant possession. The vacant possession of the property was not handed over by
the first defendant to the other party. A part of the superstructure has been demolished, while the demolition in respect of the other part is
incomplete. The first defendant sent a registered letter to Mr. Narayanaswami on 11.5.83 as found under Ex.D7. The first defendant issued a
notice through his lawyer on 25.6.87 under Ex.P3. The father of the plaintiffs Mr. Narayanaswami in his capacity as Advocate, has issued Ex.P4
reply notice dated 3.7.87 to the first defendant, which resulted in a rejoinder from the first defendant under Ex.P5. The plaintiffs have filed the suit
on 20.2.1990 seeking for the above said reliefs.
The plaintiffs 1 to 3, their mother Indrani, an Engineer by name Padmanabhan and the defendants 2 to 8 who are the children of the first
defendant and the wife of the first defendant all entered into Ex.P1 partnership agreement on 13.5.1981. Pursuant to the same, all the 13 persons
entered into Ex.P2 agreement of sale with the first defendant on the same day in respect of the suit Schedule properties, situated in Door Nos.15,
16 and 17, Wallers Road, Madras which belonged to the first defendant. Concededly, the partnership entered into between the said 13 persons
including the plaintiffs herein, was an unregistered one. The plaintiffs have specifically averred in the plaint that the said agreement for sale under
Ex.P2 was entered into between the first defendant who constituted the first part and the above 13 persons as the second part; that under the
partnership deed, the first plaintiff was the main party who arranged negotiation of purchase; that their mother Indrani died on 5.2.1983; that the
Engineer Padmanabhan also died subsequently; that Mrs. D''Monte and her children have retired from the partnership, and hence, the plaintiffs are
entitled to get the relief of specific performance against the first defendant on the basis of the sale agreement executed by him. A reading of Ex.P1
partnership deed would go to show that the main object of the partnership was to promote a commercial complex at No.15, 16 and 17, Wallers
Road, Madras 2. Pursuant to the said partnership deed and with the said object, all the 13 individuals have entered into Ex.P2 sale agreement with
the first defendant. P.W.1 has categorically admitted that the business of the said partnership was a single venture for promoting the commercial
complex at No.15, 16 and 17, Wallers Road, which was the subject matter of Ex.P2 agreement. The witness has further added that the said
partnership under Ex.P1 is still alive, and the same is constituted by himself and his two brothers, who are the plaintiffs 2 and 3, as the partners of
the said partnership firm, and the others have retired from the firm, and hence, himself and his two brothers have filed the present suit. Hence, the
contention of the plaintiffs'' side that the agreement of sale was entered into by 13 individuals only cannot be countenanced.
The defendants 2 to 8 by a letter dated 23.6.1987 as found under Ex.D2 series, have expressed in clear terms that they have abandoned the
business venture. At the time of arguments, the learned Counsel for the plaintiffs would submit that the retirement of some of the partners from the
firm would not ipso facto dissolve the firm or make the other partners not to continue the joint venture, and hence, the plaintiffs are entitled to get
the relief of specific performance. All the above would go to show that even as per the pleadings and the evidence, the partnership firm, originally
entered into between the parties despite the death of two of the partners and the retirement of or abandonment by eight of the partners, continues
to exist with the plaintiffs as partners, and thus, they are entitled to the relief of specific performance. The court may hasten to say at this stage that
the plaintiffs cannot maintain the suit for specific performance in view of the two legal impediments. Firstly, the partnership firm was an unregistered
one, which in view of the rulings cited infra cannot institute or maintain a suit. The Apex Court has held in a decision reported in Seth Loonkaran
Sethiya and Others Vs. Mr. Ivan E. John and Others, thus:
Partnership Act (1932), S. 69 - Bar under - Applicability.
Section 69 is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a
contract which he entered into as a partner of an unregistered firm, whether existing or dissolved, void. In other words, a partner of an erstwhile
unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract falling within the ambit of Section 69.
In a decision reported in M/s. K.R.M. Money Lenders Vs. Mr. A. Manoharan @ Doss, , this court has held thus:
Partnership Act, 1932, section 69(2) - Suit instituted by partnership firm which was unregistered on date of institution of suit - Firm subsequently
registered - Subsequent registration of firm does not cure defect of non-registration before presentation of suit - Non-registration of firm is illegality
going to root of suit and plaint is itself non-est in law - Firm instituting suit should establish that firm is registered and disclose particulars of partners
who constitute firm on date of institution of suit.
Code of Civil Procedure, 1908, Order 7, Rule I - Plaint and Pleadings - Defect in filing suit by unregistered firm goes to root of suit and Court is
bound to consider same even if defendants had failed to raise such objection - Court has to reject plaint if barred by law - Suit by unregistered firm
barred u/s 69(2) of Partnership Act - Suit to be rejected and plea of waiver of such objection by defendants is of no avail.
Secondly, while the agreement under Ex.P2 for the sale of the property was entered into by 13 persons, who were the partners of a firm
constituted under Ex.P1 with the sole object of promoting a commercial complex in the property, which is the subject matter of sale, the plaintiffs
cannot legally enforce the said agreement of sale in the absence of the other 10 persons consenting for such an enforcement of the agreement.
Except two of them who were dead, the other 8 persons not joined the plaintiffs in filing the suit, but have abandoned the joint venture. By doing
so, no doubt, the defendants 2 to 8 have expressed their disinclination to proceed with the agreement for sale.
As could be well seen from Ex.P2 agreement for sale, the sale consideration was fixed at Rs.13.00 lacs. According to the plaintiffs, the first
defendant received an advance of Rs.2.00 lakhs from the plaintiffs on the date of the said agreement viz. 13.5.1981. Refuting the same, it is
contended by the first defendant that actually no amount was paid on the date of the agreement; that only a sum of Rs.1,05,000/- was paid on
different dates on the earlier occasion; and that this was also stated by the first defendant in his letter under Ex.D7 dated 11.5.83. Ex.P2 agreement
for sale clearly recites that the first defendant has received a sum of Rs.2,00,000/- as advance on the date of the agreement from the parties 1,2, 3
and 4 of the second part and handed over all the original documents, which would remain as collateral security for the advance and other amounts
to be paid. Had it been true that the first defendant received only Rs.1,05,000/- prior to Ex.P2 agreement and did not receive any amount on the
date of the agreement, the first defendant would not have been a party for such recital being included in the agreement. In the face of the clear
recital as to the receipt of Rs.2,00,000/- by the first defendant on the date of Ex.P2 agreement, the contention of the first defendant that he
received only Rs.1,05,000/- that too before the agreement, and no amount was paid on the date of the agreement has got to be rejected. It cannot
be disputed by the plaintiffs that excepting this advance amount of Rs.2.00 lacs, they were liable to pay Rs.11.00 lacs towards the balance of sale
consideration as per the agreement. According to the plaintiffs, they are liable to pay only Rs.4,90,896/- towards the balance of consideration. It
would be more appropriate to reproduce the relevant part of the plaint averments in this regard:
8(a) .....To direct the defendants to specifically perform the terms of the joint venture agreement dated 13.5.1981 on payment of the balance sum
of Rs.4,90,846/- by the plaintiff to the defendant....
The plaintiffs therefore pray for a decree and judgment against the defendants-
a) for specific performance of the agreement dated 13.5.1981 and direct the defendants to execute the sale deed in favour of the plaintiffs or their
nominees by one or more sale deeds as per the terms of the agreement on payment of the balance of consideration of Rs.4,90,896/-......
From the above averments, it would be abundantly clear that the plaintiffs were ready and willing to perform their part of the agreement by
paying the balance of consideration of Rs.4,90,896/-. P.W.1 has deposed that after the payment of the initial amount of Rs.2.00 lacs, they have
paid a sum of Rs.1,44,500/- on different dates. A perusal of Ex.P6 receipts would clearly indicate that the first defendant has acknowledged the
receipt of the said sum of Rs.1,44,500/- on different dates. The first plaintiff has further added that the first defendant borrowed moneys from
Balakrishnan; that he stood as guarantor for the said transactions; that subsequently he made those payments to Balakrishnan; that in that way, he
has paid Rs.1,18,000/- towards the principal and the accrued interest thereon was Rs.70,000/-; and that totally a sum of Rs.1,89,000/- was
adjusted in the sale consideration. It is contended by the first defendant that he never authorised the plaintiffs to discharge those debts, which he
was liable to pay to Balakrishnan and others. The first defendant even in his written statement and in evidence also has specifically averred that he
had negotiations only with Mr. Narayanaswami, father of the plaintiffs and has actually entered into the agreement with him. The first defendant has
well admitted that he wrote a letter under Ex.D7 to Mr. Narayanaswami, wherein he asked him to take steps to adjust the loan amounts
introduced by him. The plaintiffs have filed the original promissory notes executed by the first defendant in favour of the creditors containing the
endorsement of discharge by the respective creditors by receiving the principal and interest thereon. In view of the request made by the first
defendant under Ex.D7 letter, now the first defendant cannot be permitted to say that he did not authorise the discharge of the debts either, or
those payments would not bind him. According to the plaintiffs, they have calculated the interest at the rate of 24% on Rs.1,18,000/- which
worked out to Rs.70,000/- up to January 1990, and the same has also got to be adjusted in the sale consideration. It remains to be stated that the
said payments of Rs.17,200/- Rs.34,400/- and Rs.17,200/-, totalling Rs.68,800/- made by the plaintiffs under Exs.P7, P8 and P9 respectively to
the different creditors would represent a part of the sale consideration, and hence, at no stretch of imagination, it could carry any interest. Thus, the
plaint averments and the evidence of PW1 stating that the said interest amounting to Rs.70,000/- was to be adjusted in the sale consideration are
not only against the terms of the agreement under Ex.P2, but also illegal.
In order to arrive at the said balance of consideration of Rs.4,90,896/-, the plaintiffs have also averred that as per the partnership agreement
dated 13.5.1981, the other partners Mrs. D''Monte and her children on their retirement were to share the profit and loss; that in the reply dated
3.7.87, the plaintiffs claimed Rs.2,77,368/- as loss from the defendants giving the account stating that the plaintiffs have paid a total sum of
Rs.3,44,500/- as per the agreement towards the sale consideration, which would carry interest at 18% from the date of investment which worked
out to Rs.4,82,400/-, and the same has also to be adjusted in the sale consideration. This averment of the plaintiffs to adjust Rs.2,77,368/- as loss
from the defendants stating that the plaintiffs have paid a total sum of Rs.3,44,500/- as per the sale agreement towards the sale consideration
would clearly reveal that the agreement for sale would go against the contention of the plaintiffs that the sale agreement was entered into only by 13
individuals and not by the partners of the firm. It is pertinent to note that the first defendant, who was the owner of the property, was not a party to
the partnership deed dated 13.5.81, nor has he agreed to share the profit or loss with the partnership firm. The said unregistered partnership deed
was entered into between the plaintiffs and others with the sole object of promoting a commercial complex in the suit property. It is an admitted
position that except entering into the said partnership deed under Ex.P1, the joint venture thereunder did not fructify. It has to be noted that the two
of the partners died, and eight of the partners who are the defendants 2 to 8 and Mrs. L.T. D''Monte by a letter dated 23.6.87 under Ex.D2 have
stated that the business venture contemplated in the year 1981 has been abandoned, and the contract entered into with the first defendant has also
been abandoned. Even assuming that the plaintiffs have sustained any loss in view of the conduct of the other partners, they can have recourse only
against them and not against the first defendant, who had nothing to do with the partnership firm.
On receipt of a notice from the first defendant under Ex.P3 dated 25.6.87 stating that Mrs. D''Monte and her children abandoned the business
and the agreement, a reply under Ex.P4 dated 3.7.87 was sent by Mr. Narayanaswami on behalf of his sons. Ex.P4 reply reads as follows:
....N. Venkatesh and his brothers N. Kasi Visvanathan and N. Ramesh are willing and competent to complete the contract with your client and
they are quite willing to pay the balance of consideration......
A very reading of the above reply notice would make it abundantly clear that the plaintiffs have expressed their readiness and willingness to pay the
balance of consideration after adjusting the payments to the creditors, interest thereon and the alleged loss sustained by the retirement of the
partners of the firm. It is a matter of surprise to note that how the plaintiffs were entitled to adjust the interest on the payments made to the
creditors, which would represent a part of the sale consideration and would make further adjustment by way of loss sustained by the plaintiffs on
account of the retirement of the partners in a firm in which the first defendant has nothing to do. The averments made by the plaintiffs through their
counsel under Ex.P4 reply notice which preceded the suit would clearly reveal that the plaintiffs were ready and willing to pay only Rs.4,90,896/-,
after making the adjustments as per their desires and not in accordance with the terms of the agreement.
It is pertinent to note that when the original plaint was presented in the instant suit, it did not contain the requisite pleading that the plaintiffs
were always ready and willing to perform their part of the contract to satisfy the mandatory provision of S. 16(c) of the Specific Relief Act.
Subsequently, the same was rectified by way of an application for amendment in Application No.959/98 dated 23.4.1998, which resulted in
introduction of paragraph 8(a) in the plaint. As stated above, in paragraph 8(a) of the plaint, the plaintiffs have clearly stated that they were ready
and willing to specifically perform the agreement on their part, and nowhere in the plaint, they have stated that they were ready and willing to pay
the balance of consideration as per the terms of the agreement. But they have expressed their readiness and willingness to perform their part of the
agreement by paying the balance of consideration, which according to them was only Rs.4,90,896/-. In view of the reply notice under Ex.P4 and
the clear averments in the plaint, the plaintiffs cannot now be permitted to say that they were ready and willing to pay the balance of consideration,
as per the terms of the agreement, and that the court may fix the balance of consideration and grant equitable relief in their favour. Needless to say
that the specific performance of a contract cannot be enforced in favour of a person, who fails to aver and prove that he has always been ready
and willing to perform the essential terms of the contract including the payment of consideration, which are to be performed by him. The court is of
the view that the decisions of the Apex Court reported in AIR 1995 S C 945 (JUGRAJ SINGH AND ANOTHER VS. LABH SINGH AND
OTHERS) and in N.P. Thirugnanam (D) by L.Rs., Vs. Dr. R. Jagan Mohan Rao and others, and of the Division Bench of this Court reported in
S.S. Chokkalingam Vs. R.B.S. Mani and Others, cited infra are applicable to the present facts of the case. In the said decisions it has been held as
follows:
AIR 1995 SC 945:
Section 16(c) of the Specific Relief Act 1963 provides that the plaintiff must plead and prove that he has always been ready and willing to
perform his part of the essential terms of the contract. The continuous readiness and willingness at all stages from the date of the agreement till the
date of the hearing of the suit need to be proved. The substance of the matter and surrounding circumstances and the conduct of the plaintiff must
be taken into consideration in adjudging readiness and willingness to perform the plaintiff''s part of the contract.
N.P. Thirugnanam (D) by L.Rs., Vs. Dr. R. Jagan Mohan Rao and others, :
To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the
plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to
the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready
and has always been willing to perform his part of the contract.
S.S. Chokkalingam Vs. R.B.S. Mani and Others, :
In the present case, it is clear that the appellant-purchaser has never been ready and willing to perform his part of the contract. It is well settled
that a person cannot claim the relief of specific performance unless he proves his readiness and willingness to perform his part of the contract. It is
also seen that the appellant has come to court with a false case that no time limit was fixed for completion of the transaction and that he was
permitted to pay the sale price in driblets. But the evidence clearly shows that the appellant himself fixed the time limit and the respondents (sellers)
gracefully agreed to such extensions. In spite of such extensions, the appellant failed to perform his part of the contract. It is also seen that the
appellant has put forward a false case that there was a panchayat. It is well known that a person who has come to court with a false case is not
entitled to the equitable relief of specific performance.
If the above said tests are applied, the court without any hesitation can very well say that the plaintiffs have failed to satisfy the mandatory provision
of law under S. 16 of the Specific Relief Act. Thus, it has to be necessarily held that the plaintiffs have neither averred nor proved that they were
ready and willing to perform the said essential terms of the contract, which they are bound to perform. The first defendant is under no obligation to
execute a sale deed in favour of the plaintiffs when they were not ready and willing to pay the balance of consideration as per Ex.P2 sale
agreement, as quite evident from the reply notice under Ex.P4 dated 3.7.87 and the averments in the plaint regarding the balance of consideration.
The contention put forth by the plaintiffs'' side that with respect to the balance amount payable by the plaintiffs, the court has to fix the same, and
the plaintiffs are ready and willing to pay the said amount cannot be countenanced. After seeing the allegations made by the plaintiffs in Ex.P4 reply
notice and the averments made in the plaint regarding the balance of consideration, the court without any hesitation can find that the plaintiffs were
never ready and willing to perform their part of the contract, as per the terms of the agreement relating to the consideration for the sale. The law
would require the readiness and willingness to perform on the part of the plaintiffs from the time of the agreement for sale till the completion of the
proceedings in the court. The expression of readiness and willingness to make the payment as fixed by the court at the time of arguments will not in
any way satisfy the said legal requirement stating that the plaintiffs seeking for the equitable relief of specific performance should be ready and
willing from the time of agreement till the finalisation of the proceedings. In the instant case, the plaintiffs have not satisfied the said legal
requirement.
In the absence of any material to hold that the plaintiffs have abandoned the contract, the contention of the first defendant that the plaintiffs have
abandoned the contract cannot be countenanced. So far as the contention of the first defendant that the suit is hit by law of limitation is concerned,
the court has to necessarily disagree with the defence. Ex.P2 agreement was dated 13.5.1981. Clause 2 of Ex.P2 reads as follows:
The vendor undertakes to demolish within two months from this date and hand over vacant possession of the schedule mentioned property to
the purchasers herein for starting their construction work.
It is well admitted by the first defendant that a part of the building was demolished, while the remaining part is in tact, and thus, it would be evident
that the first defendant has not complied with the said term. Relying on Ex.D7 letter dated 11.5.83, the learned counsel for the first defendant
would submit that the said letter would speak about the breach of the contract committed by the plaintiffs, and then the period of limitation
commenced therefrom, and hence, the suit should have been filed within three years therefrom. As per Ex.P2 agreement, the liability of the plaintiffs
to pay a further amount would start only after the demolition of the entire structure by the first defendant and delivery of possession. A reading of
Ex.D7 letter would make it clear that the first defendant has asked Mr. Narayanaswami to take steps to adjust the loan amounts introduced by him
as the first defendant was liable to discharge those loans. As seen above, the plaintiffs had discharged the loan amounts of the first defendant under
Exs.P7, P8 and P9 promissory notes. Nowhere under Ex.D7, the first defendant has expressed his repudiation to perform his part of the contract.
On the contrary, the first defendant has categorically admitted that he gave instructions to his lawyer K.T. Palpandian to issue a notice dated
25.6.87 as found under Ex.P3, and it was on that date, he decided to refuse to perform his part of the agreement, and only after that, he sent a
notice under Ex.P3 to the plaintiffs. Thus, it would be clear that only on receipt of Ex.P3 notice, the plaintiffs were put on notice as to the refusal by
the first defendant to perform his part of the agreement. Since the plaintiffs have filed the suit within three years therefrom, the suit is well within
time.
According to the plaintiffs, the first defendant made borrowals from N. Balakrishnan and others and executed promissory notes on the
guarantee of the first plaintiff and on the collateral security of the original documents. PW1 has deposed that he stood as guarantor for the above
loan transactions, and on discharge of the same, he got back the promissory notes under Exs.P7, P8 and P9. Under the said three promissory
notes, the first defendant has borrowed a sum of Rs.10,000/-, Rs.20,000/- and Rs.10,000/- on 25.8.81, 21.12.81 and 5.1.82 respectively. Ex.P2
sale agreement recites that the first defendant has handed over all the original documents as collateral security for the advance and the other
amounts to be paid. Thus, the said recital would indicate that all the original documents pertaining to the immovable property of the first defendant
were already handed over to the plaintiffs even on 13.5.1981 itself. In all the three discharged promissory notes under Exs.P7, P8 and P9, the first
plaintiff has made similar endorsements as follows:
I stand guarantee for the payment of the above said principal and interest and deposit the title deeds with me relating to 15 & 16 & 17 Wallers
Road as collateral security.
All these endorsements were made on the respective dates of the promissory notes. Since the original documents pertaining to the immovable
property were handed over to the plaintiffs as found in the recital under Ex.P2 stated above, no question of handing over of those documents again
on the respective dates of endorsements would arise. A perusal of Ex.D3, a certified copy of the plaint filed by the first plaintiff against the first
defendant in O.S.No.7022/87, on the file of the City Civil Court, Madras, would reveal that the first plaintiff has filed a suit for recovery of a sum
of Rs.26,488/- alleging that the first defendant had executed a promissory note on 25.8.81 for a sum of Rs.11,000/- wherein the first plaintiff stood
as guarantor for the payment, and deposited the title deeds with him relating to Door Nos.15, 16 and 17 Wallers Road, as collateral security. As
stated above, on the very date viz. 25.8.81, the first defendant has borrowed a sum of Rs.10,000/- and has executed Ex.P7 promissory note, and
the first plaintiff has also made an endorsement that the first defendant has deposited the title deeds with him as collateral security. The first plaintiff
has no explanation to offer why he filed the said suit against the first defendant for recovery of money without adjusting the said amount towards
the sale transaction in question. The said suit was not prosecuted, and the same was dismissed for default and not restored. All the above would go
to show that though the original documents were obtained by the plaintiffs as collateral security at the time of payment of advance under Ex.P2 on
13.5.81, the first plaintiff has made the said endorsements as if he received those documents as collateral security on the date of the promissory
notes, which is against the true state of affairs.
Therefore, for the discussions made and reasons stated above, it has to be held that the plaintiffs are not entitled to the relief of specific
performance of the agreement of sale under Ex.P2 dated 13.5.1981. The plaintiffs have sought for an alternative relief of directing the defendants
to specifically perform the terms of the joint venture agreement dated 13.5.81 on payment of the balance sum of Rs.4,90,846/-. The court is of the
view that this alternative relief cannot go together with the relief of specific performance, and the same cannot be entertained in this proceedings. It
remains to be stated that since the relief of specific performance is refused, granting of the said alternative relief will not be meaningful. So far as the
other alternative relief of refund of the amounts paid by the plaintiffs is concerned, the court is of the considered view that there is no legal
impediment in granting the said relief with interest, and hence, the first defendant is liable to pay Rs.4,13,300/- i.e. advance of Rs.2,00,000/-,
further payment of Rs.1,44,500/- under Ex.P6 receipt and payment of Rs.68,800/- towards discharge of debts of the first defendant under
Exs.P7, P8 and P9 promissory notes. As regards interest, considering the facts and circumstances of the case, the plaintiffs are entitled to get
interest at 18% per annum on Rs.2,00,000/- and Rs.1,44,500/- from 13.5.81 and on Rs.68,800/- (Rs.17,200/- + Rs.34,400/- + Rs.17,200/-)
from the respective dates of payment as found under Exs.P7, P8 and P9 viz. 24.8.84, 20.12.84 and 1.1.85, till realisation. It has to be held that
the plaintiffs are not entitled to the relief as found under prayer column (b). All the above issues are answered accordingly.
In the result, the plaintiffs are given a decree for a sum of Rs.4,13,300/- only together with interest at 18% per annum on Rs.3,44,500/- from
13.5.81, on Rs.17,200/- from 24.8.84, on Rs.34,400/- from 20.12.84 and on Rs.17,200/- from 1.1.85 till realisation and with proportionate
costs. The first defendant is given two months'' time for making the said payments. If the decree granted supra is not satisfied within two months,
the amounts shall carry interest at 24% per annum from the date of expiry of two months till realisation. A charge is also created over the plaint
schedule property till the decree is fully satisfied. The plaintiffs are directed to hand over the original documents of title in their hands to the first
defendant or deposit the same into the court within a period of four weeks herefrom. In other respects, this suit is dismissed.