Nirmala S.Raj vs P.Ravi Kumar, & Ors.

The suit has been laid by the plaintiff for specific performance

or in the alternative for the recovery of the advance amount with

interest.

The averments contained in the plaint are briefly stated as

follows:

The first defendant is the absolute owner of the plaint schedule

mentioned property and the first defendant entered into an agreement

with the plaintiff on 23.07.2009 agreeing to sell the suit property for a

total sale consideration of Rs.50,50,000/- free of all encumbrances

and in pursuance of the same, the plaintiff has paid a sum of

Rs.21,00,000/- towards advance. The above said agreement

contained inter alia the clause that the purchaser, namely, the

plaintiff can deduct a sum of Rs.11,50,000/- payable to the tenant.

The first defendant, in pursuance of the mentioned sale agreement,

had executed a registered power of attorney in favour of one

Ms.Jenette D/o.J.A.Thambusami. The first defendant had agreed to

redeem the suit property from the second defendant, where the

original documents had been given and loan taken. The plaintiff paid

a sum of Rs.11,50,000/- to the tenant of the suit property, namely,

K.M.Sikkander Kasim and the first defendant handed over the vacant

possession of the suit property to the plaintiff on 25.10.2010 and

necessary endorsement has been made with reference to the same in

the sale agreement. The plaintiff, still owe Rs.18,00,000/- to the

first defendant towards the balance sale consideration and she is

ready to pay the same at any point of time as and when the first

defendant clear the loan payable to the second defendant garnishee

bank and handover the original documents of the suit property to the

plaintiff and register the sale deed. The first defendant, however, is

evading to get the document released from the garnishee and

handover to the plaintiff for completing the sale transaction, though

the plaintiff has been always ready and willing to perform her part of

the contract. Inasmuch as the first defendant did not pay the money

due to the bank and get back the original title deeds, the plaintiff had

been prevented from performing her part of the contract and in view

of the same, the plaintiff has been necessitated to lay the suit for

appropriate reliefs.

The averments contained in the written statement filed by

the first defendant are briefly stated as follows:

The suit is not maintainable either in law or on facts. The suit is

barred by latches and limitation on the part of the plaintiff and hence,

liable to be dismissed.

The plaintiff is the wife of one M.Sampath Rajkumar, who

claimed to be a practicing advocate and also engaged in real estate

business. The plaintiff''s husband was introduced to the defendant by

one V.Ramesh maintenance supervisor of "Marina Square Appartment,

where in the suit property is located and accordingly, inasmuch as the

defendant was in need of money on account of meeting his financial

commitments agreed to sell the suit property to the plaintiff''s

husband for a lower price and accordingly, the sale agreement was

entered into between the plaintiff and the first defendant and the

parties have mutually agreed to complete the sale consideration

within a period of 90 days from the date of the execution of the sale

agreement between the parties and thus, the time was the essence of

the contract.

The plaintiff''s husband prevailed upon the defendant to

execute the power of attorney deed in favour of Ms. Janette

D/o.J.A.Thambuswamy. Further, the plaintiff''s husband also insisted

the defendant to deliver the vacant possession of the suit property.

Accordingly, the first defendant made arrangement to vacate the

tenant in occupation of the suit property by settling his dues and the

plaintiff and her husband occupied the premises on 25.10.2010 and

even prior to that, they were collecting the rental amount from the

tenant in occupation of the suit property. The first defendant, though,

was ready to complete the sale consideration, it is only the plaintiff

and her husband, who had been evading the same on the footing that

they were taking steps to sell their property at Perungudi Village and

after settling the same, they would take steps to clear the dues due to

the second defendant bank and complete the sale transaction.

Believing the above said words of the plaintiff and her husband, the

first defendant kept quiet and however, inasmuch as the plaintiff and

her husband did not take step to discharge the loan due to the second

defendant bank, the whole contract between the parties has become

frustrated by the inability to complete the sale transaction within the

time stipulated in the agreement, as the plaintiff and her husband

were unable to raise the necessary funds to complete the sale

transaction. But, without taking further steps to complete the sale

transaction, the plaintiff has been squatting upon the suit property

preventing the first defendant from getting any income therefrom.

It is false to state that the plaintiff had settled the dues to

the tenant, by remitting a sum of Rs.11,50,000/-. In fact, the

defendant has paid a substantial amount of Rs.8,00,000/- to the

plaintiff''s husband in order to vacate the tenant from the suit

property. The plaintiff''s husband has contributed only the balance

amount of Rs.3,50,000/- and then, settled his claim by repaying a

sum of Rs.11,50,000/- to the said tenant viz. K.M.Sikkander Kasim

and obtained vacant possession after getting endorsement in the sale

agreement to suit his convenience without the knowledge of the first

defendant. The claim of the plaintiff that she has to pay only a sum

of Rs.18,00,000/- towards the balance sale consideration is not

correct and false. The plaintiff has to pay a sum of Rs.26,00,000/-

towards the balance sale consideration and in view of the breach

committed by the plaintiff, the first defendant has sustained monetary

loss as described in the written statement. In fact, it is only the

plaintiff and her husband, who are legally liable to pay a sum of

Rs.60,78,448/- to the first defendant and the first defendant reserves

his rights to initiate appropriate legal proceedings to recover the said

sum and hence, the suit is liable to be dismissed.

On the basis of the pleadings, the following issues are framed

for determination in the suit.

" 1. Whether the plaintiff is entitled to a decree for specific performance of the Agreement dated 23.07.2009?

Whether the plaintiff has been ready and willing to perform her part of contract?

3.Relief and cost."

In support of the plaintiff''s case, PW1 has been examined and

Exs.P1 to 7 were marked. On the side of the defendants, DW1 has

been examined and Exs.D1 to 4 were marked.

ISSUES NOS. 1 & 2:

The plaintiff has laid the suit seeking the relief of specific

performance in respect of the sale agreement dated 23.07.2009.

According to the plaintiff, in respect of the suit property belonging to

the first defendant, the first defendant and the plaintiff entered into

an agreement dated 23.07.2009 for the sale of the suit property and

accordingly, it is the case of the plaintiff that the first defendant

agreed to sell the suit property free of all encumbranceS in favour of

the plaintiff for a sum of Rs.50,50,000/- and pursuant to the same,

according to the plaintiff, she has paid a sum of Rs.21,00,000/- as

advance and further, according to the plaintiff, in terms of the

conditions set out in the sale agreement, she has also paid

Rs.11,50,000/- to the tenant towards the lease amount and thus,

according to the plaintiff, in toto, as per the sale agreement above

mentioned, she has paid a sum of Rs.32,50,000/- and only the

remaining amount of Rs.18,00,000/- is to be disbursed to the first

defendant for completing the sale transaction and according to the

plaintiff, inasmuch as the first defendant had not cleared the loan with

reference to the suit property pending with the second defendant

garnishee bank and retrieved the original documents pertaining to the

suit property, the sale transaction could not be completed and further

according to the plaintiff, despite the pre - suit legal notice dated

31.03.2012, the first defendant failed to come forward to complete

the sale transaction by handing over the original title deeds and

therefore, it is stated that the plaintiff has been necessitated to

institute the suit seeking the relief of specific performance mainly or

in the alternative for the refund of the advance amount paid pursuant

to the sale agreement above referred to with interest as claimed in

the plaint.

The execution of the sale agreement dated 23.07.2009 in

respect of the suit property between the plaintiff and the first

defendant has not been controverted by the first defendant. Equally,

the payment of Rs.21,00,000/- by the plaintiff towards the advance

under the sale agreement has also not been disputed by the first

defendant. As seen from the pleas set out by the first defendant in the

written statement and also, the evidence tendered by the first

defendant examined as DW1, it is noted that the receipt of a sum of

Rs.11,50,000/- towards the sale consideration paid by the plaintiff by

way of the payment of the lease amount of a sum of Rs.11,50,000/-

to the tenant, who had occupied the suit property is admitted and

thus, it is found that the first defendant has agreed that the plaintiff

has in toto paid a sum of Rs.32,50,000/- towards the sale

consideration, pursuant to the sale agreement above mentioned.

Though in the written statement, the first defendant has taken a plea

that the plaintiff had paid only a sum of Rs.3,50,000/- towards the

lease amount and it is only the first defendant, who had paid a sum of

Rs.8,00,000/- in order to vacate the tenant from the suit property, as

regards the above defence set out by the first defendant in the written

statement, the same is not buttressed by acceptable and reliable

evidence.

In this connection, the first defendant examined as DW1, in

his evidence, during the course of cross examination, has clearly

admitted that as per the sale agreement, he has received a sum of

Rs.21,00,000/- by way of two cheques and at the time of the

agreement of sale, there was a due of Rs.39,00,000/- to the bank and

the total agreed sale consideration was Rs.50,50,000/- and he had

already received a sum of Rs.21,00,000/- and after that, he has also

made an endorsement in Ex.P2 that he had received a sum of

Rs.11,50,000/- and accordingly, he had received a total sum of

Rs.32,50,000/- and thereafter, he has, further, admitted that the

balance amount would be Rs.18,00,000/- as on 25.10.2010.

Therefore, as seen from the above admission of the first defendant, it

is found that towards the sale consideration fixed at a sum

Rs.50,50,000/-, the first defendant has received a total sum of

Rs.32,50,000/- and the remaining amount to be paid towards the sale

consideration is only Rs.18,00,000/- as on 25.10.2010.

It is also noted and admitted by the first defendant that

pursuant to the payment of the lease amount by the plaintiff, the

possession of the suit property had been handed over to the plaintiff

and the same has not been controverted by the first defendant. It is

not the case of the first efendant that the plaintiff had taken

possession of the suit property illegally, pursuant to the sale

agreement. On the other hand, it is found that as per the terms set

out by the parties in the sale agreement, it is noted that the plaintiff

had been put in possession of the suit property, pursuant to the

clearance of the lease amount in respect of the suit property.

It has to be seen whether the plaintiff has been always

ready and willing to perform her part of the contract to obtain the

discretionary and equitable relief of specific performance sought for by

her in the plaint. Admittedly, the sale agreement had been entered

into between the parties on 23.07.2009. It is also found that the

parties have fixed a specific time limit, within which, the sale

transaction should be completed. It is noted that as per the terms

prescribed in the sale agreement, the parties have agreed that before

expiry of 90 days from the date of the sale agreement, the sale

transaction should be completed.

In other words, it is noted that the parties have agreed that

the time should be essence of the sale agreement.

According to the plaintiff, inasmuch as the first defendant

had failed to clear the loan amount pending with the second

defendant bank and obtain the documents of title pertaining to the

suit property and hand over the same to her, the transaction could not

be completed and hence, according to the plaintiff, though she was

always ready and willing to perform her part of the contract, on

account of the laches and failure on the part of the first defendant,

the sale transaction could not be completed and left with no other

alternative, according to the plaintiff, she has sent the pre-suit notice

on 31.03.2012 and as the first defendant refuted the same containing

untenable allegations by way of a reply notice on 14.04.2012, it is

the case of the plaintiff that she has been constrained to lay the suit

for specific performance.

Even though there is a condition in the sale agreement that

the first defendant should settle the loan account with the second

defendant bank and get the original documents and thereby, complete

the sale transaction, it is for the plaintiff to establish that as regards

her readiness and willingness to complete the sale transaction, she

has been ever ready from the inception of the sale agreement. When

both parties admit that a specific time limit fixed for completing the

sale transaction, when it is found to expire on 22.10.2009, it is to be

proved by the plaintiff that right from 23.07.2009, she has been ready

to complete the sale transaction. However, it is found that even with

regard to her readiness and willingness before the period fixed in the

sale agreement, there is no acceptable and reliable evidence produced

by the plaintiff. The plaintiff has not established that she had been

possessed of adequate capacity to pay the balance sale consideration

amounting to Rs.18,00,000/- on or before the time limit prescribed in

the sale agreement. With reference to the above position, there is no

reliable evidence adduced on the side of the plaintiff. The plaintiff has

not placed any material to show that she was possessed of adequate

means to complete the sale transaction. The documents marked on

her side Exs.P1 to 7 do not vouchsafe the above aspect of the

plaintiff''s case. It is found that the time limit fixed in the sale

agreement expires on 22.10.2009, even thereafter, the plaintiff has

not expressed her readiness and willingness to complete the sale

transaction by tendering the balance sale amount to the first

defendant as prescribed in the sale agreement. On the other hand, it

is noted that at fag end of the third year, after the date fixed in the

sale agreement, it is found that for the first time only on 31.03.2012,

the plaintiff has chosen to issue the legal notice to the first defendant

calling upon her to complete the sale transaction as per the sale

agreement. Prior to the same, there is no material on the part of the

plaintiff to establish that she had been always ready and willing to

perform her part of the contract. It is found that only after the first

defendant had reputed the case of the plaintiff by issuing a reply

notice, it is noted that the plaintiff has instituted the suit for specific

performance.

The relief of specific performance being a discretionary and

equitable remedy, the party coming forward seeking such a relief

should establish her case to be a genuine one. In other words, the

plaintiff has to establish that she has always been ready and willing to

perform her part of the contract. The sine qua non element for the

establishment of the plea of readiness and willingness on the part of

the plaintiff being conspicuously absent in the present case and the

plaintiff having not taken any steps to establish that aspect of the

matter, as rightly contended by the first defendant''s counsel, the very

fact that the plaintiff has failed to establish her readiness and

willingness to perform her part of the contract, since the date of the

sale agreement, it is found that the plaintiff would not be entitled to

seek the discretionary and equitable remedy of the specific

performance sought for by her in respect of the sale agreement dated

23.07.2009.

It is contended by the plaintiff''s counsel that inasmuch as

the first defendant has failed to settle the loan account and retrieve

the original documents pertaining to the suit property, the sale

transaction could not be gone through. The mere failure on the part of

the defendant alone would not be sufficient. It is for the plaintiff to

establish that she has been always ready and willing to perform her

part of the contract from the commencement of the sale agreement.

That aspect of the matter having not been complied with by the

plaintiff and not also established by acceptable and reliable evidence,

it is found that the plaintiff has failed to establish that she was having

sufficient means and ready to pay the balance sale consideration

within the time limit specified in the sale agreement and even

thereafter to complete the sale transaction. In such view of the

matter, it is found that the plaintiff cannot be allowed to base her

relief on the loopholes in the defendants'' case and thereby, try to

succeed in her case without establishing her entitlement to obtain the

relief sought for.

In the light of the above discussions, I hold that the plaintiff

has failed to establish that she has been ready and willing to perform

her part of the contract in respect of the sale agreement dated

23.07.2009 and hence, I hold that the plaintiff is not entitled to

obtain decree for specific performance of the above mentioned sale

agreement. Accordingly, issue Nos.1 & 2 are answered against the

plaintiff.

ISSUE NO.3:

The plaintiff has also, in the alternative, sought the relief of

refund of advance amount with interest. As adverted to earlier, the

first defendant has admitted the receipt of Rs.32,50,000/- from the

plaintiff towards the sale consideration, pursuant to the sale

agreement dated 23.07.2009. In such view of the matter, it is found

that the first defendant is liable to return the said amount to the

plaintiff, inasmuch as it has been held that the plaintiff is not entitled

to obtain the relief of specific performance.

However, it is argued by the first defendant''s counsel that

inasmuch as the plaintiff has been put in possession of the suit

property, pursuant to the sale agreement, on the basis of the payment

of the lease amount and enjoying the benefits thereof, according to

the first defendant''s counsel, the plaintiff cannot also seek the relief

of refund of advance amount as claimed in the plaint. However, the

above contention of the first defendant''s counsel cannot be accepted .

It is found that as per the terms set out in the sale agreement, the

plaintiff has paid the part of the sale consideration amounting to

Rs.32,50,000/-. It is also noted only pursuant to the sale agreement

above referred to, the plaintiff had been put in possession of the suit

property. In such view of the matter, when it has not been established

that the plaintiff had been placed in possession of the suit property

otherwise than under the sale agreement and also the plaintiff

possession and enjoyment of the suit property is illegal or contrary to

the law, the contention of the first defendant''s counsel that the

plaintiff would not be entitled to obtain the relief of refund of the

advance amount claimed by her is not sustainable.

In the light of the above position and also the clear

admission on the part of the first defendant that the plaintiff has paid

a sum of Rs.32,50,000/- towards the sale consideration under the sale

agreement dated 23.07.2009, it is found that in the interest of justice,

the plaintiff should be given back the said amount.

However, it is noted that the plaintiff has sought the return

of the refund of the advance amount with interest at the rate of 24%

from the date of the agreement, till the date of realization. However,

considering the transaction entered into between the parties, in my

opinion, in the interest of justice, it would be sufficient, if the first

defendant is ordered to pay the refund of the sum of Rs.32,50,000/-

with interest at the rate of 12% per annum from the date of the sale

agreement, till the date of the decree and thereafter, at 6% till the

date of realization.

In support of the plaintiff''s case, the decision reported in

2010-2-L.W.368 (A.Ramadas Rao V. M/s.J.P.Builders, rep.by its

Proprietor and another) is relied upon, however, considering the

facts and circumstances of the present case, as rightly contended by

the first defendant''s counsel, the above citation is found to be not

applicable. Still the principles of law outlined in the above said case

are taken into consideration and followed as applicable.

In the light of the above reasons, I hold that the plaintiff is not

entitled to obtain the relief of specific performance sought for in the

plaint in respect of the sale agreement dated 23.07.2009, I hold that

the plaintiff is entitled to the refund of the advance amount from the

first defendant amounting to Rs.32,50,000/- with interest at 12% per

annum from the date of agreement till the date of decree and

thereafter, at 6% per annum till the date of realization. Accordingly,

the suit is decreed in part in favour of the plaintiff against the first

defendant. I further hold that the plaintiff is not entitled to obtain the

relief of permanent injunction as claimed. The plaintiff''s suit as

against the defendants 2 & 3 is dismissed. Considering the facts and

circumstances of the case, there is no order as to costs.