Madras High Court
L.Satishkumar vs M.Selva Ganesan on 31 August, 2021
Author: V. Parthiban
Bench: V.Parthiban
O.A.No.132 of 2020 in C.S.No.84 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Orders Reserved on : 11.08.2021
Orders Pronounced on : 31.08.2021
Coram:
THE HONOURABLE MR.JUSTICE V.PARTHIBAN
O.A.No.132 of 2020 in C.S.No.84 of 2020
1. L.Satishkumar, S/o Late Lakshmipathy
2. V.Rupa, W/o L.Sathishkumar .. Applicants/plaintiffs
Vs.
1. M.Selva Ganesan, S/o Late Mariappa Chettiar
2. Mrs.Hema Janaki, W/o Late M.Bala Govindan .. Respondents/defendants
Judge's Summons issued under Order XIV Rule 8 of the Original
Side Rules of this Court read with Order 39 Rules 1 and 2 of the Code of
Civil Procedure (CPC), and application is filed praying to pass an order of
interim injunction restraining the respondents, their men, agents,
subordinates or any other person claiming under them from alienating or
encumbering the suit schedule property in any manner, pending disposal of
the suit.
Suit Schedule Property
All that piece and parcel of land and building bearing Old Door
No.7, New Door No.23, Thiru.Vi.Ka.Street, Ayanavaram, Chennai-600 023,
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O.A.No.132 of 2020 in C.S.No.84 of 2020
comprised in Paimash No.14/1, Patta No.449 of Ayanavaram Village,
Ayanavaram Taluk, Chennai District, as per Patta C.A.No.1255/2014,
SD/TR/1750/2014, Old Survey No.63/1 Part, T.S.No.97/6, Block No.9,
T.S.No.63/1, land measuring 2400 Sq.Ft. along with building in ground and
1st floor, E.B.Connection and water Drainage connection and bounded on
the:
North by : Property of Seetharamma
South by : Property of Kanniappan
East by : Property of Ranganayakiammal
West by : 18 feet Road
measuring
East to West on the Northern Side: 62 feet
East to West on the Southern side : 61-1/4 feet
North to South on Eastern side : 35-1/2 feet
North to South on Western side : 38-1/4 feet
Land measuring 2400 Sq.Ft.
The aforesaid property is situate within the Sub-Registration
District of Anna Nagar and Registration District of Chennai-Central.
For applicants : Mr.S.Senthilnathan
For respondents: Mr.Ravi Kiran for M/s.S.Motilal
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O.A.No.132 of 2020 in C.S.No.84 of 2020
ORDER
The applicants are the plaintiffs in the suit and the respondents are the defendants.
2. The suit is filed for the following reliefs:
(a) to direct the defendants to execute and register a sale deed in respect of the schedule mentioned property to the plaintiff on depositing the balance sale consideration of Rs.1,43,64,997/- in the Court to the credit of the above suit, within a date to be fixed by this Court and in default thereof, this Court may execute and register the sale deed in favour of the plaintiffs, in the alternative,
(b) to direct the defendants to refund the advance amount of Rs.41,35,003/- with interest at the rate of 18% on the advance amount from the date of agreement till the date of plaint, i.e. Rs.13,31,470/- along with future interest at the rate of 18% from the date of plaint till the date of realisation;
(c) to grant permanent injunction restraining the defendants, their Page No.3/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 men, agents, subordinates or any other person claiming under her from alienating or encumbering the suit schedule property in any manner, and
(d) to pay the costs of the suit.
3. The case of the applicants/plaintiffs is that they have entered into a sale agreement with the first defendant and his brother M.Bala Govindan on 26.02.2018, whereby they have agreed to sell the house property bearing Old No.7, New No.23, Thiru.Vi.Ka.Street, Ayanavaram, Chennai, measuring 2400 Sq.Ft. for a sale consideration of Rs.1,85,00,000/-. The applicants/plaintiffs had paid the advance amount of Rs.12 lakhs on the date of the agreement and as per the agreement, the balance sale consideration of Rs.1,73,00,000/- be paid on or before 26.05.2018. According to the agreement between the parties, the first defendant and his deceased brother M.Bala Govindan had agreed to measure the property and obtain Encumbrance Certificate and clear the encumbrances, if any and pay the taxes upto date and make arrangements for delivering vacant possession and produce the original document for inspection on or before 26.05.2018. According to the applicants/plaintiffs, Page No.4/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 neither the first defendant nor his deceased brother performed their part of the contract within the stipulated time.
4. According to the applicants/plaintiffs, though they were ready with the balance sale consideration and requested the first defendant and his deceased brother during March 2018 to arrange for vacant possession to be handed over to them on entering into sale transaction, the same did not happen.
5. While matters stood thus, the brother of the first defendant, i.e.Mr.M.Bala Govindan fell seriously sick and was hospitalised. During the time, the second defendant who was the wife of the said Bala Govindan, approached the second applicant/second plaintiff and requested some money for treatment of her late husband. Considering the plight of the defendants, a sum of Rs.29,35,003/- had been paid, which was agreed to be adjusted for the balance sale consideration payable by the plaintiffs.
6. As the said Bala Govindan was critically ill, in order to secure Page No.5/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 the amount given to them, the plaintiffs requested the defendants to execute a loan agreement, which was also entered into between the parties on 26.09.2018. The case of the applicants/plaintiffs is that the said loan agreement was not intended to be a mere loan agreement, but was also to be treated as part of the sale consideration payable by the plaintiffs towards the purchase of the subject property.
7. The total sale consideration thus paid was Rs.41,35,003/- as advance. After the death of the second defendant's husband, several times the defendants were approached in 2019, and there was no proper response forthcoming from them. The defendants had also not performed their part of the contract towards vacating the tenants in the premises and arrange for vacant possession to be handed over to the plaintiffs. Further, no original document relating to the property, had also been provided to the applicants/plaintiffs. On the whole, the defendants did not comply with all the conditions laid down in the sale agreement as agreed between the parties. In the said circumstances, the suit has been filed for specific performance.
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8. The suit has been resisted by the defendants on the ground that there was no valid agreement of sale, as the sale agreement was unregistered document, and therefore, the agreement is unenforceable in law. Further, the amount of Rs.29,35,003/- had been given only as a loan and the transaction is only in the realm of relationship as lender and borrower and therefore, the question of seeking specific performance did not arise at all. According to the respondents/defendants, the suit for specific performance is not maintainable on the basis of the loan transaction. It was also further averred by the defendants that arraying the second defendant as a party in the suit amounted to mis-joinder of parties, as she was never a party to any of the discussion and transaction relating to the sale agreement. The said suit is also to be dismissed for non-joinder of parties as the available Class-I heir of the respondents, has also not been impleaded. Therefore, the defendants pleaded that the suit itself is not maintainable.
9. The learned counsel for the applicants/plaiantiffs reiterated the above facts and submitted that the agreement of sale is to be read as a Page No.7/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 whole. According to him, none of the conditions which was to be performed by the defendants under the agreement, had been fulfilled on their side. He would specifically draw reference to the sale agreement, dated 26.02.2018, wherein a specific clause has been incorporated which stipulated that the defendants need to survey and measure the property, obtain Encumbrance Certificate, clear any encumbrances if any and taxes to be paid upto date and also make arrangements for delivering the vacant possession along with the original title documents for inspection on or before 26.05.2018. When the agreement of sale spelt out such conditions to be performed by the defendants, no earnest action had been taken from their end towards the fulfilment of their obligations under the agreement.
10. While on the one hand, the defendants were not performing their part of the contract, on the other hand, they are attempting to create encumbrances in the suit property by attempting to sell the same to third parties. According to the applicants/plaintiffs, the defendants are attempting to suppress the sale agreement, dated 26.02.2018 in order to sell the suit property to third parties which would inevitably invite third party rights in Page No.8/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 the subject property. If the respondents are not prevented by this Court, the suit property would be illegally encumbered, detrimental to the interest of the applicants/plaintiffs. In the said circumstances, the balance of convenience is entirely in favour of the applicants/plaintiffs for grant of interim injunction in their favour.
11. Per contra, learned counsel appearing for the respondents/defendants, after reiterating the above facts, submitted that the suit itself is not maintainable, for the reason that the document, namely, sale agreement is an unregistered document. According to him, the suit also suffers from various other legal infirmities like mis-joinder and non-joinder of necessary parties and more importantly, the loan transaction is being given the colour of sale agreement, and therefore, the maintainability of the suit itself is doubtful and in the said circumstances, the question of granting interim injunction, pending disposal of the suit, does not arise. He therefore submitted that there is no merit in this application and therefore, requested this Court to dismiss the present application.
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12. Heard the learned counsel appearing for the parties, perused the pleadings and the materials placed on record.
13. In fact, on behalf of the respondents/defendants, earlier an application was filed in A.No.2520 of 2020 for rejection of the plaint. This Court, after going through the entire averments and the dispute between the parties, had rejected the said application, vide its order dated 09.07.2021. In that order itself, some of the important legal objections have been addressed by this Court and eventually rejected, as those objections were found to have no legal force at all.
14. As far as the objection as to the enforceability of the document, namely the sale agreement being not registered, the learned counsel for the applicants/plaintiffs had drawn the attention of this Court to the Registration Act, 1908, and particularly, to Section 49 therein, which reads as under:
"Section 49: Effect of non-registration of documents required to be registered:- No document required by Page No.10/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 Section 17 or by any provision of the Transfer of Property Act, 1882 (IV of 1882), to be registered shall--
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (IV of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (I of 1877), or as evidence of any collateral transaction not required to be effected by registered instrument."
15. The proviso as extracted above, makes it clear that the unregistered document of any immovable property may be received as evidence of a contract in a suit for specific performance. Page No.11/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020
16. In fact, the learned counsel for the petitioner has also relied upon a decision of the Supreme Court reported in 2018 (7) SCC 639 (Ameer Minhaj Vs. Dierdre Elizabeth (Wright) Issar), wherein he drew reference to paragraphs 9 and 10 of the judgment, which are extracted hereunder:
"9. In other words, the core issue to be answered in the present appeal is whether the suit agreement dated 9-7-2003, on the basis of which relief of specific performance has been claimed, could be received as evidence as it is not a registered document. Section 17(1-A) of the 1908 Act came into force with effect from 24-9-2001. Whereas, the suit agreement was executed subsequently on 9-7-2003. Section 17(1-A) of the 1908 Act reads thus:
“17. Documents of which registration is compulsory.—(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act 16 of 1864, or the Indian Registration Act, 1866 (20 of 1866), or the Indian Registration Act, 1871 (8 of 1871) or the Indian Registration Act, 1877 (3 of 1877), or this Act came or comes into force, namely— * * * (1-A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53-A of the Transfer of Property Act, Page No.12/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said Section 53-A.”
10. On a plain reading of this provision, it is amply clear that the document containing contract to transfer the right, title or interest in an immovable property for consideration is required to be registered, if the party wants to rely on the same for the purposes of Section 53-A of the 1882 Act to protect its possession over the stated property. If it is not a registered document, the only consequence provided in this provision is to declare that such document shall have no effect for the purposes of the said Section 53-A of the 1882 Act.
The issue, in our opinion, is no more res integra. In S. Kaladevi v. V.R. Somasundaram [S. Kaladevi v. V.R. Somasundaram, (2010) 5 SCC 401 : (2010) 2 SCC (Civ) 424] this Court has restated the legal position that when an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received as evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of the 1908 Act."
17. In the light of the clear provision itself, coupled with the Page No.13/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 ruling of the Honourable Supreme Court as above, the main the main defence taken by the defendants, on a prima-facie consideration, is liable to be rejected.
18. Even otherwise, the resistance put up by the respondents/defendants appears to be rickety and feeble in response to the case of the applicants/plaintiffs. The defence taken that the loan transaction has been converted into a sale transaction, and therefore, the suit itself is not maintainable, also appears to be without substance for the reason that the circumstances under which the loan was given, had been clearly explained in the plaint averments as well as in the affidavit filed in support of the application. When there is an understanding that the loan advanced by the plaintiffs would be adjusted as part payment of the sale transaction, it is for the respondents/defendants to establish that it was merely a loan transaction and not intended to be a part payment of the sale agreement. In any event, these are all matters to be tried at the time of final determination of the suit.
19. As far as the present injunction application is concerned, this Page No.14/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 Court has to focus more its attention on the balance of convenience. It appears from the averments of the applicants/plaintiffs and the counter averments of the respondents/defendants that the respondents/defendants had not categorically spelt out as to why they did not make any sincere attempt to perform their part of the contractual obligation. On the other hand, they have embarked upon specious pleas as to the very maintainability of the suit itself, raising some untenable grounds. On a prima-facie consideration, the objection as to the maintainability of the suit is to be discountenanced with reference to Section 49 of the Registration Act, 1908 and the Honourable Supreme Court's ruling as aforementioned.
20. Be that as it may. There is a clear averment in the plaint that the respondents/defendants are attempting to alienate the property by creating third party rights, notwithstanding the fact of sale agreement entered into between the plaintiffs and the respondents on 26.05.2018.
21. In any case, the fact of the matter is that the respondents/defendants have received huge payments from the plaintiffs Page No.15/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 and such payments in the context of sale agreement entered into between the parties, dated 26.05.2018, should be construed to be as part of the sale transaction, for the purpose of consideration of the present injunction application.
22. When this Court finds that hardly any notable or worthy averments which can be considered as serious defence on the part of the respondents/defendants in response to the case of the applicants/plaintiffs, the balance of convenience ought to be held in favour of the applicants/plaintiffs. This Court, in the entirety of the averments placed for consideration by this Court, does not see any strong case put up by the respondents/defendants, tilting the scale of balance of convenience in their favour. But, on the other hand, the applicants/plaintiffs have established more than a prima-facie case for grant of relief of interim injunction, pending disposal of the suit.
23. For the above said reasons, in the interim injunction application, there shall be an order of interim injunction as prayed for. Page No.16/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 O.A.No.132 of 2020 is allowed. No costs.
24. Post the suit for filing of written statement on 28.09.2021.
31.08.2021 Index: Yes/no Speaking Orders:Yes cs Page No.17/18 https://www.mhc.tn.gov.in/judis/ O.A.No.132 of 2020 in C.S.No.84 of 2020 V. PARTHIBAN, J cs Pre-delivery Order in O.A.No.132 of 2020 in C.S.No.84 of 2020 Order pronounced on 31.08.2021 Page No.18/18 https://www.mhc.tn.gov.in/judis/