Andhra HC (Pre-Telangana)
Baratam Manmadha Rao vs Sri Raja Rao Rangamannar Krishna Ranga ... on 30 July, 1992
Equivalent citations: 1992(3)ALT239
JUDGMENT G. Radhakrishna Rao, J.
1. This is an appeal preferred against the judgment and decree dated 24th April, 1982 passed by the learned Subordinate Judge, Parvathipuram, in O.S. No. 56 of 1978 on his file. The plaintiff is the appellant. His suit for specific performance of agreement to sell dated 16-11-1977 (Ex.A-1), after full trial, was dismissed by the trial Court.
2. The case of the plaintiff is that the 1st defendant agreed to sell the plaint schedule property, viz., Sri Venugopal Talkies, to the plaintiff. The terms were settled between the plaintiff and the 1st defendant in the presence of P.W. 2, Varanasi Eswara Rao and the terms agreed to between the parties are that the plaintiff should pay a price of Rs. 3,01,111/- that the 1st defendant should take back the 2nd defendant into his own service and that the plaintiff should employ the rest of the staff. The 1st defendant's plea is that he was in dire necessity for money as the theatre was attached by four decrees and that it was subjected to many mortgages and so he entered into the suit agreement but he could not deliver physical possession of the theatre as it was subjected to lease given in favour of defendants 2 to 5 even prior to the execution of the agreement to sell.
3. The 1st defendant relied upon Ex.B-1 lease deed executed by him in favour of defendants 2 to 5 agreeing to give the cinema theatre on lease. Under the said lease deed Ex.B-1, among other conditions, defendants 2 to 5 have agreed to pay a net income of Rs. 150/- every day by way of rent to the 1st defendant. Ex.B-2 is confirmatory agreement dated 29-10-1976 executed by the lst dfendant in favour of defendants 2 to 5 and Ex.B-3 is agreement of lease or rent note dated 17-8-1977 executed by the 1st defendant in favour of defendants 2 to 5 in respect of out-houses, covered by confirmatory agreement Ex.B-2 dated 29-10-1976, for a monthly rent of Rs. 100/-.
4. The case of defendants 2 to 5 is that the cinema theatre was given on lease in their favour under Ex.B-1 lease deed and subsequently the out-houses were also given to them under Exs.B-2 to B-3, that they are statutory tenants in respect of the cinema theatre including the out-houses and even after expiry of the lease, defendants 2 to 5 have been continuing as tenants holding over and that their tenancy rights have to be protected.
5. In effect, the contention of the 1st defendant as well as defendants 2 to 5 is that the plaintiff is entitled to only symbolical delivery of the theatre in question, subject to the lease subsisting in favour of defendants 2 to 5 and not physical possession.
6. The plaintiff's case is that the lease was invented and created by the 1st defendant with the active assistance of defendants 2 to 5 with a view to coerce the plaintiff to resile from the sale agreement entered into between him and the 1st defendant, that the lease set up by the defendants is not correct and that he is entitled for physical delivery of possession of the cinema theatre excluding the 2nd defendant from the management.
7. The sequence of events are as follows:- On 16-11-1977 the plaintiff negotiated with the 1st defendant in the presence of Varanasi Eswara Rao (P.W. 2) for the purchase of Sri Venugopal Talkies. Accordingly the lstdefendant executed Ex.A-1 letter dated 16-11-1977 stating that he has agreed to sell the cinema theatre for a sum of Rs. 3,01,111/- and to take back the Manager, P. Saryam, 2nd defendant in the suit, into his own service. After the execution of Ex.A-1 letter, the 1st defendant wrote Ex.X-1 letter dated 28-11-1977 to P.W. 2 explaining that the removal of the Manager, referred to in Ex. A-1, is not possible and so Ex.A-1 should stand cancelled. Thereupon, the plaintiff met the 1st defendant and was informed about the situation. Tine 1st defendant wrote Ex.X-2 letter dated 1-12-1977 to P.W. 2 asking him to get back Ex.A-1 letter signed by him on 16-11-1977. Subsequently the plaintiff issued a registered notice dated 22-12-1977 to the 1st defendant, office copy of which is marked as Ex.A-2, stating that he was ready to pay the sale consideration. On 29-12-1977 the 1st defendant issued a telegram (Ex.A-4) to the plaintiff requesting him to purchase the stamp paper, engross the sale deed and attend the Sub-Registrar's Office on 30-12-1977 and to pay the entire sale consideration. There was no reply for the telegram and the plaintiff failed to attend the Sub-Registrar's Office ori 30-12-1977. However, on 31-12-1977 the plaintiff got issued Exs.A-5 and A-6 telegrams through his advocate to the 1st defendant asking him to send the draft sale deed, for approval. Ex.A-8 is the reply notice given by the 1st defendant dated 2-1-1978 to the plaintiff requesting him (the plaintiff) to be present at the Sub-Registrar's Office at Parvathipuram on 9-1-1978. A second opportunity was given to the plaintiff for registration of the sale deed and for payment of the entire sale consideration. It was also made clear in Ex. A-8 reply notice that in case the plaintiff failed to do so, the sale agreement (Ex.A-1 shall stand cancelled by the evening of 9-1-1978. Ex. A-7 is a registered notice dated 2-1-1978 issued by defendants 3 to 5 to the plaintiff, defendants 1 and 2 and Varanasi Eswara Rao (P.W. 2) anticipating collusion as between the 2nd defendant and the plaintiff and the 1st defendant to set at naught the lease. According to the 1st defendant, he attended to the Sub-Registrar's Office on 9-1-1978 and waited for the plaintiff and as he did not turn up, the 1st defendant gave an application Ex.B-8 to the Sub-Registrar requesting him to issue a certificate that he attended and waited at the Sub-Registrar's Office on 9-1-1978. Ex.B-9 is the endorsement dated 9-1-1978 made by the Sub-Registrar on the reverse of the application of the 1st defendant (Ex.B-8) to the effect that the 1st defendant was at the Sub-Registrar's Office on 9-1-1978. The plaintiff issued a telegram dated 11-1-1978 (Ex.A-9) to the 1st defendant agreeing for registration subject to conditions mentioned in Ex.A-10 registered notice dated 11-1-1978. In this Ex.A-10 registered notice issued by the plaintiff to the 1st defendant, in pursuance of Ex.A-9 telegram, several conditions were stipulated which are to be carried out by the lstdefendant before the registration of the saledeed. Ex.A- 28 is the reply notice dated 17-1-1978 issued by the plaintiff to the 1st defendant in reply to Ex.A~7. Ex. A-12 is another registered letter dated 24-1-78 issued by the 1st defendant to the plaintiff. Ex.B-9 is the application dated 10-2-1978 given by the 1st defendant to the Sub-Registrar, Parvathipuram requesting him to issue a certificate for his attendance in the Sub-Registrar's Office on 10-2-1978 and Ex.B-9(a) and B-9(b) are the endorsements of the Sub-Registrar dated 10-2- 1978 made on the reverse of Ex.B-9 certifying the presence of the 1st defendant in the Sub-Registrar's Office on 10-2-1978. Ex. A-20 is the letter dated 24-2-1978 addressed by Manager, Andhra Bank to the plaintiff regarding the purchase of draft for Rs. 3,01.111/- on 10-2-1978 and date of cancellation of the draft on 16-2-1978.
8. The execution of Ex.A-1 is admitted by both the parties. The plaintiff wanted physical delivery of the possession of the cinema theatre including the out-houses whereas the 1 st defendant wanted to give symbolical delivery of the property subject to the lease said to have been executed by him in favour of defendants 2 to 5. The case of defendants 2 to 5 is that they are tenants under Exs.B-1 to B-3 and that any sale that has been effected will be subject to their lease and only symbolical delivery has to be given.
9. On a consideration of the entire evidence, both oral and documentary, the learned Subordinate Judge ultimately came to the conclusion that defendants 2 to 5 are necessary and proper parties, that the 1st defendant has not committed any breach of the agreement dated 16-11-1977 but it is the plaintiff who has committed breach, and that the out-houses are part of the main building of Sri Venugopal Talkies but they are not intended to be sold by the 1st defendant under the agreement. As regards the plea of tenancy put forward by defendants 2 to 5, the lower court observed that the lease deed Ex.B-3 dated 16-8-1977 is true, valid and binding on the plaintiff since the out-houses were constructed prior to 1957 the tenancy in respect thereof is governed by the provisions of A.P. Act 15 of 1960 and that defendants 2 to 5 have become statutory tenants. The lower court also held that the lease of the cinema theatre under Ex.B-1 by the 1st defendant in favour of defendants 2 to 5 and the confirmation of lease under Ex.B-2 are true, valid and binding on the parties. Ultimately the lower court dismissed the suit of the plaintiff.
10. Mr. P. Ramachandra Reddy, learned counsel appearing for the appellant- plaintiff contended that since the suit agreement Ex.A-1 has been admitted by the 1st defendant and proved, the lower court erred in construing that there was a lease in favour of defendants 2 to 5 which was created only for the purpose of defeating the rights of the plaintiff under the suit agreement Ex. A-l and that the court below was not justified in refusing to grant specific performance of the agreement to sell. On the other hand, Mr. T. Ananthababu, learned counsel appearing for the defendants has contended that as there was failure on the part of the plaintiff to comply with the terms and conditions stipulated in the agreement Ex.A-1 inspite of three chances having been given to him, the 1st defendant has rightly determined the sale agreement and that the plaintiff is not entitled for specific performance as pleaded by him. It is also contended by Sri T. Ananthababu, learned counsel for the defendants mat the plaintiff has no capacity to raise a huge amount of rupees three lakhs and odd and that he has failed to aver or prove that he was ready and willing to perform his part of the contract in spite of three chances given to him and so it has to be construed that the plaintiff is not entitled for the relief of specific performance, claimed by him, in view of the statutory provision contained in Section 16(e) of the Sped fie Relief Act.
11. It is not in dispute that the plaintiff obtained a draft from Andhra Bank for Rs. 3,01,111/-, and that the same was subsequently cancelled. Ex.A-13, which is a certificate dated 7-2-1978, issued by the Andhra Bank, Rayaghada, to the plaintiff, shows that the plaintiff has deposited a sum of Rs. 3,04,724-18 in his S.B. Account No. 7, and Ex. A-27 exchange memo of the Andhra Bank shows that the plaintiff had obtained a draft for Rs. 3,01,201-50. It is, therefore, clear from the documents Exs.A-13 and A-27 and also the pleadings of both the parties, that the obtaining of a draft on that particular day is correct. But, according to the defendants, it was only a stage-managed transaction to male believe the court that the plaintiff is ready with the money. The defendants contend that the plaintiff has no capacity at all to raise such a huge amount. Even in the written statement the 1st defendant has admitted about the plaintiff depositing the amount and taking of the draft but he contended that the plaintiff has no capacity.
12. The evidence of P.W.I and P.W. 2 shows that the plaintiff (P.W.I) was having business and he is a landlord having agricultural lands and subsequent to the sale transaction he has not incurred any loans. The 1st defendant himself has admitted even in the written statement that the plaintiff has got rich relations. The plaintiff has stated in his cross-examination that he is doing business in oil seeds and that he paid income tax, that he did not sell either gold or land subsequent to Ex.A-1 nor did he incur any loans. He further deposed that his account books from the date of Ex.A-1 show that he possessed a cash of Rs. 3,00,000/- and odd and that he operates accounts both in the State Bank of India and Andhra Bank. P.W. 2 has also spoken about the financial capacity of the plaintiff. Thus, the evidence of P.w.s. 1 and 2 and D.W. 2, coupled with the correspondence and bank receipts, indicates that the potentiality of the plaintiff in raising the funds cannot be disputed, and that the plaintiff has got means to pay the sale consideration. The very fact that the plaintiff has obtained a draft for the entire sale consideration within a short time is a clear indication that he has got sufficient means. Further, the fact of the plaintiff having lands and business and his credit-worthiness has been spoken to by P.W. 2 who has got an opportunity to find out the financial stability of the plaintiff, as the bank in which P.W. 2 is working is opposite to the house of the plaintiff. P.W. 2 also asserts that the plaintiff is one of the rich persons in Rayagada. At para 8 of the plaint the plaintiff averted as follows:
"The plaintiff is ready and willing to deposit the sale consideration amount as and when the court directs him to do so."
Cross-examination also has been directed on this point and the answers elicited in the cross-examination do not throw any doubt about the capacity of the plaintiff in raising the funds within a given time for obtaining the sale deed. On this point the case law is very clear. Reliance can be placed on the following decisions, viz., Mahmood Khan v. Ayub Khan, .; Ouseph Varghese v. Joseph Aley and Ors., ; H.C. Krishna Reddy & Co., v. MM. Thimmaiah .; Pmbhakaran v. Bliavani, and G. Shivayya v. Shivappa Basappa, . The analysis that has to be drawn from the above cited judgments is that Form No. 47 of Appendix 'A' of the First Schedule of the Civil Procedure Code is also to the same effect as contained in Section 16(c) of the Specific Relief Act. Para 3 of Form 47 contemplates that in a suit for specific performance it must be averred in the plaint that the plaintiff has been and still is ready and willing specifically to perform the agreement on his part of which the defendant has had notice. In view of the requirements of para 3 of Form No. 47 of Appendix 'A' of the First Schedule of the CivilProcedure Code and in view of the mandate of Section 16(c) of the Specific Relief Act, it has become obligatory for the plaintiff not only to aver in the plaint but also to prove by evidence that the plaintiff has always been ready and willing to perform his part of the contract. If the requirement of law is that there should be an averment in the plaint and also proof, the plaintiff cannot succeed merely by giving evidence of his readiness to perform his part of the contract. The first requirement is that he must aver in the plaint. Indeed, the question of evidence of proving a particular fact would come only when there is an allegation in the plaint to that effect. Since there is an averment in the plaint, which has been extracted above, about the plaintiff's readiness to perform his part of the contract, which is also supported by cogent and convincing oral and documentary evidence, viz., by obtaining a draft from the Bank as evidenced by Ex.A-27 exchange memo and the certificate Ex.A-20 given by the Manager of Andhra Bank regarding the purchase of a draft by the plaintiff on 10-2-1978 for Rs. 3,01,111/- and cancellation of the same on 16-2-1978, we feel that there is substantial compliance of the requirements of Section 16(c) of the Specific Relief Act. The evidence of D.Ws. 1 and 2 is merely negative in character but at the same time they too admit about the plaintiff obtaining a draft. Under these circumstances, the argument of Mr. T.Anantha Babu, learned counsel for the defendants that there is no averment in the plaint regarding his readiness to perform the contract and that the suit has to be thrown out on that ground cannot be accepted.
13. The next point that falls for consideration in this appeal is whether there was a valid lease of the theatre executed by the 1st defendant in favour of defendants 2 to 5. The case of the 1st defendant is that he has executed a lease deed, dated 15-5-1976 under Ex.B-1 in favour of defendants 2 to 5 in respect of the cinema hall and that on 29-10-1976 he has also executed a confirmatory agreement under Ex.B-2. The 1st defendant has also executed agreement of lease in favour of defendants 2 to 5 under Ex.B-3 dated 17-8 1977 in favour of defendants 2 to 5 in respect of the out-houses. The contention of the defendants is that the plaintiff is fully aware by the date of Ex.A-1 sale agreement that defendants 2 to 5 are lessees in respect of the suit cinema theatre under the 1st defendant. On the other hand it is the case of the plaintiff that he has no knowledge of the existence of any lease between the 1st defendant and defendants 2 to 5 in respect of the cinema theatre. We shall now proceed to examine this contention in the light of the evidence, both oral and documentary, adduced on either side.
14. In Ex.A-1 it has been mentioned that the 2nd defendant has to be taken into the personal service of the 1st defendant. The fact that the 2nd defendant, who has been examined as D.W.I, was in the management of the theatre in question is not in dispute. The second defendant was a general power of attorney holder not only for the 1st defendant but also for the 1st defendant's father while he was alive and that he was working as a clerk and also held some other position even during the life time of the grand-father of the 1st defendant. Rajahs generally depend upon the Managers or the clerks for the purpose of running their estate at that time but even after the Kirlampudi Estate was taken over the services of the 2nd defendant were continued by the father of the 1st defendant during his life time and after his death by the 1st defendant and the 2nd defendant was allowed to continue as a general power of attorney holder. As it was well-known that since the times of the grand father of the 1st defendant, the 2nd defendant was having complete control over the management of the estate of the 1st defendant's family, the plaintiff might have thought it fit to remove him from the management of the theatre and that is why a clause was incorporated in Ex.A-1 that the 1st defendant should take back the 2nd defendant into his own service excluding him from the management of the cinema theatre in question. The 2nd defendant as D.W.I has admitted in his evidence that he was drawing salary both as Manager of the theatre and also as Manager of the Estate of the 1 st defendant. The influence that the 2nd defendant can yield over the 1st defendant is much more than the one we expect as the 1st defendant was unable to manage the theatre by himself, he having been residing at a far off place i.e., at Visakahpatnam. It is an admitted fact that the theatre was running in losses at that time and there are many attachments over the theatre and it was also subjected to many mortgages. Under these circumstances the statement of the 1st defendant that he entertained the idea of selling the theatre for discharging the debts must be a genuine one. But we have to examine whether the lease said to have been executed by the 1st defendant in favour of defendants 2 to 5 under Exs.B-1 to B-3, is correct or not. In Ex.A-ldated 16-11-1977 there is no mention about the lease. There is only one clause, among others, that the 2nd defendant has to be taken back into the personal service of the 1st defendant thereby completely excluding him from the management of the theatre. Exs.X-1 and X-2 will throw light about the reason for not shifting the 2nd defendant from the management of the theatre. The reason that has been spelt out from Exs.X-1 and X-2 is not that there was a lease in favour of defendants 2 to 5 but it is some other reason. From a reading of Ex.X-1 it is revealed that on 25th December 1975 there was income-tax raid in the palace of the 1st defendant and in that connection some declarations were given and until, the income tax [matter is finalised, the 1st defendant is completely in the grip of the 2nd defendant. The 2nd defendant is a general power of attorney for 1st defendant and he made declarations and he is the person who knows about the family estate from the time of the 1st defendant's grand father. Under those circumstances the fear that has been explained by him is only to get over the implications of the income-tax raid but not to get over the lease granted by the 1st defendant in favour of defendants 2 to 5. Ex.X-2 is dated 1st December 1977. The alleged leases that were set up are prior to 16-11-1977. If really these lease deeds were there in existence, definitely a reference would have been made about the lease deeds in Ex.X-1 or X-2 letters. To gain strength about the existence of these lease deeds, D.Ws. 1 and 2 relied upon the income tax returns and other documents connected thereto. The learned trial Judge, though recorded the evidence, had lost sight of the fact that the income-tax returns were filed only on 29-12-1977 and during that year the 2nd defendant was attending the Income-tax Office and he has also submitted Ex.B-10 return after receipt of Exs.X-1 and X-2 letters. The sequence of events already mentioned above is that by 29-12-1977 there was exchange of notices and it is only for the first time the existence of lease is spelt out by the 1st defendant when Ex.A-4 telegram dated 29-12-1977 was issued. In Ex.A-1 there is no mention about the lease. From the very fact that the non-mentioning about the existence of the lease deeds in Ex.A-1 or in Exs. X-1 and X-2 letters and by not mentioning about the existence of the lease deeds at the earliest point of time, we feel that taking advantage of having some stamp papers with the defendants, these three lease deeds Exs.B-1 to B-3 have been brought into existence. The corrections made in the lease deeds and the language employed therein and the terms entered therein are all facts which made this court to feel that the lease deeds were only invented for the purpose of the suit. The fact of not obtaining permission by the lessees for running the cinema from the concerned authorities in their favour as required under the Cinematography Act also is one of the circumstances which belies the lease said to have been executed by the 1st defendant in favour of defendants 2 to 5. It is an admitted case that defendants 2 to 5 are the trusted persons of the 1st defendant and when the 2nd defendant is the person that was making all the show as he has got complete grip over the 1st defendant, the 2nd defendant might have brought into existence the lease deed in their favour to have wrongful gain and to defeat the claims of the plaintiff under Ex.A-1. If in any public document or registered document anterior to Ex.A-1 the fact of lease is mentioned, certainly the court is bound to accept the lease. In none of the letters executed either prior to the agreement (Ex.A-1) or even subsequent thereto (i.e. upto 29-12-1977) there is no mention about the lease deeds. If the fact of lease deed has been mentioned in Ex.A-1 or even informing the plaintiff about the existence of such lease, or even the existence of such lease is known to the person who is parting with huge amount, definitely no person would have entered into such deal because every one knows about the implications of the lease and it will be very difficult to get physical possession of the theatre. D.W.I (i.e., the 2nd defendant) has admitted in his evidence that after the year 1977, i.e., after Ex.A-lthe 1st defendant executed mortgage deeds in respect of his debts. D.W.I has also admitted that on 7-11-1977 the 1st defendant executed a mortgage deed in favour of Tamada Gopalakrishna and others for Rs. 40,000/- and another simple mortgage bond for Rs. 15,000/- in favour of Palavalasa Janaki Devi in respect of the suit cinema theatre. According to him, the 1st defendant had also executed another mortgage deed for Rs. 15,000/- in favour of Lukalapu Jaggarao on 26-11-1977, another mortgage in favour of Pasumarthi Kamalavathi for Rs. 23,200/-. D.W.I has admitted that he presented all these documents for registration in his capacity as the power of attorney holder for the 1st defendant. He also deposed about some civil suits filed against the 1st defendant for recovery of debts due. In none of the mortgage deeds or in the civil suits filed against the st defendant for recovery of debts due from him, not even a whisper is made about the existence of any lease deeds in favour of defendants 2 to 5. Admittedly some of the mortgage deeds were executed even before the execution of Ex.A-l sale agreement and some are executed after Ex.A-1. Similarly several suits were filed against the 1st defendant for recovery of the debts due from him and in some suits attachment of the theatre was also made. If really defendants 2 to 5 are having genuine lease deeds in their favour, they would havecertainly got impleaded in the suits and sought for vacation of the attachment disclosing the lease in their favour. Non-mention of the lease deeds in any of the mortgage deeds or non-disclosure of the lease in any proceedings certainly lead to an irresistable conclusion that these three lease deeds (i.e., Exs.B-1 to B-3) have been pressed into service only to compel the plaintiff to resile from Ex.A-1. Another circumstance which can be taken into consideration is that the 1st defendant is a Rajah and he was not managing the properties of his own and he entrusted the entire management of his estate including the cinema theatre to the 2nd defendant. Admittedly the cinema theatre is running in huge losses, and he had to borrow several loans under mortgage deeds and several suits were filed against him. In such state of affairs, it is highly unbelievable that the 1st defendant would have executed lease deeds. Normally a person in the position of the 1st defendant certainly sells away the property to come out of the debts and court litigation. The 1st defendant being a Rajah, naturally he did not want to become unpopular and so he determined to sell away the property, viz., the cinema theatre and discharge the debts. As the plaintiff had insisted a clause to be incorporated in Ex.A-1 that the 2nd defendant should be taken back into the personal services of the 1st defendant, the 2nd defendant might have hatched up the plan by creating the lease deeds in their favour so that he may not be sent out from the theatre. Another important factor which negatives the lease deed is the corrections made therein. In Ex.B-1 in clause (v) it is originally typed that the lessees agreed to run shows as scheduled with pictures of their choice; and at their complete expenses bearing the following charges: (1) the current charges, (2) to pay all the salaries of the existing staff including the lessees, (3) the carbon charges. But the word "bearing" in that clause was struck off and the word "except" was interpolated with ink, thereby completely changing the object of that clause. Under clause VI it is mentioned that the lessees have agreed to pay a net income of Rs. 150/- only every day by way of rent to the lessor. As per clause V of the lease deed, as stated above, the 1st defendant has to bear all the expenses like current charges,- carbon charges etc., and if all these expenses have to be taken into account the balance that is left to be payable is nil. Significantly enough there is another clause in the lease deed Ex.B-1 that if on account of failure of current no shows at all could be run for that day the lessees need not pay the agreed rent. No person will agree for such terms in the lease deed. Thus, the correction with regard to the word "bearing" which was subsequently changed as "except" and the suspicious clauses mentioned therein will certainly lead us to hold that they are brought up documents. When attachments are there against the theatre and when mortgages were also there and the liabilities are to the tune of more than two lakhs, it cannot be accepted that the 1st defendant would have executed the lease deeds in favour of defendants 2 to 5 that too with clauses which give no income at all to him.
15. Ex.B-1 lease deed was originally executed in respect of theatre only and subsequently Ex.B-2 confirmatory agreement was executed to give strength to Ex.B-1 lease deed. Thereafter Ex.B-3 lease deed was brought into existence bringing the out-houses within the purview of the so called lease. As stated earlier, these three lease deeds have been created only for the purpose of forcing the plaintiff to resile from the agreement. We are of the opinion that the lease deeds have been brought into existence by tine 2nd defendant only for the purpose of defeating the rights of the plaintiff under Ex.A-1 and to create a hurdle. When a tenancy has been created, it is very difficult for anyone to evict the tenants and get physical possession of the property. If such tenancy as covered by Exs.B-1 to B-3 is brought to the notice of the plaintiff or even the plaintiff came to know of the tenancy the plaintiff would not have entered into the sale transaction for a sum of Rs. 3 lakhs and odd. We hold that the lease deeds set up by defendants 2 to 5 are not true and they are got up documents and defendants 2 to 5 cannot claim any rights as lessees and that the plaintiff had no knowledge of the alleged lease deeds in favour of defendants and so they are not binding on him.
16. The next point to be decided is with regard to the exact property that was agreed to be sold under Ex.A-1. In Ex.A-1 it is mentioned that Sri Venugopal Talkies was agreed to be sold. The plaintiff gave one version about what is meant by "Sri Venugopal Talkies". According to him, Sri Venugopal Talkies includes machinery, all equipment and the out-houses that is entire are a covered by the original of Ex.A-24 sale deed. On the other hand, the 1st defendant's contention is that "Venugopal Talkies" means the machinery, equipment etc., but it does not include the out-houses. According to defendants 2 to 5 also Venugopal Talkies includes machinery and equipment etc., only but does not include the out-houses which are different. In this connection the defendants relied upon the lease deeds executed between them. Under the original of Ex.A-24 Sri Rajah Venkata Krishna Rangarao Bahadur purchased Sri Venugopal Talkies from one Grandhi Mangaraju for a sum of Rs. 1,00,000/ - on 2W-1957. A plan, Ex.A-24(a) was attached to the original of Ex.A-24 sale deed showing the structures, boundaries etc. According to the evidence of D.W. 1, one out-house was being used as the publicity room, one out-house was being used as the Manager's room. One room was allotted to the representative and one room was being used by the 3rd defendant who was chief operator for carrying repairs. One room was said to be utilised for recreation of the staff. Thus the evidence of D.W.I himself shows that these rooms are essential for the effective running of the cinema theatre and these are located in the same premises. D.W.I has also admitted in his evidence that only one municipal assessment was given for all the structures in the suit cinema hall compound, and the Assessment number is 3630. D.W. 2 i.e., the 1st defendant himself has admitted that he had mortgaged Venugopal Talkies to several persons, that the boundaries mentioned in Ex.A-25 are true and correct so also the boundaries mentioned in all other mortgage deeds wherein the out-houses were also included. A small gate is kept at the entrance of the out-houses which is meant for the exclusive use of the persons who are managing the theatre and the main gates are meant for the audience who are coming to the cinema theatre. Admittedly the 1st defendant is not residing in the premises and the 2nd defendant also is not residing. Even as per the admissions made by D.W.I and D.W. 2, when these rooms are essential for the effective running of the cinema theatre, when these rooms are in the same premises covered by a common compound wall for the entire cinema theatre and out-houses, when the entire premises were purchased in the year 1957 under one sale deed, and when in all the mortgages the entire premises has been treated as one and the same and out- houses are included in the mortgages and especially when only one assessment number is allotted for the entire premises, it cannot lie in the mouth of the defendants to state that Venugopal Talkies does not include the out-houses. Of course in Ex. A-1 it is mentioned that Venugopal Talkies with all the equipment and furniture was agreed to be sold. Ex. A-1 is only a simple agreement and not drafted after consulting legal expert. Having held that the out-houses are part of the main building of Sri Venugopal Talkies, the learned subordinate Judge erred in finding that the out-houses are not intended to be sold under the agreement. In view of our detailed discussion supra, the finding of the learned Subordinate Judge that the six out-houses are not intended to be sold under Ex.A-1 sale agreement has to be set aside.
17. It is next contended on behalf of the defendants that the sale consideration is too low. The sale price that has been agreed is Rs. 3,01,111/-. Neither the 1st defendant nor the 2nd defendant has come forward with any statement or in evidence to the effect that the sale price that has been offered or accepted or mentioned in Ex.A-1 is too low. Though according to them some purchasers have approached them, nothing is mentioned as to what is the rate quoted by them. It is not their case or suggestion that it has been sold for a paltry sum. When a reasonable price has been fixed between the parties, it can be presumed that what has been intended is a genuine sale with a clear title. Even according to the defendants the income derived from the cinema theatre is very low and it is being run in losses. If we take into consideration the terms of the lease deeds said to have been executed by the 1st defendant in favour of defendants 2 to 5, the income that has been derived by the owner of the cinema theatre is nil or at times he may have to spend his own money for repairs etc. The parties are aware of the implications of the tenancy and the difficulties in evicting the tenants. When such statutory rights have been enured to the benefit of the leassees and if really to the knowledge of the plaintiff definitely it would have been mentioned in Ex.A-1. If the 2nd defendant is not the general power of attorney holder nor the person acting on behalf of the 1st defendant we may entertain a doubt about the capacity of the 2nd defendant in managing the theatre right from the grand father's time of the 1st defendant. He was managing the theatre and the estate and he was also a general power of attorney for the 1st defendant and also for his father and he was actually managing the entire estate. In such circumstances it is too idle to expect that the capacity of the 2nd defendant is not known to anyone particularly when the management was being done by the 2nd defendant and the theatre was constantly incurring losses and at no point of time the theatre was having gains. So the creation of a lease is only to put a legal hurdle in the execution of the sale deed. It is for that reason defendants 1 and 2 in their evidence have come forward with a plea that only symbolical possession of the theatre can be given. No sane person having invested so much money will take symbolical possession. By the date of Ex.A-1 sale agreement mortgage deeds have been executed, many court attachments were there and in none of the proceedings it has been mentioned that the theatre was under lease. More over, the 2nd defendant himself is the person who has presented the mortgage deeds with the recitals for the entire theatre including the out-houses and if really there is any genuine lease in his favour he would not have failed to mention in the mortgage deed. Viewing the case from any angle either from the point of mortgagors or from the public authorities wherein the licences have to be transferred, it can be inferred that it is a false case set up by the 2nd defendant. To our mind it is only a simple case where it has been agreed that the entire Sri Venugopal Talkies including the out- houses, furniture and other equipment etc., are agreed to be sold for Rs. 3,01,111 / - and in the light of the admissions of the defendants themselves and in view of the conduct of the 2nd defendant the price of the deal is reasonable.
18. Mr. T. Ananathababu, learned counsel appearing on behalf of the 1st defendant, contended that the witnesses have not signed in Ex.A-1 and one Lade Jagannadham was not examined. On a reading of the language employed in Ex.A-1 it shows that the document has been executed voluntarily in the presence of the witnesses. The presence of P.W. 2 is not in dispute. Preparation of one more copy is found in the correspondence Exs.X-1 and X-2 and also from the evidence of P.W.I, but duplicate or draft copy has not seen the light of the day. Even though at one time the 1st defendant expressed that he wanted to destroy the copy that was with him. Since the terms of the contract are very clear and in the notices also it was mentioned that there is a valid contract between the parties, very little importance can be attached for signing the document by Lade Jagannadham, as the signature of one witness is sufficient. Ex.A-1 was executed voluntarily without any influence by P.Ws. 1 and 2 and the same was handed over by the 1st defendant to the plaintiff with conditions relied thereon. The clauses mentioned in Ex.A-1 are the result of the discussion that took place and as the 1st defendant was heavily indebted by attachments and mortgages, nearly to the tune of Rs. 2 lakhs and as the cinema theatre is running in losses, he entertained the idea of selling the theatre. So the execution of Ex.A-1 by the 1st defendant cannot be ruled out. If the execution of Ex.A-1 is voluntary and if what has been mentioned in Ex.A-1 is Sri Venugopala Talkies bearing Assessment No. 3630 and a condition has been stipulated that the 1st defendant should take back the manager the 2nd defendant into his own, Services, it could be said that it was done with the intention to sell the same without creating any hurdle. Since the 1st defendant and the 2nd defendant are the persons who created these lease deeds which are now held to be not correct and also created doubts about the boundaries and failed to execute the sale deed with a clear title and hand over physical possession with the remaining staff, excluding the 2nd defendant, it can be said that the 1st defendant is the defaulter but not the plaintiff. The plaintiff is always ready and willing to perform his part of the contract. The staff that are working in the cinema theatre are having rights and their rights cannot be taken away and the plaintiff is bound to continue defendants 3 to 5 but the 2nd defendant who claims to be a lessee on one side and who has got general power of attorney on behalf of the lessor drawing two salaries cannot be styled as the Manager of the cinema theatre particularly when he is managing the estate of the 1st defendant. If the management is confined to the theatre alone, then he may have some right but as he is a general power of attorney and he is participating in all the cases and gave declarations in the income-tax department, presented mortgage deeds etc., it cannot be said that he has got any right under the Act to be continued as a Manager and when the 1st defendant has sold the theatre, the 2nd defendant as a general power of attorney holder will not have any control over the theatre. In fact, under Ex.A-1 the 1st defendant has agreed to take back the 2nd defendant into his personal service. In view of the above discussion, the finding of the lower court that plaintiff committed breach of the agreement has to be set aside.
19. The next contention raised by Sri T. Ananthababu, learned counsel for the 1st defendant is that inconsistent pleas have been made. The first plea that has been made is that the plaintiff is ready and willing to take the specific performance for the entire theatre. In the alternative i t is pleaded that in case the lease is held to be true, symbolical delivery of the property is sought for. If a lease deed is there and it was acted upon and has brought to the knowledge of the person who is going to purchase the property, then symbolical delivery has to be given. But in this case it is held that the leases are not true and so it has to be construed that there is no inconsistent plea that has been made. More over, when the court has come to a conclusion after appraising the evidence and the contentions of the parties that the plaintiff is able to make a case for specific performance, the question of alternative plea does not arise. Different suggestions have been given at different stages. One of such suggestions is that the plaintiff has no means and he wants to drag on the proceedings, which is found to be incorrect view of the above discussion. The suggestions that have been made on behalf of the defendants show the hollowness of the defence that has been set up by them.
20. Under Section 55(1) of the Transfer of Property Act the seller is bound to give on being so required the buyer or his nominee such possession of the property as its nature admits. 'Possession' here does not necessarily mean personal occupation but might include landlord's possession if the property sold is in the occupation of a tenant to the knowledge of the buyer. The contract of sale might provide for delivery of vacant possession of the property even though it is in the occupation of a tenant to the knowledge of the buyer. Section 55 of the Transfer of Property Act is subject to the contract between the parties. But in this case it is held that the lease deeds set up by defendants are false and when there is no lease deed the buyer is entitled to clear possession as contemplated under Section 55(1) of the Transfer of Property Act as the seller is bound to give physical possession of the property. The words "such possession of the property as its nature admits" according to Section 55(1)(f) is subject to contract between the parties. Defendants 3 to 5 are only employees. Of course it is contended that they are employees working elsewhere in public bodies and they cannot be deemed to be the workers in the cinema theatre in question but whatever it may be, the purchaser is bound to take the workers that are available as on the date as they are entitled to be continued except the 2nd defendant. So defendants 3 to 5 are not tenants nor the trespassers as the employees working in the theatre cannot be termed as trespassers. Defendants 3 to 5 are entitled to be continued in service as workers in the cinema theatre, even after sale.
21. Sri T. Ananthababu, learned counsel for the 1st defendant also contended that as the plaintiff could not perform his part of the contract he has to seek compensation but he cannot be granted the relief of specific performance. This contention also has no force. The 2nd defendant is the general power of attorney holder and he is not a lessee and throughout defendants 1 and 2 are sailing together. At one point of time in the notices issued on behalf of the plaintiff some mention has been made about the 2nd defendant. The 1st defendant in his reply has stated that the 2nd defendant is a very good person. As already observed, it is the 1st defendant who has committed breach of the contract and that the plaintiff is entitled to the relief of specific performance and so the question of compensation does not arise.
22. From the fore-going discussion, the following findings emerge. What has been agreed to be sold under Ex.A-1 sale agreement is Sri Venugopala Talkies bearing Municipal Assessment No. 3630 with all equipments, machinery etc., including the out-houses, surrounded by the following boundaries, viz. On the East-Wet land of Gedala Challayya; on the South-Land of Kotagiri Satyanarayana; on the west-Vizianagaram-Raipur Road and on the North- Vacant site with thatched shed of Nethula Surayanarayana. The consideration that is payable by the plaintiff under Ex.A-1 sale agreement is Rs. 3,01,111/-. The lease deeds (Exs.B-1 to B-3) said to have been executed by the 1st defendant in favour of defendants 2 to 5 are false and invented for the purpose of defeating the right of the plaintiff. The plaintiff was ready and willing to perform his part of the contract from the date of the agreement and also continues to be so till the hearing of the suit provided physical possession of the theatre excluding the 2nd defendant has been given. Since the 1st defendant and the 2nd defendant have created hurdles and prevented the plaintiff from obtaining physical delivery of the theatre, the defendants are at fault. The plaintiff approached the court with clean hands. The plaintiff shall continue defendants 3 to 5 in service but exclude 2nd defendant who shall be taken back by the 1st defendant into his own services.
23. Finally it is contended by Sri T. Ananthababu, learned counsel for the respondent that the prices have gone up. As the defendants were able to utilise the theatre right from the date of Ex.A-1 and are still continuing in possession of the same, they cannot now plead that as the prices have gone up they are not in a position to execute the sale deed. If possession of the property has been given to the plaintiff without creating any hurdles, then the question of working out equities and granting of some compensation would have been considered. The intention of the parties at the time of execution of Ex.A-1 is to see that the transaction must be completed as expeditiously as possible. But having utilised the income from the theatre right from the date of Ex.A-1 dated 16-11-1977 the defendants cannot now be permitted to plead or urge that the prices have gone up and so the plaintiff is entitled for compensation.
24. In the result, the judgment and decree dated 24th April, 1982 passed by the learned Subordinate Judge in O.S. 56/78 on his file are set aside and the plaintiff's suit for specific performance is decreed with the following directions:-
(1) The plaintiff shall deposit the entire sale consideration, registration expenses and value of the stamp papers in the court below within two months from to-day;
(2) The 1st defendant shall execute the sale deed in favour of the plaintiff in terms of the sale agreement Ex. A-l in respect of Sri Venugopal talkies with all its equipment, machinery etc., including the out-houses, bearing Municipal Assessment No. 3630, more fully described in the plaint schedule and get it registered within three months from to-day;
(3) The 1st defendant shall deliver physical possession of the plain schedule Cinema Theatre including the out-houses etc., to the plaintiff;
(4) The plaintiff shall continue defendants 3 to 5 in service excluding 2nd defendant; (2nd defendant died during die pendency of the appeal);
(5) In case the 1 st defendant fails to execute and register the sale deed within the said period of three months from to-day, as stated above, the plaintiff is at liberty to apply to the court below with a request to execute and register the sale deed in his favour on behalf of the 1st defendant and claim the costs incurred by him in that connection from the 1st defendant.
25. The appeal is accordingly allowed but in the circumstances there will be no order as to costs throughout.