Madras High Court
K.R.Venugopal vs K.R.Srinivasan on 30 October, 2008
Author: K.Kannan
Bench: K.Kannan
In the High Court of Judicature at Madras Dated 30.10.2008 Coram The Honourable Mr.Justice K.KANNAN Appeal Suit No.907 of 1989 K.R.Venugopal ..Appellant ..vs.. 1. K.R.Srinivasan 2. S.Vivekanandan 3. S.Harikrishnan 4. S.Venkataraman (3 & 4 Minors, rep.by father and natural guardian K.R.Srinivasan) 5. M.Mala ..Respondents Appeal Suit filed under Section 96 r/w.Order 41 Rule 1 & 2 C.P.C, against the judgment and decree dated 05.04.1989 made in O.S.No.5602 of 1985 on the file of IX Assistant Judge, City Civil Court, Madras. For Appellant : Mr.R.Subramanian, Senior Counsel for Ms.S.Hemalatha For Respondents: Mr.B.Ullasa Velan for R1 & R2 Mr.Anand Jain for R5 JUDGMENT
I. Facts in brief - Basis of plaintiff's claim:
Plaintiff in the suit for specific performance is the appellant. The owner of the property, who is the brother of the plaintiff, is arrayed as the 1st defendant. Defendants 2 to 4 are the sons of the 1st defendant. The 5th defendant is the subsequent purchaser. The suit is filed on an agreement of sale alleged to have been executed by the 1st defendant in favour of the plaintiff under Ex.A-1 dated 19.03.1983. The terms of the agreement spell out that the consideration had been fixed as Rs.47,000/- and on the date of the agreement, an advance of Rs.5,100/- was paid and the balance of sale consideration was to be paid within a period of two months. According to the plaintiff, after the execution of the agreement, he learnt that there had been a mortgage, which was still outstanding with Shantha Devi and he paid Rs.20,000/- on 12.05.1983 and obtained a receipt under Ex.A-2. Yet another encumbrance was to a person, by name, Mythili and a portion of the debt was discharged by him by payment of Rs.9,790/-. Corporation tax had not been paid and arrears to the tune of Rs.4,947.19 was paid by the plaintiff to the account of the 1st defendant. Electricity charges to the tune of Rs.1,667/- has also not been paid by the 1st defendant and the plaintiff had paid the said sum also. According to him, in all, he had paid Rs.41904.19 and the balance of Rs.5,095.81 was the only amount that remained payable and he was always ready and willing to pay the said amount. According to the plaintiff, without executing the sale deed, the 1st defendant had executed a sale in favour of the 5th defendant and the 5th defendant is not a bona fide purchaser and she had known all along that the plaintiff had an agreement in his favour. The contention, therefore, of the plaintiff was that the 5th defendant was bound to join with the 1st defendant in execution of the sale deed.
II. The pleas in defence:
2. The 1st defendant, who was the original owner of the property, had remained ex parte. Defendants 2 to 4 filed a written statement and participated in the trial and their case has been that the property being ancestral, it had been purported to be sold without valid necessity and hence, not binding on them. The 5th defendant has filed a statement and she is the principal contesting defendant. She has given the details of her purchase and contends that she is a bona fide purchaser for value without notice of the alleged agreement. The plaintiff has examined himself as P.W.1 and the 5th defendant's husband was examined as D.W.1.
III. Disposition at the trial court:
3. On the basis of the evidence adduced, both oral and documentary, the trial court found that the plaintiff's sale agreement had not been proved and that the plaintiff had not been ready and willing to purchase the property within the time stipulated and further that the document itself has been brought up only in collusion between the plaintiff and the defendants 1 to 4 in order to create trouble to the 5th defendant, who had purchased the property. The court found that the 5th defendant's purchase was true and in that any event, she was a bona fide purchaser for value without notice of agreement in favour of the plaintiff. On such finding, the case came to be dismissed.
IV. Principal grounds of challenge in appeal:
4. The appellant contended that the court below has erred in dismissing the suit and finding that the purchase by the 5th defendant was valid. He had at least four reasons to give for stating that the reasoning of the court below was not correct. According to him,
(i) the title deed had not been taken from the 1st defendant although the 5th defendant had purported to have purchased the property;
(ii) no enquiry with reference to the encumbrances had been made prior to the purchase of the property for the want of bona fide;
(iii) admittedly, the vendor was not in possession of whole of the property and the purchaser had not made any enquiry with regard to the person in possession; and
(iv) the conduct of the subsequent purchaser was suspect for, when the plaintiff had issued notice through counsel to the 5th defendant prior to the institution of the suit after her alleged purchase, the 5th defendant had not given any reply even though she had received the notice.
The entire arguments of the appellant was that the purchase could not be true, particularly in view of the fact that there had been encumbrances of the property, one to Shantha Devi and another to a person, by name, Mythili and the sales did not make any provision for discharge of the same.
V. Dilation of appellant's challenge-Test of bona fide of subsequent purchaser:
5. Learned counsel for the appellant pointed out that if the amount, which the 5th defendant claimed as having been paid to the 1st defendant, which in turn was paid to Shantha Devi had been true, she would have secured the receipt for having discharged the loan with Shantha Devi, but still she did not take any steps to secure any document for having discharged the mortgage. Perhaps the most weighty argument on the side of the appellant is that the vendor had not been in possession of the entire extent of the property and that he was living at the first floor of the building. The plaintiff himself had been occupying a portion of the property at the ground floor and there were other tenants, as well. Therefore, the contention of the plaintiff is that the subsequent purchaser could never be a bona fide one, as a person who had made no enquiry about the character of possession of persons in possession. He made particular reliance on a decision of the High Court of Madras in the case of Veeramalai Vanniar ..vs.. Thadikara Vanniar reported in AIR 1968 Madras 383. The decision spells out the conditions to be satisfied by the subsequent purchaser, if the protection under Section 19 of the Specific Relief Act is to survive. The decision states that the subsequent purchaser must have paid the full price in good faith without notice of prior agreement and such person must also enquire about the character of possession of person in possession.
6. Further, the plaintiff/appellant placed reliance on the decision of the Supreme Court in R.K.Mohammed Ubaidullah ..vs.. Hajee Abdul Wahab reported in AIR 2001 SC 1658. The decision yet again sets out the parametres for determining the issue as to whether the subsequent purchaser is a bona fide or not. It states that when the subsequent purchaser was already aware of plaintiff as being in possession of suit property as a tenant for several years and if such purchaser would obtain a sale deed without making any enquiry whether plaintiff had any further interest in the property on the date of execution of the sale apart from that he was in possession of the property as a tenant, the subsequent purchaser cannot be said to be a bona fide one. This decision is cited by the counsel for the appellant to bring home the point that the plaintiff was already in possession at the ground floor and the subsequent purchaser ought to have made enquiry with the plaintiff before he had gone on to purchase the property.
7. The allegations raised by the the appellant before the trial court have actually been properly analysed by the trial court and after consideration, it has come to the conclusion that the plaintiff was not entitled to a decree for specific performance.
VI. Readiness and willingness of the plaintiff-The crucial issue:
8. The most important issue to be decided in a suit for specific performance is whether the plaintiff, who came to Court for enforcing the agreement, had been ready and willing to perform his part of the contract. The mandate of Section 16(c) of the Specific Relief Act is peremptory and the issue will be always undertaken for strict scrutiny irrespective of whether the defendant appears or not or, whether the readiness and willingness is put to dock by a specific contention, by the defendants or not.
(a) Time made the essence of contract:
9. In this case, the agreement contains a clear stipulation that two months' time was the essence of contract and the plaintiff, the agreement holder, had undertaken to pay the entire balance of sale consideration within two months after the payment of advance of Rs.5,100/-. In this case, there is no such proof at all. All that the plaintiff has been able to say is that he had made several payments over a period of time, like payments to mortgagees Shantha Devi and Mythili and also paid outstanding amounts payable to the Corporation and Electricity Board making up in all the liability of 1st defendant to the tune of Rs.41904.19 and therefore, the plaintiff had shown his readiness and willingness. This argument of the plaintiff does not satisfy the requirements of law. On the other hand, there is intrinsic evidence available in this case to show that the plaintiff did not have the necessary funds at that time to perform his part of the contract within the time stipulated. The agreement itself has been found by the court below as not true and that it should have been got up by the plaintiff in active collusion with his own brother, who is the first defendant, after the sale had been made in favour of the 5th defendant.
(b) Correction in the date of agreement:
10. The agreement is purported to have been made on 19.03.1983 and the recitals in the agreement are supposed to have been made with the help of a local advocate. The stamp papers of the agreement have been purchased on 17.03.1983 in the name of the 1st defendant. The agreement is written on the following date, but curiously the recitals which have been typed out to make a reference to the date as 19th February, 1983 and the word 'February' has been struck off and handwritten as 'March'. No proper explanation has been given by the plaintiff as to how this mistake had happened and if a lawyer had typed out the recitals in the agreement, such a mistake could seldom have occurred. Even if the mistake was really accidental, he ought to have explained. We find, on the other hand, the plaintiff has no explanation at all to offer as to how the mistake had happened and why it was not initialled by parties. Even with regard to the contention that the plaintiff had been ready and willing at all times to make the payment, it does not appear to be correct for even the document filed by the plaintiff himself raises a doubt about such a contention.
(c) Letter of 1st defendant to plaintiff: Non-payment of balance as late as July'84:
11. Ex.A-49 is a letter sent by the 1st defendant to the plaintiff. It appears to bear the date as 22.07.1984 and in that letter, it is alleged that a particular person by name Gopal had sent a person for 'Tom Tom' to be made near the property for recovery of the debt and after collecting the fees Rs.50/-, he had left the place. The letter directly questions the plaintiff as to whether he saw the person and if the amount was not paid by the plaintiff immediately, he was contemplating to sell the property to some other person. So, it is clear from the said letter dated 22.07.1984, the 1st defendant could not discharge all the loans and the amount specified in the agreement had not come to the hands. Otherwise, there is no reason for the 1st defendant to have written a letter in such terms to the plaintiff. The reference 'Gopal' ought to be the husband of Mythili, who held the subsisting mortgage. The non-examination of the 1st defendant is fatal to the case of the plaintiff.
(d) Want of collusion between plaintiff and 1st defendant, who were brothers, not explained:
12. The vendor, who does not act as per the agreement and who commits further breach by executing a sale to a third party, may not normally be expected to support the case of plaintiff after sale and come to give evidence in favour of the plaintiff suing for specific performance. In this case, the vendor is the brother of the plaintiff and no whisper is made anywhere in any part of the plaint that the brother had turned inimical to him and that he had deliberately caused loss to him by not executing the sale deed pursuant to the agreement.
(e) Plaintiff's resources, inadequate:
13. The plaintiff's inability to raise the resources is seen through his evidence to the effect that at the relevant point of time when the document was prepared he was working on a salary of Rs.650/- per month and that he had two children and his wife to be maintained. It is also admitted by him that his wife was not working anywhere. The so called discharge of debt by the plaintiff had been subjected to vigorous cross examination when he was questioned as at his payment of Rs.20,000/-. According to him, he had contracted a loan with Commercial Employees Co-operative Society by pledging the jewels of his wife and collected Rs.45,000/- and out of the sum secured, he was able to pay up the amount to the mortgagee Shantha Devi. If this contention were to be true, the plaintiff ought to have produced the so called loan advance by the Commercial Employees Co-operative Society. On the other hand, the trial court has found that the 5th defendant has cleared this amount of Rs.20,000/-, which had actually been collected by the 1st defendant from the 5th husband's husband stating that the mortgagee Shantha Devi was making steps for recovery of the debt by going to court. D.W.1 explained that he could not accompany the 1st defendant only because the 1st defendant prevailed upon him not to come stating that if the mortgagee knew that somebodyelse was paying, he might not be able to get any remission in payment of interest. Such explanation is quite probable. The so called payment to Mythili also does not appear to be true because when the plaintiff did not have money to pay the entire balance of sale consideration within a period stipulated, it is doubtful whether he would have had money to pay one yet another mortgagee Mythili. Actually there is no evidence or explanation on the side of the plaintiff anywhere as to how and why the plaintiff was not able to secure the sale deed within the time stipulated under the agreement. That has not been elicited at all in his evidence because it is not the case of the plaintiff that although he had sufficient money with him and after paying Rs.20,000/- to Shantha Devi and the balance amount to Mythili, he was prepared to obtain a sale deed, but the 1st defendant had made any evasion of his obligation under the contract. There is neither pleading nor evidence that the 1st defendant was unwilling to execute the sale in favour of the plaintiff after the agreement. If the plaintiff had all the consideration ready in his hand, there is simply no explanation as to why he was not able to secure the sale deed in his favour from his own brother. The trial court was, therefore, in my view, correct in inferring that the plaintiff had not been ready and willing to pay the balance amount within the time stipulated and his failure resulted in the 1st defendant to look elsewhere for raising money to be relieved of creditor's pressure and get a modicum of benefit of excess cash in his hand after payment to the mortgagees. In the absence of the plaintiff's readiness and willingness coupled with the fact that the document of agreement is also not shown to be of free of doubt, I am afraid that the plaintiff cannot have any relief in the suit.
VII. Bona fides of subsequent purchaser:
14. While examining the bona fides of purchase of the 5th defendant, the first fact is, whether the 5th defendant has paid the entire consideration in the sale deed in her favour. The document that has been marked in the case in respect of a purchase is Ex.A-40, which is the registration copy of the sale in her favour. The document is dated 20.10.1984. The document recites that out of the sale consideration of Rs.45,000/-, a sum of Rs.30,000/- was paid as advance on 06.07.1984 and a further sum of Rs.15,000/- was received on the date of the execution of the sale deed. Therefore, the sale consideration recited in the document is fully paid. The further issue is, whether the plaintiff had been able to show that there is a complete lack of bona fide on the part of the purchaser. The instances which are shown by the plaintiff are: (i)the title deeds had not been delivered to the 5th defendant and it was most unlikely that the 5th defendant could have purchased without insisting on the delivery of the title deed to her; (ii) a suggestion that had been made in the cross examination of P.W.1 was that the vendor had taken documents delivered to the mortgagee and the purchaser also knew about the same. The further suggestion to P.W.1 was that all the documents that had been collected by the 1st defendant were handed over to the plaintiff collusively. As regards the fact that the purchaser had not made any enquiry with regard to the mortgages, it is in evidence that the 5th defendant was informed that there had been a mortgage in favour of Shantha Devi and that an amount of Rs.20,000/- was taken from the 5th defendant by the 1st defendant on a suggestion that he would pay up the amount to the mortgagee and secure the document. There is nothing artificial about such an evidence. The further contention of the plaintiff is that the 5th defendant had not really made any proper enquiry about the person in possession of the property. D.W.1 stated that he and his wife had already been in possession of the property as tenants and they had known the plaintiff for a long time and the plaintiff himself was already residing in the same property. Normally if a person who was having an agreement also claimed a right in the property when a suit is filed at the instance of an agreement holder, the want of enquiry is considered by the court as not bona fide. In this case, such a contention cannot be taken because D.W.1 and the 5th defendant already knew the plaintiff had been in possession of the property and the fact that he was in occupation of the property with the consent of the brother. It must be noted that the plaintiff did not come by possession under the agreement, but had been in possession even prior to the so called agreement even at the time when the 5th defendant had held a portion of the property as a tenant, much prior to the document of purchase. If we notice that the sale consideration had been paid in full under the agreement, the bona fides could be doubted only if the plaintiff had a valid and enforceable agreement in his favour. We have already seen that the plaintiff's document itself is suspect and the plaintiff has not established his readiness and willingness. This issue of bona fides of purchase becomes relevant only to make a comprehensive decision of all the relevant issues and I do not find that there is any mistake committed by the trial court in the matter of appreciation of evidence or the inference from the set of facts adduced through the documents and oral evidence.
VIII. Conclusion:
15. The trial court decision is in accordance with the evidence and proposition of law and there is no warrant for interfering with the same. The judgment of the trial court is, accordingly, confirmed and the appeal suit is dismissed. There will be no order as to costs.
Index: Yes. 30.10.2008
Internet: Yes.
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To
To
The Registrar,
City Civil Court,
Madras.
Copy to
The Record Keeper,
V.R.Section,
High Court, Madras.
K.KANNAN, J.,
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Pre-delivery judgment in Appeal Suit No.907 of 1989
30.10.2008