Madras High Court
M/S. Pelican Equipments vs M/S. Sri Meenakshi Industries
Author: P.T. Asha
Bench: P.T. Asha
CS.Nos.112 and 116 of 2006
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON :: PRONOUNCED ON ::
03.03.2021 30.03.2021
CORAM ::
THE HONOURABLE Ms. JUSTICE P.T. ASHA
CS.Nos.112 and 116 of 2006
M/s. Pelican Equipments,
represented by its partner
Mr. T. Sairam Subramanian
No.38, Burkit Road,
T. Nagar,
Chennai- 600 017.
... Plaintiff in CS.No.112 and 116 of 2006
Vs.
1. M/s. Sri Meenakshi Industries
Represented by its Partner
Mr. S. Sivaramakrishnan.
2. Mr. R. Santhanam
3. Mr. Mr. S. Sivaramakrishnan
... Defendants in CS.No.112 and 116 of 2006
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CS.Nos.112 and 116 of 2006
Prayer CS.No.112 and 116 of 2006: Suit filed under Order IV Rule I
of O.S. Rules read with Order VII Rule 1 of the CPC praying to
a) direct the defendants to execute the sale deed before the Sub
Registrar Office, Konnur within the Registration District of Chennai
North in favour of the planitiffs in respect of the suit schedule property
after clearing their sale deed dated 29.05.2002 registered as document
No.2016/2002 before the SRO , Konnur by paying the additional stamp
duty and on receiving the balance sale consideration of Rs.14,96,232/-
and Rs.23,86,180 respectively from the plaintiffs as per sale agreement
dated 25.04.2005 and upon their failure to do so, direct the Registrar,
High Court, Madras to execute the sale deed in favour of the plaintiffs
before the SRO, Konnur;
b) for a permanent injunction restraining the defendants, their agents,
representatives or any one claiming under the defendants, from
alienating the suit Schedule property in any manner;
c) In the event of this Hon'ble Court declining to grant the above two
reliefs sought for, then to grant an alternative relief directing the
defendants to refund the total sum of Rs.6,66,168/- and Rs.6,88,482/-
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CS.Nos.112 and 116 of 2006
respectively to the plaintiff along with interest at 18 % per annum from
the date of filing the plaint till the date of realisation.
(Amended as per order dated 24.11.2020 in Application Nos.6494 and
6495 of 2018 and time extended as per order dated 15.12.2020)
For Plaintiff : Mr. S.D.S. Phillip
For defendants : Mr. V. Chandrakanthan
JUDGMENT
The two suits have been filed for identical reliefs.
a) C.S.No.112 of 2006 has been filed for specific performance in respect of the properties situate at Plot No.9C, South Phase, Ambattur Industrial Estate, Chennai-58 and for an injunction restraining the defendants, agents, representatives or anyone claiming under them from alienating the same. An alternative relief for refund of the advance amount of Rs.6,66,168/- together with interest at 18 % per annum has been sought for, which was amended pending suit. 3/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006
b) C.S.No.116 of 2006 is filed for the very same relief in respect of the Plot No. 9B.
2. Considering the fact that the pleadings in both the suits are same, they are commonly narrated hereinbelow in a nutshell.
3.Plaintiff's Case:
3.1. The first respondent company had purchased vacant lands situate in Plot No.9, South Phase, Ambattur, Industrial Estate, Chennai- 58 measuring a total extent of 20,996 Sq.ft. under a sale deed dated 29.05.2002.
3.2. The plaintiff would state that the second and third defendants are the partners of the first defendant firm, which is a registered firm.
The third defendant had represented to the plaintiff that they were desirous of selling the properties, purchased by them. The transaction 4/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 was negotiated with reference to the property subject matter of CS.No.112 of 2006, measuring 3392 Sq.ft. The transaction was mediated by one K.Nathan. An agreement of sale dated 25.04.2005, was entered into, in and by which, Plot No. 9C was agreed to be purchased by the plaintiff for a total sale consideration of Rs.21,62,400/-. A sum of Rs.2,25,568/- was paid by cash as advance on the said date along with a sum of Rs.3,24,360/- by Cheque dated 23.04.2005 and a sum of Rs.1,16,240/- by cheque dated 23.05.2005. Therefore a total sum of Rs.6,66,168/- was paid with reference to Plot No.9C leaving a balance of Rs.14,96,232/-.
3.3. As regards the property subject matter of C.S.NO.116 of 2006 which is Plot No.9B measuring an extent of 4823 Sq.ft., an agreement of sale of the same date, i.e., 25.04.2015 was entered into between the plaintiff and the first defendant. The total sale consideration for the said property was fixed at Rs.30,74,662/-. The 5/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 plaintiff had paid a sum of Rs.1,00,000/- by cash along with a cheque dated 23.04.2005 for Rs.4,13,089/- and a cheque dated 23.05.2005 for Rs.1,75,393/- were handed over to the defendants on the very same date, that is on the date of agreement. Therefore, in all the plaintiff had paid a sum of Rs.6,88,482/- as advance leaving a balance of Rs.23,86,180/-. The total balance sale consideration payable towards the two agreements were a sum of Rs.38,82,412/-
3.4. One of the conditions, for the sale to move forward, was that the defendants should, within 15 days from the date of the agreement, get return of the original sale deed dated 29.05.2002 registered as document No.2016/2002 on the file of SRO, Konnur, which was pending adjudication for additional Stamp duty under Section 47A of the Indian Stamp Act. It was under this sale deed that the defendants had purchased a larger extent of 20,996 sq.ft. It is the case of the plaintiff that they have been ready and willing right from the date of 6/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 the signing of the agreement to pay the balance consideration for the sale deed to be executed in their name. However, it was the third defendant who had sought to extend the time so as to enable them to obtain the original sale deed from the Sub Registrar's Office. In fact, the last of such extension was on 13.09.2005.
3.5. The plaintiff would further submit that though they were possessed of sufficient funds and were ready to go ahead, the defendants kept postponing taking release of the sale deed dated 29.05.2002 from the SRO, Konnur by paying the additional stamp duty. As a result the sale could not be completed within the agreed date.
3.6. The plaintiff would submit that a sum of around Rs.9,00,000/- would have been payable by the defendants towards additional stamp charges .
7/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 3.7. The plaintiff would submit that their attempts to contact the defendants over phone and in person was futile and it was clear that the defendants were attempting to postpone the performance of the contract.
3.8. The plaintiff had also met the third defendant and showed proof of their bank sanctioning financial assistance for purchasing the property. The plaintiff had informed the defendant that they would be mulcted with interest even if they do not take disbursement of the loan since the Bank would start charging interest from the date of sanction. The plaintiff had therefore issued a legal notice dated 26.09.2005 calling upon the defendants to first get their sale deed released by paying the additional stamp duty within one week from the date of receipt of the notice, provide the document for scrutiny and receive the balance sale consideration so that the formalities for the sale could be 8/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 completed and the sale deed executed. The notice was received by the defendants, however they did not send any reply for the same. The plaintiff have also come to learn that the defendants were attempting to alienate the property. Therefore, the plaintiff has filed the present suits.
4. Defendant's Case:
4.1. Written statements containing the same averments have been filed by the third defendant in both the suits and adopted by defendants 1 and 2.
4.2. The defendants had questioned the jurisdiction of this Court to consider and entertain the suits since the property is situate outside the jurisdiction of this Court at Tambaram. The issue of jurisdiction had been raised more particularly since the second relief sought for in the suit was for an injunction. Since this relief is bound to the land the 9/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 suit is a suit on land and had to be necessarily instituted in the Court having jurisdiction over the place in which the property is situated.
4.3. The defendants would also raise the plea that the plaintiff was not ready and willing to go ahead with the sales and that they did not have the necessary funds for going ahead with the execution of the sale deed.
4.4. The defendants would further submit that even at the time of entering into the agreement, the plaintiff was very much aware that the original of the sale deed dated 29.05.2002, under which the plaintiff had purchased the property, was pending proceedings under Section 47A of the Indian Stamp Act.
4.5. The defendants would further submit that the self serving notices have been issued only with an intent to grab the property. The 10/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 defendants would submit that after the execution of the agreement of sale, the plaintiff has not got in touch with the defendants stating that they were not ready to perform their obligations. On the contrary, the plaintiff convinced the defendants for extension of time for paying the balance sale consideration or to refund the entire advance.
4.6. The defendants would therefore submit that the plaintiff does not have any cause of action for filing the present suits and the suits deserves to be dismissed.
5. Issues Framed:
5.1. The following issues are framed in CS.No.112 of 2006:
1. Whether the defendants are liable to execute a sale deed in respect of the plaint schedule property in favour of the plaintiff after clearing the sale deed dated 29.05.2002 (D.No.2016/2002, SRO, Konnur) by paying the 11/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 Additional Stamp duty and on receiving the balance of sale consideration of Rs.14,96,232/-
from the plaintiff as per the sale agreement dated 25.04.2005?
2. On failure of the defendants to execute the sale deed, whether the plaintiff is entitled to get the sale deed executed by the Registrar, High Court, Madras ?
3. Whether the plaintiff is entitled to get an order of permanent injunction as prayed for?
4. Whether the plaintiff has failed to perform his part of the contract in terms of the agreement dated 25.04.2005 ?
5. Whether the suit is barred under Clause 12 of the Letters Patent in view of the suit property lying outside the territorial jurisdiction of this Court ?
6. To what relief the plaintiff is entitled ?
12/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 5.2. The following issues are framed in CS.No.116 of 2006:
1. Whether the defendants are liable to execute a sale deed in respect of the plaint schedule property in favour of the plaintiff after clearing the sale deed dated 29.05.2002 (D.No.2016/2002, SRO, Konnur) by paying the Additional Stamp duty and on receiving the balance of sale consideration of Rs.23,86,160/-
from the plaintiff as per the sale agreement dated 25.04.2005?
2. On failure of the defendants to execute the sale deed, whether the plaintiff is entitled to get the sale deed executed by the Registrar, High Court, Madras ?
3. Whether the plaintiff is entitled to get an order of permanent injunction as prayed for?
4. Whether the plaintiff has failed to perform his part of the contract in terms of the agreement dated 25.04.2005 ?
5. Whether the suit is barred under 13/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 Clause 12 of the Letters Patent in view of the suit property lying outside the territorial jurisdiction of this Court ?
6. To what relief the plaintiff is entitled ?
6. A.Nos.6494 and 6495 of 2018 were filed by the plaintiff on 20.08.2018 seeking to amend the prayers in the two suits to include alternative relief of refund of advance amount with interest. The respondents had no objection to the applications being ordered without prejudice to the rights to raise the issue of jurisdiction. By order dated 24.11.2020, the applications namely A.Nos.6494 and 6495 of 2018 were ordered and on 15.02.2021, the additional issues were commonly framed in both the suits which are as follows:
"i) Whether the plaintiff is entitled to the alternative relief as prayer for ?
ii) Whether the same is barred by limitation"
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7. Trial:-
A joint trial has been ordered in both the suits and one Sairam Subramanian, partner of the plaintiff's firm had examined himself as PW1 and Exs. P1 to P25 have been marked on the side of the plaintiff. The third defendant had examined himself as DW1. No documents have been marked on the side of the defendants.
8. Submission:
8.1. Mr. SDS. Philip, learned counsel appearing on behalf of the plaintiff would submit that the sale agreement had been entered into between the plaintiff and the defendants through a common mediator one K. Nathan.
8.2. In fact, the plaintiff was looking out for a property for establishing their factory and extending their business. This desire had been informed to Mr.K.Nathan, who in turn introduced the third 15/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 defendant, who was desirous of selling their property. The learned counsel would submit that the defendants had sub divided their property into three plots and were desirous of disposing of Plot No.9B measuring an extent of 4823 sq.ft. and Plot No.9C measuring an extent of 3392 sq.ft.. Since the said plots suited the needs of the plaintiff, and were contiguous, the plaintiff had gone ahead and entered into two agreements of sale both dated 25.04.2005. With regard to Plot No. 9B, out of the total sale consideration of Rs.30,74,662/-, the plaintiff had paid a sum of Rs.6,88,482/- as advance. Likewise with regard to Plot No.9C, against the total sale consideration of Rs.21,62,400/-, an advance of Rs.6,66,168/- was paid. In all a sum of Rs.13,54,650/- had been paid as advance by the plaintiff.
8.3. The learned counsel would submit that as per the terms of the agreement of sale entered into between the parties in respect of both these plots, the plaintiff was to pay the balance sale consideration and 16/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 have the sale deed registered within a period of 90 days from the date of the agreement of sale. However, this was subject to the defendants taking return of the original sale deed dated 29.05.2002 under which they had purchased the larger extent. This document was pending adjudication under Section 47A of the Indian Stamp Act before the District Revenue Officer. The defendants were to take return of the same and hand it over to the plaintiff for verification. He would therefore submit that since the defendants have not obtained return of the original sale deed after adjudication, they had been time and again seeking time, which request was also acceded by the plaintiff. As per the agreement, the balance sale consideration was to be paid by 25.07.2005 and the sale deed got executed. Despite the request of the plaintiff, the defendants have not come forward to perform their obligation under the agreement and the plaintiff was constrained to issue a legal notice dated 26.09.2005 informing the plaintiff to come forward to execute the sale deed after receiving the balance sale 17/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 consideration.
8.4. The learned counsel would submit that the plaintiff has sufficient wherewithal, which is evident from Exs.P7, P8, P14 to P23.
Therefore the contention of the defendants that the plaintiff was not ready and willing is without any basis.
8.5. The counsel would further argue that in case this Court is not inclined to grant the discretionary decree for specific performance, the suit may be decreed for the alternative relief of refund of the advance amount. He would rely on clause 10 of the agreement of sale which, stipulates the procedure in case either party does not come forward to fulfil their obligations under the agreement. He would also draw the attention of the Court to the admission of DW1 in his cross that the defendants had not refunded the advance amount after deducting a sum of Rs.1,00,000/-, as contemplated in Clause 10 of the agreement. The 18/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 counsel would therefore submitted that this would prove that there was no default on the part of the plaintiff.
8.6. The counsel would make the following submissions with regard to the defense of lack of jurisdiction for this Court to entertain the suit. The learned counsel would submit that the plaintiff is relinquishing the relief with regard to injunction. He would submit that under section 12 (3) of the Specific Relief Act, it is open to a party to restrict his claim to that portion of the contract that can be performed. He would submit that a suit for specific performance simplicitor is maintainable before this Court and in support of this argument would rely upon the judgment "Bollineni Developers Ltd. vs K. Sailendra Kumar, reported in [2017 (5) CTC page 33]". In support of his argument regarding relinquishment of a part claim, the counsel would rely on the judgment "Periyannan (died) vs Palanisamy (died) reported in [(2017) 3 MLJ page 685". Therefore, he would submit 19/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 that the plaintiff had been ready and willing throughout by filing necessary documents to show the wherewithal and the steps taken by the plaintiff to get the sale deed executed, this court should grant a relief of specific performance. If however this court comes to the conclusion that the plaintiff is not entitled to the discretionary relief of specific performance, then the plaintiff should be granted alternative relief of refund of advance amount.
8.7. Per contra, Mr. V. Chandrakanthan, learned counsel appearing on behalf of the defendants has made both oral as well as written arguments. The learned counsel would contend that the suit has to be dismissed for the following reasons:
a) This Court does not have the territorial jurisdiction to entertain the suit as the property subject matter of the suit is situate outside the jurisdiction of this Court.
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i) The learned counsel would submit that the suit property is situated at Tambaram, outside the jurisdiction of this Court. It is the contention of the learned counsel that the second relief with reference to injunction is a relief on land and therefore the suit is one on land. Once the suit is a suit on land, the suit can be filed only before the Court having territorial jurisdiction over the subject matter of the suit namely the property. Since the property is situate at Tambaram, which does not come within the jurisdiction of this Court, the suit filed is liable to be dismissed.
ii) Though the defendants were unsuccessful in the application filed by them to revoke the leave, the learned counsel would submit that the defendants could still raise the question of jurisdiction.
iii) He would rely upon the following judgments in support of his 21/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 propositions:
1. "A.L. Mathialagan vs Balasundaram and another reported in [2014 (3) CTC page 565]"
2. "Thamiraparani Investments Pvt. Ltd. v. Meta Films Pvt.
Ltd, reported in [2005 (5) CTC page 483]"
3. "B. Ratansingh v. P.G. Sekar reported in [2014 (4) CTC page 735]"
b) i) The learned counsel for the defendants would submit that time is the essence of the contract between the parties. The agreement of sale clearly stipulates that the sale deed had to be executed within a period of 90 days from the date of signing of the agreement. He would submit that Clause 10 of the agreements of sale Exs. P1 and P2 would show that if the plaintiff does not pay the balance sale consideration within the time agreed upon, then the purchaser/plaintiff is entitled to claim the refund of the advance amount paid after deducting the 22/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 liquidated damages of Rs.1,00,000/-. He would therefore submit that a reading of these clauses clearly indicates that parties had decided to make the time the essence of the contract. It is the contention of the learned counsel for the defendants that the plaintiff had not come forward to pay the sale consideration and have the sale deed executed only on account of the fact that they did not possess the fund for paying the balance sale consideration.
ii) He would submit that the documents that have been submitted on the side of the plaintiff to prove wherewithal are not complete documents showing the true status. Since time is the essence of the contract, it was imperative that the plaintiff had the balance sale consideration ready with him. He would submit that the payment of the sale consideration had nothing to do with the defendants obtaining the original sale deed dated 29.05.2002 from the Sub Registrar's Office after paying the deficit stamp duty.
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c) He would also point out that to date, the defendants had not deposited the balance sale consideration into court to show their bonafides. Therefore, under Section 16(c) of the Specific Relief Act, the plaintiff was not entitled to the relief of specific performance. In support of his arguments, the defendant counsel has relied upon the judgment "Saradamani Kandappan vs S. Rajalakshmi reported in [2011 (4) CTC page 640" and unreported judgment of this Court, Second Appeal No.1491 of 2001.
d) The defendants have also taken out a defense, during arguments, that the plaintiff firm is not a registered firm and therefore is barred from instituting the suit under Section 69 of the Partnership Act. The suit is not maintainable and is liable to be dismissed under Section 69 (2) b of the Indian Partnership Act. He would also draw the attention of this Court to the evidence of PW1 on 19.04.2017, wherein 24/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 he has stated that the renewal of the partnership had taken place under Ex.P25. He would also highlight Section 71 of the Partnership Act together with Rule 3 (A) therein. However, this defense has not been taken in the written statement nor raised as an issue.
e) The learned counsel would submit that none of the procedures had been followed and therefore the suit filed by the unregistered firm is not maintainable. In support of the said proposition, he would rely upon the judgment "V.K.S. Transport, represented by its Managing Partner K. Ashok Kumar vs Senior Regional Manager, Tamil Nadu Civil Supplies Corporation, Government of Tamil Nadu (Undertaking) and Another, reported in [(2016) 8 MLJ 618]".
f) He would argue that the relief for refund of the advance amount has been taken at a belated stage when the matter was listed for arguments and therefore the same cannot be ordered as it is hopelessly 25/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 barred by limitation.
9. Discussion:
9.1. The suit is filed for Specific Performance of two agreements dated 25.04.2005 with identical terms except for differences in the sale consideration and the properties subject matter of agreements. The properties in question are portions of a larger extent measuring 20,996 sq.ft. The property which is the subject matter of CS.No.112 of 2006 is an extent of 3392 sq.ft. bearing plot No. 9C. The subject matter of CS.No.116 of 2006 is an extent of 4823 sq.ft. bearing Plot No.9B. The sale consideration for Plot No.9C is a sum of Rs.21,62,400/- out of which, a sum of Rs.6,66,168/- had been paid as advance. The total sale consideration in respect of Plot No. 9B is a sum of Rs.30,74,662/-, of which, Rs.6,88,482/- had been paid as advance. 26/48
https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 9.2. Since the initial plea on jurisdiction has been raised, I shall first consider issue Nos. 3 and 5 framed on 13.11.2007.
Issue Nos.3 and 5:
9.3. The reliefs claimed in the suits are as follows:
a) directing the defendants to execute the sale deed before the Sub Registrar's Office, Konnur within the Registration District of Chennai North in favour of the planitiffs in respect of the suit Schedule property after clearing their sale deed dated 29.05.2002 registered as document No.2016/2002 before the SRO , Konnur by paying the additional stamp duty and on receiving the balance sale consideration of Rs.14,96,232/- and Rs.23,86,180/- from the plaintiffs as per sale agreement dated 25.04.2005 and upon their failture to do so, direct the Register, High Court, Madras to execute the sale deed in 27/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 favour of the plaintiffs before the SRO, Konnur;
b) for a permanent injunction restraining the defendants, their agents, representatives or any one claiming under the defendants, from alienating the suit Schedule property in any manner.
9.4. The suit schedule property is a property situated at south phase, Ambattur Industrial Estate, Chennai- 58 situated at Mannurpet Village, Ambattur Taluk, Thiruvalluvar District.
9.5. It is the case of the defendants that the property in question does not come within the jurisdiction of this court. Therefore, a right which is sought to be exercised over the suit property, definitely brings it within the category of suit for land and therefore the suit deserves to be dismissed. The second relief claimed is one for exercising right over the suit property.
28/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 9.6. In the Judgment of a Division Bench of this Court reported in "(1998) 1 MLJ 132 in the case of N.Dhanalakshmi and others vs S. Eknathan, proprietor", the Learned Judges were considering an Appeal against the dismissal of an application to revoke the leave and to decide the issue of jurisdiction as a preliminary issue. In the suit in question one of the reliefs that was sought for was for a permanent injunction restraining the defendants, their agents, representatives or any one claiming under the defendants, from alienating the suit Schedule property in any manner. The defendants therein had contended that this relief was a relief in respect of the suit property and therefore the suit is one on land. In these circumstances, they sought to have the leave granted revoked.
29/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 9.7. The learned Division Bench had observed as follows:
" 14. Looking to the relief sought for in the plaint, it is plain that principally the suit is for specific performance of the agreement, and alternatively for the relief of refund of money.
Even the ancillary relief of permanent
injunction is also for restraining the
defendants from alienating or dealing with the suit property in any way. In other words the suit is not one for title or possession. The ancillary relief of injunction sought did not affect the title or possession. The reliefs sought for are against the defendants in personam. In this view, it is not possible to hold that the suit filed by the plaintiff is for land, even having regard to the decisions cited by the learned counsel for the defendants."
9.8. In a later judgment "A.C. Subba Reddy v. Jawahar 30/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 International Trading Corporation Company, represented by its Managing Partner & Others reported in [2008 4 CTC page 160]", the Bench was considering the order of the Single Judge revoking the leave granted under Clause 12 of the Letters Patent on the ground that the property was situate outside the jurisdiction of the Court. In that suit, the plaintiff had sought for a decree for specific performance and for a permanent injunction restraining the defendants from interfering with the possession and for an injunction restraining the defendants from alienating or encumbering dealing with the suit schedule mentioned property either by way of sale, mortgage, joint development lease or in any other manner detrimental to the interests of the plaintiff.
9.9. The Bench observed that insofar as prayer A and C, i.e., the prayers relating to Specific Performance and an injunction from alienating was not a suit on land and it was only the prayer for an injunction from interfering with the possession of the plaintiff that 31/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 could be regarded as a suit on land. The Bench had also permitted the plaintiff therein to give up his prayer with reference to permanent injunction from interfering with possession. In a later judgment of this Court, "M/s. Harsha Estates v. Dr. P. Kalyana Chakravarthy, reported in [2018 3 LW 900]", the Bench has held otherwise, however they have not referred to the above two judgments. Therefore, I am bound by the earlier judgments which state that a suit for permanent injunction against alienation is not a suit on land. Therefore, the issue Nos.3 and 5 are answered in favour of the plaintiff and I hold that this Court has jurisdiction to consider the suit in question.
9.10. Issue Nos.1, 2 and 4:-
The plaintiff herein has come forward with a case that the performance of the plaintiff's obligation is dependant upon the defendants paying the deficit stamp duty under Section 47A to the District Revenue Officer, Chennai in respect of the Sale deed dated 32/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 29.05.2002. The defendants case is that the plaintiff ought to have completed the sale within a period of 90 days by paying the balance sale consideration and having the sale executed. They would contend that the release of the sale deed was independent of the obligation cast upon the plaintiff to have the sale deed executed within a period of 90 days.
9.11. A perusal of the agreement of sale would show that as per the Clause 4 of the agreement, the defendants had agreed to handover the vacant possession of the B schedule property on receipt of the entire sale consideration and execute and register the sale deed in favour of the plaintiff.
9.12. Clause 5 of the Agreement reads as follows:
"The 90 days time limitation being the essence of this agreement unless mutually 33/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 agreed and extended in writing."
9.13 Clause 10 deals with the default clause. A reading of Clause 5 would clearly indicate that any extension of time has to be in writing. Admittedly in the instant case, the first document that has been exchanged between the properties after Exs.P1 and P2 agreement is the notice dated 26.09.2005. The sale ought to have been completed by 24.07.2005. That apart, Ex.P8 is a sanction order from the plaintiff's bank. A reading of the same would show that on 22.07.2005, the Bank had sanctioned three medium term loan facilities to the plaintiff. The primary security for the loan was the property, subject matter of CS.No.116 of 2006. The loan was sanctioned for putting up a construction that too only after the complete plan was approved in the name of the plaintiff. It is therefore clear that it was only two days prior to the closing of the 90 days period that the sanction from the bank had been obtained. The demand to execute the sale deed has been 34/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 made two months after the period of 90 days had expired. Admittedly, there is no extension in writing between the parties. The bank statement that has been provided by the plaintiff as Ex.P7 is for the period 23.07.2005 to 28.07.2005. PW1 in his cross examination on 18.01.2017 has admitted that they had not made any written request to extend the time before the expiry of Exs. P1 and P2 as contemplated in Clause 5 of the Agreement.
9.14. He has also admitted that in the bank sanction order, Ex.P8, sanction has been given only in respect of Plot No.9B and not with reference to Plot No.9C which is subject matter of CS.No.112 of 2006. The witness would also admit that Ex. P3, which is a statement of accounts from the bank is an incomplete document, as also Ex.P7. The witness has also admitted that in Exs.P14 to P23, there is no provision for purchase of the suit property and it only reflects the assets of the plaintiff.
35/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 9.15. A mere statement in the plaint that the plaintiff was ready and willing to perform his part of the contract will not be sufficient. An act has to be displayed by the person seeking specific performance to prove his readiness and willingness while readiness indicates the financial capacity, willingness would did not the conduct. Ex.P14 to Ex.P.23 has been filed to substantiate their contention that the plaintiff was possessed with the necessary wherewithal to purchase the properties. Ex.P.3 is a Bank Statement for the period 07.04.2005 to 30.04.2005. This shows a balance of Rs.26,49,679.17/- on 30.04.2005. The bank statement for the period 01.07.2005 to 31.07.2005 has been filed by the plaintiff which shows a balance of Rs.84,98,584.07/-. Further Ex.P.14 to Ex.P.23 are the balance sheets from the year ending 31.03.2006 to 31.03.2015. The time for performance under Ex.P.1 & Ex.P.2 agreements was 24.07.2005. Though the plaintiff has produced documents to prove their readiness (wherewithal), as regards their 36/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 willingness it is seen that after their agreements of sale dated 25.04.2005 the first communication is only on 22.07.2005 when the plaintiff forwarded the loan sanction letter of the Bank. Therefore it is clearly evident that the plaintiff have not proved their willingness to proceed with the execution of the deed. This is further fortified by their inaction as per clause 5 of the agreement. The plaintiff was satisfied about the defendant's title to the property which is also mentioned in clause 9 of the respective agreements of sale. However, the plaintiff would state that the failure on the part of the defendant to get return of the original sale deed dated 29.05.2002 was the stumbling block for proceeding with the sale. This coupled with the fact that there was no demand by the plaintiff till 2 days prior to the date stipulated for executing the sale would demonstrate that the plaintiff was not willing to go ahead with the sale. The Hon'ble Supreme Court in the Judgement reported in 2011 (4) CTC 640 - Saradamani Kandappa Vs. S.Rajalakshmi and others, the Hon'ble Supreme Court 37/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 after discussing the various earlier decisions relating to time being essence of the contract has reiterated the principles stated in the case of K.S.Vidyanadam and others Vs. Vairavan - 1997 (1) CTC 628 (SC) in paragraph no.28 extracted herein below:
"28. Till the issue is considered in an appropriate case, we can only reiterate what has been suggested in K.S. Vidyanadam (supra) :
(i) Courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored.
(ii) Courts will apply greater scrutiny and strictness when considering whether the purchaser was `ready and willing' to perform his part of the contract.
(iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the 38/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 agreement. Courts will also `frown' upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three year period is intended to assist purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser."
9.16. From a perusal of these documents and evidence of PW1, the plaintiff has not been able to prove their willingness to go head with the sale deed. There is no communication or evidence to show that any time during the 90 day period or at the end of the 90th day, the plaintiff has called upon the defendants to produce the original sale deed after the deficit stamp duty had been paid by the defendants. There is also no written extension as contemplated by the agreement 39/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 under Clause 5. By including clause 5 parties have made time the essence of the contract. They have agreed any extension was to be by way of written contract between the two. That apart, if the plaintiff was ready and willing and was only waiting for the release of the sale deed dated 29.05.2002 by the District Revenue Officer nothing stood in their way to make an offer to the defendants release a portion of the sale consideration for ensuring that the defendants would pay the deficit stamp duty and get the release of the original sale deed dated 29.05.2002. In fact, DW1 in his cross examination would submit that it was due to lack of funds that they were not able to immediately pay the deficit stamp duty and get release of the original sale deed dated 29.05.2002.
9.17. From a reading of the agreement the release of sale deed dated 29.05.2002 does not appear to be a precondition for the plaintiff to pay the balance sale consideration and have the sale deed executed. 40/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 A reading of clause 9 would clearly show that the plaintiff had been satisfied about the defendants title to the property and was also aware about the original documents being kept pending under Section 47A of the Indian Stamp Act. I therefore hold Issue Nos. 1,2 and 4 against the plaintiff.
9.18. Additional Issue Nos. 1 and 2.
The plaintiff had filed an amendment seeking to amend the prayer in the suit with alternative reliefs after the trial in the suit had been completed. This application was allowed and amendment has also been carried. It is needless to state that once the amendment is ordered it will date back to the date of the suit.
9.19. The proviso to Section 22 (2) of the Specific Relief Act makes provision for the plaintiff to seek an amendment of the plaint to include the relief of refund of earnest money at any stage of the 41/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 proceedings. It is only where such a relief has not been claimed that the plaintiff is not entitled to the same. The learned counsel for the defendants would submit that the agreement of sale having been executed in April 2005 and the claim for refund has been made only on 21.08.2018 and therefore it is clearly barred by limitation. This argument does not fly in the face of the proviso to Section 22 (2) of the Specific Relief Act.
9.20. Useful reference can be made to the proviso to Section 22 (2) of the Specific Relief Act would read as follows:
"22 (2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such 42/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 relief".
9.21. A reading of the above provision would clearly show that in case there is no prayer for refund of earnest money, the courts cannot order a refund. However the relief can be sought for at any stage of the "proceeding" which implies that it can be asked even at the stage of appeal.
9.22. This Court in the judgment reported in 2001 1 MLJ page 502, has allowed a similar amendment at the stage of execution. Therefore, the objection of defendants is over ruled and additional Issue Nos.1 and 2 answered in favour of plaintiff by holding that the alternative relief of refund is not barred by limitation and the plaintiff is entitled to the same.
9.23.As regards the argument that the suit deserves to be 43/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 dismissed as the plaintiff firm is not registered is an argument taken for the first time during the arguments. The defendant has not raised this defense in their written statement and no issue is framed in this regard. Therefore the argument cannot be considered at this stage.
9.24. In the result the following decree is passed:
(a) C.S.No.112 of 2006 is decreed in respect of the alternative relief of refund of the advance amount of Rs.6,66,168/- together with interest @ 9% per annum from the date of suit till date of payment and this amount shall be a charge on the property subject matter of C.S.No.112 of 2006.
(b) C.S.No.116 of 2006 is decreed in respect of the alternative relief for refund of the advance amount of Rs.6,88,482/- together with interest @ 9% per annum from the date of suit till date of payment and this amount shall be a charge on the property subject matter of 44/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 C.S.No.116 of 2006;
(c)The parties shall bear their respective costs.
30.03.2021 Internet : Yes/No Index :Yes/No Speaking / Non-Speaking mrn Plaintiff's witness:
P.W.1 - Sairam Subramanian List of Exhibits marked on the Plaintiff's side:-
Ex.P-1 - Sale Agreement for Plot No.9B dated 25.04.2005 Ex.P-2 - Sale Agreement for Plot No.9C dated 25.04.2005 Ex.P-3 - Plaintiff's Bank Statement for April 2005 dated 02.05.2005 Ex.P-4 - Receipt for Plot No.9B dated 25.05.2005 Ex.P-5 - Receipt for Plot No.9C dated 25.05.2005 Ex.P-6 - Xerox copy of the defendants Sale Deed dated 29.05.2002 Ex.P-7 - Plaintiffs Bank Statement for July 2005 dated 01.08.2005 45/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 Ex.P-8 - Plaintiff's Bank Sanction order dated 22.7.2005 Ex.P-9 - Notice (office copy) plaintiff's counsel to defendants for Plot No. 9B dated 26.09.2005 Ex.P-10 - Notice (office copy) plaintiff's counsel to defendants for Plot No. 9C dated 26.09.2005 Ex.P-11 - Three postal acknowledgement cards (original) defendants to plaintiff's counsel for Plot No.9B dated 27.09.2005 and 28.09.2005.
Ex.P-12 - Three postal acknowledgement cards (original) defendants to plaintiff's counsel for Plot No.9C dated 27.09.2005 and 28.09.2005.
Ex.P-13 - Encumbrance Certificate for the period 25.11.1994 to 30.01.2006 Ex.P-14 - Audited balance sheet as on 31.03.2006 Ex.P-15 - Audited balance sheet as on 31.03.2007 Ex.P-16 - Audited balance sheet as on 31.03.2008 Ex.P-17 - Audited balance sheet as on 31.03.2009 Ex.P-18 - Audited balance sheet as on 31.03.2010 Ex.P-19 - Audited balance sheet as on 31.03.2011 46/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 Ex.P-20 - Audited balance sheet as on 31.03.2012 Ex.P-21 - Audited balance sheet as on 31.03.2013 Ex.P-22 - Audited balance sheet as on 31.03.2014 Ex.P-23 - Audited balance sheet as on 31.03.2015 Ex.P-24 - Encumbrance Certificate for 1.1.2006 to 27.07.2016 Ex.P-25 - Form A register of Firms for plaintiff partnership registration dated 10.10.2003 Defendant's witness:
D.W.1 - S.Sivaramakrishna List of Exhibits marked on the defendant's side:-
Nil 47/48 https://www.mhc.tn.gov.in/judis/ CS.Nos.112 and 116 of 2006 P.T. ASHA. J, mrn To,
1. M/s. Pelican Equipments, represented by its partner Mr. T. Sairam Subramanian No.38, Burkit Road, T. Nagar, Chennai- 600 017.
2. M/s. Sri Meenakshi Industries Represented by its Partner Mr. S. Sivaramakrishnan.
Pre-Delivery order in CS.Nos.112 and 116 of 2006 30.03.2021 48/48 https://www.mhc.tn.gov.in/judis/