Madras High Court
M.Kittusamy Gounder vs C.V.Karthikeyan on 7 March, 2011
Author: R.Mala
Bench: R.Mala
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 07-03-2011 CORAM: THE HONOURABLE MS.JUSTICE R.MALA Appeal Suit (First Appeal) No.145 of 2007 1. M.Kittusamy Gounder 2. S.Dhandapany 3. P.Gopalsamy 4. P.Palanisamy .. Appellants/Defendants 1 to 4 Vs. C.V.Karthikeyan .. Respondent/plaintiff Appeal Suit (First Appeal) against the judgment and decree dated 30.11.2006 in O.S.No.83 of 2005 on the file of the Additional District Court-cum- Fast Track Court No.5, Coimbatore at Thiruppur. For appellants : Mr.S.Parthasarathy, Senior Counsel for Mr.V.Bharathidasan For respondent : Mr.M.Balasubramanian JUDGMENT
Appeal Suit (First Appeal) is preferred against the judgment and decree dated 30.11.2006 in O.S.No.83 of 2005 on the file of the Additional District Court-cum- Fast Track Court No.5, Coimbatore at Thiruppur.
2. The averments in the plaint are as follows:
(a) The suit property originally belonged to the first defendant. On 9.5.1991, the first defendant entered into a lease agreement of vacant site with one Chidambara Bharathi, who is the brother of the plaintiff. The said Chidambara Bharathi took possession of the vacant site and put up building and converted the property into a dyeing factory by investing several lakhs of rupees including permission from the Pollution Control Board and other authorities. The plaintiff also became the partner in the said dyeing factory run by his brother Chidambara Bharathi under the name and style of Vaanavil Dyeing. They have formed another dyeing factory in the nearby S.F. No. and running the present dyeing factory in the suit property through their agent.
(b) The first defendant entered into an agreement of sale on 9.1.2003 with the plaintiff in respect of the suit property for Rs.8,75,000/-. The first defendant received Rs.3 lakhs as advance. The other conditions were incorporated in the agreement itself. Since already the plaintiff is in possession of the suit property, the suit sale agreement does not state that the possession has to be given at the time of the sale of the property. The plaintiff has to pay Rs.5,000/- per month towards the monthly rent for the vacant site till he was ready for purchase of the suit property. The plaintiff had been paying the monthly rent for the vacant land and also paid the additional sum of Rs.4,80,000/- as part sale consideration on five occasions, namely on 13.9.2003, 10.11.2003, 10.1.2004, 19.3.2004 and 27.8.2004. The sum of Rs.4,80,000/- includes the monthly rent of Rs.5,000/- p.m. He has paid Rs.3,55,000/- towards the balance sale consideration and Rs.1,25,000/- towards the rent. So, the plaintiff ought to have paid Rs.2,20,000/- to the first defendant and get the sale deed executed in his favour.
(c) The plaintiff was and is ready to purchase the property and informed his readiness and willingness in person to the first defendant. But the first defendant purposely evaded and postponed the date of the execution of the sale and was keen only on receiving the balance sale price without executing the sale deed in favour of the plaintiff.
(d) On 15.2.2005, the defendants 2 to 4 have made a local visit of the suit property along with some unknown persons and stated that the running of the dyeing factory should be stopped immediately and they are going to sell away the property to the said unknown persons. Then, the plaintiff came to know that the bogus sale deed had been executed by the first defendant in favour of the defendants 2 to 4 who are the son-in-laws of the first defendant. No property had been handed over to the defendants 2 to 4 by the first defendant.
(e) The plaintiff is in possession for more than 14 years. The first defendant sold the suit property to the defendants 2 to 4 only for Rs.1,51,000/- which is a far a sum. The sale deed does not contain the buildings and other materials consisted there in the suit property.
(f) The plaintiff will be exposed by his creditors if the Unit had been stopped by the first defendant, which will affect the entire business of the plaintiff in the area. The plaintiff was and is ready to purchase the suit property. The plaintiff is having sufficient money with him to purchase the suit property and ready and willing to deposit the same if the Court orders.
(g) The sale deed in favour of the defendants 2 to 4 is invalid. They may be dealing with the document and further create encumbrance over the same. Hence, the plaintiff is constrained to file the suit for decree of specific performance and also for declaration that the sale deed dated 19.1.2005 executed by the first defendant in favour of the defendants 2 to 4, is invalid and sham and nominal one, and also for permanent injunction restraining the defendants from interfering with his peaceful possession and also for injunction restraining the defendants from in any encumbering or alienating the suit property to third parties and prayed for costs.
3. The gist and essence of the written statement filed by the second defendant, adopted by the defendants 1, 3 and 4, are as follows:
(a) The first defendant is the owner of the property. He had entered into a lease agreement with Chidambara Bharathi on 9.5.1991. The plaintiff has to prove that he is the partner in the dyeing factory started by his brother. The sale agreement dated 9.1.2003 is fabricated and forged one brought by the plaintiff to gain illegal and unlawful enrichment. The sale agreement is void document and is unenforceable in the eye of law. The document had been concocted and fabricated with the help of his brother and his associates. In 2002 itself, the value of the property is more than Rs.25 lakhs. The plaintiff, with a view to knock away the valuable property for a sum, fabricated the agreement to his convenience and made an offer for a paltry sum of Rs.8,75,000/-.
(b) The allegation that the plaintiff has to pay a sum of Rs.5,000/- per month towards the rent in the vacant land till he was ready to purchase the property, is false. He has not paid the additional amount of Rs.4,80,000/- towards the sale consideration on five occasions, inclusive of the monthly rent of Rs.5,000/- and Rs.3,55,000/- towards the balance sale consideration and Rs.1,25,000/- towards the rent. As such, the allegation that the plaintiff has to pay only a sum of Rs.2,20,000/- towards the balance sale consideration to get the sale deed executed in his favour, is absolutely false and concocted story.
(c) It is also false to contend that the plaintiff was always ready and willing to perform his part of the contract and the first defendant was evading and postponing the execution of the sale deed and was keen to receive the balance sale price. The sale deed in favour of the first defendant and the defendants 2 to 4, is valid and binding on the plaintiff.
(d) The plaintiff is not at all in possession and enjoyment of the suit property. On 9.1.2003, the first defendant with the brother of the plaintiff, by name Chidambara Bharathi, has entered into a lease agreement with one K.Ishwaramoorthy and three others, whereby they have leased out the suit property for a period of three years for the purpose of running the dyeing factory in the name of Amman Colours. Since the defendants purchased the property, they attorn the lease with the first defendant and subsequently on 8.7.2005, without vacating the suit property and hand over the possession to the first defendant.
(e) The plaintiff has suppressed the material facts and filed the suit with false and imaginary allegations with a view to knock the valuable property by hook or crook. The plaintiff has never entered into the lease agreement with the first defendant. The document produced by the plaintiff, does not confer any right in the suit property or disclose that the plaintiff was in possession and enjoyment of the suit property in the capacity as a lessee and run the dyeing factory. There is no cause of action for filing the suit. The details of valuation are not correct. Hence, they prayed for dismissal of the suit with compensatory costs.
4. The trial Court, after considering the averments both in the plaint and written statement and the arguments of the learned counsel appearing on both sides, framed four issues for consideration and after considering the oral evidence of P.Ws.1 to 4 and D.Ws.1 and 2 and the documentary evidence of Exs.A-1 to A-28 and B-1 to B-8, decreed the suit, granting the equitable relief of decree of specific performance after declaring that the sale deed in favour of the defendants 2 to 4, dated 19.1.2005, is not valid under law, and also granted permanent injunction restraining the defendants from disturbing the enjoyment of peaceful possession by the plaintiff and also injuncted the defendants 2 to 4 from encumbering or alienating the suit property. Challenging the judgment and decree of the trial Court, the present First Appeal is filed by the defendants 1 to 4.
5. After hearing the arguments of both counsel, this Court frames the following points for consideration in this First Appeal:
(i) Whether the trial Court is correct in holding that Ex.A-1 sale agreement is a true and genuine document ?
(ii) Whether the trial Court is correct in holding that the sale deed dated 19.1.2005 in favour of the defendants 2 to 4, in Ex.A-2 = Ex.B-2, is an invalid and sham and nominal document ?
(iii) Whether the respondent/plaintiff is entitled to equitable relief of decree of specific performance ?
(iv) Whether the trial Court's judgment and decree, are sustainable ? and
(v) To what relief the appellants/defendants are entitled to ?
6. Learned Senior Counsel appearing for the appellants/defendants submitted that Ex.A-1 sale agreement is not a true and genuine document and it has been fabricated and so, the suit itself is not maintainable. The trial Court ought not to have considered the evidence of P.Ws.2 to 4 who are the interested witnesses and it ought to have rejected the evidence of the plaintiff. Since the first defendant is an illiterate person and old man, the duty of the plaintiff is more to prove that Ex.A-1 is a true and genuine document. He further submitted that non-examination of the partners of "Amman Colours", weakens the case of the plaintiff. Learned Senior Counsel further submitted that the respondent/plaintiff has not proved that he was always ready and willing to perform his part of the contract. The trial Court erred in coming to the conclusion that the Left Thumb Impression in Ex.A-1, is genuine by invoking Section 73 of the Indian Evidence Act, without the assistance of an expert in this aspect.
7. Learned Senior Counsel appearing for the appellants/defendants further submitted that the respondent/plaintiff has not tendered or deposited the amount into Court. The trial Court committed error in directing the plaintiff to deposit the additional sum of Rs.1 lakh in view of the high inflation of the value of the property in Tiruppur. The trial Court also committed error in rejecting the case of the appellants/defendants as to the delivery of possession of the suit property from Amman Colours. Learned Senior Counsel appearing for the appellants/defendants further stated that the respondent/plaintiff ha not come to the Court with clean hands and he has also given false statement in the plaint and therefore, he prayed for setting aside the judgment and decree of the trial Court and allowing the First Appeal, by dismissing the suit. To substantiate his arguments, learned Senior Counsel relied on various decisions.
8. Rebutting the said arguments, learned counsel appearing for the respondent/plaintiff submitted that to prove Ex.A-1 sale agreement is a true and genuine document, the plaintiff examined the attestors of the document Ex.A-1 and further stated that time is not the essence of the contract, since the first appellant/first defendant has received the amount and this aspect had been considered by the trial Court in proper perspective. The respondent/plaintiff is a partner along with his brother, which is evidenced by the document. The partners of Amman Colours are colluding with the defendants and hence, the plaintiff was not in a position to examine the same.
9. Learned counsel for the respondent/plaintiff further submitted that the evidence of P.Ws.1 to 4 and D.Ws.1 and 2 has clearly proved that Ex.A-1 is a true and genuine document. The trial Court considered all the aspects in proper circumspection and granted the decree. Further, the appellants 2 to 4/defendants 2 to 4 are the son-in-laws of the first appellant/first defendant and Ex.A-2 = Ex.B-2, is only for Rs.1,51,200/- which is only a paltry sum and the description of the property is also not correct. This factum has been taken into consideration by the trial Court in proper manner. For all these reasons, he prayed for dismissal of the First Appeal and confirming the judgment and decree of the trial Court.
10. Point (i) :
The appellants/defendants disputed Ex.A-1 sale agreement, dated 9.1.2003 executed for Rs.8,75,000/- and the advance alleged to have been paid is Rs.3 lakhs. The time for performance of the contract, is one year. Till then, the respondent/plaintiff ought to have paid Rs.5,000/- to the first defendant, towards the rent for the suit property and vacant site already leased out to the brother of the respondent/plaintiff, namely Chidambara Bharathi.
11. The main defence raised by the appellants/defendants is that Ex.A-1 is a fabricated document. There is no sale price fixed and that the first defendant never received Rs.3 lakhs as advance from the plaintiff. So, the burden is heavily upon the respondent/plaintiff to prove that Ex.A-1 sale agreement is a true and genuine document.
12. At this juncture, it is appropriate on the part of this Court to consider the evidence of the attestors to Ex.A-1, namely P.W.4 Subramania Pillai and P.W.3 Hariharan, the person who prepared Ex.A-1 and P.W.2, who is none other than the brother of the respondent/plaintiff, as also the evidence of the plaintiff.
13. Before considering their evidence, it is appropriate to consider the arguments of the learned counsel for the respondent/plaintiff. He submitted that no separate written statement is filed by the first defendant. His son-in-laws, i.e. the appellants 2 to 4/defendants 2 to 4 are alleged to be the purchasers under Ex.A-2 = Ex.B-2. The written statement filed by the second defendant was adopted by the first defendant and defendants 3 and 4. It is true that the defendants 2 to 4 are not the attestors of the document.
14. On a perusal of Ex.A-1 sale agreement, it is seen that the attestors are one Kadirvelu, Swaminathan and Subramania Pillai (PW4) and the document was prepared by Hariharan (PW3). Admittedly, Ex.A-1 sale agreement is an unregistered document. The first appellant/first defendant is only an illiterate person and it is alleged that he has put his Left Thumb Impression in Ex.A-1 in three pages of Ex.A-1, and he also received Rs.1 lakh as per the cheque of the Bank of India, Ganapathypalayam on 13.9.2003, Rs.1 lakh cash on 10.11.2003 and he received Rs.1 lakh cash on 10.1.2004 and cheque for Rs.1 lakh on 19.3.2004 and Rs.80,000/- on 27.8.2004, totalling Rs.4,80,000/-. So, Ex.A-1 sale agreement contains five LTI of the first appellant/first defendant Kittusamy Gounder.
15. Admittedly, no one has taken steps to send the document for the opinion of an expert. Now, it is appropriate to consider the argument advanced by learned counsel for the appellants/defendants in respect of Section 73 of the Indian Evidence Act, who submitted that the trial Court ought to have compared the signature and LTI with the assistance of an expert. So, before considering the decisions relied by counsel for either parties, it is appropriate to consider the evidence of P.Ws.1 to 4 and D.Ws.1 and 2.
16. First considering the evidence of D.W.1 (first defendant), who in his evidence stated in chief examination that the document had been fabricated. He denied the entire document and also the receipt of Rs.4,80,000/- endorsed on the back of the first page of the document Ex.A-1. While perusing his cross-examination, it is seen that he fairly conceded that the property had been leased out to Chidambara Bharathi (PW2) before 15 years as vacant site. His candid admission is that the property had been leased out to him for dying unit. He further submitted that the monthly rent was Rs.5,000/- p.m. P.W.2 Chidambara Bharathi himself made a construction in the property and for that, he has deducted Rs.3,000/- per month. He further deposed that on the South of the suit property, P.W.2 Chidambara Bharathi is having his house and vacant property. He also constructed a water treatment plant as well as a water sump. He further deposed that the property was leased out to Amman Colours and it was decided that Rs.10,000/- has to be given to him out of the total rent of Rs.38,000/-. He has gone to the extent of saying that the rent has been received by P.W.2 Chidambara Bharathi and he handed over his rent to him. D.W.1's further candid admission is that whenever the said Chidambara Bharathi paid the rent, he obtained his LTI in the voucher. He further stated that except the rent, he has not received any amount from P.W.2 Chidambara Bharathi. He further stated that he was not certain about his LTI. He was not in a position to say as to whether the document/Ex.A-1 contained his LTI. He has further gone to the extent of saying that he knows the plaintiff only after seeing him in the Court and before that, he does not know him.
17. In his cross-examination, D.W.1 (first defendant) stated that he does not know as to whether Ex.A-1 contains his LTI or not and he further deposed that he put his LTI only for receiving the rent and that is only in white paper. He further deposed that before the property was purchased by his son-in-laws, they do not know that the property was leased out to Amman Colours. He denied that he has received the amount by way of cheque(s).
18. Next, while perusing the evidence of P.W.1 (plaintiff), in his cross-examination, a question was posed to him that as per the agreement, 12 months' time had been granted for the performance of the agreement, in which itself, it was stipulated that every month, Rs.5,000/- be paid to D.W.1, in pursuance of the same, he has not paid Rs.5,000/- p.m and he paid the first instalment only after eight months. P.W.1 fairly conceded that only one year time ended on 9.1.2004 and further stated that he has not issued any notice within one year time, i.e. the time stipulated in Ex.A-1 and before filing the suit, because after one year, the first defendant received the balance sale consideration. He also fairly conceded that on 9.1.2003, the first defendant and Chidambara Bharathi entered into lease agreement with Amman Colours and he is not an attestor of the document. From 1.1.2003 to 8.7.2005, Amman Colours alone were the lessees.
19. At this juncture, while perusing Ex.A-1 with Ex.A-28, which came into existence on the same day, i.e. on 9.1.2003, in Ex.A-28, the attestors were Swamainathan and Kadirvelu and they are also the attestors of Ex.A-1.
20. Nextly, while perusing the evidence of P.W.2 Chidambara Bharathi, who is the brother of P.W.1 plaintiff, he corroborated the evidence of P.W.1. In his cross-examination, P.W.2 stated that since Amman Colours issued a cheque in his favour and since it is not an Account Payee cheque, he made an endorsement and handed over the same to the first defendant. After receipt of the same, the first defendant has affixed his LTI in Ex.A-1. He further stated that Swaminathan and Kadirvelu were also known to him, and there was no transaction between them. He also candidly admitted that in respect of the suit property, there was no lease agreement between P.W.1 and the first defendant. A suggestion in respect of the fabrication of the sale agreement and payment endorsement was denied by him. He further deposed that from the date of sale agreement onwards, Amman Colours are the tenant under him and P.W.2 admits that they have received Rs.11,50,000/- as rent.
21. P.W.3 Hariharan, who prepared Ex.A-1 sale agreement, in his cross-examination admitted his preparation of Ex.A-1 and that he is an Advocate. A suggestion posed to him that the document had been fabricated by the plaintiff, was denied by him.
22. P.W.4 is one Subramania Pillai, who deposed that he knows the plaintiff for the past ten years and they are runing "Dyeing Unit". He fairly stated that he has signed Ex.A-1 as an attestor and that P.W.3 Hariharan is his family friend and that Ex.A-1 had been written in the plaintiff's workshop. He denied the suggestion that no sale agreement had been executed.
23. While perusing the evidence of D.W.2 Gopalsami, who is the third defendant. He stated that he is the second son-in-law of D.W.1. He deposed that there is no sale agreement. But he has stated that after he got married in 1993, he was away from his in-law's house. He fairly conceded in his evidence that his father-in-law alone had been looking after the property and also receiving rent. He fairly conceded that it is his father-in-law's separate property and he had every right to deal with the same. He also fairly conceded that he does not know as to whether his father-in-law has entered into the sale agreement and as to what is the price he fixed. He also fairly conceded that he has not paid the amount before the Sub-Registrar Officer. On the date of the sale, he paid Rs.2 lakhs and Dhandapani paid Rs.2 lakhs and the fourth defendant paid Rs.1 lakh, but the document had been registered as per the guideline value. He also fairly conceded that on the date of sale, he has not taken the possession. He fairly admitted that in the sale deed, it is not mentioned as to whether he took possession from Amman Colours. While considering the evidence of D.W.2, it is clearly proved that the first defendant's son-in-laws are not having financial capacity to purchase the property and that as per the evidence of D.W.2, he is the owner of a car and he is having a tourist car centre. A suggestion posed to D.W.2 that he is not having any property, was denied by him. In his cross-examination, he fairly conceded that two co-brothers are transporting sand with the help of their lorry. He further stated that before filing the suit itself, he obtained a surrender deed. He denied the suggestion that to defraud the plaintiff, his father-in-law and his co-brothers joined together and created the sale deed. He in his cross-examination also stated that he paid Rs.5,30,000/- three years ago and further stated that he does not know as to when his co-brothers paid that amount. In his cross-examination, he also stated that he did not know as to whether his father-in-law has received the money from Palanisamy and gave his daughter in marriage to Palanisamy.
24. So, considering the evidence of P.Ws.1 to 4 and D.Ws.1 and 2, and from the conduct of D.Ws.1 and 2, it is clearly proved that without assigning any reason, the sale deed in Ex.A-2 = Ex.B-2, was executed in favour of the appellant/first defendant's son-in-laws, and this has clearly proved that to defraud the legitimate claim and right of the respondent/plaintiff, they have created Ex.A-2 = Ex.B-21 sale deed. Admittedly, Exs.A-1 and A-28 came into existence on the same day. The attestors of Ex.A-28 are same to that of the attestor of Ex.A-1 sale agreement. It is true that the partners of Amman Colours had not been examined before Court. The reason assigned by the respondent/plaintiff is that they have colluded with the first appellant/first defendant and so, the respondent/plaintiff was unable to examine them. In such circumstances, there is no reason assigned by the appellants/defendants as to why they were not examining the partners of Amman Colours. R.Subramainan is one of the attestors, for payment of the amount of Rs.1 lakh on 10.1.2004. The stamp paper has been purchased on 8.1.2003 in the name of Karthikeyan (PW1) for Ex.A-1 and Ex.A-1, which is an unregistered document, came into existence on 9.1.2003. Ex.A-28 was purchased in the name of R.Subramanian on 6.1.2003 and he is one of the attestors and Ex.A-28 rent deed came into existence on 9.1.2003. It is also an unregistered document.
25. So, the cumulative effect of the evidence of P.Ws.1 to 4 with D.Ws.1 and 2 has clearly proved that Ex.A-1 sale agreement is a true and genuine document.
26. Now, it is appropriate for this Court to consider the documents exhibited. Ex.A-21 is the statement of accounts of Amman Colours, which was alleged to have been signed by one of the partners, namely K.P.Subramaniam. Ex.A-22 is a letter dated 30.6.2005. Ex.A-22 is a vital document, in which Amman Colours partners, namely R.Subramaniam and K.Ishwaramoorthy, stated that they have issued the cheque No.990328 on 13.9.2003 and Rs.1 lakh on 10.1.2004 and another Rs.1 lakh on 19.3.2004 and that had been handed over to Kittusamy Gounder. As already stated, after the filing of the suit on 24.2.2005, Ex.A-22 came into existence on 30.6.2005. But Ex.A-21 is also dated 30.6.2005 and it is the statement of accounts of Amman Colours. The surrender deed Ex.B-1 came into existence on 8.7.2005, after Exs.A-21 and A-22.
27. It is now appropriate on the part of this Court to consider Ex.B-1, and it is the delivery note in which, the signature alone has been marked as Ex.B-1 series. That has been marked through P.W.1 and no date has been mentioned in it and it is an unregistered document. The alleged stamp papers have been purchased only on 8.7.2005 after Ex.As-21 and A-22 came into existence. Furthermore, admittedly, the partners of Amman Colours are the appellants 2 to 4 herein and they have not been examined to prove Ex.B-1 series. In such circumstances, I am of the opinion that as per Exs.A-21 and 22, as well as the evidence of P.Ws.1 to 4, coupled with the evidence of D.Ws.1 and 2, it is clearly proved that Ex.A-1 is a true and genuine document and in pursuance of the same, three cheques have been issued by Amman Colours, which have been given to the first appellant/first defendant and he also encashed the same. So, I am of the view that Ex.A-1 is a true and genuine document. The trial Court is correct in holding that Ex.A-1 is a true and genuine document. Point (i) is answered accordingly.
28. Point No.(ii):
Learned counsel for the respondent/plaintiff submitted that Ex.A-1 is a true and genuine document and to defraud the agreement holder, he has created a sham and nominal document (Ex.A-2 = Ex.B-2) in favour of his son-in-laws, who are the appellants 2 to 4. Further, while perusing the evidence of D.W.1 (first defendant), he himself stated that at the time of marriage of their daughters, the son-in-laws gave money to him. D.W.1, while he was cross-examined, stated that in each and every daughters' marriage, his son-in-laws gave Rs.5 lakhs to him. In his re-examination, he further stated as follows:
VERNACULAR (TAMIL) PORTION DELETED
29. So, the portion of the evidence of D.W.1 is falsifying the entire evidence of D.W.1, because, the second defendant got married 20 years back, and it is unheard that a bride-groom has given money to his would-be-father-in-law and that too, Rs.5 lakhs, and he is only the tourist car owner. Another two son-in-laws were doing transporting of sand with lorry.
30. As per the evidence of D.W.2, he admitted in cross-examination as follows:
VERNACULAR (TAMIL) PORTION DELETED In his cross-examination, he further stated that, VERNACULAR (TAMIL) PORTION DELETED
31. In such circumstances, it is unbelievable that at the time of marriage, the bridegroom paid each Rs.5 lakhs to the would-be-father-in-law. The entire evidence of D.W.2 is only a cock and bull story and it is not trustworthy and reliable.
32. Admittedly, P.W.2 Chidambara Bharathi is in possession and enjoyment of the suit property under the lease agreement with the first appellant/first defendant and he made a construction and obtained necessary permission from the concerned authority, i.e. the Pollution Control Board and others, and also obtained electricity service connection in his name and licence has also been obtained for conducting the dyeing unit, in which, the respondent/plaintiff was also one of the partners along with P.W.2, his brother and that is evidenced by Ex.A-16 partnership deed, dated 1.3.1999. One Kadirvelu and Chidambara Bharathi (PW2), and Karthikeyan (PW1-plaintiff) are the partners of M/s.Vaanavil Dyeing" and that been given with effect from 15.2.1999 and before that, the said Chidambara Bharathi alone was doing dyeing business in the unit individually, in the name and style of M/s.Vaanavil Dyeing upto 14.2.1999. The partnership deed need not be registered and one Baskaran and Pandian are the attestors. This has clearly proved that the respondent/plaintiff was one of the partners of Vaanavil Dyeing before he entered into the sale agreement with the first appellant/first defendant. After that only, on behalf of the lessee, Chidambara Bharathi and Kittusamy, the first appellant/first defendant, entered into a rental agreement with Amman Colours as per Ex.A-28 on the same day. Because of misunderstanding, to defraud the agreement holder, the first appellant/first defendant executed a sham and nominal sale deed in favour of his son-in-laws, who are the appellants 2 to 4/defendants 2 to 4. Even though in the written statement, the first defendant himself stated that the value of the property is more than Rs.20 lakhs, as per Ex.A-2 = Ex.B-2, the value is Rs.1,51,200/-. So, it has clearly proved that Ex.A-2 = Ex.B-2 sale deed in favour of the appellants 2 to 4/defendants 2 to 4, is only a sham and nominal document and it has come into effect only to defraud the agreement holder, i.e. P.W.1. Therefore, I am of the opinion that Ex.A-2= Ex.B-2 is only a sham and nominal document. The trial Court is correct in holding that Ex.A-2 = Ex.B-2 is a sham and nominal document, and it does not warrant any interference. Point No.(ii) is answered accordingly.
33. Point (iii):
Learned Senior Counsel appearing for the appellants/defendants stated that the respondent/plaintiff has not come to Court with clean hands and he has not given the correct statements. In paragraph 6 of the plaint, when once the plaintiff stated that he has paid the additional amount of Rs.4,80,000/- towards the part of the sale agreement, on five occasions, in the subsequent lines, he has stated that it includes the monthly rent of Rs.5,000/- per month,i.e. Rs.1,25,000/- for the rent and Rs.3,55,000/- towards the sale consideration and it is a false statement. Hence, the plaintiff has not come to Court with clean hands and therefore, he is not entitled to the equitable relief of decree of specific performance.
34. Learned Senior Counsel appearing for the appellants/defendants further stated that in Ex.A-1 sale agreement, the conditions imposed are that 12 months' time has been granted for performance of the contract and it was also specifically mentioned that till the balance amount is paid, every month, the agreement holder ought to pay Rs.50,000/- per month, in default, he shall forfeit Rs.3 lakhs which was paid as advance. As per the evidence of P.W.1 (plaintiff), he has not paid the amount of Rs.50,000/- for every month from the date of agreement and P.W.1 himself fairly conceded that he paid that amount after eight months, firstly on 13.9.2003, he paid Rs.1 lakh by way of cheque and so, the respondent/plaintiff is not ready and willing to perform his part of the contract. The reason assigned by P.W.1 is that since the first appellant/first defendant is ready to receive the amount, he has not been particular about the time stipulated in the sale agreement, and so, he paid that amount. In this regard, it is appropriate to consider the evidence of P.W.1, who in his cross-examination, has stated as follows:
VERNACULAR (TAMIL) PORTION DELETED
35. Since the first appellant/first defendant received the amount even though the time has elapsed, I am of the view that the time is not the essence of the contract. The respondent/plaintiff was always ready and willing to perform his part of the contract. So, the argument advanced by learned Senior Counsel appearing for the appellants/defendants that the respondent/plaintiff has come forward with false case, does not merit acceptance.
36. Now, it is appropriate to consider the decisions relied on by both parties.
37. Learned counsel appearing for the appellants/defendants relied on the following decisions:
(a) 1976 (1) MLJ 243 (Madras High Court): Ramaswamy Gounder Vs. Venkatachalam:
"The plaintiff had filed the suit for specific performance of an agreement making false allegations. The falsity of the case directly impinged on the essential ingredients and elements necessary for claiming the relief. On the question whether the plaintiff would be entitled to the relief, held, the falsity of the case put forward by the plaintiff disentitled him from obtaining the discretionary relief of specific performance of agreement."
(b) 2003 (1) MLJ 626 (Division Bench of Madras High Court): Arunachala Mudaliar Vs. Jayalakshmi Ammal):
"Plaintiff is not entitled to decree since plaintiff's statements on material particulars are false."
"The respondent had also claimed that she was in possession and that the appellant had interfered with her possession on 25.4.1982. The evidence shows that she was neither in possession nor was there any interference with possession. Viewed from this perspective it is clear that respondent is not entitled to a decree."
"It is true that not all false statements dis-entitle the suitor who comes to Court for specific performance, but in this case, the variance from truth is not negligible and on several material particulars the plaintiff's case has been found to be false."
(c) 1993 (2) LW 84 (Division Bench of Madras High Court): Chelliah Nadar.G. etc. & 4 others Vs. Periasami Nadar & 3 others :
"12. .... The plaintiff who came to the Court with a false case in material ingredients necessary for the grant of relief of specific performance will not be entitled to the equitable relief at all. It is obvious that in the present case the appellant has based his relief on Ex.A-1 after making interpolation so as to make it appear that he has a right in it. And on the ratio laid down in the decisions referred to above, even this is sufficient to refuse the relief to the appellant. ...."
(d) 1993 (2) LW 86 : Division Bench of Madras High Court: Nallaya Gounder & another Vs. P.Ramaswami Gounder etc. & 3 others:
" Held : in the present action, the Court has no hesitation in negativing specific performance for the reason that the plaintiffs have not come forward with clean hands in asking for the equitable relief. There is positive proof that Ex.A9 delivery receipt has been concocted for the purpose of this case. "We have also seen that the plaintiffs have put forward a false case regarding convening of panchayat. So, even if we are to take that Ex.A-1 agreement has come into existence prior to Ex.A agreement, the plaintiffs cannot maintain this action."
(e) 1993 (2) MLJ 560 (Division Bench of Madras High Court) : Viswanathan Vs. Lakshmiammal:
"The plaintiffs have come forward with a false case not only in the pleadings but also in the evidence. Hence, the Court holds that the plaintiffs are not entitled to the relief of specific performance."
(f) 1994 (2) MLJ 207 (Division Bench of Madras High Court): Krishnan Nair Vs. Parameswaran Pillai (died):
"In the present case, the plaintiff has approached the Court with a false case regarding delivery of possession and, hence, he is not entitled to get a decree for specific performance."
(g) 2001 (1) MLJ 172 (Division Bench of Madras High Court): Safia Banu Vs. Asamadhunnisabi:
"The import of the section (Section 20 of the Specific Relief Act) in the context of the case in hand, could be reduced into a nutshell that the specific relief is a discretionary relief of the Court and the discretion should be exercised on sound principles of law and reasons, that there cannot be any arbitrary refusal of the discretionary relief in favour of a party and that the Court shall exercise the discretion in a judicious manner, and the requirement of the warranting circumstances in the given case. Since the power that is exercised under the section by Courts being discretionary one, the party who seeks to avail of the equitable jurisdiction of the Court must come to the Court with clean hands and any party who makes false allegations and does not come with clean hands is not entitled to the equitable relief."
38. It is true that if a person seeks for the equitable relief of the decree of specific performance, he must approach the Court with clean hands and if any false material has been placed, he is not entitled to the said equitable relief of decree of specific performance. In the present case, the respondent/plaintiff entered into a sale agreement as per Ex.A-1 with the first appellant/first defendant and he paid the amount, which has been corroborated by the evidence and Ex.A-1 has been proved by way of examining the evidence, namely P.Ws.2 to 4. D.W.1's evidence also falsified the defence raised in the written statement. Furthermore, Amman Colours has given Exs.A-21 and A-22 which clearly proved that Ex.A-1 is a true and genuine document. Under those circumstances, there is no evidence to show that the respondent/plaintiff has come with false materials. So, the respondent/plaintiff has given correct particulars and filed the suit for specific performance. Hence, he is entitled to the relief of specific performance.
39. Learned counsel for the respondent/plaintiff relied on the following decisions:
(a) AIR 1990 Kerala 69 (Kerala High Court) (T.K.Santha Vs. A.G.Rathnam):
"7. .... In Satyanarayana Vs. Yelloji Rao, AIR 1965 SC 1405, construing S.22 of the Specific Relief Act, 1877 (corresponding to S.20 of the 1963 Act) their Lordships observed as follows (at p.1409):
"(7). Mr.Lakahmaiah cited a long catena of English decisions to define the scope of a Court's discretion. Before referring to them, it is necessary to know the fundamental difference between the two systems English and India qua the relief of specific performance. In England the relief of specific performance pertains to the domain of equity; in India, to that of statutory law. In England there is no period of limitation for instituting a suit for the said relief and, therefore, mere delay the time lag depending upon circumstances may itself be sufficient to refuse the relief; but in India mere delay cannot be a ground for refusing the said relief, for the statute prescribes the period of limitation. If the suit is in time, delay is sanctioned by law; if it is beyond time, the suit will be dismissed as barred by time; in either case, no question of equity arises."
(b) 2005 (3) SCC 342 : Devalsab Vs. Ibrahimsab F.Karajagi:
"Specific Relief Act, 1963 Section 20 Exercise of discretionary power to grant relief Equity Agreement of sale of suit property first entered into by Defendant 1 with plaintiff Though plaintiff was ready and willing to perform his part of the agreement, Defendant 1 instead of executing sale deed in his favour, entered into another agreement of sale with Defendant 2, who got a sham suit filed against Defendant 1 and obtained a compromise decree on the same day by virtue of which Defendant 2 obtained a sale deed in his favour from Defendant 1 in respect of the same property But High Court, with a view to grant discretionary relief under Section 20, held that as Defendant 2 was in possession of the property prior to the agreement of sale with plaintiff, in case of his eviction from the property he would lose money as well as long possession and that therefore, on consideration of hardship which was likely to be caused to Defendant 2, decree for specific performance of the sale agreement in favour of plaintiff passed by trial Court and first appellate Court cannot be confirmed in second appeal However, High Court directed that plaintiff would be entitled to refund of money with costs Held, High Court erred in granting discretionary relief in favour of Defendant 2 There is not much equity left in favour of Defendant 2 as the suit filed by him was a prearranged and preconceived agreement with Defendant 1 in order to cheat plaintiff Hence plaintiff entitled to decree for specific performance of the agreement of sale against Defendant 1."
40. Relying on the said decision reported in 2005 (3) SCC 342 (cited supra), learned counsel for the respondent/plaintiff submitted that Section 20 of the Specific Relief Act laid down the grant of relief of specific performance being discretion of the Court and keeping in view the hardship which is likely to be caused to other party while exercising the discretionary power.
41. Considering the above decisions, in the present case, the respondent-plaintiff and his brother are doing dyeing business and they took the vacant land in lease and constructed the building and obtained electricity service connection and purchased equipments and machineries and even obtained permission from the Pollution Control Board, and did the dyeing business and subsequently they have leased out to Amman Colours along with the first defendant. In those circumstances, while considering Section 20 of the Specific Relief Act, the discretionary relief has to be exercised without causing hardship to the party concerned. In this case, if the discretionary relief is not granted, the respondent-plaintiff will be prejudiced and his right will be curtailed. So, he is entitled to the discretionary relief of decree of specific performance.
42. Learned counsel for the respondent/plaintiff also relied on the following decisions:
(a) AIR 2000 SC 3106 (Gobind Ram Vs. Cian Chand) :
"6. Next decision on which learned senior counsel for the appellant relied is in Parakunnan Veetill Joseph's Son Mathew Vs. Nedumbara Kuruvile's Sori, AIR 1987 SC 2328. We may extract the relevant portion of the said judgment (para 14):
"Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff."
"9. In view of the above clear finding of the High Court that the appellant tried to wriggle out of the contract between the parties because of escalation in prices of real estate properties, we hold that the respondent is entitled to get a decree as he has not taken any undue or unfair advantage over the appellant. It will be inequitable and unjust at this point of time to deny the decree to the respondent after two Courts below have decided in favour of the respondent. While coming to the above conclusion we have also taken note of the fact that the respondent deposited the balance of the consideration in the trial Court and also the amount in the High Court, as directed. On the other hand appellant as held by the High Court tried to wriggle out of the contract in view of the tremendous escalation of prices of real estate properties. However, to mitigate the hardship to the appellant we direct respondent to deposit a further sum of Rs.3,00,000/- within 4 months from today with the registry of this Court and the amount shall be kept in Short Term Deposit in a nationalised bank. While giving the above direction we have taken note of the offer made to us on behalf of the respondent. This amount is to be paid to the appellant on giving his possession of the suit property to the respondent within 6 months from the date of the deposit of the above amount. The appellant shall also be entitled to withdraw the amount already deposited in the trial Court and the amount of Rs.1,00,000/- which has been kept in interest bearing fixed deposit in the registry of the High Court."
(b) AIR 2004 SC 909 (M.S.Madhusoodhanan Vs. Kerala Kaumudi Pvt. Ltd.):
"146. We called for the plaint filed by Madhusoodhanan in order to verify whether the Division Bench was correct in coming to the conclusion that Section 16 of the Specific Relief Act had not been complied with, we found that paragraph 14 of the plaint reads:
"The plaintiff was always ready and willing to perform his part of the agreement and is even now ready to perform his part of contract. The transfer of shares in respect of other companies have already taken place in accordance with Karar dated 16.1.1986."
147. In view of this clear averment, the finding of the Division Bench regarding the contravention of Section 16 of the Specific Relief Act, was perverse.
148. On the question of delay the cause of action arose when Madhavi died in December 1987. It cannot reasonably be said that filing of the suit ten months later was unreasonably delayed since some time must be given to see whether the parties did what they were required to do under the Karar after Madhavi's death.
149. Finally, the exercise of discretion by the Division Bench purportedly under Section 20 of the Specific Relief Act was contrary to the terms of the Section itself. Guidelines for the exercise of the Court's discretion to decree specific performance of an agreement have been statutorily laid down in sub-section (2). The Division Bench appears to have relied on clause (a) of Section 20(2) to deny specific performance of the Karar by holding the Madhusoodhanan had obtained an unfair advantage over others under the Karar because he had been allotted the more 'substantial' companies. This logic files in the face of clause (a) of sub-section (2) to Section 20 and the explanation thereto which say:
"S.20 Discretion as to decreeing specific performance.--xx (2) The following are cases in which the Court may properly exercise discretion not to decree specific performance--
(a) Where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant;
xxxxx xxxx xxxxx xxxxx Explanation 1.--Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b)."
150. This section is an instance of such legislative clarity that it needs no paraphrasing to highlight its intent. The Division Bench was clearly wrong in its foray into the question of the value of the assets allotted under the Karar, it has, despite Explanation 1 to Section 20(2) refused specific performance of the Karar on one of the excluded grounds viz., inadequacy of consideration."
43. So, I am of the view that the respondent/plaintiff has not furnished false case nor filed any false materials before Court, as per Section 20 of the Specific Relief Act, the respondent/plaintiff is entitled to the equitable relief of decree of specific performance.
44. Learned Senior Counsel appearing for the appellants/defendants submitted that the respondent/plaintiff was not always ready and willing to perform his part of the contract as per Section 16 of the Specific Relief Act. To substantiate his argument, he relied on the decision of the Apex Court reported in 2010 (10) SCC 512 (Man Kaur Vs. Hartar Singh Sangha), wherein, the Supreme Court held as follows:
"39. The learned counsel for the respondent contended that in terms of the agreement, the defendant had to furnish an NOC from Chandigarh Administration, as also ULC clearance and income tax clearance required for the sale and there was nothing to show that she had obtained them, and therefore, the question of the plaintiff proving his readiness and willingness to perform his obligations did not arise.
40. This contention has no merit. There are two distinct issues. The first issue is the breach by the defendant vendor which gives a cause of action to the plaintiff to file a suit for specific performance. The second issue relates to the personal bar to enforcement of a specific performance by persons enumerated in Section 16 of the Act. A person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him (other than the terms the performance of which has been prevented or waived by the defendant) is barred from claiming specific performance. Therefore, even assuming that the defendant had committed breach, if the plaintiff fails to aver in the plaint or prove that he was always ready and willing to perform the essential terms of contract which are required to be performed by him (other than the terms the performance of which has been prevented or waived by the plaintiff), there is a bar to specific performance in his favour. Therefore, the assumption of the respondent that readiness and willingness on the part of the plaintiff is something which need not be proved, if the plaintiff is able to establish that the defendant refused to execute the sale deed and thereby committed breach, is not correct. Let us give an example. Take a case where there is a contract for sale for a consideration of Rs.10 lakhs and earnest money of Rs.1 lakh was paid and the vendor wrongly refuses to execute the sale deed unless the purchaser is ready to pay Rs.15 lakhs. In such a case there is a clear breach by the defendant. But in that case, if the plaintiff did not have the balance Rs.9 lakhs (and the money required for stamp duty and registration) or the capacity to arrange and pay such money, when the contract had to be performed, the plaintiff will not be entitled to specific performance, even if he proves breach by the defendant, as he was not "ready and willing" to perform his obligations."
45. Thus, in the said decision of the Supreme Court reported in 2010 (10) SCC 512 (cited supra), it was held that the burden is upon the plaintiff who should not only plead and prove the terms of the agreement, but also prove his readiness and willingness to perform his part of the contract.
46. Learned Senior Counsel appearing for the appellants/defendants also relied on the following decisions of the Supreme Court:
(a) 1999 (8) SCC 396 : Balraj Taneja Vs. Sunil Madan:
"30. Applying these tests to the instant case, it will be noticed that in a suit for specific performance it is mandatorily required by Section 16 of the Specific Relief Act to plead readiness and willingness of the plaintiff to perform his part of the contract. The court, before acting under Order 8 Rule 10 (CPC) has to scrutinise the facts set out in the plaint to find out whether all the requirements, specially those indicated in Section 16 of the Specific Relief Act, have been complied with or not. Readiness and willingness of the plaintiff to perform his part of the contract is a condition precedent to the passing of a decree for specific performance in favour of the plaintiff."
(b) 1997 (3) SCC 1 (K.S.Vidyanadam Vs. Vairavan):
"Even where time is not of the essence of the contract, the plaintiffs must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property. While exercising its discretion, the Court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties)."
47. In the present case, the respondent/plaintiff in his pleadings, pleaded and averred and also proved that he was and is always ready and willing to perform his part of the contract and he also deposited the balance sale consideration in Court even on 22.12.2006 itself.
48. Learned counsel for the respondent/plaintiff relied on the decision of the Apex Court reported in 2010 (6) CTC 901 (J.P.Builders Vs. A.Ramadas Rao), wherein, it was held as follows:
"Held: The words "ready" and "willing" imply that the person was prepared to carry out the terms of the contract. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness."
49. While perusing the said decision of the Supreme Court reported in 2010 (6) CTC 901 (SC) (cited supra), it is seen that respondent/plaintiff has proved the execution of the agreement and also paid part of the sale consideration and also has the financial capacity to get the sale deed executed, and he has also proved his readiness and willingness to perform his part of the contract and therefore, he is entitled to the decree of specific performance.
50. In this regard, learned counsel for the respondent/plaintiff also relied on the decision of this Court reported in 2010 (2) LW 368 (Division Bench of this Court) (A.Ramadas Rao Vs. M/s.J.P.Builders), which was challenged before the Supreme Court as quoted in the abovesaid decision reported in 2010 (6) CTC 901 (SC). In the decision reported in 2010 (2) LW 368, the Division Bench of our High Court held as follows:
"34. The Plaintiff having proved execution of agreement and payment of part of sale consideration and having cash and financial ability to get the sale deed executed, we have no hesitation in holding that the plaintiff has proved his readiness and willingness to perform his part of the obligations under the contract. The finding of trial Court as to readiness and willingness of the Plaintiff to perform his obligation is to be confirmed."
51. In the present case, the respondent/plaintiff has proved that he was and is always ready and willing to perform his part of the contract and the financial means to pay the balance sale consideration. He also proved that Ex.A-1 sale agreement is a true and genuine document. Therefore, the respondent/plaintiff is entitled to get the equitable relief of decree of specific performance. The trial Court is correct holding that the respondent/plaintiff is entitled to the equitable relief of decree of specific performance. The judgment and decree of the trial Court are sustained. Point (iii) is answered accordingly.
52. Points (iv) and (v) :
In view of the answers given to Points (i) to (iii), it is held that the trial Court is correct in holding that Ex.A-1 sale agreement is a true and genuine document and also coming to the conclusion that the respondent/plaintiff was and is always ready and willing to perform his part of the contract and granted the equitable relief of decree of specific performance. Further, to defraud the agreement holder, Ex.A-2 = Ex.B-2 had been executed, which was a sham and nominal document. The trial Court also correctly declared the said Ex.A-2 = Ex.B-2 is an invalid document. The findings of the trial Court do not warrant interference by this Court. Even though the appellants/defendants filed Ex.B-1 series (of signatures), the entire document was not marked during trial, except the signatures. To prove that the possession was handed over to the appellants/defendants, none of the persons had been examined before Court. In such circumstances, the respondent/plaintiff is entitled to permanent injunction restraining the appellants/defendants from disturbing the peaceful possession and also injunction relating to encumbrance and alienation, as prayed for in the plaint. The judgment and decree of the trial Court do not warrant any interference. Hence, they are sustainable and the appellants/defendants are not entitled to any relief.
53. In the result:
(a) The First Appeal is dismissed with costs.
(b) The judgment and decree of the trial Court are confirmed.
(c) Two months' time from today is granted to the parties for execution of Ex.A-1 sale agreement.
cs To
1. The Additional District Court-cum-
Fast Track Court No.5, Coimbatore at Thiruppur.
2. The Record Keeper, V.R. Section, High Court, Madras