Madras High Court
M/S.Maxworth Home Limited vs Yamunakumari on 19 December, 2022
Author: D.Bharatha Chakravarthy
Bench: D.Bharatha Chakravarthy
A.S.No.335 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 01.12.2022
Pronounced on 19.12.2022
CORAM
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
A.S.No.335 of 2016
M/s.Maxworth Home Limited,
Represented by its
Authorized representative
Mr.Sivasailapathi,
Maxworth Nagar,
Sunnambu Kolathur Village,
Chennai 600 117. ... Appellant
-Vs.-
1.Yamunakumari
2.M/s.M.M.Builders,
31/2, Santhosh Garden,
Church Road,
East Mogappair,
Chennai 600 037. ... Respondents
Appeal Suit filed under Section 96 of the Code of Civil Procedure,
to set aside the exparte judgment and decree passed in O.S.No.79 of 2013
dated 10.10.2015 by the learned Principal District Judge, Kancheepuram
District at Chengalpattu.
https://www.mhc.tn.gov.in/judis
1/16
A.S.No.335 of 2016
For Appellant :Mr.A.Lakshmi Narasimhan,
for Mr.G.Sundaram
For Respondents :Mr.C.K.Chandrasekar
for Mr.G.Mohana Krishnan, for R1
Notice served - No appearance for R2
******
JUDGMENT
A. The Appeal Suit :
This appeal suit is filed against the judgment and decree in O.S.No.79 of 2013 dated 10.10.2015 passed by the learned Principal District Judge, Kanchipuram at Chengalpattu in and by which the suit filed by the plaintiff for specific performance, in terms of Clause 18 of the Construction-cum-Development Agreement dated 07.02.1997 and for a consequential permanent injunction, was dismissed by the Trial court. B. The Case of the Plaintiff :
2. The case of the plaintiff is that the land, in which the Suit property forms part, originally belonged to one Meena and others. The plaintiff-company, being in the business of promoting townships, spent a substantial amount to develop the suit land by plotting out the land into residential plots with projects to develop independent houses for https://www.mhc.tn.gov.in/judis 2/16 A.S.No.335 of 2016 prospective customers. The first defendant approached the plaintiff to purchase one of the said houses in Plot No.896 and vide a sale deed dated 04.02.1997, and upon payment of 25% of the total agreed value, the plot was conveyed to the first defendant. On the same day, the Development and Construction Agreement dated 07.02.1997 was entered into. As per Clause 6 of the said agreement, the possession of the above plot was vested with the plaintiff-company. As per Clause 18 of the said agreement, the plaintiff-company had a preemptive right to purchase the land as well as the superstructure for an amount equal to the amount paid by the customer, and if for any reason the customer is unable or unwilling to keep up with the schedule for payment and for any reason if they desire to terminate the agreement.
2.1. The original cost of the construction was Rs.10,29,850/-. However, the same was augmented to a sum of Rs.10,71,616/- for additional facilities. Though the defendant paid a sum of Rs.9,10,943/- in a phased manner, the defendant failed to pay the balance amount of Rs.1,60,673/- within the time schedule and therefore, the plaintiff was forced to slowdown the construction activities. Again the first defendant https://www.mhc.tn.gov.in/judis 3/16 A.S.No.335 of 2016 approached the plaintiff to complete the construction during the month of March 2003 and in view of the escalation of the cost, the plaintiff demanded a sum of Rs.2,53,327/- over and above the amount due, totally amounting to Rs.4,14,000/-. However, the defendant did not pay the amount and attempted to threaten the plaintiff. The first defendant attempted to trespass into the said property on 05.12.2008 and also authorised the second defendant to carry out the construction activities. The plaintiff objected to the same and issued a publication. Despite the same, the defendants were trying to further proceed with the construction and hence the instant suit to enforce Clause 18 of the said agreement was instituted.
C. The Case of the Defendants :
3. The first defendant filed the written statement, denying the allegations, stating that she had made payment for the various stages of construction and it is only the plaintiff, who had failed to complete the construction due to internal problems. The plaintiff made demands totaling to Rs.22,92,011/-. The Income-Tax Department had also attached the 1st defendant's house for the default of the plaintiff. Therefore the https://www.mhc.tn.gov.in/judis 4/16 A.S.No.335 of 2016 defendant prayed for dismissal of the suit.
3.1. The second defendant, who is the Builder engaged by the first defendant, had also filed a separate written statement stating that the owner of the plot, namely the first defendant, was in possession and enjoyment of the property and it was entrusted to them for the purpose of completing the construction and therefore, they were an unnecessary party to the suit.
D. The Issues & The Trial :
4. Upon the said pleadings, the following issues were framed by the Trial Court:
“(1) Whether the plaintiff has no locus standi to file the above suit ?
(2) Whether the suit is bad for non joinder of necessary parties ?
(3) Whether the plaintiff is entitled to the relief of Specific Performance as prayed for ?
(4) Whether the plaintiff is entitled to the relief of permanent injunction as prayed for ?” (5) To what relief the plaintiff is entitled to ?
https://www.mhc.tn.gov.in/judis 5/16 A.S.No.335 of 2016 4.1 However, subsequently the defendants were set ex-parte and on behalf of the plaintiff, one T.Palanivelu was examined as P.W.1 and exhibits Ex.A-1 to Ex.A-34 were marked.
E. The Findings of the Trial Court :
5. The Trial Court thereafter took up the matter for passing an ex- parte decree. By Judgment dated 10.10.2015, it found that the case of the plaintiff is that the total cost of construction is Rs.10,71,616/-, and the first defendant had paid Rs.9,10,943/-, and for the default of the balance amount, which is said to have happened in the year 1997, the instant suit was instituted in the year 2008. There is also provision for an alternative relief in the said agreement. From Ex.A-5/Communication, it is clear that the payments were made by the first defendant up to 02.03.1998. The Trial Court found that the disputes had arisen only in respect of the additional payments demanded. The Trial Court found that the agreement itself was unfair. As per Clause 5 of the said agreement, when the plaintiff-company was entitled to recover the dues from the customer together with an interest of 25% per annum, the plaintiff could completed construction and recovered the balance sum. Therefore, merely https://www.mhc.tn.gov.in/judis 6/16 A.S.No.335 of 2016 because the defendants remained ex-parte, the suit for specific performance need not have been decreed and as per Section 14 of the Specific Relief Act, when there is adequate alternative relief, there was no need to specifically enforce the contract and dismissed the suit filed by the plaintiff. Aggrieved by the same the plaintiff has filed the present Appeal Suit.
F. The Submissions :
6. Heard Mr.A.Lakshmi Narasimhan, learned counsel for the appellants and Mr.G.Mohana Krishnan, learned counsel for the first respondent. Even though, notice was served on the second respondent, the second respondent did not appear.
6.1. Mr.A.Lakshmi Narasimhan, learned counsel for the appellant would submit that the first defendant entered into the Ex.A-2/Agreement, voluntarily and with eyes wide open. On an overall perusal of the other exhibits and the case of the parties, it would be clear that the area was developed as a township under the name “Maxworth Nagar” and therefore so as to ensure that each and every plot was developed, https://www.mhc.tn.gov.in/judis 7/16 A.S.No.335 of 2016 simultaneously a specific agreement was entered into. As per Clause 6 of the said agreement, the possession was duly and lawfully handed over to the plaintiff. Therefore, when such possession continued to be with the plaintiff, the defendant cannot illegally walk into the premises, complete the construction and terminate the agreement of the plaintiff-company without evicting the plaintiff-company by due process of law. As per Clause 18 of the said agreement, when the customer was unable or unwilling to keep up with the schedule for payment, the plaintiff has a preemptive right to purchase the land. Therefore, the suit was filed in exercise of the said Clause.
6.2 The learned counsel for the appellant further contended that when the suit was not defended by the defendants, the Trial Court ought to have passed a decree as there was no contra evidence that the first defendant was duly keeping up with the payment schedule. The Trial Court has considered the averments made by the first defendant in the communication to reject the case by believing the first defendant, even when the first defendant remained ex-parte. In the absence of due cross examination by the plaintiff, the said allegations on behalf of the https://www.mhc.tn.gov.in/judis 8/16 A.S.No.335 of 2016 defendants could not have been taken into account by the Trial Court and therefore, the Trial Court erred in dismissing the suit.
6.3 The learned counsel for the appellant relied upon the Judgment of the Hon'ble Supreme Court of India in Babu Lal Vs. Hazari Lal Kishori Lal and others1, stating that the relief of specific performance could not have been denied for the reason that an alternative relief is permissible.
6.4. The learned counsel also relied upon the Judgment of the Bombay High Court, in Kahini Developers Pvt. Ltd., Vs. Mukesh Morarji Panchamatia and others2, stating that when the plaintiff has not abandoned the relief of specific performance, the same could not be denied to them.
6.5. The learned counsel relied upon the Judgment of the Hon'ble Supreme Court of India, in Urmila Devi and others Vs. The Deity, Mandir Shree Chamunda Devi, through temple Commissioner and 1 1982 AIR 818 2 2013 SCC OnLine Bom 220 https://www.mhc.tn.gov.in/judis 9/16 A.S.No.335 of 2016 others3, to contend that even if the relief of specific performance could not be passed, the alternative relief should have been substituted and granted in the same suit.
6.6. The learned counsel relied upon the Judgment of the Hon'ble Supreme Court of India in Jagdish Singh Vs. Natthu Singh4, to contend that at least compensation in view of the specific performance could have been decreed by the Trial Court.
6.7. Per contra, Mr.G.Mohana Krishnan, learned counsel for the respondent would submit that it is only the plaintiff, who has defaulted in complying with the Ex.A-2/Agreement, as the plaintiff did not keep up with the payment schedule, as they had run into trouble. As a matter of fact, the first defendant's property was attached by the Income-Tax Department on a erroneous belief that the plaintiff had rights in it. The first defendant was put to grave prejudice on account of the same and ultimately had to approach this Court for relief. The plaintiff did not complete the construction even though more than 80% of the amount was
3 Civil Appeal No.462 of 2018, dated 10.01.2018 4 1992 AIR 1604 https://www.mhc.tn.gov.in/judis 10/16 A.S.No.335 of 2016 paid well within time. As a matter of fact, the first defendant gave a second opportunity to the plaintiff even to restart the construction and complete the same. But in spite of the same, the plaintiff failed and they neglected, demanding additional amounts. This being the situation, the first defendant had engaged third party builders for construction and having completed the construction is in possession and enjoyment of the property. It was stated that the suit has been filed belatedly in the year 2008 just as a counter blast to the other suits filed by the first defendant. Only because of some default in communication between the learned counsel and the first defendant, she did not appear before the Trial Court. In any event, the Trial Court already has appreciated the issue and had, therefore dismissed the suit and prays for dismissal of the appeal suit. G. The Points for Consideration:
7. I have considered the rival submissions made by either side and perused the materials available on record. The points for consideration in the appeal suit are:
(i) Whether or not the plaintiff has a right to invoke Clause 18 of Ex.A2/Agreement for Development & https://www.mhc.tn.gov.in/judis 11/16 A.S.No.335 of 2016 Constructions seeking enforcement of their right to preemptive purchase ? and
(ii) Whether, the Trial Court should have at least awarded compensation in view of re-conveyance for damages, for the loss of the plaintiff?
H. On Point No. (i):
7.1 It can be seen that even though the plaintiff had intended to develop the said property as a township, the sale of the plot is simply a sale of residential plot which the defendant had purchased and has been put into possession. In the Construction and Development Agreement, Clause 18 it is agreed by the parties that the plaintiff will have a preemptive right to purchase in case of default or unwillingness on the part of the first defendant. Thus, it can be seen that at the first instance, there must be either default or unwillingness on the part of the first defendant. Even in the ex-parte case of the plaintiff, on a perusal of the communications between the parties, it is clear that was neither due to the default nor due to the unwillingness of the payment, but rather because of the disputes that had arisen on account of demanding the additional amount. Therefore, the condition precedent to invoke Clause 18 is itself not satisfied.
https://www.mhc.tn.gov.in/judis 12/16 A.S.No.335 of 2016 7.2. Secondly the right, which is given, is termed as the right to pre-emptive purchase. The right to pre-emptive purchase means that if the defendant had to offer the property for sale, then it would firstly be offered to the plaintiff But in this case what was contemplated is a compulsory right of re-purchase. It is in the form of a reverse agreement to sell. In such a case, the cause of action for the plaintiff arose in the year 1997-1998. However this suit was instituted in the year 2008. All these years the plaintiff had not shown that he was either ready or willing to purchase the suit property and over and above the same, without any right in the suit property, on the default of the plaintiff, the suit property was also attached by the Income-Tax Department. Therefore, the agreement under Clause 18, cannot be enforced at such a belated stage as the plaintiff's case is hit by delay and laches.
7.3. Further as stated by the Trial Court, when Rs.9,10,943/- has been paid by the first defendant for the fraction of amount which is remaining unpaid, to pray for selling of the property itself would be unfair and even without reference to the facts and circumstances of the case, on the face of it, it is rightly concluded by the Trial Court that Clause 18 is https://www.mhc.tn.gov.in/judis 13/16 A.S.No.335 of 2016 unfair and inequitable and the plaintiff will not be entitled for a remedy of specific performance on such clause. Accordingly, this point is answered. I. On Point No. (ii):
7.4. The next submission of the learned counsel for the appellant is that at least the alternative relief of appropriate compensation should have been awarded by the Trial Court. The same could have been done if the default is on the part of the first defendant. But in this case, there is dispute between the parties in view of the demand of additional sum and therefore that would be a separate lis by giving opportunity to both the parties and after determining whether the plaintiff was put to any loss. In the absence of such proof, in the present suit no other relief can be granted to the plaintiff. In that view of the matter the Trial court has rightly dismissed the suit. Accordingly, this point is answered.
7.5. In view of my above findings, I concur with the Trial Court with reference to the findings of issue No.1 that the plaintiff has no locus standi to file the suit and that the plaint is not bad for non-joinder of necessary parties as per issue No.2. I also concur with the findings of the https://www.mhc.tn.gov.in/judis 14/16 A.S.No.335 of 2016 Trial Court that the plaintiff is not be entitled to the relief of specific performance and permanent injunction as per the issue Nos.3 and 4 and in view of my above findings, I hold that the plaintiff will not be entitled to any other alternative relief and therefore, the Judgment and decree of the Trial Court does not require interference.
J. The Result :
8. In the result :
(i) A.S.No.335 of 2016 is dismissed;
(ii) There shall be no order as to costs;
(iii) Consequently, the connected miscellaneous petitions are also closed.
19.12.2022 Speaking order Index: Yes nsa To
1.The Principal District Judge, Kancheepuram District, Chengalpattu.
2.The Section Officer, V.R.Section, High Court of Madras. https://www.mhc.tn.gov.in/judis 15/16 A.S.No.335 of 2016 D.BHARATHA CHAKRAVARTHY, J.
nsa A.S.No.335 of 2016 and C.M.P.Nos.3992 and 3989 of 2020 19.12.2022 https://www.mhc.tn.gov.in/judis 16/16