Telangana High Court
Dasari Narasimha Reddy vs M/S.Yashoda Educational And Cancer ... on 25 April, 2022
Author: A.Rajasheker Reddy
Bench: A Rajasheker Reddy, M. Laxman
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THE HON'BLE SRI JUSTICE A RAJASHEKER REDDY
&
THE HON'BLE SRI JUSTICE M. LAXMAN
CMA Nos.422, 986 of 2019 & 508 of 2018
COMMON JUDGMENT::
Civil Miscellaneous Appeals 422 & 986 of 2019 are filed against the order dated 28-12-2018 passed in IA No.952 of 2018 in OS No.255 of 2018 by the XVI Addl. District and Sessions Judge-cum-XVI Addl. Metropolitan Sessions Judge, Ranga Reddy District at Malkajgiri. The dispute is with regard to land admeasuring to an extent of Ac.40-28 guntas in Sy.No.525, 533, 535, 534, 540 and 537 situated at Gundla Pochampally village, Medchal Mandal, the then Ranga Reddy District, now Medchal District, (for short, "the suit property") between the parties to these appeals. By the said order dated 28-12-2018, the Court below granted temporary injunction restraining the 1st defendant- owner of the suit property from alienating or creating charge subject to the plaintiff depositing 50% of balance sale consideration under the suit agreement of sale dated 10-06- 2 2013 within a timeframe, with a default clause. Aggrieved by the order in so far as the condition to deposit 50% of the balance consideration, CMA No.422 of 2019 is filed by the plaintiff. Aggrieved by the grant of interim conditional order, CMA No.986 of 2019 is filed even by the 1st defendant-owner of the suit property. CMA No.508 of 2018 is filed by the 1st defendant in suit OS No.683 of 2016 against the order passed in IA No.580 of 2016 in directing himself and the 2nd defendant therein (plaintiff in suit OS No.255 of 2018) from alienating or creating charge over the suit property, which is part of the suit property in OS No.255 of 2018.
02. Since the subject matter and the parties are same in all these three appeals, they are heard and being disposed of together. It would suffice if facts in CMA No.986 of 2019 are adverted to. For convenience sake, the parties hereinafter will be referred to as they are arrayed in suit OS No.255 of 2018. 3
03. The facts stated are:-the plaintiff and 1st defendant-owner of the suit property have entered into an agreement of sale on 10- 06-2013 in respect of the suit property. Under the said agreement of sale, the plaintiff has agreed to purchase the suit property for total sale consideration of Rs.12 crores and has paid a sum of Rs.1,21,00,000/- as part sale consideration from out of Rs.3 crores advance amount. At that juncture, 2nd defendant (Yashoda Educational & Cancer Research Society) seems to have approached the plaintiff-agreement holder and the 1st defendant-owner of the suit property expressing its interest to purchase part of the suit property to an extent of Ac.5-08 guntas. Upon discussions, the plaintiff along with 1st defendant entered into agreement of sale with 2nd defendant in respect of part of the suit property vide agreement of sale dated 26-12-2013, which is suit property in OS No.683 of 2016 filed by 2nd defendant, and in pursuance thereof, the 2nd defendant has also paid an amount of Rs.1,13,10,000/- as advance. Thus, 4 the 1st defendant received a total sum of Rs.1,77,55,000/- from the plaintiff including his nominee the 2nd defendant. That as per the terms and conditions of the agreement of sale dated 10- 06-2013, the plaintiff is liable to pay total advance amount subject to conversion of the suit property from agricultural use to residential use, which the 1st defendant failed to do so till date. That the plaintiff is ready and willing to perform his part of the contract, but the 1st defendant by giving a go-bye to the covenants in the agreement, proclaiming that the said agreement of sale dated 10-06-2013 has been cancelled without any justifiable cause or reason. That the 1st defendant has no right to cancel the agreement of sale as he himself failed to convert the land from agriculture to residential use as agreed to by him under the terms of the agreement and; as such the plaintiff is constrained to file the instant suit seeking relief of specific performance of agreement of sale dated 10-06-2013 and as the 1st defendant is making attempts to sell away the property 5 with a view to defeat his rights and trying to create third party interest, he filed an application for injunction, which was rightly granted by the Court below, but ought not to have imposed condition to deposit 50% of the sale consideration, pending adjudication of the suit, which is erroneous.
04. The case of the 1st defendant-owner of the suit property is that though he entered into an agreement of sale dated 10-06- 2013, the plaintiff has not drafted the agreement in consonance with the oral agreement negotiated by them. That he required the plaintiff to get a fresh agreement drafted by making corrections as suggested by him, which is evident from the suit agreement of sale and it contains material alterations and manipulated it to bring the suit within-time, as such, the agreement is inconclusive. That fixing of sale consideration at Rs.12 crores for the suit property is contingent to payment of advance amount of Rs.3 crores on or before 15-06-2013 which clause is non-negotiable and the plaintiff miserably failed to 6 pay advance as well as balance sale consideration as per the terms of the agreement, within the time limit stipulated and as such the suit agreement of sale itself got terminated. That in the written statement filed by the plaintiff in suit OS No.683 of 2016 who is arrayed as 2nd defendant, it is averred that the suit agreement dated 10-06-2013 stood cancelled and on humanitarian grounds, the 1st defendant agreed to refund the advance amount paid by the plaintiff in suit OS No.255 of 2018 and accordingly instructed the 2nd defendant (plaintiff in OS No.683 of 2016) to pay the plaintiff in OS No.255 of 2018 a sum of Rs. 56,55,500/- which was received by him through cheque.
05. The 1st defendant denied the averments of the plaintiff that at his instance, the 2nd defendant paid an amount of Rs.56,55,500/- to him and the payment made by the 2nd defendant formed part of sale consideration payable by the plaintiff under agreement of sale dated 10-06-2013 and he received Rs.1,77,55,000/- from the plaintiff and his nominee i.e. 7 the 2nd defendant. That the advance amount paid by the plaintiff is meagre when compared to the amount payable by the 1st defendant to the Government and HMDA for conversion of the suit property from agriculture use to residential use which is estimated at Rs.1,36,80,000/- and it is more than the advance amount paid by the plaintiff. That the plaintiff agreed to take the suit property on as is basis on lump sum which will otherwise fetch at least Rs.100 crores. That suit agreement is not enforceable as it is cancelled and the plaintiff has no cause of action and balance of convenience in his favour, muchless prima facie case.
06. Heard Sri Vedula Srinivas, Sri K. Vivek Reddy, learned senior counsel, Sri R. Ranganathan, Sri Bala Mohan Reddy & Sri Rohit Pogula learned counsel for the respective parties in these appeals.
There is no dispute with regard to the status of the parties viz., 1st defendant is the owner of the suit property and at first 8 instance, the 1st defendant and the plaintiff entered into suit agreement of sale dated 10-06-2013 for a total consideration of Rs.12 crores subject to payment advance amount of Rs.3 crores for entering into a further agreement, which according to the 1st defendant, the plaintiff failed to comply and, therefore, the suit agreement stands terminated. It is also not in dispute that the 1st defendant and the plaintiff together executed agreement of sale in favour of the 2nd defendant vide agreement of sale dated 26-12-2013 in respect of part of the suit property to an extent of Ac.5-08 guntas and he paid part sale consideration to the tune of Rs.1,13,10,000/- to the 1st defendant and the plaintiff as against the total sale consideration of Rs.3.64 crores.
07. Sri Vedula Srinivas, learned senior counsel appearing for the appellant-1st defendant submits that in a suit for specific performance grant of relief itself is discretionary in nature, unless strong prima facie case is made out, balance of convenience tends towards grant of injunction and plaintiff 9 would suffer irreparable loss if no injunction is granted. It is also stated that the plaintiff has not deposited the 50% of the balance sale consideration though no stay is granted by this Court. Learned senior counsel further argued that there are material alterations in the suit agreement dated 10-06-2013 and the true intention of the 1st defendant is not manifested and the payment of advance amount of Rs.3 crores on the allotted dates in not complied. Sri Sri R.Ranganathan, learned counsel argued that inasmuch as the 2nd defendant (plaintiff in suit OS No.683 of 2016) sought for alternative relief of refund of advance amount paid with interest @ 15% p.a., interim injunction ought not have granted against the true owner, the 1st defendant and also raised similar contentions as that of senior counsel. The decisions in AMBALAL SARABHAI ENTERPRISE LTD. vs. KS INFRASPACE LLP LTD., 2020 AIR (SC) 307 & BALASAHEB DAYANDEO NAIK (DEAD) THRU LRS vs. APPASAHEB DATTATRAYA PAWAR, (2008) 4 SCC 464) are relied on.
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08. Sri T. Bala Mohan Reddy, learned counsel for the 1st respondent-plaintiff argued that advance amount of Rs.3 crores is to be paid only upon converting the suit property from agriculture to residential use. It is contended that the plaintiff, pursuant to the suit agreement has paid certain amounts, if not Rs.3 crores advance amount, as part sale consideration and there is no denial of that fact. According to the counsel, the plaintiff has paid an amount of Rs.1,77,55,000/- to the 1st defendant and as per the terms of the suit agreement, after conversion of the land and after receipt of Rs.3 crores, a further agreement was to be entered by them. Learned counsel stated that till today the 1st defendant has not taken any action for conversion of nature of the land from agriculture to residential use, though the plaintiff is ready and willing to perform his part of the contract as such the agreement of sale dated 10-06-2013 is valid and binding on the 1st defendant. He also submitted that readiness and willingness to perform the contract does not mean that the 11 plaintiff has to deposit the amounts either at the time of the institution of the suit or for grant of the injunction order pending suit unless in a given case directed by the Court. Learned counsel also drawn our attention to Section 16 ( c), Explanation
(v) of the Specific Relief Act and relied on the decision in MAHESH SINGHAL vs. BHUPINDER NARAIN BHATNAGAR, (ILR I (2014) DELHI 340).
09. Sri K. Vivek Reddy, learned senior counsel appearing for the 2nd respondent-2nd defendant (plaintiff in suit OS No.683 of 2016) argued that the 2nd defendant has paid an amount of Rs.1,13,10,000/- as part sale consideration and the 1st defendant (owner of the land) and the plaintiff (1st agreement holder) have received the same and acknowledged vide receipts and there is a concluded contract dated 26-12-2013 between the parties as such the Court below rightly granted injunction in favour of the 2nd defendant, who is plaintiff in suit OS No.683 of 2016. Learned counsel stated that it cannot be said that there is no 12 prima facie case or balance of convenience in favour of 2nd defendant and therefore the decision relied on by the learned senior counsel for the (appellant) 1st defendant has no application to the facts of the present case. Decision in BEST SELLERS RETAIL (INDIA) PRIVATE LIMITED vs. ADITYA BIRLA NUVO LIMITED, (2012) 6 SCC 792) & WANDER LTD. vs. ANTOX INDIA PVT. LIMITED, 1990 (Supp) SCC 727) are relied on.
10. The execution of the 1st agreement of sale dated 10-06- 2013 which is subject matter of suit OS. No.255 of 2018 by the 1st defendant in favour of the plaintiff and also the 2nd agreement of sale dated 26-12-2013 which is subject matter in a suit OS No. 683 of 2016 in favour of the 2nd defendant by the plaintiff and the 1st defendant in respect of part of the suit property are not in dispute, and the dispute is as to the material alterations and as to the of sale consideration and the obligations of the parties to perform their part of the contract in terms of the covenant. The 1st defendant who is owner of the suit property 13 does not deny the execution of the agreement of sale deeds both in favour of the plaintiff and the 2nd defendant and receipt of part amounts as part of sale consideration in pursuance thereof. The 1st defendant (owner of the suit property) in both the suits is not seriously disputing the execution of the agreement of sales in favour of the plaintiff and the 2nd defendant, except disputing as to the fixation of sale consideration. The alterations and interpolations which the 1st defendant's counsel is referring to in agreement dated 10-06-2013 executed in favour of plaintiff (OS No.255 of 2018) does not make out much difference when they are read together, the text of the relevant clause before alteration and after alteration, reads thus:-
"2. (v).Rs.1,59,00,000/- (Rupees One Crore Fifty Nine Lakhs) shall be paid after getting the clearance from the statutory authorities for change of land use to residential use."
The text of the relevant clause after alteration, reads thus:-
"2. (v).Rs.1,59,00,000/- (Rupees One Crore Fifty Nine Lakhs) shall be paid after obtaining land conversion to residential use. 14 After payment of Rs.3 crores (receiving) from purchaser a fresh agreement will be concluded with the consent of both the parties."
11. The various allegations and counter allegations made by the plaintiff, 1st and 2nd defendants against each other as regards the material alterations in the suit agreement; whether the sale consideration is not the true intent of the 1st defendant that is reflected in the suit agreement of sale; whether 1st defendant got returned the amounts paid by the plaintiff through the 2nd defendant on humanitarian grounds and the suit agreement stood cancelled; whether the plaintiff and the 1st defendant offered to sell part of the suit property to the 2nd defendant; whether the 2nd defendant paid part sale consideration in pursuance thereof not only on his behalf and also on behalf of the plaintiff towards the sale consideration payable by the plaintiff to the 1st defendant; whether the 1st defendant under the covenants of agreement of sale entered into with the plaintiff is under obligation to obtain conversion of the land use from agriculture to residential use and whether the 15 plaintiff and the 2nd defendant are ready and to perform their part of contract to seek to execute the agreement of sales dated 10-06-2013 and 26-12-2013 are all questions of fact which can be decided only after adducing oral and documentary evidence by the respective parties.
12. Coming to the exercise of jurisdiction and discretion exercised in passing the impugned order by the Court below is concerned, it is now settled that plaintiff seeking temporary injunction in specific performance suit has to show strong prima facie case on undisputed facts, but also it must be shown prima facie injury that would be suffered by the plaintiff on refusal of temporary injunction, which cannot be afterwards, compensated by any decree which the Court can pronounce in the result of the case. (see BEST SELLERS RETAIL (INDIA) PRIVATE LIMITED vs. ADITYA BIRLA NUVO LIMITED, (2012) 6 SCC 792) & AMBALAL SARABHAI ENTERPRISE LTD. vs. KS INFRASPACE LLP LTD., 2020 AIR (SC) 307. The impugned order passed is a 16 discretionary order. As a principle, the appellant Court will not interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except, where the discretion has been shown to have been exercised arbitrarily, capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. In appeal, the appellate Court will not re-assess the material and seek to reach a conclusion different from the one reached by the Court below, if the one reached by that Court was reasonably possible on the material. (see WANDER LTD. vs. ANTOX INDIA PVT. LIMITED, 1990 (Supp) SCC 727).
13. Section 16 (c) read with explanation (i) to Section 16 of the Specific Relief Act, reads as under:-
"16.Personal bars to relief-- Specific performance of a contract cannot be enforced in favour of a person....
(c) 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 17 him, other than terms and performance of which has been prevented or waived by the defendant.
Explanation-For the purposes of clause (c),--
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the court...."
14. A reading of the above provision goes to show that it is necessary for the plaintiff to aver and prove that he is and always been ready and willing to perform his part of the contract and in the light of the explanation to the proviso, there is no requirement for the plaintiff to deposit the balance sale consideration at the time of instituting the suit or thereafter unless directed by the Court. It is understood that in a suit for specific performance, it is not necessary that before grant of injunction, the plaintiff has to deposit the balance sale consideration. Direction to deposit the amounts as a condition for grant of injunction depends on facts and circumstances of each case and deposit of amounts is not a condition precedent for grant of injunction, which otherwise amounts to forcing the 18 plaintiff to be ready to perform his part of the contract, which the defendant is expected to prove during the trial proceedings. It is altogether a different situation, where the plaintiff himself to show his bona-fides, intends to deposit the balance sale consideration. In MAHESH SINGHAL 's case, the Delhi High Court in similar fact situation at para 15 observed as under:-
"15. A perusal of the said statutory provision would show that in view of Section 16 (c) of the said Act, it is necessary to aver and prove by the plaintiff that he has performed and has always been ready and willing to perform the essential terms of the contract. The explanation (i) further clarifies that it is not essential for the plaintiff to actually deposit in Court any money. It would follow from a reading of the said statutory provisions that there is no statutory requirement under the Specific Relief Act to claim Specific Performance for the plaintiff to deposit the balance sale consideration when filing a suit pertaining to specific performance of an agreement pertaining to an immovable property." The contention of the counsel for the 1st defendant that inasmuch as the plaintiff has sought for alternative relief of refund of amount with interest cannot be a ground either to refuse injunction pending suit or to grant the main relief of specific performance of the contract itself. It is not in dispute 19 that in all suits for specific performance, the plaintiff is entitled to seek alternative relief in the event the decree for specific performance of contract cannot be granted for any reason, hence there is no infirmity in the alternative plea of refund. (see BALASAHEB DAYANDEO NAIK (DEAD) THRU LRS vs. APPASAHEB DATTATRAYA PAWAR, (2008) 4 SCC 464).
15. In the facts and circumstances of the case, the plaintiff in this case has averred that he is ready and willing to perform his part of the contract. It has also come on record that the 1st defendant and the plaintiff executed 2nd agreement of sale dated 26-12-2013 in favour of the 2nd defendant, in respect of part of the suit property. Since it is the case of the plaintiff that he is willing to deposit the part sale consideration of Rs.3 crores, subject to the 1st defendant changing the nature of land use and he has also expressed his readiness and willingness to perform the covenants of the contract, in the facts and circumstances of the case, the plaintiff ought not to have been burdened with the 20 condition that he should part with the remaining balance sale consideration, at this stage. Inasmuch both the plaintiff and 2nd defendants have paid certain amounts, pursuant to the agreement of sales executed by the 1st defendant, and they have part performed the agreements, the required decree of prima facie, case is made out and balance of convenience is also in favour of the plaintiffs in both the suits between the parties, if no injunction is granted, it leads to multiplicity of proceedings besides causing irreparable loss in case third party rights are created. It is also to be seen that the Court below has not given any cogent reasons for imposing the condition to deposit the 50% of the balance sale consideration by the plaintiff in OS No.255 of 2018 for granting the relief of injunction.
16. Hence, the impugned order in IA No.952 of 2018 in OS No.255 of 2018 in so far it relates to imposing condition to deposit the balance sale consideration by the plaintiff is hereby set aside by maintaining the injunction order. In the 21 circumstances, CMA No.422 of 2019 is allowed and CMA No.986 of 2019 filed by the 1st defendant against the same order is dismissed. So far as CMA No.508 of 2018, which arise out of the order passed in IA No.580 of 2016 in OS No.683 of 2016, since the suit property is part of the suit property in OS No.255 of 2018 and there also the disputes relates to total sale consideration which is also rounded off in the agreement of sale as such for the same reasons stated hereinabove, CMA No.508 of 2018 which is filed by the 1st defendant is also liable to be dismissed and it is accordingly dismissed. All miscellaneous applications, if any pending also stand dismissed. Having regard to the facts and circumstances of the case and the suits are of the year 2016 and 2018, the Court below dispose of the suits expeditiously, in any case, not later than eight months from the date of receipt of a copy of this order. It is also needless to mention that any observation or opinion expressed herein above are only for the purpose of these appeal and may not be 22 construed to as expression of opinion on the merits of the matter. Miscellaneous petitions if any pending in these appeals shall disposed of. There shall no order as to costs.
____________________________ A.RAJASHEKER REDDY, J ________________ M.LAXMAN, J Dated: 25 -03-2022 NRG 23 HON'BLE SRI JUSTICE A.RAJASHEKER REDDY & HON'BLE SRI JUSTICE M. LAXMAN Pre-delivered judgment in CMA Nos.422, 986 of 2019 & 508 of 2018 submitted for Lordship's kind perusal.
Nrg/ps Dated: -03-2022 NRG 24 25