Madras High Court
U.Monisha vs M/S.South India Scheduled Tribes on 3 February, 2022
Bench: T.Raja, D.Bharatha Chakravarthy
A.S.No.784 & 785 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment Reserved on : 19.11.2021
Judgment Pronounced on : 03.02.2022
CORAM :
THE HON'BLE MR. JUSTICE T.RAJA
AND
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
A.S.No.784 & 785 of 2019
1.U.Monisha
2.C.U.Prashanth ... Appellants
(in both Appeal suits)
Versus
M/s.South India Scheduled Tribes
Welfare Association, (Reg.No.205 / 1972),
No.579, (379) Anna Salai, Saidapet,
Chennai – 600 015.
rep.by its Secretary : Mrs.Chitra Kannan ... Respondent
(in both Appeal suits)
[ Mrs.Chitra Kannan, substituted in the place of the deceased
Mr.K.Raghupathy, vide Court order dated 05.10.2021 made in
CMP.No.16551 & 16554 of 2021 in A.S.Nos.785 &784 of 2019]
Common Prayer : First Appeals against the impugned Judgment (Common
Judgment) and decree dated 03.06.2019 made in O.S.No.122 of 2017, on
the file of the IV-Additional District Judge, Ponneri.
For Appellants : Mr.A.R.L.Sundaresan, Senior Advocate
for Mr. M.S. Mani
For Respondent : Mr.P.Subba Reddy
https://www.mhc.tn.gov.in/judis
1/32
A.S.No.784 & 785 of 2019
COMMON JUDGMENT
Mr.Justice.D.Bharatha Chakravarthy:
A. The Appeals:
By a Judgment dated 03.06.2019 the Learned IV-Additional District Judge, Ponneri, dismissed the suit in O.S.No.122 of 2017 filed by the appellants herein, praying for specific performance of the suit agreement dated 20.06.2011 directing the respondent/defendant to execute and register the sale deed in respect of B schedule properties and decreed the counter claim filed by the defendant, directing the plaintiff to pay a sum of Rs.31,80,000/- (Rupees Thirty One Lakhs Eighty Thousand only) along with interest at the rate of 6% per annum, from the decree and till the date of realisation.
2.Aggrieved by the same, the appellants/plaintiffs have filed A.S.No.784 of 2019 as against the dismissal of their suit in O.S.No.122 of 2017 and A.S.No.785 of 2019 as against the decree passed in the counter claim in O.S.No.122 of 2017.
https://www.mhc.tn.gov.in/judis 2/32 A.S.No.784 & 785 of 2019
3.For the sake of convenience the parties U.Monisha and C.U.Prashanth, who are the appellants in this case and M/s.South India Scheduled Tribes Welfare Association, which is the respondent, in this case, are referred to as plaintiffs and defendant as per the array in the Original Suit itself.
B.The case of the plaintiffs:
4.The first plaintiff being the daughter and the second plaintiff being son, are the legal heirs of one C.S.Udhayashankar, who died on 24.08.2016. The defendant is a Society registered under the Tamil Nadu Societies Registration Act, bearing registration No.205/1972. The Schedule- A property totally admeasuring Acre.15.00 cents, belonged to the defendant association, they, having purchased the same by three sale deeds dated 05.11.1986 registered as document Nos.3236/1986, 3242/1986, 603/1987 on the file of the Sub-Registrar, Ponneri. The plaintiffs' father was a regular donor to the Educational Institution run by the defendant and he actively participated in the development of the said Institution. While so, on 11.12.2009 an agreement of sale (Ex.A4) was entered into between the plaintiffs' father and the defendant, however, the transaction was not completed. While so, on 19.06.2011, the defendant/association convened an https://www.mhc.tn.gov.in/judis 3/32 A.S.No.784 & 785 of 2019 extraordinary General Body Meeting and passed a resolution to sell the said 10 Acres of land, which was subject matter of the earlier agreement dated 11.12.2009 along with 5 more Acres, totally amounting to 15 Acres on the agreed sale consideration at the rate of Rs.8,50,000/- (Rupees Eight Lakhs Fifty Thousand only) per acre, totally amounting to Rs.1,27,50,000/- (Rupees One Crore, Twenty Seven Lakhs, Fifty Thousand only) to the plaintiffs' father. Pursuant to the resolution a fresh agreement of sale dated 20.06.2011 (Ex.A6) was executed by the defendant in favour of the plaintiffs' father. Pursuant to the agreement three Power of Attorney documents dated 30.06.2011, registered as document Nos.920/2011, 921/2011, 922/2011 on the file of the Sub-Registrar, Redhills were also executed by the defendant constituting plaintiffs' father Mr.C.S.Udhayashankar, as power of attorney with due powers to identify and sell the suit schedule property to an extent of 15 Acres and to execute a sale deed and present such sale deeds for registration. Even though Ex.A-6 agreement mentioned that the transactions should be completed within 90 days, the same could not be completed, however, between the period from 2012 upto 15.05.2016 i.e., the total sale consideration of Rs.1,27,50,000/- (Rupees One Crore Twenty Seven Lakh Fifty Thousand only) was periodically paid by the plaintiffs' father and accepted by the defendant. https://www.mhc.tn.gov.in/judis 4/32 A.S.No.784 & 785 of 2019
5.To be more specific, while executing Ex.A6, agreement of sale, a sum of Rs.3,00,000/- (Rupees Three Lakhs only) was paid and a sum of Rs.21,15,000/- (Rupees Twenty One Lakhs Fifteen Thousand only) was periodically received from the plaintiffs' father, for which, Ex.A9 acknowledgement and Statement of Accounts was issued by the defendant and a further sum of Rs.1,17,05,000/- was paid from the plaintiffs' father bank account and the account statements, three in series, have been marked as Ex.A10 in all totalling to Rs.1,28,20,000/- i.e., excess payment of Rs.1,20,000/- was made and all the said sums have been accepted without any demur by the defendant.
6.On the strength of the powers of attornies, the plaintiffs' father also sold Ac.4.00 cents out of Ac.15.00 cents in schedule A property to a third party, namely, M/s.Dingo Commodeal Private Limited, by four sale deeds dated 30.10.2014 registered as document Nos.7736 of 2016, 7737 of 2016, 7738 of 2016 and 7739 of 2016 on the file of the Sub-Registrar, Red Hills. While being so, the plaintiffs' father suddenly died on 24.08.2016 due to heart attack. The plaintiffs being the legal heirs of the agreement holder requested the defendant to execute Powers of Attorneys in their favour for the remaining Ac.11.00 cents of land or to execute sale deeds. But, https://www.mhc.tn.gov.in/judis 5/32 A.S.No.784 & 785 of 2019 however, the defendant did not come forward to do so. Therefore, the plaintiffs filed the above suit in O.S.No.122 of 2017 for specific performance of the agreement.
C. The case of the defendant :
7.The defendant filed a written statement and resisted the suit. The contention of the defendant is that as per the agreement dated 20.06.2011, the plaintiffs' father ought to have paid the entire sale consideration within three months i.e., before 20.09.2011. The plaintiffs' father did not make the payments within the stipulated time. Even though the defendant has received the money, one important condition in the sale agreement dated 20.06.2011 is that the defendant should accompany the plaintiffs' father and the defendant alone can execute the sale deed in favour of the subsequent purchasers which condition was violated by the plaintiffs' father, which amounted to cheating, fraud and breach of trust. Therefore, the four sale deeds executed by him are not valid in law. Relying upon Sections 213 to 238 of the Contract Act, the defendant contended that as mentioned in the power of attorney documents, the plaintiffs' father, when he sold the part of the Suit Schedule properties to a third party, ought to have obtained the sale consideration, only in the name of the defendant and therefore, the https://www.mhc.tn.gov.in/judis 6/32 A.S.No.784 & 785 of 2019 sale is invalid. The purchasers are not bonafide purchasers. By the sale of these four acres alone, the plaintiffs' father has received a total sale consideration of Rs.1,60,00,000/- (Rupees One Crore Sixty Lakhs only) and he has paid Rs.1,27,50,000/- only as sale consideration for the entire extent of 15 acres of land. The plaintiffs' father was only a power agent and therefore the excess amount than the amount paid by him to the defendant has to be recovered from the plaintiffs. The violation of two conditions, that is, one in the sale agreement and another in the power of attorney amounted to fraud and cheating and therefore, the suit is liable to be dismissed. However, taking into account, the sale agreement has been made for the four acres, the defendant prayed that the difference in amount of sale consideration of Rs.32,50,000/-, with further interest 12% p.a., in all totalling to Rs. 44,52,500/- by way of counter claim with further interest at the rate of 12% p.a., on the principal amount of Rs.32,50,000/-.
8.The plaintiffs also filed a written statement to the counter claim of the defendant, by contending that the same is totally untenable as the plaintiffs' father had sold the properties as an agreement holder and he is not a mere power agent.
https://www.mhc.tn.gov.in/judis 7/32 A.S.No.784 & 785 of 2019 D. The Trial and Evidence:
9.Upon the said pleadings, the Trial Court framed the following the six issues :
"1) Whether the plaintiff is entitled to the relief of specific performance of the contract?
2) Whether the sale agreements dated 20.06.2011 and 11.02.2009 are true, valid and executed by the defendants?
3) Whether the entire sale consideration was paid to the defendants in pursuance of the agreement, alleged by the plaintiff is true?
4) Whether the plaintiffs have performed their part of the contract?
5) Whether the defendants are entitled to the relief as claimed in the counter-claim?
6) To what relief if any the plaintiffs are entitled to?"
10.On the side of the plaintiff, the second plaintiff was examined as PW.1. The title deeds of the defendant viz., the three sale deeds under which, the defendant purchased the Schedule-A property were marked as Exs.A1 to A3. The first agreement between the plaintiffs' father and the defendant dated 11.12.2009 is marked as Ex.A4. The extract from the https://www.mhc.tn.gov.in/judis 8/32 A.S.No.784 & 785 of 2019 minute book containing the resolution passed in the General Body Meeting of the defendant dated 19.06.2011 is marked as Ex.A5. The suit agreement for the sale of 15 Acres entered into between the plaintiffs' father and the defendant dated 20.06.2011 is marked as Ex.A6. The three power of attorney documents executed in favour of the plaintiffs' father were marked as Ex's.A7, A8, A17. The acknowledgment of receipt of part sale consideration along with the Statement of accounts furnished by the defendant dated 15.03.2013 is marked as Ex.A9. The Bank passbook of the plaintiffs' father containing entries as to transfer of the sale consideration to the defendant is marked as Ex.A10. The legal heir certificate is marked as Ex.A11. The death certificate of the plaintiffs' father dated 06.09.2016 is marked as Ex.A12. The death certificate of the plaintiffs' mother is marked as Ex.A13. The encumbrance certificate of items No.1, 2 & 3 of the schedule B properties dated 04.05.2017 were marked as Ex's.A14 to A17 respectively. The four sale deeds were executed by the plaintiffs' father to M/s.Dingo Commodeal Private Ltd., dated 30.10.2014 was marked as Ex's.A18 to A21. The guideline value downloaded through the internet in respect of the Schedule mentioned properties, is marked as Ex.A22. https://www.mhc.tn.gov.in/judis 9/32 A.S.No.784 & 785 of 2019
11.On the side of the defendant, one Mr.Raghupathy, the Secretary of the defendant's Society was examined as DW.1 and representative of the subsequent purchaser company viz., M/s.Dingo Commodeal Private Ltd., one Mr. Madhanlal P. Jain was examined as DW.2. The guideline value of the suit schedule properties downloaded from the website is marked as Ex.B1. The Authorization letter issued by the said purchaser/company to DW.2 Madhanlal P.Jain is marked as Ex.B2. The copy of the receipt for a sum of Rs.10 Lakh, by the, said third party dated 06.09.2014 is marked as Ex.B3. The true copy of the Statements of accounts of one Mr.Ramesh Kumar P.Jain is marked as Ex.B4. The Memorandum of Understanding (Mou) is executed between the plaintiffs' father and M/s.Dingo Commodeal Private Ltd., dated 06.11.2014 is marked as Ex.B5. And another Statement of accounts of the account of Mr.Ramesh Kumar P.Jain is marked as Ex.B6. The Demand notices issued by the Revenue Divisional Officer (RDO) dated 16.09.2006 in respect of the four numbers of the sale deeds for deficit stamp duty is marked as Ex.B7 series. And the Challan evidencing the payment of difference in duty, dated 21.10.2016 paid by the said purchaser is marked as Ex.B8.
https://www.mhc.tn.gov.in/judis 10/32 A.S.No.784 & 785 of 2019 The contention of the plaintiffs:
12.The plaintiffs contention is that even though the period of 90 days was mentioned, by the subsequent conduct of the parties, that is, the plaintiffs' father paying the balance sale consideration over the period continuously, the defendant accepting the same and as a matter of fact issuing the acknowledgment under Ex.A9 would clearly prove that by subsequent conduct, the original clause in the agreement as if 90 days time is the essence in the contract stood negated and novated and the plaintiffs have already performed their part of a contract and paid the entire sale consideration and there was absolutely no problem whatsoever as the plaintiffs' father had started selling the property in part.
13.It is the further contention of the plaintiffs that being the agreement holder for executing the sale deed for himself or his nominees and in consideration of the sale agreement, the power of attorney documents have been executed. The plaintiffs' father, had he been alive, would have sold the remaining extent in parts as per his will and wish and there was no further obligation whatsoever on his part, towards the defendant.
https://www.mhc.tn.gov.in/judis 11/32 A.S.No.784 & 785 of 2019
14.Further contention of the plaintiffs is that even though in the original sale agreement, it is stated that the defendant would accompany the plaintiffs' father and the defendant would execute the sale agreement, subsequently, that was also given a go-bye and three power of attorney documents were executed empowering the plaintiffs' father to execute the sale deeds and present the same for registration. As far as clause (6) in the power of attorney documents, it would only mean that, whatever the amount disbursed, the same should be by way of a cheque or demand draft in the name of the defendant association and the plaintiffs' father disbursed the entire amount only in the name of the defendant association and as a matter of fact monies were transferred directly to its account. Therefore, there is no violation or fraud, or cheating. On the mere ground of subsequent appreciation of land value, no right would accrue to the defendant to wriggle out of the contract. As a matter of fact, the initial amounts were paid by selling the plaintiffs' mother's Sridhana jewellery. Therefore, the subsequent rise in prices alone cannot be a factor to deny the specific performance of the agreement.
The contention of the defendant :
15.The contention of the defendant is that time is essence of the https://www.mhc.tn.gov.in/judis 12/32 A.S.No.784 & 785 of 2019 contract and upon the expiry of 90 days, the agreement stood lapsed and even though, thereafter, the plaintiffs' father have been making the payment of sale consideration and the defendant accepting the same, it must be seen that there are two important violations committed by the plaintiffs' father. First is the agreement of sale clearly stipulates that the defendant should accompany the plaintiffs' father to the Registrar Office and while making the four sales, the defendant did not accompany and the plaintiffs' father did not put them on any notice. Secondly, while receiving the money from the said purchaser's company, as per clause (6) of the power of attorney, being the agent, the plaintiffs' father is liable to receive the sale consideration only in the name of the defendant association. These two violations by the plaintiffs' father amounted to fraud and cheating. Therefore, the prayer of specific performance cannot be granted.
16.On top of the same, when the plaintiffs' father has received excess amount from the third party purchaser than the amount paid by him to the defendant, the same has to be recovered from the plaintiffs herein with interest at the rate of 12% p.a., and hence, they prayed for dismissing the suit and decreeing the counter-claim.
https://www.mhc.tn.gov.in/judis 13/32 A.S.No.784 & 785 of 2019 The findings of the Trial Court:
17.After considering the contention of both sides, the Trial Court in Paragraph No.24 found that after execution of Ex.A6/agreement, the power of attorney documents were executed and as per the power deeds, the agent has to do his duty only within the four corners of the powers granted to him and any violation or deviation would render the action illegal. It further found that as a power agent, when the plaintiffs' as collected Rs.1,60,00,000/- but has remitted only Rs.1,28,20,000/-, the balance of Rs.31,18,000/- is liable to be returned to the defendant. In paragraph No.26, it found that after execution of Ex.A6 agreement, three powers have been executed and power deeds become unenforceable upon the death of the power agent and it holds that the legal heirs of the power agent have no locus standi or any right to claim succession in respect of the agreement under Ex.A6. On the strength of the findings, the Trial Court further holds that the remaining 11 acres of the suit schedule property are vested with the defendants free from any claim of the plaintiffs. It further found in paragraph No.27 that because of the subsequent execution of the power documents, Ex.A6 agreement is not intended to benefit the agent i.e., plaintiffs' father and therefore, the action of the plaintiffs' father is in violation of the tenor of the power deeds and thus, it dismissed the suit and https://www.mhc.tn.gov.in/judis 14/32 A.S.No.784 & 785 of 2019 decreed the counter-claim.
The Submissions :
18.Heard Mr.A.R.L.Sundaresan, Learned Senior Counsel appearing for the Plaintiffs/Appellants for Mr. M.S. Mani, learned counsel for the Appellants and Mr.P. Subba Reddy, Learned Counsel for the defendant/respondent.
19.Mr.A.R.L.Sundaresan, Learned Senior Counsel submits that the reasoning of the Trial Court is absolutely not sustainable in law and the transaction is one relating to the immovable property. The general rule is that time is not the essence of the contract unless the contrary is proved. In this case, even though the parties have stipulated 90 days time, by the subsequent conduct of the parties, the same was given up and the entire sale consideration was periodically accepted by the defendant without any demur. As a matter of fact until the death of the father of the plaintiffs they did not even cancel the powers of attornies. Only because of the unfortunate incident of the plaintiffs' father’s sudden death due to heart attack, the defendant is now trying to wriggle out of the contract. It is his further submission that the contention of the respondent as if upon execution of the https://www.mhc.tn.gov.in/judis 15/32 A.S.No.784 & 785 of 2019 power document, the rights under Ex.A6 agreement would fade away is absolutely ill-logical and the three power documents are aid of Ex.A6 agreement. He would submit that though it is mentioned in Ex.A6 agreement that the defendant would accompany and execute the sale deeds, subsequently, it may be seen from the Clauses 1 & 2 of the power documents that the plaintiffs' father himself was empowered to execute the sale deeds and present the deeds for registration. According to the Learned Senior Counsel, a proper reading of clause 6 of the power document would show that the words, "nkYk; midj;J gzg;gl;Lthlhf;fis r';fk; bgahpnyna fhnrhiy my;yJ tiut[ nfl;nghiy K:yk; bra;J bfhs;sntz;Lk;/ " would only mean that the disbursal to be made by the power agent should be in the name of the association by Cheque or Demand draft alone and therefore, the submissions made on behalf of the defendant as if plaintiff’s father committed fraud by executing the sale deeds himself and in accepting the sale consideration to himself, is absolutely without any merit.
20.The Learned Senior Counsel would further submit that merely because there is price rise, and the plaintiffs would be profited cannot by itself be a reason for the defendant to breach the contract and therefore, the https://www.mhc.tn.gov.in/judis 16/32 A.S.No.784 & 785 of 2019 Court ought to have directed the defendant to execute sale deed in favour of the plaintiffs. He would submit that since the three power documents were executed pursuant to Ex.A6 sale agreement by virtue of Sections 202 to 204 of the Contract Act, the power being given in consideration of the sale agreement and the plaintiffs' father having partly exercised the authority, the defendants in the first place did not even have the right to revoke the same and therefore, just because, the plaintiffs' father died, the defendant association cannot be permitted to repudiate the contract.
21.The Learned Senior Counsel for the appellants would rely on the Judgment of the Hon'ble Supreme Court of India in Rambaran Prosad Vs. Ram Mohit Hazra & Ors.,1. By placing reliance on Paragraph Nos. 4 & 5 he would submit that by virtue of Section 23(b) of the Specific Relief Act, the representatives in interest can pray for specific performance of the contract. Referring to Sections 37 to 40 of the Indian Contract Act, the Learned Senior Counsel submits that promises made are liable to be enforced by the legal representatives/transferees of the promisee.
22.The Learned Senior Counsel, relied upon the Judgment 1 AIR 1967 SC 744 https://www.mhc.tn.gov.in/judis 17/32 A.S.No.784 & 785 of 2019 reported in T.M.Duraisamy and others Vs. Kanniappa Reddi2, again for the proposition that legal representatives of the person in whose favour the agreement was executed, will be entitled for the specific performance of the contract. He also placed before us a Judgment of the Learned Single Judge of the Allahabad High Court, in Sheomurat Ram Vs. Savitiri and others3 wherein, placing reliance on Section 15(a)(b) of the Specific Relief Act, 1963, it was held that the legal representatives of the deceased can undoubtedly sue for the specific performance of the agreement, and the Judgment of Culcutta High Court in Ramanand Agarwalla Vs. Richardson Hooghly Holding Ltd & anr4 was also relied upon for the same proposition.
23.Per contra, Mr.P.Subba Reddy, Learned Counsel appearing for the Respondent/defendant placed reliance on the following passage in Ex.A6/agreement, which is extracted hereunder:-
",dp Kjy; jh';fs; vd;Dila
mf;upbkz;l; ncwhy;lh; vd;w Kiwapy; ,jd;
fPH;fz;Ls;s brhj;ij guhkhpj;Jtut[k;. rh;nt
bra;at[k;. nuhL tpl;L fhzpfw;fs; el;L tPLfl;Lk;
2 AIR 1972 Mad 640 3 AIR 1977 Allahabad 322 4 AIR 1979 Culcutta 335 https://www.mhc.tn.gov.in/judis 18/32 A.S.No.784 & 785 of 2019 kidfshf gphpf;ft[k;. gphpj;j kidfis bkhj;jkhfnth. gFjp. gFjpahfnth jh';fs;
tpUk;g[k; tpiyf;F fpiuak; ngrp fpiuak;
epr;rapf;ft[k;. mjw;fhd ml;thd;!; bjhifia
bgw;Wf;bfhz;L mf;hpbkzl;-urPJ vGjp
bfhLf;ft[k;. kPjp fpiuaj;bjhifia
bgw;Wf;bfhz;L vd;id miHj;J gj;jpu
gjpt[bra;J bfhLf;ft[k; ehd; mjpfhuk;
mspf;fpnwd;/ "
He would submit that it is a very important clause in the agreement that the defendant/association's representative to be present while executing the sale deeds to third parties. The said obligation has been violated by the plaintiffs' father. Similarly relying on clause (6) in three power of attorney documents which is extracted above, the Learned Counsel would submit that clause (6) would mean that the amounts received by the plaintiffs' father from the prospective purchasers should be only in the name of the defendant association. Therefore, the plaintiffs' father had violated this clause also. He would submit that since there is a blatant violation of clause in the agreement Ex.A6 as well as the three powers of attorney documents in Ex's.A7, A8 & A17, the plaintiffs are not entitled to any relief whatsoever. The plaintiffs' father was a mere power of attorney https://www.mhc.tn.gov.in/judis 19/32 A.S.No.784 & 785 of 2019 agent. As the time mentioned in the sale agreement got lapsed, even though it may be a fact that the defendant has been receiving the sale consideration even after the period of 90 days, he would submit that the Trial Court has rightly dismissed the suit filed by the plaintiffs and decreed the counter- claim filed by the defendant.
The Questions:
24.On the strength of the pleadings of the parties, the evidence on records and findings of the Trial Court and the submissions made by the counsel on either side, the following questions do arise for determination in this appeal:-
1.Whether or not time is essence of contract between the parties and whether the plaintiffs' father and thereafter, the plaintiffs are entitled to claim rights under Ex.A6 agreement?
2.Whether the execution of the three powers of attorney documents under Ex's.A7, A8 & A17 would have on over riding effect of Ex.A6 sale agreement ?
3.Whether the action of the plaintiffs' father in executing Ex's.A18 to 21 sale deeds and obtaining the sale consideration in his own name amounts to fraud?
4.To what reliefs the parties are entitled to?
https://www.mhc.tn.gov.in/judis 20/32 A.S.No.784 & 785 of 2019 Questions 1-3:
25.As submitted by the Learned Senior Counsel, generally in contracts relating to sale of immovable property there is no presumption that time is the essence of the contract and the contrary is to be proved (Para 21 of the Constitution Bench judgment of the Hon'ble Supreme Court of India in Chand Rani -Vs- Kamal Rani5. To prove the contrary, the clause prescribing 90 days in Ex.A6 agreement is relied upon by the defendants.
The Hon'ble Supreme Court of India in the recent Judgment of Welspun Speciality Solutions Ltd vs Oil and Natural Gas Corporation Ltd.,6 held as follows :
“35. It is now settled that ‘whether time is of the essence in a contract’, has to be culled out from the reading of the entire contract as well as the surrounding circumstances. Merely having an explicit clause may not be sufficient to make time the essence of the contract.” In this case, clearly and categorically the parties have continued Ex.A6 agreement beyond the 90 days time and the defendant had issued Ex.A9 acknowledgement/ Statements of accounts, for receipt for sale consideration on various dates. Subsequently also, the plaintiffs' father kept on transferring the entire sale consideration in parts and the same has been
5 2021 SCC online SC 1053 6 1993 1 SCC 519 https://www.mhc.tn.gov.in/judis 21/32 A.S.No.784 & 785 of 2019 accepted by the defendant without any demur whatsoever. Therefore, it is not now open to them to contend that, the time is essence of contract.
26. We find that (i) Ex.A6 agreement is valid and the time stood enlarged; (ii) its execution is admitted; (iii)the resolution of the defendant association preceding the agreement is very clear that the defendant's association wanted to sell the property for a sale consideration of Rs.8,50,000/- per acre ; (iv) the plaintiffs' father himself having performed his part of the contract by paying the entire sale consideration of Rs.1,27,50,000/-; (v) Simultaneously he started selling the schedule property by executing four sale deeds in favour of a third party by virtue of the right accrued to himself under Ex-A6 sale agreement; (vi) Till the life time of the plaintiffs' father, the defendant did not raise any objection whatsoever, nor it cancelled the power or repudiated the contract and all was well between the parties, until the sudden death of the plaintiffs' father;
(vii) Only because, the legal representatives thereafter, approached the defendant, they are refusing to execute further documents and complete the transaction. Therefore, as the legal representatives, the plaintiffs are vested with the rights under the contract in Ex.A6, and they are entitled to approach the Court for specific performance of the agreement, as held by https://www.mhc.tn.gov.in/judis 22/32 A.S.No.784 & 785 of 2019 the Hon'ble Supreme Court of India in the Judgment of Rambaran Prosad referred above.
27.Coming to the contentions of the defendant, on a reading of Ex.A6 agreement it would be clear that the agreement was for sale of 15 acres of land mentioned in the schedule and in the capacity as 'the agreement holder, the plaintiffs' father was given permission to maintain the lands, survey the lands, to form a layout and roads required for the layout and to sell as plots out of the layout and to receive the entire sale consideration and can call the defendant to execute the sale deed. This is understandable, because, on the date of execution of Ex.A6 sale agreement (20.06.2011), no power of attorney was executed in favour of the plaintiffs' father. However, subsequently, on 30.06.2011, the three power of attorney documents were executed and Clause 1 and 2 of the power documents are extracted hereunder:-
"1. fpnH brhj;J tptuj;jpy; bjspthf tpthpf;fg;gl;Ls;s fhypepyj;jpid ,d;W Kjy;
r';fk; rhh;ghf jh';fs; guhkupj;J. ghpghydk;
bra;;a KG mjpfhuk; mspf;fpd;nwd;/
2/ fPnH brhj;J tptuj;jpy; bjspthf
tpthpf;fg;gl;Ls;s fhyp epyj;jpid fpiuak;
bra;tjhf ,Ue;ejhy; jh';fns r';fk; rhh;ghf
https://www.mhc.tn.gov.in/judis
23/32
A.S.No.784 & 785 of 2019
fpiuajhuiu epakpj;J fpiuaj; bjhif. fpiua
ml;thd;!; ,itfis jh';fns eph;zak; bra;J
fpiua xg;ge;jk; bra;at[k;. fpiua ml;thd;!;
bgwt[k;. fpiua xg;ge;jk; Koe;jt[ld; fpiua
gj;jpuk; jahu; bra;J kpFjp fpiua bjhifiag;
bgw;W bfhz;L vdf;F gjpyhd r';fk; rhh;ghf
jh';fns jdpj;jdpahfnth my;yJ bkhj;jkhfnth
ifbaGj;jJ bra;J rk;ge;jg;gl;l Jiz gjpthsh;
mYtyfj;jpy; gjpt[ bra;J bfhLf;ft[k;. jpUk;g
bgw;Wf; bfhLf;ft[k; j';fSf;F ,jd; K:yk; KG
mjpfhuk; mspf;fpd;nwd;/"
Therefore, now, the power to execute the sale deed and to present the same, for registration before the Sub-Registrar was also specifically given to the plaintiffs' father. Therefore, the first argument that the plaintiffs' father violated the condition in Ex.A6 sale agreement is without any merits and is rejected.
28.The second submission is that as per clause (6) of the power document, the plaintiffs' father ought not to have obtained the sale consideration to himself and should have to get Cheques or Demand draft from the third parties/prospective purchasers only in the name of the defendant association is per se ill-logical and self-contradictory. On the one https://www.mhc.tn.gov.in/judis 24/32 A.S.No.784 & 785 of 2019 hand, the defendant receives the sale consideration fixed under Ex.A6 sale agreement from the plaintiffs' father i.e., the sum of Rs.1,27,50,000/-; while on the other hand, it also contends that if the plaintiffs' father sells portions of lands to third parties those amounts should also be paid, in the name of the defendant as Cheque or Demand draft. On the face of it, this submission is absurd. The defendant cannot approbate and reprobate. The Hon'ble Supreme Court of India in recent Judgment reported in Union of India & Others Vs.N. Murugesan7 ( C.A. Nos. 2491-2492 dated 07/10/2021) held as follows :
“26.These phrases are borrowed from the Scott’s law. They would only mean that no party can be allowed to accept and reject the same thing, and thus one cannot blow hot and cold. The principle behind the doctrine of election is inbuilt in the concept of approbate and reprobate. Once again, it is a principle of equity coming under the contours of common law. Therefore, he who knows that if he objects to an instrument, he will not get the benefit he wants cannot be allowed to do so while enjoying the fruits. One cannot take advantage of one part while rejecting the rest. A person cannot be allowed to have the benefit of an instrument while questioning the same. Such a party either has to affirm or disaffirm the transaction. This principle has to be applied with more vigour as a common law principle, if such a party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the other part.An element of fair play is inbuilt in this principle. It is also a species of estoppel dealing with the conduct of 7 2021 (12) https://www.mhc.tn.gov.in/judis SCALE 77 25/32 A.S.No.784 & 785 of 2019 a party. We have already dealt with the provisions of the Contract Act concerning the conduct of a party, and his presumption of knowledge while confirming an offer through his acceptance unconditionally ” Thus, it is clear that the defendant cannot be permitted to approbate and reprobate and as such the second submission made on behalf of the defendant is also rejected. Therefore, we hold that the plaintiffs being a legal representatives are entitled to specific performance of the Ex. A6 sale agreement.
29.A careful perusal of the materials on record would show the developments and progress of the transaction, from the first agreement to sell only 10 acres to the second agreement to sell 15 acres and execution of power documents thereafter and selling the land in parts thereafter. After the execution of second agreement, upon realising the ground situation that only by plotting out the land or selling in a smaller extent alone the plaintiffs' father can pay the sale consideration and complete the transaction, the three power of attorney documents are given to him for the purpose. Therefore, in this case, the three power of attorney documents viz., Ex.A7, A8, & A17 are executed in aid of, to carry out and in consideration of sale agreement and they cannot be in any manner construed as negating or https://www.mhc.tn.gov.in/judis 26/32 A.S.No.784 & 785 of 2019 overriding the Ex.A6 agreement. Therefore, the contentions made in this regard and the findings of the Trial Court in this regard are fallacious. We see no commission or omission by the plaintiffs' father, which would disentitle the plaintiffs to seek specific performance. Question No. 4 :
30.Having found that there was no commission or omission by the plaintiffs' father, now the final question is as to what reliefs the parties are entitled to ? Normally this would be automatic and consequential in any other suit. But when it comes to the suit for specific performance, this is a court of equity and therefore, on the principles of justice, equity and good conscience, the Court would still do equities between the parties.
31.Equity jurisdiction is the jurisdiction where the Court balances the equities between both sides and considers what is just and fair. The exercise and grant of the discretionary relief are guided by Sections 10,11,14, 16 etc., of the Specific Relief Act, 1963 and the various decisions of the Hon'ble Supreme of India. Two submissions are made on behalf of the defendant on this score. First, there is a huge price rise and second that the defendant association will be put to hardship. It must be first seen that https://www.mhc.tn.gov.in/judis 27/32 A.S.No.784 & 785 of 2019 in this case, the defendant's plea is one of fraud and violation of the agreement and power documents and there are no specific pleadings in the written statement for the above submissions to stand. Be that as it may, let us consider the merits of the above submissions.
32.First, regarding the issue of price rise, the Hon'ble Supreme Court of India has laid down broad contours within which the Court has to exercise its jurisdiction, in the recentJudgment reported in Ferrodous Estates (P) Ltd -Vs- P. Gopirathnam(Died) & others8 , wherein it has considered all the earliear judgments, and to our mind, the following are the salient principles laid down: (a) The normal rule is to grant specific performance and refusal would be an exception; (b) The increcase in the real estate value of the property even if its manifold or mega increase, should enure solely to the party who complied with and abided by the contract, as against the defaulting party; (c) However, in appropriate cases, additional sums can be ordered to be paid by the plaintiff depending upon the facts and circumstances of the case.
8 2021 SCC Online SC 825 https://www.mhc.tn.gov.in/judis 28/32 A.S.No.784 & 785 of 2019
33.Coming to the plea of hardship, the defendant pleads that it is an association that is taking care of socially and economically backward Tribal children. The plaintiffs plead that they had pledged the family jewels and have also spent huge sums for evicting the encroachers. Under these circumstances, we deem it fit and proper that the interests of justice will be well served by directing the plaintiffs to pay an additional consideration of Rs.80,00,000/-(Rupees Eighty Lakhs Only). The plaintiffs shall deposit the said additional consideration amount within 3 months from the date of receipt of this Judgment.
Findings on the Issues :
34.For the forgoing reasons and conclusions reached by us, we upturn the findings of the trial court regarding issue No. 1 and answer the same in favour of the plaintiffs that the plaintiff will be entitled to Specific Performance on deposit of the additional consideration as indicated above. Regarding issue No. 2, we hold that the Ex-A6 agreement is valid as it is executed by the defendant reversing the findings that it is lapsed and overridden by the power documents. On issue No. 3, we hold that the entire sale consideration is paid by the plaintiffs' father, hence, we reverse the findings of the trial court as if the amounts are paid in the capacity of a https://www.mhc.tn.gov.in/judis 29/32 A.S.No.784 & 785 of 2019 power agent. As regards the issue No. 4, we hold that the plaintiffs have performed their part of the contract and reversing the findings of the trial court to the contrary. We also reverse the findings of the trial court on issue No.5 and hold that the defendants will not be entitled to the counter claim and dismiss the counter-claim. On issue No. 6, we reverse the findings of the Trial court and hold that the plaintiffs will be entitled to specific performance on payment of additional sum as mentioned above and the defendant is not entitled to the counter-claim.
Reliefs :
35. In the result, (1) A.S. No.784 of 2019 is allowed on additional conditions. The Suit filed by the plaintiffs in O.S. No. 122 of 2017 on the file of the IV Additional District Judge, Ponneri is decreed by (a) directing the plaintiffs to pay to the defendant or on refusal of the defendant, to deposit into the trial court, an additional sum of Rs. 80,00,000/- (Rupees Eighty Lakhs only) within three months from the date of receipt of a copy of this Judgment; (b) directing the defendant to execute sale deed(s) in favour of the plaintiffs or their nominees in respect of the Schedule B mentioned property within two months from the date of payment of the above said sum by the plaintiffs; https://www.mhc.tn.gov.in/judis 30/32 A.S.No.784 & 785 of 2019 (2) That the plaintiff will be entitled to the relief of permanent injunction restraining the defendant or its office bearers from in any manner interfering with the peaceful possession and enjoyment of the plaintiff on and from the date of payment/deposit of the additional sum as order in clause (1) above;
(3) That A.S.No.785 of 2019 is allowed and the counter-claim filed by the defendant in O.S. No. 122 of 2017 on the file of the IV Additional District Judge, Ponneri, shall stand dismissed;
(4) However, on the facts and circumstances of the case, parties shall bear their own costs.
(5) All the connected Miscellaneous petitions, if any, shall stand closed.
(T.R., J.) (D.B.C., J.)
03.02.2022
Index : yes
Internet :yes
Speaking order
klt
https://www.mhc.tn.gov.in/judis
31/32
A.S.No.784 & 785 of 2019
T.RAJA, J.,
and
D.BHARATHA CHAKRAVARTHY, J.,
klt
Pre-Delivery Judgment in
A.S.No.784 & 785 of 2019
03.02.2022
https://www.mhc.tn.gov.in/judis
32/32