Madras High Court
Chinnaraju Reddiar vs S.Bhaskaran on 21 November, 2012
Author: S.Vimala
Bench: S.Vimala
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 21.11.2012 CORAM: THE HONOURABLE Mrs. JUSTICE. S.VIMALA S.A.No.169 of 2000 1.Chinnaraju Reddiar 2.Janakiraman 3.Parthasarathy 4.Dilli 5.Munuswamy 6.Ethiraj .. Appellants/defendants -vs- 1.S.Bhaskaran 2.M.Arumugam 3.C.Damodaran .. Respondents/plaintiff and defendants 7 & 8 Prayer: The second appeal filed under section 100 CPC against the judgement and decree of the learned Subordinate Judge of Poonamallee, dated 21.6.1999 in A.S.No.12 of 1994, confirming the judgement and decree of the learned Principal District Munsif of Poonamallee dated 22.6.1993 in O.S.No.1172 of 1982. For appellants : Mr.A.Venkatesan For respondents : Mr.Sivashanmugam for R-1 - - - J U D G E M E N T
Defendants 1 to 6 are the appellants. The plaintiff and defendants 7 and 8 are the respondents.
2. The plaintiff filed the suit originally seeking the relief of permanent injunction and later, amended the plaint seeking the relief of specific performance. The suit was decreed, granting the relief of permanent injunction. The defendants were directed to execute the sale deed within a period of two months. The appeal preferred by the defendants was dismissed. As against the dismissal of the first appeal, the defendants have preferred this second appeal.
3. Brief facts:
The suit property as described in the 'A' schedule is agricultural land, located at Ekkattuthangal Village, Saidapet Taluk in Block No.1, in R.S.No.76 and 77, in which plot No.56, (over which there is a dispute), is described as 'B' schedule property.
3.1. The 7th defendant, entered into an agreement to sell, dated 15.11.1975, the 'B' schedule property, in favour of the plaintiff. On behalf of defendants 1 to 6, who are the owners of the property, 7th defendant, who was an agent-cum-developer entered into an agreement to sell the property on 15.11.1975. The agreed sale price was Rs. 9,064/-. Rs.4,000/- was paid as advance. Balance was payable at the rate of Rs.200/- per month. Possession was handed over to the plaintiff on the date of agreement itself. The plaintiff put up a shed and he was doing business in the suit property.
3.2. The 7th defendant refused to receive the balance of sale consideration on and from January 1980. The 7th defendant assured that he will receive the balance of sale consideration at the time of registration of sale deed. Therefore, the plaintiff was waiting to pay the balance of Rs.1,064/-.
3.3. When the defendants 2 to 8 attempted to dispossess the plaintiff, he filed a suit seeking the relief of injunction. Plaintiff issued a notice dated 26.09.1984, calling upon the defendants to execute the sale deed. But they did not do so. Hence, the relief of specific performance was also sought for by filing application for amendment which came to be allowed by the trial court.
4. The claim of the plaintiff was resisted by the defendants on the following grounds:
a. The suit property is the joint family property of the defendants 1 to 6. The defendants 7 and 8 are not the authorised agents of the defendants 1 to 6. The agreement was entered into only between the first defendant and 7th and 8th defendant. On the date of agreement, i.e., the agreement executed by the first defendant in favour of the 7th defendant on 27.3.1975, 6th defendant was a minor. The first defendant did not execute the agreement in the capacity as Kartha. Plot No.56 and other adjacent lands were allotted to the 6th defendant. It was agreed that 60 cents of land should be demarcated for the benefit of the minor. This agreement was dated 15.11.1975.
b. The suit sale agreement will not bind the 6th defendant who was the minor. 6th defendant was not aware of the payment made by the plaintiff.
c. There was no shed available in the suit property. Hence, the defendants 3, 7, 8 and one Venkatramanan directed the plaintiff to vacate the property. The 7th and 8th defendants offered yet another plot instead of plot No.56.
d. The trial court has no territorial jurisdiction.
e. Defendants 1 to 6 are not parties to the agreement dated 15.11.1975.
f. The claim of plaintiff seeking the relief of specific performance is barred by limitation.
g. The plaintiff did not perform his part of the contract in accordance with the agreement dated 15.11.1975. Therefore, the suit agreement is not enforceable.
h. The power of attorney agreement, dated 27.03.1975, was not for the benefit of the family. That agreement was only in respect of 2 acre 60 cents, keeping 41 cents apart. The suit property is part of that 41 cents. The defendant did not receive any payment from the plaintiff. Therefore, there is no cause of action.
5. The trial court decreed the relief of specific performance and also injunction, while giving the following findings:
(i) There is no proof to show that the suit plot was demarcated and allotted for the benefit of 6th defendant.
(ii) The 6th defendant, though born on 17.10.1957, did not take any steps in respect of the suit property, even though he attained majority on 19.10.1975.
(iii) The suit agreement dated 15.11.1975 is true and valid.
(iv) Even though the sale agreement is not signed by first defendant it is valid as it is signed by 7th defendant who is authorised to sign on behalf of the first defendant by virtue of the deed of power of attorney.
(v) The payment of sale consideration in installment has been filed as Exs.A-3 to A15, i.e., from 10.10.1976 to 21.01.1980. Therefore, the suit filed on 07.09.1982 is not barred by limitation.
(vi) The plaintiff has deposited the balance of sale consideration on the very next date of filing of the suit. (Ex.A1)
(vii) The plaintiff never intended to commit breach of sale agreement.
(viii) The suit agreement is binding upon defendants 2 to 6 as it was for the benefit of the family.
5.1. As against the judgement and decree, appeal has been filed by defendants 1 to 6. The appeal was dismissed thereby the judgment and decree of the trial court decreeing the suit was confirmed.
6. The second appeal has been admitted on the following substantial questions of law out of which question No.3 was admitted to be irrelevant by both sides.
"(1) Whether the trial court had jurisdiction to entertain and try the suit for specific performance when the property was situated outside the jurisdiction of the court ?
(2) Whether the suit for specific performance is not barred by limitation ?
(3) Whether the documentary evidence produced in this case did not prove breach of contract by the plaintiff ?
(4) Whether Ex.B-1 is valid and binding upon D1 to D6. When admittedly the property is a joint family property and there was no proof that Ex.B-1 was executed for the necessity or benefit of the joint family ?
(5) Whether D7 was in law the agent of D2 to D6 ?"
7. The main contention of the learned counsel for the appellants are:
(i) The trial court has no territorial jurisdiction to entertain the suit.
(ii) The sale agreement executed by the 7th defendant (on behalf of the first defendant) is not binding upon D1 to D6, when the suit property is the joint family property and when there is no proof to show that Ex.B1 power of attorney was executed for the benefit of the joint family.
(iii) Failure of the plaintiff to perform his part of the contract in accordance with the terms of Ex.A2, would disentitle the plaintiff to seek the relief of specific performance.
(iv) The suit is barred by limitation.
8. It is the case of the 6th defendant that the suit property was originally a joint family property and that later, it was exclusively allotted for his share by his father and therefore, the 7th defendant, who claims to be the power agent of his father, has no right to execute a sale deed in respect of the suit property to the plaintiff. It is his contention that the agreement of agency executed by his father is not binding upon him as the recitals did not specifically say that the power of attorney was executed for and on behalf of the other defendants also.
8.1. No doubt the power of attorney executed by the first defendant did not expressly state that it has been executed for and on behalf of defendants 2 to 6. The first defendant has been the kartha of the family and defendants 2 to 6 were members of the joint family at the time when Ex.B1 was executed. Therefore, the capacity in which the first defendant executed Ex.B1, even though not expressly stated would be conveyed impliedly. As rightly pointed out by the trial court, the defendants 2 to 5 did not raise any objection so far. The 6th defendant also did not raise any objection by taking any proceedings. Only when the suit was filed by the plaintiff, seeking specific performance, this defence has been raised, obviously for the purpose of avoiding the execution of sale deed.
8.2. Yet another contention is that Ex.B1 power of attorney was not executed for the benefit of the joint family. Admittedly defendants 2 to 6 are the sons of the first defendant. At the time of execution of the power of attorney-cum-sale agreement, the 6th defendant was a minor. Normally, the father is presumed to act for the benefit of the members of the family, having regard to the loving nature of relationship between the father and the sons. If it is contended otherwise, it is for the 6th defendant to show, how the agreement was not for the benefit of the family.
8.3. It is relevant to point out that the father of the 6th defendant namely the first defendant has not been examined in this case. It is the father who will be in a position to say whether the transaction was for the benefit of the family or not. The compelling circumstances under which he was pressurized to sell the property, if any, can be spoken to, only by the first defendant. Examination of first defendant would have provided an opportunity to the other side to prove that the power of attorney and the consequent sale agreement in respect of the suit property was executed for and on behalf of all other defendants also and that it was for the benefit of the family (according to their contention). The first defendant has chosen to rescue himself from being exposed to cross examination. The 6th defendant also could have examined the first defendant as a witness and he has also not done so. Nor the 7th defendant who executed the sale agreement has been examined. Therefore, the conduct of the 6th defendant and other defendants would clearly go to show that their intention is to take vexatious defences for the purpose of depriving the plaintiff from obtaining the suit property by way of specific performance. Therefore, it is clear that the power of attorney executed by the first defendant in favour of 7th defendant is on behalf of the other defendants also and the sale agreement is binding upon the 6th defendant.
8.4. There is no documentary evidence to show that the suit property was earmarked for the benefit of the 6th defendant. Therefore the 6th defendant cannot make a claim over the suit property.
9. The next contention of the learned counsel for the appellant is that the plaintiff having failed to (a) aver that he is ready and willing to perform his part of the contract and (b) having failed to perform his part of the contract is not entitled to the relief of specific performance and relied upon this decision reported in 2010 (5) CTC 423 (Bafna Developers, a registered Partnership Firm, Regn. No.458/95, rep. by its Partner, Ashok G.Bafna, Office at Rangal Gowder Street, Coimbatore-641 001 Vs. D.K.Natarajan and 3 others).
9.1. Learned counsel for the respondent pointed out the averment in the amended plaint, wherein it is alleged that the plaintiff is ready and willing to perform his part of the contract. As rightly contended, mere averment is not enough and the conduct must show that the plaintiff was, in fact ready and willing to perform his part of the contract. Admittedly the sale consideration was Rs.9,064/-. Rs.4,000/- has been paid as advance. Balance was payable at the rate of Rs.200/- per month. It is not a mere sale agreement but it is a sale-cum-lease agreement. The plaintiff is permitted to enjoy the property and balance of sale consideration was payable at the rate of Rs.200/- per month and it would be treated as lease amount, till the entire balance of sale consideration is paid. Possession was handed over to the plaintiff. The plaintiff put up a shed and he was doing business in the suit property.
9.2. It is contended by the learned counsel for the appellant that plaintiff was not regular in making the meager payment of Rs.200/- p.m. and as there is delay in payment the plaintiff is not entitled to the relief of specific performance. On the other hand learned counsel for the respondent contended that time was not agreed to be the essence of contract in this case, and even the belated payment has been received without any murmur and therefore the appellants are estopped from contending that the payment is a belated payment. The sequence of payment made and the endorsement of payment made have been marked as Exs.A3 to A15 which go to show that payment has been made starting from 10.10.1976 to 21.01.1980. It is not as if, that a sum of Rs.200/- has been paid, each and every month continuously and regularly. The mode of payment go to show that sometimes Rs.200/- has been paid and sometimes Rs.500/- has been paid and so on. In other words, the payment is not continuous or consistent. Despite discontinuance in payment, without any objection, D7 has chosen to receive the same. If really time had been the essence of contract, the 7th defendant would have chosen to terminate the contract for the belated payment. That has not been done so. The pattern of payment and the silence on the part of 7th defendant would only prove that time was not meant to be essence of contract.
9.3. Learned counsel for the appellant relied upon the decision reported in 2011 (4) CTC 640 (Saradamani Kandappan Vs.S.Rajalakshmi & Ors) and contended that time is the essence of contract and that plaintiff must be non suited for not making timely payment.
9.4. Contract Act, 1872 (9 of 1872), Section 55 - Specific Relief Act, 1963 (36 of 1963) Section 20 - Whether time is essence of contract relating to immovable property- When parties prescribe time/period for taking certain steps or for completion of transaction, such stipulation must have some significance and cannot be ignored - Court while granting or refusing to grant specific performance should apply greater scrutiny and strictness whether purchaser was ready and willing to perform his part of contract - Merely because Limitation Act prescribes larger period of limitation, Plaintiff cannot postpone his Suit to last day and ought to file Suit immediately after breach or refusal - clause which provided time for payment of balance sale consideration also provided that when due date for payment falls on holiday, payment should be made on immediate next date and that discloses that time was essence of Contract - March of Law, changes in socio-economic conditions analysed and principles laid down in K.S.Vaidyanadam and others v. Vairavan, 1997 (1)CTC 628 (SC) restated - Refund of advance with higher interest ordered.
9.5. Only when parties prescribe time/period for taking certain steps or for completion of transaction, such stipulation would be binding and so far as this case is concerned, there is no such specific stipulation.
9.6. Normally, in respect of transaction concerning immovable property time is construed to be not the essence of contract, unless specifically made so. Having regard to the facts of this case, the time is not understood to be the essence of contract, by the parties. To be more specific the contract itself is by "payment by installment". Even though roughly 50% of the sale consideration has been received as advance, the balance payable, has been made payable, in easy installment of Rs.200/- per month. This scheme of payment appears to be for the benefit of the poor people who cannot afford to pay lumpsum payment. The pattern of payment as evidenced by Exs.A3 to A15 and by his conduct, the 7th defendant has made the plaintiff to understand that payment on each month is not imperative. Therefore, it is of no use to contend that the time is the essence of the contract in this case.
10. The next contention is that the suit is barred by limitation as contemplated under Section 54 of Limitation Act. Learned counsel for the appellant pointed out the plaint allegations in the 5th paragraph wherein, as it is alleged, the plaintiff has stated that the 7th defendant refused to receive the balance of sale consideration from 1980. Pointing out this averment, it is contended that the refusal of payment amounts to refusal of performance and the suit ought to have been filed within 3 years from the date of refusal. Even though the suit has been filed in the year 1982, it was only for the relief of injunction and the relief for specific performance was asked for only in the year 1994 and therefore, the suit is barred by limitation. The suit has been originally filed on l7.9.1982. Subsequently, I.A.No.29 of 1985 has been filed seeking amendment of the plaint and by the order dated 28.8.1986 the application for amendment has been allowed. The application for amendment was filed for seeking the relief of specific performance.
10.1. There are two issues to be considered.
(i) Whether the 7th defendant refused to receive payment and whether it amounted to refusal of performance and thereby it amounted to starting point of limitation.
(ii) whether the amendment ordered would relate back to date of suit or whether it would be applicable only from the date of application/order ? If the amendment relate back to date of suit, then limitation would not affect the suit and if not, it would affect the issue of limitation, is the contention.
10.2. Learned counsel for the appellant has taken the truncated piece of evidence for consideration. It is true that it is stated that the 7th defendant refused to receive the payment, but, there is a continuation and the continued dialogue is that the 7th defendant was evading payment by promising that he would receive the payment at the time of registration of document. From the evidence it is clear that the refusal is not total and complete. The refusal is evasive. The refusal did not conclusively give the indication that he is refusing performance. The refusal with assurance to receive the payment at the time of registration of document, would give an indication that the performance is postponed and not that performance is refused. The plaintiff is justified in taking the inference, because in the written statement itself, it has been stated that the plaintiff was offered alternative plot, instead of plot No.56. Therefore, this court is of the view that limitation did not commence during 1980. The refusal of the 7th defendant to receive further payment, but with an assurance to receive it, at the time of registration of document, would not amount to refusal of performance and therefore, limitation would not start running from 1980.
10.3. So far as the impact of the order passed in the amendment application is concerned, the learned counsel for the appellant contended that it would come into effect only on the date of order and not prior to that and therefore, suit is barred by limitation. In support of the contention the following decisions are relied upon:
(i) 2011 (1) CTC 96 (T.K.T. Garments, Proprietor, T.K.Thangavel, 5/18A, katabommon Nagar 2nd street, Pappanaickanpalayam Road, Tirupur-7 Vs. The Manager, Sri Balaji Transport Lines, 196, Samuel Street, New Bhagwas Bhuvan, Mumbai-400 009 and 2 others) Code of Civil Procedure 1908 (5 of 1908). Order 6, Rule 17 - Amendment of Plaint after lapse of limitation period of 3 years - Permissibility of - Original Suit was filed against Manager and Branch Manager leaving out establishment - Later Plaint was sought to be amended to effect that establishment was being impleaded as Defendant represented by its Managing Partners - Claim is barred by time and order of Trial Court allowing amendment from date of Application alone, held, proper.
(ii) 1996 (1) CTC 738 (Tarlok Singh Vs. Vijay Kumar Sabharwal) Code of Civil Procedure Code, 1908, Order 6, Rule 17 - Amendment of Pleadings - Suit instituted on 23.12.1987 seeking perpetual injunction - Application filed on 17.7.1989 for converting suit into one for specific performance of agreement dated 18.8.1984 - Prayer for amendment allowed on 25.8.1989 - Suit for specific performance must be deemed to have been instituted on 25.8.1989 - Suit was barred by limitation.
(iii) (1989) 2 L.W. 245 (The Correspondent, The Amercian Advent Mission School, Tiruporur Range, Guindy, Madras Vs. J.Jeevanandam (since died) and 6 others) C.P.C., O.6, R.17 - Amendment of Pleadings - Bar of limitation of the amended Relief - Failure of court to specify in the order allowing amendment about the effect of bar of limitation - Suit has to fail - See Limitation.
Specific Relief Act, S.39 - Suit for declaration that dismissal of plaintiff by the defendant from service, is illegal and void - Relief of damages, introduced by amendment as consequential relief after 4 years - Amendment allowed without specifying effect as to bar of limitation - Suit has to fail - See Limitation. C.P., O.6, R.17, Amendment of Pleadings.
When a contention is being raised about the law of limitation with regard to the amendments sought to be introduced, the Court, while considering the application for amendment, if it is inclined to allow it, must also consider the question of effect of amendments on limitation and give specific directions as to the date on which the amendments shall take effect. If no such direction is given, then such amendments must be held to be effective only from the date of the amendment application.
(iv) 2011 (2) CTC 28 (N.Lalitha and 6 others Vs. Manujothi Ashramam rep. by its President, deva Aseer Lawrie, Sathyanagaram, Odainarichan via Papakudi, Tirunelveli District and 2 others)
21. (i) ...........
(iii) The learned Senior Counsel for the Petitioner then made reliance on the recent judgement of the Hon'ble Supreme Court in Revajeetu Builders and Developers V. Narayanaswamy and Sons and others, 2009 (10) SCC 84, wherein the Hon'ble Supreme Court after having made a thorough survey of various earlier judgments of the Hon'ble Supreme Court has summed up factors to be taken into consideration while dealing with Applications for amendments in paragraph 63 of the Judgment which reads as follows:
"On critically analysing both the English and Indian cases, some basic principles emerge which ought to be taken into consideration while allowing or rejecting the Application for amendment.
(1) whether the amendment sought is imperative for proper and effective adjudication of the case;
(2) whether the Application for amendment is bona fide or mala fide;
(3) the amendment should not cause such prejudice to the other side which cannot be compensated adequately in terms of money;
(4) refusing amendment would in fact lead to injustice or lead to multiple litigation;
(5) whether the proposed amendment constitutionally or fundamentally changes the nature and character of the case; and (6) as a general rule, the Court should decline amendments if a fresh Suit on the amended claims would be barred by limitation on the date of Application. These are some of the important factors which may be kept in mind while dealing with Application filed under Order 6, Rule 17. These are only illustrative and not exhaustive."
(v) 2008-1-L.W.451 (Shiv Gopal Sah @ Shiv Gopal Sahu Vs. Sita Ram Saraugi & Others) Court would not permit the plaintiffs now at this stage to introduce a time barred claim under the peculiar facts and circumstances of this case where we find a complacent negligence on the part of the plaintiffs apart from the towering delay of more than 15 years.
10.4. All these decisions are distinguishable on facts and in fact, some decisions are relevant only in order to decide whether an application for amendment has to be allowed or not and not with reference to the effect and impact of amendment on limitation. It is suffice to point out that in this case the filing of the suit itself is the starting point of limitation and even if the amendment relates back to the date of filing of the suit or the date of application for amendment, in either case, the suit is not barred by limitation. When time is not the essence of contract and the filing of the suit alone amounts to refusal of performance, giving the starting point of limitation, then the suit is not barred by limitation on the date of application for amendment.
10.5. The time from which amendment will come into force depends upon the nature of order passed by the court passing order on the amendment. This principle is enunciated in the decision reported in Sampath Kumar vs Ayyakannu And Anr. on 13 September, 2002 (Equivalent citations: AIR 2002 SC 3369, 2002 (6) ALD 63 SC, 2003 (1) AWC 18 SC) An amendment once incorporated relates back to the date of the suit. However, the doctrine of relation back in the context of amendment of pleadings is not one of universal application and in appropriate cases the Court is competent, while permitting an amendment to direct that the amendment permitted by it shall not relate back to the date of the suit and to the extent permitted by it shall be deemed to have been brought before the Court on the date on which the application seeking the amendment was filed.
10.6. The details regarding date of filing of interlocutory application and the nature of order passed are not made available. The application for amendment has been filed in the year 1985. The suit is filed in the year 1982. The plaintiff would have knowledge that the defendants are refusing performance when they interfered with the possession in the year 1982. Therefore, the petition filed in 1985 seeking amendment, incorporating the relief of specific performance is within time. Therefore, this court holds that suit is not barred by limitation.
11. Jurisdiction : The learned counsel for the appellant pointed out that the suit is bad for want of territorial jurisdiction of the trial court. But the learned counsel for the plaintiffs pointed out that the first appellate court is not justified in entertaining the objection as to place of suing and in support of the contention the following decisions are relied upon:-
(i) (1981) 3 Supreme Court Cases 589 (Paramount Group Pvt. Ltd. vs Tamil Nadu Industrial Investment):
"In order that an objection to the place of suing may be entertained by an appellate or revisional court, the fulfillment of the following three conditions is essentials:
1. The objection was taken in the court of first instance.
2. It was taken at the earliest possible opportunity and in cases where issues are settled at or before such settlement.
3. There has been a consequent failure of justice.
All these three conditions must be co-exist.
(ii) Renown Biscuit Co., Bombay vs Kamalanathan on 25 January, 1979( AIR 1980 Mad 28) C. There is another aspect of the matter, which also can be taken note of. S. 21 of Civil P. C. states:
"No objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of the first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement, and unless there has been a consequent failure of justice."
11.1. It is true that in this case the petitioner at the earliest possible opportunity has taken the objection, and yet what has to be established under S. 21(1) of Civil P. C. is that entertainment of the suit by the learned District Munsif, Coimbatore, has caused failure of justice. I am unable to hold that on the facts of this case, for the reasons already mentioned, there has -been a failure of justice by the learned District Munsif holding that he had jurisdiction to entertain and try the suit.
11. 2. Failure of justice on account of wrong selection of place of suing is not substantiated by the defendants. Therefore, the appellants cannot taken advantage of the plea of want of territorial jurisdiction.
12. All the substantial questions of law raised are answered against the appellant. The second appeal is therefore dismissed with cost.
12.1. In the result, the second appeal is dismissed with cost. The judgement and decree of the learned Subordinate Judge of Poonamallee, dated 21.6.1999 in A.S.No.12 of 1994, dismissing the appeal by the defendants and confirming the judgement and decree of the learned Principal District Munsif of Poonamallee dated 22.6.1993 in O.S.No.1172 of 1982 decreeing the suit is hereby confirmed.
aes/srk To
1. The learned Subordinate Judge, Poonamallee.
2. The learned Principal District Munsif of Poonamallee.
3. The V.R.Section, Madras High Court, Chennai