Madras High Court
B.Padmini vs / on 9 December, 2024
Author: G.Jayachandran
Bench: G.Jayachandran
C.S.No.268 of 2021
IN THE HIGHCOURT OF JUDICATURE AT MADRAS
Dated: 09.12.2024
Coram:
THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN
C.S.No.268 of 2021
1. B.Padmini,
W/o N. Babu,
2. B.Saravanan,
S/o N.Babu,
Both at 18/8, Lyods Road ,
7th Street, Mylapore,
Chennai - 4. ... Plaintiffs
/versus/
V.Ravi,
S/o.S.Venkatesan,
99, Jani Jahan Khan Road,
Royapettah,
Chennai - 14 ... Defendant
Prayer:- Civil Suit has been filed under Order IV Rule 1 of the Original Side
Rules read with Order VII Rule 1 & 2 of the Code of Civil Procedure:-
a) direct the defendant to perform his part of the agreement dated 30/9/18
by executing the sale deed in favour of the plaintiffs on receipt of the balance
sale consideration of a sum of Rs.60,00,000/- (Rupees sixty Lakhs only) and on
the failure of the defendant in executing the sale deed to direct the Registrar
Original Side High Court Chennai to execute the sale deed on his behalf.
https://www.mhc.tn.gov.in/judis
Page Nos.1/20
C.S.No.268 of 2021
b) directing the defendant to deliver vacant possession of the suit property
to the plaintiffs.
c) grant permanent injunction restraining the defendant his men and
agents from any manner alienating, altering or encumbering the suit property
being all that land and building being all that property being house, ground and
premises bearing Door No.99 (Old No.36/1) Jani Jahan Khan Road, Royapettah,
Chennai - 600 014 comprised in O.S.No.754 and 782 RS.No.1103,
C.C.No.1722 admeasuring 600 Sq.ft ( 558 Sq.ft as per extract from permanent
land register) or thereabouts described in the schedule hereunder.
d) or in the alternative for refund of the advance amount of
Rs.1,00,00,000/- (Rupees Once Crore) paid by the plaintiffs to the defendant
together with interest at the rate of 18% p.a from the date of plaint till
realization.
e). to pay cost.
For Plaintiffs : Mr.N.A.Nissar Ahmed,
for Mr.N.A.Nassir Hussain
For Defendant : Mr.M.Muruganantham
ORDER
https://www.mhc.tn.gov.in/judis Page Nos.2/20 C.S.No.268 of 2021 This is a suit for specific performance filed by the plaintiffs on the premise that in respect of the suit property, the defendant executed an agreement for sale in favour of the plaintiffs on 30.09.2018 for a total sale consideration of Rs.1,60,00,000/- and received a sum of Rs.50,50,000/- on the date of agreement by cash. As per the terms of the agreement, the sale consideration has to be paid in instalments. The initial payment of Rs.50,50,000/- was paid on the date of execution of the agreement. Subsequently, a sum of Rs.11,50,000/- by cash on 12.10.2018; Rs.8,00,000/- by way of cheque drawn on George Town Co- operative Society on 15.10.2018, another cheque for Rs.8,00,000/- on the same day (15.10.2018) drawn on George Town Co-operative Society and Rs.22,00,000/- by cash on 25.10.2018. Totally, a sum of Rs.1,00,00,000/- was received and acknowledged by the defendant.
2. While the plaintiffs were ready and willing to pay the balance amount and get the sale deed executed in his favour, the defendant evaded the performance of the contract and failed to complete the transaction. On 12.12.2019, the defendant gave a letter of undertaking that he will vacate the first floor portion and ground floor shop rented to one Mr.Sulaiman by the end of February 2020, vacate the remaining portion where a printing shop and petty shop running by the end of March 2020 and register the sale deed in his favour. https://www.mhc.tn.gov.in/judis Page Nos.3/20 C.S.No.268 of 2021 However, the defendant failed to honour the letter of undertaking by not vacating the tenants in the portion occupied. Subsequently, another letter of undertaking given by the defendant on 11.03.2020, wherein, he will agreed to repay Rs.1,00,00,000/- received as advance with interest at the rate of Rs.65,000/- per month, after deducting Rs.3,30,000/- towards damages for the plaintiff's occupation of one of the portion of the suit property + Rs.57,000/- towards the interest already paid, on or before 31.07.2020 or receive Rs.30,00,000/- towards the remaining sale consideration and execute the sale deed. As a token of his agreement, the defendant transferred Rs.2,00,000/- to the credit of the plaintiffs account. Once again, there was a breach of promise and the defendant came forward with a fresh undertaking, dated 31.07.2020 signed by him along with his wife Vasuki and son Logeswaran. In the said undertaking, the defendant agreed to either execute the sale deed in favour of the plaintiffs or return the part sale consideration of Rs.1,00,00,000/- on or before 31.01.2021.
3. The plaintiffs was ready with the balance sale consideration and informed the same to the defendant through a legal notice dated 17.03.2021, requested the defendant to attend the Sub Registrar's Office on 24.03.2021 between 10.00 a.m and 11.00 a.m, with all the original title deeds, parent https://www.mhc.tn.gov.in/judis Page Nos.4/20 C.S.No.268 of 2021 document and other necessary documents for the registration of the sale deed or to repay the part sale consideration of Rs.1,00,00,000/- together with interest. The defendant failed to turn up.
4. Having failed in all his attempt, the suit has been filed expressing that the plaintiffs was always ready and willing to pay the balance sale consideration or to receive the money advanced with interest. However, the defendant has not come forward to either receive the balance sale consideration and execute the sale deed or return Rs.1,00,00,000/- received as sale consideration with interest.
5. The defendant had filed his written statement denying the fact that, he entered into an agreement of sale with the plaintiffs. The specific case of the defendant is that he received Rs.1,00,00,000/- from the plaintiffs on various dates as a loan, but he could not repay the money because of the pandemic situation. For the loan received, plaintiffs was permitted to occupy a portion in the suit property without any rent. The plaintiffs are still occupying the corner shop of the ground floor, which he had been using since the date of agreement. Except the suit property given to the defendant by his father, he has no other property and he solely depends upon the property for his livelihood. https://www.mhc.tn.gov.in/judis Page Nos.5/20 C.S.No.268 of 2021 Due to the pandemic situation, he has lost his business. Furthermore, the case of the defendant is that the property is worth more than Rs.3,00,00,000/- situated in a very prime location near Royapattah Hospital. Therefore, the sale agreement is only a sham and nominal document executed to support the loan transaction.
6. The defendant contend that the plaintiffs attempted to snatch away the property, took the assistance of the police and obtained certain endorsements and undertaking which does not bind him and cannot be made used against the defendant. The plaintiffs, with the help of local rowdy elements, obtained letters of undertaking dated 12.12.2019, 29.02.2020, 05.03.2020, 15.07.2020. The letters of undertaking dated 11.03.2020 and 15.07.2020 was obtained under threat in the police station. The signed papers given to the plaintiffs was given only as a security for the loan availed and not with intention to sell the property.
7. Based on the pleadings, the following issues were framed by this Court.
"1. Whether the Plaintiffs had been ready and willing to perform their part of the contract?
2.Whether the Defendant had received https://www.mhc.tn.gov.in/judis Page Nos.6/20 C.S.No.268 of 2021 Rs.1,00,00,000/- (Rupees One Crore) out of the Total sale consideration of Rs.1,60,00,000/- (Rupees One Crore Sixty Lakhs) and had been evading execution of the Sale deed?
3.Whether the Plaintiffs are entitled for the relief sought for in the suit?
4. Whether the unregistered deed dated 30.09.2018 is executed as security for loan borrowed by the defendant?
5. Whether the Plaintiffs can maintain a suit for specific performance based on a unregistered document, when there is a specific bar under Section 49 of the Registration Act?
6. Whether the letters of undertaking dated 12.12.2019, 11.03.2020 and 15.07.2020 were obtained using force and threat?
7. Whether the Plaintiff is entitled to any interest for the loan amount, in view of non-payment of rent of the portion of the premises he is occupying?
8. Whether the Plaintiff can maintain a prayer for specific performance of the unregistered deed dated 30.09.2018, when it has been varied several times on 12.12.2019, 11.03.2020 and 15.07.2020?”
8. The plaintiffs had mounted the witness box and marked 7 Exhibits (Ex.P.1 to Ex.P.7). He was extensively cross examined by the https://www.mhc.tn.gov.in/judis Page Nos.7/20 C.S.No.268 of 2021 defendant. On behalf of the defendant, there is no witness or exhibits marked.
9. The Learned Counsel appearing for the plaintiffs submitted that the defendant, having received part sale consideration for sale of his property, had been evading the execution of the sale deed. Therefore, the defendant was requested to either execute the sale deed receiving the balance sale consideration or to return Rs.1,00,00,000/- received towards the sale consideration, with interest. Under said circumstances, the letters of undertaking marked as Ex.P.2 to Ex.P.4 were voluntarily given by the defendant, though some of the undertakings were made after complaint given to the police for not executing the sale deed as per the agreement.
10. Dehors of the subsequent undertaking, the agreement dated 30.09.2018 is legally enforceable. The plaintiff had been always and willing, as contemplated under Section 16 (c) of the Specific Relief Act and to prove, his readiness he has mounted the witness box. The exchange of notice and the letters of undertaking from the defendant would clearly show that the defendant intended to sell his property and receive the sale consideration of Rs.1,00,00,000/- on different dates and reiterated the receipt of Rs.1,00,00,000/- and given the letter of undertaking that he will honour the agreement or will https://www.mhc.tn.gov.in/judis Page Nos.8/20 C.S.No.268 of 2021 repay the money with interest. Additionally, as a part performance, portion of the property has also been given to the plaintiff.
11. Per contra, the learned Counsel appearing for the defendant submits that the letters of undertaking marked as Ex.A.2 to Ex.A.4 were admittedly obtained in the police station and not enforceable. If these letters are to be taken into consideration, the agreement of sale dated 30.09.2018 has to be construed as superseded, rescinded and doctrine of novation should be applied. Furthermore, three cheques for the borrowed sum of Rs.97,25,000/- was issued and after issuing statutory notice marked as Ex.P.6, the plaintiff has initiated proceedings under Section 138 of Negotiable Instruments Act and same is pending. Therefore, having received the advance money back from the defendant, the cause of action for specific performance will not survive. Further, the Learned Counsel for the defendant submits that the value of the property exceeds Rs.3,00,00,000/- and therefore, it cannot be knocked away for a pittance.
Issue No.5: Whether the Plaintiffs can maintain a suit for specific performance based on a unregistered document, when there is a specific bar under Section 49 of the Registration Act?
https://www.mhc.tn.gov.in/judis Page Nos.9/20 C.S.No.268 of 2021 The Learned Counsel appearing for the defendant points out that the agreement of sale (Ex.P.1) is an unregistered document in connection with the conveyance of immovable property worth Rs.1,60,00,000/-. Therefore, as per the State amendment to Section 17 of the Registration Act, instruments of agreement relating to sale of immovable property of the value more than one hundred rupees and upwards, requires registration. Since Ex.P.1 is not a registered document, it cannot be received as evidence.
No doubt, Ex.P.1 is an unregistered agreement of sale. While it was admitted in evidence as Ex.P.1, the defendant has not objected for marking this document. While considering Section 17 of the Registration Act, it is also necessary to consider proviso to Section 49 of the Registration Act with reads as below:-
Provided that an unregistered document affecting immovable property and required by this Act, or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered instrument.
https://www.mhc.tn.gov.in/judis Page Nos.10/20 C.S.No.268 of 2021 Though, Section 17 of the Registration Act was amendment by the State Legislation by substituting Clause (f), in Sub Section (1) of Section 17 as under:-
Tamil Nadu.- In its application t to the State of Tamil Nadu, in S.17,-
(1) sub-S. (1), for Cl. (f), substitute the following clause, namely:-
"(f) instruments of agreement relating to construction of building as referred to in clause (i) under Article 5 of Schedule I to the Indian Stamp Act, 1899 (Central Act II of 1899);
(g) instruments of agreement relating to sale of immovable property of the value of one hundred rupees and upwards;
(h) instruments of Power of Attorney relating to immovable property other than those executed outside India;
(i) instruments evidencing an agreement relating to the deposit of title deeds.” (2) in sub-S. (2), the Explanation shall be omitted.
- Tamil Nadu Act 29 of 2012, S.2.
There is no analogous amendment to the Proviso of Section 49 of the Registration Act, as extracted supra. Therefore, the agreement of sale https://www.mhc.tn.gov.in/judis Page Nos.11/20 C.S.No.268 of 2021 though an unregistered document, the suit is for specific performance, hence in view of the proviso to Section 49 of the Act, the unregistered document is admissible in evidence and in fact it has been admitted in evidence with demure. Hence, this Court holds that there is no bar in admitting Ex.P.1 in evidence for appreciation the case of specific performance.
Issue No.4: Whether the unregistered deed dated 30.09.2018 is executed as security for loan borrowed by the defendant?
Issue No.6: Whether the letters of undertaking dated 12.12.2019, 11.03.2020 and 15.07.2020 were obtained using force and threat?
The case of the defendant is that the agreement of sale dated 30.09.2018 though given a nomenclature of Agreement of Sale, the intention of the parties was not to sell the property, but only to execute a deed as a security for the loan received.
Since the fact projected by the defendant is contrary to the written document, the law requires the defendant to prove the contrary. Unfortunately, in this case, the defendant has not let any evidence to substantiate his claim https://www.mhc.tn.gov.in/judis Page Nos.12/20 C.S.No.268 of 2021 made contrary to the written document Ex.P.1. Furthermore, his contention that the subsequent letters of undertaking dated 12.12.2019, 11.03.2020 and 15.07.2020 were obtained under force and threat also not substantiated with evidence. The Letters of undertaking, marked as Ex.P.2 to Ex.P.4 indicates and confirms two facts, (i) the receipt of Rs.1,00,00,000/- by the defendant from the plaintiffs and (ii) the receipt of money was pursuant to agreement of sale (Ex.P.1).
While the nomenclature of Ex.P.1 and the recital in Ex.P.1 proves sufficiently that the defendant has intended to convey the schedule mentioned property for a sale consideration of Rs.1,60,00,000/- and received Rs.1,00,00,000/- from the plaintiffs, the subsequent letters of undertaking marked as Ex.P.2 to Ex.P.4 are only supplementary documents to reinforce the facts established under Ex.P.1. Even if Ex.P.2 to Ex.P.4 as eschewed from consideration for any reason, the case of the plaintiffs will not gets affected. Therefore, the issues 4 & 6 are held against the defendant.
Issue No.1: Whether the Plaintiffs had been ready and willing to perform their part of the contract?
Issue No.2: Whether the Defendant had received https://www.mhc.tn.gov.in/judis Page Nos.13/20 C.S.No.268 of 2021 Rs.1,00,00,000/- (Rupees One Crore) out of the Total sale consideration of Rs.1,60,00,000/- (Rupees One Crore Sixty Lakhs) and had been evading execution of the Sale deed?
After the execution of Ex.P.1, the defendant did not come forward to execute the sale deed. Therefore, on three different occasions, the parties have negotiated and letters of undertaking given by the defendant and same are marked as Ex.P.2 to Ex.P.4. Subsequently, the plaintiffs had issued notice through lawyer on 17.03.2021, which is marked as Ex.P.5. In this notice, the plaintiffs' had expressed his ready and willingness to pay the balance consideration and get the document registered on 24.03.2021 at the Sub Registrar Office, Triplicane. Thereafter, the defendant has issued three cheques, expressing his intention to repudiate the contract and return the consideration received. However, due to dishonour of those three cheques, the plea of the defendant that the plaintiffs lost cause of action to sustain the suit for specific performance fails. Contrarily, the ready and willingness to perform his part of contract been explicitly made through notice marked as Ex.P.5 and the deliberate evasion of the defendant to execute the sale deed after receiving Rs.1,00,00,000/- out of total sale consideration of Rs.1,60,00,000/- is established by his subsequent contract of issuing cheques without adequate https://www.mhc.tn.gov.in/judis Page Nos.14/20 C.S.No.268 of 2021 funds.
Issue No.3: Whether the Plaintiffs are entitled for the relief sought for in the suit?
Issue No.8: Whether the Plaintiffs can maintain a prayer for specific performance of the unregistered deed dated 30.09.2018, when it has been varied several times on 12.12.2019, 11.03.2020 and 15.07.2020?
12. The submissions made by the Learned Counsels and on appreciation of the evidence, indicate that with clear intention and without any force or threat, the defendant has entered into an agreement with the plaintiffs on 30.09.2018 and received total a sum of Rs.1,00,00,000/- towards sale consideration. The defendant has admitted in the written statement that he has received Rs.1,00,00,000/- from the plaintiffs. Though, the defendant claims that it was not the sale consideration for his property but it was only a loan advance to him. Same not probabilized through evidence. If it is so, the burden shifts on him to prove the contrary. Ex.A.2 to Ex.A.4 in fact strengthens the case of the plaintiffs. The defendant had given the letters of undertaking acknowledging his agreement to sell. Though those letters of undertaking speaks about the alternate of repaying the money, it will not amount to https://www.mhc.tn.gov.in/judis Page Nos.15/20 C.S.No.268 of 2021 novation, but it can be at most taken as a codicil to the primary agreement marked as Ex.A.1.
13. The defendant though wants to taken advantage of those undertaking marked as Ex.P.2 to Ex.P.4, for the sake of disputing the agreement of sale and at the same time claims these undertakings are non-est in law, obtained under duress. Either way, the receipt of Rs.1,00,00,000/- from the plaintiff is not denied and the issuance of three cheques also fortifies the plaintiff's case that the part of the money received by the defendant was attempted to be repaid through these three cheques but those cheques got dishonoured, leading to initiation of criminal proceedings under Section 138 of Negotiable Instruments Act.
14. At this juncture, it is to be noted that discharge of a legally enforceable debt by issuing a cheque will not tantamount to discharge of debt, unless the cheque is honoured. In case that cheque gets dishonoured, it converts a civil transaction into a quasi-criminal proceedings. Mere issuance of cheques without an intention to honour will not terminate the agreement for sale. The Negotiable Instruments Act speaks about compensation as one of the relief, but not the only relief. By issuing a cheque without any intention to pay the money, https://www.mhc.tn.gov.in/judis Page Nos.16/20 C.S.No.268 of 2021 a vendor cannot get rid of his statutory liability of honouring the contract if it is otherwise enforceable. In this case, the defendant having admitted that he has received Rs.1,00,00,000/-, projected as if the money was only a loan is contrary to the written document namely, Ex.P.1 and the letters of undertaking marked as Ex.P.2 to Ex.P.4. Even assuming that Ex.P.2 to Ex.P.4 is not enforceable due to its execution at police station, it will not take away the enforceability of Ex.A.1 the agreement of sale.
15. This Court also find that the alternative relief sought by the plaintiffs could have been taken into consideration if the defendant had atleast partially honoured the cheques. Having failed to honour the cheques, it is too late for the defendant to claim that he will repay the money with interest.
16. Hence, this Court is of the view that the plaintiffs are entitled to specific performance of enforcing the agreement dated 30.09.2018, on payment of the balance sale consideration of Rs.60,00,000/- (Rupees Sixty Lakhs). On such payment, the defendant has to execute the sale deed as per the terms of agreement dated 30.09.2018.
https://www.mhc.tn.gov.in/judis Page Nos.17/20 C.S.No.268 of 2021 Issue No.7: Whether the Plaintiff is entitled to any interest for the loan amount, in view of non-payment of rent of the portion of the premises he is occupying?
Since the Court has held that the plaintiff is entitled for enforcing the agreement, the question of paying interest do no arise. Accordingly, this Issue No.7 does not survive.
17. In the result, the plaintiffs are directed to deposit Rs.60,00,000/- (Rupees Sixty Lakhs) in the name of Registrar General, High Court of Madras, within a period of sixty days, from today, after intimating the same to the defendant. On such deposit, the defendant has to execute the sale deed and get it registered and withdraw the money. Failing which on behalf of the defendant, the Assistant Registrar (O.S-I) to execute the sale deed in favour of the plaintiffs or his nominee.
18. Accordingly, this C.S.No.268 of 2021 is allowed with costs.
https://www.mhc.tn.gov.in/judis Page Nos.18/20 C.S.No.268 of 2021 09.12.2024 Index :Yes/No. Internet :Yes/No. Speaking order/Non speaking order bsm Petitioner's witness: P.W.1 – Mr.B.Saravanan P.W.2 – Mr.N.Arangam Documents marked: Exhibits Documents
Ex.P.1 Certified copy of the agreement of sale dated 30.09.2018. Ex.P.2 Certified copy of the letter of undertaking dated 30.09.2018. Ex.P.3 Certified copy of the letter of undertaking dated 11.03.2020. Ex.P.4 Certified copy of the letter of undertaking dated 15.07.2020. Ex.P.5 Office copy of the legal notice dated 17.03.2021. Ex.P.6 Certified copy of the legal notice dated 22.05.2021 Ex.P.7 Original reply notice dated 20.03.2021.
09.12.2024 https://www.mhc.tn.gov.in/judis Page Nos.19/20 C.S.No.268 of 2021 DR.G.JAYACHANDRAN,J.
bsm C.S.No.268 of 2021 09.12.2024 https://www.mhc.tn.gov.in/judis Page Nos.20/20