Madras High Court
K.V.Rathnam vs P.B.Prince Andrew on 7 February, 2018
Equivalent citations: AIR 2018 MADRAS 151, (2018) 3 MAD LJ 446, (2018) 4 RECCIVR 352, (2018) 3 CIVILCOURTC 350
Bench: M.Venugopal, S.Vaidyanathan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 07.02.2018 CORAM: THE HONOURABLE MR. JUSTICE M.VENUGOPAL AND THE HONOURABLE MR. JUSTICE S.VAIDYANATHAN O.S.A.No.33 of 2018 K.V.Rathnam ... Appellant/Defendant vs. 1. P.B.Prince Andrew 2. R.C.Maheswari ... Respondents/Plaintiffs Appeal filed under Order XXXVI Rule 1 of the O.S. Rules read with Clause 15 of the Letters Patent against the Judgment and Decree dated 04.01.2017 passed in C.S.No.760 of 2013 on the file of this Court. For Appellant : Ms.V.Sahaana for M/s.P.Sesubalan Raja For Respondents : M/s.P.Satheesh Kumar J U D G M E N T
(Judgment of the Court was delivered by M.VENUGOPAL,J.) The Appellant/Defendant has preferred the present Original Side Appeal as against the Judgment and Decree, dated 04.01.2017 in C.S.No.760 of 2013 passed by the Learned Single Judge.
2. Earlier, the Learned Single Judge, while passing the impugned Judgment in C.S.No.760 of 2013, dated 04.01.2017 filed by the Respondents/Plaintiffs, at paragraph 27, had observed the following:
27. In the result, the suit for specific performance is dismissed. However, the suit is decreed for return of the advance amount of Rs.35,00,000/- along with interest at the rate of 6% per annum from the date of payment till the date of realization. There is no order as to costs. The counter claim preferred by the defendant is also dismissed."
3. According to the Appellant/Defendant, he, being the owner of the property measuring an extent of 5005 sq. ft. at Neelankarai, obtained a loan from the State Bank of India, Main Branch, Chennai-600 001, by mortgaging the suit property and since he failed to repay the amount due to the aforestated Bank within the specified period, because of sudden fall in his business, the Bank took steps to bring the properties for auction. Only with a view to avoid public auction of the properties, the Appellant/Defendant had decided to sell the suit property at Neelankarai.
4. The Respondents/Plaintiffs had entered into a Sale Agreement with the Appellant/Defendant on 21.11.2010. As per the terms of the Sale Agreement, the sale consideration of the suit property was fixed at Rs.2,10,00,000/-. Although the Respondents had agreed to pay Rs.30,00,000/- in respect of advance, on the date of Agreement viz. 21.11.2010, they paid only Rs.16,00,000/- in cash on that date and issued post-dated cheques dated 08.01. 2011 for Rs.13,00,000/- and issued a Cheque, dated 21.11.2010 for Rs.1,00,000/-. By virtue of the covenants of the Sale Agreement, the Respondents/Plaintiffs, according to the Appellant/Defendant, had assured to pay the remaining sale consideration of Rs.1,80,00,000/- within a period of three months in accordance with the Sale Agreement, on or before 20.02.2011.
5. The crystalline stand of the Appellant/Defendant is that the Respondents/Plaintiffs had not paid the remaining sale consideration of Rs.1,80,00,000/- within the stipulated time, viz. before 20.02.2011 and on 09.04.2011 (after the lapse of the time limit specified in the Sale Agreement), the Respondents/Plaintiffs, with a malafide intention to create a cause of action, for future legal proceedings, without the knowledge of the Appellant/Defendant, had transferred a sum of Rs.5,00,000/- vide RTGS to his Account and when the Appellant/Defendant caused an enquiry into the same, the Respondents/Plaintiffs had assured to pay the remaining sale consideration within a few days from then. Unfortunately, the Respondents/Plaintiffs had failed to honour their words and also committed default in payment of balance sale consideration.
6. The Appellant/Defendant in order to sell any one of the properties and to pay the dues to the Bank, took desperate efforts in selling any one of the properties and ultimately, received an offer in regard to the property at Neelankarai and he had to sell the same for a price during December 2011.
7. It is represented by the Learned Counsel for the Appellant/Defendant that on an earlier occasion, the Appellant/Defendant had entered into a Joint Venture Agreement, in regard to the Neelankarai property, as he had no intention to sell the same. Further, because of the reason, the Respondents/Plaintiffs had failed to honour their promise, the Appellant/Defendant was perforced to sell the aforestated property to a person with whom he had entered into a Joint Venture Agreement.
8. At this stage, the Learned Counsel for the Appellant/Defendant submits that the Learned Single Judge found that the Respondents/Plaintiffs were not willing to execute the Sale from the beginning and because of the fact that the Respondents/Plaintiffs failed to perform their part of obligations as per Sale Agreement, dated 01.11.2010, within the specified time, the Appellant/Defendant faced an enormous mental agony and was constrained to dispose of his Neelankarai property for a cheaper rate and thereby, suffered a heavy loss.
9. The Learned Counsel for the Appellant/Defendant contends that the Appellant had suffered heavy loss and even as per the available Police Report in Crime No.15/2012, he had incurred a loss of Rs.40,50,000/- as on December 2011. Apart from that, the said loss is only in regard to a portion of the entire property and if it is calculated for the whole extent of the property with minimum interest, the loss would be more. When facts are these, according to the Learned Counsel for the Appellant/Defendant, the Respondents/Plaintiffs had filed a vexatious Suit in C.S.No.760 of 2013 on the file of this Court, seeking the relief of Specific Performance with an intention to force the Appellant/Defendant to accept the untenable promise. Therefore, the Appellant/Defendant had raised a counter claim of Rs.43,72,500/- against the Respondents/Plaintiffs for the loss sustained by him.
10. The Learned Counsel for the Appellant/Defendant strenuously takes a plea that the Final Report in the criminal complaint, viz. Ex.D3 was accepted by the concerned competent Court and the criminal case was closed. The Final Report was filed in the year 2011 much before the filing of the Suit in C.S.No.760 of 2013.
11. Based on the above, it comes to be known that the Respondents/Plaintiffs' Advocate, required Planning Permission to offer his opinion, which was communicated to the Appellant/Defendant requiring him to furnish the Planning Permission. But, the Appellant/Defendant had not furnished the Planning Permission immediately. Hence, the Respondents/Plaintiffs had informed the Appellant/Defendant (because of the reason that he had invested heavy amount) that there was no necessity of Planning Permission and requested him to complete the transaction in question. However, the Appellant/Defendant had evaded the sale.
12. The stand taken by the Respondents/Plaintiffs before the Learned Single Judge and in the Suit was that the Respondents/Plaintiffs were always ready and willing to perform their part of Contract and because of the fact that the Appellant/Defendant had evaded to complete the Sale, the Respondents/Plaintiffs caused a legal notice on 10.10.2013, requiring the Appellant/Defendant to execute the Sale Deed, after receipt of the remaining sale consideration.
13. The case of the Respondents/Plaintiffs is that inspite of the fact that the Appellant/Defendant received the notice sent by the Respondents/Plaintiffs, he had not given reply nor he came forward to execute the Sale Deed in question. Therefore, the Respondents/Plaintiffs were constrained to file a Suit for Specific Performance or in the alternative, seeking for recovery of a sum of Rs.53,00,000/- together with interest at the rate of 18% per annum on Rs.35,00,000/- from the date of claim till the date of realization.
14. The Appellant/Defendant took a stand that since he had not paid the amount within the period, the Bank took necessary steps to bring the property situated in Neelankarai to sale, in public auction and in order to sell the property in question, he entered into a Sale Agreement for sale of the said property for a sale consideration of Rs.2,10,00,000/-.
15. It appears that the Appellant/Defendant was under the bonafide impression that the Respondents/Plaintiffs would pay the balance sale consideration within three months as per the Agreement. However, the Respondents/Plaintiffs had not paid the balance amount in question and in fact, after a lapse of the period mentioned in the Agreement, the Respondents/Plaintiffs transferred a sum of Rs.5,00,000/- to the Appellant/Defendant's Account. Not resting with that, the Respondents/Plaintiffs informed the Appellant/Defendant that they were not in possession of the remaining sale consideration and that they had agreed to cancel the Agreement and the Appellant/Defendant has agreed to return the advance.
16. Inasmuch as the Appellant/Defendant was not in a position to sell the property at Neelankarai as well as the Suit property, it transpires that the Appellant/Defendant had entered into a Joint Venture Agreement to sell the property at Neelankarai to one Saji Builders for a sale consideration of Rs.3,125/- per sq. ft.
17. In respect of the aforestated transaction, the Appellant/Defendant executed a Power of Attorney to and in favour of Saji Builders. The Power of Attorney Holder viz. Saji Builders, sold the property in question after eight months at the rate of Rs.4,450/- per sq. ft., gaining a profit of 42.4%. When the matter stood like this, one Muneer Basha, lodged a complaint against the Appellant/Defendant, which resulted in registration of Crime No.15/2012 by the concerned Police of Economic Offences Wing, Chennai. After thorough enquiry made by the Police, the Police filed a Final Report that Neelankarai property would not have been sold for not less than Rs.1,35,00,000/-. Hence, the averment of the Appellant/Defendant was that he had incurred heavy loss of more than Rs.40,50,000/- as on December 2011. Because of the loss suffered by the Appellant/Defendant, the submission of the Learned Counsel for the Appellant is that the Respondents/Plaintiffs were to pay the said loss of Rs.40,50,000/- as counter claim with interest at 18% per annum.
18. Before the Learned Single Judge, in the main Suit, on the basis of respective pleadings, initially Issue Nos.1 to 4 were framed on 29.10.2016 and also one Additional Issue relating to counter claim for Rs.43,73,500/- was framed. Later, the Issues were re-casted and Issue Nos.1 to 3 were framed. On the side of the Respondents/Plaintiffs, P.W.1 was examined and Exs.P1 to P8 were marked. On the side of the Appellant/Defendant, D.W.1 was examined and Exs.D1 to D4 were marked. Ultimately, after trial of the main Suit, the Learned Single Judge came to the conclusion for Issue No.1 that the Respondents/Plaintiffs had not proved their readiness and willingness to perform their part of the Contract and negatived the plea for specific performance.
19. In respect of Issue Nos.2 and 3, the Learned Single Judge only decreed the Suit in favour of Respondents/Plaintiffs for the return of advance amount of Rs.35,00,000/- together with interest at the rate of 6% per annum from the date of payment till the date of realisation, to be paid by the Appellant/Defendant, because of the reason that the Respondents/Plaintiffs have not proved their readiness and willingness from the beginning. In short, the Learned Single Judge had granted only 6% interest per annum.
20. Insofar as the counter claim made by the Appellant/Defendant, the Learned Single Judge opined that the counter claim was made only in the year 2014, when the Written Statement was filed on 05.11.2014. At this stage, this Court worth recollects and recalls a decision of the Honourable Supreme Court in the case of Bollepanda P. Poonacha vs. K.M.Madapa reported in 2008 (3) MLJ 988, wherein, it is observed and held that in the present case, counter claim filed after filing of the Written Statement is impermissible. A counter claim must have a nexus/bearing with the Suit. Moreover, the Learned Single Judge in the Judgment, at paragraph 26, had, among other things, observed that Further, merely because the subsequent purchaser has sold the property for higher value cannot be considered as loss to the previous seller and viewed in that perspective, rejected the contention of the Appellant/Defendant and held that the Appellant/Defendant is not entitled for any counter claim.
21. It may not be out of place for this Court to make a significant mention that Ex.D3 was the Closure Report filed by the Investigating Officer and in fact, the Investigating Officer had recorded that the criminal case in Crime No.15/2012 was registered under the caption 'Mistake of Fact'. Although, the complaint was lodged against the Appellant/Defendant initially, the Investigating Officer found that the purchaser of the property sold for a higher rate, at a later stage. Only because, the purchaser of the property had sold the property for a higher rate or excessive rate or any exorbitant rate, that cannot be a cementing platform for the Appellant/Defendant to lay the claim under the caption 'counter claim'. A counter claim in law, is substantially a 'Cross-Objection' or 'Cross-Suit', as the case may be. The main aim of a counter claim is to prevent plurality of proceedings between the parties.
22. It is to be noted that the Appellant/Defendant had not replied to the legal notice, dated 10.10.2013 marked as Ex.P6, which aspect is clearly an unfavourable circumstance to and in favour of the Appellant/Defendant.
23. It is to be borne in mind that in 'Sale', a Vendor barters away his property, i.e. movable or immovable, for a valuable consideration in cash or kind, paid or payable by the Buyer. In terms of Section 54 r/w Section 8 of the Transfer of Property Act, 1882, ordinarily, the title of the Vendor passes to the Vendee on registration of Sale Deed, irrespective of the fact as to the consideration of money either in entirety or in part was paid by the Vendee to the Vendor or not, subject of course, a contrary intention of the parties to the transaction. A registered Sale Deed carries with a sanctity of genuine transaction and a registered document operates from the date of execution. Undoubtedly, a 'Sale' is 'Transfer of Ownership for a Price'. 'Sale' is species and 'Exchange' is 'Genesis'. The term 'Exchange' is defined in Section 118 of the Transfer of Property Act, 1882. Adequacy or inadequacy of price is not a vital element in completing the Sale.
24. Suffice it is for this Court to point out that once the property was sold by the Appellant/Defendant to a third party and if the third party had benefitted or gained substantially, thereby, it is not open to the Appellant/Defendant in Law, to make a complaint at a later point of time to say that that he is entitled to file a 'Counter Claim', because of the fact that the third party in respect of the subsequent sale had derived profit.
25. It is to be remembered that if a person sells his/her property to another and if the latter person purchases the property and thereby makes a substantial gain and if it is characterized as a 'counter claim', then, in the considered opinion of this Court, it would defeat the very purpose and object of Transfer of Property Act, 1882. It cannot be brushed aside that the aim of the Transfer of Property Act, 1882 is (i) to bring the Rules, which reflects transmission of property between living homo-sapiens into harmony with the Rules effecting the devolution upon the dearth and thus, to furnish the complement of work connected in regard to the Law of Intestate and Testamentary Succession and (ii) to complete the Code of Contract relating to an immovable property.
26. In short, this Court, on going through the Judgment and Decree of the Learned Single Judge in dismissing the suit, finds that the present Original Side Appeal, projected by the Appellant/Defendant, as an 'Aggrieved Person' to establish his counter claim, is devoid of merits.
27. In view of the above, the Original Side Appeal fails and stands dismissed, leaving the parties to bear their own costs. The Judgment/Decree passed by the Learned Single Judge in C.S.No.760 of 2013, dated 04.01.2017 in regard to the disposal of counter claim, are affirmed by this Court for the reasons assigned in this Appeal. Consequently, connected C.M.P.No.1998 of 2018 is closed.
(M.V.,J.) (S.V.N.,J.)
07.02.2018
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Speaking Judgment
(aeb)
M.VENUGOPAL,J.
AND
S.VAIDYANATHAN,J.
(aeb)
Judgment in
O.S.A.No.33 of 2018
07.02.2018