Madras High Court
Mrs. Bhawari Devi Acha vs Mrs. Anjugam Raj And Ors. on 23 March, 1993
Equivalent citations: (1994)2MLJ110
Author: Ar. Lakshmanan
Bench: Ar. Lakshmanan
ORDER AR. Lakshmanan, J.
1. The plaintiff in the suit is the applicant herein. She has filed the above application for interim injunction restraining the respondents/defendants from in any manner dealing with the plaint schedule property by sale or otherwise pending disposal of the suit.
2. The plaintiff filed the present suit for the following reliefs:
(a) To execute and register a sale deed conveying the property described in the schedule to the plaint in favour of the plaintiff in terms of the agreement dated 13.7.1990 and in default directing an officer of the court to execute and register the sale deed in favour of the plaintiff;
(b) To deliver possession of the suit schedule mentioned property to the plaintiff;
(c) To pay damages of Rs. 20,000 to the plaintiff;
(d) To pay the cost of this suit to the plaintiff; and
(e) To grant such further or other relief to the plaintiff as may be deemed fit in the circumstances of the case.
3. Notice was ordered in this application by this Court at the first instance. However, on 28.1.1993 I have granted interim injunction until further orders. The defendants/respondents have now filed counter-affidavits denying the allegations contained in the affidavit filed in support of this application. The plaintiff/applicant has also filed a reply to the same.
4. The short facts are as follows:
The plaintiff filed the above suit for specific performance of the contract for sale of the suit property bearing door No. 88, Rundalls Road, Purasawalkam, Madras-7, and for damages. The 1st defendant agreed to sell the suit property for Rs. 7 lakhs to the plaintiff. An agreement dated 13.7.1990 has been executed by the 1st defendant in favour of the plaintiff for selling the suit property to the plaintiff. The said agreement was attested by the 1st defendant's husband R. Raja, the 2nd defendant in the suit and by one Inderchand, friend of the plaintiffs husband. The plaintiff paid an advance of Rs. 1 lakh to the 1st defendant. As the property has been bequeathed to the 1st defendant under the Will dated 9.10.1989executed by her paternal aunt S. Dorai Ammal, who died on 27.11.1989, the 1st defendant has undertaken to obtain probate in respect of the Will dated 9.10.1989 and also deliver vacant possession of the suit property after evicting the tenants at her cost. The 2nd defendant, husband of the 1st defendant, has been appointed as executor under the said Will and he took steps for obtaining the probate. Time for completing the sale deed was extended by three months and endorsement to that effect was made on the back of the agreement.
5. Before the expiry of the three months period, on 10.4.1991, defendants 1 and 2 representing that the probate order has not been obtained and that some more time was required for obtaining the probate order and for evicting the tenants for the purpose of completing the sale transaction, sought for further extension of time and requested the plaintiff to pay a further sum of Rs. 2 lakhs. The plaintiff has paid the said sum which was acknowledged by the 1st defendant as per the endorsement made on the agreement. Within a week thereafter, the 1st defendant demanded a further advance of Rs. 25,000 from the plaintiff, which she paid and the said payment has also been duly acknowledged by the 1st defendant on 17.4.1991. Thus, the plaintiff has paid a total advance of Rs. 3,25,000 to the 1st defendant.
6. According to the plaintiff, she has always been ready and willing to pay the balance of sale consideration of Rs. 3,75,000 and have the sale executed and registered in her favour at her cost in terms of the agreement. Subsequently, when the plaintiff and her husband contacted defendants 1 and 2 and enquired about the probate proceedings and the steps taken by them for the eviction of the tenants, they represented that the probate proceedings were still pending and further steps would be taken for obtaining the order after reaching a settlement with certain other persons who had raised objections. But, defendants 1 and 2 would not take steps to complete the sale transaction even though the plaintiff was willing to extend the time for performance. Defendants 1 and 2 were evasive with a view to wriggle out of the sale agreement with ulterior motives.
7. The plaintiff sent a lawyer's notice dated 13.10.1991 to the 1st defendant with copies to defendants 2 and 3. A reply dated 24.10.1991 was sent on behalf of the 1st defendant. While admitting the agreement, the 1st defendant put forward false claims and offered to return the amount of Rs. 2,68,500 with interest within a period of one year. The plaintiff sent a rejoinder dated 1.11.1991 through her lawyer reiterating her earlier demand. The plaintiff later came to know that in or about the last week of April, 1992, the 2nd defendant has been granted probate in respect of the said Will. Hence, the plaintiff, with a view to enforce her rights and claims under the sale agreement dated 13.7.1990, sent a lawyer's notice dated 6.6.1992 to the 1st defendant offering to pay the balance sale consideration and calling upon the 1st defendant to execute and register a sale deed and also sent copies of the said notice to defendants 2 and 3. A reply dated 25.6.1992 was sent by the 1st defendant on 25.6.1992 through her lawyer refusing to comply with the demands alleging that she is not entitled to the said property and that the same has been allotted to the 3rd defendant in the probate proceedings. According to the plaintiff, the settlement alleged to have been reached by defendants 1 and 2 with the 3rd defendant and with certain other persons in T.O.S. No. 15 of 1990 with the knowledge of the sale agreement dated 13.7.1990 in favour of the plaintiff, is collusive, fraudulent, invalid and unenforceable and not binding on the plaintiff, the plaintiff submits that the sale agreement being long prior to the alleged settlement in the probate proceedings, the defendants herein, who have been put on notice of the same, are bound by the terms of the sale agreement and the said arrangement is, therefore, only subject to the rights and claims of the plaintiff under the sale agreement dated 13.7.1990.
8. As stated above, the sale agreement dated 13.7.1990 executed by the 1st defendant in favour of the plaintiff, attested by the 2nd defendant is known to all the defendants and they, suppressing the lawful rights and claims of the plaintiff under the said agreement, have brought out the collusive decree in the probate proceedings which is not valid and binding on the plaintiff. The plaintiff, if so directed, is ready and willing to deposit the balance of sale consideration into court at any time within a time fixed by this Court. The plaintiff has paid nearly 50% of the sale consideration. It is just and necessary that the defendants should be restrained by grant of temporary injunction from transferring the suit property by sale or otherwise pending disposal of the suit and if they are allowed to deal with the same pending the suit, not only such a step on the part of the defendants would prejudice the plaintiffs rights and claims, but rights of third parties will interview leading to multiplicity of proceedings and causing delay in the disposal of the suit.
9. The 1st defendant/1st respondent filed a separate counter-affidavit. In the fore-front she submits that when the plaintiff contacted her and her counsel, they expressed their inability to sell the suit property to the plaintiff as under the compromise decree in T.O.S. No. 15 of 1990, the suit property has been allotted to the 3rd defendant and the 1st defendant has agreed to return the amount of advance paid by the plaintiff with interest. The said negotiation has been arrived at after many meetings and finally it was discussed and finalised on 17.1.1993 in the house of the counsel for defendants 1 and 2, on which day the plaintiffs husband came to the house of the 1st defendant's counsel. When that being the position, the application filed by the plaintiff for an order of injunction will not arise and hence the application is liable to be dismissed. According to the 1st defendant, she has received a sum of Rs. 2,68,500. The 1st defendant has also explained the reasons as to why she is not in a position to sell the suit property as she is no longer the legal owner of the property in question. Under the agreement it is made clear that if there is any complication in obtaining the probate or getting the property, the 1st defendant undertook to return the amount and on payment of the amount, the agreement shall stand cancelled. When that being the case, the plaintiff cannot insist upon the property being sold to her. This particular stand has been explained in the reply notice by the 1st defendant. A compromise was entered into between the parties in T.O.S. No. 15 of 1990 and the suit property has been allotted to the 3rd defendant. The allegation that the settlement has been reached in T.O.S. No. 15 of 1990 with the knowledge of the sale agreement in favour of the plaintiff and as such, it is collusive, fraudulent and not binding on the plaintiff is incorrect. The 1st defendant has informed the plaintiff about her inability to comply with the demand of the plaintiff for the reasons set forth in the reply notice dated 24.10.1991 and has also agreed to return the advance with interest. As such, the plaintiff cannot say that the compromise decree in T.O.S. No. 15 of 1990 is unenforceable. The plaintiff cannot now seek to enforce the agreement with regard to a property of which the 1st defendant is not the present owner. The suit is misconceived. Even if there is an order of injunction against the 1st defendant, it is of no consequence as she is not the owner of the property.
10. The 2nd defendant, who is the husband of the 1st defendant, has filed a separate counter-affidavit stating that he is not the owner of the property nor a party to the agreement which has been entered into without his consent. He has not entered into without his consent. He has not entered into the agreement as an executor. The suit is misconceived. He is not a party to the agreement and he is only an attestor and he did not know the contents thereof. There is no consent from him for entering into the agreement with regard to the property of Dorai Ammal. He is only an executor under the Will of Dorai Ammal. The property pursuant to the compromise decree in T.O.S. No. 15 of 1990has been allotted to the 3rd defendant. The plaintiff cannot seek any relief against the 2nd defendant as the agreement has been entered into only between the 1st defendant and the plaintiff and the same is invalid and inoperative under the Hindu Succession Act as no right will flow to a legatee before the finalisation of the probate proceedings.
11. The 3rd defendant, to whom the property has been allotted under the compromise decree in T.O.S. No. 15 of 1990, has also filed a separate counter-affidavit. He states that the suit is misconceived, that he is not a party to the agreement alleged to be entered into between the plaintiff and the 1st defendant and that he is not aware of any such agreement. Specific performance can be ordered by the Court only against a party who is a party to the agreement. When the 3rd defendant is not a party to the agreement, the prayer for injunction against him is misconceived and the agreement in so far as he is concerned is not enforceable. Hence, the suit is misconceived as against the 3rd defendant and the same is liable to be dismissed. Under the decree of compromise, the property was given to him and he is the legal owner thereof. Since the 2nd defendant is the executor, as per the compromise decree, the property has been given to the 3rd defendant. The 1st defendant cannot deal with his property and the plaintiff cannot enforce the agreement against the 3rd defendant. There is no allegation that the 3rd defendant is aware of the agreement.
12. The plaintiff filed a reply affidavit denying the allegations in the counter-affidavit of the 1st defendant that negotiations have been arrived at after many meetings and it was finally decided at the house of defendants 1 and 2. The 1st defendant does not furnish particulars as to the date or dates on which the plaintiff is alleged to have approached defendants 1 and 2 and also contacted their counsel. The plaintiff did not approach defendants 1 and 2 nor did she contact their counsel at any time after the execution of the agreement. The compromise with other parties in T.O.S. No. 15 of 1990 has been brought about by the 2nd defendant, who is the husband of the 1st defendant, and also the executor appointed under the Will, in collusion with one Kumar and Sarojini Raja, who were the contesting respondents in T.O.S. No. 15 of 1990, and orders of this Court were obtained in April, 1992. The plaintiff reliably understands that the 1st defendant, who is not a party to T.O.S. No. 15 of 1990, has agreed for the allotment of the suit property covered by the sale agreement in favour of her brother, the 3rd defendant herein, who is also not a party to the above T.O.S. No. 15 of 1990. Therefore, the plaintiff sent a lawyer's notice dated 6.6.1992to the 1st defendant with copies to defendants 2 and 3, calling upon the 1st defendant to convey the property in terms of the agreement. A reply dated 25.6.1992 was sent by the 1st defendant alleging that the suit property agreed to be sold to the plaintiff, has been allotted to the 3rd defendant under the compromise decree in T.O.S. No. 15 of 1990 and that the 1st defendant is not entitled to sell the property. The 3rd defendant also sent a lawyer's reply dated 25.6.1992 affirming the allotment to him under the compromise and refusing to sell the property as demanded. Therefore, the plaintiff submits that the 2nd defendant, as the husband of the 1st defendant, and the 3rd defendant, who is the brother of the 1st defendant, are well aware of the agreement dated 13.7.1990, that all the defendants have acted in collusion and with a view to defeat and deny the rights and claims of the plaintiff under the agreement and therefore, under law, the allotment of the property agreed to be sold to the plaintiff, to the 3rd defendant is void, invalid, unenforceable and not binding on the plaintiff. Hence, the plaintiff is entitled to enforce the agreement as sought for in the suit. The plaintiff has reiterated that a total sum of Rs. 3,25,000 has been received by the 1st defendant pursuant to the agreement dated 13.7.1990 and the claim of the 1st defendant that she has received only Rs. 2,68,500 is false to her knowledge. The plaintiff denies that she at any time accepted or agreed to receive back the money paid by her with interest.
13. I have heard Mr. P. Veeraraghavan, learned Counsel for the plaintiff, Mr. D. Peter Francis, learned Counsel for defendants 1. and 2 and Mr. A.S. Narasimhan, learned Counsel for the 3rd defendant.
14. Learned Counsel for the respective parties have reiterated the contentions raised by them in their respective pleadings. The only question that arises for consideration is, whether the plaintiff/applicant is entitled for an order of injunction as prayed for in her favour restraining the defendants/respondents from in any way dealing with the suit property cither by way of sale or otherwise, during the pendency of the suit.
15. Point : There is no dispute with regard to the agreement entered into between the plaintiff and the 1st defendant. There is also no dispute with regard to the sale consideration. The agreement has been duly signed by the plaintiff and the 1st defendant and also witnessed by the 2nd defendant and one Inderchand, a friend of the plaintiffs husband. The agreement was prepared by one M.E. Thiagarajan, Document Writer. He has also attested the said document. The subject matter of the agreement is the properly bearing Door No. 88, Rundalls Road (E.V.K. Road), Purasawakkam, Madras. It is useful to extract two important clauses in the agreement:
16. A reading of the above two clauses will show that the 1st defendant has made a promise in the alternative form. On the proper construction of the contract, there is not one obligation to be performed in alternative ways, but one obligation to be performed in one way unless the promisor chooses to substitute another way, in which case, the primary obligation being impeded, the promisor is not bound to exercise the option for the benefit of the other party. In the present case the seller/1st defendant stipulated that if she is unable to execute the sale deed, she will pay back the advance amount to the purchaser/plaintiff. The question then was, whether the second alternative viz., the return of the advance with interest as agreed to in the agreement would automatically follow. In the instant case, the first alternative viz., the execution of the sale deed, failing, if the promisor/vendor decided in favour of the other alternative, it could not be said that there was breach of any obligation under the agreement, and if that was so, there could arise no question of specific performance of the contract.
17. It is seen from the order dated 20.4.1992 in T.O.S. No. 19 of 1990, the parties to the above probate proceedings have compromised the matter and entered into a memo of compromise in token of having settled their dispute. I passed an order on 20.4.1992 recording the compromise. The 1st defendant herein, one Sarojini Raja and Thirupurasundari Ammal were allotted different properties in pursuance of the said compromise. The 3rd defendant herein was allotted the property, which is the subject-matter of the present suit. Under such circumstances, I am of the view that the 1st defendant is not in a position to sell the property to the plaintiff herein as she is no longer the legal owner. It is also not known as to why the plaintiff herein, who has taken steps to implead herself as a party to the probate proceedings has not pursued the said application further.
18. Under the sale agreement, as stated above, it is made clear that if there is any complication in obtaining the probate or getting the property, the 1st defendant undertook to return the amount and on payment of the amount, the agreement stands cancelled. When that being the position, the plaintiff cannot now insist upon the property being sold to her and seek for injunction restraining the defendants from in any way selling or dealing with the property pending the suit. Though it is alleged by the plaintiff that the 2nd defendants the husband of the 1st defendant, and the 3rd defendant, as the brother of the 1st defendant, are well aware of the agreement dated 13.7.1990 and that all the defendants have acted in collusion and with a view to defeat and deny the rights of the plaintiff under the said agreement, it is a matter for evidence and can be decided only after a full-fledged trial. Whether the compromise decree in T.O.S. No. 15 of 1990 is a collusive decree, or whether the allotment of the suit property here in to the 3rd defendant is void, invalid and unenforceable and whether the same has been done in order to avoid sale in favour of the plaintiff can be decided only on a consideration of the entire evidence to be let in by both parties at the time of trial and it is premature for this Court at this stage to com elude that the allotment of the suit property to the share of the 3rd defendant in a compromise decree passed by this Court is collusive in nature or to avoid the sale in favour of the plaintiff. Hence, I am not expressing any opinion on the said issue and the same is left open to be decided at the time of trial. But, however, the plaintiffs interest should also be safeguard till the disposal of the suit.
19. The 1st defendant has categorically stated in her counter-affidavit that she is ready and willing to return the advance amount together with interest. It is seen from the xerox copy of the agreement filed as document No. 1, that the plaintiff has paid a sum of Rs. one lakh as advance, a further sum of Rs. 2 lakhs and another sum of Rs. 25,000 and that the 1st defendant has made endorsements to the said effect in the agreement itself. Hence, I am of the view, that the 1st defendant should be directed to deposit the said amount with interest at 18% per annum from the respective date of its receipt by her from the plaintiff till date of deposit. It is also made clear that any sale or alienation made by the defendants in respect of the suit property will be subject to the ultimate result of the suit. Further, without prejudice to her contentions in the suit, the plaintiff is also at liberty to withdraw the said sum from court deposit without furnishing security.
20. Though it is contended by defendants 2 and 3 that they are not necessary parties, the same is not tenable in view of the decisions of our High Court reported in Chinna Vanon v. Alamelu and Vimala Ammal v. C. Suseela , wherein this Court has held that a subsequent purchaser of the properly with knowledge of prior agreement of sale to another is a necessary party in a suit by the latter for specific performance and unless he is impleaded, the decree is nullity and cannot be executed against him. Hence, I am of the view, that defendants 2 and 3 are necessary parties to the suit.
21. Mr. P. Veeraraghavan, learned Counsel for the plaintiff cited a Division Bench decision of this Court consisting of Ramamurthi and A. Alagiriswami, JJ., as they then were, reported in Veeramalai Vanniar v. Thadikara Vanniar , in support of his contention. The Bench has held as follows:
The plain language of Section 27(b) of the Specific Relief Act shows that the subsequent transferee can retain the benefit of his transfer by purchase which, prima facie he had no right to get, only after satisfying the two conditions concurrently : (1) he must have paid the full value for which he purchased the property, and (2) he must have paid it in good faith and without notice of the prior contract. Further, the burden of proof is upon the subsequent purchaser to establish these conditions in order that his rights may prevail over the prior agreement of sale.
22. In the instant case, the property was allotted to the 3rd defendant as per the compromise decree in T.O.S. No. 15 of 1990. Hence, the question of payment of any sale consideration, which was allotted to him under the compromise decree, does not arise. Secondly, this Court will have to decide whether the allotment of the suit property to the 3rd defendant under the said compromise decree was made in good faith and without notice of the prior contract. It is for the 3rd defendant to prove that he has no notice of the prior contract between the plaintiff and the 1st defendant. Since the burden of proof is on the subsequent allottee to establish these conditions in order that his rights may prevail over the prior agreement of sale, this point can be decided only at the time of trial. As on date, the 1st defendant is not the owner of the suit property. The 2nd defendant, who is the husband of the 1st defendant, is only an attestor. The 3rd defendant is the allottee of the properly under the compromise decree in T.O.S. No. 15 of 1990. Both defendants 2 and 3 arc not parties to the agreement. Hence, the plaintiff, can, if at all, enforce her agreement only against the 1st defendant. Whether the plaintiff will be entitled to specific performance or for damages as asked for has to be decided only at the time of trial.
23. Balance of convenience is only in favour of the 3rd defendant, in whose favour the property has been allotted under the compromise decree passed by this Court in T.O.S. No. 15 of 1990. Hence, as observed by the Supreme Court in the decision reported in Mayawanthi v. Kaushalya Devi , the intention of the offer to accept the offer must be expressed without leaving room for doubt as to the fact of acceptance or to the coincidence of the terms of acceptance with those of the offer. The rule is, that the acceptance must be absolute, and must correspond with the terms of the offer. If the two minds were not ad idem in respect of the property to be sold, there cannot be said to have been a contract for specific performance. As seen from the agreement, the 1st defendant has agreed to execute the sale deed or otherwise pay back the advance together with interest. The legal effect of this statement in the agreement will, in my opinion, amount to an alternative promise. In Halsbury's Laws of England, Fourth Edition, volume 9, paragraph 446, on alternative promise, it is stated as under:
When a promise is made in an alternative form and one alternative is impossible to perform, the question whether the promisor is bound to perform the other or is altogether excused depends on the intention of the parties to be ascertained from the nature and terms of the contract and the circumstances of the particular case. The usual result in such a case will be that the promisor must perform the alternative which remains possible; but it may be that on the proper construction of the contract there is not one obligation to be performed in alternative ways but one obligation to be performed in one way unless the promisor chooses to substitute an other way, in which case, the primary obligation being impeded, the promisor is not bound to exercise the option for the benefit of the other party.
24. Applying the said principle, I am of the prima facie view that at this stage it can be construed that there was not one obligation to be performed in alternative ways but one obligation to be performed in one way unless the promisor chooses to substitute another way. In other words, the primary obligation being impeded, the promisor is not bound to exercise the option for the benefit of the other party. Since the primary obligation of executing the sale deed in favour of the plaintiff being imposible in view of the allotment of the said property to the 3rd defendant, the promisor viz., the 1st defendant is bound to exercise the option for the benefit of the other party. Hence, in view of the impossibility of executing the sale deed, the 1st defendant should be directed as an alternative measure and to safeguard the interest of the plaintiff to pay back the advance, amount of Rs. 3,25,000 received by her together with interest at 185 per annum. In the above cited decision, the Supreme Court has observed that the first alternative failing, if the promisor decided in favour of the other alternative, it could not be said that there was any breach of any obligation under the agreement, and if thai was so, there could arise no question of specific performance of the contract. Respectfully applying the above ratio laid down by the Apex Court, I direct the 1st defendant/1st respondent to deposit the advance amount of Rs. 3,25,000 received by her from the plaintiff as per the endorsement in the sale agreement, to the credit of the suit within four weeks from to-day, together with interest at 18% per annum from the respective dates of payment till deposit. On such deposit, the plaintiff/applicant is at liberty to withdraw the same without furnishing security and without prejudice to her contentions in the suit. I make it clear that any sale by defendants 1 to 3 will be subject to the ultimate result of the suit.
25. The injunction application is dismissed with the above observations and the interim injunction already granted is vacated. No costs.