Madras High Court
Vijay Lalchand Huf And Anr. vs K.M. Lulls Huf on 16 February, 1995
Equivalent citations: 1995(1)CTC556
ORDER Srinivasan, J.
1. These four appeals are directed against the common order passed by a single Judge of this Court sitting on the Original side on four applications filed during the pendency of a suit. For the sake of convenience, the appellants will be referred to as the plaintiffs and the respondent will be referred to as the defendant.
2. The suit is for specific performance of an agreement for sale said to have been entered orally by the defendant with the plaintiffs in or around August 1991. The sale price was Rs. 9, 75, 000 for each plot. The parties have agreed that the sale consideration should be paid at the time of execution of the sale deed. The plaintiff and his wife agreed to purchase the plots because they intended to build a temple for Sri Shiridi Sai Baba and the entire extent of 7.37 acres was needed for such construction in a fit manner. The defendant delivered the original title deeds relating to the suit property to the first plaintiff and also put the plaintiffs in possession. The plaintiffs prepared a draft sale deed and handed over the same to the defendant. The defendant applied for Income Tax Clearance Certificate under Section 230-A of the Income Tax Act and the same was issued by the concerned authority on 30.8.1991. In the draft sale deed, filed along with application for Income Tax Clearance Certificate all the terms of the contract have been clearly set out. Immediately thereafter the plaintiffs tendered the sale consideration to the defendant and requested for execution of the sale deed. The defendant, without receiving the consideration, was postponing the fulfillment of the contract for some reason or other. The plaintiffs constructed a wall encircling the total area of 7.37 acres and fixed a gate on the northern side of the entire extent of land. The gate is provided at the entrance of the land, which is owned by the plaintiffs themselves. Anyone can have access to the entire extent of the land only through that gate and there was no other access. The plaintiffs employed their own security to protect the land. The construction of the temple began in July 1993 and the plaintiffs constructed the same in the northern part of the land which belonged to themselves. The building materials are stored in the southern part of the land which belonged to the defendant. Two huts were put up in that part of the land for use of the labourers and watchman. The defendant, who was postponing the execution of the sale deed, kept the plaintiffs in the dark by making false promises and prevented the plaintiffs from taking effective steps to complete the specific performance. The only intention of the plaintiffs was to build a temple along with facilities like prayer hall, nandavanam etc. But for the agreement and delivery of possession, the plaintiffs would not have indulged in constructing a temple. The plaintiffs are ready and willing to pay the sale consideration to the defendant and they have necessary funds therefor. In June 1994, a member of the defendant's family trespassed into the suit property and also gave a complaint against the plaintiffs. The plaintiffs had to give a counter complaint to the police. The plaintiffs have come up with a prayer for specific performance and for injunction restraining the defendant from interfering with their possession of the suit property. With the above case set out above in the plaint, the plaintiffs applied in O.A. No. 55/94 for an injunction restraining the defendant during the pendency of the suit from interfering with the possession of the plaintiffs. In O.A No. 54/94, the plaintiffs prayed for an injunction restraining the defendant from alienating or encumbering the suit property in any manner pending disposal of the suit. By O.A. No. 53/94, the plaintiffs prayed for an injunction restraining the defendant from putting up any construction on the suit property. In the affidavit filed in support of the applications, it is also alleged that the temple constructed by the plaintiffs is being managed and administered by the second plaintiff trust and the trust has appointed a number of employees who stay in the suit property to take care of the affairs of the temple.
3. The defendant filed counter affidavits contesting the claim of the plaintiffs. While the initial agreement is not denied, the defendant has stated that possession was not handed over to the plaintiffs as alleged by them. The plaintiffs have not paid even a pie as consideration and no doubt a draft deed of agreement was prepared but it was never acted upon. The plaintiffs never tendered the sale consideration to the defendant as alleged by them. The defendant agreed for a common compound wall and a common gate for the entire property because of the family relationship between the members of the first plaintiff and the defendant's family. A common security agency was agreed upon. As the Kartha of the defendants family is residing temporarily in U.S.A., the Kartha of the plaintiffs" family appointed the security agency. Merely raising a common compound wall with a common gate and appointing a security agency for the protection of the property will not create any interest in favour of the plaintiffs. There is no subsisting agreement between the plaintiffs and the defendant and the plaintiffs have no interest in the property. The plaintiffs not being in possession of the property are not entitled to claim any interim relief as prayed for in the applications. On the above averments, the defendant filed Application No. 3332/94 for vacating the interim injunction granted in O.A. No. 55/94.
4. The learned single Judge after hearing both parties, held that the report filed by an Advocate Commissioner appointed by the court to note down the physical features does not help the plaintiffs to prove that they are in possession of the property and on the other hand it is seen from the report that the temple building and other buildings are only in the northern portion of the property which belongs to the plaintiffs whereas in the southern portion there are only two huts and that it is not sufficient for proving the possession of the disputed property being with the plaintiffs. The learned Judge went on to hold that there is no explanation for the delay on the part of the plaintiffs in approaching the court for the relief for specific performance after 1991 and the oral agreement pleaded by the plaintiffs has no legal force and that the plaintiffs are trying to revive a dead contract by preferring the suit. The learned Judge has opined that the defendant is always entitled to repudiate the oral contract and express his disinclination to transfer the suit property and that has been anne (sic) in this case by the defendant and therefore, there is no subsisting contract. The learned Judge has also observed that the draft deed of agreement said to have been executed and signed by the parties has not been filed in to Court. According to learned Judge, the circumstances of the case prove that the plaintiffs were not having any intention to act upon the oral agreement and they had not made out that they were ready and willing to perform their part of the contract. The learned Judge proceeded to refer to certain judgments of this court under Section 53-A of the Transfer of property Act and purporting to follow the same, held that the plaintiffs were not entitled to get any interim relief on the basis of an oral agreement which was repudiated later. In that view, the learned Judge dismissed all the applications filed by the plaintiffs and allowed the application filed by the defendant to vacate the interim injunction. It is the said order of the learned Judge that is challenged in these appeals.
5. The following facts and circumstances are apparent on the face of the record and not in dispute.
i) There was an oral agreement between the first plaintiff and the defendant.
ii) The original title deeds relating to the property are produced by the plaintiffs along with the plaint as they had been in their custody.
iii) The defendant applied for a certificate under Section 230-A of the Income Tax Act for Income Tax Clearance along with the draft sale deed and obtained the same on 30.8.1991. The draft sale deed is not produced by the defendant in court.
iv) The Advocate Commissioner appointed by Court has submitted a report from which it is clear that there are two huts and building materials on the disputed property and that buildings have been constructed on the northern side of the disputed property which belonged to the plaintiffs.
v) A compound wall has been constructed by the plaintiffs encircling the entire property 7.37 acres with only one gate on the northern side, which is situated in the property admittedly belonging to the plaintiffs. There is no other access to the disputed property excepting through that gate.
6. A question will naturally arise whether the first plaintiff was put in possession by the defendant under the agreement. The report of the Advocate Commissioner shows that the plaintiffs have stored the building materials on the disputed property and also erected two huts which, according to the plaintiffs, are used by the men appointed by the second plaintiff Trust and the labourers, who are employed for the construction activities. A temple has been constructed on the northern side of the land and a compound wall has been admittedly constructed by the plaintiffs. The security also was appointed only by the plaintiffs. The only inference that can be drawn from the above facts is that the plaintiffs are in possession of the land which is the subject matter of the suit. The fact that the defendant had applied for Income Tax Clearance Certificate under Section 230-A of the Income Tax Act and obtained the same even on 30.8.1991 shows that the parties intended to give effect to the oral agreement for sale and they had acted on it. The defendant has no explanation for not producing the draft sale deed which was filed before the Income Tax Officer along with the application for Clearance Certificate. If that document had been produced, it would have been seen that there is a recital with regard to possession of the property. If there is no such a recital, the defendant would have produced the certificate. An adverse inference can be drawn against the defendant for the non-production of the said document. In such circumstances, we have no doubt in accepting the case of the plaintiffs that possession was handed over to the first plaintiff by the defendant under the agreement and that the plaintiffs have acted in pursuance of the agreement for sale and erected a temple and is proceeding with the work. The plaintiffs have also suffered detriment by erecting a compound wall encircling the entire property including that of the defendant. But for an agreement alleged by the plaintiffs, there was no necessity for them to erect a compound wall around the property of the defendant. The fact that there is only one gate for entering the entire property including the disputed property and the fact that the defendant did not at any time protest against the provision of only one access to the entire property go a long way to make out a prima facie case in favour of the plaintiffs. The finding of the learned Judge ignoring the relevant part of the report filed by the Advocate Commissioner and also ignoring the circumstances that a compound wall has been erected covering the entire property by the plaintiffs, is erroneous. There is ample material now on record to prove prima facie that the plaintiffs are in possession of the disputed land.
7. Hence, the question arises whether the plaintiffs are entitled to have an injunction restraining the defendant from interfering with their possession on the basis of the agreement. The learned Judge has referred to the judgment in Krishnamoorthy v. Paramasiva (AIR 1981 Madras 310) and the judgment in Parameshwari, T. and four others v. S.S. Investments Private Ltd. (1993 (1) Law Weekly 109) and taken the view that the two judgments have laid down the law that in case of a suit for specific performance of an oral agreement, the plaintiff is not entitled to get any interim relief on the basis of the alleged possession as the plaintiffs have to prove possession only at the trial and further that the right under Section 53-A of the Transfer of Property Act can be used only as a shield and not as a sword and therefore a person relying on that Section can get relief only as defendant and not as a plaintiff. We are unable to accept the view taken by the learned Judge as regards the proposition laid down in the two judgments referred to by him. In fact the observations contained in the judgments are really obiter. In Krishnamoorthy v. Paramasiva (AIR 1981 Madras 310), the case arises out of an interlocutory order. It was found as a fact that the plaintiff had not proved possession prima facie and was not entitled to claim injunction. It was also found in that case that the genuineness of the agreement was itself questioned by the defendant and in the face of such a challenge and in the absence of prima facie evidence to prove possession under the agreement, the plaintiff could not get injunction. After giving such a finding on the facts, the Division Bench proceeded to observe that even assuming that the plaintiff was put in possession under the agreement and that he was entitled to the benefits of Section 53-A of the Transfer of Property Act, he was not entitled to maintain a suit as plaintiff and seek an injunction as that would amount to his using the provision of Section as a sword and not as a shield. Those observations contained in that judgment are obiter. Similarly, in the later judgment in Parameshwari T. and four others v. S.S. Investments Pvt. Ltd. (1993 (1) Law Weekly 109), there was no averments that the plaintiff was in possession pursuant to the agreement. The only injunction granted by the trial court was restraining the defendant from alienating the property in any manner. It was that order which was challenged before the Bench and the Bench went on to consider the rights of parties under Section 53-A of the Transfer of Property Act. With all respect to the Bench, we are of the opinion that the entire discussion was unnecessary and the observations are obiter.7. The question whether a plaintiff in a suit for specific performance can claim relief of injunction during the pendency of the suit on the basis of his possession, has been considered by this Court in Munuswamy Gounder v. Erusa Gounder (1974(I) M.L.J 499), it was held that the plaintiff could, in such cases, ask for protection of the right envisaged by Section 53-A of the Transfer of Property Act as a shield by debarring, in other words, by getting an injunction against the defendant the transferor and those claiming under him, from interfering with his possession. The same view was expressed by a single Judge earlier in Mahalingam v. Ayyathurai (1972 (I) M.L.J 9). The judgment of the Division Bench in Krishnamoorthy v. Paramasiva (AIR 1981 Madras 310) was dissented from by a single Judge of the Bombay High Court in Venkat Dharmaji v. Vishwanath (AIR 1983 Bombay 413). One of us had occasion to consider the two judgments of the Division Bench in Krishnamoorthy's Case (AIR 1981 Madras 310) and Munusamy Gounder v. Erusa Gounder (1974 (1) M.L.J. 499) and point out that the observations in Krishnamoorthy's case were obiter and the law laid down in Munusamy's case would hold good. That is rendered in Mohamed Ali others v. Nagaraja Mannair (1988 (1) Law Weekly 563). The Division Bench which decided Parameswari v. S.S. Jnvestments Private Ltd. (1993 (1) Law Weekly 109) had occasion to consider the question once again in detail in Padmanabhan V.A. v. M.A. Narasimhan (1993 (1) Law Weekly 169). After referring to the earlier judgments on this question, the Bench said, "16. What has been culled out by us leaves no manner of doubt that possession in part performance of a contract is a right falling under Section 53-A of the Act and the transferee in possession of the property in part performance of the contract can defend his possession in case there is any attempt by the transferor or any person claiming through him to dispossess him. That the transferee can do either as plaintiff or a defendant. Ordinarily, the issue as to possession or any other right under Section 53-A of the Act shall be consequential or a dependent issue upon the issue of the existence of the contract itself and with a decree for the enforcement of the contract, there can be an order for maintaining the possession of the agreement holder/transferee. In considering, however, whether injunction should be granted on the plea of possession and the allegation of threat of dispossession to a person holding the agreement for sale, the rule will be as one reiterated almost in every case that to plaintiff claiming only an equitable right the court would not ordinarily grant temporary injunction pending the suit on the basis of Section 53-A of the Act, as mere possession of the plaintiff of the suit property on the date of the suit cannot be taken to enable him to obtain injunction from the Court. The passive equity as provided under Section 53-A of the Act shall be available as shield against any interference by the defendant who is either the transferor himself or any other person claiming through the transferor but would not become active equity without there being something more. The doctrine of lis pendens as enunciated in Section 52 of the Act and similar other doctrines will take care of all pendents lite transfers. But there may be exceptional cases where the other rules of equity as are noticed in the cardinal principles for grant of injunction will intervene and injunction may be the proper and equitable order. The Bench decision of this Court in the case of T. Parameshwari v. S.S. Investments Private Ltd (1993(1) Law Weekly 109) which has been affirmed by the Supreme Court in S.L.P. Nos. 17926 & 17927/91, has clearly said that no one can question the jurisdiction of the Court to grant temporary injunction even in a suit for specific performance of a contract for sale. But while applying to exercise the discretion it would necessarily take the Court to the various provisions governing the suit for specific performance of a contract for sale of immovable property as well as other equitable doctrines."
For the purpose of this case, it is not necessary for us to discuss whether the propostion laid down by the Division Bench in that case is fully in accord with law we prefer, on the facts of this case, to apply the principle laid down by the Division Bench in that case. In the passage extracted above, the Division Bench has laid down two propositions, 1) a transferee can get relief either as a plaintiff or a defendant under Section 53-A of T.P. Act and 2) the passive equity as provided under Section 53-A of the Transfer of Property Act shall be available as a shield against any interference by the defendant, who is either the transferor himself or any other person claiming through the transferor, but would not become active equity without there being something more.
8. On the facts of this case, we find there is much more than something which will entitle the plaintiffs to get an interim relief during the pendency of the suit for specific performance. We have already pointed out that the plaintiffs have suffered detriment by erecting a compound wall around the entire property of 7.37 acres including the disputed property and that they have constructed the temple on their land, which they would not have done but for the agreement as stated in the plaint. They are also in possession of the land and therefore in this case, the plaintiffs will be entitled to have the relief of temporary injunction during the pendency of the suit even on the basis of the principles laid down by the Division Bench in the case (Padmanabhan v. Ma Narasimhan (1993 (1) Law Weekly 169).
9. Learned counsel for the appellants points out that it is only the transferor who can apply under Section 230-A of the Income Tax Act for a Clearance Certificate and places reliance on Srimathi India v. I.T.O. (Vol.150 Income Tax Reports 351) and Smt. Fouzia Shahi Nazeer v. B.K. Lingappa (Vol 182 Income Tax Reports 342). He has also contended that the draft sale deed, which was filed by the defendant along with the application for clearance certificate before the Income Tax Officer, would constitute a contract in writing as contemplated by Section 53-A of the Transfer of Property Act. In support of that proposition, learned counsel places reliance Manekial v. H.J. Ginwallia & Sons (AIR 1959 Supreme Court 1), Karthikeya v. Singaram (1956 (1) M.L.J 77) and A. Glangadhara Rao v. G. Gangarao (AIR 1968 Andhra Pradesh 291). In our opinion, it is not necessary to consider either of the propositions for the purpose of these appeals. Hence, we are not considering the authorities cited by learned counsel for the appellants in that regard:
10. Learned counsel for the defendant submits that the plaintiffs have not made out a prima fades case of possession. We are unable to accept this contention. It is then contended that the plaintiffs have not given the details as to how consideration was offered or tendered by the plaintiffs to the defendant at any time. The relevant passages in the plaint and the affidavit are read out and it is submitted that under the agreement, the plaintiff is bound to give the sale consideration only at the time of execution of the sale deed as per the plaintiffs' case and no occasion for the plaintiffs to tender the amount earlier even before the execution of the sale deed. There is no merit in this contention. Just because the parties had agreed that the consideration shall be paid a the time of execution of the sale deed, it does not prevent the purchaser from tendering the amount earlier and requesting the vendor to execute the sale deed immediately.
11. It is next contended that merely making an averment that the plaintiffs are ready and willing to perform their part of the contract as required by Section 16(c) of the Specific Relief Act and prescribed in Forms 47 and 48 in Appendix A to the Code of Civil Procedure, will not help the plaintiffs to prove that they are ready and willing to perform their part of the contract as they have not given any details of the alleged tender. There is no merit in this contention as the plaintiffs would be able to prove the same by adducing evidence at the time of trial. The requirement in law at this stage is only to make an averment in the plaint that the plaintiffs are always ready and willing to perform their part of the contract. The question of proof comes at the trial.
12. It is next contended that the draft sale deed filed by the defendant along with the application for Clearance Certificate will not fall within the scope of Section 53-A of the Transfer of Property Act. As we have not taken into account the contention of leaned counsel for the plaintiffs, it is not necessary for us to consider this contention of the defendant also. However, we must point that the Clearance Certificate which has been issued by the Income Tax Officer on 30.8.1991 is in the prescribed Form No. 34-A. The relevant columns in the clearance certificate clearly show that the applicant intended to executed a sale deed conveying an absolute ownership in favour of the plaintiffs for a consideration of Rs. 9,75,000. The description of the property is also referred to as in the Schedule to the draft document. At the end of the form, there is a declaration by the applicant that to the best of his knowledge and belief, the information furnished therein is correct. Suffice it to point out that the essential terms of the contract as alleged by the plaintiffs are admitted in the said application for issue of Income Tax Clearance Certificate.
13. Hence, we hold that the plaintiffs have proved their possession of the disputed property. Consequently, they are entitled to protect the same till the disposal of the suit. The balance of convenience is undoubtedly in favour of the plaintiffs as they are having their building materials and their men, who are also in occupation of the disputed property.
14. Therefore, there will be an injunction restraining the defendant from inter-fering with the possession of the plaintiffs. If the defendant proceeds to alienate the property in any manner during the pendency of the suit, that will give rise to unnecessary complications and third party's right will intervene. Hence, this is a fit case in which an injunction restraining the defendant from alienating the suit property in any manner during pendency of suit, should also issue. The defendant not being in possession is not entitled to erect any construction on the disputed property. In the circumstances, there should be an injunction restraining the defendant from putting up any construction on the disputed property till the disposal of the suit. In the interest of justice, equally, the plaintiffs are also not entitled to raise any construction on the disputed property till the disposal of the suit.
15. In the result, the appeals are allowed. O.A. Nos. 53,54 and 55 1994 are ordered as prayed for. There will also be an injunction in O.A.No. 53/94 restraining the plaintiffs and their men from putting up any further construction on the disputed property till the disposal of the suit. We have already referred to the fact that there are two huts on the disputed property. It will not be disposal till the disposal of the suit. Application No. 3332 of 1994 is dismissed. There will be no order as to costs.