Madras High Court
Smt. Sushila vs Nihalchand Nahata on 17 June, 2003
Equivalent citations: AIR2004MAD18, AIR 2004 MADRAS 18
Author: A.K. Rajan
Bench: A.K. Rajan
JUDGMENT A.K. Rajan, J.
1. This suit for specific performance was filed originally against one defendant. Since he died pending suit, his legal representatives were added as defendants-1 to 4.
2. The plaint averments are as follows :
The plaintiff intended to start an Educational Society with various teaching institutions; she was in search of suitable extent of vacant land to start the institution. While so. the original defendant represented to her that he is the sole and absolute owner of the suit property, having purchased the property in public auction held by Murrey and Company on 12-11-1975, under a registered sale deed; he further represented that a portion of the said property together with the bungalow and the appurtenant land was already sold to one Saraswathy Kailasam under a registered deed of sale, dated 29-3-1984 and the balance of the land to the extent of 9 acres 50 cents were available and it was free from all encumbrances and he was ready and willing to sell the land for a sum of Rs. 15 lakhs; the plaintiff agreed to purchase the same, subject to the approval of title and some other conditions. Accordingly, the plaintiff entered into an agreement for sale with the original defendant, represented by his Power of Attorney, on 4-11-1985 at Madras; on 17-3-1985, a sum of Rs. one lakh was already paid as advance and the defendant further received another sum of Rs. 4 lakhs on 18-6-1985 amounting to a total advance of Rs. 5 lakhs; the original defendant acknowledged the receipt of the same in the agreement. The original defendant agreed to obtain exemption for the transfer of property, in favour of the plaintiff from the Urban Land Ceiling Authority and also necessary Income-tax Clearance Certificate. The defendant agreed to sign and give necessary documents to enable the plaintiff to make applications to the Urban Land Ceiling Authority to obtain necessary exemption certificate and to obtain and produce the necessary income-tax clearance certificate; he also agreed to make available all the title deeds for scrutiny and investigation of the title of the defendant by the counsel for the plaintiff. The plaintiff agreed that in the event of sale transaction being completed, she should obtain vacant possession from the Madras Race Club, an occupier in respect of a portion of the property. Subject to all the above conditions, the parties agreed that the sale transaction shall be completed within six months. The plaintiff had been requesting the defendant to sign and present necessary documents for obtaining permission from the Urban Land Ceiling Authority and from the Income-tax Department. The defendant was lethargic and was postponing to comply with the request of the plaintiff. The plaintiff was all along ready and willing and continued to be ready and willing to pay the balance of the sale price to the defendant and complete the sale transaction in her favour, provided the defendant complies with the condition of the agreement. Though the defendant informed the plaintiff that he was taking steps to get necessary Income-tax Clearance Certificate from the authorities, no such certificate was either obtained or furnished to the plaintiff. The plaintiff requested the defendant several times to obtain such certificate. The plaintiff also requested the defendant to file an application for obtaining clearance certificate from the Land Ceiling Authority. But the defendant did not co-operate with the plaintiff; though the plaintiff furnished some of the original title deeds relating to the property, the defendant did not take steps. Therefore, the defendant clearly committed default of the agreement; the plaintiff made a demand on the defendant to complete the sale transaction; hence, the suit is filed praying for a direction to the defendant to execute the sale deed conveying the suit property in favour of the plaintiff after receiving the balance of sale consideration of Rs. 10 lakhs and also to give possession of the suit property to the defendant together with costs.
3. The Power of Attorney Agent of the original defendant has filed the written statement as follows : An agreement was entered into between the plaintiff and the original defendant, represented by his Power of Attorney Agent. The suit ought to have been instituted only against the disclosed principal and not against the principal represented by his Power of Attorney Agent; leave to sue is necessary. The disclosed principal ordinarily resides outside the jurisdiction of this Court; but, no leave has been obtained. The suit is barred by limitation. Suit is undervalued for the purpose of Court-fees. The defendant is the owner of the property; a portion of which was sold on 29-3-1984; the balance of 9 acres and 50 cents are with the original defendant. The original defendant entered into an agreement for sale with the plaintiff, on 4-11-1985, in respect of the remaining portion of the property; it contains reciprocal promises, as follows : (a) the plaintiff should get exemption from the Urban Land Ceiling Authority for transfer of property that was agreed to be conveyed; (b) the plaintiff should pay all arrears of tax payable to the Urban Land Ceiling Authority up to the date of sale of the properties agreed to be conveyed; (c) the plaintiff should get vacant possession of the property from the Madras Race Club who are the tenants in the property. The transaction should be completed within six months. It is further stated that the plaintiff had paid an advance of Rs. one lakh on 17-3-1985 and Rs. 4 lakhs on 18-6-1985. The plaintiff did not take steps to comply with the terms and conditions of the agreement; the plaintiff did not take steps to approach the Urban Land Ceiling Authority for the purpose of obtaining the exemptions necessary for the transfer of the property. The plaintiff did not take any steps even to ascertain the arrears of Urban Land Tax. No draft sale deed was forwarded to enable the defendant to secure necessary certificate under Section 230-A of the Income-tax Act. The plaintiff was indifferent towards his obligations. In the year 1986, the Income-tax Act was amended with the introduction of Chapter XX-C, the plaintiff was informed that the law required a joint application to be made to the competent authority for grant of a "no objection certificate". The plaintiff did not respond. The plaintiff did not disclose any interest in the transaction or to pay the balance of sale consideration of Rs. 10 lakhs. The plaintiff abandoned the agreement. Therefore, the defendant sent a letter on 29-2-1988 Whereby the defendant cancelled the agreement for breach of terms and conditions thereof and non-performance of the obligations; in that letter, the defendant also called upon the plaintiff to return the original sale deeds and other title deeds handed over to the plaintiff; in that letter, it was also stated that the defendant was willing to return the advance of Rs. 5 lakhs received already; it returned undelivered; the defendant came to know that the plaintiff presently residing at Gandhi Nagar, Adyar, Chennai-20. Therefore, the defendant redirected the same letter to the Adyar address of the plaintiff; that cover was returned with an endorsement, "refused". Thereafter, the defendant caused a lawyer's notice to the Adyar address; a cheque for a sum of Rs. 4,50,000/- accompanied the said notice; by this notice, the defendant called upon the plaintiff to return the original documents received by her for security. The plaintiff refused to receive this notice and it was returned "undelivered". On 23-1-1988, the defendant issued a telegraphic notice informing that agreement stood cancelled; by letter dated 4-4-1988, the defendant informed the appropriate authority of the Income-tax Department that the agreement stood cancelled; the defendant caused another notice on 9-4-1988 enclosing a cheque for Rs. 4.50 lakhs and also a copy of letter dated 29-2-1988; that notice was sent by recorded delivery. The plaintiff had been all along evading the service of various notices issued; the plaintiff never expressed her willingness and never called upon the plaintiff orally or in writing between 1985 and 1988. The plaintiff was never ready and willing to complete the transaction. The plaintiff did not have the finance to complete the transaction and was not in a frame of mind to do the needful for completing the transaction due to the health condition of her son. The plaintiff entered upon the agreement for speculative purposes and the completion of the transaction was never her intention. The agreement is hit by Tamil Nadu Urban Land Ceiling Act. Hence, the agreement is ab initio void and opposed to public policy. The plaintiff never requested the defendant orally or in writing to sign or present any paper for obtaining permission from the Urban Land Ceiling Authority or Income-tax Authority. The defendant was never called upon to complete the transaction or even assist in taking necessary steps in that direction. The period of 6 months provided in the agreement was the essence of the transaction. The plaintiff was offered the land on concessional rates only on her assurance that the transaction would be completed and the total consideration payable made to the defendant within six months. There is no society by name, "Guindy Educational Society" nor any company under the name, "Brooklands Motels and Hospitals Private Limited" of which organisations, the plaintiff has purported to describe herself as a Director in the agreement for sale. The defendant caused lawyer's notice on 27-5-1990 to the plaintiff informing that the agreement was invalid in law being vitiated by misrepresentation apart from having become unenforceable by reason of various defaults. Even by this notice, the plaintiff was informed that the defendant was ready and willing to refund the advance paid by the plaintiff on return of the original documents. The defendant received a letter on 2-6-1990 from the plaintiff dated as 25-5-1990 (posted on 31-5-1990) as a counter-blast to the defendant's notice dated 27-5-1990. Only from this letter, the defendant came to know that the plaintiff had instituted the above suit. The summons in this suit had not been served on the defendant. The defendant is coming forward to file this written statement in the interest of an early disposal of this mala fide, vexatious and speculative suit. The plaintiff did not take any steps to complete the transaction. The defendant intimated the plaintiff of the termination of the agreement and suo motu took the necessary steps for exempting the land under the provisions of the Urban Land Ceiling Act. As a result of the exertions of the defendant, orders have been passed in January, 1989 exempting a portion of the land. Orders have been passed declaring a major portion of the land as excess and the said excess lands have vested in the Government of Tamil Nadu. The plaintiff who had abandoned her obligations under the agreement has instituted the present suit speculatively in an attempt to gain the benefit of the defendant's efforts in getting a portion of the land exempted from the provisions of the Land Ceiling Act. The entire property has been valued for the purpose of Wealth Tax by the concerned Department at Rs. 86 lakhs, by order dated 20-5-1991. The speculative intentions of the plaintiff who has come forward with this suit without either complying with the obligations on her part are evident from the circumstance that the plaintiff has sought to take advantage of the appreciation in value of the land through no effort of hers. The agreement has become unenforceable and incapable of performance. The defendant is ready to return the advance of Rs. 5 lakhs. The defendant is entitled to appropriate the substantial portion of the amount for damages for breach of the agreement and non-performance within the period stated. Therefore, the suit has to be dismissed.
3(a). The defendants did not file any separate written statement.
4. On these pleadings, the following issues are framed :
1. Whether the suit is legally valid and enforceable?
2. Whether the suit as framed and filed is defective since the defendant was described as represented by his Power of Attorney Agent ?
3. Whether the suit is barred by limitation?
4. Whether the suit was under-valued for the purpose of court fee?
5. Whether the plaintiff was ready and willing to perform his part of the contract?
6. To what relief the parties are entitled?
5. (a) Plaintiff has been examined as P.W.1. She has stated that she is a graduate engaged in making designs in sarees. She organizes sales-cum-exhibitions in different cities. She wanted to start an educational society with various teaching institutions to impart education. She was looking for a suitable extent of vacant land to start an institution. At that time, Mr. Ratan Chand, father of Daya Chand, the Power of Attorney Holder of the original defendant contacted her and told that vacant land was available at Velachery; Ratan Chand gave particulars of the lands. Ex.P. 1 is the hand written note given to the plaintiff by Mr. Ratan Chand (marked subject to objection); that the land originally belonged to one Venkata Narayana Rao; since he owed money to Ratan Chand's father, Ratan Chand bought the property for auction for realising his dues; Nihalchand Nahata was the auction purchaser; that his son Daya Chand was the Power of Attorney and he will process the same. The plaintiff met Nihalchand Nahata along with Daya Chand at Ratan Chand's residence. Nihalchand Nahata told the plaintiff (P.W. 1) that she could act on the representation of Daya Chand; that originally a land to the extent of 10 acres 53 cents was available, but a portion of his property was sold to one Saraswathy Kailasam and the balance of an extent of 9 acres 50 cents was available. The lands were in the occupation of the Madras Race Club. Since the race was abolished, the lands were under the control of State Government and that it should be possible to get them cleared by the Government. They quoted the price at Rs. 15 lakhs and the plaintiff agreed and paid a sum of Rs. 1 lakh as advance through cheque. On 18-6-1985, the defendant wanted a further sum of Rs. 4 lakhs which was paid. It was represented to her that they were going ahead for getting clearance from the appropriate authority. At that time, they also told her that they will given necessary documents to enable her to make applications to Urban Land Ceiling Authority for exemption and gave the original documents of title in October, 1985. Some other documents relating to the property were also given to her. Without perusing the documents, the plaintiffs counsel told the plaintiff that the transaction could not be put through, unless the exemption under the Urban Land Ceiling Act was obtained. When this was informed to Daya Chand, he told that there was no difficulty and therefore, they wanted the plaintiff to go ahead with the agreement. They also gave a copy of the sale deed, Ex. P. 3 executed in favour of Somaiahjulu on 30-9-1981. Chitra Savansukka, wife of Daya Chand that also told there would not be any problem; but her counsel advised her against going ahead with the sale transaction without getting exemption from the Urban Land Ceiling Authorities. When it was informed to Daya Chand, he told that they would deal with the matters and that in any event, he would apply for exemption and said that it was possible to get exemption; he gave a copy of the earlier transaction with Saraswathy Kailasam which is marked as Ex. P.4; from this, the plaintiff was convinced that exemption could be obtained. Ex. P. 5 is the agreement entered into by the plaintiff with the defendant; on behalf of Nihal Chand, his Power of Attorney, Daya Chand signed and the payment of Rs. 5 lakhs was also recorded. The transaction was to be completed within six months. This six months' period was fixed to enable the defendant to get Urban Land Celling exemption. It was also agreed that the period could be extended by mutual agreement. Ex. P.6 is the receipt for payment towards registration for allotment of name, Brooklands Motels and Hospitals Private Limited; Ex. P. 7 is the communication from the Registrar of Companies. She wanted to start an educational society under the name and style of Guindy Educational Society and such formation was in the process, she was described in Ex. P.5 as President, Guindy Educational Society. The idea was that the name "Guindy Educational Society" would help in getting exemption fast; since the matter was delayed, she asked the defendant to give the reason for the delay and Daya Chand told her that there were some Court proceedings initiated by a creditor of the original owner; Ex. P.9 is the photostat copy of the various Court proceedings by Vijayaraghavan and others; because of this, there was unavoidable delay. When enquired, Daya Chand told that the dispute would be solved amicably. In the third week of January, 1988, Daya Chand and Ratan Chand approached the plaintiff with a draft proposal; Ex. P. 10 is the draft proposal in Ratan Chand's handwriting on the back of the calendar sheet. As per that, the sale should be completed on or before 31-3-1988 and the plaintiff should give a sum of Rs. 5 lakhs and the balance of Rs. 5 lakhs to be given before 5-3-1988; when this proposal was given to her, the claim of Vijayaraghavan was not settled; there was no going back upon the sale transaction and Vijayaraghavan's claim was the only issue till then; when this proposal was received by her, she told that she was prepared to give the entire sum of Rs. 10 lakhs by a single payment, if they transfer the power of attorney in her favour or in favour of her nominee. Again they met in the second week of February and then they told them that they will have to transfer the irrevocable power of attorney in the name of her cousin, V.R. Jayaraman; they told that they would consult Nihal Chand Nahata. Since she did not get any information from them, she wrote a letter on 20-3-1988 and enquired as to whether they would be able to transfer the power of attorney; Ex. P.11, dated 6-10-1988 is the xerox copy of the letter written to Ratan Chand; after that, she went and met Mrs. Ratan Chand who informed that her husband and son had gone to Rajasthan to meet Nihal Chand Nahatha who was unwell. Then, she wrote Ex. P. 12 letter; since she did not get any response, she filed the suit at the end of 1989. She came to know that Daya Chand entered into an agreement for the sale of the property at Rs. 40 lakhs with City Township Enterprise; Daya Chand had applied for necessary exemption from the Urban Land Ceiling Authority and that he had obtained the said exemption; Ex. P. 13 is the xerox copy of G.O.Ms. No. 829, dated 17-8-1989 under which exemption was granted. Subsequently, she also came to know that even prior to the agreement, the defendant has entered into an agreement with one Ram Kumar of Sullivan Garden, Mylapore for a sum of Rs. 10.5 lakhs; after filing the suit, she came to know that Vijayaraghavan won his claim over a sizable portion of the suit property in the year 2000 and he has given the suit property for development to S.I. property; her father-in-law was a well-known agriculturist, financier and builder in Arant Taluk, North Arcot District; her in-laws are having a network of business in Kancheepuram, Arakkonam and Chengalpattu areas; her late brother-in-law Kannan was the President of Chambers of Commerce at Kancheepuram till his demise; her in-laws had a turn-over around Rs. 10 crores in 1980's and presently the turn-over would be around Rs. 20 crores; they also have various agencies numbering 13 or 14; they also have business in silk under the name, "Vishnu Silks and Creations"; they also contacted Subha Jayam Chits and Finances. Since the businesses are joint family businesses, her husband also has a share; they have vast agricultural holdings. The Income-tax Department had raised certain demands which she is contesting. Ex.P. 14 is the summons issued by the Income-tax Department. During the relevant period, raising of a sum of Rs. 10 lakhs by her was not at all a big issue. Right from the date of agreement, she was ready and willing to conclude her part of the contract.
(b) In the cross-examination, she has stated that she was involved in the family business ever since 1970. Ex.P. 1 was handed over to her by Ratan Chand; hence, she presumed that Ex.P. 1 was his hand writing; when both Daya Chand and Ratan Chand came to her, she came to know about the extent of the lands available; she was not an income-tax assessee; she has been assessed to an income of Rs. 1,16,92,405/-in respect of the assessment year 1985-86 upto 1993-95 and she is contesting the same; on her objection, the Income-tax Department reduced her assessable income to Rs. 32,80,000/- and odd, subsequent to the filing of the suit and even this she is contesting; there is a suit filed by the Indian Bank for a sum of Rs, 5 crores and odd against her husband. In Ex. P.5, she has agreed to obtain exemption from the Urban Land Ceiling Authority in respect of the suit property. It is also stated that she should get exemption from the Urban Land Ceiling Authority. In Ex. P.5, she agreed to take steps to recover possession from Madras Race Club; she does not have the certificate for commencement of the business; she does not have any document to show that she applied for exemption or took steps to recover possession from the Madras Race Club; she did not pay the Urban Land Tax as per the Clauses 4 and 5; that has to be paid only at the time of sale transaction; a draft sale deed was not prepared by her for getting permission under Section 230-A of the Income Tax Act; she did not refuse to receive any letters from the defendant; she always had the means to complete the transaction; further, she has stated in the re-examination that the defendant did not furnish any application, in order to enable them to obtain exemption from the Urban Land Tax Authority, as stipulated under Ex. P.5; the dispute that she has raised with the income tax authorities was that the income earned by her was from agricultural holdings and hence she was not liable to pay the income tax.
(c) Daya Chand has been examined as D.W. 1; he has stated in his evidence that he is the power of attorney of the original defendant Nihal Chand Nahata; since he died on 28-6-1998, his legal heirs were brought on record as defendants-1 to 4; Ex. P.5 agreement was signed by him on behalf of Nihal Chand Nahata; in that agreement, it was agreed that the plaintiff should get the exemption from the Urban Land Ceiling Authority and she should pay the arrears of Urban Land Tax and also she should get possession from the Madras Race Club; that the transaction should be completed within six months; it was also agreed that the period could be extended; the relevant title deeds of the property were given to her as security; the suit land was not available as the entire land is vested in the Government because of the Urban Land Ceiling Act; subsequently, he filed a petition for exemption towards family entitlement and got back about 50 grounds of lands; at the time of filing of the present suit, entire suit lands were vested with the Government; at no point of time, the plaintiff took steps to get exemption from the Urban Land Ceiling Authorities; the plaintiff never approached him for signature in any relevant papers; she was not keen on purchasing the suit properties and did not have sufficient funds to complete the transaction; after the expiry of six months, he contacted the plaintiff and tried to persuade her to complete the transaction; he wrote a letter Ex. D.2 in February, 1988 cancelling the agreement; plaintiff refused to receive the letter; Ex. D.3 is the returned cover; in the end of March, 1988, he wrote another letter informing about the earlier letter and also including a cheque for Rs. 4,50,000/-; Ex.D.4 is the office copy of the above letter dated 21-3-1988 along with the postal receipt thereof; he retained Rs. 50,000/- due to his wife payable by the plaintiffs husband; Ex.D.4 was not received by the plaintiff, Ex.D.5 is the returned cover; thereafter, he sent a telegram Ex. D.6 informing the cancellation of the agreement; he also sent a letter dated 9-4-1988 along with a cheque for a sum of Rs. 4,50,000/-; Ex.D.7 is the letter sent by recorded delivery; on 27-5-1990, he wrote another letter intimating about the earlier letter and asking for the return of the original sale deed; Ex.D. 11 is the letter written by the plaintiff which was received by him in June, 1990; in that letter, the plaintiff had informed that the suit has been filed for specific performance; he wrote a letter to the Income-tax Department on 4-4-1988 informing about the cancellation of the agreement; Ex. D. 16 is the Tamil Nadu Government Gazette declaring the suit land as excess vacant land; Ex.D. 17 is the order dated 6-1-1989 issued by the competent authorities exempting 50 grounds from the Urban Land Ceiling; Ex.D. 18 is the letter granting exemption; the plaintiff was not ready and willing to perform her part of contract; therefore, the suit is liable to be dismissed.
(d) In the cross-examination, D.W. 1 has stated that Nihal Chand Nahata purchased the suit property through Court auction; his father executed the sale deed in favour of Nihal Chand Nahata; his father is residing with him in the same house; no portion of the suit property has been sold to anybody; he came to know about the plaintiff few months prior to the agreement; some amount was received from the plaintiff prior to the agreement Ex.P.5 and it is mentioned in the agreement; on the date of Ex.P.5, an agreement was already entered into by Nihal Chand Nahata with one Chitra Savan Sukha and the plaintiff is the nominee of Chitra Savan Sukha; but, it is not mentioned in Ex. P.5; in the normal course, an agreement-holder cannot take possession of a property from a tenant before becoming the owner of the property; as per Clause 5 of Ex,P.5, the plaintiff can get attornment of tenancy from the Madras Race Club; he did not remember whether he received any demand of Urban Land Tax subsequent to Ex.P. 5; it is correct to state that the question of payment of Urban Land Tax by the plaintiff would arise only after execution of the sale deed; but the understanding was that the plaintiff must pay arrears of Urban Land Tax prior to the execution of the sale deed; he did not write any letter asking the plaintiff to pay the Urban Land Tax arrears; it is his responsibility to obtain income-tax clearance certificate under Section 230-A of the Income Tax Act; but, he did not apply for clearance certificate, because the question does not arise; permission of the income-tax department has to be obtained since the transaction is for more than Rs. 10 lakhs; he sent Ex. D.3 letter to Arani address; Ex.P.17 is the certified copy of the order passed in W.P. 14636 of 1989 filed by the plaintiff in which he was the second respondent; by that, the plaintiff was permitted to make representation to the Government in respect of the suit land; he did not know about the income earned by the plaintiff and the business carried out by her; after 1988, he entered into an agreement with third parties in respect of the exempted land in 1995; he admitted that he is still having the advance of Rs. 5 lakhs paid by the plaintiff.
5(a). From the pleadings and the evidence adduced by the parties, the admitted facts are as follows :--
(i) The original defendant was the owner of the suit property and DW 1 has obtained irrevocable power of attorney from the original defendant.
(ii) The original defendant through D.W. 1 entered into an agreement with the plaintiff and executed Ex.P.5.
(iii) The sale price for the suit property was fixed at Rs. 15 lakhs.
(iv) Plaintiff had paid Rs. 5 lakhs on the date of Ex.P.5 and that amount is still with the defendants.
6. Issue No. 3 : The learned counsel for the defendants submitted that the suit is barred by limitation and hence, the plaintiff is not entitled for a decree for specific performance. He contended that according to the agreement Ex.P.5, the transaction should have been completed within six months from 4-11-1985, that is, the transaction should have been completed on or before 4-5-1986. This suit has been filed long afterwards and therefore, the suit is barred by limitation and hence it is bad on the ground of delay alone. In support of his contention, the learned counsel for the defendant relied upon the judgment of this Court in Vasantha v. Senguttuvan, (1997) 2 Mad LJ 576 and the judgment of the Division Bench of this Court in The Kancheepuram Kamakshi Ammal Silk Handloom Weavers' Co-operative Production and Sale Society Limited, (1993) 1 Mad LJ 618, where this Court has held that a suit for specific performance of agreement is liable to be dismissed, when unexplained silence and wanton delay in approaching the Court is proved. The Court in that case held that the plaintiff should have proceeded to enforce the specific performance without any delay; when they waited for more than one year to file a suit, in the absence of any explanation, it can be inferred that the party has waived his right and abandoned his right. The learned counsel also relied upon another decision of the Supreme Court in Veerayee Ammal v. Seeni Ammal, wherein the Supreme Court has held that where a person seeking specific enforcement of an agreement for sale of immovable property must approach the Court within reasonable time, even if time is not the essence of contract, and reasonable time means, as soon as the circumstances permit. Since the plaintiff has not approached the Court within a reasonable time, (as per the Supreme Court), the suit has been belatedly filed and hence the suit is not maintainable and liable to be dismissed.
7. The counsel for the plaintiff submitted that the agreement is dated 4th November, 1985; the suit has been filed on 3rd November, 1988; therefore, it has been filed within the period of limitation. Hence, the counsel submitted, there is no delay in filing the suit for specific performance. In support of his arguments, he relied upon a judgment of this Court in V.M. Srinivasan v. Appa Rao, 1972 TNLJ 6, wherein a Division Bench of this Court has held that, "Mere delay will not preclude the plaintiff from obtaining specific performance if the suit is otherwise in time."
He also relied upon a judgment of the Supreme Court in Motilal Jain v. Ramdasi Devi, , wherein the Supreme Court has held that the following aspects of delay are relevant in a case of specific performance of contract for sale of immovable property :--
(1) Delay running beyond the period prescribed under the Limitation Act;
(2) Delay in cases where though the suits are within the period of limitation, yet,
(a) due to delay the third parties have acquired rights in the subject matter of suit;
(b) in the facts and circumstances of the case, delay may give rise to plea of waiver or otherwise it will be inequitable to grant a discretionary relief.
In this case, the counsel for the plaintiff submitted, that inasmuch as the suit has been filed within the period of limitation prescribed under the law, it cannot be said that the plaintiff has not approached the Court within reasonable time. Further, before filing the suit, no third party acquired any right and hence, no third party right is involved; the plaintiff has not waived her right. Therefore, the plaintiff is entitled for the decree, as prayed for.
8. From the above decisions of the Supreme Court and the decision of this Court, on the facts of this case, it cannot be said there is a delay in filing of the suit. The period of limitation as prescribed in the Limitation Act is three years to enforce the contract for specific performance. This suit has been filed within three years from the date of agreement Ex.P.5. Further, no third party has acquired any right over the property before filing of the suit; there is not even a pleading by the defendant that the plaintiff has waived her right. On the other hand, the plaintiff filed W.P. 14636 of 1989 in this Court and obtained orders to make representation before the Urban Land Ceiling Authorities. That proves that the plaintiff never waived her right in the suit property. Therefore, this suit is not barred by limitation or bad for delay in filing the suit; therefore, there is no delay in filing the suit. Issue No. 3 is answered in favour of the plaintiff.
9. Issue No. 1. Learned counsel for the defendant submitted that the agreement for sale is with respect to the land which were above the ceiling limit under Urban Land Ceiling Act; any transaction with respect to excess lands is invalid and hence unenforceable. Therefore, the agreement itself is illegal and hence cannot be enforced by a suit for specific performance. In support of his contention, he relied upon the decision of a Full Bench of this Court in Gopirathnam v. Ferrodous Estate (Pvt.) Ltd., , where this Court held, as follows :--
"(25)................"Section 6 prohibits transfer by a person holding land in excess of ceiling limits. The matter will have to be considered taking into consideration the rights of seller and if that person holds more land than prescribed under Section 5, such transfer shall be deemed to be null and void. The prohibition under Section 6 is for transferring the land and consequently declares that any violation of law shall be deemed to be null and void. Section 6 contemplate both proposed transfer and completed transfer. An (sic) is also affected by Section 6 of the Act.
(26) While considering Public Policy, we have to consider that the bar contained in Section 6 of the Urban Land Ceiling Act operates from the date of commencement of the Act in the case of persons holding urban vacant land in excess of the ceiling limits till that excess is determined and the order of such determination is published in the Gazette. The effect of publication of the excess vacant land is to vest the land in the State Government, thereby leaving the owner of the excess land out of title and thereafter he will not have any right to transfer it. Hence, the bar is limited to the period from the date of commencement of the Urban Land Ceiling Act till the date of publication in the Gazette of the order under Section 11 of the Urban Land Ceiling Act determining the excess land. The effect of the same will be asking a person to execute sale deed, who is having no title."
42. ..............We also hold that Section 6 of the Act not only prohibits a completed transfer, but also a proposed transfer."
He also referred to another judgment of the Division Bench of this Court in Garuda Chit and Trading Company Private Limited v. Coramandel Indag Products Private Limited, (2003) 1 Mad LW 696, wherein it was held as follows :--
"41. From the above decision, it is clear that even if any agreement had been entered into in respect of the sale of the property prior to the Act came into force, the agreement would become null and void and that cannot be enforced. When that be the case, in this case, the agreement itself is subsequent to the Tamil Nadu Urban Land (Ceiling and Regulation) Act came into force and the specific prohibition of alienation is contemplated under Section 6 of the said Act. When that be so, the agreement itself is null and void, as the same is contrary to the enactment prohibiting such alienation. When the agreement is null and void, the suit is not maintainable and consequently, the suit is liable to be dismissed."
Therefore, the counsel for the defendants contended that the agreement itself is void ab initio and hence not enforceable by a suit for specific performance.
10. Learned counsel appearing for the plaintiff submitted that this agreement itself is for sale of the land, only after getting exemption from the appropriate authorities under the Urban Land Celling Act; therefore, the decisions relied upon by the counsel for the defendants are not applicable to the facts of this case. He further contended that the agreement for sale of the excess land under the Urban Land Ceiling Act after getting exemption provided under the Act is not invalid. In support of this contention, he relied upon the judgment of the Supreme Court in Indra Prasad Saxena v. Chaman Lal Malik, where in the head note it is stated that for the transfer of vacant land by intending transferor seeking previous permission of the competent authority, notice to the authority is necessary; non-obtaining of such permission does not oust the jurisdiction of the Court to pass a decree for specific performance; Court can impose condition directing compliance with requirements of notice before execution of sale. From this, the counsel submitted, it is clear that an agreement to sell the land in excess of Urban Land Celling limit can be enforced by specific performance. The counsel also referred to another judgment of the Supreme Court in Ramjibhai v. J, Narottamdas, AIR 1986 SC 1912, where the agreement stipulated that vendor has to apply for permission from the Collector and the sale deed was to be executed after getting such permission; such a contract was held not contingent, but specifically enforceable, a suit filed three years after obtaining permission is not barred by limitation. Therefore, the counsel for the plaintiff contended that under Ex.P. 5, the parties agreed to complete the transaction only after getting exemption under the Urban Land Ceiling Act; therefore that agreement is specifically enforceable; a suit can be filed within three years after getting such exemption from the competent authorities; the agreement is not contrary to law, nor void ab initio; the suit is maintainable and the plaintiff is entitled for the decree, as prayed for.
11. With respect to the ratio laid down in the decision of the Full Bench of this Court, , cited supra and the decision of the Division Bench of this Court, (2003) 1 Mad LW 696, cited supra. there cannot be any dispute. The ratio decidendi in both the decisions is that any transfer by a person holding land in excess of ceiling limit is invalid. Even proposed transfers of excess land is invalid. The agreement for sale of excess land also is null and void and therefore, no suit for specific performance would lie to enforce an agreement for sale of "excess land". That is, what is prohibited or what is illegal and hence null and void is, an agreement to sell any "ex cess land" under the Urban Land Ceiling Act. If the agreement is with respect to the "ex empted" land or with reference to the land that is likely to be exempted, such an agreement is not invalid; such agreements are valid and enforceable by a suit for specific performance.
12. Learned counsel for the plaintiff submitted that the agreement itself is only for sale of the land after getting exemption from the appropriate authorities. The terms of the agreement make it clear that the parties never intended to sell or purchase the land in possession of the defendant in excess of ceiling limit, unless exemption is granted by the authorities. Therefore, the agreement is not in contravention of the provisions of the Urban Land Ceiling Act. Therefore, the decisions relied upon by the counsel for the defendant is not applicable to the facts of this case. There is no intention among the parties to violate the provisions of the Urban Land Ceiling Act. Therefore, the agreement is valid and can be specifically enforced.
13. This argument of the counsel for the plaintiff is acceptable. The decisions relied upon by the counsel for the defendant are with respect to agreements of intended transaction of excess land, whereas this agreement Ex.P.5 had been entered specifically to transfer the land only after getting exemption. When the Act itself provides for grant of exemption, any person can reasonably expect that he may get the exemption, as provided under the Act. When it is possible and permissible for the authorities to grant exemption under the Urban Land Ceiling Act, nothing prohibits a person from entering into a contract for sale of such land after getting exemption. Such an agreement is not intended to violate the provisions of the Act. It is only in accordance with the provisions of the Act and therefore, such an agreement cannot be said to be, invalid or void ab initio. Therefore, such an agreement is valid and enforceable in a suit for specific performance of the agreement.
14. A perusal of Ex. P.5 shows that what is agreed by the petitioner is that land shall be sold/purchased after getting exemption from the Urban Land Ceiling Authority. That is, this agreement is not for sale/purchase of the "excess" land under the Land Ceiling Act, but only after getting exemption under the Urban Land Ceiling Act. Nowhere in the agreement it is stated that the parties intended to purchase or sell the land without getting exemption under the Act. Therefore, the judgments relied on by the defendants are not applicable to the facts of the present case and hence, this agreement cannot be said to be invalid as it does not contemplate either parties to act in a manner contrary to the Urban Land Celling Act. Therefore, the agreement is not invalid and hence, it is valid and enforceable. Issue No. 1 is answered in favour of the plaintiff.
15. Issue No. 2 : Though this issue has been framed, no evidence has been let in by the defendant. The agreement has been executed by D.W. 1 the person who was having irrevocable power of attorney on behalf of the owner of the land Nihal Chand Nahata. The suit has been filed against Nihal Chand Nahata, represented by his Power of Attorney Agent, Daya Chand. D. W. 1 has admitted that he is the Power of Attorney. Ex. P. 4 is the copy of the document, dated 29-3-1984 whereby D.W. 1 had executed a sale deed as a Power of Attorney of Nihal Chand Nahata in favour of the purchasers. From this it is seen that D.W. 1 is the irrevocable Power of Attorney who is legally entitled to represent the land owner Nihal Chand Nahata. Even assuming for the sake of argument, that if there was any defect, when the suit was filed, pending the suit, Nihal Chand Nahata died and his legal representatives have been impleaded as parties. Presently, they are the defendants 1 to 4. Therefore, the suit as framed is not defective. This issue is answered in favour of the plaintiff.
16. Issue No. 4 : Both the parties have admitted that the property was agreed to be sold for Rs. 15 lakhs as specified in the agreement. When the defendant questioned the correctness of the court fee paid, the defendants should have sought for a decision on the point of court fee before the witnesses were examined. No such step was taken by the defendants. Therefore, that question does not require any decision. Further by Ex.P.4, an extent of 23 grounds had been sold on 29-3-1984 by D.W. 1 to Saraswathy Kailasam and others for a consideration of Rs. 3 lakhs; that is 1 1/2 acres of land had been sold in March 1984 for Rs. 3 lakhs; the suit agreement is few months subsequent to Ex.P.4 by which about 9 acres was agreed to be sold for a sum of Rs. 15 lakhs; therefore, the amount specified in the agreement appears to be reasonable and that was the prevailing rate at the time of Ex. P.5 agreement. As admitted by D.W. 1, this price was fixed at the concessional rate in view of the difficulties in transferring the suit lands; therefore, the sale price agreed between the parties on the relevant date cannot be said to be speculative. Therefore, this issue is answered in favour of the plaintiff.
17. Issue Nos. 5 and 6 ; Learned counsel for the plaintiff submitted that the plaintiff was always ready and willing to purchase the property when the exemption is granted and has also paid 1/3 of the sale consideration prior to the date of Ex. P.5 agreement. Only the owner of the property can apply for exemption under the Urban Land Ceiling Act to the authorities concerned. Therefore, the plaintiff could do nothing for getting exemption. If the defendant had signed and given the letter for getting exemption, the plaintiff could have forwarded it and processed it; but such a letter, admittedly was not given by the defendant. Therefore, the plaintiff was not guilty of non-performing of the terms of the agreement. The counsel for the plaintiff further submitted that arrears of Urban Land Tax was to be paid by the plaintiff, as per the agreement. The situation has not arisen for payment of arrears of tax, admittedly, there was no demand notice received by the defendant and was communicated to the plaintiff. The plaintiff is not also guilty of breach of contract in not recovering possession of the property from the tenant, Madras Race Club. Further, it is also agreed that the defendants shall request the tenant to attorn the tenancy in favour of the plaintiff. Once the tenancy has been so attorned, the plaintiff may recover possession from the tenant or allow the tenant to continue in possession and receive the rent periodically; that does not affect the defendant's right. Therefore, the plaintiff is not guilty of breach of her part of the agreement.
17(a). The learned counsel for plaintiff submitted that the next contention of the defendant is that since the property is of value more than Rs. 10 lakhs, the parties must have got the clearance from the Income Tax Department, under Section 230-A of the Income Tax Act; for that, both parties must file a joint draft application. But, such an application cannot be filed before the land was exempted from the Urban Land Ceiling Act; Had such an application been filed before grant of exemption, the sale would be void as it relates to excess land. Therefore, a situation has not arisen for the plaintiff to make joint application to the Income Tax Authorities for clearance. Therefore, the plaintiff has not violated any of the provisions of the agreement. Further, she has paid 1/3 of the amount even prior to the date of Ex.P.5. So far as the balance of Ex. 10 lakhs, the plaintiff was always ready and willing to pay and capable of paying by a single payment. Now the Government has granted exemption only with respect to 50 grounds of lands. Therefore, the defendants are bound to execute the sale deed as the entire sale consideration for that exempted land had already been paid.
18. Learned counsel for the defendants submitted that the Court cannot grant decree of specific performance to the plaintiff, who is not ready and willing to perform essential terms of the contract. The plaintiff failed to perform the terms of the agreement, viz.
a) To get exemption from the Urban Land Ceiling Authority;
b) To pay the arrears of Urban Land Tax over the suit property;
c) To get no objection certificate from the income tax authorities and
d) To take steps to get vacant possession from the Madras Race Club.
Since none of the terms of the agreement has been performed by the plaintiff, the plaintiff is not entitled to the relief of specific performance, as she has failed to perform the essential terms of the contract and hence the plaintiff committed breach of contract. In support of the contention, he relies upon a judgment of the Division Bench of this Court in Arunachala Mudaliar v. Jayalakshmi Ammal, where it was held the Court cannot grant a decree of specific performance to one who is not ready and willing to perform the essential terms of the contract. The counsel also relied upon a judgment in Vasantha v. M. Senguttuvan, (1997) 2 Mad LJ 576, where this Court has held that In a suit for specific performance of sale, the plaintiff must be ready and willing to perform his part of contract continuously up to the date of hearing; even if for a single day, the plaintiff-agreement holder is not ready to take the sale deed, the equitable remedy should not be granted; the readiness and willingness must be continuously from the date of agreement up to the date of hearing. But, in this case, the plaintiff has not proved that she was ready and willing to conclude the contract and therefore, the relief of specific performance cannot be granted.
19. The agreement entered into between the parties is Ex. P.5. The agreement is subject to the following terms and conditions :
"(1) Party of the First Part agrees to sell and party of the Second Part agrees to purchase the said extent of land measuring about 9 acres and 50 cents or thereabouts in Velachery village fully described in the Schedule hereunder for a consideration of Rs. 15,00,000/- (Rupees fifteen lakhs only).
(2) The Party of the First Part acknowledges the receipt Rs. 1,00,000/- (Rupees One lakh only) as advance on 17-3-1985 and another sum of Rs. 4,00,000/- (Rupees Four Lakhs only) on 18-6-1985 amounting to a total of Rs. 5,00,000/- (Rupees Five lakhs only) from the Party of the Second part.
(3) The Parties agree that the Party of the Second Part should get exemption for the transfer of the property to be conveyed from the Urban Land Ceiling Authority and the party of the First Part shall give such authorisation and shall sign such papers that are necessary for this purpose.
(4) The Parties agree that the party of the Second Part should themselves pay all the arrears of tax payable to the Urban Land Tax Authorities up to date of sale in respect of the portion of the land sold to them under this agreement.
(5) The Parties agree that the party of the Second Part should get vacant possession from the Madras Race Club who is tenant of the property sought to be conveyed. The Party of the First Part shall also direct the Madras Race Club to attorn tenancy to the Second Part in the event of completion of the transaction.
(6) The Parties agree that the transaction should be completed within six months from this date.
(7) The Party of the First Part agrees to get the Income-tax clearance (The 230-A Clearance Certificate for selling the property) for the transfer of the property.
(8) The Party of the First part shall make available to the Party of the Second Part all the title deeds for scrutiny and investigation of the title by the Advocate of the Party of the Second Part and also whenever needed for the purpose of getting the Urban Land Ceiling exemption.
(9) The opinion touching the title by the Advocate of the Parry of the Second Part shall be final and binding on both Parties,"
It also affirms that on 17-3-1985, a sum of Rs. 1,00,000/- was received as advance and again on 18-6-1985, Rs. 4,00,000/- was received as advance; Ex.P. 5 was executed on 4th November, 1985. Therefore, much prior to the date of this deed, the parties have entered into an oral agreement; the terms and conditions are reduced into writing under this deed.
20. As extracted above, the plaintiff and the defendant agreed that,
(i) The plaintiff should get exemption from the Urban Land Ceiling authority;
(ii) The plaintiff should pay arrears of Urban Land Tax payable on the land to be sold up to the date of sale;
(iii) The plaintiff must also get vacant possession of the land to be sold from the Madras Race Club (the tenant in the property);
(iv) The defendant shall give such authorisation and sign papers necessary for the purpose of getting exemption of the land from the Urban Land Ceiling Authority;
(v) The defendant shall direct the Madras Race Club to attorn the tenancy to the plaintiff.
(vi) The defendant shall get Income Tax Clearance for the transfer of the property;
(vii) The transaction should be completed within six months from the date of Ex.P.5.
21. The most important condition is that the plaintiff should get exemption for the transfer of the property to be conveyed from the Urban Land Ceiling Authority and the defendant shall give authorisation and shall sign such papers that are necessary for this purpose. For getting exemption from the urban land ceiling, only the owner of the property shall make an application; the intended purchaser cannot make such an application; therefore, not making an application to the Urban Land Ceiling Authority for getting exemption does not amount to breach of any of the conditions of the agreement. In fact, the plaintiff filed W.P. No. 14636 of 1989 and obtained permission of this Court to make representation before the Urban Land Ceiling Authorities. Admittedly, the defendant did not sign necessary papers and give to the plaintiff. Therefore, the plaintiff has not committed breach of this clause of the agreement.
22. The next condition is that the arrears of Urban Land Tax shall be paid by the plaintiff. D.W.1 admits that he has not received any demand notice from the Urban Land Ceiling Authority. D.W. 1 has not stated that he informed the plaintiff of the amount of tax and asked her to pay the same. Therefore, there was no occasion to pay the arrears of Urban Land Tax. Therefore, the plaintiff cannot be said to have violated the conditions of the agreement; even now, the plaintiff could be asked to pay all the arrears of Urban land Tax with respect to the suit property; it is a liability over the property and that can be recovered from the purchaser, the plaintiff herein, when she purchases the property. Therefore, this clause also cannot be said to have been violated by the plaintiff.
23. The next condition of the agreement is that the plaintiff shall get possession of the property from the tenants. Unless the plaintiff becomes the owner of the property, she cannot take any steps to recover possession of the property from the Madras Race Club (the tenant of the property). Therefore, the non-performance of this condition does not affect the rights of the plaintiff, in any manner. It is for the purchaser to get possession of the property. The purchaser may also like to continue the tenancy, in which case, she need not get possession of the property. The defendant will not be prejudiced in any manner, if the plaintiff does not get the possession of the property. Further, there is a clause in the agreement whereby the defendant shall direct the tenant to attorn the tenancy in favour of the plaintiff. Therefore, there is no breach of the terms of the agreement by the plaintiff.
24. On the other hand, the defendant shall give such authorisation and sign papers necessary for getting exemption of the land from Urban Land Ceiling Authority. Admittedly, the defendant had not signed and handed over any such papers to the plaintiff. Instead, the defendant himself submitted necessary papers for getting exemption and also got the exemption. Therefore, the plaintiff is not guilty of breach of this term of the agreement.
25. The other condition is to get clearance from the Income Tax Authorities. An application under Section 230-A of the Income-tax Act cap be made only after the grant of exemption by the Urban Land Celling Authorities. If any application is made before grant of such exemption, that application would be with reference to the excess land under Urban Land Ceiling Act and hence the situation had not arisen to make such an application to Income Tax Department. Therefore, not getting No Objection Certificate, under Section 230-A of the Income-tax Act by the plaintiff does not amount to breach of the terms of the agreement.
26. For the foregoing reasons, it is seen that the plaintiff has not committed breach of any terms of the agreement.
27. Is time the essence of the agreement?
It is true that the agreement provides that the transaction should be completed within six months from the date of agreement. In respect of sale of immovable property, time is not, normally, the essence of contract. In so far as this case on hand is concerned, the parties must get exemption from the Urban Land Ceiling Authorities. No one can predict the time that may take to get an order of exemption from the Government. At times, it may take a few years. Again the parties must get no objection certificate from Income Tax Department. The No Objection Certificate can be applied for only after getting exemption under the Urban Land Ceiling Act. No person can expect that both the acts could be completed within a period of six months. Therefore, in this agreement, time cannot be the essence of the agreement. Hence, the time is not the essence of this agreement.
28. That apart, P.W. 1 has stated, D.W.1's father Ratan Chand met the plaintiff sometime on 3rd January, 1988 and gave Ex.P. 10 proposal written on the back of the calendar sheet; it contains certain proposals. This evidence of P.W. 1 has not been challenged in the cross-examination. Therefore, it is proved that the parties were discussing how to complete the transaction even in the month of January, 1988. Exs. P. 11 and P. 12 are the copies of the letters written by the plaintiff to Ratan Chand during the months of March and October, 1988. With respect to these Exs. P. 11 and P. 12, questions have been put to the witness to the effect that they were not referred to in the plaint and that they were not filed along with the plaint. Apart from this, no other challenge has been made to this witness. Therefore, the evidence of P.W. 1 that these letters were sent to Ratan Chand, father of D.W. 1 who is also residing along with P.W. 1 is proved; that shows that the parties were corresponding with respect to the sale agreement; that is, the plaintiff was corresponding with the defendant even during the month of October, 1988 is proved. Thereafter, on 3-11-1988, the suit had been filed. Therefore, it is proved that the plaintiff was always ready and willing to conclude the contract. The argument that the plaintiff was inactive and did not take any steps is not acceptable and therefore, the plaintiff is not guilty of the breach of contract.
29. The counsel for the defendants contended that on the date when the suit was filed, the suit land already vested in the Government. Therefore, the suit itself is not maintainable and hence, no relief can be granted. Learned counsel relied upon Ex. D. 18, a Government Gazette published on the 23rd August, 1989 wherein the suit land has been notified by the Government as excess land and therefore, the excess lands vested in the Government on the date of this notification. Therefore, the present suit is not maintainable, since the defendants are not the owners subsequent to that date; the suit has to be dismissed on that ground also. A perusal of Ex. D. 18 shows that the vacant lands mentioned therein "are to be acquired by the State Government and that the claims of all persons interested in the lands may be made by them personally or by their agents giving particulars of the nature of the interest in such lands, etc., within 30 days from the date of publication of this notification...................". Therefore, it is only notified that the lands are "to be acquired" and not actually acquired. (The notification only determines the excess lands and also notifies that the lands are to be acquired). Therefore, the property was not divested from the defendant, but the defendant continued to be the owner. In this context, the defendant himself has filed Exs. D.16 to D.19 which relate to the proceedings of the Urban Land Ceiling Authorities. Ex.D.16 is the Gazette Notification dated 27th January, 1988 issued under Sub-section (3) of Section 11. By this notification, the competent authority of Urban Land Ceiling notified that the vacant lands held by Nihal Chand Nahata have been determined as vacant lands held by him in excess of the ceiling limit. The extent referred therein is 4 Hectares, 55 Acres and 95 sq.mtrs. Further, it is stated, the above vacant lands are to be acquired and that the claims of all persons interested in the lands may be made within 30 days from the notification. Ex.D. 17 is the proceedings of the competent authority dated 6-1-1989 by which the excess vacant lands in the holdings of the Urban Land Owner is recalculated and the net excess vacant lands was determined as 27,191 sq.mts. From that proceedings, it is seen that originally the total extent of vacant lands is 42,731 sq.mts.; after the exemption granted under various provisions of the Act, the net excess vacant land was determined as 27,191 sq.mts.; thus, it is seen that an extent of 15,540 sq.mtrs. has been exempted by this proceedings. This has been notified in Tamil Nadu Government Gazette in Ex.D. 18, as stated above. This notification has been issued under Sub-section (1) of Section 11. Thereafter, in Ex.D. 19, the Tamilnadu Government Gazette, dated 16th May, 1990, another notification has been published with respect to the suit properties. This notification has been issued under sub-Section (3) of Section 11 whereby the competent authority of Urban Land Ceiling declared that excess vacant land referred to in the schedule therein deemed to have been acquired by the State Government and that such land shall be deemed to have vested absolutely in the State Government, free from all encumbrances with effect from 23rd August, 1989. Therefore, the notification under Section 11 of the Act referred to in the judgment of the Full Bench of this Court had been issued only on 23rd August, 1989. Therefore, only on this date, the excess lands have been divested from the defendant and had vested in the Government; that too, only the extent of 27191 sq.mts.; the remaining lands were found not excessive. Therefore, the original excess lands as published in Ex.D.16 have been reduced by 15540 sq.mts.; it is exempted under various provisions of the Act; only the extent of these lands was finally notified as excess lands under Sub-section (3) of Section 11 of the Act. Therefore the extent of 15540 sq.mts. which was exempted by land Ceiling Act never vested in the Government. It always continued to be the property of the defendants. Therefore, this argument of the counsel for the defendants has no force.
30. Learned counsel for the plaintiff submitted that the total consideration was Rs. 15 lakhs; Out of that, Rs. 5 lakhs had been paid even prior to the date of Ex.P.5 agreement; the balance of Rs. 10 lakhs, the plaintiff was always ready and willing to pay. P.W. 1 has stated in her evidence that she can pay the amount of Rs. 10 lakhs immediately without any difficulties; the balance of Rs. 10 lakhs is not a big amount for the plaintiff; further, the capacity of the plaintiff to pay Rs. 10 lakhs immediately, has not been challenged at all; therefore, the plaintiff has proved that she was ready and willing to perform her part of the contract. It is only the defendant who wanted to break the contract for which the defendants are not entitled to and therefore, the suit has to be decreed as prayed for.
31. The learned counsel for the defendant submitted that the plaintiff paid only a portion of the amount of the sale consideration and major portion has not been paid. He further contended that in the case K. S. Vidyanadam v. Vairavan, , it was held that an agreement of sale of the house for a consideration of a sum of Rs. 60,000/- was entered into between the parties and the plaintiff advanced Rs. 5,000/- as earnest money; the agreement stipulated a period of six months; the plaintiff purchased the stamp papers and tendered the balance amount and called upon the defendants to execute the sale deed and delivered possession. But the suit was Filed after a lapse of 21/2 years. Under the circumstances, the Supreme Court has held that where an agreement specified a period of six months to purchase the property, the total inaction of 21/2 years after payment of a small amount as earnest money by the plaintiff could be a circumstance which would weigh against exercise of discretion for grant of specific performance of the agreement in favour of the plaintiff. Relying upon this judgment, the counsel for the defendant contended that in this case also the plaintiff has waited or delayed for more than 21/2 years and therefore, the Court shall not exercise its discretion in favour of the plaintiff.
32. It is seen that the agreement Ex. P.5 is for sale of 91/2 acres of land for a total consideration of Rs. 15 lakhs. Even prior to date of agreement (eight months prior to the date of agreement) an advance of Rs. 1 lakh was paid and again a sum of Rs. 4 lakhs was paid. In all, Rs. 5 lakhs was paid by the plaintiff as evidenced from the Ex.P.5 agreement. That is, 1/3 of the total consideration had been paid by the plaintiff, on the date of the agreement, that cannot be said to be a small sum of money paid as earnest money. Further, this transaction can be performed only when exemption is granted under the Urban Land Ceiling Act: that exemption was granted only in August, 1989; only thereafter, the property becomes transferable. From that date onwards, it is not even three months when the suit has been filed. Therefore, it cannot be said that the suit was filed after an inordinate delay.
33. Further, the exemption has been granted not for the entire 91/2 acres and odd, but only with respect to the 50 grounds; that comes to approximately 2.75 acres. Therefore, it is only less than 1/3 of the original extent of land, agreed to be sold for Rs. 15 lakhs. The plaintiff has already paid Rs. 5 lakhs. That is, the sale consideration for the 1/3 of the property had already been paid by the plaintiff and that amount is still with the defendants. Therefore, the defendants are bound to execute the sale deed conveying the exempted land in favour of the plaintiff, inasmuch as the plaintiff has paid the entire sale consideration for the entire extent of land now exempted from the Urban Land Ceiling Act became transferable. Since, there is no amount due and payable for the 1/3 of the original extent, the contentions of the defendant that only a portion of the amount has been paid and therefore the plaintiff is not entitled to the relief of specific performance is not acceptable.
34. As stated already, there was no intention to the parties to the agreement to sell the excess land, but they were always conscious that they must get exemption of the land from the Urban Land Ceiling Act and only thereafter, they intended to complete the transaction. Therefore, there is no illegality in the contract and the plaintiff did not fail to do anything that is possible under law. Although the terms of the contract provides the plaintiff shall do some acts, it is only the defendants who can do that; therefore, the plaintiff is not guilty of breach of contract. The claim of the defendants that the agreement has been cancelled is not tenable; such a unilateral cancellation of agreement is not valid. Therefore, Exs. D.2 to D.4 do not help the defendants in any manner. It is for the plaintiff to get the vacant possession of the land from the Madras Race Club after purchasing the property; getting vacant possession of the land does not arise before purchasing the property; the agreement-holder cannot seek to get vacant possession from any one.
35. The plaintiff is not guilty of breach of the terms of the contract. The decision of Supreme Court in Prakash Chandra v. Angadlal, is as follows :
"The ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to his refusal when the circumstances show that the damages would constitute an adequate relief."
There are no equitable considerations or circumstances which would require this Court to refuse the relief of specific performance. Further, as per the decisions of the Supreme Court in Nirmala Anand v. Advent Corporation (P) Limited, , "Normally relief of specific performance cannot be denied merely because of phenomenal increase in the price during the pendency of litigation."
Therefore, the plaintiff is entitled to the decree, as prayed for, though only with respect to the land that has been exempted by the Urban Land Ceiling Authority.
36. In the result, the suit is decreed as prayed for and the defendants are directed to execute the sale deed transferring the extent of suit land to which the Urban Land Ceiling Authorities have granted exemption under the Urban Land Ceiling Act, in favour of the plaintiff or his nominees within a period of two months from this date, failing which the plaintiff is entitled to get the sale deed executed through Court. Since the entire amount for the land that can be conveyed has already been paid by the plaintiff to the defendants, there is no amount payable by the plaintiff. Issue Nos. 5 and 6 are answered in favour of the plaintiff.
In fine, Issues 1 to 6 are decided in favour of the plaintiff. The suit is decreed partly with proportionate costs.