Madras High Court
B.K. Jayaraman vs S.K. Subramanian And Ors. on 6 July, 1994
Equivalent citations: (1994)2MLJ464
JUDGMENT Thangamani, J.
1. Appellant is the plaintiff in O.S. No. 323 of 1981 in the Court of Subordinate Judge of Madurai. He instituted that suit for specific performance of the agreement of sale under Ex. A-1 dated 25.12.1975 entered into between himself and respondents 1 to 3. The terms of the agreement disclose that out of the sale consideration of Rs. 85,000 respondents 1 to 3 have received an advance of Rs. 2,000 on that day. The vendors have agreed to reserve a sum of Rs. 22,000 with the plaintiff for the discharge of an earlier mortgage deed dated 6.1.1973 executed by them along with their mother in favour of one Bhagavathi Ammal for Rs. 15,000. They have also agreed to reserve Rs. 5,000 with the plaintiff for obtaining a release deed from respondents 4 and 5 who are their sisters. The appellant was to pay the further sum of Rs. 10,000 when respondents 1 to3 get the tenants vacated from the premises and surrendered vacant possession. The appellant is to keep the balance of sale consideration of Rs. 30,000 as deposit and pay interest for the same at 12% p.a. The remaining money was to be paid before the Sub Registrar at the time of registration. The appellant claims that time is not the essence of the contract under Ex. A-1. Respondents 1 to 3 had received various amounts from 13.1.1976 to 5.8.1977 as evidenced by the entries in Ex. A-4 Account Book. Besides they had received Rs. 3,000 and Rs. 7,000 under Ex. A-2, dated 1.2.1976 and Ex. A-3, dated 11.12.1976 respectively. In the mean while, Tamil Nadu Act 34 of 1976 came into force under which the vendors had to obtain permission from the Assistant Commissioner of Urban Land Tax, Madurai for conveying the property. But in spite of request from the appellant, respondents 1 to 3 had not made any effort in this direction. The vendors had also failed to get the release deed from the sisters who are respondents 4 and 5. Though they have received Rs. 10,000 from the appellant on 16.6.1977 under Ex. A-6 receipt for paying the same to the tenants, vacant possession has not yet been obtained. Though he is ready and willing to perform his part of the contract, respondents 1 to 3. have been delaying the execution of the sale deed.
2. Respondents 1 to 3 contested the claim of the appellant contending that there was no subsisting contract for sale on the date of suit. As the appellant could not get the sale transaction completed as agreed, in 1977 itself he received back the moneys paid by him and surrendered possession of the property to them. He was given possession of property on 16.6.1977 under definite understanding that he should find sufficient fund for finishing the transaction. However, appellant who was paying the amounts in driblets, could not collect lumpsum and so abandoned the contract and vacated the building. These respondents are not governed by the provisions of Act 34 of 1976. Thereafter, these respondents toiled a lot to collect funds to discharge the mortgage. In fact the mortgagee had filed the suit for the recovery of the mortgage money. Respondents 6 and 7 claim that they are bona fide purchasers of the property for valuable consideration from respondents 1 to 3.
3. The trial court found that the appellant was never ready and willing to perform his part of the contract and in fact he abandoned the same. And respondents 6 and 7 are bona fide purchasers for value which is binding on the appellant. Accordingly, while negativing the claim for specific performance, it decreed the suit directing defendants 1 to 3 to pay Rs. 28,805 with interest from the respective dates of receipt. And the parties were directed to bear their respective costs.
4. While the plaintiff challenges the said decree and judgment in this appeal and seeks specific performance of Ex. A-1 agreement, respondents 1 to 3 herein have filed cross objection disputing the liability to pay the sum awarded and respondents 4 and 5 have also filed cross objection for not awarding costs in their favour.
5. Learned Subordinate Judge has negatived the claim for specific performance on the ground that the appellant was not ready and willing to perform his part of the contract and he has abandoned the same. It is the case of the appellant that respondents 1 to 3 have failed to obtain permission from the Assistant Commissioner, Urban Land Tax, Madurai for conveying the property in spite of his demand and the stipulation in Ex. A-1 agreement. Under Section 26of the Act which came into existence on 3.11.1977 permission is necessary only in the case of property which measures more than 500 square metres. And it does not appear from the property description in Ex. A-1 that the house and vacant site concerned measure more than the specified extent. Besides, there is no evidence that the appellant has sent any notice to the respondents 1 to 3 calling upon them to get the said permission. Only in the witness box the appellant as P.W. 1 chooses to say so.
6. The next grievance of the appellant is that respondents 1 to 3 have failed to obtain release deed from the sisters respondents 4 and 5 as undertaken in Ex. A-1 agreement. We have already seen that as per the terms of Ex. A-1 agreement, the appellant alone has to provide a sum of Rs. 5,000 so as to enable the vendors to get the said release deed. And it is not his case that even though he tendered the money, respondents 1 to 3 did not take any action. There is no evidence that the appellant has made any demand on these respondents in this connection. In fact, the release deed has been obtained as per Ex. A-12 on 11.9.1980 without any difficulty. So, it cannot be said that the vendors had failed to carry out the stipulations mentioned in the agreement.
7. Be it noted that the appellant herein has chosen to file the suit for specific performance only on 28.4.1981 nearly six years after the coming into existence of the agreement. It is true that till June, 1977 he had been paying the respondents in driblets. Ex. A-4 the account book maintained by the appellant discloses that part of the purchase money had been paid from 7.10.1976 to 5.8.1977. And the tenant then in possession had also vacated the premises on 16.6.1977 as per Ex. A-6 receipt. As per this receipt a sum of Rs. 10,000 had been received from the appellant and handed over to the tenant. The key of the house was also handed over to the appellant as per Ex. A-5 letter of the same date. So, there could be no doubt that till then appellant had the idea of completing the transaction.
8. However, we find from Ex. A-7 the agreement dated 16.6.1977 entered into among the parties that the delay in getting the sale deed is on account of some natural causes. And appellant himself admits that from 16.8.1976 till 16.6.1977 he never asked the respondents to execute the sale deed. Subsequently also he did not send any notice for four years. The recital in Ex. A-7 is to the effect that the front portion of the building is in the occupation of the appellant while respondents are in enjoyment of the rear part. But appellant him self admits that some time after Ex. A-7 respondents had leased out the premises to a third party. Had really the appellant been anxious to go through the sale transaction, he would have certainly objected to handing over possession of the building to a tenant. Besides, admittedly respondents had put up construction in the open space in the front of the house subsequent to 1977 and the appellant had not raised any objection for the same. That the appellant had kept quiet for a long time even after the tenant had vacated the premises goes a long way to support the contention of the respondents that the former had no intention of purchasing the property. There is no dispute that the property which was worth Rs. 85,000 in 1975 had risen substantially in value in 1981 and perhaps that is the reason for the appellant awakening from his slumber and insisting on the execution of the sale deed as per Ex. A-1.
9. Learned Counsel for the appellant argued that time was not the essence of the contract herein and mere delay in seeking the relief cannot be a ground to refuse specific performance. It is true that mere delay in seeking for the relief of specific performance by itself cannot be a ground for the court to refuse to exercise its judicial discretion to grant the equitable relief. But in this case there is wanton delay and unexplained silence even after the tenant had vacated the premises. The course of conduct on the part of the appellant indicated above demonstrates an attitude of wanton drift adopted by the appellant which itself is an indicia of his unwillingness to involve himself further in the bargain. In our view we could presume abandonment of the contract by reason of the course of conduct adopted by the appellant who is deliberately silent about his rights and wakes up only at a convenient time when he can have unfair advantage over the other. In any event the claim of respondents 4 and 5 that they are bona fide purchasers for value without notice remains unassailed. We find from the evidence of D.W. 2 the seventh defendant that he and his wife had purchased part of the property in good faith under Exs. B-1, B-2 and B-15 without the knowledge of Ex. A-1 agreement. There is nothing in the cross-examination to discredit this version. Exs. B-14 and B-17 receipts also support their contention. Besides, by paying Rs. 10,000 these defendants have obtained Ex. A-12 release deed from the sisters. So, the trial court has upheld the sale in their favour. Learned Counsel for the appellant is unable to show any reason for not upholding the verdict of the trial court on this aspect.
10. In the trial court the suit was resisted by the present respondents also on the ground that it is barred by limitation. Article 54 of the Limitation Act prescribes that the period for specific performance of a contract is three from the date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. In this case, on 16.6.1977 plaintiff had vacated the premises in his enjoyment. As per the respondents, this has to be taken as the date on which the period commenced and since the suit has not been filed within three years from that date, it is barred by limitation. This Article comes into operation even in a case where time is not essence of the contract. But in this case, in the absence of any notice from the purchasers requiring performance within the definite time the sale in favour of respondents 4 and 5 in September-November, 1980 could alone be taken as refusal on the part of the vendors. And since the suit is filed within three years from that date it is in time.
11. Though respondents 4 and 5 filed cross objection disputing the decision of the trial court in not awarding the cost to them they did not choose to advance any arguments before us. And we also find no reason to take a view different from that of the trial court in this connection.
12 Respondents 1 to 3 in their cross-objection question the decree passed in favour of appellant/plaintiff directing them to pay Rs. 28,805. That this sum has been received by these cross objectors from the plaintiff cannot be disputed. While so, we are of the view that the trial court has rightly passed the decree as indicated above. And learned Counsel for these respondents also has not substantiated this claim by any acceptable reason. So we find no merit either in the appeal or in the cross-objections.
13. In the result, the appeal as well as two cross-objections are dismissed. No costs.