Madras High Court
D.Punithavathy vs N.Thangamani on 29 April, 2022
Author: C.V.Karthikeyan
Bench: C.V.Karthikeyan
A.S.No.25 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 04.03.2022
Pronounced on : 29.04.2022
CORAM:
THE HONOURABLE MR.JUSTICE C.V.KARTHIKEYAN
A.S.No. 25 of 2017
S. Duraivelu (Deceased)
1. D.Punithavathy
2. E.D.Valayapathy
3. D.Kumaresan ... Appellants/Defendants 3 to 5
Vs
1. N.Thangamani
... Plaintiff/Respondent
2. Shenoynagar Saswatha Nidhi Ltd.,
Rep. by its Secretary
Having Office at
No.723, Poonamallee High Road,
Aminjikkarai,
Chennai – 600 029. ... 2nd Respondent/2nd Respondent
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https://www.mhc.tn.gov.in/judis
A.S.No.25 of 2017
PRAYER: Appeal filed under Section 96 C.P.C., against the Judgment and
Decree dated 11.03.2016 passed in O.S.No. 9249 of 2011 on the file of XIX
Additional City Civil Court at Chennai.
***
For Appellants : Mr. T.V.Ramanujun
Senior Counsel
for Ms. R.Ramya
For 1st Respondent : Mr. R.Thiagarajan
For 2nd Respondent : Mr.C.Krishnamoorthy
JUDGMENT
The 3rd, 4th and 5th defendants, who were the legal representatives of the 1st defendant in O.S.No. 9249 of 2011 on the file of the XIX Additional City Civil Court, Chennai, are the appellants herein, aggrieved by the Judgment and Decree dated 11.03.2016 whereby the suit for specific performance had been decreed with costs.
2. Originally O.S.No. 9249 of 2011 had been filed as C.S.No. 797 of 2005 in the Original Side of the Madras High Court. It was later transferred to the City Civil Court. When the suit was filed, there was only one defendant 2/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 S.Duraivelu. Later in the year 2006, the 2nd defendant, Shenoynagar Saswatha Nidhi Limited., was impleaded. However, the learned counsel for the plaintiffs during the final hearing of the case had made an endorsement giving up the second defendant and therefore, the suit was dismissed as against the second defendant on 23.01.2013. Owing to the death of S.Duraivelu, his legal representatives were impleaded as 3rd to 5th defendants and they are the appellants herein.
O.S.No. 9249 of 2011 on the file of XIX Additional City Civil Court, Chennai:
Plaint:
3. The plaintiff N.Thangamani, claimed that he was a tenant under the defendant S.Duraivelu with respect to a shop portion in the property at Plot No.26, T H Road, M R Nagar, Kodungaiyur, Chennai. He was running a business in sale of colorful Aquarium Fishes. He claimed that he had paid an advance of Rs.50,000/- in the year 2000, when he became the tenant.
4. He further stated that the defendant S.Duraivelu and his sons approached him offering to sell the property. He also wanted to purchase the 3/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 property and thereafter, the consideration was mutually decided at Rs.22/- lakhs. An agreement dated 10.10.2003 had been entered into between the parties. It was specifically undertaken that the agreement shall be performed before 31.01.2004. It was also mentioned that out of the total consideration of Rs.22/- lakhs an advance of Rs.10/- lakhs had been paid. It was covenanted that the balance sale consideration should be paid on or before 31.01.2004.
5. In the plaint, it had been stated that it had also been agreed that the rent advance of Rs.50,000/- and a further sum of Rs.55,000/- which the plaintiff claims had been paid to the defendant would also be adjusted with the balance sale consideration.
6. The plaintiff further stated that in order to mobilise the balance sale consideration, he had dealt with his three other properties. He then came to know that the property had been mortgaged with Shenoynagar Saswatha Nidhi Ltd., and when questioned, the defendant stated that he was negotiating with the said Nidhi Ltd., to discharge the mortgage. The plaintiff stated that however this was not done before 31.01.2004. The plaintiff further claimed that he was always ready and willing to perform his part of the agreement. 4/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017
7. Since the plaintiff had conveyed his three other properties and had the balance sale consideration ready but the defendant was not prepared to come forward to execute the sale deed, the plaintiff requested the defendant to enter into a fresh agreement of sale. It was claimed that therefore a new agreement of sale dated 10.03.2005, in addition to the existing agreement of sale was entered into between the parties. In that agreement dated 10.03.2005, the receipt of Rs.11/- lakhs as advance was recorded. It was also recorded that possession had been handed over to the plaintiff. The defendant also undertook to clear the mortgage with the Nidhi Ltd. The plaintiff stated that however the defendant did not come forward to execute the sale deed even though the plaintiff was ready and willing to pay the balance sale consideration. It was under these circumstances that he instituted the suit for specific performance of the agreement dated 10.03.2005 and also for injunction to protect his possession and also for costs of the suit.
Written Statement:
8. The defendant S.Duraivelu filed a written statement denying the averments in the plaint. It was acknowledged that the plaintiff was a tenant in a shop premises measuring 100 sq.ft. The plaintiff also acknowledged that he 5/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 wanted to sell the property and in this regard, an agreement dated 10.10.2003 had been entered into by him with the plaintiff. The defendant contended that time was of the essence in that agreement and it was specifically mentioned that the defendant should pay the balance sale consideration of Rs.12/- lakhs out of the total sale consideration of Rs.22/- lakhs on or before 31.01.2004. The defendant further stated that he had mortgaged the property with Shenoynagar Saswatha Nidhi Ltd., and he had entered into negotiations for discharge of the mortgage. He further specifically stated that the plaintiff was aware that the property was mortgaged with the said Nidhi Ltd.
9. He further stated that the plaintiff was not having the means to pay the balance sale consideration and therefore, the defendant had issued a notice on 13.08.2005 indicating readiness to return the advance amount and further stating that the agreement had become frustrated by non performance. It had been further stated that subsequently, the plaintiff had taken the assistance of the police and this necessitated the defendant to file W.P.No. 30657 of 2004 against the Assistant Commissioner of Police, MKB Nagar Police Station and in W.M.P.No. 37140 of 2004, an order of injunction was granted restraining the said Official from harassing the defendant.
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10. The plaintiff thereafter filed an application under Section 156 of the Code of Criminal Procedure alleging that the defendant had cheated him. It was stated that subsequently, an FIR was registered and the police officials from Team-3 in Egmore, summoned the defendant and his sons for enquiry. It was stated that the defendant and his sons had taken three demand drafts for a total amount of Rs.11/- lakhs which was the advance amount received. However, the police officials and other persons, coerced and threatened the defendant to sign a fresh agreement of sale. This was on 10.03.2005.
11. It was specifically stated that the stamp papers were purchased in a shop in Egmore and the said individuals typed the agreement and he had no other option but to affix the signature at the place indicated. His son was also forced to sign as a witness. Pursuant to the registration of the FIR, the son of the defendant was taken into custody and the defendant and another son had to file an application seeking anticipatory bail. A learned Single judge of this Court had directed deposit of Rs.11/- lakhs to the credit of the concerned Magistrate Court which direction had also been complied with. The defendant claimed that the agreement dated 10.03.2005 on the basis of which specific performance is 7/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 sought is void and it had been obtained by coercion and exercising undue influence.
12. The defendant also stated that he had issued a notice on 10.09.2005 cancelling the agreement dated 10.10.2003. It was claimed that the suit had been filed with malafide intention and by suppressing material facts and on the basis of an agreement which had been obtained through coercion and it was therefore stated that the suit should be dismissed. Written Statement of 3rd to 5th Defendants:
13. These defendants were impleaded owing to the death of the 1st defendant during the pendency of the suit.
14. They filed their written statement in which they again reiterated the very same facts as stated in the written statement of the 1st defendant. They again questioned the maintainability of the suit seeking specific performance of an agreement of sale which according to the them stood vitiated owing to the 8/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 coercion and undue influence exerted at the time of entering into the said agreement of sale. It had also been stated that the plaintiff was never ready and willing to perform his part of the contract with respect to the agreement dated 10.10.2003. He had given a police complaint for return of the advance amount and did not seeking specific performance. He, however, filed the suit seeking specific performance.
15. It was also stated that on the basis of the complaint given by the plaintiff, the final report was taken cognizance as C.C.No. 8002 of 2006 and after trial before the Additional Chief Metropolitan Magistrate, Court. The accused therein were S.Duraivelu and the 4th and 5th defendants, E.D.Valayapathy and D.Kumaresan. After trial, the 1st defendant was convicted and sentenced to undergo 6 months rigorous imprisonment and fine of Rs.10,000/-, in default 3 months simple imprisonment and the other two accused were acquitted.
16. The 1st defendant filed an Appeal in C.A.No. 30 of 2012 and by Judgment dated 27.09.2012, the II Additional Sessions Court, Chennai had set 9/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 aside the conviction and sentence and had acquitted the 1st accused/ 1st defendant.
17. It was stated that the disputes had also parallelly reached the Hon'ble Supreme Court where an order was passed that the plaintiff can be in possession of one shop and must pay a rent of Rs.1,000/-. It was stated that the plaintiff had not complied with the directions of the Hon'ble Supreme Court. It was also stated that under these circumstances, the suit should be dismissed.
Reply Statement:
18. In view of the aforementioned written statements filed, the plaintiff filed a reply statement reiterating the facts mentioned in the plaint. He again affirmed that the agreement dated 10.03.2005 was lawfully entered into by the parties and that there was no coercion exercised. The plaintiff further claimed that he was ready and willing to perform his part of the agreement and insisted that the relief of specific performance must be granted on the basis of the said agreement dated 10.03.2005.10/50
https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 Issues:-
19. On the basis of the above pleadings, the following issues had been framed:-
“(1). Whether the sale agreement dated 10.03.2005 is true valid and enforceable in law?;
(2) Whether the plaintiff has to do the entire sale consideration as pleaded in the plaint?;
(3) Whether the plaintiff is entitled to get a decree for specific performance based on the agreement dated 10.3.2005?;
(4) Whether the plaintiff is entitled to permanent injunction as prayed for?;
(5) Whether the plaintiff was ready and willing to perform part of the contract as per the agreement dated 10.03.2005?; and (6) To what relief the parties are entitled?” 11/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 Trial:-
20. It must be mentioned that when trial commenced the 1st defendant was alive. The plaintiff examined himself as PW-1 and marked Exs. P-1 to P-24 when the trial was conducted on the Original Side of the High Court and later, after transfer, marked Exs. A-25 and A-26. On the side of the defendants, the 1 st defendant S.Duraivelu was examined as DW-1 and he marked Exs. B-1 to B-12.
Later, the 4th defendant was examined as DW-2 and he marked Exs. B13 to B- 22.
21. Among the documents marked, Ex.P-1 was the agreement dated 10.10.2003, Ex.P-2 was the agreement dated 10.03.2005, Ex.P-3 was the legal notice issued by the defendant dated 13.08.2005, Exs. P-4 to P-6 were sale deeds executed by the plaintiff with respect to his other properties, Ex.P-13 was the order of the High Court granting anticipatory bail to the 1st defendant, Ex.P- 14 was the order of the High Court permitting deposit of balance sale consideration into Court, Exs. P-17 and P-18 were the final report in C.C.No. 8002 of 2006 / Additional Chief Metropolitan Magistrate, Egmore and Ex.A-25 was the memorandum of deposit of title deeds in favour of Bank of India. 12/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017
22. Among the documents marked on behalf of the defendants, Ex.B1 was the deposition of the plaintiff during the trial in C.C.No. 8002 of 2006, Ex.B-4 was the three demand drafts for Rs.11/- lakhs in the name of the plaintiff, Ex.B-5 was the deposit receipt of Rs.11/- lakhs deposited by the defendants, Ex.B-14 was the order of the High Court in W.M.P.No. 37140 of 2004 inW.P.No. 30657 of 2004 and Ex.P-21 was the Judgment in C.A.No. 30 of 2012 by the II Additional Sessions Court, Chennai, dated 27.09.2012. The Judgment in O.S.No. 9249 of 2011 dated 11.03.2016 by the XIX Additional City Civil Court, Chennai:
23. The learned Trial Judge took up all the issues together for consideration.
24. The learned Trial Judge observed the contention of the defendants that the agreement dated 10.03.2005 had been entered into by them owing to threat and coercion held out by the police officials. In this connection, the learned Trial Judge extracted a portion of the evidence of the plaintiff when he had deposed in C.C.No. 8002 of 2006 before the Additional Chief Metropolitan 13/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 Magistrate Court, wherein he had stated that he had given a complaint before the police and that the said agreement had been entered into in the presence of the Advocates and police at Egmore. He had also admitted that the stamp paper had been purchased by them from the shop next to the Police Commissioner's Office at Egmore. He also admitted that the defendants, had signed the agreement and also as witness since the police directed them to do so. He also stated that during the enquiry, the Assistant Commissioner of Police, Inspector of Police and the Advocates were also present.
25. Thereafter, the learned Trial Judge also extracted the chief examination of the plaintiff in C.C.No. 8002 of 2006 wherein he had affirmed that the agreement had been entered into and that he did not initially know that the property was under mortgage by the Shenoynagar Saswatha Nidhi Ltd., and therefore he had given a complaint before the police to enquire the defendants. He stated that before the police, the defendants had stated that they would compromise the issue and therefore, the agreement dated 10.03.2005 had been entered into in the presence of the police. He also stated that since he had been cheated, a complaint had been given was for return of the advance money which he had paid.
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26. On the basis of the evidence recorded, the learned Trial Judge found fault on the defendants for not having initiated any step to set aside the agreement dated 10.03.2005. The learned Trial Judge also stated that in the notice / Ex.P-3 it had been alleged by the defendants that the agreement had been entered into owing to coercion by rowdy elements and contrasted that statement with the statement in the written statement that the agreement had been entered into owing to the coercion by police officials and stated that therefore, there was a contradiction.
27. The learned Trial Judge also stated that there was nothing wrong in purchasing stamp papers in Egmore for a property situated elsewhere. It was also stated that the defendants had not given any complaint against the police officials for having allegedly coerced them into entering into the agreement. He therefore held that the agreement dated 10.03.2005 had been lawfully entered into and was capable of specific performance. He then observed that the defendants had admitted to receipt of the advance amount and had also admitted their signatures in the said agreement and therefore stated that there was no other option, but to grant specific performance of the said agreement and therefore, decreed the suit with costs.
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Arguments:
On behalf of the appellants/Defendants:
28. Mr.T.V.Ramanujun, learned Senior Counsel on behalf of the appellants took umbrage at every reasoning given by the learned Trial Judge. The learned Senior Counsel took the Court through the pleadings and the documents filed and the evidence recorded and pointed out that there was an earlier agreement marked as Ex.P-1 dated 10.10.2003 between the plaintiff and the 1st defendant. In that agreement, it had been very specifically agreed between the parties that time was the essence of the contract. The learned Senior Counsel stated that the total consideration had been determined at Rs.22/- lakhs and an advance of Rs.10/- lakhs had been paid and it was understood and agreed that the balance sale consideration of Rs.12/- lakhs must be paid on or before 31.01.2004. It was not paid. On the other hand, the plaintiff filed a police complaint alleging that the defendants had cheated him and in the police complaint only sought return of the advance amount. 16/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017
29. The learned Senior Counsel very strongly attacked the conduct of the plaintiff, who first entered into the premise as a tenant of one shop measuring 100 sq.ft., and then took over possession of another shop. He further pointed out that it was never the case of the parties that the advance of Rs.50,000/- would form part of the sale consideration. It was also pointed out that the details of payment of Rs.55,000/- for the tenancy had not been given in the plaint. The learned Senior Counsel was very forcible in his assertion that the agreement dated 10.10.2003 Ex.P-1 had lapsed owing to non performance by the plaintiff in making payment of the balance sale consideration.
30. Thereafter, the plaintiff had given a series of complaints necessitating the 1st defendant to file a writ petition seeking protection from the harassment of the police officials. An injunction order was also granted. However, another complaint was filed under Section 156(3) of the Code of Criminal Procedure and on that basis, a FIR was registered. The final report was taken cognizance as C.C.No. 8002 of 2006 by the Additional Chief Metropolitan Magistrate, Egmore, Chennai.
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31. The learned Senior Counsel pointed out that in the evidence, the plaintiff had clearly admitted that the agreement on the basis on which the suit had been instituted, Ex.P-2 dated 10.03.2005 had actually been entered into by the parties at Egmore in the presence of police officials and other Advocates, who had, as aforesaid, purchased the stamp papers and who had directed that signatures be appended and therefore, the learned Senior Counsel stated that the very foundation of the claim of the plaintiff is not based on lawful grounds as the agreement stood vitiated due to coercion and undue influence.
32. The learned Senior Counsel stated that the plaintiff had given up the earlier agreement dated 10.10.2003 and the suit was based on the second agreement dated 10.03.2005. He pointed out the discrepancy in the advance amounts by including the rental advance and the alleged further payment of Rs.55,000/-. He also disputed the claim that the defendants had handed over lawful possession to the plaintiff.
33. The learned Senior Counsel pointed out that stamp papers were purchased at Egmore and was insistent on the fact that the defendant was forced 18/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 to sign the agreement. The learned Senior Counsel also pointed that while obtaining anticipatory bail, a condition was imposed that the defendants should deposit a sum of Rs.11/- lakhs which condition had been complied with.
34. Further, the defendants had also produced demand drafts for Rs.11/- lakhs for returning the advance sale consideration and these demand drafts had also been marked as Ex.P-4 during the course of trial.
35. The learned Senior Counsel expressed dismay at the reasons given by the learned Trial Judge justifying the agreement as being lawful and entered into voluntarily between the parties. The learned Senior Counsel wondered how such a conclusion could have been reached in the teeth of the deposition of the plaintiff himself in C.C.No. 8002 of 2006 wherein he had very clearly stated the circumstances surrounding which the agreement in Ex.P-2 dated 10.03.2005 had been entered into.
36. The learned Senior Counsel stated that the plaintiff had come to Court with unclean hands with the only object to usurp the property of the 19/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 defendants. The learned Senior Counsel stated that the issue that the property was mortgaged pales into insignificance since such fact was known to the plaintiff. The defendants were actually also forced to execute a sale deed in favour of the plaintiff and to make over the mortgage to the plaintiff. It was therefore stated that the suit should have been dismissed by the learned Trial Court and that this Court should set aside the decree and Judgment dated 11.03.2016 in the suit.
On behalf of the Respondent/Plaintiff:
37. Mr.R.Thiagarajan, learned counsel for the respondent/plaintiff denied, disputed and contested every statement made by the learned Senior Counsel on behalf of the defendatns. The learned counsel stated that the basic necessities for an agreement of sale were that the property must be available, the party coming forward to sell the property should be the owner of the property or should have the capacity to deal with the property, that the consideration should be adequate and the agreement must be properly and lawfully signed and attested. The learned counsel pointed out that the defendants had admitted the 20/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 signature in the agreement Ex.P-2 dated 10.03.2005. He pointed out that there was an earlier agreement Ex.P-1 dated 10.10.2003 but in that agreement, the first defendant had suppressed the fact that the property was under mortgage with Shenoynagar Saswath Nidhi Ltd. Owing to such existing mortgage, the plaintiff, to protect himself and to obtain the property with valid title had called upon the defendant to clear the mortgage and then to come forward to execute the sale deed.
38. The learned counsel also pointed out that the plaintiff had conveyed three separate properties to generate funds to pay the balance sale consideration and further stated that the sale deeds had been produced in Court as Exs. P-4 and P-6.
39. The learned counsel also stated that the defendants had no intention to come forward to execute the sale deed. At that time, the plaintiff had committed himself to purchase the property and to perform such commitment, he had also sold his other properties. The plaintiff had no other option but to lodge a complaint that the 1st defendant and his sons had cheated 21/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 him out of valuable money. He also pointed out that the trial in the criminal case first ended in conviction. He also stated that the defendants were never ready and willing to perform their agreement. It was under those circumstances that the second agreement was entered into.
40. The learned counsel also justified the reasons given by the learned Trial Judge and stated that it cannot be presumed that the police had exerted influence particularly when the defendants have not filed any application or initiated any proceeding to hold that the agreement dated 10.03.2005 was null and void and should not be acted upon. The learned counsel stated that the plaintiff has been put to much loss and hardship and had parted with that specific substantial consideration. The learned counsel stated that the plaintiff had committed himself to third parties and owing to the refusal of the defendants to come forward to execute the sale deed, the plaintiff had been put to loss and hardship quite apart from mental agony and therefore, the learned counsel insisted that the suit was justly decreed. The learned counsel stated that the appeal should be dismissed and the decree must be upheld.22/50
https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 Points for Consideration:
41. I have carefully considered the arguments advanced and perused the materials on record.
42. The following points arise for consideration under Order 41 Rule 31 CPC:-
“(1) Whether time was the essence of the agreement dated 10.10.2003 / Ex.P-1 and whether the agreement had lapsed owing to non performance by the plaintiff within the time stipulated to pay the balance sale consideration?; (2) Whether the second agreement dated 10.03.2005 was an extension of the earlier agreement or was it a fresh agreement between the parties?;
(3) Whether the said agreement dated 10.03.2005 had been lawfully entered into with free consent between the parties or whether there was evidence to substantiate the claim of the defendants that coercion was exercised on them to enter into the agreement?;
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https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 (4) Whether the reasoning of the learned Trial Judge upholding the lawfulness of the agreement dated 10.03.2005 are correct and acceptable and have to be affirmed or should they be interfered with?” The Points Answered:
Point No.1:
43. Let me refer the parties as plaintiff and defendants. The 3rd to 5th defendants are the appellants herein. The plaintiff is the 1st respondent. The 2nd defendant is the second respondent. However, an endorsement had been made by the learned counsel for the plaintiff and the suit had been dismissed against the second defendant on 23.01.2013. The 1st defendant had died pending the suit and the appellants/3rd to 5th defendants have been impleaded consequently.
44. The plaintiff claimed to be a tenant under the 1st defendant with respect to a shop measuring 100 sq.ft., in the premises bearing Plot No.26, T H Road, M R Nagar, Kodungaiyur, Chennai. He claimed that he had paid an 24/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 advance of Rs.50,000/-. It was further claimed that the 1st defendant and his sons wanted to deal with the property and after negotiations the plaintiff and the 1st defendant agreed to purchase/sell the property. In this connection, they had entered into an agreement of sale on 10.10.2005. A copy of the agreement of sale had been produced as Ex.P-1. The said agreement is in Tamil. It can therefore be presumed that both the parties understood the terms of the agreement.
45. In the said agreement, in clause 1, a brief description of the property had been given. It was covenanted in clause 2 that the 1st defendant was the owner of the property. The consideration of Rs.22/- lakhs was stated in clause 3. It was further stated in clause 4 that an advance of Rs.10/- lakhs had been received and the balance of Rs.12/- lakhs has to be paid by the plaintiff on or before 31.01.2004. It was stated in clause 5 that existing debts and taxes must be paid by the 1st defendant and he must execute the sale deed. It was further covenanted in clause 6 that when the sale deed is executed there must not be any existing encumbrance. It was further stated in clause 7 that the plaintiff will bear the expenses towards stamp papers and registration charges. It was 25/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 further stated in clause 8 that the balance sale consideration should be paid on or before 31.01.2004 and only on receipt of such balance sale consideration would the 1st defendant execute the sale deed. It was also stated in the same clause that time was the essence of the agreement and if the balance sale consideration was not paid within the said time period, the 1st defendant was at liberty to sell the property to third persons. It was further stated in clause 9 that possession would be handed over only after the registration of the sale deed and the plaintiff should either attorn the tenancy or take steps to evict the other tenants. It was further stated in clause 10 that both the parties had agreed to the above covenants and had signed the agreement.
46. One very significant fact in the agreement in clause 8 was while reiterating that the advance of Rs.12/- lakhs must be paid, it was typed that it should be paid on or before 31.04.2004. This date was struck out and it was re-
written 31-01-2004 and both the parties signed on such correction. This was the specific clause which also dealt with time being the essence of the agreement. Another correction was made in clause where the word 'Vendor' was written and struck off and the word 'purchaser' was typed. This correction was also signed by both the parties.
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47. I hold that these are very significant points. They indicate consensus ad idiem on all aspects by both the plaintiff and the 1st defendant. There was a mention that the 1st defendant was the owner, that there were existing debts, that the property should be sold after clearing the existing debts and payment of taxes, that when the property is sold, there should no existing encumbrance and that an advance of Rs.10/- lakhs had been received out of the total consideration of Rs.22/- lakhs and that the balance of Rs.12/- lakhs should be paid on or before 31.01.2004. In one place, when the date was wrongly typed as 31.04.2004, both the parties had struck it out and had written 31.01.2004 and signed such correction. That correction was in the very clause which stipulated that time was essence of the agreement.
48. Section 55 of the Indian Contract Act 1872 deals with the effect of failure to perform at a fixed time a contract in which time is essential. Section 55 is as follows:-
“55. Effect of failure to perform at a fixed time, in contract in which time is essential.—When a party to a contract promises to do a certain thing at or 27/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract. —."
Effect of such failure when time is not essential.—If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure."
Effect of acceptance of performance at time other than that agreed upon.—If, in case of a contract voidable on account of the promisor’s failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance he gives notice to the promisor of his intention to do so.” 28/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017
49. This provision deals with the effect of failure to perform an act within the fixed time in a contract in which time is of essence. The question whether time is the essence of the contract has to be considered on a case by case basis. It would surround the intention of the parties. It would surround the nature of the agreement. It would surround the consent of both the parties to so stipulate that the time will be of essence.
50. Normally, in regard to contracts relating to immovable properties, time is not the essence of a contract. The intention has to be gathered from the express term of the contract or the implied understanding between the parties.
51. A Constitution Bench of the Hon'ble Supreme Court in 1993 (1) SCC 519 [Chand Rani (dead) by Lrs. Vs. Kamal Rani (Dead) by Lrs.], had stated that in the case of sale of immovable property, time is never regarded as the essence of contract. It had been further stated that there is a presumption against time being the essence of the contract. It was further stated that it has to be ascertained whether under the terms of the contract, the parties had named a specific time within which the specified act was to take place and whether in 29/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 substance it was indeed agreed that it should be complied within a reasonable time. It was stated by the Constitution Bench that an intention to make time, the essence of the contract must be expressed in unequivocal language.
52. The Hon'ble Supreme Court further held that even if time is not the essence of the contract, the Court may infer that it is to be performed with a reasonable time from the terms of the contract, from the nature of the property and from the object of making the contract. It was further stated that time can be treated as the essence of the contract from the circumstances and as established by evidence.
53. In AIR 2011 SC 3234 [ Saradamani Kandappan Vs. S.Rajalakshmi & Ors.] the Hon'ble Supreme Court again examined this particular aspect of time being the essence of a contrast particularly when the value of the property had multiplied far more than what was stipulated in the agreement. In that particular case, on examination of the contract and the terms therein, the Hon'ble Supreme Court held that it had been made clear in the agreement that time regarding payment of balance price was the essence of the 30/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 contract and such payment was not dependent upon the purchasers' satisfaction regarding title.
54. On the basis of the aforementioned principles, the terms of the contract in the instant case will have to be examined.
55. Clause 8 deals with this particular aspect.
“,d;iwa njjpapy; brYj;jg;gl;l Kd;gzk; nghf kPjp fpuaj;bjhif U:/12.00.000-? (vGj;jhy;
U:gha; gd;dpuz;L ,yl;rk; kl;Lk;) fpiuak;
bgWgth; 31/04/2004 (31?01?2004)
brYj;jptplntz;Lk;/ mt;thW bkhj;j
fpiuaj;bjhifa[k; bgw;Wf;bfhz;l gpwFjhd;
fpiuak; bra;gth; fpiuag;gj;jpuk; vGjp
gjpt[ bra;J bfhLf;fntz;Lk;/ nkw;go
fhytuk;g[ mjhtJ 31/01/2004 kpft[k;
,d;wpaikahjJ/ Kf;fpakhdJ/ ,e;j
fhytuk;g[f;Fs; kPjp fpiuaj;bjhifia fpiuak;
bra;gtUf;Fr; brYj;jp me;j
31/50
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fhytuk;g[f;Fs;nsna gj;jpug;jpita[k;
bra;Jbfhs;sntz;Lk; jtwpdhy; ,e;j fpiua
xg;ge;j gj;jpuk; ,uj;jhfptpLk; vdt[k;
fpiuak; bra;gth; ,e;j brhj;ijjhd; tpUk;g[k;
kw;w egh;fSf;F fpiuak; bra;JbfhLf;f KG
chpika[s;sJ vdt[k; ehk; ,Ujug;gpdUk;
KgkdJld; rk;kjpf;fpnwhk;/”
56. A reading of the above clause very clearly shows that the parties had agreed that time was the essence to perform the agreement namely to pay the balance sale consideration. It was also stated that only after payment of the sale consideration will the sale deed be executed and that possession will be handed over only after the sale. It was further stated that if the plaintiff fails to pay the balance sale consideration, the 1st defendant was at liberty to sell the property to third parties.
57. The terms are clear. As a matter of fact, the date which was wrongly mentioned was struck off and the correct date within which the contract must be performed, namely, 31.01.2004 had been inserted by the parties and this 32/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 correction was also signed by both parties. This very clearly points out that time was understood and accepted to be the essence of the contract.
58. It for that reason that the plaintiff had not based the suit on the basis of the agreement dated 10.10.2003, Ex.P-1. The agreement had lapsed owing to non performance by the plaintiff and any explanation given by the plaintiff about the mortgage of the property cannot be countenanced since he had failed to pay the balance sale consideration within the time stipulated. I would therefore answer point No.1 that Ex.P-1 had lapsed owing to non performance by the plaintiff in payment of the balance sale consideration. With such lapse, the entire contractual relationship between the two parties stood frustrated.
Point Nos. 2 to 4:
59. Once there has been a frustration of relationship between the two parties, if at all both the plaintiff and the first defendant wanted to enter into a fresh agreement of sale, new terms should be incorporated.
60. A perusal of Ex.P-2 dated 10.03.2005 which can be categorised as the second agreement shows that reference is drawn to Ex.P-1 dated 10.10.2003. Such reference has been drawn to an agreement which had already lapsed and 33/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 therefore Ex.P-2 cannot be considered as an extension of the earlier agreement. If it is to be a fresh agreement, then the term should have been negotiated and stated afresh. However, the terms have not been stated so. Reference is drawn to the earlier advance consideration paid. The sale consideration remained the same. I hold that Ex.P-2 can never be considered to be a fresh agreement and neither can it be considered to be an extension of the earlier agreement since the earlier agreement had lapsed. If it is to be considered only as a stand alone agreement, then, the essentials of an agreement under Section 10 of the Contract Act will have to be independently applied to each one of the clauses in Ex.P-2 to find whether they could withstand the scrutiny of the Court.
61. Ex.P-2 therefore can neither be considered as an extension of the earlier agreement, since the earlier agreement had lapsed, nor can it be considered as a fresh agreement since it draws reference to the consideration aspect and the part consideration aspect of the earlier agreement. On this ground itself, grant of specific performance on the basis of this particular agreement will have to be examined with deep circumspection.
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62. The circumstances surrounding this particular agreement have been examined by the trial Judge. He had extracted a very relevant portion of the evidence of the plaintiff in C.C.No. 8002 of 2006 recorded by the Additional Chief Metropolitan Magistrate, Chennai.
63. Section 145 of the Evidence Act is as follows:-
“145. Cross-examination as to previous statements in writing.—A witness may be cross- examined as to previous statements made by him in writing or reduced into writing, and relevant to matters in question, without such writing being shown to him, or being proved; but, if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him."
64. The Trial Judge had extracted the relevant portion of the said evidence of the plaintiff in more than one place. It was as follows:- 35/50
https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 “g[fhh;bfhLj;jgpwF nghyPrhh; Tg;gpl;L tprhhpf;Fk;nghJ rkurkhf ngha;tplyhk; vd;W brhy;yp xU xg;ge;jk; nghl;nlhk;/ mJjhd; m/rh/M/3/ ,e;j xg;ge;jk; tf;fPy; nghyPrhh; Kd;dpiyapy;jhd;
nghl;lhh;fs;/ !;lhk;g; ngg;gh; fkpc&dh; mYtyfj;jpy;
gf;fj;jpy; ngha; th';fpdhh;fs;/ m/rh/M/3 y; 2. 3tJ vjphpfs; nghyPrhh; rhl;rpahf ,Uf;fntz;o mth;fs;
ifbaGj;J nghl;lhh;fs; vd;why; mJ rhpjhd;/ tprhuizapd;nghJ Vrpa[k; Ma;thsUk; kw;Wk; mth;fs;
tf;fPYk; Tl ,Ue;jhh;fs;/”
65. The admissions therein are crystal clear. The plaintiff had very categorically admitted that Ex.P-2 was entered into in the presence of police officials. It must be kept in mind that there was a threat of arrest of the defendants. The 4th fourth defendant was actually arrested and sent to custody. The 1st and the 5th defendants had to apply for anticipatory bail.
66. The nature complaint given by the plaintiff was to return the advance sale consideration. The plaintiff never sought specific performance of 36/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 the agreement. He did not seek specific performance of the agreement because on that date, Ex.P-1 had already lapsed. There was no agreement between the parties. He sought only return of the advance sale consideration paid by him. When that was the relief sought, taking advantage of police force, an agreement of sale had been entered into and this fact itself establishes that the agreement is voidable since it has been brought about by force exerted on the defendants. If the defendants had chosen, the agreement would be voidable at their end. They could avoid performance. I hold it is voidable since coercion had been exerted.
67. A reading of the extracted portion above shows that the plaintiff stated under oath that when Ex.P-2 was entered into the police were present. Advocates were present. Quite apart from the police, the Assistant Commissioner was present. The Inspector was present. They asked the defendants to sign and the defendants had no other option but to sign.
68. The admissions in his earlier evidence stares in the face of the plaintiff.
69. I must express my dismay on the interpretation of the trial Judge holding that such an agreement had been lawfully entered into. 37/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017
70. In 2006 (1) CTC 112 [ A.Anand Vs. A.Perumalsamy], a learned Single Judge of this Court [R.Banumathi, J.] as her Ladyship then was, had an occasion to examine the import of Section 145 of the Evidence Act, 1872 and held in paragraph No. 27 is as follows:-
“27. ..............Section 155 of the Indian Evidence Act relates to impeaching the credit of the Witness. Under Section 155(3), the credit of the Witness could be impeached “by proof of former statements inconsistent with any part of his evidence which is liable to be contradicted”. Section 145 of the Indian Evidence Act also enables a Witness to be cross-examined and contradicted with reference to his previous statement in Writing. Section 155 enumerates different methods for impeaching the credit of a Witness. One such method is the proof of former inconsistent statement. Section 155 stresses that the contradiction by previous inconsistent Statement must be confined only to the matters relevant to the issue and not with regard to the irrelevant matters. .......” 38/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017
71. The learned Judge had affirmed that reliance can be placed under Section 145 of the Evidence Act on the former statement.
72. Ex.B-1 was the deposition of the plaintiff in C.C.No. 8002 of 2006. This was in cross examination and he admitted that Ex.P-2 had been entered into in the presence of the police officials. The Court cannot act as an ostrich with its head in the soil and be oblivious of realities. Essence of any agreement is free consent. The parties must voluntarily enter into an agreement of sale or for that matter any agreement. That consensus ad idiem between the parties is the essence of any agreement. If free consent is absent or if force either directly or indirectly had been exerted to sign the agreement, then the agreement stands vitiated.
73. The first defendant was an aged person about 74 years. He faced threat of arrest. The plaintiff had already entered into the property. He also took possession of yet another shop. The earlier agreement had come to an end and then the plaintiff while seeking return of the advance amount, had probably and definitely with ill advise, and abound with avarice had brought about Ex.P-2 on 39/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 10.03.2005. That agreement cannot be the basis for grant of any relief by a Court of law. That agreement had not been entered into on an one to one basis with free consent by two parties. Even if there is a slight element of force or threat, the agreement has to be declared as voidable and can be directed to be performed only if the victim of such threat agrees voluntarily to perform such agreement. In this case, the 1st defendant had denied and disputed performance Ex.P-2.
74. In (1987) 2 MLJ 138 [Karuppayee Ammal Vs. Karuppiah Pillai and Anr.], a learned Single Judge of this Court had an occasion to examine undue influence, it had been held as follows:-
“19. "Undue influence" or as it is sometimes called Moral Coercion as distinguished from physical coercion, according to Sir Frederick Pollock "consists in any influence brought to bear upon a person entering into an agreement or consenting to a disposal of property, which, having regard to the age and capacity of the party, the nature of the transaction, and all the -circumstances of the case, appears to have been such as to preclude the 40/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 exercise of free and deliberate Judgment". Two things have to be proved in order to raise a presumption of undue influence. Firstly, that the relationship between the contracting parties was such, that the was in a position to dominate the will of the other. Secondly, that the position was used to obtain an unfair advantage. If these two things are proved, then a presumption of undue influence arises and the burden is cast upon the party to show that he has not taken advantage of his position, and that the other party has had independent legal advice in the matter. Such advice must be proved to have been given before the transaction. If this be proved, the transaction will stand. Otherwise, it will be avoided.
20. The Privy Council in Raghunath Prasad Y. Surja Prasad 46 M.L.J. 610 : L.R. 51 I.A. 101 : 26 Bom.
L.R. 95 : A.I.R. 1914 P.C. 60 : 19 L.W. 470 : 82 I.C. 817 :
(1924) I.L.R. 3 Pat. 279, has pointed out the essentials of this section as follows:
By that section, three matters are dealt with. In the first place, the relations between the parties to each other must be such that one is in a position to dominate the will of the other. Once that position is substantiated, the 41/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 second stage has been reached (viz.,) the issue whether the contract has been induced by undue influence. Upon the determination of this issue, the third point emerges, which is that of onus probandi. The burden of proving that the contract was not induced by undue influence, is to lie on the person who was in a position to dominate the will of the other. Error is almost sure to arise, if the order of these propositions be changed. The unconscionableness of the bargain is not the first thing to be considered. The first thing to be considered is the relations of the parties, whether it is such as to put one in a position to dominate the will of the other.
The same principles have been re-affirmed and attention drawn to the order of the propositions in the pronouncement of the Judicial Committee in Ho mesh war Singh v. Kameshwar Singh (1935) 30 C.W.N. 1130 : 37 Bom. L.R. 800 : 157 L.C. 1 : 1935 O.W.N. 851 : 42 L.W. 286 : 1935 M.W.N. 1139 : A.I.R. 1935 P.C. 146 : 69 M.L.J. 335.
21. ....
22. Coercion is defined under Section 15 of the 42/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 Indian Contract Act (Act IX of 1872). It reads as follows:
Coercion is the committing or threatening to commit any act forbidden by the Indian Penal Code (XLV of 1860) or the unlawful detaining, or threatening to detain any property, to the prejudice of any person wherever, with the intention of causing any person to enter into an agreement. Explanation : It is immaterial whether the Indian Penal Code (XLV of 1860) is or is not in force in the place where the coercion is employed.
23. What the Indian Law calls coercion, is called in English Law Duress or Menace. Duress is said to consist in actual or threatened violence or imprisonment of the contracting party or his wife, parent or child, inflicted or threatened by the other party or by one acting with his knowledge and for his advantage. But coercion as defined in Sec 15 is much wider and includes the unlawful detention of property. Further, it may be committed by any person, not necessarily a party to the contract. Again, it need not be directed against the contracting party or his parent, wife or child but it may be against any person, even a stranger. While in English law, duress must be such as to cause immediate violence and also to unnerve a person 43/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 with ordinary firmness of mind, these requisities are not necessary in Indian Law.”
75. In 2018 8 SCC 311 [ M/s. Alagu Pharmacy & Ors. Vs. N.Magudeswari], the Hon'ble Supreme Court had observed as follows:-
“10. The order passed by the appellate court shows that compromise Exh.P-11 was brought about on 29.01.2014 that is even before the eviction petition was filed by the respondent.
Further, said compromise Exh.P-11 was addressed to the Inspector of Police, City Crime Branch. The appellate court had further observed that complaint Exh.P-10 and compromise Exh.P- 11 were not disputed by the respondent and no document in rebuttal was filed. The complaint (Exh.P-10) proceeds on a premise that the lease deed dated 22.02.2012 was a forged document and there was no relationship of landlord-tenant between the parties. Yet an eviction petition was filed, seeking eviction of the appellants under the concerned Rent Act. There is an inherent contradiction in the stand adopted by the Respondent. In the circumstances, the assertion 44/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 made by the appellants that pressure was exerted through the police and they were compelled to enter into compromise is prima facie acceptable.
In Ajad Singh v. Chatra and Others
------------, compromise recorded in Police Station inter alia was not found to be acceptable by this Court and the matter was remanded. It was observed, “…..the appellate court ought to have taken note of the fact that the said compromise was recorded in the Police Station and during the pendency of the suit.” It is true that there was a delay of 604 days in filing the appeal, but in cases where there is reasonable doubt that police may have forced a party to enter into compromise, the process of Court ought to weigh in favour of a party who alleges to be victim of such pressure. It may be pertinent to note that the order passed by the High Court does not even deal with this aspect nor was any submission made that the assessment made by the appellate court was in any way incorrect or imperfect. ” 45/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017
76. Any agreement entered into under the influence of third parties particularly police officials can never be stated to have been entered into with free mind by the parties to the agreement. The learned Trial Judge had stated that in the notice, the defendant had complained that the agreement was entered into in the presence of rowdy elements, whereas in the written statement, they have only stated about police officials.
77. It must be kept in mind that in the written statement, the first defendant had also stated about able bodied persons along with police men. Whether those who have forced the defendant to sign Ex.P-2, whether rowdy elements or police officials or able bodied persons, is insignificant. It only clearly shows that there were third parties, who forced the defendants, particularly the 1st defendant, a man aged about 74 years to sign Ex.P-2. As a matter of fact, the 4th defendant was taken into custody and that threat always loomed large over the 1st and 5th defendants also. The 1st defendant had further stated in his written statement that he had been residing in that particular locality for seven generations and for a person from that background, threat of arrest would make him to sign any paper.
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78. The discussion leads to the obvious conclusion that it is clear that Ex.P-2 has no relevancy to Ex.P-1. The only agreement entered voluntarily between the parties was Ex.P-1 which had lapsed. The plaintiff had not performed his part of the agreement within the time agreed. The second agreement Ex.P-2 had been brought about by coercion, undue influence and more importantly even according to the plaintiff signed in the presence of the police officials.
79. I hold this Court, exercising prudence, has to necessarily refuse specific performance of such an agreement. The message must go out loud and clear that any agreement entered into between the parties should be only with consent of both the parties and should not be the expression of threat of a third party to the agreement. I would therefore answer the third point that Ex.P-2 had not been lawfully entered into and that specific performance cannot be granted on the basis of such an agreement.
80. It is therefore clear that Ex.P-2 is not capable of specific performance and the finding to the contrary by the learned trial Judge has to be 47/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 set aside and is accordingly set aside by this Court. That is the definite answer to the fourth point.
81. In view of the above discussion, I am of the firm opinion that the Judgment of the Trial Judge has to be set aside. The reasonings are perverse. The learned Trial Judge had repeatedly extracted the admission of the plaintiff that the agreement Ex.P-2 was entered before the police officials but had still upheld the same stating that it was lawfully entered into. That reasoning has to be interfered with and is interfered with. Ex.P-2 cannot be the basis for grant of relief of specific performance. The reasons of the learned Trial Judge have to be set aside and are accordingly set aside.
82. In the result, the Judgment and Decree in O.S.No. 9249 of 2011 dated 11.03.2016 passed by the XIX Additional City Civil Court is set aside. The Appeal is allowed with costs.
29.04.2022 vsg Index: Yes/No Speaking order / Non speaking order To:
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1. XIX Additional City Civil Court at Chennai.
2.The Section Officer, VR Section, Madras High Court, Chennai.
C.V.KARTHIKEYAN, J.
Vsg 49/50 https://www.mhc.tn.gov.in/judis A.S.No.25 of 2017 Pre-delivery Judgment made in A.S.No. 25 of 2017 29.04.2022 50/50 https://www.mhc.tn.gov.in/judis