S.Andal v. K.Chinnasamy

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 21.07.2009CORAM:THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANANDTHE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJAA.S.No.56 of 2002and M.P.No.1 of 20091.S.Andal2.B.Janaki .. Appellants(Plaintiffs) -vs-K.Chinnasamy .. Respondent (Defendant)Prayer: Appeal Suit filed under Section 96 of CivilProcedure Code against the judgment and decree dated 17.8.2001 madein O.S.No.944 of 1995 on the file of the II Additional SubordinateJudge, Coimbatore. For Appellants : Mr.S.V.Jayaraman Sr.Counsel for Mr. V. NicholasFor Respondents : Mr.T.R.Rajagoapalan, Sr.Counsel for Mr.P.R.RamakrishnanJ U D G M E N T K.RAVIRAJA PANDIAN,J.The above appeal is directed against decree and judgmentdated 17.8.2001 made in O.S.NO.944 of 1995 on the file of the IIAdditional Subordinate Judge, Coimbatore by which the relief ofspecific performance of an agreement dated 22.1.1995 sought for bythe appellants herein was rejected.2. The facts of the case are as follows:The appellants filed a suit for specific performance againstthe respondent on the basis of an agreement of sale dated 22.1.1995executed between the appellants and the respondent in respect of theproperty measuring 17 cents and 429 sq.ft., (7834 sq.ft.) for atotal consideration of Rs.30,57,425/- at the rate of Rs.1,70,000/-per cent. It is the case of the appellants that on the date of https://hcservices.ecourts.gov.in/hcservices/ entering into agreement, the appellant paid a sum of Rs.4 lakhs bycheque and Rs.1 lakh by cash as earnest money deposit and part ofsale consideration. The time agreed for completion and registrationof the sale deed was six months from the date of agreement. As perthe terms of the sale agreement, the respondent should measure theproperty with reference to the boundaries and deliver the originaltitle deeds, property tax receipts, income-tax clearancecertificate, encumbrance certificate, urban land tax certificate andother documents. Despite the appellants were ready and willing toperform their part of contract, the respondent was evading theexecution of the sale deed by not producing necessary documents,which necessitated the appellants to issue a notice on 15.6.1995calling upon the respondent to produce the original title deeds andother documents. The respondent here again failed to adhere therequest. The appellants sent another notice on 12.7.1995 expressingtheir readiness and willingness to purchase the property and callingupon the respondent to execute the sale deed on 21.7.1995. In themean time the respondent by their reply notice dated 10.7.1995denied the execution of the agreement with intention to sell theland and took a stand that the entire transaction is a simple moneytransaction and that the agreement was executed as a security forpayment of the loan.3. On the above pleadings the parties went on trial beforethe trial Court. The trial Court, though found that the agreementdated 22.1.1995 was true, and that a sum of Rs.5 lakhs has alsobeen received by the respondent, however non-suited the appellantsfor the relief of specific performance on the ground that theappellants have not established that they were always ready andwilling to perform their part of the contract and they did notestablish possession of necessary funds at the relevant time and inthat view of the matter, dismissed the suit. The correctness of thesame is now canvassed in the appeal.4. It is contended on behalf of the appellants that thetrial Court having found that the sale agreement dated 22.1.1995 wastrue and genuine and further found that the payment of earnest moneydeposit in a sum of Rs.5 lakhs is also true, ought to have grantedthe relief of specific performance and the finding of the trialCourt that the appellants have not proved that they are always readyand willing to perform their part of the contract is against thematerial evidence adduced before it. The finding of the trial Courtthat the appellants were not possessing sufficient fund at therelevant time is not only incorrect, but also against thedocumentary evidence adduced by way of Exs.A.9 to A.11, the bankpass books stood in the name of appellants No.1 and 2 and oneG.Srinivasan respectively.5. Per contra, it was contended that on behalf of therespondent that the finding arrived at by the trial Court is basedon material evidence, which cannot be found fault. As such, nointerference is called for in this appeal. In addition to that, it https://hcservices.ecourts.gov.in/hcservices/ is also contended that the finding arrived at by the trial Court asto the genuineness of the document is not correct. Despite the factthat the respondent has not filed an appeal against that finding, itis permissible to the respondent while arguing for sustaining thatportion of the decree granted in favour of the respondent, advanceargument against that portion of the finding went against them.6. We heard the argument of the learned counsel on eitherside and perused the materials on record.7. Section 16(c) of the Specific Relief Act clearly mandatesthat specific performance of a contract cannot be enforced in favourof a person who fails to aver and prove that he has performed orhas always been ready and willing to perform the essential terms ofthe contract which are to be performed by him, other than terms theperformance of which has been prevented or waived by the defendant.It is true as per the explanation appended to sub-clause (c) ofSection 16, where a contract involves the payment of money, it isnot essential for the plaintiff to actually tender the same to thedefendant or to deposit in court any money except when so directedby the court. But the plaintiff must aver his readiness andwillingness to perform, the contract according to its trueconstruction. 8. In terms of provisions of Section 16(c) of the SpecificRelief Act, it is incumbent upon the plaintiff both to aver andprove that the plaintiff has performed or has always been ready andwilling to perform the essential terms of the contract which arerequired to be performed by him. Of course, it is true that in theplaint, at paragraph No.8, the plaintiffs have averred that theywere always ready and willing to perform their part of contract fromthe date of agreement of sale. However, while seeing whether theyhave established such readiness and willingness from 22.1.1995 i.e.,the date of execution of the agreement of sale, there is nothing onrecord to establish the readiness and willingness of the appellantsto perform the essential terms of the contract which are required tobe performed.9. In the Ex.A.2 notice dated 15.6.1995 issued by theadvocate for the appellants, it is stated that during the third weekof April, 1995, the respondent approached the appellants andrequested for further payment of Rs.5 lakhs with assurance thatwhile receiving the payment he would entrust the original titledeeds and other documents of the property. Though the appellantswere not not required to pay the said amount they have taken demanddraft in favour of the respondent for a sum of Rs.5 lakhs, but therespondent did not receive the payment and did not entrust theoriginal title deed despite the fact that the appellants haveapproached the respondent several times and further requested therespondent to furnish the necessary documents for preparation of thesale deed. https://hcservices.ecourts.gov.in/hcservices/

10. The appellants having entered into an agreement forpurchasing the property have kept quiet without taking anyeffective steps till Ex.A.2 was issued. It is common sense thathaving paid the huge sum of Rs.5 lakhs the appellants would havetaken the minimum step to get the land measured and the necessaryencumbrance certificate. The appellants being the purchasers wouldhave requested the respondent to measure the land and furnish thedetails as required in the agreement so as to enable them to getlong with the sale deed. The total silence till 15.6.1995 speaksvolumes about the inaction on the part of the appellants and in turnit is also explicit that the appellants have not established thatthey were all along ready and willing to perform their part ofcontract. In addition to that, the appellants have not takenslightest pain of preparing draft sale deed with the availablematerials while the appellants very meticulously stated so manydetails like how the respondent acquired the property etc., underthe agreement Ex.A.1. In addition to that, the appellants failed toestablish their capacity to produce purchase the property, despitethey have filed pass books to show that they are having necessaryfunds during the relevant period of time to perform their part ofthe contract. 11. On a mere perusal of Exs.A22 to A.24 it would be evidentthat the plaintiffs have a paltry sum in their account. Under Ex.A.9a pass book of P.W.1 marked and relied on by the appellants tocontend before us that they were having necessary funds would revealthat during January 1995, Rs.1,82,034/- was the balance available inher account. During the month of March, 1995, it was reduced toRs.346.50ps only. On 21.7.1995, a sum of Rs.12,30,982.43ps wasstated to be the balance. So, is the pass book Ex.A.10 in respect ofthe second plaintiff. In her account also, Upto June 1995, only apaltry sum of few thousand rupees was shown as balance and duringJuly, 1995, the balance was Rs.95,000/-. Thus, the amount depositedduring July in the plaintiff's account only goes to prove that theamounts have been deposited in the bank accounts for the purpose ofthis case on seeing the regular debit and credit entries in theaccounts. Even the account stood in the name of Srinivasan does notdisclose that sufficient funds are available in his account duringthe relevant period.12. Thus, it is obvious that the appellants have notestablished their readiness and willingness. A perusal of theentries in the pass books under Exs.A.9 and A.10 reveals that theappellants were not possessed with funds, since none of the entriesfor the relevant period shows that the plaintiffs were havingsufficient funds. There is no acceptable explanation from theappellants about the ability of the appellants to augment the fundsis available by way of evidence. Even assuming for a moment such aplea is put forth, we are afraid to accept the submission,particularly, when these documents are marked only at the instanceof the appellants to prove the capability to meet out thecontingency. https://hcservices.ecourts.gov.in/hcservices/

13. In addition to that, during the relevant period, if thesale consideration is over and above Rs.25 lakhs no objectioncertificate has to be obtained from the Income-tax Department byfiling necessary draft deed before it. No such action has been takenby the appellants, despite the fact, it is stated in the agreementthat no objection certificate has to be obtained. As per Income-taxDepartment, such application has to be filed within fifteen daysfrom the date of execution of the agreement in terms of Section 296-BC of the Income-tax Act, which was in force during the relevantperiod. 14. The evidence of P.Ws.1 and 2 would go to prove that eventhe husband of the first plaintiff is indebted heavily. There is nomaterials adduced to prove that the appellants have purchased stamppapers for execution of sale deed as per Ex.P.2. 15. On considering the cumulative effect of the evidenceadduced, we are of the considered view that the appellants havefailed to establish that they were always ready and willing toperform their part of the contract. Useful reference can be had tothe Division Bench judgment of this Court in the case ofMrs.SARADAMANI KANDAPPAN VS. MRS.S.RAJALAKSHMI reported in 2002(3)CTC 277 in which one of us (K.Raviraja Pandian,J.) was party to thejudgment.16. Learned counsel for the respondent contended that thefinding of the trial Court that Ex.A.1 agreement is a true andgenuine agreement and it has not been executed for the purpose ofsecuring the loan is not correct. By referring to Order 41 Rule 22of the Civil Procedure Code, he contended that the respondent evenwithout filing any cross appeal could challenge the adverse findingrendered by the trial Court, in an appeal filed by the appellantagainst the non-granting of the decree in his favour. In order tosupport this proposition, he relied on judgments of the SupremeCourt in the cases of DEVA RAM VS. ISHWAR CHAND AND ANOTHERreported in 1995(6) SCC 733, RAVINDER KUMAR SHARMA VS. STATE OFASSAM reported in AIR 1999 SC 3571, ANIL KUMARGUPATAV.MUNICIPALCORPORATION OF DELHI reported in AIR 2000 SC 659 and S.NAZEER AHEMDVS. STATE BANK OF MYSORE, (2007) 5 MLJ 768. 17. In the case of DEVA RAM VS. ISHWAR CHAND AND ANOTHERreported in 1995(6) SCC 733, the Supreme Court with reference toSections 96 and 100 and Order 43 Rule 1 of C.P.C., observed that "an appeal shall lie from every decree passed byany court exercising original jurisdiction to the courtauthorised to hear appeal from the decision of suchcourt. So also, Section 100 provides that an appeal shalllie to the High Court from every decree passed in appeal.Thus sine qua non in both the provisions is the ‘decree’and unless the decree is passed, an appeal would not lieunder Section 96 nor would it lie under Section 100 of https://hcservices.ecourts.gov.in/hcservices/ the Civil Procedure Code. Similarly, an appeal liesagainst an ‘order’ under Section 104 read with Order 43Rule 1 of the Civil Procedure Code where the ‘orders’against which appeal would lie have been enumerated.Unless there is an ‘order’ as defined in Section 2(14)and unless that ‘order’ falls within the list of ‘orders’indicated in Order 43, an appeal would not lie." While observing so, the Supreme Court further held that "an appeal does not lie against mere‘findings’ recorded by a court unless the findingsamount to a ‘decree’ or ‘order’. Where a suit isdismissed, the defendant against whom an adversefinding might have come to be recorded on some issuehas no right of appeal and he cannot question thosefindings before the appellate court. 18. In the case of RAVINDER KUMAR SHARMA VS. STATE OF ASSAMreported in AIR 1999 SC 3571, the Supreme Court has observed thatthe respondent/defendant in an appeal can without filing crossobjection attacked the adverse finding upon which a decree in parthas been passed against the respondent. For the purpose ofsustaining a decree to the extent the lower Court has dismissed thesuit against the defendant/respondent the filing of the crossobjection after 1976 amendment is purely optional and not mandatory.19. The case of ANIL KUMARGUPATAV.MUNICIPAL CORPORATION OFDELHI reported in AIR 2000 SC 659 was one in which writ petitionsfiled challenging the appointment of Civil Engineer in MunicipalCorporation. The High Court gave a finding that appointment of someof the candidates were tainted though their services were allowed tobe continued. On such facts, the Supreme Court held that such anadverse finding can be challenged by the candidates in appeals filedby the candidates who were not selected. 20. In S.NAZEER AHEMD VS. STATE BANK OF MYSORE, (2007) 5 MLJ768, the Bank filed a suit originally for recovery of the money andobtained a money decree against the appellant who borrowed a sum ofRS.1,10,000/- from the Bank for purchase of the bus and hypothecatedthe bus for repayment of the loan and further by equitablymortgaging two items of immovable property. When the decree wassought to be executed, by proceedings against the hypothecated bus,the bus could not be traced and money could not be recovered. Whenthe Bank tried to proceed against the mortgaged property inexecution, the trial Court accepted the defence that there was nodecree on the mortgage and the Bank cannot straight away sell theproperty. The Bank thereupon filed a suit for enforcement ofequitable mortgage. The appellant resisted the suit by pleading thatthe suit was barred by Order 2 Rule 2 of the Civil Procedure Code,that there was no valid and equitable mortgage created. The trialCourt held that the suit was not hit by Order 2 Rule 2 of the Codebut dismissed the suit holding that the suit was barred by https://hcservices.ecourts.gov.in/hcservices/ limitation. The trial Court also held that there was no creation ofvalid equitable mortgage. The Bank filed an appeal before the HighCourt. The High Court held that a valid and enforceable equitablemortgage was created and the suit was held to be in time, but hit byOrder 2 Rule 2 of the Code. Since the appellant had not challengedthe finding of the trial Court that the suit was not hit by Order 2Rule 2 by filing memorandum of cross objection, the plea in thatbehalf could not be and need not be upheld. In those factual matrixof the case, the Supreme Court has held that the respondent in anappeal is entitled to support the decree of the trial Court even bychallenging any of the findings that might have been rendered by thetrial Court against himself. For supporting the decree passed by thetrial Court it is not necessary for the respondent in appeal to filea memorandum of objection challenging the particular finding that isrendere21. The first citation was rendered with reference toSections 96 and 100 and Order 43 Rule 1 of the Civil Procedure Code.The second case is rendered on the facts when a part of the decreewent against the respondents. However, the third and fourth citedcases are on the issue. 22. Learned counsel for the respondent argued that theamount of Rs.4 lakhs has been borrowed for the purpose ofdischarging the loan to the Bank as well as to others from whom therespondent borrowed money for the purpose of marriage of threedaughters. Of course, a part of the amount of Rs.1,60,000/- has beenestablished to be paid to the Bank by evidence. But in respect ofthe balance amount, there is no acceptable evidence to support thecontention. The respondent also has not established before the trialCourt as well as before us when the daughters were got married andwhat was the amount borrowed and what was the amount unpaid duringthe relevant period of time when Ex.P.1 was executed. Even assumingthat the existence of the loan is true, the loan would have beenpaid back out of the sale consideration. We are of the view thatthere is no material worth consideration made available to acceptthe contention of the respondent that the Ex.A.1 agreement wasentered into with an intention not to act upon it and only forsecuring the loan borrowed.23. For the foregoing reasons, we are not able to take adifferent view than the one taken by the learned single Judge andthe appeal is dismissed. However, there is no order as to costs.Consequently the connected M.P.No.1 of 2009 is also dismissed.uskSd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ Copy to:1. The II Addl.Subordinate Judge, Coimbatore.2. The Section Officer, VR Section, High Court, Madras.+ 1 cc to Mr. V. Nicholas, Advocate, SR No.32782+ 1 cc to Mr. P.R. Ramakrishnan, Advocate, SR No.32754MBS(CO)SR/14.8.2009 Judgment in A.S.NO.56 of 2002