IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 25-7-2008 CORAM THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM AND THE HONOURABLE MR.JUSTICE K.VENKATARAMAN O.S.A.Nos.381 to 384 of 2003 and CMP Nos.17330 to 17333 of 2003 1.M/s.Ramnath Publications Pvt. Ltd., represented by its Managing Director K.Natarajan 2.K.Natarajan .. Appellants in all appeals vs A.R.Madana Gopal .. Respondent in OSA 381/2003 K.Rajendran .. Respondent in OSA 382/2003 A.R.Ravichandran .. Respondent in OSA 383/2003 A.R.Venkatesh .. Respondent in OSA 384/2003 Original side appeals preferred under Order XXXVI Rule 1 of O.S. Rules read with Clause 15 of Letters Patent against the judgment and decree dated 17.7.2003 passed by this Court in C.S.Nos.826 and 983 of 2000 and 111 and 112 of 2001. For Appellants : Mr.A.L.Somayaji, Senior Counsel for Mr.M.Balasubramanian For Respondent in OSA 381/2003 : Mr.M.Venkatachalapathy Senior Counsel for Mr.M.Sriram https://hcservices.ecourts.gov.in/hcservices/ For Respondents in OSA 382 to 384/2003 : Mr.AR.L.Sundaresan Senior Counsel for Mr.M.Murali COMMON JUDGMENT (Judgment of the Court was delivered by M.CHOCKALINGAM, J.) This judgment shall govern these four appeals in OSA Nos.381 to 384 of 2003. 2.These appeals challenge a common judgment of the learned Single Judge of this Court made in C.S.Nos.826 and 983 of 2000 and 111 and 112 of 2001. 3.The plaint averments in C.S.No.826 of 2000 are as follows: (a) The suit property belonged to the first defendant, a firm, which was being represented by the second defendant. They offered to sell the property to the plaintiff. The price fixed was Rs.9,25,000/-. The suit property is 1/4th undivided share of land situated at Door No.325, Arcot Road, Vadapalani, Chennai 600 026. A written agreement was entered into between the plaintiff and the first defendant on 20.3.1991, and a sum of Rs.25,000/- was paid to the first defendant as advance. As per the agreement, the sale shall be concluded within a period of four months, and the vendors shall deliver all relevant title deeds to the purchaser at the time of the payment of the 2nd advance of Rs.2,75,000/-. The vendors also agreed for the demolition of the building and for removal of the material contained in the building. The plaintiff paid amounts to the extent of Rs.8,50,000/- on different dates, and the balance due was Rs.75,000/-. The plaintiff's two brothers and father also entered into separate agreement on 20.3.1991 with the first defendant for the purchase of 1/4th undivided share of land in the said property. The sale consideration for each agreement was fixed at Rs.9,25,000/-. Thus, the entire property was agreed to be purchased by the plaintiff, his father and brothers. (b) The first defendant had applied to the Income Tax Authorities to issue permission in order to facilitate execution of the sale deed to the plaintiff and other agreement holders. The said authorities initiated proceedings for compulsory acquisition of property. An order was passed by the authorities holding that the said property was fit to be purchased by the Central Government under the provisions of the Income Tax Act, and final order was passed on 22.2.1993. The department wanted to take possession of the property. The first defendant filed WP No.4588/93 and challenged the order passed on 22.2.1993. The plaintiff, his brothers and father also filed writ petitions in this regard. On 11.9.1998, this Court has passed an order holding that the provision permitting compulsory purchase was inapplicable in respect of the suit property, and the writ petition was allowed. Because of these proceedings, the plaintiff and the first defendant https://hcservices.ecourts.gov.in/hcservices/ voluntarily entered into a Memorandum of Understanding on 24.1.1994 in continuation of the agreement dated 20.3.1991, as per which the first defendant was permitted to keep the original title deeds with them until completion of the sale by registration of the sale deed, and it also refers the payment made towards sale consideration. (c) After the disposal of the said writ petition, the plaintiff has been requesting the first defendant to receive the balance of consideration and execute the sale deed. The first defendant has been telling that the Income Tax Department have taken steps for filing an appeal against the decision rendered in the writ petition. The first defendant filed a suit against the plaintiff's father in O.S.No.3400/98 on the file of the XVIII Assistant City Civil Judge, Chennai, and it was resisted by him. For reasons best known, the defendants have been postponing the execution of the sale deed. The plaintiff has been ready and willing to perform his part of the contract. The plaintiff is ready to pay or deposit the balance of sale consideration to the first defendant at any time. On account of default or inaction and delay on the part of the first defendant alone, the sale could not be completed. The first defendant is free to remove the superstructure before delivery of possession of suit property, but not afterwards. The plaintiff had to approach the first defendant directly and through his men for the fulfillment of the contract. The defendants are also attempting to encumber the property to defraud the plaintiff's rights. Hence, the plaintiff sought for a decree for specific performance of the agreement of sale, a direction to the plaintiff to deposit the balance amount of Rs.75,000/- within the time fixed by the Court, a direction to the defendants to execute a sale deed and to deliver vacant possession of the suit property to the plaintiff and a decree for permanent injunction restraining the defendants from alienating or encumbering the suit property. 4.The averments in the other plaints in C.S.Nos.983 of 2000 and 111 and 112 of 2001 are in the same lines. The plaintiffs therein paid Rs.9,00,000/-, Rs.8,50,000/- and Rs.8,00,000/- respectively on different dates. 5.The suit in C.S.No.826 of 2000 was contested by the defendants by stating that apart from the 2nd defendant, there are five other Directors of the first defendant company, and they have not been impleaded as parties. The other five Directors are neither inclined nor had given any consent for selling the suit property at any point of time. Thus, the suit is barred for non- joinder of necessary parties. In the year 1999, the market value of the property in that area was Rs.25 lakhs per ground. The suit property consists of 3 grounds and 1950 sq. ft. with ground and first floor building. The suit agreement dated 20.3.1991 had been superseded by a memorandum of understanding on 24.1.1994. But, the suit has been filed only in the year 2000, after a lapse of 9 years from the date of agreement. The plaintiff entered into the memorandum of understanding agreeing to get the refund of the advance amount with interest at 9% per annum. This is nothing but https://hcservices.ecourts.gov.in/hcservices/ a novation of contract. Any purported attempt made by the plaintiff to enforce the pre-existing, but a time barred contract which is 10 years old, is hopelessly time barred and non-est in the eye of law. Hence, the question of relying on the clauses in the defunct agreement of sale will be of no use. The plaintiff deliberately undervalued the suit property. The decision rendered by this Court as has been cited by the plaintiff, has been recently overruled by the Supreme Court of India besides confirming the view taken on this aspect by the Bombay High Court in similar matters. The parties herein originally agreed that time is the essence of the contract. The sale shall be concluded within a period of four months. Subsequently, the said agreement has been rescinded by a memorandum of understanding between the parties on 24.1.1994 which is nothing but a novation of contract. A mere pendency of the writ petition will not prevent the plaintiff herein from enforcing the agreement of sale in a court of law. The writ petition filed by the parties cannot be considered as a 'lis'. Admittedly, the suit has been filed after a period of more than 9 years from the date of agreement of sale, after 6 years and 9 months from the date of memorandum of understanding and after 2 years and 1 month from the order passed by this Court in the writ petition. The plaintiff has miserably failed to establish that he was always ready and willing to perform his part of the contract. Therefore, he is not entitled to the reliefs prayed for in the plaint. The plaintiff is not at all interested in enforcing the contract and he allowed the same to become time barred. The suit agreement of sale and the memorandum of understanding lapsed by efflux of time, and the same cannot be pressed into service. The plaintiff as a partner entered into a lease agreement with the defendants on 10.2.1994 in respect of the entire first floor as well as the godown at the ground floor. The plaintiff committed willful default in payment of rents. The defendants filed a petition in RCOP No.248/99 for eviction, and the same is pending on the file of the Rent Controller, Chennai. The key of the entire ground floor portion is with the Indian Bank, Kodambakkam Branch. The Indian Bank filed a suit for recovery against the defendants. The plaintiff and family members made an attempt to trespass into the ground floor. The defendants and the Indian Bank complained the matter before the local police station. The defendants also filed a suit in O.S.No.3400/98 on the file of the City Civil Court, Madras, seeking a permanent injunction restraining the plaintiff and his family members from interfering with the peaceful possession of the ground floor of the suit property. Hence, the suit was liable to be dismissed. 6.The allegations made in the written statements in C.S.Nos.983 of 2000 and 111 and 112 of 2001 are in the same lines. 7.On the above pleadings, nine issues were framed. The parties went on trial. One Madanagopal was examined as P.W.1, and 27 documents were marked on the side of the plaintiff. The second defendant was examined as D.W.1 and no documents were marked on the defendants' side. The learned trial Judge after hearing the submissions made and looking in to the evidence, decreed all the suits as prayed for. Hence, these appeals at the instance of the defendants. https://hcservices.ecourts.gov.in/hcservices/ 8.The points that would arise for consideration are: (i) Whether the plaintiffs are entitled for the relief of specific performance? (ii) To what relief the parties are entitled? 9.Advancing the arguments on behalf the appellants, the learned Senior Counsel would submit that the suit agreements were entered into between the parties on 20.3.1991; that the plaintiffs in all the suits belonged to one and the same family; that the suits were filed by the plaintiffs in October and December 2000 respectively, and thus, it would be quite clear that the suits were filed after a period of 9 years; that the memorandums of understanding were entered into between the parties on 24.1.1994; that the plaintiffs have filed the suits 6 years after the memorandums of understanding; that the writ petition filed by the appellants challenging the acquisition proceedings, was disposed of on 11.9.1998, and thus, the suits were filed after 2 years from the date of the disposal of the writ proceedings. 10.Placing reliance on the judicial pronouncements, the learned Senior Counsel would urge that the plaintiff in a suit for specific performance should prove the readiness and willingness to perform his part of the contract from the date of agreement till the date of filing of the suit, and only then, he would be entitled to get the equitable relief of specific performance; that in the instant case, except the bald averments in the plaints that the plaintiffs were ready and willing to perform their part of the contract all along, no proof was adduced to accept the same; that mere averment in the plaint would not be sufficient; but, there must be proof to accept the same; that P.W.1 has categorically admitted that he had not produced any proof for the alleged breach; that all along these period, the plaintiffs never sent even one letter or notice informing their readiness and willingness to perform their part of the contract as contemplated under Sec.16(c) of the Specific Relief Act; that the plaintiffs have averred that they approached the defendants in 2000 and wrote some letters; but, no scrap of paper was produced before the trial Court; and that on the point of readiness and willingness, on the basis of mere pleadings in the plaints without any proof whatsoever, the trial Court has accepted that the plaintiffs were ready and willing to perform their part of the contract. 11.Added further the learned Senior Counsel that the memorandums of understanding were entered into in the year 1994 wherein it has been clearly and categorically admitted by the parties that immediately after the disposal of the writ petitions, the sale deed should be executed; that the writ petitions were disposed of by this Court on 11.9.1998; that due to the filing of the suits in 2000, there was an interregnum period of 2 years and 3 months; but, neither steps were taken by the plaintiffs, nor even any notice or letter was issued, and thus, there was no proof at all; that the entire first floor of the suit property was in the occupation of the plaintiffs; that it was not in part performance of the contract, but as a tenant; that they have committed willful default in payment of rent which constrained the respondents to https://hcservices.ecourts.gov.in/hcservices/ file a petition in RCOP 248/99 as could be seen under Ex.P27; that even prior to the agreements entered into between the parties, a branch of the Indian Bank was occupying the ground floor; that the plaintiffs attempted to interfere with the possession of the bank; that both Indian Bank and the defendants gave complaint to the jurisdictional police; that the defendants also filed O.S.No.3400 of 1998 for a permanent injunction before the City Civil Court to restrain the plaintiffs from trespassing into the ground floor of the suit property, and thus, it would be quite clear that the relationship between the parties became strained; that if to be so, the contention put forth by the plaintiffs' side that they were making demand personally and through their men was an utter falsehood which should have been rejected by the trial Court; that the said conduct would be indicative of the recalcitrant attitude and inaction on the part of the plaintiffs; that the trial Court has placed reliance on the interested testimony of P.W.1 which was self serving also; that the same was not corroborated by any independent evidence either oral or documentary; and that the circumstances would clearly indicate that the evidence of P.W.1 that he made demand on the defendants to execute the sale deed; but, they did not perform their part was false. 12.The learned Senior Counsel would further submit that all the suits were filed in October and December 2000 respectively alleging that the defendants were about to alienate the suit property which impelled the plaintiffs to file the suits in 2000; that it is pertinent to point out that the suits were filed after 9 years from the original agreements and 6 years from the date of memorandums of understanding; that there was nothing to indicate that the defendants committed any breach of the agreements in 2000 or it gave rise to the cause of action for filing the suits; that the trial Court has come to the said conclusion without any material whatsoever; and that the plaintiffs have not whispered any breach of the agreements by the defendants. 13.Advancing his arguments further, the learned Senior Counsel would submit that the crucial legal aspect which has to be appreciated is that for the non-performance of the part of the contract by the plaintiffs under Sec.16(b) of the Specific Relief Act, the plaintiffs were disentitled to enforce the defunct agreements; that as per the agreements, the plaintiffs agreed to purchase 1/4th undivided share of the land and the defendants should demolish the superstructure and hand over the land to the plaintiffs; that P.W.1 has categorically admitted that the plaintiffs were in physical possession of the first floor and a portion in the ground floor; that Ex.P27 was the document to establish the same, and hence, the defendants could not demolish the building without the vacation of the plaintiffs from the suit property; that the trial Judge proceeded with the finding as if the defendants were in possession and enjoyment of the entire property and they were to hand over possession, but factually not so; and that it is not a case where the plaintiffs were put in possession of the property as a part performance of the contract under Sec.53A of the Transfer of Property Act; but, they were in occupation only https://hcservices.ecourts.gov.in/hcservices/ as tenants and committed willful default also. 14.Added further the learned Senior Counsel that it was a case where the suits were not only filed beyond the period of limitation, but also the laches on the part of the plaintiffs would disentitle them to get the equitable relief of specific performance; that to obtain the relief of specific performance on the strength of an agreement for sale, the plaintiff should approach the Court with clean hands apart from proving his readiness and willingness throughout under Sec.16(c) of the Specific Relief Act; that in the instant case, the plaintiffs have neither proved that they were ready and willing to perform their part of the contract throughout which is mandatory under Sec.16(c) of the Specific Relief Act, and also the conduct would clearly indicate that they were not entitled to even ask for the relief; that the suit agreements have stipulated four months' time to complete the transaction; but, admittedly, the suits were filed after 9 years from the time of agreements; that the memorandums of understanding were only novation of the earlier agreements; that even under the memorandums of understanding, it was agreed that the sale deed should be executed immediately on the disposal of the writ petition; but, for a period of 2 years, the plaintiffs have not taken any steps whatsoever; that it is also to be considered that during the relevant point of time i.e., in 1991, the guideline value of Kodambakkam High Road was Rs.20 lakhs per ground; but, the entire property measuring 3 grounds and 1950 sq. ft. was valued at Rs.38 lakhs; that it was a case of deliberate under valuation of the suit property; that the Income Tax Department also inclined to purchase the same at that time; that the said fact was admitted by P.W.1 in evidence; that it is pertinent to point out that the plaintiffs were never prevented in law from instituting the suits at the earliest point of time seeking the relief of specific performance; that P.W.1 has categorically admitted that the conditions stipulated in all the agreements were to demolish the building, get income tax clearance and hand over original documents after payment of the first instalment of Rs.2.25 lakhs; but, the plaintiffs were in possession of the entire first floor even during the time of filing the suits; that under the circumstances, the question of complying with the conditions stipulated in the agreements did not arise; that P.W.1 has categorically admitted that the appropriate authority wanted to acquire the property, and the first defendant who undervalued the purchase value, filed the writ petition in the Court; that it would be quite clear that the plaintiffs have not adduced any proof that they were ready and willing to perform their part of the contract from the time of agreements till the time of the suits; that apart from that, the conduct of the plaintiffs would clearly indicate that they were not also entitled for the relief; that under the circumstances, the trial Court should have rejected their claim, and hence, all the appeals have got to be allowed by dismissing the suits. 15.In support of his contentions, the learned Senior Counsel relied on the following decisions: (i) (1997) 3 SUPREME COURT CASES 1 (K.S.VIDYANADAM AND OTHERS V. VAIRAVAN); https://hcservices.ecourts.gov.in/hcservices/ (ii) (2002) 9 SUPREME COURT CASES 582 (PUSHPARANI S. SUNDARAM AND OTHERS V. PAULINE MANOMANI JAMES AND OTHERS); (iii) (2005) 6 SUPREME COURT CASES 243 (UMABAI AND ANOTHER V. NILKANTH DHONDIBA CHAVAN AND ANOTHER) and (iv) (2006) 2 SUPREME COURT CASES 496 (H.P.PYAREJAN V. DASAPPA AND OTHERS). 16.Contrary to the above contentions, the learned Senior Counsel for the respondent in OSA No.381 of 2003 would contend that it is true that the plaintiffs in those four suits have entered into agreements with the defendants who are the owners of the property, as found under Exs.P4 to P7; that it was clearly agreed that the total consideration covered under all these four agreements for the sale of the property was Rs.37 lakhs, out of which the plaintiff in CS 826 of 2000 paid Rs.8.5 lakhs; the plaintiff in CS 983/2000 paid Rs.9 lakhs; the plaintiff in CS 111/2001 paid Rs.8.5 lakhs and the plaintiff in CS 112/2001 paid Rs.8 lakhs, and thus, they have paid Rs.34 lakhs out of Rs.37 lakhs consideration; that what was remaining was only Rs.3 lakhs; that it is not the case of the defendants/appellants that they did not have sufficient funds to pay or they were unable to pay; that the defendants in order to avoid the agreements for sale and also the subsequent memorandums of understanding, took all defence pleas which were vexatious and unfounded to their knowledge; that admittedly, after the agreement was entered into between the parties, permission was sought for by the first defendant; that the income tax authorities initiated acquisition proceedings in March 1993 which necessitated the defendants to file WP No.12449/93; that considering the situation, the parties entered into memorandums of understanding as could be seen from Exs.P15 to P18 on 24.1.1994; that a reading of the memorandums of understanding would clearly reveal that they desired to continue the original agreements; and that nowhere it was stated that the memorandums of understanding were the substitution of the original agreements; but, on the contrary. 17.Added further the learned Senior Counsel that the final orders came to be passed only in the year 1998; that it is pertinent to point out that out of the total consideration of Rs.37 lakhs, Rs.34 lakhs was paid from March 1991 the time of the agreements till January 1994, the time of the memorandums of understanding; that in the instant case, the contention put forth by the appellants' side that the plaintiffs were never ready and willing to perform their part of the contract was to be discountenanced; that it has been rightly done by the trial Court; that out of the sale consideration of Rs.37 lakhs, Rs.34 lakhs was paid in between 1991 and 1994; that if the plaintiffs were actually not ready and willing to perform their part of the contract, they would not have paid the major part of the sale consideration leaving only Rs.3 lakhs; that it is pertinent to point out that the writ proceedings were initiated pursuant to the acquisition proceedings and final orders came to be passed in September 1998; that till the time, the sale deed could not be executed; that from 1998 onwards, the plaintiffs were personally and through their men https://hcservices.ecourts.gov.in/hcservices/ also insisting for the execution of the sale deed for which it was replied by the defendants that the income tax department have taken steps to prefer an appeal from the orders passed in the writ petitions; that even after waiting for a period of 2 years, they could not accept the evasive answers of the defendants, and under such circumstances, they filed the instant suits. 18.Added further the learned Senior Counsel that it is true that at the time when the agreements were entered into between the parties, the possession of the first floor of the property was not handed over to the plaintiffs; but, after the memorandums of understanding were entered into between the parties on 24.1.1994, the plaintiffs