In the High Court of Judicature at Madras Dated: 26.08.2009 Coram: The Honourable Mr.Justice M.CHOCKALINGAM and The Honourable Mr.Justice R.SUBBIAH Original Side Appeal Nos.297 and 298 of 2008 and M.P.Nos.1 and 2 of 2009 Kalash Properties Pvt.Ltd., represented by its Chairman and Managing Director G.Kaliasundaram, having Office at J 75 Anna Nagar East, Chennai-600 102. ..Appellant in both OSAs. ..vs.. 1. Lilly Pushpam 2. Sheela 3. K.K.Ravi ..R1 to R3 in OSA 297/2008 and Respondents in OSA 298/2008 4. S.Sasikala ..R4 in OSA 297/2008 (R4 impleaded as party respondent vide Order of Court dated 20.10.2008 made in M.P.No.2 of 2008) Original Side Appeals filed under XXXVI Rule 1 of Original Side Rules read with Clause 15 of Letters Patent, against the common judgment and decrees dated 08.04.2008 passed by a learned single Judge of this Court in C.S.Nos.13 of 1997 and 559 of 1996 respectively. For Appellant : Mr.T.V.Ramanujam, Senior Counsel for Mr.T.V.Krishnamachari For Respondents : Mr.R.Krishnamoorthy, Senior Counsel and Mr.K.V.Venkatapathy, Senior Counsel for Mr.K.V.Sundararajan for R1 to R3 Mr.A.L.Somayaji, Senior Counsel for Mr.C.Ravichandran for R4 https://hcservices.ecourts.gov.in/hcservices/ COMMON JUDGMENT (Judgment of the Court was delivered by M.CHOCKALINGAM, J.,) These two appeals have arisen from a common judgment dated 08.04.2008 rendered by a learned single Judge of this Court in C.S.Nos.13 of 1997 and 559 of 1996 respectively. 2. The plaintiff in C.S.No.559 of 1996 sought for delivery of vacant possession of the plaint schedule property and for other reliefs with the following averments; (a) The plaintiff is the owner of the house, ground and premises bearing door No.F 188, IX Street, Anna Nagar East, Madras- 102. The Director of the defendant's company approached the plaintiff to purchase the property and pursuant to negotiation, it was agreed that the defendant would obtain permission from this Court by paying the sum of Rs.12,85,013.08 towards security for the release of title deeds which were given as security. Apart from that, the defendant shall pay a sum of Rs.59 lakhs as consideration to purchase the said property. Thus, the total consideration was fixed at Rs.71,85,013.08. The defendant also agreed to evict the tenant, who was occupying the house. The plaintiff received a total advance of Rs.2 lakhs on 30th January, 1995 and on 17th February, 1995. In the receipts issued by the plaintiff, all the above conditions have not been incorporated since they were receipts. The plaintiff had signed in the agreement even without going through the recitals because the signatures were obtained by the Director of the defendant's company while the plaintiff was boarding the train for Coimbatore. In the agreement, a clause has been included to the effect that the tenant shall vacate and hand over possession to the defendant's Director. In the said agreement, there was nothing to authorise the defendant to pay any amount to the tenant for evicting him. Pursuant to the agreement, the defendant got the tenant vacated and later on, the defendant brought some documents to show as if a sum of Rs.75,000/- was paid to the tenant in considerion of vacating the premises. The defendant also brought a draft sale deed to the plaintiff showing the sale consideration as Rs.59 lakhs, which was not acceptable to the plaintiff and hence, the transaction was not proceeded. No mention was made in the said draft sale deed with regard to the deposit of Rs.12 lakhs and odd to the Court for getting the permission and release of the documents. (b) The defendant filed a suit in C.S.No.1063 of 1995 on the file of this Court, claiming to be in possession of the said property and praying for the relief of a permanent injunction restraining the plaintiff from interfering with his possession and enjoyment till vacated under due process of law. He also filed an application in O.A.No.767 of 1995 and obtained ex parte interim injunction. In the said application, the defendant made it clear https://hcservices.ecourts.gov.in/hcservices/ that the defendant did not seek any protection under Section 53-A of the Transfer of Property Act, but claimed that the possession should be protected and the same should not be invaded by unlawful means. In the said application, interim injunction was granted on a finding that the defendant was not a trespasser and was entitled for the interim injunction. Even though it was originally agreed for sale of the property to the defendant, under law, the defendant was not entitled to enforce any right to purchase the property as there was no concluded contract. As there was no written agreement, the appropriate authority cannot issue no objection certificate and thereby, the same is hit by Section 269 UC of the Income Tax Act. Further, the actual total sale consideration has not been clearly mentioned. Further more, the defendant adopted illegal tactics to obtain possession, by colluding the then tenant and by obtaining interim injunction by suppressing the facts. Apart from the above, in view of the encumbrance of attachment ordered by this Court, the property cannot be alienated. In AAO No.1039 of 1992, this Court, by judgment dated 22.12.1995, has confirmed the attachment made by the trial court in I.A.No174 of 1992 in O.P.No.87 of 1990 on the file of District Judge, Coimbatore, and hence, there is no scope for sale of the said property at all. For the above reasons, any agreement for sale transaction for the said property is not subsisting, or has become invalid. In view of the plaintiff's receipts for a sum of Rs.2 lakhs, the defendant's possession can be permissive one in view of the findings rendered by this Court in O.S.A.No.206 of 1995. In fact, the plaintiff returned the said advance of Rs.2 lakhs but the defendant chose to send back the same to the plaintiff's advocate. The plaintiff was also prepared to return the sum of Rs.75,000/- alleged to have been paid by the defendant to the tenant to obtain vacant possession. Thus, in all, the plaintiff was ready to pay the sum of Rs.2.75 lakhs. The defendant is not protected under any provisions of law. Any expenditure alleged to have been incurred by the defendant for getting vacant possession from the tenant is unauthorised and the plaintiff was bound to pay the same. As stated above, the plaintiff was prepared to pay the arrears of rent for 3 months at Rs.7,150/- per month. Thus, as agreed by the plaintiff, the amount payable by the plaintiff was Rs.2,00,000/- + Rs.75,000/- minus Rs.25,000 = Rs.2,50,000/-. The defendant is in occupation of the property from 02.06.1995. If the property is let out, it would have fetched Rs.20,000/- per month and hence he is liable to compensate the same and hence, the plaintiff was entitled for damages for use and occupation from the defendant from 02.06.1995 till the property's vacant possession is handed over to the plaintiff at the rate of Rs.20,000/- per month. The past damages from 02.06.1995 to 31.07.1996 at Rs.20,000/- per month (for 14 months) works out to Rs.2,80,000/- and after adjusting the sum of Rs.2.50 lakhs payable by the plaintiff, the balance of past damages payable by the defendant works out to Rs.30,000/- and also liable to pay future damages with effect from 01.08.1996 till the date of https://hcservices.ecourts.gov.in/hcservices/ handing over vacant possession. 3. The defendant filed a written statement on the following averments: (a) The suit is not maintainable either in law or on facts. Though the suit property belonged to the plaintiff, he has not disclosed to the defendant that the same was given as security. The said fact was disclosed only for the first time in this suit. In fact, the transaction was hampered only due to non-production of original documents. There is an agreement to purchase the suit property. It is emphatically denied that there is no such arrangement or agreement to the effect that this defendant should get permission from this Court or to pay the amount as stated in the plaint. The earlier suit filed by the plaintiff and the findings of this Court in the interlocutory application will speak much about the misrepresentation by the plaintiff. The fact that there was collateral security in the property was not disclosed before the agreement. If at all such agreement was ever agreed, the said clause would be vital to the transaction and the same would have been found place in the documents made available in respect of the transaction. The total consideration agreed to the transaction is only Rs.59 lakhs and not Rs.71 lakhs and odd as stated in the plaint. (b) It is true that the defendant agreed to purchase the suit property, which was in the occupation of the tenant, by name, Shanthi Devadoss, who was running a school in the said premises. The plaintiff wanted the defendant to initiate and persuade the said tenant to vacate the said premises at his own expenses and to pay back the advance of Rs.75,000/-. The defendant agreed to the said course and did his best to persuade the tenant to agree to vacate at considerable expenses and manoeuvred to bring about an agreement between the plaintiff and the tenant on 10.02.1995 whereby the tenant has agreed to vacate on receipt of certain money. In fact, the defendant, at his expenses, has brought the plaintiff to Madras from Coimbatore, to sign in the said agreement. Immediately on entering into the said agreement, the plaintiff passed on a letter on 17.02.1995 authorising the defendant to settle the terms of the tenant and take possession. Accordingly, the defendant settled her terms apart from returning the said advance of Rs.75,000/- received by the plaintiff from the tenant and the said tenant delivered possession of the suit property on 02.06.1995 to the defendant and executed a document for delivery of possession. In fact, the defendant has spent Rs.5 lakhs inclusive of the advance to meet other contingencies and to stabilise his possession. The defendant, after taking possession of the suit property, has been persuading the plaintiff to show the original sale deed granted in his favour by the Housing Board to proceed further. Strangely enough the attitude of the plaintiff had changed and thereafter, it is learnt that the Vigilance and Anti Corruption police cell proceeded against the plaintiff for having https://hcservices.ecourts.gov.in/hcservices/ properties disproportionate to his known source of income and impounded his properties in Coimbatore and in order to get the same released, the plaintiff has given the original sale deed of the suit property in this Court as a security. When the plaintiff was confronted with the xerox copy of the order of this Court, he could not give any satisfactory explanation but wanted him to deposit a sum of Rs.12.85 lakhs in Court. The plaintiff has deliberately suppressed the fact that he was not having the original title deed with him at the time of entering into the agreement and receiving Rs.2 lakhs; on the other hand, the plaintiff represented that he would show the original sale deed at the time of finalising the terms and handed over xerox copies of the property tax receipts, electricity receipts and water charges receipts. In order to give a colour of reality as if the defendant has been creating trouble, a complaint was lodged by the plaintiff with police on 17.07.1995 and the defendant was called upon by the police. The Inspector of Police, after personally inspecting the suit property and the records, found that the complaint of the plaintiff to be false and warned the plaintiff not to interfere with the defendant's possession. He filed C.S.No.1063 of 1995 before this Court for an injunction. The plaintiff caused the police authorities to initiate proceedings under section 145 Cr.P.C. with the ulterior object of dispossessing the defendant. The defendant had to spend heavily to counter the illegal acts of the police by getting the said order quashed in this Court. The said act of the plaintiff clearly disclosed the intention not to honour his commitments. This is yet another instance to show that the plaintiff has been putting up obstacles at every stage to defeat the rights of the defendant under the suit contract. The defendant filed Application No.767 of 1993 for a temporary injunction and the same was allowed on 18.08.1995. Aggrieved over the same, the plaintiff filed O.S.A.No.206 of 1995 and the same was dismissed on 19.09.1995. Thereafter, the defendant has been sending words through his counsel to the then counsel of the plaintiff to amicably settle by executing the sale deed in accordance with the agreement entered into on 30.01.1995. The defendant expressed his readiness to deposit Rs.12.85 lakhs in cash before this Court to get back the original title deeds deposited by the plaintiff in this Court. The defendant was informed by the plaintiff's then counsel that on his advice the plaintiff filed a petition to permit him to substitute cash security instead of deposit of title deeds. Such a suggestion was made by the defendant in the interest of both. The defendant had to spend heavy sum by way of court fees for filing a suit for specific performance and the matter is likely to drag on for several years. Later on, it was learnt that the advice given by the then counsel for amicable settlement was not heeded to and the plaintiff changed his counsel and caused a notice to the defendant through his present counsel on 10.07.1996 suppressing the facts. The defendant and the plaintiff entered into an agreement on 30.01.1995, by which the plaintiff agreed to sell the suit property https://hcservices.ecourts.gov.in/hcservices/ for Rs.59 lakhs and received an advance of Rs.50,000/- on that day. Subsequently, pursuant to the said agreement, a sum of Rs.1.50 lakhs was received by him on 17.02.1995. The said agreement was referred to in the order passed by a single Judge of this Court in O.A.767 of 1995 and in the order passed by the Division Bench also. (c) The plaintiff has admitted the execution of the suit agreement in his proceedings initiated recently in this court but stated that the sale, in pursuance of the suit agreement, could not be processed as he failed to get permission from this Court. There is absolutely no necessity to get the permission from any quarter when once the owner entered into an agreement to sell the property to some one. The suit contract cannot be said to be incapable of performance as the sale deed can be effected by directing the defendant to assist him to get the original title deed released by discharge of the security. The plaintiff is bound under law to perform his part of the contract and he cannot be allowed to wriggle out of the same on false pretext, which is not sustainable in law. As the consideration for the sale exceeds Rs.10 lakhs, permission has to be obtained from the appropriate authorities at that period and so, a draft sale deed was prepared and given to the plaintiff in the first week of March, 1995 for his approval, so that the same could be sent to the appropriate authorities; but the plaintiff did not approve the sale deed. The plaintiff has stated in the counter affidavit in I.A.767 of 1995 in C.S.No.1063 of 1995 that the sale deed did not contain a clause for release of the title deeds given as security in furtherance of the proceedings of the Anti-Corruption and Vigilance Squad against the plaintiff. In fact, this aspect was completely suppressed at the time of the suit contract and the defendant came to know about the same after the execution of the suit contract. The defendant has never agreed to deposit Rs.12.85 lakhs into court apart from the sale consideration of Rs.59 lakhs and the false plea of agreeing to deposit Rs.12.85 apart from Rs.59 lakhs has been trotted out only for the purpose of protracting the execution of the sale deed and thereby wriggling out of the suit contract. The plaintiff cannot be allowed to commit breach of the terms of the said contract and escape from his liability to execute the sale deed. The plaintiff is bound to execute the sale deed in accordance with the terms of the contract dated 30th January, 1995. Since the plaintiff has refused to do so, no alternative but to file the suit for specific performance of the contract. The defendant has always been ready and willing to perform his part of the contract. In view of the conduct of the plaintiff, the defendant has filed a comprehensive suit C.S.No.13 of 1997 for specific performance of contract complied with the right created under section 53-A of the Transfer of Property Act. Hence, the suit filed by the plaintiff has got to be dismissed with costs. 4. In C.S.No.13 of 1997, the plaintiff has made the following averments; https://hcservices.ecourts.gov.in/hcservices/ The plaintiff is a dealer in real estates and promoter of flats. In the second week of January, 1995, the plaintiff and the defendant entered into an oral agreement, whereby the plaintiff agreed to purchase and the defendant agreed to sell the suit property for a sum of Rs.59 lakhs and paid a sum of Rs.2 lakhs as advance, for which he was issued receipts. He has reiterated the contentions made in the written statement filed in C.S.No.559 of 1996. Hence, the plaintiff filed the suit for specific performance of the contract under the agreement of sale dated 30.01.1995 entered into between the parties. 5. Pending suit, the defendant, namely, Kandasamy, died and his legal representatives were brought on record as defendants 2 to 4. The defendants reiterated the contentions raised by the plaintiff in C.S.No.559 of 1996 and prayed that the suit has got to be dismissed on the grounds that there was no concluded contract; that the suit was hit and barred under Order II Rule 2 C.P.C; that the plaintiff did not adhere to the statutory provisions of the Income Tax Act, 1961, and the plaintiff, being a real estate promoter, has no means and he has not been ready and willing to perform his part of the contract. 6. On the above pleadings, the learned trial Judge heard both the suits together and framed six issues in each of the suits. One G.Kaliasundaram, the Director of M/s.Kalash Properties Private Limited was examined as P.W.1 and one K.K.Ravi, the 4th defendant was examined as D.W.1 and they relied on Exs.P-1 to P-3 and Ex.D-1. The learned trial Judge, on a scrutiny of the materials available and also on a consideration of the submissions made, held that the plaintiff in C.S.13 of 1997, who is the appellant herein, was not entitled to any relief in that suit and dismissed the same. In so far as C.S.No.559 of 1996 is concerned, the learned Judge granted a decree to the defendants, who are the respondents herein, for recovery of possession and also for future mesne profits. Aggrieved over the same, the present appeals have been broughtforth before this Court. The parties are hereinafter referred to as they are arrayed in C.S.No.13 of 1997, to avoid confusion. 7. Advancing the arguments on behalf of the plaintiff, who is the appellant herein in both the appeals, Mr.T.V.Ramanujam, the learned senior counsel would submit that from Exs.P-1 and P-2, it would be quite clear that there is a concluded contract of sale; that the trial Judge has not appreciated the receipt dated 30th January, 1995 marked as Ex.P-1, wherein it would clearly mention that the deceased defendant has received Rs.50,000/- as token advance from the plaintiff/appellant on 30th January, 1995 for the sale of the suit property for a total consideration of Rs.59 lakhs; that equally, the trial Judge should have appreciated Ex.P-2 dated 17.02.1995, wherein also it was stated that Rs.1.50 lakhs by way of demand drafts was given by the plaintiff on 17.02.1995 as further https://hcservices.ecourts.gov.in/hcservices/ token advance for the sale of the suit property and thus, he has received Rs.2 lakhs totally as token advance; that a perusal of Exs.P-1 and P-2 would show that there was a concluded contract for sale and it satisfied the necessary ingredients for agreement of sale, namely, vendor, purchaser, subject matter of sale and sale consideration. The vendor was the defendant and the plaintiff/appellant was the purchaser, the subject matter of the sale was the suit property, namely, the house at F-188, Anna Nagar, Madras and the agreed sale consideration was considered as Rs.59 lakhs and hence, the finding of the trial Judge that there was no concluded contract was contrary to the documentary evidence. 8. Added further the learned senior counsel that it was clear from the evidence of P.W.1 that he got the tenant Shanthi Devadoss evicted by paying money to her and admittedly, P.W.1 was in possession of the suit property and that was why C.S.559 of 1996 was filed for recovery of possession; that there was a criminal case of corruption filed by the Director of Vigilance and Anti- Corruption against the defendant for having properties disproportionate to known source of income and the defendant has deposited the original title deeds of the suit property as security to the value of 12.85 lakhs in the said criminal case; that the defendant attempted to forcibly dispossess the plaintiff from the suit property, which necessitated the plaintiff to file the suit for permanent injunction in C.S.1063 of 1995 before this court, in which possession was protected by granting an order of interim injunction; that the provisions of Sections 269 UC and 269 UD of Income Tax Act were not attracted to the facts and circumstances of the case and they were directory and not mandatory and that the provisions of section 269 UC and 269 UD of the Income Tax Act were not a bar for granting a decree for specific performance and hence, the findings of the trial court were erroneous. 9. The learned senior counsel would further add that the finding rendered by the trial court in C.S.13 of 1997 that it was hit and barred under Order II Rule 2 C.P.C. was not correct; that he filed the first suit i.e. C.S.No.1063 of 1995, at the time when the lawful possession of the plaintiff was attempted to be interfered with and there was a threat, which gave him a cause of action and subsequently, the comprehensive suit was filed, in which cause of action was distinct and different and the earlier suit was also pending before this Court and hence, it is not a fit case where Order II Rule 2 could be applied to bar the suit; that in so far as the readiness and willingness was concerned, the trial Judge has not properly appreciated the issue and it is the case, where the plaintiff has already paid Rs.2 lakhs, as seen from Exs.P-1 and P-2 Ex.P-2 all along the period; that it is also quite clear from the evidence of P.W.1; but this was not appreciated by the trial court; that it is pertinent to point out that there was a reciprocal promise and if to be so, the defendant owner was under https://hcservices.ecourts.gov.in/hcservices/ obligation to perform his part; that having failed his part of the contract, the defendant/owner could not be allowed to complain that the plaintiff/appellant was not ready and willing to perform his part of the contract; that it is pertinent to point out that as per the original agreement entered into and as could be evidenced from Exs.P-1 and P-2, the total sale consideration was only Rs.59 lakhs and the balance payable was Rs.57 lakhs, which alone the plaintiff should be ready and willing to pay; that on the contrary, it was the 4th defendant, who, made it clear that the consideration was not only Rs.59 lakhs but also Rs.12,85,013/-, which was to be deposited in the High Court to release the document; that at the earliest, the owner of the property (deceased defendant) did not reveal that the documents pertaining to the property were in the custody of the High Court on security; that after receiving the advance, it was came to the knowledge