IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15/07/2002 CORAM THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM C.S.No.443 of 2000 and C.S.No. 444 of 2000 and O.A.Nos.576 and 577 of 2000 M/s.Sunil Anand & Co.P.Ltd., represented by its Managing Director, Arjunlal Sundardas .. Plaintiff in CS 443 of 2000 M/s.Sunderdas Arjunlal by Managing Partner Arjunlal Sunderdas .. Plaintiff in CS 444 of 2000 vs 1. Cleetus Vincent 2. Tmt.Imelda Cleetus 3. Vinjane Constructions (formerly Vinjane Centre) rep.by Managing Partner : Cleetus Vincent .. Defendants in both the suits !For Plaintiffs : Mr.K.V.Venkatapathy, Senior Counsel, for Mr.M.Rajasekaran ^For Defendants : Mr.P.J.George :COMMON JUDGMENT C.S.No.443 of 2000 This suit has been filed for specific performance of the letter of confirmation dated 5.4.1981 executed by the defendants in favour of the plaintiff by directing the defendant to execute and register the Sale Deed in respect of 'A' Schedule property, for a direction to the defendants to hand over possession of 'A' Schedule property, or in the alternative for a direction to the defendants to pay a sum of Rs.2,1 0,75,000/- being the amounts paid by the plaintiff towards purchase of the suit property and interest along with future interest at 30% per annum on Rs.48,70,925/- from the date of plaint till realisation, for a permanent injunction restraining the defendants from in any dealing with the 'A' and 'B' Schedule properties or alienating in any manner and putting the same to any use and for costs. 2. C.S.No.444 of 2000: This suit has been filed for specific performance of the letter of confirmation dated 5.4.1981 executed by the defendants in favour of the plaintiff by directing the defendant to execute and register the Sale Deed in respect of 'A' Schedule property, for a direction to the defendants to hand over possession of 'A' Schedule property, or in the alternative for a direction to the defendants to pay a sum of Rs.2,0 4,16,000/- being the amounts paid by the plaintiff towards purchase of the suit property and interest along with future interest at 30% per annum on Rs.47,19,800/- from the date of plaint till realisation, for a permanent injunction restraining the defendants from in any dealing with the 'A' and 'B' Schedule properties or alienating in any manner and putting the same to any use and for costs. 3. The plaint averments in both the suits are common, except the sale consideration and the property in question The averments are as follows: The landed property at Door No.Old 101, New 96, Pantheon Road, Egmore, Chennai originally owned by the defendants 1 and 2, who are partners in the 3rd defendant firm. The third defendant took up development activities of the property for putting up a multi-storeyed shopping cum office complex. The defendants represented that they are willing to sell the ground and first floors of the proposed building. They agreed to sell the proposed ground floor of the property along with proportionate undivided share of the land to the plaintiff in CS 443/00 for a price of Rs.68,75,550/-. A letter of confirmation dated 5.4 .1981 was executed by the defendants. The said consideration was to be paid in instalments, and the plaintiff paid a sum of Rs.48,70,925/- upto 1983 itself. They also agreed to sell the first floor with proportionate undivided share of land for Rs.67,18,800/- to M/s. Sundardas Arjunlal, a Partnership firm and sister concern of the plaintiff in CS 443/00. The said partnership firm paid Rs.47,19,800/- till 1982 . The defendants also executed letter of confirmation dated 5.4.81. Under the letter of confirmation, the possession of the respective portions will be handed over to the plaintiff and the firm within 18 months from the date of the payment of the 2nd instalment, by which time the construction will be completed. The properties agreed to be sold includes provision of escalator, partition for shops, provision of proportionate car parking area in the basement and shall be centrally air conditioned. The said amounts were paid by the plaintiffs well before 12.1.83. The said letter of confirmation would conclusively establish that the suit properties were sold to the plaintiff. This fact is also clear from the income tax assessment order of the 3rd defendant and the findings therein. In this transaction, everything had concluded, except the registration of the formal deed of conveyance in favour of the plaintiff. Possession had been handed over to the plaintiffs on 15.7.1983. However, since certain civil and finishing works remained to be done, the plaintiffs could not put the property to effective use. Though the promoter was given time to complete the work, the works in the ground floor area still remain incomplete. The defendants trespassed into the first floor and installed some billiards tables. The plaintiffs are in physical, actual and effective possession of the properties since 1983. Plaintiff came to know that certain portion of the property at the said address was proposed to be purchased by some third parties, and the same was advertised in The Hindu on 26.2.1995. thereafter, the defendants did not sell the ground and first floors to anybody, and they were also promising the plaintiffs that they will be executing the sale deed at the earliest. The plaintiffs came to know that the defendants were trying to dishonestly use and dispose off the properties which were agreed to be sold to the plaintiffs. When the defendants started using the ground and first floors as a club for billiards and snow ball, the plaintiff approached them, and the defendants removed the same and delivered possession to the plaintiffs. The defendants informed the same to the press wrongly as if the plaintiffs and the 2nd firm forcible took possession, and the same was also widely published. The intention of the defendants is to cheat the plaintiffs and deny their rights and remove them from the possession of the property. After receiving substantial amounts, the defendants cannot refuse to execute the sale deeds. On the basis of the complaints from both the parties, proceedings were initiated under S.145 of Cr.P.C., and the Executive Magistrate had passed an order dated 5.11.1999 stating that both the parties should refrain from the places and the property was also attached. Aggrieved over the same, the plaintiffs and one Baskar filed Crl.R.C.No.1422 of 1999. At the time of the defendants' offer, they proposed to put up only six floors. But, the defendants without any proper planning permission or authority have constructed 7th, 8th and 9th floors, due to which the plaintiffs' undivided interest in the common land has got diminished. They have no right or authority to put up additional floors. The defendants approached the authorities for regularisation of the said unauthorised constructions. Whether they succeed in their attempt or not, the defendants are liable to convey the schedule mentioned properties with proportionate undivided share of land, treating the complex having only basement, ground and six upper floors. When the defendants approached the plaintiffs for sale of the properties, they represented that they are not going to put up any additional floors. Since the construction of 7th, 8th and 9th floors is in violation of the terms and conditions of sale, the defendants have no right to deal with the said floors. The defendants have been making attempts to illegally deal with the ground and first floors by suppressing the said letter of confirmation. The plaintiffs jointly filed a suit against the defendants herein in O.S.No.4993 of 1999 before the City Civil Court, Chennai for injunction. The plaintiffs filed an application in I.A.No.12755/99 in the said suit for an interim injunction. Interim injunction was granted only for restraining the defendants from dealing with the ground and first floors. Aggrieved over the disallowed portion of the said order, the plaintiffs preferred an appeal in CMA No.193/99. The defendants preferred an appeal in CMA No.186/99 against the allowed portion of the said order. Both the appeals were pending before the City Civil Court, Madras. The plaintiffs were in symbolic possession of the properties throughout the Executive Magistrate's proceedings. An order dated 5.11.99 was passed by the Executive Magistrate directing both the parties not to enter the premises. The plaintiffs filed Crl.R.C.No.1422/99 before this court, and interim stay was obtained in Crl.M.P.No.10620/99. This court has vide order dated 8.6.2000 directed the Executive Magistrate to hand over possession to the defendants, instead of directing the Magistrate to hand over possession to the plaintiffs. More than 60% of the sale consideration has been received by the defendants. The plaintiffs are always ready and willing to pay the balance of sale consideration. The defendants have committed breach of the letter of confirmation and are attempting to sell the property to third parties and have put the ground and first floors for their personal use. They are not willing to conclude their part of the contract. The plaintiffs did not commit any default in performing its parts of contract. In view of the unauthorised constructions, the defendants have committed breach of the sale confirmation letters. The defendants are not entitled to use the suit properties as the plaintiffs are the owner of the same. The plaintiffs are also entitled for proportionate car parking area in the suit properties. If the amounts paid as deposits on various dates have been used in financial business, the plaintiffs would have earned crores and crores of rupees. Hence, the plaintiffs are reasonably entitled for interest at 30% per annum. However, the same is restricted to 18% per annum till the date of filing of the plaint and they claim the future interest at 30% per annum. The plaintiffs have been put to great mental tension and agony, and further they have been prevented from using the premises for their commercial use, thereby put to great loss of income. The defendants are liable to compensate the same. Since, no particular time was fixed for execution of the sale deeds, limitation starts from the day from which the defendants refused to execute the sale deeds. The plaintiffs came to know about the defendants' refusal through Junior Vikatan magazine dated 18.7.1999. Therefore, the suit is in time. Hence, the plaintiffs seek the above said reliefs. 4. The defendants 1 to 3 have filed separate written statements in both the suits with the following averments: As per Article 54 of the Limitation Act 1963, the starting point of limitation in respect of suit for specific performance is the date fixed for the performance, or if no such date is fixed, when the plaintiff has notice that performance is refused. Similarly, as per Article 113 of the Act, the period of limitation for filing of a suit for refund of amounts advanced is three years, and the starting point of limitation is when the right to sue accrues. The second instalment was payable on or before 16.4.1981 and was actually paid in instalments by 1.6.1981 and completion and handing over of possession should therefore have been on 16.10.82 or 1.12.1982 which admittedly was not done. The last payment was on 12.1.83 and balance was claimed on 17.2.1983. Hence, the period of limitation expired on 17.2.1986. The plaintiffs have conveniently suppressed the complaint dated 16.10.1996 given by its Managing Director. Hence, the starting point of limitation was at least from 16.10.1996 and expired on 16.10.1999. The statement that the limitation commenced from 18.7.1999 is false. The main documents on which the plaintiffs laid the claim, are inadmissible in evidence. The dealings of the defendants were with a partnership firm known as M/s.Sunil Anand & Co., and not with M/s.Sunil Anand & Co. P. Ltd. The suit is therefore liable to be dismissed in limine. The sale consideration for the ground floor was fixed at Rs.68,75,550/- based on an area of 10186 sq.ft. The clause that there would be an upward or downward revision in price according to the actual area of the floor was inserted in the letter dated 5.4.81, as the project was only in the planning stage at this time. The actual area of the ground floor is 13738 sq.ft. The amount payable by the plaintiff in CS 443/00 would have been Rs.92,73,150/- and not Rs.68,75,550/-. The sale consideration for the first floor was fixed at Rs.67,18,000/- based on an area of 11198 sq.ft. The said clause was also inserted in the letter dated 5.4.1981. The actual area of the first floor is 1440 8 sq.ft., and the amount payable by the plaintiff in CS 444/00 would have been Rs.86,44,800/-. From the documents filed by the plaintiffs, it is clearly seen that the plaintiffs were defaulters in payment right from the inception of the arrangement. They failed to mention when the construction ran into technical difficulties. If as alleged by the plaintiffs, the properties were sold to the plaintiffs in the year 1981, it follows that the above suits were not maintainable and as such infructuous. The plaintiffs have not produced a scrap of evidence to prove that the possession was handed over to it as early as 15.7.83. The order in Crl.R.C.No.1422/99 dated 8.6.2000 passed by this court would clearly establish that the defendants were always in possession of the properties described in the plaints schedules. Only the first floor was used by the defendants as a billards/snooker/ pool parlour. The ground floor is presently being used for storage. The defendants never attempted to cheat the plaintiffs. It was the plaintiffs who committed default in payment and afterwards tried to illegally take possession of the properties. The defendants never agreed to restrict the construction to 6 floors. Even the letter dated 5.4 .81 does not specify the total constructed area, number of floors or the undivided share to be conveyed. The plaintiffs were only promised proportionate undivided share in the land. No specific share could have been envisaged at that stage as the building plans had not been finalised then. The defendants were entitled to put up any number of floors provided sanction was obtained. Only a little over 50% of the original sale consideration was paid by the plaintiffs belatedly before it committed default in payment. The question of now being willing to pay the balance of sale consideration does not arise, the contract having been abandoned by both the parties in the year 1983 itself. The relief of specific performance is an equitable relief. The defendants 1 and 2 purchased the land and buildings by way of outright sale under a sale deed dated 18.4.80. Encouraged and misguided by the Managing Director of the plaintiffs, the first and second defendants allotted the prime floors. The plaintiffs defaulted in payment, and the defendants were put to great financial constraints to pay the cost of civil construction. The project came to a grinding halt. Due to these circumstances, neither party initiated proceedings against each other and in fact abandoned the contract. The Chennai Metropolitan Development Authority had issued a completion certificate which proved conclusively that the building has been constructed according to the planning permission granted. The plaintiffs have not paid the entire amounts due to the defendants till date. It was the plaintiffs, who prevented the defendants from using the property by unnecessarily interfering with the defendants' business and also by causing extensive damage to the said properties with the help of goondas. The plaintiffs are attempting to resurrect a cause of action which actually expired about 18 years ago, and the reasons trotted out by the plaintiffs to extend limitation are false. The relief of specific performance as well as the claim for refund are barred by limitation. Hence the suits have to be dismissed with exemplary costs. 5. On the above pleadings, the following issues were framed: C.S.No.443/2000: 1. Whether the suit is barred by limitation as claimed by the defendants? 2. Whether the plaintiff has been and is always ready and willing to perform its part of contract by paying the balance sale consideration? 3. Whether the putting up of Floors, 7, 8 & 9 is in accordance with the terms of the agreement? If not, whether the plaintiff is entitled for reduction of sale consideration due to the reduction of undivided interest in the land? 4. Whether the plaintiff is liable to pay any additional sale consideration if it is found that more area has been constructed than what has been agreed to be sold? 5. Whether in the alternative, without giving up the relief of specific performance and possession, the plaintiff is entitled for the relief of a direction to the defendants to pay Rs.2,10,75,500/- being the amounts paid by the plaintiff for purchase of the suit property with interest, at 30% p.a. on Rs.48,70,925/- as claimed in para 24(c) of the Plaint? 6. Whether the plaintiff is entitled for permanent injunction as claimed in Para 24(d) of the Plaint? 7. Was the plaintiff ever in possession of the property? 8. Are the documents filed by the plaintiff is admissible in evidence? 9. Is the plaintiff entitled to relief as claimed for? C.S.No.444/2000: 1. Whether the suit is barred by limitation as claimed by the defendants? 2. Whether the plaintiff has been and is always ready and willing to perform its part of contract by paying the balance sale consideration? 3. Whether the putting up of Floors, 7, 8 & 9 is in accordance with the terms of the agreement? If not, whether the plaintiff is entitled for reduction of sale consideration due to the reduction of undivided interest in the land? 4. Whether the plaintiff is liable to pay any additional sale consideration if it is found that more area has been constructed than what has been agreed to be sold? 5. Whether in the alternative, without giving up the relief of specific performance and possession, the plaintiff is entitled for the relief of a direction to the defendants to pay Rs.2,04,16,000/- being the amounts paid by the plaintiff for purchase of the suit property with interest, at 30% p.a. on Rs.47,19,800/- as claimed in para 24(c) of the Plaint? 6. Whether the plaintiff is entitled for permanent injunction as claimed in Para 24(d) of the Plaint? 7. Was the plaintiff ever in possession of the property? 8. Are the documents filed by the plaintiff is admissible in evidence? 9. Is the plaintiff entitled to relief as claimed for? 6. ISSUES 1 TO 9 IN BOTH THE SUITS: These two suits have been filed for specific performance of two agreements of sale both dated 5.4.1981 executed by the defendants in favour of the plaintiffs in respect of the schedule mentioned properties to the suits and in alternative a money decree directing the defendants to pay Rs.2,10,75,500/- and Rs.2,04,16,000/- respectively with subsequent interest thereon. 7. On the side of the plaintiffs, P.W.1 was examined, and Exs.P1 to P23 were marked. On the side of the defendants D.W.1 was examined, and Ex.D1 was marked. 8. Arguing for the plaintiffs, the learned Senior Counsel Mr.K.V. Venkatapathy would submit that the plaintiff in the first case is a private limited company, while the plaintiff in the second case is a partnership firm; that PW1 is a Managing Director in the former and a Director in the latter; that the plaintiff in CS 443/00 was originally a partnership firm, and subsequently in 1981, the same was converted into a Private Limited Company; that the said private limited company has taken all the assets and liabilities of the earlier partnership firm; that PW1 and his three brothers who were partners became the Directors of the private limited company; that Ex.P17 is the Memorandum and Articles of Association; that only the four Directors are the shareholders, and except them, there is no other shareholder; that Ex.P1 8 is the xerox copy of the certificate of incorporation; that the agreements for sale for the ground and first floors of the defendants' proposed construction were entered into between the parties; that an advance of Rs.1.00 lakh was paid in each case on 5.4.81, in respect of which the defendants passed on Exs.P1 and P2 receipts; that Exs.P3 and P4 are the letters of confirmation issued by the first defendant in respect of both the agreements; that according to Ex.P5, a consolidated receipt, issued on 23.6.82, the defendants acknowledged the receipt of various payments amounting to Rs.34,19,800/-; that likewise under Ex.P6 consolidated receipt, they have acknowledged the receipt of Rs.36,70,925/-; that as per the agreements,the rate per square feet for the ground floor was Rs.675/- and for the first floor was Rs.600/-; that the defendants agreed to build approximate a carpet area of 1 0186 sq.ft. in the ground floor and 11198 sq.ft. approximately in the first floor; that no period or time was fixed for concluding the contract; that the stipulated time for completion of the building was 18 months from the date of payment of the second instalment; that thought the plaintiffs have paid the second instalment on 1.5.81, the defendants had not completed the construction; that it is pertinent to note that no default clause has been incorporated under Exs.P3 and P4 agreements; that as per the original agreements, the defendants were to put up the basement, car parking, ground floor plus six floors, as per the sanctioned original plan given by the MMDA; that they also agreed to provide the car parking area which was proportionate to the total build up area of the building; that out of the sale consideration of Rs.68,75,550/- for the ground floor, the plaintiff has paid Rs.4 8,70,925/- and towards the first floor out of the sale consideration of Rs.67,18,800/-, the plaintiff has paid Rs.47,19,800/-; that all the amounts have been paid back in 1983 itself; that the defendants did not complete the construction, but the construction was over in the year 1995; that even now the construction in the first floor is still incomplete; that since the defendants did not construct in accordance with the sanctioned plan, proceedings are initiated by the MMDA against them; that the plan originally sanctioned came to an end in the year 1982 itself; that without the sanction and approval of the MMDA, the defendants constructed the 7th, 8th and 9th floors, as a result of which the proportionate land to which the plaintiff was entitled to was drastically reduced and in so far as car car parking also; that only on 29.1.1988, the defendants had got additional construction of 7th, 8th and 9th floors regularised by the Government under Ex.P22, but there was a further direction that the defendants should get fresh approval by putting forth a revised plan before the MMDA; that the construction was abruptly stopped, and it came to a stand still in view of the above circumstances; that the plaintiffs have already paid 60% of the consideration even in 1983 itself; that the plaintiffs have been all along ready and willing to pay the balance of consideration; that it is pertinent to note that the defendants have not challenged the means or the sources of the plaintiffs in the cross examination of PW1; that the plaintiffs filed an application for interim injunction in the present suits to restrain the defendants from alienating the property, and the same was granted subject to the conditions that the plaintiffs should deposit the balance of consideration and should also give an undertaking that he would pay the balance amount, as per the actual measurement as per the square foot basis; that the plaintiffs sought a modification of the order to permit them to give a bank guarantee for the balance of sale consideration in stead of depositing the said amount, and the same was ordered; that accordingly, the plaintiffs furnished a bank guarantee on 7.3.2001 and also gave an undertaking as ordered by the court; that all the above would go to show that the plaintiffs were ready and willing all along with sufficient means; that the suits filed by the plaintiffs were well within time; that there is no clause in the agreement between the parties fixing the time for concluding the contracts; that time stipulated for completion of the construction by the