1 915-nms-2103-09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi NOTICE OF MOTION NO. 2103 OF 2009 IN SUIT NO. 1335 OF 2009. Husain Taherali Changi. ..Plaintiff. vs. Muzaffar Fakhruddin Tinwala & Ors. ..Defendants. .... Mr. Shamim, i/b. Shamim & Co., for Plaintiff. Mr. Sasidharan, i/b. M.A. Saiyed, for Defendant No.2. .... CORAM : S.J. KATHAWALLA, J. DATE : 6TH MAY 2011. P.C. : 1. The above Suit is filed by the Plaintiff inter alia for an order and direction against the Defendant No.1 to specifically perform the Agreement for Sale dated 10th March 2005 in respect of his 50% undivided title and interest with regard to the flat no. 806, Bridge View, South Wing, 16 Hansraj Lane, Mumbai-400 027 along with garage no.31 admeasuring 110 sq.ft. (the Suit property). In the alternative, the Plaintiff has sought an order against the Defendant No.1 to pay to the Plaintiff a sum of Rs.21,21,552/- along with interest @ 10 % per annum from the date of filing of the Suit till payment or realisation. 2 915-nms-2103-09 2. The Plaintiff has pending the hearing and final disposal of the suit by the above Notice of Motion prayed for an injunction against the Defendants restraining them from disposing off, selling, transferring, dealing with, handing over to any person or parting with or creating third party rights, title and interest of any nature whatsoever in respect of the 50% undivided share of the Defendant No.1 in the Suit property. The Plaintiff has also sought directions against the Defendant No.1 to pay mesne profit to the Plaintiff in the sum of Rs.10,000/- per month for being in wrongful use, occupation and possession of the 50% undivided share of right, title and interest in the Suit property. 3. Briefly set out hereunder are some of the facts as narrated by the plaintiff in the plaint. 4. The Suit property was originally standing in the name of Smt. Sharifabai Fakhruddin Tinwala (Sharafibai), who expired on 26th September 2004 at Mumbai leaving behind Defendant Nos. 1 and 2 i.e. her two sons as her surviving heirs. By virtue of the same, the Defendant Nos. 1 and 2 became co-owners of the suit property, each having 50% right, title and interest in respect of the same. 3 915-nms-2103-09 5. According to the Plaintiff, Defendant No.1 has been his good friend for the past more than 20 years. As the Defendant No.1 was in need of money, by a Sale Deed dated 10th March 2005 he sold his 50% undivided share in the Suit property to the Plaintiff. Along with the said Sale Deed, the Defendant No.1 also executed an Affidavit dated 10th March 2005 in favour of the Plaintiff, indemnifying the Plaintiff from any third party claim in respect of his 50% undivided right, title and interest in the Suit property. The Defendant No.1 also signed a letter in favour of the Plaintiff addressed to the Defendant No. 3 Society for transfer of his 50% share in the Suit property in favour of the Plaintiff. The said documents were prepared and notarised by Advocate Mr. Yasin Badami. A Power of Attorney which is a registered document was also executed by the defendant no.1 in favour of the plaintiff. The said Power of Attorney was witnessed by Mr. A.Y. Badami, the Son of the Advocate Mr. Yasin Badami. 6. Out of the total consideration amount of Rs.18 lacs, the Plaintiff paid to the defendant no.1 a sum of Rs.17 lakhs by cash and the balance of Rs.1 lac was agreed to be paid by the Plaintiff to the Defendant No.1 at the time of the registration of the said Sale Deed. The plaintiff in view of his friendship and good family relations with 4 915-nms-2103-09 the Defendant No.1, at the request of Defendant No.1 did not take possession of the Suit property as his brother i.e. Defendant No.2 was also partially occupying the same. 7. The Plaintiff repeatedly requested the Defendant No.1 to accept the remaining sum of Rs. 1 lac. and get the Sale Deed dated 10th March 2005 in respect of the Suit property registered but the Defendant No.1 delayed the same on one pretext or the other and never got the said document registered. When the plaintiff insisted upon the Defendant No.1 to get the Sale Deed registered, the Defendant No.1 informed the Plaintiff that he has again sold his 50% undivided share in the Suit property to a third party and requested the Plaintiff to take back the sum of Rs. 17 lacs paid by him to the Defendant No.1 along with an additional sum of Rs.2,27,000/- towards the hardship caused to the Plaintiff and accordingly issued a cheque bearing No. 505871 dated 21st August 2007 for a sum of Rs. 19,27,000/-. The plaintiff accepted the said cheque. However, when the Plaintiff deposited the said cheque with his Bank, the same was returned dishonoured. The Plaintiff therefore by his Advocate’s letter dated 18th March 2008 filed a police complaint with the Byculla Police Station against the Defendant No.1. The Plaintiff thereafter also issued notice dated 25th April 2008 to the Defendant No.1 under 5 915-nms-2103-09 section 138 of the Negotiable Instruments Act, calling upon the Defendant no.1 to repay the said sum of Rs.19,27,000/- to the Plaintiff within 15 days from the receipt of the said notice. 8. The Defendant No.1 thereafter approached the Plaintiff and requested him not to initiate any criminal action under section 138 of the Negotiable Instruments Act and gave another cheque bearing No. 506007 dated 29th April 2008 for a sum of Rs.21,21,552/- i.e. the principal amount of Rs.17 lacs along with an additional amount of Rs.4,21,552/- towards hardship caused to the Plaintiff. The plaintiff once again accepted the said cheque. However, on presentation the same was also dishonoured. The Plaintiff therefore issued another notice dated 14th June 2008 under section 138 of the Negotiable Instruments Act to the Defendant No.1. The said notice was replied to by the Defendant No.1 through his Advocate Mr. Yasin G. Badami vide letter dated 28th June 2008 and also through another Advocate’s letter dated 25th July 2008. The Plaintiff through his Advocate’s letter dated 14th November 2008 also addressed a notice to the Defendant Nos. 1 and 2 calling upon them not to transfer the said 50% right, title and interest in the Suit property to any third party and also addressed another notice dated 14th November 2008 to the Defendant No. 3 society calling upon them not to transfer the 6 915-nms-2103-09 membership, share certificate in respect of the Suit property in favour of any third party as the Plaintiff had acquired rights in respect of the same under the Sale Deed dated 10th March 2005. The Defendant No.3 Society through its Advocate’s letter dated 15th December 2008 informed the Plaintiff that they have already transferred the Suit flat in favour of the Defendant No.2. The Plaintiff therefore filed the present Suit seeking aforestated reliefs and also took out a Notice of Motion seeking ad-interim and interim reliefs set out hereinabove. 9. The learned Advocate appearing for the Plaintiff has submitted that in view of the above facts, the Plaintiff is entitled to specific performance of the Agreement for Sale dated 10th March 2005 executed by and between the Plaintiffs and the Defendant No.1 and therefore, pending the hearing and final disposal of the Suit, the Plaintiff is also entitled to an injunction restraining the Defendants from disposing off, selling, alienating and encumbering and creating any third party rights in respect of the Suit property. 10. The learned Advocate appearing for the Defendant no.2 has pointed out that the Plaintiff is not entitled to the relief of specific performance of the Agreement dated 10th March 2005. It is 7 915-nms-2103-09 submitted that the Plaintiff has wrongly contended in the Plaint that the Defendant No. 1 and the Defendant No.2 are the only heirs of the deceased Sharifabai who was the sole owner of the suit premises. It is submitted that the said Sharifabai died intestate at Mumbai on 26th September 2004 leaving behind her two sons i.e. Defendant Nos. 1 and 2 and two daughters namely Maryam Vakifwala (Maryam) and Nasim D. Attarwala (Nasim) as her heirs and legal representatives in accordance with the law of succession by which she was governed. The Defendant No. 1 and the Defendant No.2 therefore had only 1/4th undivided share, right, title and interest each in the Suit property. Pursuant to the discussions and deliberations which took place between Sharifa’s heirs and legal representatives, it was decided that the premises belonged exclusively to Defendant No.2. Defendant No.1, Maryam and Nasim agreed to release, relinquish and surrender their respective undivided shares, right, title and interest in the premises in favour of the Defendant NO.2. Accordingly, a Memorandum of Understanding dated 21st September 2005 was executed between the Defendant No. 1 and the Defendant No.2 whereby Defendant No.1 agreed that the Suit premises be transferred in the name of the Defendant No.2. It is further pointed out on behalf of the Defendant No.2 that the said Memorandum of Understanding dated 21st September 2005 has been 8 915-nms-2103-09 witnessed by the Plaintiff himself. However, the Plaintiff has not disclosed this fact in the Plaint and has instead alleged that the Defendant No.1 had 50% share in the Suit property. It is further submitted on behalf of the Defendant No.2 that the very fact that the Plaintiff accepted the cheques of Rs.19,27,000/- and Rs.21,21,552/- dated 21st August 2007 and 29th April 2008 being refund of the said consideration of Rs. 17 lacs along with compensation thereon goes to show that the Plaintiff accepted the termination of the purported Agreement for Sale dated 10th March 2005 entered into by and between him and the Defendant No.1 and in fact, entered into new Agreements of accepting refund of the consideration with compensation thereon. It is submitted that this amounts to novatio and the question of specific performance of the purported Agreement dated 10th March 2005 as prayed for in the Suit does not arise and the Suit is liable to be dismissed. It is further submitted that the question of granting any interim relief in favour of the Plaintiff and against the defendants also does not arise. 11. On 3rd May 2011 the above Notice of Motion was argued before this Court for some time by the learned Advocates for the parties. At that time this Court pointed out to the learned Advocates appearing for the Plaintiff that the very fact that the Plaintiff 9 915-nms-2103-09 accepted the cheques towards refund of the sale consideration along with compensation thereon on two occasions from the Defendant No. 1 and upon dishonour of the said cheques also issued notice to the Defendant No.1 calling upon him to pay to the plaintiff the amounts of the dishonoured cheques goes to show that the plaintiff was throughout not ready and willing to perform the agreement on his part and in fact had terminated the said agreement dated 10th March 2005 by accepting the cheques from the defendant no.1 on two occasions towards refund of the sale consideration along with compensation. This Court also pointed out to the Advocates for the parties that the said issue is already decided by this Court in the case of Aristo Realty Developers Limited vs. Rama Shashikant Mehta and Others, dated 25th November 2010 in Notice of Motion No. 866 of 2006 in Suit No. 323 of 2006. The Advocates for the parties had therefore sought time to consider the said Judgment and or any other Judgments on the said issue and make their submissions thereafter. The matter was therefore adjourned to 6th may 2011. 12. Today the learned Advocate appearing for the Plaintiff has submitted that the Agreement dated 10th March 2005 would have stood satisfied if the cheques issued by the defendant no.1 were honoured. In view of the cheques issued by the defendant no.1 10 915-nms-2103-09 admittedly being dishonoured the Defendant No.1 is bound and liable to comply with the terms and conditions of the Agreement dated 10th March 2005 and the Plaintiff is entitled for specific performance of the Agreement dated 10th March 2005 as the Plaintiff has always been ready and willing to perform his part of the contract. The learned Advocate appearing for the Defendant no.2 has disputed the contention advanced on behalf of the plaintiff and has relied on the decision of the Hon’ble Apex Court in the case of N.P. Thirugnanam (Dead) by LRs vs. Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115, wherein it is held that continuous readiness and willingness on the part of the Plaintiff is a condition precedent to grant the relief of specific performance. The Plaintiff must prove that right from the date of execution till the date of the decree, he is ready and is always been willing to perform his part of the contract. 13. I have considered the submissions advanced on behalf of the learned Advocates appearing for the parties. The purported Agreement for Sale is dated 10th March 2005. The Plaintiff has in paragraphs 15 and 16 of the Plaint admitted that when the Plaintiff insisted upon the Defendant No.1 to get the Agreement for Sale registered the Defendant No.1 informed the Plaintiff that he had sold his share in the Suit property to a third party and requested the 11 915-nms-2103-09 Plaintiff to take back the sum of Rs.17 lacs. paid by the Plaintiff to the Defendant No.1 along with an additional sum of Rs.2,27,000/- towards hardship caused to the Plaintiff and accordingly issued a cheque bearing No. 505871 dated 21st August 2007 for the sum of Rs.19,27,000/- which cheque the Plaintiff accepted. In my view, the acceptance of the said cheque by the Plaintiff brought the suit agreement to an end. The acceptance of the cheque towards refund of the sale consideration along with compensation resulted into a new contract between the Plaintiff and the Defendant and the Plaintiff is therefore not entitled to seek specific performance of the said Agreement dated 10th March 2005 which stood terminated the moment the Plaintiff agreed to accept the amount of Rs.17 lacs from the Defendant No.1 along with an amount of Rs.2,27,000/- towards compensation. The dishonour of the said cheque would certainly not entitle the Plaintiff to revive the Suit Agreement and seek specific performance of the same. In fact, the Plaintiff being conscious of this fact did not file a Suit seeking specific performance of the Suit Agreement immediately upon the said cheque being dishonoured but instead issued notice to the defendant no.1 under section 138 of the Negotiable Instruments Act seeking payment of the amount of the dishonoured cheque from the Defendant No.1. The Plaintiff did not stop at this, but instead entered into a fresh Agreement with the 12 915-nms-2103-09 Defendant No.1 and now accepted a cheque of Rs.21,21,552/- towards Rs. 17 lacs being the principal amount paid by the Plaintiff to the Defendant No.1 along with the compensation thereon of Rs. 4,21,552/-. Again when the said cheque was dishonoured, the Plaintiff issued another notice to the defendant no.1 under section 138 of the Negotiable Instruments Act on the Defendant as well as his wife. In the circumstances, the Plaintiff has dis-entitled himself from seeking specific performance of the Suit Agreement and therefore, also from seeking any interim reliefs prayed for. 14. In any event, section 16(c) of the Specific Relief Act, 1963 provides as follows :- “16. Personal bars to relief .- (a) ... ... (b) ... ... (c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation.- For the purposes of clause (c).- (i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court ; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.” 15. In the decision of the Privy Council in Ardeshir H. 13 915-nms-2103-09 Mama vs. Flora Sassoon (AIR 1928 PC 208), it is inter alia held that a person seeking specific performance of a contract was required to aver his readiness and willingness to perform his part of the contract and that the contract was subsisting. If this fact was traversed he is required to prove a continuous readiness and willingness from the date of the contract to the time of the hearing, to perform the contract on his part. Failure to make good that averment brought with it the inevitable dismissal of his Suit. The Hon’ble Supreme Court has in its decision in Anglase Yohannan vs. Ramlatha, (2005) 7 SCC 534 has after reproducing section 16(c) of the Specific Relief Act and also relying on the observations of the Privy Council in the case of Ardeshir H. Mama (supra), in paragraph 12 of its judgment held as follows :- “12. The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. The provision imposes a personal bar. The Court is to grant relief on the basis of the conduct of the person seeking relief. If the pleadings manifest that the conduct of the Plaintiff entitles him to get the relief on perusal of the Plaint he should not be denied the relief.” The Hon’ble Supreme Court in N.P. Thirugnanam (dead) by LRs (supra), in paragraph 5 of the Judgment has held as follows :- “5. It is settled law that remedy for specific performance is an equitable remedy and is in the 14 915-nms-2103-09 discretion of the Court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under section 20 of the Specific Relief Act, 1963 (for short “the Act”). Under section 20, the court is not bound to grant the relief just because there was a valid agreement of sale. Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been read and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances.................................. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract.” 16. In the instant case, at the request of the Defendant No.1, the Plaintiff upon coming to know that the Defendant No.1 has already created third party rights in respect of the Suit property 15 915-nms-2103-09 accepted the offer of Defendant No.1 to accept repayment of the amount of Rs.17 lacs paid by the Plaintiff to the Defendant No.1 under the Suit Agreement along with compensation thereon and thereby terminated the Suit Agreement. Therefore, it cannot be said that the Plaintiff from the date of execution till the date of decree was ready and willing to perform his part of the contract. In fact, before filing of the Suit the Plaintiff has voluntarily put an end to the contract by accepting the cheque from the Defendant No.1 towards the refund of sale consideration paid by the Plaintiff to the Defendant No.1 under the said Agreement along with compensation. The dishonour of cheque will not revive the Suit Agreement and the remedy of the Plaintiff would be to recover the amount of the said dishonoured cheque. The Plaintiff has admittedly issued notices under section 138 of the Negotiable Instruments Act to the Defendant No.1. Under the circumstances, I am of the view that the Plaintiff is not entitled to any interim reliefs as prayed for. The Notice of Motion is therefore dismissed. However since the Suit involves a very limited issue, the hearing of the Suit is expedited. The Defendants are directed to file their written statements on or before 13th June 2011. Place the Suit for framing of issues on 15th June 2011 high on board. [ S.J. KATHAWALLA, J. ]