IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 21.07.2009 CORAM: THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN AND THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA A.S.No.56 of 2002 and M.P.No.1 of 2009 1.S.Andal 2.B.Janaki .. Appellants(Plaintiffs) -vs- K.Chinnasamy .. Respondent (Defendant) Prayer: Appeal Suit filed under Section 96 of Civil Procedure Code against the judgment and decree dated 17.8.2001 made in O.S.No.944 of 1995 on the file of the II Additional Subordinate Judge, Coimbatore. For Appellants : Mr.S.V.Jayaraman Sr.Counsel for Mr. V. Nicholas For Respondents : Mr.T.R.Rajagoapalan, Sr.Counsel for Mr.P.R.Ramakrishnan J U D G M E N T K.RAVIRAJA PANDIAN,J. The above appeal is directed against decree and judgment dated 17.8.2001 made in O.S.NO.944 of 1995 on the file of the II Additional Subordinate Judge, Coimbatore by which the relief of specific performance of an agreement dated 22.1.1995 sought for by the appellants herein was rejected. 2. The facts of the case are as follows: The appellants filed a suit for specific performance against the respondent on the basis of an agreement of sale dated 22.1.1995 executed between the appellants and the respondent in respect of the property measuring 17 cents and 429 sq.ft., (7834 sq.ft.) for a total consideration of Rs.30,57,425/- at the rate of Rs.1,70,000/- per cent. It is the case of the appellants that on the date of https://hcservices.ecourts.gov.in/hcservices/ entering into agreement, the appellant paid a sum of Rs.4 lakhs by cheque and Rs.1 lakh by cash as earnest money deposit and part of sale consideration. The time agreed for completion and registration of the sale deed was six months from the date of agreement. As per the terms of the sale agreement, the respondent should measure the property with reference to the boundaries and deliver the original title deeds, property tax receipts, income-tax clearance certificate, encumbrance certificate, urban land tax certificate and other documents. Despite the appellants were ready and willing to perform their part of contract, the respondent was evading the execution of the sale deed by not producing necessary documents, which necessitated the appellants to issue a notice on 15.6.1995 calling upon the respondent to produce the original title deeds and other documents. The respondent here again failed to adhere the request. The appellants sent another notice on 12.7.1995 expressing their readiness and willingness to purchase the property and calling upon the respondent to execute the sale deed on 21.7.1995. In the mean time the respondent by their reply notice dated 10.7.1995 denied the execution of the agreement with intention to sell the land and took a stand that the entire transaction is a simple money transaction and that the agreement was executed as a security for payment of the loan. 3. On the above pleadings the parties went on trial before the trial Court. The trial Court, though found that the agreement dated 22.1.1995 was true, and that a sum of Rs.5 lakhs has also been received by the respondent, however non-suited the appellants for the relief of specific performance on the ground that the appellants have not established that they were always ready and willing to perform their part of the contract and they did not establish possession of necessary funds at the relevant time and in that view of the matter, dismissed the suit. The correctness of the same is now canvassed in the appeal. 4. It is contended on behalf of the appellants that the trial Court having found that the sale agreement dated 22.1.1995 was true and genuine and further found that the payment of earnest money deposit in a sum of Rs.5 lakhs is also true, ought to have granted the relief of specific performance and the finding of the trial Court that the appellants have not proved that they are always ready and willing to perform their part of the contract is against the material evidence adduced before it. The finding of the trial Court that the appellants were not possessing sufficient fund at the relevant time is not only incorrect, but also against the documentary evidence adduced by way of Exs.A.9 to A.11, the bank pass books stood in the name of appellants No.1 and 2 and one G.Srinivasan respectively. 5. Per contra, it was contended that on behalf of the respondent that the finding arrived at by the trial Court is based on material evidence, which cannot be found fault. As such, no interference is called for in this appeal. In addition to that, it https://hcservices.ecourts.gov.in/hcservices/ is also contended that the finding arrived at by the trial Court as to the genuineness of the document is not correct. Despite the fact that the respondent has not filed an appeal against that finding, it is permissible to the respondent while arguing for sustaining that portion of the decree granted in favour of the respondent, advance argument against that portion of the finding went against them. 6. We heard the argument of the learned counsel on either side and perused the materials on record. 7. Section 16(c) of the Specific Relief Act clearly mandates that specific performance of a contract cannot be enforced in favour of a person 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. It is true as per the explanation appended to sub-clause (c) of Section 16, where a contract involves the payment of money, it is not essential for the plaintiff to actually tender the same to the defendant or to deposit in court any money except when so directed by the court. But the plaintiff must aver his readiness and willingness to perform, the contract according to its true construction. 8. In terms of provisions of Section 16(c) of the Specific Relief Act, it is incumbent upon the plaintiff both to aver and prove that the plaintiff has performed or has always been ready and willing to perform the essential terms of the contract which are required to be performed by him. Of course, it is true that in the plaint, at paragraph No.8, the plaintiffs have averred that they were always ready and willing to perform their part of contract from the date of agreement of sale. However, while seeing whether they have established such readiness and willingness from 22.1.1995 i.e., the date of execution of the agreement of sale, there is nothing on record to establish the readiness and willingness of the appellants to perform the essential terms of the contract which are required to be performed. 9. In the Ex.A.2 notice dated 15.6.1995 issued by the advocate for the appellants, it is stated that during the third week of April, 1995, the respondent approached the appellants and requested for further payment of Rs.5 lakhs with assurance that while receiving the payment he would entrust the original title deeds and other documents of the property. Though the appellants were not not required to pay the said amount they have taken demand draft in favour of the respondent for a sum of Rs.5 lakhs, but the respondent did not receive the payment and did not entrust the original title deed despite the fact that the appellants have approached the respondent several times and further requested the respondent to furnish the necessary documents for preparation of the sale deed. https://hcservices.ecourts.gov.in/hcservices/ 10. The appellants having entered into an agreement for purchasing the property have kept quiet without taking any effective steps till Ex.A.2 was issued. It is common sense that having paid the huge sum of Rs.5 lakhs the appellants would have taken the minimum step to get the land measured and the necessary encumbrance certificate. The appellants being the purchasers would have requested the respondent to measure the land and furnish the details as required in the agreement so as to enable them to get long with the sale deed. The total silence till 15.6.1995 speaks volumes about the inaction on the part of the appellants and in turn it is also explicit that the appellants have not established that they were all along ready and willing to perform their part of contract. In addition to that, the appellants have not taken slightest pain of preparing draft sale deed with the available materials while the appellants very meticulously stated so many details like how the respondent acquired the property etc., under the agreement Ex.A.1. In addition to that, the appellants failed to establish their capacity to produce purchase the property, despite they have filed pass books to show that they are having necessary funds during the relevant period of time to perform their part of the contract. 11. On a mere perusal of Exs.A22 to A.24 it would be evident that the plaintiffs have a paltry sum in their account. Under Ex.A.9 a pass book of P.W.1 marked and relied on by the appellants to contend before us that they were having necessary funds would reveal that during January 1995, Rs.1,82,034/- was the balance available in her account. During the month of March, 1995, it was reduced to Rs.346.50ps only. On 21.7.1995, a sum of Rs.12,30,982.43ps was stated to be the balance. So, is the pass book Ex.A.10 in respect of the second plaintiff. In her account also, Upto June 1995, only a paltry sum of few thousand rupees was shown as balance and during July, 1995, the balance was Rs.95,000/-. Thus, the amount deposited during July in the plaintiff's account only goes to prove that the amounts have been deposited in the bank accounts for the purpose of this case on seeing the regular debit and credit entries in the accounts. Even the account stood in the name of Srinivasan does not disclose that sufficient funds are available in his account during the relevant period. 12. Thus, it is obvious that the appellants have not established their readiness and willingness. A perusal of the entries in the pass books under Exs.A.9 and A.10 reveals that the appellants were not possessed with funds, since none of the entries for the relevant period shows that the plaintiffs were having sufficient funds. There is no acceptable explanation from the appellants about the ability of the appellants to augment the funds is available by way of evidence. Even assuming for a moment such a plea is put forth, we are afraid to accept the submission, particularly, when these documents are marked only at the instance of the appellants to prove the capability to meet out the contingency. https://hcservices.ecourts.gov.in/hcservices/ 13. In addition to that, during the relevant period, if the sale consideration is over and above Rs.25 lakhs no objection certificate has to be obtained from the Income-tax Department by filing necessary draft deed before it. No such action has been taken by the appellants, despite the fact, it is stated in the agreement that no objection certificate has to be obtained. As per Income-tax Department, such application has to be filed within fifteen days from the date of execution of the agreement in terms of Section 296- BC of the Income-tax Act, which was in force during the relevant period. 14. The evidence of P.Ws.1 and 2 would go to prove that even the husband of the first plaintiff is indebted heavily. There is no materials adduced to prove that the appellants have purchased stamp papers for execution of sale deed as per Ex.P.2. 15. On considering the cumulative effect of the evidence adduced, we are of the considered view that the appellants have failed to establish that they were always ready and willing to perform their part of the contract. Useful reference can be had to the Division Bench judgment of this Court in the case of Mrs.SARADAMANI KANDAPPAN VS. MRS.S.RAJALAKSHMI reported in 2002(3) CTC 277 in which one of us (K.Raviraja Pandian,J.) was party to the judgment. 16. Learned counsel for the respondent contended that the finding of the trial Court that Ex.A.1 agreement is a true and genuine agreement and it has not been executed for the purpose of securing the loan is not correct. By referring to Order 41 Rule 22 of the Civil Procedure Code, he contended that the respondent even without filing any cross appeal could challenge the adverse finding rendered by the trial Court, in an appeal filed by the appellant against the non-granting of the decree in his favour. In order to support this proposition, he relied on judgments of the Supreme Court in the cases of DEVA RAM VS. ISHWAR CHAND AND ANOTHER reported in 1995(6) SCC 733, RAVINDER KUMAR SHARMA VS. STATE OF ASSAM reported in AIR 1999 SC 3571, ANIL KUMARGUPATAV.MUNICIPAL CORPORATION OF DELHI reported in AIR 2000 SC 659 and S.NAZEER AHEMD VS. STATE BANK OF MYSORE, (2007) 5 MLJ 768. 17. In the case of DEVA RAM VS. ISHWAR CHAND AND ANOTHER reported in 1995(6) SCC 733, the Supreme Court with reference to Sections 96 and 100 and Order 43 Rule 1 of C.P.C., observed that "an appeal shall lie from every decree passed by any court exercising original jurisdiction to the court authorised to hear appeal from the decision of such court. So also, Section 100 provides that an appeal shall lie to the High Court from every decree passed in appeal. Thus sine qua non in both the provisions is the ‘decree’ and unless the decree is passed, an appeal would not lie under Section 96 nor would it lie under Section 100 of https://hcservices.ecourts.gov.in/hcservices/ the Civil Procedure Code. Similarly, an appeal lies against an ‘order’ under Section 104 read with Order 43 Rule 1 of the Civil Procedure Code where the ‘orders’ against which appeal would lie have been enumerated. Unless there is an ‘order’ as defined in Section 2(14) and unless that ‘order’ falls within the list of ‘orders’ indicated in Order 43, an appeal would not lie." While observing so, the Supreme Court further held that "an appeal does not lie against mere ‘findings’ recorded by a court unless the findings amount to a ‘decree’ or ‘order’. Where a suit is dismissed, the defendant against whom an adverse finding might have come to be recorded on some issue has no right of appeal and he cannot question those findings before the appellate court. 18. In the case of RAVINDER KUMAR SHARMA VS. STATE OF ASSAM reported in AIR 1999 SC 3571, the Supreme Court has observed that the respondent/defendant in an appeal can without filing cross objection attacked the adverse finding upon which a decree in part has been passed against the respondent. For the purpose of sustaining a decree to the extent the lower Court has dismissed the suit against the defendant/respondent the filing of the cross objection after 1976 amendment is purely optional and not mandatory. 19. The case of ANIL KUMARGUPATAV.MUNICIPAL CORPORATION OF DELHI reported in AIR 2000 SC 659 was one in which writ petitions filed challenging the appointment of Civil Engineer in Municipal Corporation. The High Court gave a finding that appointment of some of the candidates were tainted though their services were allowed to be continued. On such facts, the Supreme Court held that such an adverse finding can be challenged by the candidates in appeals filed by the candidates who were not selected. 20. In S.NAZEER AHEMD VS. STATE BANK OF MYSORE, (2007) 5 MLJ 768, the Bank filed a suit originally for recovery of the money and obtained a money decree against the appellant who borrowed a sum of RS.1,10,000/- from the Bank for purchase of the bus and hypothecated the bus for repayment of the loan and further by equitably mortgaging two items of immovable property. When the decree was sought to be executed, by proceedings against the hypothecated bus, the bus could not be traced and money could not be recovered. When the Bank tried to proceed against the mortgaged property in execution, the trial Court accepted the defence that there was no decree on the mortgage and the Bank cannot straight away sell the property. The Bank thereupon filed a suit for enforcement of equitable mortgage. The appellant resisted the suit by pleading that the suit was barred by Order 2 Rule 2 of the Civil Procedure Code, that there was no valid and equitable mortgage created. The trial Court held that the suit was not hit by Order 2 Rule 2 of the Code but dismissed the suit holding that the suit was barred by https://hcservices.ecourts.gov.in/hcservices/ limitation. The trial Court also held that there was no creation of valid equitable mortgage. The Bank filed an appeal before the High Court. The High Court held that a valid and enforceable equitable mortgage was created and the suit was held to be in time, but hit by Order 2 Rule 2 of the Code. Since the appellant had not challenged the finding of the trial Court that the suit was not hit by Order 2 Rule 2 by filing memorandum of cross objection, the plea in that behalf could not be and need not be upheld. In those factual matrix of the case, the Supreme Court has held that the respondent in an appeal is entitled to support the decree of the trial Court even by challenging any of the findings that might have been rendered by the trial Court against himself. For supporting the decree passed by the trial Court it is not necessary for the respondent in appeal to file a memorandum of objection challenging the particular finding that is rendere 21. The first citation was rendered with reference to Sections 96 and 100 and Order 43 Rule 1 of the Civil Procedure Code. The second case is rendered on the facts when a part of the decree went against the respondents. However, the third and fourth cited cases are on the issue. 22. Learned counsel for the respondent argued that the amount of Rs.4 lakhs has been borrowed for the purpose of discharging the loan to the Bank as well as to others from whom the respondent borrowed money for the purpose of marriage of three daughters. Of course, a part of the amount of Rs.1,60,000/- has been established to be paid to the Bank by evidence. But in respect of the balance amount, there is no acceptable evidence to support the contention. The respondent also has not established before the trial Court as well as before us when the daughters were got married and what was the amount borrowed and what was the amount unpaid during the relevant period of time when Ex.P.1 was executed. Even assuming that the existence of the loan is true, the loan would have been paid back out of the sale consideration. We are of the view that there is no material worth consideration made available to accept the contention of the respondent that the Ex.A.1 agreement was entered into with an intention not to act upon it and only for securing the loan borrowed. 23. For the foregoing reasons, we are not able to take a different view than the one taken by the learned single Judge and the appeal is dismissed. However, there is no order as to costs. Consequently the connected M.P.No.1 of 2009 is also dismissed. usk Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ Copy to: 1. The II Addl.Subordinate Judge, Coimbatore. 2. The Section Officer, VR Section, High Court, Madras. + 1 cc to Mr. V. Nicholas, Advocate, SR No.32782 + 1 cc to Mr. P.R. Ramakrishnan, Advocate, SR No.32754 MBS(CO) SR/14.8.2009 Judgment in A.S.NO.56 of 2002 https://hcservices.ecourts.gov.in/hcservices/