M/S J.P.Builders & Anr vs A.Ramadas Rao & Anr

2) These appeals seek to challenge the common judgment and order dated 23.02.2010 passed by the 1 Division Bench of the High Court of Judicature at Madras in A.S. Nos. 708 of 2008 and 946 of 2009 and W.P. No. 23405 of 2009 whereby the High Court partly allowed A.S. No. 708 of 2008 confirming the decree for specific performance granted by the Principal District Court, Chengalpet in O.S. No. 336 of 2008 and dismissed A.S. No. 946 of 2009 preferred by the appellants herein. By the same order, the High Court disposed of W.P. No. 23405 of 2009 with certain directions. By a subsequent order dated 29.04.2010, the High Court dismissed the Review Application No. 37 of 2010 in A.S. No. 708 of 2008 and Review Application No. 47 of 2010 in W.P. No. 23405 of 2009 preferred by the appellants herein.

Brief facts:-

(e) On 26.04.2006, the Bank rejected the OTS offer of Rs. 148 lakhs stating that since the amount offered is very low, the Bank has decided to pursue the recovery application filed before the Debts Recovery Tribunal, (hereinafter referred to as `DRT') Chennai for the recovery of the dues of the Bank. Again, by letter dated 15.05.2006, the Bank stated that out of court settlement can be done if an offer of Rs. 629.60 lakhs by working out interest at PLR i.e. 11% compound on the principal outstanding as on 31.03.1993 be made. However, since the settlement amount was more than the sale 5 consideration for the suit property, the Appellant No. 2 could not agree to pay the same.

(f) On 26.07.2006, Respondent No. 1 issued a legal notice to the appellants calling upon them to liquidate the loans out of the amounts received from him and retrieve the original documents from the Bank in order to execute the sale deed. By letter dated 27.07.2006, the Appellant No. 1 replied to the notice stating that the first respondent had not paid the balance sale consideration in spite of repeated requests and raised doubt that the first respondent is no longer interested to buy the suit property, therefore, a legal notice was sent calling upon Respondent No. 1 to pay a sum of Rs. 1 crore as liquidated damages.

(h) On 06.10.2006, the Bank filed OA No. 491 of 1999 withdrawing its OTS offer of Rs. 629.60 lakhs and called upon the appellants to pay the total amount due along with future interest, costs and charges. By order dated 15.05.2009, the Presiding Officer, DRT-I, Chennai, disposed of O.A. No. 491 holding that the Bank is entitled to recover a sum of Rs. 11,08,51,875/- from M/s Anand Agency. Pursuant to the order, the Recovery Officer issued the recovery certificate being D.R.C. No. 102 of 2009 and also issued the 1st sale notification dated 23.10.2009 bringing to sale the suit property. The upset 8 price was fixed at Rs. 27 crores and the date of sale was fixed as 25.11.2009.

(k) On 23.02.2010, the Division Bench, by impugned judgment, partly allowed A.S. No. 708 of 2008 filed by Respondent No. 1 herein directing him to deposit the balance sale consideration of Rs.4,80,48,000/- with 18% interest from the date of filing of the suit and also directed the appellants herein to execute the sale deed conveying the subject property to Respondent No. 1 and the Bank was directed to proceed against the various other properties of the appellants being the subject matter of O.A. No. 491 of 1999 for recovering the balance amount. The appellants preferred Review Petition No. 37 of 2010 before the High Court which was dismissed on 29.04.2010. Being aggrieved by the impugned judgment dated 23.02.2010 and order dated 29.04.2010, the appellants have preferred these appeals by way of special leave petitions before this Court.

14) Mr. L.N. Rao and Mrs. Nalini Chidambaram vehemently contended that the plaintiff has miserably failed to prove that he has fulfilled his obligation both under Ex. A-2 (MoU) and Ex. A-3 - Agreement for Sale and in those circumstances, defendants 1 & 2 are not bound to convey the suit property in favour of the plaintiff. It is not in dispute that on 15.08.2005, the defendants entered into a MoU with respondent No.1 for sale of the suit property at a sale consideration of Rs. 14 lakhs per acre and a sum of Rs. 1 lakh was paid as advance. Balance sale consideration was to be paid within three months from the date of obtaining confirmation letter from the second respondent-Bank. It is seen from the materials that on 10.10.2005, M/s J.P. Builders, by a letter addressed to the AGM, Indian Bank Assets Recovery Management Branch II, offered a sum of Rs. 100 lakhs as full and final settlement of the dues of its sister concern which was declined by the Bank advising to revise the offer with substantial improvement. By a letter dated 23.01.2006, the Bank stated that defendant No.2 herein had not made any improvement in his one time settlement proposal of Rs. 100 lakhs and hence the Bank is 2 proceeding to enforce its rights under the Act. It is further seen that on 01.02.2006, the appellant No.2 offered a sum of Rs. 148 lakhs as one time settlement. Within two days of the said offer i.e. 03.02.2006 the plaintiff entered into a Sale Agreement with the defendants for purchase of the suit property. The sale price of Rs. 14 lakhs per acre was enhanced to Rs. 18 lakhs per acre and the respondent No.1 had paid a sum of Rs. 24 lakhs as further advance to defendant No.2. It is further seen that on 18.04.2006, a further payment of Rs. 50 lakhs was made by the plaintiff. It is also seen that on 15.05.2006, the Bank rejected the one time settlement offer of Rs. 148 lakhs stating that out of court settlement can be done if an offer of Rs. 629.60 lakhs by working out interest at PLR i.e. 11% compound on the principal outstanding as on 31.3.1993 be made. For this, defendant No.2 could not agree to pay the same.

About Writ Petition:

Objections were raised by the appellants about the hearing of 4 the writ petition along with the appeals. We have already adverted to the facts leading to the filing of two regular First Appeals before the High Court. It is not in dispute that the parties in those appeals as well as in the writ petition are one and the same except Union of India against whom the writ petitioner has not sought any relief. It is also not in dispute that the subject matter of the lis and properties are one and the same in both the appeals and the writ petition. There is no bar for the Division Bench which has jurisdiction to hear appeal, to hear writ petition when the same is connected with the main issue. In fact, no serious objection was raised before the High Court for hearing the writ petition along with the appeal. On the other hand, on the earlier occasion, when the parties have filed special leave petitions against certain interim orders, this Court requested the High Court to dispose of all the matters together. It is relevant to point out that no clarification or direction was sought in respect of the said order passed by this Court.

Cost

40) Though no serious argument was advanced about the award of cost, in the grounds raised in the appeal, the appellants have agitated the award of cost by the High Court in favour of the plaintiff. Section 35 of the CPC speaks about Cost. Inasmuch as the plaintiff after valuing the suit paid a substantial court fee of Rs. 41,66,326.50 and ultimately he secured a decree for specific performance though he could not secure a relief in its entirety, the plaintiff is entitled for his cost. It is not in dispute that the court has granted the major 5 relief, namely, decree for specific performance subject to clearance of the mortgage debt. In those circumstances, the High Court having noticed the payment of substantial court fee ordered cost payable by the contesting defendant Nos. 1 and 2 to the plaintiff. We agree with the said direction. Direction to the Recovery Officer/Tribunal

Interference under Article 136 of the Constitution of India

It is clear from the above decisions, even after issuance of notice in the special leave petition and after grant of leave, 5 irrespective of the nature of the subject matter, the appellants must show that exceptional and special circumstances exists and if there is no interference by this Court substantial and grave injustice will result and that the case has features of sufficient gravity to warrant a decision from this Court on merits.

Conclusion

85. In case defendant Nos. 1 and 2 fail to comply with the said directions in executing the sale deed, the trial Court is directed to execute the sale deed incorporating all the directions and observations made in the judgment of the High Court. Consequently, all the appeals are dismissed as devoid of any merit with no order as to costs.

NOVEMBER 22, 2010.