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SUPREME COURT OF INDIA
R. Banumathi and Uday Umesh Lalit, JJ.
P. Meenakshisundaram – Appellant
Versus
P. Vijayakumar & Anr. – Respondents
Civil Appeal Nos. 3353-3354 Of 2018 (Arising Out of SLP (Civil) Nos. 22018-22019 of 2014)
Decided On : 28-03-2018
(1967) 1 SCR 227; (2011) 1 SCC 429 – Relied upon
(1994) 1 SCC 1 – Distinguished
Facts of the case:
The appellant had mortgaged the suit property with the Catholic Syrian Bank (later Federal Bank Ltd.) and the bank had initiated recovery proceedings.
On 30.06.2000 the appellant entered into an agreement intending to sell the suit property to respondent No.1. The consideration agreed was Rs. 19 lakhs out of which Rs. 1 lakh was paid by way of advance. This agreement recited an assurance on the part of the appellant, "...that there is no encumbrance over the Schedule mentioned property".
The cheques issued thereafter by respondent No.1 were dishonored but the parties entered into a subsequent agreement on 20.09.2000 under which the consideration was fixed at Rs. 37.5 lakhs. As per this agreement, even the movables utilized for marriage hall were also included. Over and above Rs. 1 lakh which was already received as advance, additional sums of Rs. 2 lakhs by way of cheque and Rs. 3 lakhs by way of demand draft were paid on the same day. The suit agreement recited that the remaining amount had to be paid and the sale deed to be registered by 20.03.2001.
On 21.02.2001 a further sum of Rs. 2 lakhs was paid by way of cheque by respondent No.1. An amount of Rs. 10 lakhs was paid by cheque on 22.09.2001, which according to respondent No.1 was made over to the appellant so that the dues of the bank could be settled.
On 29.07.2002 a legal notice was issued by respondent No.1 through his advocate. Possession of the suit property was handed over to respondent No.1 by the appellant on 03.08.2002.
On 02.09.2002 an IA No.126 of 2002 was preferred by respondent No.1 to implead himself in the Transfer Application No.1441 of 2002 before DRT, Coimbatore. Appellant denied all the assertions made by the advocate for respondent No.1 and cancelled the agreement dated 20.09.2000. The appellant also complained to DIG of the relevant range and sought police protection and preferred OP No.226 of 2002 in the High Court against respondent No.1.
On 19.02.2002, respondent No.1 filed OS No.764 of 2002 seeking specific performance of the agreement dated 20.09.2000. The plaint was later amended and the Federal Bank Ltd. through its Branch Manager was added as second defendant.
The appellant prayed for delivery of possession of the suit property, past mesne profits of Rs. 5,40,000/- and future mesne profits as well.
The Presenting Officer of the Federal Bank Ltd. filed a memo on 08.12.2009 in the proceedings before DRT Coimbatore that the appellant had remitted a sum of Rs. 13,42,173/- on 16.11.2009 towards full and final settlement of the account. It was therefore prayed by the Presenting Officer that satisfaction of the claim be recorded.
The trial court decreed OS No.764 of 2002 and dismissed the counter claim preferred by the appellant. All the issues were answered in favour of respondent No.1. The appellant was directed to execute the sale deed in respect of the suit property and register the same in favour of respondent No.1 after receiving the balance sale consideration within three months and the appellant was further directed to pay to respondent a sum of Rs. 3,23,038/- towards the costs of the suit. It was observed that time was not the essence of the contract.
The appellant filed appeals in the High Court.
The High Court found that the readiness and willingness on the part of respondent No.1 stood established. The High Court dismissed the appeals, namely, Appeal Suit Nos.218-219 of 2010 preferred by the appellant.
Finding of the Court:
Suit for specific performance preferred by respondent No.1 dismissed. Appellant held entitled to recovery of possession.
Result: Appeals allowed.
JUDGMENT
Uday Umesh Lalit, J.
Leave granted.
2. These appeals by special leave challenge the correctness of the judgment and order dated 07.01.2014 passed by the High Court of Madras in Appeal Suit (MD) Nos. 218-219 of 2010.
3. The facts leading to the filing of these appeals in brief are as under :-
A. The property in question is a plot admeasuring about 3708 sq.ft., with a marriage hall ("Suit Property", for short) situated in Village Parasuramanpatti, Madurai North Taluk, Tallakulakam sub- Division, Madurai North. The appellant had mortgaged the suit property with the Catholic Syrian Bank (later Federal Bank Ltd.) and the bank had initiated recovery proceedings, namely, O.S. No.40 of 1996 before 3rd Additional Sub-Court, Madurai which was later transferred to DRT, Coimbatore and renumbered as Transfer Application No.1441 of 2002.
B. On 30.06.2000 the appellant entered into an agreement (Ex.A1) intending to sell the suit property to respondent No.1. The consideration agreed was Rs. 19 lakhs out of which Rs. 1 lakh was paid by way of advance. This agreement recited an assurance on the part of the appellant, "...that there is no encumbrance over the Schedule mentioned property" but went on to state:-
"The 2nd Party says that the original Parent Document in respect of the property is not available with the 2nd party and it is in the bank. In case, there is any loan availed by the 2nd party either on the schedule property or on other property, then the 2nd party has to pay the said loan amount by getting it from the 1st party and to get the Original Parent Document and other supportive records in respect of the schedule property and the 2nd party has to hand over the same to the 1st party."
C. The cheques issued thereafter by respondent No.1 were dishonored (as evident from Notice Ex.A-2 dated 18.09.2000) but the parties entered into a subsequent agreement on 20.09.2000 ("the suit agreement", for short) under which the consideration was fixed at Rs. 37.5 lakhs. As per this agreement, even the movables utilized for marriage hall were also included. Over and above Rs. 1 lakh which was already received as advance, additional sums of Rs. 2 lakhs by way of cheque and Rs. 3 lakhs by way of demand draft were paid on the same day. The suit agreement recited that the remaining amount had to be paid and the sale deed to be registered by 20.03.2001 in following terms:-
".........the 1st party has to pay the remaining amount of sale consideration of Rs. 26,50,000/- (Rupees twenty six lakhs and fifty thousand only) within 20.03.2001 either before the Sub Registrar or in person and the 2nd party has to receive the same and give proof to that effect and the said Sale Deed has to be registered by the 2nd party without any encumbrance and that there is no other person except the 2nd party to have title over the same."
D. Though the relevant terms in the suit agreement were identical to those in agreement (Ex.A1), the understanding between the parties as on the date when the suit agreement was entered into was captured in the subsequent communication of respondent No.1 dated 22.09.2001 (Ex.A6) as under :-
"That on further persuasion and negotiations between the parties, it was agreed to have a fresh sale agreement with reference to the said Kalyana Mandapam and annexe. As your client wanted to clear the entire loan in the Catholic Syrian Bank only by himself, the sale price of the said property was agreed for Rs. 37,50,000/- only and a sum of Rs. 5,00,000/- (Rupees five lakhs only) through D.D. and Cheque was paid additionally to your client by making the total advance of Rs. 6,00,000/- including the cash advance of Rs. 1,00,000/- already paid on the earlier agreement dated 30.06.2000. Therefore in supersession of the earlier agreement dated 30.06.2000 a fresh sale agreement was made on 20.09.2000 with the parties concerned."
E. On 21.02.2001 a further sum of Rs. 2 lakhs was paid by way of cheque by respondent No.1. Though the transaction was to be completed
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