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SUPREME COURT OF INDIA
L. NAGESWARA RAO, S. RAVINDRA BHAT, JJ.
A.R. Madana Gopal Etc. Etc. – Appellant
Versus
M/s Ramnath Publications Pvt. Limited And Another – Respondent
Civil Appeal Nos. 3523-3526 of 2010
Decided on : 09-04-2021
(A) Specific Relief Act, 1963 – Section 20 – Agreement to Sell – Suits for specific performance of agreements of sale and Memoranda of Understanding (MOU) – Non-execution of sale-deeds by respondents – Appellants were required to pay balance sale consideration at the time of registration of sale deeds immediately when Writ Petition is disposed of upholding sale agreement – Payment of balance consideration has to be done only at the time of registration of sale deeds – No steps were taken for registration of sale deeds – Finding of Division Bench of High Court that Appellants were not ready and willing to perform their part of contract by not paying balance consideration immediately after disposal of Writ Petition is erroneous – Appellants were in possession of first floor of property – Details about manner in which possession was given to Appellants not being pleaded cannot be a ground to deny relief. (Paras 11 and 13)
(B) Agreement to Sell – Suits for specific performance of agreements of sale and Memoranda of Understanding (MOU) – Non-execution of sale-deeds by respondents – Suit for specific performance cannot be dismissed on sole ground of delay or laches – However, exception to this rule is where an immovable property is to be sold within a certain period, time being of essence, and it is not found that owing to some default on part of plaintiff, sale could not take place within stipulated time – Once suit for specific performance has been filed, any delay as a result of Court process cannot be put against plaintiff as a matter of law in decreeing specific performance – However, it is within discretion of Court, regard being had to facts of each case, as to whether some additional amount ought or ought not to be paid by plaintiff once a decree of specific performance is passed in its favour even at the appellate stage – Appellants did not file civil suits immediately after disposal of Writ Petition in 1998 due to pendency of Writ Appeals – Escalation of prices cannot be sole ground to deny specific performance – Respondents are not entitled for any additional amount as 90 per cent of sale consideration was paid by Appellants before 1994 – Judgment of Division Bench of High Court set aside and judgment and decree passed by Single Judge restored. (Paras 14 and 15)
Facts of the case:
Appellants filed four suits for specific performance of agreements of sale dated 20.03.1991 and Memoranda of Understanding (MOU) dated 24.01.1994. These Appeals are filed against judgment of the Division Bench of the Madras High Court by which a decree for specific performance passed by the learned Single Judge was reversed.
Findings of Court:
Respondents are not entitled for any additional amount as 90 per cent of the sale consideration was paid by the Appellants before 1994. It is not necessary to deal with the submission of Appellants regarding the applicability of the amendment to the Specific Relief Act, 1963, in view of the conclusion that we have reached in favour of Appellants.
Result : Appeals allowed.
JUDGMENT :
L. NAGESWARA RAO, J.
1. These Appeals are filed against the judgment of the Division Bench of the Madras High Court by which a decree for specific performance passed by the learned Single Judge was reversed.
2. The Appellants filed four suits for specific performance of the agreements of sale dated 20.03.1991 and Memoranda of Understanding (MOU) dated 24.01.1994. In addition, the Appellants prayed for a direction to the Respondents to deliver vacant possession of the schedule property, a decree of permanent injunction restraining the Respondents from alienating or encumbering the suit property and a decree of mandatory injunction to deposit the title deeds with the Court. It was alleged in the plaints that the Respondent entered into separate agreements with the Appellants who belong to the same family for sale of property situated at Door No.325, Arcot Road, Vadapalani, Chennai on 20.03.1991. As per the terms of the agreement, the sale was to be concluded within a period of four months. The Respondents would produce the encumbrance certificate much before the execution and registration of the sale deeds. The Respondents should also obtain the income tax clearance certificate under Section 230-A of the Income Tax Act, 1961. To comply with the obligation stipulated in the agreement, the first Respondent applied to the Income Tax authorities for permission to alienate the property. The Income Tax authorities passed an order for compulsory acquisition of property on 25.06.1991.
3. The Writ Petition filed by the Respondents challenging the order of the Income Tax authority was allowed by the Madras High Court by its judgment dated 21.12.1992. The authorities were directed to reconsider the matter afresh. The Income Tax authorities passed another order on 22.02.1993 directing purchase of the property. The said order was challenged in the High Court and an interim order of injunction was passed on 10.03.1993. The parties were directed to maintain status quo and not to change the nature of the property. In view of the developments after the agreements relating to the orders passed by the Income Tax authorities and the pendency of the Writ Petitions challenging those orders, the Appellants and the Respondents entered into four separate MOUs on 24.01.1994. The recitals of the MOUs would show that they were in addition and not in substitution of the agreements dated 20.03.1991. It was agreed that the Respondents shall continue to keep the original title deeds until completion of the sale by registration of the sale deeds. The original title deeds would be handed over to the Appellants at the time of registration. It was also recorded in the Memorandum that certain amounts were paid by the Appellants and the balance of the sale price shall be paid to the Respondents at the time of registration of the sale deeds immediately after the disposal of the Writ Petitions in their favour.
4. The Writ Petitions filed against the compulsory acquisition by the Income Tax authorities were disposed of on 11.09.1998. The judgment of the learned Single Judge of the High Court allowing the Writ Petitions was challenged by the Income Tax department by way of filing of an appeal. When the Appellants made a demand for execution of sale deeds, the Respondents informed them that it can be done only after disposal of the Writ Appeal. Indian Bank filed a suit for recovery of its dues from the Respondents. As the Respondents were not executing the sale deeds in spite of repeated requests, the Appellants filed separate suits for specific performance.
5. In the written statement filed by the Respondents, it was submitted that the MOU dated 22.01.1994 substituted the suit agreements dated 20.03.1991. It was contended on behalf of the Respondents that the suit was time barred. Time was the essence of the agreement dated 20.03.1991 as it was agreed between the parties that the sale should be concluded within a period of four months. Though, the Writ Petition fil
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