COMMON JUDGMENT:

A.S.No.2399 of 2001 is an appeal by the defendant against the judgment and decree in a suit O.S.No.379 of 1995 filed for specific performance on the file of the II Additional Senior Civil Judge, Visakhapatnam dated 07.03.2001. The said decree directed the appellant/defendant to execute and register a sale deed in favour of the plaintiff/respondent herein by receiving the balance sale consideration with interest at 18% from the date of suit. The respondent/plaintiff was also aggrieved by the said decree to the extent of directing payment of interest on the balance sale consideration and has filed a separate appeal being A.S.No.448 of 2002 on 23.07.2001 against the said decree. The defendant had also filed a counter claim in the suit O.S.No.379 of 1995 seeking eviction of the plaintiff and for damages and the same was dismissed by the trial Court while decreeing specific performance in favour of the plaintiff. The defendant, therefore, has filed Cross-Objections (SR).No.86461 of 2001 in A.S.No.448 of 2002 to the extent of rejection of counter claim.

2. Both the appeals and the cross-objections have been heard at length. The learned Advocate General appearing for the defendant/cross-objector had made detailed submissions in support of the cross-objections against the decree and has also made elaborate submissions against the decree for specific performance granted in the said suit O.S.No.379 of 1995. Mr. V.S.R. Anjaneyulu, learned counsel for the plaintiff has also equally and elaborately argued in support of sustaining the decree for specific performance and had also very seriously opposed the maintainability of the cross-objections as well as merits thereof.

3. The plaintiff in O.S.No.379 of 1995 - M/s. Jobing Syndicate –a registered partnership firm, is seeking to enforce an agreement of sale dated 01.08.1990. The defendant – M/s. Andhra Graphite (P) Limited, is a company, which was allotted suit plot by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for the purpose of establishing its graphite manufacturing unit. M/s. Jobing Syndicate is hereinafter referred to as plaintiff and M/s. Andhra Graphite (P) Limited is hereinafter referred to as defendant for the sake of convenience and clarity.

4. (a) The defendant was allotted plot No.D-12 with shed and appurtenant area in the industrial estate Visakhapatnam on lease hold basis by APIIC under an agreement dated 03.06.1961. The defendant unit, however, became sick around 1982-83 and started recurring losses and fell in arrears of hire charges to APIIC as well as liabilities towards Andhra Pradesh State Electricity Board (APSEB) etc. Later in the year 1984-86 the lease hold in favour of the defendant was converted into hire purchase but the industrial sickness of the defendant continued and around 1990, the defendant was not able to generate any income from the said unit and fell in substantial arrears to various financial institutions including APIIC resulting in APIIC threatening to cancel the allotment by taking over possession.

ACKGROUND FACTS: (b) The defendant, therefore, gave an advertisement intending to give the unit on long lease basis to interested parties. The plaintiff, who was running a steel manufacturing unit in Alipuram area, which was residential area, was looking for an alternate location and after seeing the advertisement the plaintiff, being interested, inspected the unit and as per the advertisement, met P.W.2, who was the auditor of the defendant and who was looking after the proposed lease by the defendant. The plaintiff was informed that Rs.83,000/- was immediately payable to APIIC to avoid cancellation of allotment. The plaintiff being interested in taking the unit, after discussions with the defendant and his auditor, immediately advanced Rs.85,000/- by a cheque drawn in favour of the defendant on 15.06.1990 and it is alleged that the plaintiff and the defendant together encashed the cheque and later deposite