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High Court of Judicature at Madras
R. MALA
Indian Bank Employees Union, rep. by its Assistant Secretary
Versus
M.A. Zubaida Ammal (since deceased) & Others
A.S.No.654 of 2009
Decided on : 30-03-2011
Suit for specific performance of contract - Time is not essence of contract - Readiness and willingness to perform contract - Clean hands - Discretionary relief of specific performance.
Fact of the Case:
The appellants/plaintiffs filed a suit for specific performance of contract on the basis of the sale agreement dated 19.01.1980 under Ex.A71. Admittedly, the suit property was belonging to the respondents/defendants. Since they have not executed the sale deed, the appellants/plaintiffs filed a suit for specific performance. After hearing the arguments of both sides counsel, the trial Court dismissed the suit stating that the appellants are not ready and willing to perform their part of contract, the suit is barred by limitation and the appellants/plaintiffs are not entitled to the decree of specific performance as prayed for in the suit.
Finding of the Court:
The Court held that the time is not essence of the contract, the suit is not barred by limitation, the appellants are not ready and willing to perform their part of contract, the appellants have not come to the Court with clean hands and hence they are not entitled to the equitable relief of decree of specific performance.
Issues: 1. Whether the Trial Court is correct in held that the appellants are not ready and willing to perform their part of contract? 2. Whether the Trial Court is correct in held that the suit is barred by limitation? 3. Whether the appellants are entitled to the decree of specific performance as prayed for in the suit? 4. Whether the judgment and decree passed by the trial Court are sustainable? 5. To what relief, the appellants are entitled to?
Ratio Decidendi: 1. The conduct of the parties played vital role for deciding that whether the time is essence for performing contract and whether the suit for specific performance is barred by limitation. 2. As per Article 54 of the Limitation Act, three years from the date fixed for the performance or if no such date is fixed, when the plaintiff has notice that performance is refused. 3. The appellants/plaintiffs are not ready and willing to perform their part of contract. 4. The appellants/plaintiffs have not come to the Court with clean hands. 5. The appellants/plaintiffs are not entitled to the equitable relief of decree of specific performance.
Final Decision: The Appeal Suit is dismissed with costs. The judgment and decree passed by the trial Court are hereby confirmed.
1. This First Appeal (Appeal Suit) arises out of the judgment and decree dated 21.11.2007 made in O.S.No.15373 of 1996 on the file of the III Additional City Civil Court, Madras.
2. The averments made in the plaint are as follows:
(i) The suit property bearing Old Door No.317, New Door No.138, Thambu Chetty Street, Madras-600 001 was purchased by the second defendant under a registered sale deed dated 08.07.1965 subject to the mortgage deed in favour of Madras Purasawalkam Hindu Janopakara Saswatha Nidhi (hereinafter referred to as 'The Nidhi'). The suit property was purchased by the second defendant with the funds belonging to the first defendant and therefore, the second defendant executed a Release Deed in favour of the first defendant on 05.01.1979.
(ii) In order to discharge the various mortgages created by the second defendant and his predecessor in title, the first and second defendants have entered into a sale agreement with the plaintiffs on 09.07.1976 for Rs.4,75,000/- subject to the mortgages.
The plaintiffs should pay an additional sum of Rs.50,000/- for delivering vacant possession by the Departments of the entire building except the ground floor to the purchaser viz., the plaintiffs herein, apart from the amount of Rs.50,000/- paid as an advance. A period of three months' time was given for execution of the sale deed. The defendants 1 and 2 ought to have produce income tax clearance certificate on or before 15.09.1976. The plaintiffs have discharged all the mortgage debts and obtained the original title deeds from the Nidhi on 08.04.1980. The plaintiffs had also paid a sum of Rs.4,22,000/- on various dates till 18.01.1980 to the first and second defendants, but they failed and neglected to execute the sale deed in favour of the plaintiffs.
(iii) The defendants wanted to extract more money from the plaintiffs and demanded a further sum of Rs.1.50 lakhs before they could execute the sale deed in favour of the plaintiffs. Thereupon, all the defendants jointly executed another agreement on 19.01.1980 purporting to be in continuation of the old agreement dated 09.07.1976 and three months' time is granted for execution of the sale deed. The defendants ought to have vacate the Dhandapani Electricals from the first floor of the suit property and ought to have produce the necessary income tax, gift tax and urban land ceiling clearance certificates, but in spite of repeated demands, the defendants have not produced the same and not vacated the Dhandapani Electricals, though the President of the Indian Bank Employees Union, Mr. P.M.Vellaiyan has made a constant requests for conveying the property to the plaintiffs.
(iv) The plaintiffs submitted that time is not the essence of contract. So far the plaintiffs paid a sum of Rs.6,07,507/- and the balance is only Rs.67,493/- towards sale consideration, which is required to be paid before the Sub Registrar at the time of registration of the sale deed.
(v) The plaintiffs were always ready and willing to pay the balance sale consideration and get ready with the documents. The plaintiffs also obtained sanction of a loan of Rs.2,00,000/- from the Indian Bank against the title deeds of the suit property and that loan is still open and is kept open always. The plaintiffs caused a lawyer's notice on 23.03.1984 calling upon the defendants to execute the sale deed, but they have not received any reply. Since the defendants are making arrangements for alienating the suit property, the plaintiffs are constrained to file the suit for decree of specific performance of contract and also for injunction restraining the defendants from alienating the property and for other reliefs and prayed for a decree.
3. The gist and essence of the written statement filed by the defendants 1 to 3, adopted by the fourth defendant are as follows:
(i) The suit is barred by limitation. The agreement date is 19.01.1980. Three months' time is stipulated for performance of contract. The contract was also ex
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