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2014 Supreme(Mad) 4088
High Court of Judicature at Madras
G.M. AKBAR ALI, J.
Chevalier T. Thomas Educational Trust, Rep., By Its Trustees & Others
Versus
M/s. Union Carbide Employees Co-operative House Building Society Ltd., Chennai
C.S. No. 209 of 2008
Decided On : 14-11-2014
For the Plaintiffs :V. Shanmugham, Advocate.
For the Defendant :P. Anbarasan, Advocate.
The main legal point established in the judgment is that the time was not the essence of the contract, and the court balanced the equities to decree specific performance for the sale of 6 grounds of land at a revised sale consideration of Rs.80,83,829.
Headnote:
Specific Performance - Sale Agreement - The Tamil Nadu Cooperative Societies Act, 1983 - Rule 78(3) - The plaintiff, an Educational Trust, sought specific performance of a sale agreement for establishing a school. The defendant, a Cooperative Society, contended that the agreement was invalid under Rule 78(3) of The Tamil Nadu Cooperative Societies Rules, 1988. The court held that the agreement was valid as the defendant was a Housing Society and the property was earmarked for a school. The court also found that the time was not the essence of the contract and the suit was not barred by limitation. The plaintiff was found to be ready and willing to perform their part of the contract. The court balanced the equities and decreed specific performance for the sale of 6 grounds of land at a revised sale consideration of Rs.80,83,829.
Fact of the Case:
The plaintiff, an Educational Trust, sought specific performance of a sale agreement for establishing a school. The defendant, a Cooperative Society, contended that the agreement was invalid under Rule 78(3) of The Tamil Nadu Cooperative Societies Rules, 1988. The defendant also argued that the suit was barred by limitation and that the plaintiff was not ready and willing to perform their part of the contract.
Finding of the Court:
The court found that the agreement was valid, the suit was not barred by limitation, and the plaintiff was ready and willing to perform their part of the contract. The court balanced the equities and decreed specific performance for the sale of 6 grounds of land at a revised sale consideration of Rs.80,83,829.
Issues: The issues included the validity of the sale agreement, limitation, readiness and willingness of the plaintiff, and entitlement to interest for delayed payment.
Ratio Decidendi: The court held that the agreement was valid as the defendant was a Housing Society and the property was earmarked for a school. The court also found that the time was not the essence of the contract and the suit was not barred by limitation. The plaintiff was found to be ready and willing to perform their part of the contract. The court balanced the equities and decreed specific performance for the sale of 6 grounds of land at a revised sale consideration of Rs.80,83,829.
Final Decision: The court decreed specific performance for the sale of 6 grounds of land at a revised sale consideration of Rs.80,83,829.
1. Suit is for Specific Performance of a sale agreement dated 31.3.1999. The brief facts involved are as follows. The plaintiff is an Educational Trust, established under the Registered Deed of Declaration dated 4.4.1975 executed by one Sevaliar T. Thomas, a Philanthrophist. Therefore, the trust was named after him as "Sevaliar T. Thomas T. Educational trust". The main object of the Trust was to establish educational institutions and various properties were vested with the Trust and 8 trustees were named.
2. In the year 1999, one Mrs. Elizebeth Thomas was the Managing Trustee cum Secretary and correspondent of the Trust. The defendant, M/s Union Carbide Employees Co-operative House Building Society Ltd., represented by the then President, agreed to sell an extent of 13 grounds and 1852 sq.ft of land in S.No.57/1 at Kodungaiyur village at Thandiarpet to the plaintiff Trust for establishing a School.
3. A sale agreement dated 31.3.1999 was executed by the defendant and the sale consideration was fixed at Rs.35,80,633/-. A sum of Rs.5,00,000/- was paid as advance and the plaintiff was put in possession in part performance of the agreement on 8.9.1999 and a further sum of Rs.5,00,000/- was also paid.
4. On taking possession, the plaintiff Trust put up a temporary construction and they have been running a school from June 1999. Though the balance amount has to be paid in 12 months, it was specifically agreed that the period of agreement will be extended and therefore, time was not the essence of the contract.
5. In the meantime, a suit came to be filed for framing of scheme for the Trust before this court. By a judgment and decree dated 5.12.2002 a scheme was framed for the administration of the Trust and a Board of 9 Trustees with a retired Judge as Chairman was appointed and a retired senior IAS Officer as the Executive Trustee.
6. On assuming charge, the Managing Trustee was writing to the defendants to perform their part of the contract. On 9.1.2004 the Trust expressed their readiness and willingness to pay the balance sale consideration and called upon the defendant to execute the sale deed. However, on 3.11.2004, the plaintiff received a letter from the defendant Society advising the plaintiff to pay the balance amount of Rs.25,80,633/- with interest at 18% p.a within 15 days failing which eviction proceedings will be initiated.
7. Since there is no condition in the original agreement to pay interest, the plaintiff was requesting the Defendant Society to accept the balance consideration and execute the sale deed. Inspite of several reminders sent stating the plaintiff's readiness and willingness the defendants society was not willing. Therefore, a lawyer's notice was issued on 24.7.2007 calling upon the defendant society to receive the balance amount. The said notice was returned “unserved”. On coming to know that the society was administered by a Special Officer, another notice dated 13.8.2007 was issued, for which there is no reply. Therefore, the present suit.
8. The plaintiff is always ready and willing to perform their part of the contract and pay the balance sale consideration and they are entitled for specific performance of the sale deed.
9. The brief averment made in the written statement is as follows:
10. The suit is not maintainable as it is barred by limitation. A sale agreement was executed on 31.3.1999 and the period of one year specified therein lapsed on 30.3.2000. The Plaintiff Trust was not properly constituted and had no valid right, financial resources and infrastructural facilities to establish and run a school.
11. Admittedly, this court has constituted the Trustees only on 5.2.2002. Though the sale agreement was executed on 31.3.1999, further payments were not made as per the agreement. The suit property was earmarked for a school and playground in the layout plan promoted by the defendants House Building Society. Since the plaintiffs Trust evinced interest in establishing such a school, an ag
