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2017 Supreme(Mad) 693
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SUBBIAH & M.S. RAMESH, JJ.
V. Morichetti, S/o. P.V.N. Varadarajan - Appellant
Vs.
V.M.N. Charitable Trust by its President Valliyammal - Respondent
A.S.No.148 of 2014
Decided On : 13-04-2017
For the Appellant : Mr. T. Dhanyakumar.
For the Respondents: Mr. P. Mathivanan.
The failure to fulfill contractual obligations, such as payment and execution within the agreed period, justifies recession of the contract.
Headnote:
rescission - Trust property - 1998 Trust Deed, Partnership Deed - S.77/3B, T.S.No.1/1B, 1/2B, 1/3, Ward-A, Block-1 - Sale Agreement - Cheque No.413055 - Canara Bank, Salem - cancellation deed - recession of contract
Fact of the Case:
The plaintiff, a charitable Trust, sought to sell a property through a sale agreement with the defendant. The defendant failed to pay the agreed amount and refused to execute a cancellation deed, leading the plaintiff to file a suit for recession of the contract.
Finding of the Court:
The Trial Court decreed the suit in favor of the plaintiff, finding that the defendant was not ready and willing to execute the sale deed within the agreed period. The appellate court upheld the Trial Court's decision, finding no evidence of the defendant's payment or property division.
Issues: (1) Entitlement to recession of the sale agreement (2) Existence of a partnership agreement (3) Relief for the plaintiff
Ratio Decidendi: The defendant's failure to pay the agreed amount and execute the sale deed within the specified period justified the recession of the contract. The absence of evidence supporting the defendant's claims led to the rejection of the partnership agreement defense.
Final Decision: The appeal was dismissed, upholding the Trial Court's decision in favor of the plaintiff.
R. Subbiah, J.
This appeal has been filed against the judgment and decree dated 30.07.2012 in O.S.No.47 of 2011 passed by the learned Principal District Judge, Namakkal, decreeing the suit filed by the respondent herein for recession of contract dated 30.12.2009 entered into between the respondent and the appellant herein registered as Doc.No.6373/2009 before the Sub-Registrar Office at Rasipuram.
2. The appellant herein is the defendant and the respondent herein is the plaintiff before the Trial Court. For easy reference, hereinafter the parties are referred to as per their rankings in the suit.
3. The facts and circumstances which gave rise to the present appeal are as follows :-
3-1. The plaintiff is a charitable Trust by name V.M.N. Charitable Trust and it is a public Trust registered on 21.08.1998. The suit schedule property is situated in Kattanachampatti Village in S.No.77/3B, T.S.No.1/1B, 1/2B, 1/3, Ward-A, Block-1 at Rasipuram Town. The Plaintiff Trust had got the suit property by way of a Settlement Deed dated 18.11.1999. From the date of the said Settlement, the suit property was in possession and enjoyment of the plaintiff-Trust. In the Trust, there are three Trustees. As per Class S & K of the Trust Deed, Trust can sell the properties of the Trust, if the Trustees unanimously resolved to sell the property for the benefit of the Trust. At the time of forming the Trust, one E. Nagachandran was the President and R.P. OmIyyappa Eswara was the Secretary and one E. Manikandan was the Treasurer. The said E. Nagachandran had resigned from Presidentship/Trusteeship on 11.11.2006 and on his resignation, one R. Valliyammal was appointed as President and Trustee.
3-2. It is stated that in order to fulfil the object of the Trust and also to settle the debts of the Trust as well as for the improvement of the Trust, the Trustees wanted to sell the suit schedule property. In this regard, an unanimous resolution was also passed on 10.10.2009 and as per the said resolution, it was decided to sell the suit schedule property to the defendant. Hence, for this purpose, an agreement of sale was entered into between the plaintiff and the defendant on 30.12.2009. As per the said Sale Agreement, sale price was fixed as Rs.15 lakhs and time for performance of the contract was fixed as 11 months. On the date of agreement, towards advance amount, the defendant issued a cheque to the plaintiff for a sum of Rs.1 lakh bearing Cheque No.413055 drawn on Canara Bank, Salem; however, the defendant requested the plaintiff not to present the cheque for collection as there was no sufficient funds in his bank account. Pursuant to his request, the said cheque was not presented for collection by the plaintiff. The 11 months' time fixed for performance of the sale agreement expired on 30.11.2010. But, the defendant has not come forward to pay the sale consideration to get the sale deed executed in his favour within the time fixed under the sale agreement. Hence, the plaintiff issued a legal notice on 01.12.2010 and the same was received by the defendant on 03.12.2010. But, the defendant did not send any reply. Since the defendant has not paid the amount as agreed by the defendant under the sale agreement dated 30.12.2009, the sale agreement is not supported by any consideration. Hence, the Trustees of the plaintiff Trust on 14.03.2011 approached the defendant and requested him to execute a cancellation deed cancelling the sale agreement dated 30.12.2009. But, the defendant refused to execute the cancellation deed. Therefore, left with no other alternative, the plaintiff has filed the suit for recession of the sale agreement/contract dated 30.12.2009 entered into between the plaintiff and the defendant.
4. Before the Trial court, resisting the case of the plaintiff, the defendant filed a written statement contending that it is true that there was a sale agreement entered into between the plaintiff and the defendant on 30.11.2009; pursuant to the said sa
