2022 Supreme(Mad) 974
IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. CHANDRASEKHARAN, J.
Metrohm India Ltd. - Plaintiff
Versus
M. Sivakumari & Ors. - Defendants
C.S. No. 190 of 2013
Decided On : 20-12-2022
Advocate Appeared:
For the Plaintiff :M/s. T.V. Krishnamachari, Senior Advocate for C. Jagadish.
The central legal point established is that misrepresentation and mutual mistake as to the property's identity rendered the sale deed void under Section 20 of the Indian Contract Act.
Headnote:
Misrepresentation - Property Sale - Indian Contract Act - Section 20 - S.No.415/3B, S.No.415/15 - Notification, Judicial Notice - Sale Deed, Possession, Due Diligence - Tamil Nadu Housing Board Acquisition - Compensation
Fact of the Case:
The plaintiff filed a suit seeking declaration that a sale deed executed by the defendants is void and for recovery of the sale amount and damages. The plaintiff alleged that the defendants misrepresented the property's identity, leading to the sale of a property acquired by the Tamil Nadu Housing Board. The defendants denied misrepresentation and claimed the sale was valid.
Finding of the Court:
The court found that the plaintiff was given possession of a different property (S.No.415/15) than the one mentioned in the sale deed (S.No.415/3B), which was already acquired by the Tamil Nadu Housing Board. The court held the sale deed void and awarded the plaintiff the sale amount with interest. The claim for damages was dismissed.
Issues: 1. Validity of the sale deed 2. Recovery of sale amount with interest 3. Claim for damages 4. Due diligence before purchase 5. Possession of the property 6. Any other relief
Ratio Decidendi: The court applied Section 20 of the Indian Contract Act, which states that an agreement is void if both parties are under a mistake as to a matter of fact essential to the agreement. The court found that the defendants and their predecessors were also mistaken about the property's identity. The plaintiff's due diligence was considered reasonable, and the defendants were held liable for the loss caused to the plaintiff.
Final Decision: The suit was decreed in part, declaring the sale deed void and awarding the plaintiff the sale amount with interest. The claim for damages was dismissed, and the Sub-Registrar was directed to cancel the sale deed.
JUDGMENT :
This suit is filed for the relief of declaration that the registered sale deed, dated 18.12.2008, registered as document No.1563 of 2009, before the Sub-Registrar office, Neelankarai executed by the defendants in favour of the plaintiff is void and to be set aside with a consequential relief of directing the defendants to repay the plaintiff a sum of Rs.6,80,55,000/- together with subsequent interest at 18% per annum on Rs.3,90,00,000/- from the date of the plaint to till the date of realisation; directing the defendants to pay the plaintiff a sum of Rs.2,00,00,000/- together with subsequent interest @ 18% per annum on Rs.2,00,00,000/- from the date of plaint to till the date of realisation towards damages and for the costs of the suit.
2. The case of the plaintiff is that the defendants represented that they are the owners of the property at old S.No.415/3, later S.No.415/3C/2, new survey No.415/3B in Sholinganallur Village, Tambaram Taluk, Kancheepuram District described in the schedule. The property was sold to the plaintiff on 18.12.2008 for a sale consideration of Rs.3,90,00,000/-. Defendants handed over certain revenue records and title deed representing that they pertain to the suit property. The boundaries of 40 cents purchased in the aforesaid S.No. are mentioned in the sale deed. The defendants handed over the property with a factory shed representing that it is the property covered and conveyed under the sale deed. Plaintiff approached various departments in order to develop the property and to comply with the formalities for the purpose of development of the property. The patta which stood in the name of the defendants in patta No.4629 was also transferred in the name of the plaintiff. When certain department officials came to the property with the sketch, they informed the plaintiff that the land and the factory shed, which were handed over to the plaintiff, is not situated in S.No.415/3B, but situated in S.No.415/15. The authorities after verifying the records informed the plaintiff that S.No.415/3B is situated elsewhere and they located it and showed the same, which is 4 blocks away from the property covered by the sale deed. When the plaintiff went to the area to identify S.No.415/3B, there were objections from some persons and the plaintiff was not allowed to fence that area. He was informed that the area was acquired by the Tamil Nadu Housing Board. Plaintiff gathered information under the Right to Information Act from the Tamil Nadu Housing Board. The Executive Engineer cum Public Information Officer, Tamil Nadu Housing Board sent a reply stating that S.No.415/3B and S.No.415/3C are not referred to in the acquisition proceedings, but S.No.415/15 - 40 cents is forming part of the acquisition proceedings. It is further stated that the land acquisition officer has not handed over the possession of the said 40 cents in S.No.415/15 to the Tamil Nadu Housing Board. Plaintiff was shocked to learn that the property conveyed by the defendants to the plaintiff under the sale deed is in S.No.415/15 and not in S.No.415/3B. In fact, as per the revenue records and physical features, there is no building in S.No.415/3B. Thus, it is clear that the defendants have misrepresented the facts and conveyed the property in S.No.415/15 misrepresenting it as in S.No.415/3B and extracted a sum of Rs.3,90,00,000/- from the plaintiff. It is clear that the defendants have no title to the land in S.No.415/3B. This is a gross misrepresentation. There is no entry in the land survey register correlating S.No.415/3C with 415/3B. Plaintiff issued a legal notice dated 21.03.2012 to the defendants calling upon them to refund the sale consideration of Rs.3,90,00,000/- together with interest and to pay damages. The defendants sent a reply dated 10.04.2012 assuming that they were the owners of old No.415/3C/2, which later became 415/3