Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(Mad) 2079

IN THE HIGH COURT OF JUDICATURE AT MADRAS
SENTHILKUMAR RAMAMOORTHY, J.
M/s.SPN Hotels Private Limited, Rep. by its Managing Director, SP.N. Krishnamoorthy, Chennai - Appellant
Versus
M/s. Sree Gokulam Hotels (India) Pvt. Ltd., Rep. by its Director,V.C. Praveen, Chennai & Another - Respondent
Application No. 4393 of 2021 in Civil Suit (Comm. Div) No. 642 of 2019
Decided On : 29-06-2022

Advocates appeared:
For the Applicant:M/s. R. Balachanderan, V.J ayaprakash, Advocates. For the Respondents:R1, T.V. Ramanujun, Senior Counsel, M/s. R. Ramya, R2, A. Subadra, Advocates.

The main legal point established in the judgment is the application of the grounds for summary judgment as prescribed in Rule 3 of Order XIII-A of CPC and the interpretation of similar provisions in the Civil Procedure Rules (CPR) of the United Kingdom. The judgment emphasizes the plaintiff's burden to establish readiness and willingness to fulfill its obligations under the Sale Agreement and the court's discretion to grant summary judgment based on the applicant's entitlement to relief.

Headnote:
Summary Judgment - Specific Performance - Order XIV Rule – 14(8) of Original Side Rules read with Order 13-A of CPC - The court examined the applicant's entitlement to a summary judgment in relation to the relief of specific performance. The suit sought specific performance of a Sale Agreement for immovable and movable property, with an alternative prayer for refund of money paid as consideration with interest. The court analyzed the grounds for summary judgment as prescribed in Rule 3 of Order XIII-A of CPC and the procedure for summary judgment as per Rules 4, 5, and 6. The court also considered the interpretation of similar provisions in the Civil Procedure Rules (CPR) of the United Kingdom and relevant judgments from the UK and Indian courts. The court applied the principles established in previous judgments to determine the applicant's entitlement to summary judgment.
Fact of the Case:

The plaintiff sought specific performance of a Sale Agreement for immovable and movable property, with an alternative prayer for refund of money paid as consideration with interest. The second defendant applied for summary judgment in relation to the relief of specific performance, contending that the plaintiff had no real prospect of succeeding in the suit claim. The plaintiff's readiness and willingness to fulfill its obligations under the Sale Agreement, the alleged failure of the first defendant to obtain concurrence from the Bank for a one-time settlement, and the plaintiff's knowledge of the execution of a sale deed in favor of the second defendant were key issues in the case.
Finding of the Court:

The court found that the plaintiff did not have a realistic prospect of success as regards the relief of specific performance. The court examined the plaintiff's payments under the Sale Agreement, the plaintiff's alleged readiness and willingness to fulfill its obligations, and the plaintiff's knowledge of the execution of a sale deed in favor of the second defendant. The court concluded that the plaintiff's evidence did not establish its readiness and willingness to perform the Sale Agreement after a certain date, and that the plaintiff's knowledge of the execution of a sale deed in favor of the second defendant indicated a lack of realistic prospect of success in the suit claim for specific performance.
Issues: The primary issue was whether the plaintiff had a realistic prospect of succeeding in the suit claim for specific performance. Sub-issues included the plaintiff's readiness and willingness to fulfill its obligations under the Sale Agreement, the alleged failure of the first defendant to obtain concurrence from the Bank for a one-time settlement, and the plaintiff's knowledge of the execution of a sale deed in favor of the second defendant.
Ratio Decidendi: The court applied the principles established in previous judgments to determine the applicant's entitlement to summary judgment. The court examined the plaintiff's payments under the Sale Agreement, the plaintiff's alleged readiness and willingness to fulfill its obligations, and the plaintiff's knowledge of the execution of a sale deed in favor of the second defendant. The court concluded that the plaintiff did not have a realistic prospect of success as regards the relief of specific performance.
Final Decision: The court allowed the application by pronouncing a summary judgment rejecting the suit claim insofar as it relates to the prayer for execution of a sale deed by the defendants in favor of the plaintiff and the alternative prayer for refund of money paid as consideration with interest. The plaintiff was at liberty to prosecute the suit with regard to the reliefs claimed against the first defendant.

JUDGMENT

(This Application is filed under Order XIV Rule – 14(8) of Original Side Rules read with Order 13-A of CPC read with Clause 12 of Letters Patent praying to dispense with the procedure of trial and pass a Summary Judgment in favour of the applicant/second defendant by dismissing the relief of directing the first defendant to execute and register the sale deed joining the second defendant as second vendor conveying the Schedule “A” and “B” properties free of all encumbrances in favour of the plaintiff as per the terms of the agreement for sale dated 29.12.2014 entered into between the plaintiff and the first defendant to convey clear and marketable title to the plaintiff and consequently direct the first defendant to hand over vacant possession of the suit schedule “A” and “B” properties to the 2nd defendant to be fixed by this Court, failing which appoint an officer of Court to perform the same.)

1. In a suit by the first respondent/plaintiff for specific performance of a contract relating to immovable and movable property with an alternative prayer for refund of money paid as consideration with interest, the second defendant, which is the subsequent purchaser of the relevant property, has presented this application for summary judgment insofar as it relates to the relief of specific performance.

2. The applicant/second defendant stated that the first defendant had borrowed money from the State Bank of Bikaner and Jaipur (the Bank) by creating a mortgage over three properties that the first defendant owned then. These properties are located at Old Mahabalipuram Road (the OMR Property), Coimbatore (the Coimbatore Property) and T.Nagar, Chennai (the T.Nagar Property), respectively. According to the applicant, Mr.A.M.Gopalan, the Managing Director of the plaintiff and K.R.V.Ramani, the former Managing Director of the first defendant, were close friends. Since the Bank called upon the borrower to discharge the loans, the applicant stated that the plaintiff entered into agreements of sale in respect of the above mentioned three properties. As regards the OMR Property, an agreement of sale dated 24.05.2012 was entered into by which the plaintiff agreed to purchase the property at the sale consideration of Rs.55 crore. From and out of the sale consideration, it was agreed that a sum of Rs.35 crore would be paid directly to the Bank. A separate sale agreement dated 28.01.2014 was entered into between the plaintiff and the first defendant in respect of the Coimbatore Property with a sale consideration of Rs.58.50 crore. From and out of this sum, a sum of Rs.20 crore was agreed to be paid directly to the Bank. A third sale agreement dated 29.12.2014 (the Sale Agreement) was entered into in respect of the T.Nagar Property, including the movables therein (the suit schedule property). The sale consideration in respect thereof was fixed at Rs.81 crore. From and out of this sum, a sum of Rs.39 crore was to be paid directly to the Bank.

3. As regards the OMR Property, the plaintiff paid the full sale consideration and a sale deed dated 05.01.2015 was executed in its favour. Likewise, as regards the Coimbatore Property, the plaintiff paid the full sale consideration and a sale deed dated 23.09.2015 was executed in its favour. However, as regards the suit schedule property, according to the applicant, the plaintiff paid part consideration in 2014 and 2015 and, thereafter, decided to resile from the Sale Agreement. A little later, the applicant/second defendant was approached in relation to the purchase of this property. Pursuant thereto, the applicant/second defendant purchased the property for a total sale consideration of Rs.50,00,11,000/- under sale deed dated 31.03.2017. Subsequently, on 22.08.2017, Mr.K.R.V.Ramani resigned as Managing Director of the first defendant company.

4. According to the applicant, after abandoning the Sale Agreement, the plaintiff changed its mind about four years later and decided to resurrect its claim for spe