IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.S. SUNDAR, C. KUMARAPPAN, JJ.
K.R. Sundararaj & Another – Appellants
Versus
M. Nataraj & Another – Respondents
AS. No. 1116 of 2015
Decided On : 13-07-2023
In a suit for specific performance of an agreement to sell immovable property, the court held that time was of the essence of the contract and that the plaintiff had not proved his readiness and willingness to perform his part of the contract. The court also held that the subsequent sale of the property by the vendor to a third party was a sham transaction, but that this did not entitle the plaintiff to specific performance. The court dismissed the appeal filed by the vendor and the subsequent purchaser.
Fact of the Case:
The plaintiff entered into an agreement to purchase a property from the defendants for a total consideration of Rs.27,71,400/-. The agreement specified that the plaintiff was to pay a balance of Rs.17,71,400/- within one month from the date of the agreement. The plaintiff failed to pay the balance amount within the stipulated time and the defendants sold the property to a third party. The plaintiff filed a suit for specific performance of the agreement.
Finding of the Court:
The court held that time was of the essence of the contract and that the plaintiff had not proved his readiness and willingness to perform his part of the contract. The court also held that the subsequent sale of the property by the vendor to a third party was a sham transaction, but that this did not entitle the plaintiff to specific performance.
Issues: 1. Whether time was of the essence of the contract? 2. Whether the plaintiff had proved his readiness and willingness to perform his part of the contract? 3. Whether the subsequent sale of the property by the vendor to a third party was a sham transaction? 4. Whether the plaintiff was entitled to specific performance?
Ratio Decidendi: The court held that time was of the essence of the contract based on the following factors: * The agreement specified that the plaintiff was to pay the balance amount within one month from the date of the agreement. * The plaintiff failed to pay the balance amount within the stipulated time. * The defendants sold the property to a third party after the plaintiff failed to pay the balance amount. The court held that the plaintiff had not proved his readiness and willingness to perform his part of the contract based on the following factors: * The plaintiff did not pay the balance amount within the stipulated time. * The plaintiff did not produce the necessary documents to the defendants for the execution of the sale deed. * The plaintiff did not contact the defendants after the defendants issued a notice to the plaintiff stating that they would cancel the agreement if the plaintiff did not pay the balance amount.
Final Decision: The court dismissed the appeal filed by the vendor and the subsequent purchaser.
JUDGMENT
(Prayer: Appeal Suit filed under Section 96 of CPC against the judgment and decree dated 30.04.2015 passed in OS.No.648/2011 by the learned I Additional District Judge, Coimbatore.)
S.S. Sundar.
(1)Defendants 2 and 3 in the suit in OS.No.648/2011 on the file of I Additional District Court, Coimbatore, are the appellants in the above appeal.
(2)Brief facts that are necessary for the disposal of this appeal are as follows:
(a)The 1st respondent herein, as plaintiff, filed the suit in OS.No.648/2011 against the 2nd respondent and the appellants for specific performance of an Agreement dated 29.07.2011 by directing the defendants to execute the Sale Deed free from encumbrance upon receipt of the balance sale consideration and for permanent injunction restraining the defendants from in any manner alienating or encumbering the suit properties and for consequential reliefs.
(b)It is the case of the 1st respondent/plaintiff that the 1st defendant in the suit executed a registered Power of Attorney Deed in favour of 2nd defendant in respect of the suit property on 16.06.2011 giving the absolute right to the 2nd defendant to deal with the property and the 2nd defendant entered into an Agreement of Sale with the plaintiff on 29.07.2011 to sell the suit property for a total consideration of Rs.27,71,400/-. It is his further case that on the date of Agreement, the plaintiff paid an advance of Rs.10 lakhs and the plaintiff agreed to complete the sale within a period of one month from the date of Agreement by paying the balance sale consideration of Rs.17,71,400/-. It is the case of plaintiff that he was always ready and willing to purchase the property by paying the balance sale consideration as per the Agreement and that on several occasions, he had informed the 2nd defendant to come forward to execute the Sale Deed by receiving the balance sale consideration. It is stated that the 2nd defendant, with ulterior motive, postponed the same. It is also stated by the plaintiff that defendants 1 and 2 had not given the Death Certificate of one Kallakkal and the original documents in respect of the suit property. It is contended in the plaint that the plaintiff issued a Legal notice on 25.08.2011 calling upon defendants 1 and 2 to execute the Sale Deed, but the 2nd defendant issued a notice on the same day as if the plaintiff did not come forward to get the Sale Deed registered and called upon the plaintiff to come to the Registrar office within seven days with balance sale consideration.
(c)It is stated in the plaint that the plaintiff sent a reply to the notice sent by the 2nd defendant on 26.08.2011 inter alia, pointing out that he would be ready to pay balance sale consideration and get the Sale Deed registered on 29.08.2011 provided the defendants produce the necessary original documents for registration. It is also contended in the plaint that the plaintiff was present before the Sub Registrar from 27.08.2011 for about a week, but the defendants did not turn up to execute the Sale Deed. The plaintiff while applying for Encumbrance Certificate, also came to know that the 2nd defendant had sold the property in favour of 3rd defendant on 15.09.2011 and that the said Sale Deed is fraudulent as the 3rd defendant is none else than the son of 2nd defendant. Stating that the Sale Deed executed by the 2nd defendant in favour of 3rd defendant is fraudulent, collusive and not binding on the plaintiff and that the plaintiff was ready and willing to perform his part of the contract by paying the balance sale consideration, the suit for specific performance was filed by the plaintiff / 1st respondent herein.
(d)The 1st defendant filed a written statement admitting that he is the owner and the general Power of Attorney Deed dated 16.06.2011 appointing the 2nd defendant as her Power of Attorney agent to sell the property. Strangely, the 1st defendant stated in her written statement that s
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