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HIGH COURT OF MADRAS
Honourable Mr Justice A.A.NAKKIRAN
S.PRAMILA – Appellant
Versus
K.BALA VENKATESH – Respondent
Specific Performance - Civil Suit - Specific Relief Act Section 10, Registration Act Sections 17, 49 - The court found the sale agreement unenforceable due to its unregistered nature but acknowledged the plaintiff's right to a refund of the advance amount paid.
Fact of the Case:
The plaintiff entered into a sale agreement with the defendants for a property purchase but alleged the defendants failed to fulfill their obligations. The defendants contended the agreement was not valid as it was executed only as a loan security, not as a genuine sale agreement.
Finding of the Court:
The court determined the sale agreement was unenforceable under the Registration Act due to lack of registration. However, it recognized the transaction of Rs.20,00,000 as legitimate, ordering a refund to the plaintiff with interest.
Issues: Whether the sale agreement is valid and enforceable; if the plaintiff was ready and willing to perform; whether the agreement was intended as a sale or merely loan security.
Ratio Decidendi: An unregistered sale agreement cannot be enforced as a sale but may recognize the advance payment as a valid loan transaction, meriting a refund with interest.
Final Decision: The suit for specific performance is dismissed; the defendants are ordered to refund the advance amount.
J U D G M E N T
This Civil Suit is filed seeking for relief of Specific performance as stated therein.
2. The case of the plaintiff, as set out, in the plaint is as follows: (i) The plaintiff has entered into a Sale Agreement with First Defendant and Second Defendant on 18.03.2014 for the purchase of the Property of House, Ground and premises bearing Door No.77, having entrance from Parthasarathi Puram 1st Street, Backside Kodambakkam High Road, T, Nagar, Chennai 600 017 in extent of 3253 sq.ft or thereabouts comprised in Old T.S.No.4675 of Pulliyur Village, New T.S.No.7869 of Thyagaraya Nagar, Revenue Division, Mambalam-Guindy Taluk, Chennai District admeasuring morefully described in Item No.1 in the schedule hereunder and Door No.77, Parthasarathi Puram 1st Street, T, Nagar, Chennai 600 017 in extent of 680 sq.ft comprised in Old T.S.No.4678 of Pulliyur Village, New T.S.No.7866 part of Thyagaraya Nagar Revenue Division, Mambalam-Guindy Taluk, Chennai District morefully described in Item No.2 in the schedule hereunder for total sale consideration of Rs.2,25,00,000/- (Rupees Two Crore Twenty Five Lakhs only) and the Defendants have acquired and possessed the said property by way of Settlement Deed dated 23.10.2000 registered as document No.2357 of 2000 in the Office of the Sub- Registrar, Thyagaraya Nagar and the first defendant has life interest enjoyment right and the second defendant has absolute right and ownership thereafter.
(ii)The Plaintiff states that out of above said total sale consideration of Rs.2,25,00,000/- (Rupees Two Crore Twenty Five Lakhs only), the plaintiff has paid a total sum of Rs.20,00,000/- (Rupees Twenty Lakhs only) as advance to the Defendants under the above said sale agreement as follows:- i.Rs.5,00,000/-(Rupees Five Lakhs only) by way of cheque No.464106 dated 14.3.2014 drawn on Indian Bank, Choolaimedu Branch, Chennai and ii. Rs. 15,00,000/-(Rupees Fifteen Lakhs only) by way of Demand Draft No.843520 dated 18.3.2014 drawn on Indian Bank Choolaimedu Branch, Chennai. As per clause 6 in the said sale agreement, the plaintiff and the defendants mutually agree to complete the sale transaction within nine months from the date of execution of the sale agreement. As per clause 7 in the said sale agreement the defendants agreed to settle mortgage loan dues in the schedule property before registration and to give clear title over the property and as per clause 8 and 9 the balance sale consideration of Rs.2,05,00,000/-(Rupees Two Crore Five Lakhs only) the purchaser agreed to pay the same on the date of Registration of sale deed.
(iii)The plaintiff states that in spite of the plaintiff's repeated request the defendants have not paid mortgage loan amounts and cleared mortgage encumbrance on the schedule mentioned property and the plaintiff is always ready and willing to pay balance sale consideration at the time of execution of sale deed to the Defendants as per terms and conditions of the above said sale agreement. The plaintiff has arranged the housing loan from the Bank as per sanctioned letter dated 15.11.2014. Therefore, the plaintiff has caused legal notice dated 30.9.2014 to the defendants called upon to specific perform as per terms and conditions of the above said sale agreement and the said notice were received by the defendants. The first defendant by suppressing the above said sale agreement and legal notice, sent a letter though dated 09.10.2014 posted only on 11.11.2014 therein made false, frivolous and afterthought allegations and averments and the plaintiff has sent legal notice dated 27.11.2014 to the defendants with draft sale deed for reference and the said notice was received by the defendants on 29.11.2014 and the defendants neither replied nor consented and come forward to execute sale deed.
(iv)The plaintiff came to understand that after receiving the above said legal notice, the defendants are trying to alienate the suit schedule property to some third party. Hence, the present suit h
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