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MADRAS HIGH COURT
R. SHANMUGAM S/O. RAMASAMY – Appellant
Versus
CHINNAKANNU – Respondent
AS 1001 2009
SPECIFIC PERFORMANCE - SALE OF LAND - AGREEMENT FOR SALE - ROAD ACCESS - FAILURE TO PURCHASE ROAD ACCESS - REFUND OF EXCESS AMOUNT - SECTION 62 OF THE CONTRACT ACT - INNOVATION OF CONTRACT - UNREGISTERED AGREEMENT - SPECIFIC PERFORMANCE NOT MAINTAINABLE - REFUND OF EXCESS AMOUNT MAINTAINABLE.
Fact of the Case:
The plaintiffs entered into an agreement for sale with defendants 6 and 7 for the purchase of a property. The agreement provided that the defendants would purchase a road access to the property from the eighth defendant. The plaintiffs paid a sum of Rs.1,10,000/- as advance. The defendants failed to purchase the road access and as a result, the plaintiffs were unable to take possession of the property. The plaintiffs filed a suit for specific performance and refund of the excess amount paid by them.
Finding of the Court:
The court held that the plaintiffs were not entitled to specific performance as the defendants had failed to purchase the road access. However, the court held that the plaintiffs were entitled to a refund of the excess amount paid by them.
Issues: 1) Whether the plaintiffs are entitled to relief of specific performance?2) Whether the plaintiffs are entitled for refund of excess amount paid by them as per the agreement dated 23.07.2007?
Ratio Decidendi: 1) The court held that the plaintiffs were not entitled to specific performance as the defendants had failed to purchase the road access. This was because the agreement for sale was contingent on the defendants purchasing the road access and the defendants had failed to do so.2) The court held that the plaintiffs were entitled to a refund of the excess amount paid by them. This was because the defendants had failed to perform their part of the contract and the plaintiffs were entitled to be compensated for their loss.
Final Decision: The court partly allowed the appeal. The court set aside the judgment and decree of the trial court insofar as the rejection of the suit claim. The court directed the defendants to refund Rs.9,10,000/- to the plaintiffs with interest at the rate of 6% per annum from the date of receipt of the amount till repayment of the said amount, within a period of four weeks from the date of receipt of copy of the order. The court also directed the eighth defendant to pay a sum of Rs.4,00,000/- with interest at the rate of 6% per annum from the date of receipt of the said amount till realisation in favour of the plaintiffs within a period of four weeks from the date of receipt of copy of the order.
AS.No.1001 of 2009
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 18.12.2023
CORAM:
THE HON'BLE MR.JUSTICE G.K.ILANTHIRAIYAN
AS.No.1001 of 2009 and
MP.No.1 of 2009
R.Shanmugam
... Appellant
Vs.
1.Chinnakannu
2.Nagarajan
3.Rajendran
4.Murugan
5.Venkatachalam
6.S.P.Thiyagarajan
7.Sathiyamoorthi
8.T.Easwarn
9.S.Chandrasekaran
...Respondents
PRAYER: Appeal Suit is filed under Section 96 of CPC against the judgment
and decree dated 27.07.2009 in OS.No.65 of 2008 on the file of the Additional
District Judge(Fast Track Court-I), Salem.
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AS.No.1001 of 2009
For Appellant : Mr.K.A.Ravindran
For Respondents
For R1 to 5, 8, 9 : Notice served
For R6 & 7
: Mr.P.Jagadeesan
JUDGMENT
This Appeal suit is filed against the judgment and decree dated
27.07.2009 passed in OS.No.65 of 2008 on the file of the Additional District
Judge(Fast Track Court-I), Salem, thereby dismissed the suit for specific
performance and also refund of excess amount.
2. For the sake of convenience, the parties are referred to as per their
ranking in the trial Court.
3. The appellant is the second plaintiff, respondents 1 to 8 are the
defendants and the ninth respondent is the first plaintiff in the above suit. The
case of the plaintiffs is that the suit property owned by defendants 1 to 5. They
gave power of attorney in favour of defendants 6 and 7 dated 04.07.2007 to deal
with the suit property. On the strength of the power of attorney, defendants 6 &
7 entered into an agreement for sale with the plaintiffs on 23.07.2007 to
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AS.No.1001 of 2009
purchase the suit property admeasuring 39 cents (17004 sq.ft.) for consideration
of Rs.19/- per sq.ft. There is no road approach for the suit property. On the date
of the agreement for sale, defendants 6 and 7 had received a sum of
Rs.1,10,000/- as advance and also part of sale consideration. As per the terms of
the agreement, both the parties agreed to complete their part of performance
within a period of three months from the date of the agreement for sale. The
total sale consideration was fixed at Rs.3,23,076/-. It was registered vide
document No.4840 of 2007.
3.1 Since there is no approach road for the suit property, defendants 6
and 7 agreed to purchase a bit of land from the eighth defendant and convey the
same in favour of the plaintiffs. In the event of purchasing the said bit of land
for road purposes, the plaintiffs and defendants 6 and 7 have agreed to refix the
sale price at Rs.151/- per sq.ft. for the suit property. In order to purchase the bit
of land from the eighth defendant, another agreement was entered between them
on 25.07.2007 and thereby fixed rate of Rs.10,71,000/- for the road portion to
an extent of 2520 sq.ft. to be purchased from the eighth defendant. As per the
said agreement, the plaintiffs have paid further sum of Rs.6,00,000/- on
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AS.No.1001 of 2009
29.08.2007 to defendants 6 and 7 and also paid another sum of Rs.6,00,000/-
thereafter. They were being power of attorney of defendants 1 to 5, they had
received the entire amount of Rs.13,10,000/-. However, defendants 6 and 7
could not able to purchase the road portion of the property from the eighth
defendant. They caused notice on 05.11.2007 thereby called upon the plaintiffs
to perform their part of contract. However, on enquiry, the plaintiffs came to
understand that the eighth defendant did not agree to sell his property in favour
of defendants 6 and 7. Therefore, the plaintiffs caused suitable reply notice on
12.11.2007. Defendants 6 and 7 also caused rejoinder. Thereafter, the plaintiffs
came to understand that the total sale consideration fixed at Rs.10,71,000/- for
the road portion of the land was not paid by defendants 6 and
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