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HIGH COURT OF MADRAS
Honourable Mr Justice P.B. BALAJI
K.SAILENDRA KUMAR – Appellant
Versus
R.CHANDRASEKARAN – Respondent
C.S.No.256 of 2013
Specific Performance - Sale Agreement - Specific Relief Act, 1963, Limitation Act, 1963 - Sections 16, 54 - The court held that the plaintiffs were entitled to specific performance of the sale agreement despite the first defendant's contradictory claims and the pending arbitration, emphasizing the plaintiffs' readiness and willingness to perform their obligations.
Fact of the Case:
The plaintiffs entered into a sale agreement with the first defendant for land, paying substantial advances. The first defendant delayed executing the sale deed, citing arbitration issues with a second defendant. The plaintiffs sought specific performance after making total payments of Rs.3,47,25,000.
Finding of the Court:
The court found that the plaintiffs had shown readiness and willingness to perform their obligations under the sale agreement. The first defendant's contradictory statements and failure to provide evidence undermined their claims. The court ruled in favor of the plaintiffs for specific performance.
Issues: Whether the sale agreement is valid, if the plaintiffs were ready and willing to perform, if the suit is barred by limitation, and if the agreement is enforceable despite being unregistered.
Ratio Decidendi: The court established that the plaintiffs' consistent payments and possession of the property indicated their readiness to perform. The agreement's enforceability was upheld despite non-registration, and the suit was not barred by limitation.
Final Decision: The suit is decreed in favor of the plaintiffs, directing the first defendant to execute the sale deed upon payment of Rs.4 crores to the second defendant.
J U D G M E N T
The suit has been filed for the relief of specific performance and permanent injunction. However, the second relief was given up by the plaintiffs.
2. The case of the plaintiffs:- The 1st plaintiff entered into an agreement of sale with the first defendant on 30.06.2008 for purchasing the suit schedule mentioned land alone for a sum of Rs.4 crores. On the date of the agreement of sale, the plaintiffs have paid an advance of Rs.24,50,000/-. The balance sale consideration was agreed to be paid within 12 months from the date of the said agreement of sale. Clause 4 of the agreement of sale dated 30.06.2008, states that in the event of the purchaser i.e., the first plaintiff paying Rs.1,50,00,000/- of sale consideration, the Vendor viz, the first defendant would hand over possession of the suit property, along with original title deeds to the plaintiffs.
3. It is the specific case of the plaintiffs that on 04.08.2008, on receipt of further advance of Rs.1.28 Crores, the first defendant handed over the original title deeds and also put the plaintiffs in vacant possession of the suit schedule mentioned property. It is the further case of the plaintiffs that apart from the above amounts, further advances were made on 26.08.2008- Rs.50,00,000/-; 27.08.2008-Rs.20,00,000/-; 24.10.2008-46,00,000/-; 05.06.2009-5,00,000/-; 09.06.2009-10,00,000/-; 24.06.2009-2,00,000/-; 04.07.2009-Rs.3,00,000/-; 10.07.2009-Rs.5,00,000/-; 07.08.2009- 3,50,000/- ; 03.09.2009-Rs.20,25,000/-; 29.02.2012-Rs.5,00,000/- and 23.03.2012- Rs.25,00,000/-. In all, the plaintiffs have paid a total sum of Rs.3,47,25,000/- to the first defendant, for which payments were duly acknowledged by the first defendant by executing receipts for the same.
4. The plaintiffs were eager to complete the transaction. However, the first defendant was postponing the execution and registration of sale deed in their favour. In the first week of July 2009, when the plaintiffs met the first defendant, the first defendant informed the plaintiffs about some Arbitration Proceedings before this Court, initiated by the second defendant against the first defendant. In view of the huge advance paid by the plaintiffs, the plaintiffs requested the first defendant to settle all disputes with the second defendant at the earliest and receive the balance sale consideration and complete the transaction. The first defendant agreed and sought time to negotiate with the second defendant and requested for releasing further payments to provide clear marketable title and only under such request of the first defendant, the plaintiffs advanced further monies even after July 2009, when they came to know about the Arbitration proceedings.
5. The plaintiffs further came to know that the first defendant had entered into a Memorandum of Understanding (MoU) with the second defendant on 31.03.2007, agreeing to procure 250 acres of land in and around Sriperumbudur District as an aggregater and only in view of the difference of opinion arising between the first and second defendants in pursuance of the said Memorandum of Understanding, the Arbitration Proceedings had been initiated and an injunction order was also granted besides an attachment order against all properties belonging to the first defendant.
6. On coming to know about the same, the plaintiffs filed Applications in A.Nos.3551 & 3552 of 2009 in the said Section 9 Application filed by the second defendant under the Arbitration and Conciliation Act, 1996 and A.No.2181 of 2009 for impleading themselves as parties and also seeking to vacate the interim order. It is the specific case of the plaintiffs that no orders came to be passed in the said Applications. Further, the plaintiffs stated that the defendants have appeared before the Arbitrator and filed a joint compromise memo for passing an award in the form of a money decree against the first defendant and on the basis of the same, an award was also passed on 19.12.2011. As the first defendant failed to
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