The suit has been filed for specific performance of the Development Agreement agreement dated 10.09.2003 and for permanent injunction or in the alternative for recovery of damages towards breach of suit agreement and for return of advance amount.
2. The plaint averments are as follows :
(a) The defendants 1 and 2 are owning four plots of land in S.No.415, Mogappair village, Saidapet Taluk, Chengapet District. The plaint schedule item 1-A and 1-B belong to first defendant and 2-A and 2-B are of the second defendant. The third defendant, power of attorney agent of D1 and D2 entered into a Development Agreement with the plaintiff at Chennai on 10.09.2003. As per Clause 19 of the agreement, the defendants put the plaintiff in possession of the suit schedule property. As per the agreement, the plaintiff agreed to construct on the suit schedule property exclusively at his own cost a multi-storied complex, as per the building plan as may be permitted by the authorities concerned. Under Clause 3, the plaintiff agreed to commence the construction of the building within 30 days of obtaining sanction for the building plan and complete the construction within 18 months with a grace period of three months from the date of plan sanction. The plaintiff and defendants agreed to share the constructed area in the ratio 56:44.
(b) As soon as the defendants made available the patta, the plaintiff prepared the plan and submitted the application to CMDA on 23.01.2004 for approval. The CMDA required to produce No Objection Certification from TNHB as the land was under Land Acquisition Notification. The defendants obtained No Objection Certification from the TNHB and handed over the same to the plaintiff on 25.06.2004. When the same was submitted to the CMDA, they insisted fresh NOC without any ambiguity. The plaintiff took pains and finally obtained a fresh NOC on 31.10.2004 and submitted the same to CMDA. The plaintiff also cleared the bushes and demarcated the boundaries of the site and also dug a well for construction purpose.
(c) On the date of suit agreement, as per clause 6(a) of the agreement, the plaintiff had paid a sum of Rs.10,00,000/- to the defendants 1 and 2 as refundable advance. On the request of the defendants 1 and 2, the plaintiff paid a sum of Rs.4,00,000/- on 14.01.2004 and Rs.1,00,000/- on 23.03.2004 and Rs.5,00,000/- on 21.11.2004 and thus he paid a total sum of Rs.20,00,000/- as refundable advance to the defendants towards suit agreement. The plaintiff was taking all possible steps to obtain plan sanction from CMDA and start the main work from 15.01.2005. While so, the third defendant sent a letter dated 15.12.2004 containing false and untrue allegations and purporting to terminate the suit agreement. The defendants 1 and 2 also sent a letter dated 25.12.2004 confirming the alleged termination. The plaintiff sent a reply on 27.12.2004 disputing the claim of the defendants. The third defendant sent a further letter dated 02.01.2005 confirming the earlier letter dated 25.12.2004. Therefore, the plaintiff caused legal notice to the defendants on 05.01.2005 informing the alleged termination as illegal.
(d) On 06.01.2005 when the plaintiff workers started clearing the bushes, the third defendant came along with his henchmen and assaulted one Murugesan who was working at the construction site.
The third defendant also threatened one Masthan, a real estate broker who was instrumental in bringing the suit agreement. Therefore the plaintiff as well as the said Mr.Masthan gave police complaints about the incident to the Inspector of Police, J.J.Nagar Police Station on 06.01.2005 apprehending further interference and threats from the defendants. The plaintiff filed O.S.No.30 of 2005 on the file of the District Munsif Court, Ambattur for a declaration that the alleged termination of the suit agreement dated 10.09.2003 is illegal and invalid and for a permanent injunction.
(e) In the meantime, the defendants are trying to develop the suit schedule property by engaging some other property developer. Therefore, the plaintiff has come forward with the present suit seeking the relief of specific performance of the suit agreement. The plaintiff was always ready and willing to perform the suit agreement, dated 10.09.2003 in accordance with the terms. The third defendant has written to the CMDA withdrawing the application for plan sanction and therefore, the plaintiff is not able to proceed with the construction work. Pursuant to clause 8 of the suit agreement, the plaintiff has entered into agreements with third parties and has committed himself to fulfill the obligations arising out of such agreements. The defendants are bound to honour the same and cannot unilaterally terminate the suit agreement. The suit agreement is specifically unenforceable under Section 14(3) of the Specific Relief Act.
(f) As an alternative relief, the plaintiff is entitled to claim damages for the breach of suit agreement and for return of the sum of Rs.20,00,000/- paid as refundable advance from the defendants. By fully performing the suit agreement, the plaintiff will be making a profit of Rs.71,00,000/-. Apart from damages the plaintiff is also entitled to refund of the advance amount of Rs.20,00,000/-. In all the plaintiff is entitled to a sum of Rs.91,00,000/- from the defendants. Therefore, the suit has been filed.
3. The contention of the written statement filed by the third defendant and adopted by D1 and D2 are as follows :
(a) The third defendant is the power of attorney holder of the defendants 1 and 2 in respect of the suit schedule land. The third defendant as power agent of first and second defendants entered into a Development Agreement on 10.09.2003 with the plaintiff in respect of the suit lands, which belonged to the first and second defendants. The Development Agreement, dated 10.09.2003 is only a joint venture agreement under the said agreement. There is no dispute about the receipt of Rs.20,00,000/- from the plaintiff as a refundable advance without interest. As per the agreement, the plaintiff should construct 24 flats in the land of 14,400 sq.ft at his cost. The plaintiff shall have a share of 56% of the flats and the defendants 1 and 2 shall have 44% of the flats. The plaintiff should apply for plan sanction forthwith to CMDA at his cost. The plaintiff obtained the original documents of the land mentioned in 2(A) of the schedule in the plaint belonging to the second defendant.
(b) The Development Agreement, dated 10.09.2003 was not an agreement for specific performance by the defendants. It was only an executory agreement. The plaintiff has to perform his part of the contract under the executory agreement to claim anything under the Development Agreement, dated 10.09.2003. The Development Agreement dated 10.09.2003 is frustrated by the plaintiff's inaction coupled with fraud.
(c) The plaintiff promised that he would start construction of the flats within six months from the date of Development Agreement, dated 10.09.2003 and to complete and hand over the 44% of the flats to the defendants 1 and 2. The plaintiff also informed the third defendant that he would get CMDA approval of the plan within 90 days and at any cost within 180 days. The possession of the suit land was not given to the plaintiff and the same remained with the defendants 1 and 2. The plaintiff was given a license to enter with the suit land and to start construction work. Clause 19 of the agreement meant only that.
(d) The defendants 1 and 2 obtained patta of their land and delivered to the plaintiff on 30.09.2003. But the plaintiff applied for the plan approval to the CMDA only on 23.01.2004 after about 4 months.
(e) CMDA had not asked for the production of any No Objection Certificate from the TNHB. The plaintiff unnecessarily and with an intend to delay the matter had asked the defendants to produce a certificate of NOC from TNHB. The defendants also obtained a certificate of No objection from TNHB and delivered to the plaintiff. The plaintiff insisted again for another certificate with more particulars. The defendants again approached the TNHB and obtained another certificate of NOC and the same was also delivered to the plaintiff. The plaintiff had not produced any certificate from TNHB to CMDA. Neither the CMDA asked for any such certificate nor it was produced by the plaintiff to CMDA. The plaintiff had not demarcated the boundaries of land nor cleared any bushes. The well which was taken is without water. The defendants had not given any permission to dig well.
(f) The defendants are willing to refund the advance amount of Rs.20,00,000/-. The Development Agreement was terminated on 15.12.2004. Even as on 15.12.2004, the plan was not approved by CMDA. The plan was returned to the third defendant on 17.02.2005 by the CMDA. Further the Development Agreement, dated 10.09.2003 was not a registered instrument. This Court has no jurisdiction. The instant suit is also not maintainable and hit by Order 2 Rule 2 of CPC. The defendants came to know that the signature of the third defendant was forged by the plaintiff for applying plan sanction. The plaintiff had no money to construct the flats. The plaintiff was the sole cause for the delay. Any Development Agreement or Joint Venture Agreement is subject to CMDA Rules. The plaintiff had no right to negotiate with third parties on the sale of flats, without construction of flats. Clause 18 of the Development Agreement, dated 10.09.2003 is not at all applicable at this stage. It will come into effect only if the flats are constructed as per the approved plan of CMDA. Till then, Clause 18 of the Development Agreement could not be invoked by either party. The question of specific performance under Section 14 (3) (c) of the Specific Relief Act, 1963 is not applicable. It cannot be invoked by the plaintiff. It is a clause that could only be invoked by the land owner.
(g) The plaintiff without investing any money on the construction of flats is now indulging in notional profits. The plaintiff entered into the Development Agreement, dated 10.09.2004 and to delay his part of Executory Agreement so as to claim notional profit as unjust enrichment. The plaintiff is not entitled for any notional and future profit. No cause of action is arisen within the original jurisdiction of this Court. The plaintiff forged the signature of the third defendant in the deed of reconstruction dated 25.01.2004 and got it attested by the notary public clandestinely and produced before the CMDA for sanction and approval of plan. Therefore, the plaintiff is not entitled to any relief.
4. The contention of the reply statement filed by the plaintiff are as follows :
All the allegations made in the written statement are denied. The Development Agreement, dated 10.09.2003 was executed only within the jurisdiction of this Court where the plaintiff's office is situate. All the documents filed with CMDA were filed by the third defendant under his signature only and the plaintiff did not file any document as alleged.
5. Against the Judgment and Decree passed by this Court, the plaintiff preferred appeal in O.S.A.No.141 of 2012. The Division Bench of this Court allowed the appeal, setting aside the Judgment and Decree of the learned single Judge and remitted the suit for fresh consideration. As per the Judgment of the Division Bench, this Court is required to hear the parties and decide the additional issues framed on Order 2 Rule 2 CPC and thereafter, decide the other issues in suit.
6. On perusal of the pleadings of the parties, the following issues have been framed for trial :
"1. Whether the suit is liable to be dismissed, in view of the earlier suit filed by the plaintiff, on the same cause of action, in view of Order II Rule 2 CPC ?
2. Whether the plaintiff is entitled to get a decree for specific performance of contract on the basis of Development Agreement dated 10.09.2003 and to get a consequential order of permanent injunction as prayed for ?
3. Whether the plaintiff is entitled to the alternative relief of Rs.71,00,000/- towards damages for breach of suit agreement and Rs.20,00,000/- being the return of advance amount ?
4. Whether the suit land was subjected to any land acquisition proceedings of the Tamil Nadu Housing Board ?
5. Whether the plaintiff has failed to perform his part of the contract ?
6. Whether clause 18 of the Development Agreement dated 10.09.2003 will be applicable ?
7. Whether the plaintiff is entitled to claim any damages in spite of his inordinate delay in executing the contract ?
8. Whether the plaintiff has any cause of action to file the suit ?
9. To what relief the plaintiff is entitled ?"
7. Issue No.1 :
The fact remains that the plaintiff filed O.S.No.30 of 2005 on the file of the District Munsif Court, Ambattur that the alleged termination of the suit agreement dated 10.09.2003 as illegal and invalid and for permanent injunction. The present suit has been filed for specific performance.
8. The learned Senior counsel appearing for the defendants contends that the earlier suit was filed by the plaintiff on the same cause of action and therefore, the present suit is liable to be dismissed in view of Order 2 Rule 2 CPC. The learned counsel appearing for the plaintiff contends that the cause of action is not one and the same and this issue came to finality by the order of this Court dated 21.01.2006 in A.Nos.5412 and 5413 of 2005 and therefore, the defendant is estopped from raising the issue through estoppel by accord created by the doctrine of res judicata.
9. The requirement for application of the provisions contained in Order 2 Rule 2 (2) and (3) is that the cause of action in the latter suit must be the same as in the first suit. In Virgo Industries (Eng.) (P) Ltd., v. Venturetech Solutions (P) Ltd., reported in (2013) 1 SCC 625, the Hon'ble Supreme Court as to the meaning of cause of action has held as follows :
"The huge number of opinions rendered on the issue including the judicial pronouncements available does not fundamentally direct from what is stated in Halsbury's Laws of England (4th Edn.). The following reference from the above work would, therefore, be apt for being extracted herein below :
'Cause of action' has been defined as meaning simply a factual situation existence of which entitles one person to obtain from the Court a remedy against another person. The phrase has been held from the earliest time to include every fact which is material to be proved to entitle the plaintiff to succeed and every fact which a defendant would have a right to traverse. 'Cause of action' has also been taken to mean that particular action on the part of the defendant which gives the plaintiff his cause of complaint, or the subject-matter of grievance founding the action, not merely the technical cause of action."
10. The learned Senior counsel appearing for the defendants cited the above Judgment and contended that the cause of action in the suit for permanent injunction and in the subsequent suit for specific performance is one and the same. In the above Judgment, the Hon'ble Supreme Court found that in the earlier suit, the plaintiff stated that the defendant is attempting to frustrate the agreement entered into between the parties and therefore, held that the subsequent suit for specific performance is hit under Order 2 Rule 2 CPC. Therefore, the above Judgment is not helpful to the defendants.
11. This Court perused the plaint filed in O.S.No.30 of 2005 before the District Munsif Court, Ambattur, wherein it has been clearly stated that the third defendant after issuing termination notice, came with hooligans and removed the advertisement board of the plaintiff. In the present suit, the plaintiff contended that the delay in commencing the work is entirely due to the failure on the part of the defendants and the plaintiff entered into agreements and negotiate for sale the 56% of the constructed area falling to the plaintiff's share and the defendants are bound to honour the same.
12. The learned counsel appearing for the plaintiff cited the Judgment of the Hon'ble Supreme Court in Rathnavathi and others v. Kavita Ganashamdas reported in (2015) 5 SCC 223, and contended that cause of action for the two suits are different and therefore, the plea of bar under Order 2 Rule 2 CPC is not applicable. In the above Judgment, it has been held as follows :
"25.1 So far as the suit for permanent injunction is concerned, it was based on a threat given to the plaintiff by the defendants to dispossess her from the suit house on 2-1- 2000 and 9-1-2000. This would be clear from reading Para 17 of the plaint. So far as the cause of action to file suit for specific performance of the agreement is concerned, the same was based on non-performance of agreement dated 15-2-1989 by Defendant 2 in the plaintiff's favour despite giving legal notice dated 6-3-2000 to Defendant 2 to perform her part.
25.2 In our considered opinion, both the suits were, therefore, founded on different causes of action and hence could be filed simultaneously. Indeed even the ingredients to file the suit for permanent injunction are different than that of the suit for specific performance of the agreement."
13. As already pointed out, a perusal of plaints in both the suits discloses that the causes of action are distinct and different. The defendants already filed A.No.5413 of 2005 seeking rejection of the plaint mainly on the ground that the present suit is barred under Order 2 Rule 2 CPC. This Court by its order dated 21.01.2006 dismissed the above said application holding that the causes of action are distinct and different. No appeal was preferred as against the said order and it became final.
14. The learned counsel appearing for the plaintiff cited the Judgment of the Hon'ble Supreme Court in Prahalad Singh v. Sukhdev Singh reported in (1987) 1 SCC 727, wherein the Hon'ble Supreme Court has held as follows :
"...That the decision given by a court at an earlier stage of a case is binding at a later stage is well settled, though interlocutory judgments are open for adjudication by an appellate authority in an appeal against the final judgment. In Satyadhyan Ghosal v. Deorajin Debi, reported in AIR 1960 SC 941, this Court said :
The principle of res judicata applies also as between two stages in the same litigation to this extent that a court, whether the trial court or a higher court having at an earlier stage decided a matter in one way will not allow the parties to re-agitate the matter again at a subsequent stage of the same proceedings.
It was however clarified that it did not mean that because at an earlier stage of the litigation a court has decided an interlocutory matter in one way and no appeal has been taken therefrom or no appeal did lie, a higher court cannot at a latter stage of the same litigation consider the matter again..."
15. In Bhanu Kumar Jain v. Archana Kumar & another reported in 2005-1-LW-582, the Hon'ble Supreme Court has held as follows :
"29. Res judicata debars a court from exercising its jurisdiction to determine the lis if it has attained finality between the parties whereas the doctrine issue estoppel is invoked against the party. If such an issue is decided against him, he would be estopped from raising the same in the latter proceeding. The doctrine of res judicata creates a different kind of estoppel viz Estopper By Accord."
16. Thus it is clear that the defendants are not entitled to re- agitate the already settled issue in the same proceedings. Therefore there is no bar in view of Order 2 Rule 2 CPC to maintain the present suit and this issue is answered in favour of the plaintiff.
17. Issue No.6 :
The learned Senior counsel appearing for the defendants repletely contends that the Development Agreement is not enforceable in law at the instance of the plaintiff / developer. Clause 18 of the Development Agreement, dated 10.09.2003 entered into between the parties reads thus :
"The owners and Developer agree and covenant with each other that they will be entitled to specifically enforce this agreement on a court of law."
18. Section 14 (c) of Specific Performance Act, 1963 is as follows:
"14. Contracts not specifically enforceable -
....
(c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land : Provided that the following conditions are fulfilled, namely : -
(i) the building or other work is described in the contract in terms sufficiently precise to enable the Court to determine the exact nature of the building or work ;
(ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation of money for non-performance of the contract is not an adequate relief; and
(iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed."
19. The learned Senior counsel appearing for the defendants cited the Judgment of the Hon'ble Supreme Court in Vinoth Seth v. Devinder Bajaj reported in (2010) 8 SCC 1 and contended that a collaboration agreement is not specifically enforceable. In the above Judgment, it is held in paragraph 15 as follows :
"The alleged agreement being vague and incomplete, required consensus, decisions or further agreement on several minute details. It would also involve performance of a continuous duty by the appellant which the court will not be able to surprise. The performance of the obligations of a developer / builder under a collaboration agreement cannot be compared to the statutory liability of a landlord to reconstruct and deliver a shop premises to a tenant under a rent control legislation, which is enforceable under the statutory provisions of the special law. A collaboration agreement of the nature alleged by the appellant is not one that could be specifically enforced. Further, as the appellant has not made an alternative prayer for compensation for breach, there is also a bar in regard to award of any compensation under Section 21 of the Specific Relief Act."
20. The Hon'ble Supreme Court in the above Judgment held that the alleged agreement is vague and incomplete and requires further agreement on several minute details and further obligations under contract cannot be barred to the statutory liability. On those grounds the agreement in that case was held not enforceable.
21. The learned counsel appearing for the plaintiff cited the Full Bench Judgment of the Calcutta High Court in Ashok Kumar Jaiswal v. Ashim Kumar Kar reported in (2014) 4 CTC 369 and contended that the suit at the instance of the owner as well as the developer is maintainable if the developer is able to establish the requirement of law, viz., Section 14(3) (c) of the Specific Relief Act. In the said Judgment, it has been held as follows :
"52. The key to understanding what is intended by Section 14(3)(c) of the 1963 Act is in sub-clause (iii) thereof. It may be more profitable to attempt to comprehend such provision by reading it bottom-up rather than by arriving at the last sub-clause from the beginning of the section. Simply put, Section 14(3)(c) of the 1963 Act provides that a suit for specific performance of a contract may be allowed by a court if the contract is for the construction of any building or the execution of any other work on land subject to all three conditions under (i), (ii) and (iii) of the clause being fulfilled. Thus, if sub-clause (iii) is not fulfilled, the clause itself is not complied with and specific performance of the contract may not be granted. But sub-clause (iii) requires the defendant to the suit to have obtained possession, in pursuance of the contract, of the whole or any part of the land on which the building is to be constructed or other work executed. The operative expressions in the sub-clause are "in pursuance of the contract" and "obtained possession". That would imply that the possession must not be in usual course as would ordinarily be of an owner; but that the possession has been obtained not by virtue of the defendant being naturally entitled thereto but only in pursuance of the contract of which specific performance is sought. Far from the word "defendant" mistakenly appearing in the sub-clause - there have been some murmurs to such effect in course of the submission of the developers herein - the deliberate reference to the defendant in such provision indicates the nature of the suit and the status of the claimant in the suit. And, this discussion has to be perceived in the backdrop of the expression "contract for the construction of any building or the execution of any other work on land" that figures in clause (c) and restricts the suit to a contract which is merely for such purpose and for none other. If the nature of the contract does not strictly fall within clause (c), as to whether such contract may be specifically enforced or not has to be assessed on the basis of the law on the subject covered by Chapter II of the 1963 Act, but the grant of its specific performance will not depend on the compliance of the three conditions enumerated in the sub-clauses.
53. Section 14(3)(c) of the 1963 Act permits, subject to compliance with all the conditions therein, the specific performance of a contract at the behest of the owner of the land against the person responsible for the construction. The second sentence in paragraph 11 of the report in Vipin Bhimani considers only a facet of the provision, in the context of a Development Agreement. The provision permits the owner of the land to seek specific performance of the agreement for construction of a building simpliciter and is an exception to the general rule that an agreement of such nature may not be specifically enforced. To repeat, a Development Agreement of the kind that is considered in this judgment is not an agreement simpliciter for the construction of any building or for the execution of any work on any land; it is much more than that in it also being an agreement for sale of a part of the land to the developer.
54. The specific performance of a contract is its actual execution according to its stipulation and terms; and is contrasted with damages or compensation for the non-execution of the contract. In either case the obligation of the party in breach is recognised, but the manner of enforcing the obligation is different (Fry on Specific Performance of Contracts). The actual execution of a contract is enforced under the equitable jurisdiction vested in the court and as recognised by law. In every contract there is an obligation on each of the contracting parties towards the others to perform such of the terms of the contract as he has undertaken to perform. If the person on whom such obligation rests fails to discharge it, there results in morality to the other party a right at his election either to insist on the actual performance of the contract or to obtain satisfaction for the non-performance of it (Austin's Jurisprudence). Sir Edmund Fry in his venerable treatise recounts that Roman law gave a title to damages as the sole right resulting from default in performance and that in like manner the common law of England made no attempt to actually enforce the performance of contracts, but gave to the injured party only the right to satisfaction for non-performance. Fry quotes Sir Henry Maine to suggest that the jurisprudence on specific performance of contracts developed due to the increase of commercial activity but, ironically, the same spirit of commerce led to the notion that money, as a universal common measure, was an equivalent of everything and resulted in arresting the growth and application of the principle of specific performance.
55. Though the Specific Relief Act, 1963 defines and amends the law relating to certain kinds of specific reliefs, it appears to be exhaustive in dealing with specific performance of contracts. At any rate, specific performance of a contract cannot be had if the 1963 Act prohibits it. It is against such legal backdrop that it must be assessed whether the natural right of a contracting party to obtain what has been promised to him under the contract is interdicted by the provisions of the statute. In the case of a Development Agreement, the right to seek specific performance of such an agreement is neither expressly nor by necessary implication prohibited by the 1963 Act. As to whether or not specific performance is to be granted and as to whether or not any interlocutory order in aid of the ultimate relief of specific performance may be issued will depend, inter alia, on the nature of the agreement, the conduct of the parties, the surrounding circumstances and other relevant considerations.
56. The first question referred is thus answered that a suit at the instance of a developer (where the developer is the non- owner party to a Development Agreement of the kind that is referred to in this judgment) is not prohibited by Section 14(3)(c) of the Specific Relief Act."
22. As per the Full Bench Judgment of the Calcutta High Court, the suit at the instance of a developer is maintainable. In this case on hand, the developer has filed this suit seeking to enforce the right under the joint venture agreement. The developer has been put in possession of the property as per Clause 19 of the Development Agreement. As already pointed out Clause 18 of the Development Agreement provides right to either party to specifically enforce the agreement on a court of law. It is also pertinent to note that the Development Agreement, Ex.P.9 contains the terms precisely without any ambiguity. Therefore for the aforesaid reasons, this issue is answered in favour of the plaintiff holding that the suit at the instance of the developer is maintainable.
23. Issue No.8 :
There is no dispute that Development Agreement was executed between the parties on 10.09.2003. The third defendant sent a letter, Ex.P.15, dated 15.12.2004 to the plaintiff terminating the contract and the same was confirmed by D1 and D2 by their letter, dated 25.12.2004 vide Ex.P.16 and Ex.P.17. Though the plaintiff filed a suit before the District Munsif Court, Ambattur in O.S.No.30 of 2005 for declaration and permanent injunction, the same was subsequently withdrawn. However, the plaintiff filed the present suit for specific performance of the agreement, dated 10.09.2003 by obtaining leave under Order XIV Rule 8 and Order III Rule 1 of the Original Side Rules r/w Clause 12 of Letters Patent. As already pointed out the applications filed by the defendants to revoke the leave granted and to reject the plaint were dismissed and the same came to a finality without any appeal. The causes of action are distinct and different. In the present suit, comprehensive relief of specific performance of an agreement along with consequential relief of permanent injunction is sought for. But in the previous suit filed before the District Munsif Court, Ambattur, the plaintiff sought for possession pursuant to the agreement entered into between the parties. Therefore, the plaintiff has cause of action for the suit. The issue is answered accordingly.
24. Issue No.4 :
The specific case of the plaintiff is that as per the terms of the agreement construction work is to be commenced by the plaintiff within 30 days from the date of obtaining the approved plan and there was delay in getting approval of the plan, for want of no objection certificate from the Tamil Nadu Housing Board as insisted by the Chennai Metropolitan Development Authority (CMDA). Ex.P.11 is the letter, dated 02.03.2004 issued by the Secretary, CMDA to the third defendant. In this case, it was informed that as per available map, S.Nos.414 and 415 of Mogappair village lies in Tamil Nadu Housing Board acquisition boundary. In the letter issued by the TNHB, Ex.P.12 dated 25.06.2004 addressed to D1 and D2 it was informed that the lands in S.Nos.414 and 415 of Mogappair village was originally notified for acquisition under Section 4(1) of Land Acquisition Act and seemed to have been subsequently withdrawn at the time of draft declaration. In the subsequent letter issued by TNHB marked as Ex.P.13, dated 21.10.2004 addressed to the defendants 1 and 2, it has been clearly informed as follows :
"In continuation of this office letter second cited, I am to inform you that the Lands in Survey Nos.414 and 415 of Mogappair village were originally notified for acquisition under 4(1) of Land Acquisition Act, but subsequently withdrawn at the time of Draft Declaration vide Chennai Metropolitan Development Authority Letter No.LA A1/210/82, dated 10.01.92 and these lands were not proposed further for acquisition for Tamil Nadu Housing Board."
25. The third defendant examined as D1 has also admitted during cross-examination that through Ex.P.13 it was informed that suit properties were originally notified for Housing Board acquisition and then dropped. From the above evidence, it is clear that the suit land was subjected to land acquisition proceedings of the Tamil Nadu Housing Board and subsequently dropped. This issue is answered accordingly.
26. Issue Nos.2 and 5 :
The undisputed facts are that the Development Agreement, dated 10.09.2003 was entered into between the plaintiff and the defendants and a sum of Rs.20,00,000/- was paid to the defendants on various dates as refundable advance by the plaintiff. The relevant terms of the contract for the just decision of the dispute between the parties are :
"3) The Developer shall commence the construction of the building within thirty days of obtaining sanction for the Building Plan and complete the construction within 18 months with a grace period of three months from the date of plan sanction.
5) The owners and developer shall share the constructed area upon the schedule property in the ratio of 44:56 subject to the stipulations in the ensuing clauses.
6) In consideration of the owners surrendering, relinquishing or otherwise transferring at such stages of development as provided herein below, in favour of the developer or his nominees Fifty Six percent undivided interest in the schedule property, the Developer shall make the following payments :
a. a sum of Rs.10,00,000/- (Rupees Ten Lakhs only) as refundable advance to the owners at the time of executing this agreement.
(1) Rs.5,00,000/- (Rupees Five lakhs only) Mr.Ravichandran's account.
(2) Rs.5,00,000/- (Rupees Five lakhs only) Mr.Veeraragavan's account.
b. a sum of Rs.10,00,000/- (Rupees Ten lakhs only) as refundable advance to the owners at the time of commencement of construction after obtaining plan sanction from CMDA.
(1) Rs.5,00,000/- (Rupees Five lakhs only) Mr.Ravichandran's account.
(2) Rs.5,00,000/- (Rupees Five lakhs only) Mr.Veeraragavan's account.
c. The owners Mr.Ravichandran and Mr.Veeraragavan shall refund the aforesaid advances of Rs.20,00,000/- (Rupees Twenty Lakhs only) without interest therefore, at various stages from this date and prior to completion of the entire project / development or the Developer shall recover the same from the sale proceeds of the forty four percent constructed area failing to the share of the owners.
8) The owners and developer expressly agree and covenant with each other that the developer shall entitled to enter into an agreement, negotiate for sale or otherwise deal with or alienate for consideration the 56% of constructed area failing to the Developer's share without any restrictions or hindrances from the owners.
19) The owners have in pursuance of this Development Agreement put the Developers in possession of the Schedule Property."
27. The case of the plaintiff is that the delay in obtaining the plan sanction from CMDA occurred for want of NOC from Tamil Nadu Housing Board and when the plan was about to be approved the defendants terminated the contract. The plaintiff has to commence the construction within 30 days from the date of approval of the plan and construction is to be completed within 18 months with a grace period of 3 months. The plaintiff was always ready and willing to perform his part of contract. The defendants also had discussed with the plaintiff and took additional amount from the plaintiff. The plaintiff was put in possession of the land and a well was dug after clearing the bushes. But all of a sudden, the defendants terminated the contract. The defendants contend that the plaintiff informed that he would get CMDA approval of the plan within 90 days and at any cost within 180 days. Though patta was handed over to the plaintiff on 13.09.2005, he applied for the plan approval only on 29.03.2004. CMDA has never asked to produce any No Objection Certificate from the TNHB. Possession was also not given to the plaintiff and only license to enter into property was given.
28. As per Clause 3 of the Development Agreement, Ex.P.9, developer shall commence the construction of the building within 30 days after obtaining sanction for the building plan and complete the construction within 18 months with a grace period of three months from the date of grant of sanction. As per Clause 19, the developer has been put in possession of the suit property by the owners. The possession with the developer has further been confirmed in Clause 9(f) of the agreement, wherein it is stated that the owners have the privilege to visit the site during the construction work and check for the correct implementation of the construction work.
29. D.W.1 during his cross-examination admits that clause 19 of the agreement does not mention about the license of entry by the developer as alleged by the defendants. Therefore, the contention and pleadings of the defendants contrary to the terms of agreement is not sustainable. The learned Senior counsel appearing for the defendants contended that though time has not been fixed in the contract, D3 in his letter, dated 01.06.2004 extended the time up to 15.07.2004 to start the work and the plaintiff impliedly agreed to the same, as he had not repudiated. But the learned counsel appearing for the plaintiff invited the attention of this Court to Ex.P.14, which came into existence on 21.11.2004. P.W.1 has deposed that after discussion with the defendants, Ex.P.14 was written. Ex.P.14 is in continuation of the Development Agreement, dated 10.09.2003. As per Ex.P.14, the Developer agreed for further advance of Rs.5,00,000/- lakhs and also agreed to arrange a loan of Rs.10,00,000/-. The refundable advance of Rs.20,00,000/- was agreed to be increased to Rs.25,00,000/- and the Developer also paid Rs.5,00,000/- on the date of Ex.P.14. As per the terms of original agreement, out of Rs.20,00,000/- refundable advance, Rs.10,00,000/- is to be paid at the time of commencement of construction. The defendants agreed and took the refundable advance in entirety excepting the enhanced advance well before and on 21.11.2004. Thus the defendants are estopped by their conduct in executing Ex.P.14 on 21.11.2004 from taking advantage of their earlier letter, Ex.D.2, dated 01.06.2004 addressed to the plaintiff fixing the time limit for the commencement of the work.
30. The case of the plaintiff is that the plan approval could not be obtained without delay for want of No Objection Certificate from Tamil Nadu Housing Board. It has already been held for Issue No.4 that the suit land was subjected to land acquisition proceedings for TNHB in the light of Exs.P.11 to P.13. Ex.P.11, wherein it is stated that the suit land lies within the Housing Board acquisition boundary probablises the contention that the MMDA insisted No Objection Certificate from TNHB. In the written statement, defendants pleaded that No Objection Certificates from TNHB were obtained by them and handed over to the plaintiff by them. The first No Objection Certificate Ex.P.12, dated 25.06.2004 not only bears the second defendant's name wrongly but is also vague with wordings "acquisition seemed to have been subsequently withdrawn". Therefore, the contention of the plaintiff that the CMDA insisted for a fresh NOC is also acceptable. The subsequent NOC dated 21.10.2004 is marked as Ex.P.13. In this it has been clearly given that the suit lands were originally notified for acquisition but subsequently withdrawn at the time of draft declaration and they were not proposed further for acquisition for TNHB. After the above letter from the Housing Board, the plaintiff and defendants had discussion and entered into an understanding in continuation of the Development Agreement and the same was also written and signed by the parties which is marked as Ex.P.14. Thus the defendants also accepting the steps taken by the plaintiff took Rs.5,00,000/- towards refundable advance and executed Ex.P.14 within 25 days, after executing Ex.P.14 the Development Agreement was terminated by the defendants. There is no breach on the part of the plaintiff and the defendants alone breached the contract by terminating the contract having known the issuance of No Objection Certificate by the TNHB and executing an understanding agreement in continuation of the Development Agreement. D3 issued letter to the CMDA under Exs.D.9 and D.10 requesting not to approve the plan sanction and for also withdrawal of the application. Accordingly CMDA returned the planning permission unapproved under Ex.D.12, dated 08.02.2005. Admittedly the defendants have taken Rs.20,00,000/- as refundable advance from 2003 to 2004. There is no sign of returning that amount. Therefore the breach of the contract has been committed by the defendants.
31. It is well settled that readiness and willingness is to be determined from entire facts and circumstances. Intention and conduct of the party is relevant and readiness is to be established throughout the relevant point of time. Here in this case, as already pointed out the intention of the plaintiff is to commence the work on obtaining the approved plan and complete the work within 18 months as per the terms of the contract. The plaintiff is a reputed builder as could be seen from Ex.P.1 to Ex.P.7 and Ex.P.27 to Ex.P.34, the agreements entered into between the plaintiff and others varying from 1994 to 2007. The Income-Tax returns have also been filed as Ex.P.35 to Ex.P.37. Statements of Accounts and Bank Statement of Accounts are marked as Ex.P.38 and Ex.P.39. Therefore, this Court concludes that the plaintiff has been ready and willing to perform his part of contract.
32. Another contention of the defendants is that the plaintiff has not approached this Court with clean hands and therefore, he is not entitled to equitable relief under the Specific Performance Act. According to the defendants the plaintiff filed the Deed of Reconstitution before the CMDA for plan approval with the forged signature of D3. The third defendant preferred complaint before the police and the documents were also sent for Forensic Department for comparison of the signature and report and after obtaining report, the police referred the case. D3 sought for reinvestigation and the same was ordered and now the case is under reinvestigation. This Court perused the complaint, forensic report and final report marked as Exs.P.41, 43 and 45. The report of the Forensic Department reveals that it is not possible to offer any reliable opinion regarding the authorship of the disputed signatures. Further as per the letter of the CMDA, dated 08.02.2005 (Ex.D.12), D3 received unapproved planning permission application. The alleged Deed of Reconstitution, Ex.D.7 should have come to the knowledge of the defendants even on 08.02.2005, when un-approved application was returned along with documents. But FIR was registered on 20.05.2005 on the complaint given by D3, which is dated 28.03.2005. After long delay complaint was given by the third defendant.
33. It is pertinent to note that all the plots belonging to defendants 1 and 2 were made to one block to avoid wastage by a Deed of Reconstitution and the same is beneficial to all the parties under the contract. Further, the Deed of Reconstitution is also a notarised document. Therefore under the above circumstances, it cannot be said that the document was forged and submitted along with the application by the plaintiff.
34. The learned Senior counsel appearing for the defendants brought to the notice of this Court that the dates in stamp paper in Ex.P.22 varies and therefore, the alleged agreement in respect to the suit property entered into by the plaintiff with the proposed purchasers are created for the purpose of the suit. This Court perused Ex.P.22. In this there are two stamp papers one bearing No.3999, dated 29.04.04 and second bearing No.3997, dated 29.04.07. Both the stamp papers have been purchased in the name of Himayam Engineers and Builders and the same vendor namely K.Sundar sold both the stamp papers. From cursory perusal of the above two stamp papers, it is clear that by mistake in one stamp paper, the date has been written as 29.04.07 instead of 29.04.04. Therefore, this Court is not inclined to accept the contentions of the defendants that Ex.P.22 to Ex.P.25 are created documents. The receipt of advance amount in cash in the above said forms does not lead to any inference that the documents are fabricated as alleged by the defendants.
35. The learned counsel appearing for the plaintiff cited the Judgment of the Hon'ble Supreme Court, Gobind Ram v. Gian Chand reported in (2000) 7 SCC 548 and contended that specific performance is to be granted to the developer when the vendor attempts to wriggle out of the contract only because of escalation of real estate prices. In the above Judgment, the Hon'ble Supreme Court has held as follows :
"7. It is the settled position of law that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience. As stated in P.V.Joseph's Son Mathew (1987 Supp SCC 340 : AIR 1987 SC 2328), the Court should meticulously consider all facts and circumstances of the case and motive behind the litigation should also be considered.
8. The High Court considering the facts of this case observed as follows :
We are conscious of the fact that the defendant has been in possession of the said quarter for the last several decades and logical consequence of affirming the judgment of the trial court would mean considerable hardship to him, at the same time the conduct of the defendant does not justify any further indulgence by the court. We have no doubt that the defendant has tried to wriggle out of the contract between the parties because of the tremendous escalation in the prices of real estate properties all over the country and in Delhi, in particular in the last few years."
9. In view of the above clear finding of the High Court that the appellant tried to wriggle out of the contract between the parties because of escalation in prices of real estate properties, we hold that the respondent is entitled to get a decree as he has not taken any undue or unfair advantage over the appellant."
36. In this case on hand, the delay in obtaining the plan sanction from CMDA is for want of No Objection Certificate from TNHB. After issuance of No Objection Certificate on 21.10.2004, the plaintiff and defendants also entered into a memorandum of understanding, dated 21.11.2014 in continuation of the original Development Agreement and defendants also got further Rs.5,00,000/-. The application was also returned to rectify certain defects mentioned therein by CMDA as per its letter, Ex.P.40, dated 30.11.2004. On 15.12.2004, the defendants terminated the contract. After issuance of No Objection Certificate from TNHB and receipt of Rs.5,00,000/- towards refundable advance on 21.11.2004, the defendants within a month turned around and terminated the contract. This Court has no doubt that the defendants attempted to wriggle out of the contract due to escalation in the price of real estate properties. Therefore, the plaintiff is entitled to get a decree for specific performance of contract on the basis of Development Agreement, dated 10.09.2003 and also to get a consequential order of permanent injunction. This issues are answered accordingly.
37. Issue Nos.3 and 7 :
Since the main relief of specific performance has been granted, this issue relating to the alternative relief need not be answered.
In the result, the suit is decreed for specific performance of the Development Agreement, dated 10.09.2003 and also for permanent injunction as prayed for. The parties do bear their own costs.
07.09.2017 Speaking order / Non-speaking order Index : Yes tsvn
P.KALAIYARASAN, J
Today, this matter is listed under the caption "For Being Spoken to".
2. For the execution of the Joint Development Agreement, five months time is granted from the date of judgment, i.e., 07.09.2017.
12-12-2017 tsvn P.KALAIYARASAN, J tsvn Pre-Delivery Judgment in C.S.No.460 of 2005 07-09-2017