http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 COMMON JUDGMENT *********** Aggrieved over the concurrent finding of the Courts below, granting a decree for specific performance in part of the contract and also declaring the relief of declaration sought by the plaintiff in O.S.No.68 of 2004, these two Second Appeals are filed.
2. Originally, the suit in O.S.No.68 of 2004 was filed by the plaintiff, who is the appellant herein, to declare the title and recover the possession and also mandatory injunction. The suit in O.S.No.52 of 2005 was filed by the plaintiff, who is the respondent herein, for enforcing the agreement dated 26.04.2003.
3. For the sake of convenience, the parties are referred to herein, as per their ranking before the Trial Court in O.S.No.68 of 2004.
4. The brief facts leading to the filing of the suit in O.S.No. 68 of 2004 are as follows:
By agreement dated 26.04.2003, the plaintiff has agreed to sell the two plots of lands consisting of 13 cents to the 2/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 defendant. As the defendant failed to perform his part of obligation, the contract was terminated by the plaintiff on 11.08.2004. The defendant also forfeited his amount. After receipt of the legal notice, the defendant has issued a reply notice with false allegations. The contention that the defendant has paid Rs. 1,00,000/- as advance to the plaintiff's son is also denied and the readiness and willingness on the part of the plaintiff is also denied. The alleged further payment of Rs.10,000/- is also denied. Hence, the suit to declare the property, recovery of possession and also mandatory injunction.
5. The defendant took a stand that admitting the agreement, it is his contention that though the agreement was entered to complete the sale within two months after agreement, the plaintiff fell ill and was admitted in the hospital. Therefore, as per the instruction of the plaintiff, a sum of Rs.1,00,000/- was paid to his son on 26.07.2003 in the presence of three witnesses and his son has made an endorsement. Despite the above payment, the plaintiff has not come forward to execute the sale. Thereafter, the defendant has also verified the title deeds with one Abdul Samad. Accordingly, the plaintiff has agreed to execute the sale on 3/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 01.01.2004. At that time, the plaintiff has agreed to convey plot No. 27, provided the defendant to pay another sum of Rs.10,000/-. Accordingly, the defendant has paid the said sum of Rs.10,000/-. The defendant also went to the Registrar's Office on 01.01.2004. However, the plaintiff has not come to the Registrar's Office. Again, the defendant contacted Abdul Samad. The plaintiff requested time to execute the deed on 20.01.2004. When the matter stood thus, the plaintiff, immediately, sent a legal notice. It is the contention that in respect of Plot No.27, the entire sale consideration has been paid. The defendant was also put in possession and has spent Rs. 4,50,000/- and constructed a house. The defendant is always ready and willing to perform his part of contract. Hence, he prayed for dismissal of the suit.
6. O.S.No.52 of 2005 was filed by the defendant in O.S.No. 68 of 2004 for enforcement of the contract with similar allegations pleaded in the suit in OS.No.68 of 2004.
7. In the Trial Court, both the suits were tried together and common evidence was recorded. On the side of the plaintiff, P.W.1 was examined and Exs.A.1 to A.5 were marked. On the side of 4/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 the defendant, D.W.1 to D.W.4 were examined and Exs.B.1 to B.10 were marked.
8. Based on the pleadings and evidence, the suit for specific performance was decreed in respect of Plot No.27 and the suit in O.S.No.68 of 2004 was decreed for declaration in respect of Plot No.26, as against which, appeals were also filed. The first Appellate Court has also confirmed the findings of the Trial Court, aggrieved against which, the present appeals came to be filed.
9. While admitting the Second Appeal in S.A.(MD)No.222 of 2014, the following substantial questions of law were framed for consideration:
"(i) Whether the Courts below have committed an error in dismissing the suit of the appellant/plaintiff for declaration of title in respect of Plot No.27, on the simple ground that the respondent has filed a suit for specific performance based on an agreement for sale deed dated 26.04.2003? 5/24
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(ii) Whether the Courts below have committed an error in law in rejecting the contention of the appellant herein/plaintiff that the possession of respondent/defendant in respect of Plot No.27 would be only that of a trespasser and hence the appellant/plaintiff is entitled to recover possession? and
(iii) Whether the Courts below have committed an error in negativing the plea of mandatory injunction for removal of the superstructure put up by the respondent/defendant without the permission of the appellant/plaintiff?"
10. In addition to the above, the following substantial question of law was also framed by this Court on 08.01.2020 for consideration:
"Whether the Court below is right in decreeing the suit for specific performance 6/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 enforcing the part of contract contrary to the provisions of law under
Section 12 of Specific Relief Act, 1963?"
11. Likewise, S.A.(MD)No.223 of 2014 was admitted on the following substantial questions of law:
"(i) Whether the Courts below have committed an error in law in holding that the respondent herein/plaintiff is entitled to the protection under
Section 53-A of the Transfer of Property Act, 1882 when the suit sale agreement does not contain a recital to the effect that possession was delivered in part performance of the agreement?
(ii) Whether the Courts below have committed an error in holding the respondent herein/Plaintiff to be entitled to the protection under
Section 53-A of the Transfer of Property Act, 1882, despite the fact that the neither sale agreement nor any supplementary agreement evidencing the 7/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 delivery of possession in part performance of the agreement has been registered, as both the agreement and supplementary agreement are claimed to have come into existence after the introduction of Sub- Section 1-A of Section 17 of the Registration Act, 1908?
(iii) Whether the Courts below have rendered a perverse finding in upholding the contention of the respondent/plaintiff regarding novation of the original agreement by an agreement restricting the contract for sale to one of the two plots alone?
(iv) Whether the Courts below have committed an error in not properly considering the scope of
Section 16(c) of the Specific Relief Act, 1963 in granting the relief of specific relief in favour of the respondent herein/defendant? and
(v) Whether the discretion exercised by the Courts below in favour of the 8/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 respondent/plaintiff is on sound principles of law?"
12. The learned Senior Counsel appearing for the appellant in both the appeals vehemently contended that under Ex.A.2 agreement dated 26.04.2003, the plaintiff in O.S.No.68 of 2004 has agreed to sell the property for a total sale consideration of Rs.2,60,000/-. The time for completion of the sale is two months. As the defendant has failed to pay the remaining sale consideration, despite several requests made by the plaintiff, Ex.A. 3 legal notice was issued terminating the contract on 11.08.2004. The reply was issued by the defendant with false contentions on 14.08.2004 under Ex.A.4. It is his contention that in the reply, there is no whisper about the alleged construction made by the defendant and handing over the possession in respect of Plot No.27. It is his contention that the endorsement made on Ex.B.1 has not been proved by the defendant. The suit for declaration was filed on 23.09.2004. Whereas, the suit for specific performance was filed by the defendant in O.S.No.68 of 2004 on 21.10.2005, one year after the suit by the plaintiff for declaration, recovery of possession and for mandatory injunction. It is his contention that when the time 9/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 was stipulated in the agreement, the same cannot be ignored altogether. The recitals in the agreement makes the time as an essence of contract. Therefore, it is contended that having filed the suit in the year 2005 and not paid the entire sale consideration, the part of contract cannot be enforceable and enforcing part performance also cannot be valid in the eye of law. Further, the defendant is not entitled to take a shelter under
Section 53-A of the Transfer of Property Act, 1882, also.
13. In support of the above contentions, the learned Senior Counsel relied upon the judgment of the Hon'ble Supreme Court reported in 2017(6) CTC 614 [Jaswinder Kaur v. Gurmeet Singh] and also the judgment of this Court reported in 2017(4) LW 540 [M.Jayaprakash Narayanan v. Santhammal and others].
14. The learned counsel appearing for the respondent, despite his presence, submitted that he has no instructions from the party. In the previous occasion also, the learned counsel reported no instructions. Hence, this Court has no other option except to decide the appeals on merits.
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15. Admittedly, it is not disputed by both sides that Ex.A.2 agreement dated 26.04.2003 came to be executed by the vendor for sale of two plots for total sale consideration of Rs.2,60,000/-. The sale agreement indicates that on the date of agreement, Rs. 10,000/- said to have been paid by the purchaser and it is specifically agreed by the parties that the sale has to be completed within two months from the date of agreement. Whereas, it is the case of the defendant that immediately after the agreement, the plaintiff fell ill. Therefore, at his instruction, the defendant has paid Rs.1,00,000/- to his son under Ex.B.2. Though the plaintiff has disputed payment of Rs.1,00,000/-, both the Courts have clearly found that the plaintiff has not examined his son, despite the specific assertion made by the defendant that the son has made an endorsement and received the amount. Similarly, it is the case of the defendant that another Rs.10,000/- was paid and the plaintiff has extended the period for execution of sale. Therefore, though specific time has been mentioned in the agreement, the same is not an essence of contract.
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16. Further, it is the contention of the defendant before the Court below that the plaintiff has agreed to sell Plot No.27 only at the intervention of the Panchayatdars. Therefore, the defendant was put in possession and constructed a house by spending Rs. 4,50,000/-. Absolutely, there is no evidence on the side of the defendant to prove that there was a Panchayat and he was put in possession. It is the case of the plaintiff that he is residing in Chennai and the defendant, namely the purchaser has trespassed into the property and made a construction.
17. The contention of the defendant that on 01.01.2004 he has paid another Rs.10,000 to the plaintiff is also not proved. He has not examined any witness in this regard. Though he has pleaded in the reply notice that the amount has been paid in the presence of one Mujahideen Sahul Hameed, Ameerkhan and Abdul Samad, none of the witnesses were examined to prove the above contention.
18. It is also relevant to note that the plaintiff has sent legal notice under Ex.A.3 terminating the contract on 11.08.2004, 12/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 which was replied by the defendant under Ex.A.4 on 14.08.2004. In the above reply, it is contended by the defendant that the plaintiff has agreed to execute the sale deed on 20.01.2004 in respect of Plot No.27. In Ex.A.4, there is no whisper whatsoever made with regard to handing over the possession and construction of the house. It is relevant to note that Ex.A.4 was sent on 14.08.2004. The suit for declaration was filed by the vendor for recovery of possession on 23.09.2004 itself. Even after the legal notice sent by the plaintiff terminating the contract, the purchaser, namely the defendant in O.S.No.68 of 2004 filed the suit in O.S.No.52 of 2005 on 21.10.2005 much after one year. Therefore, even the contention of the defendant is that the plaintiff has agreed to execute the sale deed on 20.01.2004, the fact remains that the plaintiff has exhibited his intention to terminate the contract itself on 11.08.2004 itself and filed the suit in the year 2004 itself. But the purchaser, the plaintiff in O.S.No.52 of 2005 has filed the suit only on 21.10.2005 after one year two months from the legal notice Ex.A.3. This fact clearly indicates that the defendant is not ready and willing to perform the part of contract. Though the Courts below have held that the suit has been filed within a period of three years from the date of agreement and maintainable, this Court is of 13/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 the view that having entered into an agreement to purchase the property, the purchaser should exhibit readiness and willingness from the inception of the contract. Even assuming that a sum of Rs. 1,20,000/- said to have been paid by the defendant in respect of the contract, it is to be noted that the agreed amount for the sale of two plots is Rs.2,60,000/-. The remaining sale consideration has not been paid by the plaintiff in O.S.No.52 of 2005.
19. Though it is the contention of the defendant that the plaintiff has agreed to sell only Plot No.27 and he was put in possession as part performance of the contract, it is to be noted that to invoke the doctrine of part performance, the contract should have been registered, otherwise, the plea of part performance is not available, in view of the amendment in the Registration Act by Act 48 of 2001. When the sale agreement exhibited after 2001, after amendment, one seeks to protect the possession as part performance, the sine qua non is the registered agreement.
20. But, here, the agreement is only an unregistered document. Further, in the agreement also, there is no whisper about the handing over possession. Further, the documents 14/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 containing contracts to transfer for consideration, any immovable property for the purpose of
Section 53-A of the Transfer of Property Act, 1882, shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001. If the documents are not registered, those documents shall have no effect for the purpose of
Section 53- A of the Transfer of Property Act, 1882, to claim part performance. Section 17(1-A) of the Registration Act, 1908, is amended by Act 48 of 2001. Therefore, in the absence of any evidence to show that Plot No.27 was put in possession of the purchaser, merely because he is in possession of the property, protection under
Section 53-A of the Transfer of Property Act, 1882, will not be available to the purchaser.
21. It is relevant to note that it is the contention of the defendant that much prior to 20.01.2004, there was oral agreement, wherein, the plaintiff has agreed to sell only Plot No. 27, pursuant to which, he was put in possession and, subsequently, constructed a house. It is relevant to note that the legal notice Ex.A.3 was issued on 11.08.2004 and the reply was issued by the defendant on 14.08.2004. In the reply, there is no whisper about 15/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 the possession nor construction of the house in Plot No.27. Only during trial, the plea as to possession and construction of the house has been pleaded. If really the construction was available, there is no reason as to why the same is not mentioned in Ex.A.4 reply by the defendant. This fact clearly shows that the plaintiff, as rightly stated by the learned Senior Counsel, is absentee landlord and the defendant has forcibly entered the possession and put up the construction. Merely because the construction was put up by the defendant, the same will not entitle him to seek a specific performance of part of the contract. It is to be noted that the suit has been filed for enforcement of the entire contract in respect of two plots. The Courts below have granted specific performance in respect of the part of contract relating to Plot No.27 and dismissed the suit in respect of Plot No.26. The defendant has not filed any appeal as against the refusal of the specific performance in respect of Plot No.26. The Trial Court and the first Appellate Court, merely on the basis of the construction of the house as pleaded, granted specific performance enforcing the part of contract, though the suit has been filed for enforcement of the entire contract. 16/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014
22. It is relevant to note that
Section 12 of the Specific Relief Act, 1963, deals with enforcement of the part of contract, which is extracted hereunder:
provided in this section, the court shall not direct the specific performance of a part of a contract.
(2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value and admits of compensation in money, the court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.
(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either -
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(a) forms a considerable part of the whole, though admitting of compensation in money; or
(b) does not admit of compensation in money, he is not entitled to obtain a decree for specific performance; but the court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party-
(i) in a case falling under clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and in a case falling under clause (b), pays or has paid the consideration for the whole of the contract without any abatement; and
(ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for 18/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 the deficiency or for the loss or damage sustained by him through the default of the defendant.
(4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part."
23. The above provision makes it very clear that to enforce the part of contract, the Court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if he has paid the agreed consideration for the whole of the contract and also relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant. To enforce the part of contract, the conditions embodied in
Section 12 have to be satisfied.
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24. Furthermore, in 2017(6) CTC 614 [Jaswinder Kaur v. Gurmeet Singh], the Hon'ble Apex Court has held that mere part payment of consideration cannot be construed as fulfilment of requirement of readiness and willingness.
25. In 2017(4) LW 540 [M.Jayaprakash Narayanan v. Santhammal and others], this Court has held that unless the plaintiff relinquishes all his claim to remaining part of contract and all rights to compensation, a part of the contract cannot be enforced.
26. Admittedly, in the case on hand, the agreed consideration for the whole of the contract has not been paid. Only even below the half of the amount has been paid. Therefore, the finding of the Courts below directing enforcement of the contract partly without the mandatory conditions set out in
Section 12 is certainly not sustainable under law. The Courts below have not even considered the delay in filing the suit, even assuming that the contract was extended till 20.01.2004. Even thereafter, readiness and willingness has not been established by the purchaser. Further, 20/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 there is no evidence to show that the remaining sale consideration agreed under Ex.A.2 was available with the defendant in O.S.No.68 of 2004, namely the purchaser. Such being the matter, without satisfying the mandatory requirements under law, a part of contract cannot be enforced. It has been not taken note of by both the Courts below. Furthermore, when the defendant, without any right over the property, took possession of the same, without the contract got crystallized and when there was no right or interest created in the agreement, entered into possession and made such construction, and merely on the basis of such construction, he cannot resist the suit for declaration and cannot seek for enforcement of the whole contract by filing suit and also cannot succeed in protecting the possession under
Section 53-A of the Transfer of Property Act, 1882, besides, he is also not entitled for specific performance of the part of contract. Accordingly the grant of specific performance in respect of part of the contract relating to Plot No.27 is not sustainable in law. Further, the alleged novation of the written contract has not been established.
27. In view of the reasons as stated above, the plaintiff in O.S.No.68 of 2004 is certainly entitled to declaration in respect of Plot No.27 also.
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28. It is stated by the purchaser before the Court below that he has made improvements and put up construction by spending Rs.4,50,000/- in the suit property.
29. The learned Senior Counsel has fairly submitted that if any improvement is made by the defendant, the plaintiff is ready to pay upto Rs.10,00,000/- [Rupees Ten Lakhs only] for such improvements.
30. This Court, having regard to the above admitted facts, is of the view that when the defendant himself has pleaded that he has spent Rs.4,50,000/- in the year 2004 and put up a construction and the plaintiff is also not objected such construction at the earliest point of time and allowed the construction to be raised, the act of the plaintiff clearly amounts to acquiescence. In such view of the matter, any improvement made by the defendant is certainly to be compensated, in view of the acquiescence of the plaintiff. In such view of the matter, taking into account the rise in prices and as per the defendant's case, he has spent Rs.4,50,000/- in the year 2004, this Court directs the appellant herein to pay a sum of Rs. 22/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 12,00,000/- [Rupees Twelve Lakhs only] to the respondent. The amount shall be paid, within a period of six months from the date of receipt of a copy of this common judgment. On payment of such amount, the appellant is certainly entitled to recover the possession. The respondent shall vacate and hand over the possession of Plot No.27 including the construction. Accordingly, all the substantial questions of law are answered.
31. In fine, both the appeals are allowed. However, the mandatory injunction is not granted, instead, on payment of Rs. 12,00,000/- [Rupees Twelve Lakhs only], the recovery of possession is ordered. No costs. Consequently, the connected miscellaneous petitions are closed.
25.02.2020 Index : Yes/No Internet : Yes/No SML To 1.The Principal Sessions Judge, Ramanathapuram. 23/24 http://www.judis.nic.in S.A.(MD)Nos.222 and 223 of 2014 N.SATHISH KUMAR, J SML 2.The Subordinate Judge, Ramanathapuram. 3.The Record Keeper, V.R.Section, Madurai Bench of Madras High Court, Madurai. Common Judgment made in S.A.(MD)Nos.222 and 223 of 2014 Delivered on: 25.02.2020 24/24 http://www.judis.nic.in