OSA/123/2018 of N. MURUGESA PANDIAN Vs PREMAVATHY(DECEASED) on 30 September 2026

JUDGMENT

P.Velmurugan J. Aggrieved by the judgment and decree dated 28.03.2017 passed by the learned single Judge in C.S.No.994 of 2001, the present original side appeal has been filed.

2. The appellants are the plaintiffs and the respondents are the defendants in the suit. The appellants laid the suit seeking for a judgment and decree, directing the respondents to execute and register the sale deed in respect of the schedule properties by specific performance of the sale agreement dated 10.05.1997 between appellants and respondents, failing which the Court may direct the officer of the Court to execute the sale deed and put the appellants in peaceful possession and enjoyment of the suit properties or in the alternative direct the respondents to refund the sum of Rs.13.00 lakhs together with interest at 18% from 19.10.1997 till realization and for costs.

3. The case of the appellants is that they entered into an agreement of sale with the respondents on 10.05.1997 in respect of plaint 'A' and 'B' schedule properties for a total value of Rs.49 lakhs and on the same day, the appellants had paid an advance of Rs.9 lakhs. Thereafter, they paid a further sum of Rs.3 lakhs on 10.09.1997 and a sum of Rs.1 lakh on 19.10.1997. Since the appellants were already tenants in respect of the properties at Door Nos.60 & 61 respectively, they paid the rents as and when they became due and after finalisation of the agreement, they were not asked to pay further rents in lieu of interest on advance. As per the conditions of the agreement, the respondents did not produce encumbrance certificate for the properties and also did not vacate the tenants from the premises. Though the appellants requested the respondents to comply with the conditions of the sale agreement and to execute the sale deed, the respondents failed and neglected to honour the same. Therefore, the appellants issued a legal notice dated 10.12.1998, for which the respondents sent a reply dated 04.01.1999 admitting the execution of the agreement of sale and also the receipt of advances, but stating that they appropriated a sum of Rs.1 lakh towards liquidated damages without giving any notice regarding the appropriation of the sum nor returned the balance advance amount. When the appellants came to know that the respondents are making arrangements to sell the plaint schedule properties to third parties for a higher price, in order to protect their rights, the appellants first filed a suit for permanent injunction. The defendants also filed Rent Control Proceedings for eviction of the appellants. The appellants state that one C.S.Subramanian stood as Mediator, but nothing came fruitful. Since the appellants are always ready and willing to perform their part of the contract, they filed the above comprehensive suit.

4. The respondents filed their written statement stating that they are the owners of the plaint schedule properties situated at Door Nos.60 and 61, Reddy Street, Villivakkam, Chennai and that the appellants entered into an agreement of sale with them on 10.05.1997 in respect of plaint 'A' and 'B' schedule properties for a sale consideration of Rs.49 lakhs. The respondents had agreed to this sale because of two prime reasons (i) that the appellants being tenants of the property demanded pagadi to vacate and (ii) for the marriage and educational expenses of the concerned respondents' daughters. When notice was issued in November, 1996 to the first plaintiff and one Deivanai, proprietor Bharath Medicals terminating the tenancy, as they defaulted in payment of rent from July 1996, only to defend the above proceedings, R.C.O.P.No.329 of 1997 and 330 of 1997 were filed by the tenants and in the said proceedings, the first plaintiff gave an undertaking in July 1997 that he would pay the arrears of 8 months rent and also future rents regularly. The respondents agree that the appellants paid a sum of Rs.9 lakhs and further sum of Rs.3 lakhs and finally Rs.1 lakh. The respondents entered into sale agreement with the appellants only because they were in need of money to perform the marriage of Mythili and Bhuvaneswari. As far as the first defendant is concerned, he wanted to alienate so as to facilitate the educational expenses of his daughter Sudha. C.S.Subramanian never stood as Mediator and he is none other than the co- brother of the first appellant. Prior to the sale agreement dated 10.05.1997, original title deeds and encumbrance certificates from the year 1963 to 1995 were inspected by the parties and their lawyer. The appellants had scrutinized the original document and even otherwise, nothing prevented the appellants from further inspection of any deed available in the Madras City Co-operative Housing Society. Therefore, the question of handing over all the title deeds will not arise when the appellants had failed to pay the sale price. The conduct of the appellants can be judged by the undertaking given by the first appellant in Court of Small Causes for payment of rent along with arrears and the same was not complied with till date. The appellants never exhibited their readiness or willingness to get the sale completed. Both the appellants agreed for the execution of the sale deed within a period of 18 months from 10.05.1997. But the appellants failed to pay the amount within the stipulated time. The appellants did not have the wherewithal to pay these amounts. In fact they have not paid the rents from July 1996. It is totally false to allege that the appellants have not been asked to pay rents. The respondents approached the appellants on several occasions to complete the sale agreement, but all their efforts were in vain. The suit for specific performance is not maintainable and it is barred under Order 2 Rule 2 of the Code of Civil Procedure. The suit is also barred under the provisions of Limitation Act. The appellants are not entitled to any relief, much less the highly equitable relief of specific performance. The appellants have no money to purchase the property and they are using the litigation to gain time. The appellants were never ready and willing to perform their part of the contract and therefore, the suit is liable to be dismissed.

5. Upon consideration of the pleadings, the following issues were framed for consideration:-

(1) Whether the plaintiffs were ready and willing to complete the sale transaction?

(2) Whether the plaintiffs were capable of completing the sale transaction?

(3) Whether the suit is barred by provisions of Order II Rule 2 of CPC?

(4) Are the plaintiffs entitled to the alternate relief of recovery of Rs.13 lakhs with interest at 18% per annum?

(5) To what reliefs the plaintiffs are entitled to?

6. In order to establish their case, on the side of the appellants, one witness was examined and 27 exhibits were marked. On the side of the respondents, two witnesses were examined and 47 exhibits were marked.

7. The learned single Judge, after hearing both sides and considering the documentary evidence, allowed the suit in part by granting the alternative relief of entitling the appellants to get a sum of Rs.12 lakhs from the respondents with interest at 9% per annum from the date of plaint till the date of realisation. Aggrieved by the refusal of the prayer for specific performance of the sale agreement dated 10.05.1997, the present appeal has been filed before this Court.

8. The learned counsel appearing on behalf of the appellants would submit that the prayer for specific performance has been erroneously rejected without considering the evidence adduced on the side of the appellants insofar as it relates to their readiness and willingness in performing their obligations under the agreement. Even the veracity of Ex.D10 is very much doubtful, as the appellants have not received the title documents as stated in Ex.D10 and the respondents might have forged the same using the signed papers of the appellants. So far as the mortgage deed under Ex.D18 executed by the first defendant in favour of Madras City Cooperative Housing Society is concerned, he would submit that the said mortgage was created on 06.03.1995 and the same was cancelled on 05.10.2007. When DW1 has admitted in her evidence that the original documents pertaining to the property under sale was with the

Cooperative Society, Ex.D10 produced by the respondents is a bogus document created only for the purpose of the case. Though the respondents allege that the suit property was agreed to be sold for performing the marriages of Ms.Bhunaveswari and Ms.Mythili, the daughters of the second and third defendants and the marriages are said to have taken place on 19.08.1998 and 22.11.1998 respectively, without any iota of proof produced by the respondents as to the expenses incurred or the borrowings made, the finding in this regard is totally perverse, as the marriages could have been performed with the advance money lying in their hands. The respondents have no locus standi to deduct Rs.1 lakh as liquidated damages, since the respondents only have neglected the agreement and committed the errors by showing their unwillingness to sell the property. When the first appellant has filed Exs.P1 to P16 as to the income details and also the sale deeds registered in the name of his wife in Exs.P23 to P27 while purchasing the other properties to show his means, the finding that the appellants are not having sufficient means to purchase the suit property is unsustainable. However, the appellants have deposited the balance sale consideration and the same is still lying to the credit of the civil suit. Therefore, the impugned judgment and decree declining the prayer for specific performance of the sale agreement in favour of the appellants are liable to be set aside. The learned counsel also relied upon the following judgments in support of his contentions:

a. Sughar Singh v. Hari Singh (Dead) through Legal Representatives and others, (2021) 17 SCC 705

b. Katta Sujatha Reddy and another v. Siddamsetty Infra Projects Private Limited & others, (2023) 1 SCC 355

c. Parswanath Saha v. Bandhana Modak (Das) and another, 2024 SCC OnLine SC 3834

9. The learned Senior Counsel appearing on behalf of the respondents would submit that though the appellants initially filed a suit for bare injunction restraining the respondents from alienating or encumbering the suit schedule property to any third party in O.S.No.2085 of 1999 on the file of the learned Assistant Judge, City Civil Court, Chennai and obtained an order of interim injunction, the said order was set aside in appeal. Thereafter, the said suit was transferred to this Court and re-numbered as Tr.C.S.No.577 of 2012. However, after a delay of nearly 2 ½ years, the subsequent suit for specific performance in C.S.No.994 of 2001 came to be filed, which has been rejected by the impugned judgment and decree, on a joint trial of both the suits and only against the rejection of the prayer for specific performance, the present appeal has been filed. Elaborating further on the conduct of the appellants, the learned Senior Counsel has contended that the appellants were never willing to perform their part of the contract and they made the respondents to wait indefinitely in order to knock off the property at a lesser rate. The appellants were also irregular in paying the rents from the year 1996 leading to the initiation of rent control proceedings by the respondents, which also shows that the appellants have no money to purchase the property and only using the litigation as a ruse to gain time. When the law is well settled that time is the essence of the contract and the appellants were never ready and willing to perform their part of the contract, the learned single Judge, based on the oral and documentary evidence, has rightly rejected the relief of specific performance and hence the impugned judgment and decree require no interference.

10. We have considered the rival contentions and perused the materials available on record.

11. The specific case of the appellants is that after entering into the agreement of sale with the respondents on 10.05.1997 in respect of plaint ‘A’ and ‘B’ schedule properties for a total consideration of Rs.49 lakhs, the appellants made the payment of Rs.13 lakhs on various dates including the advance money and were ever ready and willing to perform their part of the contract. However, the respondents have not only neglected the execution of the sale agreement, but also appropriated a sum of Rs.1 lakh towards liquidated damages without giving any notice regarding the said appropriation nor returned the monies paid by the appellants. Therefore, the appellants, though initially filed a suit for bare injunction facing the threat of eviction, has subsequently filed the suit for specific performance expressing their readiness and willingness to perform their part of the contract and also deposited the balance sale consideration to the credit of the suit to show their bona fides. Hence, the judgment and decree refusing the relief of specific performance are liable to be set aside.

12. The specific case of the respondents is that they agreed to sell the plaint schedule properties to the appellants for a sale consideration of Rs.49 lakhs under the agreement dated 10.05.1997 only to meet out the marriage and educational expenses of the daughters of the respondents’ concerned, namely, Mythili, Bhuvaneswari, Sudha respectively, as the appellants/tenants demanded pagadi to vacate and also received the sum of Rs.13 lakhs from the appellants on various dates. But the appellants never exhibited their readiness or willingness to get the sale completed within a period of 18 months as stipulated under the agreement dated 10.05.1997. Considering the conduct of the appellants that they agreed to even pay the rental arrears only after initiation of the rent control proceedings by the respondents, the relief of specific performance has been rightly rejected and therefore, the impugned judgment and decree require no interference.

13. The point for consideration in this appeal is as to whether the appellants have proved their readiness and willingness to perform their part of the contract and whether the impugned judgment and decree are liable to be interfered with?

14. A reading of the entire pleadings and the oral and documentary evidence would show that the agreement entered into between the appellants and the respondents dated 10.05.1997 towards sale of the plaint schedule properties for a consideration of Rs.49 lakhs and the receipt of a sum of Rs.13 lakhs by the respondents in furtherance of the agreement is admitted. Equally the time of 18 months from 10.05.1997 for completion of the sale is also admitted. Though the limitation of three years for filing the suit for specific performance from the date of entering into the agreement of sale is the rule, the appellants can seek the relief of specific performance if they prove and establish through oral and documentary evidence that from the date of the agreement till the date of filing of the suit, they were always ready and willing to perform their part of the contract and that the respondents only failed to perform their part of the contract. Though the appellants contend that the respondents have not produced the encumbrance certificate, the fact remains that even before entering into the agreement, the appellants knew that the original title documents were mortgaged with the cooperative bank and they have also inspected the same. Despite the same, the appellants have pleaded that in terms of the agreement, the respondents have not produced the encumbrance certificate and have not vacated the tenants, when they themselves were in possession of the properties at Door Nos.60 & 61 as tenants and have also defaulted in paying the rents, for which the respondents initiated rent control proceedings. But till the filing of the suit, the appellants did not pay the rents and they agreed to pay it only during the pendency of the rent control proceedings. One of the contentions raised on the side of the respondents is that time is the essence of the contract and the appellants miserably failed to perform their part of the contract. However, in the sale of immovable property, time is not normally presumed to be the essence of the contract unless explicitly stated or clearly implied. Admittedly, under the agreement in question, there is no stipulation that time was the essence of the contract and the entire sale consideration to be paid was only for performing the marriage and educational expenses of the daughters of the respondents’ concerned. But, however, the oral and documentary evidence would show that during the relevant point of time, the respondents’ concerned did not have the money for performing the marriage of daughters, though it is not mentioned in the agreement. The evidence shows that for performing the marriage in the year 1998, the respondents were in need of money. Once the appellants filed the suit for specific performance, it is for the appellants to prove and establish that they were ready and willing to perform their part of the contract within the stipulated time. It is also to be pointed out that after receiving the notice, simply the appellants initially filed the suit for bare injunction on 15.02.1999 and thereafter, after a long delay of 2 ½ years i.e., on 11.06.2001, they filed the suit for specific performance. In the meanwhile, rent control proceedings were also initiated by the respondents for recovering the rental arrears. Therefore, the conduct of the appellants clearly shows that they were not ready and willing to perform their part of the contract. Equally the judgments relied upon by the appellants are distinguishable to the facts and circumstances of the present case. Even though the suit for bare injunction was dismissed, the appellants have not filed any appeal against the said judgment and the present appeal is only against the rejection of the relief of specific performance.

15. In the light of the above, the learned single Judge, considering the facts and circumstances as well the oral and documentary evidence and also the conduct of the appellants, having found that the appellants have not proved the factum of readiness and willingness and the foundational fact of performing their part of the contract, has disallowed the main relief of specific performance and granted the alternative relief of refund of a sum of Rs.12 lakhs, out of Rs.13 lakhs, after deducting a sum of Rs.1 lakh towards liquidated damages for the breach committed by the appellants as per the agreement, with interest at the rate of 9% per annum from the date of plaint till the date of realisation.

16. However, so far as the liquidated damages is concerned, we find that pursuant to the legal notice dated 10.12.1998 issued by the appellants, the respondents vide their reply dated 04.01.1999, after admitting the receipt of Rs.13 lakhs from the appellants, sought to appropriate a sum of Rs.1 lakh towards liquidated damages, that too, without giving any prior notice regarding the appropriation nor repaid the entire sum of Rs.13 lakhs to the appellants when they were not ready and willing to sell the properties to the appellants. Since the respondents chose to retain the entire money of Rs.13 lakhs, this Court is of the considered opinion that they have also not performed their part of the contract and hence not entitled to the sum of Rs.1 lakh towards liquidated damages and to this extent, the impugned judgment and decree stands modified entitling the appellants to receive a sum of Rs.13 lakhs with interest at the rate of 9% per annum from the date of plaint till the date of realisation. Moreover, the respondents have also not chosen to challenge the impugned judgment and decree. This Court exercising appellate jurisdiction, while appreciating both the oral and documentary evidence, does not find any ground or reason to interfere with the impugned judgment and decree in other respects, as the appellants have not proved their readiness and willingness to perform their part of the contract under the agreement. Accordingly, the original side appeal fails and it is dismissed. Considering the facts and circumstances, there shall be no order as to costs. Needless to state that the appellants are entitled to withdraw the balance sale consideration, if any, lying to the credit of the suit. (P.VELMURUGAN J.) (GK.MUTHUKUMAAR J.) 30-09-2026

Index:Yes/No Speaking/Non-speaking order Internet:Yes Neutral Citation:Yes/No ss To

1. The Sub Assistant Registrar (O.S.) High Court, Madras

P.VELMURUGAN, J. AND GK.MUTHUKUMAAR, J. ss Judgment in OSA No.

30-09-2026