(Prayer: Appeal filed under Section 96 of the Civil Procedure Code, to set aside the judgment and decree dated 30.10.2017 made in O.S.No.186 of 2010 on the file of the Additional District and Sessions Judge, Chengalpattu.)
1. The appeal suit is directed against the judgment and decree dated 30.10.2017 passed in O.S.No.186 of 2010.
2. The plaintiff is the appellant in the appeal suit. The plaintiff is M/s.DTF Financial Services(P) Ltd., having its registered office at No.2, Gee Gee Minar, 23, College Road, Chennai – 600 006.
3. The facts in nutshell as narrated in the plaint are that the suit mentioned property belongs to the defendant. An agreement of sale was entered into between the plaintiff and the defendant on 28.04.2009, which was registered as Document No.1342/2009 in the office of the Sub-Registrar, Padappai. Title deeds in respect of the suit mentioned property was handed over to the plaintiff company. The total sale consideration agreed was Rs.11,00,000/-(Rupees Eleven Lakhs only) and a sum of Rs.4,00,000/- (Rupees Four Lakhs only) was paid by way of an advance amount to the defendant and the said advance amount was acknowledged by the defendant.
4. The contention of the plaintiff was that they were always ready and willing to pay the balance amount of sale consideration and for execution of sale deed pursuant to the suit sale agreement dated 28.04.2009. In spite of the demand made in this regard by the plaintiff, the defendant had provided an evasive reply and not executed sale agreement and not fulfil his portion of the contract and thereby committed breach, which resulted institution of suit for specific performance.
5. The defendant denied the contentions in the plaint and has stated that the agreement was not intended for any sale and the value of the property even at the time of agreement was no way comparable to the sale consideration fixed in the sale agreement and in fact, the agreement was signed by way of security in lieu of the loan borrowed by the defendant from the plaintiff company. The oral agreement of the year 2008 with the plaintiff was also denied by the defendant. The defendant, in paragraph 8 of the written statement is also reiterated that the sale agreement had been executed only as security for the loan and it was never indented to be enforced against the defendant regarding the execution of sale of the suit mentioned property. In the event of such enforcement, the defendant would be put to irreparable loss and hardship and the same would result in unjust enrichment to the plaintiff since the value of the property during the relevant point of time was enormous and no way comparable with the sale consideration fixed in the suit sale agreement.
6. The trial Court framed the issues as to the genuinity of the suit sale agreement dated 28.04.2009, Whether the defendant has intended to sell the suit schedule property to the plaintiff or not; Whether the plaintiff is entitled for the alternate relief of refund of advance with interest.
7. The trial Court considered the nature of the agreement as well as the other documents and the evidences. The suit sale agreement dated 28.04.2009 stipulates that the vendor offered to sell schedule mentioned property for a total sale consideration of Rs.11,00,000/-(Rupees Eleven Lakhs only).
8. It is pertinent to note that at the time of signing the suit sale agreement, the Vendor has requested to pay advance towards the sale consideration as under:
(i) A sum of Rs.4,00,000/-(Rupees Four Lakhs only) in the name of Vendor's proprietory concern “India Direct” by way of Cheque a sum of Rs.4,00,000/-(Rupees Four Lakhs only) paid on 4th June, 2008 drawn on Central Bank of India, Haddows Road Branch, Chennai – 600 006.
(ii) A sum of Rs.3,00,000/-(Rupees Three Lakhs only) due by the vendor, to be paid to E.Krishnamurthy, towards of cancellation of sale agreement to whom the sale agreement was registered previously, vide document No.2631, Volume No.1, pages 9 and registered on 19-05-2006, registered with Registration sub-district of Tambaram and Registration sub-district of South Madras.
(iii) A sum of Rs.4,00,000/-(Rupees Four Lakhs only) due by the vendor's proprietory concern “India Direct” to PEE DEE FINANCIAL SERVICES LIMITED, who had made the payment vide their Cheque No.528501 dated 13-06-2008 drawn on Central Bank of India, Haddows Road, Chennai – 600 006 to whom the vendor owes Rs.4,00,000/-(Rupees Four Lakhs only).
(iv) Since the vendor owes money to the above people, the party of the second part has agreed to pay all the creditors as mentioned in Clause ii and Clause iii above.”
9. Perusal of the above request made by the Vendor, the purchaser also agreed for the same. The suit sale agreement further reveals that the purchaser paid a sum of Rs.4,00,000/-(Rupees Four Lakhs only) as Earnest Money. The balance sale consideration of Rs.7,00,000/-(Rupees Seven Lakhs only) was agreed to be paid within a period of three months to the creditors and the said payment will be binding on the Vendor on obtaining valid receipts from the creditors. Looking into these two portions of the suit sale agreement, a factual inference is to be drawn by this Court. The request made by the Vendor at the time of signing of the suit sale agreement was that Rs.4,00,000/-(Rupees Four Lakhs only) is to be paid in favour of the Vendor's proprietory concern “India Direct”. A sum of Rs.3,00,000/-(Rupees Three lakhs only) due by the vendor, to be paid to Mr.E.Krishnamurthy, towards of cancellation of sale agreement to whom the sale agreement was registered previously. A sum of Rs.4,00,000/-(Rupees Four Lakhs only) due to the vendor's proprietary concern “India Direct” to PEE DEE FINANCIAL SERVICES LIMITED.
10. Accordingly, the mode of payment to be made by the purchaser in favour of the vendor seems to be unusual. In a normal sale agreement, the seller would agree for payment of advance and the balance is to be paid within the time limit agreed between the parties. However, an inference is to be drawn in respect of the suit sale agreement as in order to clear other dues, the Vendor also made a request. In this context, the trial Court also adjudicated the documents as well as evidences, the trial Court categorically considered the evidences by stating that the sale agreement was signed as a security and there was no intention on the part of the defendant to sell the suit schedule property in favour of the plaintiff. It is relevant to extract the findings of the trial Court in this regard and the same is as follows:
11. However, the trial Court arrived a conclusion that the plaintiff is entitled for the alternate relief of refund of advance amount with interest.
12. The learned counsel for the appellant made a submission that the interest even granted by the trial Court is lesser and the same requires enhancement. With reference to the grounds raised by the appellants, this Court is of the considered opinion that perusal of the sale agreement, which is enclosed in the typed set of papers in the appeal suit as well as the findings of the trial Court reveals that sale agreement was executed by the defendant by way of security and it was not intended to execute the suit property. When there is an ambiguity in respect of suit sale agreement, the Courts would not grant the relief of specific performance. However, the plaintiff would be entitled for the alternate relief of refund of advance amount with interest.
13. Even in case, where the sale agreement is not valuable, then also, the Courts can decline the relief of specific performance. If the facts and circumstances reveals that it would be inequitable, if such a relief is granted. In the present case, the value of the suit property is undoubtedly enormous and Mudichur, Near Tambaram falls outside the city of Chennai and the Real estate value in that locality has been enhanced considerably. Thus, the sale consideration of Rs.11,00,000/-(Rupees Eleven Lakhs only) fixed for the suit property, which is about two grounds, is not only acceptable and in the event of granting the relief of specific performance, the same would cause prejudice to the interest of the defendant and it would be inequitable.
14. In this regard, this Court would like to cite judgment of the Hon'ble Supreme Court of India in the case of Surinder Kaur v. Bahadur Singh, reported in 2019 (8) SCC 575 and the relevant paragraph 14 is extracted hereunder:
“14. A perusal of Section 20 of the Specific Relief Act clearly indicates that the relief of specific performance is discretionary. Merely because the plaintiff is legally right, the court is not bound to grant him the relief. True it is, that the court while exercising its discretionary power is bound to exercise the same on established judicial principles and in a reasonable manner. Obviously, the discretion cannot be exercised in an arbitrary or whimsical manner. Sub-clause (c) of sub-section (2) of Section 20 provides that even if the contract is otherwise not voidable but the circumstances make it inequitable to enforce specific performance, the court can refuse to grant such discretionary relief. Explanation (2) to the section provides that the hardship has to be considered at the time of the contract, unless the hardship is brought in by the action of the plaintiff.”
15. Considering the facts and circumstances as well as the findings of the t
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rial Court, this Court has no hesitation in arriving a conclusion that there is no perversity or infirmity as such in the judgment and decree passed by the trial Court. 16. However, the rate of interest granted is lesser and this Court is inclined to enhance the rate of interest from 6% to 9%. Thus, the trial Court judgment and decree is modified as under: (i) The judgment and decree dated 30.10.2017 in O.S.No.186 of 2010 with reference to the rejection of the relief of specific performance stands confirmed. (ii) In respect of alternate relief granted, the rate of interest of 6% granted by the trial Court is enhanced to 9% and the respondent / defendant is directed to refund the advance amount of Rs.4,00,000/-(Rupees Four Lakhs only) along with the interest at the rate of 9% per annum from the date of filing of plaint till the date of realisation. 17. With this modification, the appeal suit in A.S.No.567 of 2019 stands partly-allowed. No costs. Consequently, connected miscellaneous petition is closed.