Civil Appeal Nos………..of 2019 @ SLP(C) Nos.23648-23649 of 2015 Venkitalakshmi   vs.  K. Raju and others.

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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.6258-6259 OF      2019 (Arising out of Special Leave Petition (Civil)Nos.23648-23649 of 2015)

VENKITALAKSHMI  …Appellant

Versus

K. RAJU AND ORS. …Respondents

J U D G M E N T

Uday Umesh Lalit, J.

1. Leave granted.

2. These  appeals  arise  out  of  the  final  judgment  and  order  dated

28.03.2014 passed by the High Court of Judicature at Madras in Appeal

Suit Nos. 646 and 647 of 1987.

3. The Appeal Suit Nos.646 and 647 of 1987 arose out of Civil Suits

being, O.S. No. 704 of 1981 and O.S. No. 707 of 1981 on the file of the

Principal  Subordinate  Court,  Coimbatore,  Tamil  Nadu  seeking  specific

performance in respect of agreements dated 16.07.1980 (Exhibit-A5) and

Civil Appeal Nos………..of 2019 @ SLP(C) Nos.23648-23649 of 2015 Venkitalakshmi   vs.  K. Raju and others.

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16.07.1980 (Exhibit-A6)   respectively.   As per Exhibit-A5 the original

Defendants 1 and 2 in O.S. No.704 of 1981 entered into an agreement of

sale with original Plaintiff – Ponnuswamy Nadar, while Exhibit-A6 was

entered into between original Defendants 1 to 5 in O.S. No. 707 of 1981

with original Plaintiff  – Ponnuswamy Nadar.  The rival submissions of the

parties including the case of the Plaintiffs in O.S. No.704 of 1981 was set

out by the High Court in para nos.2 to 4 of its judgment as under:-

“2.    The case of the plaintiffs in O.S.No.704 of 1981 is as follows:-

(a) Late  S.N.  Ponnuswamy  Nadar  entered  into  an agreement  of  sale  with  Kuppathal  and Nanjammal, defendants 1 and 2, on 16.7.1980 for the purchase of the suit property and in that suit, the defendants 6 to 8, were later impleaded.  Sale consideration was agreed at Rs.1,19,500/- and it was  agreed  that  the  sale  would  be  completed within  a  period  of  4  months  from the  date  of agreement.  The second item of property which is forming  part  of  the  first  item of  property  was delivered in part performance of the contract on 7.11.1980 to the first plaintiff S.N. Ponnuswamy Nadar.  On the date of agreement, an advance of Rs.5,000/-  was  paid.   On  7.11.1980,  the defendants  1  and  2  namely,  Kuppathal  and Nanjammal requested the first plaintiff to extend time for completing the sale on the ground that there were standing crops on the field and that was agreed on condition of delivering a portion of the suit property and accordingly, the second item of the suit property was delivered to the first plaintiff on 7.11.1980 and time was extended by 10  months  and  that  was  also  endorsed  in  the agreement of sale attested by witnesses.  Again on  27.8.1981,  further  extension  of  time  was

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granted for  a period of 3 months and that  was also  endorsed  in  the  agreement  of  sale.   On 6.11.1981, a registered letter was sent by the first plaintiff to the defendants 1 and 2 expressing his readiness  to  purchase  the  suit  property  and demanded  the  execution  of  the  sale  deed  by defendants  1  and  2  and  that  was  followed  by lawyer’s notice on 16.11.1981.  Meanwhile, the first plaintiff came to know that the defendants 1and 2 fraudulently transferred the suit property in favour of the defendant Nos. 3 and 5, namely, R.  Perumal,  and R.  Vijayalakshmi, in collusion with the first appellant herein.  The defendants 2 to 5  attempted  to  interfere  with  the  possession and  enjoyment  of  the  second  item  of  the property.  Therefore, the suit was filed for relief of specific performance.

(b) The first plaintiff was ready and willing to pay the  balance  sale  consideration  and  the  first plaintiff  was  having  sufficient  means  for purchasing of stamp paper and other expenses for the due execution of the sale deed and the first plaintiff was willing to deposit the balance sale consideration into the Court.  The defendants 1 and 2 are closely related to the defendants 4 and 5.   With  the  intention  of  defrauding  the  first plaintiff  and  to  defeat  his  legitimate  rights,  a fraudulent  sale  deed  was  executed  by  the defendants 1 and 2 in favour of the defendants 3 and  5.   During  the  pendency  of  the  suit  the defendants 9 to 12 having full knowledge of the pending litigation entered into a joint venture by colluding  with  the  defendants  1  to  8  and  the defendants 9 to 12 claimed to have purchased the suit  property from the defendants  3 to  8.   The sale deed was alleged to have been executed in favour  of  the  defendants  9  to  12  and  nominal document was created with an intention of giving colour to their fictitious and fraudulent transfer and no consideration was paid towards sale deed and the sale in favour of defendants 9 to 12 was also  hit  by  the  doctrine  of  lis  pendens. Therefore, the defendants 9 to 12 were added as

Civil Appeal Nos………..of 2019 @ SLP(C) Nos.23648-23649 of 2015 Venkitalakshmi   vs.  K. Raju and others.

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parties  to  the  suit.   The  first  plaintiff Ponnuswamy Nadar died on 22.6.1989, leaving behind the plaintiffs 2 to 4 as his legal heirs and therefore, the plaintiffs 2 to 4 are entitled to get the relief of specific performance.

3.  The defendants 1 and 2 filed a written statement contending that Ponnuswamy Nadar was a real estate dealer and speculator and he was a neighbour to the defendants and he was also aware of the agreement of sale the defendants 1 and 2 had entered into with the 4th defendant  on  27.3.1979.   Thereafter,  the  first plaintiff created the sale agreement in his favour as if the defendants agreed to sell the suit property to him and  therefore,  the  agreement  dated  16.7.1980 projected by the first  plaintiff  for filing the suit  for specific performance was not a genuine document and the defendants 1 and 2 entered into an agreement of sale with the 4th defendant on 27.3.1979 which was earlier in point of time and therefore, the first plaintiff cannot claim any right even under the agreement of sale.   The  first  plaintiff  also  filed  a  criminal  case against the defendants 1 and 2 for cheating and the defendants were convicted by the trial court and later acquitted  in  the  appeal.   Even  in  the  criminal proceedings,  genuineness  of  the  agreement  of  sale dated 16.7.1980 was challenged by the defendants 1 and  2.   Therefore,  the  defendants  1  and  2  are  not liable to execute any sale deed and the plaintiffs are not entitled to the relief of specific performance.

4. The 4th defendant filed a written statement stating that the suit filed by the plaintiff is vexatious, false and liable to be dismissed.  He questioned the truth, validity  and  genuineness  of  the  agreement  of  sale dated  16.7.1980  alleged  to  have  been  entered  into between the first plaintiff and the defendants 1 and 2 for  the  sale  consideration of  Rs.1,19,500/-  and also the endorsement made on the agreement of sale and parting of possession of second item of property.  The plaintiffs are not in possession of any portion of the suit  property and there  was no necessity to ask for extension of time to deliver possession and there was no agreement of sale between the first  plaintiff  and

Civil Appeal Nos………..of 2019 @ SLP(C) Nos.23648-23649 of 2015 Venkitalakshmi   vs.  K. Raju and others.

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the defendants 1 and 2.  The 4th defendant filed a suit in O.S.No.582 of 1981 on the file of the Subordinate Court,  Coimbatore  for  specific  performance  of  his agreement of sale dated 27.3.1979 and the defendants 1 and 2 entered appearance in that suit and under the agreement  of  sale  dated  27.3.1979,  an  advance  of Rs.60,000/- was paid by the fourth defendant and the sale  consideration  was  fixed  at  Rs.1,75,000/-  and possession was handed over  to  the  4th defendant  in part  performance  of  the  agreement  of  sale  and therefore, the 4th defendant is in absolute possession and enjoyment of the suit property.  As the defendants 1 and 2 did not come forward to receive the balance sale consideration and execute the sale deed, the 4th defendant sent a notice dated 11.6.1981 by registered post calling upon the defendants 1 and 2 to receive the balance sale consideration and execute the sale deed. As  there  was  no  response  to  the  notice,  the  fourth defendant  filed  the  suit  in  O.S.No.582 of  1981 for specific performance.  In that suit, I.A.No.794 of 1981 was filed for injunction and that was also granted and that would also prove that  the  4th defendant  was in possession  of  the  suit  property.   After  entering appearance  in  the  suit  O.S.No.582  of  1981,  the defendants 1 and 2 demanded Rs.20,000/- more and after  negotiation,  the  4th defendant  agreed  to  pay Rs.10,000/-  and  thereafter,  two  sale  deeds  were executed by the defendants 1 and 2 in favour of the defendants  3  and  5  as  per  the  direction  of  the  4 th defendant and thereafter, the first plaintiff in collusion with the defendants 1 and 2 filed the suit to defeat the rights of the defendants 3 to 5.  The 4 th defendant also issued  a  paper  publication  in  “Malai  Malar”  dated 11.11.1981 informing the public about the sale deed in favour of the defendants 3 & 5.  The plaintiff is a very close family friend of the defendants 1 and 2 and all of them colluded and created the agreement of sale dated 16.7.1980 to cause loss to the defendants 3 to 5. The defendants 3 and 5 are bona fide purchasers for value and therefore, they are entitled to get protection and they have no knowledge of the agreement of sale dated 16.7.1980.  It is also stated that the agreement of sale in favour of the 4th defendant was earlier in point of time and the sale deed was executed after the

Civil Appeal Nos………..of 2019 @ SLP(C) Nos.23648-23649 of 2015 Venkitalakshmi   vs.  K. Raju and others.

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alleged agreement of sale dated 16.7.1980 was created in favour of the first plaintiff.  Therefore, the plaintiffs are not entitled to the relief of specific performance.”

4. As regards the respective contentions of the parties raised in

the  plaint  and  the  written  statement  in  O.S.No.707  of  1981,  the

relevant paras in the judgment of the High Court were as under:-

“9. The plaint allegation in O.S. No.707 of 1981 is almost  identical  with  the  plaint  allegations  in O.S.No.704 of 1981 and in that suit, agreement of sale was entered into by the defendants 1 to 5 with the first plaintiff on 16.7.1980 and the consideration was fixed at  Rs.1,19,500/-  and  4  months  time  was  fixed  for completing  the  sale  transaction.   An  advance  of Rs.5,000/- was paid and on 7.11.1980, the defendants 1 to 5 requested the first plaintiff to extend the time by 10 months on the ground that there were standing crops  and  that  was  agreed,  and  25  cents  of  the property  was  delivered  to  the  first  plaintiff  on 7.11.1980 and that property has been shown as item No.2.   Again,  on  27.8.1981,  the  defendants  1  to  5 sought for further extension of time for 3 months and that was also agreed and both were endorsed in the agreement of sale.  The first plaintiff was ready and wiling to purchase the suit property but the defendants 1  to  5  were  not  ready  and  therefore,  notice  dated 16.11.1980  was  issued  by  the  first  plaintiff  to  the defendants 1 to 7 demanding execution of sale deed. Thereafter, the defendants 1 to 5 sold the property to the defendants 6 and 7 and the defendants 1 to 5 have no right to sell the property after having entered into an  agreement  of  sale  with  the  first  plaintiff  on 16.7.1980  and  the  sale  deed  in  favour  of  the defendants 6 and 7 are also not binding on the first plaintiff.  The defendants 6 and 7 in collusion with the defendants 1 to 5 created sale deed in their  favour. The  first  plaintiff  was  also  ready  to  deposit  sale consideration,  if  so  directed  by  the  court.   The defendants 1 to 5 are closely related to the defendants

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6 and 7 and, in order to defraud the first plaintiff and to defeat the legitimate right of the first plaintiff, the sale deeds were executed in favour of the defendants 6  and 7.   The  defendants  8  to  11  claimed to  have purchased the suit  properties  from the defendants  6 and 7 and those sale deeds in favour of the defendants 8  to  11  are  nominal  documents  and  they  have  not come  into  force  and  there  was  no  passing  of consideration  and  as  the  properties  were  alleged  to have been conveyed to the defendants 8 to 11, they were also made as parties.  The first plaintiff died and the  plaintiffs  2  to  4  were  impleaded  as  legal representatives and they were also entitled for specific performance and injunction in respect of item 2 of the property.

10. The defendants  1  to  3 filed a statement  stating that the first plaintiff was a real estate dealer and a speculator and he was a neighbour of the defendants and  he  was  aware  of  the  agreement  between  the defendants 1 to 5 entered into with the 6th defendant on 27.3.1979.   Thereafter,  the  first  plaintiff  created agreement of sale to defeat the right of the defendants 1  to  3.   The  first  plaintiff  also  filed  a  criminal complaint against the defendants 1 to 3 for the offence of cheating and the defendants 1 to 3 were convicted by the trial court and the conviction was set aside in the  appeal  and  in  the  criminal  proceedings,  the defendants 1 to 3 questioned the genuineness of the agreement dated 7.11.1980.  Therefore, the plaintiffs are not entitled for the relief prayed for.

11.  The Court  Guardians of the defendants 4 and 5 filed a statement denying the agreement of sale dated 16.7.1980.  It is stated that the defendants 6 and 5 are minors on that date and, therefore, they are not bound by the agreement of sale.  The agreement was not for the  benefit  of  the  minors.   No  permission  was obtained  from  the  Court  for  entering  into  an agreement of  sale.   They also denied the  allegation that on 7.11.1980 possession of 25 cents of property was  given  to  the  first  plaintiff  and  questioned  the means  of  the  first  plaintiff  to  pay  the  balance  sale consideration.   Therefore,  the  plaintiffs  are  not

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entitled to the relief of specific performance.  The 6th defendant  in  O.S.No.707  of  1981  filed  a  written statement and the same was adopted by 7th defendant and the 4th defendant in O.S.No.704 of 1981 is the 6th defendant in O.S.No.707 of 1981 and he repeated the same allegations in the statement filed in O.S.No.704 of 1981 in the present suit.   It is further stated that pursuant  to  the  agreement  of  sale  dated  27.3.1979 between the defendants 1 to 5 and the 6th defendant, two sale deeds dated 22.10.1981 and exchange deeds dated 19.10.1981 and 22.10.1981 were executed.  The defendants 1 to 5 were demanding Rs.20,000/- over and above the agreed price in the agreement of sale dated  27.3.1979  and  at  the  intervention  of panchayatdars,  they  received  Rs.10,000/-  and executed document in favour of the defendants 6 and 7.  It is also contended that the suit filed by the first plaintiff is a collusive suit and the first plaintiff and the defendants 1 to 5 are closely related and in order to  defeat  the  rights  of  the  defendants  6  and 7,  the present suit was filed.  The agreement of sale dated 16.7.1980 was also not genuine and the endorsements made on the agreement were also forged and created for the purpose of his case and no part of the property was given to the first plaintiff on 7.11.1980 and the plaintiffs were not having means to pay the balance sale consideration as  per  the agreement of  sale and therefore, the suit is liable to the dismissed.”

5. During the pendency of  said Suits,  the original  Plaintiff  expired

and  his  heirs  were  substituted  in  his  place.   Both  the  suits  were  tried

together and the Trial Court by its judgement and order dated 25.03.1987

found that the agreement of sale dated 16.07.1980 (Exhibit-A5) entered

into  between  the  original  Plaintiff  and  the  Defendants  1  and  2  in

O.S.No.704 of 1981 and so also the agreement of sale dated 16.07.1980

(Exhibit-A6) entered into between the original Plaintiff and the Defendants

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1 to 5 in O.S.No.707 of 1981 were genuine agreements of sale; that time to

complete  the  transaction  was  extended  on  07.11.1980  and  the

endorsements  in  that  behalf  were  also  genuine  endorsements,  while

agreement of sale dated 27.03.1979 (Exhibit-B19) was a got-up document

which was ante dated.  The Trial Court, thus, decreed both the Suits and

granted decree for specific performance as prayed for.

6. The Defendants in the above-mentioned O.S.Nos.704 and 707 of

1981 being aggrieved filed Appeal Suit Nos.646 and 647 of 1987 in the

High Court.   The High Court, by its judgment and order, presently under

Appeal, allowed both the Appeal Suit Nos. 646 and 647 of 1987.  On the

basis of the submissions advanced by the Counsel,  the following points

were framed for consideration:-  

“(i) Whether Ex.A.5 was executed by the defendants 1 and  2  in  O.S.No.704  of  1981  and  Ex.A.6  was executed by the defendants 1 to 3 in O.S. No.707 of 1981 as alleged by the plaintiffs?

(ii) Whether Exs. A.7 and A.8 were executed by the said defendants for  extension of time and they also parted  with  possession  of  a  portion  of  the  suit property as stated in Exs.A.7 and A.8?

(iii) Whether Exs.A.9 and A.10 were executed by the aforesaid defendants seeking extension of time?

(iv) Whether the plaintiffs were ready and willing to perform their part of the contract as per Exs.A.5 and A.6?

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(v) Whether  Ex.A.39  equivalent  to  Ex.B.19  was executed by the defendants 1 and 2 in O.S.No.704 of 1981 and the  defendants  1  to  3  in  O.S.  No.707 of 1981 in favour of the fourth defendant in respect of the entire suit properties in both the suits?

(vi) Whether  the  agreement  Ex.A.39  equivalent  to Ex.B.19 was a genuine document as alleged by the appellants?

(vii) Whether the defendants 4 to 12 in O.S.No.704 of 1981 and the  defendants  6  to  11  in  O.S.No.707 of 1981 are bona fine purchasers for value?”

7. The High Court answered first three points against the Plaintiff and

held that the Plaintiff was not entitled to the relief of specific performance.

Having ruled against the Exhibits-A5 and A6, the High Court went on to

consider whether relief for specific performance could be granted in favour

of  the  Plaintiff  even  assuming  said  Exhibits-A5  and  A6  to  be  valid

documents.  The High Court disbelieved the theory that by Exhibits-A7 to

A10 the time to complete the transaction was extended as contended by the

Plaintiff and returned a finding that the Plaintiff was not ready and willing

to perform his part of the contract and thus was not entitled to decree for

specific performance.   

8. We  heard  Mr.  R.  Balasubramanian,  learned  Senior  Advocate  in

support of the appeals and Ms. E.R. Sumathy, learned Advocate for the

respondents.

Civil Appeal Nos………..of 2019 @ SLP(C) Nos.23648-23649 of 2015 Venkitalakshmi   vs.  K. Raju and others.

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Mr. Balasubramanian, learned Senior Advocate took us through the

entire record and submitted that the view taken by the Trial Court was just

and proper and no interference was called for in first appellate jurisdiction.

It  was  submitted  that  by  virtue  of  Exts.7  to  10,  time  to  complete  the

transaction was extended and that the Plaintiff had shown his readiness and

willingness and as such was entitled to decree for specific performance.

Ms. Sumathy, learned Advocate, on the other hand, submitted that the High

Court had rightly found that Exhibits 7 to 10 could not believed.  In her

submission  it  was  found,  as  a  fact,  that  there  was  no  readiness  and

willingness on part of the Plaintiff.

9.   It  is  crucial  to  note  that  as  against  the  consideration  of

Rs.1,19,500/- only Rs.5,000/- were paid as earnest money on 16.07.1980.

A finding of fact recorded by the High Court was to the effect that the

Plaintiff had failed to prove that the time to complete the transaction was

extended vide Exts.7 to 10.  We have gone through the appreciation of

evidence in that behalf and do not find any error. Once the theory that time

for completion of transaction was extended gets demolished, the argument

that there was readiness and willingness on part of the Plaintiff also gets

completely weakened.  Thus, the conclusions arrived at by the High Court

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are not in any way incorrect to justify interference in jurisdiction under

Article 136(1) of the Constitution.    

10.  However,  the fact  remains that  money amounting to Rs.5,000/-

was parted with as early as in July 1980.  Therefore, in the peculiar facts

and circumstances of the present case, in our view, ends of justice would

be met  if  the  appellants  are  given some compensation  over  and  above

return of the earnest money.   We, therefore, direct the respondents to make

over a sum of Rs.5 lakhs (Rupees five lakhs) in lieu of return of earnest to

the present appellants within eight weeks from today.

11.   Subject to the aforesaid direction, the appeals stand dismissed.  No

costs.

…………………….J. [Uday Umesh Lalit]

…………………….J. [Vineet Saran]

New Delhi; August 13, 2019.