SUSHILA Vs. NILHALCHAND NAHATA

JUDGEMENT

(1.) This suit for specific performance was filed originally against one defendant. Since he died pending suit, his legal representatives were added as defendants- 1 to 4.

(2.) The plaint averments are as follows : The plaintiff intended to start an Educational Society with various teaching institutions; she was in search of suitable extent of vacant land to start the institution. While so, the original defendant represented to her that he is the sole and absolute owner of the suit property, having purchased the property in public auction held by Murrey and Company on 12-11-1975, under a registered sale deed; he further represented that a portion of the said property together with the bungalow and the appurtenant land was already sold to one Saraswathy Kailasam under a registered deed of sale, dated 29-3-1984 and the balance of the land to the extent of 9 acres 50 cents were available and it was free from all encumbrances and he was ready and willing to sell the land for a sum of Rs. 15 lakhs; the plaintiff agreed to purchase the same, subject to the approval of title and some other conditions. Accordingly, the plaintiff entered into an agreement for sale with the original defendant, represented by his Power of Attorney, on 4-11-1985 at Madras; on 17-3-1985, a sum of Rs. one lakh was already paid as advance and the defendant further received another sum of Rs. 4 lakhs on 18-6-1985 amounting to a total advance of Rs. 5 lakhs; the original defendant acknowledged the receipt of the same in the agreement. The original defendant agreed to obtain exemption for the transfer of property, in favour of the plaintiff from the Urban Land Ceiling Authority and also necessary Income-tax Clearance Certificate. The defendant agreed to sign and give necessary documents to enable the plaintiff to make applications to the Urban Land Ceiling Authority to obtain necessary exemption certificate and to obtain and produce the necessary income-tax clearance certificate; he also agreed to make available all the title deeds for scrutiny and investigation of the title of the defendant by the counsel for the plaintiff. The plaintiff agreed that in the event of sale transaction being completed, she should obtain vacant possession from the Madras Race Club, an occupier in respect of a portion of the property. Subject to all the above conditions, the parties agreed that the sale transaction shall be completed within six months. The plaintiff had been requesting the defendant to sign and present necessary documents for obtaining permission from the Urban Land Ceiling Authority and from the Income-tax Department. The defendant was lethargic and was postponing to comply with the request of the plaintiff. The plaintiff was all along ready and willing and continued to be ready and willing to pay the balance of the sale price to the defendant and complete the sale transaction in her favour, provided the defendant complies with the condition of the agreement. Though the defendant informed the plaintiff that he was taking steps to get necessary Income-tax Clearance Certificate from the authorities, no such certificate was either obtained or furnished to the plaintiff. The plaintiff requested the defendant several times to obtain such certificate. The plaintiff also requested the defendant to file an application for obtaining clearance certificate from the Land Ceiling Authority. But the defendant did not co-operate with the plaintiff; though the plaintiff furnished some of the original title deeds relating to the property, the defendant did not take steps. Therefore, the defendant clearly committed default of the agreement; the plaintiff made a demand on the defendant to complete the sale transaction; hence, the suit is filed praying for a direction to the defendant to execute the sale deed conveying the suit property in favour of the plaintiff after receiving the balance of sale consideration of Rs. 10 lakhs and also to give possession of the suit property to the defendant together with costs.

(3.) Thes Power of Attorney Agent of the original defendant has filed the written statement as follows : An agreement was entered into between the plaintiff and the original defendant, represented by his Power of Attorney Agent. The suit ought to have been instituted only against the disclosed principal and not against the principal represented by his Power of Attorney Agent; leave to sue is necessary. The disclosed principal ordinarily resides outside the jurisdiction of this Court; but, no leave has been obtained. The suit is barred by limitation. Suit is undervalued for the purpose of Court-fees. The defendant is the owner of the property; a portion of which was sold on 29-3-1984; the balance of 9 acres and 50 cents are with the original defendant. The original defendant entered into an agreement for sale with the plaintiff, on 4-11-1985, in respect of the remaining portion of the property; it contains reciprocal promises, as follows : (a) the plaintiff should get exemption from the Urban Land Ceiling Authority for transfer of property that was agreed to be conveyed: (b) the plaintiff should pay all arrears of tax payable to the Urban Land Ceiling Authority up to the date of sale of the properties agreed to be conveyed; (c) the plaintiff should get vacant possession of the property from the Madras Race Club who are the tenants in the property. The transaction should be completed within six months. It is further stated that the plaintiff had paid an advance of Rs. one lakh on 17-3-1985 and Rs. 4 lakhs on 18-6-1985. The plaintiff did not take steps to comply with the terms and conditions of the agreement; the plaintiff did not take steps to approach the Urban Land Ceiling Authority for the purpose of obtaining the exemptions necessary for the transfer of the property. The plaintiff did not take any steps even to ascertain the arrears of Urban Land Tax. No draft sale deed was forwarded to enable the defendant to secure necessary certificate under Section 230-A of the Income-tax Act. The plaintiff was indifferent towards his obligations. In the year 1986, the Income-tax Act was amended with the introduction of Chapter XX-C, the plaintiff was informed that the law required a joint application to be made to the competent authority for grant of a "no objection certificate". The plaintiff did not respond. The plaintiff did not disclose any interest in the transaction or to pay the balance of sale consideration of Rs. 10 lakhs. The plaintiff abandoned the agreement. Therefore, the defendant sent a letter on 29-2-1988 whereby the defendant cancelled the agreement for breach of terms and conditions thereof and non-performance of the obligations; in that letter, the defendant also called upon the plaintiff to return the original sale deeds and other title deeds handed over to the plaintiff; in that letter, it was also stated that the defendant was willing to return the advance of Rs. 5 lakhs received already; it returned undelivered; the defendant came to know that the plaintiff presently residing at Gandhi Nagar, Adyar, Chennai-20. Therefore, the defendant redirected the same letter to the Adyar address of the plaintiff; that cover was returned with an endorsement, "refused". Thereafter, the defendant caused a lawyers notice to the Adyar address; a cheque for a sum of Rs. 4,50,000/- accompanied the said notice; by this notice, the defendant called upon the plaintiff to return the original documents received by her for security. The plaintiff refused to receive this notice and it was returned "undelivered". On 23-1-1988, the defendant issued a telegraphic notice informing that agreement stood cancelled; by letter dated 4-4-1988, the defendant informed the appropriate authority of the Income-tax Department that the agreement stood cancelled; the defendant caused another notice on 9-4-1988 enclosing a cheque for Rs. 4.50 lakhs and also a copy of letter dated 29-2-1988; that notice was sent by recorded delivery. The plaintiff had been all along evading the service of various notices issued; the plaintiff never expressed her willingness and never called upon the plaintiff orally or in writing between 1985 and 1988. The plaintiff was never ready and willing to complete the transaction. The plaintiff did not have the finance to complete the transaction and was not in a frame of mind to do the needful for completing the transaction due to the health condition of her son. The plaintiff entered upon the agreement for speculative purposes and the completion of the transaction was never her intention. The agreement is hit by Tamil Nadu Urban Land Ceiling Act. Hence, the agreement is ab initio void and opposed to public policy. The plaintiff never requested the defendant orally or in writing to sign or present any paper for obtaining permission from the Urban Land Ceiling Authority or Income-tax Authority. The defendant was never called upon to complete the transaction or even assist in taking necessary steps in that direction. The period of 6 months provided in the agreement was the essence of the transaction. The plaintiff was offered the land on concessional rates only on her assurance that the transaction would be completed and the total consideration payable made to the defendant within six months. There is no society by name, "Guindy Educational Society" nor any company under the name, "Brooklands Motels and Hospitals Private Limited" of which organisations, the plaintiff has purported to describe herself as a Director in the agreement for sale. The defendant caused lawyers notice on 27-5-1990 to the plaintiff informing that the agreement was invalid in law being vitiated by misrepresentation apart from having become unenforceable by reason of various defaults. Even by this notice, the plaintiff was informed that the defendant was ready and willing to refund the advance paid by the plaintiff on return of the original documents. The defendant received a letter on 2-6-1990 from the plaintiff dated as 25-5-1990 (posted on 31-5-1990) as a counter-blast to the defendants notice dated 27-5-1990. Only from this letter, the defendant came to know that the plaintiff had instituted the above suit. The summons in this suit had not been served on the defendant. The defendant is coming forward to file this written statement in the interest of an early disposal of this mala fide, vexatious and speculative suit. The plaintiff did not take any steps to complete the transaction. The defendant intimated the plaintiff of the termination of the agreement and suo motu took the necessary steps for exempting the land under the provisions of the Urban Land Ceiling Act. As a result of the exertions of the defendant, orders have been passed in January, 1989 exempting a portion of the land. Orders have been passed declaring a major portion of the land as excess and the said excess lands have vested in the Government of Tamil Nadu. The plaintiff who had abandoned her obligations under the agreement has instituted the present suit speculatively in an attempt to gain the benefit of the defendants efforts in getting a portion of the land exempted from the provisions of the Land Ceiling Act. The entire property has been valued for the purpose of Wealth Tax by the concerned Department at Rs. 86 lakhs, by order dated 20-5-1991. The speculative intentions of the plaintiff who has come forward with this suit without either complying with the obligations on her part are evident from the circumstance that the plaintiff has sought to take advantage of the appreciation in value of the land through no effort of hers. The agreement has become unenforceable and incapable of performance. The defendant is ready to return the advance of Rs. 5 lakhs. The defendant is entitled to appropriate the substantial portion of the amount for damages for breach of the agreement and nonperformance within the period stated. Therefore, the suit has to be dismissed. 3(a). The defendants did not file any separate written statement.