P K JAYAKUMAR Vs. R PADAMCHAND JAIN

JUDGEMENT

(1.) THIS appeal has been directed against the decree and Judgment in O. S. No. 9315 of 1995 on the file of VIII Assistant Judge, City Civil Court, Chennai. The defendant who lost his defence before the trial Court is the appellant herein.

(2.) THE short facts of the plaint sans irrelevant particulars are as follows: The defendant is the owner of the property,a house and premises comprising the entire first and second floors of the premises bearing door No. 44/3, Landons Road, Kilpauk, Madras-10 together with 2/3rd share in the land measuring 2520 sq. ft which is the plaint schedule property. The defendant approached the plaintiffs and offered to sell the immovable property. The plaintiffs agreed to purchase the said property for a sum of Rs. 8,50,000/ -. The plaintiffs have entered into an agreement of sale with the defendant on 29. 10. 1993 duly registered as Document No. 1675 of 1993 in the office of the Sub Registrar, Periamet, Madras. On 29. 10. 1993, the first plaintiff made payment of Rs. 1,00,000/- by cash to the defendant under the agreement as advance. On the same day, the second plaintiff also paid a sum of Rs. 1,00,000/- to the defendant in cash under the agreement as advance. Thus, in all the plaintiffs paid a sum of Rs. 2,00,000/- as advance. As per Clause 2 (c) of the agreement of sale dated 29. 10. 1993, the defendant agreed to receive the balance of the sale consideration at the time of registration of the sale deed. As per Clause 8 of the agreement of sale, the defendant agreed to complete the sale within three months. The defendant failed and neglected to obtain the Income Tax Clearance for the sale of the said property and he has also failed to perform his part of the contract within the time stipulated under the sale agreement. By letter dated 30. 1. 1994, the defendant sought time till 31. 7. 1994 to complete the transaction of the sale. But the sale was not completed even by 31. 7. 1994. Inspite of several requests, the defendant failed and neglected to complete the sale. Thereupon, the first plaintiff sent a telegram dated 15. 10. 1994 calling upon the defendant to register the sale deed relating to the schedule property. For the said telegram dated 15. 10. 1994, the defendant sent a reply dated 25. 10. 1994 wherein for the first time , the defendant raised a plea stating that the agreement dated 29. 10. 1993 was entered into only for the purpose of financing his wife who was indulged in film production. The said letter of the defendant contained all frivolous and vexatious contentions. Thereafter, the plaintiffs issued a suit notice on 27. 1. 1995 calling upon the defendant to execute the sale deed in respect of the plaint schedule property. The defendant sent a reply dated 8. 2. 1995 contending all false allegation which are no way connected with the agreement of sale dated 29. 10. 1993. The plaintiffs are no way connected with the transaction referred to in the reply notice dated 8. 2. 1995. The said plea has been raised by the defendant only to cheat the plaintiffs after having taken an advance of Rs. 2,00,000/- for selling the immovable property. The plaintiffs are always ready and willing to perform their part of the contract. The defendant has not furnished Income Tax Clearance Certificate to effect the sale. The defendant had incurred a loan of Rs. 3,50,000/- from the Life Insurance Corporation of India and a simple mortgage for Rs. 50,000/- in favour of one Mr. T. M. P. Griffin Kangoo. As per Clause 3 of the agreement of sale dated 29. 10. 1993, the defendant had authorized the plaintiffs to pay and discharge the loan due to the Life Insurance Corporation of India and the said T. M. P. Griffin Kangoo out of the sale proceeds, but at the time of registration of the sale deed. The plaintiffs are always ready and willing to perform their part of the contract. The defendant has neglected to complete the sale transaction. Hence the suit.

(3.) THE Defendant in his written statement would contend that basis of the claim in the suit is alleged to be the sale agreement entered into between the plaintiffs and the defendant on 29. 10. 1993 for a consideration of Rs. 8,50,000/- and that a sum of Rs. 2,00,000/- were paid as advance on 29. 10. 1993. The defendant's wife is a film producer. When the film was half way through, the finance was required for the completion of the said film. It is only with that purpose the defendant approached the plaintiffs some time in January 1993. The first plaintiff agreed to advance upto a sum of Rs. 12,00,000/- for completing the film. That amount was agreed to be advanced in stages. On 25. 1. 1993, a sum of Rs. 1,00,000/- was advanced by the first plaintiff and the defendant had issued ten post dated cheques each for Rs. 10,000/ -. In respect of four cheques, the defendant had repaid a sum of Rs. 40,000/ -. However, no payment was made in respect of the remaining cheques. The first plaintiff had not honoured his commitment to advance the money to the extent of Rs. 12,00,000/ -. However, after very great pressure on the first plaintiff, the latter had paid a sum of Rs. 75,000/- on 10. 5. 1993 after taking six post dated cheques from the plaintiffs each for Rs. 12,500/ -. Since the defendant was awaiting further payment from the first plaintiff as promised by him, the defendant did not arrange for repayment of the sum of Rs. 75,000/- advanced by the plaintiff on 10. 5. 1993. After prolonged and persistent request to fulfil his promise the first plaintiff paid a further sum of Rs. 25,000/- on 30. 5. 1993 after taking a post dated cheque for the said amount. The mode of repayment followed by the first plaintiff inspite of his agreeing to advance a sum of Rs. 12,00,000/- for the completion of the picture was not at all helpful to the defendant to complete the picture. It is only in such circumstances, the first plaintiff insisted upon the defendant giving substantial immovable property security towards the further advance of funds by the first plaintiff for completing the picture. The alleged agreement of sale dated 29. 10. 1993 was executed only for giving security towards further payments to be made by the first plaintiff and not for selling the property to the first plaintiff. The reference to the consideration of Rs. 8,50,000/- was never thought about or fixed nor was the sum of Rs. 2,00,000/- paid by the first plaintiff on several occasions was treated as advance. Even the discharge of Encumbrance Certificate was introduced only with a view to make the agreement appear as if it is one for sale. The defendant further states that at no point of time there was any understanding between the parties to convey the property to the first plaintiff. The extension of time was to enable the first plaintiff to fulfil his promise viz. , to make further advance as agreed to. The telegram dated 15. 10. 1994 of the first plaintiff was duly replied by the defendant by letter dated 25. 10. 1994 setting out the true and correct position regarding the alleged agreement. The defendant again reiterates that the agreement was entered into only to provide for security in favour of the first plaintiff to enable him to advance further amounts to the defendant. There is no agreement to sell the suit property as claimed by the plaintiffs and the alleged agreement was not entered into with a view to sell the suit property to the plaintiffs. There was no obligation on the defendant to get the Income Tax Clearance Certificate since there was no transaction for sale of the suit property. There was no other occasion for the first plaintiff to make any such payment since there was no transaction for sale of the suit property in favour of the plaintiffs. The plaint is silent as to any demand in writing having been made to the defendant as claimed by the plaintiffs. The plaintiffs sent a notice dated 27. 1. 1995 containing false and incorrect allegations and the same was duly replied by the defendant through his advocate on 8. 2. 1995. Even assuming that the agreement was true, the plaintiffs were not ready and willing to perform their part of the obligation under the agreement. The defendant was not under an obligation to get the Income Tax Clearance Certificate. The plaintiffs having undertaken to make further advance of money has miserably failed to make the same despite several requests by the defendant. The plaintiffs have no cause of action to file the suit. Hence the suit is liable to be dismissed.