MULUPURI SANKARA RAO Vs. PONNAPALLI VIMALA CEVI

JUDGEMENT

(1.) FACTS in brief: the unsuccessful 1st plaintiff in O. S. No. 367/89 on the file of Subordinate Judge, vijayawada had preferred the present Appeal and in view of the fact that the sole appellant/ 1st plaintiff died, the legal representatives were brought on record as appellants 2 and 3 in AS MP No. 24/2006 by order dated 3. 1. 2006. The 2nd plaintiff is shown as 7th respondent in this Appeal. The appellant and 7th respondent as plaintiffs instituted the suit praying for the relief of specific performance on the strength of oral contract of sale said to have been entered into on 12. 3. 1989 and also directing the defendants 1 and 3 to 6 to execute and register a proper sale deed in favour of the plaintiffs at their expense by receiving the balance of sale consideration and if they refuse to do so, the Court to execute the sale deed in accordance with law and prayed for further relief of permanent injunction restraining the defendants from selling or otherwise alienating the plaint schedule property in favour of anybody. Originally, the suit was filed against defendants 1 to 5 and subsequently by virtue of an order made in LA. No. 5089 dated 12. 4. 1990 Smt. Uppa vanisree in whose favour the sale deed was got obtained by 2nd defendant from the 1st defendant for the part of plaint schedule property also had been impleaded as 6th defendant. In the light of the respective stands taken by the parties in the respective pleadings, the learned Subordinate judge, Vijayawada having settled the issues, recorded the evidence of PW1 to pw5, DW1 to DW4, marked Exs. A1 to a17, Exs. B1 to B13 and ultimately came to the conclusion that the plaintiffs are not entitled for the relief of specific performance of oral agreement of sale dated 12. 3. 1989 and accordingly the suit was dismissed with costs. Aggrieved by the same, as already referred to supra, the 1st plaintiff alone preferred the present Appeal and inasmuch as the sole appellant is no more, the legal representatives who had been brought on record at present are prosecuting the present appeal.

(2.) PLEADINGS of the parties : The respective pleadings of the parties are as hereunder: averments made in the plaint: It was pleaded in the plaint that the 1st defendant being the owner of the plaint schedule property requested one Sri S. S. N. Pantulu, retired Excise Superintendent of Narsapur, to help her in selling the plaint schedule property. Sri S. S. N. Pantulu contacted his friend one Sama Venkata Rama Subrahmanyam, resident of Sitarampuram, Vijayawada and requested him to find out a purchaser for the said schedule property and the said s. V. R. Subrahmanyam informed the plaintiffs 1 and 2 about the 1st defendant's offer to sell and when the plaintiffs expressed their intention to purchase the said property, he asked them to come over to his house on 5. 3. 1989 as the 1st defendant expected was expected to come to his house on that day. On 5. 3. 1989, both the plaintiffs accompanied by one Chintapalli ramachandra Rao went to the house of subrahmanyam by which time the 1st defendant and her last son-in-law were already there. The 1st defendant offered to sell the plaint schedule property for a sum of Rs. 8,00,000/- and the plaintiffs expressed their intention to purchase the same for rs. 6,00,000/- as the plaint schedule building is a very old one. As Subrahmanyam was about to leave the house on his personal work, at his instance all of them decided to reassemble on 12. 3. 1989 for further negotiations. The 1st defendant informed that her rent control case was posted to 9. 3. 1989 and that she would stay on for talks and settlement of bargain on 12. 3. 1989. As arranged earlier, again the plaintiffs 1 and 2 and Ch. Ramachandra Rao went to the house of Subrahmanyam at 6 p. m. , on 12. 3. 1989. The 1st defendant and her last son-in-law and Subrahmanyam were there by the time they reached there. After some discussions, the bargain was settled on the mediation of Subrahmanyam and ch. Ramachandra Rao. The 1st defendant agreed to sell the plaint schedule property to the plaintiffs for a consideration of rs. 6,50,000/ -. Then the 1st plaintiff paid then and there an advance of Rs. 25,000/- towards the sale transaction on behalf of both the plaintiffs. It was agreed to pay an amount of Rs. 75,000/- on 17. 3. 1989 and the balance of sale consideration by 12. 5. 1989 by way of cheque which was the date fixed for completion of sale transaction and registration of sale deed in favour of the plaintiffs. It was also agreed that the possession of the portion lying vacant in the schedule property i. e. , a portion of old tiled house and vacant site on the front and back be delivered to the plaintiffs on the above said date and the lessees 2nd to 4th defendants who were continuing in occupation of their respective portions be attorned to the plaintiffs. It was also agreed that the 1st defendant should obtain Encumbrance certificate for the plaint schedule property for a period of 13 years and Income Tax clearance Certificate and permission of urban Land Ceiling Office as advised if necessary at her own expenses with the co-operation of the plaintiffs and deliver her title deeds, tax receipts etc. , for schedule property to the plaintiffs along with aforesaid certificate and orders etc. , at the time of execution of sale deed. It was also agreed between the parties that in case the plaintiffs fail to pay entire balance of sale consideration to the 1st defendant by 12. 5. 1989 due to their own fault or negligence, they should pay the said amount with interest @ 18% p. a. till the payment of the entire amount. It was further agreed that the 1st defendant is not entitled to claim interest on the balance of sale consideration till she gets ready for completion of sale transaction. The above said terms and conditions of oral contract which were settled and agreed then could not be reduced to writing as it was already late and as stamp paper was not fetched. Therefore, the 1st defendant and the plaintiffs wanted to execute written contract of sale according to usual practice on 17. 3. 1989 incorporating all terms and conditions of the said oral contract at the house of sri Yellapeddi Venkata Subrahmanyam, a non-practising advocate and related to the 1st defendant as suggested by the 1st defendant herself. The 1st defendant promised to get the rent control case adjourned from 16. 3. 1989 to a convenient date so that attornment of tenants to the plaintiffs and collection of rents from them by the plaintiffs and other things could be arranged if necessary. It was further pleaded that on 16. 3. 1989, plaintiffs met the 1st defendant in the premises of Court of Rent Controller, vijayawada and informed her that they would be meeting her at the house of her relative Y. V. Subramanyam as required by her on 17. 3. 1989 at about 11 a. m. for executing the agreement of sale. On 17. 3. 1989, the plaintiffs along with the scribe sri Patibanda Venkata Krishna Murthy and S. V. Subramanyam went to the house of Y. V. Subramanyam having secured non-judicial stamps and having made themselves ready to issue a cheque for the agreed amount of Rs. 75,000/- on the Indian Bank to be drawn by 1st plaintiff in favour of the 1st defendant. When the plaintiffs conveyed their readiness and willingness to pay the agreed amount of Rs. 75,000/- by way of cheque and to enter into the agreement of sale as settled on 12. 3. 1989, the 1st defendant informed them that she gave up the idea of selling the property but the plaintiffs pressed for execution of sale in terms of the oral contract already entered into. Then the 1st defendant started to give evasive replies and Ch. Ramachandra Rao and S. V. Subramanyam intervened and advised her to abide by the oral contract already entered into and to execute a written contract in terms thereof after receiving the amount of Rs. 75,000/- as agreed earlier. But the 1st defendant did not heed their words and S. V. Subrahmanyam and ch. Ramachandra Rao advised the plaintiffs to meet the 1st defendant a few days later. They also advised the 1st defendant to reconsider the matter. Then the plaintiffs informed them that they would wait till 23. 3. 1989 expecting the 1st defendant to come forth to execute a formal written contract. But there was no response from the 1st defendant till 23. 3. 1989. Then the plaintiffs got issued a registered notice dated 22. 3. 1989 to the 1st defendant informing that they were ready and willing to perform their part of contract and inviting her to come forth to receive cheque for rs. 75,000/- and to perform her part in terms of oral contract of sale entered into on 12. 3. 1989. But the 1st defendant avoided to receive the said notice by post and hence the same was returned unserved. The plaintiffs got published the oral contract of sale between them and the 1 st defendant in Eenadu Daily on 24. 3. 1989 so as to serve as a notice to one and all about the said oral contract. The 1st defendant also got published through her Counsel, in Eenadu dated 15. 4. 1989 denying the oral contract of sale and other facts. It is further mentioned in the said publication that she agreed to sell the plaint schedule property to her tenants without furnishing their names and that she received earnest money from them on 10. 3. 1989 after executing the agreements of sale in their favour. Having seen the said publication the plaintiffs got issued another registered notice dated 16. 4. 1989 to the Counsel for the 1st defendant by enclosing a copy of the earlier notice dated 22. 3. 1989 and calling upon the 1st defendant to perform her part of the contract. The 1st defendant's Counsel issued reply notice dated 28. 4. 1989 to the plaintiffs counsel denying the oral agreement between her and the plaintiffs. For the first time the names of purchasers and the details of sale consideration and the receipt of the earnest money from defendants 3 to 6 are mentioned in the said notice. The alleged sale agreements from the tenants of the 1st defendant i. e. , the defendants 3 to 6 were mentioned in the said notice. The alleged sale agreements from the tenants of the 1st defendant i. e. , defendants 3 to 6 were created for the purpose of the suit by putting anti-dates for the purpose of defeating the genuine and oral contract of sale entered into by the plaintiffs and the 1st defendant on 12. 3. 1989. The plaintiffs got issued a rejoinder dated 13. 5. 1989 to all the defendants once again that they should not enter into any transaction with the 1st defendant for the plaint schedule property and the plaintiffs are ready and willing to perform their part of the contract. The 1st defendant had also informed Sri S. S. N. Pantulu and others about her having entered into the said contract of sale orally on 12. 3. 1989 and receipt of the advance amount of Rs. 25,000/- from them. The 1st defendant in order to get higher sale consideration, executed and registered fraudulent documents of sale in favour of defendants 3 to 6 with intent to defeat the plaintiffs contract and hence the suit for specific performance of oral agreement and for permanent injunction restraining the 1st defendant to execute and register the sale deed in favour of anybody in respect of the plaint schedule property. Averments made in the written statement of 1st defendant : The material allegations of the plaint had been denied and it was further pleaded that even according to the plaint and earlier notices, the alleged agreement dated 12. 3. 1989 is only an agreement to enter into a further agreement of sale on 17. 3. 1989 and the same cannot be specifically enforced. When the 1st defendant entered into contract with defendants 2 to 5 on 10. 3. 1989 itself, it is preposterous to contend that the 1st defendant had entered into any contract for the sale of her property on 12. 3. 1989 and that too for lesser sum of Rs. 6,50,000/ -. Several details were pressed into service with fraudulent motive to have fraudulent profit from the 1st defendant under the threat of litigation and blackmailing. The 1st defendant intended to sell her property and informed the same to sri S. S. N. Pantulu to help her in the sale of the said property. Mr. Pantulu must have contacted S. V. R. Subrahmanyam who might have been asked to find persons interested to purchase the plaint schedule property of the 1st defendant. She was introduced to m. Sankar Rao, the 1st plaintiff, at the house of S. V. R. Subrahmanyam and another person by name Ch. Ramachandra Rao was also there. She was not introduced to n. Narasimha Rao who figured as one of the intending purchasers i. e. , the 2nd defendant in the suit. The 1st defendant does not know the 2nd plaintiff and he must have introduced so as to display the solvency for the purpose of the suit. The 2nd plaintiff did not participate in deliberations on 5. 3. 1989. The 1st defendant was asked to quote her price for the plaint schedule property and she informed that she was expecting the price of Rs. 10,00,000/ -. The 1st plaintiff and Subrahmanyam informed the 1st defendant that the price quoted was on the higher side and she was asked to give her final figure about the value of the property. After thinking over the matter, the 1st defendant finally told them that she would be willing to sell the property for Rs. 8,00,000/ -. After hearing the price quoted by the 1st defendant, the 1st plaintiff and Ramachandra Rao stated that the property was not worth that much and offered to purchase for Rs. 6,00,000/-only. Then and there the 1st defendant positively told that she was not interested in the price quoted by the 1st plaintiff and informed that she was confident to get definitely the price very nearer to the price quoted by her i. e. , Rs. 8,00,000/ -. After the above said talks, she never met either the 1st plaintiff or Ramachandra Rao at any place. The rent control cases of the 1st defendant were posted to 9. 3. 1989 and she attended the said Court but the matter was adjourned from 9. 3. 1989 to 16. 3. 1989. It was also further pleaded that after the rent control case was adjourned from 9. 3. 1989 to 16. 3. 1989, her tenants told her in the court itself that they themselves were interested to purchase their respective portions. While the 1st defendant was in the house of Y. Subrahmanyam and when y. Subrahmanyam was not at his house, the tenants came there, agreed to purchase the property from her. Accordingly on 10. 3. 1989, all the four tenants agreed to purchase the property in their respective occupation @ Rs. 700/- per sq. yard inclusive of the old structures that works out to rs. 7,08,500/- for the entire property. The 1st defendant received earnest money also from the tenants i. e. , Rs. 10,000/- from the 2nd defendant and Rs. 5,000/- each from the defendants 3 to 5. She had also passed a receipt in favour of each tenant containing the brief terms of the agreement. While by 10. 3. 1989 the property had been contracted to be sold, it is preposterous to contend that on 12. 3. 1989 at 6 p. m. , the negotiations were finalized and she agreed to sell the property for a consideration of Rs. 6,50,000/ -. Since the very alleged agreement on 12. 3. 1989 itself is false, all other allegations connected with the said agreement are equally false. The 1st defendant never entered into any oral agreement with the plaintiffs to sell away her plaint schedule property to them nor received earnest money of Rs. 25,000/- nor agreed to receive the balance consideration of Rs. 75,000/- on executing the agreement of sale on 17. 3. 1989. It was also further pleaded that the allegations of the plaintiffs that S. V. Subrahmanyam and Ch. Ramachandra rao advised the plaintiffs to reconsider the matter of executing the agreement of sale is false and the 1st plaintiff never met her subsequent to 9. 3. 1989. When there is no contract at all, the question of the plaintiffs being ready and willing to perform their part of the contract does not arise. After 17. 3. 1989, the 1st defendant left for gudivada and stayed there for about 5 or 6 days and later she went to Narsapur. Thereafter, she fell sick and did not attend the Court on 28. 3. 1989. The 1st plaintiff is a broker in real estates business and he has no capacity and solvency to purchase the property for himself. She had not refused the notices issued by the 1st plaintiff. It is on the receipt of telegram from her advocate she came down to Vijayawada and got the notice issued through her advocate. Since the 1st defendant had to leave for States where her son is living, she had executed G. P. A. in favour of Kuchipudi ramesh on 25. 5. 1989 and got it registered. The 1st defendant left for States on 27. 5. 1989. Hence the suit may be dismissed with compensatory costs. The 1st plaintiff came up with the suit with false allegations. Thus they are not entitled to get the equitable relief of specific performance on the alleged oral contract of sale said to have been entered into on 12. 3. 1989. The plaintiffs also are not entitled to seek permanent injunction restraining the 1st defendant from selling the property as she had already executed the sale deeds prior to the filing of the suit and hence the suit may be dismissed with compensatory costs. Averments made in the written statement of defendants 2 to 6: It was pleaded that the defendants 2 to 5 are the tenants of the 1st defendant and the 6th defendant is the daughter-in-law of the 2nd defendant in whose favour the 2nd defendant obtained the sale deed in respect of his tenanted premises from the 1st defendant. The 1st defendant filed eviction petitions against the defendants 2 to 4 before the Rent Controller, vijayawada. After filing of the said petitions, the 1st defendant went to U. S. A where her son is living. She returned from the States in February 1989 and attended the Court on 9. 3. 1989. The defendants 2 to 5 informed the 1st defendant on 9. 3. 1989 that they intended to purchase their respective portions in their occupation as tenants and they would come and talk over the matter with her in the evening at the house of y. Subrahmanyam. Accordingly, they met her on the same day evening at the house of Y. Subrahmanyam and they talked over the matter to the 1st defendant. Y. Subrahmanyam was not present in his house at that time and finally all of them agreed to purchase their respective portions in their occupation as tenants. It was further pleaded that on 10. 3. 1989, the defendants 1 to 5 agreed to purchase their respective portions at Rs. 700/- per sq. yard inclusive of old structures. The 2nd defendant paid an advance amount of Rs. 10,000/- and obtained a receipt from the 1st defendant with brief terms of agreement and the defendants 3 to 5 paid each Rs. 5,000/- as advance and obtained similar receipts from her. In pursuance of the said agreement, the 2nd defendant paid an amount of rs. 1,00,000/- on 18. 4. 1989, Rs. 70,000/- on 27. 4. 1989 and the balance consideration of rs. 2,42,000/- before the Sub-Registrar on 18. 5. 1989 at the time of registration of sale deed. The 6th defendant, the daughter-in-law of the 2nd defendant gave entire sale consideration to her father-in-law, the 2nd defendant. He got obtained the sale deed in her favour. The 3rd defendant paid rs. 16,000/- on 18. 4. 1989 and Rs. 50,000/- on 6. 5. 1989 by way of cheque on Vysya Bank. He paid the balance of sale consideration of rs. 35,000/- before the Sub-Registrar and obtained registered sale deed from the 1 st defendant on 11. 5. 1989 and he had been in possession and enjoyment of the same. The 4th defendant paid the balance of sale consideration of Rs. 68,500/- before the sub-Registrar and after receiving the full consideration, the 1st defendant executed a registered sale deed in her favour on 6. 5. 1989 in respect of the portion of the premises which was in his occupation as tenant and she had been in possession and enjoyment of the same since then.

(3.) ISSUES settled by the trial Court : 1. Whether the agreement of sale dated 10. 3. 1989 in favour of the defendants 2 to 5 is true ? 2. Whether the defendants are the bona fide purchasers for valuable consideration ? 3. Whether the oral agreement of sale dated 12. 3. 1989 in favour of the plaintiff is true, valid and binding on the defendants ? 4. Whether the plaintiffs are always ready and willing to perform their part of contract ? 5. Whether the plaintiffs are entitled for specific performance of oral agreement of sale dated 12. 3. 1989 ? 6. To what relief ?