Paragraph numbers below are the court’s original numbering, recovered from the source text.
9. It is also relevant to point out the stand of the parties as D reflected in their pleadings and evidence. In terms of Section 16(c) of the Specific Relief Act, 1963, it is incumbent on the party, who wants to enforce the specific performance of a contract, to aver and prove that he has performed or has always been ready and willing to perform the essential terms E of the contract. Explanation appended to this sub-section (c) makes it clear that if a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court. However, tile plaintiff must aver F performance of, or readiness and willingness to perform, the contract according to its true construction. It is seen from the pleadings that necessary averments have been made in terms of sub-section (c) of Section 16. On the side of the plaintiff, James Fadric was examined as PW-1. He explained the · G · urgency and the need to sell the property. He also explained . that the company had a cash crunch problem. No doubt, he also referred that the company was facing liquidity proceedings before the High Court of Bombay and necessary application had been filed before the Company Court at Bombay for H settlement of the scheme to avoid liquidation which we are not COROMANDEL INDAG PRODUCTS (P) LTD .. v. GARUDA CHIT & TRADING CO. P. LTD. [P. SATHASIVAM, J.] concerned. The fact remains that at the relevant time, Vendor/ Respondent-Company was in dire need of money for their commercial transactions and decided to sell the property in question, particularly, to meet the immediate need of their creditors. We have already adverted to the payment of Rs. 2 lakhs as advance on the date of execution of the agreement dated 28.08.1981. On 21.09.1981, a further sum of Rs. 5 lakhs was paid and by mutual consent, the time was extended to 30.09.1981. On 06.10.1981, another sum of Rs. 5 lakhs was advanced by the appellant-Company and the time for completion of the Sale Agreement was extended up to c 14.10.1981. Again, for the third time, that is on 19.12.1981, time was extended for the completion of the transaction up to 31, 12.1981 on payment of Rs.1, 10,000/-. As rightly pointed out by Shri K.K. Venugopal and Shri V. Giri, learned senior counsel appearing for the respondents, the payment of money in short intervals and also the extension of time for completion of the transaction within the prescribed period clearly show that both the partiS!S wanted to complete the transaction as early as possiblewithouHurther extension. Inasmuch as the Vendorwas in dire need of money at every occasion and the need for such short term extension clearly shows that the parties intended to treat the time as essence of the contract. It is also relevant to point out that Clause 7 of the Agreement, which we have already extracted, makes it clear that at any time of registration of the sale deed, the appellant shall pay a sum of Rs. 50 lakhs, after deducting the advance amounts already paid and the balance of Rs. 32 lakhs is to be paid after registration of the sale deed in three installments as mentioned above. This would also reveal the intention of the parties to treat the time as essence of the contract. From the various clauses in the Agreement for Sale which we have referred to, pleadings, evidence and the conduct of the parties, we hold that parties have agreed that the time is essence of the contract and the same has to be adhered to strictly. A Readiness and willingness:
10. Learned counsel for the respondents urged that several requests by the appellant-Company for various documents which are not provided in the terms of the Agreement show their B intention that they wanted to delay the proceedings. On the other hand, learned counsel appearing for the appellant- Company submitted that they were justified in asking for those documents in order to satisfy the title of the property. It is true that in the Agreement, it is stated that Vendor has to produce all the documents of title in their possession relating to the C property to the Purchaser for investigation relating to title. In Clause 10, there is a specific reference to the production of clearance certificate under Section 230-A of the Income-tax Act and obtain permission or sanction from any authorities that may be necessary for the purpose of sale of the property. It is true D that when the appellant-Company being a Purchaser investing a huge sum of Rs. 82 lakhs, they are entitled to clear all their doubts in respect of the title. In terms of Clause 6 of the Agreement, sale has to be completed on or before 05.09.1981 or within one week from the date uf furnishing the certificate E under Section 230-A of the Income-tax Act whichever is tater and upon payment of Rs. 48 takhs out of the agreed amount of Rs. 82 lakhs to the Vendor. Admittedly, the respondents produced Income-tax Clearance Certificate even on 09.09.1981. It is to be noted that only after production of l.T. F Clearance, the appellant-Company, vide letter dated 14.09.1981, addressed to Mr. K. S. Hari, General Manager of the Respondent-Company sought further particulars relating to mortgage on the Bank of India, arrears of urban land tax, property tax, exemption certificate from the urban land ceiling G authorities, encumbrance certificate, latest audited balance- sheet, list of creditors, solvency certificate, details of attachment and particulars about winding up proceedings alleging that they have not receivE!d the same to be forwarded to their advocates. The said letter is available as Annexure-P2. In pursuance of H the said letter, the respondents sent a reply on 15.09.1981 "by COROMANDEL INDAG PRODUCTS (P) LTD. v. GARUDA CHIT133 & TRADING CO. P LTD. [P SATHASIVAM, J.] hand delivery" to the appellant-Company specifically stating that after being fully satisfied about the title, the appellant- Company prepared the draft sale deed and after a combined discussion at their office on 07.09.1981, the same was approved and thereafter, the respondents obtained necessary certificate dated 09.09.1981 under Section 230-A of the Income-tax Act and the same was also intimated to them. In the same letter, it was pointed out that as per the Agreement of Sale and consensus arrived at between the parties, the appellant-Company has to complete the sale within one week from 09.09.1981. It was also pointed out that in spite of several c promises and assurances, the appellant-Company could not fulfill their promise and also that because of this delay, they are suffering heavy loss and the very object of sale is being defeated. It was also pointed out that so far they have spent heavy sums and satisfied all their requirements and finally requested to do the needful immediately for completion of the sale transaction. The said letter is marked as Annexure-P3.
11. It is not in dispute, more _particularly, from the evidence of PW-1 that the legal advisor of the appellant-Company scrutinized the title deeds before entering into Agreement. They also visited the site along with their lawyers and finally after satisfying all the materials, their lawyers gave opinion with regard to the clear title of the property. As stated earlier, only after getting their clearance, draft sale deed was prepared to enable the respondents to get certificate under Section 230-A of the Income-tax Act. Curiously, in his evidence, P.W.1 has stated that the matter got delayed only due to the non- production of exemption certificate from urban land ceiling authorities. It is true that as per Clause 3 of the Agreement, respondents have to produce all the documents pertaining to the title of the suit property. We have already extracted Clause 4 of the Agreement which speaks about the approval of title by the appellant's advocate.
12. It is further seen that after payment of Rs. 2 lakhs as A advance on thE~ date of execution of the Agreement, monies to the extent of Rs. 11, 10,000/- were paid on various dates in order to satisfy and comply with all statutory requirements. It is relevant to point out in the Agreement that there is no specific reference to the production of an order from the competent B authority under the Urban Land Ceiling Act with regard to exemption. From the materials placed, we are satisfied that the appellant-Company was not justified in calling for several documents when admittedly, their lawyers perused all the relevant documents and on their advise, draft safe deed was c prepared and that too after proper inspection of the site and building. In other words, production of clearance certificate from the competent authority under the Urban Land Ceiling Act was not specifically intended at any point of time. We are satisfied that as rightly argued by learned senior counsel for the 0 respondents that the information sought for by the appellant- Company was only to delay the transaction and it was not always ready and willing to perform in terms of Section 16(c) of the Specific Relief Act, 1963. Conduct of the parties:
13. We have already stated that the Agreement for Sale includes land and building. The building stands on more than 500 sq. mts. of land in addition to the plinth area. The building is a five-storeyed one for which building permission had been F obtained as per the provisions of Town Planning Authority and as per the orders of the Corporation of Madras. It is also seen that the building was under construction at the time the Urban Land (Ceiling and Regulation) Ordinance, 1976 was passed. Section 3(h) of the Act defines "land appurtenant" which reads G thus: "(h) "land appurtenant", in relation to any building means an extent of five hundred square metres contiguous to the land occupied by such building and includes,- (i) in the case of any building constructed before or under COROMANDEL INDAG PRODUCTS (P) LTD. v. GARUDA. CHIT & TRADING CO. P. LTD. [P. SATHASIVAM, J.] construction on. the commencement of this Act with a dwelling unit therein, or (ii) in the case of any building proposed to be constructed with a dwelling unit therein and in respect of which the plan for such building has been approved by the appropriate authority before the commencement of this Act, an additional extent not exceeding five hundred square metres of land, if any, contiguous to the said extent of five hundred square metres of land: Pr~vided that in relation to a multi-storeyed building, the extent of land contiguous to the land occupied by such multi-storeyed building permitted according to the plan approved by the appropriate authority shall be deemed to be the land appurtenant;" It is not in dispute that the plan had been approved by the Competent Authority. c
14. As rightly pointed out by learned senior counsel for the respondents, the proviso to the definition states that in the case of multi-storeyed building, the extent of land contiguous to the land occupied by such multi-storeyed building permitted according to the plan approved by the appropriate authority shall be deemed to be the land appurtenant. In view of the . same, the entirety of the land in and around the five-storeyed building would come outside the vacant land under Section 3 (p) of the Act which reads as under: "(p) "Vacant land" means land, not being land mainly used for the purpose of agriculture, in an urban agglomeration but does not include- (i) ….. (ii) in an area where there are building regulations- (2011] 12 S.C.R. (a) the land occupied by any building constructed before, or under construction on the commencement of this Act with the approval of the appropriate authority and the land appurtenant to such building ………. " 8 It is clear that in the case of multi-storeyed buildi~g which was under construction at the date of commencement of the Act with building plans duly approved, no part of the land attached to the building would come within the scope of the Act. By refusing to pay the balance consideration to purchase the property by C getting the sale deed registered, the appellant-Company has not only committed a breach of the Agreement but also showed that it was not ready and willing to complete the Agreement. In those circumstances, the argument assailing the judgment of the Division Bench of the High Court is liable to be rejected. D About title inspection by the lawyers:
15. It is relevant to narrate the actual question and answers by P .W.1 during cross-examination which reads as under: "Q: Did you inspect the title deeds through your lawyer? Yes. Did you examine the title deeds before entering into the agreement? We did get the title deeds examined by the lawyer. I asked you did you get any legal opinion from your lawyer prior to entering into the agreement. Yes. HavE1 you got the legal opinion? Not in writing asked him to examine the title deed and let us know whether the title deed is in order. COROMANDEL INDAG PRODUCTS (P) LTD. v. GARUDA 137 CHIT & TRADING CO. P. LTD. [P. SATHASIVAM, J.] What did he say? He said, the title deed normally could be in order, but he had asked for certain other information such · as encumbrance certificates, Urban Land Ceiling Clearance from the Government of India and Government of Tamil Nadu, etc. Your office prepared any report on title. My legal department always traces title, it is good and competent to peruse the title deeds. c Your legal department is your staff? Yes. Was any report on title obtained from the lawyer? Yes. When was that obtained? Somewhere between 20th to 28.8.1981 Have you produced the legal opinion before this Court? No, it is internal affair and we felt it is not necessary. Have ·you got the opinion? I am not sure, I am able to find out. Did they produce all documents of title for approval? Yes. They fulfilled clause No.3 Clause No.4 that also the defendant did not? No. c What do you mean by saying no? Because they have not provided encumbrance to the title deeds, which is;part of the title deed, they had applied for Urban Land Ceiling exemption, which they have not disclosed. Is there any mention about Urban Land Ceiling Clearance? It is not mentioned in the agreement, but I would like to and it is obligatory on the part of the defendant to go through the implications of Section 6 of the Urban Land Ceiling Act. According to you, unless they do not furnish details of obtaining Urban Land Ceiling clearance, you are not prepared to purchase? No. This is the condition of the negotiation. The vendor has always been acknowledging to produce the documents required by us before we put through the sale. This is also seen in all stamped receipts for which monies were paid even after 230-A clearance obtained."
16. It is also brought to our notice that the State F Government in 1995 nearly 10 years after the filing of the suit, claimed 872 sq.mts. as being the excess land above the ceiling limit for which the appellant-Company had filed a writ petition being No. 6312 of 2000 before the High Court. Though the filing of the said writ petition and the ultimate order on G 04.08.2005 were not brought to our notice by filing appropriate petition inasmuch as the said fact was not in dispute, we referred to the said decision of the High Court rendered in Writ Petition No. 6312 of 2000. That writ petition came to be filed by the respondent Company for issuance of a writ of mandamus to forebear the State and the competent authority COROMANDEL INDAG PRODUCTS (P) LTD. v. GARUDA CHIT & TRADING CO. P. LTD. [P. SATHASIVAM, J.] under the Urban Land Ceiling from enforcing the provisions of A the Act which has been repealed by Tamil Nadu Act No. 20 of 1999 w.e.f. 16.06.1999 insofar as the land of the petitioner therein (respondents herein at Door No. 46, Cathedral Road, · Chennai in R.S. No. 1238/9 Mylapore, Village) is concerned.
17. It is true that despite the fact that there was no provision in the Act laying down the process for seeking an exemption from its operation, the respondent-Company wrote to the Deputy Secretary, Revenue Department, Government of Tamil Nadu on 26.12.1979 seeking such exemption. As there was no response, as rightly pointed out, it was understood that as the proviso to Section 3 applies to the land and no further exemption was needed. It is relevant to point out that the appellant-Company made further applications on behalf of the respondents but to no avail. The entire land is in the enjoyment and possession of the respondent-Company and no part of the land has been taken over by the Government.
18. In the light of the above discussion, we are unable to agree with the claim of the appellant-Company, on the other hand we are in entire agreement with the conclusion arrived at by the Division Bench of the High Court. Consequently, the appeal fails and the same is dismissed. However, parties are directed to bear their own costs. D.G. Appeal dismissed.