M/S.AMARKANTAK ORCHARDS vs P.A.JOSEPH(died)

AS(MD) No. 265 of 2008
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 23.09.2026
PRONOUNCED ON : 13.11.2026
CORAM
THE HON'BLE MR. JUSTICE M. DHANDAPANI
AND
THE HON'BLE MR. JUSTICE N. DILIP KUMAR
AS(MD) No. 265 of 2008
CNR:{HCMD010000282008}
1. M/s.Amarkantak Orchards Pvt.Ltd., & Amarkantak
Farms Pvt Ltd., through its Director Sri.Sundeep
Maheswari,
2. Mr.Sundeep Maheswari
3. Ravi Dhivedi (died)
4. A.V.Balan (died)
5.R.Selvakumar
6.R.Revathi
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AS(MD) No. 265 of 2008
7.T.Ramasethu
8.M/S.Jenisan Prop Care Private Limited,
Reg.No.70846, Door No.43P/2, G3 Subam Envlave,
Thiruvananthapuram Road,
Palayamkottai, Tirunelveli District. ..Appellants
(Appellants 5 to 8 are impleaded vide Court order
dated 13.11.2026)
Vs
1. P.A. Joseph (died)
2. J.Jameer
3. S.Ahamed Mansoor
4. J.Noor Nisha
5. Achyuth Tony Joseph,
6. Twinkle Joseph .. Respondents
(Respondents 5 and 6 are brought on record as Lrs of the deceased first
respondent vide Court order dated 11.11.2025)
(sixth respondent is represented by her brother, namely, Achyuth Tony
Joseph/the fifth respondent, vide Court order dated 13.11.2026)
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AS(MD) No. 265 of 2008
For Appellant(s) : Mr.Vikram Veerasamy for
Mr.Muthukamatchi V
Mr.S.Parthasaathy Senior Counsel for
Mr.M.P.Senthil – impleadedappellant
For Respondents(s) :Mr.V.Raghavachari
Senior Counsel for
Mr.R. Suriya Narayanan for R5 & R6
JUDGMENT
N. DILIP KUMAR J.
The present first appeal is filed by the defendants 1 to 4 against the
judgment and decree dated 29.04.2008 passed by the learned Additional
District Judge, Theni, thereby granting the relief of specific performance in
favour of the original plaintiff, Mr. P.A. Joseph along with costs.
2. The following are the limited facts: -
2.1. The suit schedule properties originally belonged to the first
defendant. Through their authorised power agent, namely, A.V. Balan, the
land owner entered into an agreement of sale with the original plaintiff, P.A.
Joseph, on 21.04.2005.
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AS(MD) No. 265 of 2008
2.2. The Tamil version of the agreement of sale was marked as Exhibit
A1, while its English version was marked as Exhibit A2.
2.3. The execution of the agreement as well as the signatures and
contents thereof are admitted by both the parties. The properties described in
the agreement of sale are situated across five villages, comprising a total
extent of more than 300 acres. The agreed sale consideration was calculated
at the rate of Rs.16,250/- per acre. The time stipulated for completion of the
sale was 22.07.2005.
2.4. On the date of execution of the agreement of sale, i.e.,
21.04.2005, the plaintiff paid an advance amount of Rs.10,00,001/- in
accordance with the terms of the agreement; subsequently, a second
instalment of Rs.20,00,000/- was paid in cash to the fourth defendant on
05.05.2005. An endorsement acknowledging the receipt of the said amount
was also made in the agreement of sale, which was marked as Exhibit A3;
upon receipt of the second instalment, the fourth defendant handed over
copies of all the documents relating to the suit schedule properties.
3. Following the above-mentioned admitted facts, the plaintiff further
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AS(MD) No. 265 of 2008
contended the following:
3.1. The plaintiff took possession of the suit properties on 05.05.2005
and made arrangements to survey the properties at his own expense; during
the survey, the plaintiff found that only an extent of 205.15 acres of land was
available, as against the total extent of more than 300 acres mentioned in the
agreement of sale; thus, there was a vast discrepancy between the extent of
the properties described in the agreement and the actual extent available on
the ground.
3.2. The plaintiff contended that such a substantial shortage in the
extent of the properties made it impossible to complete the sale transaction
in respect of the entire extent originally agreed upon; the survey and
measurement were completed on 23.06.2005; despite repeated requests, the
landowners did not come forward to resolve the discrepancy regarding the
extent of the properties or to complete the sale transaction; when the sale
consideration is calculated at the agreed rate of Rs.16,250/- per acre for the
available extent of 205.15 acres, the total sale consideration will be
Rs.33,33,688/- and it would be substantially lower than the consideration
originally agreed upon for the entire extent; and after giving credit to the
amounts already paid i.e., a sum of Rs.30,00,001/- only a smaller amount
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AS(MD) No. 265 of 2008
remains, which the plaintiff was always ready and willing to pay.
3.3. The plaintiff asserted that he was always ready and willing to pay
the balance amount and complete the sale transaction; the fourth defendant
taking advantage of the recitals contained in the agreement of sale,
attempted to measure and demarcate the suit properties.
3.4. Plaintiff had issued a notice dated 08.02.2006, calling upon the
fourth defendant to complete the sale transaction.
3.5. Since the fourth defendant did not come forward to execute the
sale deed, a legal notice was issued (delivered on 01.07.2006). The fourth
defendant sent a reply denying the plaintiff's entitlement to seek specific
performance primarily on the ground that the time stipulated under the
agreement had already lapsed; the plaintiff also came to know that the
landowners had sold portions of the suit properties in favour of defendants 5
to 7, even during the subsistence of the agreement of sale.
3.6. The plaintiff claimed that he had taken possession of the
properties and had made improvements therein by planting several hundred
trees; contending that the subsequent sale in favour of defendants 5 to 7 was
not binding upon him, the plaintiff instituted the suit seeking specific
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AS(MD) No. 265 of 2008
performance of the agreement of sale by expressing his readiness and
willingness to purchase the available extent of 205.15 acres by paying the
proportionate balance sale consideration.
4. The defendants 1 to 4 admitted the execution of the agreement of
sale and the receipt of Rs.10,00,001/- on 21.04.2005 and Rs.20,00,000/- on
05.05.2005. They did not dispute the execution of Exhibits A1, A2 and A3.
4.1. The defendants 1 to 4 however, specifically disputed the
plaintiff's claim that a survey had been conducted.
4.2. The defendants specifically denied the allegation that the plaintiff
had ever requested them to execute the sale deed. They also disputed the
amount of balance i.e., Rs.3,33,688/- or Rs.3,39,375/- as had been claimed
by the plaintiff. They also disputed the alleged shortage of 94.5 acres and
contended that the plaintiff's claim regarding the actual extent available was
false.
4.3. The defendants further disputed the alleged notice dated
08.02.2006 and denied the claim that the plaintiff had called upon them to
complete the sale transaction. They contended that the plaintiff was never
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AS(MD) No. 265 of 2008
ready and willing to perform his part of the contract and since time was the
essence of the contract and the stipulated date for completion of the sale
transaction, viz., 22.07.2005, had long expired, the agreement of sale had
become unenforceable and stood automatically cancelled.
4.4. The defendants further contended that the suit properties had
already been sold to defendants 5 to 7 under various sale deeds and that
possession had also been handed over to the subsequent purchasers. They
specifically denied that possession had ever been handed over to the plaintiff
and that he had made improvements in the suit properties. They also
contended that the plaintiff had not approached the Court with clean hands.
4.5. According to them, the plaintiff had failed to establish his
readiness and willingness to pay the entire sale consideration of
Rs.48,75,000/- stipulated for the total extent of more than 300 acres.
4.6. They further contended that the plaintiff could not seek specific
performance in respect of some portion of the properties covered under the
agreement of sale, particularly when he had failed to perform his contractual
obligations within the stipulated period.
4.7. On these grounds, the defendants sought dismissal of the suit.
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AS(MD) No. 265 of 2008
5. The defendants 5 to 7, being purchasers subsequent to the sale
agreement, disputed the agreement of sale between the plaintiff and
defendants 1 to 4 and also denied that possession had been handed over to
the plaintiff.
5.1. They specifically pleaded that they had purchased the properties
for valuable consideration and that at the time of purchase, they were not
aware of the existence of the agreement of sale in favour of the plaintiff and
thus, they were bona fide purchasers for value of the property and had taken
possession of the properties, pursuant to their respective purchase deeds.
They relied upon the mutation of the revenue records in their names and the
payment of applicable taxes to the revenue authorities to establish their
possession and enjoyment.
5.2. They further contended that portions of the properties had
subsequently been sold to another third party, namely, RRB Energy India
Private Limited.The said purchaser had taken possession of the properties
for the purpose of installing wind turbines in the properties.
5.3. On these grounds, defendants 5 to 7 contended that they were
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AS(MD) No. 265 of 2008
bona fide purchasers for value and that the plaintiff was not entitled to the
discretionary relief of specific performance against them.
6. Before the trial Court, the original plaintiff, P.A. Joseph, examined
himself as P.W.1. He also examined the author of the survey list, namely,
P.S.M. Murugan, as P.W.2. On the side of the plaintiff, as many as eight
documents were marked as exhibits. The Tamil and English versions of the
agreement of sale dated 21.04.2005 were marked as Exhibits A1 and A2
respectively. The endorsement evidencing payment of the second instalment
of Rs.20,00,000/- was marked as Exhibit A3. The encumbrance certificate
and Chitta copy were marked as Exhibits A4 and A5. The list containing the
particulars of the lands was marked as Exhibit A6. The legal notice issued
by the plaintiff and the reply notice issued by the fourth defendant were also
marked as exhibits A7 and A8 respectively.
7. On the side of defendants 1 to 4, the fourth defendant, Balan was
examined as D.W.1. On the side of the subsequent purchasers, the fifth
defendant, was examined as D.W.2. The sale deeds executed in favour of
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AS(MD) No. 265 of 2008
defendants 5 to 7 were marked as Exhibits B1 to B6. The patta and other
revenue records standing in their names were marked as Exhibits B7 to B9.
The tax receipts and other documents evidencing payment of taxes by the
defendants 5 to 7 were marked as Exhibits B.10 to B.12 respectively.
8. Accordingly, the parties went to trial and the learned trial Judge
framed the following issues:
(i) Whether possession of the suit properties was handed over to
the plaintiff pursuant to the agreement of sale executed between the
plaintiff and the authorised agent of the first defendant in respect of
the suit properties?
(ii) Whether only a lesser extent of land was available in the suit
properties upon survey, as claimed by the plaintiff?
(iii) Whether time was the essence of the contract, having regard
to the date stipulated in the agreement of sale executed between the
parties?
(iv) Whether the plaintiff did not come forward to get the sale
deed executed?
(v) Whether the subsequent sale of portions of the suit properties
by defendants 1 to 3 in favour of defendants 5 to 7 was valid and
whether defendants 5 to 7 were bona fide purchasers for value?
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AS(MD) No. 265 of 2008
(vi) Whether the plaintiff was entitled to the relief of specific
performance?
(vii) What other relief, the plaintiff is entitled to?
9. The learned trial Judge concluded that as per the terms of the
agreement of sale, upon payment of the second instalment of Rs.20,00,000/-
on 05.05.2005, the agreement holder was entitled to take possession of the
properties; without taking possession, the agreement holder could not have
undertaken the survey and measurement of the properties to ascertain the
actual extent available; no separate endorsement acknowledging the handing
over of possession was necessary.
10. The learned Judge also concluded that the physical possession was
handed over to the plaintiff. The learned trial Judge further took note of the
fact that the landowners had handed over the encumbrance certificates and
other relevant documents, which according to the Court supported the
plaintiff's case, that possession had been handed over for the purpose of
surveying and measuring the properties.
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AS(MD) No. 265 of 2008
11. In respect of the second issue, the learned trial Judge relied upon
the evidence of P.W.2 and concluded that as against the total extent of more
than 300 acres mentioned in Exhibits A1 and A2, only a lesser extent than
that mentioned in the agreement of sale, i.e., approximately 205.15 acres
was alone actually available for alienation and answered the second issue.
12. With regard to the third issue, the learned trial Judge held that the
plaintiff had repeatedly requested the defendants to complete the sale
transaction, as evidenced by the legal notice marked in the suit. The learned
Judge also considered the reply notice, Exhibit A8, wherein reference was
made to the repeated requests made by the plaintiff seeking extension of
time for registration of the sale deed. Such a recital, according to the Trial
Judge would indicate that the defendants themselves had not treated the
stipulated date as binding and so time was not the essence of the contract.
13. The learned trial Judge further observed that the fourth defendant
had not issued any notice terminating the agreement of sale or intimating the
forfeiture of the advance amount. In the absence of any such
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AS(MD) No. 265 of 2008
communication, the learned Judge concluded that time was not the essence
of the contract.
14. With regard to the fifth issue regarding the claim of the defendants
5 to 7 that they are the bona fide purchasers of the property for value, the
learned trial Judge noted that the original landowners, namely, defendants 1
to 4, were involved in an exchange of legal notices with the plaintiff and
were aware of the agreement of sale. He did not test as to whether the
defendants 5 to 7 are the bona fide purchasers of the property for the value
and held that the alienation was made by D1 to D4 in favour of D5 to D7 is
not bona fide.
15. With regard to the fourth and sixth issues as to whether defendant
did not come forward and is the plaintiff entitled for the relief of specific
performance, the learned trial Judge concluded that the plaintiff had already
paid a substantial portion of the sale consideration, viz., Rs.30,00,000/-, and
that only the proportionate balance sale consideration i.e., a sum of
Rs.3,33,687/-, remained payable in respect of the available extent of land.
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AS(MD) No. 265 of 2008
15.1. The learned Judge also relied upon the plaintiff's legal notice,
wherein he had expressed his willingness to pay the balance sale
consideration and complete the sale transaction and further averment of the
plaintiff that he would be available before the Sub-Registrar on 10.06.2006
for the purpose of completing the registration.
15.2 The learned trial Judge therefore held that the plaintiff was
willing to purchase the available extent of approximately 205.15 acres by
paying the proportionate balance sale consideration and was consequently
entitled to specific performance of the agreement of sale to that extent.
15.3. The learned Judge further held that the plaintiff had approached
the Court with clean hands and had established his continuous readiness and
willingness to perform his part of the contract.
16. Accordingly, the suit was decreed by granting the relief of specific
performance.
17. Challenging the above judgment and decree, the present Appeal
Suit is filed. During the pendency of the appeal, the original plaintiff, P.A.
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AS(MD) No. 265 of 2008
Joseph, died and his son and daughter were brought on record as his legal
representatives as respondents 5 and 6. The subsequent purchasers, namely,
defendants 5 to 7, have been arrayed as respondents 2 to 4 in the present
appeal. It is stated that the appellants 3 and 4 died and because of the
surviving legal right to sue, available with the appellants 1 and 2, the appeal
is being continued only by the appellants 1 and 2.
18. The purchasers pending this appeal suit have also been allowed to
be brought on record in this appeal suit and they are arrayed as appellants 5
to 7.
19. For the sake of brevity and convenience the parties are referred by
their rank in the trial court.
th
20. After the filing of this appeal suit on 25 July 2008, under Ex.A9,
brought on record as an additional document in this Appeal Suit, both
M/s.Amarkantak Orchards Pvt. Ltd., and Amarkantak Farms Pvt. Ltd., have
been struck off from the Register of Companies and these companies’ stand
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AS(MD) No. 265 of 2008
dissolved.
21. Ex. A.9 is the final Form STK-7 intimating the striking
off/dissolution issued by the Registrar of Companies, Madhya Pradesh,
Gwalior under the Ministry of Corporate Affairs of the Government of India
th
vide proceedings dated 9 June 2017 in ROC-G248(5)/2017/2915, issued
under Section 248 (5) of the Companies Act (18 of 2013) read with Rule 9
of the Companies (Removal of Names of Companies from the Register of
Companies) Rules, 2016 is produced before this Court as Ex. A.9. It is a
public document. It is not disputed by the defendants 1 & 2.
22. In the said document at Sl.No.233, the name of M/s.Amarkantak
Farms Pvt. Ltd., finds place and similarly in Sl.No.235, the name of
M/s.Amarkantak Orchards Pvt. Ltd., finds place. Thus, it is demonstrated
beyond doubt that both these companies’ have been struck off by the
Registrar of Companies in exercise of his powers under Section 248 (5) of
the Companies Act, 18 of 2013.
23. At the outset, on the above admitted legal and factual position, the
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AS(MD) No. 265 of 2008
plaintiff has raised a preliminary objection to the continuation of the Appeal
Suit filed by the first defendant, M/s.Amarkantak Orchards Pvt. Ltd., and
Amarkantak Farms Pvt. Ltd.
24. Mr. V. Raghavachari, learned Senior Counsel appearing for the
plaintiff, argues that once a company is struck off and dissolved by the
Registrar of Companies, its legal existence terminates. Having lost its status
as an independent juridical personality, the first defendant ceases to exist in
the eyes of the law and cannot continue to maintain this Appeal Suit .
25. He would also point out that the second defendant is only
impleaded in his capacity as the Director of the first defendant company.
The second defendant is having no independent legal right to contest the
present Appeal Suit and therefore, he cannot independently continue with
this Appeal Suit.
26. He would also argue that the defendants 3 and 4 are only the
authorized representatives and authorized signatories, who were impleaded
only in their capacity as representatives of the first defendant and they have
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AS(MD) No. 265 of 2008
also died. Thus it is only the first defendant that could continue the litigation
and once it is struck off and dissolved, the present Appeal Suit cannot be
continued and it is liable to be dismissed. The interest of the newly
impleaded appellants in this Appeal Suit cannot survive beyond what is
st
available to the 1 defendant.
27. He would contend that the Appeal Suit is no longer maintainable
and in this regard he seeks to place reliance upon the Division Bench
Judgment of the Madras High Court in Income Tax Officer vs Pandian
th
Anbalagan in WA No. 2506 of 2024 dated 5 November 2024 wherein, it is
held that it is not open to a Director of the defaulted company whose name is
struck off from the Registrar of companies to seek any relief and it can be
maintained only after revival of the said company.
28. He would also place reliance on the judgment of National
Company Law Tribunal in Panthera Developers Pvt. Ltd., vs. Sankalp
th
Buildwell Pvt. Ltd., & others in company appeal (AT) 55 of 2023 dated 15
May 2023 to contend that the scope of Section 245 does not cover
oppression and mismanagement and they cannot be brought within the
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AS(MD) No. 265 of 2008
purview of a ‘discharge of obligations’ as mentioned under Section 250 of
the Act 18 of 2013.
29. The learned Senior Counsel would also argue that upon the
dissolution of the companies, the non-disposed properties will be vested with
the Government and seeks reference to the “ Doctrine of Bona Vacantia ’. In
this regard, he refers to the judgment of the Supreme Court of India in AIR
1969 Supreme Court 843 in the case of Peirce Leslie Vs Miss Violet .
30. He would also contend that only after the revival of the company,
by initiating the proceeding under Section 252 of Act 18 of 2013, can the
Appeal Suit be continued; without such efforts, the dissolved and struck off
company cannot continue with the Appeal Suit. He would therefore
primarily contend that this Appeal Suit has to be dismissed on this
preliminary plea itself.
31. In reply, Mr.Vikram Veerasamy learned counsel appearing for the
first defendant would argue that before passing an order striking off the first
defendant from the Register of Companies, the Registrar should have
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recorded specification that sufficient provision has been made for the
realisation of all the amounts due to the Companies and for the payment or
discharge of the liability and obligation, within a reasonable time. He would
contend that the pendency of this Appeal Suit had not been brought to the
notice of the Registrar, while he passed the proceedings marked as Ex.A9
and therefore this cannot prevent the first defendant from continuing with
the Appeal Suit.
32.He would try to draw inference from Section 250 of the Act 18 of
2013 and argued that the provision was not available in the old Companies
Act, 1956 and this new Section 250 would establish that the striking off may
only terminate the ability of Register/incorporated Company to carry on as a
going concern, but such striking off/dissolution does not operate to
extinguish the subsisting rights, assets, liabilities and obligations which
require realisation, enforcement or discharge.
33. He would further argue that the striking off a company does not
mean a civil death and unlike the abatement of the proceedings upon the
death of the natural person, the striking off a company will not amount to
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AS(MD) No. 265 of 2008
absolute death and it is always permissible for the company to be resurrected
by initiating proceeding under 252 and even otherwise this striking off, will
have no impairment on the liabilities and obligations of the dissolved
company.
34. He would thus argue that it is only the ordinary business
operations of the company that this prohibited and it does not make the
company ineligible to proceed with a litigation or claim qua its rights or civil
liabilities.
35. The learned counsel would further submit that the liabilities or
obligations mentioned under Section 250 does not merely indicate monetary
liabilities, but also subsisting legal and contractual obligations incurred by
the company; and obligation in its general sense is synonymous to duty and
he would therefore contend that there are duties and responsibilities in
existence with the first defendant company towards the original defendants 5
to 7, to whom the first defendant company had subsequently alienated the
suit schedule properties and therefore the companies are bound to protect the
interest of the subsequent purchasers as the rights and liabilities of the first
defendant companies as a seller, is codified under Section 55 of Transfer of
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AS(MD) No. 265 of 2008
Property Act.
36. The preliminary issue, therefore, is whether the present Appeal
Suit can be continued by the first defendant, despite the proceedings of the
Registrar of Companies of Madhya Pradesh, striking off/dissolving the first
defendant companies?
37. We shall proceed to determine the preliminary issues first, as they
go to the root of the matter. The Tamil and English version of the sale
agreement, which is the subject matter of this Appeal Suit are marked as
Ex.A1 and Ex.A2.
38. The Tamil version shows that it is executed by A.V.Balan as the
authorized power agent of M/s.Amarkantak Farms Private Ltd., through its
st
director Mr. Sundeep Maheswari on 21 April 2005 in favour of the original
plaintiff P.A. Joseph. The English version shows it is executed by A.V.Balan
as the authorized power agent as M/s.Amarkantak Farms Private Ltd., and
M/s. Amarkantak Archards Ltd through its director Mr. Sundeep Maheswari
st
on 21 April 2005 in favour of the original plaintiff P.A. Joseph.
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AS(MD) No. 265 of 2008
39. The plaintiff has strangely impleaded, these two different private
limited companies as a single first defendant. He had not even indicated,
which of the schedule of properties, belong to which of these private limited
companies and he had also not explained the discrepancy between the
English and Tamil version of the sale agreement, regarding the mentioning
of one private limited company in the Tamil version and the mentioning of
two private limited companies in the English version.
40. The sale agreement is executed by A.V.Balan as the authorized
power agent of the first defendant companies. The suit schedule properties
belong to the first defendant companies is not in dispute. This assertion
made in the plaint is not even controverted in the written statement filed by
the defendants 1 to 4. We can therefore, at least, safely conclude that either
one of these defendant companies shown as the first defendant is the original
owner of the property and it had entered into an agreement of sale with the
original plaintiff through its authorised power of attorney holder.
41. As the owner of the property, it is only the first defendant, which
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AS(MD) No. 265 of 2008
is entitled to contest this Appeal Suit and in the absence of the first
defendant, there is no independent right or liability or in a sense “any
obligation” with the second defendant to be discharged in the subject suit.
42. With regard to the preliminary issue, it is necessary to consider the
impact of the striking off/dissolvingof a Registered/incorporated company
under the proceedings of the Registrar of companies.
43. The Companies Act (18 of 2013) recognises the requirement of
incorporation of the company which leads to the registration of the company
in the register maintained by the Registrar of companies. Incorporation and
effect of registration are codified under Sections 7 and 9 of the Companies
Act (18 of 2013). They are extracted here under:-
“Incorporation of company (1) There shall be filed with
the Registrar within whose jurisdiction the registered
office of a company is proposed to be situated, the
following documents and information for registration,
namely:-
(a) the memorandum and articles of the company duly
signed by all the subscribers to the memorandum in
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such manner as may be prescribed;
(b) a declaration in the prescribed from by an advocate, a
chartered accountant, cost accountant or company
secretary in practice, who is in the formation of the
company, that all the person named in the articles as a
director, manager or secretary of the company, that all
the requirements of this Act and the rules made
thereunder in respect of registration and matters
precedent or incidental thereto have been complied
with;
1
(c) [a declaration] from each of the subscribers to the
memorandum and from persons named as the first
directors, if any, in the articles that he is not convicted
of any offence in connection with the promotion,
formation or management of any company, or that he
has not been found guilty of any fraud or misfeasance or
of any breach of duty to any company under this Act or
any previous company law during the preceding five
years and that all the documents filed with the Registrar
for registration of the company contain information that
is correct and complete and true to the best of his
knowledge and belief;
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AS(MD) No. 265 of 2008
(d) the address for correspondence till its registered office
is established;
(e) the particulars of name, including surname or family
name, residential address, nationality and such other
particulars of every subscriber to the memorandum
along with proof of identity, as may be prescribed, and
in the case of a subscriber being a body corporate, such
particulars as may be prescribed;
(f) the particulars of the persons mentioned in the articles
as the first directors of the company, their names,
including surnames or family names, the Director
Identification Number, residential address, nationality
and such other particulars including proof of identity as
may be prescribed; and
(g) the particulars of the interests of the persons mentioned
in the articles as the first directors of the company in
other firms or bodies corporate along with their consent
to act as directors of the company in such form and
manner as may be prescribed.
(2) The Registrar on the basis of documents and
information filed under sub-section (1) shall register all
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the documents and information referred to in that sub-
section in the register and issue a certificate of
incorporation in the prescribed form to the effect that
the proposed company is incorporated under this Act.
(3) On and from the date mentioned in the certificate of
incorporation issued under sub-section (2), the
Registrar shall allot to the company a corporate identity
number, which shall be a distinct identity for the
company and which shall also be included in the
certificate.”
“ 9. Effect of registration.- From the date of
incorporation mentioned in the certificate of
incorporation, such subscribers to the memorandum
and all other persons, as may, from time to time,
become members of the company, shall be a body
corporate by the name contained in the memorandum,
capable of exercising all the functions of an
incorporated company under this Act and having
4
perpetual succession [] with power to acquire, hold *
and dispose of property, both movable and immovable,
tangible and intangible, to contract and to sue and be
sued, by the said name.”
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AS(MD) No. 265 of 2008
44. Any company has an independent juristic personality. The suit
schedule properties vest with the first defendant. The availability of title
with the first defendant is also evident from Ex.B1 to B6 that had been
executed by the first defendant through their registered power of attorney
holder in favour of defendant 5, 6 and 7.
45. Under the Central Act 18 of 2013, a Registered/incorporated
company, for certain infirmities can be struck off / dissolved by the
proceedings of the Registrar of companies. This is provided under Chapter
XVIII Section 248 of the Central Act 18 of 2013 and it is extracted here
under:
CHAPTER XVIII
REMOVAL OF NAMES OF COMPANIES FROM
THE REGISTER OF COMPANIES
Power of Registrar to remove name of company
from register of companies.- (1) Where the Registrar
has reasonable cause to believe that-
(a) a company has failed to commence its
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AS(MD) No. 265 of 2008
1
business within one year of its incorporation; [or]
2
[]*
(c) a company is not carrying on any business or
operation for a period of two immediately preceding
financial years and has not made any application
within such period for obtaining the status of a
3
dormant company under [section 455; or]
[(d) the subscribers to the memorandum have
not paid the subscription which they had undertaken to
pay at the time of incorporation of a company and a
declaration to this effect has not been filed within one
hundred and eighty days of its incorporation under
sub-section (1) of section 10-A; or
(e) the company is not carrying on any business
or operations, as revealed after the physical
verification carried out under sub-section (9) of
section 12,] he shall send a notice to the company and
all the directors of the company, of his intention to
remove the name of the company from the register of
companies and requesting them to send their
representations along with copies of the relevant
documents, if any, within a period of thirty days from
the date of the notice.
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AS(MD) No. 265 of 2008
(2) Without prejudice to the provisions of sub-
section (1), a company may, after extinguishing all its
liabilities, by a special resolution or consent of
seventy-five per cent. members in terms of paid-up
share capital, file an application in the prescribed
manner to the Registrar for removing the name of the
company from the register of companies on all or any
of the grounds specified in sub-section (1) and the
Registrar shall, on receipt of such application, cause a
public notice to be issued in the prescribed manner:
Provided that in the case of a company
regulated under a special Act approval of the
regulatory body constituted or established under that
Act shall also be obtained and enclosed with the
application.
3) Nothing in sub-section (2) shall apply to a
company registered under Section 8.
(4) A notice issued under sub-section (1) or sub-
section (2) shall be published in the prescribed manner
and also in the Official Gazette for the information of
the general public.
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AS(MD) No. 265 of 2008
(5) At the expiry of the time mentioned in the
notice, the Registrar may, unless cause to the contrary
is shown by the company, strike off its name from the
register of companies, and shall publish notice thereof
in the Official Gazette, and on the publication in the
Official Gazette of this notice, the company shall stand
dissolved.
(6) The Registrar, before passing an order under
sub-section (5), shall satisfy himself that sufficient
provision has been made for the realisation of all
amount due to the company and for the payment or
discharge of its liabilities and obligations by the
company within a reasonable time and, if necessary,
obtain necessary undertakings from the managing
director, director or other persons in charge of the
management of the company:
Provided that notwithstanding the undertakings
referred to in this sub-section, the assets of the
company shall be made available for the payment or
discharge of all its liabilities and obligations even after
the date of the order removing the name of the
company from the register of companies.
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AS(MD) No. 265 of 2008
(7) The liability, if any, of every director,
manager and other officer who was exercising any
power of management, and of every member of the
company dissolved under sub-section (5), shall
continue and may be enforced as if the company had
not been dissolved.
(8) Nothing in this section shall affect the power
of the Tribunal to wind up a company the name of
which has been struck off from the register of
companies.
46. It is necessary to notice that Sections 248 to 252 which form the
Chapter XVIII regarding the Removal of names of companies from the
Register of Companies, was notified vide notification No. S.O. 4167 (E)
th
dated 26 December 2016 and they have been enforced with effect from the
th
said date, i.e., 26 December 2016.
47. Of course, there are statutory procedures to be complied with
before the final act of striking off/dissolution, under Section 248(5). It is not
our look out in this appeal suit, whether those procedures have been
complied with or not. As on date, admittedly, the first defendant is struck
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AS(MD) No. 265 of 2008
off/dissolvedand are no longer incorporated Companies.
48. Upon compliance of the mandatory procedures prescribed under
Section 248 coupled with the Companies (Removal of Names of Companies
from the Register of Companies) Rules of 2016, the final Official Gazette
notification will be published and once it is published the action of the
Registrar in striking off the company from the Register of Companies
thereby dissolving company attains finality.
49. Once there is a declaration that a company is struck off/dissolved
by making publication in the Official Gazette, by issuing a mandatory Form
No.STK-7, the company is struck off.
50. Once the Registrar of Companies had made publications in the
Official Gazette declaring the striking off/dissolving of any company, even
if there is any lapse in the said action, the remedy is only to initiate
proceedings under Section 252 of the Companies Act, 2013 and not to
contend that the action of the Registrar is not binding. All official Acts are
presumed to have been regularly performed as provided in illustration (e) of
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AS(MD) No. 265 of 2008
the Indian Evidence Act, 1872. It is based on the Latin maxim “Omnia
praesumuntur rite et solemniter esse acta” , i.e., “All things are presumed to
have been done rightly and with due formality”.
51. Once a company is dissolved in terms of Section 248 of
Companies Act, 2013, any such company shall cease to operate as a
Company. Thus, it is beyond any doubt that the first defendant companies,
viz., M/s.Amarkantak Orchards Pvt. Ltd., and Amarkantak Farms Pvt. Ltd.,
are no longer incorporated registered companies.
52. We are therefore unable to accept the argument of Mr. V.Vikram
Veerasamy for the first defendant that the Registrar failed to take note of the
obligations of the first defendant companies, while passing orders dissolving
the first defendant companies and since the pendency of this Appeal Suit
was not brought to the notice of the Registrar of Companies, the act of the
Registrar in striking off the companies is not valid and will not bind the first
defendant company and therefore the Appeal Suit can survive. However, the
dispute does not get concluded there.
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AS(MD) No. 265 of 2008
53. We have to necessarily consider whether the striking off the
company from the Register of Companies will render it impermissible for
the first defendant company to continue with this Appeal Suit. Reference can
be made to Section 250 of the Companies Act which is extracted here
under:-
“250. Effect of company notified as dissolved- Where a
company stands dissolved under section 248, it shall
on and from the date mentioned in the notice under
sub-section (5) of that section cease to operate as a
company and the Certificate of Incorporation issued to
it shall be deemed to have been cancelled from such
date except for the purpose of realising the amount due
to the company and for the payment or discharge of
the liabilities or obligations of the company .”
(emphasis supplied)
54.Despite the dissolution of the company / striking off, Section 250
specifically provides that such cancellation shall not be given effect to, for
the purpose of realising the amount due to the company or for the payment
of dues of the company or for the discharge of the liabilities or the discharge
of the obligations of the company.
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55. A careful perusal of Section 250 demonstrates that a company that
stands dissolved under Section 248 of The Companies Act, 18 of 2013, shall
cease to operate as a company from the date mentioned in notice under sub-
section 5 of Section 248. Further the certificate of incorporation issued to the
company shall be deemed to have been cancelled from such date. This is the
general rule laid in the first part of Section 250. The later part creates certain
exceptions.
56. The first exception provided is that such deemed cancellation of
the incorporation of the company and ceasing of operation as a company
shall not apply, if there is a purpose of realising any amount due to the
company. Illustratively, we can state that, if during its lawful existence, the
Company was successful in securing an award before the arbitrator or the
court of law, because of its subsequent ceasing of operation, pursuant to
action under Section 248, it will not lack the locus standi to initiate
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AS(MD) No. 265 of 2008
proceedings to realize the award/decree granted in its favor.
57. A second kind of exception is when the company is liable to make
payments. Illustratively, it can be stated that if the company had suffered an
arbitral or a money decree, in its time of valid incorporation, even after the
striking off of the company under section 248, execution proceedings against
the company can still be continued.
58. The third kind of exception is when the company has to ‘discharge
certain liabilities’ or ‘discharge certain obligations’. The lawmakers had
consciously used both the words ‘liabilities’ and ‘obligations’. It is necessary
to consider these three words “discharge” “liability” and “obligation”
occurring in the later part of Section 250 of Act 18 of 2013.
59. Liability is distinct from obligation. In a broader sense, in the
context of the Companies Act, 2013, generally, liabilities will refer to the
financial debt, quantifiable monetary owed to another party. Whereas
obligation is generally a legal duty, commitment or statutory burden to do
burden to do or refrain from doing something. As an example, it can be
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stated that the outstanding loans, bank overdrafts, trade payables, unpaid
taxes and liquidation claims will fall under the term ‘liabilities’. Whereas the
term ‘obligation’ will include the duty to file annual returns, hold board
meetings, comply with court orders and honour non-compete classes. While
the responsibility of discharging a liability may arise out of transactions, past
defaults or legal judgments requiring a payout, the responsibility of
discharging an obligation may directly from the statutory provisions or from
executed contracts.
60. Under the Indian Contract Act, 1872 and the Specific Relief Act,
1973, the terms liability and obligation have always been treated distinctly
and not synonymously. While an obligation is the primary duty, a liability is
the secondary consequence that arises when the duty is broken. An
obligation is a legal tie - “vinculum juris” that binds a person to do or not to
do something and it represents an active, ongoing duty. Rather a liability is
the state of being legally responsible or exposed to a sanction, penalty or an
order for damages, because an obligation was breached or a debt was
incurred.
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61. Obligations under the Contract Act can be seen to have been
provided under Chapter IV from Sections 37 – 67, where it talks about the
performance of contracts. Whereas the liabilities under the Contract Act, i.e.,
the “ breach and remedy ” is spoken to under Chapter VI from Sections 73 to
75. Thus under the Contract Act, while an obligation arises the moment, a
valid contract is signed or a legal duty is cast, the liability arises when the
contract is breached or when an obligation is left unfulfilled.
62. The term ‘ discharge of obligations of the company’ occurring in
Section 250 of Central Act 18 of 2013, assumes greater significance in this
context.
63. The word “discharge” is defined in the “Black’s Law Dictionary
– Tenth Edition” as “ Any method by which a duty is extinguished ;
especially the payment of a debt or satisfaction of some other obligation.”
th
64. P. Ramanatha Aiyar's Advance Law Lexicon - 5 Edition defines
“ discharge in the context of the law of contract” as “to discharge is to
cancel or unloose the obligation of a contract; to make an agreement or
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contract null and inoperative. Discharge the act or instrument by which the
binding force of a contract is terminated, irrespective of whether the contract
is carried out to the full extent contemplated or is broken before complete
execution.” In another place it defines “ discharge of a contract” as the end
of the contract and it defines it as follows: - “The termination of a
contractual obligation. Discharge may take place by: (1) performance of a
contract; (2) express agreement, which may involve either bilateral
discharge or unilateral discharge; (3) breach of contract; and (4) Frustration
of a contract.
65. Thus discharge of an obligation does not mean, only discharge by
performance, but also discharge by frustration or termination. Therefore it is
not only the scenario where the Company has to discharge the obligation by
performance, that is protected under Section 250 of the Companies Act, but
also where it is defending the correctness of its action, in refusing
performance of the contract or in justifying its actions leading to the
frustration of the contract or its termination.
66. The word ‘obligation’ is not defined anywhere under the Central
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Act 18 of 2013. Rather the Specific Relief Act, 1963 defines ‘obligation’
under Section 2 (a). It states that ‘obligation’ includes every duty
enforceable by law. The Specific Relief Act is designed more to enforce
obligations
67. In the present Appeal Suit concerning the specific performance of
a sale agreement, the import of the definition provided to an obligation under
the Specific Relief Act 1963 is more appropriate and relevant.
68. The Specific Relief Act defines ‘obligation’ to include every duty
enforceable by law . The law makers having employed the terminology
‘includes’ had revealed that it is only enumerative and not exhaustive, as the
word “includes” has an extending force and does not limit the meaning of
the term to the substance of the definition.
69. It is now necessary to consider what is the obligation that is sought
to be protected in the present Appeal Suit by the first defendant.
70. In fact, the definition of the word ‘obligation’ in the Specific
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Relief Act 1963 is the same as it was in the Specific Relief Act of 1877.
Thus, the definition of ‘obligation’ had remained constant for nearly 150
years.
71. The definition of the word obligation contemplates duties that are
enforceable by law. Of course, all duties are conceived and spoken of as
obligation, but duty is not an obligation in the legal sense to which the legal
sanction is attached. A duty to be enforced by a Court must be a legal
obligation and not merely moral or social or a religious obligation.
72. An obligation may be a tie or a bond which constrains a person to
do or suffer something. It implies a right in another person to which it is
correlated and restricts the freedom of the obligee with reference to definite
acts and forbearance. An obligation in the language of jurisprudence is a
legal tie or ‘ vinculum juris ’ which connects two definite persons, namely A
and B of whom A has a right that B shall do or refrain from doing something
to, or on behalf of A, while B is under a corresponding duty to do or refrain
from doing the same thing too, for or on behalf of A’s end of the tie. We call
it a right or more strictly a right in persona in contrast to the right
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‘obligation’ is popularly used as a mere equivalent of duty. All duties are
conceived and spoken of obligations, but a duty cannot become an
obligation in the legal sense, as the law imposes a special burden upon a
particular entity by reason of some special reason in which the beneficiaries
stand and the obligee is bound to discharge.
73. In India the term ‘obligation’ as defined is used in its proper
juridical sense. It is a condition of being subject to a legal duty, or liability,
or forbearance of something and every legal command involves a
corresponding legal duty; for command and duty are necessarily correlative
terms. Duties enforceable under the Special Relief Act can arise out of
contract as well.
74. An agreement of sale is a contract which performance is sought
under this subject suit. Thus, a duty arises from any and every branch of law,
and the word “obligation” as its etymology denotes mean a tie or bond,
signified in its wider sense, any duty enforceable by law. In this suit, the
plaintiff who is the agreement holder is only seeking to enforce the
obligation that rests upon the land owner, under the agreement of sale, and
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AS(MD) No. 265 of 2008
he is asking for specific performance of the sale agreement.
75. An obligation may arise either out of express contract between
parties or may arise out of a tort. In the present case, the obligation has
arisen out of a contract and it is enforceable under the provisions of the
Specific Relief Act of 1963 and thus it is a valid obligation that is to be
enforced against the first defendant and to be discharged by them.
76. Useful reference can be made to the celebrated book of “Pollock
th
and Mulla” on the Indian Contracts and Specific Relief Act. In its 17
edition, it is stated as under:
“Section 2 Clause (a): Obligation
Although obligation and enforceable duty are
synonymous, the former is used, though it is less
accurate. Roman law confines “obligations” to duties
between definite persons: old English law confined it
to one special kind of instrument, though modern
scientific writers for the most part use it in the Roman
sense.
An obligation is a bond or tie, which constrains
a person to do or suffer something: it implies a right in
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another person to which it is correlated, and it restricts
the freedom of the obligeee with reference to definite
acts and forbearances; but in order to be enforceable,
it must be an obligation recognised by law, and not
merely a moral, social or religious one An obligation
may not be a legal one, where it cannot be reduced to
a money value; legal obligation includes every duty
enforceable by law so that when a legal duty is
imposed on the person in respect to another, the other
is invested with a corresponding legal right. This
definition is used in its wider juristic sense as covering
duties arising ex contractu or ex delicto, and may
cover any other enforceable duty under any statute It
has been held, for instance, that a person is under an
obligation to refrain from proclaiming falsely to be a
spouse of the plaintiff and the word also includes
conjugal obligation, like that of a husband not to
contract another marriage during the subsistence of
the first.
While a contract of sale (agreement to sell) does
not of itself create any interest in, or charge on,
property the fiduciary character of the personal
obligation created by the contract of sale is recognised
in section 91 of the Trusts Act and the second
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paragraph of section 40 of the Transfer of Property
Act taken with the illustration establishes that the
contract though not creating an interest in property is
annexed to the ownership of land and the obligation
can be enforced against a subsequent gratuitous
transferee from the vendor or a transferee for value
but with notice. It is by application of this principle
that courts invoke section 21 of this Act when specific
performance becomes impossible on account of
acquisition of the land, to substitute the decree for
specific performance into one for compensation
equivalent to the land acquisition compensation
awarded for suit lands together with solatium and
interest less the amounts spent in pursuing the legal
claims for compensation.
The work ‘obligation’ has been used in sections
38 and 39 of Specific Relief Act, 1963. “
77. The above text makes it evident that obligations arisen out of a
contract of agreement of sale, is very much covered under the specification
mentioned under Section 250 of the Companies Acts (18 of 2013). In fact
the suit is decreed in this case and a right stands crystallised in favour of the
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agreement holder and the first defendants’ is bound to discharge this
obligation. Thus, it becomes an obligation mentioned in Section 250. Even if
the company stands dissolved under Section 248 and hence, ceases to
operate as a company and its Certificate of Incorporation is deemed to have
been cancelled, it will not be given effect to and the litigation in defending
the correctness of the implied termination of the Contract of sale agreement,
can be continued de hors such dissolution / striking off.
78. We will consider the judgments relied upon by the
respondent/plaintiffs. They do not concern a scenario as specific and as
arising in the present case. Every ratio laid down by the Court has to be
applied only upon noticing the specific facts and circumstances of the case.
In Income Tax Officer vs Pandian Anbalagan in WA No. 2506 of 2024
th
dated 5 November 2024, the Court was dealing with the right of a director
of a company that is already struck off to agitate the correctness of an order
of assessment.
79. The Hon’ble Supreme Court in the case of CIT Vs. Gopal Shri
Scrips reported in (2020) 7 SCC 654 has held as follows:- “10. In our view,
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the High Court was wrong in dismissing the appeal as having rendered
infructuous. The High Court failed to notice Section 506(5) proviso (a) of
the Companies Act and further failed to notice Chapter XV of the Income
Tax Act which deals with liability in special cases and its clause (L) which
deals with discontinuance of business or dissolution. The aforementioned
two provisions, namely, one under the Companies Act and the other under
the Income Tax Act specifically deal with the cases of companies, whose
names has been struck off under Section 506 (5) of the Companies Act.
These provisions provide as to how and in what manner the liability against
such company arising under the Companies Act and under the Income Tax
Act is required to be dealt with. Since the High Court did not decide the
appeal keeping in view the aforementioned two relevant provisions, the
impugned order is not legally sustainable and has to be set aside.”
80.Thus it is held by the Apex Court held that the Striking off a
company will not bring all legal proceedings to an end, and it will depend
upon the nature of obligation that is sought to be enforced.
81. The other judgement relied by the Learned Senior Counsel for the
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plaintiff is that of the of National Company Law Appellate Tribunal in
Panthera Developers Pvt. Ltd., vs. Sankalp Buildwell Pvt. Ltd., & others in
th
Company Appeal (AT) 55 of 2023 dated 15 May 2023. It concerns the
oppression and mismanagement of a company, with which we are not
concerned at all.
82. None of the cases cited by the respondent exposit any of the legal
considerations that we have discussed supra, in reference to the continuation
of an appeal suit by a Struck off Company, in which it challenges a decree
granting enforcement/specific performance of a sale agreement.
83. It is a legal obligation that is sought to be enforced against the
dissolve / strike off company, in the present case. Because of dissolution of
striking off, a company is not rendered dead. It loses its registration /
incorporation. The Companies Act 18 of 2013 recognises the power of the
Tribunal to continue with winding up proceedings, despite the striking off
the company. This is provided under Section 249 (8) of the said Act. This
indicates an inference to be drawn that not all has ended for a company,
upon its striking off or dissolution.
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84. The ‘ doctrine of bona vacantia ’ is primarily based on escheat
principle and it recognises the right of the crown in England and the right of
the Government in India to take the property by escheat for want of an heir
or successor or as bona vacantia for want of a right Owner. It is recognised
under Article 296 of the Constitution of India. However, there is no statutory
provision under the Central Act 18 of 2013 providing for the invocation of
this doctrine to a company that is struck off. The question of invoking the
‘doctrine of bona vacantia’ does not arise at all in the present case, as in the
facts of the present case, we have concluded that the obligations of the
dissolved company continues to subsist.
85. In the light of the above derived legal proposition, we are of the
firm conclusion that the present Appeal Suit can be continued by the first
defendant despite the striking off/dissolution of the first defendant under
Ex.A9 vide the action of the Registrar of Companies invoking Section 248
(5) of the Companies Acts (18 of 2013). We thus answer the first
preliminary issue in favor of the first defendant and hold that despite the
dissolution / striking off the first defendant, the present appeal suit can be
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continued. Further the subsequent purchasers have already been brought on
record as and they are very much available to continue with the appeal suit.
86. We shall now proceed to deal with the merits of the appeal suit.
The following issues arise for consideration in this appeal suit:
(i) Whether the original plaintiff, P.A. Joseph, had established
his readiness and willingness to perform his part of the contract
marked as Exhibits A1 and A2?
(ii) Whether time was the essence of the contract, having regard
to the terms of the agreement of sale dated 21.04.2005 executed
between the parties and the subsequent conduct of the parties?
(iii) Whether the plaintiff can compel the land owners to execute
the sale deed in respect of 205.15 acres alone as against the total
extent of more than 300 acres mentioned in the agreement on the
ground that only such a lesser extent was found available upon
survey?
(iv) Whether defendants 5 to 7 were bona fide purchasers for
value without notice of the earlier agreement of sale?
(v) Whether the plaintiff had approached the Court with clean
hands and is he entitled to the discretionary relief of specific
performance?
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87. SUBMISSIONS ON BEHALF OF THE APPELLANTS:
87.1. Mr. Parthasarathy, learned senior counsel and Mr. Vikram
Veerasamy would contend that the plaintiff has not substantiated his
readiness and willingness to perform his part of the contract; having pleaded
that the survey was completed on 23.06.2005, the plaintiff had failed to
establish that he had taken steps to have the sale deed executed within the
stipulated period i.e., on 22.07.2005. They would also argue that Exhibit
A6, alleged survey report, was subsequently created for the purpose of
instituting the present suit; in the absence of any communication regarding
the survey, there was no consensus ad idem between the parties as to the
actual extent of the properties available for conveyance pursuant to such a
survey; the plaintiff had neither pleaded nor proved that the original owners
of the properties were put on notice regarding the survey or that the survey
was conducted in their presence or in the presence of their representatives;
the results of the alleged survey were never communicated to or accepted by
the original owners of the land; it was only the unilateral assertion of the
plaintiff that the available extent of land was only 205.15 acres; it is evident
that the plaintiff himself was not ready and willing to perform the contract in
its entirety; in other words, he was not ready and willing to purchase the
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AS(MD) No. 265 of 2008
entire extent of more than 300 acres mentioned in the available 4 villages,
but was seeking to purchase only the reduced extent of 205.15 acres on the
basis of the alleged survey.
87.2. They would also submit that the evidence of P.W.2 is wholly
unreliable. Even in his deposition, he admitted that he was an employee of
the plaintiff and was acting at his instance and under the instructions of the
plaintiff. It was further contended that if the plaintiff had actually entrusted
the survey to P.W.2, he could not have been unaware of the date on which
the survey was completed. This is also contrary to the specific pleading in
the plaint that the survey was completed on 23.06.2005.
87.3 They would further argue that serious exception must be taken to
the issuance of the legal notice only in the first week of July 2006,
particularly when, according to the plaintiff, the survey commenced on
05.05.2005 and was completed on 23.06.2005, revealing a shortage of nearly
94 acres and the availability of only 205.15 acres. If it is so, the very same
facts ought to have been specifically mentioned in the legal notice marked as
Exhibit A7. They would also contend that the plaint is absolutely silent
about the alleged shortage of land and the circumstances in which the
plaintiff came to know that only a lesser extent was available. This
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AS(MD) No. 265 of 2008
unexplained omission exposes the lack of readiness and willingness on the
part of the plaintiff.
87.4. The learned Senior Counsel drew our attention to a comparative
reading of the schedules of properties mentioned in the agreement of sale,
the legal notice marked as Exhibit A7, the survey list marked as Exhibit A6
and the plaint. It was contended that the schedules of properties mentioned
in the agreement of sale, the legal notice and the plaint are substantially
identical, whereas the schedule of properties in Exhibit A6 does not contain
several survey numbers found in the agreement of sale. On the other hand,
Exhibit A6 contains different survey numbers which do not form part of the
agreement of sale. Therefore, they would submit that Exhibit A6 is not a
genuine survey report but merely a self-serving document created for the
purpose of the present litigation. The very document relied upon by the
plaintiff to contend that the extent of land had been reduced from more than
300 acres to 205.15 acres does not correspond to the properties actually
agreed to be sold. This discrepancy assumes considerable significance. Mr.
Vikram Veerasamy circulated a chart prepared on comparative analysis of
the schedule of properties mentioned in the sale agreement (Ex. A6).
87.5 With regard to the issue as to whether the time is essence of the
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AS(MD) No. 265 of 2008
contract, the learned Senior Counsel and the other Counsel would submit
that the time was always the essence of the contract and that the parties had
specifically stipulated 22.07.2005 as the last date for completion of the sale
transaction. It was contended that there could not be any unilateral extension
of time at the convenience of the plaintiff and that, upon expiry of the
stipulated period, the agreement of sale stood automatically terminated. He
drew our attention to the reply notice issued on behalf of the landowners,
marked as Exhibit A8, to contend that the landowners had specifically
asserted that time was the essence of the contract.
87.6 They had relied upon the following precedents in support of their
submissions:
“1. N.P. Thirugnanam Vs. Dr. R. Jagan Mohan Rao
(1995) 5 SCC 115.
2. Pushparani S. Sundaram and Ors. Vs. Pauline Manomani
James and Ors. (2002) 9 SCC 582.
3. Zarina Siddiqui Vs. A. Ramalingam Alias R. Amarnathan
(2015) 1 SCC 705.
4. Surinder Kaur Vs. Bahadur Singh
(2019) 8 SCC 575.
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AS(MD) No. 265 of 2008
5. C.S. Vekatesh Vs. A.S.C. Murthy (2020) 3 SCC 280.
6. U.N. Krishnamurthy (Since Deceased) Through Legal
Representatives Vs. A.M. Krishnamurthy
(2023) 11 SCC 775.
7. Selvaaraaj Vs. Pappathi (2025) 2 CTC 79.
8. Vasanthi Vs. Venugopal (On S. 53A TP Act and S. 16, SPR Act
(2017) 4 SCC 723.”
88. SUBMISSIONS ON BEHALF OF THE RESPONDENT:
88.1. Per contra , the learned Senior Counsel, Mr. V. Ragavachari
appearing for the plaintiff would submit that the landowners had admitted
the execution of the agreement of sale and the receipt of the first instalment
of Rs.10,00,001/- on 21.04.2005 and the second instalment of
Rs.20,00,000/- on 05.05.2005. However, they had never insisted that time
was the essence of the contract, as is evident from a reading of the reply
notice issued on their behalf, marked as Exhibit A8.
88.2. He would further contend that the landowners themselves were
not certain about the actual availability of the total extent of more than 300
acres in the four revenue villages and the additional extent of 20 cents in
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AS(MD) No. 265 of 2008
Palarapatty village and that is why the agreement contained a Clause
providing that the actual extent would be ascertained upon measurement and
that the sale deed would be executed in respect of the extent found available.
Therefore, it was never the case of the parties that the plaintiff had agreed to
purchase the extent of 300 acres.
88.3. According to him, what was agreed under Exhibits A1 and A2
was that the plaintiff would purchase the available extent of land in the
specified survey numbers, which were collectively stated to comprise more
than 300 acres, at the rate of Rs.16,250/- per acre. The manner of payment
was also specifically stipulated. The first instalment of Rs.10,00,001/- was
paid on the date of execution of the agreement of sale, namely, 21.04.2005.
The second instalment was payable on 05.05.2005, while the last and final
instalment was to be paid upon completion of the survey and identification
of the actual extent of land available for sale.
88.4.This, according to the Learned Senior counsel demonstrates that
even the land owners were not certain about the availability of the entire
extent of more than 300 acres and that the final instalment was deliberately
left to be determined after completion of the survey and therefore, there is no
lack of consensus- ad-idem.
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AS(MD) No. 265 of 2008
88.5. According to him and the parties had a clear understanding that
the extent of lands that are available will be sold for a specified rate. He
would further contend that there was no dispute on the part of the
landowners that the plaintiff was entitled to have the actual extent
determined through a survey. The agreement itself contemplated such an
exercise.
88.6. He would also submit that the time was never treated as the
essence of the contract. The absence of any forfeiture Clause or a specific
Clause providing for automatic cancellation of the agreement of sale under
Exhibits A1 and A2 would demonstrate the same. The relevant Clause in the
agreement contemplated that in the event of default the defaulting party
would be liable for the loss and expenses incurred by the other party and that
appropriate legal proceedings would have to be initiated before a Court of
law. This would indicate that the agreement contemplated enforcement of
the contract and not its automatic termination.
88.7. He would further submit that more than 95% of the sale
consideration had been paid within a fortnight from the date of execution of
the agreement of sale. If time had been treated as the essence of the contract,
the plaintiff would have proceeded to pay the balance sale consideration and
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AS(MD) No. 265 of 2008
complete the registration.
88.8. The reason for entering into the agreement and making the
substantial payment at the initial stage was that the actual extent of land
available for sale was required to be ascertained. By referring to Exhibit A8,
he would submit that the landowners had continued to entertain the plaintiff
and had participated in several meetings and discussions even beyond the
stipulated date of 22.07.2005. This conduct would demonstrate that they had
repeatedly extended the time for completion of the sale transaction.
Therefore, time was never treated as the essence of the contract.
88.9. He would also submit that readiness and willingness can be
gathered from the conduct of the plaintiff and that Section 16(C) of the
Specific Relief Act does not prescribe any particular form in which readiness
and willingness must be expressed. By arranging for the survey, obtaining
the report marked as Exhibit A6 and intimating the landowners through the
legal notice that he would be available before the Sub-Registrar on
10.07.2006, the plaintiff had sufficiently demonstrated his readiness,
willingness and capacity to perform his part of the contract.
88.10. He argued that the availability or non-availability of physical
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AS(MD) No. 265 of 2008
possession, or the absence of independent proof of possession, was not a
condition precedent for the plaintiff's entitlement to seek a decree for
specific performance. He would submit that D.W.1 had not specifically
denied the handing over of possession and that the survey could not have
been conducted without obtaining physical access to the properties.
88.11. The learned Senior Counsel would further submit that the
defendants 5 to 7 were not bona fide purchasers of the property and they
ought to have been aware of the existence of the earlier agreement of sale. It
was further submitted that the discretion under Section 20 of the Specific
Relief Act ought to be exercised in favour of the agreement holder and that
the mere passage of time could not be held against the plaintiff. He
accordingly prays for dismissal of this appeal suit.
88.12. The Learned Senior Counsel relied on the following judgments
in support of his arguments:-
“1. Ardeshir Mama Vs. Flora Sassoon
(1928) SCC Online PC 43
2. R.C. Chandiok and another Vs. Chuni Lal Sabharwal and
others (1970) 3 SCC 140
3. Chand Rani (Smt) (Dead) by Lrs Vs. Kamal Rani (Smt)(Dead)
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AS(MD) No. 265 of 2008
by Lrs. (1993) 1 SCC 519
4. K.M.Madhavakrishnan Vs. S.R.Swami and another
(1995) 1 LW 716 = AIR 1995 Mad 318
5. Sukhbir Singh and others Vs. Brij Pal Singh and others
(1997) 2 SCC 200
6. Pandurang Ganpat Tanawade Vs. Ganpat Bhairu Kadam and
others (1996) 10 SCC 51
7. Syed Dastagir Vs. T.R.Gopalakrishnan Setty
(1999) 6 SCC 337
8. Motilal Jain Vs. Ramdasi Devi (Smt) and others
(2000) 6 SCC 420
9. Surjit Kaur Vs. Naurata Singh and another
(2000) 7 SCC 379
10. P.D’souza Vs. Shondrilo Naidu (2004) 6 SCC 649
11. Janki Vashdeo Bhojawani and another Vs. IndusInd Bank
Ltd and others (2005) 2 SCC 217
12. Surinder Singh Vs. Kapo0or Singh (dead) through Lrs and
others (2005) 5 SCC 142
13. Aniglase Yohannan Vs. Ramlatha and others
(2005) 7 SCC 534
14. Azhar Sultana Vs. B.Rajamani and others
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AS(MD) No. 265 of 2008
(2009) 17 SCC 27
15. Man Kaur (Dead) by Lrs. Vs. Hartar Singh Sangha (2010)
10 SCC 512
16. Saradamani Kandappan Vs. S.Rajalakshmi and others
(2011) 12 SCC 18
17. Narinderjit Singh Vs. North Star Estaet Promoters Limited
(2012) 5 SCC 712
18. Lal Chand Vs. Tek Chand 2012 SCC OnLine P&H 24572
19. Rathnavathi and another Vs. Kavita Ganashamdas
(2015) 5 SCC 223
20. A.Kanthamani Vs. Nasreen Ahmed (2017) 4 SCC 654
21. R.Lakshmikantham Vs. Devaraji (2019) 8 SCC 62
22. Madhukar Nivrutti Jagtap and others Vs. pramilabai
Chandulal Parandekar (Dead) through Lrs. And others (2020)
15 SCC 731
23. A.R.Madana Gopal and others Vs. Ramnath Publications
Private Limited and another (2021) 11 SCC 200
24. K.P.Shanmugam Vs. Mylathal (S.A.No.54 of 2020, decided
on 30.06.2022)
25. P.Daivasigamani Vs. S.Sambandan (2022) 14 SCC 793
26. Basavaraj Vs. Padmavathi and another (Civil Appeal
Nos.8962-8963 of 2022, decided on 05.01.2023)
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AS(MD) No. 265 of 2008
27. R.Hemalatha Vs. Kashthuri (2023) 10 SCC 725
28. Rajesh Kumar Vs. Anand Kumar and others
(2024) 13 SCC 80 = 2024 INSC 444
29. Parswanath Saha Vs. Bandhana Modak (Das) and another
2024 INSC 1022
30. Vijay Prabhu Vs. S.T.Lajapathie and others
2025 INSC 52 (order in SLP (C) No.25246 of 2023)
31. Russi Fisheries P.Ltd and another Vs. Bhavna Seth and
others
2026 INSC 339
32. A.Shahul Hameed Vs. N.Malligarjuna and others
2026 INSC 573”
Accordingly, he prayed for the dismissal of the appeal suit.
89. Analysis, Reasoning and Findings:
89.1.We shall take up the second issue for consideration first, namely,
whether time was the essence of the contract .
89.2.Admittedly, the agreement of sale was executed on 21.04.2005.
The agreement stipulates 22.07.2005 as the date for completion of the sale
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transaction. At the time of execution of the agreement, an advance amount
of Rs.10,00,001/- was paid. Subsequently, the second instalment of
Rs.20,00,000/- was paid in cash to the fourth defendant on 05.05.2005, and
an acknowledgment of the said payment was also made in the agreement
itself (Ex.A.3).
89.3. While the Tamil version of the agreement stipulates that upon
receipt of the second instalment, the representative of the landowners,
namely, the fourth defendant, shall hand over the documents to the
agreement holder, the English version provides for the handing over of
copies of the documents relating to the properties. It is not the case of the
plaintiff that the original title deeds were handed over to him. This is also
evident from Exhibits A4 and A5, which are the encumbrance certificates,
and the other revenue records relied upon by the plaintiff. Therefore, it is
evident that the parties had contemplated the handing over of copies of the
documents and not the original title deeds.
89.4. The sale agreement further stipulates that, thereafter, the
agreement holder shall arrange for the survey of the lands at his own cost.
Upon completion of the survey and measurement, the agreement holder
would be in a position to ascertain the actual extent of the lands available
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and accordingly prepare the necessary sale deeds for execution by the
landowners on 22.07.2005.
89.5. The plaintiff's case is that the survey was completed on
23.06.2005. However, only after a period of more than one year, he had
issued a legal notice marked as Exhibit A7 in July 2006. The reply notice
marked as Exhibit A8 along with the oral testimony indicates that the
landowners had not treated 22.07.2005 as the stipulated date for completion
of the sale transaction. Ex. A.8, issued in July 2006, explicitly mentioned the
cut-off date and asserted that the agreement stood terminated upon the
expiry of the said date. Significantly, the reply notice records the repeated
requests made by the agreement holder seeking extension of time for
registration.
89.6. According to the reply notice (Ex. A.8), the plaintiff had
repeatedly approached the landowners and requested them to extend the time
for registration. It is further stated that the plaintiff had visited Chennai and
met the landowners at different places and on different dates, seeking
extension of time for completing the registration.
89.7. The reply notice also refers to the visits made by the plaintiff or
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his assistant to the office of the landowners on several occasions, requesting
extension of time for registration. It is further stated therein that the plaintiff
had requested the landowners to come to Tamil Nadu with the original
documents and had proposed to complete the registration either at Madurai
or at Chennai. The reply notice also refers to a meeting at Kumili, where,
after discussions, the plaintiff requested the landowners to fix another date
for registration. Notably, the reply notice omits the precise dateson which all
these meetings took place and the requests by the Plaintiff was entertained. It
does not state that all these meetings and requests were made and entertained
within the cut-off date. Therefore it has to be only inferred that the land
owner had entertained the agreement holders requests for extension of time,
without treating ‘time as the essence of the contract’
89.8. A reading of the reply notice, Exhibit A8, together with the oral
testimony of D.W.1, therefore, becomes relevant as the subsequent conduct
of the land owner, in determining whether the parties had treated the date
mentioned in the agreement as an inflexible deadline or whether extensions
were contemplated and sought by the agreement holder and agreed by the
land owner.
89.9. The Honorable Supreme Court of India in the judgment
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delivered N. Srinivasa Vs. Kuttakaran Machine Tools Limited reported
(2009) 5 SCC 182 has held that in a contract for sale of immovable property,
normally it is presumed that time is not the essence of the contract and even
if there is an express stipulation to that effect, the said presumption can be
rebutted.
89.10. It is a settled law that the burden to prove that time is the
essence of the contract is always upon the person alleging it. In cases where
a plea is set up by a party that time is the essence of the contract, it is the
duty of the court to examine the real intention looking to the surrounding
facts and circumstances of the said case. It cannot be considered exclusively
with reference to the contract alone or with reference to a particular term or
condition of the contract which is breached, but by a cumulative verification
of terms of the contract along with the intention of the parties and as well the
manner in which the parties had approached the Contract as exhibited from
their conduct, subsequent to the entering of the sale agreement, till the filing
of the suit.
89.11. In the facts and circumstances of the present case, the
subsequent conduct of the parties assumes significance, in determining
whether time was treated as the essence of contract of sale agreement. If the
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landowners had strictly treated the stipulated date, namely, 22.07.2005, as
the cut-off date for completion of the sale transaction, they would not have
agreed to meet the agreement holder on several occasions, after the expiry of
the stipulated period. They could have simply issued a notice stating that,
since time was the essence of the contract and the stipulated period had
already expired, they were not inclined to entertain any further request for
extension. Admittedly there is no single communication from the land owner
repudiating the Contract on the premise that time had lapsed.
89.12. The fact that the landowners or their representatives met the
plaintiff on several occasions, even after the stipulated date, indicates that
they had not treated time as an essence of the contract. It is fortified with the
lack of any communication in writing brought on record by the land owner
indicating the termination of the agreement.
89.13. We therefore hold that though time was stipulated in the sale
agreement, for completion of the sale, the landowner by his subsequent
conduct had not treated time as the essence of the contract.
89.14. Though time is held as not the essence of the subject contract, it
is necessary that there should be performance of the contract within a
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reasonable time and this question will assume significance while testing the
readiness and willingness of the agreement holder, in performing his part of
the contract. This part is dealt with under the relevant paragraph in the later
part of this judgment.
89.15. We uphold the arguments of the agreement holder in this
regard. The second issue is thus answered in favour of the original plaintiff.
90. We shall now take up issues 1, 3 and 5 together for consideration,
as they are interconnected and arise out of the same set of facts.
91. The execution of the agreement of sale under Exhibits A1 and A2;
the payment of the advance amount of Rs.10,00,001/- on the date of
execution of the agreement, namely, 21.04.2005; and the payment of the
second instalment of Rs.20,00,000/- on 05.05.2005 are not in dispute. The
requirement on the part of the agreement holder to conduct a survey at his
own cost and ascertain the actual extent of land available for alienation, in
accordance with the terms of the agreement of sale, is also not in dispute.
91.1. According to the plaintiff, as stated in paragraph 8 of the plaint,
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the entire survey and measurement of the properties were completed on
23.06.2005. However, no material has been produced before the Court to
establish that, immediately after the completion of the survey and
measurement on 23.06.2005, the plaintiff communicated the alleged
shortage in the extent of the properties to the landowners.
91.2. The plaintiff's earliest written communication, according to him,
was the notice dated 08.02.2006, referred to in paragraph 13 of the plaint.
However, the said letter dated 08.02.2006 has not been produced before the
Court. Though the plaintiff claims that he had repeatedly met the
representatives of the landowners and expressed his willingness to have the
sale deed executed in respect of the available extent of 205.15 acres, there is
no contemporaneous written communication or document to substantiate the
same regarding the availability of lesser extent.
91.3. It is the case of the landowners that the plaintiff was never ready
and willing to perform his part of the contract and that he was asking one
excuse or another during the alleged meetings, repeatedly, seeking only an
extension of time.
91.4. Therefore, the question as to whether the survey was actually
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AS(MD) No. 265 of 2008
completed on 23.06.2005 and whether any communication was sent by the
agreement holder, namely, the plaintiff, to the landowners, calling upon
them to execute the sale deed in respect of the allegedly available extent of
205.15 acres is of relevance.
91.5. The first and last (available) written communication between the
parties is the legal notice marked as Exhibit A7 and reply to it marked as Ex.
A.8. Though A.7 is undated, the evidence indicates that it was received by
the fourth defendant on 01.07.2006.
91.6. A perusal of Exhibit A7, namely, the legal notice issued by the
plaintiff, is significant. In the said notice, the plaintiff has stated that he had
intimated the landowners during the second week of July 2005 about his
readiness and willingness to have the sale deed executed. He further claimed
that the fourth defendant was acting with an ulterior motive and in collusion
with others. The plaintiff asserted that he was always ready and willing to
perform his part of the contract as a purchaser, as contemplated under the
agreement of sale dated 21.04.2005. He called upon the landowners to be
present before the office of the Sub-Registrar to receive the balance sale
consideration and execute the sale deed in his favour.
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91.7. However, surprisingly, to the detriment of the agreement holder,
the legal notice is absolutely silent about the alleged survey and
measurement of the suit properties; the existence of Exhibit A6; the alleged
availability of only a lesser extent of 205.15 acres; and the alleged act of
taking physical possession of the properties. In fact, the legal notice does not
contain any reference to the alleged taking of physical possession or the
survey and measurement of the properties. The legal notice calls upon the
landowners to execute the sale deed in respect of the total extent of more
than 300 acres situated across five villages.
91.8. The schedule of properties described in the legal notice, Exhibit
A7, is the same as the schedule of properties mentioned in the agreement of
sale under Exhibits A1 and A2.
91.9. If the survey and measurement had already been completed and
the results thereof had been reduced into a list, namely, Exhibit A6, the
agreement holder would not have issued a legal notice calling upon the
landowners to execute the sale deed in respect of the entire extent of more
than 300 acres. Instead, he would have specifically referred to the reduced
extent of 205.15 acres and expressed his readiness and willingness to pay the
proportionate balance sale consideration.
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91.10. It is also pertinent to note that the agreement of sale stipulates
22.07.2005 as the cut-off date for completion of the sale transaction.
According to the plaintiff, the survey and measurement of the properties
were completed on 23.06.2005. However, there is no satisfactory
explanation forthcoming from the agreement holder as to why he took more
than a year to issue the legal notice, in the first week of July 2006. This
shows the lack of readiness and willingness on his part.
91.11. Apart from his own self-serving testimony and the bald
assertion that, despite repeated requests, the landowners were not willing to
execute the sale deed, there is no other substantial material or evidence
available on record to establish his readiness and willingness, at least from
the date of completion of the alleged survey on 23.06.2005.
91.12. The deposition of the fourth defendant examined as D.W1 is of
relevance to ascertain the conduct of the respective parties. During his cross-
examination, he had stated that he had been working in the first defendant
company since 1995 and that the company owned several properties in and
around the concerned area, to an extent of approximately 514 acres. He
further stated that, apart from the property situated in one of the villages,no
other property in the villages mentioned in the agreement of sale had ever
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been sold.
91.13. The first defendant company owned 360 acres of land and these
properties are owned under registered sale deeds and not by way of power of
attorney sale. This statement was obtained by the plaintiff during his cross-
examination of D.W1. When the plaintiff claims to have entered into an
agreement of sale with the intention of purchasing more than 300 acres of
land, it is surprising that no material has been placed on record to establish
that the plaintiff had undertaken any due diligence with regard to the title
and ownership of the properties and the plaintiff called upon D.W2 to
produce the relevant title deeds and indicate whether they were ready and
willing to produce such documents. This should have been done first and the
foremost verification undertaken by the plaintiff even before entering into
the sale agreement dated 21.04.2005 or atleast before paying a substantial
amount of Rs.30,00,000 towards the sale consideration.
91.14. D.W1 had admitted that for the purpose of facilitating the
transaction, the plaintiff was permitted to enter into possession of the
property. Permitting the agreement holder to enter into the property for a
limited period of carrying out a survey and measurement is entirely distinct
from delivering possession of the property pursuant to the conclusion of the
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sale.
91.15. There is no material to substantiate that the plaintiff had
brought to the notice of the landowners that only an extent of 205.15 acres
was available for alienation and that he was ready and willing to pay the
balance sale consideration, proportionate to the said available extent.
91.16. The evidence of P.W.1, in his cross-examination, is relevant in
this regard. His testimony appears to be inconsistent with the specific
pleadings in the plaint regarding the completion of the survey. The plaintiff
himself admitted that the survey had to be carried out across five different
villages and that considerable time was required for completing the same.
His oral testimony is also silent about the date on which the survey was
completed. He further stated that, upon preparation of the list marked as
Exhibit A6, he called upon the landowners to complete the sale transaction.
However, he admitted that, on 05.05.2005, he had received photocopies of
the documents relating to the properties. He also stated that he could not
complete the entire survey before 22.07.2005 and that he did not remember
the exact date on which the survey was completed. He merely expressed his
belief that the list marked as Exhibit A6 was correct. He also admitted that
Exhibit A6 did not contain the survey details or the extent of land available
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in each survey number.
91.17. It is further relevant to note that, in the legal notice (Ex. A7),
the plaintiff had not stated that he had surveyed the properties. He had
merely referred to the properties as comprising a total extent of more than
300 acres across five villages. He had not mentioned that only an extent of
205.15 acres was available and nor had he referred to the alleged shortage of
land or specified the proportionate balance sale consideration payable in
respect of the reduced extent.
91.18. The plaintiff also admitted that he had not sent any written
communication to the landowners regarding the alleged shortage in the
extent of the properties and also the fact that the agreement was entered into
after going through the parent document. He also claimed that Exhibit A5
was not given to him upon payment of Rs.20,00,000/-. In his oral testimony,
he claimed that his written demand seeking performance of the contract was
made only in July 2006. This raises serious doubt on the plaintiff's assertion
that he had earlier issued a letter dated 08.02.2006. The plaintiff was also
unable to clearly state the date of commencement or the date of completion
of the survey or even if there was a survey at all.
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91.19. P.W.2, who is a signatory to Exhibits A1 and A2 and informed
the availability of the property for sale to the plaintiff, claimed that the
survey was carried out under his supervision on the basis of the field
measurement books and other particulars obtained from the Village
Administrative Officers. He further stated that the survey took
approximately 24 days to complete and that he and his team had encountered
serious difficulties and disturbances during the exercise.
91.20. It is not mentioned anywhere in Exhibit A6 that any of the
lands had actually been subjected to a survey or that any remarks had been
made regarding the survey of those lands. He had merely subscribed his
signature on the last page of the document. There are also discrepancies
between the survey numbers mentioned in the agreement of sale and those
found in Exhibit A6. Some of the survey numbers mentioned in the
agreement of sale under Exhibits A1 and A2 are not reflected in Exhibit A6.
91.21. The villages of Sankarapuramand Palarapatty are not
mentioned in the said document. Further, Exhibit A6 does not contain any
date. It is also seen that the document contains certain lands which do not
form part of the schedule of properties mentioned in the sale agreement.
How this survey list contains lands which do not form part of the sale
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AS(MD) No. 265 of 2008
agreement is not explained by the plaintiff.
91.22. Thus Exhibit A6 contains several pages, with the signature of
P.W.2 appearing only on the last page. The date of the survey, the manner in
which the survey was conducted, the method adopted for identifying the
extent and survey numbers, the persons who participated in the survey and
the persons who witnessed the exercise are not disclosed in Exhibit A6. The
document does not contain any comparative statement with reference to the
survey numbers mentioned in the agreement of sale. It does not specify
which lands mentioned in the agreement of sale were not available or which
lands, though not forming part of the agreement, were found available on the
ground. In the absence of these essential particulars, the document cannot be
relied upon as a survey report.
92. Our discussions substantially demonstrate that Exhibit A6 is not a
survey report leave alone the same being genuine. It is subsequently created
for the purpose of the suit.
93. Thus, it is evident that the plaintiff has not discharged his
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obligation of completing the survey and informing the landowners of the
actual extent of land available for sale. There was no communication from
the plaintiff to the original owners of the land regarding the alleged survey
and measurement or the alleged availability of only a lesser extent of land.
In the absence of any such communication, we are left with no option, but to
conclude that the plaintiff failed to establish his continuous readiness and
willingness to perform his part of the contract.
94.Though several number of judgments were relied by either side, we
have not individually dealt with each one of those judgments, as they
predominantly deal with the broader propositions. It will be useful to refer
the following limited judgments of the Honorable Supreme Court of India to
appreciate issues that are under discussion.
94.1.In N.Thirugnanam (Dead) by legal heirs Vs. R.Jagan Mohan
Rao and others , reported in (1995) 5 SCC 115 , it is held as follows:
“5. It is settled law that remedy for specific
performance is an equitable remedy and is in the
discretion of the court, which discretion requires to
be exercised according to settled principles of law
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and not arbitrarily as adumbrated under s.20 of the
Specific Relief Act 1963 (for short, 'the Act'). Under
s.20, the court is not bound to grant the relief just
because there was valid agreement of sale. Section
16(c) of the Act envisages that plaintiff must plead
and prove that he had performed or has always been
ready and willing to perform the essential terms of the
contract which are to be performed by him, other than
those terms the performance of which has been
prevented or waived by the defendant. The continuous
readiness and willingness on the part of the plaintiff
is a condition precedent to grant the relief of specific
performance. This circumstance is material and
relevant and is required to be be considered by the
court while granting or refusing to grant the relief. If
the plaintiff fails to either aver or prove the same, he
must fail. To adjudge whether the plaintiff is ready
and willing to perform his part of the contract, the
court must take into consideration the conduct of the
plaintiff prior and subsequent to the filing of the suit
alongwith other attending circumstances. The amount
of consideration which he has to pay to the defendant
must of necessity be proved to be available. Right
from the date of the execution till date of the decree
he must prove that he is ready and has always been
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AS(MD) No. 265 of 2008
willing to perform his part of the contract. As stated,
the factum of his readiness and willingness to perform
his part of the contract is to be adjudged with
reference to the conduct of the party and the
attending circumstances. The court may infer from the
facts and circumstances whether the plaintiff was
ready and was always ready and willing to perform
his part of contract.”
94.2. In Zarina Siddiqui Vs. A Ramalingam @ R.Amarnathan
reported in (2015) 1 SCC 705 , it is held as follows:
“25. It is well settled that remedy for specific
performance is an equitable remedy. The Court while
granting decree of specific performance exercises its
discretionary jurisdiction. Section 20 of the Specific
Relief Act specifically provides that Court’s discretion to
grant decree of specific performance is discretionary but
not arbitrary. Discretion must be exercised in
accordance with sound and reasonable judicial
principles.”
94.3. In Surinder Kaur (Dead) through legal representative
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Jasinderjit Singh (Dead) through legal representatives Vs. Bahadur Singh
(Dead) through legal representatives reported in (2019) 8 SCC 575 , it is
held as follows:
“ 6. The aforesaid provisions have to be read along
with Section 16(c) of the Specific Relief Act, 1963
which clearly lays down that the specific performance
of a contract cannot be enforced in favour of a person
who fails to prove that he has performed or was
always ready and willing to perform the essential
terms of the contract which were to be performed by
him.
7. We shall also have to take into consideration
that the specific performance of contract of an
immovable property is a discretionary relief in terms
of Section 20 of the Specific Relief Act as it stood at
the time of filing of the suit.
8. 8. Section 20 of the Specific Relief Act lays down
that the jurisdiction to decree a suit for specific
performance is a discretionary jurisdiction and the
court is not bound to grant such relief merely because
it is lawful.”
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AS(MD) No. 265 of 2008
94.4. In C.S. Venkatesh v. A.S.C. Murthy , reported in (2020) 3 SCC
280, it is held as follows:
“ 15. The next question for consideration is in relation
to compliance of Section 16(c) of the Act by the plaintiff.
Though a question was raised before the trial court that
there are no pleadings as regards the plaintiff's
readiness and willingness to perform the contract, the
trial court has rightly held that there is sufficient
compliance of Section 16(c) of the Act to the extent of
pleadings. Therefore, the question to be considered is
whether the plaintiff was ready and willing to perform
his part of the contract.
16. The words “ready and willing” imply that
the plaintiff was prepared to carry out those parts of the
contract to their logical end so far as they depend upon
his performance. The continuous readiness and
willingness on the part of the plaintiff is a condition
precedent to grant the relief of performance. If the
plaintiff fails to either aver or prove the same, he must
fail. To adjudge whether the plaintiff is ready and willing
to perform his part of contract, the court must take into
consideration the conduct of the plaintiff prior, and
subsequent to the filing of the suit along with other
attending circumstances. The amount which he has to
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AS(MD) No. 265 of 2008
pay the defendant must be of necessity to be proved to be
available. Right from the date of the execution of the
contract till the date of decree, he must prove that he is
ready and willing to perform his part of the contract. The
court may infer from the facts and circumstances
whether the plaintiff was ready and was always ready to
perform his contract.”
94.5. In U.N. Krishnamurthy v. A.M. Krishnamurthy , reported in
(2023) 11 SCC 775, it is held as follows:
“ 32. In a suit for specific performance of a
contract, the Court is required to pose unto itself the
following questions, namely:
32.1. Whether there is a valid agreement of sale
binding on both the vendor and the vendee.
32.2. Whether the plaintiff has all along been and
still is ready and willing to perform his part of the
contract as envisaged under Section 16(c) of the
Specific Relief Act, 1963.
33. There is a distinction between readiness and
willingness to perform the contract and both
ingredients are necessary for the relief of specific
performance. In Acharya Swami Ganesh Dassji v.
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Sita Ram Thapar [Acharya Swami Ganesh Dassji v.
Sita Ram Thapar, (1996) 4 SCC 526] cited by Mr
Venugopal, this Court said that there was a difference
between readiness and willingness to perform a
contract. While readiness means the capacity of the
plaintiff to perform the contract which would include
his financial position, willingness relates to the
conduct of the plaintiff. The same view was taken by
this Court in Kalawati v. Rakesh Kumar [Kalawati v.
Rakesh Kumar,
34. Even in a first appeal, the first appellate court
is duty-bound to examine whether there was
continuous readiness and willingness on the part of
the plaintiff to perform the contract. This proposition
finds support from Balraj Taneja v. Sunil Madan
[Balraj Taneja v. Sunil Madan, (1999) 8 SCC 396]
and H.P. Pyarejan v. Dasappa [H.P. Pyarejan v.
Dasappa, (2006) 2 SCC 496] where this Court
approved the views taken by the Privy Council in
Ardeshir Mama v. Flora Sassoon [Ardeshir Mama v.
Flora Sassoon.
35. In Malluru Mallappa v. Kuruvathappa
[Malluru Mallappa v. Kuruvathappa, (2020) 4 SCC
313 : (2020) 2 SCC (Civ) 686] , this Court observed
and held :
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“13. It is a settled position of law that an appeal is
a continuation of the proceedings of the original
court. Ordinarily, the appellate jurisdiction involves a
rehearing on law as well as on fact and is invoked by
an aggrieved person. The first appeal is a valuable
right of the appellant and therein all questions of fact
and law decided by the trial court are open for
reconsideration. Therefore, the first appellate court is
required to address itself to all the issues and decide
the case by giving reasons. The court of first appeal
must record its findings only after dealing with all
issues of law as well as fact and with the evidence,
oral as well as documentary, led by the parties. The
judgment of the first appellate court must display
conscious application of mind and record findings
supported by reasons on all issues and contentions
(see : Santosh Hazari v. Purushottam Tiwari [Santosh
Hazari v. Purushottam Tiwari, (2001) 3 SCC 179] ,
Madhukar v. Sangram [Madhukar v. Sangram, (2001)
4 SCC 756] , B.M. Narayana Gowda v. Shanthamma
[B.M. Narayana Gowda v. Shanthamma, (2011) 15
SCC 476 : (2014) 2 SCC (Civ) 619] , H.K.N. Swami v.
Irshad Basith [H.K.N. Swami v. Irshad Basith, (2005)
10 SCC 243] and Sri Raja Lakshmi Dyeing Works v.
Rangaswamy Chettiar
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14. A first appeal under Section 96CPC is entirely
different from a second appeal under Section 100.
Section 100 expressly bars second appeal unless a
question of law is involved in a case and the question
of law so involved is substantial in nature.
*
18. It is clear from the above provisions and the
decisions of this Court that the judgment of the first
appellate court has to set out points for
determination, record the decision thereon and give
its own reasons. Even when the first appellate court
affirms the judgment of the trial court, it is required
to comply with the requirement of Order 41 Rule 31
and non-observance of this requirement leads to
infirmity in the judgment of the first appellate court.
No doubt, when the appellate court agrees with the
views of the trial court on evidence, it need not restate
effect of evidence or reiterate reasons given by the
trial court. Expression of a general agreement with
the reasons given by the trial court would ordinarily
suffice.
36. In H.P. Pyarejan v. Dasappa [H.P. Pyarejan v.
Dasappa, (2006) 2 SCC 496], Arijit Pasayat, J.
speaking for this Court reversed the judgment of the
High Court holding that the High Court did not
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provide reasoning for its conclusion that the plaintiff
was ready and willing to perform his part of contract.
To arrive at such conclusion the Court had relied
upon Cort v. Ambergate, Nottingham, Boston &
Eastern Junction Rly. Co. [Cort v. Ambergate,
Nottingham, Boston & Eastern Junction Rly. Co.,
where Lord Campbell observed that in common sense,
the meaning of such an averment of readiness and
willingness must be that the non-completion of
contract was not the fault of the plaintiff.”
95. The conduct of the plaintiff is highly doubtful and does not appear
to be that of a genuine purchaser interested in acquiring a property
measuring more than 300 acres. Having paid a substantial sale consideration
of Rs.10,00,001/- on 21.04.2005, followed by another sum of Rs.20,00,000/-
on 05.05.2005, and having claimed that the entire survey and measurement
were completed on 23.06.2005, the plaintiff issued the legal notice only in
the first week of July 2006. Even in the said legal notice, he has not made
any reference to the alleged handing over of physical possession of the
properties, the survey and measurement allegedly conducted through P.W.2,
the preparation of Exhibit A6, or the alleged availability of only 205.15
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acres as against the total extent of more than 300 acres agreed to be sold.
Further, he had filed the suit only on 24.11.2006 after the execution of the
sale deeds in favour of the defendants 5 to 7 by the original owner of the
properties, namely, first defendant. He does not even say which of the
scheduled properties belong to which of the Companies mentioned as the
first defendant.
96. All these circumstances categorically demonstrate that the plaintiff
has not approached the Court with clean hands and has failed to substantiate
his assertion that he was always ready and willing to perform his part of the
contract.
97. The Trial Judge completely overlooked these critical factors and
misdirected himself in accepting the testimony of P.W.1 and P.W.2 as
substantially true. He had not considered the implication of the material
documents brought on record.
98. It is further necessary to note that defendants 5 to 7 have not only
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produced their title documents but have also produced the pattas and revenue
records standing in their respective names in respect of the suit schedule
properties. The availability of revenue records in favour of defendants 5 to 7
in respect of a major portion of the suit schedule properties coupled with the
payment of taxes by them, substantially establishes their claim of possession
and enjoyment. The plaintiff's claim of possession therefore appears to be
without any merit. Except for the self-serving oral testimony of the plaintiff
and his witness, P.W.2, there is no other material to establish that possession
had actually been handed over to the plaintiff.
99. The Learned Judged erred in holding that the possession should
have been handed over to the Plaintiff. The mere statements in Exhibits A1
and A2 that, upon payment of the second instalment of Rs.20,00,000/- on
05.05.2005, it would be the responsibility of the agreement holder to arrange
for a survey of the lands at his own cost and take possession thereof after
completing the survey and measurement does not establish that vacant
possession of the properties had actually been handed over to the plaintiff.
There must be some further material, apart from the recital in the agreement
of sale, to substantiate the alleged handing over of possession. There is no
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material on record to establish that the plaintiff had not only taken
possession of the properties but had also made improvements therein by
planting trees. We accordingly answer the issues 1,3 & 5 against the original
plaintiff.
100. One another point canvassed on the side of the appellants is that
the plaintiff cannot compel the landowners to agree to a part performance of
the contract. In other words, they claim that the landowners cannot be
compelled to execute a sale deed in respect of 205.15 acres alone, when the
agreement of sale relates to more than 300 acres of land situated across five
villages, including an additional extent of 20 cents in Palarapatty village. We
are able to see that, though the schedule of property in the sale agreement
denotes 300 plus acres of land, the terms of the agreement specifically
provide that upon completion of survey, only for the identified lands the sale
consideration shall be finally determined and the last instalment of the
payments shall be made. In fact, the quantum of the last payment is left
undetermined in the sale agreement only for the said purpose. We are
therefore unable to accept this contention canvassed by the landowner that
the suit is bad for seeking part performance of the contract. Section 12 of the
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Specific Relief Act or the exceptions carved there under are not attracted to
the facts and circumstances of the present case.
th
101. With regard to the 4 issue as to whether the defendants 5 to 7
are bona fide purchase of the value of the property without the knowledge of
the sale agreement, the trial Court had come to a conclusion that the
defendants 1 to 4 are not the bona fide sellers of the property, because there
had been an exchange of legal notices between defendants 1 to 4 and the
plaintiff, at the time of execution of the sale deeds in favour of defendants 4
to 7. In our opinion, the trial Court, had misconstrued the principles
governing the determination of bona fide purchase and whether a purchaser
of immovable property had notice of an earlier agreement of sale. It has not
been established to the satisfaction of this Court that defendants 5 to 7 had
any knowledge of the agreement of sale that existed between the plaintiff
and defendants 1 to 4.
102. It is admitted by P.W.1 during his cross-examination that the
agreement of sale was not registered. It is also admitted that no paper
publication or public notice was issued regarding the existence of the
agreement of sale. When defendants 5 to 7 have categorically stated that
they were unaware of the existence of any earlier agreement of sale, and
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when their sale deeds are specific and supported by the relevant title
documents, including particulars of the parent documents, registration
numbers and dates under which the properties had originally been purchased
by the respective companies, their claim requires consideration.
102.1. The subsequent purchasers have also obtained mutation of the
revenue records in their respective names. In the absence of any other contra
material, we are unable to attribute knowledge of the earlier agreement of
sale to defendants 5 to 7.
102.2. It is not the case of the plaintiff that the defendants 5 to 7 were
not purchasers for value. His contention is only that the properties were sold
for a consideration lower than the amount agreed to be paid by him. Merely
because the properties were subsequently sold for a lesser consideration of
Rs.14,000, it cannot be concluded that the subsequent purchasers were not
bona fide purchasers for value.
102.3. The materials on record demonstrate that defendants 5 to 7 are
bona fide purchasers for value and that they have not been shown to have
had knowledge of the existence of the earlier agreement of sale.
103. We, therefore, set aside the finding of the learned trial Judge that
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defendants 5 to 7 were not bona fide purchasers for value and hold that they
are bona fide purchasers for value without notice of the earlier agreement.
104. Accordingly this Appeal Suit is allowed. The judgment and
decree passed by the Learned Additional District Judge (Fast Track Court),
th
Periyakulam dated 29 April 2008 in Original Suit No.52 of 2006 is set aside
and it stands dismissed. No other alternative or additional relief is sought by
the plaintiff and because of the embargo under Section 22 (2) of the Specific
Relief Act, 1963, no other claim can be entertained by this Court. No costs.
(M.D.I.,J.) (N.D.K.,J.)
13-11-2026
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
MM
To
The Section Officer
VR Section
Madurai Bench of Madras High Court
Madurai
__________
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AS(MD) No. 265 of 2008
M.DHANDAPANI, J.
AND
N.DILIP KUMAR, J.
A.S. (MD) NO.265 OF 2008
13.11.2026
__________
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