TaxTMI 
TaxTMI 
2008 (12) TMI 778
X X X X Extracts X X X X
X X X X Extracts X X X X
....Srinivas Reddy, whose heirs and legal representatives are the appellants, for sale of the said property for a sum of Rs. 18,00,000/-, out of which a sum of Rs. 1,00,000/- was paid as earnest money. Some of the important clauses contained in the said agreement for sale read as under: "1. The total consideration being Rs. 18 lakhs, the Vendees have paid a sum of Rs. 1,00,000/- (Rupees One lakh only) to the Vendor as the earnest money. The balance sum of Rs. 17 lakhs shall be paid within 6 months of release of tentative layout HUDA. 2. The sale shall take effect within 6 months from the release of tentative layout from B.U.D.A. (Bhagyanagar Urban Development Authority). 3. The actual physical possession of the property shall remain with the Vendors only. However, the Vendors hereby give permission to the Vendees to go over the property and divide the property into different plots. The expenses for dividing plots and leaving roads shall also be borne by the Vendees. The Vendees are entitled at their own expenses to obtain the layout permission from Competent Authority. The Vendees are also hereby permitted to use the Telephone however they shall be liable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or grant of layout permission in respect of other plots. By a communication dated 26.4.1985, the said Shri Yadagiri was informed about the grant of layout not only in respect of the land of which he was the owner but also in respect of Survey No. 36 subject to the following conditions: "i) The Road shall be formed as per the specifications (enclosed a copy of the specifications). ii) No plot shall be utilized, sold, leased or otherwise disposed of for the residential purpose unless the layout is finally approved by Hyderabad Urban Development Authority. iii) As regards to amenities like water, drainage, electricity, etc; your own arrangement shall be made as the public system is not available in this area." It was furthermore directed: "You are therefore requested to form the roads as stated above within a period of three months from the date of receipt of the draft layout plan and to inform the same to Hyderabad Urban Development Authority. The final approval of the layout plan will be considered only if you fulfill the above said conditions." Admittedly, no road was constructed. Plaintiffs wanted to have a fresh layout only in respect of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ddl Judge, City Civil Court at Hyderabad praying, inter alia, for the following reliefs: "(a) A decree for Rs. 90,000/- by way of refund may be passed in favour of the plaintiff and against the persons and the properties of defendants 1 to 3. (b) A decree may be granted awarding future bank interest on Rs. 90,000/- in favour of the plaintiff and against the persons and the properties of defendants 1 to 3. (c) A decree may be passed for Rs. 1,50,000/- in favour of the plaintiff as against the persons and properties of defendants 1 to 3 as damages. (d) A decree of further interest on Rs. 1,50,000/- may be granted in favour of plaintiff as against the persons and properties of the defendants 1 to 3." 10. Indisputably, an interim order was passed therein. The matter was taken to the High Court. The said Mohammed Kasim Ali died on 19.4.1987 and after his death his wife, the legal representative, entered into a compromise with the owners of the land out of the court. 11. Indisputably, G. Srinivas Reddy filed a suit bearing O.S. No. 171 of 1986 on the file of the Munsif Magistrate, West and South, Ranga Reddy, for grant of mandatory injun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing to the learned trial judge, however, as the defendant Nos. 1 to 3 had signed the requisite documents and also received the required fee and charges for the purpose of depositing the same with HUDA with a view to obtain the provisional layout plan, they have accepted their responsibility to obtain layout for the suit land from the Urban Development Authority. It was furthermore held: "No doubt it is for the plaintiff and D4 to pay the necessary expenses and also make efforts to obtain the sanction from HUDA being the vendees. The responsibility of D1 to D3 or their G.P.A. is to sign the necessary documents required for obtaining layout sanction and also to deposit the amounts paid by the Plaintiff and D4 required for the fee and charges as they did in the instant case. Since the Defendants 1 to 3 agreed to convey the suit property in favour of plaintiff and D4 or their nominees, D1 to D3 are bound to obtain a separate layout for the suit land, at the request of the Plaintiff and D4." Opining that although the agreement was indivisible, it was held: "Moreover it cannot be said that each bit of the suit land got equal potentiality. The suit land consists....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or specific performance can be instituted even at the instance of any of the joint promisees as a common layout work was not contemplated under the agreement and, thus, the High Court committed a serious error in arriving at a finding that the appellants were not ready and willing to perform his part of the contract. ii. The suit having been filed within the prescribed period of limitation, the High Court committed a serious error of law in opining that time was of essence of the contract and, thus, the suit for specific performance was not maintainable and it should have been filed much earlier, although in fact the same had been filed within a period of one and half years from the date of refusal on the part of the owners - defendants 1 to 3, to abide by the terms of the contract. iii. Order II Rule 2 of the Code of Civil Procedure being not applicable in a case of this nature, the High Court committed a serious error in applying the principles thereof. 18. Mr. P.P. Rao, learned Senior Counsel appearing on behalf of the respondents, on the other hand, urged: i. The agreement in question being a development agreement should be construed having regard ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich had been taken before us, admittedly, was taken by the said G. Srinivas Reddy only in reply to the defendant No.1's legal notice dated 3.7.1985. The said notice was responded to by the Advocate appointed by G. Srinivas Reddy alone. No such demand was, thus, raised by Mohammed Kasim Ali. 23. In the matter of performance of the said agreement, the appellants did not raise the same contentions, as has been raised before us as regards the performance of contract on the part of the vendors. At that point of time they did not say that the vendors committed any breach of the condition of the agreement for sale. Even in the said reply dated 25.7.1985, it had not been pointed out that said G. Srinivas Reddy alone was ready and willing to develop the plot being Survey No. 36, irrespective of the stand taken by the Mohammed Kasim Ali. 24. Admittedly, the agreement was entered into on 23.4.1984. The contract was to be performed within a period of eight months. A joint tentative layout plan for both the lands was granted on 26.4.1984. Nothing has been placed on record to show as to when the disputes and differences between the vendees inter se began or when the disputes and diffe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e others. The wording is not `either side thereto' or even `either party thereto', but any party thereto'. The word `any' indicates one out of a number of persons more than two. If only two parties are contemplated the correct adjective would be `either' or at the most `both'. The argument advanced was that the contract cannot be enforced piecemeal and that the Courts cannot make a new contract for the parties. Of course not; but the plaintiffs are not doing that. They want the original contract enforced just as it was made. They want to buy the property and want the Court to compel their co-contractors Anantram to buy it along with them just as he had promised to do, and ask the Court to compel the defendants to sell it to all four in exact accordance with the agreement. So long as the plaintiffs are willing to pay the vendors the full price bargained for and ask them to sell to the very persons with whom they had contracted I am unable to see how there is any variation. Any quarrel the purchasers may have among themselves is not being introduced into this suit. Each party is getting exactly what he bargained for and it is no concern of the vendors how thes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dicta laid down in Jahar Roy (Dead through L.Rs.) & Anr. v. Premji Bhimji Mansata & Anr. (supra) was followed by the Madras High Court in Ponnuswami Gounder v. Boyan & ors. [AIR 1979 MADRAS 130]. The Madras High Court held that the decision of the Calcutta High Court in Safiur Rahman v. Maharumunnissa Bibi [(1897) ILR 24 Calcutta 832] was not good law opining that as both the vendees had different rights, one can purchase the right of the other, stating: "In my opinion, the ratio of the judgment is that where the plaintiff is entitled to the relief, merely because some of them have refused to join him as plaintiffs or even where they do not want the specific performance of the agreement, his right could not be jeopardised by such refusal by the other parties. In such a case, I am of the view that if the defendants do not want to pay the money, the plaintiffs would have to pay the entirety of the consideration payable under the agreement to convey or reconvey, as the case may be and on such deposit of the entire money, he would be entitled to get a conveyance of the entirety of the property though it should normally be in favour of the plaintiff and the defendants in whose ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ic performance immediately thereafter. He first filed a suit for mandatory injunction. We are not concerned with the maintainability thereof. We would assume that the said suit was maintainable. But the fact that he did not choose to file a suit for specific performance of contract at the first instance speaks volumes about his conduct. The civil courts, in the matter of enforcement of an agreement to sell, exercise a discretionary jurisdiction. Discretionary jurisdiction albeit must be exercised judiciously and not arbitrarily or capriciously. A plaintiff is expected to approach the court with clean hands. His conduct plays an important role in the matter of exercise of discretionary jurisdiction by a court of law. In Mohammadia Cooperative Building Society Limited v. Lakshmi Srinivasa Cooperative Building Society Limited & ors. [(2008) 7 SCC 310], this Court held: "71. Grant of a decree for specific performance of contract is a discretionary relief. There cannot be any doubt whatsoever that the discretion has to be exercised judiciously and not arbitrarily. But for the said purpose, the conduct of the plaintiff plays an important role. The courts ordinarily would not gra....