(Appeal under Section 96 of CPC against the judgment and decree dated 18-02-2010 in O.S.No.47 of 2010 on the file of the III Additional Chief Judge, City Civil Court, Hyderabad.)
Nooty Ramamohana Rao, J.
1. This appeal has been preferred by the plaintiff, in somewhat extraordinary circumstances, against the judgment and decree passed in the suit instituted for specific performance of agreement of sale.
2. The plaintiff is a partnership firm registered under the Indian Partnership Act and so was the defendant. The defendant owned a house property situated at Road No.17 of Jubilee Hills locality at Hyderabad, standing on a plot of land of an extent of 1147 sq.yds. The defendant has purchased the said house property through a registered sale deed bearing No.5426/2002 executed on 27.09.2002. The said house property was offered for sale for a total sale consideration of Rs.8,31,00,000/- (Rupees Eight Crores Thirty One Lakhs Only) and accepting the same the plaintiff firm paid an amount of Rs.15.00 lakhs upfront as token advance through a cheque bearing No.024816 dated 23.12.2009 drawn on Vijaya Bank, Vijayanagar Colony, Hyderabad. The defendant firm acknowledged the receipt of the said money by passing on a receipt on 23.12.2009 stipulating the terms and conditions mutually agreed to by and between the parties. The plaintiff firm was required to pay a further sum of Rs.2,35,000/- within ten days time. It was agreed by the defendant to execute the necessary sale deed after receiving the balance sale consideration within three months from 23.12.2009. It is also stipulated that, if the plaintiff firm fails to pay the remaining amount of Rs.2,35,000/- within 10 to 15 days, the token advance amount will be cancelled. According to the plaintiff, the house property in question was mortgaged earlier in favour of South Indian Bank by the defendant and the said bank raised a demand for payment of a sum of Rs.1,58,00,000/-. Therefore, the plaintiff has asserted that, it has obtained a demand draft in favour of South Indian Bank in a sum of Rs.1,58,00,000/- on 06.01.2010, as desired by the defendant and he has also drawn a cheque for a sum of Rs.77,00,000/- in favour of the defendant firm representing the balance amount of Rs.2,35,000/- agreed to be paid on 23.12.2009. However, the defendant firm has declined to entertain the plaintiff and consequently it did not accept the demand draft and the cheque set out supra. It is the case of the plaintiff that, on 22.01.2010 they got issued a legal notice calling upon the defendant firm to perform its part of the obligation by executing registered sale deed duly conveying the title to the house property agreed to be sold by the defendant after receiving the balance sale consideration amount within a month’s time. But however, it appears, the defendant started negotiating with third party for sale of the house property in question and thus started creating a third party interests in the house property agreed to be sold by the defendant. In those set of circumstances, suit O.S.No.47 of 2010 came to be instituted on 29.01.2010 seeking the following reliefs:
“i) Directing the defendant firm to execute the registered sale deed in favour of the plaintiff firm by receiving balance sale consideration of Rs.8,16,00,000/- (rupees eight crores sixteen lakhs) and hand over the vacant possession of the suit Schedule property, failing which the Hon’ble Court may be pleased to execute the registered Sale deed on behalf of the defendant firm in favour Of the plaintiff firm and put him in possession of the suit schedule property.
ii) to award the cost of the suit.
iii) to grant any other relief or relief’s which the Hon’ble court deems fit and proper In the Circumstances of the case n the interest of justice.”
3. It will also be appropriate to notice that the plaintiff filed Interlocutory Application No.393 of 2010 in the said suit seeking grant of an injunction to restrain the defendant firm from alienating the suit property or creating third party interests thereon. It will be appropriate to notice that, on behalf of the defendant firm, Sri Dharma Teja, the Managing Partner has filed a detailed counter and additional counter to the averments contained in the affidavit filed in support of I.A.No.393 of 2010. It is agreed that the defendant firm has consented to sell the house property for a total sale consideration of Rs.8,31,00,000/- and that the plaintiff has paid a token advance amount of Rs.15,00,000/- on 23.12.2009. It is agreed that the suit property is mortgaged earlier in favour of South Indian Bank, S.D. Road Branch, Secunderabad and an amount of Rs.2,35,00,000/- is required for discharging the outstanding liability towards the South Indian Bank and thus retrieve the original documents from the said bank. It is stated in paragraphs 3 and 4 of the counter affidavit, inter alia as under:
“3. ………….. When I insisted for making payment on 05.01.2010, petitioner started bargaining over price, by offering Rs.7,50,00,000/- in respect of the above property on the ground that there is steep fall in the real estate arena and offered to make a part payment of Rs.2,35,00,000/-, to which I did not accede and made it clear to the petitioner that the hand receipt is cancelled and further intimated that they are forfeiting the token advance of Rs.15,00,000/-. Thereafter the petitioner did not respond nor offered to purchase the schedule property for the price agreed to under the above mentioned hand receipt.
4. It is submitted that thereafter the respondent entered into sale transaction with Sri Jyothi Prakash Tibrewala and M/s Tiberwala Electronics by way of agreement of sale dated 21.01.2010. Token advance of Rs.25 lakhs was credited to the account of the respondent on 08.01.2010. As per the terms and conditions of the said agreement of sale, M/s Tiberwala Electronics cleared the loan amount on 21.01.2010 and got the original document released from our Banker. Thus the loan account was closed on 22.01.2010. An amount of Rs.25,00,000/- was credited to the account of the respondent on 08.01.2010. At present the original document i.e. the sale deed and all other documents are lying with said purchaser. …………”
4. In paragraph 5 of the counter affidavit, it is pleaded by the defendant that, though it had an option to forfeit the token advance amount of Rs.15,00,000/-, but still, it agreed to refund the same and accordingly drawn the demand draft bearing No.552606 dated 21.01.2010 for an amount of Rs.15,00,000/- and as the petitioner did not come forward for collecting the same, he had sent a copy of the said demand draft (not the original) under a covering letter dated 23.01.2010. The defendant further alleged that the plaintiff made an unjust demand to pay an additional sum of Rs.10,00,000/- failing which the defendant has been threatened with litigation. It will also be appropriate to notice what the defendant has set out in paragraph 6 of his counter affidavit filed in I.A.No.393 of 2010. The relevant portions read as under:
“6. It is submitted that that we were dismayed to come across a public notice got issued by the petitioner on 25.01.2010 projecting as if the agreement between the petitioner and the respondent is subsisting. By this time, the petitioner was very much aware of the sale transaction between the respondent and M/s Tiberwala electronics. ……………………………………
….……….. Admittedly Petitioner failed to make the payments as per the schedule indicated in the hand receipt dated 23.12.2009. Therefore the question of the respondent selling the subject property to the Petitioner does not arise more so when respondent already entered into sale transaction with the above mentioned third party by receiving substantial sale consideration, in whose custody the original documents of the above property are lying.”
5. In paragraph 8 of the same counter affidavit, a plea was raised that the suit is liable to be dismissed for non-joinder of the subsequent purchasers.
6. In an additional counter affidavit filed in I.A.No.393 of 2010, this is what the defendant/respondent has stated:
“2.………………. I am issued notices from M/s South India Bank calling upon us to clear off the loan taken from them and thus invoked the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The said Bank under notice dated 14.12.2009 demanded the respondent to handover the possession of the schedule mentioned property on the date mentioned therein. Eventually, I could convince the Bank to give some time for clearing the dues. Thus I was in dire need of the money and could not wait any longer.”
7. In paragraph 3 of the additional counter affidavit, the grave necessity to raise funds to the tune of Rs.3,00,00,000/- by the defendant for purposes of medical treatment of a child of the partners of the defendant firm have been detailed.
8. In paragraph 5 of the additional counter affidavit, it has been stated as under inter alia:
“5.………….. In fact, petitioner is not serious in purchasing the suit schedule property and by seeking to prevent us from selling the suit schedule property, he is contemplating to knock off the suit schedule property at a lesser price. We are not in a position to decrease the price, as the sale proceeds from the suit schedule property would be diverted to the treatment and other related things………..”
9. Immediately soon thereafter, the defendant in the suit, filed I.A.No.633 of 2010 with the following prayer:
“3.Therefore it is prayed that the Hon’ble Court may be pleased to pass a Judgment and Decree in terms of prayer (i) of the plaint i.e. “i) Directing the defendant firm to execute the registered sale deed in favour of the plaintiff firm by receiving balance sale consideration of Rs.8,16,00,000/- (rupees eight crores sixteen lakhs) and hand over the vacant possession of the suit schedule property, failing which the Hon’ble Court may be pleased to execute the registered sale deed on behalf of the defendant firm in favour of the plaintiff firm and put him in possession of the suit schedule property and pass such other order or orders as deem fit and proper in the circumstances of the case.”
10. This application appears to have been moved on 15.02.2010. The plaintiff in the suit filed a detailed counter affidavit to the said I.A.No.633 of 2010. The plaintiff resisted the attempt of the defendant to get the suit abruptly decreed without attending to the essential requirement of getting the title of the suit property cleared. The plaintiff is not very sure as to whether the defendant has cleared the outstanding loan amount to the South Indian Bank. It was not also very sure as to whether the defendant has cancelled an earlier agreement of sale entered by it with one Sri K.V.K. Chanukya and it was also not confident as to whether the encumbrance created by the defendant in favour of 1) Sri Jyothi Prakash Tabrewala and 2) M/s Tabrewala Electronics Limited by entering into an agreement of sale concerning the same suit schedule property, has been sorted out or not. Without there being valid and clean title to the suit schedule property, the plaintiff resisted the suit to be decreed. Hence the plaintiff, concluded its counter affidavit with the following prayer:
“In the circumstances and facts this Respondents prays that this Hon’ble Court may be pleased to direct the Petitioner to clear the claims of Mr. K.V.K. Chanukya and 1) Jyothi Prakash Tabrewala and 2) M/s Tabrewala Electronics Limited and produce the relevant documents to that extent before directing the Respondent to pay balance consideration.”
11.This counter affidavit appears to have been filed by the plaintiffs on 18.02.2010. On the same day the Managing Partner of the defendant has filed a memo into the Trial Court listing out the documents that are available and listed them as items 1 to 12. Most significantly, the memo sets out that the original document dated 26.12.2009 and the agreement of sale dated 09.11.2009 entertained into by it with Sri K.V.K. Chanukya is not available as on the said date. Only a photocopy of the agreement dated 09.11.2009 and a letter of undertaking dated 26.12.2009 cancelling the said agreement of sale deed dated 09.11.2009 appear to have been furnished by the defendant.
12.On the same day i.e. 18.02.2010, the learned III Additional Chief Judge, City Civil Court, Hyderabad, passed a judgment decreeing the suit. The short judgment rendered by the Trial Court runs as under:
The defendant’s side filed petition in I.A.633 of 2010 admitting the suit claim saying no objection to decree suit and it is also endorsed on the plaint to that effect. Hence suit is decreed granting relief of Specific Performance directing the defendant to execute sale deed in favour of plaintiff receiving the balance of sale consideration that the plaintiff shall deposit Rs.3 crores into Court within 3 days from today upon such deposit the defendant is at liberty to withdraw said amount giving undertaking to execute sale deed on receiving further balance of consideration within 10 days from today and defendant shall execute sale deed within 15 days of such deposit at the expenses of plaintiff and if defendant fails to execute sale deed so, the plaintiff is at liberty to get sale deed executed through Court as per Law and defendant shall deliver all link original relevant documents to plaintiff at the time of registration and if plaintiff fails to deposit the amounts within prescribed time as granted by Court the decree shall becomes unexecutable and no order as to costs.
Written and pronounced by me in open Court this, the 18th day of February, 2010.
III Additional Chief Judge,
City Civil Court, Hyderabad”
Accordingly, a decree was drafted.
13.Challenging this judgment and decree, the plaintiff has preferred this appeal.
14.Heard Sri D. Prakash Reddy, learned senior counsel who appeared on behalf of Sri S. Sridhar, learned counsel for the appellant and Sri Vedula Venkata Ramana, learned senior counsel who appeared on behalf of Sri V.R.N. Prasanth, learned counsel for the defendant/respondent in this appeal.
15.Learned senior counsel for the appellant Sri D. Prakash Reddy has pointed out that, without addressing the most crucial question of securing a clear title to the suit schedule property, the Trial Court has hurriedly passed the impugned judgment and decree and the learned Additional Chief Judge had not even adverted to the genuine apprehensions aired by the plaintiff in the detailed counter filed by it to I.A.No.633 of 2010 moved by the defendant. It is therefore contended that, what has been passed by the Trial Court is not a judgment or decree in the eye of law.
16.Per contra, Sri Vedula Venkata Ramana, learned senior counsel has raised a fundamental objection for the maintainability of this appeal on the ground that, no such appeal would lie in terms of Sub-section 3 of Section 96 of the Code of Civil Procedure. This apart, contends the learned senior counsel, the bluff of the plaintiff in the suit that it is ready and willing to perform it’s part of the obligations arising out of the agreement is called as it has failed to comply with the time schedule specified by the Trial Court and if the plaintiff in the suit had any peculiar or particular difficulty to comply with any such terms, he can only go back to the same Court which passed the judgment and decree and seek enlargement of the time schedule. Learned senior counsel has also placed reliance upon the judgment rendered by the Supreme Court in Hungerford Investment Trust Limited (In Voluntary Liquidation) Vs. Haridas Mundhra and others (1972) 3 Supreme Court Cases 684and the Judgments of our Court rendered in Cherukuri Venkata Rao Vs. Brahmojosyula Bala Gangadhara Sharma 1987-ALT-2-229and another and Desi Kedari Vs. Huzurabad Co-operative Marketing Society Ltd and others AIR 1994 ANDHRA PRADESH 301.
17.It would be appropriate at the very outset to deal with the objection raised by the learned senior counsel for the respondent/defendant about the maintainability of this appeal. Section 96 of the Code of Civil Procedure provided for appeals from original decrees. Sub-section (1) thereof makes it clear that an appeal shall lie from every decree passed by any Court exercising original jurisdiction to the Court authorized to hear appeals from the decisions of such Court, unless otherwise provided expressly in the said code or by any other law for the time being in force. Sub-section (3) thereof reads as under:
“(3)No appeal shall lie from a decree passed by the Court with the consent of parties”
18.Sub-section (3) of Section 96 of the Code enunciates a salutary principle of drawing to a close, once and for all, further litigation arising from out of a decree passed with the consent of the parties. The litigative zeal of the parties was intended to be checked by the aforementioned provision. But the crucial requirement for applicability of this principle is the “consent of parties”. These expressions signify that the consent must be of not one party, but both parties to a lis. If one party agrees for passing a decree, while the other party expresses reservation for such a hurried course of action to follow, it cannot be construed that the other party has accorded its consent for the decree. A decree can be passed only when both the parties to the lis unreservedly exercise their consent. The plaintiff in a suit, can be said to have no objection for his suit to be decreed. But, it must not be an implied one. Any action in every case does not invariably lead to an inference of implied consent of such a party.
19.The expression ‘Consent’ has been defined in Blacks Law Dictionary VII Edition as meaning agreement, approval, or permission as to some act or performance, especially given voluntarily by a competent person. The expression ‘Consent Decree’ is defined by the same dictionary as, a court decree that all parties agree to. The Living Webster Encyclopedia Dictionary defined the verb ‘Consent’ as under:
“To agree, to accord, to yield, as to persuation, to comply, to acquiesce or accede”
It therefore becomes imminently clear that the expressions ‘Consent of Parties’ contained in Sub-section (3) of Section 96 mean agreement of both the parties on the same thing in the same sense.
20.In the instant case, we have noticed already that, the plaintiff in the suit had not extended or accorded the consent for passing the decree as of 18.02.2010. He had in fact expressed reservations in his counter affidavit filed in I.A.No.633 of 2010 moved by the defendant in the suit. He was not confident that the suit property has been rid off all encumbrances created by the defendant thereon. We have also noticed that, he had prayed for a relief in the said counter affidavit other than for passing a decree in the suit itself. The plaintiff in fact raised an objection as to the maintainability of the said interlocutory application at the very outset of his counter affidavit. Therefore, we are clearly of the opinion that the consent of the plaintiff for passing a decree in the suit, at that stage, is essentially missing.
21.The short judgment rendered by the learned Trial Court Judge did not even labour to record the consent of the plaintiff for passing the judgment and decree in the suit. The judgment merely recorded the consent of the defendant but not that of the plaintiff. Hence, the judgment and decree passed in the original suit cannot be described as a decree passed by the court with the consent of the parties, for it to attract the bar in terms of Sub-section 3 of Section 96 of the Code of Civil Procedure. We, therefore, reject the contention canvassed about the maintainability of this appeal.
22.It is no doubt true that, it s a settled principle of law that the Court which passes a decree for specific performance retains control over such a decree even after the decree has been passed and that is exactly what has been set out by the Supreme Court in Hungerford Investment Trust Limited case. The question that was engaging our attention was about the manner in which the judgment and decree was passed in the civil suit. That, perhaps, could not have been the subject matter of consideration of the same Court, excepting in a review exercise of jurisdiction. We, therefore, do not agree with the contention of the learned counsel for the appellant that we cannot examine the correctness and validity of the judgment and decree passed by the Trial Court in the original suit and that it must be left to the same Court.
23.In fact, in Cherukuri Venkata Rao’s case also, the Division Bench of this Court had set out the same principle. Desi Kedari’s case turned completely on its facts. Both parties had consented in that case for a decree to be passed, but however, subsequently an objection has been raised on behalf of the respondent-Cooperative Society that it is not capable of giving any such consent. Therefore, Desi Kedari’s case is of no help to the respondent/defendant.
24.Learned senior counsel for the respondent has also urged that the judgment and decree passed by the Trial Court can be said to be one which is passed under Rule 6 of Order 12 of Code of Civil Procedure. Rule 6 of Order 12 of the Code empowers the Court at any stage of the suit, where admissions of fact have been made, either in the pleading or otherwise and without waiting for the determination of any question between the parties, to make such order or give such judgment as it may think fit, having regard to such admissions. Similarly, Rule 1 of Order 15 of the Code enables a Court to pronounce its judgment at once where at the first hearing of a suit, it appears that the parties are not at issue on any question of law or of fact. The rationale behind these provisions is not far to seek. A judgment and decree can be passed by the Court if the parties are not at issue and they admit of all facts and circumstances pleaded in the case before it. But any such order or judgment must be just, fair and reasonable. Hence, the Court is required to apply it’s mind to the facts and then pass the order but it cannot do so mechanically. We have already noticed supra that the defendant in the counter affidavit and the additional counter affidavit filed by it to I.A.No.393 of 2010 moved by the plaintiff, has pleaded that the agreement between the parties dated 23.12.2009 stood cancelled by 06.01.2010 and it was also pleaded by the defendant in the suit in no unmistakable terms that it has already entered in to a sale with regard to the suit schedule property with M/s Tiberwala and company. After having said so, on 15.02.2010, the defendant has exercised his consent for passing a decree in the suit. In our opinion, the defendant has over-reached the situation. He was playing hot and cold simultaneously. On one breath, he alleges breach of contract by the plaintiff which disentitles the equitable decree of specific performance of the contract to be passed and he also pleads cancellation of the suit agreement. On the other, he seeks a decree to be passed for the specific performance of the same agreement. Per contra, the plaintiff was urging that he has not breached the contract inasmuch as the plaintiff was required to pay, only after receipt of certain documents, a further sum of Rs.2,35,00,000/- as per Clause 2 of the receipt dated 23.12.2009, which reads to the following effect:
“2.After Receiving all the connected documents of this house site from our side, M/s Raghava Constructions will pay Rs.2,35,00,000/- (Rupees Two Crores Thirty Five Lakhs Only) within 10 days of time. With this total advance paid will be Rs.2,50,00,000/-”
25.The plaintiff was therefore urging that the payment of Rs.2,35,00,000/- would only follow after the connected documents of the suit property are made available by the defendant. It is their case that, by 22.01.2010 the connected documents have not been made available by the defendant. Therefore, we are clearly of the opinion that the parties are not ad idem on all the relevant issues and facts involved in the case which are so essentially required for determining the lis. Hence the judgment and decree passed in O.S.No. 47 of 2010 has not attempted to decide the lis and hence is unsustainable.
26.We are, all through, alive of the urgency of the defendants to sell the suit property. The defendant needed money for meeting the grave medical emergency of the child of the partners of the defendant. Therefore, we have passed orders on 25.02.2010 and also 19.03.2010 protecting and safeguarding the interests of both parties to this lis. We have no doubt in our minds that those two interlocutory orders passed by us would be taken note of and considered appropriately by the Trial Court when it takes up the original suit for further consideration.
27.For the aforementioned reasons, we allow this appeal, set-aside the judgment and decree passed on 18.02.2010 in O.S.No.47 of 2010 and remand the case back for consideration afresh, without in any manner being influenced by whatsoever set out in this judgment. The parties will bear their respective costs.