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Judgment
P.R. Shivakumar, J.—The suit was filed by the Respondent herein for the relief of specific performance to get a sale deed registered in respect of the suit property, namely 4.70 acres of land comprised in S. No. 296/part, 302/1B part and 302/2A of Millipadi Village, Dindigul Taluk and Dindigul District.
According to the plaint averments, the Appellant herein was the owner of the said property; the said property was needed for the erstwhile Tamil Nadu Spirit Corporation (TASCO) and instead of going for a straight acquisition under the provisions of the Land Acquisition Act, the Government decided to get it on private negotiation; that on such private negotiation, the Appellant herein/Defendant agreed to sell the said property for price to be fixed by the District Collector, acting as arbitrator, subject to revision and confirmed by the Government; that the terms of the agreement were not reduced into formal written agreement; that on the other hand with the consent of the Appellant herein/Defendant, possession was taken on 13.06.1990 itself, with the understanding that the transaction would be completed on the basis of the land value to be fixed by the Collector, subject to confirmation by the Government; that pursuant to the same, the District Collector fixed the land value at Rs. 29,000/- per acre and communicated the same to the Appellant herein/Defendant by a letter dated 24.09.1990; that on receipt of the said letter, the Appellant herein/Defendant sent a reply expressing dissatisfaction with the quantum fixed as the land value and expressed its willingness to sell the property at the rate of Rs. 1,00,000/- per acre plus interest on the land value from 13.06.1990 i.e., from the date of taking possession till the date of registration; that after the receipt of the said reply, a meeting was convened and on discussion it was ultimately agreed to constitute a committee consisting the Collector of the Dindigul District, Managing Director of TASCO and the District Revenue Officer of Dindigul as Members to enter upon negotiations with the Appellant herein/Defendant for fixing the land value and that the committee thereafter made a recommendation on 11.04.1991 fixing the price of the land at Rs. 50,000/- per acre plus interest at the rate of 12% p.a. from the date of taking possession of the land by TASCO till date of payment of the land value.
It is the further contention made in the plaint that, on being intimated of the decision made by the committee, the Appellant issued a letter on 12.04.1991 requesting payment of atleast Rs. 90,000/- per acre at an early date together with interest at 12% p.a. from the date of taking possession till payment; that in the meanwhile the Government issued G.O. No. 38 dated 16.02.1992, fixing the value of the land at Rs. 50,000/- per acre plus 12% interest calculated on the same from the date of taking possession by TASCO plus a sum of Rs. 4,025/- for the trees standing on the above land; that the Appellant herein/Defendant instead of accepting the same and coming forward to execute the sale deed, chose to approach the High Court by way of a writ in W.P. No. 14767 of 1992 for a direction to the Government to re-deliver possession of the above said property; that meanwhile TASCO sent a letter on 16.06.1994 enclosing a cheque for a sum of Rs. 3,20,335/- representing the land value fixing at the rate of Rs. 50,000/- per acre and interest on the same calculated at the rate of 12% p.a. from the date of taking possession upto 30.04.1993; that the said cheque was accepted and encashed by the Appellant herein/Defendant without prejudice to its stand taken in the writ petition and its other rights; that ultimately the said writ petition came to be dismissed by the High Court on 16.12.1999; that even thereafter, the Appellant herein/Defendant did not come forward to execute the sale deed which necessitated the issuance of the letter dated 10.07.2000, to the Appellant herein/Defendant calling upon the Appellant to execute a registered sale deed in favour of TASCO; that even thereafter, the Appellant/Defendant did not come forward to execute the sale deed and on the other hand contended that the interest on the land cost should be paid for the subsequent period from 30.04.1993; that even the subsequent correspondence did not yield fruitful result as the Appellant herein/Defendant was bent upon delaying the execution of the sale deed; that meanwhile Tamil Spirit Corporation Limited (TASCO) and Tamil Nadu State Marketing Corporation Limited (TASMAC) came to be amalgamated by "Tamil Nadu Spirit Corporation Limited and the Tamil Nadu State Marketing Corporation Limited, Order (Amalgamation) 2002" from the date of notification, namely 09.01.2003 and the unified company after amalgamation came to be known as TASMAC and that hence, the Respondent herein/Plaintiff was constrained to file the suit for specific performance contending that the entire sale consideration had already been paid to the land owner, namely the Appellant herein/Defendant.
The suit was resisted by the Appellant herein/Defendant based on the contentions that the Appellant herein/Defendant offered to sell the property to TASCO for a reasonable price to be fixed by the Collector; that the District Collector of Dindigul fixed the land cost at Rs. 29,000/- per acre and a lumpsum of Rs. 4,025/- for the standing trees and the same was not agreeable to the Appellant/Defendant, resulting in his demanding fixation of the market value of the land at Rs. 1,00,000/- per acre and the value of the standing trees at Rs. 60,000/-; that subsequently the Government issued an order in G.O.(3D) dated 16.02.1993 ordering payment at the rate of Rs. 50,000/- per acre plus interest at the rate of 12% p.a. from the date of taking possession and also a sum of Rs. 4,025/- for the standing trees; that since the Appellant/Defendant was not agreeable for the same, it filed a Writ Petition in W.P. No. 14767 of 1992 seeking re-delivery of the land to the Appellant herein/Defendant based on the inordinate delay in fixation of proper price; that during the pendency of the writ petition, TASCO sent a cheque for a sum of Rs. 3,20,335/- representing the land cost and value of trees and interest calculated up to 30.04.1993; that the Appellant herein/Defendant received the said cheque and encashed it without prejudice to its contention in the writ petition and other rights; that the Appellant/Defendant thereafter expressed its willingness to execute the sale deed on payment of the land cost at the rate of Rs. 50,000/- per acre and Rs. 4,025/- towards the value of the trees together with interest on the same at the rate of 12% from the date of occupation till the date of registration of the sale deed; that in addition to the 4 acres 70 cents lands agreed to be sold, the Plaintiff had taken possession of 0.38 cents also for which area the Plaintiff should pay land cost at the rate of Rs. 1,00,000/- per acre with simple interest at 12% p.a. from the date of occupation till date of registration of sale and that the Respondent/Plaintiff should be directed to make payment of interest at the rate of 12% p.a. on Rs. 2,39,025/- representing the land cost and value of trees and interest from 01.05.1993 till the date of execution and registration of the sale deed and to pay the market value of the excess land of 0.38 acres calculated at the rate of Rs. 1,00,000/- per acre with simple interest at 12% p.a. from 13.06.1990, the date of taking possession till the date of registration of the sale deed as conditions precedent for decreeing the suit for specific performance.
Based on the above said pleadings, the learned trial Judge framed issues which were as follows:
Whether the Plaintiff is entitled to the relief of specific performance?
Whether the sale consideration fixed for the suit property is correct?
Whether the Defendant does have a right to claim interest on the amount fixed as per agreement?
To what other reliefs the parties are entitled?
Based on the above said pleadings, the parties went for trial, in which, one witness was examined as P.W.1 and 28 documents were marked as Ex.A.1 to A.28 on the side of the Respondent herein/Plaintiff and on the side of the Appellant herein/Defendant, only one witness was examined as D.W.1 and no document was marked.
The learned Principal Subordinate Judge, Dindigul (trial Judge), after considering the pleadings and evidence, both oral and documentary, came to the conclusion that the demands made by the Appellant herein/Defendant for payment of interest up to the date of registration and for payment of additional amount for 38 cents would not be sustained and that the Respondent herein/Plaintiff was entitled to the relief of specific performance. Consequently, the learned trial Judge decreed the suit as prayed for without attaching any condition as demanded by the Appellant herein/Defendant.
Aggrieved by and challenging the same, the Appellant herein/Defendant preferred an appeal on the file of the District Court in A.S. No. 36 of 2008. The same came to be made over to the Additional District Judge (Fast Track Court), Dindigul, the first appellate Judge for disposal, according to law. The learned first appellate Judge, after hearing both sides and upon considering the materials available on record, came to the conclusion that there was justification in the claim of interest made by the Appellant herein/Defendant to some extent. Though the Appellant herein/Defendant claimed interest for the cost of the land and value of the trees up to the date of execution and registration of the sale deed, the learned first appellate Judge held that the Appellant herein/Defendant was entitled to claim interest only up to 16.06.1994, namely the date on which a sum of Rs. 3,20,335/- was paid by way of cheque. The learned first appellate Judge was of the view that the said amount represents the land cost and interest up to 30.04.1993 and that therefore, for the period between 30.04.1993 and 16.06.1994, the Appellant herein/Defendant was entitled to get interest and directed the Respondent herein/Plaintiff to pay the said amount as condition precedent for grant of specific performance. Accordingly, the appeal was allowed in part and the decree of the trial Court was modified to the extent indicated above and in all other aspects, the decree passed by the trial Court was confirmed by the first appellate Court.
Aggrieved by the same, the Appellant herein has brought forth the present Second Appeal on various grounds set out in the memorandum of Second Appeal.
Since the appeal was filed with a delay, in the petition seeking condonation of delay, the Respondent herein entered appearance and the records have also been sent for and are made available in this Court for reference in this appeal. The learned Counsel for the Appellant and the learned Counsel for the Respondent expressed their willingness to take a judgment on merits at the time of admission itself, without adopting the formal procedure of first deciding the question of admission and then proceed with the merits of the case. Accordingly, the arguments advanced on behalf of the Appellant and on behalf of the Respondent were heard. The materials available on record were also perused.
The following questions of law are projected to have arisen in the Second Appeal is as follows:
(1) Whether the lower appellate Court has committed an error in allowing interest up to 16.06.1994 alone and rejecting the claim of interest made by the Appellant upto the date of payment of full sale consideration?
(2) Whether the Appellant/Defendant is entitled to claim interest up to the date of registration of the sale deed?
Point No. 1:
It is an admitted fact that the Appellant/Defendant was the owner of 4.70 acres of land comprised in S. Nos. 296/part, 302/1B part and 302/2A of Millipadi Village, Dindigul Taluk and Dindigul District. The said land was sought to be acquired for the use of the erstwhile Tamil Nadu Spirit Corporation, shortly called as TASCO. Instead of going for acquisition following the provisions of the Land Acquisition Act, the Government decided to get it on private negotiation. The Appellant/Defendant also agreed for conveying the property in favour of Tamil Nadu Spirit Corporation for a reasonable price to be fixed by the District Collector as Arbitrator, subject to approval by the Government. Possession was also taken on 13.06.1990. The District Collector initially fixed the market value of the property at the rate of Rs. 29,000/- per acre. The Appellant/Defendant did not agree for the same and demanded fixation of the market value at the rate of Rs. 1,00,000/- per acre and the sale consideration calculated at the said rate plus interest on the land value from the date of taking of possession, i.e., on 13.06.1990 till date of registration. Subsequently, the District Collector fixed the land value at the rate of Rs. 50,000/- per acre and an offer was made to fix the consideration at the said rate of land value plus interest at the rate of 12% p.a. calculated from the date of taking possession of the land by the Tamil Nadu Spirit Corporation till the date of payment of the land value.
No doubt the Appellant/Defendant demanded a higher amount as land value and interest on the land value at the rate of 12% p.a. from the date of taking possession till date of registration of the sale deed. However, the Government passed G.O. No. 38 dated 16.02.1993, fixing the sale consideration to be equivalent to the land value at the rate of Rs. 50,000/- per acre plus interest at the rate of 12% p.a. on the land value from the date of taking possession till the date of payment of the land value. Even thereafter, the Appellant/Defendant did not come forward to execute the sale deed in accordance with the agreement. On the other hand, the Appellant/Defendant chose to file a writ petition seeking a writ of mandamus for re-delivery of the property. Meanwhile there was amalgamation of Tamil Nadu Spirit Corporation with Tamil Nadu State Marketing Corporation Limited and hence, Tamil Nadu State Marketing Corporation Limited became the purchaser under the agreement for sale. Even during the pendency of the Writ Petition, the Respondent chose to make payment of Rs. 3,20,335/- representing the value fixed at the rate of Rs. 50,000/- per acre and interest on the same calculated at the rate of 12% p.a. from the date of taking possession up to 30.04.1993. The said payment was made on 16.06.1994. Even as per the contention of the Respondent/Plaintiff interest on the land value should have been paid up to the date of payment of the land value, namely up to 16.06.1994. But, for the reasons best known to the Respondent, the Respondent chose to make payment of the land value with interest calculated upto 30.04.1993 alone.
Of course ,the trial Court, while dismissing the suit for specific performance erroneously decreed the suit without attaching any condition regarding payment of the balance amount of consideration. On appeal, the learned first appellate Judge seems to have rectified the defect to some extent by directing payment of interest on the land value from 01.05.1993 to 16.06.1994. The payment of land value and interest was made by way of cheque for a sum of Rs. 3,20,335/-. It is pertinent to note that the said cheque was accepted and encashed by the Appellant/Defendant without prejudice. The pertinent question that has arisen is "whether the said amount represented the sale consideration and hence, the Appellant/Defendant is entitled to claim only interest?". A consideration of the consensus arrived at between the parties would show that land value as on the date of taking possession was fixed at the rate of Rs. 50,000/- per acre and that the same could not be considered to be the sale consideration and that the same is to be increased by an interest calculated on the land value at the rate of 12% p.a. from the date of taking possession up to the date of payment of land value. What is the date on which payment of land value was made? is the further question that arises for consideration. According to the Respondent, the land value was paid on 16.06.1994. But whether the land value was paid in full is another doubt, because the payment made on 16.06.1994 is towards sale consideration, which includes land value and interest as indicated above. The interest pointed out above should not be taken as an interest on the unpaid money of sale consideration. It forms part of the sale consideration itself. Therefore, the interest on the land value ought to have been calculated up to 16.06.1994 and added to the land value to arrive at the total sale consideration as on 16.06.1994. The Respondent has committed a mistake in calculating the interest up to 30.04.1993 alone and that is the reason why Rs. 3,20,335/- alone was paid. If the sale consideration up to the date of 16.06.1994 is calculated, it will come to Rs. 3,53,995/-. Out of the said total amount, Rs. 3,20,335/- paid on 16.06.1994 should be deducted and the balance amount, namely Rs. 33,660/- should be taken as unpaid sale consideration, which according to the agreement shall carry an interest at the rate of 12% p.a. upto the date of payment. Even if it is calculated in the alternative method, namely the amount paid on 16.06.1994 shall be first appropriated towards interest at 12% p.a. and thereafter, the balance amount should be appropriated towards the land costs, the above amount, namely Rs. 33,660/- shall be the balance amount of land value that remains unpaid. For the said unpaid land value, as per the agreement, interest at the rate of 12% p.a. should be paid upto the date of payment. For the balance amount of Rs. 33,660/- on the land cost, interest shall be calculated at the above said rate from 01.05.1993 upto the date of payment of the balance amount.
The lower appellate Judge has committed an error in holding that the Appellant/Defendant was entitled to interest only upto the date of 16.06.1994, the date on which part payment was made. The same is erroneous and perverse. Therefore, this Court comes to the conclusion that the condition for the grant of specific performance imposed by the lower appellate Court should be modified by directing payment of interest on the balance amount of land cost i.e., Rs. 33,661/- at the rate of 12% p.a. from 01.05.1993 till date of payment as against the direction to make such payment of interest till 16.06.1994. For the above said reasons, this Court comes to the conclusion that the learned lower appellate Judge has committed an error in this regard in rendering a finding upholding the claim of interest upto 16.06.1994 alone, which is perverse and not in accordance with the admitted terms of agreement and that therefore, the same needs revision and modification as indicated supra.
Point No. 2:
It is the contention of the Appellant that the Appellant shall be entitled to claim interest upto the date of registration of sale deed. The said contention is untenable and cannot be countenanced. The land owner shall be entitled to claim interest only upto the date of payment of the sale consideration on the land value or balance amount of land value. If the land owner, even after receiving the total amount of sale consideration as per agreement, fails to execute the sale deed and drags on the case for several years, there shall be no justification in granting interest up to the date of execution of the sale deed. Such an unjustifiable claim made by the Appellant/Defendant cannot be sustained. As pointed out supra, the Respondent/Plaintiff shall be liable to pay Rs. 33,661/- along with interest, from 01.05.1993 till the date of making payment of the entire amount, at 12% p.a. as a condition for seeking execution of the sale deed in accordance with the agreement. The decree of the lower appellate Court deserves to be modified only to the extent indicated above.
In the result, the appeal is allowed in part, modifying the decree of the lower appellate Court to the effect that the Respondent/Plaintiff has to pay Rs. 33,660/- (Rupees Thirty Three Thousand Six Hundred and Sixty only) along with interest on the said amount, from 01.05.1993 till the date of making payment of the entire amount, at 12% p.a. as a condition for seeking execution of the sale deed in accordance with the agreement. Considering the nature of the case put forth by both parties, this Court deems it fit to direct the parties to bear their respective costs. Consequently, connected M.P.(MD) No. 2 of 2010 is closed.