R.F.NARIMAN.J. - (1.) This appeal arises from a suit for specific performance that was filed by the appellant against four defendants who are today represented by the respondents. By an agreement to sell dated 12.06.1980 entered into between the appellant company and P. Nagarathina Mudaliar, P. Gopirathnam, P. Lavakumar, and P. Basantkumar, the agreement recites: "Whereas the property more particularly described in the Schedule hereunder and hereinafter referred to as the said property, originally belonged to the Hindu Undivided Family consisting of Sri P. Nagarathina Mudaliar and his father Sri P. Thiruvengada Mudaliar; Whereas there was a partial partition in the said family as a result of which, the first vendor has become the owner of the said property, said deed of partition having been registered with the Sub-Registrar, Madras-Chingleput, as Document No. 1268 of 1944; Whereas the vendors have mortgaged the said property along with the other properties owned by them at Haddows Road, Madras-1, for a sum of Rs.5,65,000/-(Rupees Five Lakh Sixty-Five Thousand Only) by way of a deed of mortgage registered with the Sub-Registrar, T. Nagar, Madras, as Document No. 3429 of 1967; Whereas the vendors have offered to sell the said property to the purchasers, free from all encumbrances, including the mortgage created in favour of Syndicate Bank, Madras-1; Whereas the vendors are making necessary arrangements for discharging the said loan due to Syndicate Bank, Madras-1, and also to get a letter from Syndicate Bank, releasing their interest, if any, in the said property offered to be sold; xxx xxx xxx" The material clauses of the agreement are as follows: "3. It is agreed that the sale consideration should be paid as follows: (a) A sum of Rs.1,00,000/- (Rupees One Lakh Only) deposited by the purchasers with M/s Venkataraman and Co. on behalf of the vendors as advance for the said sale consideration; (b) The purchasers hereby agree to pay the balance of the price of Rs.4,40,000/- (Rupees Four Lakhs And Forty Thousand Only) to Syndicate Bank in discharge of the loan borrowed by the vendors on the mortgage of the said property subject to the bankers giving the certificate of discharge in respect of the said property. 4. The vendor shall arrange to secure (a) Income-tax Clearance Certificate, (b) Permission from the Competent Authority under the Urban Land Ceiling Act, and (c) such other orders of permits and the like as may be necessary for completing the sale transaction at the cost of the vendors. 5. The purchaser shall complete the transaction within six months from the date of this agreement. This period shall be subject to the vendors obtaining the necessary clearance certificate from the appropriate authorities as stated above and giving vacant possession of the said property." xxx xxx xxx "8. The vendors hereby confirm that the said property is subject to a mortgage loan taken by them from Syndicate Bank, Armenian Street, Madras-1, and that necessary provision has been made to discharge the loan, in the sale agreement itself and excepting the above, the said property to be conveyed is not subject to any claim, attachment, lien, charge, mortgage, lis pendens or any other encumbrance, whatsoever. 9. The vendors undertake to deliver vacant possession of the property, before the execution of the sale deed. 10. In the event of the vendors commit default or acts in breach of this agreement the purchasers shall be entitled without prejudice to the right of specific performance, to the refund of the advance of Rs. 1,00,000/- (Rupees One Lakh Only) and damages." The suit property admeasured 8 grounds and 2354 sq. feet.
(2.) Given the fact that the necessary permissions were not obtained by the defendants, in particular, the permission from the competent authority under the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 ["Tamil Nadu Urban Land Ceiling Act"], the appellant filed a suit for specific performance on 24.02.1981, in which it was specifically pleaded as follows: "5. The plaintiff which is a private limited company has agreed to purchase the schedule mentioned property with a view to construct the multi-storeyed building and the plaintiffs are always ready and willing to perform their part of the obligation under the agreement for completion of the sale transaction. Further the plaintiffs are ready and willing to deposit the balance of the sale price agreed to be paid under the agreement in question before this Hon'ble Court to show their bonafide in purchasing the property and to show their readiness to perform their part of the contract in accordance with the agreement. The plaintiff submits that the defendants are bound to secure income tax clearance certificate and permission from the competent authority etc. which are prerequisite for the completion of the sale transaction and to complete the transactions within 6 months from the date of the agreement. 6. The plaintiff submits that the defendants have not so far arranged to get income tax clearance certificate and permission from the competent authority and such other formalities to the be observed for the completion of the sale transaction and they have not shown any interest in concluding the transactions. In the circumstances the plaintiff submits that they are willing to perform their part of the contract and it is the defendants who are evading to completing the sale transactions within the agreed time. The plaintiff understands and believes the same to be true that the defendants are not willing to complete the sale transaction and they reliably understand that the defendants are trying to alienate the property to third parties for higher price taking advantage of the rise in price of the landed properties ignoring the agreement to sell. The plaintiff submits that the conduct and attitude of the defendants in evading and postponing the execution of the sale deed is unjust and wanton and it is only with a view to get higher price for the property ignoring the lawful claims of the plaintiff under the agreement, the defendants do not show any inclination to complete the sale transaction." A written statement filed by P. Nagarathina Mudaliar and his two sons, namely, P. Gopirathnam and P. Lavakumar, who were defendants no.1, 2, and 3 respectively, denied that the total consideration for the agreement was Rs.5,40,000/- as is stated therein. Apart from other denials made on the merits of the case, it is important to note that no defence was taken on any plea that the Tamil Nadu Urban Land Ceiling Act would be infracted if the suit for specific performance were to be decreed. This was only done, almost by way of an afterthought, by an additional written statement filed by the self-same defendants on 16.07.1986, in which it was pleaded: "2. In any event, these defendants submit that the plaintiff is not entitled to any decree since the plaintiff is not entitled to purchase more than the prescribed limit of 500 sq. metres under the provisions of Tamil Nadu Urban Land Ceiling Act and hence the agreement is void as violating the provisions of statues."
(3.) As many as eight issues were framed in the suit. Issue no. 5 reads as follows: "5. Whether the plaintiff is not entitled to purchase more than 500 sq. metres under the Tamil Nadu Urban Land Ceiling Act and whether the suit agreement is void on that account?" ;