P.SHANMUGAM, J. - (1.)PLAINTIFF is the appellant. The suit was filed for specific performance of an agreement for sale dated 27.5.1978 (Ex.A.1). The suit was dismissed by the Sub-court and the appeal is against this judgment and decree.
(2.)THE facts of the case are as follows: THE plaintiff entered into an agreement for sale with the first defendant for the purchase of an extent of 38 cents of land with a building on 27.5.1978 for Rs. 6,00,000/-, with the payment of advance of Rs. 1,00,000/-. THE sale was to be completed by 30.6.1979. A further total sum of Rs. 67,700/- was paid on nine different occasions with endorsements made "from June, 1978 to June, 1979". THE agreement itself provided for discharge of the liabilities of the vendors, which was estimated to be Rs. 3,50,00 0/-. While the plaintiff was always ready and willing to perform his part of the contract, the first defendant was seeking for extension of time and thereafter, when he repudiated the agreement, the above suit was filed, preceded by a suit notice. In the plaint, the appellant further pleaded that the time for performance of the contract was extended by correspondence upto 31.3.1980, though the plaintiff was ready to perform his part of the contract. On 29.3.1980, it was found that the first defendant was not ready and wanted a further extension of time till 30.6.1980 and also suggested, for the first time, that the plaintiff need not press the agreement. THEreafter, the plaintiff gave a notice dated 30.5.1980 calling upon the first defendant to give the exact amount due to his creditors so that the sum may be discharged directly. THE first defendant replied that the contract had come to an end by 31.3.1980 and that he was free to sell the property to anyone. Contending that the first defendant had committed breach of the agreement by his letter dated 5.6.1980 and that he was trying to negotiate with third parties for selling the property, the plaintiff filed the above suit for specific performance by impleading the creditors listed in the agreement so that they can receive the payment of their dues.
The first defendant, in his written statement, denied even the existence of the agreement itself, but admitted that they were indebted to defendants 2 to 10. According to the first defendant, there was a prior sale agreement with one P.S. Subramaniam and the agreement was executed only for the purpose of borrowing money from time to time from the said P.S. Subramaniam. The agreement was not intended to be acted upon. It was only on this account that the agreement provided for refund of amounts received with interest at 15% in case of default and it does not provide for specific performance. The plaintiff was aware of the suits and execution proceedings filed and initiated by several creditors and several payments after the agreements were all made for the specific performance and for averting execution of sales brought in at the instance of defendants 1 to 5. Plaintiff did not make any attempt to offer the amount directly to the first defendant as he was not possessed of sufficient funds. According to him, the plaintiff had agreed to cancel the contract and to receive a solatium and therefore, he cannot take advantage of the conditional offer of extension of time contained in the letter of the first defendant. The plaintiff had kept quiet and took no steps against the proceedings initiated to bring the property for sale. It is further pleaded that it is only because of the failure of the plaintiff to pay to the creditors the amount mentioned in the agreement, he has been put to loss. It was pleaded that even assuming that the agreement was in law, a valid agreement to sell, having regard to the following facts, namely that " (i) the plaintiff was never in a position to perform the contract and was not ready and willing to perform it and made no offer of performance within the stipulated period; (ii) the property has greatly risen in value subsequently; (iii) the first defendant has been put to loss by the plaintiffs non-performance; (iv) the plaintiff has been guilty of gross laches; (v) the agreement itself provides only for the return of advance with interest; and The plaintiff will not be entitled in law or equity to the discretionary relief of specific performance. The defendant was prepared to refund the entire loss of Rs. 1,67,700/- without enforcing the forfeiture clause.

The seventh defendant, who is one of the creditors of the first defendant company, filed a written statement saying that they had to recover a sum of Rs. 31,736.38 from the first defendant and therefore, they instituted the suit O.S. No. 352 of 1977 in the Subcourt, Coimbatore. The suit was decreed on 7.7.1981. The suit property was attached in I.A. No. 575 of 1977 with effect from 27.4.1977. According to him, the alleged agreement dated 27.5.1978 is subsequent to the attachment and his rights cannot be defeated by the alleged agreement. The Coimbatore City Municipal Corporation, the tenth defendant, filed a written statement stating that the purchaser is bound to pay the taxes due to them. The eleventh defendant, who was impleaded subsequently and who was a court auction purchaser of the suit property, raised similar pleas as that of the first defendant, besides pleading that the suit agreement is hit by the doctrine of lis pendens since the plaintiff was aware of the sale of the property in court auction in O.S. No. 421 of 1976, a suit on mortgage. The property was under attachment on 7.5.1978, even prior to the alleged agreement and therefore, the agreement is unenforceable, invalid and not binding on the defendants. The eleventh defendant purchased the property in court auction on 26.8.1981 for Rs. 7,52,000/- and therefore, the purchaser under the mortgage decree will not be affected by the agreement at all.

A reply statement was filed by the plaintiff denying the allegation that the plaintiff had purchased the property from P.S. Subramaniam and he denied any such arrangement between P.S. Subramaniam and himself. He denied the lack of funds with him and also the further agreement to receive the solatium. It is specifically pleaded that the first defendant had induced the sixth defendant to execute his decree by bringing the property to sale and colluded with him to keep the auction a secret. The sixth defendant was advised to evade service of summons in the suit and proceed with the auction on 29.8.1981 and the first defendant arranged for the auction sale in favour of one P.K. Unni, a close friend of the first defendant. Accidentally coming to know of the sale, he filed E.A. No. 970 of 1981 in E.P.R. No. 89 of 1980 in O.S. No. 429 of 1977 to set aside the sale after depositing a sum of Rs. 84,745/-, being the decree amount and 5% solatium to the auction purchaser. The said application was opposed not only by the decree holder, but also by the first defendant, all of them having conspired to sabotage the present suit. He also pleaded that the first defendant had induced the second defendant to execute his decree by bringing the property to sale and the copy of the written statement was given to the plaintiffs advocate only at the hearing on 25.8.1981 and it was then too late to communicate to the plaintiff to arrange for stoppage of the sale which was to be held on the next day. Again, it was the same P.K. Unni who also bid at this sale at the instance of the first defendant. Plaintiff had filed E.A. No. 2058 of 1981 in E.P.R. No. 189 of 1981 in O.S. No. 85 of 1978 under Order 21, Rule 89, C.P.C. to set aside the sale after depositing Rs. 1,33,343/- to cover the decree amount and 5% solatium to the purchaser. This petition was also opposed by the first defendant. He pleaded that this amount should go in reduction of the sale price in the suit.

It is seen that E.A. No. 2058 of 1981 was dismissed by the execution court by order dated 7.5.1981 holding that the agreement holder has no locus standi, and in any event, it was hit by lis pendens. It was also held that the deposit was made beyond 30 days as provided for under Order 21, Rule 92, C.P.C. and hence, the application was filed out of time and therefore, was not maintainable. The plaintiff filed an appeal before this Court in C.M.A. No. 421 of 1983 against the order of the execution court. By a judgment dated 13.6.1984,(See: Nirmala Industries, Uthagamandalam v. Srinivasa Perumal Financing Corporation (1987) 100 L.W. 225) the Division Bench held that the plaintiff, agreement holder, has locus standi to maintain the execution application and that the sale agreement entered into pending the mortgage suit will not deprive the applicant of the right for setting aside the sale. However, on the question of limitation, the matter was referred to a Full Bench. Thereafter, in the light of the decision of the Supreme Court in Basavantappa v. Gangadhar Narayan Dharwadkar & Another (A.I.R. 1987 S.C. 53) holding that 60 days period under Article 127 of the Limitation Act would prevail over 30 days mentioned in Order 21, Rule 92, C.P.C. for maintaining the deposit under Rule 89, the C.M.A. was allowed (reported in 1987 {II} M.L.J. 3 = 100 L.W. 225) and the execution of the sale was set aside. The Bench held that points numbers 1 and 2 had already been held in favour of the appellant herein and in view of the decision of the Supreme Court, the third point is also held in favour of the appellant. Consequently, the amount deposited by the appellant in the executing court was accepted and the sale was ordered to be set aside. The request for leave to appeal was dismissed stating that since the decision on all the three points rests with the provisions contained in the C.P.C. and the Limitation Act, no question of legal importance requires to be decided by the Supreme Court. As against this judgment, the eleventh defendant, auction purchaser, filed S.L.P. No. 4050 of 1987. By an order dated 22.9.1988, the Supreme Court issued the notice only on the question confined to the period of limitation within which the money was to be deposited and the application for setting aside the sale was to be filed. By a judgment dated 20.2.1980 [1990 (2) S.C.C. 378 (See: Unni, P.K. v. Nirmala Industries 1990 1 L.W. 364 (S.C.)], the Honourable Supreme Court held that under Order 21, Rule 92, C.P.C, the deposit had to be made within 30 days though the period of limitation for filing the application under Order 21, Rule 89, C.P.C. would be 60 days under Article 127 of the Limitation Act. The Supreme Court expressly over-ruled the judgment in Basavantappa's case (A.I.R. 1987 53) and with the result, on the question of limitation, the judgment of the High Court was set aside and the appeal was allowed to that extent. Consequently, the plaintiffs application under Order 21, Rule 89, C.P.C. was dismissed. The plaintiff thereafter filed an application E.A. No. 1000 of 1990 under Order 39, Rule 5, C.P.C. before the Subcourt in the mortgage suit requesting the deposit already made to be taken note of. The E.A. was dismissed on 30.4.1981 as barred by time and res judicata.

(3.)WITH the above facts pleaded, the parties went for a trial. The first defendant, though filed a written statement, remained ex parte. The second defendant pleaded that he is not a necessary party, but is entitled for the mortgage amount from the court auction sale. Defendants 3, 4, 8 and 9 remained ex parte. Defendants 5 to 7, creditors, were exonerated on payment. The the tenth defendant namely the Coimbatore City Municipal Corporation claimed charge for tax arrears against the plaintiff on his purchase. The eleventh defendant, court auction purchaser, alone resisted the suit for specific performance and possession.
The learned Subordinate Judge framed six issues and the plaintiff/appellant was permitted to mark 38 documents, Exs.A.1 to A.38 and examine P.Ws. 1, 2 and 3. On behalf of the defendants, three orders of the Honourable Supreme Court were marked and none examined on the side of the defendants. The learned Judge, after considering the matter in detail, held that the sale agreement is true and valid and found that the advance of Rs. 1,00,000/- and a further payment of Rs. 67,700/- had been made as per the admitted endorsements. He has also found that the appellant had means and had been ready and willing to perform his part of the contract and that the suit is not bad for non-joinder of parties. However, the learned Judge chose to dismiss the suit on the ground that the default clause in the sale agreement for refund of the advance with interest will bar specific relief. He also held that the suit agreement will not bind the eleventh defendant, auction purchaser, since the court sale will relate back to the date of mortgage and inasmuch as the court auction sale has been confirmed by the Supreme Court, the appellant cannot claim specific performance against the eleventh defendant and consequently dismissed the suit with a direction to refund a sum of Rs. 1,67,700/- with 12% interest.

In the appeal, Mr. T.R. Mani, learned senior counsel appearing on behalf of the appellant assailed the judgment of the court below and the reasoning contained thereunder for having found all the issues in favour of the plaintiff and refusing the relief on unsound reasoning. According to him, the eleventh defendant, who had purchased the property during the pendency of the present suit, must yield to the right of the appellant to get specific performance of the agreement. The court auction sale in favour of the eleventh defendant squarely falls under Section 52 of the Transfer of Property Act and therefore, his rights are subordinate to the rights available to the appellant under Ex.A.1. The findings of the Division Bench of this court in C.M.A. No. 421 of 1983 that the court auction sale would be affected by lis pendens is binding on the parties. He further pleaded that the suit to enforce the mortgage is only a suit for money and the question of bringing the hypotheca would arise only if the mortgagor fails to pay the money as directed in the preliminary decree. According to him, the Supreme Court set aside the judgment of the High Court only on the limited question of limitation and the appeal was allowed to that extent only and therefore, the auction purchaser's right is subject to the rights of the appellant as per the agreement of sale and prayed for a decree.