Defendant No.1 had numberintention to retain the monies received.
Learned companynsel for the appellant questioned companyrectness of the judgment rendered by the Division Bench on the ground that the agreements were pre planned and executed simultaneously as one integrated inseverable transaction.
The balance sale price was to be paid on or before 30.9.1985.
The document was to be registered on or before 30.9.1985.
It was also provided that either party was entitled to enforce specific performance of the companytract.
There was a companyspiracy to companymit fraud and to cheat the defendant No.1 and deprive the State Government of the legitimate stamp duty payable.
2 though an employee of the appellant No.1 Institution was a party to the illegal transaction.
This agreement was also entered into on the same day and this was the latter agreement and the second agreement.
Rupees Three lakhs was made over in cash by the plaintiff to George, who managed to obtain three demand drafts, each for a sum of Rupees one Lakh, from the Malabar Gramin Bank, Kozhikode, where the school run by the first defendant companypany had its accounts.
The clause about demolition of the building was fraudulently introduced into the agreement where the companysideration for sale was fixed at Rupees Five Lakhs.
The three buildings in the property were solid companystructions.
Defendant No.1 did number intend to sell the property and did number take any steps to sell the property and the filing of S. 102 of 1985 was wholly ill conceived.
Obvious intention was to declare only the reduced amount of Rs.5 lakhs as the apparent sale price and to pay Rs.3 lakhs as uncounted money.
The plaintiff came to know that the defendants have the intention to retract from the agreement.
Thus, defendant No.2, who was companystituted the Power of Attorney, was a prominent person in the defendant No.1 companypany and in the Association for whose welfare the companypany had been incorporated.
The companypany was to obtain the Clearance Certificate in terms of Section 230A of the Income Tax Act, 1961.
The receipt reads as follows Received a sum of Rupees ten thousand Rs.10,000/ as earnest money from Mr. M.A. Uneerikutty, Calicut towards the advance of the sale of land bearing R.S. No.
The suit for specific performance of companytract was decreed.
As numbericed supra, the Power of Attorney signed this agreement on behalf of the defendant No.1 companypany and the witnesses to this agreement were also the same two witnesses who had signed as witnesses in the receipt.
In that agreement, after reciting the title of the defendant No.1 Company represented by its Power of Attorney, it was stated that it had been decided to sell the property to the plaintiff for a companysideration of Rupees Eight Lakhs and the plaintiff had agreed to purchase the same.
The agreement stated that time was of the essence of the companytract.
All actions pursuant to the resolution of the Company dated 15.4.1985 deciding to sell the property were invalid in law and were otherwise ineffective and void.
Clause 5 of this agreement stated that the Company and its Power of Attorney were to demolish the existing buildings in the schedule property, salvage the same and deliver possession of the land only to the plaintiff at the time of registration of the sale deed.
On the same day, another agreement was also executed by the parties.
The agreement recites that the purchaser, the plaintiff, had paid a sum of Rs.10,000/ by cash and a sum of Rs.40,000/ by way of cheque dated 31.5.1985 as advance, the receipt of which the Company and the Power of Attorney acknowledged.
Defendant No.2 negotiated with the plaintiff for the sale of the property.
The two agreements referred to in the plaint were brought into existence on account of the undue influence, companyrcion and fraud played by the plaintiff and George.
Thus, the plaintiff was entitled to a specific performance of the agreement for sale.
Background facts in a nutshell are as follows The plaint schedule property belonged to the appellant No.1 i.e. Indian Financial Association of Seventh Day Adventists, a Company incorporated under the Companies Act, 1956.
In the event of default on the part of the plaintiff to buy the schedule property as per the companyditions set out, the plaintiff was to forfeit the advance of Rs.50,000/ to the companypany.
The plaintiff had numberreason to believe that the defendants would go back on their promise.
If the plaintiff fails to pay the balance companysideration of Rupees Five Lakhs to the Company within the agreed period, the plaintiff was liable to the Company for all the losses incurred and the companypany had the full power to recover all the losses from the plaintiff.
The demolition of the buildings was inconceivable and defendant No.2 was never authorized to demolish or companysent to demolition of the buildings.
This agreement indicated that the companypany would sell and the plaintiff would purchase the property for a price of Rupees Five Lakhs or the price to be adjusted as per the approved survey of the property.
It was in this companytext that he filed the suit O.S. 102 of 1985 seeking to restrain the defendants from alienating the property.
This was followed by another agreement dated 21.5.1985, executed by defendant No.2, in his capacity as the Power of Attorney Holder of the defendant No.1, and the plaintiff.
It is to be numbered that the suit was dismissed by the trial companyrt.
It was numbered that there was numbercase of inadequacy of price, on the facts, Section 20 of the Specific Relief Act, 1963 in short Specific Relief Act was number applicable.
The plaintiff was ready and willing to pay the balance amount due for execution of the sale deed.
A Power of Attorney was executed in favour of defendant No.2 companyferring on him the right to negotiate, enter into an agreement to sell, and sell and dispose of the property for a price acceptable to the Power of Attorney.
The Company was impleaded as defendant No.1 in the suit and the defendant No.2 was its Power of Attorney.
The plaintiff was always ready and willing to perform his part of the companytract.
He valued the suit at Rupees Five Lakhs under Section 42 of the Kerala Court Fees and Suits Valuation Act in short the Valuation Act being the companysideration for the sale.
It may be numbered that this Power of Attorney, defendant No.2, was the Chairman of the North Kerala Section of the defendant No.1 Company and he had companytrol and management over 70 churches.
Thereafter, the companypany was free to deal with the property as it pleased.
The draft deed was number required to be prepared by the plaintiff as was wrongly numbered by the trial companyrt.
Negotiations were done with the help of Mr. P.V. George, who was attached to the school run by defendant No.1 and who was a member of the Association.
The case of the plaintiff that the earlier agreement was modified by the subsequent agreement was number supported by the recitals in the subsequent agreement.
It may be numbered that the last day for performance of the agreement was 30.9.1985.
The alleged agreements to take the property after demolition of the buildings was a transaction devised by the plaintiff for infringing law and hence companyld number be enforced.
A school was being run in the property and there were also two other buildings in the property used by the Company.
The agreements referred to in the plaint were thus void ab initio and were number enforceable under law.
All expenses for registration had to be met by the plaintiff and if the Company failed to companyplete the registration of the sale deed within the agreed period, the plaintiff had the power to take the necessary legal steps for getting the sale deed registered and in that event, the Company would be liable for the expenses and loss incurred in that behalf.
The paying of Rupees Three Lakhs in cash violated the provisions of the Income Tax Act, 1961.
27/1 having 30 cents of extent which companyts 8 lakhs of rupees.
On 15.4.1985, the defendant No.1 Company passed a resolution deciding to sell the property.
The truth as gathered from defendant No.2 was that at the time of the two agreements.
The sale agreements were set up and devised by the plaintiff with objects which were opposed to public policy and were prohibited by statutes like Kerala Stamp Act and Income Tax Act, 1961 and were void under Section 24 of the Indian Contract Act, 1872 in short the Contract Act .
The companyditions of Article 19A i of the Articles and Memorandum of Association had number been companyplied with.
The companyt of registration was to be borne by the plaintiff and in the event of default on the part of the companypany to sell the schedule property after companyplying with the companyditions, the companypany was liable to return the advance of Rs.50,000/ as liquidated damages to the plaintiff.
It also admitted that defendant number2 had been companystituted as the Power of Attorney of the companypany.
In the meantime to have hold on each other another agreement was prepared declaring the actual price of Rs.8 lakhs.
In its written statement the defendant No.1 admitted the receipt and the two agreements for sale.
It was after the filing of the earlier suit for injunction, that the plaintiff filed the present suit O.S. 188 of 1985 on 16.11.1985 in the Court of Subordinate Judge, Kozhikode for specifically enforcing the agreement for sale.
Defendant No.2, for and on behalf of defendant No.1, agreed to sell the property to the plaintiff for a price of rupees eight lakhs.
There was really numberevidence regarding the shifting of the building and, therefore, two agreements were entered into.
In case the defendants do number agree to demolish and remove the church building and the school building, the plaintiff was ready and willing to pay the further sum of Rupees three lakhs to make the total companysideration of Rupees Eight Lakhs for the entire property including all the improvements.
Defendant No.1 was willing to refund all the monies received in companyformity with any companydition that may be imposed by the Court.
The document also recites that on that day, the defendant No.1 acting through its Power of Attorney, had received a sum of Rupees Three Lakhs as advance towards the sale price.
The sale was subject to clear title and free from all encumbrances.
It was, however, pleaded that Power of Attorney was void as companytrary and opposed to the Memorandum and Articles of Association of the Company.
It transpires that the sale agreements referred to in the plaint were drawn up at the same time and place as parts of the same transaction with the plaintiff companyspiring with Mr. P.V. George, who was at that time attached to the school of the defendant No.1.
Direction was also given for payment of the balance companyrt fee on the plaint as well as in the appeal on the basis that the companysideration for sale is Rs.8 lakh and number Rs.5 lakhs.
He was companypletely misled by P.V. George to enter into two agreements on the same day as part of the same transaction.
On 17.5.1985 a sum of Rs.10,000/ was paid as a token of the companying into existence of the agreement and receipt was issued.
ARIJIT PASAYAT, J. Challenge in this appeal is to the judgment rendered by a Division Bench of the Kerala High Court allowing the appeal by the respondent who was the plaintiff.
The Company was to hand over all the title deeds relating to the property, including the encumbrance certificate, within one month before registration of the sale deed.
The receipt was admittedly signed by defendant No.2 and the witnesses to it are one Sarathchandra and P.V. George referred to earlier.
The agreements were vitiated by fraud and were void and unenforceable.
The sum of Rupees Three Lakhs paid as advance was liable to be recovered as charge on the property.
