Coromandel Indag Products(P) Ltd vs Garuda Chit & Trading Co. P. Ltd & Anr

Coromandel Indag Products (P) Ltd. .... Appellant(s)

Versus

Garuda Chit & Trading Co. P. Ltd. & Anr. .... Respondent(s)

J U D G M E N T

P.Sathasivam,J.

1) This appeal is directed against the final judgment and

decree dated 17.02.2003 passed by the Division Bench of the

High Court of Judicature at Madras in O.S.A. No. 163 of 1994

whereby the appeal filed by the respondents herein was

allowed.

2) Brief facts:

(a) The appellant is a Private Limited Company (hereinafter

referred to as "the appellant-Company) registered under the

Companies Act, 1956 and is carrying on the business of

1

manufacturing, selling, exporting, trading in and distribution

of Pesticides, Chemicals and Agro Chemicals. Respondent No.

1 is also a Private Limited Company (hereinafter referred to as

"the respondent-Company") registered under the Companies

Act, 1956 in which Mr. T.P. Narayanan - respondent No.2 is

the Chairman and Director and appeal against him stood

dismissed vide this Court's order dated 19.07.2004. Mr. T.K.

Gopinath (since died) was the Managing Director - respondent

No.3 and his legal representatives are on record. In the year

1981, the appellant-Company required a property around

Mount Road Area near Mylapore, Madras for establishing a

Research and Development Centre. Respondent-Company, on

coming to know about the said requirement, offered its

property measuring 12 grounds 33 sq. ft. with buildings at

Door No. 46, Cathedral Road, Madras. The officials of the

appellant-Company inspected the property and after getting it

evaluated by an Authorized Valuer offered a price of Rs.82

lakhs for the entire property and the Respondent Nos. 2 & 3

herein accepted the same. Thereafter, an Agreement for Sale

2

was executed between the parties on 28.08.1981 and a sum of

Rs. 2 lakhs was paid by way of cheque as advance.

(b) Pending investigation of title of the respondent-Company

to the suit property, the appellant-Company entered into the

said agreement since the respondents desired a firm

commitment to be made. Clauses 3 and 4 of the said

Agreement put the vendor under an obligation to produce all

documents of title in its possession or control relating to the

suit property for the investigation and approval of the

appellant-Company. Besides, getting other necessary

clearances, the respondents were also required to get the

Income Tax Clearance Certificate as specified under Section

230-A of the Income Tax Act, 1961.

(c) In accordance with the above, the appellant-Company

called upon the respondents to furnish the documents of title,

the details of the encumbrances on the property, if any, and

also Income Tax Clearance Certificate and other necessary

clearances to complete the sale. On 09.09.1981, the

respondents furnished the Income Tax Clearance Certificate

dated 07.09.1981 and promised to furnish the other required

3

documents very soon. They also demanded a further payment

of Rs. 10 lakhs as advance pending finalization of the sale to

which the appellant-Company did not agree.

(d) As the respondents did not furnish the required

documents, the appellant-Company issued a letter dated

14.09.1981 calling upon them to furnish the required

documents. Instead of furnishing all the required documents,

as sought for, the respondents, vide letter dated 15.09.1981,

called upon the appellant-Company to expedite the sale.

Thereafter, on 19.09.1981, the appellant-Company again

requested the respondents to furnish the solvency certificate.

In response to the above-said letters, the respondents orally

apologized for the delay and promised to furnish the required

details at the earliest and respondent No.2 also requested for a

further payment of Rs.10 lakhs as advance to enable them to

discharge the mortgage subsisting in favour of Bank of India.

The appellant-Company paid Rs. 5 lakhs to respondent No.2

on 21.09.1981 on the undertaking that the documents called

for would be sent by 30.09.1981. Again on the request of

respondent No.2, the appellant-Company paid a further sum

4

of Rs. 5 lakhs to meet the Urban Land Ceiling Clearance. A

total sum of Rs. 12 lakhs was paid to the respondents. On

19.10.1981, respondent No.2 again requested a sum of Rs. 2

lakhs to meet certain statutory compliance which was a

charge on the property. Taking full details of such liabilities,

the appellant-Company paid a sum of Rs.1,10,000/-. As the

respondents did not furnish the required documents till the

end of 1981, the appellant-Company sent a notice dated

19.01.1982 calling upon them to perform their obligation

under the agreement dated 28.08.1981 as also to fulfil their

personal undertakings. Notice was served only on respondent

No.2 but the notice on respondent Nos. 1 and 3 were returned

back with the remarks "unserved". In reply to the said notice,

respondent No.2 said that he is not personally liable for the

payment made by the appellant-Company.

(e) In the said circumstances, the appellant-Company was

compelled to file a suit for specific performance on 10.05.1982

in the High Court of Judicature at Madras and the same was

numbered as C.S. No. 287 of 1982. The learned single Judge

of the High court by judgment dated 01.06.1993 decreed the

5

suit and directed the respondents herein to execute the sale

deed in favour of the appellant-Company and granted three

months' time to the appellant-Company to pay the balance of

the sale consideration.

(f) Challenging the judgment of the learned single Judge,

the respondents preferred O.S.A. No. 163 of 1994 before the

High Court. By impugned judgment dated 17.02.2003, the

Division Bench of the High Court allowed the appeal.

Aggrieved by the said judgment of the Division Bench, the

appellant-Company preferred this appeal by way of special

leave petition before this Court.

3) Heard Mr. K.V. Viswanathan, learned senior counsel for

the appellant-Company and Mr. K.K. Venugopal, learned

senior counsel for respondent No.1 and Mr. V. Giri, learned

senior counsel for LRs of respondent No.3.

Points for consideration:

4) The only question for consideration is whether the decree

granted by the learned single Judge of the High Court for

specific performance based on the Agreement for Sale dated

28.08.1981 is sustainable, or the Division Bench is justified in

6

concluding that the appellant-plaintiff has not made out a

case for a decree of specific performance in allowing the appeal

and setting aside the decree passed by the trial Court by

dismissing the suit.

Discussion as to Agreement for Sale

5) In order to consider the rival claims, it is desirable to

verify the relevant clauses from the Agreement for Sale dated

28.08.1981. In the beginning, the Vendor-Respondents

herein, specifically asserted that they are the sole and

absolute owner and in exclusive possession and enjoyment of

all the land mentioned in the Schedule together with a multi-

storey building, sheds, garages, outhouses, fixtures and

fittings thereon situated at Cathedral Road, Teynampet,

Madras bearing present Door No. 46, Old No. 31, T.S. No.

1238/1A, R.S. No. 1233/1 and 1233/5 measuring 12 grounds

33 sq. ft. The Agreement clearly stipulates that the Vendor

requires substantial cash for meeting its business purposes

and, therefore, decided to sell the said property. It makes it

clear that by resolution dated 16.07.1981, the Board of

Directors of the Vendor have authorized Shri K.S. Hari,

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General Manager, to negotiate and sell the said property and

to execute the sale deed. It also makes it clear that the Vendor

has agreed to sell and the purchaser has agreed to purchase

the said property at a price consideration of Rs. 82 lakhs free

from all encumbrances and claims whatsoever on the terms

and conditions set out in the agreement.

6) Among the various clauses, we are concerned with the

following clauses in the Agreement for Sale. They are:

"3. The Vendors shall produce or cause to be produced to

the purchaser all the documents of title in their possession

or control or relating to the said property for the

investigation of the Vendor's title thereto.

4. The sale shall be subject to the approval of the title of

the vendor to the said property agreed to be sold herein by

the advocate for the Purchaser and the Vendor shall at its

own costs and expenses get in all outstanding estates and

clear all defects in title and encumbrance and claims on or

to the said property.

6. The sale shall be completed on or before 05.09.1981 or

within one week from date of furnishing a Certificate under

section 230-A of the Income Tax Act of 1981 by the Vendor

whichever is later, upon the payment of Rs. 48 lakhs out of

the said purchase money by the purchaser to the Vendor,

the balance being payable as hereinafter provided, the

vendor and all other necessary parties if any shall execute a

proper conveyance of the said property in one piece of in

several portions in favour of the purchaser or such other

person or persons the Purchaser shall nominate.

7. The Purchaser shall pay at any time of the Registration

of the sale deed a sum of Rs. 48 Lakhs out of the said price

and the balance in the following manner:-

8 1. Rs. 10 lakhs on or before 07.10.1981

2. Rs. 11 lakhs on or before 07.11.1981

3. Rs. 11 lakhs on or before 07.12.1981

The said balance of Rs. 32 lakhs payable in three

installments as aforementioned shall not carry any interest.

If the purchaser fails to pay the amounts as stipulated

above, the balance amount shall carry interest at 18% per

annum till date payment.

10. The Vendor shall at its cost obtain the required

clearance certificate under Section 230-A of the Income Tax

Act and obtain requisite permission or sanctions from any

authorities as may be necessary for the purpose of effectual

competition of the sale of the property."

The above Agreement to Sell entered into on 28.08.1981 has

certain important provisions which provide a clear

understanding of motivation of both the parties. Clause 3

extracted above provides that the Vendor/respondents shall

produce or cause to be produced all the documents relating to

title of the property to the purchaser. Clause 4 provides that

the sale shall be subject to the approval of the purchaser's

advocate. Clause 6 makes the completion of sale incumbent

on the date of furnishing the Income-tax Certificate by the

Vendor and payment of Rs. 48 lakhs by the purchaser. Clause

10 makes it clear that it is the responsibility of the Vendor to

obtain the required clearance certificate under Section 230-A

of the Income-tax Act and also obtain requisite permission or

9

sanction from other authorities, as may be necessary, for the

purpose of completion of the sale of the property. Clause 13

provides that if the title of the Vendor is not approved by the

Purchaser's advocate, the Purchaser would be entitled to

cancel the Agreement. Clause 14 entitles the Purchaser for a

suit for specific performance in the event of breach of any of

the terms of the Agreement by the Vendor or the return of the

amount taken as advance by the Vendor together with a sum

of Rs. 1 lakh as liquidated damages. Clause 15 ensures that

the Agreement shall come to an end if there is a breach by the

Purchaser. With these clauses and understanding by both the

parties, we have to analyze their claim and decide the case one

way or the other.

Whether time is essence of the contract:

7) If we verify the various clauses from the Agreement for

Sale, it is clear that the Vendor-Respondent Company herein

was in need of money for meeting its business purposes. The

appellant-Company has very much relied on Clauses 3 and 4

of the Agreement which we have already extracted. Those

clauses mandate the Vendor to produce all the documents of

10

title in their possession and hand over the same to the

Purchaser for investigation by the Purchaser. It also makes it

clear that all those documents be placed before the advocate of

the Purchaser for scrutiny and approval and, thereafter, the

Vendor at its own costs and expenses clear all defects in title

and encumbrances and claims on or to the said property.

8) In order to strengthen their claim that time is essence of

the contract, the respondents have heavily relied on Clauses 6

and 7 which are extracted in the paragraphs supra. It is clear

from Clause 6 that the sale shall be completed on or before

05.09.1981 or within a period of one week from the date of

furnishing a Certificate under Section 230-A of the Income-tax

Act, 1981 by the Vendor. It is clear from Clause 7 that on the

date of the Registration of the Sale Deed, the Purchaser has to

pay Rs. 48 lakhs out of the amount of Rs. 82 lakhs. According

to the vendor, the balance being payable in the following

manner:

1. Rs. 10 lakhs on or before 07.10.1981

2. Rs. 11 lakhs on or before 07.11.1981

3. Rs. 11 lakhs on or before 07.12.1981

11

It is also clear from Clause 7 that the balance of Rs. 32 lakhs

payable in 3 instalments shall not carry any interest.

However, if the Purchaser fails to pay the amounts as

stipulated above, the balance amount shall carry interest @

18% p.a. till date of payment. It is clear that when there was a

specific understanding between the parties as reflected in the

above-mentioned clauses in the Agreement within which

period the sale was to be completed, it has to be construed

that the intention of the parties was to treat the time as

essence of the contract. Though the respondents had agreed

to receive the balance of Rs. 32 lakhs in instalments for a

period of 3 months after the registration of the sale deed which

also makes it clear that both parties have agreed to complete

the entire transaction as early as possible which prove that

time is essence of the contract. Though the appellant-

Company relying on Clauses 3 and 4 of the Agreement

contended that the respondents failed to produce all the

required documents including the documents pertaining to

title and encumbrances and claims on or to the property, there

is no basis for such a claim.

12 9) It is also relevant to point out the stand of the parties as

reflected in their pleadings and evidence. In terms of Section

16(c) of the Specific Relief Act, 1963, it is incumbent on the

party, who wants to enforce the specific performance of a

contract, to aver and prove that he has performed or has

always been ready and willing to perform the essential terms

of the contract. Explanation appended to this sub-section (c)

makes it clear that if a contract involves the payment of

money, it is not essential for the plaintiff to actually tender to

the defendant or to deposit in Court any money except when

so directed by the Court. However, the plaintiff must aver

performance of, or readiness and willingness to perform, the

contract according to its true construction. It is seen from the

pleadings that necessary averments have been made in terms

of sub-section (c) of Section 16. On the side of the plaintiff,

James Fadric was examined as PW-1. He explained the

urgency and the need to sell the property. He also explained

that the company had a cash crunch problem. No doubt, he

also referred that the company was facing liquidity

proceedings before the High Court of Bombay and necessary

13

application had been filed before the Company Court at

Bombay for settlement of the scheme to avoid liquidation

which we are not concerned. The fact remains that at the

relevant time, Vendor/Respondent-Company was in dire need

of money for their commercial transactions and decided to sell

the property in question, particularly, to meet the immediate

need of their creditors. We have already adverted to the

payment of Rs. 2 lakhs as advance on the date of execution of

the agreement dated 28.08.1981. On 21.09.1981, a further

sum of Rs. 5 lakhs was paid and by mutual consent, the time

was extended to 30.09.1981. On 06.10.1981, another sum of

Rs. 5 lakhs was advanced by the appellant-Company and the

time for completion of the Sale Agreement was extended up to

14.10.1981. Again, for the third time, that is on 19.12.1981,

time was extended for the completion of the transaction up to

31.12.1981 on payment of Rs.1,10,000/-. As rightly pointed

out by Shri K.K. Venugopal and Shri V. Giri, learned senior

counsel appearing for the respondents, the payment of money

in short intervals and also the extension of time for completion

of the transaction within the prescribed period clearly show

14

that both the parties wanted to complete the transaction as

early as possible without further extension. Inasmuch as the

Vendor was in dire need of money at every occasion and the

need for such short term extension clearly shows that the

parties intended to treat the time as essence of the contract. It

is also relevant to point out that Clause 7 of the Agreement,

which we have already extracted, makes it clear that at any

time of registration of the sale deed, the appellant shall pay a

sum of Rs. 50 lakhs, after deducting the advance amounts

already paid and the balance of Rs. 32 lakhs is to be paid after

registration of the sale deed in three installments as

mentioned above. This would also reveal the intention of the

parties to treat the time as essence of the contract. From the

various clauses in the Agreement for Sale which we have

referred to, pleadings, evidence and the conduct of the parties,

we hold that parties have agreed that the time is essence of

the contract and the same has to be adhered to strictly.

15 Readiness and willingness:

10) Learned counsel for the respondents urged that several

requests by the appellant-Company for various documents

which are not provided in the terms of the Agreement show

their intention that they wanted to delay the proceedings. On

the other hand, learned counsel appearing for the appellant-

Company submitted that they were justified in asking for

those documents in order to satisfy the title of the property. It

is true that in the Agreement, it is stated that Vendor has to

produce all the documents of title in their possession relating

to the property to the Purchaser for investigation relating to

title. In Clause 10, there is a specific reference to the

production of clearance certificate under Section 230-A of the

Income-tax Act and obtain permission or sanction from any

authorities that may be necessary for the purpose of sale of

the property. It is true that when the appellant-Company

being a Purchaser investing a huge sum of Rs. 82 lakhs, they

are entitled to clear all their doubts in respect of the title. In

terms of Clause 6 of the Agreement, sale has to be completed

on or before 05.09.1981 or within one week from the date of

16

furnishing the certificate under Section 230-A of the Income-

tax Act whichever is later and upon payment of Rs. 48 lakhs

out of the agreed amount of Rs. 82 lakhs to the Vendor.

Admittedly, the respondents produced Income-tax Clearance

Certificate even on 09.09.1981. It is to be noted that only after

production of I.T. Clearance, the appellant-Company, vide

letter dated 14.09.1981, addressed to Mr. K. S. Hari, General

Manager of the Respondent-Company sought further

particulars relating to mortgage on the Bank of India, arrears

of urban land tax, property tax, exemption certificate from the

urban land ceiling authorities, encumbrance certificate, latest

audited balance-sheet, list of creditors, solvency certificate,

details of attachment and particulars about winding up

proceedings alleging that they have not received the same to

be forwarded to their advocates. The said letter is available as

Annexure-P2. In pursuance of the said letter, the respondents

sent a reply on 15.09.1981 "by hand delivery" to the

appellant-Company specifically stating that after being fully

satisfied about the title, the appellant-Company prepared the

draft sale deed and after a combined discussion at their office

17

on 07.09.1981, the same was approved and thereafter, the

respondents obtained necessary certificate dated 09.09.1981

under Section 230-A of the Income-tax Act and the same was

also intimated to them. In the same letter, it was pointed out

that as per the Agreement of Sale and consensus arrived at

between the parties, the appellant-Company has to complete

the sale within one week from 09.09.1981. It was also pointed

out that in spite of several promises and assurances, the

appellant-Company could not fulfill their promise and also

that because of this delay, they are suffering heavy loss and

the very object of sale is being defeated. It was also pointed

out that so far they have spent heavy sums and satisfied all

their requirements and finally requested to do the needful

immediately for completion of the sale transaction. The said

letter is marked as Annexure-P3.

11) It is not in dispute, more particularly, from the evidence

of PW-1 that the legal advisor of the appellant-Company

scrutinized the title deeds before entering into Agreement.

They also visited the site along with their lawyers and finally

after satisfying all the materials, their lawyers gave opinion

18

with regard to the clear title of the property. As stated earlier,

only after getting their clearance, draft sale deed was prepared

to enable the respondents to get certificate under Section 230-

A of the Income-tax Act. Curiously, in his evidence, P.W.1 has

stated that the matter got delayed only due to the non-

production of exemption certificate from urban land ceiling

authorities. It is true that as per Clause 3 of the Agreement,

respondents have to produce all the documents pertaining to

the title of the suit property. We have already extracted

Clause 4 of the Agreement which speaks about the approval of

title by the appellant's advocate.

12) It is further seen that after payment of Rs. 2 lakhs as

advance on the date of execution of the Agreement, monies to

the extent of Rs. 11,10,000/- were paid on various dates in

order to satisfy and comply with all statutory requirements. It

is relevant to point out in the Agreement that there is no

specific reference to the production of an order from the

competent authority under the Urban Land Ceiling Act with

regard to exemption. From the materials placed, we are

satisfied that the appellant-Company was not justified in

19

calling for several documents when admittedly, their lawyers

perused all the relevant documents and on their advise, draft

sale deed was prepared and that too after proper inspection of

the site and building. In other words, production of clearance

certificate from the competent authority under the Urban Land

Ceiling Act was not specifically intended at any point of time.

We are satisfied that as rightly argued by learned senior

counsel for the respondents that the information sought for by

the appellant-Company was only to delay the transaction and

it was not always ready and willing to perform in terms of

Section 16(c) of the Specific Relief Act, 1963.

Conduct of the parties:

13) We have already stated that the Agreement for Sale

includes land and building. The building stands on more than

500 sq. mts. of land in addition to the plinth area. The

building is a five-storeyed one for which building permission

had been obtained as per the provisions of Town Planning

Authority and as per the orders of the Corporation of Madras.

It is also seen that the building was under construction at the

time the Urban Land (Ceiling and Regulation) Ordinance, 1976

20

was passed. Section 3(h) of the Act defines "land appurtenant"

which reads thus:

"(h) "land appurtenant", in relation to any building means an

extent of five hundred square metres contiguous to the land

occupied by such building and includes,-

(i) in the case of any building constructed before or under

construction on the commencement of this Act with a

dwelling unit therein, or

(ii) in the case of any building proposed to be constructed

with a dwelling unit therein and in respect of which the plan

for such building has been approved by the appropriate

authority before the commencement of this Act,

an additional extent not exceeding five hundred square

metres of land, if any, contiguous to the said extent of five

hundred square metres of land:

Provided that in relation to a multi-storeyed building,

the extent of land contiguous to the land occupied by such

multi-storeyed building permitted according to the plan

approved by the appropriate authority shall be deemed to be

the land appurtenant;"

It is not in dispute that the plan had been approved by the

Competent Authority.

14) As rightly pointed out by learned senior counsel for the

respondents, the proviso to the definition states that in the

case of multi-storeyed building, the extent of land contiguous

to the land occupied by such multi-storeyed building

permitted according to the plan approved by the appropriate

authority shall be deemed to be the land appurtenant. In view

21

of the same, the entirety of the land in and around the five-

storeyed building would come outside the vacant land under

Section 3 (p) of the Act which reads as under:

"(p) "Vacant land" means land, not being land mainly used

for the purpose of agriculture, in an urban agglomeration

but does not include-

(i) .....

(ii) in an area where there are building regulations--

(a) the land occupied by any building constructed before, or

under construction on the commencement of this Act with

the approval of the appropriate authority and the land

appurtenant to such building. .... ....."

It is clear that in the case of multi-storeyed building which

was under construction at the date of commencement of the

Act with building plans duly approved, no part of the land

attached to the building would come within the scope of the

Act. By refusing to pay the balance consideration to purchase

the property by getting the sale deed registered, the appellant-

Company has not only committed a breach of the Agreement

but also showed that it was not ready and willing to complete

the Agreement. In those circumstances, the argument

assailing the judgment of the Division Bench of the High Court

is liable to be rejected.

22 About title inspection by the lawyers:

15) It is relevant to narrate the actual question and answers

by P.W.1 during cross-examination which reads as under:

"Q: Did you inspect the title deeds through your lawyer?

A: Yes.

Q: Did you examine the title deeds before entering into

the agreement?

A: We did get the title deeds examined by the lawyer.

Q: I asked you did you get any legal opinion from your

lawyer prior to entering into the agreement.

A: Yes.

Q: Have you got the legal opinion?

A: Not in writing asked him to examine the title deed and

let us know whether the title deed is in order.

Q: What did he say?

A: He said, the title deed normally could be in order, but

he had asked for certain other information such as

encumbrance certificates, Urban Land Ceiling

Clearance from the Government of India and

Government of Tamil Nadu, etc.

Q: Your office prepared any report on title.

A: My legal department always traces title, it is good and

competent to peruse the title deeds.

Q: Your legal department is your staff?

A: Yes.

Q: Was any report on title obtained from the lawyer?

23

A: Yes.

Q: When was that obtained?

A: Somewhere between 20th to 28.8.1981

Q: Have you produced the legal opinion before this Court?

A: No, it is internal affair and we felt it is not necessary.

Q: Have you got the opinion?

A: I am not sure, I am able to find out.

Q: Did they produce all documents of title for approval?

A: Yes. They fulfilled clause No.3

Q: Clause No.4 that also the defendant did not?

A: No.

Q: What do you mean by saying no?

A: Because they have not provided encumbrance to the

title deeds, which is part of the title deed, they had

applied for Urban Land Ceiling exemption, which they

have not disclosed.

Q: Is there any mention about Urban Land Ceiling

Clearance?

A: It is not mentioned in the agreement, but I would like

to and it is obligatory on the part of the defendant to

go through the implications of Section 6 of the Urban

Land Ceiling Act.

Q: According to you, unless they do not furnish details of

obtaining Urban Land Ceiling clearance, you are not

prepared to purchase?

A: No. This is the condition of the negotiation. The

vendor has always been acknowledging to produce the

documents required by us before we put through the

sale. This is also seen in all stamped receipts for

24

which monies were paid even after 230-A clearance

obtained."

16) It is also brought to our notice that the State Government

in 1995 nearly 10 years after the filing of the suit, claimed 872

sq.mts. as being the excess land above the ceiling limit for

which the appellant-Company had filed a writ petition being

No. 6312 of 2000 before the High Court. Though the filing of

the said writ petition and the ultimate order on 04.08.2005

were not brought to our notice by filing appropriate petition

inasmuch as the said fact was not in dispute, we referred to

the said decision of the High Court rendered in Writ Petition

No. 6312 of 2000. That writ petition came to be filed by the

respondent Company for issuance of a writ of mandamus to

forebear the State and the competent authority under the

Urban Land Ceiling from enforcing the provisions of the Act

which has been repealed by Tamil Nadu Act No. 20 of 1999

w.e.f. 16.06.1999 insofar as the land of the petitioner therein

(respondents herein at Door No. 46, Cathedral Road, Chennai

in R.S. No. 1238/9 Mylapore, Village) is concerned.

25 17) It is true that despite the fact that there was no provision

in the Act laying down the process for seeking an exemption

from its operation, the respondent-Company wrote to the

Deputy Secretary, Revenue Department, Government of Tamil

Nadu on 26.12.1979 seeking such exemption. As there was

no response, as rightly pointed out, it was understood that as

the proviso to Section 3 applies to the land and no further

exemption was needed. It is relevant to point out that the

appellant-Company made further applications on behalf of the

respondents but to no avail. The entire land is in the

enjoyment and possession of the respondent-Company and no

part of the land has been taken over by the Government.

18) In the light of the above discussion, we are unable to

agree with the claim of the appellant-Company, on the other

hand we are in entire agreement with the conclusion arrived at

by the Division Bench of the High Court. Consequently, the

appeal fails and the same is dismissed. However, parties are

directed to bear their own costs.

.................................................J.

26

(P. SATHASIVAM)

...............................................J.

(H. L. GOKHALE)

NEW DELHI;

AUGUST 16, 2011.

27