1/27 APPEAL(CAD) No. 22 of 2023

IN THE HIGH COURT OF JUDICATURE AT MADRAS

RESERVED ON : 20.01.2026

PRONOUNCED ON : 19.02.2026

CORAM

THE HONOURABLE MR JUSTICE C.V. KARTHIKEYAN

AND

THE HONOURABLE MR.JUSTICE K.KUMARESH BABU

APPEAL(CAD) No. 22 of 2023

and

CMP No.24440 of 2024

1. M/s.Malar Homes,

Rep. by its Managing Partner,

T.Gokulakrishnan, 1/7,

Sengeni Amman Koil 2nd Street,

Maduvankarai, Guindy,

Chennai-600 032.

2. T.Gokulakrishnan

Appellant(s)

Vs

1. R.Saroja

2.A.Seenivasan

Respondent(s)

PRAYER: Appeal filed under Section 13 of Commercial Court Act to set aside

the judgment and decree dated 17.08.2022 passed by the Commercial Court at

Chennai in COS No.216 of 2022.

For Appellant(s):Mr.S.Ramesh

For Respondent(s):Mr.S.Rajasekar for R1 https://www.mhc.tn.gov.in/judis

2/27 APPEAL(CAD) No. 22 of 2023

JUDGMENT

(Judgment of the Court was delivered by C.V.Karthikeyan, J.)

The first and second defendants in COS No.216 of 2022 have filed the

present appeal questioning the judgment and decree dated 17.08.2022, passed

by the Commercial Court at Chennai.

2.COS No.216 of 2022 had been initially instituted in the Original Side of

this Court as CS No.794 of 2012 and later transferred to the Vth Additional City

Civil Court, Chennai and renumbered as O.S.No.3970 of 2022 and on

constitution of the Commercial Court at Chennai, had been again transferred

and renumbered as COS No.216 of 2022.

3.The suit had been filed by the plaintiff seeking a direction against the

first and second defendants to pay a sum of Rs.50,50,000/- together with

interest at 15% per annum on 40,00,000/- from 01.03.2011 till the date of the

plaint and future interest and a further direction against the first and second

defendants to pay damages to a sum of Rs.20,20,000/- towards loss of rental

income, cost of unfinished civil work along with future rents and for mandatory

injunction directing the first and second defendants to deliver the schedule

mentioned flats to the plaintiff and for a declaration that the agreement of sale

entered into with the third defendant as null and void and for the costs of the https://www.mhc.tn.gov.in/judis

3/27 APPEAL(CAD) No. 22 of 2023

suit. However, owing to the subsequent events during trial, the relief sought

was confined only to the relief seeking damages for a sum of Rs.20,20,000/-

towards the loss of rental income, cost of unfinished civil work along with

future rents.

4.The schedule of properties in the plaint for which damages was sought

were two flats, flats A and B both in the first floor, admeasuring 1280 sq.ft each

inclusive of common area at D.No.27 A, 3

rd

street, Abhiramapuram, Chennai

600 018.

5.The Commercial Court by judgment dated 17.08.2022 had decreed the

suit with respect to the relief of payment of damages. The damages had been

crystallised to Rs.42,40,000/-, at Rs.80,000/- per month for both flats A and B

for the period from April 2011 till September 2015. It had also directed that this

amount shall be paid together with interest at 15% per annum from the date of

plaint till the date of decree and thereafter at 6% per annum till the date of

realisation of the entire amount. Challenging that judgment and decree, the

present appeal has been filed by the first and the second defendants.

6.In the plaint, the plaintiff Mrs.R.Saroja contended that she had entered

into a joint development agreement with the first defendant, M/s.Malar Homes,

represented by its Managing Partner, Mr.T.Gokulakrishnan, who was also

impleaded in his individual capacity as the second defendant, to develop the https://www.mhc.tn.gov.in/judis

4/27 APPEAL(CAD) No. 22 of 2023

sub-divided portion of the property measuring an extent of 2835 sq.ft. at

D.No.27 A, 3

rd

street, Abhiramapuram, Chennai 6000108. She had executed a

registered Power of Attorney in favour of the second defendant on 13.06.2007

to complete the joint venture apartment project.

7.It was contended that the joint venture was initiated in the year 2005

and an agreement was written down in the year 2007. There was however

considerable delay in commencing the project. The entire project was thereafter

re-worked and a Memorandum of Understanding was entered on 20.02.2010.

The first defendant agreed to put up a stilt in the ground floor and construct the

first and second floors with a total of four flats. Two flats were allotted to the

plaintiff and two flats were allotted to the share of the first defendant. The

plaintiff was also entitled to monetary consideration of Rs.1.25/- crores. It had

been contended that there was considerable delay in completing the project

though the time limit was determined at six to eight months from February

2010. On the date of the plaint, it was contended that out of the monetary

consideration of Rs.1.25/- crores, the first and second defendants had paid only

Rs.85,00,000/- and therefore, a relief was sought for the payment of balance

Rs.40,00,000/-, but subsequently, the said amount was paid. The first defendant

had also agreed to renovate the existing bungalow of the plaintiff in the

adjoining land. https://www.mhc.tn.gov.in/judis

5/27 APPEAL(CAD) No. 22 of 2023

8.It had been further contended that the first defendant also signed a letter

of undertaking on 16.09.2010 after identifying a buyer for flat D in the second

floor and assured to make the balance payment and hand over possession of the

flats A and B allotted to the plaintiff by March 2011.

9.The plaintiff contended that there was a clause in the agreement that

while identifying the buyer, the plaintiff would be consulted and the flats could

be sold only after obtaining the consent of the plaintiff. The sale in favour of

the purchaser of flat D was agreed by the plaintiff and the sale deed was also

executed on 13.09.2010. It had been stated that the first and second defendants

did not complete the construction of the flats in the first floor within the time

period fixed.

10.With respect to the other flat in the second floor, the first and second

defendants issued a letter on 11.08.2011 indicating the prospective purchaser. A

reply was given on 28.08.2011 by the husband of the plaintiff. The first and the

second defendants however entered into an agreement with the prospective

purchaser who was impleaded as third defendant and it was under those

circumstances that a relief was sought, seeking a restraint on execution of any

document conveying the flat to the third defendant. But however, subsequently

during the pendency of the trial, the flat had actually been sold to the third

defendant and therefore, that relief did not survive for adjudication. https://www.mhc.tn.gov.in/judis

6/27 APPEAL(CAD) No. 22 of 2023

11.The plaintiff cancelled the General Power of Attorney after issuing a

notice and registered the revocation document also. The plaintiff then raised a

demand for damages to a sum of Rs.20,00,000/- including loss of rental income

for the two flats from April 2011 and also costs of civil work left unfinished by

the first defendant and also damages for the mental agony suffered by the

plaintiff. It was under those circumstances that the suit had been filed for the

reliefs aforementioned.

12.It must also be stated that during the pendency of the suit, the flats A

and B mentioned in the schedule to the plaint had been handed over to the

plaintiff on September 2015. The only relief which therefore stood for

consideration is the claim for loss of rental income and damages for the delay in

handing over the possession of the two flats.

13.The first defendant filed written statement. It was contended that

initially an agreement was entered into in September 2005 for development of

the properties by constructing flats and to complete repairing works in the

adjoining building. It was stated that a contractor had already been engaged to

carry out the repair work, but owing to disputes, they had left halfway through.

Under the original agreement, the plaintiff was to receive one flat of 1250 sq.ft

and proportionate UDS of 708 sq.ft and also a sum of Rs.65,00,000/-. The

remaining three flats were allotted to the first defendant. Thereafter, a https://www.mhc.tn.gov.in/judis

7/27 APPEAL(CAD) No. 22 of 2023

Memorandum of Understanding was entered into on 05.04.2006. Subsequently,

another agreement was entered into on 14.06.2007, called Amendment of

Agreement. A final agreement was entered into on 20.02.2010.

14.The plaintiff was entitled to two flats and the first defendant was

entitled to the other two flats. The first defendant sold one flat to a purchaser.

The first defendant also identified a purchaser for the other flat. It was

contended that at all material point of time, the plaintiff and her husband

hindered the work and the civil works had to be redone again. It was contended

that the plaintiff and her husband wanted the market rate to increase to gain

maximum profit. The first defendant stated that the plaintiff and her husband

delayed the fixing of tiles and wood work so that the works are completed at a

later point of time so as to give an impression that the flats are new flats. It was

specifically stated that the construction of the entire flats were completed in

November 2010. There were only minor works to be done.

15.It was further contended that the plaintiff has to pay Rs.10,00,000/-

towards the work done in the adjacent bungalow and another sum of

Rs.10,00,000/- for the additional work done and materials used in the two flats.

16.It was further contended that the third defendant had been identified as

a purchaser. He had obtained Bank loan for payment of the sale consideration, https://www.mhc.tn.gov.in/judis

8/27 APPEAL(CAD) No. 22 of 2023

but however the sale deed could not be executed owing to the protests raised by

the plaintiff and her husband. It was contended that after having received and

enjoyed the money paid by the first defendant, the plaintiff had unilaterally

cancelled the Power of Attorney. It was contended that the first defendant was

not liable for any of the reliefs sought and that the suit should be dismissed.

17.On the basis of the above pleadings and owing to the fact that the

defendants had paid a sum of Rs.40,00,000/- claimed by the plaintiff towards

the balance monetary consideration, and had also handed over the possession of

the flats A and B to the plaintiff and the sale deed in favour of the third

defendant had also been executed, the relief relating to the claim of damages

was alone put to trial.

18.During trial, the husband of the plaintiff was examined as PW1 and a

Civil Engineer was examined as PW2. The plaintiff marked Exs.P1 to P21.

Ex.P2 dated 13.06.2007 was the copy of the General Power of Attorney and

Ex.P10 dated 13.06.2007 was the copy of the revocation of the said Power of

Attorney. Ex.P3 was the Memorandum of Understanding dated 20.02.2010 and

Ex.P4 was the Letter of Understanding dated 16.09.2010. The letters exchanged

between the parties were marked as Exs.P6, P7, P9, P11, P12 and P15. The

report of the Advocate Commissioner dated 12.04.2014 was marked as Ex.P13.

The reports of the Civil Engineer were marked as Exs.P19 and 20. https://www.mhc.tn.gov.in/judis

9/27 APPEAL(CAD) No. 22 of 2023

19.The second defendant examined himself as DW1 and marked Exs.D1

to D7. Exs.D1 and D2 were the earlier agreements in September 2005 and April

2006. Ex.D4, D6 & D7 were copies of the building plan.

20.The Trial Judge examined Ex.P3, by which, the first and second

defendants had agreed to complete the construction work and handover two

apartments to the plaintiff within a period of six to eight months. It was

observed that the first and second defendants had not completed the

construction or handed over the flats to the plaintiff. Even when the plaint was

presented before the Court, the construction work was not completed and an

Advocate Commissioner had been appointed, whose report has been marked as

Ex.P13. A Civil Engineer had measured the construction and noted the physical

features in the report. The report was also annexed with the report of the

Advocate Commissioner. The works which had not been completed had also

been mentioned and the total estimate of the unfinished work was also given. It

was also observed that when the suit was pending in the Original Side of the

High Court, a direction had been passed against the first and second defendants

to complete painting, wood work, electrical work and other works and hand

over the possession of A and B flats to the plaintiff. It was therefore held by the

Trial Judge that the delay was only owing to the defendants. https://www.mhc.tn.gov.in/judis

10/27 APPEAL(CAD) No. 22 of 2023

21.With respect to the issue of damages and the rental value, the Trial

Court relied on the evidence of PW2, who had determined the monthly rent at

Rs.47,965/- for flat A and Rs.48,303/- for flat B. The Trial Court had fixed a

uniform rent of Rs.40,000/- for each of the two flats and had observed that the

loss of rental income was Rs.80,000/- per month. It was also observed that the

plaintiff had suffered rental income for a period of 53 months from April 2011

till September 2015. The damages was therefore crystallised at Rs.42,40,000/-.

Though the plaintiff had claimed Rs.20,20,000/-, the suit was partly decreed and

dismissed with regard to the other reliefs which had become infructuous.

Questioning this judgment and the reasonings thereunder, the first and second

defendants have filed the present appeal.

22.Mr.S.Ramesh, learned counsel for the appellants/first and second

defendants took the Court through the facts of the case. He stated that even

according to the plaintiff, an agreement between the first and second defendants

and the plaintiff was initiated in the year 2005 and an agreement was entered

into in the year 2007 and subsequently, Memorandum of Understanding was

again entered into on February 2010. The learned counsel stated that the terms

had been varied in accordance with the wishes of the plaintiff. The learned

counsel pointed out that the appellants had performed their part of the

agreement, but unfortunately, there was obstruction at every stage from either

the plaintiff or her husband. He pointed out that there was an obstruction in https://www.mhc.tn.gov.in/judis

11/27 APPEAL(CAD) No. 22 of 2023

laying of the tiles and completing the wood work. He stated that the first

respondent wanted to delay the completion of construction of the flats,

particularly, the interior works only to take advantage of the increase in the

market value. The learned counsel pointed out Ex.P13, which was the report of

an Engineer annexed along with the report of the Advocate Commissioner,

wherein, the total value of the unfinished work was estimated to Rs.5,00,000/-

He contended that the bonafide of the appellants could be seen from the fact that

they paid the balance consideration to be paid to the respondent. Further, the

sale deed had also been executed in favour of the third defendant in the suit.

With reference to the issue of damages, the learned counsel pointed out that

PW2 had inspected the building after the cross examination of PW1 was

completed and after PW1 had admitted that he had not produced any document

to determine the rental value and the loss suffered by him. The learned counsel

for the appellants therefore contended that the Court should reject the report of

PW2. The learned counsel asserted that the delay in handing over the flats is

only owing to the conduct of the plaintiff and her husband and stated that the

suit should be dismissed and even if decreed should only be confined to the

penalty as agreed by the parties in their agreement.

23.Mr.S.Rajasekar, the learned counsel for the first respondent however

denied and disputed the said contentions. The learned counsel pointed out that

it was reasonably insisted by the first respondent who had to live in the https://www.mhc.tn.gov.in/judis

12/27 APPEAL(CAD) No. 22 of 2023

adjoining flats to be informed about the intending purchaser and about his

details since there was no necessity for the first respondent to live with a

neighbour with whom peace would not reign. The learned counsel stated that

the appellants had completed the flats allotted to them in the second floor at a

very fast rate and one of the flats had actually been conveyed and the purchaser

for the other flat had also been identified. However, the appellants had not

proceeded with the same speed in completing the flats in the first floor, which

fell to the share of the first respondent.

24.The learned counsel stated that the delay was deliberate and damages

therefore should be imposed on the appellants for the delay in handing over of

the flats. The learned counsel stated that in this connection to determine the

rental value, the first respondent had examined PW2, the Engineer who had

forwarded his reports. He contended that the reports, Exs.P19 and 20 had been

finalised taking into consideration all factors and as a matter of fact stated that it

was on the lower scale. The learned counsel argued that the appellants did not

have the monetary capacity to complete the constructions of flats within the

time stipulated. He therefore insisted that the appeal should be dismissed and

the decree of the Trial Court should be affirmed.

25.We have carefully considered the arguments advanced. The following

points arise for consideration: https://www.mhc.tn.gov.in/judis

13/27 APPEAL(CAD) No. 22 of 2023

(i) Whether the contention of the

appellants that the delay in completion of

construction of the flats in entirety was

only owing to the obstructive nature of the

respondents had been established during

trial?

(ii)If the delay was attributable also

on the appellants, the quantum of damages

payable by the appellants?

(iii)Whether this Court can take into

consideration Exs.P19 and 20, the reports

of PW2, the Civil Engineer when

admittedly the Civil Engineer visited the

suit properties after cross examination of

PW1?

26.Since the evidence relating to the three issues are interlinked, all the

three issues are taken up for consideration together.

27.The first respondent herein and the appellants had entered into a

Memorandum of Understanding on 20.02.2010 with respect to construction of

four flats in the land belonging to the first respondent. The understanding

envisaged that the appellants herein would construct four flats leaving a stilt in

the ground floor and putting up two flats each in the first and second floors in

the land belonging to the first respondent. The appellants also undertook the https://www.mhc.tn.gov.in/judis

14/27 APPEAL(CAD) No. 22 of 2023

repair works in the bungalow of the first respondent which was just adjoining.

As a matter of fact, the parties had commenced discussions in the year 2005 and

an agreement had been entered into in September 2005, which had been

produced by the appellants and marked as Ex.D1. In the plaint, the first

respondent had also contended that the joint venture had been initiated in the

year 2005 and later culminated in an agreement in the year 2007. However, the

fact that there was an agreement in the year 2005 had not been stated explicitly

in the plaint by the first respondent. This fact would only go to show that both

parties had been protracting coming to terms on the issue of construction of flats

right from the year 2005 onwards. Therefore, there cannot be a definite finding

rendered that the appellants alone were the cause for the delay. But the fact

remains that the parties continued to have a business relationship in spite of the

project not starting from the year 2005 till the year 2010. In the year 2007, the

respondents had executed a General Power of Attorney, which was marked as

Ex.P2 and dated 13.06.2007. The Memorandum of Understanding on which

construction was commenced by the appellants, had been entered into only on

20.02.2010, nearly 4 ½ years after Ex.D1, the first agreement in September

2005. There was also an earlier Memorandum of Understanding on 05.04.2006,

which was marked as Ex.D2. These three documents Ex.D1, Ex.D2 and Ex.D3

itself would show that negotiations went on for a protractive period of time. It

is contended by the appellants that it was the first respondent who protracted

negotiations and in finalising the terms of the agreement. A building plan had https://www.mhc.tn.gov.in/judis

15/27 APPEAL(CAD) No. 22 of 2023

been obtained on 12.09.2009, which had been marked as Ex.D7. The revised

plans were obtained on 05.03.2010 and marked as Ex.D6 and Ex.D7.

28.But however the prevailing agreement was the Memorandum of

Understanding under Ex.P3. In Ex.P3, it had been provided as follows:

The builder will complete and

handover the apartments in 6 to 8 months

from the time of signing this MOU.

29.This clause had been emphasised by the learned counsel for the first

respondent who argued that since the construction had not been completed and

the two flats had not been handed over to the first respondent, the appellants

must pay damages for the delayed handing over of the flats. But however, a

further perusal of the agreement would show that there was no possibility of the

appellants commencing construction on the date when the Memorandum of

Understanding, dated 20.02.2010, was executed since even in the said

Memorandum of Understanding, it had been stated as follows:

The Builder will have a revised plan

sanctioned by the appropriate authority and build

4 apartments in the subdivided plot as in Schedule

‘B’.

It is thus evident that on the date of Memorandum of Understanding,

there was no sanctioned plan to enable construction to commence. The revised https://www.mhc.tn.gov.in/judis

16/27 APPEAL(CAD) No. 22 of 2023

sanctioned plan was issued later on 05.03.2010 as seen from Exs.D6 and D7.

Therefore, there could not have been a possibility of strict adherence to the time

limit mentioned in Memorandum of Understanding. It is further seen from

Ex.P4 dated 16.09.2010 that two flats were allotted to the owners and that the

flats will be handed over to the owners by 15

th

January 2011 and wood work

and interior final painting would take two months after that date. It had been

further undertaken as follows:

In case of any delay, Rs.6,000/- PM will

be paid as penalty till handover/completion.

30.It is thus seen that both parties had consciously agreed that the penalty

payable for delayed handing over of possession of the flats was Rs.6,000/- per

month. When sanctity is insisted on performance of the agreement with respect

to the time limit stipulated, sanctity must also be attached to this clause also. It

was further contended that all works including in the common areas will be

completed by March 2011. Thus, the time period for completion of work had

been extended and there is no evidence that this extension of the time had been

protested by the first respondent. This document had been marked by the first

respondent. Further, it had been also stated as follows:

Construction Agreement will be signed for owners within 2 weeks.

31.No document relating to such construction agreement had been

produced before this Court. https://www.mhc.tn.gov.in/judis

17/27 APPEAL(CAD) No. 22 of 2023

32.It has to be therefore held that the parties were still negotiating and did

not reach finality in their agreement. But however very pertinently, penalty had

been determined at Rs.6,000/- per month, specifically for the delay in handing

over the flats. In the plaint, the first respondent had also referred to this

document Ex.P4 and had also stated that the appellants had undertaken to

handover possession of the flats by March 2011. But however the quantum of

penalty determined had been stated suppressed in the plaint.

33.Letters were then exchanged between the parties with each raising

allegations against each other. The first from the appellants on 11.08.2011

under Ex.P6 for which a reply was given by the first respondent under Ex.P7 on

28.08.2011. In Ex.P6, the appellants had given their own reasons as to why the

flats could not be completed within March 2011. A reply had been issued under

Ex.P7 on 28.08.2011. In that reply, the husband of the first respondent had

stated as follows:

1.Must complete the flat belonging to me in a

month’s time including wood works as specified in

MOU.

Therefore, the time limit had again been shifted from August 2011 to

October 2011. A perusal of the tenor of the letters exchanged between the

parties would show that there has been complete breakdown of mutual trust. https://www.mhc.tn.gov.in/judis

18/27 APPEAL(CAD) No. 22 of 2023

34.It had then come to the knowledge of the first respondent that the

appellants had entered into an agreement of sale with the third defendant in the

suit. This prompted the first respondent to proceed to revoke the Power of

Attorney given in favour of the appellants. This revocation deed was marked as

Ex.P10 dated 09.04.2012. In the revocation deed, the first respondent had

stated as follows:

I hereby CANCEL the said Power of

Attorney absolutely and completely and revoke

all the Powers and Authorities thereby and

thereunder given to him either expressly or

impliedly, to all interests and purpose. I now

hereby revoke and declare as null and void all

and singular the Power and Authority conferred

on the said Mr.T.Gokula Krishnan through the

above mentioned General Power of Attorney.

35.It is therefore evident that on and from this date, the appellants could

not act on behalf of the first respondent with respect to the suit properties.

36.They had an obligation to construct the flats, but the first respondent

had revoked all powers and authorities given either expressly or impliedly.

Under the Power of Attorney which had been marked as Ex.P2 dated

13.06.2007, the authority given was as follows:

3.To enter into an agreement/MOU for https://www.mhc.tn.gov.in/judis

19/27 APPEAL(CAD) No. 22 of 2023

sale with any third parties, sign the sale

agreement(s) on my behalf and also to receive

the advances/sale consideration in respect of

the schedule B property measuring about 2835

Sq.ft. The Sale of Undivided Share of land by

the Power Agent is limited to maximum 2135

Sq.ft. as the Principal is intend to retain about

700 Sq.ft for the purpose of owning one flat in

the proposed construction of residential

building in the Schedule B.

37.Thus, effectively, the first respondent had revoked the authority given

to the appellants to sell the flat in favour of the third defendant. The flat had

actually been conveyed subsequently to the same intended party/the third

defendant. This also indicated that both parties have been oscillating in their

relationship, taking extreme stands and levelling allegations against each other.

However, the fact remains that the penalty for delayed handing over of the flats

was fixed at Rs.6,000/- per month and that has not been altered and even sought

to be altered by any of the letters exchanged between the parties on subsequent

dates.

38.Further letters were then exchanged. The first one on 10.04.2012

under Ex.P11 by the appellants to the first respondent, wherein, it had been

specifically stated as follows:

Moreover the two flats falling to

your share are fit and ready for occupation

for the past 6 months. We can handover https://www.mhc.tn.gov.in/judis

20/27 APPEAL(CAD) No. 22 of 2023

possession, once the accounts are

reconciled and all pending payments are

made.

39.This letter was replied by the first respondent under Ex.P12 dated

10.05.2012, wherein, she had stated as follows,

4) I still disagree with your contention that

the two flats falling to my share are fit and ready

for occupation. To set right the controversy I would

like to make an inspection of the aforesaid flats with

the help of a Chartered Civil Engineer on a day

convenient to both of us. You may indicate few days

falling in this month and the convenient time for

such inspection. Once an independent assessment

is done by the Chartered Civil Engineer I will be in

a position to take appropriate decision. Hope you

would co-operate in this regard and hand over the

flats completely finished with everything agreed

upon in the Memorandum of Understand fulfilled,

including wood works.

40. It is thus seen that the correspondences exchanged between both sides

only contain allegations against each other.

41.The plaint was then presented on 30.11.2012. During the pendency of

the suit, an Advocate Commissioner had been appointed. He filed a report

enclosing a report of an Engineer. This document had been marked as Ex.P13. https://www.mhc.tn.gov.in/judis

21/27 APPEAL(CAD) No. 22 of 2023

The Engineer was appointed to determine the unfinished work, their estimates,

measurements as well the status on painting, electrification, flooring works etc.

42.The Engineer had also given a report dated 12.04.2013 listing out the

works which had not been done and estimated their total cost at Rs.5,83,994.30.

Even though it is claimed that the respondents had raised objections to the same,

the said objections are not on record. Be that as it may, while examining the

issue as to who was responsible for the delay, it is evident that both sides are

equally responsible. But again, it is to be pointed out that the penalty for

delayed handing over of the flats was determined at Rs.6,000/- per month and in

the plaint that had not been questioned or challenged or objected to or claimed

to have been altered.

43.PW1 had been examined and cross examined. He reiterated the same

facts. The reason for the delay was placed solely on the appellants. DW1 had

been cross examined and he placed the reasons for the delay solely on the first

respondent.

44.However, since the issue had narrowed down only to the payment of

damages for the delayed handing over of the flats, which damages were

quantified at Rs.20,20,000/- in the plaint, PW1 was questioned as to how he

had determined that amount. The plaint also did not contain a work sheet as to https://www.mhc.tn.gov.in/judis

22/27 APPEAL(CAD) No. 22 of 2023

how that particular amount was crystallised. It had only been mentioned as

follows:

A demand was also made for the balance sum of

Rs.40,00,000/- with a reasonable interest @ 18% per

annum from March 2011 apart from the damages to

tune of Rs.20 lacs inclusive of loss of rental income for

the two flats from April 2011, cost of painting the

exterior of the bungalow and other civil work left

unfinished by the first defendant and damages for

mental agony suffered by the plaintiff.

45.It had been stated that this Rs.20,00,000/- was inclusive of loss of

rental income for the two flats from April 2011 and for the cost of unfinished

work. But however, the rental income was then mentioned in the plaint at

Rs.45,000/- per flat per month. The first respondent had calculated the loss of

rental income at Rs.90,000/- per month for the two flats from April 2011 till

November 2012, which was when the plaint was presented. But again, no

working sheet was produced determining the rent at Rs.45,000/-. During his

cross examination, PW1 admitted to this fact and stated as follows:

Since I did not get any revenue from the flats and

was also denied access to the flats, I have made a claim

of Rs.20,20,000/-. I have not filed any documentary

proof in support of such claim. I deny the suggestion

that my claim is speculative. https://www.mhc.tn.gov.in/judis

23/27 APPEAL(CAD) No. 22 of 2023

46.This admission was on 11.12.2017 and is very significant. Even

during the pendency of the suit, for five years from the date of presentation, the

first respondent had not taken any steps to determine the probable rental value.

Thereafter, the first respondent had engaged a Civil Engineer who was

examined as PW2. He had inspected the suit schedule flats on 18.12.2018 to

determine the rental value. In his cross examination, he admitted that he did not

issue any notice to the appellants before his inspection. He further stated that he

was requested by the first respondent to inspect and give a report just one week

prior to 18.02.2018. It is thus seen that the entire exercise had been undertaken

after the cross examination of PW1 had been completed.

47.Any plaintiff who comes to Court with specific allegations must have

marshalled his documentary and oral evidence before the commencement of

trial and not indulge in gathering evidence during the course of trial and

moreover particularly, after admitting that he had not filed any documentary

proof for the claim made, in this instant case of Rs.20,20,000/-. Having

mentioned the rental income at Rs.45,000/- per month in the plaint, the plaintiff

was duty bound to produce documents to that effect along with the plaint. That

amount should have been stated in the plaint on the basis of documents

available. Failure to do so would only render the documents subsequently

produced as having been produced to be inconsonance with the pleadings

already pleaded. Any document subsequently produced would only be in https://www.mhc.tn.gov.in/judis

24/27 APPEAL(CAD) No. 22 of 2023

alignment with the pleadings and they can never be stated to be an independent

unbiased assessment of the rental value.

48.The learned Trial Judge had granted damages payabel from April 2011

till September 2015. But however, the documents themselves show that the first

respondent had extended the period for further time in the reply under Ex.P7

and shifted the time period to September 2011. In view of these facts which

have been deduced from the documents and the evidence adduced by the

parties, it is clear that time was never the essence of the agreement and even if

time period had been determined in the Memorandum of Understanding under

Ex.P3, it was impossible to keep up with that time period since the revised plan

was not even sanctioned on that date. Further, the claim for damages on the

basis of loss of rental income does not admit to logic. If the first respondent

seeks damages for loss of rental income, then it is obvious that the flats were not

to be a place of personal residence. If that be the case, the first respondent had

no right to question the sale in favour of the third defendant. This objection to

convey the property to the third defendant was wholly unjustified. We would

therefore answer the points framed for consideration that the delay was owing to

the conduct of both parties at irregular intervals. It is evident that there was

complete breakdown of trust and moreover with the revocation of Power of

Attorney in April 2012 under Ex.P10, the authority and the responsibility of the

appellants to commit to their obligations under the Memorandum of https://www.mhc.tn.gov.in/judis

25/27 APPEAL(CAD) No. 22 of 2023

Understanding stood diluted. It is to be however stated that they still proceeded

with the completion of the flats.

49.The reports of PW2, the Engineer will necessarily have to be rejected

as they have been prepared during the course of trial, after commencement of

recording of evidence and most specifically, after the cross examination of PW1

and more importantly, after the admission of PW1 that he had not produced any

document to substantiate the quantum of damages and further since PW2 had

been appointed by PW1 and was therefore obliged to PW1. Admittedly, PW2 is

not an independent Engineer appointed by the Court. The Engineer appointed

by the Advocate Commissioner, had given a report under Ex.P13 that the

estimate of the unfinished work amounted to Rs.5,83,994.30.

50.In view of these reasons, we would interfere with the amount

determined by the learned Trial Judge as damages and retain the amount as

determined by the parties in the letter of undertaking Ex.P4, dated 16.09.2010

and quantify the same from September 2011 till September 2015, which should

be for 48 months. The amount agreed by the parties was Rs.6,000/- per month,

which comes to Rs.2,88,000/-.

51.Accordingly, we hold that the damages for 48 months should be

Rs.2,88,000/-. We would partly allow the appeal and determine the quantum of https://www.mhc.tn.gov.in/judis

26/27 APPEAL(CAD) No. 22 of 2023

damages payable by the appellants to the first respondent at Rs.2,88,000/-

together with interest at 15% per annum from the date of the plaint till this date

and thereafter, interest at 6% per annum till the date of realisation of the entire

amount. In view of the fact that we have rendered a finding that the delay was

also due to the conduct of the first respondent and also of the appellants, we are

not inclined to grant costs to either side.

52.The appeal is partly allowed. No costs. Consequently, connected

miscellaneous petition is also closed.

(C.V.K.J., ) (K.B.J., )

19.02.2026

Index:Yes/No

Speaking/Non-speaking order

Internet:Yes

Neutral Citation:Yes/No

sli

To

The Commercial Court,

Chennai. https://www.mhc.tn.gov.in/judis

27/27 APPEAL(CAD) No. 22 of 2023

C.V.KARTHIKEYAN, J.

AND

K.KUMARESH BABU, J.

sli

Pre-delivery Judgment in

APPEAL(CAD) No. 22 of 2023

19.02.2026 https://www.mhc.tn.gov.in/judis