HC: Plaintiff need not share details of Funds available in a Suit for Specific Performance, Read Judgment

The Kerala High Court has held that plaintiff not providing details of funds in possession is not fatal to suit for specific performance as such details are matter of evidence needed to be pleaded.

The Division Bench of Justice P. B. Suresh Kumar and Justice C. S. Sudha allowed an appeal against order of Subordinate Judge wherein suit for specific performance or in the alternative, return of advance money was decreed partly by allowing the prayer for return of advance money.

In brief facts of the case, the suit pertains to a sale deed executed in 2006 wherein  the respondents sold property of 12.32 acres for a total sale consideration of ₹ 55,44,000/-. The appellant paid an advance of ₹10,00,000/- and to execute the sale deed, a period of three months was agreed on.

Facing lapse on part of the respondent regarding execution of decree, the appellant filed suit for specific performance or in the alternative, return of advance money.

The Respondent has contended that there was never any sale agreement and that it was executed as security when the respondent borrowed ₹10,00,000/- from the appellant. It was argued that there was never any intention of the parties to act upon the sale agreement though it was styled as a decree. It was informed they sent a cheque for ₹10,00,000 to return the amount borrowed when they received legal notice from the appellant.

In furtherance, the respondent alleged undue influence, coercion and fraud on part of appellant as they accused that she made them sign the agreement before lending the sum. It was thus argued that the agreement is void ab initio and isn't binding on them.

The Subordinate Judge wasn't swayed by the appellant's arguements and thus not allowed the plea for suit for specific performance and partly allowing it, permitted return of advance money.

In the appeal, one of the arguememt of the respondent was that the plaint did not provide details of the funds in the possession of the appellant or how she intended to raise the necessary funds to pay the balance sale consideration. They cotended that it was revealed only in the proof affidavit of the power of attorney of the plaintiff and thus it was being argued that requirements under Section 16(c) of the Specific Relief Act weren't fulfilled as an effect of which she should be deprived of any relief.

Section 16(c) of the Specific Relief Act

As per Section 16(c) of the Act, specific performance of a contract cannot be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than the terms the performance of which has been prevented or waived by the defendant. This was the pre-amendment position. After the amendment of the Section in the year 2018, now it is not necessary for the plaintiff to ‘aver and prove’, it is sufficient that he proves his readiness and willingness.

High Court's Analysis

The Court at the outset note that undoubtedly for the plaintiff to succeed in a suit of this nature, compliance of Section 16 (c) of the Act is mandatory. It however cited Ganesh Trading Co. Vs. Moji Ram, 1978 Latest Caselaw 17 SC and added that procedural law is intended to facilitate and not to obstruct the course of substantive justice.

"Provisions relating to pleading in civil cases are meant to give to each side intimation of the case of the other so that it may be met to enable Courts to determine what is really at issue between the parties"

The Court next noted that whenever the question about lack of pleading is raised, the enquiry should not be so much about the form of the pleadings but the Court must find out whether in substance, the parties knew the case and the issues upon which they went to trial. Once it is found that in spite of deficiency in the pleadings, parties knew the case and they proceeded to trial on the issues by producing evidence, it would not be open to a party to raise the question of lack of pleadings, it concluded.

Referrence was made to Ram Sarup Gupta (Dead) By Lrs. Vs. Bishun Narain Inter College & Ors, 1987 Latest Caselaw 98 SC. The Court futher mentioned Bhagwati Prasad Vs. Shri Chandramaul , 1965 Latest Caselaw 218 SC, in which it was observed that a party cannot be permitted to justify its claim on a ground which is entirely new and which is inconsistent with the ground made by it in its pleadings. But in considering the application of this doctrine to the facts of a case, it is necessary to bear in mind the principle that considerations of form cannot override the legitimate considerations of substance.

"If a plea is not specifically made and yet it is covered by an issue by implication and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule, no doubt, is that the relief should be founded on pleadings made by the parties. But where substantial matters relating to both parties to the suit are touched, though indirectly or even obscurely, in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings, would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another. Therefore, the enquiry should not be so much about the form of the pleadings as their substance."

In view of the above, the Court noted that the plaintiff was and ready and willing to perform her part of the contract and that though she had approached and requested the defendants to execute the deed in her favour, they have failed to perform their part of the agreement. Though she has not given the details of the funds in her possession or the manner in which she intended to raise them in the plaint, the same isn't fatal as those aspects are matters of evidence, which as per O.VI Rule 1 need not be pleaded.

The Court further stated that notice issued by the plaintiff refers to her readiness and willingness. However, in the reply sent by the defendants, there is absolutely no reference or denial of the claim made by the plaintiff in her notice that she was always ready and willing to perform her part of the contract. 

"In the reply notice, the only case put forward by the defendants is that Ext.A2 is not a sale agreement and that it is an agreement that was executed as security when the first defendant borrowed an amount of ₹10 lakhs from the plaintiff. In the plaint the plaintiff has reiterated her case of readiness and willingness. However, there is no denial whatsoever of this allegation/pleading in the written statement filed by the defendants."

Order VIII Rule 3: Denial has to be specific

It was observed that Order VIII Rule 3 says that denial has to be specific and that it shall not be sufficient for the defendant in his written statement to deny generally the grounds alleged by the plaintiff, but the defendant must deal specifically with each allegation of fact of which he does not admit the truth. 

Order VIII Rule 4 : Point of substance required 

It says that where a defendant denies an allegation of fact in the plaint, he must not do so evasively, but answer the point of substance, the Court added.

"If it is alleged that he received a certain sum of money, it shall not be sufficient to deny that he received that particular amount, but he must deny that he received that sum or any part thereof, or else set out how much he received. And if an allegation is made with diverse circumstances, it shall not be sufficient to deny it along with those circumstances."

Order VIII Rule 5: Every allegation of fact to be denied specifically

Order VIII Rule 5 says that every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability. The proviso says that the court may in its discretion require any fact so admitted to be proved otherwise than by such admission.

Noting that n terms of O.8 R.3 CPC, a defendant is required to deny or dispute the statements made in the plaint categorically, as evasive denial would amount to an admission of the allegation made in the plaint in terms of O.8 R.5 CPC, the Court reiterated that the written statement must specifically deal with each of the allegations of fact made in the plaint. The failure to make specific denial amounts to an admission.

It thus stated that in the case on hand, in the written statement, apart from a vague and evasive denial of the entire pleadings in the plaint, there is no specific denial or for that matter, any denial of the case of the plaintiff in the plaint that she was/is always ready and willing to perform her part of the contract. It is true that the plaintiff is the dominus litis or the master of the suit and hence as per Section 101 of the Evidence Act, the burden is on the plaintiff to establish her case and she cannot win her case on the weakness or inconsistencies in the case of the defendants. However, in this case, there is no denial of the claim by the plaintiff that she was/is always ready and willing to perform her part of the contract.

The Court therefore concluded that there has been no specific denial and in the absence of a specific denial as contemplated under Order VIII Rule 5, it would amount to an admission and as long as there is no denial, there is no duty on the part of the plaintiff to prove her case because admitted facts need not be proved.

Subsequently, the appeal was allowed.

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