Kerala High Court
Mundanthara Subramanian vs Kaatholil Madhava Menon (Died, ... on 2 March, 2022
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
&
THE HONOURABLE MRS. JUSTICE C.S. SUDHA
WEDNESDAY, THE 2 ND DAY OF MARCH 2022 / 11TH PHALGUNA, 1943
RFA NO. 626 OF 2013
AGAINST THE JUDGMENT AND DECREE DATED 16/03/2013 IN OS 414/2011 OF SUB COURT, KOZHIKODE
APPELLANT/PLAINTIFF:
MUNDANTHARA SUBRAMANIAN
AGED 66 YEARS
S/O.MUNDANATHRA SHANKU, EX-SERVICEMAN, "REVATHY", KARUVASSERRI P.O.,
VENGERI AMSOM, KARUVASSERRI DESOM, KOZHIKODE TALUK AND DISTRICT-673 010.
BY ADVS.SRI.N.SUBRAMANIAM
SRI.M.S.NARAYANAN
SRI.A.RANJITH NARAYANAN
SMT.A.SIMI
SMT.USHA NARAYANAN
SRI.S.K.SAJU
RESPONDENTS/DEFENDANT:
1 KAATHOLIL MADHAVA MENON (DIED, LRS IMPLEADED)
AGED 71 YEARS, S/O.LATE KUNHUNNI MENON, THEYYAMKULANGARA TAZHAM,
NEAR CHINMAYA SCHOOL, NELLIKKODE AMSOM AND DESOM,
KOZHIKODE TALUK AND DISTRTICT-673 016.
(DIED) ADDITIONAL R2 TO R4 IMPLEADED)
2 MRS.KATTAYAT VADASSERI THAZHATH PADMAJA
AGE NOT KNOWN TO THE APPELLANT, W/O.LATE KAATHOLIL MADHAVA MENON,
"AMBADI", THEYYAMKULANGARA TAZHAM, NEAR CHINMAYA SCHOOL, NELLIKKODE
AMSOM AND DESOM, THONDAYAD P.O., NELLIKODE,
KOZHIKODE TALUK AND DISTRICT 673016.
3 MR.UNNIKRISHNAN,
AGE NOT KNOWN TO THE APPELLANT, S/O.LATE KAATHOLIL MADHAVA MENON,
"AMBADI", THEYYAMKULANGARA TAZHAM, NEAR CHINMAYA SCHOOL, NELLIKKODE
AMSOM AND DESOM, THONDAYAD P.O., NELLIKODE,
KOZHIKODE TALUK AND DISTRICT 673016.
4 MRS.KAVITHA SANGEETH.
AGE NOT KNOWN TO THE APPELLANT, S/O.LATE KAATHOLIL MADHAVA MENON,
"AMBADI", THEYYAMKULANGARA TAZHAM, NEAR CHINMAYA SCHOOL, NELLIKKODE
AMSOM AND DESOM, THONDAYAD P.O., NELLIKODE,
KOZHIKODE TALUK AND DISTRICT 673016.
2
R.F.A.No.626 of 2013
THE LEGAL HEIRS OF THE DECEASED RESPONDENT ARE IMPLEADED AS ADDITIONAL
RESPONDENTS 2 TO 4 VIDE ORDER DATED 27.11.18 IN IA 2338/14.
BY ADVS.P.B.KRISHNAN
P.B.SUBRAMANYAN
SABU GEORGE
MANU VYASAN PETER
THIS REGULAR FIRST APPEAL HAVING COME UP FOR ADMISSION ON 18/02/2022, THE
COURT ON 02.03.2022 DELIVERED THE FOLLOWING:
3
R.F.A.No.626 of 2013
P.B.SURESH KUMAR & C.S.SUDHA, JJ.
--------------------------------------------------
R.F.A.No.626 of 2013
-------------------------------------------
Dated this the 2 nd day of March, 2022
JUDGMENT
C.S.Sudha, J.
This is an appeal filed against the judgment and decree dated
16/03/2013 in O.S.No.414/2011 on the file of the Subordinate Judge's Court,
Kozhikode. The suit is one for specific performance and in the alternative for
return of advance money and compensation. The suit has been partly decreed
and the amount paid as advance has been directed to be refunded. Aggrieved
the plaintiff is before us in this appeal. The sole respondent herein is the
defendant in the suit. The respondent passed away during the pendency of this
appeal and hence his heirs have been impleaded as additional respondents 2 to
4. The parties in this appeal will be referred to as described in the suit.
2. The plaintiff and the defendant entered into Ext.A1 sale
agreement dated 21/02/2011 by which the latter agreed to sell the plaint
schedule property to the former for a sale consideration of ₹ 50 lakhs. Pursuant
R.F.A.No.626 of 2013
to the agreement, an amount of ₹ 15 lakhs was paid as advance on the same
day. According to the plaintiff, he was always ready and willing to perform his
part of the agreement. However, the defendant was never ready to perform his
part of the agreement. After the execution of the agreement, the defendant made
himself scarce and for one reason or the other, attempted to wriggle out of the
agreement. The breach of the contract has been committed by the defendant
and hence the suit.
3. The defendant admits the execution of Ext.A1 and the receipt of
the advance amount of ₹15 lakhs. However, he denies the allegation that he
had violated the terms of the agreement. According to him it was the plaintiff
who was not ready and willing to perform his part of the contract. The plaintiff
never had the necessary resources with him. The defendant had entered into
Ext.A1 agreement with the intention of purchasing another property for which
he had entered into Ext.B5 agreement dated 25/02/2011 and had also paid an
advance amount of ₹ 8 lakhs. Since the plaintiff failed to take the sale of the
plaint schedule property, he sustained a loss of ₹ 8 lakhs and hence the plaintiff
is not entitled to return of the entire advance amount. The defendant is liable to
return only an amount of ₹ 7 lakhs after deducting an amount of ₹ 8 lakhs,
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which he has suffered as loss as he was unable to take sale of Ext.B5 property.
4. On the side of the plaintiff, PWs.1 and 2 were examined and
Exts.A1 to A8 were marked. DW1 was examined and Exts.B1 to B6 series
were marked on the side of the defendant. The court below after considering
the oral and documentary evidence as well as hearing the parties, decreed the
suit in part and ordered the defendant to return the advance amount of ₹ 15
lakhs along with interest @ 12% p.a. from the date of Ext.A1 agreement i.e.,
21/02/2011, till realisation and costs from the defendant and his assets.
5. In the appeal memorandum it is contended that the court below
totally misdirected itself in arriving at its conclusions. As the impugned
judgment is against facts, evidence and law, the same is liable to be set aside.
6. Heard Sri.N.Subrahmaniam, the learned counsel for the appellant
and Sri.P.B.Krishnan, the learned counsel for the respondents.
7. The only point that arises for consideration in this appeal is - Did
the court below err in arriving at the conclusion that the plaintiff was not ready
and willing to perform his part of the contract, thus calling for an interference
by this Court?
8. As noticed earlier, execution of Ext.A1 agreement dated
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21/02/2011, payment and receipt of an amount of ₹ 15 lakhs as advance are
admitted. As per Ext.A1, the contract was to be performed within a period of
two months, i.e., by 21/04/2011. Admittedly the period for performance was
extended from 21/04/2011 till 27/04/2011 and necessary endorsement to the
said effect has been made in Ext.A1. The fact that time was extended till
27/04/2011 is also admitted. However, the parties dispute the reason for the
extension to which, we will come to shortly. The court below refused to grant
the relief of specific performance mainly on the following grounds - (i) the
bonafides of the plaintiff was doubted as he had brought in a new case in the
plaint that the purchase of the property was for his daughter and not for him;
(ii) in the draft sale deed, namely Ext.A4, the sale consideration is shown as
₹6,33,300/- in the place of the actual value of ₹ 50 lakhs; (iii) non examination
of the plaintiff's daughter to prove that the latter was ready to provide necessary
funds for the purchase and (iv) the conduct of the plaintiff in approaching
authorities like, the District Sainik Welfare Officer and the District Collector
who had no authority to adjudicate the dispute, without immediately filing the
suit.
9. In Ext.A1 agreement, the plaintiff is stated to be the buyer of
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the property. There is no reference in Ext.A1 to the plaintiff's daughter or the
fact that the property is being purchased by the plaintiff for and on behalf of his
daughter. In the plaint it is stated that the property was intended to be
purchased for the plaintiff's daughter who is working abroad. Referring to this
aspect, it was submitted by the learned counsel for the defendant that the new
story in the plaint that the property was intended to be purchased for the
daughter has been introduced only to show that the plaintiff had sufficient
resources/funds in his possession for taking the sale of the property, whereas
the actual position was that he did not have the necessary or the required funds
to take the sale of the property. Reference was made to the decision of the
Hon'ble Supreme Court in Kamal Kumar v. Premlata Joshi (2019 KHC
6012) in which it has been held that it is a settled principle of law that the grant
of relief of specific performance is a discretionary and equitable relief. The
material questions, which are required to be gone into for grant of the relief of
specific performance are - (i) whether there exists a valid and concluded
contract between the parties for sale / purchase of the suit property; (ii) whether
the plaintiff has been ready and willing to perform his part of contract and
whether he is still ready and willing to perform his part as mentioned in the
R.F.A.No.626 of 2013
contract; (iii) whether the plaintiff has, in fact, performed his part of the
contract and, if so, how and to what extent and in what manner he has
performed and whether such performance was in conformity with the terms of
the contract; (iv) whether it will be equitable to grant the relief of specific
performance to the plaintiff against the defendant in relation to suit property or
it will cause any kind of hardship to the defendant and, if so, how and in what
manner and the extent if such relief is eventually granted to the plaintiff.
Referring to the above requirements, it was submitted by the learned counsel
for the defendant that requirement (iii) has not been satisfied by the plaintiff, as
the case averred in the plaint and attempted to be proved is not in conformity
with the terms of Ext. A1.
10. In N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao,
(1995) 5 SCC 115 it has been held that S.16(c) of the Specific Relief Act (the
Act) envisages that the plaintiff must plead and prove that he had 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 those terms the performance of
which has been prevented or waived by the defendant. The continuous
readiness and willingness on the part of the plaintiff is a condition precedent to
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grant the relief of specific performance. This circumstance is material and
relevant and is required to be considered by the court while granting or refusing
to grant the relief. If the plaintiff fails to either aver or prove the same, he must
fail. To adjudge whether the plaintiff is ready and willing to perform his part of
the contract, the court must take into consideration the conduct of the plaintiff
prior and subsequent to the filing of the suit along with other attending
circumstances. The amount of consideration which he has to pay to the
defendant must of necessity be proved to be available. Right from the date of
the execution till date of the decree he must prove that he is ready and has
always been willing to perform his part of the contract. The court may infer
from the facts and circumstances whether the plaintiff was always ready and
willing to perform his part of the contract.
11. In P.D'Souza v. Shondrilo Naidu, (2004) 6 SCC 649, the
Apex court held that it is indisputable that in a suit for specific performance of
contract the plaintiff must establish his readiness and willingness to perform his
part of contract. The question as to whether the onus was discharged by the
plaintiff or not will depend upon the facts and circumstance of each case. No
strait - jacket formula can be laid down in this behalf. The readiness and
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willingness on the part of the plaintiff to perform his part of contract would also
depend upon the question as to whether the defendant did everything which
was required of him to be done in terms of the agreement for sale.
12. In addition to the aforesaid decisions, there are several other
decisions on the matter. We do not intend to refer to all of them as the aforesaid
two decisions including the one cited by the learned counsel for the defendant
are more than sufficient to make the position quite clear. In the instant case,
according to the court below, the alleged non-disclosure of the identity of the
actual buyer to the defendant tells upon the bonafides of the plaintiff and
specific performance being a discretionary remedy, cannot be given to a person
like the plaintiff for concealing the aforesaid fact. We fail to comprehend the
reasoning of the court below. According to the plaintiff and his witness, namely,
PW2, the defendant had actually been informed about this fact. However, the
defendant denies this case of the plaintiff. Let us assume for a moment that this
fact was never disclosed by the plaintiff to the defendant. Does that disentitle
the plaintiff to the relief of specific performance? In Ext.A1, it is stated that the
sale deed shall be executed in the name of the plaintiff or in the name of any
person as instructed/desired by him. It is true that in Ext.A4 draft sale deed
R.F.A.No.626 of 2013
also, the name of vendor/buyer, is the plaintiff. We are at a loss to understand
how that in any way affects the bonafides of the plaintiff or can be made a
ground to reject his claim. In our view, the same cannot be the sole ground or
one of the grounds for rejecting the relief sought for in the light of the aforesaid
settled principles of law in the matter of specific performance.
13. The factum of the plaintiff's readiness and willingness to
perform his part of the contract is to be adjudged with reference to the conduct
of the party and the attending circumstances. The main aspect to be looked into
is whether the plaintiff was ready and willing to perform the essential terms of
Ext.A1 which were to be performed by him. Ext.A2 certificate dated
21/02/2011 issued by the SBT, Main Branch, Kozhikode, makes it clear that the
advance amount of ₹ 15 lakhs had been paid by the plaintiff from his
daughter's account. Ext.A1 also mentions the fact that the advance was paid by
way of demand draft dated 21/02/2011 issued by the SBT, Main Branch,
Kozhikode. Neither Ext.A2 nor the statement in Ext.A1 relating to the mode of
payment of the advance amount is disputed by the defendant. The mode of
payment of the advance amount was also never objected to by the defendant.
Therefore, the plaintiff's daughter is seen to have been in the picture right from
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the beginning and in all possibility/probability the plaintiff must have been
aware of this fact also. Even assuming that this fact had not been revealed to
the defendant as contended by him, the same will not in any way affect the
bonafides of the plaintiff or disentitle the plaintiff to the relief of specific
performance.
14. In a contract for sale of immovable property, normally it is
presumed that time is not the essence of the contract. The Apex Court in
Gomathinayagam Pillai vs. Palaniswami Nadar (AIR 1967 SC 868) held
that fixation of the period within which the contract has to be performed does
not make the stipulation as to time the essence of the contract. The intention to
treat time as the essence of the contract may however be evidenced by
circumstances which are sufficiently strong to displace the normal presumption
that time is not the essence in contract for sale of land. The intention to make
time stipulated for payment of balance consideration will be considered to be
essence of the contract where such intention is evident from the express terms
or the circumstances necessitating the sale, set out in the agreement. To find out
whether time was the essence of the contract, reference has to made to the
terms and conditions of the contract itself. The legal position is clear from the
R.F.A.No.626 of 2013
Constitution Bench decision in Chand Rani v. Kamal Rani, 1993 KHC 877:
AIR 1993 SC 1742, wherein the Apex Court held that it is a well-accepted
principle that in the case of sale of immovable property, time is never regarded
as the essence of the contract. In fact, there is a presumption against time being
the essence of the contract. Under the law of equity which governs the rights of
the parties in the case of specific performance of contract to sell real estate, law
looks not at the letter but at the substance of the agreement. It has to be
ascertained whether under the terms of the contract the parties named a specific
time within which completion was to take place, really and in substance it was
intended that it should be completed within a reasonable time. An intention to
make time the essence of the contract must be expressed in unequivocal
language.
15. In Ext.A1 agreement, time is stated to be the essence of the
contract. As held by the Apex Court in the aforesaid decisions, mere fixation
of the period within which the contract is to be performed does not make the
stipulation as to time, the essence of the contract. What has to be ascertained is
whether under the terms of the contract, the parties intended the contract to be
performed within the time specified. Here the intention to make time the
R.F.A.No.626 of 2013
essence of the contract has been expressed in unequivocal language in
Ext.A1. This coupled with the fact that even the extension agreed to by the
parties was for quite a short period, would show that the parties did intend to
treat time as essence of contract.
16. According to the plaintiff, he was always ready and willing to
perform his part of the agreement. He was even ready to pay the entire sale
consideration at the time of execution of Ext.A1 agreement itself, for which he
had the necessary resources also. However, the defendant wanted time to shift
his residence from the plaint schedule property and hence the time for
execution of the sale deed was fixed as two months. In the plaint it is also
alleged that as per the terms of the agreement, for the preparation of the sale
deed, the defendant was bound to hand over all the documents, that is, the prior
title deeds, the encumbrance certificate, property and building tax receipts,
possession certificate, location certificate to the plaintiff. But after the
execution of Ext.A1, the defendant made himself scarce and all attempts were
made by the defendant to wriggle out of the agreement.
17. This case of the plaintiff is denied by the defendant who
contended that the breach had been committed by the plaintiff as he was never
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in possession of the required funds and hence not ready and willing to perform
his part of the agreement. The learned counsel for the defendant drew our
attention to Ext. B6 copy of sketch dated 09/03/2011; and B6 series dated
01/03/2011, which are copy of applications for sketch, possession certificate,
location certificate and copy of location certificate and submitted that within
about 10 days of the execution of Ext. A1 agreement dated 21/02/2011, the
defendant had taken all steps for getting the necessary documents though the
period fixed for performance was two months. This itself would show that the
allegation in the plaint that though the plaintiff approached the defendant
several times, he had refused/failed to hand over the necessary documents for
preparation of the sale deed is false. Disputes actually arose on the eve of the
execution of the sale deed, that is, on 26/04/2011 when the plaintiff showed
Ext. A4 draft sale deed to the plaintiff with gross undervaluation of the
property. This was objected to by the defendant. This finally led to the
defendant repudiating the contract by way of Ext. A7 notice dated 21/05/2011.
Hence, it was submitted on behalf of the defendant that the breach has actually
been committed by the plaintiff. Time was the essence of the contract.
However, the plaintiff was not ready and willing to perform his part of the
R.F.A.No.626 of 2013
contract within the time specified and hence the defendant was constrained to
repudiate the contract. In such circumstances, the court below was justified in
refusing the relief of specific performance, goes the argument.
18. The reason given by the plaintiff for fixing two months' time
for performance of the agreement is not disputed by the defendant when he was
examined before the court below as DW1. He was asked during his cross
examination whether he would have been able to shift from his residence, had
the performance of the contract been fixed on the very same day of the
execution of Ext.A1 agreement, to which he replied that he is not sure whether
he could vacate so. Further to a question that it was he who wanted time for
vacating the house, he replied that time till he purchased an alternate property
as per Ext.B5 was required for shifting. He also deposed that as per Ext.A1 he
was required to shift on the same day of the execution of the sale deed. ( വവാദദികക
വസ കകവാടുതവാൽ അന്നുതകന ഒഴദിഞ കകവാടുകവാൻ കഴദിയുമമവാ എനക പറയവാൻ കഴദിയദില.
തവാങൾകവായദിരുന്നു വവീടക ഒഴദിയവാൻ സമയയ മവണദിയദിരുനതക (Q) Ext.B5 വുമവായദി
മവാറദിതവാമസദിമകണ സമയയ മവണദി വരുയ. Ext.A1 പ്രകവാരയ അനക തകന വവീടക ഒഴദിഞ
കകവാടുകണയ.) Therefore, the case of the plaintiff that the period of two months
R.F.A.No.626 of 2013
was fixed for performance of the contract to enable the defendant to shift his
residence appears to be probable.
19. The plaintiff further alleges that he had approached the
defendant several times after the execution of Ext.A1 agreement to get the sale
deed executed. When he along with the two brokers who had introduced him to
the defendant went to the house of the latter to collect the necessary documents,
the defendant was not in station. The plaintiff made enquiries to Krishnan
Kutty, the brother-in-law of the defendant, who is also a witness in Ext.A1. He
was informed that the defendant had gone to Dubai. When the plaintiff again
approached the defendant on 16/04/2011 after the latter's return from Dubai, he
was informed that it was not possible to register the sale deed on 21/04/2011, as
the defendant's son had to come from Bangalore and that time was required for
the defendant to shift his residence and so time was sought till 10/05/2011. The
plaintiff was not amenable to this request. However, he agreed to extend the
time for performance till 27/04/2011. Hence time was extended till 27/04/2011
and necessary endorsement made in Ext.A1. On 18/04/2011 the plaintiff
accompanied by the two brokers went to the house of the defendant to show
him the draft sale deed. However, the defendant asked them to come on another
R.F.A.No.626 of 2013
day as his wife was sick. On 23/04/2011 when the plaintiff again went to the
house the defendant, he found the house locked. The plaintiff and the brokers
again approached the defendant on 24/04/2011. On the said day they were
informed by the defendant's wife that the defendant was laid up and so asked
them to come after 5 days. Again, an attempt was made on 25/04/2011. But
they were unable to meet the defendant. On 26/04/2011 when the plaintiff
along with the brokers approached the defendant and showed him the draft sale
deed, the defendant objected to the sale consideration being shown as
₹6,33,300/- and he wanted it to be shown as ₹ 25 lakhs. The plaintiff agreed to
this demand made by the defendant as he wanted the deed to be executed at the
earliest. As his daughter was in Dubai, he decided to take the sale in his name.
The defendant then informed him that out of the balance sale consideration, an
amount of ₹ 10 lakhs must be transferred through the NRE account of the
defendant's daughter who is also in Dubai. The plaintiff agreed to this demand
also. He informed his daughter and immediately made arrangements to transfer
the amount from the NRE account of his daughter with the SBT, Main Branch
Kozhikode to his daughter's account. As soon as the money was credited to the
plaintiff's daughter's account in Dubai, she contacted the defendant's daughter
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for transferring the amount to the account of the latter. However, the
defendant's daughter informed her that she had received instructions from
defendant, her father, not to accept the money. On 27/04/2011 when the
plaintiff again approached the defendant, he found that the defendant and his
wife were absent / not present at their residence. The plaintiff thereafter
continued to inquire about the whereabouts of the defendant. On 10/05/2011
when the plaintiff along with the brokers again approached the defendant, the
latter abused and threatened them. Seeing this incident an employee of a school
situated nearby informed the plaintiff that the defendant on earlier occasions
also had entered into contracts of such nature, received advance and later on,
has withdrawn from the same. The said person is also alleged to have informed
the plaintiff that this was the modus operandi of the defendant whenever he was
in need of money. He would enter into such contracts, receive money as
advance, use it for his own needs and then citing some reason or the other resile
from the contract. Realizing that the defendant was deliberately refusing the
execution of the sale deed and because of the delay involved in getting reliefs if
a case is filed, he approached the District Sainik Welfare Officer as he is an Ex-
Service man with a request dated 11/05/2011 to help him out. The plaintiff was
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advised to again try for settling the matter amicably. But the defendant refused
to meet him. On the other hand, the plaintiff was directed to contact one
Narayanan Kutty a Chartered Accountant and a relative of the defendant. The
plaintiff and the brokers approached the said Narayanan Kutty, who was
convinced from the documents shown by the plaintiff that he had sufficient
funds in his possession even on the date of execution of Ext.A1. Therefore, as
advised by Narayanan Kutty, the defendant agreed to register the sale deed on
23/05/2011. However, when the plaintiff went to the house of the defendant on
the said day, his house was found locked. So, on 23/05/2011 the plaintiff gave a
complaint to the District Collector. Thereafter he received Ext. A7 lawyer
notice dated 21/05/2011 from the defendant raising false allegations that he had
committed breach of the contract and so the defendant is repudiating the
contract. According to the plaintiff Ext. A7 lawyer notice has been sent on
23/05/2011 with a prior date.
20. The aforesaid case of the plaintiff is denied by the defendant in
his written statement. According to the defendant the default was committed by
the plaintiff and the transaction did not materialize only because the plaintiff
was never ever ready and willing to perform his part of the contract as he did
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not have the required funds with him either at the time of execution of Ext.A1
or within the extended period of the contract.
21. The plaintiff when examined as PW1 stands by the case
pleaded in the plaint. PW2, one of the brokers involved in the transaction, also
ably supports the case of the plaintiff. Their testimony has not been discredited
in any way. On going through the deposition of PWs1 and 2, it can be seen that
there is practically no cross examination of the crucial points stated in the chief
affidavit of both the witnesses relating to the case pleaded in the plaint.
Therefore, the evidence of PWs.1 and 2 establish the fact that they had in fact
approached the defendant several times for the execution of the sale deed. The
defendant's only contention that the plaintiff did not have the necessary
resources with him for the purpose of taking sale of the property, appears to be
incorrect from the documents that have been produced by the plaintiff. Ext.A5
certificate dated 21/04/2021 issued by State Bank of Travancore, Kozhikode
Main Branch, shows that there was an amount of ₹ 1,05,31,709/- in the bank
account of the plaintiff's daughter. It is true that the amount shown is not in the
account of the plaintiff, but that of his daughter. But that is the case that is
pleaded in the plaint also. Further, Ext. A6 probabilises the case of the plaintiff
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that he had in fact made arrangements to transfer ₹ 10 lakhs to the account of
the defendant's daughter as instructed by the latter. The plaintiff has let in
evidence as per the case pleaded in the plaint. PW2 also supports his case.
Merely because Ext.A1 is silent on the aspect that the property is being
purchased for his daughter, is no ground to reject the relief of specific
performance. Ext.A5 will establish the plaintiff's case that he had necessary
resources with him even at the time of execution of Ext.A1 agreement.
22. The court below found non examination of the plaintiff's
daughter to be another reason for rejecting the case of the plaintiff. The
examination of the plaintiff's daughter was quite unnecessary in this case when
neither PW1 nor PW2 had been discredited in any way. As stated earlier, the
advance amount of ₹15 lakhs is also seen paid from the account of the plaintiff'
daughter which is clear from Ext.A2 certificate. This certificate issued by the
State Bank of Travancore, Kozhikode Main Branch, states that Smt.Vani
Dinesh (plaintiff's daughter) has a fixed deposit of EURO 109501.34/- with the
Bank since 29/12/2010 and that she has availed an amount of ₹15 lakhs as loan
from that deposit in connection with the purchase of some immovable property.
This document is not seen disputed by the defendant. In such circumstances, it
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was quite unnecessary for the plaintiff to examine his daughter also because
evidence has to be weighed and not counted. It is not the number of witnesses
who are examined that matters, but the quality of evidence that matters.
23. Another ground on which the court below rejected the claim of
the plaintiff was because he had under-valued the property in Ext.A4 draft sale
deed. In Ext.A4, the sale consideration is shown as ₹ 6,33,300/- in the place of
₹ 15 lakhs. In the plaint it is alleged that the amount of ₹ 6,33,300/- was shown
in Ext.A4 draft sale deed in accordance with the fair value fixed by the
Government. This valuation was objected to by the defendant who insisted that
an amount of ₹ 25 lakhs must be shown in the sale deed. As the plaintiff
wanted the sale deed to be registered at the earliest, he had agreed to this
demand also made by the defendant. The defendant in his written statement
denies this allegation and contends that he had objected to the under valuation
and informed the plaintiff that the deed should reflect the actual consideration
of the property. It was submitted by the learned counsel for the defendant that
differences of opinion and disputes between the parties arose when the plaintiff
refused to show the actual sale consideration in the sale deed. Referring to the
decisions in Herman D'souza v. Pradeep [2018(1) KHC 384] and Rafeeq
R.F.A.No.626 of 2013
v. Abdul Bari [2018 (2) KHC 276] it was argued that, as the plaintiff had
acted contrary to the terms of the contract and insisted for sale on terms
different from the terms of the contract, is an indication that he was not willing
to perform his part of the contract; that the plaintiff by floating a fresh offer had
given up his original offer and has waived his right to stick on to the original
terms agreed upon and that such conduct of the plaintiff could be put forward
as a successful defence in a suit for specific performance and so the court
below was justified in refusing the discretionary remedy of specific
performance.
24. The defendant has no case in his written statement or in his
evidence that though he had asked the plaintiff to show the actual/correct
consideration of the property in the deed, the plaintiff had refused to accede to
his demand. In the written statement the defendant only says that the plaintiff
has no right to insist so. He has no case that the transaction did not materialize
due to this reason. His only defence is that the plaintiff did not have the
necessary funds with him to take the sale of the property, which is proved
wrong from the documents produced by the plaintiff. Apart from this
contention the defendant does not seem to have any other contention as to why
R.F.A.No.626 of 2013
the plaintiff was not ready and willing to perform his part of the contract. From
the evidence we find that the plaintiff has averred and proved that he was ready
and willing to perform his part of the contract in compliance with Section 16(c)
of the Act.
25. Further, the mere fact that the plaintiff before filing the suit
had approached the District Sainik Welfare Officer and the District Collector in
getting his grievance redressed, is also no ground to find against the plaintiff. It
is true that the said authorities do not have the jurisdiction to adjudicate on the
issues involved. The plaintiff seems to have been ill advised on the matter.
However, that is no ground to reject the relief prayed for. Therefore, we find
that the reasons given by the court below are certainly no grounds for rejecting
the relief of specific performance.
26. The learned counsel for the defendant made fervent pleas that
we should not exercise our discretion in granting the relief of specific
performance to the plaintiff in this case. According to the learned counsel, there
are no compelling reasons or circumstances whatsoever for this Court to do so
after all these years. The price of the property has gone up manifold. If the
relief of specific performance is not granted to the plaintiff, no hardship is
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going to be caused to him. On the other hand, if the same is granted after a
lapse of all these years, it would be highly inequitable for the defendant, goes
the argument.
27. Section 20(2)(a) of the Act (before amendment dated
01/08/2018) reads -
"20. Discretion as to decreeing specific performance -
(1) xxx
(2) The following are cases in which the court may properly exercise
discretion not to decree specific performance: -
(a) where the terms of the contract or the conduct of the parties at the
time of entering into the contract or the other circumstances under
which the contract was entered into are such that the contract, though
not voidable, gives the plaintiff an unfair advantage over the
defendant; or...."
Section 20 of the Act which confers discretion on the court to refuse a decree
for specific performance even in cases where it is lawful for the court to do so,
has now been substituted and the courts have no longer any discretion to refuse
a decree for specific performance. The Apex Court in Sughar Singh v. Hari
Singh, 2021 SCC ONLINE SC 975, held that though the amended
R.F.A.No.626 of 2013
provisions do not have retrospective effect, the same shall be a guide for the
court in the matter of exercising the discretion under Section 20.
28. S.20, as it stood before amendment, makes it clear that the
jurisdiction to decree specific performance is discretionary; but S.20(1) says
that this discretion is not arbitrary but has to be exercised soundly and
reasonably, guided by judicial principles, and capable of correction by a court
of appeal. S.20(2) speaks of cases in which the court may properly exercise
discretion not to decree specific performance. Significantly, under clause (a) of
sub-section (2), what is to be seen is the terms of the contract or the conduct of
the parties at the time of entering into the contract. Even "other circumstances
under which the contract was entered into" refers only to circumstances that
prevailed at the time of entering into the contract. It is only then that this
exception comes in - and this is when the plaintiff gets an unfair advantage over
the defendant. Equally, under clause (b) of sub-section (2), the hardship
involved is again at the time of entering into the contract which is clear from
the expression "which he did not foresee". This is made clear beyond doubt by
Explanation 2 of S.20 which states that the only exception to the hardship
principle contained in clause (b) of sub-section (2) is where hardship results
R.F.A.No.626 of 2013
from an act of the plaintiff subsequent to the contract. The act cannot be an act
of a third party or of the court - the act must only be the act of the plaintiff.
Clause (c) of sub-section (2) again refers to the defendant entering into the
contract under circumstances which makes it inequitable to enforce specific
performance. Here again, the point of time at which this is to be judged is the
time of entering into the contract (Ferrodous Estates (Pvt.) Ltd. v.
P.Gopirathnam (2020 KHC 6584).
29. This is not a case where the defendant did not foresee the
hardship. It is furthermore not a case that nonperformance of the agreement
would not cause any hardship to the plaintiff. Explanation 1 appended to S.20
clearly stipulates that merely inadequacy of consideration, or the mere fact that
the contract is onerous to the defendant or improvident in its nature would not
constitute an unfair advantage within the meaning of sub-section (2) of S.20
[P.D'Souza v. Shondrilo Naidu, [(2004) 6 SCC 649].
30. Given the conduct of the defendant in this case, as contrasted
with the conduct of the plaintiff who was ready and willing throughout to
perform his part of the contract, we think that this is a fit case in which the
R.F.A.No.626 of 2013
discretion can or must be exercised. The defendant cannot take advantage of his
own wrong and then plead that decree for specific performance would be an
unfair advantage to the plaintiff. No case of hardship has been also pleaded in
the written statement.
31. True, it is more than a decade since the filing of the suit in the
year 2011. In the light of S.20, the courts have uniformly held that the mere
escalation of land prices after the date of the filing of the suit cannot be the sole
ground to deny specific performance. (Nirmala Anand v. Advent Corpn. (P)
Ltd., (2002) 8 SCC 146; P.S. Ranakrishna Reddy v. M.K.
Bhagyalakshmi, (2007) 10 SCC 231; P. D'Souza v. Shondrilo Naidu
[(2004) 6 SCC 649] and Jai Narain Parasrampuria v. Pushpa Devi Saraf
[(2006) 7 SCC 756]).
32. The Hon'ble Supreme Court in Madana Gopal A. R. v.
M/s.Ramnath Publications Pvt. Ltd. (2021 KHC 6226) relying on
Ferrodous Estates (Pvt) Ltd. v. P. Gopirathnam, 2020 SCC OnLine SC
825, held that a suit for specific performance cannot be dismissed on the sole
ground of delay or laches. However, an exception to this rule is where an
immovable property is to be sold within a certain period, time being of the
R.F.A.No.626 of 2013
essence, and it is found that owing to some default on the part of the plaintiff,
the sale could not take place within the stipulated time. Once a suit for specific
performance has been filed, any delay as a result of the Court process cannot be
put against the plaintiff as a matter of law in decreeing specific performance.
However, it is within the discretion of the Court, regard being had to the facts
of each case, as to whether some additional amount ought or ought not to be
paid by the plaintiff once a decree of specific performance is passed in its
favour even at the appellate stage.
33. Specific performance being an equitable relief, balance of
equities has also to be struck taking into account all the relevant aspects of the
matter, including the lapses which occurred and parties respectively responsible
therefor. Before decreeing specific performance, it is obligatory for courts to
consider whether by doing so any unfair advantage would result for the plaintiff
over the defendant, the extent of hardship that may be caused to the defendant
and if it would render such enforcement inequitable, besides taking into
consideration the totality of circumstances of each case. It is not necessary that
in all cases where there has been an escalation of prices, the court should either
refuse to pass a decree on specific performance of contract or direct the
R.F.A.No.626 of 2013
plaintiff to pay a higher sum.
34. In K. Narendra v. Riviera Apartments (P) Ltd. [(1999) 5
SCC 77] the Apex court while interpreting S.20 of the Act laid down that,
where performance of the contract involves some hardship on the defendant
which he did not foresee, while non - performance involve no such hardship on
the plaintiff, is one of the circumstances in which the court may properly
exercise discretion not to decree specific performance. The doctrine of
comparative hardship has been thus statutorily recognised in India. However,
mere inadequacy of consideration or the mere fact that the contract is onerous
to the defendant or improvident in its nature, shall not constitute an unfair
advantage to the plaintiff over the defendant or unforeseeable hardship on the
defendant.
35. In the present case, the defendant has neither pleaded any
hardship nor produced any evidence to show that it would be inequitable to
order specific performance of the agreement. Be that as it may, it is by now
settled that a court dealing with a suit for specific performance of an agreement
for sale can impose, having regard to the delay in the judicial process and the
R.F.A.No.626 of 2013
consequential escalation of price of the property, any reasonable condition
including payment of an additional amount by one party to the other while
granting or refusing a decree for specific performance. [See Nirmala Anand v.
Advent Corporation (P) Ltd., (2002) 5 SCC 481 and Zarina Siddiqui v. A.
Ramalingam, (2015) 1 SCC 705]. On a query from the Court, the learned
counsel for the appellant submitted that the price of similar lands in the locality
would now be around ` 10 lakhs to 12 lakhs per cent. Taking into account the
fact that more than a decade has passed since execution of the agreement, we
deem it appropriate to direct the plaintiff to pay a sum of ` 20 lakhs more to
the legal representatives of the defendant towards the price of the plaint
schedule property. We have arrived at the said figure having regard to the
benefit of interest that might have been accrued to the plaintiff on the balance
sale consideration which the plaintiff would have paid to the defendant, if the
sale had taken place. In the event the plaintiff is not willing to pay any
additional amount for purchasing the property from the defendant, we are of the
view that the plaintiff is entitled to by way of compensation on account of the
breach of the contract committed by the defendant, a sum of ` 15 lakhs in
addition to the decree for return of the advance sale consideration ordered by
R.F.A.No.626 of 2013
the court below. It is common knowledge that the price of the property would
have escalated many fold during the last 10 years and the above figure has been
arrived at on the basis that the defendant is bound to share with the plaintiff
atleast a portion of the benefit of escalation accrued in his favour corresponding
to the advance paid by him, reckoning the escalation of the price of the
property at 100%.
In the result, the appeal is allowed and the impugned decree and
judgment are modified as follows:
1. The plaintiff is directed to deposit the balance sale consideration in
terms of the agreement together with a sum of ` 20 lakhs before the
court below within three months from the date of this judgment.
2. The legal representatives of the defendant shall thereupon transfer
to the plaintiff, by way of sale, the plaint schedule property after
receiving the balance sale consideration deposited by the plaintiff as
directed above. On the failure of the legal representatives of the
defendant in doing so, the plaintiff would be free to get the transfer
deed executed through court.
3. In the event the plaintiff is not desirous of purchasing the property
R.F.A.No.626 of 2013
for the aforesaid price, he will be entitled to realise from the defendant
the advance sale consideration with interest as ordered by the court
below together with a sum of ` 15 lakhs with interest at the rate of
6% per annum from the date of the judgment till the date of
realisation.
4. The plaintiff will be entitled to realise the costs of the suit and the
appeal.
All interlocutory applications, if any pending, shall stand disposed of.
Sd/-
P.B.SURESH KUMAR
JUDGE
Sd/-
C.S.SUDHA
JUDGE
ami/
