Kerala High Court
Mani vs Anu on 27 October, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
FRIDAY, THE 27TH DAY OF OCTOBER 2023 / 5TH KARTHIKA, 1945
RFA NO. 279 OF 2009
AGAINST THE JUDGMENT AND DECREE IN OS 432/2005 OF ADDITIONAL
SUB COURT,NORTH PARAVUR
APPELLANT/S:
1 MANI,S/O.DAMODARAN, THOTTAPPILLY VEEDU, MUNAMBAM
KARA, KUZHIPILLY VILLAGE, KOCHI TALUK.
2 USHA, W/O.MANI THOTTAPILLY VEEDU,
MUNAMBAM KARA, KUZHIPILLY VILLAGE, KOCHI TALUK.
BY ADVS.
SRI.M.P.RAMNATH
SRI.P.RAJESHKOTTAKKAL
RESPONDENT:
ANU,S/O.BABU, THOTTAPPILLY VEEDU, MUNAMBAM KARA,
KUZHIPILLY VILLAGE, KOCHI TALUK.
BY ADVS.
AJITH VISWANATHAN
SRI.P.N.RAMAKRISHNAN NAIR
SRI.P.VISWANATHAN
THIS REGULAR FIRST APPEAL HAVING COME UP FOR ADMISSION ON
27.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Sathish Ninan, J.
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R.F.A No.279 of 2009
==========================
Dated this the 27th day of October, 2023
JUDGMENT
The decree for specific performance of an agreement
for sale is under challenge by the defendants.
2. Ext A1 is the agreement dated 10.01.2005,
executed by the defendants in favour of the plaintiff.
As per Ext A1, an extent of 22.750 cents of property
belonging to the defendants is agreed to be conveyed to
the plaintiff for a total sale consideration of Rs.2.65
lakhs. The period fixed for performance is twelve
months. An amount of Rs.25,000/- is stated to be paid as
advance sale consideration on the date of the agreement.
It is claimed that a further amount of Rs.1,40,000/- was
paid towards further advance on 21.05.2005. Alleging
attempt on the part of the defendants to wriggle out of
the agreement, the suit is filed.
3. The defendants contended that the plaintiff is
none other than the first defendant's nephew (brother's
son), and that the transaction is purely a monetary one.
The receipt of Rs.25,000/- on the date of Ext A1
agreement was admitted. According to the defendants, a
further amount of Rs.1,15,000/- was received on
21.05.2005. The endorsement on Ext A1 agreement that an
amount of Rs.1,40,000/- was paid on 21.05.2005, is not
correct. The defendants were in need of money and the
amounts were paid by the plaintiff's father. Ext A1
agreement was executed as security for the loan. The
defendants had mortgaged the property with the
Pallipuram Service Co-operative Bank to secure a loan.
When the defendants cleared the liability with the bank,
the plaintiff's father exerted pressure on the
defendants through police and otherwise, requiring
conveyance of the property. Thereupon the defendants
sent a registered notice dated 27.10.2005 explaining the
circumstances under which the agreement was executed and
also that no sale transaction was intended. Without
issuing any reply to the notice, the suit has been
filed. The defendants prayed for dismissal of the suit.
4. The trial court held Ext A1 agreement to be
proved and accordingly granted a decree in favour of the
plaintiff for enforcement of Ext A1 agreement.
5. Heard the learned counsel on either side.
6. The following points arise for consideration:
(i) What is the total amount received by the
defendants under Ext A1 agreement?
(ii) Is the exercise of discretion by the trial
court to grant a decree for specific
performance, justified on the materials?
7. Admittedly, the parties are close relatives.
The plaintiff is the first defendant's niece (brother's
son). The execution of Ext A1 agreement is not in
dispute. The contention of the defendants is that,
Ext A1 represents only a money transaction. The
defendants were in financial constraints. The agreement
was executed only to secure the financial assistance
availed by the defendants from the plaintiff's father.
8. The receipt of Rs.25,000/- on 10.01.2005 is
admitted by the defendants. Their contention is that, on
21.05.2005 only an amount of Rs.1,15,000/- was paid to
them. On the reverse side of Ext A1, though it is
recited that an amount of Rs.1,40,000/- was paid on that
date, in fact, the understanding was that, a total
amount of Rs.1,40,000/- plus Rs.25,000/- totalling to
Rs.1,65,000/- is to be repaid. The excess amount
represents the interest, it is contended.
9. Going by the narrations in Ext A1 agreement, an
amount of Rs.25,000/- plus Rs.1,40,000/- were received
by the defendants. The contention of the defendants
that, the figures mentioned in Ext.A1 represented the
amount to be repaid, is not supported by any evidence.
The execution of Ext A1 agreement and the endorsement on
the reverse of Ext A1 being not in dispute, it could
only be held that the defendants had received a total
amount of Rs.1,65,000/- (Rs.25,000/- + Rs.1,40,000/-).
Point No.(i) is answered accordingly.
10. The first defendant is a worker in a fishing
boat. The defendants were in financial difficulties. The
property in question was mortgaged with the Pallipuram
Service Co-operative Bank under Ext B1 mortgage deed.
The endorsement on Ext B1 indicates that the liability
with the Bank was cleared by the defendants on
21.05.2005, that is, on the date of receipt of the
further advance of Rs.1,40,000/-. Therefore, the
contention of the defendants that amounts were borrowed
for the purpose of discharging the liabilities, appears
to be probable.
11. The endorsement on the reverse side of Ext A1
with regard to payment of Rs.1,40,000/- is not signed by
the plaintiff. It is seen that, under the endorsement,
instead of describing the plaintiff's name, the name
mentioned is that of his mother. That indicates the
involvement of the plaintiff's family with the
transaction. The plaintiff's father is working abroad.
The plaintiff was only aged 21 years as on the date of
suit. There is no evidence regarding the financial
capacity of the plaintiff. There is no case that the
defendants have any other property of their own. It is
not in dispute that a basement for a building has been
constructed in the property.
12. Though to prove that Ext A1 agreement was
executed intending it to be an agreement for sale, one
of the witnesses to Ext A1, was examined as PW2, his
evidence does not appear to be reliable. In his cross-
examination he has deposed "IcmÀ FgpXm³ Rm³
t]mbncpónñ". Though in his chief examination he has
deposed that he was the broker for the transaction, the
same is denied in his cross-examination. He has deposed
in his cross-examination that he was not aware that the
property was subjected to any liability. However, the
fact remains that Ext A1 itself narrates that the
property is under a mortgage. The evidence of PW2 does
not inspire confidence.
13. From the entirety of circumstances as noticed
above, the contention that the transaction between the
parties was only a loan transaction, cannot be ruled
out. At any rate, it cannot be conclusively held that
the transaction was in fact intended as an agreement for
sale. In the said circumstance, the discretion should
have been exercised to decline the relief of specific
performance. The trial court has not taken into
consideration the facts referred to above while
exercising the discretion. The relief of specific
performance is to be declined.
14. With regard to the prayer for return of the
advance amount, it is beyond challenge that the
defendants are bound to repay the amount with interest.
The plaintiff has claimed interest at the rate of 12 %
per annum. Taking into consideration the banking rate
of interest during the relevant period and now, interest
at the rate of 12% p.a could be granted from 21.05.2005
till the date of decree, and thereafter at the rate of
6%.
15. The plaintiff has a further claim for damages
of Rs.50,000/-. The said claim is under the head of,
rise in price for the property and the profit he could
have made if the property was re-sold by him. There is
no evidence to prove the damages as claimed by him.
Further the claim can only be considered to be a remote
damage. At any rate, the plaintiff has been adequately
compensated by grant of interest for the amount paid.
Hence, the claim for damages is declined.
Resultantly, the appeal is allowed. The judgment
and decree of the trial court are set aside. The
plaintiff is granted a decree for realisation of
Rs.1,65,000/- with interest at the rate of 12% per annum
from 21.05.2005 till the date of decree (27.10.2023),
and thereafter at the rate of 6% per annum till
realisation in full, as a first charge on the plaint
schedule property, and also from the defendants and
their assets.
Sd/-
Sathish Ninan, Judge
vdv
