Sreerajan vs Muhammadali
2024 Latest Caselaw 6331 Ker

Kerala High Court

Sreerajan vs Muhammadali on 6 March, 2024

Author: Sathish Ninan

Bench: Sathish Ninan

            IN THE HIGH COURT OF KERALA AT ERNAKULAM
                               PRESENT
            THE HONOURABLE MR. JUSTICE SATHISH NINAN
   WEDNESDAY, THE 6TH DAY OF MARCH 2024 / 16TH PHALGUNA, 1945
                         RFA NO. 772 OF 2008
AGAINST THE DECREE AND JUDGMENT DATED 30.06.2008 IN OS NO.334 OF
           2007 OF ADDITIONAL SUB COURT, IRINJALAKUDA
                                -----
APPELLANTS/DEFENDANTS:

    1     SREERAJAN,
          S/O THOTTARATH SANKARAN, PERUMBADAPPU DESOM,
          CHENTHRAPPINI VILLAGE, KODUNGALLUR TALUK.

    2     RADHA SREERAJAN, W/O.SREERAJAN
          RESIDING IN DO. DO.

          BY ADVS.
          SRI.S.V.BALAKRISHNA IYER (SR)
          SRI.K.JAYAKUMAR
          SRI.P.B.KRISHNAN



RESPONDENT/PLAINTIFF:

          MUHAMMADALI,
          S/O PUTHIYAVEETTIL KAITHAYIL KUNJIBAPPU HAJI,
          PUNNAYURKULAM VILLAGE, DESOM, CHAVAKKAD TALUK.

          BY ADVS.
          SRI.T.KRISHNANUNNI (SR.)
          SRI.C.M.MOHAMMED IQUABAL




     THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
06.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
                       SATHISH NINAN, J.
             = = = = = = = = = = = = = = = = = =
                    R.F.A. No.772 of 2008
             = = = = = = = = = = = = = = = = = =
            Dated this the 6th day of March, 2024

                         J U D G M E N T

The decree for specific performance is under

challenge by the defendants.

2. On 02.01.2007, Ext.A1 agreement for sale was

entered into between the plaintiff and the first

defendant. The 2nd defendant is the wife of the 1 st

defendant and his power of attorney holder. As per

Ext.A1 the defendant had agreed to sell the plaint

schedule property having an extent of 69 cents to the

plaintiff for a sale consideration of ₹ 49,500/- per

cent. On the date of agreement an amount of ₹ 5 lakhs

was paid towards advance sale consideration. The period

fixed for performance was six months. On 09.02.2007, the

defendant issued Ext.A3 notice rescinding Ext.A1

agreement. Coming to know that the defendant is

proposing to alienate the property to strangers, the

plaintiff filed OS 196/2007 for prohibitory injunction

against the defendant from alienating the property.

Pending the said suit, the present suit was filed

seeking specific performance of Ext.A1 agreement.

3. The defendant contended that the suit is barred

under Order II Rule 2(3) of the Code of Civil

Procedure("CPC" for short). It was also contended that

Ext.A1 agreement was rescinded by the defendant since in

violation of the terms of the agreement the plaintiff

had attempted to trespass into the property and caused

damages therein. It was also contended that the

plaintiff was not ready and willing to go ahead with the

transaction and that he was not having sufficient funds.

4. The trial court negatived the defendant's

contentions and granted a decree for specific

performance.

5. I have heard Sri.S.V.Balakrishna Iyer, the

learned senior counsel for the appellants-defendants and

Sri.T.Krishnanunni, the learned senior counsel for the

respondent-plaintiff.

6. The points that arise for determination are :-

(i) Is the finding of the trial court that the suit is not barred under Order II Rule 2(3) of the Code of Civil Procedure correct in law?

(ii) Was the defendant responsible for breach of the contract or was the rescission of the contract by him justified?

(iii) Is the finding of the trial court with regard to the readiness and willingness of the plaintiff, sustainable on the evidence?

(iv) Does the decree and judgment of the trial court warrant any interference?

7. Ext.A1 agreement for sale dated 02.01.2007 is

not in dispute. As per Ext.A3 notice dated 09.02.2007

the defendant rescinded the contract. Thereupon, on

01.03.2007 the plaintiff filed OS 196/2007 for

prohibitory injunction to restrain the defendant from

alienating the property to strangers. Pending the same

the present suit was filed seeking specific performance

of the agreement. Whether the present suit is barred by

Order II Rule 2(3) CPC, is the question. Order II Rule

2(3) reads thus:-

"(3) Omission to sue for one of several reliefs.- A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.

Explanation.- For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action."

As per the provision, if more than one relief flow out

of the same cause of action, the suit has to be filed

for all such reliefs unless he obtains leave of the

court. In the absence of such leave, a separate suit for

the other reliefs will not lie.

8. OS No.196/2007 was filed by the plaintiff for a

prohibitory injunction against alienating the plaint

schedule property to strangers and the present suit is

one for specific performance of Ext.A1 agreement.

Relying on the judgment of the Apex Court in Ms/ Virgo

Industries (Eng.) P. Ltd. v. M/s Venturetech Solutions P. Ltd. 2013 (1) SCC

625, the learned Senior Counsel for the appellant would

argue that, on the rescission of Ext.A1 agreement under

Ext.A3 notice there arose the cause of action to sue for

specific performance. Without having recourse to that,

the plaintiff filed a suit for prohibitory injunction

against alienation. The cause of action for the said

suit is the same as that of the suit for specific

performance. Having failed to seek for leave of the

court in terms of Order II Rule 2(3) CPC, the present

suit is barred, it is argued.

9. The learned Senior Counsel for the respondent

would on the other hand rely on the judgments of the

Apex Court in Rathnavathi & Another v. Kavita Ganashamdas 2015

(5) SCC 223 and Sucha Singh Sodhi (D) Thr. Lrs. v. Baldev Raj Walia

AIR 2018 SC 2241 to contend that the cause of action in a

suit for prohibitory injunction is different from the

cause of action in a suit for specific performance and

hence the bar under Order II Rule 2(3) is not attracted.

10. Ext.B2 is the plaint in OS 196/2007 viz. the

prohibitory injunction suit. The substratum of the suit

is Ext.A1 agreement for sale. At paragraph 6 of the

plaint he refers to Ext.A3 notice issued by the

defendant rescinding the agreement. At paragraph 7 it is

alleged that the intention of the defendant is to

wriggle out of the agreement and to sell the property

for higher price. It is also contended that the

defendant cannot unilaterally withdraw from the

agreement, and that the notice of rescission is illegal.

At paragraph 8 of the plaint it is averred that the

attempt of the defendant is to sell the property to

strangers. Therefore, it admits of no doubt that the

cause of action relied on by the plaintiff in Ext.B2

plaint is the breach/rescission of Ext.A1 agreement by

the defendant. Therefore, it is essentially the breach

of the agreement which is the cause of action for the

suit. On rescission/breach of Ext.A1 agreement, right to

sue for specific performance accrues on the plaintiff.

In the suit for injunction also the cause of action is

the attempt to alienate to strangers on breach of the

agreement. Therefore, the suit for prohibitory

injunction, and for specific performance, are founded on

the very same cause of action viz. the breach of Ext.A1

agreement. The judgment of the Apex Court in Virgo

Industries case (supra) applies on all fours to the

present case. Therein the Apex Court in an identical

situation held that, the very conduct of the defendant

in not honouring the agreement for sale provides cause

of action for a relief of specific performance and also

for the relief for permanent injunction against

alienation. The Apex Court observed thus:-

"14. The averments made by the plaintiff in C.S. Nos.831 and 833 of 2005, particularly the pleadings extracted above, leave no room for doubt that on the dates when C.S. Nos.831 and 833

of 2005 were instituted, namely, 28.08.2005 and 09.09.2005, the plaintiff itself had claimed that facts and events have occurred which entitled it to contend that the defendant had no intention to honour the agreements dated 27.07.2005. In the aforesaid situation it was open for the plaintiff to incorporate the relief of specific performance along with the relief of permanent injunction that formed the subject matter of above two suits. The foundation for the relief of permanent injunction claimed in the two suits furnished a complete cause of action to the plaintiff in C.S. Nos.831 and 833 to also sue for the relief of specific performance. Yet, the said relief was omitted and no leave in this regard was obtained or granted by the Court."

In Rathnavathi's case (supra) and Sucha Singh Sodhi's case (supra)

relied on by the learned counsel for the respondent, the

Apex Court was considering the bar of suit under Order

II Rule 2(3) of the CPC for a suit for specific

performance in the light of an earlier suit for

prohibitory injunction against trespass. In both these

cases, under respective agreements for sale the

plaintiff was put in possession of the property. When

there was a threat of forceful eviction, the suit for

prohibitory injunction was filed. It was followed by a

suit for specific performance. It is in the said context

that the Apex Court held that the causes of action for

the suits are different.

11. A Division Bench of this Court in Sasidharan Nair

v. Kunju Mohammed Unni 2017 (3) KLT 751 had occasion to

consider the judgments in Virgo Industries case and

Rathnavathi's case (supra).and took note of the distinction

between the cause of action in a suit for injunction

against trespass, and against alienation. It would be

apposite to refer to paragraph 6 of the judgment, which

reads thus:-

"6. The decision in Virgo Industries' case (supra) was later distinguished in Ratnavathi v. Kavita Ganashamdas (2015 (1) KLT Suppl. 105 (SC) = (2015) 5 SCC 223) and Inbasagaran & Anr. v. S. Natarajan (2015 (1) KLT Suppl. 106 (SC) = (2015) 11 SCC 12). It was held therein that the bar under Order II Rule 2 of the CPC will not operate to a suit for specific performance if the earlier suit was one for a decree of injunction against dispossession only. The following observation in Inbasagaran's

case (supra) is apposite :

"29. In the instant case, as discussed above, suit for injunction was filed since there was threat given from the side of the defendant to dispossess him from the suit property. " (The plaintiff did not allege that the defendant is threatening to alienate or transfer the property to a third party in order to frustrate the agreement. (emphasis supplied)

But the plaintiffs in O.S. No.336/2005 had specifically alleged that the defendant was negotiating for the sale of the property in favour of third parties in order to frustrate Ext.A1 agreement for sale. We have no doubt in our mind that the 'cause of action' in O.S. Nos.336/2005 and 201/2007 overlap which is a bundle of facts required to be pleaded andproved for obtaining relief."

As noticed supra, OS 196/2007 was filed for prohibitory

injunction against alienation on the allegation of

rescission/breach of Ext.A1 agreement and attempt to

alienate the property to strangers. The very same cause

of action gave the plaintiff the right to seek for the

relief of specific performance. Both the reliefs are on

the same cause of action.

12. It is not in dispute that, while instituting OS

196/2007 the plaintiff had not sought leave in terms of

Order II Rule 2(3) CPC to file a separate suit for

specific performance. Hence the present suit is barred

under Order II Rule 2(3)CPC.

13. Though on the finding that the present suit is

barred, it may not be necessary to advert to the other

points, it is deemed appropriate to consider the same.

Ext.A1 agreement stipulate for handing over of

possession at the time of execution of the sale deed.

The relevant recital in Ext.A1 reads thus:-

"tað-]-d-ª A-hp-[n-¡I-¯v Xo-cvhn-e kw-Jy cïmw]mÀ-«n Hómw]mÀ-«n-¡v sIm-Sp-¯v Xo-cm-[m-c-sa-gp-Xn H-¸n-«v c-Pn-kv-{Sm-¡n hm-t§-ï-Xpw, Xð-ka-bw h-II-sf c-ïmw-]mÀ-«n-¡v b-YmÀ° ssIh-iw sIm-Sp-t¡-ï-Xp-am- Ip-óp."

The defendant alleges that, after execution of Ext.A1

there was an attempt to trespass by the plaintiff and

had caused damages in the property. A police complaint

was filed in the said regard. The nearby residents who

are witnesses to the incident were examined as DWs.2 and

3. Exts.B6 and B8 are the statements given by the

witnesses before the police. Ext.B7 is the scene

mahazar. That there had been an instance of trespass and

damage is proved by the said evidence. PW1 in his cross-

examination admitted that C.C.282/07 is pending against

him with respect to the incident. Though the evidence as

above by itself would not be conclusive that the act of

trespass was committed by the plaintiff, the fact

remains that it is on such information that the

defendant proceeded to rescind Ext.A1.

14. Coming to the question of readiness and

willingness of the plaintiff, though Ext.A3 notice

rescinding Ext.A1 agreement was issued on 09.02.2007,

the suit has been filed only on 30.06.2007. Rescission

of the agreement provided cause of action to the

plaintiff to sue for specific performance. However, he

did not chose to sue for the said relief. Ext.A2 is the

copy of the Bank account statements of the plaintiff. It

relates to the period from 01.04.2007 to 26.07.2007.

Statements during the period of execution of ExtA1 is not

produced. Ext.A2 indicates that, during the period from

01.04.2007 to 30.06.2007, the maximum balance in his

accounts was ₹ 8,65,000/- only and that during the period

01.04.2007 to 25.07.2007 the maximum amount available in

his accounts was ₹ 8,66,164/-. It was only on 26.07.2007

that there was a balance of ₹ 35,55,418/- in his

account. The balance sale consideration payable would be

₹ 30,00,000/- approximately. It indicates that from the

date of agreement i.e. 02.01.2007 till 25.07.2007 there

was no sufficient balance in his account.

15. The agreement was rescinded as per notice dated

09.02.2007. The suit was filed only on 30.06.2007.

During all these periods, going by Ext.A2 there was no

sufficient funds to proceed with Ext.A1 agreement. Of

course, it is not necessary for the plaintiff to jingle

money in his pocket. While the plaintiff was examined as

PW1, a specific challenge was made with regard to his

financial capacity. Then PW1 was relying on Ext.A2 bank

account statement to prove the source. However, as

noticed, Ext.A2 indicates that, within the period

stipulated under Ext.A1 agreement, sufficient funds were

not available with the plaintiff. This coupled with the

fact that in spite of rescinding Ext.A1 agreement under

Ext.A3 notice, the plaintiff did not chose to sue for

specific performance of the agreement but ventured with

a suit for injunction against alienation to strangers,

tells upon the readiness of the plaintiff to go ahead

with the agreement.

16. Ext.A1 agreement having been rescinded by the

defendant, he is in equity, bound to restore the advance

sale consideration received by him. The defendant having

rescinded the contract, it was suggested to return the

sale consideration received with interest. The learned

Senior Counsel appearing for the appellant-defendant

would submit that in all fairness the defendants are

willing for such a course.

Resultantly, the appeal is allowed. The decree and

judgment of the trial court are set aside. The plaintiff

is granted a decree for realisation of ₹ 5 lakhs with

interest at the rate of 12% per annum from the date of

agreement (02.01.2007) till date of suit (30.06.2007),

and thereafter at the rate of 9% per annum till

realisation from the first defendant and charged on the

plaint schedule property. There will be no order as to

costs.

Sd/-

SATHISH NINAN JUDGE

kns/-

//True Copy// P.S. to Judge