Kerala High Court
P.N.Ali vs Palancherry Avarankutty Hajee on 13 September, 2024
Author: Sathish Ninan
Bench: Sathish Ninan
2024:KER:69942
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR. JUSTICE JOHNSON JOHN
FRIDAY, THE 13TH DAY OF SEPTEMBER 2024 / 22ND BHADRA, 1946
RFA NO. 171 OF 2013
AGAINST THE JUDGMENT DATED 26.03.2012 IN OS NO.104 OF 2008 OF
II ADDITIONAL SUB COURT, KOZHIKODE
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APPELLANT/PLAINTIFF:
P.N.ALI,
S/O. KUNHAMMU HAJI, RESIDING AT 'IHSAM', ULLASNAGAR
COLONY, KOTTULI AMSOM DESOM, KOZHIKODE TALUK,
REPRESENTED BY POWER OF ATTORNEY HOLDER M. PAKRAN
RESIDING AT A/9, ULLAN NAGAR, COLONY, P.O.,
KUTHIRAVATTOM, KOZHIKODE-16.
BY ADVS.
SRI.T.KRISHNAN UNNI (SR.)
SMT.MEENA.A.
RESPONDENTS/DEFENDANTS:
1 KALATHINGAL PALANCHERRY AVARANKUTTY HAJI'S SON-
PALANCHERRY AVARANKUTTY HAJEE, PALANCHERRY HOUSE,
FEROKE AMSOM, NALLUR DESOM, KOZHIKODE TALUK,
PIN-673001.
2 K.V. SALEEM,
S/O. AVARANKUTTY HAJEE, PALANCHERRY HOUSE,
FEROKE AMSOM, NALLUR DESOM, KOZHIKODE TALUK,
PIN-673001.
3 K.V. RAZHEED,
S/O AVARANKUTTY HAJEE, PALANCHERRY HOUSE, FEROKE AMSOM,
NALLUR DESOM, KOZHIKODE TALUK,PIN-673001.
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RFA NO. 171 OF 2013 -2-
4 K.V. ASSANKUTTY,
S/O.AVARANKUTTY HAJEE, PALANCHERRY HOUSE, FEROKE AMSOM,
NALLUR DESOM, KOZHIKODE TALUK, PIN-673001.
5 K.V. SHAREEF
S/O.AVARANKUTTY HAJEE,PALANCHERRY HOUSE,FEROKE AMSOM,
NALLUR DESOM, KOZHIKODE TALUK, PIN-673001.
6 K.V. SAKEER HUSSAIN
S/O.AVARANKUTTY HAJEE, PALANCHERRY HOUSE, FEROKE AMSOM,
NALLUR DESOM, KOZHIKODE TALUK, PIN-673001.
7 K.V. BICHIPATHU
D/O.AVARANKUTTY HAJEE,PALANCHERRY HOUSE,FEROKE AMSOM,
NALLUR DESOM, KOZHIKODE TALUK, PIN-673001.
*8 K.V. SAJITHA
D/O. AVARANKUTTY HAJEE, PALANCHERRY HOUSE, FEROKE
AMSOM, NALLUR DESOM, KOZHIKODE TALUK, PIN-673001.
*[NAME OF 8TH RESPONDENT IS CORRECTED AS K.V.SABITHA AS
AGAINST K.V.SAJITHA VIDE ORDER DATED 11.08.2015 IN IA
1621/2015]
9 SWADESHI TILE WORKS
A FIRM REPRESENTED BY ITS PARTNER K.V. SALEEM (R2)
PALANCHERRY HOUSE, FEROKE AMSOM, NALLUR DESOM,
KOZHIKODE TALUK, PIN-673001.
0 CHEERIKKALIL HAMSA
S/O. MUHAMMED, RESIDING IN EDATHANATTUKARA AMSOM,
DESOM, MANNARGHAT TALUK, PIN-678582.
BY ADVS.
P.V.ANOOP
VINOD BHAT S
SRI.PHIJO PRADEESH PHILIP
SRI.S.SREEKUMAR SR.
SRI.THOMAS P.KURUVILLA
ANAGHA LAKSHMY RAMAN(K/000767/2015)
GREESHMA CHANDRIKA.R(K/807/2020)
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.09.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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SATHISH NINAN &
JOHNSON JOHN, JJ.
= = = = = = = = = = = = = = = = = =
R. F. A. No.171 of 2013
= = = = = = = = = = = = = = = = = =
Dated this the 13th day of September, 2024
J U D G M E N T
Sathish Ninan, J.
The suit for specific performance of an agreement for
sale was decreed for the alternate relief of return of
advance sale consideration. Seeking the main relief of
specific performance, the plaintiff is in appeal.
2. Ext.A1 agreement dated 05.08.2005, is the agreement
that is sought to be specifically enforced. Defendants 2 to
8 are the children of the first defendant. They are the
vendors. The first defendant in his individual capacity and
also as the power of attorney holder of defendants 2 to 8,
entered into Ext.A1 agreement for sale with the plaintiff.
The property involved is 1.96 acres, described in three
items, with all the improvements therein. Defendants 1 to 8
as the partners constituted 9th defendant firm and were
conducting the business therein. The sale consideration
fixed was, ₹ 57,500/- per cent. On the date of agreement, an
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amount of ₹ 25 lakhs was paid towards advance sale
consideration. The period fixed for performance was six
months. The period was subsequently extended on three
occasions viz. 01.03.2006, 07.09.2006 and 09.08.2007. The
extended period expired on 15.11.2007. According to the
plaintiff, subsequent to the agreement further advances were
made to the defendant making the total advance paid at
₹ 53,14,537/-.
3. According to the plaintiff, subsequent to Ext.A1, it
was understood that the third defendant, to defeat the
rights of the plaintiff, had executed Ext.A3 Sale Deed dated
11.07.2005, in favour of the 10th defendant, purporting to
convey rights over the property. The plaintiff alleges that
the document is sham and collusive between the defendants.
Alleging breach on the part of the defendants to perform the
agreement, the suit was filed.
4. Defendants 1 and 3 remained exparte. The other
defendants denied of having entered into Ext.A1 agreement.
It was contended that the first defendant was never
authorised to enter into an agreement for sale.
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5. The 10th defendant filed a written statement alleging
that Ext.A1 agreement is a sham and collusive, and has been
entered into to defeat his rights.
6. The trial court upheld Ext.A1 agreement. It was also
found that the advance sale consideration as claimed by the
plaintiff was paid. The plaintiff was found to have been
ready and willing to perform his part of the contract and
that the breach occurred on the part of the defendants.
However, the Court, exercising discretion under Section 20
of the Specific Relief Act declined decree for specific
performance and decreed return of advance sale consideration
with interest.
7. The defendants have not filed any appeal or cross
objections challenging the decree. Hence issues regarding
genuiness of Ext.A1 and the advance paid thereunder does not
call for conisderation in this appeal.
8. We have heard Sri.T.Kishnanunni, the learned Senior
Counsel for the appellant and Sri.P.V.Anoop and Sri.Vinod
Bhat for the respective respondents.
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9. The points that arises for determination in this
appeal are :-
(i) Is the finding of the trial court with regard to the readiness and
willingness of the plaintiff supported by the evidence on record ?
(ii) On the face of Ext.A3 Sale Deed executed by the third
defendant to the 10th defendant even prior to Ext.A1 agreement, is the
plaintiff entitled to seek for performance of Ext.A1 agreement ?
(iii) Does the exercise of discretion by the trial court not to grant a
decree for specific performance warrant any interference ?
10. Ext.A1 agreement is dated 05.08.2005. The period
fixed for performance was six months. The period was
extended on various occasions thereafter, and finally up to
15.11.2007. Alleging non-performance on the part of the
defendants, the plaintiff issued Ext.A2 notice dated
05.12.2007, requiring performance. Thereafter the suit was
filed on 14.02.2008.
11. As per Ext.A1 agreement, the defendants were
required to settle the existing liability in respect of the
firm including, claims of workmen. To enable the same the
plaintiff was required to advance amounts to the defendants
on their demand. Apart from the advance amount of ₹ 25 lakhs
paid on the date of the agreement, further advances were
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made thereafter, amounting to a total of ₹ 53,14,537/-. The
trial court has upheld the said contention. The said finding
has become final. No attempt is made before this Court to
urge otherwise.
12. A perusal of the endorsements on the reverse side
of Ext.A1 agreement with regard to extension of time reveal
that such extensions were made as required by the
defendants. It further reveals payments of further amounts
towards advance sale consideration on various occasions at
the request of the defendants. The availability of further
funds with the plaintiff to complete the transaction is
evidenced by Ext.A10 to A12 extracts of Bank accounts.
13. The above materials are sufficient enough to find
the readiness and willingness of the plaintiff. The trial
court has also, on the evidence, found that the plaintiff
was ready and willing to perform his part of the contract.
No material could be placed before us to upturn the said
finding. The finding warrants no interference. Point No.1 is
answered accordingly.
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14. It is revealed that even prior to entering into
Ext.A1 agreement for sale on 05.08.2005, the third defendant
had executed Ext.A3 Sale Deed in favour of the 10 th defendant
purporting to convey his rights along with the rights of the
first defendant. Consequently, as on the date of Ext.A1
agreement, no rights remained with defendants 1 and 3 to be
conveyed in pursuance of Ext.A1. Therefore, there cannot be
specific performance of Ext.A1, it is contended.
15. With regard to the conveyance of the rights of the
first defendant under Ext.A3, it is executed by the third
defendant in his individual capacity and also as the power
of attorney holder of his father the first defendant. The
power of attorney is dated 16.02.2004. It has been marked as
Ext.A14 in the suit. The said power of attorney was in fact
cancelled under Ext.A15 registered cancellation deed dated
22.04.2005. Therefore, as on the date of execution of Ext.A3
dated 11.07.2005, the third defendant did not have authority
to represent the first defendant and to execute any
conveyance on his behalf.
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16. It is the argument of the learned senior counsel
for the appellant that, a reading of Ext.A3 Sale Deed
reveals that the title over the property vested with the
firm consisting of defendants 1 to 8. The firm has been
arrayed as the 9th defendant. In the plaint it has been
averred thus :-
"... That firm is being impleaded as the nineth defendant herein
with intend to obtain a binding decree as against that firm, as
well. Defendants 1 to 8 alone are the partners of the 9 th
defendant."
Though every partner of a firm has an interest in the
property of the firm, such interest cannot be assigned.
Therefore, no rights could vest with the 10 th defendant under
Ext.A3 sale deed, it is contended.
17. There could not be any dispute on the legal
proposition as argued by the learned Senior Counsel with
regard to the right of a partner over the asset of the firm.
During the subsistence of a partnership no partner can
assign his interest over the partnership assets or property
of the partnership.[See:Addanki Narayanappa v. Bhaskara Krishnappa
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(AIR 1966 SC 1300)]. Though Section 29 of the partnership Act
enables a partner to transfer his interest in the
partnership to a third party, the assignee gets only the
right to receive the share of the assets of the firm which
is due to his transferor partner. He cannot claim the status
of a partner or any right as a partner. In the event of
dissolution, he would be entitled to the share of assets due
to his transferor.
18. Therefore, viewed in that manner, if the property
belonged to the firm, it might be possible to contend that,
even in spite of Ext.A3 Sale Deed the rights of the third
defendant as a partner along with the other partners to
convey the partnership property in favour of the plaintiff
under Ext.A3 is not affected. However, there is no such
pleading or evidence with regard to the above. Of course,
the recitals in Ext.A3 Sale Deed seem to suggest that the
contention of the learned counsel for the appellant with
regard to the title of the firm has some relevance/
significance.
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19. The trial court has declined to grant a decree for
specific performance solely for the reason of the existence
of Ext.A3 Sale Deed. The Court noticed that, in the light of
Ext.A3, there is a defect in the title in the sense, a third
party right has already crept in, or at least there is a
cloud on the title. It is in the light of the above that the
trial court exercised its discretion not to grant a decree
for specific performance. Such finding is without
adjudicating on the effect of Ext.A3.
20. As regards Ext.A3 sale deed the plea raised is that
it is a sham document. There is no specific plea with regard
to its title being vested with the partnership firm, the
assignment of a share by a partner and its consequences. But
as noticed earlier, the exercise of discretion by the trial
court was solely on the basis of Ext.A3 even so without
finding on the legal effect of Ext.A3. Therefore, the
exercise of discretion by the trial court is liable to be
interfered with and we do so. Point nos.(ii) and (iii) are
answered as above.
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21. We are of the opinion that an issue is to be raised
with regard to Ext.A3 and its legal consequence, and the
question of exercise of discretion is liable to be
reconsidered. We are not to be understood as having
suggested that Ext.A3 is of no consequence or that a decree
for specific performance is liable to be granted. To enable
the same the matter needs to be remitted to the trial court.
The parties could be permitted to amend their pleadings or
file additional pleadings and adduce further evidence but,
confined to Ext.A3 and its effect. The finding of readiness
and willingness arrived at by the trial court has already
been confirmed by us above and is not liable to be reopened.
22. The learned senior counsel vehemently argued that,
whatever rights the 3rd defendant has may be conveyed under
the decree and that the plaintiff is prepared to take the
risk and have the rights adjudicated in appropriate
proceedings. However we do not think that it is proper for
this Court to adopt such a course. Ext.A3 was executed even
prior to Ext.A1 agreement. The assignee is also on the party
array. If there is a pre-existing right created in favour of
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a stranger to the agreement, the Court cannot ignore the
same and direct conveyance of whatever rights that may
remain with the vendor. Ext.A3 cannot be overlooked and
conveyance of what ever rights that may remain with the
third defendant ordered.
Resultantly, the appeal is allowed. While affirming the
finding of readiness and willingness of the plaintiff to
perform Ext.A1 agreement, the decree and judgment will stand
set aside for disposal afresh in the light of the
observations in this judgment.
Parties to appear before the trial court on 16.10.2024.
Sd/-
SATHISH NINAN
JUDGE
Sd/-
JOHNSON JOHN
JUDGE
kns/-
//True Copy//
P.S. To Judge
