Madras High Court
G.Kalanayagi vs C.K.Krishna Mohan on 30 June, 2025
Author: Sathi Kumar Sukumara Kurup
Bench: Sathi Kumar Sukumara Kurup
A.S.No.324 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 30.06.2025
CORAM:
THE HON'BLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP
Appeal Suit. No.324 of 2013
and
M.P.No.1 of 2013
G.Kalanayagi ... Appellant
-Vs-
1. C.K.Krishna Mohan
2. The Chief Manager,
Oriental Bank of Commerce ... Respondents
Prayer:- Appeal Suit filed under Section 96 of Civil Procedure Code to set
aside the Judgment and Decree passed in O.S.No.94 of 2008 dated 18.10.2012
on the file of the learned IV Additional District and Sessions Judge,
Coimbatore.
For Appellant : Mr.M.Guruprasad
For Respondents : Mr.R.Thiyagarajan
for Mr.V.J.Arul Raj for R1
No Appearance for R2
JUDGMENT
This Appeal has been filed to set aside the Judgment and Decree passed
in O.S.No.94 of 2008, dated 18.10.2012 on the file of the learned IV
Additional District and Sessions Judge, Coimbatore.
2. The brief averments made in the plaint are as follows.
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The suit properties belongs to the first Defendant through a sale deed
dated 15.10.1993. The first Defendant entered into a sale agreement with the
Plaintiff on 13.02.2006. The total sale price was fixed at 22 lakhs. On the same
day, 8 lakhs was paid as advance and possession was also given to the Plaintiff.
Time for performance is fixed as one year. However, in spite of repeated
demands, the defendants did not come forward to execute the sale deed. Later,
the first Defendant asked the Plaintiff for extension of time till 31.12.2007, and
the same was agreed by the Plaintiff. Later, when the Plaintiff demanded the
execution of the deed through notice, the Defendant did not come forward to
execute the deed. The notice returned as unserved. Again on 16.01.2008, the
Plaintiff issued a notice. It was again returned as unserved. The Plaintiff had
sufficient capacity to pay the balance amount. He has also been paying the Kist
for the suit property.
3. In the written statement, the first Defendant stated that, he has
borrowed some loan from the 2nd Defendant but he did not mention the total
loan amount, name of the Company etc. On verification. it was found that an
original application was filed before the Debt Recovery Tribunal at Chennai.
So the Bank is added as a party to the suit. The 2nd Defendant has also been
taking steps to enforce the mortgage. Though the Plaintiff is ready to get the
sale deed executed, it is subject to the mortgage of the 2nd Defendant. So, suit
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is filed seeking relief for specific performance and cost; and in the alternative,
relief for the refund of the advance amount along with 12% interest from the
date of agreement till realization is sought for, by creating a charge over the
suit properties.
4. The 2nd Defendant remains ex-parte.
5. The written statement filed by the first Defendant contains the
following averments:-
5.1. The sale agreement mentioned in the Plaint is denied. It was
executed as a security for a loan obtained by the first Defendant from the
husband of the Plaintiff.
5.2. The husband of the Plaintiff was indebted to the first Defendant
through one K.T. Ragupathy of V.Kaliapuram, Pollachi, Taluk. He was in
urgent need of Rs.8 lakhs for his business activities. At that time, it was
brought to the notice of the Defendant that the husband of the Plaintiff and his
maternal uncle were doing money lending business. So, the Defendant was
introduced to the husband of the Plaintiff by K.T.Ragupathy. At that time, the
Defendant obtained a loan from a financial institution, and due to the default
committed by the Partnership firm, it instituted proceedings, to recover the
loan. For the purpose of getting the loan, the Defendant mortgaged the suit
properties by deposit of title deeds. These facts were also told to the husband of
the Plaintiff. So, he was fully aware of the affairs at that time. In spite of that,
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the husband of the Plaintiff agreed to give the loan amount on the basis of pro
note or any other mode. He also demanded that agreement of sale must be
executed as a security in the name of the Plaintiff. For the repayment of the
loan and towards the interest of the loan amount, property was also handed
over, since income from the coconut trees can be adjusted towards the interest.
The yearly interest was calculated at Rs.1.5 lakhs. So only on the said terms
and conditions, the suit agreement was executed and possession was also
handed over. The husband of the Plaintiff died in the year of 2005. The
Defendant could not settle the amount within 2 years period. So, he asked more
time for the settlement of amount. The Plaintiff agreed, but he again demanded
that, the Defendant must execute a similar sale agreement as that of one
executed in 20.2.2004. So on the said terms only, the suit sale agreement was
executed. So, there was no intention on the part of the Defendant to sell the
property to the Plaintiff. If really the intention was to sell the property then a
period of 3 years time would not have been mentioned in the document. The
inaction on the part of the Plaintiff to take action immediately after the expiry
of the time shows that it was not really a sale agreement. After the expiry of
one year, the Defendant approached the Plaintiff to discharge the loan amount
and deliver the properties. But, the Plaintiff was evasive. Knowing fully well
that the Defendant had shifted his residence to Kotagiri, he issued a legal notice
to Chennai Address. Whenever he visited Kotagiri, he had telephonic
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conversation with the Plaintiff.
5.3. Since the Plaintiff was postponing the delivery of Possession and
discharge of the loan, the Defendant issued a notice on 16.10.2008, terminating
the sale agreement. After sending the reply notice, a rejoinder was issued on
29.10.2008.
5.4. The Plaintiff was not ready to get the sale deed executed, even if
admitted that, the sale agreement is true one. So, prays to dismiss the suit with
cost.
6. On the basis of the above pleadings, the trial Court framed the
following issues:
1. Whether the suit agreement dt.13.02.2006 is true, valid and
enforceable in law?
2. Whether the Plaintiff is entitled to relief of specific
performance of above agreement as prayed by her?
3. Whether the Plaintiff in the alternative is entitled for
recovery of a sum of Rs.8 lakhs with future interest at 12% per
annum being the refund of advance amount as prayed by her?
4. Whether the Plaintiff is entitled to charge over the suit
property for the above amount as prayed by her?
5. To what other relief the Plaintiff is entitled?
7. On the side of the Plaintiff, the Plaintiff was examined herself as
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P.W-1 and two other witnesses were examined as P.W-2 and P.W-3 and
marked documents under Ex.A-1 to Ex.A-11. On the side of the Defendants,
two witnesses were examined as D.W-1 and D.W-2 and marked documents
under Ex.B-1 to Ex.B-8.
8. On the perusal of the evidence and on hearing both sides, the
learned IV Additional District Judge, Coimbatore, had partly decreed the Suit.
Aggrieved, the Plaintiff had preferred this Appeal before this Court.
9. The learned Counsel for the Appellant submitted that the learned
trial Judge had explicitly admitted the case of the Appellant as true and genuine
and further, observed the conduct and behaviour of the first Respondent as
highly suspicious. Despite of such favourable and constructive observations by
the learned trial Judge, the Suit has been partially decreed wherein the relief of
specific performance had been dismissed. The learned trial Judge had falsely
admitted the Ex.B-6 which is the copy of the application in O.A.No.196 of
2003 filed before the Debt Recovery Tribunal, Chennai by the second
Respondent against the first Respondent as he had not repaid the loan amount.
This Exhibit was only filed when the Suit was posted for arguments, that is, at
the last stage of Suit, even then the same had been erroneously admitted.
Ex.B-6 had not been properly verified and only on the bare submission of the
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first Respondent, the recovery proceedings has been initiated and the Suit
property is one among the other property listed in the schedule, the relief of
execution of sale deed had been dismissed.
10. The learned Counsel for the Appellant further submitted that the
first Respondent had not even attempted to prove Ex.B-6 and the second
Respondent who had been impleaded after marking of Ex.B-6 had also turned
ex-parte. Thus, the learned trial Judge had simply based on the vague and bare
averments of the first Respondent came to a conclusion that the Suit property is
in the recovery proceedings. The sale price of the Suit property has been
properly determined at the time of execution of sale agreement between the
Appellant and the first Respondent. The lame and new stand taken by the first
Respondent that the sale price is lower is absolutely inappreciable and
suspicious. The learned trial Judge although acknowledged the readiness and
willingness of the Appellant to remit the balance sale consideration to the first
Respondent, had erroneously denied to grant the relief of execution of sale
deed.
11. The learned Counsel for the Appellant submitted that the Court
below has misconstrued the provision under Section 13 (1) (c) of the Specific
Relief Act, 1963 and declined the relief to the Plaintiff. The first Defendant in
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order to prejudice the Court had marked Ex.B-6 showing there is Debt
Recovery Tribunal proceedings. However, there are no materials to show that
the Suit property was mortgaged and the outstanding liabilities. The first
Defendant cannot taken advantage of Section 13 (1) (c) of the Specific Relief
Act, 1963. It is the Plaintiff who can ask the vendor to redeem the property.
The trial Court has misconstrued the provision. Further, the Judgment cited
below 2010 (7) SCC 717 clearly says in para 18 about the construction of
Section 13 (1) (c) of the Specific Relief Act. Apart from that the Defendant
has not preferred separate Appeal and a Cross Appeal can support the decree
but he cannot challenge the findings against him. The feeble attempt by the
first Defendant regarding the validity of the agreement, the readiness and
willingness of the Plaintiff has been in favour of the Plaintiff. This was not
questioned by the first Defendant by filing separate Appeal or cross objection.
Henceforth, the first Defendant cannot canvass the points which has been
rendered against him. The trial Court extensively dealt with the conduct of the
first Defendant.
12. The learned Counsel for the Appellant relied on the ruling
reported in (2010) 7 SCC 717 in the case of Laxman Tatyaaba Kankate and
Another Vs. Taramati Harishchandra Dhatrak. The relevant portion reads as
follows:-
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“18. The learned counsel appearing for the appellants drew our
attention to Section 13 (1) (c) of the Specific Relief Act, 1963 (for short
`the Act'), which clearly postulates that where a person contracts to sell
immovable property with an imperfect title and the property is
encumbered for an amount not exceeding the purchase money, the
purchaser has the right to compel the seller to redeem the mortgage and
obtain a valid discharge and then specifically perform the contract in its
favour. Even from this point of view, the right of the present respondent is
fully protected.
19. It will also be useful to refer to the provisions of Section 20 of
the Act which vests the Court with a wide discretion either to decree the
suit for specific performance or to decline the same. Reference in this
regard can also be made to the case of Bal Krishna v. Bhagwan Das
[(2008) 12 SCC 145], where this Court held as under :
"13. ........The compliance with the requirement of Section 16(c) is
mandatory and in the absence of proof of the same that the Plaintiff has
been ready and willing to perform his part of the contract suit cannot
succeed. The first requirement is that he must aver in plaint and thereafter
prove those averments made in the plaint. The Plaintiff's readiness and
willingness must be in accordance with the terms of the agreement. The
readiness and willingness of the Plaintiff to perform the essential part of
the contract would be required to be demonstrated by him from the
institution of the suit till it is culminated into decree of the court.
14. It is also settled by various decisions of this Court that by
virtue of Section 20 of the Act, the relief for specific performance lies in
the discretion of the court and the court is not bound to grant such relief
merely because it is lawful to do so. The exercise of the discretion to
order specific performance would require the court to satisfy itself that
the circumstances are such that it is equitable to grant decree for specific
performance of the contract. While exercising the discretion, the court
would take into consideration the circumstances of the case, the conduct
of parties, and their respective interests under the contract. No specific
performance of a contract, though it is not vitiated by fraud or
misrepresentation, can be granted if it would give an unfair advantage to
the Plaintiff and where the performance of the contract would involve
some hardship on the Defendant, which he did not foresee. In other
words, the court's discretion to grant specific performance is not
exercised if the contract is not equal and fair, although the contract is not
void."
20. Similar view was taken by this Court in the case of
Mohammadia Cooperative Building Society Ltd. v. Lakshmi Srinivasa
Cooperative Building Society Ltd. & Ors. [(2008) 7 SCC 310], where the
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Court reiterated the principle that jurisdiction of the Court to grant
specific performance is discretionary and role of the Plaintiff is one of the
most important factor to be taken into consideration.
21. We may also notice that in the case of P.V. Joseph's son
Mathew v. N. Kuruvila's Son [AIR 1987 SC 2328], this Court further
cautioned that while exercising discretionary jurisdiction in terms of
Section 20 of the Act, the Court should meticulously consider all facts and
circumstances of the case. The Court is expected to take care to see that
the process of the Court is not used as an instrument of oppression giving
an unfair advantage to the Plaintiff as opposed to the Defendant in the
suit.
22. The discretion of the Court has to be exercised as per the
settled judicial principles. All the aforesaid principles are squarely
satisfied in the present case and it is the appellants before us who have
taken advantage of the pendency of the proceedings. They have used the
sum of Rs. 10,000/-, which was given as earnest money for all this period,
as well as, have enjoyed the fruits of the property. The present case does
not fall within the ambit of any of the aforesaid cases specified under
Section 20 (2) of the Act. In the present case, it is not only lawful but even
equity and facts of the case demand that a decree for specific performance
should be granted in favour of the respondent. Besides all this, the
respondent before us has agreed to pay much higher consideration than
what was payable in terms of the agreement to sell between the parties.
23. The onus to prove that the respondent had obtained signatures
of the appellants on blank papers on the pretext of advancing a loan of
Rs. 2,000/- was entirely upon the appellants. No evidence, much less
cogent documentary or oral evidence, was led by the appellants to
discharge this onus. The averment has rightly been disbelieved and the
plea was rightly rejected by the concerned Courts in the judgment under
appeal. The appellants led no evidence and nothing was brought to our
notice, even during the course of the hearing, to show that this plea could
be accepted.
24. It is a settled principle of law that before the First Appellate
Court, the party may be able to support the decree but cannot challenge
the findings without filing the cross objections. As it appears from the
record, the present appellants have neither filed cross objections nor their
appeal challenging the findings recorded by the learned Trial Court. In
fact, the entire conduct of the present appellants shows that they have not
only failed to prove their claim before the Courts of competent
jurisdiction but have even not raised proper pleas in their pleadings.
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25. It was contended on behalf of the appellants that there has been
considerable increase in the price of the land in question. Though that
may be true, it cannot be a ground for denying the decree of specific
performance to the respondent. The learned First Appellate Court, by a
well reasoned judgment, has granted the relief of specific performance
instead of only granting refund of money, as given by the Trial Court. The
judgment of the First Appellate Court has been upheld by the High Court
and we see no reason whatsoever to interfere with the concurrent findings
of facts and law as stated in the judgment under appeal. However, the
learned counsel appearing for the respondent volunteered and after
taking instructions stated that they would be willing to pay a sum of Rs.
1,50,000/- instead of Rs. 40,000/- as the total sale consideration. We find
this offer of the respondent to be very fair.”
13. The learned Counsel for the first Respondent submitted that when
there is a subsisting loan availed by the Partnership Firm from the Oriental
Bank of Commerce, Chennai for a Principal amount of Rs.2,64,41,657/- how
can the alleged sale agreement dated 13.02.2006 be executed for a lesser value
with the Plaintiff. Therefore there arises a question of law, how the sale
agreement is enforceable for a value lesser than the loan. The same was
discussed in the judgment of Trial court and it was opined that if the purchase
price is less than the mortgage price, then the contract will become frustrated
due to impossibility of performance because a purchaser will not be ready to
purchase a property which is subject to encumbrance and which is more than
the agreed sale price. Therefore, the conclusion made by trial court that the
agreement is not enforceable in law is to be appreciated by this Honorable
Court and this Honorable Court should uphold the alternate relief granted by
Trial Court, which is in consonance with Section 13(3) (c) of Specific Relief
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Act.
14. He invited the attention of this Court to Section 13(3)(c) of the
Specific Relief Act of 1963 which states that if a vendor claims to sell a
property that is unencumbered, but it is actually mortgaged, the purchaser can
force the vendor to redeem the mortgage and get a valid discharge. Moreover,
the trial court had observed that the suit properties is one among the properties
which is mortgaged with Oriental Bank of Commerce, Chennai and therefore
the trial Court is not able to decipher the liability upon the suit property. The
liability on the mortgaged property is indivisible. So, when mortgage amount is
more than that of the sale price, then naturally, it will be onerous upon the
Plaintiff to enforce the contract and on that reason alone, the Honorable trial
Court came to a conclusion to order refund of the alleged amount which was
paid pursuant to Ex. A-1/ Sale agreement dated 13.02.2006. The Defendant had
complied with the decree of Trial court wherein a sum of Rs. 8,00,000/- with
accrued interest and costs was ordered to be paid to the Plaintiff. Accordingly,
the Defendant paid a sum of Rs. 17,74,018/- as per the E-Challan dated
22.07.2024 and paid the amount before the Trial Court. The remittance of such
amount is also duly informed to the Plaintiff and her counsel and the challan is
available in Court record. The purpose of executing yet another alleged sale
agreement dated 13.02.2006 was that Defendant could not repay the principal
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amount as assured by him. Therefore in order to extend the time period to
repay the principal amount, yet another sale agreement was executed on
13.02.2006 by the Defendant with the same recitals as stated in alleged sale
agreement dated 20.02.2004/Ex.B-1 which was entered with the Plaintiff. The
recitals of both the alleged sale agreement would remain same, except the date
and amount mentioned as advance. The conduct of the parties at the relevant
time is to be considered and that would clearly establish that the Ex. Al is not
meant for enforcement of contract. It is not a property dealing, but a Loan
(Money) transaction. The Exhibits relied by the Plaintiff through PW2 is for
the period from 2010 and that would clearly establish that it is a document
created for the purpose of grabbing the property and that the Plaintiff had all
along not been ready and willing to perform her part of the contract with
respect to Ex. A-l. It is a point to be considered by this Honorable Court that
the appeal in A.S. No. 324/2013 was dismissed for default on 21.11.2019 by
this Honorable Court under the caption dismissal for non prosecution. The
Defendant had all along been available for the arguments at that time.
Subsequent to the same, Defendant had approached the Plaintiff Mrs.
Kalanayagi to handover the possession on receipt of the alternate relief granted
by Trial Court dated 18.10.2012 with accrued interest and costs. The said
discussions went on till Jan 2022 as no fruitful results arrived, this Defendant
had issued a legal notice dated 28.02.2022 calling upon her to receive the
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amount in compliance with the decree passed in O. S. No. 94/2008 and to
handover the vacant possession. Having received the said legal notice, the
plainitff had not came forward to deliver possession to the
respondent/Defendant and she was left with no other option. This Defendant
had filed yet another suit for possession against the above named Plaintiff on
15.03.2022 in O.S. No. 258/2022 on the file of Honorable V Additional Judge
of Coimbatore for recovery of possession, mesne profits, and other reliefs. In
the said suit, the above Plaintiff who is the Defendant in O.S. 258/2022 had
filed her written statement only on 15.11 2022. The Plaintiff who had filed the
application to condone the delay of 1011 days had not even mentioned the date
of dismissal of the appeal in A. S. No. 324/2013, which shows her intention,
that is to enjoy the income out of the suit property for the loan amount paid by
her during 2004.
15. The learned Counsel for the first Respondent submitted that after
the dismissal of the appeal in A. S. No. 324/2013, it was informed by the
Defendant during the months of November 2019 and February 2020, and
continuously thereafter. He had issued a legal notice dated 28.02.2022 calling
upon the appellant/Plaintiff to furnish the Bank details to comply with the
decree for remitting the Decreetal amount. Having received the legal notice
sent by the Defendant on 03.03.2022, she had not come forward to comply the
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terms of the decree passed by the trial court and hence, the Defendant had filed
a suit in O.S. 258/2022 on the file of V Additional District Judge Coimbatore,
directing her to handover the possession in respect of the subject matter of the
suit properties within a date to be fixed by this Honorable Court. So the
Appellant knowing well that Appeal was dismissed and through suit in O.S.
No. 258/2022 the Defendant had sought for possession, had belatedly filed an
application to condone the delay of 1011 days in filing the restoration of the
Appeal Suit. There is absolutely no bona fide reasons to grant relief for specific
performance in favour of the Plaintiff. The Defendant further submits that in
the above suit before the trial court, the appellant had examined herself as P.W-
1, and another witness namely Krishnasamy as PW-2. Among the witnesses,
through PW-1, Exhibits Al to A-10 are marked and during cross examination,
she had admitted that there was yet another agreement of sale which was
executed during 2004 and the same also came to be marked as Ex-B-1. She had
also admitted the execution of that document, which the Appellant/Plaintiff had
suppressed in her pleading and has approached the Honourable Court with
unclean hands for the relief of specific performance which shall not be granted
to such a person whose conduct is not free from blemish. The Defendant
though had let out the suit property at the relevant point of time for plucking
the coconuts, it's meant for adjustment towards portion of interest alone which
is enjoyed by the appellant till date. Therefore, her intention is to enjoy the
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interest by way of taking yield from the standing coconut trees and not for the
purpose of enforcing the agreement of sale. If at all she wanted to enforce the
agreement, she would have taken steps through Ex.B-1. not through Ex.A-1;
and that too immediately thereafter P.W-2 had spoken in his cross examination
that he had verified original document belonging to the Defendant. But at a
later stage, he had deposed that the original document was in the custody of the
mother of the Defendant, which could not be furnished for one reason or the
other. He had also admitted during cross examination that on the date of Ex.A-
1 no consideration passed on to the Defendant from the Plaintiff. Hence the
conduct of parties to be considered and as such the Plaintiff had not come to
court with clean hands. With respect to the same, there is no pleading made by
Plaintiff. Hence, the deposition of witness PW-2 can't be acceptable at any
point of time.
16. In this regard this Defendant relied upon the judgment of
Honorable Supreme Court, Shenbagam Vs. K. K. Rathinavel (2022 SCC
OnLine SC 71) wherein it was held that in deciding whether or not to grant the
relief of specific performance, the courts must be cognizant of the conduct of
the parties, the escalation in the price of the suit property and consider whether
one party will unfairly benefit from the decree. In the absence of satisfactory
evidence to show that the Plaintiff was having sufficient funds with him to
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discharge his obligations in terms of the contract and the failure of the Plaintiff
to prove his readiness and willingness and considering the conduct of the
Plaintiff prior and subsequent to the filing for the suit especially the delay of
more than 2 years in getting the suit restored, along with other attending
circumstances, we find that the Plaintiff is not entitled for the relief of specific
performance and a decree for return of advance amount with interest will meet
the ends of justice. The Defendant further submitted that on his side, he was
examined as DW-1 and Mr.K.T.Ragupathy was examined as DW-2 who is one
of the witnesses to sale deed dated 15.10.1993 stands in favour of the
Defendant and also in Ex.A-l and Ex.B-1. He had deposed that the Defendant
was in need of loan for which he had arranged the loan facility with his friend,
Mr. Ganesan, who is the husband of the Plaintiff. Accordingly Mr. Ganesan
had arranged loan amount on 20.02.2004 and paid the same to the Defendant
with arrangement to adjust the interest on such lending from the yield of
standing coconut trees for which possession with limited purpose was
entrusted. That is the only reason why the Defendant had handed over
possession to the Plaintiff. Though under an unregistered sale agreement,
possession can't be handed over, but in the case, the Defendant who was in
Chennai during the said time, for his need to pay to his loan account in Oriental
Bank of commerce, had availed the loan amount from Plaintiff and handed
over the possession of the property to pluck the coconut trees which was to be
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adjusted towards interest for the loan amount availed. In the suit before the
Trial Court, neither the Plaintiff nor her son proved their readiness and
willingness from the date as referred in Ex. B-1 and also through Ex. A-1. But
through the act of Plaintiff, it is emphasised that her intention was to take
income out of the suit property even during the period of dismissal, which
shows that she is not at all ready and willing to purchase the suit properties as
she is aware that the property is secured with Oriental Bank of Commerce,
Chennai towards credit facilities availed by this Defendant through his
partnership firm.
17. The Respondent/Defendant relied upon Judgments of the the
Hon'ble Supreme Court and the same are as follows:-
17.1. In (2022 Live Law (SC) 588) dated 12 July 2022 in Civil Appeal
No. 4703 Of 2022 [ARISING Out Of Slp (C) No. 19463 Of 2018) U.N,
Krishnamurthy (SINCE Deceased) Thr Lrs. Versus A.M.
Krishnamurthy Specific Relief Act, 1963; Section 16(c) – Relevant Paras
are extracted hereunder, Para 22. The primary question for determination
is whether the Respondent/Plaintiff has proved his readiness and
willingness to perform his part of the contract or not?
24. Section 16 (c) of the Specific Relief Act, 1963 bars the relief
of specific performance of a contract in favour of a person, who fails to
aver and prove his readiness and willingness to perform his part of
contract. In view of Explanation (i) to clause (c) of Section 16, it may not
be essential for the Plaintiff to actually tender money to the Defendant or
to deposit money in Court, except when so directed by the Court, to prove
readiness and willingness to perform the essential terms of a contract,
which involves payment of money. However, explanation (i) says the
Plaintiff must aver performance or readiness and willingness to perform
the contract according to its true construction.
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25. To aver and prove readiness and willingness to perform an
obligation to pay money as per the terms of a contract, the Plaintiff would
have to make specific statements in the plaint and adduce evidence to
show availability of funds to make payment in terms of the contract in
time. In other words, the Plaintiff would have to plead that the Plaintiff
had sufficient funds or was in a position to raise funds in time to discharge
his obligation under the contract. If the Plaintiff does not have sufficient
funds with him to discharge his obligations as per the terms of a contract,
which requires payment of money, the Plaintiff would have to specifically
plead how the funds would be available to him. To cite an example, the
Plaintiff may aver and prove, by adducing evidence, an arrangement with
a financier for disbursement of adequate funds for timely compliance with
the terms and conditions of a contract involving payment of money.
26. In Man Kaur v. Hartar Singh Sanghal [(2010) 10 SCC
512], wherein it is held as follows:
"40 ......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) is
barred from claiming specific performance. Therefore, even assuming
that the Defendant had committed breach, if the Plaintiff fails to aver in
the plaint or prove that he wax always ready and willing to perform the
essential terms of contract which are required to be performed by hum
(other than the terms the performance of which has been prevented or
waived by the Plaintiff), there is a bar to specific performance in his
favour. Therefore, the assumption of the Respondent that readiness and
willingness on the part of the Plaintiff is something which need not be
proved, if the Plaintiff is able to establish that the Defendant refused to
execute the sale deed and thereby committed breach, is not correct. Let us
give an example. Take a case where there is a contract for sale for a
consideration of Rs. 10 lakhs and earnest money of Rs. 1 lakh was paid
and the vendor wrongly refuses to execute the sale deed unless the
purchaser is ready to pay Rs. 15 lakhs. In such a case there is a clear
breach by the Defendant. But in that case, if the Plaintiff did not have the
balance Rs. 9 lakhs (and the money required for stamp duty and
registration) or the capacity to arrange and pay such money, when the
contract had to be performed, the Plaintiff will not be entitled to specific
performance, even if he proves breach by the Defendant, as he was not
"ready and willing" to perform his obligations."
27. In Pi. Prem Raj v. D.L.F. Housing and Construction
(Private) Ltd. And Anr. cited by Mr. Venugopal, this Court
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speaking through Ramaswami J. held that "it is well settled that in
a suit for specific performance the Plaintiff should allege that he is
ready and willing to perform his part of the contract and if the fact is
traversed, he is required to prove a continuous readiness and
willingness from the date of the contract to the time of the hearing,
to perform the contract on his part. For such conclusion the learned
Judge relied upon the opinion of Lord Blanesburgh, in Ardeshir
Mama v. Flora Sassoon [55 1. A. 360, at p. 372.].
28. In D.L.F. Housing and Construction (Pvt.) Ltd.
(supra), in the absence of an averment on the part of the Plaintiff in
the plaint, that he was ready and willing to perform his part of the
contract, it was held that the Plaintiff had no cause of action so far as
the relief for Specific Performance was concerned. In this case, of
course, there is an averment in the plaint that the Respondent
Plaintiff was all along ready and willing to perform his obligations
under the contract. The question is whether the Respondent Plaintiff
had proved his readiness and willingness to perform his obligations
under the contract.
29. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and
Ors.4, this Court reiterated that Section 16(c) of the Specific Relief
Act, 1963 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 were to be performed by him
other than those terms, the performance of which has been prevented
or waived by the Defendant. In N.P. Thirugnanam (supra) this Court
said that the continuous readiness and willingness on the part of the
Plaintiff was a condition precedent for grant of the relief of Specific
Performance.
30. This Court, in effect, held that for determining whether
the Plaintiff was ready and willing to perform his part of the
agreement it is necessary for the Court to consider the conduct of the
Plaintiff prior and subsequent to filing the suit for specific
performance. The relevant part of the judgment is extracted
hereinbelow:
"5. ...Section 16(c) of the Act envisages that 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
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prevented or waived by the Defendant. The continuous readiness and
willingness on the part of the Plaintiff is a condition precedent to
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"
31. In Umabat v. Nilkanth Dhondiba Chavan, this Court
held that a finding as to whether the Plaintiffs were all along and still
ready and willing to perform their part of the contract, was a
mandatory requirement under Section 16(c) of the Specific Relief
Act. The Court would necessarily have to arrive at the finding that
the Plaintiff all along were, and still are ready and also willing to
perform their part of the contract, taking into account the entirety of
the pleadings as also the evidence brought on record. To quote this
Court:
"So far there being a plea that they were ready and willing to
perform their part of the contract is there in the pleading, we have no
hesitation to conclude, that this by itself is not sufficient to hold that
the appellants were ready and willing in terms of Section 16(c) of the
Specific Relief Act. This requires not only such plea but also proof
of the same. Now examining the first of the two circumstances, how
could mere filing of this suit, after exemption was granted be a
circumstance about willingness or readiness of the Plaintiff. This at
the most could be the desire of the Plaintiff to have this property. It
may be for such a desire this suit was filed raising such a plea. But
Section 16(c) of the said Act makes it clear that mere plea is not
sufficient, it has to be proved."
32. In K.S. Vidyanadam v. Vairavaní, Justice B.P. Jeevan
Reddy said that grant of the relief of specific performance is
discretionary and the Court is not bound to grant it. This Court
further held that though time is not of essence to a contract relating
to transfer of property, such contracts need to be completed within a
reasonable time period. Thus the time element cannot be completely
ignored
33. In a suit for Specific Performance of a contract, the
Court is required to pose unto itself the following questions, namely:
(1) Whether there is a valid agreement of sale binding on both the
vendor and the vendee and (2) Whether the Plaintiff has all along
been and still is ready and willing to perform his part of the contract
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as envisaged under Section 16(c) of the Specific Relief Act, 1963.
34. There is a distinction between readiness and willingness
to perform the contract. Both ingredients are necessary for the relief
of Specific Performance. In His Holiness Acharya Swami Ganesh
Dasaji x. Sita Ram Thapar7 cited by Mr. Venugopal, this Court said
that there was a difference between readiness and willingness to
perform a contract. While readiness means the capacity of the
Plaintiff to perform the contract which would include his financial
position, willingness relates to the conduct of the Plaintiff. The same
view was taken by this Court in Kalawati v. Rakesh Kumar.
35. Even in the first appeal, the first Appellate Court is duty
bound to examine whether there was continuous readiness and
willingness on the part of the Plaintiff to perform the contract. This
proposition finds support from Balraj Taneja v. Sunil Madan, and
H.P. Pyarejan v. Dasappal) where this Court approved the view
taken by the Privy Council in Ardeshir Mama v. Flora Sassoon
36. In Malluru Mallappa v. Kuruvathappa, this Court observed
and held:-
"13. It is a settled position of law that an appeal is a
continuation of the proceedings of the original court. Ordinarily, the
appellate jurisdiction involves a rehearing on law as well as on fact
and is invoked by an aggrieved person. The first appeal is a valuable
right of the appellant and therein all questions of fact and law
decided by the Trial Court is open for reconsideration. Therefore, the
first appellate court is required to address all the issues and decide
the case by giving reasons. The court of first appeal must record its
findings only after dealing with all issues of law as well as fact and
with the evidence, oral as well as documentary, led by the parties.
The judgment of the first appellate court must display conscious
application of mind and record findings supported by reasons on all
issues and contentions, B.M. Narayana Gowda v. Shonthamma
[B.M. Narayana Gowda v. Shanthamma, (2011) 15 SCC 476 (2014)
2 SCC (C) 619) H.K.N. Swami v. Irshad Basith [H.K.N. Swami v
Irshad Bosith, (2005) 10 SCC 243] and Sri Raja Lakshmi Dyeing
Works v. Rangaswamy Chettiar [Sri Raja Lakshmi Dyeing Works v.
Rangaswamy (1980) 4 SCC 259]] 14. A first appeal under Section
96 CPC is entirely different from a second appeal under Section 100.
Section 100 expressly bars second appeal unless a question of law is
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involved in a case and the question of law so involved is substantial
in nature. *** 18. It is clear from the above provisions and the
decisions of this Court that the judgment of the first appellate court
has to set out points for determination, record the decision thereon
and give its own reasons. Even when the first appellate court affirms
the judgment of the trial court, it is required to comply with the
requirement of Order 41 Rule 31 and non-observance of this
requirement leads to infirmity in the judgment of the first appellate
court. No doubt, when the appellate court agrees with the views of
the trial court on evidence, it need not restate effect of evidence or
reiterate reasons given by the trial court. Expression of a general
agreement with the reasons given by the trial court would ordinarily
suffice.
38. In this case, we cannot overlook the fact that the suit
property is located in the industrial town of Hosur that is located
about 30/40 kms. from Bengaluru The Court is obliged to take
judicial notice of the phenomenal rise in the price of real estate in
Hosur. The proposition finds support from case reported in K.S.
Vidyanadam v. Vairavan (supra). To quote this Court "we cannot be
oblivious to reality and the reality is constant and continuous rise in
the values of urban properties fuelled by large scale migration of
people from rural areas to urban centres and by inflation."
39. Mr. Venugopal argued that the Plaintiff had only paid an
insignificant amount of Rs. 10,001/- as advance when the
consideration was Rs. 15,10,000/- Having paid an insignificant
amount the Plaintiff was not entitled to discretionary equitable relief
of Specific Performance, as observed by this Court in Saradamani
Kandappan v S. Rajalakshmi, The relevant paragraph of the
judgment of this Court is set out herein below:-
37. The reality arising from this economic change cannot
continue to be ignored in deciding cases relating to specific
performance. The steep increase in prices is a circumstance which
makes it inequitable to grant the relief of specific performance where
the purchaser does not take steps to complete the sale within the
agreed period, and the vendor has not been responsible for any delay
or non-performance. A purchaser can no longer take shelter under
the principle that time is not of essence in performance of contracts
relating to immovable property, to cover his delays, laches, breaches
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and "non-readiness" The precedents from an era, when high inflation
was unknown, holding that time is not of the essence of the contract
in regard to immovable properties, may no longer apply, not because
the principle laid down therein is unsound or erroneous, but the
circumstances that existed when the said principle was evolved, no
longer exist. In these days of galloping increases in prices of
immovable properties, to hold that a vendor who took an earnest
money of say about 10% of the sale price and agreed for three
months or four months as the period for performance, did not intend
that time should be the essence, will be a cruel joke on him, and will
result in injustice. Adding to the misery is the delay in disposal of
cases relating to specific performance, as suits and appeals therefrom
routinely take two to three decades to attain finality. As a result, an
owner agreeing to sell a property for rupees one lakh and receiving
rupees ten thousand as advance may be required to execute a sale
deed a quarter century later by receiving the remaining rupees ninety
thousand, when the property value has risen to a crore of rupees."
46. It is a settled law that for relief of specific performance,
the Plaintiff has to prove that all along and till the final decision of
the suit, he was ready and willing to perform his part of the contract.
It is the bounden duty of the Plaintiff to prove his readiness and
willingness by adducing evidence. This crucial facet has to be
determined by considering all circumstances including availability of
funds. Mere statement or averment in plaint regarding readiness and
willingness, would not suffice.
47. In this case, the Respondent Plaintiff has failed to
discharge his duty to prove his readiness as well as willingness to
perform his part of the contract, by adducing cogent evidence.
Acceptable evidence has not been placed on record to prove his
readiness and willingness. Further, it is clear from the Respondent
Plaintiff's balance sheet that he did not have sufficient funds to
discharge his part of contract in March 2003. Making subsequent
deposit of balance consideration after lapse of seven years would not
establish the Respondent Plaintiff's readiness to discharge his part of
contract. Reliance may be placed on Umabai v. Nilkanth Dhondiba
Chavan (supra) where this Court speaking through Justice SB Sinha
held that deposit of amount in court is not enough to arrive at
conclusion that Plaintiff was ready and willing to perform his part of
contract. 20 (2020) 3 SCC 311 Deposit in court would not establish
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Plaintiff's readiness and willingness within meaning of section 16(c)
of Specific Relief Act. The relevant part of the judgment is
reproduced below: "45. ... Deposit of any amount in the court at the
appellate stage by the Plaintiffs by itself would not establish their
readiness and willingness to perform their part of the contract within
the meaning of Section 16(c) of the Specific Relief Act..."
48. It is therefore, patently clear that the Respondent Plaintiff
has failed to prove his readiness to perform his part of contract from
the date of execution of the agreement till date of decree, which is a
condition precedent for grant of relief of specifle performance. This
Court finds that the Respondent Plaintiff was not entitled to the relief
of specific performance.
49. The Respondent Plaintiff may have been willing to
perform his part of contract. It however appears that he was not
ready with funds. He was possibly trying to buy time to discharge his
part of contract
50. In Bhavyanath v. K.V. Balan cited by Mr. Raju to contend
that the Respondent Plaintiff was entitled to relief of specific
performance and the courts had rightly granted such relief, the
Plaintiff had filed the suit for specific performance three days after
the last day for execution of the sale deed. In this case however, the
Respondent Plaintiff waited for nearly 3 years and filed the suit for
specific performance just before expiry of the limitation period.
Furthermore, in Bhavyanath v. K.V. Balan (supra) the Plaintiff had
adduced cogent evidence to prove his readiness and willingness to
discharge his part of the contract and to prove that he had sufficient
funds to discharge his obligation. No such evidence has been
adduced by the Respondent Plaintiff in this case either to show his
readiness or to prove that sufficient funds were available with him to
enable him to discharge his part of contract. Therefore. Bhavyanath
v. K.V. Balan (supra) is of no assistance to the Respondent Plaintiff
51. In view of the foregoing cases, this Court is of the
considered opinion that the Respondent Plaintiff was not entitled to
the relief of specific performance. The Trial Court and the Appellate
Court erred both in law and on facts in granting such relief.
52. The appeal is accordingly allowed. The impugned
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judgment of the High Court and the judgment and decree of Trial
court are accordingly set aside. The Appellants shall return the
earnest money to the Respondent Plaintiff within 4 weeks from today
with interest at the rate of 7% per annum from the date of deposit of
the same, till the date of refund. It will also be open to the
Respondent Plaintiff to withdraw the deposit if any of the balance
consideration is with Court. Parties to bear their own costs.”
18. The Plaintiff did not have resources for paying the balance
consideration of Rs. 14,00,000/- and also for paying registration charges and
stamp duty. Further Ex.B-1 and Ex.A-1 both are admitted documents and
Plaintiff had not taken any steps whatsoever to get the sale deed executed. Only
after lapse of more than eight months, the Plaintiff issued a notice to the
address of the Defendant, which she very well knows that Defendant is not
available in the said address as the Defendant had shifted his residence long
before to Kotagiri. Delay on the part of the Plaintiff is also writ large on the
face of the record, sending notices to Defendant's old address intentionally,
suppressing Ex.B-1 from the plaint, and not having funds/means to pay the
balance sale consideration (plus Stamp duty plus registration charges appx.
More than two lakhs) (Ex.A-11 series) etc amply makes in clear that Plaintiff
has no legs to stand on in this Appeal and liable to be dismissed. There are
Judgments to the effect that due to efflux of time, property prices surge and
specific performance could not be granted. Hence the alternate relief granted
by Trial Court is to be upheld in the interest of justice.
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Point for determination:-
Whether the Judgment of the learned IV Additional
District Judge, Coimbatore in O.S.No.94 of 2008 dated
18.10.2012 dismissing the Suit of the Plaint for specific
performance and granting the alternate relief of refund of the
advance amount of Rs.8,00,000/- and creating a charge over
the property is erroneous warranting interference by this
Court under Section 96, Order 41 of the Code of Civil
Procedure?
19. Heard the arguments of the learned Counsel for the Appellant
Mr.M.Guruprasad and the learned Counsel for the first Respondent
Mr.R.Thiyagarajan for Mr.V.J.Arul Raj.
20. Perused the original records in O.S.No.94 of 2008 on the file of
the learned IV Additional District Judge, Coimbatore.
21. The Appeal had been preferred by the Plaintiff against the
dismissal of the Suit for special performance and granting alternate relief of
refund of advance amount. On perusal of the Plaint, the Plaint was amended
by the Plaintiff by impleading the second Defendant/General Manager,
Oriental Bank of Commerce, and the paragraph 8-A is included whereby the
Plaintiff seeks specific performance by seeking to clear the debts and the
liabilities of the Defendant for which the proceedings are pending before the
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Debt Recovery Tribunal over the Suit property and Plaintiff undertaking to file
a Petition before the Debt Recovery Tribunal and seeking to release the
property as she is interested in purchasing the property.
22. The learned Judge in the appreciation of evidence, while
answering the Issue No.2, in the course of the discussion of evidence had
observed that the property is under the proceedings of the Debt Recovery
Tribunal, Chennai, the total claim before the Debt Recovery Tribunal is more
than Rupees Two and half Crores. The first Defendant is the sixth Respondent
in the Original Application. The certified copy of the proceedings before the
Debt Recovery Tribunal was marked as Ex.B-6 in the course of the trial before
the learned IV Additional Judge, City Civil Court in O.A.No.196 of 2003,
when the recovery proceedings are pending as per the evidence of the first
Defendant, the decree for specific performance cannot be granted. The learned
IV Additional Judge observes in the discussion that as per Section 34 of the
SARFAESI Act, 2002, the Suit is barred. The arguments put forth by the
learned Counsel for the Plaintiff, he had relied on the exception to Section 34
and Section 31 (i) of the SARFAESI Act, 2002 wherein agricultural lands are
exempted from the provisions of the Act. If that argument is accepted, and if
the Plaintiff claim for specific performance is to be considered, he has to clear
the mortgage with the second Defendant. The learned IV Additional Judge
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raised a question whether the argument put forth by the learned Counsel for the
Plaintiff can be considered. The Plaintiff can claim the relief only if he satisfies
the condition imposed under Section 13 (1) (c) of the Specific Relief Act, is
extracted hereunder:-
“13 (1) (c) - where the vendor professes to sell
unencumbered property, but the property is mortgaged for an
amount not exceeding the purchase money and the vendor has
in fact only a right to redeem it, the purchaser may compel him
to redeem the mortgage and to obtain a valid discharge, and,
where necessary, also a conveyance from the mortgagee;”
23. The learned IV Additional Judge observed in his judment in
paragraphs as follows:
“22. .................As per this provision, the mortgage amount
should not exceed the purchase money, which means that the
purchase money must be more than that of the mortgage amount. If
this condition is satisfied, then he can compel the vendor to redeem
the mortgage and he can also get a conveyance from the mortgage.
In simple term, we can say that, a purchaser is entitled to purchase a
property subject to encumbrance, he may undertake to discharge the
encumbrance by himself or ask the vendor to discharge the liability.
Again, which means that a purchaser can purchase the property
along with equity of redemption and this is a basic law, with regard
to purchase subject to encumbrance.”
24. The learned Judge had observed that if the purchase price is less
than the mortgage price, then the contract will be frustrated due to
impossibility of performance. Because, the purchaser will not be ready to
purchase a property which is subject to encumbrance and which is more than
the agreed sale price. The learned Judge had perused Ex.A-1. It did not
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contain such recital that the Defendant had disclosed the fact that the property
is under Debt Recovery Tribunal proceedings and subject to clearance of the
liability before the Debt Recovery Tribunal. It only states that the Defendant
undertakes to execute the sale deed for Rs.22,00,000/- in favour of the Plaintiff
on accepting advance amount of Rs.8,00,000/- on 15.12.1993 and had handed
over possession to the Plaintiff and agreed to execute the sale deed after
receiving the balance of sale consideration of Rs.14,00,000/-. The recital does
not mention the mortgage pending before the Oriental Bank of Commerce.
Therefore, the learned Judge in the course of the discussion of evidence
observed the conduct of the Defendant that the Defendant had stated in the
written statement that the sale agreement did not come into existence with
intention to sell the property but only executed as a security for the loan
received by the Defendant. Further, he had observed that the notice sent by the
Plaintiff was not received and it was returned to the Plaintiff as the Defendant
had shifted his residence. Therefore, the learned Judge had observed that a
purchaser will not be ready to purchase a property which is subject to
encumbrance which is more than the agreed sale price. If the mortgage amount
is less than the agreed sale price, the Court is within its discretion to grant
specific performance. Therefore, the learned Judge had observed that it is
onerous condition that cannot be imposed on the Plaintiff. Further, the conduct
of the Defendant was observed that he had intention to cheat the Plaintiff.
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Therefore, to protect the interest of the Plaintiff, the Court has a duty under the
principles of fairness, equity and good conscience which governs a Civil Court
in granting a decree. Therefore, the learned Judge had analysed the probability
of the case in the light of SARFAESI Act and in the light of the Specific Relief
Act, particularly under Section 13 (1) (c).
25. The reasoning of the learned Judge cannot be faulted under the
principles of SARFAESI Act and under the principles of Specific Relief Act,
particularly under Section 13 (1) (c). In the Appeal, the Plaintiff as Appellant
states that the observation by the learned Judge regarding Ex.B-6, property
under mortgage is for Rs.2,62,00,000/- is beyond the sale price. In the
Appeal, the Plaintiff as Appellant claims that the observation of the learned
Judge is misconceived as there are number of properties under the proceedings
before the Debt Recovery Tribunal between the second Defendant and the first
Defendant in O.S.No.94 of 2007 before the learned IV Additional District
Judge, Coimbatore. If it is so, it is for the Plaintiff to obtain appropriate orders
by approaching the Debt Recovery Tribunal, the Civil Court cannot exercise
discretion, ignoring the SARFAESI Act by granting a specific decree in favour
of the Plaintiff for Rs.22,00,000/- for one particular property. It will create
legal complications defeating the jurisdiction of the learned Debt Recovery
Tribunal in securing the properties to recover the outstanding dues to the Bank.
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Therefore, the learned Judge had rightly rejected the claim of the Plaintiff for
specific performance of contract and instead, granted the decree in equity for
Rs.8,00,000/- which is the amount paid as per Ex.A-1. The evidence of the
Defendant during trial was observed by the learned Judge in the light of the
documents filed by the Defendant under Ex.B-1 to Ex.B-6. The Defendant was
found unreliable and the learned Judge had found that his intention was to
cheat the Plaintiff by not disclosing the encumbrance created by him, the
mortgage in favour of the second Defendant. Even though the second
Defendant had remained ex parte, the Court cannot grant a decree ignoring the
interest of the Bank as per the SARFAESI Act which was enacted by the
Parliament to protect the interest of the Banking Institutions to recover the
loans by excluding the jurisdiction of Civil Court and creating new statutory
bodies to recover the dues by setting up exclusive Tribunals for appropriate
actions to recover the dues. Under those circumstances, the Civil Court
exercising jurisdiction the moment the Civil Court came to know of the
overlapping jurisdiction due to the marking of Ex.B-6 had on appreciation of
evidence, had arrived at a conclusion that it is not fair on the part of the Civil
Court to ignore the proceedings under Ex.B-6 and mechanically grant a decree
for specific performance. This Court as Appellate Court cannot reject the
finding of the learned IV Additional Judge and the reasoning of the learned IV
Additional Judge, Coimbatore in rejecting the relief of specific performance
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and granting the alternate relief of refund of the advance amount.
26. It is to be noted that the Plaintiff had sought alternate relief only
after the argument stage by including the alternate relief and amending the
Plaint by including the second Defendant/Bank as a party to the proceedings.
Under those circumstances, the reasoning of the learned District Judge
rejecting the claim of specific relief is found proper particularly when the
SARFAESI Act is invoked and the Debt Recovery Tribunal has seized the
matter. When Ex.A-1 states that the value of the properties is only
Rs.22,00,000/- whereas the mortgage created by the first Defendant is only for
Rs.22,00,000/-, whether it was suppression of the value for the property. The
learned Judge had found that Ex.A-1, sale agreement is true, but at the same
time the intention of the first Defendant was to cheat the Plaintiff. He has
shifted his residence from Anna Nagar, Chennai and given an alternate address
at Kotagiri whereas even in Kotagiri address, he was not found. Under those
circumstances, it is not fair on the part of the learned IV Additional Judge to
grant decree for specific performance. It is a well-reasoned Judgement.
27. In the reported ruling of the Hon'ble Supreme Court in Betal
Singh -vs- State of M.P. reported in (1996) 8 SCC 205 and in V.Sejappa - Vs -
State reported in 2016 (12) SCC 150, if the trial Court had on proper
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appreciation of evidence arrived at a finding, the finding of the learned trial
Judge shall not be disturbed by the Appellate Court. Even if the same set of
evidence, the Appellate Court comes to opposite finding, the finding of the trial
Court shall not be thrust on the trial Court, because, the trial Court had the
advantage of observing the demeanour of the parties to the dispute which is not
available to the Appellate Court.
28. In the Appeal, the Appellant did not come to argue the case in
spite of repeated adjournments. Therefore, the then learned Judge of the Court
by Judgment dated 21.11.2019 dismissed the Appeal. Subsequently, the
learned Counsel for the Appellant filed restoration Petition along with the
petition to condone delay in filing restoration petition. Before allowing the
condone delay Petition, the learned Counsel for the Appellant was directed to
argue the case on merits, if he had merits, the Petition to condone delay will be
allowed on costs. Accordingly, after hearing the learned Counsel for the
Appellant, for a length of time, the Petition for condone delay was allowed on
12.11.2024 in the presence of the learned Counsel for the Respondent, after
due notice. Subsequently, the Petition for restoration of the Appeal was posted
along with the Second Appeal. At this stage, the learned Counsel for the
Respondent is also present and the learned Counsel for the Respondent was
heard and restoration Petition was allowed on 11.12.2024. After hearing the
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learned Counsel for the Respondent on 18.12.2024, the case came up for three
hearings as “part-heard”. Subsequently, the subject matter was “reserved for
Judgment”.
29. The learned Counsel for the Respondent invited the attention of
this Court to Section 16 (c) of the Specific Relief Act (as amended) and
Section 55 of the Contract Act and Article 54 of the Limitation Act. He
further submitted that Section 55 of the Contract Act deals with implied
covenant and explicit covenant. It is the contention of the learned Counsel for
the first Respondent that time is essence of the contract.
30. The learned trial Judge had observed the demeanour of the parties
before the trial Court and also outside the Court shifting his residence
frequently. The learned Judge had appreciated evidence in particular Ex.A-1,
sale agreement deed dated 13.02.2006, which is the subject matter of the Suit
in O.S.No.94 of 2008 and the earlier agreement between the parties under
Ex.B-1 dated 20.02.2004. Ex.B-1 is the earlier sale agreement between the
Plaintiff and Defendant where the sale price was fixed at Rs.22,00,000/- and
advance paid by the Plaintiff was Rs.6,00,000/-. The sale agreement was
executed on 16.12.1993 and in which the possession was handed over to the
Plaintiff in the year 1993 and agreeing to execute the sale deed between
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20.02.2004 and 19.02.2006 after receiving balance sale consideration.
Subsequently, a new sale agreement was executed under Ex.A-1 for the same
property. In both these agreements, the claim made by the first Defendant that
there was encumbrance, that is, mortgage with the Bank had not been stated
and combined to that fact, the conduct of the Defendant in shifting his
residence and not informing the Plaintiff of the shifting of his residence, was
considered by the learned Judge while granting relief in equity, thereby
protecting the interest of the Plaintiff, and at the same time, protecting the
interest of the Bank which is adjudicating its interest before the Debt Recovery
Tribunal concerned. Therefore, the learned Judge felt that it is not fair on the
part of the Civil Court, ignoring the provisions of the SARFAESI Act and
granting a decree for Rs.22,00,000/-. When the subject matter of the mortgage
for which the Debt Recovery Tribunal is seized of the matter is Rs.2 ½ crores,
the Court cannot grant a decree for Rs.22,00,000/-. The argument of the
learned Counsel for the Plaintiff was that the agriculture properties are
exempted from Debt Recovery Tribunal proceedings and also under Section 34
of the SARFAESI Act, the learned Judge had observed that no one will be
permitted to play a game of chance in the Court. The learned Judge further
observed that the transaction under Ex.B-1 and the conduct of the Defendant
throughout the proceedings does not inspire confidence of the learned Judge.
Therefore, it is the duty cast upon the Judge to pass appropriate Orders,
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protecting the interest of the Debt Recovery Tribunal and the second
Defendant/Bank before the Debt Recovery Tribunal to recover the dues from
the first Defendant through the SARFAESI proceedings and at the same time,
protecting the interest of the Plaintiff. Therefore, he had rightly rejected the
claim of the Plaintiff seeking specific performance of contract for
Rs.22,00,000/-. The subject matter of the property before the Debt Recovery
Tribunal is not before the Court. How many items of the properties are under
the SARFAESI Act before the Debt Recovery Tribunal to exclude the
particular property by invoking the right of the Civil Court, ignoring the
SARFAESI provisions. Therefore, the learned Judge had rightly rejected the
claim of the Plaintiff. The Plaintiff had preferred this Appeal only to invoke the
jurisdiction of the Civil Court to enforce the contract under Ex.A-1 for specific
performance of contract, instead of the alternate relief. It is to be noted that
only at the stage of argument, the Plaintiff had amended the plaint by including
second Defendant and seeking permission of the Court to clear the mortgage
before the Debt Recovery Tribunal and seek the alternate relief of refund of the
advance amount. Therefore, the learned Judge had protected the interest of the
Plaintiff. Now at this stage, the Plaintiff cannot expect the Appellate Court to
grant relief, particularly specific relief against the interest of the Bank for a
mortgage for the value of two and half Crores for which SARFAESI Act
proceedings had been initiated by the Bank before the Debt Recovery Tribunal
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whereas the subject matter of the sale agreement under Ex.A-1 is
Rs.22,00,000/-, particularly when the Appeal was dismissed as on 21.11.2019
and restored only in the year November, 2024. Therefore, within three years
period what transpired before the Debt Recovery Tribunal is not before this
Court as the observation of the learned IV Additional Judge holds good even
at this stage. Regarding the observation that for two and half Crores worth of
mortgage, the Plaintiff cannot be forced to clear the mortgage to execute sale
deed for Rs.22,00,000/-. Therefore, the attempt of the Plaintiff as Appellant
seeking specific performance of contract has to be rejected by this Court.
31. The ruling cited by the learned Counsel for the Appellant reported
in (2010) 7 SCC 717 in the case of Laxman Tatyaaba Kankate and Another
Vs. Taramati Harishchandra Dhatrak will not hold good in the facts and
circumstances of this case as the subject matter of the sale agreement under
Ex.A-1 was even prior to that of mortgage with the second Defendant Bank
which was suppressed while entering Ex.A-1, sale agreement with the Plaintiff.
The property was shown to be worth Rs.22,00,000/- for which the Plaintiff had
created Ex.A-1, sale agreement by availing loan amount Rs.6,00,000/- as
advance in the year 1993 as per Ex.B-1 and subsequently, renewed by a fresh
sale agreement under Ex.A-1 for Rs.22,00,000/- as though Rs.8,00,000/- was
paid including the amount Rs.6,00,000/- already paid as advance and granting
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the possession to the Plaintiff.
32. The Judgment of the learned IV Additional District Judge,
Coimbatore in O.S.No.94 of 2008 dated 18.10.2012 is found well-reasoned in
the light of the Specific Relief Act and SARFAESI Act. There is no ground to
interfere with the well-reasoned Judgment of the learned IV Additional District
Judge, Coimbatore.
In the light of the above discussions, the point for determination is
answered against the Appellant/Plaintiff and in favour of the
Respondent/Defendant.
In the result, this Appeal Suit is dismissed as having no merits. The
Judgment and Decree in O.S.No.94 of 2008 dated 18.10.2012 on the file of the
learned IV Additional District and Sessions Judge, Coimbatore is confirmed.
Consequently, connected Miscellaneous Petition is closed. No orders as to
costs.
30.06.2025
dh
Index : Yes/No
Internet: Yes/No
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Speaking/Non-speaking order
To
1. The IV Additional District
and Sessions Judge, Coimbatore.
2. The Section Officer,
V.R.Section,
High Court, Madras.
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SATHI KUMAR SUKUMARA KURUP, J.,
dh
Judgment made in
30.06.2025
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