## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR. JUSTICE A.HARIPRASAD**
**&**
**THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI**
**FRIDAY, THE 30TH DAY OF AUGUST 2019 / 8TH BHADRA, 1941**
**RFA.No.595 OF 2016**
**AGAINST THE JUDGMENT AND DECREE IN OS 3/2009 DATED 11-08-2015 OF SUB COURT, PALAKKAD**
## **APPELLANTS/DEFENDANTS:**
**1 ABDUL ASEES S/O. MUHAMMED, KARIMPANAKKAL,KOTTAPADAM, MANNARKKAD TALUK, PALAKKAD DISTRICT**
**2 MUHAMMED MOIDHEEN, KOMBATH, KOTTOPADAM, MANNARKKAD TALUK,PALAKKAD DISTRICT**
**BY ADVS. SRI.U.K.DEVIDAS SRI.R.D.SHENOY (SR.)**
## **RESPONDENT/PLAINTIFF:**
**1 A.R.MUHAMMED ILLYAS S/O. V. ABDUL RAHIM, AGED 30 YEARS,ARPHANA MANZIL, GANDHI NAGAR,POOCHIRA, PUTHUPARIYARAM, PALAKKAD**
**R1 BY ADV. SRI.RAJESH SIVARAMANKUTTY R1 BY ADV. SRI.T.SETHUMADHAVAN SR.**
**THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 30-072019, THE COURT ON 30-08-2019 DELIVERED THE FOLLOWING:**
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## **A.HARIPRASAD &**
## **R.NARAYANA PISHARADI, JJ.**
**************************
R.F.A.No.595 of 2016
---------------------------------------------Dated this the 30[th] day of August, 2019
## **J U D G M E N T**
## **R.Narayana Pisharadi, J**
The appellants are the defendants in the suit O.S No. 3 of 2009 on the file of the Court of the Additional Subordinate Judge, Palakkad. The respondent is the plaintiff in the suit.
2. The suit was filed by the respondent for specific performance of Ext.A1 agreement. The trial court decreed the suit. The defendants have come up in appeal.
3. The material averments in the plaint are as follows: The first defendant is the owner of the plaint schedule property. Ext.A1 agreement for sale of that property was executed on 22.05.2007 between the plaintiff and the first defendant. The consideration fixed was Rs.1,00,000/- per cent. The property had to be measured and the actual extent had to be ascertained. The plaintiff paid Rs.25,00,000/- as advance. As
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the first defendant was abroad, the amount was paid to the second defendant who is the brother-in-law of the first defendant. The agreement was sent to the first defendant who was abroad and it was signed by him. As per the agreement, the electric line passing through the property had to be removed and the expenses for the same had to be shared by the parties. If the electric line was not removed, the first defendant was bound to sell the property excluding that portion of the land as specified in the agreement. The first defendant had also the obligation to show the documents relating to the property to the plaintiff and convince him about them. The first defendant did not discharge his obligations under the agreement. He committed breach of the terms of the agreement. The plaintiff was always ready and willing to perform his part of the contract. The defendants informed the plaintiff that they were not ready to sell the property to him. Hence the suit for granting a decree for specific performance of Ext.A1 agreement.
4. The defendants filed joint written statement denying the averments in the plaint with regard to the recitals and conditions contained in Ext.A1 agreement. They also denied the other
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allegations raised against them. They denied the existence of a property as described in the plaint schedule. They alleged that it was the plaintiff who committed breach of the terms of the contract and that they had sent a notice to the plaintiff rescinding the contract. The defendants also alleged that the plaintiff had no financial capacity to pay the balance amount of sale consideration.
5. The trial court framed necessary issues. The most important issue for consideration was whether the plaintiff was ready and willing to perform his part of the contract. During the trial, the plaintiff was examined as PW1 and Exts.A1 to A3 documents were marked on his side. The first defendant was examined as DW1 and Exts.B1 to B13 documents were marked on his side. The commission reports and plan were marked as Exts.C1, C2 and C2(a).
6. The trial Court held that the first defendant had failed to discharge his obligations under the contract and that the plaintiff succeeded in proving that he was always ready and willing to perform his part of the contract. The trial court also held that time was not the essence of Ext.A1 agreement and that the
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plaintiff is entitled to get a decree for specific performance of Ext.A1 agreement and decreed the suit.
7. Before we consider the merits of the appeal, we may take note of the fact that an application as I.A.No.2875/2016 is filed by a third party (hereinafter referred to as 'the petitioner') for impleading him as supplemental second respondent in the appeal. This application is filed by the power of attorney holder of the petitioner. In the affidavit filed by the power of attorney holder of the petitioner in support of this application, it is stated as follows: The petitioner is a Director of the company by name “Asian Natural Gas Resources Private Limited” (hereinafter referred to as 'the company'). There were business transactions between the company and the plaintiff. The plaintiff owed an amount of Rs.646,64,212/- to the company in connection with supply of coal to him. In discharge of that liability, the plaintiff had issued six cheques but they were dishonoured on the ground that there was no sufficient amount in the account of the plaintiff. There are litigations pending against the plaintiff in the courts at Indore. The plaintiff approached the petitioner to settle the debt due to the company by transferring the property
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involved in the suit O.S.No.3/2009. Then, the company agreed to pay Rs.75,53,000/- to the plaintiff to enable him to deposit the balance sale consideration in the court. On 23.01.2016, the company transferred a total amount of Rs.75,53,000/- to the bank account of the plaintiff by way of six cheques drawn in his favour. The company also transferred a further amount of Rs.34,47,000/- to the plaintiff by way of four cheques. The plaintiff executed a memorandum of understanding with the company incorporating the terms and conditions of the sale of the property to the petitioner. The presence of the petitioner, who has paid an amount of Rs.1,10,00,000/- to the plaintiff, is absolutely necessary for an effective adjudication of the case.
8. The plaintiff filed counter affidavit in I.A.No.2875/2016 opposing the prayer for impleading the petitioner, who is a stranger to Ext.A1 agreement, as party to the appeal.
9. Learned counsel for the petitioner has submitted that the disputes between the company and the plaintiff had been referred to arbitration and that the arbitrator has passed an award in favour of the company to the effect that the company
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is entitled to realise a total amount of Rs.1,10,00,000/- from the plaintiff. Learned counsel has also contended that it is the money, which was transferred to the bank account of the plaintiff by the company, that was deposited by the plaintiff in the court towards balance sale consideration.
10. Learned counsel for the respondent/plaintiff has submitted that the plaintiff has filed application for setting aside the award passed by the arbitrator.
11. In a suit relating to property, in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest in the subject matter of the litigation. Necessary parties are those persons in whose absence no decree can be passed by the court or parties who have a right to get some relief against some party in respect of the controversy involved in the proceedings. Proper parties are those whose presence before the court would be necessary in order to enable the court to effectually and completely adjudicate upon and settle all the questions involved in the suit although no relief in the suit is claimed against such person. Impleading a third party can be allowed only if the court is
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satisfied that the presence of the party to be added would be necessary to enable the court to effectually and completely adjudicate upon and settle all questions involved in the suit.
12. We are not convinced that the petitioner is a necessary party or proper party to the appeal. The petitioner is a stranger to Ext.A1 agreement. He is not a person who has subsequently entered into any agreement with the first defendant, who is the owner of the property, for purchasing the property. Even if it is accepted that he has entered into an agreement with the plaintiff, who is not the owner of the property, for purchase of the property, it does not create any interest or charge upon the property in his favour. Since the plaintiff is not the owner of the property, there is not even an obligation annexed to the ownership of the property in favour of the petitioner. In order to decide the merits of the claim of the plaintiff for granting a decree for specific performance of Ext.A1 agreement, the presence of the petitioner is not necessary. Even if the petitioner has transferred amount to the bank account of the plaintiff to enable the plaintiff to deposit the balance sale consideration in the court, it does not mean that
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the amount now lying in deposit in the court belongs to the petitioner. Once the amount is transferred to the bank account of the plaintiff, the plaintiff had become the owner of that money.
13. It is also to be noted that, as per the averments in the affidavit filed in support of the application I.A.No.2875/2016, it was not the petitioner who transferred the amount of Rs.1,10,00,000/- to the plaintiff but it was the company. The agreement for purchase of the property was entered into with the plaintiff not by the petitioner but by the company. The award passed by the arbitrator is not in favour of the petitioner but in favour of the company. The application I.A.No.2875/2016 is filed not by the company but by the petitioner in his personal capacity. The person sought to be impleaded in the appeal is not the company but the petitioner who is only a director of the company. Moreover, it is not disputed that the company itself is now under liquidation and that a liquidator has been appointed.
14. It is only in exceptional circumstances, a total stranger can be impleaded in an appeal. The impleadment must
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## be to facilitate determination of the issues between the original parties to the suit (See **Subhash v. Patharam Educational and Cultural Society : 2012(4) KLT 33** ).
15. In the aforesaid circumstances, we find that the petitioner is neither a necessary party nor a proper party to the appeal and that the prayer for impleading him in the appeal cannot be allowed. The application I.A.No.2875/2016 is liable to be dismissed.
16. Now, we shall consider the merits of the appeal. The first defendant is the owner of the plaint schedule property. Ext.A1 agreement dated 22.05.2007 was executed by the plaintiff and the first defendant for sale of the plaint schedule property to the plaintiff. The plaintiff paid an amount of Rs.25,00,000/- to the first defendant as advance towards sale consideration. There is no dispute with regard to these facts.
17. A perusal of Ext.A1 agreement would show that the first defendant had the obligation to get the property measured at his expenses before execution of the sale deed. It was also agreed that the first defendant shall show the original documents relating to the property including basic documents,
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tax receipts, possession certificate and location certificate to the plaintiff and convince him of those documents. There is also a stipulation in the agreement that the electric line passing through the property shall be removed at the expenses of both parties. It was further agreed that if the electric line could not be removed from the property, the property extending from the road leading to the properties of Sheriff and Sakeer till the National Highway on the northern side shall be sold to the plaintiff. As per the agreement, the transaction had to be completed within the date 22.11.2007.
18. The first defendant did not take any steps to get the property measured. He also did not show the documents relating to the property to the plaintiff. He also did not take any steps for removal of the electric line passing through the property. As he was the owner of the property, he should have made an application to the Kerala State Electricity Board for removing the electric line. He did not take any steps in that regard. There can be no dispute with regard to these facts. The defendants had sent Ext.B7 lawyer notice dated 18.01.2008 to the plaintiff rescinding the contract. There is no averment in
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Ext.B7 lawyer notice that the first defendant had discharged any of the aforesaid obligations which he was bound as per Ext.A1 agreement. Therefore, there can be no doubt with regard to the fact that the first defendant had committed breach of the terms of the contract by not discharging the obligations under it. Learned senior counsel for the appellants has also not raised any contention that the first defendant had discharged his obligations under the contract. There can be no doubt with regard to the fact that it was the first defendant who committed breach of the terms of the contract.
19. The defendants had raised a plea before the lower court that time was the essence of the contract. Learned senior counsel for the appellants submitted that no such plea is being pursued before this Court in the appeal. Even otherwise, there is no evidence to find that time was the essence of Ext.A1 agreement executed between the plaintiff and the first defendant.
20. The only obligation of the plaintiff under Ext.A1 agreement was to pay the balance amount of sale consideration to the first defendant at the time of the registration of the
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document. The only contention raised by the appellants before this Court during the hearing of the appeal is that the plaintiff had failed to plead and prove that he was always ready and willing to perform his part of the contract by paying the balance amount of sale consideration. The appellants have contended that the plaintiff had no financial capacity to pay the balance amount of sale consideration and that he was never ready with the amount. Though several other contentions are raised in the memorandum of appeal, none of them was urged before this Court during the hearing.
21. At this juncture, we take note of the fact that during the trial of the case, the plaintiff had taken out a commission to measure the property. The Advocate Commissioner measured the property with the assistance of the Taluk Surveyor and submitted a report and plan. Ext.C2(a) is the plan prepared by the surveyor after measuring the property. The defendants had not filed any objection to this plan. As per Ext.C2(a) plan, the extent of the property, which was agreed to be sold to the plaintiff under Ext.A1 agreement, is 100.53 cents. There is no dispute with regard to the extent of the property ascertained as
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per Ext.C2(a) plan.
22. The sale consideration fixed as per Ext.A1 agreement is Rs.1,00,000/- per cent. Therefore, the total sale consideration payable by the plaintiff comes to Rs.1,00,53,000/-. He had paid Rs.25,00,000/- as advance towards sale consideration. The balance amount payable by him was Rs.75,53,000/-.
23. Ext.C2(a) plan was filed in the trial court on 05.03.2013. Learned senior counsel for the appellants contended that the plaintiff had to prove that, atleast from the date 05.03.2013, he was ready to pay the amount of Rs.75,53,000/-.
24. Section 16(c) of the Specific Relief Act, 1963 (hereinafter referred to as 'the Act') provides that specific performance of a contract cannot be enforced in favour of 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 terms the performance of which has been prevented or waived by the defendant. Explanation (ii) to Clause (c) of Section 16 of
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the Act states that the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.
25. Clause (c) of Section 16 of the Act lays down the conditions precedent to the enforcement of specific performance of a contract. Section 16(c) of the Act is couched in a negative form. It mandates that specific performance of a contract cannot be enforced in favour of a person who has failed to aver and prove his readiness and willingness to perform his part of the contract. The plaintiff has the obligation not only to aver that he has always been ready and willing to perform the essential terms of the contract but also to prove so.
26. Continuous readiness and willingness on the part of the plaintiff to perform his part of the contract is a condition precedent to grant the relief of specific performance. To adjudge whether the plaintiff has been ready and willing to perform his part of the contract, the court must take into consideration his conduct prior to and subsequent to the filing of the suit along with other attendant circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and
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was always ready and willing to perform his part of the contract. 27. There is a specific averment in the plaint that the plaintiff has always been willing to perform his part of the contract and that he had kept ready the balance amount of sale consideration with him. There are also averments in the plaint that he had informed the first defendant that he was ready to buy the property by paying the balance sale consideration.
28. In this context, the distinction between “readiness” and “willingness” may be noticed. The words "ready" and "willing" imply that the person was prepared to carry out the terms of the contract. The distinction between "readiness" and "willingness" is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness (See **J. P. Builders v. Ramadas Rao: (2011) 1 SCC 429)** .
29. In the instant case, there is evidence to find that the plaintiff has always been willing to buy the property. The very fact that he had taken out a survey commission and got the property measured indicates that he was willing to buy that property. Therefore, the only question remains to be considered
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is whether the plaintiff has been ready to perform his part of the contract, that is, whether he was ready to pay the balance amount sale consideration to the first defendant.
30. The plaintiff was examined as PW1. He had stated in examination-in-chief that he had the resources to pay the requisite sale consideration and that he was even prepared to deposit that amount in the court. He has stated in the crossexamination that he had arranged the amount for payment of balance sale consideration and that the amount was with him in cash as well as deposit in bank. He further stated that there was almost three to four crores rupees in the bank account. He denied the suggestion that he had no financial capacity to pay the balance amount of sale consideration.
31. The first defendant was examined as DW1. He has stated in examination-in-chief that the plaintiff had not kept ready with him the balance amount of sale consideration.
32. The lower court has found that since the defendant had committed breach of the terms of the contract, as he did not discharge the obligations under Ext.A1 agreement, it was not necessary for the plaintiff to prove that he was always ready
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and willing to perform his part of the contract.
33. Learned senior counsel for the appellants contended that even in a case where the seller has committed breach of the terms of the contract for sale of the property, the buyer has to establish that he was ready and willing to perform his part of the contract. Learned senior counsel would contend that, even if the seller had rescinded the contract but if the buyer had kept alive the contract, he has to prove his readiness and willingness to perform his part of the contract.
34. In **International Contractors Ltd. v. Prasanta Kumar Sur : AIR 1962 SC 77** , it was held by the Supreme Court that in certain circumstances once a party to a contract has repudiated a contract, it is not necessary for the other party to tender the amount payable under the contract in the manner provided in the contract in order to successfully claim specific performance of the contract. This two-Judge Bench decision of the Supreme Court was subsequently clarified by a three-Judge Bench in **Jawahar Lal Wadhwa v. Haripada Chakroberty : AIR 1989 SC 606** and it was held that the aforesaid decision nowhere lays down that where one party to a contract
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repudiates the contract, the other party to the contract who claims specific performance of the contract is absolved from his obligation to show that he was ready and willing to perform the contract. It was held that it is settled in law that where a party to a contract commits an anticipatory breach of the contract, the other party to the contract may treat the breach as putting an end to the contract and sue for damages, but in that event he cannot ask for specific performance. The other option open to the other party, namely, the aggrieved party, is that he may choose to keep the contract alive till the time for performance and claim specific performance but, in that event, he cannot claim specific performance of the contract unless he shows his readiness and willingness to perform the contract. It was clarified that the decision in **International Contractors** (supra), properly analysed, only lays down that in certain circumstances it is not necessary for the party complaining of an anticipatory breach of contract by the other party to offer to perform his remaining obligations under the contract in order to show his readiness and willingness to perform the contract and claim specific performance of the said contract.
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## 35. In **Muhammed v. Chandrika : 2010 (3) KHC 233 :**
**2010 (3) KLT 306** , a learned Single Judge of this Court has held as follows:
_“Even if the defendant has failed to perform a term in the contract that does not automatically entitle the plaintiff to get specific performance of a contract. On the failure of the plaintiff to prove his readiness and willingness, the suit for specific performance must fail, notwithstanding the failure to perform a term of the contract by the defendant. In the process of establishing that the plaintiff was ready and willing to perform his part of the contract and that he has always been ready and willing to perform the essential terms of the contract, the plaintiff may rely on the breach committed by the defendant. Depending on the facts and circumstances of each case, the contention raised by the defendant that the plaintiff failed to perform a particular term in the contract could be rejected by the Court on a finding that the defendant committed breach in respect of that particular term in the contract. That does not mean that proof of breach of any of the terms of the contract by the defendant is proof of readiness and willingness on the part of the plaintiff as provided in clause (c) of Section 16. Readiness and willingness on the part of the plaintiff has to be independently established to_
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_enable him to get a decree for specific performance. Of course, in arriving at the conclusion as to whether the plaintiff has proved his readiness and willingness, the Court could take note of a breach committed by the defendant. That is in the realm of appreciation of evidence. It cannot be said that proof of breach committed by the defendant would result in proof of the readiness and willingness on the part of the plaintiff. Section 16 is couched in a negative form. It mandates that specific performance of a contract cannot be enforced in favour of a person who failed to aver and prove his readiness and willingness to perform his part of the contract. Breach of contract or any term of the contract by the defendant does not find a place in Section 16. In my view, the breach committed by the defendant has to be considered by the Court only in the process of arriving at a conclusion on facts as to whether the plaintiff has proved his readiness and willingness”._
## 36. In **Man Kaur v. Hartar Singh : (2010) 10 SCC 512** ,
the Supreme Court has held that, even assuming that the defendant had committed breach, if the plaintiff fails to aver in the plaint or prove that he was always ready and willing to perform the essential terms of contract which are required to be performed by him (other than the terms the performance of
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which has been prevented or waived by the defendant), there is a bar to specific performance in his favour. Therefore, the assumption that readiness and willingness on the part of the plaintiff is something which need not be proved, if he is able to establish that the defendant refused to execute the sale deed and thereby committed breach, is not correct. On placing reliance upon **Man Kaur** (supra), a Division Bench of this Court, in **Rafeeq v. Abdul Bari : 2018 (2) KLT 651** , has approved the decision in **Muhammed** (supra).
37. In the instant case, the plaintiff had kept alive the contract even after receipt of the lawyer notice from the defendants rescinding the contract. He had taken out a survey commission and got measured the property and ascertained the extent of the property. Atleast from that stage onwards, he should have been ready to pay the balance sale consideration.
38. Though the plaintiff had deposed before the court below that he was ready to deposit the balance amount of sale consideration in the court, no amount was deposited by him. He had stated that there was three to four crores of rupees in his bank account. The bank pass book or the statement of account
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in the bank was not produced by him.
39. Learned senior counsel for the respondent contended that the plaintiff is not expected to keep the amount in bank for several years. But, in the instant case, bank pass book or statement of account in the bank should have been produced to prove that atleast at some point of time the amount required for payment of balance sale consideration or atleast a substantial portion of it was in the bank. Moreover, the plaintiff had deposed regarding the availability of the amount in the bank.
40. The copy of the balance sheet of the company, of which the plaintiff was the Managing Director, was produced before the court below. The plea raised by the plaintiff was that he could have arranged the money from the company. But, he has admitted that there was no cash balance to the extent of the balance sale consideration in the account of the company. He also admitted that it was not possible to withdraw any amount from the company for his personal use. At this juncture it is to be noted that Ext.A1 agreement was executed by him in his personal capacity though he would assert at the time of the trial of the case that the property was intended to be purchased
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for establishment of a godown for the company.
41. Learned senior counsel for the respondent contended that, when examined as DW1, the first defendant had admitted about the financial capacity of the plaintiff to purchase the property. DW1 has stated on cross-examination that the plaintiff has got money and that he knew that the plaintiff was a person who has got the capacity to purchase the property. This statement made by DW1 in the witness box cannot be taken out of context and read in isolation. This statement of DW1 does not amount to an admission of the financial capacity of the plaintiff to pay the balance sale consideration. The previous statement made by DW1 was that it was the husband of his wife's sister who introduced the plaintiff to him. Therefore, it is evident that DW1 made the aforesaid statement regarding the financial capacity of the plaintiff to purchase the property in the context of the introduction of the plaintiff to him by the husband of his wife's sister. Normally, the owner of a property would enter into agreement for sale of the property only with a person having some financial credibility. It does not mean that he has admitted the readiness of the buyer to pay the amount when
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payment is required to be made.
42. The conduct of the plaintiff after passing the decree in the suit is also relevant. The suit was decreed on 11.08.2015. The direction given in the decree was that the plaintiff shall deposit the balance amount of sale consideration in the court within a period of 30 days from that date. However, on 09.09.2015, the plaintiff filed an application for extension of time for depositing the amount. The aforesaid application was dismissed on 09.12.2015 as infructuous. The plaintiff had not deposited any amount in the court towards balance sale consideration before the date 09.12.2015. He again filed an application on 04.01.2016 seeking extension of time till 30.01.2016 for deposit of the amount. He deposited the amount of balance sale consideration in the court on 25.01.2016. Though the suit was decreed on 11.08.2015 with a specific direction that the plaintiff shall deposit the balance amount of sale consideration within a period of 30 days, he could deposit the amount only on 25.01.2016. This indicates that the amount was not ready with him at the time of passing the decree or immediately thereafter.
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43. In the light of the discussion above, we have no hesitation to find that the plaintiff had failed to prove that he had been ready to pay the balance sale consideration of Rs.75,53,000/-, at least from the date 05.03.2013, that is, the date of filing of the commission report ascertaining the actual extent of the property, till the date of the decree. It is not even proved that the plaintiff could have arranged or made available the balance amount of sale consideration during that period. It follows that he is not entitled to get the discretionary relief of specific performance of contract. The trial court has, in our opinion, gone wrong in decreeing the suit for specific performance of Ext.A1 agreement.
44. The plaintiff has not claimed any relief for return of the advance amount paid by him. Section 22(2) of the Act states that no such relief shall be granted by the court unless it has been specifically claimed. Therefore, the plaintiff is not even entitled to get a decree for return of the advance amount paid by him.
45. In the result, the appeal is allowed. The judgment and decree of the lower Court in O.S.No.3 of 2009 are set aside and
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the suit is dismissed. No costs throughout.
46. All pending interlocutory applications, including the application I.A.No. 2875 of 2016 for impleading the third party in the appeal, stand dismissed.
(sd/-)
**A.HARIPRASAD, JUDGE**
(sd/-)
**R.NARAYANA PISHARADI, JUDGE**
jsr/21/08/2019
True Copy
PS to Judge