Anappath Parakkattu Vasudevakurup and others v. C. Haridasan

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE P.SOMARAJAN** **WEDNESDAY, THE 3[RD] DAY OF NOVEMBER 2021 / 12TH KARTHIKA, 1943** **RFA NO. 63 OF 2009** **AGAINST THE JUDGMENT & DECREE IN OS 205/2006 OF SUB COURT, TIRUR** ## **APPELLANTS/DEFENDANTS:** - **1 ANAPPATH PARAKKATTU VASUDEVAKURUP, S/O.JANAKI AMMA, TIRURANGADI TALUK, CHELEMBRA AMSOM DESOM, PO.CHELEMBRA.** - **2 VAILASSERI PADMINI AMMA, 64 YEARS, W/O.VASUDEVAKURUP, TIRURANGADI TALUK, CHELEMBRA AMSOM DESOM, PO.CHELEMBRA.(DIED) (LR'S IMPLEADED)** - **ADDL.A3 JYOTHI V., AGED 52 YEARS, 'SOPANAM', POST CHELEMBRA , MALAPPURAM DISTRICT, PIN - 673634** - **ADDL.A4. MANOJ V., AGED 50 YEARS, 'REVATHY', POST CHELEMBRA , MALAPPURAM DISTRICT, PIN - 673634** - **ADDL.A5. PREETHY V,AGED 47 YEARS, 'PANCHAMI', POST THENHIPALAM , MALAPPURAM DISTRICT, PIN - 673636** **ADDITIONAL APPELLANTS 3 TO 5 ARE IMPLEADED BEING LEGAL HEIRS OF DECEASED SECOND APPELLANT VIDE ORDER DATED 01/11/2021 IN IA 2/1019.** ## **BY ADV SRI.R.RAMADAS** ## **RESPONDENT/PLAINTIFF:** **C.HARIDASAN, S/O KUTTAYI, KOZHIKODE TALUK, VELIPRAM AMSOM DESOM,, PO.RAMANATTUKARA.** **BY ADVS. SRI.K.JAYAKUMAR SRI.P.B.KRISHNAN SRI.P.M.NEELAKANDAN SRI.S.NITHIN ANCHAL SRI.SABU GEORGE SRI.P.B.SUBRAMANYAN** **THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON** **03.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** RFA No.63 of 2009 2 ## **C.R.** ## **JUDGMENT** Whether the court can dictate the terms and conditions of contract in a suit for specific performance by directing payment of enhanced sale consideration and what is the jurisdiction vested with the court under Section 20 of the Specific Relief Act, 1963 (hereinafter referred to as the 'Act')are the questions came up for consideration, besides the appreciation of evidence in the disputed issues involved in the suit. 2. A decree for specific performance of contract was granted by the trial court by refixing the sale consideration at Rs.11,000/- per cent as against Rs.8,750/- agreed into by the parties in the contract for sale, by relying on the decision rendered by the Apex Court in **Pratap** **Lakshman Muchandi and Ors. v. Shamlal Uddavadas** RFA No.63 of 2009 3 **Wadhwa and Ors.(AIR 2008 SC 1378)** , that too, without any consensus either from the appellant or the respondent. 3. The court below did not understand the legal position laid down by the Apex Court in **Pratap Lakshman Muchandi'** s case (supra) in its correct perspective. There cannot be any change in the terms and conditions arising out of a contract for sale or obligation annexed to it at the instance of the court. The court cannot dictate or deviate from any term or condition enumerated in the contract for sale between the parties or agreed into by the parties and as such, it is not within the jurisdiction of the court to re-fix the sale consideration as against what is agreed into by the parties though it is within the jurisdiction of the court under Section 20 of the Act to work out equity by ordering any additional sum to the plaintiff, when specific performance is RFA No.63 of 2009 4 denied on account of the discretion to be exercised under that provision. That does not mean that the court can vary or alter or substitute the terms and conditions of the contract while enforcing it or while granting specific performance. No such authority is vested with the court to deviate from the terms and conditions either in substitution or in addition or to give enhanced sale consideration as against what is agreed into by the parties. At the same time, by exercising the jurisdiction under Section 20 of the Act, the court is well equipped to order any sum to be paid to the plaintiff instead of granting specific performance so as to strike a balance based on equity, good conscience and fairness, the basic principles which govern the special provision, I would say the extraordinary provision, Section 20 of the Act, an exception to the general principle to grant decree, when it is RFA No.63 of 2009 5 found lawful to do so. The discretion that can be exercised under Section 20 of the Act though resting on the principles of equity, good conscience and fairness, has to be exercised not to grant specific performance even if it is lawful to do so, more specifically the discretion has to exercised in a negative way not to grant the relief of specific performance. Primarily, the discretion has to be exercised so as to compensate the plaintiff by striking a balance by ordering payment instead of granting a decree of specific performance. Section 20 of the Act reads as follows: ## “ **20. Discretion as to decreeing specific** ## **performance** (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance: RFA No.63 of 2009 6 (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its nonperformance would involve no such hardship on the plaintiff; or (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. **Explanation 1:** Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). **Explanation 2:** The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party.” 4. A mere perusal of the section shows that RFA No.63 of 2009 7 nothing has been incorporated or even mentioned anywhere in the section so as to exercise discretion to award any amount to the defendant while ordering specific performance. The section deals only with the power to reject the grant of specific performance by exercising the discretion in a negative way and to compensate the plaintiff for not granting the said relief. There is nothing in the section enabling the court to impose additional burden or liability on the plaintiff when specific performance is ordered. 5. A three Judge Bench of the Apex Court has laid down the nature of discretion to be exercised under Section 20 of the Act in **Her Highness** **Maharani Shantidevi P.Gaikwad v. Savjibhai** **Haribhai Patel and Others (AIR 2001 SC 1462)** and also by another Bench of the Apex Court in **A.C.Arulappan v. Smt.Ahalya Naik (AIR 2001 SC** **2783)** . A Division Bench of this Court also had the RFA No.63 of 2009 8 occasion to consider the said question in **Antony K.O and Another v. M.K.Krishnankutty Menoki and Others (2017 (1) KHC 479 = 2017 (1) KLJ 357)** in the following lines: “The question at what time the Court has to exercise its discretion is also well evident from a mere reading of Section 20 of the Specific Relief Act, which would arise only after finding that it is lawful to grant the relief sought for in favour of the plaintiff. In all other provisions of law wherein discretion could be exercised stands for exercising discretion in a positive way for granting some relief to the parties and not for refusing any relief. But, the discretionary power incorporated and embodied under Section 20 stands on a different footing in which the Court has to exercise discretion not for granting the relief, but for refusing the same. It has got its own character and peculiarity, apart from other provisions contained in other laws for the time being in force.” 6. The discretion that can be exercised under Section 20 of the Act being a negative one not to grant specific performance, the court must strike a balance by compensating the plaintiff in terms of money so as to bring him back to his original position to the extent possible, by applying the principles behind it i.e. equity, good conscience RFA No.63 of 2009 9 and fairness. Hence, the compensation or any amount that can be ordered to the plaintiff must always be understood as the compensation for not granting specific performance on account of the discretion under Section 20 of the Act. In other words, the discretion vested with the court under Section 20 of the Act can be exercised firstly not to grant specific performance even if it is found to be lawful to do so by working out equity, good conscience and fairness and secondly, when such discretion is exercised not to grant specific performance, to order compensation or any sum so as to mitigate the loss, if any sustained by the plaintiff on account of the exercise of discretion under that provision. 7. The extent of discretion that can be exercised under Section 20 of the Specific Relief Act can also be gathered from the decision in **Tejram v. Patirambhau (AIR 1997 SC 2702** )and in RFA No.63 of 2009 10 **Kanshi Ram v. Om Prakash Jawan and Others (AIR** **1996 SC 2150)** , wherein while refusing to grant specific performance the Apex Court allowed the appeal conditionally by directing payment of Rs.10 lakhs to the plaintiffs with a condition that the failure would visit with dismissal of the appeal confirming the decree of specific performance. Reliance was also placed on **S.Rangaraju Naidu v. S.Thiruvarakkarasu (AIR 1995 SC 1769,** wherein the long pendency of the proceedings and the enhancement of value of property were taken into consideration and reversed the decree of specific performance by granting compensation to the plaintiff instead of the relief of specific performance. The relevant portion of the judgment is extracted below for reference: “The question that arises for consideration is : whether it would just, fair and equitable to grant the decree for specific performance ? It is true that the rise in prices of the property during the pendency of the suit may not be the sole consideration for refusing to decree the RFA No.63 of 2009 11 suit for specific performance. But it is equally settled law that granting decree for specific performance of a contract of immovable property is not automatic. It is one of the discretion to be exercised on sound principles. When the Court gets into equity jurisdiction, it would be guided by justice, equity good conscience and fairness to both the parties. Considered from this perspective, in view of the fact that the respondent himself had claimed alternative relief for damages, we think that the Courts would have been well justified in granting alternative decree for damages, instead of ordering specific performance which would be unrealistic and unfair.” 8. In yet another case, **Azhar Sultana** **v.B.Rajamani and Ors (AIR 2009 SC 2157** , the Apex Court had directed to pay a sum of Rs.60,000/- to the plaintiff inclusive of advance amount paid by exercising discretion under Section 20 of the Act not to grant specific performance. 9. In yet another case – **Gobind Ram v. Gian** **Chand (AIR 2000 SC 3106)** , the Apex Court had applied the very same ratio by referring the decision rendered in **Damacherla Anjaneyulu and** **Another v. Damacheria Venkata Seshaiah and Another** **(AIR 1987 SC 1641)** , in which the Apex Court had RFA No.63 of 2009 12 ordered payment of Rs.1,25,000/- to the plaintiff instead of executing the sale in performance of the contract for sale on the reason that the defendant had improved the property considerably by making construction over it. 10. The principles behind under Section 20 of the Act i.e. equity, good conscience and fairness were also applied by the Apex Court in **Gobind Ram'** s case (supra) by ordering additional amount to be paid by the plaintiff to the defendant while decreeing specific performance i.e. an additional amount was ordered to be paid by the plaintiff to the defendant so as to get specific performance, by applying the principles under Section 20 of the Act - “equity, good conscience and fairness”. It cannot be construed as the exercise of power under Section 20 of the Act, but should be understood as based on the principles of “equity, good conscience and fairness” and moulding the RFA No.63 of 2009 13 relief based on it, for which necessarily, before imposing additional burden on the plaintiff so as to get the relief of specific performance, his consent should be obtained or a conditional decree has to be passed by specifying a time limit so that the plaintiff can exercise his option either to accept or to reject it, otherwise it would amount to imposing additional burden on the plaintiff which was not dealt with under Section 20 of the Act or agreed into by the parties. Hence, it cannot be recognized as a statutory exercise of power under Section 20 of the Act, though the very same principle embodied thereunder can be applied so as to strike a balance on account of the enhanced value of property and to mould the relief accordingly. The conditional decree passed by the Apex Court in **Pratap Lakshman** **Muchandi** 's case (supra) assumes importance at this juncture. The principle of moulding the relief RFA No.63 of 2009 14 shall not be applied bypassing the normal rule that the relief granted to the plaintiff for specific performance of the contract shall not be subjected to any burden other than the one covered by the contract, unless it was consented to by the plaintiff or in the alternative a conditional decree has to be passed giving an option to the plaintiff either to accept or to reject the additional burden imposed within a specified time by specifying its resultant effect. The principle embodied under Section 12 of the Act giving option to the plaintiff when the contract sought to be performed in part only, assumes importance at this juncture. In fact, the very same principle was applied by the Apex Court in **Pratap Lakshman Muchandi** 's case (supra) by passing a conditional decree of specific performance with a direction to make additional payment within the time specified. The relevant portion of the said judgment is RFA No.63 of 2009 15 ## extracted below for reference: “Therefore, in order to do complete justice, it is directed that the appellants in C.A.No.728 of 2002 shall hand over the possession of the property in question to the respondent-plaintiffs in the event of the respondent-plaintiffs paying a sum of RS.1,10,000/-, the original amount agreed in the agreement for sale and over and above a sum of Rs.5,00,000/- i.e. Rs.6,10,000/- within a period of three months from today” (emphasis supplied) 11. The expression used “in the event of” makes it clear that the concession given is conditional and it shall not be taken as an authority vested with the court to deviate from the terms agreed into by the parties by enhancing the sale consideration, though it is within the jurisdiction of the court to award additional amount so as to strike a balance based on the principles of 'equity, good conscience and fairness'. 12. In the instant suit, what is decreed by refixing the sale consideration is not permissible. But during the course of argument, RFA No.63 of 2009 16 both the counsel fairly conceded that the contract for sale was executed on 7/8/2005 when defendant No.1 and 2 were in financial crisis. What is received by way of advance under the contract comes to only Rs.10,000/-, less than 4% of the sale consideration of Rs.3,23,750/-. The right held by the defendant over the property is only a kuzhikanam right. As such, it is not a fit case wherein discretion under Section 20 of the Specific Relief Act can be exercised to decree specific performance. But, taking note of the fact that the plaintiff took pain to deposit the entire balance sale consideration at the enhanced rate, which comes to Rs **.** 3,97,000/- excluding the advance in court in terms of the decree passed by the trial court, the learned counsel for the appellant made a fair concession to pay an additional amount of Rs.3,00,000/- to the plaintiff in addition to the advance amount. The offer made by the counsel RFA No.63 of 2009 17 reflects a proper balance, hence accepted. In the result, the appeal is allowed in part. The decree granting specific performance is hereby set aside and granted a decree for recovery of an amount of Rs.3,10,000/-(Rupees Three Lakhs Ten Thousand only)from the defendants jointly and severally and charged upon the plaint schedule property. It shall be paid or deposited within three months, failing which it will carry interest @ 6% per annum from the date of decree till its realization. It is made clear that the amount deposited by the plaintiff shall be released to the plaintiff with interest, if any accrued thereof. **==> picture [49 x 13] intentionally omitted <==** ## **P.SOMARAJAN** ## **JUDGE** sv