High Court of KeralaSingle JudgeThe appeal is dismissed. No costs.

Karthikeyan v. Janardhanan

Case / Petition Number:RSA.No. 1157 of 2003

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • P. Somarajan
Judgment Date
2019-06-12
Court Decision / Holding
The appeal is dismissed. No costs.
Final Disposition
The appeal is dismissed. No costs.

Parties to the Case

Appellants / Petitioners

  • Karthikeyan, S/o Krishnan

Respondents

  • Janardhanan, S/o Krishnan

Legal Representation & Advocates

Counsels for Petitioners

  • • Sri.T.C.Suresh Menon
  • • Smt.M.R.Valsa
  • • Sri.K.R.Sreekanth
  • • Smt.Geethisha G.

Counsels for Respondents

  • • Sri.S.Radhakrishnan

Case Synopsis & Summary

This Regular Second Appeal (RSA No.1157 of 2003) before the Kerala High Court arises from a suit for damages totaling Rs.25,965/- incurred by the plaintiff, Karthikeyan, in procuring title to a property via Ext.A10 (sale certificate) under Ext.A2 (agreement of sale). The Ext.A2 agreement, entered with the defendant Janardhanan, envisaged that the owner would discharge any liability arising from a decree to be passed in a pending suit. The defendant allegedly failed to discharge such liability, prompting the plaintiff to purchase the property at a court auction and spend Rs.21,000 plus registration and stamp duties, culminating in the claimed Rs.25,965/-. The trial court partly allowed damages; the First Appellate Court set aside that decree and dismissed the suit. The plaintiff challenges the appellate decision. The defendant contends that Ext.A2 was executed under vitiating circumstances (threat and coercion) and that no amount was paid at the time; the property subject matter was in dispute, and the plaintiff purchased it from a bidder, not from the defendant. The High Court notes that the burden to prove vitiating circumstances lies on the alleging party and rejects reliance on Ahamad v. Gangadharan, which was overruled by Velayudhan v. Velayudhan. It concludes the remedy lies in recovery of actual loss, not under specific contract notions, and ultimately dismisses the appeal with no costs.

Provisions of Law Cited

Section 73 of Indian Contract Act, 1872Section 74 of Indian Contract Act, 1872Section 55 of Indian Contract Act, 1872Section 56 of Indian Contract Act, 1872

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant-plaintiff contends Ext.A2 created an obligation on the defendant to discharge any and all liabilities relating to the property, and that the plaintiff incurred Rs.21,000 plus registration and stamp duties in reliance on that obligation following a court sale (Ext.A10). The claim seeks recovery of the actual loss of Rs.25,965, arguing that the court sale, the threatened circumstances, and the failure to discharge liability amounted to breach or reliance on the contract terms, with the remedy rooted in actual loss rather than a mere contract-based remedy; reliance on prior authorities is subject to Velayudhan, which overruled Ahamad. The evidence shows the scribe (PW2) and witnesses (DW2, DW3) indicating negotiations occurred late at night and the agreement was not read to the parties; thus vitiating circumstances were alleged, but the court must apply the correct doctrine.【contract-related provisions discussed: Sections 55 and 56 }

Contentions of Respondents

The defendant contends Ext.A2 was entered into under threat and coercion by mediators, with no consideration paid, and that the property was part of a pending suit; he argues that there was no anticipatory breach and the plaintiff purchased the property from a bidder, not the defendant, thus not establishing a breach of contract; the remedy is misapplied as it would amount to unjust enrichment and not a contract-based remedy; the court should consider Section 56 and relevant contract principles to limit liability; reliance on Ahamad is incorrect as Velayudhan overruled it.

Cited Precedents (2)

Case NameCitationTreatmentExplanation
Ahamad v. Gangadharan1990 (1) KLT 456OverruledCited by lower courts but overruled by Velayudhan v. Velayudhan, thus not to be relied upon in this case.
Velayudhan v. Velayudhan2001 (1) KLT 392PositiveCited as the controlling authority that overruled Ahamad and guides the court's approach to vitiating circumstances and contract obligations.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.SOMARAJAN** **WEDNESDAY, THE 12TH DAY OF JUNE 2019 / 22ND JYAISHTA, 1941** **RSA.No. 1157 of 2003** **AGAINST THE JUDGMENT DECREE AND DATED 29/7/2003 IN A.S.NO.32/1999 OF SUB COURT, CHERTHALA** **AGAINST THE JUDGMENT AND DECREE DATED 07-10-1998 IN O.S.NO.345/1996 OF PRINCIPAL MUNSIFF COURT, CHERTHALA** ## **PETITIONER/RESPONDENT/PLAINTIFF:** **KARTHIKEYAN, S/O.KRISHNAN, REPRESENTED BY POWER OF ATTORNEY, AJITHA KUMARI, RESIDING AT ASWATHY BHAVANAM, OLAVAIPUMURI, THYCKATTUSSERY VILLAGE, CHERTHLA, ALAPPUZHA DISTRICT.** **BY ADVS SRI.T.C.SURESH MENON SMT.M.R.VALSA SRI.K.R.SREEKANTH SMT.GEETHISHA G.** ## **RESPONDENT/APPELLANT/DEFENDANT:** **JANARDHANAN, S/O.KRISHNAN, RESIDING AT NIKARTHIL, PANAVALLY MURI, PANAVALLY VILLAGE, CHERTHALA, ALAPPUZHA DISTRICT.** **BY ADV. SRI.S.RADHAKRISHNAN** **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 12.06.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **RSA. 1157/2003** **2** ## **JUDGMENT** A suit for damages partly allowed by the Trial Court (Prl.Munsiff Court, Cherthala) in O.S.No.345/1996. The First appeal in A.S.No.32/1999 the decree was set aside and the suit was ultimately dismissed. Aggrieved by the said decree and the judgment, the plaintiff came up with this second appeal. 2. The suit is one for recovery of an amount of Rs.25,965/- with interest being the amounts spend by the plaintiff for purchasing a property under Ext.A10 court sale, which was the subject matter of an earlier contract for sale Ext.A2, entered into by the plaintiff with the defendant. 3. The suit was contested by the defendant by submitting written statement raising a pleading that the defendant happened to execute an agreement in favour of the plaintiff without receiving any amount. _Inter alia_ it was also contended that it is the result of threat and coercion exerted by the **RSA. 1157/2003** **3** plaintiff over the defendant. At that time, the subject matter of the agreement, the immovable property was the subject matter of a pending suit which was also referred into in Ext.A2 agreement, wherein the owner of property had agreed to clear out all the encumbrance over the property and agreed to pay off all the liability over the property in accordance with the decision that may be rendered in the pending suit. But, later on the property was put in auction in execution of the decree for recovery of money, wherein the creditor bid the property with permission. Later on the plaintiff purchased the said property from the bidder. Ext.A10 is sale certificate by which one John obtained the property from whom the plaintiff purchased the property by spending an amount of Rs.21,000/-. The plaintiff claims the above said amount of Rs.21,000/- + registration charges and stamp duty etc., which according to the plaintiff comes to Rs.25,965/-. **==> picture [402 x 12] intentionally omitted <==** aforesaid amount of Rs.25,965/-, claiming that he was forced to purchase the above said property which was **RSA. 1157/2003** **4** agreed to be sold to him under Ext.A2, wherein the owner of the property/defendant had agreed to discharge the liability over the property, if any on account of the decree, that may be passed but failed to discharge, the liability which has resulted in the court sale of the said property. 5. The defendant raised a contention disputing and denying the execution of that agreement. But the pleading raised in the written statement admits that he happened to execute an agreement in favour of the plaintiff at the intervention of mediators. But advanced a case that it was executed under vitiating circumstance, threat and coercion exerted by the defendant over the plaintiff. Needless to say that when any vitiating circumstance advanced the initial burden lies on the person who alleges it and not on the person in whose favour the document was executed. As such the reliance placed on by both the Trial Court and the First Appellate Court in _**Ahamad v. Gangadharan (1990 (1) KLT 456),**_ which was overruled in _**Velayudhan v. Velayudhan (2001(1) KLT 392)**_ cannot be accepted. It is not question of mere admission of **RSA. 1157/2003** **5** signature. It is a case wherein the plaintiff has admitted execution of agreement under a vitiating circumstance and not mere admission of affixture of signature without knowing the contents or the legal consequences of the contract entered into. In proof of due execution of the agreement for sale the plaintiff has examined the scribe as PW2. In proof of the vitiating circumstance, threat and coercion, the defendant had opted to examine the witness to the agreement DW2 and DW3. During the course of examination they admitted that negotiations were started by 9 O'clock night and the agreement was executed by 2 O'clock night under the intervention of mediators. Both of them had categorically admitted that the content of the document were not read over to the parties and it was not disclosed and no amount was received at that time as stated in the agreement. If that be so, it would satisfy the circumstance under which it was brought into existence, the threat and coercion alleged by the defendant. 6. There is yet another reason is also available to non suit the plaintiff as the suit was filed for **RSA. 1157/2003** **6** getting the damages which he has assessed based on the purchase of property by spending an amount of Rs.25,000/- and some other amount on account of its registration charge, stamp fee etc. totaling an amount of Rs.25,965/-. The alleged purchase of immovable property by the plaintiff is not recognized and no condition was incorporated anywhere in Ext.A2 agreement. No such clause was incorporated that in the event of failure to discharge the liability over the property it can be purchased by the plaintiff by utilizing his own funds. A voluntary act done by the plaintiff purchasing a property which was obtained by a person in a court auction cannot be brought under the purview of any of the terms and condition under Ext.A2 agreement though agreement stipulates a condition that it is the duty of the defendant to discharge the liability over the property, as such the matter in dispute will not come under the purview of either Section 73 or under Section 74 of the Contract Act. Needless to say that since there is no anticipatory breach of contract Section 55 of the Contract Act will not come into effect. The relevant **RSA. 1157/2003** **7** provision which may come into play is Section 56 of the Contract Act which deals with a contract where enforcement became impossible by a subsequent event or action which would render the contract void but subject to the liability to compensate the promissee by the promissor but restricted only when had done something which he knew or with reasonable diligent might have known the happening of an event which may make the enforcement of contract impossible. Going by the terms and conditions included in the contract it is clear that a liability over the property was agreed to be discharged by the defendant. But the property was purchased by the plaintiff from a total stranger not in the court auction. The plaintiff can claim compensation based on any actual loss sustained and not based on the purchase of a property from a third person though it relates to the subject matter of the contract. No such condition incorporated anywhere in Ext.A2 contract. So, the remedy is to sue for get back the amount already given to the plaintiff as it will constitute unlawful or illegal enrichment. But in the present suit, the contract was **RSA. 1157/2003** **8** brought into existence by playing threat and coercion and both the witness to the document DW2 and DW3 had categorically admitted that no such consideration was paid as embodied under Ext.A2 contract and it was even not read over to the parties concerned. Hence, the finding rendered by the First Appellate Court deserves no interference by this Court. None of the question of law raised at the time of admission of appeal is involved in the appeal. Hence, appeal deserves only a dismissal but without cost. The appeal is dismissed. No costs. ## **Sd/-** ## **P.SOMARAJAN** ## **JUDGE** msp //TRUE COPY// P.A. TO JUDGE