Mariyamma and others v. Shaji

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE P.SOMARAJAN FRIDAY, THE 22ND DAY OF JUNE 2018 / 1ST ASHADHA,1940 RFA.No. 415 of 2010 (INDIGENT) AGAINST THE JUDGMENT IN OS 479/2007 of PRL.SUB COURT,IRINJALAKUDA DATED 3103-2009 ## APPELLANTTS/DEFENDANTS: 1. MARIYAMMA, AGED 50 YEARS, W/O THALIYATH PAILOTH @ POULOSE, MANAVALASSERY VILLAGE & DESOM, MUKUNDAPURAM TALUK, THRISSUR DISTRICT. 2. BIJU, AGED 34 YEARS, S/O THALIYATH PAILOTH @ POULOSE, MANAVALASSERY VILLAGE & DESOM, MUKUNDAPURAM TALUK, THRISSUR DISTRICT. 3. JOTTY @ JOSEPH, S/O THALIYATH PAILOTH @ POULOSE, MANAVALASSERY VILLAGE & DESOM, MUKUNDAPURAM TALUK, THRISSUR DISTRICT. BY ADVS.SRI.RENJITH THAMPAN (SR.) SMT.P.A.ANITHA RESPONDENT/PLAINTIFF: --------------------- SHAJI, AGED 41 YEARS, S/O CHELAKKATTU KOCHAPPAN, 'SWAPNAM', KIRSTAPHAR NAGAR, OILUR VILLAGE, ANCHERY DESOM, THRISSUR TALUK & DISTRICT. R BY ADV. SRI.K.B.GANGESH R1 BY ADV. SRI.S.V.BALAKRISHNA IYER (SR.) THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 2-04-2018, THE COURT ON 22/6/2018 DELIVERED THE FOLLOWING: ## **RFA NO.415/2010 (INDIGENT)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS** **ANNEXURE I: TRUE COPY OF THE NOTICE ISSUED BY THE IRINJALAKUDA TOWN CO-OPERATIVE BANK UNDER THE "SECURITIZATION ACT" ON 20/7/2009.** **ANNEXURE II: TRUE COPY OF THE CERTIFICATE ISSUED BY THE IRINJALAKUDA TOWN CO-OPERATIVE BANK.** **ANNEXURE III: TRUE COPY OF THE RECEIPT ISSUED BY KARSHAKA VIPANI DATED 27.7.2010.** ## **RESPONDENT'S EXHIBITS** **ANNEXURE A: TRUE COPY OF THE IA NO.1512/2009 IN OS NO.479/2007 DT 2.4.2009.** **ANNEXURE B: TRUE COPY OF THE ORDER DATED 6.4.2009 IN IA NO.1512/2009 IN OS NO.479/2007.** **ANNEXURE C: TRUE COPY OF THE F.D.RECEIPT NO.319502 FOR AN AMOUNT OF RS.19,65,175/- DT 30.4.2009.** **ANNEXURE D: TRUE COPY OF THE F.D.RECEIPT NO.D 319501 FOR AN AMOUNT OF RS.23,58,665/- DT 29.4.2009.** **ANNEXURE E: TRUE COPY OF THE F.D.RECEIPT NO.D 319503 FOR AN AMOUNT OF RS.20,17,602/- DT 30.4.2009.** **ANNEXURE F: TRUE COPY OF THE MEMO DATED 30.4.2009 FILED BY THE PLAINTIFF IN OS NO.479/2007 BEFORE THE LOWER COURT.** ## **ANNEXURE G: TRUE COPY OF THE CHALAN RECEIPT.** **ANNEXURE H: TRUE COPY OF THE IA NO.2497/2009 IN OS NO.479/2007 FILED BY THE DEFENDANTS THEREIN BEFORE THE SUB COURT, IRINJALAKUDA DT 30.6.2009.** **ANNEXURE I: TRUE COPY OF THE LEARNED SUB JUDGE DISMISSED THE PETITION IN IA NO.2497/2009 IN OS NO.479/2007 ORDER DATED 20.7.2009.** **ANNEXURE J: TRUE COPY OF THE IA NO.2366/2009 DT 22.6.2009.** **RFA NO.415/2010(INDIGENT)** **-2-** **ANNEXURE K: TRUE COPY OF THE PETITION FOR EARLY POSTING DATED 25.8.2009.** **ANNEXURE L: TRUE COPY OF THE DRAFT SALE DEED BEFORE THE COURT FOR APPROVAL.** **ANNEXURE M: TRUE COPY OF THE IA 3666/2009 DATED 25.5.2009.** **ANNEXURE N: TRUE COPY OF THE IA NO.3547/2009 DATED 17.9.2009.** **ANNEXURE O: TRUE COPY OF THE COUNTER DATED 18.9.2009 TO ANNEXURE N PETITION FILED BY THE APPELLANT.** **ANNEXURE P: TRUE COPY OF THE COMMISSION REPORT FILED BY THE ADVOCATE COMMISSIONR IN OS NO.479/2007 BEFORE THE SUB COURT, IRINJALAKUDA.** **ANNEXURE A: TRUE PHOTOGRAPH OF THE HOUSE OF THE PETITIONER.** **ANNEXURE B: TRUE PHOTOGRAPH OF THE WEIGH BRIDGE OWNED BY THE PETITIONERS.** **ANNEXURE C: TRUE PHOTOGRAPH OF THALIYATH RICE AND OIL MILLS OWNED BY THE PETITIONERS.** **ANNEXURE 1: DEPOSITION OF DW1 BEFORE THE COURT OF SUB JUDGE, IRINJALAKUDA IN OS 479/2007.** ## **//True Copy//** ## **PS to Judge** **Rp** ## **A.M. SHAFFIQUE & P.SOMARAJAN, JJ.** ========================== RFA No. 415 of 2010 (Indigent) ==================== Dated this, the 22[nd] day of June, 2018 ## **J U D G M E N T** ## _**Shaffique, J.**_ The defendants in OS No. 479/2007 of the Sub Court Irinjalakuda are the appellants. The suit was filed by the respondent herein seeking specific performance of a contract for sale of immovable property with an alternate prayer for return of the advance amount. 2. The short facts arising in the case are as under:- A total extent of 5 acres and 49 cents of land described as item Nos.1 to 3 in the plaint schedule was given on mortgage to two Cooperative Societies. In order to settle the liabilities, defendants decided to sell the property and accordingly released an advertisement. The plaintiff offered `17,000/- per cent as sale consideration. An agreement was executed between the parties on 7/2/2007. `20 lakhs was paid as advance. On perusing the title RFA No.415/2010 -:2:- deeds, the defendants were told that the property belongs to minors also which they have to clear. The property was measured and a survey sketch was prepared on 12/5/2007. According to the plaintiff, on receiving the advance amount, the defendants did not settle their liability to the Co-operative Banks. The date of expiry of the agreement for sale was on 23/5/2007. The parties mutually agreed to extend the period for another 21 days from 18/5/2007, for which second appellant had made an endorsement on the back side of the agreement. According to the plaintiff, he was always ready and willing to perform the contract. In the meantime, he received notice dated 21/5/2007 by which the defendants offered to proceed with the sale on 23/5/2007. The plaintiff issued a lawyer's notice stating that the bank debts were not cleared which was followed by another lawyer's notice dated 20/6/2007 demanding specific performance of the agreement and also a statement showing the total liability in the property. 3. The defendants contended that the plaintiff did not have sufficient amount to pay the balance sale consideration. He was not ready and willing to perform his part of the contract despite the fact that defendants have taken all steps including clearing of RFA No.415/2010 -:3:- minors right and measuring the property. Plaintiff requested for extension of time since he did not have sufficient amount with him. The agreement was therefore extended for 21 days which period expired on 8/6/2007. According to the defendants, the plaintiff did not have sufficient funds to pay the balance sale consideration even as on that date. 4. Before the Court below plaintiff examined 5 witnesses as PW1 to PW5 and defendant relied on the oral testimony of DW1. Plaintiff produced Exts.A1 to A10 and the defendants relied on Exts.B1 to B17. Ext.X1 is a letter dated 18/2/2009 issued by the bank. The Trial Court found that plaintiff was ready and willing to pay the balance consideration and to execute the sale deed and it was on account of the breach committed by the defendants that they were unable to execute the sale deed. Having found so, the Court below directed specific performance of the agreement. 5. The learned senior counsel appearing for the appellants contended that the facts disclosed in the case clearly prove that the plaintiff was not in possession of sufficient funds for executing the sale deed either on 23/5/2007 or on 8/6/2007. This fact had been erroneously decided by the Court below. Further, the Court RFA No.415/2010 ## -:4:- below failed to exercise the discretion vested in it under S.20 of the Specific Relief Act. He also placed reliance on the following judgments:- (i) _**Bhaskaran Nair v. Habeeb Mohammed**_ (2002 (1) KLT 864). This judgment is cited to emphasise the point that grant of the decree for specific performance is not absolute and is discretionary. The Division Bench of this Court in the above judgment placed reliance upon an Apex Court judgment in _**A.C.Arulappan v. Smt.Ahalya Naik**_ (AIR 2001 SC 2783). In the said judgment, the Apex Court observed that, if under the terms of the contract, the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. Further, specific relief may not be granted if the defendants would be put to undue hardship which he did not foresee at the time of agreement. (ii) _**Adimakutty Hydu Ali v. Ambujam**_ (2003 (2) KLT 328). This is also a Division Bench judgment which considered the scope of discretion to be exercised u/s 20. It was held that the jurisdiction u/s 20 of the Specific Relief Act to decree specific performance is discretionary and the Court is not bound to grant RFA No.415/2010 -:5:- such relief merely because it is lawful to do so. (iii) Another judgment relied is _**Singaravelu Kounder v. Sulaiman**_ (2007 (2) KLT 556). In this case, a Division Bench of this Court while considering the scope of S.16(c) of Specific Relief Act held that the conduct of a person seeking benefit of specific performance is important and his conduct should be blemishless in order to exercise the discretion to grant specific performance. (iv) _**Alex Thomas v. Rajan**_ (2010 (4) KLT 842). In this case, another Division Bench of this Court while considering the effect of S.20 of the Specific Relief Act held that though mere inadequacy of consideration may be irrelevant, the passage of time that has gone through with the litigation apparently tilts the scales, since escalation in land value cannot be ignored. (v) _**Muhammed v. Chandrika**_ (2010 (3) KLT 306). This judgment had been cited to emphasise the point that specific performance of contract cannot be enforced in favour of plaintiff who fails to aver and prove his readiness and willingness to perform his part of the contract. It was held that the breach committed by the defendant has to be considered by the Court in arriving at the conclusion as to whether the plaintiff has proved RFA No.415/2010 -:6:- his readiness and willingness. 6. On the other hand, the learned senior counsel appearing for the plaintiff submitted that there is sufficient evidence in the case to prove that the plaintiff had sufficient funds to purchase the property and therefore the contrary contention is totally erroneous. Further, as per directions issued by the Trial Court, the plaintiff had paid the amount due from defendants to Irinjalakuda Town Co-operative Bank, Muriyad Service Cooperative Bank and Irinjalakuda Co-operative Agricultural Development Bank within the time specified under the agreement. By order dated 14/10/2009 in IA No.3606/2009, this Court appointed the respondent as receiver of the property with certain conditions without prejudice to the contentions in the appeal. It is therefore contended that the amount due to the creditors having been settled, it cannot be stated that the plaintiff was not ready and willing to perform the contract. It is submitted that the Court below had clearly found that the plaintiff had clearly averred and proved his readiness and willingness to perform the contract and there was no material to arrive at a different finding nor to exercise the discretion not to grant RFA No.415/2010 -:7:- specific performance. Learned counsel also placed reliance on the following judgments:- (i) _**Gobind Ram v. Gian Chand**_ [(2000) 7 SCC 548]. That was a case in which the appellant agreed to sell an item of property for a consideration of `16,000/- and `1,000/- was paid as advance. Agreement was dated 24/1/1973. Respondent filed a suit for specific performance which was decreed on 6/10/1976 and as directed by the Court, balance sale consideration was deposited before the Trial Court. The appeal filed by the appellant was dismissed by the Trial Court but High Court further directed to deposit a further amount of `1 lakh. The said sum was also deposited against which the appeal had been filed. After considering the various contentions urged by the parties, the Apex Court held that the appellant was trying to wriggle out of the contract between the parties because of escalation of price of real estate properties, and since the respondent/plaintiff has not taken any undue or unfair advantage over the appellant, it would be equitable and unjust to deny the decree to the respondent after two courts have decided in favour of the respondents. Further the Apex Court directed deposit of another sum of `3 RFA No.415/2010 -:8:- lakhs. (ii) _**Jagir Singh v. Ranjeet Singh**_ [AIR 2006 Rajasthan 105]. In that case, it was held that when a substantial amount is paid as advance and when a suit is filed within 4-5 months when the plaintiff had come to know that he had been cheated by a combined fraud by the defendants, discretionary relief cannot be denied to a citizen only because lis has been kept pending for decades in various courts. (iii) _**Kuldip Gangotra v. Shailendra Nath Endlay**_ [AIR 2007 Delhi (1)]. In this case, the Delhi High Court has held that once the plaintiff has demonstrated that he has complied with the terms of S.16(1)(c) of the Specific Relief Act, he had made himself entitled to a decree for specific performance. (iv) _**K.Prakash v. B.R.Sampath Kumar**_ [(2015) 1 SCC 597]. Paragraphs 16 to 19 of the judgment are relevant which reads as under:- _**“16.** The principle which can be enunciated is that where the plaintiff brings a suit for specific performance of contract for sale, the law insists upon a condition precedent to the grant of decree for specific performance: that the plaintiff must show his continued readiness and willingness to_ RFA No.415/2010 -:9:- _perform his part of the contract in accordance with its terms from the date of contract to the date of hearing. Normally, when the trial court exercises its discretion in one way or the other after appreciation of entire evidence and materials on record, the appellate court should not interfere unless it is established that the discretion has been exercised perversely, arbitrarily or against judicial principles. The appellate court should also not exercise its discretion against the grant of specific performance on extraneous considerations or sympathetic considerations. It is true, as contemplated under Section 20 of the Specific Relief Act, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree are established then the court has to exercise its discretion in favour of granting relief for specific performance._ _**17.** Mr Shetty lastly submitted that grant of decree for specific performance in favour of the appellant will cause a great hardship for the reason not only because of the lesser price shown in the agreement but also because of the rise in price which have been increased ten times the price agreed between the parties._ _**18.** Subsequent rise in the price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, therefore, on that ground a decree for specific performance cannot be reversed._ _**19.** However, the court may take notice of the fact that there has been an increase in the price of the property and_ RFA No.415/2010 ## -:10:- _considering the other facts and circumstances of the case, this Court while granting decree for specific performance can impose such condition which may to some extent compensate the defendant owner of the property. This aspect of the matter is considered by a three-Judge Bench of this Court in Nirmala Anand v. Advent Corpn. (P) Ltd., wherein this Court held: (SCC p. 150, para 6)_ _“6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance._ RFA No.415/2010 -:11:- _There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.”_ ## (v) _**Zarina Siddiqui v. A.Ramalingam alias**_ ## _**R.Amarnathan**_ [(2015) 1 SCC 705]. Paragraphs 33 to 36 of the judgment are relevant which reads as under:- _**“33.** The equitable discretion to grant or not to grant a relief for specific performance also depends upon the conduct of the parties. The necessary ingredient has to be proved and established by the plaintiff so that discretion would be exercised judiciously in favour of the plaintiff. At the same time, if the defendant does not come with clean hands and suppresses material facts and evidence and misleads the court then such discretion should not be exercised by refusing to grant specific performance._ _**34.** In the instant case, as noticed above, although Defendant 2 held a registered power of attorney on behalf of Defendant 1 to sell and dispose of the property, but the defendants not only made a false statement on affidavit that the power of attorney had authorised the second defendant only to look after and manage the property but also withheld the said power of attorney from the court in order to misguide the court from the truth of the facts. Further, by registered agreement the defendants agreed to sell the suit premises after receiving advance consideration but they denied the existence of the agreement in their pleading. Such conduct of the defendants in our opinion, disentitles them_ RFA No.415/2010 ## -:12:- _to ask the court for exercising discretion in their favour by refusing to grant a decree for specific performance. Further, if a party to a lis does not disclose all material facts truly and fairly but states them in distorted manner and misleads the court, the court has inherent power to exercise its discretionary jurisdiction in order to prevent abuse of process of law._ _**35.** However, it is noticed from the facts that the registered agreement to sell was executed between the parties on 25-6-1979 and the suit for specific performance was filed by the appellant-plaintiff in January 1981. The suit was decreed by the trial court in November 1998. The respondent-defendant challenged the said decree before the High Court in April 1999. The High Court allowed the appeal by terms of the judgment dated 3-2-2004 and set aside the trial court’s judgment and decree. The appellant-plaintiff preferred special leave petition, which was numbered as Civil Appeal No. 6956 of 2004. The civil appeal was finally decided on 4-3-2011 setting aside the High Court’s judgment and remanding the matter back to the High Court to decide the appeal afresh. On remand, the learned Single Judge in terms of the order dated 1-3-2012 allowed the appeal and set aside the judgment and decree of the trial court. In this way, the matter remained pending before the High Court and this Court for a number of years._ _**36.** As held by this Court time and again, efflux of time and escalation of price of the property by itself cannot be a valid ground to deny the relief of specific performance. But the Court in its discretion may impose reasonable conditions including payment of additional amount to the_ RFA No.415/2010 ## -:13:- _vendor. It is equally well settled that the plaintiff is not to be denied specific performance only on account of phenomenal increase of price during the pendency of litigation”._ The legal principles evolved in the judgments cited above are well settled. 7. The first question to be considered is whether plaintiff had averred and proved the ingredients of S.16(1)(c) of the Specific Relief Act. The readiness and willingness apparently includes having sufficient funds to pay the balance consideration at the relevant time for purchasing the property. There is no dispute about the fact that time was considered to be the essence of contract which is clearly stipulated in the agreement itself. 8. Taking into consideration the total extent of property and the value at `17,000/- per cent, the total price would come to `88,91,000/-. It is stated that on measurement, the property was having an extent of 5 acre 16.170 cents in which event the value of the property will come to `87,74,890/-. After deducting `20 lakhs paid by the plaintiff as advance, the balance amount would come to `67,74,890/-. In addition to the said amount, according RFA No.415/2010 -:14:- to the defendants, the plaintiff should possess atleast `9 lakhs towards stamp duty, registration fee etc., in which event his total obligation would come to about `78 lakhs. It is the main case of the appellants that there is no evidence to prove that the plaintiff was possessing such an amount at the relevant time. 9. In the plaint, there is allegation that though the defendants had agreed to settle all the liabilities and provide the necessary documents free from all encumbrances, the defendants did not settle its liabilities. The defendants also sought for two weeks time for which time was extended upto 8/6/2007. However, a lawyer's notice dated 21/5/2007 had been issued concealing the aforesaid facts. Plaintiff on receipt of the notice met the defendants and expressed his readiness to pay the balance amount. However, the defendants asked him to pay `55,14,825/- for settling the liabilities for which the plaintiff was not agreeable and offered to purchase the property if they settle the entire liability. The defendants had sent a notice to sell the property on payment of the entire consideration and offered to settle the liabilities on the same day. It is averred that plaintiff made arrangements with South Indian Bank Limited by way of an RFA No.415/2010 -:15:- overdraft facility and arranged funds and approached the defendants but they did not comply with the demand. Accordingly, he had issued notice dated 20/6/2007. He had also offered to pay the balance consideration after adjusting the liability. He therefore contended that he was always ready and willing to perform the contract. 10. As evidence in the case, plaintiff examined himself as PW1. Ext.A1 is the agreement dated 7/2/2007 and on the reverse side it contains an endorsement that time had been extended for 21 days, which is duly signed by plaintiff and 2[nd] defendant. There is no dispute about the aforesaid fact. Ext.A2 is a draft of the sale deed. Ext.A5 is a lawyer's notice issued by the plaintiff to the defendants for which a reply had been sent on behalf of the defendants as Ext.A6. Ext.A7 is another notice issued by the defendants to the plaintiff. Ext.A8 is the notice dated 20/6/2007 sent on behalf of the plaintiff to the counsel for defendants. Ext.A9 is a statement of account dated 12/2/2009 for the period from 21/1/2009 to 30/1/2009 which shows a credit balance of `60,60,339/- as on 30/1/2009. Ext.A10 is the passbook with reference to a current account maintained with South Indian RFA No.415/2010 ## -:16:- Bank. This document would show that as on 23/5/2007, the debit balance in the current account is `44,63,350/-. This document would only indicate that the plaintiff had a credit limit of certain amount and he had already drawn `44,63,350/- from the said account. The time was extended for 21 days which would indicate that period is extended upto 8/6/2007. As on 8/6/2007, his debit balance was `20,74,678/-. This document will not help the plaintiff to prove that he was having sufficient funds. 11. PW1 in his chief affidavit had stated that he had obtained an overdraft facility of `65 lakhs for which he had produced Exts.A9 and A10. 12. PW2 is the Branch Manager of South Indian Bank of Ollur Branch. He gave evidence stating that on 7/6/2007, plaintiff was given a cash credit open loan for `65 lakhs. Ext.X1 is the certificate. He also referred to Ext.A10 pass book. According to him, on 4/2/2009, on payment of `16,000/-, the debit balance was `467/- and he could draw amount upto `65 lakhs. In cross examination he admits that the money was paid for gold business and it could not be utilized for any other purpose. The overdraft is given from the Regional Office for which there will be separate RFA No.415/2010 ## -:17:- order. 13. PW3 is the broker between the parties. PW4 is a document writer. PW5 is the counsel who had issued notice on behalf of the defendants. In evidence, PW5 admits to have extended the period of agreement as per the endorsement marked as Ext.A1(a). He stated that it is in his handwriting. In cross examination he stated that the period was extended as both parties requested. Shaji told that the money was not ready and requires some time. Shaji requested for extension of time. When he was asked whether Shaji had requested for extension of time, he affirmed it. It was agreeable to Paulose and Biju. 14. DW1 is the third defendant. Ext.X1 is a letter issued by South Indian Bank on 18/2/2009 certifying that they have sanctioned a cash credit open loan limit of `65 lakhs to the plaintiff on 7/6/2007. This document apparently would show that a cash credit open loan limit of `65 lakhs was sanctioned to the plaintiff on 7/6/2007. Therefore, he could have withdrawn an amount upto `65 lakhs on the said date. As already stated and as per the evidence of PW2, the Bank Manager, the limit was sanctioned only on 7/6/2007. Therefore as rightly pointed out by RFA No.415/2010 -:18:- learned counsel for appellants, as on 23/5/2007, plaintiff could not show that he was in possession of sufficient funds. What was the credit limit as on 23/5/2007 is not known and there is no evidence for the same whereas, as on 23/5/2007, plaintiff had already withdrawn `44,63,350/- from his credit limit. Now coming to the position as on 7/6/2007, he had drawn `20,74,678/-. Assuming that as on 7/6/2007, the sanction limit is `65 lakhs, then he could withdraw only the amount after deducting `20,74,678/-, i.e., roughly `44 lakhs and odd. The Bank Manager in his evidence says that after payment of `16,000/- on 4/2/2009, the debit balance is only `467/- and plaintiff could withdraw upto `65 lakhs. From this evidence itself it is clear that the plaintiff was not in possession of sufficient funds for payment of the balance sale consideration either on 23/5/2007 or 7/6/2007. As far as Ext.A9 is concerned, the same was not admitted in evidence. Therefore, Ext.A9 has to be ignored. 15. Of course it is settled law that the plaintiff need only show his capability to raise the funds. But when the plaintiff relies upon an overdraft sanctioned in his favour, it is for him to prove that the said overdraft was sufficient enough to pay the RFA No.415/2010 -:19:- balance sale consideration. As already stated, plaintiff ought to have had an amount of about `78 lakhs after adjusting the advance amount as on 7/6/2007. No evidence had been adduced in that regard. In the plaint, plaintiff has only referred to the overdraft from the Bank without any specific date. The Court below proceeded on the basis that when Ext.X1 certificate had been issued stating that a loan is granted on 7/6/2007, it clearly shows that plaintiff was having sufficient funds and that he was ready to purchase the property. But the fact is that the account was an overdraft account, and as on 7/6/2007, plaintiff had drawn more than `22 lakhs and the balance overdraft facility was not enough to pay the balance sale consideration is rather evident. Further, the overdraft has been given to the plaintiff only for the purpose of gold business which is again evident from the evidence of PW2. Even assuming for the sake of argument that he could raise funds, there is nothing to indicate his readiness in possession of funds as on either 23/5/2007 or 7/6/2007. Therefore, we are of the view that the plaintiff had not proved his readiness to purchase the property as on the date fixed between the parties. RFA No.415/2010 -:20:- 16. Yet another finding of the Court below is that the defendants were not willing to settle the liability which came to about `55,14,825/-. Even according to the plaintiff, he was aware of the liability due to various Banks. Defendants had requested him to pay the said amount for settling the liability for which he was not agreeable. He offered to settle the liability by himself by taking over the loan for which he had issued a notice as well which is Ext.A8. He had requested the defendants to give a statement showing the total liability, the details of the creditors and other liabilities, if any, including any pending cases and on providing the same, he was willing to purchase the property. 17. It could therefore be seen that the readiness and willingness of the plaintiff to purchase the property was subject to clearance of the encumbrances. In the suit itself, the averment in the plaint reads as under:- “എനന്നാൽ പ്രതതികൾ ബന്നാദദ്ധ്യത തതീർക്കുനതതിനു 55,14,825/ക. വവേണമമെനന്നും മെറന്നും വേന്നാദതിവയന്നാടട് ആവേശദ്ധ്യമപ്പെട്ടതതിൽ വേന്നാദതി അതതിനു തയന്നാറമല്ലെനന്നും ബന്നാദദ്ധ്യത തതീർത്തു ആധന്നാരലകദ്ധ്യങ്ങൾ ശുദമെന്നാകതി തനന്നാൽ വേഹകൾ തതീമറടുകന്നാമമെനട് RFA No.415/2010 ## -:21:- സമ്മതതിചതിരുനതുമെന്നാണ. അതതിനു തയന്നാറന്നാമണന അറതിയതിചതിരുന.” 18. When the readiness and willingness expressed was subject to conditions and the property was admittedly encumbered, the plaintiff could not have sought for specific performance of the agreement. Of course as per the terms and conditions, defendants were under obligation to execute the sale deed free from all encumbrances, but when the encumbrances have not been settled, it was not proper on the part of the Court below to have directed specific performance and permitting the plaintiff to settle the liabilities. In fact, that was not the arrangement between the parties. Having regard to the aforesaid finding, we are of the view that the Court below committed serious error in decreeing the suit. 19. But it could be seen that based on the decree passed, the plaintiff had settled the liability due to two financial institutions by remitting the amount as per the terms of the decree. The following were the amounts paid by the plaintiff. - (i) `20 lakhs on 7/2/2007. - (ii) A Fixed Deposit of `19,65,175/- dated 30/4/2009 RFA No.415/2010 ## -:22:- as per receipt No.319502. (iii) A Fixed Deposit of `23,58,665/dated 29/4/2009 as per receipt No.319501. (iv) A Fixed Deposit of `20,17,602/- dated 30/4/2009 as per receipt No.319503. The balance `4,33,958/- was deposited in the treasury on 2/6/2009. 20. In the interim order dated 14/10/2009 in IA No.3606/2009, this Court directed that the amounts which have been deposited as Annexures C, D and E, (Fixed Deposits) produced along with the counter affidavit shall be paid over to the creditors in terms of the judgment. The amount lying in Court deposit under Annexure G will be deposited in the Treasury Bank in the name of Principal Sub Court, Irinjalakuda. It is further directed that if any amount is in excess after paying to the creditors in terms of the impugned judgment, the said amount shall also be deposited in the Treasury Bank in the name of Principal Sub Court, Irinjalakuda in the suit. It was also made clear that the payments made to the creditors will be with the clear understanding that it is without prejudice to the contentions of RFA No.415/2010 -:23:- the petitioners in C.M.C.P. No. 54/2009 and the appeal emanating from the same. Having found that the plaintiff is not entitled to seek specific performance as he has failed to prove that he was in possession of sufficient funds to purchase the property as on the date for performance of the agreement, and having taken into account the fact that plaintiff had since deposited substantial amounts as directed by the Court below and the creditors had been discharged as per directions issued by this Court, the appeal shall stand allowed and a decree be passed as follows:- (i) The judgment and decree of the Court below is set aside. (ii) A decree is passed permitting the plaintiff to recover from the defendants `20,00,000/- (Rupees Twenty lakhs only) with interest at the rate of 12% per annum from 7/2/2007 till realisation. (iii) The plaintiff is also entitled for a decree for an amount of `63,41,442/- (Rupees Sixty three lakhs forty one thousand four hundred and forty two only) with interest at the rate of 12 % per annum from 30/4/2009 till realisation. RFA No.415/2010 ## -:24:- (iv) A decree for realisaiton of an amount of `4,33,958/(Rupees Four lakhs thirty three thousand nine hundred and fifty eight only) with interest at the rate of 12% per annum from 2/6/2009 till realisation. (v) The amount decreed shall be a charge on the plaint schedule properties. (vi) On payment of the aforesaid amounts, if any amount is lying in Court deposit, the said amount with interest shall be released to the defendants. Sd/- ## **A.M. SHAFFIQUE, JUDGE** Sd/- ## **P.SOMARAJAN, JUDGE** Rp “The Court fee shall be recovered from the appellants” ordered vide order dated 22/6/2018 in R.F.A.No.415/2010. Sd/- **Registrar (Judicial)** //True Copy// PS to Judge