Moideen Kunju v. Abdul Khader

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE P.BHAVADASAN** **TUESDAY, THE 4TH DAY OF FEBRUARY 2014/15TH MAGHA, 1935** ## **RSA.No. 199 of 2012 ()** **----------------------A.S.NO.139/2008 OF VI ADDL.DISTRICT COURT, ERNAKULAM O.S.NO.466/2003 OF 1 ADDL.SUB COURT, ERNAKULAM --------------------------** ## **APPELLANT/APPELLANT/DEFENDANT:** **-----------------------------------------------------------** **MOIDEEN KUNJU, S/O.AHAMMED PILLA, AGED 57 YEARS, NEERUNKAL PARAMBU, NJALAKAM KARA, KALAMASSERY. BY ADVS.SRI.G.S.REGHUNATH SRI.K.RAJESH KANNAN SRI.A.S.SHAMMY RAJ SRI.P.SHANES SRI.P.K.MOHAMMED PUZHAKKARA** ## **RESPONDENT/RESPONDENT/PLAINTIFF:** **--------------------------------------------------------------** **ABDUL KHADER, AGED 44 YEARS, S/O.KOCHUPILLA, EDAMPADATH, NJALAKAM KARA, RAJAGIRI P.O., KALAMASSERY, ERNAKULAM - 683 104.** **BY ADV. SRI.N.K.MOHANLAL SRI.P.A.ABHILASH** **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 04-02-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **P.BHAVADASAN, J.** - - - - - - - - - - - - - - - - - - - - - - - - ## R.S.A. No. 199 of 2012 - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 04[th] day of February, 2014 ## **J U D G M E N T** The defendant, who suffered a decree for specific performance in O.S.No.466/2003 before the Sub Court, Ernakulam and which decree was confirmed by the appellate court in A.S.No.139/2008, is the appellant before this Court. 2. The admitted facts are as follows: The parties entered into an agreement evidenced by Ext. A1 whereby, the defendant undertook to sell four cents of property for a consideration of 35,000/- per cent and₹ three months time was fixed for execution of the sale deed. ₹ 20,000/- was paid on the date of agreement itself and ₹ 5,000/- was to be paid, according to the plaintiff, on or before 20.02.2003 which on the other hand, according to the defendant, on or before 20.12.2002. The plaintiff pointed out that in spite of expressing his readiness and willingness to perform his part of the contract and on calling upon the ## **R.S.A. No.199/2012** **-2-** defendant to execute the sale deed which he did not do so, the defendant committed breach of contract and therefore, a suit was filed for specific performance. 3. The defendant resisted the suit. It was pointed out by him that it was the plaintiff who had committed breach of contract and he was always ready and willing to perform his part of the contract. According to him, he had to sell the property to raise funds for the marriage of his daughter and by not paying the subsequent amount of 5,000/-, the₹ plaintiff had committed breach of agreement. It is further averred in the written statement that the defendant approached the plaintiff on several subsequent occasions and asked him to pay the balance amount and get the sale deed executed. Since he had no money, the sale could not materialize. In short, the defendant put blame on the plaintiff. 4. The parties went to trial on issues raised by the trial court. The evidence consists of the testimony of PWs 1 ## **R.S.A. No.199/2012** **-3-** and 2 and Exts. A1 to A6 were marked on the side of the plaintiff. The defendant had examined DW1 and Exts. B1 to B4 were marked. 5. Both the courts below, on an independent appreciation of the evidence in the case, came to the conclusion that it was the defendant who had committed breach of agreement. The courts below accepted the contentions put forward by the plaintiff that he did not pay ₹ 5,000/- as agreed to pay in Ext.A1 because by that time, the defendant had encumbered the property and he is disentitled to get the said amount. Holding that the defendant had failed to perform his part, specific performance was granted. The said decree is assailed in this second appeal. 6. At the time of admission, the following substantial questions of law were formulated: I. Have not the lower court perversely and erroneously exercised its jurisdiction and discretion in granting a decree for specific **R.S.A. No.199/2012** **-4-** performance of Ext.A1 ignoring principles settled by this Court and the Apex Court? II. When time is the essence of contract contained in Ext.A1, is the court below justified in dismissing the appeal without considering the legal principles settled by the Supreme Court? III. Have not the lower court violated all principles of natural justice in dismissing I.A.Nos. 213 & 214 of 2008? IV. Has not lower court ignored vital admission of the plaintiff and thus committed material illegality and total perversity in deciding the appeal? 7. Sri. G.S. Reghunath, the learned counsel appearing for the appellant pointed out that apart from everything else, both the courts below had not considered the question of exercise of discretion under Section 20 which is mandatory in the case of present nature and that has resulted in the failure of justice. The learned counsel referred to the evidence of PW1 and pointed out that he had admitted in his examination that the amount of 5,000/-₹ had to be paid on or before 21.12.2002, though it was ## **R.S.A. No.199/2012** **-5-** demanded, he had not done so. This admission by PW1, according to the learned counsel, would belie the statement in Ext.A1 and the subsequent payment of 5,000/- was to be₹ treated on or before 20.02.2003. This would be further fortified, according to the learned counsel, by having a perusal of Ext.B4, the statement in the criminal court whose jurisdiction was also invoked by the plaintiff and where he miserably failed to establish his case. He was confronted with his deposition in the magistrate court where he stated that he had paid 5,000/-on 24.12.2002 which is contrary to₹ his current stand. It is therefore clear, according to the learned counsel, that the plaintiff had committed breach of agreement and the finding of the courts below, to the contrary, is not correct. The learned counsel also contended that the reason for not paying the amount on the due date, assuming the date to be 20.02.2003, is also not very convincing since there was no attempt from the side of the plaintiff to show that he was always ready and willing to ## **R.S.A. No.199/2012** **-6-** perform his part of the contract. There was no offer to pay ₹ 5,000/- and the explanation offered that by that time, he had come to know that the property had been encumbered may not be true. Going by the evidence of PW2, it is pointed out that even though the application for loan was given by the defendant in January, the loan was sanctioned only in July. This evidence given by PW2, according to the learned counsel is sufficient to show that on the due date as per agreement, the defendant was capable of performing his part of the contract and it is clear that the breach was on the part of the plaintiff. The learned counsel went on to point out that both the courts below have not considered these aspects in the proper perspective and therefore, the judgment and decree cannot be supported. In support of his contention that a person of the nature, PW1 does not deserve any remedy of specific performance at the hands of the court, the learned counsel relied on the decisions reported in **Nirmala Anand** v. **Advent Corporation (P)** ## **R.S.A. No.199/2012** **-7-** **Ltd. and others [2002 (5) SCC 481]** , **Saradamani Kandappan** v. **Rajalakshmi [2011 (3) KLT SN 43]** , **Adimakutty Hydu Ali** v. **Ambujam [2003 (2) KLT 328]** , **Laxman Tatyaba Kankate And Another** v. **Taramati Harishchandra Dhatrak [2010 (7) SCC 717]** , **Garre Mallikharjuna Rao (D) by Lrs. and Others** v. **Nalabothu Punniah [2013 KHC 4186]** , **G. Jayashree And Others** v. **Bhagwandas S. Patel And Others [2009 (3) SCC 141]** , **Susheela (Died) & Anr.** v. **T.M. Muhammedkunhi [2012 (1) KLJ 780]** , **Garre Mallikharjuna Rao (D) by Lrs. and Others** v. **Nalabothu Punniah [2013 (4) SCC 546].** 8. Meeting the above arguments, the learned counsel appearing for the respondent contended that the courts below have considered various aspects from all angles and reminded this Court that this Court is exercising its jurisdiction under Section 100 of the Code of Civil Procedure which is considerably limited in nature. Both the courts below, on an appreciation of the evidence in the case, have ## **R.S.A. No.199/2012** **-8-** come to the conclusion that it was the defendant who had committed breach of agreement and that finding is based on the evidence on record and it is not liable to be interfered with unless it is shown to be either perverse or contrary to the evidence on record. 9. Referring to the written statement filed by the defendant, it was pointed out that, according to him, ₹ 5,000/- was to be paid on or before 20.02.2003. That admission in the written statement cannot be overlooked. Both the courts below have found that the non-payment of ₹ 5,000/- by the plaintiff was due to the encumbrance of the property during the period of agreement and therefore, the plaintiff was relieved of the burden of paying the said amount. It is further contended that on facts, no interference is called for. 10. Ext.A1 is an admitted document though its contents to some extent are disputed. The extent of property, sale consideration, payment of advance and the **R.S.A. No.199/2012** **-9-** time fixed for execution of the sale deed are admitted facts. But there is some dispute regarding the statement that while in Ext.A1, it is shown that the amount of 5,000/- was₹ to be paid on or before 20.02.2003, according to the defendant, the actual date is 21.12.2002. In support of his contention, he, after the closure of evidence in the trial court, had filed two petitions namely I.A.No. 213 of 2008 and I.A.No. 214 of 2008 to re-open the evidence and also to adduce further evidence. Along with that petitions, he produced, according to him, a photostat copy of the agreement entered into between him and the plaintiff which would show that the subsequent amount of 5,000/- was to₹ be paid on or before 21.12.2002. The trial court found that it was highly belated and the defendant had knowledge about the date even from the plaint where it was specifically mentioned and also due to the fact that the document Ext.A1 agreement was produced along with the plaint. It was accordingly held by the courts below that the defendant ## **R.S.A. No.199/2012** **-10-** was aware of the fact that plaintiff's case was that subsequent payment of 5000/- was to be paid on or before₹ 20.02.2003 and not on 21.12.2002 as contended by the defendant. Petitions were accordingly dismissed. 11. Assuming for argument sake, the date of subsequent payment of 5,000/- was as contended by the₹ plaintiff, there is nothing to show that the plaintiff had offered to pay the said amount. But his version is that he came to know that the property has been encumbered and that is why he resisted from making payment of the same. The plaintiff had examined PW2 who is the Manager of the Co-operative Bank from where the defendant had availed of the loan. The statement of this witness is to the effect that even though the application for loan was given in January, 2003 by the defendant, loan was sanctioned only in July, 2003. Therefore, the claim of the plaintiff that the property was encumbered as on the date on which the subsequent payment was to be made cannot be true as per the evidence ## **R.S.A. No.199/2012** **-11-** on record. Merely because an application is filed, it is not a ground to come to the conclusion that property was encumbered. 12. Further, as already noticed, the plaintiff had invoked the criminal jurisdiction also to rope in the defendant. He instituted a private complaint and the cognizance had been taken as C.C.No.270/2003. There, he was examined as PW1. In paragraph 13 of Ext.B4, the judgment and decree, it is specifically stated that his case at the time of being examined in criminal court is that he had paid 20,000/- on 19.12.2002 and that on 21.12.2002, he₹ had paid 5,000/- also. True, that the deposition in criminal₹ proceedings may not be binding on the plaintiff in this case. But one cannot omit to note that he was confronted with the said statement in cross examination in this case wherein, he admitted that he had said so in the magistrate court. No reexamination was conducted on this point. But court below took it to be a bona fide mistake or some inadvertent ## **R.S.A. No.199/2012** **-12-** omissions in his admission. But his admission in this regard stands unchallenged. 13. It is also significant to notice that even assuming that the defendant had made preparation to avail of the loan from the Co-operative Bank, there is nothing to show that before the date of expiry of the agreement for sale, he could not have released the property from encumbrance. There is nothing in Ext.A1 agreement which prevents the defendant from encumbering the property during the period of agreement. Apart from the fact that the claim of PW1 that he had come to know that the property has already been encumbered and therefore he did not pay and also the fact that he was ready and willing to perform his part of the contract, cannot be countenanced. 14. It is significant to notice that Ext.A5, a notice alleged to have been sent by the plaintiff to the defendant was returned unserved. A reading of the notice shows that he had no case that he did not pay the subsequent amount ## **R.S.A. No.199/2012** **-13-** of 5,000/- as he came to know that the property had been₹ encumbered. There is no mention of said fact in the notice. 15. It is therefore clear that there was no attempt from the side of the plaintiff to make the payment of ₹ 5,000/- to the defendant as contained in Ext.A1 even assuming the date shown in Ext.A1 for that payment is the date for payment. It has already been noticed that the claim of the plaintiff that the property has already been encumbered, cannot stand in the light of the evidence furnished by PW2. 16. Both the courts below were carried away the fact that the property has been subsequently encumbered and that the defendant had committed breach of agreement in that regard. Both the courts below have not adverted to the evidence on record properly and have not appreciated the evidence in proper perspective. It is also significant to notice that the plaintiff has stated that after 24.02.2003, the last day on which he demanded the execution of sale deed, ## **R.S.A. No.199/2012** **-14-** he had not met the defendant at all. One may remember that the last day for execution of the sale deed was on 19.03.2003. 17. The defendant has a case that the he had to raise funds for the marriage of his daughter and he has produced Ext.B1 document which would show that the marriage of his daughter was scheduled to be held on 10.04.2003. The defendant had also given evidence to the effect that he approached the plaintiff on several subsequent occasions and demanded to pay the balance amount and get the sale deed executed. 18. As already noticed, certain vital aspects which cast considerable doubt regarding the veracity of the claim put forward by the plaintiff had been overlooked by the courts below. It cannot be disputed that there have material bearing on the issue involved in this case. Section 16 of the Specific Relief Act, 1963 contemplates two situations namely (b) and (c) which read as follows: **-15-** ## **R.S.A. No.199/2012** “16. **Personal bars to relief** .-- Specific performance of a contract cannot be enforced in favour of a person-- (a) who would not be entitled to recover compensation for its breach; or (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or (c) 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. A reading of the above provision indicates that the plaintiff must have been ready and willing to perform his part of the contract and he must continue to do so also. 19. The payment of 5000/- as contained in Ext.A1₹ agreement is an essential term of the contract. It has already been noticed that the reason given by the plaintiff ## **R.S.A. No.199/2012** **-16-** cannot be accepted. Therefore, there is a reasonable doubt created in the mind of the court as to whether the plaintiff was ready and willing to perform his part of the contract. The defendant has a case that he had approached the plaintiff but the plaintiff did not have the money to purchase the property. Of course, in the case on hand, we have only the evidence of PW1. It has already been found that the evidence of PW1 in this regard is suspect. 20. It is here that the court needs to exercise its discretionary power under Section 20 of the Specific Relief Act. It is unfortunate that the courts below have not considered this aspect at all. It is well settled that in a suit for specific performance, even if it is found that the plaintiff has complied with all formalities, it is not mandatory to grant a decree for specific performance. 21. The decision reported in **Nirmala Anand** v. **Advent Corporation (P) Ltd. and others [2002 (5) SCC 481]** , it was held as follows: **-17-** ## **R.S.A. No.199/2012** “Before decreeing specific performance, it is obligatory for courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant, the extent of hardship that my be caused to the defendant and if it would render such enforcement inequitable, besides taking into ( _sic_ consideration) the totality of circumstances of each case.” ## 22. The decision reported in **Saradamani Kandappan** v. **Rajalakshmi [2011 (3) KLT SN 43]** , it was ## held as follows: “Courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and therefore time/period prescribed cannot be ignored. Courts will apply greater scrutiny and strictness when considering whether the purchaser was 'ready and willing' to perform his part of the contract. Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement. Courts will also 'frown' **-18-** ## **R.S.A. No.199/2012** upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three year period is intended to assist purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance, where equity shifts in favour of the purchaser.” ## 23. The decision reported in **Adimakutty Hydu Ali** v. **Ambujam [2003 (2) KLT 328]** , it was held as follows: “In our view, this is an eminently fit case for any court to exercise discretion declining relief to the plaintiff under Section 20 of the Specific Relief Act. The Apex Court in _K. Narendra v. Riviera Apartments (P) Ltd._ (AIR 1999 SC 2309) held that the jurisdiction under S.20 of the Specific Relief Act, 1963 to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; 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. **-19-** ## **R.S.A. No.199/2012** Performance of the contract involving some hardship on the defendant which he did not foresee while nonperformance in involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. Apex Court in _Nirmala Anand v. Advent Corp.(P) Ltd._ (2002) 5 SCC 481, held that specific performance being an equitable relief balance of equities have also to be struck taking into account all these relevant aspects of the matter, including the lapses which occurred and parties respectively responsible therefore. Before decreeing specific performance, it is obligatory for courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant, the extent of hardship that may be caused to the defendant and if it would render such enforcement inequitable, besides taking into consideration the totality of the circumstances of each case. We are of the view considering the totality of the circumstances of the case it would be inequitable to grant a decree as against the widow and other defendants who are deaf and dumb persons. The hardship that may be caused to them is much more than what the **-20-** ## **R.S.A. No.199/2012** hardship that would be caused to the plaintiff. We are of the view in the facts and circumstances of the case plaintiff should be satisfied with the decree for the amount he had advanced with reasonable interest. It is too harsh for him to insist for a decree of specific performance against defendants in the facts and circumstances of the case.” ## 24. The decision reported in **Laxman Tatyaba Kankate And Another** v. **Taramati Harishchandra Dhatrak [2010 (7) SCC 717]** , it was held as follows: “The discretion of the Court has to be exercised as per the settled judicial principles. All the aforesaid principles are squarely satisfied in the present case and it is the appellants before us who have taken advantage of the pendency of the proceedings. They have used the sum of Rs. 10,000/-, which was given as earnest money for all this period, as well as, have enjoyed the fruits of the property.The present case does not fall within the ambit of any of the aforesaid cases specified under Section 20(2) of the Act. In the present case, it is not only lawful but even equity and facts of the case demand that a decree for specific performance should be granted in favour of the respondent. **-21-** ## **R.S.A. No.199/2012** Besides all this, the respondent before us has agreed to pay much higher consideration than what was payable in terms of the agreement to sell between the parties.” ## 25. The decision reported in **Garre Mallikharjuna Rao (D) by Lrs. and Others** v. **Nalabothu Punniah** ## **[2013 (4) SCC 546]** , it was held as follows: “ **15.** The judgment and order of the trial court is based on proper appreciation of the evidence. The High Court has erred in relying upon untrustworthy, shaky and vague evidence to grant the discretionary relief of specific performance in contravention of the mandate of Section 20 of the Specific Relief Act, 1963.” ## 26. The decision reported in **G. Jayashree And Others** v. **Bhagwandas S. Patel And Others [2009 (3) SCC 141]** , it was held as follows: “The civil courts, in the matter of enforcement of an agreement to sell, exercise a discretionary jurisdiction. Discretionary jurisdiction albeit must be exercised judiciously and not arbitrarily or capriciously.A plaintiff is expected to approach the court with clean **-22-** ## **R.S.A. No.199/2012** hands. His conduct plays an important role in the matter of exercise of discretionary jurisdiction by a court of law. In Mohammadia Cooperative Building Society Limited v. Lakshmi Srinivasa Cooperative Building Society Limited and ors. [(2008) 7 SCC 310], this Court held : "Grant of a decree for specific performance of contract is a discretionary relief. There cannot be any doubt whatsoever that the discretion has to be exercised judiciously and not arbitrarily. But for the said purpose, the conduct of the plaintiff plays an important role. The courts ordinarily would not grant any relief in favour of the person who approaches the court with a pair of dirty hands." In Sanjana M. Wig (Ms.) v. Hindustan Petroleum Corpn. Ltd. [2005] 8 SCC 242] in regard to exercise of the discretionary jurisdiction, this Court held that the same depends upon the facts and circumstances of each case wherefor no hard and fast rule can be laid down.” ## 27. The decision reported in **Susheela (Died) & Anr.** ## v. **T.M. Muhammedkunhi [2012 (1) KLJ 780]** , are held as ## follows: “In the absence of a plea in the plaint regarding readiness and willingness no decree **-23-** ## **R.S.A. No.199/2012** for specific performance can be granted to the plaintiff. (Prabhakaran v. Bhavani and Otheres1974 KLT 15 = AIR 1974 Kerala 153). In a suit for specific performance of a contract it is necessary for the purchaser to show that he was ready and willing to fulfill the terms of the agreement, that he had not abandoned the contract and that he had kept the contract subsisting. This burden is upon the purchaser. ( _Swarnam Ramachandran v. Aravacode Chakungal Jayapala_ - (2004) 8 SCC 689). A plea in the plaint by itself is not sufficient. There should also be proof of readiness and willingness. ( _Pushparani S. Sundaram and Others v. Pauline Manomani James_ - (2002)9 SCC 582).” 28. It cannot be said that the plaintiff was always ready and willing to perform his part of the contract as found by the courts below. The reason for the same has already been adverted to. At any rate, it is felt that the plaintiff is not entitled to a decree of specific performance. On considering the totality of the circumstances, it is felt that it will be inappropriate to grant a decree of specific **-24-** ## **R.S.A. No.199/2012** performance in the suit. 29. The second appeal is therefore allowed. The decree passed by the courts below are set aside and a decree is passed on the following terms: (a) The prayer for specific performance is declined. (b) However, the plaintiff is granted a decree for a sum of 20,000/- with 6% interest from the date of suit till₹ realization both personally and also proceedings against the assets of the defendant. The plaintiff is entitled to his costs through out. Sd/- **P.BHAVADASAN JUDGE** ds //True Copy// P.A. To Judge