PUTHIYONNAN SREEDHARAN S/O.SANKARAN v AYILLYATH YADUNATH NAMBIAR

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE K.P.JYOTHINDRANATH THURSDAY, THE 12TH DAY OF APRIL 2018 / 22ND CHAITHRA, 1940 RFA.No. 269 of 2008 AGAINST THE JUDGMENT IN OS 111/2005 of ADDL.SUB COURT, THALASSERY DATED 30-07-2007 ## APPELLANT(S)/DEFENDANT: (*) PUTHIYONNAN SREEDHARAN S/O.SANKARAN, AGED 67, G SON'S APPARELS,, EP VI 2000, KUTTIKKAKAM, P.O. EDAKKAD, KANNUR. (*Name and address corrected) (*THE NAME AND ADDRESS OF THE APPELLANT STANDS CORRECTED AS “P.SREEDHARAN, SARAL, F 45, EAST OF KAILASH, NEW DELHI 110065” AS PER ORDER DATED 17.9.2008 IN IA NO.3542/2008) BY ADV.SRI.MILLU DANDAPANI ## RESPONDENT(S)/PLAINTIFF;: AYILLYATH YADUNATH NAMBIAR S/O.PADMANABHAN NAMBIAR, RESIDING AT 90-A/3, WELLESLY ROAD, BURNASSERY, KANNUR. R1 BY ADV. SRI.P.MARTIN JOSE R1 BY ADV. SRI.THOMAS P.KURUVILLA R1 BY ADV. SRI.P.PRIJITH R1 BY ADV. SRI.S.SREEKUMAR (SR.) THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 30-01-2018, THE COURT ON 12-04-2018 DELIVERED THE FOLLOWING: ## **A.M. SHAFFIQUE & K.P.JYOTHINDRANATH, JJ.** ============================== RFA No. 269 of 2008 ==================== Dated this, the 12[th] day of April, 2018 ## **J U D G M E N T** ## _**Shaffique, J.**_ The defendant in a suit for specific performance of a contract for sale of plaint schedule property having an extent of 89 cents is the appellant herein. 2. The short facts are as under:- Plaintiff and defendant entered into an agreement for sale of the plaint schedule property for a consideration of `70,000/- per cent in regard to item No.1 (43 cents) and `75,000/- per cent for item No.2 (46 cents). The agreement was executed on 20/1/2005 on which date a sum of `50 lakhs was paid as advance by the plaintiff to defendant. 3. As per the agreement, the sale deed was to be executed within four months from the date of agreement. When it was noticed that the defendant was trying to alienate the property to strangers, plaintiff filed OS No. 69/2005 seeking for an injunction restraining RFA No.269/08 -:2:- the defendant from alienating the plaint schedule property. In the written statement filed to the above suit, plaintiff had come to know that the defendant has no intention to assign the plaint schedule property. Expressing readiness and willingness to perform his part of the contract, plaintiff issued a lawyer's notice dated 25/4/2005 calling upon the defendant to perform his part of the agreement for which the defendant had sent a reply on 7/5/2005 stating that he is not prepared to perform the agreement. The suit was therefore filed seeking specific performance of the contract or in the alternative for a decree for refund of the advance amount with 12% interest. 4. Defendant filed written statement denying the execution of the agreement and he had not received any amount as advance. According to the defendant, plaintiff had exercised deception and has managed to prepare an agreement by fabrication and therefore defendant sought for dismissal of the suit. He further averred that he was a successful businessman at New Delhi and was residing there for the last 33 years along with his wife and daughter. He was engaged in export business. The business went into loss and he was experiencing financial RFA No.269/08 -:3:- problems. He decided to settle the liabilities and was on the look out for a loan. He required `1.25 crores to tide over the financial difficulties. He also thought of selling one item of the plaint schedule property and advertisements were released in Mathrubhumi and Rashtra Deepika daily. He contacted his wife's uncle Mr.Ramakrishnan who acted as his confidant. He trusted Mr.Ramakrishnan who agreed to arrange buyers for the plaint schedule property. Accordingly, photostat copies of the documents of title were given to Ramakrishnan. Mr.Ramakrishnan told him that he could not arrange any buyers but could arrange for a loan on the security of the property. Defendant agreed to the said proposition and wanted `1.25 crores and defendant offered to repay the said amount in 6 months with 8% interest. Ramakrishnan introduced the defendant to plaintiff who assured him to provide with the loan. For the aforesaid purpose, plaintiff and Ramakrishnan wanted the defendant to give his signed blank stamp papers and other blank papers to be used as security for the repayment of loan. Defendant did not suspect the bonafides of Ramakrishnan and the plaintiff also appeared to be a genuine person. He therefore signed blank stamp papers and other papers RFA No.269/08 ## -:4:- and gave it to Ramakrishnan. However, no money was paid to him. He never suspected that the said signed papers will be used to make an agreement for sale of immovable property. He further submits that he had even filed a complaint before the police alleging forgery and the crime is under investigation. That apart, he did not know about the filing of the case. Later he came to know that a civil suit was filed before the Munsiff's Court. Though no summons was served, he found out through his lawyer that the plaintiff had filed the suit against the defendant. According to him, the idea of the plaintiff was to throw the defendant from his property by giving a wrong address. It is also contended that OS No.69/2005 was filed by the plaintiff with a vexatious view and he has no connection whatsoever with the 2[nd] defendant mentioned in the said suit. ## _-_ The Trial Court framed the following issues: 1. _Whether, the plaintiff is entitled for a decree for specific performance of contract?_ 2. _Whether the defendant has received the advance sale consideration and other executing agreement and promised to execute the sale deed with in the given time?_ 3. _Whether the agreement relied by the plaintiff is_ RFA No.269/08 -:5:- _forged and concocted?_ 4. _Whether the plaintiff is entitled to get the advance sale consideration?_ 5. _Relief and cost.”_ 5. The plaintiff examined 7 witnesses as PW1 to PW7 and relied upon Exts.A1 to A20. The defendant examined himself as DW1 and placed reliance on Exts.B1 to B41. The Trial Court having found that the agreement was validly executed and the defendant committed breach of contract directed the defendant to execute the sale deed in respect of plaint schedule item 1 and 2 in favour of the plaintiff after receiving the balance sale consideration. Defendant was also liable to pay the cost of the suit. 6. During the pendency of the above appeal, appellant had filed application IA No.194/2018 to depute an Advocate Commissioner to ascertain certain matters after conducting local inspection. Another application was filed as IA No.193/2018 to raise additional grounds in the memorandum of appeal. Similarly, the respondent had filed IA No.2420/2018 to receive additional evidence by producing an order dated 1/3/2013 of Income Tax Officer, Kannur. By separate orders, all these applications have RFA No.269/08 ## -:6:- been dismissed. 7. The learned senior counsel appearing for the appellant Smt.Sumathi Dandapani had raised the following contentions: (i) That the Court below was not justified in finding that Ext.A1 agreement was a genuine document, and that pursuant to the said agreement, the appellant had received `50 lakh as advance. (ii) That the suit itself was not maintainable. The plaintiff had filed an earlier suit OS No.69/2005 for an injunction to restrain the defendant from alienating the plaint schedule properties to any other person on the ground that attempts were being made by the defendant to sell the property in favour of the second defendant in the said case. The above suit was filed when OS No.69/2005 was pending before the Munsiff's Court and as such, the present suit is barred under O.II R.2 of the Code of Civil Procedure, 1908. (iii) Even assuming that the agreement was genuine, Court below failed to consider that the plaintiff was ready and willing to perform his part of the contract. (iv) That the Court below ought to have exercised the RFA No.269/08 -:7:- discretion under section 20 of the Specific Relief Act, and rejected the claim for specific performance. 8. Learned counsel also placed reliance upon the following judgments in support of her arguments. (i) _**Virgo Industries (Eng.) Private Limited v. Venturetech Solutions Private Limited**_ [(2013) 1 SCC 625] (ii) _**Sasidharan Nair v. Kunju Mohammed Unni & Ors.**_ [2017 (3) KLJ 942] (iii) _**Ramesh Chand v. Asruddin**_ [(2016) 1 SCC 653] (iv) _**Martin v. Devassy**_ [2015 (1) KLJ 569] (v) _**K.K.Mohandas and another v. Thankamma Pillai**_ [2015 (2) KLJ 285] - (vi) _**Paruthikkattuparambil Ayisha v. Permbra Abdul**_ - _**Nassar & Ors.**_ [2015 (3) KLJ 515] - (vii) _**Thomas v. Merlin Construction Company (P) Ltd.**_ - [2016 (3) KLT 84]. 9. On the other hand, learned senior counsel Sri. S.Sreekumar appearing on behalf of the respondent contended that the Court below had correctly appreciated the factual circumstances involved in the matter. Despite the contention RFA No.269/08 ## -:8:- urged by the defendant that the agreement was fabricated, no evidence was adduced to prove that it was a fabricated document. The oral testimony of the witnesses examined on the side of the plaintiff clearly proves the fact that the document had been executed, after it was prepared and the contrary contention is absolutely baseless. It is further contended that the Court below had correctly arrived at a conclusion that an amount of `50 lakhs was paid as advance and the defendant had committed breach of contract. Plaintiff's readiness and willingness to comply with the terms of contract had been proved. The court below has also considered as to whether the discretion should be exercised u/s 20 and it was found against the defendant. Since the Court below had arrived at the decision, based on sufficient material, there is no reason to upset the said finding of fact in exercise of the appellate jurisdiction. He also placed reliance upon the following judgments. (i) _**Alka Gupta v. Narender Kumar Gupta**_ [(2010) 10 SCC 141]. (ii) _**Rathnavathi and another v. Kavita Ganashamdas**_ [(2015) 5 SCC 223]. RFA No.269/08 -:9:- ## (iii) _**Velayudhan v. Velayudhan**_ [2001 (1) KLT 392]. 10. Having regard to the aforesaid factual situation, the first question to be considered is regarding the genuineness of Ext.A1 agreement. Learned counsel for the appellant points out that the signature of the seller is on the right hand side of the document whereas normally when an agreement is executed, seller signs on the left hand side. Another aspect pointed out is that perusal of the document itself would show that an attempt had been made to prepare it within the signed papers. Yet another circumstance shown is that in the third page of the agreement, an attempt is made to recite the contents within the said page itself and the names of the witnesses written on the left hand side, which itself evidences that the document is subsequently created after obtaining signatures. Yet another contention urged is that according to the plaintiff, the entire amount was paid as cash, which itself is not believable. 11. In the plaint, it is averred that on the date of agreement, plaintiff paid an amount of `50 lakhs as advance to the defendant and it was agreed that the balance consideration will be paid within 4 months from the date of agreement and on payment of RFA No.269/08 -:10:- the balance sale consideration, the defendant had to execute a sale deed in respect of the plaint schedule property. Plaintiff further alleges that on 01/02/2005, he had come to know that the defendant is going to assign the plaint schedule property to one Mr.Mohanan and that he had filed a suit as OS No.69/2005 before the Munsiff Court, Kannur seeking for an injunction to restrain the defendant from assigning the plaint schedule property. Plaintiff further contended that he was not in a position to file a suit for specific performance as the suit would be premature. He also contended that he had paid `1,00,000/- as brokerage commission in addition to `2,25,000/- paid by the defendant as brokerage. He also contended that the defendant had given possession of item 2 of plaint schedule to the plaintiff at the time of execution of the agreement and sought for an injunction restraining dispossession as well. An interim injunction was granted upto 20/5/2005. It is further alleged that from the written statement and counter statement filed in the said suit, the attitude of the defendant came to be known and the defendant has no intention to assign the plaint schedule property to the plaintiff pursuant to the agreement. Hence, after issuing notice, he has filed the suit. RFA No.269/08 -:11:- 12. In the written statement, as already stated, the defendant denied execution of the agreement. According to him, he had given blank signed stamp paper and other papers for obtaining a loan by mortgaging the property to Sri.Ramakrishnan and said documents had been utilized in order to create the agreement. 13. Court below, however placed reliance on the evidence of PW1, PW3 and PW6, and found that, there is sufficient evidence in regard to execution of the agreement and passing of advance consideration. In so far as there is no infirmity in their evidence in regard to execution of the document, it has to be accepted as proof of execution. The Court below also relied upon Ext.A5, a photocopy of a receipt which was produced before the Magistrate Court. It indicates that a sum of `1,25,000/- was received from P.Sreedharan and a sum of `50,000/- from A. Yadhunath as brokerage (Commission) for sale of land in RS No.944 W:1, Thana46 cents. Ext.A5(a) is an endorsement on the reverse of the said document, which according to the Court below is a letter written by plaintiff and given to Ramakrishnan for getting advance from intending buyers. This document is seen to have been marked as RFA No.269/08 -:12:- Ext.D2 before the criminal Court. Court below further placed reference on the evidence given by the defendant before the Magistrate. The complaint filed by him before the Judicial First Class Magistrate was marked as Ext.A15. In the said complaint, it is stated that the stamp paper was given from the house of Ramakrishnan whereas in the written statement it was indicated that he went along with Ramakrishnan to the house of plaintiff and Ramakrishnan had handed over those papers to plaintiff. It is further observed that the defendant had denied his signature in Exts.A4, A5 and A5(a) before the learned Magistrate whereas he has admitted his signatures in the said documents before this Court. Court below therefore proceeded to find that in order to save his property from being auctioned, he had entered into the agreement and after settling his liabilities, he is trying to withdraw from the agreement by setting up an unbelievable story. 14. What is to be considered is whether the findings by the Trial Court with reference to the above factors are either perverse or illegal. Ext.A1 is the agreement which apparently is signed by plaintiff as well as the defendant. That the defendant had signed on the right hand side of the document and the plaintiff had RFA No.269/08 ## -:13:- signed on the left side may not be of much relevance. It could be seen that the stamp papers were purchased in the name of the defendant and as rightly pointed out by the learned counsel for the appellant, in the third page of the document, an attempt had been made to avoid using another page probably for the purpose of giving the name and address of the witnesses to the document which is on the left hand side of the third page. The date of document is 20/1/2005 and the date also has been written by the defendant in the third page. Ext.A2, is a plan in respect of item No.1 and 2 of the plaint schedule which is admitted by the defendant. Ext.A4 is a handwritten document of Ramakrishnan where he confirms to have received a sum of `1,00,000/- from the plaintiff and `50,000/- from the defendant as brokerage (commission). The signature of plaintiff and defendant is also seen. It indicates that the commission had been paid for sale of land belonging to “P.Sreedharan”. This document is dated 20/1/2005. In other words, it seems that Mr.Ramakrishnan had received commission from plaintiff as well as the defendant. Exts.A4 and A5 basically creates a doubt. Normally commission is paid by the seller and it is not known under what circumstances RFA No.269/08 ## -:14:- the buyer pays commission. So, from the admitted pleadings, it is rather clear that Ramakrishnan was an intermediary either in the matter relating to arranging loan for defendant or for entering into Ext.A1 agreement. It has also come out in evidence of PW1 that he is not a person who is conversant with Malayalam language. Agreement is prepared in Malayalam and it is written by none other than Ramakrishnan. Therefore, Ramakrishnan has a major role to play in the transaction relating to the sale of property or any other transaction or arrangement between the parties. Plaintiff admits the fact that defendant initially wanted to sell half portion of the plaint schedule property at `70,000/- per cent. A draft agreement was prepared by one Ramachandran for purchasing 43 cents and a plan was also made. He thereafter got a draft prepared by a document writer one Mr.Manoj. During that time he never knew the defendant nor his financial crisis. He denied having asked for blank signed papers. He deposed that the agreement was prepared by the defendant. He is not a party to it. He further deposed that the original agreement was written by Ramakrishnan and he did not see him writing. He further stated that the suit was filed showing the address of defendant at RFA No.269/08 -:15:- Edakat. He is not residing in the property. There is only a shed. He further stated that the property was measured on 16/1/2005 and the draft sale deed was prepared on 18/1/2005. He had shown the draft to Adv.Jayakrishnan on 19/1/2005 who approved it with a modification. By the time he decided to purchase the balance 46 cents also for which a price was mentioned. He further deposed that his accounts would show withdrawal of the amount paid as brokerage. He is an income tax payee. His income tax statement would show payment of `2.25 lakhs. However, he had not produced any such document. He further states that he decided to purchase 46 cents on 18[th] evening. There was a negotiation. He further deposed that brokerage was paid for bringing buyer and seller together. It was Ramakrishnan who brought them together. His intention was to put up a hospital. He further deposed that a new draft was prepared and handed over to Ramakrishnan. He did not show it to his lawyer. The draft was read over to him. He did not get an English translation. He cannot read Malayalam, but he could understand. He further stated that item no.2 was handed over to him on the advice of his counsel. He had gone there and locked the house. RFA No.269/08 ## -:16:- He admits that complaints were filed against him and his father alleging that the document was fabricated and the defendant was cheated. Ramakrishnan is also an accused. Plaintiff further stated that he paid `50 lakhs in cash out of which `26,50,000/- was drawn from his business on 19[th] and 20[th] January, 2005 and also from ICICI Bank. On 19[th] he had withdrawn the amount from the company. The said money was withdrawn from the company's account. He further stated that his account will show the same. However, it is not an audited account. On 20[th] he had withdrawn `10 lakhs from ICICI Bank in the morning and in the evening he had withdrawn `24 lakhs. `16 lakhs came from the company account. He further stated that none of his account will show the payments to the defendant. He got a notice from the income tax department. They asked for the source. He had given reply and satisfied the IT department by producing his books of account. He further stated that as on 9/9/2004, he had only `144 in ICICI Bank, on 19/1/2005, `10 lakhs was transferred from the account of Hassan Kunju, on 20/1/2005. He had withdrawn `10 lakhs from the bank and the balance is only `144/-. On the same day, two cheques were credited and he further adds that those are for 10 RFA No.269/08 ## -:17:- lakhs and `2 lakhs. `2 lakhs was from his sister company and `10 lakhs was from Hassan Kunju business partner. He further deposed that he got pay order for `10 lakhs and `12 lakhs was transferred to his personal account from the company account. In further cross examination he states that on 20[th] he had withdrawn `10 lakhs from ICICI bank since the defendant insisted for cash payment and he had no bank account in Kannur. Therefore, he did not give any draft. He also stated that his company has accounts in Federal Bank and State Bank of Travancore and those accounts will show the withdrawals. He gave the amount before signing the agreement. It was handed over to defendant. He went inside the house in another room. He came back and told that the amount is correct. 15. PW2 is the Assistant Manager of ICICI Bank. He deposed that the plaintiff is having an account. The account statement from 01/1/2005 to 30/1/2005 has been produced as Ext.A6. 16. PW3 is Ramakrishnan. He supported the plaintiff. He identifies Ext.A1 as the document which he has prepared. He had signed at 3[rd] page. He deposed that `50 lakh was paid as advance to the defendant by the plaintiff. He also admitted to RFA No.269/08 -:18:- have received commission as per Exts.A4 and A5. He also deposed that site plan was prepared as Exts.A2 and A3. He further deposed that on 28/1/2005, defendant had approached him and stated that for the 43 cents, he required `5 lakhs more than what has been agreed which entry is marked as Ext.A5(a). According to him what is recorded is _“please pay_ ` _5 lakh rupee against one land due to Ramakrishnan against 43 cents”_ . According to him, the demand in Ext.A5(a) was for a further amount of `5 lakhs. He also stated that the property was measured even prior to execution of the agreement. In cross examination, he further states that the defendant had asked him to sell the entire property. That was in 2004 December. He had decided to go back to Delhi and settle there with his daughter. His daughter is in America. He had contacted the plaintiff alone and he had not contacted anybody else. During the first week of January, 2005 plaintiff came and visited the site. He said he liked the land, but he did not mention anything about the price. He took the plaintiff to the defendant in December, 2004 and he later said that it was during the first week of January, 2005. He did not interfere with the price. He only introduced plaintiff to defendant. RFA No.269/08 -:19:- He further deposed that the idea was to sell the property on the eastern side and the brokerage was also fixed. Defendant agreed to pay `1 lakh and the plaintiff `50,000/-. The agreement was also prepared. That was after 16/1/2005. The stamp paper was brought by defendant on 13/1/2005. He denied anything about the loan arrangement. He further stated that initially the agreement was written by document writer Ramachandran and thereafter by one Manoj. The agreement was written based on Manoj's draft. During cross examination he denied the suggestion that the document was prepared in signed stamp paper and papers. 17. PW4 is the Chief Manager of Federal Bank, Kannur. He deposed that Meethalath Hassan Kunju has an account with the Bank. He produced Ext.A9 which is computer print sheet of the account of Hassan Kunju. 18. PW5 is one T.Sahadevan who has retired as a Manager of Glexo Laboratory Production. He deposed that he knew the plaintiff. He saw 3-4 persons measuring the property on the opposite side of his house. It was the plaintiff and another person. He enquired with the plaintiff who said that he is proposing to buy RFA No.269/08 -:20:- half of the property and he had come to measure it. There was another person along with the plaintiff who was going to purchase the property. His name is Sreedharan. 19. PW6 is one Balan. He knew the plaintiff and defendant. He knew about the agreement between plaintiff and defendant. Agreement was executed on 20/1/2005. It was read by Ramakrishnan. He was also present along with the plaintiff and defendant. He saw `50 lakhs being paid in a bag. Defendant counted the money in the bag. After half an hour, he confirmed that it was `50 lakhs. Thereafter, the agreement was signed. He identified Ext.A1. In cross examination, he deposed that he was arrested in 2005 and thereafter he was enlarged on bail. In cross examination he also states that he heard that the agreement was prepared by Ramakrishnan and he has claimed `250/- as writing fee. He does not know whether defendant had paid the said amount. Ramakrishnan asked for money from plaintiff and he refused to give. Suggestion was that he was a worker connected with plaintiff's mother's house. He also denied the fact that he was arrested on 18/2/2005 from the house of plaintiff's mother. He further stated that he had gone to plaintiff's house on his RFA No.269/08 ## -:21:- request. He was asked to sign as a witness to the agreement. 20. PW7 is Rajendran who is the Accountant cum Cashier of Holy Flop Industries. He has produced the accounts, cash book and ledger for the year 2004-05. The transaction at page 32 is from 11/1/2004 ends on 5/2/2005 at page 34. He states that plaintiff had drawn `10 lakhs on 19/1/2004, `6,50,000/- on 20/1/2004 and `50,000/- on 25/1/2004. Apart from cash, on 20/1/2004, `12 lakhs was drawn through Bank by way of DD from the Federal Bank. In cross examination he states that after the death of plaintiff's father, from 9/6/2004, the concern is a partnership firm started by the plaintiff. In cross examination he states that in the ledger account book, the number of receipt is not shown. But he says that the computer number is available. But it may not be possible to know under which receipt the money was paid. Suggestion was that the account books were prepared for the purpose of the case. 21. Defendant while being examined as DW1 reiterated his contentions in the written statement and deposed that he had not entered into any agreement in terms of Ext.A1 and that he had not received any advance from the plaintiff. He also stated that RFA No.269/08 ## -:22:- the arrangement was to take a loan for which certain stamp papers and plain papers were signed and given, which according to him had been utilized for the purpose of preparing the agreement. He also deposed that the allegation that the documents produced as if he had paid commission to Ramakrishnan are all fabricated. His intention was only to sell 43 cents for which a plan was prepared and he had signed the same. Since Ramakrishnan asked him to give permission for him in writing to receive advance, he had given a document in writing which is now being utilized by stating that he had asked for more amount for the 43 cents. He also denied the fact that he insisted for receiving cash on the ground that he does not have a bank account. According to him, he has bank account in several banks at Kannur. In cross examination he admitted that he intended to sell 45 cents for which advertisement was released on 1[st] January. Though he denied having seen Ext.A1, he admitted his signature in Ext.A1. He however admitted having prepared Exts.A2 and A3 plans. According to him, he had entrusted those plans to Ramakrishnan. The entrustment was on 17[th] January, 2005. He further deposed that Ramakrishnan had offered to arrange loan RFA No.269/08 ## -:23:- for which he arranged stamp papers on 15[th] and he was asked to sign in two stamp papers and two white papers. When he was asked whether he used to sign in blank papers, according to him, he was facing life and death situation and he had not done it earlier. He stated that he had given a complaint to the Dy.S.P on 4[th] of February and to the Town Police on 8[th ] February. Crime was registered on the basis of his complaint which was marked as Ext.A16. Though he admitted his signatures in Exts.A4 and A5, he denied having given such receipts. According to him, Ramakrishnan had taken away the said documents from his table. He also admitted having given Ext.A5(a) on the request of Ramakrishnan. Ext.A17 is the statement given by him before the Magistrate Court wherein he had denied having signed the paper slip relating to commission paid to Ramakrishnan. 22. Taking into account the evidence available in the case, the question to be considered is whether the agreement is genuine or not. 23. There is no dispute about the fact that plaintiff and defendant entered into some arrangement for cash transaction and Ramakrishnan was the mediator. According to the plaintiff, RFA No.269/08 ## -:24:- the arrangement was to purchase defendant's property for which he had paid an advance of `50 lakhs. His evidence is supported by Ramakrishnan who is examined as PW3 and the execution of the agreement is further proved by the evidence of PW6 Balan. One aspect that may create doubt in the mind of the Court is regarding payment of `50 lakhs as cash. Therefore, primarily what is to be considered is whether plaintiff was in possession of `50 lakhs as cash for being paid to the defendant. Plaintiff in his evidence in chief has stated that _“the advance consideration was given by me using the money drawn from my bank account with ICICI Bank, Kannur and drawings from my business concern M/s Holy Props Industries, Thottada, Kannur”_ . Apparently no details had been given, but the plaintiff had produced a statement of account of ICICI Bank Ltd from 1/1/2005 to 30/1/2005, day book of Holy Props Industries for the year 2004-2005 as Ext.A7, page Nos. 32 and 33 are seen recorded as Exts.A7(a) and A7(b) and the ledger of Holy Props Industries is produced as Ext.A8. The ledger folio of capital account of one Hassan is Ext.A8(a), ledger folio of capital account of Hassan and drawing account of plaintiff is produced as Exts.A8(a) and A8(b), statement of account of RFA No.269/08 -:25:- Hassan Kunju in Federal Bank from 1/1/2005 to 31/1/2005 is marked as Ext.A9. Ext.A6 statement of account of ICICI Bank given to the plaintiff would show that on 19/1/, there is a transfer of `10 lakhs and the said amount is seen withdrawn by cash on 20/1/2005, `24 lakhs is seen to have come by way of deposits on 20/1/2005 and the said amount had been withdrawn by cash. This would indicate that the plaintiff had withdrawn cash amounting to `34 lakhs. Ext.A9 is the account details of Hassan Kunju to indicate that he had withdrawn `4 lakhs on 14/1/2005 and `6 lakhs on 15/1/2005. This document may not have any relevance as the plaintiff does not have a case that Mr.Hassan Kunju had paid him any amount. Ext.A7 is the cash book relating to Holy Props Industries and the entries are at pages 32 and 33 which are marked as Exts.A7(a) and A7(b). Ext.A7(a) only indicates that there is a credit of `10 lakhs into the capital account of Hassan which we do not think is much relevant as there is no such pleading that the plaintiff had utilized the funds of Hassan. However, Ext.A7(b), page 33 of Ext.A7 would show that, on 19/1/2005, the plaintiff had drawn an amount of `10 lakhs from the firm and on 20/1/2005, he had drawn an amount of RFA No.269/08 -:26:- `6,50,000/-. Ext.A8(a) is the capital account of Hassan for the period from 9/6/2004 to 31/3/2005 and it would indicate that he had received `10 lakhs on 18/1/2005. Ext.A8(b) is the page indicating the drawing account of plaintiff in Holy Props Industries. The ledger account would indicate that `10 lakhs was paid to him on 19/1/2005, `6,50,000/- on 20/1/2005 and `12 lakhs through Federal Bank overdraft cash credit account. It is quite improper that all payments other than petty amounts are debited in the account of a partner of a firm by cash. In normal circumstance and as per good accounting practices, all payments to partners of a firm are made by way of cheques or Demand Drafts. 24. No firm or institution which maintains proper accounting practices keeps cash of such magnitude for being paid to its partners. If at all cash is required, it will be taken from an account maintained by the firm. Unless corresponding entries are shown in the firm's account, showing the withdrawal. At any rate, it is evident from Ext.A6 that the plaintiff had withdrawn `34 lakhs on 20/1/2005. Therefore, as on the said date, he had entered into a payment transaction of `34 lakhs cannot be disputed. 25. When PW7, the Accountant cum Cashier was examined, RFA No.269/08 -:27:- he had stated that plaintiff had taken `10 lakh on 19/1/2004, `6,50,000/- on 20/1/2004 and `50,000/- on 25/1/2004. The year might be a mistake as is evident from the ledger which indicates that the dates are of the year 2005. Going by his evidence, the total amount taken is `29 lakhs Therefore, it has to be held that the plaintiff had sufficient funds with him as on 20/1/2005. 26. The next question is whether the said amount of `50 lakhs had been paid to the defendant. On an analysis of the evidence of PW1, 3 and 6, and the documents relied upon by the plaintiff, when the Trial Court had believed their version, in the absence of any perversity, there is no reason to overturn the said finding. 27. Therefore, we have to proceed on the basis that plaintiff had paid `50,00,000/- to the defendant. If the payment has been made, we have to proceed on the basis that the agreement is validly executed. The Court below had relied on Exts.A4, A5 and A5(a) to come to a finding that the agreement is genuine. Though as contended by the learned senior counsel appearing for the appellant, there are certain infirmities in accepting Ext.A1, as a genuine agreement, we do not think that the Court below had RFA No.269/08 -:28:- committed any perversity in arriving at a conclusion that the agreement is genuine. Therefore we have to proceed on the basis that the agreement is genuine. 28. The next question is whether the plaintiff was always ready and willing to perform his part of the agreement as provided u/s 16 of the Specific Relief Act. In this case immediately after execution of the agreement Ext.A1, plaintiff apprehended that the defendant may alienate the properties in favour of another person. Therefore the plaintiff filed a suit before the Munsiff's Court seeking an injunction to restrain the defendant from alienating the plaint schedule property in favour of the 2[nd] defendant. He also took up a contention that a portion of the plaint schedule property had been given possession to him. In the counter affidavit and written statement filed by the defendant, he denied execution of the agreement and stated that the same was fabricated virtually denying the contract between the parties. We have already observed that from the available materials, we have to proceed on the basis that the agreement is valid. However, it is for the plaintiff to aver and prove that he was ready and willing to perform the contract. In the plaint, it is averred that plaintiff is RFA No.269/08 -:29:- always ready and willing to perform his part of the contract and is ready to pay the balance consideration and to execute the sale deed. He had also sought for an alternate relief to get back the advance, the brokerage commission which he had paid and a further amount of `10 lakhs as compensation. In the written statement, as already stated, the defendant had denied execution of the agreement. 29. In order to grant specific performance of an agreement for sale of immovable property, the plaintiff will have to prove that he is in a position to raise further funds. The total consideration as agreed will come to `64,60,000/-. Therefore, he has a contention that `50 lakhs had been paid and the balance is only `14,60,000/-. In so far as the plaintiff is a business man and he has produced some records to show that he is in a position to raise sufficient funds, his readiness cannot be disputed and there is sufficient evidence for the same. 30. Now the question is whether this Court should grant specific performance or not by exercising the discretion u/s 20 of the Specific Relief Act. 31. Before considering the aforesaid fact, an argument on RFA No.269/08 -:30:- maintainability of the suit requires consideration. Learned counsel for the appellant placed reliance upon the judgment in _**Virgov Industries**_ (supra). That was a case in which the parties entered into two agreements of sale and the plaintiff filed two suits restraining the defendant from alienating or encumbering or dealing with the plaint schedule properties to any other parties other than the plaintiff. In the suit, it was stated that the period of 6 months fixed for execution of the sale deed was not over and therefore the plaintiff is not claiming specific performance. After the period specified for execution of sale deed, plaintiff filed two other suits seeking a decree for execution and registration of sale deeds in respect of the same property and for delivery of possession. It was contented that despite issuance of notice to defendant, the sale deeds were not executed. The defendant filed two separate applications under Article 227 to strike off the plaints in the suits for specific performance on the ground that Order 2 Rule 2 of Civil Procedure Code, 1908 (for short “CPC”) is a bar to the maintainability of both the suits. It was contended that at the time of filing of the first set of suits, it was open for the plaintiff to claim the relief of specific performance. Since the RFA No.269/08 -:31:- plaintiff did not seek the said relief nor did the plaintiff obtained leave from the Court, the suits for specific performance filed were barred under Order 2 Rule 2 of CPC. The Apex Court after evaluating the respective contentions held at paragraphs 13 to 17 as under: _“13. A reading of the plaints filed in CSs Nos. 831 and 833 of 2005 show clear averments to the effect that after execution of the agreements of sale dated 27-7-2005 the plaintiff received a letter dated 1-8-2005 from the defendant conveying the information that the Central Excise Department was contemplating issuance of a notice restraining alienation of the property. The advance amounts paid by the plaintiff to the defendant by cheques were also returned. According to the plaintiff it was surprised by the aforesaid stand of the defendant who had earlier represented that it had clear and marketable title to the property. In Para 5 of the plaint, it is stated that the encumbrance certificate dated 22-8-2005 made available to the plaintiff did not inspire confidence of the plaintiff as the same contained an entry dated 1-10-2004. The plaintiff, therefore, seriously doubted the claim made by the defendant regarding the proceedings initiated by the Central Excise Department. In the aforesaid paragraph of the plaint it was averred by the plaintiff that the defendant is “finding an excuse to cancel the sale agreement and sell the property to some other third party”. In the aforesaid paragraph of the plaint, it was further stated that “in this background, the plaintiff_ RFA No.269/08 -:32:- _submits that the defendant is attempting to frustrate the agreement entered into between the parties”._ _**14.** The averments made by the plaintiff in CSs Nos. 831 and 833 of 2005, particularly the pleadings extracted above, leave no room for doubt that on the dates when CSs Nos. 831 and 833 of 2005 were instituted, namely, 28-8-2005 and 9-9-2005, the plaintiff itself had claimed that facts and events have occurred which entitled it to contend that the defendant had no intention to honour the agreements dated 27-7-2005. In the aforesaid situation it was open for the plaintiff to incorporate the relief of specific performance along with the relief of permanent injunction that formed the subject-matter of the above two suits. The foundation for the relief of permanent injunction claimed in the two suits furnished a complete cause of action to the plaintiff in CSs Nos. 831 and 833 to also sue for the relief of specific performance. Yet, the said relief was omitted and no leave in this regard was obtained or granted by the Court._ _**15.** Furthermore, according to the plaintiff, which fact is also stated in the plaints filed in CSs Nos. 831 and 833, on the date when the aforesaid two suits were filed the relief of specific performance was premature inasmuch as the time for execution of the sale documents by the defendant in terms of the agreements dated 27-7-2005 had not elapsed. According to the plaintiff, it is only after the expiry of the aforesaid period of time and upon failure of the defendant to execute the sale deeds despite the issuance of legal notice dated 24-2-2006 that the cause of action to claim the relief of specific performance had accrued. The above stand of the plaintiff found favour with_ RFA No.269/08 -:33:- _the High Court. We disagree. A suit claiming a relief to which the plaintiff may become entitled at a subsequent point of time, though may be termed as premature, yet, cannot per se be dismissed to be presented on a future date. There is no universal rule to the above effect inasmuch as “the question of a suit being premature does not go to the root of the jurisdiction of the Court” as held by this Court in Vithalbhai (P) Ltd. v. Union Bank of India._ _**16.** In Vithalbhai (P) Ltd. case this Court has taken the view that whether a premature suit is required to be entertained or not is a question of discretion and unless “there is a mandatory bar created by a statute which disables the plaintiff from filing the suit on or before a particular date or the occurrence of a particular event”, the Court must weigh and balance the several competing factors that are required to be considered including the question as to whether any useful purpose would be served by dismissing the suit as premature as the same would entitle the plaintiff to file a fresh suit on a subsequent date. We may usefully add in this connection that there is no provision in the Specific Relief Act, 1963 requiring a plaintiff claiming the relief of specific performance to wait for expiry of the due date for performance of the agreement in a situation where the defendant may have made his intentions clear by his overt acts._ _17. The learned Single Judge of the High Court had considered, and very rightly, to be bound to follow an earlier Division Bench order in R. Vimalchand v. Ramalingam holding that the provisions of Order 2 Rule 2 CPC would be applicable only when the first suit is_ RFA No.269/08 ## -:34:- _disposed of. As in the present case the second set of suits were filed during the pendency of the earlier suits, it was held, on the ratio of the aforesaid decision of the Division Bench of the High Court, that the provisions of Order 2 Rule 2(3) will not be attracted. Judicial discipline required the learned Single Judge of the High Court to come to the aforesaid conclusion. However, we are unable to agree with the same in view of the object behind the enactment of the provisions of Order 2 Rule 2 CPC as already discussed by us, namely, that Order 2 Rule 2 CPC seeks to avoid multiplicity of litigations on the same cause of action. If that is the true object of the law, on which we do not entertain any doubt, the same would not stand fully subserved by holding that the provisions of Order 2 Rule 2 CPC will apply only if the first suit is disposed of and not in a situation where the second suit has been filed during the pendency of the first suit. Rather, Order 2 Rule 2 CPC will apply to both the aforesaid situations. Though direct judicial pronouncements on the issue are somewhat scarce, we find that a similar view had been taken in a decision of the High Court at Allahabad in Murti v. Bhola Ram and by the Bombay High Court in Krishnaji Ramchandra v. Raghunath Shankar.”_ 32. It is pointed out that this judgment was followed by a Division Bench of this Court in _**Thomas v. Merlin Construction Company (P) Ltd**_ [2016 (3) KLT 84]. 33. In _**Rathnavathi**_ (supra), the Apex Court held that when the plaintiff contends that he was put in possession of the RFA No.269/08 -:35:- property pursuant to a contract for sale and if there is an attempt to dispossess him, he gets a cause of action for filing a suit for permanent prohibitory injunction restraining defendant from interfering with possession over the suit property. As far as specific performance for agreement of sale is concerned, it is a separate cause of action. In order to invoke O.2 R.2, cause of action in the latter suit must be the same as that in previous suit. 34. On the other hand, learned senior counsel appearing for the respondent has placed reliance upon the Apex Court judgment in _**Alka Gupta**_ (supra). In the above case, the question considered was in the absence of a plea of bar under Order 2 Rule CPC, whether the Court can consider it or not. Relying upon an earlier judgment of this Court in _**Gurbux Singh v. Bhooralal**_ (AIR 1964 SC 1810), it was held that _“Unless the defendant pleads the bar under Order 2 Rule 2 of the Code and an issue is framed focusing the parties on that bar to the suit, obviously the Court cannot examine or reject a suit on that ground. The pleadings in the earlier suit should be exhibited or marked by consent or at least admitted by both parties. The plaintiff should have an opportunity to explain or demonstrate that the second suit was based on a different cause of action.”_ RFA No.269/08 -:36:- 35. Coming to the facts of this case, apparently no such plea was raised by the defendant that the suit was barred under Order II Rule 2 CPC and no such issue had been framed by the trial court. Therefore such a plea cannot be raised at the appellate stage. But it is pointed out by the learned counsel for appellant that all material facts are available to consider the said plea by the appellate Court and it is only a question of law. We do not think that a plea under Order 2 Rule 2 of CPC is purely a question of law. It depends upon the facts of the case as well. The question was whether plaintiff had a cause of action to file the suit at the time when he filed OS No.69/2005 before the Munsiff's Court. The plant in the said suit is produced as Ext.B3. The cause of action stated was plaintiff's understanding that the defendant was attempting to wriggle out of the contract and intending to assign the property in favour of 2[nd] defendant. During the pendency of the said suit, the present suit came to be filed after issuing a lawyer's notice seeking specific performance. By that time the plaintiff knew very well that the defendant had denied execution of the agreement and had taken a contention that the agreement is not genuine. OS No.69/2005 was withdrawn only after filing of RFA No.269/08 -:37:- the present suit. We are of the view that both the suits were founded on two separate cause of actions. One cause of action was, during the currency of the agreement, defendant proceeded to assign the property in favour of third parties and the second cause of action is that despite issuance of notice seeking specific performance, defendant did not perform the contract. However, in _**Virgo Industries**_ (supra), the Apex Court observed that when the plaintiff avers in the plaint that defendant is finding an excuse to cancel the agreement and sell the same to some other third party and further states that the defendant is attempting to frustate the agreement entered into between the parties, a cause of action arises for specific performance. But it is to be noticed that in _**Virgo Industries**_ (supra) there is an additional factor which was taken note of by the Apex Court. The agreements for sale was executed on 27/7/2005. Plaintiff received a letter dated 1/8/2005 from the defendant conveying the information that the Central Excise Department was contemplating issuance of a notice restraining alienation of the property, and the advance amounts paid by the plaintiff to the defendant were returned, by cheques. Therefore, that was a case in which even before filing of RFA No.269/08 -:38:- a suit for injunction, the defendant had rescinded the contract by returning the advance which of course had given rise to a cause of action to seek specific performance. But in the present case, the defendant did not rescind the contract whereas according to him, the contract itself is not genuine and fabricated. Therefore, the plaintiff gets a right to file a suit for specific performance only when such a contention is urged. Such a contention had been urged only in the written statement and objection filed before the Munsiff's Court in OS No.69/2005. Immediately after the expiry of the period covered by the agreement, the suit is filed on 17/5/2005. Therefore, we do not think that the suit is barred under O.2 R.2 of CPC and the plaintiff had not omitted to sue for specific performance while filing OS No.69/2005. 36. The principle of law in regard to specific performance in a long line of judgments had been highlighted by the learned counsel appearing on either side. In _**Ramesh Chand**_ (supra), the Apex Court held at paragraph 8 as under:- _**“8.** Section 20 of the Specific Relief Act, 1963, provides that 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. However, the_ RFA No.269/08 -:39:- _discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles. Sub-section (2) of Section 20 of the Act provides the three situations in which the court may exercise discretion not to decree specific performance. One such situation is contained in clause (a) of sub-section (2) of Section 20 which provides that 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, the decree of specific performance need not be passed. It is pertinent to mention here that in the present case, though execution of the agreement dated 21-6-2004 between the parties is proved, but it is nowhere pleaded or proved by the plaintiff that he got redeemed the mortgaged land in favour of Defendant 2 in terms of the agreement, nor is it specifically pleaded that he was ready and willing to get the property redeemed from the mortgage.”_ 37. In _**K.K.Mohandas**_ (supra) a Division Bench of this Court held that if the contract entered into between the parties is seen to be not fair and is one sided, the Court will not enforce specific performance. 38. In _**Paruthikkattuparambil Ayisha**_ (supra), Division Bench of this Court held that for exercising discretion u/s 20(1) of RFA No.269/08 -:40:- the Specific Relief Act, the _bona fides_ of the plaintiff, delay in approaching the Court, conduct of parties and such other circumstances can be taken note of. 39. In _**Thomas**_ (supra), another Division Bench held that when there is a strong indication to show that the agreement even if genuine was not intended to be followed up by sale deed between the parties, it will be unsafe to grant a decree for specific performance. 40. The question to be considered is whether Court below was justified in exercising the jurisdiction to grant specific performance in the facts and circumstances of the case. As we have already observed, defendant has a case that Ext.A1 agreement is not genuine and he has not received the consideration. The said contention is not accepted by us. But despite the said fact, certain circumstances which has evolved in this case tends us to deny specific performance on account of the following reasons: (i) That a huge sum of `50 lakhs was paid as cash to the defendant which covers almost major portion of the sale consideration. Under normal circumstance when huge amounts RFA No.269/08 -:41:- are involved, some payments are paid either by cheque or demad draft. (ii) Plaintiff is a person who is capable of purchasing the entire property by paying the entire sale consideration at one stretch. If he could pay fifty lakhs on 20.1.2005, he could have paid the balance amount within a short time. (iii) It is not known under what circumstance a period of four months had been stated for complying with the terms of contract. (iv) Plaintiff claims that he was put in possession of the property which appears to be incorrect. There is no evidence to prove the said fact. (v) Plaintiff is a person who does not know to read Malayalam, but still the agreement is executed in Malayalam. (vi) The agreement is written by PW3 who is an interested party to the transaction. He claims to have received commission from both the parties which is not the practice followed in such situations. (vii) Defendant has a contention that his intention was only to get a loan for which he had signed certain papers. But he further states that he did not receive the loan. According to him, RFA No.269/08 ## -:42:- he had not received any amount from the plaintiff which of course we don't agree. (viii) The actual amount paid by the plaintiff to defendant can only be discerned from the agreement, the genuineness of which is doubted by the defendant. (ix) Exts. A5 and A5(a) though had been relied upon by the Court below, the manner in which the said documents are executed and the purpose is doubtful. (x) The intention of the defendant was to sell only one item of property as is evident from Exts.B1 and B2 advertisements. The advertisements were published on 1[st] January, 2005. A person who is in dire need of finances will either sell his property or he may take loan. Taking into account the factual circumstances, it is possible that a loan was arranged by the plaintiff for which a document in the nature of Ext.A1 was prepared. 41. Defendant's case is that market value of property will come to `8 crores. But there is no evidence to substantiate the said contention. A criminal complaint has been filed by the defendant before the Judicial First Class Magistrate Court, Kannur on 16/2/2005 (Ext.B14), the investigation of which is still pending. RFA No.269/08 ## -:43:- Ext.B13 is the First Information Report. It relates to an allegation that he was threatened and attacked by a group of people on 4/2/2005 at 6 pm and the assailants which includes plaintiff and PW3 and certain others had threatened him asking him to vacate the property and he was threatened that he will be killed. Ext.B15 is the chargesheet dated 16/2/2005 wherein the plaintiff along with PW3 and PW6 were made accused. Charge was under Sections 417, 420, 465, 467, 471 r/w S.34 I.P.C. Final report had been filed alleging fabrication of the agreement. Ext.B19 is the certified copy of a complaint filed by plaintiff against the defendant and PW3 alleging offences u/s 420, 406 r/w 109 I.P.C. This was filed before the JFCM, No.II, Kannur on 18/5/2005. Ext.B24 is the certified copy of order dated 23/3/2005 in IA No.358/2005 in OS No.69/2005. Though an order of injunction was granted against alienation of the property, the Court below did not grant any injunction restraining the defendant from interfering with the peaceful possession of the plaint schedule. The suit OS No.69/2005 was withdrawn by filing IA No.219/2006 on 17/1/2006. The suit was dismissed as withdrawn as per order dated 17/1/2006. RFA No.269/08 -:44:- 42. Taking into account the substantial contentions urged on behalf of either side, especially when an allegation regarding fabrication of document is being prosecuted by the defendant, it is not appropriate to grant specific performance. The Court below had failed to consider the above aspect of the matter in the light of the settled legal principles. Court below proceeded on the basis that when execution of Ext.A1 document is proved, the suit has to be decreed. As already stated, there is sufficient material before this Court to doubt the respective contentions of the parties. Under such circumstances, it is only taking into account the preponderance of probabilities **,** Court below had found that Ext.A1 agreement is genuine based on sufficient material and such finding is not perverse. 43. In the said circumstances, we are of the view that interest of justice would have been served by directing refund of amount paid by the plaintiff to defendant rather than directing specific performance of the agreement. Accordingly, we allow this appeal setting aside the decree and judgment of the Court below and the suit is decreed as under; (i) The defendant shall pay the plaintiff an amount of `50 RFA No.269/08 -:45:- lakhs with interest at the rate of 12% per annum from 20/1/2005 till realisation and the entire cost of the proceedings, ie. cost of the suit before the Trial Court and this Court. (ii) The decree shall be charge on the plaint schedule property. Sd/- ## **A.M. SHAFFIQUE, JUDGE** Sd/- ## **K.P.JYOTHINDRANATH, JUDGE** Rp //True Copy// PS to Judge