Rajendran v. Kuttappan

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.SOMARAJAN** **TUESDAY ,THE 26TH DAY OF FEBRUARY 2019 / 7TH PHALGUNA, 1940** **RSA.No. 594 of 2011** **AGAINST THE JUDGMENT AND DECREE IN AS 65/2007 of DISTRICT COURT,PATHANAMTHITTA DATED 29-01-2011** **AGAINST THE JUDGMENT AND DECREE IN OS 73/2001 of SUB COURT, PATHANAMTHITTA DATED 29-03-2006** ## **APPELLANT/RESPONDENT/PLAINTIFF:** **RAJENDRAN, S/O.NARAYANAN, RAJENDRA BHAVAN, PUTHUSSERIBHAGOM MURI, ERATHU VILLAGE, ADOOR TALUK.** **BY ADV. SRI.K.JAGADEESCHANDRAN NAIR** ## **RESPONDENT/APPELLANT/DEFENDANT:** **KUTTAPPAN, S/O.CHENNAN, CHARUVILAYIL HOUSE, PUTHUSSERIBHAGOM MURI, ERATHU VILLAGE, ADOOR TALUK - 689 711.** **BY ADV. SRI.LIJU. M.P** **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 26.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **RSA.No. 594 of 2011 2** ## **JUDGMENT** A suit for specific performance of contract for sale decreed by the trial court, but it was reversed in appeal. Aggrieved by the said reversal, the plaintiff came up with this appeal. 2. Ext.A2 is the contract for sale by which 20 cents of property and the building thereon agreed to be sold at the rate of Rs.8,500/- per cent for a total amount of Rs.1,70,000/- within a period of five months from the date of agreement, by which an amount of Rs.10,000/- received by way of advance out of sale consideration. The agreement was executed on 2.10.2000. Since the plaintiff not complied with its terms and conditions, a suit for specific performance is initiated. Though it was decreed by the trial court, it was reversed by the first appellate court granting a decree of recovery of advance amount with interest. ## **RSA.No. 594 of 2011 3** 3. There is no appeal as against the decree granting the recovery of advance amount. 4. The learned counsel for the appellant submitted that specific performance was rejected by the first appellate court solely on the reason that the plaintiff failed to prove readiness and willingness in performing their part of contract. It was also submitted that really there is no necessity for adducing evidence to show the readiness and willingness as the pleading raised in the plaint not specifically challenged and took support from Order 8 Rule 5 CPC: **==> picture [297 x 11] intentionally omitted <==** allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability:” It is a settled position of law that if an ## **RSA.No. 594 of 2011 4** allegation made in the plaint is not specifically denied in the written statement, it is treated as admitted, as was also held by this Court in _**Balraj Taneja v.Sunil Madan (1999) 8 SCC 396)**_ . The legal position was further reiterated in _**Standard Chartered Bank v. Andhra Bank Financial Services Limited and Others (2016) 1 Supreme Court Cases 207).**_ 5. But the present suit is one for specific performance of contract for sale prior to the amendment of Section 20 of the Specific Relief Act. The courts are not bound to grant specific performance of contract for sale of immovable property though it is found to be lawful to do so. The discretion incorporated under Section 20 of the Specif Relief Act (before its amendment) stands for the discretion not for granting any relief but for refusing a relief of specific performance. In other **RSA.No. 594 of 2011 5** words, the discretion as envisaged under Section 20 of Specific Relief Act prior to its amendment stands on a different pedestal from that of other provision dealing with discretion. Normally, the discretion can be exercised to grant a specific relief to promote justice. But the principle under Section 20 of the said Act stands on a different footing that the discretion can be exercised not for granting a relief but for refusing it. The learned counsel for the appellant canvased attention of this court in _**Anurag Kumar Singh and**_ ## _**others v. State of Uttarakhand and others (2016) 9**_ _**Supreme Court Cases 426)**_ so as to show what actually amounts to discretion by referring paragraph 16 of the said judgment; which reads as follows: “Judicial discretion can be exercised by a court only when there are two or more possible lawful solutions. In any event, courts cannot give ## **RSA.No. 594 of 2011 6** any direction contrary to the statute or rules made thereunder in exercise of judicial discretion. It will be useful to reproduce from _**Judicial Discretion**_ (1989) by Aharon Barak which is as follows: “Discretion assumes the freedom to choose among several lawful alternatives. Therefore, discretion does not exist when there is but one lawful option. In this situation, the Judge is required to select that option and has no freedom of choice. No discretion is involved in the choice between a lawful act and an unlawful act. The Judge must choose the lawful act, and he is precluded from choosing the unlawful act. Discretion, on the other hand, assumes the lack of an obligation to choose one particular possibility among several.” As discussed earlier, what is incorporated under Section 20 of Specific Relief Act is the power of the court to exercise discretion not to grant specific relief and not for grant of any particular relief. So it has got its own peculiar character. A Division Bench of this Court (in which I was also ## **RSA.No. 594 of 2011 7** a member) had the occasion to consider the above said question in _**Antony K.O and Another v. M.K.Krishnankutty Menoki and Others (2017 (1) KHC 479: 2017(1) KHC 479: 2017(1)KLJ 357:ILR 2017(1) Ker. 444: AIR 2017 NOC 202**_ and settled the legal position as follows: “It says that the Court is not bound to grant specific performance as it is a discretionary one even though it is lawful to do so. It further states that the discretion has to be exercised in a sound and reasonable manner and it should be the one capable of correction by an Appellate Court. The various expressions embodied under S.20 of the Specific Relief Act would show that the Court is not bound to grant a decree for specific performance, even though it was found to be lawful to do so and the Court has to exercise its discretion. The question at what time the Court has to exercise its discretion is also well evident from a mere reading of S.20 of the Specific Relief Act, which would arise only after finding that it is lawful to grant the ## **RSA.No. 594 of 2011 8** relief sought for in favour of the plaintiff. In all other provisions of law wherein discretion could be exercised stands for exercising discretion in a positive way for granting some relief to the parties and not for refusing any relief. But, the discretionary power incorporated and embodied under S.20 stands on a different footing in which the Court has to exercise discretion not for granting the relief, but for refusing the same. It has got its own character and peculiarity, apart from other provisions contained in other laws for the time being in force. So, the real impact of S.20 should be and must be understood under the background of those aspects. It is a mandate upon the Court to address the question of exercise of discretion before granting or refusing a decree for specific performance and it has to be exercised only after finding that it is lawful to grant a relief of specific performance in favour of the plaintiff. A decree which was granted without addressing and without exercising the discretion under S.20 of the said Act is bad in law. The Court is duty ## **RSA.No. 594 of 2011 9** bound to address the question of exercise of discretion under S.20 of the Specific Relief Act while granting or refusing to grant a decree of specific performance. The said discretion has to be exercised only after finding that it is lawful to grant the relief prayed for in suit in favour of the plaintiff. In the present case in hand, that question is not considered or answered. So the impugned decree is bad in law due to noncompliance of requirement under S.20 of the Specific Relief Act.” In the instant case, the sale consideration comes to Rs.1,70,000/- for 20 cents of landed property and the residential building therein at the rate of Rs.8,500/- per cent inclusive of building therein. The advance amount received comes to below 6% of the total sale consideration. Since the advance amount admittedly paid under agreement comes to below 6% of the total sale consideration and while taking note of escalation of land value day by day in the State of Kerala and high inflation rate of ## **RSA.No. 594 of 2011 10** Indian Currency (Indian Rupee) it may not be justifiable to grant specific performance of contract for sale that too after a lapse of more than 18 years from the date of contract for sale. Of course, when there is substantial payment of sale consideration by way of advance the discretion can be exercised in favour of the plaintiff on account of payment of substantial portion of the agreed sale consideration. The first appellate court has applied the discretion in its correct perspective by granting a decree of recovery of the advance amount and by ordering interest at the rate of 6% per annum, but considering the nature of dispute involved in the case viz- a contract for sale of immovable property and building for a specific consideration by receiving advance amount out of the sale consideration, it is just and proper to order interest at the rate of 12% per ## **RSA.No. 594 of 2011 11** annum to the advance amount from the date of suit till the date of its recovery from the defendant and costs of entire proceedings. In the result, this appeal is allowed in part. Decree and judgment of the first appellate court modified by granting interest at the rate of 12% per annum from the date of suit till the date of its recovery for the principal sum of Rs.10,000/- and cost of entire proceedings viz- suit, first appeal and second appeal. ## **Sd/-** **P.SOMARAJAN, JUDGE** pm **// TRUE COPY // PA TO JUDGE**