Somasekharan Nair v. Priyakumar

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT** **THE HONOURABLE MR.JUSTICE T.V.ANILKUMAR** **THURSDAY, THE 22ND DAY OF OCTOBER 2020 / 30TH ASWINA, 1942** ## **RFA.No.307 OF 2013** **AGAINST THE JUDGMENT AND DECREE DATED 08.10.2012 IN O.S.NO.143/2009 OF SUB COURT, KOCHI** ## **APPELLANT/PLAINTIFF:** **SOMASEKHARAN NAIR, AGED 61 YEARS, S/O. GOPALAN NAIR, "POURNAMI", KONTHURUTHY DESOM, ELAMKULAM VILLAGE, KANAYANNUR TALUK, ERNAKULAM DISTRICT.** **BY ADVS.SRI.G.KRISHNAKUMAR SRI.K.A.ANI JOSEPH SMT.P.M.NASEEMA SRI.B.S.SURAJ KRISHNA** ## **RESPONDENT/DEFENDANT:** **PRIYAKUMAR, AGED 36 YEARS, S/O. DAMODARAN, CHETTUTHERUVIL HOUSE, HOUSE NO.CC 19/855A, PULLAR DESOM ROAD, PALLURUTHY VADAKKUM MURI, RAMESWARAM VILLAGE, KOCHI TALUK, ERNAKULAM-682 006.** **BY ADVS. SRI.K.S.MADHUSOODANAN SRI.K.S.MIZVER SRI.P.K.RAKESH KUMAR SRI.THOMAS CHAZHUKKARAN SRI.M.M.VINOD KUMAR** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 19-10-2020, THE COURT ON 22-10-2020 DELIVERED THE FOLLOWING:** **R.F.A.No.307 of 2013** ## **:-2-:** ## **Dated this the 22[nd] day of October, 2020** ## **J U D G M E N T** Plaintiff's suit in O.S.No.143/2009 for specific performance based on Ext.A1 sale agreement dated 31.7.2006 was dismissed by the Sub Court, Kochi. Alternative relief for refund of an amount of Rs.9 lakhs was also dismissed holding that execution of agreement was not proved. Being aggrieved by the judgment and decree, the plaintiff has filed this appeal. 2. Appellant is a proprietor of a kuri company and the respondent/defendant is a close friend of his. Appellant's case is that respondent agreed to sell plaint schedule 2½ cents of land with a residential building for a price of Rs.11,50,000/and demanded advance amount of Rs.9 lakhs for discharging his outstanding liability with Bank of ## **R.F.A.No.307 of 2013** ## **:-3-:** India, Kochi Branch. On 31.7.2006, respondent executed agreement for sale at his house in Palluruthy in the name of the appellant acknowledging receipt of Rs.9 lakhs in the presence of PW2 an employee of kuri company who is one of the attestors in the agreement for sale. 3. The agreement was for a term of two years which cast certain mutual obligations on the respondent also. Even though the appellant was ready and willing all throughout to pay balance sale consideration, a few months before the completion of the term, the respondent filed O.S.No.110/2008 before the Munsiff's Court, Kochi for a decree of mandatory injunction directing the appellant to return certain documents allegedly furnished as security for the loan received on 31.7.2006. After the suit was dismissed on 29.10.2008, the appellant again approached the ## **R.F.A.No.307 of 2013** ## **:-4-:** defendant for execution of the sale deed and since he failed to discharge his part of the contract, the present suit was filed after sending Ext.A2 suit notice. 4. The respondent in his written statement denied liability to execute either the sale deed or return the alleged advanced amount. He denied having executed Ext.A1 in the name of the appellant and having received any amount. He said that in connection with the discharge of outstanding monetary liability with the Bank of India, Kochi Branch, he approached the appellant and received an amount of Rs.4 lakhs on 31.7.2006 as loan. As demanded by the appellant, he handed over the title deed of the plaint schedule property, tax receipt, building tax etc. as security along with a signed blank paper worth Rs.100/- as security. When he proposed to discharge the money borrowed after a ## **R.F.A.No.307 of 2013** **:-5-:** month, the appellant refused to return the title deed and the documents whereupon he filed O.S.No.110/2008 for mandatory injunction directing the appellant to return the security document including the blank stamp paper in his possession. In the suit, the appellant contended that respondent executed a sale agreement on 31.7.2006 and he was entitled to get sale deed of plaint schedule property to be executed. It was only then the respondent came to know that Ext.A1 false agreement was fabricated by the appellant converting the blank signed stamp paper. Respondent therefore contends that Ext.A1 is not enforceable under law since it was brought into existence by fraud and forgery. O.S.No.110/2008 was, however, withdrawn owing to the contention of the appellant that he did not have custody of the alleged security documents. The respondent, therefore, ## **R.F.A.No.307 of 2013** ## **:-6-:** pressed for dismissal of this appeal. 5. On the side the appellant, PW1 and PW2 were examined and Exts.A1 to A7 were received as evidence. The respondent did not produce any documents but confined his evidence to oral testimony as DW1. 6. The court below _inter alia_ framed a material issue having regard to the pleadings of the parties, as to whether respondent executed an agreement for sale for consideration or Ext.A1 was fraudulently created. 7. On a consideration of the entire evidence on record, it was held that Ext.A1 was fabricated by the appellant. Execution of Ext.A1 was held to be not proved. It was also held that respondent did not receive any advance amount nor did he agree for sale of the property. The transaction on 31.7.2006 was held to be purely a loan. The suit was ## **R.F.A.No.307 of 2013** ## **:-7-:** dismissed holding that the plaintiff approached the court with unclean hands. Many suspicious circumstances which improbabilised the existence of agreement of sale were relied on by the court below in the impugned judgment. 8. The learned counsel for the appellant assiled all the findings contending that a meticulous evaluation of facts, evidence and the circumstances of the case would definitely upset the findings of the court below. On the other hand, the learned counsel for the respondent sought to sustain the judgment and decree submitting that evidence on record adequately proves that the respondent has been defrauded and a bogus agreement for sale was brought into existence. 9. The factual questions that arise for consideration in this appeal are the following ; (i) Whether the respondent executed agreement ## **R.F.A.No.307 of 2013** ## **:-8-:** for sale and Ext.A1 relied on by the appellant is bogus ? (ii) Whether the appellant was proved to be ready and willing to perform his part of the contract ? (iii) Whether there are reasons which justify exercise of discretion under Section 20 of the Specific Relief Act, 1963, in favour of the appellant ? 10. Point Nos.(i), (ii) and (iii) : Parties stand in cordial relationship and appellant himself admits that the respondent had on a prior occasion, prized chitty from his kuri company and later closed the transaction. So also respondent admits that he was at the relevant period of time indebted to Bank of India, Kochi Branch and was in need of money. There is no dispute that the respondent approached the appellant demanding money for ## **R.F.A.No.307 of 2013** ## **:-9-:** discharging his financial liabilities with the bank. There is also no dispute that on 31.7.2006, the appellant went to the house of the respondent and both the parties affixed their signatures in Ext.A1 document. The respondent admits that he received an amount of Rs.4 lakhs from the appellant on 31.7.2006. According to the appellant, the amount paid was Rs.9 lakhs and it was towards advance amount at the time of execution of agreement for sale of plaint schedule property. Therefore what has to be traced out is the true nature of transaction that took place between the parties on 31.7.2006. 11. Mere admission by the respondent that he singed the document is no admission of execution of the contents of the document. The appellant has initial burden of proof to show that what was executed was an agreement for sale and the ## **R.F.A.No.307 of 2013** ## **:-10-:** signature of the respondent was in token of acceptance of contents of the document. This is the dictum of this Court laid down in **Velayudhan v. Velayudhan (2001(1) KLT 392)** . This, however, does not mean that the respondent having limited his admission to signature alone can put the whole burden on the appellant to prove his case as if the respondent can sit with blissful silence watching the proceedings against him. He has also an equal responsibility to show the circumstances under which a blank stamp paper came to be signed. This is the dictum of this Court laid down in **Premsankar K.G. v. Sunil Krishnan (2011(4) KHC 895)** . In short, the decision as to dispute on execution of Ext.A1 has to rest on the probabilities of the case advanced by the parties and the outcome of what turns out of appreciation of entirety of evidence on record. ## **R.F.A.No.307 of 2013** ## **:-11-:** 12. Appellant's financial ability to raise an amount of Rs.9 lakhs cannot be disputed in this case even though it was contended by the learned counsel for the respondent that the financial capacity was not proved. This is for the main reason that respondent himself admits that on 31.7.2006, he received a huge amount of Rs.4 lakhs which in all probability indicates that the appellant must be a person having necessary resources to raise money. Appellant is admittedly the proprietor of Manoj Traders and Kuries and also he conducts Manoj Cycle Emporium also. Respondent did not deny that appellant is an established businessman and has bank account also. In the cross examination, appellant said that on 29.7.2006, 30.7.2006 and 31.7.2006, he withdrew Rs.9 lakhs in instalments. Even though this was not proved by records, the respondent did not challenge the ## **R.F.A.No.307 of 2013** ## **:-12-:** source of fund during the cross examination. 13. PW1 said that pursuant to respondent's agreeing for sale of plaint schedule property and demand for Rs.9 lakhs as advance, he purchased stamp paper worth Rs.100/- and went to the house of the respondent in Palluruthy on 31.7.2006. He said that appellant took the stamp paper to a place close to him and got an agreement for sale prepared and brought to his house. PWs.1 and 2 said that the document was signed at respondent's house at Palluruthy on 31.7.2006. PW2 said that he signed after witnessing appellant and respondent signing Ext.A1 in his presence. According to PW2, though he did not read the contents of the document, he knew that it was an agreement for sale and the respondent received advance amount of Rs.9 lakhs. PW2 is a natural witness though he was disbelieved by the court below for no good reaons. ## **R.F.A.No.307 of 2013** ## **:-13-:** 14. According to the respondent, there was no witness present at the time of transaction in his house and what he received from the appellant was a loan for an amount of Rs.4 lakhs. He stated that after receipt of Rs.4 lakhs on 31.7.2006, he went to Bank of India, Kochi Branch, the same day and after clearing the liabilities and getting back the documents of title, tax receipts etc., he came back from the bank to appellant and entrusted him with documents of title etc. along with a blank signed stamp paper worth Rs.100/-. It is contended that it is the blank document which was later fabricated into Ext.A1. In order to prove this contention, there is absolutely no evidence except the testimony of respondent. 15. PW1, on the other hand, testified that he did not receive any documents of security on the day other than Ext.A1 karar and further he had no ## **R.F.A.No.307 of 2013** **:-14-:** opportunity of seeing the original title deed, tax receipt etc. while the agreement was drawn up. He only relied on their copies furnished by the respondent. He believed that those documents were in the bank where the respondent was indebted. Nobody has seen the respondent entrusting title deed of the property, tax receipt or such documents of security with the appellant on 31.7.2006 as alleged by the respondent. PW1 stated that while the transaction was taking place, the inmates of the house of the respondent were present. The respondent has no explanation as to why he did failed to examine any one of them to prove his contention of entrustment of documents of security besides the blank stamp paper. 16. It is doubtful whether the respondent had received the documents in deposit from his banker on 31.7.2006. The best evidence to prove his ## **R.F.A.No.307 of 2013** ## **:-15-:** contention was to examine officers in the bank or to produce records showing that the purported loan liability was discharged and he received the documents back. In the absence of this crucial evidence forthcoming, the appellant's case that transaction on 31.7.2006 was agreement for sale is highly probable. Unless the respondent could show that Ext.A1, the alleged blank signed stamp paper was handed over along with other documents, the contention that what transpired on 31.7.2006 was a loan transaction becomes wholly unacceptable. It is a fact that the respondent unsuccessfully sought for a decree for return of the documents including Ext.A1 in O.S.No.110/2008 and it was ultimately dismissed as not pressed on 29.10.2008. The conduct of withdrawing from the case indicates that the respondent himself doubted to have a _bona fide_ case to proceed with. This is notwithstanding the legal ## **R.F.A.No.307 of 2013** **:-16-:** position that withdrawal from suit by itself will not preclude the suitor from pursuing same contentions in an independent suit in support of his defence. The decisions reported in **Mangalore Electricity Supply Company Limited v. M/s.AMR Power Private Limited and another (2016 KHC 6618)** , **Kandapazha Nadar and others v. Chitraganiammal and others (2007 KHC 3358)** , **Radhe Shiam v. Mohammad Nasir Khan and another (AIR 1937 Oudh 394)** and **M/s.Usha Sales Ltd. and others v. Mrs.Aruna Gupta and another (AIR 1983 DELHI 107)** have held that by the sole reason of withdrawal from suit, a party is not estopped from urging the same contentions in support of defence while resisting a separate suit against him. 17. Weighing the probabilities of rival versions of parties, I am satisfied that Ext.A1 was executed by the respondent agreeing to sell the ## **R.F.A.No.307 of 2013** ## **:-17-:** plaint property for consideration and the case of the respondent that it was executed as evidence of loan transaction is not probable at all. 18. The court below relied on a few circumstances as being reasonable enough to probabilise the case of the respondent that Ext.A1 reflected only existence of a loan transaction between parties. It was stated that term of two years appearing in the document, in the facts and circumstances of the case, probabilised that Ext.A1 could only be the reflection of a loan transaction. What the court below thought was that when a huge advance amount had been paid and only a very negligible balance amount remained, no prudent buyer or seller would have accepted a term of long two years for performance of their part of contract. The court below also expressed its concern as to how the appellant refrained from ## **R.F.A.No.307 of 2013** **:-18-:** performing his part of the contract till the date of Ext.A2 suit notice which was sent only on 15.5.2009 after a gap of 10 months from the date of expiry of Ext.A1. 19. The view taken by the court below does not appear to be in tune with the terms and conditions stipulated in Ext.A1 agreement for sale. PW1 made it very clear in his testimony that the term for two years was fixed at the insistence of the respondent himself. This appears to be quite convincing. He wanted more time from the appellant to clear his liabilities with the bank and also to redeem a mortgage worth Rs.2 lakhs which was outstanding in favour of an occupant of house in the plaint property. Respondent also admitted having liability for an amount of Rs.1 lakh with another person. These factors persuaded the parties to agree upon a term of two years as period of ## **R.F.A.No.307 of 2013** ## **:-19-:** contract. 20. Ext.A1 cast mutual obligation on the respondent also, without discharge of which, appellant could not have performed his part of the contract. Respondent was to measure out the land with the help of Village Officer and to convince the appellant that the property was free from encumbrance. The respondent has no case that he performed his part of the contract or informed the appellant about compliance with the conditions set out in the agreement. His case all through out has been that there was no agreement for sale and his obligation was limited to discharging the loan liability. 21. The court below pointed out that PW1 was not in a position to state whether the property had compound wall or not. I do not think that this is very material when other circumstances ## **R.F.A.No.307 of 2013** **:-20-:** probabilising the case of the appellant are taken into account. Equally unsound is the view that the appellant ought to have made counter claim in O.S.No.110/2008 which was filed for mandatory injunction. 22. The learned counsel for the respondent contended that comparison of signatures in the three pages of Ext.A1 would show that the lining spaces were different and so there was fabrication of the document. In my view, if at all there is any such difference, the court below was not justified in making a comparison and entering a finding of its own without the aid of evidence of an expert. The contention of the respondent is that pages 2 and 3 in Ext.A1 were signed blank papers which the respondent had entrusted with PW1 when he had prized chitty from the kuri company on a former occasion. In my view, the first opportunity to take ## **R.F.A.No.307 of 2013** **:-21-:** up this contention in defence was in O.S.No.110/2008 when he sought decree of mandatory injunction against the appellant. No such contention was taken in that suit. The very withdrawal of O.S.No.110/2008 gives an indication that the respondent lacked a bona fide case to go ahead with. When all these facts are taken together, I am satisfied that the appellant satisfactorily proved execution of Ext.A1 agreement for sale and payment of advance amount and the contrary contention of the respondent that it was created by fraud and forgery is not true. 23. The finding of the court below that the appellant was not ready and willing to perform his part of the agreement is wrong and against the conditions in Ext.A1. The respondent has not discharged the mutual obligation cast on him under Ext.A1 and so long as discharge of his obligation ## **R.F.A.No.307 of 2013** ## **:-22-:** was delayed, it was futile for the appellant to have approached him with balance amount of consideration. Moreover, so long as the respondent was chasing the contention denying the execution of agreement for sale itself, the evidence given by the appellant that he was already ready and willing is practically unassailable. I hold that appellant proved that he was ready and willing to perform his part of the contract. 24. Section 20 of the Specific Reliefs Act provides that merely because the buyer was ready and willing to perform his part of the contract and awarding of a specific relief was lawful, he is not entitled as of right to obtain a decree for specific performance since it is still a matter of discretion of the court also which it has to exercise guided by judicial principles. When so examined also, I do not find in this case any ## **R.F.A.No.307 of 2013** **:-23-:** reason to deny the benefit of discretion in favour of the appellant. The terms of agreement do not give the appellant any unfair advantage over the respondent. The performance of agreement also will not involve any hardship to the defendant. There are no circumstances also which could indicate that enforcement of contract would make it inequitable. 25. Therefore I am satisfied that the appellant is entitled to a decree for specific performance of contract and the findings entered into by the court below are not in tune with the facts, evidence and law. The impugned judgment and decree are therefore liable to be set aside. In the result, appeal is allowed reversing the judgment and decree of the court below and suit for specific performance of Ext.A1 agreement dated 31.7.2006 is decreed in favour of the appellant. He shall deposit the balance sale consideration of ## **R.F.A.No.307 of 2013** **:-24-:** Rs.2,50,000/- within a period of one month from today whereupon the respondent shall execute sale deed and deliver possession of property forthwith failing which the appellant shall apply to court for execution of sale deed and grant of incidental reliefs. The parties will suffer respective costs incurred by them in both courts. All pending interlocutory applications are closed. Sd/- ## **T.V.ANILKUMAR JUDGE** ami/