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2002 DIGILAW 49 (KER)

Kumaresan v. M. R. Seshadri

2002-01-18

K.A.MOHAMMED SHAFI, K.S.RADHAKRISHNAN

body2002
Judgment :- Mohammed Shafi, J. The defendant in O.S. 36/1996 on the file of the Subordinate Judge's Court, Palakkad is the appellant. 2. The plaintiff-respondent filed the suit for specific performance of Ext. A1 agreement dated 7.4.1995 entered into between the appellant and the respondent whereby the appellant agreed to sell the plaint schedule property of an extent of 55.25cents comprised in R.S. No. 253/2A of Puthupariyaram amsom, desom for a consideration of Rs. 1,75,000/-. According to the respondent Rs.1 lakh was paid out of the consideration on the date of execution of Ext.A1 and subsequently Rs.50,000/- was paid on 24.4.1995and thus Rs.1,50,000/- out of the consideration is paid and though the respondent was ready and willing to pay the balance amount and to get the registered assignment deed executed by the appellant, the appellant did not do so inspite of repeated demands and Ext.A2 registered notice sent on behalf of the respondent. 3. The appellant though admitted the execution of Ext.A1 agreement and receipt of Rs.1,50,000/- from the respondent, has contended that Ext.A1 is executed not as an agreement for sale of the property but only being security for the loan transaction between the appellant and the respondent. According to the appellant, he never intended to enter into a contract for sale of the plaint schedule property and the price of the plaint schedule property on the date of Ext.A1 was much more than what is recited in Ext.A1. He has also contended that he has paid the interest stipulated on the loan transaction up to 7.10.1995 and as he defaulted to pay the subsequent interest, the above suit is filed by the respondent. 4. Before the lower court the plaintiff -respondent was examined as PW1 and Exts.A1 to A5 were marked on his side. The defendant was examined as DW1 and no documentary evidence was adduced on his behalf. 5.The lower court after analyzing the evidence on record decreed the suit as prayed for and directed the appellant to execute the sale deed in respect of the plaint schedule property in favour of the respondent after receiving the balance consideration of Rs,25,000/-in court within three months from the date of the judgment with notice to the appellant and directed the appellant to execute the assignment deed on receipt of such notice. Hence the above appeal is preferred by the defendant-appellant challenging the decree and judgment passed by the lower court. 6.The points for consideration in this appeal are: (1) Whether Ext.A1 is an agreement for sale executed by the appellant or it is a transaction evidencing debt as contended by the appellant. (2) Whether the respondent is entitled to the specific performance of Ext.A1 agreement as prayed for in the plaint. 7. Points: Though the counsel for the appellant submitted before us that the market value of the property on the date of execution of Ext.A1 agreement was much more than Rs.1,75,000/- recited in Ext.A1, apart from the ipse dixit of the appellant as DW1, no evidence is adduced by him to prove that the market value of the plaint schedule property was much more than what is recited in Ext. A1 on the date of execution of Ext.A . Therefore, this contention of the appellant has to be rejected. 8. The appellant has further contended that he had absolutely no interest in the plaint schedule property on the date of execution of Ext. A1 agreement and therefore, the contention of the respondent that he has executed Ext.A1 agreeing to sell the plaint schedule property for consideration is not at all tenable. 9. The appellant has nowhere pleaded in the written statement that he had transferred his interest in the plaint schedule property in favour of his mother in the year 1994 and he had absolutely no right in the plaint schedule property on the date of Ext.A1. Apart from putting suggestions to the respondent while he was examined as PW1to the effect that the appellant has assigned his rights in the plaint schedule property in favour of his mother which is denied by PW1, no tangible evidence is adduced by the appellant to prove that he had in fact no right or interest in the property on the date of execution of Ext.A1. Even though the assignment deed alleged to have been executed by the appellant in favour of his mother in the year 1994 is available with the father according to him, no such document is produced in court nor the appellant has taken any steps to examine either his father or mother to prove the alleged assignment deed in favour of his mother. Morevoer, admittedly the appellant has given Ext. Morevoer, admittedly the appellant has given Ext. A4 sale deed dated 27.6.1984 executed by his father in respect of the plaint schedule property and Ext. A5 photocopy of the settlement deed dated 28.5.1981whereby the appellant's father and another acquired title to the property, to the respondent at the time of execution of Ext.A1. Therefore, the contention of the appellant that as he assigned his right in the plaint schedule property in favour of his mother in the year 1994, he had no subsisting interest in the plaint schedule property on the date of execution of Ext.A1 is absolutely unsustainable. 10. Even though the appellant has contended that he signed Ext.A1 and some blank papers as insisted by the respondent at the time of availing the loan, he has no case that the respondent is a licensed or habitual money lender. The respondent as PW1 has deposed that he used to lend money rarely to help others in their pressing needs. According to the appellant, the alleged loan was arranged through one Koyakutty who has signed Ext. A1 as witness and he has paid the stipulated interest to the respondent through that broker Koyakutty. Even though that Koyakutty was summoned as a witness by the appellant and was present in the court when the appellant was examined as DW1, the witness is not examined as a witness for the appellant. Therefore, the allegation of the appellant that he has obtained the loan from the respondent by executing Ext. A1 as arranged though the broker Koyakutty stands as a mere allegation made by the appellant unsupported by any evidence and denied by the respondent. 11. The counsel for the appellant submitted that there are inherent circumstances available from the evidence on record to establish that Ext.A1 entered into between the appellant and the respondent is evidencing a loan transaction and not an agreement to sell the plaint schedule property. 12. According to the appellant Ext. A1 contains the signatures of his close relations in both the pages, neither as executants nor as witnesses. Therefore, the counsel for the appellant submitted that the signing of the document Ext.A1 by his close relations establish that it is executed as security for the loan as demanded by the respondent, as otherwise there is no necessity for them to sign the document neither as executants nor witnesses. 13. Therefore, the counsel for the appellant submitted that the signing of the document Ext.A1 by his close relations establish that it is executed as security for the loan as demanded by the respondent, as otherwise there is no necessity for them to sign the document neither as executants nor witnesses. 13. The respondent has contended that even though Ext.A1 is executed by the appellant, his near relations have also signed Ext.A1 at the instance of the appellant in order to fortify the document. Those persons who signed the document are not examined. Therefore, the existence of signatures of the close relations of the appellant in Ext.A1 does not advance the case of the appellant that it was executed only as a security for the loan availed from the respondent. 14. The counsel for the appellant submitted that even though Ext.A1 is executed as an agreement for sale with mutual obligations between the appellant and the respondent, the respondent has signed Ext.A1 and therefore, if in fact Ext.A1 is an agreement for sale, the appellant is left with no remedy against the respondent for breach of the agreement. Therefore, according to him, this fact also inherently improbabilise the contention of the respondent that Ext. A1 is executed as an agreement for sale of the plaint schedule property. 15. It is true that in Ext.A1 there is a recital that in case the respondent failed to perform his part of the agreement, he is liable to forfeit the advance amount of Rs.1 lakh paid by him and that document is not signed by the respondent. Therefore, that covenant in the agreement cannot be enforced against the respondent in case of breach of contract by him. But due to the fact that the respondent has not signed the agreement, it cannot be contended that Ext.A1 is not intended to be an agreement for sale but it was executed only as a security for the debt advanced by the respondent. 16. The counsel for the appellant argued that the stamp-paper for execution of Ext.A1 is purchased in the name of the appellant-seller and not in the name of the respondent-buyer. He also submitted that the boundaries of the property given in Ext.A1 and the boundaries of the plaint schedule property noted by the commissioner appointed in the suit are different. 16. The counsel for the appellant argued that the stamp-paper for execution of Ext.A1 is purchased in the name of the appellant-seller and not in the name of the respondent-buyer. He also submitted that the boundaries of the property given in Ext.A1 and the boundaries of the plaint schedule property noted by the commissioner appointed in the suit are different. He further submitted that in the plaint it is stated that photo copy of Ext.A1 is given to the appellant. But in fact, a carbon copy of that document is given. According to him, all these facts probabilise the contention of the appellant that Ext.A1 is not executed as an agreement for sale but only as a security for the debt advanced by the respondent. 17. The above facts that stamp-paper to execute the agreement is purchased not in the name of the respondent purchaser but in the name of appellant -seller, that there is difference in the boundaries of the property given in Ext.A1 and the plaint schedule property noted by the commissioner and that averment is made in the plaint to the effect that photocopy of the agreement was given to the appellant, though in fact a carbon copy is given to him, are all of no significance in considering the question whether Ext.A1 is in fact executed as an agreement for sale or as a security for debt. Therefore, the above arguments advanced by the counsel for the appellant are also not tenable. 18.The counsel for the appellant submitted that the respondent is not entitled to the specific performance of the contract and if at all, he is entitled to the amount advanced with interest and compensation if any, since he failed to deposit the balance amount due as per the decree within three months from the date of decree as directed by the lower court in the impugned decree and judgment. According to him, under Section 16(C) of the Specific Relief Act, the respondent is liable to perform his part of the contract and under the proviso to Section 16 (c) he is liable to deposit the amount as directed by the court. According to him, under Section 16(C) of the Specific Relief Act, the respondent is liable to perform his part of the contract and under the proviso to Section 16 (c) he is liable to deposit the amount as directed by the court. Therefore, according to him, the failure of the respondent to deposit the balance amount of Rs.25,000/- within three months from the date of the impugned judgment as directed by the lower court deprives him of the 1st prayer made in the plaint and at best he can only claim the amount advanced by him as per Ext.A1 with interest thereon and damages if any, he is entitled for non-performance of the contract by the appellant. In support of this contention the counsel for the appellant relied upon the decision in Anandavally v. Natesan (1992 (2) KLT 833) wherein a single Judge of this Court has observed as follows; "Though normally a plaintiff is not bound to tender to the defendant or deposit the purchase money in court, when there is an order of court, he is bound to do the same under Explanation to S.16(c). In other words, even if after an order or a decree is passed by court, the decree-holder fails to tender or deposit the money within the time fixed in the decree, it has to be presumed that he was not ready and willing to perform his part of the contract. The fact that a decree was passed does not absolve him from the liability to be always ready and willing to perform his part of the contract." Though the principles laid down by this Court are well settled, the above observations made by this Court in the above judgment are of no avail to the appellant in this case in support of the above contention. 19. Section 16 (C) of the Specific Relief Act stipulates that the person seeking specific performance of the contract should be always ready and willing to perform his part of the contract and passing of decree for specific performance will not absolve him from the liability to be ready and willing to perform his part of the contract. Section 28 of the Specific Relief Act deals with rescission in circumstances of the contract for sale or lease of immovable property, the specific performance of which has been decreed. Section 28 of the Specific Relief Act deals with rescission in circumstances of the contract for sale or lease of immovable property, the specific performance of which has been decreed. Sub-section (1) of Section 28 empowers the court which passed the decree for specific performance of a contract for sale or lease of immovable property, to enlarge the time for deposit of purchase money ordered to be deposited on the application filed by the vendor or the lesser in the same suit in which the decree is passed. Therefore, the contention of the appellant that as the respondent failed to deposit the balance purchase price within three months from the date of the decree as stipulated in the impugned judgment, the respondent is barred from claiming specific performance of the contract by compelling the appellant to execute the registered assignment deed in terms of the decree, is not sustainable. 20. In the above decision reported in 1992(2) KLT 833 relied upon by the counsel for the appellant the learned single Judge has observed as follows: " A decree holder in a suit for specific performance cannot choose his own time for depositing the money. No doubt, in given cases the court has the power to extend the time and the purchaser is bound to deposit the purchase money as ordered by court. Though the purchase money is not deposited within the time, it is not as if the decree becomes inexecutable; on the application of the defendant if other circumstances exist, court can recind the contract under S.28 or if the decree-holder satisfies the court that there were sufficient reasons for not depositing the money in time, the court can grant extension of time." 21. In the decision in Praksh Chandra v. Angadlal (1979) 4 SCC 393) the Supreme Court has observed that: (1979) 4 SCC 393) the Supreme Court has observed that: " The ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief." 22. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief." 22. In the decision in Ramankutty Guptan v. Avara (1994(1) KLT 453) the Supreme Court has observed as follows: " An application for extension of time for payment of balance consideration may be filed even in the court of first instance or the appellate court in the same suit as the decree of the trial court stands merged with that of the appellate court which decree is under execution. It is to be seen that the procure is the hand-maid for justice; and unless the procedure touches upon jurisdictional issue, it should be moulded to subserve substantial justice. Therefore, technicalities would not stand in the way to subserve substantive justice." 23. In the decision in Sardar Mohar Singh v. Mangilal (1997) 9 SCC 217) the Supreme Court has observed as follows: "4. From the language of sub-section (1) of Section 28, it could be seen that the court does not lose its jurisdiction after the grant of the decree for specific performance not it becomes functus officio. The very fact that Section 28 itself gives power to grant order of rescission of the decree would indicate that till the sale deed is executed in execution of the decree, the trial court retains its power and jurisdiction to deal with the decree of specific performance. It would also be clear that the court has power to enlarge the time in favour of the judgment-debtor to pay the amount or to perform the conditions mentioned in the decree for specific performance, in spite of an application for rescission of the decree having been filed by the judgment-debtor and rejected. In other words, the court has the discretion to extend time for compliance of the conditional decree as mentioned in the decree for specific performance." 24. In the decision in Gobind Ram v. Gian Chand (2000) 7 SCC 548) the Supreme Court has observed as follows: "7. It is the settled position of law that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience. It is the settled position of law that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience. As stated in P.V. Joseph's Son Mathew (AIR 1987 SC 2328) the court should meticulously consider all facts and circumstances of the case and motive behind the litigation should also be considered." 25. It is clear from the principles laid down in the decisions referred to above by this Court as well as the apex court that under Section 28 of the Specific Relief Act, the court which passed the decree for specific performance has got the power to enlarge the time to perform the condition imposed by the decree. 26. The counsel for the respondent has submitted that the respondent has already filed I.A. No. 771/99 on 27.2.1999 before the lower court to extend the time to deposit the balance purchase price as directed in the decree and he has deposited the amount before the lower court on 27.2.1999 itself. It is further this court in C.M.P.No.1678/99 in the above appeal, the lower court could not pass order extending the time to deposit the amount in that I.A. Therefore, the contention raised by the appellant that since the respondent has failed to deposit the balance sale price as per Ext.A1 within three months from the date of the decree as directed by the lower court, the respondent is not entitled to specific performance of Ext.A1 agreement by compelling him to execute and register the assignment deed and if at all, the respondent can claim only the amount already advanced with interest and compensation or damages, if any, is not sustainable. 27. It is also pertinent to note that it is well settled proposition of law that the decree of the trial court merges with the decree of the appellate court and the parties to the litigation are entitled to time to perform the condition or direction imposed by the trial court after the decree passed by the appellate court. 27. It is also pertinent to note that it is well settled proposition of law that the decree of the trial court merges with the decree of the appellate court and the parties to the litigation are entitled to time to perform the condition or direction imposed by the trial court after the decree passed by the appellate court. In that view of the matter since the appellant has preferred the above appeal challenging the decree and judgment passed by the trail court and decree of the trail court merges with the decree to be passed by this Court in this appeal, whether confirming, varying or reversing the decree and judgment passed by the trial court, the respondent is entitled to time for deposit of the balance sale price from the date of decree passed by this Court in this appeal. Therefore, on that ground also the above contention raised by the appellant is not tenable. 28. After careful and anxious consideration of the entire facts and circumstances of the case and the evidence on record we find that the lower court on proper consideration of the facts and circumstances and the evidence on record, passed the impugned decree and judgment repelling the contentions raised by the appellant. 29. Therefore, on these points we find that Ext. A1 is an agreement for sale executed by the appellant and it is not a transaction evidencing debt as contended by the appellant and that the respondent is entitled to the specific performance of Ext.A1 agreement as prayed for in the plaint. 30. The respondent-plaintiff has filed cross objections challenging the decree and judgment passed by the lower court in so far as the costs in the suit is disallowed to him. He has contended that the lower court has committed manifest illegality in disallowing costs to him after finding that the defendant appellant has miserably failed to substantiate his contentions that it was loan transaction between him and the respondent. Therefore, he contended that he is entitled to the costs in the lower court as well the costs in this appeal since he has been dragged by the appellant before this Court in the appeal. 31. Therefore, he contended that he is entitled to the costs in the lower court as well the costs in this appeal since he has been dragged by the appellant before this Court in the appeal. 31. It is true that the lower court as well as this court found that the contention raised by the appellant that Ext.A1agreement evidences only a transaction in debt and not an agreement for sale of his property is not substantiated by the appellant. But the lower court after considering the facts and circumstances of the case exercised its discretion in not allowing costs to the plaintiff-respondent. After careful consideration of the facts and circumstances of the case and the evidence on record and also the arguments advanced by the counsel for the respondent, we find no ground to interfere with the discretion exercised by the lower court in disallowing costs to the respondent in the suit. We also find it appropriate in this appeal also to direct both sides to suffer their costs. Hence the memorandum of costs objections filed by the respondent is dismissed and both sides are directed to suffer their costs before the lower court in the suit as well as in this appeal. The above appeal being devoid of any merits is dismissed and the decree and judgment passed by the lower court are confirmed.