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2013 DIGILAW 517 (KER)

Annamma Chandapillai v. K. X. Anil

2013-06-24

A.V.RAMAKRISHNA PILLAI, THOTTATHIL B.RADHAKRISHNAN

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Judgment :- Ramakrishna Pillai, J. 1. The plaintiff in the original suits is before us in both the appeals. 2. The appellant filed the original suit (O.S No.17 of 2006) for specific performance of an agreement entered into between her and the respondent for sale of the plaint schedule property. 3. In R.F.A No.42 of 2010, the appellant challenges the impugned judgment and decree of the court below in O.S No.17 of 2006 as the decree is confined only to the extent of allowing her to realise an amount of Rs.10 lakhs with interest at the rate of 6% per annum from the respondent and his assets, which the respondent has received from her in terms of the agreement for sale. 4. R.F.A No.881 of 2011 is directed against the judgment and decree in O.S No.101 of 2006 filed by the appellant against the respondent for a permanent prohibitory injunction restraining the respondent against the alienation of the suit property at the time when the period for performance of the agreement was yet to be over. 5. According to the appellant, she entered into an agreement with the respondent for sale of the plaint schedule property, for a total consideration of Rs.23 lakhs. The agreement was executed on 13.12.2005. On the date of the agreement, an amount of Rs.1 lakh was paid and later, an amount of Rs.9 lakhs was paid in the month of January, 2006. As per the terms of the agreement, when the appellant informs the respondent regarding the availability of balance sale consideration, the respondent is liable to measure out the property and satisfy the appellant regarding the extent and hand over all the title deeds and encumbrance certificate for 15 years. The sale deed had to be executed on or before 13.3.2006. The appellant pleaded that she was always ready and willing to perform her part and the respondent was not ready and willing to execute the sale deed. 6. Allegedly, the respondent caused to issue a lawyer's notice to the appellant making certain allegations and there was some attempt on the part of the respondent to alienate the property. Consequently, the appellant filed O.S No.100 of 2006 before the Munsiff Court, Cherthala, for injunction simplicitor, which was later transferred to the Sub Court, Cherthala, and re- numbered as O.S No.101 of 2006. 7. Consequently, the appellant filed O.S No.100 of 2006 before the Munsiff Court, Cherthala, for injunction simplicitor, which was later transferred to the Sub Court, Cherthala, and re- numbered as O.S No.101 of 2006. 7. The respondent, who resisted the suits, denied the execution of the agreement. According to him, there was no agreement to measure out the property and to satisfy the plaintiff concerning the same. However, he admitted a case of borrowing money and contended that he is willing to pay back the amount with interest. 8. The trial court tried both the suits jointly. The evidence consists of the oral testimonies of PWs.1 to 5, DWs.1 and 2 and CW1 as well as Exts.A1 to A16, B1 to B6, C1 series and Ext.X1. 9. Though the court below, after considering the evidence found that the appellant had executed Ext.A1 agreement, it came to the conclusion that it was not in her personal capacity but, in the capacity as an agent of her son Bosy Chandapillai, that Ext.A1 was executed. The trial court was of the view that the appellant's son had not authorised the appellant to enter into the agreement and, therefore, refused to grant the relief of specific performance as prayed for. Instead, it granted a decree to realise an amount of Rs.10 lakhs with interest at the rate of 6% per annum from the respondent and his assets. Thus, the appellant has come up in appeal. 10. We heard the learned counsel on both sides. We have perused the impugned judgment and the lower court records. 11. The learned counsel for the appellant would submit that the impugned judgment and decree were patently illegal and unsustainable, as no agency was created, which is explicitly clear from the document executed. According to the learned counsel for the appellant, the trial court entered into the findings as above on a total misconception of the case pleaded by the appellant. 12. Per contra, the learned counsel for the respondent supported the decree and judgment and argued that the appellant is not entitled to get a decree for specific performance as prayed for. 13. The real issue involved in this case revolves round Ext.A1 agreement said to have been executed by the respondent agreeing to sell the plaint schedule property to the appellant for a total consideration of Rs.23 lakhs. 13. The real issue involved in this case revolves round Ext.A1 agreement said to have been executed by the respondent agreeing to sell the plaint schedule property to the appellant for a total consideration of Rs.23 lakhs. Though the respondent denied the agreement and contended that it was only a security for a loan transaction, it was found against by the trial court and that finding has not been challenged by the respondent. Therefore, our exercise is confined only to the interpretation of Ext.A1 agreement on the basis of which the appellant moved the trial court for a decree of specific performance. 14. The trial court has found that Ext.A1 is an agreement for sale, but proceeded to hold that there is an agency created between the appellant and her son. Placing reliance on Section 236 of the Indian Contract Act, the trial court went to the extent of saying that the appellant has falsely contracted as an agent and, therefore, she is not entitled to the relief of specific performance. According to us the whole understanding of the plea of the appellant by the trial court is a clear misconception. 15. As rightly pointed out by the learned counsel for the appellant, it is not a case of any agency created. The contents of Ext.A1 would indicate that it was an agreement entered into between the appellant and the respondent. It is true that there is a reference in Ext.A1 that the appellant had entered into the agreement for the purchase of the plaint schedule property for her son, who was abroad at that time. But, there was no creation of any agency as per Ext.A1, as contemplated under law. A recital by one person will not create any agency at all. 16. The lower court also stated that there is suppression of material facts by the appellant. But we cannot agree with the said finding because, from the records it can be seen that Ext.A1 agreement was produced along with the plaint under Order VII Rule 14 which should be treated as part of the pleadings. The list of documents mentioned in Order VII Rule 14(2) should be treated as part of the plaint. (See the decision of this Court in Commercial Financiers v. Thressia [ 1990 (1) KLT 774 ].) 17. The list of documents mentioned in Order VII Rule 14(2) should be treated as part of the plaint. (See the decision of this Court in Commercial Financiers v. Thressia [ 1990 (1) KLT 774 ].) 17. We notice that no prejudice was caused to the respondent as he had executed Ext.A1 knowing fully that the appellant is the mother of Bosy Chandapillai. As far as the respondent is concerned, he need to execute a document in the name of the appellant only. He need not worry over the question whether the appellant had entered into an agreement to purchase the property to use for herself or for her son, which is not the issue which comes within the province of enquiry of the respondent at the time of execution of Ext.A1 agreement. 18. The learned Sub Judge ought to have taken Ext.A1 document in its entirety which would show that it was the appellant in her personal capacity who has executed the agreement and, therefore, she is entitled to seek for specific performance. 19. As rightly put by the learned counsel for the appellant, in the matter of interpreting a document only the recitals which forms part of the terms of the document are material. In a document, there could be enumeration of many facts which may be true or may not be true. But those are never material except when those form part of the terms of the document. 20. The trial court has found that the appellant has executed Ext.A1 document. As alleged by the appellant, the respondent has no case that he was ready and willing to execute the sale deed as prayed for by the appellant. There are indications in the evidence to the effect that the appellant was ready and willing to perform her part and the respondent was not ready and willing to perform his part. 21. The main contention put forward by the learned counsel for the respondent supporting the impugned judgment and decree is that there was a creation of agency and, therefore, the bar under Section 236 of the Indian Contract Act would apply in this context. 22. We notice that the son of the appellant was also examined before the trial court as PW1. There is no conflict of interest between PW1 and the appellant who was examined as PW2. 22. We notice that the son of the appellant was also examined before the trial court as PW1. There is no conflict of interest between PW1 and the appellant who was examined as PW2. The agreement was signed by the appellant alone, as her son (PW1) was at USA at that time. There is no abnormality in entering into an agreement by one person for and on behalf of another when they are family members. Creation of agency is not at all necessary in such matter. The defendant being a third party, need not be disturbed by it. As both the alleged principal and agent had adduced evidence in this case, we cannot approach this case as one of agency where the agent disowning the principal and taking undue advantage under the contract so as to attract Section 236 of the Indian Contract Act. Here, we would hasten to add that the respondent had a case that he was ready to execute the sale deed in the name of the appellant's son only. 23. In the Indian context, when a mother enters into a contract to purchase property on behalf of her son, creation of agency agreement cannot be attributed to it. It can only be held that she wanted to purchase the property though it was for the purpose of her son. 24. The Apex Court in Chairman, Life Insurance Corporation and others v. Rajiv Kumar Bhasker [ (2005) 6 SCC 188 ] has held that the relationship of principal and agent can only be established by the consent of the principal and agent. The said consent need not necessarily be to the relationship of principal and agent itself. The principal and agent would be held liable to have consented if they have agreed to a state of facts on which the law imposes the consequences which result from agency, even if they do not recognize it themselves and even if they professed to disclaim it. Therefore, it was held that agency is consensual and not contractual. This Court in Harihara Iyer v. Bhagirathi Amma [ILR 1986 (1) Ker.184] has observed that no man can become the agent of another person except by the will of other person. Therefore, when the appellant and her son have not admitted the agency relationship, it is not for the respondent to contend otherwise. This Court in Harihara Iyer v. Bhagirathi Amma [ILR 1986 (1) Ker.184] has observed that no man can become the agent of another person except by the will of other person. Therefore, when the appellant and her son have not admitted the agency relationship, it is not for the respondent to contend otherwise. What Section 236 of the Contract Act says is that a person, with whom a contract has been entered into in the character of agent, is not entitled to require the performance of it, if he was in reality acting, not as agent, but on his own account. It appears that the purport of the section is that the agent cannot take undue advantage under a contract by disallowing the agency. 25. Going through the judgment impugned, we also notice that there is no proper discussion about the readiness and willingness of the appellant for purchase of the property. The suits were decided by short circuiting on the point of bar under Section 236 of the Indian Contract Act. However, as the last court on facts, we have appreciated the entire evidence on record. 26. The unshattered testimonies of PW1 and PW2 coupled with the prompt action on the part of the appellant by instituting another suit before the Munsiff Court seeking for an injunction restraining the respondent from alienating the property on receipt of a notice raising unnecessary allegations against the appellant would indicate that the appellant was always ready and willing to perform her part of the contract. 27. Moreover, it can be readily inferred from the contentions taken by the respondent where he had taken the stand that there was no agreement at all, that he was not ready and willing to perform his part. 28. As there is no statutory inhibition for the appellant to seek for the relief of specific performance, the non exercise of equitable discretion conferred on the court would result in miscarriage of justice. We, therefore, hold that the court below ought to have granted the relief of specific performance in favour of the appellant as prayed for. 29. 28. As there is no statutory inhibition for the appellant to seek for the relief of specific performance, the non exercise of equitable discretion conferred on the court would result in miscarriage of justice. We, therefore, hold that the court below ought to have granted the relief of specific performance in favour of the appellant as prayed for. 29. Practically, the importance of R.F.A No.881 of 2011 which arises out of O.S No.101 of 2006 does not survive any more in view of the fact that the relief sought for in the said suit was for injunction against alienation at the time when the period of performance pursuant to the agreement was yet to be over. In the result, we dispose of the appeals as under:- (1) The judgment and decree passed by the trial court is modified. In supercession of the judgment and decree passed by the trial court, the appellant is granted a decree of specific performance as prayed for. (2) The appellant shall deposit the balance sale consideration before the court below, within one month from today with notice to the respondent as to the deposit. (3) Within one month from the date of receipt of the notice as to the deposit, the respondent shall fix a date for measuring out the plaint schedule property and satisfy the appellant regarding the exact extent and shall execute a sale deed in respect of the property showing the correct extent in favour of the appellant at the appellant's cost. Before executing the sale deed, the respondent shall satisfy the appellant that the property is free from any encumbrance. (4) After the execution of the sale deed, the respondent can withdraw the balance sale consideration deposited by the appellant before the court. (5) If the respondent fails to execute the sale deed as ordered above within the specified time limit, on the expiry of the same, the appellant can move the court to execute a sale deed in his name by the court on behalf of the respondent. (6) The appellant is entitled to recover respective costs in the original suits as well as in the appeals.