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2014 DIGILAW 628 (KER)

B. Wellingdon v. D. Shyama Prasad

2014-08-07

B.KEMAL PASHA, T.R.RAMACHANDRAN NAIR

body2014
Judgment Kemal Pasha, J. 1. Questions presently arise for consideration in this appeal are:- (1) Is it inequitable to grant a decree for the specific performance of a contract for sale of an immovable property, after a long lapse of time? (2) Can specific performance be granted in a case wherein there is huge escalation of the market value of the property than the meagre value prescribed in the contract of sale, that was entered into almost 21 years back? 2. The defendant had entered into Ext.AI agreement for sale on 03.09.1993 with the plaintiff in respect of 68 cents of landed property belonged to the defendant in Sy.No.485-A, 486 and 487/1 of the Mundakkal Village, for a consideration of Rs.8,500/- per cent. At the time of Ext.AI agreement, the defendant had received an amount of Rs.1,50,000/- from the plaintiff as advance. The properties covered by Ext.A1 are scheduled as two items, 'A' schedule consists of 10 cents of property in Sy.No.485-A and 34 cents in Sy.No.486, and 'B' schedule consists of 24 cents of property in Sy.No.487/1 of the Mundakkal Village, Kollam District. There were two civil suits in respect of the said properties as O.S.No.36/88 and O.S.No.90/91 before the court below. The defendant herein was the defendant in those suits also. Those suits were decided in favour of the defendant vide judgment dated 13.03.1992. By challenging the said judgment and decree, the plaintiffs in those suits had preferred A.S.Nos.1/93, 2/93 and 3/93 before the District Court, Kollam. Ext.AI was executed during the pendency of those appeals. 3. As per Ext.A1, the defendant had agreed to execute the sale deed in respect of the scheduled properties within three months of the judgments in the said Appeal Suits. All those appeals were dismissed vide judgment dated 25.07.1997. According to the plaintiff, the defendant had deliberately suppressed the dismissal of those appeals, with a view to avoiding the execution of the sale deed in respect of the properties in favour of the plaintiff. The defendant deliberately kept mum with regard to the favourable decision obtained by her in those appeals. It was only during the first week of November, 1998, that the plaintiff came to know about the dismissal of those appeals. The plaintiff was always ready and willing to get the sale deed executed by paying the balance consideration. The defendant deliberately kept mum with regard to the favourable decision obtained by her in those appeals. It was only during the first week of November, 1998, that the plaintiff came to know about the dismissal of those appeals. The plaintiff was always ready and willing to get the sale deed executed by paying the balance consideration. As there was deliberate evasive attempt from the part of the defendant and her husband, the plaintiff caused to issue Ext.A2 lawyer's notice dated 18.11.1997 to the defendant thereby demanding the execution of the sale deed. Instead of replying to the plaintiff's lawyer, the defendant directly sent Ext.A3 letter to the plaintiff expressing her unwillingness to execute the sale deed in respect of 44 cents of property, and by offering the execution of the sale deed in respect of 24 cents of property, that too reluctantly. In the alternative, the defendant had expressed her willingness to return the advance amount with interest. Within no time, the plaintiff filed O.S.No.58/98 before the Subordinate Judge's Court, Kollam seeking performance of the contract. 4. The defendant filed a written statement admitting the execution of Ext.A1; but contending that the amount of Rs.1,50,000/- was received not as part of consideration in respect of the property, whereas, it was received just as an advance. It is contended that Ext.A1 is not enforceable as the same was executed during the pendency of those appeals, as it was hit by Section 52 of the Transfer of Property Act, 1882. It was further contended that Ext.A1 agreement was contingent upon the finality of the litigations. According to the defendant, the plaintiff was following the proceedings of those appeals on all its hearing dates and even though those appeals were disposed of on 25.07.1997, the plaintiff had not approached the defendant within the said period of three months for getting the sale deed executed. The said period of three months from the dismissal of the appeals fixed for the execution of the sale deed is very crucial and the same was the essence of the contract. Even though the defendant had offered the execution of the sale deed in respect of 24 cents of property by abandoning Ext.A1 with regard to the rest of the properties, the plaintiff was not ready and willing to get it executed. Even though the defendant had offered the execution of the sale deed in respect of 24 cents of property by abandoning Ext.A1 with regard to the rest of the properties, the plaintiff was not ready and willing to get it executed. According to the defendant, the attempt of the plaintiff through the suit is to recover the advance amount of Rs.1,50,000/- which was already forfeited. The plaint schedule property except 24 cents was unsaleable. The defendant has sought for the dismissal of the suit with costs on the aforesaid grounds. 5. On the side of the plaintiff, he was examined as PW1 and Exts.A1 to A4 were marked. On the side of the defendant, her husband, who was her Power of Attorney holder, was examined as DW1 and Exts.B1 to B4 were marked. The court below, through the impugned judgment and decree, decreed the suit thereby allowing specific performance of the contract, and hence the appeal. 6. Heard the learned counsel for the appellants Sri.K.B. Pradeep and the learned counsel for the respondent Sri.R. Rajasekharan Pillai. The learned counsel for the appellants has argued that the plaintiff has failed to plead and prove the necessary aspects relating to the readiness and willingness of the plaintiff to get the sale deed executed. It was alternatively argued that the suit itself was premature as the pending litigations in respect of the properties in question were not attained finality even on the date of suit. It was further argued that it is totally inequitable to grant a decree for specific performance of the contract in this particular case as almost 21 years have been elapsed from the date of execution of Ext.A1, and in the mean time there is huge and exorbitant escalation in the market value of the property. It is further argued that at the most the plaintiff can be granted a decree for the return of the advance money, with interest and damages, if any. 7. In fact, the contention that Ext.A1 is unenforceable as it is hit by Section 52 of the Transfer of Property Act is not legally sustainable. As rightly found by the court below, the bar under Section 52 is for the transfer of the property in respect of which a suit or proceedings is pending, in which any right to the said immovable property is directly and specifically in question. As rightly found by the court below, the bar under Section 52 is for the transfer of the property in respect of which a suit or proceedings is pending, in which any right to the said immovable property is directly and specifically in question. Here, the sale deed has not been executed and the property has not been transferred during the pendency of the suits or the appeals and therefore, the bar under Section 52 of the Transfer of Property Act will not come into play in this case. Ext.A1 agreement is only a contract for sale of the said properties, and the same cannot be construed as a document of transfer of the property. 8. True that Ext.A1 can be treated as a contingent contract as defined under Section 31 of the Indian Contract Act, 1872. As per Section 31, a contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. True that Ext.A1 was executed during the pendency of those appeals, with the expectation that those appeals would be decided in favour of the defendant. It was clearly mentioned in Ext.A1 that the sale deed in respect of those properties would be executed by the defendant in favour of the plaintiff within three months from the end of those appeals, which means the disposal of those appeals. It was further made it clear that the end of the said appeals should be the date of judgment of those appeals. Therefore, it is evident that the parties had agreed to treat the date of judgment of those appeals as the date of final disposal of those appeals. 9. As per Section 32 of the Indian Contract Act, contingent contracts to do or not to do anything if an uncertain future event happens, cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such a contract becomes void. By considering the said provision under Section 32 of the Indian Evidence Act, a clause has been incorporated in Ext.A1 that in case the decision in the appeals comes out against the defendant, the defendant would execute the sale deed in respect of 24 cents of property out of the scheduled properties, which was not the subject matter of those appeals. It has to be noted that all those suits and appeals were confined to the properties set out in schedule 'A'. 24 cents of properties scheduled as 'B' was not involved in the said suits or appeals. It is true that on the decision of the appeals against the defendant, the contract of sale in respect of the said 44 cents of property involved in the suits and appeals, would become void. At the same time, as the event has happened, i.e., as the dismissal of those appeals was a decision in favour of the defendant, Ext.A1 agreement has become valid and enforceable. 10. There is no substance in the contention of the defendant that the amount of Rs.1,50,000/-obtained by the defendant from the plaintiff at the time of execution of Ext.A1 was not accepted as part of consideration, whereas, it was accepted merely as an advance. Even if it is styled as advance, it was nothing but part of consideration. Admittedly, the said amount was received by the defendant from the plaintiff. Whether it is styled as advance or part of consideration, it can only be treated as part of consideration and nothing more, as the plaintiff was expected to make the balance payment only for getting the sale deed executed pursuant to Ext.A1. 11. The other contention that the plaintiff ought to have obtained the sale deed executed within three months from the date of dismissal of the appeals, also does not deserve any merit. There is absolutely nothing to show that the time was the essence of the contract. Even though the defendant had contended that the plaintiff used to follow the proceedings in the appeal on all its hearing dates, there is absolutely nothing to substantiate the same. Admittedly, the plaintiff was not a party to any of those appeals. The defendant was the respondent in those appeals. When the appeals were dismissed, it was for the defendant to inform the plaintiff that those appeals were dismissed and therefore, the plaintiff should get the sale deed executed in his favour by paying the balance consideration. It seems that the defendant has admitted that she was ready and willing to execute the sale deed within three months from the date of dismissal of those appeals. 12. It seems that the defendant has admitted that she was ready and willing to execute the sale deed within three months from the date of dismissal of those appeals. 12. Regarding readiness and willingness, it seems that the plaintiff had clearly pleaded in paragraph 7 of the plaint that he was at all times ready and willing to pay the balance consideration and to get the sale deed executed in his favour. He has tendered evidence also to that effect as PW1. There is nothing to show that the defendant had demanded the plaintiff to get the sale deed executed. On the contrary, when Ext.A2 lawyer's notice issued at the instance of the plaintiff was received, the defendant issued Ext.A3 letter directly to the plaintiff by reluctantly offering the execution of the sale deed with regard to the 24 cents of property only. The plaintiff cannot be found fault with in not obtaining the sale deed executed in respect of that 24 cents only, as he wanted to get the sale deed executed in respect of the whole property. As the parties had decided through Ext.A1 that the sale deed could be executed within three months from the date of dismissal of those appeals, it cannot be stated that the suit is premature as the litigations in respect of the property were not finally disposed of. The parties had decided to execute the sale deed within a period of three months from the date of disposal of those appeals and not within three months from the final disposal of all those litigations. 13. The learned counsel for the appellants has relied on the decision in Satya Jain (D) Thr. Lrs. & others vs. Anis Ahmed Rushdie (D) Thrs. Lrs. and others AIR 2013 SC 434 wherein it was held in paragraph 28 as follows: "The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by S.20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The parameters for the exercise of discretion vested by S.20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasized that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. Such a view has been consistently adopted by this Court. By way of illustration opinions rendered in P.S.Ranakrishna Reddy v. M.K. Bhagyalakshmi, 2007 KHC 3245: 2007 (10) SCC 231 : JT 2007 (4) SC 223: AIR 2007 SC 1256 and more recently in Narinderjit Singh v. North Star Estate Promoters Ltd., 2012 KHC 4279: 2012 (5) SCC 712 : 2012(2) KHC SN 41: 2012 (5) SCALE 197: 2012 (3) KLT SN 12: AIR 2012 SC 2035 may be usefully recapitulated." 14. In paragraphs 29 and 30 of the decision cited supra it was held: "The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalizing the plaintiffs for no fault on their part; to deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour. From another perspective it may also indicate the inadequacies of the law to deal with the long delays that, at times, occur while rendering the final verdict in a given case. The aforesaid two features, at best, may justify award of additional compensation to the vendor by grant of a price higher than what had been stipulated in the agreement which price, in a given case, may even be the market price as on date of the order of the final Court. Having given our anxious consideration to all relevant aspects of the case we are of the view that the ends of justice would require this Court to intervene and set aside the findings and conclusions recorded by the High Court of Delhi in RFA No.11/1984 and to decree the suit of the plaintiffs for specific performance of the agreement dated 22/12/1970. We are of the further view that the sale deed that will now have to be executed by the defendants in favour of the plaintiffs will be for the market price of the suit property as on the date of the present order. As no material, whatsoever is available to enable us to make a correct assessment of the market value of the suit property as on date we request the learned Trial Judge of the High Court of Delhi to undertake the said exercise with such expedition as may be possible in the prevailing facts and circumstances." 15. No doubt the aforesaid principles enunciated by the Apex Court in Satya Jain's case (supra) are squarely applicable to the facts and circumstance of this case. Almost 21 years have been elapsed after the execution of Ext.A1 contract for sale. So far, the sale deed could not be executed. It seems that the property in question is situated in a residentially important locality within Kollam city. The said property is located almost near to the heart of the Kollam city, and just within 700 mtrs. away from the Kollam Trivandrum National Highway, N.H.47. There is very good road access to the property. The learned counsel for the appellants has pointed out that there is huge escalation in the market value of the property during the last 21 years. According to the learned counsel for the appellants, the property is worth Rs.6 to Rs.7 lakhs per cent and considering the large extent of the property, at any cost it will fetch a market value of not less than Rs.6 lakhs per cent. 16. The learned counsel for the respondent has argued that the respondent had recently sold a property in that locality which is more important than the plaint schedule properties, for a consideration of Rs.1.21 lakhs per cent. He has produced a copy of said sale deed No.3956 dated 30.11.2011 showing the sale of 19 cents of property for a consideration of Rs.1.21 lakhs per cent. 17. It is the admitted case that there is huge escalation in the market value of the property during the last 21 years, after the execution of Ext.A1. An application for the issuance of a Commission for ascertaining the market value and other details of the scheduled properties was filed by the learned counsel for additional appellants 2 and 4 before this Court. An application for the issuance of a Commission for ascertaining the market value and other details of the scheduled properties was filed by the learned counsel for additional appellants 2 and 4 before this Court. Vide order dated 10.12.2013, this Court allowed the said I.A. and Advocate Smt.A.Meena was appointed as the Advocate Commissioner for filing a report on the following points: "(1) Make a rough sketch of the plaint schedule property showing its lie, road connectivity etc. (2) A detailed report portraying the lie and nature of the property. (3) Report the suitability of the plaint schedule property for various usages with reference to the neighbouring lands and the prominence of the locality. (4) Proximity of the plaint schedule property from the nearby public institutions and the NH- 47. (5) Assess the current market value of the property in terms of centage. (6) Such other matters which the appellants may request the Advocate Commissioner at the time of inspection." 18. The learned Advocate Commissioner visited the property and filed a detailed report. The Advocate Commissioner has reported that from the enquires made by her, she could realise that the property would fetch a minimum of Rs.5 lakhs per cent. Most of the persons to whom she had made enquires had revealed that the property would fetch Rs.5 lakhs per cent. It seems that one person who is a resident of the locality had told the Commissioner that the existing market value of the properties in that locality is Rs.3 to Rs.3.5 lakhs per cent. The additional 2nd appellant produced the Notification No.K-13430/08 dated 14.12.2009 whereby fair value was fixed in respect of the property situated in Re.Sy.No. Block 107 in Mundakkal Village, Kollam District, which shows that the fair value fixed by the Government in respect of that property in the year 2008 as Rs.3 lakhs per Are. It seems that Ext.A1 was executed in the year 1993 which shows the consideration per cent as Rs.8,500/-. For the last 21 years, it seems that there is a huge escalation in the market value of the property. Considering the materials furnished by the Advocate Commissioner, the fair value fixed by the Government, and the rival submissions made by the learned counsel for the appellants and the respondent, we fix the present market value of the property as Rs.2,50,000/- per cent. 19. Considering the materials furnished by the Advocate Commissioner, the fair value fixed by the Government, and the rival submissions made by the learned counsel for the appellants and the respondent, we fix the present market value of the property as Rs.2,50,000/- per cent. 19. In the year 1993 the parties fixed the consideration at Rs.8,500/-per cent. On a lapse of 21 years, the same has become Rs.2,50,000/-. Therefore, it seems that the escalation of the market value is at the rate of Rs.11,500/-per cent, per year. The plaintiff had paid an amount of Rs.1,50,000/- at the time of execution of Ext.A1 in the year 1993, agreeing to pay a consideration at the rate of Rs.8,500/- per cent. The said amount of Rs.1,50,000/- paid by the plaintiff at the time of execution of Ext.A1 was worth to cover the consideration for 17. 68 cents of property. Therefore, it has to be considered that he had paid the consideration in respect of 17.68 cents of property by paying an amount of Rs.1,50,000/-in the year 1993. The balance amount to be paid was Rs.4,28,000/-. He ought to have paid that amount within 25.10.1997, i.e., within three months from the date of dismissal of those appeals on 25.07.1997. After deducting 17.68 cents of property, the balance extent comes to 50.32 cents. He had deposited the balance consideration of Rs.4,28,000/- in the year 2008 only. Therefore, the said payment was made after 15 years from the date of execution of Ext.A1. On a calculation by applying yearly escalation of the market value at the rate of Rs.11,500/- as aforesaid, the said amount of ?4,28,000/- deposited in the year 2008 was worth for just 2.49 cents[4,28,000/1,72,000]. Therefore, it has to be taken that the plaintiff has already paid full consideration for 17.68 cents + 2.59 cents = 20.27 cents of property, out of the plaint schedule properties. In short, the total amount spent by the plaintiff as part of consideration of Rs.1,50,000/-paid at the time of execution of Ext.A1 and the balance amount of Rs.4,28,000/- deposited by the plaintiff in the year 2008, is worth Rs.50,42,500/-at present. Presently, it is equal to the value of 20.27 cents of property. For getting the sale deed executed in respect of the whole extent of 68 cents of property, the plaintiff has to pay an amount of Rs.1,19,57,500/-[1,70,00,000 - 50,42,500] more. 20. Presently, it is equal to the value of 20.27 cents of property. For getting the sale deed executed in respect of the whole extent of 68 cents of property, the plaintiff has to pay an amount of Rs.1,19,57,500/-[1,70,00,000 - 50,42,500] more. 20. The equitable relief for specific performance of the contract covered by Ext.A1 cannot be denied to the plaintiff on the sole reason that there is huge escalation in the market value of the property during the last 21 years after the execution of Ext.A1. At the same time, while granting such an equitable relief to the plaintiff, the defendant should not be put to undue loss by denying the escalated market value of the property. Matters being so, the impugned judgment requires modification. 21. In the result, this RFA is allowed in part by modifying the impugned judgment and decree in the following terms:- (1) The legal representatives of the defendant are hereby directed to execute a sale deed in respect of the plaint schedule properties in favour of the plaintiff on the payment of balance sale consideration of Rs.1,19,57,500/- by the plaintiff within a period of three months from today; and on the failure of the legal representatives of the defendant to do so, the plaintiff shall deposit the said amount before the court below within 15 days on the expiry of the said three months, and to get the sale deed executed through court. (2) On the failure of the plaintiff to get the sale deed executed by making the payment or deposit as noted above in relief No.1, the legal representatives of the defendant shall execute the sale deed in respect of 20.27 cents of property out of the plaint schedule properties, as a single plot enabling convenient enjoyment, in favour of the plaintiff, without accepting any further consideration. (3) The plaintiff is entitled to realise the entire costs of the suit and this appeal from the plaint schedule properties or its consideration, as the case may be. All the interlocutory applications in this appeal are closed.