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2019 DIGILAW 140 (KER)

K. M. Ahammed Koya v. Moorkoth Sujitha

2019-02-08

ANNIE JOHN, K.HARILAL

body2019
JUDGMENT : Annie John, J. The appellant herein is the plaintiff and respondent herein is the defendant in OS.No.328/2013 on the files of the Additional Sub Court-II, Kozhikode. The suit is one for specific performance of contract with alternative prayer for realisation of advance amount. The appellant on 09.01.2010 entered into Ext.A1 agreement with the respondent by which the respondent agreed to sell and the appellant agreed to purchase the plaint schedule property for a total sale consideration of Rs.97 lakhs. On the date of execution of Ext.A1, Rs.15 lakhs were paid to the respondent as advance. The respondent before execution had agreed to evict the tenant, who had occupied the plaint schedule property. Since the tenant was not evicted as promised, respondent sought for further time to fulfil his part of contract. Though the appellant was willing and ready to perform his part of contract, the respondent was not ready to accept the same. In the said circumstances, the above suit was filed. 2. The respondent entered appearance filed written statement and resisted the prayers therein. Execution of Ext.A1 and A2 and receipt of Rs.15 lakhs towards advance sale consideration were denied by the respondent. The learned Sub Judge on erroneous appreciation of evidence, facts and circumstances of the case in hand, by impugned judgment and decree speciously dismissed the suit finding that the appellant was not entitled for a decree for specific performance of contract. The lower court has decreed the suit for realisation of an amount of Rs.15 lakhs and it was found that the appellant is entitled to realise the same with 8% interest from the respondent from 09.01.2010 till realisation of the entire amount. The respondent had denied execution of Exts.A1 and A2 agreements. 3. The trial court has found that Exts.A1 and A2 agreements have been executed by the respondent as claimed by the appellant. So having found that the denial of execution is false, the court below ought to have granted the discretionary relief of specific performance of contract in favour of the appellant. Hence, the appeal. 4. On the side of appellant PW1 and PW2 were examined and Exts.A1 to A3 were marked. On the side of respondent, DW1 was examined and Ext.B1 was marked. Hence, the appeal. 4. On the side of appellant PW1 and PW2 were examined and Exts.A1 to A3 were marked. On the side of respondent, DW1 was examined and Ext.B1 was marked. The ground as urged for interference of this Court is that the court below passed the impugned judgment without properly appreciating the facts and circumstances of the case. The respondent had denied execution of Exts.A1 and A2 agreements. But the trial court ultimately found that Exts.A1 and A2 agreements are genuine one and executed by the respondent. The court below ought to have appreciated the fact that the tenant, who was occupying premises were only evicted by the respondent recently and that for the said reasons, Ext.A2 agreement was executed at the instance of the respondent. The court below further erred in finding fault with the appellant in so far as not issuing lawyer notice. As such, issuance of a lawyer notice is not a pre-condition for instituting a suit for specific performance of a contract. 5. On these grounds, the appellant prays for setting aside the decree and judgment dated 28.11.2014 in OS.No.328/2013 on the files of Additional Sub Judge-II, Kozhikode to the extent disputed herein by allowing this appeal and decree the suit in full, as prayed for with cost. In fact, the suit was filed for specific performance of the contract on the basis of Exts.A1 and A2 agreement entered between the appellant and respondent mutually and with respect to the plaint schedule property. It was argued that at the time of execution of Ext.A1 agreement, the appellant had paid Rs.15 lakhs to the respondent towards the total sale consideration mutually agreed for Rs.97 lakhs. The plaint schedule property described as only one cent of property (0.40 ares) at Kozhikode consists of one shop room with vacant land on the back. At the time of execution of Exts.A1 agreement, the appellant had paid Rs.15,00,000/- to the respondent. The total sale consideration mutually agreed was Rs.97 lakhs. At the same time, the execution of Exts.A1 and A2 agreements and the payment of Rs.15 lakhs has denied by the respondent. According to the respondent, husband of the respondent borrowed Rs.5 lakhs from the appellant, who is a money lender through his agent one Jabbar. At that time as compelled by the appellant, respondent and her husband were forced to put signatures on stamp papers and blank papers. According to the respondent, husband of the respondent borrowed Rs.5 lakhs from the appellant, who is a money lender through his agent one Jabbar. At that time as compelled by the appellant, respondent and her husband were forced to put signatures on stamp papers and blank papers. The signatures contain in Exts.A1 and A2 were admitted by DW1 at the time of examination. 6. It is the case of the respondent that at the time of borrowal of Rs.5 lakhs, they were compelled to put signatures on blank stamp papers and blank papers. Thereafter, the respondent could not repay the amount as agreed. Therefore, the appellant and K.K. Jabbar reached at the house of the respondent and threatened. At that time, they were again compelled to put signatures on blank stamp papers. According to the respondent, by utilising these stamp papers, Exts.A1 and A2 documents have been fabricated. The respondent had taken such a contention in the written statement and while evidence that there was a threat on the part of the appellant and his agent for executing such a blank paper in favour of the appellant and no complaint has been launched by the respondent or her husband. 7. On going through the evidence by either sides and admission on the part of PW1, the lower court has held that Exts.A1 and A2 agreements were executed by the respondent and these facts has not been challenged by the respondent by filing an appeal against the judgment and decree in OS.No.328/2013. So, the finding of the court below that Exts.A1 and A2 are genuine documents executed by the respondent would stand unchallenged. 8. Now the only question to be considered is whether the finding entered by the court below to the effect that the appellant is not entitled to get decree for specific performance is correct or not. 9. As per Section 20(1) of the Specific Relief Act, it is stated that jurisdiction to order specific performance is discretionary. The court is not bound to grant a decree for specific performance merely because it is lawful to do so. Th learned counsel for the appellant would contend that the case of respondent is of total denial. So, once the execution of Exts.A1 and A2 have been proved, the appellant is entitled to get the relief of specific performance of contract. Th learned counsel for the appellant would contend that the case of respondent is of total denial. So, once the execution of Exts.A1 and A2 have been proved, the appellant is entitled to get the relief of specific performance of contract. It is true that Section 20(1) of the Specific Relief Act gives a power to the court to grant discretionary relief. 10. Now the only argument advanced by the learned counsel for the appellant is that once Exts.A1 and A2 are proved to be executed by the respondent, definitely the court could have invoked the discretionary relief by granting suit for specific performance. It is very important to note that respondent/defendant had denied execution of Exts.A1 and A2 documents by stating a different story for the circumstances in which Exts.A1 and A2 were happened to be executed. The court below has discarded the entire evidence adduced by PW1 and found that contention as raised by the respondent/defendant is false. A reading of Section 20(1) of the Specific Relief Act would show that even if the execution of the agreement has been proved, it is the discretion of the court, in view of the facts and circumstances of each and every case to grant or not to grant the relief of specific performance of contract. 11. It is the case of the appellant that the total sale consideration fixed was Rs.97 lakhs. It is also the case of the appellant that Rs.15 lakhs was paid on 09.01.2010 at the time of execution of Ext.A1 agreement. According to the respondent, her husband has borrowed Rs.5 lakh from the appellant, who is a money lender by profession through his agent namely Jabbar. But this fact has been already discarded by the court below by finding that Exts.A1 and A2 were duly executed by the respondent/defendant and an advance amount of Rs.15 lakhs was also entered into in Exts.A1 and A2 agreement. 12. The learned counsel for the respondent contended that even if the execution of Exts.A1 and A2 are proved, there is a considerable delay in filing the suit. It is an admitted fact that the plaint scheduled property is situated in the heart of the city. According to the respondent, considering the delay in instituting the suit, the appellant is not entitled for the decree of specific performance of contract. It is brought out that Ext.A1 agreement was executed on 09.01.2010. It is an admitted fact that the plaint scheduled property is situated in the heart of the city. According to the respondent, considering the delay in instituting the suit, the appellant is not entitled for the decree of specific performance of contract. It is brought out that Ext.A1 agreement was executed on 09.01.2010. The time stipulated for the reciprocal performance of the contract in Ext.A1 is 6 months. So, that period expired on 09.07.2010. The date of execution of Ext.A2 was 09.12.2011 and there also, the time stipulated was six months and it was expired on 09.06.2012. The present suit has been instituted only on 04.05.2013. PW1, while he was in the box admitted that at present the value of the plaint schedule property may come to Rs.2 crores. It was also admitted by PW1 that the plaint schedule property is situated in the heart of the Kozhikode city. 13. The learned counsel for the appellant would contend that the plaint schedule premises was leased to Khadi Gramodyog Bhavan and they were in possession of it since 1960. Only recently, they were evicted from the plaint schedule premises. It is true that there is a stipulation contained in the A1 and A2 agreement that the respondent is liable to be evicted the tenant and to hand over the vacant possession of the plaint schedule premises to the plaintiff. It has admitted by DW1 that only recently, the tenant has been evicted by her, it has further deposed by DW1 that now she is doing textile business therein. 14. It has held in Vimaleshwar Nagappa Shet v. Noor Ahmed Sheriff and others [ AIR 2011 SC 2057 ] that “it is settled law that Section 20 of the Specific Relief Act, 1963 confers discretionary powers. It is also well settled that the value of property escalates in urban areas very fast and it would not be equitable to grant specific performance after a lapse of long period of time”. 15. According to the respondent's counsel, no notice has been sent or no legal proceedings were initiated by the appellant to get executed the document in terms of Exts.A1 and A2. It was also admitted by the appellant that no notice has been issued calling upon the defendant to execute the sale deed after receiving the balance sale consideration. 15. According to the respondent's counsel, no notice has been sent or no legal proceedings were initiated by the appellant to get executed the document in terms of Exts.A1 and A2. It was also admitted by the appellant that no notice has been issued calling upon the defendant to execute the sale deed after receiving the balance sale consideration. It is an admitted fact that the tenant was not evicted from the petition schedule property as agreed in Ext.A1 agreement. So, the argument of the learned counsel for the appellant that only after eviction of the tenant from the building situated in the plaint schedule property, then only the respondent/defendant can execute the sale deed in favour of the appellant. The lower court has denied the discretionary relief for specific performance of the contract. 16. 11 In Saradamani Kandappan v. Rajalakshmi [2011 (3) KLT SC 43 (C.No.43) SC], it has held that “the principle that time is not the essence of contract relating to immovable properties may not apply in modern days not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist - The precedents from an era, when high inflation was unknown, may not longer apply - Specific Relief Act, 1963, S.20.” 17. So, from the observation of the court below, it has come out that solely on the basis of the ground that there is a delay in filing the suit against respondent/defendant and relying on the decision in 2011(3) KLT SC 43 (C.No.43) SC (supra), the lower court had denied to grant discretionary relief of specific performance of contract. 18. In Satya Jain v. Anis Ahmed Rushdie, 2013 (8) SCC 131 , at page 145, this Court observed :- "40. 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 emphasised that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance”. 19. In Nirmala Aand v. Advent Corpn. (P) Ltd. [ 2002 (8) SCC 146 ], at page 150, a three Judge Bench of this Court held as :- “6. It is true that grant of decree of specific performance lies in the discretion of the Court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the Court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.” 20. In a recent judgment dated 22.09.2014 in Civil Appeal No.9047 of 2014 entitled K. Prakash v. B.R. Sampath Kumar, this Court observed that : “It is true, as contemplated under S.20 of the Specific Relief Act, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree is established then the Court has to exercise its discretion in favour of granting relief for specific performance”. 21. However, the Court may take notice of the fact that there has been an increase in the price of the property and considering the other facts and circumstances of the case, this Court while granting decree for specific performance can impose such condition which may to some extent compensate the defendant-owner of the property. This aspect of the matter is considered by a three Judges of this Court in Nirmala Anand's case (supra). 22. In this connection, the counsel for the appellant has cited a ruling held in Zarina Siddiqui v. A. Ramalingam alias R. Amarnathan [2014 KHC 4697] wherein it has held that “if the defendant does not come with clean hands and suppress material facts and evidence and mislead the Court, then such discretion should not be exercised by refusing to grant specific performance - Planitiff is not to be denied decree of specific performance only on account of phenomenal increase of land price during the pendency of litigation. It has also held that “the equitable discretion to grant or not to grant a relief for specific performance also depends upon the conduct of the parties. The necessary ingredient has to be proved and established by the plaintiff so that discretion would be exercised judiciously in favour of the plaintiff. It has also held that “the equitable discretion to grant or not to grant a relief for specific performance also depends upon the conduct of the parties. The necessary ingredient has to be proved and established by the plaintiff so that discretion would be exercised judiciously in favour of the plaintiff. At the same time, if the defendant does not come with clean hands and suppresses material facts and evidence and misled the Court then such discretion should not be exercised by refusing to grant specific performance”. It has also held that the efflux of time and escalation of price of the property by itself cannot be a valid ground to deny the relief of specific performance. But the Court in its discretion may impose reasonable conditions including payment of additional amount to the vendor. It is equally well settled that the plaintiff is not to be denied specific performance only on account of phenomenal increase of price during the pendency of litigation. 23. In Kochammu & Ors.v. Kumaran & Anr. [ 2017 (4) KLJ 341 ] it has held that “even when the Court is inclined to grant a decree for specific performance, taking into account the escalation of price in urban areas and the fact that a decree for specific performance for a smaller amount agreed between the parties earlier will cause undue loss to the defendant, the Court has power to enhance the amount payable as sale consideration and re-fix the amount payable for such transaction. But Court must take into consideration the circumstances and the conduct of the parties before exercising such discretion in favour of the defendant”. It has also that “fixing of fair value by the Government for the purpose of registration does not mean that it reflects the real market value of the property - Fair value has been fixed by the Government for the purpose of collecting revenue as stamp duty and registration fee, and nothing more. 24. In Faizal Eroth and Another v. Venkalath Raveendran and Another [ 2013 (3) KHC 407 ] it has held that “there may be instances, where the obligations imposed on the seller and the intending buyer are so arranged that performance by one is conditional on performance by the other”. 24. In Faizal Eroth and Another v. Venkalath Raveendran and Another [ 2013 (3) KHC 407 ] it has held that “there may be instances, where the obligations imposed on the seller and the intending buyer are so arranged that performance by one is conditional on performance by the other”. “That means, where the performance of the intending buyer is conditional upon certain acts to be performed by the seller, the buyer need perform his part only after those acts are performed by the seller”. 25. So, from the averments in the written statement as well as in the evidence, it is quite clear that the respondent/defendant were not willing to fulfil the prayer as per Exts.A1 and A2 agreements. The respondent/defendant has raised unnecessary contentions in the written statement by stating that Exts.A1 and A2 were handed over in blank with the signature only. But they could not able to succeed in proving that they had given only blank signed paper to the appellant. So, it is proved that the respondent/defendant had raised unnecessary and unwanted contentions so as to defeat the interest of the appellant. Over and above, they have suppressed real facts from the court. Even if the court below found that Exts.A1 and A2 documents were executed by the respondent, they have not challenged the same by way of filing appeal. So, it is proved that the respondent/defendant had suppressed material facts from the court below and accordingly the court below found that Exts.A1 and A2 documents were duly executed by the respondent/defendant. But only the reason that there is a delay in filing suit and the court below has denied the suit for specific performance. 26. In fact, there is a condition stipulated in Exts.A1 and A2 documents that unless and until the tenant occupies the building is evicted the agreement as executed between the appellant and respondent should not be performed. Now the only question to be considered is whether the suit for specific performance denied by the court below is justified or not. It is true that the agreement was executed in the year 2010. So, lots of changes were occurred in the locality due to the long running of time. In fact, this property is situated in a most important area in Kozhikode city and in the year 2010, the value of the property was fixed as Rs.97 lakhs. It is true that the agreement was executed in the year 2010. So, lots of changes were occurred in the locality due to the long running of time. In fact, this property is situated in a most important area in Kozhikode city and in the year 2010, the value of the property was fixed as Rs.97 lakhs. Now almost 8 years have elapsed. So, definitely the value of the property will be double of the amount fixed in the year 2010. The appellant is ready to pay the escalated rate to the respondent also. 27. It has held in Zarina Siddiqui's case (supra) that the efflux of time and escalation of price of the property by itself cannot be a valid ground to deny the relief of specific performance. But the Court in its discretion may impose reasonable conditions including payment of additional amount to the vendor. 28. It has held in Kochammu's case (supra) that the Court has power to enhance the amount payable as sale consideration and re-fix the amount payable for such transaction. 29. Here, it is proved that due to the latches on the part of the respondent/defendant, sale could not be executed in time. We do not find any fault on the side of the appellant/plaintiff for not executing the sale deed in time. We have also a considered opinion that the amount can be re-fixed by exercising the power of the court. So, accordingly we re-fix the value of the plaint schedule property as Rs.1 Crore and 65 thousand. In the facts and circumstances of the case and considering the phenomenal increase in price during the period the matter remained pending in different Courts, we are of the considered opinion that impugned order under appeal be set aside but with a condition imposed upon the appellant (plaintiff) to pay a sum of Rs.1,50,00,000/- (Rupees One Crore Fifty Lakhs only) in addition to the amount already paid by the appellant to the respondent. On deposit in trial court of aforesaid amount by the appellant, for payment to the respondent, within three months from today, the respondent shall execute and register the sale deed in favour of the plaintiff in respect of the suit property. On deposit in trial court of aforesaid amount by the appellant, for payment to the respondent, within three months from today, the respondent shall execute and register the sale deed in favour of the plaintiff in respect of the suit property. In the event, the aforesaid condition of deposit of Rs.1,50,00,000/- (Rupees One Crore Fifty lakhs only) is fulfilled within the time stipulated herein above but the defendant fails to comply with the direction, then the appellant shall be entitled to execute the decree in accordance with the procedure provided in law. In the result, the decree and judgment of the Subordinate Judges Court-II, Kozhikode is hereby set aside and this RFA is allowed on the following conditions :- (a). The appellant/plaintiff is directed to deposit the balance sale consideration of Rs.1,50,00,000/- (Rupees One Crore and fifty lakhs only) before the court below within one month from the date of receipt of a copy of this judgment with notice to the respondent (b). On deposit of the above said amount, the respondent/defendant shall execute the sale of the plaint schedule property within one month from the date of deposit of the said amount. (c). If the respondent/defendant fails to execute the sale deed, the appellant/plaintiff shall execute the sale deed through court in accordance with law. (d). If the appellant/plaintiff fails to deposit the amount within the stipulated time as cited supra, the judgment and decree of the lower court will survive. (e). No order as to costs.