Nazeer vs Muhammed Asharaf on 21 September, 2023

[Cites 24, Cited by 0]

Kerala High Court

Nazeer vs Muhammed Asharaf on 21 September, 2023

Defendants Nos.1 and 2 in O.S.No.679 of 2012 before the Sub Court, Kannur has filed this appeal under Section 96, read with Order XLI, Rule 1 of the Code of Civil Procedure, 1908. The plaintiffs and defendants No. 3 to 6 are the respondents.

2. The parties are hereinafter referred to as they were arrayed in the suit.

3. Defendant Nos.1 and 2 are aggrieved by the decree in the suit granting specific performance of Ext.A1 agreement. The suit was laid alleging that the defendants No. 1 and 2 did not come forward to execute the sale deed in terms of Ext.A1 agreement dated 05.04.2011, despite repeated demands. The said agreement was entered into between the plaintiffs and defendants No.1 and 2 for the sale of the plaint schedule property, which is 29 cents of land. The 1 st defendant is the owner. The 2nd defendant, who is his brother, entered into the agreement as his power of attorney agreeing to sell the property for a sale consideration of Rs.2,82,000/- per cent. On the date of the agreement, Rs.9 lakhs was paid as part of the sale consideration.

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4. The plaintiffs would contend that various amounts were paid to defendant Nos.1 and 2 towards part sale consideration and each time the 2nd defendant made endorsements on Ext.A1. But, defendant Nos.1 and 2 did not oblige the stipulations in the agreement, particularly with respect to obtaining consent from the previous owners of the property, who then were minors. For the said reason, the period of the contract was extended from time to time and ultimately for nine months from 15.02.2012. In the meantime, the plaintiffs came to know that defendant Nos.1 and 2 were taking steps to transfer the property to third parties. Therefore, they filed O.S.No.383 of 2012 seeking a decree of injunction. In that suit, the plaintiffs deposited the entire balance sale consideration in obedience to the direction of the learned Munsiff. Although defendant Nos.1 and 2 agreed to execute the sale deed, they did not come forward till the period of the contract was about to expire. In the circumstances, the plaintiffs had filed the suit.

5. Defendants No. 1 and 2 filed a written statement admitting execution of Ext.A1 agreement. They, however, 5 R.F.A.No.18 of 2018 contended that it was the plaintiffs who needed more time to be ready to perform their part of the contract, and they protracted execution of the sale deed for one or the other reason. Defendants No. 1 and 2 were in urgent need of money for the completion of the construction of their houses. They further would contend that besides Ext. A1, there were two agreements by which the plaintiffs agreed to purchase the properties of the 2nd defendant and their other brother Sri.Rafi. The plaint schedule property is one abutting the public road and that of the 2nd defendant and Sri.Rafi are behind without having any direct access to the road. The plaintiffs avoided purchase of the properties behind with an oblique motive and wanted to purchase only the plaint schedule property. All three agreements are integrated agreements and the plaintiffs are not entitled to choose one. Only because all these properties were agreed to be purchased by the plaintiffs, defendants No. 1 and 2 agreed to sell the plaint schedule property for such a low price of Rs.2,82,000/- per cent. Since the plaintiffs denounced the other two agreements, they are not entitled, on equity, to get specific performance of Ext.A1 agreement. On 21.06.2012 a 6 R.F.A.No.18 of 2018 notice was sent to the plaintiffs asking to get the sale deed executed within a period of ten days. They did not. Instead, they filed a suit for injunction. In such circumstances, defendants No. 1 and 2 issued notice on 15.11.2012 intimating the plaintiffs that Ext.A1 agreement stood cancelled. Thereafter, defendants No. 1 and 2 assigned the property to third parties. In such circumstances, the suit has become infructuous and accordingly, they sought to dismiss the suit.

6. Additional defendants No. 3 to 6 were impleaded in the suit as per the order in I.A.1704 of 2014. They said to have purchased the plaint schedule property from defendants No. 1 and 2. It is seen that additional defendants No.3 to 6 entered appearance. No written statement was seen filed or found with the records. Defendants No.5 and 6 remained exparte during trial.

7. After framing issues, trial was held in the suit. PW1, DW1 and DW2 were examined. PW1 is the 1 st plaintiff. DW1 is the 1st defendant. DW2 is the 4th defendant. Exts.A1 to A4 on the side of the plaintiffs and Exts.B1 to Ext.B7 marked on the side of the defendants were produced.

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8. The Sub Court held that payment of various amounts totalling Rs.66 lakhs, regarding which there have been endorsements on Ext.A1, was made by the plaintiffs towards sale consideration. The allegation that the plaintiffs were not ready and willing to purchase the property and as a ruse only O.S.No.383 of 2012 was filed by them was not accepted by the court below. Finding that the plaintiffs had always been ready and willing to perform their part of the contract and on account of the fault on the part of defendants No.1 and 2, sale as per Ext.A1 could not take place, the court below granted a decree. Contentions raised by additional defendants No.3 to 6 that they purchased the plaint schedule property and their title to it is valid were not accepted. It was also held that the sale in their favour comes within the mischief of Section 52 of the Transfer of Property Act, 1882. It was held that the sale of the property said to have taken place in favour of additional defendants No.3 to 6 would not debar the plaintiffs from getting the sale deed executed. Thus, a decree was granted in favour of the plaintiffs.

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9. Heard the learned counsel appearing for the plaintiffs and the learned counsel appearing defendants No. 1 and 2 and additional defendants No. 3 to 6.

10. Defendants No.1 and 2 would assail the judgment and decree both on factual and legal grounds. It is contended that the suit was barred by Order II, Rule 2 of the Code, although no such plea was not taken up before the court below. Their assertion is that in O.S.No.383 of 2012, the relief of specific performance should have been included, and as they did not do so, the present suit is not maintainable.

11. The learned counsel for defendants No.1 and 2 would contend that when the plaintiffs refused to honour the agreement for sale in respect of the property of the 2 nd defendant and Sri.Rafi, the court below ought to have exercised discretion against the plaintiffs. When the plaintiffs pursued Ext.A1 alone, that amounted to deception and that should have been considered while the court exercised discretion under Section 20 of the Specific Relief Act. The learned counsel further contends that on the point of readiness and willingness the plaintiffs failed to prove their case.

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12. The learned counsel appearing for additional defendants No.3 to 6 was more on technical aspects. It is contended that despite impleading them, the plaint was not appropriately amended, whereby the plaint did not satisfy the requirements under Order IV, Rule 2 of the Code. Such a plaint should have been rejected under Order VII, Rule 11 of the Code. Further, it was contended that no relief for getting possession of the plaint schedule property was included in the suit and when the plaintiffs assigned the property and handed over possession to additional defendants No.3 to 6, the suit fell within the mischief of Section 22 of the Specific Relief Act, 1963, and the court below without taking into that aspect decreed the suit. It is also contended that only at the fag end of the proceedings, additional defendants 3 to 6 were impleaded and as they were denied a reasonable opportunity to place their case before the court, the decree is liable to be reversed.

13. The learned counsel appearing for plaintiffs, on the other hand, would submit that from the evidence on record together with the admission of execution of Ext.A1 and also 10 R.F.A.No.18 of 2018 receipt of Rs.66 lakhs, which finds a place in Ext.A1 itself, their readiness and willingness to perform their part of the contract has been satisfactorily proved. It is further submitted that the contract as per Ext.A1 is totally independent and therefore enforcement of the same is unconnected to the agreement for sale with the 2nd defendant, which alone is admitted by the plaintiffs. The equity pointed out by defendants No.1 and 2 is touching the agreement of sale in regard to the properties of the 2nd defendant and Sri.Rafi and therefore the said aspects do not have a say in deciding the matter in issue in the suit. The learned counsel for the plaintiffs thus contended that there is absolutely no reason to interfere with the impugned decree.

14. Defendants No.1 and 2 are brothers. The 1 st defendant is the owner of the plaint schedule property of 29 cents. The 2nd defendant executed Ext.A1 as the power of attorney holder of the 1st defendant. Its execution is admitted. At the time of execution of Ext.A1 agreement, Rs.9 lakhs was paid as part sale consideration. The endorsements carried by Ext.A1 would show that Rs.57 lakhs was paid subsequently in 11 R.F.A.No.18 of 2018 several instalments. Receipt of Rs.66 lakhs in total is admitted by defendants No.1 and 2, subject to a caveat that subsequent payments of Rs.57 lakhs were concerning the agreement for the sale of property of the 2 nd defendant, Sri.Musthafa.

15. The 1st defendant deposed as DW1 that except for the first payment of Rs.9 lakhs, nothing was received by him and the other payments of Rs.57 lakhs were towards the sale consideration for the property of the 2 nd defendant. The 2nd defendant did not come forward to depose before the court. He as the power of attorney of the 1 st defendant, executed Ext.A1 and received all the payments totalling Rs.66 lakhs. The endorsements regarding such payments on the reverse of Ext.A1 are not in dispute. The specific recital on each such endorsement is that the payment was in relation to that agreement. Defendants No.1 and 2 raised a contention that the power of attorney by the 1st defendant in favour of the 2nd defendant was cancelled in November, 2011. But, in the light of the admission by DW1 that such a cancellation was not intimated to the plaintiffs, the cancellation cannot have any 12 R.F.A.No.18 of 2018 reckoning. In such circumstances, it can only be said that the whole payment of Rs.66 lakhs was towards sale consideration in relation to the sale agreed as per Ext.A1. Whether the 1 st defendant received all the said amounts is not a relevant consideration in the suit.

16. PW1 admitted that the plaint schedule property alone has road frontage and the properties of Sri. Musthafa and Sri. Rafi do not have road frontage. He deposed that there was an agreement to purchase the property of Sri.Musthafa and not that of Sri.Rafi. It is his further version that only because Sri. Musthafa did not prepare to execute the sale deed, despite demand, that agreement fell through and he had to initiate a suit for recovery of Rs.11 lakhs he paid as advance to Sri.Musthafa. In order to improbabilise the case of defendants No.1 and 2 in this regard, nothing has been brought on record. Even the agreements are not produced. The fact that the plaintiffs filed O.S.No.4 of 2015 in respect of the agreement for sale relating to the property of Sri.Mustafa is now an undisputed fact. But, no further details regarding those agreements for sale and the subsequent matters 13 R.F.A.No.18 of 2018 transpired thereon are available on record. Therefore, it cannot be taken that the plaintiffs wanted to avoid the purchase of the property of Sri.Mustafa and to get the plaint schedule property alone on sale with an oblique motive.

17. The plaintiffs filed O.S.No.383 of 2012 before the Munsiff's Court, Kannur. That was a suit for injunction restraining defendants No.1 and 2 from alienating the plaint schedule property to third parties. In that suit, an order of injunction was granted on the condition that the plaintiffs deposit Rs.15,78,000/-, which was the balance sale consideration under Ext.A1. It is in that context alone, that the plea of defendants No.1 and 2 that the plaintiffs were not ready to get the sale deed executed and the reason thereof was lack of funds with them can be appreciated.

18. As pointed out above, out of the total of Rs.81,78,000/-, Rs.66 lakhs was paid as on 15.02.2012. The last endorsement regarding payment of part sale consideration in Ext.A1, although not a dated one, can be taken as 15.02.2012 since the recital is to the effect that the period of the contract was extended for nine months from 14 R.F.A.No.18 of 2018 15.02.2012. Defendants No.1 and 2, however, disputed that the period was extended for nine months. They would contend that the period was extended for three months only. That contention will be considered later. When the plaintiffs paid Rs.66 lakhs by 15.02.2012 and they could deposit Rs.15,78,000/- before the Munsiff's Court in O.S.No.383 of 2012, which was much before 14.11.2012, on which date only the period of Ext.A1 would have expired, according to the plaintiffs, it cannot be assumed that the plaintiffs were not ready and willing to perform their part of the contract.

19. Whether the period of contract to sell was extended for three months from 15.02.2012 only or as claimed by the plaintiffs the period was extended for nine months has relevance while deciding the entitlement of the plaintiffs to get a relief of specific performance. DW1 deposed before the court that although the plaintiffs were asked to pay the balance purchase money and get the sale deed executed, they were reluctant. Ext.B1 notice dated 21.06.2012 was said to have been issued asking the plaintiffs to pay the balance price and get the sale deed executed, and further intimating 15 R.F.A.No.18 of 2018 that else, the agreement would be cancelled. The said contention is related to the stand taken by defendants No.1 and 2 that the period of Ext.A1 was extended from 15.02.2012 for three months only and not nine months.

20. The learned counsel for defendants No.1 and 2 submitted that from the endorsement in Ext.A1 regarding extension for nine months from 15.02.2012 itself its manipulation is obvious. We have perused Ext.A1. It is true that the words 'മതല 9' does not conform to the alignment of other lines. The said writing extends beyond the common alignment and that creates a doubt regarding its genuineness. But on a close scrutiny, no disparity to the said words from the rest of the words can be seen. The circumstances connected to the said aspect therefore assume importance.

21. Ext.B1 was seen sent on 21.06.2012 to the plaintiffs. Exts.B2 and B2(a) are the postal receipts for sending the said notice. The plaintiffs denied its receipt. The learned counsel appearing for defendants No.1 and 2 would submit that having sent the said notice by registered post, it can well be presumed that the plaintiffs received the same. 16 R.F.A.No.18 of 2018 Section 27 of the General Clauses Act, 1897 and Section 114 of the Evidence Act, 1872 were placed on reliance. Section 27 of the General Clauses Act enables to draw a presumption that if a notice in compliance with the provisions of a central statute is sent by registered post, a presumption that the same was duly served may be drawn. Such a presumption may not be possible in the case of Ext.B1, which is not the one issued in compliance with any statutory provision. As held in K.V.Joseph & Sons v. Surya Constructions [2005 (1) KLT 236] postal department is a central government agency, which is governed by statutory rules and regulations, and if a notice is sent by registered post, if it is recognised as a mode of service in a Central Statute, a presumption is possible under Section 27 of the General Clauses Act. It is further observed that the presumption of delivery in regard to a postal article sent by registered post is possible under Section 114 of the Evidence Act on the premises that an official act is done in a regular manner.

22. In C.C.Alavi Haji v. Palapetty Muhammed and another [(2007) 14 SCC 750], the Apex Court took the view 17 R.F.A.No.18 of 2018 that in regard to a notice sent through post, where there is an endorsement by the postal peon on the envelope, a presumption regarding its genuineness is possible, but it is a rebuttable presumption. In this case the envelope said to have been sent to the plaintiffs along with the endorsement of the postal peon thereon is not available. From Exts.B2 and B2(a) alone a presumption regarding due issuance of a notice as in Ext.B1 cannot be presumed. The said decisions are therefore not available to the aid of defendants No.1 and 2. That apart, defendants No.1 and 2 candidly admitted in the written statement that plaintiffs did not receive Ext.B1 notice. DW1 took such a stand even in his proof affidavit. If so, it cannot be said that defendants No.1 and 2 acted on the premises that the period of Ext.A1 was extended for three months only as they contend. On the other hand, the evidence and circumstances would probabilise that the period was extended for nine months and the endorsement in Ext.A1 in this regard is genuine.

23. The contention of defendants No.1 and 2 that the suit was barred by the provisions of Order II, Rule 2 of the Code 18 R.F.A.No.18 of 2018 is on the ground that a relief of specific performance, which is claimed in this suit, could have been claimed in O.S.No.383 of 2012, but they did not. The principle laid down in Virgo Industries (Eng.) (P) Ltd. v. Venturetech Solutions (P) Ltd. [(2013) 1 SCC 625], which was followed in Inbasegaran and another v. S.Natarajan (Dead) through LRs [(2015) 11 SCC 12] and by this Court in Sasidharan Nair v. Kunju Mohammed Unni [2017 (3) KLT 751] is placed reliance on to fortify the said contention. The Apex Court laid down the principle that if it was open for the plaintiffs to incorporate the relief of specific performance along with the relief of permanent injunction in the former suit, the subsequent suit for specific performance would be barred under Order II, Rule 2 of the Code, unless no leave is obtained from the court where the first suit was filed. The principle based on which the said proposition was laid down is that Order II, Rule 2 of the Code seeks to avoid multiplicity of litigations on the same cause of action. It was also held that the provisions of Order II, Rule 2 of the Code will apply even if the first suit is not already disposed of and in a situation where the second suit has been filed during the pendency of the first suit. 19 R.F.A.No.18 of 2018

24. Ext.B6 is a copy of the judgment in C.M.A.No.32 of 2014. It arose on the order in I.A.No.1301 of 2012 in O.S.No.679 of 2012. It is stated in Ext.B6 that O.S.No.383 of 2012 was withdrawn by the plaintiffs reserving their right to file a suit for specific performance. O.S.No.679 of 2012 was filed on 14.11.2012 and O.S.No.383 of 2012 was withdrawn only on 30.11.2012. Though subsequent, having obtained leave of the court where O.S.No.383 of 2012 was filed, O.S.No.679 of 2012 does not come within the mischief of Order II, Rule 2(3) of the Code. Therefore, the said contention of defendants No.1 and 2 is untenable.

25. Coming to the contentions of defendants No.3 to 6, we are of the view that in the facts and circumstances of this case, such contentions have no substance. Defendants No.3 to 6 were impleaded as per the order dated 02.09.2015 in I.A.No.1704 of 2014. I.A.No.1705 of 2014 was filed to amend the plaint consequent to such impleading. That petition was allowed and the amendment was carried out. It is true that in the cause title alone necessary amendments were carried out. In the statement of facts or reliefs no 20 R.F.A.No.18 of 2018 amendment was brought about. Nonetheless, the requirement of Order I, Rule 10(4) of the Code was satisfied by such an amendment. Hence, the contention of these defendants that the plaint does not conform to the rules for want of the amendment and therefore it does not satisfy the requirements of Order IV, Rule 2 of the Code obligating the court to reject the plaint, is devoid of any merit.

26. Additional defendants No.3 to 6 were impleaded on 02.09.2015. It is seen that they entered appearance by filing a vakalath. But none of them had filed a written statement. The trial in the suit, say, examination of witnesses, started only on 08.08.2016. PW1 was cross-examined by the 4th defendant on behalf of additional defendants No.3 to 6. The 4 th defendant has given oral evidence as DW2 as well. How can defendants No.3 to 6 now contend that they were denied an opportunity to contest the suit? The said contention also therefore has no substance.

27. Yet another contention set forth is that the suit is bad for want of claiming possession. Section 22(1)(a) of the Specific Relief Act envisages that a plaintiff in a suit for 21 R.F.A.No.18 of 2018 specific performance can claim a relief of possession besides specific performance. Sub-section (2) creates an embargo to grant reliefs under clause (a) or (b) of sub-section (1), unless it has been specifically claimed. Pointing out the said bar the learned counsel would contend that the suit should have been dismissed having the property been already alienated and possession handed over to additional defendants 3 to 6 and no relief of getting possession was sought.

28. There cannot be any doubt that since the transfer in favour of these defendants No.3 to 6 was after the date of institution of the suit, they would be bound by the decree in view of the provisions of Section 52 of the Transfer of Property Act. It is to be noted that Section 28(3) of the Specific Relief Act enables the plaintiffs to file an application in the same suit to claim delivery of possession of the property. The Apex Court in Babu Lal v. M/s. Hazari Lal Kishori Lal and others [(1982) 1 SCC 525 held that Sub-section (3) of Section 28 clearly contemplates that if the purchaser or lessee pays the purchase money or other sum which he is ordered to pay under the decree, the Court may on application made in the 22 R.F.A.No.18 of 2018 same suit, award the purchaser or lessee such further relief as he may be entitled under sub-clause (b) of sub-section (3) of Section 28. So, the non-inclusion of a relief for possession in the suit does not make the suit bad. The contention of defendants No.3 to 6 in this regard is untenable.

29. The learned counsel appearing for defendants No.1 and 2 would submit that as per the provisions of Section 20 of the Specific Relief Act (unamended) the jurisdiction to grant a decree specific performance is discretionary, and the court is not bound to grant such a relief merely because it is lawful to do so. It is submitted that in the facts and circumstances of this case, discretion cannot be exercised in favour of the plaintiffs. It is contended by the defendants that the oblique motive of the plaintiffs to grab the property on the roadside and avoid the purchase of the properties behind, which belongs to the 2nd defendant and Sri. Rafi disentitles them from getting a decree on equitable grounds. In order to fortify that contention the learned counsel placed reliance on the decisions of the Apex Court in Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son and others [AIR 1987 SC 23 R.F.A.No.18 of 2018 2328], Lourdu Mari David and others v. Louis Chinnaya Arogiaswamy and others [(1996) 5 SCC 589], G.Jayashree and others v. Bhagwandas S.Patel and others [(2009) 3 SCC 141], Mohammadia Co-operative Building Society Limited v. Lakshmi Srinivasa Co-operative Building Society Limited and others [(2008) 7 SCC 310], Bhaskar Laxman Jadhav and others v. Karamveer Kakasaheb Wagh Education Society and others [(2013) 11 SCC 531] and Ramesh Chand (dead) Thr.LRs. v. Asaruddin (Dead) Thr.LRs. and others [(2016) 1 SCC 653].

30. In Sughar Singh v. Hari Singh [AIR 2021 SC 5581] the Apex Court held that the provisions of Section 20 of the Specific Relief Act as amended by Act 18 of 2020 are not applicable to the suits filed prior to the amendment. Of course, the principle of the new provisions has a bearing in the pending suits as well. This Court in Asha Joseph v. Babu C.George [2022 (3) KLT 208] after considering the aforesaid principle and also the law laid down by the Apex Court as to how the discretion under Section 20 of the Specific Relief Act is to be exercised, held:

"17. The next question to be considered is whether the plaintiff is entitled to a decree for specific performance 24 R.F.A.No.18 of 2018 of the agreement for sale of the plaint schedule property in the light of the findings rendered above. As noted, the jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so. Of course, the discretion aforesaid is one to be exercised on sound and reasonable grounds, guided by judicial principles capable of correction by a Court of Appeal. In essence, specific performance is an equitable relief. When the court gets into the equity jurisdiction, it has to ensure fairness to both sides. Even though the general rule is that the delay as a result of the court process and the phenomenal increase of price of landed properties involved during the pendency of the litigation cannot be put against the plaintiff, it is by now settled that severe hardship to which a particular party would be put to, is a ground for refusing specific performance, even when it results from circumstances, which arise after the conclusion of the contract [See K. Narendra v. Riviera Apartments (P) Ltd., (1999) 5 SCC 77]. Similarly, it is also by now settled that the courts would be justified in directing vendee in an agreement for sale of an immovable property to pay additional amounts by way of sale consideration, having regard to the delay in the judicial process and the consequential escalation of the price of the property, while ordering specific performance [See Nirmala Anand v. Advent Corporation (P) Ltd., (2002) 5 SCC 481 and Zarina Siddiqui v. A. Ramalingam, (2015) 1 SCC 705]. Again, there are 25 R.F.A.No.18 of 2018 instances where the courts having regard to the delay and escalation of price, ordered specific performance of a portion of the subject matter of the agreement for sale. Wellingdon B. cited by the learned counsel for the appellant is one such case, where the court directed the vendee to pay a higher amount than what was agreed upon, having regard to the delay and escalation of price of the property while ordering specific performance of an agreement for sale. Alternatively, the court has also directed the specific performance of the agreement for sale in respect of a portion of the property involved, corresponding to the amount already parted with by the vendee to the vendor. Of course, these are all not principles of universal application and the relief to be granted in a specific case is one to be moulded by the court having regard to the facts and circumstances."

31. As pointed out above, plaintiffs cannot be found fault with for initiating action for specific performance of Ext.A1 agreement alone. Even on taking that the plaintiffs did not go for getting the agreement for sale with the 2 nd defendant (which alone is admitted by them or proved) specifically enforced, that shall not be a reason to hold against the plaintiffs on equitable grounds. From the evidence on record, it is explicitly clear that Ext.A1 does not have any relation with the agreement for sale the plaintiffs had entered 26 R.F.A.No.18 of 2018 into with the 2nd defendant. Equity can be worked out only within the perimeters of the subject matter of the litigation. It cannot go beyond and bring in extraneous matters and such matters to have an influence on the decision. On considering the respective pleadings and evidence on record, it can only be held that the agreement for sale covered by Ext.A1 is an independent transaction and the plaintiffs have been ready and willing to perform their part of the contract always. In such circumstances, the discretion exercised by the court below in favour of granting a decree of specific performance is on sound and reasonable grounds, and well within its powers, which requires no interference. Accordingly, we find that this appeal lacks merits and deserves to be dismissed.

The appeal is dismissed. No costs.

Sd/-

P.B. SURESH KUMAR, JUDGE Sd/-

P.G. AJITHKUMAR, JUDGE dkr

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