IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID WEDNESDAY, THE 21ST OCTOBER 2009 / 29TH ASWINA 1931 AS.No. 574 of 1998(C) --------------------- OS.593/1994 of II ADDL.SUB COURT,KOZHIKODE .................... APPELLANT/2ND DEFENDANT: ---------------- GOVINDANKUTTY NAIR, MEPPARAMBATH HOUSE, POST PANDEERANKAVU, KOZHIKODE. BY ADV. SRI.M.C.SEN, SENIOR ADVOCATE SRI.A.PARVATHI MENON SMT.SHAHNA KARTHIKEYAN RESPONDENTS/PLAINTIFF AND 1ST DEFENDANT: --------------------- 1. PERUMBILAKKAL CHANDRAN, S/O.APPUNNI, 22/248-A KUNNATH PARAMBA, THIRUVANNOOR AMSOM DESOM, KOZHIKODE TALUK. 2. PADMANABHAN NAIR, S/O.EDAKATTU PARU AMM, PEUMANNA VILLAGE, VELLAYIKODE DESOM, KOZHIKODE TALUK. ADV. SRI.K.JAYAKUMAR FOR R1 SRI.LEJU T.BALAN FOR ADV.COMMISSIONR SRI.P.B.KRISHNAN FOR R1 SRI.P.RAMAKRISHNAN FOR R2 SRI.C.ANIL KUMAR FOR R2 THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 21/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON CMP.NO.4730/98, I.A.NO.4146 & 4190/02 IN A.S.NO574/98 ----------------------------- Dismissed 21/10/2009 Sd/- Harun-Ul-Rashid, Judge. True Copy P.S. TO JUDGE HARUN-UL-RASHID,J. --------------------------- A.S.NO.574 OF 1998 --------------------------- DATED THIS THE 21ST DAY OF OCTOBER, 2009 JUDGMENT Appellant is the 2nd defendant. This appeal is directed against the judgment and decree in O.S.No.593/94 on the file of the Additional Sub Court, Kozhikode. The suit was filed for specific performance of the sale agreement or in the alternative for return of the advance amount with interest. The court below passed a decree directing the plaintiff to deposit the balance amount of Rs.57,000/- before court and further directed the lst defendant to execute sale deed in respect of the plaint schedule property in favour of the plaintiff on making such deposit. Aggrieved by the said judgment and decree, the 2nd defendant has come up in appeal. The parties are hereinafter referred to as the plaintiff and defendants as in the suit. 2. Ext.A1 dated 15/2/1993 is the sale agreement executed by the plaintiff in favour of the lst defendant. The -2- A.S.No.574/98 property admittedly belongs to the lst defendant. The extent of property involved in the transaction is 6.75 cents. The price agreed by the parties is Rs.67,500 at the rate of Rs.10,000/- per cent. There is a building in the property. There is a clause in the agreement, which obliges the lst defendant to demolish the shop building within the period within which the sale deed has to be executed. The period for execution of the sale deed is four months. The advance amount paid was Rs.10,000/-. The time was later extended till 15/9/1993. At the time of extending the time it is alleged in the plaint that a further sum of Rs.5,000/- was also paid to the lst defendant. Since the lst defendant did not carry out the terms of contact by not demolishing the building within the time stipulated by the parties, the plaintiff has filed the suit for specific performance, after sending Exts.A3 and A5 notices. 3. The 2nd defendant is the nephew of lst defendant. He was impleaded during the pendency of the suit finding that the lst defendant-Uncle had executed a sale deed in his favour in respect -3- A.S.No.574/98 of the disputed property. The said document is dated 14/6/1994 marked as Ext.A8. It is also contended by the plaintiff that Ext.A8 document is the result of the collusion between defendants 1 and 2, who are close relatives and that the registered document is not intended to act upon and the same was executed without consideration. The lst defendant resisted the suit. Ext.A1 agreement and the receipt of Rs.10,000/- are admitted. According to the defendants, there was a prior agreement entered into between the parties on 11/12/1992 for sale of two items of property. Plaint schedule property is the first item and that there was a condition in that agreement also to demolish the building in the plaint schedule property. Since the demolition of the build could not be carried out within the time, the 2nd agreement marked as Ext.A1was executed between the parties. The defendants denied the receipt of a further sum of Rs.5,000/- towards the sale consideration. According to the lst defendant, since the plaintiff was not interested in purchasing the property, he was compelled to sell the property to the 2nd defendant on a -4- A.S.No.574/98 lesser price, as he was in dire need of money. He prayed for dismissal of the suit. 4. The 2nd defendant, who is the purchaser prior to the institution of the suit and who is none other than the nephew of the lst defendant, contended that he is the tenant of the plaint schedule property, that he purchased the property for consideration and that he is the bona fide purchaser without knowledge of the agreement executed in favour of the plaintiff. 5. Before the trial court the plaintiff was examined as PW1 and Exts.A1 to A9 were marked on his side. On the side of the defendants DWs.1 to 3 were examined and Exts.B1 to B5(2) were marked. 6. The trial court examined the question as to whether the lst defendant received Rs.5,000/- subsequently in addition to Rs.10,000/- received on the date of Ext.A1 agreement. PW-1 when examined, testified that he paid a sum of Rs.10,000/- on the date of Ext.A1 agreement and paid a further sum of Rs.5,000/- when the period of agreement was extended upto -5- A.S.No.574/98 15/9/1993, that there is an endorsement on the back of Ext.A1. The said endorsement was not proved and marked in evidence. The trial court rightly held that when the lst defendant disputes the payment, it is the duty of the plaintiff to prove the payment by marking the receipt of the amount. So long as the plaintiff has not proved the receipt of Rs.5,000/-, the endorsement on the back of Ext.A1 cannot be taken into consideration and therefore the finding of the trial court that the plaintiff paid Rs.10,000/- is more acceptable. The important questions as to whether the plaintiff is entitled to get a decree of specific performance of contract and whether there was any impossibility of performance of contract are also examined in detail. It is an admitted case that the parties entered into Ext.A1 agreement and that the lst defendant received Rs,.10,000/- as advance. The price of the property is also recited in the agreement. Admittedly, the lst defendant was unable to comply with the terms of the agreement regarding the demolition of the building. The lst defendant did not take any steps to demolition of the building within the time -6- A.S.No.574/98 stipulated in the agreement. Without taking any steps to demolish the building, in fact the lst defendant had entered into an agreement with the 2nd defendant, who is his nephew, and executed Ext.A8 sale deed in his favour. The consideration shown is Rs.25,000/-. Ext.A1 agreement was executed agreeing to sell the property for a total price of Rs.67,500/-. No satisfactory explanation is put forward by the lst defendant for selling the property for a paltry sum of Rs.25,000/-. The fact that the property was sold for a sum of Rs.25,000/- itself reveals that the sale deed is never intended to be acted upon. It can be inferred that this is an adjustment between uncle and nephew for the purpose of defeating the legitimate claim of the plaintiff. The fact that the lst defendant was not able to carry out the demolition of the building within the time limit and the conduct of the lst defendant in executing a sale deed in favour of his nephew would go to show that the lst defendant was instrumental in defeating the rights of the plaintiff. The testimonies of DWs.1 to 3 are not inspiring. The circumstances I -7- A.S.No.574/98 have referred to above would go to show that DWs.1 and 2 who are defendants 1and 2 respectively, have played an active role in executing Ext.A8 sale deed and they have taken a joint defence in this suit denying the claim of the plaintiff. 7. It has come out in evidence that the plaintiff even suggested and offered to purchase the property with the building and according to him, the lst defendant insisted for demolishing the shop room, as he required the building materials for construction of another one. The trial court rightly observed that the defendants have no case that the plaintiff was not ready with money to purchase the property or that he is a man without any source to raise the funds. The circumstances also show that the lst defendant did not make any effort to get the building vacated and demolished. The circumstances also would go to show that the plaintiff has proved that he was ready and willing to perform his part of the agreement and therefore the trial court rightly passed a decree allowing the plaintiff for specific performance of the sale agreement. In the light of the amendment of the plaint -8- A.S.No.574/98 and impleadment of the 2nd defendant, the question to be considered is whether the assignment in favour of the 2nd defendant is a sham document without consideration and whether he is a bona fide purchaser without notice of the sale agreement. I have gone through the testimony of DW1, who admitted that the agreement between himself and the plaintiff is known to the 2nd defendant during the period of operation of the agreement. He also testified that the 2nd defendant knew the further fact that one of the terms in the agreement is the demolition of the building. DW2 who is the 2nd defendant in the suit, testified before the trial court that DW3 had approached him at the instance of the plaintiff for surrender of the building, but he refused to surrender. These facts will go to show that the 2nd defendant has knowledge about the execution of the agreement. Fully knowing that there was an agreement for sale between the parties, Ext.A8 sale deed was executed by the lst defendant in favour of the 2nd defendant for a consideration of Rs.25,000/-. It cannot be believed for a moment that this is a transaction intended to operate. The very -9- A.S.No.574/98 fact that the sale consideration shown in the document is Rs.25,000/- would reveal that in fact there was no sale of the property effected by Ext.A8. Apart from the fact that this is a sham document never intended to act upon, the further fact that the consideration shown in Ext.A1 is Rs.25,000/- would reveal that this is a collusive attempt on the part of defendants 1 and 2 to defeat the legitimate claim of the plaintiff. It is totally unbelievable that a person to sell the property for Rs.25,000/- when the price offered is Rs.67,500/-, that too about one year before. So the contention of the 2nd defendant that he is a bona fide purchaser cannot be accepted. Therefore, the finding of the trial court that the transaction between defendants 1 and 2 is collusive cannot be assailed successfully by the 2nd defendant. 8. Lastly, I have come across the fact that the lst defendant has not filed any appeal challenging the decree of specific performance passed by the trial court. The lst defendant is the owner of the property and he has not chosen to challenge the findings on issues. I do not find any reason to interfere with -10- A.S.No.574/98 the judgment and decree passed by the trial court. The view taken by the trial court is the only possible view in the given circumstances. In the result, the appeal fails and is accordingly dismissed. There will be no order as to costs. HARUN-UL-RASHID, Judge. kcv. -11- A.S.No.574/98 HARUN-UL-RASHID,J. -------------------------- A.S.NO.574 OF 1998 -------------------------- JUDGMENT 21st October, 2009