IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.BHAVADASAN WEDNESDAY, THE 22ND JULY 2009 / 31ST ASHADHA 1931 RFA.No. 51 of 2005() -------------------- OS.31/2000 of PRINCIPAL SUB COURT,ATTINGAL .................... APPELLANT/2ND DEFENDANT ------------------------------------------- SATHYAN, S/O.SANKARAN, POOVATHOORU VILAYIL VEEDU, NELLANADU MURI, VAMANAPURAM VILLAGE, NOW RESIDING AT POOVANATHUMMOODU, EDAKKODE VILLAGE CHIRAYINKEEZH TALUK. BY ADV. SRI.S.V.BALAKRISHNA IYER, SENIOR ADVOCATE DR.V.N.SANKARJEE RESPONDENT(S)/PLAINTIFF/1ST DEFENDANT: ---------------------------------------------------------------- 1. SARANGADHARAN, S/O.JANARDHANAN, NITHIN NIVAS, KODALIKKONAM, EDAKKODU DESOM AND VILLAGE, CHIRAYINKEEZH TALUK. 2. AJITHA, D/O.SARALA, CHARUVILA PUTHEN VEEDU, KODALIKONAM, EDAKKAKDU DESOM AND VILLAGE, CHIRAYINKEEZH TALUK. ADV. SRI.L.MOHANAN FOR R1 SMT.LIGEY ANTONY FOR R1 THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 22/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMAN & P. BHAVADASAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - R.F.A. No. 51 of 2005 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 22nd day of July, 2009. JUDGMENT Bhavadasan, J, The second defendant in O.S. 31 of 2000 before the Sub Court, Attingal, who along with the first defendant suffered a decree for specific performance, is the appellant. The parties and facts are hereinafter referred to as they were available before the court below. 2. According to the plaintiff, he and the first defendant had entered into an agreement for sale evidenced by Ext.A1 document dated 31.1.2000. An advance amount of Rs.1001/- was paid to the first defendant. The sale deed was to be executed within three months. According to the plaintiff, soon after the agreement, after paying land tax, the first defendant handed over the tax receipt and the title deed to the plaintiff. The plaintiff pleads that with great effort he arranged the balance sale consideration and thereafter he approached the RFA.51/2005. 2 first defendant on 14.2.2000 seeking execution of the sale deed in his favour. The first defendant showed some diffidence. He therefore sent Ext.A4 notice dated 15.2.2000 to the first defendant. She received it on 18.2.2000. No reply was given by her. The plaintiff would assert that later on he came to know through one Raju that the property involved in the suit had already been transferred by the first defendant to the second defendant. On enquiry, he came to know that as per Ext.A7 sale deed, the first defendant had assigned the property to the second defendant, who was a close relative of the first defendant for a meager sum of Rs.5,000/-. The plaintiff alleged that that document was executed only to wriggle out of the contract with him and it is only a sham document. Asserting that he was and is ready and willing to perform his part of the contract, he laid the suit. 3. The suit was resisted by the defendants. The first defendant in her written statement denied the transaction. It was pointed out by her that without setting aside the sale deed in favour RFA.51/2005. 3 of the second defendant, the issue cannot be decided. According to this defendant, on 23.8.1999 the first defendant had entered into an agreement for sale with the second defendant for a total consideration of Rs.2,45,000/- and an amount of Rs.1,00,000/- was received as advance. First defendant wanted to purchase another property. Since she was in urgent need of money, she approached the plaintiff, who was a money lender. Plaintiff advanced Rs.25,000/- and got signed blank stamp papers from her. The entire amount due to the plaintiff was paid. However, the documents were not returned to her. According to her, misusing one of those signed blank stamp papers, the suit was laid. 4. The second defendant on his part contended that he was a bonafide purchaser of the property without notice of the agreement for sale in favour of the plaintiff. He entered into an agreement for sale with the first defendant for an extent of 2.80 Ares of property comprised in Sy.No.2167/22 and Sy. No.135/3 of Valakkadu Village for a total consideration of Rs.2,45,000/-. RFA.51/2005. 4 Rs.1,00,000/- was paid as advance. He was given a photostat copy of the title deed of the first defendant and the undertaking was that the original will be produced at the time of execution of the sale deed. It was thereafter that the title deed of the first defendant came into the possession of the second defendant. He too says about the amount borrowed by the first defendant. According to him, when the plaintiff came to know that he had purchased the property, in order to defeat him, a document was cooked up and suit was laid. According to him, the assignment in his favour is supported by consideration and it is not liable to be set aside on any ground. Pointing out that the plaintiff was not entitled to any decree, he prayed for dismissal of the suit. 5. For the purpose of the interlocutory application, the court below had Exts.A1 to A10 marked and P.Ws.1 to 4 examined on the side of the plaintiff, and Exts.B1 and B2 marked and D.Ws.1 and 2 examined on the side of the defendants. RFA.51/2005. 5 6. On a consideration of the evidence before it, the court below found in favour of the plaintiff and granted the decree. It is the said judgment and decree, that are assailed in this appeal. 7. The plaintiff relied on Ext.A1 document, which according to him was an agreement for sale executed by the first defendant in his favour, whereby she had undertaken to transfer the property to the plaintiff within three months. First defendant on the other hand would say that she had not entered into an agreement with the plaintiff, but she had received a sum of Rs.25,000/- as loan from him and that amount was given by the plaintiff only after getting some signed blank stamp papers from her. She also asserted that she had repaid the entire amount, but the documents were not returned by the plaintiff. She also pointed out that the property has already been assigned to the second defendant. Second defendant relied on an agreement for sale in his favour in the year 1999 and later the property was assigned to him as per Ext.A7 sale deed. He claimed absolute rights over the property. RFA.51/2005. 6 8. Even though learned counsel appearing for the appellant tried to establish that the sale in favour of the appellant was a bonafide one, he had to give up that plea in the light of the evidence available in the case. Then the learned counsel pointed out that even going by the document Ext.A1 relied on by the plaintiff in support of his case, it can be seen that the document was a subsequently written one on a blank signed paper obtained from the first defendant. Learned counsel pointed out that the court below was not justified in simply brushing aside this glaring defect and ought not to have come to the conclusion that the document is executed by the first defendant and is an agreement for sale. It is also pointed out that the evidence adduced by the plaintiff is not sufficient to hold that Ext.A1 was in fact executed by the first defendant. According to th learned counsel, there has been miscarriage of justice. Learned counsel went on to point out that even assuming that there was an agreement for sale in favour of the plaintiff, the court ought to have exercised its discretion RFA.51/2005. 7 under Section 20 of the Specific Relief Act and should have directed the return of the advance money only. There was no justification in directing the defendants to execute the sale deed in favour of the plaintiff. 9. Per contra, learned counsel appearing for the first respondent in the appeal would contend that the court below has considered all the aspects and based on the evidence has come to the conclusion that the transaction between the defendants is illegal and has been cooked up only for screening the property from the plaintiff. Attention of this court was drawn to Ext.A1 and pointed out that the husband as well as the brother of the first defendant were witnesses to the said document and under such circumstances it is idle for the defendants to say that Ext.A1 is a concocted deed. 10. At the outset, it may be noticed that it is difficult to accept the sale in favour of the second defendant by the first defendant for the simple reason that the amount of consideration shown in the document of assignment Ext.A7 is only Rs.5,000/-. RFA.51/2005. 8 The claim made by the first defendant was that on execution of the agreement for sale on 23.8.1999 she had received Rs.1,00,000/- as advance and the total consideration fixed was Rs.2,50,000/-. The second defendant had claimed that he was employed and was residing in Orissa and he had purchased the property to put up a house in his native place. For the above reasons, the court below found that the agreement relied on by the defendants was not a genuine one. So also it was found that the sale deed in favour of the second defendant could not be accepted for the very cogent reasons. The meager sale consideration shown in Ext.A7 (Ext.B2) shows that the transaction is suspicious. 11. It is in this context that the argument put forward by the learned counsel for the appellant will have to be considered. 12. The stand of the first defendant was that she had borrowed a sum of Rs.25,000/- from the plaintiff and with reference to the said transaction the plaintiff had obtained certain blank signed stamp papers from her and misusing the same that the RFA.51/2005. 9 suit was laid. 13. Ext.A1 is the relevant document. That is dated 31.1.2000. P.W.1, who is the plaintiff, would say that the first defendant had executed the agreement and received Rs.1001/- from him as advance. P.W.1 filed a proof affidavit. He would depose in terms of the plaint. He would depose that even though Ext.A7 was executed in favour of the second defendant, property remained with the first defendant herself and that Ext.A7 was only a sham document. According to him, soon after Ext.A1, he was able to pool sufficient funds for purchasing the property and had informed the first defendant to execute the sale deed. It was after receiving the notice from him that the document in favour of the second defendant was executed. P.W.2 is one of the witnesses to Ext.A1. P.W.2 is very closely related to P.W.1. He too speaks about the transaction. P.W.3 is the scribe of Ext.A1. He would claim that he had written the document. RFA.51/2005. 10 14. It would appear from the evidence furnished by the above witnesses that Ext.A1 was in fact executed by the first defendant. However on a closer scrutiny of Ext.A1, certain doubts arise. At the time of evidence the plaintiff has a case that the document was written in the house of the second defendant. There is no such plea in the plaint. Of course he has stated the manner in which he had raised funds for purchasing the property. In cross- examination, P.W.1 had stated that the first defendant had approached him offering to sell her property and on the very same day Ext.A1 was drawn up. As far as P.W.2 is concerned, according to him the document was written in the house of second defendant and at the relevant time he was not at home. P.W.3, the alleged scribe also says the same thing. But a reading of the statements given by P.W.3 in cross-examination causes serious doubt regarding his claim that he was a scribe by profession. He was not able to show any evidence regarding his right to conduct the profession of a scribe. It is also significant to notice that he RFA.51/2005. 11 was confronted with Ext.A1 document, which does not reveal his name as the scribe. There is nothing in Ext.A1 to show that he had written the document. 15. Now one may have a look at Ext.A1. It contains three pages. On all the three pages, the signature of the first defendant is seen. However, a perusal of page 3 of Ext.A1 would clearly show that the document was written after obtaining the signature of the first defendant. If as a matter of fact first defendant had affixed her signature after the document was drawn up, her signature would not have been as seen in Ext.A1. It is true that two of the witnesses are closely related to her. Ext.A1 shows that the property had not been measured at the time of executing Ext.A1 and the period for execution of the document was three months. A particular recital in Ext.A1 may have to be mentioned here. That reads as follows: RFA.51/2005. 12 The above recital means that if the extent is found to be less than what is mentioned in Ext.A1, there will be a reduction of proportionate sale consideration. But if it is found in excess, for the excess only half the sale consideration will be paid. It is difficult to accept that in normal course a vendor would have accepted such a term in an agreement for sale. 16. It must be noticed that Ext.A1 was dated 31.1.2000. The suit was laid on 13.3.2000. According to the plaintiff, on 14.2.2000 he had informed the first defendant that he had the requisite amount with him and she may perform her part of the contract. Thereafter he sent a notice to the first defendant. Then plaintiff says that he came to know that the property had already been assigned to the second defendant. Soon thereafter he came forward with the suit. 17. May be that once the plaintiff realised that the first defendant had committed a breach of contract, he may rescind the contract or treat it as subsisting. The principle is known as RFA.51/2005. 13 anticipatory breach. If as a matter of fact he too rescinds the contract, he can only sue for damages and for return of the advance amount. If on the other hand he wants to treat the contract as subsisting, he has to wait till the time stipulated for performing the contract deed and then sue for specific performance. Going by the terms in Ext.A1, the first defendant had time till 31.4.2000 to execute the deed. The suit was laid much earlier. Under such circumstances, it is doubtful whether specific performance could have been granted to the plaintiff. 18. Considering the above facts and circumstances, especially the recitals and the signature of the first defendant in Ext.A1, it cannot be said that the claim of the first defendant is without any basis. First defendant however admits that she had received Rs.25,000/- from the plaintiff as loan. Her case is that at that the plaintiff had got certain signed blank stamp papers from her. True, she says that she had returned the entire amount and the documents were not returned. She was unable to adduce any RFA.51/2005. 14 evidence to show that she had discharged the debt. The property was later assigned to the second defendant. It is the second defendant who has come up in appeal. 19. Even assuming that what the plaintiff says is true, it is to be seen whether the discretion under Section 20 of the Specific Relief Act needs to be exercised. 20. It is well settled that the discretion available under Section 20 of the Specific Performance Act should be exercised in a judicial manner. Merely because the price of the land might have gone up or there is some delay in going through the transaction or such other similar matters may not by themselves be grounds to deny specific performance to the plaintiff. But it is well settled that the court can evaluate the entire facts and circumstances of the case and come to the conclusion that by granting specific performance, an undue advantage will enure to the plaintiff and that the document was executed under dire circumstances. Those certainly are grounds to exercise discretion in favour of the defendants. One RFA.51/2005. 15 may recollect that even though the first defendant admits the signature in Ext.A1, she has pointed out that it was not executed as alleged by the plaintiff. The suspicious nature of Ext.A1 had already been referred to. The claim of the first defendant that the agrement was written on a blank paper in which her signature had been obtained cannot altogether be discarded. 21. As already noticed, the discretion cannot be exercised arbitrarily, but must be based on sound and reasonable grounds guided by judicial principles. However, the circumstances under which the contract was entered into and the conduct of the parties are relevant factors. On a total evaluation of the evidence in the case, it is felt that by granting specific performance to the plaintiff, he will derive undue advantage and will cause considerable hardship to the defendants. Under these circumstances, it is felt that the court below was not justified in granting decree for specific performance in favour of the plaintiff. 22. Going by Ext.A1 document, the advance paid by RFA.51/2005. 16 the plaintiff is only Rs.1001/-. However, it is admitted by the first defendant that she had borrowed a sum of Rs.25,000/- from the plaintiff. Even though she claims that she had repaid the same, there is no evidence to establish the said fact. As already noticed, the possibility of the plaintiff drawing up the document later after obtaining signed blank stamp papers from the first defendant cannot be rejected as totally baseless. 23. Considering all the facts, it is felt that the appellant may be directed to pay a sum of Rs.1,00,000/- to the first respondent in this appeal towards the return of the advance amount and damages suffered by him. In the result, this appeal is allowed, the judgment and decree of the court below are set side and a decree is passed directing the appellant to deposit a sum of Rs.1,00,000/- before the trial court within two months from the date of this judgment and the first respondent in this appeal will be allowed to withdraw the said amount. If the appellant fails to comply with the above RFA.51/2005. 17 direction, this appeal shall stand dismissed. P.R. Raman, Judge P. Bhavadasan, Judge sb. The operatiive portion of the judgment dated 22/07/2009 in paragraph 23 in R.F.A.51/2005 is deleted and substituted as follows: “In the result, the appeal is allowed, the judgment and decree of the court below are set aside and a decree is passed directing the appellant to pay the first respondent an amount of Rs.1,00,000/- (Rupees One lakh only). The said amount, if already deposited, is permitted to be withdrawn by the first respondent.” vide order dated 09/10/2009 in I.A.3609/2009 in R.F.A.51/2005. Sd/- Registrar (Judicial)