IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 22ND OCTOBER 2010 / 30TH ASWINA 1932 CRP.NO. 524 OF 2010() -------------------------------- OS.56/2006 OF SUB COURT, PAYYANNUR .................... REVN. PETITIONER(S): PETITIONERS/DEFENDANTS 2 TO 5: ------------------------------------------------------------------------------------- 1. KOLANGADA VEETTIL KUNHIRAMAN NAIR, S/O.ADUTHILA RAMAN NAIR, ERIPURAM CHENGAL DESOM, EZHOME AMSOM, P.O.PAZHAYANGADI. 2. PALANGADAN VAYALILE VEETTIL JANAKI AMMA D/O.KRISHNAN NAMBIAR, EZHOM AMSOM AND DESOM, P.O.ZHOME, KANNUR DISTRICT. 3. CHOORIKKAD HAMEED, S/O.MOHAMMED PUTHIYANGADI DESOM AND MADAI AMSOM P.O.MADAI, KANNUR DISTRICT. 4. PARAYIL KUNHIKANNAN, S/O.KUNHIKANNAN, ERIPURAM CHENGAL DESOM, EZHOME AMSOM, P.O.PAZHAYANGADI, KANNUR. BY ADV. SRI.KALEESWARAM RAJ RESPONDENT(S): PLAINTIFFS & DEFENDANTS 1 AND 6: ------------------------------------------------------------------------------- 1. PALLIVALAPPIL ABDUL SHUKOOR, S/O.MOHAMMED KUNHI, ERIPURAM CHENGAL DESOM, EZHOM AMSOM, P.O.PAYANGADI, KANNUR DISTRICT-670 303. 2. PALLIVALAPPIL SALAHUDEEN, S/O.ABDUL RAHIMAN, ERIPURAM CHENGAL DESOM, EZHOME AMSOM, P.O.PAZHZAYANGADI, KANNUR DISTRICT-670 303. 3. PANNERI KRISHNAN, S/O.CHIYYAYI KUTTI AMMA, MANAGING PARTNER MAHESWARI TEXTILE COMPLEX, RESIDING AT `PANJAVADI HOTEL', CHOTTIPPEEDIKA, PALLIKKUNNU, KANNUR-670 004. 4. M/S.MAHESWARI TEXTILES COMPLEX, REPRESENTED BY ITS MANAGING PARTNER PANNERI KRISHNAN, EZHOME AMSOM AND ERIPURAM CHENGAL DESOM, P.O.PAZHAYANGADI-670 303. ADV. SRI.ZUBAIR PULIKOOL THIS CIVIL REVISION PETITION HAVING BEEN FINALLY HEARD ON ON 22/10/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: THOMAS P.JOSEPH, J. ==================================== C.R.P. No.524 of 2010 ==================================== Dated this the 22nd day of October, 2010 O R D E R Respondent Nos.1 and 2 have obtained a decree for specific performance of an agreement for sale executed in their favour by petitioners and respondent Nos.3 and 4. Property belonged to respondent No.4, a partnership firm of which respondent No.3 is the Managing Partner and petitioners are partners. That agreement was executed on 11.04.2005 fixing a time limit of six months for execution of the sale deed. Since the sale deed was not executed respondent Nos.1 and 2 filed O.S. No.56 of 2006 in the court of learned Sub Judge, Payyannur. That suit was decreed on 16.07.2009 as per which respondent Nos.3 and 4 were directed to execute the sale deed in respect of the suit property in favour of respondent Nos.1 and 2 within three months after receiving the balance sale consideration of Rs.23,50,000/- and allowing respondent Nos.1 and 2, in case petitioners and respondent Nos.3 and 4 failed to execute the sale deed within the stipulated period to get the sale deed executed through court after depositing the balance sale consideration. Petitioners and respondent Nos.3 and 4 according to respondent Nos.1 and 2 did not comply with the direction to receive the balance sale consideration and execute the C.R.P. No.524 of 2010 -: 2 :- sale deed within the time stipulated. Period of three months prescribed in the decree expired on 15.10.2009. Petitioners filed I.A. No.6 of 2010 under Section 28 of the Specific Relief Act (for short, “the Act) to rescind the agreement dated 11.04.2005 contending that respondent Nos.1 and 2 have not deposited the balance sale consideration within the period of three months stipulated by the decree and taken steps to get the sale deed executed. That application was opposed by respondent Nos.1 and 2 contending that decree does not direct them to deposit the amount within three months and instead, the period of three months is granted to respondent Nos.3 and 4 to receive the balance sale consideration and execute the sale deed. Learned Sub Judge was impressed by that contention of respondent Nos.1 and 2 and dismissed I.A. No.6 of 2010. That order is under challenge in this petition. Learned counsel contends that though the operative portion of the judgment and decree has been couched in such a form as if there was no responsibility for respondent Nos.1 and 2 to pay/deposit the balance sale consideration within three months and get the sale deed executed and instead it is worded in such a manner as if the period of three months is granted to the petitioners and respondent Nos.3 and 4 C.R.P. No.524 of 2010 -: 3 :- to receive the balance sale consideration and get the sale executed, this Court must read the decree as directing respondent Nos.1 and 2 to deposit balance sale consideration in court within three months and since that admittedly has not been complied, agreement is liable to be rescinded. Learned counsel contends that the decree in a suit for specific performance is in the nature of a preliminary decree and on passing such a decree the court does not become functus officio as held by the Apex Court in Bhupnder Kumar v. Angrej Singh (2009) 8 SCC 766). According to the learned counsel equity required that the agreement for sale was rescinded for, amount involved is huge and petitioners and respondent Nos.3 and 4 suffered loss on account of inaction of respondent Nos.1 and 2. It is also contended that at least after petitioners filed I.A. No.6 of 2010 respondent Nos.1 and 2 were required to file an application for extension of time for deposit of the amount so that the agreement for sale could be kept alive as provided under Sec.28 of the Act. Reliance is placed on the decision of this Court in Ramesh v. John K.Joseph (1995 [1] KLT 801). In response it is contended by learned counsel for respondent Nos.1 and 2 that the decree has to be construed strictly as it is passed, C.R.P. No.524 of 2010 -: 4 :- the time limit (three months) specified is not for payment/deposit of the amount in court but for petitioners and respondent Nos.3 and 4 to receive the balance sale consideration and get the sale deed executed. It is also contended by learned counsel that in such a situation, rescission of the contract at the instance of the vendor is not warranted and reliance is placed on the decision on L. Venkata Krishna Reddy v. M.Anjappa (AIR 2009 AP 179) where the decree did not specify any time limit for payment of the balance sale consideration and there was proper explanation for the delay in deposit of the balance sale consideration (by the vendee). It was held that in such circumstances contract cannot be rescinded. It is also pointed out that even during the trial stage the entire balance sale consideration was deposited by respondent Nos.1 and 2 in the RMH Co-operative Society Limited (though in the account of respondent Nos.1 and 2), there was no inaction on the part of respondent Nos.1 and 2 and that they have filed I.A. No.65 of 2010 for execution of the sale deed on deposit of the entire balance sale consideration in the court below, that application was heard and allowed and respondent Nos.1 and 2 have been directed to produce necessary stamp paper for C.R.P. No.524 of 2010 -: 5 :- execution of the sale deed. In such a situation it is contended that rescission of he contract is not warranted. 2. Order XX Rule 12A of the Code of Civil Procedure (for short, “the Code”) provides the form of decree for specific performance of contract for the sale or lease of immovable property and states that where a decree for specific performance of a contract for the sale or lease of immovable property orders that the purchase money or other sum be paid by the purchaser or lessee, the decree shall specify the period within which the payment shall be made. The decree should have in tune with Rule 12A of Order XX of the Code specified the time within which respondent Nos.1 and 2 should have deposited the balance sale consideration in court. But the decree does not specify the period within which the deposit/payment was to be made by respondent Nos.1 and 2. 3. Now question for consideration is whether on the facts and circumstances equity demands that the contract is rescinded invoking power under Sec.28 of the Act. No doubt, that provision confers power on the court to either rescind the contract or extend time for deposit/payment of the balance sale consideration pursuant to the decree for execution of the sale deed. It is C.R.P. No.524 of 2010 -: 6 :- revealed from Ext.R1(a), judgment produced by respondent Nos.1 and 2 that even before the execution of the sale deed respondent Nos.1 and 2 were ready and willing to perform their part of the contract by paying the balance sale consideration. It is not disputed that at the time of execution of agreement for sale Rs.5,00,000/- was paid as advance sale consideration and received it by respondent No.3 on behalf of respondent No.4. It is also not disputed that pursuant to the agreement for sale a further sum of Rs.1,00,000/- was paid to respondent No.3 similarly on 22.07.2005. Respondent Nos.1 and 2 produced Ext.A2, letter dated 23.11.2005 in the course of trial to show that respondent No.3 on behalf of respondent No.4, partnership firm requested further time for execution of the sale deed till 31.12.2005 and it is when the sale deed was not executed within that time also that respondent Nos.1 and 2 were constrained to file the suit seeking a decree for execution of the sale deed. Respondent Nos.1 and 2 produced Ext.A3, notice issued to respondent Nos.3 and 4 asking them to intimate time and date on which they could come to the office of the Sub Registrar to execute the sale deed. But that also was not complied. Thus going by Ext.R1(a) it was a case where respondent Nos.1 and 2 C.R.P. No.524 of 2010 -: 7 :- were always ready and willing to perform their part of the contract but for some reason or the other, petitioners and respondent Nos.3 and 4 were not agreeable for that and that culminated in the passing of the judgment and decree. 4. Now turning to I.A. No.6 of 2010 I stated that the decree was passed on 16.07.2009 providing three months time to petitioners and respondent Nos.3 and 4 to receive the balance sale consideration and execute the sale deed. Though that decree is not strictly in conformity with Rule 12A of Order XX of the Code I must bear in mind that no obligation was cast on respondent Nos.1 and 2 (at least for the purpose of deciding I.A. No.6 of 2010) as per the decree to deposit the amount within the stipulated period of three months and the decree permitted respondent Nos.1 and 2 to get the sale deed executed on depositing/paying the balance sale consideration in case petitioners and respondent Nos.3 and 4 did not fulfill their obligations within the stipulated period of three months. Hence it cannot be said that respondent Nos.1 and 2 were at fault or there was laches or negligence on their part in complying with the decree so that on the equitable consideration this Court should allow I.A. No.6 of 2010. C.R.P. No.524 of 2010 -: 8 :- 5. Next question is whether at least after petitioners filed I.A. No.6 of 2010 respondent Nos.1 and 2 were required to file an application for extension of time. I stated about the nature of the decree that has been passed in favour of respondent Nos.1 and 2. Though in strict compliance of Sec.28 of the Act no application for extension of time was preferred by respondent Nos.1 and 2, they filed I.A. No.65 of 2010 on deposit of the entire balance sale consideration in court on 07.01.2010 to get the sale deed executed. On that application necessarily, petitioners and respondent Nos.3 and 4 had notice and it is after hearing them that court below ordered execution of the sale deed and directed respondent Nos.1 and 2 to produce stamp papers. I must presume that learned Sub Judge has permitted respondent Nos.1 and 2, notwithstanding the alleged failure as learned counsel for petitioners would put it, in depositing the balance sale consideration within a period of three months, to have the sale deed executed. That according to me is sufficient compliance with Sec.28 of the Act and if at all I am to presume respondent Nos.1 and 2 were required to file an application and get time for deposit of the amount extended. I therefore find no reason to interfere with the order of learned Sub Judge dismissing I.A. No.6 C.R.P. No.524 of 2010 -: 9 :- of 2010. 6. But question arises whether the delay even after the period of three months from the date of decree has resulted in any loss to the petitioners. Balance sale consideration payable, it is not disputed was Rs.23,50,000/-, not a small amount. Assuming that petitioners and respondent Nos. 3 and 4 did not receive the sale balance sale consideration within the period of three months of date of decree, respondent Nos.1 and 2 could have deposited the said amount in the court below on the expiry of the said period of three months, so that petitioners and respondent Nos.3 and 4 would not have suffered loss. Admittedly the amount has been deposited in the court below only on 07.01.2010. According to the learned counsel for respondent Nos.1 and 2, balance sale consideration was deposited in the RMH Co-operative Society but in the name of respondent Nos.1 and 2. In other words interest that accrued from 15.10.2009 to 07.01.2010 went to the advantage of respondent Nos.1 and 2 and not to the advantage of petitioners and respondent Nos.3 and 4. In such a situation equity demands that loss caused to petitioners and respondent Nos.3 and 4 by respondent Nos.1 and 2 not depositing the amount immediately C.R.P. No.524 of 2010 -: 10 :- on the expiry of three months from the date of decree is to be compensated. Hence they shall pay the interest that accrued on the balance sale consideration from 15.10.209 till 07.01.2010 to petitioners and respondent Nos.3 and 4. This Court while deciding Thomas E.P. v. K.C.Sivadasan & Others (20098 [3] KLJ 781) has laid the principle that in appropriate case the vendor could be compensated for the loss he has suffered. Counsel for respondent Nos.1 and 2 states that they have been awarded costs of the suit. Resultantly, the Revision is dismissed. But respondent Nos.1 and 2 are directed to pay the interest on the balance sale consideration that accrued in the deposit from 15.10.2009 till 07.01.2010 to petitioners and respondent Nos.3 and 4. The said amount shall be deposited in the trial court before the sale deed is executed. Interlocutory Application No.2495 of 2010 shall stand dismissed. THOMAS P. JOSEPH, JUDGE. vsv