IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN WEDNESDAY, THE 22ND JUNE 2011 / 1ST ASHADHA 1933 SA.No. 633 of 1995() ------------------------------- AS.7/1989 of PRINCIPAL SUB COURT, PALAKKAD OS.218/1992 of MUNSIFF COURT, CHITTUR .................... APPELLANT(S): RESPONDENTS 2 TO 11/ SUPPL. PLAINTIFFS 3 TO 12. ---------------------------------------------------------------------------------------------------- 1. SHAREEFA, W/O. LATE M.P.HANEEFA, RESIDING AT ATTAYAMPATHY, MUTHALAMADA AMSOM,CHITTUR TALUK. 2. N.H.KAMAL, SON OF M.P.HANEEFA, RESIDING AT DO. DO. (DIED). 3. SALIHA RESIDING AT S.S.KOIL STREET, COIMBATORE, TAMIL NADU. 4. N.H. JAINULADHEEN, RESIDING AT NANDANKIZHAYI, MUTHALAMADA AMSOM, CHITTUR TALUK. 5. N.H.ABDUL KAREEM, DO. DO. 6. N.H.MOHAMMED MOOSA , DO. DO. 7. N.H.SHEFUDHEEN, DO. DO. 8. N.H.ABDUL RAHIMAN, DO. DO. 9. N.H.BADERUNNISA, RESIDING AT THIRUCHIRAPALLY, TAMIL NADU. 10. NOORJAHAN RESIDING AT ATTAYAMPATHY, MUTHALAMADA AMSOM, CHITTUR TALUK. ADDL. APPELLANTS 11 TO 19 IMPLEADED. 11. KAYARNEESA, W/O. LATE N.H. KAMAL, AGED 57, VAVVAKODE, VELAYODI P.O.- 678 103. tss S.A. NO.633/1995 12. MUMTHAJ, W/O. BASHEER, 9/168(1). BALKHEES MANZIL, PARAKANNAM, PALAKKAD. 13. K.SIRASNEESA, W/O.T.M.SALEEM, DOOR NO.12A, KARUMBUKADAI, PALLI STREET, COVAI 08. 14. SAMSATHNEESA K., W/O. MOHAMAD RAFI, SAHARBAN MANZIL, M.G.R. NAGAR, CHALLAPATHA, KOZHINJAMPARA P.O.,678 555. 15. SOWTHAMMA K., W/O.KAMAL.F., KATTAYAN HOUSE, KATTAYAN STREET, PUDUNAGARAM. 16. MUSTHAFA K., S/O. LATE KAMAL N.H., VAVVAKODE, VELAYODI P.O., 678 103. 17. RUBEENA K., W/O.NAZEERDEEN, KUMARANUR, VANAMADAI P.O. 18. SABIRALI K., S/O. LATE KAMAL N.H. VAVVAKODE, VELAYODI P.O.- 678 103. 19. PAKKIRMUHAMAD,K., S/O. LATE KAMAL N.H., VAVVAKODE, VELAYODI P.O., 678 103. ADDL. APPELLANTS 11 TO 19 ARE IMPLEADED AS THE LEGAL HEIRS OF DECEASED APPELLANT NO.2 AS PER THE ORDER DTD. 29.5.2008 IN IA. 1080/2008. BY ADVS. SRI.P.R.VENKETESH SRI.P.R.RAJA RESPONDENT(S): APPELLANT & SUPPL. RESPONDENTS 13 TO 18/DEFENDANTS -------------------------- AND LEGAL REPRESENTATIVES OF ORIGINAL I PLAINTIFF AS ALSO LEGAL REPRESENTATIVES OF 12TH RESPONDENT IN THE APPEAL. 1. ABDUL HAMEED, S/O., SIKKANDER RAWTHER, RESIDING AT ATTAYAMPATHY, MUTHALAMADA AMSOM, CHITTUR TALUK. 2. MARIAMMA, 31/990 B.O.C., ROAD, PALAKKAD TOWN, PALAKKAD. 3. MOHAMMED BASHEER, PALLI STREET, KOZHINJAMPARA , PALAKKAD. tss S.A. NO.633/1995 4. MOHAMMED RAFI, DO. DO. 5. SIRAYUDHIN, DO. DO. 6. NAZAR DO. DO. 7. MUSTHA BHANU, KASIPALLI, PATTANCHERRY P.O. CHITTUR TALUK. R1 BY ADV. SMT.K.R.DEEPA R1 BY SRI.P.N.K.ACHAN (SENIOR ADVOCATE) THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 22/06/2011 , ALONG WITH SA NO. 471 OF 1996 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - S.A. Nos. 633 of 1995 & 471 of 1996 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 22nd day of June, 2011. JUDGMENT Two suits, namely, O.S. 218 of 1982, which was a suit for redemption, and O.S.16 of 1984, which was a suit for specific performance was tried and disposed of by a common judgment dated 30.6.1988. The suit for redemption was decreed and the suit for specific performance was dismissed. The plaintiff in the suit for specific performance, who is the defendant in the other suit carried the matter in appeal as A.S. Nos.7 of 1989 and 8 of 1989 before the Sub Court, Palakkad. The lower appellate court allowed both the appeals and the plaintiffs in O.S.218 had suffered decrees in both the suits. Hence they have come up in appeal. 2. S.A. 471 of 1996 is directed against the judgment and decree in A.S. 8 of 1989 and S.A.633 of S.A. 633/1995 & 471/1996. . 2 1995 is directed against the judgment and decree in A.S.7 of 1989. 3. The facts absolutely necessary for the disposal of these appeals are as follows: One Salmabeevi Umma, the first plaintiff in O.S.218 of 1982, had mortgaged the property to the defendant as per Ext.A1 dated 23.8.1979. The terms of the mortgage are mentioned in the plaint and it is unnecessary to reproduce them. The mortgagee was put in possession of the property and since the period of redemption had expired, the plaintiffs wanted to redeem the mortgage. To the notice sent by the plaintiffs, a reply was received, wherein the defendant had pointed out that there was an agreement for sale in his favour and a sum of Rs.250/- was paid in advance. According to the plaintiffs, there was no such agreement and it is a concocted document. On the basis of these allegations the suit for redemption was filed. S.A. 633/1995 & 471/1996. . 3 4. In the written statement, the defendant admitted the mortgage. He contended that by virtue of Ext.B8 dated 20.4.1981 the plaintiffs had agreed to assign the property to the defendant for a consideration of Rs.8,500/-. Thereafter the defendant was in possession of the property in pursuance to the agreement for sale. Concealing these facts, the plaintiffs had come forward with a suit for redemption. He also contended that he had spend considerable amount for repairs of the building in the property. In case it is found that the property is liable to be redeemed, he claimed for the value of repairs effected by him. On the basis of these contentions, he prayed for a dismissal of the suit. 5. The defendant in O.S.218 of 1982 in turn laid O.S.16 of 1984 seeking specific performance of the agreement Ext.B8 dated 20.4.1981. The defendants in the said suit, who are the plaintiffs in the earlier suit, resisted the suit by pointing out that they had never executed an S.A. 633/1995 & 471/1996. . 4 agreement for sale and Ext.B8 was a concocted document and the possession of plaintiff continues to be that of the mortgagee and the mortgagee is liable to be redeemed. 6. On the above pleadings issues were raised by the trial court. The evidence consists of the testimony of P.W.1 and documents marked as Exts.A1 to A4 from the side of the plaintiffs. Defendant examined D.Ws.1 to 5 and Exts.B1 to B8 marked. The trial court on an evaluation of the evidence found that the agreement for sale has not been proved and the possession of the defendant in O.S.218 of 982 was that of a mortgagee. Finding that the property is liable to be redeemed O.S.218 of 1982 was decreed and O.S.16 of 1984 was dismissed. As already stated, the aggrieved defendant in O.S.218 of 1982, who is the plaintiff in O.S.16 of 1984 preferred two appeals before the Sub Court, Palakkad, which have already been made mention of. The lower appellate court found Ext.B8 to be a genuine document and went on to decree the suit as prayed for as S.A. 633/1995 & 471/1996. . 5 far as the suit for specific performance is concerned. The other suit was dismissed. 7. Notice is seen issued on the following questions of law: “(a) Where the owner of the property categorically denies the execution of an agreement for sale of the said property set up by the defendant is it not incumbent on the part of the prospective purchaser to prove with best evidence the genuineness and execution of the document. (b) Can the suit for specific performance be decreed without the court considering the existence of the conditions specified in Section 16(c) of the Specific Relief Act as also conditions mentioned in Section 20 thereof merely on the strength of the finding that there is an agreement for sale. (c) Where there is a bona fide assignment of the property in question by the original prospective vendor in favour of a stranger is not the court bound to consider the question as to whether the assignment is taken by the present S.A. 633/1995 & 471/1996. . 6 owner as a transferee for value without notice of the agreement for sale, in a suit for specific performance of an agreement for sale in terms of Section 19 of the Specific Relief Act. (d) Is not the court considering a suit for specific performance bound to consider the equitable considerations mentioned in Section 20 of the Specific Relief Act even if existence of an agreement of sale is found thereafter in circumstances where there is a bona fide transfer of the property to another person even before the institution of the suit for specific performance. 8. Learned counsel appearing for the appellants pointed out that the lower appellate court was not justified in reversing the decrees of the trial court. The trial court had considered the evidence in detail and had come to the conclusion that Ext.B8 was not proved. There was no justification for taking a different view. Further, it was contended that even assuming that Ext.B8 is found to be a genuine document, the lower appellate court has not even S.A. 633/1995 & 471/1996. . 7 considered whether the discretionary power under Section 20 of the Specific Relief Act should be exercised to grant specific performance of a contract. This, according to learned counsel, is a clear legal infirmity, which makes the decree liable to be set aside. 9. Per contra, learned counsel appearing for the respondents pointed out that though not in so many words Section 20 of the Act is referred to, a discussion of the evidence will show that the court was satisfied that the specific performance of the contract should be satisfied. It was also contended that the entire evidence has been properly considered by the lower appellate court and the lower appellate court had come to the conclusion that Ext.B8 is a valid document. There are no grounds made out to interfere with the judgment and decree. 10. As far as the merits of the case is concerned, that is the genuineness of Ext.B8, there is little to be said in favour of the appellants. The trial court was persuaded to S.A. 633/1995 & 471/1996. . 8 take the view that Ext.B8 is not proved on the ground that even though the thumb impression found on Ext.B8 was denied by the executant, no attempt was taken by the plaintiff in O.S.16 of 1984 to obtain expert's opinion. It has also found fault with the plaintiff in O.S.16 of 1984 for not taking the help of a document writer. 11. On the other hand, the lower appellate court has considered the evidence of P.Ws. 1 to 3 and found them to be acceptable. The ground that weighed with the trial court that the property is a small house in 10 cents and the sale consideration was shown only as Rs.8,500/- did not impress the lower appellate court. The lower appellate court found that P.Ws. 2 and 3 are respectable witnesses who had no motive to dispose for the plaintiff in O.S.16 of 1984 and there was no justification for discarding their evidence. It was also noticed by the lower appellate court that Kandaswamy Kounder, who was a witness to Ext.A1 S.A. 633/1995 & 471/1996. . 9 mortgage was also a witness to Ext.B8 document and found that Ext.B8 is a genuine document. 12. The finding regarding Ext.B8 is based on appreciation of the evidence in the case and is purely a question of fact. No interference is called for with the said finding. 13. What remains to be considered is the application of Section 20 of the Act in the case on hand. Unfortunately the lower appellate court has not even adverted to this provision at all. Section 20 reads as follows: “20. Discretion as to decreeing specific performance.- (1) 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; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance:- S.A. 633/1995 & 471/1996. . 10 (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non- performance would involve no such hardship on the plaintiff; or (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. Explanation 1.- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2.- The question whether the performance of a contract would involve hardship S.A. 633/1995 & 471/1996. . 11 on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party.” 14. A reading of the provision will leave one in no doubt that it is not mandatory to grant specific performance. A wide discretion is vested with the court to decide as to whether specific performance should be granted or not. However that discretion is to be exercised on sound judicial principle. Sub-section (2) of Section 20 mentions some of S.A. 633/1995 & 471/1996. . 12 the circumstances where the court may decline to grant specific performance. Some of the grounds that are recognized are (i) unfair advantage to one party, though not voidable, (ii) the proposed vendor is of feeble mind, (iii) contract is inequitable, (iv) injury to third party, and (v) conduct of parties. It is by now well settled that in a suit for specific performance the application of Section 20 has to be considered. Even in cases where the executant denies execution of the agreement for sale and it is found otherwise, the court has to consider whether it is proper to grant specific performance of the contract. 15. In the decision reported in Sathy v. Sayed Mohammed (1998(1) K.L.T. 141) it was held as follows: “Section 20(1) provides that 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, but the discretion of the court is not to be exercised arbitrarily. Even though the latter part of S.20 enumerates certain principles, which the Court S.A. 633/1995 & 471/1996. . 13 should take into consideration in exercising discretion, the same is not exhaustive. One principle that may always guide the Court while exercising its discretion is that it shall not act in an inequitable manner. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest in the contract while exercising its jurisdiction. Granting decree for specific performance of a contract of immovable property is not automatic. It is one of the discretion to be exercised on sound principles. When the court gets into equity jurisdiction, it would be guided by justice, equity, good conscience and fairness to both the parties. Therefore, when the court exercises its discretionary jurisdiction, the court has to exercise the same on sound judicial principles and not arbitrarily.” 16. In the decision reported in P.V.Joseph's Son Mathew v. N. Kuruvila's Son (AIR 1987 SC 2328) it was held as follows: S.A. 633/1995 & 471/1996. . 14 “S.20 preserves judicial discretion to courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff.” 17. In the decision reported in Aliyas v. Aboobacker (2006(4) K.L.T. 282) it was held as follows: “It cannot be said as a universal rule, that the defendant would be precluded from contending that discretion should be exercised not to decree specific performance or in other words discretion should not be exercised to decree specific performance, only because his defence is either unsustainable or not proved or false or because the court found it to be so. The court has to consider all the facts and circumstances of the case in order to exercise the discretion to decree S.A. 633/1995 & 471/1996. . 15 or not to decree specific performance and in that process could take into account equitable consideration as well.” 18. In the decision reported in Malapali Munaswamy Naidu v. P.Sumathi ((2004) 13 SCC 364) the Apex Court found that the High Court concerned had not considered the application of Section 20 of the Specific Relief Act to the facts of the case and therefore set aside the judgment of the High Court and remanded the matter to the High Court for fresh consideration. 19. In the decision reported in Bal Krishna v. Bhagwan Das ((2008) 12 SCCC 145) it was held as follows: “It is also settled by various decisions of this court that by virtue of Section 20 of the Act, the relief for specific performance lies in the discretion of the court and the court is not bound to grant such relief merely because it is lawful to do so. The exercise of the discretion to order specific performance would require the court to satisfy itself that the circumstances are such that it is S.A. 633/1995 & 471/1996. . 16 equitable to grant decree for specific performance of the contract. While exercising the discretion, the court would take into consideration the circumstances of the case, the conduct of parties, and their respective interests under the contract. No specific performance of a contract, though it is not vitiated by fraud or misrepresentation, can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee. In other words, the court's discretion to grant specific performance is not exercised if the contract is not equal and fair, although the contract is not void.” 20. In the decision reported in Laxman Tatyaba Kankate v. Taramati Harishchandra Dhatrak ((2010) 7 SCC 717) it was held as follows: “It will also be useful to refer to the provisions of Section 20 of the Act which vests the court with a wide discretion either to decree the suit for specific performance or to decline the same. Reference in this regard can also be made S.A. 633/1995 & 471/1996. . 17 to Balkrishna v. Bhagwad Das, where this court held as under: “..... The compliance with the requirement of Section 16(c) is mandatory and in the absence of proof of the same that the plaintiff has been ready and willing to perform his part of the contract shit cannot succeed. the first requirement is that he must aver in plaint and thereafter prove those averments made in the plaint. The plaintiff's readiness and willingness must be in accordance with the terms of the agreement. The readiness and willingness of the plaintiff to perform the essential part of the contract would be required to be demonstrated by him from the institution of the suit till it is culminated into decree of the court.” “It is also settled by various decisions of this court that by virtue of Section 20 of the Act, the relief for specific performance lies in the discretion of the court and the court is not bound to grant such relief merely because it is lawful to do so. The exercise of the discretion to order specific performance would require the court to satisfy itself that the circumstances are such that it is S.A. 633/1995 & 471/1996. . 18 equitable to grant decree for specific performance of the contract. While exercising the discretion, the court would take into consideration the circumstances of the case, the conduct of parties, and their respective interests under the contract. No specific performance of a contract, though it is not vitiated by fraud or misrepresentation, can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee. In other words, the court's discretion to grant specific performance is not exercised if the contract is not equal and fair, although the contract is not void.” Similar view was taken by this court in Mohammadia Coop. Building Society Ltd. v. Lakshmi Srinivasa Coop. Building Society Ltd. where the court reiterated the principle that jurisdiction of the court to grant specific performance is discretionary and the role of the plaintiff is one of the most important factor to be taken into consideration. We may also notice that in Parakunnan Veetill Joseph's son Mathew v. Nedumbara S.A. 633/1995 & 471/1996. . 19 Kuruvila's son, this court further cautioned that while exercising discretionary jurisdiction in terms of Section 20 of the Act, the court should meticulously consider all facts and circumstances of the case. The court is expected to take care to see that the process of the court is not used as an instrument of oppression giving an unfair advantage to the plaintiff as opposed to the defendant in the suit.” 21. It is thus clear from the various decisions cited by the learned counsel for the appellants that a decree for specific performance of the contract is not automatic and the court has to consider the circumstances under which the agreement came into existence and various other factors which have a bearing on the issue. As already noticed, the decree for specific performance is purely a discretionary remedy and one who seek equity must do equity. 22. In the decision reported in Aliyas's case (supra) it has been observed that merely because the S.A. 633/1995 & 471/1996. . 20 vendor denies execution of the document and found otherwise, Section 20 does not become inapplicable. 23. In the decision reported in Laxman Tatyaba Kankate's case (supra) also the facts indicate that the vendor had denied the execution of the agreement. 24. Merely because it may be lawful to grant specific performance, the court is not bound to do so. It has to evaluate the circumstances and has to exercise its discretion in a judicial manner. The discretion shall not be exercised arbitrarily or in an unreasonable manner. Unfair advantage, passage of time and conduct of parties and various other circumstances have been recognized as grounds which may be taken as reasons to decline specific performance of the contract. At any rate, it is incumbent on the part of the lower appellate court to consider this aspect. Since that has not been done, the only option available is to remit the matter back to the lower appellate court for fresh consideration. S.A. 633/1995 & 471/1996. . 21 In the result, these appeals are allowed, the impugned judgment and decree are set aside and the matters are remanded to the lower appellate court for consideration of the the reliefs to be granted under Section 20 of the Specific Relief Act. It is made clear that the remand is only for the purpose of application of Section 20 of Specific Relief Act and in respect of all other matters