THE HON’BLE SRI JUSTICE V.V.S.RAO SECOND APPEAL No.815 of 2011 November 04, 2011 Between: Pemmada Prabhakar, S/o.late Venkateswara Rao And others ... Appellants And The Youngmen’s Vysya Association (Regd.), represented by its President, Kakinada, East Godavari District And others ...Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO SECOND APPEAL No.815 of 2011 JUDGMENT: This second appeal by the defendants 1 to 6 is against reversing the judgment and decree dated 28.4.2010 in A.S.No.269 of 2006 of the III Additional District Judge, Kakinada whereby and whereunder the judgment and decree dated 12.7.2006 in O.S.No.267 of 1995 passed by the II Additional Senior Civil Judge, Kakinada was modified granting decree for specific performance of agreement of sale against appellants 1, 2, 4 and 5 (defendants 1, 2, 4 and 5). The parties herein are referred to as they are arrayed in the suit. The property bearing door No.20-42-1-9 with land admeasuring about 657-1/3rd situated to the west of Vallabhai Street, Cinema Road, Kakinada (hereafter, the suit schedule property) was self-acquired property of Pemmada Venkateswara Rao. He is survived by wife Syama Sundari, three sons and three daughters. The Youngmen’s Vysya Association (YVA) instituted O.S.No.267 of 1995 for specific performance of agreement of sale dated 03.5.1993 against the defendants. The plaintiffs alleged that defendants 1 and 2, who were managing the suit schedule property, agreed to sell the same to the plaintiffs. They represented that their sisters were married long ago and had no interest in the suit schedule property; and that they would also get the sisters’ signatures on the agreement. Accordingly, the defendants 1 and 2 executed the agreement of sale dated 03.5.1993 agreeing to sell the property at Rs.575/- per Sq.yard and received advance amount of Rs.5,000/-. They agreed to execute the sale deed after evicting tenants-defendants 7 and 8. Subsequently, the defendants 4 and 5 had endorsed on suit agreement. They also alleged that the third defendant also agreed to join the sale deed. The defendants avoided to execute the sale deed. Therefore, after issuing registered notice dated 30.7.1993 the suit was instituted taking necessary pleadings as required under law. While seeking a decree for specific performance, alternatively the plaintiffs prayed to direct division of suit schedule property into six shares and to allot four shares of defendants 1, 2, 4 and 5 to the plaintiffs by fixing proportionate sale consideration. Initially the defendants 1 to 3, 5 and 8 remained ex parte. The suit was decreed ex parte. The execution petition was filed by the plaintiffs by depositing balance sale consideration. The defendants 1 and 2, after receiving notice in the execution petition, filed I.A.No.1017 of 2002 to set aside the ex parte decree alleging that they were residing in Donkarai since 1985. They further alleged that the property was devolved on all of them have to be divided into seven shares. Be that as it is, after ex parte decree was set aside the defendants 1 and 2 filed common written statement. In their written statement the defendants 1 and 2 contended that their mother was alive; the suit schedule property was devolved on defendants 1 to 6 and their mother; and the plaintiffs obtained signatures of defendants 1, 2, 4 and 5 on the suit agreement though they never agreed to sell the suit schedule property nor they have intended to do so; the plaintiffs created/fabricated the suit agreement and that the consideration is unconscionable. They alleged that their father Venkateswara Rao was engaged in lathe works and incurred heavy loss. He was indebted to various creditors who filed the suits and obtained decrees. Due to acquaintance the defendants 1 and 2 approached Murali Krishna who was Secretary of YVA to borrow some money. In that connection taking advantage of the situation, the Secretary and President obtained the signatures of the defendants and gave Rs.5,000/- and Rs.10,000/-. The defendants never intended to sell the suit schedule property and the transaction is only money transaction and is not a sale transaction. A separate written statement was filed by the fourth defendant to the same effect. The trial Court framed as many as ten issues including four additional issues. The plaintiffs examined their president and secretary as P.Ws.1 and 2. The attestor of suit agreement was examined as P.W.3, and their administrative secretary, former secretary and their chartered accountant were examined as P.Ws.4 to 6. The agreement executed by defendants 1 and 2 and endorsement made by defendants 4 and 5 were marked as Exs.A1, A2 and A3 respectively. Exs.A4 to A17 were also marked. The first defendant was lone witness for the defendants and Exs.B1 to B8 were marked. On considering the oral and documentary evidence, the trial Court observed that as the suit schedule property is adjacent to plaintiffs’ property, taking advantage of the financial difficulties of defendants 1 and 2, plaintiffs attempted to grab the property and dragged the defendants to Court of law and that Ex.A1 agreement of sale is not valid as the defendants 3 and 6 as well as their mother did not give consent to sell the property. Accordingly, it was held that the plaintiffs are not entitled for the relief of specific performance and that the plaintiffs are entitled for refund of advance sale consideration with interest at 12% per annum. Accordingly while rejecting main relief of specific performance, the trial Court directed the defendants to pay Rs.5,000/- with interest at 12% per annum from 05.3.1993, and Rs.10,00,000/- with interest at 12% per annum from 06.8.1993, till the date of realization. In the plaintiffs’ appeal, the first appellate Court framed the following points for consideration. (1) Whether the transaction covered by Exs.A1 to A3 is a real sale transaction as contended by the plaintiffs/appellants or a mere money transaction as contended by the defendants/respondents? (2) Whether the suit agreement of sale is true, valid and binding on the defendants? (3) Whether the plaintiffs/ appellants are entitled for the main relief of specific performance? (4) Whether the suit schedule property is liable for partition into six equal shares among defendants 1 to 6 and whether the plaintiffs are entitled for four such shares representing the shares of defendants 1, 2, 4 and 5, in case the plaintiffs are entitled for the relief of specific performance in respect of their shares? and (5) Whether the impugned decree and judgment of the trial Court are liable to be set aside? On points 1 and 2, the first appellate Court held that Exs.A1 to A3 are real sale transactions and not mere money transactions and the suit agreement is valid and binding. On points 3 and 4, it was held that the plaintiffs are entitled for the first alternative relief of specific performance directing defendants 1, 2, 4 and 5 to execute sale deed in respect of their four shares after receiving proportionate sale price. The judgment of trial Court was modified accordingly. The Counsel for the appellants/defendants 1 to 6 submits that even by the date of execution of Exs.A1, A2 and A3, the mother was very much alive and, therefore, in the absence of execution of agreement of sale by all the seven sharers of the suit schedule property, the plaintiffs cannot maintain the suit for specific performance. Secondly he would urge that even though under Section 12 of the Specific Relief Act, 1963 the Court can direct specific performance of that part of the contract which can be performed, in this case the plaintiffs came to the Court pleading falsehood and, therefore, discretion cannot be exercised in their favour. In this regard he points out that the plaintiffs pleaded that mother Syama Sundari predeceased the father of defendants 1 to 6; they have authority to execute the agreement of sale on behalf of defendants 3 to 6 which is false. Therefore, the learned Counsel would submit that the appellate Court failed to exercise proper discretion in granting relief of specific performance under Section 20 of the Specific Relief Act. The Counsel placed reliance on Kommisetti Venkatasubbayya v Karamsetti Venkateswarlu[1] and Lourdu Mari David v Louis Chinnaya Arogiaswamy[2]. The Counsel for the respondents/defendants (caveators) submits that defendants 1, 2, 4 and 5 admitted the execution of agreement of sale in their favour; during the pendency of the suit the mother died and the property devolved on defendants 1 to 6 and therefore even if the mother was alive, the suit could not be dismissed for non-joinder of parties under Order I Rule 9 of the Code of Civil Procedure, 1908 (CPC). He further submits that taking the totality of circumstances the first appellate Court directed defendants 1, 2, 4 and 5 to execute sale deed in respect of their shares in the suit schedule property and the same cannot be faulted. There is no dispute that Section 12 of the Specific Relief Act empowers the Court to order specific performance of part of the contract. There is also no dispute that the mother of the defendants has also a share in the suit schedule property. But by the time the suit was disposed, she died on 24.9.2005. Giving due importance to this subsequent event the first appellate Court took into consideration the first alternative relief prayed by the plaintiffs for partition of the suit schedule property into six shares and allotment of four shares of defendants 1, 2, 4 and 5 to them, decreed the part performance of the contract to the extent of shares of defendants. In view of this, the defendants 3 and 6 cannot have any grievance. Except the first defendant none of the defendants had come forward to give evidence opposing the suit. Further as noticed supra it is only the defendants 1 and 2, and the fourth defendant who filed written statements. This has a bearing on the case. The approach of the first appellate Court in granting first alternative relief of specific performance directing the defendants 1, 2, 4 and 5 to execute registered sale deed in respect of their 1/6th share each i.e., 4/6th share of the suit schedule property on receipt of respective balance consideration which stood deposited in the Court, cannot be faulted. The Counsel for the defendants, however, submits that exercise of discretion in favour of the plaintiffs is not warranted having regard to the falsity pleaded before the Court. He, however, does not dispute that for non- joinder of the mother who had a share in the suit schedule property the suit could not have been dismissed in view of the Order I Rule 9 of CPC. Be that as it is, it is well settled that the Civil Court as an adjudicatory forum of law, justice and equity is not precluded from giving effect to events that change the background facts of the case. Order XLI Rule 33 of CPC postulates that so as to do complete justice between the parties, the appellate Court has power to make an order which ought to have passed in the suit, and while doing so subsequent events as to facts and law can always be the basis (M.Laxmi and Co., v A.R.Deshpande[3] and Pasupuleti Venkateswarlu v Motor and General Traders[4]). The impact of subsequent happenings was spelt out in Rameshwar v Jot Ram[5] as follows. First, its bearing on the right of action, second, on the nature of the relief and third, on its impotence to create or destroy substantive rights. Where the nature of the relief, as originally sought, has become obsolete or unserviceable or a new form of relief will be more efficacious on account of developments subsequent to the suit or even during the appellate stage, it is but fair that the relief is moulded, varied or reshaped in the light of updated facts. Patterson v State of Alabama, (1934) 294 US 100, illustrates this position. It is important that the party claiming the relief or change of relief must have the same right from which either the first or the modified remedy may flow. Subsequent events in the course of the case cannot be constitutive of substantive rights enforceable in that very litigation except in a narrow category (later spelt out) but may influence the equitable jurisdiction to mould reliefs. Conversely, where rights have already vested in a party, they cannot be nullified or negated by subsequent events save where there is a change in the law and it is made applicable at any stage. Lachmeshwar Prasad Shukul v Keshwar Lal Chaudhuri, AIR 1941 FC 5, falls in this category. Courts of justice may, when the compelling equities of a case oblige them, shape reliefs — cannot deny rights — to make them justly relevant in the updated circumstances. Where the relief is discretionary, courts may exercise this jurisdiction to avoid injustice. Likewise, where the right to the remedy depends, under the statute itself, on the presence or absence of certain basic facts at the time the relief is to be ultimately granted, the Court, even in appeal, can take note of such supervening facts with fundamental impact. (emphasis supplied) The mother of the defendants was alive when the suit was filed in 1995 and she died on 24.9.2005. As she was having one share and after her death, the property of late Venkateswara Rao will be divided into six shares and as the agreement was held to be binding on defendants 1, 2, 4 and 5 in view of the proof of Exs.A1, A2 and A3, the first appellate Court rightly considered this aspect and moulded the relief while granting specific performance of part of the contract. Whether the trial Court exercised jurisdiction properly? There cannot be any doubt that Section 20 of the Specific Relief Act mandates that the Court has to exercise discretion in a manner which is not arbitrary but sound and reasonable guarded by judicial principles, and capable of correction by a Court of appeal. In this case, the plaintiffs allegedly pleaded falsehood by stating that mother of the defendants predeceased their father and that defendants 1 and 2 made the plaintiffs to believe that they had authority on behalf of other sharers to execute agreement. This itself would not disentitle the plaintiffs to the discretion of the Court to order specific performance of agreement of sale. The subsequent event of death of the mother and the defendants 4 and 5 joining Ex.A1 agreement and endorsing thereon (marked as Exs.A2 and A3) would sway discretion in favour of the plaintiffs, which is an association engaged in the welfare of a community. The property was not purchased for unlawful gain of individuals. As pleaded by them the property is situated adjacent to the other property owned by the plaintiffs. The plaintiffs probably purchased the suit schedule property to put it to use for the purpose of the community. Thus the competing right to be adjudicated is between the individuals and an association. When the first appellate Court leaned in favour of the association, this Court is of considered opinion that it is not proper for the second appellate Court to take a different view and find fault with the decision made by the first appellate Court. The two decisions relied on by the Counsel do not help the defendants. The first appellate Court considered the entire evidence on record and exercised sound discretion in modifying the judgment of the trial Court. The second appeal is misconceived and is accordingly dismissed without any order as to costs. _______________ (V.V.S.RAO, J) November , 2011 YS [1] AIR 1971 AP 279 [2] AIR 1996 SC 2814 [3] AIR 1973 SC 171 [4] (1975) 1 SCC 770 : AIR 1975 SC 1409 [5] AIR 1976 SC 49