IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 2ND APRIL 2008 / 13TH CHAITHRA 1930 RFA.No. 281 OF 2003() --------------------- OS.617/1996 OF PRINCIPAL SUB COURT, PALAKKAD APPELLANT/DEFENDANT. ------------------------------------- JAMEELA BEEVI, W/O.KARIM RAWTHER, RESIDING AT KIZHAKKUMPURAM, KOPPAM AMSOM, KEEZHUMURI DESOM PALAKKAD TALUK. BY ADV. SRI.V.CHITAMBARESH SRI.T.C.SURESH MENON SMT.M.R.VALSA SRI.SREEKANTH.K.R SMT.G.GEETHISHA RESPONDENTS: PLAINTIFF. --------------------------------------- S.PRAKASHAN, S/O.SANKUNNI MANNADIAR, RESIDING AT MOTHANTHARA, KEEZHUMURI DESOM, KOPPAM AMSOM, PALAKKAD TALUK. BY ADV. SRI.D.KRISHNA PRASAD SRI.D.NARENDRANATH SRI.M.HARISHARMA SRI.T.P.ELDHOSE THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 26.2.2008, THE COURT ON 2.4.2008, DELIVERED THE FOLLOWING: R.F.A. 281/2003 ORDER IN I.A. NO. 1687/2003 IN R.F.A. 281/2003 // DISMISSED // 2.4.2008 SD/-, P.R. RAMAN, JUDGE. SD/-, V.K. MOHANAN, JUDGE. // TRUE COPY // P.S. TO JUDGE. KNC/- P.R. RAMAN & V. K. MOHANAN, JJ. = = = = = = = = = = = = = = = = = = = = R.F.A. NO. 281 OF 2003 = = = = = = = = = = = = = = = DATED THIS, THE 2ND DAY OF APRIL, 2008. J U D G M E N T Raman, J. This is an appeal against the judgment and decree in O.S. 617/1996 passed by the Sub Court, Palakkad. The appellant is the defendant in the suit. The respondent is the plaintiff. 2. The suit is one for specific performance of Ext.A1, an agreement dated 14.6.1996, executed between the plaintiff and the defendant. As per Ext.A1, the sale consideration fixed is Rs.6 lakhs out of which the plaintiff has paid Rs. 4,50,000/- as advance. It was contended by the plaintiff that the balance amount of Rs. 1,50,000/ towards sale consideration is to be paid within three months and the sale deed has to be executed. The plaintiff is ready and willing to perform his part of the contract; but in spite of repeated demands, the defendant failed to do so. Since the defendant was evading execution of the sale deed,a formal lawyer notice was issued. But the defendant was not amenable to execute the sale deed in time. The defendant had also entrusted the plaintiff the original documents and other documents. Since the plaintiff apprehended that the defendant is preparing to sell the RFA 281/2003 :2: property to a third person, again he sent a notice demanding to execute the sale deed on or before 13.9.1996, to which no reply was given. Hence the suit was filed. 3. The defendant in her written statement contended that there is no agreement as alleged by the plaintiff, that she had no interest in selling the property, that the plaint schedule property was actually run by her son for sale of sugar and maida, that at the time of the marriage of her grand daughter she borrowed Rs. 4,50,000/- from the plaintiff and at that time the plaintiff got some signed papers from her which were converted into a document purporting to be a sale deed, that the defendant had no intention to sell the property and that she is prepared to return the money with interest. She prayed for dismissal of the suit. 4. The court below framed four issues for trial. Issue Nos. 1 and 2 are as follows: 1. Is the loan transaction set up in the written statement true? 2. Is the suit sale agreement created misusing the blank papers passed on to secure the loan transaction? 5. The evidence in the case consists of the oral testimony of PWs 1 and 2 and Exts. A1 to A11 on the side of the plaintiff and DWs 1 to 3 and RFA 281/2003 :3: Ext. B1 on the side of the defendant. Issue Nos. 1 to 3 were considered together. The court below, after analysing the evidence in the case found that the loan transaction set up in the written statement is not true and that there is no case proved that the agreement Ext.A1 was created by misusing the blank papers passed on to secure the loan transaction and held the suit sale agreement as enforcible and valid. Accordingly the suit was decreed with costs and the plaintiff was given a decree for specific performance directing the defendant to execute the sale deed in favour of the plaintiff regarding the plaint schedule property after receiving the balance sale consideration of Rs. 1,50,000/-., within three months from the date of the judgment. On failure to do so, the plaintiff was held at liberty to approach the court and get the document executed through court after depositing the balance sale consideration. This decree and judgment rendered by the court below is under challenge in this appeal. 6. The learned Senior Counsel Sri. V. Chitambaresh, appearing on behalf of the appellant contended that Ext.A1 agreement would show that in a sense it is a loan agreement and not a sale agreement. According to him, husband of the defendant is a business man and had availed a loan from the plaintiff as evidenced by Ext.B1 dated 13.9.1995. But we find Ext. RFA 281/2003 :4: B1 is an agreement between Jameela and one Gangadharan whereas Ext.A1 is an agreement between Jameela and one Prakasan. He also contended that the lower court was wrong in holding that Ext.A1 is an agreement for sale and even assuming for argument's sake that Ext.A1 is an agreement for sale, specific performance ought not have been granted having due regard to the facts and circumstances of the case and according to him, merely because it is lawful to do so, the court is not bound to grant decree for specific performance as prayed for, rather the court should have only granted alternate relief to which course the appellant was already and willing to return the advance amount. 7. Per contra, learned counsel for the respondent Sri. Krishna Prasad contended that there is substantial difference between Ext.A1 and Ext. B1 and when admittedly, Ext. B1 is a loan agreement executed between the defendant and the brother of the plaintiff, the defendant was aware as to how an agreement for loan has to be worded. She was fully aware of the same and that Ext.A1 was executed subsequently with substantial difference in the wording as a sale agreement. Further, 3/4th of the sale consideration was paid to the defendant and all the previous documents in original relating to the property had been given to the plaintiff. A draft sale RFA 281/2003 :5: agreement was also prepared for the purpose of income tax. It is however contended that the case set up by the defendant that the amount paid was availed by way of a loan for the purpose of the marriage of the grand- daughter of the defendant is totally untrue. To support this contention, he placed reliance on Ext.A11 municipal record to show that the marriage of the grand-daughter of the defendant took place on 22.1.1995 and Ext.A1 document was executed only on 11.6.1996 - more than a year thereafter. This will clearly show that the case of the defendant that the amount was borrowed for the marriage of her grand-daughter is without any bona fides. Further, the evidence of DW.1 would clearly show that the loan was obtained from one Ravi @ Sadasivan. PW.1 has spoken to about the preparation of the draft of the sale deed to which there was no cross examination. PW.2 is the scribe who prepared the said document. These evidence would clinch the issue that Ext.A1 was an agreement for sale and in furtherance of the same, documents of previous title were handed over to the plaintiff, draft agreement for sale was also prepared and merely because there is some rise in price the defendant has turned back from her promise. In such circumstances, the defendant failed to show any special circumstances or reason for not granting the discretionary relief in favour of RFA 281/2003 :6: the plaintiff. 8. Both sides have placed reliance on various decisions of the apex court and this court in respect of their respective contentions. 9. We shall first consider the contentions set up by the appellant as to whether the agreement in question is relating to a loan transaction or it relates to an agreement for sale. According to the appellant, Ext.A1 can only be taken as a loan transaction. PW.2 is the document writer examined in the case who has given evidence regarding Ext.A1. Ext.A1 is signed by both the plaintiff and defendant and also by witnesses. Ext.A8 is a draft of the sale deed pursuant to Ext.A1. Exts.A2 to A6 are also documents which were handed over by the defendant to the plaintiff at the time of Ext.A1. The conduct of handing over these documents to the plaintiff which are documents of title to the property (Ext.A2), registered receipt executed by one P.V. Narayanan in favour of Jameela Beevi (Ext.A3), encumbrance certificate (Ext.A4), possession certificate (Ext.A5) and credit advice slip issued from Canara Bank (Ext.A6) all with a view to transfer title to the vendee. Ext.B1 relied on is an agreement evidencing borrowing of Rs. 5 lakhs by the appellant from one Gangadharan, brother of the plaintiff. Thus, the appellant know the difference between an agreement for sale and RFA 281/2003 :7: a loan agreement. The court below, on an analysis of the oral testimony of the defendant, came to the conclusion that the plea of the defendant that the plaintiff got a loan from Ravi s not pleaded in the written statement and the pleading in the written statement and evidence tendered are mutually contradictory. Even though Ext.A7 is a lawyer notice issued by the plaintiff's counsel to the defendant, there was no reply sent by the defendant. Even though it was pleaded that the defendant was hard pressed for money for the marriage of her grand-daughter as a reason for borrowing the amount, it could be seen that the agreement Ext.A1 is dated 14.6.1996 whereas Ext. A11 shows that the marriage of the defendant's grand-daughter was on 22.1. 1995. Therefore, Ext.A1 was much later to the marriage and the reason pleaded absolutely not convincing. Further, the commissioner deputed by the court below has valued the property at Rs. 5,30,000/- and substantial amount towards sale consideration has been received by way of advance. Further, the defendant knew the difference between a loan agreement and the agreement for sale when admittedly, loan was taken by her earlier as is seen from the document produced in the case, which in material terms differs from Ext.A1. Hence the finding of the court below that the loan transaction set up by the defendant is not true does not call for RFA 281/2003 :8: any interference and the said finding is confirmed. 10. It was then contended that this being a suit for specific performance, the court below should have exercised its discretion in favour of the defendant. But what are the circumstances which favour the defendant to exercise the discretion of the court in her favour is not however, stated or substantiated by adducing any evidence. 11. In this connection, we may refer to few decision on the point. In Balraj Taneja v. Sunil Madan (1999(8) SCC 396) the apex court held that in a suit for specific performance, the court has to scrutinize the facts set out in the plaint to find out whether all the requirements, in particular those indicated in S.16 of the Specific Relief Act regarding readiness and willingness, have been complied with or not and the discretion of the court under words "make such order in relation to the suit as it thinks fit" are of immense significance. In Malapali Munaswamy Naidu v. P. Sumathi (2004(13) SCC 364), it was held that the court should examine by reference to Section 20 of the Specific Relief Act, 1963 as to whether the case on hand is fit for exercising discretion to decree specific performance or not. According to the learned counsel for the appellant herein, the court below did not RFA 281/2003 :9: consider and examine by reference to Section 20 of the Specific Relief Act to see as to whether this is a fit case to exercise the discretion. 13. In Bhaskaran Nair v. Habeeb Mohammed (2002 (1) KLT 864) a Division Bench of this Court held that if under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting as decree to the plaintiff. 14. In Tejram v. Patirambhau ((1997) 9 SCC 634) while construing a document, it was found that the document in reality was a monetary transaction and amount payable was towards interest on unpaid loan taken by the appellant from the respondent, who was a moneylender. In those circumstances, specific performance was not granted. In Simon v. Thitheerumma (1990(1) KLT SN 51) a learned Judge of this Court held that Explanation 1 to Section 20 makes it clear that mere inadequacy of consideration or the mere fact that the contract is onerous to defendants or improvident in its nature, shall not be deemed to constitute an unfair RFA 281/2003 :10: advantage within the meaning of clause (a) or hardship within the meaning of clause (b). The mere hardship on the defendants will not be sufficient ot refuse specific performance. 15. In Prakash Chandra v. Angadlal AIR 1979 SC 1241) it is held that the ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief. In that case, on facts it was found that the appellant was entitled for a decree for specific performance of sale. In P.S Ranakrishna Reddy v. M.K. Bhagyalakshmi (AIR 2007 SC 1256) it was held that relief of specific performance cannot be denied on ground that price of immovable property is on rise. In Parakunnan Veetill Joseph's son Mathew v. Nedumbara Kuruvila's son (1987 (Supp) SCC 340) the apex court held that the court is not bound to grant specific performance merely because it is lawful to do so and 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. 16. In S. Rangaraju Naidu v. S. Thiruvarakkarasu (1995 Supp (2) SCC 680) it was held that grant of decree for specific performance is RFA 281/2003 :11: discretionary and depends upon facts and circumstances of each case. In Kallathil Sreedharan v. Komath Pandyala Prasanna ((1996)6 SCC 218) it was held that the discretionary jurisdiction of court to decree specific performance should be exercised on sound, reasonable and judicial principles. 17. Thus, it could be seen that though Section 20 vests a discretionary jurisdiction on the court, such discretion has to be exercised in an objective manner considering the hardship, if any, that may be caused in case specific performance is granted, in which event the court will refuse to grant specific performance and grant alternate relief of return of the amount. 18. In this case, as already pointed out, Ext.A1 spells out a clear case for agreement of sale. Out of the total consideration of Rs. 6,00,000/-, an amount of Rs. 4,50,000/- was paid by way of advance and the previous title deeds of the property and encumbrance certificate etc. were handed over to the plaintiff and subsequently at the request of the defendant, a draft sale agreement was also prepared. The contention of the defendant that it is only a loan agreement has been found on facts to be not sustainable. The defendant has no case that any hardship will be caused in case relief of specific performance is granted. The extent of property agreed to be sold RFA 281/2003 :12: small. It is knowing fully well the difference between a loan agreement and sale agreement that the defendant has entered into the agreement Ext.A1. Even a draft sale deed was prepared. Prior documents handed over all with a view to complete the transaction. No other special reasons are pleaded as to why the relief of specific performance should be refused to the plaintiff. In the light of the facts and circumstance and the evidence on record, we have no hesitation to hold that there arise no occasion for exercising the discretionary power in favour of the defendant and to refuse specific performance in favour of the plaintiff as decreed by the court below. There is no merit in the appeal. It is accordingly dismissed. P.R. RAMAN, (JUDGE) V. K. MOHANAN, (JUDGE) knc/-