IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID FRIDAY, THE 16TH OCTOBER 2009 / 24TH ASWINA 1931 AS.No. 569 of 1999() -------------------- OS.548/1993 of PRINCIPAL SUB COURT,PARAVUR .................... APPELLANT: PLAINTIFF ---------------------------------- CHUMMAR S/O CHACKO, KORATTUKUDY, AZHKAM KARAYIL KOTHAKULANGARA NORTH VILLAGE, ALUVA TALUK BY ADV. SRI.S.ANANTHASUBRAMANIAN RESPONDENTS: DEFENDANTS ----------------------------------------- 1. ALIAS S/O VARIATHU, KOORANTHAZHATHUPARAMBIL PULIYANAM MURIYIL, PARAKKADAVU VILLAGE 2. KERALA FINANCIAL CORPORATION, THIRUVANANTHAPURAM 3. THE DISTRICT MANAGER KERALA FINANCIAL CORPORATION KALORR. KOCHI.17 ADV. SRI.M.M.SAYED MUHAMMED, SC, KFC FOR R2-3 THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 16/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: HARUN-UL-RASHID, J. ---------------------------------------- A.S.No. 569 of 1999 ---------------------------------------- Dated this the 16th day of October, 2009 JUDGMENT The plaintiff in O.S. No. 548/1993 on the file of the Additional Sub Court, North Paravur is the appellant The suit is for specific performance of an agreement for sale. It is the plaintiff's case that the 1st defendant agreed to sell the plaint schedule property for a consideration of 75,000/- in favour of the plaintiff. The date of agreement is 25. 4.1986 and the period for execution of the sale deed was fixed on or before 27.10.1988.The plaintiff also paid an advance amount of Rs.50,000/- As per the request of the 1st defendant the period of execution of the sale deed was extended up to 27.10.1991 i.e for a further period of 3 years vide Ext.A2. Again the time for execution of the sale deed was extended up to 31.3.1993 vide Ext.A5.. According to the plaintiff the time fixed for execution of the sale deed was totally extended up to a period of 7 years and the 1st defendant did not execute the sale deed transferring the plaint schedule property in favour of the plaintiff. The 2nd defendant in the suit is the Kerala Financial Corporation and the 3rd defendant is the District Manager of the 2nd defendant Corporation. The suit was filed praying for a decree of specific performance of the contract and for permanent prohibitory injunction restraining the defendants from alienating the plaint schedule property, inducting strangers in the plaint schedule property or A.S.No. 569 of 1999 -2- inviting tenders to sell the property etc. There is an alternate prayer for granting the advance sum of Rs. 50,000/- with interest from the date of payment. The trial court dismissed the suit holding that the plaintiff is not entitled to get a decree of specific performance of contract and to get the permanent prohibitory injunction as prayed for. Hence the appeal. The parties hereinafter referred to as plaintiff and defendants as arrayed in the suit. 2. The 1st defendant remained exparte. 3. The 2nd and 3rd defendants in their written statement averred that the 1st defendant has obtained a loan of 7,75,000/- from the the 2nd defendant-Corporation by mortgaging the plaint schedule property along with certain other properties as security for the due re- payment of the loan amount The loan was granted and the loan agreement was executed on 8.5.1986. Equitable mortgage of the plaint schedule property was created in favour of the 2nd defendant -Corporation and the title deed was deposited on 9.5.1986. It is further contended that the alleged agreement for the sale of the property was a collusive document created between the plaintiff and the 1st defendant in order to test whether the repayment of the loan amount due to the 2nd defendant-corporation can be stalled. The 1st defendant did not repay the loan amount and hence the assets of the 1st defendant had been taken over by the 2nd defendant Corporation under Section 29 of the Kerala Financial Corporation Act on A.S.No. 569 of 1999 -3- 27.3.1992. Subsequently the assets of 1st defendant was sold for a sum of Rs. 6 lakhs . According to these defendants the present suit was filed without any bonafides but only with the intention to defeat the legitimate claim of the 2nd defendant -Corporation and the 3rd defendant. 4. The trial court framed necessary issues The issues i.e whether the plaintiff colluded with the 1st defendant for filing the present suit , whether Ext.A1 agreement of sale is a genuine document or not and whether the plaintiff is entitled to get the reliefs, are examined in detail by the trial court. 5. The evidence in this case consists of oral testimonies of PW1 , DW1, Exts. A1 to A5 and B1 to B11. 6. Ext.A1 is the agreement of sale dated 25.4.1986. The value of the property fixed is Rs. 75,000/- An advance sum of Rs.50,000/- was alleged to be paid by the plaintiff. The balance amount to be payable is only Rs. 25,000/- Ext.A1 agreement of sale stipulates the period for executing the same i.e on or before 27.10.1988. So firstly the period fixed for performance of the contract is two years and 6 months . Before the expiry of the 1st term it was further extended for a period of another 3 years by executing a second agreement of sale which was marked as Ext.A2. Again the period was extended by a further period of more than 16 months by executing a 3rd agreement. Ext.A5 is the 3rd agreement. 7. Going by the contentions raised by the 2nd and 3rd defendants, the 1st defendant obtained a loan of Rs. 7.75 lakhs and that equitable mortgage was created offering the plaint schedule property along with A.S.No. 569 of 1999 -4- certain other properties as security for the repayment of the loan amount The deposit of title deed was effected on 9.5.1986, The loan application was filed on 25.3.1985 The loan was granted and the loan agreement was executed on 8.5.1986. The loan was sanctioned and the loan sanction letter was produced before the trial court as Ext.B1. Ext.B1 is dated 25.3.1985. So it has to be inferred that the loan was sanctioned on a date prior to Ext.A1 agreement of sale. 8. From the afore mentioned dates and events it is very clear that the 1st defendant had acted malafidely in entering into series of agreements of sale with the plaintiff after fully knowing that the 2nd defendant- Corporation sanctioned an amount of Rs. 7.75 lakhs as loan. For the sanctioning of the loan by the 2nd defendant corporation, the 1st defendant had filed a declaration and affidavit before the 2nd defendant Corporation to the effect that there is no encumbrance on the property and no other person has any right , title or interest over the property. This Court is of the view that after pledging the property with the second defendant corporation , to enter into another agreements of sale with a third person in respect of the same pledged property is a fraudulent conduct. In the above circumstances the contention of the defendants 2 and 3 that the plaintiff and 1st defendant colluded together for creating Ext.A1, A2 and A5 agreements of sale and to file the present suit deserves serious consideration. 9. The conduct of the plaintiff and 1st defendant also shows that they colluded between to file the present suit. The agreement of sale was A.S.No. 569 of 1999 -5- stretched over a period of 7 years for no good reasons The present suit was filed at a time immediately after the property was sold by the 2nd defendant-Corporation for realisation of the loan amount due to it. The sanctioning of the loan was intimated to the 1st defendant by Ext.B1 letter dated 25.3.1985 The 2nd defendant also issued a publication in the newspapers inviting objection in accepting the plaint schedule property and certain other items of properties as security for the repayment of the amount . Ext.B2 is the paper publication Ext.B2 is dated 14.4.1986 The equitable mortgage offering the plaint schedule property was created on 9.5.1986 . The confirmation letter is marked as Ext.B4 . Ext. B4 is dated 12.5.1986. The declaration and the affidavit filed by the 1st defendant are marked as Exts.B5 and B6 respectively. The possession certificate issued by the Village Officer was marked as Ext.B7 . The tax receipt was marked as Ext.B9. The encumbrance certificate of the property was marked as Ext.B10. The title deed in respect of the plaint schedule property was produced before the 2nd defendant corporation and marked as Ext.B11. 10. A reasonable prudent man will not wait for 7 years to get possession of the plaint schedule property after making 2/3 of the consideration amount. , After submitting Ext.B9 tax receipt, Ext.B10 encumbrance certificate Ext.B11 title deed etc before the Kerala Financial Corporation, the 1st defendant wilfullly extended the execution period of the Ext.A1sale agreement. The conduct of the 1st defendant in executing a series of agreements by extending the period of execution twice, cannot be accepted.. By no stretch of imagination one can accept A.S.No. 569 of 1999 -6- the case of the plaintiff that he has been waiting for years and years for execution of the sale deed fully knowing that the property has already been mortgaged to the Kerala Financial Corporation. The facts circumstances narrated above, shows that there was every reason to believe that Ext.A1 agreement of sale is a concocted document intended to defeat the legitimate right of the 2nd defendant Corporation. The conduct of the 1st defendant and the further fact that he did not contest the suit denying the averments in the plaint are also another strong circumstances which leads to the inference that the suit itself is a collusive one. In the light of the contentions raised by the contesting defendants that the agreements of sale(Exts.A1, A2 and A5) are fabricated documents and that the suit is a collusive one, the plaintiff did not chose to examine even a witness to prove any of the above said agreements of sale. The 2nd defendant also submitted before the court that the property was taken over and sold and the purchaser had taken possession of the property. In the circumstances the trial court is fully justified in not granting any reliefs to the plaintiff. In the result, this appeal fails and accordingly dismissed with costs. (HARUN-UL-RASHID, JUDGE) es. HARUN-UL-RASHID, J. --------------------------- A.S. No. 569 of 1999 ---------------------------- JUDGMENT 16th October, 2009