IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 18TH FEBRUARY, 2008/ 29TH MAGHA, 1929 AS.No. 890 of 1997(E) (AGAINST JUDGMENT DTD.26.3.1996 IN OS.98/1995 of ADDL.SUB COURT, KOCHI) .................... APPELLANT/PLAINTIFF IN THE SUIT: SUKUMARAN, S/O.ISHNATHY, ITHITHARAYIL HOUSE, EDAKOCHI VILLAGE, EDAKOCHI MURI, KOCHI TALUK. BY ADV. SRI.K.JAYAKUMAR SRI.P.B.KRISHNAN SRI.S.V.BALAKRISHNA IYER (SR.) RESPONDENTS/DEFENDANT IN THE SUIT: 1. C.K.MANI, S/O.KUMARAN, RESIDING IN 22/1752, KANNANGATHU HOUSE, EDAKOCHI VILLAGE, KOCHI TALUK. ADDL.R2. PREM NAZIR, S/O.BHASKARAN, AGED ABOUT 50 YEARS, 'SUGUNALAYAM', EDAKOCHI, ERNAKULAM. ADDL.R2 IS IMPLEADED AS PER ORDER DATED 26.3.2002 IN CMP NO.1973 OF 2000. BY ADV. SRI.R.D.SHENOY (SR.) SRI.S.VINOD BHAT SRI.V.B.UNNIRAJ SMT.K.SEEMA SRI.M.C.SEN (SR.) THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 05/02/2008, THE COURT ON 18/02/2008 DELIVERED THE FOLLOWING: P.R.RAMAN & V.K.MOHANAN,JJ. ----------------------------------------------------- A.S.NO. 890 OF 1997 – E ----------------------------------------------------- Dated this the 18th day of February, 2008. J U D G M E N T Mohanan,J: The plaintiff in a suit for specific performance of an agreement for sale dated 12.6.1993 is the appellant herein. The impugned judgment is a common judgment of the Additional sub Court, Kochi in O.S.No.98 of 1995 and O.S.No.346 of 1995. O.S.No.98 of 1995 is the suit for specific performance of the agreement for sale dated 12.6.1993 and this appeal is filed challenging the judgment in the suit. 2. The main averments in O.S.No.98 of 1995 are as follows:- The defendant owns 25 cents of property, with a house thereon, lying in Sy.No.10/5 of Edakochi Village. The parties to the suit executed an agreement on 12.6.1993 for sale of 22 cents to the plaintiff after leaving a space of 3 cents for pathway. The 22 cents of property which is agreed to be sold is shown in the plaint schedule. The total consideration is fixed as Rs.1,24,000/-. It was A.S.NO.890 OF 1997 :-2-: agreed that the sale deed should be executed within two years. An amount of Rs.50,000/- was paid to the defendant as advance on the date of agreement itself. It was also agreed as per the terms of the contract that another sum of Rs.50,000/- should be paid within six months. It is averred in the plaint that the plaintiff went to the house of the defendant on several occasions namely, 1.12.93, 10.12.93, 15.1.94, 10.2.94 and 10.4.94 to make the payment of Rs.50,000/-, but the defendant was not available in his house. It is also averred that when the plaintiff met the defendant on 1.5.94, he had offered the amount. But, according to the plaintiff, the defendant refused to accept the same and then only the plaintiff could understand that the defendant was deliberately evading the plaintiff to avoid receipt of the amount. Hence, according to the plaintiff, on 5.5.1994, he caused to send a lawyer notice to the defendant calling upon him to receive the amount. According to the plaintiff, the defendant evaded in receiving the notice for some time and received it later. It is also averred that before receiving the said A.S.NO.890 OF 1997 :-3-: notice, the defendant had issued a notice on 9.5.1994 so as to make it appear that he issued a notice first. It is also averred in the plaint that on 29.12.1994, the plaintiff sent a demand draft for Rs.50,000/- which was also refused to receive by the defendant. Thus, according to the plaintiff, the defendant, who withdrew his promise, committed breach of contract. It is averred that the plaintiff was always willing to perform his part of the contract including payment of balance sale consideration. It is also averred that in the mean while, when the plaintiff came to know that the defendant has tried to sell the property to strangers, the plaintiff had filed a suit for injunction, which is mentioned earlier. 3. The defendant had filed a detailed written statement raising the following contentions. The sale consideration fixed was not Rs.1,24,000/- as contended by the plaintiff and the agreement was to sell the building for Rs.25,000/- and the land at the rate of Rs.4,500/- per cent and the total extent of the property is 25 cents and the defendant had agreed to leave 3 links space on the A.S.NO.890 OF 1997 :-4-: southern side for pathway. The Government dropped the proposal to acquire the western portion of the property of the defendant for construction of a road. According to the defendant, the payment of Rs.50,000/- within six months was an essential condition of the agreement. According to the defendant, the payment was to be made for enabling the defendant to shift from the plaint schedule property. According to him, he had contracted to purchase 24 cents of land for which he had to pay Rs.50,000/- as advance. It is the specific case of the defendant that he could not purchase the said property as the plaintiff failed to pay Rs.50,000/-. According to him, the amount was to be paid on or before 12.12.1993. As he was not having the money to materialise his contract, he could not purchase the property since the plaintiff failed to pay the balance consideration within the stipulated time. In the written statement, the defendant specifically denied the statement of the plaintiff that the plaintiff went to the house of the defendant for offering the amount. It is stated by the defendant that the plaintiff never came to the house of the A.S.NO.890 OF 1997 :-5-: defendant and he did not offer the amount. Therefore, according to the defendant, the plaintiff committed breach of the agreement and thereby, repudiated the contract. It is the case of the defendant that even at the time of filing the suit for injunction, the plaintiff was not having Rs.50,000/-. It is stated in the written statement that the plaintiff issued the demand draft seven months after the filing of the suit for injunction. Therefore, it is submitted that the suit is liable to be dismissed. 4. As stated earlier, the plaintiff had also filed a suit as O.S.No.346 of 1995 for injunction restraining the defendant from alienating the plaint schedule property. The said suit was originally filed as O.S.No.223 of 1994 before the Munsiff's Court, Kochi and the same has been transferred to the Additional Sub Court, Kochi for joint trial with O.S.No.98 of 1995 as per the orders of the District Court in T.O.P.No.331 of 1995. In the said suit, the contention was almost the same. 5. Based upon the rival contentions raised by the parties in both the suits, separate issues were framed. But A.S.NO.890 OF 1997 :-6-: the evidence was recorded in O.S.No.98 of 1995. The memorandum of evidence consists of oral testimony of Pws.1,2 and DW.1 and the documentary evidence such as Exts.A1 to A4 on the side of the plaintiff and B1 to B7 on the side of the defendants. After having elaborate discussion of the evidence and its appreciation, the court below found that it is the plaintiff who committed the breach of contract and therefore, he is not entitled to the relief of specific performance. But, being the alternative prayer of the plaintiff for the return of the advance amount, it was held that the plaintiff is entitled to the entire advance money amount which was paid by him to the defendant with interest from the date of suit. It was also held that after decree, he is entitled to 6% interest only. In the other suit for injunction, it was held that the plaintiff is not entitled to get injunction for three reasons because firstly, he committed breach of contract, secondly, specific performance is denied and thirdly, the suit for injunction virtually became infructuous, when the suit for specific performance was filed. Thus the suit for injunction was A.S.NO.890 OF 1997 :-7-: dismissed with cost and O.S.No.98 of 1995 which is a suit for specific performance was decreed directing the defendant to return the amount of Rs.50,000/- with interest thereon at 12% per annum from the date of suit to the date of judgment and thereafter at 6% per annum till realisation of the amount and with proportionate cost. The present appeal is preferred challenging the judgment and decree in O.S.No.98 of 1995 which is a suit for specific performance. Additional second respondent has been impleaded as per order dated 26.3.2002 in CMP No.1973 of 2000. 6. We have heard Sri.S.V.Balakrishna Iyer, learned Senior Counsel appearing for the appellant, the Senior Counsel Mr.R.D.Shenoy appearing for the first respondent and Sri.M.C.Sen, Senior Counsel appearing for the second respondent. 7. In O.S.No.98 of 1995, issue Nos. 2 and 3 were as follows. Who committed breach of contract? Is the plaintiff entitled to specific performance? 8. In Issue No.2, the court below found that Ext.A1 stipulates that the plaintiff should pay another Rs.50,000/- A.S.NO.890 OF 1997 :-8-: to the defendant within six months and that is to be made on or before 12.12.1993. The case of the defendant is that the plaintiff failed to make the payment within the stipulated time and hence he committed the breach of contract. On the other hand, the plaintiff contended that the defendant was evading from receiving the amount and he refused to receive it when tendered on 1.5.1994 and thus the defendant committed breach of the agreement. Another contention advanced by the plaintiff is that there is no failure on his part in performing his part of contract and in paying Rs.50,000/- of balance consideration since the period of agreement was for two years and not six months as claimed by the defendant. It has come out from records that the defendant and PW-1 (the plaintiff) are residing very close and therefore, there is no difficulty to meet the defendant and make the payment, if the plaintiff was interested in making the payment as agreed. Being the neighbours residing within short vicinity, there is no need to fix the dates to meet the defendant. DW-1 in his deposition denied the claim of the plaintiff that he himself A.S.NO.890 OF 1997 :-9-: along with PW-2 visited the house of the defendant for making the payment. On analysing the deposition of PW-2, the trial court found that PW-2 had met the defendant several times between 1.12.1993 and 1.5.1994, but he never disclosed to him about their visit for making the payment. After appreciating the above evidence and analysing the same on the basis of natural human conduct, the trial court found that the claims of PW1 and PW2 are not appearing to be true and the same is unbelievable. It is also relevant to note that PW-1 (plaintiff) was aware of the fact that the payment could be made by way of demand draft or cheque as he claimed to have issued subsequently. The trial court correctly formulated the question as to why the plaintiff failed to forward the demand draft along with Ext.A2. PW-1 has no proper explanation and he had conceded that he could have done it. However, a subsequent explanation was attempted to have offered by the plaintiff, but the same was not acceptable as it was only a lame excuse. Finally, the trial court found that there was no evidence to show that the plaintiff has made any A.S.NO.890 OF 1997 :-10-: attempt to make the payment before Ext.B4 dated 28.12.1994. It is also relevant to note that one of the contentions raised by the defendant is that the plaintiff was not having the requisite amount with him to pay the balance consideration. Though the plaintiff has claimed that he had two bank accounts, no evidence including passbooks were produced to substantiate his contention that he had sufficient money with him. The plaintiff has miserably failed to substantiate the fact that he had sufficient money that is, a sum of Rs.50,000/- with him on or before 12.12.1993 so as to pay the balance consideration within the time stipulated in the contract. So, the materials available on record and the evidence show that there was no attempt by the plaintiff to make the payment of Rs.50,000/- within the stipulated time. Apart from the fact that the plaintiff was not having an amount of Rs.50,000/- on or before 12.12.1993, it is also gatherable from evidence that the plaintiff was under the impression that the balance consideration of Rs.50,000/- need be paid only within two years, which is the time fixed as per the A.S.NO.890 OF 1997 :-11-: contract and according to the plaintiff, he was under the above impression especially, when the defendant did not ask for the balance consideration. In this juncture, it is pertinent to note that as per the details and provisions contained in Ext.A1, there is no scope for any dispute that the term is the essence of the contract and the same is fixed as six months. The evidence on records substantiate the same. So the finding arrived by the court below that the plaintiff was not having Rs.50,000/- on or before 12.12.1993 is further substantiated through the deposition of PW-1 himself. 9. After consideration of several reported decisions, the trial court found that the plaintiff has committed breach of contract as he failed to make the payment of Rs.50,000/- within the stipulated time. Regarding the contention of the plaintiff that there is no stipulation in Ext.A1 that the contract gets terminated if Rs.50,000/- is not paid within time, the trial court had held that even though there was no such a recital in the agreement, the question under relevant consideration is A.S.NO.890 OF 1997 :-12-: not the termination of the contract, but regarding the breach of contract. Therefore, the finding of the court below that the plaintiff has committed breach of contract as he failed to make payment of Rs.50,000/- within the stipulated time is factually correct and the same was supported by the materials and evidence on record and therefore, we confirm the above finding especially when nothing brought out to counter the above finding. 10. In answer to issue No.3 as to whether the plaintiff is entitled to specific performance, the court below had found that he is not entitled to specific performance as he had committed the breach of contract. Even if it is proved that there is no failure on the part of the party seeking relief of specific performance, the court is not bound to grant such a relief for sufficient reasons enumerated in the statute. In the present case, the trial court had specifically found that there is breach of contract on the side of the plaintiff and therefore, it is perfectly legal and valid in denying the relief of specific performance. But the alternative prayer of the plaintiff A.S.NO.890 OF 1997 :-13-: has been allowed by the court. Though the defendant has claimed for damages, no contention was taken in the written statement for the damages and no further step was taken except mere demanding or suggesting forfeiture of Rs.5,000/-. As correctly observed by the court below, though an opportunity had been given to the defendant for filing additional written statement, when the plaintiff introduced an alternative prayer for the return of the amount by amending the plaint, no contention was taken for the forfeiture of Rs.5,000/-. Thus he waived his right of forfeiture under Ext.A1 agreement. But, while the alternative relief for return of the advance amount was allowed, the defendant was directed to return the entire advance amount, but limited the interest on the advance amount with effect from the date of suit only. 11. We are of the opinion that the above approach of the court below fixing the interest only from the date of the suit is not correct considering the facts and circumstances of the case. In fact, the advance amount was paid on the date of the agreement that is on 12.6.1993. From that date A.S.NO.890 OF 1997 :-14-: onwards, the amount was in the hands of the defendant and being enjoyed by him. Ext.A2 dated 5.5.1994 is the notice sent by the plaintiff, demanding the performance of the contract. Therefore, it can be seen that the defendant was aware of the plaintiff's demand and action to move for specific performance. Even though Ext.A2 was issued by the plaintiff, Ext.A4 dated 9.5.1994 shows that the defendant had repudiated the contract and hence, he was aware of his liability to pay back the amount which is received as consideration on 12.6.1993. Therefore, it is just and proper to direct the defendant to pay interest from the date of Ext.A4 that is, 9.5.1994 instead of fixing the interest from the date of the suit only. Defendant has no case that he suffered any damage as a result of the breach of contract. Therefore, we direct the first respondent/defendant to return the advance amount of Rs.50,000/- with 12% interest from the date of Ext.A4. So the alternative prayer allowed by the court below will stand modified to that extent. A.S.NO.890 OF 1997 :-15-: 12. In the result, we confirm the judgment and decree passed by the court below in O.S.No.98 of 1995 with a partial modification that the respondent/defendant shall return the amount of Rs.50,000/- with interest at the rate of 12% per annum from the date of Ext.A4 dated 9.5.1994 till this date and thereafter 6% per annum till the realisation and parties are directed to bear their respective costs. The appeal is disposed of as above. (P.R.RAMAN) Judge Mbs/ (V.K.MOHANAN) Judge A.S.NO.890 OF 1997 :-16-: P.R.RAMAN & V.K.MOHANAN, JJ. -------------------------------------------- A.S.NO. 890 OF 1997 ------------------------------------ J U D G M E N T DATED:18-2-2008 A.S.NO.890 OF 1997 :-17-: