IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN TUESDAY, THE 29TH JANUARY 2008 / 9TH MAGHA 1929 AS.No. 78 of 1994(A) O.S.NO.518 OF 1989 OF THE PRINCIPAL SUB COURT, KOTTAYAM APPELLANT: DEFENDANT: ------------------- MADHAVAN NAIR, S/O.RAMAN PILLAI, ELANJIMOOTTIL HOUSE, PERUNNA KIZHAKKUM BHAGOM MURI, CHANGANACHERRY. BY ADV. SRI.JOSE JOSEPH ARAYAKUNNEL SRI.VARGHESE PARAMBIL RESPONDENT: PLAINTIFF: -------------------- ALEX JOSEPH, S/O.JOSEPH, CHECKATTU HOUSE, THELLIYOOR MURI, EZHAMATTOOR VILLAGE. BY ADV. SRI.G.UNNIKRISHNON THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 29/1/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.T.SANKARAN, J. -------------------------------------------- A.S. NO. 78 OF 1994 -------------------------------------------- Dated this the 29th January, 2008 JUDGMENT The defendant in O.S.No.518 of 1989, on the file of the Court of the Principal Subordinate Judge of Kottayam, is the appellant. The respondent filed the suit, for specific performance of Exhibit A1 agreement for sale or in the alternative for realisation of the amount advanced as per the agreement. The trial court decreed the suit in part and granted a decree for realisation of a sum of Rs.75,000/- with interest at 12% from the date of suit till realisation. The defendant filed A.S.No.78 of 1994, challenging the judgment and decree of the trial court. The appeal was disposed of by the judgment dated 18.9.2002, setting aside the judgment and decree of the trial court and remanding the case to the trial court for fresh disposal. The judgment dated 18.9.2002 passed by this Court was challenged before the Supreme Court in Civil Appeal No.205 of 2005. The Honourable Supreme Court set aside the judgment of this Court and directed this Court to dispose of the appeal on the merits after re-hearing the appeal on the basis of the pleadings, evidence and other materials on record. The Supreme Court also directed to grant such relief to which the parties may be found entitled to. 2. The case of the plaintiff, inter alia, is as follows: On 11.5.1988, Ext.A1 agreement was executed by the defendant agreeing to sell the A.S. NO. 78 OF 1994 :: 2 :: plaint schedule property, having an extent of nine cents, for a total consideration of Rs.90,000/-. An advance of Rs.5,000/- was paid to the defendant. The assignment deed was to be executed within a period of two months. Subsequent payments were made as per the agreement. Rs.5,000/- was paid on 11.5.1988, Rs.20,000/- was paid on 12.5.1988 and Rs.15,000/- was paid on 13.5.1988. Receipts were issued by the defendant in respect of these payments. Since the defendant failed to comply with the agreement for sale, Ext.A4 notice dated 13.6.1988 was issued to the defendant. He was directed to appear before the Sub Registry Office on 24.6.1988 to execute the sale deed. The defendant did not appear before the Sub Registry Office. Subsequently, the defendant approached the plaintiff and agreed to execute the sale deed and received another sum of Rs.15,000/- on 25.6.1988 as per a receipt. The defendant agreed to execute the sale deed on or before 11.7.1988. On 8.7.1988, the plaintiff issued a notice to the defendant, directing him to appear before the Sub Registry Office on 11.7.1988. The defendant did not appear before the Sub Registry Office. Meanwhile, at the request of the defendant, a further amount of Rs.20,000/- was paid on 10.7.1988 on his agreement to execute the sale deed on 11.7.1988. On 26.10.1988, another agreement (Ext.A8) was executed acknowledging the total payment of Rs.75,000/- by the plaintiff. As per the terms of Ext.A8 agreement, the defendant was to execute the sale deed within two A.S. NO. 78 OF 1994 :: 3 :: months from the date of agreement on payment of the balance consideration of Rs.15,000/- by the plaintiff. The defendant failed to execute the document. Another notice was issued to the defendant on 20.12.1988. The suit was filed on the failure of the defendant to execute the assignment deed. It was contended that the plaintiff was always ready and willing to perform his part of the contract. An alternative relief for return of the advance amount of Rs.75,000/- with 12% interest from the respective dates of payment was also prayed for. 3. The defendant contended in the written statement that he executed Ext.A1 agreement, dated 11.5.1988, but it was executed under peculiar circumstances. The wedding of the daughter of the defendant was fixed. Defendant decided to sell the plaint schedule property, which was worth Rs.3.5 lakhs. Before the date of marriage, he could not arrange for sale of the property. With the help of his neighbours Balachandra Das and Mohanachandra Das, the defendant tried to get a loan. The plaintiff agreed to advance a loan, but interest claimed was 60% per annum. The defendant was reluctant to pay such interest. In these circumstances, he was compelled to execute Ext.A1. However, the defendant contended that he did not receive Rs.5,000/- as advance. He also denied of having received any amount subsequently, as stated by the plaintiff. It was contended by the defendant that after execution of Ext.A1 A.S. NO. 78 OF 1994 :: 4 :: registered agreement, all the parties went to the shop of Balachandra Das from where the plaintiff obtained a signed blank paper from the defendant. The plaintiff and the defendant went to a jewellery on 11.5.1988 at 9 p.m.. The proprietor of the jewellery was a friend of the plaintiff. The plaintiff arranged to purchase 168 grams of gold ornaments from the jewellery worth Rs.51,000/- for the purpose of the marriage of the daughter of the defendant. It was said that the plaintiff would arrange for the payment. After the marriage, without much delay, the ornaments were returned on 5.2.1989 to the plaintiff. At that time, the plaintiff demanded a further amount of Rs.50,000/- in order to cancel the agreement for sale. The defendant did not pay that amount. The defendant denied the execution of Ext.A8 agreement dated 26.10.1988. Ext.A8 is a cooked up document using the blank paper signed by the defendant. The defendant also disputed the ”readiness and willingness” pleaded by the plaintiff. 4. Before the court below, PWs.1 to 3 and DWs.1 to 5 were examined on the side of the plaintiff and defendant respectively . Exts.A1 to A11, Exts.B1 to B3 and Ext.X1 were marked. PW1 is the plaintiff. PWs.2 and 3 are Mohanachandra Das and Balachandra Das, who are the neighbours of the defendant. They supported the case of the plaintiff. They deposed that there was an agreement to sell the plaint schedule property to the plaintiff. They also deposed about the various payments A.S. NO. 78 OF 1994 :: 5 :: made by the plaintiff to the defendant and about the correctness of Exts.A2, A3, A5 and A7 receipts issued by the defendant for having received the various amounts mentioned therein. DW1 is the defendant. DW2, the son-in-law of the defendant, was examined to prove return of the gold ornaments. DW3 is the goldsmith before whom the ornaments were allegedly weighed at the time of return of the same. DW4 is the nephew of the defendant. He was examined to prove that the ornaments were returned to the plaintiff. DW5 is the Circle Inspector of Police, who proved Ext.X1. He was examined in an attempt to establish that on 26.10.1988, the date on which Ext.A8 agreement was executed, the defendant was attending a course in the Armed Reserve Camp. 5. On a careful consideration of the pleadings and the documentary and oral evidence, the following facts are relevant. Ext.A1 is a registered agreement dated 11.5.1988. Execution of Ext.A1 is admitted by the defendant. His only case is that he was compelled to execute Ext.A1 agreement. Though the defendant denied the receipt of Rs.5,000/- as advance and the subsequent payments as alleged by the plaintiff, it is hard to believe the case put forward by the defendant. Exts.A2, A3, A5 and A7 receipts would show that the defendant had received the amounts shown therein. In Exts.A2 and A3, Mohanachandra Das, who was examined as PW2, is a witness. In Ext.A5 and A7, A.S. NO. 78 OF 1994 :: 6 :: Balachandra Das (P.W 3) is a witness. PWs.2 and 3 are the neighbours of the defendant. The defendant has no case that he is on inimical terms with PWs.2 and 3. There is nothing in evidence to indicate that PWs.2 and 3 were not speaking the truth. The evidence of PWs.2 and 3 would indicate that they are not interested witnesses and that their evidence is reliable. Going by the evidence of PWs.2 and 3, it can safely be held that the defendant received a sum of Rs.75,000/- from the plaintiff on various dates as alleged by the plaintiff and for which Exts.A2, A3, A5 and A7 receipts were issued by the defendant. 6. As regards the execution of Ext.A8 agreement, the case put forward by the defendant is that on the date on which Ext.A1 agreement dated 11.5.1988 was executed, while returning from the Registrar's Office, the parties went to the Vaidyasala of Balachandra Das (PW3) and as suggested by the plaintiff, the defendant gave a signed blank paper to the plaintiff. The further case of the defendant is that Ext.A8 agreement is a concocted document by using the signed blank paper. On a perusal of Ext.A8, it is seen that the said agreement is written on a stamp paper purchased in the name of the defendant on 25.10.1988 and two plain papers. The seal on the stamp paper would indicate that it was issued only on 25.10.1988. The signature in Ext.A2 tallies with the admitted signature of the defendant in Ext.A1. Since Ext.A2 is written on a stamp A.S. NO. 78 OF 1994 :: 7 :: paper issued only on 25.10.1988, the case put forward by the defendant that it was concocted with the help of a signed blank paper given by him on 11.5.1988, cannot be believed. There is no case for the defendant that he had put his signature in a blank stamp paper purchased on 25-10- 1988. The defendant while examined as DW1 admitted his signature in Ext.A3 receipt, which evidences payment of Rs.15,000/-. Exts.A2 and A3 are written in the same sheet of paper. Mohanachandra Das, who was examined as PW2, is a witness in Exts.A2 and A3. The defendant admits his signature in Ext.A3. At the same time, he does not agree that Ext.A2 was issued by him. It is hard to believe that the defendant would sign the endorsement on 13.5.1988 (Ext.A3), above which Exhibit A 2 receipt was written and which according to him was not signed by him. The irresistible conclusion that can be drawn is that the defendant received a sum of Rs.20,000/- on 12.5.1988 as evidenced by Exhibit A2. The defendant also stated in evidence that the signature in all the three papers which constitute Ext.A8 are not that of the defendant. This is contrary to the case put forward by the defendant in the written statement where he has stated one signed blank paper was given to the plaintiff. 7. The case of the plaintiff is that he issued notices dated 13.6.1988 (Exhibit A4), 8.7.1988, 20.12.1988 and 5.1.1989 to the defendant. This is not denied by the defendant. Exts.A6 and A9 are A.S. NO. 78 OF 1994 :: 8 :: postal acknowledgment cards in respect of two such notices. The defendant admitted in evidence that the signature in Ext.A6 and A9 were put by him. The explanation offered by the defendant for not sending any reply to the notice is that he thought of settling the whole dispute without delay and that was why no reply was sent. When the plaintiff stated in the notices that two agreements were executed by the defendant agreeing to sell the plaint schedule property and that the defendant received a sum of Rs.75,000/-, it is hard to believe that the defendant would have kept quite, if his case was true. The aforesaid facts and circumstances would clearly establish that Exts.A1 and A8 agreements were executed by the defendant and received a sum of Rs. 75,000/- from the plaintiff. 8. The next question to be considered is whether Exts.A1 and A8 agreements were executed as a security for the loan transaction and whether the agreements were agreements for sale of the plaint schedule property. On going through the agreements and the evidence on record, it cannot be said that the agreements were executed only as security for a loan transaction between the plaintiff and the defendant. It is true that the defendant's daughter's wedding was solemnized on 12.5.1988. The defendant was a Head Constable in the Police Department. The evidence would indicate that he was in need of money for conducting the marriage of his daughter. It has also come out in evidence that the A.S. NO. 78 OF 1994 :: 9 :: defendant owns only an extent of 20 and odd cents of which the plaint schedule property forms a part and that there is a house in the property in which he is residing with his family. It is also evident that the defendant was not in affluent circumstances at the relevant time. The plaintiff is admittedly a person who runs the business of chit. It is natural that in such circumstances the defendant would have approached the plaintiff for a loan. It is also quite natural that the plaintiff would have insisted for executing an agreement for sale. But that does not mean that the parties did not really enter into an agreement for sale and that Exts.A1 and A8 are mere paper transactions. The defendant has even put forward a case that he did not receive any amount after execution of Exts.A1 and A8. This is a story which cannot be believed at all. The story put forward by the defendant that the plaintiff arranged to purchase gold ornaments weighing 168 grams from his friend's jewellery; that after the marriage the ornaments were returned to the plaintiff and that the plaintiff further demanded a sum of Rs.50,000/- etc. cannot be believed at all. The defendant stated in his written statement that for borrowing the amount from the plaintiff he sought the help of Mohanachandra Das and Balachandra Das, who were examined as PWs.2 and 3. If the case of the defendant was true, certainly, PWs.2 and 3 would have supported the defendant. On the other hand, PWs.2 and 3 stated in evidence that the various amounts were paid by the plaintiff to the defendant as evidenced A.S. NO. 78 OF 1994 :: 10 :: by the receipts signed by the defendant and handed over to the plaintiff. I am not inclined to believe the story put forward by the defendant that gold ornaments were arranged by the plaintiff and that those ornaments were returned by the defendant to the plaintiff later. 9. The next question to be considered is whether the plaintiff is entitled to a decree for specific performance. A decree for specific performance is a discretionary relief. Section 20 of the Specific Relief Act 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. The discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles. It is true that the plaintiff has averred in the plaint that he was ready and willing to perform his part of the contract and that he was ready to pay the balance consideration of Rs.15,000/-. But when examined as PW1, he has not stated in clear terms that he was ready and willing to perform his part of the contract and that he continued to be so all through out. This is a necessary ingredient under Section 16(c) of the Specific Relief Act. Section 16(c) of the Specific Relief Act provides that specific performance of a contract cannot be enforced in favour of a person who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by A.S. NO. 78 OF 1994 :: 11 :: him. The evidence of DW1, when read as a whole, would not spell out the readiness and willingness as contemplated under Section 16(c) of the Specific Relief Act. 10. There are other circumstances as well which would compel me to hold that the plaintiff is not entitled to the discretionary relief of specific performance. As stated earlier, the defendant was a police Head Constable. At the time of giving evidence, he had retired from service. The evidence would indicate that he was in the Medical College for quite some time after having been inflicted with a bullet injury. The plaint schedule property is a part of his residential compound, having a total extent of about 20 and odd cents. The plaint schedule property is having an extent of nine cents out of that total extent. The residential house of the defendant forms part of the plaint schedule property. It has come out in evidence that the defendant has no immovable property other than the property in question. The circumstances under which the defendant was compelled to execute Exts.A1 and A8 are also relevant. He was hard- pressed for money for the purpose of conducting the marriage of his daughter. The evidence would indicate that the defendant is not reasonably affluent. He was having financial stringency at the time when Exts.A1 and A8 were executed. The defendant stated in evidence that he never intended to sell the property and he never would have thought of A.S. NO. 78 OF 1994 :: 12 :: selling the property but for raising funds for conducting the marriage of his daughter. He also stated that the plaint schedule property would have fetched a value of Rs.3.5 lakhs in May 1988. But, he could not arrange a purchaser for that price. Since the marriage was to be solemnized on 12.5.1988, the defendant was in such a situation that he had no other alternative but to execute an agreement for sale. The evidence would indicate that Rs.90,000/-, the consideration for the property shown in Ext.A1 was not a proper and reasonable price for the property at the relevant time. Pitted against these circumstances in which the defendant was placed, let us see the position of the plaintiff. He is a person who runs a chit business. He resides about 28 kms. away from the plaint schedule property. He has an office building at Thiruvalla where the business is being conducted. It is relevant to note that after the trial court granted only the alternative relief for return of the advance amount, the defendant did not file any appeal against that part of the judgment by which a decree for specific performance was declined. Nor did he file a Memorandum of Cross Objection in the appeal filed by the defendant. Apart from all these circumstances, the stand taken by the defendant in the appeal before the Supreme Court would indicate that he is not very keen on getting the property assigned in his favour. He approached the Supreme Court when this Court remanded the case to the trial court for fresh disposal. The contention of the plaintiff before the Supreme Court A.S. NO. 78 OF 1994 :: 13 :: was that even if a decree for specific performance could not be granted, a money decree in the alternative was fully justified. It was submitted by the plaintiff before the Supreme Court that in any case a decree for money could be granted. Taking into account all these facts and circumstances, I am of the view that the decree passed by the court below is liable to be confirmed. 11. The judgment and decree passed by the court below in O.S.No.518 of 1989 is confirmed and the Appeal Suit is dismissed; however, no order as to costs. Before concluding, I would like to notice a very serious situation as available in this case. The cross examination of PWs.2 and 3 and the deposition of DWs.1 to 5 are not readable. Apparently, the papers containing these depositions have into contact with water. I have perused the depositions of these witnesses from the copies available with the learned counsel for the appellant, for the purpose of considering the evidence. The trial court shall look into the matter and shall take appropriate measures to avoid recurrence of such events. (K.T.SANKARAN) Judge ahz/ K.T.SANKARAN, J. ------------------------------------------- ------------------------------------------- A.S.NO. 78 OF 1994 JUDGMENT 29th January, 2008 -------------------------------------------