IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH MONDAY, THE 15TH MARCH 2010 / 24TH PHALGUNA 1931 RSA.NO. 289 OF 2010() --------------------- AS.228/2001 OF ADDL.DISTRICT COURT, FAST TRACK (ADHOC), MAVELIKKARA OS.306/1996 OF MUNSIFF COURT,KAYAMKULAM .................... APPELLANT – RESPONDENT – PLAINTIFF: ----------------------------- SAJI, AGED 36 YEARS S/O.VASUDEVAN PILLAI, ARANTHALIL VEEDU PERINGALA MURI, KAYAMKULAM VILLAGE. BY ADV. SRI.MILLU DANDAPANI RESPONDENT(S) – APPELLANTS – DEFENDANTS : --------------- 1. VELUTHAKUNJU RAGHAVAN, AGED 68 EKANOADATGY VADAKKATHIL, PERINGALA MURI KAYAMKULAM VILLAGE. 2. LEKSHMIKUTTY, AGED 56 W/O.RAGHAVAN, DO..DO.. THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 15/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = R.S.A. NO.289 of 2010 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 15th day of March, 2010 J U D G M E N T --------------------- Second Appeal arises from judgment and decree of learned Additional District Judge (Fast Tack – Ad hoc), Mavelikkara in A.S.No.228 of 2001 modifying the decree granted by the learned Munsiff, Kayamkulam in O.S.No.306 of 1996 in favour of the appellant/plaintiff. He claimed that himself and respondents, husband and wife had entered into Ext.A1 agreement dated 16.2.1996 for sale of the suit property, 24 cents belonging to respondent Nos.1 and 2 in equal proportion to him for a total consideration of Rs.60,000/- paying Rs.45,000/- by way of advance at the time of the agreement itself and providing that the sale deed will be executed in favour of the appellant within five months from the date of agreement. Since respondents did not perform their part of the contract, appellant issued notice dated 3.7.1996 demanding specific performance of Ext.A1, agreement. To that notice respondents sent Ext.A2, reply stating that there was no such agreement for sale and instead respondents had borrowed R.S.A. No.289 of 2010 -: 2 :- certain amounts from the appellant on various occasions and on those occasions appellant had obtained signed blank stamp papers as security. One of those stamp papers has been used to create Ext.A1 as an agreement for sale, fraudulently. Respondents resisted the suit on the very same contentions. It is also their contention that even after Ext.A1, respondent Nos.1 and 2 spent around Rs.1,50,000/- for reconstruction of the old structure in the suit property and a lean attached to it spending Rs.15,000/- and are residing in the house. Trial court found in favour of due execution of Ext.A1 and granted decree for specific performance of the agreement. Respondents were directed to receive the balance amount of Rs.15,000/- and execute the sale deed in favour of the appellant. Aggrieved, respondents took up the matter in appeal. First appellate court agreed with the finding of the trial court as to the execution of Ext.A1 but exercised the discretion under Section 20 of the Specific Relief Act (for short, “the Act”) in favour of the respondents and accordingly the decree was modified as one for refund of the advance sum of Rs.45,000/- . Appellant is aggrieved and has come up in Second Appeal urging by way of substantial question of law whether first appellate court was justified in R.S.A. No.289 of 2010 -: 3 :- reversing the decree for specific performance on the facts and circumstances brought out in the case. Learned Senior Advocate has placed reliance on the decisions of the Apex Court in S.V.R. Mudaliar v. Rajabu F.Buhari (AIR 1995 SC 1607) and P.S.Ranakrishna Reddy v. M.K. Bhagyalakshmi (2007) 10 SCC 233) to contend that mere fact that there was a hike in land value by itself is not sufficient to exercise the discretion in favour of not granting specific performance. Learned Senior Advocate also submitted that the suit property was purchased by the respondents in 1978 and 1987 and even the consideration shown in Exts.A5 and A6, assignment deeds of the respondents is far less than the consideration stated in th Ext.A1, assignment deed executed in the year 1996. Learned Senior Advocate contends that first appellate court in the above circumstances was not justified in exercising the discretionary jurisdiction in favour of the respondents. 2. There could be no doubt that a mere hike in the land value is not a ground to refuse specific performance but decisions also say that if vendor was not aware of the potential value of the property at the time of execution that is a ground for refusing specific performance of the agreement. Jurisdiction to decree R.S.A. No.289 of 2010 -: 4 :- specific performance is discretionary and the court is not bound to grant it merely because it is lawful to do so (See Narayana Pillai v. Kunju Kurup – 1989 (2) KLT 379). In this case first appellate court observed and rightly too as evidence disclosed that suit property is situated within Kayamkulam Municipal limits. The sale consideration stated in Ext.A1 is only Rs.60,000/-. It is also to be borne in mind that so far as the grounds to exercise discretion not to grant specific performance under Sec.20 of the Act are not exhaustive but are only illustrative (See Yohannan v. Harikrishnan (1991 [2] KLT SN 69). As such there could be circumstances outside the illustrations under Sec.20 of the Act which could be taken by the courts as justifying the exercise of discretion in favour of the vendor. Here respondents have a case that Ext.A1 was executed merely as a security for repayment of the loans they had availed from the appellant on various occasions. No doubt courts below found against that contention and held that there was due execution of the agreement for sale but that also is not by itself a sufficient ground to grant specific performance in favour of the appellant. Evidence of respondent No.2 as D.W.1 is that even after Ext.A1, respondents have constructed or R.S.A. No.289 of 2010 -: 5 :- reconstructed the house in the suit property by spending about Rs.1,50,000/- and also a lean to spending Rs.15,000/- but respondents were not able to prove the same by documentary evidence. But P.W.2, attester in Ext.A1 who gave evidence in favour of the appellant has stated that respondents had invited him for the house-warming ceremony (after Ext.A1). It was suggested to P.W.2 (that even after Ext.A1) respondents had constructed or reconstructed their house in the suit property and he was invited for the house-warming ceremony. P.W.2 was not able to deny the suggestion but only stated that since he was pre-occupied he could not attend the function. Thus notwithstanding that respondents were not able to adduce documentary evidence to show that they had constructed or reconstructed the house by spending substantial amount I find no reason to disbelieve the evidence of D.W.1 in that line in view of the evidence of given by P.W2. Thus it has come in evidence that even after Ext.A1 respondents had spent money for either construction or reconstruction of the house situated in the suit property. Certainly they have spent the money for constructing or reconstructing the house in the suit property and celebrated house-warming ceremony with the intention of residing R.S.A. No.289 of 2010 -: 6 :- in the house notwithstanding Ext.A1. Appellant has no case that under terms of the agreement respondent were to construct/reconstruct the building. That means, enforcement of the contract gives the appellant an unfair advantage over the respondents. I am not at the question at this stage whether courts below were right in holding in favour of due execution of Ext.A1 and whether contention of respondents that Ext.A1 was executed merely as a security for repayment of the loans they had availed is correct or not. 3. Having regard to the facts of the case and evidence of D.W.1 and P.W.2 I am inclined to think that first appellate court was right in exercising the discretion not to grant specific performance. I must also bear in mind that the suit property is the only property belonging to the respondents which P.W.2 was not able to deny and he was candid in stating that to his knowledge suit property is the only property belonging to the respondents. In these circumstances first appellate court was legally and factually justified in refusing to grant specific performance and granting decree for refund of the advance of Rs.45,000/- with interest. No substantial question of law is involved requiring admission of this Second Appeal. R.S.A. No.289 of 2010 -: 7 :- Second Appeal is dismissed in limine. Interlocutory Application Nos.720 and 721 of 2010 shall stand dismissed. THOMAS P.JOSEPH, JUDGE. vsv