IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 3RD APRIL 2009 / 13TH CHAITHRA 1931 AS.No. 556 of 1997() -------------------- OS.91/1994 of I ADDL.SUB COURT, KOZHIKODE .................... APPELLANT(S)/PLAINTIFF: -------------- VENGALATHU VEETTIL APPU, S/O.VADAKKEDATH ANDY, KANNANKAVU AMSOM AND DESOM OF KOZHIKODE TALUK. BY ADV. SRI.N.JAMES KOSHY SRI T.SANJAY RESPONDENT(S)/DEFENDANTS: --------------- 1. P.KRISHNA KUMAR, S/O.PULIKKAL SEKHARAN, RESIDING AT VIRUTHISSERI VAYAL, PUTHIYANGADI AMSOM AND DESOM OF KOZHIKODE TALUK. 2. P.VIJAYAKUMARI, D/O.PULIKKAL SEKHARAN OF -DO- -DO- ADV. SRI.P.R.VENKITESH THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 03/04/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P. JOSEPH, J. -------------------------------------- A.S.No.556 of 1997 -------------------------------------- Dated this the 3rd day of April, 2009. JUDGMENT Basing on Ext.A3, a registered agreement for sale dated 27.3.1993 appellant sued the respondents for a decree for specific performance for sale of the suit property – five (5) cents and a concrete building, with an alternative prayer for recovery of the sum of Rs.50,000/- said to be paid as advance with interest at the rate of 18% per annum. Learned Sub Judge granted the alternative relief. Appellant is aggrieved. 2. The case of the appellant in short is that he entered into an agreement (Ext.A3) with the respondents to purchase the suit property and the building thereon for a total consideration of Rs.1 lakh, paid Rs.50,000/- on the date of agreement itself as advance. The agreement provided that respondents shall execute the sale deed in his favour within six months from the date of Ext.A3. Appellant was always ready and willing to perform his part of the contract. Since respondents were not in a mood to execute the sale deed appellant issued notice dated 30.9.1993 demanding the respondents to receive the balance sale consideration and execute sale deed. Respondents replied by Ext.A2, dated 18.10.1993 wherein they claimed that there was no agreement for sale of the property, nor had they received any advance sale consideration but it is actually a loan transaction. In connection with the marriage of the sister of AS No.556/1997 2 respondent No.1, he had to incur liability and to discharge that liability, he wanted a loan of Rs.50,000/-. Respondent No.1 approached the appellant who offered to lend Rs.50,000/- with liability to pay interest but on condition that an agreement like Ext.A3 was executed as security for repayment of the loan. Accordingly Ext.A3, agreement was executed by the respondents. Respondents also stated in Ext.A2, reply their willingness to repay the said sum of Rs.50,000/- with interest within three months from that day. Appellant was not satisfied with the reply and laid the suit. Respondents raised the very same contentions in their written statement. Appellant gave evidence as PW1. Ext.A4 is the prior document of title of the respondents in respect of the suit property which, it is not disputed before me was given to the appellant at the time of Ext.A3. PW2 is one of the attestors in Ext.A3. He claimed to have negotiated the sale of the property and fixed the consideration at Rs.1 lakh. Respondent No.1 gave contra evidence as DW1. DW2 is another attestor in Ext.A3. He claimed that there was no agreement for sale of the property but it was a loan transaction. Learned Sub Judge accepted the evidence of PWs 1 and 2. So far as evidence of DW2 was concerned, learned Sub Judge observed that in so far as he has attested Ext.A3 as a witness, he cannot turn round and say that it was a loan transaction. There was however, no definite finding by the learned Sub Judge as to whether Ext.A3 was executed with the intention of sale of the suit property in favour of the appellant. Learned Sub Judge observed that appellant has asked for an alternative relief of recovery of advance amount with interest AS No.556/1997 3 and hence court is justified in granting that alternative relief. Relying on the decision of the Supreme Court in S.Rangaraju Naidu v. S.Thiruvarakkarasu (AIR 1995 SC 1769), learned Sub Judge granted decree for alternative relief. 3. Learned counsel for appellant contended that the court has not stated any reason why the main relief sought for by the appellant was disallowed and instead, alternative relief was granted. According to the learned counsel, the mere fact that an alternative relief was claimed or, the agreement itself provided for payment of compensation for loss if any caused to the appellant are not sufficient to disallow the prayer for specific performance. Reliance is placed on the decisions in Kunjumohammed A.C. v. Goverdhan Hathibal Company ( 1956 KLT 20), Pirthi v. Jati Ram ((1996) 5 SCC 457) and Ameena Ummal v. Narayana Pillai (1989 (1) KLT SN 45 – Case No.71) 4. Section 20 of the Specific Relief Act (for short, “the Act”) states that the jurisdiction of the court to grant a decree for specific performance is discretionary and that the court is not bound to grant such relief merely because it is lawful to do so; but ofcourse the discretion of the court is not arbitrary but sound and reasonable to be guided by judicial principles and capable of correction by a court of appeal. Sub-section (2) states which all circumstances could be taken for the purpose of exercising the discretion. It has been held time and again by binding authorities that the court has the discretionary power under Section 20 of the Act to grant or refuse specific AS No.556/1997 4 performance. In Ameena Ummal’s case, a Division Bench of this Court held that merely because of the agreement contained a clause for payment of damages in the event of breach of contract, a decree for specific performance cannot be refused. It is also held that as the ordinary rule is that specific performance should be granted it can be denied only when equitable considerations warrant its refusal and the circumstances show that damages would constitute an adequate relief. In other words, this court was holding that when there are equitable considerations it would warrant refusal of the prayer for specific performance. The decisions of the Apex Court relied by the learned counsel also have taken that view. Pirthi’s case considered when a decree for compensation instead a decree for specific performance would be not proper. That was a case where after the suit for specific performance for agreement was filed, respondents in that case purchased the land and came into possession of the same. The Apex Court found that respondents were not bona fide purchasers and that the decree granted by the courts below for specific performance and rejecting the alternative relief of compensation was proper. 5. I shall consider the contentions raised by the learned counsel based on the principles stated in the decisions referred supra. It is true, learned Sub Judge has not dealt with the circumstances which persuaded him to grant the alternative relief. But, this being a first appeal, appellate court is entitled to consider the evidence and pass appropriate orders which the trial court ought to and should have passed. Therefore I believe, I am justified in AS No.556/1997 5 going into the circumstances to consider whether the learned Sub Judge was justified in refusing the prayer for specific performance. 6. One thing has to be looked into is that even though according to the appellant the sale consideration was fixed at Rs.1 lakh and he paid Rs.50,000/- and according to the appellant he was always ready and willing to pay the balance amount and take the sale deed, a period of six months was provided for execution of sale deed. Appellant when examined as PW1 admitted that on the part of the respondents, they need only get an encumbrance certificate and execute the sale deed. Going by Ext.A3, it was for the appellant to get the sale deed executed at his expense. It is the case of appellant that he was always possessed of the necessary funds to pay the balance sum of Rs.50,000/- and even produced Ext.A5, pass book to show that he had the necessary funds with him. Certainly one can reasonably raise the question why if the above was the situation, a period of six months was provided for execution of the sale deed. When confronted with this question, learned counsel for appellant would explain that it may probably be because respondents had to find an alternative accommodation for their residence. I do not find any such explanation from the appellant. On the other hand when it was suggested to the appellant that the suit property is the only property and house belonging to the respondents, he was pleading ignorance. When the same question was put to PW2, appellant’s witness, he stated that respondent No.1 has another property but he is not aware whether respondents have any other house. Respondent AS No.556/1997 6 No.1 has given evidence as DW1 that the suit property is the only property and house belonging to himself and respondent No.2. That evidence of DW1 is not successfully challenged in cross examination and the ignorance pleaded by the appellant when examined as PW1 on that and the statement of PW2 that he is not aware that respondents have any other house than the one situated in the suit property persuade me to think that respondent No.1 was truthful in his statement that himself and respondent No.2 have no other property or house. 7. According to the respondents and as spoken by DW1, respondent No.1 had to incur a liability of about Rs.50,000/- in connection with the marriage of his sister and reconstruction of the house which were during 1990-1992. PW1 pleaded ignorance about the marriage of the sister of respondent No.1. He however, said that the front portion of the house situated in the suit property appeared to be new. PW2 has admitted that atleast the front portion of the house was reconstructed in connection with the marriage of the sister of respondent No.1 which, as per his information during 1990. There is thus some evidence to show that the house was constructed or reconstructed or atleast the front portion of that house was reconstructed in connection with the marriage of the sister of respondent No.1 during 1990-1992. If that be so, I do not find reason to disbelieve the version of respondents that in connection with that respondent No.1 had to incur financial liability. DW2 who is an attestor in Ext.A3 has also given evidence regarding the circumstances under which Ext.A3 was executed. Learned Sub Judge ignored his evidence as he attested Ext.A3 AS No.556/1997 7 but, it is open to the parties to prove their real intention notwithstanding the execution of the agreement. According to the respondents the price of the property during the relevant time was anything not less than Rs.40,000/- per cent. It is so stated by DW1. PW2 stated that the price of the suit property was much less since the railway track passed by near the suit property. Going by the version of PW1, though Ext.A3 was executed on 27.3.1993 he saw the suit property for the first time on 20.3.1993, ie., just seven days before Ext.A3. PW2 who claimed to have negotiated the matter with the respondents would say that he is not a broker by profession but he would admit that he has attested certain other document also and in connection with one of which, he was examined as a witness in court. He even claimed that he had taken a power of attorney from the appellant (PW1) but there was no occasion to use that power of attorney. It is not as if respondents came with an altogether false or untenable contention, that was found against by the learned Sub Judge and in spite of that, discretion was exercised in their favour. Ext.A2 shows that even at the earliest opportunity, respondents stated the circumstances under which the agreement happened to be executed and even expressed their willingness to return the sum of Rs.50,000/- with interest, given three months time. It is not shown that compensation in terms of money will not be an adequate relief for the appellant. 8. Now the question is whether for the mere reason that learned Sub Judge has not referred to all the circumstances emerging in the case, this Court should interfere with the discretion exercised by the learned Sub AS No.556/1997 8 Judge. I stated that this being a first appeal, this court is entitled to re- appreciate the evidence and come to its own conclusion and even pass such orders the trial court ought to have and should have passed. In the light of the materials available on record I am inclined to think that learned Sub Judge has exercised the discretion correctly though, without stating all the above circumstances. I therefore, find no reason to interfere. This Appeal fails. It is dismissed. No costs. THOMAS P.JOSEPH, Judge. cks AS No.556/1997 9 Thomas P.Joseph, J. A.S.No.556 of 1997 JUDGMENT 3rd April, 2009.