IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN WEDNESDAY, THE 13TH OCTOBER 2010 / 21ST ASWINA 1932 AS.No. 604 of 1993(C) ------------------------------ OS.302/1987 of ADDL.SUB COURT,PARAVUR .................... APPELLANT(S): /PLAINTIFF ----------------------------------------- *MRS.ROSY DEVASSY WIFE OF LATE K.C.DEVASSY KODIVELIL AGED 71,RESIDING AT 27, DAWN CHAKKALAKKAL ROAD, PERRUMANOOR, KOCHI 15 NOW AT KADAVANTHARA RROAD, ERNAKULAM (DIED). *ADDL. APPELLANTS 2 TO 8 IMPLEADED 2. JACOB DEVASSY , S/O. LATE K.C.DEVASSY, KODUVELIOPARAMBIL HOUSE, CHENNUR, VARRAPPUZHA. (DIED) 3. JOHN DEVASSY, S/O. LATE K.C.DEVASSY, KODUVELIPARAMBIL HOUSE, CHENNUR VARAPPUZHA. 4. ELIZABATH W/O. K.M.ROSY, AGED 61 RESIDING AT ''AANYA'', K.P.VALLON, KADAVANTHRA, COCHIN 20. 5. TONY DEVASSY, S/O. LATE K.C.DEVASSY, 13-C WHITE WATER APPARTMENTS THEVARA. 6. SHERLY, W/O. JOHNY, KOCHERY HOUSE, 'DEW DROP', SOUTH BRIDGE AVENU, PANAMPILLY NAGAR, ERNAKULAM. 7. ANNE, W/O. LAWRANCE D'CUNHA, ILLICKAL HOUSE,, NEAR DAR-UL-ISLAM SCHOOL, THRIKKARA. 8. ALICE, E/O. JOHNY, CHITTINAPPILLY HOUSE, CEEPEES INDUSTRIES, KARUKUTTY. A.S. NO.604/1993 *THE LEGAL HEIRS OF THE DECEASED APPELLANTS ARE IMPLEADED AS ADDL. APPELLANTS 2 TO 8 VIDE ORDER DTD. 16.1.06 IN IA. 155/2006. *ADDL. A9 TO A11 IMPLEADED. 9. JAY DEVASSY, S/O. JACOB DEVASSY, KODUVELIPARAMBIL HOUSE, CHENNUR, VARAPUZHA. 10. JEEVAN DEVASSY S/O. JACOB DEVASSY, KODUVELIPARAMBIL HOUSE, CHENNUR, VARAPPUZHA. 11. JAYAN DEVASSY S/O. JACOB DEVASSY, KODUVELIPARAMBIL HOUSE, CHENNUR, VARAPPUZHA. *THE LEGAL HEIRS OF DECEASED ADDL. APPELLANTS NO.2 ARE IMPLEADED AS ADDL. APPELLANTS 9 TO 11 VIDE ORDER DTD. 26.6.09 IN IA. 1976/09. BY ADV. SRI.S.SREEKUMAR SRI.SUNIL THOMAS SRI.JOJI SUNIL SRI.S.SREEKUMAR RESPONDENT(S): /DEFENDANTS ------------------------------------------------- 1. M/S. STATE BANK OF TRAVANCORE, TRIVANDRUM, REP.BY ITS GENERAL MANAGER AND MANAGING DIRECTOR, HEAD OFFICE, THIRUVANANTHAPURAM. 2. STATE BANK OF TRAVANCORE ALUVA BRANCH, POST BOX NO.3 CATHOLIC CENTRE, RAILWAY STATION ROAD, ALUVA 683 101. 3. R.GNANA SOUNDARI AMMAL WIFE OF A.RAJA DURAI NADAR, AGED ABOUT 60, RESIDING AT NORTH CAR STREET, SIVAKASI TOWN, RAMANAD DISTRICT, TAMIL NADU. R2 BY SRI.K.C.JOHN, SENIOR ADVOCATE, R2 BY ADV. SRI.K.K.JOHN R3&R7 BY SRI.O.V.RADHAKRISHNAN, SENIOR ADVOCATE R4 BY SRI.T.KRISHNAN UNNI, SENIOR ADVOCAT THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 13/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss THOTTATHIL B.RADHAKRISHNAN & S.S.SATHEESACHANDRAN, JJ. ------------------------------------------- A.S.No.604 OF 1993 ------------------------------------------- Dated this the 13th day of October, 2010 JUDGMENT Thottathil B.Radhakrishnan, J. 1. This appeal is by the plaintiff in a suit for specific performance of contract. Plaintiff’s case: 2. The plaintiff is the widow of late K.C.Devassy who mortgaged the plaint schedule property to the Indian Insurance and Banking Corporation to secure repayment of a loan. That creditor got a decree and purchased the suit property in court auction in O.S. No.54 of 1124 M.E. Later, it assigned the property to the Travancore Forward Bank Ltd, which was later amalgamated with the first defendant State Bank of Travancore, which has a branch in Alwaye, arrayed as the second defendant. Stating that she has sentimental attachment to the property lost by her husband AS.604/93 2 in court auction, the plaintiff approached the second defendant with an offer to purchase the property for a consideration of Rs.2000/- per cent. According to the plaintiff, though defendants 1 and 2 accepted that offer and there is a concluded contract for sale, under which an amount of Rs.1 lakh was received as advance, they failed to satisfy her about the exact extent of the land and also the encumbrances and liabilities thereon in the form of leases, kudikidappu rights etc and therefore, she is entitled to specific performance of the agreement for sale. Hence she sought that defendants 1 and 2 be directed to ascertain the actual extent and to furnish all the relevant title deeds and execute the sale deed on receiving the consideration at the rate of Rs.2000/- per cent for the actual extent seen on measurement. The defence: 3. In this appeal we are not concerned with the defence offered, except by defendants 1 and 2, who, inter alia, AS.604/93 3 challenged the maintainability of the suit and contended that the initial offer of the plaintiff by sending a petition to the Chairman of the first defendant bank on 18.3.1985, through the second defendant branch, requesting that the properties may be conveyed to her children, was made by her being well aware that a match factory occupies a part of the land in question under a registered rent deed of 1958 and that there are three Kudikidappukars; that the plaintiff, by later communication, agreed to purchase the property in "as is where is in condition"; that there is no agreement to measure out the property and that the sale price was fixed at Rs.4,40,000/- and the second defendant had required the plaintiff on 23.2.1986 to deposit Rs.4,40,000/- towards the full value of the property; that the plaintiff had, by letter dated 19.3.1986, requested for three months time to remit that amount and even in that letter she made no grievance, nor stated any condition contradicting the direction of the bank to pay such amount; that on 7.4.1986, the plaintiff deposited Rs.1 lakh towards AS.604/93 4 purchase price and requested the second defendant to provide her with the copies of the title deeds, lease deed and other documents and requested for three months to pay the balance; that since the plaintiff repeatedly failed to make such payment, the second defendant ultimately, on 19.3.1987, demanded the plaintiff to make the payment on or before 31.3.1987 and since the plaintiff did not remit the balance, instead, as per letter dated 8.6.1987, raised untenable contentions and wanted to have the purchase price fixed on the basis of actual measurement, the second defendant sent a reply on 1.9.1987 repudiating the allegations, cancelling the agreement on account of the non-performance by the plaintiff and also returning therewith, the amount of Rs.1 lakh deposited with the second defendant; however that, the plaintiff returned that cheque with a covering letter dated 7.9.1987. Defendants 1 and 2 contended that the agreement between the parties was for the sale of the property in "as is where is in condition" and the plaintiff is not entitled to get the AS.604/93 5 property measured out and have the consideration fixed on the basis of the actual extent available on measurement and that the plaintiff had committed breach and is not entitled to specific performance of the contract and that she has not come to court with clean hands. Findings of trial court: 4. The court below held that though no specific date was fixed for performance of the contract between the parties and time was not the essence of the contract, the plaintiff was not prepared to stand by the agreed term to purchase the property in "as is where is in condition"; that the plaintiff committed breach of contract and that the cancellation of the contract was wholly justified. It was further held that even at the end of trial, the plaintiff is found to be not ready and willing to perform her part of the agreement. The suit was accordingly dismissed with costs of defendants 1 and 2. AS.604/93 6 Arguments for the appellant: 5. In support of this appeal, Adv.S.Sreekumar, the learned counsel for the appellant, argued that the decree and judgment of the court below is contrary to law, wrong on facts and is the result of mis-appreciation of evidence and erroneous reasoning. Among other things, it is argued that the plaintiff was not in possession of the property and cannot, therefore, be attributed with knowledge of the exact extent and nature of the property, as also the liabilities and encumbrances in the form of leases, possession by Kudikidappukars and the actual extent of land covered under such holdings. It is further argued that the contract between the parties was for sale of the available extent of land for a consideration fixed at the rate of Rs.2000/- per cent and the finding to the contrary, particularly the view that the total consideration was fixed and the agreement was for purchase in “as is where is in condition” is contrary to evidence. It is also argued that the finding that the plaintiff was not ready and willing to AS.604/93 7 perform her part of the contract and the reasons stated for such finding are wrong. Adverting to the evidence on record, the learned counsel very persuasively pointed out that being a public authority, the bank ought to have given due weightage to the sentimental attachment that the plaintiff has to the property that earlier belonged to her late husband and that the court below ought to have held that the plaintiff’s offer which was accepted by the bank was for purchase of the available extent for consideration at the rate of Rs.2000/- per cent, particularly when the land included marshy patches and areas occupied by a match factory, as also parcels held by three Kudikidappukars. The learned counsel argued that the court below ought to have exercised the discretion by directing defendants 1 and 2 to perform the contract by receiving the consideration at the rate of Rs.2000/- per cent for the actual extent available on measurement and after satisfying the plaintiff of the encumbrances and liabilities, also by handing over the documents relating to those liabilities. AS.604/93 8 Arguments for respondents 1 and 2: 6. Sr.Adv.T.Krishnan Unni, assisted by Adv.K.K.John, argued on behalf of respondents 1 and 2 that the unquestionable chronological sequence of events proved by the documentary evidence would categorically show that the plaintiff had agreed to purchase the entire property in “as is where is in condition” and that the consensus between the parties was for such a sale. It is pointed out that there was no occasion for defendants 1 and 2 to ask for an advance and the remittance of Rs.1 lakh made by the plaintiff was not at the request of the bank but on her own volition and in support of her request for more time to pay the balance amount of Rs.3.40 lakhs. It is argued that the consideration was not fixed by agreeing that the extent would be measured out and that the plaintiff need pay only at the rate of Rs.2000/- per cent for the actual extent available. The payment of price was to be for the entire property as covered by the document in favour of the bank, AS.604/93 9 it is argued. The learned counsel further pointed out that there is nothing on record which could disturb the findings of the court below that the plaintiff was not ready and willing to perform her part of the contract in terms of the agreement between the parties and that this lack of readiness and willingness was evident even at the conclusion of the trial. It is further argued that at this distance of time, in 2010, judicial discretion may not be exercised to enforce the agreement even if it is found to be as pleaded by the plaintiff since it would be wholly inequitable to compel the first defendant, a statutory bank dealing with public funds, to part with valuable assets for a sum that would be paltry as of now. It is pointed out that this court had required the bank to state the price at which the plaintiff could purchase the property now and the bank had filed a statement that the minimum reserve price that the appropriate authority of the bank has fixed for the sale of the property in question, as of now, is Rs.9 crores. AS.604/93 10 Consideration by Court: 7. On 18.3.1985, the plaintiff wrote Ext.B1 (A6) letter to the Chairman of the Board of Directors of the first defendant Bank introducing herself as the widow of late K.C.Devassy and making reference to the transaction under which the property of nearly 3 acres offered as security, ultimately reached the hands of the first defendant bank. She stated that all those things happened 40 years ago and with the passage of time, her children have grown up and have started earning and they have the intention and desire to clear off the entire dues of their late father. She stated that she made enquiries about the present position of the property and it is understood that the properties are lying idle and the bank is not doing anything towards the improvement of the property. She further stated that as the debts in favour of the bank are time barred, she believes that the properties sold out (and) in the possession of the bank cannot be recovered through any legal means and AS.604/93 11 that her children have the desire to re-establish the industry of their father after clearing all the dues, intents, court costs etc. which were incurred by the bank. Accordingly, she requested that her children may be allowed to pay off the entire debts due to the Bank in satisfaction and to re-convey "our lands in Sy. No. 308/4 of Alwaye Village” in favour of her seven children, after receiving all the dues to the bank. 8. After discussions at the level of the second defendant branch following Ext.B2, and in the light of Ext.B3 (A7) issued from the branch to the effect that the property can be disposed off to the plaintiff at the current market value, the plaintiff wrote Ext.B4 (A8) expressing her willingness to purchase back the land and requesting that the value of the land may be decided taking also into consideration the facts enumerated by her in that letter. She stated that about 50% of the area of the land extending more than two acres “is now occupied by a match factory and two tenants” AS.604/93 12 and that her children would not be able to come into occupation of that area in the near future. She also pointed out that the rent of the match factory is very meagre and is also in default for years. She stated that the only area which her children can readily occupy after the purchase will be the front portion of the plot, which is low-lying and marshy and was once paddy field. She projected that huge amounts have to be spent for filling the marshy area with gravel and soil to make it fit for any house construction. She accordingly requested the bank to fix the market value for the land by giving a considerable concession realising all the aforesaid facts, to spare her from a possible agony over her effort in getting back the land, which she hopes for, owing to her family’s deep-rooted sentimental attachment to that. She concluded by saying that she sincerely hopes to hear from the bank as early as possible about the market value that the bank would fix for the land with due concessions. We may specifically note that the plaintiff's request was not to exclude the portion of the land AS.604/93 13 occupied by the match factory by the tenants. All that she wanted was that the market value for the land be fixed taking all such factors also into consideration. Obviously therefore, it was not her offer to purchase only the land excluding those with the tenants and the portion occupied by the match factory. She proposed to buy the entire parcel on a price to be fixed taking all the facts projected by her also into consideration. 9. Making reference to the aforesaid Ext.B4, Ext.B5 letter was issued from the second defendant branch to the plaintiff on 19.8.1995, requesting her to send her quotations to the bank showing the maximum price she offers for the property in as is where is in condition. In answer thereto, the plaintiff wrote Ext.B6 to the second defendant branch on 16.12.1985 reiterating her descriptions of the match factory, the presence of tenants and the requirement of huge investment to convert the remaining marshy land to make it habitable. Ultimately, the plaintiff stated in that AS.604/93 14 letter that “taking into consideration all these liabilities and the huge expenditure to develop the land, I offer a price of Rs.2000/- for a cent to the above land, as my family's sentimental attachment to the plot is so deep”. She also offered that if the price quoted by her is not acceptable to the bank, she is prepared to purchase the land at a price, which may be fixed by the Revenue authorities. 10.Thereupon, Ext.B7 was issued by the second defendant branch requiring the petitioner to state whether she is interested in purchasing the whole property (including the portion occupied by the match factory) or the other piece of land measuring about one acre and sixteen cents. She was also required to state whether she is prepared to purchase the land in “as is where is in condition”. The second defendant branch also stated that the matter will be taken up with the head office of the first defendant bank on getting clarification on the aforesaid points. In answer to AS.604/93 15 that, the plaintiff issued Ext.B8 on 20.1.1986 seeking excuse for the delayed reply and stating as follows: “.............. I am prepared in purchasing the whole property including the portion occupied by Alwaye Match Works. I also inform you that I am prepared to purchase the land in as-is-where-is condition with two other tenants in the plot. Expressing my heartfelt gratitude for very kindly considering my appeal, I request you to take an early decision on the issue and help me to fulfill a long cherished dream of my family.” (underlined to emphasise) 11.Making reference to her aforesaid offer dated 20.1.1986, the second defendant branch issued Ext.B9 requiring the plaintiff to remit the agreed sale consideration of Rs.4.4 lakhs in full, i.e. at Rs.2000/- per cent for 2.2 acres of land which was the extent available as per the bank’s records. She was intimated that on receipt of the amount the branch will place the plaintiff's offer to the Executive Committee in its next meeting and in case the executive committee does not accept the recommendations of the branch, the amount will be refunded to the plaintiff. It was specifically stated AS.604/93 16 that “If the above condition is acceptable to you, please remit of the amount of Rs.4.4 lacs on or before 15 th March 1986. Please treat the matter as most urgent”. 12.It appears that in the meanwhile, the offer of the plaintiff also gained the attention of the Executive Committee of the first defendant bank and thereupon the second defendant issued Ext.B10 (A9) on 12.3.1986 to the plaintiff stating that the offer in her Ext.B8 letter dated 20.1.1986, for purchasing 2.2 acres of land at Rs.2000/- per cent has been approved by the Executive Committee of the first defendant bank. She was thereby requested to remit the amount of Rs.4.4 lakhs, not later than 20.3.1986 and to treat the matter as most urgent. 13.Responding to the above, the plaintiff issued Ext.B11 (A11) letter dated 19.3.1986, thanking the bank for taking a favourable decision on her offer to purchase the land and requesting for some more time to remit the amount as she AS.604/93 17 has to raise Rs.4.4 lakhs. She sought for three months’ time. Therefore, there was a clear and unambiguous contract between the parties as to the total consideration to be paid and as to the identity of the property in “as is where is in” condition as evidenced by Ext.B8. 14.The aforesaid materials would clinchingly show that the plaintiff approached the bank to retrieve the land that her husband had lost in the court sale and there was no mistake of fact between the parties as to the identity of the property which the plaintiff offered to purchase. What she wanted, to put it in her words, was to obtain re-conveyance of whatever her husband had mortgaged under the transaction that ultimately led to the court auction and the subsequent assignment in favour of the predecessor of the second respondent bank. In fact, even the first representation made by her to defendants 1 and 2 through Ext.B1 (A6) was that her children have the intention and desire to clear off the entire dues of their late father and AS.604/93 18 get back the property. The correspondence would clearly show that the plaintiff was well aware of the fact that at one part of the land, there was a match factory covered by a registered lease deed and certain parcels were in the possession of Kudikidappukars. She wanted the price to be fixed taking into consideration all those liabilities. She was also aware that a part of the land was marshy and had to be filled up to be put to use to her convenience. When Ext.B7 was issued to her requiring her to express whether she intends to purchase the entire land and also take it in 'as is where is in condition', she issued Ext.B8 expressing that she intends to purchase the entire land, including the piece on which the match factory stands and also that she would take the property in as is where is in condition. This is the clear expression in Ext.B8 and is inexcusably, of the essence of the contract between the parties. The consensus regarding the identity of the property was so certain that it did not survive for any further bargain. It was accordingly that the bank accepted the plaintiffs offer to purchase the AS.604/93 19 entire property at the rate of Rs.2000/- per cent. The initial categoric offer, including the opening up of the negotiations by the plaintiff, was that she wanted to get back the entire property originally mortgaged by her late husband. Therefore, the bank had no reason to doubt her intentions and the bank offered to sell the entire property by fixing the price for the land in terms of the documents available with the bank, by determining the total consideration at Rs.4,40,000/-. The transaction evidenced by the documents would categorically show that the agreement was one for sale for a consolidated consideration of Rs.4.4 lakhs and there was no agreement between the parties that the price for the sale would be fixed on the basis of the extent of land actually available on measurement. 15.However, on 7.4.1986, the plaintiff issued Ext.B12 requesting the second defendant branch to provide her with copies of the original document in the name of her late AS.604/93 20 husband, rent deed of the match factory, judgment in O.S.54/1124, encumbrance receipts, village land tax receipts and a copy of the Bank's Board Resolution. She also stated that she is remitting Rs.1 lakh with the bank being an advance for the release of the land. There is no shred of evidence in support of the plaintiff's plea that the bank had received the amount of Rs.1 lakh as advance for the transaction of sale. There is no material on record to evidence that the payment of Rs.1 lakh was as advance and that such payment of advance was part of the bargain between the parties. In fact, there is no evidence at all to show that the bank had, at any time, demanded the plaintiff to make any such payment of Rs.1 lakh. Such amount paid by her, as stated by her in Ext.B12, cannot be treated as payment of any amount as advance on the basis of any consensus between the parties in that regard so as to form the consideration for the agreement for sale. The bargain between the parties did not include any condition that the bank would receive any part consideration. The repeated AS.604/93 21 correspondence by the bank, in that regard, would clearly show that it had always insisted that the plaintiff shall make the entire payment of Rs.4,40,000/- in one go and that the question of sale would arise only on payment of such amount. 16.On 17.6.1986, Ext.B13 (A17) letter shown to be signed by K.M.Roy on behalf of the plaintiff was sent to the second defendant branch reiterating that three months’ time more may be granted for the full remittance of the amount. Plaintiff also reiterated the request to provide her with the copies of various documents, deed and court judgments. In that