Case: ABDULLAKOYA HAJI Vs. RUBIS THARAYIL

contend that the High Court also having taken note of the documents that were tendered in evidence has taken into consideration the fact that towards the sale consideration a sum of Rs. 75 Lakhs had been paid as advance and the plaintiff had also shown that they were ready with the further amount of Rs.75 lakhs which was to be paid on or before 15.10.2007. In that view, it is contended that the High Court had rightly taken note that the plaintiff had the capacity to arrange the financial resource and as such had decreed the suit. It is also his contention that in the final conclusion when out of the five properties the Item No. 3 and 4 properties were excluded since the right to transfer the minors property had not been established, the balance amount payable was much lesser being equivalent only to the value of the properties in suit Item Nos. 1, 2 and 5. The balance payable would amount to Rs. 52,34,700/- and in view of the judgment passed by the High Court the amount is also deposited on 08.11.2018. 22. The learned senior counsel for the appellants- defendants on the other hand would contend that the defendants were willing to transfer all the five Items of the property provided the plaintiffs were ready and willing and had paid the entire balance sale consideration for all the items of property. It is contended that there was no bar to transfer the minors right by the natural guardian and in any event when the plaintiffs have filed the suit seeking specific performance of the agreement in its entirety, in order to succeed they were required to establish their readiness and willingness in entirety and only thereafter any other consideration even to carve out certain properties would have arisen. The learned senior counsel for the appellant has relied on the decision of this Court in the case of N.P. Thirugnanam (dead) by L.Rs vs. Dr. R. Jagan Mohan Rao and Ors. (1995) 5 SCC 1150 wherein it is held that in the absence of showing continuous readiness and willingness on the part of the plaintiff, the relief of specific performance would not arise. 23. In the above background, we find that the consideration as made by the High Court does not indicate that the High Court has taken note of the evidence in the manner as has been analysed by the Trial Court. From the reasoning as extracted above the High Court has proceeded by indicating that the readiness includes the capacity to raise funds for purchasing the property. To that extent though the High Court was justified, the assessment of the evidence made does not indicate that there were sufficient documents to show that they had the capacity to raise the funds for the entire balance sale consideration. The error committed by the High Court is that it proceeded on the basis that the total consideration of the transaction is Rs. 1.5 crores of which Rs. 75 Lakhs was paid as advance and since there was an offer to pay the balance of Rs. 75 Lakhs on or before 15.10.2007 which was available in credit to their account as on 11.10.2007 the same was sufficient. Hence it concluded that it cannot be stated that the plaintiffs were incapable of raising the funds. From the discussion made by the Trial Court as also by us in the course of this judgment, it would indicate that in so far as the total sale consideration is concerned, even if the extent indicated as per the Court Commissioners report is taken, it would be the sum of Rs. 2,01,00,850/-. Therefore, the balance payable would be Rs. 1,26,00,850/-. Towards payment of such balance sale consideration though as on 15.10.2007 the sum of Rs. 75 Lakhs was shown to the credit, the availability of that amount subsequent to 08.11.2007 is not shown as the statement at Exhibit A5 is only for the periods 09.10.2007 to 08.11.2007. Hence, the said amount will have to be taken as being made available at one point in time by juggling the figures and was not shown available for payment at the relevant point when the suit was filed. Hence on exclusion of the same the remaining amount through Exhibit A11 to A13 would be in-sufficient to indicate that as on date of filing the suit they had the entire remaining balance sale consideration and were ready and willing to complete the transaction. In that circumstance, the deposit presently made after the judgment is rendered by the High Court to the reduced extent would not be of assistance as there would be change in the circumstances after more than a decade, as against what the position was in the year 2007. 24. In that circumstance, when not only the availability of fund was satisfactorily explained but in a circumstance where the first plaintiff had entered into an agreement dated 23.10.2007 in favour of Shri Ali Khan in respect of the very same properties even before securing the sale deed in their favour, the bonafides would also become relevant when the specific performance as an equitable relief is taken into consideration. In that view, the Trial Court while declining the relief of specific performance has appropriately granted the decree for realisation of the sum of Rs. 75 Lakhs with interest at 9% per annum. To that extent though the Trial Court was justified, we find it necessary to protect the interest of the plaintiffs to recover the said amount. In that view, it is necessary to direct the defendants to refund the amount to the plaintiffs within a time frame, failing which the amount is to be paid with the higher rate of interest. Further, charge is to be created over the suit schedule properties to ensure repayment of the amount. Subject to the above the impugned judgment dated 21.08.2018 in RFA No. 344/2011 is liable to be set aside. 25. In the result we pass the following, ORDER

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]11. In that background, in so far as the execution of the agreement dated 26.03.2007 and the payment of the advance amounting to Rs. 75 lakhs, there is no serious dispute. The requirement under the agreement was for the plaintiffs to pay a further sum of Rs. 75 lakhs on or before 15.10.200712. In that background, in so far as the payment of the advance amount of Rs. 75 lakhs though appears to be a substantial sum, the readiness and willingness of the plaintiffs with the balance sale consideration is to be taken note keeping in view that the balance sale consideration payable was also substantial. The second plaintiff examined himself as PW-1 by filing his affidavit through which he has reiterated the plaint averments13. Be that as it may, as rightly pointed out by the learned Senior Advocate appearing for the defendants, the depiction in the said endorsement about the production of the title deeds does not reflect the true state of affairs in as much as PW-1 in his cross- examination has admitted that prior to the execution of the agreement, the copies of the title deeds produced before the Court were shown to him and that he had entered into the agreement on being satisfied that the defendants have ownership and title to the suit property. Though the issue relating to the transfer of the rights of the minor had also arisen, the defendants were prepared to execute the sale deed through the natural guardian representing the interest of the minors. Though the said aspect was also one of the issues, considering the fact that the Trial Court and the High Court have arrived at divergent conclusion relating to the availability of the remaining sale consideration, examination of that issue would be appropriate as other issues would depend on that aspect15. It is in that back drop even if the lower sum of Rs. 1,02,60,850 (One Crore Two Lakhs Sixty Thousand Eight Hundred and Fifty only), is taken into consideration the availability of funds in that regard to pay balance sale consideration is to be examined. In that regard even though the document at Exhibit A5, the account extract of Axis Bank for the periods 09.10.2007 to 08.11.2007 is taken note, the same will at least indicate that the sum of Rs. 75 lakhs was available in the account as on 15.10.2007. Though the sum of Rs. 75 lakhs was shown in the account and even if the endorsement dated 14.10.2007 at the foot of the agreement is taken note, the said amount should be shown to have been available with the plaintiffs even subsequent to 08.11.2007, as also on the date when the demand was made by issue of legal notice and further when the suit was filed and specific performance was sought. In the absence of the same, a temporary arrangement made to have certain funds in the account on a relevant date alone cannot be considered as the financial resource being available to complete the transaction when in addition to the said amount, further sum was required. This is more so in a circumstance where in the instant facts the first plaintiff had entered into an agreement of sale dated 23.10.2007 (Exhibit X1) with one Shri Ali Khan during the subsistence of the suit subject agreement and in the said agreement the first plaintiff with reference to the very properties which is the subject matter of the suitHaving taken note of the decision we are of the opinion that the said decision would not be squarely applicable to the present facts so as to discard the evidence of PW-1. In so far as the agreement dated 26.03.2007 regarding which specific performance is sought, we notice that though Shri Devassy has entered into the agreement with the defendants it is done so, for and on behalf of Shri Rubis Tharayil and therefore Shri Rubis Tharayil is also arrayed as the plaintiff No. 1 in the suit. If that be the position, in so far as the suit transaction and the evidence to prove the sufficiency of funds, the evidence tendered by him would be relevant. Hence, in so far as the personal knowledge relating to the other aspects i.e. entering into agreement with Shri Ali Khan and the recitals therein, it was required to be explained by examining Shri Devassy who would have been the relevant and competent witness to explain that aspect of the matter more particularly when reference with regard to the financial capacity is made therein17. In that regard, the extract from the agreement dated 23.10.2007 (Exhibit X1) between Shri Devassy and Shri Ali Khan noticed above indicates that the intention of seeking specific performance of the agreement dated 26.03.2007 is given up there under. One of the parties to the said agreement namely Shri Ali Khan was examined by the defendants as DW-2, who apart from referring to the agreement has also stated that the same was entered into since the plaintiffs did not have the financial resources to continue the transaction. In that circumstance, it is only Shri Devassy who could have explained the real reason if any for executing the said agreement dated 23.10.2007 if it was not for the purpose indicated therein and as spoken to by DW-2. In such situation the execution of the said agreement dated 23.10.2007 will have to be taken as a strong circumstance wherein it indicates that the plaintiffs, prior to filing the suit itself had intended to give up their right to seek for specific performance for want of the financial resources19. In that background, the perusal of the judgment passed by the Trial Court would indicate that the Trial Court on appreciating the evidence has at the outset arrived at the conclusion that in view of endorsement dated 14.10.2007 contained in the agreement the non- payment of Rs. 75 Lakhs on or before 15.10.2007 would constitute waiver and cannot be considered as a breach committed by the plaintiff. To that extent the Trial Court was justified and even if that be so the availability of the sum of Rs. 75 Lakhs sought to be established through the document at Exhibit A5 is taken into consideration, whether the said amount was still available subsequent thereto and whether the readiness and willingness can be accepted as proved was the appropriate consideration required to be made. Hence the Trial Court in that regard has rightly taken note of the entire evidence. While taking note of this aspect, as has been referred to by us herein above, the Trial Court has taken note that the plaintiffs were required to arrange the total balance sale consideration of Rs. 1,31,79,700/- (One Crore Thirty-One Lakhs Seventy-Nine Thousand Seven Hundred only)20. In that regard, the document at Exhibit A5 namely the accounts statement of Axis Bank was taken into consideration and had rightly observed that the ledger extract for the period subsequent to 19.10.2007 was not produced and in that view the evidence of PW-1 was referred as he could not say on which day he withdrew Rs. 75 Lakhs from his bank account. The Exhibits A6, A7 and A8 were taken note though it was not appropriately attested and the amount as indicated in the said documents at Rs. 15,62,426.70/- Rs. 5,00,488/- and Rs. 7,97,205/- which were in credit to the said account was taken note. Having discarded Exhibit A9 which was a fax message without the supporting bank documents, the amount of Rs. 2,33,399/- in Exhibit A11 and Rs. 37,187/- in Exhibit A12 was also taken note. The Trial Court had also taken into consideration the agreement entered into between Shri Devassy and Shri Ali Khan, dated 23.10.2007 marked as Exhibit X1 which was also one of the reasons to arrive at the conclusion that the plaintiff had not proved their readiness and willingness23. In the above background, we find that the consideration as made by the High Court does not indicate that the High Court has taken note of the evidence in the manner as has been analysed by the Trial Court. From the reasoning as extracted above the High Court has proceeded by indicating that the readiness includes the capacity to raise funds for purchasing the property. To that extent though the High Court was justified, the assessment of the evidence made does not indicate that there were sufficient documents to show that they had the capacity to raise the funds for the entire balance sale consideration. The error committed by the High Court is that it proceeded on the basis that the total consideration of the transaction is Rs. 1.5 crores of which Rs. 75 Lakhs was paid as advance and since there was an offer to pay the balance of Rs. 75 Lakhs on or before 15.10.2007 which was available in credit to their account as on 11.10.2007 the same was sufficient. Hence it concluded that it cannot be stated that the plaintiffs were incapable of raising the funds. From the discussion made by the Trial Court as also by us in the course of this judgment, it would indicate that in so far as the total sale consideration is concerned, even if the extent indicated as per the Court Commissioners report is taken, it would be the sum of Rs. 2,01,00,850/-. Therefore, the balance payable would be Rs. 1,26,00,850/-. Towards payment of such balance sale consideration though as on 15.10.2007 the sum of Rs. 75 Lakhs was shown to the credit, the availability of that amount subsequent to 08.11.2007 is not shown as the statement at Exhibit A5 is only for the periods 09.10.2007 to 08.11.2007. Hence, the said amount will have to be taken as being made available at one point in time by juggling the figures and was not shown available for payment at the relevant point when the suit was filed. Hence on exclusion of the same the remaining amount through Exhibit A11 to A13 would be in-sufficient to indicate that as on date of filing the suit they had the entire remaining balance sale consideration and were ready and willing to complete the transaction. In that circumstance, the deposit presently made after the judgment is rendered by the High Court to the reduced extent would not be of assistance as there would be change in the circumstances after more than a decade, as against what the position was in the year 200724. In that circumstance, when not only the availability of fund was satisfactorily explained but in a circumstance where the first plaintiff had entered into an agreement dated 23.10.2007 in favour of Shri Ali Khan in respect of the very same properties even before securing the sale deed in their favour, the bonafides would also become relevant when the specific performance as an equitable relief is taken into consideration. In that view, the Trial Court while declining the relief of specific performance has appropriately granted the decree for realisation of the sum of Rs. 75 Lakhs with interest at 9% per annum. To that extent though the Trial Court was justified, we find it necessary to protect the interest of the plaintiffs to recover the said amount. In that view, it is necessary to direct the defendants to refund the amount to the plaintiffs within a time frame, failing which the amount is to be paid with the higher rate of interest. Further, charge is to be created over the suit schedule properties to ensure repayment of the amount. Subject to the above the impugned judgment dated 21.08.2018 in RFA No. 344/2011 is liable to be set aside.