CASE NO.: Appeal (civil) 1396-1397 of 2002 PETITIONER: Ramakrishna Pillai & Anr. RESPONDENT: Muhammed Kunju & Ors. DATE OF JUDGMENT: 20/02/2008 BENCH: Dr. ARIJIT PASAYAT & P. SATHASIVAM JUDGMENT:
J U D G M E N T
Dr. ARIJIT PASAYAT, J.
1. Challenge in these appeals is to the judgment of a
Division Bench of the Kerala High Court.
2. Background facts need to be noted in some detail.
Two suits were filed for specific performance of agreement
to sell the suit properties. Appellant No.1 is the plaintiff in OS
No. 11 of 1997 which was filed in the Sub Court Mavelikara on
23.2.1987. Appellant No. 2 is the plaintiff in OS No. 17 of
1987 which was filed on 28.2.1987. The three defendants were
common to both the suits. Defendant no.1 is defendant No.2’s
brother’s son and defendant No. 3 is the wife of defendant No.
2. Defendant No. 3 obtained the property mentioned in the
two suits under an exchange of properties between her and
her husband i.e. defendant no.2. She mortgaged the
properties to the Kerala Financial Corporation Limited.
Sometime in 1970 defendant No.3 executed a Power of
Attorney in favour of her husband-defendant No.2 authorising
him to deal with the property. On 17.5.1974 defendant No.2
sold portions of the property to defendant No.1 acting on the
power conferred by the power of attorney vide Exhs. A 8 and A
18. Subsequently on 12.8.1974, defendant No.3 cancelled the
power of attorney. In 1979 the defendant No.1 executed a
power of attorney authorising defendant No. 2 to deal with the
property. On the basis of such power of Attorney he entered
into an agreement with appellant No. 2 on 6.8.1979 to sell 3.5.
cents of the property and the structures for a price of
Rs.32,000/-. An advance of Rs.10,000/- was paid. Appellant
No. 2 was then the tenant of the possession of the structure
and had paid Rs.7,000/- as security. It was agreed that the
amount shall be adjusted against part payment of the price
fixed and appellant No. 2 was to pay Rs.15,000/- as the
balance consideration. The agreement indicated that
possession was delivered to appellant No.2.
On 20.8.1979 defendant No.2 as power of attorney holder
entered into an agreement to sell 7.5 cents of property with
structures to appellant No. 1 for consideration of Rs. 43,500/-,
out of which Rs.27,000/- was paid as advance. Appellant No.
1 was already in possession of the structure as tenant. The
terms of the agreement i.e. Exh.A1 are similar to those as Exh.
A14. Since defendant no.3 did not discharge the dues to the
Financial Corporation, recovery proceedings were started and
the rent payable by the appellant was attached. It appears
thereafter there was a dissension amongst the defendants and
Defendant No.3 filed a suit (OS No. 42 of 1982) challenging the
sales made by Defendant No. 2 to defendant No. 1. The
appellants were not parties to the said suit. Defendant No. 1
took the stand that the sales in favour of defendant No. 2 as
power of attorney holder was valid and defendant No. 3 was
not entitled to the relief prayed. Thereafter the dispute was
settled recognizing the rights of defendant No.3. She
undertook to honour all commitments made by defendant no.
2 in respect of the property. In 1986 appellants called upon
the defendants to execute the sale deed in their favour. A
reply was given on 13.11.1986 refusing to execute the sale
deeds. Two suits were filed, as noted above, for specific
performance. There were clear averments to the effect that the
appellants were and are always ready and willing to perform
their part of the agreement. The defendants 1 and 3 contested
the proceedings. It was their stand that the agreements sued
on, namely Exhs. A 1 and A19 are not valid and binding on
the defendant. A plea of limitation was also taken. But there
was no denial to the plea regarding readiness and willingness.
There was specific reference to the earlier disputes between
the defendants. The trial court by judgment and decree dated
19.3.1992 dismissed the suit as barred by limitation after
holding on merits that the agreements are valid and binding
the defendant. The plaintiffs filed separate appeals in the High
Court. Defendant No.3 also filed separate memo of cross-
objections challenging the trial court’s finding on the valid and
binding nature of the agreements. By the impugned judgment
dated 9.7.2001, the High Court affirmed the trial court’s
finding that the agreement are valid and binding, and also
held that the suits were not barred by limitation. However the
High Court dismissed the suit on the ground that there was no
plea raised regarding readiness and willingness and exercise of
discretion. However, the High Court granted a decree for
refund of the amount paid as advance covered by the
agreement, but that no credit was to be given for further
payments of Rs.3,800/- and 4,460/- by the plaintiffs.
3. Learned counsel for the appellants submitted that the
High Court fell into grave errors by holding that the plea of
readiness and willingness was not raised by the plaintiffs. In
this connection, reference is made to averments in the plaint
as noted in the judgment of the trial court. Reference was also
made to the issues framed and the written statements filed by
the defendants. It was pointed out that in the written
statements there was no plea taken by the defendants that
plaintiff was not ready and willing to fulfil their part of the
obligation. It was, therefore, submitted that the High Court
non suited the plaintiffs on a ground which was not raised by
the defendants and which was not considered by the trial
court. It was also pointed out that factually the High Court
was wrong in holding that no plea in that regard was taken.
4. Learned counsel for the respondent on the other hand
submitted, that while considering a case of this nature, the
parameters of Section 20 have to be kept in view. It is pointed
out that suits were not filed within a reasonable time and the
subsequent events by considerable effect. It was submitted
that the High Court has rightly held that there was no
material to show that at all relevant points of time the plaintiff
was ready and willing to fulfill their part of the obligation.
Reference was placed on several decisions of this Court in
support of the stand e.g. K.S. Vidyanadam and others v.
Vairavan (1997(3) SCC 1), K. Narendra v. Riviera Apartments
(P) Ltd. (1999(5) SCC 77), V. Pechimuthu v. Gowrammal
(2001(7) SCC 617), Manjunath Anandappa v. Tammanasa and
Others (2003(10) SCC 390) and Pukhraj D. Jain & Ors. v. G.
Gopala Krishna (2004 (7) SCC 251). There can be no quarrel
with the position in law urged by learned counsel for the
respondent about the parameters to be considered while
dealing with a suit for specific performance. But the High
Court’s judgment is clearly vulnerable. Firstly, there was no
dispute ever raised by the defendants about the readiness and
willingness of the plaintiffs to fulfill their obligations. The High
Court was clearly in error in holding that no plea regarding
readiness and willingness was raised. As noted above, the trial
court in its judgment has referred to various portions of the
averments in the plaint where the plaintiffs had categorically
stated that they were and are always willing to fulfill their part
of the obligations. The High Court also failed to notice that
there was no plea either the written statement or in the cross
objections filed in the appeal before the High Court that the
plaintiffs were not ready and willing to fulfill their part of the
obligation.
5. The conclusions of the High Court are to the following
effect:
“Then the question is whether the respective
plaintiffs have pleaded and proved that they
were always ready and willing to perform their
part of the contracts. Even though time did
not start to run on the expiry of two months
from the dates of the agreements, certainly,
the plaintiffs were aware that the defendants
had to discharge their obligation and get a
release of the mortgage in two months of the
dates of the agreements. Until the sending of
the notices preceding the suits, there is
nothing to show that the plaintiffs at any time
called upon the defendants to perform their
part of the contract.”
6. The conclusions are clearly contrary to the pleadings of
the plaintiffs. It was categorically stated in the plaint in both
the suits that the plaintiffs are always ready and willing to
fulfill their part of the obligations and that defendants were
evading the execution for one reason or the other.
7. Above being the position, the appeals deserve to be
allowed, which we direct. The respondents shall execute the
sale deed after receiving the balance of the consideration
within a period of three months. If that is not done it shall be
open to the appellants to move the trial court for necessary
steps in that regard.
8. The appeals are allowed without any order as to costs.