JUDGMENT
M.R. Hariharan Nair, J.
1. The 1st plaintiff in a suit for specific performance filed as O.S. No. 126/9(5 of the Sub Court, Kozhikode, has come up in appeal challenging the dismissal of the suit. The 2nd plaintiff is now impleaded as the 2nd respondent.
2. The plaintiffs contended that the schedule building which is actually one of the seven rooms in a larger building was entrusted to them by the defendant (1st respondent) on 1.4.1987 as per Ext. A1 agreement providing for rent of Rs. 335/- per mensem and that the 1st respondent along with his partner- 2nd plaintiff was thereunder conducting a business therein.
3. The background in which the agreement was executed was the present 1st respondent’s initiating R.C.P.No. 41/88 against various sub-tenants. The purport of
the agreement was that even if R.C.P. 41/88 was allowed, the 1st plaintiff would not be evicted from his portion of the building while the other sub-tenants would be evicted. The 1st plaintiff had paid a sum of Rs. 10,000/- and offered to pay further sum of Rs. 15,000/- as further consideration for the agreement as and when the then pending partition suit was over. That event took place on 29.3.1989; but the plaintiffs were never informed thereof. Intention of the defendant to resile from Ext. A1 came to the notice of the plaintiffs when they received notice in the E.P. filed by the defendant to execute R.C.P. No. 41/88. Immediately they sent Ext. A6 notice and filed the suit.
4. The defendant denied the execution of the, agreement and contended that in any event, Ext. A1 was void being against public policy and intended to stifle contest in a civil proceeding viz., R.C.P. No. 41/88 wherein the plaintiffs were respondents 11 and 12. Even though that proceeding was not contested at that stage, the 1st plaintiff filed a revision before the High Court at a later stage and lost it.
5. Ext. A1 was subjected to expert examination. Even though the expert concerned was not examined as a witness, the trial court placed reliance on Ext. C1 report prepared by the expert. Taking note of the fact that the expert did not make positive assertion that Ext. A1 was in the hand of, the plaintiffs and only stated that it was probable that they executed the agreement as also the fact that P.W. 2, who was the first witness to witness Ext. A1 document, did not support the plaintiffs’ case as also other factors like absence of evidence to show that any rent was paid as stipulated in Ext. A1, the Court concluded that Ext. A1 was not executed by the defendant; that is not genuine and proceeded to dismiss the suit.
6. The learned counsel for the appellant submitted that Ext. A1 is not against policy and that in the absence of any contra evidence, the trial court should have accepted the report of the expert and found that the contract was duly executed and proceeded to enforce it. Case law was also relied on in that regard. As regards the plea of limitation, his contention is that under Article 54 the starting point is only date of knowledge that specific performance was refused and that the relevant date is 12.12.1995.
7. On the arguments advanced in the case the points that arise for decision are:
(1) Whether there is reliable evidence to find that Ext. A1 was actually executed by the defendant?
(2) Whether Ext. A1 is void being against public policy?
(3) Whether Ext. A1 is liable to be enforced?
(4) Whether the suit is barred by limitation?
(5) Whether specific performance can be allowed as sought for?
8. Point No. 1:- Certain facts are admitted. One among them is that the date of Ext. A1 falls within the period of pendency of R.C.P. No. 41/88. Yet another is that even though sub-lease in favour of the present 1st plaintiff was alleged in the said proceeding and notwithstanding the fact that the plaintiff had entered appearance through an Advocate by name Imbichi, the eviction sought for in the said proceeding was not congested even in R.C.A. No. 194/90 filed against the order of eviction. The eviction allowed against all the alleged sub-tenants including the plaintiffs was contested by the plaintiffs only in C.R.P. No. 917/96. The plaintiffs have a valid reason to give for filing the said C.R.P. It was violating the terms of Ext. A1, that after getting order for eviction in R.C.A. No. 194/90, the defendant filed E.P. seeking eviction of ail the tenants including the present plaintiffs. It is argued that only when the defendant proved through her conduct that she was not respecting Ext. A1 i.e. by filing the E.P. that the plaintiffs thought of resisting the same and that the filing of the suit was an act of desperation when they were forced against the wall.
9. When the report of the expert is considered in the aforesaid background, what can be seen is that there was every possibility for Ext. A1 being executed by the defendant. There is evidence to show that the plaintiffs paid the rent of Rs. 335/- at least for 3 months vide Exts. A2(a), A3 and A3(a) as undertaken in Ext. A1. The payment of Rs. 10,000/- is also admitted by P.W.2 though he has an explanation unsupported by pleading therefore. I have myself compared the writing of the name of the defendant in Ext. A1 and perused the reasons given by the expert in support of his conclusion that it was probable that signature in Ext. A1 is that of the defendant herself. I am of the view that the reasons given are weighty. Of course, only probability was certified by the expert; but then this is a civil proceeding where the decision has to go by probabilities. It is also to be remembered that comparison of hand writing is an imperfect science and an expert would not be able to state with 100% certainty that a particular signature is that of the person who purportedly signed it. He can only state that there is high probability and this he has done in his report. If Ext. A1 is a manufactured document, the plaintiffs would never have made the defendant’s husband himself as a witness thereto. For all these reasons and also on a re-appreciation of the oral evidence, I find, differing from the trial court, that Ext. A1 was, in fact, executed by the defendant.
10. Point Nos. 2 and 3:- These are considered together for the sake of convenience. Section 10 of the Contract Act provides that all agreements are contracts if they are made by the free consent of parities competent to contract; for a lawful consideration and with a lawful object and are not expressly declared to be void.
11. The defence contention that Ext. A1 is void is based on Section 23 of the Contract Act which provides that the consideration or object of an agreement would be lawful only if it is not forbidden by law or is of such a nature that, if permitted, it would not
defeat the provisions of any law, is not fraudulent; does not involve or imply injury to the person or property of another; and the court does not regard it as immoral or opposed to public policy. It is further provided in the same section that every agreement of which the object or consideration is unlawful is void.
12. The defendant has a contention that in so far as Ext. A1 provides that the petition for eviction brought against the tenant and sub-tenants of whom the present plaintiffs are included would not be contested, and that nevertheless, even if an order of eviction is obtained in that proceeding, no effort would be made to evict the plaintiffs, the object is unlawful and hence the contract is void. To put it differently Ext. A1 provides for something which would ultimately run against the prospective order of the Rent Control Court and hence unlawful. It is also contended that there is an element of fraud in Ext. A1 in so far as it forbids the plaintiffs not to contest the Rent Control proceeding and that in consequence of such non-contest there is the prospect of an order of eviction being obtained. An assurance is also given that in return for such no-contest the plaintiffs would not be evicted.
13. The stand of the plaintiffs is that even if an order for eviction is obtained in
the normal course, whether with or without the contest of the plaintiffs, no law prohibits
the defendant from allowing the plaintiffs to continue in possession or even not to
execute the order for eviction through court thereby allowing the plaintiffs to continue
in possession, and such being the case, there is no question of violation of law or public
policy in the matter of agreeing even in advance, that is, during the pendency of the
rent control proceeding, that when the other tenants are evicted the plaintiffs would be
spared and allowed to retain possession. There is no question of fraud involved in
such an arrangement because the landlord can always choose who his tenant should
be and the mere fact that the plaintiffs were impleaded along with other sub-tenants
for the purpose of avoiding a contention that the petition was bad for non-joinder of
parties would not militate against the validity of the contract. It is also contended that
freedom of contract is well recognized by law and that the courts will always give full
effect to it.
14. In Lachoo Mal v. Radhye Shyam (AIR 1971 SC 2213) the question was whether the tenants agreeing to vacate his room to enable the landlord to build over it and for later restoration of the groundfloor itself to him in deviation of the landlord’s rights under a protective enactment offended public policy. It was Held that the landlord could validly waive his rights under an enactment and that consideration for such an agreement would riot be unlawful. All rights can be waived unless such waiver is expressly prohibited by law.
15. Craies on Statute Law – 7th Edition (Pages 269 & 270) contains the following passages germane to the point:
“As a general rule the conditions imposed by statutes which authorise legal proceedings are treated as being indispensable for giving the court jurisdiction. But if it appears that the statutory conditions were inserted by the legislature simply for the security or benefit of the parties to the action themselves and that no public interests are involved, such condition will not be considered as indispensable and either party may waive them without affecting the jurisdiction of the court.”
The following passage from Maxwell’s ‘Interpretation of Statutes’, 11th Edition, 1962, pages 375 and 376, may also be quoted to advantage here;
“Everyone has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity which may be dispensed with without infringing any public rent or public policy. Where there is no express prohibition against contracting out of it, it is necessary to consider whether the Act is one which is intended to deal with private rights only or whether it is an Act which is intended as a matter of public policy……”
The term ‘public policy’ has an entirely different and more extensive meaning from the policy of the law. Winfield defined it as a principle of judicial legislation or interpretation founded on the current needs of the community. It does not remain static in any given community and varies from generation to generation. Judges, as trusted interpreters of the law, have to interpret it. While doing so precedents will also guide them to a substantial extent
16. In M.G. Brothers Lorry Service v. Prasad Textiles ((1983) 3 SCC 61) the relevant agreement provided for a different period of limitation for enforcement which was at variance with the provisions in the statute. It was held that the provision was void under Section 23 of the Contract Act because the object was to defeat the provisions of Section 10 of the Carriers Act. It was held that waiver resulting in extinguishment of right is different from barring of remedy through contract as far as Section 23 was concerned.
17. Mathai George v. Mathew Chacko (1987 (1) KLT 342) is authority for the proposition that in such matters presumption of legality is the Rule ; not of illegality. There the relevant agreement provided that the respondent should withdraw a pending Insolvency Petition and that the other side should file a suit to enforce a mortgage. The suit was not filed though I.P. was withdrawn. The court held that there was no violation of public policy in the matter of agreeing to withdraw from the pending E.P. The court upheld the proposition that what makes an agreement which is otherwise legal, void is that its performance is impossible except by disobedience of law.
18. In B.O.I. Finance Ltd. v. The Custodian (AIR 1997 SC 1952) a three Judge Bench of the Apex Court laid down the proposition that if pursuant to an agreement
to do an illegal act, a transaction, in part takes place which would otherwise be valid if there was no such prior agreement, then, notwithstanding the illegality of the contract, the completed transaction itself cannot be regarded as invalid. What makes an agreement which is otherwise legal, void, therefore is that its performance is impossible except by disobedience of law.
19. As can be seen from the above and from the other decisions on this point, it is well that giving up a legal right is not hit by Section 23. If a contract, on the face of it, is capable of legal performance, the existence of undisclosed intention by one party to perform it unlawfully or use it as part of an unlawful scheme would not disable the other party from enforcing it. If the construction of the agreement is doubtful, the construction which admits of lawful performance is to be preferred. The major question would be whether there was any intention that any law was to be violated. Motive of a party even to defeat execution of a decree that may be passed against him would be immaterial.
20. Viewed from the said position of law and when there is no law prohibiting the landlord to allow his tenant to continue in possession even after getting an order for eviction, may it be on a higher rent, I do not think that there is anything illegal or against public policy in the matter of Ext. A1. It follows that Ext. A1 is a valid document.
21. Point No.4:- Ext. A1 is dated 26.11.1988 and the suit is filed only in 1996. Article 54 of the Schedule to the Limitation Act provides that the period of limitation for specific performance of a contract which is the main prayer in the present plaint would be 3 years from the date fixed for the performance or if no such date is fixed when the plaintiff has notice that performance is refused. Ext. A1 does not lay down any specific date for its performance. What is mentioned is only that in case an order for eviction is obtained in R.C.P. No. 41/88, 600 sq. ft. area in the possession of the first plaintiff would not be recovered in execution thereof. It also provides that as soon as the partition suit was decreed, the defendant should execute a rent deed in favour of the plaintiffs in respect of the said shop room. Since no definite date is provided for execution of sale deed, limitation would certainly start running only from the date when the plaintiff would have notice that performance was refused.
22. The specific case of the plaintiffs is that they got knowledge that performance was refused only when the defendant filed execution petition pursuant to the order of the Rent Control Court seeking eviction from the plaintiffs as well and notice therein was served on the plaintiffs. The order of the Rent Control Court allowing eviction became final and E.P. No. 179/95 was filed. Immediately thereupon the plaintiffs sent Ext. A6 notice on 12.12.19995 and filed the suit itself on 16.2.1996. There is no document produced in the case which would indicate that the defendant issued any notice or
expressed her intention not to comply with the assurance in Ext. A1 at any time before she filed the execution petition. Such being the case, I do not think that there is any merit in the contention of the defendant that the suit is barred by limitation as far as the prayer for specific performance is concerned. This point is found in favour of the plaintiffs.
23. Point No. 5:- Grant of specific performance is a discretionary remedy. The Court is not bound to grant specific performance of all agreements even if they are validly executed. Compensation might be the proper remedy to be allowed in certain cases. If any authority is required on the point, reference may be made to the decision in Hariharan v. Parvathykutty Amma (1989 (2) KLT SN 31 – Case No. 38). The following passage may be quoted therefrom:
”Relief of specific performance is not matter of right. As provided in Section 20 of the Specific Relief Act, it is a discretionary relief, though just like all other judicial discretions, the courts should not act arbitrarily or capriciously, but should act on sound and reasonable grounds guided by sound judicial principle and capable of being corrected in appeal. Courts are not bound to grant the relief merely because it is lawful to do so. All the facts and circumstances of the case will have to be meticulously considered. Motive behind the agreement or the litigation and the attendant circumstances also should enter the judicial verdict. It is the duty of the court to take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff. Comparative hardship and advantage and the conduct of the parties are also some of the considerations. Equity or inequity in granting the relief also should enter the judicial mind. Discretion under Section 20 is not absolute. A person who seeks the relief must do equity and come with clean hands. He must have done and must continue to be ready and willing to do all what he has to do.”
24. As far as the present case is concerned, there are certain factors which would make the grant of the relief difficult. One of them is the fact that the plaintiffs themselves have not performed their part. It is mentioned in Ext. A1 that with effect from the date of the agreement viz., 26.11.1988 the plaintiffs shall pay rent at the rate of Rs. 335/per mensem and that in addition to Rs. 10,000/- already paid toward premium, Rs. 15,000/- more would be paid immediately after the partition suit, which was then pending in the High Court, was finally decided. Ext. B2 partition decree was passed on 29.3.89 and no attempt was made by the plaintiffs to pay the said premium of Rs. 15,000/- at any time. That apart, even the rent payable was defaulted for nearly 14 years. It is true that Exts. A2(a), A3 and A3(a) entries would show that rent for three months was paid; but non-payment of rent thereafter is clear violation of the agreement. Thus, there is gross default on the part of the plaintiffs themselves to perform the contract and the benefit of specific performance cannot be extended to such a party.
25. Another difficulty which stands in the way of granting specific performance is the fact that the agreement does not provide for performance of an event which can effectively be enforced even without co-operation of the defendant. Had it been a sale of the landlord’s right, there would have been no difficulty because in case of refusal on the part of the defendant the court could very well intervene and execute a sale deed on behalf of the defendant after ensuring deposit of the balance of sale consideration. However, what is contracted in Ext. A1 is only execution of a further rent deed. If what was in the contemplation of the performance was a rental arrangement for continued payment of Rs. 335/- per mensem even after the contingencies mentioned in the contract are over, there was no need for a stipulation as contained in Ext. A1 that as soon as the partition suit was over a rent deed would be executed jointly by the plaintiffs and the defendant. What is obvious is that considering the delay and risks involved in a suit terms of the prospective rent deed were not decided at the time of Ext. A1. The terms of the new rental agreement were to be negotiated between the parties after the partition case was over. What exactly were the terms of the rent deed that was in the contemplation of the parties then is not known. Obviously, what was in the mind of the parties was not the same terms as contained in Ext. A1 because in that event there was no need for mention of another rent deed.
26. When the terms of the prospective rent deed are not clear from Ext. A1 it is
not possible to fix the same by the court applying its own mind and for this reason also
there is no justification for granting specific performance of the contract. Probably,
compensation might be payable; but then the burden to adduce evidence in that regard
is on the part of the plaintiffs in the instant case. There is no evidence adduced to
prove the precise damage suffered by the plaintiffs in consequence of the breach of
contract by the defendant. As such, the plaintiffs cannot be granted a decree for
compensation also.
27. Specific performance is a remedy that is to be granted to a party who is vigilant in the matter of performance of his own part. I have already referred to the fact that the plaintiffs had not performed their part in the matter of payment of rent and premium. That apart, it is admitted by the first plaintiff as P.W. 1 that he never bothered to enquire about the progress of the partition case that was mentioned in Ext. A1. Plaintiffs’ attempt was only to cling on to possession without any payment of rent. They have not been vigilant and this is also a factor that stands in the way of granting specific performance.
In view of my findings as above, I agree with the trial court that the plaintiffs are not entitled to get any relief in the suit though not for the reasons mentioned in the impugned judgment. The appeal is found to be without merit and it is accordingly dismissed.