Allowed

Usha Venugopal & Others v. Mariyakutty Joseph & Another

Kerala HC11 Nov 2014RFA/693/2011

Case brief

AI extract

What is this about?

Appeal against decree for specific performance of an agreement for sale. Court found genuine suspicion regarding fabricated agreement due to vague property description and lack of due diligence by plaintiffs. Specific performance set aside; refunds granted.

What did the court decide?

Impugned decree set aside; appellants directed to pay Rs.7,00,000 with interest at 12% per annum from date of suit.

Usha Venugopal & Others Vs Mariyakutty Joseph & Another — Specific Performance | Kerala HC (2014)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR &

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THE HONOURABLE MR.JUSTICE A.V.RAMAKRISHNA PILLAI

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TUESDAY, THE 11TH DAY OF NOVEMBER 2014/20TH KARTHIKA, 1936

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RFA.No. 693 of 2011 ( )

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AGAINST THE JUDGMENT & DECREE IN OS 92/2005 OF THE SUB COURT, MAVELIKKARA DATED 12-08-2011

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APPELLANT(S)/2ND DEFENDANT & ADDL.DEFENDANTS 3-5:

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1. USHA VENUGOPAL, W/O.K.VENUGOPAL, VAISAKH, PADINJATTUM MURI, THAMARAKKULAM VILLAGE.

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2. DEVAKI AMMA, MANIMANGALAM VEETTIL, PADINJATTUM MURI, THAMARAKKULAM VILLAGE.

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3. SREELEKSHMI VENUGOPAL, VAISAKH, PADINJATTUM MURI, THAMARAKKULAM VILLAGE.

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4. VISHNU @ ABHINANDU V.NAIR, VAISAKH, PADINJATTUM MURI, THAMARAKKULAM VILLAGE.

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BY ADVS.SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) SRI.A.R.DILEEP

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SMT.NAVA VARGHESE

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RESPONDENT(S)/PLAINTIFFS:

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1. MARIYAKUTTY JOSEPH, W/O.BIJU PRASAD, RESIDING AT MANU BHAVAN, KADUVINAL MURI VALLIKKUNNAM VILLAGE-690501.

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2. BIJU PRASAD, S/O.LATE PRAMESWARAN, RESIDING AT MANU BHAVAN, KADUVINAL MURI VALLIKKUNNAM VILLAGE-690501.

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R1-R2 BY ADV. SRI.P.B.SAHASRANAMAN R1-R2 BY ADV. SRI.T.S.HARIKUMAR R1-R2 BY ADV. SRI.K.JAGADEESH

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THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 11-11-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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bka/-

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T.R. RAMACHANDRAN NAIR &

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A.V. RAMAKRISHNA PILLAI, JJ.

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R.F.A. No. 693 of 2011

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Dated this the 11^th day of November, 2014

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J U D G M E N T

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Ramakrishna Pillai, J.

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The 2^nd defendant as well as the legal representatives of the deceased 1^st defendant, who were impleaded as additional defendants 3 to 5, in the original suit are in appeal before us.

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The respondents herein approached the trial court with the original suit for decree of specific performance of Ext.A1, alleging that the same was executed by the defendants in favour of the 1^st plaintiff agreeing to sell the suit property to her. The plaintiffs alleged that the defendants executed Ext.A1 on 20.11.2004 in favour of the 1^st plaintiff with regard to the suit property for a total consideration of 45,00,000/- after accepting an amount of ₹ ₹ 10,00,000/- on the aforesaid day and stipulating that

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R.F.A. No. 693 of 2011

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₹5,00,000/- would be paid on 15.12.2004 by the 1st plaintiff out of the sale consideration. A time limit of six months was fixed for executing the sale deed. They further alleged that in March 2005, they were ready to get the sale deed registered in their name after paying the balance sale consideration of 30,00,000/- and that was informed to the₹ defendants. As they were given to understand that there was likelihood of increasing the stamp duty from 01.04.2005, they sent Exts.A5 and A6 notices demanding execution. However, it did not evoke any positive response. Though they were ready and willing to get the sale deed executed, the defendants were evading. Therefore, the plaintiffs approached the trial court.

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In the joint written statement filed by the defendants, they denied execution of Ext.A1. They further contended that they have sent Ext.A4, which is a proper reply to Exts.A5 and A6 notices. According to them, signed blank papers were given by them after borrowing a sum of ₹ 2,00,000/- on 18.11.2004 from the 2^nd plaintiff and the same

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were misused by the plaintiffs to fabricate Ext.A1 agreement. According to them, those signed papers were given as insisted by the 2^nd plaintiff, who assured that he would get the document prepared on the signed papers later on with the assistance of a scribe. The building in the suit property was rented out to SBT as well as BSNL; and the defendants had no intention at any point of time to sell the said property with building to anyone. Ext.A1 is a fabricated document and no decree could be granted on the basis of that; so contended the defendants.

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The 1^st defendant died during the pendency of the suit. It was an unnatural death.

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The trial court, after raising proper issues for trial, permitted both sides to adduce evidence. At the trial, PWs 1 to 6 and DWs 1 & 2 were examined. Exts.A1 to A12 and Exts.X1 to X4 were marked. The trial court, after considering the evidence, granted a decree in favour of the plaintiffs as prayed for. It is with this background, the appellants/defendants have come up before this Court.

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R.F.A. No. 693 of 2011

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We have heard the learned counsel for the

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appellants and the learned counsel for the respondents quite in extenso. We have also perused the records.

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For convenience of discussion, the parties can be referred to as they are arrayed in the original suit.

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As already stated, the suit was initiated to get Ext.A1 agreement specifically performed on remittance of the balance sale consideration. The bone of contention of the defendants is that Ext.A1 agreement was fabricated by the plaintiffs on signed blank papers given by the defendants 1 and 2 as a security for a sum of 2,00,000/-₹ received by them from the plaintiffs. The learned counsel for the appellants/defendants pointed out a series of circumstances to convince us that Ext.A1 is fabricated. The suit property is 9.3 ares of property comprised in Sy.Nos.699/18 and 699/26. The description of the property in Ext.A1 reads as follows;

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R699/18 5 ¦V 50 º: Îàxùá¢ 699/26 3 ¦V 80 º: Îàxùá¢ ÕØñáÕá¢ ¥ÄßÜáU ØµÜ Õµµ{á¢ ¦µáKá.Q

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It is an admitted fact that there is a multi-storied building in the suit property. The ground floor of the building consists of shops; the first floor is occupied by the Thamarakulam branch of State Bank of Travancore; and the second floor is used by the defendants as their residence. The Thamarakulam Exchange of BSNL also is housed in one of the floors. It is crucial to note that instead of giving the specific description of the building in the descriptive portion of Ext.A1, a vague description is given to make it appear that all the fixtures in the land are covered by Ext.A1. Such vague descriptions are quite uncommon in agreements for sale of movable property. Ext.A5 is a copy of the first notice said to have been issued to the deceased

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1^st defendant, wherein the plaintiffs had demanded execution of sale deed before 31.03.2005. In the recitals, it is made to appear that the agreement was for execution of the sale deed in respect of the property including the building therein. This was followed by a lawyer's notice, a copy of which is produced as Ext.A6. It is crucial to note

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that in Ext.A6, there is no whisper regarding the building. These notices were replied against by the appellants/ defendants through Ext.A4 notice, wherein the allegation regarding the execution of the agreement is denied. What is stated in Ext.A4 is that when the defendants met with some financial difficulty in November 2004, they approached the 2^nd plaintiff, who is the husband of the 1^st plaintiff, on 18.11.2004, requesting him to lend 7,00,000/- as loan. It₹ is alleged that the 2^nd plaintiff was a friend of the 1^st defendant. The 2^nd plaintiff gave 2,00,000/- on that day and₹ promised to pay 5,00,000 on 15.12.2004 on condition that₹ the entire amount should be repaid together with interest at the rate of 12% within six months. For that, the 2^nd plaintiff insisted for a document as security. Accordingly, an amount of 2,00,000/- was received after getting a stamp₹ paper worth 50/- as well as a blank white paper signed,₹ assuring that the 2^nd plaintiff would get the document prepared utilizing the signed papers with the assistance of a scribe. Later, on 15.12.2004, they approached the 1^st

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plaintiff; and as agreed, 5,00,000 was also given after₹ getting an endorsement to the effect that the balance amount of 5,00,000/- has been paid. They have stoutly₹ denied the transaction as alleged by the plaintiffs.

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We have scrutinized Ext.A1. It is endorsed on a stamp paper worth 50/- and two additional sheets. As₹ already stated, the schedule of Ext.A1 does not contain the description of the building. We do notice that the body of Ext.A1 is written in black ink and the description of the property in the schedule is written in blue ink. The same pen used for giving the description of property in the schedule is used by the parties for affixing their signatures. This would reveal that the entire document was not prepared in one go. The name of the 1^st defendant is Venugopal and the name of the 2^nd defendant is Usha Venugopal. It is curious to note that on the second page of Ext.A1, the name of the 2^nd defendant is shown as Venugopal Usha Venugopal. This is followed by the signature of the 2^nd defendant. No justifiable explanation is

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forthcoming from the plaintiffs as to how this could happen. This unusual way of mentioning the name of 2^nd defendant, according to us, must be with the intention to fill up the gap between the signatures put by defendants 1 and 2. This fortifies the case of the defendants that what was signed by defendants 1 and 2 were blank papers;

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The trial court heavily relied on the oral testimonies of the witnesses cited by the plaintiffs to grant a decree in their favour. It is alleged that Ext.A1 was prepared by PW2, who is a licenced scribe. He admitted his signature in Ext.A1 and spoke to the execution of Ext.A1. Merely because the fact that it was prepared by a licenced scribe, the same would not help the plaintiffs to establish that the entire contents of Ext.A1 was there when defendants 1 and 2 affixed their signatures in Ext.A1.

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There are other circumstances also, which create genuine suspicion regarding the genuineness of Ext.A1. It is an admitted fact that the property was subjected to a mortgage with the State Bank of Travancore. It is surprising

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to note that there is absolutely no whisper regarding the outstanding liability either in Ext.A1 or in Exts.A5 and A6 notices. It is equally surprising to note that the plaintiffs have no case that they have gone through the encumbrance certificate pertaining to the property before executing Ext.A1. They have no case that they have seen the original of title deed of the suit property before execution of Ext.A1. They have no case that they have made enquiries with the bank regarding the outstanding liability of the defendants. As already pointed out, ever so many tenants including SBT and BSNL were occupying the building situated in the property. However, there is no mention in Ext.A1 as to how these tenants are to be dealt with. The very fact that neither the 1^st plaintiff, who is the alleged intending buyer, nor the 2^nd plaintiff, who is her husband, had cared to verify the encumbrance certificate, previous title deeds, outstanding liabilities etc. before getting Ext.A1 executed, would take us to the conclusion that the parties never intended a transaction as the one mentioned in Ext.A1 in

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the present form.

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There is yet another circumstance, which stares against the case of the plaintiffs. Though it is stated in Ext.A1 that the sale was for a sum of 45,00,000/-, the₹ centage value is not shown in Ext.A1. The trial court heavily relied on the oral testimony of PW5, the Branch Manager of Thamarakkulam SBT, who has produced Exts.X1 to X3, which are the extracts of the statement of loan accounts of the defendants to grant a decree in favour of the plaintiffs. The trial court found that those statements would reveal that the defendants remitted more than ₹5,80,000/- to close two of their loan accounts on 20.11.2004, i.e., on the date made mention of in Ext.A1; and there was remittance of 2,90,391/- on 17.11.2004 also as₹ per Ext.X3. From the averments in the reply notice, it can be seen that the defendants were badly in need of money. Presumably, the pressing necessity might have been for repaying the loan outstanding with the bank of PW5. The defendants' case in Ext.A4 is that they have demanded

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₹5,00,000/- from the 2nd plaintiff. However, only a sum of ₹2,00,000/- was given. The mere fact that the loan was closed with a higher amount would not indicate that the entire amount used for closing the loan might have proceeded from the plaintiffs.

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The trial court also relied on the word “agreement” appearing in the endorsement on the last page of Ext.A1 on 15.12.2004 regarding the receipt of ₹5,00,000/- to grant a decree in favour of the plaintiffs . The endorsement is to the effect that 5,00,000/- was received₹ by the defendants on the aforesaid day as per the agreement. For this, a satisfactory explanation was given by the defendants in Ext.A4. They have stated that they were made to believe by the 2^nd plaintiff that he would get the document prepared with the assistance of a the scribe utilizing the papers signed by them as directed by him. It is their further case that when they put their signature on 15.11.2004, they were made to believe that it contains the recitals to the effect that ₹2,00,000/- was paid on

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20.11.2004 and 5,00,000/- would be paid on 15.12.2004₹ with an undertaking to repay it within a period of six months.

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Ext.A10, which is a true extract of the statement of SB account in the name of the 1^st plaintiff as well as Ext.A12, which is the certified copy of the sale deed executed by the 1^st plaintiff on 01.10.2004 conveying her property to another for a sale consideration of 1,82,500/-,₹ were pressed into service to prove that she had arranged funds for purchasing the suit property. However, Ext.A10, by itself, will not strengthen the case of the plaintiffs that they had paid 10,00,000/- on 20.11.2004. As the contention₹ of the defendants was that they have secured only ₹2,00,000/- initially, it was the bounden duty of the plaintiffs to prove that they had 5,00,000/- with them on the date of₹ the alleged execution of Ext.A1. It is also relevant to note that the payment was not made either through cheque or demand draft.

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The trial court overlooked the fact that the plaintiffs were claiming an equitable relief and it is the bounden duty of the plaintiffs to prove, by cogent evidence, that Ext.A1 agreement was genuine as the defendants have specifically denied such an agreement. It is true that the defendants have admitted their signatures in Ext.A1. However, they have given a version, which competes in probability with the case of the plaintiffs. It is crucial to note that the 1^st plaintiff has not cared to enter the witness box. The 2^nd plaintiff is a stranger; and therefore, he is incompetent to claim anything by way of a decree, because, he would not come within the ambit of Section 15 of the Specific Relief Act, 1963, which enumerates the parties, by whom a decree for specific performance of a contract could be obtained. Here, the 2^nd plaintiff is neither a party to the contract nor is the representative in interest or principal of the 1^st plaintiff.

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The specific performance of a contract is the actual execution of the contract according to its stipulations

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R.F.A. No. 693 of 2011

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and terms; and by granting the decree for specific performance, the courts direct the party in default to do the very thing, which he contracted to do. The stipulation and terms of the contract have to be certain and the parties must have been consensus ad idem. The acceptance must be absolute and must correspond with the terms of the offer. The burden of showing the stipulations and terms of the contract and that the minds were ad idem, is always on the plaintiffs. We notice that the building is not made mention of in the schedule description of Ext.A1 though there is a reference regarding the same in the body of Ext.A1. We have already noticed that the description of the property in the schedule and other parts of Ext.A1 were not written on the stamp paper in one go. Therefore, Ext.A1 creates a genuine suspicion in our mind as to whether the defendants have affixed their signature with the full knowledge that they were executing Ext.A1 with an intent to execute a valid conveyance in respect of the suit property. The plaintiffs have not adduced any valid evidence

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to remove the said suspicion.

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There cannot be any quarrel against the proposition that ordinarily an endeavour should be made by the court to give effect the terms of the agreement. At the same time, it is also a well-settled principle that an agreement has to be read as a whole so as to enable the court to ascertain the true intention of the parties. It is not in dispute that the previous title deed of the defendants were not seen by the plaintiffs. They did not care to verify the encumbrance certificate as well. The outstanding liability with the bank was not ascertained. Ext.A1 is silent regarding the tenants, who occupied the premises. Evidence on record would indicate that the defendants are occupying the 2^nd floor of the building. It is beyond comprehension that under such a circumstance, the plaintiffs would have agreed for such a deal advancing so much amount as claimed by them.

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A Division Bench of this Court in Bhaskaran Nair v. Habeeb Mohammed [2002 (1) KLT 864] has

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observed that the non-enquiry regarding the property that was to be sold and non-inspection of the same are all matters, which go on a long run, to show that the plaintiffs are not entitled to specific performance. It was observed that merely because it is lawful to grant specific relief, the court need not grant the order for specific relief, but, this discretion shall not be exercised in an arbitrary or unreasonable manner.

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On a consideration of the entire materials now placed on record, we are of the definite view that the respondents/plaintiffs did not succeed in establishing that they are entitled to a decree of specific performance as prayed for. On the other hand, as already stated, the appellants/defendants have given a version, which competes in probability with the case of the plaintiffs, which makes us to conclude that the story put forward by them is true.

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The appellants/defendants have admitted that they have received a total sum of 7,00,000/- from the₹

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R.F.A. No. 693 of 2011

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respondents/plaintiffs in two instalments. We are of the view that the appellants/defendants can be directed to pay back the amount together with interest at a reasonable rate from the date of the suit till realisation.

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In the result, the appeal is allowed.

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The impugned decree granting specific performance is set aside. In supersession of the decree granting specific performance, the respondents/plaintiffs are granted a decree, directing the appellants/defendants to pay back ₹7,00,000/- (Rupees seven lakhs only) together with interest at the rate of 12% per annum from the date of the suit till realisation.

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The parties shall suffer their respective costs.

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Sd/- T.R. RAMACHANDRAN NAIR, JUDGE.

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Sd/- A.V. RAMAKRISHNA PILLAI, JUDGE.

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bka/-

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//True copy//

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PA to Judge

Usha Venugopal & Others v. Mariyakutty Joseph & Another

Case brief

What is this about?

What did the court decide?

Usha Venugopal & Others v. Mariyakutty Joseph & Another

Case brief

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What did the court decide?

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