Partly allowed

M.P.Kasim @ Kasmi v. N.P.Haris

Kerala HC26 Feb 2016AS/433/1999

Case brief

AI extract

What is this about?

The High Court of Kerala addressed appeals against a judgment decreeing specific performance of a 1994 property sale agreement. The Court held that the plaintiff was ready and willing to perform and affirmed the trial court's decision for specific performance. However, due to the 22-year delay and significant rise in land value, the Court modified the decree to require the appellants to sell the p

What did the court decide?

Specific performance of the sale agreement directed with the consideration fixed at ₹1,00,000 per cent payable within three months; failure to pay entitles the plaintiff to court-execution of the sale

M.P.Kasim @ Kasmi Vs N.P.Haris — Specific Performance | Kerala HC (2016)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT:

¶3

THE HONOURABLE MR.JUSTICE ANTONY DOMINIC

¶4

¶5

THE HONOURABLE MR. JUSTICE A.HARIPRASAD

¶6

FRIDAY, THE 26TH DAY OF FEBRUARY 2016/7TH PHALGUNA, 1937

¶7

AS.No. 433 of 1999 (C)

¶8

AGAINST THE JUDGMENT AND DECREE IN OS NO. 857/1994 of II ADDL.SUB COURT,KOZHIKODE DATED 30-11-1998

¶9

APPELLANT(S)/DEFENDANTS:

¶10

M.P.KASIM @ KASMI,S/O.THRAKKARUTTY, MANNANTHRAVIL PANDIKA SALAYIL, THALLIKKATH HOUSE, POST LOKKUNNU, KINASSERI, CALICUT-13, VALAYANAD AMSOM AND DESOM OF KOZHIKODE THALUK.

¶11

M.P.MOHAMMED HAROON, S/O.M.P.KASIM@ KASMI, MANNANTHRAVIL PANDIKA SALAYIL, PALLIKKOTH HOUSE, POST LOKKUNNU, KINASSERI, VALAYANAD AMSOM AND DESOM OF KOZHIKODE-13.

¶12

BY ADVS.SRI.PHILIP J.VETTICKATTU

¶13

SRI.B.PREMNATH (E)

¶14

RESPONDENT(S)/PLAINTIFF:

¶15

N.P.HARIS,S/O.MOIDEEN BAVA, NALLYATHODI PARAMBA KALATHINKUNNU AMSOM AND DESOM OF KOZHIKODE TALUK.

¶16

BY ADV. SRI.K.M.FIROZ BY ADV. SMT.M.SHAJNA BY ADV. SRI.P.B.KRISHNAN

¶17

THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 10.02.2016, ALONG WITH AS. 443/1999 AND AS. 448/1999, THE COURT ON 26-02-2016 DELIVERED THE FOLLOWING:

¶18

AS NO.433/1999

¶19

APPENDIX

¶20

APPELLANTS' ANNEXURES:NIL

¶21

RESPONDENT'S ANNEXURES:

¶22

ANNEXURE A1 - CERTIFICATE DATED 12.2.2016 ISSUED BY VILLAGE OFFICER,VALAYANAD

¶23

//TRUE COPY

¶24

ANTONY DOMINIC & A.HARIPRASAD, JJ.

¶25

A.S.Nos.433, 443 and 448 of 1999

¶26

Dated this the 26^th day of February, 2016

¶27

COMMON JUDGMENT

¶28

Hariprasad, J.

¶29

These appeals arise out of three suits jointly tried by the lower court. Parties in all the three suits are the same. Common questions of law and fact arise in these appeals. We heard the learned counsel appearing on both sides. For the sake of clarity and brevity, we may refer to the parties as arrayed in A.S.No.433 of 1999, the appeal filed against the judgment and decree in O.S.No.857 of 1994 on the file of the Court of Subordinate Judge, Kozhikode.

¶30

Shorn of unnecessary details, facts in the three suits are as

¶31

follows:

¶32

(i) O.S.No.857 of 1994 is a suit for specific performance. Admittedly the plaint schedule property belongs to the second appellant (second defendant). He is the son of the first appellant (first defendant). Second appellant executed a power of attorney authorising the first appellant to negotiate and sell the plaint schedule property. The respondent

¶33

¶34

AS Nos.433, 443 & 448/1999

¶35

(plaintiff) was in search of a property. Negotiation for the sale of plaint schedule property took place between him and the first appellant. There was an agreement to sell the property for a consideration of 3,80,000/-. 1,00,000/- was paid as advance. Describing the terms and conditions Ext.A1 sale agreement was executed on 14.04.1994. It was mutually agreed to complete the transaction within five months from the date of Ext.A1. As per the terms and conditions in Ext.A1, the first appellant was to make available all the prior documents relating to the property to the respondent within the said period. On receiving the balance sale consideration of `2,80,000/- from the respondent, the first appellant was bound to execute a sale deed in favour of the former. It is the averment in the plaint that the respondent had been ready and willing to perform his part of the agreement. It is his case that he is still ready and willing to perform his obligations. The balance sale consideration was ready with the respondent but, the appellants failed to hand over prior documents within the stipulated time. Therefore, the respondent caused to issue a lawyer notice dated 19.09.1994 (Ext.A8) demanding performance of the contract. The appellants failed to comply with the demand. Even though the extent of the property shown in Ext.A1 is 15.16 cents, the actual extent was found to be 14.39 cents only. The contract could not be performed only on

¶36

AS Nos.433, 443 & 448/1999 3

¶37

account of the dilatory tactics on the part of the appellants.

¶38

(ii) The appellants filed a written statement contending that the respondent was responsible for the non-performance of the contract within the stipulated time. There is no dispute regarding the execution of Ext.A1 sale agreement. The appellants would contend that the respondent was not ready to pay balance consideration in the stipulated time. Even though the appellants approached the respondent with all prior documents and encumbrance certificate relating to the property, he was prolonging the matter stating one reason or other. Averments in the plaint that the respondent was ready and willing to perform his part of the agreement and that he was having sufficient funds to pay the balance sale consideration are all false. Due to the non-performance of the contract the appellants suffered loss. The appellants intended to purchase some other property on receiving the balance sale consideration from the respondent, but, they could not do so due to the breach committed by the respondent. Finally the appellants rescinded the contract by sending a notice on 15.09.1994 (Ext.B15). The appellants contended that Ex.A1 agreement is not in force at the time of institution of the suit. Therefore, the respondent is not entitled to get specific performance of the contract.

¶39

(iii) The respondent filed O.S.No.512 of 1994 before the Munsiff's

¶40

¶41

AS Nos.433, 443 & 448/1999

¶42

Court, Kozhikode for an injunction restraining the appellants from alienating the property to third parties and to prevent them from committing waste in the property. It is his case that Ext.A1 contract did not move forward due to the laches and fault of the appellants. In the meantime, they tried to alienate and commit waste in the property. Hence the respondent filed O.S.No.512 of 1994 (re-numbered as O.S.No.53 of 1997 before the Sub Court, Kozhikode) for injunction.

¶43

(iv) Appellants filed a written statement therein opposing the contentions. According to them, the respondent was the defaulter. On account of the respondent's fault, the appellants suffered loss. They never intended to alienate the property or to commit waste therein.

¶44

(v) Second appellant, through the first appellant as the power of attorney, filed O.S.No.551 of 1994 before the Munsiff's Court, Kozhikode (re-numbered as O.S.No.47 of 1997 before the Sub Court, Kozhikode) for permanent prohibitory injunction. There also the execution of Ext.A1 is admitted. It is the allegation in the suit that the respondent on 02.10.1994 along with his supporters attempted to trespass into the plaint schedule property and dispossess the plaintiff (second appellant). Hence a prohibitory injunction is sought against the respondent.

¶45

(vi) In the suit the respondent filed a written statement reiterating

¶46

AS Nos.433, 443 & 448/1999 5

¶47

his versions in the main case and also that the appellants were at fault for not carrying forward Ext.A1. The contention that the respondent tried to dispossess the appellants has been denied.

¶48

Four witnesses were examined on the side of the respondent and three witnesses on the side of the appellants. Exts.A1 to A6 were marked on the side of the respondent and Exts.B1 to B15 are the documents produced and marked by the appellants. Exts.C1 and C2 are the commissioner's report and sketch.

¶49

On going through the relevant records in these cases and after

¶50

hearing the learned counsel on both sides, we are of the view that a decision in A.S.No.433 of 1999 will have a direct impact on the other appeals. Learned counsel for the appellants contended that the court below should have seen that the respondent was not ready and willing to perform his part of the contract. It is also contended by the learned counsel for the appellants that the respondent had no sufficient money with him and that is why he failed to perform the contract. Ext.A1 is dated 14.04.1994. The time stipulated for performance of the contract was five months from the date of Ext.A1. The appellants were bound to handover anterior title deeds and encumbrance certificate relating to the property to the respondent for the purpose of preparing a sale deed. Both the parties blamed each other for

¶51

¶52

AS Nos.433, 443 & 448/1999

¶53

not performing their respective parts within the stipulated time. PW1 is the respondent. He deposed before the court below that he was ready and willing to perform his part of the contract and he was having enough money to pay the balance consideration. It is his case that he intimated these facts to the appellants as per Ext.A2 notice on 19.09.1994, ie., five days after the expiry of the time stipulated in Ext.A1. He deposed that even before the expiry of time, he had approached the appellants demanding performance of the contract, but they evaded performance. PW1 further deposed that in spite of receiving Ext.A2 notice, the appellants did not send any reply to it. DW1 admitted receipt of `1,00,000/- as advance pursuant to execution of Ext.A1. He deposed that the appellants were ready and willing to perform their obligations under the contract within the five months period fixed. DW1 further deposed that the appellants were in possession of anterior documents, produced as Exts.B1 to B14 series, and there was no impediment for the respondent in collecting those documents, had he earnestly wished to proceed with the transaction. Defence case is that the appellants entrusted those documents with the scribe. But there is no reliable evidence for this fact, contended the respondent. It is also the case of the appellants that on the next day of the expiry of five months prescribed in Ext.A1, ie., 15.09.1994, they caused to issue a lawyer notice

¶54

AS Nos.433, 443 & 448/1999 7

¶55

to the respondent. It is an admitted case that the respondent did not receive the notice. Learned counsel for the respondent contended that the notice was issued with insufficient address. It was rightly returned by the postal authorities for want of sufficient details to identify the addressee. It is also the case of the respondent that before producing Ext.B15 in court, certain writings have been made by the appellants to make it appear that there were enough details to identify the addressee. On a perusal of Ext.B15, it can be seen that the respondent's case is probable. The postal authorities cannot be blamed for not serving the registered notice on the addressee for want of proper address. Non-examination of the postman concerned is also a flaw on the part of the appellants.

¶56

Learned counsel for the respondent contended that the presumption under Section 27 of the General Clauses Act will not come to the rescue of the appellants since the presumption will be attracted only on proving that the registered letter was properly addressed and stamped. The wording in Ext.B15 notice would show that the appellants had clearly repudiated the contract. However, repudiation of the contract at the instance of appellants was not properly communicated to the respondent before he caused to issue Ext.A2 notice to the appellants. It can only be found that the case of appellants that Ext.A1 contract had been cancelled

¶57

AS Nos.433, 443 & 448/1999 8

¶58

before the institution of suit is acceptable.

¶59

Another contention is regarding the paying capacity of the respondent. The appellants have a specific case that the respondent was not having sufficient money to pay the balance consideration. PW1 deposed that he was having enough funds in his account at the material time. Exts.A3 to A6 are the documents produced to show that PW1 had parked sufficient amounts to discharge the liability under Ext.A1. PW3 is the branch manager cited to prove the entries in Ext.A3 passbook. He deposed that as on 14.09.1994, 1,30,000/- was available in the account of the respondent maintained in PW3's bank. PW4 is the manager of another bank. He also deposed that as on 14.09.1994, 1,50,000/- was kept in the account of the respondent. It is true that after some time the amounts were withdrawn from the accounts. We are of the view that merely for that reason, the case of the respondent cannot be thrown out. It is well settled that in a suit for specific performance what the plaintiff needs to prove is that he is having the capacity to raise funds for paying the consideration stipulated in the contract. It is equally settled that he need not be ready with the money at all the times. Except a suggestion by the appellants that the respondent was not having enough money to go ahead with the transaction, we find no material to hold that the transaction failed on

¶60

¶61

AS Nos.433, 443 & 448/1999

¶62

account of the financial stringency of the respondent.

¶63

Learned counsel for the appellants contended that the respondent was not ready and willing to perform the contract within the stipulated time and also that the time was the essence of the contract. Learned counsel for the respondent, per contra, contended that the respondent was always willing to perform his part and he was having the wherewithal to pay balance consideration. Further, none of the parties treated time as essence of the contract. On a reading of Ext.A1, it is crystal clear that the parties at the time of executing it did not consider time as the essence of the contract. None of the parties to Ext.A1 ever, either by words or by written demand, made time as essence of Ext.A1 contract. In fact, the case of the appellants is that they repudiated the contract on the next day of expiry of the time stipulated therein. Therefore, we find no material, either in the pleadings or in the evidence, to hold that the parties considered time as the essence of the contract.

¶64

Learned counsel for the respondent relying on a Constitution Bench decision in Chand Rani v. Kamal Rani ((1993) 1 SCC 519) contended that there is no presumption in existence in the case of sale of an immovable property that time is the essence of the contract. It has to be ascertained from the express provisions in the contract, nature of the

¶65

¶66

AS Nos.433, 443 & 448/1999

¶67

property and the surrounding circumstances. The points decided therein read as follows:

¶68

“As a general proposition of law, in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are evident.”

¶69

Relying on the decision in Swarnam Ramachandran v. Aravacode Chakungal Jayapalan ((2004) 8 SCC 689) learned counsel for the respondent contended that the burden of proving whether time was of essence of the contract or not is upon the person alleging it. In this case, as mentioned above, we do not find any reason to hold that the parties treated time as the essence of contract. Hence, we are unable to agree with the contentions of the appellants in that regard.

¶70

Learned counsel for the respondent placed reliance on the decision in K.Prakash v. B.R.Sampath Kumar ((2015) 1 SCC 597) to argue a proposition that any interference by the appellate court with the discretion exercised by the trial court for granting a relief of specific performance is normally not permissible, unless it is established that the said discretion was exercised perversely, arbitrarily or against judicial

¶71

¶72

AS Nos.433, 443 & 448/1999

¶73

principles. It is also held that the appellate court should not exercise its discretion against the grant of specific performance on extraneous or sympathetic considerations. In that particular case, the Apex Court increased the consideration stipulated in the agreement to assign, reckoning the efflux of time and escalation in land value. On an over all assessment of the evidence, we find no reason to hold that the trial court failed to exercise its discretion correctly or judiciously.

¶74

From the facts and circumstances established in these cases, we are of the view that the trial court is legally correct in decreeing the suit for specific performance in favour of the respondent. From the evidence, it is found that the respondent is entitled to get a prohibitory injunction against the appellants from alienating the property to strangers and also from committing acts of waste in the property. Consequently, the suit filed by the respondent against the appellants for injunction has been rightly dismissed. However, as observed by the Apex Court in K.Prakash 's case (supra), it may be unfair to ignore the reality that Ext.A1 was executed nearly 22 years before. The property lies in the periphery of Calicut City. It is common knowledge that the land value in the State has increased many fold during this interval. Therefore, we find that it may work out injustice to the appellants, if they are made to assign the property for the value

¶75

¶76

AS Nos.433, 443 & 448/1999

¶77

stipulated in Ext.A1. Although the appeal was filed at the instance of the vendors, entire blame for the delay in getting the appeal disposed of cannot be put on them. Therefore, in the interest of justice, we are of the view that the respondent/plaintiff should be directed to pay a reasonable price for the land. The respondent as per I.A.No.381 of 2016 produced a certificate issued from the Village Office, Valayanad, within which the property is situate, which shows that even the fair value fixed for lands in the area under Section 28A of the Kerala Stamp Act per are (2.47 cents) is `1,00,000/-. Admittedly, the property is nearly 15 cents. The land is close to Calicut City. It is common knowledge that the fair value fixed by the Government is always much lesser than the actual market value. Reckoning all these aspects, we modify the decree passed by the court below in the following manner to meet the ends of justice.

¶78

Resultantly, A.S.Nos.443 and 448 of 1999 are dismissed. A.S.No.433 of 1999 is partly allowed by modifying the decree passed in O.S.No.857 of 1994 on the file of the Sub Court, Kozhikode. The respondent/plaintiff shall pay consideration for the sale of the plaint schedule property at the rate of `1,00,000/- per cent and the amount shall be paid within a period of three months from today with notice to the appellants/defendants. In that event, the appellants shall execute a sale

¶79

¶80

AS Nos.433, 443 & 448/1999

¶81

deed in respect of the plaint schedule property in favour of the respondent within a period of 15 days, failing which the trial court shall execute the document by invoking power under Section 28 of the Specific Relief Act if the respondent makes an application therefor. The parties are directed to suffer their respective costs.

¶82

All pending interlocutory applications will stand dismissed.

¶83

ANTONY DOMINIC, JUDGE.

¶84

A. HARIPRASAD, JUDGE.

¶85

cks

¶86

¶87

AS Nos.433, 443 & 448/1999

¶88