Allowed

V.P.Poulose v. Balagodavarma

Kerala HC14 Jun 2017AS/424/2001

Case brief

AI extract

What is this about?

The High Court allowed the appeal challenging a decree for specific performance. The court held that the agreement was executed to secure a loan, not a genuine sale. Consequently, it set aside the decree for specific performance and instead granted the plaintiff a decree for realization of the advanced loan amount with interest and execution costs. The court also directed 12% interest on the invok

What did the court decide?

Decree for specific performance set aside; Plaintiff granted decree for realization of Rs.1 lakh with 12% interest and execution costs from defendants as a charge on the property.

V.P.Poulose Vs Balagodavarma — Specific Performance | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE SATHISH NINAN

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WEDNESDAY, THE 14TH DAY OF JUNE 2017/24TH JYAISHTA, 1939

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AS.No. 424 of 2001 ( ) -----------------------

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AGAINST THE JUDGMENT AND DECREE IN OS.142/1995 of ADDL.SUB COURT,NORTH PARAVUR DATED 31-01-2001

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APPELLANTS/DEFENDANTS:

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1. V.P.POULOSE, S/O VARIAMPURATH PAILY, VARIAMPURATH HOUSE, KIZHAKAMBALAM P.O, ERNAKULAM DISTRICT.

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2. PAILY, S/O VARKEY, VARIAMPURATH HOUSE, KIZHAKAMBALAM P.O, ERNAKULAM DISTRICT.

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BY ADV. SRI.RENNY AUGUSTINE

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RESPONDENT/PLAINTIFF:

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1. BALAGODAVARMA, S/O M.N.RAVIVARMA, RESIDING AT G-44, PANAMPILLY NAGAR, KOCHI-36.

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ADDL.R2. M/S VEEGA HOLIDAYS AND PARKS PVT. LTD., REPRESENTED BY ITS MANAGING DIRECTOR KOCHOUSEPH CHITTILAPPALLY, CHITTILAPPALLY HOUSE, VENNALA, ERNAKULAM PIN 682028.

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R3. A.V.BABY, S/O ANJILIMOOTTIL VARKEY, ANJILIMOOTTIL HOUSE, KIZHAKKAMBALAM. R4. A.V.KURIAKOSE, S/O -DO- -DO-

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R1 BY ADV. SRI.V.V.ASHOKAN (SR.) ADV. SRI. K.I MAYANKUTTY MATHER ADV. SMT.S.LAKSHMI R2 BY ADV. SRI.HARINARAYANAN

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ADDITIONAL R2 TO R4 ARE IMPLEADED VIDE ORDER DATED 29.05.2008 IN I.A No.1421/2008

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THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 09-06-2017, THE COURT ON 14.06.2017 DELIVERED THE FOLLOWING:

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V.Chitambaresh & Sathish Ninan, JJ. ============================== A.S No.424 of 2001

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========================== Dated this the 14^th day of June, 2017

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JUDGMENT

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Sathish Ninan, J

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1. Challenging a decree for specific performance of

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an agreement for sale, the defendants have come up in appeal.

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Ext.A1 is the agreement for sale dated 18.08.1994

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executed by the defendants in favour of the plaintiff. As per Ext.A1, the extent of the property agreed to be conveyed is 87.83 Ares. The total sale consideration is Rs.2,20,000/- at the rate of Rs.1000/- per cent. Out of the total sale consideration, an amount of Rs. 1 lakh is paid as advance. The sale deed was agreed to be executed within a period of six months. Alleging refusal on the part of the defendants to execute the sale deed in terms of Ext.A1, the suit was filed.

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The defendants contended that there were various

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business dealings between the defendants and the

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A.S No.424/2001

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plaintiff. The defendants are manufacturers of printing ink. The plaintiff used to purchase ink from the defendants and sell it to 'Mathrubhumi'. In the course of the business dealings, the defendants went into financial constraints and borrowed an amount of Rs.1 lakh from the plaintiff. The plaintiff required a signed blank cheque and also an agreement for sale as security for the amount. According to the defendants, the said agreement has been mis-utilized by the plaintiff and the suit for specific performance has been filed.

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The court below found that Ext.A1 agreement was one

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executed by the defendants, that an amount of Rs.1 lakh was paid as advance sale consideration and that there are no other circumstances disentitling the plaintiff for a decree for specific performance, and accordingly granted a decree as sought for.

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A.S No.424/2001

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We have heard learned counsel Sri.Renny Augustine on

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behalf of the appellant and learned senior counsel Sri.V.V.Ashokan on behalf of the respondent.

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For a proper analysis of the case, it is necessary

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to refer to the relevant portion of the written statement wherein the agreement for sale has been

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adverted to.

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“Towards security for the advance the plaintiff wanted a blank cheque duly signed by the 1^st defendant and also an agreement for sale of the 1^st defendant's property. On 24.08.94 the plaintiff issued the cheque to the 1^st defendant for Rs.1,00,000/- and got the blank cheque and other papers signed by the defendants.

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x x x x x x x

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The plaintiff filled up the blank cheque for Rs.1,00,000/-(Rupees one lakh) in the name of his father M.N.Ravivarma and presented the cheque. Subsequently the plaintiff caused to issue suit notice for specific performance of an agreement

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A.S No.424/2001

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purported to be of 18.8.94 and

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plaintiff's father M.N Ravivarma on the cheque.”

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It is the definite plea of the defendants that

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towards security for repayment of Rs. 1 lakh borrowed by them from the plaintiff, the plaintiff required an agreement for sale to be executed in his favour in addition to a signed blank cheque. The court below has proceeded to consider whether the defendants have executed Ext.A1 agreement for sale. However, going by the pleading of the defendants, as noticed supra, it is their very case that the plaintiff wanted an agreement for sale to be executed in his favour. The attempt of the court below was to find out if Ext.A1 document was genuine one or whether it is a fabricated one. We are not oblivious to the fact that at the time of evidence the defendants have attempted to project a defence of denial of having signed Ext.A1 and that signed blank papers have been misused

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A.S No.424/2001

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by the plaintiff. As pointed out by the court below, the signatures of the defendants in Ext.A1 appear not only on the bottom of the document but also at a place where some corrections are made. That definitely indicates and negatives any occassion of fabrication of Ext.A1 agreement on signed blank stamp papers. Even otherwise, any amount of evidence at variance from the pleadings is of no avail. Anyhow, all these may not be of much significance since the very pleading of the defendants is that the plaintiff wanted an agreement for sale to be executed in his favour. The cheque issued by the 1^st defendant was dishonoured whereupon a complaint was filed by the payee therein, who is the plaintiff's father as C.C No.157 of 1995, which ended in acquittal as is evidenced by Ext.B2 judgment. It is brought to our notice that the judgment is challenged in appeal and is pending.

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A.S No.424/2001

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8. It could not be disputed that there were business

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dealings between the parties for quite some time. The case of the defendants that Ext.A1 agreement for sale was only to secure the loan amount of Rs.1 lakh availed by them from the plaintiff cannot be brushed aside. It is more so in the backdrop of the proceedings under Section 138 of the Negotiable Instruments Act, 1881 initiated against the 1^st defendant by the plaintiff's father for dishonour of cheque for Rs.1 lakh. Whatever that be, it will

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suffice to conclude that from the facts and circumstances of the case, a financial transaction between the parties secured by an agreement for sale couldnot be brushed aside. The circumstances would

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suggest that Ext.A1 was executed to secure a debt. The upholding of the genuineness of Ext.A1 agreement for sale by itself does not entitle the plaintiff for a decree of specific performance. The court is not

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A.S No.424/2001

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bound to grant a decree for specific performance merely because it is lawful to do so. The court has to exercise its judicial discretion reserved under Section 20 of the Specific Relief Act, 1963. The court is bound to consider the entire facts and circumstances of the case and the true nature of the transaction between the parties. The litigation shall

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not be clothing the plaintiff with an unfair advantage over the defendant. The court has to satisfy itself that the circumstances are such that it is equitable to grant a decree for specific performance of the contract. The judgments on the point are umpteen (See Parakunnam Veetill Joseph's Son Mathew v. Nedumpara Kuruvila's Son and Others - AIR 1987 SC 2328 and Laxman Tatyaba Kankate and

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Another v. Smt.Taramati Harischandra Dhatrak - AIR 2010 SC 3025 ). Though the court below has exercised its discretion to grant a decree of specific

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A.S No.424/2001

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performance, as the very section states, the exercise of discretion is subject to correction by a court of appeal. Here, as pointed out supra, an instance of mere monitary transaction cannot be ruled out. In the circumstances, we feel that the discretion should be exercised against the plaintiff. The grant of the alternate relief of refund of the amount paid with interest would meet the ends of justice. The decree and judgment of the court below granting specific performance is liable to be interfered with.

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It is brought to our notice that in spite of a decree of prohibitory injunction against alienation, the defendants have conveyed portions of the property to strangers. The said fact is not disputed. We look down upon the action of the appellants/defendants in having flagrantly violated the judgment of the court below. Since the defendants alienated portions of the property flouting the decree of injunction and have

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A.S No.424/2001

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also enjoyed the benefit of the amount received from the plaintiff, we feel that it is only just and proper that the defendants be directed to pay interest at the rate of 12% on the amount of Rs.1 lakh. Pursuant to the decree passed by the court below, in execution, a sale deed has been executed through court in favour of the plaintiff. Since the decree for specific performance is being interfered with, necessarily the plaintiff would be entitled to the cost of stamp papers and other incidental expenses as certified by the court below for getting the sale deed executed and registered. The plaintiff is entitled for a decree to realise the said amount also from the defendants.

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In the result, the appeal is allowed. The decree

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and judgment of the court below are set aside. The plaintiff is granted a decree for realisation of an amount of Rs.1 lakh with interest at the rate of 12%

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A.S No.424/2001

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per annum from 18.08.1994 till the date of decree and thereafter also at the same rate till realisation in full, the costs incurred for execution and registration of sale deed through court as may be certified by the court below and also the costs through out the proceedings from the defendants personally and also as a charge on the plaint schedule property.

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Sd/- V.Chitambaresh, Judge

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Sd/- Sathish Ninan, Judge

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vdv

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/True Copy//

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P.A to Judge

V.P.Poulose v. Balagodavarma

Case brief

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V.P.Poulose v. Balagodavarma

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