Partly allowed

K.Ummer Haji v. Kunhimoosa

Kerala HC14 Mar 2018RFA/26/2010

Case brief

AI extract

What is this about?

In an appeal against the dismissal of a suit for specific performance of an agreement for sale, the High Court of Kerala held that the seller was not in breach. The Court modified the lower court's decree byEnhancing interest rates on the refund of the advance payment from 6% to 12% per annum, along with supporting costs.

What did the court decide?

Refund of Rs.5 lakhs with interest at 12% per annum from the date of suit till realization; decree debt as a charge on the property.

K.Ummer Haji Vs Kunhimoosa — Specific Performance | Kerala HC (2018)

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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 A.M.SHAFFIQUE &

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THE HONOURABLE MR. JUSTICE P.SOMARAJAN

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WEDNESDAY, THE 14TH DAY OF MARCH 2018 / 23RD PHALGUNA, 1939

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RFA.No. 26 of 2010

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AGAINST THE ORDER/JUDGMENT IN OS 423/2007 of II ADDL.SUB COURT,ERNAKULAM DATED 25-08-2009

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APPELLANT/PLAINTIFF

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K.UMMER HAJI, S/O MUHAMMED HAJI, KIZHAKKUMPURATH HOUSE, PULLOOKKARA,, PERINGATHOOR VILLAGE, THALASSERY TALUK.

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BY ADV.SRI.MAHESH V RAMAKRISHNAN

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RESPONDENT(S)/DEFENDANT:

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KUNHIMOOSA, S/O MOIDU, JEMI PALACE, AZHIYOOR AMSOM, VADAKARA TALUK.[DIED LR'S IMPLEADED]

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*Addl.2. MAMMALIKANDI ASHRAF S/O.ANDRU, "DAYA MANZIL", KANOOKARA PO., VATAKARA, KOZHIKODE DISTRIT.

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(*IMPLEADED AS ADDITIONAL RESPONDENT NO.2 VIDE ORDER DATED 26.7.11 IN IA 1553/11)

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LEGAL REPRESENTATIVES OF DECEASED 1ST RESPONDENT ARE IMPLEADED AS

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ADDL.RESPONDENTS 3 TO 8 VIDE ORDER DATED 22/2/2016 IN IA NO.1556/13.

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ADDL.R3 TO 8

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Addl.3. SAINABA W/O.LATE KUNHIMOOSA, AGED 55 YEARS, JEMI PALACE, AZHIYOOR AMSOM, VADAKARA TALUK, PIN - 673 101.

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Addl.4. MUMTHAZ D/O.LATE KUNHIMOOSA, AGED 35 YEARS, JEMI PALACE, AZHIYOOR AMSOM, VADAKARA TALUK, PIN - 673 101. Addl.5. ASHRAF S/O LATE KUNHIMOOSA, AGED 32 YEARS, JEMI PALACE, AZHIYOOR AMSOM, VADAKARA TALUK, PIN - 673 101. Addl.6. SAAJITHA D/O.LATE KUNHIMOOSA, AGED 28 YEAS, JEMI PALACE, AZHIYOOR AMSOM, VADAKARA TALUK, PIN - 673 101.

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RFA NO.26/2010

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Addl.7. SAABIRA D/O.LATE KUNHIMOOSA, AGED 23 YEARS, JEMI PALACE, AZHIYOOR AMSOM, VADAKARA TALUK, PIN - 673 101. Addl.8. NOORA D/O LATE KUNHIMOOSA, AGED 20 YEARS, JEMI PALACE, AZHIYOOR AMSOM, VADAKARA TALUK, PIN - 673 101. R1 BY ADV. SRI.K.RAKESH ROSHAN R1 BY ADV. SMT.THUSHARA.V RADDL.2 BY ADV. SMT.K.PUSHPAVATHI RADDL.2 BY ADV. SMT.NITHYA SASI RADDL.3-R8 BY ADV. SRI.SEBASTIAN JOSEPH (KURISUMMOOTTIL) BY ADV. SRI.P.VISWANATHAN

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THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 1-02-2018, THE COURT ON 14/3/2018 DELIVERED THE FOLLOWING:

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A.M.SHAFFIQUE & P.SOMARAJAN, JJ

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R.F.A. No. 26 of 2010

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- - - - Dated this the 14^th day of March, 2018

JUDGMENT

SHAFFIQUE, J.

The plaintiff in O.S.No. 423/2007 is the appellant. He challenges judgment dated 25.8.2009 by which the suit for specific performance of an agreement for sale stands dismissed.

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The short facts as averred in the plaint are as under:

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The plaintiff and defendant entered into an agreement for sale dated 10.3.2006 (Ext.A1). The property which was sought to be assigned was having an extent of 9.408 cents in Sy 512/4 of Ernakulam Village. The total sale consideration mentioned in the agreement was Rs.58, out of which Rs.5 lakhs was paid as advance. As per the terms of the agreement the defendant agreed to assign the property free from all encumbrances within a period of 3 months from the date of agreement. Plaintiff contended that he was all along ready and willing to perform his part of agreement, but the defendant having failed to provide an unencumbered marketable title and even measure the property to the satisfaction of the plaintiff, the plaintiff did not pay the balance sale consideration. Despite sending registered letter, the defendant was not ready to perform his part of the contract. In the alternative, he

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R.F.A. No.26 of 2010

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filed a suit for specific performance with an alternate prayer for recovery of Rs.5 lakhs paid as advance with interest and cost.

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Defendant filed a written statement inter alia contending that though he was ready and willing to execute the sale deed, since the plaintiff did not turn up to pay the balance sale consideration within the stipulated time, the defendant had no obligation to execute the agreement. He also averred that he sustained a loss of Rs.25 lakhs since the plaintiff did not pay the balance sale consideration within the stipulated time.

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Before the trial court, PW1 and 2 were examined on the side of the plaintiff and marked Exhibits A1 to A16. The defendant was examined as DW1 and Exts.B1 and B2 were marked. The trial court found that there was laches on the part of the plaintiff in paying the balance sale consideration and therefore the plaintiff was not entitled for specific performance. However, the court below directed refund of the advance amount to the plaintiff.

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Learned counsel for the appellant while impugning the aforesaid judgment contended that the court below had committed serious error in appreciating the factual situation involved in the matter. It is argued that the defendant had undertaken to measure the property and also to provide the plaintiff with all the title deeds

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and documents relating to the property, which was one of the term of contract, the defendant having failed to do so, it clearly amounts to breach of contract on the part of defendant alone. This aspect has been completely ignored by the court below while deciding the case is the contention.

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The short question to be considered in this appeal is whether the non performance of contract was on account of the inaction on the part of the defendant or not. Ext.A1 is the agreement dated 10.3.2006. There is no dispute between the parties regarding the execution of the agreement. The plaintiff has paid Rs.5 lakhs as advance and has agreed to pay the balance sale consideration on the following conditions: (i) The plaint schedule property has to be measured and the measurement has to be accepted by the plaintiff. (ii) On payment of the balance sale consideration, the sale deed will have to be executed by the defendant at the expense of the plaintiff. (iii) On execution of the sale deed, possession of the property has to be handed over by the defendant to the plaintiff. (iv) In default of the payment of the balance sale consideration during the specified time, the plaintiff will have to compensate the defendant for the loss suffered by him and on the defendant committing breach of contract, it shall be open for the plaintiff to take legal action and the defendant will

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be liable for all loss and damages that may be suffered by the plaintiff. The prior documents, tax receipt, encumbrance certificate, sketch of the property and all other documents have to be given by the defendant to the plaintiff within a specified time. The period for complying with the aforesaid contract was 3 months from date of agreement.

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Therefore, as per the terms of Ext.A1 agreement, the contract has to be performed by either side on or before 9.6.2006. The plaintiff by notice dated 27.5.2006 (Ext.A2) reminded the defendant that, though the time for performing the agreement was getting over, the defendant had not taken steps to measure the property or to produce the 'Pattayam' and prior title deeds. Further, document also is to be produced to ensure that there is no encroachment into the property. He also stated that he is having sufficient funds to pay the balance sale consideration and there is no reason to delay the same any further. He therefore called upon the defendant to make available all records in terms of agreement and to execute the sale deed.

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Ext.A4 is the reply sent by the defendant to plaintiff. It is stated that he had handed over the certified copies of all records to plaintiff. As far as 'Patta' is concerned, it has not been received so far which aspect was known to the plaintiff and that was the reason why

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there is no reference to the 'Patta' in the agreement itself. He therefore called upon the plaintiff to pay the balance sale consideration within the specified time and to get the document registered. Apparently, dissatisfied with the attitude of the plaintiff, the defendant issued a lawyer's notice dated 5.6.2006 stating that, he had handed over all necessary documents for execution of the sale deed and the plaintiff was called upon to pay the balance sale consideration and to get the sale deed registered in his name. Ext.A6 is the reply dated 24.6.2006 sent by the counsel for plaintiff to the defendant's counsel inter alia reiterating his earlier stand. However it was stated that the defendant's intention is to back out from the obligations under the agreement. The plaintiff therefore informed the defendant that he is ready and willing to perform his part of the contract only if the defendant perform his obligation and if he fails to do so, he will demand return of advance amount with 24% per annum.

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Ext.A8 dated 24.6.2006 is the reply sent by the defendant to the plaintiff inter alia stating that he had suffered a loss of Rs.25 lakhs since the plaintiff did not perform the contract within the stipulated time. The suit was filed on 29.5.2007. The plaintiff further produced Exts. A9 to A16 which includes various documents such as pass books, bank statements etc, in order to prove that he was in

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possession of sufficient funds at the relevant time for purchasing the property. PW1 is the plaintiff himself who has spoken in accordance with his pleadings. PW2 is one Basheer. He claims that he is a middle man in respect of the sale of property. In his affidavit he stated that he had also approached the defendant seeking for various documents and 'Patta' for preparation of the title deed. But the defendant was avoiding stating one reason or other. In cross examination, he stated that when the agreement was executed, defendant had given copies of the prior title deed. He further deposed that the defendant had backed out of the agreement for the reason that he had no 'Patta'. However he paid tax. He understood that defendant has 'jenmam rights'. But he did not see patta. He also admits that the original of prior documents will be given only at time of sale.

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From the materials placed on record it is evident that the plaintiff had called upon the defendant to measure the property, prepare a sketch and to provide prior title deed and 'Pattayam' along with non encroachment certificate. PW1 admits that photocopies of prior documents were given at the time when Ext.A1 agreement was executed. This fact was admitted by PW2 also. However, plaintiff demanded 'Pattayam' as well. According to the defendant, he did not

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have the 'Pattayam' in respect of the property and it is not a condition specified in the agreement. If the plaintiff had dispute regarding the title to the property, necessarily he need not have sought for specific performance of the contract, whereas he could have confined his relief to the recovery of advance amount paid. Hence it was apparent that the demand for 'Patta' was only as a ruse to delay the purchase of property. As far as the measurement of the propriety was concerned, agreement itself provides that the property was required to be measured. But the value of the property is not based on any centage basis and a consolidated amount of Rs.58 lakhs is shown as consideration. However, it is the obligation of the defendant to measure the property and prepare a sketch. If that was the only reason it would have been in a different manner. But in this case plaintiff seeks for a 'Patta' which apparently the defendant did not have and further in Ext.A6 notice he has virtually asked for the refund of the advance paid.

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In the case on hand, total sale consideration was Rs. 58 lakhs and only an amount of Rs. 5 lakhs was paid as advance. The court below having found that the plaintiff was responsible for breach of contract, directed refund of advance with interest at the rate of 6% per annum.

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This is a case in which by Ext.A6 notice plaintiff himself has sought for refund of advance amount rather than to proceed for a litigation in the matter. But the said amount was not refunded by the defendant alleging that he had suffered a loss of Rs.25 lakhs and the advance amount was adjusted towards the said loss. But no evidence has been adduced before the court to prove that he has suffered any loss at all. Therefore, it would be appropriate for the defendant to refund the advance amount then and there rather than compelling him to file a suit. The plaintiff claimed interest at the rate of 12% per annum. However the court below granted future interest at the rate of 6% per annum.

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We are of the view that, when the defendant had an opportunity to avoid a litigation by refunding the advance amount, especially when he has not suffered any loss or damage on account of the inaction on the part of plaintiff in not purchasing the property, the defendant becomes liable to compensate for the delay in refunding the advance. Taking into consideration the over all facts and circumstances, we are of the view that the plaintiff ought to have been given a decree for refund of the advance with interest at the rate of 12% per annum instead of 6% per annum.

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The defendant died during the pendency of appeal and his legal

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heirs have been impleaded as the additional respondents 3 to 8. Accordingly, while rejecting the plea of specific performance, the appeal is partly allowed, modifying the decree passed by court below as under:

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(i) The plaintiff is allowed to recover from the defendant Rs.5 lakhs with interest at the rate of 12% per annum from the date of suit till realisation with cost.

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(ii) The decree debt shall be a charge on the plaint schedule property.

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(iii) Legal heirs of the defendant's liability is only to the extent of property inherited by them from the defendant.

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Sd/-

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A.M.SHAFFIQUE, JUDGE

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Sd/-

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P.SOMARAJAN, JUDGE

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K.Ummer Haji v. Kunhimoosa

Case brief

What is this about?

What did the court decide?

K.Ummer Haji v. Kunhimoosa

Case brief

What is this about?

What did the court decide?

What the court decided

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