Partly allowed

K.a.Mohammed v. Ibrahim

Kerala HC22 Aug 2019RFA/5/2010

Case brief

AI extract

What is this about?

The High Court of Kerala set aside the trial court's decree granting specific performance of an agreement for sale. Relying on equity, the court held it was unfit to enforce the sale due to the defendants' financial crisis and undervaluation, instead awarding compensation and accelerated return of advances.

What did the court decide?

Decree for specific performance set aside; suit decreed for return of advance with 12% interest plus additional compensation of Rs 5 lakhs.

K.a.Mohammed Vs Ibrahim — Specific Performance | Kerala HC (2019)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR. JUSTICE SATHISH NINAN

¶4

THURSDAY, THE 22ND DAY OF AUGUST 2019 / 31ST SRAVANA, 1941

¶5

RFA.No.5 OF 2010

¶6

AGAINST THE JUDGMENT AND DECREE IN OS 26/2006 DATED 31-10-2009 OF SUB COURT, CHERTHALA

¶7

APPELLANTS/DEFENDANTS:

¶8

1 K.A.MOHAMMED, S/O.AHAMMED, PEEDIKACHIRAYIL, NOW RESIDING AT KATTUNGAL, CHANDIROOR, AROOR VILLAGE, CHERTHALA TALUK.

¶9

2 NASEEMA, W/O. MOHAMMED, KATTUNGAL CHANDIROOR, AROOR VILLAGE, CHERTHALA TALUK.

¶10

BY ADVS.

¶11

SRI.S.SANAL KUMAR SMT.BHAVANA VELAYUDHAN

¶12

RESPONDENT/PLAINTIFF:

¶13

IBRAHIM,

¶14

S/O.SYED MOHAMMED, SOUDIYA HOUSE, VELEEPARAMBIL, CHANDIROOR,, AROOR VILLAGE, CHERTHALA TALUK.

¶15

R1 BY ADV. SRI.R.AZAD BABU

¶16

THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 21.08.2019, THE COURT ON 22.08.2019 DELIVERED THE FOLLOWING:

¶17

SATHISH NINAN, J.

¶18

= = = = = = = = = = = = = = = = = = RFA No.5 of 2010

¶19

= = = = = = = = = = = = = = = = = = Dated this the 22^nd day of August, 2019

¶20

J U D G M E N T

¶21

A decree for specific performance is under challenge by the defendants.

¶22

Ext.A1 agreement dated 01.10.2005 is sought to be specifically performed. Ext.A1 relates to 14 cents of property with a residential building thereon. As per Ext.A1, the total consideration fixed was `10,50,000/-, out of which an amount of

¶23

`5 lakhs is stated to have been paid towards advance sale consideration. The period fixed for performance is six months. Alleging failure on the part of the defendants to perform Ext.A1 agreement, the suit is filed.

¶24

The defendants denied the genuineness of Ext.A1. According to them, they had availed a loan of `50,000/- from the plaintiff and as required by him, a signed blank paper was entrusted by them to the plaintiff which has been misutilised and Ext.A1

RFA No.5 of 2010

:- 2 :-

fabricated.

On analysing the evidence, the trial court upheld the genuineness of Ext.A1 and granted a decree for specific performance.

¶29

Heard learned counsel Sri.S.Sanal Kumar, on behalf of the appellants-defendants and Sri.R.Azad Babu, learned counsel for the respondent-plaintiff.

¶30

To prove the execution of Ext.A1 agreement, both the witnesses to Ext.A1 were examined as PWs.2 and 3. The scribe of Ext.A1 was examined as DW2. They spoke about the execution of Ext.A1. Though the witnesses were cross-examined at length, nothing could be brought out to discredit their evidence. The trial court has accepted their evidence and held Ext.A1 to be genuine. I do not find any reason to enter a contrary finding. Therefore, the finding of the trial court regarding the genuineness of Ext.A1 agreement is only to be upheld and I do so.

¶31

Having found Ext.A1 agreement to be a genuine document, the recital in Ext.A1 that an amount of `5 lakh has been paid towards advance

¶32

RFA No.5 of 2010

¶33

:- 3 :-

¶34

sale consideration, is liable to be accepted. Though the defendants relied on Exts.B1 to B8 receipts evidencing discharge of an amount of 1 lakh and odd towards another liability during the period, to fortify their contention that only 50,000/- was received by them, those documents are not sufficient enough to enter a finding regarding the consideration that passed under Ext.A1. I concur with the finding of the trial court that, under Ext.A1 an amount of `5 lakhs was paid towards advance sale consideration.

¶35

Having its roots in equity, a decree for specific performance is not to be granted merely on finding that the agreement for sale is genuine. The various circumstances surrounding the execution of Ext.A1 is also liable to be considered while exercising the discretion whether to grant a decree for specific performance or not. It is not in dispute, and is rather substantiated by the materials on record that, at the time of entering into Ext.A1 agreement, the defendants were in

¶36

RFA No.5 of 2010

¶37

:- 4 :-

¶38

severe financial crisis and owed debts to various institutions. As is evidenced from the recitals in Ext.A1 agreement itself, the property was mortgaged to financial institutions. There were other debts also. It was in the said background that the defendants were necessitated to enter into Ext.A1 agreement. The subject matter of Ext.A1 is the residential property of the defendants wherein they are residing with family. Though it has come out in evidence that the defendants have another property having an extent of 17 cents, it does not contain any residential building. The plaintiff as PW1 has admitted in cross-examination that the residential building situated in the property is a concrete building and that as on the date of his examination before the court, which is in the year 2009, the

¶39

building alone will fetch a value of 15 lakhs. As noticed supra, Ext.A1 agreement is of the year 2005 and the total consideration fixed therein for 14 cents of property with the building is only 10,50,000/-. A concrete structure in the property

¶40

RFA No.5 of 2010

¶41

:- 5 :-

¶42

will definitely have depreciation. The sale consideration fixed in Ext.A1 for the 14 cents with the building is much less than the value of the building situated in the property. The only inference possible is that, it was in the peculiar situation in which the defendants were placed, which compelled them to enter into Ext.A1 agreement. The grant of a decree for specific performance in the above background would be highly unequitable and unjust. This is a fit case where the discretion has to be exercised to refuse a decree for specific performance. This aspect has not been considered by the trial court. Therefore, I am inclined to interfere with the decree and judgment of the trial court granting a decree for specific performance. The decree for specific performance is accordingly set aside.

¶43

The plaintiff has an alternate prayer for return of the advance sale consideration with interest. Necessarily the defendants are bound to return the amount with interest. The plaintiff has claimed interest at 18%. This is essentially as a

¶44

RFA No.5 of 2010

¶45

:- 6 :-

¶46

claim for compensation. The rate of interest, I fix at 12%.

¶47

It has been found that Ext.A1 is a genuine agreement. The relief for specific performance has been declined by exercising the jurisdiction in equity. Since the non-performance of Ext.A1 is not due to any fault of the plaintiff, the plaintiff is to be adequately compensated. Section 21(2) of the Specific Relief Act, 1963 reads thus:-

¶48

“ 21. Power to award compensation in certain cases

¶49

(1) In a suit for a specific performance of a contract, the plaintiff may also claim compensation for its breach in addition to such performance.

¶50

(2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.

(3) xxxxx

(4) xxxxx

(5) xxxxx”

Taking into consideration the advance sale consideration paid, the value fixed under Ext.A1

¶55

RFA No.5 of 2010

¶56

:- 7 :-

¶57

and the value of the building alone that is situated in the property, and the rise in prices, I

¶58

deem it appropriate to fix an amount of `5 lakhs as compensation payable by the defendants to the plaintiff on account of breach of Ext.A1 agreement. Needless to say that this is in addition to the repayment of the advance sale consideration with interest.

¶59

In the result, the decree and judgment of the trial court is set aside. The suit is decreed on the following terms:-

¶60

(1) The plaintiff is granted a decree for

¶61

realisation of an amount of `5 lakhs with interest at the rate of 12% per annum from the date of agreement (01.10.05) till date of suit and thereafter also at the same rate till realisation.

¶62

(2) The defendant shall pay an amount of `5 lakhs as compensation to the plaintiff, payable within a period of three months from today. In case of failure on the part of the defendants to pay the

¶63

said amount of `5 lakhs within the stipulated

¶64

RFA No.5 of 2010

¶65

:- 8 :-

¶66

period, the plaintiff shall be entitled to recover the same from the defendants with interest at the rate of 12% thereon from this date till date of recovery.

¶67

(3) The amounts payable as above shall be a charge over the plaint schedule property and the plaintiff shall be entitled to realise the same by sale of it and also from the defendants personally and their assets.

¶68

(4) No costs.

¶69

Sd/SATHISH NINAN JUDGE

kns/-

//True Copy//

P.S. to Judge

RFA No.5 of 2010

:- 9 :-

K.a.Mohammed v. Ibrahim

Case brief

What is this about?

What did the court decide?

K.a.Mohammed v. Ibrahim

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Usha Kumari Amma Vs Devaki Amma @Ammini Amma

Nanukuttan Swami Vs B.Baby

Wilsy K., Vs State of Kerala

Anoj S. Vs Viswanatha Pillai

Rajamma Vs Mary @ Ammani

Olakkara Abdul Hameed Vs Olakkara Kadiyumma