Allowed

Kerala Kumar v. K.P.Sathyanathan Nair and Others

Kerala HC19 Jul 2019RFA/684/2010

Case brief

AI extract

What is this about?

The High Court allowed the appeal against the trial court's refusal of specific performance. It held that since the breach was the vendor's fault, specific performance must be granted for the available land, with a right to proportionately reduce the purchase price.

What did the court decide?

Specific performance of contract for available land; order for measurement of land with rateable reduction of consideration.

Kerala Kumar Vs K.P.Sathyanathan Nair and Others — Specific Performance | Kerala HC (2019)

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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.HARIPRASAD

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THE HONOURABLE MRS. JUSTICE SHIRCY V.

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FRIDAY, THE 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941

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RFA.No.684 of 2010

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AGAINST THE JUDGMENT IN OS 108/2006 of PRINCIPAL SUB COURT,NORTH PARAVUR DATED 30-01-2010

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APPELLANTS/PLAINTIFF/DEFENDANTS 2 AND 3:

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1 KERALA KUMAR, S/O. M.N.KRISHNAN BHATTATHIRIPPAD, MULLAMANGALATH MANA, VADAKKEKAD POST, VADAKKEKAD VILLAGE, CHAVAKKAD TALUK.

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2 NAM HARIHARA SAHASRA (TRANSPOSED AS R5), S/O.HARIHARAN,KALAMANGALAM HOUSE, SRM ROAD, PACHALAM POST, ERNAKULAM-682 012, PRESENTLY RESIDING AT APT.NO.104, STARLING APARTMENTS, PUR DUBAI AREA, P/B NO.54365, DUBAI UAE.

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3 JIJI TOMMY (TRANSPOSED AS R6) W/O. TOMMY JOSEPH,PUNNAPPUZHA HOUSE, MANAKUNNAM VILLAGE,3/595, PARAVOOR MURI, KANAYANNUR TALUK, PRESENTLY RESIDING AT SEDAR VILLA, BLOCK 19, VILLA-11, POST BOX NO.250305, RIYAD-11391

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BY ADVS. SRI.P.SANKARANKUTTY NAIR SRI.K.SANDESH RAJA

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RESPONDENTS/DEFENDANTS 1 AND 4 TO 6:

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1 K.P.SATHYANATHAN NAIR S/O. PARAMESWARAN PILLAI, 5C, CONCERT O' CASTLE, PANAMPILLY NAGAR, ERNAKULAM. (DIED)

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2 PADMAVATHI AMMA, W/O. K.P.SATHYANATHAN NAIR, 5C, CONCERT O' CASTLE, PANAMPILLY NAGAR, ERNAKULAM.

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RFA.No.684 of 2010

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3 SUNIL, S/O. K.P.SATHYANATHAN NAIR 5C, CONCERT O' CASTLE, PANAMPILLY NAGAR,, ERNAKULAM.

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4 LAKSHMI, W/O. SAJEEV PADIYATH 5C, CONCERT O' CASTLE, PANAMPILLY NAGAR,, ERNAKULAM.

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**** R5 AND R6 TRANSPOSED 5 NAM HARIHARA SAHASRA S/O.HARIHARAN,KALAMANGALAM HOUSE,S.R.M ROAD,PACHALAM POST,ERNAKULAM-682012, PRESENTLY RESIDING AT APT.NO.104, STARLING APARTMENTS,PUR DUDAI AREA, P/B NO.54365,DUBAI UAE. 6 JIJI TOMMY W/O.TOMMY JOSEPH,PUNNAPPUZHA HOUSE,MANAKUNNAM VILLAGE,3/595, PARAVUR MURI,KANAYANNUR TALUK,PRESENTLY RESIDING AT SEDAR VILLA,BLOCK 19,VILLA-11,POST BOX NO.250305,RIYAD-11391

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APPELLANTS 2 AND 3 TRANSPOSED AS RESPONDENTS 5 AND 6 AS PER ORDER DATED 30.9.11 IN IA 2936/2011.

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BY ADV. KUM.VIDYA MENON FOR R5 AND R6

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THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 19.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

RFA.No.684 of 2010

JUDGMENT

The plaintiff in O.S.No.108/2006 before the Principal Sub Court, North Paravur is the appellant. He challenges the judgment and decree of the trial court in a suit for specific performance, dissatisfied for the reason that the court below refused specific performance of contract, instead granted a relief of return of the advance money with interest alone.

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Heard the learned counsel for the appellant.

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Despite service of notice on the defendants in the suit (respondents), there is no appearance for them.

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Brief facts relevant for disposal of the case are as

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follows:

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The first defendant (who died subsequently) is the owner of the property and that fact is not disputed. Plaintiff (appellant) and respondent Nos.5 and 6 entered into an agreement with the deceased 1^st defendant to assign property. As per the terms in Ext.A1, an approximate extent of 6 acres and 18 cents belonging to the first defendant was agreed to be purchased by the plaintiff

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RFA.No.684 of 2010

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and defendants 2 and 3 for a total sale consideration of Rs.60 lakhs. Ext.A1 would reveal that it was executed on 7.11.2005. On the date of Ext.A1, a sum of Rs.20 lakhs was given as advance to the first defendant. From the recitals in Ext.A1, it is evident that the parties had a doubt, despite the assertion by the first defendant, as to whether there was 6 acres and 18 cents available at the ground since a portion of the property was submerged in water. It is therefore mentioned in Ext.A1 that in case there was any reduction in extent of the property on measurement, the sale consideration will be proportionately deducted. On the reverse side of the first page in Ext.A1, it is endorsed at the instance of the first defendant that he wanted three more months time for collecting the relevant documents to measure out the property. When the first defendant attempted to sell the property, they filed the suit for specific performance.

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It is the case of the plaintiff that they are non resident Indians and have sufficient funds with them to pay the entire sale consideration. It is also averred that the plaintiff and defendants 2 and 3 were always ready and willing and are even now ready and willing to perform their obligations under Ext.A1. The sale

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RFA.No.684 of 2010

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could not be conducted only on account of the default on the part of the first defendant.

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The first defendant filed a written statement disputing the maintainability of the suit. However, Ext.A1 agreement is plainly admitted by the first defendant. According to him, due to non co-operation on the side of the plaintiff and defendants 2 and 3, the agreement could not be performed. Allegation against him that he was responsible for the delay is denied. Subsequently the first defendant died and his legal representatives were impleaded as defendants 4 to 6 in the suit.

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Exts.A1 to A3 and B1 and B2 are the documents produced by the disputants. PW1 and DW1 testified. Exts.C1 and C1(a) are the Commissioner's report and sketch. The court below after entering a finding that Ext.A1 was executed by the plaintiff and defendants 2 and 3 on one hand and the deceased first defendant on the other hand, refused specific performance only on the ground that a major portion of the property was submerged in water and there was considerable reduction of land available for enforcing the contract. As pointed out earlier, it is evident from Ext.A1 itself that the parties were not very sure of

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RFA.No.684 of 2010

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the availability of 6 acres 18 cents at the time of entering into the contract. It was therefore a clause was incorporated in Ext.A1 itself that the purchasers (plaintiff and defendants 2 and 3) are entitled to reduce the consideration proportionate to the reduction in extent of the available land.

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The court below on evidence correctly found that the plaintiff and defendants 2 and 3 were ready and willing to perform their obligations under the contract. It also entered a finding that on account of the first defendant's dereliction and breach, the contract could not be preformed even during the extended period. It is also found by the court below that a substantial amount of Rs.20 lakhs was paid as advance sale consideration and it was lying with the first defendant for a long time.

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After analysing the evidence and entering the findings in favour of the plaintiff, the court below declined the relief of specific performance against the prescriptions in Section 10 of the Specific Relief Act, 1963. It is well settled that the court is bound to presume that breach of the contract to transfer immovable property cannot be adequately relieved by

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RFA.No.684 of 2010

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compensation in money. This is clear from Section 10, Explanation 1 to the Specific Relief Act. This principle has been violated by the court below in making the following observations.

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“9. However, the granting of a decree of specific performance is a discretionary relief to be exercised u/s. 20(1) of the Specific Relief Act. The court has the discretions to refuse the specific performance on many grounds as well as on equitable consideration exercising the discretion under sound principles of law. It has come out from the evidence that the sale could not have been effected because of the difficulty in assessing the extent of the land. Throughout the evidence it has come to the notice of the court that it is very difficult to measure the property and assess the actual extent as substantial extent of the land is denuded in the water level. Even in that situation the plaintiff is ready to purchase it even now if the landed area is ascertained. But to ascertain the landed area and to assess the value for the water portion it appears to be a difficult task for which the parties to the agreement are not even ready. Therefore, rather than granting a specific performance I feel it is better and reasonable to consider a decree of alternative relief. Admittedly Rs.20 lakhs were received by the 1^st defendant in advance and it was received years back. 1^st defendant is enjoying the amount with him. At the same time, there are no evidence to show that the defendant has sustained any loss because of the non-materialisation of the agreement. Though the defendant would contend that there were prospective purchasers who offered higher value to purchase the property, that is not substantiated by any evidence. On the other hand, the plaintiff is even ready to purchase the property for which the 1^st defendant is not amenable as the present land value

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RFA.No.684 of 2010

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is far higher than the land value available at that time. Therefore, this context will also suggest that 1^st defendant is the actual person who gained in the transaction by getting the unjust enrichment of occasion to retain a huge amount of Rs.20 lakhs for years. The plaintiff's contention that he could have invested that money in some other business and could have gained profit out of that cannot be ruled out completely. Atleast he could have obtain the prevailing rate of bank interest had it been deposited in a commercial bank. I feel that this contention is something reasonable and believable. Therefore, the plaintiff is the sufferer in this case. Therefore, I am of the view that the plaintiff is entitled to get back the advance amount with some enhancement which may be termed either as enhancement due to the diminishing of the monetary value of the amount which he had spent or in terms of interest. If it is found in terms of interest naturally, 10% per annum will be fair and reasonable as the present commercial bank's rates are more than that. Therefore, whatever terms it may be called plaintiff is entitled to get back the advance amount given with interest as the rate of 10% per annum from the date of agreement till the date of decree. From date of decree onwards the normal rate of 6% per annum will prevail. Therefore, plaintiff is entitled for the alternative relief. The issues are answered accordingly.”.

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On a perusal of the entire evidence, we agree with the findings of the court below that the plaintiff and defendants 2 and 3 were always ready and willing to perform their duties and obligations under Ext.A1. The contract did not go through on

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RFA.No.684 of 2010

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account of the fault on the part of other defendants. In the absence of any challenge against the execution of Ext.A1 and the clear stipulations therein, the court below should have granted a decree for specific performance in favour of the appellant and respondents 5 and 6 (plaintiff and defendants 2 and 3). It is true that as per Ext.C1 and C1 (a), only 2 acres and 16 cents could be identified as ground and the rest of the property was water logged. The exact extent of the property available in the title of deceased first defendant could not be identified at the time of Commissioner's inspection, although the Commissioner visited the property with the assistance of Taluk Surveyor. That may not be a reason to decline specific performance in favour of appellant and respondents 5 and 6 since they have expressed their willingness to purchase the available land which is not submerged in water for the agreed price. Of course, they are entitled to rateably reduce the consideration which should be commensurate to the land available at the site. It is also clear from the materials before us that a correct identification of the available land has to be done at the time of execution of the decree and care should be taken that no portion of any river puramboke or other

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RFA.No.684 of 2010

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government property is assigned in the course of the execution of decree.

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Having regard to the facts and circumstances and law on the point, we are of the view that court below wrongly exercised discretion vested in it under Section 20 of the Specific Relief Act when it declined the specific performance, in spite of the fact that it entered a finding that the first defendant was responsible for non performance of the contract.

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In the result, the appeal is allowed. The decree passed by the court below is modified. The plaintiff and defendants 2 and 3 are found to be entitled to get a specific performance of Ext.A1 contract in respect of the land found available on measurement, excluding the submerged area. Measurement shall be done by an Advocate Commissioner with the help of Taluk surveyor. The plaintiff and defendants 2 and 3 are liable to pay proportionate compensation to the other defendants and if any excess amount has been paid, the plaintiff and defendants 2 and 3 are entitled to get refund of the excess amount paid towards the sale consideration. Identity and extent of the property shall be ascertained in the execution proceedings. Plaintiff is entitled to

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RFA.No.684 of 2010

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realise the costs through out in these proceedings.

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The suit is decreed as above.

Sd/-

A.HARIPRASAD

JUDGE

Sd/-

SHIRCY V.

smm

JUDGE

Kerala Kumar v. K.P.Sathyanathan Nair and Others

Case brief

What is this about?

What did the court decide?

Kerala Kumar v. K.P.Sathyanathan Nair and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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