Dismissed

Salooja.T. v. Sreenivasan Nair

Kerala HC9 Sept 2021RFA/223/2009

Case brief

AI extract

What is this about?

The High Court dismissed an appeal and cross objection challenging a decree rejecting specific performance of a sale agreement. The court held that specific performance was discretionary under Section 20 of the Contract Act and failed due to lack of independent proof of fund readiness and minor consent issues.

What did the court decide?

The appeal and cross objection were dismissed; the decree rejecting specific performance was affirmed.

Salooja.T. Vs Sreenivasan Nair — Specific Performance | Kerala HC (2021)

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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 P.SOMARAJAN

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THURSDAY, THE 9^TH DAY OF SEPTEMBER 2021 / 18TH BHADRA, 1943

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RFA NO. 223 OF 2009

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AGAINST THE JUDGMENT AND DECREE DATED 18.08.2008 IN OS 178/2007 OF II ADDITIONAL SUB COURT, KOZHIKODE

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APPELLANT/PLAINTIFF:

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SALOOJA.T. AGED 28 YEARS, D/O.SARASWATHY,THEKKINIYAKATH HOUSE, KARUVAMPOYIL P.O.,KODUVALLY AMSOM, THALAPERUMANNA DESOM,KOZHIKODE TALUK.

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BY ADVS. SRI.K.S.BHARATHAN SRI.ABEL ANTONY SRI.CHRISTINE MATHEW

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RESPONDENT/DEFENDANT:

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SREENIVASAN NAIR, AGED 56 YEARS, S/O.NARAYANAN NAIR,KANDIYIL HOUSE, CHEVAYOOR P.O.,CHEVAYUR AMSOM,DESOM, KOZHIKODE TALUK.

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BY ADVS. SRI.M.A.AUGUSTINE SRI.S.EASWARAN SRI.P.MURALEEDHARAN IRIMPANAM SMT.SOUMYA JAMES SRI.P.SREEKUMAR THOTTAKKATTUKARA

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THIS REGULAR FIRST/CROSS APPEAL HAVING COME UP FOR HEARING ON 09.09.2021, ALONG WITH CO.48/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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RFA No.223/2009 & CO.No.48/2009

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT

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THE HONOURABLE MR. JUSTICE P.SOMARAJAN THURSDAY, THE 9^TH DAY OF SEPTEMBER 2021 / 18TH BHADRA,

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1943

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CO NO. 48 OF 2009

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AGAINST THE JUDGMENT AND DECREE DATED 18.08.2008 IN OS 178/2007 OF II ADDITIONAL SUB COURT, KOZHIKODE CROSS OBJECTOR/RESPONDENT:

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SREENIVASAN NAIR

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S/O.NARAYANAN NAIR, KANDIYIL HOUSE, CHEVAYOOR P.O., KOZHIKODE

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BY ADV SMT.T.RESMI DAMODARAN

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RESPONDENT/APPELLANT:

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SALOOJA T.

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D/O.SARASWATHY, THEKKINIYAKATH HOUSE, KODUVALLY, THALAPERUMANNA, KOZHIKODE.

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BY ADV.K. S. BHARATHAN

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THIS CROSS OBJECTION/CROSS APPEAL HAVING COME UP FOR HEARING ON 09.09.2021, ALONG WITH RFA.223/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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RFA No.223/2009 & CO.No.48/2009

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JUDGMENT

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Aggrieved by the decree rejecting specific performance of a sale agreement of immovable property dated 19.09.2006 for an extent of 23 cents, at the agreed consideration of Rs.41,000/- per cent, the plaintiff came up.

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Inter alia, it is admitted by the appellant/plaintiff that the suit was partly decreed directing the defendant to return the advance amount received with interest, against which cross objection was filed by the respondent.

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Heard both the sides.

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The contract for sale is dated

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19.09.2006 and the period agreed into comes to six months, that is upto 19.03.2007. Within that time no notice of demand was issued by

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RFA No.223/2009 & CO.No.48/2009

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the appellant/plaintiff, calling upon the other party to come and perform their contract for sale. Just after the expiry of the agreed period a notice was issued by the owner of the property, the defendant, on 04.04.2007 repudiating the contract. On the same day, the plaintiff issued Ext.A3, registered lawyer notice demanding specific performance. Since time is not the essence of a contract for sale of an immovable property, the notice issued repudiating the contract, dated 04.04.2007 without assigning a valid reason, cannot be sustained. But the relief of specific performance is resting on the discretion to be exercised under Section 20 of Specific Relief Act not to grant specific performance. The plaintiff hence may not get the relief even though it is lawful to do so. The legal position was very much settled by a Division

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RFA No.223/2009 & CO.No.48/2009

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Bench of this Court in Antony K.O. and another v. M.K.Krishnankutty Menoki and others ( 2017 (1) KHC 479 = 2017 (1) KLJ 357 : ILR 2017 (1) Ker 444) in the following lines:

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“ The question at what time the Court has to exercise its discretion is also well evident from a mere reading of Section 20 of the Specific Relief Act, which would arise only after finding that it is lawful to grant the relief sought for in favour of the plaintiff. In all other provisions of law wherein discretion could be exercised stands for exercising discretion in a positive way for granting some relief to the parties and not for refusing any relief. But, the discretionary power incorporated and embodied under Section 20 stands on a different footing in which the Court has to exercise discretion not for

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RFA No.223/2009 & CO.No.48/2009

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granting the relief, but for refusing the same. It has got its own character and peculiarity, apart from other provisions contained in other laws for the time being in force. So, the real impact of Section 20 should be and must be understood under the background of those aspects. It is a mandate upon the Court to address the question of exercise of discretion before granting or refusing a decree for specific performance and it has to be exercised only after finding that it is lawful to grant a relief of specific performance in favour of the plaintiff. A decree which was granted without addressing and without exercising the discretion under Section 20 of the said Act is bad in law. The Court is duty bound to address the question of exercise of discretion under Section 20 of the Specific Relief

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RFA No.223/2009 & CO.No.48/2009

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Act while granting or refusing to grant a decree of specific performance. The said discretion has to be exercised only after finding that it is lawful to grant the relief prayed for in suit in favour of the plaintiff.”

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Admittedly, minors interests are also involved in the sale agreement, which requires permission from the court and no permission was obtained within the specified time. This would make the contract for sale invalid in so far as minors interests are concerned.

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Three witnesses, PWs 2 to 4 were examined in order to establish the readiness

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and willingness of the plaintiff except the interested testimony of her husband, PW1. But the plaintiff did not mount on the box to give any direct evidence and the evidence tendered through her husband cannot be substituted. The

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RFA No.223/2009 & CO.No.48/2009

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oral evidence tendered by PWs 2 to 4 also cannot be substituted in the place of material evidence required so as to prove the ability to raise funds. Even going by their evidence, it is clear that she was not having sufficient funds with her either in cash or by deposit or otherwise with any bank within the period of contract. But oral evidence was tendered so as to show her ability to raise funds, for which, no material evidence was adduced. The non-issuance of demand notice within the period of contract has to be appreciated in the light of the abovesaid facts, which would certainly show and go against the readiness and willingness alleged.

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The cross objection is mainly focused on the non-grant of damages based on the forfeiture clause, for which, there should be evidence to show the actual damages sustained.

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RFA No.223/2009 & CO.No.48/2009

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The legal position was settled by another Division Bench of this Court in Micheal v. Sebastian and Others ( 2017 (4) KHC 52 (DB ) in the following lines :

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“In this case, there is no quantification or liquidation of damages in anticipation in the contract by any of the parties stipulating any sum as damages. On the other hand, the terms and conditions of the contract would show that there is only a forfeiture clause agreeing to forfeit the entire advance amount by way of damages and the same cannot be substituted in the place of quantification of damages. A mere clause agreeing to forfeit the entire advance amount alone is not sufficient to bring the matter within the purview of Section 74 of the Contract Act. There should be an un-qualified consensus ad

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RFA No.223/2009 & CO.No.48/2009

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idem in quantifying damages in anticipation by the act of parties in the contract for sale, otherwise the person who claims the benefit of forfeiture clause should prove the actual damage or loss sustained by him on account of the breach of other party. The present case would hence, fall under Section 73 of the Contract Act.”

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In the absence of evidence to show the actual damages sustained or a genuine preestimate of damages by mutual consent, no decree can be granted.

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Hence, the appeal and the cross objection fail, dismissed.

Sd/-

P.SOMARAJAN

JUDGE

SPV

Salooja.T. v. Sreenivasan Nair

Case brief

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Salooja.T. v. Sreenivasan Nair

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