Allowed

Devayani v. Johny.a.a.

Kerala HC14 Jun 2023RFA/726/2012

Case brief

AI extract

What is this about?

The High Court allowed the appeal, overturning a decree for specific performance. It held that the low advance payment relative to the total price indicated the agreement was a security for a loan, not a genuine sale, warranting denial of specific performance under Section 20 of the Specific Relief Act.

What did the court decide?

The decree for specific performance was set aside. A decree was granted for the recovery of `50,000/- with interest at 12% per annum from the suit date and 6% thereafter, to be recovered as a charge b

Devayani Vs Johny.a.a. — Specific Performance | Kerala HC (2023)

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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 SATHISH NINAN

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WEDNESDAY, THE 14^TH DAY OF JUNE 2023 / 24TH JYAISHTA, 1945

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RFA (INDIGENT) No.726 OF 2012

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AGAINST THE JUDGMENT AND DECREE DATED 31.10.2008 IN OS 156/2007 OF SUB COURT, KOCHI-5

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APPELLANTS/DEFENDANTS:

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1 DEVAYANI AGED 54 YEARS

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W/O,LATE SASI, NADITHARA HOUSE, NJARAKKAL P.O, NJARAKKAL, ERNAKULAM DISTRICT.

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2 SHABI S/O.DEVAYANI, NADITHARA HOUSE, NJARAKKAL P.O, NJARAKKAL, ERNAKULAM DISTRICT.

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BY ADVS. SRI.A.X.VARGHESE SRI.A.V.JOJO

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RESPONDENT/PLAINTIFF:

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JOHNY.A.A. AGED 39 YEARS S/O.A.T.ANTONY, ALUKAL HOUSE, 18TH MILE, PANATHADY P.O., KALLAR VILLAGE, HOSDURG TALUK, KASARAGOD DISTRICT.

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BY ADVS.

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P. K. PRIYA T. K. VIPIN DAS

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THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON 14.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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SATHISH NINAN, J.

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= = = = = = = = = = = = = = = = = = R.F.A. No.726 of 2012

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= = = = = = = = = = = = = = = = = = Dated this the 14^th day of June, 2023

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J U D G M E N T

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A decree for specific performance of an agreement

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for sale is under challenge by the defendant.

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Ext.A1 is the agreement dated 23.04.2007 on

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which the suit has been filed. As per Ext.A1, an extent of 10.447 cents of property with a residential house therein is agreed to be sold at the rate of 90,000/per cent. A total amount of 50,000/- was paid as advance sale consideration out of which 10,000/- was paid on the date of A1 and, 40,000/- on the next day i.e., 24.04.2007. The period fixed for performance of

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the agreement was four months. Alleging failure on the part of the defendants to honour the agreement, the suit is filed.

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The defendants contended that they had borrowed

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an amount of ` 50,000/- from the plaintiff. Towards

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RFA No.(Indigent) No.726/2012

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-: 2 :-

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security for the transaction, signed blank stamp paper

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was handed over to the plaintiff. The same has been misutilised and the suit has been filed.

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On behalf of the plaintiff, apart from him, two

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other witnesses viz. the broker for the transaction and one of the witnesses to Ext.A1 were examined as PWs 2

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and 3. On the side of the defendants, the second defendant was examined as DW1. The trial court found that the execution of Ext.A1 has been proved and accordingly granted a decree.

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Heard learned counsel on either side.

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Is the exercise of discretion by the trial court

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for grant of a decree for specific performance, justified on the materials, is the point that arises for determination in this appeal.

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Though in the written statement it was contended

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that signed blank stamp paper was misutilised for creation of Ext.A1, even when the plaintiff was examined as PW1 it was suggested in cross-examination that a

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RFA No.(Indigent) No.726/2012 -: 3 :-

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document in the nature of an agreement for sale was executed. The second defendant as DW1 also has deposed that the signature in Ext.A1 was affixed knowing it to be an agreement. The contention of the defendant essentially is that, the transaction in question was only a loan transaction and that Ext.A1 was executed only as a security for the same.

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As per Ext.A1, the price fixed for the property

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was at the rate of 90,000/- per cent. It would come to approximately 9.5 lakhs. The advance sale consideration paid is only 50,000/-. It bears only a small proportion of the total sale consideration. According to the plaintiff, he was possessed of sufficient means to pay the entire sale consideration. There existed a mortgage over the property. Going by the terms of Ext.A1, the mortgage was required to be cleared prior to conveyance. Even under the above circumstances, only an amount of 50,000/- is paid as advance sale consideration. The fact that such a small proportion of

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RFA No.(Indigent) No.726/2012

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-: 4 :-

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the total sale consideration is stated to have been paid

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would suggest that the case put forward by the defendants that the transaction between the parties was only a money transaction is true.

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The property included in Ext.A1 is the only asset of the defendants. In the property there is a residential house wherein the defendants are residing. Even in Ext.A5 reply notice the defendants had contended that the transaction in question is only a monetary transaction. On a totality of the above circumstances, the discretion under Section 20 of the Specific Relief Act ought to be exercised to decline the relief for specific performance, and I do so. In fact the trial court failed to consider the issue of exercise of discretion while granting the decree for specific performance. The point is answered accordingly.

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It is not in dispute that the amount borrowed

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by the defendants have not been returned. Necessarily the plaintiff is entitled for a decree for return of the

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RFA No.(Indigent) No.726/2012 -: 5 :-

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amount with interest. Considering the nature of the transaction, the plaintiff is entitled for interest at the rate of 12% per annum till date of decree, and thereafter at 6%.

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In the result, this appeal is allowed. The decree and judgment of the trial court is set aside. The plaintiff is granted a decree for realisation of ` 50,000/- with interest at the rate of 12% per annum from the date of suit (05.09.2007) till date of decree (14.06.2023), and thereafter at the rate of 6% per annum till date of realisation in full, from the defendants and their assets and from the plaint schedule property as a charge and by sale of it.

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Sd/- SATHISH NINAN JUDGE

kns/-

//True Copy//

P.S. to Judge

RFA No.(Indigent) No.726/2012

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-: 6 :-

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The order dated 14/06/2023 in RFA (Indigent) No.726/2012 that “Court fee payable on the memorandum of appeal is to be recovered in terms of order 33 of the Code of Civil Procedure” is appended to the judgment dated 14/06/2023 in RFA (Indigent) No.726/2012.

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Sd/-

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Joint Registrar

Devayani v. Johny.a.a.

Case brief

What is this about?

What did the court decide?

Devayani v. Johny.a.a.

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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