Allowed

Sreerajan v. Muhammadali

Kerala HC6 Mar 2024RFA/772/2008

Case brief

AI extract

What is this about?

Appeal against decree for specific performance of an agreement to sell 69 cents. The court held the suit barred under Order II Rule 2(3) CPC as an earlier injunction suit against alienation arose from the same cause of action without leave; it also found lack of readiness and willingness, set aside the decree, and granted refund of the advance with interest.

What did the court decide?

Decree for realisation of ₹5 lakhs with interest at 12% p.a. till suit date and thereafter 9% p.a. till realisation, from first defendant, charged on plaint schedule property.

Sreerajan Vs Muhammadali — Specific Performance | Kerala HC (2024)

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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 6^TH DAY OF MARCH 2024 / 16TH PHALGUNA, 1945

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RFA NO. 772 OF 2008 (F)

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AGAINST THE DECREE AND JUDGMENT DATED 30.06.2008 IN OS NO.334 OF 2007 OF ADDITIONAL SUB COURT, IRINJALAKUDA

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APPELLANTS/DEFENDANTS:

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1 SREERAJAN, S/O THOTTARATH SANKARAN, PERUMBADAPPU DESOM, CHENTHRAPPINI VILLAGE, KODUNGALLUR TALUK.

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2 RADHA SREERAJAN, W/O.SREERAJAN RESIDING IN PERUMBADAPPU DESOM, CHENTHRAPPINI VILLAGE, KODUNGALLUR TALUK.

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BY ADVS. SRI.S.V.BALAKRISHNA IYER (SR) SRI.K.JAYAKUMAR SRI.P.B.KRISHNAN

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RESPONDENT/PLAINTIFF:

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MUHAMMADALI, S/O PUTHIYAVEETTIL KAITHAYIL KUNJIBAPPU HAJI, PUNNAYURKULAM VILLAGE, DESOM, CHAVAKKAD TALUK.

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BY ADVS. SRI.T.KRISHNANUNNI (SR.) SRI.C.M.MOHAMMED IQUABAL

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THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON 06.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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SATHISH NINAN, J.

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= = = = = = = = = = = = = = = = = = R.F.A. No.772 of 2008

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= = = = = = = = = = = = = = = = = = Dated this the 6^th day of March, 2024

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J U D G M E N T

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The decree for specific performance is under

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challenge by the defendants.

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On 02.01.2007, Ext.A1 agreement for sale was

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entered into between the plaintiff and the first defendant. The 2^nd defendant is the wife of the 1^st defendant and his power of attorney holder. As per Ext.A1 the defendant had agreed to sell the plaint schedule property having an extent of 69 cents to the plaintiff for a sale consideration of ₹ 49,500/- per cent. On the date of agreement an amount of ₹ 5 lakhs was paid towards advance sale consideration. The period fixed for performance was six months. On 09.02.2007, the

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defendant issued Ext.A3 notice rescinding Ext.A1 agreement. Coming to know that the defendant is proposing to alienate the property to strangers, the

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RFA No.772 of 2008

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plaintiff filed OS 196/2007 for prohibitory injunction against the defendant from alienating the property. Pending the said suit, the present suit was filed seeking specific performance of Ext.A1 agreement.

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The defendant contended that the suit is barred

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under Order II Rule 2(3) of the Code of Civil Procedure(“CPC” for short). It was also contended that Ext.A1 agreement was rescinded by the defendant since in violation of the terms of the agreement the plaintiff had attempted to trespass into the property and caused damages therein. It was also contended that the plaintiff was not ready and willing to go ahead with the transaction and that he was not having sufficient funds.

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The trial court negatived the defendant's contentions and granted a decree for specific performance.

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I have heard Sri.S.V.Balakrishna Iyer, the

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learned senior counsel for the appellants-defendants and

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RFA No.772 of 2008

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Sri.T.Krishnanunni, the learned senior counsel for the respondent-plaintiff.

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The points that arise for determination are :-

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(i) Is the finding of the trial court that the suit is not barred under Order II Rule 2(3) of the Code of Civil Procedure correct in law?

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(ii) Was the defendant responsible for breach of the contract or was the rescission of the contract by him justified?

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(iii) Is the finding of the trial court with regard to the readiness and willingness of the plaintiff, sustainable on the evidence?

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(iv) Does the decree and judgment of the trial court warrant any interference?

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Ext.A1 agreement for sale dated 02.01.2007 is

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not in dispute. As per Ext.A3 notice dated 09.02.2007

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the defendant rescinded the contract. Thereupon, on

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01.03.2007 the plaintiff filed OS 196/2007 for

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prohibitory injunction to restrain the defendant from alienating the property to strangers. Pending the same the present suit was filed seeking specific performance

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of the agreement. Whether the present suit is barred by

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RFA No.772 of 2008

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Order II Rule 2(3) CPC, is the question. Order II Rule 2(3) reads thus:-

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“ (3) Omission to sue for one of several reliefs .- A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.

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Explanation .- For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action.”

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As per the provision, if more than one relief flow out

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of the same cause of action, the suit has to be filed for all such reliefs unless he obtains leave of the court. In the absence of such leave, a separate suit for the other reliefs will not lie.

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OS No.196/2007 was filed by the plaintiff for a prohibitory injunction against alienating the plaint schedule property to strangers and the present suit is one for specific performance of Ext.A1 agreement.

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RFA No.772 of 2008

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Relying on the judgment of the Apex Court in Ms/ Virgo Industries (Eng.) P. Ltd. v. M/s Venturetech Solutions P. Ltd. 2013 (1) SCC 625 , the learned Senior Counsel for the appellant would argue that, on the rescission of Ext.A1 agreement under Ext.A3 notice there arose the cause of action to sue for specific performance. Without having recourse to that, the plaintiff filed a suit for prohibitory injunction against alienation. The cause of action for the said suit is the same as that of the suit for specific performance. Having failed to seek for leave of the court in terms of Order II Rule 2(3) CPC, the present suit is barred, it is argued.

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The learned Senior Counsel for the respondent would on the other hand rely on the judgments of the Apex Court in Rathnavathi & Another v. Kavita Ganashamdas 2015 (5) SCC 223 and Sucha Singh Sodhi (D) Thr. Lrs. v. Baldev Raj Walia AIR 2018 SC 2241 to contend that the cause of action in a suit for prohibitory injunction is different from the

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RFA No.772 of 2008

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cause of action in a suit for specific performance and hence the bar under Order II Rule 2(3) is not attracted.

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Ext.B2 is the plaint in OS 196/2007 viz. the prohibitory injunction suit. The substratum of the suit is Ext.A1 agreement for sale. At paragraph 6 of the plaint he refers to Ext.A3 notice issued by the defendant rescinding the agreement. At paragraph 7 it is alleged that the intention of the defendant is to wriggle out of the agreement and to sell the property for higher price. It is also contended that the defendant cannot unilaterally withdraw from the agreement, and that the notice of rescission is illegal. At paragraph 8 of the plaint it is averred that the attempt of the defendant is to sell the property to strangers. Therefore, it admits of no doubt that the cause of action relied on by the plaintiff in Ext.B2 plaint is the breach/rescission of Ext.A1 agreement by the defendant. Therefore, it is essentially the breach

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RFA No.772 of 2008

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of the agreement which is the cause of action for the suit. On rescission/breach of Ext.A1 agreement, right to

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sue for specific performance accrues on the plaintiff. In the suit for injunction also the cause of action is the attempt to alienate to strangers on breach of the agreement. Therefore, the suit for prohibitory injunction, and for specific performance, are founded on the very same cause of action viz. the breach of Ext.A1 agreement. The judgment of the Apex Court in Virgo Industries case (supra) applies on all fours to the present case. Therein the Apex Court in an identical situation held that, the very conduct of the defendant in not honouring the agreement for sale provides cause of action for a relief of specific performance and also

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for the relief for permanent injunction against alienation. The Apex Court observed thus:-

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“14. The averments made by the plaintiff in C.S. Nos.831 and 833 of 2005, particularly the pleadings extracted above, leave no room for doubt that on the dates when C.S. Nos.831 and 833

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RFA No.772 of 2008

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of 2005 were instituted, namely, 28.08.2005 and 09.09.2005, the plaintiff itself had claimed that facts and events have occurred which entitled it to contend that the defendant had no intention to honour the agreements dated 27.07.2005. In the aforesaid situation it was open for the plaintiff to incorporate the relief of specific performance along with the relief of permanent injunction that formed the subject matter of above two suits. The foundation for the relief of permanent injunction claimed in the two suits furnished a complete cause of action to the plaintiff in C.S. Nos.831 and 833 to also sue for the relief of specific performance. Yet, the said relief was omitted and no leave in this regard was obtained or granted by the Court.”

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In Rathnavathi's case (supra) and Sucha Singh Sodhi's case (supra )

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relied on by the learned counsel for the respondent, the Apex Court was considering the bar of suit under Order II Rule 2(3) of the CPC for a suit for specific performance in the light of an earlier suit for prohibitory injunction against trespass. In both these cases, under respective agreements for sale the plaintiff was put in possession of the property. When there was a threat of forceful eviction, the suit for

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RFA No.772 of 2008

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prohibitory injunction was filed. It was followed by a suit for specific performance. It is in the said context

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that the Apex Court held that the causes of action for the suits are different.

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A Division Bench of this Court in Sasidharan Nair v. Kunju Mohammed Unni 2017 (3) KLT 751 had occasion to consider the judgments in Virgo Industries case and Rathnavathi's case (supra) .and took note of the distinction between the cause of action in a suit for injunction against trespass, and against alienation. It would be

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apposite to refer to paragraph 6 of the judgment, which reads thus:-

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“6. The decision in Virgo Industries' case (supra) was later distinguished in Ratnavathi v. Kavita Ganashamdas (2015 (1) KLT Suppl. 105 (SC) = (2015) 5 SCC 223) and Inbasagaran & Anr. v. S. Natarajan (2015 (1) KLT Suppl. 106 (SC) = (2015) 11 SCC 12). It was held therein that the bar under Order II Rule 2 of the CPC will not operate to a suit for specific performance if the earlier suit was one for a decree of injunction against dispossession only. The following observation in Inbasagaran's

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RFA No.772 of 2008

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case (supra) is apposite :

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“29. In the instant case, as discussed above, suit for injunction was filed since there was threat given from the side of the defendant to dispossess him from the suit property. ” (The plaintiff did not allege that the defendant is threatening to alienate or transfer the property to a third party in order to frustrate the agreement. (emphasis supplied)

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But the plaintiffs in O.S. No.336/2005 had specifically alleged that the defendant was negotiating for the sale of the property in favour of third parties in order to frustrate Ext.A1 agreement for sale. We have no doubt in our mind that the 'cause of action' in O.S. Nos.336/2005 and 201/2007 overlap which is a bundle of facts required to be pleaded andproved for obtaining relief.”

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As noticed supra, OS 196/2007 was filed for prohibitory

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injunction against alienation on the allegation of rescission/breach of Ext.A1 agreement and attempt to alienate the property to strangers. The very same cause of action gave the plaintiff the right to seek for the relief of specific performance. Both the reliefs are on

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RFA No.772 of 2008

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the same cause of action.

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It is not in dispute that, while instituting OS 196/2007 the plaintiff had not sought leave in terms of Order II Rule 2(3) CPC to file a separate suit for specific performance. Hence the present suit is barred under Order II Rule 2(3)CPC.

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Though on the finding that the present suit is barred, it may not be necessary to advert to the other points, it is deemed appropriate to consider the same. Ext.A1 agreement stipulate for handing over of possession at the time of execution of the sale deed. The relevant recital in Ext.A1 reads thus:-

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“tað-]-d-ª A-hp-[n-¡I-¯v Xo-cvhn-e kw-Jy cïmw]mÀ-«n Hómw]mÀ-«n-¡v sIm-Sp-¯v Xo-cm-[m-c-sa-gp-Xn H-¸n-«v c-Pn-kv-{Sm-¡n hm-t§-ï-Xpw, Xð-ka-bw h-II-sf c-ïmw-]mÀ-«n-¡v b-YmÀ° ssIh-iw sIm-Sp-t¡-ï-Xp-amIp-óp.”

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The defendant alleges that, after execution of Ext.A1 there was an attempt to trespass by the plaintiff and

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RFA No.772 of 2008

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had caused damages in the property. A police complaint was filed in the said regard. The nearby residents who are witnesses to the incident were examined as DWs.2 and

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Exts.B6 and B8 are the statements given by the witnesses before the police. Ext.B7 is the scene mahazar. That there had been an instance of trespass and damage is proved by the said evidence. PW1 in his crossexamination admitted that C.C.282/07 is pending against him with respect to the incident. Though the evidence as above by itself would not be conclusive that the act of trespass was committed by the plaintiff, the fact remains that it is on such information that the

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defendant proceeded to rescind Ext.A1.

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Coming to the question of readiness and willingness of the plaintiff, though Ext.A3 notice rescinding Ext.A1 agreement was issued on 09.02.2007, the suit has been filed only on 30.06.2007. Rescission of the agreement provided cause of action to the

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RFA No.772 of 2008

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plaintiff to sue for specific performance. However, he did not chose to sue for the said relief. Ext.A2 is the copy of the Bank account statements of the plaintiff. It relates to the period from 01.04.2007 to 26.07.2007. Statements during the period of execution of ExtA1 is not produced. Ext.A2 indicates that, during the period from 01.04.2007 to 30.06.2007, the maximum balance in his accounts was ₹ 8,65,000/- only and that during the period 01.04.2007 to 25.07.2007 the maximum amount available in his accounts was ₹ 8,66,164/-. It was only on 26.07.2007 that there was a balance of ₹ 35,55,418/- in his account. The balance sale consideration payable would be ₹ 30,00,000/- approximately. It indicates that from the date of agreement i.e. 02.01.2007 till 25.07.2007 there was no sufficient balance in his account.

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The agreement was rescinded as per notice dated 09.02.2007. The suit was filed only on 30.06.2007. During all these periods, going by Ext.A2 there was no

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RFA No.772 of 2008

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sufficient funds to proceed with Ext.A1 agreement. Of course, it is not necessary for the plaintiff to jingle money in his pocket. While the plaintiff was examined as PW1, a specific challenge was made with regard to his financial capacity. Then PW1 was relying on Ext.A2 bank account statement to prove the source. However, as noticed, Ext.A2 indicates that, within the period stipulated under Ext.A1 agreement, sufficient funds were not available with the plaintiff. This coupled with the fact that in spite of rescinding Ext.A1 agreement under Ext.A3 notice, the plaintiff did not chose to sue for specific performance of the agreement but ventured with a suit for injunction against alienation to strangers, tells upon the readiness of the plaintiff to go ahead with the agreement.

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Ext.A1 agreement having been rescinded by the defendant, he is in equity, bound to restore the advance sale consideration received by him. The defendant having

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RFA No.772 of 2008

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rescinded the contract, it was suggested to return the sale consideration received with interest. The learned

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Senior Counsel appearing for the appellant-defendant would submit that in all fairness the defendants are willing for such a course.

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Resultantly, the appeal is allowed. The decree and judgment of the trial court are set aside. The plaintiff is granted a decree for realisation of ₹ 5 lakhs with interest at the rate of 12% per annum from the date of agreement (02.01.2007) till date of suit (30.06.2007), and thereafter at the rate of 9% per annum till realisation from the first defendant and charged on the plaint schedule property. There will be no order as to costs.

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Sd/- SATHISH NINAN JUDGE

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kns/-

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//True Copy//

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P.S. to Judge

Sreerajan v. Muhammadali

Case brief

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What did the court decide?

Sreerajan v. Muhammadali

Case brief

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