Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 733

SUPREME COURT OF INDIA
Hemant Gupta, Vikram Nath, JJ.
Ayillyath Yadunath Nambiar – Appellant
Versus
P. Sreedharan - Respondent
Civil Appeal No(s).4943 of 2022 (arising out of SLP (Civil) Nos. 19087 of 2018) With Civil Appeal No.4944 of 2022 (Arising out of SLP (Civil) No.6476 of 2019)
Decided On : 18-08-2022

Advocates appeared:
For the parties :Harshvardhan Pandey, Omanakuttan K. K., Nidhesh Gupta, V. Chitambaresh, Kuriakose Varghese, V. Shyamohan, Surya Prakash, Akshat Gogna, Astu Khandelwal, Japneet Kaur, For M/S. Kmnp Law, Advocates

IMPORTANT POINT
Agreement to sell – Relief of Specific Performance cannot be granted where suspicious circumstances and doubtful situations are raised by both sides.

Headnote:
Specific Relief Act, 1963 – Section 22 – Agreement to sell – Suit for Specific Performance – Grant of alternate relief – High Court has advanced substantial justice between parties by accepting alternate relief claimed by plaintiff of refund of the advance amount along with 12% interest per annum – High Court found suspicious circumstances and doubtful situations being raised by both sides – Reasons given by High Court were sufficient to arrive at a conclusion of not awarding relief of specific performance of contract rather directing for refund of advance amount at adequate interest rate – Court not inclined to interfere with judgment and order of High Court – Appeals dismissed. (Paras 13 and 14)
Facts of the case:
These two appeals assail the correctness of same judgment and order of Kerala High Court dated 12.04.2018 passed in RFA No.269 of 2008 between Puthiyonnan Sreedharan versus Ayillyath Yadunath Nambiar, whereby the said first appeal filed by defendant was partly allowed; decree of the Trial Court for specific performance of contract was set aside, however, the defendant was held liable to pay an amount of Rs.50 lakhs with interest @12% per annum from 20.01.2005 till realization and also to bear entire cost of proceedings both at the trial level and at the appellate level.
Findings of Court:
These two appeals assail the correctness of same judgment and order of Kerala High Court dated 12.04.2018 passed in RFA No.269 of 2008 between Puthiyonnan Sreedharan versus Ayillyath Yadunath Nambiar, whereby the said first appeal filed by defendant was partly allowed; the decree of the Trial Court for specific performance of contract was set aside, however, the defendant was held liable to pay an amount of Rs.50 lakhs with interest @12% per annum from 20.01.2005 till realization and also to bear entire cost of proceedings both at the trial level and at the appellate level.
Result : Appeals dismissed.

JUDGMENT :

Vikram Nath, J.

1. These two appeals assail the correctness of same judgment and order of Kerala High Court dated 12.04.2018 passed in RFA No.269 of 2008 between Puthiyonnan Sreedharan versus Ayillyath Yadunath Nambiar, whereby the said first appeal filed by the defendant was partly allowed; the decree of the Trial Court for specific performance of contract was set aside, however, the defendant was held liable to pay an amount of Rs.50 lakhs with interest @12% per annum from 20.01.2005 till realization and also to bear entire cost of proceedings both at the trial level and at the appellate level.

2. Civil Appeal No.4943 of 2022 has been filed by the plaintiff with the prayer to restore the decree of the Trial Court whereas Civil Appeal No.4944 of 2022 has been filed by the defendant praying for dismissal of the suit. In view of the cross appeals, the parties are referred to as the plaintiff and the defendant hereinafter.

3. The defendant is the owner of both the properties mentioned in the schedule of the property appended to the plaint. According to the plaintiff, the defendant required substantial amount of cash urgently to liquidate his loans which he had taken from certain banks. The defendant had advertised for the sale of his properties but as he did not get any good buyer upon mediation of common acquaintance, he agreed to sell both the properties mentioned in the schedule of properties to the plaintiff and in view of the same, a written agreement was executed on 20.01.2005. As per the agreement, item No.1 of plaint schedule property was settled for a consideration of Rs.70,000/- per cent and the item No.2 of the plaint schedule property was settled for Rs.75,000/-per cent. The total sale consideration came to Rs.64,60,600/-. It was also agreed as per the agreement that the sale deed would be executed within a period of four months after receiving the balance consideration.

4. Soon after the execution of agreement to sell dated 20.01.2005, the plaintiff came to know that the defendant was likely to assign the plaint schedule properties to third parties thereby frustrating the agreement to sell. Although four months’ time stated in the agreement to sell had not expired but in order to protect his interest, the plaintiff on 02.02.2005 instituted a suit for injunction in the Court of Munsiff, Kannur, registered as O.S. No.69 of 2005, against the defendant impleading him as defendant No.1 and one P. Mohanan impleaded as defendant No.2 in whose favour it was apprehended that the assignment would be made. Following reliefs were claimed:

“Prayer:

It is therefore, respectfully prayed that this Honourable Court may be pleased to pass a decree and judgment;

(a) Restraining the first defendant, his men and agent and any person claiming through or under him from assigning or transferring the plaint schedule property to the 2nd defendant or to any other person that the plaintiff;

(b) Restraining the defendants, their men and agent any person or in any way interfering with the peaceful possession of the same by the plaintiff;

(d) To grant such other relief as may be necessary during the pendency of this proceedings at the request of the plaintiff.”

5. In the said suit for injunction, the defendant filed objections. The Court of Munsiff, Kannur, vide order dated 15.03.2005 disposed of the application for temporary injunction restraining the defendant from alienating plaint schedule properties in favour of the defendant No.2 or others before the expiry of term provided in the agreement dated 20.01.2005.

6. The plaintiff thereafter communicated his interest to pay the balance sale consideration and requesting to execute the sale deed. He also gave a legal notice dated 25.04.2005. The defendant gave a reply through his counsel to the aforesaid notice on 07.05.2005 denying the execution of agreement to sell and also stating that he had never received any amount from the plaintiff. The plaintiff thereaf