High Court of Kerala
THE HONOURABLE MR. JUSTICE THOTTATHIL B. RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE P. BHAVADASAN
Alex Thomas & Another
Versus
Rajan & Another
AS.No.163 of 1999
Decided on : 09-11-2010
Contract and Specific reliefs - Specific Relief Act, 1963 - Section 20(1) - Contract Act, 1872 - Section 2(e) - Transfer of Property Act, 1882 - Section 54 - Suit for specific performance of a contract for sale - Dismissed the suit holding that earnest covered by Ext.A1 having been adjusted against Exts.A2 and A3, contract for sale contained in Ext.A1 did not further survive for enforcement. With that view, specific performance was not granted - Whether it was plaintiffs or defendants who were in breach As already noted, PW2, document writer whose credibility is not impeached, categorically stated that Exts.A8 to A10 documents were prepared and made available however defendants did not go over to PW2's office for signing and having the documents registered - Whether in exercise of discretion under section 20 of Act, 1963, plaintiff is entitled to decree - Held, Explanation 1 occurring after sub-s.(2) of section 20 of Specific Relief Act provides that mere inadequacy of consideration, or the mere fact that contract is onerous to defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage or hardship within the meaning of clauses (a) and (b) of that sub-section - Courts have to take into consideration circumstances of each case, conduct of parties or respective interest in the contract. Sub-s.(1) of section 20 stands to advise that discretionary jurisdiction to decree specific performance does not oblige the court to grant such relief, merely because it is lawful to do so, but that the discretion is to be exercised in a sound and reasonable manner, guided by judicial principles and capable of correction by a court of appeal - The legislative indication in that provision of statute is that the exercise of discretion shall not be arbitrary and reasonableness has to be founded on some judicial principle - While mere inadequacy of consideration may be irrelevant, passage of time that has gone through with the litigation apparently tilts scales, since escalation in land value cannot be ignored - In that view of matter, pendency of this litigation from trial court to this court from sometime in November, 1996, till now, advises us to hold that the discretion needs to be exercised against the decreeing specific performance, however on terms that defendants will suffer entire costs of this litigation both here and in the court below - Appeal ordered.
Thottathil B. Radhakrishnan, J.
1. Plaintiffs in a suit for specific performance of a contract for sale are the appellants.
2. On the basis of Exts.A1 to A7 and A16, the facts that emerge are as follows:
The defendants, husband and wife, entered into Ext.A1 dated 6.2.1996, agreeing to sell and extent of 1 acre and 37 cents to the plaintiffs or their nominees for consideration fixed at Rs.19,000/- per cent. They also received Rs.1 lakh as advance and the period for performance of the contract for sale was fixed to be up to 31.10.1996. Later, on measurement, the available extent was found to be only 1 acre and 34 cents instead of 1 acre and 37 cents. Ext.A2 was executed for 23 cents. That sale was in favour of the first plaintiff. This was followed by Ext.A3 for 20 cents in favour of a stranger. The advance of Rs.1 lakh (earnest) was adjusted towards sale considerations in Exts.A2 and A3; Rs.45,000/- being adjusted against Ex.A2 transaction and Rs.55,000/-against Ext.A3 transaction. Thereafter, Ext.A4 was executed on 26.10.1996 in favour of a stranger for 25 cents. Ext.A5 was executed on 28.10.1996 for 25 cents in favour of the first plaintiff. Ext.A6 was executed on 29.10.1996 for 25 cents in favour of a stranger and Ext.A7 was executed on 30.10.1996 for 3 cents in favour of a stranger. Thereby the total extent of 1.21 acres was conveyed by the defendants to different persons, including the first plaintiff. As discernible from Ext.A6, the defendants stand to say that all those transactions were made with reference to Ext.A1 and in discharge of the obligations thereunder. The balance extent left is 13 cents. The consideration at which the land was conveyed under Exts.A2 to A7 is at the rate of Rs.19,000/- per cent, as stated in Ext.A1.
3. Controversies appear to have arisen on 31.10.1996, the date mentioned in Ext.A1 as the date by which the transactions thereunder should be completed. According to the plaintiffs, Ext.A8 sale deed was prepared on stamp papers worth Rs.24,700/- and Exts.A9 and A10 filing sheets and other necessary papers were prepared in connection with the sale deed for 13 cents to be registered on 31.10.1996. The suit is laid on 11.11.1996, on the allegation that the defendants did not turn up for executing documents on 31.10.1996 and when they were approached on that day, they promised to go to register the documents on the succeeding day, however, that they did not present themselves for signing or having the documents registered on 1.11.1996 or even on 2.11.1996, on which dates, the plaintiffs are shown to have been present in the Sub Registrar’s office. For this, they stood as witnesses in Exts.A11 and A15. Ext.A16 is a notice issued on behalf of the defendants through an Advocate on 1.11.1996, taking the stand that the period covered by Ext.A1 agreement had expired on 31.10.1996 and that Exts.A2 to A7 having been executed in furtherance of Ext.A1, nothing survives and the said contract has been discharged, as the plaintiffs committed default in not taking the sale deeds for the remaining extent.
4. In answer to the suit, the defendants contended that the entire earnest covered by Ext.A1 having been adjusted against Exts.A2 and A3, first two among the sale deeds; nothing survives thereafter and there is no enforceable contract for sale. They also pleaded that plaintiffs were in breach in not having the agreement ultimately performed.
5. Apart from one of the plaintiffs as PW1, the court below heard the evidence of the first defendant as DW1 and the document writer, who was involved in the preparation and presentation of all the documents between the parties, including Exts.A1 to A7, as PW2. His testimony is not impeached by the defendants on any issue of disloyalty or any other ground which is acceptable or sufficient enough to dislodge the credibility of that witness. With this, we find PW2 stating categorically that Exts.A8, A9 and A10, the documents which the defendants had to execute on 31.10
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