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KERALA HIGH COURT
V. Chitambaresh and Sathish Ninan, JJ.
Dr. M.R. Balan and Ors. —Appellants
versus
Perli Tile Works Private Limited —Respondent
AFA No.20 of 1993
Decided on 24.1.2018
For the Appellants:Sri. P.G. Rajagopalan and Sri. M. Gopikrishnan Nambiar, Advocates
For the Respondent:Shri T. Sethumadhavan, Senior Advocate, Sri. K. Jayesh Mohankumar and Sri. Pushparajan Kodoth, Advocates
IMPORTANT POINT
Court is not obliged to grant a decree merely because it is lawful to do so.
Headnote:(A) Specific Relief Act, 1963—Sections 16(c) and 20—-Specific performance of contract—Agreement to sell—In terms of Section 16(c) of Specific Relief Act, 1963, continued readiness and willingness of purchaser since date of agreement, to perform his part of contract needs to be proved—There is lack of evidence indicating the same—Defendants are not entitled to decree for specific performance of agreement—Even otherwise, because there is an agreement for sale, court is not bound to grant a decree for specific performance—Court is not obliged to grant a decree merely because it is lawful to do so—Section 20 of Specific Relief Act clothes court with duty to exercise its discretion in a given case to grant a decree for specific performance—Exercise of discretion is to be guided by judicial principles and shall not be arbitrary—Rise in price or delay in seeking relief, by itself is not a ground to deny specific performance. (Paras 7 and 8)
(B) Specific Relief Act, 1963—Sections 16(c) and 20—Limitation Act, 1963—Article 54—Specific performance of contract—Agreement to sell—Though agreement was in year 1974, specific performance is sought for only in year 1985—It is a reason to exercise discretion refusing to grant a decree for specific performance—Defendant is in possession under agreement for sale—They are found to be not entitled to a decree for specific performance—Plaintiff is entitled to get recovery of possession of plaint schedule property from defendants on strength of title—Mere fact that plaintiff denied agreement for sale does not preclude plaintiff from seeking a decree on defence plea—Decree and judgment of Single Judge dismissing counter claim and granting a decree for recovery of possession to plaintiff, confirmed. (Paras 8, 9, 10 and 14)
Result: Appeal dismissed.
Sathish Ninan, J.—The defendants in a suit for recovery of possession are in appeal. In the suit, the defendants raised a counter claim seeking a decree for specific performance of an agreement for sale. The trial court dismissed the suit and decreed the counter claim. On appeal, the learned Single Judge reversed the said decree and judgment.
2. The plaintiff is a Private Limited Company. The plaint schedule property, 28 cents with a building thereon, admittedly belong to the plaintiff-Company. It is also admitted that the property was entrusted with the defendants under a lease arrangement in the year 1972 on a monthly rent of Rs.100/-. It is the plaintiff’s case that in the year 1974, the plaintiff requested the defendants for an advance of Rs.20,000/- on the condition that the interest therefrom would be taken as rent and the amount shall be returned to the defendants as and when they vacate the premises. The suit was filed terminating the lease arrangement as per notice and further claiming recovery on the strength of title since the defendants disowned possession under the lease and claimed possession under an alleged agreement for sale.
3. The defendants contended that an oral agreement was entered into with the plaintiff, for sale of the plaint schedule property to the defendants, for an amount of Rs.25,000/-. Out of the total sale consideration, an amount of Rs.20,000/- was paid. The contention of the plaintiff, that the payment was as an advance-loan, with an agreement to repay the same at the time of vacating the premises, was denied. They also filed a counter claim seeking a decree for specific performance.
4. The trial court upheld the oral agreement for sale pleaded by the defendants and granted a decree for specific performance. The decree was interfered with in appeal, by the learned Single Judge, finding against the agreement and granting a decree for recovery of possession.
5. Heard learned counsel Shri Gopikrishnan Nambiar on behalf of the appellants-defendants and learned Senior Counsel Shri T. Sethumadhavan on behalf of the respondent-plaintiff.
6. As noticed supra, the title of the plaintiff and the fact that the defendants came into possession as lessees under the plaintiff in the year 1972, are admitted. The initial question for determination is, has there been an agreement for sale, as pleaded by the defendants. The fact that Rs.20,000/- was paid by the defendants to the plaintiff is admitted. Was it a loan as contended by the plaintiff or part of sale consideration under an oral agreement for sale as contended by the defendants? The payments are evidenced by Exts B1 and B2 receipts dated 20.07.1974 and 30.04.1975, for Rs.15,000/- and Rs.5,000/-, respectively. The payment of the said amount of Rs.20,000/- has been entered in Ext A4, the cash book of the plaintiff- Company. In Exts B1, B2 and A4 the payment is shown as made to ‘suspense account’. It does not specify the amount either as a loan received or as sale consideration. Exhibits B3 and B4 are relied on by the defendants to substantiate their case of sale agreement. Exhibit B3 is a small piece of paper with a note thereon alleged to have been issued by one of the Directors of the plaintiff company. It is mentioned therein that as per receipts dated 20.07.1974 and 30.04.1975, Rs.15,000/- and Rs.5,000/- has been received. It contains a further entry that the ‘balance amount’ due is Rs.5,000/-. Exhibit B4 is the cover containing Ext B3. PW1 admitted that the handwriting on the cover, Ext B4, resembles with his brother’s handwriting. The trial court also found similarity in the handwriting with that in Exts B1 and B2. We also perused it and found the handwritings to be substantially similar. There is no proper explanation from the part of the plaintiff as to how Ext B3 happens to mention about a balance amount of Rs.5,000/-. It is submitted by the learned Senior Counsel that it is the plaintiff’s case in the replication that the original dema
