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2024 Supreme(Online)(KER) 33888
HIGH COURT OF KERALA
Sathish Ninan, JOHNSON JOHN, JJ
NEDUMPURATH BASHEER – Appellant
Versus
VEERALIYAMBATH ANDRU HAJI – Respondent
RFA 716/2013
SRI.K.M.FIROZ, SRI.S.KANNAN, SMT.K.S.SANGEETHA, SMT.S.SIMY, P.B.KRISHNAN, SRI.A.RANJITH NARAYANAN, SRI.SHYAM PADMAN, SRI.S.K.SAJU, SMT.A.SIMI ZUBAIR PULIKKOOL
Plaintiffs must demonstrate readiness and willingness to perform contractual obligations, including proving availability of funds, to seek specific performance.
Headnote:(A) Specific Relief Act, 1963 – Section 22 – Specific performance of an agreement for sale – Plaintiffs entered into an agreement for sale but failed to demonstrate readiness and willingness to perform – The trial court dismissed the suit, which was appealed – The court affirmed the trial court's finding but allowed amendment for return of advance sale consideration. (Paras 1, 13, 14, 15)
(B) Readiness and willingness – The court emphasized that plaintiffs must prove availability of funds to fulfill contractual obligations, as established in U.N.Krishnamurthy v. A.M.Krishnamurthy (AIR 2022 SC 3361). (Paras 12)
Facts of the case: The plaintiffs entered into an agreement for sale for a property but failed to pay the required advance due to alleged lack of funds and pending litigation. (Paras 2, 3)
Findings of Court: The court found that the plaintiffs were not ready to perform the agreement and affirmed the trial court's dismissal of the specific performance claim. (Paras 13)
Issues: The main issues were the plaintiffs' readiness and willingness to perform the agreement and the appropriateness of amending the plaint for return of advance sale consideration. (Paras 7)
Ratio Decidendi: The court ruled that the plaintiffs did not demonstrate sufficient funds to fulfill their contractual obligations, and the trial court's findings were upheld. (Paras 12, 13)
Result: Appeal allowed in part; amendment for return of advance sale consideration permitted. (Paras 16)
J U D G M E N T
Sathish Ninan, J.
The suit for specific performance of an agreement for sale was dismissed by the trial court. The plaintiffs are in appeal.
2. On 19.11.2008, the plaintiffs entered into Ext.A1 agreement for sale with defendants 1 and 2. Under Ext.A1, defendants 1 and 2 agreed to convey the plaint schedule property to the plaintiffs. The extent of the property is 30 cents. The sale consideration fixed was ₹ 6,60,000/- per cent. On the date of Ext.A1 agreement, an amount of ₹ 25 lakhs was paid towards advance sale consideration. The period fixed for performance was six months. As per Ext.A1, a further amount of ₹ 25 lakhs was to be paid by the plaintiffs to defendants 1 and 2 on or before 05.12.2008.
3. According to the plaintiffs, after the execution of Ext.A1 agreement, it came to their knowledge that there existed a suit in respect of the property as OS 159/2007, for partition. The suit, though was dismissed on 31.03.2008, an appeal was pending against the decree as AS 32/2008. Under such circumstances, on 05.12.2008, which is the date fixed for payment of a further amount of ₹ 25 lakhs, the plaintiffs handed over an undated cheque for ₹ 25 lakhs to defendants 1 and 2. The same was endorsed on Ext.A1 agreement. The appeal A.S. 32/2008 was disposed of on 07.08.2010. On coming to know about the same, the plaintiffs issued Ext.A2 notice on 31.08.2010, demanding performance of the agreement. Defendants 1 and 2 issued Ext.A5 reply stating that the plaintiffs were not ready and willing to perform the agreement and that at the instance of the plaintiffs they had executed Ext.A6 Sale Deed dated 16.05.2009, with regard to a portion of the plaint schedule property in favour of defendants 3 to 5. The suit was instituted seeking specific performance of Ext.A1 agreement ignoring Ext.A6 Sale Deed.
4. Defendants 1 and 2 filed a written statement reiterating the stand taken in Ext.A5 reply notice. It was contended that the plaintiffs did not have sufficient funds to perform the agreement and that it was under such circumstances that they issued a cheque for ₹ 25 lakhs on 05.12.2008.
5. The trial court found that the plaintiffs were not possessed of sufficient funds to go ahead with the transaction. The explanation given by the plaintiffs that the non-payment of further advance of ₹ 25 lakhs on 05.12.2008, was due to the pendency of AS 32/2008, was negatived. It was also held that the plaintiffs had entered into Ext.B1 agreement for sale in respect of one-half of the property with strangers, and it was pursuant to Exts.A1 and B1 that Ext.A6 Sale Deed was executed. It was further held that under Ext.B1 agreement the plaintiffs received an amount of ₹ 65 lakhs, and hence under equity, they could not claim return of the advance amounts paid.
6. We have heard Sri.K.M.Firoz, learned counsel for the appellants-plaintiffs, Sri.P.B.Krishnan, the learned Senior Counsel for respondents 1 and 2 and Sri.Shyam Padman learned Senior Counsel for respondents 3 to 5.
7. The points that arise for determination are :-
(i) Is the finding of the trial court with regard to the readiness and willingness of the plaintiffs sustainable on the evidence?
(ii) Is the application filed by the appellants as IA.1/2024, seeking amendment of the plaint to incorporate a prayer for return of the advance sale consideration liable to be allowed?
(iii) Does the decree and judgment of the trial court warrant any interference?
8. As per Ext.A1 agreement for sale, the plaintiffs were required to pay a further advance amount of ₹ 25 lakhs on or before 05.12.2008. According to the plaintiffs, after entering into Ext.A1 agreement they came to know about the suit, and the appeal therefrom, pending in respect of the property. Therefore, instead of paying the said amount of ₹25 lakhs, a cheque for the said amount was entrusted with defendants 1 and 2. The amount was to be paid only after disposal of the appeal. The defendants would on the other hand contend that the plaintiffs were n
