Kuttan vs Unnikrishnan

Sathish Ninan, J

The decree for specific performance of an agreement for sale is under challenge by the defendants.

Ext.A1 agreement dated 17.08.2005 was entered into between the plaintiff and the defendants. As per Ext.A1, 59 cents of property was agreed to be conveyed by the defendants to the plaintiff for a sale consideration of Rs.11,250/- per cent. An amount of Rs.1,00,000/- was paid on the date of Ext.A1 towards advance sale consideration. The period fixed for performance was six months.

According to the plaintiff, on 05.11.2005 he paid a further amount of Rs.2,00,000/-, which was endorsed on the agreement. In spite of repeated demands, the defendants are evading performance of the contract and accordingly, the suit is filed. 4. The defendants though admitted execution of Ext.A1 agreement, denied the payment of Rs.2,00,000/- on 05.11.2005. The endorsement allegedly made on Ext.A1 agreement by the 2nd defendant was denied. It was alleged that the signature therein is forged. It was contended that the plaintiff was not ready and willing to perform the agreement, which has resulted in its breach. Accordingly, the defendants prayed for dismissal of the suit.

The trial court found that the endorsement on the reverse of Ext.A1 agreement is genuine, and granted a decree for specific performance.

I have heard the learned counsel on either side.

The points that arise for determination are;

i) Is the finding of the trial court with regard to the payment of an amount of Rs.2,00,000/- on 05.11.2005, sustainable on the materials?

ii) Is the finding of the trial court with regard to the readiness and willingness of the plaintiff, based on evidence?

iii) Is exercise of discretion by the trial court in granting a decree for specific performance liable to be interfered with?

The endorsement on the reverse of Ext.A1 agreement with regard to payment of further advance of Rs.2,00,000/- reads thus;

“Cheque No.191504 EDC Bank dated 17.11.2005 received for Rs.2,00,000/-” “(signature)”.

“Cheque amount received on 05.11.2005 and cheque returned” “(signature).”

The endorsement is signed by the 2nd defendant alone. Since he denied the signature, the plaintiff chose to call for the opinion of a handwriting expert. The opinion of the expert is marked as Ext.C1 and the expert was examined as CW1. The expert has opined that the disputed signature is that of the 2nd defendant himself. Though CW1 was cross examined at length, he could not be discredited. The defendants admit that the plaintiff had given a cheque for Rs.2,00,000/-. But it is their case that the cheque was got returned by the plaintiff on an understanding that the amount thereunder would be paid in a couple of days. The 2nd defendant did not obtain any document in the said regard. The case as set up by the 2nd defendant does not inspire confidence. No prudent person would have done like that. On the entirety of the circumstance, it can only be found that the trial court was right in having held that the plaintiff had paid a further amount of Rs.2,00,000/- on 05.11.2005.

The defendants denied the readiness and willingness of the plaintiff. Ext.A1 agreement stipulated that, within a period of six months from the date of agreement the plaintiff is to call upon the defendants for the execution of the conveyance. The relevant recital reads thus;

"ഇന മ തൽആറ മസകലവധ കക  രണ പർട  ഒന  പർട യ  അറ   ക ന സമ   പർട   യ  ച ലവ ൽ എഴ ത ക ന ത റധരത ൽ    ള യ  പപര പല    ൾ ന ർപ&ശ ക ന ആള കള യ  പപര പല അഡ)ൻസ+കഴ ച ബക  ത റ  വ ല തര ന സമ  ത റ ന ത തന യകളയമന ഒന പർട  സമത ച ര ക ന .”

The period fixed for performance expired on 17.02.2006. There is no material to find that the plaintiff had approached the defendants within the period requiring performance of the agreement. Though it is claimed that there were oral demands, it remains unsubstantiated. Ext.A2 notice issued by the plaintiff to the defendant requiring performance of the agreement is dated 01.07.2006, i.e., after a period of five months from the date of expiry of the period fixed for performance.

In the written statement it was specifically contended that the plaintiff did not have sufficient amounts with him to pay the balance sale consideration. Taking it to be that the total advance sale consideration paid by the plaintiff is Rs.3,00,000/-, the balance sale consideration payable would be Rs.3,63,750/-. To substantiate that the plaintiff was in possession of sufficient funds, he produced Exts.A4, A5 and A6 Bank passbooks. But Ext.A4 shows that, from March, 2000 onwards, the balance in that account is only around Rs.1,000/-. Ext.A5 passbook reveals that, in January, 2006, i.e., just before the expiry of period for performance of Ext.A1, the balance available is approximately Rs.1,00,000/- and in March, 2006, the balance available is only around Rs.2,500/-. Going by Ext.A6 passbook, during the relevant period an amount of Rs.2,00,000/- was available in deposit. Evidently, the amounts in all the three accounts, i.e., Exts.A4 to A6, during the relevant period taken together would not have been sufficient to make payment of the balance sale consideration of Rs.3,63,750/-. In the cross examination of PW1 he would depose that, though he had purchased one or two other properties, he had to sell them because of financial difficulties. The absence of demand by the plaintiff during the period stipulated in Ext.A1 seeking performance of the contract coupled with the evidence on record, probabilises the defendants' contention that the plaintiff was not ready and willing to perform Ext.A1 agreement. In order to get a decree for specific performance, the plaintiff is bound to prove that, ever since the date of execution of Ext.A1 agreement, he was continuously ready and willing to perform the agreement. In Jugraj Singh v. Labh Singh AIR 1995 SC 945, the Apex Court held that the continuous readiness and willingness at all stages from the date of agreement till the date of hearing of the suit require to be proved. It is the mandatory requirement under Section 16(c) of the Specific Relief Act, 1963 that, in order to obtain a decree for specific performance, the plaintiff is bound to plead and prove his continued readiness and willingness to perform the agreement.

The trial court omitted to take note of the evidence and circumstances as above, while entering a finding on the readiness and willingness of the plaintiff. On the materials, it could only be concluded that the plaintiff has failed to prove his readiness and willingness to perform the agreement and hence, he is not entitled for a decree for specific performance.

It has been found that, the plaintiff has, apart from the Rs.1,00,000/- paid on the date of Ext.A1 agreement as advance sale consideration, paid a further amount of Rs.2,00,000/- towards sale consideration. The plaintiff is entitled to get back the said amount of Rs.3,00,000/- with interest. On the facts and circumstances of the case, I deem it appropriate to allow the plaintiff to recover the amount with interest at the rate of 12% per annum on Rs.1,00,000/- from 17.08.2005 till 05.11.2005(the date of payment of 2 lakhs), and on Rs.3,00,000 from 05.11.2005 till the date of filing of the suit, namely, 15.07.2006. The plaintiff shall be entitled for 9% interest from the date of suit till the date of decree and thereafter, at the rate of 6% per annum.

In the result, the appeal is allowed. The decree and judgment of the trial court is set aside. The plaintiff is granted a decree for recovery of Rs.3,00,000/-, with interest at the rate of 12% per annum on Rs.1,00,000/- from 17.08.2005 till 05.11.2005, and on Rs.3,00,000/- from 05.11.2005 till 15.07.2006(date of suit), and thereafter, at the rate of 9% per annum from the date of suit till the date of decree, and at 6% per annum from the date of decree till realisation, charged on the plaint schedule property and from the defendants personally. The plaintiff shall be entitled for the proportionate costs throughout. The amount deposited by the plaintiff pursuant to the trial court decree shall be returned to the plaintiff.