Ramakrishna Pillai and Another vs Muhammed Kunju and Others

Arijit Pasayat, J.—Challenge in these appeals is to the judgment of a Division Bench of the Kerala High Court.

Background facts need to be noted in some detail.

Two suits were filed for specific performance of agreement to sell the suit properties. Appellant 1 is the Plaintiff in OS No. 11 of 1997 which was filed in the Sub-Court, Mavelikkara on 23-2-1987. Appellant 2 is the Plaintiff in OS No. 17 of 1987 which was filed on 28-2-1987. The three Defendants were common to both the suits Defendant 1 is Defendant 2''s brother''s son and Defendant 3rd is the wife of Defendant 2. Defendant 3 obtained the property mentioned in the two suits under an exchange of properties between her and her husband i.e. Defendant 2. She mortgaged the properties to Kerala Financial Corporation Limited. Sometime in 1970 Defendant 3 executed a power of attorney in favour of her Defendant 2 husband authorising him to deal with the property. On 17-5-1974 Defendant 2 sold portions of the property to Defendant 1 acting on the power conferred by the power of attorney vide Exts. A-8 and A-18. Subsequently on 12-8-1974, Defendant 3 cancelled the power of attorney.

In 1979 Defendant 1 executed a power of attorney authorising Defendant 2 to deal with the property. On the basis of such power of attorney he entered into an agreement with Appellant 2 on 6-8-1979 to sell 3.5 cents of the property and the structures for a price of Rs. 32,000. An advance of Rs. 10,000 was paid. Appellant 2 was then the tenant in possession of the structure and had paid Rs. 7000 as security. It was agreed that the amount shall be adjusted against part-payment of the price fixed and Appellant 2 was to pay Rs. 15,000 as the balance consideration. The agreement indicated that possession was delivered to Appellant 2.

On 20-8-1979 Defendant 2 as power-of-attorney holder entered into an agreement to sell 7.5 cents of property with structures to Appellant 1 for consideration of Rs. 43,500, out of which Rs. 27,000 was paid as advance. Appellant 1 was already in possession of the structure as tenant. The terms of the agreement i.e. Ext. A-1 are similar to those of Ext. A-14. Since Defendant 3 did not discharge the dues to the Financial Corporation, recovery proceedings were started and the rent payable by the Appellant was attached. It appears thereafter there was a dissention amongst the Defendants and Defendant 3 filed a suit (OS No. 42 of 1982) challenging the sales made by Defendant 2 to Defendant 1. The Appellants were not parties to the said suit. Defendant 1 took the stand that the sales in favour of Defendant 2 as power-of-attorney holder were valid and Defendant 3 was not entitled to the relief prayed for. Thereafter the dispute was settled recognising the rights of Defendant 3. She undertook to honour all commitments made by Defendant 2 in respect of the property.

In 1986 the Appellants called upon the Defendants to execute the sale deed in their favour. A reply was given on 13-11-1986 refusing to execute the sale deeds. Two suits were filed, as noted above, for specific performance. There were clear averments to the effect that the Appellants were and are always ready and willing to perform their part of the agreement. Defendants 1 and 3 contested the proceedings. It was their stand that the agreements sued on, namely, Exts. A-1 and A-19 are not valid and binding on the Defendant. A plea of limitation was also taken. But there was no denial to the plea regarding readiness and willingness. There was specific reference to the earlier disputes between the Defendants. The trial court by judgment and decree dated 19-3-1992 dismissed the suit as barred by limitation after holding on merits that the agreements are valid and binding on the Defendant.

The Plaintiffs filed separate appeals in the High Court. Defendant 3 also filed separate memo of cross-objections challenging the trial court''s finding on the valid and binding nature of the agreements. By the impugned judgment dated 9-7-2001, the High Court affirmed the trial court''s finding that the agreements are valid and binding, and also held that the suits were not barred by limitation. However, the High Court dismissed the suit on the ground that there was no plea raised regarding readiness and willingness and exercise of discretion. However, the High Court granted a decree for refund of the amount paid as advance covered by the agreement, but that no credit was to be given for further payments of Rs. 3800 and Rs. 4460 by the Plaintiffs.

Learned Counsel for the Appellants submitted that the High Court fell into grave error by holding that the plea of readiness and willingness was not raised by the Plaintiffs. In this connection, reference is made to averments in the plaint as noted in the judgment of the trial court. Reference was also made to the issues framed and the written statements filed by the Defendants. It was pointed out that in the written statements there was no plea taken by the Defendants that the Plaintiffs were not ready and willing to fulfil their part of the obligation It was, therefore, submitted that the High Court non-suited the Plaintiffs on a ground which was not raised by the Defendants and which was not considered by the trial court. It was also pointed out that factually the High Court was wrong in holding that no plea in that regard was taken.

Learned Counsel for the Respondent on the other hand submitted, that while considering a case of this nature, the parameters of Section 20 have to be kept in view. It is pointed out that suits were not filed within a reasonable time and the subsequent events by considerable effect. It was submitted that the High Court has rightly held that there was no material to show that at all relevant points of time the Plaintiffs were ready and willing to fulfil their part of the obligation. Reference was placed on several decisions of this Court in support of the stand e.g. K.S. Vidyanadam and others v. Vairavan (1997(3) SCC 1) K. Narendra v. Riviera Apartments (P) Ltd. (1999(5) SCC 77) V. Pechimuthu v. Gowrammal (2001(7) SCC 617) , Manjunath Anandappa v. Tammanasa and Others (2003(10) SCC 390) and Pukhraj D. Jain & Ors. v. G. Gopala Krishna (2004 (7) SCC 251)

There can be no quarrel with the position in law urged by learned Counsel for the Respondent about the parameters to be considered while dealing with a suit for specific performance. But the High Court''s judgment is clearly vulnerable. Firstly, there was no dispute ever raised by the Defendants about the readiness and willingness of the Plaintiffs to fulfil their obligations. The High Court was clearly in error in holding that no plea, regarding readiness and willingness was raised. As noted above, the trial court in its judgment has referred to various portions of the averments in the plaint where the Plaintiffs had categorically stated that they were and are always willing to fulfil their part of the obligations. The High Court also failed to notice that there was no plea either in the written statement or in the cross-objections filed in the appeal before the High Court that the Plaintiffs were not ready and willing to fulfil their part of the obligation.

Then the question is whether the respective Plaintiffs have pleaded and proved that they were always ready and willing to perform their part of the contracts. Even though time did not start to run on the expiry of two months from the dates of the agreements, certainly, the Plaintiffs were aware that the Defendants had to discharge their obligation and get a release of the mortgage in two months of the dates of the agreements. Until the sending of the notices preceding the suits, there is nothing to show that the Plaintiffs at any time called upon the Defendants to perform their part of the contract."

The conclusions are clearly contrary to the pleadings of the Plaintiffs. It was categorically stated in the plaint in both the suits that the Plaintiffs are always ready and willing to fulfil their part of the obligations and that the Defendants were evading the execution for one reason or the other.

Above being the position, the appeals deserve to be allowed, which we direct. The Respondents shall execute the sale deed after receiving the balance of the consideration within a period of three months. If that is not done it shall be open to the Appellants to move the trial court for necessary steps in that regard.

The appeals are allowed without any order as to costs.