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Judgment
K.K. Sasidharan, J.—This second appeal is directed against the judgment and decree dated 17.11.2005 in A.S. No. 120 of 2005 on the
file of III Additional Sub Court, Coimbatore in reversing the judgment and decree dated 6.6.2005 in O.S. No. 856 of 1999 on the file of III
Additional District Munsif Court, Coimbatore. The first respondent in the present appeal originally filed a suit for specific performance before the
trial court in O.S. No. 856 of 1999 against the second respondent.
In the plaint in O.S. No. 856 of 1999 it was the case of the first respondent that the property described in the schedule to the plaint absolutely
belongs to the second respondent trust and they have allotted site No.46 to him as per agreement dated 7.1.1998 and persuaded him to part with
a sum of Rs.5,000/- as consideration. In evidence of the said transaction, a receipt was issued by the second respondent. However on 1.7.1998
the second respondent informed the first respondent that the price agreed was low and as such they have decided to refund the amount with an
idea to sell the property to a third party. The first respondent protested to the said conduct of the second respondent and issued a notice dated
21.7.1998 calling upon them to convey the property immediately. To the said notice a reply was sent by the second respondent dated 25.8.1998
agreeing to convey the site No.46 but contended that the price had to be paid at the guideline rate. However, according to the first respondent the
price for selling the property was fixed on 7.1.1998 itself and the amount paid by him was in full and final settlement of the sale value and as such
there was no question of payment of guideline value. Since, the second respondent failed to execute the document in spite of payment of the entire''
sale consideration, he was constrained to file the suit for specific performance.
The suit was resisted by the second respondent by filing written statement. In the said statement, it was admitted that the second respondent
agreed to sell the suit property to the first respondent on 7.1.1998. However with regard to the claim that the entire amount was paid on the date
of agreement itself, the second respondent contended that the consideration of Rs.5,000/- paid by the first respondent on 7.1.1998 was only an
advance and the sale was on condition that he should pay the remaining amount on the basis of the guideline rate. The second respondent also
contested the claim of the first respondent for exercise of discretion in his favour by decreeing the suit for specific performance. In short the second
respondent prayed for dismissal of the suit with exemplary costs.
During the pendency of the suit the appellant filed an application to implead him as a party to the suit. In the affidavit filed in support of the
application for impleading him as a party, it was the case of the appellant that the suit property has been in his possession and enjoyment right from
the year 1977 like other Burma repatriates. It was also his contention that the second respondent had already agreed to sell the property to him
and as such he is a necessary party to the suit. The said application was not contested by the first respondent and accordingly the application was
allowed and the appellant was impleaded as second defendant to the suit.
In the written statement filed by the appellant before the trial court it was his contention that the suit property is situated in Manikavasaga Nagar
and the said property having large extent and belonging to the second respondent trust was given to Burma repatriates. The appellant was stated to
be in possession of site Nos.45 and 46 from the year 1977 onwards and though the said fact was known to the first respondent, he has been
deliberately kept out of the proceedings with a mala fide intention to get the suit property registered in his name. The appellant also contested the
claim of the agreement executed by the second respondent in favour of the first respondent and it was his case that he had put up construction in
the suit property long ago and as such the first respondent is not entitled for a decree of specific performance.
The trial court, on the basis of the pleadings framed necessary issues and though rejected the case of the appellant in respect of his possession,
refused to grant a decree for specific performance in favour for the first respondent and accordingly the suit was dismissed. The judgment and
decree dated 6.6.2005 in O.S. No. 856 of 1999 has been taken up in appeal by the first respondent before the learned III Additional Sub Court.
Coimbatore in A.S. No. 120 of 2005. The said appeal was allowed by the First Appellate court as per judgment and decree dated 17.11.2005
and aggrieved by the said decree, the unsuccessful second defendant has preferred the present appeal.
The following substantial question of law arises in the second appeal.
Whether the First Appellate Court was right in law in its exercise of discretion to grant a decree for specific performance, over looking the
inconsistent case of the plaintiff in his pleadings and evidence with regard to the sale agreement as well as the payment of consideration for such
sale coupled with the non consideration of material evidence produced on the side of the first defendant to show the absence of equity in favour of
the plaintiff for grant of a decree for specific performance.
The learned counsel appearing for the appellant contended that the First Appellate Court committed a serious mistake in rewriting the contract
for the first respondent inasmuch as in the agreement stated to have been executed between the parties the payment of consideration at a particular
rate has not been indicated and only a sum of Rs.5,000/- was paid by the first respondent as advance. However the learned trial Judge very
curiously added certain terms to the said contract and decreed the suit for specific performance by directing the first respondent to pay the
guideline rate to the second respondent and on such payment the second respondent was directed to execute the document of sale.
Learned Senior Counsel appearing on behalf of the first respondent contended that the very appeal preferred by the appellant is not
maintainable inasmuch as the appellant was not party to the contract and as such he is not an aggrieved person with respect to the decree direction
for specific performance. Therefore the learned Senior Counsel prayed for dismissing the appeal on the ground of maintainability. None appeared
for the second respondent.
It is found from the pleadings that the first respondent approached the trial court with a specific case that as per agreement dated 7.1.1998 the
second respondent agreed to sell the suit property to him and the entire consideration was paid on the very same date. The said fact was denied by
the second respondent in his written statement. Though the factum of agreement to sell the property was fairly admitted by the second respondent,
it was their contention that the first respondent has to pay the guideline rate for the purpose of executing the sale deed.
When the first respondent was examined as P.W.I, it was his case that the agreement was an oral agreement and there was nothing to show
that the second respondent agreed to sell the property. The second respondent while he was examined as D.W.I admitted that the suit property
has been in possession and enjoyment of the appellant for the last 25 years and as such he is still in possession of the property. No serious attempt
was made by the first respondent to discredit the evidence so tendered by the second respondent as D.W.I.
The learned trial Judge, answered the first issue with regard to the entrustment of the property with the appellant as Burma repatriate against
the appellant. However with respect to the second issue as to whether an executable agreement was entered into between the respondents, it was
held that Ex.A. 1 agreement was only an advance receipt and the learned trial Judge also found that an inconsistent case has been set up by the
first respondent. The learned trial Judge negatived the contention of the first respondent on the basis of Ex.A. 1 and the plea for specific
performance was also rejected. The learned trial Judge categorically held that Ex.A.1 shows that the payment of Rs.5,000/- was only an advance
and the consideration of sale has not been indicated in the agreement. The first respondent claimed that the amount paid was in full and final
satisfaction. On the other hand, the same was disputed by the second respondent. According to the first respondent the document was executed
by one Venkataraman, being the trustee of the second respondent trust. However the said executant was not examined as a witness. In fact the
learned trial Judge had drawn adverse inference against the first respondent and ultimately repelled his contention that Ex.A.1 was an enforceable
agreement binding on the second respondent.
The learned First Appellate Judge without making an attempt to assess the evidence adduced on the side of the first respondent, decreed the
suit for specific performance by directing the first respondent to pay the guideline rate as consideration with a further direction to the second
respondent to execute the sale deed on payment of the guideline value. The learned trial Judge proceeded to grant the decree for specific
performance without considering the question as to whether in the given circumstances, the first respondent was entitled to get a decree compelling
the second respondent to execute the sale deed on the basis of Ex.A.1 agreement,
Section 20 of the Specific Relief Act provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to
grant such relief merely because it is lawful to do so. The document in Ex.A.1 dated 7.1.1998 is only a receipt issued by the second respondent
acknowledging receipt of a sum of Rs.5,000/- towards advance for site No. 46. There is no recital in Ex.A.1 to show that the property was
agreed to be sold at a particular rate and the other terms of sale including the time prescribed for execution of the sale deed. As per Ex.A.2 notice
dated 21.7.1998, the first respondent called upon the second respondent to register the property in his favour. The said notice was replied by the
second respondent as per their reply noted dated 25.8.1998 wherein it was clearly indicated that the first respondent has to pay the current
guideline rate for the purpose of registration of the property in his name. By way of subsequent correspondence dated 9.9.1998 marked as Ex.A.5
the first respondent maintained that the entire consideration has been paid on the date of initial transaction viz., 7.1.1998 and as such it was
uncharitable on the part of the second respondent to demand the balance amount. In fact a very crucial document was marked on the side of the
second respondent, the same being the notice sent by the second respondent to the first respondent dated 1.7.1998 marked as Ex.A.7. In the said
notice, it was clearly indicated that the first respondent by way of fraudulent misrepresentation made the second respondent to accept the payment
of Rs.5,000/- and as such the first respondent was called upon to get back the said amount of Rs.5,000/- from the office of the second
respondent. There is also clear indication in the said notice that the appellant had been residing in the property in site Nos.45 and 46 and from the
records of the past Secretary it was revealed that they have agreed to sell site Nos.45 and 46 to the appellant and it was only by way of mistake
that the first respondent informed them that site No.46 is still vacant, which made them to accept the advance paid by him.
Even though in the plaint it was the case of the first respondent that Ex.A. 1 was a sale agreement and that he had paid the entire amount on the
date of such agreement, the said pleading was given a go-by when he was examined as P.W.I. It was his case during his evidence that the sale was
only an oral sale and it was not reduced into writing. All these inconsistent versions were taken into consideration by the learned trial Judge to
negative the prayer for specific performance. However the learned Appellate Judge on a total misconstruction of the evidence as well as pleadings
arrived at a conclusion that the first respondent is entitled for a decree of specific performance. In fact the terms of the agreement were supplied
only by the First Appellate Court as is evident from the judgment of the Sub court.
Suit for specific performance is an equitable and discretionary remedy and the Court is not obliged to grant such a remedy merely because it is
lawful to do so. There are certain well acceptable principles governing the matter of specific performance. It is often said that the party, who
approaches the court praying for a decree of specific performance should come to the court with clean hands and divulge the entire matter and
there should not be any attempt to conceal the facts. The plaintiff in a suit for specific performance should also plead and prove that he was ready
and willing at all point of time to perform his part of the contract. One of the parties to a contract cannot take unfair advantage over another and in
case it is demonstrated that the plaintiff has not come to the court with clean hands or that the equity is not in his favour, the Court is free to deny
the relief of specific performance.
In P.V.Joseph''s Son Mathew v. N. Kuruvila''s Son (AIR 1987 SC 2328), the Apex Court considered the scope and ambit of Section 20 of
the Specific Relief Act and observed thus:-
Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to Courts as to decreeing specific performance. The Court should
meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to
do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not used as an
instrument of oppression to have an unfair advantage to the plaintiff.
The main thrust of the argument on the side of the first respondent pertains to the non maintainability of the second appeal at the instance of the
appellant, who had absolutely no connection with the agreement sought to be enforced by the first respondent.
It is true that normally in a suit for specific performance of the contract, stranger to the agreement cannot be impleaded as a party and the suit
for specific performance cannot be enlarged to convert the same into a suit for title or possession. However in the present case, it was the
contention of the second respondent that the suit property was entrusted to the appellant and he had been residing in the said property and the said
fact is also borne out by Ex.A.7 as well as Ex.B1. There was no objection raised by the first respondent when the appellant was sought to be
impleaded as a party to the suit. It cannot be said that the appellant has no subsisting interest in the matter inasmuch as it was his concrete case
before the Court that he had been residing in the suit property ever since the year 1977. In fact the version as given by the appellant before the trial
court was confirmed by the second respondent and in such circumstances it cannot be said that the appellant is not an aggrieved party so as to
entitle him to maintain the appeal against the decree for specific performance.
In Sumtibai v. Paras Finance Co. (2007 (11) SCALE 596 = 2007-4-L.W. 865), the Apex Court considered the question as to whether a
stranger to a contract or a third party can be added as a defendant in the suit and held thus:-
Every party in a case has a right to file a written statement. This is in accordance with natural justice. The CPC is really the rule of natural justice
which are set out in great and elaborate detail. Its purpose is to enable both parties to get a hearing. The appellants in the present case have
already been made parties in the suit, but it would be strange if they are not allowed to take a defence. In our opinion. Order 22 Rule 4(2) CPC
cannot be construed in the manner suggested by learned counsel for the respondent.
...
In view of the aforesaid decisions we are of the opinion that Kasturi''s case (supra) is clearly distinguishable. In our opinion it cannot be laid
down as an absolute proposition that whenever a suit for specific performance is filed by A against B, a third party C can never be impleaded in
that suit. In our opinion, if C can show a fair semblance of title or interest he can certainly file an application for impleadment. To take a contrary
view would lead to multiplicity of proceedings because then C will have to wait until a decree is passed against B, and then file a suit for
cancellation of the decree on the ground that A had no title in the property in dispute. Clearly, such a view cannot be countenanced.
The appellant was impeladed as a defendant in the suit on his application and he was allowed to contest the proceedings and it was not the
case of the first respondent before the trial Court or the First Appellate Court that the appellant is not a necessary party to the proceedings. When
the appellant was permitted to contest the suit on merits and the prayer for specific performance was rejected by the trial court on the basis of the
inconsistent case set up by the first respondent, it cannot be said that the appellant is not entitled to maintain an appeal against the judgment and
decree of the First Appellate Court granting the decree for specific performance in favour of the first respondent.
The Apex Court in Vidhyadhar v. Manikrao (1999 (3) SCC 573 = 1999-3-L.W.576) considered the question as to whether a stranger to the
sale deed can dispute payment of consideration or its adequacy in the light of the judgment of the Privy Council in Lal Achat Ram v. Raja Kazim
Husain (ILR 27 ALL 271) and held thus:
In Lal Achal Ram v. Raja Kazim Husain Khan 7 the Privy Council laid down the principle that a stranger to a sale deed cannot dispute
payment of consideration or its adequacy. This decision has since been considered by various High Courts and a distinction has been drawn
between a deed which was intended to be real or operative between the parties and a deed which is fictitious in character and was never designed
as a genuine document to effect transfer of title. In such a situation, it would be open even to a stranger to impeach the deed as void and invalid on
all possible grounds. This was also laid down in Kamini Kumar Deb v. Durga Charan Nag 8 and again in Saradindu Mukherjee v. Kunja Kamini
Roy 9. The Patna High Court in Jugal Kishore Tewari v. Umesh Chandra Tewari 10 and the Orissa High Court in Sanatan Mohapatra v. Hakim
Mohammad Kazim Mohmmad 11 have also taken the same view.
The above decisions appear to be based on the principle that a person in his capacity as a defendant can raise any legitimate plea available to
him under law to defeat the suit of the plaintiff. This would also include the plea that the sale deed by which the title to the property was intended to
be conveyed to the plaintiff was void or fictitious or, for that matter, collusive and not intended to be acted upon. Thus, the whole question would
depend upon the pleadings of the parties, the nature of the suit, the nature of the deed, the evidence led by the parties in the suit and other attending
circumstances. For example, in a landlord-tenant matter where the landlord is possessed of many properties and cannot possibly seek eviction of
his tenant for bona fide need from one of the properties, the landlord may ostensibly transfer that property to a person who is not possessed of any
other property so that that person, namely, the transferee, may institute eviction proceedings on the ground of his genuine need and thus evict the
tenant who could not have been otherwise evicted. In this situation, the deed by which the property was intended to be transferred, would be a
collusive deed representing a sham transaction which was never intended to be acted upon. It would be open to the tenant in his capacity as a
defendant to assert, plead and prove that the deed was fictitious and collusive in nature. We, therefore, cannot subscribe to the view expressed by
the Privy Council in the case of Lal Achal Ram 7 in the broad terms in which it is expressed but do approve the law laid down by the Calcutta,
Patna and Orissa High Courts as pointed out above.
(emphasis supplied)
It is evident from the pleadings as well as evidence that the first respondent was not entitled to the discretionary relief of specific performance
and as such the suit was rightly dismissed by the learned trial Judge. The First Appellate Court assumed the task of an umpire and appears to have
rewritten the very contract for the parties and a decree was granted accordingly in favour of the first respondent. In fact it was the case of the first
respondent before the trial court as well as before the First Appellate Court that the entire money was paid on the date of Ex.A.1 and there was
nothing to be paid subsequently. The trial court having found that the said contention was made without any bonafides rejected the prayer for
specific performance. However the learned First Appellate Judge directed the first respondent to pay the guideline value and on such payment the
second respondent was directed to execute the document in his favour. In short, the First Appellate Court substituted the very contract and in the
place of Ex.A. 1 a new contract was introduced so as to grant a decree in favour of the first respondent. Therefore, the learned appellate Judge
was clearly in error in setting aside the judgment and decree of the trial court.
The scope and ambit of jurisdiction u/s 100 of the CPC came up for consideration before the Apex Court in Hero Vinoth vs. Seshammal
reported in 2006(5) SCC 545 = 2007-2-L.W.945, and after considering a catena of decisions on the said point, the Apex Court in paras 19 and
20 held thus:-
It is not within the domain of the High Court to investigate the grounds on which the findings were arrived at, by the last Court of fact, being
the first appellate Court. It is true that the lower appellate Court should not ordinarily reject witnesses accepted by the trial Court in respect of
credibility but even where it has rejected the witnesses accepted by the trial Court, the same is no ground for interference in second appeal when it
is found that the appellate Court has given satisfactory reasons for doing so. In a case where from a given set of circumstances two inferences of
fact are possible, one drawn by the lower appellate Court will not be interfered by the High Court in second appeal. Adopting any other approach
is not permissible. The High Court will, however, interfere where it is found that the conclusions drawn by the lower appellate Court were
erroneous being contrary to the mandatory provisions of law applicable or its settled position on the basis of pronouncements made by the Apex
Court, or was based upon inadmissible evidence or arrived at by ignoring material evidence.
The question of law raised will not be considered as a substantial question of law, if it stands already decided by a larger Bench of the High
Court concerned or by the Privy Council or by the Federal Court or by the Supreme Court. Where the facts required for a point of law have not
been pleaded, a litigant should not be allowed to raise that question as a substantial question of law in second appeal. The mere appreciation of
facts, the documentary evidence or the meaning of entries and the contents of the documents cannot be held to be raising a substantial question of
law. But where it is found that the first appellate court has assumed jurisdiction which did not vest in it, the same can be adjudicated in the second
appeal, treating it as a substantial question of law. Where the first appellate court is shown to have exercised its discretion in a judicial manner, it
cannot be termed to be an error either of law or of procedure requiring interference in second appeal. This Court in Reserve Bank of India v.
Ramkrishna Govind Morey 7 held that whether the trial court should not have exercised its jurisdiction differently is not a question of law justifying
interference. (See Kondiba Dagadu Kadam v. Savitribai Sopan Gujar 8.)
(emphasis supplied)
The judgment of the First Appellate Court clearly shows that the learned Appellate Judge addressed himself into the wrong question and
answered the issues without making an attempt to analyse the evidence adduced by the parties in the light of the pleadings and came to a perverse
finding that the first respondent is entitled to a decree for specific performance. The documents as well as evidence clearly shows that the first
respondent has not come to the court with clean hands and his attempt was to take unfair advantage over the second respondent trust.
In view of the reasons aforesaid, I am of the opinion that the judgment and decree of the appellate court requires interference. Accordingly the
substantial question of law is answered in favour of the appellant and against the first respondent. In the result, the second appeal is allowed. The
judgment and decree dated 17.11.2005 in A.S. No. 120 of 2005 on the file of III Additional Sub Court. Coimbatore is set aside and the judgment
and decree dated 6.6.2005 in O.S. No. 856 of 1999 on the file of III Additional District Munsif Court, Coimbatore is restored. No costs.