Valiyangal Muhammedkutty vs A.P. Krishna Kumar & Ors.

Sathish Ninan, J.

The decree for specific performance is under challenge by the 4^th defendant.

The plaint schedule consists of two items of properties. Item No.1 having an extent of one cent and item No.2 having an extent of 11.60 cents. Plaint item No.1 originally belonged to Appu, the father of the first defendant, under Ext.B1 assignment deed of the year 1961 and Ext.B36 purchase certificate. Appu died intestate. Appu had ten children including the first defendant. Plaint item No.2 belonged to the first defendant under Ext.B8 sale deed.

On 25.04.2011, the first defendant entered into Ext.A1 agreement for sale with the plaintiff. As per Ext.A1 one-half right over plaint item Nos.1 and 2 properties was agreed to be conveyed by him in favour of the plaintiffs, on obtaining release of the rights of the other sharers over plaint item No.1 in his favour. The period fixed for performance was four months from the date of Ext.A1. The consideration payable was ₹ 52,29,000/-. On the date of Ext.A1 an amount of ₹ 15 lakhs was paid towards advance consideration. This was followed by a further payment of ₹ 5 lakhs on 26.04.2011 and another ₹ 15 lakhs on 31.05.2011. Thus the total advance amount paid was ₹35 lakhs. Alleging attempt on the part of the first defendant to convey the property in favour of third parties, the suit was filed.

Originally, the suit was filed against the first defendant as the sole defendant. The plaintiff, on coming to know that there has been release of the rights of the other sharers in favour of his wife and son, and that the property was assigned in favour of a third party, they were impleaded in the suit as additional defendants 2, 3 and 4.

Defendants 1 to 3 challenged the readiness and willingness of the plaintiff to perform the agreement. The additional 4^th defendant claimed to be a bonafide purchaser for value and without notice of Ext.A1 agreement.

The trial court held that the defendant failed to prove that he had performed the various obligations cast on him under Ext.A1 agreement, including, obtaining release of the rights of the other sharers, convincing the plaintiff of the title and measurement etc. The plea of the additional fourth defendant that he is a bonafide purchaser for value and without notice of Ext.A1 agreement was negatived for the intervening settlement deeds(Exts.A2 and A3) by the 1^st defendant in favour of his wife-the second defendant, from whom the 4^th defendant has purchased the property. Accordingly, the decree for specific performance was granted.

We have heard Sri.T.Krishnanunni, the learned Senior Counsel for the appellant-4^th defendant and Sri.P.Viswanathan, the learned Senior Counsel for the first respondent-plaintiff.

The points that arise for determination in this appeal are:-

Ext.A1 agreement is admitted. It contains two items of properties. The lie of the properties are of significance. Item No.1 which has an extent of only one cent, is surrounded by item No.2 which has an extent of 11.60 cents. With regard to item No.1, the plaintiff was only a co-sharer. Plaint schedule item No.2 belonged to him absolutely. Ext.A1 agreement is to convey half share over item Nos.1 and 2 in favour of the plaintiff after obtaining release of rights of other co-sharers of plaint item No.1.

The terms of Ext.A1 need to be adverted to. As per Ext.A1, the first defendant is to obtain release of the rights of his other siblings over item No.1. Such release was to be obtained within a period of one month from the date of Ext.A1. The agreement further stipulated that the property is to be measured by the first defendant, and the plaintiff is to be convinced of the extent. The agreement further stipulated that the first defendant is to convince the plaintiff of the title over the property by making available the original title deeds, prior deeds, death certificates, legal heirship certificate, tax receipts, encumbrance certificate, possession certificate etc.

The period fixed for performance of Ext.A1 agreement was four months. It expired on 25.08.2011. The suit has been filed only on 07.08.2012. But for the ipse dixit of the plaintiff as PW1, there is no material to find that within the currency of the agreement or at any time prior to the filing of the suit, the plaintiff had called upon the first defendant to perform the agreement.

Section 16(c) of the Specific Relief Act mandates the plaintiff to prove his continued readiness and willingness from the date of the agreement as a mandatory pre-requisite to seek for specific performance. This is even irrespective of a defence plea. [see: N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, (1995 (5) SCC 115), J.P. Builders v. A. Ramadas Rao, (2011) 1 SCC 429), Sangita Sinha v. Bhawana Bhardwaj and Others (AIR 2025 SC 1806)]. The readiness and willingness is to be continuous. As was noticed, after the payment of an amount of ₹ 15 lakhs on 31.05.2011, till the expiry of the agreement on 25.08.2011 and even thereafter till date of filing of the suit on 07.08.2012, there is no material to indicate that the plaintiff had moved his little finger seeking performance of the agreement. It could only be held that the plaintiff has failed to prove his readiness and willingness to perform Ext.A1 agreement.

Apart from the above, we find various other reasons weighing against the grant of a decree for specific performance, which is a discretionary relief. One among them is, the lie of the properties and the different title regarding the same. As was noticed earlier, item No.1, which has an extent of one cent, is surrounded by item No.2. Over item No.1, the first defendant had only a fractional interest. The other sharers of item No.1 are not parties to the agreement and they could not be compelled to convey their rights to the first defendant. Thus, conveyance of one-half of item No.1 was an impossibility. Regarding item No.2, since item No.1 lie in the center, severing one-half is impracticable.

So also, it is the definite case of the plaintiff that, the understanding between the parties was a joint venture project viz., to jointly construct a commercial building in the property. Without the junction of the other co-sharers of item No.1, such joint venture is impossible.

The property in question is situated in an urban area. Even according to the plaintiff, the parties intended to put up a commercial building therein. The sky rocketing of land prices in urban area, though not determinative, is one of the relevant factors that could be reckoned by the Court while considering whether a decree for specific performance is to be granted. [see: Saradamani Kandappan v. S. Rajalakshmi, (2011 (12) SCC 18)]. This is especially so on the facts and circumstances of the case where, though the period fixed for performance expired on 25.08.2011 the suit was filed only on 07.08.2012. It is also relevant to note that, while DW2 (the 4^th defendant) was cross-examined, a suggestion is made to him that the market value of the property is ₹ 15 lakhs per cent; as per Ext.A1 the value would only be ₹ 8,30,000/- per cent.

In the circumstances as noticed above, we are of the opinion that it would be inequitable to grant a decree for specific performance, and that the discretion under Section 20 of the Specific Relief Act is liable to be exercised against the grant of a decree for specific performance.

Now we come to the 4^th defendant's contention that he is a bonafide purchaser for value and without notice of Ext.A1. The learned counsel for the plaintiff pointed out that, the value shown in Ext.A15 Sale Deed in favour of the 4^th defendant is lesser than the value shown in Ext.A1. In the plaint it is the contention that Ext.A15 is a sham document. Ext.A15 Sale Deed is 21.04.2012. Ext.B33 is the possession certificate dated 30.05.2012 and Ext.B34 is the tax receipt dated 30.05.2012, both in favour of the 4^th defendant obtained after effecting mutation. So also, it is in evidence that, pursuant to the sale the 4^th defendant has obtained a permit for construction of a commercial building in the property.

The 4^th defendant is an NRI. He was examined as DW2. He was cross-examined regarding the source and mode of payment for the conveyance. He deposed that the amount was paid through his NRI account maintained with the Tirur Branch of Canara Bank. There was no further challenge on that. All the above would point out that the plea of Ext.A15 being a sham document is highly improbable.

On the question as to whether the 4^th defendant had notice of Ext.A1 agreement, there is no material to suggest the same. Of course as pointed out by the learned counsel for the plaintiff, the person named Yahu, who was involved in the transaction leading to Ext.A15 sale is not sought to be examined. The mere fact that there is an intervening settlement deed in favour of the second defendant-wife, need not negate the availability of a plea of bonafide purchaser for value. The question is, whether the 4^th defendant had knowledge of the agreement. At any rate, with regard to the one-half share over the property, which is not a subject matter of Ext.A1, the 4^th defendant would have title under his deed of sale. We are unable to find any circumstance to find that the 4^th defendant had notice of Ext.A1. Anyhow, in the light of our earlier finding that the plaintiff is not entitled for a decree for specific performance, this has little significance.

The plaint contains an alternate prayer for refund of the advance sale consideration with interest from 31.05.2011, charged on the property. The receipt of ₹ 35 lakhs towards advance, is admitted. Consequent on the default, the amount is liable to be returned with interest. Such liability is not challenged before us. Considering the prevalent rate of interest in commercial/banking transaction we are of the opinion that interest could be awarded at the rate of 12% per annum till date of suit, and thereafter at 9% till realisation.

In the result, the appeal is allowed. Setting aside the decree and judgment of the trial court, a modified decree is passed allowing the plaintiff to realise ₹ 35 lakhs, with interest at the rate of 12% per annum till date of suit, and thereafter at the rate of 9% per annum till realisation, charged on the plaint schedule property, by its sale. The plaintiff shall be entitled to proportionate costs throughout.