AYILLYATH YADUNATH NAMBIAR VERSUS P. SREEDHARAN
AYILLYATH YADUNATH NAMBIAR VS P. SREEDHARAN
Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले
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NonReportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s).4943 OF 2022
(arising out of SLP (Civil) Nos. 19087 of 2018)
AYILLYATH YADUNATH NAMBIAR ...APPELLANT(S)
VERSUS
P. SREEDHARAN ...RESPONDENT(S)
WITH
CIVIL APPEAL NO.4944 OF 2022
(Arising out of SLP (Civil)No.6476 of 2019)
J U D G M E N T
VIKRAM NATH, J.
1. These two appeals assail the correctness of same
judgment and order of Kerala High Court dated
12.04.2018 passed in RFA No.269 of 2008 between
Puthiyonnan Sreedharan versus Ayillyath Yadunath
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Nambiar, whereby the said first appeal filed by the
defendant was partly allowed; the decree of the Trial
Court for specific performance of contract was set aside,
however, the defendant was held liable to pay an amount
of Rs.50 lakhs with interest @12% per annum from
20.01.2005 till realization and also to bear entire cost of
proceedings both at the trial level and at the appellate
level.
2. Civil Appeal No.4943 of 2022 has been filed by the
plaintiff with the prayer to restore the decree of the Trial
Court whereas Civil Appeal No.4944 of 2022 has been
filed by the defendant praying for dismissal of the suit. In
view of the cross appeals, the parties are referred to as
the plaintiff and the defendant hereinafter.
3. The defendant is the owner of both the properties
mentioned in the schedule of the property appended to
the plaint. According to the plaintiff, the defendant
required substantial amount of cash urgently to liquidate
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his loans which he had taken from certain banks. The
defendant had advertised for the sale of his properties
but as he did not get any good buyer upon mediation of
common acquaintance, he agreed to sell both the
properties mentioned in the schedule of properties to the
plaintiff and in view of the same, a written agreement
was executed on 20.01.2005. As per the agreement, item
No.1 of plaint schedule property was settled for a
consideration of Rs.70,000/ per cent and the item No.2
of the plaint schedule property was settled for
Rs.75,000/ per cent. The total sale consideration came
to Rs.64,60,600/. It was also agreed as per the
agreement that the sale deed would be executed within a
period of four months after receiving the balance
consideration.
4. Soon after the execution of agreement to sell dated
20.01.2005, the plaintiff came to know that the
defendant was likely to assign the plaint schedule
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properties to third parties thereby frustrating the
agreement to sell. Although four months’ time stated in
the agreement to sell had not expired but in order to
protect his interest, the plaintiff on 02.02.2005 instituted
a suit for injunction in the Court of Munsiff, Kannur,
registered as O.S. No.69 of 2005, against the defendant
impleading him as defendant No.1 and one P. Mohanan
impleaded as defendant No.2 in whose favour it was
apprehended that the assignment would be made.
Following reliefs were claimed:
“Prayer:
It is therefore, respectfully prayed that this
Honourable Court may be pleased to pass a decree
and judgment;
a) Restraining the first defendant, his men and
agent and any person claiming through or
under him from assigning or transferring
the plaint schedule property to the 2nd
defendant or to any other person that the
plaintiff;
b) Restraining the defendants, their men and
agent any person or in any way interfering
with the peaceful possession of the same by
the plaintiff;
c) To pay the cost of the suit; and
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d) To grant such other relief as may be
necessary during the pendency of this
proceedings at the request of the plaintiff.”
5. In the said suit for injunction, the defendant filed
objections. The Court of Munsiff, Kannur, vide order
dated 15.03.2005 disposed of the application for
temporary injunction restraining the defendant from
alienating plaint schedule properties in favour of the
defendant No.2 or others before the expiry of term
provided in the agreement dated 20.01.2005.
6. The plaintiff thereafter communicated his interest to
pay the balance sale consideration and requesting to
execute the sale deed. He also gave a legal notice dated
25.04.2005. The defendant gave a reply through his
counsel to the aforesaid notice on 07.05.2005 denying
the execution of agreement to sell and also stating that
he had never received any amount from the plaintiff. The
plaintiff thereafter instituted suit for specific performance
of contract on 17.05.2005. Following reliefs were claimed
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in the said suit registered as O.S. No.111 of 2005 in the
Court of Munsiff, Kannur:
“Prayer:
It is therefore, respectfully prayed that this
Honourable Court may be pleased to pass a decree
and judgment;
a) Directing the defendant to execute and
register the sale deed in respect of the plaint
schedule property in favour of the plaintiff
receiving the balance consideration with
possession.
b) If the defendant fails to do so, get it done
through the officer of this Honourable Court
at the expense of the defendant.
c) Alternatively directing the defendant to pay
an amount of Rs.51,64,658/ with interest
@12% per annum from the date of suit till
realization being the advance amount paid
by the Plaintiff and damages with interest.
d) Restraining the defendant from culminating
the plaint schedule property to any other
person than the plaintiff.
e) To pay the cost of the suit.
f) To grant such other relief as may be
necessary during the pendency of this
proceeding at the request of the plaintiff.”
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7. The defendant filed written statement whereupon
based upon the pleadings the Trial Court framed
following five issues:
“1. Whether, the plaintiff is entitled for a decree for
specific performance of contract?
2. Whether the defendant has received the advance
sale consideration and after executing agreement
and promised to execute the sale deed within the
given time?
3. Whether the agreement relied by the plaintiff is
forged and concocted?
4. Whether the plaintiff is entitled to get the
advance sale consideration?
5. Relief and cost.”
8. Both the parties led evidence documentary as well
as oral. Trial Court upon consideration and analysis of
the evidence on record decreed the suit vide judgment
and order dated 30.07.2007 in the following terms:
“1. Defendant is directed to execute the sale deed
in respect of plaint schedule item No.1 and 2 in
favour of the plaintiff after receiving the balance
sale consideration as stated in Ext.A1.
2. In case, the defendant fails to execute the
document, plaintiff shall be at liberty to approach
the court for getting the document executed.
3. Defendant shall also pay the cost of the suit to
plaintiff.”
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9. Aggrieved by the aforesaid judgment and decree, the
defendant preferred appeal before the High Court
registered as RSA No.269 of 2008. The Division Bench of
the High Court analyzed the entire evidence on record
and came to the conclusion that the defence taken by the
defendant of not receiving any amount from the plaintiff
and also its denial of executing the agreement to sell
dated 20.01.2005 is not acceptable. However,
considering various other facts and circumstances of the
case, did not think it appropriate to decree the suit for
specific performance and rather thought it fit to award
the alternative relief (c) as claimed by the plaintiff for
refund of the advance along with interest. In paragraph
40 of the judgment, the High Court gave ten reasons why
it thought it proper not to decree the suit for specific
performance of contract rather award refund of the
advance money with interest @ 12 % per annum from the
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date of the execution of the agreement till the realization
of the same. It would be appropriate to reproduce
paragraph 40 along with its subparagraphs:
“40. The question to be considered is whether
Court below was justified in exercising the
jurisdiction to grant specific performance in the
facts and circumstances of the case. As we have
already observed, defendant has a case that Ext.A1
agreement is not genuine and he has not received
the consideration. The said contention is not
accepted by us. But despite the said fact, certain
circumstances which has evolved in this case tends
us to deny specific performance on account of the
following reasons:
i) That a huge sum of Rs.50 lakhs was paid
as cash to the defendant which covers
almost major portion of the sale
consideration. Under normal
circumstances when huge amounts are
involved, some payments are paid either
by cheque or demand draft.
ii) Plaintiff is a person who is capable of
purchasing the entire property by paying
the entire sale consideration at one
stretch. If he could pay fifty lakhs on
20.01.2005, he could have paid the
balance amount within a short time.
iii) It is not known under what circumstance
a period of four months had been stated
for complying with the terms of contract.
iv) Plaintiff claims that he was put in
possession of the property which appears
to be incorrect. There is no evidence to
prove the said fact.
v) Plaintiff is a person who does not know to
read Malayalam, but still the agreement
is executed in Malayalam.
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vi) The agreement is written by PW3 who is
an interested party to the transaction. He
claims to have received commission from
both the parties which is not the practice
followed in such situations.
vii) Defendant has a contention that his
intention was only to get a loan for which
he had signed certain papers. But he
further states that he did not receive the
loan. According to him, he had not
received any amount from the plaintiff
which of course we don’t agree.
viii) The actual amount paid by the plaintiff to
defendant can only be discerned from the
agreement, the genuineness of which is
doubted by the defendant.
ix) Exts. A5 and A5(a) though had been
relied upon by the Court below, the
manner in which the said documents are
executed and the purpose is doubtful.
x) The intention of the defendant was to sell
only one item of property as is evident
from Exts.B1 and B2 advertisements. The
advertisements were published on 1st
January, 2005. A person who is in dire
need of finances will either sell his
property or he may take loan. Taking into
account the factual circumstances, it is
possible that a loan was arranged by the
plaintiff for which a document in the
nature of Ext.A1 was prepared.”
10. The High Court further in paragraphs 41 and 42
gave further reasons for not approving the reliefs granted
by the Trial Court. The said two paragraphs also are
reproduced hereunder:
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“41. Defendant’s case is that market value of
property will come to Rs.8 crores. But there is no
evidence to substantiate the said contention. A
criminal complaint has been filed by the defendant
before the Judicial First Class Magistrate Court,
Kannur on 16.02.2005(Ext.B14), the investigation
of which is still pending. Ext.B13 is the First
Information Report. It relates to an allegation that
he was threatened and attacked by a group of
people on 04.02.2005 at 6 pm and the assailants
which includes plaintiff and PW3 and certain
others had threatened him asking him to vacate
the property and he was threatened that he will be
killed. Ext.B15 is the chargesheet dated
16.02.2005 wherein the plaintiff along with PW3
and PW6 were made accused. Charge was under
Sections 417, 420,465,467, 471 r/w S.34 I.P.C.
Final report had been filed alleging fabrication of
the agreement. Ext.B19 is the certified copy of a
complaint filed by plaintiff against the defendant
and PW3 alleging offences u/s 420, 406 r/w 109
I.P.C. This was filed before JFCM, No.II Kannur on
18.05.2005. Ext.B24 is the certified copy of the
order dated 23.03.2005 in IA No.358 of 2005 in OS
No.69 of 2005. Though an order of injunction was
granted against alienation of the property, the
Court below did not grant any injunction
restraining the defendant from interfering with the
peaceful possession of the plaint schedule. The suit
OS No.69 of 2005 was withdrawn by filing IA
No.219 of 2006 on 17.01.2006. The suit was
dismissed as withdrawn as per order dated
17.01.2006.
42. Taking into account the substantial
contentions urged on behalf of either side,
especially when an allegation regarding fabrication
of document is being prosecuted by the defendant,
it is not appropriate to grant specific performance.
The Court below had failed to consider the above
aspect of the matter in the light of the settled legal
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principles. Court below proceeded on the basis that
when execution of Ext.A1 document is proved, the
suit has to be decreed. As already stated, there is
sufficient material before this Court to doubt the
respective contentions of the parties. Under such
circumstances, it is only taking into account the
preponderance of probabilities, Court below had
found that Ext.A1 agreement is genuine based on
sufficient material and such finding is not
perverse.”
11. In paragraph 43 of the judgment, the High Court
decreed the suit directing the defendant to pay the
plaintiff an amount of Rs.50 lakhs along with interest @
12%per annum from 20.01.2005 till realization and also
to bear the entire cost of the suit before the Trial Court
as also the High Court.
12. The above two appeals one by the plaintiff and other
by the defendant have questioned the correctness of the
said judgment.
13. Learned counsel for the parties made detailed
submissions referring to the relevant pieces of evidence
on record in support of their submissions. Having heard
the learned counsel for the parties and having perused
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the material on record, we find that the High Court has
advanced substantial justice between the parties by
accepting the alternate relief claimed by the plaintiff of
refund of the advance amount along with the interest @
12% per annum. The High Court found suspicious
circumstances and doubtful situations being raised by
both the sides. The reasons given by the High Court as
contained in paragraph 40, in our opinion, were
sufficient to arrive at a conclusion of not awarding the
relief of specific performance of contract rather directing
for refund of advance amount at adequate interest rate.
14. In the facts and circumstances of the case, we are
not inclined to interfere with the judgment and order of
the High Court. Accordingly, both the appeals are
dismissed.
…………..........................J.
[HEMANT GUPTA]
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.………….........................J.
[VIKRAM NATH]
NEW DELHI
AUGUST 18, 2022.
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