Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

CIVIL APPEAL NO(s).4943 OF 2022
(arising out of SLP (Civil) Nos. 19087 of 2018)
(Arising out of SLP (Civil)No.6476 of 2019)
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
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
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
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
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
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:
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
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
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
in the said suit registered as O.S. No.111 of 2005 in the
Court of Munsiff, Kannur:
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
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.”
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
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
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.
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:
“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
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
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
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
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
AUGUST 18, 2022. 


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