Commissioner of Income Tax, vs. Sri B. Yadagiri,

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE SATHISH NINAN THURSDAY, THE 2ND DAY OF FEBRUARY 2017/13TH MAGHA, 1938 AS.No. 83 of 2000 (B) ---------------------- AGAINST THE ORDER/JUDGMENT IN OS.598/1993 of I ADDL.SUB COURT,ERNAKULAM DATED 29-03-1999 APPELLANT(S): -------------- 1 P.S.MOHANKUMAR S/O SADASIVA CHETTIAR, NANDA VIHAR, KUNNAMPILLY LANE, NETTEPPADAM ROAD, KARITHALA DESOM, ERNAKULAM VILLAGE, KANAYANNUR TALUK. (DIED) ADDL. APPELLANTS IMPLEADED 2. N.RANGANAYAKI, W/O LATE SRI.P.S.MOHANKUMAR, AGED 38 YEARS, RESIDING AT 39/1782, NANDAVIHAR, NETTIPADAM ROAD, KUNNAMPILLY LANE, ERNAKULAM, COCHIN 16. 3. ANAND MOHAN, S/O LATE P.S MOHANKUMAR, AGED 17 YEARS (MINOR), RESIDING AT 39/1782, NANDAVIHAR, ERNAKULAM, COCHIN 16, REPRESENTED BY MOTHER AND GUARDIAN SMT.N.RANGANAYAKI. 4. NANDAGOPAL, S/O LATE P.S.MOHANKUMAR, AGED 13 YEARS (MINOR), RESIDING AT 39/1782, NANDAVIHAR, ERNAKULAM, COCHIN 16, REPRESENTED BY MOTHER AND GUARDIAN SMT.N.RANGANAYAKI. 5. RADHA KRISHNAMMAL, W/O SRI.T.K.SADASIVAN, AGED 76 YEARS, RESIDING AT 39/1782, NANDAVIHAR, ERNAKULAM, COCHIN 16.

BY ADVS.SRI.K.C.CHARLES SRI.P.CHELLAPPAN SRI.E.N.HARI SRI.M.POLY MATHAI SMT.A.T.RENJU SRI.VIMAL K.CHARLES LEGAL HEIRS OF DECEASED APPELLANT ARE IMPLEADED AS ADDITIONAL A2 TO A5 AS PER ORDER DATED 15.11.2012 IN I.A No.1693/2001.

AS.No. 83 of 2000 (B) ---------------------- 2 RESPONDENT(S): -------------- 1. AANNAMMA ALIAS ACHAMMA W/O P.V.CHACKO, CHANDRANIBA, MULLOTH AMBADY LANE, CHITTOOR ROAD, ERNAKULAM. 2. P.V.CHACKO, S/O LATE SRI.VARKEY, CHANDRANIBA, MULLOTH AMBADY LANE, CHITTOOR ROAD, ERNAKULAM.

BY ADV. SRI.BINDU.O.V. BY ADV. SRI.ALAN PAPALI BY ADV. SRI.GEORGE BRISTON BY ADV. SRI.GILBERT GEORGE CORREYA BY ADV. SRI.O.V.MANIPRASAD BY ADV. SRI.NISHIL.P.S. BY ADV. SRI.P.K.VIJAYAMOHANAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 16-01-2017, ALONG WITH RFA. 364/2014, THE COURT ON 02.02.2017 DELIVERED THE FOLLOWING: vdv

V.Chitambaresh & Sathish Ninan, JJ. ============================== A.S No.83 of 2000 & R.F.A No.364 of 2014 ========================== Dated this the 02nd day of February, 2017 JUDGMENT Sathish Ninan, J 1. These appeals arise from the common judgment in O.S No.598 of 1993 and O.S No.647 of 1995 of the First Additional Sub Court, Ernakulam. The parties in both the suits are the same. The plaintiff in the suits is the appellant in the appeals. A.S No.83 of 2000 arises from O.S No.598 of 1993 which is a suit for specific performance of an agreement for sale. R.F.A No.364 of 2014 arises from O.S No.647 of 1995, which is a suit for return of advance sale consideration. The subject matter in the suits are portions of a multi storied building with 1/5 undivided share over the land wherein the building is situated and also a right of way to the said building. O.S No.647 of 1995 relates to the ground floor and O.S No.598 of 1993 relates to the first floor. In O.S No.598 of 1993 there is also a

A.S No.83/2000 & R.F.A No.364/2014 2 counter claim for damages. 2.Ext.A1 is the agreement for sale in respect of the first floor of the building. The total sale consideration stipulated therein is 13 lakhs. The ₹ sale deed is agreed to be executed within a period of six months. An amount of 2 lakhs is paid ₹ towards advance sale consideration. Ext.B7 agreement executed on the very same day between the parties is an agreement for sale regarding the ground floor of the building. The sale consideration fixed was 13.5 lakhs, payable within a period of six months. As per Ext.B7, an amount of 25,000/- was paid as ₹ advance sale consideration. 3. Alleging that the defendant failed to perform the contract, O.S No.598 of 1993 was filed for specific performance of the agreement for sale with respect to the first floor of the building, and O.S No.647 of 1995 is filed in respect of the agreement relating to the ground floor of the building, for

A.S No.83/2000 & R.F.A No.364/2014 3 return of advance sale consideration. The defendant contended that it is the plaintiff who committed default in the performance of the contract. It was further contended that though two documents styled as agreements were executed on 13.08.1992, namely Exts.A1 and B7, the parties were in fact guided by a single agreement for sale of the ground floor and first floor of the building namely Ext.B1 dated 11.06.1992. Though time was the essence of the contract, the plaintiff failed to perform his part of the agreement. A counter claim is raised for damages also. In respect of the ground floor of the building the case of the plaintiff is that the ground floor is a parking area, that the agreement for sale was entered into on the representation of the defendants that the ground floor could be converted into shopping rooms. Since the law does not permit such conversion, the plaintiff claimed refund of the advance sale consideration.

A.S No.83/2000 & R.F.A No.364/2014 4 4.The court below after considering the oral and documentary evidence in the case came to a conclusion that the non-performance of the agreements for sale were caused at the hands of the plaintiff. 5. Heard the learned counsel for the appellant/ plaintiff and the respondents/ defendants. 6. It is in evidence that draft sale deeds were prepared by one Advocate Sri.K.K.Poulose on instructions from the plaintiff. In Ext.A7 draft sale deed, only a lesser consideration than the agreed amount was stated. DW2 the second defendant has stated that the defendants did not agree to the mentioning of a lesser consideration in the document. The said Advocate Sri.K.K.Poulose was examined as PW2. He gave evidence that it was the plaintiff who instructed to prepare the draft sale deed and the draft was prepared in accordance with the instructions given by the plaintiff. Though the

A.S No.83/2000 & R.F.A No.364/2014 5 plaintiff alleged that the defendants failed to obtain the income tax clearance certificate, the defendants contend that to obtain the said certificate, a copy of the agreement and a prescribed form signed by the purchaser and the seller is to be forwarded to the department. DW2 deposed that neither the agreement nor the prescribed form duly signed by the plaintiff, were given to the defendants. There is no case for the plaintiff that he had given those documents to the defendants. It is the further case of the defendants that though the agreement for sale was entered into for wiping off the liability of the defendants to a Bank, the plaintiff did not pay the amounts to the Bank. DW2 deposed that the plaintiff was taken to the Bank and Ext.X2 letter was given seeking permission for the plaintiff to pay the debt due from the defendant to the bank. However, the plaintiff did not pay the amount. The evidence

A.S No.83/2000 & R.F.A No.364/2014 6 further reveal that Ext.A7 draft sale deed, which was got prepared by the plaintiff related only to the eastern half of the first floor of the building. There is no case that a similar document was prepared in respect of the western half. Thereafter, though Ext.B2 sale deed was prepared in respect of the entire first floor, as mentioned earlier, there the sale consideration shown was less than the actual sale consideration. The defendants were not agreeable for the same. Apart from all these, though the plaintiff as PW1 deposed that the entire balance sale consideration was available with him, that is disproved by Ext.A2 and A3 Bank pass books. Ext.A2 pass book is in the name of the plaintiff and Ext.A3 pass book is in the name of Jyothi Trading Corporation, which according to PW1 is the business concern of his wife. Whatever that be, the total amount in Ext.A2 and A3 accounts together is only 7 lakhs. That would not be ₹

A.S No.83/2000 & R.F.A No.364/2014 7 sufficient enough to pay off the entire sale consideration. Thus, it is evident from the material available, that the plaintiff was not ready and willing to perform his part of the contract. The finding of the court below in the said regard, is perfectly justified on the facts and evidence. 7. Even assuming that the non-performance of the contract was at the instance of the defendants, that does not by itself enable the plaintiff to have a decree of specific performance of the contract. The grant of the relief of specific performance is dependent on the exercise of discretion under Section 20 of the Specific Relief Act. Here, Ext.B1 assumes significance. Ext.B1 reads thus: “Received from Sri.P.S.Mohankumar, 39/1782, Nettipadam Road, Cochin 16, sum of Rs. 25000/- being the token advance towards the sale consideration of Rs. 26.5 lakhs (Rupees twenty six lakhs and fifty thousand only) for the ground and

A.S No.83/2000 & R.F.A No.364/2014 8 first floors of my building known as Palackal Court, M.G Road, Ernakulam, with Door No.XI/7408, 7409 and 7410 for which separate agreements will be executed tomorrow.”

As is seen therefrom, the parties agreed that the ground and first floors of the building would be sold by the defendants to the plaintiff for an amount of 26.5 lakhs and that the amount of ₹ ₹ 25,000/- was paid as advance sale consideration. It is thus clear that the original agreement between the parties was for sale of both the ground floor and first floor together. Here it is to be noted that the ground floor of the building is a vacant car parking area. It is in furtherance of Ext.B1 and as stipulated therein that Exts.A1 and B7 agreements have been executed. Therefore, what was actually intended to between the parties was sale of the first and ground floors of the building for an

A.S No.83/2000 & R.F.A No.364/2014 9 amount of 26.5 lakhs. As observed by the court ₹ below, the real arrangement between the parties was for sale of the first and ground floors of the building as a single bargain. This is relevant in considering the claim for specific performance regarding one floor of the building alone. If the real intention between the parties was for conveyance of the ground floor and first floor together, the fact that specific performance is sought for only regarding one of the floors and that as regards the ground floor what is sought for is return of the advance sale consideration, assumes significance. The real understanding and agreement between the parties is intended to be altered with by the plaintiff in seeking for return of advance in respect of one of the floors. This is a circumstance justifying the refusal to exercise discretion to grant specific performance. So also it is to be noted that the agreement for sale is of the year

A.S No.83/2000 & R.F.A No.364/2014 10 1992. Almost 25 years have elapsed since the date of agreement. The property is situated at the heart of Ernakulam city. It is common knowledge that price relating to immovable properties have shot up tremendously, especially in cities. The grant of a decree for specific performance at this distance of time will not do justice. Therefore, we do not think that it is a fit case where the discretion should be exercised in favour of granting a decree for specific performance. 8. The counter claim raised by the defendants for damages was disallowed by the court below. No evidence was adduced by the defendants to substantiate the claim for damages. The defendants have not filed any appeal against the dismissal of their claim and the same has become final. 9. During the course of the submissions, the learned counsel for the plaintiff submits that in the event

A.S No.83/2000 & R.F.A No.364/2014 11 this Court finds that a decree for specific performance cannot be granted to the plaintiff, the advance sale consideration of 5,10,000/- (out of ₹ which 4, 85,000/- relates to first floor of the ₹ building and 25,000/- relates to the ground floor ₹ of the building) may be directed to be refunded with interest. When the discretion in terms of Section 20 of the Specific Relief Act is being excercised against the plaintiff, and the claim for damages by the defendants is negatived, it is only just and equitable that when he makes such a request, he be granted a decree for return of the advance sale consideration, with interest. The claim of the plaintiff in O.S No.647 of 1995 for return of the advance sale consideration of 25,000/- was ₹ rejected by the court below stating that it is only earnest money given by the plaintiff and is liable to be forfeited on his breach. There is nothing to indicate that the said amount represented earnest

A.S No.83/2000 & R.F.A No.364/2014 12 money. A reading of the agreements Exts.B1 and B7 reveal that the said amount represent advance sale consideration. Since there is no proof of any damages suffered by the defendants, the said amount is liable to be returned to the plaintiff with interest. 10. Accordingly, the appeals are allowed granting a decree in favour of the plaintiff to realise the amount of 5,10,000/-, with interest at the rate of ₹ 9% per annum, on 4,85,000/- from the date of ₹ filing of O.S No.598 of 1993, and on 25,000/- from ₹ the date of filing of O.S No.647 of 1995, till realisation, from the defendants jointly, severally and from their assets. The appellant/ plaintiff will be entitled for proportionate costs also. Sd/- V.Chitambaresh, Judge Sd/-

Sathish Ninan, Judge vdv