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Tuesday, September 15, 2015

Suit for specific performance - Sec.20 of Specific Relief Act - Sec.13 of Indian Evidence Act - whether criminal court finding is binding on civil court - Apex court held that when it is quater white paper and when the original agreement of sale mentioned in it not produced - Court has to exercise it's discretion under sec.20 of Specific Relief Act - Court can not come to a conclusion on criminal court findings as it is not final conclusion one , with out giving an independent finding. - High court committed wrong - suit is dismissed as held by trial court - 2015 S.C. MSKLAWREPORTS

Suit for specific performance - Sec.20 of Specific Relief Act - Sec.13 of Indian Evidence Act - whether criminal court finding is binding on civil court - Apex court held that when it is quater white paper and when the original agreement of sale mentioned in it not produced - Court has to exercise it's discretion under sec.20 of Specific Relief Act - Court can not come to a conclusion on criminal court findings as it is not final conclusion one , with out giving an independent finding. - High court committed wrong - suit is dismissed as held by trial court - 2015 S.C. MSKLAWREPORTS

High Court partly allowed the appeal, set aside  the  judgment  of
the trial court and decreed the suit  of  the  plaintiff-respondents  herein
for specific performance as well as  for  recovery  of  possession  of  suit
items I, II and III.

 The children of late Jambusab could not agree  to  divide
the properties of late Jambusab.  They  litigated  and  ultimately  in  R.A.
133/49-50 on the file of the High Court, a final decree was passed  and  the
properties described in the Schedule to the plaint fell to the  joint  share
of the first plaintiff and his younger brother R.A. Rasheed.   The  date  of
the decree is 22.08.1950.
The first plaintiff and his younger brother  thus
became the exclusive joint owners of the suit  schedule  property  and  from
the date of the High Court decree namely 22.08.1950.

The first item of  the
suit schedule which was designed as a Cinema building was leased jointly  by
the first plaintiff and his  younger  brother  R.A.  Rasheed  to  late  N.K.
Subbaiah  Shetty  and  one  Rattanhalli  Ramappa  jointly  by  means  of   a
registered lease deed dated 26.02.1951 specifying therein  a  period  of  15
years for the running of the lease.
The said lease by  the  terms  provided
inter alia for a monthly rent of Rs. 400/- to be paid  in  equal  halves  to
the  first  plaintiff  and  R.A.  Rasheed.
 The  lessees  had  to   advance
Rs.10,000/- which will be treated  as  a  charge  on  item  no.  1  of  suit
Schedule.
All the equipments such as cinema projector, electric  generator,
furniture and other accessories were purchased by  the  said  lessees  which
they had to provide under the contract and  the  theatre  was  equipped  for
showing films.  It was also a term under the  lease  that  these  equipments
projector,  generator  etc.,  should  become  the  property  of  the   first
plaintiff and his brother R.A. Rasheed on  the  termination  of  the  lease.
While only Rs. 5,000/- was given as advance, the expenses of the balance  of
Rs. 5,000/- which was retained  by  N.K.  Subbaiah  Shetty  and  Rattanhalli
Ramappa has been accounted for and  thus  only  Rs.  5000/-  is  the  actual
amount of advance.

1) Whether the 1st defendant was the Power of Attorney  Holder  of  the  2nd
Defendant?

2) Whether the 1st defendant for himself and as Power of Attorney Holder  of
2nd defendant executed an agreement  of  sale  dated  2.9.1967  agreeing  to
convey the plaint schedule properties in favour of the plaintiff?

3) Whether under the said agreement the plaintiff paid  the  amount  to  the
1st defendant as mentioned in para 11(a) (b) (c) (d) of the plaint?

4) Whether the plaintiffs are entitled to the specific  performance  of  the
agreement of the sale and for possession of the schedule properties?


While deciding issue Nos. 2-4 together, the trial court  came  to  the
conclusion that the plaintiff-respondent failed to prove that the  agreement
of sale dated  2.9.1967  was  executed  by  the  defendants-appellants  and,
therefore, got entitled to the specific performance of  agreement  to  sell.
The reasoning given in deciding the issues inter alia are that  the  alleged
agreement was executed  in  a  quarter  sheet  of  paper  written  in  small
letters.  No reason has been attributed as to why a  small  piece  of  paper
was used for writing the agreement  ExP-1.  
The  relevant  portion  of  the
finding arrived at by the trial court can be extracted hereunder :-
“If we carefully go through the document at Ex. P.4  it  is  clearly  stated
that the defendant 1 as the power of  attorney  of  the  2nd  defendant  and
Subramanya Shetty as executed Ex.P.1 in favour of  the  first  and  the  2nd
plaintiff, after taking Rs.4,500/- this documents has been written  on  very
old quarter sheet piece of paper which is written  in  very  small  letters.
Ex.P.1 is not at all written in usual course.  No reasons  are  assigned  in
the evidence of the PW.1,2 and 5 as to why a small piece of  paper  is  used
for writing Ex.P.1.  Ex.P.1 is written in a city like  Mysore.   It  is  not
written in a remote small village, wherein the  scarcity  of  paper  can  be
expected.  It is further pertinent to note here that the  shop  premises  of
the first defendant was situate admittedly in Santhepete which is very  near
to Devaraja Market and Srirampet, which are heart  of  business  centers  of
Mysore.  Further, Ex.P.1 is admitted written before  Noon.  …..  time  P.W.1
has stated that between 9 a.m. to 1 p.m. he  has  written  Ex.P.1.   Further
P.W.5 has stated by about 2-30 p.m. Ex. P.1 is written, P.W.2 has stated  by
about 12 noon Ex.P.1 is written, that means Ex.P.1 is  written  in  a  broad
day light.  If the handwriting contained in Ex.P.1 in small letters  reduced
to writing atleast the same will cover  2  full  sheets  of  papers  meaning
thereby it may go to cover 4 pages of hill  size  papers.   No  reasons  are
assigned as to why Ex.P.1 is  written  in  such  a  congested  manner.   Non
availability of the paper to write Ex.P.1 cannot  at  all  be  expected  nor
anticipated in a city of Mysore, that too near  the  first  defendants  shop
which is in the business centre of Mysore City.  It is admitted by  all  the
witnesses that there are several  shops  of  stamps  vendors  and  advocates
offices.  If that be the case, that would not have been  any  difficulty  to
secure the required paper to write Ex.P.1.   Further,  if  we  carefully  go
through the  contents  of  Ex.P.1,  it  goes  to  show  that  all  the  suit
properties are agreed to have been sold for Rs.25,000/- and  the  amount  of
Rs.20,500/- has been paid to the defendant earlier  to  02-09-67.   Further,
it is also clear that  the  amount  of  Rs.4,500/-  was  also  paid  to  the
defendant 1.  That means only the stamp papers to get  the  registered  sale
deed were required to be obtained.  No reasons are assigned the any  of  the
plaintiffs witnesses as to what was the difficulty in purchasing  the  stamp
paper to execute the reg. Sale deed regarding the sale mentioned in  Ex.P.1.
 It is not the case of the plaintiff, that  they  were  unable  to  purchase
required stamp papers on the date of Ex.P.1 due to  paucity  of  the  funds.
If it was really a genuine sale  or  tried  to  be  depicted  before  Court,
definitely the reg. Sale deed itself would  have  been  got  executed  since
except appearing  before  the  sub-registrar  the  first  defendant  is  not
required to do anything else but to sign the reg. Sale deed and if the  sale
was really a genuine sale nothing prevented the plaintiff to take the  first
defendant to the office of the Sub-Registrar and to get  executed  the  reg.
Document in the office of the  concerned/Sub-registrar  Pandavapura  but  no
reasons assigned as to why the reg. Sale deed is not got executed  from  the
1st defendant who is admittedly the holder of the general power of  attorney
from the 1st defendant and Subramanya Shetty, who were  the  owners  of  the
suit schedule properties on 02-09-67.  Further,  it  is  pertinent  to  note
here that though  it  is  mentioned  in  Ex.P.1  that  the  plaintiffs  were
required to make some arrangements regarding  the  amount  to  purchase  the
stamp papers and the registration fees etc. but none of the witnesses  P.Ws.
1,2 and 5 speak about this aspect of the case.”

 On the question of payment of  the  consideration  amount,  the  trial
court gave finding against the respondents.
 Finally, the  trial  court  held
that since issue nos. 2 to 4 have been decided against the  plaintiffs,  the
relief for specific performance cannot be granted.

 High  Court 

being  the  first  appellate  court,  re-appreciated  the
evidence and came to the conclusion that the findings recorded by the  trial
court are perverse in law.

 The Appellate Court dealt with the relevancy of the evidence  and  the
judgment recorded by the Criminal Court and held as under:
“17.  The conclusion  drawn  by  the  Criminal  Court  with  regard  to  the
document – Ex.P.1 in regard to its execution  etc.  are  certainly  relevant
and it can be relied upon as a  piece  of  evidence  by  the  plaintiffs  in
support of  their  case.   The  observations  made  by  the  Criminal  Court
regarding execution of agreement – Ex.P.1 in its  judgment  –  Ex.  P.4  are
certainly admissible U/s 13 of the Indian Evidence Act  in  support  of  the
claim of the plaintiffs regarding execution of  the  document  –  Ex.P.1  by
defendant No.1.  Therefore, the Trial Court was  not  at  all  justified  in
ignoring such evidence on the ground  that  the  judgment  of  the  Criminal
Court is not binding on the Civil Court.  May be, that the judgment  of  the
Criminal Court is not binding on the Civil  Court.   But,  the  observations
made  by  a  competent  Court  with  reference  to  certain  document  would
certainly be relevant even in a civil case, where  the  very  same  document
was a subject matter of challenge.
  In the instant case, it is not in dispute that the very same  document
– Ex.P.1 was produced before the Criminal Court wherein, plaintiff No.1  was
prosecuted on the charge of trespass and the Criminal Court having  examined
the said document has made  certain  observations  with  reference  to  such
document and that being so,  when  the  very  same  document  sought  to  be
questioned in a civil case,  the  observations  by  a  Criminal  Court  will
certainly have relevance.  In fact, the learned counsel for the  respondents
had advanced a contention that this document was created/concocted  for  the
purpose of defence in the criminal case
 The observations made by  the  Criminal
Court in its judgment – Ex.P.4 regarding the execution  of  the  document  –
Ex.P.1 lends credence to the evidence of PWs 1,2 & 5.   There  could  be  no
serious dispute that the plaintiffs were the original  owners  of  the  suit
properties and that the same  were  lost  in  a  series  of  litigation  and
ultimately the said properties which were once lost to the  plaintiffs  were
sought to be reconveyed to the plaintiffs by  virtue  of  this  agreement  –
Ex.P.1,  executed  in  their  favour   by   defendant   No.1.    Under   the
circumstances, there is  no  reason  to  disbelieve  the  execution  of  the
document – Ex.P.1 in favour of plaintiffs.  No doubt it was  executed  on  a
quarter sheet of paper and not on a proper stamp paper and that further  the
contents of the document – Ex.P.1 have been written in small  letters.   But
then it cannot be said, that is not a document.  It has to  point  out  that
the document is defined under the Indian Evidence Act  and  it  means,  “any
matter expressed or described  upon  any  substance  by  means  of  letters,
figures or marks or by more than one of those means intended to be  used  or
which may be used for the purpose of recording that matter”.  A  writing  is
a document, whether writing is made on a quarter sheet or paper  or  a  full
sheet, it is a document within the meaning of  the  Evidence  Act  and  that
merely because the writing is on a quarter  sheet  of  paper,  it  does  not
cease to be a document.  The only requirement  is  that  the  party  relying
upon a document must prove the same in accordance with  law.   The  mode  of
proving the contents of a document has been dealt with, in  Sections  61  to
66 of the Indian Evidence Act.  The contents of a  document  may  be  proved
either by the primary or secondary evidence.  Primary  evidence  means,  the
document itself produced for the inspection of the Court.   In  the  instant
case, it is not in dispute that the original agreement itself  was  produced
for the inspection of the Court as per Ex. P.1.  The  document  in  question
being an agreement of sale or a reconveyance agreement, it does not  require
attestation.  Section 67 of the Evidence Act refers to  document  other  the
document required by Law to be attested.  It shows  that  the  signature  of
the person alleged to have signed a document i.e. execution must  be  proved
by the evidence with the signature purporting to be that of  the  executants
is in his handwriting and the other matter in the  document  i.e.  its  body
must also be proved by proof of handwriting of a person purporting  to  have
written the document.  In the instant  case,  the  agreement  –  Ex.P.1  was
stated to have been written by its scribe –  PW.1  at  the  instructions  of
defendant No.1 and  after  the  document  was  written,  it  was  signed  by
defendant No.1.  Therefore, what was required to be proved  in  the  instant
case by the plaintiffs to prove the execution of document – Ex.P.1 was  that
it contains the signature of defendant No.1.”
Apex court 
   There is no dispute that even a decree for  specific  performance  can
be granted on the basis of oral contract.  Lord Du  Parcq  in  a  case  (AIR
1946  Privy  Council)  observed,  while  deciding  a   suit   for   specific
performance, that an oral contract is  valid,  binding  and  enforceable.  A
decree for specific performance  could  be  passed  on  the  basis  of  oral
agreement.
This view of a Privy Council was followed by this Court  in  the
case of Koillipara Sriramulu vs. T. Aswatha Narayana, AIR 1968 SC 1028,  and
held that an oral agreement with a reference to  a  future  formal  contract
will not prevent a binding bargain between the parties.

The appellant court discussed  the  evidence  of
PW-1, the scribe of  the  document,  who  deposed  that  the  agreement  was
written as per instructions given by appellant No.1
However, in a case where the plaintiff come forward to seek  a  decree
for specific performance of contract of sale of immoveable property  on  the
basis of an oral agreement or a written contract, heavy burden lies  on  the
plaintiff to prove that there was consensus ad idem between the parties  for
the concluded agreement for sale of immoveable property.
Whether there  was
such a concluded contract  or  not  would  be  a  question  of  fact  to  be
determined in the facts and circumstances of each individual  case.  It  has
to be established by the plaintiffs that vital  and  fundamental  terms  for
sale of immoveable property were concluded between the parties.

In a suit for specific performance of a contract,  the  Court  has  to
keep in  mind  Section  20  of  the  Specific  Reliefs  Act.   This  Section
preserves judicial discretion to  grant  decree  for  Specific  performance.
However, the Court  is  not  bound  to  grant  specific  performance  merely
because it is lawful to do so.  The Court should meticulously  consider  all
facts and circumstances of the case and to see that it is  not  used  as  an
instrument of oppression to  have  an  unfair  advantage  not  only  to  the
plaintiff but also to the defendant

“8. In a case of specific performance it  is  settled  law,  and  indeed  it
cannot be doubted, that the jurisdiction to order specific performance of  a
contract is based on the existence of a valid and enforceable contract.  The
Law of Contract is based  on  the  ideal  of  freedom  of  contract  and  it
provides the limiting principles within which the parties are free  to  make
their own contracts. Where a valid and enforceable  contract  has  not  been
made, the court will not make a  contract  for  them.  Specific  performance
will not be ordered if the contract itself suffers from  some  defect  which
makes the contract invalid or unenforceable. The  discretion  of  the  court
will be there even though the contract is otherwise  valid  and  enforceable
and it can pass a decree of specific performance even before there has  been
any breach of the  contract.  It  is,  therefore,  necessary  first  to  see
whether there has been a valid and enforceable contract and then to see  the
nature and obligation arising out of it. The contract being  the  foundation
of the obligation the order of  specific  performance  is  to  enforce  that
obligation.”

“33. The equitable discretion  to  grant  or  not  to  grant  a  relief  for
specific performance also depends upon  the  conduct  of  the  parties.  The
necessary ingredient has to be proved and established by  the  plaintiff  so
that discretion would be exercised judiciously in favour of  the  plaintiff.
At the same time, if the defendant  does  not  come  with  clean  hands  and
suppresses material facts and evidence and  misleads  the  court  then  such
discretion  should  not  be  exercised  by  refusing   to   grant   specific
performance.”
  In the instant case  while  deciding  the  issue  as  to  whether  the
agreement of 1967, allegedly executed by the defendants,  can  be  enforced,
the Court  had  to  consider  various  discrepancies  and  series  of  legal
proceedings before the agreement alleged to  have  been  executed.   In  the
agreement dated 2.9.1967, there is  reference  of  earlier  agreement  dated
29.11.1965 where under Rs. 18,000/-  was  paid  to  the  defendant-appellant
which was denied  and  disputed.  
Curiously  enough  that  agreement  dated
29.11.1965 was neither filed nor exhibited to substantiate the case  of  the
plaintiff.
 The High Court put reliance  on  the  agreement  dated  2.9.1967
written in a quarter sheet of paper merely because of  the  fact  that  said
quarter sheet of paper was produced before  the  Magistrate  in  a  criminal
proceeding.

 Indisputably, various documents including order-sheets in the  earlier
proceedings including execution case were filed to nullify the claim of  the
plaintiff regarding possession of the  suit  property  but  these  documents
have not been considered by the High Court.
In our  considered  opinion  the
evidence and the finding recorded by  the  criminal  courts  in  a  criminal
proceeding cannot  be  the  conclusive  proof  of  existence  of  any  fact,
particularly, the existence of agreement to  grant  a  decree  for  specific
performance without independent finding recorded by the Civil Court.

 In our view, the High Court is  not  correct  in  holding  that
there is no reason to disbelieve the execution of the document  although  it
was executed on a quarter sheet of paper and not on a proper stamp and  also
written in a small letter.
The High Court also misdirected  itself  in  law
in holding that there was no need of the plaintiff to have  sought  for  the
opinion of an expert regarding the execution of the document.
After examining  the  entire  facts  of  the  case  and  the  evidence
produced on record, we are of the definite opinion that  it  is  not  a  fit
case where the discretionary  relief  for  specific  performance  is  to  be
granted in favour of  the  plaintiff-respondent.  
The  High  Court  in  the
impugned judgment has failed to consider the scope  of  Section  20  of  the
Specific Relief Act and the law laid down by this Court.

 For all these  reasons,  this  appeal  is  allowed  and  the  impugned
judgment passed by the High Court is set aside. Consequently,  the  judgment
of the learned trial court is restored.  Hence, the suit  is  liable  to  be
dismissed.


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