REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 6014-6015 OF 2021
K. Karuppuraj …Appellant(s)
Versus
M. Ganesan …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 27.11.2017 passed by the High Court of Judicature at
Madras in Appeal Suit No. 94 of 2010 by which the High Court has
allowed the said appeal by quashing and setting aside the judgment and
decree passed by the learned Trial Court dismissing the suit for specific
performance and consequently decreeing the suit, the original defendant
has preferred the present Civil Appeal No. 6014 of 2021.
1.1 Feeling aggrieved and dissatisfied with the judgment and order
dated 06.01.2020 rejecting the Review Application No. 71 of 2019 in
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Appeal Suit No. 94 of 2010, the defendant as review applicant has
preferred the present Civil Appeal No. 6015 of 2021.
2. The facts leading to the present appeals in a nutshell are as
under:-
2.1 An agreement for sale of the property situated in Kaspa
Coimbatore was entered into between the plaintiff and the defendant
wherein the defendant agreed to sell the same for a sale consideration
of Rs. 16.20 lakhs to the plaintiff. A part sale consideration of
Rs.3,60,001/- was paid at the time of execution of the agreement to sell.
There were certain conditions stipulated in the agreement to sell. One of
the conditions was that the defendant as original owner was required to
evict the tenants from the property in question and thereafter to execute
the sale deed on receipt of the full sale consideration. The plaintiff sent
a legal notice to the defendant asking to evict the tenants from the
property in question and to execute the sale deed on receipt of the
balance sale consideration vide notice dated 01.07.2006.
2.2 That thereafter the plaintiff filed the present suit before the learned
Trial Court for specific performance of the contract. It was the case on
behalf of the plaintiff that he was ready and willing to perform his part of
the contract but the defendant did not evict the tenants and come
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forward to execute the sale deed. Therefore, it was averred in the plaint
that the defendant has to evict the tenants and perform his part of the
contract and execute the sale deed. It was pleaded on behalf of the
plaintiff that he was ready with the cash in his savings account and,
therefore, he was always ready to perform his part of the contract. The
defendant contested the suit by filing the written statement. Readiness
and willingness on the part of the plaintiff and to perform the specific part
of the contract was specifically denied. It was submitted that vacant
possession was already known to the plaintiff as the tenants had been
vacated and inspite of such the plaintiff was not ready to pay the
remaining consideration. The learned Trial Court framed the following
issues:-
“1. Whether the plaintiff is entitled for specific
performance?
2. Whether the plaintiff was ready and willing to
purchase the property?
3. To what relief?”
2.3 Both the sides led the evidence, documentary as well as oral. On
appreciation of evidence and considering the pleadings in the plaint, the
learned Trial Court held the issue of readiness on the part of the plaintiff
in favour of the plaintiff, however, held that the plaintiff was not willing to
get the sale deed executed as it is, and, therefore, held the issue of
willingness against the plaintiff. The Trial Court also held that the
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defendant has failed to prove that tenants had vacated the suit property
as claimed, however, the learned Trial Court held on willingness against
the plaintiff by observing that the plaintiff has not shown the willingness
to purchase the property with the tenants and there are no such
pleadings in the plaint and that the plaintiff has not elected to purchase
the property as its nature. Therefore, the Trial Court on appreciation of
the evidence ultimately held that the plaintiff was not at all willing to
purchase the property with the tenants. Accordingly, the learned Trial
Court dismissed the suit and refused to pass the decree for specific
performance of the contract and directed the defendant to refund the
advance amount of Rs.3,60,001/- with interest @ 18% p.a. from the date
of agreement till the date of realization, to be paid within a period of two
months. The learned Trial Court also directed that there shall be a
charge over the property till such amount is realized by the plaintiff from
the defendant.
2.4 Feeling aggrieved and dissatisfied with the judgment and decree
passed by the learned Trial Court dismissing the suit for specific
performance, the plaintiff filed the appeal suit before the High Court. By
the impugned judgment and order, relying upon the affidavit filed before
the High Court in which for the first time the plaintiff stated that he is
ready and willing to purchase the property with the tenants, the High
Court without even re-appreciating the entire evidence on record and
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even without framing the points for determination has allowed the appeal
by the impugned judgment and order and has set aside the judgment
and decree passed by the learned Trial Court, and consequently has
decreed the suit for specific performance of the contract.
2.5 Feeling aggrieved and dissatisfied with the impugned judgment
and order/decree passed by the High Court – First Appellate Court
allowing the appeal and consequently decreeing the suit for specific
performance of the contract, the original defendant has preferred the
present appeal being Civil Appeal No.6014 of 2021. After the impugned
judgment and order/decree, the defendant filed the review application
before the High Court, which has been dismissed, which is the subject
matter of Civil Appeal No.6015 of 2021.
3. Shri Ratnakar Dash, learned senior counsel appearing for the
appellant/defendant has vehemently submitted that in the facts and
circumstances of the case, the High Court has materially erred in
allowing the appeal and decreeing the suit for specific performance of
the contract.
3.1 It is vehemently submitted by the learned senior counsel appearing
for the appellant that the impugned judgment and order passed by the
High Court as a First Appellate Court cannot be sustained. It is
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submitted that as such the High Court has not exercised the appellate
jurisdiction vested in it, particularly, while exercising the jurisdiction under
Section 96 read with Order XLI Rule 31 of the Civil Procedure Code. It
is submitted that the High Court has not at all re-appreciated the
evidence on record and without even discussing the evidence on record
and even without raising the points for determination on the basis of the
issues which were framed by the learned Trial Court, the High Court has
allowed the appeal and has decreed the suit for specific performance,
which otherwise is not permissible.
3.2 It is further submitted by learned senior counsel appearing on
behalf of the appellant that there is no re-appreciation of evidence on the
issue of willingness on the part of the plaintiff, which was dealt with and
considered by the learned Trial court in detail and the issue which was
held against the plaintiff.
3.3 It is submitted that even the High Court has erred in passing the
impugned judgment and order relying upon the affidavit of the
respondent-plaintiff, which was filed before the High Court in which for
the first time the plaintiff came out with a case that he is ready and
willing to purchase the property with tenants. It is submitted that such a
course adopted by the High Court is wholly impermissible under the law.
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3.4 It is submitted that what was not pleaded by the plaintiff in the
plaint on willingness to purchase the property with tenants has now been
permitted by the High Court relying upon the affidavit filed before the
High Court for the first time. It is submitted that the affidavit filed by the
plaintiff before the High Court that he is ready and willing to purchase the
property with tenants is just contrary to the pleadings in the plaint and
even the findings recorded by the learned Trial Court.
3.5 It is further submitted by learned senior counsel appearing for the
appellant that as such the plaintiff never agreed to purchase the property
with tenants and as per the case of the plaintiff and so averred in the
plaint, it was pleaded that it was the responsibility of the defendant to
evict the tenants and hand over the peaceful vacant possession and
execute the sale deed. It is submitted that, therefore, thereafter it was
not open on the part of the plaintiff to submit that he is ready and willing
to purchase the property with tenants and that too by an affidavit for the
first time filed before the High Court.
3.6 It is submitted that without even permitting the plaintiff to amend
the plaint, the course adopted by the High Court permitting to change his
stand by way of an affidavit is unknown to law and the procedure to be
followed under the provisions of the CPC. Making above submissions
and relying upon the decisions of this Court in the case of B.V. Nagesh
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and Anr. Vs. H.V. Sreenivasa Murthy, (2010) 13 SCC 530, H. Siddiqui
(Dead) by LRs. Vs. A. Ramalingam (2011) 4 SCC 240 and State Bank
of India and Anr. Vs. Emmsons International Limited and Anr. (2011)
12 SCC 174, it is prayed to allow the present appeal and quash and set
aside the impugned judgment and order passed by the High Court and
consequently dismiss the suit.
4. Present appeal is vehemently opposed by Mr. Navaniti Prasad
Singh, learned senior counsel appearing on behalf of the respondent –
original plaintiff.
4.1 It is vehemently submitted by learned senior counsel appearing on
behalf of the respondent - plaintiff that as such as per the condition in the
agreement to sell, it was the responsibility of the defendant to evict the
tenants and thereafter to hand over the peaceful and vacant possession
and execute the sale deed on receipt of the balance sale consideration.
It is submitted that in the present case admittedly the defendant did not
perform his part of evicting the tenants. It is submitted, therefore, that to
allow the suit and pass the decree for specific performance will
tantamount to giving a premium to the defendant, who has failed to
perform his part under the agreement to sell.
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4.2 It is submitted that as such against the total sale consideration of
Rs.16.20 lakhs, defendant paid only Rs. 3,60,001/- at the time of
execution of agreement to sell. It is submitted that, therefore, when
subsequently the learned Trial Court held that plaintiff did not elect to get
the sale deed executed with tenants, the defendant rightly filed an
affidavit before the High Court and stated that he is ready and willing to
get the sale deed executed even with tenants. It is submitted, therefore,
that by allowing the defendant to file the affidavit to contend that he is
ready and willing to get the sale deed executed and to purchase the
property with tenants, the High Court has done the substantial justice so
as to not to permit the defendant to take the benefit of his own wrong in
not evicting the tenants.
4.3 It is further submitted by learned senior counsel appearing on
behalf of the respondent - plaintiff that even the defendant has not
returned the amount of part consideration paid, i.e., Rs.3,60,001/- with
interest @ 18% p.a. to the plaintiff though directed by the learned Trial
Court. In the alternative, it is submitted by the learned senior counsel
appearing on behalf of the respondent that the technicalities shall not
come in the way of the plaintiff and, therefore, the matter may be
remitted to the High Court and permit the plaintiff to amend the plaint in
exercise of powers under Order VI Rule 17 of the CPC.
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4.4 Alternatively, it is also submitted that if this Court is of the opinion
that the High Court ought not to have disposed of the appeal without
determining the points for determination on the issues framed by the
learned Trial Court, in that case, the matter may be remitted to the High
Court for fresh consideration and to decide and dispose of the appeal
afresh after framing the points for determination as required under Order
XLI Rule 31 of the CPC. Making above submissions, it is prayed to
dismiss the present appeal.
5. Heard the learned counsel for the respective parties at length.
6. In the present case, the original plaintiff instituted a suit for specific
performance of the contract. On appreciation of evidence, the learned
Trial Court held the issue of readiness in favour of the plaintiff. However,
refused to pass the decree for specific performance of the contract on
the ground that the plaintiff was not willing to purchase the property with
tenants. Therefore, the issue with respect to willingness was held
against the plaintiff. In an appeal filed before the High Court under
Section 96 read with Order XLI by the impugned judgment and order, the
High Court has allowed the said appeal and has quashed and set aside
the decree passed by the learned Trial Court dismissing the suit and
consequently has decreed the suit for specific performance. Having
gone through the impugned judgment and order passed by the High
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Court, it can be seen that there is a total non-compliance of the Order
XLI Rule 31 of CPC. While disposing of the appeal, the High Court has
not raised the points for determination as required under Order XLI Rule
31 CPC. It also appears that the High Court being the First Appellate
court has not discussed the entire matter and the issues in detail and as
such it does not reveal that the High Court has re-appreciated the
evidence while disposing of the first appeal. It also appears that the
High Court has disposed of the appeal preferred under Order XLI CPC
read with Section 96 in a most casual and perfunctory manner. Apart
from the fact that the High Court has not framed the points for
determination as required under Order XLI Rule 31 CPC, it appears that
even the High Court has not exercised the powers vested in it as a First
Appellate Court. As observed above, the High Court has neither reappreciated the entire evidence on record nor has given any specific
findings on the issues which were even raised before the learned Trial
Court.
6.1 In the case of B.V. Nagesh and Anr. (supra), this Court has
observed and held that without framing points for determination and
considering both facts and law; without proper discussion and assigning
the reasons, the First Appellate Court cannot dispose of the first appeal
under Section 96 CPC and that too without raising the points for
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determination as provided under Order XLI Rule 31 CPC. In paragraphs
3 and 4, it is observed and held as under:-
“3. How the regular first appeal is to be disposed of
by the appellate court/High Court has been considered
by this Court in various decisions. Order 41 CPC deals
with appeals from original decrees. Among the various
rules, Rule 31 mandates that the judgment of the
appellate court shall state:
(a) the points for determination;
(b) the decision thereon;
(c) the reasons for the decision; and
(d) where the decree appealed from is reversed or
varied, the relief to which the appellant is entitled.
4. The appellate court has jurisdiction to reverse or
affirm the findings of the trial court. The first appeal is a
valuable right of the parties and unless restricted by law,
the whole case is therein open for rehearing both on
questions of fact and law. The judgment of the appellate
court must, therefore, reflect its conscious application of
mind and record findings supported by reasons, on all
the issues arising along with the contentions put forth,
and pressed by the parties for decision of the appellate
court. Sitting as a court of first appeal, it was the duty of
the High Court to deal with all the issues and the
evidence led by the parties before recording its findings.
The first appeal is a valuable right and the parties have
a right to be heard both on questions of law and on facts
and the judgment in the first appeal must address itself
to all the issues of law and fact and decide it by giving
reasons in support of the findings. (Vide Santosh
Hazari v. Purushottam Tiwari [(2001) 3 SCC 179], SCC
p. 188, para 15 and Madhukar v. Sangram [(2001) 4
SCC 756] , SCC p. 758, para 5.)”
6.2 In the case of Emmsons International Limited and Anr. (supra)
while considering the scope and ambit of exercise of powers under
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Section 96 of CPC by the Appellate Court and after considering the
decisions of this Court in the cases of Madhukar and Ors. Vs. Sangram
and Ors., (2001) 4 SCC 756; H.K.N. Swami Vs. Irshad Basith (Dead)
by LRs., (2005) 10 SCC 243 and Jagannath Vs. Arulappa and Anr.,
(2005) 12 SCC 303, it is held that sitting as a Court of First Appeal, it is
the duty of the Appellate Court to deal with all the issues and the
evidence led by the parties before recording its findings.
6.3 In the case of H. Siddiqui (Dead) by LRs. (supra), it is observed
and held in paragraph 21 as under:-
“21. The said provisions provide guidelines for the
appellate court as to how the court has to proceed and
decide the case. The provisions should be read in such
a way as to require that the various particulars
mentioned therein should be taken into consideration.
Thus, it must be evident from the judgment of the
appellate court that the court has properly appreciated
the facts/evidence, applied its mind and decided the
case considering the material on record. It would
amount to substantial compliance with the said
provisions if the appellate court's judgment is based on
the independent assessment of the relevant evidence on
all important aspects of the matter and the findings of
the appellate court are well founded and quite
convincing. It is mandatory for the appellate court to
independently assess the evidence of the parties and
consider the relevant points which arise for adjudication
and the bearing of the evidence on those points. Being
the final court of fact, the first appellate court must not
record mere general expression of concurrence with the
trial court judgment rather it must give reasons for its
decision on each point independently to that of the trial
court. Thus, the entire evidence must be considered and
discussed in detail. Such exercise should be done after
formulating the points for consideration in terms of the
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said provisions and the court must proceed in
adherence to the requirements of the said statutory
provisions. (Vide Sukhpal Singh v. Kalyan Singh [AIR
1963 SC 146] , Girijanandini Devi v. Bijendra Narain
Choudhary [AIR 1967 SC 1124] , G.
Amalorpavam v. R.C. Diocese of Madurai [(2006) 3 SCC
224] , Shiv Kumar Sharma v. Santosh Kumari [(2007) 8
SCC 600] and Gannmani Anasuya v. Parvatini
Amarendra Chowdhary [(2007) 10 SCC 296 : AIR 2007
SC 2380] .)”
7. Applying the law laid down by this Court in the aforesaid decisions,
if the impugned judgment and order passed by the High Court is
considered, in that case, there is a total non-compliance of the
provisions of the Order XLI Rule 31 CPC. The High Court has failed to
exercise the jurisdiction vested in it as a First Appellate Court; the High
Court has not at all re-appreciated the entire evidence on record; and not
even considered the reasoning given by the learned Trial Court, in
particular, on findings recorded by the learned Trial Court on the issue of
willingness. Therefore, as such, the impugned judgment and order
passed by the High Court is unsustainable and in normal circumstances
we would have accepted the request of the learned senior counsel
appearing on behalf of the respondent to remand the matter to the High
Court for fresh consideration of appeal. However, even on other points
also, the impugned judgment and order passed by the High Court is not
sustainable. We refrain from remanding the matter to the High Court
and we decide the appeal on merits.
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8. It is required to be noted that as per the case of the original
plaintiff, the defendant was required to evict the tenants and hand over
the physical and vacant possession at the time of execution of the sale
deed on payment of full sale consideration. Even in the suit notice
issued by the plaintiff, the plaintiff called upon the defendant to evict the
tenants and thereafter execute the sale deed on payment of full
consideration from the plaintiff. Even when we consider the pleadings
and the averments in the plaint, it appears that the plaintiff was never
willing to get the sale deed executed with tenants and/or as it is. It was
the insistence on the part of the plaintiff to deliver the vacant possession
after evicting the tenants. Therefore, on the basis of the pleadings in the
plaint and on appreciation of evidence, the learned Trial Court held the
issue of willingness against the plaintiff. However, before the High
Court, the plaintiff filed an affidavit stating that he is now ready and
willing to get the sale deed executed with respect to the property with
tenants and unfortunately, the High Court relying upon the affidavit in the
first appeal considered that as now the plaintiff is ready and willing to
purchase the property with tenants and get the sale deed executed with
respect to the property in question with tenants, the High Court has
allowed the appeal and decreed the suit for specific performance. The
aforesaid procedure adopted by the High Court relying upon the affidavit
in a First Appeal by which virtually without submitting any application for
amendment of the plaint under Order VI Rule 17 CPC, the High Court as
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a First Appellate Court has taken on record the affidavit and as such
relied upon the same. Such a procedure is untenable and unknown to
law. First appeals are to be decided after following the procedure to be
followed under the CPC. The affidavit, which was filed by the plaintiff
and which has been relied upon by the High Court is just contrary to the
pleadings in the plaint. As observed hereinabove, there were no
pleadings in the plaint that he is ready and willing to purchase the
property and get the sale deed executed of the property with tenants and
the specific pleadings were to hand over the peaceful and vacant
possession after getting the tenants evicted and to execute the sale
deed. The proper procedure would have been for the plaintiff to move a
proper application for amendment of the plaint in exercise of the power
under Order VI Rule 17 CPC, if at all it would have been permissible in a
first appeal under Section 96 read with Order XLI CPC. However,
straightaway to rely upon the affidavit without amending the plaint and
the pleadings is wholly impermissible under the law. Therefore, such a
procedure adopted by the High Court is disapproved.
The learned Trial Court held the issue of willingness against the
plaintiff by giving cogent reasons and appreciation of evidence and
considering the pleadings and averments in the plaint. We have also
gone through the averments and the pleadings in the plaint and on
considering the same, we are of the opinion that the learned Trial Court
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was justified in holding the issue of willingness against the plaintiff. The
plaintiff was never ready and willing to purchase the property and/or get
the sale deed executed of the property with tenants. It was for the first
time before the High Court in the affidavit filed before the High Court and
subsequently when the learned Trial Court held the issue of willingness
against the plaintiff, the plaintiff came out with a case that he is ready
and willing to purchase the property with tenants. For the purpose of
passing the decree for specific performance, the plaintiff has to prove
both the readiness and willingness. Therefore, once it is found on
appreciation of evidence that there was no willingness on the part of the
plaintiff, the plaintiff is not entitled to the decree for specific performance.
Therefore, in the present case, the learned Trial Court was justified in
refusing to pass the decree for specific performance.
9. The submission on behalf of the plaintiff that in the agreement a
duty was cast upon the defendant to evict the tenants and to handover
the vacant and peaceful possession, which the defendant failed and,
therefore, in such a situation, not to pass a decree for specific
performance in favour of the plaintiff would be giving a premium to the
defendant despite he having failed to perform his part of the contract.
The aforesaid seems to be attractive but for the purpose of passing a
decree for specific performance, readiness and willingness has to be
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established and proved and that is the relevant consideration for the
purpose of passing a decree for specific performance.
10. Now, so far as the submission on behalf of the plaintiff that even
the defendant has not refunded the amount of Rs.3,60,001/- with interest
@ 18% as ordered by the learned Trial Court concerned, the order
passed by the learned Trial Court is very clear and the defendant is
saddled with the law to pay the interest @ 18% till its realization.
Therefore, the plaintiff is compensated by awarding 18% interest. His
not refunding the amount of part sale consideration with 18% interest as
ordered by the learned Trial Court cannot be a ground to confirm the
impugned judgment and order passed by the High Court. The plaintiff as
such could have filed an execution petition to execute the
judgment/decree passed by the learned Trial Court. Further, we propose
to issue a direction to the appellant – original defendant directing him to
refund the amount of Rs.3,60,001/- with 18% interest from the date of
the agreement till the date of realization within a period of eight weeks
from today.
11. In view of the above and for the reasons stated above, both the
appeal succeeds. The impugned judgment and order passed by the
High Court of judicature at Madras in Appeal Suit No. 94 of 2010 is
hereby quashed and set aside and the judgment and decree passed by
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the learned Trial Court stands restored. However, in the facts and
circumstances of the case, the appellant herein original defendant is
directed to refund the amount of Rs.3,60,001/- with 18% interest from
the date of agreement till realization within a period of eight weeks from
today. Appeals are allowed to the aforesaid extent, however, there shall
be no order as to costs.
Pending applications, if any, also stand disposed of.
………………………………….J.
[M.R. SHAH]
NEW DELHI; ………………………………….J.
OCTOBER 04, 2021. [A.S. BOPANNA]
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