(2013) 303 KLR 590

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE B.KEMAL PASHA

THURSDAY, THE 21ST DAY OF MARCH 2013/30TH PHALGUNA 1934 

AS.NO. 144 OF 1999 (A)

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AGAINST THE ORDER/JUDGMENT IN OS.124/1991 OF SUB COURT, MAVELIKKARA DATED 27-03-1998

APPELLANT(S)1ST DEFENDANT:

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VARGHESE, KALLELIVILAYIL VEEDU, THAMALLACKAL VADAKKUM MURI, KUMARAPURAM VILLAGE.

BY ADV. SRI.N.RATHEESH

RESPONDENT(S)/PLAINTIFFS & DEFENDANTS 2 TO 8:

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1. ANNAMMA VARGHESE ALIAS SALY VARGHESE, CHANGAVILAYIL VEEDU, VADEKKEKKARA, KIZHAKKUM MURI, PALLIPPAD VILLAGE.

2. SMITHA V. THOMAS OF DO. DO. (MINOR) (1ST RESPONDENT IS THE MOTHER AND GUARDIAN OF MINOR 2ND RESPONDENT)

3. CHERIYAN KALLELIVILAYIL VEEDU, THAMALLACKAL MURI, KUMARAPURAM. *(DIED)

4. THANKAMMA OF DO. DO. (DIED)

5. LELAMMA THOMAS, KUMPAN PUZHETHU VEEDU, KUTTAMPEROOR MURI, MANNAR VILLAGE.

6. MARY JAMES, KALLELI VILAYIL, THAMALLACKAL VADAKKUM MURI, KUMARAPURAM VILLAGE.

7. K.C. JOSEPH, KALLELI VILAYIL, THAMALLACKAL VADAKKUM MURI, KUMARAPURAM VILLAGE.

8. LALU JOHNY, KALLELI VILAYIL, THAMALLACKAL VADAKKUM MURI, KUMARAPURAM VILLAGE.

9. K.C. JOSE, KALLELI VILAYIL, THAMALLACKAL VADAKKUM MURI, KUMARAPURAM VILLAGE.

* IT IS RECORDED THAT THE 3RD RESPONDENT DIED AND HIS LEGAL HEIRS ARE ALREADY IN THE PARTY ARRAY AS PER ORDER DATED 17.6.2000 IN STATEMENT C.F.5456/99 DATED 7.4.99. R,R5-9

BY ADV. SRI.P.K.GEORGE R,R1,2 BY ADV. DR.VINCENT PANIKULANGARA

THIS APPEAL SUITS HAVING COME UP FOR ADMISSION ON 21-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 

THOTTATHIL B. RADHAKRISHNAN & B. KEMAL PASHA, JJ.

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A.S. No.144 of 1999

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Dated this the 21st day of March, 2013

Head Note:-

Travancore Christian Succession Act, 1092 - On and after the coming into force of Part B State Laws Act, 1951, the provisions in the Travancore Christian Succession Act, 1092 do not continue to operate. Therefore, there is no provision enabling the bride or the groom taking to their matrimonial home, what could be called as "Sreedhana" in terms of the Travancore Christian Succession Act.

J U D G M E N T

Thottathil B. Radhakrishnan, J.

This appeal is by the first defendant. He married the first plaintiff on 23.6.1984. The second plaintiff was born to them. The first plaintiff was in Uttar Pradesh and the first defendant in Bangalore, for more than two years, virtually separated, before Ext.B1 order of judicial separation was issued by the Family Court, Bangalore on 12.1.1989, at the instance of the first defendant in proceedings which the first plaintiff did not contest. On 12.7.1989, the first defendant executed Ext.A3 sale deed purporting to transfer his share in the immovable property covered by Ext.A2 to his mother, the third defendant. Thereupon, the plaintiffs sued first defendant and his parents on different counts. They claimed maintenance and also that plaint schedule item No.1 belongs exclusively to the first plaintiff, whose funds were utilized for that purchase in the name of the first plaintiff and the first defendant.

2. The court below decreed the suit in part granting maintenance and setting aside Ext.A3 and granting recovery of plaint schedule item No.1 covered by that document.

3. At the hearing of this appeal, the plea and arguments on behalf of the appellant were confined to the question as to the correctness of the impugned decree and judgment in so far as it related to the setting aside of Ext.A3. No other points argued.

4. The learned counsel for the appellant argued that the evidence in the case categorically show that the claim of the plaintiffs that money was entrusted to the first defendant is unfounded. Similarly, the transfer made by the mother of the first defendant to him and the first plaintiff was not supported by any consideration from the hands of the first plaintiff, it was argued. The learned counsel further argued that the court below has acted illegally in the matter of appreciating the evidence on record.

5. It was argued on behalf of the respondents that the court below had before it materials that unequivocally showed that funds belonging to the first defendant were utilised for the purpose of the purchase of the property from the second defendant, who is none other than the mother of the first defendant. He also argued that it is totally improbable that the second defendant, the first plaintiff's mother-in-law, would have transferred property, also in the name of the daughter-in-law of the first plaintiff; yet to continue to reside in the building covered by the sale deed; unless the intention was only to assure the first plaintiff that the money that came from her or from her parents was being utilized and retained for her benefit. He argued that there is no merit in the appeal.

6. The fact of the matter remains that after the marriage on 23.6.1984, the third defendant, the mother of the first defendant executed Ext.A2 sale deed on 11.10.1985, whereby she conveyed eight cents and a building stated to be with a couple of rooms, jointly in the names of first plaintiff and the first defendant. The consideration shown in that document is Rs.2,000/-. The first plaintiff's father Thomas is one of the witnesses to that document. While the plaintiffs sued only after the Ext.A3 sale by first defendant to his mother, the third defendant, obviously, it has to be stated that the first defendant has to be treated to have held and meddled with the property covered by Ext.A2, including the rights of the first plaintiff and of the first defendant, if any, in trust, on behalf of that couple linked in marriage. Now, while the court below has found that first plaintiff has proved having parted with an amount of Rs.10,000/- in connection with Ext.A2 sale deed, the document reflects only Rs.2,000/- as consideration and the first defendant stands to admit even in his pleadings that he has taken Rs.5,000/- towards marriage expenses from the parents of the first plaintiff even prior to the marriage. If that were so, the provisions of the Dowry Prohibition Act, 1961 stare at the appellant. Not only that, on and after the coming into force of Part B State Laws Act, 1951, the provisions in the Travancore Christian Succession Act, 1092 do not continue to operate as noticed by the Hon'be Supreme Court in Mary Roy v. State of Kerala(1986 KLT 508). Therefore, there is no provision enabling the bride or the groom taking to their matrimonial home, what could be called as "Sreedhana" in terms of the Travancore Christian Succession Act. With this, we also see that while making Ext.A2 transfer, the third defendant had categorically stated that what she holds is title, possession and residence and upon transfer, those rights are being delivered to the first plaintiff and the first defendant exclusively. But, the fact of the matter remains that the first defendant and the third defendant; going by their pleadings, and the materials on record, including the addresses on which they were served with summons of the suit; continue to reside at Kallelivilayil Veedu which is the building involved in Ext.A2. Under such circumstances, due regard being had to the pleadings and evidence, we see that the preponderance of probabilities emanating out of the totality of the aforesaid facts and circumstances of the case, points only to the legitimate and reasonable inference that the execution of Ext.A2 was evidently to evidence the receipt of funds from the first plaintiff's home and that is why her father was also made a witness to that document. We do not see any other way to assimilate the true nature of Ext.A2. If that were so, it has to be held that the first defendant held that property only as a trustee on behalf of the first plaintiff. Hence, we do not see any ground to interfere with the impugned judgment and decree. In the result, this appeal is dismissed. However, the parties are directed to suffer their respective costs.

Sd/- THOTTATHIL B. RADHAKRISHNAN, JUDGE

Sd/- B. KEMAL PASHA, JUDGE

ul/-

(2013) 298 KLR 843

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT:

THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN

&

THE HONOURABLE MR. JUSTICE B.KEMAL PASHA

TUESDAY, THE 19TH DAY OF MARCH 2013/28TH PHALGUNA 1934

AS.No. 407 of 1997 (G)

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AGAINST THE ORDER/JUDGMENT IN OS.111/1990 of SUB COURT, CHERTHALA DATED 18-03-1996

APPELLANT(S)/PLAINTIFF:

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E.V. JOSEPH, RESIDING AT EDACHIRANIKARTHIL,

THYKKATTUSSERI VILLAGE, DO PANCHAYAT WARD NO.2.

BY ADVS.SRI.V.N.SWAMINATHAN

SRI.S.DILEEP

RESPONDENT(S)/DEFENDANTS:

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1. KERALA STATE ELECTRICITY BOARD, REPRSENTED BY

ITS SECRETARY, VYDIUTHI BHAVAN, THIRUVANANTHAPURAM.

2. ASST. EXECUTIVE ENGINEER, ELECTRICAL MAJOR SECTION,

POOCHAKKAL.

R, BY ADV. SRI.G.JANARDHANA KURUP (SC FOR KSEB)

R, BY ADV. SRI.A.SUDHI VASUDEVAN, SC, KSEB

THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 12-2-13, THE COURT ON 19-03-2013, DELIVERED THE FOLLOWING:

[C.R.]

THOTTATHIL B. RADHAKRISHNAN &

B. KEMAL PASHA, JJ.

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A.S. No.407 of 1997

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Dated this the 19th day of March, 2013

Head Note:-

Torts – Damages - Strict Liability - Principles of - Injuries sustained by getting electric shock - Even when no negligence is attributed to the defendant in this case, the defendant is liable for damages, based on the principles of strict liability.

J U D G M E N T

Kemal Pasha, J.

The appellant claimed an amount of Rs.3,25,000/- as damages through O.S.111 of 1990 of the Subordinate Judge's court, Cherthala, consequent to the injuries sustained to him on getting electric shock. The Court below has decreed the suit, for an amount of Rs.35,000/- only as compensation to be realized from the respondents/defendants. Dissatisfied with the impugned decree and judgment, the plaintiff has come up in appeal.

2. The case of the appellant is that, an old electric post of the Thycattussery section of the Kerala State Electricity Board (K.S.E.B.) became in a leaning position thereby the electric wire connected with it became swinging and was about to touch the soil surface. On 20.2.1990, the appellant who is a carpenter by profession while going for his works at 8.45 a.m, got electric shock on his left thigh from the swinging electric wire thereby the flesh on his left thigh became seriously burnt and damaged. The condition of the appellant was very serious and at first he was taken to the Government Hospital, Thycattussery from where he was referred to the Taluk Headquarters Hospital, Cherthala, where he had undergone treatment as inpatient for the period up to 18.4.1990. He was subjected to a major surgery and skin grafting. The flesh on his left thigh which became damaged had to be removed, which has ultimately resulted in his becoming partially and permanently disabled.

3. The respondents contended that it was not due to the swinging state of the electric wire the accident had occurred; and that the electric line was in proper condition. According to the respondents, a coconut leaf fell on the single phase service line at 6.45 a.m. on 20.2.1990, thereby the electric wire snapped and the live wire was hanging from the cross arm of the electric post. At about 8.45 a.m. a girl named Kunjumol while going for fetching water came into contact with the live wire and got electric shock. On hearing her cries, the appellant rushed to the spot and tried to detach Kunjumol from the electric line without sufficient protection and thereby he also got electric shock. It was also contended that the amount claimed by the appellant is exorbitant.

4. On the side of the appellant, PWs.1 to 5 were examined before the court below and Ext.A1 was marked. The respondents have not adduced any evidence. The court below has rightly found that the respondents are liable to compensate the appellant. The case of the appellant is that he came into contact with the swinging electric line which was lying just above the ground at the pathway while he was going for his works and thereby he sustained electric shock. The contention of the respondents is that one Kunjumol got electric shock from the electric wire hanging from the arm of the electric post, as it snapped due to the falling of a coconut cadjan, and on hearing her cries the appellant rushed to the spot and tried to detach the said Kunjumol from the live electric wire and thereby the appellant also got electric shock. In either case, it does not make any difference at all regarding the liability of the respondents to compensate the appellant.

5. The principle of strict liability was laid down in the celebrated case of Rylands v. Fletcher (1868) L.R.3H.L.330 that, "if a person brings or accumulates on his land anything which, if it should escape, may cause damage to his neighbours, he does so at his peril. If it does escape and cause damage, he is responsible, however careful he may have been, and whatever precautions he may have taken to prevent damage". Rylands v. Fletcher certainly involves a liability without proof of fault (subject to certain exceptions, most of which, are not recognized or accepted by our jurisprudence through precedents) for personal injuries or loss of life on account of the hazardous business of the defendant.

6. The rule in Rylands v. Fletcher, has resulted in the creation of a category of liability, for damage caused by ultra- hazardous business or activities, which is justified on the basis that the persons carrying them on should bear all the risks associated with them, and not merely those arising from their negligence. In Shiffman v. Order of St. John [(1936) 1 All.E.R. 557], where the plaintiff became injured in Hyde park by a falling flag-pole belonging to the defendants, it was held that the plaintiff would have been entitled to recover damages on the basis of Rylands v. Fletcher even though he neither owned nor occupied the land on which the injury occurred.

7. The rule of strict liability born in Rylands v. Fletcher has been applied in our country by almost all the Civil Courts, High Courts and the Apex Court. In M.P.Electricity Board v. Shail Kumari [2002 (1) KLT 480(SC)] it was held;

"It is an admitted fact that the responsibility to supply electric energy in the particular locality was statutorily conferred on the board. If the energy so transmitted causes injury or death of a human being, who gets unknowingly trapped into it, the primary liability to compensate the sufferer is that of the supplier of the electric energy. So long as the voltage of electricity transmitted through the wires is potentially of dangerous dimension, the managers of its supply have the added duty to take all safety measures to prevent escape of such energy." It was further held; "Even assuming that all such measures have been adopted, a person undertaking an activity involving hazardous or risky exposure to human life, is liable under law of torts to compensate for the injury suffered by any other person, irrespective of any negligence or carelessness on the part of the managers of such undertakings. The basis of such liability is the foreseeable risk inherent in the very nature of such activity. The liability cast on such person is known, in law, as "strict liability". It differs from the liability which arises on account of the negligence or fault in this way ie., the concept of negligence comprehends that the foreseeable harm could be avoided by taking reasonable precautions. If the defendant did all that which could be done for avoiding the harm, he cannot be held liable when the action is based on any negligence attributed. But such consideration is not relevant in cases of strict liability where the defendant is held liable irrespective of whether he could have avoided the particular harm by taking precautions."

8. The Rule in Rylands v. Fletcher was followed with approval by the Apex court in Charan Lal Sahu v. Union of India (1990(1) SCC 613), Gujarath State Road Transport Corporation v. Ramanbhai Prabhatbhai (1987 (3) SCC 234), Kaushnuma Begum v. New India Assurance Co. Ltd. 2001 (2) SCC 9 and M.C.Mehta v. Union of India (1987(1) SCC 395).

9. In M.C.Mehta v. Union of India, the apex court has gone even beyond the rule of strict liability by holding that;

"Where an enterprise is engaged in a hazardous or inherently dangerous activity and harm is caused on any one on account of the accident in the operation of such activity, the enterprise is strictly and absolutely liable to compensate those who are affected by the accident; such liability is not subject to any of the exceptions to the principle of strict liability under the rule in Rylands v. Fletcher."

10. In Kunjan Raghavan v. Kerala State Electricity Board (2010 (4) KLT 914), a Division Bench of this court in which one of us, Thottathil B. Radhakrishnan, J, was a member, while speaking for the Bench held;

"The question is whether the electric line was maintained with statutory clearance as required in terms of the relevant laws. The Board is the authority to have the best evidence. There is no evidence in this regard by the Board. This is a case of no evidence in defence. Not only that, the Board is a licensee dealing with electrical energy, which is hazardous. Board is the sole licensee having monopoly operation with the support of statutory provisions. Statutory rights are coupled with statutory duties. The duties and responsibilities of licensees stand to charge the Board and its officers of such liabilities as would fall within the principle of strict liability as laid down by the Apex Court in H.S.E.B. v. Ram Nath (2004 (5) SCC 793) and M.P. Electricity Board v. Shail Kumar [(2002) 2 SCC 162]"

11. Even when no negligence is attributed to the defendant in this case, the defendant is liable for damages, based on the principles of strict liability. Now, what remains is the calculation of the quantum of damages. We are satisfied that the quantum arrived at by the court below as compensation to be paid to the appellant, is too meager and it does not reflect the actuals.

12. The appellant was aged 28 at the time of the incident. The fact that the appellant is a carpenter is not in dispute. According to him, he had works everyday and he used to earn an amount of `50 per day over and above his personal expenses during the period of incident. PW2 who was working as the Civil Surgeon at the Taluk Headquarters Hospital, Cherthala has issued Ext.A1 certificate showing the disability of 15% to the appellant. When PW2 was examined, the appellant has challenged the percentage of disability assessed by PW2 as too low, by pointing out that the disability sustained by him will be up to 50%. PW2 has denied the said suggestion and finally agreed that, the total disability at the most can be 20% according to the scale, and not more than that. The appellant was under the treatment of PW2 at the hospital. It has come out that the flesh and muscles from his left thigh was removed and skin grafting had to be done. PW1, Doctor attached to the Thycattussery Government Hospital as on the date of incident has given evidence to the effect that the appellant who was brought on getting electric shock was immediately referred to Government Hospital, Cherthala, as the condition of the appellant was serious.

13. According to appellant who was examined as PW4, he had undergone treatment as inpatient at the hospital for the period from 20.2.1990 to 18.4.1990. Even after the said treatment, he had to continue treatment as outpatient for six to seven months during which period, he could not go for any work. According to him, he used to earn an amount of `50/- per day over and above his personal expenses. It is a fact that a carpenter has to squat for doing his works. According to the appellant, due to the disability sustained to him on account of the incident, he cannot work properly as he was suffering from excruciating pain when he squats.

14. On an evaluation of the evidence adduced by the appellant, the partial and permanent disability which he has sustained, can be considered as 25%. The multiplier can be taken as 18. His monthly earnings can be taken as `1,250/- and therefore, the annual income can be calculated as `15,000/-. By way of compensation towards partial and permanent disability, the appellant is entitled to an amount of `67,500/-. Over and above the same, he is entitled to loss of earnings for five months which amounts to `6,250/-. There was prolonged treatment, and the appellant had to suffer much. An amount of `10,000/- could be a reasonable compensation in this case, for pain and sufferings. An amount of `7,500/- will have to be granted as expenses for treatment. Therefore, the appellant is entitled to realise a total amount of `91,250/- by way of compensation from the respondents. The impugned judgment and decree passed by the court below are liable to be modified to that effect.

In the result, this appeal is allowed as follows:

(i)The impugned judgment and decree are modified.

(ii)The appellant-plaintiff is granted a decree for recovery of `91,250/- with interest at 6% per annum from the date of institution of the suit till payment/recovery, with costs of this appeal and of the suit, charged on, and recoverable from, the assets of the respondents-defendants. It is further decreed that if the liability in terms of the aforesaid is not satisfied by depositing the entire amounts within a period of two months from now, the rate of interest awarded by this decree will stand modified at 12% per annum from the date of institution of the suit till the date of payment/recovery.

(iii) In exercise of the power under Order 33 Rule 10 r/w O.44 R. 1, it is ordered that the court fee payable by the plaintiff in this appeal, and in the suit from which this appeal arises, shall be recoverable from the respondent/defendant.

THOTTATHIL B. RADHAKRISHNAN

JUDGE

B. KEMAL PASHA, JUDGE ul/-

[True copy]

P.S. to Judge. 

(2011) 188 KLR 745

IN THE HIGH COURT OF KERALA AT ERNAKULAM 

The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN 

The Hon'ble MR. Justice S.S.SATHEESACHANDRAN 

Dated this the 21st day of January, 2011 

AS.No. 383 of 1997(E) 

1. UNNIKRISHNAN ... Petitioner 

Vs 

1. KUNHIBEEVI ... Respondent 

Head Note:-

Civil Procedure Code, 1908 - Order 21, Rules 97 and 99 - A suit, even by a third party, impeaching a court sale is not maintainable and he has to take recourse to either Rule 97 of Order XXI, if it was before dispossession, or Rule 99 of Order XXI, if he had already been dispossessed and delivery effected after the court sale. 

Civil Procedure Code, 1908 - Order 21, Rules 97 to 103 - Adjudication of all disputes over the right, title and interest of any person over the property covered by the decree - Once the execution has commenced the execution court alone can consider such disputes and it cannot be agitated by a separate suit. 

Civil Procedure Code, 1908 - Order 21, Rules 97 to 103 - Even if a suit is entertained challenging a decree for possession of property before commencement of the execution proceedings of such decree, if the execution of that decree has culminated in a court sale of the property or the Plaintiff in that suit has already been dispossessed, the claim raised over the property has to be adjudicated only by the execution court and not by any other court.

For Petitioner :SRI.M.P.SREEKRISHNAN 

For Respondent :SRI.N.SUBRAMANIAM 

J U D G M E N T 

S.S.SATHEESACHANDRAN, J. 

The appellants are defendants 5, 7, 8 and some among the legal representatives of the 6th defendant, in O.S.No.229/93 on the file of the Principal Sub Court, Kochi. Respondents 1 to 8 are the legal representatives of the plaintiff viz., P.K.Aboo. 9th respondent is the 1st defendant in the above suit and respondents 10 to 12 are defendants 2 to 4 in the suit. Respondents 10 and 12 passed away during the pendency of the appeal and their legal representatives have been impleaded as respondents 19 to 23 and 24 to 27 respectively. Respondents 13 to 18 are the other legal representatives of the 6th respondent in the suit. 

2. The appeal is directed against the decree granted by the court below setting aside the court sale in O.S.No.67/81 of the Principal Sub Court, Kochi, and directing re-delivery of some of the properties covered by that sale, four items described as B schedule in the present suit. 

3. Short facts involved in the case necessary for disposal of the appeal can be summed up thus: The 1st defendant, a statutory bank, instituted O.S.No.67/81 against defendants 2 to 4 for recovery of the loan advanced to the 2nd defendant on the basis of mortgage of the properties of defendants 3 and 4, by sale of the properties. 12 items were included in the above suit as the mortgaged properties. Items 1 to 4 in O.S.No.67/81 are the B schedule properties in the present suit, O.S.No.229/93. Plaint A schedule properties in the suit are items 5 to 12 in O.S.No.67/81. Before institution of the above suit by the bank but long after the mortgage over item Nos.1 to 12 in its favour, another creditor of the 2nd defendant, M/s.Mettur Beard Sell Limited had instituted a suit, O.S.No.102/76 against the 2nd defendant. In the decree passed in that suit, B schedule properties in the present suit (items 1 to 4 in O.S.No.67/81) were brought to sale, and the present plaintiff, Sri.P.K.Aboo as the highest bidder in the auction purchased them. Those properties were later delivered over to him through court. Meanwhile, the suit, O.S.No.67/81 filed by the 1st defendant bank on 15.4.1981 was decreed. When the decree holder/1st defendant bank in the present suit moved for execution of the decree by sale of the mortgaged properties, the plaintiff had resisted the sale over B schedule, (items 1 to 4 in O.S.No.67/81). His challenges being negatived, the sale proceeded in which 'B' schedule properties were purchased by defendants 5 to 8. Though the plaintiff had challenged the delivery of B schedule properties to defendants 5 to 8, on various grounds, such attempts were unsuccessful. The plaintiff thereafter filed the present suit O.S.No.229/93 for a declaration that the court sale of the properties in O.S.No67/81 is illegal and vitiated by fraud and irregularity in the publishing and conducting of the sale, and, thus, liable to be set aside, and for a permanent prohibitory injunction to restrain the defendants from alienating or creating any charge over B schedule properties. A decree for re-delivery of B schedule was also sought for. 

4. Among the defendants, the 1st defendant bank, 4th defendant, 5th defendant, and defendants 6 to 8 together, and 7th defendant separately, filed written statements, among whom, the 4th defendant supported the case of the plaintiff that the court sale is vitiated by fraud, and others resisted the claims canvassed raising manifold contentions in which the maintainability of the suit was also challenged in view of the orders passed by the execution court in O.S.No.67/81. The present suit is barred by res judicata was one among the contentions raised by the 1st defendant. Sale over B schedule items on the basis of the decree in O.S.No.102/76 by which the plaintiff claimed right over those properties as the auction purchaser, who had obtained delivery of such properties in such sale, was also impeached by the 1st defendant contending that B schedule properties were subject to the mortgage created in favour of the bank much earlier, and the suit [O.S.No.67/81] by the bank having been filed earlier to the sale held under the decree passed in O.S.No.102/76, such sale is hit by lis pendens. Defendants 5, 7, 6 and 8 in their written statements contended that the sale conducted in O.S.No.67/81 was proper, legal and valid and on no ground it was liable to be declared as null and void. They also contended that such sale could not be impeached in a separate suit at the instance of the plaintiff. 

5. On the pleadings of the parties as above, the court below raised mainly the following issues: Whether the court sale impeached is vitiated by material irregularity and fraud in publishing and conducting of such sale and as to whether the plaintiff is entitled to the declaration and injunction sought for. On the issues so settled, both sides let in evidence, plaintiff examining Pws.1 to 6 and exhibiting Exts.A1 to A33, and the defendants one witness, DW.1 and towards documentary evidence Exts.B1 to B8. After having considered the pleadings with reference to the evidence let in by the parties and hearing the counsel on both sides, the court below arriving at the conclusion that the court sale impeached is vitiated by material irregularity and fraud, in publishing and conducting it, decreed the suit. The plaintiff was granted the declaration sought for setting aside the sale, and also re-delivery of the property by restitution under Section 144 of the Code of Civil Procedure, from defendants 5 to 8. The defendants 5, 7 and 8 with some of the legal representatives of the 6th defendant, all of them together, have preferred the present appeal challenging the legality and correctness of the judgment rendered by the court below setting aside the court sale in execution of the decree passed in O.S.No.67/81. 

6. We heard the learned Senior Counsel Sri.M.C.Sen for the appellants, Advocate Sri.N.Subramanian for respondents 1 to 8 and Advocate Sri.Joseph Thayankeril for the 9th respondent. Both sides have argued extensively on various aspects touching upon the conducting and publishing of the sale in execution of the decree in O.S.No.67/81, which has been impeached in the suit as vitiated by fraud, material irregularity and illegality and thus null and void. After hearing the counsel at length and taking note of the controversies involved in the suit on which the parties have joined issues, we found that the first and foremost question to be considered relate to the entertainability of the suit challenging a court sale by a civil court de hors the provisions covered by Order XXI of the above Code. Counsel on both sides, on our bidding, have presented various facets involved in examining the maintainability of the suit challenging a court sale placing reliance on judicial authorities in support of the rival case presented.

7. A recapitulation of the admitted facts, as borne out by the pleadings and materials placed, has to be stated as to why the primary question to be considered in the appeal rests on the maintainability of the suit. A mortgage in favour of the first defendant bank in respect of the plaint properties A and B schedules subsisted when O.S.No.102/76 was instituted against the present 2nd defendant by M/s.Mettur Beard Sell Limited. Even before a decree was passed in the above suit, the above bank had filed a suit O.S.No.67/81 on 15.4.1981 for recovery of the money under the loan advanced to the 2nd defendant by sale of the mortgaged properties furnished as collateral security by defendants 3 and 4. A decree was passed in O.S.No.102/76 earlier in point of time, and B schedule properties in the present suit [4 items] brought to sale on 6.1.1982 in execution of that decree were purchased in the auction by the present plaintiff P.K.Aboo. That sale was confirmed on 10.3.1982. Those properties were delivered over to the plaintiff on 16.3.1985 and 2.4.1985. Suit filed by the bank O.S.No.67/81 was decreed on 8.1.1983 and in execution of that decree, at various stages, the plaintiff P.K.Aboo had resisted the steps for sale proceeded against the B schedule property for realisation of the decree debt. Plaintiff had filed an application E.A.No.141/86 in the execution proceedings of O.S.No.67/81 (E.P.79/84) seeking deletion of B schedule items which was sold and delivered over to him in execution of the decree in O.S.No.102/76. The execution court had dismissed that application but with a reservation that the obstructer/plaintiff will be entitled to the benefit under Section 61 of the Transfer of Property Act. Admittedly both the bank and also the plaintiff challenged the orders of the execution court in E.A.No.141/86 before this court by filing C.R.P.No.1480/87 and 295/88 respectively. Both revisions were dismissed by order dated 11.8.1989. After proclamation for sale of all the items were settled, the plaintiff moved another application as E.A.No.537/87 challenging the steps for sale of B schedule items and that was dismissed by the execution court. That was challenged in revision before this court by the present plaintiff. This court, confirming the order of the execution court directed it to proceed against B schedule property if only sale of A schedule properties was found insufficient to satisfy the decree debt due to the bank. Since the sale conducted over A schedule property was found to be insufficient, B schedule properties were also put to sale and those items were purchased by defendants 5 to 8 in such sale. Plaintiff, admittedly, filed an application under Order XXI Rule 89 of the Code of Civil Procedure after such sale. But since the application was not filed tendering the amount covered by the sale with the commission thereof, it was dismissed. Pursuant thereto, the sale being confirmed and sale certificate issued, the auction purchasers [defendants 5 to 8] applied for delivery of the properties. The delivery over B schedule was obstructed to by the plaintiff by filing several petitions, one after the other. Though no documentary materials tendered, at the hearing of appeal, the events that followed after issue of warrant for delivery were also referred to. The Amin deputed by the court had filed a report that delivery of B schedule was effected in execution of the warrant. Contending that there was no divesting of possession and physical possession was retained by him, the plaintiff moved an application before the execution court for annulling the report of the Amin. That application was dismissed, and against which a revision was filed before this court. The revision was disposed of upholding the finding of the execution court that the properties had been delivered over to the auction purchaser, but, reserving the right, if any, of the plaintiff to work out his remedies by way of appropriate proceedings. 

8. The short question posed for consideration in the given facts of the case, is whether the plaintiff has to approach the execution court which passed the decree in O.S.No.67/81 in favour of the first defendant bank to impeach the court sale in execution of that decree and re- delivery of the property ordered thereon in favour of the auction purchasers, who had purchased B schedule in the auction, or, is the plaintiff empowered to file a separate suit to impeach such court sale and delivery on any ground whatsoever for a declaration that the court sale is void and for re-delivery of the property. 

9. The learned counsel for the plaintiff Sri.Subramaniam relied on a number of authorities to contend that the suit is perfectly maintainable as he being a third party to the proceeding in O.S.No.67/81 he cannot be compelled to approach the execution court in which the decree passed in the above suit had been executed, moving an application under Order XXI Rule 99 of the Code. The decree passed in the above suit was not binding on the plaintiff as he was not a party to that suit and so, his right to impeach the court sale and the delivery in execution of the decree passed in that suit by way of a separate suit is a civil right, which is, in no way, interdicted by the procedure covered by Order XXI Rule 99 of the Code, is the submission of the learned counsel. Reliance is placed on by the counsel on Pavan Kumar v. K.Gopikrishnan {AIR 1998 AP 247} to submit that the remedy under Order XXI Rule 99 of the Code, is one among the remedies available to the person who was dispossessed in execution of a decree. The above rule cannot be interpreted or construed as placing a bar on instituting a fresh suit for possession, the view expressed in the aforesaid decision is relied by the counsel to contend that the present suit is maintainable. Canvassing support from Abdul Rashid Dar v. Mohamed Ismail {AIR 1989 J & K 48}, to contend that a third party, who has been dispossessed in execution of a decree "may make an application complaining of dispossession and in that event the court has to make an enquiry and if it finds merit in his claim, it has to restore its possession", the learned counsel submitted that the above rule, is only an enabling provision and it does not place any impediment to the civil right of a third party to file a civil suit to protect his possession over an immovable property, which is proceeded against in execution of a decree, wherein he is not a party, and thus not binding on him. Placing reliance on M/s.Paramount Industries v. C.M.Malliga {ILR 91 Karnataka 254}, it is argued by the counsel that it is open to the person, who is in possession of an immovable property, who is not a party to the decree passed in respect of that property, to resist the execution thereof and establish his right, title and interest either by filing an application under Order XXI Rule 99 of the Code, after dispossession in execution, or to file a suit for declaration of his title and seek permanent injunction to resist the decree from dispossessing him from the property. He can sue for possession on the basis of his title, according to the counsel, if he fails to resist the execution or does not get an opportunity to resist execution, canvassing support from the aforesaid decision. Inviting attention to Tanzeem-e-Sufia v. Bibi Haliman {AIR 2002 SC 3083}, it is contended that the procedures provided for by Order XXI Rule 97 and 99 of the Code empowering the execution court to determine the obstruction to the decree in execution before delivery of possession or after such delivery do not impeach the right of a third party in possession to file a suit to protect his right and interest or possession over that property. Inviting attention to the observations of this court in Baburaj v. Vasanthi Devi {2008(4) KLT 761}, it is contended that the Apex Court in Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal {AIR 1997 SC 856}, has only disallowed the right of strangers to the decree to make resistance or obstruction at the pre-delivery stage, and the aforesaid decision of the Apex Court does not foreclose the right of a stranger to a decree to file a fresh suit, according to the counsel. Reliance is also placed on A.M.Subbamma v. A.V.Kushalappa {2006 AIHC 2682 Karnataka High Court) by the learned counsel for the plaintiff to contend that when a suit is filed in respect of the property covered by the execution the plaintiff in such suit cannot maintain an application under Order XXI Rule 97 of the Code, as he has to adjudicate the merit of his claim in the suit, substantiating the relief canvassed therein. 

10. The decisions referred to and relied by the learned counsel for the plaintiff other than Tanzeem-e- Sufia's case {AIR 2002 SC 3083} and Baburaj's case {2008(4) KLT 761} both cited supra, which shall be adverted to later, dealt with the right of a third party to a decree to establish his right over an immovable property otherwise than by recourse to the provisions of Order XXI of the Code, without taking note of the impact of the amendment to Rules 97 to 103 of Order XXI of the Code brought in 1976 under Act 104 of 1976 or the interpretation placed over such amendment by the Apex Court that even a third party has to move an application before the court in which the decree is executed to resist or obstruct its execution and his dispossession, and he can do so even before delivery is ordered or after dispossessed from the property, and that he cannot maintain a separate suit to establish his right, interest and title over the property, if it is so covered by the decree put in execution. In Noorduddin v. Dr.K.L.Anand {1995(1) SCC 242}, the Apex Court, after considering the scope and ambit of the amendment to the Code in respect of Order XXI Rules 97 to 104 under Act 104 of 1976, pointing out that the right to file a suit under Order XXI Rule 103 of the 1908 Code which was available earlier had been taken away under the above amendment has laid down in unmistakable terms that any person who claims any right, title or interest, whether or not he is a party to the decree, by virtue of the amendment to the above Rules under Order XXI of the Code has to pursue his remedies only under the relevant rule applicable under Order XXI for adjudication of his right, title and interest in the immovable property in execution and any decision thereof, which is deemed to be a decree, subject to the further challenge as provided by the Code, has to be treated as final and conclusive. The Apex Court in the above decision has held thus: 

"Thus the scheme of the Code clearly adumbrates that when an application has been made under Order 21, Rule 97, the court is enjoined to adjudicate upon the right, title and interest claimed in the property arising between the parties to a proceeding or between the decree holder and the person claiming independent right, title or interest in the immovable property and an order in that behalf be made. The determination shall be conclusive between the parties as if it was a decree subject to right of appeal and not a matter to be agitated by a separate suit. In other words, no other proceedings were allowed to be taken. It has to be remembered that preceding Code of Civil Procedure Amendment Act, 1976, right of suit under Order 21, Rule 103 of 1908 Code was available which has been now taken away. By necessary implication, the legislature relegated the parties to an adjudication of right, title or interest in the immovable property under execution and finality has been accorded to it. Thus, the scheme of the Code appears to be to put an end to the protraction of the execution and to shorten the litigation between the parties or persons claiming right, title and interest in the immovable property in execution." 

11. Highlighting that the right to adjudication of a dispute whether it be in respect of right, title and interest of a party in an immovable property which, no doubt, is a substantive right, the Apex Court has held that it is only a procedural right to which no one has a vested right. Whatever be the substantive right of a party, the right to an adjudication of a dispute thereto is regulated by the procedure laid down by the legislature. The object of the law is primarily to meet out justice. The rules of procedure have been devised to decide the disputes to render substantive or at best substantial justice. By virtue of the amendment in 1976 to the Code the right to adjudication of the dispute in respect of a claim to right, title or interest of any person, after the passing of a decree with respect to that property, has to be decided by the court called upon to execute that decree in accordance with the procedure laid down under Order XXI Rules 97 to 103 of the Code, as may be applicable. If a third party to the decree on the plea that he being not a party to such decree can file a fresh suit to vindicate his right, title or interest claimed over the property overlooking and negating the procedure covered by the above rules under Order XXI, then, naturally, it would undermine the faith of the public in the efficacy of the law and administration of justice by the court and further the litigation can be continued with no end in sight. The Apex Court in the above decision, emphasizing that the right to adjudication of a dispute over the claim of any person as to his right, title or interest in an immovable property is only a procedural right to which no one can claim a vested right, has stated thus; 

"The faith of the plea in the efficacy of law is the saviour and succour for the sustenance of the rule of law. Any weakening like in the judicial process would rip apart the edifice of justice and create a feeling of disillusionment in the minds of the people of the very law and courts. The rules of procedure have been devised as a channel or a means to render substantive or at best substantial justice which is the highest interest of man and almameter (sic) for the mankind. It is a foundation for orderly human relations. Equally the judicial process should never become an instrument of oppression or abuse or a means in the process of the court to subvert justice. The court has, therefore, to wisely evolve its process to aid expeditious adjudication and would preserve the possession of the property in the interregnum based on factual situation. Adjudication under Order 21, Rules 98, 100 and 101 and its successive rules is sine qua non to a finality of the adjudication of the right, title or interest in the immovable property under execution." 

12. We find that even before Nooruddin's case (cited supra) the Apex Court has pointed out that the words 'any person' covered by Order XXI Rule 97 of the Code includes persons other than the judgment debtor or those who claim derivative title from the judgment debtor. Even where a person sets up his own right, title or interest de hors the judgment debtor and he resists the execution of the decree, it has been held in Bhanwar Lal v. Satyanarayain {1995(1) SCC 6}, the execution court, by virtue of the amendment in Order XXI Rule 97 of the Code, has been empowered to conduct an enquiry whether the obstruction by that person in obtaining possession over the immovable property was legal or not. True, in that decision, the impact and scope of the amendment in 1976 to the Rules covered by Order XXI Rules 97 to 103 of Order XXI has not been dealt with, which, we find, was considered in the latter decision in Nooruddin's case, discussed above. The Apex Court in Babulal v. Raj Kumar {AIR 1996 SC 2050}, relying on Bhanwar Lal 's case {1995(1) SCC 6] has held that an obstruction, even before dispossession, put forth by a party moving an application claiming a right, title or interest in a property covered by the decree in execution has to be adjudicated, conducting an enquiry as enjoined under Order XXI Rule 98 and a finding is required to be recorded in that regard by the execution court. So, the controversy which prevailed as to whether an anterior obstruction by any person whether he be a party and not bound by the decree in execution, before dispossession could be entertained by the execution court and whether an enquiry over such claim is warranted has been settled by the Apex Court clarifying that such claim required to be enquired into and a finding recorded and that the order thereof would squarely fall as a decree as covered under Rule 103 of Order XXI and it shall be subject to an appeal. Adverting to the entertainability of a claim by any person in execution, before his dispossession by an application under Order XXI Rule 97 of the Code, the Apex Court has held thus, in the above decision. 

'The determination of the question of the right, title or interest of the objector in the immovable property under execution needs to be adjudicated under Order 21 Rule 98, which is an order and is a decree under Order 21 Rule 103 for the purpose of appeal or otherwise as if it were a decree. Thus, the procedure prescribed is a complete Code in itself.' 

(emphasis supplied) 

13. The Apex Court again in Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal {AIR 1997 SC 856} reiterating the principles laid down in Bhanwar Lal's case (cited supra) set at rest all controversies as to whether an obstructer resisting a decree for possession as being a  stranger to such decree has the right to approach the court executing that decree before his dispossession. It has been held that such stranger can agitate his grievance and claim for adjudication of his independent right, title and interest in the decretal property even prior to his dispossession. Pointing out that Order XXI Rule 97 deals with a stage which is prior to the actual execution of the decree for possession wherein the grievance of the obstructionist can be adjudicated upon before actual delivery of possession to the decree holder, and Order XXI Rule 99 contemplates with a subsequent stage where a stranger after dispossession in execution of the decree seek adjudication of his independent right, title and interestover the property delivered over, the Apex Court held that both types of enquiries are clearly contemplated by the scheme of Order XXI and "it is not as if that such a stranger to the decree can come in the picture only at the final stage after losing the possession and not before." In the above decision, what has been stated earlier in Babulal's case (cited supra), but without referring to that decision, has been emphasized expressing thus: 

"Provisions of Order XXI lay down a complete code for resolving all disputes pertaining to execution of decree for possession obtained by a decree holder and whose attempts at executing the said decree meet with rough weather." 

14. Dilating further on the ambit and scope of Rules 97 to 103 of Order XXI, which have been held as a complete Code for resolving all disputes pertaining to execution of a decree for possession, the Apex Court has held that the statutory scheme envisaged by Order XXI Rule 97 Code of Civil Procedure 

"provides a statutory remedy both to the decree holder as well as to the obstructionist to have their respective say in the matter and to get a proper adjudication before the Executing Court and it is that adjudication, which subject to the hierarchy of appeals would remain binding between the parties to such proceedings and separate suit would be barred with a view to seeing that multiplicity of proceedings and parallel proceedings are avoided and the gamut laid down by Order XXI Rules 97 to 103 would remain a complete Code and the sole remedy for the concerned parties to have their grievances once and for all, finally resolved in execution proceedings themselves." 

(emphasis supplied) 

15. In Sreenath and another v. Rajesh and others {1998(4) SCC 543} adverting to the amendments to Rules 97 to 103 of Order XXI Code of Civil Procedure, as amended by 1976 Act, it has been pointed that both under the old law and also the present law, the right of any person claiming on his own over the property covered by the decree for possession, in case he resists such decree, is to have his objection decided by the executing court itself. The amendment under the 1976 Act curtailed the right of such person by way of an independent suit as provided earlier under Order XXI Rule 103 of the Code and the decision rendered by the execution court over his objection to the decree of possession on the claim raised over his independent right the judgment debtor will be subject to the right of appeal as provided under Rule 102 of Order XXI of the Code. The impact of the amendment to Rules 97 to 103 of Order XXI of the Code under the 1976 amendment Act is stressed upon by the Apex Court in the decision, stating that all questions relating to the right, title or interest in the property arising between the parties under Order XXI Rule 97 or Rule 99 of the Code should be determined by the court executing the decree of possession and not by a separate suit. The Apex Court has observed thus: 

"By the amendment, one has not to go for a fresh suit but all matters pertaining to that property including any obstruction by a stranger are adjudicated in execution proceedings. The expression 'any person' in Rule 97(1) is used deliberately for widening the scope of power so that the executing court could adjudicate the claim made in any such application under Order XXI Rule 97 of the Code." 

16. The use of the words 'any person' in the above Rule, which emphasised includes a 'stranger' and so much so, all disputes between the decree holder and any such person are to be adjudicated by the executing court as ordained under Order XXI Rule 101 of the Code. The purport and laudable objective behind the amendment compelling any person claiming independent right, and not under the judgment debtor, over the property covered by the decree in execution, and also the decree holder when he is faced of an obstruction from any 'stranger' in getting possession, to approach the execution court for adjudication of all disputes between them, it is stated by the Apex Court, is to salvage possible hardship both to the decree holder and the other person claiming title on his own right to raise objection to the very execution proceedings, and not to be thrown out to agitate the disputes in a long-drawn-out arduous procedure of a fresh suit. 

17. In Ghasi Ram and others v. Chait Ram Saini {1998(6) SCC 200} the Apex Court was called upon to consider the applicability of Section 14 of the Limitation Act with respect to a suit filed under Order XXI Rule 103 of the Code prior to amendment, after the expiry of the period of one year provided for institution of such suit, on dismissal of the claim raised by the obstructionist to the decree for possession setting up an independent right the judgment debtor. Taking note of the facts and circumstances involved and that the plaintiff in such suit, which was instituted in 1958, was an illiterate litigant, and he was misled by the ill- advice given by his counsel, it was held that exemption of the period during which he had prosecuted a revision before the High Court against the order passed by the execution court on his application under Order XXI Rule 97 of the Code, was allowable under Section 14 of the Limitation Act in his case. In the above decision also the Apex Court has delineated the changes brought into Rules 97 to 103 under Order XXI of the Code by the Amendment Act of 1976. Previously, under Rule 103 of Order XXI, even after an order had been passed under Rule 97, it was open to file a fresh suit under Rule 103 to establish the right of the claimant for possession over the property covered by the decree, subject to institution of such suit within one year to be computed from the date of the order passed under Rule 98 of the Code. The change of position after amendment by the Amendment Act of 1976, is pointed out by the Apex Court, stating thus: 

"Now under the amended provisions, all questions, including right, title, interests in the property arising between the parties to the proceedings under rule 97, have to be adjudicated by the executing court itself and not liable to be left to be decided by way of a fresh suit." 

18. In Thanzeem-e-Sufia v. Bibi Haliman & others {2002 (7) SCC 50}, the Apex Court considered the question whether a claimant, who had filed a civil suit for declaration of her title and possession over a property which was covered by a decree for possession and pending in execution, against the decree holder, can maintain an application under Order XXI Rule 97 of the Code obstructing the execution of the decree. It was held that rejection of her application under Order XXI Rule 97 of the Code for the reason that she had instituted a separate suit by the execution court, which was confirmed by the High Court was not correct since all questions relating to right, title or interest in a property relevant to the adjudication of the application under Order XXI Rule 97 of the Code shall be dealt with in the application and not by a separate suit. In Prasanth Banerji v. Pushpa Ashoke Chandani & ors. {2002(9) SCC 554} the maintainability of the suit filed by a  person who was not a party to the decree after proceedings had been initiated against him in the execution proceedings under Order XXI Rule 97 of the Code arose for consideration. In that case, the High Court had held that the suit, which had been instituted after the initiation of the execution proceedings, is not maintainable and dismissed the second appeal, but with a reservation that the appellant can raise all his claims in the execution proceedings under Order XXI Rule 97 of the Code. Affirming the decision of the High Court, the Apex Court has held that the question involved is covered in Sreenath's case (cited supra). In Ashan Devi v. Phulwasi Devi & ors {AIR 2004 SC 511} the Apex Court has emphasized that in interpreting the provisions of Order XXI Rule 97 of the Code and other provisions in the said Order, the aims and objects for introducing amendment cannot be lost sight of. Pointing out that under the unamended provisions of the Code third parties adversely affected or dispossessed from the property involved were required to file independent suits for claiming title and possession, it is stated that the amendment was purposely made by the legislature "to enable the third parties to seek adjudication of their rights in execution proceedings themselves with a view to curtail the prolongation of the litigation and arrest delay caused in execution of decrees". 

19. We do not find any expression nor even any observation in Baburaj v. Vasanthi Devi {2008(4) KLT 761} running counter to or militating against the interpretation given by the Apex Court and the law laid down in unequivocal terms that a suit, even by a third party, impeaching a court sale is not maintainable and he has to take recourse to either Rule 97 of Order XXI, if it was before dispossession, or Rule 99 of Order XXI, if he had already been dispossessed and delivery effected after the court sale. In Brahmdeo Chaudhary's case (cited supra) which was referred to in the aforesaid Baburaj's case dealt with only the entertainability of a challenge from a stranger to the decree to make resistance or obstruction at the pre-delivery stage. The argument canvassed by the learned counsel for the plaintiff to impress upon us that the present suit is maintainable, relying on Baburaj's case has no merit. We have already pointed out that in Brahmdeo Chaudhary's case, whatever principles stated in Bhanwar Lal's case (cited supra) rendered earlier had been re- emphasized with crystal clarity that provisions under Rules 97 to 103 of Order XXI lay down a complete Code by themselves for resolving all disputes pertaining to the execution of a decree for possession pursuant to a court sale in execution of such decree. In Baburaj's case, we do note that some expressions have been made as to the correctness of the observations made in paragraphs 7, 8 and 11 of Brahmdeo Chaudhary's case, all of them pertaining to the procedure to be followed in adjudication of the applications arising under Rules 97 and 99 of Order XXI of the Code. View expressed in Baburaj's case to take exception to the principles laid down in paragraphs 7, 8 and 11 in Brahmdeo Chaudhary's case, holding that Rule 98 of Order XXI of the Code covers only cases involving restrictions or obstructions by a judgment debtor or by some other persons on behalf or by a transferee pendente lite, and that the procedure for adjudication of the applications under Rules 97 and 99 of Order XXI of the Code is under Rules 105 and 106 of that Order, is not correct. Procedure for consideration of the application under Rule 97 or 99, even where it is by the decree holder, for removal of the obstruction to delivery of possession by the judgment debtor or any person claiming under him, or by a third party, not claiming under the judgment debtor, is governed by Rules 105 and 106 of Order XXI of the Code; and, Rule 98 only lays down what is to follow after determination of the questions arising for adjudication which includes all questions relating to right, title and interest in the property under the court sale, between the parties to the proceedings. Where a third party can move an application to obstruct delivery of possession in a court sale only under Rule 97 or 99 of Order XXI, it cannot be stated that a different procedure for consideration of his claim or objection without reference to Rule 100 or 98 of the above order is provided in the Code. In fact, the procedure under Rule 105 and 106 is not confined to the adjudication of applications under Rule 97 or 99, but in the case of any other application covered by Order XXI of the Code wherein an adjudication of the substantive right of the parties is involved for determination by the court. In Rule 105 dealing with hearing of application, it has been spelt out that 'an application under any of the foregoing rules of this Order is pending' indicating that the procedure applicable thereunder is not confined to adjudication of the application under Rule 97 or 99 alone. Procedure covered by Rules 105 and 106 of Order XXI is applicable to all proceedings under the above Order and not confined to one or other rule and it applies even in a case for restoring an application dismissed for default, within the time limit permissible under law. The decision rendered by the Apex Court in Damodaran Pillai v. South Idian Bank Ltd. {2005(4) KLT 192[SC]} would give an insight that the above rules are applicable to all applications covered by the Rules under Order XXI of the Code. 

20. We are conscious and do take note that sub rules (3) to (5) in Rule 92 of Order XXI of the Code may induce and in fact persuade one to take a view that the right of a third party to challenge a court sale impeaching the title of the judgment debtor to the property by way of a suit is safeguarded despite the amendment made to Rule 103 of Order XXI under Act 104 of 1976. sub rules (3) to (5) of Rule 92 of Order XXI read thus: 

(3) No suit to set aside an order made under this rule shall be brought by any person against whom such order is made. 

(4) Where a third party challenges the judgment- debtor's title by filing a suit a suit against the auction-purchaser, the decree-holder and the judgment-debtor shall be necessary parties to the suit. 

(5) If the suit referred to in sub-rule (4) is decreed, the Court shall direct the decree- holder to refund the money to the auction- purchaser, and where such an order is passed the execution proceeding in which the sale had been held shall, unless the Court otherwise directs, be revived at the stage at which the sale was ordered." 

21. Whereas the decree holder, judgment debtor and auction purchaser or any person claiming under any of them, against whom an order under Rule 92 of Order XXI of the Code has been made are interdicted from challenging such order by way of a suit, sub rule (4) states that in a suit filed by a third party challenging the judgment debtor's title, the auction purchaser and the decree holder and the judgment debtor shall be necessary parties. sub rule (5) of Rule 92 further postulates that if such a suit by a third party is decreed the court which passes such decree shall direct the decree holder to refund the money to the auction purchaser and also as a consequence of such order, the execution proceedings which had led to the court sale, unless the court otherwise directs, be revived from the stage at which the sale was ordered. Provisions as above covered by sub rule (4) and (5) of Rule 92 have necessarily to be interpreted and understood with reference to the decisions of the Apex Court commencing from Bhanwarlal's case that even the third party setting forth any right over the property covered by court sale can have only recourse to Rule 97 or 99 of Order XXI and not by way of a separate suit. In none of the decisions rendered by the Apex Court from Bhanwarlal's case to Ashan Devi's case, there is reference or consideration to sub rules (4) and (5) of Rule 92 of Order XXI is of no consequence, where the law applicable with respect to a challenge against the court sale even by a third party has been succinctly stated and explained in crystal clear terms that the remedy has to be availed by resort to Rule 97 to 103 of Order XXI which has been declared as a complete Code by themselves in the matter, and not by a separate suit. We have noticed that High Court of Guwahati in National Grindlays Bank v. Deepak Sharma {2002 (TLS) 604153}} and also the High Court of Andhra Pradesh in Kukkala Balakrishna & Ors. v. M/s.Vijaya Oil Mills {AIR 2006 AP 98} have expressed the view that a suit at the instance of a third party to impeach a court sale, having regard to sub rules (4) and (5) of Rule 92 of Order XXI is still maintainable. But both the above High Courts have not taken note of the entertainability of such a suit with reference to the decisions rendered by the Apex Court emerging from Bhanwarlal's case. We are of the firm view that in the light of the law laid down by the Apex Court as to the non-entertainability of a suit impeaching a court sale even by a third party he has only a right to have recourse to Rule 97 or 99 of Order XXI as the case may be. View to the contrary expressed by the above High Courts, that too without taking note of the decisions of the Apex Court (cited supra) cannot have any persuasive value. 

22. The learned Senior Counsel for the first respondent Sri.M.C.Sen has canvassed before us that the suit by the mortgagee bank, O.S.No.67/81, having been instituted much before the mortgaged property being proceeded for sale in execution of the decree in O.S.No.102/76, the court sale over 'B' schedule properties is hit by lis pendens. The auction purchaser of 'B' schedule properties, the plaintiff, could claim only the rights under the judgment debtors in O.S.No.67/81, and the present suit was not maintainable, contended the counsel. In the light of the discussion made above, and the conclusion formed that the present suit of the plaintiff impeaching the court sale is not entertainable, not much dilation over the maintainability of the suit as hit by lis pendens is warranted. Since the 1st defendant bank - mortgagee had, admittedly, instituted the suit, O.S.No.67/81 for sale of the mortgaged property much earlier and before the mortgaged properties were proclaimed and brought to sale in execution of the decree in O.S.No.102/76 such court sale, no doubt, will be subject to the decision rendered in O.S.No.67/81, and the learned counsel is fully justified in contending that the claim raised over 'B' schedule properties by the plaintiff in the suit, as the auction purchaser in the court sale in O.S.No.102/76, is hit by lis pendens {See People's Co-operative Bank Ltd. v. Parvathy Ayyappan Pillai {AIR 1959 Kerala 133} and Govinda Marar v. Govinda Kurup {1971 K.L.T. 730}. 

23. So what we notice from the catena of decisions referred to above, rendered by the Apex Court, is that by virtue of the Amendment Act 1976, a sea change with respect to the resolving of disputes over the executability of a decree for possession has taken place after the amendment Act of 1976 to the Code, by which the provisions covered by Rules 97 to 103 of Order XXI of the Code lay down the scheme for adjudication of all disputes over the right, title and interest of any person over the property covered by the decree, and once the execution has commenced the execution court alone can consider such disputes and it cannot be agitated by a separate suit. Even if a suit is entertained challenging a decree for possession of property before commencement of the execution proceedings of such decree, the scheme covered by the provisions of Rules 97 to 103 of Order XXI after the amendment spells out that if the execution of that decree has culminated in a court sale of the property or the plaintiff in that suit has already been dispossessed, the claim raised over the property has to be adjudicated only by the execution court and not by any other court. Such being the effect of the amendment under the 1976 Amendment Act, the suit filed by the plaintiff after he had been worsted in all his attempts to resist the execution of the decree in O.S.No.67/81 before the execution court in which he had moved umpteen number of petitions obstructing the delivery of B schedule property covered by that decree, was not at all maintainable. Challenge against the sale of B schedule property covered by the decree as vitiated by fraud and material irregularity, or on any other ground, was required to be agitated before the execution court and not by a separate suit. Plaintiff had filed an application under Rule 89 of Order XXI of the Code, after the sale, by itself, would not have barred him from moving an application under Rule 97, before dispossession, or under Rule 99 of Order XXI, after delivery was effected and he was dispossessed from B schedule in execution of the decree. The plaintiff, who had been dispossessed from the B schedule properties under the decree in execution, had moved an application for annulling the report of the Amin, challenging that there was no delivery of B schedule property, before the execution court and dismissal of such application and later it being confirmed in revision by this court, also will in no way impinge his right to move an application under Rule 99 of Order XXI of the Code, if at all he had any right over the property independent of the judgment debtor. His revision had been dismissed by this court reserving his right to work out his remedies by way of appropriate proceedings, however, does not confer on him any authority to vindicate his claim over B schedule properties under the decree by way of a suit. 

24. The court below has not considered the maintainability of the suit with reference to the Amendment Act of 1976 in relation to the amendments made to Rules 97 to 103 of Order XXI of the Code probably because it was not raised in the written statement, nor canvassed by the defendants. Where the provisions covered by Rules 97 to 103 of Order XXI is a complete Code by themselves, as has been held by the Apex Court, time and again, in the decisions referred to above, in the matter of adjudication over the disputes as between any person and the decree holder over a property covered by a decree for possession put in execution, where under the jurisdiction to decide such disputes vests with the execution court and none else, when the execution of a decree has led to a court sale and dispossession of the claimant, only an application under Rule 99 of Order XXI, would lie, if the applicant is so entitled to. A suit by a third party before any court impeaching the correctness of the court sale, setting up any claim over the property covered cannot at all be entertained. As the very jurisdiction of a court to entertain a suit, under the circumstances indicated, is interdicted by the provisions covered by Rules 97 to 103 of the Code, the inescapable conclusion which follows is that the suit filed by the plaintiff in the present case was not maintainable and it ought to have been dismissed at the threshold. The exercise done by the court below on the materials placed to find that the sale of B schedule properties under Ext.A1 decree was vitiated by fraud and material irregularity and illegality was quite unwarranted, and, in view of the conclusion reached that the suit is not maintainable, such finding has to be treated as of no consequence and devoid of any value. The decree passed by the court below, setting aside the sale of A and B schedule in execution of Ext.A1 decree with further directions for fresh sale and also the prohibitory injunction passed against the defendants is liable to be set aside and is ordered accordingly.

In the result, setting aside the decree passed by the court below, the appeal is allowed. O.S.No.229/93 on the file of the Principal Sub Court, Kochi shall stand dismissed. Parties are directed to suffer their costs. 

Sd/- (THOTTATHIL B.RADHAKRISHNAN) JUDGE 

Sd/- (S.S.SATHEESACHANDRAN) JUDGE 

sk/ //true copy// 

Chirag Enterpriseis, Merchant and Commission Agents 12/143, Big Bazar, Calicut - 1 rep. By its Proprietor, Karsandas Govindji. 

BY ADV. SRI.DINESH R.SHENOY 

1. Star Traders, Merchants, Main Road, Kalpetta. 

2. K.V.Abdul Razak, Managing partner, Star Traders, S/o.Ahamen Kunji Hajjee, Fathima Manzil P.O.Iritty, Kannur. 

BY ADV. SRI.S.ANANTHAKRISHNAN BY ADV. SRI.SHYAM PADMAN 

"17. Production of shop-book.-(1) Save in so far as is otherwise provided by the Banker's Books Evidence Act, 1891 (18 of 1891), where the document on which the plaintiff sues is an entry in a shop-book or other account in his possession or power, the plaintiff shall produce the book or account at the time of filing the plaint, together with a copy of the entry on which he relies. 

(2). xxx xxx xxx 

18. Inadmissibility of documents not produced when plaint filed.-(1) A document which ought to be produced in Court by the plaintiff when the plaint is presented, or to be entered in the list to be added or annexed to the plaint, and which is not produced or entered accordingly, shall not, without the leave of the Curt, be received in evidence on his behalf at the hearing of the suit. 

(2) xxx xxx xxx" 

"The extracts from accounts are not "account books" falling within Section 34 of the Evidence Act and are inadmissible. Sanctity is attached in the law of evidence to books of account if the books are indeed "account books i.e. in original and if they are kept in the regular course of business". Such sanctity, cannot attach to private extracts of alleged account books where the original accounts are not filed into Court. this is because, from the extracts, it cannot be discovered whether the accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in a different ink or whether the accounts are in the form of a book with continuous page numbering. Hence, if the original books have not been produced,. It is not possible to know whether the entries relating to payment of rent are entries made in the regular course of business. It is only in the Bankers' Books Evidence Act, 1891 that certified copies are allowed or the case must come under Section65(f) or(g) of the Evidence Act." 

"34. [Entries in books of account including those maintained in an electronic form] when relevant- [Entries in books of accounts including those maintained in an electronic form], regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability." 

"The defendants owed a sum of Rs.1,905,730.55 towards credit purchase of rice as proper accounts maintained by the plaintiff in the name of the first defendant during the course of business as on 7/6/1996. In spite of demands, the defendants have not paid the amount. Hence the suit." 

" The cause of action has arisen in this suit on 7/6/1996, when the last payment made by the defendants and thereafter in Nagaram Amsom and Desom of Kozhikode Taluk, xxx xxxx xxx." 

"Issue of drawing adverse inference is required to be decided by the court taking into consideration the pleadings of the parties and by deciding whether any document/evidence, withheld, has any relevance at all or omission of its production would directly establish the case of the other side. The court cannot lose sight of the fact that burden of proof is on the party which makes a factual averment." 

xx xx xxx 

"Failure of party to prove its defence does not amount to admission, nor it can reverse of discharge the burden of proof of the plaintiff." 

"The Appellate Court should not, ordinarily allow new evidence to be adduced in order to enable a party to raise a new point in appeal. Similarly, where a party on whom the onus of proving a certain point lies fails to discharge the onus, he is not entitled to a fresh opportunity to produce evidence, as the Court can, in such a case, pronounce judgment against him and does not require any additional evidence to enable it to pronounce judgment." 

(2012) 261 KLR 006

IN THE HIGH COURT OF KERALA AT ERNAKULAM 

PRESENT:- THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN 

MONDAY, THE 16TH DAY OF JULY 2012/25TH ASHADHA 1934 

A.S.No.389 of 1998 

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[AGAINST THE DECREE AND JUDGMENT IN O.S.NO.629 OF 1992 DATED 29.1.1997 OF THE COURT OF THE PRINCIPAL SUB JUDGE, NORTH PARAVUR] 

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APPELLANT/DEFENDANT:- 

---------------------------------------- 

N.P.VIJAYAKUMAR, S/O.PARAMESWARAN PILLAI, YADAVAM, PALOOR P.O., PIRAVAM, THROUGH POWER OF ATTORNEY HOLDER - K.S.SURESH, SON OF SANKARAN, KOVILVATTOM DESOM, ' ERNAKULAM. 

BY ADVS.SRI.R.D.SHENOY (SENIOR ADVOCATE) SRI.S.SACHITHANANDA PAI. 

RESPONDENT/PLAINTIFF:- 

--------------------------------------- 

NARAYANIKUTTY AMMA, WIFE OF RAMAKURUP, LAKSHMI MANDIRAM, N.A.D. P.O. ALUVA. 

BY ADVS.SRI.M.RAMESH CHANDER SMT.PREETHI 

THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 03-07-2012, THE COURT ON 16-07-2012 DELIVERED THE FOLLOWING:- 

"C.R." 

Thottathil B.Radhakrishnan & K.Vinod Chandran, JJ. 

----------------------------------- 

A.S.No.389 of 1998 

----------------------------------- 

Dated this, the 16th day of July, 2012 

Head Note:-

Securities Contracts (Regulation) Act, 1956 - Partnership - Share Broking Business - Cochin Stock Exchange - Articles of Association - Clause 23 -  The membership in Cochin Stock Exchange can only be for an individual or a Company or the statutory Corporations referred to in clause 6. A partnership can never obtain a membership in the Cochin Stock Exchange. 

J U D G M E N T 

K.Vinod Chandran,J: 

The appeal arises from a suit for dissolution of partnership and rendition of accounts. The defendant, a relative of the plaintiff, is in appeal. The plaintiff alleged that the defendant having returned jobless from abroad, approached her to commence a share broking business in partnership. Necessary agreements having been entered into and also a room on rent having been taken out at Aluva, the defendant took out a membership in the name of "Gee Vee Associates", with the Cochin Stock Exchange. Accounts were opened at the Indian Bank at Aluva and also Syndicate Bank, Ernakulam. The verification of accounts on 31.12.1988 revealed a profit of Rs.1= lakhs disclosed, which was again invested in the business. The defendant was all-through operating the accounts and managing the affairs of the partnership and on difference of opinion having arisen in 1989, the plaintiff demanded settlement of accounts and the due share in the profits. The plaintiff also contended that during that time the share business had ended troubled waters and both the plaintiff and defendant were faced with legal proceedings initiated by the customers. The dispute having been referred to a Chartered Accountant, nothing could be done due to the incomplete accounts. The plaintiff claimed rendition of accounts and dissolution of the firm and valued the suit at Rupees ten lakhs, being the profit share of Rupees one lakh, and Rupees nine lakhs being one-half share for the alleged sale of membership card with the Cochin Stock Exchange. 

2. The defendant raised the contention that the suit itself was not maintainable for the reason that the membership acquired with the Cochin Stock Exchange was his individual membership, which he was permitted to operate under the trade name "Gee Vee Associates". The business carried on by the defendant at the Cochin Stock Exchange under the trade name assigned to him also was his personal business. However, the son of the plaintiff having expressed his interest in share broking business and being unable to participate directly due to his employment; wanted the defendant to establish a service centre at Aluva, for which the plaintiff was offered as a partner. The Aluva service centre was the sole responsibility of the son of the plaintiff and was not connected with the business of stock broking carried on by the defendant in the Cochin Stock Exchange under an individual membership. The Aluva centre, it was alleged, was only a service centre managed by the plaintiff's son, for whom business was carried on at the Cochin Stock Exchange by the defendant. 

3. The trial Court framed issues, as to whether there was in existence any partnership business, and whether such business was liable to be dissolved and the defendant's liability to account for the income on such dissolution as also the amounts entitled to the plaintiff. The plaintiff examined herself as P.W.1, the landlord of the room in which Aluva service centre was run as P.W.2, the employee at that service centre as P.W.3, the auditor as P.W.4 and the Managers of Indian Bank, Aluva and Syndicate Bank, Ernakulam Branch as P.Ws.5 and 6 and the General Manager of the Cochin Stock Exchange as P.W.7. Defendant did not examine anyone; but marked Exhibits B1 to B5 documents through the plaintiff and her witnesses. 

4. The trial Court placed reliance on Exhibit A5, a rent receipt, and the deposition of the Chartered Accountant, P.W.4, to hold that there was in existence a partnership business between the plaintiff and the defendant. It was also found that though the son of the plaintiff was also engaged in the business, that cannot in any manner lead to discredit the plaintiff's status as a partner. Exhibit X1, being the form for opening an account in the Indian Bank Aluva, indicates both the plaintiff and defendant having signed as partners. Exhibit X3, evidencing the account in Syndicate Bank in the name of "Gee Vee Associates", however, indicates the same as a proprietary concern of the defendant. The documents called for from the Deputy Superintendent of Police as also the Consumer Disputes Redressal Forum ("CDRF" for short), Ernakulam disclosed the business having sailed into bad weather, resulting recovery and penal action being taken by the customers. On an appreciation of the totality of the circumstances and the evidence on record, the trial Court considered the unfortunate circumstance in which the plaintiff's deposition before the CDRF was relied on to discredit her case. The trial Court found that the said admission was only for escaping the liability before the CDRF and despite the membership in the Cochin Stock Exchange being shown as an individual membership, went on to hold that there was in fact a partnership agreement between the plaintiff and the defendant with respect to the firm "Gee Vee Associates" as alleged in the plaint and held the defendant to be liable to account for the income from the said firm to the plaintiff. Hence, a preliminary decree for dissolution of partnership and rendition of accounts was passed, finding that the plaintiff is entitled to recover the amount found to be her share of settlement of accounts with interest at the rate of 12% per annum from the date of suit till realization from the defendant and his assets. 

5. Sri. R.D.Shenoi, learned Senior Counsel for the appellant/defendant took us through the entire evidence to contend that if at all there was a partnership, it could only be confined to the one at Aluva and the membership of the defendant with the Cochin Stock Exchange cannot at all be mixed up with this. To buttress his argument, he would also take us through the Memorandum of Association and Articles of Association of Cochin Stock Exchange to contend that a partnership between a member and non-member is in fact prohibited by Article 23. The learned Senior Counsel for the appellant/defendant, however, would support the findings of the trial Court and contend that the evidence would clearly indicate a partnership, that too of the membership with the Cochin Stock Exchange. 

6. The respondent/plaintiff has not pleaded anywhere as to the amounts expended by her on commencement of partnership. But for the mere assertion that the membership in the Cochin Stock Exchange was taken as an individual membership only to reduce the expenses, the plaintiff does not say as to the exact amounts expended by her or contributed by her at the commencement of the alleged business. Admittedly, the partnership was not a registered one and despite the claim that an agreement was executed between the plaintiff and the defendant, no such agreement has been produced nor has the terms of the agreement been pleaded or spoken to by P.W.1. P.W.1 would contend that the agreement was kept with the defendant and no copies were issued to her. P.W.1 also does not speak of the exact amount of investment or the terms of the agreement in the box, but merely claims one-half profit share on the alleged profit of Rupees one lakh as also the proceeds received on sale of membership card, which she puts at Rs.18 lakhs. 

7. P.W.1 does not claim having conducted any business; but admits to have merely participated in opening the accounts in Indian Bank, Aluva and Syndicate Bank, Ernakulam. As noticed above, though the account in the Indian Bank, Aluva has been shown to be opened by the plaintiff and the defendant in partnership, the account at Syndicate Bank, Ernakulam is in the individual name of the defendant. The plaintiff also does not speak of when the partnership commenced, but merely states that on 31.12.1988, when the books were verified, there was a profit of Rs.1= lakhs. There is nothing on evidence to ascertain the said determination of profit. Further, Exhibit X1 opening form of the account by the alleged partnership in Indian Bank, Aluva is itself dated 22.12.1988. What determination of profits could have happened in nine days later? The plaintiff also admits to the defendant having two outlets of business at Guruvayoor and Piravom; which, even according to her, was the own business of the defendant. The plaintiff also has no claim of profit sharing in the said business outlets. We asked ourselves the question as to; if the businesses at Guruvayoor and Piravom were also in pursuance of the share broking business carried on with the membership of the defendant at the Cochin Stock Exchange, what prevents the plaintiff from claiming a share of those businesses too? 

8. P.W.2 was the landlord of the alleged partnership business at Aluva and P.W.3 was the person employed thereon for a short spell. Both of them are not aware of the exact business relationship between the plaintiff and the defendant and has only a vague understanding as to the partnership between them. Even the auditor, P.W.4, who was approached by the plaintiff and the defendant as a mediator, does not speak of any partnership agreement regarding the membership of the Cochin Stock Exchange. P.W.4 says that while the defendant was a member of the Cochin Stock Exchange, he had sub-centres at two or three places, one of which was at Aluva, which was carried on as a partnership. The accounts, it is categorically deposed by P.W.4, were brought by both persons and was incomplete. The accounts due to the same being incomplete, the auditor was incapacitated from examining it or auditing. In cross examination, he also admits that the accounts were brought to him by the son of the plaintiff and the defendant. P.Ws 5 and 6 were Branch Managers of Banks at Ernakulam and Aluva respectively, who again were not aware of the nature of business carried on by the plaintiff and the defendant. P.W.7, the General Manager of the Cochin Stock Exchange, produced documents to show that the membership was applied for by the defendant in his personal capacity and the same was allowed to be carried on under the trade name "Gee Vee Associates". 

9. The defendant places reliance on Exhibits B1 to B5, which were marked at the instance of the defendant. Exhibit B1 is the deposition of the plaintiff in O.P.No.469 of 1990 before the CDRF, Ernakulam. As per Exhibit B1 (extract of deposition), she contends that though there was a suggestion to make her a partner, she was never made one. Exhibits B2 and B3, again extracts of the deposition, were to the effect that she had not engaged in share business. Exhibit B4 was the written statement filed before the CDRF by the plaintiff. What is discernible from the evidence so far scrutinized is that the defendant had been a member of the Cochin Stock Exchange, entitled to trade in shares on the floor of the Exchange and had been carrying on service centres at three places. The service centre at Aluva was operated through an account opened by the plaintiff and the defendant, styling themselves as partners. In addition to the service centre at Aluva, defendant had two other service centres at Guruvayoor and Piravom, against which the plaintiff has absolutely no claim. One-half of the membership at the Cochin Stock Exchange though claimed by the plaintiff, there is nothing to show any investment by the plaintiff towards that end. The membership, in any event, is of an individual, i.e., the defendant. 

10. In considering the claim of one-half share of the membership card in the name of the defendant, with the Cochin Stock Exchange, Exhibit B5 assumes significance. Exhibit B5 is the Memorandum of Association and Articles of Association of the Cochin Stock Exchange. The Memorandum, by clause III-A-2, propounds the objects, inter alia, to apply for and obtain from the Government of India, recognition of the Exchange as a recognised Stock Exchange within the meaning of the Securities Contracts (Regulation) Act, 1956. The Security Contracts (Regulation) Act, by section 2(g) defines "rules" as "with reference to the rules relating in general to the constitution and management of a stock exchange, includes, in the case of stock exchange which is an incorporated association, its memorandum and articles of association". By Section 4, the Act stipulates recognition of only those exchanges whose rules and bye-laws are in conformity with such conditions as may be prescribed with a view to ensure fair dealing and to protect investors. Section 4 (2)(i) also deals with the conditions which the Central Government may prescribe for the qualification of membership of stock exchange. The Articles of Association of the Cochin Stock Exchange also defines "rules" by clause 1(d) as 'including Memorandum and Articles of Association'. Clause 6 of the Articles of Association lists out the persons eligible for applying for membership as being individuals and companies defined in the Companies Act, 1956 as also certain statutory Corporations. Clause 23 of the Articles of Association specifically prohibits partnerships for the business in the Exchange except between two or more members of the Exchange. The clauses of the Memorandum and Articles of Association referred to above clearly indicates that there could not have been a membership as claimed by the plaintiff in the suit. The membership in Cochin Stock Exchange can only be for an individual or a Company or the statutory Corporations referred to in clause 6. A partnership can never obtain a membership in the Cochin Stock Exchange. A partnership is only contemplated between two members. 

11. The rules, bye-laws and regulations made by the Exchange were held to have statutory flavour by the Hon'ble Supreme Court in Bombay Stock Exchange v. Jaya I.Shah [(2004) 1 SCC 160]. The relationship of a partnership as alleged in the plaint is clearly prohibited. Though not statutory rules, evidently the Memorandum and Articles of Association have been framed so as to obtain recognition as contemplated under the Securities Contracts (Regulation) Act, 1956. The Act itself was enacted to provide for the regulation of stock exchanges and of transactions in securities dealt in, with a view to preventing undesirable speculation in them. The post-war boom in the stock exchanges all over the world and the inherent instability characterized by frequent crash in markets alerted the Governments of various nations to bring in reformative measures for the safety of investors and controlling wild speculation. The legislation attempted towards this end in India was the Securities Contract (Regulation) Act, 1956. It provides for prior recognition of exchanges and a general control over trading methods and practises. The same has now been supplemented with other enactments; and the public purpose with which the legislations were enacted cannot be shut out by courts. 

12. The specific case put forward by the plaintiff was that she and the defendant were engaged in a partnership for carrying on share broking business in a statutorily recognized stock exchange; when such partnership was expressly prohibited by the Articles of Association; by virtue of which the exchange itself obtained recognition. A Division Bench of this Court in Manmadhan v. Krishnappan Unni [1985 KLT 670] held that if the illegality of an agreement appears from the evidence or is otherwise duly brought to the notice of the court, the court cannot enforce it, whether the illegality is pleaded or not. It was also held that such a question which has a bearing on public policy, can be raised by the court suo motu. That case arose from a decree and judgment for recovery of money on a dishonoured cheque. The plaintiff claimed recovery of the amounts which he claimed to have lent to the defendant, which was repayable with interest. Before the High Court, it was contended that the plaintiff, being a Government servant, was prohibited by Rule 16 of the Government Servants' Conduct Rules from directly or indirectly engaging in the business of money lending. Deprecating the finding of the court below that there was absolutely no necessity to go into the question of violation of Rule 16 since there was no clear evidence to show that the plaintiff was lending money and actually engaging himself in the business of money lending, this Court reversed the said finding and remanded the issue to the trial court. 

13. In the instant case, the plaintiff claims to have entered into an agreement which is specifically prohibited, again in the nature of a public policy. The prohibition is not statutory in nature; but, however, the business said to have been carried on in a statutorily constituted exchange was specifically prohibited by the terms of its constitution, which was a mandate of the statute under which recognition was obtained from the Central Government. The evidence adduced also would go against the plea of the plaintiff regarding sharing in the membership obtained by the defendant at the Cochin Stock Exchange. At best, the plaintiff and the defendant had carried on some business in Aluva. The investment in the said business, the terms of the said business, etc. are not even pleaded by the plaintiff. The accounts of the said business are incomplete and are incapable of any audit or verification. The plaintiff admits to the business having collapsed irretrievably and also having expended some amounts to satisfy disgruntled customers. There is absolutely no scope for any rendition of accounts or dissolution of partnership in the event of the existence and continuance of the partnership itself having not been cogently established. We are, therefore, of the opinion that there is absolutely no merit in the claims made by the respondent-plaintiff and the plaintiff is not entitled to any decree in her favour as prayed for. 

In the result, we set aside the decree and judgment of the court below and allow this appeal by dismissing the suit. The appellant-defendant is awarded costs throughout. 

Sd/- Thottathil B.Radhakrishnan Judge 

Sd/- K.Vinod Chandran Judge. 

vku/- - true copy - 

(2012) 245 KLR 291 

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT: THE HONOURABLE MR.JUSTICE P.BHAVADASAN 

TUESDAY, THE 27TH DAY OF MARCH 2012/7TH CHAITHRA 1934 

AS.No. 503 of 2001 (E) 

--------------------------- 

OS.622/1993 of ADDL.SUB COURT, NORTH PARAVUR 

-------------- 

APPELLANTS/PLAINTIFFS: 

------------------------------- 

1. BIJU PAUL, S/O. POULOSE, KANIYAMKUTTIYIL, PERUMBAVOOR KARA, DO VILLAGE. 

2. SHYNI, W/O. BIJU PAUL, -DO- -DO- 

BY ADVS.SRI.R.D.SHENOY (SR.) SRI.S.VINOD BHAT 

RESPONDENTS(DEFENDANTS): 

------------------------------------ * 

1. THE NEDUNGADI BANK LTD., REP. BY MANAGER OF ERNAKULAM SOUTH BRANCH, D.H. ROAD, KOCHI - 16. (SUBSTITUTED) * THE NAME OF THE 1ST RESPONDENT (THE NEDUNGADI BANK LTD.,) IS SUBSTITUTED AS 'PUNJAB NATIONAL BANK' VIDE ORDER DATED 03/09/2010 ON I.A. NO.2242/2010. 

2. JOSEPH, S/O. AUGUSTHY, KUREETHADATHIL, T.B. ROAD, PERUMBAVOOR KARA, DO VILLAGE. 3. SELIN, W/O. JOSEPH (D/O. CHERIYAN, ARAMBATTMAKIYIL) KUREETHADATHIL, -DO- -DO- 

R1 BY ADV. SRI.K.P.BALASUBRAMANYAN 

THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 22/02/2012, THE COURT ON 27-03-2012 DELIVERED THE FOLLOWING: svs 

P. BHAVADASAN, J. 

- - - - - - - - - - - - - - - - - - - - - - - - - - - 

A.S. No. 503 of 2001 

- - - - - - - - - - - - - - - - - - - - - - - - - - - 

Dated this the 27th day of March, 2012. 

Head Note:-

Transfer of Property Act, 1882 - Section 58(f) - In order to create a valid equitable mortgage by deposit of title deeds, some documents showing the evidence of title must be deposited with the mortgagee. The encumbrance certificate or certificate from the Village Officer do not show the title to the suit property at all. The essence of the transaction is that the title deed deposited shall be security for the debt. It is sufficient if the deeds deposited bona fide relate to the property or are any material evidence of title and are shown to have been deposited with an intention to create a security thereon. The essence of the transaction is that the deposit of title deeds shall be with the intention to create a security for the debt. 

J U D G M E N T 

The plaintiffs, who had their suit dismissed by the lower court, are the appellants. 

2. Plaint item Nos.1 and 2 were obtained by the plaintiffs as per Exts.A1 and A2 dated 24.6.1993. The plaintiffs have ever been in possession and enjoyment of the property from the said date. The second defendant had availed of a loan of Rs.10,00,000/- from Federal Bank, Ernakulam after mortgaging the plaint schedule property in March, 1989. Defendants 2 and 3 executed a mortgage in favour of the said Bank. Since the debt remained undischarged, the Bank initiated proceedings and instituted O.S.231 of 1992 before the Sub Court, North Parur. In order to discharge the debt, defendants 2 and 3 approached the father of the first plaintiff and the plaintiffs had purchased the plaint schedule property. The amount due to the Bank was paid and the defendants had obtained the original assignment deeds namely, Exts. A3 and A3(a) which were handed over to the plaintiffs. After Exts.A1 and A2, the plaintiffs have effected considerable improvements in the plaint schedule property and they are residing in plaint item No.2 house. The plaintiffs became aware of the fact that defendants 2 and 3 had forged the documents and availed of a loan from the first defendant Bank by creating an equitable mortgage in respect of the suit property. The mortgage so created is invalid and is not binding on the plaintiffs. The first defendant Bank had instituted O.S.567 of 1992 to realise the amount from the second defendant. The second defendant entered appearance and filed a written statement admitting the claim. Hence the suit was decreed. The suit property lies within the jurisdiction of Sub Court, North Paravur and Sub Court, Ernakulam has no jurisdiction to pass any decree in respect of the property. Apart from the fact that a wrong court has passed the decree, the plaintiffs were not parties to the said suit. They therefore laid the suit for injunction restraining the plaintiffs from proceedings against the plaint schedule property and for declaration as against defendants 2 and 3. 

3. The first defendant resisted the plea and contended that the suit is a result of collusion between the plaintiffs and defendants 2 and 3 and is not a bonafide one. According to the first defendant, it is possible that defendants 2 and 3 might have deposited fake or fabricated documents with the earlier Bank and availed of a loan. The first defendant had instituted O.S.567 of 1992 before the Sub Court, Ernakulam for realisation of the loan amount and a decree was passed by the said court. The second defendant had deposited the title deeds of the property with the intention of creating mortgage and an equitable mortgage was created by him. Decree obtained by the first defendant Bank is valid and binding and it cannot be avoided by the plaintiffs. They therefore prayed for a dismissal of the suit.

4. Defendants 2 and 3 remained ex-parte. On the basis of the above pleadings, issues were raised by the trial court. The evidence consists of the testimony of P.Ws.1 and 2 and documents marked as Exts.A1 to A10 from the side of the plaintiffs. The defendants did not adduce any oral evidence but marked Exts.B1 to B5. The lower court on an evaluation of the evidence came to the conclusion that the document of title deposited by defendants 2 and 3 before the first defendant Bank is concocted and fabricated one. But the court went on to hold that encumbrance certificate and tax receipts deposited were sufficient to create an equitable mortgage and held that the mortgage created in favour of the first defendant is valid. Accordingly, the suit was dismissed. 

5. During the pendency of this appeal, the first defendant Bank was taken over by Punjab National Bank and they were brought on the party array.

6. Learned counsel for the appellants contended that the decree of the court below is clearly unsustainable both on facts and in law. The clear finding was to the effect that the document of title deposited by the second defendant was concocted and fabricated one and if that is so, there is no justification in finding that the mortgage is a valid one. The court below was not justified in coming to the conclusion that merely by producing the encumbrance certificate and tax receipts, an equitable mortgage could be created. It may be true that the document of title as such need not be deposited to create an equitable mortgage. But documents showing evidence of title along with the other documents will have to be deposited to create a valid equitable mortgage. In the case on hand, the encumbrance certificate and tax receipts alone are produced and they are insufficient to show title to the suit property. According to the learned counsel, the reliance placed on by the court below of the decision reported in Anju Pillai v. M.S.M.Kasiviswanathan Chettiar (AIR 1974 Madras 16) is incorrect. Drawing attention to the evidence of P.W.1, it was pointed out that his evidence is to the effect that the document of title deposited with the first defendant is a fraudulent one. According to learned counsel the decree passed by the court below cannot be sustained. 

7. No arguments were addressed by the learned counsel appearing for the first defendant Bank in this appeal. 

8. The question that arises for consideration is whether there is valid equitable mortgage created by the second defendant in favour of the first defendant by producing the encumbrance certificate and the tax receipts. 

9. Section 58(f) of the Transfer of Property Act defines a 'mortgage by deposit of title deeds'. It reads as follows: 

"58(f) Mortgage by deposit of title deeds.- Where a person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay and in any other town which the State  Government concerned may, by notification in the official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds." 

10. Mortgage by deposit of title deeds is also known as equitable mortgage. It is well settled that in order to create a mortgage by deposit of title deeds, it is not necessary that there should be a registered deed. The requisites necessary for a mortgage are (i) a debt, (ii) a deposit of title deeds and (iii) an intention that the deeds shall be security for the debt. The debt may be an existing debt or a future debt. If on the other hand, the mortgage is created by an instrument in writing, then it needs to be registered as per law. 

11. The lower court relied on the decision reported in Anju Pillai's case (supra). It is true that in the said decision it was held that even if the document of title as such is not deposited, a valid equitable mortgage can be created. In the said case, the documents deposited were (i) the hundi towards the purchase price; (ii) the agreement by the previous owner to convey the property, (iii) tax receipt in the name of the plaintiff's father. It has been held that merely by depositing tax receipts and plan which are not documents of title, an equitable mortgage is not created. A mortgage deed, lease deed etc., may be sufficient and deposit of which are sufficient to constitute evidence of title to create an equitable mortgage. It is also settled that if the original document is lost, a certified copy of document of title will be sufficient, but it is necessary to show that the original is lost. 

12. The evidence of P.W.1 in the case on hand shows that the document of title said to have been deposited by the second defendant is a fraudulent one, the question arises is whether the other two documents are sufficient to create fraudulent mortgage.

13. The court below has given detailed reasons and has discussed the evidence of P.W.1 to come to the conclusion that the document of title said to have been deposited by the second defendant is a fraudulent document. The evidence also shows that the prior document of title has been produced by the plaintiffs and so also the assignment deeds in their favour. 

14. In fact, the court below in paragraph 13 of its judgment goes on to hold that the court below had no hesitation to take the view that creation of mortgage without valid title deed is not valid. However, the court below then goes on to hold that the mortgage created by deposit of encumbrance certificate and tax receipts in favour of the first defendant Bank is a valid one. 

15. It is difficult to support the view of the court below that Exts. B2 and B3 are sufficient to create a valid equitable mortgage. While it is true that deposit of document of title as such may not be necessary to create a valid equitable mortgage, it is well settled that some documents showing existing title must be produced to create a valid equitable mortgage. In the decision reported in Chidambaram Chettiar v. Aziz Meah (AIR 1938 Rangoon 149) it was held as follows: 

"In order to create a valid mortgage by deposit of title deeds under S.58(f), it is not necessary that the whole, or even the most material, of the documents of title to the property should be deposited, nor that the documents deposited should show a complete or good title in the depositor. It is sufficient if the deeds deposited bona fide relate to the property or are material evidence of title, or are shown to have been deposited with the intention of creating a security thereon." 

16. In the decision reported in Syndicate Bank v. Modern Tile and Clay Works (1980 K.L.T. 550), it was held as follows: 

"9 . The stand taken by the contesting respondents however is that the deposit in this case being of a copy of a kanom deed and not of the original kanom deed there has not been a deposit of title deeds and therefore no equitable mortgage is created. The question to be considered is whether a registration copy of a kanom deed is a document of title for purposes of an equitable mortgage. By "documents of title" we mean the legal instruments which prove the right of a person in a particular property. Evidence supplied by documents may in some cases be conclusive while in other cases it may be insufficient in proving the title or the right claimed. When a person who is acclaimed and recognised by law as the owner of property transfers his rights by an instrument which satisfies all the requirements of law, the instrument of transfer is a title deed in respect of the property so far as the transferee is concerned. The document may amount to conclusive proof of such transfer. On the other hand a document may be of such a kind that it tends to prove such transfer of right but is not conclusive of a transfer of ownership. Thus a receipt for payment of revenue may not be conclusive proof of the ownership of the person in whose name it is issued even though the liability to pay revenue is on the owner. This is because in practice revenue is received by the concerned authorities from a person even without an enquiry whether he is the owner of the property. A revenue receipt is therefore insufficient evidence to prove title to property and is therefore not by itself a document of title.  

10. When a property owned by Government is transferred to an individual and a patta is issued to him, the patta so issued may be a document of title. That does not mean that a patta issued to an owner is always a document of title as is seen from what follow-: A who is the owner of a property, transfers it to B by a deed of transfer. The transferee may move the revenue authorities for a change of registry in the revenue records and a patta may be issued to him. The patta in such cases is only a document showing the person who is liable to pay the revenue of the property. It is only an evidence of title, the document of title being the deed of transfer that A issued to B. The right of a person who lends money on the deposit of the patta may get defeated if another claims security over the same land by proving that the deed of transfer had been deposited with him by way of equitable mortgage. A parity of reasoning applies in the case of a copy of deed of transfer. A copy of a deed of transfer is not ordinarily a document of title for the purposes of an equitable mortgage. It is only evidence of title. It is the original deed of transfer that is the document of title. This is because the rules for the issue of copies permit the obtaining of copies by an owner even while he is in possession of the original document of title. To hold that a copy of a deed of transfer is also a document of title for purposes of S.58(f) of the Transfer of Property Act would amount to giving facilities to the owner to misuse the provision. He may get an advance from one person by delivering the original document of title and then use the copy of the document for getting an advance from some other person who may not be aware of the earlier equitable mortgage. It should be the policy of law to see that such contingencies are avoided. At the same time there may be cases where the original document is lost and there are no chances of that document being made use of for any purpose. In the absence of the original deed of transfer the next best evidence of the owner's title to the property is a certified copy of that document. A certified copy in such cases may with sufficient safeguards be received as a document of title. The essential pre-requisite for the use of a certified copy as a document of title is the loss of the original deed. Unless and until it is made out that the original is lost, a certified copy of a document cannot be considered to be a document of title for the purpose of S.58(f) of the Transfer of Property Act. 

11 . Decisions on equitable mortgages where documents other than the original deed of transfer are deposited by way of security have to be appreciated in the light of the above principles. In Jit Singh Sabedar v. Punjab and Sind Bank AIR. 1935 Lah. 640, the original award which formed the document of title having been filed in Court and a decree obtained, was not available for the purpose of deposit by way of equitable mortgage. It was held that an equitable mortgage created by deposit of a copy of the award was valid. In Punjab and Sind Bank v. Firm Ganesh Das, AIR. 1935 Lah. 721, deposit of a copy of a jamabandi was held to be insufficient to constitute an equitable mortgage because a jamabandi was nothing more than Government record prepared for the purpose of collection of revenue. Such a document may be presumptive evidence of title but not a document of title. It was also held that in the absence of proof that the original document of title was lost, no equitable mortgage could be created by deposit of a copy of the title deed. In (Firm) Jowala Das v. Thakor Das, AIR. 1936 Lah. 251, a distinction was made between documents creating title and documents evidencing title and it was held that an equitable mortgage could be validly created only by deposit of documents of the former character. Deposit of a copy of the jamabandi was held to be insufficient for creating a mortgage. See also Jivan Das v. Peoples Bank, AIR. 1937 Lah. 926. In Mrs. Stewart v. Bank of Upper India,34 1C. 937, it was held that "title deeds include copies of deeds where the originals are not forth-coming". A similar view was taken in Surendra Mohan v. Mohendranath, AIR. 1932 Cal. 590, also. 

12. In the instant case Ext. A5 the affidavit produced by defendants 2 to 4 clearly makes out that the original documents of title were not available. It was on the above representation that the" copy of the kanom deed was accepted by the Bank. There is no case for the contesting respondents that they or anybody else are in possession of the original documents. Therefore the case that the equitable mortgage is bad for failure to deposit the original title deeds cannot be accepted. 

17. In the decision reported in Assiamma v. State Bank of Mysore (ILR 1990(2) Kerala 43) it was held as follows: 

"..............In this connection, learned counsel for the appellant heavily relied on Section 58(f) of the Transfer of Property Act which reads as follows: 

".....Where a person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay and in any other town which the State Government concerned may, by notification in the official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds." 

It is not disputed that the deposit was made in a town specified by notification by the State Government. What is argued by learned counsel for 2nd defendant is that Clause (f) of section 58 of the Act contemplates only deposit of documents of original title to immovable properties and not copies thereof. In this case, it is not disputed that it was only registration copies of the documents of title of immovable property, which were deposited by 2nd defendant in the Bank........ Since properties were gifted to other persons also thereunder, only one of the donees would be able to keep the original and the other donees had to be satisfied with a registration copy of the document............According to learned counsel for 2nd defendant, deposit of the above documents was not sufficient to create an equitable mortgage, as the original document of title deed was not among the documents of title deposited. In support of is contention, learned counsel relied on a decision of a Division Bench of this court in Syndicate Bank v. Modern Tile and Clay works. In that case Janaki Amma, J. speaking for the Bench said as follows:  

"By 'document of title' we mean the legal instruments which prove the right of a person the right of a person in a particular property. Evidence supplied by documents may in some cases be conclusive while in other cases it may be insufficient in proving the tile or the right claimed. When a person who is acclaimed and recognised by law as the owner of property transfers his right by an instrument which satisfies all the requires of law, the instrument of transfer is a title deed in respect of the property so far as the transferee is concerned. The document may amount of conclusive proof of such transfer. On the other hand a document may be of such a kind that it tends to prove such transfer of right but is not conclusive of a transfer of ownership. Thus a receipt for payment of revenue may not be conclusive proof of the ownership of the person in whose name it is issued even though the liability to pay revenue is on the owner. This is because in practice revenue is received by the concerned authorities from a person even without an enquiry whether he is the owner of the property. A revenue receipt is therefore insufficient evidence to prove title to property and is therefore not by itself a document of title..............A party of reasoning applies in the case of a copy of deed of transfer. A copy of a deed of transfer is not ordinarily a document of title for the purposes of an equitable mortgage. It is the original deed of transfer that is is the document of title. This is because the rules for the issue of copies permit the obtaining of copies by an owner even while he is in possession of the original document of title. To hold that a copy of a deed of transfer is also a document of title for purposes of section 58(f) of the Transfer of Property Act would amount to giving facilities to the owner to misuse the provision. He may get an advance from one person by delivering the original document of title and then use the copy of the document for getting an advance from some other who may not be aware of the earlier equitable mortgage. It should be the policy of law to see that such contingencies are avoided. At the same time there may be cases where the original document is lost and there are no chances of that document being made use of for any purpose. In the absence of the original deed of transfer the next best evidence of the owner's title to the property is a certified copy of that document. A certified copy in such cases may with sufficient safeguards be received as a document of title. The essential pre-requisite for the use of a certified copy as a document of title is the loss of the original deed. Unless and until it is made out that the original is lost, a certified copy of a document cannot be considered to be a document of title for the purpose of Section 58(f) of the Transfer of Property Act..................... 

In the latter decision, a Division Bench of the Calcutta High Court made the following observations: 

"It is sufficient if the deeds deposited bona fide relating to the property are material evidence of title and are shown to have been deposited with the intention of creating a charge. ... As regards attested copies, there is no clear decision but it seems that an attested copy would not be enough unless, perhaps, there is proof of the original not being available." 

After referring to the observations in ...........to the effect that what the terms "documents of title" and "title deeds" denote is that such a document or documents as show a prima facie or apparent title in the depositor or some interests therein, quoted with approval the following passage from the judgment. 

"If the form of the documents of title that have been delivered to the creditor is such that from the deposit of such documents alone the court would be entitled to conclude that the documents were deposited with the intention of creating a security for the repayment of the debt, prima facie a mortgage by deposit of title deeds would be proved; although, of course, such an inference would not be irrebutable, and would not be drawn if the weight of the evidence as a whole told against it." 

After reviewing the relevant decision on the subject Supreme Court finally held that: 

"A Court will have to ascertain in each case whether in substance there is delivery of title- deeds by the debtor to the creditor. If the creditor was already in possession of the title deeds it would be hyper-technical to insist upon the formality of the creditor delivering the title deeds to the debtor and the debtor re-delivering them to the creditor. What would be necessary in those circumstances is whether the parties agreed to treat the documents in the possession of the creditor or his agent as delivery to him for the purpose of the transaction." 

A Full bench of the Rangoon High Court considered the question in ............. Justice Dunkley, who delivered the main judgment observed as follows: 

"In our opinion the correct statement of the law is that in order to create a valid mortgage by deposit of title deeds under section 58(f), T.P.Act, it is not necessary that the whole, or even the most material of the documents of title to the property should be deposited, nor that he documents deposited should show a complete or good title in the deposition. It is sufficient if the deeds deposited bona fide relate to the property or are material evidence of title are shown to have been deposited with the intention of creating a security thereon." 

Roberts, C.J. agreed with the main judgment and Mya Bu, J. added as follows: 

"The documents enumerated in my learned brother's judgment, in my opinion, show prima facie or apparent title of the mortgagors to the land covered by those documents. The grant shows that the original owner of the property was the mortgaors' vendor. The certificate of transfer shows the factum of the transfer having taken place about 14 years before the alleged mortgage. Although it is not a valid document of conveyance, yet it is useful as showing that a transfer as a matter of fact had taken place. Then there were tax tickets or revenue receipts, which showed that during the years that elapsed between the transfer and the alleged mortgage the mortgagors were paying the revenue as persons who owned the land ...........In these circumstances, in my opinion, the documents enumerated in my learned brother's judgment are sufficient to show that there was prima facie title in the mortgagors to the property mentioned in the documents." 

The same question came up for consideration of a Division Bench of the Madras High Court in Angu Pillai v. M.S.M. Kasiviswanathan Chettiar............ held that it was not necessary that the whole, or even the most material of the documents of title to the property should be deposited; nor that the documents deposited should show a complete or good title in the depositor and it is sufficient if the deeds deposited bona fide relate to the property or are material evidence of title or are shown to have been deposited with the intention of creating a security thereon In an earlier decision in Dohganna v. Jammanna the Madras High Court has taken the same view. 

In the instant case, registration copy of the title deed Ext.A19, tax receipts Exts.A21 and A21 (a) and the certificate issued by the President of Kumbala Panchayat Ext.A22 to the effect that door Nos. referred to therein are situated in Sy. Nis. 119/5 and 113/7 of Koipady village clearly establish the title of the 2nd defendant to the properties in Sy. Nos.119/5 and 113/7 of Koipadi village covered by Ext.A19. The intention of the appellant to create an equitable mortgage in respect of those properties was confirmed by the 2nd defendant in Ext.A17 in clear and unambiguous terms. In our view, this is sufficient to constitute an equitable mortgage by the 2nd defendant in favour of the Bank in respect of right of 2nd defendant in properties in schedule F to Ext.A19. It is evident from the correspondence  between the 2nd defendant and the Bank that the 2nd defendant had made it clear to the Bank that the original title deed was not available with her as properties were gifted to her mother, brothers and sisters also thereunder. It was impossible for all the donees in such circumstances to possess the original deed." 

18. In the decision reported in K.J.Nathan v. S.V. Maruthi Rao (AIR 1965 SC 430), it was held as follows: 

"The foregoing discussion may be summarized thus: Under the Transfer of Property Act a mortgage by deposit of title-deeds is one of the forms of mortgages whereunder there it a transfer of interest in specific immoveable property for the purpose of securing payment of money advanced or to be advanced by way of loan. Therefore, such a mortgage of property takes effect against a mortgage deed subsequently executed and registered in respect of the same property. The three requisites for such a mortgage are (i) debt, (ii) deposit of title deeds: and (iii) an intention that the deeds shall be security for the debt. Whether there is an intention that the deeds shall be security for the debt is a question of fact in each case. The said fact will have to be decided just like any other fact on presumptions and on oral, documentary or circumstantial evidence. There is no presumption of law that the mere deposit of title-deeds constitutes a mortgage, for no such presumption has been laid down either in the Evidence Act or in the Transfer of Property Act. But a court may presume under S. 114 of the Evidence Act that under certain circumstances a loan and a deposit of title-deeds constitute a mortgage. But that is really an inference as to the existence of one fact from the existence of some other fact or facts. Nor the fact that at the time the title-deeds were deposited there was an intention to execute a mortgage deed in itself negatives, or is inconsistent with, the intention to create a mortgage by deposit of title-deeds to be in force till the mortgage deed was executed. The decisions of English Courts making a distinction between the debt preceding the deposit and that following it can at best be only a guide; but the said distinction itself cannot be considered to be a rule of law for application under all circumstances. Physical delivery of documents by the debtor to the creditor is not the only mode of deposit. There may be a constructive deposit. A Court will have to ascertain in each case whether in substance there is a delivery of title-deeds by the debtor to the creditor. If the creditor was already in possession of the title-deeds, it would be hyper-technical to insist upon the formality of the creditor delivering the title-deeds to the debtor and the debtor redelivering them to the creditor. What would be necessary in those circumstances is whether the parties agreed to treat the documents in the possession of the creditor or his agent as delivery to him for the purpose of the transaction." 

19. From the above decisions, it is very clear that even though it may not be necessary to deposit the title deeds as such in order to create a valid mortgage, documents, which prima facie prove evidence of title must be deposited with the mortgageee. Therefore it is essential that in order to create a valid equitable mortgage by deposit of title deeds, some documents showing the evidence of title must be deposited with the mortgagee. The encumbrance certificate or certificate from the Village Officer do not show the title to the suit property at all. The essence of the transaction is that the title deed deposited shall be security for the debt. It is sufficient if the deeds deposited bona fide relate to the property or are any material evidence of title and are shown to have been deposited with an intention to create a security thereon. The essence of the transaction is that the deposit of title deeds shall be with the intention to create a security for the debt. 

20. Applying the law as laid down in the various decisions referred to above, and on perusing the evidence adduced in the case, it is difficult to accept the finding of the court below that on production of Exts.B2 and B3 and the deposit of the same with the Bank, a valid mortgage is created. In the result, this appeal is allowed, the judgment and decree passed by the court below are set aside and a decree is passed in the following terms:

i) The first defendant is restrained by a permanent prohibitory injunction in proceeding against the plaint schedule properties on the basis of the equitable mortgage created by the second defendant and also in pursuance to the decree obtained in O.S.567 of 1992 of Sub Court, Ernakulam. The appellants are entitled to costs both in this court as well as before the court below. 

P. BHAVADASAN, JUDGE sb. 

IN THE HIGH COURT OF KERALA AT ERNAKULAM

Harun-Ul-Rashid, J.

A.S. No. 292 of 1999

Dated this the 29^th day of February, 2012

Head Note:-

Indian Evidence Act, 1872 – Section 115 - Transfer of Property Act, 1882 – Sections 6(a) and 43 - Spes successionis - Where a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successionis, the transferee is entitled to the benefit of S.43, if he has taken the transfer on the faith of that representation and for consideration. 

Indian Evidence Act, 1872 – Section 115 - Transfer of Property Act, 1882 – Sections 6(a) and 43 - Spes successionis - If the expectant heir receives consideration and so conducts himself as to mislead an owner in to not making dispositions of his property inter vivos the expectant heir can be debarred from setting up his right when it does unquestionably vest in him. The principle of estoppel operates in such cases. 

Indian Evidence Act, 1872 – Section 115 - Transfer of Property Act, 1882 – Sections 6(a) and 43 - Spes successionis right can be alienated by family arrangement.

For Appellant:- 

• S. Jasmine

For Respondents:- 

• P.R. Venketesh
• N. Subramaniam
• M. S. Narayanan;

J U D G M E N T

1. Plaintiff is the appellant. The appeal is directed against the judgment and decree in O.S. No. 105/1986 on the file of the Additional Sub Court, Irinjalakuda. Suit was filed for setting aside Ext. A2 sale deed dated 09-12-1974, partition and separate possession of 1/6th share and for share of profits and costs. The Trial Court dismissed the suit with costs. Parties hereinafter are referred to as the plaintiff and defendants as arrayed in the suit.

2. Plaintiff is claiming share in the plaint schedule property as one of the legal heirs of Bavunni. Bavunni died on 31-03-1982. Defendants 1 to 4 are the other children of Bavunni and the 5th defendant is the wife of Bavunni. The 6th defendant is the brother of Bavunni.

3. The 6th defendant in the written statement contended that right of the plaintiff in the plaint schedule property was assigned to him and he purchased the same for value and in good faith. Ext. A2 is the sale deed executed by the plaintiff in favour of the 6th defendant. According to the; 6th defendant, the plaintiff is not entitled to any share on Bavunni's death since she released her share in favour of the 6th defendant. It is pleaded in the written statement that the plaintiff, while residing with her husband, wanted to sell her right in the property owned by her father, that she approached Bavunni and 6th defendant, who is the brother of Bavunni and expressed her willingness to release the right for value to be received. The value of her share was fixed after negotiation and out of the value fixed, one half of the amount was utilised by the plaintiff for purchasing the property covered by Ext. B1 sale deed. The other half amount was utilised for her personal use. Subsequently, all the sharers in the plaint schedule property had executed a partition deed as document No. 1252/1985 dividing the properties between the other sharers. The 6th defendant also contended that the suit for cencellation of the document of sale deed is barred by law of limitation. It is pleaded in the plaint that the 6th defendant who is her paternal uncle has tremendous influence over her, that during the lifetime of Bavunni, the 6th defendant had taken advantage of the influence on her managed to get Ext. A2 sale deed purporting to be a sale deed to the effect that she has assigned her rights over the property to him. It is pleaded that at the time of execution of Ext. A2 sale deed, the plaintiff had no right over the properties owned by her father being spes successionis, she has no transferable right. In substance, the plaintiff contended that Ext. A2 sale deed was executed under coercion and influence. The recitals in Ext. A2 sale deed reads that there are 14 items of properties. The 1st nine items were inherited by Bavunni and 6th defendant from their mother, Beevathu, items 10 & 11 were purchased out of the profits from those properties and items 12 to 14 were inherited by Bavunni and 6th defendant on the death of Beevathu. The recitals further reads that the plaintiff, defendants 1 to 4 and Bavunni are all had rights in the said properties. By Ext. A2 sale deed rights of the plaintiff in the plaint schedule properties were assigned to the 6th defendant for a consideration of Rs.1,000/-. Plaint schedule properties are the 14 items referred to in Ext. A2 sale deed. Out of Rs.1,000/- received by the plaintiff as consideration of Ext. A2 sale deed, Rs.500/- was paid for enabling the plaintiff to purchase the property covered by Ext. B1 sale deed. The plaintiff purchased Ext. B1 property on 22-03-1974 by utilising Rs.500/- received from the 6th defendant. Subsequently, Ext. A2 sale deed was executed by her on 09-12-1974 in favour of the 6th defendant. On the date of execution of Ext. A2, balance Rs.500/- was received by cash. Ext. B1 assignment deed was executed in March, 1974 and subsequently executed Ext. A2 sale deed during December, 1974. Ext. A2 sale deed was executed about three years after her marriage, at a time when she was residing along with her husband.

4. As per Ext. B1 sale deed, she purchased 1 acre of property. The plaintiff testified before the Court as PW 1 that after assigning Ext. A2 sale deed she informed her mother, brothers and sisters about the execution. The suit was brought up in the year 1986, about 11 years thereafter.

5. The Trial Court framed issues. PW 1 and DW 1 were examined and Exts. A1 to A4 and B1 were marked.

6. The questions raised in the appeal is as to whether the sale deed No. 255/1975 is liable to be set aside, whether the plaintiff is entitled to l / 6th share as claimed and as to whether the plaint schedule properties are partible. As per Ext. A2 sale deed, the plaintiff assigned her rights over the plaint schedule properties to the 6th defendant for a consideration of Rs.1,000/-, out of which Rs.500/- was paid by him for the purchasing the property covered by Ext. B1 sale deed and the remaining Rs.500/- was paid in ready cash. Ext. A2 assignment was made in the year 1974 after about three years of her marriage. Ext. B1 evidences assignment of one acre of property in favour of the plaintiff. The plaintiff failed to adduce any evidence to prove that the 6th defendant exerted influence for executing Ext. A2 sale deed. Except the bald statement that she was forced to execute Ext. A2 sale deed in favour of the 6th defendant because of 6th defendant's influence or by coercion, no evidence was adduced to prove any sort of influence exerted by the 6th defendant. Both Exts. A2 and B1 sale deeds recite that sale consideration for the assignment evidenced by Ext. B1 was paid by the 6th defendant, being part of the consideration for sale evidenced by Ext. A2. Ext. A2 sale deed is of the year 1974, but, the suit was filed in the year 1986, about 11 yeas thereafter. The facts and circumstances indicate that there is no reason to believe that Ext. A2 sale deed was executed under influence or by coercion as alleged in the plaint.

7. Admittedly, the plaint schedule properties originally jointly belonged to her father and the 6th defendant who are brothers. Ext. A2 sale deed was executed as if the plaintiff has got alienable right in the property that belong to her father. In the suit, the stand taken by the plaintiff is that she has no right in the properties to make a valid transfer of right in the plaint schedule properties. It is contended that she had only a chance of succession. The 6th defendant contended that the plaintiff is estopped from contending so, after receiving the consideration for her share in view of Sec.115 of the Evidence Act.

8. It is well settled law that where a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successionis, the transferee is entitled to the benefit of S.43, if he has taken the transfer on the faith of that representation and for consideration. Referring to S.6(a) and S.43 of the Transfer of Property Act, the Apex Court in Jumma Masjid, Mercara Vs. Kodimaniandra Devian and Others, AIR 1962 SC 847 held as follows:

"Sec.43 deal with representations as to title made by a transferor who had no title at the time of transfer, and provides that the transfer shall fasten itself on the title which the transferor subsequently acquires. Sec.6(a) enacts a rule of substantive law, while Sec.43 enacts a rule of estoppel which is one of evidence. The two provisions operate on different fields, and under different conditions, and there is no ground for reading a conflict between them or for cutting down the ambit of the one by reference to the other; both of them can be given full effect on their own terms, in their respective spheres."

The Apex Court further held as follows:

"Sec.43 embodies a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation. It is immaterial whether the transferor acts bona fide or fraudulently in making the representation. It is only material to find out whether in fact the transferee has been misled. For the purpose of the section it matters not whether the transferor acted fraudulently or innocently in making the representation, and that what is material is that he did make a representation and the transferee has acted on it."

9. The conditions for applicability of Sec.115 of the Evidence Act, in a similar situation, was considered by the Apex Court in Chhaganlal Keshavlal Mehta Vs. Patel Narandas Haribhai, AIR 1982 SC 121. In the above said decision the Apex Court laid down eight conditions for attracting Sec.115 of the Evidence Act. The Apex Court in Gulam Abbas Vs. Haji Kayam Ali and Others, AIR 1973 SC 554 had occasion to consider a similar issue and it was held that in such circumstances, a person in the position of the plaintiff will be estopped under S.115 of the Evidence Act if the expectant heir receives consideration and so conducts himself as to mislead an owner in to not making dispositions of his property inter vivos the expectant heir can be debarred from setting up his right when it does unquestionably vest in him. The principle of estoppel operates in such cases. The said decision was followed by this Court in the decision reported in Damodaran Kavirajan and Others Vs. T.D. Rajappan, ILR 1992 (2) Ker. 105. In the said decision this Court held that the spes successionis right can be alienated by family arrangement. It was held that when the son gave up his right of inheritance for a consideration, namely, the immediate obtaining of certain properties towards his share will estop him from claiming rest of others properties. It was held that the principle of estoppal mentioned in Sec.115 of the Act will apply in cases where there is relinquishment of one of the party's right to inherit in future.

10. The recitals in Ext. A2 sale deed shows that the plaintiff asserts that she was having a share in the plaint schedule property and it was on making such a representation that she seem to have sold her share in the plaint schedule properties to the 6th defendant. By her act made to the 6th defendant, the 6th defendant acted upon the words and parted with the consideration demanded by the plaintiff and hence the plaintiff shall not be allowed to deny that representation on the faith of which the 6th defendant acted. Therefore, the plaintiff cannot now turn around and say that she has no transferable right at the time of transfer. In this case, the properties jointly belong to the plaintiff's father and Bavunni. They were in joint possession and enjoyment of the property. At that period, the plaintiff approached her father claiming money in lieu of her share. The plaintiff's father and 6th defendant and other family members finally decided to pay the share of the plaintiff in cash as demanded by her. In fact, she approached her father and Bavunni at a time she had planned to purchase one acre of property. Since the father was unable to part with the money demanded by the plaintiff, at the request of the father of the plaintiff, his brother, 6th defendant agreed to pay and paid the amount. One half of the amount was utilised by the plaintiff to purchase the property covered by Ext. B1 document. The balance amount was utilised for her personal needs. Long thereafter, she preferred the suit alleging that the 6th defendant exerted influence and coercion and as a result, she was forced to execute Ext. A2 sale deed. Since there was no attempt to prove the alleged exertion of influence and coercion, the Trial Court rightly held that there is absolutely no reason to believe that the will deed was executed under coercion. Applying the principles laid down by the Apex Court and this Court, the Trial Court held that the spes successions of the plaintiff had been assigned by Ext. A2 and when she succeeded her right to the plaint schedule property on the demise of her father she was estopped from dishonouring the earlier assignment which she made to the 6th defendant. The Trial Court held that even if she had no title at the time of assignment, still she has relinquished all her claims over the plaint schedule properties after receiving Rs.1,000/- as consideration for the sale. The Trial Court also held that the transfer so made was protected by the rule of estoppel when she succeeded to the share in the plaint schedule properties on the death of her father. The Court held that it is after 11 years the suit was filed and the averments do not disclose as to when the coercion or undue influence ceased so that she was forced to file the suit. The Court also held that the suit is barred by limitation since the same is filed beyond three years from the date of execution of Ext. A2 sale deed. The contentions raised by the appellant were devoid of any merit and therefore, no interference can be made in the appeal.

In the result, the appeal fails and accordingly, dismissed. No order as to costs.

 CR 

IN THE HIGH COURT OF KERALA AT ERNAKULAM 

PRESENT: THE HONOURABLE MR.JUSTICE V.RAMKUMAR & THE HONOURABLE MR.JUSTICE K.HARILAL 

TUESDAY, THE 31ST DAY OF JANUARY 2012/11TH MAGHA 1933 

AS.No. 481 of 1996 (B) 

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OS.139/1993 of SUB COURT, KASARAGOD 

APPELLANT(S): 

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Susheela 1. (Died), (daughter of Nambi Master,residing at Guthu House, Adkathbail Village, Post Kasaragod (LRs impleaded) 

2. Shankara , (S/o. Nambi Master residing -do-) Addl. 3 to 8 impleaded as LRs.as per order dated 7-7- 2008 in I.A. No. 2313 of 2008. Addl. 

A3: Padmavathi, D/o. of deceased Susheela -do- Addl. 

A4: Chandu, S/o. deceased Susheela -do- Addl. 

A5 : Savithri, D/o. deceased Susheela -do- Addl. 

A6: Nambi, S/o. deceased Susheela -do- Addl. 

A7: Rajeevi, S/o. deceased Susheela -do- Addl. 

A8: Suresh.A., , S/o. deceased Susheela -do- 

BY ADVS.M/s. M.C.SEN,PARVATHI A.MENON M.P.SREEKRISHNAN, SHAHNA KARTHIKEYAN & S.PRAKASH  

RESPONDENT(S): 

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T.M. Muhammedkunhi, S/o. Moidin Kunhi, residing at T.M. House, Guthur Road, Adakthbail Village, Kasaragod 

BY ADV. SRI.S.V.BALAKRISHNA IYER 

THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 31-01- 2012, THE COURT ON 31-01-2012 DELIVERED THE FOLLOWING: 

C.M.P. NOS. 3766/1997, 3063 of 1996, 1325 of 1997 3064 of 1996 in A.S. No. 481 of 1886 Closed Sd/- V.Ramkumar, Judge. Sd/- K. Harilal, Judge CR 

V. RAMKUMAR & K. HARILAL, JJ. 

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A.S. NO. 481 OF 1996 

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Head Note:-

Specific Relief Act, 1963 - Section 16 (c) - In a case where the plaintiff has already performed his part of the contract, there is no necessity to plead and prove readiness or willingness since nothing else remains to be done by the plaintiff. In such a case, the plaintiff need only plead and prove that he has performed his part of the contract.  

Specific Relief Act, 1963 - Section 16 (c) - Distinction between readiness to perform the contract and willingness to perform the contract - Readiness means the capacity of the plaintiff to perform the contract and it includes his financial ability to raise the money to pay the purchase price. Even if the plaintiff has the financial capacity to pay the purchase price and he thereby shows readiness to perform the contract, that need not necessarily mean that he is willing to perform his part of the contract. Unless he is also willing to perform his part of the contract, mere readiness to do so cannot be of no avail to him. He may, nevertheless be disqualified from seeking specific performance of the contract if he is really unwilling to buy the property although he may be ready to do so. 

Specific Relief Act, 1963 - Section16(c) is not an empty formality and readiness and willingness are to be proved right from the date of the contract till the date of the decree. In other words, the strict requirement of law is the continuous readiness and willingness. In the absence of a plea in the plaint regarding readiness and willingness no decree for specific performance can be granted to the plaintiff.  

Indian Contract Act, 1872 - Section 74 - Transfer of Property Act, 1882 - Section 55 - Earnest money paid by the vendee (purchaser, buyer) is part of the purchase price and is adjusted as such when the transaction goes forward; it is forfeited when the transaction falls through by reason of the fault or failure of the vendee. Earnest money is thus money paid in advance to bind a bargain and it represents a guarantee for the due performance of the contract. But an amount deposited by the vendor (seller) claiming as security for guaranteeing due performance of the contract and which is to stand forfeited in case the vendor neglects to perform his part of the contract cannot be regarded as earnest money. Forfeiture of a reasonable amount paid as earnest money under a contract does not amount to imposing a penalty so as to attract S.74 of the Indian Contract Act. But, if forfeiture is in the nature of penalty, then S.74 applies. Where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he has already paid to the party complaining of a breach of contract, such undertaking is in the nature of a penalty. Earnest money is thus a token or nominal payment made before hand by the buyer as a sign of good faith specifically as part of the purchase price to bind the seller.

Dated: 31st January, 2012 

J U D G M E N T 

Ramkumar,J. 

The two defendants in O.S. No. 139 of 1993 on the file of the Subordinate Judge's Court, Kasaragod, are the appellants in this first appeal. Pending the appeal the first appellant died and her legal representatives were impleaded as additional appellants 3 to 8. The aforesaid suit was one for specific performance of Ext.A1 agreement for sale dated 19-1-1993 of two items of immovable properties each admeasuring 12 cents belonging to the first and second defendants respectively. 

The plaintiff's case 

2. The case of the plaintiff can be summarised as follows:- The plaint schedule items 1 and 2 belong to defendants 1 and 2 respectively. As per Ext.A1 agreement for sale dated 19-1- 1993 the plaintiff agreed to purchase and the defendants agreed to sell the plaint schedule properties to the plaintiff for a total consideration of Rs. 1,45,000/-. The plaintiff paid Rs. 55,000/- on the date of the agreement itself and the defendants have acknowledged the same in Ext.A1 agreement. The defendants agreed to execute the sale deed by 21-4-1993. The balance consideration of Rs. 90,000/- was payable at the time of registration of the sale deed. Eventhough the date for executing the sale deed was fixed, time was not the essence of the contract. The plaintiff is ready and willing to perform his part of the contract. The plaintiff had made several requests through his son to handover the title deeds for getting the draft of the sale deed prepared . But the defendants did not come forward to execute the document. The plaintiff caused Ext.A2 registered notice dated 11-6-1993 to be sent to the defendants demanding execution of the sale deed. However, the defendants have in their reply dated 21-6-1993 raised false and frivolous contentions. The plaintiff is doing business in Calcutta and his son approached the defendants for obtaining the sale deed. The second defendant requested for a portion of the consideration amount. He was informed that the entire amount would be paid and the sale deed could be registered earlier. But the defendants were postponing the execution of the sale deed under some pretext or the other. The defendants sent Ext.A3 reply stating that Ext.A1 agreement was rescinded and that the defendants have entered into another agreement for purchase of property and they have suffered loss on account of the non-performance of the contract by the plaintiff. The defendants are liable to perform the contract and the plaintiff is entitled to get the sale deed executed and registered through Court. Hence, the suit. 

The defence 

3. The suit was resisted by the defendants who filed a joint written statement contending inter alia as follows:- The plaint has not been properly presented for want of a valid power of attorney. It is true that Ext.A1 agreement was entered into for sale of the plaint schedule property. But as per the agreement time was the essence of the contract and the plaintiff was liable to pay the balance amount of Rs. 90,000/- on or before 21-4-1993 at the time of registration. The plaintiff was never ready and willing to perform his part of the contract on or before the said date. Plaintiff never got the sale deed written up. He never offered to pay the balance amount as agreed. The sum of Rs. 55,000/- paid under Ext.A1 was in the form of earnest money which is not liable to be returned. There was no failure on the part of these defendants to execute and register the sale deed. Some photostat copies and some originals of the documents relating to the title of these defendants to the suit properties were handed over to the plaintiff even at the time of Ext.A1 agreement. Hence, the plaintiff's contention that he could not prepare the draft sale deed is not correct. Believing in good faith that the plaintiff would honour the terms of Ext.A1 agreement, the second defendant had entered into Ext.B1 agreement dated 14-02-1993 with one Thimmappu for purchase of an item of property and paid an earnest money of Rs. 20,000/- to the said Thimmappu. The undertaking was that the second defendant would pay the balance amount of Rs. 40,000/- to Thimmappu on or before 14-5-1993 in the hope that the plaintiff would comply with the terms of Ext.A1 agreement. Since the plaintiff failed to pay the balance amount as promised the second defendant could not comply with the terms of Ext.B1 agreement and suffered a loss of Rs. 20,000/-. The whereabouts of the plaintiff were not known after Ext.A1 agreement and, therefore, these defendants approached the son of the plaintiff, but in vain. Finally these defendants repudiated the contract by issuing Ext.B2 registered notice dated 29-05- 1993. The notice sent on behalf of the plaintiff was not as per the directions of the plaintiff. These defendants were ready and willing to perform their part of the contract on or before 21-4-1993 as per the terms of the agreement. Since the plaintiff did not come forward, these defendants were constrained to repudiate the contract. The plaintiff who was not ready and willing to perform his part of the contract is not entitled to seek specific performance. He is also not entitled to get back Rs. 55,000/- paid as earnest money. The suit is, therefore, to be dismissed. 

The trial 

4. The court below framed six issues for trial. On the side of the plaintiff he examined himself as P.W.1 and got marked four documents as Exts.A1 to A4. On the side of the defendants the second defendant was examined as D.W.1 and Exts. B1 to B4 were marked. 

The trial Court's decree 

5. The learned Subordinate Judge, after trial, as per judgment and decree dated 24-6-1996 held that time was not the essence of the contract under Ext.A1, that the original title deeds were not handed over by the defendants to the plaintiff so as to enable him to prepare the draft sale deed, that the second defendant did not send any notice calling upon the plaintiff to execute the sale deed and pay the balance consideration, that the evidence of the plaintiff examined as P.W. 1 shows that he was always ready and willing to perform his part of the contract although he had no sufficient cash with him, that there was no provocation from the side of the plaintiff for the defendants to rescind the contract and that the defendants have not proved that they have sustained any loss under Ext.B1 agreement. The suit was accordingly, decreed directing the defendants to execute and register the sale deed in favour of the plaintiff within two months and put the plaintiff in possession of the plaint schedule properties upon the plaintiff depositing the balance consideration of Rs. 90,000/- in Court within one month and in the event of failure by the defendants to do so the plaintiff could obtain the sale deed executed through court. It is the said decree which is assailed in this appeal by the defendants. 

THIS APPEAL 

6. We heard Advocate Smt. Shahana Karthikeyan, the learned counsel who argued the case on behalf of the appellants and Senior Advocate Sri. Balakrishna Iyer, the learned counsel appearing for the respondent/plaintiff. 

THE ARGUMENT OF THE PLAINTIFF/RESPONDENT 

7. Senior Advocate Sri. Balakrishna Iyer appearing for the respondent/plaintiff made the following submissions before us opposing the appeal:- This is a case in which the defendants did not make available to the plaintiff the original title deeds so as to enable the plaintiff to prepare the draft sale deed. Eventhough a date was fixed under Ext.A1 for executing the sale deed, from that alone it cannot be concluded that time was the essence of the contract. The plaintiff had paid Rs. 55,000/- on the date of Ext.A1. The balance amount of Rs. 90,000/- was payable at the time of registration. In the case of contract for sale of immovable property the ordinary presumption is that time is not the essence of contract. (See Gomathinayagam Pillai and Others v. Palaniswami Nadar - AIR 1967 SC 868). In paragraph 6 of the plaint the plaintiff has averred that he is ready and willing to perform his part of the contract. There is no ground taken in the memorandum of appeal to the effect that there is no averment in the plaint in terms of Sec. 16 (c ) of the Specific Relief Act, 1963. The second defendant examined as D.W.1 has deposed that he discussed several times with the plaintiff's son who offered the balance amount. The requirement of law under Sec. 16 ( c) of the Specific Relief Act should not be stretched to illogical levels. The necessary averment in the plaint cannot be subjected to such meticulous scrutiny as to find out whether the exact words used in Section 16 (c ) have been literally and faithfully incorporated. It is enough if the "pith and substance" of the words used by the legislature have been pleaded (Vide Motilal Jain v. Ramdasi Devi and Others - AIR 2000 SC 2408 and paragraph 9 of Sayed Dastagir v. Gopalakrishna Setty - AIR 1999 SC 3029). In paragraph 9 of Ouseph Varghese v. Joseph Aley and Others - (1969) 2 SCC 539 ; in paragraph 5 of Prem Raj v. D.L.F. Housing and Construction (Private) Ltd. - AIR 1968 SC 1355 and in Pandurang Ganpat Tanawade v. Ganapat Bhairu Kadam and Others - AIR 1997 SC 463 the suits for specific performance were decreed in cases where the averment was that the plaintiff is ready and willing to perform his part of the contract. Ext. A1 agreement is dated 19-1-1993. The suit notice was issued on 11-6-1993. The suit itself was filed on 28-07-1993 without waiting for the last day of limitation. In such a case the readiness and willingness of the plaintiff can be inferred. Ext.B2 repudiation notice dated 29-5-1993, although issued prior to Ext.A2 notice sent by the plaintiff, was delivered on the plaintiff at Calcutta only on 14-6- 1993. Hence, the defendants cannot blame the plaintiff for any non-performance. The trial Court has decreed the suit for specific performance after a careful evaluation of all the facts and circumstances of the case and the judgment and decree of the court below do not warrant any interference. 

JUDICIAL EVALUATION 

8. We are afraid that we find ourselves unable to agree with the above submissions made on behalf of the plaintiff- respondent. 

THE PROVED FACTS 

9. Before discussing the legal principles which should govern cases of this nature we propose to delve into the factual matrix of this case in the chronological order:- 

19-01-1993 - Defendants 1 and 2 who are the appellants herein are sister and a brother. They are the owners of plaint schedule item Nos. 1 and 2 altogether admeasuring 24 cents of garden land lying contiguously and comprised in Re-survey 49/1A of Adukkathbail village in Kasaragod Taluk. There is also a residential house therein. The appellants agreed to sell the said properties including the residential house to the plaintiff as per Ext.A1 agreement. The total sale consideration fixed was Rs. 1,45,000/-. Rs. 55,000/- was paid by the plaintiff as earnest money. The sale deed was to be executed on or before 21-4-1993 on which day the balance amount of Rs. 90,000/- was to be paid by the plaintiff to the defendants who would thereupon execute the sale deed in favour of the plaintiff. 

14-02-1993 - The second defendant entered into Ext.B1 agreement with one Thimmappu for purchase of an item of immovable property for a total consideration of Rs. 60,000/-. A sum of Rs. 20,000/- was paid as earnest money to the said Thimmappu. The balance amount of Rs. 40,000/- was to be paid by the second defendant to the said Thimmappu on or before 14-5-1993 on which day the said Thimmappu would execute the sale deed in favour of the 2nd defendant. 

28-03-1993 - The plaintiff (who was examined in the case as P.W.1) went back to Calcutta in connection with his business. 

21-04-1993 - Pursuant to Ext.A1 agreement the balance amount of Rs. 90,000/- was to be paid on 21-4-1993 by the plaintiff to the defendants who would thereupon execute the sale deed in favour of the plaintiff. 

14-05-1993 - Was the last date for the second defendant to pay the balance amount to Thimmappu under Ext.B1 agreement. This was entered into by D2 in the legitimate expectation that the plaintiff herein would by them make available the balance amount of Rs. 90,000/- under Ext.A1 agreement. 

29-05-1993 - The defendants sent Ext. B2 lawyer notice to the plaintiff repudiating Ext.A1 agreement alleging that the plaintiff did not pay or make available the balance sale consideration as agreed (Ext. B2 notice sent to the plaintiff in his Kasaragod address was re-directed to his Calcutta address and received by the plaintiff on 14-6-1993). 

11/06/1993 - The plaintiff sent Ext.A2 lawyer notice to the defendants demanding specific performance of Ext.A1 agreement. 

14-07-1993 - The plaintiff executed Ext.A4 power-of-attorney from Calcutta authorising his son to institute the present suit. 

28-07-1993 - The present suit was filed. 

There is no dispute that until 29-05-1993 when the defendants sent Ext. B2 repudiation notice, the plaintiff did not send any notice to the defendants accusing them of any default. The plaintiff examined as P.W. 1 has admitted that both before and after Ext. A1 agreement, he was in Calcutta in connection with his business and it was his son Subair who was looking after his affairs in Kasaragod. In Ext.A2 lawyer notice the plaintiff has no allegation that the failure on his part to pay the balance consideration and prepare the sale deed was on account of the failure on the part of the defendants to hand over the prior title deeds. The defendants have specifically averred in paragraph 6 of the written statement that some of the original documents of title and photocopies of some of the documents were given to the plaintiff at the time of Ext.A1 agreement itself. That is presumably the reason why Ext.A1 does not contain any clause obliging the defendants to handover the prior title deeds to the plaintiff before executing the original deed of conveyance. Under Section 55 (1) (b) of the Transfer of Property Act, 1882 the obligation of the seller to produce the documents of title for the examination of the buyer, is only on the request of the buyer. The plaintiff has no case that he had made any request in that behalf. Eventhough P.W.1 during his cross-examination denied having received the prior title deeds at the time of Ext.A1, the fact remains that he had never sent any notice to the defendants accusing them of not furnishing the prior title deeds . Even in Ext.A2 lawyer notice there is no such allegation that the defendants committed default in making available the prior title deeds. The plaintiff examined as P.W.1 confessed that it was after coming to know of Ext.B2 repudiation notice sent by the defendants that he caused Ext.A2 lawyer notice to be sent to the defendants. It is pertinent to note that Ext.A1 property contains a residential house. The second defendant examined as DW1 has credibly deposed before Court it was for constructing a house that he entered into Ext.B1 agreement with one Thimaappu expecting that the plaintiff would by then pay the balance consideration as agreed. DW1 has further stated that he had asked the plaintiff before the latter went to Calcutta and thereafter approached the plaintiff's son to pay the balance sale consideration and take the sale deed but there was no favourable response. According to DW1 he lost Rs. 20,000/- paid as advance under Ext.B1 agreement with Thimmappu since he was unable to pay the balance sale consideration to Thimmappu within time as agreed. We have no reason to assume that Ext.B1 agreement for sale with Thimmappu was a "make believe". The trial Judge who held that there is nothing to show that the defendants suffered any loss on account of the failure on the part of the plaintiff to pay the balance sale consideration within the stipulated time, was really glossing over the evidence on record. The cat was out of the bag when P.W.1 made a clean breast from the witness box that in March 1993 he had only Rs. 40,000/- in cash being the total collection from his business and he had no other cash amount in his old bank account . Thus, at a time when he had the obligation to pay Rs. 90,000/- to the defendants as on 21-4- 1993, P.W.1 had only Rs. 40,000/- in cash with him and he had no other cash amount with him then. It is such a person who claims that his readiness and willingness to perform his part of the contract should be inferred and that time was not the essence of contract under Ext.A1 agreement. 

Whether time is the essence of contract ? The old conservative view when prices were stable and inflation was unknown 

10. The law relating to the question as to whether a specified time fixed by the parties for the performance of the obligations under a contract is the essence of such contract and the consequence of not adhering to such specified time, is to be found in Sec. 55 of the Indian Contract Act, 1872. The said Section reads as follows:- 

"55. Effect of failure to perform at a fixed time, in contract in which time is essential:- When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before a specified time, and fails to do such thing at or before a specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of essence of the contract. 

Effect of such failure when time is not essential:- If it was not the intention of the parties that time should be of the essence of contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. 

Effect of acceptance of performance at time other than agreed upon:- If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of acceptance, he gives notice to the promisor of his intention to do so". 

The above provision does not explicitly say that in the case of sale of immovable property, time should never be regarded as the essence of contract or that there is a presumption against time being the essence of the contract . However, the Privy Council as well as the Courts in India have forged a principle on the same lines as were prevalent in England pursuant to Roberts v. Berry (1853) 3 DeG.M & G - 284; Tilley v. Thomas (1867) 3 Ch A 61 etc. (See Jamshed Kodaram Irani v. Burjorji Dhunjibhai - AIR 1915 P.C. 83). Following the above principles obtained under the law of England, the Supreme Court in Gomathinayagam Pillai v. Palaniswami Nadar - AIR 1967 SC 868 observed as follows:- 

"It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing, must be in language which is unmistakable; it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence". In Jamshed Kodaram Irani v. Burjorji Dhunjibhai, ILR 40 Bom. 289; (AIR 1915 PC 83) the Judicial Committee of the Privy Council observed that the principle underlying S. 55 of the Contract Act did not differ from those which obtained under the law of England as regards contracts for sale of land". 

Applying the principles to the facts before it the Apex Court stated thus:- 

"Fixation of the period within which the contract is to be performed does not make the stipulation as to time of the essence of the contract. It is true that appellants 1 and 2 were badly in need of money, but they had secured Rs. 3006 from the respondent and had presumably tide over their difficulties at least temporarily There is no evidence that when the respondent did not advance the full consideration they made other arrangements for securing funds for their immediate needs. Intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulations as to time are not of the essence. In the present case there is no express stipulation, and the circumstances are not such as to indicate that it was the intention of the parties that time was intended to be of the essence of the contract. It is true that even if time was not originally of the essence, the appellants could by notice served upon the respondent call upon him to take the conveyance within the time fixed and intimate that in default of compliance with the requisition the contract will be treated as cancelled. As observed in Stickney v. Keeble, 1915 AC 386 where in a contract for the sale of land the time fixed for completion is not made of the essence of the contract, but the vendor has been guilty of unnecessary delay, the purchaser may serve upon the vendor a notice limiting a time at the expiration of which he will treat the contract as at an end". 

In Govind Prasad Chaturvedi v. Hari Dutt Shastri - AIR 1977 SC 1005 a three Judges' Bench of the Supreme Court observed as follows:- 

"It is settled law that the fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. When a contract relates to sale of immovable property it will normally be presumed that the time is not the essence of the contract. (Vide Gomathinayagam Pillai v. Palaniswami Nadar, 1967 - 1 SCR 227 at page 233 = AIR 1967 SC 868 at p. 871. It may also be mentioned that the language used in the agreement is not such as to indicate in unmistakable terms that the time is of the essence of the contract. The intention to treat time as the essence of the contract may be evidenced by circumstances which are sufficiently strong to displace the normal presumption that in a contract of sale of land stipulation as to time is not the essence of the contract". 

Again in Smt. Indira Kaur v. Shri. Sheo Lal Kapur - AIR 1988 SC 1074 it was held thus:- 

" The law is well-settled that in transactions of sale of immovable properties, time is not the essence of the Contract". 

The position was re-examined by a Constitution Bench of the Supreme Court in Chand Rani v. Kamal Rani - AIR 1993 SC 1743 = (1993) 1 SCC 519 where it was observed as follows:- 

"It is well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language. The Constitution Bench then concluded as follows:-  

"25. From an analysis of the above case-law it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are:-  

1. From the express terms of the contract;  

2. from the nature of the property; and  

3. from the surrounding circumstances, for example; the object of making the contract" 

Time for a re-thinking of the above principle 

11. In all cases where parties stipulated a particular period or date within which the contract was to be performed, courts were punctiliously applying the above principle to hold that time was not the essence of the contract regardless of the soaring prices of land. The above principle could hold good during times when the land prices were steady and there was no inflation. But situations have changed with the escalation of land prices and consequently it is high time that we applied revised standards. The steep rise in the price of oil following the 1973 Arab - Israeli war had set in inflationary trends all over the world. Those trends were visible in countries like India which meet bulk of their requirement of oil by importing the same from the Gulf countries. This led to the gradual re-visiting of the above principle. In K.S. Vidyanadam v. Vairavan - AIR 1997 SC 1751; Jeevan Reddi - J., who was a member of the Constitution Bench in Chand Rani's Case (supra), speaking for the Bench observed as follows:- 

"10. It has been consistently held by the Courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity ? It would also mean denying the discretion vested in the Court by both Sections 10 and 20.  As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani (1993) 1 SCC 519; (1993 AIR SCW 1371), " it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time of the conditions are (evident ?) (10 from the express terms of the contract ; (2) from the nature of the property and (3) from the surrounding circumstances, for example, the object of making the contract". In other words, the Court should look at all the relevant circumstances including the time limits(s) specified in he agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades - particularly after 1973". 

Dealing with the argument that mere rise in prices of land was no ground for denying specific performance the learned Judge observed as follows:- 

"11. Sri. Sivasubrahmanium cited the decision of the Madras High Court in S.V. Sankaraninga Nadar v. P.T.S. Ratnaswamy Nadar, AIR 1952 Mad. 389 holding that mere rise in prices is no ground for denying the specific performance. With great respect, we are unable to agree if the said decision is understood as saying that the said factor is not at all to be taken into account while exercising the discretion vested in the court by law. We cannot be oblivious to the reality - and the reality is constant and continuous rise in the values of urban properties - fuelled by larger-scale migration of people from rural areas to urban centres and by inflation". 

Taking note of the instability in the prices of land and inflationary trends, the Bench concluded as follows:- 

"we are inclined to think that the rigor of the rule evolved by Courts that time is not of the essence of the contract in the case of immovable properties - evolved in times when prices and values were stable and inflation was unknown - requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so". 

Finally, the Bench in K.S. Vidyanadam evolved the following guidelines:- 

i) Courts, while exercising discretion in suits for specific performance, should bear in mind that when the parties prescribe a time/period, for taking certain steps or for completion of the transaction, that must have some significance and, therefore, time/period prescribed cannot be ignored. 

ii) Courts will apply greater scrutiny and strictness when considering whether the purchaser was "ready and willing" to perform his part of the contract. 

iii) Every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring the time-limits stipulated in the agreement. Courts will also 'frown' upon suits which are not filed immediately after the breach/refusal. The fact that limitation is three years does not mean a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The three year period is intended to assist purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in part performance,w here equity shifts in favour of the purchaser". 

The need for a re-look of the old principle has again been stressed in a recent decision of the Supreme Court in Saradamani Kandappan v. S. Rajalekshmi - AIR 2011 SC 3234:- 

24. The principle that time is not of the essence of contracts relating to immovable properties took shape in an era when market value of immovable properties were stable and did not undergo any marked change even over a few years (followed mechanically, even when value ceased to be stable). As a consequence, time for performance, stipulated in the agreement was assumed to be not material, or at all events considered as merely indicating the reasonable period within which contract should be performed. the assumption was that grant of specific performance would not prejudice the vendor- defendant financially as there would not be much difference in the market value of the property even if the contract was performed after a few months. This principle made sense during the first half of the twentieth century, when there was comparatively very little inflation, in India. The third quarter of the twentieth century aw a very slow but steady increase in prices. But a drastic change occurred from the beginning of the last quarter of the twentieth century. There has been a galloping inflation and prices of immovable properties have increased steeply, by leaps and bounds. Market values of properties are no longer stable or steady. We can take judicial notice of the comparative purchase power of a rupee in the year 1975 and now, as also the steep increase in the value of the immovable properties between then and now. It is no exaggeration to say that properties in cities, worth a lakh or so in or about 1975 to 1980, may cost a crore or more now.  

25 . The reality arising from this economic change cannot continue to be ignored in deciding cases relating to specific performance. The steep increase in prices is a circumstance which makes it inequitable to grant the relief of specific performance where the purchaser does not take steps to complete the sale within the agreed period, and the vendor has not been responsible for any delay or non-performance. A purchaser can no longer take shelter under the principle that time is not of essence in performance of contracts relating to immovable property, to cover his delays, laches, breaches and 'non- readiness'. The precedents from an era when high inflation was unknown, holding that time is not of the essence of the contract in regard to immovable properties, may no longer apply, not because the principle laid down therein is unsound or erroneous, but the circumstances that existed when the said principle was evolved, no longer exist. In these days of galloping increases in prices of immovable properties, to hold that a vendor who took an earnest money of say about 10% of the sale price and agreed for three months or four months as the period for performance, did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice. Adding to the misery is the delay in disposal of cases relating to specific performance, as suits and appeals therefrom routinely take two to three decades to attain finality. As a result, an owner agreeing to sell a property for Rs. one lakh and received Rs. ten thousand as advance may be required to execute a sale deed a quarter century later by receiving the remaining Rs. Ninety Thousand, when the property value has risen to a crore of rupees". 

12. Eventhough as per Article 54 of the Limitation Act, 1963 the period of limitation for instituting a suit for specific performance is three years, when the parties to the contract have consciously fixed a lesser period for performance of the contract, there is no reason why the said period is not honoured by the parties. That was precisely what K.S. Vidhyanadam (supra) emphasised and approvingly followed in Saradamani Kandappan (supra). We cannot also ignore the offer of Rs. 9,60,000/- (Rupees nine lakhs sixty thousand only) made on behalf of the plaintiff to the appellants during the settlement talks pending this appeal and the disinclination of the appellants to accept the same . This tells upon the galloping of the land prices during this long 19 years. It will thus be grossly inequitable to hold that now after 19 years of the agreement the appellants/defendants should be compelled to perform their obligations under Ext.A1 on the ground that time was not the essence of the contract. 

DOES ABSENCE OF READINESS AND WILLINGNESS OPERATE AS A PERSONAL BAR TO RELIEF? 

13. Section 16 of the Specific Relief Act, 1963 enumerates three situations which operate as personal bars to the relief of specific performance of a contract . Section 16 reads as follows:- 

"16. Personal bars to relief:- Specific performance of a contract cannot be enforced in favour of a person - 

(a) who would not be entitled to recover compensation for its breach; or 

(b) who has become incapable of performing, or violates any essential term of the contract that on his part remains to be performed, or acts in fraud of the contract, or willfully acts at variance with, or in subversion of, th relation intended to be established by the contract, or 

(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. 

Explanation - For the purposes of C1 (c )- 

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court; 

(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction". 

We are in this case concerned only with clause (c ) of Section 16 of the specific Relief Act. In the written statement the appellants had specifically contended that the plaintiff was not ready and willing to perform his part of the contract. The argument on behalf of the respondent that no specific ground is taken in the memorandum of appeal regarding non-compliance of Sec. 16 ( c) of the Specific Relief Act, is not fully correct. Ground No. 11 of the Memorandum of Appeal says that the lower court ought to have dismissed the suit in the absence of an offer in the plaint to pay the balance consideration and in the absence of pleading showing readiness and willingness to perform the contract. Even otherwise, non-compliance of Sec. 16 (c ) of the Act is a pure question of law operating as a statutory interdict against the Court granting a decree for specific performance of a contract. It is well settled that a pure question of law can be raised for the first time even in a Court of last resort. (See Yeswant Deo Rao Deshmukh v. Wallchand Ramchand Kothari - AIR 1951 SC 16; Babri Prasad & Others v. Nagarmal and Others - AIR 1959 SC 599; Tharinikamal v. Perfulla Kumar - AIR 1979 SC 1165; The State of U.P. v. Shri Anand Swarup - AIR 1974 SC 125 and T.G. Appanda Mudliyar v. State of Madras - AIR 1976 SC 2450). 

14. Clause (c ) of Sec. 16 lays down a condition precedent to the enforcement of specific performance of a contract failing which it operates as a bar to the relief of specific performance to the plaintiff. The said condition is that the plaintiff must aver and prove that --- i) he has performed , or ii) he has always been ready and willing to perform, the essential terms of the contract which are to be performed by him. In a case where the plaintiff has already performed his part of the contract, there is no necessity to plead and prove readiness or willingness since nothing else remains to be done by the plaintiff . In such a case, the plaintiff need only plead and prove that he has performed his part of the contract . But in a case, as the present one, where the plaintiff has not performed either wholly or in part, his part of the contract, then the above provision obliges him to plead and prove that he has always been ready and willing to perform his part of the contract. Any omission either to plead or to prove the above aspect will be fatal to the plaintiff who stands the sure chance of being non-suited with regard to his claim for specific performance of the contract. 

Distinction between readiness and willingness 

15. A distinction may be drawn between readiness to perform the contract and willingness to perform the contract. Readiness means the capacity of the plaintiff to perform the contract and it includes his financial ability to raise the money to pay the purchase price . Even if the plaintiff has the financial capacity to pay the purchase price and he thereby shows readiness to perform the contract, that need not necessarily mean that he is willing to perform his part of the contract. Unless he is also willing to perform his part of the contract, mere readiness to do so cannot be of no avail to him. He may, nevertheless be disqualified from seeking specific performance of the contract if he is really unwilling to buy the property although he may be ready to do so. (See Raj Rani Bhasin (Smt. ) v. S. Kartar Singh Mehta - AIR 1975 Delhi 137). 

Consequence of failure to plead or prove readiness or willingness 

16. Courts have been very strict regarding this requirement of Sec. 16 (c ) of the Specific Relief Act which provision has been couched in negative terms. Section 16 (c ) is not an empty formality and readiness and willingness are to be proved right from the date of the contract till the date of the decree. In other words, the strict requirement of law is the continuous readiness and willingness. (See Ardeshir H Mama v. Flora Sassoon - AIR 1928 P.C. 208 ; Jugraj Singh and Another v. Labh Singh and Others - AIR 1995 SC 945; Kochappu v. Somasundaram Chettiar -1991 (1) KLJ 525; P.G. Sinha v. K.C. Chattterjee - AIR 1991 Calcutta 327). In the absence of a plea in the plaint regarding readiness and willingness no decree for specific performance can be granted to the plaintiff. (Prabhakaran v. Bhavani and Others - 1974 KLT 115 = AIR 1974 Kerala 153). In a suit for specific performance of a contract it is necessary for the purchaser to show that he was ready and willing to fulfill the terms of the agreement, that he had not abandoned the contract and that he had kept the contract subsisting . This burden is upon the purchaser. (Swarnam Ramachandran v. Aravacode Chakungal Jayapala -(2004) 8 SCC 689). A plea in the plaint by itself is not sufficient. There should also be proof of readiness and willingness. (Pushparani S. Sundaram and Others v. Pauline Manomani James - (2002) 9 SCC 582). 

In the present case the only averment in this connection made in paragraph 6 of the plaint is as follows:-

"The plaintiff is ready and willing to perform his part of the contract". 

The above averment at best would only indicate that the plaintiff was ready and willing to perform his part of the contract on 28-7-1993 when he instituted the suit. It does not show that he has been ready and willing to perform his part of the contract during the currency of the contract namely for the period from 19-01-1993 to 21-04-1993. There is thus, total lack of pleading to the effect that the plaintiff has been ready and willing to perform his part of the contract from 19- 01-1993 till at least the date of filing the suit. It has already been seen that the plaintiff, as a matter of fact, was not ready and willing to perform his part of the contract and the cash amount in his possession in March 1993 was only Rs. 40,000/- (Rupees forty lakhs only) as against the required amount of Rs. 90,000/- (Rupees ninety thousand only). Even the trial court, on evidence, held that the plaintiff was not having sufficient cash with him but came to the strange conclusion that the plaintiff was ready and willing to perform his part of the contract. The said conclusion was one which no court well instructed in law could reach. At no point of time during the subsistence of Ext. A1 contract had the plaintiff called upon the defendants by a notice to receive the balance sale consideration and to execute the sale deed. The plaintiff has thus failed to discharge the statutory obligation on him to prove that he was ready and willing to perform his part of the contract. Hence, this is a case where the plaintiff was not only not ready and willing to perform his part of the contract but has also failed to plead the same in the plaint as enjoined by law. For that reason also the suit is liable to be dismissed. 

"MEANING OF 'EARNEST MONEY" 

17. Earnest money paid by the vendee (purchaser, buyer) is part of the purchase price and is adjusted as such when the transaction goes forward; it is forfeited when the transaction falls through by reason of the fault or failure of the vendee. Earnest money is thus money paid in advance to bind a bargain and it represents a guarantee for the due performance of the contract. But an amount deposited by the vendor (seller) claiming as security for guaranteeing due performance of the contract and which is to stand forfeited in case the vendor neglects to perform his part of the contract cannot be regarded as earnest money. Forfeiture of a reasonable amount paid as earnest money under a contract does not amount to imposing a penalty so as to attract section 74 of the Indian Contract Act. (Vide Chiranjit Singh v. har Swarup - AIR 1926 PC 1; Maula Bux v. Union of India - AIR 1970 S.C. 1955 (3 Judges); Delhi Development Authority v. Grihasthapana Co-operative Group Housing Society Ltd.- AIR 1995 SC 1176, 1312; In the matter of HUDA v/s. Kewal Kishan Geol - AIR 1996 SC 1981). But, if forfeiture is in the nature of penalty, then Sec. 74 applies. Where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he has already paid to the party complaining of a breach of contract, such undertaking is in the nature of a penalty. (See Maula Bux (supra). Earnest money is thus a token or nominal payment made before hand by the buyer as a sign of good faith specifically as part of the purchase price to bind the seller. 

18. The question, therefore, is whether the sum of Rs. 55,000/- paid by the plaintiff to the defendants under Ext.A1 agreement for sale and described therein as "earnest money" is liable to be forfeited if the plaintiff is found guilty of breach of Ext.A1 contract. A reading of Ext.A1 shows that eventhough the said amount of Rs. 55,000/- is described as "earnest money" it is only paid by way of part payment, the total consideration being Rs. 1,45,000/- and Ext.A1 further recites that the balance amount payable by the plaintiff on or before the date fixed for executing the sale deed is Rs. 90,000/-. There is no provision in Ext.A1 enabling the defendants to forfeit the earnest money in the event of any breach committed by the plaintiff. On the contrary, Ext.A1 recites that if the plaintiff does not pay the balance sale consideration to the defendants before the date stipulated in the agreement and thereby fails to get the sale deed executed by the defendants, the plaintiff shall be liable for all the losses and expenses incurred by the defendants. If so, the sum of Rs. 55,000/- paid under Ext.A1 was only advance amount liable to be returned to the plaintiff in case the agreement fell through but of course, after deducting the loss sustained by the defendants. 

OUR CONCLUSION 

19. The result of the following discussion is that the findings recorded by the court below that time was not the essence of the contract and that the plaintiff has succeeded in pleading and proving that he was ready and willing to perform his part of the contract, are unsustainable and are, accordingly, dislodged. The relief of specific performance of Ext.A1 agreement will stand disallowed and the suit will stand dismissed. But the defendants who had admittedly received Rs. 55,000/- by way of earnest money are bound to return the same after deducting the loss sustained by them. We see no reason to disbelieve DW1 who has given evidence in support of the averment in the written statement that due to the failure on the side of the plaintiff to fulfill his part of the contract the defendants sustained a loss of Rs. 20,000/- paid as advance under Ext.B1 agreement. The defendants/appellants shall therefore return the balance amount of Rs. 35,000/- (Rupees thirty five thousand only) with interest due thereon at the rate of 6% per annum from 19-01-1993 till realisation. The appellants shall deposit the said amount of Rs. 35,000/- (Rupees thirty five thousand only) and the interest thereon before the trial Court within two months from today failing which the plaintiff will be entitled to recover the same from the appellants by executing this decree. 

In the result, this appeal is allowed in part as above refusing the relief of specific performance to the plaintiff but directing the appellants to return to the plaintiff Rs. 35,000/- (Rupees thirty five thousand only) with 6% interest thereon as above. Having regard to the facts and circumstances of the case parties shall bear their respective costs in this appeal. 

Dated this the 31st day of January, 2012. 

Sd/- V. RAMKUMAR, JUDGE. Sd/-K.HARILAL, JUDGE 

/true copy/ P.S. to Judge ani/ 

 IN THE HIGH COURT OF KERALA AT ERNAKULAM 

PRESENT: THE HONOURABLE MR.JUSTICE K.M.JOSEPH & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE 

TUESDAY, THE 7TH DAY OF FEBRUARY 2012/18TH MAGHA 1933 

AS.No. 263 of 2001 (E) 

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OS.366/1997 of II ADDL.DISTRICT COURT,ERNAKULAM 

APPELLANT/PLAINTIFF: 

------------ 

KOCHU THRESIA ALIAS VIMALA, W/O JOSEPH, NADUVATHEZHATHU HOUSE, ELOOR EAST VILLAGE, PARAVOOR TALUK. 

BY ADVS.SRI.T.V.ANANTHAN SRI.C.D.JOSE SRI.M.K.ABOOBACKER 

RESPONDENTS/DEFENDANTS 

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1. MR.K.G.JOSEPH, S/O LATE K.A.GEORGE, ERNAKULAM IVORY ART EMPORIUM, BROADWAY, ERNAKULAM, RESIDING AT KATTIPARAMBIL HOUSE, NO.XLII/1492, MARKET ROAD, ERNAKULAM, KANAYANNUR TALUK. 

*2. MR.K.G.MANUEL, S/O.LATE K.A.GEORGE, ERNAKULAM IVORY ART EMPORIUM, BROADWAY, ERNAKULAM, RESIDING AT KATTIPARAMBIL HOUSE, NO.XLII/1110, POWER HOUSE ROAD, PANAKKAPPADAM, ERNAKULAM, KANAYANNUR TALUK. *2ND RESPONDENT DIED 

3. MR.K.G.ELIAS, S/O LATE K.A.GEORGE, ERNAKULAM IVORY ART EMPORIUM, BROADWAY, ERNAKULAM, RESIDING AT KATTIPARAMBIL HOUSE, NO.XLII/1110, PANAKKAPPADAM, POWER HOUSE ROAD ERNAKULAM, KANAYANNUR TALUK. 

ADDL.R4 MRS.MARY @ SHINY MANUEL, AGED ABOUT 40 YEARS, W/O.LATE K.G.MANUEL, RESIDING AT RESIDING AT KATTIPARAMBIL HOUSE, NO.XLII/1115, PANAKKAPPADAM, POWER HOUSE ROAD, ERNAKULAM, KANAYANNUR TALUK. 

ADDL.R5 MANUEL GEORGE, AGED ABOUT 16 (MINOR) -- DO -- (REPRESENTED BY MOTHER AND GUARDIAN 4TH RESPONDENTS MRS.MARY @ SHINY MANUEL) 

ADDL.R6 MINNU MARIA, AGED ABOUT 11 (MINOR) D/O.LATE K.G.MANUEL, -- DO -- (REPRESENTED BY MOTHER AND GUARDIAN 4TH RESPONDENT MRS.MARY @ SHINY MANUEL) 

LEGAL REPRESENTATIVES OF THE DECEASED 2ND RESPONDENT ARE IMPLEADED AS ADDL.RESPONDENTS 4 TO 6 AS PER ORDER DATED 5/8/2008 IN I.A.No.281/2008 AND THE ADDL.4TH RESPONDENT IS APPOINTED AS THE GUARDIAN OF RESPONDENTS 5 AND 6 WHO ARE MINORS AS PER ORDER DATED 5/8/2008 IN I.A.283/08. 

R,CAVEATOR BY SRI.N.SUBRAMANIAM R,R4 TO R6 BY SRI.SOORAJ T.ELENJICKAL R,R4 TO R6 BY SRI.M.A.JOSEPH MANAVALAN R, BY SMT.BINDU GEORGE,MEDIATOR R, BY SRI.N.ANIL KUMAR,COMMISSINER R, BY SMT.P.A.SULEKHA R,R1 & R2 BY SRI.SIBY MATHEW R,R1 & R2 BY SRI.A.A.MOHAMMED NAZIR 

THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 07-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 

K.M.JOSEPH & A.M.SHAFFIQUE, JJ. 

* * * * * * * * * * * * * 

A.S.No.263 of 2001 

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Dated this the 7th day of February 2012

Head Note:-

Succession Act, 1925 - Section 63 - Evidence Act, 1872 - Sections 67 and 68 - Suit for Partition - will -  suspicious circumstance - Explained.

J U D G M E N T 

A.M.SHAFFIQUE,J 

Appellant is the plaintiff in a suit for partition. Suit was dismissed by the trial court on a finding that the plaint schedule properties were not partible, since the properties were bequeathed in the name of defendants by virtue of Exts.B1 and B2 wills executed by the testators. The appellant challenges the judgment on the ground that the suspicious circumstances pointed out by the appellant in execution of the will has not been explained by the defendants and therefore the trial court erred in dismissing the suit. 

2. The appellant/plaintiff is the daughter and respondents/defendants are the sons of George and Karmali. George died on 16/08/1996 and Karmali died on 25/09/1996. On their death, plaintiff claimed share in the plaint schedule properties and when the defendants did not accede to the demand, the suit is filed. The defendants inter alia contended that George and Karmali had executed Exts.B1 and B2 wills and therefore the plaintiff is not entitled for partition of the said properties. 

3. The plaintiff filed a reply disputing the genuineness of the wills and further alleging that the wills were falsely fabricated documents and that her parents were not mentally and physically capable of executing the wills. 

4. The suit was originally decreed and thereafter, by judgment dated 8/2/2000 in A.S.No.431 of 1999 of this court, the matter was remanded and after remand further evidence was taken. The plaintiff relied upon Exts.A1 to A7 and the oral testimony of PW1 and PW2. The defendants relied upon Exts.B1 to B14 and the oral evidence of DW1 to DW4. Ext.X1 was called for and marked as court exhibit. The court below dismissed the suit rejecting the contentions of the plaintiff regarding the suspicious circumstances pointed out and came to a finding that the testators were in a sound disposition of mind at the time of execution of Exts.B1 and B2 wills. 

5. The appellant contends that though Exts.B1 and B2 wills were proved in terms of Section 63 of the Succession Act read with Sections 67 and 68 of the Evidence Act, by examining the attesting witnesses the propounder having failed to explain the various suspicious circumstances surrounding the execution of the wills, the suit ought to have been decreed as prayed for. 

6. It was argued by the learned counsel for the appellant Sri. C.D.Jose, that George was 78 and Karmali was 65 at the time of execution of alleged wills and they were having old age diseases and Karmali was in fact admitted at Lourdes Hospital, Ernakulam at the time of executing Ext.B2 will. It is also contended that the evidence in the case clearly discloses the following circumstances which would unequivocally indicate that the wills were executed at the instance of the defendants and by coercion and undue influence and it is not executed on the free will of the testators: 

i) That when a lawyer's notice was sent by the plaintiff stating that the property requires to be partitioned no reply was sent by the defendants. 

ii) That the first defendant was present at the time of execution of Ext.B1 will and the third defendant was present at the time of execution of Ext.B2 will. 

iii) That the signatures of the testators in the wills differ from the admitted signatures as is evident from Exts.A6 and A7. 

iv) That the attesting witnesses are the relatives of first defendant's wife and the testators have no acquaintance with them. 

v) That Karmali was hospitalised and she was not in a state of mind to execute the will especially in the light of the evidence that Ext.X1 read with the oral testimony of Doctor PW1 would show that she was sleepy and drowsy at the relevant time. 

vi) That the daughter was completely excluded and no property had been given to her under the wills. 

vii) That the will was not read over after the death of the testators. 

viii) That the wills are typewritten and contain various blank spaces. 

ix) That George was 78 and was not in a sound disposition of mind at the time of execution of B1 will. 

7. It was therefore argued by the learned counsel for the appellant that all these circumstances put together will create suspicion regarding the wills and it is for the propounder to adduce necessary evidence to enable the court to explain such suspicious circumstances and since there is failure on the part of the defendants to disprove the suspicious circumstances, the wills cannot be relied upon and should be treated as not genuine and in such circumstances the appellant is entitled for <th right over the plaint schedule property. 

8. On the other hand, the learned counsels appearing for the respondents supports the judgment of the trial court and explains the various suspicious circumstances pointed out. According to Sri. M.S.Narayanan, learned counsel appearing for the 3rd respondent, on an over all consideration of the factual circumstances in the case, it could be seen that father and mother wanted to execute separate wills and it seems that an occasion had come when George by himself had invited the attesting witnesses, the document was prepared it was signed by George in the presence of witnesses DW's 1 and 2. Ext.B2 will was taken to the hospital along with the witnesses and Karmali signed the will at the hospital. It is argued that though the attesting witnesses were distantly related to the first defendant's wife, they were independent witnesses who were invited by George himself and one of the witnesses was an Advocate. It is further pointed out that there is no difference in the signatures as the signatures in Exts.A6 and A7 were taken several years back which cannot be compared with the signatures in Exts.B1 and B2. It was further argued that daughter was already given in marriage and certain item of property was already given to her after the marriage by a settlement deed and she purchased some property in her name from the funds given by father. According to the defendants they never interfered with the execution or attestation of the wills and they had not exerted any pressure on the testators for executing the will. According to him both the testators were in a sound state of mind to execute the wills and therefore no suspicious circumstances exists warranting any challenge to the wills. 

9. The learned counsel for respondents also placed reliance on the following judgments to substantiate that they have proved the wills in accordance with law and has explained the suspicious circumstances pointed out by the appellant, and there had been no undue influence on the testators. In Naresh Charan Das Gupta v. Paresh Charan Das Gupta, AIR 1955 SC 363 it is held that, "It is elementary law that it is not every influence which is brought to bear on a testator that can be characterised as "undue". It is open to a person to plead his case before the testator and to persuade him to make a disposition in his favour. And if the testator retains his mental capacity, and there is no element of fraud or coercion - it has often been observed that undue influence may in the last analysis be brought under one or the other of these two categories - the will cannot be attacked on the ground of undue influence. The law was thus stated by Lord Penzance in Hall v. Hall: 

"But all influences are not unlawful. Persuasion, appeals to the affections or ties of kindred, to a sentiment of gratitude for past services, or pity for future destitution, or the like - these are all legitimate and may be fairly pressed on a testator. On the other hand, pressure of whatever character, whether acting on the fears or the hopes, if so exerted as to overpower the volition without convincing the judgment, is a species of restraint under which no valid will can be made. Importunity or threats, such as the testator has the courage to resist, moral command asserted and yielded to for the sake of peace and quiet, or of escaping from distress of mind or social discomfort, - these, if carried to a degree in which the free play of the testator's judgment, discretion, or wishes is overborne, will constitute undue influence, though no force is either used or threatened. In a word, a testator may be led, but not driven; and his will must be the offspring of his own volition, and not the record of some one else's." 

In Vrindavanibai Sambhaji Mane v. Ramchandra Vithal Ganeshkar & Others, (1995) 5 SCC 215 it is held that: 

"As far back as in 1894 the Privy Council in the case of Choteynarain Singh v. Mussamat Ratan Koer' observed that in the case of execution of a Will, an improbability must be clear and cogent. It must approach very nearly to, if it does not altogether constitute, an impossibility. This was reiterated by the Calcutta High Court in the case of Kristo Gopal Nath v. Baidya Nath Khan. It said that when a court is dealing with a testamentary case where there is a large and consistent body of testimony evidencing the signing and attestation of the Will, but where it is suggested that there are circumstances which raise a suspicion and make it impossible that the Will could have been executed, the correct line of approach is to see that the improbability in order to prevail against such evidence must be clear and cogent and must approach very nearly to, if it does not altogether constitute, an impossibility." 

"There is also a large body of case law about what are suspicious circumstances surrounding the execution of a Will which require the propounder to explain them to the satisfaction of the court before the Will can be accepted as genuine. A Will has to be proved like any other document except for the fact that it has to be proved after the death of the testator. Hence, the person executing the document is not there to give testimony. The propounder, in the absence of any suspicious circumstances surrounding the execution of the Will, is required to prove the testamentary capacity and the signature of the testator. Some of the suspicious circumstances of which the court has taken note are : 

(1) The propounder taking a prominent part in the execution of a Will which confers substantial benefits on him; 

(2) Shaky signature; 

(3) A feeble mind which is likely to be influenced; 

(4) Unfair and unjust disposal of property. 

(See in this connection : H.Venkatachala Iyengar v. B.N.Thimmajamma, Indu Bala Bose v. Manindra Chandra Bose and Guro v. Atma Singh." 

In Sridevi v. Jayaraja Shetty [(2005)2 Supreme Court Cases 784] it is held that: 

"It is well settled proposition of law that mode of proving the Will does not differ from that of proving any other document except as to the special requirement of attestation prescribed in the case of a Will by Section 63 of the Indian Succession Act, 1925. The onus to prove the Will is on the propounder and in the absence of suspicious circumstances surrounding the execution of the Will, proof of testamentary capacity and proof of the signature of the testator, as required by law, need be sufficient to discharge the onus. Where there are suspicious circumstances, the onus would again be on the propounder to explain them to the satisfaction of the court before the Will can be accepted as genuine. Proof in either case cannot be mathematically precise and certain and should be one of satisfaction of a prudent mind in such matters. In case the person contesting the Will alleges undue influence, fraud or coercion, the onus will be on him to prove the same. As to what are suspicious circumstances has to be judged in the facts and circumstances of each particular case." 

In Elsy v. Raju, 2006 (4) KLT 890 it is held that: 

"Merely because the will in question is an unregistered will and that there is an uneven distribution of property under the will, that cannot be treated as a suspicious circumstance. (Vide Sundaresa Pai v. Sumangala T.Pai (2002 (1) KLT 32 (SC). In Ramabai Padmakar Patil v. Rukminibai Vishnu Vekhande & Ors. (AIR 2003 SC 3109) the apex court upheld the will in spite of the fact that the entire property of the testator was given to his widow to the exclusion of all his daughters." 

In Velayudhan Nair v. Kalliyanikutty Amma, 2006 (1) KLT 884 it is held that:

"Denial of property to natural heirs or uneven distribution of assets among the heirs under a will etc. do not by themselves constitute suspicious circumstances. The very purpose behind the execution of a will is to disturb the natural order of succession and therefore there cannot be anything unusual about it. (See in this connection Surdaresa Pai & Ors. v. Mrs.Sumangala T.Pai & Anr., 2002 (1) KLT 32 : AIR 2002 SC 317, Madhavi Amma v. Chandrasekharan, 2004 (3) KLT 60, Rabindranath Mukherji v. Panchanan Banerjee, (1995) 4 SCC 459). 

In Satyanarayana v. Seetharatnam, 2005 (4) KLT SN 80 it is held that: 

"Mere presence of the beneficiary at the time of execution would not prove that the beneficiary had taken prominent part in the execution of the Will. The onus to prove the will is on the propounder and in the absence of suspicious circumstances surrounding the execution of the will proof of testamentary capacity and the proof of signature of the testator as required by law not be sufficient to discharge the onus. 

In Pappoo v. Kuruvilla, 1994 (2) KLT 278 it is held that: 

"Any and every circumstance cannot be taken as suspicious circumstances. A circumstance would be suspicious only when it is not normal or is not normally expected in a normal situation or is not expected of a normal person (vide Indu Bala v. Manindra Chandra, AIR 1982 SC 133]. The fact that learned counsel representing the defendants termed some circumstances as suspicious, will not by itself make those circumstances suspicious. In a case where the propounder let in evidence to prove the due execution of the Will, the burden shifts on to the defendants to substantiate their case that the execution of the Will is shrouded in suspicious circumstances. When the propounder of the Will has discharged his initial onus, the caveator - the person opposing the issue of the probate, should prove the suspicious circumstances." and that "If the testator indicates what he intends to bequeath and that indication is sufficient to identify the property bequeathed, there cannot be any difficulty because the testator himself has made the selection of the properties. So also if the testator indicates the purposes for which the properties are bequeathed, then that bequest cannot also fail for vagueness." 

10. Now keeping in mind the above propositions of law let us consider whether any of the suspicious circumstances pointed out by the counsel for appellant is sufficient to ignore the wills and decree the suit for partition. 

i) Receipt of the lawyers notice Ext. A2 is not disputed by the defendants and 3rd defendant when examined as DW3 admits having knowledge about the notice and it is also admitted that they have not sent any reply. It is stated in Ext. A2 that the parents had not executed any will or other document regarding succession of their assets and not sending a reply stating existence of a will indicates that the will was subsequently forged. Whereas it is contended by the defendants that the plaintiff was aware of the will, failing which she would not have stated in paragraph 3 of the plaint that late George was not in a position to understand things properly. According to the counsel for defendants not sending a reply to a lawyers notice cannot be a suspicious circumstances when there is evidence of execution and attestation. Apart from that DW3 has explained in his evidence during cross examination that no reply was sent as the plaintiff's claim was not justified. No doubt sending a reply to a lawyer's notice could have been proper, but such an inaction by itself cannot be taken as a suspicious circumstance and will not preclude the lagatees from defending a claim for partition on the basis of existence of a will. 

ii) The presence of first defendant at the time of execution of Ext.B1 will and the presence of third defendant at the time of execution of Ext.B2 will is not in dispute. But there is no evidence to show that they have taken any active or prominent part in the preparation of the will. It is settled law as stated in Sathyanarayana vs Seetharatnam, 2005 (4) KLT SN 80 (SC) that the mere presence of the beneficiary at the time of execution of the will not vitiate the will and therefore applying the said principle of law this circumstance also fails. 

iii) The counsel for appellant heavily relied upon the signatures of the testators as seen in the wills along with the admitted signatures as is evident from Exts.A6 and A7. Though the court has ample power to verify the signatures in a disputed document with admitted signatures it is never a safe guide to come to such a conclusion. Apart from that, Ext. B1 and B2 are dated 10/3/1996, whereas Ext. A6 is dated 25/2/1994 and A7 dated 24/11/1986. We cannot make out any marked difference in the signatures except for the fact that in B1 and B2 the signatures are larger in size than the signatures in A6 and A7. Such a circumstance by itself cannot be a reason to find forgery of Wills. Hence we cannot agree with the counsel for appellant on this aspect also. 

iv) During evidence an attempt was made to show that the attesting witnesses are the relatives of first defendant and the testators have no acquaintance with them. It has come out in evidence that DW1's wife and first defendant's wife are cousin sisters and DW2 is the cousin of DW1's wife. DW1 says in his evidence that he was acquainted with late George, since 1992 and he has seen George for about ten times. He also deposed that he had a prior discussion with George regarding partition of property with least expense. DW1 is an Advocate and therefore we could not find any impropriety in George getting the assistance of DW1 to attest the Wills. DW2 says he was called by late George, 3 to 4 days prior to execution of the documents for signing a document. There is nothing to discredit the evidence of DW1 and DW2 and in that circumstance we cannot brush aside the evidence of these witnesses merely because of their relationship with first defendant's wife. 

v) It is an admitted fact that Karmali executed Ext.B2 will while she was hospitalised. It is argued by the counsel for appellant that she was not in a state of mind to execute the will especially in the light of the evidence. According to him, Ext.X1 case sheet from the hospital read with the oral testimony of the Doctor, PW1 would show that Karmali was sleepy and drowsy at the relevant time. Evidence of PW1 doctor, based on Ext.X1, who attended late Karmily would indicate that she was admitted in the hospital on 7/3/1996 as she had diabetes and kidney failure and that she was discharged on 3/4/1996. According to PW1 she was conscious though sleepy on 10/3/1996. This does not indicate her state of mind. It is also stated in the deposition of DW2 that before signing Karmali read a portion of the will and asked her husband as to whether it was prepared in the manner in which they had discussed. This evidence also indicates that she was in a state of mind to execute the will. Hence we are unable to accept contention of the appellant in this regard. 

vi) No property is set apart for the daughter and it is clear from the recitals in the wills itself. However it is an admitted fact that the plaintiff was given in marriage in the year 1974 and her father has given her 6 cents of landed property in the year 1986 by way of a settlement deed. It is also a settled proposition of Law as held in Velayudhan Nair v. Kalliyanikutty Amma, 2006 (1) KLT 884 and Elsy v. Raju, 2006 (4) KLT 890 that denial of property to natural heirs or uneven distribution of assets among heirs by themselves do not constitute suspicious circumstance. 

vii) According to the Appellant if the wills were in existence it would have been read over after the death of the testators as per a custom prevailing among the community. No such custom is pleaded or proved and therefore appellant cannot claim it to be suspicious circumstance. 

viii) In Ext.B1 will, at page 5 the survey number, sub division number and area in the schedule of property is left blank, at page 6 the tenure and area of property in the schedule is left blank. In Ext. B2 will, at page 3 in the description of property document number is left blank. However it could be seen that the properties scheduled are easily capable of identification. There is no blank space in the recitals. There is no evidence to show as to who prepared the wills. The name of scribe is not seen. DW1 and DW2 states that when they met George he was already in possession of the wills. Since the properties are easily identifiable blank spaces in the schedule will not affect the validity of the will and it cannot be treated as a suspicious circumstance. This apart it is held in Pappoo vs Kuruvilla, 1994 (2) KLT 278 that if the property is capable of identification gaps or spaces in the will cannot be treated as a suspicious circumstance. 

ix) Even though George was 78 at the time of executing the will and died after after five months there is nothing to indicate that he was not in a sound disposition of mind at the time of execution of B1 will. The wills Exts.B1 and B2 were executed in the presence of witnesses DW1 and DW2 and they have given evidence regarding the signing and attestation. There is nothing to discredit the evidence of DW1 and DW2. Their evidence is sufficient to indicate that the Wills were signed by the testators and at the relevant time they were in a sound and disposing state of mind, that they understood the nature and effect of the dispositions and put their signature to the document on their own free will. There is no evidence to prove the allegation of coercion or undue influence. 

In the above circumstance we do not think that any suspicious circumstance existed in the execution or attestation of the Wills, and therefore the court below was justified in dismissing the suit. The Appeal is therefore dismissed and in the circumstance without any costs. 

(K.M.JOSEPH, JUDGE) (A.M.SHAFFIQUE, JUDGE) jsr