MANU/KE/1173/2013Equivalent Citation: ILR2013(4)Kerala925

IN THE HIGH COURT OF KERALA

R.F.A. No. 84 of 2004
Decided On: 20.11.2013
Appellants: Baby
Vs.
Respondent: Gopakumar
Hon'ble Judges/Coram:
S.S. Satheesachandran, J.
Counsels:
For Appellant/Petitioner/Plaintiff: Sri K.A. Satheesa Babu
For Respondents/Defendant: Sri V. Ramkumar Nambiar
JUDGMENT
S.S. Satheesachandran, J.
1 . Defendant is the appellant. Suit was for specific performance of an agreement of
sale, and injunction. Decree passed in favour of respondent/plaintiff by the learned Sub
Judge, Thrissur, is challenged in the appeal. Ext. A-3 agreement of sale over the plaint
property having an extent of 1 acre 26 cents belonging to the defendant was sought to
be enforced in the suit. A decree of injunction was also applied to restrain the defendant
from alienating the property to any person other than the plaintiff. Alternatively reliefs
for damages and compensation were applied for. Ext. A-3 agreement fixing percentage
value at ' 650 for the property and time-limit for six months for completion of sale on
payment of ' 10,000 as advance on the sale price, was admitted by defendant. Plaintiff
laid the suit before completion of the period fixed for sale alleging breach of contract by
the defendant. Later, he got the plaint amended alleging that after institution of suit
defendant collected a further sum of ' 60,000 on the sale price and period for
completion of sale was extended on mutual consent by parties. The defendant resisted
the suit contending that the contract failed on account of the default of plaintiff in
fulfilling his obligations under Ext. A-3 agreement. He also repudiated the claim
canvassed in the amended plaint over the receipt of additional sum towards sale price,
filing an additional written statement. Accepting the case of plaintiff that the contract of
sale tailed on the fault of defendant and that apart from the advance paid under Ext. A-1
agreement the defendant had collected ' 60,000 towards the sale price after institution
of suit, the court below granted decree in favour of the plaintiff directing defendant to
execute the sale deed receiving the balance consideration of ' 11,900. In default of
defendant to execute the sale deed plaintiff was granted liberty to move for registration
of the sale deed through court depositing the balance sale consideration. A decree of
permanent prohibitory injunction was also granted in favour of plaintiff restraining the
defendant from alienating the property to any other person. That decree is challenged in
the appeal.
2. I heard the counsel on both sides.
3 . Learned counsel for the appellant contended that the suit filed before expiry of the

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term fixed for completion of sale under Ext. A-1 agreement was premature. Imputing
breach of contract by defendant, before expiry of the period stipulated for completing
the sale, suit was laid for enforcing the agreement. When that be so, plaintiff is not
entitled to get specific performance of that agreement, but, at best only a claim for
damages on strict proof thereof, according to counsel. Appellant did not appear and
give evidence in support of the suit claim. His power of attorney, P.W. 1, who had no
direct knowledge of the transaction involved, was examined in the case. The evidence of
that witness no way assisted the plaintiff to get a decree of specific performance,
according to counsel. Ext. A-2 was produced by plaintiff to substantiate subsequent
payment of ' 60,000 towards purchase price after institution of the suit. That document
was not proved despite denial of its execution and receipt of money stated thereunder
by defendant, is the further submission of counsel. P.W. 3 examined in the case was the
father of P.W. 1, power of attorney of plaintiff. Both P.W. 1 and P.W. 3 had no direct
knowledge of the transaction covered under Ext. A-3 agreement. The evidence let in
through P.W. 2 and 4, other two witnesses examined by plaintiff, former a sales officer
in a co-operative bank and latter a real estate agent no way assisted the plaintiff in
substantiating his case for a decree of specific performance, according to counsel.
Without appreciating the facts and circumstances involved and evidence let in the case
forming erroneous conclusions the court below has granted a decree in favour of
plaintiff, which is totally unjust and unsustainable and liable to be reversed, submits the
counsel. On the other hand learned counsel for the plaintiff contended that there is no
merit in the challenges raised to assail the decree, which, according to counsel is fully
supported by the materials tendered. Suit cannot be considered to be premature where
the evidence clearly established that there was default by defendant and also refusal on
his part to perform the contract, according to counsel. Apprehension of plaintiff that
defendant discarding Ext. A-3 agreement intended to alienate the property has been
shown to be genuine. Institution of suit before expiry of the period fixed under the
agreement for completion of sale cannot be raised to challenge the suit as premature, is
the submission of counsel relying on Virgo Industries (Eng.) Private Ltd. v. Venturetech
Solutions Private Ltd. MANU/SC/0731/2012 : (2013) 1 S.C.C. 625. Plaintiff need not
wait for expiry of due date for filing suit for specific performance in the event of
anticipatory breach of agreement by overt act of defendant, is the submission of
counsel. The evidence tendered in the case had clearly established that there was
culpable default by defendant in fulfilling the terms agreed upon under Ext. A-3
agreement for completion of sale and also that he made attempts to alienate the plaint
property to others, submits the counsel. Ext. A-3 agreement stipulated that defendant
had to discharge the encumbrance over the property, but, even after the expiry of
period fixed for sale the property continued to be encumbered on failure of defendant to
discharge liabilities has also been proved in the case, is the further submission of
counsel. The decree granted in favour of the plaintiff is finally supported by materials
tendered, and, the challenge raised by defendant is devoid of any merit, submits the
counsel urging for dismissal of the appeal.
4 . Defendant has challenged maintainability of the suit contending that it was
premature. Ext. A-3 agreement dated 12-10-1994 provided six months period for
completion of the contract of sale and as such suit instituted earlier to the period fixed
was premature, was the challenge questioning its maintainability. Plaintiff instituted the
suit on 28-3-1995 before the expiry of the period fixed for completion of sale under Ext.
A-3 agreement. Learned Sub Judge relying on Malkhan Singh v. Raghubir Singh
MANU/UP/0144/1981 : A.I.R. 1981 All 96 had repelled the challenge over the
maintainability of suit holding that the facts and circumstances of the case would justify
that plaintiff had no other way but to approach the court to get the sale deed executed

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by a decree of specific performance and also to prevent the defendant by a decree of
injunction from transferring the property to any other person. Reliance was also placed
by the learned Sub Judge in Govind Prasad v. Haridutt MANU/SC/0010/1977 : A.I.R.
1977 S.C. 1005 to sustain the above conclusion formed on the premise that in a
contract for sale of immovable property period of time stipulated thereunder cannot be
considered as essence of that contract. Where a period of time is agreed under the
contract by parties for completion of sale if there was breach by one of the parties
whether the other party could sue for specific performance of that contract before the
expiry of period fixed for performance, is the question involved. In other words, with
respect to an anticipatory breach of contract before the expiry of period fixed under the
agreement between the parties, can one of the parties who complains breach of contract
by the other, sue for specific performance. In Malkhan Singh's case the Allahabad High
Court has expressed the view that a suit for specific performance filed few days before
the date agreed for execution of the sale deed cannot be held to be premature. In that
case no challenge was raised in the written statement that the suit was premature, nor
any such ground canvassed to impeach the maintainability of suit before the trial court
and also first appellate court. In second appeal challenge raised over maintainability
was repelled by the High Court taking note that throughout defendant had resisted the
suit claim contending that he had not executed the agreement over which specific
performance was claimed. The High Court expressed the view that in the facts of the
case, suit cannot be considered as premature since the defendant had clearly refused to
execute the sale deed and also made it known to the plaintiff prior to institution of suit.
Whatever be the circumstances presented in a case indicating breach of contract by one
of the two parties if the agreement stipulated a time-limit for performance the other
party can sue for specific performance only on expiry of such period of time. If one of
the parties has repudiated the contract before the expiry of period stipulated for
performance of contract the other party can either treat the breach as putting an end to
the contract and sue for damages or may choose to keep the contract alive till the time
for performance and claim specific performance. When there is a breach of contract
before the expiry of period of time stipulated for performance, that may give an option
to the other to treat the breach as putting an end to the contract. If he exercise such an
option, he can only sue for damages and not for specific performance. In spite of such
anticipatory breach he has the other option to treat the contract alive and, after
completion of the period stipulated, sue for specific performance. The Apex Court in
Jawahar Lal Wadhwa v. Haripada Chakroberty MANU/SC/0208/1988 : A.I.R. 1989 S.C.
606 has considered the above options available to the party in a contract when he
suffers anticipatory breach of contract by the other party. Analysing the two options
available to the party who suffered anticipatory breach of contract by the other party, it
has been held thus:
It is settled law that where a party to a contract commits an anticipatory breach
of the contract, the other party to the contract may treat the breach as putting
an end to the contract and sue for damages, but in that event he cannot ask for
specific performance. The other option open to the other party, namely, the
aggrieved party, is that he may choose to keep the contract alive till the time
for performance and claim specific performance but, in that event, he cannot
claim specific performance of the contract unless he shows his readiness and
willingness to perform the contract.
When such be the position of law the view expressed by the Allahabad High Court in
Malkhan Singh's case that a suit for specific performance instituted before the period
stipulated for performance of the contract cannot be held to be premature if the contract
is proved to have been repudiated by the other party cannot be accepted as laying down

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a correct proposition. Learned counsel for plaintiff has relied on Virgo Industries (Eng.)
Pvt. Ltd.'s case (supra) to support the finding entered by the learned Sub Judge that the
suit though filed before expiry of the period for performance in Ext. A-3 agreement was
not premature. In that case considering the applicability of Order II Rule 2 CPC Apex
Court has expressed the view that there is no provision in the Specific Relief Act, 1963
requiring plaintiff claiming the relief of specific performance to wait for expiry of the
due date for performance of the agreement where the defendant had already made his
intentions repudiating the contract by his overt acts. The options available to the
aggrieved party complaining breach of contract by the other party before the period
stipulated for performance, explained by the Apex Court consisting of a larger Bench of
three Judges in Jawahar Lal Wadhwa's case (supra), it is seen, was not brought to the
notice of the Bench when the aforesaid decision was rendered in Virgo Industries (Eng.)
Pvt. Ltd.'s case. Of course there is no mandatory bar created by statute which would
disable the plaintiff in filing a suit for specific performance before the date fixed for
completion of sale by the other party. In a case of anticipatory breach of contract the
other party, as pointed out by the Apex Court can treat the contract alive till the time for
performance provided is over and then sue for specific performance. An anticipatory
breach of contract before the expiry of period for performance would give him only a
claim for damages treating the breach as ending the contract. Anticipatory breach of
contract could not give him a cause of action to sue for specific performance. When that
be so, the suit instituted by the plaintiff before the period of completion of sale
complaining anticipatory breach by the defendant was premature.
5. On the facts and circumstances presented and materials placed also, I find the decree
of specific performance granted in favour of plaintiff by the court below is
unsustainable. Under Ext. A-3 agreement a sum of ' 10,000 alone out of the purchase
price was paid to the defendant. After institution of the suit plaintiff got the plaint
amended to advance a case that while the lis was pending before the court subsequent
payment of ' 60,000 on the purchase price was also paid to defendant and receipt of
such payment was acknowledged under Ext. A-2. That document was disputed by
defendant who denied of receiving any sum other than the amount stated in Ext. A-3
agreement. No explanation was offered by plaintiff why such subsequent payment, if
any, paid to defendant towards purchase price after institution of the suit was not made
with notice to the court. Subsequent payment of ' 60,000 after institution of the suit, on
27-4-1995, and allegedly, acknowledged by defendant executing Ext. A-2 was projected
much later. Application for amending plaint (I.A. 2332/97) to incorporate allegations
thereof was filed two years after institution of the suit. Though the amendment had
been allowed it would no way assist the plaintiff to show that there was subsequent
payment to defendant. Plaintiff has not explained the inordinate delay in seeking
amendment to incorporate the allegations in his plaint. Even with the amendment
application plaintiff did not produce Ext. A-2 but only later i.e. on 21-10-98. Imputing
anticipatory breach of contract before expiry of the term stipulated in Ext. A-3
agreement plaintiff instituted the suit and later it is his case without the juncture of the
court while the lis was pending he made subsequent payment towards the purchase
price. Subsequent payment was denied by defendant who had questioned the
entitlement of plaintiff to seek specific performance of Ext. A-3 agreement Still the
plaintiff did not appear before court and examine himself as a witness giving
opportunity to test the veracity of his claim by the other side. Power of attorney of
plaintiff was examined as P.W. 1. His evidence would show that he had no direct
knowledge over the transactions covered by Ext. A-3 agreement and also Ext. A-2. With
respect to Ext. A-3 agreement other than claiming of witnessing its execution he had no
direct knowledge at all. The only other witness examined by plaintiff to speak about Ext.

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A-3 and Ext. A-2 is P.W. 3 who is the father of his power of attorney, examined as P.W.
1. P.W. 3 also did not state of having any direct knowledge over the execution of Ext.
A-3 agreement by defendant. P.W. 2 who claimed of witnessing the defendant executing
a document on 27-4-95, the date shown in Ext. A-2 over subsequent payment, has
stated in his evidence that defendant subscribed his signature over a revenue stamp
affixed in the paper. Ext. A-2 is not affixed with any revenue stamp. The evidence of
this witness on subsequent payment to defendant towards purchase price after
institution of suit, is unworthy of any merit. Two other witnesses were examined by
plaintiff as P.W. 2 and P.W. 4 to show that defendant discharged his liability towards a
co-operative bank with the sum received under Ext. A-2. When the case of plaintiff over
subsequent payment made towards purchase price after institution of the suit, which
was disputed by defendant, remained not established evidence let in through P.W. 2 and
P.W. 4 over the remittance made by defendant to clear his liability to a bank has no
value at all.
6. Defendant had repudiated the case of plaintiff that he committed breach of contract
and failed to perform his part in terms of Ext. A-3 agreement Other than showing that
the defendant failed to clear off the encumbrances over the property plaintiff failed to
show that he was ready and willing to take the sale deed in terms of Ext. A-3 agreement
The defendant had specifically contended that performance of the agreement of sale
failed on account of the fault of plaintiff. Power of attorney of plaintiff examined as P.W.
1 has no direct knowledge over the transaction under Ext. A-3 and also over the alleged
subsequent payment covered by Ext. A-2. His evidence no way assisted the plaintiff to
show that he was entitled to a decree of specific performance. Ext. A-2 document was
denied by the defendant, yet, no attempt was made by plaintiff to show its execution by
defendant and that the signature appearing in that document acknowledging receipt of
subsequent payment was subscribed by him. Plaintiff had kept away from court from
giving evidence in support of his claim for specific performance. Evidence let in through
his power of attorney, P.W. 1, who does not have any direct knowledge over the
transactions, no way assisted the plaintiff in obtaining the decree applied for. Without
looking into any of these aspects court below has granted a decree in favour of the
plaintiff for specific performance, which cannot be sustained. Under Ext. A-3 agreement
of sale defendant received a sum of ' 10,000 towards purchase price. He has not shown
that he suffered any damages by non-completion of the sale under Ext. A-3. When that
be so he has to refund that sum collected as purchase price. Though the suit for specific
performance was premature, the alternate reliefs claimed by plaintiff can be taken note
to direct defendant to refund the advance collected. Plaintiff can be granted a decree for
refund of the sum of ' 10,000 collected by defendant towards purchase price as an
equitable relief, but nothing more.
Setting aside the decree and judgment of the court below plaintiff is granted a decree
for refund of the sum of ' 10,000 from defendant with interest at the rate of 6% per
annum from the date of institution of the suit till realisation. Appeal is allowed to the
extent indicated directing both parties to suffer their costs.
*A reproduction from ILR (Kerala Series)
© Manupatra Information Solutions Pvt. Ltd.

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