K. Karuppuraj vs M. Ganesan on 4 October, 2021


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Supreme Court of India

K. Karuppuraj vs M. Ganesan on 4 October, 2021

Author: M.R. Shah

Bench: M.R. Shah, A.S. Bopanna

                                                                        REPORTABLE


                                   IN THE SUPREME COURT OF INDIA
                                    CIVIL APPELLATE JURISDICTION

                                 CIVIL APPEAL NOS. 6014-6015 OF 2021


         K. Karuppuraj                                              …Appellant(s)

                                                 Versus


         M. Ganesan                                                 …Respondent(s)


                                              JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment

and order dated 27.11.2017 passed by the High Court of Judicature at

Madras in Appeal Suit No. 94 of 2010 by which the High Court has

allowed the said appeal by quashing and setting aside the judgment and

decree passed by the learned Trial Court dismissing the suit for specific

performance and consequently decreeing the suit, the original defendant

has preferred the present Civil Appeal No. 6014 of 2021.

1.1
Signature Not Verified
Feeling aggrieved and dissatisfied with the judgment and order
Digitally signed by R
Natarajan

dated 06.01.2020 rejecting the Review Application No. 71 of 2019 in
Date: 2021.10.04
16:15:23 IST
Reason:

1
Appeal Suit No. 94 of 2010, the defendant as review applicant has

preferred the present Civil Appeal No. 6015 of 2021.

2. The facts leading to the present appeals in a nutshell are as

under:-

2.1 An agreement for sale of the property situated in Kaspa

Coimbatore was entered into between the plaintiff and the defendant

wherein the defendant agreed to sell the same for a sale consideration

of Rs. 16.20 lakhs to the plaintiff. A part sale consideration of

Rs.3,60,001/- was paid at the time of execution of the agreement to sell.

There were certain conditions stipulated in the agreement to sell. One of

the conditions was that the defendant as original owner was required to

evict the tenants from the property in question and thereafter to execute

the sale deed on receipt of the full sale consideration. The plaintiff sent

a legal notice to the defendant asking to evict the tenants from the

property in question and to execute the sale deed on receipt of the

balance sale consideration vide notice dated 01.07.2006.

2.2 That thereafter the plaintiff filed the present suit before the learned

Trial Court for specific performance of the contract. It was the case on

behalf of the plaintiff that he was ready and willing to perform his part of

the contract but the defendant did not evict the tenants and come
2
forward to execute the sale deed. Therefore, it was averred in the plaint

that the defendant has to evict the tenants and perform his part of the

contract and execute the sale deed. It was pleaded on behalf of the

plaintiff that he was ready with the cash in his savings account and,

therefore, he was always ready to perform his part of the contract. The

defendant contested the suit by filing the written statement. Readiness

and willingness on the part of the plaintiff and to perform the specific part

of the contract was specifically denied. It was submitted that vacant

possession was already known to the plaintiff as the tenants had been

vacated and inspite of such the plaintiff was not ready to pay the

remaining consideration. The learned Trial Court framed the following

issues:-

“1. Whether the plaintiff is entitled for specific
performance?

2. Whether the plaintiff was ready and willing to
purchase the property?

3. To what relief?”

2.3 Both the sides led the evidence, documentary as well as oral. On

appreciation of evidence and considering the pleadings in the plaint, the

learned Trial Court held the issue of readiness on the part of the plaintiff

in favour of the plaintiff, however, held that the plaintiff was not willing to

get the sale deed executed as it is, and, therefore, held the issue of

willingness against the plaintiff. The Trial Court also held that the

3
defendant has failed to prove that tenants had vacated the suit property

as claimed, however, the learned Trial Court held on willingness against

the plaintiff by observing that the plaintiff has not shown the willingness

to purchase the property with the tenants and there are no such

pleadings in the plaint and that the plaintiff has not elected to purchase

the property as its nature. Therefore, the Trial Court on appreciation of

the evidence ultimately held that the plaintiff was not at all willing to

purchase the property with the tenants. Accordingly, the learned Trial

Court dismissed the suit and refused to pass the decree for specific

performance of the contract and directed the defendant to refund the

advance amount of Rs.3,60,001/- with interest @ 18% p.a. from the date

of agreement till the date of realization, to be paid within a period of two

months. The learned Trial Court also directed that there shall be a

charge over the property till such amount is realized by the plaintiff from

the defendant.

2.4 Feeling aggrieved and dissatisfied with the judgment and decree

passed by the learned Trial Court dismissing the suit for specific

performance, the plaintiff filed the appeal suit before the High Court. By

the impugned judgment and order, relying upon the affidavit filed before

the High Court in which for the first time the plaintiff stated that he is

ready and willing to purchase the property with the tenants, the High

Court without even re-appreciating the entire evidence on record and
4
even without framing the points for determination has allowed the appeal

by the impugned judgment and order and has set aside the judgment

and decree passed by the learned Trial Court, and consequently has

decreed the suit for specific performance of the contract.

2.5 Feeling aggrieved and dissatisfied with the impugned judgment

and order/decree passed by the High Court – First Appellate Court

allowing the appeal and consequently decreeing the suit for specific

performance of the contract, the original defendant has preferred the

present appeal being Civil Appeal No.6014 of 2021. After the impugned

judgment and order/decree, the defendant filed the review application

before the High Court, which has been dismissed, which is the subject

matter of Civil Appeal No.6015 of 2021.

3. Shri Ratnakar Dash, learned senior counsel appearing for the

appellant/defendant has vehemently submitted that in the facts and

circumstances of the case, the High Court has materially erred in

allowing the appeal and decreeing the suit for specific performance of

the contract.

3.1 It is vehemently submitted by the learned senior counsel appearing

for the appellant that the impugned judgment and order passed by the

High Court as a First Appellate Court cannot be sustained. It is
5
submitted that as such the High Court has not exercised the appellate

jurisdiction vested in it, particularly, while exercising the jurisdiction under

Section 96 read with Order XLI Rule 31 of the Civil Procedure Code. It

is submitted that the High Court has not at all re-appreciated the

evidence on record and without even discussing the evidence on record

and even without raising the points for determination on the basis of the

issues which were framed by the learned Trial Court, the High Court has

allowed the appeal and has decreed the suit for specific performance,

which otherwise is not permissible.

3.2 It is further submitted by learned senior counsel appearing on

behalf of the appellant that there is no re-appreciation of evidence on the

issue of willingness on the part of the plaintiff, which was dealt with and

considered by the learned Trial court in detail and the issue which was

held against the plaintiff.

3.3 It is submitted that even the High Court has erred in passing the

impugned judgment and order relying upon the affidavit of the

respondent-plaintiff, which was filed before the High Court in which for

the first time the plaintiff came out with a case that he is ready and

willing to purchase the property with tenants. It is submitted that such a

course adopted by the High Court is wholly impermissible under the law.

6
3.4 It is submitted that what was not pleaded by the plaintiff in the

plaint on willingness to purchase the property with tenants has now been

permitted by the High Court relying upon the affidavit filed before the

High Court for the first time. It is submitted that the affidavit filed by the

plaintiff before the High Court that he is ready and willing to purchase the

property with tenants is just contrary to the pleadings in the plaint and

even the findings recorded by the learned Trial Court.

3.5 It is further submitted by learned senior counsel appearing for the

appellant that as such the plaintiff never agreed to purchase the property

with tenants and as per the case of the plaintiff and so averred in the

plaint, it was pleaded that it was the responsibility of the defendant to

evict the tenants and hand over the peaceful vacant possession and

execute the sale deed. It is submitted that, therefore, thereafter it was

not open on the part of the plaintiff to submit that he is ready and willing

to purchase the property with tenants and that too by an affidavit for the

first time filed before the High Court.

3.6 It is submitted that without even permitting the plaintiff to amend

the plaint, the course adopted by the High Court permitting to change his

stand by way of an affidavit is unknown to law and the procedure to be

followed under the provisions of the CPC. Making above submissions

and relying upon the decisions of this Court in the case of B.V. Nagesh
7
and Anr. Vs. H.V. Sreenivasa Murthy, (2010) 13 SCC 530, H. Siddiqui

(Dead) by LRs. Vs. A. Ramalingam (2011) 4 SCC 240 and State Bank

of India and Anr. Vs. Emmsons International Limited and Anr. (2011)

12 SCC 174, it is prayed to allow the present appeal and quash and set

aside the impugned judgment and order passed by the High Court and

consequently dismiss the suit.

4. Present appeal is vehemently opposed by Mr. Navaniti Prasad

Singh, learned senior counsel appearing on behalf of the respondent –

original plaintiff.

4.1 It is vehemently submitted by learned senior counsel appearing on

behalf of the respondent – plaintiff that as such as per the condition in the

agreement to sell, it was the responsibility of the defendant to evict the

tenants and thereafter to hand over the peaceful and vacant possession

and execute the sale deed on receipt of the balance sale consideration.

It is submitted that in the present case admittedly the defendant did not

perform his part of evicting the tenants. It is submitted, therefore, that to

allow the suit and pass the decree for specific performance will

tantamount to giving a premium to the defendant, who has failed to

perform his part under the agreement to sell.

8
4.2 It is submitted that as such against the total sale consideration of

Rs.16.20 lakhs, defendant paid only Rs. 3,60,001/- at the time of

execution of agreement to sell. It is submitted that, therefore, when

subsequently the learned Trial Court held that plaintiff did not elect to get

the sale deed executed with tenants, the defendant rightly filed an

affidavit before the High Court and stated that he is ready and willing to

get the sale deed executed even with tenants. It is submitted, therefore,

that by allowing the defendant to file the affidavit to contend that he is

ready and willing to get the sale deed executed and to purchase the

property with tenants, the High Court has done the substantial justice so

as to not to permit the defendant to take the benefit of his own wrong in

not evicting the tenants.

4.3 It is further submitted by learned senior counsel appearing on

behalf of the respondent – plaintiff that even the defendant has not

returned the amount of part consideration paid, i.e., Rs.3,60,001/- with

interest @ 18% p.a. to the plaintiff though directed by the learned Trial

Court. In the alternative, it is submitted by the learned senior counsel

appearing on behalf of the respondent that the technicalities shall not

come in the way of the plaintiff and, therefore, the matter may be

remitted to the High Court and permit the plaintiff to amend the plaint in

exercise of powers under Order VI Rule 17 of the CPC.

9
4.4 Alternatively, it is also submitted that if this Court is of the opinion

that the High Court ought not to have disposed of the appeal without

determining the points for determination on the issues framed by the

learned Trial Court, in that case, the matter may be remitted to the High

Court for fresh consideration and to decide and dispose of the appeal

afresh after framing the points for determination as required under Order

XLI Rule 31 of the CPC. Making above submissions, it is prayed to

dismiss the present appeal.

5. Heard the learned counsel for the respective parties at length.

6. In the present case, the original plaintiff instituted a suit for specific

performance of the contract. On appreciation of evidence, the learned

Trial Court held the issue of readiness in favour of the plaintiff. However,

refused to pass the decree for specific performance of the contract on

the ground that the plaintiff was not willing to purchase the property with

tenants. Therefore, the issue with respect to willingness was held

against the plaintiff. In an appeal filed before the High Court under

Section 96 read with Order XLI by the impugned judgment and order, the

High Court has allowed the said appeal and has quashed and set aside

the decree passed by the learned Trial Court dismissing the suit and

consequently has decreed the suit for specific performance. Having

gone through the impugned judgment and order passed by the High
10
Court, it can be seen that there is a total non-compliance of the Order

XLI Rule 31 of CPC. While disposing of the appeal, the High Court has

not raised the points for determination as required under Order XLI Rule

31 CPC. It also appears that the High Court being the First Appellate

court has not discussed the entire matter and the issues in detail and as

such it does not reveal that the High Court has re-appreciated the

evidence while disposing of the first appeal. It also appears that the

High Court has disposed of the appeal preferred under Order XLI CPC

read with Section 96 in a most casual and perfunctory manner. Apart

from the fact that the High Court has not framed the points for

determination as required under Order XLI Rule 31 CPC, it appears that

even the High Court has not exercised the powers vested in it as a First

Appellate Court. As observed above, the High Court has neither re-

appreciated the entire evidence on record nor has given any specific

findings on the issues which were even raised before the learned Trial

Court.

6.1 In the case of B.V. Nagesh and Anr. (supra), this Court has

observed and held that without framing points for determination and

considering both facts and law; without proper discussion and assigning

the reasons, the First Appellate Court cannot dispose of the first appeal

under Section 96 CPC and that too without raising the points for

11
determination as provided under Order XLI Rule 31 CPC. In paragraphs

3 and 4, it is observed and held as under:-

“3. How the regular first appeal is to be disposed of
by the appellate court/High Court has been considered
by this Court in various decisions. Order 41 CPC deals
with appeals from original decrees. Among the various
rules, Rule 31 mandates that the judgment of the
appellate court shall state:

(a) the points for determination;

(b) the decision thereon;

(c) the reasons for the decision; and

(d) where the decree appealed from is reversed or
varied, the relief to which the appellant is entitled.

4. The appellate court has jurisdiction to reverse or
affirm the findings of the trial court. The first appeal is a
valuable right of the parties and unless restricted by law,
the whole case is therein open for rehearing both on
questions of fact and law. The judgment of the appellate
court must, therefore, reflect its conscious application of
mind and record findings supported by reasons, on all
the issues arising along with the contentions put forth,
and pressed by the parties for decision of the appellate
court. Sitting as a court of first appeal, it was the duty of
the High Court to deal with all the issues and the
evidence led by the parties before recording its findings.

The first appeal is a valuable right and the parties have
a right to be heard both on questions of law and on facts
and the judgment in the first appeal must address itself
to all the issues of law and fact and decide it by giving
reasons in support of the findings. (Vide Santosh
Hazari v. Purushottam Tiwari
[(2001) 3 SCC 179], SCC
p. 188, para 15 and Madhukar v. Sangram [(2001) 4
SCC 756] , SCC p. 758, para 5.)”

6.2 In the case of Emmsons International Limited and Anr. (supra)

while considering the scope and ambit of exercise of powers under

12
Section 96 of CPC by the Appellate Court and after considering the

decisions of this Court in the cases of Madhukar and Ors. Vs. Sangram

and Ors., (2001) 4 SCC 756; H.K.N. Swami Vs. Irshad Basith (Dead)

by LRs., (2005) 10 SCC 243 and Jagannath Vs. Arulappa and Anr.,

(2005) 12 SCC 303, it is held that sitting as a Court of First Appeal, it is

the duty of the Appellate Court to deal with all the issues and the

evidence led by the parties before recording its findings.

6.3 In the case of H. Siddiqui (Dead) by LRs. (supra), it is observed

and held in paragraph 21 as under:-

“21. The said provisions provide guidelines for the
appellate court as to how the court has to proceed and
decide the case. The provisions should be read in such
a way as to require that the various particulars
mentioned therein should be taken into consideration.

Thus, it must be evident from the judgment of the
appellate court that the court has properly appreciated
the facts/evidence, applied its mind and decided the
case considering the material on record. It would
amount to substantial compliance with the said
provisions if the appellate court’s judgment is based on
the independent assessment of the relevant evidence on
all important aspects of the matter and the findings of
the appellate court are well founded and quite
convincing. It is mandatory for the appellate court to
independently assess the evidence of the parties and
consider the relevant points which arise for adjudication
and the bearing of the evidence on those points. Being
the final court of fact, the first appellate court must not
record mere general expression of concurrence with the
trial court judgment rather it must give reasons for its
decision on each point independently to that of the trial
court. Thus, the entire evidence must be considered and
discussed in detail. Such exercise should be done after
formulating the points for consideration in terms of the
13
said provisions and the court must proceed in
adherence to the requirements of the said statutory
provisions. (Vide Sukhpal Singh v. Kalyan Singh [AIR
1963 SC 146] , Girijanandini Devi v. Bijendra Narain
Choudhary [AIR 1967 SC 1124] , G.

Amalorpavam v. R.C. Diocese of Madurai [(2006) 3 SCC
224] , Shiv Kumar Sharma v. Santosh Kumari [(2007) 8
SCC 600] and Gannmani Anasuya v. Parvatini
Amarendra Chowdhary
[(2007) 10 SCC 296 : AIR 2007
SC 2380] .)”

7. Applying the law laid down by this Court in the aforesaid decisions,

if the impugned judgment and order passed by the High Court is

considered, in that case, there is a total non-compliance of the

provisions of the Order XLI Rule 31 CPC. The High Court has failed to

exercise the jurisdiction vested in it as a First Appellate Court; the High

Court has not at all re-appreciated the entire evidence on record; and not

even considered the reasoning given by the learned Trial Court, in

particular, on findings recorded by the learned Trial Court on the issue of

willingness. Therefore, as such, the impugned judgment and order

passed by the High Court is unsustainable and in normal circumstances

we would have accepted the request of the learned senior counsel

appearing on behalf of the respondent to remand the matter to the High

Court for fresh consideration of appeal. However, even on other points

also, the impugned judgment and order passed by the High Court is not

sustainable. We refrain from remanding the matter to the High Court

and we decide the appeal on merits.

14

8. It is required to be noted that as per the case of the original

plaintiff, the defendant was required to evict the tenants and hand over

the physical and vacant possession at the time of execution of the sale

deed on payment of full sale consideration. Even in the suit notice

issued by the plaintiff, the plaintiff called upon the defendant to evict the

tenants and thereafter execute the sale deed on payment of full

consideration from the plaintiff. Even when we consider the pleadings

and the averments in the plaint, it appears that the plaintiff was never

willing to get the sale deed executed with tenants and/or as it is. It was

the insistence on the part of the plaintiff to deliver the vacant possession

after evicting the tenants. Therefore, on the basis of the pleadings in the

plaint and on appreciation of evidence, the learned Trial Court held the

issue of willingness against the plaintiff. However, before the High

Court, the plaintiff filed an affidavit stating that he is now ready and

willing to get the sale deed executed with respect to the property with

tenants and unfortunately, the High Court relying upon the affidavit in the

first appeal considered that as now the plaintiff is ready and willing to

purchase the property with tenants and get the sale deed executed with

respect to the property in question with tenants, the High Court has

allowed the appeal and decreed the suit for specific performance. The

aforesaid procedure adopted by the High Court relying upon the affidavit

in a First Appeal by which virtually without submitting any application for

amendment of the plaint under Order VI Rule 17 CPC, the High Court as
15
a First Appellate Court has taken on record the affidavit and as such

relied upon the same. Such a procedure is untenable and unknown to

law. First appeals are to be decided after following the procedure to be

followed under the CPC. The affidavit, which was filed by the plaintiff

and which has been relied upon by the High Court is just contrary to the

pleadings in the plaint. As observed hereinabove, there were no

pleadings in the plaint that he is ready and willing to purchase the

property and get the sale deed executed of the property with tenants and

the specific pleadings were to hand over the peaceful and vacant

possession after getting the tenants evicted and to execute the sale

deed. The proper procedure would have been for the plaintiff to move a

proper application for amendment of the plaint in exercise of the power

under Order VI Rule 17 CPC, if at all it would have been permissible in a

first appeal under Section 96 read with Order XLI CPC. However,

straightaway to rely upon the affidavit without amending the plaint and

the pleadings is wholly impermissible under the law. Therefore, such a

procedure adopted by the High Court is disapproved.

The learned Trial Court held the issue of willingness against the

plaintiff by giving cogent reasons and appreciation of evidence and

considering the pleadings and averments in the plaint. We have also

gone through the averments and the pleadings in the plaint and on

considering the same, we are of the opinion that the learned Trial Court
16
was justified in holding the issue of willingness against the plaintiff. The

plaintiff was never ready and willing to purchase the property and/or get

the sale deed executed of the property with tenants. It was for the first

time before the High Court in the affidavit filed before the High Court and

subsequently when the learned Trial Court held the issue of willingness

against the plaintiff, the plaintiff came out with a case that he is ready

and willing to purchase the property with tenants. For the purpose of

passing the decree for specific performance, the plaintiff has to prove

both the readiness and willingness. Therefore, once it is found on

appreciation of evidence that there was no willingness on the part of the

plaintiff, the plaintiff is not entitled to the decree for specific performance.

Therefore, in the present case, the learned Trial Court was justified in

refusing to pass the decree for specific performance.

9. The submission on behalf of the plaintiff that in the agreement a

duty was cast upon the defendant to evict the tenants and to handover

the vacant and peaceful possession, which the defendant failed and,

therefore, in such a situation, not to pass a decree for specific

performance in favour of the plaintiff would be giving a premium to the

defendant despite he having failed to perform his part of the contract.

The aforesaid seems to be attractive but for the purpose of passing a

decree for specific performance, readiness and willingness has to be

17
established and proved and that is the relevant consideration for the

purpose of passing a decree for specific performance.

10. Now, so far as the submission on behalf of the plaintiff that even

the defendant has not refunded the amount of Rs.3,60,001/- with interest

@ 18% as ordered by the learned Trial Court concerned, the order

passed by the learned Trial Court is very clear and the defendant is

saddled with the law to pay the interest @ 18% till its realization.

Therefore, the plaintiff is compensated by awarding 18% interest. His

not refunding the amount of part sale consideration with 18% interest as

ordered by the learned Trial Court cannot be a ground to confirm the

impugned judgment and order passed by the High Court. The plaintiff as

such could have filed an execution petition to execute the

judgment/decree passed by the learned Trial Court. Further, we propose

to issue a direction to the appellant – original defendant directing him to

refund the amount of Rs.3,60,001/- with 18% interest from the date of

the agreement till the date of realization within a period of eight weeks

from today.

11. In view of the above and for the reasons stated above, both the

appeal succeeds. The impugned judgment and order passed by the

High Court of judicature at Madras in Appeal Suit No. 94 of 2010 is

hereby quashed and set aside and the judgment and decree passed by
18
the learned Trial Court stands restored. However, in the facts and

circumstances of the case, the appellant herein original defendant is

directed to refund the amount of Rs.3,60,001/- with 18% interest from

the date of agreement till realization within a period of eight weeks from

today. Appeals are allowed to the aforesaid extent, however, there shall

be no order as to costs.

Pending applications, if any, also stand disposed of.

………………………………….J.

                                            [M.R. SHAH]



NEW DELHI;                              ………………………………….J.
OCTOBER 04, 2021.                          [A.S. BOPANNA]




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