Kerala High Court
Rajalakshmy Rajagopal,(Died) Legal … vs Leela Kidavu on 30 May, 2025
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE EASWARAN S.
TH
FRIDAY, THE 30 DAY OF MAY 2025 / 9TH JYAISHTA, 1947
RSA NO. 1224 OF 2013
AGAINST THE JUDGMENT AND DECREE DATED 12.07.2013 IN AS
NO.105 OF 2011 OF THE II ADDITIONAL DISTRICT COURT,
KOZHIKODE ARISING OUT OF THE JUDGMENT AND DECREE DATED
05.03.2011 IN OS NO.314 OF 2005 OF THE SUB COURT,
KOZHIKODE.
APPELLANTS/APPELLANTS/PLAINTIFFS:
1 RAJALAKSHMY RAJAGOPAL,(DIED)
LEGAL HEIRS RECORDED, AGED 63 YEARS
W/O.LATE SHRI.M.C.RAJAGOPAL, CIFA APARTMENTS
MANGALA DEVI ROAD, NEAR MONKEY STOP,
MANGALORE.
(APPELLANTS 2 TO 4 ARE RECORDED AS LEGAL HEIRS
OF DECEASED 1ST APPELLANT AS PER ORDER DATED
26.08.2022 IN IA.2/2022.)
2 RAJESH RAJAGOPAL
AGED 42 YEARS, S/O.LATE SHRI.M.C.RAJAGOPAL,
CIFA APARTMENTS MANGALA DEVI ROAD,
NEAR MONKEY STOP, MANGALORE.
3 ANURADHA RAJAGOPAL
AGED 37 YEARS, D/O.LATE SHRI.M.C.RAJAGOPAL,
CIFA APARTMENTS MANGALA DEVI ROAD,
NEAR MONKEY STOP, MANGALORE.
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4 PRASAD RAJAGOPAL
AGED 35 YEARS, S/O.LATE SHRI.M.C.RAJAGOPAL,
CIFA APARTMENTS MANGALA DEVI ROAD,
NEAR MONKEY STOP, MANGALORE.
BY ADV SRI.K.P.SREEKUMAR
RESPONDENTS/RESPONDENTS/PLAINTIFFS:
1 LEELA KIDAVU
AGED 62 YEARS, D/O.LATE SMT.SUSHEELA, FLAT
NO.6, GATEWAY RESIDENCY, NEAR STATE BANK OF
INDIA, CIVIL STATION.P.O., CALICUT-20.
2 USHA SREENIVASAN
AGED 55 YEARS, D/O.SUSHEELA, T/11 SAI KRIPA,
HUNDRED STREET, TARAMANI ROAD, VELACHERRY,
CHENNAI-600 042.
3 GEETHA GOPAKUMAR
AGED 49 YEARS, D/O.LATE SMT.SUSHEELA, SAI
KRIPA, MULLAKKAL TEMPLE ROAD, EROOR WEST,
TRIPUNITHURA, COCHIN. 682 306.
4 KERALA STATE HOUSING BOARD
CALICUT UNIT, REPRESENTED BY ITS REGIONAL
ENGINEER, KERALA STATE HOUSING BOARD
DIVISIONAL OFFICE, KOZHIKODE-673 006.
BY ADVS.
SMT.P.VANDANA, FOR R1 TO R3
SRI.DENNY DEVASSY, FOR R4
SHRI.RAMANARAYANAN G., FOR R1 TO R3
THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY
HEARD ON 30.05.2025, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
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"C.R"
EASWARAN S., J
--------------------------------
R.S.A No.1224 of 2013
-------------------------------
th
Dated this the 30 day of May, 2025
JUDGMENT
The defendants in O.S No.314 of 2005 before the
Sub Court, Kozhikode, in a suit for specific performance
are the appellants herein.
Succinctly stated the facts are as follows:
2. The plaint schedule property was a subject
matter of an agreement dated 22.01.1979 between the
predecessor-in-interest of the defendants and Kerala
State Housing Board. By virtue of the said agreement, the
Kerala State Housing Board agreed to transfer plot
No.M-10-11 in Chevayur Village, Kozhikode Taluk, having
an extent of 2 Ares 24 Square Meters. Pursuant to the
said agreement, the predecessor-in-interest of the
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defendants entered into an agreement of sale with oneSmt.K.Suseela. The respondents herein, are the
predecessor-in-interest of Smt.K.Suseela. Going by the
agreement, the predecessor of the appellants agreed to
transfer the plot to the predecessor of the plaintiffs, after
getting the necessary documents for transfer from the
Kerala State Housing Board. The parties were in serious
variance as regards the modality of performing the
contract. Therefore the predecessor of the defendants did
not complete the contract by executing necessary
conveyance in favour of Smt.K.Suseela, who is the
predecessor-in-interest of the plaintiffs. Hence, the
plaintiff issued a lawyer’s notice on 01.02.2005 calling
upon the defendants to perform the contract. On
02.03.2005, the defendants issued a reply notice,
wherein they refused to perform the contract and
therefore the plaintiffs filed O.S No.314/2005 before the
Sub-Court, Kozhikode. The defendants entered
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appearance and contested the suit and contended that
the suit for specific performance is barred by limitation. It
was further contended that, at the time of execution of
Ext.A2, the predecessor of the defendants had no right
title to be conveyed and therefore the agreement is hit by
the provisions contained under Section 17 of the Specific
Relief Act, 1963. It was further contended that though it
was agreed between the parties that the predecessor of
the plaintiff would discharge the entire liability to the
Housing Board, there was a default and that was the
reason why the conveyance was not executed. Reference
was made to the letter dated 25.11.2009, issued by the
Housing Board to the plaintiff to discharge the final
outstanding amount under Ext.A2 contract. According to
the defendants, the aforesaid amount was discharged by
them and therefore the plaintiffs have no right to claim
the execution of the agreement. As regards the prayer
sought for in the plaint, for a decree against the Housing
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Board to execute the Sale Deed, it was contended that
inasmuch as there is no privity of contract between the
supplemental 5th defendant-Board and the plaintiffs, the
suit for specific performance is not maintainable. In
support of the pleadings, Ext.A1 to A10 documents were
produced on behalf of the plaintiff and PW1 was
examined. On behalf of the defendants Exts.B1 to B6
documents were produced and DW1 was examined. In
the light of the rival contentions, the Trial Court framed
the following issues:-
1. Whether the suit is maintainable?
2. Whether the suit is bad for non joinder of
necessary parties?
3. Whether the suit is barred by limitation?
4. Whether the plaintiffs are entitled to get a decree
for specific performance as prayed for?
5. Whether the plaintiffs are entitled to get
damages from the defendants as prayed for?
6.Relief and cost?
3. The Trial Court proceeded to hold that the suit
was within the period of limitation and further found that
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in the light of the agreement entered between the parties
the plaintiffs are entitled to a decree for specific
performance. Accordingly, decreed the suit. Aggrieved by
the same, the appellants preferred A.S No.105/2011
before the II Additional District Court, Kozhikode. In
appeal the First Appellate Court rejected the contention
of the appellants that the suit is barred by limitation and
held that since no period is fixed in the contract for sale,
the suit is not hit by Article 54 of the Limitation Act, 1963.
It was further held that the plaintiffs were entitled for a
decree for specific performance under Section 20 of the
Specific Relief Act. It is aggrieved by the dismissal of the
appeal, the defendants have come up with the present
appeal.
4. Heard Shri.K.P.Sreekumar, learned counsel
appearing for the appellants and Smt.P.Vandana, the
learned counsel appearing for the plaintiffs.
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5. Shri.K.P.Sreekumar, the learned counsel
appearing for the appellants, primarily contended that
both the Trial Court as well as the First Appellate Court
misread the provision of Article 54 of the Limitation Act.
According to the learned counsel, even if no period is
fixed for performance of contract, even then a suit for
specific performance will have to confirm to the rigour of
Article 54 of the Limitation Act. It is further pointed out
that a reading of clause 21 of Ext.A2 agreement would
specifically show that there is a total inhibition on the
part of the predecessor of the defendants from entering
into any contract for assignment of the rights covered
under Ext.A2. In the light of the specific embargo, the suit
was clearly hit by provisions of Section 17 of the Specific
Relief Act. It is further pointed out that the plea of the
plaintiffs that the suit is not barred by limitation cannot
be accepted since in the cross examination of PW1, it was
specifically admitted that the Housing Board will not
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grant no objection for execution of the Sale Deed and the
agreement was entered with full knowledge regarding the
embargo. It is further pointed out that DW1, during her
cross examination specifically deposed that during
August 1991, late Susheela had approached her for
execution of the Sale Deed and the defendants had
refused and therefore the starting point of limitation was
from 1991 and not from 2005, when the lawyer’s notice
was issued.
6. Smt P.Vandana, learned counsel for the
plaintiffs, would however contend that, the suit is
preferred well within the period of limitation. According to
the learned counsel, the plaintiffs are entitled to prefer
the suit within a period of three years from the date of
refusal. The date of refusal in the present case was from
02.03.2005, when the reply notice was issued by the
defendants. It is further pointed out that after the
execution of Ext.A2 agreement, there was a clear
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understanding between the parties to the effect that the
predecessor of the plaintiffs would discharge the entire
liability under Ext.A2. A period of 15 years was in fact
fixed for discharging of the aforesaid liability and
therefore, the plaintiffs were entitled to wait till the entire
amounts were paid under the agreement to the Housing
Board. It is further pointed out that the fact that the
plaintiffs have paid the entire amount cannot be
disputed. The last payment was made on 02.03.1999.
The plaintiffs waited for filing the suit only on a belief that
the defendants would honour the terms and conditions of
the contract. Though Ext.A2 was executed by the
predecessor of the defendants, under clause 6 of Ext.A3
agreement, the same will be binding on the legal heirs
and successor-in-interest. Therefore, the learned counsel
submitted that the concurrent findings of the fact by the
courts below are not liable to be interfered with by this
Court in exercise of the powers under Section 100 of
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Code of Civil Procedure.
7. I have considered the rival submission raised
across the bar and perused the records.
8. While admitting the appeal this Court had
framed following substantial questions of law for
consideration:-
1. In case of violation or non performance of Ext.A3
agreement, the parties themselves have agreed to
limit their remedy for compensation, will a suit of this
nature is maintainable after 26 years from the date
of Ext.A3?
2. The disinclination on the part of the defendants to
perform Ext.A3 having been noticed admittedly long
years back, are not the Courts below erred in not
refusing relief to the plaintiff on the ground that the
suit is barred by time?
3. Are the Courts below right in granting a decree to
the plaintiffs who admittedly knew that in respect of
a property alleged to have been offered for sale, the
seller has no saleable interest on the date of Ext.A3
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agreement?
4. When it is stipulated that as per agreement Ext.A2
between the seller and the Housing Board that until
execution of the final sale deed for the property and
the building thereon in favour of the seller, the
ownership will continue with the Housing Board, can
such an agreement confer title on the seller to agree
for sale of such a contingent right?
9. The primary question that falls for
consideration before this Court is whether the suit is
barred by limitation. The suit for specific performance has
to be filed within three years from the date fixed for
performance or from the date of refusal ,which is to the
knowledge of the plaintiff. Article 54 of the Limitation Act
1963 reads as under:-
Description of suit Period of Time from which period
limitation begins to run
54 For specific Three Years The date fixed for the
performance of a performance, or, if no
contract such date is fixed, when
the plaintiff has noticed
that performance is
refused.
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10. In the present case, the suit is filed for a
specific performance of Ext.A3 agreement. Ext.A3 was
executed between one M.C.Rajagopal, predecessor-in-
interest of the defendant and Smt.Susheela, predecessor-
in-interest of the plaintiff on 07.12.1979. The decision of
this Court on the substantial question of law framed as
above would basically depend upon the construction of
Ext.A3. In order to appreciate the rival submissions made
across the Bar, it is felt that certain clauses in Ext.A3 be
extracted.
(1) The second executant shall pay all future instal-
ments amounting in all to Rs.43,000/- (Rupees forty
three thousand only) with interest due from the first
executant to the Kerala State Housing Board regularly
without any default, and shall also pay land revenue,
building tax, electricity and water charges and all
other taxes, cesses etc. due in respect of the
property.
(2) The first executant agrees to execute all
documents necessary for transfer of the property by
the Kerala State Housing Board to the second
executant directly and to do all things necessary for
securing such transfer; and if this is not possible due
to any reason, to execute and register a sale deed in
favour of the second executant after getting the sale
deed in his favour from the Kerala State Housing
Board.
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(3) The first executant agrees to obtain the original
Agreement for Sale dated 22.01.79 between the
Kerala State Housing Board and himself and to hand
the same over to the second executant.
(4) The first executant agrees to inform the second.
executant of any notice, letter or other
communication which he receives from the Kerala
State Housing Board in respect of the property,
immediately on such receipt.
(5) If either party to this agreement defaults in the
performance of their respective obligations under this
agreement, the defaulting party shall be liable to
compensate the other for the loss suffered by the
other.
11. On an entire reading of Ext.A3, with specific
reference to clauses 2,3,4 and 5 would give an
impression that parties never intended to treat the time
as an essence of the contract. But, can it be said that
even if the parties never intended to treat the time as an
essence of the contract, the suit instituted after expiry of
26 years is not barred by limitation. The answer to the
question would lie on the appreciation of the evidence
adduced by the parties. As stated above, Ext.A3 was
preceded by execution of Ext.A2 between the
predecessor-in-interest of the defendants as well as the
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Kerala State Housing Board. The specific reference to
clause 2 and 5 in Ext.A3 would show that the condition
for execution of a registered conveyance deed was that,
the receipt of the original sale deed from the Kerala State
Housing Board. Interestingly, none of the parties chose to
write the bargain in writing, so as to enable either party
to approach the Civil Court and obtain a decree for
specific performance of the contract. It is also when, in
clause 5 it is specifically stated that if either party
defaults in performance, the other party shall be liable to
compensate, the party complaining the loss.
12. Right to seek specific performance of agreement
need not be observed in an agreement of sale. But,
reserving such a right will shed clarity to the rights of the
parties. In the absence of such a clause, a cloud is
created on what actually the parties intended. Here in
this case, parties were quite aware of the defect in the
title of late M C Rajagopal. The absence of clause
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enabling the parties to get specific performance of the
contract, is certainly an indicative factor as regards the
cloud in the title of vendor.
13. That said, it will be imperative for this court to
decide, whether even in absence of a clause reserving
the parties to an agreement to seek enforcement of a
contract, can a party maintain the suit for specific
performance. Prima facie, there cannot be any doubt as
regards the entitlement of a party to approach the civil
court for specific performance would not depend on the
presence of such a clause in a contract of sale. This is
because Section 20 of the Specific Relief Act 1963 is a
statutory right which cannot be curtailed by agreement.
But, even then, the right under Section 20 of the Specific
Relief Act 1963 is not an unqualified right. It would
certainly depend on other extenuating circumstances.
14. One of the important factors for maintaining a suit
for specific performance of a contract of sale is definitely
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the ‘title of the vendor’. If the parties consciously enter
into an agreement for sale, knowing fully well that the
vendor had no conveyable right on the property or that
the right was qualified in certain aspects, then the court
cannot grant specific performance of a contract. Thus,
the entitlement to file a suit for specific performance
must be judged in the context of a presence of a
crystallized right of the vendor in the property. How far
the vendor, late M.C.Rajagopal had tile over the plaint
schedule property at the time of execution of agreement
of sale will form the crux of this Judgment and will be
discussed in the preceding paragraphs.
15. As far as the plea of limitation is concerned,
one must remember that the plaintiff has sought to
sustain the suit solely based on the issuance of reply
notice whereby the demand for specific performance of
the agreement was refused. On contrary, the defendants
contend that, during the cross examination of DW1 it has
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come out in evidence that during August 1991, late
Susheela approached the plaintiffs for execution of a Sale
Deed, which was not accepted since defendants wanted
to see the original of the sale agreement. The plaintiff
had no case that the said statement is not true. In other
words, in the absence of any contra evidence led in by
the plaintiff to disprove the fact that after 1991 till 2005,
they had at any time demanded the defendants to
perform the contract and there was refusal only during
2005, it must be held that the suit did not satisfy the
requirements of second part of Article 54 of the Limitation
Act 1963.
16. The learned counsel for the plaintiffs made a
fervent plea to get over the question of limitation,
pointing out that since the parties were required to
discharge the liability over a period of 15 years and the
plaintiff were entitled to reckon and set off the said
period towards the limitation. Though, it may be true that
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from 1979 onwards till 1994 a period of 15 years was
prescribed for the purpose of discharging the liability
under Ext.A2 agreement, that by itself will not enable the
plaintiff to tide over the period of limitation. Even
assuming for argument’s sake, that 15 years was
provided for payment of amount to the 5th defendant
Housing Board, the period expedited by 1994 and the suit
was filed only in year 2005 and it has come out in
evidence that, on 02.03.1999 the entire liability under
Ext.A2 agreement was discharged. That be so, the
plaintiffs ought to have filed the suit at any rate
immediately after 02.03.1999 or at any rate within a
period of three years from August 1991, when there was
a clear refusal on the part of the defendants to perform
the contract. Having not done so, the plaintiffs cannot
rely on the issuance of the lawyer’s notice and contended
that the suit was perfectly maintainable.
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17. In Rathnavathi and Another v. Kavitha
Ganashamdas [2015 (5) SCC 223], the Supreme Court
held that the period of limitation prescribed under Article
54 would start to run from the date of refusal to perform
the contract of sale. In the present case, when there is
clear evidence to show that in August 1991 there was a
clear refusal on the part of the defendants to perform the
contract, the suit filed on 13.09.2005 was clearly barred
by the limitation. Accordingly, the first question of law is
answered by saying that the suit O.S No.314/2005 is
barred by limitation.
18. As regards the substantial question of law 2, 3
and 4 is concerned, this Court finds that these questions
could be considered commonly. The evidence in this case
as indicated above clearly showed the disinclination on
the part of the defendants to perform Ext.A3. Therefore,
the trial court ought not have decreed the suit as prayed
for. That apart, when the evidence of PW1 is read closely,
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it is evident that there is a clear admission that her
mother had signed the agreement for sale knowing fully
well that the Housing Board will not grant sanction for the
sale of the property. The relevant portion of the oral
testimony of the PW1 is extracted as under:-
“അങ്ങനെ സമ്മതം കൊടുക്കില്ലെന്നു Housing Board ൽ നിന്നും
പറഞ്ഞു. Housing Board ൻറെ സമ്മതം കൊടുക്കില്ലെന്നു അറിഞ്ഞു
കൊണ്ടാണു അമ്മ Ext.A3 കരാറിൽ ഒപ്പിട്ടതു.”
19. It is in this context, that close 21 of Ext.A2 has
to be appreciated. Clause 21 is extract as hereunder:-
(21) The party of the second part shall not assign
any of his right, lot, transfer for part with the
possession of the whole or any part of the
building or of the property without the prior
written permission of the Board. The Board shall
not be bound to recognise any such transfer or
assignment in favour of the third parties and
notwithstanding such purported assignment done
contrary to these conditions mentioned above,
the party of the second part shall continue to be
liable to the Board for all the obligations
contained in this indenture.
20. A reading of the aforesaid clause would clearly
show that late M.C Rajagopal was under a solemn
obligation not to assign any of his rights or transfer any
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part with the possession of the property scheduled in the
agreement. In the context where, the enforceability of an
agreement of sale is called into question, the power of
the court to grant a decree for specific performance is
highly doubtful. The proposition of law is elaborated with
reference to the infirmity in the title as pleaded by the
parties.
21. The power of the court to grant specific
performance of an agreement entered by a vendor who
has no title over the property, is dealt under Section 17
of the Specific Reliefs Act, 1963.
Section 17 of the Specific Reliefs Act, reads as follows:-
Contract to sell or let property by one who has no
title, not specifically enforceable-
(1) A contract to sell or let any immovable property
cannot be specially enforced in favour of a vendor
or lessor-
(a) who, knowing himself not to have any title to the
property, has contract to sell or let the property;
(b) who, though he entered into the contract
believing that he had a good title to the property,
cannot at the time fixed by the parties or by the
court for the completion of the sale or letting, give
the purchaser or lessee a title free from reasonable
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doubt.
(2) The provisions of sub-section (1) shall also
apply, as far a may be, to contracts for the sale or
hire of movable property.
22. A reading of Section 17(1)(a) shows that the
contract to sell immovable property cannot be enforced,
if the vendor had no prior title to the property. In the
present case, as stated above, the entitlement of the
plaintiffs to seek a specific performance in terms of
Section 20 will have to be judged along with the
provisions of Section 17. As stated , in Ext.A3 deed,
there is no specific reservation of the right to the parties
to approach the Civil Court for enforcement of the
contract. Perhaps, it is because of the inherent lack of
authority to transfer the rights over the plaint schedule
property that the parties had not reserved the right.
Therefore, though the statute prescribes an independent
right under Section 20 to approach the Civil Court for a
suit for a specific performance, the right is not unqualified
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and would operate subject to the reservations as
provided under Section 17.
23. In Waheed Baig v. Bangi Lakshmamma
and Others; [(2008) 14 SCC 435], the Hon’ble Supreme
Court considered the scope of Section 17 of the Specific
Relief Act, 1963, and held that in contract of sale, if it is
found that the vendor had no alienable right, the specific
performance of the contract has to be refused. The said
principle was reiterated by the Supreme Court in
Pemmada Prabhakar and Others v. Youngmen’s
Vysya Association and Others [(2015) 5 SCC 355].
24. A reading of the judgment of the Trial Court as
affirmed by the First Appellate Court shows that the
intricacies of law which has presented itself in these
appeals and before the courts below were not
appreciated in the right manner, leading to an irresistible
conclusion that both the judgments are unsustainable
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and requires interference by this Court.
25. Resultantly, answering the questions of law 2, 3
and 4 in favour of the appellant, this Court holds that
Ext.A3 contract of sale is unenforceable under the law in
the light of the specific bar under Section 17 of the
Specific Relief Act, 1963 and hence the suit was not
maintainable.
26. Before parting with this case, this court needs
to address one final point raised by the learned counsel
for the plaintiffs. According to the learned Counsel, the 5 th
defendant had no objection in executing the sale deed in
favour of the plaintiff and thus the suit was maintainable.
However, this court is afraid that the said contention is
completely misconceived inasmuch there was no privity
of contract between them and the Kerala State Housing
Board. Though, the learned counsel for the plaintiffs
fervently took PW4 to this Court to refer to the answer to
the interrogatories sought for by the plaintiffs, wherein
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the Kerala State Housing Board has admitted that they
had no objection in transferring the property to the
plaintiffs. This Court is afraid that the answer given by
the Kerala State Housing Board to the interrogatories
by itself, will not constitute a contract which enables
them to seek specific performance under Section 20 of
the Specific Relief Act, 1963.
27. Viewed in the above perspective, this Court has
no hesitation to hold that the judgments of the Courts
below though concurrently found against the appellant
are unsustainable in law.
Accordingly, the appeal is allowed. The Judgments of
the courts below are thus set aside and the suit stands
dismissed. No order has to cost.
Sd/-
EASWARAN S.
JUDGE
AMR