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Suvarnamma Vs. B. Mukunda Rao - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtKarnataka High Court
Decided On
Case NumberMisc. First Appeal No. 1016 of 1977
Judge
Reported inAIR1979Kant150; ILR1979KAR1344; 1979(2)KarLJ25
ActsCode of Civil Procedure (CPC), 1908
AppellantSuvarnamma
RespondentB. Mukunda Rao
Excerpt:
.....the municipal taxes and other charges due on the suit property till the date of execution of the sale deed and to do all other things necessary to effectively transfer the title over the suit property to the plaintiff. --(1) the plaintiff has failed to prove that she was ready and willing to perform her part under the agreement of sale. (2) the plaintiff has failed to prove that the defendant backed out and did not come forward to perform his part of the agreement. (4) the plaintiff has failed to prove that the consequences of breach of contract as mentioned in the deed of agreement were not intended to the acted upon. it is well settled that normally the costs follow the event and the plaintiff was entitled to the costs. the first defendant company does not wish to appeal from the..........and then he would give actual possession of the whole building at the time of the execution of the sale deed. he had further undertaken to attorn the two tenants, who are in occupation of the out-houses, to the plaintiff. it is further the case of the plaintiff that the defendant promised to get a sale deed executed in three months' time from the date of the agreement at mysore and receive the balance of the consideration of rs. 50,000/- at the time of registration.it is also the plaintiff's case that the defendant had undertaken to furnish to the plaintiff the capital gains tax clearance certificate and to pay the municipal taxes and other charges due on the suit property till the date of execution of the sale deed and to do all other things necessary to effectively transfer the title.....
Judgment:

P.P. Bopanna, J.

1. This appeal was heard in part on merits a couple of months ago and since we found this a fit case for settlement out of Court, on the request of the counsel for the respective parties, we gave them sufficient time for effecting a compromise. However, the counsel having represented that a compromise is not possible on account of the rigid stand taken by the parties, we have heard the matter fully on merits and we have no hesitation in holding that for the reasons to be hereinafter stated, this appeal deserves to be dismissed.

2. The defendant in the trial court is the owner of the suit schedule premises and by an agreement dated 8-2-1975 with the plaintiff; he agreed to sell the property for a sum of Rs. 80,000/- and also received a sum of Rs. 30,000/- on the same day towards part payment of the sale consideration. It is the case of the plaintiff that on the date of the agreement itself, the defendant gave actual possession of the northern portion of the main building and one vacant room on the southern side in the compound in part performance of the agreement of sale. Further, the defendant promised that the remaining portion of the main building in which there was a tenant by name G. N. Chakravarthi, would be given to the plaintiff after getting the said tenant evicted by March or April 1975 and then he would give actual possession of the whole building at the time of the execution of the sale deed. He had further undertaken to attorn the two tenants, who are in occupation of the out-houses, to the plaintiff. It is further the case of the plaintiff that the defendant promised to get a sale deed executed in three months' time from the date of the agreement at Mysore and receive the balance of the consideration of Rs. 50,000/- at the time of registration.

It is also the plaintiff's case that the defendant had undertaken to furnish to the plaintiff the capital gains tax clearance certificate and to pay the municipal taxes and other charges due on the suit property till the date of execution of the sale deed and to do all other things necessary to effectively transfer the title over the suit property to the plaintiff. It is further alleged by the plaintiff that the agreement (which was produced along with the plaint) provided that in case of default by the plaintiff, she would forfeit Rs. 5,000/- and also pay Rs. 100/- per month as rent by way of damages to the defendant for the portion of the suit property in her occupation and in case of default by the defendant, he would return the advance of Rs. 30,000/- with Rs. 5,000/- as penalty and also pay interest at 8% per annum on Rupees 25,000/- to the plaintiff. It is seen from para 6 of the plaint that these terms, though incorporated in the agreement, were not treated by wither party as essential terms of the contract nor have they been acted upon. The other averments in the plaint are not very material for the purpose of this case since the point for decision in this appeal is whether the plaintiff is entitled to the costs of the suit from the defendant since the order of the Court below is that the parties should bear their respective costs.

3. The defendant resisted the suit on various grounds. He has admitted that he had agreed to sell the suit property to the plaintiff as per Exhibit P. 1 but has denied that the promised to give vacant possession of the portion in the occupation of Chakravarthy. He has pleaded that he was ready and willing to perform his part of the contract and the transaction could not be completed since the plaintiff herself did not come forward with the balance of sale consideration.

4. On the pleadings of the parties, the trial Court framed as many as six issues as follows:--

(1) Does the plaintiff prove that she was ready and willing to perform her part under the suit agreement of sale ?

(2) Does the plaintiff prove that defendant backed out and did not come forward to perform his part of the agreement ?

(3) Does the defendant prove that he was ready and did all that was necessary to complete the transaction of sale as agreed upon ?

(4) Does the plaintiff prove that the consequences of breach of contract by either party as mentioned in the deed of agreement were not intended to be acted upon ?

(5) Is the plaintiff entitled to the specific performance sought ?

(6) To what reliefs, are the parties entitled ?

Additional issue No. (1); Does the plaintiff prove that the defendant had agreed to deliver vacant possession of the rest of the main building in the occupation of the tenant Sri G. N. Chakravarthy, at the time of the execution of the sale deed as alleged ?

On these issues, the trial Court held:--

(1) The plaintiff has failed to prove that she was ready and willing to perform her part under the agreement of sale.

(2) The plaintiff has failed to prove that the defendant backed out and did not come forward to perform his part of the agreement.

(3) The defendant has proved that he was ready and willing to complete the sale transaction as agreed upon.

(4) The plaintiff has failed to prove that the consequences of breach of contract as mentioned in the deed of agreement were not intended to the acted upon.

(5) The plaintiff is entitled to the specific performance of the agreement referred to above.

The trail Court found that the suit for specific performance was premature since the defendant was all the while ready and willing to execute a sale deed and, in fact, approached both the plaintiff and her advocate for that purpose and got even a draft prepared as per Exhibit P. 5. Further, the trial Court referred to the decision of the Calcutta High Court in Nazibar Rahman Molla v. Dilip Kumar Roy (AIR 1977 NOC (Cal) 91) that where the circumstances show that the plaintiff committed laches and was not ready and willing, even though time is not the essence of the contract, the Court has the discretion to dismiss a suit for specific performance; but it felt that this is an extreme view which may cause hardship to both parties.

Since, in its view, both the parties were ready in this case to forget the past actions and to get the sale deed executed as agreed in Exhibit P. 1, the trial Court held that the plaintiff is entitled to the specific performance as sought by her. At the same time, it made it clear that the decree for specific performance is not because of the fault of the defendant and, therefore, it used its discretion in not saddling the defendant with the costs of the suit inasmuch as he appeared to be ready and willing to perform his part of the contract. It is well settled that normally the costs follow the event and the plaintiff was entitled to the costs. At the same time, the Court has the discretion to award costs by exercising the same judiciously, and as rightly held by the trial Court, the award of costs is not an abstract rule of law. For these reasons, the Court below ordered both the parties to bear their respective costs. However, in appeal, the plaintiff instead of challenging the findings recorded against her on issues 1 to 4, has challenged only that portion of the decree disallowing the costs.

5. A preliminary objection has been taken by the respondent-defendant that the appeal in the form in which it is filed by the plaintiff is not maintainable inasmuch as the appeal is only against a portion of the decree relating to costs and not against the other findings given by the trial Court against the plaintiff. In support of this objection, Mr. H. N. Narayan, learned counsel for the respondent-defendant, has relied on the decision of the Bombay High Court in Dinanath Narpatrai v. Divanchand (No. 2) (AIR 1930 Bom 445). In that case, a suit filed in Bombay was stayed with liberty to file a fresh suit, saddling the plaintiff with the costs of the suit incurred by the defendants. The order for costs was based substantially on the ground that the suit was vexatious and oppressive. Against that order, the plaintiff appealed and the Court held that the plaintiff having accepted the order of stay and acted upon it by filing a suit in Cawnpore, could not challenge the order relating to costs. Chief Justice Marten, with whom Justice Blackwell concurred, dealing with the argument of the Advocate General, observed as follows:--

'But in the present case until we are in a position to set aside the learned Judge's order as to a stay, we are not in a position to challenge the grounds on which he made that order for a stay. On a mere question of costs we can only challenge those grounds, if we are also in a position to challenge them as regards the main order for a stay. Therefore on principle we think that the appellant cannot blow hot and could in this way, and that having accepted the stay order and acted under it, he cannot now challenge the grounds on which that order was made.'

It may be noted that this decision cannot be a direct authority on the objection raised by Mr. Narayan since the Court was seized of an order of the Bombay High Court on the original side and not a decree. Mr. Narayan also relied upon the decision of a learned Single Judge of the Allahabad High Court in Krishnerhwari v. Ramesh Chandra : AIR1965All228 . In that case, the Court, while dismissing the suit of the plaintiff, directed the parties to bear their own costs. The plaintiff appealed against the decree as a whole and the defendant filed cross-objections for disallowing costs. The Court observed as follows (at p. 231):-

'Lastly, the cross-objection filed by the defendant-respondent in respect of the disallowance of costs has no validity or merit. No appeal on the question of costs lies and a fortiori no cross-objection on such a ground can be filed, for the simple reason that the award of costs is primarily in the discretion of the Court and in all the circumstances of the case, the Court had rightly left the parties to bear their own costs.'

6. We cannot takes this as an authority for the proposition of Mr. Narayan since this decision does not give any reason why an appeal only on the question of costs does not lie nor do we find any authority or consideration of the relevant provisions of the Civil P. C. Per contra, Mr. Papanna, learned counsel for the respondent, relied on the decision in Aspee (India) Ltd. V. M. L. Dahanukar and Co. Ltd. : AIR1954Bom35 . The decision in Dinanath Narpartrai's case (AIR 1930 Bom 445) on which reliance was placed by Mr. Narayan, was considered by Chief Justice Chagla in the aforesaid case and he made a distinction between an appeal from a decree for costs and from an order for costs passed on the original side of the Bombay High Court. Mr. Papanna has relied on this decision to support the view that an appeal is maintainable from a part of a decree relating to costs. A closer scrutiny into the facts of this case does support the contention of Mr. Papanna apart from the fact, as incidentally brought out by Chagla, C. J., that legal luminaries and learned commentators in days of yore did make mistakes on points which apparently looked simple.

In that case a learned single Judge on the original side of the High Court, while dismissing the plaintiff's suit, deprived the first defendant-Company of the costs of the suit on the ground that by going into liquidation it terminated the retainer of its counsel and the suit was not prosecuted by the plaintiffs. The defendants appealed against the decree disallowing costs and the objection taken by Mr. S. V. Gupta, the present Attorney-General, in that case was that the appeal was not maintainable as the order of costs made by the learned Judge is not a 'judgment' within the meaning of Clause 15 of the Letters Patent. This objection was overruled by the Court taking the view that it had consistently accepted the construction placed upon the expression 'judgment' by the Calcutta High Court in Justices of the Peace for Calcutta v. Oriental Gas Co. ((1872) 8 Beng LR 433 at p. 452) and the interpretation placed by Chief Justice Couch in that case as follows:-

'We think 'judgment' in Clause 15 means a 'decision'........... which affects the merits of the question between the parties by determining some right or liability.'

Chagla, C. J., speaking for the Court further observed:--

'When we turn to the definition of 'decree' under Civil P. C., 'decree' is defined as the formal expression of an adjudication which so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. Therefore, when a decree is passed as defined by the Code, it must constitute the determination of the rights of parties. Now, to the extent that the decree deals with the question of costs, it conclusively determines the rights and liabilities of parties with regard to costs. In this case the first defendant company's contention is that it was entitled to the costs of the suit inasmuch as the plaintiffs did not prosecute the suit against it. When Shah, J., deprived the first defendant-company of its costs of the suit he conclusively determined the right of the first defendant company with regard to the costs of the suit. Therefore, it is difficult to understand why, to the extent that a decree may deal with costs. It cannot constitute judgment. Our High Court has also taken the view that not only the whole decree can be appealed from, but also a part of the decree can be appealed from. The position here is the same. The first defendant company does not wish to appeal from the whole decree passed by the learned Judge, because with a part of the decree it is satisfied. It only wishes to appeal from that part of the decree which affects its rights and with regard to which it has a grievance. As we said, this seems to be the portion apart from authorities, and when we turn to the authorities, we find that properly understood the authorities have taken the same view of the position.'

The Court also observed that Dinanath Narpatrai's case (AIR 1930 Bom 445) dealt with an order and not a decree for costs passed on the original side and that question did not arise before it. We are in respectful agreement with this decision rendered by Chagla C. J., for the proposition that an appeal would lie from a part of the decree with regard to costs and overrule the preliminary objection of Mr. Narayan that the appeal is not maintainable.

7. Mr. Papanna, on merits, relied on a decision of the Andhra Pradesh High Court in Varanasi Venkata Surya Subba Rao v. Chivukula Vasudevasastry (AIR 1956 Andhra 113) where Viswantha Sastri, J. Held that an appeal lies against an award of costs only where the order as to costs involves a matter of principle or where there has been no real exercise of discretion in making the order as to costs or where the order as to costs is based on radical misapprehension of the facts or the law. This principle is well settled and hence the next question for consideration would be whether the learned Civil Judge was justified in not awarding costs to the appellant though he made a decree in his favour for specific performance of the contract.

8. It is well settled that the question of costs is entirely in the discretion of the trial Court and it is beyond the province of the appellate Court to interfere with the exercise of that discretion unless a question of principle is involved. Hence we have to examine whether the lower Court exercised its jurisdiction on correct principles of law in the matter of awarding costs. For this purpose, the findings of the lower Court on issues 1 to 5 will have to be looked into. On an appreciation of the evidence on record, the lower Court found as follows:--

(1) Who committed default in the performance of the contract is academic inasmuch as both the parties appear even now to be ready and willing to get the sale deed executed in pursuance of the agreement of sale, Exhibit P. 1.

(2) The evidence on record is sufficient to justify the inference that the plaintiff has committed default and not the power-of-attorney holder (D.W. 3) of the defendant.

(3) It is common ground that the time was not the essence of the contract.

(4) The Court was impressed by the evidence of D.W. 2, the broker, that the power-of-attorney holder D.W. 3 had approached the plaintiff with Ex. D. 5, unregistered sale deed, Ex. D. 6, income-tax clearance certificate, Ex. D. 7, tax-receipt, and Ex. D. 8, power-of-attorney, to enable her to execute the sale deed. It further found that D.W. 3 had come with the sale deed signed by the defendant and other documents after getting the draft of Exht. D. 5 prepared by the plaintiff's counsel and that the plaintiff stated that she was not ready with the money.

(5) There was no substance in the argument of the plaintiff that Exhibits D. 5 and D. 8 are spurious documents brought into existence for creating evidence in favour of the defendant. In order to arrive at this conclusion, the Court also examined the documents in detail and found them to be genuine.

(6) The plaintiff has not proved that the consequences of the breach of contract were not intended to be acted upon in order to give a finding in favour of the plaintiff on issue No. 4.

(7) The defendant was always ready and willing to execute the sale deed and in fact made all the arrangements to get the sale deed, Ex. D-5, and other documents. Exs. D. 6 to D. 8, necessary for the execution of the sale deed as per the terms of Ex. P-1, but the sale could not be put through as the plaintiff was taking up false contentions regarding vacant possession to be given to her.

(8) The plaintiff was not ready with sufficient funds to the tune of Rs. 50,000/- for completing the sale transaction and her evidence in this regard was not supported by any documentary evidence.

(9) The plaintiff was entitled to a decree for specific performance even though on the evidence on record it could be said that the contentions of the plaintiff were not proved and the defendant was always ready and willing to execute the sale deed.

(10) the matter was taken to the Court because of some extraneous circumstances prevailing upon the plaintiff who is lady and appears to abide by the advice of her advocate.

(11) Lastly, the defendant was not responsible for hastening the plaintiff to file the suit for specific performance.

Taking all these circumstances into consideration, the Court below, bearing in mind that the costs normally follow the event, made an exception in this case for the reasons stated above and directed the parties to bear their own costs. On a consideration of all the facts and circumstances of the case and the reasons given by the trial Court as narrated above, we are of the view that the findings against the plaintiff are so telling that here, if ever, was a case where the discretion was properly exercised by the trial Court disallowing the costs of the plaintiff.

9. The next point would be the question of court-fee paid on the memorandum of appeal. No serious arguments were advanced by the learned counsel for the respondent on this point and we do not think it necessary to decide the same in this case since the plaintiff has paid the requisite court-fee on the quantum of costs disallowed by the trial Court.

9A. For these reasons, this appeal fails and is dismissed with costs.

10. Appeal dismissed.


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