Findings Of Fact

Source: The Hitavada      Date: 18 Sep 2017 11:44:12

According to the Supreme Court, it was not appropriate for the HC to embark upon the task of re-appreciation of evidence in the second appeal and disturb the concurrent findings of the court below, which are the fact-finding courts.

IN THE judgement of the case – Ramathal v. Maruthathal & Others, delivered on August 22, Justice N.V. Ramana and Justice Prafulla C. Pant, at the Supreme Court have ruled that if there are concurrent findings of facts, High Court is not justified in overturning the concurrent findings of facts in a suit for specific performance of an agreement of sale. In second appeal, High Court could not have reversed the findings of fact.

In its judgement, the apex court has stated that before dealing with this issue, whether the HC went wrong in interfering with a question of fact in a second appeal, it would be necessary to look into certain clauses of the agreement in order to effectively deal with this issue.

The appeal in this case, by special leave was directed against the judgement and decree passed by the Madras HC on March 14, 2014, in a second appeal 1819/2001, wherein the HC allowed the second appeal by setting aside the concurrent findings of fact of the courts below. During pendency of the appeal, respondent 1 and 3 having settled the disputes by compromise deed on August 4, 2014, this appeal was pursued only against respondent 2.

Both the courts below (trial court and first appellate court) concurrently found that survey was not conducted by the seller, as no material was placed in support of the same. Moreover, statements of Defendant’s two witnesses were disbelieved. Courts below relied upon the fact that in CRP No. 2195/1989, the HC had given a categorical finding that the property was not surveyed and the price was also not ascertained. As those factual findings had become final, the trial court as well as the first appellate court came to the conclusion that plaintiff/buyer seller/defendant failed to fulfil his part of the contract.

The agreement stipulated Rs 1,01,000 per acre as the sale consideration. A time period of one year was stipulated for buyer to execute the sale. Further, it narrates that if the seller commits any default or refuses to execute the sale deed in favour of buyer, then the buyer shall have the right to remit the balance amount in the court and go for compulsory registration, provided the buyer was ready to pay the balance amount, deducting the advance amount and ready to execute the sale deed.

In such a case, a seller had agreed to bear the entire expenses of litigation. Moreover, in order to convert the property into marketable plots, possession was also given to the buyer from the date of contract.

The seller had agreed for conducting survey of the scheduled property at their own cost and also agreed to demarcate the boundaries by affixing stones. Additionally, the sale consideration was agreed to be calculated according to the extent of land found in the survey. On the other hand, the buyer had agreed to pay the entire sale consideration within six months from the date of the contract.

The seller had agreed to rectify any hindrance which might occur in selling of the land other than those related to Government, Panchayat and Housing Board and to extend the period of agreement on happening of such hindrances. Moreover, the schedule of the property mentions the extent of property to be 1.87 ¾ acres.

Perusal of various conditions stipulated in the agreement makes it clear that the reciprocal promises were dependent on each other and must be determined on the true construction of the contract in the order, which the nature of transaction requires. The view taken by the HC , regarding the interpretation of the contract wherein the execution of the contract was independent of the payment obligation, is erroneous and cannot be sustained in the eyes of law as the contract needs to be read as a whole and not in a piecemeal approach as undertaken by the HC. Therefore, the buyer’s payment obligation and the obligation to execute the contract, was dependent upon the measurement to be conducted by the seller.

The factual aspect which was supposed to be considered was whether the survey was conducted by the seller or not. It is on record that two defendant’s witnesses had stated that survey was conducted subsequent to execution of the agreement, but no documents were marked on behalf of the seller evidencing the fact that survey was undertaken.
When both the courts below took a view that evidence of the witness was not believable on detailed consideration of their cross-examination and non-availability of documentary evidence to prove that survey was conducted, then the HC should not have interfered with such factual findings by taking into consideration oral evidence of witnesses without there being any documentary evidence.

The crucial fact is that the survey was not conducted and did not attain finality by the earlier judgement of the Madras HC in CRP No. 2195 of 1989. Therefore, once trial court and first appellate court which are the fact finding courts have come to the specific conclusion that the plaintiff is entitled for specific performance of the agreement of sale, the HC on re-appreciation of evidence could not have upset the factual findings in second appeal.

According to the Supreme Court, it was not appropriate for the HC to embark upon the task of re-appreciation of evidence in the second appeal and disturb the concurrent findings of the court below, which are the fact-finding courts.

As per the law laid down by the apex court in respect of sale of immovable property there is no presumption as to time being the essence of the contract. Even when there is no stipulation, courts may infer that it has to be performed within a reasonable time taking into consideration the terms of the contract, the nature of the property and other surrounding circumstances. The Court felt that this proposition needs to be revisited in an appropriate case, as the value of an immovable property rate is fluctuating in recent times.

The buyer has taken prompt steps to file a suit for specific performance as soon as the execution of sale was stalled by the seller. It is clear that the buyer has been always ready and willing to perform his part of the contract at all stages. Moreover, it is the seller who had always been trying to wriggle out of the contract. Now the seller cannot take advantage of his own wrong and then plead that the grant of decree of specific performance would be inequitable.

Escalation of prices cannot be a ground for denying the relief of specific performance. Specific performance is an equitable relief and granting the relief is the discretion of the court. The discretion has to be exercised by the court judicially and within the settled principles of law. Absolutely, there is no illegality or infirmity in the judgements of the courts below which has judicially exercised its discretion and the HC ought not to have interfered with the same. While allowing this appeal, the Supreme Court set aside the High Court’s judgement and restored the judgement of the trial court.