1. Can a plea of frustration of contract be raised by the subsequent assignees of a property which is the subject matter of contract of sale? Should the courts accept such a plea, if the frustration of the contract is self-induced? These distinctive issues are required to be addressed in this case.

2. The defendants 2 and 3 in a suit for specific performance have come up in the present appeal aggrieved by the concurrent findings against them. Pertinently, the legal heirs of the 1st defendant who died during the pendency of the first appeal are not made party to the proceedings.

3. Brief facts necessary for the disposal of the appeal are as follows: An extent of 40.25 Cents shown as plot ‘A’ in Ext. C4 (a) plan in O.S. No.307 of 1968 on the files of Munsiff Court Irinjalakuda and a further extent of 27.525 Cents shown as plot ‘B’ of the same plan was the subject matter of an agreement of sale entered between the 1st respondent/plaintiff and original 1st defendant late Kousalya entered on 22.09.1999 for a total consideration of two lakhs and a sum of under Rs.10,000/- was received as advance. Plaint A schedule property was allotted to the first defendant as per final decree in O.S. No.307 of 1968, which is confirmed in A.S. No.52 of 1986. The period fixed for performance of the contract was three months. Since the defendants refused to perform the contract, a notice was issued by the plaintiff, to which a reply was issued by the 1st defendant, alleging that the plaintiff has informed her that he is not prepared to wait till the disposal of the final decree proceedings and wanted the return of the advance amount. Notwithstanding the execution of agreement of sale, the 1st defendant assigned her share to Sunil and Satheeshan, sons of both her brothers Ramakrishanan and Velu. Based on the said assignment of share, the second appeal S.A. No. 680/1999 pending before this court was allowed, setting aside the allotment in the final decree and remanding the matter for fresh consideration before the executing court. On remand a joint statement was filed before the executing court stating that petitioner therein/1st defendant herein does not want to prosecute the case and accordingly the execution petition was dismissed. In the meantime, 1st defendant proceeded to execute the sale deed in respect of plaint schedule property in favour of the defendants 2 and 3. Pertinently, the entire proceedings happened behind the back of the plaintiff who by this time in the year 2001 instituted the suit for specific performance of the agreement dated 20-09-1999. Plaintiff contended that subsequent act of the 1st defendant in executing a sale deed in favour of defendants 2 and 3 is nothing but a fraud on the court. Defendants resisted the suit and contended that as per final decree in O.S. No.307 of 1968, though certain properties were allotted, the said allotment was based on the suggestion of the Advocate Commissioner. Since the final decree was set aside by this Court the contract is frustrated and the specific performance of the contract is not possible. Therefore, the plaintiff is not entitled for the decree. The plaintiff has no bona fides and thus the suit is liable to be dismissed. On behalf of plaintiff Exts.A1 to A6 were produced and PW1 was examined. On behalf of defendants B1 and B2 were produced and DW1 was examined. The trial Court framed the following issues for consideration.

                  “1. Whether the suit is premature?

                  2.       Whether the first defendant have got absolute title over the plaint schedule property?

                  3.       Whether the contract has become frustrated as the final decree in O.S.307/68 set aside by the Hon’ble High Court?

                  4.       Whether the sale in favour of the Defendants 2 and 3 is genuine?

                  5.       Whether the   plaintiff was ready and willing to perform his part of contract?

                  6.       Whether the plaintiff is entitled to get a decree for specific performance of contract?

                  7.       Reliefs and costs?”

4. On appreciation of the oral and documentary evidence the court below came to conclusion that the act of the defendants in agreeing for a remand for the purpose of reallocation of the property as evident from Ext.A5 and the subsequent act of the defendants in causing the execution petition to be dismissed is nothing but a deliberate act to frustrate the contract. Accordingly, the suit was decreed. Aggrieved, defendants preferred A.S. No.433 of 2004 by judgment dated 28.10.2011, the first appellate court dismissed the appeal. Against the judgment of the first appellate court, defendants 2 and 3 are here on appeal. Surprisingly, the first defendant/first appellant before the first appellate court is not arrayed as a party to this present appeal.

5. On 30.07.2012, the appeal was admitted on the following substantial questions of law:

                  (i) Whether on the facts and circumstances, Courts below were justified in entering a finding that there is a completed enforceable contract between the plaintiff and the 1st defendant?

                  (ii) What is the legal effect of setting aside the final decree by the Hon’ble High Court? Whether the plaintiff is entitled to ignore the same without seeking for declaration?

                  (iii) Has not substantial injustice caused by misleading the evidence of PW-1 with respect to the source of funds?

                  (iv) Whether the finding that the suit is abated as against 1st defendant is sustainable especially when on the proved set of facts 1st defendant has already assigned the property in favour of 2nd and 3rd defendants?

                  (v) Whether discretion to grant a decree for specific performance has been judiciously exercised?

6. Heard Sri.T.Krishnanunni, learned Senior Counsel assisted by Sri.M.R.Venugopal appearing on behalf of the appellants and Sri.G.Sreekumar (Chelur), learned counsel appearing for the respondent.

Submissions of the Appellants.

7. Sri.T.Krishnanunni, learned Senior Counsel appearing on behalf of the appellants contended that the agreement of sale executed between the first defendant and the plaintiff is hit by Section 52 of the Transfer of Property Act, 1882. In support of his contention relied on the decision of this court in Vijayan Vs. Kuttappan Nair [2019 (2) KLT 443] . It is further pointed out that agreement of sale based on an allotment of shares in a final decree which was yet to be finalized has no efficacy of law. In view of the settlement between the parties and the suit itself being dismissed, the first defendant lost all right title and interest over the property in question and therefore, the contract of sale was frustrated due to the subsequent events and thus rendered impossible to be performed. It is the further case that unless a declaration is sought for, the settlement between the parties is not binding upon the plaintiff, no relief can be claimed.

Submissions of respondent.

8. Per contra, Sri.G.Sreekumar (Chelur), learned counsel appearing for the respondent countered the submissions of learned Senior Counsel and pointed out that the only exceptions to the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882 is that the suit should not be collusive in nature. There are enough materials before the Court to conclude that the entire act of the defendants is nothing but a fraud on the court. Therefore, it is submitted that the judgments of the court below are perfectly correct and not liable to be inferred by this Court.

9. I have considered the rival submissions raised across the Bar, perused the judgments rendered by the Courts below and also the records of the case.

Applicability of doctrine of lis pendens

10. The primary question to be considered by this Court is whether Ext.A1 agreement of sale is hit by doctrine of lis pendens. Learned Senior Counsel appearing on behalf of the appellants asserted before this Court by placing reliance on the decision of the Full Bench of this Court in Vijayan Vs. Kuttappan Nair [2019 (2) KLT 443] that an agreement of sale will also come within the purview of lis pendens. On an anxious consideration on the aforesaid submissions, this Court is of the considered view that, no doubt, the doctrine of lis pendens will apply to an agreement of sale. But then, the infirmity in the argument raised on behalf of the learned Senior Counsel for the appellants is that, it fails to address the exception to the rule of doctrine of lis pendens. It has come out in the present case that evidently there was a collusion between the first defendant and defendants 2 and 3 i.e., the appellants herein. The sequence of fraud played on the Court is writ large in the proceedings. Ext.A1 agreement of sale was entered on 22.09.1999. Later, on 27-5-2000 the 1st defendant in the suit assigned her share to one Ramakrishnan and Velu, the predecessor in interest of the appellant. Later on 31.01.2001 in respect of the property covered by the final decree, the 1st defendant executed a sale deed in favour of the second and third defendants. Later, on 21.01.2002, concealing the pendency of the suit which was lodged on 24-2- 2001, both parties submitted before this Court in S.A. No. 680/1999 that the appellants therein had purchased the share of the Smt.Kousalya, the 1st defendant in this suit and has requested for a remand to the executing court for working out of the shares afresh. The plea was accepted and by Judgment dated 21-1-2002, the final decree was set aside and matter was remanded back. Subsequently, the 1st defendant filed a statement in E.P. No.1804/1999 in O.S. No.307 of 1968 that she does not want to prosecute the final decree and accordingly by order 26-3-2002 the execution petition was dismissed. Therefore, it is evidently clear that the entire proceedings was a result of a fraud perpetrated by the appellants  and  the  deceased  1st  defendant.   Surprisingly though the 1st defendant also joined to file an appeal against the judgment and decree in the present suit, during the first appellant stage she passed away. The appellants have not chosen to implead her legal heirs. Thus, this court has no hesitation to hold that the principles of lis pendens is not attracted in this case as the entire proceedings culminating in Ext.B2 order is nothing but a fraud on the court.

Whether the suit is properly framed ?

11. The learned Senior Counsel Sri.T.Krishnanunni for the appellant further submitted that irrespective of the manner in which the final decree got set aside, it was incumbent upon the plaintiff to have sought for declaration that the settlement entered between the parties is not binding upon him. This Court fails to comprehend on what count the plaintiff should seek for a declaration. Admittedly, the plaintiff is not a party to the suit O.S. No.307 of 1968. Though the learned Senior Counsel contended that in terms of Order 22 Rule 9, the plaintiff must be construed to be an assignee of the first defendant and he ought to have impleaded himself in the suit, this court is unable to subscribe to the said contention, because a person, who enters into an agreement of sale cannot have any saleable interest over the property entitling him to seek for an impleadment in the final decree proceedings. The defendants 2 and 3/the appellants herein does not have a case that the first defendant had assigned the decree in favour of the plaintiff. Therefore, the argument that the plaintiff ought to have got impleaded in the final decree proceedings is completely out of place. Thus, this court finds the suit is properly framed since what is sought for is the enforcement of the contract for sale.

Applicability of the Doctrine of frustration.

12. No doubt, the plea of frustration is a valid defense when a plea of discharge is raised from performance of a contract. As far as Indian law is concerned, the requirement to import the principles governing English Law is not required because of Section 56 of the Indian Contract Act 1872.

                  Section 56 reads as under:-

                  “56. Agreement to do an impossible act. —An agreement to do an act impossible in itself is void.

                  Contract to do act afterwards becoming impossible or unlawful. — A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

                  Compensationfor loss through non - performance of act known to be impossible or unlawful.—

                  Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.”

                  But, what if the frustration is self induced. Does Section 56 of the Indian Contract Act, 1872 recognise the principles of self- induced frustration.

13. In Maritime  National  Fish  Ltd.  Vs Ocean Trawlers Ltd. [AIR 1935 PC 128], the Privy Council held that if a frustration is self induced, the party cannot avoid the contract.

14. In VL Narasu Vs PSV Iyer [AIR 1953 Mad 300], the Madras High Court applied the principles in Maritime National Fish (supra) and held that … “It would appear as though under Indian law frustration would put an end to the contract without any questions as to default or neglect on the part of the promisor. It does not however follow from this that the principles of “self-induced” frustration laid down in Bank Line Ltd Vs Arthur Capet & C0 {1948 1 KB 184} and Maritime National Fish Ltd Vs Ocean Trawlers [1935 ALL.ER.Rep 86] and discussed in Joseph constantine steamship ltd Vs Imperial Smelting Corporation Ltd {1942 AC 154} has no application to Indian law…..”

15. In Boothalinga Agencies Vs V.T.C Poriaswamy  Nadar  [AIR 1969 SC 110],  the Supreme Court held that ‘the principles of Maritime National Fish Ltd VS Ocean Trawlers Ltd [1935 AC 524] applies to the Indian law and the provisions of S.56 of the Indian Contract Act cannot apply to a case of “self-induced frustration”. In other words the doctrine of frustration of contract cannot apply where the event which is alleged to have frustrated the contract arises from the act or election of a party.

16. It is nobody’s case that the contract in the present case was impossible to perform. The impossibility had subsequently stemmed because of the fraud committed by the 1st defendant in the suit. In view of the principles expounded by the Supreme Court as above, a party therefore cannot rely on self induced frustration to defeat the claim of the opposite party.

17. Pertinently, the 1st defendant executed the sale deed in respect of her share during the currency of the agreement of sale with the plaintiff. Thereafter, along with the other defendants submitted before this Court that there has been reallocation of the shares and thereafter gets the final decree set aside. On setting aside of the final decree and for reallocation of shares, when the matter was remanded back to the executing court, parties jointly submitted that they have settled the matters and thereby the entire proceedings gets concluded. The resultant position is that the plaintiff is left high and dry without any remedy. This conscious act of playing fraud on the court cannot be appreciated by this Court. The courts below have concurrently found that the aforesaid act is nothing short of fraud played on the court. In such circumstances, this Court finds it difficult to accept the argument of the learned Senior Counsel for the appellants to unseat the concurrent findings rendered against the appellants.

18. Resultantly, the substantial questions of law are answered against the appellants as follows:

                  (a) The courts below were justified in finding that there is an enforceable contract between the plaintiff and the 1st defendant.

                  (b) Since the order of setting aside of the final decree by this Court is as a result of fraud and collusion between the parties, the plaintiff is entitled to ignore the same without seeking declaration. The said act falls within the exception to Section 52 of the Transfer of Property Act.

                  (c) No substantial injustice has been caused in the present case nor there is a misreading of the evidence in the present case.

                  (d) The finding that the suit is abated as against the first defendant is sustainable especially since the first defendant is the person who triggered the acts of fraud on the Court. The assignment in favour of defendants 2 and 3 is of no consequences especially since the assignment was done ignoring the rights of the plaintiff. Therefore in the absence of the legal heirs of the first appellant before the first appellate court the appeal as such is not maintainable.

                  (e) The discretion to grant the decree of specific performance has been judicially exercised in the present case and also considering the fact that the entire exercise is a result of fraud on the Court.

                  As an upshot of discussion, this Court is of the considered view that there is no merit in the appeal. Accordingly, the same is dismissed with cost to the respondent throughout the proceedings.