INDIAN FINANCIAL ASSN. SEVENTH PAY ADVENTISTS versus M.A. UNNEERIKUTTY AND ANR.

Citation: [2006] SUPP. 3 S.C.R. 762 · Decided: 20-07-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed
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Judgment (excerpt)

,. 
A 
INDIA FINANCIAL ASSN., SEVENTH [!AY ADVENTISTS 
v. 
M.A. UNNEERIKUTTY AND ANR. 
JULY 20, 2006 
B 
[ARJJJTPASAYAT ANDTARUN CHI\ TTERJEE,JJ.] 
Contract Act, 1872-Sections 23 and 24-Aweementfor sale-Through 
Power of Attorney of vendor-Suit for specific pel".J ormance-Dismissal of suit 
~ -
c holding that the agreement was opposed to public policy; and that 
requirements of Section 16 of Specific Relief Acr was not complied with-
High Court decreed the suit holding that the agreement were not opposed 
to Public Policy; that plaintiff was ready and , villing to pay the balance 
amount towards sale consideration; and that the1e was no material to show 
that Power of Attorney acted in unauthorized mo~ner-On appeal, held: Suit 
D liable to he decreed in the facts of the case. 
Doctrine: 
Doctrine of Public Po/icy-Meaning and 'pplicability of 
E 
Words and Phrases: 
'Public Policy'-Meaning of 
Plaintiff-respondent No. I, had entered into ~greement with appellant-
defendant No. I through defendant No. 2-its power of Attorney for sale of the 
F property in question. Plaintiff filed suit for spt:cific performance of the 
agreement for sale. In the plaint it was mentioned that a formal agreement 
(Exbt. A-4) for sale was entered into showing co 1sideration as Rs. 8 lakhs 
including the sum already paid towards sale price. The price was for 30 cents 
of property and all the improvements thereon in eluding Church building, 
G 
School building and another building. On the same day another modified 
agreement for sale (Exbt. A-5) was entered into, ref xing the sale consideration 
to Rs. 5 lakhs and giving liberty to the defendants-appellants to pull down and 
,.. 
remove the building in the property. Plaintiff sta1 ed that he was ready and 
willing to pay the balance amount towards considt ration of Rs. 8 lakhs if the 
Church and School buildings in the premises wen: not removed; and that if 
H 
762 
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INDIA FINANCIAL ASSN., SEVENTII DAY ADVENTISTS 1•. M.A. UNNEERIKUTIY 
763 
the Church and School buildings were removed, he was ready to pay the A 
balance towards consideration of Rs. 5 Iakhs. The suit was valued at Rs. 5 
lakhs. 
Defendant No. 1 in its Written Statement stated that the Power of 
Attorney was void as contrary and opposed to the Memorandum and Articles 
of Association of the Company; that the act of deciding to sell the property B 
pursuant to resolution of the Company, were invalid in law and were otherwise 
ineffective and void; th.at the agreements were set up and devised by the plaintiff 
with objects which were opposed to public policy and were prohibited by Kerala 
Stamp Act and Income Tax Act and were void under Section 24 of Contract 
Act. 
c 
Trial court dismissed the suit on the grounds that Exbt. A-5 was executed 
to defraud payment of stamp duty and the Income Tax and it was opposed to 
public policy in the background of Section 23 of the Contract Act; that in 
case of decree of the suit, greater hardship would be caused to the defendants; 
and that requirements of Section 16 of Specific Relief Act, 1963 were not D 
complied with. 
High Court allowed the appeal of the plaintiff-respondent decreeing the 
suit on the ground that the agreement was not opposed to public policy as 
there was full disclosure of the advance payments which were made by demand 
drafts; and that in the facts of the case Section 20 of the Specific Relief Act, E 
1963 was not applicable; and that in view of resolution of appellant No.1, 
defendant No. 2 was not acting in unauthorised manner. High Court directed 
for payment of the balance Court Fee on the plaint and also in the appeal on 
the basis that the consideration for sale was Rs. 8 lakhs and not Rs. 5 lakhs. 
Hence the present appeal. 
F 
Dismissing the appeal, the Court 
HELD: 1. In view of the findings recorded by the High Court more 
particularly mention of all the relevant details relating to Exhibits A-4 and 
A-5 and the evidence clearly establishing that plaintiff had capacity to pay G 
and was ready and willing to pay the balance amount and the absence of any 
material to show that defendant No.2 was not acting in unauthori7.ed manner 
in view of the clear resolution of appellant No.1, the judgment of the High 
Court cannot be faulted. [777-C-D] 
2.1. The term 'public policy' has an entirely different and more extensive H 
764 
SUPREME COURT REP )RTS [2006] SUPP. 3 S.C.R. 
A meaning from the policy of the law. It does no I remain static in any given 
community
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