Karnataka High Court
Prism Wear Industries(I) Limited vs S.Sadashivaiah on 23 December, 2021
Bench: P.S.Dinesh Kumar, P.Krishna Bhat
RFA No.458/2013
C/W RFA CROB No.3/2019
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF DECEMBER, 2021
PRESENT
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE P. KRISHNA BHAT
REGULAR FIRST APPEAL No.458 OF 2013
C/W
REGULAR FIRST APPEAL CROB No.3 OF 2019 (MON)
IN RFA No.458 OF 2013
BETWEEN :
PRISM WEAR INDUSTRIES(I) LIMITED
REGD. OFFICE AT NO.21/3
VINAYAKA BUILDING
T.S.T. ROAD, KALASIPALYAM
BANGALORE-560 002
REPRESENTED BY ITS
SPECIAL POWER OF ATTORNEY HOLDER
MR. PRAKASH MANGALANI ... APPELLANT
(BY SHRI. PADMANABHA V. MAHALE, SENIOR ADVOCATE FOR
SHRI. Y. HARIPRASAD, ADVOCATE)
AND :
1. S. SADASHIVAIAH
S/O LATE SIDDAPPA
AGED ABOUT 68 YEARS
NO.23, SUSHEELASADANA
4TH TEMPLE STREET, 15TH CROSS
MALLESWARAM
BANGALORE-560 003
RFA No.458/2013
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2
2. SHRI. APPAYYANNA
SINCE DECEASED
REP. BY HIS LEGAL REP.
2(A). SMT. GOWRAMMA
W/O LATE APPAYYANNA
AGED ABOUT 47 YEARS
2(B). SRI. B.A. RAMANNA
D/O LATE APPAYYANNA
AGED ABOUT 28 YEARS
2(C). KUM. PARVATHAMMA
D/O LATE APPAYYANNA
AGED ABOUT 23 YEARS
2(D). SRI. NANJAPPA
S/O LATE APPAYYANNA
AGED ABOUT 20 YEARS
ALL ARE RESIDING AT JINKE
BACHALLI VILLAGE
KASABA HOBLI
DODDABLLAPUR TALUK
PIN-561 203 ... RESPONDENTS
(BY SHRI. V.F. KUMBAR, ADVOCATE FOR R1;
SHRI. G.B. NANDISH GOWDA ADVOCATE FOR
SHRI. R.B. SADASIVAPPA, ADVOCATES FOR R2[A-D])
THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST THE
JUDGMENT AND DECREE DATED.06.02.2013 PASSED IN O.S.34/2008
ON THE FILE OF THE SENIOR CIVIL JUDGE, DODDABALLAPUR,
DECREEING THE SUIT FOR RECOVERY OF MONEY.
IN RFA CROB No.3 OF 2019
BETWEEN :
SRI. APPAYYANNA
S/O LATE SRI. ANJINAPPA
@ CHIKKANJINAPPA
SINCE DECEASED BY HIS LRs
RFA No.458/2013
C/W RFA CROB No.3/2019
3
1. SMT. GOWRAMMA
W/O LATE SRI. APPAYYANNA
AGED ABOUT 55 YEARS
2. SRI. B.A. RAMANNA
S/O LATE SRI. APPAYYANNA
AGED ABOUT 36 YEARS
3. MISS. PARVATHAMMA
D/O LATE SRI. APPAYYANNA
AGED ABOUT 31 YEARS
4. SRI. NANJAPPA
S/O LATE SRI. APPAYYANNA
AGED ABOUT 38 YEARS
ALL ARE R/AT JINKEBACHHAHALLI
VILLAGE, KASABA HOBLI
DODDABALLAPURA TALUK
BENGALURU RURAL DISTRICT ... CROSS OBJECTORS
(BY SHRI. G.B. NANDISH GOWDA, ADVOCATE FOR
SHRI. R.B. SADASIVAPPA, ADVOCATE)
AND :
1. SRI. S. SADASHIVAIAH
S/O LATE SRI. SIDDAPPA
AGED ABOUT 73 YEARS
R/AT NO.23, SUSHILA SADAN
4TH TEMPLE STREET, 15TH CROSS
MALLESWARAM
BANGALORE-560 003
2. PRISM WEAR INDUSTRIES(I) LTD
REG. OFFICE AT NO.21/3
VINAYAKA BUILDING
1ST ROAD, KALASIPALYAM
BANGALORE-560 002
REP. BY ITS
MANAGING DIRECTOR ... RESPONDENTS
(BY SHRI. V.F. KUMBAR, ADVOCATE FOR R1;
SHRI. PADMANABHA V. MAHALE, SENIOR ADVOCATE FOR
SHRI. Y. HARIPRASAD, ADVOCATES FOR R2)
RFA No.458/2013
C/W RFA CROB No.3/2019
4
THIS RFA CROB IS FILED IN RFA NO.458/2013 UNDER
ORDER 41 RULE 22 OF CPC, AGAINST THE JUDGMENT AND DECREE
DATED 06.02.2013 IN OS.NO.34/2008 ON THE FILE OF THE SENIOR
CIVIL JUDGE AND JMFC, DODDABALLAPUR, DECREEING THE SUIT FOR
RECOVERY OF MONEY.
THIS RFA AND RFA CROB, HAVING BEEN HEARD THROUGH
VIDEO CONFERENCE AND RESERVED FOR JUDGMENT ON 25.11.2021
COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY,
P.S.DINESH KUMAR J, PRONOUNCED THE FOLLOWING:-
JUDGMENT
These Regular First Appeal and the Cross Objection
have been filed by the defendants in O.S. No.34/2008
challenging the judgment and decree dated February 6,
2013 passed by the Senior Civil Judge & JMFC
Doddaballapura decreeing the suit with costs and directing
the defendants to jointly and severally pay the sum of
Rs. 15,00,000/- with interest at 18% p.a.
2. RFA No.458/2013 is by the second defendant.
RFA Cross Objection 3/2019 is by the first defendant.
3. For the sake of convenience, parties shall be
referred as per their status in the suit.
RFA No.458/2013
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4. We have heard Shri. V.F. Kumbar, learned
Advocate for plaintiff, Shri. G.B. Nandish Gowda, learned
Advocate for first defendant and Shri. Padmanabha V.
Mahale, learned Senior Advocate for second defendant.
The case of the plaintiff
5. Plaintiff, Late S. Sadashivaiah filed the instant
suit against defendants Appayyanna1 and M/s Prism Wear
Industries (I) Ltd2 for a judgment and decree against
defendants to pay the sum of Rs.15,00,000/- with interest
at 18% from the date of the suit till the date of realization.
6. Plaintiff's case is, first defendant had offered to
sell 1 Acre 32 guntas of land in Sy. No. 37/4, of
Jinkebachahalli Kasaba Hobli, Doddaballapura Taluk and
parties into an agreement. The sale transaction could not be
concluded as two suits bearing O.S. No.336/1987 and O.S.
No.157/2005 filed by one Patallappa were pending on the
file of Civil Judge (Junior Division), Doddaballapura.
A panchayath was convened on October 2, 2005 in
Defendant no.1
Defendant no.2
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presence of two persons namely, Bhanuprakash and
Gopalkrishna. First defendant agreed to pay a sum of
Rs.15,00,000/-. First defendant issued a post dated3
cheque bearing No. 242510, for Rs. 15,00,000/- drawn on
Vysya Bank Ltd., KG Road Branch, Bengaluru. Plaintiff
wrote and handed over a receipt stating that he had agreed
to receive the said sum and in the event of default in
payment, the plaintiff's right flowing from the 'agreement to
sell' would revive for enforcement. On presentation, the
cheque was dishonoured on the ground that the account
was closed. Plaintiff got issued a legal notice dated
December 7, 2005 to the defendant demanding payment.
He also initiated proceedings under the Negotiable
Instruments Act in CC No. 280/2005 in the Criminal Court4.
7. First defendant has executed a sale deed on
October 11, 2005 in favour of the second defendant. The
sale deed contains a recital that vendors had agreed to
place a sum of Rs. 12,00,000/- in deposit with a
October 26, 2005
Principal Civil Judge (Junior Division) & JMFC, Doddaballapur.
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Nationalized bank jointly with the second
defendant-purchaser for a period of five years as security
against possible future claim by the plaintiff.
8. In spite of the demand by the plaintiff, first
defendant did not pay the amount. Hence plaintiff has filed
the instant suit.
The case of First defendant:
9. The legal representatives of first defendant have
filed written statement denying the plaint averments and
contending inter alia that first defendant was an illiterate,
innocent person he had not executed the 'agreement to
sell'. Plaintiff had created the 'agreement to sell'. First
defendant was not the owner of Sy. No. 37/4
Jinkebachahalli Village. First defendant had not tendered
any cheque to the plaintiff. Plaintiff has created the said
cheque and filed a false criminal case which has been
dismissed on December 9, 2009. First defendant was
working under the second defendant. There was ill will
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between the plaintiff and the second defendant and
therefore the plaintiff has filed a false suit.
The case of Second defendant:
10. Second defendant has filed its written statement
denying the plaint averments and contending inter alia that
the suit was not maintainable against defendant No.2.
Plaintiff had not produced the original sale agreement. The
suit was barred by limitation since, reckoned from 1997,
three years had lapsed. The plaintiff ought to have filed a
suit for specific performance. Second defendant had got a
public notice advertised in Vijaya Karnataka and Hindu
Newspapers on July 23, 2005. Plaintiff had lodged his
objections through his advocate on July 26, 2005. Plaintiff
did not produce any sale agreement nor any other
document. Therefore, the cheque alleged to have been
issued by first defendant is a false and concocted one.
11. On behalf of the plaintiff, two witnesses have
been examined as PW-1 and PW-2 and Exhibits P-1 to P-18
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marked. On behalf of the defendants, DW-1 and DW-2 have
been examined and Exhibits D-1 to D-4A marked.
12. The trial court vide impugned judgment and
decree has decreed the suit with costs.
13. Shri. Nandish Gowda, learned Advocate for first
defendant urged following grounds:
• the plaintiff's claim is barred by limitation;
• the plaintiff has not produced the original of Ex.P5
receipt issued by the plaintiff;
• it is mentioned in Clause (F) in Ex.P-10, the sale
deed, that the purchaser had issued a public notice
and objection was received in respect of Sy.No.
37/5. The receipt allegedly executed by plaintiff as
per Ex.P5 refers to property bearing Sy. No.37/4.
Therefore the trial court has erred in decreeing the
suit.
• in the event this Court were to come to the
conclusion that appeal and cross objection do not
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merit consideration and liable to be dismissed, then
this Court may modify the decree passed by the
trial Court and direct the second defendant, who is
the present owner of the property to satisfy the
decree.
14. Shri. Padmanabha V. Mahale, learned Senior
Advocate for second defendant mainly contended that:
• there is no privity of contract between plaintiff and the
second defendant;
• no issue has been framed by the trial Court with
regard to liability of second defendant.
15. We have carefully considered rival contentions
and perused the records.
16. Based on the pleadings of the parties, the trial
Court has framed following issues:
1. Whether the plaintiff proves that defendant No.1
agreed to pay a sum of Rs.15,00,000/- to the
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plaintiff on 02.10.2005 in the presence of
panchayatdhars?
2. Whether the plaintiff proves that the defendant
had issued post dated 26.10.2005 (sic cheque)
for a sum of Rs. 15,00,000/- to the plaintiff?
3. Whether the suit of the plaintiff is barred by
limitation?
4. Whether the plaintiff is entitled to recover the
said amount of Rs.15,00,000/- with interest?
5. What order or decree?
17. On appreciation of the oral and documentary
evidence, the trial Court has decreed the suit.
18. In the light of the pleadings and evidence on
record; and the contentions urged on behalf of the
defendants, the following points arise for consideration of
this Court:
1. Whether the trial Court was right in holding
that plaintiff had proved that defendant was
liable to pay the cheque amount of Rs.
15,00,000/- with interest?
RFA No.458/2013
C/W RFA CROB No.3/2019
2. Whether trial Court is right in holding that
both defendants are liable to pay the sum of
Rs.15,00,000/-?
19. Plaintiff's specific case is that he had entered into
an agreement with Appayanna5 to purchase agricultural
land measuring 1 acre 32 guntas in Sy.No.37/4. In view of
pendency of suits filed by one Patallappa, the transactions
could not be concluded. On October 2, 2005, the matter
got settled between the parties, with Appayanna tendering
a cheque for Rs.15,00,000/. The said cheque has been
dishonoured.
20. Plaintiff has produced Ex.P-5, a receipt signed by
the plaintiff and two witnesses. It is stated in the receipt
that first defendant had entered into an agreement to sell
land bearing Sy.No.37/4; that the sale could not be
completed in view of pendency of litigation; that plaintiff
had received cheque no. 242510 drawn on Vysya bank for
Rs.15,00,000/-; that he had given up all his rights (sic in
Original first defendant
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respect of the land); and that if the cheque were to be
dishonoured plaintiff would be entitled to enforce his rights.
21. Thus in substance, plaintiff and first defendant
terminated the existing agreement/contract simultaneously
with first defendant tendering the cheque. Admittedly the
cheque has been dishonoured. Plaintiff has initiated
proceedings under Section 138 of the Negotiable
Instruments Act. It is also not in dispute that plaintiff's
complaint has been dismissed.
22. The cheque Ex.P-1 is dated October 26, 2005.
The original of cheque has been filed in the Court. PW-1 has
deposed in para 5 of his affidavit filed in lieu of his
examination in chief, that, as per the settlement arrived
between the parties on October 2, 2005, first defendant had
issued post dated cheque. In the cross examination by
learned advocate for first defendant, there is a suggestion
that though the cheque was not given, plaintiff had
concocted the receipt Ex-P5. He has denied the suggestion
that there was no agreement and stated that he had
RFA No.458/2013
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returned the agreement. He has further stated that he had
issued the receipt after receiving the cheque.
23. One of the signatories in the receipt Ex.P-5 is
Bhanuprakash. He has been examined as PW-2. In his
examination in chief, it is stated that they had assembled to
resolve the dispute in respect of land bearing Sy.No. 37/4.
In the cross examination, he has stated the cheque was
given on October 2, 2005 and that in the receipt he, one
Gopalkrishna and the plaintiff had signed. He has admitted
Ex. P-5-the receipt.
24. Ex.P-10 is the sale deed executed by Appayanna
and his family members in favour of second defendant. Sale
deed is dated October 11, 2005. Clause (F) of the sale deed
contains a reference to the objections filed by the plaintiff in
response to the public notice issued by second defendant in
Hindu and Vijaya Karnataka daily newspapers. Ex. D-1 has
been confronted to the plaintiff. It is a notice addressed on
behalf of the plaintiff to second defendant's advocate with
regard to the public notice in Vijaya Karnataka. It is stated
RFA No.458/2013
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in the said letter that plaintiff and one Shri. V.J. Murthy had
entered into an agreement of sale in respect of the
properties mentioned therein. It is the contention of learned
advocate for first defendant that the objection is in respect
of Sy.No.37/5. We have perused the public notices issued in
both newspapers namely Vijaya Karnataka and The Hindu.
It is relevant to note that in the public notice issued in
Vijaya Karnataka Sy. No.37/4 is not mentioned, but it is
found in the notice advertised in 'The Hindu'. It is relevant
that plaintiff has responded to the public notice in Vijaya
Karnataka.
25. Clause H in the sale deed is very relevant and it
reads as follows:
"H. In pursuance of this Supplementary Agreement
for Sale the Vendors have agreed to keep Rs.12,00,000/-
(Rupees Twelve Lakhs Only) as deposit in a nationalized
Bank jointly with the Purchaser herein for a period of five
years from the date of execution of this Sale Deed as a
security against the possible future claim by the said Mr.
Sadashivaiah and Mr. V.J. Murthy on the condition that the
interest earned will be accrued to the said term deposit and
in the event of any claim by these parties this amount along
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with the accrued interest will be utilized for the satisfaction
of the claim. In the event, no such claims are made within
the said period, the said amount along with accrued interest
will be paid to the Vendors without any further act on the
part of the purchaser."
26. A careful reading of the above clause clearly
demonstrates that Rs.12,00,000/- was placed in deposit in
the bank for a period of five years as 'security' against the
possible future claim by Sadashiviah and VJ Murthy.
27. The facts narrated hereinabove, lead to an
irresistible inference that both first and second defendants
were conscious of the objection lodged by the plaintiff.
According to the plaintiff, Ex P-5-receipt has come into
existence on October 2, 2005. PW-1 & 2 have testified
about the execution of the receipt and issuance of the
cheque dated October 26, 2005. The sale deed has been
executed on October 11, 2005, nine days after the
execution of the receipt. Defendants have agreed and kept
Rs. 12,00,000/- as security for five years against any future
claims by the plaintiff. Thus the sale deed which is a
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contemporaneous document clearly shows that parties were
conscious of the objection raised by the plaintiff and made
necessary arrangement to settle the claim of the plaintiff by
placing a deposit in the bank. The learned trial Judge has
recorded in para 13 of the judgment that Ex-P1 to P4
establish that first defendant had maintained the bank
account. During his life time, first defendant has not filed
the written statement. After his death, his heirs have filed
their written statement. He has further recorded that first
defendant had all the knowledge but he has not made any
effort to deny the facts.
28. Records also disclose that plaintiff has filed IA
No.5 to substitute deceased first defendant by his legal
representatives. It is stated in the affidavit that first
defendant had passed away on October 31, 2009. Suffice to
note that first defendant has not chosen to file his written
statement during his life time.
29. A combined reading of Ex. P5 and the sale deed
Ex. P-10 clearly demonstrates that first defendant, his
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family members and the second defendant were conscious
of the objection lodged by plaintiff and placed the deposit in
the bank as 'security'. Obviously the money was kept to
settle the ensuing dispute if any. The deposit was for five
years. The records also disclose that second defendant has
executed his vakalathnama on April 2, 2008 and thus had
notice of the suit by then. It was submitted by the learned
advocates for the defendants that the deposit amount has
been withdrawn. Thus the second defendant, who had
notice of the suit as back as in 2008 and the deposit was for
five years upto 2010, has permitted the withdrawal of the
deposit.
30. The first contention urged in this appeal on
behalf of the first defendant is that the suit was barred by
limitation. Admittedly, the cheque is dated October 26,
2005. The contents of the receipt clearly shows that the
matter stood settled between plaintiff and first defendant
with the tendering of the cheque subject to realization.
Therefore, as on the date of Ex. P-5, the earlier transactions
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between the parties stood settled subject to payment of
Rs.15,00,000/-. If the limitation is reckoned from the date
of receipt i.e., October 2, 2005, the limitation would expire
on October 1, 2008. Suit has been presented on February 5,
2008 and the same is in time.
31. The second contention urged on behalf of first
defendant is that the original of Ex.P5 is not produced. This
contention is wholly untenable because, it is executed by
the plaintiff and given to the first defendant. The cheque
details of which are recorded in the receipt is given by the
first defendant and the same has been produced in original
as Ex.P1. In substance, by executing Ex. P5, the plaintiff
has given up his right flowing from the 'agreement to sell'
in lieu of Rs.15,00,000/-. It is not the case of first
defendant that the cheque was not tendered by the
deceased original first defendant. The tendering of cheque
has been supported by the independent witness PW-2.
Therefore the said contention is liable to be rejected.
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32. The third contention urged by the first defendant
is that the property agreed to be sold was land bearing
Sy.No.37/4 and the objection is in respect to Sy. No.37/5.
As noticed hereinabove, the objection has been lodged
pursuant to the public notice in Vijaya Karnataka
Newspaper. Sy.No.37/4 does not find its place in the said
public notice. It is relevant that first defendant has sold
both lands bearing Sy.No. 37/4 as also Sy.No. 37/5 by the
sale deed Ex.P10. The receipt specifically mentions Sy.No.
37/4. In any event, the said contention is also untenable
because the suit is not one for specific performance but for
recovery of money based on the dishonored cheque.
33. Shri Padmanabha Mahale for the second
defendant has urged that there is no privity of contract
between plaintiff and second defendant and therefore
second defendant is not liable to make the payment. This
contention must fail in view of the conduct of the second
defendant. We say so because second defendant was
conscious of plaintiff's claim and a sum of Rs.12,00,000/-
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was kept in deposit as 'security' in the joint name of
vendors and the second defendant. The second defendant
had notice of the suit on April 2, 2008 when he has
executed the Vakalathnama. The deposit would mature in
2010. Second defendant had two years to call upon the
first defendant to settle the claim of the plaintiff and render
the property free from all encumbrances. It did not choose
to do so. On the other hand, second defendant has
consciously permitted withdrawal of the deposit in the Bank.
34. Shri. Mahale also urged that no issue has been
framed by the trial Court with regard to the liability of
second defendant. Under Order XLI Rule 24, CPC6 where
the evidence on record is sufficient, the appellate Court may
determine the case finally and pronounce the judgment.
35. In view of our findings recorded hereinabove, we
are of the considered opinion that the contention with
regard to non-framing of issue urged by the learned Senior
Advocate does not merit any consideration.
Code of Civil Procedure
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36. In the light of above discussion, both the points
formulated by this Court are answered in the affirmative.
37. Further, there is delay of 1698 days in filing
R.F.A. Crob.3/2019. It is stated in the affidavit filed in
support of the application under Section 5 of the Limitation
Act that the deponent had no knowledge about the
judgment and decree passed by the Trial Court as there was
no communication from her Advocate; and that she learnt
about the R.F.A. only after receiving notice from this Court.
The said explanation is wholly unsatisfactory. We have
considered the appeal and cross-objection on merits.
38. For the reasons recorded hereinabove, the
appeal and cross objection filed by the defendants must fail
and they are accordingly dismissed.
No costs.
Sd/-
JUDGE
Sd/-
JUDGE
SPS
