Karnataka High Court
H R Subramanya Shastry vs Sri K Mohan Kumar on 6 January, 2021
Author: B.Veerappa And K.Natarajan
1 R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6th DAY OF JANUARY, 2021
PRESENT
THE HON' BLE MR. JUSTICE B. VEERAPPA
AND
THE HON'BLE MR. JUSTICE K. NATARAJAN
REGULAR FIRST APPEAL No.666/2013
BETWEEN:
1. H. R. SUBRAMANYA SHASTRY
S/O LATE H. S. RAMASHASTRY,
AGED ABOUT 73 YEARS,
AGRICULTURIST,
RESIDENT OF OLD POST OFFICE ROAD,
SHIMOGA CITY-577201.
2. H. R. SHANKARA NARAYANA SHASTRY
S/O LATE H. S. RAMASHASTRY,
AGED ABOUT 69 YEARS,
R/O ABHIRAMA, 5TH CROSS,
SHIMOGA CITY-577201.
3. SRI H. R. NAGABUSHANA SHASTRY,
S/O LATE H. S. RAMASHASTRY,
AGED ABOUT 57 YEARS,
R/O SIRI GOWRI,
SOMAIAH LAYOUT,
SHIMOGA CITY-577201.
4. SRI H. R. SRIPADHA SHASTRY
S/O LATE H. S. RAMASHASTRY,
2
AGED ABOUT 54 YEARS,
R/O NISHANTH, 1ST FLOOR,
RAILWAY STATION ROAD,
UDUPI-576101. ...APPELLANTS
(BY SRI S. V. PRAKASH, ADVOCATE)
AND:
SRI K. MOHAN KUMAR
S/O KAITHMAL JAIN
AGED ABOUT 52 YEARS
OCCUPATION:BUSINESS
R/O THIMMAPPANA KOTTHALLU
SHIMOGA CITY-577201. ...RESPONDENT
(BY SRI P. N. HARISH, ADVOCATE)
...
THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96
OF THE CODE OF CIVIL PROCEDURE, 1973, PRAYING TO SET ASIDE
THE JUDGMENT AND DECREE DATED 11.02.2013 PASSED BY THE
COURT OF FIRST ADDITIONAL SENIOR CIVIL JUDGE, SHIMOGA, IN
O.S. NO.80/2010, DECREEING THE SUIT FOR SPECIFIC
PERFORMANCE.
THIS REGULAR FIRST APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT, IS COMING ON FOR PRONOUNCEMENT
OF JUDGMENT THIS DAY, B.VEERAPPA J., DELIVERED THE
FOLLOWING:
3
JUDGMENT
The defendants have filed the present regular first appeal
against the impugned judgment and decree dated 11.2.2013 made
in O.S.No.80/2010 on the file of the I Additional Senior Civil Judge
and CJM., Shivamogga decreeing the suit of the plaintiff with cost
and directing the defendant to execute the registered Sale Deed in
favour of the plaintiff by receiving the balance sale consideration
within two months time from the date of the impugned judgment
and decree, failing which, the plaintiff would be at liberty to take
steps in accordance with law.
2. The parties herein are referred to as per their rankings
before the trial Court.
I The brief facts of the case
3. The respondent-plaintiff filed a suit for specific
performance for enforcement of oral agreement dated 10.4.2010
contending that the defendants are joint owners of the suit property
morefully described in the schedule to the plaint. After negotiation,
the defendants entered into an oral agreement dated 10.4.2010
agreeing to sell the schedule property for sale consideration of
Rs.40,11,000/- (Rupees Forty Lakhs Eleven Thousand Only) to the
plaintiff and in pursuance of the same, the plaintiff paid a sum of
Rs.5,11,000/- (Rupees Five Lakhs Eleven Thousand Only) as
earnest money to the defendants and the defendants promised to
complete the sale transaction by executing the registered Sale Deed
in his favour after acknowledgement of the balance sale
consideration of Rs.35,00,000/- (Rupees Thirty lakhs only). It was
further contended that the plaintiff had paid the said amount to the
defendants by way of cash as well as through the cheque bearing
No.600969 dated 10.4.2010 for a sum of Rs.2,00,000/- drawn on
Canara Bank, Main Branch, Nehru Road, Shivamogga in favour of
defendant No.1 which was acknowledged by him and also on behalf
of defendant Nos.2 to 4. In turn, the defendants had also promised
to execute the registered Sale Deed within 30.4.2010 in favour of
the plaintiff by receiving the balance sale consideration.
4. It was further contended that in view of the terms and
conditions of the oral Agreement, the defendants were supposed to
deliver all the Title Deeds and other relevant documents to the
plaintiff, but they did not deliver any of the required original
documents pertaining to the suit schedule property. Later the
defendants requested the plaintiff to provide some more time for
delivery of the required original documents and for execution of the
registered Sale Deed. However, while entering into the oral Sale
Agreement, the defendants had delivered photostat copies of some
of the documents to the plaintiff. Inspite of repeated requests and
demand by the plaintiff to the defendants to deliver all the
necessary documents and to execute the registered Sale Deed in
his favour after receiving the balance sale consideration of
Rs.35,00,000/- (Rupees Thirty Five Lakhs), the defendants failed to
comply with their contractual obligations. Therefore, the plaintiff
issued legal notice, dated 7.6.2010, calling upon the defendants to
execute the registered Sale Deed after receiving the balance sale
consideration. The said notice was duly served on defendant No.1
on 26.6.2010, but instead of complying with the terms of the legal
notice, defendant No.1 issued a reply notice dated 30.6.2010 with
vague, untenable and false averments. Though defendant No.1 has
admitted the acknowledgement of the amount under the cheque
issued by the plaintiffs, falsely contended that it is towards the sale
of the dismantled building materials, which cannot even be
imagined considering the position of the plaintiff. Defendant Nos.2
to 4 have tactfully avoided the service of the legal notice. The
cause of action arose on 10.4.2010 and subsequently, when the
plaintiff issued legal notice to the defendants and on failure of the
defendants to execute the registered Sale Deed, the plaintiff filed
the suit for specific performance.
II Written statement filed by the defendants
5. The defendants filed the written statement denying all the
plaint averments, except the ownership of the suit schedule
property by them and contended that the plaintiff is falsely making
an attempt to link the payment through cheque dated 10.4.2010 for
a sum of Rs.2 lakhs drawn on Canara Bank, Main Branch, Nehru
Road, Shivamogga issued in favour of defendant No.1, was given
for a different transaction and nothing to do with the suit. Infact,
there was an existing old building on the plaint schedule site
premises earlier. On getting the tenant vacated from that premises
through order of the Court, the existing building was intended to be
demolished. The plaintiff through his agent came forward to
purchase the building material offering Rs.2 lakhs for demolition of
the building and to take the building materials which was accepted
by defendant No.1-D.W.1 for which the said cheque came to be
issued and not otherwise. It was the only transaction which was
made in that regard and the plaintiff was making a false claim and
there was no cause of action which arose for the plaintiff to file the
suit or for issue of legal notice to the defendants for the suit claim.
Therefore, the suit filed by the plaintiff for specific performance is
not maintainable and the plaint was not properly verified with an
affidavit. Hence, sought to dismiss the suit.
III Issues framed by the Trial Court
6. Based on the aforesaid pleadings, the trial Court framed
the following issues:
1. Whether plaintiff proves that the defendants
entered into an oral agreement to sell the
suit property in his favour for
Rs.40,11,000/- on 10.04.2010?
2. Whether the plaintiff proves that besides
issuing cheque for Rs.2,00,000/- he had
paid a sum of Rs.3,11,000/- by way of cash
towards part payment of sale consideration?
3. Whether the defendants prove that plaintiff
issued cheque for Rs.2,00,000/- to purchase
he materials of their demolished building?
4. Whether the plaintiff proves that he has
always been ready and willing to perform
his part of the agreement?
5. Whether the plaintiff is entitled for relief as
prayed?
6. What Decree or Order?
IV Witnesses examined and documents
produced by the parties
7. In order to prove his case, the plaintiff examined himself
as P.W.1, his auditor as P.W.2 and Members of his own Community
as P.Ws.3 to 6 and got marked the documents Exs.P.1 to P.22. The
defendants examined defendant No.1 as D.W.1, but did not mark
any document.
V Findings recorded by the Trial Court
8. The trial Court considering both oral and documentary
evidence on record, recorded a finding that the plaintiff has proved
that the defendants had entered into an oral agreement to sell the
suit schedule property in his favour for the sale consideration of
Rs.40,11,000/- on 10.4.2010; Besides issuing a cheque for a sum
of Rs.2 lakhs, he had paid a sum of Rs.3,11,000/- by way of cash
towards part payment of sale consideration; defendants have failed
to prove that the plaintiff issued a cheque for a sum of Rs.2 lakhs to
purchase the materials of their demolished building. It was further
held that the plaintiff has proved that he was always ready and
willing to perform his part of the agreement and was entitled for the
relief as prayed for. Accordingly, the trial Court by the impugned
judgment and decree dated 11.2.2013 decreed the suit and
directed the defendants to execute the registered Sale Deed in
favour of the plaintiff after receiving the balance Sale Consideration
within two months from the date of the impugned judgment, failing
which, the plaintiff would be at liberty to take steps in accordance
with law. Hence, the present regular first appeal is filed by the
defendants.
9. We have heard the learned Counsel for the parties to the
lis.
VI Arguments advanced by the learned Counsel
for the appellants
10. Sri S.V. Prakash, learned Counsel for the appellants-
defendants contended that the impugned judgment and decree
passed by the trial Court decreeing the suit in favour of the plaintiff
is erroneous and contrary to the material on record and is liable to
be set aside. He would further contend that the trial Court has
failed to frame proper issues on the pleadings urged by the parties
and the impugned judgment and decree passed by the trial Court is
mainly based on the assumptions and presumptions, which cannot
be sustained. He would further contend that with regard to oral
agreement, there must be clear terms and conditions which are
neither pleaded in the plaint nor in the evidence of P.W.1. He
would further contend that there is no concluded contract between
the plaintiff and defendants to prove the alleged oral agreement
entered into between the plaintiff and defendant No.1 dated
10.4.2010 and on that ground alone, the impugned judgment and
decree passed by the trial Court cannot be sustained. He would
further contend that the trial Court has not framed any issue with
regard to the hardship as contemplated under the provisions of
Section 20 of the Specific Relief Act though a reference is made in
respect of the provisions of the said section, without there being
any basis and therefore, on that ground also, the impugned
judgment and decree passed by the trial Court is liable to be set
aside.
11. The learned Counsel for the appellants-defendants
further contended that the defendant No.1 alone is not the absolute
owner as contended by the plaintiff. All the defendants are joint
owners of the property in question. Admittedly, the plaintiff has not
produced any authorization of the other defendants to agree with
the alleged oral agreement between the plaintiff and defendant
No.1. He would further contend that the plaintiff has not produced
any material document to prove his payment of advance amount of
Rs.5,11,000/- including the cheque. Defendant No.1 in his
evidence has categorically denied all the plaint averments except
the ownership and has contended that the alleged payment of Rs.2
lakhs through a cheque dated 10.4.2010 was in respect of
transaction between the plaintiff and defendants for demolition of
the building and for taking away all the materials, but nothing to do
with the alleged oral agreement. The same has been reiterated in
the evidence of defendant No.1 and nothing has been elicited in his
cross-examination. Therefore, the very suit filed by the plaintiff
against the defendants on the alleged oral agreement is not
maintainable.
12. The learned Counsel for the appellants-defendants
further contended that P.Ws.2 to 6 are Members of the Community
of the plaintiff and also the Members of the Committee of the Jain
Hospital as admitted by P.W.1. Exs.P.16 to 20 are the General
Power of Attorneys issued by the children of the defendants in
favour of defendant No.1 in the year 2009, but nothing to do either
with the transaction or it is helpful to the case of the plaintiff. He
would further contend that the parties negotiated for demolition of
the building for the first time earlier and they were not knowing
each other in view of the oral evidence adduced on behalf of the
plaintiff.
13. In support of his contentions, the learned Counsel for the
appellant-defendants relied upon the following decisions of the
Hon'ble Supreme Court:
i) Brij Mohan and Others -vs- Sugra Begum and Others
Reported in (1990) 4 SCC 147, paragraphs 20 and 22;
ii) V.R. Sudhakara Rao and Others -vs- T.V. Kameswari
Reported in (2007) 6 SCC 650 paragraphs 12 and 16;
iii) Ganesh Shet -vs- Dr.C.S.G.K. Setty and Others
reported in 1998 SC 2216, paragraphs-8, 10, 16, 23,
36 and 38
Therefore, he sought to allow the regular first appeal.
VII Arguments advanced by the learned
Counsel for respondent
14. Per contra, Sri P.N. Harish, learned Counsel for the
plaintiff-respondent while justifying the impugned judgment and
decree contended that since P.Ws.2 to 6 in categorical terms have
stated the terms and conditions of the oral agreement between the
plaintiff and defendant No.1 and in their cross-examination
conducted were on different dates, their evidence is more
believable. He would further contend that as the plaintiff had the
confidence on the defendants, he did not insist for receipt of the
advance amount paid in pursuance of the oral agreement dated
10.4.2010. He would further contend that by conjoint reading of
the written statement and the evidence of the defendants, it is clear
that there was an oral Agreement of Sale of the suit schedule
property between the parties and not for demolition of the building
and therefore, the impugned judgment and decree passed by the
trial Court is just and proper. He would further contend that P.W.4
- Hansraj Kawad - who was the tenant under the defendants and
examined on behalf of the plaintiff, has supported the case of the
plaintiff and that the parties were known to each other. The
impugned judgment and decree passed by the trial Court is based
on the oral and documentary evidence on record and is in
accordance with law and hence, this Court cannot interfere with the
same in exercise of powers under the provisions of Section 96 of
the Code of Civil Procedure (for short, hereinafter referred to as
'CPC').
15. The learned Counsel for the plaintiff-respondent further
contended that in view of the provisions of Section 20 of the
Specific Relief Act, the discretion has to be exercised in favour of
the plaintiff as more hardship would be caused to him, if specific
performance is refused by the defendants. He would further
contend that the intention of selling the suit schedule property is
not in dispute since many attempts were being made to sell the suit
schedule property as admitted by D.W.1. If there was no oral
agreement, then question of handing over the documents by the 1st
defendant to the plaintiff would not arise. He further drawing
attention of the Court to the evidence of P.Ws.2 to 6 contended that
they have deposed that there was an oral agreement between the
plaintiff and defendants, in pursuance of which, the plaintiff had
handed over the advance amount to the 1st defendant. If that was
so, even question of framing an issue under the provisions of
Section 20 of the Specific Relief Act by the trial Court, would not
arise. Therefore, he sought to dismiss the regular first appeal filed
by the defendants.
VIII Points for determination
16. In view of the aforesaid rival contentions urged by the
learned Counsel for both parties, the points that arise for
consideration in the present regular first appeal are:
i) Whether the appellants-defendants have
made out any case to interfere with the
impugned judgment and decree passed by
the trial Court decreeing the suit of the
plaintiff for specific performance of the oral
agreement in the facts and circumstances of
the present case?
ii) Whether the suit filed by the plaintiff for
specific performance based on the oral
agreement was maintainable in the facts
and circumstances of the present case?
17. We have given our thoughtful consideration to the
arguements advanced by the learned Counsel for the parties and
perused the entire material on record including the original records
carefully.
IX Consideration
18. The substance of the case of the respondent-plaintiff is
that the appellants-defendants are the joint owners of the suit
schedule property. The 1st defendant had entered into an oral Sale
Agreement dated 10.4.2010 with him agreeing to sell the suit
schedule property for Sale Consideration of Rs.40,11,000/- to him
as the 1st defendant was authorized on behalf of the defendants.
Accordingly, on the date of the oral Agreement, the plaintiff had
paid a sum of Rs.3,11,000/- as earnest money to the 1st defendant,
who in turn had promised to execute the registered Sale Deeds
after receipt of the balance Sale Consideration of Rs.35,00,000/-.
Inspite of repeated requests, the defendants did not fulfill their
contractual obligation. Therefore, the plaintiff was constrained to
issue legal notice on 7.6.2010. However, the 1st defendant instead
of complying with the demand made in the notice, got issued an
untenable reply that he had received the cheque for a sum of Rs.2
lakhs towards sale of dismantled building material and the plaintiff
was trying to alienate the suit schedule property in order to deceive
him. Therefore, the plaintiff had filed the suit.
19. It is the specific case of the defendants that they are not
disputing the joint ownership of the property in question. They
have filed the written statement admitting the joint ownership of
the suit schedule property, and denying the other plaint averments.
They have contended that neither the 1st defendant or any of the
defendants entered into oral Agreement of Sale as alleged, but the
plaintiff is making a false claim to link the cheque of Rs.2 lakhs
dated 10.4.2010 of Canara Bank, Main Branch, Nehru road,
Shivamogga issued in favour of the 1st defendant which was given
for a different transaction and has nothing to do with the suit as
alleged by the plaintiff. Infact there was an existing old building on
the plaint schedule site premises earlier. On getting the tenant
vacated from the said premises through the process of Court, the
existing building was intended to be demolished and the plaintiff
through his agents had come forward to purchase the building
materials offering Rs.2 lakhs after demolition of the building and to
take away all the building materials which was accepted by
defendant No.1. Accordingly, the cheque was issued only for taking
all building materials and there was no cause of action. Therefore,
the defendants sought to dismiss the suit.
20. In order to prove his case, the plaintiff examined himself
as P.W.1. In his examination-in-chief, he has deposed on par with
the plaint averments. In the cross-examination, he has admitted
that he and all witnesses belong to the Jain Community. P.W.4 -
Hansraj Kawad, who was his Auditor and President of the said
Community and some of the witnesses, who were also the Members
of Committee of the Jain Community Hospital, were in search of the
place for construction of their own hospital and the defendants were
never known to him or he had seen them earlier to the transaction
and he came to know the defendants only on the date of the
transaction and on the same day. He has denied that, the cheque
issued, was only for taking away the building materials after
demolition and has admitted that after demolition of the old
building, the suit schedule property was vacant at the time of giving
evidence. He has further denied that within one month from
10.4.2010, the building was demolished and the building materials
were removed. In his cross-examination, he has deposed that he
had paid a sum of Rs.2 lakhs by way of cheque and a sum of
Rs.3,11,000/- by way of cash as requested by defendant No.1, in
turn of which, he did not demand receipt for having paid the said
amount since P.W.4-Hansraj assured him that, there would be no
difficulty in giving the said amount as he was the tenant. Further
as to why there was no document of agreement in writing, he has
deposed that as the defendants agreed to execute the Sale Deed
within twenty days and on the said assurance given by P.W.4-
Hansraj as well as having confidence on 1st defendant, he did not
demand for written document. He has admitted that the
negotiation took place between 12.30 noon to 1.00 p.m. and
information was sent through P.W.4 asking him to be present for
the negotiation.
21. P.W.1 further deposed that, P.W.2 - Pradeep Kumar is
the Chartered Account and all other remaining witnesses i.e.,
P.W.1- Mohan Kumar, P.W.3 - Javerilal Jirwala, P.W.4 - Hansraj
Kawad, P.W.5 - Gautham Chand Lunawath, P.W.6 - Gautham
Chand K., are all business man and were present on the date of
negotiation. P.W.1 has further deposed that P.W.2 is his auditor.
He asked him to accompany him to give advise regarding mode of
payment of earnest money. All the witnesses in the list viz., P.W.2
to 6, who were friends for so many years had accompanied him and
they were all speaking Rajasthani Language. Except Serial Nos.7
and 8, all other witnesses mentioned in the witnesses list, were the
Members of the Hospital Committee belonging to Jain Community.
22. P.W.2 - Pradeep Kumar, who is the Chartered
Accountant has deposed that he knew the plaintiff and the
defendants. There was a negotiation between the plaintiff and the
defendants in respect of the schedule property on 10.4.2010 which
had taken place at the residence of defendant No.1 and he, plaintiff
and defendants were all present there. After negotiation, the
defendants entered into an Oral Agreement dated 10.4.2010
agreeing to sell the suit schedule property for a Sale Consideration
of Rs.40,11,000/- to the plaintiff. Accordingly, the plaintiff paid a
sum of Rs.5,11,000/- as earnest money to the defendants and the
defendants promised to complete the Sale transaction by executing
the Registered Sale Deed in favour of the plaintiff after
acknowledging the balance Sale Consideration of Rs.35,00,000/-.
The plaintiff also paid the said earnest amount by way of cash, a
sum of Rs.3,11,000/- as well as through a cheque a sum of Rs.2
lakhs in favour of the defendants which was acknowledged by the
1st defendant and also on behalf of defendant Nos.2 to 4. At the
time of entering into oral Agreement of Sale, the defendants were
supposed to deliver all the original title deeds and other relevant
documents in respect of the suit schedule property to the plaintiff,
but only photostat copies of the said documents were delivered. In
his cross-examination, he has admitted that he is running his Office
in Gandhi Bazaar since 1997; he and other witnesses belong to the
Jain Community; he is the Auditor of the witnesses - Mohan Kumar,
Hansraj, Javerilal Jirwala, who without consulting him will not enter
into any transaction. On the date of the agreement, when he went
to his house to have the lunch which was in S.P.M. road, plaintiff
came to him and took him for the negotiation. Though defendant
No.1 told that the value of the suit property is worth for about
Rs.60,00,000/-, plaintiff told that he is willing to give only a sum of
Rs.35,00,000/- and the negotiation took place for about half an
hour. Atlast, the plaintiff agreed for Rs.40,11,000/- and paid a sum
of Rs.3,11,000/- by way of cash and a sum of Rs.2 lakhs by way of
cheque as advance. As there was friendship between the plaintiff
and defendant No.1, the plaintiff did not demand receipt for having
paid the said amount and thereafter, he did not know what
happened. He has denied the suggestion that the defendants had
not received any amount.
23. P.W.3-Javerilal Jirwala also has deposed on par with
P.Ws.1 and 2 stating that he was also present on the date of
transaction and there was oral agreement between the plaintiff and
the defendants. In his cross-examination, he has admitted that
earlier to the transaction, he was not knowing either of the
defendants and his house is situated just in the opposite row of
defendant No.1's house, where he is residing. There was no
transaction between himself and defendant No.1. He has admitted
that the plaintiff is running a shop in the place owned by him.
Since plaintiff had invited him before one week for the negotiation
that had taken place on 10.4.2010 with regard to purchase of some
property, he had been to the house of defendant No.1 at about
12.30 noon on 10.4.2010. He has further deposed that the Sale
Deed would be executed within twenty days from the date of
transaction; Usually there should have been Agreement in writing,
but the said Agreement was not put in writing, since the defendants
had agreed to execute the Sale Deed within 20 days and the date of
registration was nearer and therefore, they did not demand for any
receipt for payment of said amount; Normally in the Jain
Community, people would transact only through brokers; He does
not know who informed the plaintiff about the sale of the suit
property. After negotiation, the value of the property was reduced
from Rs.60 lakhs to Rs.40,11,000/-. He has denied the suggestion
that the advance amount was paid only for demolition of building
materials and not for purchase of land. The evidence of P.W.3 is
contrary to the evidence of P.Ws.1 and 2 stated supra.
24. P.W.4 - Hansraj Kawad, who is businessman as well as
tenant of defendant No.1 has deposed that he had good
acquaintance with defendant No.1. As defendants had informed
that they are going to sell the property in question, he was asked to
look for prospective buyers. Accordingly, he informed the plaintiff
to buy the suit schedule property and then the negotiation took
place between the plaintiff and defendant No.1 in respect of the
property in question. On 10.4.2010, he was present and apart from
plaintiff and defendants, Pradeep Kumar, Dinesh Kumar Kothari,
Javerialal Jirwala, Gouthamchand Lunawath, Gouthamchand K. and
some other persons were also present. After negotiation, the
defendants entered into a oral Sale Agreement on 10.4.2010
agreeing to sell the schedule property for a Sale Consideration of
Rs.40,11,000/- to the plaintiff. In terms of the said agreement, the
plaintiff paid a sum of Rs.5,11,000/- as earnest amount to the
defendants and the defendants promised to execute the registered
Sale Deed in favour of the plaintiff after acknowledging the balance
Sale Consideration of Rs.35,00,000/-. The plaintiff paid the said
earnest amount by way of cash a sum of Rs.3,11,000/- as well as
through cheque, dated 10.4.2010 for a sum of Rs.2 lakhs to the
defendants and defendant No.1 acknowledged the same for himself
and on behalf of defendant Nos.2 to 4, and the defendants had
promised to execute the Registered Sale Deed in favour of the
plaintiff by receiving the balance Sale consideration within
30.4.2010. However, the defendants were supposed to deliver all
the Title Deeds and other relevant documents in originals in respect
of the property in question, but only photostat copies of some of
the documents were delivered to the plaintiff. In his cross-
examination, P.W.4 has admitted that he had taken the car shed for
the balance rent which is measuring to an extent of 10 x 15 ft. for
godown purpose; He knew the plaintiff for about 8 to 10 years and
there was no transaction between them. They all belonged to the
Jain Community and their language is Kannada. In the year 2010,
he came to know defendant No.1, who informed him about selling
of the property. Accordingly, on 10.4.2010, the plaintiff came to
his house and he and plaintiff went to the house of defendant No.1.
He has not enquired about the transaction with defendant No.1 and
he had volunteered to say that as he knew that defendant No.1
would be therein in his house. He had also not informed him about
they going to the house of defendant No.1. May be Mohan Kumar-
plaintiff had informed the other witnesses to come there. There
were three people on behalf of defendant No.1 and all the witnesses
were there on behalf of the plaintiff. There was negotiation
between defendant No.1 and plaintiff. We do not know the amount
of Sale Consideration. After negotiation, the sale consideration was
finalized and they all participated for terms and conditions. Except
payment of token advance, no other terms and conditions were
there. He only demanded for advance amount. In order to give
advance amount, plaintiff had brought a blank cheque, but
defendant No.1 demanded some cash. Therefore, a cheque for a
sum of Rs.2 lakhs was given and remaining sum of Rs.3,11,000/-
was paid in cash which he had brought from his house to the
defendant No.1. Since plaintiff and defendant No.1 were known to
him, he did not demand any receipt for having paid the advance
amount. The said statement made by P.W.4 is contrary to the
evidence of P.Ws.1 and 2. He also has admitted that when the
negotiation took place, there was an old building in that place and
on behalf of the Jain Community, they wanted to construct a
hospital. He was the Chairman of the Jain Community and other
witnesses were also the Members of the said Community.
25. P.W.5 - Goutham Chand Lunawath, who is another
businessman, has deposed that he knew the plaintiff and the
defendants. He was a tenant under the 1st defendant and was
having good acquaintance with him. The defendants had informed
him that they are intending to sell the schedule property and had
asked him to look for prospective buyers. Accordingly, he informed
the plaintiff, who had expressed his desire to buy the schedule
property. After negotiation between the plaintiff and the
defendants in respect of the schedule property in the house of
defendant No.1 in presence of other defendants and witnesses, the
defendants entered into an oral Sale Agreement on 10.4.2010
agreeing to sell the suit property for a Sale Consideration of
Rs.40,11,000/- to the plaintiff, in terms of which, the plaintiff paid a
sum of Rs.5,11,000/- as earnest amount to the defendants and
defendants promised to complete the sale transaction by excecuting
the registered Sale Deed in favour of the plaintiff after
acknowledgment of the balance Sale Consideration of
Rs.35,00,000/-. In his cross-examination, he has admitted that
prior to 10.4.2010, he was not knowing defendant No.1 or other
defendants and even he had not met the brothers of the 1st
defendant. The plaintiff invited him one day prior to the negotiation
of the transaction of the suit schedule property. He has admitted
the suggestion that generally in respect of big amount of
transaction, the Agreement will be in writing. Since there was a
discussion between the plaintiff and defendant No.1 that the Sale
Deed would be executed within 20 days, they decided that not to
make an agreement in writing. The plaintiff had paid only a sum of
Rs.3 lakhs and he was not aware of the reason for non-payment of
entire amount through cheque. He has also admitted that with
regard to negotiation of big amount, usually receipt will be
demanded. There was no obligation for the 1st defendant to give
the receipt and even the plaintiff did not demand the receipt. He
has further admitted that there was an old house existing in the
suit schedule property and he was not aware for what purpose, the
plaintiff had given a sum of Rs.2 lakhs through cheque to defendant
No.1 whether for demolition of the old building and for taking away
the building materials; there was a discussion for construction of
Jain Community Hospital in the SPM Road; he is the Member of the
Jain Community; the said hospital is being run in a rented building.
26. P.W.6 - Goutham Chand K., another businessman has
deposed that he knew the plaintiff and the defendants. He was
tenant under the 1st defendant and was having good acquaintance
with him. He was informed that the defendants were intending to
sell the schedule property and he was asked to look for prospective
buyers. As such, he had informed the plaintiff, who had expressed
his desire to buy the schedule property. Then there was
negotiation between the plaintiff and the defendants in respect of
the schedule property on 10.4.2010 which took place at the
residence of the 1st defendant. He has further deposed that on the
date of negotiation, apart from plaintiff and defendants, all
witnesses on behalf of the plaintiff were present. After oral
agreement for the Sale Consideration of Rs.40,11,000/-, the
plaintiff paid a sum of Rs.5,11,000 to the defendants, who promised
to complete the Sale transaction by execution of the registered Sale
Deed after payment of balance Sale Consideration of Rs.35 lakhs.
He has further deposed that defendants delivered the Photostat
copies of some of the documents to the plaintiff though they were
supposed to deliver all the Title Deeds and other relevant
documents in originals in respect of the suit schedule property. In
the cross-examination, he has admitted that he knew the plaintiff
for more than 10 to 12 years and they were friends belonging to
the same Jain Community. He was involved in all the activities of
the Community; His mother tongue was Hindi; plaintiff has got his
own house and shop. He has denied the suggestion that there was
no necessity for plaintiff to buy the property. He has admitted that
he never had met earlier the 1st defendant or his brothers; there
was no transaction between him and the defendants and till then he
never knew where the house of defendant No.1 was situated. After
negotiation, the price was fixed at Rs.40,11,000/-. The plaintiff had
brought the cheque for payment of advance amount, but since the
1st defendant demanded the advance amount by way of cash, a
sum of Rs.3,11,000/- was paid by way of cash and the remaining
sum of Rs.2 lakhs by way of cheque. Defendants had agreed to
execute the Sale Deed within 20 days from the date of negotiation
in favour of the plaintiff and after acknowledgement of balance Sale
Consideration of Rs.35 lakhs, the plaintiff did not demand the
receipt for having paid the amount and at that time, the remaining
defendants were not present. Before going to the negotiation, he
had no idea about the rate of the property and what would be
advance amount they would demand. With regard to the
suggestion that without any idea, why the plaintiff had brought the
advance amount, he has replied that the plaintiff had brought only
the cheque and when the 1st defendant demanded for cash, Sri
Hansraj went to his house and brought the cash and gave it to the
plaintiff which was given to the 1st defendant. But the plaintiff did
not demand any acknowledgment for payment of the said amount.
He has further deposed that the Jain Community was running the
Hospital in the SPM road which was taken on rental basis. In order
to construct the hospital in the place owned by the Jain Community,
they were searching for a property and he has admitted the
suggestion that normally for purchase of property, they were going
through brokers.
27. D.W.1 - H.R. Subramanya Shastry, who is defendant
No.1 in his examination-in-chief has denied all the plaint averments
and has deposed that there was no oral agreement as alleged on
10.4.2010; he has not agreed for the Sale Consideration of
Rs.40,11,000/- or even he has not received any amount of
Rs.5,11,000/- or a sum of Rs.3,11,000/- or a sum of Rs.2 lakhs by
way of cheque as advance as alleged by the plaintiff on that day;
He has deposed that there was an old building in the suit schedule
property at SPM Road, Shivamogga. First it was given for rent and
after filing the suit, he got vacated the suit schedule premises. At
that time, the plaintiff had demolished the building through broker
and had taken away the demolished building materials assuring to
give him a sum of Rs.2 lakhs. So he had agreed for the same.
Therefore, the plaintiff had given a cheque drawn on Canara Bank
for a sum of Rs.2 lakhs. Thereafter, the plaintiff has filed the suit
claiming specific performance on the basis of false allegation. In
the cross-examination, D.W.1 has denied the suggestions that all
the brothers have discussed to demolish the building after vacating
the tenants from the building and informing the broker; on the date
of oral or written agreement, he has given key to the plaintiff. He
has deposed that as there was no agreement, the transaction
between him and the plaintiff was only for demolition of the
building, since the plaintiff had told that he would demolish the
building within one month, he had handed over original records of
the permission granted by the Municipality by keeping the Photostat
with him. He had also informed about the same to the Municipality
and had paid the tax upto date.
28. D.W.1 has further deposed that the discussion was only
for demolition of the building and he has not given any documents
pertaining to the property to the plaintiff, except documents of the
building for demolition of the building and it was agreed that after
demolition of the building, all the documents will have to be
returned. He has also admitted that Ex.P.1 is a Xerox copy of the
tax register pertaining to the suit property and he has taken back
the documents after demolition of the building, depicting that after
demolition of the building, tax has been paid for the vacant land.
The transaction between them was only for demolition of the
building and there was no oral agreement as alleged. He has
further deposed that Exs.P.16 to 20 are the receipts for having paid
the tax and challan after demolition of the building. He has further
reiterated that there was no transaction with regard to alteration of
the schedule property. He has denied the receipt of Rs.5,11,000/-
lakhs i.e., Rs.2 lakhs by way of cheque and Rs.3,11,000 by way of
cash in presence of the witnesses. He has also denied the
suggestion that he would give all the documents pertaining to suit
schedule property and within one month he would register the suit
property. Even there was no written agreement. He has further
deposed that he had not executed any oral agreement for sale of
the schedule property, except for demolition of the old building and
had received a sum of Rs.2 lakhs for removal of the building
materials.
29. On careful reading of the aforesaid evidence of plaintiff
and defendants, it is clear that defendant No.1 is not alone the
owner of the suit schedule property. Except the oral agreement set
up by the plaintiff, there is no other materials including receipt of
advance amount, which is denied by the 1st defendant, stating that
the oral agreement was only for demolition of old building and
removal of demolished materials for a sum of Rs.2 lakhs and the
same was received through cheque. Even it is clear that the
presence of P.Ws.2 to 6 at the time of oral agreement is neither
averred in the plaint nor in the legal notice issued by the plaintiff to
the defendants. The presence of P.Ws.2 to 6 is whispered for the
first time in the evidence which is contrary to the plaint averments
and legal notice issued. All the witnesses have categorically stated
that the plaintiff and P.Ws.2 to 5 belong to the Jain Community and
are Members of the Hospital Committee as admitted by them. Even
in the evidence of P.W.3, who is the auditor, in whose presence the
transaction took place, it is not forthcoming why there was no
receipt for having paid a cash of Rs.3,11,000/-. Plaintiff alone
deposing that he has paid a sum of Rs.3,11,000/- by way of cash is
contrary to the evidence of P.W.4, who in his cross-examination has
deposed that the plaintiff had brought only a sum of Rs.2 lakhs by
way of cheque and remaining sum of Rs.3,11,000/- by way of cash
was brought from his house, which was paid in presence of all the
witnesses. Hence the evidence of P.Ws.1, 2 and 3 are contrary to
the evidence of P.W.4 which material facts has not been considered
by the trial Court.
30. It is also relevant to consider that though according to
the plaintiff, he had paid a cash of Rs.3,11,000/- to the 1st
defendant, why he has not demanded the receipt or
acknowledgment for having paid the same is not forthcoming. It is
also not in dispute that the defendants are the joint owners of the
suit schedule property and there is no material either oral or
document to show that the other defendants have authorized the
1st defendant to enter oral agreement as alleged by the plaintiff,
since the 1st defendant has denied the very alleged oral agreement
entered into between the parties on 10.4.2010. The plaint
averments also does not depict the terms and conditions of the oral
agreement nor there is any pleading in the plaint or in the evidence
of P.W.1. There is no concluded contract between the plaintiff and
the defendants. The plaintiff witnesses have admitted that the
negotiation was for the first time between the parties and there was
no agreement earlier between them.
31. In view of the oral agreement set up by the plaintiff in
respect of the immovable property, heavy burden is on him to
discharge the same when there was an oral contract that too when
the defendants have filed a written statement denying the oral
agreement contending that the cheque received was only for a sum
of Rs.2 lakhs for demolition of the old house and for removal the
building materials after demolition. The payment of Rs.3,11,000/-
by way of cash by the plaintiff to the 1st defendant is not proved
since at one breath, the plaintiff says that he has paid the amount
in presence of other witnesses and at another breath P.W.4-Hansraj
Kavad says that plaintiff had brought a cheque only for a sum of
Rs.2 lakhs and he went and brought a sum of Rs.3,11,000/- from
his house, which was paid to the defendant. The same is denied by
the 1st defendant. It is also not the case of the plaintiff that the
other defendants were present at the time of giving the advance
amount of Rs.3,11,000/- through cash to the 1st defendant.
32. Even on careful perusal of the evidence of plaintiff and
P.Ws.2 to 6, it is clear that they all belong to the Jain Community,
Members of the Committee of the Jain Hospital and were search for
a site for construction of a new Hospital for their Community.
P.Ws.2 to 6 are interested witnesses on behalf of the plaintiff as the
plaintiff wanted to purchase a property on behalf of the Jain
Community for construction of a Jain Hospital. If the transaction
had taken place between the parties as alleged, P.W.2 being the
auditor, should have taken care by insisting an agreement in writing
and ought to have taken an acknowledgement/receipt for payment
of the advance amount. Though the trial Court proceeded to decree
the suit ignoring the above circumstances only on the ground that
the plaintiff has consistently spoken to about cash payment made
by him towards the advance amount to defendant No.1 and
admitted receipt of cheque for a sum of Rs.2 lakhs and the
evidence of P.W.4 that his house was situated about 200 feet away
from the house of defendant No.1 and he having gone to his house
and brought a cash of Rs.3,11,000/- and paid to 1st defendant when
defendant No.1 insisted for payment of part of the advance in cash,
a finding has been recorded that the deposition of P.W.5 was in
natural way with regard to, he going with the plaintiff to the house
of 1st defendant only as a friend to him and not as a witness to the
transaction. The trial Court has erred recording a finding that
P.Ws.1 to 6 and D.W.1 have admitted that the Jain Community is
running a charitable hospital in a rented premises on SPM Road and
the plaintiff setting up to putforth an oral agreement only to have a
permanent building for the said hospital, is not supported by any
pleadings in the written statement. The Trail Court has ignored the
fact that the plaintiff, who has come to the Court with a set up of an
oral agreement, has to prove his own case independently and he
cannot succeed on the weakness of the defendants. Merely
because defendant No.1 had expressed his intention to sell the
property, unless the plaintiff proves by both oral and documentary
evidence and only with reference to pleadings that there was an
oral agreement entered into between the parties i.e., the plaintiff
and defendant No.1 when the suit schedule property is the joint
property of defendant Nos.1 to 4, it is the plaintiff, who has to
prove that all the defendants had agreed for oral agreement. In
the absence of any pleading and evidence, it is not safe for the
Court to agree with one sided evidence of P.Ws.1 to 6, who belong
to the same Community and the plaintiff and his witnesses were
aspiring to have a separate place for construction of a Jain Hospital,
naturally the witnesses support the case of the plaintiff, who want
to purchase the property on behalf of the Jain Community for
construction of a hospital. Therefore, as they are highly interested
and partisan witnesses, their evidence cannot be solely relied upon
unless the same is proved by oral and documentary evidence on
record in view of the provisions of Section 54 of the Transfer of
Property Act, the said material aspect has not at all been
considered by the trial Court while passing the impugned judgment
and decree.
33. The Hon'ble Supreme Court while considering the
provisions of Section 54 of the Transfer of Property Act with regard
to specific performance of oral agreement of sale sought in the case
of Brij Mohan and Others -vs- Sugra Begum and Others reported
in (1990) 4 SCC 147 at paragraphs 20 and 22 has held as under:
"20. We have given our careful consideration to
the arguments advanced by Learned Counsel for
the parties and have thoroughly perused the
record. We agree with the contention of the
Learned counsel for the appellants to the extent
that there is no requirement of law that an
agreement or contract of sale of immovable
property should only be in writing. However, in a
case where the plaintiffs come forward to seek a
decree for specific performance of contract of sale
of immovable property on the basis of an oral
agreement alone, heavy burden lies on the
plaintiffs to prove that there was consensus ad-
idem between the parties for a concluded oral
agreement for sale of immovable property.
Whether there was such a concluded oral contract
or not would be a question of fact to be
determined in the facts and circumstances of each
individual case. It has to be established by the
plaintiffs that vital and fundamental terms for sale
of immovable property were concluded between
the parties orally and a written agreement if any
to be executed subsequently would only be a
formal agreement incorporating such terms which
had already been settled and concluded in the
oral agreement.
22. In the oral evidence P.W. 1 Shri Brij Mohan,
plaintiff No. 1 stated that in the meeting arranged
in the 3rd week of April, 1979 Shri Ibrahim and
Shri Arif Ali came to the plaintiff's shop and then
they all went to the residence of defendant No. 1.
The second plaintiff also accompanied them. The
husband of defendant No. 1 Shri Yunus was also
present at the meeting. He was introduced to them
insisted for Rs.10,00,000 as consideration of the
suit property and told the plaintiffs that she would
obtain the permission from the ceiling au- thority.
Shri Brij Mohan then stated that they raised their
offer to Rs.8,00,000 defendant No. 1 told them that
she would think over for two or three days and
inform them through Shri Arif Ali, Thereafter Shri
Brij Mohan states regarding the bargain held on
3.5.79. According to him he himself, second
plaintiff and Mr. Ibrahim Moosa went to Shri Arif Ali
on 3.5.79. Shri Arif Ali told them that defendant
No. 1 was not willing to sell the suit property for
less than Rs.10,00,000. And if they were willing to
purchase for Rs.10,00,000 then they were welcome
to do so at any time. Shri Brij Mohan then said that
they agreed to purchase the suit property for
Rs.10,00,000 and asked Shri Arif Ali to get the
confirmation from defendant No. 1. Shri Arif Ali
spoke to defendant No. 1 on telephone and then
informed that defendant No. 1 was willing to sell
the property to them for Rs.10,00,000. Shri Arif Ali
then said that they would buy the stamps for
agreement and fixed 6.5.79 morning for a meeting
with defendant No. 1. From a perusal of the above
evidence it would be abundantly clear that nothing
was settled on 3.5.79 except the fact that the
plaintiffs had conveyed their approval to purchase
the suit property for Rs.10,00,000 and Shri Arif Ali
after speaking to defendant No. 1 was willing to sell
the property for Rs.10,00,000. Admittedly at the
same time a meeting was fixed with defendant No.
1 on the morning of 6.5.79. According to the case
set up by defendant No. 1 she had never agreed to
obtain the permission from the ceiling Authority. It
would be important to note that no averment was
made in the plaint that defendant No. 1 had agreed
to obtain the permission from the ceiling Authority
in the meeting held in the third week of April, 1979.
However, Shri Brij Mohan plaintiff has sought to
introduce this fact for the first time in his statement
in the Court that defendant No. 1 had told them in
the meeting held in the third week of April, 1979
that she would obtain the permission from the
ceiling Authority. We are unable to accept the
above statement of Shri Brij Mohan that in the
meeting held in the third week of April, 1979 itself
the defendant No. 1 had agreed that she would
obtain the permission from the ceiling Authority. It
is an admitted position that till the meeting held in
the 3rd week of April, 1979 the plaintiffs had
offered Rs.8,00,000 and the first defendant had
told them that she would consider and
communicate her views through Shri Arif Ali some
time later. We agree with the conclusion of the
High Court in this regard that without first
determining the sale price, it was quite unlikely
that the parties would have bargained as to who
should obtain the clearance under the Urban Land
Ceiling Act. It was known. to the parties that until
the clearance under the Urban Land Ceiling Act and
the Income Tax clearance, the property will not be
registered. The High Court was right in concluding
that it is unbelievable that in the third week of
April, 1979 when still there was a wide gap of Rs.
2,00,000 in the price payable for the suit building
the parties would have stipulated about the
condition as to who should obtain the per- mission
under the Urban Land Ceiling Act. It is further
pertinent to mention that even in Exhibits A-1 and
A-2 which are drafts of agreement of sale there is
no reference to the oral agreement said to have
taken place on 3.5.79. In case all the terms had
already been concluded in the oral contract
between the parties on 3.5.79 and only a formal
agreement was to be reduced in writing on 6.5.79,
then in that case there ought to have been a
mention in the draft agreement exhibits A-1 and A-
2 regarding the oral agreement of 3.5.79.
According to the statement of Shri Brij Mohan
plain- tiff No. 1 ,himself, nothing was discussed
with defendant 'No. 1 herself and for that reason a
further meeting was fixed at the house of the first
defendant in the morning of 6.5.79. Shri Arif Ali
may have been an Income Tax Advocate looking
after the income tax and wealth tax matters of
defendant No. 1 but he was not a General Power of
Attorney holder to negotiate or settle any terms
with regard to any transaction of immovable
property belonging to defendant No.1. It is further
important to note that even in the agreement to
sell exhibit B-4 dated 22.6.1979 between
defendent No. 1 and defendants Nos. 3 and 4, no
responsibility had been taken by the defendant No.
1 for obtaining the clearance from the Urban Land
Ceiling Authority. The High Court in these
circumstances rightly believed the contention of the
defendant No. 1 that the agreement fell through
because the plaintiffs insisted that defendant No. 1
should obtain the permission from the Urban Land
Ceiling Authority while defendant No. 1 did not
agree for the same. There was no clinching
evidence to show that this stipulation was thought
of by the parties on any day prior to 6.5.79. Thus
in the above circumstances when the parties were
consciously negotiating about the bringing of no
objection certificate from the Urban Land Ceiling
Authority and the case put forward by defendant
No. 1 in this regard has been believed there is no
question of applying the principle contained in
Section 55 of the Transfer of Property Act. The
general principle contained in Sec. 55 of the
Transfer of Property Act regarding rights and
liabilities of buyer and seller can only apply in the
absence of a contract to the contrary and not in a
case where the parties consciously negotiated but
failed in respect of any term or condition, as a
result of which the agreement itself could not be
settled or concluded. Once it is held, established in
the present case that no agreement was finally
concluded or settled on 6.5.79 and negotiations
failed and before this date it was never settled that
defendant No. 1 would bring the no objection
certificate from Urban Land Ceiling Authority, there
is no question of applying general principles
contained in Section 55 of the Transfer of Property
Act."
34. The Hon'ble Supreme Court while considering the
provisions of Sections 10 and 20 of the Specific Relief Act, 1963 and
Section 53 of the Transfer of Property Act with regard to grant of
specific performance of contract and oral sale agreements in the
case of V.R. Sudhakara Rao and Others -vs- T.V. Kameswari
reported in (2007) 6 SCC 650 at paragraphs-12 and 16 has held as
under:
"12. The High Court held that the evidence is not
of a very clear proof. The payment of advance
amounting to Rs.16,575/- was established.
Therefore, the alternative relief in favour of plaintiff
in OS No. 350 of 1982 i.e. refund of Rs.16,575/-
with interest at the rate of 12% p.a. from the date
of payment of the amount till the date of
realization, was granted. It was directed that there
shall be a charge over the plaint schedule for
realization of the said amount. So far as the other
suit is concerned, it was held that the suit OS No.
350 of 1982 for the relief of specific performance
was to be decreed to that extent. The plaintiff in OS
No.131 of 1982 was entitled to the decree of
possession and ancillary reliefs. Appeal was
accordingly disposed of.
16. The High Court has rightly concluded that
there is no clear proof relating to the other terms of
condition. The relief of specific performance is
discretionary relief and except the oral evidence,
there is no clear evidence to prove several of the
essential terms which have been taken note of by
the High Court. The High Court, on analyzing the
evidence, has come to hold that except Exhibit B-1
and the oral evidence of DW 1 and DW2, there is
no other clear proof relating to the other terms and
conditions of the contract which can be termed as
essential conditions like delivery of possession and
also the obtaining of permission from the Urban
Land Ceiling Authorities and therefore, it cannot be
said that all the essential terms and conditions of a
well concluded contract had been established in the
case at hand."
35. When the plaintiff has set up an oral agreement and has
not mentioned any terms and conditions in the plaint, it is clear that
there was no contract between the parties and the decree for
specific performance could not have been granted by the trial Court
mainly on the basis of the evidence of P.Ws.2 to 6, who are
belonging to the same community as that of the plaintiff and are all
Members of the Committee of the Jain Hospital. The plaintiff
wanted to purchase a site on behalf of the said Community for
construction of Jain Hospital. Our view is fortified by the dictum of
the Hon'ble Supreme Court in the case of Ganesh Bhat -vs- Dr.
C.S.G.K. Setty and Others reported in AIR 1998 SC 2216 wherein at
paragraphs-8, 9, 10, 23, 36 to 38, it is held as under:
"Point 1:
8. On this point, as to whether there is a
concluded agreement at Delhi on 25-1-1984,
there is abundant evidence to say that there is no
such concluded agreement. This is clear from the
suit notice Ex. P-12 dated 2-7-1984 wherein the
plaintiff has stated clearly that at the Delhi
meeting, the 1st defendant said that he is yet to
consult his two brothers. The correspondence
between the parties and PW 2 subsequent to 25-
1-1984 has been read to us by the learned Senior
Counsel for the appellant-plaintiff and on reading
the same, we are clear that the finding of the
High Court that there is no concluded agreement
on 25-1-1984 at Delhi is unassailable and is
absolutely correct. The tenor of several letters
from PW 2 to the 1st defendant after 25-1-1984
shows that consideration for sale was not finalised
at Delhi. Learned Senior Counsel for the
appellant, after elaborate submissions has more
or less accepted this position and has
concentrated on the question which we have set
out under the third and fourth points. Hence there
can be no decree for specific performance of any
agreement dated 25-1-1984 as none has been
concluded on that day. We hold on Point 1
accordingly.
Point 2
9. The learned Senior Counsel for the appellant
has argued before us that the plaintiff must be
given relief in respect of the agreement which,
according to him, has been concluded at
Bangalore on 28-4-1984 and specific performance
can be granted in respect of such an agreement.
10. We have already stated that in the High
Court, when an opportunity for amendment of
plaint was given by the High Court to the plaintiff,
the same was spurned and not accepted by the
plaintiff's counsel. That being the attitude of the
appellant in the High Court, we are of the view
that the plaintiff cannot be given any relief for
specific performance of any such agreement
allegedly concluded at Bangalore on 28-4-1994.
Point 2 is also held against the appellant.
23. It is stated in Corpus Juris Secundum (Vol.
81-A, Specific Performance), (para 189) as
follows:
"In accordance with general rules, the relief
awarded in a suit for specific performance would
be based on the issues raised by the pleadings
and supported by the proof. More specifically,
relief awarded for the plaintiff must be authorised
by or be in conformity with his pleading in respect
of the contract to be enforced and the parties
thereto."
36. Another argument was that in his evidence,
the 1st defendant admitted that he signed the
draft agreement. The appellant's counsel has
contended that this is with reference to Ex. P-3
while the respondent's counsel has submitted that
this evidence of the 1st defendant has reference
to Ex. D-11, the draft set up by the 1st defendant
for Rs 6.50 lakhs. It has also been contended for
the respondents that there is no signature of the
1st defendant on Ex. P-3.
37. Applying the legal principles referred under
Point 3 to the above facts it will be noticed --
even assuming that a contract dated 28-4-1984
at Bangalore is proved, which in our view, is not
proved -- that this case does not fit into the
exceptions stated by Fry on Specific Performance
inasmuch as this is not a case where there has
been part-performance by delivery of possession.
Nor can it be said that the variation between
pleading and proof is immaterial or insignificant.
The plaintiff has also refused to amend the plaint
to seek relief on the basis of an agreement dated
28-4-1984, keeping the plaint as it is.
38. Nor can this case be brought within the
principles applicable to "general relief" because
the plaint specifically says that there is a
concluded contract on 25-1-1984 at Delhi which is
belied by the oral and documentary evidence.
However liberally the plaint is construed, all that
it says is that the 1st defendant came to
Bangalore and asked the plaintiff to be ready. It
does not speak of any fresh agreement entered
into at Bangalore on 28-4-1984. Nor are we able
to spell out any such agreement concluded on 28-
4-1984. The grant of any general relief on the
basis of an agreement of sale dated 28-4-1984 --
even if proved -- will be doing violence to the
language in the plaint to the effect that the
parties concluded an agreement on 25-1-1984.
36. In so far as the contention of the plaintiff that he had
paid an advance amount of Rs.5,11,000/- out of which a sum of
Rs.2 lakhs by way of cheque and remaining sum of Rs.3,11,000/-
by way of cash, the 1st defendant has specifically stated in his
written statement as well as in his evidence that there was a
transaction with regard to demolition of the old house that existed
in the suit schedule property and to take away the building
materials and therefore, the plaintiff had issued a cheque and in
respect of payment of cash, the plaintiff has not proved by
producing any of the documents except the evidence of the partisan
witnesses i.e., P.Ws.2 to 6. A mere issue of a cheque in favour of
the payee by itself will not be the evidence of payment even, if the
cheque is encashed by the payee. It has to be established that the
said cheque issued was for an oral agreement between the parties
and must be proved by the plaintiff by other evidence, if not, it
would lead to dangerous and disastrous consequences. Therefore,
the finding of the trial Court that there was payment of
Rs.5,11,000/- out of which a sum of Rs.2 lakhs by way of cheque,
cannot be accepted, in the absence of any other proof based on the
said cheque when the 1st defendant has taken the contention that
he has received a sum of Rs.2 lakhs for demolition of the old
building and for taking away the building materials by the plaintiff
after demolition. Therefore, on that ground also the impugned
judgment and decree passed by the trial Court cannot be sustained.
37. It is well settled that where the plaintiff comes forward
to seek a decree for specific performance of contract of sale of
immovable property on the basis of an oral agreement alone,
"heavy burden lies on the plaintiff" to prove that there was
consensus ad idem between the parties for a concluded oral
agreement for sale of immoveable property. Whether there was
such a concluded oral contract or not would be a question of fact to
be determined in the facts and circumstances of each individual
case. It has to be established by the plaintiff that vital and
fundamental terms for sale of immovable property were concluded
between the parties and in terms of the provisions of Section 20 of
the Specific Relief Act where discretion for grant of specific
performance is discretionary, but it has to be exercised in
accordance with 'sound and reasonable judicial principles'. To grant
specific performance, however, the Court is not bound to grant such
a relief merely because it is lawful to do so. The Court should
meticulously consider all facts and circumstances of each case and
to see that it is not used as an instrument of oppression to have an
unfair advantage not only to the plaintiff but also to the defendant.
The relief of specific performance is discretionary but not arbitrary;
hence, discretion must be exercised in accordance with sound and
reasonably judicial principles. The said principle is not at all
considered by the trial Court while passing the impugned judgment
and decree which cannot be sustained. Our view is fortified by the
dictum of the Hon'ble Supreme Court in the case of K. Nanjappa
(Dead) by Legal Representatives -vs- R.A. Hameed Alias
Ameersab (Dead) by Legal Representatives and Another reported
in (2016)1 SCC 762 wherein at paragraphs-21, 22, 23, 24, 25, 32
and 33, it is held as under:
"21. There is no dispute that even a decree for
specific performance can be granted on the basis
of oral contract. Lord Du Parcq in a case
[Shankarlal Narayandas Mundade v. New Mofussil
Co. Ltd., 1946 SCC OnLine PC 7 : (1945-46) 73
IA 98 : AIR 1946 PC 97] observed, while deciding
a suit for specific performance, that an oral
contract is valid, binding and enforceable. A
decree for specific performance could be passed
on the basis of oral agreement. This view of a
Privy Council was followed by this Court in
Kollipara Sriramulu v. T. Aswatha Narayana [AIR
1968 SC 1028] and held that an oral agreement
with a reference to a future formal contract will
not prevent a binding bargain between the
parties.
22. However, in a case where the plaintiff comes
forward to seek a decree for specific performance
of contract of sale of immovable property on the
basis of an oral agreement or a written contract,
heavy burden lies on the plaintiff to prove that
there was consensus ad idem between the parties
for the concluded agreement for sale of
immovable property. Whether there was such a
concluded contract or not would be a question of
fact to be determined in the facts and
circumstances of each individual case. It has to be
established by the plaintiffs that vital and
fundamental terms for sale of immovable property
were concluded between the parties.
23. In a suit for specific performance of a
contract, the court has to keep in mind Section 20
of the Specific Relief Act, 1963. This Section
preserves judicial discretion to grant decree for
specific performance. However, the court is not
bound to grant specific performance merely
because it is lawful to do so. The court should
meticulously consider all facts and circumstances
of the case and to see that it is not used as an
instrument of oppression to have an unfair
advantage not only to the plaintiff but also to the
defendant.
24. In Surya Narain Upadhyaya v. Ram Roop
Pandey [1995 Supp (4) SCC 542] , this Court
while considering Section 20 of the Specific Relief
Act held as under: (SCC pp. 543-44, para 4)
"4. Though the decree for specific
performance is a discretionary power,
yet the court is not bound to grant
such a relief merely because it is
lawful to do so; but the discretion of
the court is not arbitrary, but sound
and reasonable, guided by judicial
principles of law and capable of
correction by a court of appeal.
Therefore, the discretion should be
properly exercised keeping in view the
settled principles of law as envisaged
in Section 20 of the Act. This case
demonstrates that the High Court
[Ram Roop Pandey v. Surya Narain
Upadhyaye, Second Appeal No. 2385
of 1974, decided on 26-9-1979 (All)
(unreported)] took irrelevant
consideration into account to refuse to
grant the decree for specific
performance. It also committed
manifest illegality in reversing the
concurrent finding of facts recorded
by the trial court as well as the first
appellate court, namely, the appellant
has always been ready and willing to
perform his part of the contract."
25. It is equally well settled that relief of specific
performance is discretionary but not arbitrary,
hence, discretion must be exercised in accordance
with sound and reasonably judicial principles. The
cases providing for a guide to courts to exercise
discretion one way or the other are only
illustrative, they are not intended to be
exhaustive. In England, the relief of specific
performance pertains to the domain of equity, but
in India the exercise of discretion is governed by
the statutory provisions.
32. After examining the entire facts of the case
and the evidence produced on record, we are of
the definite opinion that it is not a fit case where
the discretionary relief for specific performance is
to be granted in favour of the respondent-
plaintiff. The High Court in the impugned
judgment [2003 SCC OnLine Kar 881] has failed
to consider the scope of Section 20 of the Specific
Relief Act and the law laid down by this Court.
33. For all these reasons, this appeal is allowed
and the impugned judgment [2003 SCC OnLine
Kar 881] passed by the High Court is set aside.
Consequently, the judgment of the learned trial
court is restored. Hence, the suit is liable to be
dismissed."
38. Though the learned Counsel for the plaintiff contended
that by conjoint reading of the written statement and the evidence
of the 1st defendant that there was an oral agreement of sale
between the parties in respect of the sale of the suit schedule
property and not an agreement for demolition of the old existing
building, on careful reading of the plaint averments, legal notice
and the evidence of both oral and documentary, it is clear that
there was no concluded contract between the plaintiff and
defendants in terms of the oral agreement and what were the terms
and conditions entered into between them are not forthcoming in
the plaint. Therefore, the contention of the learned Counsel for the
plaintiff cannot be accepted and as such, the trial Court was not
justified in decreeing the suit of the plaintiff.
39. It is also not in dispute that though the trial Court has
not framed any issue with regard to hardship as contemplated
under Section 20 of the Specific Relief Act, but while considering
issue No.5 as to whether the plaintiff is entitled to the relief as
sought for, has erroneously recorded a finding that in the evidence
of defendant No.1, he himself has deposed that the defendants
were intending to sell the suit schedule property and not to retain it
for themselves and keeping that in mind, D.W.1 even claims to
have informed many brokers to look for prospective buyers.
Therefore, no hardship or injury would be caused to the defendants,
if the suit for specific performance is to be decreed in favour of the
plaintiff, who has duly proved the oral agreement. The learned
Judge has failed to notice that in a case of specific performance of
contract, a greater degree of certainty is required and it demands a
clear, definite and precise understanding of all the terms and they
must be exactly ascertained before their performance can be
enforced. The jurisdiction to decree specific performance is
discretionary, and the Court is not bound to grant such relief merely
because it is lawful to do so; but the discretion of the Court is not
arbitrary, but sound and reasonable, guided by judicial principles
and capable of correction by a Court of Appeal. Admittedly, in the
present case, the plaintiff has set up an oral agreement dated
10.4.2010 and the same is denied by the defendants in their
written statement and also the presence of P.Ws.2 to 6 at the time
of oral agreement, which is neither pleaded in the plaint nor in the
legal notice and the presence of the witnesses - P.Ws.2 to 6 is
whispered for the first time in their evidence and admittedly, all the
witnesses belong to the plaintiff's community (Jain Community) and
also are the Members of the Committee of the Jain Hospital as
admitted by all the witnesses. In that view of the matter, the
plaintiff has failed to prove the oral agreement and has not proved
his case as pleaded in the plaint and therefore, the trial Court ought
not to have exercised its discretionary power in favour of the
plaintiff. On that ground also, the impugned judgment and decree
passed by the trial Court cannot be sustained.
X Conclusion
40. For the reasons stated above, point No.1 raised in the
present regular first appeal is answered in the affirmative holding
that the appellants-defendants have made out a case to interfere
with the impugned judgment and decree passed by the trial Court.
Accordingly, point No.2 has to be answered in the negative holding
that the suit filed by the plaintiff for specific performance based on
the oral agreement was not maintainable and therefore, the plaintiff
is not entitled to the relief of specific performance.
41. In view of the above, we pass the following:
XI RESULT
i) The regular first appeal is allowed;
ii) The impugned judgment and decree dated 11.2.2013
made in O.S.No.80/2010 on the file of the I Additional
Senior Civil Judge, Shivamogga is hereby set aside;
iii) The suit filed by the plaintiff for specific performance
based on oral agreement is dismissed; and
iv) Parties to bear their own costs.
Sd/-
JUDGE
Sd/-
JUDGE
Nsu/-
