Sri Pawankumar Dalmiya vs Sri Biligowda S/O Late Siddegowda
2021 Latest Caselaw 559 Kant

     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 11TH DAY OF JANUARY, 2021

                          PRESENT

           THE HON'BLE MRS.JUSTICE S.SUJATHA

                            AND

THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

                    R.F.A.No.1967/2011

BETWEEN :

1.      SRI PAWANKUMAR DALMIYA
        S/O D.L.DALMIA
        AGED ABOUT 51 YEARS
        BUSINESSMAN, R/AT No.11
        2ND FLOOR, KRISHNA TOWER
        3RD MAIN, GANDHINAGAR
        BANGALORE-560001.

2.      SRI AKBAR BASHA
        S/O K.ABDUL JABBAR SAHEB
        AGED ABOUT 41 YEARS
        BUSINESSMAN, R/AT No.244
        100 FT. ROAD, ELIYAS NAGAR CIRCLE
        J.P.NAGAR BANGALORE-560010.          ...APPELLANTS

     (BY SRI P.M.SIDDAMALLAPPA, ADV. FOR M/S. MYLARAIAHA
                         ASSOCIATES.)

AND :

1.      SRI BILIGOWDA
        S/O LATE SIDDEGOWDA
        AGED ABOUT 67 YEARS

2.      SRI MARIYAPPA
        S/O LATE SIDDEGOWDA
                        -2-

      AGED ABOUT 67 YEARS

3.    SRI SIDDEGOWDA
      S/O LATE SIDDEGOWDA
      AGED ABOUT 57 YEARS

4.    SRI.H.B.PUTTASWAMY
      S/O BILIGOWDA
      AGED ABOUT 25 YEARS

5.    SRI BYRA
      S/O MARIGOWDA
      AGED ABOUT 30 YEARS

6.    SRI AMBARISHA
      S/O MARIGOWDA
      AGED ABOUT 24 YEARS

7.    SRI GIRISHA
      S/O SIDDEGOWDA
      AGED ABOUT 21 YEARS

ALL ARE R/AT
HOTTEGOWDANA DODDI VILLAGE
ATHAGUR HOBLI, MADDUR TALUK
MANDYA DISTRICT-571428.                  ...RESPONDENTS

              (BY SRI K.V.NARASIMHAN, ADV.)

      THIS R.F.A. IS FILED UNDER ORDER 96 READ WITH
ORDER 41 RULE 1 OF CPC, AGAINST THE JUDGMENT AND
DECREE DATED 27.08.2011 PASSED IN O.S.No.6/2009 ON THE
FILE OF THE CIVIL JUDGE [SR.DN] MADDUR, DISMISSING THE
SUIT FOR RECOVERY OF MONEY.

      THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
10.12.2020,   COMING   ON    FOR   PRONOUNCEMENT   OF
JUDGMENT, THIS DAY, S. SUJATHA, J., DELIVERED THE
FOLLOWING:
                          -3-


                    JUDGMENT

This appeal is directed against the judgment and

decree dated 27.08.2011 passed in O.S.No.6/2009 on

the file of Civil Judge (Sr.Dn.), Maddur ('Trial Court' for

short).

2. For the sake of convenience, the parties are

referred to as per their status before the Trial Court.

3. The plaintiffs filed suit against the

defendants for recovery of Rs.17,40,700/- together with

court costs and current interest by way of damages at

the rate of 2% per month from the date of suit till the

actual date of realisation and also prayed for creation of

1st charge on suit item Nos.4 and 5 for recovery of suit

claim.

4. Description of the suit properties are as

under:

SCHEDULE

All the landed properties situated in Hottegowdanadoddi village, Athangur Hobli, Maddur Taluk, bearing

1) Sy.No.5/1A measuring 0.22 gts.

      2)     Sy.No.5/1B measuring 0.36 gts.
      3)     Sy.No.5/2 measuring 0.29 gts.
      4)     Sy.No.5/3 measuring 0.29 gts.
      5)     Sy.No.5/4 measuring 0.29 gts.

All the properties having common boundaries bounded on the East by Property of Plaintiffs, West by Property of Plaintiffs, North by: Property of Pavanikumar Dahnia and property of Ramalingaiah, South by Property of plaintiffs.

5. The plaint averments in brief are that:

The defendants are family members and they had

represented to the plaintiffs that they are the absolute

owners and in possession of suit properties. The

plaintiffs being the neighbouring land holders have

agreed to purchase the suit schedule properties. The

defendants had assured the plaintiffs that the title

deeds and other relevant documents would be furnished

for verification before drafting the sale deeds for

verification. Believing the said assurance and on the

basis of the RTC entries, plaintiffs came forward to

purchase the suit properties for valuable consideration

of Rs.85,55,000/- pursuant to which registered

agreement of sale dated 31.7.2008 was executed by the

defendants after receiving the advance amount of

Rs.15,00,000/- out of sale consideration by agreeing to

execute the registered sale deed within 110 days from

the date of the sale agreement. The defendants had

further agreed to receive the balance sale consideration

before the Sub-Registrar at the time of registration of

sale deed.

6. The plaintiffs contended that after execution

of the sale agreement, plaintiffs insisted for survey

sketch and other documents from the defendants but

the same was dodged. The plaintiffs themselves

obtained the certified copy of the sale deeds and came to

know that the 1st defendant Biligowda had the sale deed

in respect of Sy.No.5/4 and 2nd defendant Mariyappa

had the sale deed with respect to Sy.No.5/3 and for rest

of the properties, no sale deed was found. The plaintiffs

having noticed, the defendants had no title deeds or

documents except the RTC, got confirmed that the

defendants have no saleable interest relating to the suit

schedule properties. Hence, the plaintiffs rescinded the

contract and got issued notice to the defendants on

12.2.2009 intimating the same and demanding to repay

the earnest money deposit with interest.

7. The defendants had issued reply notice

asserting their saleable interest and stated that they are

ready to execute the sale deed.

8. The plaintiffs averred that the defendants

are pretending as absolute owners of the suit schedule

properties without the valuable title deeds. Even at the

time of filing of the suit, they had no saleable interest.

Hence, they were constrained to file the suit seeking for

the reliefs sought in the plaint.

9. On issuance of summons, defendant Nos.1

and 4 appeared through their counsel and filed their

common written statement admitting the execution of

the agreement of sale and receipt of earnest money

deposit of Rs.15,00,000/-. The defendants asserted that

they are the absolute owners and in possession of the

suit schedule properties. All the concerned documents

are standing in their names. The plaintiffs being the

neighbouring land owners and having knowledge of

ownership of the defendants and after verifying the

mutation register extracts and RTC extracts, had agreed

to purchase the suit schedule properties. The plaintiffs

failed to make the payment of Rs.70,55,000/- towards

balance sale consideration despite receiving original

survey sketch from the defendants.

10. It was further contended that the defendants

were ready to execute the absolute sale deed in favour of

the plaintiffs after receiving the balance sale

consideration as contemplated under the registered sale

agreement.

11. On the basis of the pleadings, following

issues were framed:

1) Whether the plaintiffs prove that the defendants are not the owners of all the suit schedule properties, accordingly having no right, title or interest over the same?

2) Whether the plaintiffs further prove that defendants cheated them by their acts and deed and entered into sale agreement dated 31/7/2008 with them?

3) Whether the plaintiffs are entitled for recovery of Rs.17,40,700/ together with 2% interest per month?

4) What order or decree?

ADDITIONAL ISSUES

1) Whether the Court fee paid is insufficient?

12. On behalf of the plaintiffs, plaintiff No.2 was

examined as PW-1 and 18 documents were marked. 3rd

defendant got examined as DW-1 besides two witnesses

DW-2 and DW-3 on behalf of the defendants. 11

documents were marked as Exs.D1 to D11.

13. On appreciation of oral and documentary

evidence, the Trial Court answered all the issues in the

negative and dismissed the suit with costs.

14. Aggrieved by the said judgment and decree,

the plaintiffs have preferred the present appeal.

15. Learned counsel for the plaintiffs argued

that the Trial Court grossly erred in dismissing the suit

of the plaintiffs ignoring the material evidence on

record. The Trial Court erred in holding that the

dispute raised by Smt.Sannamma and

- 10 -

Smt.Marihombamma against the 1st defendant

questioning the revenue entries in respect of the suit

items 1 and 2 of the suit schedule properties could not

be construed as litigation to declare that the defendants

have no marketable title over the suit schedule

properties.

16. The Trial Court failed to ascertain about the

quantum of damages in the event of default on the part

of the plaintiffs and defendants in performing their part

of contract as agreed under registered agreement of

sale dated 31.7.2008. When the agreement is silent on

this aspect, the defendants are required to refund the

money with interest and they cannot forfeit the earnest

money deposit for the default on their part in

misrepresenting the plaintiffs regarding their

marketable title over the suit schedule properties.

17. Learned counsel for the defendants argued

that the Trial Court has analysed the evidence

- 11 -

profusely to arrive at a conclusion that the plaintiffs

themselves rescinded from the contract and refused to

get the sale deed executed as per the agreement dated

31.7.2008 and therefore no interference is warranted

by this court.

18. It was argued that the original survey sketch

obtained on 12.11.2018 was given to the plaintiffs and

the same is fortified by the evidence of PW-1 where he

has clearly admitted that the survey sketch marked as

Ex.D1 might have been given to the plaintiffs. It was

submitted that the so called litigation said to have been

initiated by Smt.Sannamma and Smt.Marihombamma

are set up by the plaintiffs. The said litigation has ended

in favour of the defendant No.1 before the Asst.

Commissioner, Mandya Division, Mandya, in case

No.R.Mis.No.176/2010-11 and R.Mis.No.2178/ 2010-11

dated 2.1.2012 and 27.2.2012 respectively.

O.S.No.21/2017 instituted by Smt.Sannamma against

- 12 -

defendant No.1 Biligowda before the learned Senior

Civil Judge & JMFC, Maddur, has been dismissed on

24.9.2019. Hence, the cloud created in the title of the

defendants with respect to the suit properties is not well

founded.

19. Learned counsel argued that the defendants had

valid title deeds, the plaintiffs have obtained certified

copy of the sale deeds and were fully aware of the

marketable title of the property with the defendants. It

is for the first time the plaintiffs have come with a new

plea that the mortgage entered by the defendants has

not been redeemed. Neither in the notice nor in the plea

such ground was taken. There being no escalation in

price of the properties, the plaintiffs have stepped back

from performing their part of the contract. The plaintiffs

being the defaulters, no recovery of the earnest money,

much less the interest on the earnest money, could be

claimed by them. Learned counsel submitted that the

- 13 -

defendants were ready and willing to pay the earnest

money deposit of Rs.15,00,000/- to the plaintiffs but

the plaintiffs having insisted for the interest, the

settlement has not fructified. The defendants being

poor farmers, they cannot be mulcted with the payment

of interest on the earnest money deposit.

20. We have carefully considered the rival

submissions of the learned counsel appearing for the

parties and perused the original records.

21. The point that arises for our consideration

is:

Whether the plaintiffs are entitled to the refund of the earnest money of Rs.15,00,000/- with interest, as claimed by them?

22. The execution of the registered agreement of

sale dated 31.7.2008 by the defendants to sell the suit

properties for the sale consideration of Rs.85,55,000/-

- 14 -

and the receipt of the advance amount of

Rs.15,00,000/- towards the part sale consideration by

the defendants are not in dispute. Ex.P1 is the

registered agreement of sale dated 31.7.2008 executed

by the defendants in favour of the plaintiffs. The recitals

in the said agreement would indicate that the balance

amount of Rs.70,55,000/- has to be paid within the

period of 110 days at the time of the registration of the

absolute sale deed before the Sub-Registrar, Maddur,

failing which, the plaintiffs are entitled to initiate legal

action for the registration of the absolute sale deed. It

was assured that the suit properties are free from

encumbrance. In the event any dispute arises, the same

would be resolved by them. It was further agreed that

at the time of the registration of the absolute sale deed,

all the daughters' signatures would be procured by the

defendants and the sale deed would be registered in the

name of the plaintiffs or their nominees. Defendants

keeping the survey sketch ready for registration was a

- 15 -

condition precedent and the sale consideration would

depend upon the measurements found in the survey

sketch.

23. The certified copy of the sale deed dated

29.5.1972 executed by Lingaiah and Appaji in favour of

Biligowda in respect of Sy.No.5/4 for the sale

consideration of Rs.1500/-. Ex.P2 would disclose that

the vendors have received Rs.1100/- with a condition

that Rs.400/- towards the mortgage amount of the said

property has to be paid by the purchaser and the

mortgage has to be redeemed but the defendants have

not placed any convincing evidence to establish such

redemption of mortgage.

24. Ex.P3 is the certified copy of the sale deed

dated 21.6.1987 executed by Mariappa, S/o Dasegowda

in favour of Mariappa, S/o Mota Siddegowda in respect

of Sy.No.5/3 measuring 29 guntas for the sale

consideration of Rs.4,000/-. It is the contention of the

- 16 -

plaintiff that except this sale deed, no other deeds were

found for acquiring the suit properties by the

defendants, M.R. Extract would show that with the

consent of the others only Khatha has been made out in

the name of the defendant No.1.

25. Ex.P13 is the notice dated 12.2.2009 issued

by the learned counsel for the plaintiffs informing the

defendants that the agreement of sale dated 31.7.2008

has been rescinded by the plaintiffs since the

defendants are not the absolute owners of the suit

schedule properties and received the earnest money of

Rs.15,00,000/- falsely representing themselves as the

owners. Demand was made for the refund of

Rs.15,00,000/- with interest @ 24% p.a. from the date

of sale agreement till the repayment to the plaintiffs.

Ex.P14 is the reply notice issued by the defendants

denying the allegations that they were not the absolute

- 17 -

owners in possession and enjoyment of the suit

schedule properties as alleged in the notice at Ex.P13.

26. I.A.1/2020 has been filed by the defendants

under Order 41 Rule 27 r/w Section 151 CPC to

produce the following documents as additional

evidence.

     1.     Certified       copy    of      the   order    dated
     27/2/2012          passed         by     the     Assistant
     Commissioner           Mandya       Sub        Division   in
     proceedings No.R.Mis 178/10-11.


     2.     Copy of the order dated 2/1/2012
     passed       by    the     Assistant         Commissioner

Mandya Sub Division in proceedings No.R.Mis 176/10-11.

3. Copy of the judgment and decree dated 24/9/2019 in O.S 21/2017 passed by learned Senior Civil Judge, Maddur.

The same being taken on record allowing the I.A., we

have examined the said documents also.

- 18 -

27. These documents are placed on record only

to substantiate the stance of the defendants that the

litigations said to have been initiated by

Smt.Sannamma and Smt.Marihombamma are

concluded in favour of the defendants.

27. Ex.D1 is the photocopy of the survey sketch,

the copy of which has been obtained from the Survey

Department, Maddur on 12.11.2008 but the same does

not disclose the exact date on which the said sketch

was prepared. Moreover, it is not in the Format 11-E as

contended by the learned counsel appearing for the

plaintiff.

28. Ex.D2-RTC extract shows the name of the

defendant No.1 Biligowda in column Nos.9 and 12

during the year 2008-09. Exs.D4, D6, D8 and D9 are

the original sale deeds relating to Sy.Nos.3/4, 21/5,

5/4, 5/3. Ex.D11 is the mutation entry wherein the

- 19 -

source is reflected as order of D.C. in CSR No.l69/03-

04 dated 19.10.2007.

29. Indisputedly, these documents relate to the

post agreement period. The dispute before the Asst.

Commissioner, in R.Mis.No.2178/2010-11 in the case of

Smt.Marihombamma Vs. Biligowda was dismissed vide

order dated 27.2.2012. R.Mis.No.176/2010-11 in the

case of Smt.Sannamma Vs. Biligowda and another

before the Asst. Commissioner, Mandya was dismissed

on 2.1.2012. O.S.No.21/2017 filed by Smt.Sannamma

and others against Biligowda has been dismissed on

24.9.2019 on the file of the Senior Civil Judge, Maddur,

holding that the plaintiffs have failed to prove their title

over the suit schedule property therein-Sy.No.9 [Old

Sy.Nos.5/1A and 5/1B) measuring 1 acre 28 guntas

situated at Danayakanadoddi Village, Athaguru Hobli,

Maddur Taluk and they have also failed to prove their

possession over the same as on the date of the suit.

- 20 -

These documents would certainly indicate that some

disputes were pending regarding the suit properties at

the time of execution of the agreement of sale [Ex.P1].

What is relevant to consider in a suit for specific

performance of contract is the conduct of the parties at

the time of entering into the agreement. The plaintiff

has rescinded from the contract considering the fact

that no title deeds were made available to the plaintiff

and on obtaining the certified copies, Ex.D3 alone was

found to be free from encumbrance. Hence, the

subsequent decisions of the jurisdictional

Court/Authority would not fill up the lacuna found at

the time of entering into the agreement by the parties.

     30.   It   is   admitted     by   DW1   in    his   cross

examination that one Sri. Puttabasavegowda            and his

brothers have initiated proceedings before the A.C. for

the khatha entered in the name of the defendants. It is

also categorically admitted that both the vendors and

- 21 -

vendee are required to sign to the survey sketch; no

such survey sketch was prepared as required for the

registration of the sale deed before the Sub-Registrar.

DW-2 has stated that agreement of sale was executed

on the basis of the RTC records. There is lot of

inconsistencies found in the testimony of DW-2 as

regards the survey sketch is concerned. DW-3 has

stated that the defendants had agreed to furnish the

survey sketch within the time prescribed in the

agreement of sale. He has pleaded ignorance about the

suit schedule properties. The Trial Court committed an

error in ignoring this clinching evidence which indeed

supports the case of the plaintiffs that survey sketch

was not obtained by the defendants in the prescribed

format. Though there is a recital in Ex.P1 that the

defendants are required to furnish all necessary

documents pertaining to suit schedule properties well

within the period of 110 days time fixed, the Trial Court

holds that there is no reference about the title deeds

- 22 -

and the documents mentioned in the agreement of sale

cannot be construed as the title deeds, in our opinion,

the said finding is palpably erroneous. As far as the

original title deeds produced at Exs.D4, D6, D8 and

D10, the witness DW-1 has stated that Sy.No.5/1B was

wrongly typed as Sy.No.3/4 and Sy.No.5/2 was wrongly

typed as 21/5. The Trial Court though observing all

these inconsistencies, has formed an opinion that no

blame can be put on the defendants as the plaintiffs

being developers had entered into an agreement with

the defendants admittedly looking into the revenue

records like RTC and Mutation Register. Thus, held that

the allegation of fraud and cheating being not

established, question of refunding the earnest money

does not arise. We find it hard to concur with this

decision in view of the failure on the part of the

defendants in performing their part of the contract in as

much as making available the documents specified in

the agreement of sale within the prescribed period.

- 23 -

31. It is apt to refer to the case of M.Rathnam

S/o late Maya & others Vs. Smt.Susheelamma

reported in 2008(5) KCCR 3455, wherein, this court

while dealing with the refund of earnest money deposit

in the absence of consensual ad-idem contract, where

the parties entered into such a contract on mutual

mistake, held that the party who had paid advance

amount is entitled to the refund of amount with interest

@ 6% p.a. from the date of agreement till the date of

repayment.

32. Thus, in the absence of any forfeiture clause

in the agreement of sale, forfeiting the earnest money

deposit by the defendants is not justifiable. There is

good reason for the purchasers - appellants to rescind

from the agreement of sale. Hence, the dismissal of the

suit by the Trial Court certainly calls for interference by

this court.

- 24 -

33. Even in the appeal proceedings, though

negotiations were held between the parties for

settlement, the same has not been fructified due to

some minute difference regarding the rate of interest.

34. Considering the totality of circumstances of

the case, we deem it appropriate to direct the

defendants to refund Rs.15,00,000/- to the plaintiffs

with interest @ 3% p.a. from the date of filing of the suit

till its realization keeping in mind the status of the

plaintiffs and defendants as developers and farmers

respectively. It is made clear that the decretal amount

shall be paid by the defendants to the plaintiffs within

a period of ninety days from the date of the receipt of

the certified copy of the judgment and order failing

which a charge shall be created on item Nos.4 and 5 of

the suit schedule properties for recovery of decretal

amount.

- 25 -

Hence, the following:

ORDER

1. The appeal is allowed.

2. The impugned judgment and decree dated 27.8.2011 passed in O.S.No.6/2009 on the file of the Civil Judge (Sr.Dn.), Maddur, is set aside.

3. The defendants are directed to refund Rs.15,00,000/- to the plaintiffs with interest at 3% p.a. from the date of filing of the suit till its realisation within a period of six weeks from the date of receipt of the certified copy of the judgment and order failing which a

of the suit schedule properties for recovery of decretal amount.

4. Draw modified decree accordingly.

5. No order as to costs.

Sd/-

JUDGE

Sd/-

JUDGE Dvr: