Karnataka High Court

Shakeeruddin S/O Mohd. ... vs Eknath Patil S/O Venkatrao Patil on 27 September, 2021

Author: Ashok S. Kinagi

            IN THE HIGH COURT OF KARNATAKA
                   KALABURAGI BENCH

      DATED THIS THE 27TH DAY OF SEPTEMBER 2021

                               BEFORE

       THE HON'BLE MR. JUSTICE ASHOK S. KINAGI

                R. S. A. NO.200068 OF 2017

BETWEEN:

SHAKEERUDDIN
S/O MOHD. ZAHEERUDDIN
AGE: 43 YEARS, OCC:BUSINESS & AGRICULTURE,
R/O:H.NO..4-2-10, OPP: MUMTAZ FUNCTION HALL,
NOOR KHAN TALIM, AT PROPER BIDAR.
                                               ...APPELLANT

(BY SRI. AMEET KUMAR DESHPANDE, ADV.)

AND

EKNATH PATIL
S/O VENKATRAO PATIL
AGE: 37 YEARS, OCC: AGRICULTURE,
R/O: KANDGUL, TQ: AURAD,
DIST: BIDAR-585401.
                                             ...RESPONDENT

(BY SRI. RAVI B PATIL, ADV.)


     THIS RSA IS FILED U/S 100 R/W ORDER 42 RULE 1 OF
CPC, AGAINST THE JUDGEMENT AND DECREE DATED
09.12.2016, PASSED IN R.A.NO.7/2014 ON THE FILE OF THE
ADDL. SENIOR CIVIL JUDGE AND CJM AT BIDAR, PARTLY
ALLOWING THE APPEAL AND MODIFYING THE JUDGEMENT AND
                                2



DECREE DATED 30.11.2013, PASSED IN O.S.NO.206/2009 ON
THE FILE OF THE PRL. CIVIL JUDGE (J.D) AT BIDAR.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 20.09.2021, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT DELIVERED THE FOLLOWING:

                           JUDGMENT

This appeal is filed by the defendant challenging the

judgment and decree dated 09.12.2016, passed in

R.A.No.7/2014, confirming the judgment and decree dated

30.11.2013, passed in O.S.No.206/2009.

2. For the sake of convenience, parties are referred to

as per their ranking before the Trial Court. Appellant is the

defendant and respondent is the plaintiff before the Trial

Court.

3. Facts giving rise to the filing of the appeal briefly

stated are as under:

The case of the plaintiff is that the defendant is the

absolute owner and possessor of land bearing Sy.No.54/1,

totally measuring 23 acres 32 guntas including the suit land

measuring 1 acre 5 guntas situated at Village Malkapur,

Taluka & Dist. Bidar. The name of the defendant is

appearing in the Record of Right of suit land as the exclusive

owner and possessor of the same. The defendant has

purchased the said land from previous owner under the

registered sale deed dated 23.12.2000, and became the

exclusive owner and possessor of the same. The defendant

due to his family and shariya necessities and to pay off the

debts, agreed to sell the suit land in Sy.No.54/1 to the

extent of 1 acre 5 guntas. Accordingly he approached the

plaintiff. The plaintiff agreed to purchase the suit land and

accordingly plaintiff and defendants have mutually settled

the valuation of the suit land at Rs.80,000/- and the same

was agreed by both of them in the presence of the

witnesses. The defendant executed a registered agreement

of sale dated 18.09.2008, for the sale of suit land in favour

of the plaintiff. While executing the registered agreement of

sale, the defendant received part consideration amount of

Rs.70,000/- out of total consideration of Rs.80,000/-. It was

agreed that the balance amount of Rs.10,000/- to be

payable at the time of execution of final registered sale deed

of suit land and it was agreed that the defendant would

execute a registered sale deed within a period of one year

from the date of execution of agreement of sale by receiving

balance consideration amount. As per the terms and

conditions of the agreement of sale dated 18.09.2008, the

plaintiff has arranged the balance consideration amount of

Rs.10,000/- and requested the defendant to execute

registered sale deed in favour of plaintiff by receiving the

balance consideration amount of Rs.10,000/-. The plaintiff

was ready and willing to get executed the registered sale

deed of the suit land and ready to pay the registration

charges and stamp duty, but the defendant went on

prolonging the matter. The plaintiff was and is ready to

perform his part of contract and ready to pay the balance

consideration, but the defendant is not ready to perform his

part of contract. The plaintiff got issued a legal notice on

11.09.2009, by registered post. The registered envelop

returned with an endorsement as 'insufficient address and

for want of house number', on 12.09.2009. After receiving

the registered envelop by the plaintiff's counsel, the plaintiff

got issued another notice on 19.09.2009 with correct house

number. Again the advocate of the plaintiff received the

postal envelop with an endorsement that 'addressee left

without instruction'. The defendant is purposely avoiding to

execute the registered sale deed of suit land in favour of

plaintiff. Hence the plaintiff is constrained to file a suit for

specific performance of contract.

3.1. Defendant filed written statement contending that

the defendant is not alone the owner of land in Sy.No.54/1

to an extent of 1 acre 5 guntas. His brothers are also joint

owners. The defendant had purchased the said property

through the funds arranged by the brothers of defendant

and their family members who have got equal share in the

suit land and the sale deed is nominally purchased in the

name of defendant under registered sale deed dated

23.12.2000. It is contended that defendant No.1 is in need

of money for running poultry business in the suit land and

approached the plaintiff for providing a hand loan to the tune

of Rs.70,000/- and the plaintiff asked security for repayment

and accordingly an agreement of sale is executed by the

defendant in favour of plaintiff for the sake of security. The

said agreement of sale is not an agreement of sale, but it is

a security for the repayment of hand loan. It is contended

that as per the terms of agreement between the plaintiff and

defendant, the defendant before completion of one year

period, has approached the plaintiff and requested the

plaintiff to take back the hand loan which is received by the

defendant from the plaintiff and also to execute cancellation

of agreement of sale as agreed by the plaintiff while

providing loan to the defendant. The plaintiff, at first

instance, avoided to receive the said amount from the

defendant and subsequently filed the present suit by

creating a wrong record of issuing notice to the defendant.

It is contended that as on the date of agreement of sale, the

valuation of the land is Rs.15 lakhs per acre as per the

prevailing market value and the said land is within the

municipal limits of Bidar City and used for house site

purpose and not for agricultural land. It is further contended

that the house of the defendant is situated in the said land

and defendant is conducting poultry business in the said land

by erecting shed in the said land. It is further contended

that the defendant even today is ready to pay the loan

amount and the defendant never agreed for alienation of the

same. Hence prayed to dismiss the suit.

3.2. The Trial Court, on the basis of pleadings of

parties, framed the following issues:

1. Whether the plaintiff proves that, the defendant executed the agreement of sale bearing document No.3479/2000-01 dated 23.12.2000 agreeing to sell suit land to plaintiff for Rs.80,000? (ought to be douc.No.3354/08-09 dated 18.09.2008)

2. Whether the plaintiff further proves that, he paid Rs.70,000/- on date of agreement as part consideration?

3. Whether plaintiff further proves that, he is always ready and willing to perform his part of contract?

4. Whether defendant proves that, said agreement was executed by him as a security to loan transaction between himself and plaintiff?

5. Whether plaintiff is entitled for relief of specific performance of contract?

6. What order or decree?

3.3. Plaintiff in order to prove his case, examined

himself as PW-1 and examined one witness as PW-2 and got

marked Ex.P1 to P11. On the other hand, defendant was

examined as DW-1 and got marked Ex.D1. The Trial Court,

after recording evidence and considering the material on

record, held that the plaintiff has proved that the defendant

executed agreement of sale bearing document

No.3354/2008-2009 dated 18.09.2008 agreeing to sell the

land to the plaintiff for Rs.80,000/- and further held that the

plaintiff has proved that he has paid Rs.70,000/- on the date

of agreement as part consideration and further held that the

plaintiff has proved that he was always ready and willing to

perform his part of contract. The Trial Court further held

that the defendant has failed to prove that the agreement

was executed by him as a security to the loan transaction

between himself and the plaintiff and further held that the

plaintiff is entitled for the relief of specific performance of

contract and consequently decreed the suit of the plaintiff

and directed the defendant to execute a registered sale deed

and further directed the plaintiff to deposit the balance

consideration of Rs.10,000/- within 3 months from the date

of judgment.

3.4. The defendant aggrieved by the judgment and

decree passed by the Trial Court, filed an appeal in

R.A.No.7/2014. The First Appellate Court framed the

following points for consideration:

1. Whether the defendant proves the true nature of agreement of sale dated 18.09.2008 is security deed for the loan of Rs.70,000/- availed by him from respondent?

2. Whether the escalation of price is hardship to the defendant to avoid the execution of sale deed?

3. Whether the judgment passed by the Trial Court needs interference?

4. What order or decree?

3.5. The First Appellate Court, after re-appreciation of

the evidence on record, held point Nos.1 and 2 in negative

and point No.3 partly in affirmative and consequently

modified the judgment and decree passed by the Trial Court

and held that the value of the suit schedule property is

Rs.3,54,375/- and directed the plaintiff to pay the balance

amount of Rs.2,84,375/- to the plaintiff. Hence, the

defendant aggrieved by the judgment and decree passed by

the First Appellate Court, has filed the instant appeal.

4. Heard learned counsel for the defendant and

learned counsel for the plaintiff.

5. Learned counsel for the defendant submits that the

transaction is a loan transaction, but not a sale transaction.

He further submits that the market value of the suit land

was Rs.26,50,000/- as on the date of execution of

agreement of sale and in support of his contention he

submits that the defendant has produced valuation report

issued by the licenced valuer as per Ex.D1. He further

submits that the Courts below have not considered the

concept of hardship and undue advantage in a proper spirit.

The intention of the defendant was not to alienate the

property, but the agreement of sale was executed only for

the purpose of security of the loan obtained by the

defendant from the plaintiff. He further submits that the

Courts below have not judicially exercised the discretion in

granting relief of specific performance. Hence, on these

grounds, he prays to allow the appeal.

6. Per contra, learned counsel for the plaintiff submits

that the plaintiff has agreed to sell the suit land for

consideration of Rs.80000/-. Accordingly the plaintiff paid

Rs.70,000/- towards earnest money and plaintiff was and is

ever ready to perform his part of contract, but the defendant

failed to perform his part of contract. He further submits

that the plaintiff got issued a legal notice calling upon the

defendant to receive the balance consideration amount and

to execute the registered sale deed, but the defendant has

purposely avoided to receive the legal notice. He further

submits that the Courts below have properly exercised the

discretion under Section 20 of the Specific Relief Act and

passed impugned judgment and decree and prays to dismiss

the appeal.

7. This Court has admitted the appeal on the following

substantial question of law:

"Whether the courts below were justified in decreeing the suit for specific performance and exercise of said discretion is based on sound judicial principles indicated in Section 20 of the Specific Relief Act, 1963?"

8. Perused the records and considered the submissions

made by learned counsel for the parties.

9. The case of the plaintiff is that the defendant is the

absolute owner of suit land and the defendant was in need of

money for family and legal necessity and hence approached

the plaintiff and requested to purchase the suit land for

Rs.80,000/-. The plaintiff agreed to purchase the suit land

for consideration of Rs.80,000/-. Accordingly, the plaintiff

paid Rs.70,000/- as on the date of execution of registered

agreement of sale dated 18.09.2008, and agreed to pay the

balance consideration of Rs.10,000/- and the defendant after

receiving the balance consideration amount, agreed to

execute the registered sale deed. The plaintiff in support of

his case, examined himself as PW-1 and he has reiterated

the plaint averments in the examination-in-chief and

produced copy of original registered agreement of sale. The

defendant admitted the signature and also execution of

agreement of sale, but denied that the transaction is a sale

transaction and in fact it was a loan transaction and

agreement of sale was executed for the security towards

loan alleged to have been obtained by him. The recital of

Ex.P1 clearly shows that it is purely an agreement of sale in

respect of suit property and further the plaintiff, in order to

prove the execution of agreement of sale, examined the

attesting witness as PW-2 who has deposed that the

defendant has executed an agreement of sale by receiving

earnest money of Rs.70,000/- and agreed to execute a sale

deed within one year from the date of execution of

agreement of sale. He has deposed that sale talks took

place in his presence in the house of the plaintiff. In view of

the admission of defendant and also evidence of PW-1 and

PW-2, the plaintiff has proved the execution of registered

agreement of sale dated 18.09.2008. The plaintiff in order

to establish that he was ready and willing to perform his part

of contract, the plaintiff got issued a legal notice as per

Ex.P5 on 11.09.2019, showing the address of the defendant

as Shakeeruddin, S/o Md. Zaheeruddin, R/o Opp. Mumtaz

Function Hall, Noor Khan Taleem, Proper Bidar. The said

postal cover was returned with an endorsement 'insufficient

address, want of house number' and returned to the sender.

After the receipt of postal cover, the plaintiff once again

issued legal notice dated 19.09.2009, as per Ex.P6 showing

the address as Shakeeruddin, S/o Md. Zairuddin, R/o House

No.4-2-10, Opp. Mumtaz Function Hall, Noor Khan Taleem,

Proper Bidar. The said postal cover was returned with an

endorsement 'addressee left without instruction' and

returned to the sender. The plaintiff in the cause-title has

shown the same address as shown in Ex.P10, wherein the

summons has been served on the defendant on the very

same address. From the perusal of the records, the

defendant has avoided to receive the legal notice sent by the

plaintiff. From the perusal of Ex.P5 and P6, it is amply clear

that the plaintiff was ready and willing to perform his part of

contract. On the contrary, defendant was not ready to

perform his part of contract. The Courts below after

examining the records were justified in recording a finding

that the defendant has executed an agreement of sale and

not a loan transaction.

10. It is the case of the defendant that as on the date

of execution of agreement of sale, the value of the suit

property was more than Rs.25 lakhs. In order to

substantiate the defence, the defendant has produced a

valuation certificate issued by a private engineer, as per

Ex.D1. In order to prove the contents of Ex.D1, the

defendant has not examined the author of the document and

further the defendant has not produced the valuation report

of the Sub-Registrar. Except oral evidence of DW-1, the

defendant has not produced any records to show that as on

the date of execution of agreement of sale, the value of the

suit property was more than Rs.26,50,000/-. The only

grievance of the defendant is that the market value of the

suit land is more than Rs.25 lakhs as on the date of

agreement of sale. That in order to exercise the discretion

to decreeing the specific performance, Section 20 provides

discretion as to decreeing the suit for specific performance,

which reads as under::

"20. Discretion as to decreeing specific performance - (1) 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.

(2) The following are cases in which the Court may properly exercise discretion not to decree specific performance:-

(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or

(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;

  or


  (c) where the defendant entered into the
  contract     under         circumstances        which
  though      not     rendering          the    contract

voidable, makes it inequitable to enforce specific performance.

Explanation 1.- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause(a) or hardship within the meaning of clause(b).

Explanation 2.- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause(b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract."

Explanation (1) of Section 20, provides that mere

inadequacy of consideration shall not be deemed to

constitute an unfair advantage within the meaning of Clause

(a) or hardship within the meaning of Clause (b) of Sub-

section (2) of Section 20.

11. The First Appellate Court, by exercising discretion

under Section 20 of the Specific Relief Act, has held that the

market value of one acre of land in Malkapur is

Rs.3,15,000/- as per Kaveri Website of Department of

Registration and the suit property is measuring 1 acre 5

guntas and valued the suit property at Rs.3,54,375/- and

ordered the plaintiff to pay the balance amount of