Satgouda S/O Basgouda Patil vs Mukund Reddi S/O Krishna Reddi ...
2022 Latest Caselaw 2624 Kant

          IN THE HIGH COURT OF KARNATAKA
                  DHARWAD BENCH

      DATED THIS THE 17TH DAY OF FEBRUARY, 2022

                        BEFORE

 THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

              R.S.A.NO.100231/2021 (SP)

BETWEEN

SHRI SATGOUDA
S/O BASGOUDA PATIL,
AGE : 71 YEARS, OCC : AGRICULTURE,
R/O : NAGARAL (NEAR RAILWAY STATION),
TALUK: RAIBAG, DIST: BELAGAVI.
                                          ... APPELLANT
(BY SRI SHIVARAJ P.MUDHOL ADVOCATE)

AND

MUKUND REDDI
S/O KRISHNA REDDI BHANDI,
AGE : 68 YEARS, OCC: RETIRED,
R/O 105, 5TH CROSS, SHAHU NAGAR,
BELAGAVI, TALUK: BELAGAVI,
DIST: BELAGAVI-590010.
                                        .... RESPONDENT
(BY   SHRI MALLIKARJUNSWAMY B.HIREMATH,
      SHRI MANJUNATH B.KARIGANNAVAR, ADV.)

      THIS RSA IS FILED UNDER SECTION 100 OF THE CODE
OF CIVIL PROCEDURE, 1908 PRAYING THIS COURT TO SET
ASIDE THE JUDGEMENT & DECREE DATED 07.10.2020 IN
R.A.NO.57/2017 PASSED BY THE VII ADDITIONAL DISTRICT
JUDGE, BELAGAVI SITTING AT CHIKKODI AND CONFIRMED THE
JUDGMENT AND DECREE PASSED IN O.S.NO.229/2015 DATED
04.01.2017 PASSED BY THE SENIOR CIVIL JUDGE AND JMFC
COURT, RAIBAG BY ALLOWING THIS APPEAL IN THE INTEREST
OF JUSTICE AND EQUITY.

     THIS APPEAL COMING ON FOR ADMISSION THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
                                      2




                           : JUDGMENT :

The cap tioned second app eal is filed by the

defend ant q uestioning the judgment and decree of

the First Appellate Court passed in

R.A.No.57/2017, wherein suit filed by respond ent-

plaintiff seeking relief of sp ecific p erformance

contract is decreed by allowing the appeal.

2. The facts leading to the above said case

are as und er:

The respond ent-plaintiff filed a suit for

specific p erformance of contract in

O.S.No.229/2015. The respondent-plaintiff claimed

that the suit property is a vacant site b earing

VPC.No.1028. The respondent-plaintiff claim that

he was serving in Food Corporation of India and

used to visit Raib agh Sug ar factory and during

these visits, he came in contact with app ellant-

defend ant and got acquainted. It is further

plead ed in the month of November, 2012 the

app ellant-defendant was in financial distress and

therefore exp ressed to sell the suit property in

favour of respondent-plaintiff. It is further stated

that the respondent-plaintiff offered to p urchas e

the same for consideration of Rs.6,00,000/-. In

terms of negotiations, sale consid eration was fixed

at Rs.6,00,000/- and the ap pellant-defend ant

executed an ag reement to sell on 15.11.2012 and

received earnest money of Rs.5,10,000/-. It was

ag reed by the parties that the sale deed would be

executed on or before 15.11.2013 by paying

balance sale consideration of Rs.90,000/-. The

respondent-plaintiff claim that though he

repeated ly requested the app ellant-defendant to

execute the sale deed by receiving balance sale

consideration of Rs.90,000/-, ap pellant-defend ant

went on postponing and this compelled

respondent-plaintiff to issue a leg al notice on

31.08.2015. The respondent-plaintiff claims that

though notice was served on ap pellant-defend ant,

he did not come forward to perform his part of

contract by executing sale d eed and hence the

present suit is filed.

3. On receipt of summons, the appellant-

defend ant appeared and filed written statement

and stoutly denied the entire averments mad e in

the p laint. The appellant-defend ant contended that

the respondent-plaintiff is the husb and of one

Smt.Jayashree who was working as a manag er in

the Syndicate Bank, Raib ag Branch. The appellant-

defend ant claims that he has received hand loan

from the wife of respond ent-plaintiff and the

present suit ag reement came to be executed

towards security. The appellant-defend ant further

specifically p leaded that he has repaid the

amount. After repayment of the amount, he

requested the respondent-plaintiff for cancellation

of suit agreement. The appellant-d efendant has

plead ed that it is wife of respondent-plaintiff

herein who went on postponing . It is also stated in

the written statement that the ap pellant-defend ant

did communicate respondent-plaintiff's wife and

she assured that the suit ag reement would be

cancelled. On these set of defences, the app ellant-

defend ant sought for dismissal of the suit.

4. The Trial Court having assessed the oral

and documentary evidence, answered Issue No.1

partly in the affirmative by holding that the due

execution of suit ag reement is proved. But

however, the Trial Court has come to the

conclusion that it was offered as security toward s

hand loan of Rs.5,10,000/-. While dealing with

issue No.2, the Trial Court has come to conclusion

that the respondent-plaintiff has failed to prove

that he was ever ready and willing to perform his

part of contract. While dealing with Issue No.4,

the Trial Court has come to conclusion that the

app ellant-defendant has failed to prove that he

had rep aid the loan amount to the wife of

respondent-plaintiff.

5. Feeling aggrieved by the judgment and

decree of the Trial Court, the respondent-plaintiff

preferred app eal in R.A.No.57/2017. The Appellate

Court on re-app reciation of ocular and

documentary evidence has however reversed the

finding of the Trial Court on read iness and

willingness.

6. The Appellate Court having reg ard to the

facts and circumstances of the case was of the

view that the suit agreement is a registered

ag reement to sell. Respond ent-plaintiff as a

matter of fact has p aid substantial portion of sale

consideration and has specifically plead ed in the

plaint that inspite of repeated request, the

app ellant-defendant has not come forward to

perform his p art of contract. The First Appellate

Court has also taken note of leg al notice issued by

the respondent-plaintiff. The First Appellate Court

having examined Ex.P.1 has also taken note of the

recitals in the suit ag reement, wherein the

app ellant-defendant was required to clear of the

encumb rance which was there over suit schedule

property on or before 15.11.2013.

7. Having taken note of all these

significant details, the First Appellate Court was of

the view that there is inaction on the part of the

app ellant-defendant. It is in this background, the

First Appellate Court has come to conclusion that

the Trial Court has totally misread the recitals in

the Ex.P.1 and therefore the finding arrived at by

Trial Court that Ex.P.1 offered as a security and

there was no intention to sell the suit schedule

property, is palp ab ly erroneous. On these set of

reasonings, the Appellate Court has answered the

points formulated therein. The First Appellate

Court has answered point No.1 in the affirmative

by holding that the appellant-defendant has in fact

ag reed to sell the suit property and has

accord ing ly executed suit ag reement for sale

consideration of Rs.6,00,000/-. While answering

point Nos.3 and 4, the First Appellate Court was of

the view that the respond ent-plaintiff has mad e

out a case and has succeed ed in estab lishing that

the judgment and decree of the Trial Court is

erroneous and the same is contrary to clinching

evid ence on record. Therefore the First Appellate

Court was of the view that the judgment and

decree of the Trial Court in denying the

discretionary relief of specific performance needs

warrant at the hands of the First Appellate Court.

On these set of reasonings, the app eal is allowed

and the suit filed by respondent-d efend ant was

decreed directing the app ellant-defend ant to

receive b alance sale consideration of Rs.90,000/-

and execute sale deed in favour of respond ent-

plaintiff. It is this judgment and decree of the

First Appellate Court, which is under challenge by

the appellant-defend ant.

8. Learned counsel appearing for the

app ellant-defendant would vehemently argue and

contend b efore this Court that the judgment and

decree of the Trial Court is in accord ance with law.

He would further submit that, respondent-plaintiff

has failed to p rove his read iness and willingness

and therefore the First Appellate Court erred in

interfering with the findings arrived at by the Trial

Court which was in fact b ased on leg al evid ence.

The main contention that is raised in the p resent

second appeal is that the Appellate Court has not

considered the comparative hardship that would be

caused to the appellant-defend ant and therefore

Section 20 of the Sp ecific Relief Act, 1963 ("the

Act" for short), is invoked before this Court. On

these two main grounds, the learned counsel

app earing for the appellant would reiterate the

grounds urged in the app eal memo and would

contend that the findings arrived at by the First

Appellate Court in reg ard to read iness and

willingness and having not examined Section 20 of

the Act suffers from perversity and would

therefore warrant interference at the hands of this

Court.

9. Per-contra, learned counsel ap pearing

for the respondent-plaintiff repelling the

arg uments addressed by learned counsel for the

app ellant-defendant would vehemently argue and

contend b efore this Court that the judgment and

decree of the First App ellate Court is b ased on

leg al evid ence adduced b y respondent-plaintiff. He

would submit to this Court that the finding s

record ed by the Trial Court on read iness and

willingness and on Issue No.3, are p alp ably

erroneous and same is contrary to clinching

evid ence on record adduced by respond ent-

plaintiff. He would further submit to this Court

that the respondent-plaintiff has paid substantial

portion of sale consid eration and in terms of

recitals in the suit agreement; it is the appellant-

defend ant was required to clear all encumbrance

and seek discharge of the charg e created over the

suit schedule property. Therefore he would submit

to this Court that there is totally inaction on the

part of appellant-defend ant and these sig nificant

details are taken into consideration by the First

Appellate Court. Insofar as comparative hard ship

is concerned, he would submit to this Court that

there are absolutely no p lead ing s in the written

statement and therefore, the judg ment and d ecree

passed by the First Appellate Court does not suffer

from any infirmities and no substantial question of

law would arise for consideration and hence p rays

for dismissal of the app eal.

10. To buttress his argument he has also

placed reliance on the judgment rendered by

Allahab ad High Court in the case of Mukesh Singh

Vs. Saurabh Chaudhary 1

11. Heard learned counsel app earing for the

app ellant and learned counsel appearing for the

respondent. I have also perused the plead ings and

ocular evid ence which are p roduced by learned

counsel for the appellant-defendant along with

memo d ated 09.02.2022.

12. Respondent-p laintiff is seeking

enforcement of suit ag reement dated 15.11.2012.

This document is not under dispute what is

disputed by the owner i.e., appellant-defendant is

2019 SCC Online All 5523 : (2019) 135 ALR 884

that this document was executed only b y way of

security toward s hand loan availed by the

app ellant-defendant. The Subject matter of suit

property is a vacant site. The suit ag reement is of

the year 2012. Substantial portion of sale

consideration is paid by respondent-plaintiff. This

Court has to examine whether the find ings

record ed by the First Appellate needs interference

at the hands of this Court. The app ellant-

defend ant has partially d isputed the suit

ag reement by contend ing that it was offered

towards collateral security for having availed hand

loan. The app ellant's specific contention is that he

had no intention to sell the suit property. Though

it is a trite law that conduct of respondent-plaintiff

should be unimpeachable so as to claim

discretionary relief of sp ecific performance, the

Courts have also take note of the conduct of the

owner of the suit sched ule prop erty. In the

present case on hand it is not in d isp ute that

defend ant was served with a leg al notice. The

app ellant-defendant has not chosen to issue a

reply notice. Therefore, the defence which has

sought to be set up in written statement that it

was offered as towards collateral security oug ht to

have been raised at the earliest point of time by

issuing reply notice. No explanation is forthcoming

on the sid e of appellant-defend ant as to why he

did not issue rep ly notice, when he was in receip t

of legal notice issued by respondent-plaintiff.

13. The second factor which goes ag ainst

the appellant-d efend ant is in the manner in which

he has contested the proceed ings. Thoug h he

claims that transaction was one of hand loan, he

has gone to the extent of saying that the money is

alread y rep aid to the wife of respondent-plaintiff.

The app ellant-defend ant claims that he has availed

hand loan from the wife of respondent-plaintiff

who was serving as a manag er in the Syndicate

Bank, Raib ag Branch. Having raised such a

contention, the app ellant-defend ant has miserab ly

failed to sub stantiate and corrob orate the d efence

set up in the written statement. Even the Trial

Court has answered Issue No.4 in the neg ative b y

holding that the app ellant-defend ant has failed to

prove that he has repaid the loan amount to the

wife of respondent-p laintiff.

14. Though Trial Court has answered issue

No.2 in the neg ative and has p roceeded to decline

to g rant of sp ecific performance of contract, the

evid ence is not at all properly appreciated by the

Trial Court. If the d ue execution of suit ag reement

is concurrently held to be proved by the Courts

below, then the Trial Court was not justified in

holding that the respondent-plaintiff was not read y

and has not come forward to seek enforcement of

contract immed iately. The finding of the Trial

Court that the suit ag reement is d ated 15.11.2012

and suit is filed after two years and that

respondent-plaintiff has kept quiet for almost two

years and therefore leg al notice was issued on

31.08.2015 and therefore readiness and

willingness is not p roved is p alpably erroneous.

The Trial Court has not p roperly evaluated the

evid ence on record to ascertain the truth in the

present case on hand. If under the registered suit

ag reement, the appellant-defend ant had

und ertaken that he would clear the encumb rance,

there are absolutely no pleadings and evidence

indicating that he has cleared the encumb rance as

ag reed under the suit ag reement. On the contrary,

the appellant-defend ant has taken a contrad ictory

stand by contending that it is a loan transaction.

If there is inaction on the p art of the app ellant-

defend ant in not clearing the encumbrance, then

the finding record ed by the Trial Court on Issue

No.2 is contrary to the evid ence availab le on

record . The appellant-defend ant having

incorporated a recital relating to encumbrance, is

estopped from contend ing that there was no

encumb rance over the suit schedule p roperty.

Even otherwise to substantiate their claim that the

property was free from encumbrance, no rebuttal

evid ence is p roduced. Even otherwise the

contention of ap pellant-defend ant that there is no

encumb rance is contrary to the recitals, und er th e

ag reement. It is in this background that the

respondent-plaintiff's case that on account of

encumb rance and inaction on the p art of

app ellant-defendant, he had to wait appears to be

probable. All these facts are not taken into

consideration by the Trial Court. In the p resent

case on hand, the respondent-plaintiff has not

only comp lied with the mandatory requirements as

contemp lated under Section 16(c) of the Sp ecific

Relief Act but has also succeeded in proving that

he was ever ready and willing to perform his p art

of contract. The Courts are also bound to take

note of the p ayment of earnest money in such

transactions. If sale consideration was fixed at

Rs.6,00,000/-, and if he has alread y p aid

Rs.5,10,000/-, then said substantial p ayment

made has to be taken into consideration while

examining read iness and willingness. When

substantial portion of the sale consid eration is

alread y p aid by respondent-plaintiff, that in itself

would estab lish that he was ever ready and willing

to p erform is part of contract. It is in this

backg round this Court would find that, the finding

arrived at by the Trial Court while d ealing with

Issue No.2 is palp ably erroneous. The Appellate

Court has taken judicial note of these significant

details and has rightly come to conclusion that

respondent-plaintiff was ever ready and willing to

perform his p art of contract.

15. Learned counsel appearing for the

app ellant-defendant also mad e an attempt to

amicab ly settle the matter and he submitted that

his client is ready to p ay b ack the entire sale

consideration and also d amag es as claimed by the

respondent-plaintiff along with Court fee p aid by

him.

16. However, learned counsel app earing for

the respondent-plaintiff submitted to this Court

that this offer is not accep table to his client. It is

brought to the notice of this Court that balance

sale consid eration is also deposited in the Court

after passing of judgment by the First Appellate

Court.

17. The claim of respondent-plaintiff that he

was ever ready and willing to perform his part of

contract is further streng thened by cond uct

wherein plaintiff has deposited balance sale

consideration after having succeeded b efore the

First Appellate Court. This material aspect not only

establishes that he was ever ready and willing to

perform his p art of contract as on the d ate of

execution of suit ag reement, but he was also ever

ready and willing to perform his part of contract,

moment he succeeded before the First Appellate

Court.

18. This offer mad e by appellant-defend ant

app ears to b e unreasonable. If respondent-plaintiff

has purchased a vacant site in 2012 and at this

juncture if he is called upon to take b ack his

money along with some damag es, it cannot b e

termed as a reasonab le offer. This Court has to

take note of the p rice escalation factor what

respondent-plaintiff could have p urchased in 2012

with that amount, would not fetch any p roperty

tod ay as there is escalation of price by two or

three folds. Therefore, this contention also cannot

be acced ed to.

19. For the first time before this Court, the

app ellant-defendant made a feeble attempt by

contend ing that he would be p ut to irrep arab le

loss and the same cannot be comp ensated in

terms of money and therefore pleads comparative

hardship. He would submit to this Court that the

relief of specific performance granted by the First

Appellate Court would cause immense hard ship to

app ellant-defendant and therefore substantial

question of law would arise in this reg ard .

20. As rightly pointed out by learned

counsel appearing for the respondent-plaintiff

there are absolutely no found ation in the written

statement in reg ard to ingredients of Section 20 of

the Act. Since this Court is of the view that there

are no materials to consider the comparative

hardship, therefore I am of the view that there is

no need to examine principles laid down by the

Allahab ad Hig h Court in the case stated supra. No

substantial question of law arises and accordingly

the appeal stand s dismissed.

SD/-

JUDGE EM