Karnataka High Court
K Chandraiah vs C M Prema on 5 December, 2023
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NC: 2023:KHC:44740
RSA No. 2034 of 2016
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
REGULAR SECOND APPEAL NO. 2034 OF 2016 (SP)
BETWEEN:
K CHANDRAIAH
S/O KASAIAH,
AGED 52 YEARS,
R/AT MAGADI ROAD, RAYARADODDI,
RAMANAGARA TOWN,
RAMANAGAR-571511
...APPELLANT
(BY SRI. B RAMESH, ADVOCATE)
AND:
1. C M PREMA
W/O H D RADHAKRISHNA,
Digitally AGED 55 YEARS,
signed by FORMERLY R/AT MANJUNATHA NAGARA,
CHAITHRA A
JALAMANGALA ROAD,
Location:
RAMANAGARA TOWN-571511.
HIGH
COURT OF
KARNATAKA PRESENTLY R/AT NISCHLI NILAYA,
C/O RATHNAMMA NAGARAJU,
NO.60-61, 6TH MAIN ROAD,
BEHIND SURYA DEPARTMENTAL STORES,
JNANA JYOTHI NAGAR,
BENGALURU-560056
2. A C BETTARANGIAHA
S/O CHIKKARANGAIAH,
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RSA No. 2034 of 2016
AGED 50 YEARS,
R/AT ARALIMARDA DODDI,
YEREHALLI POST, IBBALAKAHALLI POST,
KOOTAGAL HOBLI,
RAMANAGARA TALUK,
WORKING IN CENTRAL SILK BOARD,
NEAR GHOUSIA COLLEGE,
B.M.ROAD, RAMANAGARA TOWN-571511
...RESPONDENTS
(BY SRI.V.VIJAYASHEKAR GOWDA, ADVOCATE FOR R2;
R1 SERVED & UNREPRESENTED)
THIS RSA IS FILED U/S. 100 OF CPC.,AGAINST THE
JUDGMENT AND DECREE DATED 8.07.16 PASSED IN RA NO.
44/12 ON THE FILE OF THE PRL. DISTRICT AND SESSIONS
JUDGE RAMANAGARA, DISMISSING THE APPEAL AND
CONFIRMING THE JUDGMENT AND DECREE DATED: 27.3.12
PASSED IN OS NO. 487/06 ON THE FILE OF THE PRL. SENIOR
CIVIL JUDGE, CJM RAMANAGARA.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
The captioned second appeal is by unsuccessful
plaintiff who has questioned the concurrent judgments
rendered by both the Courts wherein both the Courts have
ordered for refund of earnest money and have declined to
grant relief of specific performance of contract.
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2. For the sake of convenience the parties are
referred to as per their rank before the trial Court.
3. The facts leading to the case are as under:
Plaintiff instituted the suit seeking relief of specific
performance of contract and sought for declaration that
sale deed executed by defendant No.1 in favour of
defendant No.2 as null and void. Plaintiff alleged that
defendant No.1, who is the owner, offered to sell the suit
schedule property and accordingly executed an agreement
on 26.01.2005 and received Rs.35,000/- out of total sale
consideration of Rs.2,35,000/-. Plaintiff has filed the
present suit alleging that defendant No.1 inspite of
repeated request to execute sale deed by receiving
balance sale consideration has failed to perform his part of
the contract. Plaintiff alleged that defendant No.1 inspite
of legal notice has failed to come forward to complete the
transaction. Plaintiff further alleged that, at the time of
filing suit, he found from the property extract that
defendant No.1 has sold the suit property in favour of
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defendant No.2 on 26.12.2005. On these set of pleadings
suit is filed.
4. Defendant No.1-owner tendered appearance
and filed written statement and stoutly denied the entire
averments made in the plaint.
5. Defendant No.2 filed written statement and
claimed that he is a bonafide purchaser without notice for
valuable sale consideration. Defendant No.2 contended
that he purchased the property under registered sale deed
and possession is delivered to him. Therefore, defendant
No.2 claimed that he is a bonafide purchaser and alleged
that plaintiff in collusion with defendant No.1 has
instituted the present suit and therefore, prayed for
dismissal of the suit.
6. Plaintiff and defendant No.2 to substantiate
their respective claim let in oral and documentary
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evidence. Though trial Court answered issue No.1 in the
affirmative and held that suit agreement is proved, but
however, issue No.2 was answered in the negative and a
finding is recorded by the trial Court that plaintiff has
failed to prove his readiness and willingness. Trial Court
while answering additional issue No.1 in the affirmative
held that defendant No.2 is the bonafide purchaser and he
was not aware of the suit agreement between plaintiff and
defendant No.1.
7. Feeling aggrieved by the judgment and decree
of the trial Court, defendants preferred an appeal before
the appellate Court. The appellate Court being the final
fact finding authority has independently assessed the
entire material on record. The appellate Court while
concurring with the findings and reasons assigned by the
trial Court on readiness and willingness was also of the
view that plaintiff is not entitled for the discretionary relief
of specific performance of contract. Appellate Court held
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that plaintiff has failed to prove his readiness and
willingness and therefore, he is not entitled for the relief of
specific performance.
8. Heard the learned counsel for the plaintiff and
learned counsel for defendant No.2. I have given my
anxious considerations to the findings recorded by both
the Courts.
9. The plaintiff is asserting and claiming specific
performance of contract based on an agreement to sell
dated 26.01.2005. The time stipulated under the
agreement is three months. The material on record
reveals that plaintiff has issued legal notice on 14.2.2006
and suit is filed on 7.10.2006.
10. Defendant No.1 has sold the suit property in
favour of defendant No.2 under registered sale deed dated
26.12.2005. The alienation made by defendant No.1 in
favour of defendant No.2 is after expiry of three months'
period stipulated under the suit agreement and before
issuance of legal notice and filing of suit by the plaintiff.
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Both the Courts referring to the material on record have
come to the conclusion that defendant No.2 is a bonafide
purchaser without notice for valuable sale consideration.
As rightly pointed out by the learned counsel appearing or
defendant No.2, defendant No.2 has purchased the suit
property after expiry of the time stipulated under the suit
agreement.
11. It is a trite law that if an agreement holder fails
to enforce the contract by taking appropriate steps within
the stipulated period enumerated under the agreement,
the subsequent transferee who has acquired the property
under the registered sale deed is entitled for protection
where title is acquired while acting bonafide for value and
without notice of plaintiff's agreement. It is equally trite
law that the term 'good faith' indicated under Section
19(1)(b) of the Specific Relief Act differs from the term
used in Section 41 of Transfer of Property Act, which
requires the purchaser to take reasonable time to
ascertain that the transferor had powers to transfer.
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Section 19(1)(b) of the Specific Relief Act requires that
money should have been paid in good faith and without
notice of the contract. If the alienation made by
defendant No.1 is after expiry of the period stipulated
under the suit agreement, which is admittedly three
months, the mere statement by defendant No.2 that he
had no notice of the suit agreement suffice.
12. Both the Courts referring to these significant
details have concurrently held that defendant No.2 is a
bonafide purchaser. Defendant No.2 has acquired title in
2005. Under the provisions of the Specific Relief Act the
rights of a bonafide purchaser in a suit for specific
performance are delineated with due considerations to
principles aimed at safeguarding their interests. Section
19(1)(b) of the Specific Relief Act confers a degree of
protection upon a bonafide purchaser who acquires
property without notice of the prior agreement for specific
performance. Section 27 of Specific Relief Act stipulates
that a party seeking specific relief of contract cannot
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obtain a decree if it prejudice the rights of a person who in
good faith and for consideration has acquired an interest in
the property. In essence, the act endeavors to shield
innocent purchasers from the ramifications of the specific
performance decree and the rights of the bonafide
purchaser are thus safeguarded to prevent inequitable
outcomes arising from circumstances beyond their
knowledge and control.
13. Both the Courts have declined to exercise
discretion in favour of the plaintiff though suit agreement
is held to be proved. Both the Courts have concurrently
held that plaintiff has failed to prove his readiness and
willingness. Both the Courts have come to the conclusion
that this is not a fit case to exercise discretion to order for
specific performance in favour of the plaintiff. Both the
Courts have also taken into consideration the
circumstances of the case, the conduct of parties and their
respective interest. If both the Courts considering
equitable considerations has ordered for refund of earnest
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money, this Court is not inclined to grant any reliefs under
Section 100 of CPC. No substantial question of law arises
for consideration.
The appeal is dismissed.
Sd/-
JUDGE
ALB
