Karnataka High Court
Sri.J.R. Shanmukhappa vs Jyotiba S/O Rajba Pawar on 11 July, 2023
Bench: Ashok S. Kinagi, Venkatesh Naik
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RFA No. 100012 of 2017
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 11TH DAY OF JULY, 2023
PRESENT
THE HON'BLE MR JUSTICE ASHOK S. KINAGI
AND
THE HON'BLE MR JUSTICE VENKATESH NAIK T
REGULAR FIRST APPEAL NO. 100012 OF 2017 (SP)
BETWEEN:
SRI. J. R. SHANMUKHAPPA S/O. LATE G. REVAPPA,
AGED ABOUT 69 YEARS, OCC: AGRICULTURIST,
R/O: M.C.C.A BLOCK, 8TH MAIN,
DOOR NO.1988, DAVANAGERE.
...APPELLANT
(BY SRI. G. S. KANNOOR, SR. COUNSEL FOR
SRI. N. P. VIVEKMEHTA, ADVOCATE)
AND:
Digitally signed
by GIRIJA A
BYAHATTI
Location:
HIGHCOURT
1. JYOTIBA S/O. RAJBA PAWAR,
GIRIJA A OF
BYAHATTI KARNATAKA-
DHARWAD
BENCH
AGED ABUT 56 YEARS, OCC: AGRICULTURIST,
Date:
2023.07.14
12:24:49
+0530
R/O: ARLIHALLI VILLAGLE, TQ: SAVANUR-581118.
2. SMT. SHOBHA W/O. JOTIBA PAWAR,
AGED ABOUT 52 YEARS, OCC: HOUSEHOLD WORK,
R/O: ARLIHALLI VILLAGE, TQ: SAVANUR-581118.
3. ANUPKUMAR S/O. JOTIBA PAWAR,
AGED ABOUT 31 YEARS,
OCC: ENGINEERING STUDENT, R/O: ARLIHALLI
VILLAGE, TQ: SAVANUR-581118.
...RESPONDENTS
(BY SRI. S. R. HEGDE, ADV. FOR C/R1, R2 & R3).
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RFA No. 100012 of 2017
THIS RFA IS FILED UNDER SEC. 96 R/W ORDER XLI RULE
1 OF CPC., 1908, AGAINST THE JUDGMENT AND DECREE
DTD:17.09.2016 PASSED IN OS NO.55/2011 ON THE FILE OF
THE ADDITIONAL SENIOR CIVIL JUDGE AND JUDICIAL
MAGISTRATE FIRST CLASS, HAVERI, PARTLY DECREEING THE
SUIT FILED FOR SPECIFIC PERFORMANCE OF CONTRACT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 29.05.2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, VENKATESH
NAIK T. J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is filed by the appellant/plaintiff
challenging the judgment and decree dated 17.09.2016
passed by the learned Addl. Senior Civil Judge and JMFC,
Haveri (hereinafter referred to as 'the trial Court', for
brevity), in O.S.No.55/2011.
2. For the sake of convenience, the parties are
referred to as per their ranking before the trial Court. The
appellant is the plaintiff and respondents are defendants
No.1 and 2 before the trial Court.
3. The brief facts of the plaintiff's case as under:
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The plaintiff filed as suit for specific performance and
contract. It is the case of plaintiff that, Defendant No.1 is
the husband of defendant No.2 and defendant No.3 is the
only son of defendants No.1 and 2. They are residing in
joint Hindu Family comprising of defendants No.1 to 3.
Defendant No.1 is the manager of the joint Hindu Family.
On 01.03.2010, plaintiff entered agreement of sale with
defendants for purchase of schedule property and
defendants agreed to sell the suit schedule property in
favour of the plaintiff. Hence on 01.03.2010, defendants
executed agreement of sale in favour of plaintiff in respect
of the suit properties for total sale consideration of
Rs.63,75,000/- and on the same day, plaintiff paid an
advance of Rs.16,00,000/- to the defendants and they
have acknowledged the same and they agreed to execute
the registered sale deed by the end of 30.04.2010 and the
plaintiff shall pay the remaining balance amount of
Rs.47,75,000/- to the defendants at the time of execution
of registered sale deed. It is further contended that,
plaintiff has always been ready and willing party to
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perform his part of contract, but only after the defendants
have duly performed the essential terms of contract.
Though plaintiff was ready and willing to perform his part
of the contract with balance sale consideration, defendants
refused to execute the registered sale deed in favour of
the plaintiff. Hence, the plaintiff got issued legal notice to
defendants calling upon them to execute the registered
sale deed by receiving balance sale consideration.
However, defendants denied the same and gave evasive
reply, hence cause of action arose for the plaintiff to file
the suit. Hence the plaintiff filed suit for specific
performance of the contract based on the agreement of
sale.
4. Defendants appeared through their counsel and
defendant No.1 filed written statement. Defendants No.2
and 3 filed memo to adopt written statement filed by
defendant No.1. In the written statement, defendants
have taken a contention that the suit filed by the plaintiff is
false, frivolous and not tenable either in law or facts.
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Defendants have denied the agreement of sale executed
by them in favour of the plaintiff and receipt of advance
sale consideration of Rs.16,00,000/- from the plaintiff;
They denied the readiness and willingness as pleaded by
the plaintiff and the allegation that, the defendants have
breached the terms of contract. Defendants further
contended that, plaintiff has filed one more suit in
O.S.No.36/2011 for the relief of permanent injunction
against the defendant in respect of the suit schedule
property before the Civil Judge, Savanur. Therefore, the
present suit is hit by Order II Rule 2 of CPC and the suit is
also not maintainable. On these grounds defendants
prayed for dismissal of the suit.
5. On the basis of the above pleadings, the trial
Court framed the following issues:
1) Whether plaintiff proves that he has
performed his part of contract as per terms of
agreement dated:01-03-2010?
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2) Whether the Plaintiff proves that he was
ready, ever ready, always ready and willing
to his part of contract?
3) Whether the plaintiff proves that they
delivered the documents and got measured
and fixed boundaries of suit land in the
presence of the Plaintiff as per terms of
agreement dated 01-03-2010?
4) Whether defendants proves that they have
sustained loss of Rs.3,42,000/- as alleged in
written statement?
5) Whether the defendants proves that
Defendant No.1 was purchased the properties
at Bhadravati from one Purushottam and paid
Rs.20,00,000/- as earnest money?
6) Whether defendants proves that they have
entered agreement in respect of suit
properties with third party for
Rs.3,00,00,000/-?
7) Whether Defendants proves that the suit of
the plaintiff is hit by order 2 rule 2 of C.P.C?
8) Whether plaintiff is entitle the relief of specific
performance of contract of sale?
9) What order or decree?
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The plaintiff in order to substantiate his case, got
examined himself as PW1 and got marked 81 documents
as per Exs.P1 to P81 and defendant No.1 examined
himself as DW1 and got marked 18 documents at Exs.D1
to D18 and also got examined 2 witnesses as DW2 and
DW3.
6. The trial Court after recording the evidence and
considering the oral and documentary evidence, answered
issues No.1 and 2 in the affirmative, issues No.3 to 7 in
the negative and issue No.8 partly in the affirmative and
consequently decreed the suit of the plaintiff in part and it
is ordered and decreed that defendants No.1 to 3 shall be
jointly and severally liable to refund the earnest money of
Rs.16,00,000/- in favour of the plaintiff along with an
interest at the rate of 6% p.a. from the date of agreement
till actual realization of the amount. The trial Court further
held that the plaintiff has proved that he has performed his
part of the contract as per the terms of agreement dated
01.03.2010 and he was ever ready and willing to perform
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his part of the contract. However, trial Court declined to
grant the relief of specific performance. On the other
hand, the trial Court ordered for refund of earnest amount
in favour of the plaintiff. The plaintiff aggrieved by the
judgment and decree passed by the trial Court, has
preferred this appeal.
7. Learned Senior Counsel for the plaintiff/
appellant argued and submitted that the judgment and
decree passed by the trial Court is illegal and liable to be
dismissed. Though the trial Court answered issues No. 1
and 2 in favour of the plaintiff, but the trial Court has
committed an error in not decreeing the suit for specific
performance of the contract. The trial Court has recorded
a finding with regard to the alleged loss suffered by the
defendants, but has held that defendants have not
sustained any loss and accordingly the trial Court
answered issue No.4 in the negative. However, the trial
Court has not decreed the suit for specific performance in
full. It is contended that, defendants have entered into an
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agreement in respect of the suit schedule property with a
third party for a sum of Rs.3,00,00,000/-, further,
Defendant No.1 agreed to sell the suit schedule property to
one Sri.Purushottam-Giri and received a sum of
Rs.20,00,000/- as earnest money. These contentions have
been refused by the trial Court. However, the trial Court
has not decreed the suit of the plaintiff. It is contended
that, the trial Court has framed the relevant issues and all
the issues have been held in favour of the appellant and
against the respondents, but the trial Court declined to
grant specific performance. Thus, the trial Court has
committed an error in refunding the earnest money
without considering the provisions of the Specific Relief
Act. The counsel further submits that the relief of specific
performance is a discretionary relief and it must be
exercised judiciously and not arbitrarily. Hence, the trial
Court has not exercised discretion properly, but arbitrarily
declined to grant specific performance. He submits that,
defendants did not choose to file any cross appeal against
the decree. On all these grounds, counsel for the
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appellant prayed for allowing the appeal and also prayed
for grant of specific performance.
8. Per contra, counsel for the
defendants/respondents vehemently argued and taken a
contention that, they, have not executed agreement of
sale in favour of the plaintiff and they have not received
the earnest money of Rs.16,00,000/- as contended by the
plaintiff. Hence, the counsel for the defendants supports
the judgment and decree passed by the trial Court, and
prayed for dismissal of appeal.
9. Heard, perused the records and considered the
submissions made by the learned counsels for the parties.
The points that arise for our consideration are;
i. Whether the plaintiff proved that he entered
agreement of sale with defendants for
purchase of schedule property for a total sale
consideration of Rs.63,75,000/- and as
advance sale consideration, he paid a sum of
Rs.16,00,000/- to the defendants and the
defendants have received advance sale
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consideration from the plaintiff and in
consideration thereof, defendants have
executed the agreement of sale dated
01.03.2010 in favour of the plaintiff.?
ii. Whether the plaintiff further proved that he
was always been ready and willing party to
perform his part of the contract, but the
defendants have breached the contract and
hence is entitled for the relief as sought for?
iii. Whether the judgment and decree passed by
the trial Court is perverse, arbitrary and
illegal and calls for interference of this Court?
iv. What order or decree?
Points No.(i) and (ii)
10. As issues No.1 and 2 are interlinked, they are
taken up together for common discussion in order to avoid
repetition of fact and law. In order to establish the claim
of the plaintiff, he himself examined on oath as PW1. In
his evidence, he has reiterated the averments made in the
plaint. He has stated that, on 01.03.2010 defendants
offered to sell the suit schedule property in favour of the
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plaintiff for a total sale consideration of Rs.63,75,000/-;
He agreed for the same and paid an advance amount of
Rs.16,00,000/- to the defendants and they have
acknowledged the same. Accordingly, they executed the
sale agreement with a condition that defendants shall
execute the registered sale deed on or before 30.04.2010
by paying balance sale consideration.
11. In support of the oral testimony of PW1, he has
relied upon Ex.P1 - agreement of sale dated 01.03.2010
executed by the defendants in favour of the plaintiff. Exs.
P2 to P4 are the RTC extract in respect of the suit schedule
properties. Suit schedule properties stand in the name of
defendants. Ex.P5 is the copy of the legal notice issued by
the plaintiff to defendants dated 10.07.2010, wherein the
plaintiff called upon the defendants to receive the balance
sale consideration and to execute the registered sale deed
in his favour. Ex.P6 is the legal notice returned with an
endorsement as 'refused' by defendants No.1 and 2. Ex.P7
is the unserved postal cover containing the copy of legal
notice. Ex.P8 is another legal notice dated 20.12.2012,
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wherein the plaintiff once again called upon the defendants
to receive balance sale consideration and execute the
registered sale deed in his favour. Ex.P9 is the copy of
reply notice issued by defendants' counsel to the plaintiff.
Exs.P10 and P11 are the telegrams sent to defendants
No.1 and 2. Ex.P12 is the telegram issued to the counsel
for defendant No.3. Ex.P13 is the Nil encumbrance
certificate in respect of the suit schedule property. Ex.P14
is the receipt for having paid an amount to the
encumbrance certificate. Ex.P15 is the Nil encumbrance
issued by the Sub-Registrar, Savanur and Ex.P16 is its
original copy. Ex.P17 is the copy of plaint in
O.S.No.36/2011 filed by the plaintiff against the
defendants for the relief of permanent injunction and
Ex.P18 is the certified copy of the written statement filed
by defendants in O.S.No.36/2011, Ex.P19 is the statement
of bank account maintained by the plaintiff, which shows
that, on 02.04.2010, the plaintiff was having a sum of
Rs.1,13,83,637/- in his account. Ex.P20 is the FD receipt
of the plaintiff, for a sum of Rs.1,56,785/- and the
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maturity date is mentioned as 24.02.2015. Exs.P21 and
P22 are bank endorsement issued by Davanagere
Automobile Industrial Cooperative Society Limited, wherein
the Bank has endorsed that, plaintiff deposited a sum of
Rs.12,56,363/- in his name and a sum of Rs.10,22,593/-
in favour of his wife. Further, plaintiff deposited a sum of
Rs.12,71,620/- and a sum of Rs.3,86,686/- in his name
and in the name of his wife. Exs.P23 to P46 are various
FD receipts of bank pertains to the plaintiff to show that
the plaintiff kept FD amount in various banks. , Exs.P47 to
P57 are the RTC extracts stands in the name of plaintiff.
Exs.P58 to P72 are the RTC extracts, Exs.P73 and P74 are
copies of caveat petition, Exs.P75 to P78 are the VPC tax
extracts, Ex.P79 is the RTC extract, Ex.P80 is the
application for Tatkal Podi and Ex.P81 is the certificate of
posting.
12. PW1 has undergone intensive cross-examination
by the counsel for defendants. In the cross-examination,
PW1 admits that Rs.5,00,000/- has been deposited in his
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name and Rs.35,00,000/- has been deposited in the name
of his wife in the bank. He further admits that, as per the
agreement of sale dated 01.03.2010, the balance sale
consideration amount to be paid to the defendants at the
time of registration i.e, after clearance of documents like
payment of taxes, issue of receipt for having paid the
encumbrance, mutation certificate, genealogy certificate,
loan repayment certificate and also agreed that in his
presence, the suit schedule properties shall be measured,
surveyed and thereafter, the plaintiff was required to pay
balance sale consideration of Rs.47,75,000/- on
30.04.2010, and thereafter registered sale deed was to be
executed in favour of plaintiff. He admits that, initially he
did not issue any legal notice and he volunteered that he
had been to the house of defendants along with witness to
the agreement and had requested them to perform their
part of the contract. He further admits that, he met
defendants in the month of April, 2010;
Defendants requested him to give 15 days time to
measure the suit land and to conduct the survey and after
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15 days, again he met the defendants and at that time,
defendants sought time to complete the survey work and
later defendants told the plaintiff that surveyor is not
available and after getting the surveyor, they would inform
him and defendants contended that, there is no urgency.
He further admits that, he received Rs.1,50,00,000/-
amount from the railway authorities as compensation and
he has kept the said amount in Praghathi Grameena Bank,
Harihar and he had withdrawn a sum of Rs.60,00,000/-
with an intention to pay the said amount to the
defendants.
13. On the other hand, defendant No.1 was
examined himself on oath as DW1. In his chief
examination, he has reiterated the averments made in the
written statement and he relied upon Exs.D1 to D18. DW1
has admitted his signature in Ex.D1, the receipt of advance
sale consideration paid by plaintiff at the time of execution
of agreement of sale. He also admitted that, as per the
terms and conditions of agreement of sale, both the
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parties shall abide by the conditions stipulated in Ex.P1
and both of them agreed that, on or before 30.04.2010,
the revenue receipts, RTC extracts, mutation order, survey
map and genealogy certificate ought to have been
effected; But he did not remember the date of submission
of application to the Sub-Registrar for EC and other
documents; he further admits that, the suit schedule
properties are inherited by him through his grand father
and all mutation extracts are in the name of his grand
father. He further admits that, as per the contents of
Ex.P1, defendants required to conduct survey and measure
the suit schedule properties; due to financial difficulties of
his family, he agreed to sell the suit schedule properties to
the plaintiff. He further admits that, as per Ex.P1 -
agreement of sale, at the time of registration of sale deed,
the possession of the suit schedule properties should be
handed over to the plaintiff. He further admits that, he
agreed to sell the suit schedule properties to some third
person for Rs.3,00,00,000/- as per Ex.P9 and he received
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a sum of Rs.20,00,000/- as earnest money from the third
person.
14. On perusal of the oral and documentary
evidence, it appears that, defendants have admitted
agreement of sale executed by them, in favour of plaintiff,
their signature found in agreement of sale, passing of
consideration for a sum of Rs.16,00,000/- and the sale
deed to be executed in favour of plaintiff on or before
30.04.2010, by receiving balance sale consideration from
the plaintiff. Defendants also agreed that, plaintiff has
sufficient amount with him to complete the contract.
Hence, the plaintiff has proved the agreement of sale
executed by defendants in his favour for purchase of suit
schedule property, for a total sale consideration amount of
Rs.63,75,000/- and received earnest amount of
Rs.16,00,000/- as on the date of execution of agreement
of sale from the plaintiff. The plaintiff also proved that the
defendants have breached the terms of contract and he
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also proved that, he is always been ready and willing party
to perform his part of contract.
15. In the instant case, the trial Court though
declined to grant specific relief as sought by the plaintiff.
could have exercised discretion Under Section 20 of the
Specific Relief Act. Such a discretion, however, was not to
be exercised arbitrarily, but ought to have been based on
sound and reasonable judicial principles. Section 20 also
specified the circumstances in which the Court may
properly exercise the discretion not to decree specific
performance and it also specified when, in an appropriate
case, a decree could be given by proper exercise of
discretion. If, therefore, on a consideration of all the
circumstances of the case, the trial Court thought that it
would be inequitable to grant the relief prayed for, it
should not have done so.
16. Clause (c) of Section 16 of the Act, states that
unless the plaintiff establishes his readiness and
willingness to perform his part of the contract, he would
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not be entitled to a decree of specific performance. It is a
settled principle of law that no evidence can be permitted
to be let in the absence of averments in the
plaint/pleadings vide Bachhaj Nahar v. Nilima Mandal,
(2008) 17 SCC 491. In the said case, the Hon'ble Supreme
Court laid down the law as follows:
(i) No amount of evidence can be looked into, upon
a plea which was never put forward in the pleadings. A
question which did not arise from the pleadings and
which was not the subject matter of an issue, cannot
be decided by the Court.
(ii) A Court cannot make out a case not pleaded.
The Court should confine its decision to the question
raised in pleadings. Nor can it grant a relief which is
not claimed and which does not flow from the facts
and the cause of action alleged in the plaint.
17. Further, readiness and willingness cannot be
considered in a straitjacket formula; it has to be inferred
on a consideration of the entire facts and circumstances of
each case and the intention and conduct of the parties
concerned. Even if a party to the contract is ready and has
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the requisite funds he may not be willing to perform his
part of the contract and vice versa
18. Thus, both readiness as well as willingness have
to be established by the plaintiff on whom the burden is
cast in a suit for specific performance of an agreement.
Therefore, the question would arise as to whether the
plaintiff discharged such burden in the instant case.
19. On perusal of the oral and documentary
evidence on record, it appears that defendant No.1 has
admitted execution of agreement of sale in favour of the
plaintiff by the defendants, and they have agreed to sell
the suit schedule property in favour of plaintiff for a sum of
Rs.63,75,000/- and on the same day, plaintiff paid a sum
of Rs.16,00,000/- as earnest amount and defendants have
acknowledged the same. The plaintiff further proved that,
he is always ready and willing party to perform his part of
contract, but the defendants have not performed the
contract as per the terms of Agreement of sale Ex.P1.
Plaintiff also proved that, he has sufficient balance sale
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consideration in order to purchase the suit schedule
property and get executed the registered sale deed in his
favour in respect of the suit schedule property.
20. The Hon'ble Apex Court in the case of
Narinderjit Singh vs. North Star Estate Promoters
Ltd. reported in AIR 2012 SC 2035, held that, escalation
of price is not a ground to deny specific performance of
agreement to sell, when seller defendant had neither
pleaded hardship nor produced any evidence to show that
it will be inevitable to order specific performance of
agreement. Whereas, in the instant case, the defendants
neither pleaded hardship nor produced any documents or
evidence to show that it will be inevitable to order specific
performance of agreement.
21. From the perusal of the written statement filed
by the defendant, the defendant has neither pleaded nor
lead any evidence that in case if suit for specific
performance is decreed the defendant will be put to
hardship. In the offence of pleadings and proof the trial
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court ought have decreed the suit for specific performance
of contract on the contrary dismissed the suit.
22. Looking to any angle, the plaintiff proved
execution of agreement of sale, and payment of advance
sale consideration to the defendants. Further the plaintiff's
has proceed readiness and willingness to perform his part
of contract with the balance sale consideration and though
the defendants have not pleaded and proved any hardship
for performance of the contract. In view of above
discussions, we answer points No.(i) and (ii) in the
affirmative.
Re: Point No.(iii)
23. In view of answer to points No.(i) and (ii), we
hold that, the trial court considering the oral and
documentary evidence placed on record, was not justified
in decreeing the suit of plaintiff in part, by refusing specific
performance and order for refunding of earnest amount to
plaintiff, in the facts and circumstances of the case, we
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interfere with the impugned Judgment and decree, passed
by the trail court.
24. The Hon'ble Supreme Court in case of
Sri.Haridasan Vs. Anapatta Parakattu Vasudeva
Kurub and others reported in 2023 SCC Online SC 36
held that, if the plaintiff is able to prove the transaction
and if he is ready to perform his part of the contract, then
the Court can exercise discretion under Section 20 of the
Specific Relief Act and can grant specific relief. The
Hon'ble Apex Court observed in Haridasan's case (supra)
and directed the plaintiff to pay further sum of
Rs.10,00,000/- to the defendants over and above sale
consideration mentioned in agreement of sale. In view of
the ratio laid down in the decision cited supra, we direct
the plaintiff to pay further sum of Rs.10,00,000/- to the
defendants over and above sale consideration mentioned
in agreement of sale, in order to do complete justice.
Accordingly, we answer Point No.(iii) in the affirmative.
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25. Point No.(iv): In view of the above discussion,
we proceed to pass the following:
ORDER
i. Appeal is allowed.
ii. The judgment and decree dated
17.09.2016 passed by the learned Addl.
Senior Civil Judge and JMFC, Haveri in
O.S.No.55/2011 is set aside. The suit filed
by the plaintiff for specific performance of
contract to sell the suit schedule property
is hereby decreed. Defendants are
directed to execute registered sale deed
by receiving consideration amount within
six weeks from today, failing which
plaintiff is at liberty to get registered sale
deed through due process of law.
However, in order to do complete justice,
we direct that, over and above the sale
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consideration mentioned in the agreement
of sale and the amount already deposited
by the plaintiff, the plaintiff is directed to
pay a further sum of Rs.10,00,000/- to
the original defendants, to be paid within
a period of six weeks from today.
iii. No order as to costs.
Sd/-
JUDGE
Sd/-
JUDGE
gab/ct-abn
