Karnataka High Court
Ramanagouda vs Smt.Neelamma W/O Sharanagouda on 20 July, 2023
Bench: N.S.Sanjay Gowdapresided Bynssgj
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RFA No. 200109 of 2017
C/W RFA No. 200069 of 2017
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 20TH DAY OF JULY, 2023
BEFORE
THE HON'BLE MR. JUSTICE N.S.SANJAY GOWDA
REGULAR FIRST APPEAL NO. 200109 OF 2017 (SP)
C/W
REGULAR FIRST APPEAL NO. 200069 OF 2017
IN RFA NO.200109/2017:
BETWEEN:
SMT. NEELAMMA
W/O SHARANAGOUDA
AGED ABOUT 55 YEARS,
OCC: HOUSEHOLD,
R/O MAROL, TQ. HUNUGUND,
Digitally signed
by SACHIN
DIST. BAGALKOTE, NOW RESIDING AT
Location: HIGH
COURT OF
KALABURAGI.
KARNATAKA
...APPELLANT
(BY SRI S. S. MAMADAPUR, ADVOCATE)
AND:
SRI. RAMANAGOUDA
S/O LATE MAHADEVAPPA GOUDA MALI PATIL,
AGED ABOUT 52 YEARS,
OCC: AGRICULTURE,
R/O KACHAKANOOR, TQ. SHORAPUR,
DIST. YADAGIR-585201
...RESPONDENT
(BY SRI R. S. SIDHAPURKAR, ADVOCATE)
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RFA No. 200109 of 2017
C/W RFA No. 200069 of 2017
THIS RFA IS FILED U/S 96 OF CPC, PRAYING TO
AGAINST THE JUDGMENT AND DECREE DATED 15.04.2017
PASSED IN O.S.NO.65/2015 PENDING ON THE FILE OF THE
SENIOR CIVIL JUDGE, SHORAPUR, WHEREIN, THE SUIT WAS
PARTLY DECREED AND PARTLY DISMISSED.
IN RFA NO.200069/2017:
BETWEEN:
RAMANAGOUDA
S/O LATE MAHADEVAPPA GOUDA MALIPATIL,
AGED ABOUT 54 YEARS
OCC: AGRICULTURE, R/O KACHAKANOOR,
TQ. SHORAPUR,
DIST.YADGIR.
...APPELLANT
(BY SRI R. S. SIDHAPURKAR, ADVOCATE)
AND:
SMT. NEELAMMA W/O SHARANAGOUDA
AGED ABOUT 57 YEARS, OCC: HOUSEHOLD,
R/O MAROL, TQ. HUNUGUND,
DIST. BAGALAKOTE-587125,
NOW RESIDING AT KALABURAGI.
...RESPONDENT
(BY SRI S. S. MAMADAPUR, ADVOCATE)
THIS RFA IS FILED UNDER SECTION 96 R/W ORDER 41
RULE 1 OF THE CPC PRAYING TO ALLOW THE APPEAL AND SET-
ASIDE THE JUDGMENT AND DECREE DATED 15.04.2017
PASSED IN O.S.NO.65/2015 BY THE LEARNED SENIOR CIVIL
JUDGE, AT SHORAPUR AND DISMISS THE SUIT WITH COSTS
THROUGHOUT.
THESE APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
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RFA No. 200109 of 2017
C/W RFA No. 200069 of 2017
JUDGMENT
1. Neelamma instituted a suit against her brother-in-
law--Ramanagouda seeking for enforcement of an
Agreement of Sale that he had executed on 01.09.2008,
whereby he had agreed to sell 16 acres of land in
Sy.No.46 situate at Kachaknoor village, Shorapur Taluk,
Gulbarga District (hereinafter refer to as "the suit
property" for brevity) and he had received a sum of
Rs.11,00,000/- as advance.
2. It was her case that the Agreement of Sale did not
stipulate any time limit and possession was also to be
handed over at the time of registration of the Sale Deed.
She stated that Ramanagouda was required to obtain the
permission of the Irrigation Department and also a 11E
sketch in order to conclude the transaction, but he had not
secured those required documents and whenever she
requested, he went on postponing the matter. She stated
that even after a lapse of six years, he was not ready to
secure the required documents and ultimately, when she
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approached in March 2015, he expressed his inability to
conclude the sale transaction and as a consequence, a
Legal Notice was issued on 01.04.2015. It was stated that
to the said Legal Notice, an untenable reply was given and
hence, she was constrained to institute the suit.
3. Ramanagouda entered appearance and filed a written
statement. In the written statement, he stated that for
the construction of a barrage at Kachaknoor village, the
villagers had collected funds. It was stated that since the
barrage was to irrigate a huge extent of lands, the
villagers had approached him for the money and since, he
did not have sufficient funds, he had approached his
sister-in-law--Neelamma for financial help and she had
agreed to provide a loan, but she had insisted at the rate
of three per cent per month was required to be paid on the
loan amount.
4. It was stated that accordingly she advanced him a
loan of Rs.11,00,100/- and after deducting the advance
interest of Rs.3,00,100/-, he had actually received only a
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sum of Rs.8,00,000/-. He also stated that at the time of
advancing the loan, an affidavit which was styled as an
Agreement of Sale was executed and notarised. He
started that since there was no intention of sale, the said
document was executed.
5. He also went on to state that by collecting the
amount from the villagers, he had also paid a sum of
Rs.4,00,000/- every year including the interest and as on
2014, he had paid a sum of Rs.24,00,000/- to her. It was
stated that he was under the assumption that in view of
the close relationship between the parties, her sister-in-
law would not misuse the alleged agreement and he had
not taken back the Agreement also, even though the
entire loan along with interest had been repaid.
6. The Trial Court framed four issues. On behalf of
Neelamma, she got herself examined as PW-1 and got one
more witness examined and got six documents admitted
into evidence and marked them as exhibits.
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7. Ramanagouda on the other hand, examined himself
as DW-1 apart from two other witnesses and he got three
documents admitted into evidence and marked them as
exhibits.
8. The Trial Court, on consideration of the evidence
adduced before it, came to the conclusion that Neelamma
had failed to establish that Ramanagouda had agreed to
sell the suit schedule property for a sum of Rs.12,00,100/-
and had executed an Agreement of Sale on 01.09.2008.
It also held that she had failed to prove that she had paid
a sum of Rs.11,00,000/- as advance to Ramanagouda.
9. The Trial Court held that Ramanagouda was able to
establish that the alleged Agreement of Sale was a
security for repayment of the loan as had been contended
in the written statement. The Trial Court accordingly
dismissed the prayer of Neelamma for specific
performance and proceeded to decree the suit, directing
Ramanagouda to pay a sum of Rs.11,00,000/- with
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C/W RFA No. 200069 of 2017
interest at twelve per cent per annum from the date of the
Agreement of Sale i.e., 01.09.2008 till its realisation.
10. Being aggrieved by this judgment, both Neelamma
as well as Ramanagouda are in appeals.
11. The point that arises for consideration in these
appeals is:
" Whether the Trial Court was
justified in refusing to grant the
decree for specific performance,
or in the alternative, whether the
Trial Court was justifying in
coming to the conclusion that the
Agreement of Sale was executed
as a security for a loan transaction
and the money was required to be
ordered to be repaid with
interest? "
12. Neelamma contends that the refusal of the Trial
Court to decree the suit for specific performance was
incorrect; while Ramanagouda contends that the direction
to repay the sum of Rs.11,00,000/- along with interest at
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twelve per cent per annum from the date of the
Agreement of Sale i.e., 01.09.2008 till its realisation, was
incorrect.
13. In view of the fact that Neelamma contended that,
she had agreed to purchase the suit property for
Rs.12,00,100/- and paid a sum of Rs.11,00,000/- and also
taken into consideration the plea of Ramanagouda that he
had obtained a loan of Rs.11,00,100/- and as a security
for repayment, he had executed a document styled as an
Agreement of Sale, it is clear that the payment of
Rs.11,00,000/- to Ramanagouda was fundamentally an
admitted fact.
14. Ramanagouda contended that it was never his
intention to sell the property and the entire transaction
was essentially a loan transaction, while Neelamma
contended to the contrary.
15. The Agreement of Sale was entered on 01.09.2008,
without there being any time limit stipulated for
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concluding the sale transaction and without taking over
the possession under the Agreement. If a person were to
pay nearly ninety-one percent of the sale transaction, it
would be difficult to accept that a person would wait for
seven long years before making a demand for execution of
a sale deed by issuance of a legal notice.
16. Even assuming that the parties are related, having
regard to the fact that a huge sum of Rs.11,00,000/- was
paid, which was almost ninety-one percent of the sale
consideration, it is unnatural for a party, who claims that
the defendant had agreed to sell the property, to keep
quiet for seven long years.
17. It has to be noticed here that the intent of the
Agreement according to Ramanagouda was for the
purpose of constructing a barrage and thereby ensuring
that the land in question stood irrigated.
18. If this contention was to be accepted, the plaintiff
being his sister-in-law, would not keep quiet for seven
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long years. The assertion that the plaintiff waited for
seven long years because the documents were to be
secured would be hard to believe, since the only document
that was to be secured was a 11E sketch which, by no
stretch of imagination, requires seven years to secure.
19. In my view, having regard to the evidence on record,
it is clear that the entire transaction, as rightly concluded
by the Trial Court, was a loan transaction and there was
no intention of Ramanagouda to sell the property and as
such, the findings of the Trial Court that Neelamma was
not entitled for specific performance cannot be found fault
with.
20. However, as regards the refund of sum of
Rs.11,00,000/- is concerned, Ramanagouda contends that
he had repaid not only the principal but also the interest at
three percent per month. However, there is no credible
evidence produced to indicate that the entire money
received by him had been repaid along with interest.
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21. Even if the close relationship is taken into
consideration, having regard to the fact that Neelamma
had obtained a document from Ramanagouda to have a
record of the transaction of payment of Rupees Eleven
lakhs, it is quite but natural that Ramanagouda would also
have maintained clear records indicating the repayment of
the said sum. Since there is admittedly no documents to
establish the repayment of the amount, the Trial Court
was justified in coming to the conclusion that the
repayment of the sums by Ramanagouda had not at all
been proved and it was therefore justified in directing the
refund of a sum of Rs.11,00,100/-.
22. The Trial Court has also awarded interest at twelve
per cent per annum from the date of the Agreement of
Sale i.e., 01.09.2008 till its realisation.
23. It has to be borne in mind that even according to
Ramanagouda, this land was taken for construction of a
barrage, which ultimately would result in enhancement of
his lands' value and its yield. It was therefore essentially
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C/W RFA No. 200069 of 2017
a commercial transaction. If a person were to borrow a
huge sum of Rs.11,00,000/- with the ultimate objective of
ensuring a higher yield or higher income for himself, in my
view, it would be appropriate to treat the entire
transaction as a commercial transaction and award
interest at fifteen per cent per annum, as against twelve
per cent per annum awarded by the Trial Court.
24. In the result, the first appeal filed by Neelamma
challenging the refusal of the Trial Court to decree her suit
for specific performance is allowed in part with costs.
The appeal against the refusal to grant a decree of specific
performance is dismissed but the direction to pay interest
at twelve percent per annum is modified and enhanced to
fifteen percent per annum.
25. The suit filed by Ramanagouda challenging the
judgment of the Trial Court directing Ramanagouda to
refund Rs.11,00,000/- is dismissed.
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C/W RFA No. 200069 of 2017
26. As stated above, the decree of the Trial Court is
modified only in relation to the grant of interest and as
against twelve per cent per annum awarded by the Trial
Court, interest at fifteen per cent per annum is awarded.
27. Ramanagouda would, therefore, be liable to refund
Rs.11,00,000/- with interest at fifteen per cent per annum
from the date of filing of the suit till realisation, along with
costs, within a period of three months from the date of
receipt of a copy of this judgment.
Sd/-
JUDGE
RK/-
CT: M
