Karnataka High Court

Sri Senniyappan vs Sri M P Nanda Kumar on 16 June, 2023

Bench: P.S.Dinesh Kumar, C.M. Poonacha

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 16TH DAY OF JUNE, 2023

                       PRESENT

      THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR

                         AND

       THE HON'BLE MR. JUSTICE C.M. POONACHA

              R.F.A. No.6 OF 2014 (SP)

BETWEEN:

SRI SENNIYAPPAN
AGED ABOUT 67 YEARS
S/O S R KUMARAPPA GOUNDER
NO 1631, MADHAVA ROAD
ROBERTSONPET K
KOLAR GOLD FIELDS 563 122
                                          ... APPELLANT
(BY SRI PUTHIGE R RAMESH, SENIOR COUNSEL FOR
    SMT LAKSHMI S HOLLA, ADVOCATE)

AND

1 . SRI M P NANDA KUMAR
    AGED ABOUT 51 YEARS
    S/O G PERUMAL
    OPP TO TELEGRAPH OFFICE,
    2ND CROSS, ROBERTSONPET
    K.G.F. 563 122

2 . SMT G C RAJALAKSHMI
    AGED ABOUT 51 YEARS
    W/O M P NANDA KUMAR
    OPP TO TELEGRAPH OFFICE,
    2ND CROSS, ROBERTSONPET
    K.G.F. 563 122
                            2




3 . SRI N VINOD KUMAR
    AGED ABOUT 33 YEARS
    S/O M P NANDA KUMAR
    OPP TO TELEGRAPH OFFICE,
    2ND CROSS ROBERTSONPET
    K.G.F. 563 122

4 . SRI N VIKRAM
    AGED ABOUT 29 YEARS
    S/O M P NANDA KUMAR
    OPP TO TELEGRAPH OFFICE,
    2ND CROSS ROBERTSONPET
    K.G.F. 563 122

5 . SMT N DEEPA
    AGED ABOUT 31 YEARS
    W/O G C ARUMUGAM
    NO 3 GOVINDAMMAL STREET
    VELACHALAM NAGAR
    SEVILMEDU POST
    KANCHIPURAM
    TAMIL NADU 631 502

6 . SRI K SHANKAR
    AGED ABOUT 46 YEARS
    S/O LATE KANNAIAH CHETTY
    'O' DANIEL ROAD,
    ANDERSONPET
    K.G.F. 563 114

                                          ...RESPONDENTS
(BY SRI K PRABHAKARA, ADVOCATE FOR R2 TO R5(ABSENT)
    SRI RAVI L VAIDYA, ADVOCATE FOR C/R6 (ABSENT)
    V/O DATED 14.1.2016 R1 DECEASED
    R2 TO R5 ARE TREATED AS LRs OF R1)

     THIS RFA IS FILED U/O-41, RULE-1 R/W SEC.96 OF CPC,
AGAINST THE JUDGMENT AND DECREE DATED 11.11.2013
PASSED IN O.S NO.14/2009 ON THE FILE OF THE ADDL.
SENIOR CIVIL JUDGE, K.G.F., PARTLY DECREEING THE SUIT
FOR SPECIFIC PERFORMANCE AND ETC.
                               3




     THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 05.04.2023, COMING ON FOR PRONOUNCEMENT
OF JUDGMENT, THIS DAY, POONACHA J., DELIVERED THE
FOLLOWING:


                        JUDGMENT

The above first appeal is filed by the Plaintiff under

Order XLI Rule 1 read with Section 96 of the Code of Civil

Procedure, 1908 (hereinafter referred to as the 'CPC')

challenging the judgment and decree dated 11.11.2013

passed in OS No.14/2009, whereunder the suit filed by the

Plaintiff for specific performance has been partly decreed

and the alternative prayer sought i.e., for refund of money

has been granted directing the Defendant Nos.1 to 5 to

refund the earnest money of `10 lakhs together with

interest at 24% p.a., from the date of Agreement till date

of payment. The above appeal is filed, aggrieved by non

granting of the relief of specific performance by the Trial

Court.

2. For the sake of convenience, the parties herein

are referred as per their rank before the Trial Court.

3. The facts of the case in brief necessary for

consideration of the present appeal are that the Defendant

Nos.1 to 5 are the absolute owners of the suit property

and being desirous of selling the same, they had entered

into an Agreement of Sale dated 10.10.2008 with the

Plaintiff, whereunder the Plaintiff agreed to purchase the

suit property for a total sale consideration of `65,55,000/.

An advance of `10 lakhs was paid through cheque on the

same day and the balance sale consideration of

`55,55,000/- was to be paid by the Plaintiff at the time of

registration of the Sale Deed which was required to be

executed within three months.

3.1. It is the further case of the Plaintiff that the

time contemplated for completing the sale transaction was

extended at the request of Defendant Nos.1 to 5 and

endorsements regarding the said extensions were made on

the Agreement of Sale and accordingly the time was

mutually extended to 11.08.2009.

3.2. That the Plaintiff was ready and willing to

perform his part of the contract and pay the balance sale

consideration. That since Defendant Nos.1 to 5 were

avoiding on one pretext or the other, the Plaintiff got

issued a legal notice dated 11.7.2009. However, the said

legal notice was not served on Defendant Nos.1 to 5.

Hence, the Plaintiff filed the suit seeking for the following

reliefs:

"a. Specific performance of contract dated 10-10- 2008 directing the defendant No's 1 to 6 to execute Registered Sale Deed infavour of the plaintiff in respect of the schedule property by receiving a balance consideration amount of Rs. 55,55,000/- from the plaintiff before the Sub-Registrar Office at Bangarpet, at the time of registration at the cost and expenses of the plaintiff.

b. In case of defendants failure to execute the Sale Deed as ordered by this Hon'ble court the same may be done through the machinery of this Hon'ble court.

c. Alternatively, the defendants No. 1 to 6 shall be directed to re-pay a sum of Rs. 10,00,000/- received as advance amount on 10-10-2008 along with interest at 24% per annum from the date of agreements dated 10-10-2008 till realization of the amount along with court cost.

d. For the court cost and for grant of any other reliefs that this Hon'ble court deems fit to grant in the nature and circumstances of the case."

3.3. During the pendency of the suit, the Plaintiff

amended the plaint and paragraphs 5(a) to (d) were

inserted wherein it is averred that Defendant Nos.1 to 5

illegally sold the suit property on 19.8.2009 and the

subsequent purchaser was impleaded as Defendant No.6 in

the suit.

4. The Defendants entered appearance and filed

their written statement contesting the case of the Plaintiff.

4.1. Defendant Nos.1 to 5 in their written

statement have denied the case of the Plaintiff and that

they were desirous of selling their property to the Plaintiff

as well as the alleged extensions of time. The Defendants

have averred various circumstances leading to the

Agreement of Sale. The case of the Plaintiff has been

denied in detail including his readiness and willingness to

complete the sale transaction. However, the sale made to

Defendant No.6 is averred.

4.2. Defendant No.6 in his written statement has

denied the case putforth by the Plaintiff and further,

specifically averred that the suit of the Plaintiff is barred by

time. It is the further case of Defendant No.6 that he is

not aware of the transaction between the Plaintiff and

Defendant Nos.1 to 5. That he had purchased the suit

property by paying a total sale consideration of `67 lakhs

although the sale consideration mentioned in the

registered Sale Deed dated 19.8.2009 was `12,48,000/-.

That after purchase of the suit property, he has been in

possession of the property as an absolute owner, got the

katha changed in his name and has obtained a plan

approval to put up construction.

5. Based on the pleadings filed by the parties, the

Trial Court framed six issues. The Plaintiff examined

himself as PW.1, a witness as PW.2 and marked Exs.P1 to

P11 in evidence. Defendant No.4 was examined as DW.1.

Defendant No.6 examined himself as DW.2. The

witnesses to the sale transaction between Defendants

got examined as DWs.3 and 4. Exs.D1 to D14 were

marked in evidence. The Trial Court by its judgment and

decree has passed the following order:

"The suit of the plaintiff is partly decreed with costs.

The suit of the Plaintiff for the relief of specific performance of contract is dismissed.

The suit of the Plaintiff for the alternative relief is decreed. The defendant No.1 to 5 are hereby directed to refund the earnest money of Rs.10,00,000/- (Rupees Ten Lakhs) along with interest at 24% per annum from the date of agreement till the date of payment.

Two months time is granted to defendant No.1 to 5 to refund the amount as ordered above. In default defendant No.1 to 5 has to pay penal interest of 6% per annum till payment.

Draw decree accordingly."

6. Sri Puttige R Ramesh, learned Senior Counsel

for the Appellant/Plaintiff contended:

i) That the Trial Court erred in not ordering for

specific performance of the Agreement dated

10.10.2008;

ii) That the Plaintiff had specifically averred and

also stated in evidence that he was ready and

willing to pay the balance sale consideration;

iii) That the Plaintiff was required to deposit the

balance sale consideration only if it was

ordered by the Court to do so and he would

have complied with the said order;

iv) That Defendant No.6 being the subsequent

purchaser is not entitled to contest the suit of

the Plaintiff regarding execution of the

Agreement of Sale dated 10.10.2008.

7. In support of his contentions, the learned

Senior Counsel relied upon the following judgments:

1. Basavaraj v. Padmavathi and Another1

2. Boramma v. Krishna Gowda and Others2

3. Azhar Sultana v. B Rajamani and Others3

4. Bhavyanath v. K.V. Balan4

2023 SCC OnLine SC 10

(2000) 9 SCC 214

(2009) 17 SCC 27

(2020) 11 SCC 790

5.Kanhayalal Hukumatrai Banawani and Others v. Keshav Shankar Ranade and Others5

6. Kasturi v. Iyyamperumal and Others6

7. Ramesh Chandra Chandiok and another v.

Chuni Lal Sabharwal and Others7

8. The Trial Court, based on the pleadings of the

parties framed the following issues:

"1. Whether Plaintiff proves that defendant No.1 to 5 had executed an agreement to sale dated 10/10/2008 and received Rs.10 Lakhs and agreed to sell it for 55 Lakshs 55 Thousand as stated in para 2 of the plaint ?

2. Whether Plaintiff is ever ready and willing to perform his part of contract?

3. Whether defendants No.1 to 5 proves that Plaintiff was not ready and willing to perform his part of contract for the reasons stated in para 10 of the written statement?

4. Whether the defendants No.6 proves that he is the bonafide purchaser?

5. Whether plaintiff is entitled relief's as prayed?

6. What order or decree?"

ILR 2003 KAR 3443

(2005) 6 SCC 733

AIR 1971 SC 1238

9. The Trial Court answered issue Nos.1 and 3 in

the affirmative and issue No.2 in the negative. Issue No.5

was answered partly in the affirmative and issue No.4 as

not arising for consideration.

10. Having regard to the fact that the Trial Court

has recorded a finding that the Plaintiff has proved the

execution of the Agreement of Sale dated 10.10.2008,

there is no necessity to re-appreciate the material on

record with regard to execution of the Agreement.

11. Having regard to the submissions made by the

learned Senior Counsel for the Appellant/Plaintiff, the

question that arises for consideration is:

Whether the Trial Court was justified in refusing to

order for specific performance of the Agreement

dated 10.10.2008?

12. The Plaintiff at para 3 of the plaint has

specifically averred that he was always ready and willing to

perform his part of the contract and pay the balance sale

consideration of `55 lakhs. At para 3 of the affidavit by

way of examination-in-chief of PW1 - Plaintiff he has

averred that he was ready and willing to pay the balance

sale consideration of `55 lakhs. PW1 admits in his cross-

examination that he did not have any documents to

demonstrate that he had the balance sale consideration to

complete the sale transaction.

13. The Defendant Nos.1 to 5 at paras 3 and 10 of

their written statement have specifically denied that the

Plaintiff was ready and willing to pay the balance sale

consideration and complete the sale transaction. DW1 at

para 4 of his affidavit by way of examination-in-chief has

also deposed that the Plaintiff was not ready and willing.

14. It is relevant to note that the Plaintiff has not

produced any documentary evidence with regard to his

financial ability to pay the balance sale consideration of

`55 lakhs. The Plaintiff has not examined any witness to

demonstrate that he was ready and willing to pay the

balance sale consideration.

15. PW.2 is a witness to the Agreement of Sale

dated 10.10.2008 and he has only deposed about the fact

of execution of the said Agreement and Defendant Nos.1

to 5 having received the advance amount. PW.2 has

identified the signatures of Defendant Nos.1 to 5 in the

said Agreement.

16. Section 16(c) of the Specific Relief Act, 1963

(hereinafter referred to as the 'Act'), States as follows:

"16. Personal bars to relief.--Specific performance of a contract cannot be enforced in favour of a person--

(a) ...........

(b) ..........

(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.

Explanation.--For the purposes of clause (c),--

(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction."

17. In the case of U.N.Krishnamurthy (since

deceased) Thr. Lrs Vs. A.M.Krishnamurthy8 the

Hon'ble Supreme Court considering readiness and

willingness in a suit for specific performance has held as

follows:

"21. It is well settled that, in a suit for Specific Performance of an agreement, it is for the Plaintiff to prove his readiness and willingness to perform his obligations under the agreement. Where a certain amount has been paid in advance and the balance is required to be paid within a stipulated time, it is for the Plaintiff to show that he was in a position to pay the balance money. The Plaintiff has to prove that he has the money or has alternatively made necessary arrangements to get the money. In this case, the Original Defendant/Appellants have all along contended that the Plaintiff Respondent neither offered to pay nor was in a position to pay the balance consideration of Rs.15,00,000/-

24. Section 16 (c) of the Specific Relief Act, 1963 bars the relief of specific performance of a contract in favour of a person, who fails to aver and prove his readiness and willingness to perform his part of contract. In view of Explanation (i) to clause (c) of Section 16, it may not be essential for the plaintiff to actually tender money to the

Civil Appeal No.4703/2022 dtd: 12.07.2022 , Supreme Court of India.

defendant or to deposit money in Court, except when so directed by the Court, to prove readiness and willingness to perform the essential terms of a contract, which involves payment of money. However, explanation (ii) says the plaintiff must aver performance or readiness and willingness to perform the contract according to its true construction."

(emphasis supplied)

18 . Having regard to the settled proposition of law

as noticed above, the Plaintiff is required to plead and

prove his readiness and willingness to complete the sale

transaction. The Plaintiff was required to demonstrate that

he had the necessary funds at his disposal or had the

capacity to raise the balance sale consideration to pay the

same to the defendants.

19. The learned Senior Counsel for the

Appellant/Plaintiff has relied upon the judgment of the

Hon'ble Supreme Court in the case of Basavaraj1 to

contend that the Plaintiff need not demonstrate that he

has sufficient money to pay the balance sale consideration

and that no adverse inference can be drawn on his failure

to produce any document.

19.1 The facts in the case of Basavaraj1 are

entirely different from the facts of the present case as in

the said case, the suit for specific performance of the

Agreement of Sale was decreed by the Trial Court holding

that the Plaintiff was ready and willing to perform his part

of the contract. The High Court considering the appeal

filed by the owners of the property, allowed the same and

set aside the judgment and decree passed by the Trial

Court mainly on the ground that the Plaintiff was not ready

and willing to perform his part of the contract. The

Hon'ble Supreme Court, noticed the fact situation wherein

the Plaintiff had examined two witnesses, PWs.2 and 3,

who were attestors to the Agreement of Sale who had also

specifically stated that the Plaintiff had approached the

Defendants and asked them to accept the balance sale

consideration in cash, to which there was no cross-

examination. Considering the said facts and after referring

to its earlier judgments rendered in the cases of Ramrati

Kuer v. Dwarika Prasad Singh9 and India Kaur v.

(1967) 1 SCR 153

Sheo Lal Kapoor10, the Hon'ble Supreme Court set aside

the judgment of the High Court and restored the judgment

and decree passed by the Trial Court ordering for specific

performance and to do complete justice directed the

Plaintiff to pay further amount of `10 lakhs within a period

of two weeks.

19.2. The facts in the case of Basavaraj1 are

entirely different from the facts of the present case in view

of the fact that the Plaintiff did not adduce any evidence

either oral or documentary to demonstrate that he was

ready and willing to pay the balance sale consideration in

order to complete the sale transaction.

20. The learned Senior Counsel for the Appellant-

Plaintiff relied on the judgment of the Hon'ble Supreme

Court in the case of Boramma2 to contend that the

Plaintiff was not required to actually tender money to the

Defendant or deposit in Court. The said case will not aid

the case of the Plaintiff in as much as the Hon'ble Supreme

(1988) 2 SCC 488

Court noticed that there was a concurrent finding of fact

regarding readiness and willingness to perform the

contract and did not interfere with the same.

21. The judgment relied upon by the Plaintiff in the

case of Azhar Sultana3 will not aid the case of the

Appellant having regard to the fact that in the said case a

finding of fact was recorded by the High Court that the

Plaintiff was ready and willing to complete the transaction

taking note of a telegraphic notice (Ex. A-3) wherein the

readiness and willingness on the part of the Plaintiff was

conveyed. In a challenge to the same, the Hon'ble

Supreme Court held that it was not necessary to deposit

the entire sale consideration.

22. The judgment of the Hon'ble Supreme Court in

the case of Bhavyanath4 will not aid the case of the

Appellant in view of the fact that Trial Court recorded a

finding that the Plaintiff was having capacity to raise the

balance consideration which was set aside by the High

Court. The Hon'ble Supreme Court noticing that the

Plaintiff had produced sufficient material to demonstrate

that he had sufficient funds at his disposal, interfered with

the said finding and decreed the suit for specific

performance.

23. The judgment in the case of Kanhayalal

Hukumatral Banawani5 is not necessary to be

considered in the present appeal since in the said case it

was held that without cancelling the agreement, a party to

it could not execute a Sale Deed in favour of a third

Person. The said aspect would arise for consideration only

if a finding is recorded that the Plaintiff had proved his

readiness and willingness to complete the sale transaction.

24. The judgment of the Hon'ble Supreme Court in

the case of Kasturi6 is also not necessary to be

considered in the present appeal since in the said case the

Hon'ble Supreme Court considered the right of a third

party to contest a suit for specific performance.

25. The judgment of the Hon'ble Supreme Court in

the case of Ramesh Chandra Chandiok7 is not

necessary to be considered in the present appeal since in

the said case, the subsequent purchaser was directed to

join in execution of the Sale Deed in favour of the Plaintiff.

26. The Trial Court, considering issue No.2 with

regard to readiness and willingness has, after noticing the

settled position of law has recorded the findings of fact:

i) That PW.1 - Plaintiff in his cross-examination

has admitted that he has not produced any

material to demonstrate that he had the

balance sale consideration after the Agreement

of Sale till the date when the Sale Deed was

required to be registered;

ii) That the Plaintiff has not produced bank

statement or a copy of Demand Draft to

substantiate that he was ready and willing to

pay the balance sale consideration;