Sri H Devaraj vs Smt Farkunda
2024 Latest Caselaw 10325 Kant

Karnataka High Court

Sri H Devaraj vs Smt Farkunda on 15 April, 2024

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                                                     NC: 2024:KHC:14848
                                                    RFA No. 378 of 2011




                IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                      DATED THIS THE 15TH DAY OF APRIL, 2024

                                       BEFORE
                THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
                     REGULAR FIRST APPEAL NO. 378 OF 2011 (SP)
              BETWEEN:


              SRI H DEVARAJ,
              S/O H BASAVARAJAPPA,
              AGED ABOUT 53 YEARS,
              R/O SWAMY NIVAS,
              2ND CROSS, 1ST MAIN,
              BASAVESHWARA NAGAR,
              SHIVAMOGGA CITY.
                                                            ...APPELLANT
              (BY SRI B S PRASAD, ADVOCATE)

              AND:

              SMT FARKUNDA,
              W/O DASTAGIR SAB,
              AGED ABOUT 43 YEARS,
Digitally     R/O OPP. NGO CLUB,
signed by C   KEB CIRCLE, SHIVAMOGGA CITY.
HONNUR SAB
Location:                                                 ...RESPONDENT
HIGH COURT
OF            (BY SRI P N HARISH, ADVOCATE)
KARNATAKA

                     THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST
              THE JUDGMENT AND DECREE DATED 01.12.2010 PASSED IN
              O.S.402/2006 ON THE FILE OF THE I-ADDL. SENIOR CIVIL JUDGE
              AND CJM, SHIVAMOGA, DISMISSING THE SUIT FOR THE SPECIFIC
              PERFORMANCE.

                     THIS APPEAL COMING ON FOR FURTHER HEARING THIS
              DAY, THE COURT DELIVERED THE FOLLOWING:
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                                             NC: 2024:KHC:14848
                                           RFA No. 378 of 2011




                          JUDGMENT

1. This appeal is arising from the judgment and decree

passed in O.S.No.402/2006 on the file of I Additional Senior

Civil Judge, Shivamogga (for short `trial Court').

2. The suit is one for specific performance of the

contract. The execution of the Agreement for Sale dated

16.06.2006 by the defendant in favour of the plaintiff is not in

dispute. In terms of the said Agreement for Sale dated

16.06.2006, the defendant agreed to sell the suit schedule

property measuring 20 guntas in Survey No.141/1, situated at

Navule Village, Taluk Shivamogga, for a valuable consideration

of a sum of Rs.12,63,240/-. The Agreement further reveals that

the plaintiff on the said date paid a sum of Rs.2 lakhs as

advance sale consideration to the defendant. The Agreement

further reveals that the land is located in the Green Belt area

and the defendant was required to file necessary application for

conversion of the land for residential use, and thereafter the

property had to be sold to the plaintiff and the plaintiff was

required to pay the balance sale consideration amount to the

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defendant. Two months was fixed under the Agreement to

complete the transaction.

3. The plaintiff issued a notice dated 01.08.2006 i.e.,

before the expiry of two months, calling upon the defendant to

execute the registered Sale Deed. The defendant replied to the

said notice expressing willingness to execute the Sale Deed in

favour of the plaintiff. However, the suit is filed on 07.12.2006

seeking the specific performance of the contract on the premise

that the defendant did not come forward to sell the property by

getting the land use converted.

4. The plaintiff has averred that he is ready and willing

to perform his part of the contract and in the alternative, the

plaintiff has claimed the refund of the advance sale

consideration of Rs.2 lakhs and also claimed the damages to

the tune of Rs.10,63,240/- and future interest at the rate of

15% per annum on the amount claimed from the date of suit

till the realisation of entire amount.

5. The defendant resisted the suit and took up a stand

that the plaintiff was not ready and willing to perform his part

of the contract despite her willingness to perform the contract.

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The defendant urged that she was willing to sell the property

and she has replied to the notice stating about her willingness

to sell the property after receiving the balance sale

consideration. It is also the case of the defendant that the suit

is not filed immediately after the expiry of the months

mentioned in the agreement, as such, the plaintiff is not

entitled to the relief of specific performance.

6. On the issue relating to readiness and willingness to

perform his part of the contract, the trial Court has recorded a

finding that the plaintiff has failed to establish his readiness and

willingness to perform his part of the contract. Accordingly,

dismissed the suit for specific performance of the contract as

well as the claim for damages however, has granted the relief

of refund of the advance sale consideration amount of

Rs.2 lakhs along with 6% interest per annum from the date of

judgment till its repayment.

7. Being aggrieved by the aforementioned judgment

and decree passed by the trial Court, the plaintiff is in appeal.

Learned counsel appearing for the plaintiff/appellant would

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contend that the trial Court erred in not granting the decree for

specific performance.

8. There is a Notification published prior to the

Agreement of Sale, wherein Navule village is notified as a

smaller urban area. This being the position, there was a need

to apply for removing the suit land from the Green Belt area.

However, the trial Court has erred in holding that in view of

the Notification, the plaintiff could have purchased the property

without conversion. It is the submission of learned counsel for

the appellant that merely because the land is notified as a

smaller urban area, that does not mean that all the lands

located in the said village are outside the Green Belt area.

9. It is also his further submission that in the notice,

as well as in the plaint, the plaintiff has clearly stated that he is

ready and willing to perform his part of the contract and has

the capacity to pay the balance sale consideration. Thus, the

readiness and willingness could have been easily inferred. He

further submitted that the suit is filed within three years from

the date of cause of action. The trial Court should have held

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that the plaintiff was ready and willing to perform his part of

the contract.

10. In the alternate, the learned counsel for the

appellant/plaintiff would also contend that assuming that the

plaintiff has not made out a case for grant of specific

performance, the trial Court has erred in not considering his

plea for damages of Rs.10,63,240/- as pleaded in the plaint.

It is his further submission that the default on the part of the

defendant has been clearly established in the case, wherein the

defendant who was required to file an application for

conversion of land, did not file any application for such

conversion. Thus, when the defendant is in default, the trial

Court should have awarded the damages.

11. Learned counsel appearing for respondent/

defendant would contend that there is a clause in the

Agreement for Sale that the property is to be sold after it is

taken out of the Green Belt area. In view of the Notification

published by the Government, the village in which the land is

located is notified as a smaller urban area, and that would

mean that the land does not fall within the ambit of the Green

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Belt area. Thus, there was no need for the defendant to file an

application for the conversion of land from a Green Belt area to

a residential area. It is also his submission that the plaintiff

has not come forward to purchase the property despite the

defendant stating in her reply notice that she is willing to sell

her property to the plaintiff after the receipt of the balance sale

consideration amount. Thus, he would contend that the trial

Court is justified in holding that the plaintiff has not proved his

readiness and willingness to perform his part of the contract.

12. This Court has considered the contentions raised at

the Bar and perused the materials placed before the Court.

13. The following points arise for consideration.

(a) Whether the plaintiff/ appellant has established that he was ready and willing to perform his part of the contract.

(b) Whether the land could have been sold without the change of the land use in view of notification notifying the land as falling within the limits of smaller urban area.

(c) In the alternative whether the plaintiff/ appellant has established that defendant being the defaulter he is entitled to damages.

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14. The execution of the Agreement of Sale dated

16.06.2006 is admitted. It is also seen from the records that

the Agreement stipulates that the transaction has to be

completed within two months from the date of the Agreement.

Admittedly, the plaintiff has issued a notice before the expiry of

two months to the defendant calling upon the defendant to

execute the Sale Deed after receiving the balance sale

consideration. To this notice, the defendant replied that she

was willing to sell the property to the plaintiff. Admittedly, this

reply is served on the plaintiff. However, what is to be noticed

is there is a clause in the agreement which stipulates that the

land has to be taken out from the Green Belt Area and the land

use has to be changed. It is forthcoming from the records that

the defendant has not moved an application for conversion of

land. The defendant is a defaulter in this regard. Thus, the

reply sent by the defendant that she is willing to perform her

part of the contract without conversion of the land does not

come to the aid of the defendant.

15. It is also relevant to note as to what the plaintiff did

after receipt of the reply sent by the defendant agreeing to sell

the suit property is not forthcoming from the pleadings, as well

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as in his evidence. The plaint averments do not disclose as to

what steps the plaintiff has taken to get the Sale Deed

registered in his favour when the defendant has expressed her

willingness to execute the Sale Deed in favour of the plaintiff.

16. Though the learned counsel for the plaintiff would

urge that the plaintiff was ready to purchase the property,

provided the land was taken out of the Green Belt area and was

converted for residential use, the evidence on record do not

support such a stand. There is no material to hold what

transpired between in the six months from the date of receipt

of reply by the plaintiff and the date of filing the suit.

17. In addition to the above, it is also required to be

noted that, apart from making a statement in the plaint and the

notice issued prior to the filing of the suit that the plaintiff is

ready and willing to perform his part of the contract, no

evidence is placed by the plaintiff to substantiate his plea raised

in the plaint. It is also required to be noticed that under the

Agreement of Sale dated 16.06.2006, the plaintiff was required

to pay Rs.12,63,240/-. He has paid only a sum of Rs.2 lakhs

towards advance sale consideration. The agreement also

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provides that the plaintiff has to spend an amount of

Rs.45,000/- for conversion of the land and the same has to be

deducted from the balance sale consideration to be paid. Thus,

the plaintiff was required to pay a sum of Rs.10,18,240/-.

18. It is a settled position of law that the plea relating

to readiness and willingness must be taken in a pleading and

that has to be demonstrated and proved. In the present case,

except for taking a plea in the plaint, there is nothing on record

in the form of acceptable evidence to hold that the plaintiff has

the ability to pay the balance sale consideration of a sum of

Rs.10,63,240/-. However it is also true that the capacity of the

plaintiff to pay the balance consideration amount is not

disputed by the defendant. However the relief of specific

performance being discretionary, the Court can certainly insist

on higher degree of proof in this regard. In the facts obtained

in this case, this Court is of the view the plaintiff has not

placed to materials to hold with certainty, that he was ready

and willing to perform his part of the contract. At the same

time it is equally true that this Court is not in a position to give

a definite finding that the plaintiff was not at all ready and

willing to perform his part of the contract after the receipt of

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the reply notice by the defendant. Thus, for this reason this

Court is of the view that the plaintiff is not entitled to

discretionary relief of specific performance.

19. Though, it is urged by the learned counsel for the

defendant/respondent that in view of the Notification published

in the year 1995, the suit property did not fall in the Green Belt

area, said plea cannot be accepted, said Notification, which is

produced before the trial Court at the time of final arguments

would only reveal that the village in which the said property is

relocated is part of a smaller urban area. That does not

automatically mean that the land is not coming within the

Green Belt area. The evidence placed on record would indicate

that the land in question was a part of the Green Belt area

there was a need for conversion of the land and the defendant

was required to file the necessary application for conversion of

the said land from the Green Belt area to a residential area.

20. Admittedly, the defendant has not filed any such

application. Thus, the defendant is in default in performing the

obligation cast on him under the Agreement. Since the default

on the part of the defendant is admitted and also the damages

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are claimed by the plaintiff, this Court is of the view that the

plaintiff has made a case to consider his plea relating to

damages.

21. Since the Agreement clearly states that the

defendant is required to file an application for conversion of the

land for its use as a residential area, that omission on the part

of the defendant would give a cause of action for the plaintiff to

claim damages.

22. The value of the land has shot up phenomenally

since the suit. The defendant is the beneficiary of his default.

Thus she needs to share some portion of it with the plaintiff as

he has made out a case that the defendant defaulted in

complying the obligation under the agreement. This Court while

accepting the plea for damages has taken into consideration

the fact that the agreement is proved and the plaintiff has

issued the notice to the defendant calling upon the defendant

to execute the sale deed within the time stipulated in the

agreement. However before execution of the sale deed

something was required to be done by the defendant, which the

defendant did not do. Had it been done whether the plaintiff

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would have come forwarded for registration of the sale deed

with balance amount is something which cannot be decided.

23. The plaintiff had claimed damages of

Rs.10,63,240/-. This is in addition to a refund of Rs.2 lakhs

paid by the plaintiff, which is advance sale consideration. Since

the damages claimed by the plaintiff is 10,63,240/- which is

equivalent to the balance consideration amount to be paid, this

Court does not find it difficult to assess the damages and the

plaintiff is entitled to damages for the same sum.

24. Further, in so far as interest awarded by the trial

Court on the refund of the advance sale consideration is

concerned, this Court is of the view that it is on the lower side.

The same requires to be enhanced to 9% per annum from the

date of the payment made by the plaintiff, till its realisation.

25. Accordingly, the impugned judgment and decree

passed by the trial Court require interference.

26. Hence, the following:

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                                               NC: 2024:KHC:14848





                           ORDER

(i)     The appeal is allowed in part.


(ii)    The judgment and decree dated 01.12.2010,

passed by I Additional Senior Civil Judge, Shivamogga, in O.S. No.402/2006 are modified and the suit of the plaintiff is decreed in part

(iii) The plaintiff is entitled to a sum of Rs.10,63,240/- towards damages, with interest at the rate of 9% per annum from the date of filing of the suit till the date of realisation of the entire amount.

(iv) The plaintiff is also entitled to refund of Rs.2 lakhs of advance consideration amount along with interest at the rate of 9% per annum from the date of the suit sale agreement till its realisation.

(v) If the defendant has already paid Rs.2 lakhs along with 6% interest as awarded by the trial Court, the defendant shall deposit the balance interest at the rate of 3% on Rs.2 lakhs from the date of the sale agreement till the date of deposit said to have been made by the defendant.

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(vi) The appellant/plaintiff is also entitled to proportionate cost.

Draw a modified decree accordingly.

Sd/-

JUDGE

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