Karnataka High Court
Sri Ganesh Rao vs H N Sheshadri on 20 February, 2024
Author: Ravi V Hosmani
Bench: Ravi V Hosmani
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RSA No. 622 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE RAVI V HOSMANI
REGULAR SECOND APPEAL NO. 622 OF 2014 (SP)
BETWEEN:
SRI GANESH RAO,
S/O M. SANTHOJI RAO,
AGED ABOUT 54 YEARS,
R/O CHANNAPPA LAYOUT,
SAVALANGA ROAD,
SHIVAMOGGA - 577 201.
...APPELLANT
(BY SRI PRASAD B.S., ADVOCATE)
AND:
1. H.N. SHESHADRI,
S/O LATE H.S. JOIS,
AGED ABOUT 58 YEARS,
R/O 7TH CROSS, VIDYANAGAR EXTENSION,
SHIVAMOGGA - 577 201.
2. H.R. VENKATESH,
S/O RAMAKRISHNAPPA,
AGED ABOUT 47 YEARS,
R/O HUNCHADAKATTE,
Digitally signed by
GEETHAKUMARI THIRTHAHALLI TALUK,
PARLATTAYA S SHIMOGA DISTRICT - 577 432.
Location: High
Court of Karnataka ...RESPONDENTS
(BY SRI S.V.PRAKASH, ADVOCATE FOR R1;
SRI H.C. SUNDARESH, ADVOCATE FOR R2)
THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE JUDGMENT
& DECREE DATED 16.01.2014 PASSED IN R.A.NO.35/2007 ON THE
FILE OF THE COURT OF THE I ADDITIONAL DISTRICT & SESSIONS
JUDGE AT SHIMOGA, DISMISSING THE APPEAL AND CONFIRMING
THE JUDGMENT AND DECREE DATED 10.08.2007 PASSED IN
O.S.NO.228/1998 ON THE FILE OF THE COURT OF THE II
ADDITIONAL CIVIL JUDGE (SR.DN.) AT SHIMOGA. TRAIL COURT
DECREED THE SUIT. APPELLATE COURT DISMISSED THE APPEAL
SUIT FOR SPECIFIC PERFORMANCE.
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RSA No. 622 of 2014
THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Challenging judgment and decree dated 16.01.2014
passed by I Addl. District & Sessions Judge, Shivamogga, in
R.A.no.35/2007 ('First Appellate Court') and judgment and
decree dated 10.08.2007 passed by II Addl. Civil Judge
(Sr.Dn.), Shivamogga, in O.S.no.228/1998 ('Trial Court'),
this appeal is filed.
2. Appellant herein was plaintiff, while respondents
herein were defendants in O.S.no.228/1998 and are referred to
as such herein.
3. O.S.no.228/1998 was filed by plaintiff seeking for
decree directing defendant no.1 to specifically perform
agreement of sale dated 19.05.1998 by executing registered
sale deed in respect of plaint schedule site and deliver vacant
possession thereof or alternatively directing defendant no.1 to
return Rs.1,50,000/- to plaintiff with interest at 18% p.a. etc.
In plaint, it was stated that plaintiff and defendant no.1 were
well known to each other. On 30.10.1995, defendant no.1 had
borrowed sum of Rs.20,000/- from plaintiff on security of
building/site no.11, situated at Vidyanagar Extension,
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Shivamogga, bearing Municipal Khata no.671/657/850
measuring 30 ft. X 50 ft. (suit property). It was stated that suit
property was purchased by defendant no.1 from
Smt.Lakshmamma, widow of one N.T.Sankappa. It was also
stated that defendant no.1 had agreed to pay monthly interest
at rate of Rs.2/- per Rs.100/-.
4. But, in year 1998, defendant no.1 joined by his wife
came to plaintiff several times requesting him to purchase site,
as they were badly in need of money. Plaintiff accepted offer,
as it was near to his agricultural lands. It was further stated
that after negotiation between parties, sale price of suit
property was fixed at Rs.1,75,000/-, wherein plaintiff intended
to adjust amount borrowed and interest payable thereon out of
total sale consideration. But after fervent pleading by defendant
no.1, interest payable was waived and plaintiff paid sum of
Rs.90,000/- in cash to defendant no.1, when he executed
agreement of sale on 19.05.1998, in presence of witnesses. An
agreement of sale incorporating above terms was executed on
19.05.1998. It was further stated that in July 1998, defendant
no.1 and his wife requested plaintiff for further sum of
Rs.40,000/- out of sale consideration on ground that they
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required it urgently. Thus, plaintiff had paid Rs.1,50,000/- out
of sale consideration of Rs.1,75,000/-.
5. It was further asserted that time was not essence of
contract and plaintiff had by letter dated 20.08.1998 sent by
RPAD, called upon defendant no.1 to complete agreement
within one week. It was stated that though same was not
received, defendant no.1 issued legal notice on 21.08.1998
seeking to rescind agreement of sale dated 19.05.1998
unilaterally. Immediately, plaintiff got issued reply notice on
16.09.1998 and called upon defendant no.1 to be present at
Office of Sub-Registrar, Shivamogga, on 05.10.1998 at 11:00
AM, received balance sale consideration of Rs.25,000/- and
complete agreement of sale dated 19.05.1998. It was further
stated that reply notice issued to defendant no.1 returned
unserved, but copy sent to counsel of defendant no.1 was
served on 17.09.1998. Plaintiff also got issued public notice on
16.09.1998 in Navika - Kannada Daily Newspaper informing
execution of agreement of sale in favour of plaintiff and
cautioning public against dealing with suit property.
6. It was further stated that defendant no.2 even
though aware of above transaction purchased suit property
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from defendant no.1 on 26.09.1998 by bloating sale
consideration of Rs.3,00,000/-. It was stated that said
transaction was not bonafide. But in meanwhile, defendant no.1
filed O.S.no.518/1998, which was not at all maintainable. It
was stated that cause of action for filing suit for plaintiff arose
on 21.08.1998 when defendant no.1 began interfering with suit
property. Hence suit was filed.
7. Upon service of suit summons, defendants filed
separate written statements. Defendant no.1 in his written
statement admitted borrowing Rs.25,000/- from plaintiff on
security of suit property on 30.10.1995, but on monthly
interest at 1.5% and not 2%. It was contended that plaint
averments were false and incorrect designed to suit plaintiff. It
was stated that present suit was filed after plaintiff had entered
appearance in O.S.no.518/1998 filed by defendant no.1. In said
suit defendant no.1 had sought mandatory injunction against
plaintiff herein for return of title deeds of suit property, in view
of termination of agreement of sale by defendant no.1. It was
stated that in said suit, defendant no.1 had deposited
Rs.65,000/- payable to plaintiff. To overcome same and as
after thought, present suit was filed by issuing notices
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subsequent to termination of agreement of sale. It was stated
that agreement was no more enforceable.
8. It was specifically stated that plaintiff - Ganesh Rao
was a professional money lender, while defendant no.1 was an
employee in Vysya Bank. Defendant no.1 had borrowed sum of
Rs.20,000/- from plaintiff by way of loan on monthly interest of
1.5% executing mortgage deed as security for loan. On same
day i.e. 30.10.1995, he borrowed another sum of Rs.20,000/-
on same rate of interest. Thus in all, total sum borrowed was
Rs.40,000/-. In third week of May, 1998, when plaintiff
demanded return of loan amount. It was stated at that time
defendant no.1 was negotiating for sale of suit property and
promised payment immediately after disposal of site, when
plaintiff himself came forward to purchase it. By calculating
sum of Rs.25,000/- as interest payable on Rs.40,000/-
borrowed, plaintiff calculated Rs.65,000/- as advance and
issued post-dated cheque for Rs.45,000/-, thereby showing
Rs.1,10,000/- as total advance sale consideration. It was stated
that a condition was also imposed that agreement was to be
performed within three months. It was stated that there was no
actual payment made on date of execution of agreement of
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sale. And that upon presentation, said cheque was dishonoured
due to insufficient funds. It was stated that same was informed
to plaintiff by issuing notice. Without replying to said notice,
plaintiff had shown entire amount of Rs.1,10,000/- as advance
paid and filed present suit. It was stated that plaintiff herein
was therefore, entitled for only Rs.65,000/- upon return of title
deeds of suit property and was not entitled for specific
performance.
9. In his written statement, defendant no.2 denied
executing agreement of sale as well as receipt of advance sale
consideration. Readiness and willingness on part of plaintiff as
well as default alleged against defendant no.1 were also
denied. It was specifically stated that defendant no.1 had sold
suit property to defendant no.2 for valuable sale consideration
of Rs.3,00,000/- and possession delivered. It was stated that
even khata was also issued in name of defendant no.2. It was
stated that defendant no.2 was an agriculturist and resident of
Humchadakatte in Theerthahalli Taluk and with intention of
having site in Shivamogga, purchased it by paying valuable
sale consideration after making bonafide enquiry. It was stated
that since date of purchase, defendant no.2 was in possession
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and allegation of clandestine transaction between Defendants
no.1 and 2 were denied. On contrary, it was alleged that
plaintiff had failed to perform his part of contract and was guilty
of breach. Therefore, at best, plaintiff was only entitled for
reimbursement of amount paid to defendant no.1 and not for
specific performance of alleged agreement of sale.
10. Based on pleadings, trial Court framed following:
ISSUES
1. Whether the plaintiff proves the agreement of sale
executed by D-1 for sale of plaint schedule
property in favour of plaintiff as pleaded in plaint
on 19.05.1998?
2. Whether plaintiff further proves payment of
consideration of Rs.90,000/- paid to defendant
no.1 under the suit agreement for sale?
3. Whether the plaintiff is entitled for specific
performance of the suit agreement?
4. Whether there is any cause of action for the suit?
5. What decree or order?
ADDITIONAL ISSUE
1. Whether the plaintiff alternatively entitle for
recovery of Rs.1,50,000/- with interest from the
defendant?
11. Thereafter, plaintiff examined himself and two other
witnesses PWs.1 to 3 and Exs.P1 to P21 were marked. In
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rebuttal, defendants no.1 and 2 were examined as DWs.1 and 2
and Exs.D1 to D17 were marked.
12. On consideration, trial Court answered issues no.1
and 4 in affirmative, Issue no.2 and addl. Issue partly in
affirmative, Issue no.3 in negative and Issue no.5 by decreeing
suit in part and directing defendant no.1 to pay Rs.65,000/- to
plaintiff.
13. Aggrieved by said judgment and decree, plaintiff
preferred R.A.no.35/2007, contending that trial Court had
wrongly assumed facts and arrived at incorrect conclusions.
And that it had ignored agreement in writing and further that
cheque for Rs.45,000/- was compensated by paying said
amount in cash, as consistently deposed by PWs 1 to 3. On
above grounds it was alleged that trial Court had erred in not
granting relief of specific performance.
14. Based on said contentions, first appellate Court
framed following points for consideration:
1. Whether the appellant/plaintiff has proved that
under Ex.P.1 he had paid an amount of Rs.1.5
lakhs to the defendant no.1?
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2. Whether the plaintiff/appellant has proved that he
has always been ready and willing to perform his
part of the contract?
3. Whether the judgment and decree of trial court
warrants interference?
4. What decree or order?
15. On consideration, it answered points no.1 to 3 in
negative and point no.4 by dismissing appeal and confirming
judgment and decree passed by trial Court. Against concurrent
findings, plaintiff is in appeal.
16. Sri B.S. Prasad, learned counsel for plaintiff
submitted that suit was filed for specific performance of
agreement of sale dated 19.05.1998, whereunder defendant
no.1 had agreed to sell suit property for total sale consideration
of Rs.1,75,000/- within three months, after receiving
Rs.1,10,000/- as advance sale consideration and agreeing to
receive balance amount on date of execution of absolute sale
deed. It was submitted that plaintiff had paid substantial
portion of sale consideration and was ever ready and willing to
perform his part of contract. It was submitted that prior to suit
plaintiff had got issued notice - Ex.P15 on 20.08.1998, calling
upon defendant no.1 to receive balance sale consideration of
Rs.25,000/- and to execute sale deed in respect of suit
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property. Upon failure, suit was filed. It was submitted though
defendant no.2 disputed agreement of sale - Ex.P1, defendant
no.1 accepted its execution. It was submitted that trial Court
had held agreement of sale as proved, while decreeing suit in
part. Said finding had attained finality as neither of defendants
had filed appeal. It was submitted that Exs.P1, P3 and P.5
established receipt of advance sale consideration by defendant
no.1 from plaintiff. Such being case, when Ex.P.1 does not refer
to payment of any portion of advance sale consideration by
cheque, both trial Court and first Appellate Court erred in
assuming that cheque for Rs.45,000/- was part of transactions
in pursuance of Ex.P.1. It was submitted that issuance of
cheque was part of totally different transaction unrelated to
agreement of sale. It was submitted that though period of three
months was stipulated in agreement of sale, defendant no.1
had not issued any notice before expiry of said term. It was
submitted that plaintiff had expressed readiness and willingness
to perform his part of contract by issuing notice at Ex.P.15.
Thus, when execution of agreement of sale and receipt of
advance sale consideration were established, trial Court and
first appellate Court erred in not granting decree for specific
performance, especially in absence of pleading or proof of
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hardship or escalation in value of property. It was submitted
when defendant no.1 admitted receipt of Rs.45,000/- covered
under cheque at Ex.D1, contention of said defendant that
plaintiff had not paid advance sale consideration as mentioned
in Ex.P.1 - agreement of sale would not carry any substance. It
was submitted that above aspects were not properly
appreciated either by trial Court or first appellate Court. Hence,
sought for framed substantial questions of law as proposed,
answer them in favour of plaintiff, modify judgment and decree
passed by both Courts by granting decree for specific
performance.
17. On other hand, Sri S.V. Prakash, learned counsel
appearing for defendant no.1 and Sri H.C. Sundaresh , learned
counsel for defendant no.2 sought to oppose appeal. It was at
outset contended that findings of trial Court and first appellate
Court regarding advance sale consideration by plaintiff to
defendant no.1 were findings of fact based on available
evidence and same could not be interfered with in second
appeal. It was contended that as per Ex.P.1 agreement of sale,
period of three months was stipulated for performance of
agreement of sale executed on 19.05.1998. As plaintiff did not
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issue notice or call upon defendant to perform his part of
contract, trial Court and first appellate Court would be fully
justified in presuming that plaintiff was not ready and willing to
perform his part of contract. Since defendant no.1 admitted
about borrowing Rs.40,000/- from plaintiff and Rs.25,000/- was
interest payable on said amount, Courts granted relief of refund
of advance sale consideration paid. It was also contended that
sale deed executed in favour of defendant no.2 was after
issuing notice of termination of agreement of sale. It was
submitted that said sum of Rs.65,000/- was deposited by
defendant no.1 in O.S.no.518/1998 filed seeking for mandatory
injunction directing plaintiff herein to return title deeds of suit
property and agreement of sale. Instead of receiving said
amount and returning original title deeds, plaintiff had filed
frivolous appeal. On above ground sought for dismissal of
appeal.
18. Heard learned counsel and perused records.
19. From above, it is seen that trial Court as well as
first appellate Court had held agreement of sale as proved, but
based on available evidence, held that only a sum of
Rs.65,000/- was paid as advance sale consideration. Reason
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assigned by trial Court for declining specific performance was
that Ex.D.1-Cheque was issued by plaintiff towards part of sale
consideration. It held dishonour of cheque was admitted by
plaintiff. It observed condition in Ex.P.1 stipulating period of
three months from agreement for payment of balance sale
consideration and for execution of sale deed. It held that
plaintiff failed to establish any attempt by him to pay balance
sale consideration and call upon defendant no.1 to execute sale
deed. It has held that only after expiry of said period, plaintiff
had issued notice. Failure to issue notice within stipulated
period of three months and cheque issued towards part of sale
consideration having been dishonoured, established that
plaintiff was not ready and willing to perform his part of
contract. Relying upon decision of Hon'ble Supreme Court in
M/s. P.R. Deb And Associates vs. Sunanda Roy, reported in
(1996) 4 SCC 423, it held failure of purchaser to make
payment within stipulated time would disentitle relief of specific
performance.
20. In appeal, first appellate Court after going through
deposition of PW-1 and PW-3 that as on date of agreement of
sale and subsequently at time of dishonour of Ex.D1 - Cheque,
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plaintiff did not have Rs.45,000/- in his Bank account,
proceeded to hold failure of plaintiff to prove readiness and
willingness and on said finding dismissed appeal confirming
judgment and decree passed by trial Court.
21. Admittedly, Ex.P1 - agreement of sale was executed
on 19.05.1998 agreeing to sell suit property for total sale
consideration of Rs.1,75,000/-. Perusal of Ex.P1 would indicate
that time limit of three months was stipulated for payment of
balance and execution of sale deed. It is not in dispute that
plaintiff did not make any efforts to inform defendant no.1
about he being ready with balance sale consideration and
calling upon defendant no.1 to come forward to receive balance
and execute sale deed. Ex.P15 - notice issued by plaintiff is
dated 20.08.1998, which would be after expiry of said period.
Even Exs.P15 and P16 - postal acknowledgments do not
indicate that notice was issued within stipulated period. Apart
from above, there is admission by plaintiff - PW-1 about
dishonour of Ex.D1 - Cheque due to insufficient funds. Even if
for sake of argument, issuance of said cheque were to be
presumed as towards sum other transaction not related to
agreement of sale, dishonour of cheque due to insufficient
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funds at relevant time would substantiate lack of readiness and
willingness on part of plaintiff.
22. Yet another important aspect is admitted fact about
defendant having issued notice of termination of agreement of
sale, i.e., Ex.P4 dated 21.08.1998, immediately after
completion of period of three months. In fact, plaintiff has
replied to said notice under Ex.P5 on 16.09.1998, which was
prior to filing of suit on 06.11.1998. Thus, plaintiff was aware
about action of defendant no.1 for termination of Ex.P1-
Agreement of Sale. Despite said knowledge, plaintiff has not
sought declaration against such termination. Hon'ble Supreme
Court in case of I.S.Sikandar (Dead) by L.Rs vs.
K.Subramani and others reported in (2013) 15 SCC 27, has
held that once seller had issued notice of termination of
agreement of sale, without prayer for declaring such
termination of agreement of sale as bad in law, suit for specific
performance of agreement of sale would not be maintainable.
23. However, Trial Court and First Appellate Court have
upon analysis of evidence, held plaintiff entitled for return of
Rs.65,000/- which is Rs.20,000/- + Rs.20,000/- borrowed by
defendant no.1 from plaintiff and Rs.25,000/- being admitted
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interest payable on borrowed money. There is no challenge on
quantum of amount to be returned. Besides, as observed
above, plaintiff admitted that cheque issued by him for sum of
Rs.45,000/- had bounced after defendant no.1 presented it for
payment. Thus, impugned Judgment and Decrees passed by
both Courts is after due consideration of all material on record
and with view to do complete justice.
24. Wherefore, no substantial question of law arises for
consideration.
25. Consequently, appeal is without merit and stands
dismissed, confirming Judgment and Decree passed by Trial
Court and First Appellate Courts, with no orders as to costs.
Sd/-
JUDGE
Psg*
