Karnataka High Court

Mr G Madanlal vs Mr V Keshavamurthy on 23 February, 2024

Author: Chief Justice

Bench: Chief Justice

                              1
                                              RFA 1145/2021

      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 23RD DAY OF FEBRUARY, 2024

                         PRESENT

THE HON'B LE MR.P .S. DINES H KUMA R, C HIEF J U ST ICE

                           AN D

     THE HON'BLE MR. JUSTICE T.G.SHIVASHANKARE GOWDA

                RFA NO.1145 OF 2021 (SP)

BETWEEN:

MR. G. MADANLAL
AGED ABOUT 72 YEARS
S/O LATE M.GHERARCHAND
R/AT GROVER'S COTTAGE
GOODSHED ROAD, OOTY - 643 001                ...APPELLANT

(BY SRI.RAVISHANKAR JANDHYALA, SR. ADV. FOR
    SRI.VENKATESH R.BHAGAT, ADV.)

AND:

1.      MR.V.KESHAVAMURTHY
        S/O LATE VENUGOPAL NAIDU

2.      MR. V. VENKATAPATHY
        S/O LATE VENUGOPAL NAIDU

        LATE V.RUKMINI DEVI
        SINCE DECEASED BY HER LR

3.      SMT. PREMA VANI I.
        AGED ABOUT 43 YEARS
        W/O SRI.RAJASHEKAR

4.      MRS.V.SHAKUNTALA DEVI
        D/O LATE VENUGOPAL NAIDU

5.      MRS.V. PARIMALA DEVI
        D/O LATE VENUGOPAL NAIDU
                             2
                                               RFA 1145/2021

6.   MRS. V. SULOCHANA DEVI
     D/O LATE VENUGOPAL NAIDU

7.   MR. MANOHAR
     S/O ALTE VENUGOPAL NAIDU

     RESPONDENT NOS. 1 TO 7 ARE
     R/AT NO.54, BENSON CROSS ROAD
     BENSON TOWN, BENGALURU - 560 046

8.   MR. JOHN MOSES
     AGED ABOUT 45 YEARS
     S/O MR. JOHN P. DEVAMANI
     R/AT NO.67/3, ST.JOHNS ROAD
     BENGALURU - 560 042                 ... RESPONDENTS

(BY SRI. ASHOK B. PATIL, ADV. FOR R1, R3(a), R5 & R6;
    SRI. SUNIL KUMAR H. N., ADV. FOR C/R2 & R4;
    SRI. B. K. ARUN, ADV. FOR R7;
    VIDE ORDER DATED 30.01.2023
    SERVICE OF NOTICE TO R8 IS HELD SUFFICIENT)

      THIS RFA IS FILED UNDER SECTION 96 ORDER 41 RULE
1 READ WITH SECTION 96 OF CPC AGAINST THE JUDGMENT
AND     DECREE      DATED   30.07.2021    PASSED    IN
OS.NO.9334/2013 ON THE FILE OF THE VII ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, BENGALURU, DISMISSING THE
SUIT FOR SPECIFIC PERFORMANCE.

     THIS RFA HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT   ON 03.01.2024 AND COMING ON FOR
PRONOUNCEMENT      OF    JUDGMENT    THIS   DAY,
T.G.SHIVASHANKARE     GOWDA   J., DELIVERED  THE
FOLLOWING:

                   JUDGMENT

This appeal by plaintiff is directed against the

judgment and decree dated July 30, 2021 in O.S.

No.9334/2013 passed by the VII Addl. City Civil &

Sessions Judge, Bangalore (CCH-19), dismissing the

suit for specific performance of agreement dated

15.04.2004.

2. For the sake of convenience, parties shall

be referred as per their status before the Trial Court.

3. Brief facts of plaintiff's case are, one late

Smt.K.J.V.Jayalakshmi (Jayalakshmi), wife of

Venugopal Naidu is the original owner of property

bearing No.54 measuring North to South on Eastern

side 218 feet and on Western side 193 feet, East to

West on Northern side 217 feet and on Southern side

210 feet with P.T.Serial No.1059 of B.B.M.P. with

CTS No.568 measuring 3995.6 sq.meters situated

at Benson Town, Benson Cross Road,

Bangalore-560 046 (hereinafter referred to as 'the

suit schedule property'). Defendant Nos.1 to 7 are

her legal heirs. Plaintiff through a real estate agent

learnt about Jayalakshmi's intention to sell the suit

property. On 08.12.2003, plaintiff and Jayalakshmi

entered into an Memorandum of Understanding (for

short 'MOU') and agreed to sell the suit property free

from all encumbrances for a total consideration of

Rs.5,00,00,000/-. It was mentioned in the MOU that

the suit property was subject matter of litigation in

O.S.No.1949/19801 challenging her absolute right

over the suit property. The said suit was dismissed

and several appeals in R.F.A.Nos.611/2002 c/w

R.F.A.Nos.612/2002, 613/2002, 710/2002,

711/2002, 712/2002 and 504/2002 were filed

before this Court. It was also declared in the MOU

that Jayalakshmi had three sons and four daughters

(defendants No. 1 to 7), and they were to receive

Rs.20,00,000/- each, however defendant No.7 did

not opt to receive advance.

4. Plaintiff and Jayalakshmi entered into an

Agreement to Sell dated 20.12.2003 for

Rs.5,00,00,000/- and received a sum of

Rs.10,00,000/- to which her six children are

confirming witnesses. Thereafter, on 15.04.2004,

plaintiff and Jayalakshmi entered into another

Originally numbered as O.S. No. 22/1977

Agreement to Sell confirming the terms of earlier

agreement. On 25.04.2005, a supplemental

agreement was executed between Jayalakshmi and

plaintiff, wherein it was agreed that the Agreement

to Sell dated 15.04.2004 would not be binding on the

parties.

5. During the pendency of appeals mentioned

above, Jayalakshmi died on 13.05.2007, leaving

behind defendants as her Class-I heirs.

On 01.03.2013, the RFAs pending before this Court

were disposed of. After the disposal of appeals,

plaintiff issued a notice dated 04.09.2013 calling

upon defendants to complete the sale transaction.

Defendants did not reply to the said notice. Hence,

plaintiff has brought the instant suit for specific

performance.

6. Defendant Nos.1, 2, 3, 5 and 6 resisted the

suit by filing a common written statement,

contenting inter alia that Jayalakshmi never intended

to sell the suit property. Jayalakshmi had borrowed

loans from third parties in order to defend the

litigation for a period of 25 years, also to pay the

property tax and to perform marriage of her

children. The transaction between Jayalakshmi and

plaintiff was merely a loan transaction. To secure

the loan transaction with plaintiff, Jayalakshmi had

entered into formal MOU dated 08.12.2003. The

parties never intended to act on MOU; that there was

no concluded contract between them. The

Agreement to Sell dated 15.04.2004 was executed

as a security to the money advanced by plaintiff.

The agreement to sell was not intended to be

enforced.

6.1. Defendant No.7 after learning that plaintiff

is taking undue advantage, did not sign any of the

documents. Jayalakshmi and other defendants were

not aware of the contents of the agreements dated

20.12.2003 and 15.04.2004. Jayalakshmi and

defendants never intended to act upon the contract

for sale of the suit schedule property. There is no

concluded contract between plaintiff and defendants.

6.2. Although plaintiff was helping Jayalakshmi

and defendants by giving amount as and when

required, by way of loan, said amounts were utilized

towards the education of the children, marriage,

payment of legal fees and other miscellaneous

expenses. In order to evict the tenants, who are in

occupation of major portion of the property,

Jayalakshmi and defendants have spent almost 40

years in trying to defend their ownership right over

the suit schedule property.

6.3. Defendant No.8/John Moses, who is a land

mafia and anti-social element, filed a suit and also

an impleading application in R.F.A.No.504/2002

claiming that his ancestors were the original owners

of the suit schedule property and that he had

acquired the property by virtue of gift deed in the

year 2011 from his father. He also filed

H.R.C.No.62/2012 against the defendants claiming

that they are his tenants. All his claims have been

rejected by the courts.

6.4. After dismissal of the appeals plaintiff

insisted with defendants to return the money paid by

him with interest. Plaintiff introduced several

builders to defendants for sale of suit property

stating that they were interested to develop the

property, if all litigations were resolved. In their

presence, plaintiff has agreed to take refund of his

loan with interest @ 18% as full and final settlement

for which defendants expressed their willingness.

6.5. Defendant No.1 was working as driver in

the Co-operative Audit Department of Government of

Karnataka. He retired in the year 1996. He was

unable to lead life only on his pension and he

required money towards treatment of his wife, son

and performing the marriage of daughters and also

his own treatment he received amounts from

plaintiff.

6.6. Defendant No.2 met with a major accident

and he was constrained to borrow loans. Defendant

No.3's husband died in the year 1991. She was in

need of money to bear the expenses of education of

her two children. Her son met with an accident in the

year 2007. He was also suffering from T.B. Under

such circumstances, financial aid was taken from

plaintiff.

6.7. Defendant No.5's husband is working in

Indian Army, her son died on 18.08.2013 in an

accident, she had to take care of the educational

expenses of her daughter and she also received loan

of Rs.6,45,000/- from the plaintiff in installments.

6.8. The husband of defendant No.6 was

employed in NGEF; due to closure of the factory, he

became unemployed in the year 2001. She received

in all Rs.3,10,000/- from the plaintiff on various

dates, as loan and not as a part consideration of the

agreement. She utilized the money towards

education expenses of the children. Execution of the

sale deed for a meager sum lesser than the market

value, would put them to great hardship. They are

willing to refund the amount with interest. Plaintiff is

a professional money-lender, since he has agreed to

receive the principal loan amount with interest

@ 18% per annum, the suit for specific performance

did not merit consideration.

7. Defendant No.7 resisted the suit by filing a

separate written statement, contenting inter alia that

suit property is not the absolute property of

Jayalakshmi. He has 1/7th share in the suit property.

He had filed O.S.No.2678/2004 for partition. At no

point of time, defendant No.7 entered into any kind

of agreement with plaintiff nor he had authorized

Jayalakshmi, his mother to enter into any

agreement.

8. Based on the pleadings, the learned Trial Court

has framed following issues:

"1. Whether plaintiff proves that deceased Mrs. K.J.V.Jayalakshmi executed agreement of sale dtd 20.12.2003 agreeing to sell suit property for a total sale consideration of Rs.5 Crores and received earnest money?

2. Whether plaintiff proves that deceased Mrs. K.V. Jayalakshmi entered into registered supplementary agreement dated 15.4.2004 confirming the terms and conditions of earlier agreement dated 20.12.2003?

3 Whether plaintiff proves that deceased Mrs K.V. Jayalakshmi and defendants No 1 to 6 have received in all Rs.93,92,500 as part of sale consideration amount?

4. Whether defendants No 1 to 6 prove that the suit of the plaintiff is barred by limitation?

5. Whether defendants No. 1 to 6 prove that valuation made and court fee paid on plaint is insufficient?

6. Whether defendant No. 7 proves that he is neither a necessary nor proper party to this suit?

7. Whether plaintiff proves that he was and is ready and willing to perform his part of contract?

8. Whether plaintiff proves that he is entitled for the relief of specific performance of contract as sought?

9. What decree or order?"

9. On behalf of the plaintiff, plaintiff's Power of

Attorney Holder was examined as PW-1, plaintiff got

himself examined as PW-2 and one witness as PW-3

and marked as Exs.P1 to P96. On behalf of the

defendants, two witnesses were examined as DWs-1

and 2 and marked as Exs.D1 to D12. Answering issue

Nos.1, 2, 3 and 5 in the negative and issue Nos.4 and

6 in the affirmative and holding that issue No.7 did not

survive for consideration, the Trial Court has dismissed

the suit.

10. Heard Sri.Ravishankar Jandhyala, learned

Senior Advocate for the plaintiff; Sri. Ashok B. Patil,

learned Advocate for defendants No.1, 3(a), 5 and 6;

Sri.Sunil Kumar N, learned Advocate for defendants

No.2 and 4; and Sri. B.K.Arun, learned Advocate for

respondent No.7.

11. Sri.Jandhyala, learned Senior Counsel praying

to allow the appeal, mainly submitted that:

the Trial Court has not properly considered

D.W.1 & D.W.2' s admissions;

the Trial Court has erred in holding that

there is no concluded contract and that there

is lack of consensus ad idem, whereas D.W.2

in the cross examination, has admitted the

Sale Agreement;

the Trial Court has erred in not considering

Ex.P19 which is a Declaration dated

10.12.2010 executed by Defendant No.1,

wherein he has confirmed the Agreements

dated 20.12.2003, 15.04.2004 and

Supplementary Agreement dated 25.04.2005.

This clearly establishes that there is a

concluded contract and the Agreement to Sell

is binding on defendants. Further, there is no

oral or documentary evidence produced by

defendants to disbelieve the evidence on

record;

D.W.2 has admitted that defendants have

received a sum of Rs.93,92,500/- from

plaintiff;

the Trial Court has misconstrued the cause of

action. Thus, there is error apparent on the

face of the impugned judgment;

there is no iota of evidence furnished by the

defendants to prove that the transaction

between Jayalakshmi and plaintiff is a loan

transaction;

plaintiff had performed his part of

performance and is willing to perform his

remaining part of the contract in paying the

balance sale consideration. In spite of

furnishing the proof of the availability of

balance Sale Consideration of

Rs.4,06,07,500/-, the learned Trial Judge has

dismissed the suit;

though there were appeals pending, plaintiff

had paid substantial sale consideration of

Rs.93,92,500/- from 2003 onwards. The

learned Trial Judge has failed to note that

defendants have received huge advance sale

consideration and incorrectly refused the

prayer for specific performance.

11.1. In support of his contentions,

Sri. Jandhyala, has mainly placed reliance on

following authorities:

           i.      V. Pechimuthu Vs. Gowrammal2;

           ii.     Salapuriah Properties Private Limited Vs.
                   M.S.Ramaiah3;

           iii.    Kamal Kumar V/s Premalatha Joshi4.





  (2001) 7 SCC 617

  2005 SCC online 410

  2019(3) SCC 704

12. Opposing the appeal, Sri. Ashok B. Patil, for

defendants No. 1, 3(a), 5 and 6, mainly submitted

that:

the transaction is a loan transaction and not

a sale transaction. Plaintiff is a Money

Lender. Jayalakshmi was in need of money

to conduct the case O.S.No.1949/1980 filed

by her;

plaintiff has admitted that the amounts paid

to Jayalakshmi and her children were not

forthcoming in the statement of books

maintained by him;

in respect of same transaction, 4 documents

have come into existence. Ex.P2, 3, 5 and

6 are sham documents;

Jayalakshmi died in the year 2007, all the

appeals pending before this Court were

disposed of in the year 2013;

Jayalakshmi had 7 children. Though 6

children have attested the agreements as

consenting parties, defendant No.7 is not a

consenting party to any of the documents.

defendant No.7 has already filed a suit for

partition against Jayalakshmi and other

children in O.S.No.2678/2004, wherein the

plaintiff was arrayed as defendant No.9;

Jayalakshmi and the defendants have no

means to pay back the loan due to

litigations;

Defendants had an option to elect for joint

development in the ratio of

40 (defendants) : 60 (plaintiff) upon

clearing the cloud over title. In the absence

of such election, the transaction stood as

loan transaction which was not discharged

till now;

the Agreements are not enforceable. There

was no concluded contract as the MOU and

other agreements envisage execution of

agreements on future dates. Therefore,

these are not executable in nature;

defendants have pleaded hardship as

contemplated under Section 20(2) of

Specific Relief Act, 1963. There is no cross-

examination of defendants and their

witnesses on this aspect. Thus, plaintiff has

accepted defendants' hardship;

more than two decades have elapsed

between from date of MOU and the present

appeal, therefore, it would be wholly

inequitable to grant specific performance at

this juncture;

the market value of the suit property would

not be less than Rupees Eighty Crore.

Plaintiff has paid Rs.93,42,500/- which is

less than even 1/5th of the sale

consideration mentioned by the plaintiff;

defendants are ready to refund the amount

with interest at 12% per annum from the

date of MOU till today;

the Trial Court has rightly held that the suit

is barred by law of limitation.

13. He has placed reliance on the follwing

passage in S. Chattanatha Karayalar -Vs.- Central

Bank of India Ltd. and Others5:

"Where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole."

AIR 1965 SC 1856 (para 3)

14. Opposing the appeal, Sri. B.K. Arun, for

defendant No.7 submitted that:

defendant No. 7 is not a party to any of the

documents executed between Jayalakshmi,

defendants No. 1 to 6 and plaintiff.

Therefore, there is no cause of action

against defendant No. 7.

the suit property is a joint family property.

Defendant No. 7 has 1/7th share in the suit

property. Therefore, Jayalakshmi and other

defendants could not have entered into any

transaction as to bind or effect his share;

had executed an Agreement to Sell in favour

of one Salman Shariff. He is a necessary

party. The fact that he is not arrayed as a

party, the suit is bad for non-joinder of

necessary parties and liable to be dismissed;

plaintiff has indulged in a speculative

litigation;

plaintiff has not demanded delivery of

possession. plaintiff has failed to produce his

IT returns for the year 2003-04 onwards to

prove the payments made by him;

there is no evidence placed by plaintiff to

demonstrate that the amounts were paid as

advance sale consideration;

Section 22(b) of the Specific Relief Act,

1963 deals with refund of earnest money.

Plaintiff has not sought for refund either in

the suit or in this appeal.

15. We have given our anxious consideration to

the arguments addressed on behalf of both parties and

perused the records.

16. In the light of the rival contentions urged on

both parties, points that arise for our consideration

are:

(i) Whether the transactions between the parties was 'an agreement to sell' OR a 'loan transaction'?

(ii) Whether the plaintiff is entitled for the relief of specific performance?

(iii) Whether refund of money with interest can be ordered in favour of the plaintiff?

(iv) Whether the impugned judgment calls for interference?

Reg. Point No.(i):

17. Undisputed facts of the case are,

K.J.V.Jayalakshmi is the mother of defendant Nos.1 to

7. In the year 1971, Jayalakshmi's mother, Rani

Putttamma Nagathi entered into a compromise with

her husband K.J.Venkatachalapathy Naidu and got the

suit schedule property. After her mother's death,

Jayalakshmi became the absolute owner.

18. Plaintiff's specific case is that Jayalakshmi

had offered to sell and plaintiff had agreed to purchase

the suit property.

19. Defendants' specific case is that, plaintiff

was a professional licenced money lender. Jayalakshmi

was involved in the litigation in O.S.No.1949/1980 and

borrowed money from him. The alledged MOU and

Agreements were executed as security documents.

After Jayalakshmi's death in the year 2007, defendants

No.1 to 6 have also received certain amounts from

plaintiff.

20. The first document that has come into

existence is Ex.P2/MOU dated 08.12.2003. The second

document is Ex.P5 dated 20.12.2003 executed by

Jayalakshmi. The third document is Ex.P3 dated

15.04.2004, an agreement to sell executed by

Jayalakshmi. To this document, defendant Nos.1 to 6

are the consenting witnesses. Subsequently, a Ex.P6,

the supplemental agreement dated 25.04.2005 has

been executed.

21. Jayalakshmi died on 13.05.2007. Defendant

Nos.1 to 7 being the legal representatives have

contested the appeals. Jayalakshmi's title has been

confirmed by this Court on 01.03.2013. On

04.09.2013, plaintiff issued notices to the legal

representatives of Jayalakshmi and one Salman

Sheriff, with whom defendant No.7 had some

transcation.

22. Plaintiff's specific case is that he has paid

Rs.93,92,500/- as part sale consideration and Ex.P6 is

the agreement. Jayalakshmi's title has been confirmed

by this Court dated 01.03.2013. Defendant Nos.1 to 7

is prepared to receive the balance sale consideration.

23. As per the terms of the MOU, the parties

have agreed for joint development in the ratio of 60:40

between plaintiff and Jayalakshmi. Plaintiff has paid

Rs.1 Lakh for the purpose of funeral and obsequies of

Jayalakshmi and also gave money to defendant Nos.1

to 6 as and when they were in need. The said

payments are not made as per terms of the

agreement.

24. Defendant No.7 is not a consenting party to

Ex.P6 nor has he received any money from the

plaintiff. According to him, the MOU and agreements

are not binding on him.

25. Admittedly, Jayalakshmi was entangled with

multiple litigations as she has to contest the suit

challenging her title. She had forced to generate funds

for litigation. The material on record clearly shows

that a sum of Rs.93,42,500/- was paid under various

documents and on different dates and not in lumpsum.

26. According to the plaintiff, he has entered into

agreement with the owener and title holder

Jayalakshmi of the suit property. Defendant Nos. 1 to 6

are consenting witness. Plaintiff has admittedly paid

money in piece meal to Jayalakshmi and Defendant

Nos. 1 to 6. It is not in dispute that as on the date of

the MOU in the year 2003 and the agreement to sell in

the year 2003-04 and supplemental agreement in the

year 2005, Jayalakshmi did not have an absolute title.

Yet, plaintiff has paid about Rs. 93 lakhs, which is not

even equivalent to 1/5th of Rs. 5 Crore, the sale

consideration according to the plaintiff.

27. Evidence also discloses that after

Jayalakshmi's death, plaintiff has given money for her

funeral and obsequies expenses. He has also given

money to defendant Nos. 1 to 6 for them to tide over

the financial difficulties from time to time.

28. A plain reading of the MOU makes it clear

that it is a contingent document. Only upon

Jayalakshmi getting clearing title, plaintiff would get an

option to purchase the property. It is not in dispute

that between 2003 till 2013, Jayalakshmi did not have

clear title.

29. Ex.P5 which is a registered agreement.

Clause-17 of the said document makes it clear that in

case of the agreement being frustrated due to

unavoidable circumstances or the appeals not being

terminated in favour of Jayalakshmi, she would refund

the advance sale consideration along with interest at

12% per annum. Defendant No.2/DW-2 in his cross-

examination has asserted that defendants are willing

to return the money paid by the plaintiff with interest

@ 12% per annum.

30. It is interesting to note that there exists a

clause of joint development of the property between

plaintiff and Jayalakshmi, if the title of Jayalakshmi is

cleared. This fortifies the contention urged by

defendants that the transaction was not purely one of

sale.

31. The contention of Sri. Patil is that if the

transaction is one of sale, there was no need for the

parties to enter into multiple documents. The conduct

of the parties makes it clear that the parties never

intended to treat the transaction as an agreement to

sell.

32. After the death of Jayalakshmi, her legal

representatives are also entangled with several

litigations as explained in Exs.D1 to D12. Due to the

pending litigations, defendant Nos.1 to 6 were forced

to take money from plaintiff as and when required.

33. Ex.P19 is one of the documents titled as

declaration executed by defendant No.1 on 10.12.2010

and also as 'on demand Promissory Note' on

09.07.2004 for having received Rs.3,15,000/- from the

plaintiff. As per Ex.P19, the total amount paid as on

10.12.2010 was Rs.20,65,000/- being the share of

defendant No.1. Exs.P8 to P89 are the

acknowledgements and also Bank Transfer receipts

showing money paid to Jayalakshmi and defendant

Nos.1 to 6, which varies from Rs.10,000/- to

Rs.4,80,000/-. This clearly goes to show that from the

day one till the last payment, money was paid in bit

and pieces as loan. If the intention of parties was to

transfer the suit property for a consideration, there

was no occasion for Jayalakshmi and her children to

collect money in installments. This stands in support

of the argument canvassed on behalf of defendants

that money so received by defendants in

Rs.93,92,500/- was never intended to be the part

consideration under the agreements (Exs.P2, P3, P5

and P6). Thus, the intention of the parties was to

secure money from plaintiff in order to contest the

multiple litigations. The real intention between the

parties was the loan and in order to secure the loan,

plaintiff being the professional money-lender entered

into an MOU and the agreements.

34. In S. Chattanatha Karayalar's case (supra),

the Hon'ble Apex Court referring to the judgment of

Manks -Vs.- Whiteley6, has held that:

"Where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to

(1912) 1 CH 735

this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole."

Thus, the intention of the parties has to be gathered

from the totality of the recitals in the documents to

draw inference about the nature of transaction.

35. Post-clearance of cloud on the title in the

year 2013 and after death of Jayalakshmi in the year

2002 the terms of the agreement contemplates joint

development for which the plaintiff was required to

give an offer to the defendants to elect joint

development or to execute the sale deed by receiving

the balance sale consideration. The material on record

does not disclose any such option given by plaintiff.

36. In V. Pechimuthu -Vs.- Gowrammal, the

Hon'ble Apex Court referring to a case of this nature

regarding option available to the defendants not being

made available by plaintiff, has held as follows:

12. The conclusion of the High Court is unsustainable in law and contrary to the facts.

The learned Judge erred in holding that it is a general principle of law that every agreement of sale by which the original owner agrees to buy back the property is a privilege or concession granted to such owner. A privilege has been defined as a particular and peculiar benefit or advantage enjoyed by a person, and a concession as a form of privilege. An option to purchase or repurchase has been held to be such a privilege or concession. [See: Shanmugham Pillai v. Annalakshmi: AIR 1950 FC 38; K. Simarathmull v. Nanjalingaiah Gowder : AIR 1963 SC 1182.] This is because an option by its very nature is dependent entirely on the volition of the person granted the option. He may or may not exercise it. Its exercise cannot be compelled by the person granting the option. It is because of this one sidedness or unilatcrality, as it were, that the right is strictly construed and an option for the renewal of a lease, or for the purchase or repurchase of property, must in all cases be exercised strictly within the time limited for the purpose, otherwise it will lapse (Halsburys Laws of England, 3rd Edn. Vol.3 Art. 281, p. 165).

13. An agreement for sale and purchase simpliciter , on the other hand, is a reciprocal arrangement imposing obligations and benefits on both parties and is enforceable at the instance of

either. The interpretation of such a contract would be governed by the laws of contract relating to the performance of reciprocal promises.

14. Whether an agreement is an option to purchase or an ordinary agreement would depend on the interpretation of its provisions. Sometimes the option is expressly and in terms granted. In others the right may be implicit. Thus when an agreement provides that the right to obtain a sale is subject to the fulfillment of certain conditions by the purchaser, the agreement would in effect be an option to purchase, as the right to purchase would only accrue upon the voluntary performance of the conditions specified by the owner. The vendor cannot compel the performance of the conditions by the purchaser and then ask for the contract to be specifically performed."

(Emphasis supplied)

37. In the case on hand, the transaction is

ambiguous in nature. It includes both sale and option

for joint development. It also shows that money is not

paid in one lumpsum. Therefore, in our view as held in

V. Pechimuthu, plaintiff cannot compel the defendants

for specific performance.

38. The contention of plaintiff is that this is a fit

case for application of "Ubi Jus, ibi remedium: where

there is a right, there is a remedy". This maxim can

only be offered where the plaintiff demonstrates before

the Court that the transaction between the plaintiff and

the defendant is a pure sale transaction. In view of our

finding that the transaction does not appear to be a

case of agreement to sell, the maxim urged by plaintiff

does not plead his case any further. In substance, we

are persuaded to accept the evidence which is in

favour of the defendants. We are therefore of the

opinion that the transaction between the parties was a

loan transaction and accordingly, answer point No.(i).

Reg.Point No.(ii):

39. We have re-appreciated the evidence and the

contentions raised by both parties, and it is clear that

plaintiff has lent money and in order to secure the

money, he has entered into an MOU and several

agreements. There is a clause for joint development of

the property with plaintiff having 60% and defendants

having 40% and no such joint development came into

existence. When the transaction is monetary, after the

death of Jayalakshmi since defendant No.7 who has

not joined the MOU and the agreements, he acquired

independent right over the property.

40. In Speech and Software Technologies (India)

Private Limited -vs- Neos Interactive Limited7, it is held

that an agreement to enter into another agreement is

not enforceable in nature. Defendant No.7 has already

filed a suit for partition in O.S.No.2678/2004 in which

the plaintiff is defendant No.9. In substance, there is

no specific unambiguous agreement between the

parties. Therefore, plaintiff is not entitled for specific

performance. Accordingly, we answer point No.(ii) in

the negative.

(2009) 1 SCC 475

Reg. Point No.(iii):

41. This point arises for consideration for the

reasons recorded in points No.(i) and (ii). We have

accepted the contention of the defendants that the

transaction between plaintiff and defendants was a

monetary transaction. Material on record discloses that

plaintiff has paid a sum of Rs. 90 lakhs during

Jayalakshmi's lifetime and after her death, remaining

amount was paid to defendants No.1 to 6 under

various documents referred in Exs.P2 to 6 and 8 to 89.

During the course of cross-examination, the witness

examined on behalf of defendants No.1 to 6 have

admitted this aspect. The contention of learned

counsel for the defendants is that in the absence of

prayer for refund, defendants cannot be directed to

refund the advance sale consideration. This argument

is contrary to the stand taken by the defendants No.1

to 6 in their written statement. It is their specific

stand that they are ready to refund the money to the

plaintiff along with 12% interest. Though plaintiff has

not sought for any relief, defendants have agreed to

refund the money. In the circumstances, in our view,

it is just and equitable to direct the defendants no. 1 to

6 to refund the money with interest. Accordingly, we

answer point No.(iii) in the affirmative.

Reg.Point No.(iv):

42. We have carefully perused the impugned

judgment. Though the judgment is very cryptic, the

learned Trial Judge has given sound reasoning that the

intention of the parties was not to sell the property,

but it is a monetary transaction. We are persuaded by

the pleadings and evidence on record that it is a case

for refund of money and not specific performance.

Therefore, the finding recorded by the Trial Court to

the extent that the claim is barred by time has to be

interfered with, by awarding refund of money to the

plaintiff. For the rest of the findings recorded by the

Trial Court, we do not find any ground to interfere. We

answer point No.(iv) accordingly.

43. In the light of the above discussion, we pass

the following:

ORDER

(i) The appeal is allowed-in-part;

(ii) The order of the Trial Court refusing to grant relief of specific performance is hereby confirmed;

(iii) The plaintiff is entitled to recover Rs.93,92,500/- with interest @ 18% per annum from the date of actual payment in bit and pieces as referred in Exs.P2, P3, P5, P6, P8 to P89;