Karnataka High Court
Shri Irappa @ Ittappa Rayappa Naragatti vs Shri Arun Baburao Choudhari on 13 November, 2024
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NC: 2024:KHC-D:16591
RFA No. 100168 of 2017
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 13TH DAY OF NOVEMBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
REGULAR FIRST APPEAL NO.100168 OF 2017 (SP-)
BETWEEN:
SHRI. IRAPPA @ ITTAPPA RAYAPPA NARAGATTI,
SINCE DECEASED BY HIS LRS.
1a. SMT. MAHADEVI
W/O. ITTAPPA NARAGATTI,
AGE: 56 YEARS,
OCC: HOUSEWIFE,
R/O HOUSE NO.65/4,
BHANDUR GALLI,
BELAGAVI - 590001.
1b. RAGHAVENDRA
S/O. ITTAPPA NARAGATTI,
AGE: 36 YEARS,
ASHPAK
KASHIMSA
OCC: CONTRACTOR,
MALAGALADINNI
R/O. HOUSE NO.65/4,
BHANDUR GALLI,
BELAGAVI - 590001.
Location:
HIGH 1c. SMT. RENUKA
COURT OF
KARNATAKA W/O. SHRIDHAR PUJARI,
AGE: 33 YEARS,
OCC: HOUSE WIFE,
R/O NO.14, 22ND CROSS,
VIDYAGIRI,
BAGALKOT - 587102.
1d. SMT. REJESHWAR
W/O. AVINASH MORAB,
AGE: 30 YEARS,
OCC: HOUSE WIFE,
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NC: 2024:KHC-D:16591
RFA No. 100168 of 2017
R/O: BEHIND WATER TANK,
NOORANI PLOT,
NEKAR NAGAR, HUBBALLI - 580024.
DIST: DHARWAD.
1e. VINAYAK
S/O. ITTAPPA NARUGATTI,
AGE: 27 YEARS,
OCC: CONTRACTOR,
R/O. HOUSE NO.65/4, BHANDUR GALLI,
BELAGAVI - 590001.
...APPELLANTS
(BY SRI. CHETAN MUNNOLI, ADVOCATE)
AND:
1. SHRI. ARUN BABURAO CHOUDHARI,
AGE: 67 YEARS,
OCC: BUSINESS,
R/O: 212, TAHASILDAR GALLI,
BELAGAVI - 590001.
2. SHRI. ANIL BABURAO CHOUDHARI,
AGE: 64 YEARS,
OCC: BUSINESS,
R/O: 212, TAHASILDAR GALLI,
BELAGAVI - 590001.
3. SHRI. DEVANAND BABURAO CHOUDHARI,
AGE: 61 YEARS,
OCC: BUSINESS,
R/O: 212, TAHASILDAR GALLI,
BELAGAVI - 590001.
4. SHRI. KISHOR BABURAO CHOUDHARI,
AGE: 52 YEARS,
OCC: BUSINESS,
R/O: 212, TAHASILDAR GALLI,
BELAGAVI - 590001.
5. SMT. RUKMINI PANDURANG AMONKAR,
AGE: 70 YEARS,
OCC: HOUSEHOLD,
R/O: DODDANNAVAR CHAWL,
BHANDUR GALLI,
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NC: 2024:KHC-D:16591
RFA No. 100168 of 2017
BELAGAVI-590001.
6. SUB REGISTRAR, BELAGAVI
D.C. COMPUND,
BELAGAVI-590001.
...RESPONDENTS
(BY SRI. D. RAVIKUMAR GOKAKAKAR, ADVOCATE FOR R1 TO R4;
SRI. MALLIKARJUNSWAMY B. HIREMATH, ADVOCATE FOR R5;
GOVT. ADVOCATE FOR R6)
---------
THIS RFA FILED UNDER SECTION 96 READ WITH ORDER XLI
RULE 1 CPC., 1908, PRAYING TO SET ASIDE THE JUDGMENT AND
DECREE DATED 31.03.2017 PASSED BY THE III ADDITIONAL SENIOR
CIVIL JUDGE BELAGAVI IN O.S 91/2008 IN SO FOR AS DIRECTING
THE APPELLANT AND RESPONDENT NO.5 TO PAY RS.4,00,000/-
WITH INTEREST AT 18% P.A., IS CONCERNED AND ALLOW THIS
APPEAL WITH COSTS THROUGHOUT BY DISMISSING THE SUIT IN
O.S. 91/2008 ON THE FILE OF III ADDITIONAL SENIOR CIVIL JUDGE,
BELAGAVI.
THIS APPEAL COMING ON FOR FURTHER HEARING, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
CORAM: THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
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NC: 2024:KHC-D:16591
RFA No. 100168 of 2017
ORAL JUDGMENT
This appeal is filed against the decree for refund of
earnest amount in a suit for specific performance of
contract. The plaintiffs sought relief of specific
performance of the agreement for sale dated 19.08.2005,
wherein he made a claim that defendant No.1 agreed to
sell the suit schedule property for Rs.13,60,000/-. It is
further claimed that earnest money of Rs.4,00,000/- is
paid in three installments. The first installment of
Rs.50,000/- is paid on 19.08.2005, second installment of
Rs.3,00,000/- is paid on 15.11.2005 and third installment
of Rs.50,000/- is paid on 12.01.2006.
2. Defendant No.2 purchased the property during
the pendency of the suit i.e., on 26.08.2008 and he was
made as a party to the suit subsequently. Both the
defendants contested the suit. Defendant No.1 denied the
execution of agreement for sale.
3. The trial Court on evidence placed before it
concluded that agreement for sale is proved. However,
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trial Court held that plaintiffs are not entitled to the relief
of specific performance of contract on the premise that
there is a prohibition to transfer the property having 'J'
tenure. Thus, despite holding that plaintiffs have proved
the agreement for sale as well as readiness and
willingness to perform their part of contract, and also
noticing that defendant No.2 has developed the property
after purchasing the property held that the Court cannot
direct defendant No.1 to execute the sale deed in favour of
plaintiffs because of prohibition contained in respect of the
property. Thus, specific performance of contract is
declined and relief of refund of earnest amount along with
18% interest is granted.
4. It is also noticed that contentions relating to
forfeiture of earnest amount is held against defendant
No.1 on the premise that defendant No.1 has received
Rs.50,000/- after stipulated date. Accordingly, suit is
decreed for refund of the earnest amount. Defendant No.1
has accepted the judgment and decree passed by the trial
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Court. He has not filed any appeal. The plaintiffs have also
accepted the impugned judgment and decree passed by
the trial Court. However, defendant No.2 is before this
Court in an appeal on the premise that the decree for
refund of the amount could not have been passed against
defendant No.2 as he is the purchaser from defendant
No.1 and liability, if any, is only against defendant No.1,
who received the earnest consideration amount.
5. Learned counsel for the appellant/defendant
No.2 would contend that agreement for sale was between
plaintiffs and defendant No.1 and it is defendant No.1, who
has received the consideration amount. Merely because
defendant No.2 is a purchaser during the pendency of the
suit, liability to pay the earnest amount cannot be
fastened on defendant No.2. Thus, he would contend that
decree against defendant No.2 insofar as refund of amount
is to be set-aside.
6. Learned Counsel of the plaintiffs would contend
that the defendant No.2 being the purchaser during the
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pendency of the suit is bound by the decree against
defendant No.1
7. This Court has considered the contentions
raised at the bar and perused the records. The following
point arises for consideration.
(i) Whether the Trial Court is justified in passing
decree for refund of earnest amount pursuant to
agreement for sale dated 19.08.2005, on
defendant No.2 the subsequent purchaser
wherein defendant No.1 has received earnest
amount of Rs.4,00,000/-?
8. Admittedly, the agreement for sale is between
plaintiffs and defendant No.1. Admittedly, defendant No.1
has received Rs.4,00,000/- from plaintiffs as already
discussed above. The trial Court has given a finding that
plaintiffs have paid Rs.4,00,000/- to defendant No.1.
9. During the pendency of the suit, defendant
No.2 has purchased the suit property. Defendant No.2 is
governed by the principle to the lis-pendence. Applying
said principle, defendant No.2 will acquire right over the
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suit property subject to the result of the suit. Now the
decree for specific performance of contract is not granted
to the plaintiffs. He has not questioned the said decree.
Plaintiffs have accepted decree for refund of amount,
which is directed against defendants No.1 and 2.
Defendant No.1 has accepted the said decree. The rule of
lis-pendence, which applies to the right over the
immoveable property involved in the suit cannot be
applied to fasten the liability to repay the earnest amount.
The trial Court committed an error in passing the decree
against defendant No.2, who is the purchaser of the suit
property during the pendency of the suit and even trial
Court has not assigned any reasons as to why defendant
No.2 is to be saddled with liability to repay the advance
consideration amount when admittedly said consideration
amount is paid to defendant No.1 by the plaintiffs. To that
extent, the judgment and decree passed by the trial Court
are to be set-aside and accordingly, set-aside.
10. Hence, the following:
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ORDER
i) The appeal is allowed.
ii) The judgment and decree dated
31.03.2017 passed by the III
Additional Senior Civil Judge, Belagavi
in O.S.No.91/2008 insofar as decree
directing repayment of amount
against defendant No.2 is set-aside.
(iii) The suit of the plaintiffs against
defendant No.2 is dismissed. The
decree against defendant No.1 is
affirmed.
Sd/-
(ANANT RAMANATH HEGDE)
JUDGE
AM
CT:ANB
