Karnataka High Court

Sri D A Gopal vs Smt Muniyamma on 5 September, 2024

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                                                  NC: 2024:KHC:37652
                                                 RSA No. 647 of 2013




              IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                   DATED THIS THE 5TH DAY OF SEPTEMBER, 2024

                                      BEFORE

                     THE HON'BLE MR JUSTICE ASHOK S.KINAGI

                   REGULAR SECOND APPEAL NO. 647 OF 2013 (SP)

              BETWEEN:

              SRI D A GOPAL
              S/O LATE ANNAPPA
              AGED ABOUT 57 YEARS
              R/AT NO.43, GANGOTRI
              DEVASANDRA, K R PURAM HOBLI
              BANGALORE-560036
                                                        ...APPELLANT
              (BY SRI. A GANESH, ADVOCATE)

              AND:

              1.    SMT MUNIYAMMA
                    W/O LATE MUNISWAMY
Digitally           AGED ABOUT 63 YEARS
signed by R
DEEPA         2.    SMT ANJANAMMA
Location:           D/O LATE MUNISWAMY
HIGH COURT          AGED ABOUT 43 YEARS
OF
KARNATAKA
              3.    SMT AKKAYAMMA
                    D/O LATE MUNISWAMY
                    AGED ABOUT 39 YEARS

              4.    SRI RAMAMURTHY
                    S/O LATE MUNISWAMY
                    AGED ABOUT 39 YEARS

                    ALL ARE R/AT
                    KURUBARAGOLLAHALLI VILLAGE
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                                        NC: 2024:KHC:37652
                                      RSA No. 647 of 2013




     JADIGENAHALLI HOBLI
     HOSKOTE TALUK
     BANGALORE RURAL DISRICT

5.   SRI. G. MUNIAYYAPPA
     S/O LATE GOVINDAPPA
     AGED ABOUT 58 YEARS
     DODDA TOGURU VILLAGE
     ELECTRONIC CITY POST
     BANGALORE SOUTH TALUK
     BANGALORE - 560 100
                                           ...RESPONDENTS

(BY SRI. D GANGADHARA, ADVOCATE FOR R1 TO R4
    R5 SERVED)

     THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE
JUDGEMENT & DECREE DTD 11.12.2012 PASSED IN
R.A.NO.87/12 AND R.A.NO.354/2012 ON THE FILE OF
PRESIDING OFFICER, FAST TRACK COURT-III, BANGALORE
RURAL DISTRICT, BANGALORE, DISMISSING R.A.87/2012 AND
ALLOWING R.A.354/12 AND MODIFYING THE JUDGEMENT AND
DECREE DTD 2.2.12 PASSED IN OS.NO.1451/2007 ON THE
FILE OF II ADDITIONAL SENIOR CIVIL JUDGE, BANGALORE
RURAL DISTRICT, BANGALORE.

     THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI

                    ORAL JUDGMENT

This regular second appeal is filed by the appellant

challenging the judgment and decree dated 11.12.2012

passed in R.A.Nos.87/2012 and 354/2012 by the Presiding

Officer, Fast Track Court III, Bangalore Rural District,

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Bangalore and the judgment and decree dated 02.02.2012

passed in O.S.No.1451/2007 by the II Additional Senior

Civil Judge, Bangalore Rural District, Bangalore.

2. For the sake of convenience, parties are

referred to as per their ranking before the trial Court. The

appellant is the plaintiff and respondents are the

defendants.

3. The brief facts leading rise to filing of this

appeal are as under:

Plaintiff filed a suit for specific performance of

contract against the defendants alleging that one

Muniswamy, who was the absolute owner of the land

measuring 1 acre 31 guntas with 19 guntas of kharab in

Sy.No.8/2 situated at Kurubaragollahalli village,

Jadigenahalli Hobli, Hosakote taluk, Banglore Rural district,

who died intestate leaving behind the defendants as his

legal heirs, who have jointly succeeded to the suit

schedule property. During the month of May 2005, the

defendants approached the plaintiff and offered to sell the

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suit schedule property to meet their immediate financial

constraints. After due deliberations and discussions, the

defendants agreed to sell and the plaintiff agreed to

purchase the suit schedule property for a total

consideration of Rs.3,99,375/- and agreement of sale

came to be executed on 13.05.2005 embodying the

mutual terms and conditions. It was agreed that the

plaintiff had to pay a sum of Rs.1,50,000/- towards

advance sale consideration amount and required to pay

the balance sale consideration amount at the time of

execution and registration of sale deed and also agreed

that, defendants are required to furnish all the original

documents of title relating to the suit schedule property

and the time fixed for completion of the sale transaction

was 9 months from the date of the sale agreement. The

plaintiff had paid a sum of Rs.55,000/- by way of cash on

14.06.2005, 21.09.2005 and 13.11.2006. It is contended

that the plaintiff was/is ready and willing to perform his

obligations, but the defendants went on avoiding to

perform their part of obligations. The plaintiff in order to

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establish that he was ready and willing to perform his part

of obligations got issued a legal notice dated 18.12.2006

calling upon the defendants to receive the balance

consideration amount and execute the registered sale

deed. The defendants refused to accept the legal notice.

Hence, cause of action arose for the plaintiff to file a suit

for specific performance of contract.

4. Defendants filed written statement denying the

execution of agreement of sale. It is contended that

plaintiff pressurized the defendants by offering lakhs of

rupees and made their mind to sell the property and

accordingly the defendants agreed to sell the property as

per the prevailing rate of Rs.15 lakhs per acre. After

bargaining the sale price was fixed for Rs.12,25,000/- per

acre and the matter was settled for Rs.21,74,375/- and

the plaintiff paid a sum of Rs.2,05,000/- in cash to the

defendants and obtained a signature on the agreement

paper. It is contended that, the plaintiff got created the

alleged agreement of sale. The defendants approached

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the police. The police directed the defendants that dispute

is in civil nature. It is contended that defendants are

ready to return the amount of Rs.2,05,000/- to the

plaintiff. Hence, prayed to dismiss the suit.

5. The Trial Court, on the basis of the above said

pleadings, framed the following issues:

(1) Whether the plaintiff proves that the defendants entered into an agreement with him to sell the property for Rs.3,99,375/- on 13.05.2005?

(2) Whether the plaintiff further proves that the defendants received Rs.1,50,000/- as an earnest money and executed an agreement of sale?

(3) Whether the plaintiff proves that he is ever ready and willing to perform his part of contract?

(4) Whether the defendants prove that the sale consideration fixed for Rs.21,74,375? (5) Whether the plaintiff is entitle for the relief of specific performance of contract as sought for?

(6) Wheat order or decree?

6. The plaintiff in order to prove his case

examined himself as PW.1 and examined one witness as

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PW.2 and got marked 15 documents as Exs.P1 to 15.

Defendant No.4 was examined as DW.1 and examined one

witness as DW.2 and got marked 3 documents as Exs.D1

to 3. The trial Court after recording the evidence, hearing

on both sides and on the assessment of oral and

documentary evidence of the parties, answered issue

Nos.1 to 3 in the affirmative, issue Nos.4 and 5 in the

negative and issue No.6 as per the final order. The suit of

the plaintiff was partly decreed with costs in respect of

alternative relief of recovery of money and directed the

defendants to pay a sum of Rs.2,05,000/- to the plaintiff

together with interest @ 10% p.a. from the date of sale

agreement till the date of realization and relief of specific

performance was rejected.

7. The plaintiff as well as the defendants

aggrieved by the judgment and decree passed in

O.S.No.1451/2007, preferred the appeals in

R.A.Nos.87/2012 and 354/2012 on the file of Presiding

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officer, Fast Track Court-III, Bangalore Rural District,

Bangalore.

8. The first Appellate Court clubbed both the

appeals and framed the following points for consideration:

(1) Whether the plaintiff/appellant in R.A.No.87/2012 is entitled for the relief of specific performance of contract?

     (2)     Whether the defendants/appellants in
             R.A.No.354/2012      are     entitled    for

modification of the rate of interest on the advance amount fixed by the trial Court? (3) Whether the impugned judgment and decree calls for interference by this Court?

(4) To what order?

9. The First Appellate Court, after hearing the

learned counsel for the parties and on re-assessment of

the oral and documentary evidence, answered point No.1

in the negative, point Nos.2 and 3 in the affirmative, point

No.4 as per the final order. The appeal in R.A.No.87/2012

was dismissed and confirmed the judgment and decree

passed by the trial Court and appeal filed by the

defendants was modified. The appeal in R.A.No.354/2012

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was allowed and thereby rate of interest was modified and

consequently the defendants are directed to pay a sum of

Rs.2,05,000/- to the plaintiff at the rate of 6% p.a. from

the date of the suit till the date of realization in full.

10. The plaintiff, aggrieved by the judgments and

decrees passed by the courts below, has filed this regular

second appeal.

11. Heard learned counsel for the parties.

12. Learned counsel for the plaintiff submits that,

the defendants have admitted the execution of agreement

of sale in favour of the plaintiff for consideration of

Rs.3,99,375/-, but the defendants have denied regarding

receiving of the consideration amount and contended that

it was sold for Rs.21,74,375/-. He submits that the

defendants have not produced any records to establish

that it was agreed for consideration amount of

Rs.21,74,375/- and also both the courts below have

concurrently recorded, the findings that the plaintiff has

proved the execution of agreement of sale and regarding

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payment of earnest money and also recorded the finding

that the plaintiff was/is ready and willing to perform his

part of contract, but the trial Court has dismissed the suit

for specific performance only on the ground of hardship.

He submits that the defendants have not pleaded in the

written statement in regard to the hardship and the trial

Court has not framed any issue on the ground of hardship

and the trial Court has not exercised the judicial discretion

under Section 20 of Specific Relief Act. Hence, the first

Appellate Court committed an error in granting an

alternative relief for refund of money. The first Appellate

Court without considering the admission of defendants in

regard to the execution of an agreement of sale and also

payment of part consideration amount as a fraud. Hence,

on these grounds he submits that impugned judgments

and decrees passed by the courts below are arbitrary and

erroneous. Hence, on these grounds, prays to allow the

appeal.

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13. Per contra, learned counsel for the defendants

submits that plaintiff by playing fraud on the defendants

got executed the agreement of sale. He submits that, the

defendants have agreed to sell the suit schedule property

for consideration of Rs.21,74,345/- and not at the

consideration amount of Rs.3,99,375/-. He also submits

that said agreement is void and further submits that the

defendants are illiterate and have not received the amount

of Rs.2,05,000/- as alleged in the plaint and the plaintiffs

have not approached the Court with clean hands and it

does not bear the signature of defendants on the alleged

agreement of sale. The plaintiff has played fraud on the

defendants and in order to buttress his arguments he has

placed reliance on the decisions of the Hon'ble Apex Court

in the cases of A.C.ARULAPPAN VS. SMT. AHALYA NAIK

REPORTED IN AIR 2001 SC 2783, MST. KHARBUJA KUER VS.

JANGBAHADUR RAI AND OTHERS REPORTED IN AIR 1963 SC

1203, SMT. DULARIA DEVI VS. JANARDAN SINGH AND

OTHERS REPORTED IN AIR 1990 SC 1173, KENCHAWWA VW.

AMAGONDA REPORTED IN ILR 1988 KARNATAKA.

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14. This court admitted the appeal on 10.12.2020,

to consider the following substantial questions of law :

(1) Whether the judgment and decree of both the courts below are sustainable in law? (2) Whether both the courts below is justified in declining the relief of specific performance though plaintiff has proved Ex.P1 agreement for sale dated 13.05.2005?

(3) Whether both the courts below have judiciously exercised the discretion under Section 20 of Specific Relief Performance Act?

15. Perused the records and considered the

submissions of learned counsel for the parties.

16. SUBSTANTIAL QUESTION OF LAW NOS.1 TO 3:

Substantial question of law Nos.1 to 3 are interlinked

together. Hence, they are taken together for common

discussion in order to avoid repetition of facts. The plaintiff

in order to substantiate his case examined himself as

PW.1. He has deposed that defendants are the absolute

owners of the suit schedule property and agreed to sell the

suit schedule property for consideration of Rs.3,99,375/-

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and it was agreed that, the plaintiff shall pay an amount of

Rs.1,50,000/- towards part consideration amount.

Accordingly, the plaintiff paid a sum of Rs.1,50,000/- to

the defendants and the defendants executed an

agreement of sale on 13.05.2005 and it was agreed that

balance consideration amount to be paid at the time of

registration of the sale deed. The plaintiff requested the

defendants to receive the balance consideration and

execute the registered sale deed. But the defendants

went on postponing to receive the balance consideration

amount and execute the registered sale deed. The

plaintiff in order to show his readiness and willingness to

perform his part of contract, got issued a legal notice. The

defendants refused to receive the legal notice.

17. The plaintiff in order to prove that defendants

executed the agreement of sale dated 13.05.2005, the

plaintiff produced the agreement of sale marked as Ex.P1

and LTM of the defendants are marked as Exs.P1(a), (c)

and (d) and signature of PW.1 is marked as Ex.P1(e) and

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produced endorsement dated 14.06.2005 which bears the

signature of defendant No.4 and the said signature is

marked as Ex.P2(a) and also produced the endorsement

which bears the signature of defendant No.4 marked as

Ex.P4 dated 13.11.2006. Signature of defendant marked

as Ex.P4(a) and signature of plaintiff is marked as

Ex.P4(b) and Ex.P5 is the RTC extract, Ex.P6 is the legal

notice issued to the defendants calling upon the

defendants to receive the balance consideration amount

and executed the registered sale deed. Exs.P7 and 8 are

the postal receipts and Ex.P9 is the copy of the complaint

filed before the postmaster, Exs.P10 and 11 are the postal

copy of the notice and postal receipt containing 4 receipts.

18. In the course of cross examination, nothing has

been elicited from the mouth of this witness to disbelieve

the examination-in-chief. The plaintiff also examined one

witness as Jayaramegowda as PW.2, who has deposed

that defendants have agreed to sell the suit schedule

property in favour of the plaintiff for consideration of

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Rs.3,99,375/- and the defendants executed the agreement

of sale dated 13.05.2005 and the plaintiff paid a sum of

Rs.1,50,000/- as an advance amount by way of cash. It

was agreed that the defendants shall execute the

registered sale deed by receiving the balance

consideration amount. He identified his signature as

Ex.P1(b) on Ex.P1 and nothing has been elicited from the

mouth of this witness to disbelieve his examination-in-

chief.

19. Defendant No.4 was examined as DW.1 and he

reiterated the written statement averments in the

examination-in-chief and produced death certificate of

Munishamappa marked as Ex.D1. Ex.D2 is the certified

copy of the orders passed in the case No.6345/62-63.

Ex.D3 is the RTC extract.

20. From the perusal of examination-in-chief, DW.1

admits regarding the execution of agreement of sale, but

denies the consideration amount. He has deposed that

consideration amount agreed was Rs.21,74,375/- and also

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admitted regarding having received the amount of

Rs.2,05,000/- as advance amount from the plaintiff and

admits about the execution of agreement of sale as per

Ex.P1. In view of the admission of defendants, as they

have agreed regarding the execution of Ex.P1 and

receiving of advance amount of Rs.1,50,000/-, the plaintiff

established the execution of agreement of sale by

defendants in favour of the plaintiff. In order to establish

that the plaintiff was/is ready and willing to perform his

part of obligation, the plaintiff has also issued a legal

notice dated 18.12.2006 and 08.06.2007 marked as

Exs.P6 and P10 respectively, but the defendants refused to

receive the legal notices issued by the plaintiff. The

defendants failed to perform their obligation as per the

terms and conditions of the Ex.P1. The plaintiff has

proved that he was/is ready and willing to perform his part

of contract, on the contrary, the defendants were not

ready and willing to perform their part of contract.

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21. Though the trial Court has recorded a finding

that the plaintiff has proved the execution of agreement of

sale by the defendants, in favour of the plaintiff and also

defendants received a sum of Rs.1,50,000/- as earnest

money and executed an agreement of sale and also the

plaintiff has proved that he was/is ready and willing to

perform his part of contract. But the trial Court dismissed

the suit of the plaintiff for specific performance of contract

solely on the ground that if the suit is decreed for specific

performance of contract, the defendants will be put to

hardship. On the other hand, if the said relief is not

granted no harm will cause to the plaintiff.

22. From the perusal of the written statement filed

by the defendants, defendants have not pleaded in regard

to the hardship, in case if the suit for specific performance

of contract is granted, no issue was framed by the trial

Court. when such plea is not raised in the written

statement, the trial Court could not have entertained the

plea. In order to consider whether the trial Court has

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rightly exercised the discretion, Section 20 of the Specific

Relief Act, 1963, which reads as under:

20. Discretion as to decreeing specific performance.--

(1)The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.

(2)The following are cases in which the court may properly exercise discretion not to decree specific performance:--

(a)where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or

(b)where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-

performance would involve no such hardship on the plaintiff; or

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(c)where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

23. The Court while exercising the discretion under

Section 20 of the specific Relief Act, the Court has to

exercise judicial discretion under clause (b) of subsection

(2) 20 of old Act, of Specific Relief Act, which provides that

where the performance of contract which involves some

hardship on the defendant which he did not foresee, where

as his non performance which involves no such hardship

on the plaintiff. The defendants have not pleaded

regarding the hardship in the written statement. The

Hon'ble Apex Court in the case of BHEEMANENI MAHA

LAKSHMI VS. GANGUMALLA APPA RAO REPORTED IN AIR

2019 SC 3013 held that "The vendor sought to raise the

plea of hardship for the first time before the Court and this

Court did not permit the vendor raised such plea of

hardship by observing that no plea as to the hardship if

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relief of specific performance was granted by the

defendants".

"Vendor in the written statement nor any issue was

framed that the plaintiff/purchaser could be compensated

in terms of the money in lieu of decree for specific

performance, such plea cannot be entertained for the first

time in the appeal by way of SLP, more so, when there are

concurrent findings that the plaintiff was/is ready and

willing to perform his part of the contract has been

recorded by the lower courts. Therefore, the plea raised on

behalf of the vendor on hardship cannot be permitted to

be raised now, more particularly when no such plea was

raised/taken in the written statement."

Emphasis supplied

24. The said aspect was not considered by the

courts below and committed an error in passing the

impugned judgments. The trial Court has not properly

exercised the discretion under Section 20 of Specific Relief

Act. Even the first Appellate Court without properly

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considering the material on record has confirmed the

judgment and decree passed by the trial Court. The

judgments relied upon by the learned counsel for the

defendants are not applicable to the present case in hand.

There is no dispute with regard to the principles laid down

in the aforesaid judgments. In view of the above

discussion, I answer substantial question of law 1 and 2 in

the negative.

25. Accordingly, I proceed to pass the following:

ORDER

The appeal is allowed.

The impugned judgments and decrees passed by the courts below are hereby set aside. The suit of the plaintiff is decreed.

The defendants are directed to execute the registered sale deed by receiving the balance consideration amount in favour of the plaintiff within 3 months from the date of certified copy of this judgment and further the plaintiff is directed to deposit balance