R Srinivasa vs A Shankarappa
2025 Latest Caselaw 4966 Kant

Karnataka High Court

R Srinivasa vs A Shankarappa on 12 March, 2025

Author: Ravi V Hosmani

Bench: Ravi V Hosmani

                                   1



       IN THE HIGH COURT OF KARNATAKA AT BENGALURU
          DATED THIS THE 12TH DAY OF MARCH, 2025
                              BEFORE
        THE HON'BLE MR. JUSTICE RAVI V. HOSMANI
       REGULAR SECOND APPEAL NO. 980 OF 2013 (SP)

BETWEEN:

R. SRINIVASA,
AGED ABOUT 67 YEARS,
S/O LATE B. RAMAIAH,
R/OF UTHANUR VILLAGE AND POST,
DUGGASANDRA HOBLI,
MULBAGAL TALUK,
KOLAR DISTRICT - 563 131.
                                              ...APPELLANT
[BY SRI C.R. SUBRAMANYA, ADVOCATE (PH)]

AND:

1.     A. SHANKARAPPA,
       S/O LATE GANDHODI,
       AGED ABOUT 52 YEARS,
       TEACHER BY PROFESSION,
       R/O THOTALAPALYA,
       MULBAGAL TOWN,
       KOLAR DISTRICT - 563 131.

2.     S. RAJESH,
       S/O A.S HANKARAPPA,
       AGED ABOUT 26 YEARS,
       R/O. THOTALAPALYA,
       MULBAGAL TOWN,
       KOLAR DISTRICT.

3.     SMT. REENA JANARDHANAREDDY,
       W/O P.S. JANARDHANAREDDY,
       AGED ABOUT 33 YEARS,
       R/O NO.99, DIAMOND WEST APARTMENT,
                                   2



      B.D.A. MAIN ROAD,
      OPPOSITE KEMPORT,
      NANJAREDDY COLONY,
      KONENA AGRAHARA,
      BANGLAORE - 560 017.
                                              ...RESPONDENTS
[BY SRI R.KRISHNA REDDY, ADVOCATE FOR R3 (PH);
    R1 & R2 ARE SERVED]

      THIS RSA FILED UNDER SECTION 100 OF CPC AGAINST THE
JUDGMENT DECREE DATED 16.04.2013 PASSED IN R.A.NO.125/2010
ON THE FILE OF PRINCIPAL DISTRICT AND SESSIONS JUDGE, KOLAR,
PARTLY ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGMENT
AND DECREE DATED 10.08.2010 PASSED IN OS.NO.304/2006 ON THE
FILE OF C/C III ADDITIONAL SENIOR CIVIL JUDGE, KOLAR.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 15.11.2024, THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:

    CORAM:      HON'BLE MR JUSTICE RAVI V HOSMANI

                         CAV JUDGMENT

Challenging judgment and decree dated 16.04.2013 passed

by Principal District and Sessions Judge, Kolar, in R.A.no.125/2010,

this appeal is filed.

2. Brief facts as stated are that appellant herein (plaintiff)

filed O.S.no.304/2006 against respondents herein (defendants no.1

and 2 respectively), for specific performance of agreement of sale

dated 02.02.2006 in respect of properties measuring 1 Acre 12

guntas, including 1 gunta phut kharab of dry land in Sy.no.280/1 of

Utnoor village, Dugasandra Hobli, Mulbagilu Taluk ('item no.1' for

short) and 2 Acres 15½ guntas out of 4 Acres 31 guntas in

Sy.no.64 of Halaganahalli Village, Dugasandra Hobli, Mulbagilu

Taluk ('item no.2' for short), (referred together as 'suit

properties' herein).

3. In plaint, it was stated, defendants no.1 and 2 had

executed agreement of sale on 02.02.2006 agreeing to sell suit

properties for total sale consideration of Rs.1,90,000/-, after

receiving Rs.50,000/- as advance sale consideration and agreeing

to execute sale deed by receiving balance amount. And since item

no.1 was in name 1st defendant's father, he had to get his name

mutated in records. And on 14.03.2006, vide M.R.no.8/2005-06,

defendant no.1 got his name mutated in respect of item no.1.

Thereafter, plaintiff demanded defendants no.1 and 2 to execute

registered sale deed by receiving balance sale consideration. But,

defendants kept postponing it. Hence, on 06.07.2006, plaintiff got

issued legal notice dated 06.07.2006 calling upon defendants no.1

and 2 to execute sale deed. They failed to respond. Plaintiff came

to know that they had fraudulently sold suit properties to

defendant no.3, even though plaintiff was ready and willing to

perform his part of contract. Therefore, sale was not binding on

him. Hence, he filed suit.

4. On appearance, defendant no.1 filed written statement

generally denying plaintiff's assertions about agreement of sale

dated 02.02.2006 in toto and specifically alleging that such

agreement was created. It was specifically pleaded that suit

property was sold in favour of defendant no.3 on 04.06.2006 as

they needed money for marriage of defendant no.1, which was

performed on 07.08.2006. It was asserted that plaintiff was fully

aware of facts and filed suit for harassing him. Defendant no.2 filed

a memo adopting written statement of defendant no.1.

5. Subsequent to impleading, defendant no.3 filed separate

written statement, stating that defendant no.1 along with his wife

Varalakshmi and children, S.Anitha, S.Radhika, S.Shilpashree and

S.Rajesh were owners in possession of suit properties. And

defendant no.3 was bonafide purchaser in possession from date of

purchase i.e. 05.06.2006. It was stated, though plaintiff and

defendants no.1 and 2 were residents of Uthanoor village, in cause

title, plaintiff had deliberately given wrong address of defendants

no.1 and 2. It was further stated plaintiff being aware of sale by

defendants no.1 and 2 to defendant no.3, had created sale

agreement dated 02.02.2006 with intention to defraud defendant

no.3. It was stated defendant no.1 had not disclosed about earlier

transaction. Therefore, same does not bind defendant no.3.

6. It was also stated that after purchase, defendant no.3

had approached revenue officials and got his name mutated in

revenue records without objection from plaintiff. It was stated,

defendant no.3 had invested Rs.2 Lakhs for drilling bore-well, fixing

pump-set and planted teak and other valuable trees and also

constructed a guest house by spending Rs.75,000/- each, apart

from Rs.1 Lakh towards wire fencing with stone pillars along

boundaries of suit properties. He had also spent Rs.25,000/- for

making land fertile and appointed watchman to look after suit

properties. Thus, defendant no.3 had spent in all Rs.5 Lakhs

towards improvements. Further, suit properties were earlier

mortgaged with PCARD Bank, Mulbagilu, which was got discharged

by defendant no.3. Therefore, defendant no.3 was bonafide

purchaser and suit was filed with intention to grab suit properties,

was liable to be dismissed.

7. Based on above pleadings, trial Court framed following

issues:

1. Whether the plaintiff proves that on 02.02.2006 he had made agreement for sale with defendant no.1 and 2 for purchase of suit schedule property for Rs.1,90,000/- and on the same day he had given Rs.50,000/- after execution of agreement for sale?

2) Whether the plaintiff proves that he was and he is ready and willing to perform his part of contract by paying remaining amount of Rs.1,50,000/-?

3) Whether the defendant no.3 proves that he is bonafide purchaser of suit schedule property for valuable consideration without having knowledge of sale transaction between plaintiff and defendant no.1?

4) Whether plaintiff is entitled for the relief claimed?

5) What decree or order?

ADDITIONAL ISSUE FRAMED ON 5-8-2009

1) Whether the plaintiff proves that sale deed dt:5-6- 2006 executed by the defendants 1 and 2 in the name of defendant No.3 is null and void and not binds him?

8. In support of his case, plaintiff examined himself and

four others as PWs.1 to 5 and got marked Exhibits P.1 to P.10. On

other hand, defendants no.1 and 3 examined themselves and two

others as DWs.1 to 4 and got marked Exhibits D.1 to D.26.

9. However, trial Court answered issues no.1, 2, 4 and

additional issue no.1 in affirmative, issue no.3 as not arising for

consideration and issue no.5 by decreeing suit, directing

defendants no.1 and 2 and their family members to execute

registered sale deed in favour of plaintiff, within 90 days etc.

10. Aggrieved, defendant no.3 filed R.A.no.125/2010 on

various grounds and also filed I.A.no.2 under Order XLI Rule 27

read with Section 151 of CPC for production of additional evidence.

Based on same, first appellate Court framed following points:

1. Whether the finding of the trial Court that the plaintiff has proved that on 02.02.2006 defendant nos.1 and 2 executed an agreement to sell the suit schedule property for a consideration amount of Rs.1,90,000/- and on the same day, they received Rs.50,000/-is illegal?

2. Whether the finding of the trial court that the plaintiff has proved that he was ready and willing to perform his part of the contract by paying remaining amount of Rs.1,40,000/- is illegal?

3. Whether the finding of the trial court that in view of Section 79 (A) of Karnataka Land Reforms Act, the sale deed in favour of defendant no.3 executed by

defendant Nos. 1 and 2 and their family members is not valid in the eye of law, is illegal?

4. Whether the judgment of the trial court without giving finding on issue no.3 as to whether defendant no.3 is or is not a bona fide purchaser of the suit schedule properties for valuable consideration without notice, is illegal?

5. Whether the judgment of the trial court granting specific performance of contract in favour of plaintiff is illegal?

6. Whether the defendant no.3 is entitled for producing documents as additional evidence?

7. What order?

11. On consideration, first appellate Court answered points

no.1, 2 and 6 in negative, points no.3 to 5 in affirmative and point

no.7 by dismissing I.A.no.2, allowed appeal and set-aside

judgment and decree passed by trial Court and holding plaintiff

entitled for refund of Rs.50,000/- with interest at rate of 12% p.a.

from date of agreement till payment by defendants no.1 and 2.

Aggrieved, plaintiff was in appeal.

12. Sri CR Subramanya, learned counsel for plaintiff

submitted, plaintiff had filed suit for specific performance of Ex.P.1

- agreement of sale executed by defendants no.1 and 2 on

02.02.2006 in respect of suit properties, by acknowledging receipt

of Rs.50,000/- as advance sale consideration and agreeing to

receive remaining amount at time of execution of registered sale

deed. It was submitted, time was not essence of contract as sale

deed was agreed to be executed after mutation of revenue records

in name of defendant no.1. Moreover, defendants no.1 and 2 had

not replied to Ex.P2 - legal notice and defendant no.2 had not filed

separate written statement, but adopted written statement of

defendant no.1.

13. It was submitted, though trial Court failed to answer

issue no.3, it rightly decreed suit after due appreciation of material

on record, especially as PWs.3 and 4 identified signatures of

defendant no.1 on Ex.P1 and held plaintiff was ready and willing to

perform his part of contract. But, as DW.2 (defendant no.3)

admitted that other than suit property, he had no agricultural

property, trial Court inferred purchase of suit property was in

violation of Section 79 of Karnataka Land Reforms Act ('KLR Act' fr

short) and decreed suit.

14. It was contended, when no finding was recorded on issue

no.3, first appellate Court ought to have remanded matter, instead

of setting aside trial Court decree, ignoring above admissions by

defendant no.3. It was submitted though witnesses admitted

execution of Ex.P.1, merely on ground of denial by defendant no.1

about execution of Ex.P1 and sale deed in favour of defendant

no.3, it held defendant no.3 was a bonafide purchaser.

15. It also erred in denying specific performance merely on

ground that daughters of defendant no.1 had joined in execution of

sale deed in favour of defendant no.3, but they had not joined

insofar as Ex.P1. It erroneously examined validity of transactions

as violation of provisions of KLR Act, had to be examined by

revenue authorities and not by Civil Court. In support of

submissions, learned counsel relied on decision of Hon'ble Supreme

Court in Sughar Singh v. Hari Singh (Dead by LRs.) & Ors.

reported in AIR 2021 SC 5581 and decision of this Court in M.

Narayanaswamy v. S. Narasimhappa, reported in HCR 2018

Kant. 328. On above grounds sought for allowing appeal.

16. On other hand, Sri R. Krishna Reddy, learned counsel for

defendant no.3 opposed appeal. It was submitted defendants no.1

and 2 had executed Exs.D1 and 2 - registered sale deed in favour

of defendant no.3 and he was bonafide purchaser. Thereafter, he

had spent lakhs of rupees for development and was in possession.

Though, trail Court erroneously decreed suit on ground of violation

of Section 79 of KLR Act, appellate Court rightly held violation, if

any, was to be dealt by revenue authorities and not Civil Court.

And on examination of Ex.P1, first appellate Court noted it to be

unregistered and as such held agreement was not proved. It noted

Ex.P.1 was executed only by defendants no.1 and 2, while Exs.D1

and D.2 were by all family members. On above grounds, sought

dismissal of appeal.

17. Heard learned counsel, perused impugned judgment and

decree and records.

18. This appeal is by plaintiff against divergent findings in

suit for specific performance of agreement of sale. And appeal was

admitted on 06.02.2019 on following substantial questions of law:

(i) Whether learned District Judge was justified in dismissing suit for specific performance having come to conclusion that plaintiff has proved issues no.1 and 2?

(ii) Whether learned District Judge was justified in not remanding suit to trial Court having observed that trial Court has not given finding on issue no.3?

(iii) Whether learned District Judge was justified in ratifying an act committed by third defendant against Section 79 (A) of Karnataka Land Reforms Act, 1961?

19. Plaintiff's suit for specific performance of Ex.P1 -

agreement of sale is based on assertion that defendants no.1 and 2

being owners of suit property had agreed to sell suit property to

plaintiff under agreement of sale dated 02.02.2006 for total sale

consideration of Rs.1,90,000/-, after receiving Rs.50,000/- as

advance and agreeing to execute sale deed by receiving balance

sale consideration, before or at time of execution of sale deed. And

further assertion about stipulation requiring defendant no.1 to get

his name mutated in revenue records before execution of sale

deed. Plaintiff further asserted that defendant no.1 got his name

mutated on 14.03.2006 and demanded execution of sale deed by

receiving balance amount. It was further stated that there was

non-compliance of said demand as well as failure to respond to

Ex.P.2 - legal notice, giving rise to cause of action for filing of suit.

20. On appearance, defendants specifically contended that

Ex.P1 - agreement of sale was created and generally denied entire

plaint averments. They also opposed suit on ground that suit

property was sold to defendant no.3 even to knowledge of plaintiff

and filing of present suit was with intention to harass defendants.

21. During trial, plaintiff examined as PW.1 deposed in terms

of plaint averments, got marked agreement of sale dated

02.02.2006 as Ex.P.1, legal notice dated 06.07.2006 as Ex.P.2,

postal receipts/acknowledgements and UCP receipt as Exs.P.3 to

P6, certified copies of sale deeds dated 05.06.2006 as Ex.P.7,

Written statement of defendant no.1 as Ex.P8 and photocopy of

written statement as Ex.P9. Though, cross-examined, there were

no material elicitations.

22. Plaintiff also examined witnesses to Ex.P.1 as PWs.2 to

5, who consistently deposed in terms of plaint, identified signatures

of defendants no.1 and 2 on Ex.P.1 and supported plaintiff. Despite

cross-examination, nothing material was elicited from them.

23. In rebuttal, defendant no.1 was examined as DW.1 and

defendant no.3 as DW.2. In his examination-in-chief, on one hand,

DW.1 denied execution of agreement of sale, but in para no.4 of

his affidavit examination-in-chief, he stated when plaintiff refused

to pay money on demand by defendant no.1 for his daughter's

marriage and as suggested by plaintiff, suit property was sold to

defendant no.3. In cross-examination, after initially denying above

statement, DW.1 admits it on being confronted.

24. Defendant no.3, examined as DW.2 deposed in terms of

written statement. In cross-examination, it is elicited that she was

resident of Bengaluru, her husband was a businessman and at time

of purchase of suit property, she did not have any other

agricultural land, she was not an agriculturist and had not obtained

any permission from Government for purchase.

25. DW.3 is an electrical contractor, who deposed that he

had assisted him in getting electricity connection for bore-well sunk

by defendant no.3 in suit property. DW.4 is a coolie employed as

watchman for suit property by defendant no.3. Both DWs 3 and 4

stated that suit property was in possession of defendant no.3 from

date of purchase and she had developed it. Copies of sale deeds

dated 05.06.2006, nil encumbrance certificates, record of rights,

Patta book, survey sketch, bank certificate, photos, money paid

receipts, electricity connection to bore-well and electrical

equipment purchase bills were marked as Exs.D1 to D26.

26. While passing impugned judgment and decree, trial

Court referred to deposition of plaintiff as PW1 in terms of plaint. It

also referred to deposition of attesting witnesses - PWs.2 to 5. It

observed PWs 2, 3 and 5 identified their signatures on Ex.P.1,

PW.4 identified signatures of plaintiff and defendant no.1 on

Ex.P.1. Based on said observation, it held Ex.P.1 as proved.

27. Thereafter, referring to deposition of DW.2 wherein, she

admitted about not having any other agricultural land, not being an

agriculturist and not obtained permission from government for

purchase of suit property and referring to Section 79 of KLR Act,

held sale in favour of defendant no.3 as illegal, null and void.

Based on said findings, it decreed suit.

28. In appeal, first appellate Court held finding of trial Court

about sale deed in favour of defendant no.3 being invalid under

Section 79 of KLR Act, was illegal. It also held, trial Court erred in

not giving specific finding on issue no.3.

29. During re-appreciation, it referred to respective

pleadings of parties as well as depositions. It observed PW.1

deposed in terms of plaint and identified his signature as well as

those of defendants no.1 and 2. And PWs 2 and 3 - attesting

witnesses and PW4 - scribe supported plaintiff's deposition.

30. It also referred to deposition of defendant no.1, wherein

he totally denied execution of Ex.P.1. But, it observed such denial

was contrary to admission in para no.4 of written statement,

wherein there was clear reference to agreement of sale. Since,

defendant no.2 adopted written statement of defendant no.1, there

was admission of Ex.P1 by both of them.

31. It also noted similar contradictory stand. It observed that

in paras no.2 to 4 of his affidavit - examination-in-chief, DW1

clearly stated about approaching plaintiff to receive sale

consideration for performing his daughter's marriage, refusal by

plaintiff amounting to plaintiff not being ready and willing to

perform his part of contract and alienation in favour of defendant

no.3 being in pursuance of plaintiff's suggestion, amounted to clear

admission about execution of Ex.P.1-agreement of sale. Therefore,

it confirmed trial Court finding about due execution of Ex.P1.

32. Insofar as readiness and willingness, it observed that

there was no cross-examination of PW.1 on this aspect. It observed

in Ex.P2 - legal notice, plaintiff had specifically stated about his

readiness and willingness to perform his part of contract. Taking

note of conduct of defendant no.1 taking contradictory stand in

pleading as well as deposition, and also fact that IA no.2 was filed

by plaintiff to deposit balance amount, it held plaintiff was ready

and willing to perform his part of contract.

33. Insofar as finding of trial Court about sale in favour of

defendant no.3 being in violation of Section 79 of KLR Act, it

observed, Section 83 of said Act specifically empowered prescribed

authority to decide contravention; while Section 132 barred

jurisdiction of Civil Court. Thus trial Court was divested of

jurisdiction to decide violation. Moreover, this Court in Tamil

Chelvan v. State of Karnataka and others (in

W.P.no.38276/2013 and connected cases disposed of on

25.01.2016) took note of amendment to Section 79-A and 79-B of

Karnataka Land Reforms Act, 1961 vide notification dated 13th

July, 2020, Karnataka Land Reforms (Amendment) Ordinance,

2020, omitting Sections 79 A and B, retrospectively, and

consequently held all pending proceedings automatically abated.

Even on said ground, finding of trial Court about sale in favour of

defendant no.3 violating Section 79 of KLR Act would be contrary

to law.

34. While deciding whether defendant no.3 was a bonafide

purchaser and whether trial Court was justified in granting relief of

specific performance in favour of plaintiff, it referred to decision of

Hon'ble Supreme Court in case of Balkrishna and Another v.

Bhagawan Das (D) by LRs and Others reported in AIR 2008

SC 1786 and Division Bench decision of this Court in

S.Kugashankar v. Subhash Chand Goyal and Others, reported

in ILR 2006 Kar. 3689 that specific relief may not be granted if

defendant would be put to undue hardship, which he did not

foresee at time of agreement. It thereafter, noted there was

sufficient material to indicate that suit properties were ancestral

properties of defendant no.1 and his children, some of whom were

not signatories to Ex.P.1, but had signed Exs.D.1 and 2 - sale

deeds in favour of defendant no.3. It also took note of specific

evidence led by defendant no.3 about improvements made to

demised land and grant of specific performance was likely to lead

to multiplicity of proceedings. On said reasoning, it answered

points no.4 and 5 in affirmative.

35. Thus main reason for first appellate Court to reverse trial

Court decree despite holding Ex.P.1 - agreement of sale as duly

proved is its conclusion that suit property was ancestral joint family

property and all family members would have share in it. Thus,

Ex.P.1 executed only by defendants no.1 and 2 (without consent of

other family members); whereas Exs.D1 and D2 - sale deeds were

executed by all family members in favour of defendant no.3, it held

Ex.P1 was invalid. Consequently, it modified decree by holding

plaintiff was entitled for refund of Rs.50,000/- with interest at 12%

per annum from date of agreement of sale till payment, from

defendants no.1 and 2.

36. Thus, finding about due execution of Ex.P.1 - agreement

of sale by defendants no.1 and 2 in favour of plaintiff, as well as

about plaintiff being ready and willing to perform his part of

contract, is concurrent. While, defendants are not aggrieved by

modification of decree, same is challenged only by plaintiff relying

on ratio in Sughar Singh and M. Narayanaswamy (supra).

37. In Sughar Singh (supra), Hon'ble Supreme Court, while

interpreting Section 20 of Specific Relief Act, 1963 ('SRA' for

short) as amended by Act no.18 of 2018 held, once agreement was

found to be duly executed and plaintiff ready and willing to perform

his part of agreement, grant of relief of specific performance

cannot be denied. It also held, though amendment of Section 20 by

amendment of year 2018, was not retrospective, position of law

declared by it would act as guide for period prior to amendment.

38. In M. Narayanaswamy (supra), this Court held, where

defendant was an agriculturist dependant on suit property for his

livelihood, unless claim was rebutted by plaintiff, denial of specific

performance of agreement of sale and ordering for refund of

advance amount with interest would be justified, in view of Section

20 (2) (b) of SRA. Indeed, plea of hardship is not specifically set-

up by defendants herein calling for adjudication. And even if

daughters of defendant no.1 may have share in suit property, suit

for specific performance could be enforced against defendants no.1

and 2. But , it is also seen that plaintiffs did not file any application

under Section 12 (3) of SRA.

39. Hon'ble Supreme Court in Janardhan Das and Ors. v.

Durga Prasad Agarwalla and Ors. reported in 2024 SCC OnLine SC

2937, held, where agreement of sale was not executed by or on

behalf of all co-owners, direction for refund of lump-sum amount

(inclusive of interest) to plaintiff instead of decree for specific

performance was justified.

40. Hence, substantial questions of law no.1 and 2 are

answered in affirmative; while third is answered in negative.

Consequently, following:

ORDER

Appeal is dismissed. However, taking note of fact that

appellant had paid Rs.50,000/- in year 2006 and 18 years have

lapsed and also fact that defendants have not deposited decreetal

amount, following exemplar in Janardan Das (supra), it would

appear appropriate in interest of justice to direct defendants no.1

and 2 to pay sum of Rs.2,50,000/- instead of Rs.50,000/- with

interest at rate at 12% p.a. which shall be deposited by them

before trial Court within two months from date of this order.

Sd/-

(RAVI V. HOSMANI) JUDGE

Psg*/GRD