Karnataka High Court
Hulgappa S/O. Bassappa Simblikar And ... vs M.A.Gani S/O. M.A.Wahid And Ors on 17 September, 2024
Author: S.Sunil Dutt Yadav
Bench: S.Sunil Dutt Yadav
-1-
NC: 2024:KHC-K:7022-DB
RFA No. 200009 of 2016
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH ®
DATED THIS THE 17TH DAY OF SEPTEMBER, 2024
PRESENT
THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV
AND
THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
REGULAR FIRST APPEAL NO.200009 OF 2016 (SP)
BETWEEN:
1. HULGAPPA S/O BASSAPPA SIMBLIKAR,
AGE: 43 YEARS, OCC: AGRICULTURE,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR, DIST. RAICHUR-584101.
2. YELLAPPA S/O BASSAPPA SIMBLIKAR,
AGE: 37 YEARS, OCC: AGRICULTURE,
R/O. KASABA, LINGASUGUR,
TQ. LINGASUGUR, DIST. RAICHUR-584101.
Digitally signed ...APPELLANTS
by RENUKA
Location: HIGH (BY SRI AJAY KUMAR A.K., ADVOCATE)
COURT OF
KARNATAKA AND:
1. M. A. GANI S/O M. A. WAHID,
AGE:51 YEARS,
OCC: AGRI & BUSINESS
R/O LINGASUGUR CHAVANI,
TQ. LINGASUGUR,
DIST. RAICHUR-584101.
2. LINGAPPA S/O YEMNAPPA DEVIKERI,
AGE: 53 YEARS, OCC: AGRICULTURE,
R/O LINGASUGUR CHAVANI,
-2-
NC: 2024:KHC-K:7022-DB
RFA No. 200009 of 2016
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
3. AMARESH S/O YELLAPPA PUJARI,
AGE: 41 YEARS, OCC: AGRICULTURE,
R/O LINGASUGUR CHAVANI,
TQ. LINGASUGUR, DIST. RAICHUR-584 101.
4. BASAVARAJ S/O YALLAPPA,
AGE: 13 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. DURAGAMMA W/O. YALLAPPA,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR, DIST. RAICHUR-584 101.
5. BASAMMA D/O YALLAPPA,
AGE: 11 YEARS, MINOR
U/G OF HIS NATURAL MOTHER
SMT. DURAGAMMA W/O. YALLAPPA,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
6. ASHWINI D/O YALLAPPA,
AGE: 11 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. DURAGAMMA W/O YALLAPPA,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
7. SMT. DURAGAMMA W/O YALLAPPA,
AGE: 35 YEARS, OCC: AGRICULTURE,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
8. SHARANABASAVA S/O HULAGAPPA,
AGE: 17 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. HULIGEMMA W/O HULAGAPPA
R/O KASABA, LINGASUGUR,
-3-
NC: 2024:KHC-K:7022-DB
RFA No. 200009 of 2016
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
9. MALAPPA S/O HULAGAPPA,
AGE: 13 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. HULIGEMMA W/O HULAGAPPA,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
10. SANTOSH S/O HULAGAPPA,
AGE: 11 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. HULIGEMMA W/O HULAGAPPA,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
11. BANDEPPA S/O HULAGAPPA,
AGE: 11 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. HULIGEMMA W/O HULAGAPPA,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
12. BASAMMA D/O YALLAPPA,
AGE: 7 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. HULIGEMMA W/O HULAGAPPA,
R/O. KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
13. MANJULA D/O YALLAPPA,
AGE: 7 YEARS, MINOR,
U/G OF HIS NATURAL MOTHER
SMT. HULIGEMMA W/O HULAGAPPA,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584 101.
-4-
NC: 2024:KHC-K:7022-DB
RFA No. 200009 of 2016
14. SMT. HULIGEMMA W/O HULAGAPPA,
AGE: 38YEARS, OCC: AGRICULTURE,
R/O KASABA, LINGASUGUR,
TQ. LINGASUGUR,
DIST. RAICHUR-584101.
...RESPONDENTS
(BY SRI AMEET KUMAR DESHPANDE, SENIOR COUNSEL FOR
SRI GANESH NAIK, ADVOCATE FOR R1 AND R2;
SRI KRUPA SAGAR PATIL, ADVOCATE FOR R3;
SRI D.P. AMBEKAR, ADVOCATE FOR R7 AND R14;
R4 TO R6 ARE MINORS U/G OF R7,
R8 TO R13 ARE MINORS U/G OF R14)
THIS REGULAR SECOND APPEAL IS FILED UNDER
SECTION 96 OF CPC, PRAYING TO ALLOW THE APPEAL BY
SETTING ASIDE THE JUDGMENT AND DECREE DATED
18.01.2016 PASSED IN O.S.NO.25/2012 BY THE SENIOR CIVIL
JUDGE, LINGASUGUR AND CONSEQUENTLY DISMISS THE SUIT
OF THE PLAINTIFFS WITH COST THROUGHOUT.
THIS APPEAL HAVING BEEN RESERVED FOR JUDGMENT,
COMING ON FOR PRONOUNCEMENT THIS DAY,
ANANT RAMANATH HEGDE J., DELIVERED/PRONOUNCED
THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV
AND
HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE
CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE) This Regular First Appeal is by defendants No.1 and 2, challenging the decree for specific performance of the contract dated 05.02.2010.
-5-
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016
2. The Trial Court has held that the agreement to sell the suit property for Rs.64,75,000/- executed by defendants No.1 and 2 is proved. Defendants No.1 and 2 were directed to execute the registered sale deed by receiving the balance consideration of Rs.59,75,000/-, deducting Rs.5,00,000/- paid as advance consideration amount. The Trial Court has rejected the defendants' defence of denial of execution of the agreement for sale.
3. The contention of defendants No.3 to 13, who are the family members of defendants No.1 and 2 that they too have right and interest in the suit schedule property, is not accepted by the Trial Court.
4. Defendants No.1 and 2, referring to Section 79B of the Karnataka Land Reforms Act, 1961 ('the Act of 1961' for short) had also taken a stand that plaintiffs No.1 to 3 not being the members of the 'same family' could not enter into an agreement to purchase agricultural land, which is the subject matter of the suit. The Trial Court has rejected the said contention as well. -6-
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016
5. The Trial Court has given a specific finding that, the plaintiffs were ready and willing to perform their part of the contract.
6. Learned counsel appearing for the appellants Sri Ajaykumar A.K. initially urged that the alleged agreement for sale is unstamped and the document ought to have been impounded, and without paying the requisite stamp duty and penalty, the agreement for sale could not have been relied upon by the Trial Court. However, later, he did not press the contention in view of the law laid down by the Co-ordinate Bench of this Court in Digambar Warty v/s District Registrar, 2013(4) KLJ 267.
7. Learned counsel for the appellants has urged that readiness and willingness on the part of the plaintiffs to perform their part of the contract is not established. He also urged that the plaintiffs were incapable of paying huge balance consideration amount of Rs.59,75,000/-.
8. Sri D. P. Ambekar, learned counsel appearing for respondents No.4 to 14 would contend that -7- NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 respondents No.4 to 14 have filed a suit for partition and separate possession of the suit property and in that suit, the present plaintiff No.3 had filed written statement and admitted that the transaction referred to in the present suit was a loan transaction. The copy of the written statement in the said suit is produced before this Court to substantiate this contention.
9. It is also urged that the property being the joint family property of the defendants, there cannot be a decree for specific performance, as defendants No.7 to 14 are not signatories to the agreement for sale.
10. Sri Krupa Sagar Patil, learned counsel appearing for respondent No.3/plaintiff No.3 submits that the transaction was a loan transaction and defendants No.1 and 2, during the pendency of the appeal have paid Rs.5,00,000/- to plaintiff No.3 towards repayment of loan amount of Rs.5,00,000/-.
11. Learned Senior Counsel Sri Ameet Kumar Deshpande appearing for the contesting respondents No.1 -8- NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 and 2/plaintiffs No.1 and 2 urged that the plaintiffs have proved the execution of agreement for sale. Readiness and willingness to perform their part of contract is also established. The agreement for sale is marked in evidence without any objection relating to the insufficiency of the stamp. The contention relating to the insufficiency of stamp on the document cannot be raised for the first time in appeal in view of the bar contained in Section 35 of the Karnataka Stamp Act.
12. It is urged that Section 79B of the Act of 1961 is omitted with retrospective effect, as such, it is to be presumed that Section 79B was never in the statute and there was no bar for the plaintiffs to enter into an agreement to purchase agricultural land.
13. The readiness and willingness on the part of the plaintiffs to perform their part of the contract was never doubted and disputed by the defendants. Learned Senior Counsel would further submit that the conduct of the -9- NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 defendants disentitle them to seek any equitable relief in a suit of this nature. Hence, urged to dismiss the appeal.
14. This Court has considered the contentions raised at the Bar and perused the records.
15. The following points would arise for consideration:
(i) Whether the appellants/defendants No.1 and 2 have proved that the agreement dated 05.02.2010 is forged and concocted?
(ii) Whether the agreement for sale dated 05.02.2010 is hit by Section 79B of the Karnataka Land Reforms Act, 1961?
(iii) Whether the contention that the agreement for sale dated 05.02.2010 is hit by Section 79B of the Act of 1961 does survive for consideration, as Section 79B is omitted by way of amendment vide Act No.56 of 2020?
(iv) Whether the Trial Court is justified in holding that the plaintiffs have proved the readiness and willingness to perform their part of contract?
- 10 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016
16. On the proof of agreement for sale dated 05.02.2010:
Issue No.3 before the Trial Court is framed casting the burden on the defendants to prove the contention relating to forgery and fabrication of the agreement dated 05.02.2010. Though the defendants have taken a defence that the agreement for sale is not executed and the same is forged and concocted, this Court does not find any material to hold so. The defendants have not adduced acceptable evidence to uphold the said contention.
Expert's opinion is not sought on the signatures of defendants No.1 and 2 on the agreement for sale, which according to the plaintiffs are the signatures/thumb impressions of defendants No.1 and 2. It is also noticed that there is no specific denial of the signatures/thumb impressions of defendants No.1 and 2 appearing on the agreement for sale.
17. The evidence of the witness examined on behalf of the plaintiffs to prove the execution of the agreement
- 11 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 appears to be credible. Nothing is elicited in the cross- examination of PW.2-the witness to the agreement for sale dated 05.02.2010 to disbelieve the agreement for sale.
18. This being the position, this Court is of the view that the finding of the Trial Court that the defendants have failed to prove that the agreement dated 05.02.2010 is forged and fabricated has to be upheld and the said finding does not call for any interference, as the finding is based on acceptable evidence.
19. Effect of Section 79B of the Act of 1961 on the agreement for sale dated 05.02.2010 and consequence of amendment vide Act No.56 of 2020:
Section 79B (1) (b) (iii) of the Act of 1961 barred the purchase of agricultural land by persons who are not the members of the same family. On the date of agreement for sale dated 05.02.2010, Section 79B was in force. The defendants contend that the agreement for sale in favour of the plaintiffs, who admittedly are not the members of the same family, is hit by Section 79B (1) (b) (iii) of the
- 12 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 Act of 1961. The plaintiffs contend that said provision is now omitted vide Act No.56 of 2020, as such, the agreement is valid.
20. If the agreement escapes the rigour of Section 79B of the Act of 1961 because of amendment vide Act No.56 of 2020, then the question whether the agreement dated 05.02.2010 is hit by Section 79 when it was executed becomes academic. Thus, this Court would proceed to consider the implications of Act No.56 of 2020.
21. The relevant portion of Act No.56 of 2020 reads as under:
"KARNATAKA ACT NO.56 OF 2020 (First Published in the Karnataka Gazette Extra-ordinary on the 30th day of December, 2020) THE KARNATAKA LAND REFORMS (SECOND AMENDMENT) ACT, 2020 (Received the assent of the Governor on the 30th day of December 2020) An Act further to amend the Karnataka Land Reforms Act, 1961. Whereas it is
- 13 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 expedient further to amend the Karnataka Land Reforms Act, 1961 (Karnataka Act 10 of 1962), for the purposes hereinafter appearing; Be it enacted by the Karnataka State Legislature in the seventy first year of the Republic of India, as follows:-
1. Short title and commencement.-(1) This Act may be called the Karnataka Land Reforms (Second Amendment) Act, 2020.
(2) Sections 2, 3, 4, 5, 6, 10 and 11 shall be deemed to have come into force with effect from the 1st day of March 1974 and remaining provisions shall be deemed to have come into force with effect from the 13th day of July, 2020.
2.xxxx.
3.xxxx.
4.xxxx
5. Omission of section 79B.- In the Principal Act, section 79B shall be omitted."
(Emphasis supplied)
22. Admittedly, Section 79B of the Act of 1961 is omitted in 2020 by way of an amendment. Thus, the restrictions imposed under Section 79B to acquire
- 14 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 agricultural land are done away with. However, the question is, what is the effect of Act No.56 of 2020 on the agreements entered into before the amendment? The answer lies in sub-section 2 of Section (1) of Act No.56 of 2020. Sub-section 2 of Section (1) of Act No.56 of 2020 speaks about the effective date of amendment. As per the said provision, Sections 2, 3, 4, 5, 6, 10 and 11 of Act No.56 of 2020 have come into effect from 1st March 1974. Section 5 of Act No.56 of 2020 has omitted Section 79B with effect from 1st March 1974. Section 79B of the Act of 1961 was introduced vide amendment with effect from 1st March 1974. Since the said provision is omitted with effect from 1st March 1974, subject to any savings provided in Section 12 of Act No.56 of 2020, the Act of 1961 is to be read as if the Section 79B never existed.
23. Section 12 of the Act No.56 of 2020 reads as under:
"12. Savings.- (1) Notwithstanding the omission of sections 79A, 79B and 79C with effect from 1st day of March 1974, all cases
- 15 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 finally disposed of before the promulgation of the Karnataka Land Reforms (Amendment) Ordinance, 2020 (Karnataka Ordinance 13 of 2020) shall remain unaffected by the said Ordinance.
(2) All cases pending before any Court, tribunal or other authority competent under the provisions of the Principal Act on the date of promulgation of the Karnataka Land Reforms (Amendment) Ordinance, 2020 (Karnataka Ordinance 13 of 2020) pertaining to sections 79A, 79B and 79C shall hereby stand abated."
24. On a reading of the aforementioned provision, it is evident that Section 12(1) of Act No.56 of 2020 has saved only those cases (for violation of Section 79A, 79B and 79C) finally disposed of before the promulgation of the Karnataka Land Reforms (Amendment) Ordinance, 2020 (Karnataka Ordinance 13 of 2020).
25. Admittedly, no case is filed alleging violation of Section 79B of the Act of 1961 challenging the agreement for sale dated 05.02.2010. The defendants' contention that the agreement is hit by Section 79B is rejected by the Trial
- 16 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 Court, even before Act No.56 of 2020. Had there been an order by the competent authority holding that the agreement for sale dated 05.02.2010 is hit by Section 79B of the Act of 1961 and if the said order had attained finality before the commencement of Act No.56 of 2020, then it is not open to the plaintiffs to contend that Section 79B has no application to the case on hand. However, that is not the case here. Hence, Section 12 of Act No.56 of 2020 does not come to the aid of the defendants. Thus, as Section 79B was omitted with effect from 1st March 1974 and no orders are passed on alleged violation under the Act of 1961, this Court has to take a view that Section 79B was not in the statute when the agreement for sale dated 05.02.2010 was entered into among the parties. Savings provided in Section 12(1) of Act No.56 of 2020 would apply only where the orders passed under Section 79B had attained finality when the Karnataka Land Reforms (Amendment) Ordinance, 2020 (Karnataka Ordinance 13 of 2020) came into force. Hence, this Court is of the view that the agreement for sale dated
- 17 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 05.02.2010 is not hit by Section 79B of the Act of 1961. Thus, the question whether the agreement for sale dated 05.02.2010 was valid when Section 79B of the Act of 1961 was in force need not be looked into, as the said question has become academic.
26. Regarding readiness and willingness to prove the contract:
There is a plea in the plaint regarding readiness and willingness to perform the part of the contract. The denial in the written statement relating to plaintiffs' readiness to perform their part of the contract is not specific with reference to specific averments in the plaint. However, the said plea in the plaint is denied by making an omnibus statement in para No.5 in the written statement by stating that the contents of para Nos.5 to 7 of the plaint are denied.
27. The denial relating to plaintiffs' readiness and willingness to perform their part of the contract is rather vague. However, the plaintiffs' obligation to plead and
- 18 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 prove willingness to perform their part of the contract is the requirement under Section 16(c) of the Specific Relief Act. Said requirement is not dependent on the pleading in the written statement. Perhaps, if there was a specific and categorical admission in the written statement that the plaintiff was ready and willing to perform their part of the contract, then consideration would have been different. In the case on hand, there is no specific admission in this behalf by the defendants. Thus, the vague denial in the written statement, or absence of a specific and categorical denial in the written statement, or the absence of positive assertion by the defendants that the plaintiffs were not ready to perform their part of the contract will not dispense with the plaintiffs' requirement to plead and prove readiness and willingness to perform their part of the contract.
28. According to the plaintiffs, the sale consideration amount agreed was Rs.64,75,000/-. The plaintiffs claim that Rs.5,00,000/- is paid towards advance
- 19 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 consideration amount. A balance of Rs.59,75,000/- was required to be paid at the time of registration of the sale deed. The agreement dated 05.02.2010 does not stipulate any time frame for the performance of a contract. The covenant in the agreement reveals that defendants No.1 and 2 have agreed to execute the sale deed as and when the plaintiffs make a request for execution of the sale deed after getting the necessary paperwork required for the registration of the sale deed.
29. No doubt, the agreement does not stipulate any specific time frame for completion of the sale transaction agreed upon. Nevertheless, the plaintiffs need to establish that from the date of the agreement, they were ready and willing to perform their part of the contract. The suit was filed on 14.03.2012, two years after the agreement dated 05.02.2010.
30. Though the plaint averment would indicate that the plaintiffs were requesting defendants No.1 and 2 to execute the sale deed and defendants No.1 and 2 kept on
- 20 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 postponing the execution of the sale deed on one pretext or the other, the question is, whether the said plea is proved? The materials are not placed to hold that the plaintiffs were ready with a balance consideration amount of Rs.59,75,000/- and the registration fees and stamp duty charges.
31. It is a well-settled principle of law that, readiness and willingness are two different concepts under Section 16(c) of the Specific Relief Act. Willingness to perform the obligations under the contract is party's inclination to abide by the terms of the contract and take the contract to its logical end. It does not signify the readiness to perform the contract. The readiness, on the other hand, is all about the preparedness of the party to perform his part of the contract, which he claims that he is willing to perform.
32. By filing a suit and prosecuting the suit, the plaintiffs may have proved their willingness to perform their part of the contract by paying a balance
- 21 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 consideration amount to defendants No.1 and 2. In a given case, based on the attending circumstances and assessment of materials on record, it may be possible to hold that the willingness also presupposes readiness. For example, in a case where the substantial part of the consideration amount is paid and the capacity of the plaintiffs to pay the balance consideration amount is never doubted, it may be quite possible to hold willingness also presupposes readiness to perform the contract. However, in all cases, willingness to perform a contract does not presuppose readiness to perform the contract.
33. To prove the readiness, in the context of the present case, the plaintiffs must establish something more than their act of filing a suit for specific performance and prosecuting the same. This is more so in the present case, considering the averments in the plaint. It is true that the plaintiffs claim that they were ready and willing to perform their part of the contract i.e., to pay the balance consideration amount of Rs.59,75,000/-. However, in
- 22 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 paragraph No.3 extracted below, the plaintiffs state as under:
"3. The defendants were the absolute owners and possessors of the land Sy. No.61 of Huligudda village and for their family and legal necessities proposed to sell a portion of the land with an extent of 7 acres and in furtherance of such proposal, approached plaintiff No.1 who in turn, took the plaintiffs 2 and 3 into confidence as the deal was quite big and agreed to purchase the land jointly along with the plaintiffs 2 and 3."
(Emphasis supplied)
34. Even in the deposition by way of examination- in-chief, plaintiff No.1 has reiterated the above said statement. From the said statements in the plaint as well as in the examination-in-chief, even the plaintiffs concede that the deal is a big one. In other words, the amount involved in the transaction is a huge amount even in the estimation of the plaintiffs. The aforementioned stand in the plaint and examination-in-chief would also indicate that plaintiff No.1 alone was not having sufficient means to
- 23 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 conclude the contract as on the date of entering into the contract. Thus, he roped in the other two plaintiffs. Even while leading evidence, plaintiff No.1/PW.1 reiterates the same stand.
35. The plaintiffs have not produced any evidence to show that they have made necessary financial arrangements, post the agreement for sale. As can be noticed from the records, plaintiff No.1 has not led evidence on behalf of the other two plaintiffs. He has led evidence only for himself. No material is placed to hold that after the execution of the agreement and before the institution of the suit, or at least by the time the case went for trial, the plaintiffs were ready with Rs.59,75,000/- payable towards the balance consideration amount.
36. In the cross-examination of PW.1, a few questions were directed to him doubting the plaintiffs' capacity to pay the balance consideration amount. The answer in the cross-examination of PW.1 would also indicate that plaintiffs No.2 and 3 are not the partners in
- 24 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 the transaction covered under the agreement. It is stated by PW.1 in the cross-examination that PW.1 owns dry agricultural lands and that he also runs a business. He has stated that his annual income is Four to Five lakhs. It is not stated whether the said income is gross income or net income. It is admitted that he is not assessed to income tax. The answers elicited in the cross-examination indicate that plaintiff No.1 was not ready with Rs.59,75,000/-, which the plaintiffs were required to pay pursuant to the agreement for sale.
37. It is also relevant to note that the other plaintiffs have not been examined to prove their readiness and no documents are produced to establish the financial soundness of the other two plaintiffs. This Court is making this observation, as PW.1 has not led evidence on behalf of others and he has also stated in the cross-examination that the other two plaintiffs are not the partners in the transaction. Though plaintiff No.1 has stated in the cross- examination that he owns 21 sites in Lingasugur,
- 25 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 documents are not produced to substantiate the same. Assuming that he owned 21 sites at Lingasugur, it cannot be inferred that the said 21 sites can be liquidated immediately to fetch Rs.59,75,000/- payable to defendants No.1 and 2. Liquidation of an immovable property is not easy as made out to appear, particularly, in rural and moffusil areas. Assuming that the plaintiffs could have raised a loan by mortgaging 21 sites, no material is placed to indicate the value of 21 sites. Hence, this Court is of the view that the plaintiffs have failed to establish the readiness to perform their part of the contract.
38. Learned Senior Counsel appearing for the contesting respondents No.1 and 2 has contended that the defendants have taken a defence of total denial. Defendants No.1 and 2 have not been fair in admitting the fact that they had agreed to sell the suit property and that they have received Rs.5,00,000/- towards part of the consideration amount. Since the agreement is proved and
- 26 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 no hardship is pleaded by the defendants, discretion should be exercised in favour of the plaintiffs and the appeal is to be dismissed by confirming the impugned judgment and decree.
39. It is indeed true that the defendants have not raised a plea of hardship to refuse the decree for specific relief of contract. However, that by itself will not by default entitle a decree for specific performance of the contract on mere proof of the agreement for sale. Indeed, the defence of total denial of execution of an agreement for sale is not established. On the other hand, the agreement for sale is proved. Still, the Court has to consider whether a case has been made out as contemplated under Section 16(c) of the Specific Relief Act. Since requirement of Section 16(c) is not established, there cannot be a decree for specific performance.
40. It is noticed that the plaintiffs have not sought the alternative relief of refund of the earnest amount. Under Section 22(2) of the Specific Relief Act, there is a
- 27 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 bar to grant a decree for refund of earnest amount, in case the plaintiffs omit to seek the appropriate relief for refund of the amount. However, in the instant case, defendants No.1 and 2 on 09.08.2023 claim to have paid Rs.5,00,000/- to plaintiff No.3. Plaintiff No.3, who is arrayed as respondent No.3 has admitted that the transaction is a loan transaction by taking a stand contrary to the claim made in the plaint and he has admitted the repayment of Rs.5,00,000/-.
41. The learned counsel appearing for defendants No.1 and 2, on a specific question put by the Court as to whether the defendants are willing to pay the interest on the said amount of Rs.5,00,000/-, on instructions has made a statement that the defendants are willing to pay bank rate of interest on the said amount.
42. In the light of the peculiar facts of the case, though there is no specific prayer for a refund of the advance consideration amount, since defendants No.1 and 2 on their own have paid Rs.5,00,000/- and are willing to
- 28 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 pay the interest on the advance consideration amount and considering the fact that amount of Rs.5,00,000/- is paid in the year 2010, this Court is of the view that defendants No.1 and 2 are liable to pay interest on the said amount of Rs.5,00,000/- from 05.02.2010 (the date of the agreement) till payment of interest on the said amount.
43. This Court, considering the nature of transaction and also considering the blatant denial of execution of an agreement for sale by defendants No.1 and 2, deems it appropriate to award interest at the rate of 15% per annum on Rs.5,00,000/- from 05.02.2010 to till payment of said amount.
Hence the following:
ORDER i. The appeal is allowed in part.
ii. The judgment and decree dated 18.01.2016 passed in O.S.No.25/2012 on the file of the Senior Civil Judge, Lingasugur are set aside.
- 29 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 iii. The suit is decreed for refund of advance consideration amount of Rs.5,00,000/- to the plaintiffs along with interest @ 15% p.a. from 05.02.2010 till payment.
iv. Since plaintiff No.3 claims to have received Rs.5,00,000/- from defendants No.1 and 2, the interest ordered shall be paid to plaintiffs No.1 and 2.
v. The amount so ordered shall be paid within 30 days from today.
vi. Till repayment of the said amount, there shall be a charge over the suit property for repayment of the said amount and there shall be any entry in the record of right of the property.
vii. The cost of this appeal is made easy. The cost of the suit is on the defendants.
- 30 -
NC: 2024:KHC-K:7022-DB RFA No. 200009 of 2016 viii. In view of disposal of the main appeal, I.A.Nos.1/2017 for temporary injunction and 1/2023 for production of additional documents do not survive for consideration and are accordingly dismissed.
Sd/-
(S.SUNIL DUTT YADAV) JUDGE Sd/-
(ANANT RAMANATH HEGDE) JUDGE LG, KBM List No.: 1 Sl No.: 1 CT:PK