Karnataka High Court
C. Padmavathi Dead By Lrs vs Smt. R. Punyavathi W/O R Mukunda on 15 June, 2017
Equivalent citations: 2018 (1) AKR 471, 2018 (7) SCC 492, (2018) 141 REVDEC 669, (2018) 7 SCALE 596, (2018) 188 ALLINDCAS 60 (SC), (2018) 4 RECCIVR 456, (2018) 1 KCCR 863, (2017) 4 ICC 161, (2018) 3 RECCIVR 127, (2018) 3 CURCC 7, (2018) 2 CIVILCOURTC 591, 2018 (130) ALR SOC 54 (ALL)
R.S.A.NO.423/2011
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF JUNE, 2017
BEFORE
THE HON'BLE MRS. JUSTICE K.S.MUDAGAL
Regular Second Appeal No.423 of 2011
BETWEEN:
1. C.Padmavathi dead
by LR's
Radha.C
Aged about 56 years,
W/o Murulidharan
2. C.Radhakrishna
Aged about 54 years,
S/o Late V.Ramakrishna Nayak
3. C.Mohan
Aged about 51 years,
S/o Late V.Ramakrishna Nayak
4. C.Vatsala Kumari
Aged about 48 years,
W/o P.P.Padma Kumar
5. C.Udaykumar
Aged about 46 years,
S/o Late V.Ramakrishna Nayak
No.981, Geetha Road,
Chamarajapuram,
Mysore - 57101. ...Appellants
(By Sri P.Nataraju, Advocate)
R.S.A.NO.423/2011
2
And:
1. Smt.R.Punyavathi
Aged about 46 years,
W/o R.Mukunda
No.39, Police Quarters,
Sirsi Circle, Mysore Road,
Bangalore - 560 078.
2. C.Jayamma
Aged about 56 years,
D/o C.Kariyanna,
D.No.280, Cheluvamba,
Agrahara, K.R.Mohalla,
Mysore - 57101. ...Respondents
(By Sri C.V.Srinivasa, Advocate for R-1;
Sri Ajith Kalyan, Advocate for R-2)
This RSA is filed under Section 100 of C.P.C. against
the judgment & decree dated 25.11.2010 passed in
R.A.No.114/2010 on the file of the 1st Additional District
Judge at Mysore allowing the appeal and setting aside the
judgment and decree dated 09.02.2010 passed in
O.S.No.49/2002 on the file of the Judge, Court of Small
Causes, Mysore.
This appeal coming on for further hearing this day,
the Court delivered the following:
JUDGMENT
This appeal of legal representatives of third defendant arises out of the judgment and decree dated 25.11.2010 passed by the First Additional District Judge, Mysore in R.A.No.114/2010.
R.S.A.NO.423/20113
2. By the impugned judgment, the First Appellate Court has allowed the appeal and modified the judgment and decree of the trial Court dated 09.02.2010 passed in O.S.No.49/2002 by the Presiding Officer, Small Causes Court and Civil Judge (Senior Division), Mysore.
3. The first respondent is the plaintiff, second respondent is the first defendant before the trial Court. Defendant No.2 was the City Co-operative Bank Limited who is not impleaded either in the first appeal or in this case. Defendant No.3- C.Padmavathi is the mother of present appellants. For the purpose of convenience, the parties will be referred to hereafter with their ranks before the trial Court.
4. The subject matter of litigation is the house property bearing No.981, CH-6/1 situated at Geetha Road, Chamaraja Mohalla, Mysore
5. The plaintiff filed O.S.No.49/2002 initially against defendants No.1 and 2 alone for specific R.S.A.NO.423/2011 4 performance of agreement of sale. Her case in brief is as follows:
Defendant No.1 executed an agreement of sale on 27.06.2001 agreeing to sell the suit property for consideration Rs.5,40,000/-. She received Rs.80,000/- on 27.06.2001 and Rs.1,70,000/- on 21.09.2001 as part of sale consideration. Defendant No.1 agreed to receive the balance consideration and execute the sale deed within three months from the date of agreement of sale.
Defendant No.1 went on postponing the matter and did not execute the sale deed despite demand notice dated 18.12.2001. Plaintiff contended that she was always ready and willing to perform her part of contract.
6. Since the property was mortgaged to defendant No.2 - The City Co-operative Bank Limited, the same is impleaded as defendant No.2. Defendants No.1 and 2, though appeared through their counsel, did not file written statement. During pendency of the suit, defendant No.3 - C.Padmavathi purchased the suit schedule property on R.S.A.NO.423/2011 5 19.08.2006. Therefore, she was impleaded as defendant No.3.
7. Defendant No.3 contested the suit by filing the written statement. The gist of her written statement is as follows;
The execution of agreement of sale, terms of the sale and receipt of part consideration are all denied. The readiness and willingness on the part of the plaintiff to perform her part of the contract is denied. She has purchased the property from the first defendant after issuing notice of purchase in 'Sankranthi' newspaper dated 12.08.2006 and after proper verification. She is a bonafide purchaser for value without notice. Therefore, suit be dismissed.
8. On the basis of the pleadings, the trial Court framed the following issues and additional issues:-
1) Whether the plaintiff proves that 1st defendant had agreed to sell the suit schedule property for Rs.5,40,000/- and executed agreement of sale by receiving Rs.80,000/- as advance on 27.6.2001, further plaintiff proves that on 21.09.2001 defendant received Rs.1,70,000/-R.S.A.NO.423/2011 6
and extended period of agreement by making endorsement on the agreement of sale dated 27.6.2001?
2) Whether the plaintiff proves that she was always ready and willing to perform her part of contract?
3) Whether the 3rd defendant proves that she is the bonafide purchaser of the suit property for valuable consideration?
4) Whether the plaintiffs entitled for the reliefs of specific performance of contract?
5) To what decree or order?
Additional Issues:
1) Whether the 3rd defendant proves that she is the bonafide purchaser of the property in good faith?
2) Whether the plaintiff in the alternative entitled for the relief of refund of earnest money of Rs.2,50,000/- with interest at 21% p.a ?
9. Parties adduced evidence. On plaintiff's side PW1 is examined and Exhibits P1, P2 and P3 are marked. On the side of defendant No.3 DW1 is examined and Exhibits D1 to D5 are marked. The trial Court, after hearing the parties, partly decreed the suit namely refused the specific performance and granted only the refund of R.S.A.NO.423/2011 7 earnest money with interest at 21% per annum on the following grounds:
i) Execution of the agreement of sale is proved;
ii) Readiness and willingness of the plaintiff to perform her part of contract is not proved;
iii) Defendant No.3 is bonafide purchaser for value without notice and therefore, her rights are protected.
10. Aggrieved by the said judgment the plaintiff filed Regular Appeal in R.A.No.114/2010 before the First Additional District Judge, Mysore. The First Appellate Court, by the impugned judgment, reversed the judgment and decree of the trial Court and decreed the suit for specific performance holding that sale in favour of defendant No.3 is hit by Transfer of Property Act, therefore, the plea of bonafide purchaser is not open to her. The First Appellate Court further held that readiness and willingness on the part of the plaintiff to perform her obligations is proved.
R.S.A.NO.423/20118
11. This Court on hearing both the sides admitted the above appeal for consideration of the following substantial questions of law:-
i) Whether the lower Appellate Court committed an error in law in not noticing that the Appellant is the bonafide purchaser of the suit property for valuable consideration without notice of the earlier alleged agreement of sale?
ii) Whether the lower Appellate Court committed an error in not noticing that the Appellant had taken paper publication for objection if any with respect to purchase of the suit property and thereafter purchased the suit property for valuable consideration and the Appellant is the bonafide purchaser in good faith?
iii) Whether the lower Appellate Court committed an error in law in not properly interpreting the provisions of Section 19(b) of the Specific Relief Act?
12. Sri.P.Nataraj, learned counsel for appellants contend that First Appellate Court committed error in holding that the readiness and willingness on the part of the plaintiff to perform her part of the contract is proved as the plaintiff has not produced any evidence to show that she had sufficient funds to pay the balance consideration R.S.A.NO.423/2011 9 and she made an attempt to pay balance consideration and get the sale deed executed. He further contends that defendant No.3 had taken all precaution while purchasing the property and she had issued notice of her purchase by publication of notice in 'Sankranthi' newspaper. He contends that the First Appellate Court over looked the fact that defendant No.3 had invested Rs.7,12,000/- her hard earned money. He contends that the First Appellate Court should have confirmed the judgment of the trial Court on the ground that defendant No.3 is the bonafide purchaser for value without notice and the relief of specific performance causes hardship to her.
13. In support of his arguments, he relies upon the following judgments:
1) Sri.K.M.Narayana and another V/s
Smt.Ramakka and others (ILR 2016 KAR
2979)
2) Sri.Punny Akat Philip Raju, Since dead by his LRs V/s Sri.Dinesh Reddy (ILR 2016 KAR 2252)
3) N.Kasinath V/s Arun R.Rawell (AIR 2008 KAR 366)
4) Union of India V/s Ibrahim Uddin and another (2012) 8 SCC 148) R.S.A.NO.423/2011 10
5) Zarina Siddiqui V/s A.Ramalingam alias R.Amarnathan (AIR 2015 SC 580)
14. As against that, Sri.C.V.Srinivas learned counsel for respondent No.1 seeks support of the judgment of the trial Court on the ground that plea of lack of readiness and willingness to perform the contract is not open to the defendant No.3 as she is purchaser pendente lite. He further contends that issue of readiness and willingness being question of fact, that cannot be raised in this appeal, that too when no substantial questions of law are raised at the time of admission at that point. He further contends that even otherwise the evidence on record shows that plaintiff was always ready and willing to perform her part of contract. Therefore, that finding does not call for any interference by this Court.
15. He further contends that Section 19(1)(b) of Specific Performance of Contract is subject to Section 52 of Transfer of Property Act, therefore, the plea of bonafide purchaser for value without notice is not open to defendant No.3.
R.S.A.NO.423/201111
16. In support of his arguments, he relies upon the following judgments:
1) Balwinderjit Kaur V/s Financial Commissioner (Appeals), Punjab and another AIR 1987 Punjab and Haryana 189
2) Mohammed Ali Abdul Chanimomin V/s Bisahemi Kom Abdulla Saheb Momin and another (AIR 1973 Mysore 131)
3) Har Narain (Dead) by LRs V/s Mam Chand (Dead) by LRs and Ors. in Civil Appeal Nos.995-
996/2003 DD 08.10.2010
4) Ganga Charan V/s Bans Bahadur Singh (AIR 1975 Allahabad 25)
5) Mr.Syed Basheer Malik and another V/s Smt.Jameela Begum and others (ILR 2016 KAR
842)
17. The plaintiff has produced the agreement of sale in question at Exhibit P1. A perusal of Exhibit P1 shows that defendant No.1 agreed to sell the suit property to the plaintiff for a consideration of Rs.5,40,000/- and received part consideration of Rs.80,000/- on the same day. Under Exhibit P1, it is agreed that the vendor should receive the balance consideration within three months and execute the sale deed. Further, the defendants did not challenge the R.S.A.NO.423/2011 12 trial Courts decree for refund of earnest money. Therefore, the judgment and decree regarding execution of Exhibit P1 and receipt of part of sale consideration in pursuance of Exhibit P1 has reached finality.
18. Regarding readiness and willingness to perform her part of the contract, the plaintiff pleaded that she was always ready and willing to perform her part of obligations. As per the agreement Ex.P.1, the duty was on the part of the defendant No.1 to receive the balance consideration and execute the sale deed within three months.
19. The plaintiff has paid Rs.1,70,000/- on 21.09.2001 additional amount within three months from the date of agreement of sale. The plaintiff in her evidence reiterated that she was always ready and willing to perform her part of contract and she was repeatedly requesting the first defendant to perform her part of contract but the first defendant went on postponing the same on one or the other pretext.
R.S.A.NO.423/201113
20. Whether the plaintiff was always ready and willing to perform her part of contract and she kept on requesting the first defendant to receive the balance sale consideration and execute the sale deed will be within the personal knowledge of the first defendant. The first defendant neither appeared and filed any written statement nor is examined as a witness for the third defendant to deny such claim of the plaintiff. It is not her case that the plaintiff was incapable of paying the balance sale consideration. In the absence of any such denial by the first defendant, the third defendant's contention on that aspect becomes unacceptable.
21. In the entire cross-examination of PW1, there is no single suggestion that PW1 could not afford to pay the balance sale consideration. The whole cross-examination of PW1 revolves around defendant No.3 being the bonafide purchaser for valuable consideration. The same is the case with evidence of DW1. Having regard to these facts, first of all the question of readiness and willingness is a question of fact, therefore that is not a substantial question of law. R.S.A.NO.423/2011 14 Even otherwise, the discussions made above clearly show that the First Appellate Court had sufficient material to reverse the finding of the trial Court on the issue of readiness and willingness and to hold the same in favour of the plaintiff.
22. The perusal of the judgment of the trial Court shows that except stating that the said issue is held in the negative, absolutely there is no reasoning at all for that finding. Having regard to the aforesaid facts, the judgments relied upon by the counsel for appellants in K.M. Narayana and Union of India cases referred to supra are not applicable to the case on hand.
23. Regarding grant of specific performance, the suit came to be filed on 30.01.2002. The purchase of the property by the defendant No.3 under Exhibit-D3 sale deed is dated 19.08.2006. By that time, the suit summons was served on the first defendant and she had appeared in the matter. The lower Court records show that the trial Court on hearing the plaintiff and the first defendant on R.S.A.NO.423/2011 15 28.02.2002 had granted interim injunction against the first defendant against alienation of the property. Therefore, it is clear that the sale in favour of the third defendant was in breach of the order of injunction.
24. It is no doubt true that the relief of specific performance is a discretionary relief. It is true that Section 19(b) of Specific Relief Act, 1963 provides that specific performance of the contract may be enforced against a defendant or any other person claiming through him except a transferee for value who has paid money in good faith and without notice of the original contract. At the same time Section 52 of the Transfer of Property Act, 1882 prohibits the transfer of the subject matter of litigation pending suit. Now it is a settled legal possession that in a situation where a conflict arises in invoking Section 19 of the Specific Relief Act, 1963 Section 52 of Transfer of Property Act, 1882 the former becomes subservient to the latter. In Har Narain (Dead) by LRs V/s Mam Chand (Dead) by LRs and Ors case referred supra the Apex Court in para-12 hold as follows;
R.S.A.NO.423/201116
"So far as the present case is concerned, it is apparent that the appellant who is a subsequent purchaser of the same property, has purchased in good faith but the principle of lis pendens will certainly be applicable to the present case notwithstanding the fact that under Section 19(b) of the Specific Relief Act his right could be protected".
25. The above proposition of law laid down by the Hon'ble Supreme Court is the complete reply to the contention of the appellants that they being the bonafide purchasers are entitled to the protection of the Section 19
(b) of the Specific Relief Act, so also to their other contentions. In addition to that, PW1 pleads ignorance of publication of notice in 'Sankranthi' newspaper. There is nothing to show that the said paper is in wide circulation in the City in question and the said paper was served on the plaintiff. Having regard to the above legal position, this Court finds that no purpose will be served in referring to any other judgments relied upon by both the counsel in support of their arguments.
R.S.A.NO.423/201117
26. For the aforesaid reasons, this Court holds that the First Appellate Court has not committed any error of law in reversing the judgment of the trial Court and granting the relief of specific performance. Therefore, substantial questions No.1 to 3 raised by this Court are answered accordingly and the appeal stands dismissed.
27. Having regard to the dismissal of the appeal, and the discussion made above, IA.No.1/2017 filed by respondent No.1 for vacating interim stay and IA No.2/2017 for raising additional substantial questions of law stand disposed of.
28. It is noticed that the defendant No.3 had purchased the property for Rs.7,12,000/-. This Court had directed the first defendant to deposit Rs.7,12,000/- to make good the loss caused by her to the first defendant and she did not comply with the said order. Under such circumstances, it is found necessary that the defendant No.3 becomes entitled for the balance sale consideration that is due to be deposited by the plaintiff. Therefore, the R.S.A.NO.423/2011 18 judgment and decree passed by the First Appellate Court is hereby confirmed reserving the right to the appellants alone of withdrawing the balance sale consideration on the plaintiffs depositing the same.
Sd/-
JUDGE UN/SB