Karnataka High Court
Shri Appasaheb S/O Subharao Nimbalkar vs Shri Raghvendra Pralhad Joshi on 31 August, 2024
Author: B.M. Shyam Prasad
Bench: B.M.Shyam Prasad
-1-
NC: 2024:KHC-D:12535-DB
RFA No. 100496 of 2023
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 31ST DAY OF AUGUST, 2024
PRESENT
THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD
AND
THE HON'BLE MR. JUSTICE C M JOSHI
REGULAR FIRST APPEAL NO.100496 OF 2023 (SP)
BETWEEN:
SHRI. APPASAHEB,
S/O. SUBHARAO NIMBALKAR,
AGE: 76 YEARS, OCC: AGRICULTURE,
R/O: UTTUR, TQ: MUDHOL,
DIST: BAGALKOT-587313.
- APPELLANT
(BY SRI. PRASHANT F. GOUDAR, ADVOCATE)
AND:
1. SHRI. RAGHVENDRA PRALHAD JOSHI,
Digitally signed by
AGE: 61 YEARS, OCC: PRIVATE BUSINESS,
VINAYAKA B V
Location: HIGH
R/O. ANAND NAGAR, TQ: MUDHOL,
COURT OF
KARNATAKA DIST: BAGALKOTE-587313.
DHARWAD
BENCH
DHARWAD
Date: 2024.10.01 2. SHRI. UPENDRA PRALHAD JOSHI,
15:15:37 +0530
AGE: 55 YEARS, OCC: PRIVATE BUSINESS,
R/O. ANAND NAGAR, TQ: MUDHOL,
DIST: BAGALKOTE-587313.
- RESPONDENTS
(NOTICE TO R1 AND R2 IS HELD SUFFICIENT)
RFA FILED UNDER SEC. 96 OF CPC 1908, AGAINST THE
JUDGMENT AND DECREE DATED 05.08.2023 PASSED IN
O.S.NO. 103/2022 ON THE FILE OF THE PRINCIPAL SENIOR
CIVIL JUDGE AND JUDICIAL MAGISTRATE FIRST CLASS,
MUDHOL, PARTLY DECREEING THE SUIT FILED FOR SPECIFIC
PERFORMANCE & ETC.
-2-
NC: 2024:KHC-D:12535-DB
RFA No. 100496 of 2023
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD
AND
THE HON'BLE MR. JUSTICE C M JOSHI
ORAL JUDGMENT
(PER: THE HON'BLE MR. JUSTICE B.M. SHYAM PRASAD) The appellant is aggrieved because his suit for specific performance is decreed partly directing the respondents to refund the advance sale consideration received by them. The appellant's suit for specific performance is in O.S. No. 103/2022 on the file of the Principal Senior Civil Judge & J.M.F.C, Mudhol [for short, the 'civil Court'], and the impugned judgment and decree are dated 05.08.2023. The respondents are served with notice in the suit, but they remained ex-parte, and even in the present proceedings though served have remained ex-parte.
2. The appellant's case stated in brief is thus. He has entered into agreement of sale, which is registered on 04.02.2016 with the jurisdictional Sub Registrar, with the respondent [the owners of non-agricultural lands in R.S. No. -3- NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 105/2 measuring 3 acres 2 guntas in Uttur village, Mudhol Taluk, Bagalkot District - for short, 'the subject property']. The respondents brought the subject property to the sale because they needed money to discharge the family debts. The appellant has offered the highest price of Rs. 55 lakhs which the respondents have accepted and accordingly agreement of sale is executed and registered. The appellant has paid a sum of Rs.45 lakhs [Rs. 44 lakhs by RTGS and a cash of Rs.1 lakh] and in receipt of the consideration as aforesaid, the respondents have delivered possession of the subject property in performance of the assurance to execute the sale deed.
3. The appellant's further case is that the respondents have executed the agreement of sale assuring to execute the sale deed after clearing dues with Sri Veera Pulakeshi Co-Op. Bank ltd., Badami, branch Kaladagi. The second respondent has executed a registered power of attorney in favour of the first respondent to complete the transaction. The appellant has been ready and willing to pay the balance sale consideration of Rs.10 lakhs and take -4- NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 conveyance but the respondents have committed breach of the contract. In the month of March 2022, the appellant has ascertained that respondents have not cleared the dues necessary to execute the sale deed for the subject property free of all encumbrances and a legal notice is issued to the Co-Op. Bank and to the respondents to execute the sale deed, but they have not responded to complete the transaction.
4. The appellant has examined himself as PW1 reiterating the assertions and marking in evidence the sale agreement [Ex.P.1], a copy of the legal notice dated 16.03.2022 to the respondents and the Co-operative Bank, the Encumbrance Certificate/s for the subject property [Exs.P.7, 8 and 24]. The appellant has also produced a certified copy of the sale deed for the subject property to establish title of the respondents and his bank statements to show that he had financial resources to pay the balance sale consideration of Rs.10 lakhs. The civil Court, while considering the appellant's case for decision on merits, has framed points for its consideration to assess whether the -5- NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 appellant proves that the respondents have executed sale agreement agreeing to sell the subject property for a total sale consideration of Rs.55 lakhs and Rs.45 lakhs thereof and whether the appellant proves that he is ready and willing to complete the sale transaction.
5. The civil Court has opined that the plaintiff has established the agreement and also the circumstances necessary to give rise to the inference that he has made attempts to collect the documents to show that he was ready and willing to complete the transaction but that would not help the appellant to get just orders because the appellant's suit is barred by limitation. The civil Court has opined that the suit is barred by limitation referring to the terms of the agreement [which is dated 04.02.2016] and the notices issued by the appellant. The civil Court has concluded that the suit is barred by limitation because the agreement refers to an assurance to execute the sale deed for the subject property within a period of one [1] year from the date of sale agreement but the legal notices are issued only in the first week of March 2022 with the suit being filed on 20.04.2022. -6-
NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023
6. The civil Court's opinion in this regard reads as under:
"20. By careful perusal of cause of action it is crystal clear that the plaintiff knowing fully well that the defendants had created the charge over suit schedule properties on 10.07.2016, no notice was issued question the same at the relevant point of time. Admittedly, the agreement of sale does not give any title over the suit schedule properties to the plaintiff. Admittedly as per the terms of the agreement, the possession of the suit property was not handed over to plaintiff on the date of agreement itself. The date of execution of sale deed was fixed for a period of one year. According to the plaintiff the final cause of action occurred and arose in the 2nd week of March 2022 admittedly the suit was filed on 20.04.2022. Admittedly, the plaintiffs have not sent any letter not to create the charge in the RTC extract. Further, it is also not the case for postponing the performance to a future date without fixing any further date for performance. The period of one year with effect from 04.02.2016 expired on 04.02.2017. The present suit seeking for specific performance was filed by the plaintiff on 20.04.2022 much beyond the 3 years. Hence, I am of the opinion that the suit for specific performance is not filed within 3 years from the date also."-7-
NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023
7. Sri Prashant Goudar, the learned counsel for the appellant, submits that this Court must interfere with the civil Court's finding on limitation because the appellant did not have an opportunity to know that the relief for specific performance would be refused on the ground of limitation. This Court must refer to the provisions of Section 3 of the Limitation Act, 1963 to disregard this argument. The provisions stipulate that the Court, regardless of limitation being set up as defense, must dismiss the suit if it is barred by limitation. As regards the appellant's case on limitation, the learned counsel submits as follows:
[a] The subject property [which was mortgaged by deposit of title deeds with the District Co-
Op. Bank way back in the year 2004] has been re-mortgaged with different Co-Op.
Banks and that as on the date of the sale agreement this property was mortgaged with M/s Small Industries Development Bank of India [M/S SIDBI] and that the assurance -8- NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 was that this mortgage would be cleared and the property transferred.
[b] The appellant persuaded the respondents to discharge the mortgage but could not take any immediate action with the rise in COVID-
19 pandemic and thereafter when the
defendants refused to take necessary
measures, the suit is commenced issuing notices to both the respondents and to the Co-Op. Bank.
8. On the question of law, Sri Prashant Goudar is categorical that given the decision of the Apex Court in Katta Sujatha Reddy and another vs. Siddamsetty Infra Projects Pvt. Ltd. &Ors1, the appellant's case for specific performance must be examined in the light of the position that the 2018 amendment to the Specific Relief Act is prospective and cannot apply to these transactions that have taken prior to the amendment vis., 01.10.2018 and 1 [2023] 1 SCC 355 -9- NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 that consequentially the appellant must make out a case for specific performance in the light of the provisions of the Specific Relief Act as they stood prior to the amendment including the provisions of Sec.20.
9. The civil Court ought to have examined the question of limitation in the light of the provisions of Article 54 of the Limitation Act, 1963 [for short 'the Act']. The provisions of Article 54 of the Act, when specific time is provided for performance, contemplates limitation being reckoned from the date fixed for the performance. In the present case, the sale agreement stipulates that the respondents must execute sale deed within a period of one [1] year from the date of agreement but subject to clearing encumbrances. It is seen from the Encumbrance Certificates produced that the mortgage created in the month of March 2014 is not discharged within a period of one year from the date of agreement and even otherwise, the time for performance being made subject to clearing of the encumbrances, the first part of the Article 54 of the Act may not be rightly invoked. In that event, the question whether
- 10 -
NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 the suit is filed within the limitation period of three years must be decided with reference to the second part. According to the appellant, the date of refusal by the respondents to execute the sale deed is when they did not respond to the legal notice issued just prior to filing of the suit or even after publication of notice in the newspaper. Therefore, this Court cannot endorse the civil Court's finding on the question of limitation period.
10. However, at this stage, this Court must refer to the different transactions that are seen from the different Encumbrance Certificates produced by the appellant, and this Court must make an immediate reference to Ex.P.9 -an Encumbrance Certificate obtained by the appellant for the period from 01.04.2004 to 01.01.2022. It is seen from these transactions that the subject property is no longer an open and un-developed non-agricultural land inasmuch as the plots are developed and that some of these plots viz., Plot No.1 - 4 have been mortgaged by the respondents and these transactions are within six months from the date of sale
- 11 -
NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 agreement [04.02.2016]. Therefore, the point for consideration in this appeal is:
Whether this Court, in view of the appellant's own showing that the subject property is developed into plots, must interfere with the discretion exercised by the civil Court in refusing specific performance of the sale agreement and directing refund of the advance consideration of Rs.45 Lakhs.
11. This Court must examine whether the civil Court has exercised its discretion in refusing the specific performance and granting refund of the advance amount in the light of the provisions of Section 20 as it stood prior to the 2018 Amended Act. The courts, because of these provisions, need not grant specific performance merely because it is lawful to do so and the courts must exercise discretion guided by sound prepositions. One of the circumstances in which the Courts may refuse specific performance is when there could an unfair advantage to the plaintiff.
- 12 -
NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023
12. In the present case, this aspect is examined in the light of two undisputed circumstances viz., the mortgage in favour of the co-operative society as of 2015 is not shown to be discharged and more crucially the subject property is developed into plots. This is borne out by the encumbrance certificate which though produced by the appellant is not marked. The appellant has not offered any reason to disbelieve this, and in fact, this Court must infer that the Encumbrance Certificate is deliberately not marked because it would go against the appellant. This encumbrance certificate demonstrates that the subject land has been developed into plots and some of the plots have been mortgaged by the respondents representing entities with which they are associated with for the loan availed by such entities.
13. These circumstances are in addition to the mortgage otherwise subsisting in terms of the mortgage in the month of March-2016. The explanation now offered is that the respondents have managed to create revenue records to show development, but this is completely
- 13 -
NC: 2024:KHC-D:12535-DB RFA No. 100496 of 2023 extraneous to the pleadings and evidence. The appellant to succeed on this ground, must have brought out necessary pleadings. In the light of the aforesaid, the question is answered holding that this Court cannot interfere with the discretion exercised by the civil Court in refusing specific performance while directing refund of the amount advanced.
Hence, the appeal stands rejected.
Sd/-
(B.M.SHYAM PRASAD) JUDGE Sd/-
(C M JOSHI) JUDGE BVV & YAN Ct:vh List No.: 1 Sl No.: 22