Karnataka High Court
Mr. M. M. Prasanna Kumar vs Mr. D. Vinod Sivappa on 1 August, 2025
Author: Hanchate Sanjeevkumar
Bench: Hanchate Sanjeevkumar
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NC: 2025:KHC:29863
MFA No. 5551 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF AUGUST, 2025
BEFORE
THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR
MISCELLANEOUS FIRST APPEAL NO.5551 OF 2025 (CPC)
BETWEEN:
MR. M.M.PRASANNA KUMAR
SON OF LATE MUDDAPPA,
AGED ABOUT 63 YEARS,
RESIDING AT NO.441,
8TH MAIN ROAD, SADASHIVANAGAR,
BANGALORE - 560 080.
...APPELLANT
(BY SRI. ADITYA NARAYAN., ADVOCATE)
AND:
MR. D.VINOD SIVAPPA
Digitally SON OF LATE D.SIVAPPA,
signed by AGED ABOUT 70 YEARS,
RAMYA D RESIDING AT NO.4, LAVELLE ROAD,
Location: 1ST CROSS, BANGALORE-560 001.
HIGH COURT ...RESPONDENT
OF (BY SRI. MANU PRABHAKAR KULKARNI, ADV., A/W
KARNATAKA MS. SHRISTI WIDGE., ADVOCATE FOR C/R)
THIS MFA FILED U/O.43 RULE 1(r) OF THE CPC, AGAINST
THE ORDER DT.17.07.2025 PASSED ON IA NO.1 IN
O.S.NO.3401/2025 ON THE FILE OF THE XXXI ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE CCH-14, C/C V ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE, BENGALURU CCH-13,
DISMISSING THE IA.NO.1 FILED UNDER ORDER 39 RULE 1
AND 2 R/W SEC.151 OF CPC, 1908 & ETC.
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NC: 2025:KHC:29863
MFA No. 5551 of 2025
HC-KAR
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR
ORAL JUDGMENT
This appeal is filed by the plaintiff questioning the order passed on I.A.No.1 filed under Order XXXIX Rules 1, 2 and 3 of CPC in O.S.No.3401/2025 by V Addl. City Civil and Sessions Judge, Bengaluru (CCH-13) vide Annexure-A, thereby, the application filed for temporary injunction is dismissed.
2. The plaintiff filed the suit for the relief of specific performance of contract. The application filed by the plaintiff for temporary injunction is dismissed.
3. It is the case made out by the plaintiff that there was an agreement to sell dated 17.12.2002 in respect of the suit schedule property for total sale consideration of Rs.3,47,00,000/- and on the very same day, the defendant received an amount of -3- NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR Rs.1,00,00,000/- from the plaintiff by way of four pay orders of Rs.25,00,000/- each dated 14.12.2002. It is the case of the plaintiff that the plaintiff has paid the balance sale consideration amount of Rs.2,47,00,000/- to the defendant on various dates. The defendant has acknowledged the same. Thus, the plaintiff has paid the entire sale consideration amount to the defendant as agreed in the agreement to sell dated 17.12.2002. But the defendant has not come forward for execution of the registered sale deed. Therefore, on 14.12.2004, the plaintiff issued notice to the defendant as to whether the defendant intends to rescind the agreement in terms of Clause No.10 of the agreement. But the defendant neither rescinded the agreement nor sent any reply to the said notice. Therefore, the plaintiff has filed the suit for specific performance of contract.
4. The defendant has filed written statement by contending that he has not agreed to sell the suit schedule property to the plaintiff for total sale consideration amount -4- NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR of Rs.3,47,00,000/- and he has not received the said sale consideration amount. A sum of Rs.1,00,00,000/- was advanced by the plaintiff to the defendant as a loan. It is the case of the defendant that the alleged agreement to sell was executed as a form of security for repayment of loan secured by the defendant from the plaintiff. It is the case of the defendant that the transaction was a loan transaction secured by mortgage by depositing the title deed. Therefore, the agreement to sell is a null and void document.
5. The plaintiff has filed the application for temporary injunction by contending that by virtue of agreement to sell, the defendant has handed over the possession of the suit schedule property. Therefore, he is in possession and also if the defendant makes alienation of the property, then it would cause multiplicity of proceedings. Then also the suit becomes infructuous. Therefore, prays for allowing the appeal. -5-
NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR
6. Upon considering the rival submissions and material produced at this stage, the points that arise for consideration are as under:
(i) Whether, under the facts and circumstances of the case, the plaintiff makes out prima facie case on the basis of the materials produced before the trial Court so as to grant order of temporary injunction?
(ii) Whether, under the facts and circumstances of the case, the plaintiff makes out case of balance of convenience on the basis of the materials produced before the trial Court so as to grant an order of temporary injunction?
(iii) Whether, under the facts and circumstances of the case, if an order of temporary injunction is not granted, then the plaintiff would suffer any irreparable loss or injury?
7. Learned counsel for the appellant/plaintiff submitted that when the dispute arose between the plaintiff and defendant, the same was referred to arbitration. The learned Arbitrator has awarded specific performance of agreement. It was challenged in -6- NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR MFA.No.4587/2017 before this Court whereas the appeal came to be allowed and the arbitration award was set aside. It is challenged before the Hon'ble Apex Court in Civil Appeal No.6231/2023. The Hon'ble Apex Court has permitted the appellant to plead and argue that the transaction in question is not a loan or a mortgage, but an agreement for sale/transfer of property. Therefore, the plaintiff has filed the instant suit for the relief of specific performance. Therefore, the right accrued on the plaintiff by virtue of agreement of sale and hence, if the order of temporary injunction is not granted, then the plaintiff will be put into irrespirable injury and great hardship. Therefore, prays to allow the appeal as the observations made by the trial Court while considering the application are perverse and contrary to the material produced before the trial Court.
8. The learned counsel for the appellant/plaintiff has relied on the following judgments: -7-
NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR i. M.M.Prasanna Kumar Vs. D.Vinod Sivappa and Another - Special Leave to Appeal(C) No.21176/2021 ii. Ramakant Ambalal Choksi Vs. Harish Ambalal Choksi and Others - 2024 SCC Online SC 3538 iii. N.Srinivasa Vs. Kuttukaran Machine Tools Limited - (2009) 5 SCC 182
9. On the other hand, learned counsel for the respondent/defendant submitted that virtually there was no agreement of sale, but it was a loan transaction of mortgage by depositing title deeds. Such agreement of sale was made, but the defendant never intended to sell the property and never executed the agreement of sale. Further submitted that the plaintiff has suppressed the material facts before the learned Arbitrator and obtained the order of temporary injunction, but it was rightly considered by the trial Court that such obtaining of orders -8- NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR by means of fraud does not amenable to the plaintiff to seek equitable right of injunction. On the very same day of alleged allegation, memorandum of charge was executed and it is registered one.
10. The learned counsel for the respondent/defendant has relied on the following judgments:
i. Ambalal Sarabhai Enterprise Limited Vs. KS Infraspace LLP Limited and Another -
(2020) 5 SCC 410 ii. Gayatri Balasamy Vs. ISG Novasoft Technologies Limited - 2025 SCC Online SC 986
11. Learned counsel on both sides have much argued on Sections 21, 43 and 37 of the Arbitration and Conciliation Act and also argued on Sections 37 and 43 of the Specific Relief Act. But the suit filed by the plaintiff is -9- NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR for the relief of specific performance simplicitor. Further submitted that even excluding the period taken for adjudicating the proceedings, the suit filed for specific performance is barred by limitation is the question before the trail Court for adjudication. Therefore, in the background of pleadings made by both the parties whether the plaintiff is entitled for the equitable relief of injunction is the question to be considered.
12. Upon considering the plaint averments on the very same day on 17.12.2002, there were two documents executed, one is agreement of sale, which is unregistered document and the second one is memorandum of charge, which is a registered document. For considering the prima facie case, when the suit is filed for specific performance, whether there is an issue regarding execution of agreement of sale is to be considered in the background of facts and circumstances involved in the case. On the very same day when two documents were executed, it is the memorandum of charges and agreement of sale, but upon
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NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR considering the recitals in the memorandum of charges, prima facie it is a financial transaction between the plaintiff and defendant and when the defendant needed money, therefore, there was financial transaction and the plaintiff has paid Rs.1,00,00,000/- to the defendant and the defendant has mortgaged the property to the plaintiff by way of depositing the title deeds. Further Clause 6 in the document of memorandum of charges, it is made in addition to the Demand Promissory Note and consideration receipt signed by the defendant. On the very same day, the agreement of sale was executed, on the basis of which, the present suit is filed. Therefore, prima facie the agreement of sale is in addition to the security towards loan transaction.
13. The trial Court has observed in the order that, though the plaintiff was under the benefit of the order of temporary injunction, but before the learned Arbitrator the document of memorandum of charges were not pleaded, but it was brought to the notice by the defendant.
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NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR Therefore, such obtaining an order of temporary injunction does not entitle the plaintiff to claim the equitable relief of injunction. Therefore, under these circumstances, whether there was really execution of agreement of sale is the question to be considered during the course of trial. Making out prima facie case is also by the defendant and when comparing the prima facie case between the plaintiff and defendant, the defendant has more probability in making out the prima facie case as to for what reasons the equitable relief of temporary injunction cannot be granted.
14. Both learned counsels have argued much on the provisions of the Arbitration and Conciliation Act by referring Sections 21 and 23 (2) of the Act, but for considering the instant appeal, which is only confined to considering the application for temporary injunction, the said aspects on merits canvassed on Arbitration and Conciliation Act are not considered here, because the scope of the appeal is for considering whether refusal of
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NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR order of temporary injunction is correct or not is the only question involved in the appeal.
15. The plaintiff has not produced document of memorandum of charge before the learned Arbitrator, but the defendant has produced the same, hence it is amounting to suppression of facts before the learned Arbitrator and obtained order of injunction by the learned Arbitrator. As per documents produced, it is also borne out the fact that there was equitable mortgage by depositing title deeds, which prima facie shows that there was financial transaction between the plaintiff and the defendant, but not had intention to sell the property to plaintiff. Execution of agreement of sale is in addition to have more security towards loan advanced, in case, if the defendant fails to repay the amount. This prima facie case is tilted towards defendants so as not to grant equitable relief of temporary injunction in favour of the plaintiff. Therefore, the question arises as to whether the defendant had intended to sell the property and executed the
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NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR agreement of sale is the question for trial which prima facie tilted towards the defendant not to grant equitable relief of injunction.
16. The alleged agreement of sale and memorandum of charges were executed on the very same day on 17.12.2002. The plaintiff has issued notice on 06.03.2005 for the first time to the defendant. As per Clauses in the agreement and even on memorandum of charges, the dispute arose and arbitration proceedings were commenced on 06.04.2007. The learned Arbitrator has awarded in favour of the plaintiff. The said award was set aside on 15.09.2021 by this Court in MFA.No.4587/2017. The learned counsel for the defendant argued with reference to these date of events. Even if as per Sections 21 and 43 of the Arbitration and Conciliation Act, the period undergone in the arbitration proceeding is excluded, but the suit filed for specific performance is
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NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR whether barred by limitation and this is the question to be determined by the trial Court in the suit.
17. Upon considering this memorandum of charge, the entire transaction between the plaintiff and defendant appears to be loan transaction and to securitize the loan availed thereof, the memorandum of charge was executed and it is mortgaged by title deeds. Therefore, the plaintiff does not have prima facie case, so as to grant an order of temporary injunction, which is rightly considered by the trial Court. Thus, the trial Court has dismissed the application, which needs no interference by this Court.
18. When this being the prima facie case made out by the defendant, the trial Court is correct in not granting the order of temporary injunction. Also there is no prima facie document that the plaintiff was put into possession of the property by the said alleged agreement of sale. Admittedly, the defendant is the owner of the property. Therefore, the reasons assigned by the trial Court in dismissing the application do not suffer from any
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NC: 2025:KHC:29863 MFA No. 5551 of 2025 HC-KAR perversity. Therefore, the appeal filed by the plaintiff is liable to be dismissed. Accordingly, it is dismissed.
19. Whatever observation made above are only for the purpose of considering the appeal upon the application filed under Order XXXIX Rules 1, 2 and 3 of CPC and shall not be construed the discussion on merits. Therefore, the trial Court shall consider and dispose of the suit independently on the evidence to be placed before the Court on its merits.
SD/-
(HANCHATE SANJEEVKUMAR) JUDGE PB List No.: 1 Sl No.: 24