Bangalore District Court
Mr.Arifulla Khan vs Mrs.Safinaz on 3 November, 2022
KABC010166112009
IN THE COURT OF THE XI ADDL. CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY (CCH-8)
PRESENT
SRI SANTHOSHKUMAR SHETTY N., B.Com., LL.M.
XI Addl. City Civil & Sessions Judge,
Bengaluru City.
DATED THIS THE 3 rd DAY OF NOVEMBER, 2022
O.S.No.6736/2009
Plaintiff: Mr.Arifulla Khan,
S/o.late Obedulla Khan,
Aged about 57 years,
Residing at Sathnoor Village,
Baglur Post,
Bangalore North Taluk.
Since dead by his
Legal Representative
Smt.Asma Tabasassum,
W/o.late Arifulla Khan,
Aged about 40 years,
Residing at Sathnoor Village,
Bagalur Post,
2 O.S.No.6736/2009
Bengaluru North Taluk,
Bengaluru.
(By Adv.Sri.M.N.Balakrishna)
Vs.
Defendant: Mrs.Safinaz
W/o.Mr.Subhan Khan,
Aged about 40 years,
Residing at No.40, 7th Cross,
Someshwaranagar, 1st Block,
Jayanagar,
Bangalore -560 011.
(By Adv. Sri.M.S.Mukarram)
Date of institution of the suit : 14.10.2009
Nature of the suit : Specific Performance of
Contract & Permanent
Injunction
Date of commencement of : 07.08.2013
Recording of the evidence
Date on which the Judgment : 03.11.2022
was pronounced
Total Duration : Years Months Days
13 00 19
XI ADDL., CITY CIVIL & SESSIONS JUDGE,
BENGALURU CITY.
3 O.S.No.6736/2009
JUDGMENT
This is a suit filed by the plaintiff for the relief of specific performance of contract to direct the defendant to execute the Regular Sale Deed in his favour in respect of the suit schedule property in terms of Sale Agreement dated 10.09.2007 and in the event of failure by the defendant, to get the Sale Deed through the process of the court and consequential relief of permanent injunction, OR in the alternative, for refund of earnest money and liquidated damages for a sum of Rs.94,00,000/- (Rupees Ninety Four Lakhs only) with interest at the rate of 24% per annum from the date of suit till realisation and for the cost of the suit.
2. The brief facts of the case of the plaintiff is that, the defendant being the absolute owner of suit schedule property bearing Municipal No.10/1, PLD No.61-54-10/1, measuring East to West: (42+40)/2 feet and North to South: (73+78)/2, in all measuring 3095.5 square feet, consisting of RCC and ACC Sheet roofed building, situated at Second Main Road, Someshwaranagar Slum, Ward No.61, Bangalore, offered to sell the same in his favour for total sale consideration of Rs.94,50,000/- (Rupees Ninety Four Lakhs and Fifty Thousand). Both the plaintiff and defendant entered into written Agreement on 10.09.2007. At the time of execution of Agreement and subsequent to that date, the defendant had received part sale consideration of Rs.41,00,000/- (Rupees Forty One Lakhs). Both the parties have agreed to 4 O.S.No.6736/2009 complete the sale transaction on or before 31.12.2007, subject to condition that, the defendant shall clear the loan availed by her from the Grain Merchants' Co-operative Bank Limited and to secure the vacant possession from the Mortgagees. As the plaintiff has paid huge part sale consideration, the defendant gave no objection in his favour to collect the rent from the tenants with effect from 01.11.2007. After execution of said Agreement, both the plaintiff and defendant have felt the need of specifying the details of the mortgage transaction in writing. Further the defendant also requested the plaintiff to grant time for completion of the sale transaction till the end of May 2008; on the said date itself, the Supplementary Deed of Sale Agreement was entered into. Wherein, the defendant admitted the facts of mortgaging the property in favour of Haji Razak for Rs.5,00,000/- (Rupees Five Lakhs), Aboobkar for Rs.1,75,000/- (Rupees One Lakh and Seventy Five Thousand) and Wazir for Rs.2,75,000/- (Rupees Two Lakhs and Seventy Five). Further agreed that, in the event of failure of the defendant to hand over the vacant possession, which are under the occupation of the Mortgagees before 31.05.2008, the plaintiff was allowed to deduct the sum of Rs.35,000/- (Rupees Thirty Five Thousand) per month for each month delay from 01.06.2008 in the balance sale consideration. But on 05.12.2008, the defendant got issued the legal notice, cancelling the Sale Agreement and forfeiting the advance amount of Rs.41,00,000/- (Rupees Forty One Lakhs). Hence, the plaintiff sent a reply and brought to her notice about her obligation to obtain permission 5 O.S.No.6736/2009 from the Government to sell the property as it was the Devadaya Inam Land. After receipt of said reply notice, the defendant along with one Mukthar Ahmed Khan approached the plaintiff and requested him to grant time to enable them to obtain permission from the Government and also to get the vacant possession of the suit schedule property. Somewhere in the month of November 2008, the defendant sent a copy of endorsement dated 17.10.2008 issued by the Tahsildar, Bangalore North Taluk. Wherein it was mentioned that, no such permission is required to sell the property. Hence again the plaintiff approached the defendant and expressed his readiness and willingness to get the Sale Deed, subject to deduction of Rs.35,000/- (Rupees Thirty Five Thousand) per month with effect from 01.06.2008. But the defendant issued an evasive reply and has not shown any interest to complete the sale transaction. Therefore, the plaintiff issued the legal notice dated 13.07.2009, calling upon her to deliver the vacant possession of the suit property and to hand over the original documents within 30 days from the date of service of legal notice. But the defendant issued an evasive reply by mis-interpreting the terms of the Sale Agreements. Hence he filed the suit for the relief of specific performance of contract, or in the alternative to recover the earnest money and liquidated damages with interest thereon at the rate of 24% per annum. Even though the plaintiff is entitled for Rs.1,26,77,666/- (Rupees One Crore Twenty Six Lakhs Seventy Seven Thousand Six Hundred and Sixty Six), he restricted his 6 O.S.No.6736/2009 claim for Rs.94,50,000/- (Rupees Ninety Four Lakhs and Fifty Thousand).
3. In response to the suit summons, the defendant appeared through her counsel, filed the detailed written statement and contended that the suit for the relief of specific performance of contract on the basis of two Sale Agreements is not maintainable. The plaintiff has not complied the terms and conditions incorporated in the Agreement. He was not ready and willing to perform his part of the contract, even though the defendant was ready and willing to perform her part of the contract. As the plaintiff has failed to perform his obligation, she has exercised the liberty given to her and terminated the Agreement by issuing the notice. Accordingly, she has validly cancellled the Agreement. The plaintiff has paid the sum of Rs.41,00,000/- only (Rupees Forty One Lakhs only) on various dates. As the plaintiff failed to pay the balance sale consideration and to get the Sale Deed in his favour, the defendant got issued the legal notice on 05.12.2008 by cancelling the Agreement. The said notice was duly served on the plaintiff. Instead of getting the Sale Deed in terms of the Agreement, the plaintiff made baseless allegations against her and also made an illegal demand, which are contrary to the terms and conditions of the Agreement. As per Clause No.(13) of the Agreement, liberty was given to the plaintiff to seek the specific performance of contract by depositing the balance sale consideration before the court. But while instituting this suit, he has not complied the said 7 O.S.No.6736/2009 conditions. The act and conduct of the plaintiff itself discloses that, the story contrived by him in the plaint is a canard. As per Clause No.17 of the Agreement, the plaintiff is entitled to collect the rent from the tenants of the suit schedule property from 01.11.2007. The said Clause clearly indicates authorisation for collection of rent from the tenants, which amounts to delivery of possession. Since Sale Agreement relied by him is not duly stamped, the plaintiff is liable to pay duty and penalty. There is escalation of price of the real estate in and around the suit schedule property. At this stage, if the defendant is directed to execute the Sale Deed in favour of plaintiff, it will definitely result in great hardship. As the Agreement was terminated, the plaintiff is not entitled for refund of advance amount. The defendant after entering into an Agreement with plaintiff, entered into an Agreement with third party. Since the plaintiff has failed to pay the balance sale consideration, she could not able to fulfill the conditions of that Agreement and suffered the loss. The suit of plaintiff is also barred by limitation. Hence, amongst other grounds, she prayed for dismissal of the suit with exemplary cost.
4. On the basis of the pleadings of the parties, my predecessor-in-office has framed the following issues for determination:-
ISSUES
1. Whether the plaintiff proves that he has always been ready and willing to perform his part of 8 O.S.No.6736/2009 contract in terms of the agreement of sale dated 10.09.2007?
2. Whether the defendant proves that the time is the essence of the contract?
3. Whether the defendant proves that the plaintiff has committed breach of agreement of sale dated 10.09.2007 and so she has terminated the Agreement and forfeited the advance amount paid to her by the plaintiff?
4. Whether the plaintiff is entitled for the relief of specific performance of contract?
5. Whether the plaintiff is entitled for the relief of permanent injunction as sought for?
6. Whether the plaintiff is entitled for recovery of a sum of Rs.94,00,000/- together with interest as claimed in the plaint?
7. What decree or order?
5. In order to prove his case, the plaintiff himself has entered into the witness box as PW-1 and Ex.P.1 to Ex.P.13 were marked through him and closed his side. During the pendency of the suit, plaintiff died and his wife came on record as plaintiff No.1(a). On behalf of defendant, the defendant alone has entered into the witness box as DW-1. But no any documents were produced and marked on her behalf.
6. Heard the arguments. The learned counsel for both plaintiff and defendant filed their written arguments.
9 O.S.No.6736/20097. My findings on the above issues are as under:-
Issue No.1: In the negative.
Issue No.2: In the negative.
Issue No.3: In the negative.
Issue No.4: In the negative.
Issue No.5: In the negative.
Issue No.6: Partly in the affirmative.
Issue No.7: As per final order
for the following:
REASONS
8. Issues No.1 to 3:- Since these three issues are interconnected, taken up together for discussion to avoid repetition. Before looking to the points in controversy, first of all, it is necessary to notice some of the undisputed facts. The defendant is the owner of the suit schedule non-residential property bearing Municipal No.10/1, PLD No.61-54-10/1, consisting of RCC and ACC Sheet roofing, situated at Second Main Road, Someshwaranagar Slum, Ward No.61, Bangalore, morefully described in the plaint schedule. The defendant had agreed to sell the suit schedule property for total consideration of Rs.94,50,000/- (Rupees Ninety Four Lakhs and Fifty Thousand) and the Sale Agreements came to be executed between them on 10.09.2007. After execution of two Sale Agreements, the defendant had received the sum of Rs.41,00,000/- (Rupees Forty One Lakhs only) as referred in para No.2 of the plaint. But for one reason or the other, the sale transaction could not be completed.
10 O.S.No.6736/20099. According to the plaintiff, on or before 31.12.2007, the defendant was required to clear the loan obtained by her from the Grain Merchants' Co-operative Bank Limited and to secure the vacant possession of the suit schedule property from the Mortgagees and other tenants. But the defendant failed to comply with the conditions stipulated in the Agreement, even though the plaintiff was ever ready to get the Sale Deed in his favour.
10. In his oral evidence, the plaintiff has reiterated the averments made in the plaint. The documents marked through him at Ex.P.1 and P.2 are the Sale Agreements executed by the defendant in his favour in respect of the suit schedule property on 10.09.2007. Ex.P.3 is the Endorsement issued by the Special Tahsildar, Bangalore North Taluk stating that, even though the suit schedule property was the Devadaya Inam Land, no permission is required for its alienation. Ex.P.4 to P.11 are the voluminous legal notices and reply notices exchanged between the parties. Ex.P.12 and P.13 are the Bank Statements of the plaintiff, to show that he was having sufficient balance to pay the balance sale consideration.
11. Per contra, it was the contentions of the defendant that, as per terms of the Sale Agreement, the plaintiff was required to pay the sum of Rs.45,00,000/- (Rupees Forty Five Lakhs) on or before 30.09.2007. Since the plaintiff failed to pay the aforesaid 11 O.S.No.6736/2009 sum of Rs.45,00,000/- (Rupees Forty Five Lakhs) within the stipulated period, she was compelled to terminate the Agreement and to forfeit the earnest money as per the terms of the Agreement. As the time was the essence of contract and on account of latches on the part of plaintiff, he is not entitled for any relief. In her examination-in-chief, she has reiterated the averments made in the written statement.
12. Placing reliance on the pleadings and evidence, the learned counsel for plaintiff has argued that, the suit of the plaintiff is supported by sufficient oral and documentary evidence. Ex.P.1 is the Sale Agreement. In terms of that Agreement, there was an obligation on the defendant to take possession of the suit schedule property from the Mortgagees and tenants. Further, she was required to discharge the loan obtained by her from the Grain Merchants' Co-operative Bank Limited. Though she had received the sum of Rs.41,00,000/- (Rupees Forty One Lakhs) to discharge the bank loan and to clear the mortgage money, she failed to fulfill her part of contract. As there were tenants in the suit schedule property and certain portions of the property were mortgaged by the defendant, the Supplementary Agreement at Ex.P.2 was executed. The Bank Statement produced by the plaintiff clearly shows that, he was having capacity to pay the balance sale consideration. As such, he is entitled for the relief of specific performance of contract. Merely because he sought for an alternative relief for refund of earnest money and liquidated 12 O.S.No.6736/2009 damages, the relief of specific performance of contract cannot be denied. Since the defendant abruptly cancelled the Sale Agreement, the plaintiff was constrained to file this suit. As such, suit is well in time. In support of the said contention, he relied on the decision of the Apex Court reported in AIR 1993 SC 1120; Smt.Thakamma Mathew Vs. M.Azamathulla Khan and others. In Paras No.8 and 9 of the said decision, it was held as under:-
"In the instant case, the seller by her notice had clearly indicated that he had cancelled the agreement and had forfeited the advance amount of Rs.18,000/- deposited by the purchaser of property. By the said notice, it was clearly indicated that the seller was no longer willing to perform the agreement to sell. In the circumstances, it was incumbent upon the purchaser to have filed a suit for specific performance of the contract within a period of three years from the date of the said notice of cancelling agreement and if such a suit had been filed by him, it would have been open to the seller to show that it was barred by the provision contained in S.16 of the Specific Relief Act. The purchaser did not choose to adopt that course and remained content with defending the suit filed by the seller for cancellation of the agreement to sell and for recovery of the possession of the property."
13. Further argued that, even though the plaintiff was ready to pay the entire sale consideration and to get the Sale Deed in his favour on the date of Agreement, as there were tenants in the suit schedule property and portions of the property were mortgaged, the sale transaction could not be completed on the date of Agreement. Further, in view of latches on the part of 13 O.S.No.6736/2009 defendant, there was delay in completing the sale transaction. The mere escalation of price is not ground to reject the relief of specific performance. In support of the said contention, the learned counsel for plaintiff has relied on the decision of the Hon'ble Supreme Court reported in AIR 2010 SC 3025; Laxman Tatyaba Kankate and another Vs. Smt.Taramati Harishchandra Dhatrak. In para No.17 of the said decision, it was held as under:
"Plea that there has been considerable increase in price of suit land - Even if true, cannot be ground to deny specific performance."
14. It was argued on behalf of the plaintiff that, in view of the conduct and attitude of defendant, the time was not the essence of contract. Further, no notice was issued by the defendant stating that as the time was essence of contract, she has terminated the contract. In support of the said contention, the learned counsel for plaintiff relied on the decision of the Madras High Court reported in AIR 2002 Madras 352; Sri Brahadambal Agency and Partnership Firm Vs. Ramasamy and others . At paras No.45, 46 and 48 of the said decision, it was held as under:
"Time not essence of contract - Purchaser seeking clarification from vendor about existence of encumbrances on property - Instead of giving clarification vendor terminating contract before expiry of three years period from the date of execution of contract on lame excuses that purchaser was not equipped with instalment amount etc. - Not legal - Mereso, when purchaser was prepared to pay remaining instalments in lump sum."14 O.S.No.6736/2009
15. As stated earlier, the other points urged on behalf of the plaintiff is that, claiming damages as an alternative relief is not ground to refuse the main relief of specific performance. In support of the said contention, the learned counsel for plaintiff has relied on the decision of the Apex Court reported in AIR 2000 SC 2408; Motilal Jain Vs. Smt.Ramdasi Devi and others . In para No.12 of the said decision, it was held as under:
"Damages claimed as alternative relief - That cannot be ground to refuse main relief of specific performance to plaintiff."
16. It was argued on behalf of the plaintiff that, even though there were latches on the part of defendant, all of a sudden, she issued a legal notice terminating the Agreement and contended that she is entitled to forfeit the earnest money. In such a situation, the conduct of defendant is relevant for consideration. In support of the said contention, the learned counsel for plaintiff has relied on the decision of the Hon'ble Supreme Court reported in 2008 (4) KCCR 2374 (SC); Silvey and others Vs. Arun Varghese and another. In the said decision, it was held as under:
"The conduct of the defendant cannot be ignored while weighing the question of exercise of discretion for decreeing or denying a decree for specific performance. In the present case, the High Court had clearly observed that the defendant was not ready and willing to perform his part of the obligation under the contract. Held, appeal was without merit."15 O.S.No.6736/2009
17. The other points urged on behalf of the plaintiff is that, as the Sale Agreement is valid and legal and the plaintiff has complied the terms stipulated in the Agreement, he is entitled for the discretionary relief. In support of the said contention, the learned counsel for plaintiff has relied on the decision of the Hon'ble Supreme Court reported in 2014 (5) KCCR 1270 (SC); K.Prakash Vs. B.R.Sampath Kumar. In the said decision, it was held as under:
"Discretion must be exercised in accordance with sound and reasonable judicial principles and not in an arbitrary manner - Once agreement to sell is legal, validly proved and further requirements for getting decree is established, then Court has to exercise its discretion in favour of granting relief for specific performance."
18. The learned counsel for plaintiff has argued that, even though the property was mortgaged, it is not an impediment to get the Sale Deed in favour of plaintiff. In support of the said contention, he relied on the decision of the Hon'ble Supreme Court reported in AIR 2005 KARNATAKA 142; Balabai Vithoba Shirole and another Vs. Narayan Krishna Salunke and another. In the said decision, it was held as under:
"At the relevant time of agreement property subjected to charge in favour of Mahabhavi Co-operative Society - Right of owner of property cannot be curtailed - Thus said charge would not be impediment to consider grant of specific performance of agreement of sale."16 O.S.No.6736/2009
19. The learned counsel for plaintiff further argued that, the starting point of limitation to file the suit for specific performance is the date of refusal i.e., from the knowledge of refusal. On that score also the suit is well in time. In support of the said contention, he relied on the decision of our Hon'ble High Court reported in AIR 2004 KARNATAKA 31; Mallappa Vs. Srinivaa Rao and others. Further argued that, as no plea of hardship was pleaded in the written statement, now the defendant cannot take such contention with sole intention to defeat the claim of plaintiff. In support of the said contention, he relied on the decision of the Hon'ble Supreme Court reported in AIR 2002 SC 2388; A.Maria Angelena (d) and others Vs. A.G.Balkis Bee. In the said decision, it was held as under:
"Suit for specific performance of contract - Grant of compensation in lieu of specific performance - No plea as to hardship if relief for specific performance is granted raised by defendant-vendor in written statement - No issue framed that plaintiff-purchaser could be compensated in terms of money in lieu of decree for specific performance - Plea cannot be entertained for first time in appeal by way of SLP."
20. While marking Sale Agreement, the defendant raised certain objections. Hence it was marked subject to objections. In support of his arguments, the learned counsel for plaintiff has relied on the decision of the Hon'ble Supreme Court reported in AIR 2007 SC 637; Shyamal Kumar Roy Vs. Sushil Kumar Agarwal. In the said decision, it was held as under:
17 O.S.No.6736/2009"Insufficiently stamped document if admitted in evidence, S.36 gets attracted and Court is prohibited from re-opening matter - The question of judicial determination of matter arises when objection is taken when document is tendered in evidence and before it is marked as an exhibit in the case."
21. It was argued by the learned counsel for plaintiff that, as there were latches on the part of defendant in fulfilling her part of obligation, she cannot contend that the suit is barred by limitation. In support of the said contention, he relied on the Division Bench decision of our Hon'ble High Court reported in 2005 (3) KCCR 1881 (DB); Smt.Saraswathamma Vs. H.Sharad Shrikande and others. In the said decision, it was held as under:
"Agreement of sale - When promissor himself has undertaken in contract to do something before completion of sale, limitation for specific performance will not start running until that act is performed by the promissor, even though there is a fixed time in the Agreement for performance".
22. Further argued that, Ex.P.12 and P.13 makes it clear that, the plaintiff was having sufficient money with him to pay the balance sale consideration. Such being the case, he need not tender money to show his readiness. In support of the said contention, the learned counsel for plaintiff has relied on the decision of our Hon'ble High Court reported in 2009 (1) KCCR 369; K.Subramani Vs. Zaheerunnisa Begum and others . In the said decision, it was held as under:
18 O.S.No.6736/2009"Tendering money by the plaintiff is not a necessity what is need in that place shall produce when called for and also that the direction should be used indiciously and not in an arbitrary manner."
23. Refuting each and every contentions taken by the plaintiff, the learned counsel for the defendant in his written arguments has reiterated the contentions taken in the written statement. Further he drew the attention of this court on certain admissions given by PW-1 in his cross-examination. Further contended that, an unconscionable contract relied by the plaintiff is one sided and unfair to one of the parties, hence it is unenforceable under law. As the plaintiff has violated the terms of the contract as per Section 16 of the Specific Relief Act, the plaintiff is not entitled for any relief. Further the plaintiff fails to aver and prove his readiness and willingness. On that score also, the plaintiff is not entitled for any relief. In support of the said contention, he relied on the decision of the Apex Court reported in (1996) 4 SCC 526; His Acharya Swami Ganesh Dassji Vs. Sita Ram Thapar. In the said decision, it was held as under:
"Where plaintiff neither had sufficient funds to pay the consideration amount nor was he acting promptly within the stipulated time where time was of the essence of the contract, held, he was neither ready nor willing to perform his part of the contract - Hence plaintiff not entitled to decree for specific performance of the contract."19 O.S.No.6736/2009
24. He further argued that, the subsequent Agreement entered on the said date is in contravention of the earlier Agreement. As per Clause No.(2) and (3), there was obligation on the plaintiff to pay the earnest money of Rs.45,00,000/- (Rupees Forty Five Lakhs) on or before 30.09.2007. Further, he required to pay the balance sale consideration of Rs.49,50,000/- (Rupees Forty Nine Lakhs Fifty Thousand) on or before 31.12.2007. But the plaintiff has concealed all these facts in the plaint. As per Clause No.(14) of the of the Agreement marked at Ex.P.1, in case, the purchaser failed to pay the balance sale consideration and to get the Sale Deed, the liberty was given to the defendant to terminate the Agreement by issuing the notice.
25. As the plaintiff has not pleaded the true version of the agreed terms and conditions, it is clear that, his only intention was to defraud the defendant. When the plaintiff himself was not ready and willing to perform obligation casted on him, he is not entitled for any relief. In support of the said contention, the learned counsel for defendant has relied on the decision of the Hon'ble Supreme Court reported in 2022 SCC OnLine SC 71;
Shenbagam and others Vs. K.K.Rathinavel.
"In evaluating whether the respondent was ready and willing to perform his obligations under the contract, it is not only necessary to view whether he had the financial capacity to pay the balance consideration, but also assess his conduct throughout the transaction."20 O.S.No.6736/2009
26. The learned counsel for defendant further argued that, as there were latches on the part of the plaintiff in fulfilling the conditions stipulated on him, he is not entitled for the discretionary relief of specific performance of contract. Since the Agreement is of the year 2007, the amended provisions of the Specific Relief Act is not applicable to the case on hand. In support of the said contention, he relied on the 3 Judge Bench decision of Hon'ble Supreme Court reported in 2022 SCC OnLine SC 1079; Katta Sujatha Reddy and another v. Siddamsetty Infra Projects Pvt. Ltd. In paras No.53 and 56 of the said decision, it was held as under:
"When a substantive law is brought by amendment, there is no assumption that the same ought to be given retrospective effect. We do not hesitation in holding that, the 2018 amendment to the Specific Relief Act is a prospective and cannot apply to those transactions that took place prior to its coming into force."
27. As per the terms of the Agreement, the plaintiff was required to pay the entire sale consideration and shall complete the sale process on or before 31.12.2007. Hence the period of limitation begins to run when the date is fixed for performance. In support of the said contention, he relied on the 3 Judge Bench decision of the Hon'ble Supreme Court reported in (2009) 5 SCC 462; Ahmadsahab Abdul Mulla (dead) by proposed LRs Vs. Bibijan and others. In para No.11 of the said decision, it was held as under:
21 O.S.No.6736/2009"The expression "date fixed for the performance" is a crystalised notion. This is clear from the fact that the second part "time from which period beings to run" refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on "when the plaintiff has notice that performance is refused. Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances."
28. The learned counsel for defendant in his written argument has taken further contention that, the defendant is an illiterate and pardahnishin lady. She has to take care of her 3 daughters. Taking undue advantage of her weaknessses, the plaintiff got created the document to suit his convenience. On that score also, neither the plaintiff nor his legal heir on record is entitled for any relief. In support of the said contention, he relied on the decision of the Hon'ble Supreme Court reported in (2001) 6 SCC 600; A.C.Arulappan Vs. Smt.Ahalya Naik. In the said decision, it was held as under:
"Held, discretion of court regarding grant of specific relief, is not to be exercised in arbitrary or unreasonable manner - Equitable principles in S.20, held, must be kept in mind while granting decree for specific performance - Agreement for sale of tenanted and mortgaged suit property, without stipulation as to time of execution of sale deed, showing that primary purpose of defendant- vendor was to clear his substantial debts; respondent- plaintiff twice demanding back advance payment made by 22 O.S.No.6736/2009 her, with interest; some evidence indicating that coercion was used to get appellate-defendant to enter into second more stringent agreement for sale; and respondent also trying during litigation process to gain possession of suit property by colluding with tenant - Held on facts, respondent had tried to take unfair advantage of appellant-defendant, had approached court with unclean hands, and had behaved unfairly throughout - High Court erred in allowing respondent's appeal and in decreeing her suit for specific performance."
29. It was contended by the learned counsel for defendant that, as there is no consistency in pleadings and evidence, the discretionary relief cannot be granted in favour of plaintiff. In support of the said contention, he relied on the decision of the Apex Court reported in (2019) 3 SCC 704; Kamal Kumar Vs. Premalata Joshi and others. In the said decision, it was held as under:
"The specific relief being discretionary remedy, material questions looked into are: (i) existence of valid concluded contract; (ii) readiness and willingness of plaintiff to perform his part of contract; (iii) plaintiff performing his part of the contract and its extent and manner, and whether such performance in consonance with the terms of the contract; (iv) whether it is equitable to grant relief of specific performance regarding suit property or it causes any hardship to the defendant and, if yes, how and in what manner and such relief can be granted; and (v) entitlement of plaintiff to any other alternative remedy such as refund of earnest money with interest, etc. and on what grounds such relief can be granted - Parties must properly plead and prove their respective stand - Once parties plead and 23 O.S.No.6736/2009 proved their respective case, court can exercise its discretionary power."
30. In this suit, the plaintiff has sought for the relief of specific performance of contract or in the alternative for refund of earnest money and liquidated damages. But looking to the facts and circumstances of the case, no such relief can be granted in favour of plaintiff. In support of the said contention, the learned counsel for defendant relied on the decision of the Hon'ble Supreme Court reported in (2015) 5 SCC 531; Shamsheer Singh and others Vs. Rajinder Kumar and others . In Paras No.11 to 17 the said decision, it was held as under:
"Both the purported agreement of sale as well as the subsequent compromise have major discrepancies in them. Certain clauses in both the documents seem to unduly favour the plaintiffs. The terms of the agreement do no seem equitable and lit seems unlikely that a seller would agree to such clauses. This seems to be a clear case of terms of a contract resulting in an unfair advantage for the plaintiffs over the defendants. It will be inequitable to grant a decree of specific performance in this case where it is clear that the plaintiffs have an unfair advantage over the defendants and the trial court has rightly exercised its discretion not to grant specific performance. The trial court has clearly explained the reasons for not granting a decree of specific performance and instead granted a decree for recovery of the money from the defendants and this falls squarely within the conditions set out in Section 20(2)(a) and (b) of the Act. The jurisdiction to grant decree of specific performance is discretionary and Section 20(2) lists the cases in which the court may properly exercise discretion not to grant decree of specific performance."24 O.S.No.6736/2009
31. The first and foremost contention taken by the defendant is that, the averments made in the plaint are not in consonance with the terms of the Sale Agreements. Hence suit for specific performance of contract is liable to be dismissed. In support of the said contention, the learned counsel for defendant has relied on the decision of the Apex Court reported in (2012) 2 SCC 300; J.Samuel an others Vs. Gattu Mahesh and others . In para No.13 of the said decision, it was held as under:
"In the absence of specific averment that plaintiff has performed and is always ready and willing to perform essential terms of contract, reiterated, suit for specific performance of contract is liable to be dismissed and decree for specific performance of contract cannot be granted."
32. It was argued on behalf of defendant that, the self serving statement that he is having sufficient fund to pay the balance sale consideration alone is not sufficient to prove his readiness and willingness. In support of the said contention, the learned counsel for defendant relied on the decision of our Hon'ble High Court reported in 1998 SCC OnLine Kar 188:
K.K.Achayya (since deceased) by LRs. Vs. Syed Mukthan . In the said decision, it was held as under:
"Initial burden to allege and prove the factum of readiness and willingness to perform his part of the contract by the plaintiff from the date of contract till the date of suit and its decision at least was of the plaintiff and this burden was fastened on the plaintiff - So as to be 25 O.S.No.6736/2009 entitled to get decree for specific performance of the contract - Following the law laid down in the case of Gurupadayya Shivayya Hiremath, AIR 1978 Kant 98 it was held that conduct of plaintiff should not be anything other than his readiness and willingness to perform his part of the contract - Mere bald allegation that the plaintiff had been ready and willing to perform his part of the contract by itself not sufficient for relief of specific performance - It was also necessary that whether the said allegations stand proved - The purchaser-plaintiff-respondent did not comply with the first obligation under the agreement to at least deposit an amount of Rs.75,000 in the Syndicate Bank in his own name - Which amount had to be transferred at the time of registration in favour of the vendor that is the defendant-appellant."
33. Even though the property was the Devadaya Inam Land, the Special Tahsildar issued an endorsement that, for alienation of such land the parties need not take permission from any Authority. Inspite of production of said endorsement, the plaintiff did not take any trouble to get the Sale Deed in time. In support of the said contention, the learned counsel for defendant relied on the decision of our Hon'ble High Court reported in (2011) 8 SCC 601; Coromandel Indag Products Private Limited Vs. Garuda Chit and Trading Company Private Limited and another. In the said decision, it was held as under:
"Agreement of sale provided that sale shall be completed on or before 5-9-1981 or within one week from date of furnishing ITCC by vendor - Depsite production of ITCC by vendor, appellant Company demanding various other documents contending that sale got delayed due to non- production of exemption certificate from Urban Land 26 O.S.No.6736/2009 Ceiling Authorities by vendor - Tenability - On facts held, appellant was not justified in calling for various documents since it entered into Agreement for sale after fully satisfying itself as to title deeds of property - Further, production of exemption certificate from competent authority under Urban Land Ceiling Act, 1976 was neither specified in agreement nor intended at any point of time - Also, no part of said property comes under purview of 1976 Act and no further exemption was needed in view of proviso to S.3 of 1976 Act - Hence, contention that matter got delayed due to non-production of exemption certificate from Urban Land Ceiling Authorities, held, untenable."
34. Keeping in mind the law laid down in the aforesaid decisions, I have carefully gone through the pleadings and evidence of the parties. Ex.P.1 and P.2 are the Sale Agreements came to be executed on the same day i.e., on 10.09.2007. In Clause No.3 of Ex.P.1, the duty cast on the plaintiff to pay additional advance of Rs.25,00,000/- (Rupees Twenty Five Lakhs) to the defendant on or before 30.09.2007. But it is not in dispute that, apart from initial advance of Rs.20,00,000/- (Rupees Twenty Lakhs), the plaintiff had paid another sum of Rs.21,00,000/- (Rupees Twenty One Lakhs) and in total, he paid Rs.41,00,000/- (Rupees Forty One Lakhs). Further as per Clauses No.4 and 5 of the Agreement, there was obligation on the plaintiff to pay the balance sale consideration of Rs.49,50,000/- (Rupees Forty Nine Lakhs & Fifty Thousand) to the defendant at the time of registration of Regular Sale Deed. Accordingly, there was obligation on the defendant to clear the loan 27 O.S.No.6736/2009 at the Grain Merchants' Co-operative Bank Limited and accordingly, further duty cast upon the defendant to repay the mortgage money to the Mortgagees.
35. As per Clause No.13 of the Agreement, in case the defendant fails to execute the Registered Sale Deed by receiving the balance sale consideration within the stipulated time or the extended time, liberty was given to the plaintiff to seek specific performance of contract by depositing the balance sale consideration before the court. Further, in case the plaintiff fails to pay the balance sale consideration and to get the Regular Sale Deed within the stipulated time or the extended time, liberty was given to the defendant to terminate the Agreement by issuing notice to the plaintiff and in that event, the defendant shall refund the advance amount paid by the plaintiff after deducting interest at the rate of 14% per annum on the advance paid, as well as rent collected by him.
36. The Second Agreement throw more clarity about the Mortgagee and the amount payable in their favour. As per Clause No.(1) of Ex.P.2, there was an obligation on the defendant to take vacant possession of the property, which were in occupation of the Mortgagee by paying mortgage amount in their favour. As per Clause No.3 of the said Agreement, if the defendant fails to hand over the vacant possession on or before 31.05.2008, liberty was given to the plaintiff to deduct Rs.35,000/- (Rupees Thirty Five Thousand) per month in the balance sale consideration.
28 O.S.No.6736/200937. On perusal of terms and conditions incorporated in Ex.P.1 and P.2, the intention of the parties was very clear. Having interested to purchase the suit schedule property the plaintiff had entered into the Sale Agreement with the defendant and initially paid sum of Rs.20,00,000/- (Rupees Twenty Lakhs) and thereafter made payment of another sum of Rs.21,00,000/- (Rupees Twenty One Lakhs). The defendant on her own agreed to alienate the property in favour of plaintiff for total consideration of Rs.94,50,000/- (Rupees Ninety Four Lakhs and Fifty Thousand). As per terms of the Agreement, she was required to discharge her loan at the Grain Merchants' Co-operative Bank Limited, as well as to refund the mortgage money. She already performed the marriage of her one daughter and other two daughters are depending on her. But looking to the contentions of the plaintiff and rival contentions of the defendant, both have adopted the theory of pick and choose. Both of them gave much stress on the terms and conditions which are favourable to them and tried to suppress the Clauses which are not favourble to them.
38. Looking into the terms and conditions incorporated in Ex.P.1 and P.2, it is crystal clear that, there was no impediment to the parties to enter into one Agreement incorporating all the terms and conditions. But instead of that, they have entered into two Agreements and thereby, some of the Clauses incorporated in the Agreements are ambiguous and contrary to each other. Whatever may be the stand taken by the plaintiff, the Clause No.3 in Ex.P.1 29 O.S.No.6736/2009 makes it very clear that, it was his bounden duty to pay in all sum of Rs.45,00,000/- (Rupees Forty Five Lakhs) on or before 30.09.2007. Looking to his Bank Statements marked at Ex.P.12 and P.13, there are reasons to believe that he was having substantial sum of money to pay the entire balance sale consideration. But for the reasons best known to him, he did not take any trouble to discharge the obligation casted on him.
39. On perusal of cross-examination of DW-1, she has clearly admitted the Sale Agreements marked at Ex.P.1 and P.2 and the terms and conditions incorporated therein. Further admitted that, initially she has received the sum of Rs.20,00,000/- (Rupees Twenty Lakhs only) and thereafter, she received another sum of Rs.21,00,000/- (Rupees Twenty One Lakhs only) on various dates as referred in the plaint. In her cross-examination at page No.25, she has clearly admitted that, she promised to pay the mortgage money in favour of the Mortgagees and to discharge the bank loan and to take back the original documents from the bank. Further admitted that, she did not inform the plaintiff that she has cleared the bank loan and her readiness to execute the Sale Deed in his favour. In her cross-examination dated 11.04.2016, she has clearly admitted that, sum of Rs.12,00,000/- (Rupees Twelve Lakhs) was due from her towards bank loan. That itself shows that, as on that day, her loan at the Grain Merchants' Co-operative Bank Limited was not cleared. Further in her cross-examination dated 19.07.2016, she has admitted that just few days prior to that date, she has cleared 30 O.S.No.6736/2009 the bank loan. In her cross-examination dated 26.07.2016, she has admitted that, some of the tenants are still running Bakery, Medical Shops and other establishments in the suit schedule property.
40. The unequivocal admissions given by the parties makes it very clear that, there were latches on the part of both plaintiff and defendant. Even though the plaintiff promised to pay the sum of Rs.45,00,000/- (Rupees Forty Five Lakhs) on or before 30.09.2007 he has paid the sum of Rs.42,00,000/- only (Rupees Forty One Lakhs). Even though the defendant had received substantial sum of Rs.41,00,000/- (Rupees Forty One Lakhs) from the plaintiff, till 11.04.2016, she did not take any pain to clear the bank loan and take possession of the suit schedule property
41. On perusal of the terms and conditions incorporated in Ex.P.1 and P.2, no liberty was given to the defendant to forfeit the earnest money. Though opportunity was given to her to terminate the Agreement by issuing notice to the plaintiff, in that event, the burden lies upon her to refund the advance amount after deducting interest at the rate of 14% per annum on the advance amount. This being the state of affair and for the reasons stated above, no reasons to hold that, the time stipulated in the Agreement was not strictly followed by both plaintiff and defendant. With these observations, Issues No.1 to 3 are answered in the negative.
42. Issue Nos.4 to 6:- In this suit, the plaintiff sought for the relief of specific performance of contract and consequential relief of 31 O.S.No.6736/2009 injunction against the defendant and in the alternative, he sought for recovery of earnest money and liquidated damages and in total, he claimed Rs.94,50,000/- (Rupees Ninety Four Lakhs and Fifty Thousand) from the defendant. But while answering afore mentioned issues, this court has come to the conclusion that, the terms and conditions incorporated in Ex.P.1 and P.2 are little bit ambiguous and contrary to each other and thereby, there were latches on the part of plaintiff and defendant.
43. Herein it is relevant to mention that, during the pendency of the suit, the plaintiff died and plaintiff No.1(a) herself filed an application under Order XXII Rule 3 of CPC. The said application was resisted by the defendant contended that, the plaintiff No.1(a) is not the widow of deceased plaintiff and she is total stranger to the family of deceased plaintiff. In view of objections raised by the defendant, the plaintiff No.1(a) was forced to enter into the witness box to substantiate her contention and produced Wedding Card and various other documents at Ex.A.1 to A.15, to show that she is the Class-I legal heir of deceased plaintiff. Thereafter, considering the oral and documentary evidence placed by plaintiff No.1(a), she was permitted to come on record. But when the matter was set down for final arguments, the brothers and sisters of deceased plaintiff have filed I.A.No.12 under Order XXII Rule 5 & 10 r/w Section 151 of CPC seeking permission to come on record as assignees / legal representatives of deceased plaintiff. The said IA was resisted by plaintiff No.1(a) on various grounds. One of such contentions taken 32 O.S.No.6736/2009 by her is that, at the instigation of the defendant, the brothers and sisters of deceased plaintiff have filed the said IA. After hearing the argument of both parties on said IA, this court has rejected the said application.
44. Now, it is clear that, after institution of this suit, so many developments have been taken place and the widow of original plaintiff has been prosecuting this matter for redressal. But as stated earlier, the plaintiff failed to pay the agreed sum of Rs.45,00,000/- (Rupees Forty Five Lakhs) within the stipulated period. Hence it is clear that, there was latches on the part of plaintiff. Further the defendant also failed to discharge her loan and to take possession of the suit schedule property after repaying the mortgage money. In the aforesaid decisions relied by both plaintiff and defendant, the Hon'ble Apex Court made it clear that, the relief of specific performance is a discretionary relief and duty casted upon the court to look into all pros and cons of the matter. As observed earlier, in the Agreement itself there was an obligation on the plaintiff to deposit the balance sale consideration amount before the court. But no such condition has been complied by him. Hence no reasons to hold that, the plaintiff is entitled for the relief of specific performance of contract in respect of the suit schedule property. Such being the case, the granting of permanent injunction in favour of the plaintiff does not arise.
33 O.S.No.6736/200945. In this suit, the plaintiff has sought for an alternative relief of refund of earnest money and for liquidated damages, in total, he claimed Rs.94,50,000/- (Rupees Ninety Four Lakhs and Fifty Thousand) together with interest at the rate of 24% per annum, from the date of suit till realisation. But for non-completion of sale transaction, the plaintiff cannot blame the defendant alone. As such, there is no merits in his contention that he is entitled for liquidated damages. However, there are reasons to believe that the plaintiff is entitled for refund of earnest money with reasonable interest from the date of respective payments. Otherwise, it would leads to unjust enrichment in favour of the defendant. In this suit, the defendant has taken contention that, she is an illiterate, pardanishin lady and she is eking her livelihood to manage the entire family. But the tone and tenor of her cross-examination makes it very clear that, she is an educated lady and competent to enough think rationally. Further, she put her signature in English. This being the state of affair, this court did not find any force in the other contentions taken by the learned counsel for defendant in the written arguments.
46. It is an admitted fact that, the sum of Rs.41,00,000/- (Rupees Forty One Lakhs only) was received by the defendant long back and she was gainfully benefited from the said amount. Such being the case, it is her bounden duty to repay the said money in favour of plaintiff No.1(a) with reasonable interest. Accordingly, Issues No.4 and 5 are answered in the negative and Issue No.6 is answered partly in the affirmative.
34 O.S.No.6736/200947. Issue No.7: In view of the above discussions, I proceed to pass the following:-
ORDER Suit of the plaintiff is partly decreed as under:
For the reasons stated in the body of the judgment, the relief of specific performance of contract in favour of plaintiff is refused and in the alternative, the defendant is directed to refund earnest money of Rs.41,00,000/- (Rupees Forty One Lakhs only) to the plaintiff No.1(a) with interest at the rate of 12% per annum, from the date of respective payments, as referred in para No.4 of the plaint, till realisation.
The plaintiff No.1(a) is entitled for proportionate cost on the decreetal amount.
Draw decree accordingly.
(Dictated to the Judgment Writer, typed by her, the transcript thereof corrected and then pronounced by me, in the open court, on this the 3rd day of November, 2022) (SANTHOSHKUMAR SHETTY N.) XI ADDL., CITY CIVIL & SESSIONS JUDGE BENGALURU CITY.35 O.S.No.6736/2009
ANNEXURE List of witnesses examined for plaintiff:-
PW.1 Arifulla Khan
List of documents exhibited for plaintiff:-
Ex.P.1: Original Deed of Agreement to Sell
dated 10.09.2007
Ex.P.1(a to d): Endorsements on Ex.P.1
Ex.P.1(e & f): Signatures of Plaintiff
Ex.P.1(g to j): Signatures of Plaintiff
Ex.P.2: Deed of Agreement dated 10.09.2007
Ex.P.2(a & b): Signatures of Plaintiff
Ex.P.3: Endorsement dated 17.10.2008
Ex.P.4: Legal Notice dated 05.12.2008
Ex.P.5: Reply notice dated 13.01.2009
Ex.P.6: Postal Receipt
Ex.P.7: Postal Certificate
Ex.P.8: Postal Acknowledgement
Ex.P.9: Rejoinder Notice dated 29.01.2009
Ex.P.9(a): Postal Envelope
Ex.P.10: Office copy of Notice dated 13.07.2009
Ex.P.11: Reply Notice dated 10.08.2009
Ex.P.11(a) Envelope
Ex.P.12: Statement of Account
Ex.P.13: Customer Ledger Account Extract
List of witnesses examined for defendant :-
D.W.1 Mrs. Safinaz
List of documents exhibited for defendant:-
- Nil -
XI ADDL., CITY CIVIL & SESSIONS JUDGE
BENGALURU CITY.
36 O.S.No.6736/2009