Karnataka High Court
Hanumantappa S/O. Chandrappa ... vs Jagadish S/O. Hansraj Thakkar on 13 June, 2025
Author: Hanchate Sanjeevkumar
Bench: Hanchate Sanjeevkumar
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NC: 2025:KHC-D:7654
RFA No. 4137 of 2012
HC-KAR
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 13TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR
REGULAR FIRST APPEAL NO. 4137 OF 2012 (SP)
BETWEEN:
1. SHRI. HANUMANTAPPA
S/O. CHANDRAPPA GORDANAVAR,
AGE: 57 YEARS,
OCC: AGRICULTURE,
R/O. KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028.
SINCE DECEASED BY HIS LR'S
1(A) SMT. NEELAMMA,
W/O HANUMANTAPPA GORDANNAVAR,
AGE: 64 YEARS,
OCC: HOUSEHOLD WORK,
Digitally signed by R/O.KOKATI ONI,
MALLIKARJUN
RUDRAYYA KALMATH NEAR CHURCH UNKAL,
Location: HIGH COURT
OF KARNATAKA HUBBALLI - 580 028.
DHARWAD BENCH
1(B) MANJULA
W/O PEERAPPA DEVAKHATE
AGE: 39 YEARS,
OCC: HOUSEHOLD WORKS,
R/O.KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028.
1(C) MEENAKASHI
W/O LAXMAN HUNDENNAVAR,
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RFA No. 4137 of 2012
HC-KAR
AGE: 30 YEARS,
OCC: STUDENT
R/O.RAMANNA LAYOUT, KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028.
1(D) SIDDAPPA
S/O HANUMANTAPPA GORDANAVAR,
AGE: 39 YEARS,
OCC: AGRICULTURE,
R/O.KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028.
1(E) BASAVARAJ
S/O HANUMANTAPPA GORDANAVAR,
AGE: 33 YEARS,
OCC: AGRICULTURE,
R/O.KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028.
2. SHRI. ARJUNAPPA
S/O. CHANDRAPPA GORDANAVAR
AGE: 53 YEARS,
OCC: AGRICULTURE,
R/O.KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028
3. SHRI. SAHADEVAPPA
S/O. CHANDRAPPA GORDANAVAR
AGE: 47 YEARS,
OCC: AGRICULTURE,
R/O.KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028.
SINCE DECEASED BY HIS LR'S
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RFA No. 4137 of 2012
HC-KAR
3(A) GEETA
W/O SAHADEVAPPA GORDANAVAR
AGE: 57 YEARS,
OCC: HOUSEHOLD WORK,
R/O.KOKATI ONI,
UNKAL, HUBBALI ENG COLLEGE,
HUBBALLI - 580 031.
3(B) SUNIL SAHADEVAPPA GORDANAVAR
URF TIPPOJI
AGE: 30 YEARS,
OCC: NIL
R/O.KOKATI ONI,
NEAR CHURCH UNKAL,
HUBBALLI - 580 028.
3(C) SHRUTI
W/O MANJUNATH WAGHMODE
AGE: 29 YEARS,
OCC: HOUSEHOLD WORKS
R/O. DAJIBAN PETH, ANCHATGERI ONI,
HUBBALLI, M V GALLI, DHARWAD,
HUBBALLI - 580 028.
3(D) SUNITHA
W/O VITHAL DEVAKHATE
AGE: 29 YEARS,
OCC: HOUSEHOLD WORKS
R/O. KELAGADE ONI,
KHANDOJI CHAWL,
NAGASHETTIKOPPA,
HUBBALLI, KESHWAPUR,
DHARWAD - 580 023.
3(E) LAXMI
D/O SAHADEVAPPA GORADANNAVAR
AGE: 33 YEARS,
OCC: AGRICULTURE
R/O.KOKATI ONI, UNKAL
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RFA No. 4137 of 2012
HC-KAR
HUBBALLI ENG COLLEGE,
HUBBALLI - 580 031.
..APPELLANTS
(BY SRI. V.M.SHEELVANT, ADVOCATE)
AND:
1. SHRI. JAGADISH
S/O. HANSRAJ THAKKAR
AGE: 53 YEARS,
OCC: AGRICULTURE
R/O. 46, ADARSH NAGAR,
HUBBALLI
2. SHRI. SIDANNA
S/O. BASAVANEPPA KANVALLI
AGE: 54 YEARS,
OCC: AGRICULTURE
R/O. VIDYANAGAR, HAVERI
....RESPONDENTS
(BY SRI. BHAT V.A.GANAPATI, ADVOCATE FOR
SRI. AAYUSH.G.BHAT FOR R1 & R2 (NOC))
THIS RFA IS FILED U/S.96 R/W. ORDER 41 RULE 1 OF
CPC, AGAINST THE JUDGMENT AND DECREE DTD: 31.07.2012
PASSED IN O.S.NO.90/2009 ON THE FILE OF THE FIRST
ADDITIONAL SENIOR CIVIL JUDGE, HUBLI, DECREEING THE
SUIT FILED FOR SPECIFIC PERFORMANCE OF CONTRACT.
THIS APPEAL, HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT AND COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, JUDGMENT IS DELIVERED THEREIN AS
UNDER:
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RFA No. 4137 of 2012
HC-KAR
CAV JUDGMENT
(PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR) The regular first appeal is filed by the defendants challenging the judgment and decree dated 31.07.2012 passed in O.S.No.90/2009 by the Court of First Addl. Senior Civil Judge, Hubli, thereby the suit filed by the plaintiffs for specific performance of contract is decreed in full directing the defendants to execute the registered sale deed in favour of the plaintiffs by receiving the balance sale consideration amount.
2. Rank of the parties are referred to as per their rankings before the trial court.
PLAINT:
3. It is the case of the plaintiffs that the defendants are owners of suit schedule property and they had asked for financial assistance from the plaintiffs in the first week of March, 2007 and offered to sell the suit schedule property to the plaintiffs. The defendants agreed to sell -6- NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR suit property for a total sale consideration of Rs.11,25,000/- and the plaintiffs have agreed to purchase the said property. Accordingly, agreement of sale dated 06.03.2007 was executed and the plaintiffs have paid a sum of Rs.2,50,000/- through pay order of State Bank of India, Hubli, for Rs.1,50,000/- and another sum of Rs.1,00,000/- was paid through cheque of Bank of Maharastra.
3.1. Further it is stated by the plaintiffs that subsequent to agreement of sale dated 06.03.2007 as above stated the plaintiffs have paid further sum of Rs.1,25,000/- to the defendants and accordingly, made an endorsement on the agreement of sale. Thus, plaintiffs have paid an earnest amount of Rs.3,75,000/- out of total sale consideration of Rs.11,25,000/- and the plaintiffs were ever ready and willing to perform their part of contract and as such called upon the defendants to execute the registered sale deed, but the defendants refused to execute the registered sale deed and as such, -7- NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR plaintiffs were constrained to file the suit for specific performance of contract.
3.2. Further it is the case of plaintiffs that panchayath was convened before the elders of the locality and in that negotiations the defendants have agreed to execute the registered sale deed, but even so defendants have not come forward to execute the registered sale deed. Therefore, the plaintiffs have got issued legal notice dated 07.05.2009 to the defendants by calling upon the defendants to execute the registered sale deed. Therefore, the plaintiffs also got published public auction notice in Vijaya Karnataka, Kannada Daily Newspaper, informing the world at large regarding the agreement of sale. However, the defendants continued to negotiate to third parties to cause loss to the plaintiffs. Therefore, with these facts by showing as cause of action arose for filing the suit, filed the suit for specific performance of contract seeking direction against the defendants to execute the registered sale deed in favour of the plaintiffs by receiving -8- NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR balance sale consideration of Rs.8,00,000/- and also issued direction to hand over the possession of the suit property as per law.
WRITTEN STATEMENT:
4. The defendants have entered appearance through their learned Advocate and filed the written statement and denied all the plaint averments. The defendants have specifically denied the plaint averments. The defendants have denied that they had asked for financial assistance by offering land for sale and execution of agreement of sale by receiving balance sale consideration amount. 4.1. The defendants have denied that they have agreed to sell the suit property for total sale consideration of Rs.11,75,000/- and the plaintiffs agreed to purchase the same accordingly. Further denied that the agreement was reduced into writing and executed an agreement of sale by offering the land for Rs.11,75,000/- in total. Further denied that the defendants have received an advance -9- NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR amount of Rs.3,75,000/- out of total sale consideration amount of Rs.11,75,000/-. Thus, the defendants have denied execution of agreement of sale dated 06.03.2007 in presence of two witnesses namely, (1) Rajanna M. Koravi and (2) Siddu Hanumanthappa Goradanavar, son of first defendant. Thus, the defendants have totally denied the case of plaintiffs as it is false one.
4.2. Further the defendants denied that the plaintiffs were always ready and willing to perform their part of contract. Further the defendants have denied that plaintiffs have called upon the defendants to perform their part of contract by issuing legal notice and also by paying part sale consideration of Rs.1,25,000/-. Thus, the defendants have denied the case of the plaintiffs and also denied that there was settlement talks held between the plaintiffs and defendants in the presence of elders for execution of sale deed in favour of the defendants.
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR 4.3 Further the defendants denied that defendants have attempted to transfer the suit property to third parties detrimental to the right and interest of the plaintiffs. Further denied that the plaintiffs have got issued public notice through newspaper informing the whole world regarding the agreement of sale. Though it might have been published, but that is not concerned to the defendants.
4.4 The defendants have taken pleadings by stating the truth of matter involved by stating that defendants in the last week of February 2007 were in dire need of money for their agricultural activities and as such, defendant No.3 approached his friend with a request to advance hand loan of Rs.2,50,000/- to them, but efforts to secure the amount went to vain. Then the defendants came to know that plaintiff No.1 advances the loan on interest to others, therefore, the defendants have approached plaintiff No.1 with a request to advance hand loan of Rs.2,50,000/-. Initially plaintiff No.1 declined to
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR advance loan to the defendants, but after continuous persuasion the plaintiff No.1 agreed to advance loan provided the defendants to give proper security to them for due repayment of the loan amount and interest thereon. The plaintiff No.1 insisted defendants to give a signed non judicial stamp paper for the security purpose for the payment of loan amount. The defendants declined to do so. The plaintiff No.1 assured the defendants stating that said non judicial stamp paper will not be used against the interest of the defendants so long as they go on paying the agreed interest at rate of 2% p.m. on the amount advanced. The defendants without any alternative agreed to do so. Therefore, plaintiff No.1 has obtained signature of the defendants in the middle portion of the non judicial stamp paper of face value of Rs.100/. The defendants are illiterate. On the strength of assurance given by the plaintiff No.1, the defendant No.1 has put his LTM and defendant Nos.2 and 3 have subscribed their signatures on the said non judicial stamp paper in good
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR faith. Then the plaintiff No.1 has paid Rs.2,50,000/- to the defendants as a loan. It is stated that part of the said amount is paid through pay order and part of it through cheques. The defendants promised the plaintiff No.1 to repay the said loan amount within a period of 6 months. 4.5 Further pleaded that on 15.05.2007 the defendant No.3 has paid Rs.13,000/- to the plaintiff No.1 towards interest for the said loan amount. On 01.09.2007 the defendant No.3 has also repaid part of the loan amount of Rs.1,20,000/- to the plaintiff No.1. The defendants due to failure of crops and other domestic problems could not repay the remaining loan amount of Rs.1,30,000/- to the plaintiff No.1. The defendants requested several times and assured the plaintiff No.1 that as soon as their financial position is improved they would repay the entire balance amount of loan with agreed interest thereon. Then the plaintiff No.1 started demanding exorbitant interest on the balance loan amount. The defendants expressed their inability to do so
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR and promised to pay reasonable interest but not compound interest. The plaintiff No.1 being unsatisfied got issued the notice dated 07.05.2009 to the defendants contending that the defendants have executed the agreement of sale with respect to the suit property in favour of plaintiffs. The defendants were shocked and surprised to receive such notice, then immediately the defendants approached the plaintiff No.1 and enquired about the said notice. The defendants also assured the plaintiffs to repay the balance amount of loan at the earliest. Thereafter the plaintiff No.1 and defendants arrived at a settlement and defendants agreed to settle the loan amount within a period of three months. Thereafter, the defendants received the suit summons. Hence, the defendants submitted that they have never executed agreement of sale in favour of the plaintiffs and the defendants have never intended to execute the sale deed in favour of plaintiffs and whatever amount received by the plaintiff No.1 is only a loan and
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR the alleged stamp paper was executed for security purpose for the loan. But the plaintiffs have got illegally converted the said non judicial stamp paper into an agreement of sale fraudulently and started to make false claim and accordingly a false and frivolous suit filed. Therefore, prays to dismiss the suit.
5. Based on the pleadings, the trial court has framed following issues:
1) Whether the plaintiffs prove that the defendants have agreed to sell suit property for Rs. 11,75,000/- received earnest money of Rs.3,75,000/- and executed agreement of sale on 06.03.2007?
2) Whether the plaintiffs are ever ready and willing to perform their part of contract?
3) Whether the plaintiffs are entitled for specific performance of contract? If not, entitled for refund of earnest money?
4) Whether the defendants proves the payment of Rs.13,000/- towards interest and Rs.1,20,000/- towards principal amount of loan to plaintiff No.1 on 15.05.2007 and on 01.09.2007 respectively?
5) What order or decree?
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
6. In order to prove the case of plaintiffs, plaintiff No.1 is examined as PW1 and two witnesses are examined as PW2 and PW3 and got marked documents as Exs.P-1 to P-10(a), (b) and (c).
7. On behalf of defendants, the defendant No.3 is examined as DW1 and got marked documents as Ex.D1 to D3.
REASONINGS OF THE TRIAL COURT:
8. The trial court has decreed the suit for the relief of specific performance of contract in full and directed the defendants to execute the registered sale deed in favour of plaintiffs in respect of suit property by receiving balance consideration amount of Rs.8,00,000/- from the plaintiffs, failing which the plaintiffs are to get executed the sale deed registered through Court as per procedure under the Law. The trial court has assigned the reason that defendants have executed Ex.P-1 - agreement of sale by receiving earnest amount of Rs.3,75,000/- and executed
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR agreement of sale on 06.03.2007. Further the trial court has assigned the reason that plaintiffs were ever ready and willing to perform their part of contract. The trial court held that from the evidence on record agreement of sale is proved to have been executed and thus, the defendants have agreed to part with the suit property as per agreement of sale, therefore it is held that the agreement of sale is proved.
9. Further assigned reasons that the plaintiffs have issued public notice through newspaper calling upon the whole world that the plaintiffs have agreed to purchase the land of suit property as per the agreement of sale. Therefore, this proves that the plaintiffs were ever ready and willing to perform their part of contract. Thus, decreed the suit for a specific performance of contract by directing the defendants to execute the registered sale deed by receiving balance sale consideration amount of Rs.8,00,000/-.
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR MEMORANDUM OF APPEAL:
10. Being aggrieved by the decree of trial court, the defendants have preferred the appeal by raising various grounds that the trial court has failed to note that time is essence of contract as the parties by agreement have fixed time limit of six months for executing the sale deed, but the plaintiffs did not come forward to get the sale deed executed till 2009 and they have started issuing notice as per Exs.P-2 - paper publication and Ex.P-3 - legal notice so that to make convenient to the case. As per the time fixed in Ex.P-1, the plaintiffs did not show their readiness and willingness to perform their part of contract and only in the year 2009 they issued notice. Therefore, the trial court has committed error in answering Issue No.2 in the affirmative.
11. Further raised the ground that the plaintiffs are not definite about the property for which they have agreed to purchase as PW1 in his cross examination stated that he has agreed to purchase 25 guntas of land situated on
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR the western side of 4 acres 25 guntas, whereas in the agreement of sale - Ex.P-1 it is mentioned that the property executed is to the eastern side of the property measuring 5 acres 26 guntas. Therefore, there is no consistency in the story made by the plaintiffs.
12. The relief sought for by the plaintiffs is discretionary and the trial court ought to have dismissed the suit since passing the decree for a specific performance of contract is amounting to arbitrary and unfair advantage over the defendants by the plaintiffs.
13. Further PW1 in the cross examination admitted that the defendants do not know to read and write Kannada language and that they put the signatures in Kannada only and further expressed their ignorance about the defendants being agriculturists by avocation and they do not know about the worldly affairs. The plaintiffs being businessmen only to gulp the property of the defendants and taking undue advantage of the innocence of the
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR defendants got created document styled as 'agreement of sale' by obtaining signatures of the defendants on blank papers and misusing the same as 'agreement of sale'.
14. Further the trial court had committed error to note that the said agreement of sale is unregistered one and possession is with the defendants and the defendants never intended to execute an agreement of sale and have never given possession and document executed was only as a security for the loan given by the plaintiff No1.
15. The defendants do not own any other property other than suit property and they being agriculturists by avocation, they are fully dependent on the income of the said land for their livelihood. Further raised the ground that plaintiffs do not know their definite case because in the cross examination the PW1 admitted that after partition the defendant No.3 will become the owner to the extent of 24 guntas, whereas in Ex.P-1 agreement it is mentioned as 25 guntas and therefore, the plaintiffs do
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR not have definiteness about their case and it proves that there is no such execution of agreement of sale. Further the signatures found on Ex.P-1 are falsely taken on the blank papers. The trial court failed to notice that in Ex.P-1
- agreement of sale in the first two pages signatures of the defendants are not bearing and there is no explanation to the effect by the plaintiffs why the signatures on the first two pages were not taken. Therefore, whatever writings on the non judicial stamp paper is only for the purpose of security for taking hand loan from plaintiff No.1, but not the signatures after having understood the agreement of sale. Therefore, the trial court has not appreciated the evidence on record properly resulting into injustice to the defendants. Therefore, prays to allow the appeal and set aside the judgment and decree passed by the trial court.
16. Heard arguments from both sides and perused the records. The points that would arise for consideration are as follows:
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RFA No. 4137 of 2012
HC-KAR
(i) Whether, under the facts and
circumstances involved in the case, the plaintiffs prove that the defendants have executed the agreement of sale dated 06.03.2007 to sell the suit property for a sum of Rs.11,75,000/- and received earnest money of Rs.11,75,000/-?
(ii) Whether, under the facts and circumstances involved in the case, the plaintiffs prove that they were ever ready and willing to perform their part of contract?
(iii) Whether, under the facts and circumstances involved in the case, the defendants prove that they have repaid the amount of Rs.13,000/- towards interest and Rs.1,20,000/- towards principal amount of loan to plaintiff No.1 on 15.05.2007 and on 01.09.2007 respectively?
(iv) Whether, under the facts and circumstances plaintiffs are not entitled for decree for specific performance but are entitled refund of amount involved in the case, plaintiffs are entitled for decree for a
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR specific performance of contract? If not, entitled for refund of earnest money?
(v) Whether the judgment and decree passed by the trial court requires any interference?
17. All the points are interlinked with each other, hence, they are taken up for common consideration. SUBMISSION OF COUNSEL FOR DEFENDANTS/APPELLANTS:
18. The learned counsel for the appellants/defendants vehemently submitted that defendants have never executed agreement of sale dated 06.03.2007. The defendants have never intended to sell away the land in favour of plaintiffs by entering into an agreement of sale above stated. Further submitted that the defendants being agriculturists and the suit schedule land is the only land for defendants for their agricultural purpose for their livelihood and for agricultural operations, the defendants have faced financial crunch, therefore approached the plaintiffs for loan and in this
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR regard, a false agreement of sale was created by the plaintiff No.1 by taking signatures of the defendants on the blank non judicial stamp paper, thus whatever the document is styled as 'agreement of sale' is created and concocted one. Further submitted that time is the essence of contract, but the plaintiffs did not stick on to the time stipulated in the agreement. Also submitted that suit schedule land is the only land for defendants for agricultural purpose and therefore, discretionary relief may be exercised in favour of defendants since the grant of decree by the trial court for granting a specific relief of contract in whole, is nothing but undue advantage over the defendants by the plaintiffs and is arbitrary. Therefore, prays for exercise of discretionary relief as per Section 20 of the Specific Relief Act, 1963, by ordering to refund the hand loan taken by the defendants to the plaintiffs. Therefore, prays to dismiss the appeal.
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR SUBMISSION OF COUNSEL FOR RESPONDENTS/PLAINTIFFS:
19. On the other hand, learned counsel for the plaintiffs vehemently submitted that defendants have collectively executed the agreement of sale dated 06.03.2007 by agreeing for total sale consideration of Rs.11,75,000/- and have received Rs.3,75,000/- as an earnest amount. Therefore, agreement of sale is proved and it is correctly held by the trial court. Further submitted that as on the date of agreement of sale dated 06.03.2007 an amount of Rs.2,50,000/- was paid by the plaintiffs to the defendants through pay order for Rs.1,50,000/- and cheque for Rs.1,00,000/- to the defendants. Thereafter, once again on 31.08.2007 the defendants have received further sum of Rs.1,25,000/-
from the plaintiffs and have made an endorsement on Ex.P-1 agreement of sale, which conclusively prove the fact that the defendants have executed an agreement of sale which proves the intention on the part of defendants
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR to sell over the land as per agreement of sale. This is correctly answered by the trial court, which needs no interference. Therefore, prays to dismiss the appeal.
20. Further argued that the plaintiffs were ever ready and willing to perform their part of contract and accordingly, when the defendants have attempted to sell away the land to others they got issued paper publication in the newspaper informing the whole word that there was an agreement of sale between plaintiffs and defendants. This proves that plaintiffs were ever ready and willing to perform their part of contract. The trial court has correctly answered all the issues in favour of plaintiffs by appreciating the oral and documentary evidence of both parties and in its well considered judgment has decreed the suit in full for a specific performance of contract, which needs no interference. Therefore, prays to dismiss the appeal.
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21. Further learned counsel for the plaintiffs/respondents places reliance on the judgment of Hon'ble Supreme Court in the case of P.DAIVASIGAMANI v. S.SAMBANDAN1 in which judgment the Hon'ble Supreme Court has passed decree in favour of plaintiffs directing the respondents to deposit a sum of Rupees One Crore in the trial court towards sale consideration over and above the amount that might have deposited by him and also on such deposit being made the appellants shall execute the sale deed in favour of the respondents. Thereafter, in the said line, the learned counsel for the respondents/plaintiffs submitted that the plaintiffs are ready to pay even more Rs.50,00,000/- (Rs. Fifty Lakhs) towards defendants due to escalation of price during the pendency of the suit and appeal. Therefore, prays to dismiss the suit by confirming the judgment and decree of the trial court directing the appellants/defendants to receive further sum of 1 (2022) 14 SC 793
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR Rs.50,00,000/- (Rs. Fifty Lakhs) from plaintiffs and execute registered sale deed in favour of plaintiffs. Thus, in this way, learned counsel for the respondents/plaintiffs prays to dismiss the appeal.
REASONINGS:
22. Upon considering the entire case on record, pleadings and evidence on record, the suit is basically one for a specific performance of contract. As per the case of plaintiffs the defendants have agreed for sale of the suit schedule land for total consideration of Rs.11,75,000/- and thus, defendants executed an agreement of sale dated 06.02.2007 and the defendants have received earnest amount of Rs.3,75,000/-. The case of plaintiffs is denied by the defendants and the case of defendants is that the defendants being illiterate and rustic persons in the village and being agriculturists, have faced financial constraints for agricultural activities. Therefore, requested the plaintiffs to offer hand loan and in this regard, the plaintiffs have asked the defendants to give security to the
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR loan, thus in this way, the defendants have put their signatures on the non judicial stamp paper and therefore, Ex.P-1 is not at all agreement of sale but it is a document towards security of loan transaction.
23. In these pleadings between the parties and evidence adduced by both the parties, the case is analysed with reference to the evidence on record produced before the trial court. PW1 being plaintiff No.1 is also one of the agreement holder has reiterated his pleadings taken in the plaint in the examination-in-chief. Ex.P-1 is the alleged agreement of sale relied on by the plaintiffs. Ex.P-1 is the original agreement of sale dated 06.03.2007. Upon considering this agreement of sale which runs into 4 pages, the first two pages do not contain signature of the defendants. Only the third and fourth page of the agreement of sale contains signature of the defendants. As per the defendants when they have received hand loan from plaintiff No.1 for the purpose above stated, the plaintiff No.1 has taken signatures on
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR the middle of blank non judicial stamp paper and thus, it is created falsely for the purpose of agreement of sale. There is no explanation by the plaintiffs as to why the signatures are not taken on the first two pages of the Ex.P-1. If at all there was an execution of agreement of sale then signatures would have been on all four pages. This creates doubt whether really the agreement of sale is executed or not.
24. Then upon considering the oral evidence of PW1, he has stated that he is an agriculturist doing agricultural activities but PW1 had admitted that he does not know what is the survey number of his land. Further submitted that his land was situated in Netra Village in Gujarat State. In the cross-examination PW1 admitted that his main business is manufacturing polythene bags in Hubballi. When the main business of the PW1 is manufacturing polythene bags, then the question comes in the mind of the Court is that when PW1 has intended to purchase the suit schedule land, which is an agricultural
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR land and for what purpose he has intended to purchase land, is to be considered by taking note of the judicial fact. Admittedly, the defendants are agriculturists by profession. It is the evidence of DW1 being defendant No.3 that he is an agriculturist by profession and the suit schedule land is the only land for his agricultural activities for livelihood. Therefore, to exercise the discretionary relief under Section 20 of the Specific Relief Act, 1963 (hereinafter referred to as 'the Act' for the sake of brevity) these factors are to be taken into consideration based on the evidence on record by taking a judicial note of the fact in the background of evidence on record.
25. Section 20 of the Specific Relief Act (Before Amendment), 2018, is a discretionary relief, which reads as follows:
"20. Discretion as to decreeing specific performance.-- (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR reasonable, guided by judicial principles and capable of correction by a court of appeal.
(2) The following are cases in which the court may properly exercise discretion not to decree specific performance:--
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;
or
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.
Explanation 1.-- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b).
Explanation 2.-- The question whether the performance of a contract would involve
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.
(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party."
26. The Hon'ble Supreme Court in various judgments by interpreting Section 20 of the Specific Relief Act (hereinafter referred to as 'the SR Act' for short), has laid down principle of law that granting relief of decree for specific performance is discretionary relief, subject to the principles laid down in Section 20 of the SR Act. Just because an agreement of sale is proved, that cannot be made a reason to grant decree for specific performance, though it is lawful to do so.
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
27. The grant of decree for specific performance is guided by the principle of law laid down and what are the criteria that the Court shall consider upon the facts and circumstances involved in the case. It is worthwhile to refer some of the judgments of the Hon'ble Supreme Court, which are as follows:
28. The Hon'ble Supreme Court in the case of JAYAKANTHAM AND OTHERS v. ABAYKUMAR2, at paragraph Nos.7, 8 and 9 has held as follows:
"7. While evaluating whether specific performance ought to have been decreed in the present case, it would be necessary to bear in mind the fundamental principles of law. The court is not bound to grant the relief of specific performance merely because it is lawful to do so. Section 20(1) of the Specific Relief Act, 1963 indicates that the jurisdiction to decree specific performance is discretionary. Yet, the discretion of the court is not arbitrary but is "sound and reasonable", to be "guided by judicial principles". The exercise of discretion is capable of being corrected by a court of appeal in the hierarchy of appellate courts. Sub- section (2) of Section 20 contains a stipulation of those cases where the court may exercise its discretion not to grant specific performance. Sub- Section (2) of Section 20 is in the following terms:2
(2017) 5 SCC 178
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR "20. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance-
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-
performance would involve no such hardship on the plaintiff;
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance."
8. However, Explanation 1 stipulates that the mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, will not constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Moreover, Explanation 2 requires that the issue as to whether the performance of a contract involves hardship on the defendant has to be determined with reference to the circumstances existing at the
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR time of the contract, except where the hardship has been caused from an act of the plaintiff subsequent to the contract.
9. The precedent on the subject is elucidated below:
9.1. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son3, this Court held that:
(scc p. 345, para 14) "...14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case. The Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The Court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff..."
9.2 A similar view was adopted by this Court in Sardar Singh v. Krishna Devi4: (SCC p.26, para
14) "14....... Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief, merely because it is lawful to do so;
but the discretion of the court is not arbitrary but sound and reasonable, 3 1987 Supp SCC 340 :AIR 1987 SC 2328 4 (1994) 4 SCC 18
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract."
9.3. Reiterating the position in K. 5 Narendra v. Riviera Apartments (P) Ltd , this Court held thus: (SCC p.91, para 29) "29...... Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya 5 (1999) 5 SCC 77
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR Arogiaswamy6 by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court."
9.4. These principles were followed by this Court in A.C. Arulappan v. Ahalya Naik7, with the following observations: (SCC pp.604 & 606, paras 7 & 15) "7...... The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is 6 (1996) 5 SCC 589 7 (2001) 6 SCC 600
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff." ........
"15...... Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the court....."
9.5. A Bench of three Judges of this Court considered the position in Nirmala Anand Vs. Advent Corporation (P) Ltd8., and held thus : (SCC p.150, para 6) "6...... It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, 8 8 (2002) 8 SCC 146
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen."
29. In the case of Parakunnan Veetill Joseph's Son Mathew Vs. Nedumbara Kuruvila's son9, at paragraph No.14, it is held as follows:
"14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of courts as to decreeing specific performance. The court should meticulously consider all facts and 9 (1987) Supp SCC 340
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff. The High Court has failed to consider the motive with which Varghese instituted the suit. It was instituted because Kuruvila could not get the estate and Mathew was not prepared to part with it. The sheet anchor of the suit by Varghese is the agreement for sale Exhibit A-1. Since Chettiar had waived his rights thereunder, Varghese as an assignee could not get a better right to enforce that agreement. He is, therefore, not entitled to a decree for specific performance."
30. In the case of Sardar Singh Vs. Krishna Devi10 at paragraph No.14, it is held as follows:
"14. The next question is whether the courts below were justified in decreeing the suit for specific performance. Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief, merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, 10 (1994) 4 SCC 18
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract."
31. In the case of K. Narendra Vs. Riviera Apartments (P) Ltd.,11 at paragraph Nos.29, 30, 31, 32, 33 and 34, it is held as follows:
"29. Section 20 of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary and the court is not bound to grant such relief merely because it is lawful to do so; the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. Performance of the contract involving some hardship on the defendant which he did not foresee while non- performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact 11 (1999) 5 SCC 77
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SCC 589 :
AIR 1996 SC 2814] by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court.
30. Chitty on Contracts (27th Edn., 1994, Vol. 1., at p. 1296) states:
"Severe hardship may be a ground for refusing specific performance even though it results from circumstances which arise after the conclusion of the contract, which affect the person of the defendant rather than the subject-matter of the contract, and for which the plaintiff is in no way responsible."
31. Very recently in K.S. Vidyanadam v. Vairavan [(1997) 3 SCC 1] this Court has held: (SCC p. 7, para 10) "10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the court by both Sections 10 and 20. As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani [(1993) 1 SCC 519 : AIR 1993 SC 1742] : (SCC p.
528, para 25) '... it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the court may infer that it is to be performed in a reasonable time if the conditions are (evident?): (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract.' In other words, the court should look at all the relevant circumstances including
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades -- particularly after 1973."
32. Referring to the principle that mere rise in prices is no ground for denying the specific performance the Court has emphasized the need for being alive to the realities of life and inflationary tendencies judicially noticeable and observed: (SCC p. 9, para 11) "Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties -- evolved in times when prices and values were stable and inflation was unknown -- requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so."
33. The Court has further proceeded to hold: (SCC pp. 9-10, para 11) "All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties)."
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
34. Having noticed the Constitution Bench decision in Chand Rani [(1993) 1 SCC 519 : AIR 1993 SC 1742] the Court has further held: (SCC p. 11, para 14) "Even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property."
32. In the case of A.C. Arulappan Vs. Ahalya Naik12 at paragraph No.7, 8, 9, 10 and 15, it is held as follows:
"7. The jurisdiction to decree specific relief is discretionary and the court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the court need not grant the order for specific relief; but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in Section 20(2) of the Specific Relief Act, 1963 as to under what circumstances the court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the court may not exercise its discretion in favour of the plaintiff. So 12 (2001) 6 SCC 600
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the court would desist from granting a decree to the plaintiff.
8. In Damacherla Anjaneyulu v.
Damcherla Venkata Seshaiah [1987 Supp SCC 75 : AIR 1987 SC 1641] the High Court declined to grant a decree for specific performance in favour of the plaintiff, even though the defendant was guilty of breach of agreement. That was a case where the defendant had constructed costly structures and if a decree for specific performance was granted, the defendant would have been put to special hardship. This Court directed the defendant to pay compensation to the plaintiff.
9. In Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son [1987 Supp SCC 340 : AIR 1987 SC 2328] this Court cautioned and observed as under:
(SCC p. 345, para 14) "14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion to courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR an instrument of oppression to have an unfair advantage to the plaintiff."
10. In Lourdu Mari David v. Louis Chinnaya Arogiaswamy [(1996) 5 SCC 589 :
AIR 1996 SC 2814] the plaintiff, who sought for specific performance of an agreement to purchase immoveable property, filed a suit with incorrect and false facts. In the plaint, it was alleged that the plaintiff was already given possession of Door No.2/53 as a lessee and he was given possession of Door No.1/53 on the date of the agreement itself. But he did not give any evidence that he had got possession of Door No.1/53 on the date of the agreement. It was found that his case as regards Door No.1/53 was false. He also alleged that he had paid Rs.400 in addition to the sum of Rs.4000 paid as advance, but this was proved to be an incorrect statement. He alleged that the third defendant had inspected the house during the course of negotiations, but this also was found to be false. This Court held that it is settled law that the party who seeks to avail of the jurisdiction of a court and specific performance being equitable relief, must come to the court with clean hands. In other words, the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief.
15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR specific performance, these salutary guidelines shall be in the forefront of the mind of the court. The trial court, which had the added advantage of recording the evidence and seeing the demeanour of the witnesses, considered the relevant facts and reached a conclusion. The appellate court should not have reversed that decision disregarding these facts and, in our view, the appellate court seriously flawed in its decision. Therefore, we hold that the respondent is not entitled to a decree of specific performance of the contract."
33. Section 20 of the Act is a discretionary relief. Just because an agreement of sale is proved and grant of decree is lawful to be so, still the Court has its discretion which are governed as per sub-section (2) of Section 20 of the Act. Therefore upon the principle of law laid down by the Hon'ble Supreme Court and applying the factors governing as per sub-section (2) of Section 20 of the Act, when the case is considered the alleged agreement is dated 06.03.2007, there is no evidence by the plaintiffs that the defendants have also other agricultural lands and as per the evidence on record it is proved that the defendants are owners of the suit
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR schedule land only for their agricultural activities for their livelihood. There is no evidence by the PW1 that the defendants also own other agricultural lands. In this regard, there is no evidence by PW1 either oral or documentary. Therefore, from the evidence on record it is proved that the suit schedule land is the only land for the defendants for their livelihood. The suit schedule land admittedly is an agricultural land. As per the evidence of PW1 what is admitted in the cross examination is that plaintiff No.1 is proved to be a businessman being manufacturer of polythene bags, as such PW1 is not an agriculturist, but PW1 is desiring to purchase the agricultural land that too small bit of land. Therefore when making a comparison of hardships between plaintiffs and defendants, if decree is granted for specific performance of contract in full then the defendants will lose their entire source of livelihood also for their family members, whereas the PW1 intended to purchase agricultural land is not the only source of income for
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR him. Therefore, when compared to hardship analysed between plaintiffs and defendant and the principle of law laid down by the Supreme Court and enshrined in sub- section (2) of Section 20 of the Act, if the decree is granted for specific performance of contract then the defendants would face more hardship compared to plaintiffs. The interest of the plaintiffs could be protected by refunding the earnest amount with interest, but if the decree is granted then the defendants and their family members could be deprived of their livelihood. Therefore, if this factor is considered then the discretion must be exercised in favour of the defendants by only ordering defendants to refund the earnest amount received by them with interest. Therefore, considering the hardship is also one of the factors governing for exercising proper discretion involved in the case.
34. By considering the above said documentary evidence of Ex.P-1 and admissions in cross-examination of PW1 it is proved that agreement of sale is doubtful one,
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR since the first two pages do not contain signatures of the defendants. Moreover, upon considering the factors of hardship the plaintiffs are not entitled to relief of decree for specific perform of contract, but their interest could be protected by refunding the amount.
35. Further upon considering the admissions of PW1 in his cross examination and the recitals in Ex.P-1 - agreement of sale, there is a material contradiction between Ex.P-1 and admission of PW1 in his cross examination. In Ex.P-1 in the first page it is the recital that total agricultural land is 5 acres 29 guntas and as per Ex.P-1 - agreement of sale eastern side to the extent of 0- 25 guntas is subject matter in the agreement of sale Ex.P-
1. Whereas the PW1 in the cross examination admitted that in Ex.P-1 - agreement of sale he has intended to purchase western side of the land. This proves the fact that plaintiffs are not definite about their intended purchase of land. Therefore, this proves the fact that plaintiff just they have intended to purchase the land
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR without knowing on which side they want the land. If an agriculturist has real intention source to purchase land, then he will have a definiteness of the intended purchase of land. In the present case, as discussed above, PW1/plaintiff No.1 is a businessman/industrialist of manufacturing polythene bag. Therefore, Ex.P-1 document creates doubt in the mind of the Court whether really there was an execution of agreement of sale.
36. The defendant No.1 had put his Left Hand Thumb impression as admitted by PW1 in the cross examination as well as it is proved from appearance on the agreement of sale Ex.P-1. Further PW1 admitted in his cross examination that defendant Nos.2 and 3 do not know reading and writing in Kannada language and they can only do the signatures in Kannada. This evidence of PW1 and upon seeing Ex.P-1 it is proved that the defendants are illiterates and rustic persons do not know much about worldly affairs and taking undue advantage of the innocence and ignorance of the defendants, the Ex.P-1
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR might have been prepared just to suit the convenience of plaintiffs. Therefore, this evidence creates doubt regarding the genuineness of the execution of Ex.P-1 agreement of sale.
37. Further in the cross examination PW1 admitted that there was no partition amongst defendants in the family and after writing down Ex.P-1, the PW1 had made division of numbers and it is a difficult task. After partition the suit schedule land to the extent of 0-13 Guntas was fallen to the share of defendant No.3. At the same time, PW1 admitted that there was no partition in the family of the defendants by metes and bounds. Therefore, it is not clear as to who is the real owner of the suit schedule land to the extent 4 acres 25 guntas whether all the defendants collectively or defendant No.3 only. Upon appreciating evidence of PW-1 the execution of agreement of sale is proved to be doubtful one.
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
38. Further PW1 admitted in the course of cross examination that at the time of execution of Ex.P-1 it was not to be determined where exactly the land is situated. As such when there is no definiteness of the land which is stated in Ex.P-1, then it creates doubt whether really the Ex.P-1 was executed or not.
39. This evidence above discussed fortify the case made out by the defendants that defendants have received the amount from plaintiff No.1 as hand loan, but have not executed agreement of sale Ex.P-1 as contended by the plaintiffs. When it is proved that the PW1 has advanced loan to the defendants, quite naturally whoever advances the loan amount takes some security towards loan amount and that is what is done in the present case. Upon appreciating the evidence of PW-1 and Ex.P-1, the alleged agreement of sale on all its preponderance of probabilities, it is conclusively proved that the signatures of the defendants found on Ex.P-1, the alleged agreement of sale, are towards security for the loan advanced of PW-
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR 1, but not towards the agreement of sale. Thus, in this way, the trial court has committed error in appreciating the evidence on record. Thus, the approach of trial court is perverse in nature.
40. PW2 is stated to be one of the attesting witnesses of Ex.P-1. Upon considering the admissions in cross examination of PW2, whose name and signature is found in Ex.P-1 alleged agreement of sale and upon perusing the admissions in cross examination he has studied B.Com and LLB degrees. PW2 was admitted that he was not present at the negotiation of alleged sale transaction. This admission of PW2 is fatal to PW1/plaintiff No.1 regarding execution of Ex.P-1 - agreement of sale. In agreement of sale Ex.P-1 in page No.3 the name and signature of PW2 is appearing but in the cross examination he has admitted that he was not present at the time of negotiation regarding alleged sale transaction. This admission proves the fact that Ex.P-1 agreement of sale is not executed between the plaintiffs
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR and defendants styled as 'agreement of sale'. Further admitted that he does not know who gave instructions for writing the sale agreement at Ex.P-1. Also admitted that even PW2 do not know regarding writing of agreement of sale-Ex. P-1. Therefore upon perusing the evidence of PW2 above discussed, it is proved that PW2 was not witness to the Ex.P-1 and he was not present during negotiation regarding the alleged agreement of sale and sale transaction, but his name is found as witness in the Ex.P-1. These conclusively prove the fact that execution of Ex.P-1 is styled as 'agreement of sale' was not at all executed. Whatever signatures found on third and fourth page of the non judicial stamp paper - Ex.P-1 is towards security purpose as the defendants have received loan amount from the PW1. Therefore, it is proved that Ex.P-1 styled as 'agreement of sale' is proved to be not at all executed.
41. This PW2 is not an ordinary person, he has studied B.Com and LLB degrees. Though he has
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR contended that he has not completed his law degree, but he was sitting Corporator of the locality wherein the defendants are residing and also it is revealed in the cross examination that this PW2 was also MLA candidate of Hubballi constituency in the MLA election. When this being the fact PW2 being educated person and is holding a responsible position in the Society, had stated that he was not present during the negotiation of the sale transaction and he does not know who has given instructions to write Ex.P-1. Therefore, Ex.P-1 styled as 'agreement of sale' is not proved to have been executed.
42. Further PW2 had admitted in the cross examination that as true that he has purchased 0-4 guntas of land property from the members of defendants' family and the said purchased property is situated adjacent to the suit property. Therefore this PW2 knows very well the defendants, but PW2 was not present during the execution of alleged agreement of sale - Ex.P-1. Therefore, agreement of sale is not proved.
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
43. PW3 is an Advocate whose evidence is only with regard to making paper publication as per Ex.P-8. Ex.P-6 is the paper publication issued by the plaintiffs informing to the world that there was an agreement of sale between plaintiffs and defendants. Also Ex.P-5 is the paper publication issued at the instance of defendants. These are the paper publications issued by the respective parties regarding execution of agreement of sale cautioning the public not to enter transaction with the defendants and nothing more than the purpose of agreement of sale.
44. Upon considering the entire evidence on record, as above discussed, the plaintiffs failed to prove the execution of agreement of sale - Ex.P-1. Also as discussed above, the defendants are agriculturists by profession and PW1 is an industrialist manufacturer of polythene bags. The decree passed by the trial court granting relief of specific performance of contract is nothing but arbitrary causing unfair advantage and hardship over the
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR defendants by the plaintiffs. Whereas, it is proved that the suit schedule land is the only land of the defendants for their livelihood.
45. Though learned counsel for the respondents/plaintiffs places some loose sheets of RTC extracts, but those are belonging to other family members of the defendants. Even if these RTC extracts are considered which do not prove that defendants are owners of the other agricultural lands, also just because the lands are situated in the name of other family members/relatives of the defendants that does not mean that defendants are also owners of other lands. Therefore, it is proved that the suit schedule land is the only land for defendants for their livelihood and if it is sold to the plaintiffs by the decree, then the decree would be amounting to unfair advantage, arbitrary and also hardship over the defendants by the plaintiffs. Therefore on these two reasons, firstly, execution of Ex.P-1 agreement of sale is highly doubtful and is not proved to
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR be executed; and secondly, this sale transaction is amounting to unfair advantage over the defendants by the plaintiffs, arbitrary and hardship to the defendants. Therefore, plaintiffs are not entitled for the decree of specific performance of contract. In this regard, the trial court has committed a grave error in not correctly appreciating the evidence on record. Thus, the judgment and decree is perverse in nature, unjust and illegal and the trial court has not exercised its discretion properly. The trial court has just swayed away by the fact that Ex.P-1 agreement of sale and granted decree. This finding of the trial court is absolutely not correct approach thus the judgment and decree passed by the trial court is liable to be set aside.
46. Also besides the Court has ventured into considering whether the plaintiffs prove their readiness and willingness to perform their part of contract, but there is no pleadings that how they are ready and willing to perform their part of contract is not found in the plaint and
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR also there is no deposition in the examination in chief of PW1. Just because the plaintiffs have issued paper publication in the newspaper cautioning the others not to make any transaction, that does not amounting to proof of readiness and willingness to perform their part of contract. Ex.P-1 alleged agreement is dated 06.03.2007, but the suit is filed on 16.05.2009. The suit is filed after lapse of two years whereas in the alleged Ex.P-1 - agreement of sale that time stipulation six months from the date of execution of agreement of sale. Ex.P-3 is the legal notice issued by the plaintiffs calling upon the defendants to execute sale deed dated 07.05.2009, for the first time. The plaintiffs have opened their eyes to issue legal notice calling upon the plaintiffs to execute sale deed after two years from the date of agreement of sale. But within that period what are the efforts made by the plaintiffs to prove that they were ready and willing to perform their part of contract, is not forthcoming from the evidence. In the evidence the PW1 has deposed that
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR there was a partition in the family and the property was divided by mentioning numbers and in that process the said transaction could not be completed. This is the only reason given by PW1 which does not prove that the plaintiffs were ever ready and willing to perform their part of contract.
47. In this regard, I place reliance on the judgment of Hon'ble Supreme Court in the case of U.N.KRISHNAMURTHY (SINCE DECEASED) AND OTHERS LRS. vs. A.M.KRISHNAMRTHY13, at paragraph Nos.32, 33 and 34, it is held as under:
"32. In a suit for specific performance of a contract, the Court is required to pose unto itself the following questions, namely:
32.1. Whether there is a valid agreement of sale binding on both the vendor and the vendee.
32.2. Whether the plaintiff has all along been and still is ready and willing to perform his part of the contract as envisaged under Section 16(c) of the Specific Relief Act, 1963.
33. There is a distinction between readiness and willingness to perform the contract and both ingredients are necessary for the relief of specific performance. In Acharya Swami Ganesh Dassji v. Sita 13 (2023) 11 SCC 175
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR Ram Thapar [Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526] cited by Mr Venugopal, this Court said that there was a difference between readiness and willingness to perform a contract. While readiness means the capacity of the plaintiff to perform the contract which would include his financial position, willingness relates to the conduct of the plaintiff. The same view was taken by this Court in Kalawati v. Rakesh Kumar [Kalawati v. Rakesh Kumar, (2018) 3 SCC 658 : (2018) 2 SCC (Civ) 609] .
34. Even in a first appeal, the first appellate court is duty-bound to examine whether there was continuous readiness and willingness on the part of the plaintiff to perform the contract. This proposition finds support from Balraj Taneja v. Sunil Madan [Balraj Taneja v. Sunil Madan, (1999) 8 SCC 396] and H.P. Pyarejan v. Dasappa [H.P. Pyarejan v. Dasappa, (2006) 2 SCC 496] where this Court approved the views taken by the Privy Council in Ardeshir Mama v. Flora Sassoon [Ardeshir Mama v. Flora Sassoon, 1928 SCC OnLine PC 43 :
(1927-28) 55 IA 360 at p. 372 : AIR 1928 PC 208] ."
48. In the case of P.DAIVASIGAMANI vs. S.SAMBANDAN14 at paragraph Nos.21, 22, 23, 24 and 25, it is held as under;
"21.Readiness and willingness are not one, but two separate elements. Readiness means the capacity of the plaintiff to perform the contract, which would include the financial position to pay the purchase price. Willingness refers to the intention of the plaintiff as a purchaser to perform his part of the contract. Willingness is inferred by scrutinising the conduct of the plaintiff purchaser, including attending circumstances15. Continuous readiness and willingness 14 (2022) 14 SC 793 15 See para 2 in Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR on the part of the plaintiff purchaser from the date the balance sale consideration was payable in terms of the agreement to sell, till the decision of the suit, is a condition precedent for grant of relief of specific performance16.
22. The expression "readiness and willingness"
used in Section 16 (c) of the said Act, has been interpreted in a catena of decisions by this Court, in the light of facts and circumstances of the cases under consideration for the purpose of granting or refusing to grant the relief of Specific Performance of a contract. The said expression cannot be interpreted in a straitjacket formula. In a very apt decision of this Court in Syed Dastagir vs. T.R. Gopalakrishna Setty (1999) 6 SCC 337, a three-Judge Bench of this Court, construing a plea of "readiness and willingness to perform" in view of the requirement of Section 16(c) and its explanation, observed as under: (SCC p.
341, para 9) "9. So the whole gamut of the issue raised is, how to construe a plea specially with reference to Section 16(c) and what are the obligations which the plaintiff has to comply with in reference to his plea and whether the plea of the plaintiff could not be construed to conform to the requirement of the aforesaid section, or does this section require specific words to be pleaded that he has performed or has always been ready and is willing to perform his part of the contract. In construing a plea in any pleading, courts must keep in mind that a plea is not an expression of art and science but an expression through words to place fact and law of one's case for a relief. Such 16 See para 5 in N.P.Thirugnanam v. R. Jagan Mohan Rao, (1995) 5 SCC
115. Also see Anleshir Manu v. Flora Sassoon, 1928 SCC Online PC 43:
(1927-28) 55 IA 360 : AIR 1928 PC 208
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR an expression may be pointed, precise, sometimes vague but still it could be gathered what he wants to convey through only by reading the whole pleading, depending on the person drafting a plea. In India most of the pleas are drafted by counsel hence the aforesaid difference of pleas which inevitably differ from one to the other. Thus, to gather true spirit behind a plea it should be read as a whole. This does not distract one from performing his obligations as required under a statute. But to test whether he has performed his obligations, one has to see the pith and substance of a plea. Where a statute requires any fact to be pleaded then that has to be pleaded may be in any form. The same plea may be stated by different persons through different words; then how could it be constricted to be only in any particular nomenclature or word. Unless a statute specifically requires a plea to be in any particular form, it can be in any form. No specific phraseology or language is required to take such a plea. The language in Section 16(c) does not require any specific phraseology but only that the plaintiff must aver that he has performed or has always been and is willing to perform his part of the contract. So the compliance of "readiness and willingness" has to be in spirit and substance and not in letter and form. So to insist for a mechanical production of the exact words of a statute is to insist for the form rather than the essence. So the absence of form cannot dissolve an essence if already pleaded".
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
23. It was further observed therein that: (Syed Dastagir case17, SCC p.342, para11) "11........It is significant that this explanation carves out a contract which involves payment of money as a separate class from Section 16(c). Explanation (i) uses the words "it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court". (emphasis supplied) This speaks in a negative term what is not essential for the plaintiff to do.
This is more in support of the plaintiff that he need not tender to the defendant or deposit in court any money but the plaintiff must [as per Explanation (ii)] at least aver his performance or readiness and willingness to perform his part of the contract".
(emphasis in original)
24. In Sukhbir Singh v. Brij Pal Singh18 this Court had laid down that law is not in doubt and it is not a condition that the respondents (Plaintiffs) should have ready cash with them. It is sufficient for the respondents to establish that they had the capacity to pay the sale consideration. It is not necessary that they should always carry the money with them from the date of the suit till the date of the decree. The said principle was followed in A. Kanthamani v. Nasreen Ahmed19, in case of C.S. Venkatesh v. A.S.C. Murthy20 etc. 17 Syed Dastagir v. T.R. Gopalakrishna setty, (1999) 6 SCC 337 18 (1997) 2 SCC 200 19 (2017) 4 SCC 654 : (2017) 2 SCC (Civ) 596 20 (2020) 3 SCC 280 : (2020) 2 SCC (Civ) 90
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
25. Section 20 of the Specific Relief Act (Pre- amendment), which confers discretion on the court to exercise jurisdiction to decree of specific performance, states that this exercise should not be arbitrary, but guided by sound and reasonable judicial principles. Interpreting and elucidating on Section 20 of the Specific Relief Act (pre-amendment) and factors to be considered, this Court in Kamal Kumar v. Premlata Joshi21 has also referred to Sections 16(c), 22, 23 and 24 of the Specific Relief Act and Forms 47/48 of Appendix A to C of the Code of Civil Procedure, 1908, to summarise: (SCC pp.705-706, paras 7-8) "7. It is a settled principle of law that the grant of relief of specific performance is a discretionary and equitable relief. The material questions, which are required to be gone into for grant of the relief of specific performance are:
7.1 First, whether there exists a valid and concluded contract between the parties for sale/purchase of the suit property;
7.2 Second, whether the plaintiff has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract.
7.3 Third, whether the plaintiff has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed and whether such performance was in conformity with the terms of the contract.
7.4 Fourth, whether it will be equitable to grant the relief of specific performance to the plaintiff against the defendant in relation to suit 21 (2019) 3 SCC 704 : (2019) 2 SCC (Civ) 405
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR property or it will cause any kind of hardship to the defendant and, if so, how and in what manner and the extent if such relief is eventually granted to the plaintiff.
7.5 Lastly, whether the plaintiff is entitled for grant of any other alternative relief, namely, refund of earnest money etc. and, if so, on what grounds.
8. In our opinion, the aforementioned questions are part of the statutory requirements [See Sections 16 (c), 20, 21, 22, 23 of the Specific Relief Act, 1963 and Forms 47/48 of Appendix A to C of the Code of Civil Procedure]. These requirements have to be properly pleaded by the parties in their respective pleadings and proved with the aid of evidence in accordance with law. It is only then the Court is entitled to exercise its discretion and accordingly grant or refuse the relief of specific performance depending upon the case made out by the parties on facts."
49. The Hon'ble Supreme Court in the case of J.P.BUILDERS AND ANOTHER VS. A.RAMDAS RAO AND ANOTHER22, at paragraph Nos.20, 21, 23, 24, 25, 26 and 27, it is held as under:
22
(2011) 1 SCC 429
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR Readiness and willingness "20. Section 16(c) of the Specific Relief Act, 1963 provides for personal bars to relief. This provision states that:
"16.Personal bars to relief:--- Specific performance of a contract cannot be enforced in favour of a person ---
a) who would not be entitled to recover compensation for its breach; or
b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
Explanation.- For the purposes of clause
(c),-
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction."
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
21. Among the three clauses, we are more concerned about clause (c). "Readiness and willingness" is enshrined in clause (c) which was not present in the old Act of 1877. However, it was later inserted with the recommendations of the 9th Law Commission's report. This clause provides that the person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terms of the contract which are to be performed by him.
23. In N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao23., at SCC para 5, this Court held:
(SCC pp. 117-18) "5......Section 16(c) of the Act envisages that the plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances.23
(1995) 5 SCC 115
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract."
24. In P.D'Souza vs. Shondrilo Naidu24, this Court observed: (SCC p. 654, paras 19 and 21) "19. It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstances of each case. No straitjacket formula can be laid down in this behalf....
21......The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale."
25. Section 16(c) of the Specific Relief Act, 1963 mandates "readiness and willingness" on the part of the plaintiff and it is a condition precedent for 24 (2004) 6 SCC 649
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous "readiness and willingness" to perform the contract on his part from the date of the contract. The onus is on the plaintiff.
26. It has been rightly considered by this Court in R.C. Chandiok. vs. Chuni Lal Sabharwal25., that "readiness and willingness" cannot be treated as a straightjacket formula. This has to be determined from the entirety of the facts and circumstances relevant to the intention and conduct of the party concerned.
27. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is non- compliance with this statutory mandate, the Court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time.
"Readiness and willingness" to perform the part of the contract has to be determined/ascertained from the conduct of the parties."
50. Further rely on the judgment of Hon'ble Supreme Court in the case of ZARINA SIDDIQUI vs. A. RAMALINGAM ALIAS R.AMARNATHAN26 at paragraph Nos.30, 33, it is held as under:
25
(1970) 3 SCC 140 26 (2015) 1 SCC 705
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR "30. In a recent judgment dated 22.9.2014 in Civil Appeal No.9047 of 2014 entitled K. Prakash vs. B.R. 27 Sampath Kumar , this Court observed that: (SCC p.605 and paras 16 & 18-19) "16. The principles which can be enunciated are that where the plaintiff brings a suit for specific performance of contract for sale, the law insists a condition precedent to the grant of decree for specific performance: that the plaintiff must show his continued readiness and willingness to perform his part of the contract in accordance with its terms from the date of contract to the date of hearing. Normally, when the trial court exercises its discretion in one way or other after appreciation of entire evidence and materials on record, the appellate court should not interfere unless it is established that the discretion has been exercised perversely, arbitrarily or against judicial principles. The appellate court should also not exercise its discretion against the grant of specific performance on extraneous considerations or sympathetic considerations. It is true, as contemplated under Section 20 of the Specific Relief Act, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree are established then the Court has to exercise its discretion in favour of granting relief for specific performance.
18. Subsequent rise in price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, therefore, on that ground a decree for specific performance cannot be reversed.
27 (2015) 1 SCC 597
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR
19. However, the court may take notice of the fact that there has been an increase in the price of the property and considering the other facts and circumstances of the case, this Court while granting decree for specific performance can impose such condition which may to some extent compensate the defendant owner of the property. This aspect of the matter is considered by a three-Judge Bench of this Court in Nirmala Anand vs. Advent Corporation (P) Ltd...28
33. The equitable discretion to grant or not to grant a relief for specific performance also depends upon the conduct of the parties. The necessary ingredient has to be proved and established by the plaintiff so that discretion would be exercised judiciously in favour of the plaintiff. At the same time, if the defendant does not come with clean hands and suppresses material facts and evidence and misled the Court then such discretion should not be exercised by refusing to grant specific performance."
51. Further I place reliance on the judgment of Hon'ble Supreme Court in the case of R.SHAMA NAIK vs. G.SRINIVASAIAH29 at paragraph Nos.8, 9, 10 and 11, it is held as under:
"8. Section 16(C) of the Specific Relief Act, 1963 (prior to amendment w.e.f. 1.10.2018) bars the relief of the specific performance of a contract in favour of a person who fails to aver readiness and willingness to perform his part of the contract.
9. There is a legion of precedents on the subject of readiness and willingness.
10. The law is well settled. The plaintiff is obliged not only to make specific statement and averments in the plaint but is also obliged to adduce necessary oral 28 (2002) 8 SCC 146 29 2024 SCC ONLINE 3586
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR and documentary evidence to show the availability of funds to make payment in terms of the contract in time.
11. There is a fine distinction between readiness and willingness to perform the contract. Both the ingredients are necessary for the relief of specific performance."
52. As per the principle of law laid down above stated, it is the burden on the plaintiffs to prove that they were ever ready and willing to perform their part of contract, but the plaintiffs have not produced any evidence that how they were willing and ready to perform their part of contract. Whether plaintiff Nos.1 and 2 had sufficient amount in their account so as to purchase the property, is not found in the evidence. As per Section 16(c) of the Act, it is the burden on the plaintiffs to prove that they were ever ready and willing to perform their part of contract, but in this regard there is no proper pleading and no evidence. Hence, on this reason also the plaintiffs are not entitled for decree of specific performance of contract.
53. Further the alleged agreement of sale is dated 06.03.2007 and the total sale consideration is
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR Rs.11,75,000/-. As per plaintiffs an amount of Rs.3,75,000/- is paid to the defendants and remaining balance sale consideration is only Rs.8,00,000/-. After lapse of all these years, if decree is granted to execute the sale deed by receiving remaining amount of Rs.8,00,000/- only, then it is amounting a highly unfair advantage over the defendants by the plaintiffs and arbitrary at its peak. Therefore, the decree for specific performance cannot be granted in favour of plaintiffs.
54. At this stage, learned counsel for the respondents/plaintiffs by placing reliance on the judgment of Hon'ble Supreme Court in P.DAIVASIGAMANI's case (supra) submitted that plaintiffs are ready to give some more money to the tune of Rs.50,00,000/- (Rs. Fifty Lakhs) to the defendants and requested to direct the defendants to execute registered sale deed. Even this prayer could not be honoured for the reason that it is proved that the suit schedule land is the only land for the defendants for their livelihood. If this land is sold to the
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR plaintiffs then virtually the defendants would be put into starvation as it is their only land for cultivation for their livelihood. Moreover, considering above reasons, the execution of agreement of sale is found to be highly doubtful. Therefore, upon making comparison of hardship between plaintiffs and defendants, the plaintiffs' interest could be protected by making an order of refund of amount whatever the defendants received as loan amount with interest. Under these circumstances, the defendants could retain their land for their livelihood and the plaintiffs are entitled for refund of their amount with interest. According to this Court, this is the perfect balancing of rights between plaintiffs and defendants. The facts and circumstances in the present case and in the P.DAIVASIGAMANI's case (supra) are different. Therefore, the respondents/plaintiffs are not entitled to take benefit of this decision. Accordingly, I answer point Nos.(i) to (iii) in the Negative; point No.(iv) that the plaintiffs are not entitled for decree for specific
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR performance of contract but are entitled refund of amount and point No.(v) in the Affirmative.
55. Therefore, for the reasons discussed above, the trial court has committed a grave error in decreeing the suit for specific performance, as it is found to be perverse, not legal and unjustified and as such, it is liable to be interfered with. Accordingly, judgment and decree passed by the trial court is liable to be set aside.
56. Hence, I proceed to pass the following:
ORDER
(i) The appeal is allowed.
(ii) The judgment and decree judgment
dated 31.07.2012 passed in
O.S.No.90/2009 by the Court of First Addl. Senior Civil Judge, Hubli, is hereby set aside.
(iii) Consequently, suit filed by the plaintiffs is allowed in part to the extent that plaintiffs are entitled for refund of amount of Rs.3,75,000/- from the
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NC: 2025:KHC-D:7654 RFA No. 4137 of 2012 HC-KAR defendants with interest at the rate of 18% p.a. from the date of 06.03.2007 till the amount is realised.
(iv) The relief claimed for decree of specific performance of contract is rejected.
(v) The appellants/defendants are hereby
directed to deposit the amount of
Rs.3,75,000/- with interest at 18% p.a. as above ordered before the trial Court within a period of three months from the date of receipt of copy of this order.
(vi) No order as to costs.
Sd/-
(HANCHATE SANJEEVKUMAR)
JUDGE
DR
List No.: 1 Sl No.: 1