Karnataka High Court
Sheetal S/O Veerendra Kumar Runwal vs Shaha Hussain S/O Mahaboob Khadri ... on 20 April, 2023
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IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 20TH DAY OF APRIL, 2023
BEFORE
THE HON'BLE MR.JUSTICE C.M.POONACHA
RFA No.200057 OF 2014
BETWEEN
SHETAL
S/O VEERENDRA KUMAR RUNWAL
AGED ABOUT 35 YEARS
OCC:AGRICULTURE & BUSINESS
R/O MAHAVEER ROAD
NEAR GTC BANK , BIJAPUR
...APPELLANT
(BY SRI VINAYAK APTE, ADVOCATE)
AND
1. SHAHAHUSAIN
S/O MAHABOOB KHADRI JAHAGIRDARAND
AGED ABOUT 39 YEARS
OCC:AGRICULTURE
R/O BEHIND GODAVARI HOTEL
ZANNAT HALL,
SHASHTRI NAGAR BIJAPUR
2. KUTUBUDDIN
S/O MAHABOOB KHADRI JAHAGIRDAR
AGED ABOUT 35 YEARS
OCC:AGRICULTURE
R/O BEHIND GODAVARI HOTEL
ZANNAT HALL,SHASHTRI NAGAR
BIJAPUR
...RESPONDENTS
(BY SRI S S SAJJAN SHETTY, ADVOCATE FOR
CAVEATOR R1 & R2)
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THIS RFA IS FILED U/S 96 OF CPC, AGAINST THE
JUDGEMENT AND DECREE DATED 20.08.2014 PASSED IN O.S.
NO. 201/2011 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL
JUDGE AT BIJAPUR WHEREIN, THE SUIT WAS PARTLY DECREED
THE SUIT AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
31.02.2023, COMING ON FOR 'PRONOUNCEMENT OF
JUDGMENT' THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
The above first appeal is filed under Section 96 of Code of Civil Procedure, 1908 (for short 'CPC') by the Plaintiff challenging the Judgment and Decree dated 20.08.2014 passed in O.S. No.201/2011 by the Prl. Senior Civil Judge, Bijapur insofar as the rejection of the prayer of the Plaintiff for grant of specific performance and to decree the suit of the Plaintiff for grant of specific performance.
2. For the sake of convenience, the parties herein are referred to by their rank before the Trial Court.
3. It is the case of the Plaintiff that Defendants are the joint owners and possessors of the land bearing No.383 measuring 24 acres 22 guntas of Toravi Village, Taluk Bijapur (hereinafter referred to as the 'suit property') 3 and in order to meet their family necessities to repay the loan raised by them, they sought to sell a suit land. The Plaintiff being desirous of purchasing the land, offered to purchase the suit land for a total sale consideration of `11,50,000/- and the Defendants have accepted the said offer and the Plaintiff paid earnest money of `50,000/- to the Defendants on 18.12.2010 and an Agreement of Sale was executed which was also registered in the office of the Sub Registrar on the same day. The Plaintiff was required to pay the balance sale consideration of `11,00,000/- to the Defendants within six months from the date of the Agreement. In the meantime, Defendants were required to repay the loan availed by them from P.L.D. Bank and to remove the encumbrance on suit land and get the 11 E map prepared in respect of the suit property to enabling the sale deed to be registered.
3.1 It is the case of the Plaintiff that after the execution of the Agreement of Sale, on many occasions the Plaintiff tendered the balance sale consideration of `11,00,000/- and requested the Defendants to receive the 4 same and execute the registered Sale Deed. However, the Defendants have not received the balance amount. When the Plaintiff came to know that Defendants are trying to alienate the suit property, they once again approached the Defendants and tendered balance amount of `11,00,000/- requested them to receive the same. When they refused to execute registered Sale Deed, the Plaintiff got issued a legal notice dated 03.06.2011 which was duly replied by the Defendants. It is the further case of the Plaintiff that he was ready and willing to perform his part of the contract and pay the balance sale consideration. However, the Defendants have refused to execute the Sale Deed. Hence, suit is filed seeking for decree of specific performance of the contract dated 18.12.2010 and in the alternative to grant for refund of fee of earnest money of `50,000/- together with interest @ 18% per annum.
4. The Defendants entered appearance and contested the suit of the plaintiff by filing the Written Statement. The Defendants have denied the plaint averments and have disputed the Agreement of Sale dated 5 18.12.2010. It is further contended by the Defendants that they were never in need of money for family necessity. On the other hand, they were in search of agricultural land to purchase and that the Plaintiff approached the Defendants and introduced the owner of the land at Dhanaragi Village bearing Sy.No.13/1 measuring 7 acres 05 guntas and Sy.No.13/2 measuring 08 acres 03 guntas (hereinafter referred to as the 'said property'). That the Defendants offered to purchase the said land for a total sale consideration of `6,39,000/- and that the Plaintiff was a mediator for the said transactions. That at the time of execution of the Sale Deed of the said property i.e., on 18.12.2010, the Defendants were in shortage of money of `50,000/- to pay the entire consideration of `6,39,000/- and hence, it was agreed upon by the Defendants, Plaintiff and the owner of the said property i.e., Shri. Vikruddin Surkhi that the Defendants have to execute the Agreement of Sale in the suit property for security purpose of `50,000/- which is payable to Shri.Vikaruddin Surkhi. Under the said circumstances, the Agreement of Sale 6 dated 18.12.2010 was entered into. That on the same day the Defendants have agreed to pay the said `50,000/- within six months of executing the Sale Agreement and the Plaintiff has to cancel Sale Agreement pertaining to the suit property.
4.1 It is the further case of the Defendants that value of the suit property is about `10 lakhs per acre in the open market and hence, the Defendants have never executed any Agreement of Sale of the suit land for a meager a sum of `11,50,000/-. That by taking undue advantage of the said Agreement, the Plaintiff has filed the present suit. That the Defendants were ready and willing to pay the said sum of `50,000/- to the Plaintiff.
5. The Trial Court upon the pleadings of the parties, framed the following five issues for its consideration:
1. Whether plaintiff proves that the defendants have agreed to sell the suit land for consideration of `11,50,000/-
and have executed deed of agreement of 7 sale on 18.12.2010 in the presence of witnesses by receiving earnest money of `50,000/- from him as alleged?
2. Whether plaintiff proves that the defendants have refused to execute sale deed by receiving balance amount?
3. Whether plaintiff further proves that he is ready and willing to perform his part of contract?
4. Whether defendants prove that they have executed an agreement of sale of their land only as a security for `50,000/- in favour of plaintiff as contended in their written statement?
5. Whether plaintiff is entitled for the reliefs sought for?
6. What order or decree?
6. The Plaintiff examined himself as PW.1 and a witness examined as PW.2. Exs.P1 to P8 were marked in evidence. Defendant No.1 examined himself as DW.1 and a witness examined as DW.2. Exs D1 to D4 were marked in evidence. The Trial Court upon appreciation of the oral 8 and documentary evidence on record, partly decreed the suit of the Plaintiff by directing the Defendants to refund the earnest money of `50,000/- with interest 8% from 18.12.2010 till date of repayment. Being aggrieved, the present Appeal is filed.
7. Shri. Vinayak Apte, learned counsel for the Appellant-Plaintiff contended that;
a) The case putforth by the Defendants regarding the circumstances under which the Agreement dated 18.12.2010 was executed is contrary to the material on record and the finding of the Trial Court in that regard is erroneous and liable to be set aside.
b) That the Agreement of Sale entered into between the Plaintiff and the Defendants being a registered one and the Plaintiff having always been ready and willing to pay the balance sale consideration and complete his part of transaction, the Trial Court ought to have ordered for specific performance of the Agreement dated 18.12.2010.
97.1 Making the above submissions, learned counsel for the appellant seeks for allowing of the above Appeal and decreeing the suit filed by the Plaintiff for specific performance. In support of his contentions, he relied on the following judgments:
i) Mehaboob Vs. Noor Ahmed and Ors.1
ii) Aniglase Yohannan Vs. Ramlatha and Ors.2
iii) S. Saktivel (dead) by L.Rs., M. Venugopal Pillai and Others3
iv) Smt. Noorjahan and another Vs. Abdul Ravoof4
8. Per contra, Shri. S.S. Sajjanshetty, learned counsel appearing for the Respondents justifies the Judgment and Decree passed by the Trial Court and further submits that;
i) No material is produced by the Plaintiff to demonstrate that he was ready and willing to pay the balance sale 1 RSA No.6106/2011 dtd: 03.01.2019, High Court of Karnataka (Dharwad Bench) 2 Civil Appeal No.6260/2004 dtd: 23.09.2005, Hon'ble Supreme Court of India. 3 AIR 2000 SC 2633 4 RFA No.200013/2016 dtd: 16.10.2020, High Court of Karnataka (Kalaburagi Bench) 10 consideration as contemplated under Section 16(c) of the Specific Relief Act.
ii) The Plaintiff has not deposited the balance sale consideration either before the Trial Court or before this Court.
8.1 Hence, he seeks for dismissal of the above Appeal. In support of his submission, he relied on the following judgments:
i)K.Karuppuraj Vs. M. Ganesan5
ii)U.N.Krishnamurthy (since deceased) Thr. Lrs Vs. A.M.Krishnamurthy6
9. I have considered the submissions made by the learned counsel for the parties and perused the material available on record. The questions that arise for consideration are:
i) Whether the Plaintiff proves that the Defendants have executed the Agreement dated 18.12.2010 to sell the suit property?5
Civil Appeal Nos.6014-6015/2021 dtd: 04.10.2021, Supreme Court of India. 6 Civil Appeal No.4703/2022 dtd: 12.07.2022 , Supreme Court of India. 11
ii) Whether the Plaintiff proves that he was ready and willing to pay the balance sale consideration and complete the transaction?
iii) Whether the decree for specific performance is liable to be granted in favour of the Plaintiff?
iv) What order?
Reg. Question No.(i):
10. Admittedly, the parties have entered into an Agreement at Ex.P1-registered Agreement dated 18.12.2010, whereunder the Defendants agreed to sell the suit property in favour of the Plaintiff for a sum of Rs.11,50,000/- and the Plaintiff paid a sum of Rs.50,000/- as earnest money, the receipt of which is acknowledged by the Defendants. The sale transaction was stipulated to be completed in six months and the Defendants were required to pay off the loan raised by them from P.L.D. Bank and remove the encumbrance on suit land and get prepared the 11E map in respect of the suit property to enable parties to execute the sale deed. 12
11. It is the contention of the Defendants that the said agreement of sale-Ex.P1 was entered into by the Defendants since they required a sum of Rs.50,000/- to complete the purchase transaction of two other properties i.e., R.S. No.13/1 and 13/2 of Dhanaragi Village and the said agreement-Ex.P1 was executed as a security for a sum of Rs.50,000/- which was payable to the vendor of the said properties namely one Vikaruddin Surkhi. The Sale Deeds dated 16.12.2010 in respect of the said properties bearing Sy.Nos.31/1 and 31/2 which have been purchased by the Defendants are marked as Exs.D2 and D3. It is the further case of the Defendant that consequent to Ex.P1-Agreement, vide the Agreement Ex.D1, the transaction as contemplated under Ex.P1 was cancelled.
12. Ex.D1 is executed on 21.12.2010, wherein it is stated that the Plaintiffs shall cancel Ex.P1- Agreement after payment of Rs.50,000/- by the Defendants. The Stamp Paper of Ex.D1 is dated 18.12.2010, which is the same date as Ex.P1. In this context, it is relevant to note that in the legal notice dated 03.06.2011 - Ex.P3 issued on 13 behalf of the Plaintiffs, the defendants have been called upon, apart from coming forward to receive the balance sale consideration and complete the sale consideration as contemplated Ex.P1, to return the blank stamp paper in which the Plaintiff and his father affixed their signature apprehending that the Defendants will create false documents.
13. The Defendants have specifically pleaded that they were purchasing the property under Exs.D2 and D3 from one Sri Vikaruddin Surkhi since he was in financial difficulties to meet his family necessities and they needed a sum of Rs.50,000/- to pay the sale consideration to Shri.Vikaruddin Surkhi. The Agreement - Ex.P1 is a registered document and contents of the same are required to be construed as the transaction between the parties. The Defendants have not denied the execution of Ex.P1 and have pleaded a case contrary to the terms of Ex.P1 and hence, they are required to prove the case putforth by them.
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14. The Defendants have pleaded that the Plaintiff was a Mediator for the transaction entered into by the Defendants with Shri. Vikaruddin Surkhi for purchase of property vide the registered Sale Deeds - Exs.D2 and D3 both dated 18.12.2010. That on the said date i.e., 18.12.2010, since the Defendants were in shortage of money of `50,000/- to pay the entire sale consideration of Exs.D2 and D3, it was agreed upon Defendants, Plaintiff and the said Shri. Vikruddin Surkhi that the Defendants have to execute an Agreement as per Ex.P1 for security of `50,000/- which is payable to Shri. Vikruddin Surkhi and hence, the said Agreement Ex.P1 was executed. However, at para No.14 of the Written Statement, it is pleaded that on the same day, the Plaintiff and Defendants came to an agreement that Defendants have to pay `50,000/- within six months and Plaintiff agreed to cancel the Agreement Ex.P1 and the document to that effect was executed vide Ex.D1 on 22.12.2010. It is clear that there is a contradiction in the case of the Defendants as pleaded in para Nos.12 and 13 of the Written Statement. It is to be 15 noted that the name of Shri. Vikruddin Surkhi is neither found in Ex.D1 nor has he been examined as a witness by the Defendants to prove their case.
15. The Plaintiff apart from examining himself as PW.1 has examined the scribe of Exs.P1, D2 and D3 as PW.2. The Defendant No.1 was examined as DW.1 and a witness to Ex.D1 was examined as DW.2. It is forthcoming from the examination in chief of DW.2 that he has deposed that he has signed the Agreement dated 21.12.2010 to cancel the Agreement of Sale after payment of `50,000/- and that two other witnesses viz., Shri. Veerendra Runwal and Shri. B.S.Korishetti were present along with him. In the cross examination of DW.2, initially he states that he was present at the time of sale Agreement on 18.12.2010. However, subsequently, he states he was not present at the time of Sale Agreement dated 18.12.2010. With regard to the sequence in which the signatories have affixed their signatures on Ex.D1, there are contradictions in the testimony of DW.2. The Defendants have not examined Shri. Vikruddin Surkhi the vendor of the Sale 16 Deeds Exs.D2 and D3 to prove circumstances as pleaded by them in the Written Statement. Under the circumstances, mere examination of DW.2 will not discharge the burden on the Defendants to prove the case putforth by them in the Written Statement.
16. The Trial Court, while recording a finding on issue No.1 as partly in affirmative. The said finding of the Trial Court is erroneous and liable to be interfered with in view of the fact that Ex.P1-Agreement is a registered one and the Defendants having pleaded a case contrary to Ex.P1 and having relied on Ex.D1 in support of their case, have failed in proving the circumstances as pleaded by them resulting in the execution of Ex.D1.
17. In the case of Mehaboob1 relied upon by the Appellant, a Coordinate Bench of this Court was considering a case where the parties had entered into an Agreement of Sale and it was contended that the said Agreement was executed as a security. This Court held that in the absence of specific wordings in the Sale 17 Agreement that the same is as a measure of security such an interference cannot be drawn.
18. In the case of Saktivel3, relied upon by the appellant, the Hon'ble Supreme Court was considering the scope of Section 92(4) of the Evidence Act and held as follows:
8......... A document becomes effective by reason of the fact that it is in writing. Once under law a document is required to be in writing parties to such a document cannot be permitted to let in parol evidence to substantiate any subsequent arrangement which has effect of modifying earlier written document. If such parol evidence is permitted it would divest the rights of other parties to the written document. We are, therefore, of the view that the subsequent oral arrangement set up by the defendant-appellant cannot be proved by the parol evidence. Such a evidence is not admissible in evidence.
19. Having regard to the aforementioned, Question No.1 framed for consideration is answered in the Affirmative.
18Reg. Question Nos.(ii) and (iii):
20. It is the categorical case of the Plaintiff that he was always been ready and willing to complete the sale transaction and he has made a plea in that regard as well as stated regarding the same, in his affidavit evidence. The Defendants contend that the Plaintiff has not proved that he is ready and willing to complete the sale transaction. It is necessary to note that the Defendants have not averred in the Written Statement denying the fact that the Plaintiff was not ready and willing to perform the transaction.
21 Learned counsel for the Appellant-Plaintiff has vehemently contended that having regard to the explanation to Section 16(c) of the Specific Relief Act, it is not necessary for the Plaintiff to actually tender or deposit in Court any money except when so directed by the Court.
22. In the case of Aniglase Yohannan2 relied upon by the Appellant, the Hon'ble Supreme Court considering readiness and willingness as contemplated under Section 16 of the Act has held as follows:
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11. ...... The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. The provision imposes a personal bar. The Court is to grant relief on the basis of the conduct of the person seeking relief. If the pleadings manifest that the conduct of the plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief.
23. In the case of U.N. Krishnamurthy6 relied upon by the respondents, the Hon'ble Supreme Court considering readiness and willingness in a suit for specific performance has held as follows:
21. It is well settled that, in a suit for Specific Performance of an agreement, it is for the Plaintiff to prove his readiness and willingness to perform his obligations under the agreement.
Where a certain amount has been paid in advance and the balance is required to be paid within a stipulated time, it is for the Plaintiff to show that he was in a position to pay the balance money. The Plaintiff has to prove that he has the money or has alternatively made necessary arrangements to get the money. In this case, the Original 20 Defendant/Appellants have all along contended that the Plaintiff Respondent neither offered to pay nor was in a position to pay the balance consideration of Rs.15,00,000/-
24. Section 16 (c) of the Specific Relief Act, 1963 bars the relief of specific performance of a contract in favour of a person, who fails to aver and prove his readiness and willingness to perform his part of contract. In view of Explanation (i) to clause (c) of Section 16, it may not be essential for the plaintiff to actually tender money to the defendant or to deposit money in Court, except when so directed by the Court, to prove readiness and willingness to perform the essential terms of a contract, which involves payment of money. However, explanation (ii) says the plaintiff must aver performance or readiness and willingness to perform the contract according to its true construction.
(emphasis supplied)
24. Having regard to the settled proposition of law as noticed above, the Plaintiff was required to demonstrate that he had the necessary funds at his disposal or had the capacity to raise the balance sale consideration to pay the same to the defendants. Notwithstanding that the 21 Defendants have not denied regarding the readiness and willingness of the Plaintiff or his financial capacity, it is forthcoming that the Plaintiff apart from averring in his plaint as well as in the examination in chief that he was ready and willing to pay the balance sale consideration, no documentary material is placed on record to demonstrate that he had the necessary funds or he was capable of paying the balance sale consideration to demonstrate his readiness and willingness to complete the sale transaction. Although in the synopsis filed by the Appellant in this Appeal, it is stated that 'Fixed Deposit receipts' produced by him depicts that he is financially capable of paying the balance consideration, it is forthcoming from a perusal of Exhibits marked on behalf of the Plaintiff that no such 'Fixed Deposit receipts' have been produced before the Trial Court.
25. Having regard to the fact that the Plaintiff has not produced any documentary material to demonstrate that he either had the necessary funds at his disposal to pay the balance sale consideration or that he had the 22 capacity to raise the balance sale consideration payable, the Appellant/Plaintiff has failed in demonstrating his readiness and willingness to complete the sale transaction.
26. The Defendants have contended that the value of the suit property is Rs.10 lakhs per acre and they would never have executed any agreement to sell the land of 24 acres 20 guntas for a meager amount of Rs.11,50,000/- as contemplated under Ex.P1. In response to the said contention, the Plaintiff contended that the Defendants have purchased said the property bearing Sy.Nos.13/1 and 13/2 vide Exs.D2 and D3 for a sale consideration of Rs.4,85,000/- and `1,54,000/- respectively. Hence, the said property totally measuring 15 acres 8 guntas and the Defendants have paid a total sale consideration of Rs.6,39,000/- (Rs,4,85,000/- + 1,54,000) which was equivalent to the rate at which the property sold under Ex.P1.
27. It is a settled proposition of law that the relief of specific performance ought not to be granted merely because it is lawful to do so. The said relief is a 23 discretionary one, which discretion is to be exercised after taking into consideration all the necessary facts and circumstances of the case as well as the conduct of the parties on sound principles and is required to be guided by justice, equity, good conscience and fairness to both parties [see: Kanshi Ram v. Om Prakash Jawal7 and Laxman Tatyaba Kankate v. Taramathi Harishchandra Dhatrak 8].
28. Having regard to the fact that the Plaintiff has failed in producing any documentary evidence on record to prove his readiness and willingness and in view of the fact that the advance sale consideration paid is only a minor portion of the total sale consideration agreed to between the parties, the Plaintiff is not entitled for specific performance the Agreement of Sale dated 18.12.2010. In view of the aforementioned, question Nos.2 and 3 framed for consideration are answered in the Negative against the Plaintiff.
7 AIR 1996 SC 2150 8 (2010) 7 SCC 717 24 Reg: Question No.(iv):
29. The Trial Court while ordering for refund of earnest money of `50,000/- has directed the Defendants to refund the same with interest @ 8% per annum from 18.12.2010 till date of repayment. The said amount was permitted to be deposited pursuant to order dated 26.10.2021 passed in the present Appeal.
30. It is necessary to note that the advance amount of `50,000/- has been admittedly received by the Defendants on 18.12.2010. Having regard to the nature of transaction between the parties and having regard to the proviso contained in Section 34 of CPC, it is just and proper that Defendants be directed to refund the said sum of `50,000/- together with interest @ 15% per annum from 18.12.2010 till date of repayment. The Respondents/Defendants are entitled for deduction of the amount deposited by them. It is open for the Appellant/Plaintiff to seek for release of the amount 25 deposited by the Respondents/Defendants and if such application is made, the amount deposited by the Respondents/Defendants, shall be released in favour of the Appellant/Plaintiff.
31. All other judgments relied upon by the parties are not being referred as the same being unnecessary for the purpose of deciding the questions arising for consideration in the present Appeal.
32. In view of the aforementioned, I pass the following:
ORDER
i) The above Appeal is partly allowed.
ii) The Judgment and Decree dated 20.8.2014 passed by the Principal Senior Civil Judge, Bijapur, O.S. No.201/2011 is modified to the extent of directing the Defendants to refund the earnest money of `50,000/- with interest of @ 15% per annum from 18.12.2010 till the date of payment.26
iii) In all other respects, the Judgment and Decree of the Trial Court remain unaltered.
iv) The Respondents shall also be liable to pay the cost of this Appeal to the Appellant.
SD/-
JUDGE BS