Sri. K. Gajendran S/O. Venkatapathy ... vs Sri. Chikkathimma S/O. Late Thimma And ... on 27 September, 2007

[Cites 5, Cited by 4]

Karnataka High Court

Sri. K. Gajendran S/O. Venkatapathy ... vs Sri. Chikkathimma S/O. Late Thimma And ... on 27 September, 2007

Equivalent citations: ILR2007KAR4440, 2008(3)KARLJ324

1. This appeal is directed against the judgment and decree dated 10.03.2005 in O.S. No. 5100/1998 passed by the 11th Additional City Civil Judge, Bangalore city, partly decreeing the suit of plaintiff for refund of advance money and rejecting the relief of specific performance of agreement of sale.

2. Appellant is the plaintiff and respondents are the defendants before the trial Court. In this judgment the parties are referred to by their status before the trial Court.

3. Defendants are owners of 16 guntas of land in survey No. 5/1 of Singasandra village, Begur hobli, Bangalore south taluk, hereinafter referred to as the schedule property. Defendants entered into an agreement of sale with the plaintiff on 29.06.1995 agreeing to sell the schedule property at the rate of Rs. 120/- per square feet subject to the availability of actual measurement of the schedule property. Under the agreement of sale plaintiff has paid an advance amount of Rs. 3,00 lakhs to the defendants. Despite repeated requests, demands and notices, the defendants refused to execute a registered sale deed in favour of the plaintiff by accepting the balance of sale consideration. The plaintiff having no other alternative filed a suit in O.S. No. 5100/1998 against the defendants for a decree of specific performance of agreement of sale.

4. The defendants entered appearance before the trial Court, filed written statement inter alia contending that they have received Rs. 1.00 lakh as advance and not Rs. 3.00 lakhs as contended by the plaintiff. The plaintiff failed to perform his part of obligation under the agreement of sale by paying the balance of sale consideration. It is on account of plaintiff's failure to perform his part of obligation, the defendants have not executed the registered sale deed. The defendants opposed the claim of plaintiff. On the basis of pleadings, the trial Court framed the following seven issues for its consideration.

I. Whether the plaintiff proves that he has paid in all Rs. 3,00,000/- to the defendants towards sale consideration?

II. Whether the plaintiff proves that he has been always ready and willing to perform his part of contract?

III. Whether the plaintiff proves that he is entitled for the specific performance of the agreement of sale?

IV. Whether the plaintiff proves that he is entitled for the possession of the suit property?

V. Whether the defendants prove that the suit is time barred?

VI. Whether the defendants prove that the time was essence of the contract?

VII. What decree or order?

5. The plaintiff examined three witnesses as P.W.1 to P.W.3 and got marked Ex.P.1 to Ex.P.15, whereas the defendants examined one witness as Page 1884 D.W.1 and got marked Ex.D.1. The trial Court after hearing both the parties and on appreciation of the pleadings, oral and documentary evidence on record, held that under the agreement of sale plaintiff has paid an advance amount of Rs. 3.00 lakhs to the defendants. That plaintiff was not ready and willing to perform his part of the contract under the agreement of sale and on that ground decree for specific performance of sale was refused and the trial Court had directed the defendants to return the advance amount of Rs. 3.00 lakhs together with 9% interest per annum from the date of suit till the date of realisation by the plaintiff. The plaintiff being aggrieved by the impugned judgment and decree refusing to giant a decree of specific performance has filed this appeal before this Court.

6. Sri. S.K. Venkata Reddy, learned Counsel for the appellant contends that the trial Court committed an error in holding that plaintiff was not ready and willing to perform his part of obligation under the agreement of sale; he further contended that the trial Court committed an error in coming to the conclusion that there is delay and laches on the part plaintiff in approaching the Court for enforcement of agreement of sale. He further contended that in the absence of pleadings and evidence on record, the finding of the trial Court that great hardship will he caused to the defendants in the event of granting a decree of specific performance of sale is erroneous. The trial Court failed to appreciate the terms and conditions contained in the agreement of sale. The material on record discloses that it is on account of failure on the part of the defendants the agreement of sale was not enforced. The impugned judgment and decree of the trial Court is contrary to the oral and documentary evidence on record. Reliance is placed on the following decision.

1. Govind Ram v. Gian Chand

7. Per contra Sri. Lakshminarayana Rao, learned Counsel for the defendants supported the impugned judgment and decree of the trial Court. He had argued before us that the defendants performed their part of the obligation under the agreement of sale and it is the plaintiff who failed to perform his part of obligation. He had argued that the plaintiff was not ready with the money and failed to perform his part of the obligation under the agreement of sale, and that the discretion exercised by the trial Court in refusing to giant a decree for specific performance is in accordance with law. He had placed reliance on the following decisions.

1. K.S. Vidyanadam and Ors. v. Vairavan

2. Kiran Bala v. Surinder Kumar 1996 SC 2095 Page 1885

3. N.K. Giriraja Shetty v. N.K. Parthasarathy Shetty and Ors.

8. We heard the above arguments of both the wide and perused the entire appeal records.

9. As we see the material on record discloses that defendant No. 1 executed an agreement of sale on 26.12.1994 agreeing to sell the schedule properly in favour of the plaintiff and the defendants acknowledged the receipt of an advance amount of Rs. 2,00,000/-. As we further see due to differences between the plaintiff on the one side and defendant No. 1 on the other and also for the reason that there was excalation of prices, another agreement of sale came to be executed by defendant Nos. 1 to 4 in favour of plaintiff on 29.06.1995 and under this agreement of sale dated 29.06.1995 the defendants have agreed to sell the schedule property at the rate of Rs. 120/- per square feet and further acknowledged the receipt of advance amount of Rs. 3.00/- lakhs on different dates including the advance amount paid under the first agreement referred to above. It was specifically agreed in the second agreement that the measurement of 16 guntas of schedule property is subject to actual measurements available. Clause 7 of the first agreement of sale reads as under:

7. That the vendors and the purchaser hereby agreed and assure each other under this agreement of sale that the sale transaction shall be completed within 60 (sixty) days from the date of this agreement. Within the said period the vendors shall obtain the tippani copy of the schedule property from the survey department and pode shall be effected confirming the actual possession and title of the schedule property, or otherwise, the stipulated period as agreed above to complete the sale transaction shall be the such time the vendors obtain the tippani copy and pode of the schedule property.

10. A reading of the above clause in the agreement makes it clear firstly that the sale transaction shall have to be completed within 60 days from the date of agreement and secondly it is specified that the defendants shall obtain tippani copy of the schedule property from the survey department and the pode shall be effected by them confirming the actual area in possession of defendants within the period of 60 days from the date of agreement; thirdly that in the event of defendants failing to secure the tippani copy from the survey department and poding the schedule land within 60 days from the date of agreement, then the sale transaction have to be completed within 60 days from the date the defendants obtaining the tippani copy and poding of the land. Though the defendants in their evidence stated that they have obtained tippani copy from the survey department and poding of the schedule land was effected, no documents thereto were produced by them before the trial Court in proof of the same. The readiness and willingness of the plaintiff to pay the balance of sale Page 1886 consideration and to have the sale deed registered in his name depended more on the defendants producing the tippani copy and poding of the land by the survey department. In the absence of any documentary evidence to show that the defendants have secured the tippani copy from the survey department and poding of the schedule land subsequent to the agreement of sale, it cannot be said that the plaintiff had failed to perform his part of obligation under the agreement of sale. Having gone through the records it is clear to us that the pleadings and material on record clearly indicates that it is the defendants who failed to perform their part of obligation under the agreement of sale in not securing the tippani copy and further getting his land poded by the survey department and in our considered view it is on account of failure on the part of defendants in not performing their part of obligation, the sale transaction was not completed.

11. In the agreement of sale it is specifically agreed between the parties that plaintiff shall pay Rs. 120/- per square feet to the actual land available in the schedule property. Though the agreement of sale specifies that the schedule property measures 16 guntas, it is equally specified that the same is subject to actual measurement available. It is for the purpose of finding out the actual measurements available an obligation is casted on the defendant to obtain the tippani copy of the schedule property and poding of the land was to be done by the survey department and further more the balance of sale consideration depended on actual measurement available on the ground/kind after the poding was earned out by the survey department as agreed upon by the parties. Therefore according to us the performance of plaintiff's obligation depended mainly on the performance of obligation by the defendants. The defendants have failed to prove and establish before the trial Court that they have obtained the tippani copy of the schedule properly from the survey department and further got the land poded by the department, thereby confirming the actual area available for sale and to work out what was the balance payable by the plaintiffs to defendants towards sale consideration.

12. Under the agreement of sale the defendants acknowledged a receipt of sum of Rs. 3.00/- lakhs as advance. Subsequent to agreement of sale the defendants have not intimated the plaintiff instructing that they have obtained tippani copy and also got the poding work done by the survey department of schedule land. On 23.11.1995 the plaintiff got issued a lawyer's notice calling upon the defendants to produce the tippani copy issued by the survey department and further with regard to poding of the schedule property specifying the actual extent of land available for conveying the schedule property in favour of plaintiff. In this legal notice, Ex.P.3 the plaintiff has further stated that despite several requests, the defendants were postponing on one pretext or the other the matter of obtaining the tippani copy from the survey department and poding of the schedule land. The plaintiff further stated therein that he was always ready and willing to perform his part of the obligation under the agreement of sale and to complete the sale transaction. On 11.12.1995 the defendants Page 1887 replied as per Ex.P.4 contending that they have obtained the tippani copy from the survey department and got the schedule land poded. The defendants further contend in then reply notice Ex.D.4 that despite convening a panchayat the plaintiff was not ready with the money to complete the sale transaction. Again on 05.01.1996 the plaintiff got issued second lawyer's notice as per Ex.P.5 calling upon the defendants to furnish the tippani copy of the schedule land and also to clarify with regard to two civil suits pending between the defendants on the one side and one Sri. Timmaraya on the other side in City Civil Court, Bangalore. It is pertinent to observe here that in this second notice the plaintiff called upon the defendants to get disposal of the two civil suits in respect of schedule property and to execute the registered sale deed in terms of agreement of sale by accepting the balance sale consideration failing which he will proceed against them in accordance with law.

13. The defendants by their reply notice dated 16.02.1996 as per Ex.P.6 admitted pendency of two suits between them and one Sri. Timmaraya in respect of the schedule property. This exchange of notice between the plaintiff and defendants clearly indicates that defendants were only interested in securing the payment for 16 guntas of land without discharging their obligation of securing tippani copy from the survey department and poding of schedule property. As we see the defendants on one pretext or other refused to secure the tippani copy from the survey department. In addition to that the defendants were not evincing interest in settling the civil disputes pending before the civil court between the defendants and one Thimmaraya in respect of the very schedule property. Therefore, in our considered view, it is not open for the defendants to contend now that plaintiff was not ready and willing to pay the balance sale consideration.

13. During the pendency of the suit before the Trial Court a Surveyor came to be appointed as court Commissioner to inspect the spot and to submit the report and the court commissioner submitted his reported on 27.8.2007 and also a sketch of the schedule property as per Ex.P7 and P8. It is relevant to observe in this context that the defendants have not filed any objections to the commissioner report and the sketch. The commissioner in his report staled that Sy.No. 5/1 of Singasandra village measures 22 guntas. Out of this 22 guntas in Sy.No. 5/1, 8 1/2 guntas of land has been acquired by National Highway Authorities of India and another 3 1/2 guntas of land is encroached upon by trespassers and they have constructed buildings and erected compound. The actual land in physical possession of the defendants in Sy.No. 5/1 was only 10 guntas. Nothing is elicited by the defendants in the cross-examination of the court commissioner to disbelieve his report. On the other hand DW.1 in his cross-examination stated that he did not know that a portion of the schedule property was acquired for the purpose of widening the national highway and he further denied the encroachment by the trespassers. Thus it is clear that actual vacant land available in the schedule property for transfer in favour of plaintiff is only 10 Guntas. The plaintiff is liable to pay at the rate of Rs. 120/- per sq.ft. for an area of 10 guntas in the schedule Page 1888 property and not to the area of 16 guntas as claimed by the defendants. The defendants with malafide intention to secure payment from the plaintiff for the area which is not in their actual possession refused to obtain the tippani copy from the survey department and poding of the schedule land by the survey department. Thus it is clear to us that it is on account of default on the part of the defendants the sale transaction was not completed.

14. The learned Counsel for the defendants contend that the agreement of sale dated 29.6.1995 and the suit is filed in the year 1998 and now we are in 2007; quite natural that there is escalation in prices of the real estate in and around the schedule property. At this stage if the defendants are directed to execute a registered sale deed in favour of the plaintiff, it will definitely result in great hardship and therefore, the Trial Court is right in exercising its discretion under Section 20 of the Specific Relief Act refusing the decree for specific performance. In support of his contention Learned Counsel for the defendants placed reliance on a decision of Supreme Court in K.S. Vidyanandam and Ors. v. Vairawan . The facts in Vidyanandams' case are that the agreement of sale of house property for a consideration of Rs. 60,000/- was entered into between the defendants and plaintiffs on 15.12.1978. In terms of agreement, the plaintiff advanced Rs. 5000/- as earnest money. The agreement stipulated that even within a period of six months, the plaintiff had to purchase stamp papers, tender the balance amount and call upon the defendants to execute the sale deed and deliver possession of the property. It also stipulated that in case of plaintiffs failure in performing his part of contract, the defendants would be entitled to forfeit the earnest money of Rs. 5000/- and that in case of defendants' failure to perform their part of the contract, they would be liable to pay the double the said amount. In the instant case on hand after lapse of 2 1/2 years on 11.7.1981, the plaintiff issued a legal notice through his advocate to defendants stating that he had always been ready and willing to perform his part of the contract, that he was sufficiently rich and was able to pay the balance amount of consideration as and when required and that the plaintiff had been requesting the defendants to execute the sale deed, but the defendants had been seeking time representing that the tenant who was in occupation of the house had not vacated. In the facts and circumstances the Supreme Court held that in the agreement of sale there is no reference to the existence of tenant in the building and for a period 2 1/2 years from the date of agreement the plaintiff was sitting quite without taking steps to perform his part of the contract and a total inaction on the part of the plaintiff for the period of 2 1/2 years. Further there is substantial raise in the prices in real estate. Under those circumstances, it was held that it would be inequitable to give relief for specific performance". But the facts in the present case are entirely different from the facts in Vidyanandam's case.In the agreement between the plaintiff and defendants, there is an obligation on the defendants to obtain tippani copy from the survey department and poding of the schedule land. The performance of plaintiff to pay the balance of sale consideration Page 1889 and to have the sale deed registered in his favour depends on the performance of obligation by the defendants under the agreement. As we have observed that the defendants have not produced any document to show that they have obtained tippani copy from the survey department and poding of the schedule property etc. On the other hand, the plaintiff got issued a lawyer's notice on 23.11.1995 calling upon the defendants to obtain the tippani copy from the survey department and poding of the schedule land. Further in the second lawyer's notice dated 5.1.1996, the plaintiff called upon the defendants to produce the tippani copy from the survey department and also to clear the civil litigations pending in respect of the schedule property. Since the defendants failed to perform their part of the contract, the sale transaction was not completed as already held that the plaintiff was always ready and willing to perform his part of obligation under the agreement of sale. Therefore, the law laid down by the Supreme Court in Vidyanandam's case has no application to the facts of this case.

15. The learned Counsel for the defendants further relied on judgment of this Court in N.K. Giriraja Shetty v. N.K. Parthasarathy Shetty and Ors. and contend that the plaintiff must be always ready with necessary financial resources and must have mental attitude to perform his part of the contract. Again the law laid down in Giriraja Shetty's case has no application to the facts of the present case. It is settled position of law that plaintiff need not produce ready cash to demonstrate his readiness and willingness to pay the balance consideration and to have the saledeed registered in his name. Admittedly, plaintiff is a builder and man of affluence. The plaintiff in his pleadings and evidence stated that he is having the capacity to mobilise the funds to pay the balance sale consideration and to have the sale deed registered in his name. The readiness and willingness of the plaintiff to pay the balance sale consideration depends on the performance of certain obligations by the defendants under the agreement of sale. We have already held that defendants failed to perform their part of obligation under the agreement of sale and on the other hand, the plaintiff was ready and willing to perform his part of obligation under the agreement of sale.

16. It is not in dispute that in the recent past, there is escalation in prices of real estate in and around the schedule property. The agreement of sale is dated 29.6.1995. The last correspondence between the plaintiff and defendants was on 16.2.1996. The suit was filed on 29.6.1998. In identical circumstances, the Supreme Court in Gobind Ram v. Gian Chand held as under:

9. In view of the above clear finding of the High Court that the appellant tried to wriggle out of the contract between the parties because of escalation in prices of real estate properties, we hold that the respondent is entitled to get a decree as he has not taken any undue or unfair advantage over the appellant. It will be inequitable and unjust at this point of time to deny the decree to the respondent after Page 1890 two Court below have decided in favour of the respondent. While coming to the above conclusion we have also taken note of the fact that the respondent deposited the balance of the consideration in the trial court and also the amount in the High Court, as directed. On the other hand appellant as held by the High Court tried to wriggle out of the contract in view of the tremendous escalation of prices of real estate properties. However, to mitigate the hardship to the appellant we direct respondent to deposit a further sum of Rs. 3,00,000/- within 4 months from today with the registry of this Court and the amount shall be kept in Short Term Deposit in a nationalised bank. While giving the above direction we have taken note of the offer made to us on behalf of the respondent. This amount is to be paid to the appellant on giving his possession of the suit property to the respondent within 6 months from the date of the deposit of the above amount. The appellant shall also be entitled to withdraw the amount already deposited in the Trial Court and the amount of Rs. 1,00,000/- which has been kept in interest bearing fixed deposit in the registry of the High Court.

17. During the course of arguments, learned Counsel for the plaintiff filed a memo stating that the plaintiff is ready and willing to pay to the defendants sale consideration at the rate of Rs. 300/- per sq.ft or at a rate as may be reasonably fixed by considering the facts of the case. The material on record discloses that originally defendants agreed to sell the schedule property to the plaintiff under an agreement of sale dated 26.12.1994 and acknowledged advance amount of Rs. 2,00,000/-. Due to escalation in the prices there came to be another agreement on 29.6.05 wherein the plaintiff agreed to pay sale consideration at the rate of Rs. 120/- per sq.ft and paid additional advance amount of Rs. 1,00,000/-. Thus the defendants have acknowledged the receipt of total advance amount of Rs. 3,00.000/- under both the agreement of sales. Now the plaintiff has offered to pay Rs. 300/- per sq.ft to the defendants for the actual measurement available. It in not in dispute that there is escalation of prices of real estate in and around the schedule property. In order to balance the interest of both the parties and in the facts and circumstances of this case and also as per the law laid down by the supreme court in Gobind Ram's case, we are of the considered view that in order to mitigate the hardship to the defendants, we direct the plaintiff to pay to the defendants at the rate of Rs. 350/- per sq.ft. for actual area of 10 guntas available in the schedule property for transfer in favour of plaintiff. It is brought to our notice that defendants have recently deposited the amount as directed by the Trial Court in the impugned Judgment and Decree, if so, the defendants are entitled to withdraw the amount already deposited before the Trial Court.

18. For the reasons staled above, the following.

ORDER

i) Appeal is allowed.

Page 1891

ii) The impugned Judgment and Decree dated 10.3.2005 in O.S.No. 5100/1998 passed by the XI Addl. City Civil Judge, Bangalore City is hereby set aside.

iii) The suit of the plaintiff in O.S.No. 5100/1998 is decreed directing the defendants to execute the registered sale deed in favour of the plaintiff for an area of 10 guntas available in the schedule property by accepting the balance sale consideration from the plaintiff.

iv) The plaintiff shall pay or deposit the balance sale consideration at the rate of Rs. 350/- per sq.ft. for an area of 10 guntas available in the schedule property within a period of three months from today after deducting the advance amount of Rs. 3,00,000/-.

v) The defendants are entitled to withdraw the amount deposited by them before the Trial Court.

vi) In the facts and circumstances, the parties to bear their own costs.

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