Karnataka High Court
Smt. V T Shoba vs Babu Alwa on 20 October, 2022
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF OCTOBER, 2022
BEFORE
THE HON'BLE MRS. JUSTICE M G UMA
REGULAR SECOND APPEAL NO. 1702 OF 2011 (SP)
BETWEEN:
SMT. V.T. SHOBA,
AGED ABOUT 44 YEARS,
W/O. H.H. JAGANATH,
R/O. TELUGARA STREET,
HASSAN - 573 201.
... APPELLANT
(BY MR: H.C. SHIVARAMU, ADVOCATE)
AND:
1. BABU ALWA, DEAD BY LRS.
1A). SMT. DIVYA BHANDARY,
AGED ABOUT 39 YEARS, D/O. LATE BABU ALVA,
W/O. VIDYAHARAN BHANDARY
1B). SMT. DEEPTHI SHETTY,
AGED ABOUT 37 YEARS, D/O. LATE BABU ALVA,
W/O. AVINASH SHETTY
C/O. ANANDA ALVA,
BOTH ARE RESIDENTS OF
ALVA ESTATE, VODOOR VILLAGE,
SAKLESHPUR TALUK, HASSAN DISTRICT.
... RESPONDENTS
(BY MR: AJITH A. SHETTY, ADVOCATE
FOR M/S S.A. PARTNERS)
THIS RSA FILED UNDER SECTION 100 OF CPC., AGAINST THE
JUDGMENT & DECREE DTD: 13.4.2011 PASSED IN R.A.NO.10/2009 ON
THE FILE OF THE SENIOR CIVIL JUDGE, SAKALESHPURA, ALLOWING THE
APPEAL AND SETTING ASIDE THE JUDGMENT AND DECREE DATED
18.4.2009 PASSED IN O.S.NO.63/2008 ON THE FILE OF THE CIVIL JUDGE
(JR.DN) SAKALESHPURA.
THIS R.S.A. HAVING BEEN HEARD AND RESERVED FOR JUDGMENT
ON 03.09.2022 COMING ON FOR PRONOUNCEMENT OF ORDERS THIS
DAY, THE COURT PASSED THE FOLLOWING:
2
JUDGMENT
The appellant-defendant is before this Court being aggrieved by the impugned judgment and decree dated 13.04.2011 passed in Regular Appeal No.10/2009 on the file of the learned Civil Judge (Sr.Dn) and JMFC, Sakaleshpura, (hereinafter referred to as 'the First Appellate Court' for brevity), allowing the appeal and decreeing the suit of the respondent-plaintiff in O.S.No.63/2008 on the file of the learned Civil Judge (Jr.Dn) at Sakaleshpur (hereinafter referred to as 'the trial Court' for brevity), directing the defendant for specific performance of contract in favour of the plaintiff.
2. For the sake of convenience, parties are referred to as per their status and rank before the Trial Court.
3. Brief facts of the case are that the plaintiff filed the suit in O.S.No.63/2008 before the trial Court against the defendant seeking specific performance of contract i.e., agreement for sale dated 08.08.2007 and direct the defendant to execute the sale deed. It is contended by the plaintiff that the defendant is the absolute owner in possession of schedule property. The defendant entered into 3 an agreement with the plaintiff on 08.08.2007 agreeing to sell the suit property for consideration of Rs.2,10,000/-. On the date of agreement for sale, the defendant received an amount of Rs.50,000/- as earnest money towards part payment of the sale consideration and agreed to execute the registered sale deed in favour of the plaintiff on or before 07.11.2007, after receiving the balance consideration amount of Rs.1,60,000/- i.e., at the time of getting the sale deed registered. However, the defendant was not ready and willing to execute the sale deed and therefore, legal notice dated 18.08.2007 was issued, calling upon the defendant to get the sale deed registered after taking balance consideration amount, as the plaintiff was ready and willing to perform his part of the contract. The said legal notice was served on the defendant. The plaintiff had also obtained demand draft for Rs.1,60,000/- in favour of the defendant, drawn on Vijaya Bank, Sakleshpur and was ready to get the sale deed registered, but the defendant had not executed the same. Therefore, the plaintiff has approached the trial Court for specific performance of contract.
4. The defendant has filed the written statement denying the contentions taken by the plaintiff and also 4 contending that there is no cause of action for the suit filed by the plaintiff. It submitted that the plaintiff is a moneylender and he used to advance money at exorbitant rate of interest to various persons including the defendant. The defendant on many occasions had borrowed amounts from the plaintiff and repaid the same with interest. On one such occasion, when the defendant approached the plaintiff seeking financial help of Rs.50,000/-, the plaintiff took the defendant along with her husband to the Bank situated at Sakaleshpur and obtained her signatures without disclosing the contents of the documents. The documents signed by the defendant was styled as agreement dated 08.08.2007 and it was signed on 18.08.2007. The plaintiff filed the suit on 07.09.2007. Thus, it is contended that the plaintiff had not approached the Court with clean hands. It is also contended that the suit property is valued more than Rs.20,00,000/- and the defendant has not agreed to sell the same for the paltry sum of Rs.2,10,000/-.
5. It is further contended by the defendant that similar suit was filed by the plaintiff in O.S.No.210/2007 on the file of the learned Additional Civil Judge (Sr.Dn), Hassan, 5 which was came to be withdrawn. Therefore, it is prayed that the suit of the plaintiff is to be dismissed with cost.
6. On the basis of the pleadings on record, the Trial Court framed the following issues:
1. Whether plaintiff proves that on 8.8.2007 the defendant had agreed to sell the suit property for Rs.2,10,000/-
and executed the sale agreement in favour of the plaintiff?
2. Whether plaintiff further proves that defendant has received Rs.50,000/- as advance and agreed to receive the balance sale consideration of Rs.1,60,000/- on or before 7.11.2007 and further agreed to execute the sale deed in favour of the plaintiff?
3. Whether plaintiff was and has been ready and willing to perform his part of the contract?
4. Whether defendant proves that the plaintiff by playing fraud, undue influence and coercion has executed the sale agreement dated 8.8.2007?
5. What decree or order?
6
7. The plaintiff examined himself as PW.1 and two more witnesses as PWs.2 and 3. He got marked Exs.P1 to P12 in support of his contention. The defendant herself examined as DW.1 and examined two more witnesses as DWs.2 and 3. She got marked Exs.D1 to D5 in support of her contention. The Trial Court after taking into consideration all these materials on record, answered Issue Nos.1 to 3 in the affirmative and Issue No.4 in the negative and proceeded to decree the suit of the plaintiff in part, directing the defendant to repay the advance amount of Rs.50,000/- with interest at the rate of 6% p.a., from 08.08.2007 till realization. However, the relief of specific performance of contract was rejected.
8. Being aggrieved by the rejection of the specific performance of contract, the plaintiff has preferred regular appeal in R.A.No.10/2009 before the First Appellate Court. The First Appellate Court after considering the contentions of both the parties, allowed the appeal vide judgment dated 13.04.2011 and decreed the suit of the plaintiff for specific performance of contract with cost. Being aggrieved by the impugned judgment and decree passed by the First Appellate Court, the defendant is before this Court. 7
9. The appeal was admitted as per order dated 29.11.2011 and following substantial questions of law were formulated for consideration:
(i) Whether the discretion exercised by the Lower Appellate Court to grant the relief of Specific Performance is contrary to the provisions of Section 20(2)(b) & (c) of the Specific Relief Act?
(ii) Whether in the facts and circumstances of the case, the Lower Appellate Court is justified in exercising the discretion infavour of the respondent/plaintiff to grant decree for Specific Performance without considering the question as to whether for non-performance of the contract in question, compensation in money is an adequate relief, as provided by Section 14(1)(a) of the Specific Relief Act?
10. Heard Sri. H.C.Shivaramu, learned counsel for the appellant and Sri. Ajith.A.Shetty, learned counsel for the respondents. Perused the materials including the Trial Court records.
8
11. Learned counsel for the appellant-defendant contended that the trial Court has rightly decreed the suit in part and directed the plaintiff to repay the amount of Rs.50,000/- with interest. But the First Appellate Court without considering the defence taken by the defendant proceeded to decree the suit of the plaintiff as prayed for. The First Appellate Court has not considered the hardship that would be caused to the defendant if the specific performance of contract is ordered. The plaintiff admitted in his evidence that he owns 75 acres of land and therefore, if the specific performance of contract in respect of the schedule property, which measures 3.27 acres is not granted, no hardship will be caused to the plaintiff. On the other hand, the defendant does not own any other property except the suit land and under such circumstances, parting with the schedule property would amount to hardship, which cannot be compensated in terms of the money. The defendant is ready and willing to pay an amount of Rs.50,000/- with interest as directed by the trial Court. The defendant is a lady who has not understood the significance of signing the documents. She fairly admitted her signature found on Ex.P1. The discretion lies with the 9 Court for granting or refusing the specific performance of contract. Considering the status of the parties, grant of specific performance of contract would cause hardship on the defendant and therefore, he prays for allowing the appeal.
12. Per contra, learned counsel for the respondents- plaintiff opposing the appeal submitted that the suit was contested taking all possible defence. But the defendant has not proved her contention that she was mislead and her signatures were taken on Ex.P1. Even though the defendant failed to prove her defence, the trial Court without considering Section 20 of the Specific Relief Act, proceeded to partly allow the suit by directing the defendant to repay the advance amount with interest. But the First Appellate Court on proper appreciation of the materials on record, decreed the suit as prayed for. After amendment to the Specific Relief Act in the year 2018, no discretion lies with the Court. But to grant specific performance of contract when the defendant admits the agreement in question, she is bound by the same. Casually, the specific performance of contract cannot be denied. The defendant has never challenged the judgment and decree passed by the trial Court and therefore, there is 10 no defence available to the defendant. Since there are no reasons to deny the relief of specific performance of contract, the appeal shall fail. Hence, he prays for dismissal of the appeal with cost.
13. Learned counsel for the respondents placed reliance on the decision in the case of NARINDERJIT SINGH vs. NORTH STAR ESTATE PROMOTERS LIMITED1, to contend that when a false defence was taken by the defendant, regarding fabricating Ex.P1 and when the same is not substantiated by leading cogent evidence and when the defendant has not chosen to challenge the decree passed by the trial Court, she is not entitled for any relief and also to contend that in the absence of any pleading or proof regarding hardship, the same is not required to be considered by this Court in the Second Appeal.
14. I have considered the submissions made by the learned counsel appearing for the parties and perused the materials on record in the light of the substantial questions of law formulated for consideration.
1 (2012) 5 SCC 712 11
15. Even though the defendant had denied the execution of the agreement as per Ex.P1, the trial Court held that the execution is proved by the plaintiff and that the plaintiff was ever ready and willing to perform his part of the contract by answering issue Nos.1 to 3 in the affirmative. However, the trial Court partly decreed the suit and directed the defendant to refund the earnest money of Rs.50,000/- with interest at the rate of 6% per annum. The relief of specific performance of contract was rejected. Admittedly, the defendants have not challenged the judgment and decree passed by the trial Court. Thereby, the defendants have prevented from challenging the agreement to sell-Ex.P1 and to deny the ready and willingness of the plaintiff to perform his part of contract.
16. The plaintiff challenged dismissal of the suit for specific performance of contract and directing the defendant to repay the amount of Rs.50,000/- with interest by the First Appellate Court. Therefore, the scope of this appeal is very limited i.e., to say that the defendant has no much defence as she has not challenged the judgment and decree passed by the trial Court. As per the substantial questions of law 12 formulated for consideration, this Court has to consider as to whether the discretion provided under Section 20(2)(b) & (c) of the Specific Relief Act is to be exercised in favour of the appellant or the respondent and as to whether denial of specific performance of contract in favour of the plaintiff could be compensated adequately in terms of money as provided under Section 14(1)(a) of the Specific Relief Act.
17. Learned counsel for the appellant relies on the evidence of PW.1 to contend that the plaintiff owns 75 acres of land, whereas, the defendant is only owning the schedule property for her livelihood and therefore, more hardship would be caused if the specific performance of contract is to be ordered. Per contra, learned counsel for the plaintiff would contend that no hardship was ever pleaded or proved by the defendant before the trial Court. On the other hand, during cross-examination of DW.1 i.e., defendant, she categorically admitted that she is having several residential houses. Therefore, it cannot be said that the defendant is owning the schedule property alone. When there is no pleading to the effect that the defendant will be put to greater hardship if the 13 specific performance of contract is ordered, the Court is not bound to consider the same.
18. I do find considerable force in the contention taken by the learned counsel for the respondent. In the entire written statement, the defendant has not pleaded about the hardship that she is going to suffer, if in case the suit is decreed as prayed for. On the other hand, she has taken the defence that her signatures were taken on Ex.P1 by misleading her when she approached the plaintiff for financial help of Rs.50,000/-. This defence taken by the defendant was turned down by the trial Court, which was never challenged by her.
19. The Hon'ble Apex Court in case of NARINDERJIT SINGH (supra) considered a similar situation where the trial Court declined relief of specific performance and ordered for refund of earnest money. The plaintiff challenged refusal to grant specific performance of the contract. The First Appellate Court decreed the suit as prayed for. Similar arguments were addressed before the Hon'ble Apex Court and after considering the contentions of the parties, it is held in Paragraph Nos.24 and 26 as under:
14
"24. It is significant to note that the appellant and his father had set up the case of total denial. They repeatedly pleaded that the agreement for sale was a fictitious document and the respondent had fabricated the same in connivance with Col. Harjit Singh and Vijay Bhardwaj.
However, no evidence was adduced by the appellant to substantiate his assertion. That apart, he did not challenge the finding recorded by the trial Court on the issue of readiness and willingness of the respondent to perform its part of the agreement. Therefore, we do not find any valid ground much less justification for exercise of power by this Court under Article 136 of the Constitution of India to interfere with the judgment of the lower appellate court which was approved by the High Court.
26. In the present case, the appellant had neither pleaded hardship nor produced any evidence to show that it will be inequitable to order specific performance of the agreement. Rather, the important plea taken by the appellant was that the agreement was fictitious and fabricated and his father had neither executed the same nor received the earnest money and, as mentioned above, all the courts have found this plea to be wholly untenable."15
20. In view of the above, it is to be held that when the plaintiff has proved execution of the agreement for sale and was ready and willing to perform his part of the contract, there was no reason to deny the specific performance of the contract.
21. It is pertinent to note that the defendant categorically denied the execution of Ex.P1 while filing the written statement. It was never the contention of the defendant that even though she entered into an agreement for sale, she had not foreseen the hardship that involves in performing the contract. It is also not her contention that performance of the agreement-Ex.P1 would be inequitable and it would workout greater hardship. However, the learned counsel for the appellant contended that since the plaintiff categorically admitted that he owns several acres of land, granting specific performance of the agreement would workout inequitable against the defendant. But the evidence of the defendant discloses that she has stated that she is having her own houses in Hassan. The details of such houses are not available but of course it cannot be held that the defendant is not owning any other properties of her own. 16 Under such circumstances, learned counsel for the appellant could not satisfy the Court as to how the specific performance of contract would workout hardship or it would be inequitable against the defendant. The decision in the case of NARINDERJIT SINGH (supra) aptly applies to the facts and circumstances of the present case. Therefore, the substantial question of law No.1 is to be answered against the appellant and in favour of the respondent.
22. Regarding the second substantial question of law raised in the matter, it is not the contention of the defendant that the plaintiff could be compensated in terms of money as an adequate relief for non-performance of the contract. No such defence was ever taken in the written statement. There are no materials on record to substantiate this contention. It is not even the line of cross-examination of the plaintiff. The First Appellate Court has considered the oral and documentary evidence placed before it and on re- appreciation, held that the plaintiff is entitled for specific performance of contract when he has proved the exhibition/execution of agreement for sale, payment of advance amount and also his ready and willingness to 17 perform the contract. When the defendant has failed to probabilize her defence and accepted the judgment and decree passed by the trial Court, there is absolutely no materials to contend that non-performance of the contract could be compensated adequately in terms of money. When there are no materials to satisfy the requirement of Section 14(1)(a) of the Specific Relief Act, as it stood then, the second substantial question of law also cannot be held in favour of the appellant. Therefore, both the substantial questions of law are to be answered against the appellant and in favour of the respondent.
23. It is relevant to refer to the decision in the case of SUGHAR SINGH vs. HARI SINGH (DEAD) THROUGH LRS. AND OTHERS reported in 2021 SCC ONLINE SC 975, wherein Paras
- 46 and 48 read as under:
"46. Now, so far as the finding recorded by the High Court and the observations made by the High court on Section 20 of the Act and the observation that even if the agreement is found to be duly executed and the plaintiff is found to be ready and willing to perform his part of the Agreement, grant of decree of specific performance is not automatic and it is a discretionary relief is concerned, the 18 same cannot be accepted and/or approved. In such a case, many a times it would be giving a premium to the dishonest conduct on the part of the defendant/executant of the agreement to sell. Even the discretion under Section 20 of the Act is required to be exercised judiciously, soundly and reasonably. The plaintiff cannot be punished by refusing the relief of specific performance despite the fact that the execution of the agreement to sell in his favour has been established and proved and that he is found to be always ready and willing to perform his part of the contract. Not to grant the decree of specific performance despite the execution of the agreement to sell is proved; part sale consideration is proved and the plaintiff is always ready and willing to perform his part of the contract would encourage the dishonesty. In such a situation, the balance should tilt in favour of the plaintiff rather than in favour of the defendant- executant of the agreement to sell, while exercising the discretion judiciously.
48. Even otherwise it is required to be noted that as such on applicability of Section 20 of the Act, no issue was framed either by the learned Trial Court or by the learned First Appellate Court or even by the High Court. The same has been dealt with by the High Court for the first time in a Second Appeal under Section 100 of the CPC. Even otherwise no cogent reasons have been given as to 19 why the decree of specific performance shall not be passed in favour of the plaintiff."
(emphasis supplied)
24. In view of the above, when the plaintiff is successful in proving his ready and willingness to perform the contract and the defence taken in the written statement are rejected by the trial Court, which is not challenged by the appellant, the only remedy that is available is to grant the relief of specific performance. Even though, exercise of discretion in decreeing the specific performance was available before amendment in the year 2018, the said discretion is to be exercised judiciously based on the materials on record. I do not find any reason to justify rejection of specific performance of contract in favour of the plaintiff or to confirm the judgment and decree passed by the trial Court, which ordered for refund of earnest money with interest rejecting the specific performance of contract. Therefore, I answer both the substantial questions of law against the appellant and in favour of the respondent and proceed to pass the following:
20
ORDER
(i) Appeal is dismissed with costs.
(ii) Impugned judgment and decree dated
13.04.2011 passed in Regular Appeal
No.10/2009 on the file of the learned Civil Judge (Sr.Dn) and JMFC, Sakaleshpura, allowing the appeal and decreeing the suit of the plaintiff-respondent is confirmed.
(iii) Consequently, suit of the plaintiff for specific performance of contract is decreed.
(iv) Registry is directed to send back the trial
Court records along with copy of this
judgment.
Sd/-
JUDGE
SMJ