Karnataka High Court
Smt Sharadamma vs Sri Gunashekar on 5 September, 2008
Equivalent citations: AIR 2009 (NOC) 1370 (KAR.), 2009 (2) AIR KAR R 207 2009 AIHC (NOC) 457 (KAR.), 2009 AIHC (NOC) 457 (KAR.)
Bench: S.R.Bannurmath, A.N.Venugopala Gowda
Dated this the sub day of SCPtembcI3 §[j : .
Present:
rm Korma: an-. JIIST'IC'.B§ 55.2. 1; v[ .'
'rim Hozrnm xx. JtIS'I'I€:E '
REGULAR mzgfr a.1§rr=::..'1;,z(e. % 1'766[
BETWEEN :
Smi. Sharadamma; ~
W/0 late Sri D. :S'1tam'_'--an1aa, 1: ..
Aged about 60. . '
R/at No. 24,? b V.
Next to PIatoInaticS_.P1'o.~iua':té.- ~
B. Naxayaiiapuffigl, "ii". "
Whitefield Road;
Dooravaxfinagar '
Bangalore-5.60.0I6;. ,_ % ...APPELLAN'1'
(By Szji.' €?--._S. V%SW§$WfiI3;' Senior Adv., for
:As__sociafes,.....Smt. I-LR. Vasudha, Adv.)
Sfi
S / o
' Aged about 45 years,
'A 1 -- .. [at No." 1680,
_ »'2n<% Crass, 3rd Stage,
-Pr "shllagar,
._ "Ba1§1galore-560 O21. RESPOHDEN1'
V ' ._ ;'{By Sri. Subha Rae for M/S Subba Rao,
Sri B.V. Gangieddy, Adv. for C] R)
This Rcgular First Appeal is filed under 1
r/W Section 96 of CPC against the Judgment
3.4.2007 passed in O.S.No. 1051/2903 on the
11* Additional City Civil Judge,
for specific performance of
This appeal being rcsci*aé;d'A at is
coming on for Pmnotgnccxnent gmfV"-..judgé:incnt.v th5.s day,
Bannurmath J., delivér5:;t- _
V 'n;:iy:1 _th.§ Imsuccessfixl defendant
dated 3.4.3007 passed by
the VVII"-'3_Q""City Civil Judge, Bangalore City in
0.3. 'A v
* facts giving raise to the present appeal are as
'folibwsz . ' L'
'1"'1.:1c respondent] plaintiff' hczein had filed a suit for
pexformance of the contract against the " appeliant/ defendant herein in respect of the suit schedule P1'0P€I't}'-
6""
11
exercising the judicious discretion as required under Section 20 of the Act, the impugned judgement and decree uxxsustainabie. it is also submitted that, evenwiiiiougii Court had framed the additionai "i;s'sug_ -; fifiaeb T. alternate prayer for refund, not by Court indicates non application V the irnpuged judgment and Eable aside.
8. On tilejotherihiwaflnib Sii«.V:'S;1;bi5a;«'f§iao, learned Senior Counsel for piéiiniiiijirespondent argued in supportiof Q33 and decree passed in his favoliii u "
that, the decision relied upon by the in the case of 1MDA.R:!0 --::a- usage P.D%0UzA -13- EHONDRHLO NAIDU [2904-{5} SCC 549] V A es such, it will not help the appellant to take his case any fiirther. it is submitted that, the intention of the parties has to u be gathered by bare reading of the document ---- Ex.P.2 and as its 6] has been held as per incurium in the later nomenclature or titie and the terms and conditions put therein 12 clearly indicate that, that eyes opened the defendafit-jt_'c.:entercd into an agreement of sale, which was rightly Court and as such, the present appe._a.I__is deiicidef is submitted that, so far as clauses; 4;'_e.t::.t1 s.;.t ' pointed out by the that they are only penal case, the defendant failed to t contract and merely because option is g;ivee..to.:'th.e tfloes not mean that the Court specific performance. The pronouncement in the cast: mum' [2004f6) sec 649;, as. Ajgesnzjf-' sax. smamnamsnuz [Am 2007 SC 1236} V have heard both the Counsel at length and AA «.11. At the outset, we have to note that the ' tjrotacuncement in the case of IMDARAO -93- HARM) [1999f8) " 416] has been distriztgujshed and declared as per ina1nu' m in the iater decision. in the case of P.D'SOI3ZA --w- SHONDRILO %w 13 1\£dIDU{2004(6) SOC 64913116 as such, the same&Vis_'4ef for the appellant's contentions.
12. However, the Division 'case of am. away: -03- Dr. 3.3. met' ' 224] has held that, Where fllfi,-agvk-'flfilfififlt provideerv option to the vendor to repay the moiiey property and the parties have Vgigxfeernentett that manner and - such option, Whether it wou1d._rrot~ tofigant the decree for specific performance it 1 to the terms of the agreement and right of the prospective ventior to t;jxe1'eise pay ofl' the amount and The scope of this question. was Apex Court vie-é-v"is., Sections 20, 23 T' 10 the case of M.L. DEFENDER SINGH -vs- ' H 1973 SC 2457], the i~Ion'h1e Supreme Court V ''16. The posifion stated above is in oorjomzity with the principles found stated in Sir Edward I4Yy's "Treatise on "Mu the Specific Performance of ' "
(Sixth Edn. Atp.65). It was said thefe: V - "
«file question the contract? Is it oef£ein' K V' shall be done,"t;y;;{z atsunz.
whether by way of perzqfty er to secure, "the ._of irery act? Or, £5'-.'t' 'two things shalt be party 'Qf or the payment "the :§ym_jefVfnéneVq?,51jt" the former, the AfciC:tVofVA3thepen,gI or other like sum being
-- prevent the Court's »._e:g,fore:'ng of the very act, and into execution the intention of the If the latter, the oonmtct is :v';-settisfied by the payment of a sum of and there is no gmu"nd for ' against the party having the election to compel the performance of the other alternative.
From what has been said it will be gathered that contracts ff the kind new under d1':5c:uss~.»'on are diweible into three cfasseesr é/ 14 If in other respects it can and 15 (1') Where the sum v Vt" H strictly a penalty w a of seazring the contract, as the 1 (it) Where the name * di zofbe paid as " for a Ofthe oontrg§,¢t;_'' '' V V' "
"(:'i:') zhé"~éum+fi_gmd is an 1, zh;e'_ which magL__!g_e V ».sebe;jm££:g;f$rVt.'theberféofirzance of the ad " of ihetierson Qlyxhem the " or the act done.
u" the stipulated payment either Of the two fi?'st-
'jitezttioned heads, the Court will ergforce Xftllght to be enforced, just in the same Vwayasaoontractnottodeapartiwlar act, with a penalty added to secure its pezfomzanoe or (1 sum named as liquidated damages, may be speaficallg enforced by means of an irgiwzction against breaking it. On the other mg, where the contract comes under the third head, it is satisfied by the paggnent of the 17 the i~Io11'b1e Supreme Court, the Court is required to determine this aspect on the facts and circumstances of eaeh-V it, to find out whether specific perfoI'mance.':_:ofV convey a property ought to be or 'not.
14. On detail reading of Ex;.P.2::'a11s1 4 and 5 therein, in our view, eieariy iuci-ieiates £t1:'v"t5.vt}:;eVVi1:J:teni:iorx of the party was never to go of Ciausc 5 of the agreement gives ..fh\&A'%*¢nnd0I'AA Iefund the advance sale con_side1atio_n_ the time fixed for 4 of the said agreement fmthervvielearlgir -.that:¢~*'even in case Where vendor fails to execute the4"'rengVisteied"vsai'edeed and even where the purchaser ,.,_is with "" "balance sale consideration within the then the vendor is only Iequimd to refund the jilconsideration along with liquidated damages at the rate of 3% per month or 36% per annum. In our view, as A ~?_"' these two clear options available to the vendor, them is absolutely no clause indicating the right of the pmvchaser to "take steps for specific performance in case the alleged vendor failed to perform her part. Such clause is normally found in ép, 18 agreement of sale and on the other hand, clauses 4 "abeing most unusual, it can be gathered that, the fine parties was never to sell and purchase j dispute, but Ex.P.2 was executed' :'t€:3..'_2e amount of Rs.2,50,00{)/~ advanced and tedmiitediyvépaidt to defendant by the purchaser. clear from the conduct of the _ out by fill'?
learned Counsel for this was an agreement for have permitted the vendor to construction in the property i;t1:ve"v~e,1'iege:vivvVetgreement and similarly if really the ctefendent of selling, she would not have spent nfmney construction in the existing would have gone to the alleged that immediately after receiving the sum of ,_Rs.2;5€)1;,bA00/e"'eifraim the plasma: the defendant put up 4een»st1"I1ctann;;.is not disputed by the plaintifi' and in fact, in his ereeejejéenzinaiion, he admits to the same. H 15. Similarly, even before the pIa1'ntifl'Woke up by issuing legal notice dated 9.11.2002, the conduct of the party is 19 relevant to be noted. Seven days prior to the said nofice -- Ex.P.4 issued by the plaintifl on 2.2.2002, the defendanttthhs in fact lodged a poiice complaint narrating the under which Ex.P.2 came into existence,....the.x conduct of the p1aiz1tifi' in ageement of sale and thexeby_»fomin«g- defenéant to tsp police coxnpiaint in this Iegaztlf» 6:[1:1.é002, in fact the defendant has as per' wherein again the circumstances as been narrated in detail. No deuht the to this as per Ex.P.4 menfiorfiné an egieement of sale and not loan eansactioe, ..wm¢h' only title of the deed -- Ex.P.2 and the aflegegi of sale. In our v'mW, on detail we"fir--.d"that, by xeading clauses 4 and 5 in surrounding circumstances and the conduct of the only a loan txsansaetion and Ex.P.2 came to C be or by way of security and both the parties never act upon it as an agreement of sale. The possibility enbsequent dispute between the parties because of the " not giving the receipts for the interest paid, it has resulted in the present suit. By reading the clauses in the ,§'"
20
agreement especially clauses 4 and 5, as them is"
giving any right to the purchaser for enfoiciz-ifi' 4' agitement and on the other hand: as-
panic" s themselves agzeed that in the'.ev?e_i3i'lvoflbIeac_vA"
remedy would be by way of for V L' in our opinion, the .._$ucll is legally estopped from other than such compensation or c£é1mage;;;""* -- if 16;. In i1oi1..._conside1*atio11 of these aspects by the 13331" "t1ie;i§*' prospective has resulted in the unjusji'a'.ng1 illegal elven otheiwise, We find that the trial V to elcemise its d1scre' tion under Section 20 of the Section directs the jurisdiction to decree a for performance is discretion and the Court is not bound such zelief mexely because it is lawful to do so; VA discretion of the Court is not arbitrary but sound and mgsonabxs, gumed by judicial principles and capable of correction by a court of appeal. in our vfiew, the trial. Court has failed to exercise this jurisdiction properly.
-0=9'f"$ 21
17. Looking at the case from any angle, we the impugned judgment and deczee is the findings above and as such, thesame iset aside.
18. in the result and _1jeas<":«"11S.VV:S"t.ett:rvViv; above, the appeal is allowed in flerms:
a) The:'j1;dg1r:xe:it 3.4.2007 passed 1/.2¢é%;;_;a' xx Additional City _ ____ v_ decreeing the suit for specific; .. aside and in subsfitfifteqé elefexldant is directed to asuzfi 61'. 2,$E},0G0/ - (Rupees two lakhs only) with interest at the agreed p§3;.':inonth fimn 23.03.2002 tiii the daiie..of myment.
VA '*fV'i1e. ciefendantj appeiiant is aiso divested to pay to p}aint.ifi' a sum of Rs.20,()90/-- (Rupees twenty thousand only) as damages.
gy-
Nsu/--
22 C) In the circumstances ofjizhc casé," ;:_) ax'tieVs .L directed to bear their sal-
¢