Karnataka High Court
M/S Ballal Motor Fuels And Service ... vs Mr.G. Anantha Rao on 21 February, 2025
Author: S.G.Pandit
Bench: S.G.Pandit
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RFA No. 1373 of 2009
C/W RFA No. 1634 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF FEBRUARY, 2025
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR
REGULAR FIRST APPEAL NO. 1373 OF 2009 (SP)
C/W
REGULAR FIRST APPEAL NO. 1634 OF 2023
IN RFA No. 1373/2009
BETWEEN:
1. M/S BALLAL MOTOR FUEL AND
SERVICE STATION
KANKANADY, MANGALORE
REPRESENTED BY ITS PARTNERS
1. SRI. K. RAJAVARMA BALLAL
S/O LATE SRI. PANDYARAJA BALLAL
Digitally signed
by SHAKAMBARI AGED 62 YEARS
Location: HIGH RESIDING AT "JAYARAJ BAREBAIL"
COURT OF KUNTIKANA, MANGALORE TALUK
KARNATAKA
D.K.-575 001
2. SMT. K. VIJAYALAXMI ARIGA
D/O LATE PANDYARAJA BALLAL
W/O DR. P.N. ARIGA
AGED 79 YEARS
RESIDING AT VIJAYA MAHAL
KADRI, MANGALROE TALUK
D.K.-575 001
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RFA No. 1373 of 2009
C/W RFA No. 1634 of 2023
3. SMT. K. HEMALATHA BALLAL
D/O LATE SRI. PANDYARAJA BALLAL
W/O SRI. VRASHABHARAJA CHOWTA
AGED 67 YEARS
RESIDING AT DEVAKI SADAN
NEW BALMATTA ROAD
MANGALORE TALUK
D.K-575 001
4. SMT. SUMATHI R BALLAL
W/O DR. K. RATHNARAJ BALLAL
AGED 68 YEARS
RESIDING AT KELLAGUTHU HOUSE
SHIVABAGH, KADRI
MANGALORE TALUK
D.K-575 001
5. SMT. VINAYA J BALLAL
W/O SRI. JAYAVARMA BALLAL
AGED 62 YEARS
RESIDING AT JAYAMAHAL, LADY HILL
MANGALORE TALUK
D.K-575 001
6. SMT. M. VANAMALA BALLAL
W/O LATE SRI. K. MANIKYARAJA BALLAL
AGED 65 YEARS
RESIDING AT "SABARABAIL"
SHIVABAGH, KADRI
MANGALORE TALUK
D.K-575 001
...APPELLANTS
(BY SRI. K. CHANDRANATH ARIGA, ADVOCATE)
AND:
1. SRI. G. ANANTHA RAO
S/O SRI. G. SOMASHEKARA RAO
AGED ABOUT 76 YEARS
RESIDING AT "RAVIKIRAN"
KADRI, MANGALORE TALUK
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RFA No. 1373 of 2009
C/W RFA No. 1634 of 2023
D.K-575 001
SINCE DECEASED BY LRs
1(A). SMT. VASANTHI A. RAO
W/O LARE G. ANANTHA RAO
AGED ABOUT 65 YEARS
1(B). MR. RAVINDRA GOLLARAKERI
AGED 42 YEARS
1(C). MR. RAJEEV GOLLARAKERI
AGED 39 YEARS
R1(B) AND R1(C) ARE THE SON OF
LATE G. ANANTHA RAO
R1(A) TO R1(C) ARE RESIDING AT
"RAVIKIRAN"
KADRI, KAMBLA ROAD
MANGALORE TALUKD.K-575 004
...RESPONDENTS
(BY SRI. AJITH KALYAN, ADVOCATE FOR R1[A-C])
THIS RFA IS FILED U/S 96 OF CPC, AGAINST THE
JUDGMENT AND DECREE DATED 31.08.2009 PASSED IN
OS.NO.166/2006 ON THE FILE OF THE II ADDL. CIVIL JUDGE,
(SR. DN.), MANGALORE, D.K, DISMISSING THE SUIT FOR
SPECIFIC PERFORMANCE.
IN RFA NO. 1634/2023
BETWEEN:
1. M/S BALLAL MOTOR FUELS AND SERVICE STATION
KANKANADY, MANGALORE,
REPRESENTED BY ITS PARTNERS.
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RFA No. 1373 of 2009
C/W RFA No. 1634 of 2023
2. MRS. VANAMALA M. BALLAL,
W/O. LATE SRI K.M BALLAL,
AGED ABOUT: 60 YEARS,
R/AT SABARBAIL, KADRI,
SHIVABAGH, MANGALORE, D.K.
3. MRS. SHARMILA BALLAL,
D/O. LATE SRI K M BALLAL,
AGED ABOUT: 40 YEARS,
R/AT SABARBAIL, KADRI,
SHIVABAGH, MANGALORE, D.K.
4. MR.K. GAUTHAM BALLA
S/O.LATE. SRI. K.M.BALLAL,
AGED ABOUT: 39 YEARS,
R/AT SABARBAIL, KADR,
SHIVABAGH, MANGALORE, D.K.
5. MR.K. RAJAVARMA BALLAL
AGED ABOUT 62 YEARS,
S/O. LATE K PANDYARAJA BALLAL,
R/AT JAYARAJ, BAREBAIL,
KUNTIKANE, MANGALORE, D.K.
6. MRS. K. VIJAYALAXMI ARIGA
AGED: 79 YEARS,
W/O DR.P.N. ARIGA,
R/AT VIJAYA MANAL, KADRI,
MANGALURU TALUK, D.K.
7. MRS. HEMALATHA BALLAL
AGED: 67 YEARS,
D/O LATE K. PANDYARAJA BALLAL,
R/AT DEVAKI SADAN, BALMATTA ROAD,
MANGALORE TALUK, D.K.
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RFA No. 1373 of 2009
C/W RFA No. 1634 of 2023
8. MRS. SUMATHI R. BALLAL
AGED ABOUT 58 YEARS,
W/O DR.K. RATHNARAJA BALLAL,
R/AT KELLAGUTHU HOUSE,
SHIVABAGH, KADRI, MANGALURU TALUK, D K.
9. MRS. VINAYA J. BALLAL
AGED ABOUT: 53 YEARS,
W/O. JAYAVARMARAJ BALLAL,
R/AT JAYA MAHAL, LADY HILL,
MANGALORE, D.K.
...APPELLANTS
(BY SRI. K. CHANDRANATH ARIGA, ADVOCATE)
AND:
1. MR.G. ANANTHA RAO
S/O SRI. G. SOMASHEKAR RAO,
AGED ABOUT 70 YEARS,
R/AT RAVI KIRAN, KADRI, MANGALORE, D.K.
REPRESENTED BY HIS ATTORNEY SRI. G. RAJEEV
GOLLARKERI,
S/O. G. ANANTHA RAO,
AGED ABOUT: 35 YEARS,
R/AT RAVI KIRAN, KADRI,
MANGALORE, D.K.
...RESPONDENT
(BY SRI. AJITH KALYAN, ADVOCATE)
THIS RFA HAVING BEEN ARSIEN OUT OF RA
NO.105/2009 PASSED BY III ADDITIONAL DISTRICT
JUDGE, MANGALROE PREFERRED AGAINST JUDGMENT AND
DECREE OS NO.166/2006 IS REGISTERED AS RFA
N0.1634/2023 BY ORDER DATED 03.08.2023 AND AFTER
HAVING BEEN WITHDRAWN FROM THE COURT BELOW.
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RFA No. 1373 of 2009
C/W RFA No. 1634 of 2023
THESE REGULAR FIRST APPEALS HAVING BEEN
RESERVED FOR JUDGMENT COMING ON FOR PRONOUNCEMENT
OF THIS DAY, RAMACHANDRA D. HUDDAR J.,
DELIVERED/PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE S.G.PANDIT
and
HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR
CAV JUDGMENT
(PER: HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR) These two appeals are directed against the common judgment passed in two suits i.e., O.S.No.166/2006 and O.S.No.195/2007 dated 31.08.2009 passed by the II Additional Civil Judge (Jr.Dn.), Mangalore, Dakshina Kannada. Initially RFA.No.1373/2009 was filed by the appellants and being aggrieved by the said common judgment, RA.No.105/2009 was filed by the appellant therein before the III Additional District and Session Judge, Mangalore. There was an order passed in C.P.No.64/2003 by this Court dated 15.09.2014 withdrawing said R.A.No.105/2009 from the file of III Additional District Judge, Mangalore and transferred to this -7- NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 Court. Though there was an order so passed but, no steps were taken to withdraw the said appeal and subsequently as per the orders passed by this Court dated 03.08.2023, the said R.A.No.105/2009 was withdrawn and transferred to this Court and renumbered as RFA No.1634/2023 and connected with this Appeal i.e., RFA No.1373/2009. As both these appeals are directed against the common judgment passed in the aforesaid suits, common arguments are heard and common judgment is passed.
2. Plaintiffs in O.S.No.166/2006 filed their suit against the defendant who is plaintiff in OS No.195/2007 seeking the relief of the specific enforcement of the agreement of sale in between themselves and defendant, directing them to execute the registered sale deed in respect of plaint schedule property by receiving the balance consideration of Rs.24,72,720/- with an alternative prayer to refund the advance amount of Rs.15,00,000/- paid by the plaintiffs to the defendants together with the interest at the rate of 15% per annum -8- NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 with damages and costs. Whereas, defendant in O.S.No.166/2006 being the plaintiff in O.S.No.195/2007 filed the suit seeking the relief of possession, mesne profits etc., against the plaintiffs in O.S.No.195/2007. The plaintiffs in O.S.No.166/2006 are the defendants in O.S.No.195/2007 and vice-versa. As parties to both the suits are one and the same, as O.S.No.166/2006 is a comprehensive suit for specific performance of the contract between the same parties, parties to these appeals are referred to as per the rank in O.S.No.166/2006 to avoid any confusion.
3. That the plaintiffs in the aforesaid O.S.No.166/2006 state that, it is a partnership firm having its registered office at Kankanadi, dealing in fuel business. The plaintiff firm was a tenant in respect of the immovable property i.e., more fully described in the plaint having obtained from one Sri G.Somashekhar Rao under registered term lease dated 14.06.1972 for a period of 20 years which expired on 30.04.1992. The said lease was -9- NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 further renewed for a period of five years after expiry of the initial 20 years period with mutual understanding of the plaintiff-firm with a defendant.
4. It is specifically alleged by the plaintiffs that, the defendant proposed to sell the suit schedule property to the plaintiff for a valuable consideration of Rs.39,73,750/- at the rate of Rs.85,000/- per cent. Plaintiff firm accepted the offer and made an advance payment of Rs.15,00,000/- in part performance of the contract by issuing a cheque dated 05.02.2001 drawn on Syndicate Bank, Hampanakatta Branch, Mangalore. There was a stipulation of condition that, on defendant getting conversion of the property under the provisions of Section 95 of the Karnataka Land Revenue Act, the sale deed would be executed in respect of the schedule property and the plaintiffs have to bear the cost of conveyance. Even the defendant agreed to get the clearance from the Income Tax Department. To that effect, a sale agreement was entered into between the parties on 05.02.2001.
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 Thus, on the date of agreement of sale, plaintiff remained in possession of the schedule property by virtue of the said agreement of sale and not as a lessee under the defendant. As the plaintiff remained in the schedule property as intending purchaser, no rent was paid to the defendant. As per the agreement of sale, plaintiff put enclosures and began to use the same as a garage for the vehicles. He also carried out necessary leveling, alteration and filling up of the lands and also made several arrangements for the purpose of erection of petrol pump.
5. It is the specific assertion and stand of the plaintiff-firm that, it was always ready and willing to perform its part of the contract by paying the balance amount and also meet the expenses of conveyance. Though the plaintiff-firm repeatedly through its partners requested the defendant to get the clearance from the Income Tax Department and seek a conversion as agreed, but, defendant did not respond properly. Defendant went on promising to comply the terms of the agreement. The
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 plaintiff-firm remained in possession with a hope that, the defendants would comply the terms and conditions of the sale agreement. But, to the utter surprise of the plaintiff firm, defendant issued a quit notice dated 08.08.2003 terminating the tenancy and filed a suit in O.S.No.644/2003 on the file Additional Civil Judge (Jr. Dn), Mangalore, claiming possession and mesne profits based on landlord-tenancy relationship though the said jural relationship stood expired on the date of agreement of sale.
6. It is alleged that, the plaintiff in the suit filed by defendants i.e. OS 195/2007 filed written statement by put-forthing the pleadings with regard to the protection under Section 53-A of the Transfer of Properties Act. As the said suit was filed before the Court which had no pecuniary jurisdiction, the said suit was withdrawn from the said Court and transferred to the Court where this original suit filed by the plaintiff- firm was pending and renumbered. It is stated that even till date the plaintiff-
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 firm is ever ready and willing to perform their part of the contract. To the notice issued by the defendants, plaintiff issued a reply dated 17.09.2003 and called upon the defendants to execute the sale deed. But, defendant did not execute the sale deed. Therefore, the plaintiff-firm filed suit as stated above seeking the relief of the specific performance of the contract.
7. Pursuant to the suit summons, defendant appeared and filed written statement admitting the contentions with regard to the lease so renewed on 30.04.1992, so also, admitted about execution of the agreement of sale in favour of plaintiff to sell the scheduled property for a valuable consideration of Rs.39,75,750/-. Admitted that plaintiff-firm in part performance of the contract, has paid Rs.15,00,000/-. It is contended by the defendant that he got the suit schedule property converted from the Revenue Authorities dated 21.01.2002 and 15.02.2002. The said order was passed by the Tahasildar, Mangaluru. The said fact was
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 informed by the defendant to plaintiff-firm. The defendant is the title holder of the schedule property. As the plaintiff did not come forward to get the sale deed executed, defendant issued the quit notice to the plaintiff-firm calling upon it to vacate and surrender the schedule property. Till filing of a suit in O.S.No.644/2003, the partners of the plaintiff-firm have not issued any reply to the quit notice. It is contended that, as the defendant has already obtained the conversion order and informed the plaintiff, it is plaintiff firm which is guilty of committing the breech of the contract. The plaintiff firm was neither ready nor willing to perform its part of the contract by paying the balance consideration and get the sale deed executed. Under the agreement of sale, the time stipulated was one year to get the sale deed executed which was expired on 05.02.2002 itself. Till filing of a suit in O.S.No.644/2003, the plaintiffs did not come forward to get the sale deed executed. Thus, the reply given by the plaintiff-firm itself shows the pathetic approach of the plaintiff-firm and it is guilty of breach of agreement. It is contended that in view
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 of non - performance of its part of the contract by the plaintiff-firm, whatever the advance paid shall have to be adjusted towards the damages, so also, the arrears of rent. The claim of the plaintiff-firm to grant the relief of the specific performance is barred by law of limitation. As the performance of the agreement in a stipulated period expired on 05.02.2002, Section 55 of the Indian Limitation Act comes into operation. Thus, it is contended that absolutely the plaintiff-firm cannot claim any relief much less claimed in the plaint. Hence, it is prayed by the defendant in the said suit, to dismiss the suit of the plaintiff-firm.
8. As per the plaint averments in O.S.No.195/2007, it was filed by the plaintiff therein i.e., defendant in the earlier suit seeking the relief of recovery of the possession of the plaint schedule property together with mesne profits on the ground that, originally the schedule property was belonging to one Late. G. Somashekar Rao, i.e. the deceased father of the plaintiff.
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 The schedule property was granted on lease to this firm being the first defendant represented by its Managing Partner i.e., defendant No.2 as per the lease deed dated 14.06.1972. The contents of written statement in earlier suit are the plaint averment in O.S.No.195/2007 with regard to the lease, then entering into agreement of sale, renewal of the lease etc. It is contended that, though the plaintiff-firm in the suit agreed to sell the schedule property at the rate of Rs.85,000/- per cent subject to terms and conditions of the agreement of sale, but, the plaintiff firm did not come forward to get the sale deed executed. Therefore, as there was breach of contract, the defendants being the owner of the schedule property issued a quit notice dated 08.08.2003 terminating tenancy by giving 15 days time to quit and surrender the schedule property. But, the plaintiff-firm did not respond. It is contended that, the plaintiff-firm is liable to pay the mesne profits at the rate of Rs.1,000/- per month from the date of termination of the tenancy till surrendering of the
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 schedule property. Thus, it is prayed by the landlord- defendant to dismiss the suit.
9. To this the plaintiff firm appeared as they are defendant. It was defendant No.1, 3 to 7 filed written statement and during the pendency of the suit, defendant No.2 was reported to be dead. LR of second defendant filed independent written statement. It is contended by defendant Nos.1, 3 to 7 in their written statement that, there was no subsistence of any tenancy from the date of agreement of sale. Defendants are in peaceful and lawful possession of the schedule property as a prospective purchasers. Because of this agreement of sale so executed by the plaintiff in the present suit, there was end of land lord tendency relationship between the parties. It is submitted that, defendants being the prospective purchasers of the schedule property, they are still ready to perform their part of the contract. As the landlord was expected to get the conversion of the schedule property and get the clearance from the Income Tax Department,
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 there was a delay on the part of the landlord to execute the sale deed by receiving the balance consideration amount. The fault is on the part of the landlord that is the defendant in the suit. Defendant No.2(a) contends that the provisions of the Karnataka Rent Control Act,1999 were not applicable to facts of the case. There is no plea of exemption from this said Act. The plaintiff's suit has to be rejected. It is contended that, they are entitled to protect their possession over the schedule property. Further contended that, the suit of the plaintiff seeking possession and mesne profits is not maintainable in the eyes of law. The plaintiff is not entitled for any mesne profits. Thus, the defendants in O.S.No.195/2007 prayed to dismiss the suit.
10. Based upon the rival pleadings of both the parties, the learned trial Court framed issues and additional issues in O.S.No.195/2007 as under:
"Issues in O.S.NO.166/2006:
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1) Whether the plaintiff proves that the plaintiff is a registered partnership firm and plaintiffs are the partners?
2) Whether the plaintiff proves that they are in possession of the property in pursuance of the agreement for sale?
3) Whether the plaintiff proves that they are always ready and willing to perform their part of contract?
4) Whether the plaintiff is entitled for reliefs as prays for?
5) What Order or Decree?
Issues in O.S.NO. 195/2007:
1) Whether the plaintiff proves that the defendants are tenants?
2) Whether the defendants prove that under part performance of sale agreement there exists no landlord and tenant relationship and they are protected under Section 53A of Transfer of Property Act?
3) Whether the plaintiff proves that he has validly terminated the tenancy against all defendants by issuing notice?
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4) Whether the plaintiff is entitled for mesne profits /If so, to what rate per day?
5) Whether the valuation of the suit made for the purpose of Court fee and jurisdiction is correct and proper Court fee is paid?
6) What Order or decree?
Addl. Issue:
1) Whether the suit of the plaintiff is barred in
view of Sec.27 of the Karnataka Rent Act. 1999 as contended by the defendant No.2A?"
11. To prove the case so made out by the plaintiffs in O.S.No.166/2006, the plaintiff No.1 entered the witness box as PW.1 and got marked Exs.P1 to P36. The GPA holder of the defendant entered the witness box as DW.1 and got marked Exs.D1 to D4. Likewise, independent evidence is adduced in O.S.No.195/2007 by examining the GPA holder of the plaintiff in the said suit as PW.1 and Exs.P1 to P15 were marked. To prove the defence of the defendant in the said suit, defendant No.2 entered the witness box as DW.1 and got marked Ex.D1 and D2.
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12. The learned trial Court on hearing the arguments and on evaluation of the evidence, dismissed the suit in O.S.No.166/2006 and decreed the suit in O.S.No.195/2007 with a direction to the defendant in O.S.No.195/2007 to vacate and hand over the vacant possession of the suit schedule property to the plaintiff-Sri G. Ananth Rao within two months. Further, it is held that the plaintiff therein is entitled for the mesne profits at the rate of Rs.1,000/- per day together with the interest at the interest of 6% per annum from 06.09.2003 till handing over of the possession of the schedule property with no additional cost.
13. As stated supra, now being aggrieved by the respective judgment and decree passed in the aforesaid suits, these appeals are filed challenging the impugned common judgment.
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14. Trial Court records are secured. Heard the arguments.
15. Learned counsel for the plaintiff firm relying upon the pleadings and evidence, both oral and documentary, submits that, plaintiff-firm being the tenant under the defendant because of the offer made by the defendant agreed to purchase suit schedule property for a valuable consideration of Rs.39,73,750/- at the rate of Rs.85,000/- per cent. Having accepted the said offer, plaintiff paid an advance sale consideration amount of Rs.15,00,000/- in part performance of the contract by way of a cheque dated 05.02.2001 drawn on Syndicate Bank, Hampanakatta Branch, Mangalore. It was stipulated between both the parties that defendant has to execute the sale deed in respect of the schedule property within one year by bearing the cost of conveyance including the stamp duty, registration etc., It was agreed by the defendants to get the clearance certificate from the Income Tax as well as conversion order from the Revenue
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 Authorities. To that effect, a sale agreement came to be entered into on 5.2.2001. He would further submit that, as per the agreement between the plaintiff-firm and the late G.Somashekhar Rao, the plaintiff-firm was in possession of the suit schedule property as tenant by virtue of registered term lease dated 14.6.1972 for a period of 20 years which expired on 30.4.1992, subsequently, it was renewed for a period of five years again with mutual consent. By virtue of said agreement of sale dated 5.2.2001, plaintiff - firm remained in possession of the schedule property as an intending purchaser. Therefore, as agreed between both the parties, the plaintiff did not pay any rent because of the said agreement of sale. He would further submit that, right from the date of agreement even till this day, plaintiff is ever ready and willing to perform his part of contract by tendering balance consideration amount but, because of lapse on the part of the defendants to get the conversion from the revenue authorities under the Land Revenue Act as well as has failed to get the clearance from the Income Tax Department, it was defendants who went on
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 postponing to get the clearance and conversion and continued his promise to comply the terms of the agreement.
16. As the plaintiff continued in possession in good faith, he would submit that, to the utter surprise of the plaintiff, defendant terminated the tenancy of the plaintiff by issuing a quit notice dated 8.8.2003 and thereafter, filed a suit for possession before the III Additional Civil Judge (Jr.Dn), Mangalore in O.S.No.644/2003 and also claimed mesne profits. He would submit that, because of entering into agreement of sale in between plaintiff-firm and defendants as on the date of the agreement itself, the jural relationship of landlord and tenant came to an end and plaintiff became intending purchaser. He would submit, because of breech of agreement committed by defendant, he has got a protection under Section 53-A of the Transfer of Property Act. He fairly admits that, in the said suit so filed by the defendants, the plaintiff has not pleaded any counter claim. He would submit that, trial
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 Court has not appreciated the evidence lead by the plaintiff-firm to prove its readiness and willingness to perform the contract on its part and has wrongly dismissed the suit. He would submit that, the findings of the trial Court are quite erroneous and because of such a finding of the trial Court, very rights of the plaintiff to claim the relief so claimed in the plaint are frustrated. He would submit that, most of the factual features so pleaded by the plaintiffs are admitted by the defendants. The only grievance of the defendants is that, it is plaintiff who committed breach of the contract and not the defendant. He would submit that, this defence of the defendant is not proved in accordance with law. In support of his submissions, as stated supra he relied upon pleadings, both oral and documentary evidence and also relied upon the following judgments:
i. "2006 (6) SCC 351- Indian Financial Association of Seventh Day Adventists V/s Unneerikutty and Another Μ.Α.
ii. 2008 (11) SCC 45- Silvey and Others V/s Arun Varghese and Another
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 iii. 2011(1) SCC 429- J.P.Builders and Another V/s Ramadas Rao and Another iv. R.F.A. 4132/2012 -D.D.11.01.2017- Maruti s/o Fakirappa Chivagol V/s Shri. Shrishailappa and others v. 1979 (4) SCC 393- Prakash Chandra V/s Angadlal and Others vi. ILR 1998 KAR 3230 (FB)- Narasimha Setty V/s Padma Setty vii. 2002 (3) SCC 676- Shrimant Shamrao Suryavanshi and Another V/s Pralhad Bhairoba Suryavanhi (Dead) By LRs. and Another viii. 2004 (5) SCC 88- Mahadeva and Others V/s Tanabai ix. 2004(8) SCC 614- Ram Bhan N. Gajre V/s Narayan Bapuji Dhotre x. AIR 1975 SC 824- Roshan Lal and Others V/s Mohan Singh Oberai xi. 2002 (5) SCC 481 -Nirmala Anand V/s Advend Corporation Pvt.Ltd.
xii. 2008 (12) SCC 67- Pratap Lakshman Muchandi and Others V/s Shamlal Uddavadas Wadhwa xiii. 2015(1) SCC 597 -K.Prakash V/s B. R.Sampath Kumar xiv. 2004 (8) SCC 689-Swarnam Ramachandran V/s Aravakkod Chakungal Jayapalan xv. AIR 1949 Madras 265- Arjuna Mudaliar V/s Laxmi Ammal and Others".
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17. In addition to the grounds urged in the appeal memo, by relying upon the aforesaid evidence lead by the parties, he craves to set aside the impugned judgment and prayed to decree the suit for specific performance of contract and also prayed to dismiss the suit seeking possession and mesne profits.
18. Per contra, the learned counsel for the defendants refuting all the submissions made by the learned counsel for the plaintiffs submits that though most of the factual features are admitted by the defendants as well as his LRs, as per the agreement of sale was entered into on 05.02.2001, the defendant has complied the terms and condition of the agreement. He got the conversion order, clearance from the Income Tax Department and orally informed the plaintiff that, they have complied the terms and conditions of the agreement. He would submit that, only after issuance of the quit notice dated 08.08.2003 terminating the tenancy of the plaintiff, the plaintiff became aware and thereafter, filed written
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 statement to the suit filed by the defendant seeking possession and mesne profits but has not pleaded any counter claim seeking the relief of a specific performance and ventured to file a separate suit. The plaintiff was never, ever ready and willing to perform his part of the contract by sending any notice. He would submit that, he issued a reply notice to the quit notice dated 08.08.2003 and there, he had expressed his readiness and willingness to perform the contract without any basis. The plaintiff had not brought to the notice of the defendant about his financial capacity, so also, his preponderance to get the sale deed executed. He would submit that, conduct of the plaintiff in not expressing his readiness and willingness even after expiry of one year, itself shows that, it was not intending to purchase the property at any point of time and simply postponed its expression of readiness and willingness. He would submit that, as a matter of course, he issued a reply notice and then expressed his willingness to perform its part of the contract. He would submit that, the learned trial Court has rightly based upon the title of
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 the defendants, decreed the suit of the defendant for possession, mesne profits and dismissed the suit of the plaintiff seeking relief of specific performance. He too relied upon both oral and documentary evidence lead by the parties to both the suits and prays to dismiss the appeal of the appellant/defendant.
19. We have given our anxious consideration to the argument of both the side and perused the record.
20. In view of rival submissions of both the side, the points that would arise for our consideration are:
1) "Whether the plaintiff-firm proves its readiness and willingness to perform its part of contract and get the sale deed executed as prayed?
2) If so, whether the trial Court has committed any factual and legal error in refusing such a relief to the plaintiff-firm while dismissing the suit?
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023
3) Whether the trial Court has committed any error in decreeing the suit of the defendants in granting relief of possession and mesne profit and thereby it requires interference by this Court?"
Points Nos.1 to 3 are discussed together.
21. These three points require common discussion as they are inextricably mixed up with each other for the simple reason that, parties to the litigation are same, pleadings in both the suits are one at the same, though prayers are different. That means, the findings to be given on one point have got a direct bearing on another point.
22. As narrated in the foregoing paragraphs, plaintiff-firm came in possession as a tenant of the schedule property by virtue of the registered sale deed dated 14.06.1972 for a period of 20 years, which expired on 30.04.1992 and thereafter, it was renewed with mutual understanding for a further period of five years. This fact
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 is fairly admitted by the defendant. It is also admitted that, defendants proposed to sell the schedule property to the plaintiff-firm for a valuable consideration of Rs.39,73,750/- at the rate of Rs.85,000/- per cent. The plaintiff having accepted the offer, agreed for the said consideration amount and paid Rs.15,00,000/- as an advance for the said consideration in part performance of the contract by issuing the cheque dated 5.2.2001 drawn on Syndicate Bank, Hampanakatta Branch, Mangalore which was encashed by the defendants. These facts are also admitted by the defendants.
23. The only grievance of the plaintiff-firm is that, though the defendants were expected to get the conversion and clearance from the Income Tax Department from the competent authorities, not informed the plaintiff-firm to that effect. Plaintiff waited for the response from the defendant though it was ready and willing to perform the contract at any point of time. Therefore, now the defendant cannot find any fault with
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 the plaintiff. He would submit that even till date, the plaintiff is ready and willing to perform his part of the contract, but, though the defendant knew about the readiness and willingness of the plaintiff, filed a false suit seeking possession based on title so as to deprive the rights of the plaintiff to get the relief of specific performance of the contract.
24. Now in view of these factual aspects, the only moot point that is to be decided in this case is:
Readiness and willingness
25. Section 16 of the Specific Relief Act, 1963 provides for personal bars to relief. This Provision reads as under:
"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
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 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."
26. Among the 3 clauses stated supra, now we are very much concerned about clause (c). "Readiness and willingness" as enshrined in clause (c) which was not present in the old Act of 1877. However, it was later
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 inserted with a recommendation of the 9th Law Commission Report. This clause provides that, the person seeking specific performance must prove that he has performed or ready and willing to perform the essential terms of the contract which has to be performed by him.
27. On scrupulous reading of this provision, the words "ready" and "willing" imply that, the person was prepared to carry out the terms of the contract. The distinction between "readiness'' and ''willingness" is that the former refers to financial capacity and latter to the conduct of the plaintiff wanting to perform. Generally, as held in the catena of judgments the Hon'ble Apex Court and co-ordinate benches of this Court, readiness is backed by willingness. Thus, is held in N.P.Thirugnanam (D) By Lrs. v/s Dr.R.Jagan Mohan Rao and Ors reported in AIR 1996 SC 116 and P.D'souza v/s Shondrilo Naidu reported in AIR 2004 SC 4472 that,
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 "Section 16(c) of the Act envisages that 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 alongwith other attending circumstances. 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
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 ready and was always ready and willing to perform his part of contract."
28. Law says that there is no straight jacket formula laid down in this behalf and it depends upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement of sale. In this regard, the Hon'ble Apex Court in R.C.Chandiok and Another vs. Chuni Lal Sabharwal and Others reported in AIR 1971 SC 1238 has considered this fact of "Readiness and willingness cannot be treated as a straight jacket formula. These have to be determined from the entirety of facts and circumstances relevant to the intention and conduct of the party concerned."
29. It is settled law that, even in the absence of specific plea by the opposite party, it is the mandate of the statute that the plaintiff has to comply with Section 16(c) of the Specific Performance Act and when there is non-
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 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.
30. In the light of the aforesaid principles, let us consider whether the plaintiff has established his case for decree for specific performance or otherwise.
31. The learned counsel for the plaintiff vehemently contended that, plaintiff has proved its case to grant the decree for specific performance of contract and hence, the plaintiff's suit has to be decreed. He would submit that, Ex.P1 the agreement of sale is proved in accordance with law. Thus plaintiff has fulfilled the obligations under the said agreement of sale Ex.P1.
32. So far as agreement of sale and its execution as on 5.1.2001 is concerned, it is not in dispute. PW.1 being
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 the partner of the plaintiff-firm by name K.Rajavarma Ballal has reiterated the plaint averments. He speaks about the entering into partnership so also entering into agreement with the defendant in his chief examination as well as in the cross-examination. It is elicited that, the plaintiff had obtained the legal opinion to know whether the defendant had any title and saleable interest to sell the suit schedule property then only the plaintiff would enter into agreement of sale. It is stated by him that, after agreement of sale, it was requested to the scribe to incorporate about non-payment of rent in respect of the schedule property as they became the intending purchasers but, admits that the said agreement of sale Ex.P1 does not have such a recital with regard to the non- payment of rent. The fact which is admitted is that plaintiff-firm was in possession initially as a tenant for a period of 20 years and thereafter it was extended for a period of five years and then as per Ex.P1 they became intending purchasers. To prove the fact of non-payment of rent or otherwise, Ex.P1 is very much silent. It is the case
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 of the defendant that, plaintiff has committed default in payment of rent. It was not informed to any of the revenue authorities by the plaintiff that they are in possession of schedule property by virtue of Ex.P1. It is stated that, plaintiff-firm had submitted an application permitting them to establish the petrol bunk in the suit schedule property. The plaintiff has not enquired with the defendant as to what was the expenditure to be borne for conversion of schedule property into non-agriculture. This PW.1 categorically admits that as per the agreement of sale, plaintiff had to pay the balance consideration amount as per the condition so stipulated and no money was paid as agreed by the plaintiff. For non-payment of the said amount, the explanation of PW.1 is that, as the defendant did not provided the documents, the plaintiff did not pay the balance consideration. He admits that, as per the condition so stipulated, no request was made to the defendant to receive the balance consideration amount and execute the sale deed in writing. This PW.1 further admits categorically that, prior to issuance of notice as per
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 Ex.P9, no attempt was made by the plaintiff requesting the defendant to receive the balance consideration amount and execute the sale deed and no such request was made in writing. He admits that, after termination of tenancy, the notice was sent to the defendant as per Ex.P9.Further, he states that, now at the time of giving his evidence, there was no provision for taking clearance certificate from the IT Department. He denied a suggestion that it is the plaintiff-firm who has committed the breach of contract. Even after filing the suit, no attempt was made by the plaintiff to deposit any money and even after termination of the tenancy. According to PW.1, defendant has terminated the tenancy of the plaintiff.
33. To show that plaintiff had financial capacity, in the cross-examination dated 13.12.2007 directed to PW.1, he states that, at Madras there is a Hotel called Ashoka Pvt.Ltd., in which the plaintiff has got share to the extent of 3 lakhs as per Ex.P13, so also invested Rs.15,50,000/- with Balram Tourist Hotel Pvt.Ltd., as shown in Ex.P14 so
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 also invested Rs.15,47,154/- with Tourist Hotel Pvt.Ltd., as per Ex.P15 and further states that there is a deposit of 17,75,309/- with Tourist Hotel invested by the plaintiff firm as per Ex.P16 and this fact is known to the Managing Director of plaintiff-firm. But, the said Managing Director of the firm is not examined. Mere production of these documents about the investments so made do not mean that, the plaintiff-firm has got financial capacity to pay the balance consideration amount. PW.1 has also produced Ex.P17 to show about investment of Rs.16,10,745/- with Tourist Hotel on 31.3.2001 and also plaintiff No.6 has deposited Rs.4 lakhs on 31.3.2001 as stated in Ex.P18. Likewise, plaintiff No.6 has deposited Rs.4,15,676/- as per Ex.P19 in his name so also Rs.4 lakhs on 31.3.2000 as recited in Ex.P20. He further states about deposit of 4 lakhs as per Ex.P21. It is stated that, plaintiff-firm could withdraw such amount so stated at any time. But, there was no expression or intentions shown by the plaintiff-firm by informing the defendant that, these are the amounts which are in deposit and plaintiff can very well withdraw
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 the said deposits and pay the balance consideration amount. The conduct of the plaintiff plays an important role to prove the factum of readiness and willingness to perform its part of contract. PW.1 further states that, plaintiff-firm is running a petrol bunk at Kankanady, Mangalore and an application is already filed for shifting the said petrol bunk addressing a letter to the Sr.Regional Manager HPC Ltd., as per Ex.P26. What action was taken on that letter, whether permission was granted to shift the same is not stated by PW.1. So many documents are produced given by the Politicians and Officers of the various Departments.
34. It has come in the evidence of PW.1 that, to run the partnership business and also to comply the personal obligations, the partners of the firm had to use their personal money also. According to him, he also has contributed his own money and utilized the money from various sources for the purpose of complying the obligations of the partnership firm. There are instances of
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 advancing money by partnership firm. If that is so, what made the plaintiff-firm to keep mum for a year without expressing their willingness to perform their part of contract and even after that and what made them to wait till termination of tenancy and then, express their willingness to perform their part of contract is not explained by this PW.1. Thus, throughout the evidence of PW.1, there is no proper and acceptable evidence to prove that, the plaintiff-firm was ever ready and willing to perform its part of contract. Most of the documents so produced by the plaintiff are not denied by the defendants.
35. DW.1 the Power of Attorney of defendant being his son had come before the trial Court and reiterated the contents of the written statement and he emphasized that, it was plaintiff who defaulted in payment of rents, so also plaintiff has committed breach of contract. Therefore, as plaintiff has failed to perform its part of contract and was squatting on the property without payment of any rent, the defendant issued a notice terminating the tenancy. He
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 specifically states that, defendant had not committed any breach of contract. The defendant also relied upon various documents with regard to the lease deed. He admits that, after the agreement of sale, when the defendant received the cheque for Rs.15 lakhs, it was encashed by the defendant. He further states that, his father did not inform the plaintiff about getting the conversion etc., in writing. Further, he states that, even after agreement of sale, the plaintiff was in possession of the schedule property and even prior to that, it was using the same. He admits that, his father permitted the plaintiff to put up the construction in the schedule property during the lease period and plaintiff had retained the said constructions which were very much available and they were vacant. He being the son of the defendant has come before the Court and stated about the so called default being committed by plaintiff-firm. This DW.1 admits that, the Ballal family is having so many business concerns so also have possessed so many landed properties. It is admitted that, the plaintiff firm has got properties wherein the Vijaya Clinic is being
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 run in the adjacent building. The said property was owned by the defendant and it was sold. He denied other suggestions so directed to him.
36. The learned counsel for the plaintiff much relies upon the cross-examination directed to this DW.1 that, as defendant did not provide the survey sketch and also other title documents so also conversion order, there is a delay but, this DW.1 denies it.
37. On scrupulous reading of the evidence spoken to by PW.1 and DW.1 and the documents so produced by both the side, though PW.1 reiterated and in fact asserted that, plaintiff was ever ready and willing to perform its part of contract and was ready with the consideration amount but, in view of the conduct of the plaintiff with regard to the readiness and willingness, apart from specific plea in the plaint, no evidence is placed on record through PW.1 about financial capacity and withdrawal of the money from the various business concerns belonging
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 to family of Ballal. Plaintiff has not informed it is ever ready and willing to perform its part of contract. In other words, the assertion of plaintiff firm remained as assertion and no correspondence was made by plaintiff showing its ready and willingness till receipt of termination notice. Therefore, it can very well be stated that, the mandate so provided under Section 16(c) of Specific Relief Act is not complied by the plaintiff.
38. The defendant has demonstrated by placing oral and documentary evidence that, though as per Ex.P1 he has received Rs.15 lakhs advance on 5.2.2001, but, pointed out that, till receipt of the termination notice, plaintiff did not wake up and thereafter, only, had come forward stating that, plaintiff is ever ready. In order to prove that, plaintiff had sufficient means of finance, though the plaintiff has produced certain documents stated supra, but, willingness of the said concerns to permit the plaintiff-firm to withdraw the money and part with the funds, there is no evidence placed on record. Therefore, if
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 we analyse the said documents, they are only the documents showing the deposits and investment and concerned head of business as stated by PW.1, have not furnished any consent letter. That means, except the self- serving evidence of PW.1 with regard to sufficient means of finance, absolutely there is no evidence as to any demand made by the plaintiff to the defendant to receive the balance consideration amount and execute the sale deed. As stated supra, though the defendant admits about receipt of Rs.15 lakhs but, the very conduct of the plaintiff in delaying its action to get the specific performance into action, there is no evidence though the plaintiff is endowed with so called means to pay the sale consideration.
39. On the other hand, the defendant had issued a termination notice, as per the documents produced, has collected the documents from the revenue authorities about conversion of the property to non-agriculture, so also had obtained clearance certificate. DW.1 states that,
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 orally it was informed to the plaintiff. This fact is not properly denied by the plaintiff. As rightly pointed out by the trial Court, it is not clear as to, why the other persons who are responsible in entering into agreement avoided to enter the witness box is not explained. The plaintiff had failed to lead oral evidence of an independent witness, so also other partners in support of its claim. Though plaintiff asserts that defendant admits about the agreement of sale but, it is incorrect and unacceptable that the plaintiff was ever ready to perform the part of the contract. Therefore, as rightly submitted by the counsel for the defendant, the plaintiff has not proved about the readiness and willingness to perform its part of the contract.
40. Though the learned counsel cited number of judgments, each case is to be decided based upon the facts of each case. With great respect to the principles laid down, we do not feel that, they are applicable to the facts of this case in view of the peculiar facts and circumstance brought on record by both the parties. So far as grant of
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 relief of specific performance is concerned, it is the discretion of the Court. Learned counsel for the plaintiff- firm submits that, as the discretion is vested with the Court to grant the relief of specific performance, this Court can very well exercise its discretion and grant such a relief. He would submit that ordinarily the rule is that, specific performance should be granted. It ought to be denied only when equitable consideration for its refusal and the circumstances show that, damages would constitute an adequate relief. In support of his submission, learned counsel for the plaintiff Sri Chandranath Ariga relied upon the judgment of Hon'ble Apex Court in Prakash Chandra vs. Angadlal and others reported in (1979) 4 SCC 393. In the said judgment, at para.9, it is held that based upon the equitable considerations with regard to the refusal of such a relief can be made by the Court depending upon the circumstances and held that "the ordinary rule is that, specific performance should be granted."
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41. In the present case, the conduct of the plaintiff if scrupulously perused, right from the date of agreement of sale, it shows that plaintiff was not diligent in enforcing the contract. So far as enforcement of the contract is concerned, the law is that, existence of a contract is sine qua non or the grant of relief of a specific performance. The entire provisions of the Specific Relief Act contained in Chapter-II refer to the contract which can be specifically enforced or otherwise. As per the provisions of Section 2(h) of the Contract Act "an agreement enforceable by law is a contract". Even an oral agreement can be valid and enforceable contract. Therefore, in the strict sense, it is not essential that a contract must be in writing. Where the parties contemplate a writing to complete the contract or when the contract is required by law or otherwise to be in writing, it will be necessary that the contract is reduced to writing. Further, where the specific terms have been agreed upon and reduced into writing, the mere fact that it is stated that a formal contract will be executed does not render the writing in the first instance to be of no avail.
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 These are certain general principles regarding formation of contracts. Thus, the relief of specific performance is a discretionary relief. The Apex Court in Smt.Mayawanti vs. Smt.Kaushalya Devi reported in (1990) 3 SCC 1 has explained about the discretion by relying upon the observations of the learned author "Fry in his Specific Performance, 6th Edn. P. 19,it is said, as per the learned Author, hence the discretion is said to be not arbitrary or capricious but judicial; "hence, also, if the contract has been entered into by a competent party, and is unobjectionable in its nature and circumstances, specific performance is as much a matter of course, and therefore of right, as are damages."
42. In this case, as per the agreement between both the parties, the defendant had to obtain the conversion order from the competent authorities so also obtain the clearance certificate from the Income Tax Department.
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023
43. The plaintiff-firm has not taken any steps or attempted to get such a conversion though an application was filed by the defendant. In one of the judgments of the Bombay High Court in A.H. Mistry and Co. v. Awadh Narayan Singh Shiv Nayak Singh, reported in 2010 SCC OnLine Bom 1009, the learned Single Judge observed that, "a judicial notice is required to be taken of the fact that, the defendant/vendors would not be expected to pursue their application for permission of the competent authority once they agreed to sell the suit land to the plaintiff".
44. In this case also, the plaintiff has not pursued the said application though the defendant had filed the application seeking conversion and clearance from the IT Department. That means, the plaintiff would be expected to do the ministerial acts. This is evident from the clauses mentioned in the agreement that the defendant had agreed to get the conversion as well as clearance from the revenue authorities and Income Tax Department and it
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 was within the knowledge of the plaintiff. When the plaintiff has not attempted to do any ministerial acts, it was not to be considered as default on the part of the vendor i.e. defendant. Therefore, as held in the catena of judgments of the co-ordinate Benches of this Court as well as Apex Court, in a case of present nature, when no attempt was made by the plaintiffs to enforce the contract and opened their eyes only when the defendant issued the notice of termination of the tenancy itself, shows the conduct of the plaintiff. From the cross-examination, it is however clear that, the only hitch on the part of the defendant in performing the agreement was, plaintiff has not come forward and has not taken any steps though the plaintiff was in possession of the property. That means, the plaintiff has not come forward to pay the balance consideration amount though states in the evidence about investments made by it at various business concerns. It is clear from the evidence that, though the defendant was fully aware of existence of the contract but, plaintiff did not come forward. The defendant did not dispute the
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 existence of contract, as such. Therefore, the Court cannot exercise its discretion to grant a decree. When the defendant had issued the notice of termination of the tenancy, he had expressed his intention and must have been under the impression that, he could get out of the deal by terminating the tenancy of the plaintiff and for that reason, he had issued the quit notice which was duly received by the plaintiff. Thereafter, issued the reply notice expressing its intention to pay the balance consideration amount and get the sale deed registered. The very issuance of the notice by the defendant amounts to expression of intention of the defendant to wriggle out from the said contract to sell the suit property to the plaintiff. That means, the intention of issuing the quit notice itself amounts to coming out of the deal. In this case, the time was essence of the contract. Within one year, the plaintiff had to pay the balance consideration amount and register. But, no attempts were made by the plaintiff till receipt of the quit notice. Therefore, it can never be stated that, the plaintiff has made out acceptable
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 grounds so as to exercise discretion and grant relief as claimed by it. Therefore, as a matter of right, plaintiff is not entitled for the discretionary relief of specific performance.
About the original suit filed by the defendant seeking possession and mesne profits
45. It is relevant to note that, much prior to filing of the suit by the plaintiff, the defendant filed a suit for possession in OS No.644/2003 on the file of III Addl. District and Sessions Judge, Mangaluru which was subsequently renumbered after transfer to the Sr. Civil Judge, renumbered as OS No.195/2007. The plaintiff-firm filed the suit seeking relief of specific performance of a contract before the Civil Judge, Mangaluru in OS No.166/2006. That, means after three years of filing the suit by the defendants, the plaintiff-firm filed the aforesaid suit seeking the relief of specific performance. This
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 conduct of the plaintiff shows that he was not inclined to enforce the said agreement of sale.
46. We have already adverted to the facts leading to the filing of two civil suits and two regular first appeals by the parties to the litigation. It is not in dispute that in both the suits as well as appeals, the facts are one and the same. It is also not in dispute that the subject matter of lis and property is one and the same. As both the suits are decided by common judgment based upon the facts pleaded, now the question arises as to whether defendant is entitled for possession of the schedule property. When jural relationship of plaintiff and defendant is admitted prior to the agreement of sale and even after agreement of sale, the plaintiff has not come forward to enforce the agreement of sale i.e. even after lapse of one year, though information was given to the plaintiff about getting conversion order as well as clearance from the Income Tax Department. It shows that, the defendant had issued the quit notice understanding the conduct of the plaintiff that,
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 plaintiff-firm was not ready to enforce the agreement of sale and has not paid any balance consideration amount.
47. The argument is advanced by the counsel for the plaintiff that even till date, plaintiff is ready to pay the balance consideration amount and get the sale deed registered, as discussed above, the plaintiff-firm has failed to prove the continuous and readiness and willingness to get the sale deed executed which is a condition precedent to grant the relief of specific performance as held by the Apex Court in various judgments. It is the plaintiff-firm who has to prove its readiness and willingness in a suit of present nature and this fact must be proved. Even the plaintiff has to prove that, he had capacity to pay the balance consideration amount. Simply narrating the investments with various business concerns is not sufficient. Therefore, as rightly observed by the learned trial Court, though the suit of the plaintiff is not barred by law of limitation as per the events that have taken place but, the Court cannot exercise its discretion and grant the
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 relief. The defendant being the owner of the schedule property had issued the quit notice which was received by the plaintiff-firm without any demur and thereafter filed the suit seeking the relief of specific performance disentitled the plaintiff to remain in possession as an intending purchaser or a tenant. When quit notice is issued, as per the provisions of 106 of Transfer of Property Act, and when the plaintiff admits the title of the defendant, so also tenancy prior to the agreement of sale, the only option for the defendant is to seek possession, which is rightly granted by the trial Court. Now the plaintiff cannot contend that, by virtue of provisions of Section 53- A of Transfer of Property Act, it be continued his possession as an intending purchaser and it shall be protected under the said provision. When the plaintiff has utterly failed to prove about grant of relief of specific performance, its possession would be `tenant holding over' after the expiry of the lease period. When agreement of sale is not enforced, the Court cannot exercise the discretion to grant the relief. Then the only
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 option for the plaintiff-firm is to vacate and surrender the suit schedule property to the defendant as rightly held by the Court below.
48. So far as cost and mesne profits is concerned, it is not the case of the plaintiff - firm that, it has tendered any rent as it was paid prior to the agreement of sale. The only grievance of the plaintiff is that, it was an intending purchaser and Section 53-A of Transfer of Property Act is applicable and there was an oral agreement not to pay any rent. But, this fact is denied by DW.1. No documentary evidence is produced about tendering of any amount by the plaintiff after 5.2.2001. From that date onwards, the plaintiff had made use of the schedule property without making any payment to the defendant. According to plaintiff, there was establishment of the petrol bunk in the schedule property. If that is so, for this use and occupation of schedule property by the plaintiff-firm, it has to compensate the defendant right from 5.2.2001 till it vacates and surrender the schedule property. In a case of present nature, it is just and proper to award mesne
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NC: 2025:KHC:7916-DB RFA No. 1373 of 2009 C/W RFA No. 1634 of 2023 profits as well as cost. The learned trial Court had granted the relief with regard to the mesne profits with interest at the rate of 6% from 6.9.2003 till handing over of the vacant possession of the suit schedule property and of refund of the said amount along with the mesne profits. We do not find any factual or legal error committed by the trial Court in passing such a decree. Therefore, the points raised supra have to be answered against the plaintiff-firm and in favour of the defendant. Consequentially both the appeals filed by the plaintiff-firm are liable to be dismissed with no orders as to costs.
49. Resultantly, we pass the following:
ORDER i. RFA No.1373/2009 and RFA No.1634/2023 are dismissed with no order as to costs.
ii. The common judgment dated
31.8.2009 passed in OS No.166/2006
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NC: 2025:KHC:7916-DB
RFA No. 1373 of 2009
C/W RFA No. 1634 of 2023
and 195/2007 by the II Addl.Civil
Judge Sr.Division Mangaluru DK are
hereby confirmed.
iii. Send back the trial Court records
along with a copy of this judgment
forthwith.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(RAMACHANDRA D. HUDDAR)
JUDGE
List No.: 19 Sl No.: 2