Bangalore District Court
Sri.N.Shankar vs Sri. Ramadas on 11 April, 2023
KABC010141832014
IN THE COURT OF THE XI ADDL. CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY (CCH-8)
PRESENT
SRI SANTHOSHKUMAR SHETTY N., B.Com., LL.M.
XI Addl. City Civil & Sessions Judge,
Bengaluru City.
DATED THIS THE 11 th DAY OF APRIL, 2023
O.S.No.5193/2014
Plaintiffs:- 1. Sri.N.Shankar,
S/o.Sri.Narayana Rao,
Age: about 45 years,
Residing at "Om Sai Residency,"
Flat No.104, 1st Block,
Uttarahalli Main Road,
Opposite to Corporation Bank,
Bangalore - 560 061.
2. Sri.N.Raju,
S/o.Sri.Narasimhaiah,
Age: about 44 years,
Residing at No.126, 2nd Main,
K.K.Layout, Malath Halli,
Bangalore - 560 072.
(By Adv. Sri.Prithveesh M.K.)
Vs.
2 O.S.No.5193/2014
Defendants:- 1. Sri. Ramadas,
S/o.late K.M.Buddanna,
Aged: about 54 years,
R/at No.733/2/533/96/3/953,
Buddanna Industrial Estate,
Kengeri Village, Kengeri Hobli,
Bangalore South Taluk.
2. Smt.M.Rekha,
W/o.Sri. Ramadas,
Aged: about 49 years,
R/at No.733/2/533/96/3/953,
Buddanna Industrial Estate,
Kengeri Village, Kengeri Hobli,
Bangalore South Taluk.
3. Sri. Manoj Gowda
@ Manoj Kumar,
S/o.Sri.Ramadas,
Aged: about 21 years,
R/at No.733/2/533/96/3/953,
Buddanna Industrial Estate,
Kengeri Village, Kengeri Hobli,
Bangalore South Taluk.
4. Kum.Yashaswini
@ Yashawini Gowda,
D/o.Sri.Ramadas,
Aged about 19 years,
R/at No.733/2/533/96/3/953,
Buddanna Industrial Estate,
Kengeri Village, Kengeri Hobli,
Bangalore South Taluk.
(D1 to D3 by Adv. Sri.Pradeep J.S.
D4 by Adv. Sri.S.G.Chakrapani)
Date of institution of the suit : 09.07.2014
Nature of the suit : Specific Performance of
Contract
3 O.S.No.5193/2014
Date of commencement of : 16.09.2017
Recording of the evidence
Date on which the Judgment : 11.04.2023
was pronounced
Total Duration : Years Months Days
08 09 02
XI ADDL., CITY CIVIL & SESSIONS JUDGE,
BENGALURU CITY.
JUDGMENT
This is a suit filed by the plaintiffs for the relief of specific performance of contract to direct the defendants to execute the Sale Deed in their favour in terms of Registered Sale Agreement dated 30.03.2012 by receiving the balance sale consideration of Rs.72,90,000/- and for permanent injunction to restrain the defendants or anybody claiming through them from creating any charge over the suit schedule property and for the cost of the suit.
2. The brief facts of the case of the plaintiffs is that, the defendants No.1 to 4 are the son, daughter-in-law and grand children of late K.M.Buddanna, who was the owner of the suit schedule property bearing Sy.No.96/3/A, measuring 75 yards x 27 yards, situated at Kengeri Village, Bangalore South Taluk. The said property was purchased by him under a Registered Sale Deed dated 17.06.1966 and it was his self acquired property. During his life time, K.M.Buddanna got converted the suit schedule 4 O.S.No.5193/2014 property for industrial purpose as per Official Memorandum dated 30.08.1967. On 26.04.1987, he died and thereby the defendants succeeded to his estate, including the suit schedule property. The defendants got changed the khatha in the name of defendant No.1. The defendants, to meet their family legal necessities expressed their desire to sell the suit schedule property. The plaintiffs were in search of suitable accommodation to put up an industrial unit. Accordingly, the defendants approached them and the plaintiffs agreed to purchase the suit schedule property for valuable consideration of rupees one crore fifteen lakhs and defendants No.1, 3 and 4 executed the Registered Sale Agreement on 30.03.2012 and in all, they received the sum of Rs.42,10,000/-. Further, they requested the plaintiffs to treat the said Agreement deemed to have been signed and executed by defendant No.2. The defendants promised to comply the other formalities within six months. Hence, defendant No.2 was not made as parties to the Agreement. However, for the aforesaid reasons, she is proper, just, necessary and interested party. Even after lapse of six months, the defendants neither produced the original documents of title nor shown any inclination to perform their part of obligation, though the plaintiffs were ready and willing to perform their part of the contract. When things stood thus, on 24.06.2014, at about 6;30 p.m., some strangers came to the plaintiffs and enquired about their right over the suit schedule property, on the pretext that, the defendants are requesting them to purchase the property. The plaintiffs have explained them in detail about the execution and subsistence of Registered Sale 5 O.S.No.5193/2014 Agreement in their favour. Hence the plaintiffs approached the jurisdictional police, but they did not entertain the complaint and advised them to approach the Civil Court. If the defendants alienated the suit schedule property and succeeded in their attempt, the plaintiffs will be deprived of their legitimate right. In view of the urgency in the matter, the plaintiffs had no occasion to cause legal notice to the defendants and thereby filed this suit for the aforesaid reliefs.
3. In response to the suit summons, the defendants No.1 to 4 appeared through their counsel. The defendant No.1 filed his written statement and taken contention that, the plaintiffs have filed this suit based on the created, concocted, fabricated and unenforceable document. The suit schedule property is the Joint Family Property of Buddanna. Hence he alone has no manner of right, title or interest to alienate or enter into any Agreement of Sale. The sital area of the property measures 18,225 sq. feet, consisting of 100 squares of RCC roofed building. As on the date of alleged Agreement, the Guidance Value fixed by the Government was Rs.1,200/- per sq. feet and the Government rate in respect of the sital value was Rs.2,18,70,000/- and value of the building is more than rupees eight crores. Accordingly, the market value of the property as on the date of alleged Agreement was more than rupees fifteen crores and there was no need to the defendants to sell the property for throw away price. The alleged transaction is only a financial transaction for a short gap arrangement and the defendant No.1 has received the amount 6 O.S.No.5193/2014 towards loan and as security, the plaintiffs have obtained the Sale Agreement. Though the defendant No.1 offered to repay the amount, the plaintiffs refused to receive the same and filed this frivolous suit against them. As per Section 8 of the Hindu Minority and Guardianship Act, no property belongs to the minor shall be alienated without prior permission of the court. As per Hindu Minority and Guardianship Act, the alleged Agreement opposed to public policy. Since the Agreement amounts to distress sale and it is not entered on the market value existing as on the date of Agreement, the alleged Agreement is unenforceable in the eye of law. Hence amongst other grounds, he prayed prayed for dismissal of the suit with cost.
4. The defendants No.2 to 4 have filed their common written statement and taken contention that, as on the date of alleged Agreement, the defendants No.3 and 4 were minors, neither the plaintiffs nor defendant No.1 obtained the permission of the Court to enter into the Agreement with respect of the property of minors. As such, alleged Agreement is nullity in the eye of law. The said Buddanna married one Smt.Thimmakka and in the wedlock, they are having children by name Smt.Lakshmamma, Sri.Ramadas and Smt.Ramakka. As the suit schedule property is the Joint Family Property of Buddanna and there was no division amongst his legal heirs, the defendant No.1 has no right, title or interest to alienate the property or enter into any Agreement of Sale in respect of the said property. Though the defendant No.3 made as a party to the Agreement and obtained his signatures, no consideration was paid 7 O.S.No.5193/2014 to him. Hence there is no valid Agreement between them. Further, the alleged transfer of the amount by RTGs to the account of defendant No.1 cannot be construed as a valid acceptance of sale consideration and his consent to sell the suit schedule property. The defendants No.3 and 4 were minors as on the date of alleged Agreement. Therefore this suit is not maintainable. The averments made in the plaint clearly establish that, the defendants have agreed to furnish the documents of title referred to in the alleged Agreement. No prudent person will enter into any Agreement by investing lakhs of rupees without verifying the entire title deeds of the alleged executants. Hence amongst other grounds, they prayed prayed for dismissal of the suit with cost.
5. On the basis of the pleadings of the parties, the following issues and additional issue have been framed for determination:-
ISSUES
1. Whether the plaintiffs prove that the defendants being the absolute owner of suit schedule property entered into the Registered Agreement of Sale dated 30.03.2012 agreeing to sell the suit schedule property in favour of plaintiffs for Rs.1 crore 15 lakhs and acknowledged Rs.42,10,000/- from the plaintiffs as advance sale consideration?
2. Whether the defendants No.2 to 4 establish that Sale Agreement is not binding on defendants No.3 & 4?
3. Whether the plaintiffs prove their ready and willingness to get the sale transactions concluded in respect of Agreement of Sale dated 30.03.2012?8 O.S.No.5193/2014
4. Whether the plaintiffs are entitled for the relief of specific performance of the contract?
5. What decree or order?
ADDITIONAL ISSUE
1. Whether the Defendant No.1 proves that as security towards loan, the Sale Agreement came to be executed in the name of the Plaintiff as contended in Para No.5 of his written statement?
6. After settlement of issues, the plaintiff No.1 alone has entered into the witness box as PW-1 and Ex.P.1 to Ex.P.20 were marked through him and closed their side. On behalf of the defendants, defendants No.1 and 3 have entered into the witness box as DWs.1 and 2 and one witness by name Shantha Murthy, The Valuator for Land and Building was examined as DW-3 and Ex.D.1 to Ex.D.9 were marked through them and closed their side.
7. Heard the arguments of the learned counsel for plaintiffs and defendants. The learned counsel for plaintiffs also submitted his written argument.
8. My findings on the above issues are as under:-
Issue No.1: In the affirmative.
Issue No.2: In the negative.
Issue No.3: In the negative.
Issue No.4: As per findings.
Addl. Issue No.1: In the negative.
Issue No.5: As per final order below
for the following:
9 O.S.No.5193/2014
REASONS
9. Issues No.1 & 2 and Additional Issue No.1:- Since all these issues are interconnected, taken up together for discussion to avoid repetition. In his examination-in-chief, PW-1 has reiterated the averments made in the plaint. The documents marked on behalf of the plaintiffs at Ex.P.1 is the Registered Sale Agreement. Ex.P.2, P.3, P.7 to P.10 are the Encumbrance Certificates. Ex.P.4 to P.6 are the certified copies of Sale Deeds. Ex.P.11 and P.12 are the Tax Paid Receipts. Ex.P.13 is the Death Certificate of Buddanna. Ex.P.14 and P.15 are the Bank Statements. Ex.P.16 and P.17 are the certified copies of Sale Deed executed by defendant No.1 in favour of others. Ex.P.18 and P.19 are the certified copies of Sale Deed in the name of plaintiff No.1. Ex.P.20 is the computer print out issued by Ministry of Corporate Affairs with respect to business carried on by plaintiff No.1.
10. The learned counsel for plaintiffs has vehemently argued that, with an intention to purchase the suit schedule property for total consideration of rupees one crore fifteen lakhs, the plaintiffs have entered into Sale Agreement with the defendants and paid the sum of Rs.42,10,000/- as earnest money. The defendants promised to execute the Sale Deed in their favour within six months after completing the other formalities, like procurement of original documents and eviction of tenants from the suit schedule property. Since there was no favourable response from the defendants, the plaintiffs were constrained to file this suit.
10 O.S.No.5193/2014Regarding Issue No.1, he drew the attention of this court with respect to the Registered Sale Agreement, marked at Ex.P.1, executed by defendant No.1 along with his children. Further, the defendant No.1 promised to bring his wife as a signatory to the Sale Deed. Further, he invited the attention of this court on certain admissions given by DW-1 and argued that, even though the defendants have taken contention that, the suit schedule property is the Joint Family Property, nothing is placed before the court to show that the said property is their Undivided Family Property. Further argued that, though the defendant No.1 has taken contention that, the transaction between him and plaintiffs was a money transaction and the suit document was created for the purpose of security, during his cross-examination, DW-1 has clearly admitted that, there is no document to show that Ex.P.1 was executed for the purpose of security. Further argued that, no oral evidence will contradict the documentary evidence, as per the provisions contained under Section 92 of the Evidence Act. The documentary evidence makes it clear that, with sole intention to sell the suit schedule property, the defendants have entered into the Sale Agreement with the plaintiffs. But failed to keep up their promise. In support of his argument, placed reliance on the division bench decision of our Hon'ble High Court in the case of Gurubasappa and others Vs. Gurulingappa, reported in AIR 1962 Mys 246. At para No.31 of the said decision, it was held as under;
"The language of the document i.e., the sale deed exhibit A-1 in the instant case is clear, specific and 11 O.S.No.5193/2014 unambiguous and it is not disputed by the advocates for the parties that the transaction evidenced therein is an absolute sale. If the meaning of the words are clear or unequivocal and the intention of the parties is easily deducible therefrom, it is not permissible to lead parol evidence of the acts and the conduct of the parties or the surrounding circumstances to show that the document was not really it purported to be."
11. In support of the grounds urged above, the learned counsel for plaintiffs relied on the decision of Hon'ble Supreme Court in the case of Bishwanath Prasad Singh Vs. Rajendra Prasad and another, reported in (2006) 4 SCC 432 . In the said decision, it was held as under;
"A deed must be construed having regard to the language used therein, reading it as a whole - A sentence or term used here or there may not be determinate of the real nature of the transaction."
12. Further, the learned counsel for plaintiff relied on another decision of Hon'ble Supreme Court in the case of the Madhukar Nivrutti Jagtap and others Vs. Smt.Pramilabai Chandulal Parandekar (dead) through LRs. and others, reported in AIR 2019 SC 4252. At para No.12.2 of the said decision, it was held as under;
"The evidence on the part of the defendants in this case remains rather vague and sketchy; and it is difficult to accept the oral assertions of defendant No.1 as against the recitals in the agreements."
13. Per contra, to rebut the case of plaintiffs and substantiate their contention that, Ex.P.1 relied by the plaintiffs was created for 12 O.S.No.5193/2014 the purpose of security towards loan obtained by defendant No.1, the learned counsel for defendants was strenuously argued that, the defendant No.1 alone was the signatory to the Sale Agreement. But in paras No.6 and 7 of the plaint it was clearly admitted that, the defendants are the owners of the suit schedule property. Further, the defendant No.2 was not a party to the Agreement. It was further argued that, as on the date of Agreement itself, the Guidance Value of the suit schedule property was more than two crores, which is much more than the sale consideration mentioned in the Sale Agreement. That itself shows that, the document relied by the plaintiffs was created for the purpose of security towards the loan obtained by defendant No.1. Further, the plaintiffs did not take any trouble to issue the legal notice to the defendants before institution of the suit. That itself shows that, the transaction one said to be effected between the plaintiff and defendant No.1 was not with an intention to sell the suit schedule property. Further argued that, the alleged witnesses to the Agreement are the close relatives of the plaintiffs. Inspite of that, the plaintiffs did not take any trouble to examine any one of the witnesses shown in the Agreement. Further argued that, the other suit instituted by the plaintiff No.2 against defendant No.1 in O.S.No.5225/2013 for recovery of rupees three crores came to be dismissed. Further, PW-1 in his cross- examination has unequivocally admitted that, from the date of Agreement till the date of his cross-examination, they were not having sufficient funds to complete the sale transaction. Hence it is crystal clear that, the plaintiffs did not approach this court with clean hands and their conduct demonstrates that, the defendants have no 13 O.S.No.5193/2014 intention to sell the property. In support of his argument, relied on the decision of Hon'ble Supreme Court in the case of Shenbagam and others Vs. K.K.Rathinavel, reported in 2022 (2) Indian Civil Cases 207 (S.C.). In the said decision, it was held as under;
"Inconsistency in plaintiff's conduct, lack of communication with defendants urging them to discharge mortgage and showing his willingness to pay balance consideration and delay of about three years from date fixed for performance of contract in filing a suit are all indicative of plaintiff's lack of will to perform contract."
14. Further argued that, even though the other suit instituted by plaintiff No.2 against defendant No.1 came to be dismissed, the plaintiff No.2 not chosen to enter into the witness box to clarify the doubts and cloud surrounded on this transaction. PW-1 in his cross- examination pleaded ignorance about the suggestions put to him with respect to the case set up by plaintiff No.2. As such, it is clear that, the transaction between plaintiff and defendant No.1 is only a money transaction and it is necessary to take adverse inference against the plaintiffs. In support of the said contention, he relied on the decision of Hon'ble Supreme Court in the case of Man Kaur (dead) by LRs. Vs. Hartar Singh Sangha, reported in (2010) 10 SCC 512. In the said decision, it was held as under;
"Where a party to the suit does not appear in witness box and state his own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that case set up by him is not correct."14 O.S.No.5193/2014
15. The learned counsel for defendants further argued that, PW-1 is not having any authority to depose on behalf of plaintiff No.2. As such, on behalf of plaintiff No.2 there is no evidence. Since there is serious allegations against plaintiff No.2, it is obligatory on his part to enter into the witness box. But he failed to discharge the burden casted upon him. In support of the said contention, relied on the decision of our Hon'ble High Court in the case of T.L.Nagendra Babu Vs. Manohar Rao Pawar, reported in ILR 2005 KAR 884 . In the said decision, it was held as under;
"When the plaintiff approached a Court of law with serious allegations, he must give some details which compelled him to file the suit in question."
16. Keeping in mind the law laid down in the aforecited decisions, I have carefully gone through the pleadings of the parties and their evidence, both oral and documentary. It is not in dispute that, the suit schedule property was purchased by the father of defendant No.1 under a Registered Sale Deed dated 17.06.1966. DW-1 in his cross-examination has clearly admitted that, his father died in the year 1987 and he married defendant No.2 in the year 1994 and in the said wedlock, the defendants No.3 and 4 were born. Further admitted that, he is the only son and he is having two sisters by name Lalithamma and Shivasaralakumari. Immediately after the death of his father, the khatha in respect of the suit schedule property came to be changed in his name and he alone obtained loan from the bank by creating charge over the suit schedule property. Now it is clear that, even though the father of defendant 15 O.S.No.5193/2014 No.1 died in the year 1987, till date, none of his sisters made any claim in respect of the suit schedule property. Further, much prior to the marriage of defendant No.1 with defendant No.2, his father died and defendant No.1 succeeded the suit schedule property. Since the suit schedule property was the self acquired property of the father of defendant No.1, in view of the law laid down by the Hon'ble Supreme Court in the cases of Commissioner of Wealth Tax Vs. Chander Sen and others, reported in (1986) 3 SCC 567 and Yudhister Vs. Ashok Kumar, reported in AIR 1987 SC 558 and three Judge bench decision in the case of Maktul Vs. Mst. Manbhari and others, reported in AIR 1958 SC 918, there are reasons to believe that, at no point of time, the suit schedule property was Undivided Family Property of defendants No.2 to 4. Hence. the contention of the defendants holds no water.
17. Ex.P.1 is a Registered Sale Agreement executed by defendants No.1 and 3, in their individual capacity and defendant No.1 as the father and natural guardian of defendant No.3, who was minor at that point of time. Since defendant No.1 has admitted the execution of Sale Agreement and registration, it is unambiguously clear that, on the said date, the defendants No.1 and 3 have executed the said document in favour of the plaintiffs with an intention to sell the property. However, the contention of the defendants is that, the defendant No.1 executed the said document for the purpose of security and they never intended to sell the property. Since Ex.P.1 is a registered document, as per Section 92 of the Indian Evidence Act, it carries more weight as observed by 16 O.S.No.5193/2014 the Hon'ble High Court and the Apex Court of India in the decisions relied by the learned counsel for plaintiffs cited above. It is needless to mention that, as per provisions contained under Section 92 of the Evidence Act, the documentary evidence excludes the oral evidence. Looking into the evidence given by DWs.1 and 2, there is no consistency in their stand. As such, it is just and proper to rely on the terms and conditions incorporated in the Sale Agreement, marked at Ex.P.1.
18. On perusal of the Sale Agreement, the recitals employed therein makes it very clear that, with sole intention to sell the suit schedule property for total sale consideration of rupees one crore fifteen lakhs, the said document came to be executed. Wherein there is a clear recital with respect to payment of Rs.37,10,000/- in favour of defendants. That apart, additional sum of Rs.5,00,000/- was paid to defendant No.1 by way of cheque drawn on ICICI Bank, Koramangala Branch. The said transaction was made through bank and defendant No.2 not at all entered into the witness box to deny the said payment. It is crystal clear that, in all, the sum of Rs.42,10,000/- was paid by the plaintiffs in favour of the defendants.
19. Even if the transaction referred in Ex.P.1 was a money transaction, there was no impediment to defendant No.1 to incorporate the said terminology in Ex.P.1. But there is no whisper in the Agreement about money transaction. On perusal of his cross- examination it is clear that, inspite of knowledge about the interim order passed by the court restraining the defendants from alienating the suit schedule property, he ventured to create charge over the 17 O.S.No.5193/2014 property and took loan thereon from Karnataka Bank, PNB Housing Finance Limited and Federal Bank. The other contention taken by him is that, he is regular in paying interest on the aforesaid sum of money at the rate of 5% per annum. But except bald contention, nothing is produced by the defendants to show that, interest was paid as asserted by defendant No.1. For the first time, the defendant No.1 has taken such contention in his cross-examination. But there is no whisper either in the written statement or in his examination-in- chief, regarding payment of alleged interest.
20. In this suit, the plaintiffs have taken specific contention that, they have paid the sum of Rs.37,10,000/- to defendants No.1 and 3 at the time of execution of Sale Agreement and another sum of Rs.5,00,000/- was paid to defendant No.2 by way of cheque. As rightly contended by the learned counsel for plaintiffs, the defendant No.2 not at all taken any trouble to enter into the witness box, to deny the said payment. It seems that, since claim of the plaintiffs is supported by both oral and documentary evidence, anticipating awkward situation, she did not come forward to give evidence in this case. Since the suit schedule property is the self acquired property of defendant No.1 and in view of their conduct, the defendants No.2 to 4 are estopped from taking contention that the Sale Agreement is not binding on them. This being the factual position, it is clear that, the defendant No.1 along with defendant No.3 for himself and on behalf of entire family entered into the Sale Agreement with the plaintiffs with an intention to sell the suit schedule property for rupees one crore fifteen lakhs and received the sum of 18 O.S.No.5193/2014 Rs.42,10,000/- as advance. With these observations, Issue No.1 is answered in the affirmative and Issue No.2 & Additional Issue No.1 are answered in the negative.
21. Issues No.3 and 4:- In para No.15 of the plaint, as well in the examination-in-chief of PW-1, the plaintiffs have clearly pleaded and averred that, even though they were ready and willing to perform their part of the contract, the defendants failed to get vacated their tenants from the suit schedule property, did not repay the loan obtained from the bank and failed to procure the required documents for registration of the Sale Deed. However, the learned counsel for defendants by relying on certain admissions given by PW-1 in the course of his cross-examination has vehemently argued that, at no point of time, the plaintiffs were having sufficient funds to complete the sale transaction. That itself shows that, their intention was not to get the Sale Deed in their favour and it was only a money transaction and the document one relied by the plaintiffs is only a security document. By denying all these contentions, the learned counsel for plaintiffs has canvassed before the court that, the recitals incorporated in the Sale Agreement are clear and unambiguous. That apart, in his examination-in-chief PW-1 has clearly deposed that, they are having capacity to mobilise the funds to complete the sale transaction. To substantiate his argument, he invited the attention of this court on the statement of account produced in this suit. Further argued that, when the plaintiffs have pleaded and averred about their financial capacity to pay the balance sale consideration, they need not approach the defendants 19 O.S.No.5193/2014 again and again to offer money or to make incessant requests for performance. In support of said contention, he placed reliance on the afore cited decision of Hon'ble Supreme Court in the case of Madhukar Nivrutti Jagtap cited above. At para No.13.1 of the said decision, it was held as under;
"The question as to whether the plaintiff seeking specific performance has been ready and willing to perform his part of the contract is required to be examined with reference to all the facts and the surrounding factors of the given case. The requirement is not that the plaintiff should continuously approach the defendant with payment or make incessant requests for performance."
22. Regarding readiness and willingness, the learned counsel for plaintiffs has relied on another decision of Hon'ble Supreme Court in the case of Rameshwar Prasad (Dead) by LRs. Vs. Basanti Lal, reported in (2008) 5 SCC 676 . In the said decision, it was held as under;
"There is a specific statement made in the plaint that the plaintiff was willing to comply with the terms of the sale agreement which were applicable and was so ready even before - One of the terms in the agreement related to payment of interest - Conclusion of the High Court that there is no specific plea regarding readiness to pay interest is contrary to the factual scenario, in view of the categorical averment made in the plaint - It's conclusions are clearly contrary to the materials on record the Court was wrong in holding that there was no indication about the readiness and willingness to pay interest."
23. Further argued that, the phenomenal increase in the price of the property during the pendency of litigation, is not a ground to 20 O.S.No.5193/2014 deny the relief of specific performance of contract. As such, the oral testimony of DW-3 and documents marked through him at Ex.D.2 to D.9 would not come in the way of the plaintiffs in getting the Sale Deed in their favour. In support of said contention, the learned counsel for plaintiffs relied on the decision of Apex Court in the case of Nirmala Anand Vs. Advent Corporation (P.) Ltd. and others, reported in (2002) 8 SCC 146. In the said decision, it was held as under:
"In cases of phenomenal increase in price of land during pendency of litigation held, plaintiff should not be denied relief of specific performance only for that reason
- Instead court may impose a reasonable condition in the decree, including payment of an additional amount by plaintiff purchaser - Stressed that payment stipulated should not be onerous - Court must keep in view of totality of facts and circumstances, such as who is the defaulting party, whether one party is attempting to take undue advantage and also the amount of hardship that would be caused to defendant if decree of specific performance were passed."
24. From the beginning, it was the contention of the defendants that, as on the date of alleged Agreement, the value the suit schedule property was more than rupees 2.5 crores and no prudent man will come forward to sell the said property for throw away price of rupees one crore fifteen lakhs. Further contended that, as the defendant No.1 was not the absolute owner of the suit schedule property, the Agreement executed by the defendants No.1 and 3 is not binding on other defendants. Further contended that, the plaintiffs did not possess balance consideration amount to get the Sale Deed in their favour. In support of the said court, the 21 O.S.No.5193/2014 learned counsel for defendants placed reliance on the decision of Apex Court in the case of U.N.Krishnamurthy (since deceased) through LRs. Vs. A.M.Krishnamurthy, reported in 2022 LiveLaw (SC) 588. In para No.21 of the said decision, it was held as under;
"It is well settled that, in a suit for Specific Performance of an agreement, it is for the Plaintiff to prove his readiness and willingness to perform his obligations under the agreement. Where a certain amount has been paid in advance and the balance is required to be paid within a stipulated time, it is for the Plaintiff to show that he was in a position to pay the balance money. The Plaintiff has to prove that he has the money or has alternatively made necessary arrangements to get the money. In this case, the Original Defendant/Appellants have all along contended that the Plaintiff Respondent neither offered to pay nor was in a position to pay the balance consideration of Rs.15,00,000/-."
25. Keeping in mind the law laid in the afore cited decisions, I have gone through the factual matrix of this suit. According to the plaintiffs, the defendants offered to sell the suit schedule property for total sale consideration of rupees one crore fifteen lakhs and received Rs.42,10,000/- as earnest money. On perusal of the contentions of the plaintiffs, it is crystal clear that, the Agreement came to be executed on 30.03.2012 and amount paid by them is not even 50% of the total sale consideration. On perusal of the Sale Agreement, there is no recital regarding the existence of residential house of plaintiffs in the suit schedule property. Looking into the cross-examination of PW-1 and other witnesses, it is clear that, some of the tenants are in the suit schedule property and there is an industry in the suit schedule property and the defendants are also in 22 O.S.No.5193/2014 the said property. But there is no whisper about all those facts in the Sale Agreement. Even though there were latches on the part of the defendants, the Guideline Value, marked at Ex.D.1 and Valuation Report prepared by defendant No.3 cannot be ignored in a suit like this. Looking into the features existing in the suit schedule property, there are reasons to believe that, the suit property is much worth than the sale consideration shown in the Sale Agreement. Added to that, the part sale consideration paid by the plaintiffs was not even 50% of the total sale consideration. That apart, though the plaintiffs have taken contention that, they are having sufficient funds to pay the balance sale consideration, till date, no effort was made to deposit the balance sale consideration before the court. This being the state of affair, even if Sale Agreement is proved, this court is not bound to grant the equitable relief of specific performance of contract, since the Agreement in question came to be executed much prior to amendment of the Specific Relief Act and the relief claimed in this suit is still discretionary. Hence, for the reasons stated above, this court has come to the conclusion that, the plaintiffs have failed to prove their readiness and willingness as per the tone and tenor of Agreement. As such, this court did not find any reason to grant the main relief of specific performance of contract in favour of the plaintiffs.
26. Section 22(2) of the Specific Relief Act makes it clear that, when there is no prayer for return of earnest money, the court cannot grant such relief. Even the Hon'ble Supreme Court in its recent decision in the case of Desh Raj Vs. Rohtash Singh, 23 O.S.No.5193/2014 reported in (2023) 3 SCC 714 has made the said preposition very clear. In this background of the matter, I have carefully gone through the terms and conditions of Agreement, marked at Ex.P.1. Wherein there is no provision for forfeiture of earnest money, in case the transaction is not materialised. However, there is a clear recital in favour of plaintiffs to get the Sale Deed through the process of the court. One more thing for consideration is that, the sum of Rs.42,10,000/- paid by the plaintiffs is not a small amount. Hence to do complete justice to the parties, it is just and proper to direct the defendants to repay the said sum of money in favour of the plaintiffs with reasonable interest, thereon.
27. It is relevant to mention that, the facts leading to this case is altogether different from the facts of the case in Desh Raj, cited above. In the reported decision, there was a forfeiture clause. But there is no such forfeiture clause in the Agreement, marked at Ex.P.1. This being the factual position, if the refund of earnest money is not ordered, it would leads to unjust enrichment. At this stage, I have gone through the law laid down by the Madras High Court and High Court of Madhya Pradesh. The Division Bench of the Madras High Court in the case of Fathered Majeed v. Subhapratha Ravikumar reported in 2008 (4) CTC 494, has held as under;
"It is true, the plaintiff has not asked for any alternative relief of recovery of money. Though it was not asked for, since it is for the relief of specific performance on ground of equity, the Court can order so."24 O.S.No.5193/2014
28. In the case of Susila Devi and others Vs. Kachrabai and others, reported in 1994 (0) MPLJ 362, the Madhya Pradesh High Court has observed as follows;
"It is settled law that in proper cases, where specific performance is refused, the Court may direct the refund of the amount to the plaintiff even though he has not specifically asked for it in the plaint."
29. As stated supra, the facts leading to this case is altogether different from the facts referred in the case of Desh Raj cited above. Hence in the light of law laid down in the afore cited two decisions, it is just and proper to direct the defendants to repay the earnest money with interest. Further, in the instant case, the defendant No.1 has taken categorical contention that, he is ready to repay the sum of money referred in the Agreement. Hence in this peculiar circumstances, the only course left open to this court is to refund the earnest money with interest at the rate of 12% per annum, from the date stipulated in the Agreement. With these observations, Issue No.3 is answered in the negative and Issue No.4 as per findings.
30. Issue No.5: In view of the above discussions, I proceed to pass the following:-
ORDER The suit of the plaintiffs is partly decreed as under:
The defendants No.1 to 4 are hereby directed to refund/deposit the sum of Rs.42,10,000/- (Rupees Forty Two 25 O.S.No.5193/2014 Lakhs and Ten Thousand) to the plaintiffs with proportionate cost and interest at the rate of 12% per annum from 05.04.2012, within 2 months from the date of this order.
In default, the plaintiffs are entitled to recover the sum of Rs.42,10,000/- with entire cost and interest at the rate of 15% per annum from the date of Agreement till realisation.
Draw decree accordingly.
(Dictated to the Judgment Writer, typed by her, the transcript thereof corrected and then pronounced by me, in the open court, on this the 11th day of April, 2023) (SANTHOSHKUMAR SHETTY N.) XI ADDL., CITY CIVIL & SESSIONS JUDGE BENGALURU CITY.
ANNEXURE List of witnesses examined for plaintiffs:
PW.1 : Sri.N.Shankar
List of documents exhibited for plaintiffs:
Ex.P.1 : Agreement of Sale dated 30.03.2012
Ex.P.2 & 3 : Encumbrance Certificates
Ex.P.4 : Certified copy of Sale Deed
dated 13.05.1955
Ex.P.5 : Certified copy of Sale Deed
dated 16.06.1966
Ex.P.6 : Certified copy of Sale Deed
dated 16.06.1966
Ex.P.7 to 10 : Encumbrance Certificates
Ex.P.11 & 12: Tax Paid Receipts
26 O.S.No.5193/2014
Ex.P.13 : Death Certificate of Buddanna
Ex.P.14 : Bank Statement
Ex.P.14(a & b): Relevant Portions
Ex.P.15 : Bank Statement
Ex.P.16 : Certified copy of Sale Deed
dated 01.06.2012
Ex.P.17 : Certified copy of Sale Deed
dated 02.04.2012
Ex.P.18 : Certified copy of Sale Deed
dated 06.06.2013
Ex.P.19 : Certified copy of Sale Deed
dated 19.04.2017
Ex.P.20 : Computer print out issued by Ministry of
Corporate Affairs with respect to business
carried on by plaintiff No.1
Ex.P.20(a) : Certificate under Section 65(b)(4) of
The Indian Evidence Act
List of witnesses examined for defendants :
DW.1 : Sri.Ramadas
DW.2 : Sri.Manoj Gowda K.R.
DW.3 : Sri.Shantha Murthy
List of documents exhibited for defendants :
Ex.D.1 : Guideline Value fixed by the
Sub-Registrar
Ex.D.2 : Valuation Report
Ex.D.3 to 8 : 6 Colour Photographs
Ex.D.9 : CD
XI ADDL., CITY CIVIL & SESSIONS JUDGE
BENGALURU CITY.