Karnataka High Court
Mr P Baskaran vs Mr C Murugesh on 15 November, 2021
Bench: S.Sujatha, Ravi V Hosmani
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS 15TH DAY OF NOVEMBER, 2021
PRESENT
THE HON'BLE MRS.JUSTICE S. SUJATHA
AND
THE HON'BLE MR.JUSTICE RAVI V.HOSMANI
RFA No.1789/2017
BETWEEN:
Mr. P. Baskaran
S/o. Mr. Pichaikani
Aged about 42 years,
R/at No.209, 2nd 'C' Cross,
Ramaiah Layout,
Kacharakanahalli,
Bengaluru -560084. .... Appellant
(By Sri. D.R. Ravishankar, Advocate
along with Sri. G. Jairaj, Advocate)
AND:
Mr. C. Murugesh
S/o. Late M. Chinnadorai
Aged about 62 years,
R/at No.9, II 'd' Cross,
T. Krishna Reddy Layout,
Banasawadi,
Bengaluru -560043.
Also at: No.217,
9th C Main Road,
2
HRBR I Block,
(Hennur Banasawadi Road Layout),
Bengaluru. ... Respondent
(By Sri. S.R. Sreeprasad, Advocate)
This Regular First Appeal is filed under Section 96 and
Order XLI Rule 1 of CPC against the judgment and decree dated
11.09.2017 passed in O.S.No.558/2014 on the file of XIV
Additional City Civil Judge, Bengaluru partly decreeing the suit
for specific performance of contract.
This appeal coming on for admission being heard and
reserved for judgment on 05.08.2021, this day, Ravi V.
Hosmani J., pronounced the following:
JUDGMENT
Challenging the judgment and decree dated 11.09.2017, passed by the XIV Addl. City Civil Judge, Bengaluru, in O.S.No.558/2014, this appeal is filed by the unsuccessful plaintiff.
2. Brief facts of the case as stated are that, plaintiff filed O.S.No.558/2014 for specific performance of agreement of sale dated 24.07.2013 against respondent/defendant in respect of house property bearing No.9CM-217, Municipal PID No.88-250- 9CM-217 measuring east-west 12.2 meters and north-south 9.15 meters situated at Hennur - Banaswadi road layout, I block, 3 Bengaluru, consisting of ground, first, second and terrace floor within the limits of BBMP ward No.88, bounded on East by: 9th C main road;
West by: Site No.9BM-218;
North by: Site No.9CM-219;
South by: Site No.9CM-215.
(hereinafter referred to as the 'suit property').
3. In the plaint it was stated that defendant acquired ownership over suit property under registered sale deed executed by Bengaluru Development Authority, in favour of defendant on 28.04.2001. The khata was transferred in the name of defendant. During the year 2013, defendant was in need of money. He offered to sell suit property to plaintiff. Accordingly, an agreement of sale was executed on 24.07.2013 incorporating the terms and conditions. It was also registered. The plaintiff agreed to buy suit property for a total sale consideration of Rs.57,22,500/-. It was stipulated that sale transaction was to be completed within 90 days. In terms of the condition, plaintiff paid a sum of Rs.24,57,135/- to the Bengaluru City Co-operative Bank Limited, for clearing encumbrance on suit property. Defendant acknowledged receipt 4 of said amount towards partial sale consideration and agreeing to receive balance sale consideration at the time of registration of sale deed.
4. Upon realization of loan amount, Bengaluru City Co- operative Bank Limited issued loan discharge certificate and also for discharge of mortgage. Thereafter, plaintiff had also obtained three demand drafts dated 12.11.2013 and 02.12.2013 respectively for total amount of Rs.32,08,140/- in favour of defendant, apart from DD for Rs.3,19,000/- towards stamp duty and Rs.57,980/- towards registration fee. But defendant kept postponing execution of sale deed on one pretext or the other, though plaintiff was ready and willing to perform his part of contract. Therefore, plaintiff was constrained to get issued legal notice on 19.12.2013 calling upon defendant to come forward to execute sale deed.
5. Instead of complying, defendant got issued a false and frivolous reply on 03.01.2014. It was also stated that defendant had called plaintiff to his house for resolving dispute. But on 12.01.2014, when plaintiff went there, he was abused, assaulted 5 and threatened with dire consequences, in case he pursued claims against defendant. At that time, plaintiff came to know about intention of defendant to alienate suit property in favour of third party. Therefore, he was constrained to file civil suit for specific performance of agreement of sale dated 24.07.2013.
6. Upon service of summons, defendant entered appearance and filed written statement admitting agreement of sale, receipt of earnest money of Rs.24,57,135/-. It was contended that agreement of sale dated 24.07.2013 contained a condition that sale transaction was to be completed within 90 days from date of agreement by paying balance sale consideration of Rs.32,42,865/-. It was further stated that after receipt of earnest money, defendant cleared off loan obtained by him from Bengaluru City Co-operative Bank on 02.08.2013. The bank also issued clearance certificate. Defendant also evicted the tenant in occupation of portion of premises. Thereafter though defendant waited for more than three months, plaintiff did not come forward to pay balance sale consideration and get sale deed executed. It was stated that time was the essence of 6 contract and failure of plaintiff to come forward to perform his part of contract, established that he was not ready and willing. The other plaint averments were denied.
7. Based on pleadings, trial Court framed following issues:
1. Whether the plaintiff proves that he is always ready and willing to perform his part of the contract i.e. the agreement of sale dated 24.07.2013, but it is the duty who has breached the terms of the contract?
2. Whether the defendant proves that though he was ready to perform his part of the contract, the plaintiff has not turned up to perform his part of the contract i.e. the agreement of sale?
3. Whether the plaintiff is entitled for the reliefs as sought for?
4. What order or decree?
8. In discharge of burden, under the issues, plaintiff got himself examined as PW.1. Exs.P.1 to P.24 were marked. Ex.P.1 is the original registered agreement of sale dated 24.07.2013. Khata certificate and khata extract of suit property were marked as Ex.P.2 and P.3. Tax paid receipt was marked as Ex.P.4. The encumbrance certificate for the period from 01.04.2013 to 7 18.01.2014 was marked as Ex.P.5. The absolute sale deed dated 28.04.2001 was marked as Ex.P.6. The loan clearance certificate dated 02.08.2013 was marked as Ex.P.7. The loan account statement of plaintiff was marked as Ex.P.8. Letter dated 18.07.2014 to HDFC bank for cancellation of DDs was marked as Ex.P.9. HDFC bank statement was marked as Ex.P.10. Letter dated 17.07.2014 for cancellation of DDs was marked as Ex.P.11. HDFC bank statement was marked as Ex.P.12. Postal acknowledgements dated 20.12.2013 were marked as Exs.P.13 to P.18. RTI application made to BESCOM was marked as Ex.P.19. BESCOM statement was marked as Ex.P.20. BWSSB receipt was marked as Ex.P.21. Legal notice dated 19.12.2013 was marked as Ex.P.22. Reply notice dated 03.01.2014 was marked as Ex.P.23. Copy of affidavit filed under Section 65A and B of Evidence Act was marked as Ex.P.24.
9. The defendant did not lead oral evidence but got marked certified copy of agreement of sale dated 24.07.2013 as Ex.D.1 in cross-examination of PW.1.
8
10. On consideration of evidence, trial Court answered issues no.1 and 2 in the negative, issue no.3 partly in affirmative and issue no.4 by dismissing the suit.
11. While giving its finding on issues no.1 and 2, reasons assigned by trial Court were that plaintiff failed to establish steps taken by him within 90 days for completion of sale transaction. It held that plaintiff failed to establish consent of defendant on endorsement for extension of period of agreement. It also held that plaintiff failed to prove readiness and willingness and as plaintiff's case has to stand on its own merit, failure of defendant to enter witness box would not be fatal to his case.
12. Insofar as issue no.3, trial Court took note of admission of defendant regarding receipt of earnest money from plaintiff in terms of Ex.P.1. As trial Court had held that time was the essence of contract and there was failure of plaintiff to establish readiness and willingness, it answered issue no.1 partly in affirmative insofar as directing defendant to refund earnest money received to plaintiff with interest at 18% p.a. Plaintiff's prayer for specific performance came to be dismissed. 9
13. Shri D.R.Ravishankar, learned counsel appearing for appellant along with Shri G.Jairaj, advocate submitted that trial Court erred in dismissing plaintiff's suit for specific performance on the ground that time was the essence of contract, though no specific issue regarding same was framed. Relying upon ratio of judgment of the Hon'ble Supreme Court in the case of Seth Loonkaran Sethiya and others vs. Ivan E. John and others reported in AIR 1977 SC 336, it was submitted that without framing specific issue, trial Court was not justified in giving its finding. It was submitted that circumstances of this case warranted invocation of procedure contemplated under Order XLI Rule 23 of CPC and sought remand of the matter.
Learned counsel further submitted that defendant unequivocally admitted agreement of sale and receipt of earnest money. Specific contention about lack of plaintiff's readiness and willingness was not urged in written statement. Relying upon decision of Hon'ble Supreme Court in the case of Chand Rani vs. Kamal Rani, reported in 1993 (1) SCC 519, it was submitted that there was no presumption that time was the 10 essence of contract in an agreement of sale of immovable property and Courts may infer that it is to be performed within a reasonable time, if conditions are evident from express terms of contract, from nature of property and surrounding circumstances.
It was further submitted that though defendant was admittedly aware of terms and conditions of agreement of sale, he had not taken steps for termination of agreement of sale. It was pointed out that notice for cancellation of agreement of sale was issued only on 03.01.2014 i.e., after receipt of plaintiff's legal notice dated 19.12.2013. It was therefore submitted that both plaintiff and defendant had acted in a manner indicating that time was not the essence of contract. As there was no challenge to plaintiff's financial condition to pay balance sale consideration, trial Court was not justified in refusing plaintiff's prayer for specific performance. It was submitted that contents of Ex.P.10 to P.12 established that plaintiff had in fact obtained demand drafts for paying balance sale consideration to defendant prior to cancellation of agreement of sale by 11 defendant. Therefore, trial Court was not justified in refusing decree for specific performance.
In support of his submission for invocation of procedure under Order XLI Rule 25 of CPC, learned counsel relied upon decision of the Hon'ble Supreme Court in the case of Mahendra Manilal Nanavati vs. Sushila Mahendra Nanavati, reported in AIR 1965 SC 364 and in the case of Bachahan Devi vs. Nagar Nigam Gorakhpur, reported in 2008 (12) SCC 372.
14. On the other hand Shri S.R.Shreeprasad, learned counsel for respondent sought for dismissal of appeal on following grounds.
It was submitted that admittedly clause (4) of Ex.P.1 agreement of sale, contained clear stipulation about time within which sale transaction was agreed to be completed. In view of said clause, it was submitted that time was of the essence of contract. Relying upon decision of the Hon'ble Supreme Court in the case of Ahmadsahab Abdul Mulla (2) v. Bibijan, reported in 2009 (5) SCC 462, it was submitted that where time was the essence of contract, presumption would always be in favour of 12 an understanding that it would be with reference to a calender date. It was submitted that PW.1 admitted during cross examination that plaintiff had not issued any notice or called upon defendant to execute sale deed before lapse of 90 days from date of agreement. The legal notice Ex.P.22 dated 19.12.2013 was issued only on 20.12.2013.
Attention of this Court was also drawn to handwritten endorsement on page eight of Ex.P.1 for extending period of agreement from 24.10.2013 to 31.12.2013. It was submitted that said endorsement was not countersigned by defendant. Referring to Ex.D.1, certified copy of Ex.P.1 it was submitted that Ex.D.1 admitted by PW.1 to be certified copy of Ex.P.1 did not contain any such endorsement, which established that said endorsement was forged. Relying upon decision in the case of Padmini Raghavan vs. H.A. Sonnappa, reported in ILR 2014 KAR 233, it was submitted that addition of extension without consent or countersignature of defendant amounted to material alteration of agreement rendering it null and void and 13 therefore dismissal of suit for specific performance was fully justified. On above submissions, sought for dismissal of appeal.
15. From above submission, it is clear that there is no dispute that defendant was owner of suit property. Execution of agreement of sale by defendant in favour of plaintiff on 24.07.2013, agreeing to sell suit property for total sale consideration of Rs.57,22,500/- by accepting Rs.24,57,135/- as earnest money is also not in dispute. The balance amount of Rs.32,08,140/- was agreed to be paid at the time of registration of the sale deed. There is no dispute about a condition in agreement stipulating sale transaction to be completed within 90 days. The only dispute is whether time was essence of contract and whether plaintiff was ready and willing to pay balance sale consideration and obtain execution of absolute sale deed from defendant. Therefore, point that arises for our consideration in this appeal is:
"Whether finding of trial Court on issues no.1 and 2 are justified?"14
16. To establish his case, plaintiff is examined as PW.1, where he reiterates plaint averments. He produced agreement of sale as Ex.P.1; loan clearance certificate as Ex.P.7 and statement issued by Bengaluru City Co-operative Bank, as Ex.P.8. These facts are virtually undisputed. He also produced statement issued by HDFC Bank as Ex.P.10 along with letter dated 17.07.2014 as Ex.P.11 to establish that he had obtained demand drafts, one in favour of defendant towards balance sale consideration and others towards stamp duty and registration fee. Relying upon said documents, plaintiff seeks to contend that he was ready and willing to perform his part of contract. It is contended that defendant kept postponing execution of sale deed on one pretext or other till after expiry of period of 90 days of agreement. It is also sought to be argued that by his conduct, defendant had indicated that time was not the essence of contract.
17. However, it is not in dispute that Clause (4) of Ex.P.1 agreement of sale is with regard to time for completion of sale. It reads as follows:
15
"Time of completion:
Both the parties have hereby undertaken to complete the sale transaction within 90 days from the date of this agreement."
The said clause is clear and unambiguous in its stipulation that time is the essence of contract.
18. Further, the entire contents of Ex.P1 - agreement of sale from page one to eight, except handwritten clause regarding extension of time of agreement, are typed. The handwritten clause on page eight of Ex.P1 reads as follows:
"Further to inform that with mutual consent of both parties Shri C. Murugesh and Shri P. Bhaskaran agree extend the sale agreement from 24.10.2013 to 31.12.2013 (or) from the date of expiry of the sale agreement to 31.12.2013."
19. Ex.P.1 is a registered sale agreement. Ex.D.1 admitted by PW.1 to be certified copy of Ex.P.1, does not contain the above extracted clause. Further said clause is admittedly countersigned only by plaintiff. It is therefore evident that a new condition was sought to be incorporated in the agreement of 16 sale, by plaintiff. While it is contended by plaintiff that the condition for extension of period of agreement of sale was agreed to by defendant in principle, there is no evidence let in to establish the same. From above evidence on record, it is clear that defendant did not consent for extension of period of agreement of sale.
20. Infact, the very contention about extension of period of agreement of sale would unequivocally establish understanding of plaintiff that time was the essence of contract and therefore he had sought for extension of period of agreement of sale. Such being the case, it does not lie in the mouth of plaintiff to contend that time was not the essence of contract.
21. Insofar as readiness and willingness, plaintiff seeks to establish the same by producing letter dated 17.07.2014 and statement issued by HDFC Bank i.e. Exts.P.11 and P.12, that he had already obtained demand drafts in the name of defendant for balance sale consideration as well as demand drafts towards amount of stamp duty and registration charges. But, PW.1 in his 17 cross-examination admitted that he had not informed defendant about his readiness and willingness before expiry of 90 days. Failure to inform the defendant would establish that plaintiff was not willing to go ahead with agreement of sale, though he may have had financial capacity. Sufficient evidence is led by the parties on this aspect. As held by the Hon'ble Supreme Court in Kameshwaramma Vs. Subbarao reported in AIR 1963 SC 884; Bhairab Chandra Nandan Vs. Ramadhir Chandra Dutta reported in AIR 1988 SC 396 and Syed Akthar Vs. Abdul Ahad reported in AIR 2003 SC 2985, non-framing of specific issue would not either be fatal or require a remand, when parties have understood and led evidence on the issue. Therefore, the contention urged by counsel for appellant to invoke procedure contemplated in Order XLI Rule 23 of CPC would not be necessary.
22. In any case, it is established that there was an attempt by plaintiff to unilaterally alter condition regarding period of agreement of sale to cover date of issuance of legal notice - Ex.P.22, on 19.12.2013. As rightly contended by 18 learned counsel for defendant, such act of plaintiff would fall foul of ratio in Padmini Raghavan's case (supra) and the agreement of sale would be rendered unenforceable.
Further, even Ex.P.22 - legal notice itself is issued after expiry of 90 days. When said fact is considered in the light of admission of PW.1 that he had not notified defendant about his readiness and willingness, conclusion arrived at by trial Court that plaintiff failed to establish readiness and willingness would be fully justified. Even finding that there was no breach of terms of agreement by defendant would also be justified.
23. From the above discussion, it is found that the conclusions arrived at by trial Court are on due appreciation of evidence on record. They do not either suffer from material irregularity or perversity. Hence no good or sufficient reasons are made out to interfere with findings of trial Court. Point framed for consideration is answered in the affirmative.
In the result, we pass the following:
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ORDER Appeal is devoid of merit and is accordingly dismissed.
There shall be no order as to costs.
Sd/-
JUDGE Sd/-
JUDGE BVK