Karnataka High Court
Baddu Naik S/O Tahkru Naik vs Venkatreddy S/O Basawantaraya And Anr on 26 November, 2025
-1-
NC: 2025:KHC-K:7252
RSA No. 200157 of 2014
HC-KAR
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 26TH DAY OF NOVEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
REGULAR SECOND APPEAL NO.200157 OF 2014 (SP)
BETWEEN:
BADDU NAIK S/O THAKRU NAIK,
(SINCE DECEASED BY HIS L.RS.)
1. BHEEMBAI W/O BADDU NAIK,
AGE: 73 YRS., OCC: HOUSEHOLD
R/O RAMTEERTH, TQ. CHITTAPUR,
DIST. KALABURAGI
2. KISHAN S/O BADDU NAIK,
AGE: 55 YRS., OCC: LABOUR/AGRI.,
R/O RAMTEERTH, TQ. CHITTAPUR,
DIST. KALABURAGI
3. GOVIND S/O BADDU NAIK,
Digitally signed AGE: 52 YRS., OCC: LABOUR/AGRI.,,
by NIJAMUDDIN R/O RAMTEERTH, TQ. CHITTAPUR,
JAMKHANDI
DIST. KALABURAGI
Location: HIGH
COURT OF
KARNATAKA 4. TARABAI D/O BADDU NAIK W/O KAMAL CHAVAN,
AGE: 50 YRS., OCC: HOUSEHOLD
R/O CHITTAPUR, DIST. KALABURAGI
5. NILABAI D/O BADDU NAIK W/O HIRA CHAVAN,
AGE: 48 YRS., OCC: HOUSEHOLD
R/O BAMLA NAIK TANDA,
YANGAPUR, TQ. CHITTAPUR,
DIST. KALABURAGI
6. GANGUBAI D/O BADDU NAIK W/O RAJU,
AGE: 45 YRS., OCC: HOUSEHOLD,
R/O MOTNAHALLI TANDA ROAD, MOTANAHALLI TANDA,
-2-
NC: 2025:KHC-K:7252
RSA No. 200157 of 2014
HC-KAR
MOTNAHALLI, DIST. YADGIR
7. VIJU D/O BADDU NAIK W/O SHAMU CHAVAN,
AGE: 40 YRS., OCC: HOUSEHOLD
R/O ALIPUR TANDA, TQ & DIST.YADGIRI
8. SUMITRA D/O BADDU NAIK,
AGE: 30 YRS., OCC: HOUSEHOLD, AGRI.,
R/O RAMTEERTH, TQ. CHITTAPUR, DIST. KALABURAGI
...APPELLANTS
(BY SRI S. B. HANGARKI, ADVOCATE)
AND:
1. VENKATREDDY S/O BASAWANTARAYA,
AGE: 49 YEARS, OCC : AGRICULTURE
2. VIRUPAKSHA S/O BASAWANTRAYA,
AGE: 44 YEARS, OCC : AGRICULTURE
BOTH R/O: RAMTEERTH,
TQ : CHITTAPUR, DIST : GULBARGA.
...RESPONDENTS
(BY SRI SHIVAKUMAR PATIL, ADVOCATE R1 & R2)
THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION
100 OF CPC, PRAYING TO MODIFY THE JUDGMENT AND DECREE
PASSED IN CROSS APPEAL NO.13/2013 DATED 28.08.2013, PASSED
BY THE COURT OF SENIOR CIVIL JUDGE, CHITTAPUR, AND ALSO THE
JUDGMENT AND DECREE PASSED IN O.S.NO.23/2009, DATED
19.04.2012, PASSED BY THE COURT OF CIVIL JUDGE, CHITTAPUR,
BY DIRECTING THE DEFENDANTS/RESPONDENTS TO EXECUTE THE
REGD. SALE DEED INFAVOUR OF THE PLAINTIFF AND
CONSEQUENTIAL INJUNCTION THERE FROM IN RESPECT OF THE
SUIT PROPERTY BE GRANTED, BY ALLOWING THIS REGULAR
SECOND APPEAL WITH COST THROUGH OUT.
THIS APPEAL COMING ON FOR FURTHER HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
-3-
NC: 2025:KHC-K:7252
RSA No. 200157 of 2014
HC-KAR
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM) The captioned appeal is by the legal heirs of original plaintiff questioning the judgment and decree rendered by the Courts below, wherein plaintiff's suit for specific performance was partly decreed by the Trial Court ordering refund of Rs.2,40,800/-, while larger relief of specific performance of contract was refused on the ground that the plaintiff has failed to prove his readiness and willingness to perform his part of contract.
2. The defendants questioning the decree for refund of money preferred an appeal in R.A.No.29/2012. The plaintiff has filed cross appeal in R.A.No.13/2013. The First Appellate Court has dismissed the appeal and also the cross appeal filed by the plaintiff.
3. For the sake of brevity, rank of the parties is referred to as per their rank before the Trial Court.
4. Facts leading to the case are as follows: -4-
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR The plaintiff instituted O.S.No.23/2009 contending that though defendant No.1 acknowledged receipt of Rs.2,40,800/- on 18.02.2001, he failed to perform his part of the contract by executing the reconveyance deed. According to the plaintiff, despite the death of Baswantraya, the father of the defendants in March 2007, and despite full repayment of the hand loan within the stipulated period, the defendants continued to postpone execution of the sale deed. Hence, the plaintiff was constrained to file the present suit seeking specific performance.
5. Upon registration of the suit, summons were issued to the defendants. The defendants entered appearance and filed a written statement, stoutly denying the plaint averments in toto.
6. On the basis of rival pleadings, the Trial Court framed issues and proceeded to record evidence. The plaintiff examined himself as PW.1 and also examined -5- NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR PWs.2 to 5, while producing two documents--Ex.P1 (agreement dated 19.02.1999) and Ex.P2 (acknowledgment/agreement dated 18.02.2001). In rebuttal, defendant No.1 deposed as DW.1, examined four additional witnesses, and produced 23 documents marked as Exs.D1 to D23.
7. While answering issue Nos.1 and 4, the Trial Court held that although the plaintiff proved execution of Exs.P1 and P2, issue No.1 had to be answered in the negative and issue No.4 in the affirmative. The Trial Court concluded that the plaintiff failed to establish that the registered sale deed dated 19.02.1999 was executed merely as security for the alleged hand loan of Rs.2,40,000/-. Relying on the recitals in the sale deed and applying Section 92 of the Indian Evidence Act, the Trial Court held that oral or contemporaneous documentary evidence could not be adduced to contradict the terms of a registered conveyance. Thus, it held that the defendants had proved that the sale was an out-and-out transaction. -6-
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR Regarding issue No.3, the Trial Court held that the plaintiff failed to prove readiness and willingness. However, issue No.2 was answered in the affirmative, recognising that the plaintiff had established execution of Ex.P1 and repayment of Rs.2,40,800/- under Ex.P2 dated 18.02.2001. Despite this, the Trial Court declined the discretionary relief of specific performance and partly decreed the suit only to the extent of directing refund of Rs.2,40,800/-.
8. The Appellate Court dismissed both the appeal filed by the defendants challenging the decree for refund and the cross-appeal filed by the plaintiff seeking specific performance.
9. By order dated 12.06.2024, this Court admitted the second appeal and framed the following substantial questions of law:
i. Whether the Courts below were justified in refusing to grant the relief of specific performance of agreement in favour of the plaintiff, when as per Ex.P2 the plaintiff had -7- NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR already performed his part of the contract and as per the recitals of Ex.P2 time was not the essence of contract and readiness and willingness having been performed by the plaintiff, the part to be performed was only on behalf of the defendants by executing the Sale Deed?
ii. Whether the Courts below were justified in refusing to grant specific performance on the ground that the plaintiff has not proved readiness and willingness to perform his part of contract?
iii. Whether the Courts below were justified in not exercising their discretionary power to grant the relief of specific performance? iv. Whether the Courts below were justified in refusing to grant the relief to the plaintiff by exercising their discretionary power, when the transaction entered into between the plaintiff and defendant was a case of re-transfer of suit land in favour of the plaintiff to whom the suit land belonged to?
Finding on substantial questions of law No.(i) & (ii):
10. In the present case, the plaintiff has established that the hand loan amount was in fact repaid on -8- NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR 18.02.2001 well within period of two years stipulated under contemporaneous re-conveyance agreement vide Ex.P1. This Court deems it fit to extract Ex.P1. The same is extracted which reads as under:
M¥ÀàAzÀ ¥ÀvÀæ ¢£ÁAPÀ: 19-02-1999 "F M¥ÀàAzÀ ¥ÀvÀæ §gÉzÀÄ PÉÆqÀÄwÛgÀĪÀ £Á£ÀÄ ²æà §¸ÀªAÀ vÀgÁAiÀÄ vÀAzÉ AiÀÄAPÀ¥Áà PÉÆ½î ¸Á: gÁªÀÄwÃxÀð vÁ: avÁÛ¥ÀÄgÀ £Á£ÀÄ ¢£ÁAPÀ: 19-2-1999 gÀAzÀÄ gÁªÀÄwÃxÀð UÁæªÀÄzÀ ²æà §zÀÄÝ £ÁAiÀÄPÀ vÀAzÉ oÁPÀÄæ EªÀgÀ C®ÆègÀ (§) UÁæªÀÄzÀ ¸À.£ÀA.198 ªÀÄvÀÄÛ 199 gÀ°è «¹ÛÃtð 7 JPÀgÉ 10 UÀÄAmÉ d«ÄãÀÄ gÀÆ.2,40,800=00 (JgÀqÀÄ ®PÀëzÀ £Á®ªÀvÀÄÛ ¸Á«gÀzÀ JAlÄ £ÀÆgÀÄ gÀÆ¥Á¬ÄUÀ½UÉ) Rjâ¹zÀÄÝ ¢£ÁAPÀ 19-2-2001 JgÀqÀÄ ªÀµÀðzÀ CªÀ¢AiÉƼÀUÉ gÀÆ.2,40,800=00 £À£U À É »AwgÀÄV¹zÀg,É £Á£ÀÄ Rjâ¹zÀ F d«ÄãÀÄ, d«ÄãÀÄ ªÀiÁ°PÀ §zÀÄÝ £ÁAiÀÄPÀ¤UÉ ©lÄÖ PÉÆqÀÄvÉÛãÉAzÀÄ M¦àPÉÆArgÀÄvÉÛãÉ. M¥ÀàAzÀ (2) gÀ°è F ªÉÄÃ¯É ¸ÀÆa¹zÀ d«ÄãÀÄ gÀf¸ÀÖgU À ÁV RZÁðzÀ MlÄÖ ºÀt gÀÆ.23,000=00 gÀÆ¥Á¬ÄAiÀÄ°è JgÀqÀÄ ªÀµð À UÀ¼À £ÀAvÀgÀ AiÀiÁgÀÄ F d«ÄãÀÄ ElÄÖPÉƼÀÄîvÁÛgÉÆà CªÀgÀÄ CzÀð ºÀt 11,500=00 (ºÀ£ÉÆßAzÀÄ ¸Á«gÀzÀ L£ÀÆgÀÄ gÀÆ¥Á¬Ä) §rØ ºÁQ PÉÆqÀÄvÉÛãÉAzÀÄ M¦àPÉÆArgÀÄvÉÛãÉ.
CªÀ¢Aü iÉƼÀUÉ CªÀgÀ d«ÄãÀÄ £ÀªÀÄä ºÀt £ÀªÀÄUÉ (gÀÆ.2,40,800=00) PÉÆlÄÖ AiÀiÁjUÁzÀgÀÆ ªÀiÁjzÀgÉ £À£Àß -9- NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR vÀPg À ÁgÀÄ E®èªAÉ zÀÄ £À£Àß ªÀÄ£À¸ÁgÉ M¦,à F PɼV À £ÀÀ ¥ÀAZÀgÀ ¸ÀªÀÄPÀëªÀÄ §gÉzÀÄ PÉÆnÖzÀÄÝ ¤d«gÀÄvÀÛz.É "
11. The Trial Court, while answering Issue No.2 in the affirmative, categorically held that the plaintiff had proved both Ex.P1 and Ex.P2. Once the contemporaneous agreement dated 19.02.1999 (Ex.P1) is found to be duly proved, and once repayment of Rs.2,40,800/- under Ex.P2 dated 18.02.2001 is also held to be established, this Court is of the considered view that the principles embodied in Section 16(c) of the Specific Relief Act pertaining to readiness and willingness have no application to the present factual matrix. The plaintiff's claim does not arise out of a conventional contract of sale but rests entirely on a covenant for re-conveyance contained in a contemporaneous document executed on the very day of the registered sale deed.
12. The plaintiff unequivocally acknowledges that he executed a registered sale deed on 19.02.1999.
- 10 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR However, his specific case is that the sale was occasioned by financial necessity, and that he secured a hand loan of Rs.2,40,000/- from Baswantraya, the father of the defendants--and that Ex.P1 was simultaneously executed as a collateral agreement obligating Baswantraya to re- convey the property upon repayment of the amount within two years. Once Ex.P1 is held proved, and once it is accepted that the defendants received Rs.2,40,800/- on 18.02.2001 and even executed Ex.P2 acknowledging such receipt, the very foundation on which the Courts below invoked Section 16(c) becomes unsustainable.
13. It is also relevant that the decree directing refund of Rs.2,40,800/- which necessarily presupposes proof of repayment has been affirmed by the First Appellate Court. Despite this, both Courts have misdirected themselves by applying the doctrine of readiness and willingness to a case where the plaintiff's cause of action emanates from a covenant to re-convey under a contemporaneous agreement, duly acted upon by
- 11 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR acceptance of repayment within time. The repayment was indisputably made on 18.02.2001, a day prior to the expiry of the stipulated two-year period ending on
19.02.2001, and the defendants voluntarily accepted the amount. Thus, the question of the plaintiff proving continuous readiness and willingness relevant in a standard agreement-to-sell simply does not arise.
14. The doctrine of readiness and willingness is attracted where the plaintiff seeks enforcement of an executory contract for sale, where the defendant's obligation to execute a sale deed arises only upon the plaintiff tendering the balance sale consideration. In such situations, the plaintiff must demonstrate that he was always ready and willing to perform his reciprocal obligations. The present case is fundamentally different:
the covenant to re-convey was conditional only upon repayment within the stipulated period, and the plaintiff has fully complied with that requirement.
- 12 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR
15. In the case at hand, the transaction is essentially one of loan, though cast in the form of a sale with a contemporaneous agreement to re-convey. The execution of the registered sale deed is not in dispute. What the plaintiff asserts is that Ex.P1, executed on the very same day, represents a binding obligation undertaken by Baswantraya to re-convey the suit property upon repayment of the loan amount within two years. Jurisprudence is well settled that where a sale is accompanied by an agreement to re-purchase, the vendor's remedy to enforce the covenant for re- conveyance stands on a distinct footing, and the traditional requirement of proving continuous readiness and willingness may not apply particularly where the plaintiff has, in fact, repaid the amount within the time expressly fixed under the agreement.
16. In the present case, the repayment was made within the stipulated period, acknowledged by the defendants' father under Ex.P2, and later reaffirmed by a
- 13 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR decree for refund. Both Courts, however, failed to appreciate the true nature of the transaction and erroneously applied the doctrine of readiness and willingness, thereby recording findings that are palpably unsustainable. The approach of both Courts in treating the matter as if it were a conventional suit for specific performance of an agreement to sell, rather than enforcement of a reconveyance covenant under a contemporaneous agreement, reflects a clear misapprehension of law.
17. Consequently, the findings of both the Trial Court and the First Appellate Court on Issue No.3 suffer from perversity and are liable to be set aside. Accordingly, substantial question of law No.(i) is answered in the negative, and substantial question of law No.(ii) is also answered in the negative.
Finding on substantial question of law Nos.(iii) and (iv):
18. The Trial Court, while answering Issue No.2 in the affirmative, has categorically held that the plaintiff has
- 14 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR proved the due execution of the contemporaneous document dated 19.02.1999 (Ex.P1), under which Baswantraya, the father of the defendants, expressly undertook to re-convey the suit lands upon repayment of the amount within a period of two years. The Trial Court has further held that Ex.P2 the receipt acknowledging repayment of Rs.2,40,800/- is also duly proved. Once these two documents, which lie at the very core of the plaintiff's claim, are held to be proved, this Court is called upon to examine whether both Courts below committed an error in declining the larger relief of specific performance.
19. The finding on Issue No.1, answered in the negative to the detriment of the plaintiff, is clearly perverse and unsustainable. The Trial Court proceeded on the erroneous assumption that once there exists a registered sale deed purportedly conveying the property absolutely, any plea that the transaction was in the nature of a loan, coupled with a right to seek re-conveyance, becomes inadmissible in view of Section 92 of the Indian
- 15 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR Evidence Act. Such an approach reveals a fundamental misdirection in law. The reliance placed by the Courts below on Section 92 is wholly misplaced. More importantly, Section 90 of the Indian Evidence Act, which deals with presumption as to documents thirty years old, also has no manner of application to the present case.
20. The present transaction, on a proper appreciation of Ex.P1 and surrounding circumstances, is one that must be classified as a sale with an agreement to re-purchase. Where the condition of re-transfer is not incorporated within the body of the sale deed (Ex.D1), but is instead embodied in a separate contemporaneous document such as Ex.P1 executed on the very same day and law does not bar the admissibility of such a document. In such cases, evidence explaining the true nature of the transaction is permissible, and does not contravene Section 92. Thus, the plaintiff's evidence adduced to establish the re-conveyance covenant under Ex.P1 is clearly admissible and legally tenable.
- 16 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR
21. Both the Trial Court and the First Appellate Court appear to have been unduly influenced by the plaintiff's assertion that the sale was occasioned by a hand loan and by the contemporaneous nature of Ex.P1, without undertaking the critical exercise of distinguishing between a mortgage by conditional sale and a sale with a condition to re-purchase. This distinction is a well-settled facet of property law, and failure to advert to these principles has led both Courts below to record findings that are manifestly perverse.
22. The Courts below have, therefore, grossly erred in refusing the relief of specific performance merely on the premise that the registered sale deed executed in favour of the defendants' father was an out-and-out sale, without considering the binding effect of the contemporaneous agreement under Ex.P1. Once Ex.P1 is proved and repayment under Ex.P2 is established, the plaintiff
- 17 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR acquires a right to enforce the covenant of re-conveyance through specific performance.
23. Accordingly, this Court is of the considered view that both Courts below failed to properly appreciate the nature and character of the transaction, and consequently erred in declining the discretionary relief of specific performance. The findings recorded on Issue Nos.1 and 4 are thus perverse and liable to be set aside. Substantial Question of Law Nos.(iii) and (iv) are, therefore, answered in the negative.
24. For the foregoing reasons, this Court passes the following:
ORDER i. The Regular Second Appeal is allowed. ii. The concurrent judgments of both the Courts below are hereby set aside. Suit of the plaintiff is decreed.
- 18 -
NC: 2025:KHC-K:7252 RSA No. 200157 of 2014 HC-KAR iii. The defendants are called upon to execute the sale deed within a period of three (3) months from the date of receipt of certified copy of this judgment.
iv. The plaintiff is entitled to execute the decree, if the defendants fail to execute the sale deed within the stipulated period.
v. Draw decree accordingly.
Sd/-
(SACHIN SHANKAR MAGADUM)
JUDGE
SRT/NB/NJ
List No.: 3 Sl No.: 2
CT:SI