Karnataka High Court
Govind N Malu vs Sri Kantappa on 1 December, 2022
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RSA NO.642 of 2009 C/W
RSA No. 641 of 2009
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF DECEMBER, 2022
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
REGULAR SECOND APPEAL NO. 642 OF 2009 (SP)
C/W
REGULAR SECOND APPEAL NO. 641 OF 2009 (SP)
IN RSA NO.642/2009:
BETWEEN:
1. GOVIND N MALU,
S/O NANDA KISHORE MALU,
R/AT NO 139, 3RD MAIN,
9TH CROSS,
CHAMARAJPET,
BANGALORE- 560 018.
...APPELLANT
(BY SRI. MANMOHAN P N, ADVOCATE)
Digitally signed AND:
by BELUR
RANGADHAMA
NANDINI 1. SRI.CHOWDAIAH,
Location: HIGH AGED ABOUT 61 YEARS,
COURT OF
KARNATAKA RESIDING AT UJJANAHALLI,
SATHANOOR HOBLI,
CHANNAPATNA TALUK - 571501.
2. SRI.KANTAPPA,
AGED ABOUT 55 YEARS,
RESIDING AT NO.13,
LIG-D, 1ST MAIN,
KENGERI SATELLITE TOWN,
BENGALURU - 560060.
3. SRI. VISHAKANTAPPA,
RESIDING AT UJJANAHALLI,
SATHNOOR HOBLI,
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RSA NO.642 of 2009 C/W
RSA No. 641 of 2009
CHANNAPATNA TALUK - 571501.
4. SRI. CHAMAIAH,
S/O LATE CHAMUNDAIAH,
AGED ABOUT 56 YEARS,
RESIDING AT NO.136, LIG-D,
IST MAIN, KENGERI SATELLITE TOWN,
BANGALORE - 560 060.
5. SMT.CHANDRAMMA,
D/O LATE CHAMUNDAIAH,
RESIDING AT NO.136, LIG-D,
IST MAIN,KENGERI SATELLITE TOWN,
BENGALURU - 560060.
6. SRI.RAVI KUMAR,
S/O A.S. NARAYANA RAJU,
NO.12/16, 4TH LOOR,
60FT ROAD,
STANBERRY COURT,
SANJAY NAGAR, BENGALURU - 560024.
...RESPONDENTS
(BY SRI. S SUBRAMANYA,ADVOCATE FOR R6,
SRI P SUBRAMANYA BHAT, ADVOCATE FOR R2, R4 AND R5,
R1 - H/S, R3 SERVED)
THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE
JUDGMENT AND DECREE DATED 17.2.2009 PASSED IN
R.A.NO.22/2009 ON THE FILE OF THE PRL. DISTRICT &
SESSIONS JUDGE, BANGALORE RURAL DISTRICT,
BANGALORE, ALLOWING THE APPEAL FILED AGAINST THE
JUDGEMENT AND DECREE DATED 20.12.2008 PASSED IN O.S.
NO.5/2005 ON THE FILE OF THE CIVIL JUDGE (SR.DN)
DODDABALLAPUR.
IN RSA NO.641/2009:
BETWEEN:
1. GOVIND N MALU,
S/O NANDA KISHORE MALU,
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RSA NO.642 of 2009 C/W
RSA No. 641 of 2009
R/AT NO 139, 3RD MAIN,
9TH CROSS,CHAMARAJPET,
BANGALORE- 560 018.
...APPELLANT
(BY SRI. MANMOHAN P N, ADVOCATE)
AND:
1. SRI.CHOWDAIAH,
AGED ABOUT 61 YEARS,
RESIDING AT UJJANAHALLI,
SATHANOOR HOBLI,
CHANNAPATNA TALUK - 571501.
2. SRI.KANTAPPA,
AGED ABOUT 55 YEARS,
RESIDING AT NO.13, LIG-D
1ST MAIN, KENGERI SATELLITE TOWN,
BENGALURU - 560060.
3. SRI. VISHAKANTAPPA,
RESIDING AT UJJANAHALLI,
SATHNOOR HOBLI,
CHANNAPATNA TALUK - 571501.
4. SRI. CHAMAIAH,
S/O LATE CHAMUNDAIAH,
AGED ABOUT 56 YEARS,
RESIDING AT NO.136, LIG-D,
IST MAIN,KENGERI SATELLITE TOWN,
BANGALORE - 560 060.
5. SMT.CHANDRAMMA,
D/O LATE CHAMUNDAIAH,
RESIDING AT NO.136, LIG-D,
IST MAIN,KENGERI SATELLITE TOWN,
BENGALURU - 560060.
6. SRI.RAVI KUMAR,
S/O A.S. NARAYANA RAJU,
NO.12/16, 4TH FLOOR,
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RSA NO.642 of 2009 C/W
RSA No. 641 of 2009
60FT ROAD, STANBERRY COURT,
SANJAY NAGAR,
BENGALURU - 560024.
...RESPONDENTS
(BY SRI. S SUBRAMANYA BHAT, ADVOCATE FOR C/R2,
SRI S SUBRAMANYA, ADVOCATE FOR R6,
R1 AND R3 HELD SUFFICIENT,
SRI M MURALI KRISHNA (GPA HOLDER) )
THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE
JUDGMENT AND DECREE DATED 17.2.2009 PASSED IN
R.A.NO.25/2009 ON THE FILE OF THE PRL.DISTRICT AND
SESSIONS JUDGE, BANGALORE RURAL DISTRICT,
BANGALORE, PARTLY ALLOWING THE APPEAL AGAINST THE
JUDGMENT AND DECREE DATED: 20.12.2008 PASSED IN
O.S.NO.5/2005 ON THE FILE OF THE CIVIL JUDGE (SR.DN)
DODDABALLAPUR.
THESE APPEALS, COMING ON FOR FURTHER HEARING
THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
In RSA No.642/2009 and RSA No.641/2009, the appellant is questioning the divergent findings in RA Nos.22/2009 and 26/2009 respectively on the file of the Principal District Judge, Bengaluru Rural District, Bengaluru. In terms of the impugned judgment and decree dated 17.02.2009 by allowing the appeal filed by defendants No.1 and 2, the suit for the specific performance of the contract is dismissed.
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
2. The suit in O.S. No.5/2005 was filed by the present appellant for the relief of specific performance of the contract dated 04.10.2004. Though there is no specific reference to the date of the agreement in the prayer, from the pleading it is apparent that the suit is filed to enforce the contract dated 04.10.2004 executed by the 1st defendant.
3. The subject matter of the suit is an agricultural land bearing Sy. No.250 measuring 4 acres situated at Kadanoor Village, Doddaballapur Taluk. The plaintiff has sought relief against the first defendant who executed the agreement for sale agreeing to sell the property at a price of Rs.1,80,000/- per acre. Plaintiff claims to have paid Rs.2,00,000/- as advance. Plaintiff was supposed to pay Rs.5,20,000/-. The second defendant is arrayed as he had purchased the suit schedule property from the plaintiff under the registered sale deed dated 06.12.2004 which is registered on 08.12.2004. Admittedly, the defendant had purchased the property before the suit. -6-
RSA NO.642 of 2009 C/W RSA No. 641 of 2009
4. The suit was contested by both the defendants i.e., the first defendant - vendor and the second defendant - subsequent purchaser. The first defendant has admitted the execution of the agreement for sale dated 04.10.2004, however, it is his stand that the time was the essence of the contract. The contract was required to be performed within two months from the date of execution of the agreement and same being not performed he sold the property to the second defendant and has prayed for the dismissal of the suit. He would further contend that he sold the property two days after the expiry of two months period and the 2nd defendant purchased the property for valuable consideration.
5. The second defendant contends that he is the bonafide purchaser for value without notice of the agreement dated 04.10.2004 between the plaintiff and the first defendant. It is also contended that the second defendant purchased the property being the assignee of one Chandrashekar who had entered into an agreement to purchase the suit property on 15.09.1995, from the first defendant.
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
6. The Trial Court has concluded that the transaction between the defendants is not valid. The Trial Court has not accepted the contention of the second defendant that the sale deed is executed in favour of the second defendant as the assignee under the prior agreement for sale dated 15.09.1995, between the first defendant and Chandrashekar. The trial Court has held that the alleged agreement dated 15.9.1995 is not proved. Consequently, the suit is decreed for the specific performance of the contract.
7. Aggrieved by the same, both the defendants independently filed the appeal. The First Appellate Court has reversed the judgment and decree passed by the trial Court and dismissed the suit by allowing the appeal on three grounds, namely;
(i) Plaintiff was not ready and willing to perform his part of the contract
(ii) Second Defendant is a bonafide purchaser for value without notice of the agreement between the plaintiff and first defendant -8- RSA NO.642 of 2009 C/W RSA No. 641 of 2009
(iii) Time was the essence of the contract and the plaintiff not having performed his part of the contract before the stipulated time under the agreement dated 4.10.2004 is not entitled to the relief of specific performance of the contract.
8. These appeals were admitted on 16.11.2010 to consider the following substantial question of law:
"Whether in the face of stipulation in the agreement for the performance of the contract within two months, it could be said that time was the essence of the contract in the light of the judgment of the Supreme Court in the case of GOMATHINAYAGAM PILLAI AND OTHE. V S. PALANISWAMI NADAR (AIR 1967 SC 868]?"
9. Heard Sri Manmohan, learned counsel for the appellants and Sri Subrahmanya Bhat learned counsel for Respondent No.1 and Sri S. Subrahmanya, learned counsel for 2nd respondent.
10. This Court has considered the contentions raised at the bar and perused the impugned judgment and decree -9- RSA NO.642 of 2009 C/W RSA No. 641 of 2009 passed by the First Appellate Court and the pleadings and evidence on record.
11. It is urged by the learned counsel for the appellant that the time was not the essence of the contract and the plaintiff has established his readiness and willingness to perform his part of the contract and also that the second defendant is not a bonafide purchaser for value without notice and he was having the knowledge of the agreement dated 4.10.2004.
12. Learned counsel for the first defendant would submit that time was the essence of the contract that the plaintiff was not ready and willing to perform part of the contract and that the second defendant has purchased the property without notice of the agreement dated 4.10.2004.
13. Considering the evidence led before the trial Court, this Court is of the view that four more substantial questions of law are to be framed in this regard which are as follows.
(i) Whether the plaintiff was always ready and willing to perform his part of the contract?
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
(ii) Whether the second defendant is a bona fide purchaser for value without notice of the agreement dated 4.10.2004?
(iii) Whether the Appellate Court justified in allowing the appeal without discussing evidence relating to the bonafide purchaser though the points for consideration are framed relating to the defence of the bonafide purchaser raised by the 2nd defendant?
(iv) Whether the findings of the trial Court concerning the contentions raised under Section 4 of The Karnataka Schedule Caste and Schedule Tribes (Prohibition of Transfer of Certain Lands) Act, 1977 (''PTCL Act'' for short is properly appreciated by the First Appellate Court?
14. The Court has heard the arguments of the learned counsel for the parties on the additional substantial questions of law framed by this Court.
15. Sri Manmohan, the learned counsel for the plaintiff in support of his submissions would raise the following points:-
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
(i) The first agreement dated 15.9.1995 is a concocted document and attesting witnesses to the documents are not examined. The agreement is not established and the agreement is created with the knowledge that there is an agreement dated 04.10.2004, between the plaintiff and the first defendant and to facilitate the defence that the second defendant was having a prior right to the purchase property based on the alleged agreement for sale dated 15.09.1995.
(ii) The second defendant has not exercised due diligence and has not made necessary inquiries, thus he is not a bondfide purchaser.
(iii) The evidence on record would indicate the agreement dated 15.09.1995 is concocted and an afterthought.
This leads to the logical conclusion that the second defendant had the notice of the agreement dated 04.10.2004.
(iv) Admittedly, the property in question belonged to a person whose caste is a scheduled caste. The property was granted by the government. Under the law
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 applicable, there was a prohibition to alienate the property without the prior permission of the Government. Admittedly on 15.09.1995, there was no such permission. The permission was obtained on 28.01.1998. Thus, the second defendant who claims to have purchased the property under the agreement dated 15.09.1995, cannot have a valid title over the property as the alleged agreement dated 15.09.1995 is void
(v) The fact that the property was purchased within 2 days after the expiry of 2 months stipulated in the agreement dated 04.10.2004, would indicate that the second defendant was aware that there was an agreement between the plaintiff and the first defendant in respect of the very property.
(vi) The First Appellate Court did not consider the point for consideration relating to the defence of bonafide purchaser set-up by the second defendant and without referring to any of the evidence raised before the Court
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 has wrongly concluded the second defendant was a bonafide purchaser for value.
(vii) The First Appellate Court has erroneously held that the plaintiff had only Rs.305/- when the time was stipulated in the agreement to perform his part of the contract in the year 2004. This finding is without any basis and contrary to Ex.D-16 and D-17 placed on record.
(viii) Time is not the essence of the contract in respect of immovable property and more so, in this case, the time stipulated is only on the first defendant and not on the plaintiff to perform his part of the contract as such, the First Appellate Court could not have held that time is the essence of the contract.
16. In support of his contentions, Sri Manmohan, the learned counsel for the appellant cited the following judgments:
1. PRAKASH CHANDRA v ANGADALA AND ORS, REPORTED IN (1979) 4 SCC 393.
2. SUGHAR SINGH v HARI SINGH AND ORS, REPORTED IN (2021) SCC 975.
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
3. SILVEY AND ORS v ARUN VARGHESE AND ANR, REPORTED IN (2008) 11 SCC 45.
6. E.S.RAJAN v R. MOHAN, REPORTED IN (1994) 5 KLJ 357.
7. RAVICHANDRAN (SMT) AND ANR. v ARAVACODE CHAKUNGAL JAYAPALAN, REPORTED IN (2004) 8 SCC 689.
8. SRI K BASAVAIAH v SMT.SUSHEELAMMA, REPORTED IN RFA 1251/2013,
9. MMS INVESTMENTS, MADURAI AND ORS. v V VEERAPPAN AND ORS, REPORTED IN (2007) 9 SCC 660.
10. S.KESHRI HANUMAN GOUD v ANJUM JEHAN AND ORS, REPORTED IN (2013) 12 SCC 64.
11. VENKATANARAYANAPPA v SRI SIDDAPPA, REPORTED IN ILR 2007 KAR 1323.
12. NARAYANAMMA AND ANOTHER v GOVINDAPPA AND OTHERS, REPORTED IN (2019) 9 SCC 42.
17. Learned advocate Sri Subrahmanya Bhat appearing for the first defendant would raise the following contentions:
(i) The agreement dated 4.10.2004 stipulates that the sale deed has to be executed within two months from the date of the agreement and the plaintiff not having come forward to purchase the property by paying the
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 balance consideration amount, the right to enforce the agreement is lost and the first defendant had the right to sell the property to any other person (2) Under the agreement, no condition is attached to the first defendant except to execute the registered sale deed. Under the circumstances, there was no prohibition or constraint for the plaintiff to pay the balance consideration amount within the stipulated period to get the sale deed executed.
18. Learned counsel Sri S. Subrahmanya appearing for the second respondent would raise the following contentions:
(i) The plaintiff has not alleged in his plaint that the second defendant was aware of the contract between the plaintiff and the first defendant relating to the agreement dated 04.10.2004. Thus, the second defendant being aware the sale deed is already executed in favour of the second defendant even before the suit was filed was required to allege that the
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 second defendant had the knowledge of the agreement for sale between the plaintiff and the first defendant.
(ii) Plaintiff who is required to plead and establish the readiness and willingness under Section 16(c) of the Specific Relief Act, is not in a position to establish that he was ready with Rs.5,20,000/- which was required to be paid to the first defendant under the agreement dated 04.10.2004 and as such, the readiness and willingness is not established.
(iii) Under the agreement dated 04.10.2004, time was the essence of the contract and the plaintiff has understood the terms of the agreement as fixing the time as the essence of the contract which can be noticed from the pleadings of paragraph 4 of the plaint.
(iv) Second Defendant purchased the property from the 1st defendant through the intervention of Mr. Chandrashekar who was a party to the agreement dated 15.09.1995. The second defendant proposed to purchase the property from the first defendant and when the property was purchased, there was valid
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 permission from the competent authority to alienate the property.
(v) Referring to the Circular of the Government which deals with the procedure relating to the grant of permission, it is urged that when the permission is granted by the concerned authority, necessary inquiries have to be made by the competent authority as to whether the proposed sale transaction is genuine or not to ensure the person who is selling the property and the fact that the permission was granted in 1998 has to be considered as the permission pursuant to the agreement dated 15.09.1995 as there was no other document placed before the Court to say that the first defendant applied for permission to sell the land based on any other agreement.
19. Learned counsel in support of his case has cited the following judgments:
1. RAM A WADH (DEAD) BY LR'S AND OTHERS VS.
ACHHAIBAR DUBEY AND ANOTHER REPORTED IN (2000) 2 SCC 428.
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
2. MEHABOOB-UR-REHMAN (DEAD) THROUGH LR'S VS.AHSANUL GHANI, REPORTED IN AIR 2019 SC 1178.
3. UMABAI AND ANOTHER VS. NILKANTH DHONDIBA CHAVAN (DEAD) BY LR'S AND ANOTHER REPORTED IN (2005) 6 SCC 243.
4. ANIGLASE YOHANNAN VS. RAMLATHA AND OTHERS REPORTED IN (2005) 7 SCC 534.
5. J.P.BUILDERS AND ANOTHER VS. A RAMADAS RAO AND ANOTHER, REPORTED IN (2011) 1 SCC 429.
6. GOMATHINAYAGAM PILLAI AND OTHERS VS.PALANISWAMI NADAR, REPORTED IN AIR 1967 SC
868.
7. SHENBAGAM AND OTHERS VS. K.K.RATHINAVEL, REPORTED IN 2022 LIVE LAW (SC) 74.
8. U.N.KRISHNAMURTHY (SINCE DECEASED) THR LRS VS.
A.M.KRISHNAMURTHY, REPORTED IN 2022 LIVELAW (SC) 588.
9. KADUPUGOTLA VARALAKSHMI VS. VUDAGIRI VENKATA RAO AND OTHERS, REPORTED IN LL 2021 SC 104.
20. This Court has considered the contentions raised at the bar and considered the ratio laid down in the aforementioned judgments.
21. The First Appellate Court has held that time is the essence of the contract. Normally when it comes to the sale
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 of immovable property, time is not an essence of the contract, however, it can be made as an essence of the contract if the parties intend it to be so. The intention of the parties must be gathered from the agreement, pleadings and the evidence placed on record. The relevant portion of paragraph 4 of the plaint would read as under:
"the plaintiff was due to pay to the 1st defendant, the entire balance amount at the time of registration of the sale deed and the time set was two months from the date of the agreement. However, when Plaintiff approached Defendant to execute the sale deed on 4th December 2004, the 1st Defendant failed to come forward to execute the sale deed as agreed upon by giving some lame excuse".
22. In paragraph 13 the averment is as under:
"13. The cause of action for the Suit arose on 4.10.2004 when the first Defendant entered into a contract of sale with the Plaintiff for the sale of the Schedule Property and on 4.12.2004 when the time for execution of the sale deed was fixed and not acted upon by the Defendant, on 8.12.2004 when the 1st Defendant illegally sold
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 the Property to the 2nd Defendant, and when the 1st Defendant issued a legal notice on 10.12.2004 illegally cancelling the sale agreement dated 4.10.2004 and within the jurisdiction of this Hon'ble Court."
23. Relevant portion of the agreement dated 4.10.2004 which is an undisputed document in this case which is marked at Ex.P.1 reads as under:
" PÀæAiÀÄzÀ E£ÀÄß½PÉ ªÉƧ®UÀÄ ºÀtªÀ£ÀÄß F ¢£ÀzÀ ¯ÁUÁAiÀÄÄÛ 2 (JgÀqÄÀ ) wAUÀ¼ÉƼÀUÁV ¥Àqz É ÀÄPÉÆAqÀÄ jf¸Àg Ö ï ªÀiÁrPÉÆqÀ®Ä §zÀÞ£ÁVgÀÄvÉÃÛ £É."
24. During the course of evidence, the plaintiff has tried to make out a case that time is not the essence of the contract when it comes to the sale of immovable property. Learned counsel for the appellant would further urge that the obligation under Ex.P.1 is cast only on the first defendant to execute the sale deed and there is no obligation to pay the consideration amount within a period of two months from the date of agreement for sale. It is to be noted that this agreement at Ex.P.1 is in first person, executed by the first defendant in favour of the plaintiff. This agreement
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 incorporated several terms and conditions relating to the proposed sale. It also incorporates a condition that the first defendant has agreed to execute the sale deed within two months from the date of the agreement after receipt of the balance consideration amount.
25. This agreement is produced by the plaintiff. The plaintiff is not the signatory to this document. However, in a document of this nature, even though the plaintiff is not the signatory, since the plaintiff is claiming right under this agreement, he is also bound by the terms of the agreement. The condition in the agreement at Ex.P.1 referred to above has to be understood the light of the contentions raised by the plaintiff in his pleading. The plaintiff in his plaint has stated that ''the plaintiff was due to pay to the first defendant, the entire balance amount at the time of registration of the sale deed and the time set was two months from the date of the agreement''. From the pleading in the plaint, no other inference can be drawn except that the plaintiff has treated time as the essence of the contract. This is what the first defendant has precisely
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 contended. For this reason, this Court is of the view that the plaintiff was required to plead and prove that he was ready with the amount as agreed under the agreement under Ex.P.1.
26. The evidence on record would indicate that the plaintiff has not offered to pay the said consideration amount within 2 months as agreed. For this reason, this Court is of the view that the First Appellate Court is justified in concluding that time is the essence of the contract.
27. The principles laid down in the judgment cited by the learned counsel for the appellant are pretty clear. Whether time is the essence of the contract and must be gathered from the intention of the parties. Said intention must be ascertained from the pleadings, terms of the contract and the evidence placed on record. The evidence placed on record and the pleading before the Court, particularly the pleading in the plaint extracted above, would lead to the conclusion that the plaintiff has treated the time as the essence the of contract. Under the circumstances, the findings of the First Appellate Court that time is the
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 essence of the contract. This finding cannot be said to be an impermissible finding or erroneous finding to interfere under Section 100 the of Code of Civil Procedure. The finding that time was the essence of the contract is based on pleading in the plaint and the recital in the agreement. It is not a finding based on either no evidence or no pleading. Assuming that the finding of the trial court that the time was not the essence of the contract is also based on evidence on record, the court in the exercise of jurisdiction under Section 100 of the Code of Civil Procedure cannot interfere with the finding of the appellate court on the premise that that appellate court should have concurred with the finding of the trial court. Such recourse is permissible only if it is shown that the First Appellate Court reversed the finding in the absence of any evidence or acting contrary to the provisions of the law. As already noticed considering the averments in the plaint and recital in the agreement, it cannot be said that the finding of the First Appellate Court is without any basis. Such a view was certainly permissible. Hence this court declines to take a contrary view on the question relating to time being the essence of the contract.
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28. Insofar as the defence relating to the bonafide purchase, raised by the second defendant, there is no doubt that the burden is on the second defendant. The First Appellate Court framed the points for consideration in this regard, however, the findings of the First Appellate Court that the second defendant is the bonafide purchaser for value without notice is without any reasoning. The First Appellate Court has failed to consider the relevant evidence on record and without reference to the evidence has concluded that the second defendant is the bonafide purchaser for value without notice of the agreement dated 04.10.2004.
29. However, this Court has already concluded that time is the essence of the contract as held by the first appellate court. Such being the position the suit must fail as the second defendant has purchased the property after the expiry of the time fixed under the agreement. In such a situation even if it is proved that the second defendant is not a bonafide purchaser the agreement is not enforceable.
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30. As already noticed, the first appellate having framed the point for consideration as to whether the time is the essence of the contract, without assigning reasons held that the time is the essence of the contract. Thus, the first appellate court was under obligation to consider the point. Since the court has held that time was the essence of the contract, there is no scope to remand the matter to consider the said point. Hence this court in the exercise of power under Section 103 the of Code of Civil Procedure has considered the contention on merits.
31. The Trial Court has given a finding that the second defendant is not a bona fide purchaser. The Appellate Court though has reversed the said finding without assigning reasons.
32. The appellants have tried to make out a case that the agreement dated 15.05.1995 is created to create an impression that the said agreement is the agreement before the agreement dated 04.10.2004. According to the appellants if it is established that agreement dated 15.05.1995 is created after the agreement dated
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 04.10.2004, then it would lead to the logical inference that the second defendant had the knowledge relating to the agreement dated 04.10.2004 and that would demolish the defence of the second defendant that he is a bonafide purchaser for value without notice of the prior agreement.
33. The learned counsel for the appellant Sri Manmohan in support of his contentions would urge that the sale deed in favour of the second defendant was executed on 06.12.2004, immediately two days after the expiry of two months period provided in the agreement dated 04.10.2004 and registered on 08.12.2004.
34. Referring to the inconsistencies in the endorsement dated 07.03.1998 in Ex.D.8 and endorsement dated 8.12.2004 in Ex.D.9 found on the agreement dated 15.05.1995 (Ex.D.7), would urge that these factors would establish the fact that the agreement is concocted. It is also his contention that the sale consideration amount mentioned in the agreement, the amount said to have been paid under the endorsements dated 07.03.1998 in Ex.D.8 and 08.12.2004 in Ex.D.9 and the sale consideration amount mentioned in the registered
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 sale deed in favour of the second defendant would not tally. Referring to these circumstances, it is urged that the agreement dated 15.05.1995 is concocted.
35. It is also urged that witnesses to the agreement are not examined and execution of the agreement by the first defendant is not established. It is also urged that inconsistencies are found as to the custody of the original title deed pertaining to the suit property while making an endorsement on the agreement.
36. It is to be noticed that the first defendant has admitted the execution of the agreement dated 15.09.1995. Under the circumstances, the non-examination of witnesses to the said agreement cannot be a ground to disbelieve the agreement when other circumstances are also available to prove the agreement for sale dated 15.09.1995.
37. Learned counsel for the second respondent to substantiate the contention that the agreement was very much executed in the year 1995 would refer to the fact that permission is granted to the first defendant to sell the
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 property. Referring to the circular issued by the Government on 01.01.1990 and 15.06.1998 prescribing the procedure for granting permission in respect of the lands covered by The Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 (''PTCL Act'' for short), it is urged that the concerned authority is bound to consider the agreement to purchase the property to satisfy itself that the transaction is genuine and that the interest of the person belonging to Scheduled Caste or Scheduled Tribe is safeguarded.
38. Elaborating on this, it is urged that permission be granted in the year 1998. The permission granted under the provisions of the PTCL Act would presuppose the existence of an agreement to sell the property. It is urged that except in the agreement dated 15.05.1995, nobody has taken a stand that before 1998, there was one more agreement for sale in respect of the suit property. In this context, it is submitted that the logical conclusion would be that there was an agreement on 15.05.1995 to sell the suit property. This Court finds that there is logic as well as substance in the
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 submission on behalf of the second defendant considering the circular of the government. Mr. Manmohan though raised a grievance that the circular was not part of the evidence. However, the circular is not disputed. Though it is not formally marked in evidence, there is no difficulty in relying on it as it has some force of law.
39. It is also to be noticed that the agreement dated 15.05.1995 is written on stamp paper. To accept the contention that the agreement was created a few months before the sale deed dated 06.12.2004 registered on 08.12.2004 in favour of the second defendant is a bit difficult in the absence of cogent evidence to hold that the agreement was created especially when the stamp paper used in the agreement dated 15.05.1995 is obtained on 09.09.1995. Ex.D-7- the stamp paper is purchased in the name of Sri Kanthappa, the vendor. The minor discrepancies in the evidence relating to the sale consideration amount or ambiguity as to who has paid the sale consideration amount cannot be held against the second defendant to hold that the agreement is created after 2004.
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
40. The agreement holder Chandrashekar is examined as one of the witnesses to prove the execution of the agreement and first defendant the executant has never disputed the agreement for sale dated 15.05.1995. Added to this, it is also to be noticed that though the suit is filed seeking specific performance against the first defendant - vendor and the second defendant - purchaser. The plaintiff in his plaint has never alleged that the second defendant knew about the agreement between the plaintiff and the first defendant. Though it may not be the strict requirement under the law, however in the peculiar circumstances of this case, where the plaintiff has alleged in paragraph No.11 in the plaint that the second defendant in collusion with the 1 st defendant is making all efforts to alienate the suit property to a third party, and on considering the pleading in its entirety, the pleading does not indicate that the second defendant has acted in collusion with the first defendant before purchasing the property in his name. The allegation is that the second defendant in collusion is trying to alienate
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 the property, indicates about the collusion after the registered sale in the name of the second defendant.
41. It is also required to be noticed that the second defendant has tried to make out a case that he purchased the property as an assignee of Chandrashekar the agreement holder under the agreement dated 15.09.1995. Chandrashekar is examined. The first defendant admits the execution of the agreement dated 15.09.1995. Chandrashekar signed as a witness to the sale deed in favour of the second defendant. If the agreement dated 15.09.1995 is valid then the sale in favour of the second defendant becomes valid even if the second defendant was knowing the agreement dated 04.10.2004 as the agreement holder has consented for the sale signing as witness to the sale deed in favour of the second defendant. This of course is subject to the validity of the agreement under Section 4 of the PTCL Act, which is also one of the contentions discussed below.
42. Learned counsel for the appellant has relied upon the judgment of the Apex Court in the case of PRAKASH
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 CHANDRA supra. The said judgment based is on the principle that ordinarily the specific performance is to be granted. The said judgment cannot apply to the facts of this case for the simple reason that the plaintiff is seeking enforcement of the agreement after the stipulated date and against the person who has subsequently acquired the title of the property being unaware of the agreement in favour of the plaintiff.
43. The reliance placed on by learned counsel for the appellant in the case of SUGHAR SINGH supra. Again the said ratio does not apply to the facts of this case as the plaintiff has not established that the second defendant was dishonest in purchasing the property.
44. Referring to the judgment of the Apex Court in the case of CHAND RANI and SWARANAM RAVICHANDRAN and the Judgment of this Court in E S RAJAN supra, it is stated that the fixation of time in the agreement by itself will not make time as the essence of the contract. The intention must be gathered from the attending circumstances. This Court has considered the pleading, the
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 agreement, and the evidence has concluded that time is the essence of the contract.
45. Referring to the judgment of the Apex Court in the case of M M S INVESTMENTS referred supra, it is stated that the plea of readiness and willingness need not be gone into after the sale of the property in favour of the third party. The learned counsel for the second respondent refuting the said contention would refer to the judgment of the Apex Court in the case of RAM AWADH referred supra. It is to be noticed that in the case of M M S Investments supra, the defendants had sold the property after the disposal of the suit by the Trial Court. In the said context, the Apex Court has held that the ratio laid down in the RAM AWADH's case is not applicable. Since the second defendant purchased the property before the filing of the suit and after the expiry of the time stipulated in the agreement for sale, the ratio laid down in the case of RAM AWADH supra would be applicable and not the one in the case of M M S Investments.
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009
46. Learned counsel for the appellant Sri Manmohan referring to the agreement dated 15.9.1995 and referring to the evidence relating to proof of said agreement would contend that the agreement dated 15.9.1995 is not established and he would further contend that the only reason for creating the agreement dated 15.9.1995 is to get over the agreement dated 4.10.2004 which was between the plaintiff and the first defendant as it was within the knowledge of the second defendant.
47. Though the argument seems to be attractive, there is no specific material to hold that the second defendant was put on notice of the agreement dated 04.10.2004. This court for the reasons stated supra has held that there are circumstances to hold that the agreement dated 15.09.1995 was executed in 1995. Even by interpreting some circumstances and evidence if it is possible to take an alternative view that the agreement dated 15.09.1995 might have been created by the first defendant in collusion with the second defendant, to get over the agreement dated 4.10.2004, that is only a plausible
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 alternative view. The same cannot be a reason to set aside the reasoning of the First Appellate Court.
48. The ratio laid down in the case of KONDIBA DAGADU KADAM vs SAVITRI BAI SOPAN GUJAR AND OTHERS reported in (1999)3 SCC 722 would come to the rescue of the second respondent as the finding of the First Appellate Court relating to the question of time being the essence of the contract and the finding relating to the defence of bonafide purchase by the second respondent are based on pleading and evidence available on record. The view taken by the First Appellate Court on these contentious issues cannot be said to be based on inadmissible evidence or no evidence are contrary to the provision of law.
49. So far as the point relating to readiness and willingness to perform the contract is concerned, the First Appellate Court has concluded the plaintiff had only Rs.305/- at the relevant point in time. This finding of the First Appellate Court is contrary to the evidence placed on record. Ex.P. 16 and 17 would reveal that plaintiff is a person of sufficient means. Though the cash in hand and the cash in
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 the Savings Bank were not sufficient to discharge his obligation under the agreement dated 4.10.2004, (The plaintiff was required to pay around 15 lakhs as he was holding similar agreements with the owners of adjoining land) there is material to indicate that he had a sufficient investment in a partnership firm which is said to be the family partnership where the other family members are the partners. The findings of the First Appellate Court that he was not capable of discharging the obligation are erroneous. However, since the Court has concluded that this is the essence of the contract and the second defendant is a bonafide purchaser against whom there cannot be a decree for specific performance, the question of considering the readiness and willingness of the plaintiff to perform his part of the contract does not arise for consideration, as the suit is filed beyond the stipulated period.
50. Sri Manmohan, the learned counsel for the appellant has urged that the agreement dated 15.09. 1995 is void, and since the second defendant has tried to make out a case that he has purchased the property under the
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 agreement dated 15.9.1995, the sale deed in the name of the second defendant must be held as void.
51. In support of his contention, learned counsel for the appellant Mr Manmohan would place reliance on the judgment of this Court in the case of VENKATANARAYANAPPA vs SIDDAPPA reported in ILR 2007 Kar 1323. This Court in the said case was dealing with the validity of the agreement in respect of properties which are governed by the provisions of the PTCL Act. In that case, the agreement was entered into between the parties where the person governed by the said PTCL Act, tried to alienate the property under an agreement for which the provisions of the Act applied. The Court while interpreting the said provision of the PTCL Act has held that the agreement for sale under the provisions of the PTCL Act would also be covered under Section 4 if prior permission is not obtained.
52. In that case, it is to be noticed that the suit was filed to enforce the agreement in respect of property which is covered by the provisions of the PTCL Act and there was no permission when the suit was filed. In this case, it is noticed
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 that the permission is obtained in the year 1998. More importantly, in this case, the suit is not filed to enforce the agreement dated 15.09.1995. In this case, the property is sold after permission is granted in favour of the first defendant and the property is sold by the first defendant to the second defendant to which the agreement holder under the agreement dated 15.09.1995 consented for the sale. Though the agreement dated 15.09.1995 is not enforced in substance same is enforced after obtaining the permission to alienate the property which was granted in 1998. The competent authority has granted permission under the provisions of the PTCL Act to sell the very same property, as such, the contention that the agreement is invalid is not available to the present appellant.
53. The learned counsel for the appellant has relied on the case of NARAYANAMMA AND ANOTHER vs GOVINDAPPA AND OTHERS reported in (2019)19 SCC 42.
In this case, the Hon'ble Apex Court was dealing with the validity of the agreement which was entered into between the parties in respect of the land
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 granted under the provisions of the Karnataka Land Reforms Act. Under Section 61 there is a prohibition to alienate the properties within 15 years from the date of the grant of occupancy. In the said case the agreement was entered into between the parties before the expiry of 15 years and thereafter, the agreement was sought to be enforced, the suit was opposed on the ground that the agreement is invalid. The Apex Court took a view that the agreement was entered within the period of prohibition and the same is invalid in law.
54. In the instant case, the facts are different. In the instant case, the restriction on alienation is with reference to permission by the competent authority. The point to be considered is whether permission is obtained before the property is sold. No doubt it is true that on 15.9.1995 there was no permission to sell the property. However, the permission to sell the property was obtained in 1998 and in the year 2004 the property is sold to the second defendant who is not a party to the agreement dated 15.09.1995. Though the second defendant has tried to make out a case
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 that he is the purchaser from the assignee under the agreement dated 15.9.1995, what is to be seen is when the second defendant purchased the property there was permission to purchase the property and the second defendant is not a party to the agreement dated 15.9.1995. Chandrashekar who is said to be a party to the agreement dated 15.9.1995 has given up his claim over the property and the parties to the agreement dated 15.9.1995 are not trying to enforce the agreement in the Court of law. The person who has sold the property has obtained the necessary permission. The second defendant entered the scene after the first defendant obtained permission. The competent authority has granted the permission. Thus, the contention that the sale deed has to be treated as invalid by applying the ratio in NARAYANAMMA's case supra is not acceptable.
55. For the aforementioned reasons, the substantial questions of law framed by this Court are answered as above
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RSA NO.642 of 2009 C/W RSA No. 641 of 2009 in favour of the respondents and against the appellants.
Hence, the following:
ORDER The appeals are dismissed.
Sd/-
JUDGE brn/gvp