Bangalore District Court
Sri K.Ramachandra vs Smt.Lakshmi Agarwal on 27 August, 2016
Form No.9
(Civil) Title
Sheet for
Judgment
in Suits
R.P. 91
PRESENT: SRI S.H.HOSAGOUDAR,
B.Sc.,LL.B.,[Spl]
XXVII Additional City Civil Judge.
Dated this the 27th day of August 2016
PLAINTIFF: Sri K.Ramachandra,
Aged about 46 years,
S/o late Sri K.Ramanjaneyalu,
R/at No.24, 4th Block,
4th Cross, Kumara Park West,
Bangalore-560 020.
[By Sri YHG, Advocate]
/v e r s u s/
DEFENDANTS: 1. Smt.Lakshmi Agarwal,
Aged about44 years,
Wife of Shri Sankarlal Agarwal,
R/at 144, Ground Floor,
10th A Cross, 1st Phase,
J.P.Nagar,
Bangalore-560 078.
2. Smt. K.Padma,
Major in age,
Father name not known to
The plaintiff, Residing at
No.11/7, Out House,
Opposite Raghavendraswamy
Temple, Magadi main Road,
Near Prasanna Theatre,
Bangalore-560 023.
2 CT0028_O.S._9443_2004_Judgment_
.
3. State Bank of India, Bangalore City Branch, J.C.Road, Bangalore-560 002 Represented by its Branch Manager, As the Principal Officer.
4. The Recovery Officer, Debts Recovery Tribunal, Krishi Bhavan, Hudson Circle, Bangalore-560 001.
D1 - By Sri SRR, Advocate D2 - By Sri GMN, Advocate D3 - By Sri MK, Advocate D4 - Exparte Date of institution of the : 18/12/2004 suit Nature of the suit : For specific performance Date of commencement of : 7/8/2010 recording of the evidence Date on which the : 27/8/2016 Judgment was pronounced.
: Year/s Month/s Day/s
Total duration
11 8 9
(S.H. Hosagoudar)
XXVII ACCJ: B'LORE.
Plaintiff filed the suit against defendants
directing the first defendant to perform her part of the 3 CT0028_O.S._9443_2004_Judgment_ .
contract as per terms and condition agreed upon by her under agreement of sale dated 25/11/2003 by executing proper and legal valid sale deed in favour of the plaintiff and getting it registered before concerned Sub Registrar and on failure of the first defendant, the court may be executed proper sale deed in respect of schedule property in favour of plaintiff at the cost and expense of the plaintiff and if court comes to the conclusion that specific performance of agreement of sale dated 25/11/2003 cannot be granted under any circumstances, the court may pass a decree directing the first defendant to refund advance amount of Rs.10,00,000/- together with interest at the rate of 25% per annum on the advance amount from the date of suit till the date of realization and for Permanent Injunction restraining the second defendant from making further payments to the third and fourth defendant and also for Permanent Injunction restraining the fourth defendant from accepting further payment from second defendant and also 4 CT0028_O.S._9443_2004_Judgment_ .
restraining fourth defendant from confirming sale of suit schedule property in favour of second defendant and cost of the suit.
2. In brief, the plaintiff's case is as under:
That the first defendant is the owner of suit schedule property and she entered into registered agreement to sell dated 25/11/2003 with the plaintiff agreeing to sell suit schedule property for sale consideration amount of Rs.14 lakhs and plaintiff has paid Rs.10 lakhs as advance towards sale consideration to the first defendant on different dates by cash and through cheque.
The first defendant has acknowledged the receipt of Rs.10 lakhs as advance amount and undertook to execute sale deed within one year from the date of this agreement. In part performance of the contract, first defendant delivered to the plaintiff the original title deeds and other documents such as katha certificate relating to suit schedule property and first defendant has also put the plaintiff in possession of the first 5 CT0028_O.S._9443_2004_Judgment_ .
floor of the suit schedule property on 1/1/2004 in part performance. The plaintiff has always been ready and willing to perform his part of the contract and he was always ready to pay balance consideration amount and to obtain registered sale deed in his name.
That the plaintiff was shocked to see the public notice in Deccan Herald dated 21/11/2004 issued by third defendant for recovery of the certain alleged amount become due from one M/s Tubeman Pvt. Ltd., company of which first defendant was one of the Directors. In order to execute the recovery certificate issued by the Debt Recovery Tribunal at Bangalore under DCP No. 2549 claimed to be have been obtained by third defendant against aforesaid company and another along with first defendant. The fourth defendant who is the Executing Officer has made the said application by public notice in order to bring the suit schedule property for sale by conducting public auction. Accordingly, fourth defendant had executed 6 CT0028_O.S._9443_2004_Judgment_ .
an auction and second defendant has been accepted as highest bidder. Upon enquiries, it was ascertained that suit schedule property is not at all subject to any kind of charge, mortgage, encumbrance or claim or demand by the third defendant. The third and fourth defendant by violating the rules and regularizations had maneuvered to bring the suit schedule property for public auction without there being any mortgage of the suit schedule property in favour of third defendant. Hence plaintiff filed this suit seeking enforcement of agreement of sale dated 25/11/2003 and for decree of Permanent Injunction to restrain the second defendant who claims to have become successful bidder in the public action conducted by fourth defendant and also for a decree of Permanent Injunction restraining the fourth defendant from accepting the any further payment from second defendant and from confirming the sale of suit schedule property in favour of second defendant. Hence this suit.
7 CT0028_O.S._9443_2004_Judgment_ .
3. In response to the summons issued by the Court, defendant no.1 to 3 appeared through their counsel and filed separate written statement, whereas defendant no.4 did not appear and contest the case of plaintiff. Hence, defendant no.4 has been placed exparte. In brief, the contents of the written statement filed by defendant no.1 are as under:
The first defendant has signed the document purported to be an agreement of sale dated 25/11/2003 and same is registered. Although there is a registered sale agreement, it was clearly understood between the parties that plaintiff is giving money to the first defendant to overcome certain extraordinary urgent financial problems and the first defendant returning the amount along with interest at the rate of 15% per annum. The plaintiff would not have any right over the suit schedule property. The plaintiff had insisted for agreement of sale to be executed for the security of the money advanced. The agreement of sale not intended to be acted upon. It is true that plaintiff 8 CT0028_O.S._9443_2004_Judgment_ .
has totally paid Rs.10 lakhs to the first defendant on various dates. The first defendant has paid interest at the rate of 12% per annum at the rate of 12 months. On payment of balance amount, the plaintiffs shall have no right whatsoever to have a sale deed to be executed. All the recitals in the agreement of sale is of no consequences in as much as it was absolutely clear between plaintiff and first defendant that the transaction was money lending transaction and not a transaction of agreement of sale.
It is respectfully submitted that enforcement of alleged agreement of sale would cause extraordinary hardship to the first defendant since suit schedule property is worth more than Rs.45 lakhs. Hence there could not have been any agreement of sale for Rs.14 lakhs. That the plaintiff is a money lender. The first defendant was in very bad need of funds. The plaintiff could have dominated the Will of first defendant taking advantage of the extreme bad financial situation of the first defendant. Under these 9 CT0028_O.S._9443_2004_Judgment_ .
circumstances sale agreement could not have been intended to be acted upon and said agreement is void being brought by practicing undue influence. The plaintiff was never ready and willing to perform his part of the contract and at no point of time plaintiff has offered to pay balance sale consideration as per agreement in question. On the contrary, plaintiff always pleaded that he does not have any funds. On these grounds, defendant no.1 prays for dismissal of the suit.
4. In brief, the contents of the written statement filed by the second defendant are as under:
That the suit of the plaintiff is not maintainable either in law or on facts. That the plaintiff in collusion with first defendant in order to cheat the Bank and also to the second defendant has filed this false suit. That defendant no.1 availed loan from Bank of Baroda, Kempegowda Road Branch by mortgaging the suit schedule property and she became defaulter to the Bank and Bank of Baroda filed application under 10 CT0028_O.S._9443_2004_Judgment_ .
Section 19 of the Act and Debt Recovery Tribunal issued recovery certificate in favour of Bank of Baroda by order dated 25/2/2003 and the amount due is quantified as Rs. 44,21,771/- as on 31/8/2001.
That first defendant obtained loan from third defendant and there also first defendant became defaulter. That third defendant also approached Debt Recovery Tribunal for issuance of recovery certificate. That third defendant filed application on 29/6/2000 and said application came up before Presiding Officer on 6/9/2000 and Tribunal granted Temporary Injunction on 6/9/2000 against the first defendant and others restraining them from alienating or otherwise dealing with the suit schedule property. That finally Tribunal issued Recovery Certificate in favour of State Bank of India by its order dated 16/1/2003. But, first defendant did not pay the amount to the Bank and thereafter fourth defendant called for public auction to sell the suit schedule property mortgaged by first defendant in 11 CT0028_O.S._9443_2004_Judgment_ .
O.A.No.256/2000. That the said auction notice was published in the Deccan Herald on 22/11/2004. As per said notice, second defendant participated in the public auction held on 9/12/2004 and second defendant is the highest bidder in the public auction and hence fourth defendant sold the suit schedule property to the second defendant as per terms and condition of the public auction dated 9/12/2004. Thereafter, fourth defendant issued sale certificate in favour of second defendant on 17/2/2005 and therefore defendant no.2 is the bonafide purchaser of the suit schedule property and she is the absolute owner of the same. The plaintiff is not entitled for specific performance of contract as sought for since fourth defendant already sold the suit schedule property in favour of second defendant in the public auction and issued sale certificate. On these grounds, defendant no.2 prays for dismissal of the suit.
5. In brief, the contents of the written statement filed by the defendant no.3 are as under:
12 CT0028_O.S._9443_2004_Judgment_ .
The third defendant has denied the entitlement of plaintiff for enforcement of agreement to sell dated 25/11/2003 and it is contended that said agreement is in collusion between plaintiff and first defendant and utmost it could be a loan transaction between plaintiff and first defendant. It is contended that there was an interim order passed by the Debt Recovery Tribunal in O.A.No.256/2000 on 21/9/2000 restraining first defendant from alienating the suit schedule property and it had issued recovery certificate against first defendant and others and in the execution of recovery certificate, the fourth defendant issued an order of attachment of schedule property in Form No.16 and 17 of Income Tax Act and Rules and same has been served upon first defendant. That the public auction notice had been notified in newspaper and auction was conducted by fourth defendant in accordance with RDD and F5 Act 1993 r/w Income Tax Rules. The plaintiff did not prefer any claim before recovery officer who conducted public 13 CT0028_O.S._9443_2004_Judgment_ .
auction inspite of the notice of auction and there is a lack of diligence on the part of plaintiff. It is contended that in view of the order of injunction in O.A No.256/2000 and in view of the order of attachment issued by fourth defendant under Form No.16 and 17 of Income Tax Rules, the first defendant had no right to execute agreement of sale dated 25/11/2003.
It is contended that third defendant Bank being a Financial Institution has acted in good faith and in bonafide way to secure its money by attachment and sale of schedule property and conduct of third defendant Bank in getting the schedule property attached and getting the schedule property sold in public auction is legally valid and therefore plaintiff is not entitled for the relief of specific performance of contract. On these grounds, defendant no.3 prays for dismissal of the suit.
6. On the basis of the pleadings of the parties, my predecessor in the office has framed following issues issues:
14 CT0028_O.S._9443_2004_Judgment_ .
(1) Whether the plaintiff proves that defendant No.1 has executed agreement of sale dated 25/11/2003 by agreeing to sell the suit schedule property to him?
(2) Whether plaintiff proves that he has made part payment of the Rs.10 lakhs in part performance of the agreement in question?
(3) Whether plaintiff further proves that he was/he is always ready and willing to perform his part of contract?
(4) Alternatively whether plaintiff is entitled for refund of Rs.10 lakhs from defendant No.1?
(5) Whether plaintiff is entitled for interest at 21% per annum on the above said sum?
(6) Whether plaintiff is entitled for relief of Permanent Injunction, against defendant No.2 to restrain defendant No.2 from making further payments to defendants 3 and 4 towards completion of the sale of suit schedule property?
(7) Whether plaintiff is entitled for the relief of Perpetual injunction to restrain defendant No.4 from accepting further 15 CT0028_O.S._9443_2004_Judgment_ .
payment from the defendant No.2 or her representatives towards the completion of the sale of suit schedule property?
(8) Whether plaintiff is entitled for the relief of Permanent Injunction against defendant No.4 to restrain it from confirming the sale of the suit schedule property in favour of defendant No.2?
(9) Whether defendant No.2 proves that defendant No.1 had obtained loan from Bank of Baroda, K.G.Road, Bangalore by mortgaging the suit schedule property?
(10) Whether defendant No.2 proves that defendant No.1 had also availed loan from defendant No.3 State Bank of India?
(11) Whether defendant No.2 proves that she is a bonafide purchaser of the suit schedule property?
(12) Whether defendant No.3 proves that the alleged agreement of sale dated 25/11/2003 between plaintiff and defendant No.1 is a collusive document?
(13) What decree or order?
16 CT0028_O.S._9443_2004_Judgment_ .
7. In this case, plaintiff in order to prove its case he examined himself as PW.1 and he produced in all 7 documents which are marked as Ex.P1 to Ex.P7 and closed his side of evidence. On the other hand defendant no.2 examined herself as DW.1 and produced in all 18 documents which are marked as Ex.D1 to Ex.D18 and closed her side of evidence. Defendant no.1 and 3 have not adduced any evidence.
8. Heard arguments on both sides and perused entire records of the case.
9. My findings on the above issues are as under:
Issue No. 1) ............ In the affirmative; Issue No. 2) ............ In the affirmative; Issue No. 3) ............ In the negative; Issue No. 4) ............ In the affirmative; Issue No. 5) ............ Partly in the affirmative; Issue No. 6) ............ In the negative; Issue No. 7) ............ In the negative; Issue No. 8) ............ In the negative; Issue No. 9) ............ In the affirmative; Issue No. 10) ............ In the negative; 17 CT0028_O.S._9443_2004_Judgment_ .
Issue No. 11) ............ In the affirmative; Issue No. 12) ............ In the affirmative; Issue No. 13) ............ As per final order;
for the following:
10. ISSUES 1 AND 2: Now I will consider both the issues together for the sake of brevity and convenience and as evidence is also common.
11. It is the case of the plaintiff that defendant no.1 has executed agreement of sale dated 25/11/2003 by agreeing to sell suit schedule property for total sale consideration amount of Rs.14 lakhs. Further it is the case of the plaintiff that he has made part payment of Rs.10 lakhs in part performance of the agreement.
12. In this case, defendant no.1 appeared through her counsel and filed written statement denying the case of plaintiff. Defendant No.1 contended that she has signed document purported to be an agreement of sale dated 25/11/2003 and the 18 CT0028_O.S._9443_2004_Judgment_ .
same is registered and although there is a registered sale agreement it was clearly understood between the parties that plaintiff is giving money to the first defendant to overcome certain extraordinary urgent financial problem and first defendant returning amount along with 15% interest per month. She admitted that she has received amount of Rs.10 lakhs from the plaintiff. But, she contended that she has paid interest at 15% per annum for 12 months.
13. She further contended that the alleged transaction took place between plaintiff and defendant no.1 was money lending transaction and not a transaction of agreement of sale.
14. In this case, Power of Attorney holder of plaintiff examined himself as PW.1. He filed affidavit evidence in lieu of his examination-in-chief. In his examination-in-chief, he reiterated the plaint averments. He produced registered agreement of sale which is marked as Ex.P2. In the cross-examination, 19 CT0028_O.S._9443_2004_Judgment_ .
he stated that he do not know that defendant no.1 has refunded Rs.10 lakhs to one Srinivas. In this case, defendant no.1 did not enter into witness box and not adduced any evidence in support of her contention. In this case defendant no.2 who is auction purchaser examined herself as DW.1. She deposed that sale agreement dated 25/11/2003 between plaintiff and first defendant being a fraudulent and collusive document.
15. I have perused entire evidence on record. In this case, PW.1 has produced agreement of sale which is marked as Ex.P2. It is a registered agreement of sale. On perusal of the same, it clearly shows that defendant no.1 has executed agreement of sale agreeing to sell suit schedule property in favour of plaintiff for total sale consideration amount of Rs.14 lakhs. Further this Ex.P2 also clearly shows that defendant no.1 has received advance amount of Rs.10 lakhs from the plaintiff.
20 CT0028_O.S._9443_2004_Judgment_ .
16. In this case, even though defendant no.1 contended that the transaction took place between herself and plaintiff was money transaction, but defendant no.1 did not enter into witness box and not stated the facts on oath and defendant no.1 has not at all adduced any evidence in support of her contention. Hence I draw adverse inference against defendant no.1. In this case, defendant no.1 has not seriously denied the execution of agreement of sale as per Ex.P2. The contention of the defendant no.1 is that although there is a registered sale agreement it was clearly understood between the parties that plaintiff is giving money to first defendant to overcome certain extraordinary urgent financial problem and said transaction is a money transaction. But, in this case defendant no.1 has not adduced any evidence in support of her contention. Admittedly, Ex.P2 is a registered document. Defendant no.1 has not seriously denied the execution of Ex.P2. Hence, on perusal of evidence on record, it is much clear that, 21 CT0028_O.S._9443_2004_Judgment_ .
defendant no.1 has executed agreement of sale as per Ex.P2 in respect of the suit schedule property in favour of plaintiff.
17. Further, Ex.P2 also clearly shows that as on the date of execution of the sale deed, defendant no.1 has received advance amount of Rs.10 lakhs from the plaintiff. Defendant no.1 in her written statement clearly admitted that she has received Rs.10 lakhs from the plaintiff. Hence from the evidence on record it is much clear that, defendant no.1 has executed agreement of sale dated 25/11/2003 by agreeing to sell the suit schedule property in favour of plaintiff and she has also received Rs.10 lakhs from the plaintiff in part performance of contract. Plaintiff proved issues 1 and
2. Accordingly, I answer issues 1 and 2 in the affirmative.
18. ISSUE NO.3: In this case plaintiff contended that he was/is always ready and willing to 22 CT0028_O.S._9443_2004_Judgment_ .
perform his part of the contract. Defendant no.1 contended that plaintiff was never ready and willing to perform his part of the contract and at no point of time plaintiff has offered to pay balance sale consideration as per agreement in question. While answering issue no.1, it is held that defendant no.1 has executed agreement of sale as per Ex.P2 in favour of plaintiff by receiving part sale consideration amount of Rs.10 lakhs. Ex.P2 shows that defendant no.1 has agreed to sell the suit schedule property for total sale consideration amount of Rs.14 lakhs. The evidence on record shows that plaintiff has paid Rs.10 lakhs and he has to pay remaining balance amount of Rs.4 lakhs to the plaintiff. As per agreement, defendant no.1 has agreed to execute sale deed within one year from the date of execution of the sale deed.
19. In this case, plaintiff got examined his GPA holder as PW.1. He filed affidavit evidence in lieu of his examination-in-chief. In his examination-in-chief, 23 CT0028_O.S._9443_2004_Judgment_ .
he reiterated the contention taken in the written statement. In the cross-examination he stated that prior to filing of the suit, plaintiff has not issued any legal notice calling upon defendant no.1 to execute sale deed by receiving sale consideration amount, but he stated that they have orally asked the defendant no.1 to execute the registered sale deed. The evidence on record clearly shows that plaintiff has not at all issued any notice to the defendant no.1 calling upon her to come and execute registered sale deed in terms of agreement of sale by receiving balance sale consideration amount.
20. Further evidence on record clearly shows that even prior to filing of the suit also plaintiff has not at all issued any legal notice to the defendant no.1 to come and execute the sale deed by receiving balance sale consideration amount. This aspect of the matter clearly shows that plaintiff was not ready and willing to perform his part of the contract. If really he 24 CT0028_O.S._9443_2004_Judgment_ .
was ready and willing to perform his part of the contract, then he could have issued notice to the defendant no.1 calling upon her to come and execute the registered sale deed by receiving balance sale consideration amount, but plaintiff has not issued any such notice to the defendant no.1.
21. It is also important to note that, even prior to filing of the suit also plaintiff has not issued any notice to the defendant no.1 to come and execute the sale deed. It clearly shows that plaintiff was not at all ready and willing to perform his part of the contract. In this case, PW.1 in his cross-examination stated that they have orally informed the defendant no.1 to come and execute the registered sale deed. But, this evidence of PW.1 is not supported by any cogent material. Under such circumstances, it cannot be said that plaintiff has asked the defendant no.1 to come and execute the registered sale deed as per agreement of sale.
25 CT0028_O.S._9443_2004_Judgment_ .
22. In this case plaintiff has produced bank statement which is marked as Ex.P3. It shows that plaintiff was having money to pay the balance sale consideration amount. But, evidence on record clearly shows that even though plaintiff was having money but he has not at all enforced the contract and he has not at all called the defendant no.1 to come and execute the registered sale deed within a period of one year as per terms of agreement. Under such circumstances even though plaintiff was having money to pay the balance sale consideration amount, but it cannot be said that he was ready and willing to perform his part of the contract since he has not at all demanded the defendant no.1 to come and execute the registered sale deed by issuing legal notice.
23. It is pertinent to note that, Section 16 (c) of Specific Relief Act deals regarding concept of readiness and willingness on the part of offeree. The cumulative reading of Section 16(c) makes it clear that 26 CT0028_O.S._9443_2004_Judgment_ .
if plaintiff is not ready and willing to perform his part of contract as per terms of contract, then there is a specific bar for the decree of Specific Performance of contract and it cannot be enforced.
24. I have perused entire evidence on record. Plaintiff in his plaint pleaded that he has always been ready and willing to perform his part of the contract. But in this case, evidence on record plaintiff has not at all issued any legal notice calling upon the plaintiff to come and execute the sale deed within one year from the date of execution of agreement of sale. Even plaintiff has not issued any notice prior to filing of this suit to the defendant no.1 to calling upon her to come and execute the registered sale deed. Hence it cannot be said that plaintiff was / is ready and willing to perform his part of the contract. No doubt, there is no straight jacket formula for the mode of proof of readiness and willingness. However, it must be determined from the entirety of facts and 27 CT0028_O.S._9443_2004_Judgment_ .
circumstances of the case relevant to the intention and conduct of the parties are concerned.
25. In this case, evidence on record clearly shows that plaintiff has not at all issued any legal notice on the basis of Ex.P1 to the defendant no.1 to come and execute the sale deed. In this case, defendant produced order passed by the Hon'ble High Court of Karnataka in W.P.No.14876/2008 which is marked as Ex.D18. The Hon'ble High Court of Karnataka in the said order, it is held that the alleged agreement of sale i.e., Ex.P2 is not a genuine document.
26. In this case, defendant no.2 is the auction purchaser of the suit schedule property. Agreement of sale is dated 25/11/2003. The evidence on record clearly shows that suit schedule property was attached in favour of Bank of Baroda on 10/7/2003 in O.A.No.6/2001 and this was earlier to the alleged agreement of sale dated 25/11/2003. The said order 28 CT0028_O.S._9443_2004_Judgment_ .
of attachment was subsisting on 28/5/2004 when order of attachment in respect of same property was also made in favour of State Bank of India in O.A.No.256/2000. The contention of the plaintiff that order of attachment in favour of Bank of Baroda cannot be taken into consideration and it will not ensure to the benefit of order of attachment in favour of State Bank of India dated 28/5/2004.
27. It is pertinent to note that, according to Section 64 of C.P.C, plaintiff cannot contend that the said provision is made applicable to him and his agreement for sale was earlier to the order of attachment in respect of the property in question. Further, evidence on record clearly shows that agreement of sale took place during the pendency of proceedings pending before DRT.
28. It is also important to note that, Debt Recovery Tribunal has issued recovery certificate on 16/1/2003 in favour of State Bank of India who is 29 CT0028_O.S._9443_2004_Judgment_ .
defendant no.3 in the said O.A., in respect of the suit schedule property and on 25/2/2003, recovery certificate was issued by DRT in O.A.No.6/2001 in favour of Bank of Baroda.
29. It is also important to note that, when there was an injunction order against defendant no.1 not to alienate suit schedule property and when there was an order of attachment in two cases, one in favour of Bank of Baroda and another in favour of State Bank of India, nevertheless alienation of property was sought to be effected by defendant no.1 in favour of plaintiff. Under such circumstances, it cannot be said that plaintiff was / is ready and willing to perform his part of the contract. The evidence on record clearly shows that plaintiff was very much aware about the auction conducted by the Bank and plaintiff also participated in the said auction.
30. Further evidence on record clearly shows that defendant no.2 is the auction purchaser of the 30 CT0028_O.S._9443_2004_Judgment_ .
suit schedule property for valuable consideration. It appears that as plaintiff was aware about the said auction proceedings and hence has not issued notice to the defendant no.1 before filing of the suit for calling upon her to come and execute the sale deed. Hence from the evidence on record it is much clear that, plaintiff was not ready and willing to perform his part of the contract. Plaintiff failed to prove issue No.3. Accordingly, I answer issue no.3 in the negative.
31. ISSUE NO. 6 TO 8: Now, I will consider these issues together prior to considering issue no.4 and 5. In this case, plaintiff has sought for the relief of Permanent Injunction restraining second defendant from making any further payments to third and fourth defendants by remitting balance amount for completion of the sale of suit schedule property in her favour. Further, plaintiff also sought for Permanent Injunction restraining the fourth defendant from 31 CT0028_O.S._9443_2004_Judgment_ .
accepting any further payment from second defendant. Plaintiff also sought for Permanent Injunction restraining the fourth defendant from confirming the sale of the suit schedule property in favour of the second defendant. The evidence on record clearly shows that defendant no.2 is the auction purchaser of the suit schedule property and she participated in the auction purchase conducted by the Bank and purchased the suit schedule property in the public auction.
32. Further, evidence on record clearly shows that Debt Recovery Tribunal issued recovery certificate in favour of Bank of Baroda by order dated 25/2/2003 and the amount due quantified as Rs.44,21,771 as on 31/8/2001. That the first defendant obtained the loan from the third defendant. The evidence on record also shows that third defendant approached Debt Recovery Tribunal for issue of recovery certificate and third defendant filed 32 CT0028_O.S._9443_2004_Judgment_ .
application on 29/6/2000 and finally Tribunal issued recovery certificate in favour of State Bank of India by its order dated 16/1/2003. Therefore, fourth defendant called for public auction to sell the schedule property mortgaged by the first defendant in O.A.No.256/2000 and said auction notice was published in Deccan Herald on 22/11/2004 and as per the said notice, second defendant participated in the public auction held on 9/12/2004 and second defendant is the highest bidder in the public auction and hence fourth defendant has sold the suit schedule property to the second defendant as per terms and condition of the public auction dated 9/12/2004 and fourth defendant issued sale certificate in favour of second defendant on 17/2/2005. In this case second defendant examined herself as DW.1. She produced recovery certificate and sale certificate which are marked as Ex.D1 and Ex.D9 respectively. The evidence on record clearly shows that defendant no.2 is the auction purchaser and she has paid amount 33 CT0028_O.S._9443_2004_Judgment_ .
and obtained sale certificate in respect of the suit schedule property. Therefore, the permanent injunction sought by the plaintiff does not survive for consideration since already transaction took place between defendant no. 2 to 4. Plaintiff failed to prove issue no.6 to 8. Accordingly, I answer issues 6 to 8 in the negative.
33. ISSUE NO.9 AND 10: Now, I will consider both these issues together for the sake of brevity.
34. Defendant No.2 contended that defendant no.1 has obtained loan from Bank of Baroda, K.G.Road, Bangalore by mortgaging the suit schedule property. Further, defendant no.2 contended that defendant no.1 has also availed loan from defendant no.3 State Bank of India.
35. In this case, even though defendant no.1 appeared through her counsel and filed written statement, but in her written statement she has not at 34 CT0028_O.S._9443_2004_Judgment_ .
all denied regarding availment of loan from Bank of Baroda, Bangalore by mortgaging the suit schedule property and also not denied regarding availment of loan from defendant no.3 State Bank of India. Hence from the evidence on record, it is much clear that, defendant no.1 had obtained loan from Bank of Baroda by mortgaging the suit schedule property and she has also availed loan from defendant no.3 State Bank of India.
36. In this case, defendant no.2 examined herself as DW.1. She filed affidavit evidence in lieu of her examination-in-chief. She produced documents which are marked as Ex.D1 to Ex.D17. Ex.D1 is the recovery certificate; Ex.D4 is the recovery certificate in DCP 5559 in O.A.No.256/2000; Ex.D5 is the order of attachment in O.A.No.256/2000; Ex.D8 is the order of confirmation official and Ex.D9 is the sale certificate. On perusal of the documents produced by the defendant no.2, it is much clear that defendant no.1 35 CT0028_O.S._9443_2004_Judgment_ .
had obtained loan from Bank of Baroda, K.G.Road, Bangalore by mortgaging the suit schedule property. Further evidence on record clearly shows that defendant no.1 also availed loan from defendant no.3 State Bank of India.
37. It is pertinent to note that during the cross- examination of DW.1, advocate for plaintiff suggested that defendant no.1 has obtained loan from third defendant by mortgaging the suit schedule property and for which DW.1 admitted that defendant no.1 has obtained loan from third defendant by mortgaging the suit schedule property. Hence above suggestion of advocate for plaintiff itself clearly shows that defendant no.1 has obtained loan from third defendant by mortgaging the suit schedule property.
38. In this case even though defendant no.1 has filed written statement, but she did not enter into witness box and she has not denied about the availment of loan from Bank of Baroda and State 36 CT0028_O.S._9443_2004_Judgment_ .
Bank of India by mortgaging the suit schedule property. On perusal of the entire evidence on record it is much clear that, defendant no.1 has availed loan from Bank of Baroda and State Bank of India by mortgaging the suit schedule property. Plaintiff proved issues 9 and 10. Accordingly, I answer issues 9 and 10 in the affirmative.
39. ISSUE NO.11: Defendant No.2 contended that she is the bonafide purchaser of the suit schedule property. In this case, defendant no.2 examined herself as DW.1. She filed affidavit evidence in lieu of her examination-in-chief. In her examination-in-chief, she reiterated the contention taken in the written statement. She produced documents which are marked as Ex.D1 to Ex.D17.
40. In the cross-examination, she stated that she do not know that defendant no.1 has executed agreement of sale in favour of plaintiff. While answering issue no.9 and 10, it is held that defendant 37 CT0028_O.S._9443_2004_Judgment_ .
no.1 had availed loan from the Bank of Baroda, K.G.Road, Bangalore and from the State Bank of India by mortgaging the suit schedule property.
41. In this case, evidence on record clearly shows that defendant no.1 even though availed loan by mortgaging the property in favour of State Bank of Baroda and State Bank of India but she became defaulter. Thereafter, Bank of Baroda filed application under Section 19 of the Debt Recovery Act and Debt Recovery Tribunal issued recovery certificate in favour of Bank of Baroda by order 25/2/2003 and amount due quantified as Rs.44,21,771/- as on 31/8/2001.
42. Further, evidence on record clearly shows that as defendant no.1 became defaulter, third defendant Bank approached Debt Recovery Tribunal for issue of recovery certificate and the said application came up before Debt Recovery Tribunal and after hearing Tribunal issued recovery certificate in favour of State Bank of India by its order dated 38 CT0028_O.S._9443_2004_Judgment_ .
16/1/2003. Thereafter, fourth defendant called for public auction to sell the schedule property mortgaged by first defendant in O.A.No.256/2000 and said auction notice was published in Deccan Herald on 22/11/2004. Evidence on record clearly shows that second defendant no.2 participated in the said public auction held on 9/12/2004 and she is the highest bidder in the public auction and fourth defendant sold the suit schedule property to the second defendant as per terms and condition of the public auction dated 9/12/2004. Thereafter, fourth defendant issued sale certificate in favour of second defendant on 17/2/2005. The evidence on record also clearly shows that defendant no.2 by availing loan has paid the amount to purchase the suit schedule property. Hence from the evidence on record it is much clear that defendant no.2 is the bonafide purchaser of the suit schedule property.
39 CT0028_O.S._9443_2004_Judgment_ .
43. It is also important to note that, in this case defendant no.2 produced the order passed by the Hon'ble High Court of Karnataka in W.P.No.14876/2008 which is marked as Ex.D18. The Hon'ble High Court of Karnataka while disposing of the said writ petition also held that present defendant no.2 is the bonafide purchaser of the suit schedule property. The said writ petition is pertaining to suit schedule property. The Hon'ble High Court of Karnataka in the above said writ petition after elaborately discussing the all the aspect of the matter has held that present defendant no.2 who is the petitioner in the said writ petition is the bonafide purchaser of the suit schedule property. Hence on perusal of the entire evidence on record, it is much clear that, defendant no.2 is the bonafide purchaser of suit schedule property.
44. In this case, plaintiff has not adduced any cogent evidence on record to show that defendant no.2 40 CT0028_O.S._9443_2004_Judgment_ .
is not the bonafide purchaser of suit schedule property. Hence in the absence of cogent evidence by the plaintiff, it cannot be said that defendant no.2 is not bonafide purchaser of the suit schedule property. On the other hand, on perusal of the entire evidence on record adduced by both the parties, it is much clear that, defendant no.2 is the bonafide purchaser of the suit schedule property in a auction conducted by the Bank. Defendant no.2 proves issue no.11. Accordingly, I answer issue no.11 in the affirmative.
45. ISSUE NO.12: Defendant no.2 and 3 contended that alleged sale agreement dated 25/11/2003 between plaintiff and defendant no.1 is collusive document. In this case, defendant no.2 examined herself as DW.1. In her evidence she deposed that agreement of sale dated 25/11/2003 is a collusive document.
46. It is pertinent to note that, evidence on record clearly shows that there was an interim order 41 CT0028_O.S._9443_2004_Judgment_ .
passed by the Hon'ble Debt Recovery Tribunal in O.A.No.256/2000 on 21/9/2000 restraining the first defendant from alienating the suit schedule property and it has issued recovery certificate against first defendant and others.
47. Further, in the execution of recovery certificate, fourth defendant issued an order of attachment of schedule property in form no.16 and 17 of Income Tax Act Rules and same has been served upon first defendant. Further, evidence on record clearly shows that public auction notice had been notified in the newspaper and auction was conducted by the fourth defendant in accordance with RDD and F5 Act, 1993 r/w Income Tax Rules. It appears that plaintiff did not prefer any claim before recovery officer who conducted the public auction inspite of notice of auction and there is a lack of diligence on the part of the plaintiff.
42 CT0028_O.S._9443_2004_Judgment_ .
48. Further, evidence on record clearly shows that there was an injunction order in O.A.No.256/2000 and in view of the order of injunction in O.A.No.256/2000 and in view of the order of the attachment issued by fourth defendant under form No.16 and 17 of Income Tax Rules, the first defendant had no right to execute agreement of sale dated 25/11/2003 in favour of plaintiff. The evidence on record clearly shows that third defendant Bank being a financial institution had acted in good faith and in bonafide way to secure its money by attachment and sale of the schedule property and conduct of third defendant in getting the schedule property attached and getting the schedule property sold in public auction is legal and valid. Under such circumstances, it appears from the evidence on record that the agreement of sale dated 25/11/2003 entered into between plaintiff and defendant no.1 is not appears to be genuine document.
43 CT0028_O.S._9443_2004_Judgment_ .
49. It is also important to note that as per Section 64 of C.P.C, private alienation of property after attachment to be void. In this case, suit schedule property was attached in favour of Bank of Baroda on 10/7/2003 in O.A.No.6/2001 and this was earlier to the alleged agreement of sale dated 25/11/2003. Further, evidence on record clearly shows that said order of attachment was subsisting on 28/5/2004 when order of attachment in respect of the same property was also made in favour of State Bank of India in O.A.No.256/2000. Plaintiff raised the contention that order of attachment in favour of Bank of Baroda cannot be taken into consideration and it will not ensure the benefit of order of attachment in faavour of State Bank of India.
50. It is pertinent to note that, according to Section 64 of the C.P.C, plaintiff cannot contend that said provision is made applicable to him and his agreement of sale was earlier to the order of 44 CT0028_O.S._9443_2004_Judgment_ .
attachment in respect of property in question. Further, evidence on record clearly shows that alleged transaction of agreement of sale took place during the pendency of proceedings pending before DRT. Hence it was hit by Section 52 of the T.P.Act.
51. It is also important to note that, on 29/6/2000, the State Bank of India filed O.A.No.256/2000 before DRT and application was filed under Section 19 (2) of RDDBFI Act was also filed by the Bank seeking Temporary Injunction against defendant no.1 restraining her from alienating the suit schedule property during the pendency of the said proceedings. On 21/9/2000, DRT granted injunction order against defendant no.1 from alienating the suit schedule property. On 16/1/2003 recovery certificate was issued by DRT in favour of State Bank of India in the said O.A. in respect of the property in question and on 25/2/2003, recovery certificate was issued by DRT in O.A.No.6/2001 in 45 CT0028_O.S._9443_2004_Judgment_ .
favour of Bank of Baroda. The main contention of the plaintiff that order of attachment in favour of Bank of Baroda on 10/7/2003 will not ensure to the benefit of order of attachment made in favour of State Bank of India on 28/5/2004.
52. It is also contention of the plaintiff that agreement of sale dated 25/11/2003 was earlier to the order of attachment granted subsequently on 28/5/2004 in favour of State Bank of India in O.A.No.256/2000. It is pertinent to note that, said contention of the plaintiff is not maintainable in view of the Rule 51 of Part III regarding attachment and sale of immovable property in Schedule -II laying the procedure for recovery of tax under Income Tax Act, 1961. Though order of attachment in favour of State Bank of India is subsequent. According to the contention of plaintiff it shall relate back and take effect from the date on which notice to pay the arrears 46 CT0028_O.S._9443_2004_Judgment_ .
was issued under the schedule and was served upon defaulter.
53. It is pertinent to note that, even the order of attachment in favour of Bank of Baroda which was admittedly earlier to the alleged agreement of sale would ensure to the benefit of order of attachment granted subsequently in favour of State Bank of India on 28/5/2005.
54. Further, evidence on record clearly shows that when there was an injunction order against defendant no.1 not to alienate the property and when there was an order of attachment in two cases i.e., one in favour of Bank of Baroda and another in favour of State Bank of India, nevertheless alienation of property was sought to be effected by defendant no.1 in favour of plaintiff. Hence from the evidence on record, it is much clear that, defendant no.1 alleged vendor of the plaintiff has committed fraud on the State Bank of India. The principles of Section 52 of 47 CT0028_O.S._9443_2004_Judgment_ .
the T.P.Act is also on the foundation that one party to the proceedings cannot commit fraud on the other party during the pendency of proceeding before the court.
55. The alleged transaction of agreement of sale between plaintiff and defendant no.1 in respect of the very property which was attached and purchased by defendant no.2 that was confirmed, make it clear that it is only with an intention to overcome the statutory provisions and to have the wrongful gain in the matter. Hence from the evidence on record it is much clear that, the agreement of sale entered into between the plaintiff and defendant no.1 is a collusive document and not a genuine transaction. Defendant no.2 and 3 proves issue no. 12. Accordingly, I answer issue no.12 in the affirmative.
56. ISSUE NO.4, 5 AND ISSUE NO.13: In this case, plaintiff sought for the relief of specific performance of contract directing the defendant no.1 48 CT0028_O.S._9443_2004_Judgment_ .
to execute the registered sale deed in respect of the suit schedule property in favour of plaintiff after receiving balance sale consideration amount failing which sale deed may be executed through the agency of the court. Plaintiff also alternatively sought for the relief of refund of earnest money of Rs.10 lakhs together with interest thereon at the rate of 24% per annum from the date of suit till the date of realization.
57. Now I will consider whether plaintiff is entitled for the relief of Specific Performance of Contract or not. While answering issue no.1 it is held that defendant no.1 has executed agreement of sale dated 25/11/2003 agreeing to sell the suit schedule property in favour of plaintiff. Further while answering issue no.2 it is held that defendant no.1 has received advance amount of Rs.10 lakhs from the plaintiff towards part performance of contract. While answering issue no.3 it is held that plaintiff has failed to prove his readiness and willingness to perform his 49 CT0028_O.S._9443_2004_Judgment_ .
part of the contract. While answering issue no.12 it is held that alleged agreement of sale dated 25/11/2003 between plaintiff and defendant no.1 is a collusive document. From the evidence on record it is much clear that, plaintiff was not at all ready and willing to perform his part of the contract.
58. It is pertinent to note that, Section 16(c) of Specific Relief Act deals regarding concept of readiness and willingness on the part of offeree. The cumulative reading of Section 16 (c) makes it clear that if plaintiff is not ready and willing to perform his part of the contract as per terms of contract, then there is a specific bar for a decree of specific performance of contract and it cannot be enforced. While answering issue no.3 it is held that plaintiff has failed to prove his readiness and willingness to perform his part of contract. Therefore, plaintiff is not entitled for the relief of specific performance of contract as sought for. Moreover, while answering 50 CT0028_O.S._9443_2004_Judgment_ .
issue no.12 it is also held that agreement of sale dated 25/11/2003 is a collusive document.
59. It is also important to note that, the Hon'ble High Court of Karnataka in a Writ Petition No.14876/2008 dated 18/12/2014 [Ex.D18] also held that alleged agreement of sale is not a genuine document. Hence from the evidence on record it is much clear that, agreement of sale is not a genuine document and it is a collusive document and therefore plaintiff is not entitled for the relief of specific performance of contract as sought for.
60. While answering issue no.2 it is held that defendant no.1 has received advance amount of Rs.10 lakhs from the plaintiff under Ex.P2. Therefore, plaintiff is entitled for the refund of advance amount of Rs.10 lakhs from the defendant no.1.
61. In this case plaintiff claimed interest at the rate of 24% per annum on the advance amount of Rs.10 lakhs from the date of suit till the date of 51 CT0028_O.S._9443_2004_Judgment_ .
realization. Looking to the facts and circumstances of the case and considering the nature of transaction it is just and proper to award interest at the rate of 10% per annum on the advance amount. Therefore, plaintiff is not entitled for the relief of specific performance of contract, but in the alternatively plaintiff is entitled for refund of advance amount of Rs.10 lakhs together with interest thereon at the rate of 10% per annum from the date of suit till the date of realization of the entire amount. The evidence on record clearly shows that defendant no.2 is the bonafide auction purchaser of the suit schedule property. Plaintiff is not entitled for the relief against defendant no.2 to 4. Hence suit of the plaintiff is liable to be dismissed against defendants 2 to 4 but defendant no.1 is liable return advance amount of Rs.10 lakhs together with interest thereon at the rate of 10% per annum from the date of suit till realization of the entire amount to the plaintiff. Accordingly, I answer issue no.4 in the affirmative, issue no.5 partly 52 CT0028_O.S._9443_2004_Judgment_ .
in the affirmative. The suit of the plaintiff is deserves to be decreed in part only to the extent of refund of advance amount together with interest against defendant no.1. Hence, in the result I proceed to pass the following:
The suit of the plaintiff is partly decreed with costs as under.
Defendant no.1 is hereby directed to refund advance amount of Rs.10 lakhs together with interest thereon at the rate of 10% per annum from the date of suit till realization of the entire decreetal amount to the plaintiff.
The reliefs sought by the plaintiff with regard to specific performance of contract and Permanent Injunctions are hereby dismissed.
Further, suit of the plaintiff is hereby dismissed against defendants 2 to 4 without any order as to costs.
Defendant no.1 alone is hereby directed to pay the cost of the suit to the plaintiff.
53 CT0028_O.S._9443_2004_Judgment_ .
Draw decree accordingly.
*** [Dictated to the Judgment Writer directly on computer, Script corrected, signed and then pronounced by me, in the Open Court on this the 27th day of August 2016.] [S.H. HOSAGOUDAR] XXVII Additional City Civil Judge.
BANGALORE.
1. List of witnesses examined on behalf of the Plaintiff/s:
PW.1 K.Prasad
2. List of witnesses examined on behalf of the Defendant/s:
DW.1 Padma
3. List of documents marked on behalf of the Plaintiff/s:
Ex.P 1 GPA
Ex.P 2 Registered agreement of sale
Ex.P 3 Bank statement commencing from
1/4/2004 to 31/3/2010
Ex.P 4 Katha extract
Ex.P 5 Tax paid receipt
Ex.P 6
And Encumbrance Certificates
Ex.P 7
54 CT0028_O.S._9443_2004_Judgment_
.
4. List of the documents marked for the defendants:
Ex.D1 Agreement of sale dated 8/8/2002 [marked in cross-examination of Pw.1] Ex.D2 Revocation Deed [marked in cross-
examination of Pw.1]
Ex.D1 Recovery certificate
Ex.D2 Order sheet in O.A.No.256/00
Ex.D3 Temporary Injunction order in
O.A.No.256/00
Ex.D4 Recovery certificate DCP 5549 in
O.A.No.256/00
Ex.D5 Order of attachment in
O.A.No.256/00
Ex.D6 Sale proclamation
Ex.D7 Order dated 10/2/2005 in
O.A.No.256/00
Ex.D8 Order of confirmation of sale
Ex.D9 Sale certificate
Ex.D10 Interim order in W.P.No.8632/05
Ex.D11 Final order in W.P.No.8632/05
Ex.D12 Interim order in W.P.No.25499/05
Ex.D13 Final order in W.P.No.25499/05
Ex.D14 Order sheet in I.R.No.154/05
Ex.D15 Order in AOR No.6/06
Ex.D16 Order in W.P.No. 1767/06
Ex.D17 Order sheet in W.P.No.2992/06
Ex.D18 Certified copy of W.P.No.14876/08
[S.H. HOSAGOUDAR]
XXVII Additional City Civil Judge, BANGALORE.
55 CT0028_O.S._9443_2004_Judgment_ .
...Judgment pronounced in the Open Court.... (Vide separate detailed judgment) The suit of the plaintiff is partly decreed with costs as under.
Defendant no.1 is hereby directed to refund advance amount of Rs.10 lakhs together with interest thereon at the rate of 10% per annum from the date of suit till realization of the entire decreetal amount to the plaintiff.
The reliefs sought by the plaintiff with regard to specific performance of contract and Permanent Injunctions are hereby dismissed.
Further, suit of the plaintiff is hereby dismissed against defendants 2 to 4 without any order as to costs.
Defendant no.1 alone is hereby directed to pay the cost of the suit to the plaintiff.
Draw decree accordingly.
[S.H.HOSAGOUDAR] XXVII Additional City Civil Judge.
BANGALORE.
58 CT0028_O.S._9443_2004_Judgment_ .
59 CT0028_O.S._9443_2004_Judgment_ .