Karnataka High Court
Sri Pawankumar Dalmiya vs Sri Biligowda S/O Late Siddegowda on 11 January, 2021
Equivalent citations: AIRONLINE 2021 KAR 78, 2021 (2) AKR 93
Author: S.Sujatha
Bench: S.Sujatha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF JANUARY, 2021
PRESENT
THE HON'BLE MRS.JUSTICE S.SUJATHA
AND
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
R.F.A.No.1967/2011
BETWEEN :
1. SRI PAWANKUMAR DALMIYA
S/O D.L.DALMIA
AGED ABOUT 51 YEARS
BUSINESSMAN, R/AT No.11
2ND FLOOR, KRISHNA TOWER
3RD MAIN, GANDHINAGAR
BANGALORE-560001.
2. SRI AKBAR BASHA
S/O K.ABDUL JABBAR SAHEB
AGED ABOUT 41 YEARS
BUSINESSMAN, R/AT No.244
100 FT. ROAD, ELIYAS NAGAR CIRCLE
J.P.NAGAR BANGALORE-560010. ...APPELLANTS
(BY SRI P.M.SIDDAMALLAPPA, ADV. FOR M/S. MYLARAIAHA
ASSOCIATES.)
AND :
1. SRI BILIGOWDA
S/O LATE SIDDEGOWDA
AGED ABOUT 67 YEARS
2. SRI MARIYAPPA
S/O LATE SIDDEGOWDA
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AGED ABOUT 67 YEARS
3. SRI SIDDEGOWDA
S/O LATE SIDDEGOWDA
AGED ABOUT 57 YEARS
4. SRI.H.B.PUTTASWAMY
S/O BILIGOWDA
AGED ABOUT 25 YEARS
5. SRI BYRA
S/O MARIGOWDA
AGED ABOUT 30 YEARS
6. SRI AMBARISHA
S/O MARIGOWDA
AGED ABOUT 24 YEARS
7. SRI GIRISHA
S/O SIDDEGOWDA
AGED ABOUT 21 YEARS
ALL ARE R/AT
HOTTEGOWDANA DODDI VILLAGE
ATHAGUR HOBLI, MADDUR TALUK
MANDYA DISTRICT-571428. ...RESPONDENTS
(BY SRI K.V.NARASIMHAN, ADV.)
THIS R.F.A. IS FILED UNDER ORDER 96 READ WITH
ORDER 41 RULE 1 OF CPC, AGAINST THE JUDGMENT AND
DECREE DATED 27.08.2011 PASSED IN O.S.No.6/2009 ON THE
FILE OF THE CIVIL JUDGE [SR.DN] MADDUR, DISMISSING THE
SUIT FOR RECOVERY OF MONEY.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
10.12.2020, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT, THIS DAY, S. SUJATHA, J., DELIVERED THE
FOLLOWING:
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JUDGMENT
This appeal is directed against the judgment and decree dated 27.08.2011 passed in O.S.No.6/2009 on the file of Civil Judge (Sr.Dn.), Maddur ('Trial Court' for short).
2. For the sake of convenience, the parties are referred to as per their status before the Trial Court.
3. The plaintiffs filed suit against the defendants for recovery of Rs.17,40,700/- together with court costs and current interest by way of damages at the rate of 2% per month from the date of suit till the actual date of realisation and also prayed for creation of 1st charge on suit item Nos.4 and 5 for recovery of suit claim.
4. Description of the suit properties are as under:
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SCHEDULE All the landed properties situated in Hottegowdanadoddi village, Athangur Hobli, Maddur Taluk, bearing
1) Sy.No.5/1A measuring 0.22 gts.
2) Sy.No.5/1B measuring 0.36 gts.
3) Sy.No.5/2 measuring 0.29 gts.
4) Sy.No.5/3 measuring 0.29 gts.
5) Sy.No.5/4 measuring 0.29 gts.
All the properties having common boundaries bounded on the East by Property of Plaintiffs, West by Property of Plaintiffs, North by: Property of Pavanikumar Dahnia and property of Ramalingaiah, South by Property of plaintiffs.
5. The plaint averments in brief are that:
The defendants are family members and they had represented to the plaintiffs that they are the absolute owners and in possession of suit properties. The plaintiffs being the neighbouring land holders have agreed to purchase the suit schedule properties. The defendants had assured the plaintiffs that the title -5- deeds and other relevant documents would be furnished for verification before drafting the sale deeds for verification. Believing the said assurance and on the basis of the RTC entries, plaintiffs came forward to purchase the suit properties for valuable consideration of Rs.85,55,000/- pursuant to which registered agreement of sale dated 31.7.2008 was executed by the defendants after receiving the advance amount of Rs.15,00,000/- out of sale consideration by agreeing to execute the registered sale deed within 110 days from the date of the sale agreement. The defendants had further agreed to receive the balance sale consideration before the Sub-Registrar at the time of registration of sale deed.
6. The plaintiffs contended that after execution of the sale agreement, plaintiffs insisted for survey sketch and other documents from the defendants but the same was dodged. The plaintiffs themselves -6- obtained the certified copy of the sale deeds and came to know that the 1st defendant Biligowda had the sale deed in respect of Sy.No.5/4 and 2nd defendant Mariyappa had the sale deed with respect to Sy.No.5/3 and for rest of the properties, no sale deed was found. The plaintiffs having noticed, the defendants had no title deeds or documents except the RTC, got confirmed that the defendants have no saleable interest relating to the suit schedule properties. Hence, the plaintiffs rescinded the contract and got issued notice to the defendants on 12.2.2009 intimating the same and demanding to repay the earnest money deposit with interest.
7. The defendants had issued reply notice asserting their saleable interest and stated that they are ready to execute the sale deed.
8. The plaintiffs averred that the defendants are pretending as absolute owners of the suit schedule properties without the valuable title deeds. Even at the -7- time of filing of the suit, they had no saleable interest. Hence, they were constrained to file the suit seeking for the reliefs sought in the plaint.
9. On issuance of summons, defendant Nos.1 and 4 appeared through their counsel and filed their common written statement admitting the execution of the agreement of sale and receipt of earnest money deposit of Rs.15,00,000/-. The defendants asserted that they are the absolute owners and in possession of the suit schedule properties. All the concerned documents are standing in their names. The plaintiffs being the neighbouring land owners and having knowledge of ownership of the defendants and after verifying the mutation register extracts and RTC extracts, had agreed to purchase the suit schedule properties. The plaintiffs failed to make the payment of Rs.70,55,000/- towards balance sale consideration despite receiving original survey sketch from the defendants.
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10. It was further contended that the defendants were ready to execute the absolute sale deed in favour of the plaintiffs after receiving the balance sale consideration as contemplated under the registered sale agreement.
11. On the basis of the pleadings, following issues were framed:
1) Whether the plaintiffs prove that the defendants are not the owners of all the suit schedule properties, accordingly having no right, title or interest over the same?
2) Whether the plaintiffs further prove that defendants cheated them by their acts and deed and entered into sale agreement dated 31/7/2008 with them?
3) Whether the plaintiffs are entitled for recovery of Rs.17,40,700/ together with 2% interest per month?
4) What order or decree?-9-
ADDITIONAL ISSUES
1) Whether the Court fee paid is insufficient?
12. On behalf of the plaintiffs, plaintiff No.2 was examined as PW-1 and 18 documents were marked. 3rd defendant got examined as DW-1 besides two witnesses DW-2 and DW-3 on behalf of the defendants. 11 documents were marked as Exs.D1 to D11.
13. On appreciation of oral and documentary evidence, the Trial Court answered all the issues in the negative and dismissed the suit with costs.
14. Aggrieved by the said judgment and decree, the plaintiffs have preferred the present appeal.
15. Learned counsel for the plaintiffs argued that the Trial Court grossly erred in dismissing the suit of the plaintiffs ignoring the material evidence on record. The Trial Court erred in holding that the dispute raised by Smt.Sannamma and
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Smt.Marihombamma against the 1st defendant questioning the revenue entries in respect of the suit items 1 and 2 of the suit schedule properties could not be construed as litigation to declare that the defendants have no marketable title over the suit schedule properties.
16. The Trial Court failed to ascertain about the quantum of damages in the event of default on the part of the plaintiffs and defendants in performing their part of contract as agreed under registered agreement of sale dated 31.7.2008. When the agreement is silent on this aspect, the defendants are required to refund the money with interest and they cannot forfeit the earnest money deposit for the default on their part in misrepresenting the plaintiffs regarding their marketable title over the suit schedule properties.
17. Learned counsel for the defendants argued that the Trial Court has analysed the evidence
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profusely to arrive at a conclusion that the plaintiffs themselves rescinded from the contract and refused to get the sale deed executed as per the agreement dated 31.7.2008 and therefore no interference is warranted by this court.
18. It was argued that the original survey sketch obtained on 12.11.2018 was given to the plaintiffs and the same is fortified by the evidence of PW-1 where he has clearly admitted that the survey sketch marked as Ex.D1 might have been given to the plaintiffs. It was submitted that the so called litigation said to have been initiated by Smt.Sannamma and Smt.Marihombamma are set up by the plaintiffs. The said litigation has ended in favour of the defendant No.1 before the Asst. Commissioner, Mandya Division, Mandya, in case No.R.Mis.No.176/2010-11 and R.Mis.No.2178/ 2010-11 dated 2.1.2012 and 27.2.2012 respectively. O.S.No.21/2017 instituted by Smt.Sannamma against
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defendant No.1 Biligowda before the learned Senior Civil Judge & JMFC, Maddur, has been dismissed on 24.9.2019. Hence, the cloud created in the title of the defendants with respect to the suit properties is not well founded.
19. Learned counsel argued that the defendants had valid title deeds, the plaintiffs have obtained certified copy of the sale deeds and were fully aware of the marketable title of the property with the defendants. It is for the first time the plaintiffs have come with a new plea that the mortgage entered by the defendants has not been redeemed. Neither in the notice nor in the plea such ground was taken. There being no escalation in price of the properties, the plaintiffs have stepped back from performing their part of the contract. The plaintiffs being the defaulters, no recovery of the earnest money, much less the interest on the earnest money, could be claimed by them. Learned counsel submitted that the
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defendants were ready and willing to pay the earnest money deposit of Rs.15,00,000/- to the plaintiffs but the plaintiffs having insisted for the interest, the settlement has not fructified. The defendants being poor farmers, they cannot be mulcted with the payment of interest on the earnest money deposit.
20. We have carefully considered the rival submissions of the learned counsel appearing for the parties and perused the original records.
21. The point that arises for our consideration is:
Whether the plaintiffs are entitled to the refund of the earnest money of Rs.15,00,000/- with interest, as claimed by them?
22. The execution of the registered agreement of sale dated 31.7.2008 by the defendants to sell the suit properties for the sale consideration of Rs.85,55,000/-
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and the receipt of the advance amount of Rs.15,00,000/- towards the part sale consideration by the defendants are not in dispute. Ex.P1 is the registered agreement of sale dated 31.7.2008 executed by the defendants in favour of the plaintiffs. The recitals in the said agreement would indicate that the balance amount of Rs.70,55,000/- has to be paid within the period of 110 days at the time of the registration of the absolute sale deed before the Sub-Registrar, Maddur, failing which, the plaintiffs are entitled to initiate legal action for the registration of the absolute sale deed. It was assured that the suit properties are free from encumbrance. In the event any dispute arises, the same would be resolved by them. It was further agreed that at the time of the registration of the absolute sale deed, all the daughters' signatures would be procured by the defendants and the sale deed would be registered in the name of the plaintiffs or their nominees. Defendants keeping the survey sketch ready for registration was a
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condition precedent and the sale consideration would depend upon the measurements found in the survey sketch.
23. The certified copy of the sale deed dated 29.5.1972 executed by Lingaiah and Appaji in favour of Biligowda in respect of Sy.No.5/4 for the sale consideration of Rs.1500/-. Ex.P2 would disclose that the vendors have received Rs.1100/- with a condition that Rs.400/- towards the mortgage amount of the said property has to be paid by the purchaser and the mortgage has to be redeemed but the defendants have not placed any convincing evidence to establish such redemption of mortgage.
24. Ex.P3 is the certified copy of the sale deed dated 21.6.1987 executed by Mariappa, S/o Dasegowda in favour of Mariappa, S/o Mota Siddegowda in respect of Sy.No.5/3 measuring 29 guntas for the sale consideration of Rs.4,000/-. It is the contention of the
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plaintiff that except this sale deed, no other deeds were found for acquiring the suit properties by the defendants, M.R. Extract would show that with the consent of the others only Khatha has been made out in the name of the defendant No.1.
25. Ex.P13 is the notice dated 12.2.2009 issued by the learned counsel for the plaintiffs informing the defendants that the agreement of sale dated 31.7.2008 has been rescinded by the plaintiffs since the defendants are not the absolute owners of the suit schedule properties and received the earnest money of Rs.15,00,000/- falsely representing themselves as the owners. Demand was made for the refund of Rs.15,00,000/- with interest @ 24% p.a. from the date of sale agreement till the repayment to the plaintiffs. Ex.P14 is the reply notice issued by the defendants denying the allegations that they were not the absolute
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owners in possession and enjoyment of the suit schedule properties as alleged in the notice at Ex.P13.
26. I.A.1/2020 has been filed by the defendants under Order 41 Rule 27 r/w Section 151 CPC to produce the following documents as additional evidence.
1. Certified copy of the order dated 27/2/2012 passed by the Assistant Commissioner Mandya Sub Division in proceedings No.R.Mis 178/10-11.
2. Copy of the order dated 2/1/2012 passed by the Assistant Commissioner Mandya Sub Division in proceedings No.R.Mis 176/10-11.
3. Copy of the judgment and decree dated 24/9/2019 in O.S 21/2017 passed by learned Senior Civil Judge, Maddur.
The same being taken on record allowing the I.A., we have examined the said documents also.
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27. These documents are placed on record only to substantiate the stance of the defendants that the litigations said to have been initiated by Smt.Sannamma and Smt.Marihombamma are concluded in favour of the defendants.
27. Ex.D1 is the photocopy of the survey sketch, the copy of which has been obtained from the Survey Department, Maddur on 12.11.2008 but the same does not disclose the exact date on which the said sketch was prepared. Moreover, it is not in the Format 11-E as contended by the learned counsel appearing for the plaintiff.
28. Ex.D2-RTC extract shows the name of the defendant No.1 Biligowda in column Nos.9 and 12 during the year 2008-09. Exs.D4, D6, D8 and D9 are the original sale deeds relating to Sy.Nos.3/4, 21/5, 5/4, 5/3. Ex.D11 is the mutation entry wherein the
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source is reflected as order of D.C. in CSR No.l69/03- 04 dated 19.10.2007.
29. Indisputedly, these documents relate to the post agreement period. The dispute before the Asst. Commissioner, in R.Mis.No.2178/2010-11 in the case of Smt.Marihombamma Vs. Biligowda was dismissed vide order dated 27.2.2012. R.Mis.No.176/2010-11 in the case of Smt.Sannamma Vs. Biligowda and another before the Asst. Commissioner, Mandya was dismissed on 2.1.2012. O.S.No.21/2017 filed by Smt.Sannamma and others against Biligowda has been dismissed on 24.9.2019 on the file of the Senior Civil Judge, Maddur, holding that the plaintiffs have failed to prove their title over the suit schedule property therein-Sy.No.9 [Old Sy.Nos.5/1A and 5/1B) measuring 1 acre 28 guntas situated at Danayakanadoddi Village, Athaguru Hobli, Maddur Taluk and they have also failed to prove their possession over the same as on the date of the suit.
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These documents would certainly indicate that some disputes were pending regarding the suit properties at the time of execution of the agreement of sale [Ex.P1]. What is relevant to consider in a suit for specific performance of contract is the conduct of the parties at the time of entering into the agreement. The plaintiff has rescinded from the contract considering the fact that no title deeds were made available to the plaintiff and on obtaining the certified copies, Ex.D3 alone was found to be free from encumbrance. Hence, the subsequent decisions of the jurisdictional Court/Authority would not fill up the lacuna found at the time of entering into the agreement by the parties.
30. It is admitted by DW1 in his cross examination that one Sri. Puttabasavegowda and his brothers have initiated proceedings before the A.C. for the khatha entered in the name of the defendants. It is also categorically admitted that both the vendors and
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vendee are required to sign to the survey sketch; no such survey sketch was prepared as required for the registration of the sale deed before the Sub-Registrar. DW-2 has stated that agreement of sale was executed on the basis of the RTC records. There is lot of inconsistencies found in the testimony of DW-2 as regards the survey sketch is concerned. DW-3 has stated that the defendants had agreed to furnish the survey sketch within the time prescribed in the agreement of sale. He has pleaded ignorance about the suit schedule properties. The Trial Court committed an error in ignoring this clinching evidence which indeed supports the case of the plaintiffs that survey sketch was not obtained by the defendants in the prescribed format. Though there is a recital in Ex.P1 that the defendants are required to furnish all necessary documents pertaining to suit schedule properties well within the period of 110 days time fixed, the Trial Court holds that there is no reference about the title deeds
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and the documents mentioned in the agreement of sale cannot be construed as the title deeds, in our opinion, the said finding is palpably erroneous. As far as the original title deeds produced at Exs.D4, D6, D8 and D10, the witness DW-1 has stated that Sy.No.5/1B was wrongly typed as Sy.No.3/4 and Sy.No.5/2 was wrongly typed as 21/5. The Trial Court though observing all these inconsistencies, has formed an opinion that no blame can be put on the defendants as the plaintiffs being developers had entered into an agreement with the defendants admittedly looking into the revenue records like RTC and Mutation Register. Thus, held that the allegation of fraud and cheating being not established, question of refunding the earnest money does not arise. We find it hard to concur with this decision in view of the failure on the part of the defendants in performing their part of the contract in as much as making available the documents specified in the agreement of sale within the prescribed period.
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31. It is apt to refer to the case of M.Rathnam S/o late Maya & others Vs. Smt.Susheelamma reported in 2008(5) KCCR 3455, wherein, this court while dealing with the refund of earnest money deposit in the absence of consensual ad-idem contract, where the parties entered into such a contract on mutual mistake, held that the party who had paid advance amount is entitled to the refund of amount with interest @ 6% p.a. from the date of agreement till the date of repayment.
32. Thus, in the absence of any forfeiture clause in the agreement of sale, forfeiting the earnest money deposit by the defendants is not justifiable. There is good reason for the purchasers - appellants to rescind from the agreement of sale. Hence, the dismissal of the suit by the Trial Court certainly calls for interference by this court.
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33. Even in the appeal proceedings, though negotiations were held between the parties for settlement, the same has not been fructified due to some minute difference regarding the rate of interest.
34. Considering the totality of circumstances of the case, we deem it appropriate to direct the defendants to refund Rs.15,00,000/- to the plaintiffs with interest @ 3% p.a. from the date of filing of the suit till its realization keeping in mind the status of the plaintiffs and defendants as developers and farmers respectively. It is made clear that the decretal amount shall be paid by the defendants to the plaintiffs within a period of ninety days from the date of the receipt of the certified copy of the judgment and order failing which a charge shall be created on item Nos.4 and 5 of the suit schedule properties for recovery of decretal amount.
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Hence, the following:
ORDER
1. The appeal is allowed.
2. The impugned judgment and decree dated 27.8.2011 passed in O.S.No.6/2009 on the file of the Civil Judge (Sr.Dn.), Maddur, is set aside.
3. The defendants are directed to refund Rs.15,00,000/- to the plaintiffs with interest at 3% p.a. from the date of filing of the suit till its realisation within a period of six weeks from the date of receipt of the certified copy of the judgment and order failing which a charge shall be created on item Nos.4 and 5 of the suit schedule properties for recovery of decretal amount.
4. Draw modified decree accordingly.
5. No order as to costs.
Sd/-
JUDGE Sd/-
JUDGE Dvr: