Karnataka High Court
M.Mohammed Rafi vs N. Mahadev @ Nanjangud N. Mahadev on 27 September, 2024
Author: S.G.Pandit
Bench: S.G.Pandit
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NC: 2024:KHC:40436-DB
RFA No. 1780 of 2013
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF SEPTEMBER, 2024
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE C.M. POONACHA
REGULAR FIRST APPEAL NO. 1780 OF 2013 (SP)
BETWEEN:
M.MOHAMMED RAFI
S/O MOHAMMED SAAB
DECEASED BY LR,
1. SMT NASEEMA BANU
W/O LATE MOHAMMED RAFI,
AGED ABOUT 44 YEARS
2. AYESHA M,
D/O LATE MOHAMMED RAFI,
AGED ABOUT 14 YEARS
Digitally
signed by 3. HASHFA M R
BHARATHI S
Location: D/O LATE MOHAMMED RAFI,
HIGH AGED ABOUT 13 YEARS
COURT OF
KARNATAKA
4.PAAHEEK HUSSAIN
S/O LATE MOHAMMED RAFI
AGED ABOUT 9 YEARS
APPELLANT NO.2 TO 4 ARE MINORS
THROUGH LEGAL GUARDIAN,
APPELLANT NO.1 -4 ARE R/O . 2ND CROSS,
JCR LAYOUT, CHITRADURGA 577101.
...APPELLANTS
(BY MISS. BHAVANA PATIL, ADVOCATE A/W
SRI P S MALIPATIL.,ADVOCATE FOR LRs)
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NC: 2024:KHC:40436-DB
RFA No. 1780 of 2013
AND:
1. N. MAHADEV @ NANJANGUD N. MAHADEV
S/O LATE V NANJASHETTY
AGED ABOUT 57 YEARS
2. SMT PREETHI N
W/O N MAHADEV
AGED ABOUT 46 YEARS
BOTH ARE R/A NO.2872
NEAR DEEPTHI COMPUTER CENTRE
2ND CROSS, PAMPAPATHI ROAD
SARASWATHIPURAM
MYSORE-570009
3. SMT D MOHINI
W/O LATE DR V NAGASHETTY
AGED ABOUT 63 YEARS
R/O D.NO.8, 3RD MAIN
PARAMAHAMSA ROAD
YADAVAGIRI MYSORE-570001
...RESPONDENTS
(BY SMT B V VIDYULATHA.,ADVOCATE FOR R1 & R2
SRI P MAHADEVSWAMY, ADVOCATE FOR R3)
THIS RFA IS FILED U/SEC.96, R/W O-41, RULE-1 OF CPC.,
AGAINST THE JUDGMENT AND DECREE DATED 12.08.2013 PASSED
IN O.S.21/2010 ON THE FILE OF SENIOR CIVIL JUDGE AND JMFC,
NANJANGUD, PARTLY DECREEING SUIT FOR SPECIFIC
PERFORMANCE AND ETC.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.G.PANDIT
and
HON'BLE MR JUSTICE C.M. POONACHA
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NC: 2024:KHC:40436-DB
RFA No. 1780 of 2013
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE C.M. POONACHA) The present appeal is filed by the plaintiff under Section 96 of the Code of Civil Procedure, 19081 challenging the judgment and decree dated 12.08.2013 passed in O.S.No.21/2010 by the Senior Civil Judge and JMFC, Nanjangud2, wherein the suit for specific performance filed by the plaintiff has been partly decreed by the Trial Court holding that the plaintiff is entitled for refund of earnest money of `2,00,000/- together with interest at 6% p.a, from the date of agreement till its realization.
2. For the sake of convenience, the parties herein are referred as per their rank before the Trial Court.
3. It is the case of the plaintiff that he was well acquainted with defendant No.1 and that defendant No.1 approached the plaintiff as he was in need of money. That defendant No.1 made it known to the plaintiff that he had entered into an Agreement with one Dr. V. Nagashetty with respect to agricultural land measuring 1 acre 28 guntas in 1 Hereinafter referred to as the 'CPC' 2 Hereinafter referred to as the 'Trial Court' -4- NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 Sy.No.597 and 1 acre 4 guntas in Sy.No.598/1 in Kalale Village, Kasaba Hobli, Nanjangud Taluk3 and that defendant No.3 had agreed to execute the Sale Deed in respect of suit property in favour of the plaintiff. That in view of the request made by defendant No.1, the plaintiff entered into an Agreement of Sale dated 24.12.2006 with defendant No.1 whereunder he agreed to purchase the suit property for a total consideration of `15,30,000/- and an advance of `2,00,000/- was paid on the date of Agreement. That the remaining sum of `13,30,000/- was agreed to be paid on the date of registration of Sale Deed.
4. It is the further case of the plaintiff that he has made further payments to defendant No.1 both by way of cash as well as cheques of the entire sale consideration. The details of the alleged further payments are enumerated at para No.6 of the plaint. It is the further case of the plaintiff that defendant No.1 demanded payment of additional sale consideration since the prices of properties around the suit property have increased. It is further contended that despite various demands made by the plaintiff for completion of sale transaction and execution of the Sale Deed, the defendants have been, on one 3 Hereinafter referred to as the 'Suit property' -5- NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 pretext or the other dodging the matter and hence, the plaintiff got issued a legal notice dated 15.02.2010.
5. It is the further case of the plaintiff that defendants have failed to perform their part of contract and that the plaintiff was always ready and willing to perform his part of contract. That defendant No.3 who is the wife of Dr. V. Nagashetty has executed the Sale Deed in favour of defendant No.2 who is the wife of defendant No.1 and that they have colluded with defendant No.1 to defeat the rights of the plaintiff. Hence, the plaintiff filed a suit against all the defendants for specific performance as also claiming alternate relief of refund of the advance amount together with interest at 18% per annum.
6. Defendant Nos.1 and 2 entered appearance and filed their written statement denying the case of the plaintiff. It is denied that defendant No.1 approached the plaintiff seeking monetary assistance. It is further denied that defendant No.1 ever offered to sell the suit property in favour of the plaintiff. However, it is contended that on the persuasion of the plaintiff, defendant No.1 executed an Agreement of Sale in favour of the -6- NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 plaintiff and that the plaintiff was fully aware that defendant No.1 was not the owner of the property and was merely an agreement holder of the suit property. It is the further case of the said defendants that the plaintiff had represented that the advance amount paid under the Agreement was to be appropriated by defendant No.1 towards other dues payable by the plaintiff to defendant No.1. It is denied that defendant No.1 has demanded additional consideration.
7. It is the specific case of the said defendants that the plaintiff and defendant No.1 had a business relationship and that the plaintiff was in dire need of money for purchase of construction material and was not getting any credit facilities from any supplier for purchase of the said construction materials required by him. That defendant No.1, at the request of the plaintiff and in order to assist, accommodate and save the plaintiff from suffering loss and damages in his business, procured the construction materials for and on behalf of the plaintiff and from time to time the cost incurred by defendant No.1 in the purchases made by him on behalf of the plaintiff was reimbursed by the plaintiff. That in the context of reimbursing and repaying the cost of purchase of construction -7- NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 materials, the plaintiff has made certain payments to defendant No.1. It is further contended that the legal notice dated 15.02.2010 has been suitably replied by defendant No.1. Hence, defendant Nos.1 and 2 seek for dismissal of the suit.
8. Defendant No.3 entered appearance in the suit and filed her written statement denying the case of the plaintiff. It is the specific contention of defendant No.3 that she was not aware of the Agreement between the plaintiff and defendant No.1 and she is not a party to the same. It is further averred that her husband Dr. V. Nagashetty is the paternal uncle of defendant No.1 and that he has agreed to sell the suit property in favor of defendant No.1. That the husband of defendant No.3 died on 10.07.2007 leaving behind his wife i.e., defendant No.3 and their daughter as his legal heirs. That as required by defendant No.1, defendant No.3 executed the Sale Deed of the suit property in favour of defendant No.2. The other allegations in the plaint have been denied by defendant No.3. Hence, defendant No.3 also sought for dismissal of the suit.
9. The Trial Court considering the pleading of the parties, framed the following issues and additional issues: -8-
NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 "(1) ಾ ಯು ಾಂಕ 24/12/2006 ರಂದು ಾ ಮತು ಪ ಾ 1 EªÀgÀ ಮ ೆ ಅದಂತಹ ಕ ಯದ ಕ ಾರು ¥ÀvÀæ ಾನೂನುಬದ ಾ ರುತ ೆಂದು ರುಜು ಾತುಪ ಸುವ ೇ ?
(2) ಾ ಮತು ಪ ಾ 1 ಇವರ ಮ ೆ 24/12/2006 ರಂದು zÁ ಾ ಆ% ಬ&ೆ' ರೂ.15,30,000/- ೆ( ಕ ಯ ೆ( ೊಡಲು ಒ,- ಅಂ ೇ ರೂ.2,00,000/-
ಮುಂಗಡ ಹಣವನು0 ಪ1ೆದು ೊಂ ರು2ಾ ೆಂದು ರುಜು ಾತುಪ ಸುವ ೇ ?
(3) ಾ ಕ ಯದ ಕ ಾರು ಪತ ದ ಪ ಾರ ತನ0 3ಾ4ನ ಕತ5ವ ವನು0
6ವ57ಸಲು 8ಾ ಾಗಲೂ %ದ9 ಾ ದು9 ಈUÀ®Æ s¸À»vÀ %ದ ಾ ೆ9ೕ ೆ
ಎಂಬುದನು0 ರುಜು ಾತುಪ ಸುವ ೇ ?
(4) ಾ ತನ0 ಾದ ಪತ ದ4< =ನಂ %ದ ಪ ಾರ ಪ>?ಾರ ಪ1ೆಯಲು
ಅಹ5 ಾ ರು2ೇ ೆಂದು ರುಜು ಾತುಪ ಸುವ ೇ ?
(5) 8ಾವ ಆ ೇಶ ಅಥ ಾ B ?
?ೆCDನ = ಾ ಾಂಶ
(1) ಾ ಮತು ಪ ಾ 1 ಇವರುಗಳ ಮ ೆ ಾಂಕ 24/12/2006 ರಂದು
ಆದಂತಹ ಪತ ಪ ಾ 3 ಇವ>&ೆ &ೊ ರುವF ಲ< ೆಂದು ಪ ಾ 3
ರುಜು ಾತು ಪ ಸುವ ೇ ? "
10. The plaintiff examined himself as PW.1, wife of plaintiff as PW.2 and a witness PW.3. Exs.P1 to Ex.P11 have been marked in evidence. Defendant No.1 examined himself as DW.1, Exs.D1 to D3 have been marked in evidence. The Trial -9- NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 Court vide its judgment and decree 12.08.2013, partly decreed the suit and passed the following order:
"i. The suit of the plaintiff is partly decreed with cost.
ii. The plaintiff is not entitled for specific performance of agreement dated 24.12.2006. However, the plaintiff is entitled for refund of earnest money of `2,00,000/- paid on the date of agreement with interest at the rate of 6% p.a., from the date of agreement till its realization."
11. Being aggrieved the plaintiff has filed the present appeal.
12. Learned counsel Sri. P.S. Malipatil along with learned counsel Miss. Bhavana Patil appearing on behalf of the appellant vehemently contends that defendant No.1, deliberately, consequent to the Agreement of Sale executed by himself and the plaintiff got the Sale Deed in respect of the suit property executed by the husband of defendant No.3 in favour of his wife, the defendant No.2. It is further contended that the
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 entire sale consideration having been paid, the Trial Court erred in refusing to order for specific performance. It is further contended that the execution of Sale Agreement having been admitted, the Trial Court ought to have decreed the suit by ordering for specific performance and hence, he seeks for allowing of the above appeal and granting of the reliefs sought for.
13. Per contra, learned counsel Smt. B.V. Vidyulatha, for respondent Nos.1 and 2 and Sri. P. Mahadevswamy learned counsel for respondent No.3 justifies the findings recorded by the Trial Court and contends that the Trial Court has rightly appreciated the facts that the Agreement entered into between the plaintiff and defendant No.1 was a contingent contract, contingent upon the property being conveyed in favour of the defendant No.1. That the suit property admittedly not having been conveyed in favour of the plaintiff, the Trial Court was justified in refusing to order specific performance.
14. Learned counsel for respondent Nos.1 and 2 further submits, relying upon the reply dated 18.02.2010 (Ex.P3) which has been issued on behalf of defendant Nos.1 and 2 to
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 the legal notice dated 15.02.2010 (Ex.P2) as well as referring to the cheques produced as Exs.D1 to D3 that there were other business transactions between the plaintiff and defendant No.1 which has been set out in detail in the reply notice (Ex.P3). It is further contended that the total sale consideration has not been paid and the amounts paid by the plaintiff to defendant No.1 with respect to other business transactions has been pleaded as payments made under the Agreement of Sale which has been rightly negatived by the Trial Court. It is further contended by learned counsel for respondent Nos.1 and 2 that respondent No.1 is ready and willing to deposit the amount ordered to be refunded by the Trial Court. Hence, learned counsels seek for dismissal of the above appeal.
15. The contentions of both the learned counsels have been considered and the material on record including the records of the Trial Court have been perused.
16. The questions that arises for consideration are;
i) Whether the Trial Court was
justified in refusing the order for
specific performance?
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RFA No. 1780 of 2013
ii) Whether the judgment and decree
passed by the Trial Court is just and
proper?
Re: Question No.1:
17. Admittedly, even as per the case of the plaintiff, defendant No.1 was not the owner of the suit property. Further, defendant Nos.1 and 2 in their Written Statement have not denied the execution of the Agreement of Sale dated 24.12.2006 (Ex.P1) entered into between the plaintiff and defendant No.1. However, it is the contention of the said defendants that despite knowing the fact that defendant No.1 was not the owner of the property and that defendant No.1 had entered into an agreement of Sale with one Dr.V. Nagashetty who is the husband of defendant No.3, at the instance of the plaintiff, Agreement of Sale (Ex.P1) has been executed. It is the further specific contention of defendant Nos.1 and 2 that defendant No.1 had other business transactions with the plaintiff and that the plaintiff was not able to avail credit facility. Hence, the plaintiff requested defendant No.1 to purchase the construction materials and that the plaintiff paid various amounts to defendant No.1 as a reimbursement
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 towards the expenses incurred by defendant No.1 towards the purchase of the said construction material.
18. However, the plaintiff has categorically pleaded in the plaint that defendant No.1 agreed to sell the suit property for a total sale consideration of `15,30,000/- and that a sum of `2,00,000/- was paid as on the date of the Agreement. That the balance sale consideration of `13,30,000/- was to be paid as on the date of execution of the Sale Deed. It is the further case of the plaintiff that he has paid the entire sale consideration as well as a further amount of `2,01,936/- since the plaintiff demanded a higher consideration for the suit property on the ground that the property prices had increased.
19. It is forthcoming from the Agreement of Sale (Ex.P1) that the Sale transaction required to be completed within three months. The said Agreement having been executed on 24.12.2006, the sale transaction ought to have been completed within three months from the said date i.e., on or before 24.03.2007. However, it is forthcoming from the payment details averred at para No.6 of the plaint that, all the
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 said amounts have been allegedly paid after expiry of the said period of three months.
20. It is forthcoming that the plaintiff for the first time called upon defendant No.1 to complete the sale transaction vide legal notice dated 15.02.2010 (Ex.P2) which has been issued more than three years after the date of the Agreement. It is further relevant to note that in the reply notice dated 18.02.2010 (Ex.P3), the defendant Nos.1 and 2 have specifically denied the assertion of the plaintiff regarding agreeing to sell the suit property vide the Agreement dated 24.12.2006. In the said reply (Ex.P3), defendant Nos.1 and 2 have set out in detail various business transactions between the plaintiff and the defendant No.1 as also the fact that the plaintiff paid various amounts to defendant No.1. In fact, in the said reply (Ex.P3), defendant Nos.1 and 2 called upon the plaintiff to pay a sum of `8,00,500/-. It is further relevant to note that the defendants have also produced three cheques issued by the plaintiff as Exs.D1 to D3 drawn in the name of defendant No.1.
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21. The Trial Court while appreciating the case of the parties has noticed that defendant No.1 was not even the owner of the suit property as on date of the Agreement (Ex.P1) and hence, the Trial Court recorded a finding that the said Agreement (Ex.P1) is a contingent contract.
22. It is the vehement contention on behalf of the appellant that defendant No.1, in order to play fraud on the plaintiff in as much as the defendant No.1 had entered into an agreement of sale to purchase the suit property from one Dr.V.Nagashetty who was the owner of the suit property and that after the death of the said Dr. V. Nageshetty, the defendant No.1 got the sale deed executed by the wife of the said Dr. V. Nageshetty, the defendant No.3 in the suit, conveying the suit property in favour of defendant No.2 who is the wife of defendant No.1.
23. Admittedly as has been noticed by the Trial Court, the defendant No.1 was not the owner of the property. The Trial Court while appreciating the material on record has further recorded a finding that the defendant No.1 had entered into an Agreement with Dr.V.Nagashetty for purchase of the suit
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 property. It is further forthcoming that the said Dr.V.Nagashetty died in the year 2007 and he was survived by his wife (defendant No.3) and a daughter. It is further forthcoming that consequent to the death of the said Dr.V.Nagashetty, defendant No.3 conveyed the suit property in favour of defendant No.2 vide registered Sale Deed dated 28.03.2009 (Ex.P8). At this juncture, it is relevant to note that, apart from seeking specific performance of the Agreement of Sale (Ex.P1), the plaintiff has not sought for any other relief in the suit. Having regard to the same, the question of adjudicating upon the contention putforth on behalf of the plaintiff that defendant No.1 has fraudulently got the Sale Deed executed by defendant No.3 in favour of his wife does not arise.
24. It is clear from the material on record that the defendant No.1 not being the owner of the suit property on the date of the Agreement, the question of considering grant of the specific performance of the Agreement (Ex.P1) does not arise. The Trial Court was justified in refusing the relief of specific performance. Hence, question No.(i) framed for consideration is answered in the affirmative.
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 Re: question No.2:
25. In the present case, although the plaintiff has contended that he has paid the entire sale consideration, having regard to the specific defence of defendant No.1 with regard to the various other business transactions that defendant No.1 had with the plaintiff and various materials being placed on record regarding the same, the Trial Court after appreciating the oral and documentary evidence on record, has categorically recorded a finding that the plaintiff has paid only an amount of `2,00,000/- as an advance and has ordered for refund of the said sum of `2,00,000/-. The Trial Court after appreciating the oral and documentary evidence on record has held that the plaintiff is entitled to refund of a sum of `2,00,000/- together with interest @6% per annum. No appeal is filed by the defendants challenging the judgment and decree passed by the Trial Court. The appellants have failed to demonstrate that the plaintiff has paid further sale consideration pursuant to Ex.P1 as averred by the plaintiff more particularly having regard to the defence of defendant Nos.1 and 2 regarding business transactions between plaintiff and defendant No.1. Hence, it is clear that the judgment and
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 decree passed by the Trial Court holding that the plaintiff is entitled for refund of earnest money of `2,00,000/- is just and proper.
26. However, the Trial Court has ordered for payment of interest @ 6% per annum. Although it is the contention of the learned counsel for the defendant Nos.1 and 2 that the defendant No.1 is ready to refund the said sum of `2,00,000/- and although the defendants have not filed any appeal challenging the judgment and decree passed by the Trial Court, till this date, the defendants have not paid the said sum of `2,00,000/- or deposited before the Court together with interest.
27. Under Section 34 of the CPC, it is the discretion of the Court to award the rate of interest. The Trial Court has not given any reason for awarding interest @ 6% per annum. Keeping in mind the factual matrix of the case, it is jut and proper that the rate of interest ordered to be paid by the Trial Court is modified from 6% to 8% with a further direction that if the defendant No.1 fails to deposit the said sum of `2,00,000/- together with interest @ 8% per annum within one
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NC: 2024:KHC:40436-DB RFA No. 1780 of 2013 month from the date of receipt of a copy of this judgment, the plaintiff shall be entitled to a sum of `2,00,000/- together with interest @ 10% per annum.
28. In view of the discussion made above, the question No.(ii) framed for consideration is answered partly in the Affirmative.
29. Hence, the following ORDER
i) The above appeal is partly allowed.
ii) The judgment and decree dated 12.08.2013 passed in O.S.No.21/2010 by the Senior Civil Judge and JMFC, Nanjangud is modified only to the extent of holding that the plaintiff is entitled to refund of a sum of `2,00,000/- together with 8% per annum from the date of Agreement till its realization with a further direction that if the said amount is not deposited within one month from the date of receipt of a copy of this judgment, the plaintiff
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RFA No. 1780 of 2013
shall be entitled to interest @ 10%
per annum from the date of
Agreement till its realization.
ii) Modified decree to be drawn
accordingly.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(C.M. POONACHA)
JUDGE
BS/PNV
List No.: 1 Sl No.: 22