Karnataka High Court
B.R. Rangaswamy vs D. Syed Younous And Others on 5 March, 1999
Equivalent citations: ILR1999KAR2539, 2000(4)KARLJ187
Author: S.R. Bannurmath
Bench: S.R. Bannurmath
JUDGMENT
1. This appeal is filed by the plaintiff challenging the judgment and decree dated 15-4-1989 passed by the IV Additional City Civil Judge, Mayo Hall, Bangalore City, in O.S. No. 8443 of 1980 (Old No. 216 of 1980) insofar as rejection of his suit for specific performance directing defendant 1 to execute the sale deed in respect of the suit schedule property is concerned. Original defendants 2 to 4 have filed cross objections challenging the judgment and decree of the Trial Court insofar as the Findings against them are concerned.
2. The facts of the case are as follows:
The suit schedule property bearing Old No. 14, New No. 86, situate in Richmond Road, Civil Station, Bangalore, belongs to defendant 1-D. Syed Younous. As per the plaint allegations, in the year 1978 when defendant 1 was on the look out for a purchaser for the schedule property since he had not been getting proper returns therefrom; defendant 1 had contacted the plaintiff. After several meetings between the plaintiff and defendant 1, the plaintiff agreed to purchase the property for a consideration of Rs. 5,00,000/- free from all encumbrances and defendant 1 agreed to sell the same; as such, an agreement dated 23-8-1978, vide Exhibit P. 1, came to be executed between the parties; and as per the terms of the agreement, an advance of Rs. 10,000/- was paid at the time of agreement and it was further agreed that defendant 1 should give the plaintiff a reasonable time of two years for payment of the balance and to get the sale deed executed and registered either in his name or in the name of his nominee. It is contended that during the relevant period, it was necessary for the owner to obtain permission of the competent authority under Section 27(2) of the Urban Land (Ceiling and Regulation) Act (hereinafter referred to as the 'Act'). As such, a draft sale deed was prepared and the same was submitted along with an application for permission by defendant 1 to the competent authority, Urban Land Ceiling, Bangalore, on 12-5-1980 to sell the schedule property in the name of the nominee of the plaintiff. It is alleged that, when the said application was pending consideration, the plaintiff came to know that defendant 1 had filed similar application under Section 27(2) of the Act seeking permission to sell the very property in favour of defendants 2 to 4 for a consideration of Rs. 5,70,000/-. As defendant 1 submitted two applications seeking permission for alienation of the same property in favour of two different parties, the dispute was raised before the competent authority. In the application seeking leave to sell the schedule property in favour of defendants 2 to 4 it was mentioned that there is an agreement of sale in favour of defendants 2 to 4 on 15-11-1978. The plaintiff filed his objections before the competent authority contending that the alleged agreement dated 15-11-1978 in favour of defendants 2 to 4 was a fraudulent transaction with intent to deprive the plaintiff of his right under the agreement dated 23-8-1978. Considering the rival contentions, the competent authority held that, as the dispute is of a civil nature and has to be decided by competent forum and as such by the order dated 26-6-1980 both the applications under Section 27(2) of the Act one relating to the sale in favour of the plaintiff and the other in favour of defendants 2 to 4 were rejected. Even thereafter defendant 1 on 27-6-1980 filed another application under Section 27(2) of the Act once again seeking permission to sell the property in favour of defendants 2 to 4 to which the plaintiff has already filed his objections and the matter is pending. In view of these developments, the plaintiff contended that as defendants 1 to 4 have colluded together and have created fraudulent documents with the sole intention of making unlawful gain depriving the plaintiff of his legitimate right even though he was always ready and willing to perform his part of the contract, and as such he approached the Civil Court in the present suit praying for a judgment and decree of specific performance directing defendant 1 to execute the registered sale deed conveying the suit schedule property in his favour in accordance with the terms and conditions of the agreement dated 23-8-1978 and to handover possession. In the alternative, it is also prayed that for any reason, if the Court holds that this relief cannot be granted to the plaintiff, the Court be pleased to grant a decree for damages of a sum of Rs. 3,13,450/- together with interest and cost along with the advance of Rs. 10,000/- paid under the agreement. This suit was filed on 30-7-1980.
On receipt of the notice, defendant 1 appeared through his Counsel and filed his written statement, inter alia, contending that the plaintiff has obtained and got executed the agreement in his favour using undue influence, coercion and fraud and as such the same is not binding nor is executable against him; that much prior to entering into the agreement with the plaintiff, he (defendant 1) had entered into an agreement with one E.P. Varuny of Bangalore on 11-7-1975 for the sale of the property. It is contended that subsequently the said Varuny assigned it in favour of defendants 2 to 4 for which he (defendant 1) had no objection. Accordingly, on 4-5-1978 another agreement was entered into between defendant 1 on one hand and defendants 2 to 4 on the other. On that day a token advance of Rs. 101/- was also paid to him. Thereafter, a formal agreement came to be entered into on 15-11-1978 between defendant 1 and defendants 2 to 4. It is contended that, in fact, there was an agreement between defendant 1 and the said Varuny for selling the suit schedule property with vacant possession and in this regard, though defendant 1 had filed an eviction suit against his tenant, he was unable to get vacant possession and as such the agreement could not culminate into a sale deed. However, at that stage the plaintiff entered into picture and promising to settle the matter with the previous agreement holders, viz., Varuny and defendants 2 to 4, and also to take the suit schedule property without actual possession and as such believing the words of the plaintiff a formal deed of agreement was entered into in his favour. It is contended that the agreement in favour of the plaintiff was only a speculative agreement which was got executed under undue influence and coercion and fraud. It is also contended that another property belonging to defendant 1 situate at Dickenson Road was also for sale and similar agreement was executed in favour of defendants 2 to 4 and, as there was also difficulty in giving vacant possession, the plaintiff has in fact forced defendant 1 to sell that property also to his brother which is the subject-matter of another suit. It is further contended that defendant 1 and the plaintiff agreed to get the regular sale deed executed and registered and complete the transaction within 2 months, but by playing fraud the plaintiff has introduced the time of two years instead of two months in the agreement which also shows that the entire effort of the plaintiff was to defraud defendant 1 and also defendants 2 to 4. It is further contended that defendant 1 had never intended to sell the property in favour of the plaintiff. He has further contended that the agreement in favour of the plaintiff is a speculative transaction under which the plaintiff gets no right and the agreement is therefore not binding on him (defendant 1). On these and other grounds, defendant 1 prayed for dismissal of the suit.
Defendants 2 to 4 on entering appearance filed their common written statement inter alia reiterating the pleadings of defendant 1. It is further contended that defendants 2 to 4 wanted to invest and have property in Bangalore and as such, after selling their properties at Mudigere, entered into an agreement with defendant 1 for purchase of the suit schedule property as well as the property at Dickenson Road. They have paid a token advance of Rs. 101/- on 4-5-1978 itself and as the agree-
meat was misplaced, they had to enter into another formal agreement dated 15-11-1978. It is further contended that as defendant 1 was unable to obtain vacant possession as agreed to, the execution of the sale deed and the registration thereof were to be postponed and in the meanwhile during the Urban Land Ceiling proceedings it was brought to their notice the fraudulent agreement of the plaintiff which they contested. Further, it is contended that in view of the fact that defendant 1 had entered into agreement with these defendants much prior to the agreement with the plaintiff and also the fact that there was a prior agreement between defendant 1 and Varuny which later came to be assigned in their favour, the agreement in favour of the plaintiff; even if it is true, would be latter in point of time and as such it is these defendants who have prior right to purchase the property and not the plaintiff and as such prayed for dismissal of the suit.
3. Based on these pleadings, the Trial Court framed the following issues:
"1. Whether the plaintiff has been ready and willing to perform his part of the contract as alleged?
2. Whether first defendant proves that the agreement in favour of the plaintiff is brought about by undue influence, coercion and fraud as alleged?
3 (a) Whether the first defendant had already entered into an agreement on 4-5-1978 with defendants 2 and 4 for sale of suit property as alleged?
(b) If so, whether first defendant brought to the notice of the plaintiff, the said alleged earlier agreement dated 4-5-1978?
4. Whether the agreed period was only 2 months for the suit agreement and not 2 years as alleged by the first defendant?
5. Whether the plaintiff speculated in taking suit agreement by taking a chance as alleged?
6. Whether the suit is not maintainable?
7. Whether the suit is bad for non-joinder of necessary parties as alleged?
8. Whether there was an earlier agreement dated 11-7-1975 under which first defendant agreed to sell the suit property to one Varuny?
9. Whether Mr. Varuny had assigned his rights in the agreement in favour of defendants 2 and 4?
10. Whether by virtue of the said agreement defendants 2 and 4 had a prior right to purchase the suit property as alleged?
11. Whether plaintiff is entitled to the relief of specific performance?
12. Whether, alternatively, the plaintiff is entitled to the refund of the advance amount of Rs. 10,000/-, interest on which and compensation or damages for breach of contract as claimed in para 9 of the plaint?
13. To what relief?"
4. To substantiate their respective claims, the plaintiff got himself examined as P.W. 1 and got marked Exhibits P. 1 to P. 17. Defendant 1 gave evidence as D.W. 1, defendant 2 as D.W. 2 and one Ayath Khan as D.W. 3, a witness alleged to the agreement dated 4-5-1978 in favour of defendants 2 to 4. The defendants also got marked Exhibits D. 1 to D. 28.
5. After hearing the arguments and considering the rival contentions, the Trial Court held that the plaintiff has proved his readiness and willingness to perform his part of the contract; that defendant 1 failed to prove that the agreement in favour of the plaintiff is brought out due to undue influence, coercion and fraud; that defendant 1 had failed to prove the prior agreement dated 4-5-1978 between himself and defendants 2 to 4; that the agreement with the plaintiff was not a speculative agreement and that the suit is maintainable. However, on Issue Nos. 8 to 10 the Trial Court held that there was a prior agreement dated 11-7-1975 entered into by defendant 1 in favour of Varuny and that the said Varuny has assigned his right in the agreement in favour of defendants 2 to 4 and by virtue of the said assignment defendants 2 to 4 had prior right to purchase the suit property. On these findings the Trial Court held that the plaintiff is not entitled for a decree of specific performance of execution of the sale deed and handing over possession; but, he is only entitled for refund of the advance paid along with interest and also entitled for compensation of Rs. 50,000/- from defendant 1. Thus, by the impugned judgment and decree the Trial Court decreed the plaintiffs suit in part and while rejecting the claim of specific performance of the contract directed defendant 1 to pay a compensation and return of the advance in total Rs. 63,450/- with interest at 12% per annum. Hence, the present appeal by the plaintiff.
6. Sri Bhavanishankar Rao, learned Counsel for the appellant contended that the Trial Court even after holding Issue Nos. 1 to 7 in favour of the plaintiff committed an error in declining the grant of decree for specific performance only on the ground that there was an earlier agreement dated 11-7-1975 in favour of one Varuny and as such the subsequent agreement in favour of the plaintiff cannot be accepted; that the Trial Court has committed an error in holding that there was an assignment in favour of defendants 2 to 4 by the said Varuny and by virtue of the same it is defendants 2 and 4 who had prior right to purchase the property than the plaintiff; that the Trial Court was in error in holding that since the plaintiff had not filed any rejoinder contesting the claim of defendant 1 in respect of the agreement in favour of Varuny and as such the same would amount to admission; that the acceptance of the agreement, Exhibit D. 6, in favour of Varuny by the Trial Court is contrary to the principle laid down in respect of the proof of the document especially when the said Varuny is not examined by the defendants to prove the document; that the various admissions and the documents produced by the defendants themselves would show that the alleged agreement in favour of the said Varuny is a concocted document so as to deprive the legitimate right of the plaintiff and as such the same should not have been accepted by the Trial Court; that the Trial Court ought to have seen that the alleged assignment in favour of defendants 2 and 4 was after the filing of the suit and as such no value could have been attached to the same so as to bind it on the plaintiff, as the same is hit by lis pendens and that the Trial Court has committed an error in rejecting the claim of the plaintiff for specific performance solely on Exhibits D. 6 to D. 8 which are not proved in accordance with law.
7. On the other hand, Sri Mujeeb, learned Counsel for defendant 1/respondent 1 argued in support of the findings of the Trial Court.
8. Sri V. Tarakaram, learned Senior Counsel appearing for defendants 2 to 4 who are respondents 2 to 4 and also cross objectors, besides arguing in support of the findings of the Trial Court further contended that the findings of the Trial Court on Issue Nos. 3(a) and 3(b) are erroneous and illegal; that the Trial Court was in error in not considering the evidence on record which is to the effect that it was the plaintiff who committed fraud on defendant 1 and got the agreement in his favour under coercion and that the Trial Court was in error in disbelieving the agreement dated 4-5-1978 entered into between defendant 1 on one hand and defendants 2 to 4 on the other by holding that it is a collusive and fraudulent agreement. On these and among other grounds they prayed that apart from dismissal of the appeal, the findings on Issue Nos. 3(a) and 3(b) are also liable to be set aside.
9. The learned Counsel for the respective parties have relied upon various pronouncements which we will refer to in due course.
10. In view of the rival contentions, the following points arise for consideration:
1. Whether the Trial Court was justified in holding that-
(a) there was an agreement dated 11-7-1975 under which defendant 1 agreed to sell the property to one Varuny;
(b) whether the said Varuny had assigned his right under the agreement in favour of defendants 2 and 4;
(c) whether by virtue of the said assignment defendants 2 and 4 had prior right to purchase the suit property as alleged;
2. Whether the Trial Court was justified in declining the plaintiff the relief of specific performance of the agreement;
3. Whether the finding of the Trial Court that there was prior agreement dated 4-5-1978 between defendant 1 and defendants 2 and 4 which being prior to the plaintiffs agreement disentitles him of the relief; and
4. What is the relief?
11. So far as the prior agreement dated 11-7-1975, vide Exhibit D. 6, between defendant 1 and the said Varuny is concerned, the Trial Court has held that, though this fact was mentioned in the written statements, as the plaintiff has not filed any rejoinder, the existence of such agreement is deemed to have been accepted by him.
12. No doubt, defendant 1 in his written statement has taken up a contention about the prior agreement, vide Exhibit D. 6, with the said Varuny. It is true that the plaintiff could have filed a rejoinder challenging the true and binding nature of this prior agreement. But, in our view, under the provisions of Order 8, Rule 9 of the CPC, law does not compel plaintiff to file rejoinder. In our view the fact that it was defendant 1 who has pleaded a new fact of existence of a prior agreement, the burden is on him to prove the same. Mere non-filing of rejoinder would not mean that the plaintiff is deemed to have admitted the same. The Trial Court, in our view should have firstly considered as to whether defendant 1 has proved the agreement, Exhibit D. 6, dated 11-7-1975 in favour of the said Varuny and only after giving a finding, could have considered the requirement, absence of pleading and the effect thereto.
13. So, we have to see whether defendant 1 has proved the existence of prior agreement dated 11-7-1975 between him and one Varuny. In this regard, defendant 1 in his written statement at paragraph 2 has stated thus:
"This defendant, in fact was on look out for a purchaser as early as in 1975 and had made one more agreement of sale for the schedule premises before making an agreement of sale with defendants 2 and 4. This agreement was done on 11-7-1975 with one Mr. E.P. Varuny of Bangalore. . . . .".
Thereafter, he says that the plaintiff was informed of the agreement and in spite of the said agreement the plaintiff promised to get the two previous agreements cancelled and the agreement in favour of the plaintiff was speculative one. It is further contended that later as the said Varuny assigned the agreement in favour of defendants 2 and 4 he consented for selling the property in favour of defendants 2 to 4 in continuation of the earlier agreement.
14. On the other hand, defendants 2 to 4 who have filed their independent written statement have stated that they had enquired with defendant 1 about any prior agreement in respect of the suit property with other person/s and only on the assurance of defendant 1 that there was no agreement they entered into the agreement with defendant 1 on 4-5-1978 and 15-11-1978. It is the specific pleading that only after filing of the suit, defendants 2 to 4 came to know of the agreement, Exhibit D. 6, with Varuny and as such got the agreement assigned in their favour by settling the matter with the said Varuny.
15. The evidence in this regard of D.W. 1 is to the effect that-
"On 11-7-1975, I had entered into an agreement with one Varuny. I had agreed to give vacant possession to Varuny also.
Since Cumberland did not vacate, I gave a letter to Varuny, seeking extension of time on the ground that the tenant has not vacated. After receiving summons in this case, I disclosed the earlier agreement of 11-7-1975 in favour of Varuny. On 31-1-1981 I took a letter from Varuny and got the agreement assigned in favour of defendants 2 to 4. I also agreed for the assignment. For Varuny's stamp agreement, I purchased the stamp paper".
In paragraph 26 of the cross-examination he has stated that he informed the plaintiff about the agreement with Varuny, but he did not inform about it to Pinto for the reason that he was in urgent need of money and also the eviction case filed in respect of the same property was pending. Varuny had not issued any notice informing him (defendant 1) of his readiness to take the sale deed. The relevant portion reads thus:
"I informed the plaintiff about the agreement with Varuny, but I have not informed about it to Pinto. I did not inform Pinto for the reason that I was urgently in need of money and also the eviction case filed in respect of the same property was pending. Varuny had not issued me any notice informing me of his readiness to take the sale deed. But he had orally told me that he was ready. It was in the year 1975. I replied him to wait for some more time saying that I had filed an eviction case against the tenant of the property. Subsequent to 1975 Varuny was orally asking me and telling me that he was ready but I was postponing and telling that the case of eviction is pending".
In paragraph 27 he has stated thus:
"Varuny is alive. I see Ex. D. 9 letter addressed to Varuny by me. It is a original letter addressed by me to him".
This is what defendant 1 has stated in paragraph 28 of his written statement:
"The very next day after I received the suit summons in this case, I informed Pinto about the existence of agreement in favour of Varuny".
In support of and to corroborate the agreement, Exhibit D. 6, dated 11-7-1975 defendant 1 has relied upon a letter said to have written by him. vide Exhibit D. 9, and also the assignments by Varuny in favour of defendants 2 and 4, vide Exhibit D. 7, and his consenting letter for the assignment, vide Exhibit D. 8.
16. At the outset it is to be noted that, though admittedly the said Varuny is alive defendant 1 has not examined him for the reasons best known to him. The said Varuny was the best independent witness to prove the prior agreement dated 11-7-1975, vide, Exhibit D. 6. No explanation has been offered for non-examination of this material witness. As such, in our view, the Trial Court ought to have drawn adverse inference for the same. It is also to be noted that in the Urban Land Ceiling proceedings under Section 27(2) of the Act defendant 1 has not only filed an affidavit but also has given a sworn statement which are produced in this case as Exhibits P. 5 and D. 25. On a perusal of these statements on oath by defendant 1 before the competent authority one thing is clear that he has not at all mentioned about the existence of any agreement dated 11-7-1975 in favour of the said Varuny either in his affidavit or in his sworn statement. This adds doubts to the genuineness of the document, when seen together with the fact of non-examination of the said Varuny. The next document relied upon by defendant 1 to prove the agreement is the letter said to have been written by him to the said Varuny on 10-2-1978. This letter is marked as Exhibit D. 9. As admitted by the defendant this is the original document. This was admittedly not sent through the usual mode of communication, i.e., by post. On the other hand, defendant 1 says that he had personally delivered the same. What is the date of delivery is not mentioned. So also, the day or date on which the same was taken back from Varuny for the purpose of this case or otherwise is also not stated anywhere in his statement. We have perused the original letter, Exhibit D. 9, from the records and one fact which is apparent to the naked eye is the date in the letter "10-2-1978". Obviously, the type impression of the date is totally different from the rest of the typed matter. In this letter, as a Post Script there is a mention of receipt of Rs. 5,000/- and to the effect of endorsement having been made in the agreement, Exhibit D. 6. The very existence of agreement, Exhibit D. 6, is doubtful. In our view, as there is no signature of the witness on the same, though space is left for the same at the end of the document. It shows:
"WITNESSES:
1. .....
2. .....".
The alleged endorsement found also does not bear signature of the said Varuny. Added to this, admittedly, though both parties, defendant 1 and the said Varuny, are residents of Bangalore, the two stamp papers are said to have been purchased from Kolar and they are of the denominations of Rs. 2.50 p and 75 p. There is no stamped date mentioned in both these stamp papers as to when these stamp papers were issued from the District Treasury, Kolar. The only date apart from the date of the alleged agreement dated 11-7-1975 which we find on these papers is the date mentioned as "10-7-1975" below the signature of the stamp vendor. In view of what we have stated above and in the absence of examination of the said Varuny, we find some suspicion about this agreement, Exhibit D. 6 and the alleged supportive and corroborative letter, Exhibit D. 9.
17. The next documents relied upon by defendant 1 to prove the prior agreement are Exhibits D. 7 and D. 8. Exhibit D. 7 is alleged to be dated 30-1-1981 whereunder the said Varuny has assigned his rights in favour of defendants 2 and 4 and the letter dated 1-2-1981 from defendant 1 to defendants 2 and 4 confirming the assignment and agreeing to sell the property in their favour. It is to be noted that the suit by the plaintiff was filed on 30-7-1980. Defendant 1 has filed his written statement on 18-12-1980 mentioning the assignment and agreement which have come into existence on 30-1-1981 and 1-2-1981 respectively, obviously and undisputably after filing of the written statement. As such, it is clear that on the date of filing of the written statement, Exhibits D. 7 and D. 8 were not in existence. But, defendant 1 has taken the plea in respect of such non-existent assignment which proves that what he has stated in his written statement is obviously false, since the assignment was not in existence. In our view, no value can be attached to such documents like Exhibits D. 7 and D. 8 which has obviously come into existence during the pendency of the proceedings and are hit by lis pendens even if they are accepted as true. It is also to be mentioned that in view of the suspicious circumstances and in view of the fact of non-mentioning of the agreement, Exhibit D. 6, dated 11-7-1975 in any of the prior proceedings and the later draft sale deeds Exhibits D. 27 and D. 28 and the fact of non-examination of the said Varuny the material witness, in our considered view this alleged prior agreement dated 11-7-1975 between defendant 1 and the said Varuny is not at all proved by defendant 1, apart from the suspicious circumstances to doubt the very genuineness of the same.
18. In view of our aforesaid findings, the necessary result would be that defendant 1 has failed to prove the prior agreement between himself and the said Varuny. If that is so, the finding of the Trial Court on Issue No. 8 is erroneous and is liable to be set aside.
19. This take us to the next two connected findings on Issue Nos. 9 and 10 regarding the alleged assignment by Varuny in favour of defendants 2 and 4, the alleged prior assigned right of defendants 2 to 4 to purchase the suit property. In view of our findings referred to above, as defendant 1 has failed to prove the very agreement dated 11-7-1975, Exhibit D. 6, in favour of Varuny and the fact that the alleged assignment in favour of defendants 2 and 4 by the said Varuny is also doubtful and also the undisputed fact of having come into existence after filing the suit and the written statement of defendant 1, the findings of the Trial Court on Issue Nos. 9 and 10 are also erroneous and liable to be set aside.
20. This takes us to the next question as to the readiness and willingness on the part of the plaintiff. Learned Counsel for the defendants have argued that the plaintiff has not shown his readiness and willingness on his part to fulfill the conditions in the agreement and as such he is not entitled for the relief of specific performance. In this regard, we have to note that, as per Exhibit P. 1, dated 23-8-1978, time to execute and complete the sale transaction was two years. It is also undisputed that in the month of June 1980 or so defendant 1 has himself given application seeking permission under Section 27(2) of the Act before the competent authority and the plaintiff has stated that it was only after he informed the defendant of his readiness and willingness for completion of the transaction. The filing of the application seeking permission for sale in favour of the plaintiff has not been denied by defendant 1, though a feeble attempt has been made in the Trial Court to state that Exhibit P. 1 itself was obtained by coercion and fraud. The Trial Court has on a detailed consideration held that defendant 1 has failed to prove the alleged coercion and fraud on the part of the plaintiff and that Exhibit P. 1 is valid and genuine. It is to be noted that this finding of the Trial Court has not been challenged by defendant 1 by way of cross objection. It is also to be noted that, though initially the agreement, Exhibit P. 1, was in favour of the plaintiff alone as per the terms of the agreement the plaintiff has requested defendant 1 to execute the sale deed in favour of his nominees, Nagesh and Kasturi Rangiah Benefit Trust. The very application filed by defendant 1 before the Urban Land Ceiling authority under Section 27(2) of the Act show that he sought permission to sell the property in favour of the nominee of the plaintiff above mentioned. The defendant has not denied about the financial position and capacity of the plaintiff. On the other hand, the allegation is that taking advantage of being a monied man, the present agreement, Exhibit P. 1, was got executed by the plaintiff by using undue influence. It is also to be noted that only at the stage of seeking permission when defendant 1 tried to withdraw the application in favour of the plaintiff and sought permission to sell in favour of defendants 2 to 4 immediately thereafter the present suit has been filed for specific performance. It is further to be noted that the plaintiff has specifically pleaded that he has sufficient funds to pay and also his willingness to purchase the property. In view of the aforesaid findings, we have to necessarily hold that the plaintiff was willing to purchase the property and, further that in view of the fact that there is no dispute as to the capacity of paying the consideration and in the absence of specific contra pleadings, the readiness of the plaintiff can also be inferred. As such, we hold that the plaintiff has proved his willingness and readiness to perform his part of obligation.
21. This takes us to the next question as to the alleged independent prior agreement dated 4-5-1978 between defendant 1 on one hand and defendants 2 and 4 on the other. In the written statement of defendant 1, at paragraph 2 it is stated thus:
"Subsequent to this (agreement of sale dated 11-7-1975 with Varuny) an agreement of sale was made by this defendant with defendants 2 and 4 on 4-5-1978 after receiving a token advance of Rs. 101/-. On the same day i.e., 4-5-1978 another agreement of sale was made by this defendant with defendants 2 and 4 for his premises No. 31, Residency Road, Bangalore, and the sale deed of this was registered on 3-11-1978 in favour of defendants 2 and 4. A formal agreement for the schedule premises was made embodying various terms on 15-11-1978. In fact two agreement papers were signed on 15-11-1978 as in the first paper the agreement and token advance of the schedule premises made on 4-5-1978 was not narrated and on advice from Advocate another paper was signed wherein the agreement of 4-5-1978 and the advance of Rs. 101/-was mentioned.
This defendant had agreed to sell the schedule premises to either E.P. Varuny on 11-7-1975 or to defendants 2 and 4 on 4-5-1978 with vacant possession".
As such it is the pleading of defendant 1 that prior to the agreement dated 23-8-1978 with the plaintiff there were two agreements executed by him in respect of the very suit schedule property - one with Varuny dated 11-7-1975 and the other with defendants 2 and 4, dated 4-5-1978 and later on 15-11-1978. According to defendants 2 to 4, the pleadings in this regard are as follows:
"On 4-5-1978 these defendants entered into various agreements with the first defendant for the purpose of purchase of properties belonging to him at Bangalore stating with No. 31, Residency Road and 86, Richmond Road, Bangalore.
Defendants 2 and 4 herein had protracted negotiations with the 1 defendant herein for purchase of some of his properties including the suit schedule property and were able to come to an agreement for the purchase of premises No. 31, Residency Road, Bangalore-25 on 4-5-1978 and an agreement of sale was duly executed. Just immediately after signing the said agreement, the 1 defendant agreed to sell the schedule property and received a token advance of Rs. 101/- (Rupees One hundred and one only) from defendants 2 and 4 herein and made an agreement on 4-5-1978. A formal agreement of sale was drawn up in respect of the schedule property as per Agreement of 4-5-1978 on 15-11-1978. Later, on the same day another formal agreement of sale dated 15-11-1978 was also signed incorporating the agreement and token advance of Rs. 101/- (Rupees One hundred and one only) dated 4-5-1978. These defendants state that at the time of drawing up of the draft sale deed in respect of the schedule property in order to obtain the permission from the Competent Authority, the said formal agreement of sale incorporating the advance of Rs. 101/- (Rupees One hundred and one only) and the Agreement dated 4-5-1978 was misplaced and hence in the reiteration of the Sale Deed the agreement dated 4-5-1978 was not mentioned".
Thus, the defendants want to negative the claim of the plaintiff on the basis of the prior agreement not only in favour of Varuny and his assignment, but also an independent agreement with defendants 2 to 4, dated 4-5-1978. The Trial Court considering the same by Issue Nos. 3(a) and 3(b) held against defendants 2 to 4 in this regard and the cross objection is mainly challenging the findings in this regard. As noted from the pleadings of both defendant 1 and defendants 2 to 4, it is the case that there was an agreement dated 4-5-1978 between them in respect of the suit schedule property and an advance of Rs. 101/- was paid in this respect. But, no such agreement is produced by any of the defendants. On the other hand, reliance is placed on Exhibit D. 3 alleged to be the acknowledgment of receipt of Rs. 101/- as token advance in respect of the suit schedule property. This document is on a plain paper with the signature of defendant 1 on revenue stamp. Except the interested say of the defendants no independent evidence is led in this regard. But, what is to be noticed is mentioning of "formal agreement will be entered into in due course of time". According to defendants 2 to 4, though there was a written agreement signed by the parties, another formal agreement was drawn on 15-11-1978 which is produced as Exhibit D. 4. Surprisingly, one more agreement on the same day has been entered into between the parties, vide Exhibit D. 5, and the explanation offered is that, though the formal agreement was drawn as per Exhibit D. 4, there was no mentioning of the payment of Rs. 101/- as token advance and as such it necessitated to mention the same in the next document. On a perusal of Exhibits D. 4 and D. 5 we do not see any mention of the written and signed agreement dated 4-5-1978. What is stated in Exhibit D. 4 is only defendant 1 has received Rs. 101/- in cash as advance. Though the defendants have taken a plea in the written statement that there was a separate written agreement and Exhibit D. 3 is only a receipt of having paid the token advance of Rs. 101/-, the case is given a go-by in the evidence of D.W. 2 who has stated in paragraph 3 of his evidence that "Ex. D. 3 is the agreement of sale entered into by 1st defendant with me and my brother defendant 4 on 4-5-1978". To strengthen their contention, the defendants have also examined on Ayath Khan as D.W. 3 who is alleged to be a common friend of defendant 1 and defendants 2 to 4, According to him, he had attested Exhibit D. 3 in the house of D.W. 2. It is relevant to note here itself that there is one more agreement between defendant 1 and defendants 2 to 4 in respect of another property belonging to defendant 1 and in this regard on the very day, i.e., 4-5-1978, there is a written agreement which ultimately ended with Sale deed itself. Though the defendants have produced the agreement dated 4-5-1978, Exhibit D. 10, in respect of another property for the reasons best known to him the alleged written agreement of the same day in respect of the suit schedule property is not produced. If we peruse the evidence of D.W. 3, according to him, on 4-5-1978 in his presence only one transaction took place. But, according to defendants 2 to 4, there were two transactions on the very day. This again points towards suspicious circumstances against the non-existent agreement dated 4-5-1978. Finding the difficulty regarding the alleged signed document, the defendants have come up with a case that another agreement was executed in respect of the very property on 15-11-1978 and that too twice, vide Exhibits D. 4 and D. 5. In view of the conduct of defendant 1 in creating the alleged earlier agreement in favour of one Varuny which we have already held not proved and possibly a concocted case and in the absence of substantive evidence there is more doubt created about this agreement dated 4-5-1978. For the second document dated 15-11-1978, defendant 2 as D.W. 2 has come up with a novel case that, though Exhibit D. 5 was executed in the morning by oversight there was no reference to the payment of Rs. 101/-, vide Exhibit D. 3, and as such another document was prepared, Exhibit D. 4. Thereafter the story is propounded that this document was misplaced and later endorsement of additional advance was made on 30-1-1979. In the absence of the very agreement dated 4-5-1978 what can be said to be proved by the defendants is that there was an agreement on 15-11-1978 with additional endorsement dated 30-1-1979 which admittedly is after the undisputed agreement of sale in favour of the plaintiff by defendant 1. The suspicious circumstances surrounded Exhibits D. 3, D. 4 and D, 5 force us to conclude that these are all created documents again by collusion between defendant 1 and defendants 2 to 4 only to deprive the plaintiff of his legitimate claim. It appears that taking cue from the agreement dated 4-5-1978 entered into between defendant 1 and defendants 2 to 4 in respect of the other property of defendant 1 himself, this story of agreement in respect of the suit schedule property has been put forth without sufficient material evidence. The Trial Court has also in detail considered this theory regarding the alleged agreement dated 4-5-1978 and has, in our considered view, rightly rejected the same. We see no reason to differ from the same. As such, the contentions of the cross objectors in respect of Issue Nos. 3(a) and 3(b) are liable to be rejected and they are rejected.
22. The learned Counsel for the plaintiff has relied upon a decision of the Hon'ble Supreme Court in Prakash Chandra v Angadlal and Others, wherein it is observed thus:
"The ordinary rule is that specific performance should be granted. It ought to be denied only when equitable considerations point to its refusal and the circumstances show that damages would constitute an adequate relief.
23. On the other hand, learned Counsel for defendants 2 to 4/respondents 2 to 4 herein has relied upon the decisions in the case of Mt. Fatma Bibi and Others v Saadat Ali and Others , and in the case of Sampat Ram and Others v Baboo Lal, to highlight the effect of prior agreement. It may be stated herein that there is no dispute as to the proposition of law that where there is a prior agreement to sell immovable property executed in favour of the defendant prior to the agreement to sell in favour of the plaintiff in respect of the same property, the plaintiff can claim no equities against the defendant and cannot enforce his agreement and the fact that the plaintiff had no knowledge of the prior agreement would hardly make any difference. In our considered view mentioned earlier, the very existence of the agreement dated 11-7-1975, vide Exhibit D. 6, in favour of Varuny is not proved by defendant 1 and in fact is suspicious in nature. These decisions would not help the defendants. Similarly, on the reliance placed by defendant 1 on the pronouncements of the Hon'ble Supreme Court in (1) Kollipara Sriramulu (dead) by L.R. v T. Aswatha Narayana (dead) by L.R. and Others and (2) Smt. Sohbat Dei v Devi Phal and Others, and the decision of this Court in the case of Ameer v Chandrasekharappa , regarding concluded contracts, it is to be held that, as there was no concluded contract either between defendant 1 and Varuny, no assignment in favour of defendants 2 to 4 by the said Varuny and the clear findings of the Trial Court that the alleged agreement in favour of defendants 2 to 4 have come into existence only to overcome the agreement in favour of the plaintiff, in our view, these pronouncements are also of no assistance to the defendants. Learned Counsel for respondents 2 to 4 has also relied upon the judgments of the Hon'ble Supreme Court in the case of K.S. Vidyanadam and Others v Vairavan and in the case of Parakunnan Veetill Joseph's son Mathew v Nedumbara Kuruvila's son and Others , to contend that Section 20 of the Specific Relief Act reserves judicial discretion to Courts to decree the suit for specific performance and the Courts have to consider the circumstances while exercising such discretion. Placing reliance on these pronouncements learned Counsel contended that even if this Court comes to the conclusion that the plaintiff has proved his case, the Court has to exercise its discretion especially when the property is situate at Bangalore in a prominent locality and especially in view of the steep rise in the price as on today. As observed by us, no doubt, under Section 20 of the Specific Relief Act grant of specific performance is a discretionary relief. But, the ordinary rule is that specific performance should be granted and it can be denied only when equitable considerations point out its refusal. As held in the Parakunnan's case and Vidyanadam's case, surpa, relied upon by the defendants, the Court should meticulously consider all facts and circumstances of the case. The motive behind the litigation should also enter into the judicial verdict. The Court should also see whether the effect of rise in price of the property and as to any undue advantage available or obtained by the plaintiff by his own doing. As we have noted above, the whole litigation was the creation of defendant 1. Though initially he was agreeable to sell the property in favour of the plaintiff and had in fact taken steps by seeking permission from the Urban Land Ceiling Authority for the sale, he has turned back and has come up with the case of agreement with one Varuny, then the assignment by Varuny in favour of defendants 2 and 4 and the alleged agreement with defendants 2 to 4. In view of our findings that the very existence of the prior agreement dated 11-7-1975 or dated 4-5-1978 were doubtful and suspicious one and the subsequent conduct of the defendants point out to the only conclusion that it was defendant 1 who wanted to take advantage of the possibility of getting higher price than the one agreed with the plaintiff. As such, it is to be held that the agreement of the plaintiff was genuine and there is no reason for us to deny the specific performance of the same.
24. In view of the reasons mentioned above, we are of the opinion that the Trial Court was in error in rejecting the prayer of the plaintiff for decree of specific performance only on the ground of existence of prior agreement in favour of Varuny and the alleged subsequent assignment in favour of defendants 2 and 4 and the agreement in favour of defendants 2 to 4. As such the judgment and decree of the trial is to be modified and it is to be held that the plaintiff is entitled for decree of specific performance. At this stage only it is to be noted that the plaintiff is fighting the litigation without depositing the balance amount of Rs. 4,90,000/-. If the said amount had been deposited, it would have earned some interest. In the interest of justice, we feel that the plaintiff has to pay an additional amount by way of interest at the rate of 16% per annum on the said sum of Rs, 4,90,000/- from the date of the suit till the date of payment or deposit which shall form part of the main sale consideration.
25. In this result the appeal is allowed. In modification of the judgment and decree passed by the Trial Court it is held that the suit of the plaintiff for specific performance of the agreement of sale dated 23-8-1978 is decreed directing defendant 1 to execute the registered sale deed on receipt of the balance of the sale consideration of Rs. 4,90,000/- along with interest at 16% per annum (now directed) from the plaintiff by defendant 1 in respect of the suit schedule property on or before 5-5-1999 failing which the Court shall get executed the registered sale deed in favour of the plaintiff on depositing the entire amount, as directed, in the Court.
26. For the reasons mentioned above, the cross objections are dismissed.
27. The plaintiff is also entitled for costs from the defendants throughout.