Karnataka High Court
Sri A S Gowda @ Sonne Gowda vs Sri M C Dayananda on 13 November, 2020
Bench: B.Veerappa, K.Natarajan
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF NOVEMBER, 2020
PRESENT
THE HON'BLE MR. JUSTICE B. VEERAPPA
AND
THE HON'BLE MR. JUSTICE K. NATARAJAN
REGULAR FIRST APPEAL NO.588 OF 2013
BETWEEN:
SRI A.S. GOWDA @ SONNE GOWDA
S/O. ANJANEYA GOWDA,
AGED ABOUT 46 YEARS,
RESIDING AT NO.143, MALLARA,
1ST FLOOR, CENTRAL EXCISE LAYOUT,
1ST CROSS, BHOOPASANDRA,
BANGALORE - 560 094.
...APPELLANT
(BY SRI R. BHADRINATH, ADV.)
AND:
1. SRI M.C. DAYANANDA
S/O. LATE CHENNABASAVAIAH,
AGED ABOUT 49 YEARS,
RESIDING AT NO.1131, NANDI,
RPC LAYOUT,
VIJAYANAGAR EAST,
BENGALURU - 560 040.
2
2. SRI SADASHIVA
S/O. LATE MADEGOWDA,
AGED ABOUT 52 YEARS,
RESIDING AT NO.4,
MAHADESHWARA NILAYA,
4TH MAIN, MEENAKSHINAGAR,
NEW EXTENSION,
KAMAKSHIPALYA,
BENGALURU - 560 079.
... RESPONDENTS
(BY SRI JANARDHANA G., ADV., FOR R-1; &
R-2: NOTICE DISPENSED WITH VIDE
COURT ORDER DATED 1-8-2013)
***
THIS REGULAR FIRST APPEAL IS FILED UNDER
SECTION 96 OF THE C.P.C. AGAINST THE JUDGMENT AND
DECREE DATED 30-6-2012 PASSED IN O.S. NO.4095 OF
2006 ON THE FILE OF THE XXV ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE, BENGALURU, DECREEING THE
SUIT FOR SPECIFIC PERFORMANCE OF CONTRACT.
THIS REGULAR FIRST APPEAL IS COMING ON FOR
FURTHER ARGUMENTS, THIS DAY, B. VEERAPPA, J.,
DELIVERED THE FOLLOWING:
JUDGMENT
This is a defendant's Regular First Appeal filed against the judgment and decree dated 30-6-2012 made in O.S. No.4095 of 2006 on the file of the XXV Additional City Civil and Sessions Judge, Bengaluru City, decreeing the suit of the plaintiffs for specific 3 performance directing the defendant to execute the sale deed in respect of the suit property in favour of the plaintiffs and if the defendant fails to execute the sale deed, the plaintiffs are at liberty to get the sale deed executed through the process of the Court.
2. For the sake of convenience, the parties herein shall be referred to in terms of their status before the trial Court.
3. The respondents, who are the plaintiffs before the trial Court, filed suit for specific performance on 5-5-2006 to enforce the agreement dated 4-2-2005 as per Ex.P.1 contending that the defendant entered into sale agreement with the plaintiffs on 4-2-2005 in respect of property bearing Site No.9, Municipal No.97, out of Survey No.2/6, more fully described in the schedule. The defendant got the suit schedule property registered in his name 4 in the execution of Court decree and obtained loan on the suit schedule property from Sree Thyagaraja Co-operative Bank Limited by pledging all the documents under a registered mortgage deed. In order to clear the said loan, the defendant entered into agreement with the plaintiffs to sell the property (No.9, Municipal No.97) measuring 150 X 120 ft. in all measuring about 18,000/- sq. ft. together with building measuring 25 squares zinc sheet shed and 7 squares RCC roofed house with all civic amenities situate at Hebbal, Kasaba Hobli, Bengaluru North Taluk. The sale consideration was fixed for Rs.40,50,000/- (Rupees forty lakh fifty thousand only) and received Rs.25,00,000/- (Rupees twenty- five lakh only) as advance from the plaintiffs on the date of the agreement, as the defendant wanted to clear the loan to get the original documents released from the Bank.
5
4. It is further case of the plaintiffs that on the request made by the defendant, the plaintiffs paid another Rs.5,00,000/- on 28-3-2005, for which, the defendant acknowledged through a receipt and delivered physical possession of the suit property to the plaintiffs before the witnesses. When things stood thus, the Bank, from which the defendant borrowed loan, issued public auction notice in respect of suit schedule property under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The defendant has not cleared the loan amount borrowed from the Bank. On 5-7-2005, the public auction notice was published in Vijaya Karnataka, daily newspaper and fixed the date of auction on 2-9-2005. The plaintiffs, being the members of the Bank, were ready and willing to discharge the outstanding in the credit Bank. The 6 plaintiffs invested huge amount of Rs.30,00,000/- on the suit schedule property and already in possession of the building believing the words of the defendant soon after receipt of the advance amount from the plaintiffs, he will repay to the Bank and clear the title. The plaintiffs forced to file the writ petition before this Court in Writ Petition No.20733 of 2005 against the concerned Officer of Sree Thyagaraja Co-operative Bank Limited and the defendant was also made as party-respondent in the writ petition. This Court, at the inception, issued stay notice on the condition that the plaintiffs shall deposit the entire amount outstanding to the Bank from the defendant. Accordingly, the plaintiffs have deposited the due amount to the Bank.
5. It is further contended that as per the agreement, the sale consideration was for 7 Rs.40,50,000/- as against which the plaintiffs have paid totally a sum of Rs.54,17,194/- which amounts to the excess of Rs.13,67,194/- and the same is liable to be repaid by the defendant to the plaintiffs. In spite of the demand and notice issued, the defendant has not come forward to execute the sale deed. Therefore, the suit came to be filed for relief as sought for.
6. The defendant has filed the written statement and denied the plaint averments and contended that the defendant is the owner of the suit schedule property and offered to sell the suit schedule property for sale consideration of Rs.1,08,90,000/- at the rate of Rs.605/- per square feet. Out of which, the plaintiffs wanted to enter into two agreements, i.e. one is registered agreement and another is unregistered agreement. Accordingly, the 8 parties entered into sale agreement. The defendant also admitted that he entered into a registered sale agreement on 4-2-2005 and another unregistered agreement entered on the very same day for sale consideration of Rs.1,08,09,000/- and also admitted that the defendant acquired the schedule property through the Court decree and subsequently, mortgaged the schedule property to Thyagaraja Co- operative Bank and also denied other averments with regard to payment. The defendant also denied that the writ petition filed before this Court by the plaintiffs was not within his knowledge. There are no terms agreed between the defendant and the plaintiffs to deposit the amount to the Bank. Further, the defendant denied that the sale consideration agreed between the parties is only Rs.40,50,000/- and he further denied that the plaintiffs have paid Rs.54,17,194/- and thereby, the 9 plaintiffs have paid excess of Rs.13,67,194/-. The defendant has also denied that he is trying to alienate the schedule property to the third party by filing a false, frivolous suit against each other in order to deceive and cause unlawful loss to the plaintiffs to knockout the property.
7. The defendant has further contended that on 4-2-2005, the plaintiffs have agreed to purchase the schedule property for Rs.1,08,90,000/- and with an intention to save the stamp duty, the plaintiffs requested the defendant to make two agreements, i.e. one is registered and another is unregistered. Accordingly, two agreements were entered. The defendant has further contended that Smt. Muniyamma filed O.S. No.2719 of 2006 against the defendant for declaration of consequential relief in respect of the schedule property and same is 10 pending for consideration. He further contended that Smt. Puttamma and Smt. Kumada have also filed O.S. No.15809 of 2005 and O.S. No.15810 of 2005 respectively for declaration of permanent injunction in respect of the schedule property and the same are pending before the Court. He further contended that one Smt. Kanthamma filed O.S. No.8828 of 2004 for partition and separate possession in respect of the schedule property which is also pending. He further contended that Sri Sadashivaiah filed O.S. No.3163 of 2005 for specific performance and the same is also pending. Hence, he sought to dismiss the suit.
8. Based on the aforesaid pleadings, the trial Court framed the following issues: 11
"1. Whether the plaintiffs prove that the defendant has agreed to sell the suit schedule property in favour of the plaintiffs for a consideration of Rs.40,50,000/- and executed an agreement to sell dtd. 4-2-2005 and received an amount of Rs.25 Lakhs as part consideration under the agreement?
2. Whether the plaintiffs prove that they have paid an amount of Rs.5,00,000/- on 28-03-2005 as further part consideration in pursuance of the agreement of sale?
3. Whether the defendant proves that the plaintiffs have entered into an agreement of sale on 4-2-2005 and agreed to purchase the suit schedule property for a consideration of Rs.1,08,90,000/- and paid an amount of Rs.25 Lakhs as advance 12 consideration under the said agreement?
4. Whether the defendant further proves that the plaintiffs have paid an amount of Rs.5 Lakhs on 28-3-2005 as additional advance amount in pursuance of the said agreement of sale?
5. Whether the plaintiffs prove that they have been always ready and willing to perform their part of obligation under the agreement?
6. Whether the court fee paid is insufficient?
7. Whether the suit filed by the plaintiffs is not maintainable under the law as contended by the defendant?13
8. Whether the plaintiffs are entitled for a decree of specific enforcement of contract as prayed for?
9. What order or decree?"
9. After framing the issues, the matter was referred to the Bangalore Mediation Centre for amicable settlement. Accordingly, the parties have filed memorandum of agreement under Section 89 of the Code of Civil Procedure read with Rules 24 and 25 of the Karnataka Civil Procedure (Mediation) Rules. On 21-6-2010, in terms of the memorandum of agreement entered into between the parties, both the plaintiffs and the defendant have admitted the sale consideration between them. The plaintiffs have agreed to pay a total sale consideration of Rs.2,00,00,000/- (Rupees two crore only), which includes Rs.54,17,194/- already paid by the plaintiffs to the defendant as advance sale 14 consideration on the date of agreement of sale and subsequently, when Thyagaraja Co-operative Bank Limited brought the suit schedule property for sale. Accordingly, the defendant has received Rs.60,00,000/- from plaintiff No.1 as part of the settlement amount and agreed that, out of the said amount, the defendant undertakes to pay and clear the claims of Smt. Muniyamma, mother-in-law of the defendant and the plaintiff in O.S. No.2791 of 2006 which is pending before the Mediation Centre.
10. On 11-8-2010, a joint memo was filed before the trial Court under which the defendant agreed to return the amount of Rs.60,00,000/- within forty-five days to the plaintiffs, if the defendant could not settle the dispute with his mother-in-law. After expiry of the said period also, the defendant failed to return the amount received 15 as per the mediation settlement and failed to appear before the Court. Therefore, the plaintiffs filed I.A. No.5 to return Rs.60,00,000/- with interest at the rate of 8% per annum. When the matter was posted on 18-10-2010, the defendant was absent. Again when the matter was posted on 30-10-2010 as the defendant did not comply with the terms of joint memo filed before the Court, the plaintiffs filed I.A. No.5. When the matter was posted on 14-12-2010, I.A. No.5 filed by the plaintiffs came to be allowed by the trial Court and directed the defendant to return Rs.60,00,000/- to the plaintiffs on or before 15-1-2011, failing which the defendant was liable to pay interest at the rate of 8% per annum from 15-1-2011 till repayment. It was also made clear that if the defendant failed to pay the amount on or before 15-1-2011, his defence stands struck off without any further orders.
16
11. The said order passed by the trial Court was subject matter of writ petition filed by the defendant in Writ Petition No.2013 of 2011. This Court by the order dated 31-1-2011, while disposing of the writ petition, modified the order passed by the trial Court on 14-12-2010 on I.A. No.5 in O.S. No.4095 of 2006 and directed the defendant to return Rs.60,00,000/- to the plaintiffs within forty- five days from 21-1-2011 together with interest at the rate of 14% per annum on the said sum from 21-6-2010 up to the date of realisation and in all other respects, the order remained unaltered. The defendant did not comply with the order dated 31-1-2011 passed by this Court. Again, the defendant filed Misc.Writ No.2507 of 2011 in Writ Petition No.2013 of 2011 praying for extension of time to comply with the order dated 31-1-2011. This Court by the order dated 26-5-2011 rejected the 17 said application and the same has reached finality. Accordingly, the defence of the defendant has been struck off.
12. Thereafter, in order to prove the case of the plaintiffs, plaintiff No.1 examined himself as P.W.1 and marked fifteen documents as per Exs.P.1 to P.15. As per the order passed on I.A. No.5, no opportunity was given for the defendant to adduce his evidence, but permitted him to cross-examine P.W.1.
13. The trial Court, considering both oral and documentary evidence on record, has recorded a finding that;
i. the plaintiffs proved that the defendant has agreed to sell the suit schedule property in favour of the plaintiffs for a consideration of Rs.40,50,000/- 18 and executed a registered agreement of sale dated 4-2-2005 and received amount of Rs.25,00,000/- as part consideration under the agreement.
ii. the plaintiffs have not proved that they have paid amount of Rs.5,00,000/- on 28-3-2005 as further part consideration in pursuance of the agreement of sale.
iii. the defendant failed to prove that the plaintiffs have entered into unregistered agreement of sale on 4-2-2005 and agreed to purchase the suit property for a consideration of Rs.1,08,90,000/- and failed to prove two agreements, but proved that the defendant has received Rs.25,00,000/- from the plaintiffs as advance in pursuance of Ex.P.1- registered agreement dated 4-2-2005. 19
iv. the plaintiffs proved that they have been always ready and willing to perform their part of obligation under the agreement. The Court-fee paid is sufficient. The suit filed by the plaintiff is maintainable.
14. Accordingly, the trial Court, by the impugned judgment and decree dated 30-6-2012, decreed the suit for specific performance directing the defendant to execute the sale deed in respect of the suit property in favour of the plaintiffs and if the defendant fails to execute the sale deed, the plaintiffs are at liberty to get the sale deed executed through the process of the Court. Hence, the present appeal by the defendant.
15. Heard the learned counsel for the parties to the lis.
20
16. Sri R. Bhadrinath, learned counsel for the appellant-defendant, has contended with vehemence that the impugned judgment and decree passed by the trial Court decreeing the suit of the plaintiffs is erroneous and contrary to the material on record and cannot be sustained. He has further contended that the trial Court has not looked into Ex.P.1-registered agreement of sale while decreeing the suit for specific performance. The trial Court while decreeing the suit has relied upon the report of the Bangalore Mediation Centre and the same cannot be sustained. He has further contended that there was no opportunity for the defendant to contest the case as his defence was struck off by the trial Court. Though the defendant filed writ petition before this Court, he could not succeed. 21
17. The learned counsel has further contended that this Court being the Appellate Court by exercising the powers under the provisions of Section 96 of the Code of Civil Procedure, shall provide an opportunity to the defendant to put forward his case. In the absence of the defendant's evidence, the trial Court was not justified in decreeing the suit of the plaintiffs without providing an opportunity to the defendant. He has further contended that the reasoning of the trial Court on issue No.3 that the defendant agreed for sale consideration of Rs.1,08,90,000/- and the plaintiffs have paid advance amount of Rs.25,00,000/-, wherein it is the specific case of the defendant that he executed two agreements, i.e. one registered sale agreement for Rs.40,50,000/- and another unregistered sale agreement showing the entire sale consideration amount of Rs.1,08,09,000/-. 22 Whereas the plaintiffs have paid the Court-fee of Rs.1,78,375/- on the sale consideration of Rs.40,50,000/-. Therefore, the trial Court is not justified in recording that the Court-fee is sufficient.
18. The learned counsel has further contended that the trial Court committed an error in not looking to the well settled basic principles of law that where a plaintiff comes to the Court, he must prove his case and should not whittled down, even in a case, where no defendant appears. It is to say that the Court can only do this by looking at the plaintiffs' evidence and pleadings supplemented by such questions as the Court may consider necessary and to completely eliminate any type of assistance from the defendant. The said aspect has not been considered by the learned trial Judge while passing the impugned judgment and decree and on that 23 ground, the impugned judgment is liable to be set aside. He has further contended that the trial Court has failed to consider the scope of Order VIII Rules 1, 5 and 10 of the C.P.C., though the defence of the defendant has been struck off, there is nothing in law to preclude him from demonstrating to the Court that the plaintiffs are not speaking the truth or that the evidence put forward by the plaintiffs are not sufficient to fulfill the terms of the statute and even on that ground, the impugned judgment is liable to be set aside.
19. The learned counsel has further contended that merely the defence is struck off by the trial Court, the suit of the plaintiffs cannot be decreed and it is the duty of the Court to consider the entire material on record in a proper perspective manner and proceed to pass the judgment in view of 24 the provisions of Order VIII Rule 10 of the C.P.C. which clearly depicts that where any party from whom a written statement under Order VIII of the C.P.C. is required to be filed under Rule 1 or Rule 9, fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment, a decree shall be drawn up. Therefore, the trial Court is not justified in decreeing the suit of the plaintiffs.
20. The learned counsel has further contended that there was no opportunity for the defendant to defend the case. Hence, he prayed that exercising the powers under Section 96 of the C.P.C., the matter be remanded to the trial Court. He has further contended that after filing the present 25 appeal, the defendant has deposited Rs.2,14,00,000/- on different dates before this Court and this Court by the order dated 16-4-2014, directed the Registry to deposit the said amount in Fixed Deposit for a period of two years. Therefore, he sought to allow the appeal.
21. In support of his contentions, the learned counsel has relied upon the dictum of the Hon'ble Supreme Court in the case of MODULA INDIA v. KAMAKSHYA SINGH DEO reported in (1988) 4 SCC 619, at paragraph No.23, it has been held as under;
"23. An objection to our above conclusion has been raised on the basis of the provisions of Order VIII of the Code of Civil Procedure. Rules 1, 5 and 10 of this order have been recently amended by the Amendment Act of 1976. We find nothing in these rules which will support the contention urged on behalf of the 26 respondents. Rule 1 merely requires that the defendant should present a written statement of his defence within the time permitted by the court. Under Rule 5(2), where the defendant has not filed a pleading it shall be lawful for the court to pronounce judgment on the basis of the facts contained in the plaint except against a person under disability but the court may in its discretion require any such fact to be proved. Again under Rule 10 when any party from whom a written statement is required fails to present the same within the time permitted or fixed by the court, the court "shall pronounce judgment against him or make such order in relation to the suit as it thinks fit". It will be seen that these rules are only permissive in nature. They enable the court in an appropriate case to pronounce a decree straightway on the basis of the plaint and the averments contained therein. Though the present language of Rule 10 says that the court "shall"27
pronounce judgment against him, it is obvious from the language of the rule that there is still an option with the court either to pronounce judgment on the basis of the plaint against the defendant or to make such other appropriate order as the court may think fit. Therefore, there is nothing in these rules, which makes it mandatory for the court to pass a decree in favour of the plaintiff straightway because a written statement has not been filed. Reference was made before us to sub-rule (1) of Rule
5. This sub-rule, however, has application only in a case where a pleading is filed but does not contain a specific or implicit denial of the averments contained in the plaint or other document to which it is a reply. Rule 5(1) cannot be made use of to sustain the contention that where there is no written statement the court is bound to accept the statements contained in the plaint and pass a decree straightway. These provisions of the Code of Civil Procedure, far from supporting the 28 contentions of the plaintiff that a decree on the basis of the plaint should follow a failure to file the written statement, rather indicate a contrary position, namely, that even in such cases, it is a matter for the court to exercise a discretion as to the manner in which the further proceedings should take place. We, therefore, do not think that the terms of Order VIII in any way conflict with the conclusion reached by us."
22. Per contra, Sri Janardhana G., learned counsel for the respondents-plaintiffs, while justifying the impugned judgment and decree passed by the trial Court, has contended that the registered sale agreement entered into between the parties dated 4-2-2005 as per Ex.P.1 is for total consideration of Rs.40,50,000/- and the plaintiffs have paid Rs.25,00,000/- as advance on the date of the agreement and Rs.5,00,000/- on 28-3-2005. On 29 1-9-2005, the plaintiffs deposited Rs.24,17,194/- to the Bank and auction was stayed. Hence, the plaintiffs have paid more than the amount agreed. He has further contended that though the plaintiffs denied the second agreement, even assuming two agreements are executed, he has paid excess amount mentioned in both the agreements. He has further contended that the matter was referred to the Mediation Centre at the instance of both the parties, and they have settled the matter for Rs.2,00,00,000/- on 21-6-2010. Accordingly, in pursuant of the settlement entered into between the parties before the Mediation Centre, plaintiff No.1 paid the defendant a sum of Rs.60,00,000/- in addition to Rs.54,17,194/-, totaling to Rs.1,14,17,194/-, but the defendant did not appear before the Court on the date fixed by the Court for signing the joint memo. On two different dates, the 30 defendant remained absent and not returned the amount in view of the joint memo dated 11-8-2010. Therefore, the plaintiffs filed I.A. No.5 before the trial Court to direct the defendant to return Rs.60,00,000/- to the plaintiffs together with interest. On 14-12-2010, I.A. No.5 was allowed and the trial Court directed the defendant to return Rs.60,00,000/- on or before 15-1-2011, failing which, the defendant to pay interest at the rate of 8% per annum from 15-1-2011 till repayment and further observed that, if the defendant fails to pay the amount on or before 15-1-2011, his defence stands struck off without any further orders.
23. The learned counsel has further contented that the said order passed by the trial Court striking off the defence was confirmed by this Court in Writ Petition No.2013 of 2011 dated 31 31-1-2011 and Misc.Writ No.2507 of 2011 seeking extension of time was also rejected on 26-5-2011. Therefore, he submits that the impugned judgment and decree passed by the trial Court is just and proper. He has further contended that after decree passed by the trial Court on 30-6-2012, the plaintiffs filed Execution Petition No.2089 of 2012 and by the order dated 15-12-2012, the trial Court executed the sale deed in favour of the plaintiffs. The present Regular First Appeal is filed on 3-4-2013, by that time, the sale deed has already been executed in favour of the plaintiffs. Therefore, he submits that in view of the conduct of the defendant before the trial Court, Mediation Centre as well before this Court and receiving excess amount than the agreed amount, this Court cannot exercise the powers to remand the matter in view of the provisions of Section 20(3) and (4) of the Specific Relief Act, 1963, 32 (for short, 'the Act'). He has further contended that, with regard to issue No.3, even assuming that the defendant has entered into agreement of sale for Rs.1,08,90,000/-, even then the total amount paid by the plaintiffs to the defendant is Rs.1,14,17,194/- and the same is not in dispute. He further contended that the deposit made by the defendant before this Court is voluntarily and without there being any orders from this Court. Therefore, he sought to dismiss the appeal.
24. In view of the rival contentions urged by the learned counsel for the parties, the points that arise for our consideration in this appeal are;
i. Whether the appellant-defendant has made out any grounds to reopen the case with regard to striking off the defence by the trial Court for not 33 complying with the order dated 14-12-2010 and upheld by this Court in Writ Petition No.2013 of 2011 dated 31-1-2011 in the facts and circumstances of the case?
ii. Whether the trial Court is justified in decreeing the suit of the plaintiffs for specific performance in the facts and circumstances of the case?"
25. We have given our thoughtful consideration to the arguments advanced by the learned counsel for the parties and perused the entire material including the original record carefully.
26. This Court being the First Appellate Court has to reconsider the entire material on record. On careful reading of the plaint averments, 34 it is the case of the plaintiffs that the defendant executed registered agreement of sale on 4-2-2005 for Rs.40,50,000/- and also raised several contentions with regard to pledging of the property by the defendant to Sree Thyagaraja Co-operative Bank Limited. The plaintiffs filed Writ Petition No.20733 of 2005 before this Court. This Court stayed the auction notice on the condition that the plaintiffs shall deposit the entire loan amount outstanding to the Bank from the defendant. While filing the written statement, the defendant has not disputed the registered agreement entered into between the parties, but he has taken a contention that there were two agreements, one is registered dated 4-2-2005 and another is unregistered on the same date. The first agreement is registered, which was agreed for the market value of Rs.40,50,000/- and another unregistered agreement for 35 Rs.1,08,90,000/- and the defendant has not performed part of his contract. A careful perusal of the plaint is to enforce only registered agreement dated 4-2-2005, i.e. Rs.40,50,000/-. The defendant has filed written statement, but he has not filed any counter claim that there were two agreements. It is also not in dispute that during pendency of the suit proceedings, the matter was referred to the Bangalore Mediation Centre for settlement, at the instance of the parties by the Civil Court.
27. It is also not in dispute that on 21-6-2010, both the parties have filed memorandum of agreement under Section 89 of the C.P.C. read with Rules 24 and 25 of the Karnataka Civil Procedure (Mediation) Rules, 2007, before the Bangalore Mediation Centre, wherein plaintiff No.1 agreed to pay a total sale consideration of 36 Rs.2,00,00,000/- which includes Rs.54,17,194/-and the defendant agreed to close or withdraw all the pending cases. It is also not in dispute that in terms of the memorandum of settlement, both the parties filed joint memo before the trial Court. When the compromise had to be recorded in the trial Court, the defendant has turned around. On 11-8-2010, a joint memo was filed before the trial Court under which the defendant agreed to return the amount of Rs.60,00,000/- within forty-five days to the plaintiffs, as the defendant could not settle the dispute with his mother-in-law. After expiry of the said period also, the defendant failed to return the amount received as per the mediation settlement and failed to appear before the Court. Therefore, the plaintiffs filed I.A. No.5 to return Rs.60,00,000/- with interest at the rate of 8% per annum. When the matter was posted on 18-10-2010, the defendant 37 was absent. Again when the matter was posted on 30-10-2010 as the defendant did not comply with the terms of joint memo filed before the Court, the plaintiffs filed I.A. No.5 under Section 151 of the C.P.C. before the trial Court to direct the defendant to return Rs.60,00,000/- together with interest. The defendant filed objections to the said application.
28. The trial Court by the order dated 14-12-2010 allowed I.A. No.5, which reads as under;
"I.A.5 filed by plaintiff under Sec.151 CPC is allowed.
Defendant is directed to return Rs.60 lakhs to the plaintiff on or before 15-01-2011, failing which defendant is liable to pay interest at the rate of 8% per annum from 15-01-2011 till repayment.38
If defendant fails to pay the amount on or before 15-01-2011 his defence stands struck off without any further orders."
29. Being aggrieved by the said order passed by the trial Court on I.A. No.5, the defendant filed Writ Petition No.2013 of 2011 before the learned Single Judge of this Court. This Court by the order dated 31-1-2011 disposed off the writ petition, which reads as under;
"Taking on record the affidavit dated 21-01-2011 of the petitioner, the order dated 14-12-2010 on I.A. No.5 in O.S. No.4095/2006 of the XXV Addl. City Civil Judge, Bangalore, is modified directing the petitioner-defendant to refund Rs.60,00,000/- to the plaintiff within 45 days from 21-01-2011, together with interest at 14% per annum on the said sum from 21-06-2010 upto the date of realization and in all other 39 respects, remains unaltered. Petition disposed of."
30. The said order was also not complied with. Subsequently, the defendant filed Misc.Writ No.2507 of 2011 in Writ Petition No.2013 of 2011, this Court by the order dated 26-5-2011 rejected the said application, which reads as under:
"Writ petition was disposed of by order dated 31-1-2011 taking on record the undertaking in form of affidavit dated 21-1-2011 of the petitioner to refund Rs.60,00,000/- to the plaintiff within 45 days from 21-1-2011, together with interest at 14% p.a. on the said sum from 21-6-2010 upto the date of realisation. Petitioner did not keep up the promise i.e. the undertaking set out in the affidavit, but filed this application dated 3-3-2011 to extend time by two months to comply with the undertaking. That period has since lapsed as on today, while the 40 petitioner has not complied with his undertaking. Therefore, the petitioner is not entitled to any equitable relief of extension of time.
Accordingly, Misc.W.2507/2011 is rejected."
31. The orders on I.A. No.5 passed by the trial Court striking off the defence is confirmed by this Court on 31-1-2011 in Writ Petition No.2013 of 2011 and subsequently, the application for extension of time also came to be rejected. The said orders passed by the trial Court as well as this Court have reached finality.
32. It is also not in dispute that subsequently after the decree passed on 30-6-2012, the plaintiffs filed Execution Petition No.2089 of 2012 to implement the decree. Accordingly, the trial Court 41 executed the sale deed in favour of the plaintiffs on 15-12-2012 and implemented the decree. The execution of decree and order has reached finality.
33. This Regular First Appeal came to be filed before this Court only on 3-4-2013. This Court by the order dated 27-9-2013 directed the parties to be present before the Court on 8-10-2013 to explore the possibilities of settlement and directed not to take any coercive steps till then by the plaintiffs to execute the decree. The trial Court, considering the evidence of plaintiff No.1-P.W.1 and considering Ex.P.1- original registered agreement of sale, Ex.P.2- certificate issued by Janatha Seva Co-operative Bank Ltd., Ex.P.3-copy of legal notice, Exs.P.4 and P.5-postal receipt and acknowledgement, Ex.P.6- reply notice, Ex.P.7-postal cover, Ex.P.8-copy of legal notice, Exs.P.9 & P.10-postal receipts, Ex.P.11-copy 42 of letter, Ex.P.12-loan sanction letter, Ex.P.13- certified copy of order in Writ Petition No.20733 of 2005 and Exs.P.14 & P.15-public notices, has proceeded to decree the suit. The learned counsel for the defendant contended that there were two agreements, one is registered and another is unregistered. The registered agreement dated 4-2-2005 was for total consideration of Rs.40,50,000/- and on that day, the defendant received Rs.25,00,000/- as advance. The defendant though filed written statement, but has not disputed regarding execution of the registered agreement of sale as per Ex.P.1 and receipt of advance amount of Rs.25,00,000/-(Rupees twenty-five lakh only). He has stated that as they were two agreements, he agreed for Rs.1,08,09,000/-(Rupees one crore eight lakh nine thousand only), but the plaintiffs have filed the suit only to enforce the registered 43 agreement of sale dated 4-2-2005 for Rs.40,50,000/- (Rupees forty lakh fifty thousand only).
34. It is also not in dispute that in pursuance of the agreement entered into between the parties before the Bangalore Mediation Centre, the parties agreed for settlement of Rs.2,00,00,000/- (Rupees two crore only) on 21-6-2010 and the defendant received Rs.60,00,000/-(Rupees sixty lakh only) in addition to Rs.54,17,194/-(Rupees fifty-four lakh seventeen thousand one hundred and ninety-four only) totaling to Rs.1,14,17,194/-(Rupees one crore fourteen lakh seventeen thousand one hundred and ninety-four only). It is also agreed by the defendant in the joint memo filed before the trial Court dated 11-8-2010 that he will return the amount of Rs.60,00,000/- within forty-five days from the date of joint memo. The material on record clearly 44 depicts that since the defendant has not paid the amount within time, his defence was struck off. The trial Court considering the material on record upheld issue No.1 holding that the plaintiffs proved that the defendant has agreed to sell the suit schedule property in favour of the plaintiffs for a consideration of Rs.40,50,000/- and executed the registered agreement of sale dated 4-2-2005 and received an amount of Rs.25,00,000/- as part consideration under the agreement. The trial Court considering issue Nos.2 to 4 recorded a finding that the plaintiffs failed to prove the receipt of Rs.5,00,000/- on 28-3-2005 and the defendant has proved that he has received Rs.25,00,000/-. The trial Court further recorded a finding that the plaintiffs prove that they have been always ready and willing to perform their part of obligation under the agreement. 45
35. Admittedly, in the present case, what was agreed between the parties was Rs.40,50,000/- as per Ex.P.1-registered agreement dated 4-2-2005 and in pursuance of the settlement before the Bangalore Mediation Centre, the defendant received a total sum of Rs.1,14,17,194/- and the same is not in dispute and the plaintiffs have paid excess amount than agreed to the defendant. Therefore, the trial Court was justified in holding that the plaintiffs was always ready and willing to perform their part of obligation. It is also not in dispute that the defendant received Rs.60,00,000/- in performance of the agreement and in joint memo dated 11-8-2010, he agreed to return the amount within forty-five days. After expiry of the period, the defendant failed to return the amount received as per the mediation settlement. Therefore, the plaintiffs were forced to file I.A No.5. The trial Court by the order dated 14-12-2010 has struck off 46 the defence of the defendant. The said order has reached finality in culmination with the order dated 31-1-2011 in Writ Petition No.2013 of 2011 and order dated 26-5-2011 in Misc.Writ No.2507 of 2011. Once the order passed by the trial Court striking off the defence of the defendant has reached finality and culminated in writ petition, this Court in the present Regular First Appeal cannot reopen and permit the defendant as if a fresh case is made out. The conduct of the defendant is disentitled to seek such relief. Admittedly, in the present case, after striking off the defence of the defendant, the trial Court has allowed the cross-examination of P.W.1 by the defendant. The defendant has not disputed the fact in the cross-examination that he had received Rs.1,14,17,194/-(Rupees one crore fourteen lakh seventeen thousand one hundred and ninety-four only) in pursuance of the registered agreement and 47 in pursuance of the settlement entered into between the parties before the Bangalore Mediation Centre and has not disputed the registered agreement. Hence, the trial Court proceeded to pass the judgment on merits strictly in accordance with law.
36. The learned counsel for the defendant has contended that the suit is not maintainable. Whatever be the grounds which the defendant has raised in the present appeal with regard to maintainability of the suit is now not available for consideration as the defence of the defendant struck off by the trial Court has reached finality. Even otherwise from the cross-examination of plaintiff No.1-P.W.1, nothing has been elicited as to the defendant's case regarding maintainability of the suit. In so far as discretionary exercise by the trial Court, the suit is for relief of specific performance, 48 the Court under its discretion is required to see whether relief of specific performance itself for execution of sale deed has to be granted or for refund of the amount. It is undisputed that there were several suits pending against the defendant in respect of the property in question. Admittedly, though the defendant set up two sale agreements, one is registered and another is unregistered, but the suit filed by the plaintiffs for specific performance to enforce the registered agreement of sale as per Ex.P.1 for Rs.40,50,000/-. Admittedly, as already stated supra, the defendant has received double the amount agreed. It is also not in dispute that the defendant also raised loan before Shri Janatha Seva Co-operative Bank Limited, Vijayanagara Branch, Bengaluru, on the property in dispute and non-payment of the said loan, the Bank 49 Authorities issued public notice as per Exs.P.14 and P.15 to auction the property in dispute. The defendant has not taken any steps to protect the property. It is the plaintiffs, who filed Writ Petition No.20733 of 2005 challenging the public notice. The learned Judge of this Court, by the order dated 31-1-2008, allowed the writ petition and quashed the public notice and thereby, the plaintiffs have protected the property. Therefore, in view of the provisions of Section 20(2) and (3) of the Act, the discretionary has to be exercised in favour of the plaintiffs, who paid the amount more than the agreed before the Bank by clearing loan made by the defendant and before the Mediation Centre. If the suit is decreed exercising the discretionary, no loss will be caused to the plaintiffs as contemplated under Section 20 of the Act. When the plaintiffs have shown the material evidence of the payment of 50 Rs.1,14,17,194/- (Rupees one crore fourteen lakh seventeen thousand one hundred and ninety-four only) by raising loan, if the relief of specific performance as prayed is not granted, the plaintiffs will be put to great hardship and the defendant will not be put to any loss. The plaintiffs have to repay the loan amount borrowed with interest. Therefore, the trial Court is justified in granting relief of specific performance in favour of the plaintiffs. It is also not in dispute that after suit came to be decreed on 30-6-2012, immediately, the defendant has not filed any appeal and the plaintiffs filed Execution Petition No.2089 of 2012 and the trial Court considering the material on record, proceeded to pass the order and executed the registered sale deed in favour of the plaintiffs on 15-12-2012. The said order has also reached finality.
51
37. The dictum of the Hon'ble Supreme Court in the case of MODULA INDIA v. KAMAKSHYA SINGH DEO reported in (1988) 4 SCC 619 relied upon by the learned counsel for the appellant- defendant is not applicable to the facts and circumstance for the present case.
38. In view of the above, point No.1 raised in the present appeal is answered in the negative holding that the appellant-defendant has not made out any grounds to reopen the case with regard to striking off the defence by the trial Court and point No.2 is answered in the affirmative holding that the trial Court is justified in decreeing the suit of the plaintiffs for specific performance.
39. For the reasons stated above, the impugned judgment and decree passed by the trial Court is based on the oral and documentary 52 evidence on record and the same does not call for any interference. Hence, the appeal being devoid of merits is liable to be dismissed.
40. Accordingly, the Regular First Appeal is dismissed.
41. The learned counsel for the appellant- defendant submitted that the defendant deposited Rs.2,14,00,000/- (Rupees two crore fourteen lakh only) voluntarily on various dates before this Court without any orders from this Court and this Court by the order dated 16-4-2004 directed the Registry to deposit the said amount in Fixed Deposit for a period of two years. Hence, he prayed that the said amount may be refunded to the defendant. The learned counsel for the respondents-plaintiffs rightly and fairly submitted that he has no objection to refund the amount deposited by the defendant 53 before this Court. The said submission is placed on record.
42. In view of the fair submission of the learned counsel, the Registry is directed to refund the deposited amount to the appellant-defendant with interest, if any, on proper identification and in accordance with law.
No order as to costs.
Sd/-
JUDGE Sd/-
JUDGE kvk