Karnataka High Court
M/S Sai Constructions vs M/S Modern India Limited on 27 September, 2024
Author: B.M.Shyam Prasad
Bench: B.M.Shyam Prasad
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NC: 2024:KHC-D:14329-DB
RFA No. 100308 of 2024
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 27TH DAY OF SEPTEMBER, 2024
PRESENT
THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD
AND
THE HON'BLE MR. JUSTICE C M JOSHI
REGULAR FIRST APPEAL NO.100308 OF 2024 (SP)
BETWEEN:
M/S. SAI CONSTRUCTIONS,
A PARTNERSHIP FIRM,
DULY REPRESENTED BY ITS
MANAGING PARTNER,
SHRI. RAVINDRA,
S/O. GANAPATI REVANKAR,
AGE: 57 YEARS, OCC: BUSINESS,
R/O. SAI COMPLEX, DURGAD BAIL,
HUBBALLI.
Digitally signed
by VINAYAKA B V
Location: HIGH
COURT OF
KARNATAKA
...APPELLANT
DHARWAD
BENCH
DHARWAD
Date: 2024.10.01
12:38:11 +0530
(BY SRI. A.P.MURARI, ADVOCATE)
AND:
1. M/S. MODERN INDIA LIMITED,
ALSO KNOWN AS
THE MODERN MILLS LIMITED,
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NC: 2024:KHC-D:14329-DB
RFA No. 100308 of 2024
A PUBLIC LIMITED COMPANY REGISTERED
UNDER THE INDIAN COMPANIES ACT 1956,
HAVING ITS REGISTERED OFFICE AT
MODERN CENTER, SANE GURUJI MARG,
MAHALAKSHMI, MUMBAI-400011,
DULY REPRESENTED BY ITS CHAIRMAN
AND MANAGING DIRECTOR.
2. SHRI. VIJAY KUMAR,
S/O. MAHAVEERAPRASAD JATIA,
AGE: 58 YEARS, OCC: BUSINESS,
CHAIRMAN AND MANAGING DIRECTOR,
M/S. MODERN INDIA LIMITED,
R/O. MODERN CENTRE, SANE GURUJI MARG,
MAHALAKSHMI, MUMBAI-400011.
3. M/S. SANJAY BUILDERS AND DEVELOPERS,
A PARTNERSHIP FIRM,
HAVING ITS OFFICE AT,
NO.8, II FLOOR, KATARIA
TRADE CENTRE, KOPPIKAR ROAD,
HUBBALLI,
DULY REPRESENTED BY ITS
AUTHORIZED SIGNATORY,
SHRI. MANGILAL S/O. HARKCHANDJI JAIN,
AGE: ABOUT 75 YEARS, OCC: BUSINESS,
R/O. NO.8, II FLOOR,
KATARIA TRADE CENTRE,
KOPPIKAR ROAD, HUBBALI-580020.
4. SHRI. VIJAY S/O. MANGILAL JAIN,
AGE: 50 YEARS, OCC: BUSINESS-PARTNER,
M/S. SANJAY BUILDERS AND DEVELOPERS,
R/O. NO.8, II FLOOR, KATARIA TRADE CENTRE,
KOPPIKAR ROAD, HUBBALLI-580020.
5. SHRI. MANJUNATH BHAT,
AGE: 54 YEARS, OCC: ADVOCATE- GPA
HOLDER OF RESPONDENT NO.1 COMPANY,
R/O. PLOT NO.12, "SHREEGURU"
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NC: 2024:KHC-D:14329-DB
RFA No. 100308 of 2024
AKASH PARK, KUSUGAL ROAD,
HUBBALLI-580023.
...RESPONDENTS
(BY SRI. GANAPATI N.HEGDE, SENIOR COUNSEL FOR
SRI. S.B. DODDAGOUDAR, ADVOCATE FOR R1 TO R5;
SRI. K.ARUNKUMAR, SENIOR COUNSEL FOR
SRI. SHRIKANT T. PATIL, ADVOCATE FOR R1 AND R2)
THIS RFA IS FILED UNDER SEC. 96 READ WITH
ORDER 41 RULE 1 OF C.P.C., AGAINST THE JUDGMENT
AND DECREE DATED 27.04.2024 PASSED IN
O.S.NO.362/2019 ON THE FILE OF THE I ADDITIONAL
SENIOR CIVIL JUDGE AND JUDICIAL MAGISTRATE FIRST
CLASS, HUBBALLI, DISMISSING THE SUIT FILED FOR
SPECIFIC PERFORMANCE.
THIS RFA HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 23.09.2024 AND COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT', THIS DAY,
B.M.SHYAM PRASAD J., PRONOUNCED THE FOLLOWING:
CORAM: THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD
AND
THE HON'BLE MR. JUSTICE C M JOSHI
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NC: 2024:KHC-D:14329-DB
RFA No. 100308 of 2024
CAV JUDGMENT
(PER: THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD) This appeal is by the unsuccessful plaintiff in a suit for specific performance. The suit is in O.S. No.362/2019 on the file of the learned Principal Senior Civil & CJM, Dharwad [for short, 'the civil Court'], and the civil Court's impugned judgment and decree are dated 27.04.2014. This suit is initially filed in OS No.130/2014 but is registered in Com. O.S. No. 39/2019 on transfer to a Commercial Court. The suit is transferred back to the civil Court and is assigned the present number.
2. The appeal is taken up for final disposal as mentioned on behalf of the parties when the appeal is listed for orders on the interim application filed by the appellant for temporary injunction against third party interest being created in the subject -5- NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 property, and because the dispute over the subject property is despite prolonged earlier proceedings with M/s Karnataka Industrial Area Development Board [M/s KIADB]. The parties to the proceedings being commercial entities, for reasons of convenience, are referred, by their names.
3. M/s Sai Constructions is a registered partnership firm, and it asserts that it has entered into transaction to purchase an extent of six acres of land in Rayapura Industrial Area developed by M/s KIADB in Rayapura Village, Dharwad Hobli and Taluk for a total sale consideration of Rs.3,20,00,000/- and it has paid a sum of Rs.2,10,00,000/- as advance part of the sale consideration. M/s Sai Construction has asserted a contract with M/s Sanjay Builders and Developers [referred to M/s Sanjay], but it relies upon an agreement between M/s Modern India Limited [the admitted owner of this property and referred to as 'M/s -6- NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Modern India'] and M/s Sanjay and culmination of certain writ proceedings as against M/s KIADB to justify its case for specific performance. The details of the writ proceedings are as stated hereafter. The details of the writ proceedings as against M/s KIADB:
4. M/s KIADB has allotted an extent of 20 acres and 5 guntas in Plot No. 1 of Rayapura Industrial Area, Dharwad to M/s Sundatta Foods and Fibers Ltd. way back in the year 1975 and has also issued Possession Certificate dated 28/31.05.1977 [Ex. P-16]. M/s Sundatta Foods and Fibers Ltd. is merged with M/s Modern Mills Ltd pursuant to amalgamation vide the orders of the High Court of Bombay in the necessary proceedings and is presently known M/s Modern India. The concerned landowners have called in question the acquisition proceedings by M/s KIADB in W.P. Nos. 3036-3046/1977. This Court has disposed of the writ -7- NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 petitions on 17.12.1982 quashing the acquisition but with liberty to M/s KIADB to resume acquisition proceedings from the stage of Section 28[3] of the Karnataka Industrial Area Development Act, 1966.
4.1 M/s KIADB has once again commenced acquisition proceedings and completed the same, but instead of ensuring that the same 20 acres [Plot No. 2] is allotted to M/s Modern India without any change, it has caused the Communication dated 30.04.2002 [Ex. P 15] to M/s Modern India insisting upon payment of a higher price for the allotment and informing that an extent of 20 acres [as against the original 20 acres 05 guntas] is readily available. However, the State Level Single Window Agency [SLSWA] by the order dated 19.01.2004 under the Karnataka Industries [Facilitation] Act, 2002 has recommended to M/s KIADB to allot only 6 acres of land and consequentially, M/s -8- NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 KIADB has issued an Allotment Letter dated 07.05.2004 to M/s Modern India1.
4.2 M/s Modern India has challenged this Letter dated 07.05.2004 in W.P. No. 20329/2004, but unsuccessfully as the same is dismissed on 23.08.2007 [Ex. P 21]. M/s Modern India has carried this challenge in W.A. No. 1948/2007 before a Division Bench of this Court. M/s KIADB, when this intra-court appeal was pending, has agreed to allot 20 acres but in two blocks. This intra-court appeal is disposed of in the light this outcome vide the order dated 16.11.2011 [Ex. P22] directing M/s KIADB to put M/s Modern India in possession of 14 acres of land in Gamanaghatti Industrial Area while observing that this shall be in addition of the 6 acres of land in Rayapura in the possession of M/s Modern India. The first parcel is in 1 M/s Sai Constructions has not marked either the SLSWC Order or the Order dated 07.05.20004, but M/s KIADB Note 22.02.2014 is marked as Ex. P 18. The Note refers to these two Orders.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Plot No. 2 measuring 6 acres in Block No. 19[P] and 20 of Rayapura Village Dharwad Hobli and Taluk, and this property is the subject matter of this suit [though there is dispute about the identity for reasons of convenience this property is referred to as 'the Subject Property']. M/s KIADB has executed the sale deed dated 25.03.2014 [Ex.P.6] for the subject property in favour of M/s Modern India.
4.3 M/s KIADB has allotted the additional extent of 14 acres in Gamanaghatti Industrial Area in Gamanaghatti Village of Hubballi Taluk. The plaintiff, apart from the contract to purchase the property measuring 6 acres, has also entered into agreement to purchase this extent of 14 acres, and it's suit for specific performance of such agreement is in OS No.156/2014, but on transfer to a Commercial Court is registered in Com. OS No. 38/2019. The suit is transferred back to the civil Court and is assigned the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 original number. M/s Sai Construction's interest in the property and the cause for the present suit for specific performance of its asserted Suit Agreement [Ex P 10] is encapsulated thus2.
The pleadings of M/s Sai Constructions [the plaintiff]
5. M/s Modern India put up the plot [20 acres 05 guntas as initially allotted] for sale through M/s Sanjay with whom it had an arrangement in terms of the MOU dated 13.10.2006 [Ex. P 5 which is referred to as '2010 MOU'] because it could not commence the proposed unit in the allotted plot and uncertainty over conclusion of the allotment proceedings, and because it found that it could benefit better if the subject property is alienated. M/s Modern India has assigned its rights to purchase this extent of 20 acres and 5 Guntas for a total price of Rs.1,41,00,000/- in favour of Mrs. 2 The details as encapsulated hereafter are from the plaint and the evidence is let by the plaintiff.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Laxmidevi, Mr. Babulal, Mr. Mangilal S. Jain and Mr. Prahalad Kadam, and some of these persons have come together to constitute M/s Sanjay.
5.1 M/s Sai Constructions, upon coming to know about M/s Modern India's intention, has offered to purchase the subject property for a total sum of Rs.3,20,00,000/-3. M/s Sanjay, acting under the 2006 MOU, has accepted the M/s Sai Construction's offer and received a sum of Rs.1,35,00,000/- as advance. M/s Sai Constructions has paid Rs.5,00,000/- by cheque and the remaining amount by cash. M/s Sanjay has assured M/s Sai Constructions that the sale deed for the subject property would be executed 'on completion of paperwork with M/s KIADB'.
5.2 M/s Sai Constructions and M/s Sanjay, based on the 2006 MOU, have entered into Sale 3 The sale price, according to the plaintiff, is at the rate of Rs.54,00,000/- per acre.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Agreement dated 05.11.20104 [Ex. P 10 which is hereafter referred to as the 'Suit Agreement']5 incorporating the afore terms. M/s Sai Constructions has paid a sum of Rs.25,00,000/- on 27.12.2010 and another sum of Rs.50,00,000/- on 15.09.2012 under separate acknowledgements which are marked as Ex.P.10 [e] and Ex. P 10[f]. M/s Sai Constructions has thus paid a sum of Rs.2,10,00,000/-. M/s Sai Constructions in this Suit Agreement has initially described the subject property as bearing Plot No. 20 in Block No. 43 of Rayapura Village, Dharwad and measuring six [6] acres with definite boundaries.
5.3 M/s Modern India and M/s Sanjay have also reiterated this arrangement with the execution of Memorandum of Understanding dated 23.12.2010 4 This Agreement is styled as "Agreement for Alienation of Industrial Plot, and the Stamp Paper is purchased for a Bond under Article of the Karnataka Stamp Act, 1957. 5 During the trial, the defendants raising objections on the Stamp duty paid, M/s Sai Constructions has paid deficit the Stamp duty/penalty.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 [Ex.P.25 and referred to as '2010 MOU'] but revising the total sale price payable by M/s Sanjay to a sum of Rs.1,60,00,000/-. M/s Sai Constructions has entered into an Agreement dated 03.08.2010 even in respect of the 14 acres paying a sum of Rs.85,00,000/- and M/s Sai Construction's claim for specific performance is pending in O.S. No. 156/2014. M/s Sanjay has executed a common Acknowledgement dated 14.11.2012 [Ex P 11] accepting that it has received a total sum of Rs.2,95,00,000/- in respect for these two parcels of properties.
5.4 M/s Sai Constructions has caused the Notice dated 24.01.2014 [Ex.P.7] to M/s Modern India, and M/s Modern India, instead of executing sale deed for the subject property, has written its letter dated 14.02.2014 [Ex.P.8] to M/s Sanjay asking for confirmation about the Sale Agreement with M/s Modern India. M/s KIADB has executed the sale deed
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 dated 25.03.2014 [Ex. P-6] transferring the subject property to M/s Modern India.
5.5 The plaintiff, before filing the present suit for specific performance, has filed the suit in OS No. 114/2014 for permanent injunction, but has withdrawn the same to file this suit6. M/s Sai Constructions has initially filed this suit describing the subject property as bearing Plot No. 2 of Rayapura Industrial Area, Rayapura Village, situated in Block No. 19 (part) and 20 of Rayapura Village, Dharwad Hobli, Taluk and District giving the boundaries which are distinct and separate from the boundaries as mentioned in the Suit Agreement.
6 It is pointed out on behalf of the defendants that M/s Sai Constructions has filed this suit with liberty under the relevant provisions of CPC.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 The pleadings of M/s Modern India and M/s Sanjay
6. M/s Modern India and its Chairman [the second defendant]7 have filed Written Statement specifically contending that they are not aware of any transaction between M/s Sai Constructions and M/s Sanjay but asserting that it has entered into 2010 MOU with M/s Sanjay for sale of the subject property and has also executed a power of attorney in favour of third defendant in terms of this MOU. M/s Modern India has also asserted that it cannot be fastened with any liability and if any defendant has to answer M/s Sai Construction's claim, it has to be M/s Sanjay only.
6.1 On the other hand, M/s Sanjay has filed Written Statement denying the transaction as asserted by M/s Sai Constructions but contending that its Managing Partner [Mr. Mangilal Jain] has received 7 The second defendant is admittedly the chairman of M/s Modern India.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Rs. 5,00,000/- as a hand loan and that, in accordance with the business practice, he has signed blank stamp papers and handed over to the plaintiff. M/s Sai Constructions has misused such papers to fabricate the Suit Agreement and the different acknowledgements.
6.2 Mr. Vijay S/o Mangilal Jain [the fourth defendant, a partner of M/s Sanjay] has filed Written Statement essentially contending that there is no privity of contract between M/s Sai Constructions and M/s Sanjay and denying the plaint assertions. M/s Sai Constructions has arrayed Mr. Manjunath Bhat as the fifth defendant asserting that he, acting on behalf of M/s Modern India at the behest of M/s Sanjay, has represented M/s Modern India in the sale deed dated 25.03.2014 executed by M/s KIADB for the subject property. However, the fifth defendant has filed written statement denying having acted as power of attorney for M/s Modern India.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Issues framed by the civil Court in the light of the afore initial pleadings
7. The civil Court on 16.06.2016 has framed Issue No. 1 and 2 as regards the M/s Sai Construction's burden to prove that it had entered into Suit Agreement with M/s Modern India to purchase the subject property on payment of different amounts as asserted and its readiness and willingness. The civil Court has framed Issue No. 3 requiring M/s Sanjay to establish that it had only borrowed a loan of ₹5,00,000/- from M/s Sai Constructions and handed over signed blank stamp papers in accordance with the business practice. Further, the civil Court has framed Issues on whether the subject property is properly described and whether M/s Sai Constructions proves that it is entitled for specific performance of the Sale Suit Agreement.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Amendment of the Plaint
8. In the year 2021, M/s Sai Constructions, which had not referred to the sale deed dated 25.03.2014 by M/s KIADB in favour of M/s Modern India in the plaint, has filed an application for amendment of the plaint [a] to include reference to the sale deed dated 25.03.2014 and [b] to amend the schedule appended to the plaint to describe the subject property with reference to this sale deed8. The civil Court has rejected this application in part insofar as it related to description of the subject property.
8.1 This Court in W.P. No. 108575/2017 and connected matters has allowed the application by its Order dated 16.07.2021 and permitted M/s Sai Constructions to amend the plaint as regards the sale deed executed by M/s KIADB and also the description of 8 The plaint is amended is in the year 2019 to refer to the 2010 MOU.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 the subject property with reference to the sale deed dated 25.03.2014. M/s Sai Constructions has accordingly amended the plaint. M/s Modern India and the other defendants have filed their respective additional Written Statement contesting the description of the subject property as aforesaid. The civil Court on 26.08.2021 has framed additional Issue requiring M/s Sai Constructions to show that it is entitled for the relief in respect of the property as is described in the amended plaint.
The details of the witnesses and exhibits
9. M/s Sai Constructions has examined four witnesses. Mr. Ravindra s/o Ganapathi Revankar [PW 1] is examined as its Managing Partner, Mr. Srinivas S/o Fakirasa Dalbanjan [PW 2] is examined as one of the witnesses to the 2006 MOU, and Mr. Manjunath S/o Annappa Shet [PW 3] is examined as
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 one of the witnesses to the Suit Agreement. Mr. Balakrishna s/o Devaraya Hegde [PW 4], a member of the bar is examined to demonstrate that the Suit Agreement is drafted under his guidance. M/s Sai Constructions has marked the 2006 and 2010 MOUs/ Suit Agreement/Sale Deed dated 25.03.2014, Communication/ Note from M/s KIADB, the copies of the orders in the different proceedings, Certificates of registration of the M/s Sai Constructions and M/s Sanjay, the M/s Sai Construction's Partnership Deed and the communication exchanged just prior to the commencement of the suit. These documents are marked as Exs P1-P29.
9.1 The defendants have examined three witnesses. Mr. Manjunath Bhat [DW 1], the fifth defendant, speaks about the efficacy of the 2006 MOU. Mr. Mangilal [DW 2] speaks about the loan transaction with M/s Sai Constructions and why the Suit
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Agreement must be disbelieved and Mr. Sreedhar [DW 3], a learned member of the bar and a colleague of Mr. Balakrishna s/o Devaraya Hegde [PW 4], is examined to explain how an Acknowledgement for receipt of the total sum of Rs. 2,95,00,000/- [Ex. P 11] has come about. The defendants have marked Ex. s D 1 - 21. These are certain Acknowledgements, a copy of the plaint in OS No. 114/2014, Record of Rights, IT Returns and Notices exchanged. On behalf of the defendants, copies of the IT Returns of some of the persons associated with the plaintiff/partners are confronted to PW1 in cross- examination, and because the witnesses have admitted these documents, they are marked separately as Ex. s I1 - 9 but subject to proof.
Evidence of PW1 [Mr. Ravindra Revankar]
10. Mr. Ravindra Revankar has stated that M/s Sai Constructions is a joint family partnership firm
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 primarily engaged in the business of real estate properties with Mr. Anil, Prakash, Mr. Suresh, Mr. Sainath9 [his brothers] and Mrs. Savitribai [his mother] as partners. The 2006 MOU [Ex P 5] is entered into between M/s Modern India [represent by the second defendant] with Mrs. Lakshmidevi, Mr. Babulal, Mr Mangilal Jain [one of the partners of M/s Sanjay] and Mr. Prahalad Kadam to purchase the plot allotted by M/s KIADB for a consideration of Rs. 1,41,00,000/-. He has signed this MOU has a witness. This witness, in his examination-in-chief, has essentially reiterated the contents of the plaint.
10.1 Mr. Ravindra Revankar is cross examined elaborately on different aspects such as [i] the details of the parties who are signatories to the 2006 MOU and Suit Agreement, [ii] the details of the 9 Since he has died in 2020, his legal heirs i.e., wife [Mrs. Malathi] and children [Mr. Vinay and Mrs. Shwetha] have joined the firm.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 constitution of M/s Sai Constructions and M/s Sanjay as partnership firms, [iii] the description of the subject property, [iv] the payment of asserted sale consideration by way of cash and [v] the returns filed declaring cash payment. The cross-examination in these regards, as is read by this Court, is essentially to demonstrate that M/s Sai Constructions has fabricated the Suit Agreement using blank stamp papers signed as part of usual business practice while availing loan and that the concerned from M/s Sai Constructions has contrived Acknowledgement dated 14.11.2012 [Ex. P 11].
10.2 Mr. Ravindra Revankar has stated that M/s Sanjay is registered as a Partnership Firm in 2010, but in the year 2006, Mr. Mangilal had formed an Association of persons. M/s Sai Constructions has duly filed its IT Returns declaring the Assets and Liabilities in the annexed Summary Statement. When it is suggested to him that 'Sai Constructions' [as mentioned
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 in Ex P1] is different from 'Shri Sai Constructions' and M/s Sai Constructions are different entities, he has denied the same. He has also denied seeking the assistance of Mr. Balakrishna Devaraya Hegde [PW4] for the suit transaction while admitting he is consulted as regards the dispute with M/s KIADB. He has denied the suggestion that a Chartered Accountant is consulted before making the alleged payment in cash to the concerned respondents.
10.3 Mr. Ravindra Revankar has admitted that typically in business receipts are obtained while making payments in cash, and even in the present transaction such receipts and acknowledgements have been obtained as and when cash payments are made. He has stated, contrary to the pleadings, that the amount of Rs.1,35,00,000/- is paid over a period of time and each time receipts are obtained in that regard. When further questioned on the non-production of
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 these receipts in the present proceedings, he states that the same are in the safe custody of the concerned civil Court in OS No. 156/2014.
10.4 Mr. Ravindra Revankar admits that the first four pages of 2006 MOU [Ex P 5] do not bear the signature of Mr. Mangilal Jain and that same are signed by one of the signatories of M/s Modern India while also stating that this MOU is drafted under the supervision of Mr. Balakrishna Devaraya Hegde. He, admitting that there is no reference to the 2006 MOU in the notice [Ex P7] and that he did not have the custody of the MOU when the notice was sent, he has stated that he has collected this from the office of Mr. Balakrishna Devaraya Hegde. On the antecedents of Mr. Srinivas [PW 2], he has admitted that this person is involved in a criminal case registered against him for forgery, but denies any involvement in helping him in his bail application in such proceedings.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 10.5 On the description of the subject property in the Suit Agreement and the plaint, Mr. Ravindra Revankar has essentially stated that M/s KIADB had confined the initial allotment from 20 acres to 6 acres and there was dispute in this regard, that the description of this extent was tentative until the execution of the Sale Deed dated 23.04.2014. He also insists that the 2006 MOU is also with respect to the plot in Block No. 43 though it has not been specifically mentioned therein.
10.6 While admitting that there are certain corrections in the schedule of this document, he states that this must be done either by M/s Modern India or M/s Sanjay and he will not know about it because M/s Sai Constructions is not a party to the same. He has stated that he has been to the subject property and that this property is bound by the properties for which M/s
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 KIADB has executed agreements in favour of third parties and that land in Block No. 43 is available but some part of the same is acquired by the railway authorities.
Evidence of PW2 [Mr. Srinivas Dalbanjan]
11. Mr. Srinivas Dalbanjan is examined as PW 2, and he is one of the signatories to the 2006 MOU as a witness. He has acknowledged that he is aware who are the parties to the MOU. He has essentially confirmed the execution of the 2006 MOU affirming the signatures in the document and denying the suggestions put forth by the learned counsels to suggest otherwise. When cross-examined on his antecedents to impeach his credibility as an independent witness, he has offered a detailed explanation for the criminal proceedings instituted against him essentially conveying that he is falsely implicated in such proceedings and that Mr. Ravindra Revankar has immensely helped him
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 during the time of the criminal proceedings instituted against him by being one of the surety.
11.1 Mr. Srinivas Dalbanjan has stated in his cross- examination that Mrs. Lakshmidevi, Mr. Babulal, Mr. Mangilal Jain and Mr. Prahalad Kadam, as also Mr. Balakrishna Devaraya Hegde, were present at the time of signing the 2006 MOU in Bangalore and it was during this time Mr. Prahalad has informed him that the consideration of such MOU is Rs.1,41,00,000/- and that Rs. 15,00,000/- is paid by Demand Draft] and the remaining amount would be paid within a certain time frame. When questioned on the specifics of the MOU [such as survey numbers, corrections with the pen in the MOU] he has either stated that he does not remember or know the same.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Evidence of PW 3 [Mr. Manjunath Annappa Shet]
12. Mr. Manjunath Annappa Shet, is one of the witnesses of the Suit Agreement [Ex P 10] and he admits signing this document mentioning the name of the other witness [Mr. Sujay S Naik]. He has deposed that the agreed sale consideration is Rs. 3,20,00,000/- [at the rate of Rs. 54,00,000/- per acre] and that Rs. 1,30,00,000/- is paid in cash on the same day and Rs. 5,00,000/- is paid in cheque to Mr. Mangilal Jain with the agreement that the balance amount would be paid after completion of paperwork.
12.1 In the cross-examination Mr. Manjunath Annappa Shet admits that he has worked with M/s Sai Constructions in its business under the name and style 'Sai Gold Palace' between the years 2005 and 2018, that he has signed as a witness to many documents to which M/s Sai Constructions is a
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 party, including the M/s Sai Construction's Partnership Deed [Ex. P2] and he has identified his signature in this Deed as Ex. P2a. While stating that Mr. Mangilal had got the Suit Agreement prepared and he came down from the first-floor office premises to sign this agreement, he states that every time money is handed over by cash in the office, receipt/acknowledgement are obtained. Mr. Manjunath Annappa Shet, about the contents of the Suit Agreement, has stated that he does not know the contents because it is in English, and he can only say what he has been informed by Mr. Mangilal.
Evidence of PW 4 [Mr. Balakrishna Devaraya Hegde]
13. Mr. Balakrishna Devaraya Hegde is a practicing advocate and has represented M/s Modern India and its affiliates in its case in WA No.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 1948/200710 . He has stated that he is the unwilling proverbial horse which is drawn to water and that M/s Modern India developed cold feet because of the continued writ proceedings. M/s Sanjay was constituted in the year 2010 and entered into agreement with M/s Modern India taking possession of 6 acres of land. The plaintiff, a registered family concern, was interested in buying the subject property but was vexed about the element of risk and therefore he was consulted. He has advised both the parties that the litigation was only with respect of the remaining 14 acres while the 6 acres of land at Rayapura Industrial Area was always a safe bet and this advice has been acted upon and the parties have entered into the Suit Agreement.
10 This intra court appeal is disposed of on 16.12.2011 with M/s KIADB making a statement that it would indeed allot 20 acres in two separate plots - Ex P 22.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 13.1 The cross-examination of Mr. Balakrishna Devaraya Hegde is recorded in question- and-answer format. It is suggested to Mr. Balakrishna Devaraya Hegde that M/s Sai Constructions is his client and that he has taken up its cases but he has denied the same. He has confirmed that signing of the MOU dated 23.12.2010. He has also denied that suggestion M/s Sanjay had signed 5 blank papers and letter heads and handed it over to him stating that M/s Sai Constructions has not misused such blank paper documents.
Evidence of DW 1 [Mr. Manjunath Bhat]
14. Mr. Manjunath Bhat has identified himself as a legal practitioner admitting that he has begun his practice with Mr. Balakrishna Devaraya Hegde [PW 4]. In his examination-in-chief, he has essentially denied every averment in the plaint but has
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 also stated that as per 2010 MOU M/s Modern India has assigned all the rights, liabilities and obligations of the land measuring 20 acres 05 guntas11 in favour of M/s Sanjay for a consideration of a sum of Rs.1,60,00,000/-. He has further stated that 2010 MOU expressly records complete indemnity from M/s Sanjay against all the actions against M/s Modern India.
14.1 Mr. Manjunath Bhat, when cross- examined on the execution of 2006 MOU, has stated that such document is an executory [an incomplete] agreement and the same is not acted upon, and he has also stated that all the concerned parties have not signed the MOU. He has further stated that the transaction under this MOU is not completed because 11 In Survey Nos. 19[P], 20, 34[P], 35, 36 36[P], 40/2[P], 40/5A and 40/5[P] of Rayapura Village (sic) measuring 20 acres 05 guntas and 44 square yards [as described in the original Possession Certificate].
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 the requisite sale consideration mentioned in the MOU is not paid and the initial payment of Rs. 15,00,000/- is also returned back to M/s Modern India.
14.2 On the assignment of rights [by Modern India to M/s Sanjay] as asserted by M/s Sai Constructions, he has stated that this MOU is limited to pursuing with M/s KIADB for securing certain permissions as M/s Modern India had not secured complete rights as the total extent of 20 acres was not allotted by M/s KIADB. This Court must observe that Mr. Manjunath Bhat has taken caution to limit his answers only to the transactions between M/s Modern India and M/s Sanjay stating that he cannot speak about any transaction between M/s Sai Constructions and M/s Sanjay because he does not know about such transaction. He has refused to answer questions about 2006 MOU [Ex. P5] stating that this exhibit is a photocopy and therefore he cannot answer but
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 admitting that one of the terms of this document is that M/s B D Hegde Associates are authorized to oversee the process of transaction.
14.3 Mr. Manjunath Bhat has reiterated even in his cross-examination that M/s Modern India has assigned all its interest in the subject property in favour of M/s Sanjay under the 2010 MOU and that M/s Modern India cannot deal with the same. This witness is categorical that plot No. 20 in Block No. 43 was never allotted to M/s Modern India i.e., be it the year 1977 or any time thereafter and therefore M/s Modern India has got nothing to do with this property. Evidence of DW 2 [Mr. Mangilal Jain]
15. Mr. Mangilal Jain is the Managing Director of M/s Sanjay. In his examination-in-chief, he has essentially denied the execution of the Suit Agreement but admits that a cheque of Rs. 5,00,000/-
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 was given to him by M/s Sai Constructions when he was in financial need and Mr. Ravindra Revankar [PW1] was his good friend. He admits, apart from the loan of Rs.5,00,000/-, that he had availed a sum of Rs.10,00,000/- from Mr. Ravindra Revankar as hand loan, and as security, Mr. Ravindra Revankar had obtained his signatures on a few blank papers. He is also categorical that he has not entered into any loan transaction except for this sum of Rs.15,00,000/-.
15.1 Mr. Mangilal Jain has denied the existence of any relationship between M/s Sanjay and M/s Modern India as of the date of the purported Suit Agreement and therefore, he was neither in a position nor had any right to execute any agreement with respect of the subject property. He further states, even otherwise, that the property mentioned in Suit Agreement is entirely different from the property allotted to M/s Modern India by M/s KIADB and that the Sale
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Deed for the Plot No. 2 in Block No. 19[P] and 20 of Rayapura village of Dharwad Taluk] is only on 25.03.2014.
15.2 Mr. Mangilal Jain has initially denied 2006 MOU and the existence of any relationship with M/s Modern India prior to 2010 MOU while also denying suggestions about being involved in the real estate development activities along with Mrs. Lakshmidevi, Mr. Babulal and Mr. Prahalad. However, when questioned on the terms of the 2010 MOU, he has admitted that that 2006 MOU was entered into by him and the aforementioned three persons asserting such MOU did not materialize because Mr. Prahalad Kadam12 could not complete the tasks within the stipulated 3 months and the said agreement was cancelled by the company. He has denied the suggestion put to him that, 12 In his cross examination it also emerges that Mr. Prahalad Kadam has died, and he has denied the suggestion that the 2006 MOU is cancelled because of the death of Mr. Prahalad.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 in the month of August 2010, he contacted Mr. Ravindra Revankar [PW1] offering to sell the rights assigned by M/s Modern India.
15.3 There is elaborate cross-examination of this witness about Mr. Balakrishna Devaraya Hegde conducting the writ proceedings on behalf of M/s Modern India, the assurance to transfer 3 acres out of the total extent, the agreement insofar as the additional extent of 14 acres, the execution of the MOU dated 23.12.2010, but this Court must observe his evidence in this regard is not in any manner discordant with the defendants' case.
Evidence of DW 3 [Mr. Shridhar Patil]
16. Mr. Shridhar Patil [an advocate], who was a junior to Mr. Balakrishna Devaraya Hegde between the years 2010 to 2017, is examined as DW3. He has stated that five signed blank sheets and letter
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 heads are handed over by Mr. Mangilal Jain to Mr. Balakrishna Devaraya Hegde and when Mr. Ravindra Revankar visited the office in the year 2012 to collect 2 of such blank sheets he handed over the same on verifying with Mr. Balakrishna Devaraya Hegde over telephone.
16.1 In the cross- examination he is categorical that though he does not remember the exact date on which he has given such papers, but it could be given in the month of January 2012. Further, when questioned on the details about the day of the alleged hand over, he has stated in the following terms: when Mr. Ravindra Revankar came to the chambers between 7pm and 7:30 pm., and he conveyed the unavailability of his senior, but Mr. Ravindra Revankar insisted that he was there to collect certain documents and he could verify this with Senior on landline, and therefore, he has
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 called him on the landline and thereafter handed over 2 signed blank letter heads to him.
16.2 He has also stated that since Mr. Ravindra Revankar was their client and that a certain 'Jaavaka Register' [Outward Register] is maintained in Mr. Balakrishna Devaraya Hedge's office by a clerk. He has further that the handing over of the blank sheets to Mr. Ravindra Revankar is not entered in this register because it is handed over on the instructions of Mr. Balakrishna Devaraya Hegde.
The civil Court's reasoning:
17. The civil Court has answered against M/s Sai Constructions the Issues on whether it proves that M/s Modern India has entered into Suit Agreement and whether M/s Sanjay has proved that M/s Sai Constructions has misused the blank stamp paper signed to set up the Suit Agreement. The civil Court
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 has also answered against M/s Sai Constructions the additional issue on whether it proves that it is entitled to any relief as regards the subject property.
17.1 The civil Court has opined that it would be imperative for M/s Sai Constructions to show the existence of the Suit Agreement and the existence of the suit property, and that M/s Sai Constructions has failed to establish both these aspects. The civil Court's conclusion in this regard is because of its view that the Suit Agreement is not between those who are parties to the proceedings, that the subject property as mentioned in the Suit Agreement is different from the description in the plaint and that M/s Sai Constructions has not proved payment of consideration.
17.2 The civil Court, as regards the first aspect, has observed that the Suit Agreement is by 'Modern India Enterprises' but the first defendant is
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 'Modern India'; that though M/s Sai Constructions contends M/s Modern India is represented by M/s Sanjay in the Suit Agreement [executed on 05.11.2010], this firm is registered only on 15.11.2010; that no document is produced to establish M/s Sanjay was duly authorized to represent M/s Modern India or in what capacity M/s Sanjay has represented M/s Modern India for the Suit Agreement. The civil Court has also observed that the Suit Agreement is between 'Shri Sai Constructions' and 'Modern India Enterprises', but the plaint is by 'M/s. Sai Constructions' against M/s Modern India.
17.3 The civil Court, as regards the description of the subject property, on a conjoint reading of the description in the schedule of the plaint [as amended] and the description of the property in the Suit Agreement has opined that these properties are entirely different, distinct, separate and independent of
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 each other. Further, the civil Court has observed that M/s Sai Constructions is engaged in the business of real estate, but Sri Ravindra Revankar [PW 1] is evasive in his answers in the cross-examination on the description of the subject property as found in the plaint and the Suit Agreement. The civil Court has concluded that the surrounding circumstances establish that this agreement is created by M/s Sai Constructions/ its henchmen after M/s KIADB has executed the sale deed dated 25.03.2014 and when it had yet to obtain a copy of the sale deed.
17.4 The civil Court has further found that the Suit Agreement is not proved because of undisputed circumstances such as that the stamp paper on which the agreement is drawn is purchased for the purposes of a 'Bond', that the parties have not affixed their signatures on the first three pages of the agreement, Mr.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Ravindra G. Revankar [PW1] has signed as Managing Partner on behalf of all partners but without appropriate description in this regard in the first page of the agreement where the parties are mentioned, that Mr. Mangilal Jain has signed without mentioning that he is signing on behalf of the third respondent and therefore, it must be construed that he has signed in his personal capacity, that M/s Sai Constructions is not shown to be a Firm.
17.5 In fact, the civil Court, on a reading of the Suit Agreement, has opined that the M/s Sai Construction's case that there is an assurance to sell the subject property is contradictory because the expression assignment is used in one place [in page No.1] and in another place it is stated that the subject property will be sold upon receipt of the balance sale consideration.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 17.6 The civil Court, while considering the M/s Sai Construction's request for alternative remedy for refund of Rs.2,10,00,000/- allegedly paid as part of the consideration under the Suit Agreement and the subsequent Acknowledgments dated 27.12.2010 and 15.09.2012, has considered whether M/s Sai Constructions proves that such amount has indeed been paid in the light of the proposition that a contract, which is not backed by consideration, in view of the provisions of Section 25 of the Indian Contract Act,1872, is invalid.
17.7 The civil Court declared that payment as asserted is beyond M/s Sai Construction's financial ability referring to the ITR Returns of its partners and its assertion that a huge consideration is paid only by way of cash except for a sum of Rs.5,00,000/-. The civil Court has referred to the provisions of Section 269SS of the Income Tax Act, 1961, the fact that M/s Sai
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Constructions is not an assessee and the evidence of its witness [Mr. Ravindra Revankar - PW1] in cross- examination as regard PAN [which is extracted] to opine that M/s Sai Constructions has failed to establish that the loans have been availed to mobilize funds to pay the aforesaid consideration.
17.8 The civil Court's conclusions in this regard is with reference to M/s Sai Construction's specific case that the amount of Rs.1,35,00,000/- is paid to the date of the Suit Agreement, but PW 1 has stated this amount was paid on different occasions and that as of the date of the Suit Agreement, a total sum of Rs.1,35,00,000/- is paid and this contradictory evidence renders the M/s Sai Construction's case about payment of consideration entirely unbelievable.
17.9 Further, the civil Court has referred to the M/s Sai Construction's case that additional
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 consideration of Rs.25,00,000/- and Rs.50,00,000/- are paid under separate acknowledgements but to opine that the acknowledgements [according to M/s Sai Constructions signed by Mr. Mangilal Jain] cannot be believed because his signature for one of the acknowledgements is referred to a hand writing expert for analysis and the experts opinion is that the signature does not belong to the aforesaid and the evidentiary value of this report is not in any manner undermined by calling the expert for cross-examination though statement of objection is filed. The submissions on behalf of M/s Sai Constructions
18. Mr. A. P. Murari, the learned counsel for M/s Sai Constructions, has argued in support of the appeal and for a decree for specific performance contending that the impugned judgment and decree are notwithstanding the evidence on record. The learned
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 counsel submits that the civil Court could not have disbelieved the Suit Agreement either on the ground that M/s Sai Constructions has filed to prove that a particular property is agreed to be transferred in its favour under the Suit Agreement or the payment of Rs.2,10,00,000/- or the due execution of the Suit Agreement or that M/s Sanjay could have executed the Suit Agreement. The elaboration of his arguments in this regard is as follows.
18.1 M/s KIADB had issued Possession Certificate to allot 20 acres in Plot No.1 in Rayapura Industrial Area in different survey numbers of Rayapura Village, Dharwad Hobli and Taluk way back in the year 1977, but because of dispute by some of the owners, the acquisition is quashed. M/s KIADB has reinitiated the acquisition proceedings because of the liberty given, and ultimately, though M/s.KIADB was willing to offer plot measuring 20 acres, has allotted only 6 acres with the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 decision of the State Level Single Window Anency [SLSWA] under the Karnataka Industries [Facilitation] Act] leading to further dispute with M/s Modern India approaching this Court.
18.2 As of 13.10.2006, M/s Modern India was assured of only 6 acres in Rayapura Industrial Area without definite boundaries or identity otherwise, and as such, M/s Sanjay has entered into the 2006 MOU referring to 20 acres as was assured in the year 1977. This position has continued even as of the month of November 2010. During this period certain offers were made by M/s KIADB to transfer, apart from the 6 acres that was assured, the remaining extent of 14 acres. The locations of the 6 acres and the remaining extent of 14 acres were yet to be finalized and therefore, M/s Sanjay and M/s Modern India have entered into 2010 MOU tentatively describing the 20 acres of land with reference
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 to the details as available in terms of the 1977 allotment.
18.3 The reference to Plot No.20 in Block No.43 of Rayapura Village in the Suit Agreement is in this context and therefore, such description would not be fatal to the M/s Sai Construction's case. The plausible explanation is: M/s Sai Constructions, because it did not have the details of the conclusion of the agreement between M/s Modern India and M/s. KIADB, has filed the suit with a tentative description of the subject property, but with M/s KIADB executing Sale Deed dated 25.03.2014 and upon coming to know about the same, the plaint is suitably amended. .
18.4 The civil Court has disbelieved M/s Sai Construction's case that a sum of Rs.2,10,10,000/- is paid in cash as is mentioned in the Suit Agreement. The civil Court has failed to consider that the evidence
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 of M/s Sai Construction's witnesses in this regard is corroborated by material evidence such as the Gross Income of the partners of the plaintiff, the admitted receipt of Rs.5,00,000/- from M/s Sai Constructions and M/s Sanjay, which has represented M/s Modern India in the Suit Agreement and has later acquired undisputed interest to purchase the subject property under the 2010 MOU, has acknowledged the receipt of this amount under Ex.P11.
18.5 M/s Sai Construction's witness [Sri Ravindra Revankar - PW1], and as corroborated by the next witness [Sri Manjunath Shet - PW3], has categorically stated that the partners of the firm have pooled funds by selling their assets and raising loans and even the women folk in the family have raised funds by pledging jewelry. Sri Ravindra Revankar is also categorical that this amount of Rs.1,35,00,000/- [and the further amount of Rs.25,00,000/- and
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Rs.50,00,000/-] have been paid at different points of time from out of the sources as aforesaid. This testimony is consistent with the M/s Sai Construction's case that M/s Sanjay had approached M/s Modern India to ensure that the subject property is transferred for consideration as agreed because funds had to be mobilized to ensure that there is an amicable resolution with M/s KIADB for acquiring indisputable title to the subject property and therefore cash was required.
18.6 The civil Court has relied upon the provisions of Section 269SS of the I.T. Act, as canvassed on behalf of the defendants, to disbelieve M/s Sai Construction's case that Rs.2,10,00,000/- is paid by cash. The civil Court should have considered that M/s Modern India and the other defendants do not assert that the cash transaction is an illegal transaction and that M/s Sai Constructions is able to demonstrate, given the Gross Income of the family members, that the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 cash payment is accounted for. If any part of Rs.2,10,00,000/- is paid by cash in violation of the provisions of the I.T. Act, it would be for the authorities to act but the same cannot aid the defendants to deny their obligation to execute the sale deed for the subject property in performance of the Suit Agreement.
18.7 The civil Court has failed to consider the evidence of Mr. Balakrishna Devaraya Hegde [PW4] who admittedly has appeared for the first respondent in the dispute with M/s. KIADB which has resulted in the sale deed dated 25.03.2014. This defendant has deposed that he was consulted by M/s Sai Constructions because its partners were vexed by the risk involved and that he has explained to such representative that the risk if any was over M/s Modern India's claim for additional extent of 14 acres, but not to the subject property, and it is only after this opinion, the transaction is concluded.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 18.8 This Court, in the light of the afore evidence on record and the perspective that is offered, must not only opine that M/s Sai Constructions has proved the Suit Agreement but it has also proved its ready and willingness to perform the contract, especially in view of the undisputed evidence that M/s Sai Constructions is a partnership of family members who are engaged not only in real estate as a Firm but also in jewelry business under the name and style 'Sai Gold Palace' with the annual turnover of these members being more than Rs.70,00,000/- during the relevant financial years 2009-10 and 2010-11. The defendants, who have taken advantage of the amounts received, amongst others, to secure title to the subject property and defray expenses in these regards, have not even pleaded that there would be an unfair advantage if the M/s Sai Construction's suit for specific performance is granted.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 18.9 The civil Court has disbelieved the Suit Agreement opining that because this agreement is between 'Shri Sai Constructions' represented by five different individuals and M/s. Modern India Enterprises' and neither of these two entities are parties to the suit. However, the plaint is by M/s Sai Constructions against M/s Modern India, and these are the parties to the Suit Agreement.
18.10 The civil Court without considering the evidence in proper perspective could not have opined that the capacity in which M/s Sanjay has represented M/s Modern India Enterprises in the 2006 MOU is not established. The 2010 MOU admittedly is between M/s Modern India and M/s Sanjay, and this MOU refers to 2006 MOU specifically stating that M/s Sanjay has approached M/s Modern India to purchase 20 acres for a total consideration of Rs.1,41,00,000/-.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 M/s Sanjay has acquired rights to entire parcel of 20 acres under the 2006 MOU and therefore could have agreed to sell the subject property acting under such MOU The submissions on behalf of M/s Sanjay and M/s Modern India
19. Mr. Ganapathi M. Hegde and Mr. M. Arun Kumar, the learned senior counsels for M/s Sanjay and M/s Modern India, have argued against these grounds to contend that the civil Court is justified in its conclusions that M/s Sai Constructions has failed to prove the Suit Agreement is for the subject property, the payment of Rs.2,10,00,000/-, the due execution of the Suit Agreement and M/s Sanjay could have executed the Suit Agreement. The learned senior counsels canvass that the evidence on record demonstrates beyond all doubt that the Suit Agreement is fabricated and a false case of assurance to transfer
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 the subject property is set up, and the learned senior counsels' canvass in this regard are as follows.
19.1 If the initial proposal in the year 1977 was to allot 25 acres in certain Block numbers of Rayapura village and the Possession Certificate dated 28/31.05.1977 is issued for Plot No. 1 in Sy. Nos.19[P], 20, 34[P], 35, 36[P], 40/2[P], 40/5A and 40/5B[P], the decision is taken in the year 2002 to allot 20 acres in Sy. Nos.19[P], 20, 34[P], 35, 40, 21 and 22 of Rayapura village [Ex. P15]. Neither M/s Modern India nor M/s Sanjay, with these changes, could have entered into an agreement in the year 2010 to transfer 6 acres of land in Plot No.20 in Block No.43 of Rayapura village as no allotment is made in Block number 43. The fact that the Suit Agreement refers to Plot No.20 Block No.43 of Rayapura village demonstrates that this agreement, even if it is executed, it is for another land.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 19.2 M/s Sai Constructions has filed the present suit for specific performance, after withdrawing the earlier suit for permanent injunction in O.S. No.114/201413, referring to Plot No.2 in Block No.19[P] and 20 of Rayapura village, but the plaint is amended in the year 2021 [after the conclusion of the writ proceedings in W.P. No. 108575/2017] to describe the subject property as is mentioned in the sale deed dated 25.03.2014. It cannot be disputed that M/s Sai Constructions, which has commenced the suit for specific performance for a separate property, has mid- course tried to involve the extent of 6 acres, which is not the subject matter of Suit Agreement, in the present suit. As such, the civil Court has rightly opined that M/s Sai Constructions has failed to prove that the suit agreement relates to the subject property. 13 In this suit for permanent injunction the property is described as mentioned in the Possession Certificate dated 28/31.05.1977 without mentioning the Plot number
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 19.3 M/s Sai Constructions asserts that suit agreement is executed upon receipt of a total sum of Rs.2,10,00,000/- and therefore it is incumbent in law to show that such consideration is paid. If M/s Sai Constructions has failed to discharge this burden, the Suit Agreement would be rendered without consideration and therefore unenforceable. Additionally, M/s Sai Constructions' failure to demonstrate payment of Rs.2,10,00,000/- demonstrates that there is no agreement because the payment of this amount, even according to M/s Sai Constructions, is integral to the agreement. This Court must, as opined by the civil Court, conclude that the payment is not established because of the following.
[a] M/s Sai Construction's specific case is that the sum of Rs.1,35,00,000/- is paid on the date of the suit agreement i.e., 05.11.2010. A sum of Rs.5,00,000/- out
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 of this amount is paid by cheque and the remaining amount is paid by cash. This is obvious from specific pleading in the plaint and the evidence in chief examination of Sri Ravindra Revankar and Sri Manjunath Shet [PW1 and PW3], but in the cross-examination, Sri Ravindra Revankar submits that this amount of Rs.1,35,00,000/- was not paid on the date of the agreement but was paid over a period of time and as of that date the amount paid totaled to this sum.
[b] Sri Ravindra Revankar, though initially was reluctant and evasive, has finally admitted in this cross-examination that M/s Sai Constructions is not assessed to tax and that it has not obtained PAN. These undisputed facts
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 completely undermines M/s Sai Construction's case that a substantial sum of Rs.1,30,00,000/- was paid either on 05.11.2010 or any time prior thereto. It cannot be believed that such huge sums are mobilized without even being an Assessee.
[c] The assertion that funds have been mobilized by the family members by raising loans and pledging jewelry is essentially an answer of convenience which is not supported by any corroborating circumstances.
[d] M/s Sai Constructions contends that after the date of the Suit Agreement further advance amounts of Rs.25,00,000/- and Rs.50,00,000/- are paid and these are countersigned by Mr.
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NC: 2024:KHC-D:14329-DB
RFA No. 100308 of 2024
Mangilal Jain [DW2]. The purported
signature of this witness on the
acknowledgement of payment of
Rs.50,00,000/- is marked as Ex. P10[f] and this signature is referred to forensic analysis by the civil Court. The Forensic Report is categorical that this signature is not by this witness.
[e] M/s Sai Constructions has filed objections to the Forensic Report but has not made any request for summoning the expert to undermine his opinion. As such, it is shown that suit agreement is tampered.
[f] M/s Sai Constructions relies upon purported acknowledgment [Ex. P -11] commonly executed for the sale consideration received under the Suit
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Agreement and the purported agreement for the additional extent of 14 acres. This acknowledgment is not referred to in the communication dated 24.01.2014 [Ex. P7].
[g] If indeed the acknowledgment dated 14.11.2012 [Ex. P11] was executed acknowledging the receipt of Rs.50,00,000/-, it should have been
mentioned in the Communication dated 24.01.2014 [Ex.P7].
[h] It is undisputed that Mr. Shridhar Patil [DW3], was working as a colleague of Mr. Balakrishna Devaraya Hegde [PW4], and Mr. Shridhar Patil has categorically stated that Mr. Mangilal Jain had signed certain blank letterheads and handed over the same to PW4 and when Mr.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Ravindra Revankar came asking for such letterheads, he handed it over him after verifying with the senior [PW4]. This evidence is not undermined in any manner14.
19.4 M/s Sai Constructions has described itself as a registered partnership firm comprising of family members engaged in real estate development. It is undisputed that these very family members and other members of the family are engaged in jewelry business. The I.T. Returns of the family members have been admitted in cross-examination [Ex. D1-D7] these documents demonstrate that family members have filed returns as partners of 'Sai Gold' and 'Shri Sai Gold Palace'. It is possible that the family members, who have constituted different Firms under similar sounding 14 This Court must also observe that the original of this acknowledgment is not produced and according to the rival submissions that it is produced in the suit in O.S. No.156/2014 and is kept in safe custody
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 names, may also have constituted 'Shri Sai Constructions' as a distinct and separate entity from 'M/s Sai Constructions'. If the agreement is by 'Shri Sai Constructions', the plaint at the instance of M/s Sai Constructions will not be maintainable.
19.5 M/s Modern India has never been known as 'M/s Modern India Enterprises' and it has always been known as 'Modern India Limited' [after the initial days when it was known as Modern Mills Limited]. M/s Sai Constructions has not offered any explanation as to how an agreement with M/s Modern India Enterprises could be enforced against M/s Modern India. As such, the civil Court has rightly dismissed the suit on the ground that M/s Sai Constructions has failed to establish that the parties to the suit agreement are parties to the suit.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 19.6 Mr. Balakrishna Devaraya Hegde [PW4] has categorically admitted that the suit agreement is drawn under his guidance and because it is drawn by a legal counsel who has put in more than four decades of practice must stand a great scrutiny, but it does not pass such scrutiny because of the deficiencies such as [a] it is drawn on stamp paper purchased for the purposes of a Bond, [b] the reference to the transaction under 2006 MOU is as an assignment which is totally inconsistent with the terms of this Suit Agreement, [c] the subject property is described as Plot No.20 in Block No.43, [d] Mr. Mangilal Jain's signature on the last page of this document is not as a representative of M/s Sanjay and [e] the stamp paper on which the suit agreement is drawn is purchased on 25.10.2010 in the name of M/s. Sanjay Builders and the existence of this entity is not demonstrated.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 19.7 M/s Sai Constructions contends that M/s Modern India has agreed to transfer its interest in comprising of 20 acres in favour of M/s Sanjay under the 2006 MOU. M/s Modern India and M/s Sanjay do not dispute the 2006 MOU, but their specific case is that the 2006 MOU is an agreement under which one of the four persons [who together are the second parties to the contract] is authorized to liaison with M/s KIADB for securing title to the 20 acres initially allotted and that if the title thereto is obtained within a certain time line, they could enter into an agreement for joint venture. The 2006 MOU is therefore not an agreement creating any interest in praesenti and it is only an agreement to enter into an agreement and such contingent interest under such agreement cannot be assigned.
19.8 The performance under the 2006 MOU is a personal performance and therefore specific to the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 concerned person and cannot be assigned. The 2006 MOU is categorical in that the personal performance as aforesaid shall only be by Mr. Prahalad Kadam and not by the other three. Therefore, Mr. Mangilal Jain, who according to M/s Sai Constructions acting under this 2006 MOU has executed the Suit Agreement, could not have represented M/s Modern India. The assurance to enter into joint venture under 2006 MOU did not survive beyond the agreed period of four months because indisputably the title for the 20 acres, as is required under this MOU, is not obtained. M/s Sai Constructions also does not dispute that this MOU had expired inasmuch as M/s Sai Constructions contends that only because there could not be performance in terms of this MOU, the suit agreement is entered into. If the MOU had expired, no right subsisted in M/s Sanjay to execute the suit agreement.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 19.9 Mr. Ganapathi M. Hegde and Mr. M. Arun Kumar canvass that even if the suit agreement is believed, specific performance cannot be granted in law because of the following propositions.
[a] The Suit Agreement is tainted in its material aspect because the signature in the Endorsement - Ex.P10(f)- is demonstrated to be forged and as this Endorsement relates to payment of asserted consideration it goes to the very root of the agreement. This proposition is underscored by the decision of the Apex Court in Valiammal Rangarao Ramachar v. Muthukumaraswamy Gounder15.
[b] M/s Sai Constructions in seeking specific performance of the Suit Agreement relies 15 [1982] 3 SCC 508
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 upon 2006 MOU and therefore in effect seeks specific performance of this MOU which is only a contract to avail the personal skills of Mr. Prahalad Kadam, and a contract for personal skill cannot be enforced as underscored by the Apex Court in its decision in Kapilaben v. Ashok Kumar Jayantilal Sheth16.
[c] The 2006 MOU is only an agreement to enter into an agreement for joint venture if there was personal performance and the terms of the joint venture are not detailed. The MOU is therefore, 'an agreement to enter into an agreement' and hence enforceable as is laid down by the Apex Court in its decision in Speech and Software 16 [2020] 20 SCC 648
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Technologies [India] Pvt. Ltd. v. Neos Interactive Ltd17.
[d] M/s Sai Constructions has not asked for specific performance of 2006 MOU and therefore this Court cannot mould the relief under Order VII Rule 11 of CPC. The Apex Court in Bachhaj Nahar v. Nilima Mandal18, has exposited that it is fundamental that in a civil suit, relief can be granted only with the prayers made in the pleading and it would be hazardous to think that notwithstanding the relief prayed, the civil Courts can grant relief as it thinks fit. The question for consideration:
20. This Court must at the very outset observe that the primary controversy inter se M/s Sai
17 [2019] 1 SCC 475 18 (2008) 17 SCC 491
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Constructions and M/s Modern India and the other defendants is because the latter contend that M/s Sanjay has not, and could not have, executed the Suit Agreement in favour of the plaintiff. The next controversy is with the defendants contending that even if M/s Sanjay has executed, and could have executed the Suit Agreement, M/s Sai Constructions will not be entitled for specific performance. In this regard, the reliance is on the propositions such as that if an agreement is uncertain or executory in nature, specific performance cannot be granted and that if appropriate relief is not sought for, the courts cannot grant the relief that would be beyond the prayer.
20.1 The propositions that an agreement to enter into an agreement or that an agreement which is uncertain cannot be enforced are settled as is obvious from the decisions that are relied upon Mr. Ganapathi M. Hegde and Mr. M. Arun Kumar, and in fact, Mr. A P
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Murari for M/s Sai Constructions does not dispute any of these propositions. Consequentially, this Court will have to re-appreciate the evidence to examine the following question.
Whether this Court can conclude that M/s Sai Constructions has proved [i] the Suit Agreement is for the subject property, [ii] the payment of consideration of Rs.2,10,00,000/-, [iii] the due execution of the suit agreement, and [iv] M/s Sanjay could have executed, and has executed, the suit agreement, and whether the civil court's conclusions in these regards are contrary to the evidence on record.
Reasoning:
21. Is the Suit Agreement for the subject property: This Court, on reading of the Possession
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Certificate [Ex. P 16], the orders in the writ proceedings in Writ petition No. 20329/200419 [Ex. P 21] and Writ Appeal No.1948/200720 [Ex. P 22], the Communication dated 30.04.2002 [Ex P 15] from M/s. KIADB and its Note dated 22.02.2014 [Ex.P18], must opine that the following is established beyond dispute:
• The Possession Certificate dated 28/31.05.1977 is issued for 20 acres and 05 Guntas in Plot No. 1 in Sy.
No.19[P], 20, 34[P], 35, 36[P] , 40/2[P], 40/5A and 40/5B[P] of Rayapura Industrial Area in Rayapura village, Dharwad Hobli and Taluk. This Certificate has a definite set of boundaries for this extent of lands.
• On 30.04.2002, M/s. KIADB has informed M/s Modern India that it will 19 Disposed of on 28.08.2007 20 Disposed of on 16.12.2011.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 allot 20 acres in Block / Sy. Nos.19[P], 20, 34[P], 35, 40, 21 and 22 of Rayapura village indicating the enhanced amount that M/s Modern India must pay. There is substantial change in the location of this plot with the Block numbers changing with the extent being reduced by five Guntas, and crucially, the boundary for this extent is not indicated.
• The SLSWA in its meeting on 19.02.2004 has resolved to allot only 6 acres to M/s Modern India and the balance 14 acres to other applicants, and consequent to this decision, though M/s Modern India had paid the entire enhanced value for 20 acres, Allotment letter dated 07.05.2004 is issued
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 informing M/s Modern India that it would be allotted only 6 acres. This communication is not marked as an Exhibit by either side.
• The writ proceedings in W.P. No.20329/2004 filed calling in question this Allotment Letter dated 07.05.2004 has culminated in the order dated 16.12.2011 by a Division Bench in W.A. No.1948/2007. The Division Bench has recorded that M/s Modern India is in possession of 6 acres in Rayapura village and has directed that M/s.
KIADB to allot additional 14 acres in another industrial area.
21.1 It is obvious from these indisputable facts that the initial allotment and offer to allot 20 acres is in different set of Block numbers with certain
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 common numbers, but the proposal is not to allot any Plot in Block Number No.43. The 2006 MOU, which forms the pivot for the Suit Agreement, also does not refer to Block Number 43. The 2006 MOU refers to the Block numbers as are indicated in M/s KIADB's Communication dated 30.04.2002 [Ex. - P 15]. However, the Suit Agreement refers to Block Number
43. The Survey Numbers as mentioned in the Possession Certificate and this Communication are as follows:
As per Possession As per Communication Certificate dated 30.04.2002 In Survey Nos 19[P], 20, In Sy Nos. 19[P], 20, 34[P], 35 34[P], 35. 36[P]. 40/2[P], and 40. and in Survey Nos.
40/5A and 40/5B[P] of 21 and 22 of Rayapura Rayapura Village Village
The Possession Certificate refers to Plot No. 1, and the Communication dated 30.04.2002 and the 2006 MOU does not refer to any plot number, but the Suit Agreement mentions Plot No. 20 in Block No. 43. These
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 are substantial differences, and the next material on record must be examined to discern the property for which the Suit Agreement can relate to.
21.2 M/s Sai Constructions has filed suit for permanent injunction in OS No. 114/2014 relying upon the Suit Agreement, and in this plaint, M/s Sai Constructions has referred to the subject property as is mentioned in the Possession Certificate but without reference to the plot number. In the plaint in this suit, as initially presented, the property is described as Plot No.2 in Block No. 19 [P] and 20 of Rayapura village.
This Court must observe that this description will not be in accord with the description of the property in the Possession Certificate or M/s KIADB's Communication dated 30.04.2002 or the 2006 MOU as these documents refer either to to Plot No. 1 or none21. Further, this 21 This description [with the boundaries] is in consonance with the description in the sale deed dated 25.03.2014 executed
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 description will also not be in accord with the decription in Suit Agreement which refers to Plot No. 20 in Block No. 43.
21.3 The plaint is amended to make a specific reference to this sale deed and the description as is contained therein. As such, an effort is made to consolidate the M/s Sai Construction's case that it has agreed to purchase the 6 acres that is conveyed under the said sale deed. It is obvious from the above material that the plaintiff, which relies upon the 2006 MOU, has described the 6 acres with reference to the different Plot and Block numbers at different stages in the suits though the Suit Agreement refers to Plot No. 20 in Block No. 43, and this is emphasized when read in the following manner:
by M/s KIADB in favour of M/s Modern India and is with reference to the same
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Suit Agreement/ Description of the Property Proceedings OS No. 114/2014 Plot No. - NIL Block Nos. 19/2, 20, 34 [P],35,36 [P], 40/2 [P], 40/5/A and 40/5/B. OS No. 362/2019 Plot No. 2 Block No 19 [P] and 20 with certain boundaries.
Suit Agreement Plot No. 20 Block No. 43 with certain boundaries [different from what is mentioned above].
Mr. Ravindra Revankar [M/s Sai Construction's witness
- PW1], in his cross-examination is asked to respond to the allotment in Block No.43. The witness, while asserting that he has visited the subject property, has stated that the plot in Block No. 43 of Rayapura village is still available because only a portion of the land in this Block number is acquired for the benefit of the Railway Authorities.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 21.4 It is indeed canvassed that M/s Sai Constructions has entered into the Suit Agreement to purchase the 6 acres that was assured with the decision of the competent authority [SLSWA] and the subsequent communication from M/s KIADB in anticipation of the execution of title deed. However, this Court cannot opine that M/s Sai Constructions has agreed to purchase the 6 acres that is ultimately conveyed under the sale deed dated 25.03.2014, especially when the Suit Agreement refers to Plot No. 20 in Block No. 43 without any reference to the 2006 MOU and with the M/s Sai Construction's witness insisting that Plot No. 20 in Block No. 43 is still available. 21.5 M/s Sai Constructions, because it is insisting upon purchasing Plot No. 2 in Block No. 19 [P] and 20, should establish a definite agreement with regard to this property without any room for doubt.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Therefore, the question on whether M/s Sai Constructions has shown that the suit agreement is with regard to the subject property cannot be answered in the affirmative.
On the payment of consideration of Rs.2,10,00,000
22. M/s Sai Constructions has averred in the plaint that Rs.1,35,00,000/- is paid on the date of the Suit Agreement, and similar is the evidence by the Mr. Ravindra Revankar - PW1. M/s Sai Construction's next witness, Mr. Manjunath Shet - PW3, has also stated in his evidence that Rs.1,35,00,000/- is paid on the date of the Suit Agreement. M/s Sai Construction's witnesses have also stated Rs.1,30,00,000/- is paid by cash and Rs.5,00,000/- has been paid by cheque drawn in favour of Mr. Mangilal Jain. This Court must observe that, because M/s Sai Constructions asserts that the payment of Rs.1,30,00,000/- is by way of cash,
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 irrespective of the question whether such payment could be made by cash, M/s Sai Constructions must present a consistent case that will inspire confidence.
22.1 M/s Sai Constructions has caused notice dated 24.01.2014 [Ex.P7] to M/s Modern India before commencement of the suit [and in fact before commencement of the suit in O.S. No.114/2014]. In this Notice, M/s Sai Constructions while referring to the assurance to sell Plot No.20 in Block No.43, has referred to the Suit Agreement. As regards the payment of consideration, M/s Sai Constructions has categorically stated that a sum of Rs.1,35,00,000/- is paid on 05.11.2010 [the date of the Suit Agreement] further stating that a sum of Rs.25,00,000/- is paid on 27.12.2010.
22.2 However, Mr. Ravindra Revankar [PW1], contrary to the terms of the Notice dated
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 24.01.2014 [Ex.P7], the pleadings in the plaint and the evidence in chief examination, has stated that this amount of Rs.1,30,00,000/- was not paid on the date of the agreement but was paid on different dates prior to such date and as of the date of the agreement, a total sum of Rs.1,30,00,000/- is paid. This is a very substantial deviation that shakes the credibility of the M/s Sai Construction's case about cash payment of Rs.1,30,00,000/-.
22.3 This Court must observe that though it is contended that another sum of Rs.50,00,000/- is paid on 15.09.2012, there is no reference to this payment in the communication dated 24.01.2014 [Ex.P7] where only a sum of Rs.1,30,00,000/- and Rs.25,00,000/- are mentioned. As is argued by the learned senior counsels for the defendants this begs the question has M/s Sai Constructions paid the amounts as asserted. Interestingly both Mr. Ravindra Revankar
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 and Mr. Manjunath Shet have also referred to the usual practice of M/s Sai Constructions to obtain receipts whenever payments are made in cash. In fact, when it is suggested to Mr. Ravindra Revankar, that in terms of the usual practice, receipts must have been obtained while making the payments in cash towards Rs.1,30,00,000/- he says that receipts have been obtained but those receipts are not produced in this suit as they are produced in O.S. No.156/2014. If the first two circumstances create doubt, the fact that the receipts are not produced creates further doubt.
22.4 M/s Sai Constructions relies upon an Acknowledgement - Ex. P 10(f) - allegedly signed by Mr. Mangilal Jain [DW2] in the Suit Agreement to acknowledge receipt of sum of Rs.50,00,000/-. Mr. Mangilal Jain has disputed the signature, and this signature is referred to forensic examination for comparison with the admitted signatures in the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 pleadings and vakalaths filed in the present case. The forensic report is that the signature [Ex.P10(f)] does not compare with the admitted signature of Mr. Mangilal Jain. M/s Sai Constructions has filed objections to this report but has not persuaded further to summon the expert to vindicate its objections. This Court must refer to the settled proposition that Expert's opinion will be part of the record as evidence unless the probative value of the same is undermined with the expert being cross- examined, a proposition which is not disputed by Mr. A.P. Murari. These circumstances create doubt about payment of Rs.50,00,000/- and also payment of Rs.1,30,00,000/- or Rs.25,00,000/-.
22.5 Mr. Ravindra Revankar has also admitted that M/s Sai Constructions is not assessed to tax and it has not obtained PAN. If M/s Sai Constructions is engaged in the business of real estate and has paid cash in excess of Rs.2,00,00,000/-, the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 fact that it is not assessed to tax also gains importance in determining whether it could have paid such amount by way of cash. Further, M/s Sai Constructions relies upon Acknowledgment dated 14.11.2012 [Ex.P11] to contend that M/s Sanjay has acknowledged, through Mr. Mangilal Jain, the receipt of Rs.2,10,00,000/-. The original of this acknowledgment is not produced with M/s Sai Constructions contending that because it is a common acknowledgment, the original is filed in the suit in O.S. No.156/2014. M/s Modern India has examined a colleague of Mr. Balakrishna Devaraya Hegde [PW4] to bring on record that Mr. Mangilal Jain [as a partner of M/s Sanjay] had signed in blank certain letter heads and handed over to him and the colleague, Mr. Shridhar Patil [DW3], has handed over the same to Mr. Ravindra Revankar.
22.6 This Court is of the considered view that no observation need be made in the present case
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 on the controversy around Mr. Mangilal Jain signing blank letterheads and handing over the same to Mr. Balakrishna Devaraya Hegde and Mr. Ravindra Revankar collecting the same as that is an aspect that may be crucial in the suit in O.S. No.156/2014 and it would suffice for the purposes of the case to observe that the plaintiff, because of the circumstances discussed, has failed to establish the payment of either Rs.1,30,00,000/- or Rs.25,00,000/- or Rs.50,00,000/- as asserted.
On the due execution of the Suit Agreement
23. M/s Sai Constructions asserts that the suit agreement has been executed by Mr. Mangilal Jain [DW2] as partner of M/s Sanjay and representing M/s Modern India. This assertion is refuted denying the execution of the suit agreement and the authority in Mangilal Jain to execute the same. As regards the first,
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 it is contended that the M/s Sai Construction's specific case is that the suit agreement is drawn and executed under the guidance of Mr. Balakrishna Devaraya Hegde [PW4] who was represented in the writ proceedings with M/s. KIADB. It is contended that because the suit agreement is drawn under the guidance of the senior member of the bar who was acquainted with the due process for drawing up of a formal agreement, the suit agreement must withstand a higher scrutiny. This Court in the peculiarities of the case, is persuaded to conclude that indeed the Suit Agreement must stand a higher scrutiny to opine that its execution is beyond dispute.
23.1 The circumstances that are relied upon to show that Suit Agreement is fabricated are that the suit agreement is drawn on stamp paper purchased for the purposes of a Bond as against an agreement, the improper description of the parties to the document, the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 parties not signing on the first two pages of the document, Mr. Ravindra Revankar signing the agreement not as a partner of M/s. Sai Constructions but on behalf of all partners without specifying the firm and Mr. Mangilal Jain signing, not as a partner of M/s Sanjay or on behalf of M/s Modern India but only on his behalf. These circumstances are best described by the document itself, and the document which is only in four pages is as follows:
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 This Court must observe that each of the aforesaid circumstances is borne out from the above, and crucially, because it is indeed difficult to believe that when the agreement is drawn under the guidance of a senior member of the bar it could be replete with such errors.
23.2 This Court must also opine that these circumstances lend credence to the case that sheets signed in blank amongst known persons and close associates as part of the business practice are used to
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 fabricate an agreement. This Court while recording this opinion has considered these circumstances as also M/s Sai Construction's unproven case that a sum of Rs.2,05,00,000/- is paid by cash and that the Suit Agreement does not relate to the property for which the sale deed dated 25.03.2014 is executed as also the fact that there is alteration in this agreement with an endorsement being made under a forged signature of Mr. Mangilal Jain on 15.09.2012.
23.3 Mr. A. P. Murari contends that even if this Court were to opine that the acknowledgment dated 15.09.2012 is an interpolation only that acknowledgment could be disbelieved but the suit agreement otherwise cannot be disbelieved. The salient proposition is that a material alteration in the agreement renders the very agreement tenuous. This Court is of the considered view that interpolation of Mr.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 Mangilal Jain's signature as part of acknowledgment dated 15.09.2012 is a very material part of the contract inasmuch as M/s Sai Constructions contends that Mr. Mangilal Jain has received the monies and has signed the Suit Agreement with the assurance to ensure that the subject property is transferred, and if there is any doubt about his signature in any part of the agreement, it goes to the very core. Therefore, the contention by Mr. A. P. Murari in this regard cannot be accepted and this Court must opine that M/s Sai Constructions has not proved the due execution of the suit agreement. On M/s Sanjay executing the suit agreement
24. M/s Sai Constructions asserts that M/s Modern India and M/s Sanjay have entered into the 2006 MOU and the agreement inter se is for transfer the entire 20 acres of land allotted at the first instance by M/s. KIADB in favour M/s Sanjay with the right in M/s Sanjay to assign its rights to any third party, and
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 accordingly, M/s Sanjay, represented by one of its partners [Mr. Mangilal Jain] has executed the suit agreement. The focal point of this assertion is that M/s Sanjay represented by Mr. Mangilal has acquired assignable rights under the 2006 MOU.
24.1 The M/s Modern India and other defendants do not dispute the due execution of this MOU, but they contend that M/s Sanjay was not assured of the transfer of the 20 acres or any part thereof and in any event, Mr. Mangilal Jain is not vested with any authority to execute to hold out the assurance of transferring such property for a consideration. This defense is premised on terms as are contained in Clause 5 of 2006 MOU. The terms of the MOU in this regard are crucial and they are examined.
24.2 There are certain obligations on the second party to this MOU, and these include the
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 obligation to obtain permission from M/s KIADB for transfer of the land measuring 20 acres while securing fresh possession certificate with the further stipulation that the compliance with the afore terms must be within a period of three months. The agreement as regards the corresponding interest in the subject property with such permission and possession certificate being issued is in clause 5E which reads as under:
"That the party No.1 shall agree for a joint venture with party No.2 for complying with the conditions of KIADB, either by floating a sister concern on retaining a nominal share of in any such mode of functioning, if found expedient to do so."
This Court must opine that this assurance [even if construed in favour of M/s Sanjay] will not constitute an assurance to sell an extent of 6 acres and this undermines the M/s Sai Construction's case.
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 24.3 Further, the agreement also stipulates that the transaction with M/s. KIADB for permission and possession certificate as aforesaid shall be processed by Mr. Prahalad B. Kadam [who is described as a person from Flora Fountain, a real estate developer] under an authorization - cum - power of attorney by M/s Modern India. The two things that fall from this covenant are that if anybody could have represented M/s Modern India, it was Mr. Prahalad Kadam and not Mr. Mangilal Jain and that too only as a power of attorney / authorized person. However, neither authorization nor power of attorney executed under these terms is produced, and significantly Mr. Mangilal Jain is not specifically given any authority.
24.4 This Court while examining these circumstances has also examined favourably the defendants' contention that the 2006 MOU stood lapsed and that the 2010 MOU is a separate arrangement,
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NC: 2024:KHC-D:14329-DB RFA No. 100308 of 2024 which being post the Suit Agreement, cannot inure to the M/s Sai Construction's advantage. In view of this discussion, this Court must opine that M/s Sai Constructions has failed to establish that Mr. Mangilal could, as a partner of M/s Sanjay could have executed the Suit Agreement.
For the foregoing, the questions for consideration are answered in the negative and the appeal stands dismissed.
Sd/-
(B.M.SHYAM PRASAD) JUDGE Sd/-
(C.M.JOSHI) JUDGE RSH / CT: VH List No.: 1 Sl No.: 24