Karnataka High Court
R Srinivasa vs A Shankarappa on 12 March, 2025
Author: Ravi V Hosmani
Bench: Ravi V Hosmani
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF MARCH, 2025
BEFORE
THE HON'BLE MR. JUSTICE RAVI V. HOSMANI
REGULAR SECOND APPEAL NO. 980 OF 2013 (SP)
BETWEEN:
R. SRINIVASA,
AGED ABOUT 67 YEARS,
S/O LATE B. RAMAIAH,
R/OF UTHANUR VILLAGE AND POST,
DUGGASANDRA HOBLI,
MULBAGAL TALUK,
KOLAR DISTRICT - 563 131.
...APPELLANT
[BY SRI C.R. SUBRAMANYA, ADVOCATE (PH)]
AND:
1. A. SHANKARAPPA,
S/O LATE GANDHODI,
AGED ABOUT 52 YEARS,
TEACHER BY PROFESSION,
R/O THOTALAPALYA,
MULBAGAL TOWN,
KOLAR DISTRICT - 563 131.
2. S. RAJESH,
S/O A.S HANKARAPPA,
AGED ABOUT 26 YEARS,
R/O. THOTALAPALYA,
MULBAGAL TOWN,
KOLAR DISTRICT.
3. SMT. REENA JANARDHANAREDDY,
W/O P.S. JANARDHANAREDDY,
AGED ABOUT 33 YEARS,
R/O NO.99, DIAMOND WEST APARTMENT,
2
B.D.A. MAIN ROAD,
OPPOSITE KEMPORT,
NANJAREDDY COLONY,
KONENA AGRAHARA,
BANGLAORE - 560 017.
...RESPONDENTS
[BY SRI R.KRISHNA REDDY, ADVOCATE FOR R3 (PH);
R1 & R2 ARE SERVED]
THIS RSA FILED UNDER SECTION 100 OF CPC AGAINST THE
JUDGMENT DECREE DATED 16.04.2013 PASSED IN R.A.NO.125/2010
ON THE FILE OF PRINCIPAL DISTRICT AND SESSIONS JUDGE, KOLAR,
PARTLY ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGMENT
AND DECREE DATED 10.08.2010 PASSED IN OS.NO.304/2006 ON THE
FILE OF C/C III ADDITIONAL SENIOR CIVIL JUDGE, KOLAR.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 15.11.2024, THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:
CORAM: HON'BLE MR JUSTICE RAVI V HOSMANI
CAV JUDGMENT
Challenging judgment and decree dated 16.04.2013 passed by Principal District and Sessions Judge, Kolar, in R.A.no.125/2010, this appeal is filed.
2. Brief facts as stated are that appellant herein (plaintiff) filed O.S.no.304/2006 against respondents herein (defendants no.1 and 2 respectively), for specific performance of agreement of sale dated 02.02.2006 in respect of properties measuring 1 Acre 12 guntas, including 1 gunta phut kharab of dry land in Sy.no.280/1 of 3 Utnoor village, Dugasandra Hobli, Mulbagilu Taluk ('item no.1' for short) and 2 Acres 15½ guntas out of 4 Acres 31 guntas in Sy.no.64 of Halaganahalli Village, Dugasandra Hobli, Mulbagilu Taluk ('item no.2' for short), (referred together as 'suit properties' herein).
3. In plaint, it was stated, defendants no.1 and 2 had executed agreement of sale on 02.02.2006 agreeing to sell suit properties for total sale consideration of Rs.1,90,000/-, after receiving Rs.50,000/- as advance sale consideration and agreeing to execute sale deed by receiving balance amount. And since item no.1 was in name 1st defendant's father, he had to get his name mutated in records. And on 14.03.2006, vide M.R.no.8/2005-06, defendant no.1 got his name mutated in respect of item no.1. Thereafter, plaintiff demanded defendants no.1 and 2 to execute registered sale deed by receiving balance sale consideration. But, defendants kept postponing it. Hence, on 06.07.2006, plaintiff got issued legal notice dated 06.07.2006 calling upon defendants no.1 and 2 to execute sale deed. They failed to respond. Plaintiff came to know that they had fraudulently sold suit properties to 4 defendant no.3, even though plaintiff was ready and willing to perform his part of contract. Therefore, sale was not binding on him. Hence, he filed suit.
4. On appearance, defendant no.1 filed written statement generally denying plaintiff's assertions about agreement of sale dated 02.02.2006 in toto and specifically alleging that such agreement was created. It was specifically pleaded that suit property was sold in favour of defendant no.3 on 04.06.2006 as they needed money for marriage of defendant no.1, which was performed on 07.08.2006. It was asserted that plaintiff was fully aware of facts and filed suit for harassing him. Defendant no.2 filed a memo adopting written statement of defendant no.1.
5. Subsequent to impleading, defendant no.3 filed separate written statement, stating that defendant no.1 along with his wife Varalakshmi and children, S.Anitha, S.Radhika, S.Shilpashree and S.Rajesh were owners in possession of suit properties. And defendant no.3 was bonafide purchaser in possession from date of purchase i.e. 05.06.2006. It was stated, though plaintiff and defendants no.1 and 2 were residents of Uthanoor village, in cause 5 title, plaintiff had deliberately given wrong address of defendants no.1 and 2. It was further stated plaintiff being aware of sale by defendants no.1 and 2 to defendant no.3, had created sale agreement dated 02.02.2006 with intention to defraud defendant no.3. It was stated defendant no.1 had not disclosed about earlier transaction. Therefore, same does not bind defendant no.3.
6. It was also stated that after purchase, defendant no.3 had approached revenue officials and got his name mutated in revenue records without objection from plaintiff. It was stated, defendant no.3 had invested Rs.2 Lakhs for drilling bore-well, fixing pump-set and planted teak and other valuable trees and also constructed a guest house by spending Rs.75,000/- each, apart from Rs.1 Lakh towards wire fencing with stone pillars along boundaries of suit properties. He had also spent Rs.25,000/- for making land fertile and appointed watchman to look after suit properties. Thus, defendant no.3 had spent in all Rs.5 Lakhs towards improvements. Further, suit properties were earlier mortgaged with PCARD Bank, Mulbagilu, which was got discharged by defendant no.3. Therefore, defendant no.3 was bonafide 6 purchaser and suit was filed with intention to grab suit properties, was liable to be dismissed.
7. Based on above pleadings, trial Court framed following issues:
1. Whether the plaintiff proves that on 02.02.2006 he had made agreement for sale with defendant no.1 and 2 for purchase of suit schedule property for Rs.1,90,000/- and on the same day he had given Rs.50,000/- after execution of agreement for sale?
2) Whether the plaintiff proves that he was and he is ready and willing to perform his part of contract by paying remaining amount of Rs.1,50,000/-?
3) Whether the defendant no.3 proves that he is bonafide purchaser of suit schedule property for valuable consideration without having knowledge of sale transaction between plaintiff and defendant no.1?
4) Whether plaintiff is entitled for the relief claimed?
5) What decree or order?
ADDITIONAL ISSUE FRAMED ON 5-8-2009
1) Whether the plaintiff proves that sale deed dt:5-6- 2006 executed by the defendants 1 and 2 in the name of defendant No.3 is null and void and not binds him?
8. In support of his case, plaintiff examined himself and four others as PWs.1 to 5 and got marked Exhibits P.1 to P.10. On 7 other hand, defendants no.1 and 3 examined themselves and two others as DWs.1 to 4 and got marked Exhibits D.1 to D.26.
9. However, trial Court answered issues no.1, 2, 4 and additional issue no.1 in affirmative, issue no.3 as not arising for consideration and issue no.5 by decreeing suit, directing defendants no.1 and 2 and their family members to execute registered sale deed in favour of plaintiff, within 90 days etc.
10. Aggrieved, defendant no.3 filed R.A.no.125/2010 on various grounds and also filed I.A.no.2 under Order XLI Rule 27 read with Section 151 of CPC for production of additional evidence. Based on same, first appellate Court framed following points:
1. Whether the finding of the trial Court that the plaintiff has proved that on 02.02.2006 defendant nos.1 and 2 executed an agreement to sell the suit schedule property for a consideration amount of Rs.1,90,000/- and on the same day, they received Rs.50,000/-is illegal?
2. Whether the finding of the trial court that the plaintiff has proved that he was ready and willing to perform his part of the contract by paying remaining amount of Rs.1,40,000/- is illegal?
3. Whether the finding of the trial court that in view of Section 79 (A) of Karnataka Land Reforms Act, the sale deed in favour of defendant no.3 executed by 8 defendant Nos. 1 and 2 and their family members is not valid in the eye of law, is illegal?
4. Whether the judgment of the trial court without giving finding on issue no.3 as to whether defendant no.3 is or is not a bona fide purchaser of the suit schedule properties for valuable consideration without notice, is illegal?
5. Whether the judgment of the trial court granting specific performance of contract in favour of plaintiff is illegal?
6. Whether the defendant no.3 is entitled for producing documents as additional evidence?
7. What order?
11. On consideration, first appellate Court answered points no.1, 2 and 6 in negative, points no.3 to 5 in affirmative and point no.7 by dismissing I.A.no.2, allowed appeal and set-aside judgment and decree passed by trial Court and holding plaintiff entitled for refund of Rs.50,000/- with interest at rate of 12% p.a. from date of agreement till payment by defendants no.1 and 2. Aggrieved, plaintiff was in appeal.
12. Sri CR Subramanya, learned counsel for plaintiff submitted, plaintiff had filed suit for specific performance of Ex.P.1
- agreement of sale executed by defendants no.1 and 2 on 02.02.2006 in respect of suit properties, by acknowledging receipt 9 of Rs.50,000/- as advance sale consideration and agreeing to receive remaining amount at time of execution of registered sale deed. It was submitted, time was not essence of contract as sale deed was agreed to be executed after mutation of revenue records in name of defendant no.1. Moreover, defendants no.1 and 2 had not replied to Ex.P2 - legal notice and defendant no.2 had not filed separate written statement, but adopted written statement of defendant no.1.
13. It was submitted, though trial Court failed to answer issue no.3, it rightly decreed suit after due appreciation of material on record, especially as PWs.3 and 4 identified signatures of defendant no.1 on Ex.P1 and held plaintiff was ready and willing to perform his part of contract. But, as DW.2 (defendant no.3) admitted that other than suit property, he had no agricultural property, trial Court inferred purchase of suit property was in violation of Section 79 of Karnataka Land Reforms Act ('KLR Act' fr short) and decreed suit.
14. It was contended, when no finding was recorded on issue no.3, first appellate Court ought to have remanded matter, instead 10 of setting aside trial Court decree, ignoring above admissions by defendant no.3. It was submitted though witnesses admitted execution of Ex.P.1, merely on ground of denial by defendant no.1 about execution of Ex.P1 and sale deed in favour of defendant no.3, it held defendant no.3 was a bonafide purchaser.
15. It also erred in denying specific performance merely on ground that daughters of defendant no.1 had joined in execution of sale deed in favour of defendant no.3, but they had not joined insofar as Ex.P1. It erroneously examined validity of transactions as violation of provisions of KLR Act, had to be examined by revenue authorities and not by Civil Court. In support of submissions, learned counsel relied on decision of Hon'ble Supreme Court in Sughar Singh v. Hari Singh (Dead by LRs.) & Ors. reported in AIR 2021 SC 5581 and decision of this Court in M. Narayanaswamy v. S. Narasimhappa, reported in HCR 2018 Kant. 328. On above grounds sought for allowing appeal.
16. On other hand, Sri R. Krishna Reddy, learned counsel for defendant no.3 opposed appeal. It was submitted defendants no.1 and 2 had executed Exs.D1 and 2 - registered sale deed in favour 11 of defendant no.3 and he was bonafide purchaser. Thereafter, he had spent lakhs of rupees for development and was in possession. Though, trail Court erroneously decreed suit on ground of violation of Section 79 of KLR Act, appellate Court rightly held violation, if any, was to be dealt by revenue authorities and not Civil Court. And on examination of Ex.P1, first appellate Court noted it to be unregistered and as such held agreement was not proved. It noted Ex.P.1 was executed only by defendants no.1 and 2, while Exs.D1 and D.2 were by all family members. On above grounds, sought dismissal of appeal.
17. Heard learned counsel, perused impugned judgment and decree and records.
18. This appeal is by plaintiff against divergent findings in suit for specific performance of agreement of sale. And appeal was admitted on 06.02.2019 on following substantial questions of law:
(i) Whether learned District Judge was justified in dismissing suit for specific performance having come to conclusion that plaintiff has proved issues no.1 and 2?
(ii) Whether learned District Judge was justified in not remanding suit to trial Court having observed that trial Court has not given finding on issue no.3?12
(iii) Whether learned District Judge was justified in ratifying an act committed by third defendant against Section 79 (A) of Karnataka Land Reforms Act, 1961?
19. Plaintiff's suit for specific performance of Ex.P1 - agreement of sale is based on assertion that defendants no.1 and 2 being owners of suit property had agreed to sell suit property to plaintiff under agreement of sale dated 02.02.2006 for total sale consideration of Rs.1,90,000/-, after receiving Rs.50,000/- as advance and agreeing to execute sale deed by receiving balance sale consideration, before or at time of execution of sale deed. And further assertion about stipulation requiring defendant no.1 to get his name mutated in revenue records before execution of sale deed. Plaintiff further asserted that defendant no.1 got his name mutated on 14.03.2006 and demanded execution of sale deed by receiving balance amount. It was further stated that there was non-compliance of said demand as well as failure to respond to Ex.P.2 - legal notice, giving rise to cause of action for filing of suit.
20. On appearance, defendants specifically contended that Ex.P1 - agreement of sale was created and generally denied entire 13 plaint averments. They also opposed suit on ground that suit property was sold to defendant no.3 even to knowledge of plaintiff and filing of present suit was with intention to harass defendants.
21. During trial, plaintiff examined as PW.1 deposed in terms of plaint averments, got marked agreement of sale dated 02.02.2006 as Ex.P.1, legal notice dated 06.07.2006 as Ex.P.2, postal receipts/acknowledgements and UCP receipt as Exs.P.3 to P6, certified copies of sale deeds dated 05.06.2006 as Ex.P.7, Written statement of defendant no.1 as Ex.P8 and photocopy of written statement as Ex.P9. Though, cross-examined, there were no material elicitations.
22. Plaintiff also examined witnesses to Ex.P.1 as PWs.2 to 5, who consistently deposed in terms of plaint, identified signatures of defendants no.1 and 2 on Ex.P.1 and supported plaintiff. Despite cross-examination, nothing material was elicited from them.
23. In rebuttal, defendant no.1 was examined as DW.1 and defendant no.3 as DW.2. In his examination-in-chief, on one hand, DW.1 denied execution of agreement of sale, but in para no.4 of 14 his affidavit examination-in-chief, he stated when plaintiff refused to pay money on demand by defendant no.1 for his daughter's marriage and as suggested by plaintiff, suit property was sold to defendant no.3. In cross-examination, after initially denying above statement, DW.1 admits it on being confronted.
24. Defendant no.3, examined as DW.2 deposed in terms of written statement. In cross-examination, it is elicited that she was resident of Bengaluru, her husband was a businessman and at time of purchase of suit property, she did not have any other agricultural land, she was not an agriculturist and had not obtained any permission from Government for purchase.
25. DW.3 is an electrical contractor, who deposed that he had assisted him in getting electricity connection for bore-well sunk by defendant no.3 in suit property. DW.4 is a coolie employed as watchman for suit property by defendant no.3. Both DWs 3 and 4 stated that suit property was in possession of defendant no.3 from date of purchase and she had developed it. Copies of sale deeds dated 05.06.2006, nil encumbrance certificates, record of rights, Patta book, survey sketch, bank certificate, photos, money paid 15 receipts, electricity connection to bore-well and electrical equipment purchase bills were marked as Exs.D1 to D26.
26. While passing impugned judgment and decree, trial Court referred to deposition of plaintiff as PW1 in terms of plaint. It also referred to deposition of attesting witnesses - PWs.2 to 5. It observed PWs 2, 3 and 5 identified their signatures on Ex.P.1, PW.4 identified signatures of plaintiff and defendant no.1 on Ex.P.1. Based on said observation, it held Ex.P.1 as proved.
27. Thereafter, referring to deposition of DW.2 wherein, she admitted about not having any other agricultural land, not being an agriculturist and not obtained permission from government for purchase of suit property and referring to Section 79 of KLR Act, held sale in favour of defendant no.3 as illegal, null and void. Based on said findings, it decreed suit.
28. In appeal, first appellate Court held finding of trial Court about sale deed in favour of defendant no.3 being invalid under Section 79 of KLR Act, was illegal. It also held, trial Court erred in not giving specific finding on issue no.3.
16
29. During re-appreciation, it referred to respective pleadings of parties as well as depositions. It observed PW.1 deposed in terms of plaint and identified his signature as well as those of defendants no.1 and 2. And PWs 2 and 3 - attesting witnesses and PW4 - scribe supported plaintiff's deposition.
30. It also referred to deposition of defendant no.1, wherein he totally denied execution of Ex.P.1. But, it observed such denial was contrary to admission in para no.4 of written statement, wherein there was clear reference to agreement of sale. Since, defendant no.2 adopted written statement of defendant no.1, there was admission of Ex.P1 by both of them.
31. It also noted similar contradictory stand. It observed that in paras no.2 to 4 of his affidavit - examination-in-chief, DW1 clearly stated about approaching plaintiff to receive sale consideration for performing his daughter's marriage, refusal by plaintiff amounting to plaintiff not being ready and willing to perform his part of contract and alienation in favour of defendant no.3 being in pursuance of plaintiff's suggestion, amounted to clear 17 admission about execution of Ex.P.1-agreement of sale. Therefore, it confirmed trial Court finding about due execution of Ex.P1.
32. Insofar as readiness and willingness, it observed that there was no cross-examination of PW.1 on this aspect. It observed in Ex.P2 - legal notice, plaintiff had specifically stated about his readiness and willingness to perform his part of contract. Taking note of conduct of defendant no.1 taking contradictory stand in pleading as well as deposition, and also fact that IA no.2 was filed by plaintiff to deposit balance amount, it held plaintiff was ready and willing to perform his part of contract.
33. Insofar as finding of trial Court about sale in favour of defendant no.3 being in violation of Section 79 of KLR Act, it observed, Section 83 of said Act specifically empowered prescribed authority to decide contravention; while Section 132 barred jurisdiction of Civil Court. Thus trial Court was divested of jurisdiction to decide violation. Moreover, this Court in Tamil Chelvan v. State of Karnataka and others (in W.P.no.38276/2013 and connected cases disposed of on 25.01.2016) took note of amendment to Section 79-A and 79-B of 18 Karnataka Land Reforms Act, 1961 vide notification dated 13th July, 2020, Karnataka Land Reforms (Amendment) Ordinance, 2020, omitting Sections 79 A and B, retrospectively, and consequently held all pending proceedings automatically abated. Even on said ground, finding of trial Court about sale in favour of defendant no.3 violating Section 79 of KLR Act would be contrary to law.
34. While deciding whether defendant no.3 was a bonafide purchaser and whether trial Court was justified in granting relief of specific performance in favour of plaintiff, it referred to decision of Hon'ble Supreme Court in case of Balkrishna and Another v. Bhagawan Das (D) by LRs and Others reported in AIR 2008 SC 1786 and Division Bench decision of this Court in S.Kugashankar v. Subhash Chand Goyal and Others, reported in ILR 2006 Kar. 3689 that specific relief may not be granted if defendant would be put to undue hardship, which he did not foresee at time of agreement. It thereafter, noted there was sufficient material to indicate that suit properties were ancestral properties of defendant no.1 and his children, some of whom were 19 not signatories to Ex.P.1, but had signed Exs.D.1 and 2 - sale deeds in favour of defendant no.3. It also took note of specific evidence led by defendant no.3 about improvements made to demised land and grant of specific performance was likely to lead to multiplicity of proceedings. On said reasoning, it answered points no.4 and 5 in affirmative.
35. Thus main reason for first appellate Court to reverse trial Court decree despite holding Ex.P.1 - agreement of sale as duly proved is its conclusion that suit property was ancestral joint family property and all family members would have share in it. Thus, Ex.P.1 executed only by defendants no.1 and 2 (without consent of other family members); whereas Exs.D1 and D2 - sale deeds were executed by all family members in favour of defendant no.3, it held Ex.P1 was invalid. Consequently, it modified decree by holding plaintiff was entitled for refund of Rs.50,000/- with interest at 12% per annum from date of agreement of sale till payment, from defendants no.1 and 2.
36. Thus, finding about due execution of Ex.P.1 - agreement of sale by defendants no.1 and 2 in favour of plaintiff, as well as 20 about plaintiff being ready and willing to perform his part of contract, is concurrent. While, defendants are not aggrieved by modification of decree, same is challenged only by plaintiff relying on ratio in Sughar Singh and M. Narayanaswamy (supra).
37. In Sughar Singh (supra), Hon'ble Supreme Court, while interpreting Section 20 of Specific Relief Act, 1963 ('SRA' for short) as amended by Act no.18 of 2018 held, once agreement was found to be duly executed and plaintiff ready and willing to perform his part of agreement, grant of relief of specific performance cannot be denied. It also held, though amendment of Section 20 by amendment of year 2018, was not retrospective, position of law declared by it would act as guide for period prior to amendment.
38. In M. Narayanaswamy (supra), this Court held, where defendant was an agriculturist dependant on suit property for his livelihood, unless claim was rebutted by plaintiff, denial of specific performance of agreement of sale and ordering for refund of advance amount with interest would be justified, in view of Section 20 (2) (b) of SRA. Indeed, plea of hardship is not specifically set- up by defendants herein calling for adjudication. And even if 21 daughters of defendant no.1 may have share in suit property, suit for specific performance could be enforced against defendants no.1 and 2. But , it is also seen that plaintiffs did not file any application under Section 12 (3) of SRA.
39. Hon'ble Supreme Court in Janardhan Das and Ors. v. Durga Prasad Agarwalla and Ors. reported in 2024 SCC OnLine SC 2937, held, where agreement of sale was not executed by or on behalf of all co-owners, direction for refund of lump-sum amount (inclusive of interest) to plaintiff instead of decree for specific performance was justified.
40. Hence, substantial questions of law no.1 and 2 are answered in affirmative; while third is answered in negative. Consequently, following:
ORDER Appeal is dismissed. However, taking note of fact that appellant had paid Rs.50,000/- in year 2006 and 18 years have lapsed and also fact that defendants have not deposited decreetal amount, following exemplar in Janardan Das (supra), it would 22 appear appropriate in interest of justice to direct defendants no.1 and 2 to pay sum of Rs.2,50,000/- instead of Rs.50,000/- with interest at rate at 12% p.a. which shall be deposited by them before trial Court within two months from date of this order.
Sd/-
(RAVI V. HOSMANI) JUDGE Psg*/GRD