Karnataka High Court
Sri. K Brahaam S/O Late K Bichhali vs Sri. Makka Reddy S/O Kesava Reddy on 16 August, 2023
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NC: 2023:KHC-D:9089
RFA.CROB No. 100002 of 2023
IN THE HIGH COURT OF KARNATAKA, DHARWAD
BENCH
DATED THIS THE 16TH DAY OF AUGUST, 2023
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
RFA CROSS OBJ NO. 100002 OF 2023 (SP-)
BETWEEN:
1. SRI. K.BRAHMAM
S/O LATE K BICHHALI
AGE: 57 YEARS, OCC: AGRICULTURE,
R/O: DEVINAGAR CAMP, TEKKELAKOTA,
TQ: SIRUGUPPA, DIST: BALLARI.
2. SMT. K.POLERAMMA
W/O K BRAHMAM
AGE: 47 YEARS, OCC: AGRICULTURE,
-REST DO-
3. SRI SRINIVAS
Digitally
signed by
S/O K BRAHMAM
GIRIJA A
GIRIJA A BYAHATTI
BYAHATTI Date:
AGE: 28 YEARS, OCC: AGRICULTURE,
2023.08.29
11:12:44
+0530
-REST DO-
4. KUM. SOUJANYA
D/O K BRAHMAM
AGE: 25 YEARS, OCC: AGRICULTURE,
-REST DO-
...CROSS OBJECTORS
(BY SRI. A.S.PATIL, ADVOCATE)
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NC: 2023:KHC-D:9089
RFA.CROB No. 100002 of 2023
AND:
1. SRI. S.MARKA REDDY
S/O KESAVA REDDY
AGE: 67 YEARS, OCC: AGRICULTURE,
R/O: D.NO.153/1C, WARD NO.18,
PATEL NAGAR, TQ AND DIST: BALLARI.
2. SMT. D.JAYA SUDHA
W/O D SHIVARAM RAO,
R/O: PLOT NO.35, GOLLA NARASAPPA COLONY,
SATYANARAYANPET, BALLARI,
TQ AND DIST: BALLARI.
...RESPONDENTS
(BY SRI. GIRISH BHAT, ADVOCATE FOR R1;
SRI. T.M.NADAF, ADVOCATE FOR R2)
THIS RFA.CROB IS FILED U/O.41 RULE 22 (1) OF
CIVIL PROCEDURE CODE R/W SECTION 151 OF CPC,
PRAYS TO ALLOW THE CROSS APPEAL FILED BY THE
CROSS OBJECTORS BY SETTING ASIDE THE IMUGNED
JUDGMENT AND DECREE PASSED IN 72/2011 BY THE
HON'BLE I ADDL. SENIOR CIVIL JUDGE AT BALLARI, IN
THE INTEREST OF JUSTICE AND EQUITY.
THIS RFA CROB., COMING ON FOR FURTHER
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
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NC: 2023:KHC-D:9089
RFA.CROB No. 100002 of 2023
JUDGMENT
This appeal is arising from the judgment and decree in OS no.24/2008 on the file of the I Additional Senior Civil Judge, Bellary. The suit is filed to enforce the registered agreement for sale dated 11.07.2007. The plaintiff claims that the agreement for sale is executed for a consideration of Rs.4,00,000/- and defendant No.1 agreed to sell the properties bearing Survey no.31 measuring 6 acres 21 cents in Sirigeri village, taluk Siruguppa, district Bellary and survey no.32B measuring 4 acres 82 cents. The plaintiff claims that he has paid Rs.3,70,000/- towards advance sale consideration amount. The agreement also reveals that the sale deed is to be executed on 10.07.2010, after receipt of the balance consideration amount of Rs.30,000/-. The plaintiff without waiting for stipulated date of 10.07.2010, filed the suit on the premise that the defendant vendor tried to alienate the properties on the basis of a concocted agreement dated 08.01.2007.
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023
2. The defendants disputed the execution of agreement for sale. Defendant No.1 has taken a stand that he never agreed to sell the properties to the plaintiff, and he never received the sale consideration amount. It is alleged that agreement dated 11.07.2017 is outcome of fraud and undue influence.
3. In addition, the defendant No.1 has also taken a stand that the suit properties are the only properties on which he and his family are depending for livelihood. It is also pleaded that the defendant No.1 alone is not the owner the properties belong to him and his wife and children.
4. It is also relevant to note that one more suit was filed in OS no.388/2007, is filed for the same properties specific performance of contract by the holder of an agreement for sale dated 08.01.2007 alleged to have been executed by defendant No.1 and his wife and children. Both the suits were clubbed together and common evidence was recorded. The trial Court in terms -5- NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 of the judgment and decree dated 30.06.2011 has dismissed OS no.388/2007 and granted a decree for specific performance in OS No.24/2008.
5. Plaintiff in OS no.388/2008, filed RFA no.3114/2011. One of the defendants, in O.S. No. 24/2008 namely, the agreement holder of the agreement dated 08.01.2007 filed in RA no.72/2011 before the II Additional District and Judge, Bellary, challenging the decree in OS No.24/2008. R.A. 72/2011, is transferred to this Court and renumbered as RFA no.100181/2015.
6. It is also relevant to note that the cross objection was filed in RA no.72/2011 by defendants No.1 to 4 in OS no.24/2008. The cross appeal is transferred to this Court and renumbered as RFA Crob.no.100002/2023. All the two appeals and cross objection were heard together and later order dated 19.04.2023, this Court has disposed of RFA no.3114/2011 and RFA no.100181/2015 and hearing in RFA Crob.no.100002/2023 was deferred. In terms of the judgment and decree dated 19.04.2023, this -6- NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 Court has allowed the appeal filed by the agreement holder of the alleged agreement dated 08.01.2007 in part and granted decree for refund of Rs.10,00,000/- as defendants No.1 to 4 in OS no.388/2007 admitted receipt of earnest amount. Since the plaintiff in OS 388/2007 did not press for a decree for specific performance made a statement that he would be content with the decree for refund of the earnest amount, RFA no.100181/2015 was dismissed as it did not survive for consideration. The decree refund of earnest amount is granted. Thereafter, this cross objection was referred for mediation to explore the possibility of settlement. The mediation failed and the matter is again placed before this Court for consideration on merits.
7. Sri A.S. Patil, the learned counsel for the appellant would submit that the alleged agreement for sale dated 11.07.2007 is not an agreement for sale and it was outcome of fraud and misrepresentation. Merely, because the agreement is registered, the trial Court could not have -7- NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 held that the agreement is proved. He would also further submit that the contradictions in the evidence of DW4 and DW5 relating to the date of payment of consideration amount are completely overlooked by the trial Court and merely, because the document is registered, the trial Court could not have ignored the contradictions in the evidence which would nullify the alleged agreement for sale which is registered on 12.07.2007.
8. He would also submit by way of an alternative submission that the defendants No.1 to 4 have taken a stand that the properties belong to the defendants No.1 to 4 and defendant No.1 is not the absolute owner of the properties. Thus the decree for specific performance could not have been granted against all the defendants who are not parties to the alleged agreement of sale dated 08.01.2007. It is also his contention that the entire family of defendants No.1 to 4 is solely is depending on the income of the aforementioned properties and if the decree for specific performance is upheld, defendants No.1 to 4 -8- NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 would be left with no properties and the question of comparative hardship pleaded by the defendants No.1 to 4 is not considered by the trial Court in proper perspective. Thus in the alternative, he would urge that at the most the plaintiff is entitled to refund of the earnest amount of Rs.3,70,000/-.
9. In support of his contention, he would also invite the attention of the Court to the evidence of the plaintiff. He would further state that the plaintiff has admitted in the cross examination that the value of the plaintiff's land which is adjoining the suit properties is around Rs.50,000/- to Rs.60,000 per acre. It is also admitted by the plaintiff that the plaintiff's land is not irrigated, and the suit lands are irrigated land. It is also his contention that the plaintiff has admitted that the defendants are deriving two crops a year from the suit land, as such, value of the suit properties was more than Rs.1 to 2 lakh per acre in the 2007, and the alleged agreement for sale is void on account of inadequate -9- NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 consideration. He would contend that these aspects have been completely overlooked by the trial Court while granting a decree for specific performance.
10. He would further argue that the trial Court failed to exercise the discretion of not granting specific performance of the contract and failed to take a note of the fact that the defendants have successfully established the plea relating to hardship and onerous nature of the contract.
11. Sri. T.M. Nadaf, learned counsel for the respondent-plaintiff would contend that the alleged agreement for sale dated 08.01.2007 is a concocted document created by the all defendants in collusion to defeat the legitimate claim of the plaintiff which is based on a registered agreement of sale dated 11.07.2007. He would also urge that Court in OS no.388/2007 has a given a categorical finding that the plaintiff and defendants No.1 to 4 in the said suit have concocted the document to defeat the claim of the present plaintiff-respondent. Thus
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 it is urged that the equity does not lie in favour of the defendants and they are not entitled to any discretionary relief.
12. He would also contend that the claim of the defendants that the market value of the properties was Rs.1 to 2 lakh per acre is not established. He would further contend that defendant No.1 has purchased the properties in the year 2005 for Rs.1,10,000/- and he has agreed to sell the properties for value of Rs.4,00,000/- three years later. Referring to these facts, he would contend that the consideration amount shown in the agreement for sale is valid consideration. He would also contend that though the date fixed in the agreement is 10.07.2010, the plaintiff came to know about the attempt on the part of the defendants to alienate the properties to defeat the claim of the plaintiff based on the concocted agreement, the plaintiff is constrained to approach the Court seeking specific performance of contract before the
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 stipulated date in the agreement for sale dated 11.07.2007.
13. Mr. Nadaf further contended that there is no admission on the part of the plaintiff relating to its value being Rs.40,000/- to Rs.60,000/- in the year 2007. He would further submit that the valuation stated by the plaintiff in the cross examination is for the year 2008 and not for the year 2007.
14. This Court has considered the contention raised at the Bar.
15. The following points arise for consideration:-
i) Whether the trial Court is justified in granting a decree for specific performance of contract dated 11.07.2007?
ii) Whether the appellants have made out a case for grant of alternative relief of refund of the earnest amount?
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023
16. The admitted fact in this case is O.S.No.388/2007 was dismissed after trial. In the said suit, the Court has given a finding that the agreement holder/plaintiff in the said suit has not paid consideration amount of Rs.10 lakhs as alleged by him. The Court has also given a finding that the plaintiff in the said suit and defendants No.1 to 4 in the said suit have colluded to defeat the right of the plaintiff in O.S.No.24/2008 in whose favour there is a registered agreement for sale. Accordingly, the said suit was dismissed.
17. The judgment and decree in O.S.No.388/2007 was questioned in RFA No.3114/2011. Thereafter in the said case plaintiff made a statement that he is not pressing his claim for specific performance of contract and he prayed for a decree for refund of the amount based on the admission in the written statement that the earnest money is received by the defendant No.1. Since defendant No.1 also did not give any explanation to the said
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 admission, the Court passed a decree for refund of the earnest amount.
18. Now this Court has to consider whether the registered agreement for sale dated 11.07.2007 is outcome of fraud, misrepresentation and coercion as alleged by the defendant No.1. The provision of Code of Civil Procedure namely Order VI Rule 4 deals with a cases relating to fraud, misrepresentation, under influence and coercion. This provision is an exception to the general principle that the pleading should be brief and precise. This provision mandates that the person who takes up a plea of fraud, misrepresentation, coercion or undue influence has to plead necessary particulars as to how the fraud or misrepresentation is committed, or coercion took place.
19. This Court has perused the written statement filed by defendant No.1. The written statement does not meet the requirement of Order VI Rule 4 of Code of Civil Procedure.
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20. This Court has also considered the evidence led in this regard. Again, the evidence does not give the details as to how the fraud is committed. The only defence is that signature of defendant No.1 was taken on a blank paper when he was under the influence of alcohol. This Court cannot ignore the fact that the document in question is a registered document. This being the position, to hold that the document is outcome of fraud and defendant No.1 signed the document under the influence of alcohol, there must be credible evidence. As already noticed, the pleading is lacking in this regard. There is no evidence to support the contention that defendant No.1 was taken to the Office of Sub-Registrar under the influence of alcohol and that he was misled.
21. Learned counsel for the appellants, Sri.A.S.Patil to substantiate his contention would also urge that it is established in the evidence that plaintiff's husband is a money lender. He would also bring to the notice of the Court that defendant No.1 was cultivating the land of the
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 plaintiff and he was under the obligation of the plaintiff as such there is every possibility that defendant No.1 has signed the blank document at the instance of the plaintiff.
22. Assuming that defendant No.1 was cultivating the properties of the plaintiff, this Court is of the view that the said relationship between the plaintiff and defendant No.1 is not enough to draw an inference that the plaintiff was in a dominating position and got signature of defendant No.1 when defendant No.1 was under the influence of alcohol, before the Office of Sub-Registrar.
23. Unless, the cogent evidence is placed before the Court to show that defendant No.1 was really under the influence of alcohol and signed the document without understanding the contents of the document, the Court is not in a position to hold that the registered agreement for sale is outcome of fraud, misrepresentation and coercion as alleged.
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023
24. This being the position, this Court is of the view that the trial Court is justified in holding that the registered agreement dated 11.07.2007 is duly established.
25. It is also required to be noticed that in O.S.No.388/2007 the Court after considering the evidence on record has come to the conclusion that defendant No.1 and the plaintiff in O.S.No.388/2007 have colluded with each other and created antedated document to defeat the right of agreement holder under the registered agreement dated 11.07.2007. This Court cannot ignore the finding recorded by the trial Court in the said suit.
26. As far as the contention relating to alleged inadequacy of consideration it is to be noticed that the inadequate consideration by itself will not invalidate the agreement. Mr. Patil contends that the land is irrigated as defendant No.1 after investigating considerable amount in digging two ponds in the said land has made it irrigated land.
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023
27. Sri.T.M.Nadaf would contend that the consideration amount is valid consideration amount in the year 2007. He would further contend that three years prior to that defendant No.1 purchased the properties for Rs.1,10,000/-. He would further contend that the guidance value of the properties in the year 2007 was Rs.10,000/- per acre. Though the document is not placed before the Court to give a finding as to the correct guidance value of the properties in the year 2007, there is no serious dispute over the fact that the guidance value of the properties is less than the value of the properties shown in the agreement dated 11.07.2007. This being the position, this Court is of the view that the contention of defendant No.1 that the consideration amount is inadequate is not a valid contention.
28. In addition to that, it is also required to be noticed that inadequacy of consideration amount cannot be a sole ground for refusing the relief of specific performance of contract though it can be one of the
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 circumstances that can be taken into consideration while deciding the case based on the agreement for sale.
29. It is also required to be noticed that though defendants No.1 to 4 have raised a specific defence that the suit schedule properties are only properties on which defendants No.1 to 4 are surviving. The trial Court has refused to exercise discretion in favour of defendants No.1 to 4 on the premise that their conduct in creating the antedated document with an intention to defeat the claim of the plaintiff disentitles equitable relief in their favour. No evidence is placed to hold that the suit properties belonged to all defendants No.1 to 4.
30. This Court does not find any illegality in the order passed by the trial Court which has refused to exercise the discretion under Section 20 of the Specific Relief Act in favour of defendant No.1. This Court is also of the view that the finding of the trial Court in this regard is in accordance with the well established principles of law.
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023
31. During the course of hearing, it is brought to the notice of the Court that there is huge escalation in the value of suit properties. Learned counsel for the appellant, Sri.A.S.Patil would contend that the market value of the properties is anywhere between 12 to 15 lakhs per acre in view of the fact that suit properties are irrigated properties.
32. Learned counsel for the respondents would contend that the market value of the properties is anywhere between 5-6 lakhs per acre.
33. This Court in order to ascertain the correct value of the properties directed the learned counsel for the appellant and respondents to secure information relating to the guidance value of the properties as of 2023.
34. Learned counsel for the appellant and respondents both on instructions would submit that the guidance value of the properties in the year 2023 is Rs.1,25,000/- per acre. This being the position, this Court
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 is of the view that it is reasonable to accept that market value of the properties must be anywhere between 5-6 lakhs per acre.
35. Learned counsel for respondent No.2 Sri.T.M.Nadaf on instructions from the plaintiff as well as her son and daughter who are present before the Court would submit that the plaintiff has voluntarily agreed to pay Rs.20 lakhs to defendant No.1 as equitable measure to compensate for the loss, if any, sustained by the plaintiff on account of the escalation in market value.
36. Sri T.M.Nadaf would also submit that though the substantial amount of Rs.3,70,000/- (Out of the total consideration amount of Rs.4 lakhs) was paid in the year 2007, defendant No.1 continued to be in possession of the properties and he has cultivated the properties and it is quite reasonable to assume that he has earned minimum average income of Rs.1 lakh per acre per annum since 2007, after excluding the cultivation expenses. Thus, he would contend that he must have earned anywhere
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 between 15-16 lakhs from the suit properties during the pendancy of the suit and this appeal.
37. Learned counsel, Sri.A.S.Patil appearing for defendant No.1 would contend that defendant No.1 has invested huge sum to develop the properties to form the ponds in the said land which were otherwise barren.
38. The defendant No.1 himself contends that his land is irrigated and two crops are grown a year. Thus it is reasonable to assume that the defendant No.1 must have earned an average income of Rs, 1 lakh per annum since 2007. Having considered the contentions of both the parties, this Court is of the view that an offer made by the plaintiff to pay Rs.20 lakhs is a reasonable offer and this Court is of the view that in case the Court directs the plaintiff to pay Rs.20 lakhs to defendant No.1, within a period of four weeks from this date same would meet the ends of justice and equity.
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023
39. It is also stated that the plaintiff has already deposited Rs.30,000/- being the balance sale consideration amount pursuant to the decree passed, in the execution proceeding and the sale deed is also executed. It is further stated that warrant is issued for delivery of possession and the same is stayed in view of the interim order granted by this Court.
40. In view of the foregoing, following order is passed:
ORDER The cross-objection stands disposed of. The decree for specific performance of contract in favour of the plaintiff is sustained, with modification relating to sale consideration.
In addition to the balance consideration amount of Rs.30,000/-said to have been deposited before the executing Court, the plaintiff shall deposit Rs.20 lakhs to defendant No.1, within four months from this date before
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 the Executing Court. On receipt of payment of Rs.20 lakhs, defendants No.1 to 4 shall hand over the actual possession of suit properties to the plaintiff.
It is further made clear that defendant No.1 is entitled to withdraw Rs.30,000/- deposited by the plaintiff pursuant to the decree.
Payment of Rs.20 lakhs by the plaintiffs is a condition precedent for delivery of possession of the suit properties to the plaintiff.
In case the payment is not made within a period of four months from this date, the amount of Rs.20 lakhs shall carry interest at 6% p.a. from this date till actual payment.
In the peculiar circumstances of this case, no order as to cost.
It is further made clear that even if the amount of Rs.20 lakhs is paid before the period of four months,
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NC: 2023:KHC-D:9089 RFA.CROB No. 100002 of 2023 defendant No.1 is entitled to harvest the crop, if any, already grown in the land.
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JUDGE VMB UPTO PARA 10 SH, List No.: 1 Sl No.: 43 ..