Karnataka High Court
A G Sheshappa vs R Basappa on 22 January, 2014
Bench: K.L.Manjunath, Ravi Malimath
®
IN THE HIGH COURT OF KARNATAKA AT
BANGALORE
DATED THIS THE 22ND DAY OF JANUARY, 2014
PRESENT
THE HON'BLE MR JUSTICE K L MANJUNATH
AND
THE HON'BLE MR JUSTICE RAVI MALIMATH
Regular First Appeal No. 282 of 2007 (SP-DB)
BETWEEN:
1. A G SHESHAPPA
S/O LATE GOPALAPPA
AGED ABOUT 60 YEARS
2. SMT A A BHAGYALAXMI
W/O A G SHESHAPPA
AGED ABOUT 51 YEARS
BOTH ARE R/AT NO.31
GOPALAPPA BLOCK
ADUGODI, HOSUR ROAD
BANGALORE - 560 030 ... APPELLANTS
[By Sri M J Alva, Adv.]
AND:
R BASAPPA
S/O RUDRAMUNIYAPPA
AGED ABOUT 66 YEARS
NO.1572, 7TH MAIN
RPC LAYOUT, VIJAYANAGAR
BANGALORE - 560 040 ... RESPONDENT
[By M/s V Mruthyunjaya & T Nanjunda Raju, Advs.]
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THIS APPEAL IS FILED UNDER SECTION 96 AND ORDER 41
RULE 1 OF CODE OF CIVIL PROCEDURE, AGAINST THE
JUDGEMENT AND DECREE DATED 05.12.2006 PASSED IN O.S. NO.
2483/1998 ON THE FILE OF THE XI ADDL. CITY CIVIL JUDGE, CITY
CIVIL COURT, BANGALORE, DECREEING THE SUIT FOR SPECIFIC
PERFORMANCE AND ETC.,
THIS APPEAL COMING ON FOR HEARING, THIS DAY,
MANJUNATH, J., DELIVERED THE FOLLOWING:
JUDGMENT
The legality and correctness of the judgment and decree dated 5-12-2006, passed in OS No 2483 of 1998, on the file of XI Additional City Civil Judge, Bangalore, is challenged in this appeal.
2. Appellants were defendants and respondent was the plaintiff before the trial court. For the sake of convenience, the parties would be referred to as per their ranking in the trial court.
3. Plaintiff - Basappa - instituted the suit to direct the defendants to execute sale deed for a sum of Rs 40.00 lakh in respect of suit schedule property, by receiving the balance sale consideration of Rs 20.00 lakh, within the 3 time stipulated by the court and to put the plaintiff in possession of the property, a residential building situated at No 23, Gramadevatha Temple Street, Division No 66, Audugodi, Bangalore, measuring 48+63/2 feet by 85+75/2 feet, totally measuring 4440 sqft.
4. According to plaint averments, in a family partition, the suit schedule property had fallen to the share of first defendant and for his legal necessity and for family benefit, defendants, being husband and wife, agreed to sell the suit schedule property for a sum of Rs 40.00 lakh on 1-5-1996. By receiving a sum of Rs 20.00 lakh as advance sale consideration, executed a registered agreement of sale, registered in the office of the sub-registrar, Jayanagar, Bangalore. The defendants further agreed to receive the balance sale consideration of Rs 20.00 lakh within three years from 1-5-1996. Contending that in spite of repeated requests, the defendants failed to execute sale deed by 4 receiving balance sale consideration, the suit came to be filed for specific relief.
5. The suit was contested by the defendants. According to them, the agreement dated 1-6-1996 is forged, concocted created and obtained by the plaintiff by playing fraud committing forgery and impersonation and that the suit is not maintainable. According to them, the suit for specific performance is unenforceable, because of lack of marketable title. It is also their case that second defendant did not execute the agreement of sale. She did not appear before the sub-registrar to execute the agreement of sale. According to defendants, the mother of first defendant was unwell in the year 1996. She was admitted to hospital. Therefore, the first defendant was in need of money. In the circumstance, first defendant approached one Diwakar, a KAS officer working in the state government, and he was ready to advance a loan of Rs 1.00 lakh to the first defendant, subject to execution of an 5 agreement of sale as desired by him. Accordingly, under duress and coercion, suit document came to be executed by the first defendant only. The second defendant did not appear before the sub-registrar and she has not put her signature on the document and the LTM found on the document is also not that of her. It was also contended that the agreement is only a document executed by the first defendant as security for due repayment of the loan of Rs 1.00 lakh borrowed from Diwakar and there is no privity of contract between the plaintiff and the defendants and prayed for dismissal of the suit.
6. The second defendant filed written statement separately, which is replica of the written statement filed by the first defendant. She contended that she has not executed any agreement of sale and she has not appeared before the sub-registrar and some one has impersonated her.
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7. Based on the above pleadings, the trial court framed the following issues:
1) Whether the plaintiff proves that the defendants agreed to sell the suit property for a consideration of Rs. 40 lakhs and executed an agreement of sale dated 01.05.1996?
2) Whether the plaintiff proves that he has paid advance sale consideration of Rs.20 lakhs to the defendants?
3) Whether the plaintiff proves that he has been ever ready & willing to perform his part of contract?
4) Whether the plaintiff proves that he is entitled to the specific performance of the agreement of sale?
5) Whether the plaintiff proves that he is entitle for vacant possession of the suit property?
6) Whether the defendants prove that the
agreement of sale is concocted by
practicing fraud, forgery and
impersonation?
7) Whether the defendants prove that the
suit is not maintainable for want of
markable title?
8) Whether the defendants prove that the
suit is bad for misjoinder of parties?
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9) Whether the defendants prove that the
suit is premature?
10) What decree or order?
8. In order prove their respective contentions, on behalf of plaintiff, two witnesses were examined and relied upon ExP1 to 19. On behalf of defendants, three witnesses were examined and relied upon ExD1. The trial court, after considering the evidence let in by the parties, answered issues 1 to 5 in the affirmative and 6 to 9 in the negative and ultimately decreed the suit filed by the plaintiff by directing the defendants to execute the sale deed within two months from the date of decree and two months' time has been granted to the plaintiff to deposit the balance sale consideration of Rs 20.00 lakh. This judgment and decree is challenged in this appeal.
9. We have heard the learned counsel for the parties. 8
10. Though several grounds have been urged in the memorandum of appeal, at the time of argument, learned counsel for the appellants has urged the following grounds in support of the case of the defendants-appellants:
According to him, the trial court did not appreciate ExP1 agreement of sale in proper perspective. Without considering various clauses of the agreement of sale, the trial court has wrongly decreed the suit. According to him, ExP1 is a document executed by the defendants as a security for the loan borrowed from Diwakar. Therefore, ExP1 could not have been treated as a registered document to sell the suit schedule property for a sum of Rs 40.00 lakh. According to him, if the property is agreed to be sold for the legal necessity of the defendants, no prudent man would agree to receive balance sale consideration three years after the execution of the agreement of sale. By looking into clause-13 of the agreement, the trial court was required to hold that ExP1 was executed for the security of loan advanced by Diwakar.9
11. Learned counsel for the appellants further contends that the plaintiff had no money to advance in a sum of Rs 20.00 lakh either on the date of the agreement or on any other day. According to him, PW1 in unequivocal terms admitted that though he is an assesee under the Income Tax Act, 1961, did not reflect the payment of Rs.20.00 lakh as advance in his income tax returns. According to him, if really Rs 20.00 lakh had been paid on the date of agreement in the year 1996, the plaintiff was required to show in his income tax returns about the payment of Rs 20.00 lakh made by him. He further contends that PW1 has admitted that Rs 20.00 lakh could not have been paid by him in cash and he further admitted that he had no document to show that he had cash f Rs 20.00 lakh on the date of execution of agreement of sale. In the circumstance, he contends that the trial court without appreciating ExP1 coupled with the oral evidence of PW1 in proper perspective, wrongly held that the defendants have received an advance sale consideration of Rs 20.00 lakh. 10
He further submits that PW1 has admitted in his cross- examination that he had no money, and that he borrowed the same from others. However, no documentary evidence is placed before the court below to show such borrowing. He further contends that in the examination-in-chief PW1 has stated that he had money with him and in order to invest the same, he agreed to purchase the suit schedule property. But, in the cross-examination, he has categorically admitted that he had no money to pay Rs 20.00 lakh as advance and that his wife had sold a landed property for a sum of Rs 4.00 lakh and the said amount is also not disclosed in her assets and liabilities statement, even though she is a government employee working at Vidhana Soudha. The wife of plaintiff being a government servant, if really had a cash of Rs 4.00 lakh and if she had sold a property, the same was required to be reflected in her assets and liabilities statement. He further submits that the trial court also did not consider the evidence of DW1, because DW1 has categorically stated that there is no 11 privity of contract between the plaintiff and the defendants, and that the first defendant had borrowed a loan of Rs 1.00 lakh from Diwakar, a KAS officer, and to show that Diwakar is responsible for filing of suit, it is admitted in the cross-examination of PW1 that on all the dates of hearing, Diwakar used to come and sit in the court hall, which only discloses that it is a shadow fighting, at the instance of Diwakar. Learned counsel for the appellants lastly contends that either in the plaint or in the evidence of PW1, he never stated that he was ready and willing to pay the balance sale consideration, which is an essential ingredient to get a decree for specific performance. In the circumstance, he contends that the appreciation of evidence by the trial court is perverse and the impugned judgment and decree are liable to be set aside. Accordingly, he requests for dismissal of the suit by allowing the appeal.
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12. Learned counsel for the appellants has relied upon ExD1, a letter addressed by Diwakar to first defendant, which is admitted by PW1 in his cross-examination, stating that the first defendant has not paid the interest for the loan and that the plaintiff would file a suit to get the sale deed executed in respect of the suit schedule property and therefore he demanded through ExD1 for return of the money borrowed by the defendants with interest by further warning the first defendant if the loan is not repaid along with interest, they would lose the suit schedule property.
13. Having heard the learned counsel for the parties, the following points arise for our consideration in this appeal:
i) Whether ExP1 is an agreement of sale, agreeing to sell the suit schedule property or a document executed as security for the loan advanced by the plaintiff?
ii) If the first point is held in favour of the plaintiff-respondent,. whether the plaintiff has proved that he has paid advance sale consideration of Rs 20.00 lakh on the date of agreement?
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iii) Whether the plaintiff was ready and willing to execute his part of the contract?
iv) Whether the judgment and decree passed by the court below requires to be interfered with?
14. Since all these points are interconnected with one another, we would like to deal them with together as hereunder.
15. It is not in dispute that ExP1 is the suit document. It is a registered document, registered in the office of the sub-registrar, Jayanagar, Bangalore on 1-5-1996. The executants of the agreement of sale are A G Seshappa and A S Bhagya Lakshmi, who are defendants in the suit. According to ExP1, the suit schedule property is a joint family property of defendants and other coparceners and under a registered partition deed dated 16-2-1951, the suit schedule property has fallen to the share of the first defendant. Though the agreed value of the property is Rs 40.00 lakh, a sum of Rs 20.00 lakh was paid in cash as 14 advance sale consideration. In the preamble portion of the agreement, it is stated that the sale was for legal necessity and family benefit of the defendants. What was the legal necessity for the defendants to sell the property has not been stated either in the agreement or in the plaint or in the evidence of PW1. as per clause-4 of the agreement, the defendants have agreed to execute a registered sale deed within three years from 1-5-1996 by putting the plaintiff in possession of the property. As per clause-6 of the agreement, the title deeds have been handed over to the plaintiff at the time of execution of the agreement. Clauses- 11 and 12 have been deleted at the time of registration of the agreement, which read as under:
11. The Vendors, voluntarily and without any reservation hereby agree with the Purchaser to pay interest every month to the Purchaser at the rate of Rs.2.15 ps.% per month or Rs.43,000/-
(Rupees Forty three thousand only) on the amount advanced under this agreement by the Purchaser without any default. In case the Vendors fail to pay the aforesaid agreed interest continuously for a period of six months during the Subsistence of this agreement the Purchaser shall have the absolute right to demand for the 15 execution of the deed of sale without waiting for the stipulated period of 3 years or 1.5.1999. In case the Vendors regularly pay the aforesaid agreed interest and pay the advanced amount of Rs.20,00,000/- paid under the agreement to the Purchaser before 1.5.1999, this agreement stands cancelled and has no effect.
12. In case the Vendors fail to perform their part of the agreement, the Purchaser shall be entitled to claim the entire amount of Rs.20,00,000/- advanced under this agreement with interest of Rs.2.15 ps.% p.m. on the amount advanced along with liquidated damages of Rs.5,00,000/- (Rupees Five lakhs only) from the Vendors.
Clause-13 of the agreement reads as under:
13. The schedule property shall be the security for all the amount due under this agreement by the Vendors.
16. A conjoint reading of clauses 11 to 13 of the agreement of sale, would only disclose the nature of transaction the parties had. Therefore, we are of the view that ExP1 is not an agreement of sale, but it is an agreement executed as a security. When we read ExP1 with ExD1, a letter addressed by one Diwakar to first defendant, wherein he has demanded for refund of the 16 amount with interest, in the light of the admission of PW1 in his cross-examination that Diwakar used to sit in the court hall on almost all dates of hearing, it can be easily infer that ExP1 is not an agreement of sale, but it is only a document executed for the security of the loan advanced to first defendant. If Diwakar is no way concerned with the transaction, as contended by PWs 1 and 2, there was no need for him, who is a Group-A officer of the State, to come and sit in the court hall on all the dates of hearing and more particularly in the background of ExD1. If he is no way concerned with the defendants, he would not have addressed a letter to the first defendant, demanding refund of the money with interest and further warning the defendants that if the demand is not complied with, the defendants have to lose the suit schedule property. In the circumstances, we are of the view that the appreciation of evidence by the court and its findings in regard to ExP1 has to be reversed. Merely because, an agreement of sale is registered, the court shall not come to the conclusion that 17 it has to be considered as an agreement of sale. While considering an agreement of sale, we have to look into the entire pith and substance of the document. The nomenclature of the document will not alone decide the nature of the document. Since the trial court did not consider the effect of clauses 11 to 13, we are of the view that an error is committed by the court below in holding that there is an agreement of sale between the parties to sell the suit schedule property. Even if we exclude clauses 11 and 12 of the agreement, clause-13 would chinch the issue to hold that the agreement has come into existence only as a security for the loan advanced.
17. It is the specific case of second defendant that she did not appear before the sub-registrar and has not signed the document. On perusal of ExP1, the second defendant is said to have signed the document as 'A S ¨sÁUÀå®Qëä'. According to her, the signature found in ExP1 does not of her and so also the LTM found in ExP1 on the second page 18 of the document. We have carefully examined the admitted signature of second defendant found in the written statement and vakalath. She is in the habit of signing in English as 'A A Bhagyalakshi'. In ExP1 one A S Bhagyalakshi has signed in Kannada language. This discrepancy has also not been explained by the plaintiff. When second defendant has been examined as DW1, at least it was the duty of the plaintiff to cross-examine her on the disputed question as to the signature found in ExP1 and the admitted signature of DW1. The trial court has not even compared the admitted and the disputed signatures of DW1, found in ExP1 and other documents. The trial court, without giving any finding on the question of execution of ExP1 by the second defendant, has held that ExP1 is proved.
18. We have also seen from the cross-examination of PW1, wherein he has admitted as hereunder:
... I do not know the initial of second defendant. I do not know what is meant by A.S. as shown in cause title of second defendant. I have seen 19 the second defendant only once in the office of the Sub-Registrar. Along with second defendant her husband first defendant, Suresh, Thagaraj and one Advocate Sri. Usman were present. I have paid an amount of Rs.20,00,000/- to the first defendant in the presence of Sub- Registrar.'' ...
... I am income tax assesee. I have not shown in my income tax returns for having paid a sum of Rs.20,00,000/- to the first defendant. I have not shown in my income tax returns to the effect that I was having Rs.20,00,000/- with me. I studied undergraduate. It is true that if the amount is payable more than Rs.20,000/-, it should not be paid in cash.
My wife by name M Nanjamma is working in DPAR at Vidhana Soudha, Bangalore. My wife sold her property situated at Basapura Hobli, Bangalore 6 months prior to the agreement of sale. The said property was sold for Rs.4,00,000/-. My wife purchased the said property 2 years prior to sale. My wife had not taken any permission form the concerned department for sale of the said property. My wife had not declared in her assessment and liabilities statement for having owned the said property. .... I have paid an amount of Rs.20,00,000/- out of my own earnings as well as by receiving the amount from my friends. I have invested a sum of Rs.5,00,000/- of my own and I have taken an amount of Rs.15,00,000/- from my friends. I have no records with me to show that I had an amount of Rs.5,00,000/- with me and taken an amount of Rs.15,00,000/- from my friends.20
In the further cross-examination made on 13-1-2003, PW1 has admitted as under:
... During 1996, I had taken a loan of Rs.10 lakhs from Jayanna and also taken a loan of Rs.5 lakhs from one Mallikarjuna. But I cannot say the date of taking those loans. I have no records with me to show that I had taken the loan of Rs.10 lakhs and 5 lakhs from the above stated 2 persons. Till today, I have not repaid those loans to the above stated 2 persons. The above stated 2 persons till today have not issued any legal notice demanding for repayment of the loan nor filed any suit for recovery of the amount. As on today, I am not having any funds with me for refund of the above stated loan. ...
... One Diwakar is in no way connected with this transaction. I have not talked with the said Diwaker in connection with this suit. I can identify the signature of the said Diwaker. Now I have seen the signature shown to me appearing on inland letter. The said signature is done by Diwaker. The Inland letter marked as Ex.D.1 and the signature is marked as Ex.D.1(a). I do not remember whether I have instructed Diwaker to write the letter as per D.1. I do not know whether the said Diwaker is lending the money on interest basis.
(Emphasis is supplied by us) 21 PW1 has further admitted that ExP1 agreement of sale is executed as a security to the amount paid to the first defendant.
19. In view of the admissions made by PW1-plaintiff, it is very clear that he had no money as on the date of execution of ExP1. According to him, he had borrowed loan of Rs 15.00 lakh from his friends and he had an amount of Rs 5.00 lakh. He admitted that he is an income tax assesee. If he had a sum of Rs 5.00 lakh, he would have disclosed in his returns. Similarly, if he had borrowed Rs 15.00 lakh to pay the advance sale consideration to the defendants, the same was also required to be reflected in the income tax returns. But, the same is also not disclosed. He has admitted in the cross-examination that he had no money, in the examination-in-chief, he has deposed as hereunder:
... I had some money and I wanted to take money from my finance. Also my wife had sold her land. Broker Suresh informed that the suit house is for sale. I inspected the property with Suresh in April 1996. ...22
When PW1 had no money, the case of the plaintiff could not have been believed by the court below. Even otherwise, if the suit of the plaintiff has to be decreed, the plaintiff has to show before the court that he was ready and willing to perform his part of the contract from the date of filing of the suit till disposal of the suit. Unfortunately, in the present suit, the plaintiff has not averred in the plaint that he was ready and willing to perform his part of the contract and that he had the balance sale consideration with him. He has also not deposed in the examination-in-chief about his readiness and willingness. On the contrary, in his cross- examination, PW1 has admitted that he had no money with him. In spite of the same, the court below has decreed the suit of the plaintiff for specific performance of the contract, which, according to us, is a perverse finding recorded by the trial court without proper appreciation of the material on record and liable to be set aside. The question would be as to whether the plaintiff really advanced the amount of Rs 20.00 lakh to the defendants. Unfortunately, though 23 ExP1 discloses payment of Rs 20.00 lakh in cash, it is come in the evidence of PW1 that he had no capacity to pay such a huge amount. On the contrary, the contention of the defendants appears to be more probable and acceptable, because, according to the defendants, in order to meet the medical expenses of mother of first defendant, who was admitted in a hospital, he was in need of Rs 1.00 lakh and the same was borrowed by him from Diwakar. The case of the defendants is supported by DW3 T Thangaraju. According to DW3, Rs 1.00 lakh was paid as a loan by Diwakar and it is he who arranged such a loan through Diwakar. DW3 is also one of the attesters to ExP1. If Diwakar had no connection with the transaction or with the plaintiff, it was for him to explain as to what prompted Diwakar to address a letter to the defendants as per ExD1 and no explanation is offered by the plaintiff in this regard. Therefore, we are of the view that there is nothing to show that a sum of Rs 20.00 lakh was paid as advance to the defendants and the trial court, without considering either 24 the pleadings or the evidence of the parties, by misreading the documents and the evidence and without due regards to the admissions of PW1, the court below has wrongly granted a decree in favour of the plaintiff.
20. When the plaintiff has failed to prove that he had cash of Rs 20.00 laklh to advance on 1-5-1996, we are of the view that even the plaintiff is not entitled for refund of alleged payment of Rs 20.00 lakh. In the circumstances, we are of the view that the trial court has committed an error in decreeing the suit. The judgment and decree of the trial court requires to be reversed and the suit of the plaintiff has to be dismissed.
21. In the result, this appeal is allowed. Judgment and decree dated 5-12-2006 passed in OS No 2483 of 1998, on the file of XI Additional City Civil Judge, Bangalore, are hereby set aside. Consequently, the suit filed by the respondent-plaintiff in OS No 2483 of 1998 is hereby dismissed. Since the respondent has filed a false and 25 frivolous suit, the appellants are entitled for the cost of this appeal.
Sd/-
JUDGE Sd/-
JUDGE *pjk