Karnataka High Court
V B Krishnappa vs N S Sudhakar on 27 October, 2023
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
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RFA NO.412 OF 2017 C/W
RFA NO.1938 OF 2017
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF OCTOBER, 2023
PRESENT
TH E HON'BLE MR. JU ST ICE P. S.D INE SH KUM AR
AN D
THE HON'BLE MR. JUSTICE T.G.SHIVASHANKARE GOWDA
RFA NO.412 OF 2017 C/W
RFA NO.1938 OF 2017 (SP)
IN RFA NO.412 OF 2017
BETWEEN:
N. S. SUDHAKAR
S/O N. L. SIDDAIAH
AGED ABOUT 48 YEARS
AGRICULTURIST AND BUSINESSMAN
R/AT NAGAVARA VILLAGE, NAGAVARA POST
KASABA HOBLI, CHANNAPATNA TALUK
RAMANAGARA DISTRICT - 562 108 ... APPELLANT
(BY SRI.N.S.ANAND, ADV.)
AND:
V. B. KRISHNAPPA
S/O LATE P BASAVAIAH
AGED ABOUT 42 YEARS
AGRICULTURIST & BUSINESSMAN
R/AT VIDYANATHAPURA VILLAGE
KASABA HOBLI, MADDUR TALUK
MANDYA - 571 428 ...RESPONDENT
(BY SRI. M. N. UMASHANKAR, ADV. A/W
SRI.NARASIMHA MURTHY G. V., ADV.)
THIS RFA IS FILED UNDER SECTION 96 READ WITH
ORDER XLI RULE 1 OF CPC., 1908 AGAINST THE JUDGMENT
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RFA NO.412 OF 2017 C/W
RFA NO.1938 OF 2017
AND DECREE DATED 16.12.2016 PASSED IN OS.NO.14/2009
ON THE FILE OF THE SUIT FOR SPECIFIC PERFORMANCE.
IN RFA NO.1938 OF 2017
BETWEEN:
V. B. KRISHNAPPA
AGED ABOUT 42 YEARS
S/O LATE P BASAVAIAH
AGRICULTURIST & BUSINESSMAN
R/AT VIDYANATHAPURA VILLAGE
KASABA HOBLI, MADDUR TALUK
MANDYA - 571 428 ... APPELLANT
(BY SRI. M. N. UMASHANKAR, ADV. A/W
SRI.NARASIMHA MURTHY G. V., ADV.)
AND:
N. S. SUDHAKAR
S/O N. L. SIDDAIAH
AGED ABOUT 48 YEARS
AGRICULTURIST AND BUSINESSMAN
R/AT NAGAVARA VILLAGE, NAGAVARA POST
KASABA HOBLI, CHANNAPATNA TALUK
RAMANAGARA DISTRICT - 562 108 ...RESPONDENT
(BY SRI.N.S.ANAND, ADV.)
THIS RFA IS FILED UNDER SECTION 96 OF CPC.,
AGAINST THE JUDGMENT AND DECREE DATED 16.12.2016
PASSED IN OS NO.14/2009 ON THE FILE OF THE SENIOR
CIVIL JUDGE, MADDUR PARTLY DECREEING THE SUIT FOR
SPECIFIC PERFORMANCE.
THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 04.10.2023 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY,
T.G.SHIVASHANKARE GOWDA J., DELIVERED THE
FOLLOWING:
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RFA NO.412 OF 2017 C/W
RFA NO.1938 OF 2017
JUDGMENT
In these appeals, both plaintiff and defendant have challenged the judgment and decree dated 16.12.2016 passed in O.S.No.14/2009 by the learned Senior Civil Judge, Maddur (for short 'the Trial Court').
2. For the sake of convenience, parties shall be referred to as per their ranking in the Trial Court.
3. Brief facts of the case are, defendant is the owner of 17 gutnas of land in Sy.No.148/5 of Goravanahalli Village, Kasaba Hobli, Maddur Taluk and 5 guntas of converted land in Sy.No.746 of Maddur village. Plaintiff and defendant are the relatives. The defendant expressed his desire to sell the suit properties and plaintiff expressed his willingness to purchase. After negotiation, sale consideration was fixed at Rs.25 lakhs. On 21.11.2007, a registered agreement of sale was executed by the defendant in favour of the plaintiff by receiving part consideration of Rs.10 lakhs, agreeing to execute the registered sale 4 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 deed within six months on receipt of balance consideration of Rs.15 lakhs. Thereafter the defendant demanded payment of additional consideration and on 26.11.2007, plaintiff paid a sum of Rs.13,60,000/- to which the defendant has executed an agreement agreeing to receive the balance consideration of Rs.1.4 lakhs at the time of execution of the sale deed. Plaintiff demanded the defendant to execute the sale deed, but the defendant has dodged it for one or the other reason. The plaintiff was and is always ready and willing to perform his part of contract till date in terms of both the agreements. The defendant did not come forward to perform his part of contract. On 21.04.2008, plaintiff issued a notice calling upon the defendant to execute the sale deed by receiving the balance consideration of Rs.1,40,000/-. The defendant approached the plaintiff and sought for time for preparation of survey sketch, which was required for registration. Plaintiff waited for some time, but the defendant did not come forward with the survey 5 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 sketch. Plaintiff issued another notice on 20.09.2008 calling upon the defendant to execute the sale deed. Since he did not come forward, he has filed the instant suit.
4. The defendant opposed the suit by filing written statement interalia admitting that he is a relative of the plaintiff and owner of the suit property. According to him, for his joint family necessity, he had approached the plaintiff for financial assistance. At his request, plaintiff agreed to lend loan of Rs.10 lakhs and insisted him for providing security. Accordingly, he has borrowed Rs.10 lakhs from the plaintiff agreeing to pay interest @ 1.5% p.m. As a security, he had signed some blank papers on 21.11.2007 before the respectable persons known to both of them. As the plaintiff insisted him to provide property as a security by way of registered sale agreement, he agreed to execute the same and accordingly, the registered agreement was executed on 21.11.2007 in 6 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 favour of the plaintiff. The said sale agreement was a nominal one to secure the loan. He had not intended to sell the suit properties in favour of the plaintiff. On 27.11.2007, he had demanded with the plaintiff to return the blank papers signed by him, but the plaintiff told him that he had misplaced them and promised to return after tracing them. As the plaintiff is his relative, he did not doubt him and they remained with the plaintiff. He had agreed to repay the loan within six months. As agreed, he paid interest to the plaintiff till July 2009, but due to financial constraint, he could not pay the interest thereafter. The plaintiff with malafide intention to grab the suit property by using the signed blank papers has concocted and created agreement of sale dated 26.11.2007. On 26.11.2007, he has not received consideration of Rs.13,60,000/- nor executed any agreement. The agreement dated 26.11.2007 is a compulsorily registerable document, sufficient stamp duty was not paid and the plaintiff is not entitled to enforce both agreements as the 7 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 registered sale agreement was a nominal document, and agreement dated 26.11.2007 is a concocted one and sought for dismissal of the suit.
5. Based on the above pleadings, the Trial Court has framed following issues:
1. Whether the plaintiff proves that the defendant by agreeing to Sell the suit schedule properties for valuable consideration of Rs.25,00,000/- executed a registered sale agreement dated 21.11.2007 by receiving Rs.10,00,000/- as advanced amount?
2. Whether the plaintiff further proves that the defendant out of balance sale consideration of Rs.15,00,000/- received another Rs.13,60,000/-
and executed an agreement on 26.11.2007?
3. Whether the defendant proves that in the 2nd week of November 2007 he borrowed the cash of Rs.10,00,000/- from the plaintiff and for its security handed over signed blank papers to the plaintiff?
4. Whether the plaintiff is entitled for the relief of specific performance of contract?
5. What Order or Decree?
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RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017
6. Before the Trial Court, plaintiff examined three witnesses as PWs-1 to 3 and got marked 11 documents as Exs.P1 to P11. The defendant got examined himself as DW-1 and marked as many as 16 documents as Exs.D1 to D16. After hearing the parties, the Trial Court recorded its affirmative finding on issues Nos.1 and 2, negative finding on issue Nos.3 and 4 and answered issue No.5 holding that the plaintiff is not entitled for the relief of specific performance and is entitled to refund of advance paid under both the agreements and decreed the suit directing the defendant to pay Rs.23,60,000/- with interest @ 9% per annum from the date of agreements.
7. Aggrieved by the same, the plaintiff and also defendant have filed the instant appeals on various grounds.
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RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017
8. Heard the arguments of Sri.N.S.Anand, learned counsel for the plaintiff and Sri.M.N.Umashankar, learned Counsel for Sri.G.V.Narasimha Murthy, learned Counsel for the defendant.
9. It is the contention of the learned Counsel for the plaintiff that the defendant has approached the plaintiff to sell the suit property for a consideration of Rs.25 lakhs. On 21.11.2007, the defendant has executed a registered agreement by receiving part consideration of Rs.10 lakhs, thereafter he had approached the plaintiff to pay additional sum for his family necessity. As the plaintiff was holding money on 26.11.2007, defendant executed an unregistered agreement and received consideration of Rs.13,60,000/- agreeing to receive balance amount of Rs.1,40,000/- at the time of execution of sale deed. When the plaintiff 10 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 requested for execution of the sale deed, offering Rs.1,40,000/- the defendant sought for time as the survey sketch was required for registration of the sale deed. As the defendant did not come forward with 11-E survey sketch, notice was caused to the defendant on 21.04.2008. Thereafter, the defendant sought for time, but he did not come forward to execute the sale deed, second notice was also issued on 20.09.2008. As the defendant did not come forward, the plaintiff was constrained to file the instant suit.
9.1. It is further contended that the plaintiff has paid more than 95% of the sale consideration. He was ready to obtain the sale deed, but the defendant on the pretext of getting 11-E sketch committed breach of agreement. The defendant by collecting money as advance from the plaintiff has purchased 39 guntas of converted land near LIC 11 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 Office, Maddur and now he is trying to defeat the interest of the plaintiff. Defendant is in the habit of doing the same with many others and he is facing several suits before various courts. Plaintiff was and is always ready and willing to perform his part of contract and he has to pay a meager amount of Rs.1,40,000/- and there was no delay on the part of the plaintiff. Contrary to the material placed on record and also the evidence adduced, the Trial Court has drawn an incorrect assumption that the time is the essence of the contract, there was breach of contract by the plaintiff; plaintiff approached the court belatedly and declined to exercise its discretion in ordering execution of sale deed. The purpose of entering into an agreement with the defendant was to acquire the property. Defendant having acquired immovable property from the plaintiff's money cannot plead equity. If the sale deed is not executed, it is the plaintiff who suffers 12 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 hardship and not the defendant. The defendant cannot be permitted by the courts to enrich himself by acquiring new property and to retain his own property at the cost of the plaintiff and sought for interference by this Court.
10. Per contra, learned counsel for the defendant has contended that, for the joint family necessity, defendant has borrowed loan from the plaintiff agreeing to pay interest @ 1.5% per annum and accordingly paid interest till July 2009. Due to hardship, the defendant could not pay interest and also return loan of Rs.10 lakhs. For this default, the plaintiff has misused the blank stamp papers signed by defendant at the time of borrowing Rs.10 lakhs; in collusion with the attestors and the scribe, has created and concocted the agreement dated 26.11.2007 to claim that a sum of Rs.13,60,000/- was paid. Notice of the plaintiff was suitably replied 13 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 and the evidence placed before the Court did not inspire the confidence of the Court and the finding recorded by the Trial Court that the plaintiff has executed the agreement on 21.11.2007 for sale of the property for a consideration of Rs.25 lakhs, execution of the agreement dated 26.11.2007 and receipt of Rs.13,60,000/- is incorrect. The Trial Court has not properly appreciated the fact that the plaintiff has received the signed blank papers while lending loan of Rs.10 lakhs and created the second agreement. The Trial Court has not properly appreciated the evidence. Defendant is ready to repay Rs.10 lakhs along with interest from August 2009. The Trial Court has committed an error in directing the defendant to refund Rs.23,60,000/- and he sought for modification of the impugned judgment and decree to that extent. 14
RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017
11. We have given our anxious consideration to the arguments addressed on behalf of both parties and perused the records.
12. In the light of the above, the points that arise for our consideration are:
(i) Whether the transaction between the plaintiff and defendant is a sale transaction or a loan transaction?
(ii) Whether the agreement dated
26.11.2007 and passing of part
consideration of Rs.13,60,000/- is proved?
(iii) Whether time is the essence of contract between the parties?
(iv) Whether the plaintiff was and is always ready and willing to perform his part of contract?
(v) Whether the impugned judgment is perverse and calls for our interference? 15
RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 Reg. Point No.(i):
13. We have referred to the admitted facts hereinabove. According to the defendant, he had executed registered sale agreement on 21.11.2007 as security to loan of Rs.10 lakhs. On the contrary, plaintiff asserts that it was a pure sale transaction and Rs.10 lakhs so paid under the agreement was a part consideration. In this regard, we have perused the evidence let in by both parties.
13.1. Ex.P1 is a registered agreement of sale. Plaintiff has relied upon the testimony of attesting witnesses as well as the scribe of Ex.P1 in support of his testimony as PWs-2 and 3. PW-
2/C.M.Shivaramaiah is the attesting witness and PW- 3/Mahadeva is the scribe of the document. On a careful scrutiny of their testimony including the cross-examination on behalf of the defendant, except natural minor aberrations, nothing is elicited from 16 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 their mouth; it stands in support of the plaintiff to the effect that transaction between the plaintiff and defendant on 21.11.2007 was a sale transaction.
13.2. The cross-examination of defendant has demonstrated that he is a real estate agent, he used to invest money on the immovable property, he used to purchase the properties at lower rates and sell it on the higher rates. Defendant also admits acquisition of 39 guntas of land near LIC office, Maddur for a consideration of Rs.30 lakhs as per sale deed dated 23.07.2008. According to the defendant, he has paid a sum of Rs.5 lakhs as advance on 27.11.2007 and paid remaining sum of Rs.25 lakhs before the Sub-Registrar at the time of registration of the sale deed. This clearly goes to show that the defendant has used plaintiff's money to acquire 39 guntas of land.
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RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 13.3. The contention of the defendant that the transaction is a loan transaction has not been proved by any cogent evidence. The oral evidence of the defendant will not substitute the written contract as per Ex.P1. The contents of Ex.P1 are corroborated with the oral evidence of PWs-1 to 3 and the testimony of the defendant. Hence, we do not find any positive evidence in support of the defendant to accept that it was a loan transaction. The evidence relied upon by the plaintiff clearly demonstrates that Ex.P1 is 'an agreement to sell' the suit schedule properties for a consideration of Rs.25 lakhs and a sum of Rs.10 lakhs was paid under Ex.P1 as part consideration of sale. Accordingly, we answer point No.(i) holding that the transaction between the parties is a 'sale transaction'.
Reg.Point No.(ii):
14. It is alleged that Ex.P2 is agreement under which the defendant has received a sum of 18 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 Rs.13,60,000/- as further part consideration on 26.11.2007. In this regard, the plaintiff has relied upon the evidence of PWs-2 and 3, who are the very same attesting witnesses and the scribe. The cross- examination of these witnesses has failed to demonstrate that Ex.P2 is a concocted document. Through his evidence and cross-examination of PWs- 1 to 3, defendant has failed to demonstrate that blank stamp papers were handed over to the plaintiff. Such being the case, we do not find any lacuna in the evidence of the plaintiff.
14.1. According to the defendant, some respectable persons were present when the loan transaction took place between him and the plaintiff. Before the Trial Court, the defendant has not furnished any details of 'those respectable persons' nor brought any one before the Court to explain that it was a loan transaction. There is no explanation 19 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 offered by the defendant as to why he could not bring those persons before the Court, who would have been the best witnesses to speak about the transaction. In the absence of their evidence, we do not find any reason to disbelieve the evidence of the plaintiff and to accept the contention of the defendant.
14.2. It is interesting to note that the defendant has purchased 39 gutnas of land near LIC office of Maddur Town on 27.03.2008. He has paid advance of Rs.5 lakhs to the said vendor on 27.11.2007. Exs.P1 and P2 were between 21.11.2007 and 26.11.2007. As rightly admitted by the defendant that he was doing real estate business, we do not find any reason to accept that the plaintiff had lent money to him. Hence, the admitted evidence of the defendant stands in support of the plaintiff that the money that was paid 20 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 under Ex.P2 was used for payment of consideration. We do not find any reason to accept the contention of the defendant. Accordingly, we answer point No.(ii) in the affirmative.
Reg.Point No.(iii):
15. The recitals of Ex.P1 speak that within six months from 21.11.2007, the plaintiff was required to pay balance consideration of Rs.15 lakhs to obtain the sale deed. According to the defendant, time is the essence of contract and for this reason, he has heavily relied on the recitals of Ex.P1 only. The plaintiff has offered explanation in his evidence that within a week from the date of Ex.P1, defendant approached him for payment of further part consideration. Accordingly on 26.11.2007, he has paid Rs.13,60,000/-. It is also urged that for completion of the sale deed, the plaintiff is required to pay only Rs.1,40,000/-, which is a meager sum 21 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 compared to the total consideration of Rs.25 lakhs and defendant had sought time to get the 11-E sketch from the Revenue Authorities for registration of sale deed. Since he has not secured the 11-E sketch, the defendant cannot plead that time is the essence of contract.
15.1. The material on record do point out that out of total consideration of Rs.25 lakhs, Rs.23,60,000/- was paid to the defendant, the sum of Rs.1,40,000/- remains to be paid and for registration of the sale deed, the requirement of 11-
E sketch, for registration cannot be ignored. The evidence of the defendant does not show that he had obtained 11-E sketch for execution of the sale deed nor any material is placed before the court to show that he has obtained any sketch rather, it is the case of the defendant that the entire transaction is a loan transaction. Hence, recitals in Ex.P1 regarding six 22 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 months time for execution of the sale deed has been diluted by virtue of Ex.P2 and sketch. Accordingly, we answer point No.(iii) holding that time was not the essence of the contract.
Reg.Point No.(iv):
16. Ex.P2 is the notice dated 21.04.2008 wherein it is specifically stated that the plaintiff was ready with a sum of Rs.1,40,000/- for execution of the sale deed and the defendant was called upon to execute the sale deed within seven days. Ex.P3(a) is the postal acknowledgement for having served the notice. Since the defendant did not come forward, another notice dated 20.09.2009 as per Ex.P4 was caused calling upon the defendant to execute the sale deed by receiving the balance consideration of Rs.1,40,000/-. During the course of cross-
examination of PW-1, nothing is demonstrated that the plaintiff was not ready and willing to perform his 23 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 part of contract nor it was suggested in the cross- examination that he did not possess Rs.1,40,000/- to obtain the sale deed from the defendant. The defendant has stood by his contention that the transaction is a loan transaction. But defendant has taken advance amount of Rs.10 lakhs on 21.11.2007 and 13,60,000/- on 26.11.2007 under Exs.P1 and P2 and identified 39 guntas of land near LIC office at Maddur Town for consideration of Rs.30 lakhs and paid advance of Rs.5 lakhs on 27.11.2007. Hence, the defendant cannot blow hot and cold when he is utilizing part consideration received from the plaintiff to acquire the land in the very Maddur Town. We do not find any merit in the contention of the defendant as the amount due is only a meager sum of Rs.1,40,000/-. We do not find any reason to hold that the plaintiff was/is not ready and willing to perform his part of contract. We answer this point in favour of plaintiff.
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RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 Reg. Point No.(v):
17. We have perused the impugned judgment.
The Trial Court after evaluating the evidence has accepted the claim of the plaintiff that it is a sale transaction. The Trial Court has discussed the case laws relied upon by both parties and ultimately come to the conclusion that the agreements were part of sale of the suit property and a part consideration of Rs.23,60,000/- was paid to the defendant. The Trial Court has also recorded that the plaintiff was and is always ready and willing to perform his part of contract and failure is on the part of the defendant.
17.1. While granting the relief of specific performance, the Trial Court has recorded that the time is the essence of the contract; that the notice issued by the plaintiff is after lapse of one year five months and that there is breach of contract on the part of plaintiff. As we have already discussed above 25 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 the evidence of both parties, time is not the essence of contract; when the duty cast upon the defendant to produce the sketch for registration of the sale deed, he did not come forward and the money due is only Rs.1,40,000/-, which is a meager sum and it is demonstrated that the plaintiff is not ready with the money. Hence, the reasons recorded by the Trial court in refusing to grant specific performance, is erroneous.
17.2. The Trial Court has made a discussion about equity. When the defendant utilizes the advance money received from the plaintiff to acquire 39 guntas of land near LIC Office at Maddur Town, he has involved himself in real estate business. Hence, equity lies in favour of the plaintiff. We are of the considered opinion that the finding recorded by the Trial Court in declining to grant specific 26 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 performance lacks valid reason. Hence, it calls for interference.
18. In view of our above discussion, it is a fit case where the plaintiff is entitled to the relief of specific performance. Hence, the appeal filed by the plaintiff merits consideration and the appeal filed by the defendant is devoid of merits. In the result, the following;
ORDER
i) R.F.A.No.412/2017 filed by the plaintiff is allowed with costs;
ii) R.F.A.No.1938/2017 filed by the defendant is dismissed with costs;
iii) O.S.No.14/2009 on the file of the Senior Civil Judge, Maddur, is decreed with costs;
iv) Defendant shall execute the sale deed in favour of the plaintiff by receiving balance consideration of Rs.1,40,000/- within one month from the date of receipt of certified copy of this order; on 27 RFA NO.412 OF 2017 C/W RFA NO.1938 OF 2017 his failure, plaintiff is at liberty to obtain the sale deed through the Court process.
Sd/-
JUDGE Sd/-
JUDGE KNM/-
CT:HS