Karnataka High Court
T Shashidhar S/O Lt P H Thippeswamy vs S M Manjunath S/O S M Vivekananda on 12 September, 2014
Bench: K.L.Manjunath, A.V.Chandrashekara
1 RFA NO.1162/2007
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 12TH DAY OF SEPTEMBER 2014
PRESENT
THE HON'BLE MR. JUSTICE K.L.MANJUNATH
AND
THE HON'BLE MR. JUSTICE A.V.CHANDRASHEKARA
R.F.A. NO.1162/2007
BETWEEN:
T SHASHIDHAR
S/O LATE P H THIPPESWAMY
AGE :37 YRS
R/O D NO.726/1, IST STAGE
SHIVAKUMARASWAMY, BADAVANE
DAVANGERE CITY-577001.
... APPELLANT
(By Sri: M S HARISH KUMAR, ADV. )
AND:
1. S M MANJUNATH
S/O S M VIVEKANANDA
AGED ABOUT 29 YEARS
R/O MEGALAPET, 7TH WARD
HARAPANAHALLI TOWN
HARAPANAHALLI,
DAVANGERE-577001.
2. A B ANJANAPPA
S/O BHEEMAPPA
2 RFA NO.1162/2007
AGED ABOUT 47 YRS
D C M 614, KSRTC
CONDUCTOR, DAVANGERE DEPOT
DAVANGERE-577001
... RESPONDENTS
(BY SRI: SHIVAKUMAR.S. ADV FOR R1 &
R2 SERVED)
RFA FILED U/S 96 OF CPC AGAINST THE
JUDGEMENT AND DECREE DATED 06.01.2007 PASSED IN
OS.NO.267/2005 ON THE FILE OF THE II ADDL.CIVIL
JUDGE (SR.DN.) DAVANGERE, DECREEING THE SUIT OR
SPECIFIC PERFORMANCE AND DECLARATION.
THIS APPEAL HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 03.09.2014 COMING ON FOR
PRONOUNCEMENT OF ORDERS THIS DAY,
A.V.CHANDRASHEKARA, J., DELIVERED THE FOLLOWING:
JUDGMENT
The present appeal filed under Section 96 of CPC by defendant No.2 of an original suit bearing O.S.267/2005, which was pending on the file of II Addl. Civil Judge (Sr.Dn.), Davanagere is directed against the decree granted in favour of respondent No.1/plaintiff on 6.1.2007. Respondent No.1 herein was the sole plaintiff and respondent No.2 is the defendant No.1 in the said suit.
3 RFA NO.1162/2007
2. Parties will be referred to as per their ranking before the Trial Court.
3. Defendant No.1-A.B.Anjannappa was the absolute owner of the schedule property measuring East-West 30 feet, North-South 29 feet bearing house No.1339/1 katha No.1301 of Nituvalli in Davanagere City. According to the plaintiff, defendant No.1 is stated to have executed an Agreement to Sale in favour of plaintiff on 31.5.2004 agreeing to sell the entire site and house put up thereon to the plaintiff for a total consideration of Rs.3,00,000/-. On the same day, defendant No.1 is stated to have received a sum of Rs.2,50,000/- by executing an agreement of sale in the presence of witnesses, who have attested to that document.
4. According to the plaintiff, defendant No.1 had agreed to receive balance sale consideration of 4 RFA NO.1162/2007 Rs.50,000/- and to execute a regular sale deed within a period of 3 years from that date. The plaintiff had called upon the defendant No.1 to execute the regular sale deed on several occasions orally. Inspite of the same, he postponed the same on one ground or the other. Hence, he got issued a legal notice on 22.12.2004 and 12.1.2005 and they were not received purposefully by the defendant No.1. The plaintiff is stated to be ready and willing to perform his part of contract. Later on he came to know that defendant Nos.1 and 2 have colluded with each other to create a document i.e., sale deed dated 28.7.2005 in respect of suit property and therefore, he was forced to file a suit for specific performance of contract.
5. Defendant No.1 chose to file a detailed written statement denying all the material averments in regard to execution of Agreement of Sale dated 31.5.2004 and receipt of Rs.2,50,000/- as advance and 5 RFA NO.1162/2007 agreeing to receive the balance amount of Rs.50,000/- within a period of 3 years from that date. He had called upon the plaintiff to prove the contents of the plaint strictly. According to him, the document relied upon by the plaintiff is not an out and out document of evidencing agreement to sell, but it was executed by him as a security relating to receipt of Rs.1,50,000/- as loan from the plaintiff through one Kotraiah in the month of May 2005. It is his case that plaintiff was not at all known to him. He was introduced by his uncle namely Kotraiah, a document writer and stamp vendor at Harapanahalli Town, who is known as a money lender. The said Kotraiah is stated to have paid the amount to him. Since Kotraiah insisted for execution of the document as security, a nominal Agreement of Sale was executed in favour of plaintiff at the instance of Kotraiah.
6 RFA NO.1162/2007
6. According to him, he has only received Rs.1,31,000/- and balance amount of Rs.19,000/- was not at all paid in respect of assurance by Kotraiah. The said money lender is not stated to have kept up his promise. The document relied upon by the plaintiff is stated to be a nominal document. The said Kotraiah is stated to have received interest upto November 2004 and insisted for payment of the principal amount also. Therefore, his Banker SBI, APMC Yard insisted him to discharge the entire debt due by him to it as the property was mortgaged by him. In order to discharge the debt, he has sold the property to the defendant No.2 through a registered sale deed dated 28.7.2005 and Kotraiah was very much aware of these dealings. He has averred that he would be prepared to pay back the amount along with the interest to the said money lender. It is his case that he is a poor man, eking his livelihood by working as a Conductor and he has no 7 RFA NO.1162/2007 source of income. The suit is bad either in law or in facts. Hence, he prayed for dismissal of the suit.
7. Defendant No.2 has denied all the plaint averments. According to the him, he is the bonafide purchaser having purchased the property for a sum of Rs.3,00,000/- from defendant No.1. The allegation that defendant Nos.1 and 2 by colluding with each other have created the document dated 28.7.2005 is specifically denied. He has averred that he has applied all the required care and caution at the time of purchasing the property and he is stated to have examined all the documents relating to the property in question that too after obtaining encumbrance certificate. Hence, he has prayed for dismissal of the suit.
8. On the basis of the above pleadings, following issues came to be framed by the Trial Court: 8 RFA NO.1162/2007
1) Whether the plaintiff proves that the defendant No.1 had executed an Agreement to Sale on 31.5.2004 for Rs.3,00,000/- in favour of the plaintiff?
2) Whether the plaintiff proves that he has paid Rs.2,50,000/- to the defendant Noa.1 as part payment of sale consideration on 31.5.2004?
3) Whether the plaintiff proves that he is always ready and willing to perform his part of contract?
4) Whether the defendants proves that the defendant No.1 has borrowed loan of Rs.1,31,000/- from the plaintiff on 31.5.2004 by executing an agreement of sale in favor of plaintiff?
5) Whether the defendant No.2 proves that he is a bonafide purchaser of the suit schedule property for a valuable consideration?
6) What order or decreed?
9. On behalf of the plaintiff, plaintiff is examined as PW-1 and two other witnesses have been examined as PW-2 and 3 and in all 14 exhibits have 9 RFA NO.1162/2007 been marked. On behalf of the defendants, defendant No.2 is examined as DW-1 and one more witness has been examined as DW-2 and as many as 3 exhibits have been marked.
10. After hearing the learned Counsel for the parties, the learned Judge of the trial Court has answered issues-1, 2 and 3 in the affirmative and issues-4 and 5 in the negative and consequently, decreed the suit vide judgment dated 6.1.2007. It is this judgment and decree which is called in question on various grounds as set out in the appeal memo.
11. We have heard the learned counsel for the parties. After going through the records, following points have been raised for consideration:
1) Whether the Trial Court is justified in holding that Ex.P-1 is an out and out agreement of sale?
10 RFA NO.1162/2007
2) Whether the Trial Court is justified in
holding that defendant No.2 is not a
bonafide purchaser of the schedule
property?
3) Whether any interference is called for, if so
to what extent?
12. Point No.1: Suit of the plaintiff is one for specific performance of contract based on an alleged agreement of sale dated 31.5.2004 vide Ex.P-1 stated to be have been executed by defendant No.1 in his favour of plaintiff agreeing to sell the entire suit schedule property i.e., the vacant suit house thereon for a total consideration of Rs.3,00,000/- . It is the case of the plaintiff that he had sufficient amount at his disposal and therefore paid a sum of Rs.2,50,000/- as advance and defendant No.1 had agreed to receive the balance consideration of Rs.50,000/- from him within 3 years from the date of 11 RFA NO.1162/2007 agreement to sale and then to execute the regular sale deed.
13. Burden is upon the defendants to prove that plaintiff had not intended to purchase the property from defendant No.1 and that plaintiff had no money at his end and that document marked at Ex.P-1 is only a document executed as security for having borrowed a sum of Rs.1,31,000/- from one Kotraiah on 31.5.2004. Ofcourse, the Trial Court has held that Ex.P-1, agreement of sale is a registered document for all practical purposes. Much stress has been laid upon the fact of registration of Ex.P-1 before the jurisdictional Sub-Registrar, Davanagere.
Sri.D.S.Shamsunder is the Scribe of the document and Sri.G.M.Pradeep and Sripathi.H are the attestors to the said document. Sri.G.M.Pradeep is examined as 12 RFA NO.1162/2007 PW-3 and Sri.D.S.Shamsunder, scribe of the document is examined as PW-2.
14. The case sought to be presented by the defendants is that one person by name Kotraiah is the maternal uncle of plaintiff and he is a deed writer and that it was Kotraiah, who actually lent money to defendant No.1. Shamsundar has feigned ignorance about Kotraiah. Suggestion put to him that Kotraiah is known to him has been specifically denied. Pradeep examined as PW-3 has deposed that he knows Kotraiah and that the said Kotraiah is a stamp vendor. He has denied to the suggestion put to him that there was a loan transaction between plaintiff and defendant No.1 and Ex.P-1 is the document executed for security for the said loan transaction. But he has specifically admitted that Manjunath does not own any immovable property in Harapanahalli 13 RFA NO.1162/2007 and that he is in good terms with the plaintiff. There is a reference in Ex.P-1 that a sum of Rs.2,50,000/- was paid to defendant No.1 in the presence of the attestors and PWs-2 and 3 have deposed to that fact.
15. Taking into consideration that no useful admissions have been culled out from the mouth of PW-1 to doubt veracity of Ex.P-1, the Trial Court has held that Ex.P-1 is proved that it is an agreement of sale.
16. Some useful admissions have been culled out from the mouth of PW-1 while cross examining him. This is focused about the financial inability of the plaintiff to possess Rs.2,50,000/- and to pay the same to defendant No.1 as on the date of executing Ex.P-1. In the light of issue No.4 being framed by the Trial Court, we will have to see whether the defendant No.2 has been able to probabalise that Ex.P-1 is a 14 RFA NO.1162/2007 document executed as security by the defendant No.1 in regard to some loan transaction. Admittedly, plaintiff is a resident of Harapanahalli Town of Davanagere District. Kotraiah is his maternal uncle who is a stamp vendor and deed writer in Harapanahalli. Admittedly, plaintiff does not own any immovable property. He is working as an Assistant under a document writer in Harappahahalli. It is his case that his annual income was Rs.50,000/- p.a. He has feigned ignorance to the suggestion put to him that his maternal uncle Kottraiah does money lending transaction. Though he has deposed in his cross examination that oral talks in respect of sale transaction took place one month earlier, he has specifically admitted that he does not have any document to show that he possessed Rs.2,50,000/-. Further, admissions have been culled out from the mouth of PW-1 that he did not have remaining 15 RFA NO.1162/2007 amount to pay balance sale consideration and stamp duty and registration fee as on the date of executing Ex.P-1. If plaintiff did not have money to pay the balance consideration and bear the registration fee and stamp duty, 3 years time would not have been mentioned in Ex.P-1 for executing the regular sale deed.
17. In point No.5 of page 2 of Ex.P-1 it is mentioned that regular sale deed would be executed by defendant No.1 after receiving balance sale consideration of Rs.50,000/-. During his cross examining done on 9.8.2006, he has deposed that his monthly income was ranging from Rs.1,200/- to 1,500/- four years earlier. All these would speak in volumes about his financial capacity to enter into an agreement for a sum of Rs.2,50,000/- because it was not possible for a person to pay advance sale 16 RFA NO.1162/2007 consideration of Rs.2,50,000/- in lumpsum when his income was ranging from Rs.1,200/- to 1,500/- per month.
18. Admittedly, the property is an urban property situated in Davanagere Town. If really plaintiff had an intention to purchase the property, 3 years time would not have been mentioned within which defendant No.1 was expected to execute the sale deed. In the light of financial inability of the plaintiff as on the date of executing Ex.P-1 to pay balance amount and to bear the stamp duty and registration fee, reasonable inference that could be drawn is that transaction in question was not an out and out sale transaction.
19. In a civil case, the evidence will have to be assessed on the touch stone of intrinsic probabilities. The learned Judge of the Trial Court is more swayed 17 RFA NO.1162/2007 away by the factum of registration of Ex.P-1. Nothing comes in the way of the Court to know as to whether the document in question is really an out and out agreement of sale. Though, defendant No.2 has not been able to probabalise that defendant No.1 has borrowed Rs.1,50,000/- only from through Kottraiah and only a sum of Rs.1,31,000/- was received by him, the fact of the matter is that document in question is only a security for the amount advanced by the plaintiff. Plaintiff has been able to satisfactorily prove that a sum of Rs.2,50,000/- was paid as loan to defendant No.1 and Ex.P-1 is the outcome of the loan transaction.
20. What is argued by the learned counsel for the plaintiff is that the time is not the essence of contract in respect of immovable properties and therefore, mentioning of 3 years time in Ex.P-1 will 18 RFA NO.1162/2007 not take away the rigor of the document. We are unable to accept the said contention for the reason that in respect of immovable properties of urban area, time will be essence of contract. This assumes more importance for the reason that value of urban properties gets escalated drastically over a period of time. In the case of Chand Rani v. Kamal Rani reported in AIR 1993 SC 1742, a constitutional Bench of the Hon'ble Apex Court has held that in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades - particularly after 1973. Therefore, one has to be oblivious to the reality and the reality is constant and continuous rise in the values of urban properties - fuelled by large scale migration of people from rural areas to urban centres and by inflation. The said decision has been relied upon by the Hon'ble Apex Court in the case of Mrs.Saradamani 19 RFA NO.1162/2007 Kandappan v. Mrs.S.Rajalakshmi & Ors. reported in AIR 2011 SC 3234 . Infact, it is observed that the concept of time is not the essence of contract relating to immovable properties needs immediate relook.
21. In the case of hand, nothing is forthcoming as to why 3 years time was mentioned in which defendant was expected to execute the regular sale deed by receiving balance amount of Rs.50,000/- in respect of urban properties situated in Davanagere Town. This speaks something adverse about the readiness and willingness asserted by the plaintiff more particularly in the background of his low income and his inability to pool the money for paying the stamp duty and registration fee.
22. Taking into consideration the useful admissions culled out from the mouth of PWs-1 and 2 and incorporation of 3 years time to pay the balance 20 RFA NO.1162/2007 amount and inability of the plaintiff to pool the requisite amount for stamp duty and registration fee as on the date of Ex.P-1, it is difficult to accept that the document marked at Ex.P-1 is really an out and out agreement of sale. Suffice to state that on reassessment of the oral and documentary evidence, it is to be held that Ex.P-1 is a document executed as security for the amount borrowed from the plaintiff. Hence, point No.1 is answered in the negative.
23. Point No.2: Burden is upon defendant No.2 to prove that he is the purchaser for value without notice. Section 19(b) of Specific Relief Act states that any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract would be a party in a suit for relief of specific performance. 21 RFA NO.1162/2007 When a person claims to be a transferee for value without notice of original contract, burden lies upon such person that he fulfils with character. Anyhow, plaintiff is expected to make an averment that defendant No.2 is not a bonafide purchaser and he had notice of plaintiff's earlier contract with the defendant No.1. Admittedly, no notice had been got issued to defendant No.2. Notice had been got issued only to defendant No.1 on 22.12.2004 and through RPAD on 2.1.2005. First notice issued was returned on the ground that addressee was not available on the dates of the visit to his house by the postman and second notice was also returned unserved as the addressee was absent. Ex.P-12 is the copy of the sale deed executed by defendant No.1 in favour of defendant No.2 on 28.7.2005. It was applied on 9.8.2005 and obtained on the same day. This was produced along with the suit filed on 23.8.2005.
22 RFA NO.1162/2007
24. Ex.P-13 is the copy of the encumbrance certificate issued to the plaintiff by the Senior Sub- registrar, Davanagere pertaining to suit property from 1.6.2004 to 6.8.2005. On 9.8.2005 the name of Sri.S.N.Manjunath is found as purchaser of the suit property from Sri.A.B.Anjanappa vide No.1584/2004-05 which also bears mention about sale deed being executed by Anjanappa in favour of defendant No.2- Shashidhar on 28.7.2005 for a sum of Rs.3,00,000/- vide No.3149/2005-06. On the basis of Ex.P-13, the Trial Court has come to the conclusion that defendant No.1 had executed an agreement of sale in favour of plaintiff.
25. Whereas Ex.D-2 is the copy of the encumbrance certificate issued by the same Senior Sub- Registrar on 9.6.2005 to the defendant No.2 i.e., DW-1 in respect of suit property for a period of 15 years commencing from 1.4.1991 to 7.6.2005. There is an 23 RFA NO.1162/2007 entry dated 2.6.1994 about the sale of vacant site being made by one Uttamchand in favour of K.B.Chennabassappa for a sum of Rs.36,000/- and second entry is in regard to the said purchaser Channabasappa executing sale deed in respect of site in favour of defendant No.1-A.B.Anjanappa. Ex.D-2 is for a period of 15 years ending on 7.6.2005 which also covers date 30.5.2004, the date on which Ex.P-1 came into existence. No mention is found about the agreement of sale in Ex.D-2 executed by defendant No.1 in favour of plaintiff.
26. Defendant No.2 is examined as DW-1 and he has been cross examined at length. Ex.P-13 was shown to DW-1 and he has admitted that there is reference about the agreement of sale executed by defendant No.1 in favour of plaintiff. It is to be seen that sale deed executed by the defendant No.1 in favour of defendant No.2 is dated 28.7.2005. Ex.D-2 encumbrance 24 RFA NO.1162/2007 certificate issued by Senior Sub-registrar relating to suit property is dated 9.6.2005. Reasonable inference that could be drawn is that defendant No.2 had purchased the property after verifying the documents. If there had been any entry about Ex.P-1 in Ex.D-2, DW-1 could not have been considered as bonafide purchaser for value without notice.
27. Apart from this, PW-1 has admitted that soon after purchasing the property, DW-1 has availed loan and has put up the first floor. Ex.D-3 is the relevant document i.e., application form submitted by the defendant No.2 to the State Bank of India in order to avail loan of Rs.4,00,000/-. If he was not a bonafide purchaser, he would not have ventured to spend about Rs.6,10,000/- for putting up first floor on the house purchased by him. This circumstance has not at all been considered by the Trial Court.
25 RFA NO.1162/2007
28. Admittedly, defendant No.2 is a Government employee working as First Division Assistant in Housing Corporation, Davanagere. One sentence extracted from his mouth during cross examination has been blown out of proportion to hold that defendant No.2 is not a bonafide purchaser for value without notice. If Sub- Registrar of Davanagere has not mentioned about Ex.P- 1 in Ex.D-2, DW-1 cannot be found fault with. It is in this regard, DW-1 has asserted in his cross examination that he chose to purchase the property after obtaining encumbrance certificate of the property and that he had not seen Ex.P-13 prior to that.
29. Narasimha Murthy examined as DW-2 the Branch Manager of the Bank has specifically denied that the document sanctioning loan to defendant No.2 is the concocted document. Nothing has been culled out from his mouth to discredit his deposition. Suffice to state that approach adopted by the Trial Court in regard 26 RFA NO.1162/2007 to issue No.5 is incorrect and improper. The Trial Court has not properly appreciated the evidence adduced by defendant No.1 in regard to his bonafides relating to the purchase of schedule property without any notice. Initial burden cast upon defendant No.2 has been effectively discharged and this aspect has been lost sight of by the Trial Court.
30. The Trial Court has not assessed the evidence adduced by defendant No.2 as DW-1 on the touch stone of intrinsic probabilities. Since, defendant No.2 has purchased the property after due enquiry, he is required to be protected under section 19(b) of Specific Relief Act. Hence, point No.2 has to be answered in the negative.
31. In view of answering point Nos.1 and 2, the appeal will have to be allowed-in-part by setting aside the judgment and decree passed against the defendants 27 RFA NO.1162/2007 in so far as it relates to relief of specific performance. The judgment and decree of the Trial Court is modified and thereby the defendants are directed to refund a sum of Rs.2,50,000/- with interest at 6% p.a. thereon from the date of filing of suit till realization jointly and severally with proportionate costs. Liberty is to be given to the second defendant to recover the amount from the first defendant, in case he satisfies the decree by paying the decreetal amount to the plaintiff.
ORDER The appeal filed under Section 96 of CPC is allowed-in-part.
The judgment and decree dated 6.1.2007 passed in O.S.267/2005 is set aside in so far it relates to relief of specific performance. The judgment and decree of the Trial Court is modified directing the defendants to pay in all a sum of Rs.2,50,000/- (Rupees two lakhs fifty thousand only) with interest at 6% p.a. thereon from the 28 RFA NO.1162/2007 date of filing of suit till realization jointly and severally with proportionate costs to the plaintiff.
Liberty is given to the second defendant to recover the amount from the first defendant, in case he satisfies the decree by paying the decreetal amount to the plaintiff.
Sd/-
JUDGE Sd/-
JUDGE DM/-