Karnataka High Court
Beena Raja Sabnis vs Jay R Sawant on 12 August, 2024
Author: Hanchate Sanjeevkumar
Bench: Hanchate Sanjeevkumar
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NC: 2024:KHC-D:11516
RSA No. 100214 of 2016
C/W RSA.Crob. No. 100003 of 2018
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 12TH DAY OF AUGUST, 2024
BEFORE
THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR
REGULAR SECOND APPEAL NO. 100214 OF 2016 (SP-)
R
C/W
REGULAR SECOND APPEAL CROB. NO.100003 OF 2018
IN RSA 100214 OF 2016
BETWEEN:
SHRI JAY R. SAWANT,
AGE: 33 YEARS, OCC: BUSINESS,
R/O: H.NO.1608, NAVI GALLI,
SHAHAPUR, BELAGAVI-590004,
DIST: BELAGAVI.
...APPELLANT
(BY SRI RAJIV D. JADHAV, ADVOCATE)
AND:
SMT. BEENA W/O RAJA SABNIS
AGE: 59 YEARS, OCC: HOUSEHOLD
Digitally AND TEACHER, R/O: NO.326/1,
signed by ROY ROAD, TILAKWADI,
BHARATHI BELAGAVI-590006,
HM
DIST: BELAGAVI
Location:
HIGH ...RESPONDENT
COURT OF (BY SRI VITTHAL S. TELI, ADVOCATE)
KARNATAKA
DHARWAD
BENCH THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION
DHARWAD
100 OF CIVIL PROCEDURE CODE 1908, PRAYING TO SET ASIDE THE
JUDGMENT AND DECREE DATED 16.12.2015, PASSED IN
R.A.NO.193/2015 ON THE FILE OF VI ADDITIONAL DISTRICT JUDGE
AND SESSIONS JUDGE, BELAGAVI AND RESTORE THE JUDGMENT
AND DECREE DATED 14.07.2015 PASSED IN O.S.NO.116/2012 ON
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NC: 2024:KHC-D:11516
RSA No. 100214 of 2016
C/W RSA.Crob. No. 100003 of 2018
THE FILE OF THE ADDITIONAL SENIOR CIVIL JUDGE, BELAGAVI AND
THIS APPEAL BE ALLOWED WITH COSTS.
IN RSA.CROB No. 100003 OF 2018
BETWEEN:
BEENA RAJA SABNIS,
AGE: 61 YEARS, OCC: TEACHER,
NOW R/O 326/1, ROY ROAD,
TILKWADI, BELAGAVI-5900006,
NO.4, DEVAKI, 241,
RANADE ROAD, TILAKWADI,
BELAGAVI-06.
...CROSS OBJECTOR
(BY SRI VITTHAL S. TELI, ADVOCATE)
AND:
JAY R SAWANT,
AGE: 35 YEARS, OCC: BUSINESS,
R/O H.NO.1608, NAVI GALLI,
SHAHAPUR, BELAGAVI-590003.
...RESPONDENT
(BY SRI RAJIV D. JADHAV, ADVOCATE)
THIS CROSS OBJECTION IS FILED UNDER ORDER 41 RULE 22
OF CODE OF CIVIL PROCEDURE, PRAYING TO SET ASIDE THE
JUDGMENT AND DECREE DATED 16.12.2015 PASSED IN
R.A.NO.193/2015 BY THE VI ADDITIONAL DISTRICT AND SESSIONS
JUDGE, BELAGAVI DIRECTING THE DEFENDANT SHALL PAY SUM OF
Rs.50,000/- WITH INTEREST AT THE RATE OF 10% FROM
07.03.2011, BY ALLOWING THE CROSS OBJECTION.
THIS APPEAL AND CROSS OBJECTION ARE, COMING ON FOR
ADMISSION, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
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NC: 2024:KHC-D:11516
RSA No. 100214 of 2016
C/W RSA.Crob. No. 100003 of 2018
ORAL JUDGMENT
1. RSA No.100214/2016 is filed by the plaintiff challenging the judgment and decreed dated 16.12.2015 passed in R.A.No.193/2015 by the VI Additional District Judge and Sessions Judge, Belagavi (for short 'the first appellate Court), and the judgment and decree dated 14.07.2015 passed in O.S. No.116/2012 by the I Additional Senior Civil Judge, Belagavi (for short, 'the trial Court').
2. RSA CROB No.100003/2018 is filed by the defendant, so far as the finding given on the plaintiff is concerned, the plaintiff was ready and willing to perform his part of the contract.
3. For the purpose of convenience, the ranking of the parties is referred to as per their status before the trial Court.
4. The defendant is the owner of the suit scheduled property and it is contended that the defendant has offered the land for sale. Accordingly, there was an agreement of sale executed between the plaintiff and defendant on 07.03.2011 for a total sale consideration of Rs.6,15,000/-, and the defendant received an earnest amount of Rs.50,000/- from the -4- NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 plaintiff and then it was agreed that the remaining balance consideration amount of Rs.5,65,000/- could be paid by the plaintiff at the time of registration of the sale deed. The attesting witnesses have also signed it after witnessing the documents. It is pleaded that the defendant has not come forward to execute the registered sale deed. Therefore, the plaintiff was constrained to file the suit for specific performance of the contract.
5. The suit was resisted by the defendant denying the execution of the agreement of sale and receipt of the earnest amount of Rs.50,000/- by the plaintiff, and thus totally denied the case of the plaintiff, praying to dismiss the suit.
6. The trial Court after framing several issues and while answering issues had held that the plaintiff has proved that the defendant has executed agreement of sale on 07.03.2011 for selling the suit property to the plaintiff for total sale consideration of Rs.6,15,000/- and received an earnest amount of Rs.50,000/- and plaintiff was ready and willing to perform his part of contract and negativing the contention of the defendant that the defendant has received the said amount of Rs.50,000/- as hand loan from the plaintiff but not with an -5- NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 intention to execute the sale deed. Therefore, the trial Court decreed the suit directing the defendant to execute registered sale deed by receiving balance sale consideration.
7. Being aggrieved by this, the defendant has preferred a regular appeal before the first appellate court, and the first appellate court has reversed the decree for specific performance of contract but has granted alternative relief of a refund of Rs.50,000/- to the plaintiff with interest at the rate of 10% per annum from 07.03.2011, till realization. The first appellate court has assigned reasons that the existence of suit property is doubtful. But held that the agreement of sale deed was executed. Therefore, it reversed the grant of a decree for specific performance, but it gave an alternative relief of refunding the earnest money.
8. Aggrieved by this, the plaintiff had preferred a regular second appeal challenging the judgment and decree passed by the first appellate court and praying to confirm the judgment and decree passed by the trial court. The defendants- Cross objector had filed cross-objection just to resist the appeal filed by the plaintiff. Therefore, it prays to dismiss the appeal -6- NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 by confirming the judgment and decree of the first appellate court.
9. Learned counsel for the appellant/plaintiff contended that both the first appellate court and the trial court concurrently held that there is an execution of agreement of sale. Therefore, when it is proved that the agreement of sale was executed, the trial Court is correct in decreeing the suit, and the first appellate Court has committed an error in reversing the judgment and decree passed by the trial Court. Further submitted that when the agreement of sale is proved stated to have been executed, the plaintiff is entitled to the relief sought for in the suit by the decree for specific performance of the contract and the plaintiff is always ready and willing to perform his part of the contract. Therefore, he prays to allow the appeal by setting aside the judgment and decree by the first appellate court.
10. On the other hand, learned counsel for the defendant/cross objector submitted that there is no execution of the agreement for sale as alleged by the plaintiff, but the plaintiff has paid a hand loan of Rs.50,000/- to the defendant and by taking advantage of the fact that the defendant received -7- NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 such a hand loan, and at the time of receiving the hand loan, the defendant had signed the documents, and those documents were wrongly considered as the agreement for sale by the trial Court and it was rightly considered by the first appellate court and therefore, justified the judgment and decree passed by the first appellate court. He further submitted that he has not received the earnest amount of Rs.50,000/- from the plaintiff and therefore, prays to reverse the findings in this regard and confirm the judgment and decree of first appellate Court on other aspects.
11. Upon hearing rival submissions made by learned counsel for the both sides, the following substantial questions of law arise for consideration:
a. "Whether, the first appellate court is justified in not granting a decree for specific performance of a contract by giving alternative relief of a refund of the amount to the plaintiff by the defendant?
b. Whether the trial court justified in granting a decree for specific performance of the contract as prayed for by the plaintiff?
c. Whether the trial court exercised its discretion judiciously under Section 20 of the Specific Relief Act?"-8-
NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018
12. The facts are that as admitted by the plaintiff, the defendant is the owner of the suit scheduled property. The suit scheduled property is an open plot formed by Belagavi Urban Development Authority (BUDA) measuring 35 x 70 ft measuring 2,450 Sq.ft. of Basavana Kudchi coming within the jurisdiction of Sub-Registrar Belagavi. Therefore, suit scheduled property is not far away from Belagavi City, but it is part and parcel of Belagavi City as the layout was formed by the BUDA. For this, as per the agreement of sale dated 07.03.2011 total consideration of plot is Rs.6,50,000/- it is case of defendant that he has received an amount of Rs.50,000/- from the plaintiff by way of a cheque.
13. In the course of cross-examination, plaintiff-PW.1 admitted that, at the time of giving evidence on 17.07.2013, the market value of the suit property was around 15 to 20 lakhs. The agreement of sale is dated 07.03.2011. The evidence was given in the month of July-2013, and the plaintiff himself admitted that the value of the suit property in the year 2013, was around 15 to 20 lakhs. Further, the plaintiff has admitted in the cross examination that he has not called upon the defendant to execute said sale deed. Further the plaintiff in -9- NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 cross examination admitted that he had an amount of Rs.2,65,000/- so as to get execution of an registered sale deed by making payment of the balance sale consideration. Therefore, the plaintiff has not proved his readiness and willingness to perform his part of the contract as per Section 16(c) of the Specific Relief Act. Therefore, though the agreement of sale might have been executed, there is evidence on the part of the plaintiff that he was ever, ready and willing to perform his part of the contract and approached the defendant, calling upon him for registration of sale deed. Therefore, there is no compliance with Section 16(c) of the Specific Relief Act (for short, 'the Act').
14. Though both the trial court and the first appellate court held that the agreement of sale dated 07.03.2011 is proved to have been executed, the grant of a decree for a specific performance contract is discretionary. Just because an agreement of sale is proved to have been executed, that fact alone is not the basis for granting a decree for a specific performance of the contract. The Court shall have to exercise its discretion judiciously, keeping in view the parameters enumerated under Section 20 of the Act. Just because an
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 agreement of sale is proved and grant of decree is lawful to do so but the Court has to exercise its discretion to determine whether there is any arbitrary or hardship is causing the defendant by decreeing the suit for specific performance of contract.
15. According to Sub section (1) of Section 20 of the Act (as it was existed before the amendments), the jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such reliefs merely because it is lawful to do so. Therefore, the first limb of sub section (1) of Section 20 of the Act vests discretionary powers in the Court, and the Court is not bound to grant such relief's merely because it is lawful to do so. The plaintiff might have proved the execution agreement of sale to be granted decree accordingly. According to the agreement of sale, it is lawful to do so, but still, discretionary powers are vested with the Court. But the discretion of the Court shall not be arbitrary but shall be sound and reasonable, guided by judicious principles, and capable of correction by the Court of appeal. Considering these parameters enumerated in Sub section (1) of Section 20 of the Act and the facts involved in the case, as per the agreement dated 07.03.2011 the total
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 consideration is Rs.6,15,000/-. But the plaintiff/P.W.1 in the course of cross examination has admitted that when he has given evidence in the month of July-2013, the value of the suit property may be around 15 to 20 lakhs. Therefore, within two years, the market value of the suit property was escalated. Assuming that in the year 2013, the property value was between 15-20 lakhs, then presently, in the year 2024, the value of the suit property would be multiplied by 5 to 6 times. Therefore, under these circumstances, if the property is transferred under the guise of a decree of specific performance of a contract for the whole rate of Rs.6,15,000/-, certainly, it is arbitrary and causes hardship to the defendants.
16. Sub section (2) of Section 20 of the Act stipulates another parameter if the grant of a decree creates an unfair advantage over the defendant by the plaintiff, then discretionary power cannot be exercised in favor of the plaintiff. Therefore, considering the present facts as discussed above, if the decree is passed for specific performance of contract for Rs.6,15,000/- then certainly it would amount to unfair advantage over the defendant by the plaintiff. Therefore, under these circumstances, the trial court is not justified in decreeing
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 the suit. Whereas the first appellate court has correctly applied the principles of law as enumerated and discussed above and exercised its discretion correctly.
17. The plaintiff has not pleaded that he was ready and willing to perform his part of contract as per Section 16(c) of the Specific Relief Act. The plaintiff ought to have pleaded that he was ready and willing to perform his part of contract, but that is not found in the case. Section 16(c) of the Specific Relief Act reads as follows:
16. Personal bars to relief. Specific performance of a contract cannot be enforced in favour of a person-
(a) xxx
(b) xxx
(c)[who fails to prove] that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
18. Therefore, it is necessary and essential on the part of the plaintiff to plead his readiness and willingness and accordingly has to lead evidence in proving his readiness and willingness, but that is not the case. Therefore, in this regard,
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 the plaintiff's suit cannot be entertained for the grant of a decree of specific performance of contract.
19. My above view are fortified by the Hon'ble Supreme Court in the case of U.N.Krishnamurthy Vs. A.M.Krishnamurthy1, at para 46 is reproduced as fallows:
46. It is settled law that for relief of specific performance, the Plaintiff has to prove that all along and till the final decision of the suit, he was ready and willing to perform his part of the contract. It is the bounden duty of the Plaintiff to prove his readiness and willingness by adducing evidence. This crucial facet has to be determined by considering all circumstances including availability of funds and mere statement or averment in plaint of readiness and willingness, would not suffice.
20. The Division Bench of this Court in case of Punnya Akat Philip Raju and others Vs. Dinesh Reddy 2 at para No.32 to 38 are held as follows:
32.The proof of readiness necessarily means demonstration of financial ability or capacity to pay the balance sale consideration and take the sale deed. When a person on oath states in the witness box that he is ready with the requisite funds, he must produce some evidence to prove his possession of the required funds. The explanation makes it clear that the proof of requisite funds does not mean he should produce the currency before the Court or he should deposit the money in Court. But at the same time, mere statement on oath in the witness box that he is possessed of the e requisite funds would also do 1 (2022) SCC 3361 2 2016 (3) AKR 836
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 not prove possession of funds. The said proof has to be necessarily by way of documentary evidence. The reason being, if, the payment is to be made sin cash i.e., by handing over currency, currency is a documentary evidence. The explanation makes it clear that to prove readiness, the plaintiff need not produce the currency before the Court. If the balance consideration is to be deposited in the Court such a deposit is also evidenced by documentary evidence, - which is also not necessary by virtue of the explanation.
33. Money does not exist in vacuum. Money has to be necessarily in the form of physical object. It is in the nature of document. Money is deposited in banks. Money is in the nature of securities. Money is capable of being raised from borrowing. Money could be raised by sale of properties movable or immovable. When a person claims that he is possessed sufficient funds, he has to produce some documentary evidence, which proves his capacity to raise the funds or he possess the funds. What are the documents which, the plaintiff can produce to prove his capacity? It may be a passbook issued by a Bank where he has kept the balance sale consideration ready for payment. If he has invested his money by way of securities, he has to produce those securities before Court to show that any time he can encash the same and pay the balance consideration. Similarly, if he has kept the money in Fixed Deposit, in a Bank, that deposit receipt is the proof of his ability to raise the balance sale consideration. If he intends to borrow money from a Nationalized Bank or from his employer or from any other financial institution, it has to be demonstrated by producing a request for such financial assistance in writing, sanctioning of the said loan which has to be necessarily in writing. These instances are only illustrative. There may be several other modes by which the requisite funds are raised. But all of these instances are evidenced by documentary evidence.
34. Therefore, mere stepping into the witness box and saying on oath that he is ready with the balance sale consideration or that he is going to borrow money from any financial institution or that he has got sufficient funds in his Bank accounts or that he has kept money in Fixed Deposit, without that oral evidence being supported by documentary evidence will not prove the plaintiff's readiness to pay the
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 balance sale consideration.. It is immaterial whether such oral evidence is challenged in cross-examination or not. The plaintiff has to prove to the satisfaction of the Court that he possessed the requisite funds. He has to produce such documentary evidence, which would enable the Court to come to the conclusion that plaintiff is ready with the requisite balance sale consideration to complete the sale transaction. If no evidence is adduced in this regard by way of documentary evidence, no prudent man would come to the conclusion that the person has proved the possession of funds. In the absence of any such documentary evidence being produced, it is a case of plaintiff's case being not proved. Plaintiff can- not expect the Court to pass a decree for specific performance of a contract of sale when the plaintiff has not proved his readiness to perform his part of the contract.
35. Therefore, in a case arising under Section 16(c) of the Specific Relief Act, the obligation is cast on the plaintiff to prove that he was ready with the balance sale consideration. When the statute requires the plaintiff must plead and prove his readiness and willingness to perform his part of the contract and that readiness refers to the possession of the requisite funds, there is an obligation cast on that person, who has to prove the possession of funds to produce documents to show possession of funds by him. Though he is not expected to tender or deposit the cash before the Court, he has to produce such evidence to prove his financial capability. Only on production of such documentary evidence, on verification and appreciation of those documents, Court could come to the conclusion that the plea of readiness is proved. Mere assertion, on other oath that he is ready with the balance sale consideration, even if it is not challenged in the cross-examination; is not the proof of the plaintiff's readiness with the balance sale consideration. He should produce such evidence to show either he possess the requisite funds or he is capable of raising such funds within the time stipulated. If such evidence is not forthcoming it is a case of, the plaintiff's case being not proved.
36. The Apex Court had an occasion to will consider the contention that when there is no denial of readiness and willingness by the defendant either in the written statement or in the evidence, there is no obligation on the part of the plaintiff to produce any documentary evidence to prove his
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 readiness. The Supreme Court in the case of J.P. Builders & another v. h A. Ramadas Rao reported in (2011) 1 SCC 429:
(AIR 2011 SC (Civ) 230) Paras 8, 9 & 12) after referring to Section 16 of the Specific Relief Act has held at para-21 as under:
21. Among the three clauses, we are more concerned about clause (c). 'Readiness and Willingness' is enshrined in clause(c) which was not present in the old Act of 1877.
However, it was later inserted with the recommendations of the 9th Law Commission's Report. This clause provides that the person seeking specific performance must prove that he has performed or has been ready and willing to perform the essential terns of the contract which are to be performed by him.
At para 22 it is held as under:
The words 'ready' and willing' imply that the person was prepared to carry out the terms of the contract. The distinction between 'readiness' and 'willingness' is that the former refers to financial capacity and the latter to the conduct of the plaintiff wanting performance. Generally, readiness is backed by willingness.
At paras-25, 26 and 27 it is held as under:
25. Section 16(c) of the Specific Relief Act, 1963 mandates "readiness and willingness" on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance, the plaintiff must allege and prove a continuous "readiness and willingness" to perform the contract on his part from the date of the contract. The onus is on the plaintiff.
26. It has been rightly considered by this Court in R.C.Chandiok v.Chuni Lal Sabharwal (AIR 1971 SC 1238) that "readiness and willingness" cannot be treated as a straitjacket formula. This has to be determined from the entirety of the facts and circumstance relevant to the intention and conduct of the party concerned.
27. It is settled law that even in the absence of specific plea by the opposite party, it is the mandate of the statute that the plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is non-compliance with this statutory mandate, the Court is not bound to grant specific performance and is left with no other alternative but
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 to dismiss the suit. It is also clear that readiness to perform the part of the contract has to be determined. Ascertained from the conduct of the parties.
37. Order XIV of the Code of Civil Procedure deals with the settlement of issues and determination of suit on issues of law or on issues agreed upon. Order XIV Rule 1(3) states how the settlement of issue is framed in a suit. It provides each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue. Issues may be of fact or of law.
38. Section 16(c) of the Specific Relief Act is an exception to this general rule. Unless a person avers and proves that has performed or has always being ready and willing to perform the essential terms of the contract which are to be performed by him, he is not entitled to enforce the specific performance of the contract. In other words, before a Court can grant a decree for specific performance, this mandatory requirement of the status has to be complied with by the plaintiff irrespective of the defence taken by the defendant. Only if this mandatory requirement is complied with, the Civil Court gets jurisdiction to grant a decree for specific performance. If this requirement is not met, the Civil Court has no jurisdiction to grant a decree for specific performance. Therefore, it is obligatory on the part of the Court, that, in every suit for specific performance to frame an issue regarding readiness and willingness to perform the essential terms of the contract by the plaintiff irrespective of the fact whether the defendant has specifically denied the allegations in the plaint regarding readiness and willingness to perform or not. Therefore, what follows is that a plaintiff, who comes to the Court seeking a decree for specific performance must aver and prove that he has performed or is always ready and willing to perform the essential terms of the contract which are to be performed by him. Whether the defendant denied those allegations are not in the written statement, the Court is under an obligation to frame an issue regarding readiness and willingness on the part of the plaintiff to perform the terms of the contract. Once that issue is framed, the burden of proving readiness and willingness is on the plaintiff. It is not dependent upon the admission of the defendant either in the written statement or in the evidence. Unless the plaintiff proves to the satisfaction of the Court that
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 he was ready and willing to perform his part of the contract, the Court gets no jurisdiction to pass a decree for specific performance. Therefore, the argument of the learned Counsel for the plaintiff, that, as there was no serious cross examination of P.W.1 regarding readiness and willingness, the oral evidence of P.W.1 that he was ready and willing to perform his part of the contract was sufficient for the trial Court to decree the suit for specific performance is unfounded. The plaintiff has not produced a scrap of paper to show how he propose to raise the balance sale consideration of Rs.65 lakhs, where he has kept that money, is it in any bank or has he formulated a scheme for raising the funds and whether he actually possessed of the said funds. In the absence of such material, which has to be necessarily in the form of documentary evidence, not place before the Court, the trial Court committed a serious error in holding that the plaintiff was ready and willing to perform his part of the contract. There is absolutely no discussion in the entire judgment on this aspect and the sais finding is not supported or based on any legal evidence on record. In that view of the matter, we are of the view that the finding recorded by the trial Court that the plaintiff was ready and willing to perform his part of the contract is vitiated and is hereby set aside.
21. The above said view is also once again fortified by the Division Bench of this Court in the case of C.Vasudevamurthy Vs. S.S.Amarnath and others3 .
22. Further the Supreme court in the case of Kamal Kumar Vs. Premlata Joshi,4 at para 10 is held as follows:
10. It is a settled principle of law that the grant of relief of specific relief. The material questions, which are required to be gone into for grant of the relief of specific performance, are First, whether there exists a valid and concluded contract 3 2021 (6) KLJ 345 (DB) 4 2019 AIR SCC (Civil) 1103
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 between the parties for sale/purchase of the suit property; Second, whether the plaintiff has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract; Third, whether the plaintiff has, in fact, performed his part of the contract and , if so, how and to what extent and in what matter he has performed and whether such performance was in conformity with the terms of the contract; Fourth, whether it will be equitable to grant the relief of specific performance to the plaintiff against the defendant in relation to suit property or it will cause any kind of hardship to the defendant and, if so, how and in what manner and the extend if such relief is eventually granted to the plaintiff; and lastly, whether the plaintiff is entitled for grant of any other alternative relief, namely, refund of earnest money etc. and, if so, on what grounds.
23. Further in the case of Ramesh Chand (Dead) through L.Rs Vs. Asruddin (Dead) through LR's and another5 at para 8 and 9 are held as follows:
8. Section 20 of Specific Relief Act, 1963, provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so, However, the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles. Sub-section(2) of Section 20 of the Act provides the three situations in which the court may exercise discretion not to decree specific performance. One of such situation is contained in clause (a) of sun-section (2) of the Section which provides that where the terms of the contract or the conduct of the parties at the time of entering into the contract of the other circumstances under which the contract was entered into or such that the contract though not voidable, gives the plaintiff unfair advantage over the defendant, the decree of specific performance need not be passed. It is pertinent to mention here that in the present case, though execution of agreement dated 21.06.2004 between the 5 AIR 2016 SC (Civil) 434
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 parties is proved, but it is no where pleased or proved by the plaintiff that he got redeemed the mortgaged land in favour of defendant No.2 in terms of the agreement, nor is it specifically pleased that he was ready and willing to get the property redeemed from the mortgage.
9. In the above facts and circumstances of the case and the judicial principle discussed above, we are of the opinion that it is a fit case where instead of granting decree of specific performance, the plaintiff can be compensated by directing the appellant to pay a reasonable and sufficient amount to him. We are of the view that mere refund of rupees four lacs with interest at the rate of 8% per annum, as directed by the trial court, would be highly insufficient. In out considered opinion, it would be just and appropriate to direct the appellants(Legal Representatives of original defendant No.1, since died) to repay rupees four lacs along with interest at the rate of 18% per annum from 21.06.2004 till date within a period of three months from today to the L.Rs. of respondent No.1 (mentioned in I.A.No.______ of 2015 dated 07.09.2015). If they do so, the decree of specific performance shall stand set aside. We clarify that if the amount is not paid or deposited before the trial court in favour of the L.Rs. of respondent No.1 within a period of three months, as directed above, the decree of specific performance shall stand affirmed. We order accordinglu.
24. Therefore, the grant of a decree of specific performance under Section 20 of the Act is discretionary and equitable relief. If hardship is causing to the defendants, then such discretion and equitable relief certainly cannot be exercised in favour of plaintiff. In the present case, in the year 2011, the sale consideration was Rs.6,15,000/- but in the year 2014, due to escalation of price if said property is transferred under the guise of a decree of specific performance of a
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 contract, certainly it would be a great hardship to the defendant. Besides, the decree is arbitrary. Further for considering aspects of hardship, just because there are no pleadings that cannot be ground to reject the plea of hardship. The factors of hardship can be gathered by surrounding circumstances by taking judicious notice of it.
25. Further, under the guise of a decree of specific performance of a contract, eventually the property is transferred to the plaintiff, and the sum of the amount also amounts to an unfair advantage over the defendant by the plaintiff. It is quite natural that the value of the property has increased due to inflation, but the plaintiff wants to get the property through an agreement that was executed some year ago, which definitely amounts to an unfair advantage over the defendant. Therefore, while considering the case for the decree of specific performance of the contract, the escalation of the price of the property shall also be taken into consideration. The escalation of property or commodities is not in the hands of the party, it is a natural phenomenon. Therefore, when value of property is more compared to previous years and the plaintiff is still insisting transfer of the property under the guise of a
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 decree of specific performance of contract in respect of suit scheduled property certainly amounts to causing hardship to the defendants and amounting to unfair advantage over the defendants by the plaintiff, and moreover, it is an arbitrary exercise of powers but not a discretionary one. Therefore, applying principles of law laid down by the Hon'ble Apex Court and the Division Bench stated (supra) that observations and findings made by the first appellate court are correct, and the first appellate court has rightly reversed the judgment and decree of the trial court. Therefore, the judgment and decree passed by the first appellate court need affirmation by this Court.
26. Even considering these aspects, if the plaintiff wants the property for his residential purpose, there is no evidence that he is making a venture on it. For the same purpose, the defendant also wants the said property. Therefore, comparatively refers the case is considered if a decree of specific performance of a contract is granted, then it amounts to exercising unfair powers and causes hardship to the defendants. Besides amounting to unfair advantage over the defendant by the plaintiff, on this count also judgment and
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 decree passed by the first appellate Court are to be justified. Accordingly answered substantial question of law. Therefore, the appeal is found to be devoid of merit. Hence, the appeal is liable to be dismissed.
27. Both courts below have concurrently held that the agreement of sale is proved. Upon considering this aspect regarding proof of agreement of sale, there is no need to interfere with this, and therefore the first appellate court is justified in granting alternative relief of refund of earnest money to the plaintiff. Therefore, in this regard, the judgment and decree passed by the first appellate court are confirmed, and accordingly, cross-objection is also liable to be dismissed.
28. Hence, I proceed to pass the following:
ORDER a. RSA No.100214/2016 is dismissed.
b. RSA CROB No.10003/2016 is dismissed.
c. The judgment and decreed dated 16.12.2015 passed in R.A.No.193/2015 by the VI Additional District Judge and Sessions Judge, Belagavi, which reversed the judgment and decree dated 14.07.2015 passed in O.S. No.116/2012 by the I Additional Senior Civil Judge, Belagavi is confirmed.
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NC: 2024:KHC-D:11516 RSA No. 100214 of 2016 C/W RSA.Crob. No. 100003 of 2018 d. No order as to costs.
e. Draw decree accordingly.
Sd/-
(HANCHATE SANJEEVKUMAR) JUDGE AC CT:GSM List No.: 2 Sl No.: 6