Karnataka High Court
M. Ramappa S/O Mari Hulugappa vs Smt. Lakshmamma S/O Sura Dorreswamy on 16 December, 2022
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 16TH DAY OF DECEMBER, 2022
BEFORE
THE HON'BLE MR. JUSTICE UMESH M ADIGA
RSA NO.5058 OF 2011 (SPEC. PERF. CONT.)
BETWEEN
M. RAMAPPA S/O MARI HULUGAPPA
AGE: 39 YEARS, OCC: AGRICULTURE,
R/O KENCHANABANDI VILLAGE,
HAGARIBOMMANAHALLI TQ.,
DIST. BELLARY
...APPELLANT
(BY SRI.SHRIHARSH A. NEELOPANTH, ADVOCATE)
AND
1. SMT. LAKSHMAMMA W/O SURYA
DORRESWAMY,
AGE: MAJOR, OCC: AGRICULTURE,
R/O MALAGI THANDANAHALLI, HIIRYUR
CAMP, AMRUTH NAGAR CAMP,
DAVANAGERE-500581.
2. SOMAKKA W/O HULUGAPPA
AGE: 34 YEARS, OCC: AGRICULTURE,
R/O KENCHANABANDI VILLAGE,
TQ. HAGARIBOMMANAHALLI,
2
DIST. BELLARY-583231
3. SIDDAVVA W/O MYLAPPA
AGE: 47 YEARS, OCC: AGRICULTURE,
R/O KENCHANABANDI VILLAGE, TQ.
HAGARIBOMMANAHALLI,
DIST. BELLARY
4. SANNA CHOWDAVVA W/O HANUMANTHAPPA
AGE: 66 YEARS, OCC: AGRICULTURE,
R/O KENCHANABANDI VILLAGE,
TQ. HAGARIBOMMANAHALLI,
DIST. BELLARY
...RESPONDENTS
(BY SRI.T HANUMARADDY, ADV. FOR R2-R4-ABSENT)
(R1-SERVED)
THIS RSA IS FILED U/SEC.100 OF CPC., AGAINST THE
JUDGEMENT & DECREE DTD:18-11-2010 PASSED IN
R.A.NO.24/2010 ON THE FILE OF THE PRL. SENIOR CIVIL
JUDGE & JMFC., HOSPET, ALLOWING THE APPEAL BY SETTING
ASIDE THE JUDGMENT DTD:29-03-2010 AND THE DECREE
PASSED IN O.S.NO.64/2007 ON THE FILE OF THE CIVIL JUDGE
& JMFC., HAGARIBOMMANAHALLI, DECREEING THE SUIT FILED
FOR SPECIFIC PERFORMANCE OF CONTRACT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
04.11.2022 FOR JUDGMENT AND COMING ON FOR
PRONOUNCEMENT, THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
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JUDGMENT
This appeal is against the judgment and decree passed in RA No.24/2010 on the file of Pr. Senior Civil Judge and JMFC., Hospet dated 18.11.2010.
2. I refer the parties as per their ranking before the trial Court for the sake of convenience.
3. Plaintiff has filed OS NO.64/2007 on the file of the Civil Judge and JMFC., Hagaribommanahalli for the relief of Specific Performance of the contract. It was the case of plaintiff that defendant No.1 had executed agreement of sale dated 12.07.2007 agreeing to sell suit property bearing survey No.123/2 measuring 6 acres 20 guntas of Kenchanabandi village of H.B.Halli taluka for Rs.8,500/- per acre. According to the said agreement, defendant ought to have executed sale deed within one and half years from the date of agreement by receiving the balance of sale consideration. Plaintiff was always ready 4 and willing to perform his part of the contract. However, defendant No.1 had went on postponing the execution of the sale deed. Prior to filing of the suit, plaintiff came to know that defendant No.1 has executed registered sale deed dated 09.08.2007 in favour of defendant Nos.2 to 4. Plaintiff has issued notice to defendant Nos.1 to 4 calling upon them to execute and register sale deed in favour of plaintiff by receiving balance of sale consideration. The said notice was served on defendant Nos.2 to 4. Defendant No.1 had replied to the notice with untenable information. With these reasons plaintiff prayed to direct the defendant Nos.1 to 4 to execute the registered sale deed in terms of agreement dated 12.07.2007 in favour of plaintiff.
4. Defendant No.1 remained exparte before the trial Court. Defendant Nos.2 to 4 have contended that defendant No.1 has sold suit property to them by receiving consideration of Rs.1,17,000/- on 09.08.2007 and defendant nos.2 to 4 have been in possession of the suit 5 property. They denied all other averments of the suit and prayed to dismiss the suit.
5. Learned trial Judge framed necessary issues basing on the pleadings of the parties.
6. Plaintiff examined PW1 to PW6 and got marked Ex.P1 to P10. Defendant Nos.2 to 4 examined DW1 to DW3 and got marked Ex.D1 to D3.
7. Learned trial judge appreciating the pleadings and evidence of both the parties, decreed the suit by judgment and decree dated 29.03.2010 and directed defendant No.1 to execute the sale deed.
8. Defendant Nos.2 to 4 have challenged the said judgment before the Senior Civil Judge Court, Hospet in RA No.24/2010. The learned First Appellate Judge after reconsidering the evidence on record by impugned judgment allowed the appeal and directed the defendant No.1 to refund earnest money with interest at the rate of 6 6% per annum from the date of agreement of sale till the date of payment of amount. Same is challenged in the present Regular Second Appeal.
9. Appeal was admitted to consider the following substantial question of law:
"Whether the First Appellate Court has committed a serious error in reversing the considered judgment of the trial Court, without there being an issue regarding the defendant Nos.2 to 5 being the bonafide purchasers of the schedule properties for value without notice and thus judgment of the First Appellate Court has become perverse and illegal?"
10. I have heard the arguments of learned advocate for appellant.
11. Learned advocate for appellant vehemently contended that both the Courts below have held that defendant No.1 had executed an agreement of sale in 7 favour of plaintiff and received part of the amount of sale consideration. Plaintiff was always ready and willing to perform his part of contract. Defendant No.1 within a period of one month from the date of execution of agreement of sale has sold the suit property in favour of defendant Nos.2 to 4. Defendants No.2 to 4 in the cross examination of DWs.1 to 3 admitted that plaintiff had been in possession of the suit property. Therefore, they are not bonafide purchasers of the suit property. It was a collusive transaction between defendant Nos.1 and 2 to 4. The First Appellate Court has not considered the hardship caused to the plaintiff by refusing the relief of specific performance of the contract. The First Appellate Court without any grounds interfered in the findings of the trial Court. Trial Court considering all the facts and evidence on record, rightly decreed the suit. However, First Appellate Court on the basis of assumptions and presumptions reversed the said 8 finding which is erroneous. With these prayed to allow the appeal.
12. None argued, on behalf of the respondent Nos.2 to 4.
13. The main party in this case is defendant No.1. He remained exparte throughout. He had not denied either execution of agreement of sale in favour of plaintiff or in favour of defendant Nos.2 to 4. The trial Judge as well as First Appellate Judge considering the evidence of PW1 to PW6, concurrently held that defendant No.1 had executed agreement of sale dated 12.07.2007 in favour of plaintiff and received advance amount of Rs.25,000/-.
14. The First Appellate Judge held that plaintiff was not ready and willing to perform his part of contract and learned First Appellate Judge has assigned his own reasons to come to the said conclusion, though, the trial judge has held that plaintiff was always ready and willing to perform 9 his part of the contract. Ex.P.1 shows that it was executed on 12.07.2007 and it was also agreed that within one and half year from the date of said agreement, defendant No.1 has to execute the sale deed by receiving balance sale consideration. It is not mentioned in the Ex.P1 about the difficulty of either plaintiff or defendant No.1, to conclude the said transaction at the earliest or even it is not mentioned about hurdle to get execute registered sale deed on the date of the agreement of sale. It indicates that probably plaintiff had no sufficient money to pay balance amount of sale consideration. Therefore, one and half year time was taken to conclude the said sale transaction. PWs.1 to 6 have not explained about granting one and half year time to conclude said transaction. It indicates that plaintiff was not ready and willing to perform his part of contract.
15. Terms of Ex.P.1 shows that plaintiff had agreed to purchase the property at the rate of Rs.8500/- per acre 10 and total sale consideration was Rs.55,250/-. Within a period of one month from Ex.P.1, the very same property was sold for Rs.1,17,000/- to defendant Nos.2 to 4 i.e. more than double the amount of sale consideration fixed in Ex.P.1. Though, it was not pleaded, during the course of cross examination of DWs.1 to 3, Plaintiff has suggested that he had been in possession and cultivation of the suit property on lease i.e. sharing of crops prior to Ex.P.1. DWs.1 to 3 pleaded ignorance about the same. From the said suggestion, it appears that Ex.P1 might be executed as security document for obtaining amount from defendant No.1 for giving the land on lease and it was not executed for sale of land.
16. Without pleading, plaintiff has cross examined DWs. 1 to 3 that they had knowledge about the Ex.P1 and they pleaded ignorance about it. It was not brought out in the cross examination of DWs. 1 to 3 that defendant No.1 was related to defendant nos.2 to 4 are very well known to 11 them. On the contrary, in the cross examination of DWs.1 to 3,it was brought out that defendant Nos.2 to 4 have not seen defendant No.1. It was also not the case of plaintiff that to defeat rights of plaintiff in collusion with them, sale deed was executed. However, The learned trial Judge without any pleadings, has given a finding that defendant No.1 in collusion with defendant Nos.2 to 4 had executed the sale deed which is not tenable.
17. After execution of Ex.P.1, defendant No.1 sold the property to defendant Nos.2 to 4 under registered sale deed for valuable consideration. Defendant No.1 had not denied it. Plaintiff has failed to prove that it was a sham document and even he has not pleaded it before the trial Court except stating that to cause wrongful loss to plaintiff, sale deed was executed by defendant No.1. It shows that defendant Nos.2 to 4 are bonafide purchasers of suit property for valuable consideration without having knowledge of Ex.P.1.
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18. The First Appellate Court considering the innocence of defendant Nos.2 to 4, held that if they are directed to execute the sale deed then they will be put to irreparable hardship. The said finding is based on the available records on the file. Having paid the sale consideration and having taken possession of the property, they have been cultivating the land. If relief of specific performance is granted in favour of plaintiff, then they will be put to irreparable loss.
19. Plaintiff has not pleaded that he has been put in possession of the property as on the date of Ex.P1 and Ex.P1 was also do not disclose that possession of property was handed over to the plaintiff on the date of Ex.P1. Under such circumstances, the contention of the plaintiff during the course of trial that he has been in possession of the property is not tenable. Therefore, if the specific performance of the agreement is rejected, he will not be put to irreparable loss, financial loss caused to him can be 13 compensated.Considering the same, learned First Appellate Judge rightly refused to grant the relief of specific performance of agreement. On the contrary, alternative relief of refund of earnest money is awarded. It does not call for any interference by this Court in the second appeal.
20. The learned First Appellate Judge directed the defendant No.1 to pay interest at the rate of 6% p.a. The said interest appears to be very meager. Defendant No.1 had received the said amount as on 12.07.2007 and has been enjoying said amount from the last 15 years. If at that time plaintiff has deposited the amount in interest bearing deposit, then he could have earned interest at the rate of 9 to 10%. Considering the same, in the interest of justice and equity, interest shall be enhanced from 6% to 15% p.a. from the date of suit till payment of entire amount. To that extent, Judgment of First Appellate Court needs to be modified.
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21. The learned advocate for appellant relied on the judgment of Hon'ble Supreme Court in the case of Prakash Chandra Vs. Narayan reported in 2012(5) SCC
403. In that case, suit was filed against a sole defendant who has not sold the property to third party. But, in the present case facts are different. Therefore, principle of law laid down in the above said judgment is not applicable to facts of the present case.
22. The learned advocate for appellant has also relied on the following judgments:
1) In the case of Tek Chand and others Vs.Deep Chand and others reported in AIR 2001 SC 1392.
2) In the case of K.Prakash Vs. B.R.Sampath Kumar reported in 2015(4) Kar.L.J 298(SC) 15
3) Judgment of this Court in the case of M.Suresh Vs. Smt.Mahadevamma and others in RFA No.1560/2011.
Facts of the above three cases are different from facts of the present case. Therefore, there is no need of much discussion about the said case and it is sufficient to say that it is not applicable to the facts of the present case.
23. Learned advocate for appellant has relied on the judgment in the case of Vijay A. Mittal and others Vs.Kulwant Rai (Dead) through Legal representatives and another reported in (2019) 3 SCC 520. The facts of the above case are different from the facts of the present case. In the present case, defendant Nos.1 to 3 in their cross examination have stated that they have no idea about agreement of sale executed in favour of the plaintiff. It was not admitted by them either in the pleading or in the evidence that they had knowledge about the Ex.P1 and 16 thereafter also they got executed the sale deed in their favour. As already stated above, without proper pleading and issue, the learned trial judge held that it was a collusive transaction between defendant No.1 and defendant Nos.2 to 4. Therefore, law laid down in the above said judgments is not applicable to the facts in hand.
24. For the above said discussions, I answer substantive question of law against appellant and pass the following:
ORDER Appeal is partly allowed.
Impugned judgment of First Appellate
Court is confirmed with modification that
defendant No.1 is directed to pay interest at the rate of 15% p.a. from the date of suit till payment of entire amount on the earnest money received by him.
Sd/-
JUDGE HMB/-