Karnataka High Court
Hussainbee W/O Riyaz Patel vs Radha W/O Shrikant Huilgolkar on 17 January, 2017
Bench: Ravi Malimath, K. Somashekar
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
ON THE 17TH DAY OF JANUARY, 2017
BEFORE
THE HON'BLE MR.JUSTICE RAVI MALIMATH
AND
THE HON'BLE MR.JUSTICE K. SOMASHEKAR
REGULAR FIRST APPEAL No.4114 OF 2012 (SP)
BETWEEN:
SMT.HUSSAINBEE W/O RIYAZ PATEL
AGE: 49 YEARS, OCC: HOUSEHOLD & AGRICULTURE
R/O. MANJUNATH COLONY
BHAGYANAGAR, KOPPAL-583 231
REPRESENTED BY HER
POWER OF ATTORNEY HOLDER
SHRI.SHAIKH KHAJAHUSSAIN
S/O RIYAZ PATEL
AGE: 29 YEARS, OCC: AGRICULTURE
R/O. MANJUNATH COLONY
BHAGYANAGAR, KOPPAL-583 231
... APPELLANT
(BY SRI. M G NAGANURI, ADVOCATE)
AND:
1. SMT.RADHA, W/O. SHRIKANT HUILGOLKAR
AGE: 50 YEARS, OCC: HOUSEHOLD
R/O.PLOT NO.2, "SWASTIK APARTMENT"
SANMATI NAGAR, NARAYANPUR
DHARWAD-580008
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2. DHANASHREE, D/O SHRIKANT HUILGOLKAR
AGE: 22 YEARS, OCC: HOUSEHOLD
R/O.PLOT NO.2, "SWASTIK APARTMENT"
SANMATI NAGAR, NARAYANPUR
DHARWAD-580008.
3. SHRI. HRUSHIKESH SHRIKANT HUILGOLKAR
AGE: 26 YEARS, OCC: SERVICE
R/O.PLOT NO.2, "SWASTIK APARTMENT"
SANMATI NAGAR, NARAYANPUR
DHARWAD-580008,
RESPONDENTS 1 TO 3 REPRESENTED BY
THEIR POWER OF ATTORNEY HOLDER
SHRI.KRISHNARAO RAMARAO HUILGOL
AGE: 68 YEARS, OC: AGRICULTURE
R/O. NARIBAVI ONI, SOMESHWAR ROAD
GADAG - 582 101.
... RESPONDENTS
(BY SRI. SANGRAM S. KULKARNI, ADVOCATE FOR R1 & R3)
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THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION
96 READ WITH ORDER XLI RULE 1 OF CODE OF CIVIL
PROCEDURE, 1908 AGAINST THE JUDGMENT AND DECREE
DATED 18.06.2012 PASSED BY THE ADDITIONAL SENIOR CIVIL
JUDGE, GADAG IN O.S.NO.68 OF 2008, REJECTING THE SUIT
FILED FOR SPECIFIC PERFORMANCE OF CONTRACT.
THIS APPEAL COMING ON FOR FINAL HEARING THIS
DAY, RAVI MALIMATH J. DELIVERED THE FOLLOWING:
JUDGMENT
The case of the plaintiff is that she and defendants entered into an agreement of sale of the suit land measuring 11 acres 19 guntas for a consideration of Rs.1,41,000/- per acre on 17.10.2007. Obligations were cast on both sides. A sum of :3: Rs.2,50,000/- was paid as an initial advance. It was mutually agreed that within five months from the date of the agreement, the defendants would have to receive the balance consideration and execute the registered sale deed. The plaintiff was ever ready and willing to perform her part of the contract and also to pay the balance amount. In spite of requesting the defendants on a number of occasions to execute the registered sale deed, the defendants did not do so. Hence a legal notice was issued on 29.08.2008 asking the defendants to execute the registered sale deed. The same was replied on 02.09.2008 that the defendants have already cancelled the agreement and forfeited the advance. Based on these averments, the instant suit was filed seeking for a decree of specific performance of contract and in the alternative, refund of earnest money.
2. On service of summons, the defendants entered appearance. Defendant No.1 filed a written statement, which was adopted by the remaining defendants. It was contended that while admitting the sale agreement, time was the essence of the contract. That the plaintiff was never ready and willing to :4: perform her part of the contract. She was not ready to pay the balance consideration within the stipulated time of five months. Thus, the plaintiff herself has committed breach of non- compliance of the terms of the sale agreement. Since the plaintiff has not come forward to perform her part of the contract, she is not entitled for any decree. That the defendants have published a notice in the newspaper on 21.06.2008 calling upon the plaintiff to perform her part of the contract within 10 days, failing which the agreement would stand cancelled. The same was not replied.
3. Based on these pleadings, the trial Court framed the following issues:
i. Whether plaintiff is entitle for decree of specific performance of agreement of sale in his favour in respect of suit property by paying balance of Rs.39,67,975/- to the defendants?
ii. Whether plaintiff is alternatively entitle for recovery of earnest money of Rs.2,50,000/- from the defendant with interest at 18% p.a.?
iii. Whether defendant proves that as there was time fixed for performance of the contract and plaintiff not come :5: to perform his part of contraction the date fixed as such agreement is cancelled?
iv. Whether plaintiff is always ready and willing to perform her part of contract?
v. Whether plaintiff proves that time is not essence of contract in his case?
vi. To what order or decree?
The plaintiff examined her Power of Attorney holder as PW1 and also examined 3 witnesses and relied upon 6 documents. The Power of Attorney holder of defendants was examined as DW1 along with another witness and relied upon 9 documents. Issue Nos.1, 4 and 5 were held in the negative, issue No.3 was held in the affirmative and issue No.2 was held partly in the affirmative and partly in the negative. The suit of the plaintiff with respect to specific performance of the contract was rejected. The alternate plea of refund of the earnest money was decreed with proportionate interest of 9% p.a. from the date of the suit. Aggrieved by the same, the plaintiff has filed this appeal. :6:
4. Sri.M. G. Naganuri, learned counsel appearing for the appellant contends that the impugned judgment and decree passed by the trial Court is erroneous. That the trial Court has misread the agreement of sale executed vide Exhibit P2. It has wrongly came to the conclusion that time was the essence of the contract. It has wrongly held that the plaintiff was not willing to perform her part of the contract. It has failed to consider the clause in the agreement, which imposed a duty to be performed by the defendants. That the trial Court misdirected itself in giving undue importance to the public notice calling upon the plaintiff to execute the sale deed. In terms of Section 20 of the Specific Performance Act, hardship has not been appropriately considered. That no hardship would be caused to the defendants if the suit is decreed. Therefore, the trial Court committed an error in declining a decree for specific performance and decreeing return of the earnest money.
5. On the other hand, Sri. Sangram S. Kulkarni, learned counsel for the respondents defends the impugned order. He contends that there is no error committed by the trial Court that :7: calls for any interference. That the reading of Exhibit P2 clearly indicates that time was the essence of the contract. That there is a failure on the part of the plaintiff to perform her part of the contract. She was never ready and willing to perform her part of the contract. Notwithstanding the same, a paper publication was taken out by the defendants calling upon the plaintiff to get the sale deed executed by paying the balance amount. Even that was not replied favourably. The legal notice issued by the plaintiff to the defendants was much beyond the period of five months. That the defendants would be put to a greater hardship if the decree of specific performance is granted. Hence even on the question of hardship, the trial Court was justified in partly decreeing the suit. Hence, he pleads that the appeal be dismissed by confirming the judgment and decree of the trial Court.
6. Heard learned counsels and examined the records. The points that arise for consideration in this appeal are as follows:
i. Whether the findings recorded by the trial Court on readiness and willingness of the plaintiff is just and appropriate?:8:
ii. Whether time was the essence of the contract and the plaintiff has failed to perform her part of contract within the time stipulated?
7. Exhibit P2 is the agreement of sale dated 17.10.2007. The extent of land is 11 acres 19 guntas. The sale consideration is fixed at Rs.1,41,000/- per acre. Rs.2,50,000/- was paid as advance consideration on the date of the agreement. Balance amount liable to be paid by the plaintiff was Rs.13,67,975/-. The plea of the plaintiff is that she was ever ready and willing to perform her part of the contract. She has narrated in para 4 of her plaint that she tried to contact the defendants and requested them a number of times to perform their part of the contract. The defendants did not do so.
8. The trial Court considering this plea of readiness and willingness was of the view that the plaintiff has failed to perform her part of the contract. That she has failed to tender the balance consideration within a period of five months. The five months to perform the contract would expire on 17.03.2008. Having not performed her part of the contract, the plaintiff issued a legal :9: notice much after the expiry of five months namely on 29.08.2008. Merely stating that she was ready and willing to perform her part of the contract would not be sufficient. If such was the plea of the plaintiff, she should have done the same within the expiry of the said period. She has failed to do so. Her contention is that a number of requests were made to the defendants, but they failed to perform their part of the contract, even though she was willing to make the payment. The trial Court on considering the evidence, was of the view that the contention of the plaintiff cannot be accepted.
9. The plea of the plaintiff is that the defendants failed to perform their part of contract. However, considering the notice issued by the plaintiff as well as the plaint averments, there is no specific reason attributing the defendants' failure. It is just a bald statement, that the defendants have failed to perform their part of contract. In order to contend that the defendants have failed to perform their part of contract, there must be a specific plea to that effect. The same is missing in the notice as well as the in the plaint.
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10. On the other hand, it is the plea of the defendants that the plaintiff did not come forward to make the balance payment. A legal notice was issued to her vide Exhibit D2. The same was not served on the plaintiff. Therefore, the defendants took out a paper publication in 'Navodaya' newspaper dated 21.06.2008. Through the said notice, the plaintiff was informed that she would have to come and make the balance payment and thereafter get the sale deed executed. This would clearly indicate the intention of the defendants to execute the registered sale deed. Even though five months had expired, as on 21.06.2008, defendants were still ready to get the sale deed executed by receiving the balance consideration. In law they need not have done so. However, they still proceeded to issue firstly, a legal notice and thereafter a newspaper publication seeking to honour their part of the contract. Even that is not complied with by the plaintiff. This would clearly indicate that there is an absence of readiness and willingness by the plaintiff to perform her part of the contract. Firstly, the payment is not made within a period of five months. Even assuming that the legal notice vide Exhibit D2 was : 11 : not served on the plaintiff, she is deemed to have notice vide paper publication dated 21.06.2008 at Exhibit D5. Even then the payment is not made. Therefore, merely contending without any adequate pleading cannot be accepted. Therefore, the plaintiff has failed to prove her readiness and willingness to make the balance payment. The trial Court was justified in holding so. The first issue is accordingly answered.
11. Insofar as the second issue is concerned, namely the time being the essence of the contract, the agreement at Exhibit P2 would clearly indicate the same. The same does not require any interpretation. The time fixed in the agreement is that within a period of five months the agreement had to be executed by the plaintiff paying the balance consideration to the defendants. Not only was she not ready and willing to make the payment, she has not done so in spite of the paper publication being made. The defendants being ready to accept the sale consideration even after a lapse of five months, even that has not been done. On the contrary, two months thereafter, a legal notice was issued asking the defendants to execute the sale deed.
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12. Under these circumstances, we have no hesitation to hold that the trial Court was justified in holding that the time was the essence of the contract and the plaintiff having failed to perform her part of the contract within the stipulated time, is not entitled for a decree for specific performance.
13. The alternative plea put forth by the appellant's counsel is based on hardship. He pleads that the plaintiff will be put to a greater hardship if the suit is not decreed for specific performance. However, the respondents' counsel pleads that terms of the Exhibit P2 itself would indicate that greater hardship would be caused to the defendants than to the plaintiff.
14. Under these circumstances, the reasoning assigned by the trial Court in declining to grant decree for specific performance of contract, while ordering to refund the earnest money is justified. However, we notice that the rate of interest is ordered at 9% p.a. We are of the considered view that the interest at 9% p.a. is on the lower side. It would be just and appropriate to enhance it to 12% p.a. Insofar as the date of payment is concerned, the trial Court held that the defendant is liable to pay : 13 : the same from the date of the suit. We do not think it is appropriate. The money paid by the plaintiff to the defendants was in terms of the agreement at Exhibit P2. In terms whereof, the payment of Rs.2,50,000/- was to be held on for a period of five months and thereafter for the execution of the sale deed. Therefore, the money held by the defendants after the expiry of five months would be against the interest of the plaintiff. They would be holding the money received by them adverse to the interest of the plaintiff. Therefore, we are of the view that the defendants are liable to pay interest from the date on which the sale agreement ought to have been executed. The agreement ought to have been executed within five months from the date of the agreement, namely on or before 17.03.2008. Therefore, it is from that date onwards the defendants are liable to pay the interest.
Consequently, the appeal is partly allowed.
The judgment and decree dated 18.06.2012 passed by the Additional Senior Civil Judge, Gadag in O.S.No.68 of 2008, rejecting the plaintiff's suit for specific performance and decreeing : 14 : the suit for the alternate relief of refund of earnest money of Rs.2,50,000/- is affirmed.
The judgment and decree is modified to the extent of directing the defendants to pay interest at 12% p.a. from 17.03.2008 on Rs.2,50,000/- till the date of realisation, which shall be within a period of one month from the date of receipt of a copy of this order.
The judgment and decree of the trial Court stands modified accordingly to the aforesaid limited extent.
No costs.
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