Karnataka High Court
Smt Chikkamma W/O Kempaiah vs Smt D R Kamalamma W/O M. Basavegowda on 19 April, 2024
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NC: 2024:KHC:16203
RFA No. 2562 of 2007
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR JUSTICE C M JOSHI
REGULAR FIRST APPEAL NO.2562 OF 2007 (SP)
BETWEEN:
1. SMT. CHIKKAMMA W/O KEMPAIAH
AGED ABOUT 72 YEARS,
R/A. NO.161, LAKSHMIPURA,
7TH CROSS, KEMPEGOWDANAGAR,
BANGALORE-560019.
2. SRI KEMPAIAH S/O CHELUVAIAH
SINCE DECEASED BY L.R'S,
2(a) MRS. CHIKKAMMA
W/O LATE KEMPAIAH,
AGED ABOUT 70 YEARS,
2(b) MRS. K. LAKSHMI DEVI
D/O LATE KEMPAIAH,
AGED ABOUT 45 YEARS,
2(c) MR. K. JAGADISH
S/O LATE KEMPAIAH,
Digitally
signed by AGED ABOUT 44 YEARS,
NANDINI R
Location: High 2(d) MR. K SURESH
Court of S/O LATE KEMPAIAH,
Karnataka AGED ABOUT 42 YEARS,
2(e) MR. K. VIJAYAKUMAR
S/O LATE KEMPAIAH,
AGED ABOUT 42 YEARS,
ALL OF THEM ARE RESIDING AT NO.161,
7TH CROSS, KEMPEGOWDA NAGAR,
BENGALURU-19.
...APPELLANTS
(BY SRI RAJAGOPALA NAIDU AND K.R. PRADEEP, ADVOCATES)
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NC: 2024:KHC:16203
RFA No. 2562 of 2007
AND:
1. SMT. D. R. KAMALAMMA W/O M. BASAVEGOWDA
SINCE DECEASED BY L.R'S,
1(a) MR. SHASHIDHAR S/O LATE M. BASAVEGOWDA,
MAJOR BY AGE,
1(b) MR. K.B. VISHNUKUMAR
S/O LATE M. BASAVEGOWDA,
MAJOR BY AGE,
BOTH ARE RESIDING AT NO.26 1ST MAIN,
2ND CROSS, NKG LAYOUT, BSK 3RD STAGE,
BENGALURU-560085
1(c) MRS. K.B. SAVITHRI
D/O LATE M. BASAVEGOWDA,
W/O SUDHAKAR,
MAJOR BY AGE,
RESIDING AT NO.34, YELLAPPA REDDY ROAD,
1ST CROSS, NEAR GANESHA TEMPLE,
BABUSABPALYA,
BENGALURU NORTH, BENGALURU-560043
1(d)
MRS. K.B. SUNANDA
D/O LATE M. BASAVEGOWDA,
W/O B. RADHAKRISHNEGOWDA,
RESIDING AT NO.51/90, 3RD CROSS,
MAYURAVARMA ROAD, LAKSHMIPURA,
K.G. NAGAR, BENGALURU-560019.
2. SRI K. B. SHASHIDHAR
S/O M. BASAVEGOWDA,
AGED ABOUT 46 YEARS,
R/A NO.41, 2ND CROSS, RAMAKRISHNA LAYOUT,
KEMPEGOWDANAGAR,BANGALORE-560 019
...RESPONDENTS
(BY SRI R. B. DESHPANDE AND N.S. BHAT, ADVOCATES FOR
C/R-2 AND FOR R1(A TO D)
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NC: 2024:KHC:16203
RFA No. 2562 of 2007
THIS RFA IS FILED U/O 41 R 1 R/W SEC.96 OF CPC
PRAYING TO ALLOW THIS MEMORANDUM OF REGULAR FIRST
APPEAL THEREBY SETTING ASIDE THE JUDGMENT AND
DECREE DATED.17/09/2007 PASSED BY THE XXV ADDITIONAL
CITY CIVIL JUDGE, BANGALORE CITY, IN O.S.NO.1628/1994
DECREEING THE SUIT OF THE PLAINTIFFS/ RESPONDENTS
AND CALL FOR THE RECORDS FROM THE TRIAL COURT AND
GRANT SUCH OTHER RELIEF/S AS THIS HON'BLE COURT MAY
DEEM FIT TO GRANT IN THE CIRCUMSTANCES OF THE APPEAL.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
19.01.2024 AND COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THROUGH VIDEO CONFERENCING AT KALABURAGI
THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Being aggrieved by the judgment and decree passed in O.S.No.1628/1994 dated 07.09.2007 by the learned XXV Additional City Civil and Sessions Judge, Bengaluru, the defendants are in appeal before this Court.
2. The parties would be referred to as per their ranks before the Trial Court for the sake of convenience.
3. The factual matrix of the case are that the appellant - defendant No.1 is the owner of Site No.42 -4- NC: 2024:KHC:16203 RFA No. 2562 of 2007 situated at Kempegowda Nagar, II Cross, Ramkrishna Math Layout, Bengaluru, and the said site was allotted to defendant No.1 by BDA and she was put in possession of the same. The BDA had executed Lease-Cum-Sale Deed, in the year 1982. Defendant No.1 was in need of money for her family necessity and to perform the marriage of the daughter and therefore, she offered to sell the same to the plaintiffs for a consideration of Rs.1,00,000/-. The plaintiffs accepted the proposal and on 29.05.1991, an Agreement of Sale was entered into between the plaintiffs and the defendants. The entire sale consideration of Rs.1,00,000/- was paid to defendant No.1 and the sale deed was to be executed by the defendants by handing over all the documents. In spite of repeated requests and demands, the defendants failed to execute the sale deed, though they had delivered the possession of the site to the plaintiffs. It was alleged that the defendants, later obstructed the possession and enjoyment of the suit site by the plaintiffs and attempted to put up a construction. Therefore, the plaintiffs had filed a suit for injunction in -5- NC: 2024:KHC:16203 RFA No. 2562 of 2007 O.S.No.3815/1991 and the Court had directed to maintain status-quo over the suit site. Defendant No.1 had also filed O.S.No.3834/1992 for injunction and it was withdrawn on 20.11.1993. It was alleged that defendant No.2 had filed a false criminal complaint against the plaintiffs and the husband of plaintiff No.1, alleging that they had obtained the suit sale agreement by practicing fraud and after investigation Malleshwaram Police filed a 'B' Summary Report, which was protested by defendant No.2. Another similar complaint was filed before the Kempegowdanagara Police Station, which was closed as the dispute was civil in nature. When the defendants failed to comply with the legal notice dated 30.11.1992, the plaintiffs were constrained to file the present suit for specific performance of the contract of Agreement of Sale.
4. The defendants on appearance filed the written statement and resisted the suit. They contended that the suit is false, frivolous and not maintainable. Though, they admitted that defendant No.1 is the owner of the suit site, -6- NC: 2024:KHC:16203 RFA No. 2562 of 2007 they denied the execution of the Agreement of Sale dated 29.05.1991 and the receipt of the sale consideration. They also denied the delivery of possession of the suit site to the plaintiffs. It was alleged that the plaintiffs with the aid of their son, managed to obtain the signatures of defendant No.1 and her children on blank papers in the guise of filing an application to the SSLC Board, for re- totaling of the marks of the daughter of the defendants in SSLC examination, with the help of one Prashant. A relative of the plaintiffs, Prashant, was an employee of the SSLC Board and they had filed a representation to the Chairman of the SSLC Board in that regard. They have narrated that they have lodged the complaint to the Malleshwaram Police station on 4-6-1991 and then 'B' Report was filed by the police, which was protested by the defendants and it resulted in C.C.No.17135/1993. They have also narrated that in the complaint before the Ulsoor Gate Police Station, in Crime No.16/1995 they had alleged fraud and various other criminal prosecutions were initiated. They admitted the suit filed by the plaintiffs as -7- NC: 2024:KHC:16203 RFA No. 2562 of 2007 well as the defendants in O.S.No.3815/1991 and O.S.No.3834/1992. Therefore, they contended that the suit is not maintainable as there was no such agreement and the same is liable to be dismissed.
5. On the basis of the above pleadings, issues were framed by the Trial Court and plaintiff No.1 was examined as PW.1 and witness was examined as PW.2, Ex.P.1 to Ex.P.9 were marked. Defendant No.1 was examined as DW.1 and Ex.D.1 to Ex.D.3 were marked in the evidence.
6. After hearing the arguments, the Trial Court, answered the issues as below and proceed to decree the suit as prayed for.
Issue
Issue Findings
No.
1. Does plaintiffs prove that In the
defendant agreed to sell suit affirmative
property for his family necessities? -8-
NC: 2024:KHC:16203 RFA No. 2562 of 2007
2. Does plaintiffs prove first In the defendant executed sale affirmative agreement on 29.05.91 by receiving entire sale consideration of Rs.1,00,000/-?
3. Does plaintiffs prove that they In the were put in possession by the affirmative defendants of the suit schedule property under sale agreement?
4. Does plaintiffs prove that In the defendants failed to perform their affirmative part of contract by not registering the sale deed?
5. Does plaintiffs prove that In the defendants failed to perform their affirmative part of contract by not registering the sale deed?
6. Does defendants prove that In the plaintiffs have obtained signatures Negative on blank papers as per para 3 of the written statement?
7. Does defendants prove that the In the suit is time barred? Negative
8. Whether there is cause of action to In the the suit? affirmative
9. Whether plaintiffs are entitled for In the the suit reliefs? affirmative
10. If so, under what Order or Decree? As per the final order -9- NC: 2024:KHC:16203 RFA No. 2562 of 2007
7. Being aggrieved by the said judgment, the defendants have approached this Court in appeal. During the pendency of this appeal, appellant No.2 and respondent No.1 died and their legal heirs were brought on record.
8. On admission of the appeal, the Trial Court records have been secured.
9. On issuance of notice, the respondents appeared through their counsel. Arguments of both the sides were heard.
10. The learned counsel appearing for the appellants submitted that the plaintiffs were in possession of the suit site on the basis of the Possession Certificate issued by the BDA and the Lease-Cum-Sale Agreement. However, in the agreement for sale, relied by the plaintiffs, it is stated as the Sale Deed. He submits that the Possession Certificate as well as Lease-Cum-Sale Deed are dated 12.11.1982 and the Agreement of Sale relied by the plaintiffs is dated 29.05.1991 and therefore, the
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 Agreement of Sale is void- ab- initio. It is contended that, under the Lease-Cum-Sale Agreement there is an embargo for alienation for a period of 10 years. Therefore, it is contended that the agreement was a fabricated document by the son of plaintiff No.1 and also that the payment of the consideration amount is not proved. The second contention is that defendant No.2 was not the owner of the property, but even then, he is arrayed as a party to the suit. It is contended that under the Agreement of Sale, the plaintiffs allege that the possession was delivered to them, but on the same date defendant No.1 was not the owner since she got the ownership only on 12.11.1992. He submits that all along the defendants are in possession of the property by paying the property tax and the defendants had seriously resisted the Ex.P.1- sale agreement by filing a criminal complaint that it was got created with a fraudulent purpose. It is contended that as per the agreement at Ex.P.1, the sale deed should have been executed within a month after handing over of the possession, but no demand was made within the expiry of
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 the stipulated period and no enquiry was made by the plaintiffs. It is contended that the Title Deeds are still with the defendants and they were used for borrowing loan from a Bank. He has pointed out the discrepancies in the testimony of PWs.1 and 2 regarding the payment of the consideration amount. It is pointed out that several criminal cases were initiated by the defendants and the allegations made in the criminal cases were not considered by the Trial Court.
11. In support of his contentions, the learned counsel for the appellants has placed reliance on the following judgments:-
A) Y.R. Mahadev vs. K. Dayalan1, wherein it was held that the agreement-of-sale during the subsistence of lease-cum-sale agreement is violative of statutory rule prohibiting such alienation and as such, it is void- ab- initio.1
1997 (4) KRLJ 264
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 B) Pushpabai vs. Dr. Williams2 regarding the limitation and ready and willingness. C) Kashiram vs. Omprakash Jawal3, wherein it was held that though, the rise in prices during pendency of the suit may not be sole consideration for refusing the decree of specific performance, it is equally settled law that granting decree in respect of immovable property is not automatic. D) Parakunnan Veethill Joseph son Mathew vs. Nedumbar Kuruvila's son and others4, concerning the discretion that could be exercised by the Court under Section 20 of the Specific Relief Act. E) He also relied on judgment in the case A.Y. Nagarajayya vs. B. Arvind5, regarding the requirement of registration of the agreement when the possession is delivered.
2 AIR 2011 MADRS 447 3 AIR 1996 SC 2150 4 AIR 1987 SC 2328 5 W.P.No.26406/2012
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 F) Jayalaxmi Reddy vs. Tippanna and others6, concerning to the stamp duty to be paid on the date of agreement.
G) H.P. Basavarajappa vs. K. Vijayalaxmi and others7 concerning the requirement of registration when the agreement-of-sale is a conveyance.
12. Per contra, the learned counsel appearing for the respondents has contended that the plaintiffs have proved the Ex.P.1 agreement-of-sale as required under law, by examining an attesting witness as PW.2. The defendants have also admitted their signature on Ex.P.1 and therefore, sufficient evidence has been placed by the plaintiffs in respect of Ex.P.1. It is submitted that the order passed by the City Civil Court in O.S.No.3815/1991 directing both the parties to maintain status--quo is still inforce and therefore, the subsequent developments are not of much importance. It is submitted that the readiness and willingness of the plaintiffs are expressed in the plaint, 6 ILR 2002 KAR 5163 7 2007 (4) KRLJ 326
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 legal notice and also in the evidence. It is contended that defendant No.1 had represented that she is in need of money for marriage of her daughter and for legal necessity. Therefore, when defendant No.1 has a daughter of marriageable age the plaintiffs believed the same and paid entire balance consideration amount. He points out that the allegations of fraud, misrepresentation and concoction are not proved by the defendants and therefore, the Trial Court has rightly decreed the suit.
13. In support of his contention, he relied on the following judgments.
A) M. Kamalamma and others vs. Ayyasamy8 to contend that the applications under Order 41 Rule 27 of CPC, are not designed to help the parties to patch- up the weak points and make-up for omissions earlier made, but they are for enabling the Appellate Court to pronounce a judgment. The Courts must be 8 2001 (7) SCC 503
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 cautious about the allowing of such applications after long interval between the decree and the application.
B) In the case of K. Prakash vs. B. R. Sampathkumar9,. C) In the case of N. Venkatappa vs. Lingappa Reddy10,.
14. During pendency of this appeal, the appellants have filed an application under Order 41 Rule 27 of CPC, seeking to produce 13 documents. The affidavit filed in support of the application states that the defendants are still in possession and enjoyment of the suit site and they had mortgaged the same to rise a loan. These documents are very much required to prove the case of the defendants and if they are not permitted to be produced, they would be put to irreparable loss, but on the other hand, no harm will be caused to the plaintiffs. Therefore, they have sought for allowing the application. These 9 2014 AIR SLW 5795 10 ILR 1998 KAR 2730
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 documents include the Tax Payment Receipts, Discharge certificate from the Bank, Marriage Invitation Card, loan agreement tax receipts, sale deed executed by BDA, encumbrance certificate etc,.
15. The application is opposed by the plaintiffs contending that there is no reason assigned by the defendants making out a ground that would fall within the scope of Order 41 Rule 27 of CPC.
16. In the light of the above submissions made by the learned counsel appearing for both the sides, the points that arise for consideration as below:-
i. Whether the plaintiffs have proved that the defendants had executed an agreement-of-sale as per Ex.P.1 by paying entire sale consideration of Rs.1,00,000/-.?
ii. Whether such agreement-of-sale is bad for non-
registration, insufficient stamp duty and it is void on account of embargo for alienation under lease- cum- sale agreement?
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 iii. Whether the Trial Court is justified in exercising the judicial discretion in favour of the plaintiffs?
17. This Court is aware of the scope of Section 96 of the CPC and the settled position of law as enunciated in the case of Santosh Hazari v. Purushottam Tiwari11. In a recent judgment, in the case of V. Prabhakara v. Basavaraj K12, the Apex Court has reiterated the principles governing first appeal under Section 96 CPC in para 22 and 24 as below;
"Section 96
22. The first appellate court while exercising power under Section 96 can re-do the exercise of the trial court. However, such a power is expected to be exercised with caution. The reason being, the trial court alone has the pleasure of seeing the demeanour of the witness. Therefore, it has got its own advantage in assessing the statement of the witnesses which may not be available to the appellate court. In exercising such a power, the appellate court has to keep in mind the views of the trial court. If it finds that the trial court is wrong, its decision should be on the reasoning given. A mere 11 (2001) 3 SCC 179 12 (2022) 1 SCC 115
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 substitution of views, without discussing the findings of the trial court, by the appellate court is not permissible. If two views are possible, it would only be appropriate to go with the view expressed by the trial court. While adopting reasoning in support of its findings, the appellate court is not expected to go on moral grounds alone.
23. xxx xxx xx
24. Thus, we have no hesitation in holding that though the first appellate court is the final court of fact and law, it has to fall in line with the scope and ambit of Section 96 of the Code."
18. It is in the light of the above scope and ambit of Section 96 of CPC, this Court has to consider the evidence on record.
Re Point No.1:
19. The first aspect to be considered by this Court is, whether the Agreement-of-Sale executed by the defendants is proved or not? The said Agreement-of-Sale is produced at Ex.P.1. It shows that it is an un-registered agreement-of-sale executed on 29.05.1991. It states that
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 the vendor had obtained the property under a deed executed by the Authorized Officer of the BDA on 12.11.1982 and a Possession Certificate was also issued on the same day. The agreement also states that the entire sale consideration amount was paid by the purchaser and since there is an embargo for alienation of the property for ten years, on expiry of the said ten years i.e., on 12.11.1992, she would execute the sale deed in favour of the purchasers. It also states that in case she fails to execute the sale deed, she would refund the sum of Rs.1,00,000/- along with twice the said amount.
20. In order to prove Ex.P.1, the plaintiffs have examined a witness to the said document as PW.2. PW.2 in his testimony has stated that he was signatory to Ex.P.1 and he has identified his signature on the document. He also states that the possession of the site was delivered to the plaintiffs. The cross-examination does not elicit anything which disprove the execution of Ex.P.1.
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21. DW.1 denies Ex.P.1, saying that it was signed by her due to misrepresentation by the plaintiffs that her signatures are required for re-totaling the SSLC marks card of her daughter. She states that on 4-6-1991, she filed a complaint to the police alleging fraud. The plaintiffs have produced the judgment of the Criminal Courts at Exs.P2 to P4, which disclose that the contentions of the fraud were not proved. It is also pertinent to note that in the cross-examination, DW.1 states that her signatures were taken on blank white papers. Such statements made by her repeatedly show that she do not say that signatures were obtained on stamp papers. It is also evident that the son of defendant No.1 had also signed Ex.P1 and it cannot be believed that for retotalling or revaluation of marks cards, son of DW1 was also required. Moreover, DW1 is not sure whether it was for retotalling or revaluation or consolidation. Evidently, the SSLC marks card of the daughter of DW1 was not produced. Therefore, the contention of DW.1 that she
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 signed Ex.P.1 without knowing the contents cannot be accepted.
22. It is also relevant to note that though, the defendants contend that they had filed several complaints alleging inducement, fraud and misrepresentation etc., none of the complaints were upheld either by the Investigating Agency or the Criminal Courts. Therefore, the Trial Court has rejected the contention of the defendants that there was fraud by the plaintiffs.
23. Another contention by the defendants - appellants is that they have mortgaged the property on 28.04.1991 in favour of one Yaduraj s/o Subbalingegouda. The said document is obviously prior to the execution of Ex.P.1 and the very fact that it does not find place in Ex.P.1 shows that it cannot be believed. The defendants have not adduced the evidence of the said Yaduraj to establish such mortgage.
24. The trial Court has considered these aspects in para 12 and 13 of the impugned judgment. It has rightly
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 come to the conclusion that the totality of the evidence on record clearly shows the execution of the document and that the fraud and misrepresentation alleged by the defendants is not proved. There is nothing which shows that the evidence is not appreciated by the trial Court in a proper manner. Hence this Court do not find any reason to differ with the conclusions reached by the trial Court and as such, point No. 1 is answered in the affirmative. Re: Point No.2:
25. The next contention of the learned counsel for the appellants is that the transaction is hit by the embargo for alienation, as per the Lease-Cum-Sale Agreement and the BDA Rules. In this regard, he relies on the judgment of this Court in the case Y.R. Mahadev vs. K. Dayalan, reported in 1997 (4) KRLJ 264. It was a case wherein a suit for specific performance came to be dismissed on the ground that the CITB Rules 1982 was applicable but not the BDA Rules of 1984. Holding that the 1982 Rules forbid alienation in any form, this Court had held that the
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 agreement for sale is void. In the case on hand, the trial Court has observed that BDA Rules 1984 as laid down in the case of N. Y. Yogambika vs. B.H. Narainsingh13 is applicable.
26. It is evident that the original allotment letter is not available on record. However, Ex.P.1 mentions that the Lease-Cum-Sale Agreement was registered on 12.11.1982. Therefore, no fault can be found with respect to the conclusions reached by the trial Court. It is trite law that if there is any violation of the condition of the grant or allotment, it is for the concerned authorities to act on it and to see whether there is any violation of conditions of the agreement by the allottee. The specific performance by way of sale deed was to happen on 12-11-1992, since the 10 years embargo was to end on 11-11-1992. Therefore, soon after the specified time, the defendants were to execute the sale deed.
13
ILR 1982 KAR 717
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27. It is also relevant to note that in the year 1991, even though the possession was handed-over under the Agreement-of-Sale, there was no necessity of registering the document and payment of the stamp duty on the value of the transaction. Such amendment was introduced to the provisions the Karnataka Stamp Act, by way of amendment in the year 1995. Therefore, the contention that the stamp duty is insufficiently paid on Ex.P.1 and therefore, the said document needs to be impounded cannot be accepted. For aforesaid reasons, point No. 2 is answered in the negative.
Re: Point No. 3
28. The grant of the specific relief is the discretion of the Court. The trial Court holds that though the plaintiffs have sought for the alternative relief, they cannot be deprived of the specific relief. It do not consider the hardship and the fact that disputes had erupted within days of the execution of the agreement as per Ex.P1. It also do not consider the comparative hardship that would
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 be caused to either of the parties. Thus, the reasons for exercising the judicial discretion in favour of the plaintiffs are not available.
29. The plaintiffs contend that the suit site is adjacent to the house owned by them. Whereas, the defendants contend that they had not at all executed the Agreement of Sale and it was outcome of fraud. But they failed to prove such contention despite several litigations. The learned counsel for the appellants/defendants contends that the escalation of the price of the land is also an aspect that has to be considered by the Court. Though the increase in the value of the property cannot be a ground to deny the specific performance, it cannot be a factor which could be ignored.
30. In Shenbagam v. KK Rathinavel14, the Supreme Court observes as below:
"37. In the context of the discretion under Section 20 of the Specific Relief Act, several 14 2022 SCC OnLine SC 71
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 decisions of this Court have considered whether it is appropriate to direct specific performance of a contract relating to the transfer of immovable property, especially given the efflux of time and the escalation of prices of property. In Satya Jain v. Anis Ahmed Rushdie14, this Court held:
"39. The long efflux of time (over 40 years) that has occurred and the galloping value of real estate in the meantime are the twin inhibiting factors in this regard. The same, however, have to be balanced with the fact that the plaintiffs are in no way responsible for the delay that has occurred and their keen participation in the proceedings till date show the live interest on the part of the plaintiffs to have the agreement enforced in law.
40. The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasised that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. [...]
41. The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalising the plaintiffs for no fault on their part; to deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour."
(emphasis supplied)
38. In directing specific performance of the agreement, this Court in Satya Jain (supra) held that sale deed must be executed for the current market price of the suit property.
39. In Nirmala Anand v. Advent Corporation (P.) Ltd.15, a three-judge Bench of this Court observed that in case of a phenomenal increase in the price of the land, the Court may impose a reasonable condition in the decree such as payment of an
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 additional amount by the purchaser. In decreeing the suit for specific performance, the Court observed:
"6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 totality of the circumstances is required to be seen."
(emphasis supplied)
40. In KS Vidyanadam v. Vairavan16, an agreement to sell immovable property was entered into between the plaintiff-buyer and the defendant- seller for a consideration of Rs. 60,000, where earnest money of Rs. 5,000 had been paid in advance. The agreement stipulated that the plaintiff had to purchase stamp papers and pay the balance amount within six months and call upon the defendants to execute the sale deed. The plaintiff filed a suit for specific performance after a lapse of two and a half years seeking performance of the contract. The Court held:
"10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing.
[...]
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 In this case, the suit property is the house property situated in Madurai, which is one of the major cities of Tamil Nadu. The suit agreement was in December 1978 and the six months' period specified therein for completing the sale expired with 15-6-1979. The suit notice was issued by the plaintiff only on 11-7-1981, i.e., more than two years after the expiry of six months' period. The question is what was the plaintiff doing in this interval of more than two years? [...] There is not a single letter or notice from the plaintiff to the defendants calling upon them to get the tenant vacated and get the sale deed executed until he issued the suit notice on 11-7-1981. It is not the plaintiff's case that within six months', he purchased the stamp papers and offered to pay the balance consideration. [...]
13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2½ years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices -- according to the defendants, three times -- between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff."
(emphasis supplied)
41. True enough, generally speaking, time is not of the essence in an agreement for the sale of immoveable property. In deciding whether to grant the remedy of specific performance, specifically in suits relating to sale of immovable property, the
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 courts must be cognizant of the conduct of the parties, the escalation of the price of the suit property, and whether one party will unfairly benefit from the decree. The remedy provided must not cause injustice to a party, specifically when they are not at fault. In the present case, three decades have passed since the agreement to sell was entered into between the parties. The price of the suit property would undoubtedly have escalated. Given the blemished conduct of the respondent-plaintiff in indicating his willingness to perform the contract, we decline in any event to grant the remedy of specific performance of the contract. However, we order a refund of the consideration together with interest at 6% per annum."
31. In the case on hand, the Agreement of Sale was entered into in the year 1991. This first appeal is being decided in the year 2024. Much water has flown in three and half decades and the market prices have sky- rocketed. Though Explanation to Section 20 (2)15 of 15 "20. Discretion as to decreeing specific performance.--(1) 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; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal.
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 Specific Relief Act, lays down that the increase in the market value is not a ground to deny the specific performance, the judicial pronouncements as depicted above, show a marked deviation to achieve equitable justice. The plaintiff had paid the entire sale consideration of Rs 1,00,000/-. It was agreed to execute the sale deed soon after the embargo for sale ended. But the defendants had raised the dispute within days of the agreement. Therefore, it would not be proper to order for the specific performance of the agreement of sale. The defendants had agreed to refund the amount with twice the agreed amount. Justice would be achieved if the consideration of Rs.1,00,000/- is ordered to be refunded with interest of (2) The following are cases in which the court may properly exercise discretion not to decree specific performance--
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or
(c) xxxxxxxx Explanation I.--Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b).
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 6% p.a, along with Rs.2,00,000/- as agreed. Hence, this point raised is answered in the negative. Re: IA No.1/2020.
32. Appellants filed IA No.1/2020 under Order 41 Rule 27 of CPC seeking to produce 13 documents as additional evidence. The affidavit filed in support of application states that they had obtained loan by mortgaging the title deeds of the suit site and those documents are necessary to prove the possession of the defendants /appellants. In order to establish the contention of the appellant, these documents are essential and irreparable loss would be caused to them if production is not allowed.
33. The application is opposed by the respondents contending that the appeal was filed in the year 2007, admitted in the year 2008 and nothing prevented the appellants to produce additional evidence till 2020. In the meanwhile, the appeal was dismissed for non-prosecution
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 and therefore, the application is not maintainable. Secondly, they contend that the affidavit do not state anything about the grounds that fall within the scope of Rule 27 Order 41 of CPC.
34. The additional evidence sought to be produced are the tax payment receipts for the year subsequent to the filing of the suit, a discharge certificate showing repayment of the loan borrowed by mortgaging the suit site by way of deposit of title deeds, the marriage invitation card of the daughter of the defendant No.1, her school record, encumbrance certificate, loan agreements with financial institutions and the absolute sale deed executed by BDA in favour of defendant No.1 dated 13.03.1999 and an approved building plan. Obviously these documents could have been produced by the appellants before the trial Court. Nothing is mentioned in the affidavit filed in support of application as to why these documents were not produced before the trial Court or
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 how these documents are essential for just adjudication of the matter.
35. It is evident that when the application does not mention any of the grounds falling within the scope of Rule 27 Order 41 of CPC, the appellants cannot seek the production of additional evidence as of right. The other ground is, whether this Court needs the additional evidence to pronounce the judgment. From the discussion made supra, there is no need of any additional evidence to pronounce the judgment in the matter. Since the documents prima-facie show they came into existence subsequent to the filing of the suit; and were available with the appellants when the trial commenced, the application is bereft of any merits. Therefore, the application deserves to be dismissed. In this regard, the judgment of the Apex Court in the case of Union of India v. Ibrahim Uddin16, lays down the parameters that are 16 (2012) 8 SCC 148
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 applicable to consider the application U/o 41 Rule 27 of CPC.
36. In view of the findings of this Court on points No.1 to 3 above, the appeal deserves to be allowed in part. Hence, the following:
ORDER
(i) IA No. 1/2020 is dismissed.
(ii) Appeal is allowed in part.
(iii) The impugned judgment of the trial Court in O.S.No.1628/1994 dated 17.09.2007 is hereby set aside.
(iv) Suit of the plaintiffs is dismissed so far as the relief of specific performance is concerned.
(v) Suit of the plaintiffs is decreed directing the defendants to pay the sum of Rs.1,00,000/-
along with interest at 6% per annum from the date of the agreement till its deposit. The
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NC: 2024:KHC:16203 RFA No. 2562 of 2007 defendants are also liable to pay damages of Rs.2,00,000/-.
(vi) There shall be a charge over the suit property till the payments are made as above.
(vii) No order as to costs.
Sd/-
JUDGE tsn* List No.: 19 Sl No.: 1