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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF DECEMBER, 2020
PRESENT
THE HON’BLE MRS.JUSTICE S.SUJATHA
AND
THE HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
R.F.A.No.246/2012
BETWEEN :
SRI S.MISHRILAL S/O LATE SHOBALA AGED ABOUT 54 YEARS, R/AT No.579, 4TH CROSS, T.DASARAHALLI, BANGALORE-560057 ...APPELLANT
(BY SRI S.R.SHIVAPRAKASH, ADV.)
AND :
1 . Mr. B.H.NARAYANASWAMY @ ALUR NARAYANASWAMY S/O LATE ALUR HANUMANTHAPPA AGED ABOUT 57 YEARS
2 . Mr. A.N.RAMESH @ ALUR RAMESH GOWDA AGED ABOUT 32 YEARS
3 . KUM. A.N.SAVITHA @ ALUR N.SAVITHA AGED ABOUT 31 YEARS
4 . Mr. ARUN KUMAR @ ALUR ARUN KUMAR AGED ABOUT 27 YEARS
- 2 - ALL ARE R/AT ALUR VILLAGE, DASANAPURA HOBLI BANGALORE NORTH TALUK
…RESPONDENTS
(BY SRI SREEVATSA, SENIOR ADV. FOR SRI B.J.VEERENDRA KUMAR & SRI MAHENDRA N., ADVS. FOR C/R.)
THIS R.F.A. IS FILED UNDER SECTION 96 R/W ORDER 41 RULE 1 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 11.08.2011 PASSED IN No.16507/2003 ON THE FILE OF THE XXVIII ADDITIONAL CITY CIVIL JUDGE (CCH-29), MAYO HALL AT BANGALORE, DISMISSING THE SUIT FOR SPECIFIC PERFORMANCE.
THIS APPEAL COMING ON FOR HEARING, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T This appeal by the plaintiff is directed against the judgment and decree dated 11.08.2011 passed in O.S.No.16507/2003 on the file of the XXVIII Addl. City Civil Judge at Mayohall Unit, Bangalore (‘Trial Court’ for short).
For the sake of convenience, the parties are referred to as per their status before the Trial Court.
The plaintiff instituted suit in O.S.No.16507/2003 before the Trial Court seeking for specific performance of the contract, an agreement of
- 3 - sale dated 10.08.2001 executed by the defendants after receiving the balance sale consideration or in the alternative seeking direction to the defendants to return the part sale consideration with damages, cost and interest from the date of the agreement, inter-alia seeking direction to the defendants to obtain Khatha, betterment charges receipt and tax paid receipts from the concerned authority in respect of the suit schedule property and no objections from the sisters, brother and mother of the defendant No.1 in respect of the said property and to hand over the same and restrain the defendants or anybody claiming under or through them in any way dispossessing the plaintiff from the suit property.
The description of the schedule property is, all that piece and parcel of vacant land/site on west portion of Sy.No.17/3A, (seventeen/three-A) measuring East to West 46 (forty six) feet, North to South 115 (one
- 4 - hundred and fifteen) feet, or 4 ¾ Guntas, situated at Dasarahalli, Yeshwanthpur Hobli, Bangalore North Taluk, now comes within the jurisdiction of City Municipal Corporation of T. Dasarahalli, Bangalore and bounded on East by: Remaining vacant land belong to brother of the 1st defendant; West by: Road; North by: National High-way No.4 and South by: Private property belongs to Ankabai’s family.
The plaint averments are that the defendants are the owners of the suit schedule property having acquired the same by virtue of partition deed between the defendant No.1, his mother and brother on 01.07.1995. The defendant No.1 being the owner of the suit schedule property agreed to sell the same for Rs.27,15,800/- and received part consideration amount of Rs.1,50,000/- in cash for which a receipt has been executed. It was averred that as per the terms and conditions in the agreement at Clause 2, the plaintiff
- 5 - was required to pay second part of sale price on or before 16.08.2001 which was duly complied by the plaintiff in making the said payment through cheque for a sum of Rs.1,50,000/- in favour of the defendant No.1 and Rs.2,00,000/- was paid in cash to which a receipt was issued by the defendants acknowledging the receipt of the said amount. Thus, the plaintiff has totally paid Rs.5,00,000/- to the defendants as per the conditions stipulated in the sale agreement.
It was averred that on payment of the second installment, the defendants ought to have handed over the khatha, betterment charges receipt, tax paid receipts issued by the concerned City Municipal Corporation and to get survey sketch of the suit schedule property in fixing the boundaries and no objections from the sisters, mother and brother of the defendant No.1 to alienate the suit schedule property to the plaintiff prior to receiving of third payment of
- 6 - Rs.10,00,000/- from the plaintiff as shown at clause Nos.3, 4, 6 and 7 of the agreement of sale dated 11.08.2001. But the defendants were postponing the performance of their part of contract inspite of repeated approaches and requests. The plaintiff contended that he was/is always ready to pay the remaining balance amount as agreed in clause No.2 of the agreement of sale having paid the part sale consideration of Rs.5,00,000/- to the defendants and the defendants had failed to obtain Katha, tax paid receipts from the concerned authorities which was required to be handed over to the plaintiff. The defendant No.1 tried to alienate the suit property to the third parties behind the back of the plaintiff. Hence, the plaintiff was constrained to file O.S.No.4078/2002 seeking for mandatory injunction against the defendants. In the said proceedings, defendant No.1 has filed a memo on 21.02.2003 undertaking that they will not alienate the suit property till the disposal of the suit. Despite such undertaking
- 7 - given before the Court, the defendants tried to alienate the suit property. Hence, the plaintiff was forced to file the present suit.
On issuance of summons, the defendant No.2 appeared through his counsel and filed written statement denying the allegations made in the plaint. The execution of the agreement of sale dated 10.08.2001 and the receipt of Rs.5,00,000/- towards the earnest money deposit was admitted. However, it was alleged that the terms and conditions were incorporated in the agreement as per the whims and fancies of the plaintiff. The defence set up was that the plaintiff has not approached the Court with clean hands. The contention of the plaintiff that defendant No.1 was liable to get the survey sketch prepared and fix the boundaries was specifically denied. The specific defence was that the plaintiff was not ready and willing to perform his part of contract; he had no funds to pay
- 8 - the balance sale consideration and get the sale deed registered. The plaintiff was in the habit of filing multiple suits for one or the other reasons dragging the defendants to litigation continuously and unnecessarily. It was contended that the plaintiff had filed two suits O.S.No.4078/2002 and O.S.No.3252/2003. As the plaintiff was not ready and willing to perform his part of the contract within the stipulated time in the agreement, he is not entitled to enforce the same. Therefore, the defendants prayed for dismissal of the suit.
On the basis of the pleadings, the Trial Court framed the following issues:- 1. Whether the plaintiff proves that defendants agreed to sell the suit schedule property for Rs.27,50,800/- by receiving an advance of Rs.1,50,000/- from the plaintiff? 2. Whether plaintiff proves that he was ready and willing to perform his part of the obligation under the contract?
- 9 - 3. Whether plaintiff is entitled for the relief of specific performance? 4. Whether in the alternative plaintiff is entitled for refund of advance amount and damages as sought for? 5. What order or decree?
The plaintiff got himself examined as PW.1 and two witnesses on his behalf as PW.2 and PW.3; documents Ex.P1 to P17 were marked. Defendant No.1 was examined as DW.1 and documents Ex.D1 to D11 were marked.
On appreciation of oral and documentary evidence, the Trial Judge answered the issue No.1 in the affirmative; issue Nos.2 and 3 in the negative and issue No.4 partly in affirmative. Finally, the suit of the plaintiff for specific performance of the contract of agreement of sale was dismissed. The defendants were directed to refund an amount of Rs.3,50,000/- to the
- 10 - plaintiff with interest at the rate of 6% per annum from the date of the agreement till realization.
Being aggrieved by the said judgment and decree, the plaintiff has preferred the present appeal.
Learned counsel for the plaintiff/appellant would contend that the Trial Court grossly erred in appreciating the evidence on record in a proper perspective. The impugned judgment and decree has been passed on presumption and assumption. The defendant No.1 in para 5 of the written statement has categorically admitted that the appellant had paid advance amount of Rs.1,50,000/- to the defendants at the time of the execution of the agreement of sale and in all Rs.5,00,000/- towards part sale consideration. Rs.3,50,000/- being paid as second payment on 16.08.2001. However, the Trial Court directed the defendants to refund Rs.3,50,000/- to the plaintiff with interest at the rate of 6% per annum from the date of
- 11 - the agreement till realization. The agreement of sale has to be read as a whole not in isolation. The Trial Judge committed an error in wrongly interpreting the clauses of agreement of sale; the plaintiff was always ready and willing to get the sale deed registered in his favour but the defendants have failed to produce the title records such as Khata, betterment charges, upto date tax paid receipts etc., within a stipulated period of 60 days. As such, time not being an essence of contract, time was extended due to non-production of necessary documents within the stipulated period. The plaintiff had sufficient funds having a Bajaj Showroom and jewelry shop and is also doing business as Pawn broker and his turnover runs to lakhs. The bank statement at Ex.P15 fortifies the same. The Trial Judge has failed to appreciate these vital aspects in arriving at a conclusion that the plaintiff is not entitled to the relief of specific performance. In support of his submissions, learned counsel has filed
- 12 - the income tax returns submitted by the plaintiff for various assessment years along with I.A.No.2/2020.
Per contra, learned counsel appearing for the defendants/respondents submitted that the Trial Court rightly appreciating the oral and documentary evidence on record has rejected the relief of specific performance of contract. The plaintiff had filed O.S.No.4078/2002 which came to be dismissed as withdrawn on 25.11.2003. The liberty sought by the plaintiff to file a fresh suit on the same cause of action was specifically rejected by the Trial Court. Despite the same, the present O.S.No.16507/20003 has been filed on 28.11.2003. Strikingly, O.S.No.3252/2003 was filed by the plaintiff during the pendency of the O.S.No.16507/2003. That suit also came to be dismissed as withdrawn on 03.08.2004. The defendants were required to hand over the original documents to the plaintiff only at the time of the registration of the
- 13 - sale deed. The plaintiff having performed the second part of the contract of payment of Rs.3,50,000/- towards the second instalment, besides Rs.1,50,000/- paid at the time of the execution of the sale agreement (totally Rs.5,00,000/-) has failed to make the payment of Rs.10,00,000/- within 65 days from the date of the agreement as per the terms of the contract. The plaintiff was not ready and willing to perform his part of the contract but stratingly putting the blame on the defendants. Considering these aspects, the Trial Court has rightly passed the judgment and decree which is impugned herein. The same deserves to be confirmed dismissing the appeal filed b the plaintiff.
We have carefully considered the arguments advanced by the learned counsel for the parties and perused the original records.
The moot points that arise for our consideration are:-
- 14 - 1) Whether the plaintiff has performed his part of the contract in terms of the agreement to sell dated 11.08.2001 (Ex.P1)? 2) Whether the trial judge is justified in directing the defendants to refund a sum of Rs.3,50,000/- with interest at 6% p.a.?
Re: Point No.1:
The execution of Ex.P1 is not in dispute. The said agreement to sell consists of four parts. Firstly, the agreement to sell Ex.P1 was executed by the vendors/defendants on 11.08.2001 jointly and severally receiving Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only) from the purchaser/plaintiff in the presence of the attesting witnesses, which the defendants have jointly and severally acknowledged for having received the said part sale consideration of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only).
Clause 2 stipulates that the sum of Rs.3,50,000/- (Rupees Three Lakhs Fifty Thousand only) has to be paid by the plaintiff to the
- 15 - vendors/defendants on or before 16.08.2001 and shall obtain receipt thereon from the vendors/defendants and to pay third part of sale consideration of Rs.10,00,000/- (Rupees Ten Lakhs only) to the defendants on or before 65 days from the date of the agreement to sell.
Clause 3 stipulates that the payment of the remaining balance sale consideration of Rs.12,50,800/- (Rupees Twelve Lakhs Fifty Thousand Eight Hundred only) has to be made to the defendants at the time of the execution and registration of the absolute sale deed in favour of the purchaser or his nominee/s within the period of six months from the date of execution of the agreement to sell.
In Clause 3 of Ex.P1, it is stipulated that in the event of the vendors/defendants failed to produce the necessary title records including the Khatha pertaining to the schedule property to the purchaser/plaintiff within a period of 60 days from the
- 16 - date of the agreement or otherwise, the time will be extended till they handover the same to the purchaser/plaintiff.
Clause 4 of the Ex.P1 stipulates the condition that the purchaser/plaintiff shall pay consideration amount to the vendors/defendants as agreed as per clauses 2 and 3 and fails to do so, the defendants are at liberty to revoke the agreement of sale subject to production of C.M.C. Khatha, betterment charges, tax paid receipts.
As per Clause 5 of the Ex.P1, the vendors/defendants shall execute a valid sale deed in favour of the purchaser/plaintiff or his nominee/s as agreed by receiving sale consideration shown in clauses 2 and 3 of the agreement, fails to do so the purchaser/plaintiff is at liberty to recover the advance amount so paid by him to the vendors/defendants with costs and damages or he is at liberty to get the
- 17 - registered sale deed in his favour in accordance with law. 22. As per clause 6 of the Ex.P1, that all expenses like stamp duty, registration fee and other miscellaneous expenses shall be borne by the purchaser/plaintiff at the time of obtaining registered sale deed before the concerned Sub-Registrar and on the other hand, the vendors/defendants shall get and handover the title records like khatha from the concerned City Municipal Corporation, Tax and Betterment charges, upto date tax paid receipts, encumbrance family tree of the vendors/defendants and no objection/declaration from the mother and siblings of the vendors/defendants to alienate the suit property to the purchaser/plaintiff within a period of two months from the date of agreement of sale, and the said copies in certified shall be handed over to the purchaser/plaintiff, prior to receiving third part of sale consideration as shown in clause 2 of the agreement.
- 18 -
Clause 7 of the Ex.P1 stipulates that the possession of the suit schedule property shall be handed over to the purchaser/plaintiff by the vendors/defendants immediately after receiving the third part of the sale price. The vendors/defendants shall undertake to fix the boundaries with actual measurements by getting the survey of the land within 60 days from the date of the agreement. In the event any variation/differences in the measurements other than the measurements shown in the schedule, in such an event the consideration amount shown in the agreement will be deducted/adjusted in the remaining balance sale consideration at the rate of Rs.520 per square feet.
Clause 9 of the Ex.P1 stipulates that the vendors have handed over the photo copies of the title records like R.T.C., Mutation, Endorsement from the Tribunal, Family tree, Bagapatti dated 01.11.1995,
- 19 - survey sketch, village map, sale deeds pertaining to the schedule property, death certificate of the father of the defendant No.1 and the vendors have agreed to deliver the same including C.M.C. Khatha and upto date tax paid receipts in original to the purchaser/plaintiff at the time of registration of the sale deed.
It is not in dispute that the plaintiff has performed the first two parts and an amount of Rs.5,00,000/- has been paid towards part sale consideration. It is the case of the plaintiff that the defendants were required to handover the certified copies of the documents as set out in clauses 3 and 6 within 60 days from the date of agreement of sale, failing which time will be extended till the defendants handover the said documents to the plaintiff/purchaser. The evidence of PW.1 would evince that the third part of payment of Rs.10,00,000/- was not paid since the defendants have failed to produce the documents relating to the betterment charges, tax paid receipts
- 20 - etc., as agreed. Clause 9 of the agreement makes it clear that the photocopies of the title records like R.T.C., Mutation, Endorsement, family tree, bagapatti, survey sketch, village map, sale deed pertaining to the suit property were handed over to the purchaser. C.M.C. Khatha and upto date tax paid receipts in original were required to be handed over to the plaintiff at the time of the registration of the sale deed. A conjoint reading of clauses 2, 3, 6 and 9 would contemplate that furnishing of betterment charges paid receipts as contended by the plaintiff was not a condition precedent to make the third part of the sale consideration amount. It is categorically admitted by the plaintiff during his cross-examination that he has not made payment towards third part of the sale consideration within the time stipulated in the agreement.
It is trite law that to establish the readiness and willingness, the purchaser need not tender the full
- 21 - amount agreed towards the sale consideration before the Court in deposit, but it is suffice if it is established that the plaintiff had sufficient means to make the full sale consideration.
It is well settled that the suit for specific performance being an equitable and discretionary relief, the plaintiff has to come before the Court with clean hands. The conduct of the plaintiff in filing multiple suits that too, seeking for mandatory/permanent injunction against the defendants relating to the suit schedule property being apparent, adverse inference has to be drawn against the plaintiff. It is glaring that the plaintiff filed O.S.No.4078/2002 seeking for a mandatory injunction against the defendants, directing the defendants to obtain Khatha, betterment charges receipt and tax paid receipt from the concerned authority in respect of the suit schedule property and no objections from sisters, brother and mother of the
- 22 - defendant No.1 and to handover the same to the plaintiff and restraining the defendants or their agents or anybody claiming under them from alienating the suit schedule property to any third person/s and grant such other reliefs. During the pendency of the said proceedings, O.S.No.3252/2003 was filed seeking for the relief of permanent injunction restraining the defendants, their agents or any body claiming under or through them from alienating or in any way creating charges in respect of the suit schedule property in favour of any third persons till the defendants repay the advance amount so received by them on 10.08.2001, 11.08.2001 and 16.08.2001 to the plaintiff with interest. Surprisingly, O.S.No.4078/2002 was withdrawn on 25.11.2003. It is significant to note that the liberty sought by the plaintiff to file a fresh suit on the same cause of action was rejected. Despite the same, the present suit in O.S.No.16507/2003 was filed
- 23 - on 28.11.2003. Subsequent to filing of the present suit, O.S.No.3252/2003 was withdrawn on 03.08.2004.
Hence, the present suit is not maintainable under Order 2 Rule 2 of CPC read with Section 41(h) of the Specific Relief Act, 1963 which prohibits granting of an injunction relating to the claim made on the agreement of sale. In order to express the readiness and willingness of the plaintiff, no demand was made by issuing any notice on the defendants calling upon them to register the sale deed.
Yet another point to be noticed is suit for injunction was filed on the ground that the plaintiff is in possession of the suit property which is contrary to the terms of the agreement. As per Ex.P1 no possession was handed over to the plaintiff. Having regard to the aforesaid, the Trial Court has rightly dismissed the suit for specific performance of the contract.
- 24 - Re: Point No.2:
However, while considering the alternative prayer of refund of part sale consideration amount of Rs.5,00,000/-, though the same has been duly acknowledged by the defendants, even in the written statement as well as in the evidence, the Trial Court has directed the defendants to refund Rs.3,50,000/- to the plaintiff which is ex-facie erroneous. Even the rate of interest awarded at 6% per annum appears to be on lower side having regard to the commercial nature of transaction. The defendants have enjoyed Rs.5,00,000/- from the date of the payment and the plaintiff has to be compensated in a just manner while ordering refund of the earnest money deposit. In the circumstances, we modify the same and direct the defendants to refund an amount Rs.5,00,000/- to the plaintiff with interest at the rate of 18% per annum from the date of the payment till its realisation.
- 25 - 31. Hence, the following ORDER i) The appeal is allowed in part.
ii) The suit of the plaintiff for specific performance of the contract is dismissed. The judgment and decree of the Trial Court directing the defendants to refund the amount of Rs.3,50,000/- to the plaintiff with interest at the rate of 6% p.a. from the date of agreement till its realisation is modified.
iii) The defendants are directed to refund an amount of Rs.5,00,000/- to the plaintiff with interest at the rate of 18% p.a. from the date of the payment till its realisation within a period of 90 days from the date of receipt of the certified copy of the judgment and order.
iv) In the event of defendants failing to make the payment within the specified period as aforesaid, a charge shall be created on the suit schedule property and the same can be executed by the plaintiff for recovery of the amount specified herein above.
- 26 -
v) No order as to costs.
vi) All pending I.As. stand disposed of accordingly.
Sd/- JUDGE
Sd/- JUDGE
PMR