Allowed

Devatha Venkata Satya Naga Sridhar Subbarao, v. Kodi Venkata Subbarao

Andhra Pradesh HC18 Aug 2023SA/207/2023

Case brief

AI extract

What is this about?

The High Court allowed the second appeal and set aside the lower courts' decrees granting specific performance in a sale agreement dispute. The court held the lower courts erred in decreeing the suit without sufficient evidence of the plaintiff's readiness and willingness to pay the balance consideration, especially given the appellant status as a bona fide purchaser.

What did the court decide?

The second appeal is allowed; impugned judgment and decree are set aside; original suit stands dismissed.

Devatha Venkata Satya Naga Sridhar Subbarao, Vs… — Specific Performance | Andhra Pradesh HC (2023)

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HIGH COURT OF ANDHRA PRADESH :: AMARAVATI

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+SECOND APPEAL No.207 of 2023

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Betwe	en:
# Deva S/o.	tha Venkata Satya Naga Sridhar Subbarao Venkataratnam.	…	Appellant
	And
$ Kodi Busi Pala	Venkata Subbarao, S/o Satyanarayana Murthy enss, D.No.33-2-1, 17^thWard, Atchugatlapalem kol and 7 others. …	. Res	pondents
JUDG	MENT PRONOUNCED ON18.08.2023
	THE HON’BLE DR.JUSTICE K. MANMADHA	RAO
1.	Whether Reporters of Local newspapers may be allowed to see the Judgments?	-	Yes -
2.	Whether the copies of judgment may be marked to Law Reporters/Journals	-	Yes -
3.	Whether Their Ladyship/Lordship wish to see the fair copy of the Judgment?	-	Yes -

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___________________________________ DR.JUSTICE K. MANMADHA RAO

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* THE HON’BLE DR.JUSTICE K. MANMADHA RAO

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+SECOND APPEAL No.207 of 2023

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% 18.08.2023

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Between:

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Devatha Venkata Satya Naga Sridhar Subbarao S/o. Venkataratnam. … Appellant And $ Kodi Venkata Subbarao, S/o Satyanarayana Murthy Busienss, D.No.33-2-1, 17^th Ward, Atchugatlapalem Palakol and 7 others. …. Respondents

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! Counsel for the Petitioner : Sri P. Rajasekhar, Sri E.V.V.S Ravi Kumar Counsel for Respondent: Sri M. Lakshmi Narayana

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<Gist :

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Head Note:

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? Cases referred:

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2006(4) Supreme 131

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Civil Appeal Nos.2843-2844 of 2010, dated 27.8.2020

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Appeal (Civil) No.418 of 2001

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Appeal (Civil) No.6764 of 2001

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HON’BLE DR. JUSTICE K. MANMADHA RAO

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SECOND APPEAL No.207 of 2023

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JUDGMENT:

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The present Second Appeal is preferred by the appellant aggrieved by the Decree and Judgment dated 31.10.2022 passed in A.S.No.40 of 2015 on the file of X Additional District Judge, Narsapur, confirming the decree and judgment dated 06.04.2018 passed in O.S No.125 of 2011 on the file of Senior Civil Judge, Narsapuram.

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The appellant herein is the 2^nd defendant, the 1^st respondent is the plaintiff and the respondents No.2 to 8 are the legal heirs of the 1^st defendant in the suit. Originally the suit in O.S No.125 of 2011 was filed before the Senior Civil Judge, Narsapuram (for short “the trial Court) by the 1^st respondent/plaintiff for specific performance of sale agreement dated 22.03.2011.

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For convenience the parties are hereinafter referred to as arrayed before the Additional District Judge, Narsapuram (for short “the first appellate Court”) in A.S.No.40 of 2015.

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The 1^st defendant is the absolute owner of 94.2 square yards of site in the 9^th ward (presently 16^th ward), Shahakarpeta, Palakol i.e., plaint schedule property. She purchased the same under a registered sale deed dated 18.6.1990 and she offered to sell it to the plaintiff for Rs.7,53,778/-. The plaintiff paid Rs.5,00,000/- towards advance to the 1^st defendant on condition that the balance sale consideration should be paid on or before 9.5.2011, and in case of default, the plaintiff has to pay interest @ 2% p.m. Further, in case of default by 1^st defendant, she has to pay interest at the same rate on the advance amount and the interest shall be deducted out of the balance consideration. The plaintiff issued registered notice 20.4.2011 demanding the 1^st defendant to receive the balance consideration of Rs.2,53,778/- and execute registered sale deed on or before 9.5.2011. During pendency of the said suit, the 1^st defendant executed a registered sale deed dated 5.5.2011 in favour of the 2^nd defendant in order to defeat the rights of the plaintiff. The sale deed will not bind the plaintiff. The 2^nd defendant also executed registered sale deed. Hence the plaintiff filed the suit before the trial Court.

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The 1^st defendant filed written statement and denied all the averments made in the plaint. It is stated that there is long standing business rivalry between the plaintiff and the husband of 1^st defendant and agreement might have been, therefore fabricated by forging the signatures of 1^st defendant in collusion with his associates and followers. It is also stated that the 1^st defendant issued a reply notice dated 28.4.2011 and the same was received by the plaintiff. Further, the 1^st defendant reserves right to take criminal action against the plaintiff under Sections 468 and 420 IPC. Hence, prayed to dismiss the suit.

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The 2^nd defendant also filed written statement and denied the plaint averments and alleged what 1^st defendant did in her written statement. It is stated that he is a bona fide purchaser for consideration. The suit is bad for misjoinder of parties. Hence, prayed to dismiss the suit.

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On the impleadment of 2^nd defendant, 1^st defendant

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filed additional written statement pleading that 2^nd defendant is a bona fide purchaser for valuable consideration.

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Basing on the above pleadings, the trial Court

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framed the following issues:

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Whether the agreement of sale dated 22.03.2011 is true, valid and binding on the defendant?

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Whether the plaintiff is entitled to the suit claim as prayed for?

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To what relief?

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Thereafter, an additional issue was also framed after the

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impleadment of 2^nd defendant:

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Whether the 2^nd defendant is a bona fide purchaser for consideration?

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During course of trial, on behalf of the plaintiff, he himself was examined as PW.1, the first attestor of the agreement was examined as PW.2; PW.3 was also examined but did not appear for cross examination and Exs.A1 to A4 were marked. On behalf of the defendants, DWs.1 to 4 were examined and Exs.B1 to B5 were marked.

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After considering the oral and documentary evidence, the trial Court decreed the suit and directed the plaintiff to deposit an amount of Rs.2,53,778/- on or before 6.6.2018, and on such deposit, the 1^st and 2^nd defendants are directed to execute a registered sale deed in favour of the plaintiff, within a period of two(2) months from the date of

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such deposit. The trial Court further held that the 1^st defendant is entitled to receive the above said amount on execution of registered sale deed and the defendants do pay to the plaintiff a sum of Rs.85,848/- towards costs of the suit. Aggrieved by the same, the 2^nd defendant preferred an appeal in A.S No.40 of 2015 before the first appellate Court. After hearing the both sides, the first appellate Court has framed points for consideration as under:

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i) Whether the 2^nd defendant is a bona fide purchaser for consideration or not?

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ii) Whether the findings under the impugned judgment dated 06.04.2018 made by learned Senior Civil Judge, Narasapur need to be interfered for getting the impugned judgment and decree set aside?

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iii) If so, to what relief?

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Basing on the facts and circumstances of the case, the first appellate Court has dismissed the Appeal suit holding that it is inevitable to hold that the learned Senior Civil Judge, Narasapur, after having considered overall pleadings of both parties to the suit and evaluated both the oral and documentary evidence let in on their behalf in proper perspective, rightly decreed the suit and therefore interference with the findings made by learned Trial Court is

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absolutely unwarranted. Challenging the same, the present second appeal came to be filed.

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While both counsels prepared to argue the matter finally, this Court also decided to dispose of the matter at the admission stage with the consent of both the counsels. Further, the appellant counsel has raised the following substantial questions of law in the grounds appeal:

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i) Whether the courts below are right in decreeing the suit for specific performance basing on the pleadings of the plaintiff about his financial capacity and the readiness and willingness expressed by him in the plaint without there being any evidence both oral and documentary and the 1^st defendant specifically denied Ex.A1 agreement of sale?

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ii) Whether the courts below are right in decreeing the suit without giving any specific finding with regard to the plea taken by the 2^nd defendant about the bona fide purchase made by him for value without notice?

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iii) Whether the alleged admissions of DW.1 pointed out by the courts below would benefit the plaintiff without their being any material showing his readiness and willingness in the above matter?

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Heard Sri P. Rajasekhar, learned counsel

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representing Sri E.V.V.S. Ravi Kumar, learned counsel appearing for the appellant and Sri M. Lakshmi Narayana, learned counsel appearing for the respondent.

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Learned counsel for the appellant mainly contended that the Courts below erred in holding that the 1^st defendant herein executed Ex.A1 agreement of sale and it is true, valid and binding on the parties. The Courts below should have seen that the appellant herein is a bona fide purchaser for value without notice under Ex.B4 and also should have seen that the case of the plaintiff is that the balance of sale consideration has to be paid on or before 9.5.2011, whereas, the Ex.A2 notice was sent on 20.4.2011

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i.e., just 19 days prior to expiry of the date fixed for paying the balance of sale consideration. However, the suit is filed on 03.05.2011 even before the date fixed for payment of balance sale consideration. He further submits that the Courts below should have seen that according to plaintiff that he paid Rs.5,00,000/- substantial portion, there is no explanation as to why he did not pay the remaining balance on same date and obtained the sale deed and also should have seen that the 1^st defendant totally denied the execution of Ex.A1 Agreement of sale and her signatures on Ex.A1. Moreover without comparing the signature on Ex.A1 with that of admitted signatures of Ex.B1, decreed the suit

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erroneously. He further submits that the Courts below failed to appreciate the contents of reply notice dated 20.04.2011 while decreeing the suit. He mainly contended that the Courts below failed to give any finding with regard to the bona fide purchase made by the appellant herein.

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To support his contentions, learned counsel for the appellant has relied upon a decision of Hon’ble Supreme Court reported in Hero Vinoth (Minor) versus

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Seshammal¹ , wherein the Hon’ble Apex Court held that :

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“The principles relating to Section 100 CPC, relevant for this case, may be summerised thus:-

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(i) An inference of fact from the recitals or contents of a document is a question of fact. But the legal effect of the terms of a document is a question of law. Construction of a document involving the application of any principle of law, is also a question of law. Therefore, when there is misconstruction of a document or wrong application of a principle of law in construing a document, it gives rise to a question of law.

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(ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable legal issue. A substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to such legal principle. In the second type of cases, the substantial question of law arises not because the law is still debatable, but

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1 2006 (4) Supreme 131

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because the decision rendered on a material question, violates the settled position of law.

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(iii) The general rule is that High Court will not interfere with concurrent findings of the Courts below. But it is not an absolute rule. Some of the well recognized exceptions are where (i) the courts below have ignored material evidence or acted on no evidence;

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(ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof. When we refer to 'decision based on no evidence', it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding.

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On the other hand, learned counsel for the respondents submits that though the 1^st defendant issued reply, the plaintiff falsely pleaded that no reply was issued. The signatures of 1^st defendant on the agreement are not the same. He further submits that there is no proof that the plaintiff’s readiness and willingness. Expressing readiness and willingness is not sufficient without deposit of balance consideration. The suit was filed to defeat 2^nd defendant’s sale deed. The plaintiff is a broker n real estate, well0versed in litigation, filed suits in Palakol, having criminal cases against him. The suit is one of such cases the 2^nd defendant is a bona fide purchaser for consideration and possession was handed over to 2^nd defendant, 2^nd defendant is paying taxes, hence sale deed is genuine.

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To support of his contentions, the learned counsel

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for the respondents has relied upon a judgment reported in

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(i) Nazir Mohamed versus J.Kamala and Ors .² , wherein the

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Hon’ble Apex Court held that :

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. To be a question of law “involved in the case”, there must be first, a foundation for it laid in the pleadings, and the question should emerge from the sustainable findings of fact, arrived at by Courts of facts, and it must be necessary to decide that question of law for a just and proper decision of the case.

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(ii) In a case of M.M.S. Investments, Madurai and

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Ors. V. V.Veerappan and Ors^.3 , wherein the Apex Court held that:

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“After the conveyance, the only question to be adjudicated is whether the purchaser was a bona fide purchaser for value without notice. In the present case the only issue that can be adjudicated is whether the appellants were bona fide purchasers for value without notice. The question whether the appellants were ready and willing is really of no consequence.”

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(iii) In a case of Guruswamy Nadar versus

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P.Lakshmi Ammal(D) through LRs. & Ors .⁴ , wherein the

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Apex Court held that :

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“..the only question which was argued was whether the principle of lis pendens will be applicable or Section 19 of the Specific Relief Act will have overriding effect to which we have already answered. In the present case the principle of lis pndens will be applicable as the second sale has taken place after the

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2 Civil Appeal Nos.2843-2844 of 2010, dated 27.8.2020

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3 Appeal (Civil) No.418 of 2001

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4 Appeal (civil) No.6764 of 2001

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filing of the suit. Therefore, the view taken by the Division Bench of the High Court is correct…”

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On a perusal of the material available on record this Court observed that, as per the evidence of plaintiff, he issued legal notice under Ex.A20 on 20.04.2011 and he did not obtain the postal acknowledgment from the 1^st defendant. The 1^st defendant issued reply dated 28.04.2011 under Ex.B2 and the same was received by the plaintiff on 02.05.2011. This Court further observed that there is no date on Ex.B3 acknowledgment about the receipt of reply notice by the plaintiff. This Court further observed that as per Ex.B4 the consideration was mentioned in the sale deed executed by 1^st defendant for Rs.6,12,500/- whereas the consideration mentioned in the agreement of sale under Ex.A1 is Rs.7,53,778/-. This Court further observed that as per Ex.A2 notice which was received by the 1^st defendant clearly reveals that the 1^st defendant executed a sale agreement for the consideration mentioned therein and other terms and conditions of the agreement.

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It is an admitted fact that the appellant herein is a bona fide purchaser for value without notice under Ex.B4.

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Further, when the 1^st defendant/2^nd respondent herein requested the plaintiff/1^st respondent herein to send the document for giving a detailed reply, the plaintiff/1^st respondent without sending the document filed the suit for specific performance. This Court further observed that, according to plaintiff/1^st respondent, he paid Rs.5,0,000/substantial portion, but there is no explanation as to why he did not pay the remaining balance on the same date and obtained the sale deed. The 1^st defendant/2^nd respondent herein totally denied the execution of Ex.A1 agreement of sale and her signatures on Ex.A1. Moreover, without comparing the signatures on Ex.A1 with that of admitted signatures of Ex.B1 decreed the suit.

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It is pertinent to mention here that as per Section 16(c) of the Specific Relief Act, 1963 (for short “the Act”), specific performance of a contract cannot be enforced, which reads as under:

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“16. Personal bars to relief : Specific performance of a contract cannot be enforced in favour of a person – (a)…

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(b)….

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(c). Who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.”

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And as per Section 19 (b) and 20 of the Act, reads as

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under:

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Relief against parties and persons claiming under them by subsequent title :- Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against –

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(a)….

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(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;

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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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On a perusal of above sections, it clearly

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established that, where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money except when so directed by the Court. In the present case, the balance of sale consideration has to be paid by the plaintiff/1^st respondent on or before 9.5.2011, whereas, the Ex.A2 notice was sent on 20.04.2011 i.e., just 19 days prior to expiry of the date fixed for paying the balance of sale consideration. Moreover, the suit was filed on 03.05.2011 even before the date fixed for payment of balance sale

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consideration. Further, according to plaintiff/1^st respondent that he paid Rs.5,00,000/- substantial portion, but there is no explanation as to why he did not pay the remaining balance on the same date.

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In view of the foregoing discussion and considering the submissions made by both the learned counsels, whatever the substantial questions of law raised by the appellant are satisfied and hence this Court is of the view that, the judgments and decrees passed by the Courts below are not proper and liable to be set aside.

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Accordingly, the Second Appeal is allowed. The impugned judgment and decree dated 31.10.2022 passed in A.S.No.40 of 2015 on the file of the X Additional District Judge, Narsapur, confirming the judgment and decree dated 06.04.2018 passed in O.S No.125 of 2011 on the file of the Senior Civil Judge, Narsapur, are hereby set aside. Consequently, the O.S.No.125 of 2011 on the file of the Senior Civil Judge, Narsapur, stands dismissed. There shall be no order as to costs.

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As a sequel, all the pending miscellaneous applications shall stand closed.

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______________________________ DR. K. MANMADHA RAO, J.

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Date : 18-08-2023 Note : L. R copy to be marked.

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(b/o)Gvl

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HON’BLE DR. JUSTICE K. MANMADHA RAO

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