Dismissed

D Madhavamurthy S/O Late v. G Doraiswamy v R Govindaswamy Since Dead by His Lrs

Karnataka HC4 Dec 2020RSA/3418/2006

Case brief

AI extract

What is this about?

Suit for specific performance of a 1980 agreement to sell land, which required conversion to non-agricultural use and reduction of a bank mortgage. Specific performance was refused below; refund of advance and conversion charges allowed. In this second appeal the High Court held the agreement too complex, contingent and uncertain to be specifically enforced, and dismissed the appeal.

What the court decided

AI extract

D Madhavamurthy S/O Late v G Doraiswamy Vs R… — Specific Performance | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF DECEMBER, 2020

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BEFORE

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THE HON’BLE MR. JUSTICE N.K. SUDHINDRARAO

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R.S.A.No.3418 OF 2006

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BETWEEN:

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1 . D MADHAVAMURTHY S/O LATE V G DORAISWAMY AGED ABOUT 68 YEARS RESIDING AT GERMANY REP.BY HIS PA HOLDER APPELLANT No.2(a) HEREIN

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2 . V D RENUBAI SINCE DEAD BY HER LR.,

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2(a). D. RAMAKRISHNAMURTHY S/O LATE V G DORAISWAMY AGED ABOUT 52 YEARS RESIDING AT No.51/9, OSBORNE ROAD CROSS BANGALORE – 560 042. …APPELALNTS

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(BY SRI ARUN K S, FOR SRI RAVI L VAIDYA, ADVOCATE FOR A-1) SRI D RAMAKRISHNAMURTHY, PARTY-IN-PERSON FOR A-2(a))

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AND:

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1 . R GOVINDASWAMY SINCE DEAD BY HIS LRS.

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1(a). MRS.RAJANI FRANCIS W/O EDWIN FRANCIS AGED ABOUT 56 YEARS RESIDING AT No.64 NANDIDURG ROAD, JAYAMAHAL EXTENSION BANGALORE – 560 046.

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1(b). R G LOGANATHAN S/O R GOVINDASWAMY AGED ABOUT 70 YEARS No.64, NANDIDURG ROAD JAYAMAHAL EXTENSION BANGALORE – 560 046.

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M/S. ASHOKA CORPORATION REP. BY ITS MANAGING PARTNER No.4, MAIN GUARD CROSS ROAD BANGALORE – 560 001.

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3 . K KURIAN S/O K RAJU AGED ABOUT 51 YEARS, 17/19, SPENCER ROAD, I CROSS, FRAZER TOWN, BANGALORE – 560 005.

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4 . JOHN KURIAN S/O K RAJU AGED ABOUT 50 YEARS 17/19, SPENCER ROAD, I CROSS, FRAZER TOWN BANGALORE – 560 005.

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5 . PRAMOD KURAIN S/O K KORAH AGED 64 YEARS 9, LANGFORD GARDENS BANGALORE - 560 025.

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6 . MRS. MARINA RAJU W/O K RAJU AGED ABOUT 72 YEARS, GREENSFIELD ESTATE SIDDAPUR, KODAGU, KARNATAKA.

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PRESENTLY AT No.17/19, SPENCER ROAD, I CROSS BANGALORE-560 005. …RESPONDENTS

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(BY SRI SHYAM KOUNDINYA A S, ADVOCATE FOR C/R-R-1(a) AND R-2 TO R-6)

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THIS RSA IS FILED U/S 100 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 15.09.2006 PASSED IN R.A.No.25/1994 ON THE FILE OF THE ADDITIONAL DISTRICT AND SESSIONS JUDGE/PRESIDING OFFICER, BANGALORE RURAL DISTRICT BANGALORE, DISMISSING THE APPEAL FILED AGAINST THE JUDGMENT AND DECREE DATED 16.6.1994 PASSED IN OS.No.93/1982 ON THE FILE OF THE 1^ST ADDITIONAL CIVIL JUDGE, BANGALORE DISTRICT BANGALORE.

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THIS RSA COMING ON FOR FURTHER HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is directed against the Judgment

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and decree dated 15-9-2006 passed in R.A.No.25/1994 by the learned Additional District and Sessions Judge and Presiding Officer, Fast Track Court-IV, Bangalore Rural District, Bangalore,

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wherein the appeal came to be dismissed and the judgment and decree dated 16.6.1994 passed in O.S.No.93/1982 by the I Additional Civil Judge, Bangalore District Bangalore came to be confirmed. Being aggrieved by the same, the plaintiffs have preferred this appeal.

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The operative portion of the judgment and decree passed in O.S.No.93/1982 dated 16.6.1994 is as under:

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“The suit is hereby decreed in part against the defendant No.1 in the following terms;

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The relief claimed for specific performance of the contract of agreement of sale dated 11.2.1980 is hereby dismissed.

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The alternative relief for refund of advance amount of Rs.15,000/- and also conversion charges of Rs.16,035/and Rs.500/being incidental expenses, is hereby allowed with interest at the rate of 12% from the date of the suit till the date of decree and 6% from the date of decree till the date of realization against defendant No.1.

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The claim for damages is hereby dismissed.

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The plaintiffs are also entitled for proportionate costs on this amount decree from defendant No.1.

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Suit against defendants 2 to 12 stands dismissed.

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Defendants 2 to 12 shall bear their own costs.”

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For the sake of clear understanding, it is

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necessary to mention that there are two plaintiffs and

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12 defendants in the original suit.

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In order to avoid confusion and overlapping,

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the parties are addressed in accordance with the

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ranks held by them before the trial Court.

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The substance of the case of the plaintiffs is

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as under:

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The suit was filed for the relief of specific performance of an agreement of sale dated 11.2.1980 stated to have been executed by defendant No.1 and

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for execution of the registered sale deed of the schedule property in his favour and also for the

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alternative relief of a direction to refund the advance amount of Rs.15,000/- and also conversion charges of Rs.16,035/- and incidental expenditure of Rs.5,000/together with interest at 19% p.a. and also to grant the relief of compensation amount of Rs.44,000/- in case court comes to the conclusion that the specific performance cannot be granted for any reason.

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The claim of the plaintiffs is that, defendant

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No.1 had executed a sale agreement dated 11.2.1980 agreeing to sell the schedule property bearing S.No.118/3 of Seegehalli village of Hoskote, Bangalore Rural District, for a cash consideration of Rs.60,000/and received Rs.15,000/- by way of advance. It was agreed between the parties that, the plaintiffs in furtherance of the said agreement were put in possession of the schedule property on 6.3.1980. The terms of the agreement are as under:

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Before the execution of actual sale deed, the suit schedule property must be get converted for non agricultural purposes;

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Loan amount due by the defendant No.1 in the form of mortgage of the schedule property with Canara Bank, Benson town, must be reduced to Rs.45,000/-.

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It is the further case of the plaintiffs that,

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after the agreement was entered into the plaintiffs acting through the Power of Attorney Holder get the land converted for non agricultural purpose and in that regard plaintiffs had to pay conversion charges of Rs.16,035/- to the Government, and also incurred incidental expenditure of Rs.5,000/-. In furtherance of the application filed by the plaintiffs, the Urban Ceiling Authority have also given clearance certificate on 23.10.1981. There was also condition under the sale agreement that liability created by defendant No.1 in the form of mortgage has to be brought to the limit of

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Rs.45,000/-. (It appears the calculation of

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Rs.45,000/- may be that the sale consideration of the property was Rs.60,000/- and advance amount paid was Rs.15,000/- and balance payable is Rs.45,000/and the loan was agreed to be restricted to Rs.45,000/-.)

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It is further claimed that, as the loan amount was growing big, plaintiffs exercised their influence with the Board of Directors and liability was reduced to Rs.68,502/-. At this stage, defendant No.1 requested and plaintiff agreed to pay additional sum of Rs.20,000/- and defendant No.1 had to pay Rs.3,502/- only to the said bank.

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It is further contended that plaintiffs

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worked on for getting the conversion of the land and property and also waiver of interest from the Canara bank and when all the formalities are cleared,

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defendant No.1 has to execute the registered sale deed. Defendant No.1 wanted to delay the execution of the registered sale deed. He began correspondence with the first plaintiff addressed at West Germany expressing his anxiety to perform the contract with intention to sell the plaint schedule property to some other person. The plaintiffs claim that they have been ever ready and willing to get the registered sale deed executed in respect of the suit property and defendant No.1 evaded performance of the agreement and ultimately defendant No.1 sold the plaint schedule property to defendant Nos.2 to 10 in breach of agreement dated 11-2-1980 executed in favour of plaintiffs.

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Defendant No.1 filed the written statement admitting the execution of the agreement and also receiving portion of the sale consideration and also the fact that the plaintiffs paid conversion charges. He

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has admitted the payment of advance amount and conversion charges, but denied the liability to execute the sale deed on the ground that, it is the plaintiff who had delayed the matter and evaded to get executed the Registered sale deed. The payment of incidental charges as claimed by the plaintiff is also denied.

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It is the case of defendant No.1 that though the agreement as referred by the plaintiff is on 11.12.1980, the plaintiffs failed to take possession of the suit property on 6.3.1980 or any other dates within the time frame fixed. Defendant No.1 claims that the agreement dated 11.12.1980 by virtue of alteration become unenforceable and deemed to have been cancelled.

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It is also the contention of the defendant No.1 that after the agreement was executed on 11.12.1980 plaintiff No.1 went to Germany and

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appointed the Canara bank as his power of attorney and informed the defendant (just treat defendant) that plaintiffs cannot buy the agricultural land unless it was converted for non agricultural purposes. Defendant No.1 did not take possession of the suit schedule property and consequently all the terms of the agreement dated 11.12.1980 were given up. It is the case of the defendant No.1 that even though terms of agreement was given up, defendant No.1 was making renewal efforts to the plaintiff No 1 to purchase the schedule property after it was converted for non agricultural purpose. The same is reflected through correspondence. The plaintiffs responded that they would consider them after the conversion and other aspects and thereby it was the plaintiffs who were dragging the completion of the sale formalities. Defendant No.1 got the said land converted for non agricultural purposes and also

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obtained the certificate from the Urban Land Ceiling Authority and not the plaintiffs as contended by the plaintiff. Similarly, it is the case of the defendant No.1 that he appealed to bank authorities that he being a retired army officer unable to pay interest as claimed and defendant No.1 agreed to pay the and settle mortgage amount of Rs.60,000/-.

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It is also alleged that defendant No.1 on 11.3.1982 when he wrote to the plaintiffs to purchase the property having certificate of conversion into non agricultural purposes, plaintiff No.1 in his letter dated 1.4.1982 stated that he would consider the enhancement of amount only after sale deed is registered which meant plaintiffs did not accept the defendants offer. Meanwhile, bank was demanding defendant No.1 for mortgage amount and therefore, defendant No.1 was compelled to sell the land to defendant Nos.2 to 10 thereby it is the case of

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defendant No.1 that the plaint schedule property were sold to defendant Nos. 2 to 10. Thus, defendant No.1 contend that because of pestering by the bank and shooting up of interest the property was sold.

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Defendant Nos.2 to 5 filed their written statement reiterating the contentions taken by defendant No.1 and they have further contended that they are the bonafide purchasers for value without notice of the sale agreement between the plaintiffs and defendant No.1 and therefore the suit against them is liable to be dismissed.

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Basing on the pleadings and contentions of both the parties and other material available on record, the learned trial judge framed the following issues and additional issues:

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“1.Whether the Agreement of sale dated 11.2.1980 entered into between the plaintiffs and the defendant subsisting?

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Whether the Plaintiffs had spent Rs.16,035/and the incidental charges of Rs.5,000/- to convert the suit schedule land form Agricultural to non-Agricultural purpose?

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3.Whether the 1^st plaintiff got the debt owned by the defendant to the Canara Bank reduced by using his good relationship with the Canara Bank?

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4. Whether the plaintiff performed their part of the Contract?

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5. Whether the Defendant proves that the Agreement of Sale 11^th Feb 1980 was given up as alleged in the written statement?

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6.Whether the plaintiff were always Ready and willing to perform their part of the Contract?

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7. Whether the plaintiffs were put in possession of the suit schedule land in pursuance of the Agreement of Sale 11.2.1980?

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8. Whether the plaintiff are entitled for a decree of specific performance of the Contract?

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9. If the plaintiff are not entitled for the decree of specific performance of the contract of sale, then whether the plaintiff are entitled for the alternative relief of damages and if so what amount?

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To what relief or reliefs the parties are entitled to?”

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Additional Issues framed on 6.11.1989.

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1. Whether the plaintiffs prove that they have got the suit schedule land converted from agricultural to non-agricultural purposes?

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2. Whether the defendants 2 to 12 prove that they have cleared the loan owed by the 1^st Defendant to the Canara Bank, Benson town branch, Bangalore ?

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3. Whether the defendants 2 to 12 prove that they are in possession of the suit schedule land in pursuance of Agreement of Sale dt:11.5.1982?

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4. Whether the plaintiffs prove that they got Clearance Certificate from Urban Ceiling Authorities for sale of the schedule land?

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5. Whether the suit is property valued and Court fee paid is sufficient?

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6. Whether the suit is maintainable without declaratory relief as stated in para 5(a) of the written statement filed by the Defendant 2 to 12?

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Additional Issues framed on 23.2.1994.

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1. Whether the Plaintiffs prove that Sri D.R.Murthy had the necessary power of authority to sign the plaint and to file the suit, if not whether the present suit is miantianable?

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2. Whether the suit is bared by law of limitation against defendant 2 to 12?”

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The trial judge was accommodated with the oral evidence of PW1-D.R.Murthy and PW2S.Vasantha Raju and documentary evidence of Exs.P1 to P32 on behalf of plaintiffs and oral evidence of DW1-Major Govindaswamy, DW2-Major Ibinizar; DW3-Muniraju; DW4-S. Channappa, DW5Muniyellamma, DW6-John Kurian and DW7- Kurian and documentary evidence of Exs.D1 to D71 on behalf of defendants.

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Upon conclusion of the trial, learned trial

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judge partly decreed the suit of the plaintiffs as mentioned above. Against the said judgment and decree, plaintiffs preferred an appeal in RA No. 25/1994 before the first appellate court which came

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to be disposed of earlier on 2-8-1997 and that came

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to be set aside by this court in RSA No.935/1997 on 2.2.1998 and matter was remanded to the first appellate court to consider Ex.P15 after giving opportunity to both the parties to adduce oral evidence if any. Thereafter, PW1 was recalled and examined and Exs.D72 and 73 were marked and appeal came to be dismissed on 15-09-2006. Against which, plaintiffs have preferred this regular second appeal.

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The appeal has been admitted by this court on 22-06-2009 to consider the following substantial questions of law:

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“1. Whether the Courts below were justified in dismissing the suit, despite the Trial Court coming to the conclusion that the agreement of sale dated 11.02.1980, Ex.P2 had been proved by the plaintiffs before the Trial Court and in that regard, whether the Courts below have considered the other evidence available on records in its correct perspective?

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2. Whether the Lower Appellate Court has committed perversity in coming to the conclusion that the defendants had proved repudiation of the agreement dated 11.02.1980 and in that regard, whether the evidence considered while noticing Ex.D15 would admit of perversity?

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3. Whether the re-consideration as made by the Lower Appellate Court is contrary and beyond the scope of the remand made by this Court by its judgment in RSA No.935/1997?”

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19. The following additional substantial

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questions of law also arise for consideration:

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“(1) In the context of circumstances and nature of the land at the time of entering into an agreement, whether the plaintiffs deserve specific performance in tandum?

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(2) Whether the conditions let out and the transaction taken place and bank loan of Rs.68,085/and plaintiffs insistence for reduction of interest on the bank loan to be reduced it makes the agreement or the case of the parties as multifarious and multi dimension?

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(3) Was it a case of defendant No.1 that he has put to unfair advantage because of the agreement and its development?”

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Heard Sri.Ravi L.Vaidhya counsel appearing for appellant No.1. Sri D.Ramakrishna Murthy.

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Appellant No.2, is prosecuting the appeal as party- inperson.

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The plaintiffs contend that the trial court and the appellate court as well did not consider the basic principles of Rules of Specific Performance. The trial court specifically came to the conclusion that the agreement was in force, but failed to recognize the consequential finding of executing the registered sale deed by the defendant No.1.

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The trial court has not considered the evidence on record and even the appellate court has not considered the direction given by this court in Regular Second Appeal 935/1997 on 2.2.1998 and proceeded on the footing if there was rescinded agreement.

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The lower appellate court also erred in holding that the trial court has held that plaintiffs/ appellants

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were never ready and willing to perform their part of agreement.

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When both the courts were not justified in refusing the relief of specific performance and the documentary evidence of conversion certificate dated 21.11.1980 as per Ex.P4 shows the readiness of the plaintiffs. But the period fixed for agreement is only six months. The trial court proceeded on the footing that the agreement was rescinded agreement and it was not in existence.

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Learned counsel for defendants/respondents Sri. Shyam Koundinya would submit that obviously the agreement alleged by the plaintiffs is unenforceable and bad in the eyes of law.

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Every stage of the agreement reveals that the plaintiffs were never ready and willing to perform their part of contract. The very structure of the agreement

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itself tells that plaintiff was never ready and willing to perform mandatory acts. It was submitted that the very intention of the plaintiffs is to get the land converted for non agricultural purposes and thereafter just to enjoy it as a real estate developer. In the process he has noted not only the conditions in the agreement and also the law.

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The date of sale agreement is 11.02.1980. The sale consideration agreed between the parties as on the date of agreement is Rs.60,000/-. Advance amount paid by the plaintiffs to defendant No.1 is Rs.15,000/-. The conditions in the sale agreement are:Defendant No.1 has to get the conversion of the property for non agricultural purpose and he has to reduce the bank liability to Rs.45,000/- before the sale deed is executed so that the plaintiffs can clear the liability on the execution of sale deed. Thus, as on the date of the agreement whatever was the liability

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existed with the Canara bank the same was bound to be reduced by defendant No.1 to Rs.45,000/- which pre supposes the sale consideration may not exceed Rs.60,000/-. Six months time was fixed for the defendant No.1 to complete the conditions of the agreement and the plaintiffs were to pay the balance consideration only at the time of execution of the registered sale deed.

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The trial court held that plaintiffs were not

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entitled for specific performance in tandum. On the other hand, they were entitled only for refund of advance amount. The trial court held that the agreement dated 11.2.1980 was not cancelled. Plaintiffs performed their part of contract and they were ready and willing to purchase. But it was specifically held that the plaintiffs were not entitled for specific performance.

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The question remains that whether parties

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have challenged the aspects stated in the findings to the issues, kind in this regard, it was submitted by learned counsel for appellants that they were not challenged.

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The plaintiffs in the circumstances according to learned counsel for respondents is not entitled for specific performance.

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Ex.D16, is a letter stated to have been sent

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by Major R. Govindaswamy to Mr. D.M.Murthy stating that the sale terms did not run smooth and difficulty is the escalation in the price because of increase of loan amount to Rs.88,000/- and property value also at Rs.88,000/brought differences between the defendant and plaintiffs were asked to send a separate cheque for Rs.19,000/- to Ramamurthy. Ex.D15 in the circumstances is the letter written by

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Major R. Govindaswamy to Mr. D.M.Murthy on 28-41982.

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28-4-1982

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“Mr.D.M.Murthy Wasserbergwes 6 D-Y Stuttgart.1 West Germany.

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My dear Mr. D M Murthy,

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Your letter dated April 1^st , 1982, acknowledging receipt of my earlier dated 11.3.1982, appears to have crossed my latest letter dated 29^th March 1982. However I have waited till this date before closing the offer contained in my letter dated 29.3.1982. As I have not received any communication to the said letter of 29.3.1982, I have most reluctantly decided to close the chapter. Hence I will repay the advance paid by you in due course and you are solely responsible for this situation inspite of my sincere efforts to avert the same.

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Let us be friends always and have no bittarences or bickerings.

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With best of good wishes.

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Yours sincerely.”

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One aspect of the matter that came up for

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consideration in the form of an issue is, whether the

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agreement was in subsistence? In this connection some features of the agreement are to be mentioned; which are as under:

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Date of filing of the suit is : 13.7.1982. Date of sale agreement is : 11.2.1980 - Ex.P2 Time for performance fixed in the agreement is : Six months.

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Para -6 of the said agreement spells out the time as it was agreed at six months.

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Advance sale consideration paid at the time of sale agreement is : 15,000/-.

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Remaining Rs.45,000/- were to be paid at the time of execution of the sale deed.

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The parties get involved in the blame game.

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It is stated that there was a loan lying with Canara

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Bank and without ascertaining what exactly was the

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loan amount, parties entered into an arrangement or

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consent that the sellar should bring down the loan

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amount to Rs.45,000/- and then communicate the purchaser, so that Rs.45,000/- which is payable by the seller/purchaser would be paid by the plaintiffs.

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It is in this connection number of

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correspondence and also one attributing the reason on

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another went on and it pulled on time like anything. It is also stated several conditions which by on face itself appears to be confusing and brings uncertainty in the agreement. For example, plaintiffs take up the responsibility of exercising their influence with Canara Bank officers and bring down the interest. Whether these things could be the part of contract between prudent persons showing the capacity of the plaintiffs of exercising influence for bringing down the interest. Meanwhile, it is stated that loan was discharged by R2 to 6. As on today it is stated that property is loan free.

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A prudent purchaser at the time of

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agreement would follow certain norms regarding sale consideration, time limit conditions. In other words, there was no definite conclusion as to the consideration. At one time, it was stated that balance was Rs.68,502/- in which event it was Rs.23,502/more than Rs.45,000/-. In the simple matter, correspondence grow like a big tale. In the result, the loan would go on increasing and details are not given what was the total amount of loan when it was discharged. The plaintiffs says amount was Rs.68,502/- and learned counsel for defendant No.1 says it was Rs.5,000/-. Be that as it may. The further responsibility is also to be on the purchasers to get the conversion order from agricultural purpose to non agricultural purpose i.e. for industrial purpose. This responsibility was also given to the purchasers to be completed within six months. The conversion was

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supposed to be done at the instance of the sellar within a period of six months. Conversion charges would be paid by the purchasers.

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At this stage, the following points are also

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necessary to be framed:

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Whether for specific performance for refund of advance money agreement should be subsisting?

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Whether the facts in the case involved too much of formalities, conditions and transactions bringing uncertainty?

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Whether an order to be clamped on the sellar to obtain it from the third party by the government is sustainable?

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Whether the parties can predict the time limit for completion of governmental formalities?

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Whether the relief of specific performance would be granted which attracts administration action by the government?

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Insofar as part performance of the contract

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is concerned, the learned trial judge has held in the affirmative. The Doctrine of part performance as

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contemplated under Section 53A of the Transfer of Property Act, 1882 is as under:

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“53-A. Part performance.—Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty,

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and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract,

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and the transferee has performed or is willing to perform his part of the contract,

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then, notwithstanding that 2[***] where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:

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Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.”

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In the light of other substantial questions

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of law the fact of part performance is not gone in detail. However, the registration of the schedule property was not effected within six months. The letter of conversion order was cleared by the concerned authority on 21.11.1990 as per Ex.P4. The advanceamount paid was Rs.15,000/neither

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increased nor decreased.

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In this connection, details of the amount

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paid by the plaintiffs and payable amount are not forthcoming. The amount mentioned in Ex.P4 is Rs.16,035/-. In this connection, it is necessary to mention that there is no whisper regarding exhibits marked. When sale agreement is effected and on that day the parties were confirmed to clear Rs.45,000/-.

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Any prudent purchaser or sellar would insist for mentioning on sale amount of Rs.45,000/-

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payable by the purchaser and it would have been simply paid to the bank, the encumbrance would have been clear. Thereby further submission or correspondence or transaction would have been avoided. Now the very sale consideration itself has become uncertain.

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Next aspect is regarding conversion. Para

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6 and 7 of the sale agreement are as under:

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“6. The vendor assures that the maximum time that would take to get the lands converted would not take more than six months and as soon as the conversion is got through, the final sale deed will be executed by the vendor or his attorneys. Thus the maximum time agreed upon to execute the sale deed is 6 months which naturally can be executed earlier any date the conversion is obtained.

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If for reasons beyond the control of the purchaser such as (a) refusal by the Government to accord permission to convert the land for non agricultural purpose (b) statutory embargo on the purchaser to non agricultural land and (d) operation of any law preventing the sale then this agreement shall stand cancelled and:

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(i) The vendor shall refund to the purchaser the advance of Rs.15,000/- paid;

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(ii) The purchaser shall hand over the scheduled property to the vendor in the same conditions as taken possession of on 6.3.1980.”

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It could have been read into two parts (1)

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the sellar assures to get the land converted for nonagricultural purposes within a period of six months and since the conversion is got through final sale deed

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shall be executed by vendor or his attorney and in case conversion is not made consequences are mentioned in para No.7 (a) (b) and (c) as under:

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(a) refusal by the Government to accord permission to convert the land for non agricultural purpose;

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(b) statutory embargo on the purchaser to non agricultural land and

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Thus, at the time of entering into the sale

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agreement the parties had a consensus that if the conversion is refused at any point of time the sellar will have to return the advance amount and deliver

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back the possession of the schedule property. As executed this reading relates to a legal question framed by this court.

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The very process of conversion is not a

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single window transaction. On the other hand first it

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has to pass through the zonal regulations as per CDP and ODP wherein the location of the property whether it falls in main road and related aspects have to be considered and it does not belonged to natural zone, the appeal period will be decided whether it is in accordance with the agreement and then development authorities role comes under Sections 13 or 14 where innumeral details comes. No doubt, for this, very certificate is necessary. For conversion of land, it does not end with mere conversion. The suitable location of the property as per the development authority rules are also very important.

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Thus whether a specific performance of the

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agreement imposes a duty of getting approval from the development authorities or civil authorities relief cannot be granted. Further, when it is to be converted for industrial purpose interest of the public also has to be looked into. Instead of going into all these details it could be held that agreement comes with numerous complexities, additional responsibilities regarding the conversion, payment of conversion fee and non payment, of amount payable to the bank (Rs.75,000 is paid to the bank on 1984). Ex.D15 which is the letter which is disputed by the plaintiffs and relied upon by the defendant No.1 is dated 28.4.1982. It is addressed to D.N.Murthy, brother of appellant No.1.

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Learned counsel for respondent Nos. 2 to 6 contended that copy of Ex-D15 was given to them by the bank. Thus simple contract for specific

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performance has been turned into numerous details and Ex.D1 indicates that conversion of land for non agricultural purpose that is from farm land into an industrial land. There is no whisper regarding control or environmental issue. Ex.D3 again relates to issue regarding the bank loan and as per Ex.D6 plaintiffs tells that he is having many bureaucratic problem is preventing him to get the work done. Ex.D11 again is a letter addressed to Govindaswamy regarding the loan amount. Ex.D4 is no exception to Ex.D11. Ex.D12 is the copy of the document wherein interestingly it was Ex.D16 a letter stated to have been sent by Govindaswamy to Murthy. As the sale terms did not run smooth the difficulty and escalation in the price because of the increase of loan amount to Rs.88,000/- and property value also at Rs.88,000/brought difficulties between the parties and plaintiff

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was asked to send a separate cheque for Rs.90,000/to Ramamurthy.

¶230

Insofar as the specific performance of contract of immovable property is concerned, there are several classification such as personal bars and contract which cannot be specifically enforced. In this connection, Section 14 of the Specific Relief Act has mentioned several circumstances, wherein the relief cannot be granted. In this connection it is necessary to mention the full text of Section 14 of the said Act, which reads as under:

¶231

“ 14. Contracts not specifically enforceable.-(1) The following contracts cannot be specifically enforced, namely:-

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(a) a contract for the non-performance of which compensation in money is an adequate relief;

¶233

(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms;

¶234

(c) a contract which is in its nature determinable;

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(d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.

¶237

(2) Save as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than an arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.

¶238

(3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of subsection (1), the court may enforce specific performance in the following cases:-

¶239

(a) where the suit is for the enforcement of a contract,-

¶240

(i) to execute a mortgage or furnish any other security for securing the repayment of any loan which the borrower is not willing to repay at once:

¶241

Provided that where only a part of the loan has been advanced the lendor is willing to advance the remaining part of the loan in terms of the contract; or

¶242

(ii) to take up and pay for any debentures of a company;

¶243

(b) where the suit is for,-

¶244

(i) the execution of a formal deed of partnership, the parties having

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¶246

commenced to carry on the business of the partnership; or

¶247

(ii) the purchase of a share of a partner in a firm;

¶248

(c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land:

¶249

Provided that the following conditions are fulfilled, namely:-

¶250

(i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work;

¶251

(ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for nonperformance of the contract is not an adequate relief; and

¶252

(iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed.”

¶253

Insofar as present case is concerned, it is

¶254

to be remembered that when the agreement was

¶255

entered into on 11.02.1980, the details of the same

¶256

are land is in Sy.No.118/3 of Seegehalli Village,

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Hosakote Taluk, Bangalore District measuring 04 acres. The sale consideration was Rs.60,000/-, purchasers were plaintiffs – D.Madhavamurthy and V.D.Renubai and the advance amount paid by purchasers was Rs.15,000/- and it was agreed to pay the balance sale consideration within six months and further covenant is that, there was a bank loan over the schedule property and the purchasers-plaintiffs to clear the loan in excess of Rs.45,000/- and which means the bank liability should be not more than Rs.45,000/- (may be considered as balance sale consideration payable).

¶259

Further covenant is, defendant No.1 was also tasked with getting the land converted for nonagricultural purpose within a period of six months. In this connection, I have noted the circumstances and conditions required for getting the conversion of an agricultural land. It is not only the Tahsildar who

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completes the formality by issuing the certificate, but zonal regulation, provision of developmental authority is required, as a matter of fact for getting the conversion order and no doubt, it is obtained on 21.11.1980. But the conversion itself is not a readymade position for a industry to start functioning and it is in this connection, the other functionaries concurrence also would require. May be they are not specifically entered into in the agreement, the context of conversion is the last aspect and after everything conversion includes the said activities. Thus, the contextual meaning of the agreement is that after the completion that means performance of agreement to be fixed subsequent to the seller obtaining certain government orders, which cannot be considered in the normal circumstances, because getting the very order is contingent and it may be ordered or refused under which circumstances, obtaining conversion order

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relates to performance of the order by the

¶264

government, granting of the order by the government. Private parties cannot enter into agreement wherein performance depends on the other aspect which is not in their hands or third party which includes government also. More particularly, when the agreement itself is contingent in nature granting of specific performance warrants with holding.

¶265

Further the agreement does not run like a

¶266

regular agreement. Price being agreed, the balance payable, time fixed for balance payable or it may be from the date of demand or refusal. But entrusted task to seller which means the agreement is determinable in nature, when defendant No.1 - seller is entrusted with getting the conversion order done. The agreement is something like one determinable in nature or government refused, it amounts to agreement which is determinable by the order of the

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government also. No doubt in this case, it has been ordered but at the same time the kind of agreement, performance may be controlled by the third party and the same cannot be accepted.

¶269

In this connection, the operative portion of

¶270

the order of the learned trial Judge is as under:

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“The suit is hereby decreed in part against the defendant No.1, in the following terms:-

¶272

The relief claimed for specific performance of the contract of agreement of sale deed dated 11.2.80 is hereby dismissed.

¶273

The alternative relief for refund of advance amount of Rs.15,000/- and also conversion charges of Rs.16,035/and Rs.500/- being incidental expenses, is hereby allowed with interest at the rate of 12% from the date of the suit till the date of decree and 6% from the date of decree till the date of realization against defendant No.1.

¶274

The claim for damages is hereby dismissed.

¶275

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The plaintiffs are also entitled for proportionate costs on this amount decreed, from defendant No.1.

¶277

Suit against defendants 2 to 12 stands dismissed.

¶278

Defendants 2 to 12 shall bear their own costs.”

¶279

Against the said decree the plaintiffs

¶280

preferred appeal in R.A.No.25/1994 and the appellate judge dismissed the appeal by confirming the

¶281

judgment and decree of the trial Court.

¶282

In the sense, when the contract runs into numerous facts like the one which incorporated in the agreement, cannot be accepted.

¶283

Insofar as readiness and willingness is concerned, it has to be determined by the conduct of – the parties. In this connection purchasers D.Madhavamurthy and V.D.Renubai and second plaintiff-Renubai stays in Germany and upon the

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death of Renubai one Mr. D.Ramakrishnamurthy who is stated to be a Chartered Accountant by profession started appearing in-person on behalf of deceased Renubai. Corespondence between R.Govindaswamy and purchaser-Madhavamurthy again

¶286

Ramakrishnamurthy and everything is focused on conversion order and finally, it came to be granted. But however, for the reasons stated by me, such type of agreement depending on minute details, performance of different acts which requires the discretion by third party or the authority cannot be accommodated. Further, first period that was mentioned was six months. What could have been done earlier was pulled down because of over negotiations between the parties. The agreement and performance were made to run too much complexities and uncertainties. The question of part performance

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has come into discussion. In this connection Section

¶289

53A of the Transfer of property Act is applicable.

¶290

Here, the duty cast on the purchasers is that they should have entered into possession of the property in pursuance of the contract or if already in possession need to be accepted and they should acknowledged to continue in possession under the agreement and they are ready and willing to do their part of performance. In this connection, the balance amount payable by purchasers is Rs.45,000/- being remitted that was their responsibility. However, the liability was taxed on the purchasers later they had right of subrogation of recovery and that did not happen. More over, the plaintiffs are not supposed to be persons who lack resources. One stays in Germany and insofar as person who participated in the proceedings, the person who present at the time of contract neither the party to the contract nor the

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party in person present at the time contract and he came as the plaintiff by virtue of death of plaintiff No.1. Thus, for years together payment on interest rate, influence on the bank and related are extraneous and unwarranted things are brought in to make the agreement complex. First defendant has specifically stated in his written statement that he discharged the sale agreement dated 11.02.1980 by writing a letter to plaintiff on 28.4.1982 for non-performance of contract on the part of the plaintiffs which is marked as Ex.D15.

¶293

This Court observed that main contention between the parties is, if Ex.P15 which is the notice terminating the agreement is properly considered by the court below then appropriate decision would have been arrived at. In this connection Ex.D15 puts an end even when it is in contextual to Exs.D1 and D15 and the result is parties were not that much in the

¶294

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context, it reveals innumerous correspondence bring out the fact that seller and the purchasers were not interested.

¶296

It is also brought to the notice that finally the bank loan mounted to Rs.88,000/- with interest and that was cleared by the purchasers from defendant No.1 and the sale consideration is stated to be Rs.1,30,000 plus bank dues. There is no statement on oath by plaintiffs. Insofar as evidence of PW.1 is concerned, it is the said – Ramakrishnamurthy who is the another son of Renubai-plaintiff No.2.

¶297

The agreement is complex, in nature, it leads to the multifarious aspects discretion of the third party and the Government as well. Further the plaintiff conduct at the relevant stage shows that he was not ready and willing to perform his part of contract.

¶298

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Considering the instances stated above, I

¶300

find that the trial Court though decreed the suit in part erred in holding that the plaintiffs were ready and willing. In the circumstances of the case, terms stated by the decree after dismissing the suit, I do not find there is any infirmity, illegality, lapses are there and I do not find any grounds are there to interfere with the judgment and decree passed by the trial Court which is confirmed by the first appellate Court and the appeal is liable to be dismissed.

¶301

The substantial questions of law raised in this appeal are answered accordingly.

¶302

For the afore assigned reasons, the appeal

¶303

is dismissed.

¶304

Sd/JUDGE

¶305

tsn*/HJ

D Madhavamurthy S/O Late v. G Doraiswamy v R Govindaswamy Since Dead by His Lrs

Case brief

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D Madhavamurthy S/O Late v. G Doraiswamy v R Govindaswamy Since Dead by His Lrs

Case brief

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What the court decided

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