Dismissed

Dastgir Khan v. Shri B L Krishna Murthy

Karnataka HC12 Jan 2021RSA/2189/2006

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed the revision applying against the confirmation of a decree for specific performance. It held that subsequent purchasers were not bona fide due to suspicious timing and conduct, and that the sale was not protected by lis pendens.

What did the court decide?

Confirmation of the judgment and decree of the trial court and the first appellate court granting specific performance.

Dastgir Khan Vs Shri B L Krishna Murthy — Contract and Commercial Disputes | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 12^th DAY OF JANUARY, 2021

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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.2189 OF 2006

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BETWEEN:

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Dastgir Khan S/o. Pachakhan Major, Kaidala Road

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Gulur, Tumkur Taluk - 572101

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Abdul Rasheed

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Since dead by LR’s

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2(a). Mohammed Ansar S/o. late Abdul Rasheed Aged about 38 years R/at. Gulur Village, Kunigal Main Road

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Tumakur Taluk and District

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...Appellants

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(By Sri.P.N.Nanja Reddy, Advocate)

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AND:

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Shri B.L.Krishna Murthy Since dead by his LRs.

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(a). Smt. Gowramma W/o. B.L.Krishna Murthy

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Aged about 60 years

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(b). Shri. B.K.Raghavendra S/o. B.L.Krishna Murthy Aged about 40 years

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(c). Shri. B.K.Yogeesha S/o. B.L.Krishna Murthy Aged about 36 years

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(d). Smt. Poornima D/o. B.L.Krishna Murthy Aged about 42 years All are R/o. Gulur Village Kondapura Cross (Behind Ganesh Tiles) Tumkur Taluk & Dist.-572 118

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Smt. S.Gangamma Since dead by her Lrs. (a) Sri. G.N.Nataraj S/o. S.K.Nanjappa Aged about 60 years

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(b) Sri. G.N.Swamy S/o. S.K.Nanjappa Aged about 58 years Both are R/a. ‘Ganga’ Behind Water Works Grape Garden Road 1^st cross, Vidyanagar Tumkur – 572 103

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…Respondents (By Sri.G.S.Balagangadhar, Advocate, for R1(a-d); Ms.Deepashree, Advocate for C/R1; R2-a and R2-b are served)

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This RSA is filed u/S 100 of CPC., against the judgment and decree dated:27.6.2006 passed in R.A.No.113/2006 (RA 157/2001) on the file of the Presiding Officer, Fast Track Court-V, Tumkur, dismissing the appeal and confirming the judgment and decree dated:12.11.2001 passed in O.S.No.609/1989 on the file of the Prl. Civil Judge (Jr.Dn.) & JMFC I Court, Tumkur.

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This RSA Coming on for hearing this day, the Court delivered the following:

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JUDGMENT

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This appeal is directed against the judgment and decree passed in R.A.No.113/2006 (Old No.157/2001) dated 27.06.2006 by the Presiding Officer, Fast Track Court-V, Tumkur, wherein the appeal filed by the appellants/defendant Nos.1 and 2 was dismissed by confirming the judgment and decree passed in O.S.No.609/1989 dated 12.11.2001 by learned Prl. Civil Judge (Jr.Dn.) & JMFC, Tumkur.

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In order to avoid confusion and

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overlapping, the parties are addressed in accordance with their status as stood in the trial court.

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The summary of this case is, a suit was filed in O.S.No.609/1989 by the plaintiff - Krishnamurthy against 1st defendant Gangamma for specific performance of the agreement dated 15.12.1986. The suit of the plaintiff was dismissed for

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default on 16.06.1994. The present appellants have purchased the schedule property from 1st defendant on 22.06.1994. The trial court passed the judgment and decree against 1st defendant and decreed the suit of the plaintiff for specific performance of the agreement on 12.11.2001. 2^nd and 3^rd defendants are the subsequent purchasers.

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Being aggrieved by the said judgment and decree, 1st defendant-Gangamma has preferred an appeal in R.A.No. 88/2006 (Old No.151/2001) and 2^nd and 3^rd defendants preferred an appeal in R.A.No.113/2006 (Old No.157/2001). First Appellate Court dismissed both the appeals and confirmed the

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judgment and decree passed by the trial court in the

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original suit.

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This appeal is preferred by the purchasers

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– Dastagir Khan and Abdul Rasheed against plaintiff - B.L.Krishana Murthy and 1st defendant - Gangamma.

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They claim that they purchased the property as innocent buyers and they are the bonafide purchasers for consideration. The seller who is 1st defendant has not preferred any appeal challenging the judgment and decree of the appellate court.

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6. At the time of admission, on date this Court

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has framed the following substantial question of law:

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“Whether sale of immovable property effected after the dismissal of the suit filed for specific performance of agreement of sale, for nonprosecution and before the restoration of the suit, is hit by the principles of lis pendence enunciated under Section 52 of the Transfer of Property Act?”

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The appellants before this court are the purchasers of the schedule property from 1^st

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defendant – Gangamma and they have preferred R.A.No.113/2009 (Old No.157/2001).

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The substance of the case of the plaintiff is,

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1^st defendant entered into an agreement in writing on 15-12-1986 with plaintiff agreeing to sell a building

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site measuring about 3 3/4^th guntas in survey No.150/3 gramatana of Gulur village, Tumkur Taluk, for a sale consideration of Rs.32,000/-. The said property is the portion of K.No.351. Defendant received Rs.5,000/- as advance from the plaintiff and that the sale transaction is to be completed within a period of three months. It is further contended that 1^st defendant undertook that she will get the katha of the schedule property and other revenue records and to deliver all the documents of title to the plaintiff at the time of execution of the sale deed. Plaintiff was ever

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ready and willing to perform his part of contract and repeatedly demanded the 1^st defendant, but she has adopted evasive attitude. Plaintiff got issued a notice on 18.4.1988 which was served on 1^st defendant on 25-4-1988. But she has not chosen to reply the same. It is further stated that, 1^st defendant is making attempt to alienate the schedule property. Therefore, he sought for a direction to the 1^st defendant to execute the sale deed in his favour in terms of the agreement dated 15-12-1986.

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1^st defendant –Gangamma appeared and

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filed her written statement denying the plaint allegations. It is further contended that she has agreed to sell the schedule property in favour of Abdul Rasheed Sab on 13-4-1988.

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2^nd and 3^rd defendants filed their written statement contending that they are the subsequent

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purchasers under a valid sale deeds and by virtue of the same, they have acquired valid legal right over the properties as the suit itself was not pending on that date.

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Learned counsel Sri. P. N.Nanjareddy for appellants/defendant Nos. 2 and 3 submits that appellants have purchased the schedule property under a valid circumstances and without any legal embargo. Further he submits suit of the owner/1^st defendant was dismissed for non prosecution and application for restoration was not filed and it is exactly during that time the schedule property was purchased by the appellants. Thus it cannot be called as a subject matter purchased was involved in the litigation. He would further submit that plaintiff without right filed a suit and lost it both procedurally and substantially. It is also submitted that 1^st defendant sold the schedule property with a bonafide

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interest for a valuable consideration and his clients/2^nd and 3^rd defendants are equally innocent.

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1^st defendant Gangamma who had sold the property to the appellants had no knowledge of preparation of the plaintiff- Krishna Murthy on filing the application.

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Learned counsel Sri. G.S.Balagangadhar would submit that he represents R1(A to D) and supports the Judgment and degree passed by the court below. Insofar as 1^st defendnat-Gangamma is concerned, she sold away the property and she has not contested and preferred the appeal against the judgment passed by the first appellate court.

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Now with clarity, it is to be mentioned that there are two regular appeals resulting from R.A.No.113/2006 that is preferred by purchaser Dasthagir Khan and Abdul Rashid Khan who are 2^nd and 3^rd defendants in the plaint. Insofar as

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B.L.Krishna murthy is concerned, there is no appeal. Gangamma is 1^st defendant/appellant in RA No.88/2006.

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In totality of the circumstances, the points that are clear are:

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Plaintiff Krishnamurthy and 1^st defendant -Gangamma entered into the agreement dated 15-12-1986 wherein a residential site measuring 3 3/4^th guntas in survey No.150/3 Gramathana of Guluru Village,Tumkur Taluk which is the suit schedule property was agreed to be sold for a price of Rs.32,000/- to the plaintiff;

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The property forms a portion of katha No.351; on the date of the sale agreement 1^st defendant received an amount of Rs.5,000/- as advance and the sale transaction is to be completed within a period of three months from the date of agreement. 1^st defendant undertook

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that she would get the katha and other relevant documents pertaining to schedule property in tact. As the things did not go in accordance with the plaintiff’s claim under the agreement and 1^st defendant Gangamma evaded to execute the sale deed, plaintiff got issued a legal notice dated 18.4.1988 directing Gangamma to receive the balance sale consideration and to execute the sale deed and also put the plaintiff in possession. Though 1^st defendant received notice she did not chose to reply.

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The plaintiff claims that he has been ever ready and willing to perform his part of contractual duties and the cause of action is claimed to arose on 15-12-1986.

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Insofar as 1^st defendant Gangamma is concerned, she denied the plaint averments and contended that there was no cause of action to the

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plaintiff. 1^st Defendant further claim that plaintiff filed suit in O.S.No.609/1989 that was instituted on 23.9.1989 and the said suit was dismissed for non prosecution on 16.6.1994. 1^st defendant Gangamma sold the schedule property to 2^nd defendant to the extent of 1 3/4^th guntas out of 3 ¾ guntas what was in her name in survey No.150/3 of Guluru Village for a valuable consideration. The registered sale deed was effected on 22.6.1994. Similarly, 1^st defendant Gangamma sold the remaining land of 1 ¾ guntas out of the total property in the said survey of Guluru village in favour of 3^rd defendant for a valuable consideration on 22.6.1994. Thus, the properties were sold on 22.6.1994. Meanwhile the original suit in OS No.609/1989 that was dismissed for non prosecution was sought to be restored on 18.6.1994.

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On the basis of the pleadings and contentions of both the parties, learned trial judge

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framed the issues in respect of proving of agreement, payment of cash consideration as advance amount and whether the suit is violative of Section 132 of the Karnataka Land Revenue Act.

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The learned trial judge was accommodated with the oral evidence of PW1-B. Krishnamurthy, PW2-Gangarangaiah and documentary evidence of Ex.P1 to P11 on behalf of plaintiff and oral evidence of DW1-Gangamma, PW2-Abdul Rasheed, PW3Dasthagir Kan and PW4-Jayaramaiah and documentary evidence of Ex.D1 to D22 on behalf of defendants.

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Upon conclusion of the trial, the learned trial judge decreed the suit of the plaintiff which was challenged by 1st defendant and 2^nd and 3^rd defendant in two separate regular appeals as stated above which came to be dismissed.

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In the circumstances, it is necessary to

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observe one aspect that, 1^st defendant - Gangamma never opposes seriously regarding the sale agreement

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in favour of 2^nd and 3rd defendant. The written statement of 1^st defendant is not available in the paper book filed by the appellants. However, it is seen from the trial court records that she has filed her written statement. She denies the execution of the sale agreement, receipt of consideration from the plaintiff. She admits the receipt of legal notice, but contended that ready and willingness of the plaintiff is false and does not arise. Alternatively, she contends that as per the terms of the agreement relied upon by the plaintiff, the time is the essence of contract and by virtue of expiry of three months, agreement collapsed and it is not in force. Thus according to her, she had entered into sale agreement with 2^nd and 3^rd defendants on 13.4.1988. In this connection, it has to

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be seen the date of sale agreement with plaintiff is

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15.12.1986. 2^nd and 3^rd defendants are the

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purchasers.

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Out of the entire pleadings, the evidence

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and the submissions, claims and contentions, the following point are amply clear:.

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(i) The sale agreement is stated to have been executed on 15-12-1986 as per plaintiffB.L. Krishna Murthy to sell the schedule property for a sum of Rs.32,000/- and received an amount of Rs.5,000/- by way of advance and the time was the essence of contract and this is supposed to have been completed on or before 14^th March 1986 and that did not happen. This is one of the contentions taken by 1^st defendant Seller.

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(ii) 2^nd and 3^rd defendants have purchased each 1 ¾ guntas both under separate deeds totally 3 ¾ guntas owned by 1^st defendant-Gangamma. Ownership of Gangamma on the schedule property is not disputed and cannot be also because it is the suit for specific performance.

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(iii) Suit in O.S.No.609/1989 while in progress was dismissed for non prosecution on 15-6-1994 and restoration application was filed on 18-6-1994 within three days. Thus, the application is filed well within limitation. Incidentally, the application was allowed, the sale of the property by 1^st defendant happens on 22.6.1994 i.e. 3 or 4 days after the filing of the

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restoration application. However, for the purpose of any lis, that when the mater it starts from the date and time and presentation of the pleadings or petition.

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But in this case, it is the 2^ND AND 3^RD defendant claim that they were no knowledge of the same. Insofar as bonafide purchasers is concerned, ‘bonafide’ literally means ‘good faith’ and person should have good faith, good intention and upright behavior in talking and action and on the other hand, he has to walk what he talk and reasonable enquiry has to be made. One cannot go on holding torch every where to see whether the property is encumbered i.e. kind of reasonable enquiry any ordinary prudent person will do. Of course in terms of the property this is a small in extent. However, the law applicable is same whether it is 3 ¾ guntas or 500 ares. However, he has to make all the efforts to establish that he is a bonafide purchaser for value.

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Now insofar as the attitude is concerned, 1^st

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defendant-Gangamma tells that she has not entered into any agreement and she is represented and in her written statement she specifically denies it. Incidentally brings an alternative statement in her written statement wherein she claims that sale agreement is entered into on 15-12-1986 and time granted was three months and time was the essence of contract. As such, by the time of filing of the suit on 23.8.1988 before the trial judge, apparently three months had elapsed.

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Regarding essence of contract, is concerned very often it is mentioned in certain agreement that time is the essence of contract. But in case of agreement for immoveable properties time is not the essence of contract unlike commercial contract, more particularly in market like cocoon market and

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vegetable market wherein few hours of delay will frustrate the contract and the reason is obvious the falsity of frequency of change of price. But insofar as immoveable property is concerned, time is not the essence of the contract normally. However, time could be made essence of the contract in respect of immoveable property by a subsequent notice by seller.

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The seller has to cause notice to the purchaser that time limit has expired, the latter not come forward for registration and reasonable time has to be given asking him to come and get execute the registered sale deed by paying consideration within a reasonable time. Even then also if the purchaser does not come forward, within such time agreement expires and plaintiff cannot make utilization of three years period as contemplated under the Limitation Act. In this case, 1^st defendant-Gangamma alternatively

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contends that time is not the essence of the contract. It cannot be considered her as rustic villager who does not know what is happening or what kind of document she is entering into. More particularly, timing of execution of sale deed in favour of 2^nd and 3^rd defendant also to be noted. Thereafter, when the suit is decreed and the same is confirmed in regular appeal, Gangamma bids adieu to the proceedings and she does not even preferred an appeal against the same as it is quite understandable that she has sold the property. But the question is, whether the previous agreement is there. Further more it is stated that Gangamma had entered into an agreement to sell the schedule property to 2^nd and 3^rd defendants on 13.4.1988 and the sale agreement of the plaintiff is dated 15.12.1986.

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Here, Section 52 of the Transfer of property Act as under:

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“52. Transfer of property pending suit relating thereto.— During the 1[pendency] in any Court having authority 2[3[within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by 4[the Central Government] 5[* * *] of 6[any] suit or proceedings which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.”

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The suit is not hit by the above provision of law.

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In the matter of discussion, I do not agree with the finding that the agreement is not wrote and at the same time, action of Gangamma is very calculated. She took calculated risk even in making her alternative statement with position of law.

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Insofar as 2^nd and 3^rd defendants are concerned, they are brothers and they got sale deed executed in their favour. But the circumstances are

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not proper for the very reason, nodoubt a particular order is passed based on the default, either to lead evidence or to file written statement or to make appearance when adverse order is passed normally legal provisions are such an accommodative that they provide alternative and a similar proceedings to remove the obstructions that came because of default for the reasons beyond control of the persons who claims be it restoration of suit, setting aside exparte decree, seeking permission for filing written statement so on so forth. When the sale agreement dated 15.12.1986 was being rejected and when the proceedings were pending, choosing a date after the dismissal and getting the registered sale deeds in their favour, does not appears to be fair means of behaviors to qualify for calling a persons as bonafide purchasers.

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In the further circumstances of the case,

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priority interest as contemplated under Section 48 of Transfer of Property Act has also to be looked into. In the totally of the circumstances, I find contextual sale agreement in favour of plaintiff is proved and it is duly executed and may be with the sequence of events and date of sale agreement dated 15.12.1986 and the suit is filed on 23-8-1988. The plaintiff had a sound sleep for over more than 2 years it was just like unconsciousness and he also should have entered into say his contract of readiness and willingness. Nodoubt

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he was curious to get the registered sale deed but by action he did not and has issued legal Notice on 18.4.1988. He started getting bothered for the specific performance in the year 1988. He filed restoration application on 18.6.1994 followed the matter except filing of the suit at the earliest opportunity and there is a delay. However, I find 2^nd and 3^rd defendants are

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not bonafide purchasers for a value as their approach does not satisfy the requirement. Agreement is proved and 1^st defendant Gangamma is not the owner. This is a acrobatic problem wherein 1^st defendant executed the sale agreement, suit was filed after two years for specific performance. Meanwhile 1^st defendant has sold the property to 2^nd and 3^rd defendants, this court has come to the conclusion that they are not bonafide purchasers. But by virtue of the sale effected by Gangamma the title cannot pass on to the bonafide purchasers. Considering the conduct and approach, there is no hesitation to decree the suit as prayed for. Non preferring an appeal by Gangamma also has to be considered seriously.

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In the whole set of circumstances, the learned trial judge rightly decreed the suit in favour of the plaintiff which is confirmed by the appellate court. There is no infirmity or illegality or irregularity

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in the judgment and decree passed by the trial court

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and confirmed by the first appellate court.

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The appeal is devoid of merits and the same is liable to be dismissed. The substantial questions of law are answered according.

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For the aforesaid reasons, the appeal is devoid of merits and it is dismissed confirming the judgment and decree of the trial court and the appellate court.

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Sd/-

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HJ/tsn*

Dastgir Khan v. Shri B L Krishna Murthy

Case brief

What is this about?

What did the court decide?

Dastgir Khan v. Shri B L Krishna Murthy

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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