Allowed

Sri K S Gopal Krishna Setty v. Sri B S Harish

Karnataka HC8 Sept 2022RFA/1420/2013

Case brief

AI extract

What is this about?

The High Court allowed an appeal against a decree for specific performance. The Court held the contract void as Benami under the new Act due to admitted evidence linking the purchase to the appellant's father. The appeal was allowed, decree set aside, and appellant ordered to refund consideration.

What did the court decide?

Judgment and decree set aside; Defendant to refund Rs.3 Lakhs with 9% p.a. interest within three months.

Sri K S Gopal Krishna Setty Vs Sri B S… — Contract and Commercial Disputes | Karnataka HC (2022)

¶1

¶2

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8^TH DAY OF SEPTEMBER, 2022 PRESENT

¶3

THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR

¶4

AND

¶5

THE HON'BLE MR. JUSTICE UMESH M. ADIGA

¶6

REGULAR FIRST APPEAL NO. 1420 OF 2013 (SP)

¶7

BETWEEN :

¶8

Digitally signed by S P SUDHA Location: High Court Of Karnataka

¶9

SRI. K.S. GOPAL KRISHNA SETTY S/O LATE SRINIVASA SETTY AGED 60 YEARS M.G.ROAD CHIKMAGALUR-577 101 …APPELLANT

¶10

(BY SHRI. C.N. KAMATH, ADVOCATE)

¶11

AND :

¶12

SRI. B.S. HARISH S/O SRI. B.P. SHIVALINGE GWODA AGED 40 YEARS CONTRACTOR R/O AT BANDAHALLI VILLAGE KASABA HOBLI, BELUR TALUK HASSAN-573 201 …RESPONDENT

¶13

(VIDE ORDER DATED 29.07.2022 NOTICE IS HELD SUFFICIENT ON SHRI. B.S. HARISH)

¶14

THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 11.06.2013 PASSED IN O.S.NO.41/2008 ON THE FILE OF SENIOR CIVIL JUDGE,

¶15

¶16

CHIKMAGALUR, DECREEING THE SUIT FOR SPECIFIC PERFORMANCE OF CONTRACT.

¶17

THIS RFA COMING ON FOR HEARING, THIS DAY, P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING:

¶18

JUDGMENT

¶19

This appeal by the defendant is directed against the judgment and decree dated June 11, 2013 in O.S. No.41/2008 passed by the Senior Civil Judge, Chikmagalur, decreeing the suit for specific performance and directing the defendant to execute the sale deed.

¶20

For the sake of convenience, parties shall be referred as per their status before the Trial Court.

¶21

Brief facts of the case are, plaintiff and defendant entered into an agreement dated November 12, 2007 where under defendant agreed to sell the suit schedule property at the rate of Rs.168/- per sq. ft. and received a sum of Rs.10,000/- in cash simultaneously with the execution of the agreement and another sum of

¶22

¶23

Rs.2.90 Lakhs by cheque and in all a total sale consideration of Rs.3 Lakhs.

¶24

Plaintiff's case is, after execution of the

¶25

agreement, he called upon the defendant by issuing a legal notice dated February 18, 2008 to execute a sale deed. Defendant did not accede to plaintiff's request. Plaintiff was always ready and willing to perform his part of the Contract. With these averments, plaintiff brought

¶26

the instant suit with a prayer to direct the defendant to execute the sale deed.

¶27

Defendant resisted the suit by filing written statement, but admitted the receipt of Rs.3 Lakhs. With regard to the legal notice, defendant's case is, he had cancelled the agreement after replying to the legal notice. According to him, plaintiff did not come forward to get the sale deed executed within the stipulated time. There was a dispute between the members of defendant's family and

¶28

¶29

he had offered to refund the advance sale consideration by

¶30

sending a cheque to the plaintiff.

¶31

6. With the above pleadings, parties went to trial.

¶32

Based on the pleadings, the learned Trial Court framed

¶33

following issues:

¶34

1. Whether the plaintiff proves that he was always ready and willing to perform his part of contract?

¶35

2. Whether defendant proves that he has handed over all the documents as mentioned in the sale agreement to plaintiff?

¶36

3. Whether defendant proves that he has cancelled the sale agreement as the plaintiff has not come forward for registration of the sale deed?

¶37

4. Whether defendant proves that he has sent a cheque bearing No.548485 dt:5.3.2008 for Chikmagalur branch, towards refund of advance amount to plaintiff?

¶38

5. Whether the plaintiff is entitled for specific performance of the contract?

¶39

6. What order or decree?

¶40

On behalf of the plaintiff, two witnesses were

¶41

examined as P.Ws. 1 & 2 and Exs. P1 to P6 marked.

¶42

Defendant has examined himself as D.W.1 and got Exs. D1

¶43

¶44

to D7 marked. Answering issues No.1, 4 and 5 in the affirmative and issues No.2 and 3 in the negative, the Trial Court has decreed the suit.

¶45

Shri. C.N. Kamath, learned Advocate for the appellant contended that:

¶46

plaintiff-respondent has let in his evidence by filing his affidavit. But he did not subject himself to crossexamination and his evidence has been discarded by order dated 11.08.2010. Subsequently, P.W.2 was examined on behalf of the plaintiff;

¶47

in the cross-examination, PW.2 has admitted that the suit property was required for his father and his father had got the agreement made in the name of the plaintiff. At the material point of time, his father was in the money lending business.

¶48

He submitted that plaintiff had no cause of

¶49

action at all because, in the light of P.W.2's admission, the person who had intended to purchase the suit property

¶50

¶51

was P.W.2's father. He had sought to purchase the property in the name of the plaintiff. Therefore, such transactions are void in law.

¶52

Thus, in substance, defendant's case is, the transaction was hit by Benami Transactions (Prohibition) Act, 1988. Further P.W.2's evidence cannot be considered because, he had no personal knowledge of the transactions.

¶53

We have considered the submission made on behalf of the appellant-defendant and perused the records.

¶54

Though served, respondent-plaintiff has

¶55

remained absent.

¶56

In the light of the above pleadings on record and the contentions urged on behalf of the appellantdefendant, the following points arise for our consideration:

¶57

¶58

(1) Whether the contract is lawful?

¶59

(2) Whether the evidence of P.W.2 could be considered to grant the decree of specific performance?

¶60

(3) Whether the judgment and decree calls for any interference?

¶61

Re: Point No.1

¶62

Shri. Kamath is right in his submission that P.W.2 has admitted in his cross-examination that the property was required for his father and he had got the agreement made in the name of the plaintiff. Section 3 of the Benami Transactions (Prohibition) Amendment Act, 2016, prohibits any Benami transaction. In view of the admitted position that P.W.2's father has got the agreement made in the name of the plaintiff, we are of the view that the contract between the plaintiff and defendant is void.

¶63

Re: Points No.2 & 3

¶64

The evidence tendered by P.W.1 has been discarded by the Court vide order dated 11.08.2010 on the

¶65

¶66

ground that P.W.1 did not subject himself for crossexamination and that order has attained finality. P.W.2 had no personal knowledge of the transaction between the plaintiff and the defendant. Shri. Kamath has placed reliance on Mohinder Kaur Vs. Sant Paul Singh¹ . In the said authority, it is held as follows:

¶67

8. The agreement was cancelled by the appellant on 1-9-1989 and the consideration already paid confiscated under intimation to the respondent. The respondent never challenged the communication of cancellation. In Sikandar (I.S. Sikandar v. K. Subramani, (2013) 15 SCC 27) it was observed as follows: (SCC p. 38, paras 37-38)

¶68

“37. As could be seen from the prayer sought for in the original suit, the plaintiff has not sought for declaratory relief to declare the termination of agreement of sale as bad in law. In the absence of such prayer by the plaintiff the original suit filed by him before the trial court for grant of decree for specific performance in respect of the suit schedule property on the basis of agreement of sale and consequential relief of decree for permanent injunction is not maintainable in law.

¶69

38. Therefore, we have to hold that the relief sought for by the plaintiff for grant of decree for specific performance of execution of sale deed in respect of the suit schedule property in his favour on the basis of nonexisting agreement of sale is wholly unsustainable in law.”

¶70

1 (2019)9 SCC 358

¶71

¶72

One another aspect that needs to be noted is,

¶73

appellant-defendant had sought to return the advance sale consideration by sending a cheque. P.W.2 has admitted in

¶74

cross-examination that the cheque was received but respondent-plaintiff did not encash the same and returned it to the defendant. The respondent-plaintiff did not diligently prosecute the suit and abandoned it half-way by not subjecting himself for cross-examination. In this appeal also, respondent-plaintiff has chosen to remain absent. The suit is of the year 2008. To a pointed question by this Court as to whether appellant-defendant is willing to refund the amount, Shri. Kamath, on instructions from his client submits that defendant is willing to refund the advance sale consideration of Rs.3 lakhs with interest at 9% p.a. from the date of receipt till the date of payment within an outer limit of three months from today.

¶75

In view of the above, both points No.1 and 2 are answered in the negative. Therefore, this appeal merits consideration and hence, the following:

¶76

10 -

¶77

ORDER

¶78

(a) Appeal is allowed ;

¶79

(b) Judgment and decree dated 11.06.2013 in

¶80

O.S. No.41/2008 passed by the Senior Civil Judge,

¶81

Chikmagalur is set-aside;

¶82

¶83

Rs.3 Lakhs with interest at 9% p.a. from 12.11.2007 till the date of payment and such payment shall be made within an outer limit of three months from today.

No costs.

Sd/JUDGE

Sd/JUDGE

SPS List No.: 1 Sl No.: 67

Sri K S Gopal Krishna Setty v. Sri B S Harish

Case brief

What is this about?

What did the court decide?

Sri K S Gopal Krishna Setty v. Sri B S Harish

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Union of India Vs M/S Akshaya Agro Sales Pvt. Ltd.

The Commissioner of Income Tax Vs M/S Narayan Builders

M/S Kammavari Sangham Vs the Deputy Director of Income Tax

Smt a S Namratha Vs Sri a Shivakumar

Sri M S Arunachalam Vs Mrs Sienthi Kathrine Obed

Sri G Lokesh Vs M/S Sri Enterprises