Allowed

Sri N C Nanje Gowda v. M/S Brahmana Vaidika Dharma Sahaya Sabha

Karnataka HC20 Jun 2023RFA/1359/2008

Case brief

AI extract

What is this about?

The Court allowed an appeal against a decree for specific performance enforcing a pre-emptive rights clause. It held the suit was barred by limitation under Article 97 of the Limitation Act as the plaintiff filed it over a year after registration. Additionally, the allowance of an extension for depositing sale consideration was quashed as an error of law.

What did the court decide?

The appeal was allowed and the impugned judgment and decree dated 19.04.2008 were set aside.

Sri N C Nanje Gowda Vs M/S Brahmana… — Contract and Commercial Disputes | Karnataka HC (2023)

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1 - NC: 2023:KHC:21339 RFA No. 1359 of 2008

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 20^TH DAY OF JUNE, 2023

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BEFORE

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THE HON'BLE MR JUSTICE H.T. NARENDRA PRASAD

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REGULAR FIRST APPEAL NO. 1359 OF 2008 (SP)

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BETWEEN:

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SRI N C NANJE GOWDA S/O CHANNE GOWDA, HINDU, AGED ABOUT 40 YEARS R/AT NO 30/3-1, DEVANATHACHAR STREET CHAMARAJPET BANGALORE-560018

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SMT H J CHANDRAKALA W/O N C NANJE GOWDA, HINDU, AGED ABOUT 29 YEARS R/AT NO 30/3-1, DEVANATHACHAR STREET CHAMARAJPET

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BANGALORE-18

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…APPELLANTS

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Digitally signed by DHANALAKSHMI MURTHY Location: High Court of Karnataka

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(BY SRI. S GANGADHARA AITHAL, ADVOCATE)

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AND:

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M/S BRAHMANA VAIDIKA DHARMA SAHAYA SABHA REP BY ITS SECRETARY, VISHWANATH S/O LATE R V SHASTRY, AGED ABOUT 80 YRS., NO 23, WEST ANJANEYA TEMPLE STREET BASAVANAGUDI, BANGALORE-560004

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J S PRAKASH S/O B JAYASHANKAR AGED ABOUT 55 YEARS,

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NC: 2023:KHC:21339 RFA No. 1359 of 2008

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HINDU, No. 755, 13^TH CROSS, 22^ND MAIN, II PHASE, JP NAGAR BANGALORE-560078

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…RESPONDENTS

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(BY SRI. R1-M/S BRAHMANA VAIDIKA, ADVOCATE)

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THIS RFA IS FILED U/S 96 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 19/04/2008 PASSED IN O.S.NO.1850/2003 ON THE FILE OF THE VIII ADDL. CITY CIVIL JUDGE, BANGALORE, DECREEING THE SUIT FOR SPECIFIC PERFORMANCE OF SALE DEED.

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THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is filed by defendants 2 and 3 challenging the judgment and decree dated 19.04.2008, passed by VIII Additional City Civil Judge, Bangalore in O.S.No.1850/2003, whereby the suit filed by the plaintiff is decreed with costs.

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For the sake of convenience, parties are referred to as per their ranking before the trial Court.

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The case of the plaintiff is that plaintiff is an association registered under the Karnataka Societies Registration Act and they are the owners of the suit

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schedule property and have executed sale deed in favour of defendant No.1 by registered sale deed dated 18.05.1996, with a condition that in the event of the purchaser intending to sell, they must sell the said property to the plaintiff only at the rate at which they have purchased it. Defendant No.1 sold the suit schedule property in favour of defendants 2 and 3 by registered sale deed dated 12.06.2000. When the sale made in favour of defendants 2 and 3 came to the knowledge of the plaintiff, they have issued legal notice on 09.10.2002, for necessary compliance and they have filed the above suit with the following reliefs:

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a) the sale made by the 1^st defendant in favour of 2^nd defendant dated 29.6.2000 is in contravention of the sale deed dated 18.5.1996.

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b) directing the defendants to receive a sum of Rs.4,03,200/- from the plaintiff Sabha, and to execute the sale deed in favour of the plaintiff Sabha, with respect to suit schedule property. That, in the event of defendants fail to execute the sale deed inspite of decree, this

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Hon’ble Court be pleased to execute the sale deed through the agency of this Hon’ble Court on plaintiff Sabha depositing the said sum.

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c) for costs and such other reliefs as this Hon’ble Court may deem fit to grant in the facts and circumstances of the case.

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On service of summons, defendant No.1 remained unrepresented. Defendants 2 and 3 are represented through their counsel and filed written statement contending that the suit filed for specific performance is not maintainable. The only contention raised in the plaint is for enforcement of pre-emptive clause in the sale deed dated 18.05.1996. It is contended that to enforce the preemptive clause in the sale deed, they have to file a suit within one year from the date of knowledge. It is further contended that though the plaintiff is aware of the execution of sale deed dated 12.06.2000, the suit is filed in the year 2003 and hence the suit itself is barred by limitation. Further they have contended that in the sale deed, the vendor has no right to impose such a condition

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which is contrary to the provisions of the Specific Relief Act.

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On the basis of pleadings of the parties, the trial

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Court framed the following issues:

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1. Whether the plaintiff proves that defendant No.1 executed sale deed in favour of defendant No.2 against the terms and conditions of the sale deed dated 18.05.1996?

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1. Whether the plaintiff proves that the defendants are liable to execute sale deed in favour of the plaintiff on receiving Rs.4,03,200/- in respect of suit schedule property?

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1. Whether the defendant proves that the plaintiff has to pay separate Court fee for the Relief A and B?

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1. Whether plaintiff is entitled for the relief as prayed for?

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1. What order or decree?

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To prove the case of the plaintiff, plaintiff has

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examined it’s Secretary, Vishwanath as PW-1 and got marked 23 documents. Defendants have examined

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defendant No.2, Nanje Gowda as DW-1 and got marked 6 documents. On appreciation of the oral and documentary evidence, the trial Court has decreed the suit with costs and directed the plaintiff to deposit Rs.4,03,200/- in the Court on or before 6 months from the date of judgment and defendants are directed to execute the sale deed in respect of the suit schedule property within 2 months from the date of deposit of the said amount. Being aggrieved by the same, defendants 2 and 3 have filed this appeal.

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Sri. Gangadhara Aithal, learned counsel for the appellants / defendants 2 and 3 has firstly contended that the suit is filed by the plaintiff for enforcement of preemptive clause in the sale deed dated 18.05.1996. To seek such a relief, they have to file the suit within one year from the date the instrument is registered. To that effect, he has relied on Article 97 of the Limitation Act, 1963. The sale deed has been executed on 12.06.2000, and the suit is filed in the year 2003, and hence the suit is barred by limitation. Inspite of the defendants taking such

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a specific contention, the trial Court has failed to consider this aspect of the matter. Secondly, he has contended that the suit is filed for specific performance of contract. In fact, the relief sought by the plaintiff is for enforcement of pre-emptive clause in the sale deed dated 18.05.1996. Hence the trial Court has erred in decreeing the suit for specific performance, when the suit itself is not maintainable. Lastly, he has contended that there is a specific direction by the trial Court that the plaintiff shall deposit a sum of Rs.4,03,200/- in the Court on or before 6 months from the date of judgment. As per Section 28 of the Specific Relief Act, if such a direction is not complied, the suit itself has to be dismissed. Hence, he sought for allowing the appeal.

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Respondents are served. Respondent No.1/plaintiff was represented through their counsel.

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Later the counsel has issued notice to respondent No.1 to retire from the case and filed a memo for retirement from

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the case. This Court vide order dated 12.06.2012,

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permitted the counsel for the plaintiff to retire from the case. Plaintiff has not engaged the services of any other counsel.

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Heard learned counsel for defendants No. 2 & 3.

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The points for consideration before this Court

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are,

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1. Whether the judgment and decree passed by the trial Court is erroneous, perverse, arbitrary and calls for interference of this Court?

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1. What order?

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It is not in dispute that the plaintiff-Society is

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the owner of the suit schedule property. It is also not in dispute that the plaintiff has sold the suit schedule property by registered sale deed dated 18.05.1996 in favour of defendant No.1. There is a specific condition in the sale deed that “in the event of purchaser intending to sell, he shall sell it to plaintiff – BVDS Sabha only at the Government rate”. Later, defendant No.1 has sold the suit schedule property in favour of defendants 2 and 3 by

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registered sale deed dated 12.06.2000. The plaintiff has filed the suit for specific performance of contract. By going through the pleadings of the parties, it is very clear that the suit filed by the plaintiff is for enforcement of preemptive clause in the sale deed dated 18.05.1996. For enforcement of the right of pre-emption under Article 97 of the Limitation Act, the suit has to be filed within one year from the date of registration of the instrument. The sale deed is executed in favour of defendants 2 and 3 by defendant No.1 on 12.06.2000. The plaintiff has filed the suit in the year 2003. As per Article 97 of the Limitation Act, the suit itself is barred by limitation.

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The defendants 2 and 3 have taken a specific contention in the written statement that the suit filed by the plaintiff for specific performance of contract is not maintainable. As per the pleadings of the parties, it is very clear that the suit is filed only to enforce the right of pre-emption in the contract. The trial Court, contrary to the evidence of the parties and material available on

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record, has wrongly decreed the suit for specific performance of contract. Therefore the judgment and decree passed by the trial Court is perverse.

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The last point raised by the defendants 2 and 3 / appellants is that the trial Court has decreed the suit directing the plaintiff to deposit a sum of Rs.4,03,200/- in the Court on or before 6 months from the date of judgment. So far, the plaintiff has not deposited the decreetal amount either before the trial Court or before this Court. The same is contrary to Section 28 of the Specific Relief Act.

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The Hon’ble Apex Court in the case of P. SHYAMALA VS. GUNDLUR MASTHAN REPORTED IN 2023 SCC

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ONLINE SC 184 , has held as under:

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“22. Now so far as the reliance placed upon the decision of this Court in the case of Kishor Ghanshyamsa Paralikar (D) through Lrs. (supra),

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relied upon on behalf of the respondent is concerned, it is required to be noted that in the said case before this Court, the total sale consideration was Rs.8,78,500/-. The vendee paid a sum of Rs.7,31,000/- immediately. He was required to pay the remaining amount of Rs.1,47,500/- within a period of one month from the date of the compromise decree. There was a delay of five days only in paying the remaining amount of Rs.1,47,500/-. Therefore, in exercise of powers under Section 28 of the Specific Relief Act, this Court allowed the extension of time in favour of the decree holder to deposit the balance sale consideration. In the said decision, in paragraph 11, it is observed as under:

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‘11.This section gives to the vendor or the lessor the right to rescission of the contract for the sale or lease of the immovable property in the same suit, when after a suit for specific performance is decreed, if the vendor or the lessor fails to pay the purchase money within the period fixed. This section seeks to provide complete relief to both the parties in terms of a decree of specific performance in the said suit without having resort to a separate proceeding. Therefore, a suit for specific performance does not come to an end on the passing of a decree and the court which

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has passed the decree for specific performance retains control over the decree even after the decree has been passed. Section 28 not only permits the judgment-debtors to seek rescission of the contract but also permits extension of time by the court to pay the amount. The power under this section is discretionary and the court has to pass an order as the justice of the case may require. It is also settled that time for payment of sale consideration may be extended even in a consent decree. This Court in Smt. Periyakkal Vs. Smt. Dakshyani1, speaking through Chinnappa Reddy, J. observed that even in a compromise decree, the court may enlarge the time in order to prevent manifest injustice, and to give relief to the aggrieved party against a forfeiture clause. The Court observed the following:

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4.…………. The parties, however, entered into a compromise and invited the court to make an order in terms of the compromise, which the court did. The time for deposit stipulated by the parties became the time allowed by the court and this gave the court the jurisdiction to extend time in appropriate cases. Of course, time would not be extended ordinarily, nor for the mere asking. It would be granted

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in rare cases to prevent manifest injustice. True the court would not rewrite a contract between the parties but the court would relieve against a forfeiture clause; And, where the contract of the parties has merged in the order of the court, the court's freedom to act to further the ends of justice would surely not stand curtailed.’

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Therefore, as observed by this Court, the power under Section 28 of the Specific Relief Act is discretionary and the Court has to pass an order as the justice may require.

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Applying the law laid down by this Court in the aforesaid decision to the facts of the case on hand and considering Section 28 of the Specific Relief Act, we are of the opinion that the trial Court erred in exercising the discretion in favour of the plaintiff and erred in extending the time in favour of the plaintiff to deposit the balance sale consideration of Rs. 15,00,000/- by condoning the huge delay of 853 days, which as observed hereinabove has not been explained sufficiently at all. As observed hereinabove, after the plaintiff was directed to deposit the balance sale consideration of Rs. 15,00,000/- within a period of two weeks from the date of ex-parte judgment and decree dated 12.10.2013, which the plaintiff failed to deposit/pay,

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even no application for extension of time under Section 148 CPC and Section 28 of the Specific Relief Act was made thereafter within a reasonable time and was made after a period of 853 days. Nothing is on record that in between any notice was given to the defendant to execute the sale deed as per the judgment and decree on deposit of the balance sale consideration. The application filed by the plaintiff under Section 148 CPC and Section 28 of the Specific Relief Act seeking extension of time to deposit the balance sale consideration was hopelessly delayed. As observed hereinabove, Section 28 of the Specific Relief Act seeks to provide complete relief to both the parties in terms of a decree of specific performance. Therefore, the trial Court failed to exercise the discretion judiciously in favour of the defendant and erred in exercising the discretionary power in favour of the plaintiff, that too with a delay of 853 days. The High Court has erred in confirming the same and dismissing the revision applications. Under the circumstances, the order passed by the trial Court allowing the application of the plaintiff being I.A. No. 732/2016 seeking extension of time to deposit the balance sale consideration deserves to be dismissed and I.A. No. 914/2017 filed by the defendant – appellant under Section 28 of the Specific Relief Act to rescind

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the agreement to sell dated 9.5.2012 deserves to be allowed.”

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In view of the above said reason, I answer point

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No.1 in affirmative.

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Accordingly, I proceed to pass the following:

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ORDER

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The appeal is allowed.

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The judgment and decree dated 19.04.2008, passed by the VIII Addl. City Civil & Sessions Judge, Bangalore in O.S.No.1850/2003 is set aside. Consequently, the suit filed by the plaintiff is rejected.

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SD/JUDGE

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Sri N C Nanje Gowda v. M/S Brahmana Vaidika Dharma Sahaya Sabha

Case brief

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Sri N C Nanje Gowda v. M/S Brahmana Vaidika Dharma Sahaya Sabha

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