Partly allowed

A C Rathnakar Since Deceased by His Lrs v. Sri M S Sridhar

Karnataka HC3 Feb 2023RFA/1532/2012

Case brief

AI extract

What is this about?

This judgment affirmes the trial court's decree granting specific performance of two sale agreements regarding properties in Bengaluru. The High Court enhanced the sale consideration from Rs.8 lakhs to Rs.25 lakhs per agreement to meet the ends of justice, confirming the trial court's finding on the validity and enforcement of the contracts.

What did the court decide?

Confirmed decree for specific performance but enhanced sale consideration from Rs.8,00,000/- to Rs.25,00,000/- per agreement. Plaintiffs granted three months to deposit enhanced balance.

A C Rathnakar Since Deceased by His Lrs Vs Sri M S… — Specific Performance | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 3^RD DAY OF FEBRUARY, 2023

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BEFORE

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THE HON'BLE MR. JUSTICE V. SRISHANANDA

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R.F.A. NO.1532/2012 C/W

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R.F.A. NO.1533/2012

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R.F.A. NO.1532/2012:

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BETWEEN:

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A.C. RATHNAKAR

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SINCE DECEASED BY HIS LRS

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SMT. PADMA RATHNAKAR W/O LATE A.C. RATHNAKAR SINCE DECEASED BY HER LRS.,

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SRI. A.R. MAHESH ALSO S/O LATE A.C. RATHNAKAR

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1 (a) AGED ABOUT 48 YEARS R/AT NO.120/23, M.M.V. ROAD, VISWESWARAPURAM, BANGALORE-560 004

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SMT. REKHA ALSO D/O LATE A.C. RATHNAKAR

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1 (b) AGED ABOUT 56 YEARS R/AT NO.75, VANIVILAS ROAD, BASAVANAGUDI, BANGALORE-560 004

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SMT. RENUKA ALSO D/O LATE A.C. RATHNAKAR

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1 (c) AGED ABOUT 54 YEARS R/AT NO.56, MIDDLE SCHOOL ROAD, V.V.PURAM, BANGALORE-560 004

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SMT. RADHIKA ALSO D/O LATE A.C. RATHNAKAR 1 (d) AGED ABOUT 52 YEARS R/AT NO.1509, 9TH MAIN, JAYANAGAR III BLOCK, BANGALORE-560 011

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SMT.JYOTHI ALSO D/O LATE A.C. RATHNAKAR 1 (e) AGED ABOUT 50 YEARS R/AT NO.4/6, NEW NO.2787 PADMA NIVAS, 5TH MAIN, JAYANAGAR IV BLOCK, BANGALORE-560011

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...APPELLANTS

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(BY SRI. G.R. ANANTHARAM, ADVOCATE)

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AND:

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SRI. M.S. SRIDHAR AGED ABOUT 45 YEARS

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SRI. M.S. JANARDHANA GUPTA AGED ABOUT 40 YEARS

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SRI. M.S. KRISHNA PRASAD AGED ABOUT 36 YEARS

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SRI. M.S. HARISH AGED ABOUT 34 YEARS

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ALL ARE SONS OF SRI MANANDI SRINIVASA SETTY ALL ARE R/AT NO.19, 4^TH MAIN ROAD, CHAMARAJPET, BANGALORE-560018.

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…RESPONDENTS

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(R1 IS SERVED BUT UNREPRESENTED; SRI S.K.V.CHALAPATHY, SERNIOR COUNSEL FOR SRI S.V.SRINIVASA, ADVOCATE ALONGWITH SRI SUBRAHMANYA KAUSHIK R.S., ADVOCATE FOR R2 TO R4)

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THIS RFA IS FILED UNDER SECTION 96 AND UNDER ORDER XLI RULE 1 OF CPC, 1908, AGAINST THE JUDGMENT AND DECREE DATED 21.04.2012 PASSED IN O.S.NO.6281/1994 ON THE FILE OF THE XI-ADDL. CITY CIVIL JUDGE, BANGALORE CITY, DECREEING THE SUIT WITH COSTS.

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IN R.F.A. NO.1533/2012: BETWEEN:

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A.C. RATHNAKAR SINCE DECEASED BY HIS LRS

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SMT. PADMA RATHNAKAR W/O LATE A.C. RATHNAKAR SINCE DECEASED

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SRI. A.R. MAHESH ALSO S/O LATE A.C. RATHNAKAR

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1 (a) AGED ABOUT 48 YEARS R/AT NO.120/23, M.M.V. ROAD, VISWESWARAPURAM, BANGALORE-560 004

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SMT. REKHA ALSO D/O LATE A.C. RATHNAKAR 1 (b) AGED ABOUT 56 YEARS R/AT NO.75, VANIVILAS ROAD, BASAVANAGUDI, BANGALORE-560 004

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SMT. RENUKA ALSO D/O LATE A.C. RATHNAKAR

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1 (c) AGED ABOUT 54 YEARS R/AT NO.56, MIDDLE SCHOOL ROAD, V.V.PURAM, BANGALORE-560 004

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SMT. RADHIKA ALSO D/O LATE A.C. RATHNAKAR 1 (d) AGED ABOUT 52 YEARS R/AT NO.1509, 9TH MAIN, JAYANAGAR III BLOCK, BANGALORE-560 011

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SMT.JYOTHI ALSO D/O LATE A.C. RATHNAKAR 1 (e) AGED ABOUT 50 YEARS R/AT NO.4/6, NEW NO.2787 PADMA NIVAS, 5TH MAIN, JAYANAGAR IV BLOCK, BANGALORE-560011

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...APPELLANTS (BY SRI. G.R. ANANTHARAM, ADVOCATE)

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AND:

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SRI. M. SRINIVASA SETTY SINCE DECEASED BY HIS LRS

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SRI. M.S. BALAKRISHNA SETTY AGED ABOUT 68 YEARS S/O LATE M. SRINIVASA SETTY

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SRI. M.S. SATHYANARAYANA SETTY AGED ABOUT 66 YEARS S/O LATE M. SRINIVASA SETTY

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SRI. M.S. NATARAJ AGED ABOUT 55 YEARS S/O LATE M. SRINIVASA SETTY ALL ARE R/AT NO.19, 4TH MAIN ROAD, CHAMARAJAPET, BANGALORE-560 018

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…RESPONDENTS

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(BY SRI K.V.CHALAPATHY, SENIOR COUNSEL FOR SRI S.V.SRINIVASA, ALONGWITH SRI SUBRAHMANYA KAUSHIK.R.S., ADVOCATE FOR R1 TO R3)

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THIS RFA IS FILED UNDER SECTION 96 AND UNDER ORDER XLI RULE 1 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 21.04.2012 PASSED IN O.S.NO.4361/1997 ON THE FILE OF THE XI-ADDL. CITY CIVIL JUDGE, BANGALORE CITY, DECREEING THE SUIT WITH COSTS.

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THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 17.11.2022, COMING ON FOR 'PRONOUNCEMENT OF JUDGMENT' THIS DAY, THE COURT DELIVERED THE FOLLOWING:-

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JUDGMENT

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RFA Nos.1532 and 1533 of 2012 are directed against the common judgment and decree passed in OS Nos. 6281/1994 and 4361/1997 respectively passed by the XI Addl. City Civil Judge, Bengaluru City.

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The parties are referred to as Plaintiffs and defendants for the sake of convenience, as per their original rankings before the Trial Court.

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Both the appeals are preferred by the defendant A.C. Rathnakar, dead by his legal representatives.

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FACTS OF THE CASE AS PER PLEADINGS:

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The facts in both the suits in brief are as under:

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Plaintiffs contended that defendant A.C. Rathnakar is the absolute owner of the properties bearing Corporation Nos.187 to 190 situated at Taluka Kacheri Road, Chickpet, Bengaluru. The defendant executed a registered lease

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deed dated 22.12.1983 in favour of the plaintiffs of both the suits in respect of the suit properties. As per the terms of the lease deed, the plaintiffs agreed to demolish the whole structures of the said properties and construct a new building therein, but they could not do so, as they were unable to get their tenants evicted and obtain vacant possession of the properties. It is agreed under the lease deed that the plaintiffs are required to demolish the whole properties and construct a new building thereon and continue with the lease. The lease deed provides a right of pre-emption to the plaintiffs and the defendant was bound to sell the leased property to the plaintiffs only in the event of his desiring to sell the same.

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When the matter stood thus, in the early part of the year 1993, defendant approached the plaintiffs and shown his inclination to sell the property to the plaintiffs and offered the plaintiffs as the first option, in terms of right of pre-emption, which was incorporated in the lease deed. Plaintiffs agreed for the said offer and they met Sri

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D.A.V. Rathnam Setty who is the father-in-law of the defendant in his residence and negotiations of the sale were held. After detailed deliberations, plaintiffs in OS No.6281/1994 have agreed to purchase the western portion for a consideration of Rs.8 lakhs and the plaintiffs in OS No.4361/1997 have agreed to purchase the eastern portion of the suit properties for a similar consideration of Rs.8 lakhs. In other words, plaintiffs in all were agreed to purchase the entire property bearing Nos. 187 to 190 hereinafter referred to as 'suit property ' for short for a total consideration of Rs.16 lakhs spread over two agreements dated 17.3.1993 and a sum of Rs.50,000/was received by the defendant from the plaintiffs through cheque bearing No.258652 dated 17.3.1993 drawn on Karur Vyshya Bank Ltd., Avenue Road Branch, Bengaluru. It was further agreed between the parties that the defendant should satisfy the plaintiffs that he has got a good marketable title in respect of the suit properties and in that regard, he must furnish the title deeds to the plaintiffs and the time that was stipulated to conclude the

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sale transaction was July 1994 or within a month from the date of defendant obtaining and furnishing the Income Tax clearance as contemplated under Section 230-A(1) of the Income Tax Act whichever is later.

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Further, it is contended that from the date of the marriage, the defendant was residing in his Father-inlaw’s house. It is further contended that defendant is one of the reputed businessman in Bengaluru and was dealing in silks on a very large scale. Because of his preoccupation with the business, he had executed a general Power of Attorney in favour of his father-in-law namely D.A.V. Rathnam Setty to look after the affairs of the suit properties. It is further contended by the plaintiffs that through a letter dated 20.5.1993, Power of Attorney holder of defendant intimated the plaintiffs that cheque received by the defendant towards the advance sale consideration is misplaced and requested the plaintiffs to issue one more cheque. Acceding the request made by the defendant, plaintiffs passed on another cheque in a sum of

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Rs.50,000/- bearing No.258659 dated 28.5.93 drawn on Karur Vyshya Bank Ltd., Avenue Road, Bengaluru and Power of Attorney holder on receipt of the same, got it encashed through the account of defendant.

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It is further contended by the plaintiffs that in terms of the agreement of sale, the defendant was required to satisfy the plaintiffs about the marketable and subsisting title in respect of the suit property but the defendant failed to furnish the papers. Ultimately plaintiffs wrote a letter on 23.12.1993 demanding the defendant to make available the documents including the Encumbrance Certificate so as to prepare the draft sale deed and enable him to obtain Income Tax clearance under Section 230-A (1) of the Income Tax Act. But, despite the receipt of the letter, there was no response and another notice was issued through the Advocate to the defendant calling upon to comply the terms of the sale agreement.

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Again another notice was issued on 2.5.1994

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through the advocate of the plaintiffs. But to the surprise

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of the plaintiffs, they received a belated reply on 18.7.1994 contending that the agreement of sale in question is a sham transaction and there is no intention whatsoever for the defendant to give effect to the agreement and the same agreement has come into existence when the defendant was in dejected mode and therefore, refuted to comply with the callings of the notice.

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The plaintiffs left with no alternative have filed O.S.No.6281/1994. The prayer sought for in the suit and the schedule is extracted hereunder:

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"(a) Directing the defendant to specifically perform an agreement of sale dated 17/3/1993 by executing and registering a sale deed in favour of the plaintiffs in respect of the suit schedule property conveying to them by way of absolute sale of the suit schedule property and if necessary after obtaining all such clearances as may be required for the said purpose;

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(b) Directing the defendant to pay the plaintiffs costs of this suit and to grant such other relief or reliefs as this Hon'ble Court may deem fit to grant in the circumstances of the case.

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SCHEDULE

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Western portion of property bearing Municipal Nos. 187 to 190, situated at Old Taluk Kacheri Road, Chickpet, Bangalore-560 053 measuring East to West 15 feet (4.572 M) and North to South 38 feet 3 inches (11.66 M) in all 573.75 Sq.ft. or 53.30 Sq.mtrs And bounded as follows:

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On the East By : Eastern portion of premises bearing No.187 to 90; West By: Gowramma Hostel Lane; North By:Chickpet Main Road; South By :Private Property (Property in the occupation of M/s.P.A.Periaswamy Mudaliar and Sons)."

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So also, the plaintiffs have come up in OS No.4361/1997. The prayer sought for in the said suit and the schedule is extracted hereunder:

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(a) Directing the defendant to specifically perform an agreement of sale dated 17.03.93 by executing and registering a sale deed in favour of the plaintiffs in respect of the suit schedule property conveying to them by way of absolute sale of the suit schedule property and if necessary after obtaining all such clearances as may be required for the said purpose;

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(b) Directing the defendant to pay the plaintiffs costs of this suit and to grant such other relief or reliefs as this Hon'ble Court may deem fit to grant in the circumstances of the case.

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SCHEDULE

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Eastern portion of property bearing Municipal Nos.187 to 190 (Old No.958 to 961 and still earlier No.837 to 840), Old Taluk Kacheri Road, Chickpet, Bangalore 560 053 measuring East to West 7 feet 6 inches (2.286 M) and North to South 38 feet 3 inches (11.66 M) plus one room in the North eastern corner measuring East to West 9 feet 10 inches (2.996 M) and North to South 9 feet 6 inches (2.9 M) in all 288.75 Sq.ft. plus 93.4 sq.ft. in all 382.14 Sq.ft. And bounded as follows:

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On the East: By Private Property;West By - Western portion of premises bearing No. 187 to 190; North By: Chickpet Main Road; South By: Private Property (Property in the occupation of M/s.P.A.Periaswamy Mudaliar and Sons)."

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On receipt of suit summons, defendant entered appearance and filed detailed written statement denying

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the plaint averments in toto. However, he has admitted that he is the owner of the suit property and admitted about the registered lease deed dated 22.12.1983. He further contended that the period stipulated for the lease is 32 years and in terms of the contract of lease, plaintiff was required to construct non-residential Multi Storied building and when the plaintiffs failed to do so, with an intention to squat over the property, the plaintiffs have concocted the suit agreement that defendant was in dejected mode and therefore, the agreement cannot be enforced in law.

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He also contended that the sale consideration and the cheque issued at the time of agreement is not even en-cashed by the defendant and the plaintiffs in active collusion with the Father-in-law managed to issue one more cheque and got it en-cashed through the bank account and soon after the defendant noticed the same, she has objected for the same and the bank Manager has kept the said amount in suspense account and therefore, there is no consideration at all in respect of the suit

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agreement which clearly goes to show that the defendant never agreed to sell the suit property in favour of the plaintiffs and thus sought for dismissal of the suit.

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All other allegations which were made in the plaint, were specifically denied by him as false and defendant maintained that he never intended to sell the property in favour of the plaintiffs and he also maintained that the value of the suit property is much higher and there is no question of enforcing the suit agreement.

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ISSUES FOR CONSIDERATION BEFORE TRIAL COURT:

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Based on the rival contentions, learned Trial Judge framed the following issues in both the suits:

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ISSUES IN O.S.NO.4361 OF 1997

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"1. Whether the plaintiffs prove that on 17.3.1993 the defendant agreed to sell the suit schedule property for a consideration of Rs.8,00,000/-?

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2. Whether the plaintiffs prove that a sum of Rs.50,000/- has been paid to the defendant as an

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advance through his power-of-attorney Sri. D.A.V. Ratnam Setty?

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3. Whether the plaintiffs prove that they are ever ready and willing to perform their part of agreement?

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4. Whether the plaintiffs prove that they are entitled to the specific performance of the agreement of sale ?

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5. Whether the defendant proves that the

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plaintiffs have practiced fraud on him?

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6. Whether the defendant proves that the

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agreement of sale is sham and fraudulent?

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7. Whether the defendant proves that the

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agreement is void?

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8. Whether the defendant proves that he revoked the power-of-attorney in favour of his father-in-law D.A.V.Ratnam Setty and as such payment of Rs.50,000/- made by the plaintiffs is not valid payment towards the sale transaction?

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9. What decree or order?"

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IN O.S NO.6281 OF 1994

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1. Does the plaintiffs prove that the defendant agreed to sell the suit schedule property for consideration of Rs.8,00,000/- and also paid a sum of Rs.50,000/- as advance to the defendant vide cheque as per para No.5 of the plaint?

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2. Does the plaintiffs prove that he paid another amount of Rs.50,000/- dated 28.5.1993 vide cheque as per para No.6 of the plaint?

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3. Does the plaintiffs prove that defendant failed to furnish documents in spite of notice as per agreement as averred in para No.7 of plaint?

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4. Does the plaintiffs prove that the defendant

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is avoiding a perform his part of contract?

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5. Does plaintiffs prove that he is ready and

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willing to perform his part of contract?

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6. Does the defendant prove that he never agreed to sell the suit property as per para No.7 of the written statement?

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7. Does defendant proves that the transaction is sham as there is no privity of contract?

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8. Does defendant proves that the receipt of amount from the plaintiff was not for sale agreement?

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9. Does defendant proves that the plaintiff has

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played fraud on sale agreement?

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10. Whether there is cause of action to the

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suit?

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11. Whether the plaintiff is entitled for the suit reliefs?

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12. If so under what order or decree?"

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In both the suits, one of the plaintiffs Sri M.S. Balakrishna Setty, is examined as PW-1 and another

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witness by name Tallam N. Nanjunda Setty is examined as PW-2 and relied on 70 documents which were exhibited and marked as Exs.P1 to P70 comprising of Ex.P1-Letter written by General Power of Attorney of defendant; Ex.P2Receipt; Exs.P3 and P4 - Copies of notice; Ex.P5-Reply Notice; Ex.P6-Copy of letter dated 23.12.1993; Ex.P7Letter issued by Karur Vyshya Bank; Ex.P8-Xerox copy of bank pass book; Exs.P9 to P65-FD receipts; Ex.P66Agreement of Sale; Ex.P67-Copy of legal notice; Ex.P68Reply notice and Exs.P69 and 70-Certified copies of sale deeds.

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It is pertinent to note that a Memo came to be filed by the defendant whereby, PW-1 who is examined in OS No.4361/1997 and OS No.6281/1994. On behalf of the plaintiff common cross examination was ordered to be conducted, needless to say at the request made by the defendant by clubbing of both the cases.

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On behalf defendants, Sri A.R.Mahesh who is the second legal representative of the original defendant

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A.C. Rathnakar got himself examined as DW1 and on his behalf, 10 documents were relied on which were exhibited and marked as Exs.D1 to D10 comprising of Ex.D1-Sale deed; Exs.D2 & D3-Cheques; Ex.D4-Copy of Will; Ex.D5Order in HRC No.530/2000; Ex.D6-Revocation deed; Ex.D7-Letter dated 16.7.1983; Ex.D8-Reply letter; Ex.D9Paper publication; Ex.D10-Certified copy of the sale deed dated 7.12.1994.

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On conclusion of recording of evidence in both the cases, learned Trial Judge heard the arguments on behalf of the parties in respect of both the suits and decreed the suits of the plaintiffs and directed for specific enforcement of the contract of agreement of sale.

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Being aggrieved by the said judgment and decree, the appellants are in these appeals.

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ARGUMENTS OF THE APPELLANT:

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Re-iterating the grounds urged in the above appeals, Sri G.R. Anantharam, learned counsel

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representing the appellant has contended that the learned Trial Judge had not properly appreciated the material facts on record and failed to note that there was no proper agreement at all for enforcement of the sale agreement and the alleged sale agreement is a sham document and therefore, sought for allowing of the appeal.

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He further pointed out that grant of specific enforcement is a discretionary order and the same has not been properly exercised by the learned Trial Judge while decreeing the suit of the plaintiff in the impugned judgment and sought for allowing of the appeal.

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He has furnished the written arguments in support of his contentions which reads as under:

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"The first of the regular first appeals has arisen from the common judgment and decree dated 21-04-2012 passed in O.S.No.6281 of 1994 decreeing the suit in favour of PlaintiffsRespondents herein, granting the relief of Specific performance of the purported Agreement of Sale dated 17-03-1993.

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The second of the regular first appeals is preferred against the common Judgement and decree dated 21-04-2012 passed in O.S.No.4361 of 1997 decreeing the suit in favour of the plaintiffs therein granting the relief of Specific performance of the purported agreement of sale dated 17-03-1993.

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1. The deceased Appellant (who was the sole defendant in the suit), A.C. Rathnakar was the absolute owner of the properties bearing No.187 to 190 (old No.958 to 961, much earlier to that No.837 to 840) of Taluk Kacheri Road, Chickpet, Bangalore. The said properties were leased to the respondents herein under registered lease deed dated 22-121983 (vide Ex.D-1) and the stipulated period of lease was of 32 years. The Plaintiffs-Respondents herein had filed a suit in O.S.No.6281 of 1994 against the deceased appellant for the relief of specific performance of an alleged agreement of sale dated 17-3-1993 (vide Ex.P-1) in respect of the western portion of the said properties allegedly valued at 8,00,000/- while another batch of plaintiffs filed yet another suit in 0.S.No.4361 of 1997 for the similar relief in respect of the eastern portion of the said properties before the learned City Civil Judge, Bangalore. The deceased appellant contested the said suits. During the pendency of the suit, the appellant herein died survived by his wife &

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children as his heirs who were brought on record as the LRs. of the deceased defendant in the court below. The trial court, i.e., the learned XI Additional City Civil & Sessions Judge, Bangalore on an erroneous view of the matter & without considering that the alleged agreement of sale set up by the plaintiffs in each suit was sham & not enforceable at law amongst other legal lacunae & infirmities, erroneously has decreed the suits for specific performance by its common judgement & decree dated 21-04-2012.

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II. Being aggrieved by the erroneous, perverse and arbitrary judgement and decree passed in O.S.No.6281 of 1994 and in O.S.NO.4361 of 1997 by the learned XI Additional City Civil and Sessions Judge, Bangalore, the LRs of the deceased defendant have preferred this regular first appeal.

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III. It is interesting to note that none of the Plaintiffs in the suit, O.S.No.6281 of 1994 were examined in the suit. However, the Plaintiffs No.2 to 4 purported to have allegedly executed a power of attorney (vide Ex.P-44) which document is seriously challenged by the appellants, in favour of one Mr. M.S. Balakrishna; the said purported power of attorney holder has let-in evidence on behalf of the plaintiffs in the said suit.

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Appellants' contentions in that behalf are the following, amongst others: -

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(i) That the said document cannot be termed as a power of attorney by the Plaintiffs No.2 to 4;

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(ii) That the said document is not even attested by at least one witness without which its purported execution cannot be proved;

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(iii) That in order to draw the presumption under Section 85 of the Indian Evidence Act that the said document (Ex.P- 44) purporting to be a power of attorney could be so presumed only if the said document IS EXECUTED AND AUTHENTICATED before a Notary Public, or any Court, Judge or Magistrate, Counsel or Vice-Counsel, or representative of the Central government."

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In the instant case, a perusal of the said exhibit it is seen that:-

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(a) It is not attested by any one;

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(b) It is not authenticated by the Notary Public whose seal it bears;

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(c) It does not even bear the date and place of execution of its execution;

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(d) It does not contain any recital to the effect that the purported attorney who is supposed to be authorised by the alleged executants has the 'personal knowledge' of the

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facts that he is authorised to do thereunder or in pursuance thereof;

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(e) It does not even contain any identification by any counsel also.

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(iv) The plaintiff No.1 Mr. M S Sridhar is not a party to the said purported document and he did not lead evidence in the suit.

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(v) The purported power of attorney holder Mr. M.S Balakrishna thought brother of the plaintiffs does not have the personal knowledge of the alleged transaction for,

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(a) He is not a signatory to the purported agreement of sale, Ex.P-1;

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(b) He is not an attestor of the said document;

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(c) He is not a cestui que trust thereunder;

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(d) He is not an authorised agent for the purported Ex.P- 1.

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(vi) The said purported power of attorney holder could not depose for his purported Principals' for the acts done or purportedly done by the Principals and not by him."

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(a) In the instant case, the entire evidence of P.W.1 when discloses that he has sought to depose as to the acts purported to have been done by his

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Principals and not of his acts pursuant to the purported power of attorney vide Ex.P.44.

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(b) In fact, PW1 did not have authority to act on behalf of his purported principals when Ex.P.1 is alleged to have come into existence;

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(c) He certainly had no authority to depose instead of and or in place of his purported Principals at all. This submission is fortified by the rulings of this Hon'ble Court, the Apex Court, the High Courts of Bombay and Delhi, the relevant portions of which are excerpted hereunder:

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(i) ILR 2005 KAR 884 T.L. Nagendra babu Vs. Manohar Rao Pawar.

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…...21. In (DY. GENERAL MANAGER, REDESIGNATED AS DY DIRECTOR, ISB ETC., v. SUDARSHAN KUMARI AND OTHERS) (AIR 1996 SC 1894), the Supreme Court has noticed Section 8 of the Notaries Act. After noticing, the Supreme Court has ruled as under:

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"We have seen original rejoinder affidavit filed in this Court. They have approached one Notary who had initially attested it and later he had cancelled it without even verifying the valid ground on which the earlier attestation came to be cancelled, same was

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again attestation came to be cancelled, same was again attested by one Sundersham Kumar on November 1, 1994. In view of the admitted position that she herself had not signed and asked someone who had signed it, it would be obvious that the person who had signed before him was not the respondent nor even the person was known to the Notary. None identified her before the Notary, yet he attested the affidavit. This would show that some Notaries are absolutely misusing the licence granted to them without any proper verification of the persons who has signed the document and are attesting false affidavits of impersonators."

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22. In PRATAPRAI TRUMBAKLAL MEHTA vs. JAYANT NEMCHAND SHAH AND ANOTHER (AIR 1992 bombay 149) the bombay high court has considered once again section 8 of the Notaries Act. This is what the Bombay High Court says:"

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"A notary has to make entry in the notarial register in respect of the notarial act of certifying copy of document as true copy of the original. Even if one or two columns of the said form is not applicable, entries must be made in the said register filling up remaining columns as are applicable and adapting the format accordingly. He has to place his signature and seal on the copy of the document and keep the copy on his record. It

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is the responsibility of a notary to satisfy himself that the original document intended to be executed before him was executed by the person concerned and not by someone else in the name of a different person Le., about the identity of the executant of the original document by making all reasonable inquiries including insistence of identification of a member of the public by a legal practitioner known to the notary. Unless the executant is known to the notary personally, the notary must insist on written identification of the executant by an advocate and take signatures of both of them in token thereof in the notarial register in order to minimise the possibility of cheating by personification. Negligence of a notary in the discharge of his notarial functions may jeopardise the interest of third parties and public interest itself. Notaries enjoy high status throughout the country and the Courts take judicial notice of the seal of the notary and presume that the document in question must have been certified as true copy after taking of all possible care by the notary in comparing the copy with its original and due verification of the identity of the executant and the person appearing before the notary for the certification."

¶195

23. In the light of these Judgments, what is clear to this Court is that to have a presumption under Section 85 of the Evidence Act, the document

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in question namely the power of attorney has to be to the satisfaction of the Court in the matter of maintainability. I have already referred to the various infirmities in terms of the original power of attorney itself. Evidence is also sketchy from the plaintiff side. Though the defendant has argued at great length by pointing out the various infirmities, the learned Judge unfortunately has not chosen to give a proper finding and instead has chosen to reject the same on the ground of no issue. The learned Judge again in pars 15 notices the plea of maintainability and after noticing the same, he has brushed aside the crucial issue raised by the appellant. In the given circumstances and on the basis of the material placed on record, I am satisfied that the requirement of the pleadings and the signature in terms of Order 6 Rule 14 and 15 is not made out by the plaintiff. The findings of the learned Judge in this regard requires to be noticed for setting aside by this Court. This Court has to observe that the learned Judge has chosen to brush aside a serious plea without proper consideration of the controversy between the parties as he has done in the case of Court fee. When serious arguments are advanced with serious materials, the Judge cannot brush aside the said contention in a casual way as has been done in the case on hand. I am sorry to see that a District Judge with experience has chosen

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to give a go- bye to a serious issue. The argument of the appellant in these circumstances is accepted.

¶200

Another ruling of the Hon'ble High Court

¶201

of Delhi reported in AIR 1984 Delhi 363 in the matter of M/s. Electric Construction and Equipment Co. Ltd., Vs. M/s. Jagjit Electric Works, Sirsa (Haryana) has held in Paragraphs No. 10 and 11 as under: -

¶202

"10. The same applies to other public institutions like Insurance Companies and other Corporations which may have several branches. A duly executed power of attorney satisfying the test laid down in See 85 can be proved without undue expense on the basis of the execution and authentication.

¶203

11. These cases are very different from the one before us. Here, we have a document stated to be a power of attorney purported to have been executed by the Electric Construction and Equipment Company Ltd. It states that the common seal has been affixed in the presence of a Director and Chief Accountant and it also states that these persons have been authorised by a resolution of the Board of Directors to authenticate this. However, it does not state that it was executed before a Notary Public and nor does it bear any authentication by a Notary Public regarding the manner of execution, etc. It is

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therefore, very essential to stress the two ingredients which are contained in Sec 85 of the Evidence Act, viz., execution before the Notary Public and the authentication by the Notary Public. The words are executed before, and authenticated by. Both these conditions must be satisfied. It appears that neither condition is satisfied in this case because, the common seal was affixed on 27th November, 1973. and there is merely an attestation by a Notary Public on 13th December, 1973. There is no authentication at all. So, Sec. 85 of the Evidence Act does not apply to raise any presumption in favour of this power of attorney.

¶206

IV. 1. From a reading of the said rulings, it is clear that in the instant case, the document styled as power of attorney (Ex. P-44) does not satisfy any of the tests and the essentials required by S.85 of the Indian Evidence Act read with Ss. 1-A and 2 of the Powers of Attorney Act and Section 8 of the Notaries Act.

¶207

2. The Respondents' contention that the authentication of the said purported power of attorney was not at all necessary since the Defendants who are appellants in this appeal did not raise the said contention before the trial court is no avail to them and liable to be

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brushed aside for "the validity, legality, proper execution of document what it proposes or represents to be", could be gone into only after the said document is marked in evidence and after trial.

¶210

3. The document produced and relied on by the plaintiffs in 0.S.No.6281 of 1994, by applying the tests herein before dealt and as has been held by various judicial pronouncements referred to supra, when examined it is an undisputed fact that the said document (Ex.P-44) is not a power of attorney at all, it is not even attested by anyone; nor the said document is authenticated' WHEREBY, the presumption that could be raised with respect to a Power of attorney as contemplated by 85 of the Indian Evidence Act is not available at all. Hence, the said document even in the absence of the defendants pointing out any flaws earlier, DOES NOT QUALIFY TO BE CALLED A POWER OF ATTORNEY at all.

¶211

When the said document is not a power of attorney and has no legal existence let alone legal sanctity, the Plaintiffs who sought to examine their alleged power of attorney holder claiming his alleged powers under Ex. P-44

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have failed to prove their case in as much as 'there is NO EVIDENCE AT ALL IN THE EYE OF LAW. The defendants are not here to suggest the correction of omission /commission of the Plaintiffs but they certainly would take advantage of the lapses and shortcomings of the Plaintiffs for, "the law would not to the rescue of those who are in slumber".

¶214

4. Further, it may also be considered that if the Defendants were to remain exparte in the proceedings before the trial court, yet the trial court would have a duty imposed on it by law to examine the validity, valid execution and enforceability of and presumption as to the purported power of attorney and the trial court not have abdicated its duty in that behalf.

¶215

Hence, to contend that the appellants defendants cannot now contend with respect to the said alleged power of attorney is in bad taste in as much as the present appeal being continuation of the suit and that too the first appeal, this Hon'ble Court has ample power to re-appreciate the entire facts and the law, evidence and record its finding.

¶216

To sum up in that aspect, the Plaintiffs who came to court must prove their case and

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not take advantage of nor build their case on the weakness of the defendants at all as has been the settled position in law.

¶219

5. Another interesting aspect of the matter being that the purported power of attorney, Ex. P.44 does not even recite that the Attorney therein so called, has the personal knowledge of the transaction. Also, the document does not even record the date of its alleged execution; it does not even disclose that the purported executants thereof are executing it before a Notary Public also nor any endorsement is made to the said effect thereon.

¶220

In this context, the Appellants rely on a ruling of the Apex Court to demonstrate that the Power of attorney to be strictly interpreted whereby nothing can be supplemented nor supplanted to the contents thereof:

¶221

The relevant portion of one of the paragraphs of the ruling of the Hon'ble Apex Court in the matter of Church of Christ Charitable Trust and Educational Charitable Society Vs. Ponniamman Education Trust) reported in (2012) 8 SCC 706 is excerpted hereunder: -

¶222

¶223

"19. Next, we have to consider the power of attorney. It is settled that power of attorney has to be strictly construed…….."

¶224

6. For the sake of argument assuming but not conceding that the said document, Ex. P-44 were to be a Power of Attorney' and that their purported attorney holder has deposed on their behalf, as P.W.1., then, the evidence rendered by P.W.1 in the suit on behalf of the Plaintiffs does not prove the case of plaintiffs at all. The said proposition is fortified by the ruling of the Apex Court in the matter of Janaki Vashdeo Bhojwani and another - Vs- Indusind Bank Ltd. and others reported in (2005) 2 SCC 217, the relevant portion of para No.13 thereof is excerpted hereunder: -

¶225

"13. Order 3 Rules 1 and 2 CPC empower the holder of power of attorney to "act" on behalf of the principal. In our view the word "acts" employed in Order 3 Rules 1 and 2 CPC confines only to in respect of "acts' done by the power-ofattorney holder in exercise of power granted by the instrument. The term 'acts' would not include deposit in place and instead of the principal. In other words, if the power-of- attorney holder has rendered some "acts' in pursuance of power of attorney, he may depose for the principal in

¶226

¶227

respect of such acts, but he cannot depose for the principal in respect of such acts but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter of which only the principal can have a personal knowledge and in respect of which the principal is entitled to be cross-examined."

¶228

The Apex Court in para 15 of the judgement has observed thus:

¶229

"15. Apart from what has been stated this court in the case of Vidhyadhar V. Manikar observed at SCC pp.588-84, Para No.17 that:

¶230

"17. Where a party to the suit does not appear in the witness box and states his own case on the oath and does not offer himself to be set up by him is not correct….."

¶231

At any rate, the Plaintiffs have miserably failed to prove their case sought to be pleaded in the Plaint. Their purported power of attorney holder was not competent to speak of the acts purported to have been done by his Principals and it is only the acts that he did pursuant to the said alleged power of attorney, he could depose. The suit filed in O.S.No.6281 of 1994

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as such ought to have been dismissed by the trial court.

¶234

V. 1. The Defendants have disputed the

¶235

execution of the said purported Agreements of sale dated 17-03-1993 in both suits (Ex.P-1 and P-66) pleading and leading evidence to the effect that the deceased defendant had no intention to sell the property at all: the plaintiffs in both suits who admittedly are his tenants under a term lease since 1983 in respect of the suit properties, did not fulfil their promises held out under Ex.D-1, wherein they had undertaken to demolish and rebuild a new building with a minimum of 3 Floors and on determination of the lease, they would hand over the property with the building without any compensation which they did not fulfill, but allowed the time to lapse, did not make any efforts to get the other tenants in other portions evicted acting contrary to the undertaking in the said lease deed; resisted the attempts of the deceased defendant to have the building demolished which is dilapidated so as to facilitate the plaintiffs to put up the new construction thereon; whereby caused mental frustration to the deceased defendant; started pressurizing the defendant through his aged father-in-law taking undue advantage of his old age, by creating irksome

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¶237

situation at home compelling him to somehow under sell the property for far below the prevalent market price although the defendant was never approached by the plaintiffs directly at all; that the deceased defendant acting under the pressure exerted had only signed some papers and that be never intended to sell at all in as much as there was no 'consensus ad idem; the 2 cheques purportedly issued by the plaintiffs in both the suits were never encashed by the defendant since he never agreed to sell the said property and that he DID NOT EXECUTE THE SAID ALLEGED SALE AGREEMENTS at all. Nor the amount alleged to have been paid subsequently by the plaintiffs to the alleged power of attorney holder of the deceased defendant which power of attorney had been revoked on 22 January 1993 itself vide Ex.D-6, though published in December 1993) which was well within the knowledge of the plaintiffs, was never the payment at all towards the alleged part payment / advance / earnest money at all. Further, the deceased defendant did not receive nor utilise the said subsequent payment stealthily and fraudulently claimed to have been made by the plaintiffs nor had the benefit of the same at all as is discernible from Ex.D-7 and D-8 being the correspondence by the deceased defendant with the bank. The amount purportedly paid by the plaintiffs to late D.A.V. Rathnam Setty which had been wrongly remitted to

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the account of the deceased defendant, on his request had been transferred from his account to a suspense account whereby it is evident that the deceased defendant disowned the said amount thus, there was no 'payment to the credit of the defendant' at all by the plaintiffs. Thus, for want of alleged consideration also, the said purported agreements of sale ought to fail and are non-est, not enforceable at law. The deceased defendant who admittedly was a businessman did not have any legal necessity for allegedly selling the suit schedule properties at all. Conduct of the plaintiffs in the calculated design of knocking off the property needs to be considered.

¶240

2. With respect to what amounts to ' execution' , the appellants have relied on two rulings, one of this hon'ble Court reported in ILR 2007 KARNATAKA 4020 in the case of M.N. Ramachandraiah and another Vs The State of Karnataka and others; the relevant paragraphs therein being Paras 15, 16 and 18; the second judgement in that behalf relied on is reported in (2022) 7 SCC 1 in the matter of Veena Singh (dead), through L.R. -Vs- District Registrar and another -the relevant paras therein being paras 51, 73, 76, 91 and 94, The appellants have already submitted during the course of their arguments, the said rulings for the consideration of the hon'ble Court.

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3. The deceased defendant since had seriously disputed the execution of the said documents, the same ought to have been proved and the plaintiffs failed to do so. Examining P.W.2 as an attesting witness is also of no avail to the plaintiffs for, there has been no evidence of the plaintiffs in the first suit at all and there has been no corroboration of the evidence of the said witness who is an interested witness and having animosity towards the family of the deceased defendant being a business rival.

¶243

VI. Another vital aspect of the matter being that the plaintiffs willfully sought to knock off the suit property for literally a song in as much as while the property was valued by over 3 times even as on the date of the alleged agreements of sale, yet, the plaintiffs claim to buy the same at a meagre value, which is also a relevant factor that ought to have been considered by the trial court. Evidence in that behalf has been placed on record by the defendants vide Ex.D-10 being a certified copy of a sale deed of a property situate on the very same O.T.C. Road (Chickpet main road) during the relevant period.

¶244

VII. It is further to be seen that in order to hoodwink the Authorities, the plaintiffs sought to undervalue the valuable property and that too in the form of 2 alleged agreements of sale of portions of the very same property from a single owner, having

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¶246

single khatha thus also violating the provisions of Chapter XXXC of the Income Tax Act, 1961 (as it then was) whereby the said alleged agreements of sale suffer from the vice of 'opposed to public policy' and thus not enforceable at law at all.

¶247

The defendantsappellants have placed reliance on two rulings, the first one of the hon'ble Apex Court in the matter of Appropriate Authority and Commissioner, Income Tax Vs Varshaben Bharathbhai Shah and others reported in (2001) 4 SCC 1-relevant para No.8 and the second one being a judgement rendered by the Income Tax Appellate Tribunal, Chennai in the matter of M/s. Soffia Software Ltd. -Vs-Mrs. Kalpagam Bhaskaran, reported in 2009 SCC online Madras 2716 in paras 10 to 12 thereof.

¶248

Both the purported agreements of sale sought to be relied on by the plaintiffs in both the suits thus are not enforceable at law at all.

¶249

VIII. Another important factor that needs to be considered being that by refusal of the specific performance sought, the Plaintiffs would not suffer irreparably in as much as admittedly they own number of properties both residential and commercial in Bengaluru including a commercial property within the vicinity of the suit schedule property.

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IX. In so far as the suit filed by the plaintiffs in O.S.No.4361 of 1997 is concerned, in addition to other contentions herein before raised (save the evidence of P.W.1 as a POA holder, which is not applicable to the said suit), the Appellants humbly submit that the plaintiffs therein slept over the matter and came to court seeking the relief of specific performance almost at the fag end of the period of limitation. They did no positive acts at all in furtherance of the alleged agreement of sale set up by them. Instead, they were only watching the proceedings initiated by their brothers in O.S.No.6281 of 1994 for nearly 3 years and later approached the trial court thus, disentitling themselves of the equitable relief of specific performance. At any rate, by the said process, the plaintiffs wanted to have an unfair advantage over the defendants and place the defendants in an inequitable position thus, making wrongful gain for themselves to the detriment of the defendants. The plaintiffs in the second suit as has been held by the hon'ble Apex court in the matter of Vimaleshwar Nagappa Shet-Vs- Noor Ahmed Shariff and others reported in (2011) 11 SCC 658 vide para 11 thereof. Also, in the matter of K.S. Vidyanadam and others - Vs- Vairavan reported in (1997) 3 SCC 1 vide paras 10 and 13, the delay in approaching the court of law by the plaintiffs, the relief of specific performance to

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be refused. However, the trial court has not recorded any finding in this behalf but has mechanically proceeded to decree the suit.

¶254

Without prejudice to the foregoing,

¶255

1. In the event of the hon'ble Court considering that the plaintiffs have made out a case for specific performance then, they cannot be allowed to take unfair advantage of the escalation of the price of properties as of date which has multiplied by manifolds and cause wrongful loss to the defendants and put them in an inequitable position, causing severe hardship that they could not foresee.

¶256

2. Appellants further humbly submit that having regard to the fact that by passage of time, the value of the suit properties situate within the Bengaluru urban agglomeration that too, at the heart of the commercial hub in the city, the value of the property has steeply risen by manifolds.

¶257

The guideline value of the subject property of both the appeals itself in over Rs.2 Crores as of 1 April 2017 vide the relevant pages of the Guideline value published by the State Government submitted to the hon'ble court during arguments vide Sl.No.168. The subject property being a corner

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property, another 10% over the guideline value of other properties to be added.

¶260

The total area of the property (site) is 88.66 square meters (vide Ex.D-1) equivalent to 954.336 square feet.

¶261

The guideline is at Rs.2,03,700/- per square meter , 88.66 x 2,03,700 - 1,80,60,042-00 Add: 10% being corner site - 18,06,004-20 Total guideline value of site - 1.98.66.046-00 Add value of the building - RCC roof, - 25,00,000-00

¶262

Red-oxide flooring= 9.5 squares Total guideline value of property - 2,23,66,046-00

¶263

The fair market value of the property as of date exceeds Rs.5 Crores. In this behalf, amongst other rulings relied on by the appellants that they have already submitted, they stress upon the ruling of the hon'ble Apex Court in the matter of Satya Jain and others -Vs- Anis Ahmed Rushdie and others reported in (2013) 8 SCC 131, the relevant paras thereof being paras 40 to 42 wherein the hon'ble Apex Court has considered several earlier judgments on the subject;

¶264

Paras 40, 41 and 42 are excerpted hereunder -

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40. The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasised that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. Such a view has been consistently adopted by this court. By way of illustration opinions rendered in P.S. Ramakrishna Reddy Vs M.K. Bhagyalakshmi {(2007) 10 SCC 231} and more recently in Narinderjit Singh -VsNorth Star Estate Promoters Ltd. {(2012) 5 SCC 712} may be usefully recapitulated."

¶267

"41. The twin inhibiting factors identified above if are to be read as a bar to the grant of a decree of specific performance would amount to penalizing the plaintiffs for no fault on their part, to

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deny them the real fruits of a protracted litigation wherein the issues arising are being answered in their favour. From another perspective it may also indicate the inadequacies of the law to deal with the long delays that, at times, occur while rendering the final verdict in a given case. The aforesaid two features, at best, may justify award of additional compensation to the vendor by grant of a price higher than what had been stipulated in the agreement which price, in a given case, may even be the marked price as on date of the order of the final verdict."

¶270

"42. Having given our anxious consideration to all the relevant aspects of the case we are of the view that the ends of justice would require this Court to intervene and set aside the findings and conclusions recorded by the High Court of Delhi in Anis Ahmed Rushdie-Vs Bhiku Ram Jain and to decree the suit of the plaintiffs for specific performance of the agreement dated 22-12-1970. We are of the further view that the sale deed that will now have to be executed by the defendants in favour of the plaintiffs will be for the market price of the suit property as on the date of the present order. As no material, whatsoever is available to enable us to make a correct assessment of the market value of the suit property as on date we request the

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learned trial Judge of the High Court of Delhi to undertake the said exercise with such expedition as may be possible in the prevailing facts and circumstances."

¶273

None of the rulings relied on by the Respondents have no application to the case on hand and they are to be held accordingly. The ruling of the Apex court reported in AIR 2020 SC 5041 relied on by the respondents in fact reiterates the position of law held by the hon' ble Apex Court in Satya Jain's case (2013) 8 SCC 131."

¶274

ARGUMENTS OF THE RESPONDENT:

¶275

Per contra, Sri S.K.V. Chalapathi, learned Senior counsel representing the plaintiffs in both the appeals, who are respondents herein, these appeals, contended that the learned Trial Judge has rightly appreciated the material on record and decreed the suit of the plaintiffs.

¶276

In support of his arguments also, he has filed written synopsis and written arguments which reads as under:

¶277

PRELIMINARY:

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1. The two appeals arise out of a common judgment and decree dated 21.04.2012 whereby two suits for specific performance were decreed. RFA No. 1532/12 arises out of O.S. No. 6281/1994 (referred to as the first suit) and RFA No. 1533/2012 arises out of O.S.No.4361/1997 (referred to as the second suit).

¶280

2. The suits pertain to two separate agreements of sale, both dated 17.03.1993, both executed by A C Ratnakar (Defendant) in favour of the respective plaintiffs in the two suits in respect of two portions of the same property, i.e., property bearing Municipal Nos. 187 to 190, OTC Road, Chickpet, Bengaluru.

¶281

3. The first suit is in respect of the western portion of the property measuring 573.75 sq. ft. The second suit is in respect of the eastern portion of the property measuring 382.14 sq. ft. The two agreements of sale dated 17.03.1993 are marked as Ex.P1 in the first suit and Ex.P.66 in the second suit. The sale consideration under each agreement of sale is Rs. 8,00,000/- (Rupees Eight Lakhs).

¶282

4. Sri. M.S. Balakrishna Setty, the second plaintiff in the second suit is PW1 in both the suits. He is also the power of attorney holder of the plaintiffs in the first suit. Cross-examination of PW1 is common in both the suits. PW2 is Tallam Nanjunda

¶283

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Setty. His evidence is common to both the suits. He participated in the negotiations between the parties. He is an attestor of the agreements of sale. He also offered financial assistance to the plaintiffs to complete the sale transaction in question.

¶285

5. The defendant died during the pendency of the suit and his legal representatives were brought on record. Sri. A.R. Mahesh who is the son of the defendant has led common evidence in both the suits as DW1.

¶286

RE: EXECUTION OF THE AGREEMENTS OF

¶287

SALE:

¶288

6. The defendant has put forward different versions from time to time regarding execution of the agreements of sale. The first document to come into existence after the agreement of sale dated 17.3.1993 is the reply notice dated 18.7.1994 marked as Ex.P40 [Page 155 of the paper book).

¶289

7. The version put forward in Ex.P.40 reply notice dated 18.7.1994 i.e., more than one year after the agreement of sale is extracted below [Page 157 of the paper book]:

¶290

"Under these circumstances, in order to please his father-in-law and to have peace at

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home, when he was in a dejected mood, his signature was obtained to the purported agreement of sale. The said agreement of sale evidences a sham transaction which our client had no intention whatever to give effect to and which did not effect his property or his interest in it. It is a mere nullity and does not constitute an agreement.

¶293

8. The version put forward in the written statement is at para 8 (page 14 of the paper book). It reads as follows:

¶294

"The defendant submits that his father-inlaw Sri. DAV Ratnam Setty was constituted as Attorney of the Defendant by a Deed of General Power of Attorney dated 10.04.1987. The Defendant revoked the said General Power of Attorney on 22.01.1993 under Deed of Revocation. This act of revocation of Power of Attorney upset the father-in-law of the Defendant and therefore, he was also putting enormous pressure on the defendants to act according to his wishes. These things had destroyed peace at home and under the circumstances, in order to please his father-inlaw and in order to have peace at home, the Defendant was a dejected man and his signatures have been obtained on some papers purported to

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¶296

be agreement of sale, which is a sham transaction, which the Defendant has no intention whatsoever to give effect to and which did not effect his property or his interest in question whatsoever."

¶297

9. Thus, the case put forward is that the transaction is a sham transaction meaning not intended to act upon. The law regarding sham transaction is that the parties knew what documents they are executing and the terms of the documents as well. But the parties intending to act did not act according to them. The said proposition of law is explained in the judgment reported in AIR 1925 Mad 1005, the relevant portion of which is available at paragraph 5 is extracted below:

¶298

"…The essence therefore of a sham transaction is that though a registered deed is brought into existence no title of any kind, either legal or beneficial is intended to be passed thereby to any person whatsoever, that is to say, the deed of transfer is not intended to effect any transfer of property."

¶299

10. If the defendant knew that he is executing an agreement of sale with full knowledge of its contents, but if his case was that it was not intended to be acted upon, his conduct

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¶301

is to be examined to see whether his first case that the document was not intended to act upon is correct or not.

¶302

11. DAV Rathnam Setty, the power of attorney holder of the Defendant by his letter dated 20.5.1993 Ex.P2 (Page 111 of the paper book) addresses to the plaintiffs stating that the cheques that were delivered along with the agreements of sale Ex.P1 in one case and Ex.P.66 in another case have been misplaced and he requests the plaintiff to issue new cheques in their place. On 28.5.1993, he receives new cheques as could be seen from Ex.P3 dated 28.5.1993. The said two cheques are then deposited in the account of the defendant Rathnakar. The defendant becomes aware of the same and they were encashed on 10.7.1993. After that, the plaintiffs by their letter dated 23.12.1993 Ex.P.41 (Page 163 of the paper book) in the first case and Ex.P.6 (Page 81 of the other paper book) in the second case invite the attention of the defendant to the contents of the agreements of sale which say document must be made available to the plaintiffs and request the defendant to make available the document. The receipt of letter dated 23.12.1993, Le, Ex.P.41 is admitted in the reply notice Ex. P.40.

¶303

¶304

12. The defendant does not even reply to the said notice. He just keeps quiet. Can this be the conduct of a person who says that the agreements of sale were not intended to be acted upon. The first thing he should have done is he should have told the plaintiffs that they cannot seek the documents since the agreements of sale were not intended to be acted upon. He has not done this. The Karur Vysya Bank by its letter dated 18.4.03 marked as Ex.P.42 [Page 167 of the paper book] states that the said cheques have been issued by one M.S. Sridhar, the first plaintiff in the first suit and they were encashed. Even after having known that the cheques given by the plaintiffs have been encashed, the defendant keeps quiet and he does not even reply to the plaintiffs stating as to why they have deposited the cheques in his account.

¶305

13. Another notice dated 29.1.1994 (Ex. P38 available at pages 147-149 of the paper book) was issued to the defendant by Advocate Sri. Anup Shah on behalf of the plaintiffs once again requesting the defendant to make available documents since it was required for preparing draft sale deed. The receipt of this notice is also admitted in the reply notice Ex.P.40. The defendant does not send a reply to this letter also.

¶306

¶307

Once again, another notice was issued by the counsel for plaintiffs under Ex.P.39 dated 2.5.1994. It is after receipt of this letter, after a lapse of two months, a reply dated 18.7.1994 (Ex.P.40) was issued where for the first time, the contention was that the agreement was a sham document. This clearly belies the theory of documents being sham.

¶308

14. Another contention taken in Ex.P.40 and the written statement is that the defendant was a dejected man because of differences with his father-in-law and his signatures have been taken on some papers purported to be agreements of sale. This contention that his signatures were taken to some papers purported to be agreements of sale when he was in dejected is totally contradictory to the stand that the agreements were sham in nature. When the agreement is sham, the party full well knows what he is signing but signs it with knowledge and force. This question of one signing the papers in a dejected mood without knowing the contents of the document does not arise. This is how the two contentions are contrary to each other and no reliance can be placed on them.

¶309

¶310

15. PW2 Tallam Nanjunda Setty negotiates between the parties prior to the agreement of sale and he is also an attestor to the agreements of sale. He gives evidence regarding the defendant executing the two agreements of sale with free mind and without any force and on his own accord.

¶311

16. It is stated in the evidence of DW1 that defendant executed the agreements of sale when he was in a dejected mood and out of force. It has come in evidence of DW1 who gives evidence was not present when the agreements of sale were executed. However, the defendant's wife Smt. Padma Ratnakar was said to be present. The cross examination of DW1 found at Page 100 of the paperbook is as follows:

¶312

“ ¤.¦.1 ªÀÄvÀÄÛ 66 PÉÌ. £ÀªÀÄä vÀAzÉ ¸À» ªÀiÁrgÀÄvÁÛgÉ JAzÀgÉ ¤d. CªÀÅUÀ½UÉ £ÀªÀÄä vÀAzÉ £ÀªÀÄä ªÀÄ£ÉAiÀÄ°è ¸À» ªÀiÁrgÀÄvÁÛgÉ. ¤.¦.1 ªÀÄvÀÄÛ 66 PÉÌ £ÀªÀÄä vÀAzÉ ¸À» ªÀiÁrzÀ ¸ÀªÀÄAiÀÄzÀ°è £ÀªÀÄä vÁ¬Ä, EzÀÝgÀÄ JAzÀgÉ ¤d ¤.¦ 1 ªÀÄvÀÄÛ 66 PÉÌ ¸À»UÀ¼À£ÀÄß ªÀiÁqÀÄªÀAvÉ £ÀªÀÄä vÀAzÉUÉ £ÀªÀÄä vÁvÀ §¯ÁvÀÌj¹zÀÄÝ D jÃw §¯ÁvÀÌj¹zÀÝgÀÄ J£ÀÄßªÀ §UÉÎ ¥ÉÆÃ°Ã¸ÀjUÉ £ÀªÀÄä vÀAzÉ CxÀªÁ £Á£ÀÄ AiÀiÁªÀÅzÉÃ zÀÆgÀ£ÀÄß PÉÆnÖgÀÄªÀÅ¢®è.”

¶313

The defendant's wife Smt. Padma is not examined in the case. She is the best person to give

¶314

¶315

evidence regarding the matters in controversy. It is settled law when the best evidence regarding the controversy between the parties is withheld, then an adverse inference will have to be drawn against the party forthwith. [vide AIR 1968 SC 1413 ].

¶316

17. On the top of all this, kindly see the cross-examination of PW1 by the defendant which is at page 70 of the paper book. It is extracted below.

¶317

“ £ÁªÀÅ 1983 jAzÀ 1993 gÀªÀgÉUÀÆ ¨ÁrUÉzÁgÀjAzÀ ¸ÀéwÛ£À ¸Áé¢üÃ£ÀªÀ£ÀÄß ¥ÀqÉzÀÄPÉÆ¼ÀÄîªÀ PÀÄjvÁAvÉ £ÀªÀÄä ¥ÀæAiÀÄvÀßUÀ½UÉ DzsÁgÀªÁV AiÀiÁªÀÅzÉÃ zÁR¯ÉUÀ¼ÀÄ E®è. £ÁªÀÅ 1983 jAzÀ 1993 gÀªÀgÉUÀÆ ¨ÁrUÉzÁgÀgÉÆA¢UÉ ªÀiÁvÀÄPÀvÉUÀ¼À£ÀÄß £ÀqÉ¸ÀÄwÛzÉÝÃªÉ JAzÀÄ ¸ÀÄ¼ÀÄî ºÉÃ¼ÀÄvÁÛ §AzÉªÉ ºÉÆgÀvÀÄ AiÀiÁªÀ ªÀiÁvÀÄPÀvÉUÀ¼À£ÀÄß ªÀiÁrgÀ°®è J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è. £ÁªÀÅ ºÀvÀÄÛ ªÀµÀðUÀ¼ÀªÀgÉUÀÆ AiÀiÁªÀÅzÉÃ PÀvÀðªÀåUÀ¼À£ÀÄß ¤ªÀð»¸ÀzÉÃ ²æÃ gÀvÁßPÀgï gÀªÀjUÉ fUÀÄ¥Éì §gÀÄvÀÛzÉJ£ÀÄßªÀ GzÉÝÃ±ÀªÀ£ÀÄß ºÉÆA¢zÉÝªÀÅ J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è. D ºÀvÀÄÛ ªÀµÀðUÀ¼À CªÀ¢üAiÀÄ°è ºÉÆ¸ÀzÁV ªÁtÂdå ¸ÀAQÃtð §gÀÄvÀÛzÉ J£ÀÄßªÀ ²æÃ gÀvÁßPÀgï gÀªÀgÀ D¸ÉAiÀÄ£ÀÄß ¤gÁ¸ÉAiÀÄ£ÁßV ªÀiÁrzÉªÀÅ J£ÀÄßªÀÅzÀÄ ¸ÀÄ¼ÀÄî. F ºÀvÀÄÛ ªÀµÀðUÀ¼À CªÀ¢üAiÀÄ°è D PÀlÖqÀªÀÅ AiÀÄxÁ¹ÜwAiÀÄ°èAiÉÄÃ EzÀÄÝzÀ£ÀÄß PÀAqÀÄ ²æÃ gÀvÁßPÀgï gÀªÀjUÉ fUÀÄ¥Éì §A¢vÀÄ J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è. ºÀvÀÄÛ ªÀµÀðzÀ CAwªÀÄzÀ°è £ÁªÀÅ F PÀlÖqÀªÀ£ÀÄß K£ÀÆ ªÀiÁqÀÄªÀÅzÀPÁÌUÀÄªÀÅ¢®è J£ÀÄßªÀÅzÀ£ÀÄß ºÁUÀÆ 32 ªÀµÀðUÀ¼ÀªÀgÉUÀÆ F PÀlÖqÀªÀ£ÀÄß ºÁUÉAiÉÄÃ EqÀÄvÉÛÃªÉ JAzÀÄ ²æÃ gÀvÁßPÀgï gÀªÀjUÉ ºÉÃ½zÉªÀÅ J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è. CzÉÃ jÃw ºÀvÀÄÛªÀµÀðUÀ¼À CªÀ¢üAiÀÄ°è ¨ÁrUÉzÁgÀgÀ£ÀÄß ºÉÆgÀUÉ ºÁPÀ®Ä

¶318

¶319

DUÀ°®è ºÁUÀÄ vÀzÀ£ÀAvÀgÀªÀÇ CªÀgÀ£ÀÄß ºÉÆgÀUÉ ºÁPÀ®Ä DUÀÄªÀÅ¢®è JAzÀÄ ºÉÃ½ D ¸ÀévÀÛ£ÀÄß £ÀªÀÄUÉ ªÀiÁgÀÄªÀAvÉ ²æÃ gÀvÁßPÀgï gÀªÀjUÉ ¥ÀÄ¸À¯Á¬Ä¹zÉªÀÅ J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è. CzÉÃ jÃw D PÀlÖqÀ¢AzÀ §gÀÄwÛgÀÄªÀ ¨ÁrUÉ CvÀåAvÀ PÀrªÉÄ EzÀÄÝ CzÀ£ÀÄß ªÀiÁjzÀgÉ ºÉaÑ£À ¯Á¨sÀªÁUÀÄvÀÛzÉ JAzÀÄ ¨ÉuÉÚ ªÀiÁvÀ£ÀÄß ºÉÃ½ ²æÃ gÀvÁßPÀgï gÀªÀjUÉ ¥ÀÄ¸À¯Á¬Ä¹zÀPÉÌ ²æÃ gÀvÁßPÀgï gÀªÀgÀÄ D ¸ÀévÀÛ£ÀÄß £ÀªÀÄUÉ ªÀiÁgÀ®Ä M¦àPÉÆAqÀgÀÄ J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è. £ÀAvÀgÀ ²æÃ gÀvÁßPÀgï gÀªÀgÀÄ ªÀÄ£ÉUÉ ºÉÆÃzÀ ªÉÄÃ¯É CªÀjUÉ «µÀAiÀÄªÀÅ UÉÆvÁÛV vÁ£ÀÄ PÀæAiÀÄPÉÌ M¦àPÉÆ¼ÀÄîªÀÅ¢®è JAzÀÄ ºÉÃ½ CªÀgÀÄ ¥ÀqÉzÀÄPÉÆArzÀÝ ZÉPÀÄÌUÀ¼À£ÀÄß ªÁ¥À¸ï ªÀiÁrzÀgÀÄ J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è.”

¶320

18. Here the suggestion made to PW1 is that plaintiffs persuaded the defendant to execute the agreement of sale which is not pleaded anywhere either in the reply notice Ex.P.40 or in the written statement. It is further suggested that the defendant subsequently approached the plaintiffs stating that he will not agree to the agreement and returned the two cheques which he has received as advance and which are referred to in the agreements of sale to the plaintiffs. On the face of it, this is false because the two cheques which they returned to the plaintiffs were produced by the defendants in the court during trial and the said two cheques have been marked on their behalf as Exs.D2 and D3.

¶321

¶322

19. The cross examination of PW1 at paragraph 16 at page 71 of the paper book is as follows:

¶323

“£À£ÀUÉ ²æÃ r J ¦ gÀvÀßªÀiï ±ÉnÖ J£ÀÄßªÀªÀgÀ UÀÄgÀÄwzÉ r.J.«. gÀvÀßªÀiï ±ÉnÖAiÀÄªÀgÀ eÉÆvÉUÉ ¸ÀA¥ÀPÀð ZÉ£ÁßVvÀÄÛ J£ÀÄßªÀÅzÀÄ ¤d, ²æÃ gÀvÀßªÀiï ±ÉnÖ, AiÀÄªÀgÀ£ÀÄß ¥ÀÄ¸À¯Á¬Ä¹ ¤¦2 ºÁUÀÆ ¤.¦ 3 ¥ÀæPÁgÀ zÁR¯ÉUÀ¼À£ÀÄß £ÀqÉzÀÄPÉÆAqÀªÀÅ J£ÀÄßªÀÅzÀÄ ¸ÀjAiÀÄ®è.”

¶324

20. It could be seen that the defendant has taken absolutely false and contradictory stands just to escape his liability to execute the sale deeds under the agreements of sale. It is admitted that defendant Rathnakar was doing extensive business in silks as stated in paragraph 16 of the written statement. It is stated in the said para that he was visiting USA and, in that connection, the power of attorney dated 10.4.1987 was executed. According to the defendant, the said power of attorney was revoked after six years under a Deed of Revocation dated 22.1.93 Ex.D6. The genuineness of revocation deed and the conduct of the defendant regarding the same will be submitted in subsequent paras.

¶325

21. The Hon'ble Supreme Court in its judgment reported in (2010) 1 SCC 83 at paragraph 6 has held that when a person signs the document, the presumption is that he has read the

¶326

¶327

document properly and understood it and only then, he affixes his signature thereon unless there is a proof of force or fraud. Such presumption is much stronger in the case of business man. Having regard to the same, it is respectfully submitted that the defendant did execute the agreements, Ex.P1 and Ex.P.66 out of his own free will and volition without any force and that his contention that it was a sham transaction will have to be rejected.

¶328

RE: POWER OF ATTORNEY :

¶329

22. There is no dispute that the defendant did execute a power of attorney dated 10.4.1987 in favour of DAV Rathnam Setty and according to him, he revoked the said power of attorney on 22.1.1993 under Ex.D6 [Page 243 of the paper book) . What is typed in the paper book does not reflect as to how exactly the said revocation deed stands and hence, the original records may kindly be seen. As could be seen from the said document, it is supposed to be executed before a Notary Public. But it does not bear the date on which it was sworn to before the Notary Public.

¶330

23. If it is true that the said revocation deed executed on 22.1.1993 as it purports to be, then the Notary Public also should have put the date.

¶331

¶332

The omission of the date is glaring since the date 22.1.1993 is admittedly a predated document.

¶333

24. The entire theory of revocation of the power of attorney will have to be rejected in view of the categorical admission of DW1 available at Page 99 of the paperbook:

¶334

“£ÀªÀÄä vÀAzÉ £ÀªÀÄä vÁvÀ¤UÉ vÀ£Àß ªÀåªÀºÁgÀUÀ¼À£ÀÄß £ÉÆÃrPÉÆ¼ÀÄîªÀ ¸À®ÄªÁV MAzÀÄ GPA AiÀÄ£ÀÄß PÉÆnÖzÀÝgÀÄ. £ÀªÀÄä vÁvÀ 1987jAzÀ 1997 gÀªÀgÉUÉ GPA Holder DV £ÀªÀÄä vÀAzÉAiÀÄ ªåªÀ ÀºÁgÀUÀ¼À£ÀÄß £ÀqÉ¹zÝgÀ ÀÄ.

¶335

£ÀªÀÄä vÀAzÉ £ÀªÀÄä vÁvÀ¤UÉ PÉÆnÖzÀÝ GPA AiÀÄ£ÀÄß d£ÀªÀj 1993 £À°è gÀzÀÄÝ¥Àr¹gÀÄvÁÛgÉ. D §UÉÎ, £ÀªÀÄä vÀAzÉ r¸ÉA§gï 1993gÀ°è ¥ÀwæPÉAiÀÄ°è ¥ÀæPÀluÉAiÀÄ£ÀÄß ºÉÆgÀr¹zÀgÀÄ. £ÀªÀÄä vÀAzÉ £ÀªÀÄä vÁvÀ¤UÉ PÉÆnÖzÀÝ

¶336

GPA AiÀÄ£ÀÄß gÀzÀÄÝ¥Àr¹gÀÄªÀ «µÀAiÀÄªÀ£ÀÄß PÁ¥ÉÆÃðgÉÃ±À£ï ¨ÁåAPï £ÀªÀjUÉ ¥ÀvÀæªÀ£ÀÄß §gÉ¢zÀÝgÀÄ, DzÀgÉ AiÀiÁªÀ ¢£ÀzÀAzÀÄ JAzÀÄ eÁÕ¥ÀPÀ E®è, D ¥ÀvÀæzÀ £ÀPÀ®Ä £À£Àß §½ EzÉAiÉÄÃ JAzÀgÉ zÁR¯ÉUÀ¼À£ÀÄß ¥Àj²Ã°¹ ºÉÃ¼À¨ÉÃPÁUÀÄvÀÛzÉ. 1993 gÀ ªÀgÉUÀÆ £ÀªÀÄä vÀAzÉUÉ ¸ÀA§AzsÀ¥ÀlÖ ¨ÁåAPï ªÀåªÀºÁgÀªÀ£ÀÄß £ÀªÀÄä vÁvÀ£ÉÃ £ÀqÉ¹zÀgÀÄ JAzÀgÉ ¸ÀjAiÀÄ®è, 1992 jAzÀ 1993 gÀªÀgÉUÉ vÀAzÉUÉ ¸ÀA§AzsÀ¥ÀlÖ ¨ÁåAQ£À Statement of Accounts ªÀÄvÀÄÛ Correspondence £ÀÄß PÉÆÃnðUÉ ºÁdgÀÄ¥Àr¸À®Ä vÉÆAzÀgÉ EgÀÄªÀÅ¢®è. £ÀªÀÄä vÀAzÉUÉ ¸ÀA§AzsÀ¥ÀlÖ Statement of Accounts £ÀªÀÄä §½ EgÀÄvÀÛzÉ.”

¶337

25. On the top of all that, Section 208 of the Indian Contract Act, 1872 becomes absolutely relevant in this context. Section 208 of the Contract Act is extracted below:

¶338

¶339

"208. When termination of agent's authority takes effect as to agent, and as to third persons. - The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them."

¶340

26. Although it is said that revocation deed was executed on 22.1.1993, it was published in the newspaper on 1.12.93 - Ex. D9 [Page 247 of the paper book] i.e., after a period of more than 11 months. It is not as if the defendant did not know that paper publication is absolutely essential because he publishes in a newspaper; but why slept over the matter for more than 11 months. The agreements of sale were executed on 17.3.1993 and the power of attorney holder addressed a letter to plaintiffs regarding the misplacement of cheques and to issue new cheques under Ex. P2 on 29.5.1993 and receives new cheques under Ex.P3 on 28.5.1993. It is thereafter the paper publication is issued. It can be stated that amounts were also credited to his account on 10.7.1993 and he was aware of the same because he addresses a letter to Karur Vysya Bank.

¶341

¶342

27. Section 208 of the Contract Act requires two ingredients to be satisfied:

¶343

(i) As against a person to whom a power of attorney is given, the revocation becomes effective when he was informed of the same.

¶344

(ii) As against third parties, it becomes effective only when they come to know by paper publication or otherwise.

¶345

This legal proposition has been laid down in judgments of various High Courts. Reference may be made to the judgments reported in AIR 1951 Nag 313 (Para 10), AIR 1970 Mad 76 (Para 2), AIR 1971 MP 191, AIR 2000 Raj 405 (Paras 8 to 13) and AIR 2008 P&H 194 (Paras 10 to 13).

¶346

In this case, very strangely, even DAV Rathnam Setty was not informed of the revocation of power of attorney. DW1 has stated as follows in the cross-examination regarding intimation to DAV Rathnam Setty: (Page 100 of the Paper Book):

¶347

“ £ÀªÀÄä vÁvÀ¤UÉ PÉÆlÖ GPA AiÀÄ£ÀÄß gÀzÀÄÝ¥Àr¹gÀÄªÀÅzÁV £ÀªÀÄä vÁvÀ¤UÉ D PÀÆqÀ¯ÉÃ KPÉ w½¸À°®è JAzÀgÉ £ÀªÀÄä vÁvÀ¤UÉ D jÃw w½¹zÀgÉ CªÀªÀiÁ£À DUÀÄvÀÛzÉ JAzÀÄ D PÀÆqÀ¯ÉÃ w½¸À°®è. £ÀªÀÄä vÁvÀ¤UÉ GPA gÀzÀÄÝ¥Àr¸ÀÄªÀ §UÎ, £É ÉÆÃnÃ¸ÁUÀ°Ã ¥ÀvÀæªÀ£ÁßUÀ°Ã PÉÆnÖgÀ°®è. £ÀªÀÄä vÁvÀ £ÀªÀÄä vÀAzÉUÉ «gÀÄzÀÝªÁV PÉ®¸À ªÀiÁqÀÄvÁÛ ºÉÆÃzÀ PÁgÀt

¶348

¶349

r¸ÉA§gï 1993gÀ°è GPA AiÀÄ£ÀÄß gÀzÀÄÝ¥Àr¸ÀÄªÀ §UÉÎ, ¥ÀæPÀluÉAiÀÄ£ÀÄß PÉÆr¹zÉÝªÀÅ £ÀªÀÄä vÀAzÉUÉ w½¸ÀzÉ £ÀªÀÄä vÁvÀ ¤.¦.1 ªÀÄvÀÄÛ 66 PÀgÁgÀÄ ¥ÀvÀæUÀ¼À §UÉÎ ªÁ¢UÀ½AzÀ ZÉPÀÄÌUÀ¼À£ÀÄß ¥ÀqÉzÀÄPÉÆArzÀÝgÀÄ. CzÀ£ÀÄß ©lÄÖ £ÀªÀÄä vÁvÀ £ÀªÀÄä vÀAzÉAiÀÄ «gÀÄzÀÝªÁV ¨ÉÃgÉ PÉ®¸ÀUÀ¼À£ÀÄß ªÀiÁrgÀ°®è.”

¶350

Thus, revocation is not valid even against DAV Rathnam Setty. In any event, in so far as the plaintiffs are concerned, it could be effective only from 1.2.1993 when the paper publication was given. By that time, new cheques had been issued, they had been credited to the account of Rathnakar and encashed. The reason given for revocation is not that the Power of Attorney was acted against his own son-in-law; but because of personal reasons as stated in Ex. D6.

¶351

28. It is to be noted that DAV Rathnam Setty had only one daughter. She was married to Rathnakar and Rathnakar lived along with his power of attorney holder DAV Rathnam Setty as his "Mane Aliya" in the house of DAV Rathnam Setty. There is absolutely no material whatsoever even to suggest that there was any ill-will against his father-in-law and the father- in-law was acting against his son-inlaw. It is also stated in the cross-examination of DW1, which reads as follows: (Page No. 99 of the Paper Book):

¶352

¶353

“ £ÀªÀÄä vÀAzÉ £ÀªÀÄä vÁvÀ£À ªÀÄ£É C½AiÀÄ DVzÀÝgÀÄ JAzÀgÉ ¤d. £ÀªÀÄä vÀAzÉUÉ £ÀªÀÄä vÁvÀ ªÉÆÃ¸À ªÀiÁqÀÄªÀ GzÉÝÃ±À DvÀ¤UÉ JAzÀÆ EgÀ°®è JAzÀgÉ ¤d.”

¶354

RE: READINESS AND WILLINGNESS

¶355

29. Regarding readiness and willingness, the plaintiffs have produced fixed deposit receipts which are marked as Exs. P4 to P37 in the first suit and Exs. P9 to P55 in the second suit.

¶356

30. It may be stated that fixed deposit receipts were taken back whenever the period was expiring and again filed it into court and before finally taking back the fixed deposit receipts for the disposal of the suit.

¶357

31. The original records may kindly be looked into. As could be seen from them, funds were available on the date of agreement and subsequently and also on the date when the suits were decreed i.e., throughout nearly Rs.19 lakhs were available in each case whereas the amounts payable to the defendant was only Rs.8 lakhs in each case, out of which Rs.50,000/- had already been paid in each case.

¶358

32. It may also be stated DW1 in his examination in chief does not say that the plaintiffs are not ready and willing to perform their

¶359

¶360

part of the contract and they have no funds. In fact, the cross-examination of PW1 with regard to availability of funds is as follows: [Page 73 of the paperbook]

¶361

“1993 gÀ°è ªÁ¢AiÀÄgÀ PÀÄlÄA§zÀªÀjUÉ DgÉÃ¼ÀÄ ªÁ¸ÀzÀ ¸ÀévÀÄÛUÀ¼ÀÄ ºÁUÀÆ M¼ÉîAiÀÄ ªÁå¥ÁgÀUÀ¼ÀÄ EzÀÝªÀÅ J£ÀÄßªÀÅzÀÄ ¤d.”

¶362

33. The judgment of the Hon'ble Supreme Court on this aspect of the matter is reported in (2019) 6 SCC 233 which says when the party deposited the amounts as directed by the trial court, he should have been granted specific performance."

¶363

DECISIONS RELIED ON BY THE PARTIES:

¶364

On behalf of the appellants following decisions have been relied upon:

¶365

1. (2022) 7 SCC 1 (Veena Singh (Dead) through LR. Vs District Registrar And another)-paras 51, 73, 76, 90, 91 and 94

¶366

2. ILR 2007 KAR 4020 (M.N.Ramachandraiah & another Vs The state of Karnataka & others)-Paras 15, 16 and 18

¶367

3. 2009 SCC online Mad 2716 (M/s Soffia Software Ltd.,, vs. Mrs. Kalpagam Bhaskaran)- Paras 10 to 12.

¶368

¶369

4. (2001) 4 SCC 1 (Appropriate Authority & Commissioner, Income Tax Vs Varshaben Bharathbhai Shah and others) - Para 8

¶370

5. (1999) 3 SCC 573 (Vidhyadhar Vs. Manikrao and another)-Para 17

¶371

6. (2011) 12 SCC 658 (Vimaleshwar Nagappa shet Vs. Noor Ahmed Shariff & others) -Pars 11.

¶372

7. ILR 2005 KAR 884 (T.L.Nagendra Babu Vs Manohar Rao Pawar) Paras 13,21,22,23.

¶373

8. AIR 1992 BOM 149 (Prataprai Trumbaklal Mehta Vs. Jayant Nemchand Shah and another)- Paras 10, 11

¶374

9. AIR 1984 DEL 363 (M/s Electric Construction and Equipment Co. Ltd., Vs M/s Jagjit Electric Works Sirsa)-Paras 8 and 11.

¶375

10. (2005) 2 SCC 217 (Janaki Vash deo bhojwani and another Vs Indusind Bank Ltd and others) -Paras 10, 13 and 15.

¶376

11. 2006 SCC Online Kar 470 (Sharadamma V/s Kenchamma and others)-Paras 5 to 8.

¶377

12. (2013) 8 SCC 131 (Satya Jain and others Vs. Anis Ahmed Rushdie and others) - Paras 40 to 42.

¶378

13. (1997) 3 SCC 1 (K.S. Vidyanadam and others Vs. Vairavan)-Paras 10 & 13.

¶379

¶380

14. (2002) 5 SCC 481 (Nirmala Anand V/s Advent Corporation (P) Ltd., and others)Paras 18 and 23.

¶381

15. (2006) 7 SCC 470 (M. Meenakshi and others V/s Metadin Agarwal and others)Paras 23, 24 and 25.

¶382

16. (2012) 8 SCC 706 (Church of Christ Charitable Trust and Educational Charitable Society Vs. Ponniamman Educational Trust) -Para 19"

¶383

On behalf of the respondents, following

¶384

decisions have been relied upon and the relevant portions

¶385

reads as under:

¶386

1	Rangappa Nayakar v. Rangaswamy Nayakar *AIR 1925 Mad 1005:* *MANU/TN/* *0574/1924*	Sham transaction is where no title is intended to be passed, though a registered deed is brought into existence. (Para 5)	1-6
_Re : _	Document signed by a business	man
2	Grasim Industries Ltd. v Agarwal Steel *(2010) 1 SCC 83*	When a businessman signs a document, there is a stronger presumption that he would have read, understood and affixed his signature. (Para 6)	7-8

¶387

RE: Evidence by a Power of Attorney holder

¶388

¶389

3	Man Kaur v. Hartar Singh Sangha	Where all affairs are completed managed by an attorney who may	9-19
	*(2010) 11 SCC 512*	be a close family member, he can depose with reference to bona fides or readiness willingness. (Paras 15,18)
4 RE:	Bhimappa v. Allisab *AIR 2006 Kant 231:* *MANU/KA/8293/2006* Section 208, Indian Contract Act	There is no bar for power of attorney to lead evidence. (Paras 10, 15)	20-27
5	Janardhan Jaikrishna v. Gangaram Mangalchand *AIR 1951 Nag 313:* *MANU/NA/0062/1949*	Insofar as a third party is concerned, the termination of a contract of agency will take effect only from the time the third party obtains knowledge of it. [Para 10]	28-30
6	Kathoom Bivi Ammal v. Arulappa Nadar *AIR 1970 Mad 76:* *MANU/TN/0088/1970*	Same as above [para 2]	31-37
7	Kulasekarapatnam v. Radhelal Lallolal	Same as above	38-43

¶390

¶391

	*AIR 1971 MP 191:* *MANU/MP/0056/1971*	[Ink page 42]
8	Kashi Ram v. Raj Kumar *AIR 2000 Raj 405:* *MANU/RH/0221/2000*	Same as above [Paras 8 to 14]	44-47
9 RE: D	Ram Asri v. Rakesh Chand *AIR 2008 P&H 194:* *MANU/PH/0697/2008* eposit of balance sale considerat	Same as above [Paras 10 to 13] ion before the court	48-53
10. RE: P	Beemaneni Maha Lakshmi v. Gangumalla Appa Rao *(2019) 6 SCC 233* rice escalation	Plaintiff entitled to specific performance when he deposits balance sale consideration Before the court to show bona fides. (Para 14)	54-59
11. RE: S	Nirmala Anand v. Advent Corporation *(2002) 8 SCC 146* pecific performance no longer di	Specific performance cannot be denied only on account of phenomenal increase of price during the pendency of litigation. (Para 6) scretionary	60-63
12.	B. Santoshamma and Ors	Relief of specific performance of a	64-81

¶392

¶393

v. D. Sarala and Ors.	contract is no longer
*MANU/SC/0698/2020*	discretionary after the 2018 amendment.
	(Para 70)

¶394

This court perused the materials on record meticulously including written arguments filed along with the list of authorities relied on, on behalf of the parties.

¶395

POINTS FOR CONSIDERATION

¶396

In view of the rival contentions, following points would arise for consideration:

¶397

(i) Whether the plaintiffs have successfully established that the sale agreements are duly and properly executed by the defendant?

¶398

(ii) Whether the plaintiffs have further established that they were always ready and willing to perform their portion of the contract?

¶399

(iii) Whether the appellant/defendant has made out that the sale agreement are sham in nature and if put to enforcement, it will put to great hardship and injury?

¶400

¶401

(iv) Whether the impugned judgment is suffering from legal infirmity or perversity and thus calls for interference?

¶402

(v) What order?

¶403

EVIDENCE :

¶404

Before the Trial Court, in order to prove the case of the plaintiffs, Sri M.S. Balakrishna Setty, who is one of the plaintiffs in OS No.4361/1997 is examined as PW1. He claims himself to be the power of attorney holder of all the plaintiffs in both the suits. He filed an affidavit in lieu of his examination in chief reiterating the plaint averments in both the suits. He relied on the documentary evidence wherein he has marked the letter written by the power of attorney holder of the defendant along with receipt Exs.P1 and P2. Office copy of the legal notices as Exs.P3 and P4, reply received to the legal notice as Ex.P5 office copy of the letter dated 23.12.1993 and postal acknowledgement at Ex.P6 letter given by Karur Vyshya Bank as Ex.P7, photo copy of Bank pass book as Ex.P8, FD receipt issued by Karuru as Exs.P9 to P65. Agreement

¶405

¶406

dated 17.3.1993 as Ex.P6. Notice dated 30.6.1994 as Ex.P7 and reply thereof as Ex.P68. By filing additional affidavit, he has further deposed that he has produced the certified copy of the sale deed dated 3.9.99 executed by Usuf and others in favour of the MN Suresh, wherein the property situated in the vicinity of suit property measuring about 604 sq. feet has been sold for a sale consideration of a sum of Rs.9,50,000/- so also certified copy of another sale deed wherein one BN Manjunath has sold the property to T.N. Umesh measuring 1130 sq. feet for a sale consideration of Rs.4,70,000/- in the year 1987. The copies of the sale deeds are marked as Exs.P69 and 70.

¶407

Similarly in OS No.4361/1997 he has deposed by filing an affidavit, wherein he has relied upon 46 documents which were exhibited as Exs.P1 to P46.

¶408

By order dated 1.9.2009 on a memo filed on behalf of the learned counsel for defendant, OS No.4361/1997 is clubbed with OS No.6281/1994 and cross

¶409

¶410

examination of PW1 in both the cases is conducted in common.

¶411

In such cross examination, it is elicited that plaintiffs in both the suits are brothers. In OS No.6281/1994, PW1 has deposed as a power of attorney holder of the plaintiffs and he is one of the plaintiffs in OS No.4361/1997. He admits that plaintiffs in OS No.6281/1994 are the residents of Bengaluru and they have no impediments to depose before the court. He admits that plaintiffs in OS No.6281/1994 are literate persons and they are businessman for 20-30 years.

¶412

He admits that both the suit properties are situated in Chickpet and by lease deed dated 22.12.1983 both the properties are taken on lease for a period of 32 years and the said sale deed is a registered sale deed. He admits the same and the same is marked as Ex.D1. He admits that suit properties are very old building and it has got three shop premises, and one shop premises is in his possession and other two shops are in the possession of

¶413

¶414

other tenants. He admits that in Ex.D1 there is a recital that the plaintiffs are required to evict the tenants and demolish the existing structure and construct a new structure and after 32 years new building needs to be handed over to the defendant without consideration. He admits that as per clause No.5 of Ex.D1, plaintiffs were given lease for a period of 32 years.

¶415

In his further cross examination, he has answered that he had discussed with the tenants who are residing there between 1983 to 1993. He pleaded ignorance as to in one of the shop premises, TVR Gupta was a tenant and he was doing cloth business. He also pleaded ignorance of pendency of the proceedings in HRC No.530/1960 filed by the defendant against TVR Gupta and Company. He denied the suggestion that non taking of any action to evict the tenant resulted in frustration to the defendant. He denied the suggestion that taking advantage of such frustration, plaintiffs cajoled the defendant in executing the suit agreements. He denies the

¶416

¶417

suggestion that the defendant returned the cheques given under the suit agreements without encashing. He has answered that sum of Rs.50,000 was paid as advance in respect of both the suit agreements through cheques. He identifies them on confrontation and marked as Exs.D1 and D3. He admits that both the cheques are not encashed. He denied the suggestion that defendant returned those cheques with a covering letter dated 18.3.1993 and thereafter, sought for return of the suit agreement as he was not proceeding with the suit agreements. He has further answered that DAV Rathnam Setty is the father-in-law of the defendant. He denied the suggestion that in collusion with Rathnam Setty, suit agreements came into being. He denied the suggestion that the defendant did not receive any advance sale consideration and suit agreements were obtained cunningly. He denies the knowledge of the cancellation of the power of attorney by the defendant in favour of his father-in-law DVS Rathnam Setty in January 1993.

¶418

¶419

He admits that in the year 1993, defendant was carrying on silk business and the shop in which he was carrying on silk business was sufficiently a big shop. He has answered that defendant is a partner in Vijayalakshmi Silks and Sarees. He has further answered that defendant is having 7-8 plots in Jayanagar apart from big landed property. Defendant has also got three to four properties in VV Puram and he is having rental income. He denied the suggestion that there was no necessity for defendant to sell the property in favour of the plaintiffs.

¶420

He admits that the photo copy of the Will on confrontation executed by his father is marked as Ex.D4. He denied the suggestion that since the plaintiffs are possessing good number of properties, plaintiffs would not be put to any hardship if the suits are dismissed.

¶421

He admits that father-in-law of the defendant died in the year 1997 and at that juncture he was aged 87-88 years. He pleaded ignorance that the property value in Chickpet as per the guideline value of the

¶422

¶423

Government is Rs.6,000/- per square feet and suit properties are valued between 70 to 75 lakhs.

¶424

Sri Tallam N. Nanjundasetty is examined as PW-2. He filed an affidavit in lieu of his examination in chief, wherein he deposed that he is acquainted with plaintiffs and defendant since several decades. He further deposed that he used to meet plaintiffs and defendant in social functions frequently. He deposed about defendant marrying only daughter of DAV Ratnam Setty and after marriage, defendant started living in the house of Rathnam Setty as Illatam Alladu (Mane Aliya - Son-in-law staying in the house of father-in-law). He further deposed that all the properties left behind by DAV Rathnam Setty is inherited by Sri A.C. Rathnakar (defendant) after the death of DAV Rathnam Setty. He further deposed that defendant is carrying on business in silk and he has other businesses as well. He further deposed that plaintiffs in both the suits carrying on business in portion of the suit properties and remaining portion of the suit properties are in occupation

¶425

¶426

of the tenants. He further deposed that in the year 1993, late Manandi Srinivasa Setty first plaintiff in OS No.4361/1997 approached him and told that AC Rathnakar intends to sell the suit property and therefore, requested him to negotiate the terms of the sale. Accordingly, in the year 1993, himself and Manandi Srinivasa Setty, approached AC Rathnakar and negotiated the terms of the sale in the presence of the father-in-law of AC Rathnakar and after detailed discussion, suit agreement came to be executed by plaintiffs and defendant. He further deposed that after drafting of suit agreements the same was handed over to Rathnakar, who went through the same meticulously and subscribed his signature. He further deposed that sum of Rs.50,000/- each was paid as advance sale consideration in respect of both the agreements through cheques. He further deposed that he had assured the plaintiffs that if they need any financial assistance in completing the sale transaction, he would assist the plaintiffs.

¶427

¶428

He has further deposed that he had signed as a witness in both the agreements and he identified the same in his further examination in chief.

¶429

In his cross examination, he has answered that he has seen the suit properties. He pleaded ignorance about the lease deed. He admits that Manandi Srinivasa Setty is his far relative. He admits that he has been elected as President and Vice President for number of organisations. He denies that he had been elected as President of Vasavi Union and father in law of defendant had opposed him. He denied the suggestion that defendant never intended to sell the suit property. He pleaded ignorance about cancellation of power of attorney which was given in favour of his father in law. He admits that at the time of suit agreement family of defendant was affluent. He admits that the negotiations last for about 1½ hours. He has answered that he does not remember the fact that who prepared suit agreements and where.

¶430

¶431

Sri A.R.Mahesh son of the defendant is

¶432

examined as DW1. In respect of both the suits, he filed a affidavit in examination in chief reiterating the contents of the written statement. In his cross examination, he admits that he completed his education in the year 1987 and he is looking after the business. He admits that he came to know about the case for the first time in the year 1994. He admits that he came to know about the suit agreements from his father in the year 1993 and he was not part of the negotiation in respect of the suit agreements and he has no personal knowledge about the suit agreements. Based on the information given by his father, he has filed the affidavit in lieu of his examination in chief. He admits that plaintiffs are sound enough to pay the balance sale consideration and get the sale deed executed. He admits that in the year 1983 when the lease deed was executed he was aged 18-19 years and he was not part of the negotiation in respect of the lease deed. He admits that his father had executed a general power of attorney in favour of his grandfather (father-in-law of

¶433

¶434

defendant). He has answered that cancellation of said Power of Attorney was published in December 1993. he admits that till the year 1993, all the bank transactions of his father was looked after by his grandfather. He admits that he is in possession of statement of accounts of Corporation Bank and correspondence between his father and Corporation Bank and he had no impediment to produce the same to the court. He admits that since his parents were frequently visiting Abroad, in order to smooth running of business transactions, his father had executed GPA in favour of his grandfather and his grandfather had no intention to cheat his father. He admits that his father was staying with his father-in-law. He has answered that his grandfather had been orally intimated about the cancellation of GPA before issuing Ex.P66. He admits that till the date of death of his grandfather in the year 1987, himself, his family members and his grandfather were all living together. He admits that Adinarayana is one of the attesting witnesses to Ex.D6. he admits that there is no date mentioned in Ex.D6 as to when it was notarized.

¶435

¶436

He admits that his grandfather had never acted against the interest of his father. He admits that no action was taken by his grandfather against the plaintiffs for having forcibly got executed the suit agreements.

¶437

In his further cross examination, he admits that there is no document to show that his grandfather was not mentally fit. He admits that Ex.P1(C) and Ex.P1(G) are the signatures of his father in suit agreements. He admits that he has no document to show that plaintiffs are possessing large number of properties.

¶438

He admits the katha extracts in respect of the properties possessed by his father and mother which were marked as Exs.P47 to P50.

¶439

The following dates are important for

¶440

appreciation of the case on hand:

¶441

"Date	Event
17.03.1993	Agreements of Sale executed by the
[Ex.P1,	defendant in favour of the plaintiffs in
Ex.P.66]	both the suits.

¶442

¶443

20.05.1993 [Ex.P2]	Letter by the power of attorney hold the defendant to the plaintiffs st	er of ating
	that the two cheques, each	for
	Rs.50,000/- paid as advance	are
	misplaced and requesting	for
	replacement of those cheques.
28.05.1993 [Ex.P3]	Receipt is issued by the powe attorney holder of the defendant	r of for
	having received two new cheque desired under Ex. P2. [Defendant wants to get over Ex.P2 Ex.P3 on the ground that the powe attorney was revoked under Ex.D6 d 22.01.1993. It has come in evid that the revocation was not informe	s as and r of ated ence d to
	the power of attorney holder. newspaper publication was taken	The on
	17.12.1993. By virtue of Section	208,
	Contract Act, if at all there is r	eally
	revocation, it will operate ag	ainst
	plaintiffs only from 17.12.1993. request for replacement of cheques delivery of new cheques was in 1993.]	The and May,
10.07.1993	Cheques were encashed
17.07.1993 [Ex.D7]	Letter by the defendant to the Mana	ger,

¶444

¶445

	Corporation Bank enquiring about two cheques and proceeds credite his account.	the d to
20.07.1993	Reply by the bank to the defen	dant
[Ex.D8]	intimating that the two che	ques
	encashed were issued by M S Sri (Plaintiff No.1 in the first suit);	dhar even
	then, absolutely no reaction by defendant. He keeps quiet.	the
23.12.1993 [Ex.P.41]	Request by the plaintiffs to defendant to make available	the the
	documents as required under agreement of sale. No reply to this.	the
29.01.1994	Letter by Sri. Anup Shah, Advocat	e to
[Ex.P38]	the defendant to make available documents as agreed under agreement of sale. No reply to this.	the the
02.05.1994 [Ex.P.39]	Another notice by the plaintiff's Advo to furnish documents.	cate
18.07.1994	After two months, a reply is sen	t to
[Ex.P.40]	Ex.P39 where for the first time, pleaded that the agreements of sale sham."	it is are

¶446

¶447

DISCUSSION AND CONCLUSION:

¶448

On cumulative consideration of the oral and documentary evidence on record as referred to supra, the learned counsel for the appellant has challenged the finding recorded by the Trial Court in decreeing the suit by contending that the second plaintiff in OS No.4361/1997 is examined as PW-1 and he has no power to depose on behalf of the plaintiff in OS No.6281/1994. He has further contended that Power of Attorney marked at Ex.P44 is signed by plaintiff Nos.2 to 4 only and therefore, oral evidence of PW-1 in so far as OS No.6281/1994 needs to be ignored and as such, there is no witness who is examined on behalf of plaintiff in OS No.6281/1994 to prove the suit agreement.

¶449

Respondent replied that power of attorney does not require definite format and requires no attestation and as per Section 85 of the Indian Evidence Act, it needs to be proved by notarizing the Power of Attorney or executing the same before the Magistrate. In

¶450

¶451

the case on hand, since there is no challenge to Ex.P44 before the Trial Court, question of proof of Ex.P44 would not arise and therefore, said contention needs to be brushed aside.

¶452

In order to appreciate the said contention this court meticulously considered the genuineness of Ex.P44. Admittedly, the same is not signed by the first plaintiff. Therefore, said Power of Attorney does not authorise PW-1 to depose on behalf of all plaintiffs. However, as rightly argued by learned counsel for respondent Ex.P44 was not challenged in the Trial Court. But, there is no bar for the defendant/appellants to urge the said ground before this court as this court can re-visit both on facts and on law in view of the power vested in this court under Section 96 of the CPC.

¶453

The aforesaid dispute as to the competency of PW-1 can be resolved easily by the material on record by order dated 1.9.2009, defendant sought for clubbing of both the suits and cross examined PW-1 in common in

¶454

¶455

respect of both the suits even though examination in chief of PW-1 is recorded separately in both the suits. No doubt, PW-1 is not a signatory to Ex.P1. However, plaintiffs in OS No.6281/1994 are none other than the brothers of PW-1 and therefore, PW-1 is aware of the suit transaction as is found in Ex.P1. In other words, Ex.P1 stood proved by narrating the contents of Ex.P1 and identifying the signature of plaintiffs and defendant by PW.1. Since on his volition, defendant sought for clubbing of both the suits and not challenged the genuineness of Power of Attorney marked at Ex.P44, this court is unable to countenance the arguments put forth on behalf of the appellants that PW-1 is not competent to depose about the suit transaction in OS No.6281/1994 and thus, adverse inference will have to be drawn against plaintiffs in the said suit for non examination of party to the suit. Doctrine of acquiescence and waiver would be applicable to the case on hand in all force in so far as conduct of defendant is concerned. Accordingly, the first ground of attack to the

¶456

¶457

impugned judgment canvassed on behalf of the appellants needs to be rejected.

¶458

In view of the factual aspects involved in the case on hand, especially memo being filed on behalf of the defendant seeking clubbing of both the suits and defendant having cross examined the PW-1 in common in respect of both the suits, the principles of law enunciated in the decisions relied on behalf of the appellant in Nagendra Babu, Pratap Rai, Triambaklal Mehta Electronic Construction and Equipment Co ltd., supra has no application to the case on hand; since this court has held that PW-1 is competent witness to depose on behalf of the plaintiffs in OS No.6281/1994, further discussion on the decisions relied on by the respondents/plaintiffs in respect of the validity of Ex.P44 is un-necessary.

¶459

Further, one of the attesting witnesses namely Tallam N. Nanjunda Setty having been examined as PW-2 and in his cross-examination, there is no suggestion that suit agreements are not executed by defendant Rathnakar,

¶460

¶461

Exs.P1 and P66 stands proved. It is pertinent to note that execution of suit agreements is not even disputed by the defendant. But, it is the contention of the defendant that he was obliged to sign suit agreements. Under what circumstances suit agreements came to be executed is detailed out in the written statement and examination in chief of DW-1. Suggestions made to PW-1 in his cross examination reveals that the portion of the suit property was leased to plaintiffs in both the suits by a registered lease deed for a period of 32 years and there was a condition in Clause V of lease deed and plaintiffs failed to adhere to the said clause V and defendant was frustrated and in such frustration, he executed suit agreements. But, PW-1 has denied the same.

¶462

In order to better appreciate said factual aspect it is necessary to cull out Clause V of Ex.D1 - Lease deed which reads as under:

¶463

¶464

V. NOW THIS DEED OF LEASE WITNESSESTH AS FOLLOWS:

¶465

That in consideration of the foregoing and the rent herein reserved, the Lessor hereby grants and the lessees hereby accept the lease of the entire premises bearing No.187 to 190 (Old No.958 to 961) and Site earlier 837 to 840), Old Taluk katcheri Road, Chickpet, Corporation Division No.17, Bangalore, more fully described in the schedule written hereunder and show in the annexed in the plan by the letters ABCDEFA and hereinafter referred to as the schedule property, for a period of thirtytwo years certain from this day on the following terms and conditions;

¶466

1) DELIVERY OF POSSESSION:

¶467

The Lessor has this day put the lessees in constructive possession of the entire schedule property by way of attornment of tenancy and the lessees acknowledge having received possession, accordingly. It shall be the responsibility of the lessees to secure vacant possession of the schedule property from the tenants, either by legal action or by negotiating a settlement and lessees shall bear the expenditure if any therefor.

¶468

2) DEMOLITION OF EXISTING STRUCTURE:

¶469

The Lessees are entitled to demolish the existing structure in the leased premises. The Lessees are entitled to the salvaged materials obtained by demolition of the building.

¶470

¶471

3) CONSTRUCTION OF NEW STRUCTURE:

¶472

3.1) The lessees shall be entitled to construct a nonresidential multi-storied building consisting of not less than three floors. The lessees shall be entitled to make such extensions, additions or alterations to the building erected by them, from time to time, during the period of lease. The entire cost of construction shall be borne by the lessees and the lessees shall not be entitled to any reimbursement of the cost thereof or the cost of the electrical, water supply, sanitary and other fixtures and fittings made therein at the time of surrender of the building. The construction shall be of the first class quality using quality materials and shall be as per the designs and drawing of a qualified Architect/Engineer. The lessees shall also intimate the lessor in writing, the date of obtaining vacant possession the date of sanction of Licence/plan and other cost of superstructure.

¶473

3.2) The design and manner of construction of building on the schedule property shall be left to the discretion of the lessees who shall prepare and secure the plans duly sanctioned by competent authorities at their cost.

¶474

3.3) For the purpose of construction, the lessees are also hereby authorised to apply for and obtain licences and sanction of the plans for the demolition and proposed construction and additions and alterations

¶475

¶476

thereto, from the Corporation of City of Bangalore or other Competent Authority, and also facilities and amenities like water, electricity underground drainages, etc., at the cost of the lessees.

¶477

4) INDEMNITY:

¶478

4.1) The Lessees shall indemnify the lessor against all costs, losses, damages if any incurred by the owing to any act or omission of the lessees in constructing the new building in the schedule property or any other loss suffered during the construction or thereafter on account of any default on the part of the lessees.

¶479

4.2) The Lessees shall take care and attention while pulling down the existing building or at the time of construction so as not to injure any person, property and shall indemnify the lessor against all costs, loss, damages, if any, which the lessor may suffer, owning to the negligence of the lessees in pulling down the building or in putting up the construction.

¶480

5) RENT:

¶481

5.1) The Lessees hereby agree and undertake to pay punctually to the lessor herein the monthly rent as stated hereunder without deducting any sum:

¶482

a) Rs.1000/- (Rupees one thousand) per month from this date till the date lessees obtains a Licence for construction from the

¶483

¶484

Corporation of City of Bangalore and gets the plan sanctioned;

¶485

b)Rs.1500/(Rupees one thousand five hundred) per month from the date of obtaining the licence and sanctioned plan from the Bangalore City Corporation, till the expiry of a period of 18 months after the date of obtaining vacant possession from the tenants;

¶486

c) Rs.2500/- (Rupees two thousand five hundred) per month thereafter till the expiry of the tenth year of the lease;

¶487

d) Rs.2750/- (Rupees two thousand seven hundred and fifty only) per month from the 11^th year of lease to the end of 20^th year of lease; and

¶488

e) Rs.3000/- (Rupees three thousand) per month from the 21^st year of lease to the end of 32^nd year of lease.

¶489

5.2) The rents stipulated above in respect of each calendar month shall be paid on or before the fifth of the following month.

¶490

6) LESSEE'S RIGHT TO SUB-LEASE, TRANSFER, ETC. 6.1) The Lessees shall be entitled to grant sub-lease or enter into agreements of the nature of leave and

¶491

¶492

licence in respect of the whole or any portion of the new building to any one and collect the rents directly from them provided that the period of such sublease/s or licence/s should not extended beyond the period of lease under this deed. Further if the lessees accept any deposits or advances, they shall be responsible for refund of the same to their subleases.

¶493

6.2) The lessees are permitted to raise any loan, credit facility or financial accommodation from any Banks or financiers on the security of their lease-hold rights, the value of the proposed super structure and of the good will of the lessees under this lease deed, without affecting the title or the right of the lessor. It is enjoined on the lessees that they shall liquidate such debts before the expiry of the lease and handover the building free of any charge or encumbrance. Any encumbrance, charge or mortgage created on the leasehold rights, or the proposed super structure or of the goodwill of the lessees which extends beyond the period of lease, shall be void as against the lessor and the lessor shall not be liable therefor. The lessees shall indemnify the lessor against all losses, costs, damages which the lessor may suffer on account of any breach of this term, by the lessees.

¶494

¶495

6.3) Any transfer, other than transfers referred to in Cl. (6.1) and (6.2) above and other than transfers among the Lessees and their children shall only be with the written consent of the lessor.

¶496

7) REPAIRS & MAINTENANCE & INSURANCE:

¶497

7.1) The Lessees undertake to keep the proposed super structures on the schedule property and the fittings therein in a state of good repair either at their cost or at the cost of their sub-lessees or licences and shall also effect necessary white and colour washing or painting as and when found necessary.

¶498

7.2) The Lessees shall keep the new structure to be constructed insured against fire, for a sum not less than Rs.2,00,000/- during the period of lease.

¶499

8) ADDITIONAL FLOORS:

¶500

In the event of the lessees constructing more than four floors, they shall be liable to pay to the lessor, additional rent to the Lessor at the rate of Rs.250/per month per additional floor. The parties shall enter into a separate Lease Deed in respect of such additional floor/s, the period of such lease being coterminus with this lease, the other terms of lease being the same as those contained in this lease deed. The rent for the additional floor/s shall be

¶501

¶502

payable from the date of completion of the additional floor/s.

¶503

9) TAXES, ELECTRICITY & WATER CHARGES ETC.

¶504

9.1) The Lessor shall bear and pay the property taxes and cesses in regard to the schedule property leased to the Lessees. However after demolition and construction of a multi-storied building by the lessees, the liability of the lessor to pay property tax shall be only in regard to the land. The lessees shall bear all taxes, rates and cesses payable to Bangalore City Corporation or any other authority whatsoever (including wealth tax) in respect of super structure or its use for any purpose by the lessees or the sublessee/s or any other person/s.

¶505

10) INSPECTION:

¶506

The Lessor or his Authorised Agents shall have the right to enter upon and inspect the schedule property at all reasonable hours of the day.

¶507

11) VESTING OF SUPERSTRUCTURE IN LESSOR:

¶508

It is hereby agreed that on the expiry of the lease period of thirtytwo years from this day, the entire super structure on the schedule property together with electricity, water supply sanitary and other fixtures/fittings, shall vest in the lessor and be surrendered by the lessees to the lessor free of cost or payment of or total destruction thereof, any

¶509

¶510

compensation or amount payable on account of such acquisition or destruction shall be apportioned between the lessor and the lessees in the manner following provided such acquisition or destruction takes place within the period of lease;

¶511

(a) the compensation in regard to the land shall be payable to the lessor.

¶512

(b) the compensation allocable to the super structure business loss and any other compensation shall be devided between the lessor and the lessees in the ratio of the period of lease expired and the period of lease unexpired. Thus the lessor shall be entitled to compensation as stated below:

¶513

The period of lease expired Compensation for the super till the date of acquisition of structure (that is the entire super structure (Number of compensation less years) compensation for the land)

¶514

____________________ X_

¶515

Thirty Two

¶516

The Lessees shall be entitled to the compensation as under:

¶517

Period of Lease Compensation for the super unespired (number of years) structure (that is the entire _____________________ X compensation less Thirty Two compensation for the land)

¶518

¶519

c) If the acquisition takes place after the period of lease, the lessor shall be entitled to the entire compensation.

¶520

14) REQUISITION:

¶521

If for any reason the use the occupation of all or any portion of super structure on the schedule property or the schedule property is requisitioned by any authority under any law without affecting the title of the lessor, compensation allocable for such use and occupation shall become payable to the lessees only for the period of unexpired lease subject to the liability of the lessees to pay the rent stipulated above and any compensation allocable for such use and occupation after the period of lease shall be payable only to the lessor.

¶522

15) LESSOR'S COVENANTS:

¶523

15.1) Subject to the payment of rent stipulated above, the lessees shall held, possess, build upon and enjoy the schedule property and receive the rents and profits therefrom for a period of thirtytwo years certain commencing from this day without any interference or hindrance from the lessor or any person claiming any title under the lessor and shall also be entitled to the use and enjoyment of all the necessary rights, like light, air, hereditaments and appurtenances that belongs to or reputed to belong to the schedule property.

¶524

¶525

15.2) The Lessor shall do and execute all acts, deeds and things as may be legally required by the lessees and at their cost, for the purpose of securing the required licences etc., from the Corporation of the City of Bangalore or to get the plan sanctioned or in getting electrical and water connections and all other matters connected with the maintenance of the building or for making any additions or alterations thereto, from time to time.

¶526

16) TERMINATION:

¶527

In the event of the lessees committing nine constructive defaults in payment of rents during the period of lease, the lessor shall issue a written notice to Lessees No.1, 3, 4 and 6 representing the lessees, calling upon them to pay up the arrears within one month. If the lessees fail to pay up the arrears even on the expiry of such period, then the lessor may determine the lease irrespective of the period of lease stipulated in this deed and the lessor shall be entitled to re-enter the premises and assume possession. In that event, the lessees will be entitled to receive from the lessor, compensation in regard to the super structure, to the extent of the un-expired period of lease in accordance with the following formula:

¶528

Unexpired period of lease

¶529

(No. of years) X Value of superstructure Thirty Two

¶530

¶531

17) LEASE PERIOD:

¶532

The period of lease of 32 years shall not be extended on the ground that there is any delay in obtaining possession or construction of the building.

¶533

18) PRE-EMPTION:

¶534

In the event of the lessor deciding to sell the schedule property, during the period of lease, he shall give the first option to purchase the same at the prevailing market price to the lessees by giving one month clear notice in writing. If the lessees do not opt to purchase the same within one month from the date of receipt of such notice, the lessor shall be entitled to sell the same to any other party.

¶535

19) APPLICABILITY OF ACT:

¶536

The provisions of Transfer of property Act or other laws in force may be applied wherever it is necessary to give effect to any of the clauses of this deed and for the adjustment of the rights of the parties hereto;

¶537

20) CUSTODY OF THE LEASE DEED:

¶538

The original of this deed shall be with the lessees while the duplicate shall be with the lessor.

¶539

SCHEDULE

¶540

'L' shaped premises (consisting of ground floor and first floor) bearing No.187 to 190 (old No.958 to 961 and still earlier No.837 to 840), Old Taluk Cutchery

¶541

100

¶542

Road, Chickpet, Corporation Division No.17, Bangalore, measuring (6.86M x 11.66M) plus (3.00M x 2.89M) in all measuring 88.66 Sq.Mtrs shown in the annexed plan by the letters ABCDEFA, measuring and bounded as follows:

¶543

AB		: 9'6" (2.89M)
BC		: 9'10" (3.00M)
CD		: 28'9" (8.77M)
DE		: 22'6" (6.9M)
EF		: 38'3" (11.66 M)
FA		: 32'4" (9.86M)
On the East	:	By private property in the occupation of Maharaja Frame Works and open space;
West	:	By common passage (Gowramma Hostel Lane);
North By	:	Road (Chickpet); and
South	:	By private property in the occupation
		of M/s. P.A. Periaswamy Mudaliar & Sons.

¶544

(Market value of the leased property is Rs.55,000/-) IN WITNESS WHEREOF the parties have hereunder affixed their signatures on the day, month and year above first written at Bangalore City in the presence of the attestors to this deed.

¶545

101

¶546

WITNESSES: Sd/- LESSOR 1) Sd/2) Sd/-

¶547

1) Sd/2) Sd/3) Sd/-

4) Sd/-

5) Sd/-

6) Sd/7) Sd/-

LESSEES"

Admittedly, the tenants in the remaining portion of the suit properties were not evicted by plaintiffs nor new construction has been erected on the suit property after demolishing the old structure. As such, the proper course for the defendant was to terminate the lease agreements and evict the plaintiffs from the portion of the suit properties. The contention of the defendant that plaintiffs with ulterior motive of getting the property sold to them, did not adhere to clause V of the lease deed, whereby, the defendant was constrained to execute the suit agreements remains only suggestion on record without

¶553

102

¶554

there being any plausible proof thereof. However, in establishing such contention, a feeble attempt is made by the defendant by contending that the cheques that was given at the time of execution of the suit agreements in a sum of Rs.50,000/- each were not encashed by the defendant. No doubt, on record Exs.D2 and D3 are marked which are the cheques issued towards the advance sale consideration in a sum of Rs.50,000/- each in respect of Exs.P1 and P66. However, it is the contention of the defendant that those cheques were returned to the plaintiffs through covering letter dated 20.05.1993. If the cheques were returned to the plaintiffs, how could it be confronted to PW-1 in his cross examination is a question that remains un-answered. The fact remains that when Exs.D2 and D3 were not encashed by the defendant, for the reasons best known to him, two more cheques were issued by the plaintiffs in favour of defendant through DVS Rathnam setty who is the power of attorney holder of A.C. Rathnakar. The same were credited to the account of A.C. Rathnakar by Rathnam Setty. Later on, defendant said to

¶555

103

¶556

have instructed his banker to transfer the amount covered under the cheques in suspense account. If the contention of the defendant is to be accepted that he was not interested in proceeding with the suit agreements and therefore, he did not encash Exs.D2 and D3 and he instructed his banker to keep the proceeds of subsequent cheques in suspense account, what prevented the defendant to return the sum of Rs.1,00,000/- and issue a notice cancelling the suit agreements is again a question that remains un-answered on behalf of the defendant.

¶557

On the contrary, DW-1 admits in his cross examination that DVS Rathnam setty being the power of attorney holder of defendant, did not have any intention to cause harm or loss to the defendant. It is also admitted fact that DVS Rathnam Setty is none other than the fatherin-law of the defendant and whenever defendant visited Abroad, for smooth running of his business, defendant had executed a Power of Attorney in favour of DVS Rathnam Setty. DW-1 admitted that statement of account and bank

¶558

104

¶559

correspondence pertaining to defendant is available with DW-1 and he had no impediment to furnish the same before the Court. However, for the reasons best known to DW-1, he has not furnished the same before the Court. If at all, the version of the defendant that he did not encash the advance sale consideration only with an intention to terminate the agreement, what prevented DW-1 to place the bank correspondence and statement of account pertaining to defendant, is again a question that remains un-answered. No positive steps are taken by defendant by filing a suit for cancellation of suit agreement etc., even after he had been served with suit summons.

¶560

Thus, the contention taken on behalf of the defendant that there is no sale consideration at all in respect of the suit agreement and the conduct of the defendant in not adhering to the clause V of suit agreements cannot be countenanced in law.

¶561

105

¶562

DW-1 further admits in categorical terms that plaintiffs had sufficient financial capacity to pay the balance sale consideration.

¶563

Defendant having taken a plea that the suit agreements were signed under frustration and there was no sale consideration in respect of the suit agreements, did not establish the said plea by placing appreciable evidence on record. On the contrary, the plaintiffs have established the suit agreements by examining PW-1 and one of the attesting witnesses as PW-2. It is pertinent to note that PW2 did not possess any enmity or animosity against defendant nor extra affinity towards plaintiff.

¶564

Yet another ground on which the defendant tried to attack the suit agreements is that the value of the suit property mentioned in the suit agreements did not match with the existing Government guideline value of the suit property as on the date of agreement.

¶565

106

¶566

In this regard, PW-1 has been suggested that

¶567

suit property was valued about 70 to 75 lakhs as on the date of suit agreements Exs.P1 and P66. Admittedly, in Exs.P1 and P2, the properties agreed to be sold in a sum of Rs.8 lakhs each. In reply notice Ex.P40 there is no mention that the value of property is undervalued in suit agreements. There is a specific contention taken in the reply notice that the defendant did not enter into the suit agreements at all and the plaintiffs taking advantage of the old age of the father-in-law of the defendant, managed to get the suit agreements executed by defendant. Admittedly, even after reply notice, no positive action is taken by the defendant in cancelling the suit agreements. In the reply notice, no doubt, there is a demand to comply with the terms of the registered lease deed. But, no further action is taken by the defendant for enforcing clause V of the registered lease deed. But, no suit is filed on behalf of the defendant even after filing of OS No.6281/1994.

¶568

107

¶569

It is pertinent to note that since the suit agreements itself are denied, the contentions urged on behalf of the defendant that suit properties are undervalued in suit agreements cannot be countenanced in law. Further, as per Exs.P45, 46 and 51, the plaintiffs have placed probable evidence as to the value of the suit property between the period 1987 to 1999 that were situated in the vicinity of the suit property and sold to different persons. In other words, Exs.P45, 46 and 51 being the transactions entered into by third party in respect of properties situated in and around the suit property, the value mentioned in those sale deeds compared to the value mentioned in the suit agreements could be reasonable value. No contra evidence is placed by defendant in this regard. Moreover, even as per the suggestions made to PW-1 under clause V of registered sale deed, portion of the suit property is tenanted and despite best efforts, the tenants could not be evicted. The construction found on the suit properties is also very old even according to defendant.

¶570

108

¶571

Section 20 of Specific Relief Act confers discretionary power on the Court either to grant or to reject specific performance. However, it is settled principles of law and requires no emphasis that such discretionary power must be exercised judiciously based on sound principles of law. In other words, the discretion that is to be exercised in a given case must be sound and reasonable.

¶572

While granting Specific performance or rejection thereof, court is bound to take into consideration the circumstances of each case, the conduct of parties and the respective interest in the contract between the parties, peculiar to the case on hand. Likewise, grant of specific performance being an equitable relief, balance of equities have also to be struck taking into account all relevant aspects of the matter. Courts are not expected to keep shut their eyes to the burning harsh realities of escalation in the price of the property and such other parameters. While rejecting the prayer for specific performance of

¶573

109

¶574

contract of agreement to sell, the court also required to find out that whether the compensation of money would be adequate relief. As a corollary, the courts are also empowered to order for enhanced sale consideration. The court is of the opinion that the specific performance being granted.

¶575

In Nirmala Anand supra, having noted that appellant was always ready and willing to perform her part of the contract, ordered that enhanced sale consideration can be directed by court while granting specific performance of the contract.

¶576

Having said thus, whether an agreement stands proved and the court is interested in ordering for the specific enforcement of the contract and finds that the value mentioned in the suit agreements, does not match with the market value or if the court is of the opinion that value of the suit property has increased over a period of time, court can always pass a decree directing the

¶577

110

¶578

agreement holder to pay the enhanced value for the suit property in a given case.

¶579

In this regard, gainfully, this court places reliance on the legal principles enunciated in the case of Nirmala anand vs. Advent Corporation reported in (2002) 8 SCC 146.

¶580

No doubt, in a given case, the enhancement in quantum of sale consideration to be ordered is not automatic. But, taking note of the fact that the prevailing market value of the suit property, while exercising the discretionary power vested in this court while confirming the decree of the suit of the plaintiffs, this court being an appellate court, can always order for enhanced quantum of sale consideration to meet the ends of justice.

¶581

In fact, at the time of hearing of the appeals, respondents (plaintiffs) offered enhanced sale consideration in a sum of Rs.50,00,000/- in respect of the suit agreements as against Rs.16,00,000/- put together in

¶582

111

¶583

respect of both the agreements. However, the said offer was made for amicable settlement and learned Senior counsel Sri S.K.V. Chalapathy contended that he is withdrawing the offer in view of the amicable settlement having failed.

¶584

Taking note of the relevant material on record as discussed supra, plaintiffs having established the suit agreements by placing necessary proof, defendant having failed to establish his contentions that suit agreements are sham agreements, plaintiffs having capacity to pay the balance sale consideration and was always ready and willing to perform their portion of the contract, this court is of the considered opinion that enhancing the quantum of sale consideration in a sum of Rs.25,00,000/- each from Rs.8,00,000/- each in respect of each of the suit agreement and ordering enforcement thereof by confirming the decree of the Trial Court, in the considered opinion of this court would meet the ends of justice.

¶585

112

¶586

The last ground left behind to be considered for non enforcement of the suit agreements is the hardship that would be caused to the defendant.

¶587

Material on record discloses that defendant is owning good number of properties and having flourishing business. What made the defendant to enter into suit agreements is known to defendant. In every agreement, it cannot be presumed that only to meet the financial necessity a owner would intend to sell the property.

¶588

In the case on hand, even according to the defendant himself, he was frustrated having regard to the fact that the plaintiffs failed to adhere to clause V of the registered lease deed. Instead of terminating the registered lease deed, defendant entered into an agreement to sell the suit properties to the plaintiffs. PW2 being the elder and respected member of the Vyshya community and related to the parties, unequivocally deposed before the Court that he negotiated in respect of the suit agreements in fixing the terms of the suit

¶589

113

¶590

agreements. In the absence of any previous enmity or animosity towards the defendant, or extra affinity towards the plaintiffs, why would PW-2 depose in favour of the suit agreements is a question that remains un-answered. Therefore, the feeble attempt made by the appellants, that the suit agreements are not to be enforced on account of the hardship that would be caused to the appellant cannot also be countenanced in law.

¶591

Accordingly, from the above discussion, the Point Nos.1 & 2 are answered in the Affirmative and Point Nos.3 & 4 are answered in the Negative.

¶592

REGARDING POINT NO.5: In view of my findings on Point Nos.1 to 4 above, following order is passed:

¶593

ORDER

¶594

(i) Appeals are partly allowed, while confirming the judgment and decree passed in OS No.6281/1994 and granting specific enforcement of agreement to sell, in OS

¶595

114

¶596

No.4361/1997 vide Exs.P1 and P6, the sale consideration is enhanced from Rs.8,00,000/- to Rs.25,00,000/- each in respect of Exs.P1 and *P66 .

¶597

(ii) Plaintiffs in each of the suits are granted three

¶598

months time to pay/deposit the enhanced balance sale consideration.

¶599

(iii) No order as to costs.

¶600

Sd/JUDGE