Partly allowed

Smt. Gangamma v. Smt. Sharadamma

Karnataka HC12 Oct 2023RFA/986/2017

Case brief

AI extract

What is this about?

In a specific performance suit, the apex court held that the appellant failed to prove readiness and willingness due to lack of documentary evidence for the balance amount. However, acknowledging the proven agreement, the court directed the refund of Rs.2,50,000 earnest money with interest.

What did the court decide?

Refund of Rs.2,50,000 earnest money with 6% per annum interest from September 1992 till realization; dismissal of prayer for specific performance confirmed.

Smt. Gangamma Vs Smt. Sharadamma — Contract and Commercial Disputes | Karnataka HC (2023)

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NC: 2023:KHC:37288 RFA No. 986 of 2017

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 12^TH DAY OF OCTOBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE K.NATARAJAN REGULAR FIRST APPEAL NO. 986 OF 2017 (SP)

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BETWEEN:

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SMT. GANGAMMA W/O. SRI. RAJANNA, MAJOR, NO.20, 20TH CROSS, BHUVANESHWARINAGAR, KEMPANNA AGRAHARA, MARIYAPPA PALYA, BANGALORE -560 023.

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…APPELLANT

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(BY SRI. B S KRISHNA, ADVOCATE) AND:

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SMT. SHARADAMMA SINCE DECEASED BY LRS.,

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Digitally signed by BHAVANI BAI G Location: High Court of Karnataka

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SRI. NEELAKANTA, 1. S/O. LATE SHARDAMMA, MAJOR,

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MANJULA D/O. LATE SHARADAMMA, MAJOR,

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KRISHNAVENI D/O. LATE SHARADAMMA, MAJOR, RESPONDENT NO.1 TO 3 ARE RESIDING AT NO.7, 13TH CROSS, 6TH BLOCK, RAJAJINAGAR, BANGALORE.

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…RESPONDENTS

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(RESPONDENTS SERVED AND UNREPRESENTED)

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THIS RFA IS FILED UNDER SECTION 96 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 16.02.2017 PASSED IN

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NC: 2023:KHC:37288 RFA No. 986 of 2017

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OS.NO.7149/1993 ON THE FILE OF THE XI ADDL.CITY CIVIL JUDGE, BENGALURU CITY, DISMISSING THE SUIT FOR SPECIFIC PERFORMANCE.

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

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JUDGMENT

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This appeal is filed by the appellant-plaintiff under Section 96 of CPC for setting aside the judgment passed by the XI Additional City Civil Judge, Bangalore in O.S.No.7149/1993 dated 16.02.2017 for having dismissed the suit of plaintiff for specific performance of contract.

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Heard the arguments of learned counsel for the

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appellant.

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Respondent Nos.1 to 3 though served, but

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remained unrepresented.

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The appellant was plaintiff and respondents were the defendants before the Trial Court.

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The rank of the parties before the trial Court is retained for the sake of convenience.

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The case of the plaintiff is that the plaintiff filed the suit for specific performance of contract directed the defendants

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to execute the sale deed in favour of plaintiff in respect of agreement of sale dated 21.02.1992. It is alleged that the deceased-defendant was the owner of the property bearing Municipal No.7 (Site Nos.8 and 9), 13the Cross, 6th Block, Rajajinagar, Bengaluru-10) consisting of RCC roofing house with 8 dwelling units measuring east-west 40 feet and northsouth 30 feet (hereinafter referred to as 'suit schedule property'). It is further contended that the plaintiff entered into an agreement with the defendant on 21.02.1992 for purchasing the suit schedule property for a total sale consideration of Rs.8,00,000/- and paid an advance amount of Rs.25,000/- on the date of agreement. As per the terms of agreement, Rs.2,41,000/- payable by the plaintiff to the lessees or mortgagees who are in occupation of the premises after the sale deed and the sale deed should be concluded within six months. It is further contended that subsequently the plaintiff paid Rs.25,000/- to the defendant on 05.03.1992, again Rs.50,000/on 01.08.1992 and 1,50,000/on 16.08.1992 total Rs.2,50,000/-. Out of Rs.8,00,000/-, the remaining amount payable by the plaintiff is Rs.3,09,000/- at the time of execution of sale deed, But the defendant not

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NC: 2023:KHC:37288 RFA No. 986 of 2017

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executed the same sale deed, hence, notice was issued on 18.02.1993 calling upon the defendant to execute the sale deed or to perform her part of contract, but failed to reply and not executed the sale deed, hence, the plaintiff filed the suit for specific performance.

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After issuing the summons, the defendant appeared through the counsel and filed written statement by denying the agreement of sale entered into between the plaintiff and herself and taken the contention that the defendant borrowed loan from the plaintiff for Rs.25,000/- and the plaintiff obtained signature on the blank papers and Rs.25,000/- also repaid by the defendant. But the original documents not returned by the plaintiff as it got created as agreement of sale. Even prior to the alleged agreement of sale, the defendant already relinquished the right in favour of her daughter Smt.Krishna Kumari in the year 1992 itself, therefore the suit schedule property is not available for execution of sale deed in favour of the plaintiff and hence, prayed for dismissing the appeal.

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Upon considering the pleadings, the trial Court

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framed the following issues :

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"1. Whether the plaintiff proves that the defendant executed an agreement of sale dated 21.02.1992 agreeing to sell the suit schedule property and the defendant received an amount of Rs.25,000/- as advance on that day?

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2. Whether the plaintiff proves that the defendant received an amount of Rs.2,50,000/from him towards the consideration amount from time to time?

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3. Whether the plaintiff proves that she was ever ready and willing to perform her part of contract?

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4. Whether the defendant proves that she had no transferable fight in the suit schedule property as on the date of the said agreement?

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5. Whether the defendant proves that the plaintiff has fabricated the suit agreement as alleged by her in the written statement?

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6. What decree or order?"

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Subsequent to the written statement, the plaintiff

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got amended the plaint and prayer for execution of the sale

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deed in respect of the 'B' schedule property by excluding the half portion which was relinquished by the defendant in favour of her daughter-Krishna Kumari. Hence, the additional issues have been framed by the trial Court which are as under:

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" Alternatively whether the plaintiff proves that she is entitled for specific performance in respect of half of the suit property?"

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Recast additional issue No.1 on 7.1.2010

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"Whether alternatively the plaintiff is entitled for specific performance in respect of plaint "B" schedule property?"

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On behalf of the plaintiff, the power of attorney of plaintiff examined as PW.1 and got marked 15 documents at the first instance. Later by recalling himself, got marked another 4 documents as per Ex.P.16 to P.19 and also examined one more witness as PW.2, who is the scribe of the agreement and on behalf of the deceased-defendant, the daughter of defendant one Krishna Kumari was examined as D.W.1 and got marked 6 documents and also examined A. Neelakanta as D.W.2. After leading the evidence, the trial Court given findings, answered Issue Nos.1 and 2 in favour of the plaintiff

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holding that the plaintiff proved the agreement of sale and paid Rs.2,50,000/- as advance sale consideration. However, issue No.3 is answered in the 'Negative' regarding readiness and willingness on the part of the plaintiff and Issue No.4 in the favour of the defendant and Issue No.5 and the additional issue are in the 'Negative' against the plaintiff and finally dismissed the suit vide impugned judgment. The same is under challenge by the plaintiff-appellant.

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Learned counsel for the appellant has contended that though the trial Court rightly held the plaintiff proved the agreement of sale and payment of Rs.2,50,000/-, but committed error in disbelieving the suit by holding the plaintiff before the readiness and willingness. When the defendant not accepted the agreement of sale, there was total denial as it was only a loan agreement, such being the case, the question of holding the agreement of sale does not arise. However, the plaintiff has averred in the plaint that she is always ready and willing to perform his part of contract. She has already paid maximum amount of Rs.2,50,000/- and Rs.2,40,000/- payable to the lessees after the sale deed. Only balance amount of sale considered is required to be paid is Rs.3,09,000/-. The plaintiff

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produced the bank passbook and also the loan sanctioned order obtained from the bank where the bank has sanctioned the loan of Rs.4,00,000/-. These documents reveals the plaintiff is always ready and willing to perform his part of contract. But the Trial Court without appreciating the evidence had dismissed the suit. Learned counsel further contended that when the notice has been issued to the defendants, they have not replied for the said notice. The conduct of the defendants clearly reveals that they resiled from the execution of sale deed and further contended that the defendants given reply regarding part of the contract that the plaintiff could have deposited the amount in the Court. Even otherwise, the learned counsel for the defendants not taken any plea in the written statement regarding readiness and willingness on the part of the plaintiff, but it is taken in the cross examination which reveals the defendant admits the agreement of sale, therefore, the Trial Court committed error in dismissing the suit.

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Learned counsel further contended that even if the part of the property has been relinquished by the defendant in favour of her daughter-Krishna Kumari, the remaining part of the property can be executed as per Section 12 of the Specific

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Performance Contract. In this regard, the Hon'ble Supreme Court also held the part of the property can be executed in favour of the plaintiff. Such being the case, dismissing the suit in toto is not correct and alternatively, the learned counsel also submits the Trial Court committed error in dismissing the suit entirety even without order of refund of earnest money of Rs.2,50,000/- paid by the plaintiff and hence, prayed for allowing the appeal.

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Having heard the arguments and perused the

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records, the point that arises for my consideration are:

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"Whether the Trial Court after answered issue Nos.1 and 2 regarding agreement of sale dated 21.02.1992 and payment of Rs.2,50,000/- by the defendant on various dates in favour of the plaintiff and dismissing the suit is called for interference.

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The defendant though denied in the written statement that there is no agreement of sale, it is only loan agreement and repaid the entire amount of Rs.25,000/- etc., but they have failed to prove the same and failed to produce any document for repayment of Rs.25,000/-. On the other

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hand, the plaintiff is successful in proving issue Nos.1 and 2, the same was found in the judgment of the Trial Court. Therefore, the only point arises for the consideration is that whether the appellant-plaintiff is always ready and willing to perform his part of contract for getting the sale deed within the prescribed time.

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On hearing the arguments as well as documents, admittedly a plaintiff has stated in the plaint that he is always ready and willing to perform his part of contract and he has issued legal notice to the defendant as per Ex.P.12. The defendant not replied to the legal notice. Hence, the plaintiff filed the suit against the defendant in the year 1993. In order to prove the readiness and willingness, the plaintiff relied upon the document Ex.P.10-Credit review cum recommendation letter issued by Syndicate Bank where the plaintiff applied loan for Rs.4,00,000/- and as per Ex.P.11- loan sanction order issued by the Syndicate Bank for housing loan on 4.1.996. The application for seeking loan was filed by the plaintiff only on 10.11.1995 and loan was sanctioned on 4.1.1996. It is pertinent to note that the agreement of sale was in the month of February, 1992 and time limit for performing the contract

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was six months and the legal notice was issued by the plaintiff as per Ex.P.12 dated 18.02.1993 almost after one year and Ex.P.17-Statement of accounts in respect of plaintiff also produced to show that he is having bank balance of more than Rs.5,00,000/-. Ex.P.17 reveals the Bank balance was shown more than Rs.5,00,000/- as on 24.09.2010 and earlier to that, in the month of January 2010, he was having only Rs.7,500/and last balance was Rs.730.78/- which is a meagre amount. The documents regarding financial capacity has been produced by the plaintiff only pertaining to the year 2010 and after 1995, which reveals as on the date of filing the suit, the capacity of the plaintiff was not shown and no documents were produced to show that he is having balance of Rs.3,09,000/- in his hand or in his account payable to the defendant. Even the plaintiff not chosen to deposit the said amount in the Court while filing the suit.

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In this regard, the Division Bench of this Court in the case of Punny Akat Philip Raju vs. Dinesh Reddy reported in ILR 2016 KAR 2252 has held at paragraph No.34 as under:

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NC: 2023:KHC:37288 RFA No. 986 of 2017

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"34 . Therefore, mere stepping into the witness box and saying on oath that he is ready with the balance sale consideration or that he is going to borrow money from any financial institution or that he has got sufficient funds in his Bank accounts or that he has kept money in Fixed Deposit, without that oral evidence being supported by documentary evidence will not prove the plaintiff's readiness to pay the balance sale consideration. It is immaterial whether such oral evidence is challenged in cross-examination or not. The plaintiff has to prove to the satisfaction of the Court that he possessed the requisite funds. He has to produce such documentary evidence, which would enable the Court to come to the conclusion that plaintiff is ready with the requisite balance sale consideration to complete the sale transaction. If no evidence is adduced in this regard by way of documentary evidence, no prudent man would come to the conclusion that the person has proved the possession of funds. In the absence of any such documentary evidence being produced, it is a case of plaintiff's case being not proved. Plaintiff cannot expect the Court to pass a decree for specific performance of a contract of sale when the

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plaintiff has not proved his readiness to perform his part of the contract. Therefore, mere stepping into the witness box and saying on oath that he is ready with the balance sale consideration or that he is going to borrow money from any financial institution or that he has got sufficient funds in his Bank accounts or that he has kept money in Fixed Deposit, without that oral evidence being supported by documentary evidence will not prove the plaintiff's readiness to pay the balance sale consideration. It is immaterial whether such oral evidence is challenged in crossexamination or not. The plaintiff has to prove to the satisfaction of the Court that he possessed the requisite funds. He has to produce such documentary evidence, which would enable the Court to come to the conclusion that plaintiff is ready with the requisite balance sale consideration to complete the sale transaction. If no evidence is adduced in this regard by way of documentary evidence, no prudent man would come to the conclusion that the person has proved the possession of funds. In the absence of any such documentary evidence being produced, it is a case of plaintiff's case being not proved. Plaintiff cannot expect the

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Court to pass a decree for specific performance of a contract of sale when the plaintiff has not proved his readiness to perform his part of the contract."

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At paragraph No.30 of the said judgment, the Division Bench of this Court has also considered Section 61 of the Evidence Act regarding proof of contents of document that the contents of document will be proved either by primary or secondary evidence and in detail, the Division Bench has held, mere pleading in the plaint regarding financial capacity without producing any document, the Court cannot accept the same regarding readiness and willingness on the part of the plaintiff that he was having sufficient balance in his account. Even in one stretch, this Court wants to say that the plaintiff also required to deposit an amount of Rs.2,40,000/- payable to the tenants under the agreement and it is also not shown by him. Actually, the plaintiff required to pay more than Rs.5,50,000/to the defendant under the agreement, but the same was not shown in any document before the trial Court and marked to show as on the date of filing the suit, he is having sufficient balance consideration in his account.

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NC: 2023:KHC:37288 RFA No. 986 of 2017

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Therefore, I am of the view in the crossexamination, the counsel for the defendant rightly contented that the plaintiff do not have any sufficient means or balance consideration to perform his part of contract. The trial court considering the same, rightly held the plaintiff failed to prove his part of contract by having balance consideration payable to the defendant. Therefore, issue No.3 has been rightly answered by the trial Court and need not be interfered by this Court.

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As regards to the prayer by the plaintiff for execution of sale deed in respect of part of the property where the portion of the property has already been relinquished by the respondent in favour of the daughter-Krishna Kumari, therefore the plaintiff got amended the plaint also the prayer for execution of the sale deed regarding half portion of the schedule property. In view of plaintiff himself failed to perform his part of contract, the question of granting relief for execution of the half of the property in favour of the plaintiff does not arise.

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Considering the entire evidence on record, I am of the view, the Trial Court though rightly held that the plaintiff to

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prove the agreement and payment of Rs.2,50,000/- and not granted relief for specific performance. However, the unamended Act of the Specific relief Act, a discretion to the Court, in case the plaintiff successful in proving the agreement and payment of advance money, the Court can give only relief by refunding the earnest money to the plaintiff in case no relief for executing the sale deed is not possible to execute. When the plaintiff is successful in proving the agreement of sale and payment of Rs.2,50,000/-, though he has failed to prove the readiness and willingness, however, looking to the facts and circumstances of the case, the plaintiff is entitled for the refund of the earnest money and the trial Court not given any findings on the issue and dismissed the suit which is not correct. Therefore, that part of judgment is required to be interfered by this Court and accordingly, I proceed to pass the following order:

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The appeal filed by the appellant is hereby allowed in part .

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Regarding dismissal of relief for specific performance of contract for executing the sale deed is hereby confirmed.

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However, plaintiff is entitled for the refund of Rs.2,50,000/- paid by him to the defendant as earnest money under the agreement-Ex.P.2. Hence, the defendants are directed to pay Rs.2,50,000/- with 6% interest per annum from September 1992 till realization.

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Draw decree accordingly.

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Send copy of the judgment and trial court records to concerned court forthwith.

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Sd/JUDGE

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GBB

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List No.: 1 Sl No.: 23

Smt. Gangamma v. Smt. Sharadamma

Case brief

What is this about?

What did the court decide?

Smt. Gangamma v. Smt. Sharadamma

Case brief

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What did the court decide?

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