Partly allowed

Bhavarlal v. M/S F B Geddikeri Industries

Karnataka HC28 Nov 2024RFA/1339/2007

Case brief

AI extract

What is this about?

The High Court allowed the appeal in part. Setting aside the trial court's dismissal of the suit, the court held the property description was unidentifiable and the plaintiffs unprepared to perform the contract. However, acknowledging the plaintiffs' right to be reimbursed, it decreed their claim for refund of advanced sale consideration.

What did the court decide?

Set-aside of original decree and decreeing recovery of Rs.2,75,250/- with interest at 18% per annum.

Bhavarlal Vs M/S F B Geddikeri Industries — Specific Performance | Karnataka HC (2024)

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1 - NC: 2024:KHC-D:17504 RFA No. 1339 of 2007

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IN THE HIGH COURT OF KARNATAKA,

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DHARWAD BENCH

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DATED THIS THE 28^TH DAY OF NOVEMBER, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE

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REGULAR FIRST APPEAL NO. 1339 OF 2007 (SP)

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BETWEEN:

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BHAVARLAL S/O. BABULAL JAIN, AGED ABOUT 46 YEARS, OCC: BUSINESS.

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LALIT KUMAR S/O. CHAGANLAL JAIN, AGED ABOUT 41 YEARS, OCC: BUSINESS.

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BOTH ARE R/AT STATION ROAD, GADAG – 582101.

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…APPELLANTS

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(BY SRI. M. F DYANGOUDA AND SRI. G.V. TURMARI, ADVOCATES)

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AND:

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ASHPAK KASHIMSA MALAGALADINNI

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Location: HIGH COURT OF KARNATAKA

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M/S F. B. GEDDIKERI INDUSTRIES A PARTNERSHIP FIRM, MUNDARGI ROAD, NEAR COTTON SALE SOCIETY, GADAG-582101.

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FAKIRADDI S/O. BHEEMARADDI GADDIKERI, AGED ABOUT 74 YEARS, OCC: BUSINESS, PARTNER OF M/S F B. GEDDIKERI INDUSTRIES, MUNDARGI ROAD, NEAR COTTON SALE SOCIETY, GADAG-582101.

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MALLIKARJUN S/O. FAKIRADDI GADDIKERI, AGED ABOUT 46 YEARS OCC: BUSINESS, PARTNER OF M/S F B. GEDDIKERI INDUSTRIES,

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MUNDARGI ROAD, NEAR COTTON SALE SOCIETY, GADAG – 582101.

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SEKHARAPPA, S/O. FAKIRADDI GADDIKERI, AGED ABOUT 44 YEARS, OCC: BUSINESS, PARTNER OF M/S F. B GEDDIKERI INDUSTRIES, MUDARGI ROAD, NEAR COTTON SALE SOCIETY, GADAG-582101.

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SMT. AKKAMMA, W/O. KASHAPPA GADDIKERI, AGED ABOUT 49 YEARS, OCC: HOUSEHOLD WORK R/O: ALWANDI, TQ: RON, DIST: GADAG-582101.

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ANAND S/O. KASHAPPA GADDIKERI, AGE: MAJOR, OCC: AGRICULTURE, R/O: ALWANDI, TQ: RON, DIST: GADAG – 582101.

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MISS. IRAMMA, D/O. KASHAPPA GADDIKERI, AGE: MAJOR, OCC: AGRICULTURE, R/O: ALWANDI, TQ: RON, DIST: GADAG -582101.

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MISS. ANITA D/O. KASHAPPA GADDIKERI, AGE: MAJOR, OCC: HOUSEHOLD WORK, R/O: ALWANDI, TQ: RON DIST: GADAG – 582101.

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…RESPONDENTS

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(BY SRI. J. S. SHETTY, ADVOCATE FOR R2 & R4; SRI. CHANDRASHEKHAR C., ADVOCATE FOR R3; R1, R5, R6, R7 ARE SERVED; VIDE ORDER DATED 07.01.2011 APPEAL AGAINST R8 DISMISSED)

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THIS RFA FILED U/S.96 OF CPC., PRAYING TO ALLOW THE TOP NOTED APPEAL BY SETTING ASIDE THE JUDGMENT AND DECREE DATED 28.02.2007 IN O.S.NO.191/2001 PASSED BY THE LEARNED CIVIL JUDGE (SR.DN), & CJM., GADAG, AND CONSEQUENTLY ALLOW SUIT O.S.NO.191/2001, IN THE INTEREST OF JUSTICE AND EQUITY.

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

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3 - NC: 2024:KHC-D:17504 RFA No. 1339 of 2007

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CORAM: THE HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE

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ORAL JUDGMENT

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This appeal is filed against the decree dismissing the suit for specific performance of the contract. The agreement for sale is dated 18.05.1988. The suit is filed in respect of a property measuring 260 feet East-West and 85 feet North-South in Revenue Sy.No.41/3A+3B/1 in Gadag.

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The plaintiffs claim that they agreed to purchase the suit property from defendants for a total consideration amount of Rs.2,75,250/-. No time is stipulated for performance of the contract and they had paid Rs.2,65,250/- as advance consideration amount and only Rs.1,000/- was the balance consideration amount which was to be paid at the time of the registration of the sale deed.

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The plaintiffs aver that they repeatedly requested the defendants to demarcate the property and to execute the sale deed as per the terms in the agreement for sale.

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Thus, the plaintiffs issued notice on 20.09.2001, demanding specific performance of the contract. Defendants did not comply with the demand made in the notice. Hence, the suit is filed seeking specific performance.

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The defendants contested the suit. Defendant No.1 is the partnership Firm. Rest of the defendants are arrayed as partners of defendant No.1-partnership Firm.

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Description of the property shown in the plaint is also disputed by the defendants. The defendants took a stand that the property does not belong to the partnership Firm, but it belongs to defendant No.3. In addition, defendants also took a stand that they never agreed to sell the suit property and they only borrowed the loan from the

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plaintiffs and the said loan amount is repaid. The blank stamp paper signed as a security for the loan is misused as agreement for sale is the defence.

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Issues are framed relating to the description of the property, existence of the partnership Firm, readiness and willingness of the plaintiffs to perform the part of the contract and the ownership of the property of defendant No.3 and the defence of loan raised by the defendants and the plea for refund of the amount.

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Issue is also framed on the prayer of recovery

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of advance consideration amount claimed in the

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alternative.

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The Trial Court has held that the agreement for sale is not established. The Trial Court has also held that the description of the property is not proved. The Trial Court also concluded that the plaintiffs have not established readiness and willingness to perform the part of the contract.

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The Trial Court has concluded that the

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execution of agreement for sale is not proved. The Trial Court also held that the description of the property in the plaint and description of the property in the agreement do not tally.

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The suit is dismissed on the ground that there

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is no prayer to refund the sale consideration amount.

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Aggrieved by the decree dismissing the suit, the plaintiffs are before this Court.

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Sri. Gurunath Turmari the learned counsel for the appellants/plaintiffs would urge that the original agreement is produced and the plaintiffs have examined PW-1 the party to the agreement. The Trial Court disbelieved the agreement on the premise that the attesting witness to the agreement is not examined. He would contend that the signature on the agreement is not disputed by the defendants. Thus, the onus is on the defendants to establish as to how and under what circumstances, they signed the stamp paper.

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It is also his contention that the Trial Court

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having given a finding that the defendants have failed to establish that the transaction is a loan transaction could not have dismissed the suit for specific performance.

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He would also contend that the property is duly identified by the parties to the proceedings and the Trial Court was in error in giving a finding on issue No.1 that the suit property is not the properly described. He would contend that the recital in agreement for sale of 1988, marked at Ex.P2, would clearly disclose the description of the property where the starting point of the property is the road on the northern side. From the said starting point, 120 feet away from the road, towards south, the property measuring 85 feet North-South and 260 feet East-West is the suit property and this being the clear description shown in the agreement for sale, the Trial Court committed a grave error in dismissing the suit on the premise that the description of the property is not established.

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He would contend that out of Rs.2,76,250/-

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agreed to be paid Rs.2,75,250/- is paid on the date of the agreement itself. Trial Court ought to have noted that the plaintiffs have virtually paid the entire consideration amount, except the balance consideration amount of Rs.1,000/- This being the position, the Trial Court committed and error in holding that the plaintiffs have not proved his readiness and willingness to perform the part of contract.

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In the alternative, he would also submit that

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the prayer for refund of the balance consideration amount, could not have been rejected, more so, in a situation where the defence of repayment of loan is not established. Hence, he would contend that the decree for specific performance is to be granted, or for any valid reason the Court comes to a conclusion that the decree for specific performance cannot be granted, decree for refund of the advance consideration amount along with appropriate rate of interest be granted in favour of the plaintiffs.

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Sri. J.S. Shetty, learned counsel appearing for

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the respondents would contend that the alleged agreement for sale was in respect of property bearing Sy.No.41/3A+ 3B/2. The total extent of the land as mentioned in the agreement is 5 acres one gunta and 11¼. However the suit is filed in respect of property bearing No.41/3A+3B/1. Though the plaintiffs contend that the property number is changed, in the revenue records, post the agreement for sale, no documents are produced in support of the contention.

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It is also his contention that if at all it was an agreement for sale and consideration amount of Rs.2,75,000/- was paid and only Rs.1000/- was the balance consideration amount remaining to be paid, the plaintiffs would not have waited 13 years before filing this suit. The plaintiffs would have insisted for the sale deed and would have filed a suit in case the defendants refused or postponed to execute a sale deed.

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It is also urged that in the past, the defendants have borrowed money from the plaintiffs and the plaintiffs used to get the signature on the blank papers a security for the loan. The defendants had borrowed loan from the plaintiffs and defendants and repaid the loan amount. However, the defendants because of the past transactions reposed faith in the plaintiffs and did not insist for return of the stamp paper and same has been misused by the plaintiffs.

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He would further contend that the defendants are unable to produce the documents relating to the previous loan transactions, because of 13 years after the alleged agreement for sale the suit is filed and defendants did not keep records of the previous transactions. Thus, the defendants could not produce the documents in support of the previous loan transaction.

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He would urge that even if the agreement for sale is proved, then also because of the conduct of the

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plaintiffs, they are not entitled to the relief of specific performance of the contract.

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Learned counsel appearing for the plaintiffs responding to the submissions of defendants, would contend that the plaintiffs had trust in the defendants and since the plaintiffs had come in possession of the property under the agreement for sale, the plaintiffs did not file a suit for specific performance and waited for defendants to measure the property and execute the sale deed and only when they failed to respond to the notice in the year 2001, the plaintiffs realized that the defendants are not willing to execute this sale deed. He would also contend that the defendants did not reply to the notice issued by the plaintiffs in the year 2001 before filing the suit and this would indicate that the agreement for sale was duly executed by the defendants.

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This Court has considered the contentions raised at the bar and perused the records.

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Following points arise for consideration:

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(a) Whether the plaintiffs prove the agreement for sale dated 18.05.1988?

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(b) Whether the agreement for sale is in respect of the suit property or whether the property mentioned in the agreement which measures around 22 guntas of land can be identified in 5 acres 11 guntas in survey No.41/3A+3B/1?

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(d) Whether the defendants prove that the stamp paper was signed as a security for the loan?

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(e) Whether the defendants have repaid the loan?

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(f) Whether the plaintiffs ars entitled to the relief of specific performance of contract? If not any other relief?

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The original agreement for sale is produced.

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The signature on the agreement is admitted. The

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13 - NC: 2024:KHC-D:17504 RFA No. 1339 of 2007

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defendants raise a contention that it was signed blank and offered as a security for the loan borrowed. Defendant No.

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1 is a partnership firm. Rest of the defendants are the partners. Defendant No.3 is the owner of the property. The defendants being businessmen why all the defendants would sign a blank stamp paper is difficult to believe. On re-appreciation of the evidence this Court is of the view that the execution of the agreement is established.

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The next question is whether the agreement for

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sale in respect of the ‘suit property’ or whether the property mentioned in the agreement which is around 22 guntas of land can be identified in 5 acres 11 gunats of land.

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The plaint averment would indicate that the

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agreement for sale was executed in respect of property bearing Sy.No.41/3A+3B/2. The extent of the property mentioned in the agreement for sale is 260 feet x 85 after

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traversing 120 feet towards south from the edge of the road on the northern side. However in the plaint it is

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stated that the property is renumbered as Sy.No.41/3A+3B/1. In the agreement for sale, the property is numbered Sy.No.41/3A+3B/2. This is the number that is provided in the sketch produced along with the plaint. However, the suit is filed in respect of Sy.No.41/3A+3B/1.

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The plaintiffs contend that the property is renumbered subsequent to the agreement. No document is produced to show that the property was bearing No.41/3A+3B/2 at the time of agreement for sale. No revenue record is produced to show that the property shown as ‘ABCD’ in the sketch appended to the plaint is Sy.No.41/3A+3B/2.

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In the plaint sketch plaintiffs have demarcated

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the property covered by the agreement as ‘ABCD’. As can be seen from the sketch ‘ABCD’ portion is marked in the property bearing Sy.No.41. The particulars provided in the legend at the bottom of the sketch indicate that ‘ABCD’

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portion is numbered as Sy.No.41/3A+3B/2. This according to the plaintiffs, is the suit property agreed to be sold.

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On perusal of the said sketch, it indicates that

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plaintiffs have chosen to demarcate ‘ABCD’ portion commencing from the eastern boundary of Sy.No.41 and 'AD' space according to the plaintiffs measures 260 feet east-west and 'AB' space measures 85 feet north-south. On what basis the plaintiffs have chosen to demarcate ‘ABCD’ portion commencing from eastern boundary, is not forthcoming from the plaint or the evidence. The sketch, which is produced along with the plaint, is not signed by the defendants when they entered into an agreement for sale. Sketch is not part of the agreement for sale. When this sketch is prepared, at whose instance it is prepared, is not forthcoming. The agreement for sale does not indicate that this is the exact portion which is sought to be sold by the defendants. It only says that the portion that is agreed

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to be sold is 260 feet towards east-west and 85 feet towards north-south, after leaving 120 feet space towards

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south from the road on the north. How the plaintiffs can choose to demarcate the ‘ABCD’ portion commencing from the eastern boundary and why not western boundary, is not forthcoming.

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This being the position, this Court is the view that the exact location of the property agreed to be sold is not properly identified in the agreement.

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It is further relevant to note that though the

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plaintiffs claim to have entered into an agreement to purchase the property from the defendants in the year 1988, till 2001, the plaintiffs have not chosen to file a suit. It is true that agreement for sale does not provide for a specific time frame to complete the sale transaction. It is also true that the plaintiffs claim to have paid Rs.2,75,250/- towards sale consideration amount out of Rs.2,76,250/-, agreed to be paid. Nevertheless there is a clause in the agreement for sale which provides that the defendants have to demarcate the portion of the property to be sold and thereafter, the sale deed is to be executed.

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In case the plaintiffs really intended to purchase the property and if there is refusal or in action on the part of the defendants to demarcate the property despite the plaintiffs making substantial payment of Rs.2,75,250/- out of Rs.2,76,250/- agreed, the plaintiffs in the normal course of things would have insisted for demarcation of the property and execution of sale deed by the defendants. The plaint is silent as to why the plaintiffs waited till 2001. The notice is issued to the defendants for the first time in 2001. Though the defendants have not responded to the said notice, what is required to be seen is whether the plaintiffs really intended to purchase the property from the defendants.

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This being the position, this Court is of the view that the plaintiffs are not entitled to the relief of specific performance of contract.

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However, on appreciation of the evidence

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before the Court, it appears that there was an agreement between the plaintiffs and the defendants for sale of a

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NC: 2024:KHC-D:17504 RFA No. 1339 of 2007

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property, but it is not possible to hold that the agreement was in respect of the property mentioned in the plaint and sketch. Since the Court is of the view that the property described in the agreement is not identifiable, the plaintiffs are not in possession of the property.

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Though the defendants contend that the transaction is a loan transaction similar to previous loan transactions with the plaintiffs, defendants have not produced any records to show that previous loan transactions with the plaintiffs as urged. It is urged that the suit is filed 13 years after the agreement, and in such scenario it is quite possible that the defendants may not have kept the records pertaining to the previous transactions. Though the contention sounds quite attractive, and creates a doubt about the authenticity of the transaction claimed by the plaintiffs, evidence is not enough to accept the plea of loan transaction.

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For the reasons already discussed above, though the agreement is proved, for want of proper

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NC: 2024:KHC-D:17504 RFA No. 1339 of 2007

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identification of the property, unexplained delay of 13 years in filing the suit, the plaintiffs are not entitled to specific performance of the contract.

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It is noticed that the plaintiffs have also pleaded in the body of the plaint that in the alternative they are entitled for refund of advance sale consideration. However, there is no specific prayer in the prayer column. The Trial Court has dismissed the suit on the ground that the prayer is not made for refund of advance sale consideration amount.

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This Court is of the view that omission on the

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part of the plaintiffs to seek a formal prayer of refund of advance sale consideration amount, should not come in the way of the Court taking note of the pleading relating to the refund of advance sale consideration amount. It is also noticed that though the defendants have raised a contention that they have repaid the loan amount, nothing is placed on record to show the repayment.

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NC: 2024:KHC-D:17504 RFA No. 1339 of 2007

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40. For the aforementioned reasons, the plaintiffs

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are entitled to the relief of refund of advance sale consideration amount along with interest.

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Hence, the following:

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ORDER

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i. Appeal is allowed-in-part.

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ii. Impugned judgment and decree dated 28.02.2007 in O.S.No.191/2001 on the file of learned Civil Judge (Sr.Dn), Gadag, are set-aside.

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iii. The suit of the plaintiffs is decreed against the defendants for recovery of Rs.2,75,250/- along with interest at the rate of 18% per annum. The defendants are jointly and severally liable to pay the decreetal amount.

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iv. The plaintiffs are also entitled to the cost

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of the suit as well as cost of the appeal.

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Sd/(ANANT RAMANATH HEGDE)

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JUDGE

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GVP: Para 1 to 11 RKM: Para 12 to 17 AM: Para 18 to end List No.: 1 Sl No.: 34

Bhavarlal v. M/S F B Geddikeri Industries

Case brief

What is this about?

What did the court decide?

Bhavarlal v. M/S F B Geddikeri Industries

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

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