Allowed

Mr K Made Gowda v. Smt Lakshmamma

Karnataka HC9 Jul 2024RFA/1382/2014

Case brief

AI extract

What is this about?

The High Court allowed the appeal and set aside the dismissal of a specific performance suit. The court held the trial judge erred in finding lack of readiness and willingness, noting applicants had sufficient funds. The appeal succeeds, the suit is decreed, and respondents are directed to provide title documents and facilitate sale deed execution.

What did the court decide?

The appeal is allowed; impugned judgment set aside; suit decreed for specific performance; respondents directed to produce documents and execute sale deed within timeline.

Mr K Made Gowda Vs Smt Lakshmamma — Specific Performance | Karnataka HC (2024)

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1 - NC: 2024:KHC:26052-DB RFA No. 1382 of 2014

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9^TH DAY OF JULY, 2024 PRESENT

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THE HON'BLE MR JUSTICE KRISHNA S DIXIT

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AND

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THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR REGULAR FIRST APPEAL NO. 1382 OF 2014 (SP)

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BETWEEN:

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MR. K MADE GOWDA, S/O LATE KEMPE GOWDA, AGED ABOUT 59 YEARS, R/A MADAHALLI VILLAGE, KIRIGAVALU HOBLI, MALAVALLI TALUK, MANDYA -571 430.

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MR.M.S. NAGARAJU, S/O LATE N SUBBE GOWDA, AGED ABOUT 50 YEARS, MODERN RICE MILL, KOLLEGAL ROAD, MALAVALLI TOWN, MANDYA-571 430.

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…APPELLANTS

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Digitally signed by SHARADA VANI B Location: HIGH COURT OF KARNATAKA

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(BY SRI.HARSH D JOSHI .,ADVOCATE)

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AND:

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SMT. LAKSHMAMMA, W/O LATE CHIKKA BASAVAIAH, AGED ABOUT 51 YEARS,

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SRI. SURESHA, S/O SRI CHOWDAIAH, AGED ABOUT 32 YEARS,

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SMT. BHAGYAMMA, W/O LATE CHIKKA BASAVAIAH, AGED ABOUT 46 YEARS,

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(1) TO (3) ARE RESIDING AT NO.2, 10^TH CROSS, 6^TH MAIN,

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JAYANAGAR, MYSORE-570 014.

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…RESPONDENTS

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(BY SRI.SANDEEP PATIL.,ADVOCATE FOR R1 TO R3)

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THIS RFA FILED UNDER ORDER 41 RULE 1 AND 2 R/W SEC 96 OF CPC, AGAINST THE JUDGEMENT AND DECREE DATED 4.6.2014 PASSED IN O.S.983/2008 ON THE FILE OF PRINCIPAL SENIOR CIVIL JUDGE, MYSORE, DISMISSING THE SUIT FOR SPECIFIC PERFORMANCE.

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THIS RFA COMING ON FOR ORDERS THIS DAY, KRISHNA S DIXIT.J., DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal by the plaintiffs seeks to call in question

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the judgment & order dated 4.6.2014 whereby, their Specific Performance suit in O.S.No.983/2008 has been

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dismissed mainly on the ground that they failed to establish readiness and willingness on their part.

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2. BRIEF FACTS OF THE CASE:

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(a) As mentioned above, appellants were the plaintiffs in

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the subject suit filed on 11.12.2008. It was founded on the

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Agreement to Sell dated 4.10.2007; the agreement comprised of 28 guntas of land in Sy.No.17/1 which admeasured 01A-14G; the consideration was fixed at

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Rs.37,80,000/-. The agreement stipulated certain conditions which required the vendor one Mr.Chikka Basavaiah, who was the husband of 1^st defendant and father of other defendants inter alia to furnish original title deeds as a precondition for execution of sale deed. However, he died on 13.12.2007 leaving the defendants as his L.Rs.

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(b) The L.Rs of the deceased who happened to be the defendants in the suit, had got issued two legal notices, to which that the appellants/plaintiffs had sent their reply that they were ready & willing to take part provided the defendants did theirs’ by providing the title deeds and other documents as stipulated in the agreement. The blame game as would happen in matters of the kind happened in this case too, each laying the blame at the threshold of the other.

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(c) The appellants filed the suit seeking a decree for Specific Performance of the agreement in question. The respondents filed their Written Statement resisting the suit

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mainly contending that though they were ready & willing, appellants were not coming forward to make payment to get the sale deed, although they admitted execution of the agreement and acknowledged receipt of Rs.4,00,000/- by way of advance cum earnest money.

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(d) Learned trial Judge had framed as many as seven principal issues as under:

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“1. Whether the plaintiffs prove that Sri. Chikkabasavaiah had executed an agreement of sale on 04-10-2007 in favour of the plaintiffs for valid consideration of Rs.37,80,000/- in respect of the suit schedule property?

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2. Whether the plaintiffs further prove that the said Chikkabasavaiah had received an advance amount of Rs.4,00,000/- from the Plaintiffs in pursuance to the agreement of sale dated 04-102007?

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

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4. Whether the plaintiffs are entitled for the specific performance of contract of an agreement of sale dated 04-10-2007 from the Legal representatives of Late Chikkabasavaiah as prayed?

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5. Whether the defendants prove that late Chikkabasavaiah had no exclusive independent

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right and interest to dispose of the suit schedule property under an agreement of sale in favour of Plaintiffs?

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6. Whether the Defendants prove that Late Chikkabasavaiah had no such necessity or requirement to sell the entire suit schedule property under an agreement of sale in favour of the Plaintiffs?

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7. Whether the Defendants further prove that the suit is barred by law of limitation?”

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(e) To prove their case, the 1^st plaintiff Mr.Madegowda got examined as PW.1; two independent witnesses namely Mr.Mallaiah as PW.2 and Mr.Nagaraju as PW.3 also deposed in favour of the plaintiff side. In their deposition, 31 documents came to be produced and marked as Exhibits P.1 to P.31. They all comprised of inter alia the Agreement to Sell, Tax Paid Receipts, RTC, Legal Notice and Reply Notice, ICICI bank records, Income Tax records, etc. From the side of defendants, the 1^st defendant Smt.Lakshmamma was examined as DW.1 and one Mr.A.L.Shivarudrappa had deposed as an independent witness as DW.2. In their evidence, six documents came to be marked which inter alia comprised of RTCs, Legal

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6 - NC: 2024:KHC:26052-DB RFA No. 1382 of 2014

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Notice, Death Certificate, Survival Certificate, etc. Learned

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trial Judge vide impugned judgment & order dismissed the suit. That is how the present appeal arose and the same is placed at our hands for consideration.

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Having heard the learned counsel for the parties and having perused the Appeal Papers, we are inclined to grant indulgence in the matter for the following reasons:

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(a) The Agreement to Sell dated 4.10.2007 vide Ex.P.1 is not in dispute. It mentions about the payment of Rs.4,00,000/- received by the original vendor Mr.Chikka Basavaiah who died on 13.12.2007. Condition Nos.8, 12 & 14 being relevant are reproduced below:

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“8. MAzÀ£ÉÃ ¥ÁnðAiÀÄªÀgÀÄ µÉqÀÆå¯ï ¸ÀéwÛUÉ ¸ÀA§A¢¹zÀAvÉ J¯Áè ªÀÄÆ® zÁR¯ÁwUÀ¼À£ÀÄß JgÀqÀ£ÉÃ ¥ÁnAiÀÄªÀjUÉ CªÀgÀ ¥Àj²Ã®£ÉUÁV F PÀgÁgÀÄ ¥ÀvÀæzÀ MAzÀÄ vÀAUÀ¼ÉÆ¼ÀUÁV ¤ÃqÀ®Ä M¦àgÀÄvÁÛgÉ.

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MAzÀ£ÉÃ ¥ÁnðAiÀÄªÀgÀÄ µÉqÀÆå¯ï ¸Àéw£À J¯Áè ªÀÄÆ® zÁR¯ÁwUÀ¼À£ÀÄß ºÁUÀÆ µÉqÀÆå¯ï ¸ÀéwÛ£À ¸Áé¢Ã£ÀvÉAiÀÄ£ÀÆß JgÀqÀ£ÉÃ ¥ÁnðAiÀÄªÀjUÉ PÀæAiÀÄ¥ÀvÀæªÀ£ÀÄß §gÉzÀÄPÉÆlÄÖ £ÉÆÃAzÀtÂ ªÀiÁr PÉÆqÀÄªÁUÀ ªÀ»¹PÉÆqÀ®Ä ¤ÃqÀ®Ä M¦àgÀÄvÁÛgÉ.

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MAzÀÄ ªÉÃ¼É MAzÀ£ÉÃ ¥ÁnðAiÀÄªÀgÀÄ ¤UÀ¢üvÀ CªÀ¢üAiÀÄ°è µÉqÀÆå¯ï ¸ÀéwÛ£À J¯Áè ªÀÄÆ® zÁR¯ÁwUÀ¼À£ÀÄß ¤Ãr µÉqÀÆå¯ï ¸ÀévÀÛ£ÀÄß JgÀqÀ£ÉÃ ¥ÁnðAiÀÄªÀjUÉ £ÉÆAzÀtÂ PÀæAiÀÄ ¥ÀvÀæ §gÉzÀÄPÉÆqÀ®Ä «¥sÀ®gÁzÀ°è JgÀqÀ£ÉÃ ¥ÁnðAiÀÄªÀgÀÄ PÁ£ÀÆ£ÀÄ ¥ÀæPÁgÀ0 F PÀgÁgÀÄ ¥ÀvÀæªÀ£ÀÄß ¸ÀÆPÀÛ £ÁåAiÀiÁ®AiÀÄzÀ°è eÁjUÉÆ½¸À®Ä ¸ÀÆPÀÛ PÀæªÀÄ PÉÊUÉÆ¼À®Ä ¸ÀA¥ÀÆtð ºÀPÀÄÌ¼ÀîªÀgÁVgÀÄvÁÛgÉ.”

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7 - NC: 2024:KHC:26052-DB RFA No. 1382 of 2014

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(b) Learned trial Judge after considering the evidentiary material on record, has answered issue Nos.1 & 2 about the execution of the agreement vide Ex.P.1, the consideration amount being Rs.37,80,000/- of which Rs.4,00,000/- was paid in advance in the affirmative i.e., as having been duly proved. The exchange of notices & replies between the parties also evidences the same. However, he grossly erred in answering issue Nos.3 & 4 as to plaintiffs’ readiness & willingness to perform their part of the contract and therefore, their entitlement to have the sale deed executed/registered, in the negative. Firstly, the very plaint paragraphs specifically averred about the readiness & willingness. Common sense cannot be kept in cold storage when pleadings are construed vide S.B.NORONAH vs PREM KUMARI KHANNA, (1980) 1 SCC 52. Plaintiffs are not some hawkers. They have a proprietary concern namely ‘Modern Rice Mill’ which is registered as an Assessee under the Income Tax Act, 1961; the Income Tax Returns have also been filed. The bank documents and Income Tax Records specifically show

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that the plaintiffs had huge sums of money in lakhs of

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rupees at their disposal. This apart, in terms of Income Tax Returns, more than Rs.4,00,00,000/- were due from certain persons. The remainder of the consideration was only Rs.33,80,000/-, Rs.4,00,000/- admittedly having been received by the original vendor Mr.Chikka Basavaiah. All these documents are on record produced & marked as exhibits.

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(c) The vehement submission of learned counsel appearing for the respondents/defendants that the bank records and income tax records are for the period anterior to the agreement in question and therefore, they cannot be much relied upon, does not much impress us. Such a contention we could have appreciated had the defendants or their predecessor in title namely Mr.Chikka Basavaiah in terms of conditions 8, 12 & 14 of the agreement had kept all the title deeds and property documents ready for the inspection of the plaintiffs. There is not even a whisper about this in their legal notices nor in the Written

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Statement nor in their depositions. The text & tenor of

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these conditions leave no manner of doubt as to they being the conditions precedent to the compliance of requirement of payment of the remainder of the consideration by the plaintiffs. The vendors who are grossly at fault cannot now contend against the readiness & willingness of the vendees when they have placed a wealth of material on record to vouch their stand.

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(d) Learned counsel appearing for the respondents/defendants pressed into service a decision of the Apex Court in U.N.KRISHNA MURTHY vs. A.M.KRISHNA MURTHY, 2022 Livelaw SC 588 in support of his contention as to how the readiness & willingness has to be understood as a pre-condition for granting a decree for Specific Performance. Paras 21 & 25 which he forcefully pressed into service read as under:

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“ 21. It is well settled that, in a suit for Specific Performance of an agreement, it is for the Plaintiff to prove his readiness and willingness to perform his obligations under the agreement. Where a certain amount has been paid in advance and the balance is required to

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be paid within a stipulated time, it is for the Plaintiff to show that he was in a position to pay the balance money. The Plaintiff has to prove that he has the money or has alternatively made necessary arrangements to get the money. In this case, the Original Defendant/Appellants have all along contended that the Plaintiff Respondent neither offered to pay nor was in a position to pay the balance consideration of Rs.15,00,000/-.

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25. To aver and prove readiness and willingness to perform an obligation to pay money, in terms of a contract, the plaintiff would have to make specific statements in the plaint and adduce evidence to show availability of funds to make payment in terms of the contract in time. In other words, the plaintiff would have to plead that the plaintiff had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract. If the plaintiff does not have sufficient funds with him to discharge his obligations in terms of a contract, which requires payment of money, the plaintiff would have to specifically plead how the funds would be available to him. To cite an example, the plaintiff may aver and prove, by adducing evidence, an arrangement with a financier for disbursement of adequate funds for timely compliance with the terms and conditions of a contract involving payment of money.”

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(e) We do not have much quarrel with the propositions

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emerging from the above decision. There has to be averment of readiness & willingness in the plaint, which

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the appellants have already taken up in their pleadings

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and even a blind man can see the same. Vouching of readiness & willingness is also there as we have already discussed above. Vendees are very rich people, if not well off. They own huge properties and run a rice mill. They are income tax payers; their bank balance is about double the amount payable by them to the vendors by way of remainder of consideration. Admittedly, they have already paid Rs.4,00,000/-. It is relevant to refer to what is stated in Pollock and Mulla’s treatise on Law of Contract and Specific Relief:

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“Readiness and willingness of a person seeking performance, in a case where time is provided for performance, means that the person claiming performance has kept the contract subsisting with preparedness to fulfill his obligations, and accept performance when the time for performance arrives. However, it does not mean that he had command of the necessary money throughout the existence of the contact. … A purchaser, in order to succeed in a suit for specific performance, need not show that he had the consideration money with him, nor he had arrangements for it, but that he was ready and willing to go through with the contract. The question is one of fact. It is not necessary for the plaintiff purchaser to vouch a concluded scheme for financing the transaction. A buyer is

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sufficiently ‘ready’ where he is in a position to borrow money to make payment of the price. No adverse inference can be drawn against the plaintiff about his readiness and willingness for non-production of accounts, or for not filing any pass book, when the defendant made no attempt to have them produced”.

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(f) What are the rights & duties of the vendor & vendee are broadly spoken of by Sec.55 of the Transfer of Property Act, 1882. In Mulla’s Transfer of Property Act, 11^th Edition, LexisNexis at Page 387 these are succinctly explained in a tabular form as under:

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Seller’s liabilities	Buyer’s liabilities
S 55(1)(a) To disclose material defects. s 55(5)(a)	To disclose facts materially increasing value.
S 55(1)(b) To produce title deeds.
S 55(1)(c) To answer question as to title.
S 55(1)(d) To execute conveyance. s 55(5)(b)	To pay price.
S 55(1)(e) To take care of the property.
S 55(1)(g) To pay outgoings.
Seller’s right	Buyer’s right
S 55(4)(a) To take rents and profits. s 55(6)(b)	Charge for price prepaid.”

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This apart, it is a matter of common knowledge that when a part of land comprised in a survey number is agreed to be sold, drawing of 11(E) sketch in terms of Karnataka Land Revenue Rules, 1966 is a must. This duty in view of stipulations in the agreement to sell (Ex.P-1) lies on the shoulders of the vendor himself. This is in addition to providing the title documents and other records. After obtaining the same, the vendor has to convey it to the vendee as a precondition for insisting upon the payment of remainder of the consideration. Just sending a couple of notices calling upon the vendee to make the payment and threatening him of voiding the agreement, would not yield any milk.

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Of late, courts are noticing a new but objectionable trend in vendors’ disinclination to avoid agreements to sell despite receiving a part of consideration; somehow they want to retain the property so that it can be sold to others for a higher price especially when the real estate market is booming. Many honest &

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intending buyers are not coming forward to have the agreements as a step-in-aid to sale deeds, because of the fear of vendors backing out. Judicial remedy in matters like this is uneconomic, time consuming & tortuous, to say the least. This is not a happy thing to happen in a civilized society. The edifice of Law of Contract is pacta sunt servanda i.e., one has to abide by what one has agreed to. Unscrupulous retention of property agreed to be sold, needs to be discouraged at all levels. Time has come to levy heavy costs for unscrupulous defenses being taken by those who breach the contract with an ulterior motive of unethically extracting more money from the vendees, than is due under the agreements.

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In the above circumstances, we make the following:

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ORDER

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(i) This appeal succeeds and the impugned judgment & decree made by the learned Trial Judge are set aside; suit of the appellants is decreed in terms of agreement to sell dated 04.10.2007 (ExP-1) with costs throughout, exemplary costs at our hands having been reluctantly waived.

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(ii) The respondents are directed to procure all necessary documents/records in terms of Ex.P-1 including 11-E Sketch and share copies thereof with the appellants and thereafter to call them to make the payment of remainder of consideration amount. This the respondents should do within an outer limit of three months.

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(iii) On receipt of copies of documents/records as directed in the preceding paragraph, the appellants shall finalise the draft of the sale deed and call upon the respondents to execute & register a regular sale deed within one month; they shall pay balance of the consideration amount to the respondents right in front of jurisdictional Sub-Registrar by way of Demand Drafts.

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(iv) In the event, the respondents fail to accomplish the directions herein above contained, it shall be open to the appellants to get required documents/records and also the sale deed duly executed & registered through judicial process by levying execution, at the full cost of respondents/defendants.

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(v) The respondents are hereby restrained from alienating or encumbering the subject property at any point of time, so that the fruits of the litigation reach the hands of victorious parties namely the appellants. They shall discharge all and whatever encumbrances affecting the

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subject property forthwith, failing which the appellants can do that from the amount payable to the respondents and thereby get the pro tanto discharge.

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Sd/JUDGE

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Sd/JUDGE

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Cbc/snb List No.: 1 Sl No.: 11

Mr K Made Gowda v. Smt Lakshmamma

Case brief

What is this about?

What did the court decide?

Mr K Made Gowda v. Smt Lakshmamma

Case brief

What is this about?

What did the court decide?

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