Dismissed

M/S Megacity Developers and Builders Ltd. v. Sri J D M Manjunath

Karnataka HC22 Feb 2024RFA/1548/2021

Case brief

AI extract

What is this about?

Company's appeals against refusal of specific performance of 2004 sale agreements after alienation to a purchaser. Court found suits time-barred and plaintiff lacked funds to prove readiness and willingness; confirmed refund of advance with interest and dismissed appeals.

What did the court decide?

Appeals dismissed with costs; defendants directed to deposit advance sale consideration with interest before the Trial Court within 4 weeks.

M/S Megacity Developers and Builders Ltd. Vs Sri J D… — Specific Performance | Karnataka HC (2024)

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RFA NO.1548/2021 C/W

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RFA NO.1547/2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 22^ND DAY OF FEBRUARY, 2024

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PRESENT

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THE HON’BLE MR.P.S.DINESH KUMAR, CHIEF JUSTICE

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AND

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THE HON’BLE MR. JUSTICE T.G.SHIVASHANKARE GOWDA

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RFA NO.1548 OF 2021 C/W RFA NO.1547 OF 2021 (SP)

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BETWEEN:

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M/S MEGACITY DEVELOPERS AND BUILDERS LTD. NO.1, CHANDRALOKA, 5^TH CROSS, GANDHINAGARA BENGALURU 560 009, REP. BY ITS MANAGING DIRECTOR, SRI C P YOGESHWAR

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…APPELLANT

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[COMMON IN BOTH APPEALS]

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(BY SRI.UMESH MOOLIMANI, ADV.)

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AND:

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1 . SRI J D M MANJUNATH S/O J D M SIDDAPPA AGED ABOUT 60 YEARS R/AT NO 45, GOVINDAPPA ROAD BASAVANAGUDI, BENGALURU 560 004 AND AT PRESENT R/AT JAGLURU VILLAGE JAGALURU TALUK, CHITRADURGA DISTRICT

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2 . SRI Y BHASKAR S/O NARAYANA AGED ABOUT 41 YEARS R/AT NO 45, 1 FLOOR INDUSTRY HOUSE RACE COURSE ROAD BENGALURU 560 001 … RESPONDENTS [IN RFA NO.1548/2021] (BY SRI.V.SRINIVASAN RAGHAVAN, SENIOR ADV. FOR SRI.H.S.SOMNATH, ADV. FOR R2; VIDE ORDER DATED 04.12.2023 NOTICE TO R1 IS DISPENSED WITH)

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AND:

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SRI.B.R.KRISHNAMURTHY S/O B.R.RAMASWAMY AGED ABOUT 60 YEARS R/AT NO.106, SPM ROAD SHIMOGA

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2 . Y BHASKAR S/O NARAYANA AGED ABOUT 41 YEARS R/AT NO 45, 1 FLOOR INDUSTRY HOUSE RACE COURSE ROAD BENGALURU 560 001 … RESPONDENTS [IN RFA NO.1547/2021]

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(BY SRI.V.SRINIVASAN RAGHAVAN, SENIOR ADV. FOR SRI.H.S.SOMNATH, ADV. FOR R2; VIDE ORDER DATED 04.12.2023 NOTICE TO R1 IS DISPENSED WITH)

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THESE APPEALS ARE FILED UNDER SECTION 96 OF CPC., AND READ WITH ORDER 41 RULE 1 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 08.12.2020 PASSED IN O.S.NO.310/2012 AND 308/2012 ON THE FILE OF THE ADDITIONAL SENIOR CIVIL JUDGE AND JMFC., RAMANAGARA PARTLY DECREEING THE SUIT FOR SPECIFIC PERFORMANCE AND SALE AGREEMENT IN MFA NO.1547/2021.

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THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 02.02.2024 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, T.G.SHIVASHANKARE GOWDA J. , DELIVERED THE FOLLOWING:

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J U D G M E N T

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In these two appeals, the plaintiff has challenged the judgment and decree dated 08.12.2020 passed in O.S.Nos.310/2012 and 308/2012 by the Additional

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Senior Civil Judge and JMFC., Ramanagara (for brevity 'the Trial Court').

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In both suits, plaintiff and defendant No.1 are common and the facts pleaded and the issues framed, evidence relied upon by the parties are identical, hence, taken up together for common disposal.

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For the sake of convenience, parties shall be referred to as per their status before the Trial Court.

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Brief facts of the case in O.S.No.310/2012 are, the defendant No.1 is the absolute owner in possession of the agricultural land bearing Sy.No.100/2 measuring 1 acre 30 guntas and Sy.No.145 measuring 5 acres 24 guntas situated at

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Bannikuppe village, Bidadi Hobli, Ramanagara Taluk (for short 'the suit schedule property').

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Defendant No.1 offered to sell the suit schedule property and the plaintiff has agreed to purchase jointly along with one V.Jayachandra @ Rs.6,20,000/- per acre for 7 acres 14 guntas for total consideration of Rs.45,57,000/-. The plaintiff and defendant No.1 entered into an agreement on 18.10.2004 and defendant No.1 received advance of Rs.9,00,000/- in cash and cheque dated 02.11.2004 for Rs.5,00,000/-. Defendant No.1 encashed the said cheque on 04.11.2004. It was agreed to pay balance consideration of Rs.31,57,000/- at the time of execution and registration of the sale deed within three months from the date of agreement. It was also agreed to deliver the possession in favour of plaintiff free from all encumbrances on the date of execution of sale deed.

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5.1. Two months after execution of the

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agreement, i.e., in the last week of December 2004, plaintiff approached defendant No.1 twice requesting for execution and registration of the sale deed by receiving the balance consideration and to hand over vacant possession of the suit property with clear title deeds. The plaintiff was always ready and willing to perform his part of contract to pay balance of sale consideration and to get the sale deed executed and registered. Defendant No.1 has informed the plaintiff that he has not yet acquired full title over the suit schedule property, as there is a case pending before the Assistant Commissioner, Ramanagara under Section 79(A) of the Karnataka Land Reforms Act, vide LRF (79) 21/1999-2000 and sought time assuring that after acquiring full title, he would execute the sale deed and hand over vacant possession. At the time of execution of agreement, this aspect was not disclosed to the plaintiff. Defendant No.1 entered into

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an agreement with the plaintiff misleading the said aspect.

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5.2. After consultation with his advocate, plaintiff learnt he had three years time from the last date fixed for execution of regular sale deed for seeking legal remedy. Accordingly, he has granted six months' time to defendant No.1 to perform his part of contract. Even after one year, defendant No.1 did not come forward with the marketable title to execute the sale deed. Defendant No.1 has not shown any inclination to perform his part of contract as and when the plaintiff contacted him. Under such circumstances, the plaintiff approached defendant No.1 in the month of January and February 2006 requesting to perform his part of contract, but he sought time. On 10.02.2006, the plaintiff issued notice calling upon the defendant No.1 to perform his part of contract, but he did not receive the notice.

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5.3. The plaintiff learnt that LRF case before the Assistant Commissioner, Ramanagara was decided in favour of defendant No.1. After getting the RTC and other relevant records, defendant No.1 was trying to alienate the suit property for the higher price to defraud the rights of the plaintiff. Since V.Jayachandra had relinquished his right in favour of the present plaintiff, he has filed the present suit seeking relief of specific performance.

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5.4. By way of amendment, plaintiff has pleaded

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that during the pendency of the suit, defendant No.1 had alienated the suit schedule property in favour of one Y.Bhaskar for consideration of Rs.1,65,00,000/on 04.07.2013. Such alienation is hit by lis pendence and not binding on the plaintiff. Later Y.Bhaskar was impleaded as defendant No.2.

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5.5. It is further pleaded that, the plaintiff has filed the suit for specific performance at an earlier

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point of time in O.S.No.318/2006 against the defendant No.1. Defendant No.1 filed I.A.No.IV for rejection of the plaint for not properly describing the title of the Company of the plaintiff. Said application was rejected vide order dated 24.03.2010. Defendant No.1 has challenged the said order before the High Court in W.P.No.24070/2010. Vide order dated 26.09.2011, said writ petition was allowed and the

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04.07.2013 is hit by lis pendens and not binding on the plaintiff. Alternatively, the plaintiff has also sought for a direction against the defendant No.1 to return the advance amount of Rs.14,00,000/- with interest @ 12% per annum.

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It is the case of the plaintiff in O.S.No.308/2012, defendant No.1 is the absolute

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owner in possession of the agricultural land bearing Sy.No.100/1 measuring 1 acre 15 guntas, Sy.No.147 measuring 4 acres and Sy.No.158 measuring 2 acres 15 guntas situated at Bannikuppe village, Bidadi Hobli, Ramanagara Taluk (for short 'the suit schedule property').

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6.1. Defendant No.1 offered to sell the suit

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schedule property and the plaintiff has agreed to purchase jointly along with one V.Jayachandra @ Rs.6,20,000/- per acre for total consideration of Rs.48,05,000/-. The plaintiff and defendant No.1

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entered into an agreement on 18.10.2004 and defendant No.1 received an advance of Rs.6,00,000/in cash and cheque dated 02.11.2004 for Rs.7,00,000/-. Defendant No.1 encashed the said cheque on 04.11.2004. It was agreed to pay balance consideration of Rs.35,05,000/- to defendant No.1 at the time of execution and registration of the regular sale deed within three months from the date of agreement.

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6.2. It is further pleaded that, the plaintiff has

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filed the suit for specific performance at an earlier point of time in O.S.No.322/2006 against defendant No.1. Defendant No.1 filed I.A.No.IV for rejection of the plant for not properly describing the title of the Company of the plaintiff. Said application was rejected vide order dated 24.03.2010. Defendant No.1 has challenged the said order before the High Court in W.P.No.24071/2010. Vide order dated 26.09.2011, said writ petition was allowed and the

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plaint was ordered to be rejected. The plaintiff has challenged the same before the Hon'ble Apex Court in S.L.P.No.5350/2012. The Hon'ble Apex Court dismissed the said SLP on 30.04.2012 reserving liberty to the plaintiff that dismissal of the SLP will not prelude the plaintiff to institute a fresh suit. Accordingly, the present suit is filed seeking relief of mandatory injunction for specific performance against the defendants for execution of the registered sale deed by receiving balance consideration of Rs.35,05,000/- and to deliver possession of the property. After amendment of the plaint, regarding alienation in favour of defendant No.2, after impleading defendant No.2 to the suit, he has sought for the additional relief that alienation by defendant No.1 in favour of defendant No.2 on 04.07.2013 is hit

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by lis pendens and not binding on the plaintiff. Alternatively, the plaintiff has also sought for direction

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to defendant No.1 to repay the advance amount of Rs.13,00,000/- with interest @ 12% per annum.

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Since other pleadings urged in both suits are identical, in order to avoid repetition, let us proceed further together.

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Before the Trial Court, defendant No.1 though contested both the suits in O.S.No.318/2006 and O.S.No.322/2006, he remained exparte in the present suits. Defendant No.2 alone resisted both suits by filing written statement interalia contending that he is the owner of the suit schedule property having acquired through sale deed dated 04.07.2013 from defendant No.1. Plaintiff has suppressed the material facts and misled the Court. Both the suits are not maintainable. The execution of the agreement dated 18.10.2004 by defendant No.1 in favour of plaintiff is denied and also payment of part consideration of

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Rs.14 lakhs and 13 lakhs respectively and sought for

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dismissal of the suit.

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On the basis of the above pleadings, the Trial

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court has framed the following issues:

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In O.S.No.310/2012:

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"1. Whether the plaintiff company proves that, the defendant legally entered into sale agreement on 18-10-2004 with the plaintiff company and agreed to sell the suit schedule property for a valuable sale consideration of Rs.45,57.000/- and received a sum of Rs. 14,00,000/- as advance amount?

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2. Whether the plaintiff company further proves that, it was always ready and willing to perform its part of obligation under the contract?

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3. Whether the plaintiff company further proves that, the defendant No. 1 failed to perform his part of obligation under the contract?

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4. Whether the plaintiff further proves that, sale deed dated:04-07-2013 in favour of 2^nd defendant is hit by lis pendens and void in law?

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5. Whether the plaintiff is entitled for the specific performance relief as sought for?

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6. Whether the defendant No.2 proves that he is a bonafide purchaser of suit schedule property?

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7. Whether the plaintiff in the alternative is entitled for refund of Rs.14,00,000/- along with the interest at the rate of 12% p.a.?

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8. Whether the plaintiff is entitled for the relief as sought for?

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9. What order or decree?"

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In O.S.No.310/2012, on behalf of the plaintiff, two witnesses are examined as PWs-1 and 2 and marked 26 documents as Ex.P1 to P26. On behalf of defendants, defendant No.2 is examined as DW-1 and 13 documents are marked as Exs.D1 to D13.

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In O.S.No.308/2012, on behalf of the

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plaintiff, three witnesses are examined as PWs-1 to 3 and marked 32 documents as Ex.P1 to P32. On behalf

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of defendants, defendant No.2 is examined as DW-1 and 10 documents are marked as Exs.D1 to D10.

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The Trial Court in both suits, answered issue

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No.1 in the affirmative, issue Nos.2, 4, 7 and 8 partly

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in the affirmative, issue Nos.3, 5 and 6 in the negative. While answering issue No.9, rejected the relief for specific performance and directed the defendant No.1 in both suits to refund advance amount of Rs.14 lakhs and 13 lakhs respectively along with interest @ 10% per annum from 17.01.2005 till the date of realization. Aggrieved, the plaintiff has filed the instant appeals on various grounds.

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Heard the arguments of Sri Umesh Moolimani, learned counsel for the plaintiff, Sri.V.Srinivasan Raghavan, learned Senior Counsel supported by Sri.H.S.Somnath, learned counsel for defendant No.2. Notice to respondent No.1 is dispensed with, since he was placed exparte before the Trial Court.

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It is the contention of the learned counsel for

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the plaintiff that; evidence placed in proof of the agreement is accepted by the Trial Court. Defendant

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No.1 is under the obligation to furnish all relevant records to complete the formalities of the execution and registration of the sale deed. The LRF proceedings pending before the Assistant

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Commissioner, Ramanagar, was suppressed at the time of execution of the agreement. After the title dispute ended defendant No.1 avoided the plaintiff’s demand for execution of the sale deed.

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14.1. Plaintiff is a Company having sufficient funds. When demanded defendant No.1 to execute the sale deed, he did not come forward after issuing notice in the year 2006. Suits in O.S.No.318/2006 and O.S.No.322/2006 were filed. For the reason that the suits were filed by the plaintiff's Managing Director in his individual capacity, the plaint was rejected by the High Court. The Hon'ble Apex Court permitted the plaintiff to file the suit correctly. Accordingly, instant suits are filed without any delay.

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14.2. Though sufficient evidence was placed explaining the readiness and willingness, the Trial Court has failed to consider it. Defendant no.1 has not contested the suit. The defendant No.2, the purchaser pendente lite is only contesting the suit. Under such circumstances, the Trial court ought to have accepted the evidence and directed both defendants to execute the sale deed by receiving the balance sale consideration.

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14.3. In support of his contentions, he has relied

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upon the decision in Basavaraj -vs- Padmavathi and Another¹ .

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Per contra, learned Senior counsel appearing on behalf of defendant No.2 has contended that the plaintiff has not filed any suit specifically seeking specific performance, but is seeking the order of mandatory injunction. When the plaintiff is asking the defendants to execute the sale deed, it is the foremost 1 AIR 2023 SC 282

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duty of the plaintiff to establish that he was/is always ready and willing to perform his part of contract. Plaintiff failed to place any evidence in proof of it. The plaintiff has not entered the witness box in both cases. PW-1 as Power of Attorney has entered the witness box. No evidence is placed to show that PW-1 is the Director of the plaintiff/Company. Before the Trial Court, on behalf of the plaintiff, there are no documents, such as, balance sheet, income-tax returns, bank statement or any other material to show that the plaintiff/Company is/was or now holding any money to pay balance sale consideration. The balance consideration in both the suits comes to Rs.66,62,000/-. PW-1 has admitted in the witness box that the plaintiff was having about Rs.30,00,000/-, which was not sufficient to pay balance sale consideration for obtaining the sale deed.

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15.1. It is also contended that apart from these two suits, the plaintiff also filed another suit in

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O.S.No.314/2012, which carries same consideration

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and the balance sale consideration to be paid in that suit is Rs.30 lakhs. In all 3 suits, balance sale consideration comes around Rs.1 crore. The plaintiff/Company was unable to show availability of such money in its possession or any arrangement made to pay the balance sale consideration.

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15.2. Though PW-1 claims that the money was

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in the house of the Managing Director of the plaintiff/Company, no evidence is placed as the Managing Director did not step into the witness box. The Trial Court has rightly observed all these aspects viz., the plaintiff without having sufficient money on one or the other pretext dragged on to perform his part of contract and committed default. A person not ready and willing to perform his part of contract is not entitled to claim relief of specific performance. The Trial Court has rightly granted the alternate prayer of the plaintiff for refund with interest.

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15.3. The plaintiff has taken refund of balance consideration in O.S.No.314/2012. Instead of receiving the balance consideration in these two cases in order to make wrongful gain is pretending to prosecute these appeals. The plaintiff cannot be allowed to blow hot and cold in different cases.

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15.4. It is further contended that the agreement

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came into existence on 18.10.2004. The suits filed are in the year 2006 not by the plaintiff as the agreement was in the name of the plaintiff/Company. One Mr.C.P.Yogeshwar has filed these suits in his personal capacity without any legal right. The defendant no.1 has contested the said suits by filing an application under Order VII Rule 11 of CPC seeking rejection of the plaint. As the Trial Court has rejected the said applications, it has been challenged before this court. Vide order referred supra, this Court allowed the application and rejected the plaint. Mr.C.P.Yogeshwar has assailed the same before the

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Hon’ble Apex Court and withdrawn the appeal enabling the plaintiff to file the suit since in the previous suits, plaintiff was not a party. Withdrawal of SLP will not create a new cause of action for the plaintiff to file the suit in the year 2012.

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15.5. The suit ought to have been filed by the plaintiff within three years of 18.10.2004 whereas the suit filed after five years is barred by time. The benefit of Section 14 of the Limitation Act is not available to the plaintiff and he supported the impugned judgment.

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15.6. To buttress his arguments, he has relied

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upon the decisions in:

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i) U.N.Krishnamurthy (since deceased) Thr. LRs. -vs- A.M.Krishnamurthy² ;

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ii) Sri Senniyappan -vs- M.P.Nanda Kumar and Others³ ;

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iii) Sri Dilip Bafna -vs- K.S.Vasudeva⁴ .

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2 2022 SCC Online SCC 840

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3 R.F.A.No.6/2014 (SP) DD 16.06.2023

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4 R.F.A.No.1589/2015 (SP) DD 15.03.2016

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iv) Ram Awadh (dead) by LRs and Others -vsAchhaibar Debey and Another⁵ ;

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v) Kadupugotla Varalakshmi -vsVudagiri Venkata Rao and Others⁶ .

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We have given our anxious consideration to the arguments addressed on behalf of both parties and perused the records.

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The points that arise for our consideration is:

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(i) Whether the suit is in time?

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(ii) Whether the plaintiff was/is always ready and willing to perform his part of contract?

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(iii) Whether the impugned judgment calls interference?

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Reg.Point No.(i):

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The agreement of sale between the plaintiff

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and defendant no.1 for sale of suit schedule property on 18.10.2004 is not in dispute. The original agreements are made available before the Court.

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5 (2000) 2 SCC 428

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6 2021 SCC ONLINE SC 365

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There is no bar for perusal of the said documents as they are undisputed documents. In both the suits, the terms of the agreement are identical except change of name of defendant No.1 and also the suit schedule property.

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As per the terms of the agreement, time is contemplated as three months from the date of agreement and it is specifically agreed that the time is essence of the contract. The contention of the plaintiff

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is that defendant No.1 was approached twice in the month of December 2004, asking him to execute the sale deed. Plaintiff was informed about the LRF proceedings before the Assistant Commissioner, Ramanagara, due to which, the plaintiff waited for completion of the LRF proceedings. That means to say, the period of three months, which is agreed under the agreement, as essence of contract has been given up by the plaintiff.

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The earlier suit filed by Mr.C.P.Yogeshwar as the Managing Director of M/s.Megacity Developers and Builders Limited is not in dispute. The applications filed by defendant No.1 in all the three suits under Order VII Rule 11 of CPC were rejected by the Trial Court. Same was challenged before this Court in W.P.No.24069/2010 and connected matters. This Court while observing that the suit was presented by Mr.C.P.Yogeshwar in his personal capacity as the Managing Director of M/s.Megacity Developers & Builders Limited, whereas the agreement is between defendant No.1 and M/s.Megacity Developers & Builders Limited, he cannot prosecute the suit in his individual capacity. Accordingly, the said applications were allowed and plaints came to be rejected. Before the Hon'ble Apex Court while dismissing the SLPs, observation made, which thus reads as:

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"Special Leave Petitions are dismissed. However this will not prelude the Company to institute fresh suit for the redressal of its grievance."

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The legal right of Mr.C.P.Yogeshwar to institute the suit seeking specific performance against defendant No.1 in his individual capacity has reached the finality before the Hon'ble Apex Court and liberty is given to the plaintiff/Company to file the suit for its redressal shows the cause of action for the plaintiff/Company to file suit shall be 3 years 3 months from the date of agreement and not in the year 2012.

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Copies of notices relied upon by the plaintiff refer the date 10.02.2006 issued to defendant No.1 by Sri.C.P.Yogeshwar and Sri.V.Jayachandra as Managing Director and Director in their individual capacity. No notice of demand calling upon the defendant No.1 was issued on behalf of the Company. Thus, without notice by the plaintiff, the suit is filed by the plaintiff in the year 2012.

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On a careful evaluation of the oral and documentary evidence, it is pertinent to note that PW-

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1 though claims that he was the Director of the plaintiff/Company, the Memorandum and Articles of Association placed on record does not point out that he was the Director in the year when the said document was subscribed. No material is placed on record to show that PW-1 was one of the Directors of the plaintiff/Company on the date he has filed the suit in the year 2006 or in the year 2012. He is representing Sri C.P.Yogeshwar in his individual capacity as Power of Attorney Holder and is not representing the plaintiff/Company.

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In view of the above, M/s.Megacity Developers & Builders Limited could institute fresh suit for redressal of its grievance. But as rightly contended by the learned counsel for defendant No.2, the Hon'ble Apex Court did not save the period of limitation in favour of M/s.Megacity Developers. Under such circumstances, the plaintiff has to explain that the suit is filed within time. The agreement is

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dated 18.10.2004, the suit is filed in the year 2012 after lapse of eight years. The period prescribed for performance of contract is three years and three months as agreed. Section 14 of Limitation Act is not applicable to save the limitation. The suit ought to have been filed within three years three months from the date of agreement whereas, the suit filed in the year 2012 is hopelessly barred by time. Accordingly, Point No.(i) is answered.

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Reg.Point No.(ii):

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PW-1/P.Mahadevaiah, the Power of Attorney

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Holder of Mr.C.P.Yogeshwar has given evidence before the Trial Court. He has produced the said Special Power of Attorney marked as Ex.P2 in O.S.No.308/2012. The Special Power of Attorney is not executed by M/s.Megacity Developers & Builders Limited, but same is the Power of Attorney relied while presenting three suits in the year 2006. It goes to show PW-1 has given evidence before the Court as

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Power of Attorney Holder of Mr.C.P.Yogehwar in his personal capacity and not as a Power of Attorney Holder of the Company. Then PW-1 cannot represent the plaintiff, but he can only be treated as a one of witness to the plaintiff.

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Keeping that apart, if the evidence of PW-1 is appreciated, it is pertinent to note that during the course of cross-examination, PW-1 has admitted that the balance outstanding available with the plaintiff/Company was Rs.1 Crore in the year 2004. In the year 2006, the Bank balance of the Company was Rs.50 Lakhs and in the year 2012, it was Rs.30 Lakhs. The suits are filed in the year 2006, even if it is taken into consideration that the plaintiff/Company is required to pay around Rs.1 Crore to defendant No.1 in all the three suits, but it was holding only Rs.50 Lakhs in its account. In the year 2012, the liability on the plaintiff/Company to pay has not

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changed, but it was having only a sum of Rs.30 Lakhs in its account.

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The argument of the learned counsel for the plaintiff is that the plaintiff being the Company having Banking transaction and it was having capacity to generate the balance of sale consideration once the defendant No.1 came forward to execute the sale deed. In order to substantiate this contention, the plaintiff is required to place the material before the Court which are all Banks records, the plaintiff/Company was dealing with. Which bank had agreed to lend money for purchase of the suit schedule property or any cash/credit facility made available for immediate withdrawal of balance consideration of Rs.1 Crore to be paid to defendant No.1 either in the year 2006 or in the year 2012 is not forthcoming.

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On behalf of the plaintiff/Company, there is

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no evidence which speaks that the plaintiff was ready

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and willing to perform its part of contract. On the other hand, PW-1, who is the Power of Attorney Holder of Mr.C.P.Yogeshwar, in his individual capacity comes before the Court and states on oath that on the date of filing of the present suits, the amount available in the account of the plaintiff/Company was only Rs.30 lakhs as against Rs.1 Crore to be paid to defendant No.1 in all the three suits. This clearly shows that as on the date of suit, plaintiff had no sufficient money to pay part consideration. Before filing the suit, no notice was issued to defendant No.1 expressing ready and willingness of the plaintiff/Company to perform its part of contract or any part consideration so offered to defendant No.1 for performing their part of execution of the sale deed.

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It is interesting to note that the agreement was in the year 2004, suits were filed in the year 2012, now we are dealing the matter in the year 2024, 19 years after the date of agreement. As

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rightly argued by the learned Senior Counsel, the plaintiff/Company cannot make defendant No.1 to wait for two decades to perform his part of contract as the prices have escalated phenomenally in the recent period.

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In Basavaraj's case (supra), the Hon'ble Apex Court at para-6.2 has held that, no adverse inference can be drawn against the plaintiff for not producing the Bank Passbook to hold that the plaintiff was not ready and willing to perform his part of agreement. It is further held that unless the plaintiff was called upon to produce the Passbook either by the defendant or the Court orders him to do so, no adverse inference can be drawn. Here in this case, there is no such scenario as PW-1 himself has admitted in the cross-examination on oath that on the date of filing of the suits in the year 2012, money that was available in the account of the plaintiff/Company

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was only Rs.30 lakhs. Hence, said principles will not

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aid the plaintiff.

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In U.N.Krishnamurthy's case (supra), the Hon’ble Apex Court has elaborately defined the concept of ‘readiness and willingness’ where the plaintiff’s balance sheet shows that he did not have sufficient funds to discharge as part of contract. Subsequent deposit of balance consideration after lapse of seven years would not establish his readiness to perform his part of contract. Para-47 and 48 thus,

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reads:

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"47. In this case, the Respondent Plaintiff has failed to discharge his duty to prove his readiness as well as willingness to perform his part of the contract, by adducing cogent evidence. Acceptable evidence has not been placed on record to prove his readiness and willingness. Further, it is clear from the Respondent Plaintiff’s balance sheet that he did not have sufficient funds to discharge his part of contract in March 2003. Making subsequent deposit of balance consideration after lapse of seven years would not establish the Respondent Plaintiff’s readiness to discharge his

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part of contract. Reliance may be placed on Umabai v. Nilkanth Dhondiba Chavan (supra) where this Court speaking through Justice SB Sinha held that deposit of amount in court is not enough to arrive at conclusion that Plaintiff was ready and willing to perform his part of contract. Deposit in court would not establish Plaintiff’s readiness and willingness within meaning of section 16(c) of Specific Relief Act. The relevant part of the judgment is reproduced below: - “45. …Deposit of any amount in the court at the appellate stage by the plaintiffs by itself would not establish their readiness and willingness to perform their part of the contract within the meaning of Section 16(c) of the Specific Relief Act…”

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48. It is, therefore, patently clear that the Respondent Plaintiff has failed to prove his readiness to perform his part of contract from the 22 date of execution of the agreement till date of decree, which is a condition precedent for grant of relief of specific performance. This Court finds that the Respondent Plaintiff was not entitled to the relief of specific performance."

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A Co-ordinate Bench of this Court in Sri

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Senniyappan's case (supra) one among us being

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parties in the said Bench has referred to the decision

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in Basavaraj –vsPadmavathi and also

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U.N.Krishnamurthy's case and held that readiness

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and willingness to perform his part of contract is upon the plaintiff. The plaintiff is required to adduce evidence either oral and documentary to demonstrate that he was ready and willing to pay balance sale consideration in order to complete the sale

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transaction.

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In the factual scenario of the instant case, the plaintiff though pleaded that he is ready and willing to perform his part of contract, in view of the evidence of PW-1 that the plaintiff at the time of filing of the suit was having only a sum of Rs.30 lakhs in its account as against the required around Rs.1 crore demonstrates that the plaintiff had no funds to perform his part of contract. The contention of the plaintiff that he was always ready and willing to perform his part of contract remained an allegation on

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paper. Accordingly, point No.(ii) is answered against the plaintiff.

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Reg.Point No.(iii):

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We have carefully perused the impugned judgment. The Trial Court has considered each and every fact pleaded by plaintiff, oral and documentary evidence and recorded well reasoned judgment that as on the date of the suit, the plaintiff did not have sufficient funds, that there was no evidence to accept his readiness and willingness to perform his part of contract and accordingly, recorded adverse finding against the plaintiff.

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The last but not the least contention of the plaintiff that defendant No.1 has not contested the suit, defendant No.2, purchaser pendente lite only contesting the suit and that the Trial Court has committed error in rejecting the evidence of the plaintiff is answered by the Hon’ble Apex Court in

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Ram Awadh' s case and Kadupugotla

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Varalakshmi 's case (supra) that defendant No.2 though a purchaser lis pendens, on purchase of the property, as defendant No.2 had stepped into the shoes of defendant No.1. In view of absence of readiness and willing to perform his part of contract, the plaintiff has lost right of enforcement of the contract by virtue of bar of limitation.

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It is interesting to note that when earlier three suits were filed in the year 2006, defendant No.1 has contested the suit by filing the written statement. At his instance, application came to be filed seeking rejection of the plaint. The plaint filed by Sri.C.P.Yogeshwar in his individual capacity came to be rejected by this Court confirmed by the Hon’ble Apex Court. Hence, we do not find any force in such submission of learned counsel for the plaintiff that the contest made by defendant no.2 is inconsequential to the claim of the plaintiff and the Court is required to

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accept blindly the evidence of the plaintiff exparte as against both the defendants.

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The plaintiff, in the alternative has sought for refund of advance money. The Trial Court even though recorded that the plaintiff is not entitled for refund of money has exercised its discretion by ordering for refund with interest which is not challenged by the defendants. As the suit is barred by time, when the plaintiff is not entitled to recover the advance money, the Trial Court has moulded the relief protecting the interest of the plaintiff/Company.

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Thus, in view of our finding on point Nos.(i) to (iii) in view of the plaintiff having been adequately compensated by order of refund of advance sale consideration with interest. We find no ground to interfere in this appeal.

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Hence, both the appeals are devoid of merits. In the result, the following:

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ORDER

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(i) Both the appeals are dismissed with costs.

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(ii) The impugned judgments and decree in both suits are hereby confirmed.

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(iii) The defendants are directed to deposit the advance sale consideration with interest before the Trial Court as ordered in the impugned judgment within 4 weeks from today.

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Sd/CHIEF JUSTICE

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Sd/JUDGE

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KNM/-

M/S Megacity Developers and Builders Ltd. v. Sri J D M Manjunath

Case brief

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M/S Megacity Developers and Builders Ltd. v. Sri J D M Manjunath

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