Partly allowed

Sri H Devaraj v. Smt Farkunda

Karnataka HC15 Apr 2024RFA/378/2011

Case brief

AI extract

What is this about?

Appeal against dismissal of a suit for specific performance of an agreement to sell land subject to Green Belt conversion. The court held the plaintiff failed to prove readiness and willingness but found the defendant in default for not applying for conversion; it awarded damages and enhanced refund interest.

What did the court decide?

Suit decreed in part: Rs.10,63,240 damages at 9% interest from suit date; refund of Rs.2 lakh advance at 9% from agreement date; proportionate cost; modified decree ordered.

Sri H Devaraj Vs Smt Farkunda — Specific Performance | Karnataka HC (2024)

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15^TH DAY OF APRIL, 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. 378 OF 2011 (SP)

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BETWEEN:

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SRI H DEVARAJ, S/O H BASAVARAJAPPA, AGED ABOUT 53 YEARS, R/O SWAMY NIVAS, 2^ND CROSS, 1^ST MAIN, BASAVESHWARA NAGAR, SHIVAMOGGA CITY.

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…APPELLANT

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(BY SRI B S PRASAD, ADVOCATE)

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AND:

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Digitally signed by C HONNUR SAB Location: HIGH COURT OF KARNATAKA

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SMT FARKUNDA, W/O DASTAGIR SAB, AGED ABOUT 43 YEARS, R/O OPP. NGO CLUB, KEB CIRCLE, SHIVAMOGGA CITY.

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(BY SRI P N HARISH, ADVOCATE)

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…RESPONDENT

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THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 01.12.2010 PASSED IN O.S.402/2006 ON THE FILE OF THE I-ADDL. SENIOR CIVIL JUDGE AND CJM, SHIVAMOGA, DISMISSING THE SUIT FOR THE SPECIFIC PERFORMANCE.

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

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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JUDGMENT

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This appeal is arising from the judgment and decree passed in O.S.No.402/2006 on the file of I Additional Senior

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Civil Judge, Shivamogga (for short `trial Court').

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The suit is one for specific performance of the contract. The execution of the Agreement for Sale dated 16.06.2006 by the defendant in favour of the plaintiff is not in dispute. In terms of the said Agreement for Sale dated 16.06.2006, the defendant agreed to sell the suit schedule property measuring 20 guntas in Survey No.141/1, situated at Navule Village, Taluk Shivamogga, for a valuable consideration of a sum of Rs.12,63,240/-. The Agreement further reveals that the plaintiff on the said date paid a sum of Rs.2 lakhs as advance sale consideration to the defendant. The Agreement further reveals that the land is located in the Green Belt area and the defendant was required to file necessary application for conversion of the land for residential use, and thereafter the property had to be sold to the plaintiff and the plaintiff was required to pay the balance sale consideration amount to the

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defendant. Two months was fixed under the Agreement to complete the transaction.

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The plaintiff issued a notice dated 01.08.2006 i.e., before the expiry of two months, calling upon the defendant to execute the registered Sale Deed. The defendant replied to the said notice expressing willingness to execute the Sale Deed in favour of the plaintiff. However, the suit is filed on 07.12.2006 seeking the specific performance of the contract on the premise that the defendant did not come forward to sell the property by getting the land use converted.

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The plaintiff has averred that he is ready and willing to perform his part of the contract and in the alternative, the plaintiff has claimed the refund of the advance sale consideration of Rs.2 lakhs and also claimed the damages to the tune of Rs.10,63,240/- and future interest at the rate of 15% per annum on the amount claimed from the date of suit till the realisation of entire amount.

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The defendant resisted the suit and took up a stand that the plaintiff was not ready and willing to perform his part of the contract despite her willingness to perform the contract.

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The defendant urged that she was willing to sell the property and she has replied to the notice stating about her willingness to sell the property after receiving the balance sale consideration. It is also the case of the defendant that the suit is not filed immediately after the expiry of the months mentioned in the agreement, as such, the plaintiff is not entitled to the relief of specific performance.

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On the issue relating to readiness and willingness to perform his part of the contract, the trial Court has recorded a finding that the plaintiff has failed to establish his readiness and willingness to perform his part of the contract. Accordingly, dismissed the suit for specific performance of the contract as well as the claim for damages however, has granted the relief of refund of the advance sale consideration amount of Rs.2 lakhs along with 6% interest per annum from the date of judgment till its repayment.

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Being aggrieved by the aforementioned judgment

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and decree passed by the trial Court, the plaintiff is in appeal. Learned counsel appearing for the plaintiff/appellant would

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contend that the trial Court erred in not granting the decree for specific performance.

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There is a Notification published prior to the Agreement of Sale, wherein Navule village is notified as a smaller urban area. This being the position, there was a need to apply for removing the suit land from the Green Belt area. However, the trial Court has erred in holding that in view of the Notification, the plaintiff could have purchased the property without conversion. It is the submission of learned counsel for the appellant that merely because the land is notified as a smaller urban area, that does not mean that all the lands located in the said village are outside the Green Belt area.

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It is also his further submission that in the notice, as well as in the plaint, the plaintiff has clearly stated that he is ready and willing to perform his part of the contract and has the capacity to pay the balance sale consideration. Thus, the readiness and willingness could have been easily inferred. He further submitted that the suit is filed within three years from the date of cause of action. The trial Court should have held

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that the plaintiff was ready and willing to perform his part of the contract.

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In the alternate, the learned counsel for the appellant/plaintiff would also contend that assuming that the plaintiff has not made out a case for grant of specific performance, the trial Court has erred in not considering his plea for damages of Rs.10,63,240/- as pleaded in the plaint. It is his further submission that the default on the part of the defendant has been clearly established in the case, wherein the defendant who was required to file an application for conversion of land, did not file any application for such conversion. Thus, when the defendant is in default, the trial Court should have awarded the damages.

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Learned counsel appearing for respondent/ defendant would contend that there is a clause in the Agreement for Sale that the property is to be sold after it is taken out of the Green Belt area. In view of the Notification published by the Government, the village in which the land is located is notified as a smaller urban area, and that would mean that the land does not fall within the ambit of the Green

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Belt area. Thus, there was no need for the defendant to file an application for the conversion of land from a Green Belt area to a residential area. It is also his submission that the plaintiff

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has not come forward to purchase the property despite the defendant stating in her reply notice that she is willing to sell her property to the plaintiff after the receipt of the balance sale consideration amount. Thus, he would contend that the trial Court is justified in holding that the plaintiff has not proved his readiness and willingness to perform his part of the contract.

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This Court has considered the contentions raised at

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the Bar and perused the materials placed before the Court.

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The following points arise for consideration.

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(a) Whether the plaintiff/ appellant has established that he was ready and willing to perform his part of the contract.

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(b) Whether the land could have been sold without the change of the land use in view of notification notifying the land as falling within the limits of smaller urban area.

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(c) In the alternative whether the plaintiff/ appellant has established that defendant being the defaulter he is entitled to damages.

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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The execution of the Agreement of Sale dated 16.06.2006 is admitted. It is also seen from the records that the Agreement stipulates that the transaction has to be completed within two months from the date of the Agreement. Admittedly, the plaintiff has issued a notice before the expiry of two months to the defendant calling upon the defendant to execute the Sale Deed after receiving the balance sale consideration. To this notice, the defendant replied that she was willing to sell the property to the plaintiff. Admittedly, this reply is served on the plaintiff. However, what is to be noticed is there is a clause in the agreement which stipulates that the land has to be taken out from the Green Belt Area and the land use has to be changed. It is forthcoming from the records that the defendant has not moved an application for conversion of land. The defendant is a defaulter in this regard. Thus, the reply sent by the defendant that she is willing to perform her part of the contract without conversion of the land does not come to the aid of the defendant.

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It is also relevant to note as to what the plaintiff did after receipt of the reply sent by the defendant agreeing to sell the suit property is not forthcoming from the pleadings, as well

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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as in his evidence. The plaint averments do not disclose as to what steps the plaintiff has taken to get the Sale Deed registered in his favour when the defendant has expressed her willingness to execute the Sale Deed in favour of the plaintiff.

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Though the learned counsel for the plaintiff would urge that the plaintiff was ready to purchase the property, provided the land was taken out of the Green Belt area and was converted for residential use, the evidence on record do not support such a stand. There is no material to hold what transpired between in the six months from the date of receipt of reply by the plaintiff and the date of filing the suit.

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In addition to the above, it is also required to be noted that, apart from making a statement in the plaint and the notice issued prior to the filing of the suit that the plaintiff is ready and willing to perform his part of the contract, no evidence is placed by the plaintiff to substantiate his plea raised in the plaint. It is also required to be noticed that under the Agreement of Sale dated 16.06.2006, the plaintiff was required to pay Rs.12,63,240/-. He has paid only a sum of Rs.2 lakhs towards advance sale consideration. The agreement also

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provides that the plaintiff has to spend an amount of Rs.45,000/- for conversion of the land and the same has to be deducted from the balance sale consideration to be paid. Thus, the plaintiff was required to pay a sum of Rs.10,18,240/-.

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It is a settled position of law that the plea relating to readiness and willingness must be taken in a pleading and that has to be demonstrated and proved. In the present case, except for taking a plea in the plaint, there is nothing on record in the form of acceptable evidence to hold that the plaintiff has the ability to pay the balance sale consideration of a sum of Rs.10,63,240/-. However it is also true that the capacity of the plaintiff to pay the balance consideration amount is not disputed by the defendant. However the relief of specific performance being discretionary, the Court can certainly insist on higher degree of proof in this regard. In the facts obtained in this case, this Court is of the view the plaintiff has not placed to materials to hold with certainty, that he was ready and willing to perform his part of the contract. At the same time it is equally true that this Court is not in a position to give a definite finding that the plaintiff was not at all ready and willing to perform his part of the contract after the receipt of

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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the reply notice by the defendant. Thus, for this reason this Court is of the view that the plaintiff is not entitled to discretionary relief of specific performance.

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Though, it is urged by the learned counsel for the defendant/respondent that in view of the Notification published in the year 1995, the suit property did not fall in the Green Belt area, said plea cannot be accepted, said Notification, which is produced before the trial Court at the time of final arguments would only reveal that the village in which the said property is relocated is part of a smaller urban area. That does not automatically mean that the land is not coming within the Green Belt area. The evidence placed on record would indicate that the land in question was a part of the Green Belt area there was a need for conversion of the land and the defendant was required to file the necessary application for conversion of the said land from the Green Belt area to a residential area.

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Admittedly, the defendant has not filed any such application. Thus, the defendant is in default in performing the obligation cast on him under the Agreement. Since the default on the part of the defendant is admitted and also the damages

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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are claimed by the plaintiff, this Court is of the view that the plaintiff has made a case to consider his plea relating to damages.

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Since the Agreement clearly states that the defendant is required to file an application for conversion of the land for its use as a residential area, that omission on the part of the defendant would give a cause of action for the plaintiff to claim damages.

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The value of the land has shot up phenomenally since the suit. The defendant is the beneficiary of his default. Thus she needs to share some portion of it with the plaintiff as he has made out a case that the defendant defaulted in complying the obligation under the agreement. This Court while accepting the plea for damages has taken into consideration the fact that the agreement is proved and the plaintiff has issued the notice to the defendant calling upon the defendant to execute the sale deed within the time stipulated in the agreement. However before execution of the sale deed something was required to be done by the defendant, which the defendant did not do. Had it been done whether the plaintiff

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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would have come forwarded for registration of the sale deed with balance amount is something which cannot be decided.

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The plaintiff had claimed damages of

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Rs.10,63,240/-. This is in addition to a refund of Rs.2 lakhs paid by the plaintiff, which is advance sale consideration. Since the damages claimed by the plaintiff is 10,63,240/- which is equivalent to the balance consideration amount to be paid, this Court does not find it difficult to assess the damages and the plaintiff is entitled to damages for the same sum.

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Further, in so far as interest awarded by the trial Court on the refund of the advance sale consideration is concerned, this Court is of the view that it is on the lower side. The same requires to be enhanced to 9% per annum from the date of the payment made by the plaintiff, till its realisation.

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Accordingly, the impugned judgment and decree passed by the trial Court require interference.

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Hence, the following:

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NC: 2024:KHC:14848 RFA No. 378 of 2011

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ORDER

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(i) The appeal is allowed in part.

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(ii) The judgment and decree dated 01.12.2010, passed by I Additional Senior Civil Judge, Shivamogga, in O.S. No.402/2006 are modified and the suit of the plaintiff is decreed in part

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(iii) The plaintiff is entitled to a sum of Rs.10,63,240/- towards damages, with interest at the rate of 9% per annum from the date of filing of the suit till the date of realisation of the entire amount.

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(iv) The plaintiff is also entitled to refund of Rs.2 lakhs of advance consideration amount along with interest at the rate of 9% per annum from the date of the suit sale agreement till its realisation.

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(v) If the defendant has already paid Rs.2 lakhs along with 6% interest as awarded by the trial Court, the defendant shall deposit the balance interest at the rate of 3% on Rs.2 lakhs from the date of the sale agreement till the date of deposit said to have been made by the defendant.

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(vi) The appellant/plaintiff is also entitled to proportionate cost.

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Draw a modified decree accordingly.

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Sd/JUDGE

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List No.: 1 Sl No.: 10

Sri H Devaraj v. Smt Farkunda

Case brief

What is this about?

What did the court decide?

Sri H Devaraj v. Smt Farkunda

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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