Second appeal against concurrent refusal of specific performance of an agreement of sale. The High Court held the purchaser failed to prove readiness and willingness, having not paid balance consideration or issued notice within three months, and his cheque had been dishonoured. Appeal dismissed, refund decree confirmed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2024 BEFORE
THE HON'BLE MR JUSTICE RAVI V HOSMANI REGULAR SECOND APPEAL NO. 622 OF 2014 (SP)
BETWEEN:
SRI GANESH RAO, S/O M. SANTHOJI RAO, AGED ABOUT 54 YEARS, R/O CHANNAPPA LAYOUT, SAVALANGA ROAD, SHIVAMOGGA - 577 201.
…APPELLANT
(BY SRI PRASAD B.S., ADVOCATE)
AND:
Digitally signed by GEETHAKUMARI PARLATTAYA S Location: High Court of Karnataka
…RESPONDENTS
(BY SRI S.V.PRAKASH, ADVOCATE FOR R1; SRI H.C. SUNDARESH, ADVOCATE FOR R2)
THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE JUDGMENT & DECREE DATED 16.01.2014 PASSED IN R.A.NO.35/2007 ON THE FILE OF THE COURT OF THE I ADDITIONAL DISTRICT & SESSIONS JUDGE AT SHIMOGA, DISMISSING THE APPEAL AND CONFIRMING THE JUDGMENT AND DECREE DATED 10.08.2007 PASSED IN O.S.NO.228/1998 ON THE FILE OF THE COURT OF THE II ADDITIONAL CIVIL JUDGE (SR.DN.) AT SHIMOGA. TRAIL COURT DECREED THE SUIT. APPELLATE COURT DISMISSED THE APPEAL SUIT FOR SPECIFIC PERFORMANCE.
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THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Challenging judgment and decree dated 16.01.2014 passed by I Addl. District & Sessions Judge, Shivamogga, in R.A.no.35/2007 (' First Appellate Court ') and judgment and decree dated 10.08.2007 passed by II Addl. Civil Judge (Sr.Dn.), Shivamogga, in O.S.no.228/1998 (' Trial Court '), this appeal is filed.
Shivamogga, bearing Municipal Khata no.671/657/850 measuring 30 ft. X 50 ft. (suit property). It was stated that suit property was purchased by defendant no.1 from Smt.Lakshmamma, widow of one N.T.Sankappa. It was also stated that defendant no.1 had agreed to pay monthly interest at rate of Rs.2/- per Rs.100/-.
NC: 2024:KHC:7090 RSA No. 622 of 2014
required it urgently. Thus, plaintiff had paid Rs.1,50,000/- out of sale consideration of Rs.1,75,000/-.
though aware of above transaction purchased suit property
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from defendant no.1 on 26.09.1998 by bloating sale consideration of Rs.3,00,000/-. It was stated that said transaction was not bonafide. But in meanwhile, defendant no.1 filed O.S.no.518/1998, which was not at all maintainable. It was stated that cause of action for filing suit for plaintiff arose on 21.08.1998 when defendant no.1 began interfering with suit property. Hence suit was filed.
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subsequent to termination of agreement of sale. It was stated
that agreement was no more enforceable.
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sale. And that upon presentation, said cheque was dishonoured due to insufficient funds. It was stated that same was informed to plaintiff by issuing notice. Without replying to said notice, plaintiff had shown entire amount of Rs.1,10,000/- as advance paid and filed present suit. It was stated that plaintiff herein was therefore, entitled for only Rs.65,000/- upon return of title deeds of suit property and was not entitled for specific performance.
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and allegation of clandestine transaction between Defendants no.1 and 2 were denied. On contrary, it was alleged that plaintiff had failed to perform his part of contract and was guilty of breach. Therefore, at best, plaintiff was only entitled for reimbursement of amount paid to defendant no.1 and not for specific performance of alleged agreement of sale.
ISSUES
1. Whether the plaintiff proves the agreement of sale executed by D-1 for sale of plaint schedule property in favour of plaintiff as pleaded in plaint on 19.05.1998?
2. Whether plaintiff further proves payment of consideration of Rs.90,000/- paid to defendant no.1 under the suit agreement for sale?
3. Whether the plaintiff is entitled for specific performance of the suit agreement?
4. Whether there is any cause of action for the suit?
5. What decree or order?
ADDITIONAL ISSUE
1. Whether the plaintiff alternatively entitle for recovery of Rs.1,50,000/- with interest from the defendant?
witnesses PWs.1 to 3 and Exs.P1 to P21 were marked. In
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rebuttal, defendants no.1 and 2 were examined as DWs.1 and 2 and Exs.D1 to D17 were marked.
1. Whether the appellant/plaintiff has proved that under Ex.P.1 he had paid an amount of Rs.1.5 lakhs to the defendant no.1?
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2. Whether the plaintiff/appellant has proved that he has always been ready and willing to perform his part of the contract?
3. Whether the judgment and decree of trial court warrants interference?
4. What decree or order?
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property. Upon failure, suit was filed. It was submitted though defendant no.2 disputed agreement of sale - Ex.P1, defendant no.1 accepted its execution. It was submitted that trial Court had held agreement of sale as proved, while decreeing suit in part. Said finding had attained finality as neither of defendants had filed appeal. It was submitted that Exs.P1, P3 and P.5 established receipt of advance sale consideration by defendant no.1 from plaintiff. Such being case, when Ex.P.1 does not refer to payment of any portion of advance sale consideration by cheque, both trial Court and first Appellate Court erred in assuming that cheque for Rs.45,000/- was part of transactions in pursuance of Ex.P.1. It was submitted that issuance of cheque was part of totally different transaction unrelated to agreement of sale. It was submitted that though period of three months was stipulated in agreement of sale, defendant no.1 had not issued any notice before expiry of said term. It was submitted that plaintiff had expressed readiness and willingness to perform his part of contract by issuing notice at Ex.P.15. Thus, when execution of agreement of sale and receipt of advance sale consideration were established, trial Court and first appellate Court erred in not granting decree for specific performance, especially in absence of pleading or proof of
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hardship or escalation in value of property. It was submitted when defendant no.1 admitted receipt of Rs.45,000/- covered under cheque at Ex.D1, contention of said defendant that plaintiff had not paid advance sale consideration as mentioned in Ex.P.1 - agreement of sale would not carry any substance. It was submitted that above aspects were not properly appreciated either by trial Court or first appellate Court. Hence, sought for framed substantial questions of law as proposed, answer them in favour of plaintiff, modify judgment and decree passed by both Courts by granting decree for specific performance.
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issue notice or call upon defendant to perform his part of contract, trial Court and first appellate Court would be fully justified in presuming that plaintiff was not ready and willing to perform his part of contract. Since defendant no.1 admitted about borrowing Rs.40,000/- from plaintiff and Rs.25,000/- was interest payable on said amount, Courts granted relief of refund of advance sale consideration paid. It was also contended that sale deed executed in favour of defendant no.2 was after issuing notice of termination of agreement of sale. It was submitted that said sum of Rs.65,000/- was deposited by defendant no.1 in O.S.no.518/1998 filed seeking for mandatory injunction directing plaintiff herein to return title deeds of suit property and agreement of sale. Instead of receiving said amount and returning original title deeds, plaintiff had filed frivolous appeal. On above ground sought for dismissal of appeal.
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assigned by trial Court for declining specific performance was that Ex.D.1-Cheque was issued by plaintiff towards part of sale consideration. It held dishonour of cheque was admitted by plaintiff. It observed condition in Ex.P.1 stipulating period of three months from agreement for payment of balance sale consideration and for execution of sale deed. It held that plaintiff failed to establish any attempt by him to pay balance sale consideration and call upon defendant no.1 to execute sale deed. It has held that only after expiry of said period, plaintiff had issued notice. Failure to issue notice within stipulated period of three months and cheque issued towards part of sale consideration having been dishonoured, established that plaintiff was not ready and willing to perform his part of contract. Relying upon decision of Hon'ble Supreme Court in M/s. P.R. Deb And Associates vs. Sunanda Roy, reported in (1996) 4 SCC 423, it held failure of purchaser to make payment within stipulated time would disentitle relief of specific performance.
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plaintiff did not have Rs.45,000/- in his Bank account, proceeded to hold failure of plaintiff to prove readiness and willingness and on said finding dismissed appeal confirming judgment and decree passed by trial Court.
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funds at relevant time would substantiate lack of readiness and willingness on part of plaintiff.
interest payable on borrowed money. There is no challenge on quantum of amount to be returned. Besides, as observed above, plaintiff admitted that cheque issued by him for sum of Rs.45,000/- had bounced after defendant no.1 presented it for payment. Thus, impugned Judgment and Decrees passed by both Courts is after due consideration of all material on record and with view to do complete justice.
Sd/JUDGE
Psg*
2 issues framed by the court
Whether the plaintiff was ready and willing to perform his part of the agreement of sale within the stipulated three-month period?
Whether a suit for specific performance is maintainable where the seller's notice terminating the agreement was not challenged?
Colour shows how this judgement treated each authority
M/s. P.R. Deb And Associates vs. Sunanda RoyRelied on¶19
(1996) 4 SCC 423 · Who else cites this
I.S.Sikandar (Dead) by L.Rs vs. K.Subramani and othersRelied on¶22
(2013) 15 SCC 27 · Who else cites this
1 provisions across 1 enactments
Sri Ganesh Rao
H.N. Sheshadri
H.R. Venkatesh
Ravi V Hosmani
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
