Rajesh S/O Meghharaj Jain Vs Gopal S/O Gururaj Mutalik Desai @ Kulkarni

GOPAL S/O. GURURAJ MUTALIK DESAI @ KULKARNI, AGE.45 YEARS, OCC. PRIVATE SERVICE, R/O. H.NO.161, "ASHIRVAD", NEAR MARUTI TEMPLE, KESHWAPUR, HUBBALLI-580023.

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SMT. CHHAYA W/O. GURURAJ MUTALIK DESAI @ KULKARNI, AGE.71 YEARS, OCC. HOUSEHOLD WORK, R/O. H.NO.161, "ASHIRVAD", NEAR MARUTI TEMPLE, KESHWAPUR, HUBBALLI-580023.

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SMT. KAMALAXI

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W/O. KRISHNARAO DANAKSIRUR, AGE.41 YEARS, OCC. GOVERNMENT SERVICE, R/O. HIRE BAGEWADI,

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TQ AND DIST. BELGAUM-590121.

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SRI. VADHIRAJ S/O. KRISHNACHARYA GALAGALI, AGE.48 YEARS, OCC. AGRICULTURE, R/O. KUPPELUR, TQ. RANEBENNUR, DIST. HAVERI-581115.

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…RESPONDENTS

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(BY SRI. NAGARAJ C. KOLLOORI, ADV. FOR R1 & R2; SRI. K. L. PATIL AND SRI. B. G. INDI, ADVs. FOR R4; NOTICE TO R3 HELD SUFFICIENT)

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THIS RFA IS FILED U/SEC.96 READ WITH ORDER 41 RULE 1 OF CPC., PRAYING TO CALL FOR THE RECORDS AND PERUSE THE SAME AND ALLOW THE APPEAL BY MODIFYING THE JUDGMENT AND DECREE DATED 25.06.2019 IN O.S. NO.328/2013 PASSED BY 1^ST ADDITIONAL SENIOR CIVIL JUDGE AT HUBBALLI AND DECREE THE SUIT OF THE APPELLANT IN ITS ENTIRETY FOR SPECIFIC PERFORMANCE OF THE AGREEMENT DATED 07.01.2008 IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA

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3 -

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ORAL JUDGMENT

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(PER: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI)

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This regular first appeal is filed by the appellant challenging the judgment and decree dated 25.06.2019 passed in O.S. No.328/2013 by the learned I Additional Senior Civil Judge, Hubballi, wherein the trial Court has dismissed the suit for specific performance of a contract.

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For convenience, the parties are referred to as

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per their ranking before the trial Court. The appellant was the plaintiff and the respondents were the defendants.

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Brief facts leading rise to filing of this appeal are as follows:

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The plaintiff filed a suit against the defendants for specific performance of contract. It is contended that defendants 1 to 3 are the absolute owners of the suit schedule property bearing Sy.No.42/1A measuring 2 acres

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34 guntas situate within the revenue jurisdiction of Keshawapur village, Hubballi taluk. Defendant Nos.1 to 3

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agreed to sell a portion of land bearing Sy.No.42/1A to an extent of 1 acre 20 guntas out of 2 acres 34 guntas to the plaintiff for valuable consideration of Rs.29,50,000/- and accordingly, the plaintiff paid a sum of Rs.1,00,000/- as an advance sale consideration amount. It was agreed that the balance sale consideration amount was to be paid at

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the time of registration of the sale deed. One of the conditions of the agreement was, that the balance amount is to be paid by the plaintiff to defendant Nos.1 to 3 within six months after disposal of Writ Appeal No.2227/2006. Defendant Nos.1 to 3 suppressing the fact that the writ appeal was disposed of on 01.02.2007, inserted the said condition. It is contended that defendant Nos.1 to 3 have also given wrong boundaries of the suit schedule property with an intention to defraud the plaintiff. It is one of the terms of the agreement that in case of acquisition of the said land by any competent authority, defendant Nos.1 to 3 will take the responsibility of de-notifying the land from the acquisition at their expense. The said agreement of sale was executed on 07.01.2008. In the month of

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December 2010, the plaintiff became aware of disposal of the writ appeal and after enquiry, it was found that the writ appeal was already disposed of on 01.02.2007 i.e. even before execution of the sale agreement in favour of the plaintiff. In the month of June 2013, the plaintiff came to know that defendant Nos.1 to 3 sold the suit schedule

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property in favour of defendant No.4 without giving any public notice under a registered sale deed dated 15.10.2010 for a sale consideration of Rs.4,50,000/-. It is contended that defendant Nos.1 to 3 to defeat the rights of the plaintiff, executed a registered sale deed in favour of defendant No.4. It is contended that defendant No.4 is not a bona fide purchaser for value. The said sale deed is sham and bogus. The plaintiff got issued a legal notice dated 19.06.2013 to defendant Nos.1 to 3 calling upon them to receive the sale consideration amount and execute a registered sale deed. Defendant Nos.1 to 3 gave an evasive reply to the legal notice issued by the plaintiff. Hence, a cause of action arose for the plaintiff to

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file a suit for specific performance of a contract. Accordingly, prays to decree the suit.

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4. Defendant Nos.1 and 2 filed a written statement

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admitting the execution of sale agreement and receipt of earnest money and denied that the plaintiff was ready and willing to perform his part of a contract. It is contended that the plaintiff has failed to pay the balance sale consideration amount within the time. The plaintiff has failed to establish that he was/is always ready and willing to perform his part of the contract. He submitted that when the plaintiff failed to pay the balance sale consideration amount, defendant Nos.1 to 3 were badly in need of money, hence, executed a registered sale deed in favour of defendant No.4 on 15.10.2010. Hence, on these grounds, prays to dismiss the suit against defendant Nos.1 to 3.

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5. Defendant No.4 filed a written statement

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denying the averments made in the plaint and contended that he had purchased the suit property under a registered

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sale deed dated 15.10.2010 and defendant Nos.1 to 3 put defendant No.4 in possession of the suit schedule property. He contended that he is the bona fide purchaser for value. Hence, on these grounds, he prays to dismiss the suit.

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The trial Court based on the pleading of the

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parties, framed the following issues.

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ISSUES

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1) Whether the plaintiff proves that defendants No.1 to 3 agreed to sell the suit schedule property for a sale consideration of ₹29,50,000/-to him?

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2) Whether the plaintiff further proves that he has paid 1,00,000/- as advance to the defendants and defendants have executed a agreement of sale on 07.01.2008 with a condition to execute the sale deed after disposal of writ appeal by No.2227/2006(LR)?

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3) Whether the plaintiff further proves that he is ready and willing to perform the part of his contract?

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4) Whether the plaintiff further proves that the defendants have cheated him by executing registered sale deed in favour of defendant No.4 in respect of suit schedule property on 15.10.2010?

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5) Whether the plaintiff further proves that the sale deed executed between defendants No.1 to 3 and 4 is not binding on him?

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6) Whether the defendant No.4 proves that he is bonafide purchaser of suit schedule property?

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7) Whether the plaintiff is entitled for the relief of specific performance of contract?

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8) Whether the plaintiff proves that alternatively he is entitled for refund of earnest money with interest at 20% p.a. from the defendant against till its realization?

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9) What decree or order?”

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The plaintiff to substantiate his case, the GPA

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holder of the plaintiff was examined as PW.1 and marked 8 documents as Exs.P-1 to P-8. In rebuttal, defendant No.1 was examined as DW.1 and defendant No.4 was examined as DW.2 and marked 18 documents as Exs.D-1 to D-18.

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The trial Court after recording the evidence, hearing on both sides and on assessing the oral and documentary evidence answered Issue Nos.1 to 3 and 6 in the affirmative, Issue No.4, 5 and 7 in the negative, issue

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No.8 partly in the affirmative and issue No.9 as per the final order.

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The suit of the plaintiff for the relief of specific performance of a contract was dismissed and granted alternative relief of refund of earnest money of Rs.1,00,000/- with interest at 12% per annum from the date of institution of the suit till actual realization. The plaintiff aggrieved by the dismissal of the suit for specific performance of a contract, filed this regular first appeal.

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Heard the learned counsel for the plaintiff and

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the learned counsel for defendant Nos.1, 2 and 4.

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Learned counsel for the plaintiff submits that defendant Nos.1 to 3 have admitted the execution of the sale agreement in favour of the plaintiff agreeing to sell the suit schedule property for valuable consideration of Rs.29,50,000/- and accordingly defendant Nos.1 to 3 received earnest money of Rs.1,00,000/-. He submits that the plaintiff was ready and willing to perform his part of

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the contract. He submits that the trial Court has answered issue Nos.1 to 3 in the affirmative holding that the plaintiff was ready and willing to perform his part of the contract but committed an error in declining to grant the relief of specific performance of a contract. He submits that the trial Court has not properly exercised the judicial discretion under Section 20 of the Specific Relief Act. He submits that the trial Court ought to have decreed the suit for specific performance of a contract, but, on the contrary, dismissed the suit for specific performance of a contract. The impugned judgment passed by the trial

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Court is arbitrary and erroneous. Hence, on these grounds, he prays to allow the appeal.

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Per contra, learned counsel for defendant Nos.1 and 2 submits that defendant Nos.1 to 3 have executed the sale agreement in favour of the plaintiff agreeing to sell the suit schedule property for consideration of Rs.29,50,000/-. He submits that the plaintiff did not pay the balance sale consideration amount to defendant Nos.1

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to 3. As defendant Nos.1 to 3 were in need of money, due

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to non-payment of balance consideration amount by the plaintiff, defendant Nos.1 to 3 alienated the suit schedule property in favor of defendant No.4 and executed a registered sale deed in favour of defendant No.4 on 15.10.2010. He submits that defendant No.4 converted the suit schedule property i.e., agricultural land into nonagricultural land and he had formed a layout and sold the sites formed in the suit schedule property. He submits that the agreement of sale was executed in 2008 and legal notice was issued in 2013. The plaintiff has not taken any steps to enforce the sale agreement for 5 years. Thus, the plaintiff was/is not ready and willing to perform his part of a contract. He submits that the trial Court was justified in passing the impugned judgment. Hence, on these grounds, he prays to dismiss the appeal.

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Learned counsel for defendant No.4 submits that the plaintiff did not fulfill the requirement of Section 16(c) of the Specific Relief Act. He submits that, the

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plaintiff, merely by paying meager amount of Rs.1,00,000/- had kept quiet for more than 5 years from the date of execution of the sale agreement. The plaintiff was/is not willing to perform his part of the contract. He submits that the plaintiff has committed a breach of contract. The trial Court exercising judicial discretion under Section 20 of the Specific Relief Act, has rightly passed the impugned judgment. He also submits that merely because the plaintiff has proved execution of sale agreement, itself is not a ground to grant the relief of specific performance of a contract. Hence, on these grounds, he prays to dismiss the appeal.

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Perused the records and considered the submissions of the learned counsel for the parties.

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The points that arise for our consideration are:

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i) Whether the plaintiff proves that the trial Court has not exercised the judicial discretion under Section 20 of the Specific Relief Act and

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committed an error in declining to grant the relief of specific performance of a contract? and

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ii) What order?

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Point No.(i).

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The GPA holder of the plaintiff was examined as P.W.1. He deposed that defendant Nos.1 to 3 are the owners of the suit schedule property and agreed to sell the suit schedule property for consideration of Rs.29,50,000/and accordingly, the plaintiff paid a sum of Rs.1,00,000/to defendant Nos.1 to 3 and executed agreement of sale on 07.01.2008. It was agreed that the plaintiff should pay the balance sale consideration amount at the time of execution of the sale deed and it was agreed that the sale deed to be executed after disposal of W.A.No.2227/2006. It is contended that, after disposal of W.A.No.2227/2006, the plaintiff approached the defendants to receive the balance sale consideration amount and execute the registered sale deed. In the meanwhile, defendant Nos.1 to 3 executed a registered sale deed in favour of

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defendant No.4 on 15.10.2010. The plaintiff got issued a legal notice to defendant Nos.1 to 3 to receive the balance consideration amount and execute the registered sale deed. Defendant Nos.1 to 3 replied to the said legal notice, stating that the plaintiff had not paid the balance consideration amount within time. It is also stated in the reply that the plaintiff was not ready and willing to perform his part of the contract. The plaintiff to establish that defendant Nos.1 to 3 executed the agreement of sale in favour of the plaintiff produced the original agreement of sale, marked as Ex.P3. Further, P.W.1 has produced Ex.P1 GPA authorizing the GPA holder to depose on behalf of the plaintiff. Ex.P2 is the record of rights, which reflects that defendant Nos.1 to 3 are the absolute owners of the suit schedule property. Ex.P4 is the certified copy of the sale deed dated 15.10.2010, which discloses that defendant Nos.1 to 3 executed the registered sale deed in favour of defendant No.4. Ex.P5 is the copy of the legal notice calling upon defendant Nos.1 to 3 to receive the balance sale consideration amount and execute the

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registered sale deed. Ex.P6 is the reply given by defendant Nos.1 to 3 to the plaintiff stating that defendant Nos.1 to 3 are ready and willing to perform their part of the contract. On the contrary, the plaintiff did not repay the balance consideration amount. As defendant Nos.1 to 3 were badly in need of money have sold the suit schedule property in favour of defendant No.4. Ex.P7 is the copy of the order passed in W.A.No.2227/2006. The said writ appeal was disposed of prior to the execution of the agreement of sale in favour of the plaintiff. Ex.P8 is the paper publication, wherein the plaintiff got issued public notice calling upon the public, not to deal with defendant Nos.1 to 3 regarding the suit schedule property. Ex.P9 is the copy of the understanding. Ex.P10 is the letter given by HDMC. Ex.P11 is the copy of the newspaper publication. Ex.P12 is the certified copy of the agreement of sale. Exs.P.13 to 18 are the certified copies of the sale deeds. Ex.19 is a copy of the village map.

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In the course of cross-examination, it was

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suggested to P.W.1 that, P.W.1 did not offer a balance consideration amount to defendant Nos.1 to 3, the said suggestion was denied by P.W.1. It is the case of P.W.1 that he was present at the time of sale transaction between the plaintiff and defendant Nos.1 to 3. P.W.1 has no personal knowledge regarding the sale talks which have taken place between the plaintiff and defendant Nos.1 to 3.

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Further, Defendant Nos.1 to 3 in the written statement have admitted regarding the execution of the agreement of sale in favour of the plaintiff for consideration of Rs.29,50,000/and receiving Rs.1,00,000/- as an advance sale consideration amount. It is contended that the plaintiff did not pay the balance consideration amount within a reasonable time. It is contended that, after the lapse of five years from the date of execution of the agreement of sale, the plaintiff issued legal notice. It is contended that the plaintiff was/is not

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ready and willing to perform his part of the contract. As defendant Nos.1 to 3 have admitted regarding the execution of the agreement of sale and payment of advance consideration of Rs.1,00,000/-, the plaintiff has contended that the plaintiff was ready and willing to perform his part of the contract. The agreement of sale was executed on 07.01.2008. Though the plaintiff himself has produced Ex.P7, the order passed in W.A.No.2227/2006 discloses that the writ appeal was disposed of prior to execution of Ex.P3. The plaintiff ought to have offered the balance sale consideration amount to defendant Nos.1 to 3 within a reasonable time. The plaintiff has kept quiet for more than five years. The delay brought defendant Nos.1 to 3 to sell the suit schedule property in favour of defendant No.4 for valuable consideration. The plaintiff by paying meager amount, kept quiet for more than five years. The plaintiff was expected to perform his part of the contract within a reasonable time. He cannot enforce the contract as per his whims and fancies. The Hon’ble Apex Court in the case of

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K.S.Vidyanadam and Others vs Vairavan reported in

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AIR 1997 SC 1751 , has held that the plaintiff was sitting quiet without taking any steps to perform his part of the contract under the agreement though the agreement specifies a period of six months within which he was expected to purchase the stamp papers, tender the balance amount and call upon the defendant to execute the sale deed and deliver the possession of the property. We are inclined to accept the defendants’ case that the values of the house property in Madurai town was rising fast and this must have induced the plaintiff to wake up after 2½ years and demand specific performance.

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Admittedly, in the instant case, the agreement

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of sale was executed in 2008 and defendant Nos.1 to 3 alienated the suit schedule property to defendant No.4 on 15.10.2010. Defendant No.4 after purchasing the suit schedule property converted the agricultural land into nonagriculture and formed layout. Thereafter, the plaintiff got issued the legal notice in 2013, because of a rise in the

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market value of the suit schedule property. The very conduct of the plaintiff in remaining silent for five years in obtaining the registered sale deed by offering the balance sale consideration amount would show that, he was not ready and willing to perform his part of the contract. Though the trial court answered issue No.3 in the affirmative holding that the plaintiff was ready and willing to perform his part of the contract, the said finding was not challenged by the defendants.

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20. The Hon’ble Apex Court in the case of Sardar

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Singh Vs Krishna Devi reported in (1994) 4 SCC 18 , at

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para 14, held as under;

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“…14. Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief, merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract.”

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The Hon’ble Apex Court in the case of K

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Narendra vs Riviera Apartments (P) Ltd., reported in (1999) 5 SCC 77 , at para 29, held as under;

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“…29. Performance of the contract involving some hardship on the defendant which he did not foresee while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature , shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Louis Chinnaya Arogiaswamy by stating that the decree for specific performance is in the discretion of the Court but the discretion should not be used arbitrarily; the discretion should be exercised on sound principles of law capable of correction by an appellate court.”

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22. As observed, the plaintiff has not taken steps to

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perform his part of the contract and he has kept quiet for

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more than five years. Further, he woke up only when defendant No.4 converted the agricultural land into nonagriculture and formed a layout. Learned counsel for the plaintiff submits that, defendant No.4 sold the sites formed in the suit schedule property, and third party interest is created in the suit schedule property.

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In view of the above discussions, the trial court was justified in passing the impugned judgment. We do not find any error in the impugned judgment and we concur with the judgment and preliminary decree dated 25.06.2019 passed by the trial court. Accordingly, we answer point No.1 in the negative.

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Learned counsel for defendant Nos.1 to 3 to

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show their bona fideness, offered to refund a lump sum amount of Rs.4,00,000/- to the plaintiff, but the plaintiff declined to accept the said amount.

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