Sri Basappa S/O Kallappa Handigund Vs Sri Appasab S/O Ramappa Lingaraddi — Karnataka HC (2025) — LawSathi Research

Sri Basappa S/O Kallappa Handigund Vs Sri Appasab S/O Ramappa Lingaraddi — Karnataka HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

Appeal allowed in part; rate of interest on refund of earnest money reduced from 18% to 12% per annum from the date of the agreement of sale till realization, and the trial Court's decree modified accordingly. The Registry to permit the respondent to withdraw the deposited amount of Rs.7,24,400/- along with accrued interest; the remaining balance to be paid by the defendants to the plaintiff as per the trial Court's directions.

Issue for consideration

Whether the rate of interest of 18% per annum awarded by the trial Court on the refund of earnest money was excessive and ought to be reduced.

Court's answer

Awarding interest at 18% per annum on the earnest money is definitely on the higher side; the appeal is allowed in part and the rate of interest is reduced to 12% per annum from the date of the agreement of sale till realization, and the decree passed by the trial Court is modified to that extent.

Ratio / Principle

Grounds for reduction: the suit property is agricultural land and no material was placed on record by the plaintiff as to the income that could be derived from it between 2015 and the date of filing of the suit (02.01.2019); additionally, the property is joint family property of all the defendants though the agreement was made only with defendant No.1, and the trial Court found the plaintiff failed to prove readiness and willingness.

Detailed headnote1 paragraphs

Regular First Appeal (S. 96 r/w Order 41 Rule 1 CPC) by the defendants against the judgment and decree dated 03.04.2024 in O.S.No.77/2019 (Prl. Senior Civil Judge, Athani), whereby the plaintiff's suit for specific performance was decreed only for refund of earnest money with interest at 18% per annum. Held, per R. Devdas, J. (DB): (i) there was a clear finding of the trial Court that the plaintiff failed to prove readiness and willingness, and specific performance was declined; (ii) the suit schedule property — agricultural land measuring 2 acres 9 guntas — was joint family property belonging to all the defendants, whereas the plaintiff had contracted only with defendant No.1; (iii) with no material on the income derivable from the agricultural land between 2015 and filing (02.01.2019), 18% interest was 'definitely on the higher side'. Interest reduced to 12% per annum from the date of the agreement of sale (20.11.2015) till realization; decree modified accordingly; appeal allowed in part. The appellants' deposit of Rs.7,24,400/- (made pursuant to this Court's directions) to be withdrawn by the respondent/plaintiff with accrued interest, balance payable as per the trial Court's directions.

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NC: 2025:KHC-D:18389-DB RFA No. 100374 of 2024

HC-KAR

IN THE HIGH COURT OF KARNATAKA, AT DHARWAD

DATED THIS THE 18^TH DAY OF DECEMBER, 2025 PRESENT

THE HON'BLE MR. JUSTICE R.DEVDAS AND THE HON'BLE MR. JUSTICE B. MURALIDHARA PAI

R.F.A. NO.100374 OF 2024 (SP)

BETWEEN:

SRI BASAPPA

S/O. KALLAPPA HANDIGUND, AGE: 48 YEARS, OCC: AGRICULTURE, R/O. SATTI, TQ. ATHANI, DIST. BELAGAVI.

SRI KALMESH

Digitally signed by V N BADIGER Location: High Court of Karnataka, Dharwad Bench.

S/O. BASAPPA HANDIGUND, AGE: 21 YEARS, OCC: AGRICULTURE, R/O. SATTI, TQ. ATHANI, DIST. BELAGAVI.

KUMAR SHIVANAND

S/O. BASAPPA HANDIGUND, AGE: 19 YEARS, OCC: STUDENT, R/O. SATTI, TQ. ATHANI, DIST. BELAGAVI.

SMT. SUNANDA

W/O. BASAPPA HANDIGUND,

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AGE: 40 YEARS, OCC: AGRICULTURE, R/O. SATT, TQ. ATHANI, DIST. BELAGAVI.

…APPELLANTS

(BY SMT. SONU SUHEL N., ADV. FOR SRI SHARAD V. MAGADUM, ADVOCATE)

AND:

SRI APPASAB S/O. RAMAPPA LINGARADDI, AGE: 63 YEARS, OCC: AGRICULTURE, R/O. SATTI, TQ. ATHANI, DIST. BELAGAVI.

…RESPONDENT

(BY SRI RAJENDRA R. PATIL, ADVOCATE)

THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96 READ WITH ORDER 41 RULE 1 OF CPC., 1908, PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND DECREE IN O.S.NO.77/2019 PASSED BY THE PRL. SENIOR CIVIL JUDGE ATHANI DATED 03.04.2024 AND FURTHER DISMISS THE SUIT IN THE INTEREST OF JUSTICE AND EQUITY.

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

CORAM: THE HON'BLE MR. JUSTICE R.DEVDAS AND THE HON'BLE MR. JUSTICE B. MURALIDHARA PAI

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ORAL JUDGMENT

(PER: THE HON'BLE MR. JUSTICE R.DEVDAS)

This Regular First Appeal is filed at the hands of the defendants in a suit for specific performance, where the suit filed by the plaintiff has been decreed only for the refund of earnest money along with interest at the rate of 18% per annum, and raises a short question regarding the rate of interest awarded by the trial court.

Learned counsel for the appellants/defendants submits

that it is because there is a finding of the trial Court that the plaintiff failed to prove that he had been ready and willing

to perform his part of the contract and the fact that the plaintiff entered into an agreement only with defendant No.1, while defendants Nos.2 to 4 have a right in the suit schedule property, and having regard to the fact that the suit schedule property is agricultural land, measuring 2 acres, 9 guntas in all, the rate of interest awarded by the trial court is excessive.

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Learned counsel for the respondent/plaintiff however submits that out of the sale consideration of ₹16,00,000/the plaintiff paid under the registered agreement of sale a sum of ₹8,25,000/- as on the date of the agreement i.e. 20.11.2015, and despite the defendants enjoying the benefit of the advance payment paid by the plaintiff, the defendants continue to enjoy the suit schedule property. Therefore, having regard to all these aspects, the trial Court has rightly awarded a rate of interest of 18% per annum.

Having heard the learned counsel for the appellants and respondents and having perused the appeal memo, this Court finds that there is considerable force in the submission of the learned counsel for the appellants. The suit schedule property is a joint family property belonging to all the defendants. However, the plaintiff has entered into an agreement only with defendant No. 1. Secondly, there is

a clear finding of the trial Court that the plaintiff failed to prove readiness and willingness, and therefore the suit for specific performance has been declined.

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HC-KAR

Taking an overall view of the facts narrated herein, this Court is of the considered opinion that awarding a rate of interest of 18% per annum on the earnest money is definitely on the higher side. Having regard to the fact that the suit property is agricultural land, and no material is placed on record by the plaintiff as to the income that could be derived out of the suit property between 2015 and the date on which the suit was filed on 02.01.2019, we are of the considered opinion that the rate of interest should be 12% per annum.

In that view of the matter, we proceed to allow the appeal in part while reducing the rate of interest to 12% per annum from the date of the agreement of sale till realization, as directed by the trial court. The decree passed by the trial court is accordingly modified to this extent.

During the course of this appeal, the appellants have deposited Rs.7,24,400/- in terms of the directions issued by this Court. The Registry shall allow the respondent to withdraw this amount along with accrued interest, and the

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NC: 2025:KHC-D:18389-DB RFA No. 100374 of 2024

HC-KAR

remaining balance shall be paid by the defendants to the

plaintiff as per the trial court’s directions.

Sd/(R.DEVDAS)

JUDGE

Sd/-

(B. MURALIDHARA PAI) JUDGE

VB /CT-AN List No.: 1 Sl No.: 10