Arun Kumar S/O. Narasimha Shetty Vs Shri Madhav S/O. Vinayak Amrite

1(c) NEETA W/O. VIJAY JAMBEKAR AGE: 54 YEARS, R/O. H.NO.60 BHOSALE NAGAR ORNET BUILDING PLOT NO.4 OPP. RANGE HILL ROAD, SHIVAJI NAGAR, PUNE. (AMENDED V/O. DATED 12/07/2016) ... RESPONDENTS

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(BY SRI VIKRAM HUILGOL, SENIOR ADVOCATE FOR SRI SANDEEP HILGOL, ADVOCATE FOR R-1(A TO C))

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THIS RSA IS FILED UNDER SECTION 100 OF CPC., PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED 22.01.2014 PASSED IN R.A.NO.357/2009 ON THE FILE OF I ADDL. DISTRICT AND SESSIONS JUDGE DHARWAD, SITTING AT HUBLI, ALLOWING THE APPEAL BY DISMISSING THE JUDGMENT AND DECREE DATED 19.09.2009 PASSED IN O.S.NO.382/2006 ON THE FILE OF I ADDITIONAL CIVIL (SR.DN.), HUBLI, PARTLY DECREEING THE SUIT FILED FOR SPECIFIC PERFORMANCE OF CONTRACT, POSSESSION OF THE SUIT PROPERTY.

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

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CORAM: THE HON'BLE MRS JUSTICE K.S.HEMALEKHA

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ORAL JUDGMENT

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Assailing the judgment and decree dated 22.01.2014 passed in RA No.357/2009 on the file of the I Additional District and Sessions Judge, Dharwad sitting at Hubli (hereinafter referred to as ‘the First Appellate Court’ for short) reversing the judgment and decree dated 19.09.2009 passed in OS No.382/2006 on the file of the First Additional Civil (Senior Division), Hubli (hereinafter referred to as ‘the Trial Court’ for short), the present appeal is preferred by the plaintiff.

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The parties herein are referred to as per their rank before the Trial Court for the sake of convenience.

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Suit seeking specific performance of contract in respect of an agricultural land bearing Sy. No.112 measuring 5 acres 12 guntas situated at Gokul village, Hubli (‘suit property’ for short), the plaintiff avers that the defendant being the owner of the suit property agreed to sell the suit property to the plaintiff for sale consideration of Rs.8,00,000/- and executed an agreement of sale dated

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23.09.2006 by receiving an earnest money of Rs.1,00,000/through cheque No.206542 and the time stipulated for execution of the sale deed is three months from the date of agreement, as the defendant did not come forward for execution of the sale deed, the plaintiff issued notice. The defendant denied the execution of the agreement by way of reply hence, the plaintiff instituted suit for specific performance of contract.

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The defendant was issued with notice, the General Power of Attorney holder (‘GPA ‘for short) of the defendant filed his written statement, admitting that defendant is the owner in possession of the suit property, however denied the agreement of sale dated 23.09.2006 said to have been executed by the defendant in favour of the plaintiff for sale consideration of Rs.8,00,000/- and also about the receiving of the earnest money of Rs.1,00,000/-.

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The Trial Court, based on the pleadings, framed

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the following issues:

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“1. Whether plaintiff proves that defendant on 23.9.2006 agreed to sell the suit property for

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Rs.8,00,000/- by receiving the earnest money of Rs.1,00,000/- and executed the agreement of sale in his favour?

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2. Whether he further proves that the defendant agreed to execute the sale deed within three months and to hand over the possession of the property?

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3. Whether he further proves that he was and is ready and willing to perform his part of contract?

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4. What order or decree?”

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In order to substantiate the claim, the plaintiff

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examined himself as PW.1, one witness as PW.2 and marked documents at Ex.P.1 to P.10. On the other hand, the Bank Manager one V. Ramesh Venkateshmurthy was examined as DW.1.

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The Trial Court based on the pleadings, oral and documentary evidence arrived at a conclusion that the plaintiff has proved that the defendant on 23.09.2006 agreed to sell the suit property for valuable sale consideration of Rs.8,00,000/- and Rs.1,00,000/- has been received as an earnest money and by judgment and decree decreed the suit

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of the plaintiff and directed the defendant to execute the sale deed by receiving the balance sale consideration.

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Aggrieved the defendant preferred appeal before

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the First Appellate Court along with the appeal, defendant filed application seeking to set-aside the exparte order and permission to file written statement taking a plea that the defendant has not executed the power of attorney as alleged in favour of Hari Jogelkar who appeared for the defendant and filed written statement, the First Appellate Court framed the following points for consideration:

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“1. Whether I.A.No.III filed under Order IX rule 6 of Code of Civil Procedure and I.A.No.IV filed under Order VIII Rule 1 of Code of Civil Procedure along with the written statement of the defendant are liable to be allowed?

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2. Whether the Plaintiff /Respondent proves that on 23.9.2006 the Defendant/Appellant had entered into sale agreement in respect of suit property and he has agreed to sell the same for Rs.8,00,000/and on receiving Rs.1,00,000/- by way of Bankers Cheque as part of consideration amount had executed the agreement of sale in favour of the

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defendant agreeing to executive the sale deed within three months and to hand over the possession of the suit property to the Defendant?

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3. Does he further proves that he has been ready and willing to perform his part of the contract?

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4. Does the Appellant/Defendant proves that the findings recorded by the learned trial court in the impugned judgment are illegal and perverse one and the same are liable to be set aside by this Court sitting in appeal?

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5. What order or decree?”

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The First Appellate Court answered point No.1 in the negative holding that I.A.No.III filed by the defendant under Order IX Rule 6 CPC and I.A. No.IV filed under Order VIII Rule 1 CPC along with written statement cannot be allowed, however, while considering on merits, the First Appellate Court arrived at a conclusion that the plaintiff has failed to prove that on 23.09.2006, the defendant had entered into an agreement of sale by receiving an earnest money of Rs.1,00,000/- and by judgment, the First Appellate Court reversed judgment and decree of the Trial Court and

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held that the plaintiff is not entitled for specific performance of contract and dismissed the suit. Aggrieved by which, the plaintiff is before this Court in this regular second appeal.

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Learned counsel appearing for the appellant

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would urge the following grounds:

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i. The Trial Court rightly held that Ex.P.2-agreement of sale was valid and enforceable contract. The First Appellate Court, being the last fact finding Court, has totally ignored the said aspect and has not assigned any proper reasons while reversing the judgment and decree of the Trial Court.

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ii. That defendant did not enter into the witness box, the Power of Attorney Holder who filed written statement did not enter the witness box, the alleged Power of Attorney under which the suit is contested is not produced, and not seen the light of the day, the First Appellate Court misdirected itself by ignoring the presumption under Section 114 of the Evidence Act.

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iii. That the adverse inference has to be drawn against the defendant who has not entered into the witness

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box and the testimony of the witness DW1-Bank Manager is not of any assistance to the defendant. The First Appellate Court has not rightly exercised the discretion that is available under Section 96 CPC and the same warrants interference by this Court.

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Per contra, learned senior counsel Sri Vikram Huilgol, for the defendant would urge the following grounds:

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i. That the respondent/defendant filed applications I.A.No.III under Order IX Rule 6 CPC and I.A. No.IV filed under Order VIII Rule 1 CPC along with a written statement of the defendant before the First Appellate Court taking a specific stand that defendant had not executed GPA in favour of Hari Jolegakar who filed written statement on behalf of the defendant, and sought for an opportunity to contest the suit which applications were rejected by the First Appellate Court.

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ii. The First Appellate Court though rejected the contention of the defendant, rightly arrived at a conclusion that the plaintiff had failed to establish that the defendant had entered into an agreement of sale in respect of the suit property for a valuable sale consideration.

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This Court, while admitting the appeal on 25.01.2018, has framed the following substantial questions of law:

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“i) Whether the first appellate court has erred in recording a finding that the suit agreement is entered into under duress and that the signatures therein were forged without there being any pleading to this effect?

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ii) Whether the first appellate court was justified in holding that the sale agreement Ex.P-2 is not duly proved?”

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The law is well settled that the plaintiff has to stand or fall on his own legs and he shall not depend upon the weakness of the defendant to prove his case. In a suit for specific performance, the burden is on the plaintiff to prove the existence of a valid agreement, readiness and willingness to perform the contract and the non appearance of the defendant does not absolve the plaintiff from proving the case of the plaintiff. In order to substantiate the claim, plaintiff examined himself as PW.1, categorically deposed about the agreement of sale being executed and the Bankers Cheque issued for Rs.1,00,000/- the prior negotiations

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between the parties, PW.1 stood the test of crossexamination and nothing was elicited in cross examination to disbelieve the case of the plaintiff. PW.2-the attesting witness to Ex.P.2-the agreement of sale who deposed in similar terms to the evidence of PW1. The Trial Court, while assessing the entire evidence of PW.1 along with PW.2, arrived at a conclusion that the plaintiff has proved that there was an agreement of sale executed on 23.09.2006 as per Ex.P.2 and decreed the suit.

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The written statement filed by the GPA at paragraph No.9 reads as under:

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“9. The alleged agreement of sale, which is relied upon by the plaintiff is a fraudulent and created by the plaintiff to suit his ulterior motive of engulfing the valuable property of this defendant. The plaintiff’s father obtained the signature of this defendant by playing mischief, fraud and by misrepresentation. The said agreement is illegal, invalid, fraudulent and unenforceable. The same is created and does not show real intention of the parties. Hence, the suit of the plaintiff is liable to be dismissed.”

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Perusal of the written statement indicates the

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pleas of fraud and misrepresentation are raised, the burden was on the defendant to prove that the agreement of sale was not an intended transaction but on account of fraud. There being no evidence regarding fraud and representation, the trial on an analysis of the entire evidence placed by the plaintiff had arrived at a conclusion in favor of the plaintiff and exercised its discretion, the First Appellate Court, while reversing the finding of fact, must come into the close quarters with the reasoning assigned by the trial Court and then assign its own reason for arriving at a different finding. This would satisfy the Court hearing the further appeal that the First Appellate Court had discharged the duty accepted by it. The Power of Attorney represented the defendant, however Power of Attorney was not produced, suit for specific performance was decreed on consideration of oral and documentary evidence placed by the plaintiff. Defendant preferred appeal, along with the appeal, filed applications for setting aside the ex parte order and seeking permission to file written statement on the ground that the defendant has

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not executed any Power of attorney in favor of Hari Jogalekar to act on his behalf to contest the proceedings, the said application was rejected, having done so, the First Appellate Court ought to have appreciated whether the evidence placed by the plaintiff has met the necessary criteria to seek specific performance.

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The First Appellate Court has totally lost sight of the fact that the defendant appeared through GPA before the Trial Court, Power of Attorney Holder, having taken a contention that the agreement of sale at Ex.P.2 is by fraud, has not stepped into witness box, the burden which was on the defendant to prove that the agreement was obtained by fraud was not discharged. When a plea of fraud was set, the burden of proof was typically on the defendant, the defendant must provide evidence to prove the allegation of fraud or prove that the agreement was entered into on fraudulent misrepresentation. The First Appellate Court goes on an assumption that the GPA is

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executed but fails to consider that burden which was cast on the defendant to prove the fraud was not discharged, perusal of the judgment of First Appellate Court vitiates for the reason that it does not indicate on what reasons the judgment of the Trial Court needs to be reversed, being the last Court of finding of facts. The Apex Court in the

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case of Santosh Hazari v. Purushottam Tiwari¹

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(Santosh Hazari) at paragraph No.15 held as under:

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“15. A perusal of the judgment of the trial court shows that it has extensively dealt with the oral and documentary evidence adduced by the parties for deciding the issues on which the parties went to trial. It also found that in support of his plea of adverse possession on the disputed land, the defendant did not produce any documentary evidence while the oral evidence adduced by the defendant was conflicting in nature and hence unworthy of reliance. The first appellate court has, in a very cryptic manner, reversed the finding on question of possession and dispossession as alleged by the plaintiff as also on the question of adverse possession as pleaded by the defendant. The

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1 (2001) 3 SCC 179

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appellate court has jurisdiction to reverse or affirm the findings of the trial court. First appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the appellate court. The task of an appellate court affirming the findings of the trial court is an easier one. The appellate court agreeing with the view of the trial court need not restate the effect of the evidence or reiterate the reasons given by the trial court; expression of general agreement with reasons given by the court, decision of which is under appeal, would ordinarily suffice (See Girijanandini Devi v. Bijendra Narain Choudhary [AIR 1967 SC 1124] ). We would, however, like to sound a note of caution. Expression of general agreement with the findings recorded in the judgment under appeal should not be a device or camouflage adopted by the appellate court for shirking the duty cast on it. While writing a judgment of reversal the appellate court must remain conscious of two principles. Firstly, the findings of fact based on conflicting evidence arrived at by the trial court must weigh with the

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appellate court, more so when the findings are based on oral evidence recorded by the same Presiding Judge who authors the judgment. This certainly does not mean that when an appeal lies on facts, the appellate court is not competent to reverse a finding of fact arrived at by the trial Judge. As a matter of law if the appraisal of the evidence by the trial Court suffers from a material irregularity or is based on inadmissible evidence or on conjectures and surmises, the appellate court is entitled to interfere with the finding of fact. (See Madhusudan Das v. Narayanibai [(1983) 1 SCC 35 : AIR 1983 SC 114] ) The rule is — and it is nothing more than a rule of practice — that when there is conflict of oral evidence of the parties on any matter in issue and the decision hinges upon the credibility of witnesses, then unless there is some special feature about the evidence of a particular witness which has escaped the trial Judge's notice or there is a sufficient balance of improbability to displace his opinion as to where the credibility lie, the appellate court should not interfere with the finding of the trial Judge on a question of fact. (See Sarju Pershad Ramdeo Sahu v. Jwaleshwari Pratap Narain Singh [1950 SCC 714 : AIR 1951 SC 120] ) Secondly, while reversing a finding of fact the appellate court must come into close quarters with the reasoning

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assigned by the trial court and then assign its own reasons for arriving at a different finding. This would satisfy the court hearing a further appeal that the first appellate court had discharged the duty expected of it. We need only remind the first appellate courts of the additional obligation cast on them by the scheme of the present Section 100 substituted in the Code. The first appellate court continues, as before, to be a final court of facts; pure findings of fact remain immune from challenge before the High Court in second appeal. Now the first appellate court is also a final court of law in the sense that its decision on a question of law even if erroneous may not be vulnerable before the High Court in second appeal because the jurisdiction of the High Court has now ceased to be available to correct the errors of law or the erroneous findings of the first appellate court even on questions of law unless such question of law be a substantial one.”

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17. The Apex Court in the case of Santosh Hazari

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has clearly indicated as to how the First Appellate Court has to exercise its appellate power and when the First Appellate Court reverses the findings of the Trial Court, the First Appellate Court has to give reasons for arriving at such a conclusion. The reasoning assigned by the First Appellate

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Court is not in consonance with Section 96 CPC and matter requires reconsideration by the First Appellate Court and the substantial questions of law framed by this Court are answered accordingly.

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Learned senior counsel would submit that if the Court inclines to remand the matter to the First Appellate Court, an opportunity may be provided to the defendant and the applications filed by the defendants need to be reconsidered by the First Appellate Court even in the absence of any challenge to the findings recorded on Point No.1 by exercising Order 41 Rule 22 Code of Civil Procedure (‘CPC’ for short).

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Order 41 Rule 22 CPC reads as under:

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“ 22. Upon hearing respondent may object to decree as if he had preferred a separate appeal.– (1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour; and may also take any cross-objection to

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the decree which he could have taken by way of appeal provided he has filed such objection in the Appellant Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.

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Explanation.–A respondent aggrieved by a finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file cross-objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.

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(2) Form of objection and provisions

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applicable thereto.– Such cross-objection shall be in the form of a memorandum, and the provisions of rule 1, so far as they relate to the form and contents of the memorandum of appeal, shall apply thereto.

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(3) [***]

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(4) Where, in any case in which any respondent has under this rule filed a memorandum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may

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nevertheless be heard and determined after such notice to the other parties as the Court thinks fit.

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(5) The provisions relating to appeals by indigent persons shall, so far as they can be made applicable, apply to an objection under this rule.”

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Rule 22 of Order 41 CPC is apparently a special provision permitting a respondent, who has not appealed from a decree, to object to the said decree in the opposite party’s appeal as if he had himself preferred a separate appeal where a decree is partly against one suitor and partly against another. The Apex Court in the case of Bharat Kala Bhandar Ltd vs. Municipal Committee, Dhamangoan² (Bharat Kala) observed that even though the scope of an appeal is not allowed to be broadened at the instance of the parties, if such a plea is made by them raises a question of law which is regarded of considerable importance, then the Court has the right to entertain such a plea .

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2 (1966) 59 ITR 73

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In the recent decision of the Apex Court in the

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Case of Saurav Jain vs M/S A.B.P. Design and another³

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(Saurav Jain), the same question grappled before the Apex Court, the Apex Court redefined the scope of Order 41 Rule 22 and observed that to do complete justice in the absence of appeal, the party can raise objections to the findings of the lower Court in the Court of appeal. The proposition of law being no more a res-integra and to do ultimate justice an opportunity needs to be accorded to the defendant as well and this Court pass the following:

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ORDER

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i. Regular second appeal is hereby allowed in

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part .

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ii. Judgment and decree of the First Appellate Court is set aside, matter is remitted back to the First Appellate Court for reconsideration in accordance with law.

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iii. Parties are directed to appear before the First

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Appellate Court on 11.03.2025.

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3 AIR 2021 SC 3673

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iv. All contentions of the parties are kept open to be urged before the First Appellate Court.

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v. As this Court opines that the matter requires reconsideration, the First Appellate Court shall reconsider I.A.Nos.III and IV filed by the defendant afresh, after affording sufficient and reasonable opportunity to either side.

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