Smt.Bharati W/O Surendra Kathare Vs Govind S/O Shivu @ Shivaji Lamani

GOVIND S/O SHIVU @ SHIVAJI LAMANI, AGED ABOUT 42 YEARS, OCC: AGRI., R/O C/O RAMCHANDRA JADHAV, RETIRED HEAD MASTER, HANUMAN TANDA, BEHIND KORANTI HANUMAN TEMPLE, NEAR PDA ENGINEERING BOYS HOSTEL STATION AREA, GULBARGA-585101.

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RAFIYA SULTHANA D/O MOHAMMED BIN ALI, AGED ABOUT 46 YEARS, OCC: HOUSEHOLD, R/O AIWAN-E-SHAHI AREA, STATION AREA, GULBARGA-585101.

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…RESPONDENTS

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(V/O. DTD 30.11.2022, NOTICE TO R1 & R2 IS HELD SUFFICIENT)

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THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION 100 OF CPC, PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED 17.12.2013 PASSED IN R.A. NO.01/2012 ON THE FILE OF THE IV ADDITIONAL DISTRICT JUDGE AT GULBARGA AND SET ASIDE THE JUDGMENT AND DECREE DATED 08.11.2011 PASSED IN O.S. NO.98/2008 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE AT GULBARGA AND DECREE THE SUIT AS PRAYED FOR BY ALLOWING THIS APPEAL IN THE INTEREST OF JUSTICE AND EQUITY.

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NC: 2025:KHC-K:7451 RSA No. 200097 of 2014

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HC-KAR

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

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CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

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ORAL JUDGMENT

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(PER: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM)

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The captioned second appeal is by the unsuccessful plaintiff, who is assailing the concurrent judgments rendered by both the Courts below who have declined to grant larger relief of specific performance and have partially decreased the suit of the plaintiff granting refund of earnest money of Rs.5,00,000/-.

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For the sake of convenience, the parties are

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referred to as per their rank before the Trial Court.

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Facts leading to the case are as follows:

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The plaintiff instituted O.S.No.98/2008 seeking the

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relief of specific performance of contract on the strength of an agreement of sale dated 17.06.2006 alleged to have been executed by defendant No.1. According to the

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plaintiff, defendant No.1 agreed to sell the suit schedule lands bearing Sy.No.88/4 measuring 3 acres 33 guntas and Sy.No.323/1 measuring 3 acres 12 guntas for a total sale consideration of Rs.5,25,000/-, and received a sum of

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Rs.5,00,000/- as earnest money. It was asserted that the husband of the plaintiff and defendant No.1 were close friends and owing to their cordial relationship, defendant No.1 approached the plaintiff’s husband expressing his intention to sell the suit lands.

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The grievance of the plaintiff is that, despite having received a substantial portion of the sale consideration, defendant No.1, behind her back and without her knowledge, alienated one item of the suit property, namely Sy.No.88/4 measuring 3 acres 33 guntas, in favour of defendant No.2 under a registered sale deed dated 17.05.2008 for a consideration of Rs.1,61,000/-. Contending that the said sale was in breach

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of the prior agreement of sale, the plaintiff sought a declaration that the sale deed executed in favour of

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NC: 2025:KHC-K:7451 RSA No. 200097 of 2014

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defendant No.2 is null and void and not binding on her, in addition to seeking the relief of specific performance.

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Upon service of summons, defendant No.1 entered appearance and filed a written statement denying the entire transaction alleged by the plaintiff. Defendant No.1 specifically disputed the execution of the suit agreement as well as the alleged payment of Rs.5,00,000/- towards earnest money. It was contended that the agreement of sale is a forged and concocted document created by the plaintiff with an intention to pressurize defendant No.1 to sell the suit lands. Defendant No.1 further pleaded that both he and the plaintiff had purchased land in Sy.No.88/4 on the same day, and that subsequent thereto, the husband of the plaintiff insisted that defendant No.1 sell his land, which was refused. Alleging a conspiracy between the plaintiff and her husband to unlawfully grab his property by fabricating the suit agreement, defendant No.1 sought dismissal of the suit.

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NC: 2025:KHC-K:7451 RSA No. 200097 of 2014

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Based on the rival pleadings, the Trial Court framed issues and relegated the parties to trial. The plaintiff examined herself as P.W.1, examined three witnesses as P.Ws.2 to 4, and produced documentary evidence marked as Exs.P1 to P19 in support of her case.

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Defendant No.1 examined himself as D.W.1. Defendant No.2, the subsequent purchaser, though served with summons, did not choose to contest the suit.

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The Trial Court, on appreciation of the oral and documentary evidence, answered Issue No.1 in the affirmative, holding that the plaintiff had proved due execution of the agreement of sale and payment of earnest money of Rs.5,00,000/-. However, Issue No.2 was answered in the negative, with a finding that the plaintiff had failed to establish her readiness and willingness to perform her part of the contract. Additional Issue No.1 was answered in the affirmative, recording that during the pendency of the injunction proceedings, defendant No.1 had alienated Sy.No.88/4 measuring 3 acres 33 guntas in

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NC: 2025:KHC-K:7451 RSA No. 200097 of 2014

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favour of defendant No.2 under a registered sale deed dated 17.05.2008. Consequently, while denying the relief of specific performance, the Trial Court partly decreed the suit by directing refund of the earnest money.

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Aggrieved by the judgment and decree of the Trial Court, the plaintiff preferred an appeal R.A.No.1/2012. The First Appellate Court concurred with the finding that the plaintiff had proved the agreement of sale, but declined to interfere with the judgment of the Trial Court on the ground that the plaintiff failed to prove readiness and willingness. While answering Point No.2 in the negative, the Appellate Court also observed that the plaintiff had not deposited the balance sale consideration of Rs.25,000/- at the time of institution of the suit, and accordingly dismissed the appeal.

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This Court, by order dated 10.06.2024, was pleased to admit the present appeal on the following substantial questions of law:

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“(1) The Courts below having held that out of sale consideration of Rs.5,25,000/-, Rs.5,00,000/has been received by defendant No.1, whether the Courts below were justified in refusing specific performance of contract on the ground that the plaintiff was not ready and willing to perform his part of obligations?

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(2) Whether the Courts below were justified in not exercising the discretion available under Section 20 of Specific Relief Act by not granting specific performance?”

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Heard learned counsel for the plaintiff. There is

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no contest by the defendant.

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Findings on both substantial questions of law:

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Both the Courts below have concurrently held

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that the plaintiff has succeeded in proving the due execution of the suit agreement. It is, however, a matter of record that while instituting the present suit for specific performance in O.S. No.98/2008, the plaintiff did not issue a legal notice calling upon defendant No.1 to execute the

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sale deed on receipt of the balance sale consideration of Rs.25,000/-. Though the plaintiff directly proceeded to institute the suit for specific performance, the concurrent finding of the Courts below that the plaintiff failed to establish her readiness and willingness requires closer scrutiny in the backdrop of the peculiar facts and circumstances of the case.

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The plaintiff, having paid a substantial portion of the sale consideration, namely Rs.5,00,000/- out of the total consideration of Rs.5,25,000/-, approached the Civil Court at the earliest point of time by filing a suit for bare injunction in O.S.No.92/2007 on 14.03.2007. The institution of the injunction suit assumes significance in assessing the plaintiff’s readiness and willingness. Though an agreement holder ordinarily cannot maintain a suit for injunction in view of the bar contained under Section 41(h) of the Specific Relief Act, 1963, the conduct of the parties assumes paramount importance in a suit for specific performance. The Court is required to meticulously

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scrutinize the conduct of both the agreement holder and the vendor. In the present case, since the agreement was not coupled with delivery of possession and a substantial amount of the sale consideration had already been paid, the plaintiff was constrained to seek protective relief by filing a suit for bare injunction to restrain defendant No.1 from alienating the suit property. The said suit came to be dismissed on the ground that the original agreement of sale was not produced. However, it is significant that during the pendency of the injunction suit, defendant No.1 alienated one item of the suit property, namely Sy.No.88/4 measuring 3 acres 33 guntas, in favour of defendant No.2.

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It is also relevant to note that both the Courts below have concurrently held that the provisions of Order II Rule 2 of the Code of Civil Procedure are not attracted to the facts of the present case. These findings have attained finality, as they are not questioned by defendant Nos.1 and 2. In the backdrop of these material and

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undisputed circumstances, this Court deems it appropriate to extract the relevant portion of the cross-examination of defendant No.1, who was examined as D.W.1 in the present suit.

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I have completed my B. Com, and MBA. I am working as team leader of Maruthi at Lohoti motors. It is true that plaintiff's husband, Surendra Kathare is my friend. It is true that myself and plaintiff have purchased land at Kesaratagi village from the same vendor, Naganna to an extent of 15 acres 33 guntas Plaintiff purchased 6 acres and I purchased 3 acres33 guntas. It is true that the land purchased belongs to two portion of land Sy. No.88. It is true that there was an agreement for sale between the purchaser and the vendor, Naganna. Similarly there might be an agreement for sale between the plaintiff and the vendor, Naganna. I do not know that the sale deed of the plaintiff was executed on the same day. I do not know the date of registration.

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It is not true to say that I have executed the suit agreement on the next day on 17-06-2006 agreeing to sell the suit property. Witness says that it is not within his knowledge. I was the owner of the suit land on 17-06-2006. It is not true to say that I have executed the suit agreement in favour of

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plaintiff on 17-06-2006 vide Ex.P1 and passed a receipt as per Ex.P2. It is not true to say that I have signed the suit agreement as per Ex. P1(a). Now I see the photo, it is true to say that the photo is mine. Witness says that plaintiff's husband was a filed officer and he has collected my photos. The signature on the photograph at Ex.P1(c) is not mine. It is true that the Ex.P1 is annexed with the photo of plaintiff also. It is true that the suit agreement, Ex.P1 is notarised. Now I see the receipt, it is notarised. Now I see the notary register at Ex.P18, Ex.P18(b) is not my signature. It is not true to say that I have executed the suit agreement and receipt at Ex.P1 & P2. It is not true to say that now I am deposing falsely.

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It is true that I have sold the suit property to the defendant No.2, Rafiya Sultana during the pendency of the suit In OS No.92/07. Now I see the CC of sale deed executed in favour of defendant No.2 as per Ex.P12. It bears my signature and the same is marked at Ex.P12(a). Ex.P12 is executed on 17-052008. I might have written statement that I was not the owner of the suit property on 17-06-2006.

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It is true that the plaintiff has preferred appeal assailing the order of mutation order in the name of defendant No.2. Witness says that the appeal is upheld by overlooking the objections filed by the

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NC: 2025:KHC-K:7451 RSA No. 200097 of 2014

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plaintiff. It is not true to say that the appeal is still pending.

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The land Sy.No.323/1 situated at Aland measuring 3 acres 12 guntas is standing in my name. I do not know the land bearing Sy.No.323/1 situated at Aland is also included in the suit agreement. It is not true to say that I agreed to sell suit property bearing Sy.No.88 situated at Kesaratagi and Sy.No 323/1 situated at Aland for Rs.5,20,000/and received Rs.5,00,000/- and executed Ex.P1 and Ex.P2, the receipt. It is true that plaintiff had raised a loan of Rs.2,00,000/- from a finance and I have stood as surety for the said amount. I do not know whether advocate Sri. Yeshwanth Harsoor has drafted the suit agreement. It is not true to say that I am deposing falsely to deceive the plaintiff.”

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(Emphasis supplied)

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15. The underlined portion of the cross-examination

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of D.W.1 unmistakably establishes that defendant No.1 alienated one item of the suit property, namely Survey No.88/4, during the pendency of the bare suit for injunction. The evidence further discloses that after dismissal of the injunction suit, the plaintiff without any

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undue delay instituted the present suit for specific performance, particularly in view of the categorical denial of the agreement by defendant No.1 in the earlier proceedings. The sequence of events clearly demonstrates that the plaintiff’s conduct was consistent and reactive to the evolving circumstances created by defendant No.1 himself.

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It is true that there may appear to be some degree of laxity on the part of the plaintiff in not issuing a formal legal notice prior to instituting the suit for specific performance. However, such laxity cannot be construed as fatal, especially when it is evident that the same was occasioned by improper legal advice rather than any lack of intention or capacity on the part of the plaintiff to perform her obligations under the contract. The statement of accounts produced at Ex.P10 clearly reveals that the plaintiff had substantial funds amounting to several lakhs

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of rupees in her bank account. In light of these unimpeachable documents and the cogent oral evidence

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let in by the plaintiff, this Court is required to re-examine whether the concurrent findings of the Courts below holding that the plaintiff failed to establish readiness and willingness can be sustained in law.

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A further significant aspect emerges from the cross-examination of D.W.1. It is an admitted fact that the plaintiff’s husband and defendant No.1 were close friends and enjoyed cordial relations. Both had purchased portions of land in Survey No.88/4,while the plaintiff purchased 6 acres, defendant No.1 purchased 3 acres 33 guntas. Under the suit agreement, the plaintiff paid a substantial sum of Rs.5,00,000/- out of the total agreed consideration of Rs.5,25,000/-. Even assuming that the agreement does not specifically apportion the sale consideration between the two survey numbers, if a tentative consideration of Rs.2,50,000/- is taken for Survey No.88/4 alone, it is startling to note that defendant No.1 sold the very same land for a meager consideration of Rs.1,61,000/- after a lapse of two years, under a registered sale deed dated

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17.05.2008 in favour of defendant No.2. Such conduct on

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the part of defendant No.1 is ex facie inequitable and raises serious doubts about his bona fides.

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In his cross-examination, D.W.1 has

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unequivocally admitted that the sale of Survey No.88/4 was effected during the pendency of the bare suit for injunction. Though, strictly speaking, the doctrine of lis pendens under Section 52 of the Transfer of Property Act may not apply in its entirety to the facts of the present case, the underlying equitable principle cannot be completely ignored. Defendant No.1, with full knowledge of the subsisting rights flowing from the agreement of sale, consciously created third-party rights. In these circumstances, this Court has no hesitation in holding that the plaintiff was fully justified in instituting the suit for specific performance immediately after the dismissal of the injunction suit. Having paid a substantial portion of the sale consideration, equity clearly tilts in favour of the plaintiff.

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Defendant No.1 has denied the agreement of

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sale in toto. However, both the Courts below have concurrently held that the plaintiff has succeeded in proving the due execution of the suit agreement and payment of earnest money to the tune of Rs.5,00,000/-. Once the execution of the agreement and payment of almost the entire sale consideration are held proved, this Court is of the considered view that both the Courts below have committed a serious error in refusing to exercise discretion in favour of the plaintiff. The conduct of defendant No.1, which is a vital factor in a suit for specific performance, has not been properly appreciated either by the Trial Court or by the First Appellate Court.

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The finding recorded by the First Appellate Court that the plaintiff ought to have deposited the balance sale consideration of Rs.25,000/- at the time of institution of the suit is also vitiated by perversity. The First Appellate Court, being the final fact-finding authority, has failed to advert to the bank statements produced by

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the plaintiff, which unequivocally establish that she had sufficient funds at her disposal to pay the balance consideration. It is well settled by a catena of decisions of the Hon’ble Supreme Court as well as this Court that readiness and willingness need not necessarily be demonstrated by actual deposit of the balance consideration or by specific pleadings alone. If readiness and willingness can be inferred from the conduct of the agreement holder and supported by documentary evidence showing financial capacity, the Court must assess the totality of the circumstances rather than adopting a hypertechnical approach.

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One more crucial circumstance which cannot be lost sight of is the admitted cordial relationship between defendant No.1 and the plaintiff’s husband. In the normal course of human conduct, and in the context of such a relationship, the plaintiff had no reason to immediately initiate litigation unless defendant No.1 acted in breach of the agreement by attempting to alienate the suit property.

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The fact that the plaintiff first approached the Court seeking protective relief and thereafter sought specific performance further reinforces her bona fides. The concurrent findings of the Courts below on the issue of readiness and willingness, therefore, suffer from perversity and have resulted in grave prejudice to the plaintiff.

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Defendant No.1, having entered into an agreement of sale and during the pendency of the injunction suit, was wholly unjustified in alienating one item of the suit property in favour of defendant No.2. Defendant No.2 has neither chosen to enter the witness box nor made any attempt to establish his bona fides. It is also not his case that he is a bona fide purchaser for value without notice. In the absence of any evidence from defendant No.2, the plaintiff is entitled to the discretionary relief of specific performance. Consequently, the findings recorded by both the Courts below on Issue No.2 are manifestly erroneous and unsustainable in law.

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Accordingly, the substantial questions of law framed by

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this Court are answered in the Negative .

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For the foregoing reasons, this Court proceeds

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to pass the following:

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ORDER

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i. The Regular Second Appeal is allowed.

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ii. The suit filed by the plaintiff in O.S. No.98/2008 stands decreed.

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iii. Defendant Nos.1 and 2 are directed to jointly execute the sale deed in favour of the plaintiff upon receipt of the balance sale consideration of Rs.25,000/-. In the event of their failure to do so, the plaintiff is at liberty to execute the decree in accordance with law.

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iv. Draw Decree accordingly.

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Sd/- (SACHIN SHANKAR MAGADUM) JUDGE

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RSP/SRT List No.: 3 Sl No.: 1 CT:MH

Smt.Bharati W/O Surendra Kathare v. Govind S/O Shivu @ Shivaji Lamani

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Smt.Bharati W/O Surendra Kathare v. Govind S/O Shivu @ Shivaji Lamani

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