Dismissed¶99

Manjunatha M v. Omkar Patel

Karnataka HC4 Feb 2026RFA/1233/2024

Case brief

AI extract

What is this about?

Karnataka HC, RFA No. 1233 of 2024 (MON), decided 04.02.2026 by Justice Sachin Shankar Magadum: appeal by defendant against decree for interest on refunded advance sale consideration of Rs.25,00,000/-; hand-loan defence in written statement contradicted by defendant's appellate admission of oral agreement for sale; equity/unjust-enrichment reasoning on retention of advance amid market escalation; defendant led no rebuttal evidence; suit confined to interest held maintainable; appeal dismissed, upholding Rs.10,00,000/- with 6% per annum award. Keywords: Section 96 CPC; advance sale consideration; interest on refund; hand loan; volte-face; unjust enrichment; O.S.No.805/2023.

What did the court decide?

None to the appellant; the appeal was dismissed as devoid of merits, along with pending applications, if any, leaving the Trial Court's decree intact.

Manjunatha M Vs Omkar Patel — Karnataka HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

None to the appellant; the appeal was dismissed as devoid of merits, along with pending applications, if any, leaving the Trial Court's decree intact.

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Issue for consideration

Whether the judgment and decree of the Trial Court awarding a sum of Rs.10,00,000/- on the advance sale consideration of Rs.25,00,000/- suffers from perversity or legal infirmity? +1 more

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Court's answer

Point No.(i) is answered in the negative: this Court finds no perversity or illegality in the findings recorded by the Trial Court on Issue Nos.1 and 3, which were answered in the affirmative and against the defendant; the findings are based on proper appreciation of pleadings, evidence and conduct of the parties and do not warrant interference.

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Ratio / Principle

On examination of paragraph No.11 of the grounds urged in the appeal memo, the defendant has candidly admitted that there was an oral agreement for sale between the parties; this admission, made for the first time before the appellate Court, is wholly inconsistent with the written-statement defence that the amount was a hand loan, and the volte-face seriously undermines the credibility of his defence while corroborating the plaintiff's version.

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Key takeaways

A conjoint reading of the pleadings before the Trial Court and the appeal grounds demonstrates that the defendant acknowledged that the Rs.25,00,000/- received by him in 2017 was indeed towards advance sale consideration, marking a complete departure from the stand taken in the written statement.ratio¶67
In real estate transactions where a prospective purchaser parts with a substantial advance and the transaction does not culminate due to the vendor's fault, Courts must bear in mind equity: simultaneous retention of the advance sale consideration while the owner enjoys escalation in market value results in unjust enrichment and confers a double benefit; the depreciation in the monetary value of the advance over time is relevant while adjudicating a claim for interest.ratio¶81

Detailed headnote1 paragraphs

Regular First Appeal (Money) under Section 96 CPC by the defendant against the judgment and decree dated 29.01.2024 in O.S.No.805/2023 (LIX Additional City Civil and Sessions Judge, Bengaluru), whereby the plaintiff's suit for recovery of Rs.24,00,000/- as interest on the refunded advance of Rs.25,00,000/- was partly decreed for Rs.10,00,000/- with interest at 6% per annum. The plaintiff had paid Rs.25,00,000/- in December 2017 as advance towards an orally agreed sale of property No.3421/A, RPC Layout, Bengaluru (agreed consideration Rs.3,15,00,000/-); the defendant, in his written statement, denied the sale transaction and termed the payment a hand loan, but admitted in paragraph 11 of the appeal memo before the appellate Court that there was an oral agreement for sale and that the 2017 payment was advance sale consideration. The defendant conveyed the property to a third party in 2022 and refunded only the principal during February-April 2022 after legal notice, retaining the money for nearly five years without interest, and led no evidence. Holding that retention of the advance while enjoying market-value escalation amounts to unjust enrichment conferring a double benefit, and that a defendant who enjoys the advance for nearly five years cannot escape his obligation to compensate by way of interest, the Court found no perversity or illegality in the Trial Court's findings on Issue Nos.1 and 3, answered Point (i) in the negative and dismissed the appeal.

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NC: 2026:KHC:6351 RFA No. 1233 of 2024

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 4^TH DAY OF FEBRUARY, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM REGULAR FIRST APPEAL NO. 1233 OF 2024 (MON)

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BETWEEN:

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MANJUNATHA .M

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SON OF SRI MAHADEVAIAH AGED ABOUT 45 YEARS NOW RESIDING AT NO. 105, 2^ND MAIN NAGARABHAVI 2^ND STAGE NGEF LAYOUT, NAGARABHAVI BANGALORE - 560 072.

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…APPELLANT

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(BY SRI. PRADEEP C. YADAV, ADVOCATE)

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AND:

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OMKAR PATEL

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Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA

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SON OF LATE SIDDARAMAPPA AGED ABOUT 46 YEARS RESIDING AT 3417/15, OPP TO MARUTHI MEDICALS, ATTIGUPPE METRO STATION, VIJAYANAGAR BANGALORE - 560 040.

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…RESPONDENT

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(BY SRI. KRISHNA S. VYAS, ADVOCATE)

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THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 29.01.2024 PASSED IN OS.NO.805/2023 ON THE FILE OF THE LIX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, DECREEING THE SUIT FOR RECOVER OF MONEY.

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NC: 2026:KHC:6351 RFA No. 1233 of 2024

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HC-KAR

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, 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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The captioned appeal is filed by the appellant - defendant assailing the judgment and decree dated 29.01.2024 passed in O.S.No.805/2023 on the file of the LIX Additional City Civil and Sessions Judge, Bangalore (CCH-60).

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2. For the sake of brevity, the ranks of the parties

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are referred to as per their rankings before the Trial Court.

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Facts leading to the case are as under;

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The plaintiff instituted the present suit seeking recovery of a sum of Rs.24,00,000/-, being the interest claimed on the principal amount of Rs.25,00,000/- paid by him, calculated at the rate of 24% per annum from time to time.

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HC-KAR

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It is the specific case of the plaintiff that the defendant, claiming to be the absolute owner of the property bearing No.3421/A, AAA Municipal No.9, situated on 30 Feet Road, Vijayanagar Main Road, RPC Layout, Bengaluru, offered to sell the said property to the plaintiff for a total sale consideration of Rs.3,15,00,000/-. Pursuant thereto, the plaintiff paid an advance sale consideration of Rs.25,00,000/- to the defendant through a cheque dated 22.12.2017 drawn on M/s. Shymrao Vittal Co-operative Bank. The plaintiff has averred that despite receipt of a substantial amount, the defendant failed to execute a formal agreement of sale. Subsequently, the plaintiff came

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to know that the defendant, without honouring the oral understanding, had alienated the property in favour of a third party. Consequently, the plaintiff demanded refund of the advance amount.

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It is further pleaded that despite repeated

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demands, the defendant refunded only the principal amount of Rs.25,00,000/- and that too after issuance of a

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HC-KAR

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legal notice, by making payments during the months of February, March and April 2022. According to the plaintiff, no interest was paid on the said amount, though the defendant had retained the money since December 2017. As the defendant allegedly refused to pay interest, the plaintiff was constrained to institute the present suit.

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Upon service of summons, the defendant entered appearance and filed a written statement, wherein the averments made in the plaint were stoutly denied.

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The defendant on the contrary claimed that he had availed hand loan and therefore, seriously disputed the agreed sale transaction between the plaintiff and the defendant. Defendant on the contrary contended that he was in urgent needs of funds to the tune of Rs.25 lakhs and therefore approached plaintiff seeking an assistance of hand loan on 22.12.2017. Defendant also disputed the alleged sale transaction in the form on agreement for sale and hence, sought for dismissal of the suit.

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NC: 2026:KHC:6351 RFA No. 1233 of 2024

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HC-KAR

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In order to substantiate his claim, the plaintiff examined himself as P.W.1 and produced five documents, which were marked as Exs.P-1 to P-5. Though the defendant filed a written statement, he did not choose to lead either oral or documentary evidence.

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The Trial Court, upon appreciation of the oral and documentary evidence on record, partly decreed the suit, awarding a sum of Rs.10,00,000/- with interest at the rate of 6% per annum.

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Assailing the said judgment and decree, the learned counsel appearing for the defendant vehemently contended that the plaintiff had voluntarily entered into an agreement dated 17.01.2022, under which the plaintiff had expressly waived his claim for interest. It is contended that acting on such waiver, the defendant refunded the entire principal amount of Rs.25,00,000/-. Having accepted the said amount, the plaintiff, according to the defendant, has filed a frivolous suit seeking interest. It is

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NC: 2026:KHC:6351 RFA No. 1233 of 2024

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HC-KAR

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further urged that the said document is not disputed by the plaintiff and therefore, this Court, in exercise of its appellate jurisdiction, ought to advert to the said document to adjudicate the real controversy between the parties.

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Per-contra , the learned counsel for the plaintiff, while supporting the judgment and decree of the Trial Court, contended that the defendant has, for the first time, set up the plea of an agreement dated 17.01.2022. It is submitted that such a plea does not find place in the written statement and is clearly an afterthought. In the absence of any amendment to the written statement, which is impermissible at the appellate stage, the defendant cannot be permitted to raise such a contention, as it would seriously prejudice the plaintiff.

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This Court has heard the learned counsel appearing for both parties and has carefully examined the impugned judgment and decree passed by the Trial Court.

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NC: 2026:KHC:6351 RFA No. 1233 of 2024

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HC-KAR

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This Court has also meticulously perused the pleadings

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and the oral and documentary evidence available on record.

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The following points arise for consideration:

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(i) Whether the judgment and decree of the Trial Court awarding a sum of Rs.10,00,000/on the advance sale consideration of Rs.25,00,000/- suffers from perversity or legal infirmity?

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(ii) What order?

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Findings on point No.(i) :-

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The defendant, upon receipt of summons, filed his written statement and categorically disputed the existence of any agreed sale transaction between himself and the plaintiff. Though the defendant admitted receipt of a sum of Rs.25,00,000/-, his consistent stand before the Trial Court was that the said amount was received towards a hand loan and not as advance sale consideration.

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HC-KAR

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However, on a careful examination of paragraph No.11 of the grounds urged in the appeal memo, this Court finds that the defendant has candidly admitted that there was an oral agreement for sale between the plaintiff and the defendant. This admission, made for the first time before the appellate Court, is wholly inconsistent with the defence taken in the written statement.

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A conjoint reading of the pleadings before the Trial Court and the grounds urged in the appeal would unmistakably demonstrate that the defendant has now acknowledged that the amount of Rs.25,00,000/- received by him in the year 2017 was indeed towards advance sale consideration. This admission marks a complete departure from the stand taken in the written statement, wherein the defendant had stoutly denied any sale transaction and attempted to project the transaction as a hand loan. Such a volte-face in the stand of the defendant seriously undermines the credibility of his defence and lends corroboration to the version put forth by the plaintiff.

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NC: 2026:KHC:6351 RFA No. 1233 of 2024

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HC-KAR

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The plaintiff, in the plaint, has specifically

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pleaded that the oral agreement for sale was frustrated on account of the breach committed by the defendant. It is the consistent case of the plaintiff that despite having received a substantial sum of Rs.25,00,000/- as advance sale consideration in the year 2017, the defendant proceeded to create third-party rights and ultimately conveyed the property in favour of a third party in the year 2022. This conduct of the defendant, in alienating the very property which was orally agreed to be sold in favour of the plaintiff, assumes significance while appreciating the conduct of the parties and determining whether the plaintiff’s claim for interest is justified.

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The defendant has candidly admitted receipt of

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Rs.25,00,000/- in the year 2017. It is not in dispute that the said amount remained with the defendant for nearly five years. During this interregnum, the defendant not only retained the advance amount but also proceeded to sell the property in favour of a third party. Despite the

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NC: 2026:KHC:6351 RFA No. 1233 of 2024

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HC-KAR

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plaintiff specifically pleading breach of the oral agreement

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and unjust retention of money, the defendant did not choose to enter the witness box nor did he lead any rebuttal evidence to controvert these material averments.

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The absence of rebuttal evidence assumes relevance, particularly when the facts pleaded by the plaintiff stood unrebutted.

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In real estate transactions, where a prospective purchaser parts with a substantial amount towards advance sale consideration and the transaction does not culminate in an absolute conveyance due to the fault of the vendor, the Courts are required to bear in mind the principles of equity. While the owner retains the property and enjoys the escalation in its market value over a period of time, simultaneous retention of the advance sale consideration would result in unjust enrichment and confer

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a double benefit upon the owner. In the present case, the defendant retained the money till 2022. The monetary value of Rs.25,00,000/- paid in the year 2017 would have

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HC-KAR

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undoubtedly suffered depreciation by the year 2022. This economic reality cannot be lost sight of while adjudicating a claim for interest.

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The fact that the defendant, after receiving the advance sale consideration, sold the very same property to a third party, thereby scuttling the oral contract, is clearly borne out from the tenor of the grounds urged in paragraph No.11 of the appeal memo. The said admission fortifies the plaintiff’s case that the oral sale transaction did not fructify on account of the defendant’s conduct and that the defendant was obligated to refund the advance sale consideration of Rs.25,00,000/- received by him in the year 2017, albeit after an inordinate delay of nearly five years.

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Having enjoyed the benefit of Rs.25,00,000/- for a considerable period of nearly five years, the defendant cannot escape his obligation to compensate the plaintiff by way of interest. The suit instituted by the plaintiff was

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HC-KAR

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confined only to the recovery of interest on the principal amount already refunded and was therefore clearly maintainable. The Trial Court has meticulously examined these aspects and has rightly taken note of the fact that the defendant, despite filing a written statement, did not choose to substantiate his defence by leading oral or documentary evidence.

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In the above circumstances, this Court finds no perversity or illegality in the findings recorded by the Trial Court on Issue Nos.1 and 3, which have been answered in the affirmative and against the defendant. The said findings are based on proper appreciation of pleadings, evidence, and the conduct of the parties and do not warrant interference by this Court. Accordingly, Point No.(i) is answered in the "Negative".

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