1: IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD DATED THIS THE 23R DAY OF AUGUST, 2011 PRESENT THE HON’BLE MR. JUSTICE V.G.SABHAHIT AND THE HON’BLE MR. JUSTICE B.MANOHAR R. F .A.NOJQQJfJ A/w. LA. No.1/2006 BETWEEN: ANNAPART1 KARUNA PRASAD / 0 SATYANARAVAN AGE: 35 YEARS. 0CC: AGRICULTURE R/ 0 MUSTURA DAGGI CAMP TALUK GANGAVATHP583 227, DIST: KOPPAL PPE[ LANT COMMON (By Sri. V.RDATAR ADV.) AND: YEGULLA SHESITAGIRI RAO S/C GANGARAJU AGE: 46 YEARS. 0CC: AGRICULTURE RIO MUSTLRM)GGI C MP TALUK GANGAVATHI-583 227. DIST: ROPPAL RESPONDENT [COMMON[ (By Sri, B.SHARANA BASAWA ADV.i THIS REA IS FILED U/S Oh OF CPC AGAINST THE JLDGEMflH ND DCREL DT 005 200h PSED N 05 NO 73 2uO UN PHI PILE UP ]HE yT\IL II DOP R UN GANGAVATHI, DECREEING THE SUIT FOR SPECI FTC PERFORMANCE. IA,1/06 IS PILED U/O 38 RULE 3 OP CPC R/ W SEC 151 PRAYING TO SEND END. 18 FOR HANDWRITING EXPERTS OPINION TO ASCERFAI ‘\HEPHR THU \\RIFTN( IN L\ I PRODUCED BY APPELLANT/ DEFENDANT IN TRIAL COURT PERINS TO THE RAND\\RIFING OF RESPONDENT PL\INFlrf IN THE ENDS OP JUSTICE AND EQUITY. P.T.O. .0. • S • THIS RFA A/w. IA. 1/06 COMING ON FOR FINAL HEARING. THIS DAY. V.G.SABHAHIT, J. DELIVERED THE FOLLOWING: JUDGMENT This appeal iS filed by the defendant in O.S. No.73/2004 on the file of the Civil Judge (Sr. Dnj. Gangavathi, being aggrieved by the judgment and decree dated 10.08.2006 wherein the suit filed by the respondent herein, the plaintiff before the trial court, for specific performance has been decreed. 2. The material facts leading up to this appeal with reference to the ranks of the parties before the trial court are as follows: The plaintiff has filed 0.5. No.73/2004 seeking for specific performance of agreement of sale dated 15.12.2001 and for a direction to the defendant to hand over the possession of the suit schedule property by executing the sale deed by receiving the balance consideration amount of Rs.50,000/- or in the alternative. P.T.O. •2. • • Rs.4,00,000/ - with interest thereon at 18% per annum pendente-lite and future, and for costs. 3. It is averred in the plaint that the defendant, who is the owner of Survey No.235/A-I of Mustur Village measuring 4 acres as per the description of boundary given in the schedule, agreed to sell the said property to the plaintiff for a consideration of Rs.4,50,000/- and received the earnest money of Rs.4,00,000/- on 15.12.2001 and executed a registered agreement of sale. The balance consideration of Rs.50,000/- was to be paid at the time of execution of the sale deed. The plaintiff was always ready and illing to perform his part of the contract. However, the defendant issued a notice to the plaintiff on 25.11.2004. Despite the request made by the plaintiff earlier to execute the sale deed by receiving the balance consideration of Rs.50,000/-, the defendant denied the agreement of sale in the reply to the said notice and contended that the said registered document was P.T.O. .a. • —r . executed by him on misrepresentation of the plaintiff and is totally false and absurd. Therefore, the suit is filed for the above said reliefs. 4. The suit was resisted by the defendant denying the averments made in the plaint regarding the execution of the agreement of sale dated 15.12.2001 and that the defendant has received a sum of Rs.4,00,000/- towards the consideration amount on 15.12.2001. The averment made in the plaint that the plaintiff is ready and willing to perform his pan of the contract is also denied and averred that the plaintiff is not entitled to discretionary remedy of specific performance and it was contended by the defendant that he had taken hand-loan from the plaiutiff on various dates and by way of security, the agreement of sale was executed as the plaintiff misrepresented that it would be for Rs.2,00,000/- that security for repayment of loan which the defendant has borrowed. The defendant has agreed to pay interest at 12% per annum on the said P.T.O. :5: amount of Rs. I J I ,500/ - which had been borrowed by the defendant from the plaintiff and the agreement is concocted and therefore, the suit of the plaintiff is liab’e to he dismissed. 5. Having regard to the above said pleadings, the following issues were framed by the trial court: (i) Whether the plaintiff proves that the defendant has agreed to sell the suit property for Rs.4.5O.0OO/? (ii) Whether the plaintiff proves that he has paid advance sale consideration of Rs.4.00000/- on 15122001? (iii) Whether the plaintiff proves that he is always ready and willing to perform his part of contract? (iv) Whether defendant proves that he has executed the agreement as a security for the loan of Rs,1 71 .50O!? (v) Whether defendant proves that the P.T.O. :6: plaintiff is a money lender? (vi) What relief is plaintiff entitled? vii) What order? 6. On behalf of the plaintiff, he examined himself as PW-1 and also examined PW-2, the attestor to the agreement of sale—Ex.P: I and got marked documents Exs.P- 1 to 5. On behalf of the defendant, he examined himself as DW-1 and got marked Exs.D- 1 to 19. 7. The trial court after considering the contentions of the learned counsel appearing for the parties and appreciating the oral and documentary evidence on record, by its judgment dated 10.08.2006 answered the above issues as follows: Issue No.1: In the affirmative; Issue No.2: In the affirmative; Issue No.3: In the affirmative; Issue No.4: In the negative; P.T.O. yt :7: Issue No.5: In the negative; Issue No.6: As per the final order; Issue No.7: As per the final order; 8. Being aggrieved by the above said judgment and decree, decreeing the suit of the respondent/plaintiff for specific performance of agreement of sale and to execute a regular sale deed by receiving the balance consideration of Rs.50,000/- within 60 days from the date of receipt of said amount, the defendant is in appeal before this Court. 9. During the pendency of the appeal. an application has been filed under Order XLI Rule 27 of CPC for sending the documents Exs.D- 18 & 19 to the finger print experts to find out as to whether the said documents were in the hand-writing of the plaintiff to substantiatE the contention that the plaintiff was doing money lending business. 10. We have heard the learned counsel appearing for the appellant and the learned counsel appearing for P.T.O. :8: the respondent, on the application filed under Order XLI Rule 27 CPC and also on the merits of the appeal. 11. Learned counsel appearing for the appellant/defendant submitted that he would confine his arguments to the contention that the trial court has not at all considered the discretion to be exercised under Section 20 of the Specific Relief Act, 1963 [herein after referred as ‘the Act’ for shorti. He submits that even if, mere fact that the agreement of sale has been proved and receipt of advance amount of Rs.4,00,000/- out of sale consideration of Rs.4,50,000/- has also been proved, would not by itself enable the plaintiff to a decree for specific performance and there is a prayer in the alternative made in the suit itself seeking for refund of Rs.4,00,000/- with interest at 18% per annum and the trial court has not at all considered the said fact as to whether it is a fit case for decreeing the suit for specific P.T.O. • • • . performance by not exercising discretion under Section 20 of the Act. 12. He further submitted that the material on record ou1d clearly sho that the possession of the land is continued to be with the defendant/appellant he’rt. in and the value of the property has considerably gone up. the agreement of sale was on 15.12.2001. Thc material on record would show that the appellant does not ow n any other properties and plaintiff has not produced any material on record to show that the appellant herein owns any other property. On the other hand, it is elicited in the cross-examination of PW- 1: the plaintiff, that he owns 10 acres of land in the name of his wife and therefore. great hardship would be caused to the defendant if the suit for specific performance is decreed. Further. it is submitted that the plaintiff himself has sought for alternative prayer of refund of the earnest money with interest at 18’ n per P.T.O. • In . • aw • annum and having regard to the aboe said facts. the alternative prayer may be granted. 13. Tn view of the above said submissions. se hold that the application for referring Exs.D 18 and 19 to experts opinion does not survive for consideration, as the appellant has confined his arguments regarding exercisL of discretion bs the trial court under Section 20 of the Act and therefore, the said application is disposed of as having become infructuous. 14. The learned counsel appearing for the respondent/plaintiff submitted that there is no averment made in the written statement to make out a ground for not granting the relief of specific performance. When the agreement of sale has been proved and the plaintiff has also proved the receipt of Rs.4,00,000/ as advance amount, out of sale consideration amount of Rs.4,50,000/ , his readiness and illingness to pay the balance consideration amount of Rs.50,000 - has been P.T.O. 11 rightly affirmed by the trial court and once, the agreement is proved, the plaintiff is entitled to specific performance unless a ground is made out under Section 20 of the Act for denying the said relief of specific performance and granting the alternative prayer for refund of earnest amount. However, it is submitted that if the Court comes to the conclusion to grant alternative prayer sought for- by the plaintiff in the suit for refund of Rs.4.00.000/—. same with interest at I 8° per annum may be awarded as claimed in the plaint and plaintiff may also be awarded cost in addition to the refund of amount as awarded by the trial court in the impugned judgment and decree. 15. Having regard to the aforesaid contentions urged by the learned counsel appearing for the parties. the points that arise for our consideration are: (I) Whether the trial court having held that the agreement of sale has been proved, as the defendant has received advance amount of P.T.O. n 12: Rs.4.00.000I- from the plaintiff out of the sale consideration of Rs.4.50,000l- on 15.12.2001, was justified in decreeing the suit for specific performance, without considering as to whether the defendant has made out a ground for denying the relief of specific performance or to grant alternative prayer for refund of earnest amount as sought for in the suit? (ii) What order? 16. We answer the above points as follows: Point No.1: The findings of the trial court decreeing the suit for specific performance is liable to be set aside and the plaintiff is entitled to alternative prayer of refund of earnest amount of Rs.4,00,000I- with interest at 18% per annum from the date of payment i.e., from 15.12.2001 till the date of realisation, along with the cost awarded by the trial court; Point No.2: As per the final order. P.T.O. 1 :13: For the following reasons: REASONS 17. POINT No.1:- We have given careful consideration to the contentions urged by the learned counsel appearing for the parties and scrutinised the material on record. 18. The material on record would clearly show that, in the plaint itself; the plaintiff has sought for specific performance of the agreement of sale or in the alternative for refund of Rs.4.OO.000/- with interest at 18% per annum from the date of payment of the amount till the date of realisation. 19. The trial court though has framed Issue No.6 as to what reliefs the plaintiff is entitled, has not at all discussed on the said issue and in view of the findings on Issue Nos. I to 3 has held that the plaintiff is entitled to specific performance of agreement of sale dated P.T.O. :14: 15.12.200 1 and accordingly, decreed the suit. The trial court has not at all considered as to whether any ground was made out having regard to the material on record that the suit for specific performance should not be granted b exercising the discretion under Section 20 of the Act and whether the alternative prayer for refund of the earnest money may be granted. 20. In view of the provisions of Section 20 of the Act, it is well-settled that mere fact that the agreement of sale has been proved and it will be lawful to decree the suit for specific performance, the Court is not bound to grant the relief of specific performance and the Court may exercise discretion in refusing the relief of specific performance under the circumstances mentioned under Section 20(2) of the Act. In view of the explanation (1) to Section 20 of the Act, it is clear that mere fact that there is raise in the value of the property would not itself be a ground to deny the specific performance. However, the fact that where the P.T.O. :15: performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff, the Court can deny the specific performance under Section 20(2)(b) of the Act. 21. We have considered the evidence adduced by the parties with regard to the above said contentions urged by the learned counsel appearing for the parties in the present case. 22. It is clear from the agreement of sale that what was agreed to be sold by the defendant to the plaintiff was 4 acres of land in Survey No.235/A-i situtated in Mastur Village in Gangavathi Taluk of Koppal District. The consideration amount agreed for sale of schedule property was Rs.4,50,000/- and a sum of Rs.4,00.000/- was received on the date of agreement i.e., on 15.12.2001 as earnest money and a time of three years was fixed for execution of the sale deed. P.T.O. 16 23. It is elicited in the crossexamination of PW I: the plaintiff, that he owns 10 acres of land in his own name and also 10 acres of land in the name of his wife and that he is the owner of the neighboring land belonging to the defendant which is the suit schedule land. There is no merit in the contention of the learned counsel appearing for the respondent/plaintiff that there is no averment in the written statement that discretionary power should be exercised for grant of alternative prayer as it is clearly averred in the paragraphs 3 and -1 of the written statement that the plaintiff is not entitled for discretionary remedy of specific performance and the plaintiff has filed the suit for specific performance which is discretionary one and no ground is made out for grant of such relief and the plaintiff is not entitled to discretionary relief of specific performance of contract and the plaintiff is put to strict proof of the same. Therefore, there is averment in the written statement that the plaintiff is not P.T.O. p :17: entitled to discretionary relief of specific performance and we have already referred to the fact elicited in the cross- examination of PW- I regarding the extent of properties held by the plaintiff. 24. The material on record would further show that the possession of the property remained with the defendant which is not handed over to the plaintiff though he has paid substantial amount of Rs.4,00,000/- as advance amount out of Rs.4,50,000/-, the consideration amount agreed to between the parties for the sale of the suit schedule property and the plaintiff has not adduced any evidence to show that apart from the schedule property, the defendant owns any other property. 25. The agreement of sale is dated 15.12.2001 and though the fact that there is raise in the value of the property, the same would not be a ground by itself to deny the specific performance. However, if there is any other ground, the said ground of raise in the value of the P.T.O. :18: property would also be taken into account, mere inadequacy of consideration amount would not be the ‘Unfair advantage’ within the meaning of Clause (a) or ‘Hardship’ within the meaning of Clause (b) of Section 20(2) of the Act 26. Having regard to the totality of the above said circumstances, we hold that in the present case though the plaintiff has proved the agreement of sale executed by the defendant and payment of earnest amount of Rs.4,00,000/- to the defendant on 15.12.2001, having regard to the fact that the defendant would be put to hardship and no such hardship would be caused to the plaintiff having regard to the above said facts of the case, by exercising discretion under Section 20(2) of the Act, we hold that the plaintiff is entitled to alternative prayer of relief of refund of the earnest money of Rs.4,00,000/- with interest at 18% per annum and also costs awarded by the trial court as sought for in the suit. However, the P.T.O. 19 defendant has to be granted time to pay the earnest money of Rs.4,00,000/ with interest at I per annum from 15.12.2001 till the date of realisation within a period of four months in two installments of Rs.2.00.000/- each with proportionate interest and charge is to be created on the schedule property, with liberty to the plaintiff to sell the property and realise the amount due to be paid by the defendant if the earnest money is not refunded within the time granted bvthis Court. 27, Accordingly, we answer the point for determination and pass the following order: ORDER (I) The appeal is allowed in part: (ii) The judgment and decree passed by the Civil Judge (Sr.Dn ) at Gangavathi in OS. No73!2004 dated 10.052006 decreeing the suit of the plaintiff for specific performance is set aside: P.T.O. ( :20: (iii) The suit of the plaintiff seeking specific performance of the agreement of sale is dismissed and it is ordered that the plaintiff I respondent herein is entitled to refund of the earnest money of Rs.4,00,000I- with interest at 18% per annum from the date of payment i.e.. from 15.12.2001 till the date of realisation along with costs awarded by the trial court; (iv) The refund shall be made by making payment of Rs.2,00,000/- with proportionate interest within two months from today and the balance of Rs.2.O0,000I- with proportionate interest and costs shall be made within further period of two months thereafter: (v) Charge is created on the schedule property so that he defendant should not alienate the property and P.T.O. 21 create any third party right and if there is default on the part of the defendant in refunding the amount. the plaintiff is entitled to sell the suit schedule property and realise the amount to which he is entitled: vi) It is made clear that under no circumstances, no further extension of time would be granted for payment: (vii) In the case of default in refunding the amount, it is open to the plaintiff I respondent herein to exercise charge and sell the suit property and realise the amount due to be paid by the defendant to the plaintiff. Sd/a 3UDGE Sd/ RIKN/- JUDGE