IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD DATED THIS THE DAY OF AUGUST 2011 PRESENT THE J-ION’BLE MR JUSTICE V.G.SABHAHTT AND THE HON’BLE MR JUSTICE B MANOHAR REGULAR FiRST APPEAL NO. 1245 of 20061SP) Between: Yallappa Sb. Bharmappa Hudeda, Aged about 52 years. 0cc: Business. R/at H.No.4/4/95/4-4-91, Waddar Oni, Bus Stand Road, Gangavathi, Tq: Gangavathi, Dist: Koppal. Pin-583 227. .. .Appellant (By Sri. B. Sharana Basawa, Advocate) And: Smt. Sharada Bai W/o. Thippanna, Aged about 40 years, 0cc: Household and Teacher,, Behind Mallikarjun Talkies. Near 0.S.B. Road. Gangavathi. Tq: Gangavathi. Dist: Koppal. Pin-583 227. ... Respondent (By Sri.Arvind D. Kulkarni. Advocate for Sri.Ravindra Path. Advocate) This RFA is filed under Section 96 of CPC against the Judgment and Decree dated: 16/03/2006 passed in 0.S.No.42/04 on the file of the Civil Judge (Sr.Dn.) at Gangavathi, decreeing the suit for specific performance of contract. p. 2 This appeal having been heard and reserved and coming on for pronouncement of Judgment this day, B. MANOHAR J.. pronounced the following: JUDGMENT Appellant is the defendant in O.S.No.42/2004, being aggrieved by the judgment and decree dated 16-3-2006 passed by the Civil Judge (Sr.Dn.) at Gangavathi wherein the suit, filed by the plaintiff was decreed directing the defendants to execute the sale deed in favour of the plaintiff, preferred this appeal. 2. The plaintiff filed a suit seeking for specific performance of the contract dated 18-8-2001. In the plaint it is averred that the defendant is the absolute owner in possession of the suit schedule property which is the house property bearing Municipal No.4-4-95/4-4- 91 measuring 30 x 30 having ground. first and second floor situated at Vaddara Oni, Gangavathi Taluk. For his bonafide and legal necessities and for the benefit of the family, the defendant offered to sell the same to the plaintiff for a sale consideration of Rs.5,00,000/- (Rupees Five Lakhs only). The plaintiff agreed for the same, accordingly, they entered into an agreement of sale which was registered on 18-8-2001 and on the said date. an advance sale consideration of Rs.4,75..000/- was paid. The balance sale consideration of Rs.25.000/- will be paid at the time of the registration of the sale deed. Further. the defendant agreed to deliver the actual physical possession on the date of registration of sale deed. The plaintiff was always ready and willing to perform her part of the contract. Many a times, she approached the defendant with balance sale consideration of Rs.25,000/- and requested the defendant to execute the sale deed. In spite of repeated requests and remainders, the defendant went on postponing the execution of registered sale deed on one pretext or the other. In view of that the plaintiff got issued legal notice on 7-8-2004 to the defendant calling upon him to receive the balance sale consideration and to execute the sale deed. In spite of the same, the defendant is not ready and willing to perform his part of the contract. In view of that, the plaintiff has filed the present suit with the above prayer. 4 3. The defendant entered appearance and filed the written statement denying the averments made in the plaint. He has specifically contended that he has never entered into an agreement of sale with the plaintiff in respect of suit house property on the 18-8-2001, the suit filed by the plaintiff is not maintainable either in law or on facts. The agreement of sale produced by the plaintiff is a concocted and the plaintiff is put to strict proof of the same. He also denied the receipt of advance sale consideration of Rs.4,75,000/-. The defendant further contended that he has not received the legal notice issued by the plaintiff. The alleged agreement of sale is nothing but outcome of futile imagination of cunning plaintiff. Theie is no cause of action to file the auit. 4. The defendant further contended that he was in need of a sum of Rs. 1,50.000/- for the family necessities, hence, he requested the plaintiff to lend money. The plaintiff who was working as a Teacher in a Government School, while lending money had put a condition that the house property must be given as surety for the said amount. Accordingly, he has executed the agreement as a surety. The parties to the suit never intended to act under the agreement of sale. The transaction recorded in the document was never intended to be acted upon between the parties, and the said document is a sham. Further, he has mortgaged the house property to the KSFC as security to obtain loan for purchase of the vehicle for his son. The value of the house property is more than Rs. 10.00 lakhs, hence the question of selling the said property for a sum of Rs.5,00,000/- does not arise and sought for dismissal of the suit. 5. On the basis of the pleadings of the parties, the court below framed the following issues: (i) Whether plaintiff proves that the defendant executed registered sale agreement dated 18-08-200 1, agreeing to sell the suit property for a total consideration of Rs.5,00,000/- and received earnest amount of Rs.4,75,000/-? (1 (ii) Whether defendant proves that he obtained loan of Rs.1.50,000/- from the plaintiff and he executed sale agreement under the impression that it was a security for the said loan advanced by the plaintiff? (iii) Whether defendani further proves that there was an oral agreement between the parties that soon Rs. 1,50,000/- is repaid by the defendant the plaintiff has to return the alleged sale agreement? (iv) What reliefs parties are entitled to? (v) What order? 6. The plaintiff in order to prove her case examined herself as P.W. 1 and also examined 3 other vitnesses as P.W.2 to P.W.4 arid got marked the documents as Ex.PI to Ex.P3. The defendant examined himself as D.W. I and got marked the documents as Ex.D I to Ex.D5. The Trial Court after considering the arguments addressed by the parties and on appreciating the oral and documentary evidence let in by the parties held issue .7 No.1 in th affirmative; issue Nos.2 and 3 in the negative and issue No.4 as per the judgment and decree dated 16-3-2006 decreeing the suit filed by the plaintiff and directed the plaintiff to deposit the balance consideration of Rs.25,000/- within 60 days. The defendant was directed to receive the said amount and to execute the regular sale deed in respect of suit schedule property in favour of the plaintiff within 60 days thereafter. Being aggrieved by the judgment and decree dated 16-3-2006 made in O.S.No.42/2004, the defendant preferred this appeal. 7. Sri.B.Sharana Basawa, learned counsel appearing for the appellant contended that the judgment and decree passed by the court below is contrary to law, illegal and perverse and without application of mind. The court below while arbitrarily exercising the discretion provided under Section 20 of the Specific Relief Act, acted contrary to law and the same is liable to be set aside. Further, the plaintiff has failed to prove his readiness and willingness to perform her part of the contract. I-Ic has further contended that the agreement 8’ of sale was executed only as surety for the loan amount of Rs. 1,50,000/- which he had availed from the plaintiff for his family necessities. The parties have never intended to act under the agreement of sale. He contends that the house property is worth more than Rs.10.00.000/- and the agreement of sale cannot be executed for Rs.5,00,000/- and this itself shows that the agreement of sale entered into between the parties is only as surety for the loan amount. This aspect of the matter has been completely overlooked by the court below. 8. Learned counsel for the appellant further contended that the alleged’ agreement of sale was entered into between the parties on 18-8-2001 and the suit came to be filed only on 17-8-2004 just few days prior to the expirv of the limitation period, which shows that the plaintiff was not ready and willing to perform her part of the contract and there is no intention to act upon the agreement of sale. Further, the learned counsel relied upon a judgmeiit of the Honhle Supreme Court in a judgment reported in AIR 1997 SC 2702 in I) the case of TEJRAM s PATIRAMBIIAI. herein it is held that keeping quite for 3 years and thereafter filed suit on the last date of limitation. In those circumstances, the doc’ument purported to be agreement of sale cannot be treated as a sale agreement. Further. 1w also r’‘heci upon the j uclgmrnt reported in AIR 200o SCW 715 (Il.P.PYAREJAN v/s DASAPPA (DEAD) BY LRs AND OTHERS): AIR 1992 SC 20 (SMT.GANGAIIAl v s SMT.CHHABUBAI): 2006 (3) KCCR 1542 (CHANNAYVA AND ANOTHER v/s ANNAPURNA) and contended that the plaintiff is not reacl3 and willing to perform her part of the contract. llence. the judgment and decree passed b the court below is contran to law and the same is liable to be set aside. . On the other 1mm!. Sri.Aravind ftKulkarni. learned counsel appearing for the respondent argued in support of the judgment and decree passed by the court hehi and contended that for the purpose of famil necessities. the respondent had agreed to sell the suit schedule propeit and received the sale consideration of 1 C) Rs.4,75,000/- In spite of repeated requests and reminders, he failed to receive the balance sale consideration of Rs.25,000/- and execute the sale deed. In view of that, the suit has been filed. In the written statement. the respondent has denied the execution of the agreement of sale. However, subsequently. he has given some more explanation that though the agreement of sale was executed on 18-8-2001, the parties were never intended to act upon the said agreement of sale and it is only a surety for the loan amount he has received and it is a sham document. Hence, the conduct of the appellant/defendant does not entitle him for any equitable relief and sought for dismissal of the appeal. 10. We have carefully considered the arguments addressed by the parties and perused the oral and documentary evidence adduced by the parties. 11. Having heard the learned counsel for the parties, the points that arise for our determination in this appeal are: II Whether the plaintiff has proved the execution of agreement of sale dated 18-8-2001 and whether the plaintiff is ready and willing to perform her pan of the contract. (ii) Whether the appellant has made out a case to interfere with the judgment and decree passed by the court below? 12. The plaintiff in her evidence deposed that she was working as a teacher in a Government School. The defendant for his family necessities offered to sell the house property for a sum 9f Rs.5,00,000/- and the plaintiff agreed for the same and paid the advance sale consideration of Rs.4.75.000/ -. Accordingly. the defendant executed a registered agreement of sale on the 18-8-2001 by receiving part of the sale consideration amount in the presence of Registrar and the attesting witnesses. In spite of legal notice. the defendant has not executed the sale deed by receiving the balance sale consideration. In view of that the present suit has been filed. He has produced registered agreement of sale as Ex. P.1, legal notice issued to the 12 defendant as Ex.P.2. In the cross-examination by the defendant, she has deposed that for the purpose of purchasing the suit schedule property, she had sold some of her properties. P.W. 2 and P.W.3 are the attesting witnesses and P.W.4 is the advocate who has drafted the agreement of sale. The part of sale consideration has been paid in the office of the Sub- Registrar in presence of the attesting witnesses. She has denied the suggestion made by the defendant that she was doing money lending business. She has contended that she was working as a Teacher in a Government School and she was not paying any income tax. 13. P.W.2 who is one of the attesting witnesses has deposed that he has signed the agreement of sale and the balance sale consideration has been paid in his presence. He was cross-examined by the defendant. In the cross-examination he has deposed that the plaintiff has paid a sum of Rs.475.000/- to the defendant on 18-8-2001 before the Sub-Registrar. he also went to the sub-Registrar office to sign the agreement of sale as one 4% I’ of the witnesses. P.W.3 who is one of the attesting witnesses in his cross-examination has deposed that he has signed the agreement of sale on 18-8-2001 as one of the witnesses and the sale consideration has been paid in his presence. P.W.4 is an advocate who has drafted the agreement of sale. Tn his evidence he has deposed that the plaintiff and defendant are known to him and on their request, he has prepared the agreement of sale. On 18-8-2001, the agreement of sale was registered before the Sub-Registrar and the defendant has received the advance sale consideration of Rs.4,75,000/- and he has also signed the agreement of sale. 14. On the other hand, the defendant examined himself as D.W. I and contended that he had not agreed to sell the house property for a sale consideration of Rs.5,00,000/- and receivpd the advance sale consideration of Rs.4,75,000/- by executing the agreement of sale. He has taken Rs.1,50,000/- from the plaintiff for family necessities and for the purpose of surety, he had executed the agreement of sale. There is no intention to sell the suit schedule property. It was 4- 14 agreed between the parties that as soon as the defendant repay Rs. 1 ,50.000/-, the plaintiff would return the agreement of sale. He also admitted that he had taken loan of Rs.3,00.000/- by mortgaging the house property to lCSFC for the purpose of purchasing TATA Sumo for his son and the said amount has been repaid subsequently. The agreement of sale is written in English and he does not know the English language. However, he has signed the ‘said document before the sub-Registrar Office. In the cross-examination he has admitted that he signs in English and he is working as a Manager in Sandeep Talkies. He has also produced encumbrance certificate of the said property to show that the said property was mortgaged to the KSFC in the year 1999. He also admitted that he has taken loan of Rs. 1 ,5O,000/- from the plaintiff, however, he has denied receiving of the advance sale consideration of Rs.4,75,000/-. He has also produced Ex.D. 1 to Ex.D.4 to show that hypothecation of the vehicle has been cancelled by the KSFC. 15 15. On perusal of oral and cjocumentary evidence, it is clear that the defendant had executed an agreement of sale in favour of the plaintiff receiving the advance sale consideration of Rs.4,75,000/-. The plaintiff by examining the scribe and attesting witnesses of the agreement of sale proved the execution of the registered agreement of sale. However, the defendant except his assertion no document is produced to disprove his contention that he has not executed any agreement of sale and received the advance amount of Rs.4,75.000/-. The case of the plaintiff is that the defendant had approached the plaintiff offering to sell the house property for his legal necessities. The plaintiff in order to purchase the said house property sold some of her properties with a view to purchase the said house property. Accordingly. a registered agreement of sale was entered into between the parties on 18-8-2001. In view of mortgaging of the said property to the KSFC. the sale deed was not executed, though 95% of the sale consideration has been paid on 18-8-2001. The mortgaged property was released from KSFC in the p. 16 month of January 2003. In spite of release of the said property from the KSFC, the defendant failed to execute the sale deed in favour of the plaintiff in spite of issuance of legal notice dated 7-8-2004. In view of that, the plaintiff waked till the last date and filed the suit before the expiry of the last date. There is no infirmity or irregularity in the action of the plaintiff. The plaintiff with a fond hope that after getting released the property from KSFC the defendant would execute the sale deed and kept quite till the expiry of the last date. That cannot be termed that the plaintiff is not ready and willing to perform her part of the contract. Admittedly, the plaintiff is School Teacher and with a fond hope to purchase the house of her own. she had sold her other properties and paid the substantial sale consideration in the year 2001 itself. The defendant dragged on the matter and in the written statement he has denied the execution of registered agreement of sale in favour of the plaintiff. The conduct of the defendant shows that he is not ready to perform his part of the contract. The court below after considering the oral arid. documentary p 17, evidence held that the defendant had executed the registered agreement of sale on 18-8-200 1 and held that the plaintiff is always ready and willing to perform her part of the contract, however, the defendant is not ready and there is no oral agreement between the parties that as soon as Rs. 1.50,000/- is repaid by the defendant, the plaintiff has to return the’ said agreement of sale. Further, the judgments relied upon by the learned counsel for the appellant are not applicable to the facts of the present case. 16. On appreciation of the oral and documentary evidence let in by the parties, we find that there is no infirmity or illegality in the judgment and decree passed by the court below. Accordingly, we hold that the plaintiff is ready and willing to perform her part of the contract and defendant is not ready. Further, the plaintiff has proved the execution of registered agreement of sale on 18-8-2001 agreeing to purchase the property for Rs.5.00,000/ - by paving earnest money of Rs.4,75,000/-. k Ix 1 7. The appellant has not made out a CSC w interfere with the judgment and decree passed by the couri below. ihe conduct of the defendant does not entitle him to claim any relief under Section 20 of the Specific Relief Act. Point Nos. I and 2 are answered accordingly. Hence. we pass the following: C) R D El R The appeal is dismissed. Parties to bear their own costs. Sd! ]tJDG Sd/ JUDGE