Case: P.S. Ranakrishna Reddy Vs. M.K.Bhagyalakshmi

2. Defendant No. 1 in the suit is Appellant before us. He was admittedly owner of a residential house admeasuring 40 ft. x 30 ft bearing No. 148 (New Plot No. 78), 8th Cross, N.R. Colony, Bangalore. Respondent No. 1 has been in possession of the suit property as a tenant on a monthly rent of Rs.. The appellant admittedly had taken loan from Respondent No. 1 herein from time to time, the details whereof are as under:3. Admittedly, the parties entered into an agreement for sale on 11.05.1979. The aforementioned sum of Rs. 15,000/received by the appellant was treated to be the amount of advance paid out of the amount of consideration fixed in the said agreement of sale i.e. Rs.. The relevant terms of the said agreement are as under:Whereas the first party is the absolute owner of house bearing No. 148, 8th cross N.R. colony,9 more fully described in the schedule hereunder, having acquired the same under registered gift deed, executed by Mrs. B.N. Vijaya DevaWhereas the second party has offered to buy and the first party has agreed to sell to the second party the schedule property for a sum of Rs. 45,000/(Rupees fourty five thousand only.)The first party hereby agreed to sell the schedule property to the second party on the following terms and conditionsa) A sum of Rs. 15,000/(Rupees fifteen thousand only) has been paid this day by the second party to the first party which he hereby acknowledges out of the said price of Rupees Forty Five thousandb) A further sum of Rs. 5,000/c) The remaining balance of the consideration for the sale, i.e., Rs. 25,000/(Rupees twenty five thousand only) shall be paid by the second party to the first party within five years from this dateOn payment of the full consideration of Rs. 45,000/to the first party by the second party in the manner aforesaid the first party shall execute a registered deed of the sale in favour of the second party conveying the schedule property to the second party. The expenses for conveyance for stamp and registration shall be borne by the second party only but the first party shall apply to the competent authorities for permission to sell the property to the second party and take other steps necessary for the purposeThe first party shall notify the tenants in the property of the fact of sale at the time the sale deed is executed in the manner mentioned above and call upon them to vacate the property and render all assistance and help to the second party to obtain in vacant possession of the schedule propertyIn case the first party shall commit breach of the agreement, he shall, besides refunding the sum he has received under this agreement, to the second party, shall in addition pay a sum of rupees ten thousand as damages. In case the second party commits breach of this agreement she shall forfeit a sum of Rs. ten thousand out of the amounts paid4. Although a period of five years was fixed for execution of the sale deed on payment of the balance sum, admittedly, the appellant herein has received a further sum of Rs. 5,000/from Respondent No. 15. It is furthermore not in dispute that the respondents served a notice upon the appellant on or before 29.5.1981 alleging that he had been making attempts to sell the property to third parties6. Appellant was called upon to execute a registered deed of sale on receipt of the balance amount and as he did not agree thereto, the respondent No. 1 filed a suit for specific performance of the said agreement of sale dated 11.05.19797. The said suit was decreed by the learned Trial Judge by a judgment and decree dated 05.04.1989. A first appeal preferred there against by the appellant has been dismissed by the High Court by reason of the impugned judgment.

Court's reasoning:
15. The purported default clause, to which our attention has been drawn by Mr. Chandrashekhar, does not lead to the conclusion that the same was a contract of loan. By reason thereof, the respective liabilities of the parties were fixed. In the event, provisions of the said contract were breached, the damage which might have been suffered by one party by reason of act of omission or commission on the part of the other in the matter of performance of the terms and conditions thereof had been quantified. The quantum of damages fixed therein was the same for both the parties. The submission of Mr. Chandrashekhar that in view of the fact that parties had agreed that in the event of breach on the part of the appellant, the respondent would be entitled to claim damages for a sum of Rs. 10,000/only and, thus, the said agreement for sale was not meant to be acted upon cannot be accepted. If the said contention is accepted, the damages quantified in the event of any breach on the part of Respondent No. 1 cannot be explained. It is clear that in the event of commission of any breach on the part of respondent, the appellant was entitled to forfeit the entire amount of advance. The very fact that the parties intentionally incorporated such default clause clearly goes to show that they intended to lay down their rights and obligations under the contract explicitly. They, therefore, knew the terms thereof. They understood the same. There is no uncertainty or vagueness therein18. The contention of the appellant has been rejected both by the learned Trial Judge as also by the High Court upon assigning sufficient and cogent reasons. The agreement has been held to have been executed by the parties in support whereof large number of witnesses had been examined. The High Court, in particular in its judgment, has categorically opined that when the respondents served a notice upon the appellant on 29.05.1981, it was expected of the appellant to raise a contention that the said agreement was a sham one or nominal one and was not meant to be acted upon but it was not done. Failure on the part of the appellant to do so would give rise to an inference that the plea raised in the suit was an afterthought19. The findings of facts by both the Courts are concurrent ones and in our opinion no case has been made out to interfere therewith by this Court20. Submission of Mr. Chandrashekhar to the effect that having regard to the rise in price of an immovable property in Bangalore, the Court ought not to have exercised its discretionary jurisdiction under Section 20 of the Specific Relief Act is stated to be rejected. We have noticed hereinbefore that the appellant had entered into an agreement for sale with others also. He had, even after 11.5.1979, received a sum of Rs. 5,000/from the respondent. He with a view to defeat the lawful claim of Respondent No. 1 had raised a plea of having executed a prior agreement for sale in respect ofe property in favour hisw who had never claimed any right there under or filed a suit for specific performance of contract. The Courts below have categorically arrived at a finding that the said contention of the appellant was not acceptable. Rise in the price of an immovable property by itself is not a ground for refusal to enforce a lawful agreement of sale. [See P.D Souza (supra) and Jai Narain Parasrampuria (supra)]