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Karnataka High Court · body

2010 DIGILAW 155 (KAR)

Basappa (Since Deceased) v. Chandrashekharappa

2010-02-06

V.JAGANNATHAN

body2010
JUDGMENT : This second appeal is by the defendant before the Trial Court aggrieved by the reversal of the judgment of the Trial Court by the First Appellate Court. The Trial Court had dismissed the suit of the respondent-plaintiff for specific performance of the agreement of sale mainly on the ground of suit being barred by limitation. The First Appellate Court, on the other hand, took different view by holding that the suit is not barred by limitation and, accordingly, allowed the appeal filed by the plaintiff by setting aside the judgment of the Trial Court. It is in this background, this second appeal by the defendant. 2. Brief facts necessary for the purpose of this judgment are that the respondent-plaintiff and the appellant herein, being defendant, entered into an agreement of sale on 1-2-1976. As per the said agreement of sale, the appellant herein had agreed to sell the suit property, which is R.S. No. 270/1 (7 acres 38 guntas) situated in Guttal Village of Haveri Taluk, to the respondent-plaintiff for a sum of Rs.23,850/- and received Rs.10,000/- as earnest money. The date of executing the sale deed was fixed as before April, 1977. According to the plaintiff, the appellant herein went on accepting part payments also referred to the agreement of sale and last of the said part payments was made on 29-3-1978 according to the plaint averments. Thereafterwards, the defendant went on accepting certain payments over a further period of time and it is the plaintiff’s case that the entire sale consideration amount was paid in full and the last payment was made on 29-3-1978. Therefore, the plaintiff requested the defendant to execute the sale deed by issuing a legal notice on 22-4-1982, which was replied by the defendant on 1-5-1982. Following the refusal by the defendant to execute the sale deed, the suit was filed the refusal by the defendant to execute the sale deed, the suit was filed by the plaintiff on 18-4-1983. Stating that the plaintiff had not only paid the full amount but was ready and willing to accept the refund of earnest money as alternative relief i9n the event of the suit for specific performance not granted, the plaintiff on these averments filed the suit. 3. Stating that the plaintiff had not only paid the full amount but was ready and willing to accept the refund of earnest money as alternative relief i9n the event of the suit for specific performance not granted, the plaintiff on these averments filed the suit. 3. The defendant on his part took up the stand that no agreement of sale was executed as contended by the plaintiff, and secondly, as both parties were close relatives, the plaintiff with the help of some influential persons took the signature of the defendant on a blank paper and, as such , defendant had no intention at all to sell the suit property to the plaintiff. Apart from this, it was also the case of the defendant that he had repudiated the agreement of sale by indicating his intention to the plaintiff by issuing legal notice dated 23-6-1976 and, as such, the question of agreement of sale at Ex. P. 1 surviving thereafter did not arises and he also denied the receipt of entire sale consideration from the plaintiff. The defendant also took up the contention that the possession of the suit property was never parted to the plaintiff at any point of time. 4. The pleadings of the parties led the Trial Court to frame as many as 14 issues, out of which, based on the evidence let in by the parties and the documents produced, the Trial Court answered issues 1 and 2 in the affirmative by holding that the plaintiff had established the execution of agreement of sale by the defendant on 1-2-1976 and had received a sum of Rs. 10,000/- as advance amount. Issue 3, which required the plaintiff to prove that part payments were made towards the balance sale consideration, was answered partly in the affirmative by holding that the plaintiff had not paid the entire amount but the amount paid by the plaintiff was short by Rs. 2,927.14/-. Issue Nos. 4 to 6 were answered in the negative and among these issues, Issue No. 6 required the plaintiff to prove that he was ready and willing to perform his part of agreement of sale. Issue 8 to 13 were all answered in the negative. Crucial Issue No. 7 concerning the suit being barred by limitation was answered in the affirmative and, consequently, the suit of the plaintiff was dismissed as it was hopelessly barred by time. Issue 8 to 13 were all answered in the negative. Crucial Issue No. 7 concerning the suit being barred by limitation was answered in the affirmative and, consequently, the suit of the plaintiff was dismissed as it was hopelessly barred by time. Aggrieved by the dismissal of the suit, the plaintiff preferred a regular appeal before the First Appellate Court. The learned Judge of the First Appellate Court reversed Trial Court’s finding on issue of limitation. It was held that the suit was not barred by time as the time was not essence of the contract, and in arriving at this conclusion, the First Appellate Court took note of various payments received by the defendant even after the date mentioned in the agreement of sale. Therefore, the suit of the plaintiff was decreed as prayed for by reversing the Trial Court’s judgment. 5. I have heard the learned Counsel for the parties and perused the records of this case and the reasons assigned by the Courts below. 6. This Court while admitting the appeal had framed the following substantial questions of law for its consideration. “(1) Whether the findings of the First Appellate Court holding that the suit filed by the plaintiff is in time reversing the findings of the Trial Court that the suit is barred by time, is contrary to law and material on record and the contents of Ex. P. 1? (2) Whether the findings of the First Appellate Court reversing the judgment and decree passed by the Trial Court dismissing the suit of the plaintiff for specific performance, is perverse and arbitrary being contrary to law and the material on record and non-consideration of the reasons assigned by the Trial Court in dismissing the suit?” 7. Learned Counsel Sri F.V. Patil, for the appellant submitted that the First Appellate Court was totally wrong in reversing finding of the Trial Court, particularly, as regards the limitation issue is concerned Referring to the admitted facts, it is argued that though Ex. P. 1 is the agreement of sale, in view of the said document-Ex. P. 1 is the agreement of sale, in view of the said document-Ex. P. 1 is the agreement of sale, in view of the said document-Ex. P. 1 is the agreement of sale, in view of the said document-Ex. P. 1 clearly indicating the date within which the sale deed has to be executed, the question of extending the time for execution of sale deed does not arise, more so, when the appellant had repudiated the agreement of sale by issuing legal notice as per Ex. P.4 which is dated 23-6-1976. Therefore, even if subsequent payments were made by the plaintiff, they did not in any way take the effect of extending the date beyond the time mentioned in Ex. P. 1. In other words, even if a reference is made in the document of Exs. P. 6 to P. 8 upon which the plaintiff had relied, the last of the document is Ex. P. 8 where there is reference to the agreement of sale, and even if the time is reckoned from the date of the document-Ex. P. 8, subsequent payments made by the plaintiff as mentioned in the plaint are concerned, no document was produced by the plaintiff to show that those payments were made pursuant to agreement entered into between the parties subsequent to the repudiation of the original agreement of the defendant. Therefore, the First Appellate Court totally missed all these factors and held the limitation issued against the defendant. In fact, the Trial Court was right in holding that the suit of the plaintiff was barred by limitation, but unfortunately, the First Appellate Court read into the document at Ex. P. 1 what was not contained therein and, as such, perverse reading of Ex. P. 1 lead the First Appellate Court to take a different view of the matter. Insofar as the limitation question is concerned, submission made is that whether the time is the essence of the contract or not has no relevance and once the limitation period starts to run, and it never stops and, in the instant case, there is no evidence placed by the plaintiff to show that subsequent to the cancellation of the first agreement of sale at Ex. P. 1, parties have entered into any further agreement extending the time for execution of the sale deed or in respect of receiving various payments as mentioned in the plaint as indicative of agreement of sale being modified. P. 1, parties have entered into any further agreement extending the time for execution of the sale deed or in respect of receiving various payments as mentioned in the plaint as indicative of agreement of sale being modified. In the absence of evidence being placed by the plaintiff to show that the appellant had consented to receive various amounts pursuant to the agreement of sale, the question of period mentioned in Ex. P. 1 getting extended beyond what was mentioned in the said document does not arise. As such, the First Appellate Court has totally missed the evidence and misinterpreted the documents produced by the plaintiff. Not only the finding on limitation issue recorded by the First Appellate Court is contrary to the material on record and the law bearing on the point and the limitation period prescribed under Article 54 of the Limitations Act, 1963, but even the evidence appreciation is against the material on record and, as such, findings recorded are perverse in nature. In respect of the above submissions, learned Counsel for the appellant placed reliance on the decision In (i) Jugraj Singh and Another v Labh Singh and Others1 AIR 1995 SC 945 : (1995)2 SCC 31 ; (ii) Kanshi Ram v Om Prakash Jawal and Others2 AIR 1996 SC 2150 : (1996)4 SCC 593 ; (iii) K.S. Vidyanandam and Others v. Vairavan3 AIR 1997 sc 1751 : (1997)3 SCC 1 ; (iv) Venkappa Garappa Hosur v Kasawwa4 AIR 1997 SC 2630 : (1997)10 SCC 66 and (v) Motilal Jain v Smt. Bandasi Devi and others5 AIR 2000 SC 2408 : (2000)6 SCC 420 and a decision of the Apex Court rendered in Civil Appeal No. 4190 of 2000. Relying on the proportion of the law laid down in the aforementioned decisions, learned Counsel sought for the appeal being allowed by setting aside the judgment of the First Appellate Court and restoring that of the Trial Court. As for as the possibility of refund of the earnest money is concerned, submission made is that when the suit itself is barred by limitation, the question of refund of earnest money will not arise. Without prejudice to the above contention, learned Counsel for the appellant also submits that the appellant, however, a willing to refund the earnest money notwithstanding that legally he is not liable to refund the earnest money when the suit itself is barred by limitation. Without prejudice to the above contention, learned Counsel for the appellant also submits that the appellant, however, a willing to refund the earnest money notwithstanding that legally he is not liable to refund the earnest money when the suit itself is barred by limitation. 8. On the other hand, Sri S.N. Banakar, learned Counsel for the respondent-plaintiff supported the judgment of the lower Appellate Court in all respects and argued that the very conduct of the appellant in receiving part payments even after the time mentioned in Ex. P. 1 having got expired shows that the parties had argued to extend the time for executing the sale deed and it was only when the plaintiff issued notice to the appellant as per Ex. P. 12 on 22-4-1982, which was replied by the appellant on 1-5-1982 as per Ex. P. 13, that the cause of action for filing of the suit arose and considering the said date of Ex. P. 13, the suit filed on 18-4-1983 was well-within part II of Article 54 applies to the case on hand. Referring to the conduct of the appellant in receiving part payments even after the period mentioned in Ex. P. 1, submission made is that, by his own conduct, the appellant had extended the time to execute the sale deed and, as such, the question of suit being barred by limitation does not arise. It was also argued that the payments that were made by the plaintiff were all towards discharge of Bank loans by the defendants and plaintiff had produced number of receipts to show the payment made towards such discharge and, therefore, the suit of the plaintiff is not barred by limitation, if the above facts and circumstances are taken into account. Learned Counsel also referred to the evidence place on behalf of the plaintiff and number of witnesses examined in proof of execution of the sale agreement at Ex. P. 1 and subsequent payments received by the defendant and, as such, in the face of this said evidence placed by the plaintiff both the Courts have recorded concurrent findings with regard to the agreement of save being proved and receipt of advance money Rs. P. 1 and subsequent payments received by the defendant and, as such, in the face of this said evidence placed by the plaintiff both the Courts have recorded concurrent findings with regard to the agreement of save being proved and receipt of advance money Rs. 10,000/- also being proved and so also the part payment made by the plaintiff Referring to the evidence of the defendant, it is argued that the power of attorney-D. 1 as not competent to depose on behalf of the 2nd defendant and as such the evidence of defendant is taken out and the conduct of the defendant is considered, the suit cannot be held to be barred by time as rights opined by the First Appellate Court. In support of the above submissions, learned Counsel for the respondent placed reliance on number of decisions which are in (i) Pancharan Dhaa and Others v Monmatha Nath Maity (deceased) by L.R.s and Another1 AIR 2006 SC 2281 : (2006)5 SCC 340 : 2006 AIR SCW 3020; (ii) S. Brahmanand and Others v. K.R. Muthugopal (deceased) and Others2 air 2006 SC 40 : (2005)12 SCC 764: 2005 AIR SCW 5447; (iii) K. Gururao v M. Subha Rao3 (1991(3) Kar. L.J. 223 (DB)): ILR 1992 Kar. 429 (DB); (iv) (2002)1 SCC 134 ; (v) 2006(2) KCCR 1190; (vi) C. Nazeer Ahmed v S. Jahan Ara4 2001(2) Kar. L.J. 288 (DB): ILR 2000 Kar. 3536 (DB); (vii) Janki Vashdeo Bhaojwani and Another v Industrial Bank Limited and Others5 AIR 2005 SC 439 : (2005)2 SCC 217 : 2004 AIR SCW 7064; (viii) 2007(2) Supreme 641 ; (ix) Kashmir Singh v Harnam Singh and Another6 AIR 2008 SC 1749 : (2008)12 SCC 796 : 2008 AIR SCW 2417; (x) Dharmarajan and Others v Valliammal and Others7 AIR 2008 SC 850 : (2008)2 SCC 741 : 2008 AIR SCW 155; (xi) Silvey and Others v Arun Varghese and Another8 AIR 2008 SC 1568 : (2008) SCC 45: 2008 AIR SCW 1732; (xii) Aniglase Yohannam v Ramlatha and Others9 AIR 2005 SC 3503 : (2005)7 SCC 534 : 2005 AIR SCW 4789, and a decision of this Court rendered in RSA No. 1914 of 2005. 9. 9. As regards the scope of this Court to interfere in this second appeal is concerned, learned Counsel for the respondent argued that when the findings recoded are concurrent, this Court cannot interfere even if the said evidence are erroneous. As such, no substantial question of law arises for consideration is another submission put forward relying on several decisions of the Apex Court dealing with the scope of Section 100 of the Code of Civil Procedure. 10. In the light of the arguments advanced and rulings cited, the main point for consideration is the substantial questions of law raised by this Court which pertains to suit being barred by time or not. 11. Taking the first of the two substantial questions of law raised for consideration, in the light of the admitted facts as revealed from the evidence on record, both the Courts have held that the plaintiff had proved agreement of sale at Ex. P. 1 which clearly mentioned that in respect of the sale of the suit property, the appellant had received Rs.10,000/- and the balance of Rs. 13,850/-will have to be paid by the plaintiff before April 1977. It is, therefore, clear that the date of execution of the sale deed had been clearly indicated in agreement of sale at Ex. P. 1. However, the appellant received certain payments subsequent to the agreement of sale and these payments are established by the plaintiff by producing documents at Exs. P. 6 to P. 8 and certain other receipts having been produced by the plaintiff as well. In Exs. P. 6 to P. 8 there is a reference to the agreement of sale and last of the documents is Ex. P. 8 which is dated 31-5-1977. Beyond this transaction in respect of the other payments made by the plaintiff, nowhere the defendant has acknowledged the said amount by making reference to the sale agreement at Ex. P. 1. Though plaintiff has placed certain receipts, it cannot be held that these receipts and the payments indicated that they were in constitution of the payments made towards agreement of sale. These documents do not give indication that the amount mentioned therein were paid by the plaintiff towards part payment of the balance consideration due to the defendant. As such, the last of the documents wherein reference is made to the agreement of sale is Ex. P. 8, which is dated 31-5-1977. These documents do not give indication that the amount mentioned therein were paid by the plaintiff towards part payment of the balance consideration due to the defendant. As such, the last of the documents wherein reference is made to the agreement of sale is Ex. P. 8, which is dated 31-5-1977. Therefore, the suit ought to have been filed by the plaintiff either within three years from the date indicated in the agreement of sale itself or at the worst, within three years from the date of Ex. P. 8, but the suit was, in fact, filed long after the period of limitation and the filing of the suit in the year 1983 was also almost after six years after the last of the payments made as per Ex. P. 8. The Trial Court considering all these aspects has clearly opined that the suit of the plaintiff is hopelessly barred by time and while discussing this issue, at paragraph No. 32, in particular, the Trial Court had held that when the appellant had repudiated the agreement of sale, the question of suit having been filed within the limitation period subsequent to the reply notice from the appellant cannot be accepted, and secondly, the plaint is totally silent as regards novation or substitution of the agreement of sale at Ex. P. 1 by any subsequent documents. The plaintiff does not dispute the fact of appellant having repudiated the agreement of sale by issuing a legal notice as per Ex. P. 4, which is dated 23-6-1976. Under these circumstances, the Trial Court was of the definite view that the suit filed in 1983 was hopelessly barred by time and exchange of notices between the parties in 1982 and 1983 as per Exs. P. 12 and P. 13 have no relevance, more particularly, when the plaintiff had full knowledge of the repudiation of the agreement of sale by the appellant in 1976 itself. Viewed from any angle, the Trial Court found that the suit was beyond time and when the suit itself was based on Ex. P. 12 and P. 13 have no relevance, more particularly, when the plaintiff had full knowledge of the repudiation of the agreement of sale by the appellant in 1976 itself. Viewed from any angle, the Trial Court found that the suit was beyond time and when the suit itself was based on Ex. P. 1 and the said document having clearly indicated the date of execution of the sale deed as before April 1977, the question of limitation period getting extended does not arise and the suit ought to have been filed by the plaintiff within three years of the date mentioned in the agreement of sale or at the most within three years of Ex. P. 8 when the last payment was made referring to the agreement of sale. The above reasoning of the Trial Court is in accordance with the evidence on record and the admitted facts. 12. Unfortunately, the First Appellate Court read into the agreement of sale, what was not there, and referring to Ex. P. 1, has observed at paragraph 49 of its judgment that the text of Ex. P. 1 shows that deceased defendant I shall execute the registered sale deed after satisfying the encumbrance of society and bank loan. Nowhere such an averment is to be found in Ex. P. 1. Thus, the First Appellate Court committed an error by misreading the contents of Ex. P. 1 as far as the time being essence of the contract or not is concerned, when the agreement of sale clearly specifies the time within which the sale will have to be executed and there being no further evidence to show that the said agreement of sale Ex. P. 1 was modified at a later point of time. But, on the other hand, when the appellant had repudiated agreement of sale itself by issuing letter as per Ex. P. 4, the question of the period of limitation starting to run from the date of Ex. P. 13 by the plaintiff does not arise. The view taken by the First Appellate Court on the question of limitation is totally erroneous both on facts and having regard to the position in law governing the limitation period for filing the suit for specific performance of agreement of sale. In Civil Appeal No. 4190 of 2000 between Ahmadsahab Abdul Mulla (dead) by proposed L.Rs. The view taken by the First Appellate Court on the question of limitation is totally erroneous both on facts and having regard to the position in law governing the limitation period for filing the suit for specific performance of agreement of sale. In Civil Appeal No. 4190 of 2000 between Ahmadsahab Abdul Mulla (dead) by proposed L.Rs. v Bibijan and Others1 (2009)5 SCC361: 2008 AIR SCW 3368, the Apex Court while dealing with Article 54 of the Limitation Act and more particularly with Parts I and II of the Article as regards the time when the limitation starts has held that whether the date was fixed or not will have to be established by referring to the material on evidence to be brought on record and when date is fixed, it means that there is a definite date fixed for doing particular act. Therefore, the First Appellate Court committed an error in not taking note of the date mentioned in Ex. P. 1 even if it is taken into consideration that Ex. P. 1 stood a it is despite the appellant repudiating the same. In one of the decisions referred to by the learned Counsel for the respondent in the case of K. Gururao, a Division Bench of this Court has held that the limitation of three years will have to be reckoned from the date of knowledge or notice of denial of agreement whether the date fixed in the agreement expired or not. That was a case where it was found, on facts that the suit was filed seeking possession from the defendant and, therefore, the Court opined that there was repudiation of the agreement of sale and the suit ought to have been filed within three years from the date of knowledge or notice of the agreement of sale being denied. In the instant case also, the appellant the suit itself was filed long after limitation period in the year 1983. In vie of the above undisputed facts on record, I am of the view that the decision cited by the learned Counsel for the respondent cannot assist the respondent in any manner and, therefore, the first substantial question of law raised by this Court is answered by holding that the suit is barred by time and the finding of the First Appellate Court cannot be sustained in law. 13. 13. For the very same reasons referred to above, particularly, when the First Appellate Court read into the document at Ex. P. 1 what was not contained therein and also had ignored Ex. P. 4 the document by which the appellant had repudiated the agreement of sale and further there being no evidence to show that the payments made subsequent to Ex. P. 8 were the payments towards the part performance of the agreement of sale and there being no evidence to indicate that the appellant had consented to receive various amount as mentioned in the plaint towards the agreement of sale at Ex. P. 1 even evidence appreciation by the Court below suffers from perversity of finding and it is contrary to the evidence on record and the reasons assigned by the Trial Court had not been properly considered by the First Appellate Court, and the second substantial question of law is also answered accordingly. 14. During the pendency of this appeal there was an interim order granted in favour of the respondent as far as the possession of the suit property is concerned and as this Court has now held that the suit itself is barred by limitation by concurring with the view taken by the Trial Court, the submission made by the appellant’s Counsel is that respondent be directed to hand over the possession to the appellant. It was also submitted that no order of injunction was granted by the Trial Court at the first instance nor by the First Appellate Court but only when the First Appellate Court reversed the finding of the Trial Court that an order of injunction was granted in favour of plaintiff. But, subsequent to the defendant preferring the second appeal, during the pendency of the second appeal the interim order was continued. Following the appeal now being allowed, submission made is that the respondent be directed to hand over the possession to the appellant. 15. For this, the submission of the learned Counsel for the respondent is that the plaintiff has been in possession of the suit property by virtue of the order granted by the First Appellate Court during the pendency of the regular first appeal and the same has been continued even during the pendency of this second appeal and more over even as per Ex. P. 1, the agreement of sale, the plaintiff was put in possession. P. 1, the agreement of sale, the plaintiff was put in possession. As such, submission made is that the appellant be directed to take recourse to other remedies available in law. 16. In view of the above submission made, as far as the possession is concerned, when the suit of the plaintiff itself has been held to be barred by limitation, any interim order passed during the pendency of this proceedings will also be subject to the ultimate result of this second appeal. Since the second appeal has been allowed by holding that the suit itself is barred by limitation and following the appellant also having come forward to pay back the amount received from the plaintiff though not legally the appellant is bound to do so, following the suit having been dismissed on the ground of limitation, under these peculiar facts and circumstances of this case, to meet the ends of justice, it is directed that the respondent shall also hand over the possession of the suit property to the appellant within two months from the date of receipt of entire earnest money. 17. As far as the time prayed by the learned Counsel for the respondent to stay the operation of the judgment as the respondent intends to take up the matter in appeal to the Apex Court is concerned, in my view, when the substantial question of law has been answered against the respondent and the suit itself is barred by limitation, the question of staying operation of this judgment also does not arise. 18. In view of the above findings, the second appeal has to succeed and accordingly, the second appeal is allowed and the judgment of the First Appellate Court is set aside and that the Trial Court is restored. At this stage, before parting, it is to be mentioned that though the suit itself is barred by time and the appellant, therefore, will not be required in law to refund the amount received fro the plaintiff, yet the appellant has come forward to refund the amount received from the plaintiff and this gesture on the part of the appellant also requires to be placed on record.