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2011 DIGILAW 1016 (KAR)

Poojari Hulugappa v. N. Vanaja @ Saraswathi

2011-10-18

B.V.NAGARATHNA

body2011
JUDGMENT B.V. NAGARATHNA, J.—This second appeal is filed by the defendants assailing the judgment and decree passed by the first appellate Court in R.A. No. 91/2009, on the file of Fast Track Court-III at Hospet, dismissing the appeal filed by the defendants and confirming the judgment and decree dated 21.10.2008 in O.S. No. 128/2006, by the Prl. Civil Judge (Sr. Dn.), Hospet. 2. For the sake of convenience, the parties shall be referred to as per their status before the trial Court. 3. The respondent-plaintiff filed a suit for specific performance of an agreement to sell dated 21.3.2006 by contending that defendant No. 1 (since deceased) was the absolute owner of the suit land, defendant No. 2 is his son and defendant No. 3 is the wife of the second son of defendant No. 1. For their legal necessities defendants had agreed to sell the suit lands to the plaintiff for a consideration of Rs. 6,72,750/- have jointly executed an agreement to sell dated 21.3.2006 after receiving an advance of Rs. 2,00,000/- at Kampli and agreed to receive the balance sale consideration of Rs. 4,72,750/- and to execute regular sale deed on or before 21.9.2006 and had also agreed to survey the land within that date. Inspite of repeated requests and lawyer’s notice dated 20.7.2006, the defendants failed perform their part of the contract. The plaintiff has averred that she was ready and willing to pay the balance sale consideration as well as the registration charges, but since the defendants never performed their part of the agreement, the suit for specific performance was filed. 4. On receipt of suit summons and notices, defendants appeared through their counsel and defendant No. 2 filed written statement which was adopted by defendant Nos. 1 and 3. The defendants resisted the suit by stating that the allegations made in the plaint were false, while admitting the relationship between the defendants. They have stated that the suit land was the joint family property, but denied that the agreement of sale was executed by the defendants by receiving earnest money of Rs. 2,00,000/-. They stated that on the advice of the elders, they did not reply to the lawyer’s notice issued on behalf of the plaintiff that the agreement to sell was only a nominal one. The defendants had availed loan for providing medical treatment to one Prabhu who had suffered stroke. 2,00,000/-. They stated that on the advice of the elders, they did not reply to the lawyer’s notice issued on behalf of the plaintiff that the agreement to sell was only a nominal one. The defendants had availed loan for providing medical treatment to one Prabhu who had suffered stroke. Plaintiffs husband had agreed to lend money on the strength of the document which was a security for the said loan. Ultimately, they agreed to execute the agreement in favour of the plaintiff for a sum of Rs. 6,72,750/- as such the nominal consideration has been mentioned in the agreement of sale. The said agreement was only by way of security to the loan transaction, but the defendants never agreed to sell the property. Therefore, they state that the suit was not maintainable and was liable to be dismissed. 5. On the basis of the above pleadings, the trial Court framed the following issues for its consideration: (i) Whether the plaintiff proves that defendants have agreed to sell the suit property for a consideration of Rs. 6,72,750/-? (ii) Whether the plaintiff further proves that, defendant has executed the agreement of sale on 21.3.2006 by receiving an earnest money of Rs. 2 lakhs? (iii) Whether the plaintiff proves that she was and is ready and willing to perform his part of contract? (iv) Whether defendants prove that the alleged agreement of sale is executed as a security for loan transaction? (v) Whether plaintiff is entitled to the relief of specific performance? (vi) What decree or order? 6. In support of her case, the plaintiff let-in her evidence as P.W. 1 and the evidence of two other witnesses as P.Ws. 2 and 3 and produced 24 documents, which were marked as Exs.P-1 to P-24. The defendants let-in their evidence by examining four witnesses DWs.1 to 4 and produced four documents which were marked as Exs.D-1 to D-4. On the basis of the said evidence, the trial Court answered issue Nos. 1 to 5 in the affirmative and decreed the suit of the plaintiff with costs and directed the defendants to execute a registered sale deed in favour of the plaintiff by receiving the balance sale consideration and put the plaintiff in possession of the suit schedule property. Being aggrieved by the said judgment and decree, the defendant Nos. 1 to 5 in the affirmative and decreed the suit of the plaintiff with costs and directed the defendants to execute a registered sale deed in favour of the plaintiff by receiving the balance sale consideration and put the plaintiff in possession of the suit schedule property. Being aggrieved by the said judgment and decree, the defendant Nos. 2 and 3 filed the appeal in R.A. No. 91/09 before the first appellate Court, by then defendant No. 1 had died. The first appellate Court framed the following issues: (i) Is the trial Court not justified in holding that, the defendants have agreed to sell the suit schedule property for a total consideration of Rs. 6,72,750/-and executed agreement of sale on receipt of earnest money of Rs. 2,00,000/- on 21.3.2006? (ii) Is the trial Court not justified in holding that the said agreement of sale is executed by the defendants not as security for loan transaction? (iii) Is it just and necessary either to set aside or modify the judgment and decree under appeal? (iv) What order or decree? 7. After hearing both sides, the first appellate Court answered Point Nos. 1 to 3 in the negative and dismissed the appeal thereby confirming the judgment and decree of the trial Court. Being aggrieved by the said judgment and decree, the defendants have preferred this appeal, 8. I have heard the learned counsel for the appellants and the learned counsel for the respondent-caveator. 9. It is contended on behalf of the appellants that Exs.P-1 dated 21.3.2006 is not an agreement of sale. The said document was executed by way of a security for the loan transaction between the parties. The plaintiff had advanced a sum of Rs. 2,00,000/- to the defendants and executed the document to ensure that the said amount would be returned in time. The appellants contend that Ex. P1 which is stayed as an agreement to sell was never entered into as such. Both the trial Court as well as the first appellate Court were in error in holding that the agreement to sell was entered into by the parties and thereby decreeing the suit filed by the plaintiff for specific performance of the said agreement. P1 which is stayed as an agreement to sell was never entered into as such. Both the trial Court as well as the first appellate Court were in error in holding that the agreement to sell was entered into by the parties and thereby decreeing the suit filed by the plaintiff for specific performance of the said agreement. He alternatively contended that plaintiff has failed to prove that she was ready and willing to perform her part of the contract and the trial Court, as well as the first appellate Court have erroneously held that the plaintiff was ready and willing to perform her part of the contract and thereby decreeing the suit of the plaintiff which is not in accordance with law. In support of his contentions, he has placed reliance on certain decisions of the Apex Court as well as this Court. He also stated that the date fixed for agreement to sell was 21.9.2006 and, therefore, the suit could not be filed on 7.8.2006. He submitted that substantial question of law-arise in this appeal, which call for intervention of this Court. 10. Per contra, learned counsel for the caveator while supporting the judgment and decree passed by the Courts below has stated that no substantial question of law arises in this appeal. That the plaintiff and the defendants had executed the agreement to sell on 21.3.2006 at Ex. P1. As per the said agreement, the sale deed had to be executed on or before 21.9.2006. That in fact, a legal notice was issued on behalf of the plaintiff on 20.7.2006 since the plaintiff apprehended that the defendants would alienate the suit lands, but the defendants did not reply to the legal notice. Therefore, the plaintiff was constrained to file the suit since cause of action arose when the defendants did not reply to the legal notice and the plaintiff apprehended that the defendants were to alienate the suit scheduled property to third persons. He also stated that the plaintiff was ready and willing to perform her part of the contract as is evident from the legal notice dated 20.7.2006. In the absence of any reply to the legal notice, the respondent had cause of action to file the suit. He also stated that the plaintiff was ready and willing to perform her part of the contract as is evident from the legal notice dated 20.7.2006. In the absence of any reply to the legal notice, the respondent had cause of action to file the suit. He also stated that the plaintiff has proved that she was ready and willing to perform her part of the contract which evidence let-in by her has been appreciated by both the Courts and, therefore, no substantial question of law arises in this appeal. In support of his submission he has placed reliance on certain decisions of this Court. 11. Having heard the learned counsel on both sides and on perusal of the material on record, it is noted that the suit land belongs to defendant No. 1. The fact that there was a contractual relationship between the parties has also been admitted. Ex. P1 is the agreement dated 21.8.2006 a reading of which shows that a sum of Rs. 2,00,000/- was paid on 21.3.2006 by the plaintiff to the defendants as an advance payment. It is also not in dispute that legal notice dated 20.7.2006 was issued on behalf of the plaintiff to the defendants, but the said notice was not replied by the defendants. The trial Court as well as the first appellate Court have answered all the issues in favour of the plaintiff by holding that Ex. P1 is an agreement to sell and that the plaintiff was ready and willing to perform her part of the contract and that a sum of Rs. 2,00,000/- had been received as an advance sale consideration by the defendants and that the defendants had not performed their part of the obligation while both the Courts have held that the agreement to sell Ex. P1 was not a security for the loan transaction, 12. However, it is the case of the defendants that Ex. P1 is not an agreement to sell and, therefore, defendants had no obligation under the said agreement to sell the suit scheduled property and no cause of action arose for filing of suit for specific performance. The defence of the defendants is that the sale agreement was not in existence and the said agreement was executed for the purpose of a money-lending transaction and not to alienate the suit land to the plaintiff. The defence of the defendants is that the sale agreement was not in existence and the said agreement was executed for the purpose of a money-lending transaction and not to alienate the suit land to the plaintiff. That financial assistance was sought from the plaintiff since DW2 had sustained paralytic stroke and, therefore, the amount of Rs. 2,00.000/- was advanced by the plaintiff to the defendants. The defendants had no intention to sell the suit land. In this context it would be of relevance to note that Ex. P1 is the agreement of sale (a copy of which is furnished during the course of argument). It is categorically stated therein that the total sale consideration for the suit land is Rs. 6,72,750/-. It is also stated that a sum of Rs. 2,00,000/- has been received by way of advance payment and that Rs. 4,72,750/- had to be paid on 21.9.2006, which was the date fixed for registration of the sale deed. The apprehension of the plaintiff was that the defendant had intended to alienate the suit land to third parties. It is under such circumstances that a legal notice dated 20.7.2006 was issued stating that a sum of Rs. 2,00,000/- had been paid before the attestors as an advance amount and the balance amount of Rs. 4,72/750/- alongwith registration charges and expenses for stamp duty would be met by the plaintiff. Therefore, a request was made to execute the sale deed by receiving the balance amount of Rs. 4,72,750/- on 26.7.2006 before the Sub-Registrar Office, Kampli, Though legal notice was sent by the plaintiff, the defendants did not reply to the said legal notice. On consideration of Exs.P-1 and F-4, certified copy of which is also produced during the course of argument, it is noticed that the date for registration was fixed as 21.9.2006. On an apprehension that the defendants would alienate the suit land, the plaintiff who had advanced a sum of Rs. 2,00,000/- fixing the date of registration on or before 21.9.2006 and on the said date balance sale consideration would be paid, got issued legal notice dated 20.7.2006 (Ex. P4). 13. On a combined reading of Exs.P-1 and P-4. it clearly indicates that Ex. P1 was intended to be an agreement to sell and the parties had acted on the said agreement inasmuch as the plaintiff had paid a sum of Rs. P4). 13. On a combined reading of Exs.P-1 and P-4. it clearly indicates that Ex. P1 was intended to be an agreement to sell and the parties had acted on the said agreement inasmuch as the plaintiff had paid a sum of Rs. 2,00,000/- as advance consideration to the defendants who had received the same on the date of the agreement, The plaintiff was ready and willing to perform her part of the contract inasmuch as the plaintiff did not wait till 21.9.2006 which was the date fixed for performance of contract since on the apprehension of the plaintiff that the defendants would alienate the suit land, she got issued a legal notice on 20.7.2006 and stated that the sale deed could be registered on 26.7.2006 as stated in Ex. P1 and on which date she would pay the balance sale consideration. The fact that the plaintiff had advanced the date of registration from 21.9.2006 to 26.7.2006 as stated in Ex. P1 would indicate that the plaintiff was ready to pay the balance sale consideration on the said date which was nearly two months prior to the date fixed in Ex. P1. Under the circumstances, it has to be held that the plaintiff was ready and willing to perform this part of the agreement as per Ex. P1, Hence, the contention of the counsel for the appellant that Ex. P1 was only an agreement to support the loan transaction cannot be accepted. 14. Having regard to the contents of the notice and there being no reply to the said notice it cannot also be held that the plaintiff was not ready and willing to perform her part of the contract. While considering the case of the parties, the trial Court has clearly stated, that there is no specific plea, in the written statement that the plaintiff was not in a position to pay the balance sale consideration of Rs. 4,72,750/-. In fact, the plaintiff P.W. 1 had let-in evidence to show that her brothers as well as her husband were working and that she had the requisite funds to make payment of the balance sale consideration. She has relied upon Ex. P4, which is legal notice that was issued wherein she had stated that she was ready to pay the balance sale consideration even on 26.7.2006 instead of 21.9.2006. She has relied upon Ex. P4, which is legal notice that was issued wherein she had stated that she was ready to pay the balance sale consideration even on 26.7.2006 instead of 21.9.2006. While considering the said document, the trial Court as well as the first appellate Court have also held that there is no evidence to support the contention of the defendants that Ex. P1 was executed as a security for the loan transaction. Even otherwise, on a reading of Ex. P1 it would not give an impression that it was executed as a security for the loan transaction. If that was so. it would not necessary for the defendants to state that they would get their lands measured, The same was for the purpose of handing it over to the plaintiff on the date of registration dated 21.9.2006, If there was no intention to sell the land, then the appointment of a surveyor for measuring the suit land would not at all have been necessary. The fact that the defendants had stated that on or before 21.9.2006, the land would be measured through a surveyor. The same was for the purpose of handing over possession on the date of registration, which would clearly indicate that the defendants intended to sell the suit land to the plaintiff. 15. The first appellate Court has also considered the evidence and has observed that, if really the defendant No. 1 had availed a loan on the basis of Ex. P1 as security, then the advance amount would not have been deposited in a bank, but utilised for the required purpose. It is also noted that Ex. P1 is not executed by the defendant No. 1 alone, but by the other two defendants as well. 16. In this context, it would be relevant to consider Section 16 and Section 20 of the Specific Relief Act, The grant of specific performance is a discretionary relief, having regard to the various clauses of Section 16, which specifically states that the contract cannot be enforced in favour of a person in certain circumstances. Section 20 of the Act speaks about discretion being exercised by the Court not to grant the relief of specific performance provided discretion of the Court is not exercised arbitrarily, but in a sound and reasonable manner. Section 20 of the Act speaks about discretion being exercised by the Court not to grant the relief of specific performance provided discretion of the Court is not exercised arbitrarily, but in a sound and reasonable manner. Certain instances are given in sub section 2 of Section 20 of the Act where the Court may properly exercise discretion not to decree specific performance. In Section 20 of the Act,, it is stated mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b) of sub section 2 of Section 20. Sub section 4 Section 20 states that the Court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party. Therefore, Section 16 and Section 20 can be interpreted in a manner, which would imply that Courts normally would lean in favour of specific performance and the burden would be on the defendant to deny the said relief In the instant case, I do not find that the defendants have been able to establish any ground as stated in Section 16 or Section 20 so far as to deny specific relief to the plaintiff. 17. At this stage, it would be relevant to refer some of the decisions cited on behalf of the parties, AIR 2005 Supreme Court 8503 and AIR 2009 Supreme Court 2193 are the two decisions cited by the learned counsel for the appellant to contend that Court can grant specific relief on the basis of the conduct of the person seeking relief. There must be a clear averment in plaint that plaintiff purchaser was always ready to get sale deed regarding after paying necessary consideration. AIR 2009 SC 2193 has been cited to contend that the expression ‘date fixed for the performance’ is a crystallized notion and that, when a date is fixed for performance of the contract, the suit cannot be filed before the said date. The said two decisions would not be applicable to the case on hand for the following reason. In the instant case, it is already noted that the agreement at Ex. P1 dated 21.3.2006, the date fixed for performance was 21.9.2006. The said two decisions would not be applicable to the case on hand for the following reason. In the instant case, it is already noted that the agreement at Ex. P1 dated 21.3.2006, the date fixed for performance was 21.9.2006. The defendants have denied that Ex. P1 was an agreement to sell. Therefore, they denied the fact that there was any date fixed for performance on the part of the defendants. It is on the apprehension on the part of the plaintiffs about defendant alienating the suit land, for that legal notice dated 20.7.2006 was issued. In fact, the plaintiff advanced the date for performance to 26.7.2006 from 21.9.2006 by stating that she was ready and willing to pay the balance sale consideration. There was no reply to the said legal notice. The filing of the suit in August 2008 i.e., on 7.8.2006 is though prior to 21.9.2006 the date fixed for performance was on account of the fact that the plaintiff had cause of action to approach the Court as the defendants failed to reply the legal notice and also plaintiff had an apprehension that the defendants would alienate the suit land. 18. Also plaintiff made out readiness and willingness to perform her part on the contract by getting the legal notice issued on 20.7.2006 and stating that on 26.7.2006 she would pay the balance sale consideration and on the said date sale deed could be registered. Therefore, the cause of action for the plaintiff to seek the relief of specific performance arose even prior to the date of fixed in Ex. P1. 19. This is not the case where the limitation period envisaged under Article 54 of the Limitation Act has to be considered in order to find out as to whether the suit is filed in time. On the other hand, the cause of action for the plaintiff arose even, before the date fixed for performance in. Ex. P1. Therefore, the suit filed by the plaintiff was maintainable, even before the time fixed for performance had expired. It is relevant to state that where the agreement fixed the date of performance of the agreement, whether that date has expired or not. Ex. P1. Therefore, the suit filed by the plaintiff was maintainable, even before the time fixed for performance had expired. It is relevant to state that where the agreement fixed the date of performance of the agreement, whether that date has expired or not. if the very agreement is denied or performance under the agreement is denied, then person in whose favour the agreement is executed is required to exercise his right within a period of three years from the date of knowledge or notice of the fact that agreement is denied. Therefore, it would not be necessary for the plaintiff to wait till the expiry of the date fixed In the agreement before filing the suit for specific performance. The suit can be filed even before the expiry of the time fixed under the agreement. 20. Reliance is also placed on certain decisions of this Court by the learned counsel for the appellant on the basis of Article 54 of the Limitation Act, which would not be applicable to the present case. Since, as already stated the suit for specific performance is filed in the instant case based on the cause of action that arose for the plaintiff, on the basis of apprehension that the defendants would alienate the suit land. This is also not a case where there was delay in filing the said suit. 21. The other decision of this Court pertains to Section 16 and Section. 20 of the Specific Relief Act and with regard to proving and readiness and willingness by the plaintiff to seek relief of specific performance and to approach the Court with clean hands. The said decisions are reported in the case of Cinnawamy vs. Profulla, reported in ILR 1992 KAR 2294 and in the case of Sri. Venkatesh and others vs. DAC Venkoosa, reported in ILR 2007 KAR 4623, It has been stated that readiness, means the financial capacity of the plaintiff to perform his part of contract to pay sale consideration amount and willingness is that his mental attitude, that he is always ready and prepared to perform his part of the contract, having regard to financial capacity of the plaintiff to pay balance sale consideration. In fact issuance of legal notice Ex. In fact issuance of legal notice Ex. P4 on 20.7.2008 would clearly indicates that the plaintiff was not only willing to pay balance sale consideration but also was ready to pay the same as she has categorically stated that on 26.7.2006 the sale deed could be executed rather than on 21.9.2006. The case of Sri. Venkatesh and others vs. D.A.C. Venkoosa, reported in ILR 2007 KAR 4623 deals with the case of putting an agreement holder in possession of the immovable property in part-performance of the contract and the consequences thereof. The said decision is not applicable to the present case, since, possession of the said property is not handed over to the plaintiff by the defendants. 22. In fact, in the case of Surya Narain Upadhyaya vs. Ram Roop Pandey and others, reported in AIR 1994 SC 105 the Hon’ble Apex Court held that where the plaintiff had failed to pay sufficient Court fee drawing an inference of incapacity to pay sale consideration and thereby refusing the relief of specific performance was incorrect. The Hon’ble Apex Court held that the incapacity to pay the Court fee was not relevant consideration for granting relief of specific performance, 23. Having regard to the facts of the present case and taking into consideration the relevant document, I am of the view, that both the trial Court as well as appellate Court were justified in decreeing the suit of the plaintiff and directing the defendants to execute the sale deed by receiving balance sale consideration for Rs. 4,72,750/- by directing the defendants to put the plaintiff in possession of the suit schedule property. No substantial questions of law, therefore, arise in this appeal. 24. Accordingly, appeal is dismissed. Parties to bear their own costs. 25. At this stage, counsel for the respondent caveator also submits that subsequent to the judgment and decree of the trail Court, the respondent has deposited balance sale consideration before the trial Court on 9.4.2009 in E.P. No. 33/2009. It is needless to observe that the appellants are at liberty to withdraw the said amount at the time of execution of the sale deed, 26. In view of the dismissal of the appeal, application for stay would not survive for consideration.