Y. v. Aparna W/o. Y. Vittal VS Panchappa s/o. Chikkaveerappa Mundargi, since deceased
2019-10-22
ALOK ARADHE, P.G.M.PATIL
body2019
DigiLaw.ai
JUDGMENT : ALOK ARADHE, J. This appeal under Section 96 of the Code of Civil Procedure, 1908, has been filed by the plaintiff being aggrieved by the impugned judgment and decree dated 22nd November 2012 by which the suit for specific performance of the contract filed by the appellant has been partly decreed and only the relief of refund of earnest money along with interest at the rate of 12% per annum has been granted to the appellant. 2. Facts giving rise to filing of the appeal, briefly stated, are that defendant No.1, admittedly was the owner of the agricultural land bearing Sy. No.77/2 measuring 3 acres out of 6 acres and 21 guntas. It is the case of the plaintiff that the defendant No.1, in order to pay family debts, entered into an agreement for sale in favour of the plaintiff on 01.03.2007, which was registered on the same day. Under the aforesaid agreement, the defendant No.1 agreed to sell the land for a consideration of Rs.2,00,000/- per acre and on the same day. plaintiff paid a sum of Rs.3,80,000/- through a cheque, and a sum of Rs.21,000/- by way of cash. Thus, the defendant No.1 received, in all, a sum of Rs.4,01,000/- as advance sale consideration. It was mutually agreed that plaintiff would pay the balance sale consideration within six months from the date of the agreement and the defendant No.1 thereupon would put the plaintiff in possession of the suit property. It is also averred that plaintiff subsequently approached the defendant No.1 through her husband and attesting witnesses to the agreement and requested him to execute the sale deed. However, the defendant No.1 did not execute the sale deed. The plaintiff thereupon issued a notice dated 14.07.2008 to defendant No.1 which was replied by the defendant No.1 on 27.07.2008. Thereafter, another notice dated 15.12.2008 was issued by the plaintiff seeking specific performance of the agreement in respect of land ad measuring 3 acres for a consideration at the rate of Rs.10.29 Lakhs per acre. It was further pleaded that out of the aforesaid amount, a sum of Rs.4,01,000/- was already paid on 01.03.2007. It was further stated in the notice that the defendant No.1 had agreed to receive the balance sale consideration of Rs.30,87,000/- within six months from the date of the agreement.
It was further pleaded that out of the aforesaid amount, a sum of Rs.4,01,000/- was already paid on 01.03.2007. It was further stated in the notice that the defendant No.1 had agreed to receive the balance sale consideration of Rs.30,87,000/- within six months from the date of the agreement. It was also pleaded that since as per the guidelines pertaining to valuation of properties issued by the State Government, the price of the land was Rs.2,00,000/- per acre therefore, the defendant No.1 prevailed upon the plaintiff to execute an unregistered agreement on 01.03.2007 itself with regard to the real sale consideration of Rs.10,29,000/- per acre. It was also pleaded that on account of non-availability of stamp paper worth Rs.200/-, the unregistered sale agreement came to be executed towards security for the sale consideration of Rs.30,87,000/-. Thereafter, on 02.03.2007, stamp paper of Rs.200/- was secured and another agreement of sale was executed. It was further pleaded that the plaintiff had offered the defendant No.1 to accept the balance sale consideration of Rs.24,86,000/- and has sent xerox copy of the account payee cheque in the name of the defendant No.1 calling upon him to collect the original cheque within 15 days from the date of receipt of the said notice. However, the defendant No.1 did not send any reply to the aforesaid notice and sold the suit land in favour of defendants No.2 and 3 under two fraudulent and fictitious sale deeds dated 27.08.2008. It was also pleaded that the plaintiff has been ready and willing to perform her part of the contract. Accordingly, the suit was filed seeking the relief of the specific performance of the agreement dated 02.03.2007 i.e., the second agreement which was unregistered, on receipt of balance sale consideration of Rs.24,86,000/-. The plaintiff also sought the relief of declaration that the sale deeds dated 27.08.2008 executed by the defendant No.1 in favour of the defendants No.2 and 3 are not binding on the plaintiff. In the alternative, the plaintiff sought the relief of refund of sale consideration of Rs.6,00,000/- along with interest. 3. The defendant No.1(b) filed the written statement in which, inter alia, it was stated that the suit property was ancestral property of the family of defendant No.1 and he had no absolute right to sell the property.
In the alternative, the plaintiff sought the relief of refund of sale consideration of Rs.6,00,000/- along with interest. 3. The defendant No.1(b) filed the written statement in which, inter alia, it was stated that the suit property was ancestral property of the family of defendant No.1 and he had no absolute right to sell the property. It was further pleaded that the registered agreement of sale is not real and genuine and defendant No.1 was in need of Rs.6,00,000/- and approached the plaintiff’s husband, who had agreed to advance the loan, and the defendant No.1 agreed to repay the loan with interest at the rate of 6% per annum. However, the agreement was executed subject to the condition that the defendant No.1 shall execute a nominal registered agreement of sale in the name of his wife as security for the loan amount, which was to be cancelled on repayment of the loan amount. It was further pleaded that defendant No.1 had received an amount of Rs.4,01,000/- and the total agreed loan amount was Rs.6,00,000/-. It was also averred by the defendants that on 02.03.2007, the plaintiff got one more unregistered agreement of sale on identical terms and conditions which was executed as security for loan. It was further pleaded that the plaintiff, in order to grab the suit property, issued notices to defendant No.1 which was suitably replied. The defendants No.1(a) and 1(d) adopted the written statement of defendant No.1(b), whereas the defendant No.1(c) was proceeded ex parte. The defendants No.2 and 3 filed their written statement in which it was averred that they had made all possible enquiry about the title of the defendant No.1 and are bona fide purchasers for a valuable consideration without notice of the alleged agreements for sale dated 01.03.2007 and 02.03.2007. It was further pleaded that the defendants No.2 and 3 have purchased the suit property under two registered sale deeds dated 28.07.2008 and are the absolute owners of the property and are in possession of the same. 4. The Trial Court on the basis of the pleadings of the parties framed issues and recorded the evidence of the parties. The plaintiff examined two witnesses namely Y.Vittal, the general power of attorney of the plaintiff (as P.W.1) and Rubin Mirjakar (as P.W.2) and exhibited 35 documents namely Exs.P.1 to P.35.
4. The Trial Court on the basis of the pleadings of the parties framed issues and recorded the evidence of the parties. The plaintiff examined two witnesses namely Y.Vittal, the general power of attorney of the plaintiff (as P.W.1) and Rubin Mirjakar (as P.W.2) and exhibited 35 documents namely Exs.P.1 to P.35. The defendants examined two witnesses namely Girish (as D.W.1) and Pedda Subbayya (as D.W.2) and exhibited 17 documents namely Exs.D.1 to D.17. The Trial Court by the impugned judgment has declined to grant the relief of specific performance of contract. However, the Trial Court has granted the decree for refund of amount of Rs.6,00,000/- with interest at the rate of 12% per annum for Rs.4,00,000/- from 01.03.2007 and for Rs.2,00,000/- with effect from 03.09.2007 till the payment is made in the Court. In the aforesaid factual background, the appellant has filed this appeal. 5. Learned counsel for the appellant submitted that the Trial Court ought to have appreciated that the suit was filed for specific performance of the agreement for sale and the plaintiff under the aforesaid agreement had paid the entire sale consideration, therefore, issue No.2 was answered in favour of the plaintiff and it was held that the defendant No.1 received part of sale consideration under the agreement to the tune of Rs.6,01,000/-. It is further submitted that the finding recorded by the Trial Court that the plaintiff is not ready and willing to perform her part of contract is perverse in the evidence on record as the plaintiff had already paid the entire sale consideration under the registered agreement and had complied with the requirement contained in Section 16(c) of the Specific Relief Act, 1963. 6. It is also submitted that the plaintiff had proved the execution of the sale agreement which was a registered document. It is further submitted that an encumbrance certificate namely Ex.P.25 was placed on record and therefore, the defendants No.2 and 3 could not have been held to be bona fide purchasers for a valuable consideration. It is also submitted that in the encumbrance certificate, the name of the husband of the plaintiff namely Y.Vittal was mentioned instead of name of the plaintiff. It is further submitted that the defendant No.1 had sold the property to defendants No.2 and 3 for a lesser consideration i.e., for a consideration of Rs.9,80,000/- per acre.
It is also submitted that in the encumbrance certificate, the name of the husband of the plaintiff namely Y.Vittal was mentioned instead of name of the plaintiff. It is further submitted that the defendant No.1 had sold the property to defendants No.2 and 3 for a lesser consideration i.e., for a consideration of Rs.9,80,000/- per acre. In support of his submissions, learned counsel for the appellant has placed reliance on the decisions of the Supreme Court in the cases of Nadiminti suryanarayan Murthy (Dead) through LRs. Vs. Kothurthi Krishna Bhaskara Rao and others, AIR 2017 SC 5052 , Madhukar Nivrutti Jagtap and others vs. Smt. Pramilabai Chandulal Parandekar (Dead) Thr. Lrs. and others, AIR 2019 SC 4252 , and on a decision of High Court of Uttarakhand in the case of Smt. Raghuberi ‘deceased’ and Ors. vs. Ved Pal & Ors., AIR 2011 Uttarakhand 38. 7. On the other hand, learned counsel for respondents No.2 and 3 has submitted that the pleadings and the evidence has been adduced by the plaintiff, is with regard to execution of the unregistered agreement for sale, and in the plaint a prayer has also been sought for specific performance of the unregistered agreement for sale. It is also submitted that after a period of more than one year i.e., from the date of execution of the second agreement dated 02.03.2007, along with the first notice which was sent on 15.12.2008, a photocopy of a cheque for a sum of Rs.24,86,000/- was sent. It is also urged that the cheque was invalid as it’s validity had expired, was annexed and therefore, the plaintiff had failed to prove his readiness and willingness to perform the contract. It is also argued that no evidence was adduced on behalf of the appellant to show that despite knowledge, the defendants No.2 and 3 had purchased the suit property. Attention of this Court has also been invited to Ex.D.1 i.e., the notice dated 06.04.2008 published in daily ‘Vijaya Karnataka’ by which the plaintiff was asked to take back the earnest money. Learned counsel for respondent No.1(b) has adopted the submission made on behalf of the learned counsel for the defendants No.2 and 3. 8. We have considered the rival submissions made by the learned counsel for the parties and have perused the records.
Learned counsel for respondent No.1(b) has adopted the submission made on behalf of the learned counsel for the defendants No.2 and 3. 8. We have considered the rival submissions made by the learned counsel for the parties and have perused the records. The following issues arise for our consideration in this appeal: (i) Whether the plaintiff had filed the suit seeking relief of specific performance of the contract in respect of the registered agreement dated 01.03.2007? (ii) Whether the plaintiff has approached the Trial Court with clean hands? (iii) Whether the plaintiff has been able to prove his readiness and willingness to perform her part of contract? (iv) Whether the defendants No.2 and 3 are bona fide purchasers for a valuable consideration? (v) Whether the jurisdiction to grant discretionary relief of specific performance of the contract has been exercised on sound principles of law by the Trial Court? 9. Before proceeding further, at this stage, it is apposite to take note of few well settled legal principles. It is well settled in law that the plaintiff, who approaches the Court seeking the relief of specific performance of the contract, should approach the Court with clean hands (See A.C. Arulappan vs. Smt. Ahalya Naik, AIR 2001 SC 2783 and Beemaneni Maha Lakshmi Vs. Gangumalla Appa Rao (2019)6 SCC 233 ). It is equally well settled legal principle that the jurisdiction to grant the relief of specific performance of the contract is discretionary in nature and the Court has to consider various circumstances to decide whether such relief is to be granted. The Court need not grant the relief of specific performance merely because it is lawful to do so, but the discretion in this regard has to be exercised on sound principles of law (See Nirmala Anand Vs. Advent Corpn. (P) Ltd., (2002)8 SCC 146 , Jayakantham and Others vs. Abaykumar, (2017)5 SCC 178 , Shivaji Yallappa Patil Vs. Ranajeet Appasaheb Patil and Others, (2018)16 SCC 725 ). 10. In the backdrop of the aforesaid well settled legal principles, the facts of the case in hand may be examined. We have carefully gone through the plaint. In the plaint, in paragraphs 1, 2 and 3 , the plaintiff has stated that in furtherance of the agreement for sale dated 01.03.2007, the defendant No.1 has received an amount of Rs.6,00,000/-.
In the backdrop of the aforesaid well settled legal principles, the facts of the case in hand may be examined. We have carefully gone through the plaint. In the plaint, in paragraphs 1, 2 and 3 , the plaintiff has stated that in furtherance of the agreement for sale dated 01.03.2007, the defendant No.1 has received an amount of Rs.6,00,000/-. However, in paragraph 7, the plaintiff has stated about the execution of another agreement on 02.03.2007, in which the sale consideration was fixed at Rs.30,87,000/-. Thus, it is pertinent to mention here that under the first agreement, the sale consideration was mentioned by the plaintiff to be Rs.6,00,000/-, whereas in the second agreement, the sale consideration has been mentioned by the plaintiff to be Rs.30,87,000/-. In the light of the aforesaid pleadings, the relevant extract of the prayers made in the plaint are reproduced below for the facilitating of reference: “(3) In the alternate, it is further prayed that, for any lawful reasons, if this Hon’ble court comes to the conclusion that, the relief of specific performance cannot be granted to plaintiff, refund of sale consideration of Rs.6,00,000=00 (Rupees Six Lakhs) along with interest and costs of this suit may kindly be awarded. (4) It is further submitted that, the plaintiff will also abide by the directions of this Hon’ble Court to pay the balance sale consideration amount of Rs.24,86,000=00 (Twenty Four Lakhs Eighty Six Thousand) payable to the plaintiff, if the Hon’ble Court comes to the conclusion that, the plaintiff has to pay Rs.24,86,000=00 (Twenty Four Lakhs Eighty Six Thousand) to the defendant No.1 under the so-called unregistered deed of agreement of sale dated: 02-03-2007 so executed by the defendant No.1 in favour of the plaintiff towards the security of the suit Regd., Deed of agreement of sale of the suit land dated: 01-03-2009, for the ends of justice and equity.” 11. The power of attorney of the plaintiff namely her husband, Y.Vittal, has been examined as P.W.1. In paragraph 6 of his evidence, the aforesaid witness has stated about the execution of the second agreement for a consideration of Rs.30,87,000/- and has further stated that the sale deed was to be executed within a period of six months. It is pertinent to mention here that the aforesaid agreement is an unregistered agreement.
In paragraph 6 of his evidence, the aforesaid witness has stated about the execution of the second agreement for a consideration of Rs.30,87,000/- and has further stated that the sale deed was to be executed within a period of six months. It is pertinent to mention here that the aforesaid agreement is an unregistered agreement. The plaintiff has sought the relief of specific performance of the contract in respect of the second agreement which was executed for a sale consideration of Rs.30,87,000/-. Thus, the Trial Court has rightly come to a conclusion that the plaintiff has sought the relief of specific performance of the contract in respect of the second agreement for sale dated 02.03.2007 for a consideration of Rs.30,87,000/-. For the aforementioned reason and in view of the evidence of P.W.1 himself, issue No.1 is answered in the negative and against the plaintiff. 12. Now, we may advert to the second issue namely whether or not the plaintiff has approached the Court with clean hands. In this regard, it is pertinent to mention, that even though a mention has been made about the first agreement dated 01.03.2007, yet the relief in the suit has been sought with regard to the specific performance of the contract in respect of the second agreement dated 02.03.2007 for a consideration of Rs.30,87,000/-. The aforesaid second sale agreement is an unregistered sale agreement. It is also pertinent to mention here that the plaintiff had sent the notice on 15.12.2008 (Ex.P.17), whereas the second notice was sent on 13.08.2009 (Ex.P.30). In the first notice dated 15.12.2008, there is no mention about the first agreement dated 01.03.2007. The plaintiff is seeking the relief of specific performance of the agreement dated 02.03.2007, which is unregistered agreement and was executed to avoid payment of duty on the market value of the property. For the aforementioned reasons, we answer issue No.2 in the affirmative, and it is held that the plaintiff has not approached the Court with clean hands. 13. It is pertinent to note that the agreements were executed on 01.03.2007 and 02.03.2007. Under the agreements, the plaintiff and defendant no.1 had agreed to execute the sale deed within a period of six months. We are conscious of the fact that in respect of an agreement for sale of an immovable property, time is not the essence of the contract.
Under the agreements, the plaintiff and defendant no.1 had agreed to execute the sale deed within a period of six months. We are conscious of the fact that in respect of an agreement for sale of an immovable property, time is not the essence of the contract. However, it is pertinent to note that the first notice (Ex.P.17) was sent by the plaintiff after a period of one year and three months to the defendant No.1 asking defendant No.1 to execute the agreement. Thereafter, the second notice was sent on 13.08.2009 in which no reference was made about the first notice dated 15.12.2008 and agreement dated 01.03.2007 and specific performance of the contract was sought in respect of the second agreement i.e., 02.03.2007, which was executed for a sale consideration of Rs.30,87,000/-. It is pertinent to mention here that, along with notice dated 15.12.2008, a cheque (Ex.P.34), dated 30th July 2008 for a consideration of Rs.24,86,000/- was sent, which obviously had lost its efficacy. For the aforementioned reason, in our opinion, the plaintiff has not been able to prove his readiness and willingness. Accordingly, issue No.3 is answered. 14. So far as issue No.4 is concerned, the defendants No.2 and 3 have asserted that they are bona fide purchasers for a valuable consideration and have made due enquiry with regard to title of the defendant No.1. The defendant No.2 has been examined as D.W.2, who has denied in his examination-in-chief, that he had any prior knowledge of the agreement executed by the defendant No.1 in favour of the plaintiff. However, in his cross-examination, he has admitted that he has not seen any other document except the notice which was published in daily ‘Vijaya Karnataka’, (Ex.D.1) dated 06.04.2008. The encumbrance certificate Ex.P.25 is on record in which the name of the husband of the plaintiff is recorded in respect of the suit property in pursuance of the agreement of sale. Therefore, it is evident that the defendants No.2 and 3 have not made any enquiry prior to purchasing the property in question. Therefore, they cannot be said to be bona fide purchasers for a valuable consideration without having notice of the previous agreement for sale. Accordingly, issue No.4 is answered in the negative and in favour of the appellant. 15.
Therefore, it is evident that the defendants No.2 and 3 have not made any enquiry prior to purchasing the property in question. Therefore, they cannot be said to be bona fide purchasers for a valuable consideration without having notice of the previous agreement for sale. Accordingly, issue No.4 is answered in the negative and in favour of the appellant. 15. The Trial Court on the basis of the meticulous appreciation of the evidence on record has recorded the findings and the discretion to deal with the prayer for specific performance of the contract has been exercised on sound principles of law. In view of the findings recorded by us on issue Nos.1 to 3, the relief of cancellation of sale deed executed by the defendant No.1 in favour of the defendants No.2 and 3 cannot be granted to the plaintiff. 16. In view of the preceding analysis, we concur with the view taken by the trial Court. In the result, the appeal is dismissed with costs.