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2021 DIGILAW 887 (KAR)

Shakeeruddin v. Eknath Patil

2021-09-27

ASHOK S.KINAGI

body2021
JUDGMENT : Ashok S.Kinagi, J. This appeal is filed by the defendant challenging the judgment and decree dated 09.12.2016, passed in R.A.No.7/2014, confirming the judgment and decree dated 30.11.2013, passed in O.S.No.206/2009. 2. For the sake of convenience, parties are referred to as per their ranking before the Trial Court. Appellant is the defendant and respondent is the plaintiff before the Trial Court. 3. Facts giving rise to the filing of the appeal briefly stated are as under : The case of the plaintiff is that the defendant is the absolute owner and possessor of land bearing Sy.No.54/1, totally measuring 23 acres 32 guntas including the suit land measuring 1 acre 5 guntas situated at Village Malkapur, Taluka and Dist. Bidar. The name of the defendant is appearing in the Record of Right of suit land as the exclusive owner and possessor of the same. The defendant has purchased the said land from previous owner under the registered sale deed dated 23.12.2000, and became the exclusive owner and possessor of the same. The defendant due to his family and shariya necessities and to pay off the debts, agreed to sell the suit land in Sy.No.54/1 to the extent of 1 acre 5 guntas. Accordingly he approached the plaintiff. The plaintiff agreed to purchase the suit land and accordingly plaintiff and defendants have mutually settled the valuation of the suit land at Rs.80,000/- and the same was agreed by both of them in the presence of the witnesses. The defendant executed a registered agreement of sale dated 18.09.2008, for the sale of suit land in favour of the plaintiff. While executing the registered agreement of sale, the defendant received part consideration amount of Rs.70,000/- out of total consideration of Rs.80,000/-. It was agreed that the balance amount of Rs.10,000/- to be payable at the time of execution of final registered sale deed of suit land and it was agreed that the defendant would execute a registered sale deed within a period of one year from the date of execution of agreement of sale by receiving balance consideration amount. As per the terms and conditions of the agreement of sale dated 18.09.2008, the plaintiff has arranged the balance consideration amount of Rs.10,000/- and requested the defendant to execute registered sale deed in favour of plaintiff by receiving the balance consideration amount of Rs.10,000/-. As per the terms and conditions of the agreement of sale dated 18.09.2008, the plaintiff has arranged the balance consideration amount of Rs.10,000/- and requested the defendant to execute registered sale deed in favour of plaintiff by receiving the balance consideration amount of Rs.10,000/-. The plaintiff was ready and willing to get executed the registered sale deed of the suit land and ready to pay the registration charges and stamp duty, but the defendant went on prolonging the matter. The plaintiff was and is ready to perform his part of contract and ready to pay the balance consideration, but the defendant is not ready to perform his part of contract. The plaintiff got issued a legal notice on 11.09.2009, by registered post. The registered envelop returned with an endorsement as 'insufficient address and for want of house number', on 12.09.2009. After receiving the registered envelop by the plaintiff's counsel, the plaintiff got issued another notice on 19.09.2009 with correct house number. Again the advocate of the plaintiff received the postal envelop with an endorsement that 'addressee left without instruction'. The defendant is purposely avoiding to execute the registered sale deed of suit land in favour of plaintiff. Hence the plaintiff is constrained to file a suit for specific performance of contract. 3.1. Defendant filed written statement contending that the defendant is not alone the owner of land in Sy.No.54/1 to an extent of 1 acre 5 guntas. His brothers are also joint owners. The defendant had purchased the said property through the funds arranged by the brothers of defendant and their family members who have got equal share in the suit land and the sale deed is nominally purchased in the name of defendant under registered sale deed dated 23.12.2000. It is contended that defendant No.1 is in need of money for running poultry business in the suit land and approached the plaintiff for providing a hand loan to the tune of Rs.70,000/- and the plaintiff asked security for repayment and accordingly an agreement of sale is executed by the defendant in favour of plaintiff for the sake of security. The said agreement of sale is not an agreement of sale, but it is a security for the repayment of hand loan. The said agreement of sale is not an agreement of sale, but it is a security for the repayment of hand loan. It is contended that as per the terms of agreement between the plaintiff and defendant, the defendant before completion of one year period, has approached the plaintiff and requested the plaintiff to take back the hand loan which is received by the defendant from the plaintiff and also to execute cancellation of agreement of sale as agreed by the plaintiff while providing loan to the defendant. The plaintiff, at first instance, avoided to receive the said amount from the defendant and subsequently filed the present suit by creating a wrong record of issuing notice to the defendant. It is contended that as on the date of agreement of sale, the valuation of the land is Rs.15 lakhs per acre as per the prevailing market value and the said land is within the municipal limits of Bidar City and used for house site purpose and not for agricultural land. It is further contended that the house of the defendant is situated in the said land and defendant is conducting poultry business in the said land by erecting shed in the said land. It is further contended that the defendant even today is ready to pay the loan amount and the defendant never agreed for alienation of the same. Hence prayed to dismiss the suit. 3.2. The Trial Court, on the basis of pleadings of parties, framed the following issues: "1. Whether the plaintiff proves that, the defendant executed the agreement of sale bearing document No.3479/2000-01 dated 23.12.2000 agreeing to sell suit land to plaintiff for Rs.80,000? (ought to be douc.No.3354/08-09 dated 18.09.2008) 2. Whether the plaintiff further proves that, he paid Rs.70,000/- on date of agreement as part consideration? 3. Whether plaintiff further proves that, he is always ready and willing to perform his part of contract? 4. Whether defendant proves that, said agreement was executed by him as a security to loan transaction between himself and plaintiff? 5. Whether plaintiff is entitled for relief of specific performance of contract? 6. What order or decree?" 3.3. Plaintiff in order to prove his case, examined himself as PW-1 and examined one witness as PW-2 and got marked Ex.P1 to P11. On the other hand, defendant was examined as DW-1 and got marked Ex.D1. 5. Whether plaintiff is entitled for relief of specific performance of contract? 6. What order or decree?" 3.3. Plaintiff in order to prove his case, examined himself as PW-1 and examined one witness as PW-2 and got marked Ex.P1 to P11. On the other hand, defendant was examined as DW-1 and got marked Ex.D1. The Trial Court, after recording evidence and considering the material on record, held that the plaintiff has proved that the defendant executed agreement of sale bearing document No.3354/2008-2009 dated 18.09.2008 agreeing to sell the land to the plaintiff for Rs.80,000/- and further held that the plaintiff has proved that he has paid Rs.70,000/- on the date of agreement as part consideration and further held that the plaintiff has proved that he was always ready and willing to perform his part of contract. The Trial Court further held that the defendant has failed to prove that the agreement was executed by him as a security to the loan transaction between himself and the plaintiff and further held that the plaintiff is entitled for the relief of specific performance of contract and consequently decreed the suit of the plaintiff and directed the defendant to execute a registered sale deed and further directed the plaintiff to deposit the balance consideration of Rs.10,000/- within 3 months from the date of judgment. 3.4. The defendant aggrieved by the judgment and decree passed by the Trial Court, filed an appeal in R.A.No.7/2014. The First Appellate Court framed the following points for consideration: "1. Whether the defendant proves the true nature of agreement of sale dated 18.09.2008 is security deed for the loan of Rs.70,000/- availed by him from respondent? 2. Whether the escalation of price is hardship to the defendant to avoid the execution of sale deed? 3. Whether the judgment passed by the Trial Court needs interference? 4. What order or decree?" 3.5. The First Appellate Court, after re-appreciation of the evidence on record, held point Nos.1 and 2 in negative and point No.3 partly in affirmative and consequently modified the judgment and decree passed by the Trial Court and held that the value of the suit schedule property is Rs.3,54,375/- and directed the plaintiff to pay the balance amount of Rs.2,84,375/- to the plaintiff. Hence, the defendant aggrieved by the judgment and decree passed by the First Appellate Court, has filed the instant appeal. 4. Hence, the defendant aggrieved by the judgment and decree passed by the First Appellate Court, has filed the instant appeal. 4. Heard learned counsel for the defendant and learned counsel for the plaintiff. 5. Learned counsel for the defendant submits that the transaction is a loan transaction, but not a sale transaction. He further submits that the market value of the suit land was Rs.26,50,000/- as on the date of execution of agreement of sale and in support of his contention he submits that the defendant has produced valuation report issued by the licenced valuer as per Ex.D1. He further submits that the Courts below have not considered the concept of hardship and undue advantage in a proper spirit. The intention of the defendant was not to alienate the property, but the agreement of sale was executed only for the purpose of security of the loan obtained by the defendant from the plaintiff. He further submits that the Courts below have not judicially exercised the discretion in granting relief of specific performance. Hence, on these grounds, he prays to allow the appeal. 6. Per contra, learned counsel for the plaintiff submits that the plaintiff has agreed to sell the suit land for consideration of Rs.80000/-. Accordingly the plaintiff paid Rs.70,000/- towards earnest money and plaintiff was and is ever ready to perform his part of contract, but the defendant failed to perform his part of contract. He further submits that the plaintiff got issued a legal notice calling upon the defendant to receive the balance consideration amount and to execute the registered sale deed, but the defendant has purposely avoided to receive the legal notice. He further submits that the Courts below have properly exercised the discretion under Section 20 of the Specific Relief Act and passed impugned judgment and decree and prays to dismiss the appeal. 7. This Court has admitted the appeal on the following substantial question of law: "Whether the courts below were justified in decreeing the suit for specific performance and exercise of said discretion is based on sound judicial principles indicated in Section 20 of the Specific Relief Act, 1963?" 8. Perused the records and considered the submissions made by learned counsel for the parties. 9. Perused the records and considered the submissions made by learned counsel for the parties. 9. The case of the plaintiff is that the defendant is the absolute owner of suit land and the defendant was in need of money for family and legal necessity and hence approached the plaintiff and requested to purchase the suit land for Rs.80,000/-. The plaintiff agreed to purchase the suit land for consideration of Rs.80,000/-. Accordingly, the plaintiff paid Rs.70,000/- as on the date of execution of registered agreement of sale dated 18.09.2008, and agreed to pay the balance consideration of Rs.10,000/- and the defendant after receiving the balance consideration amount, agreed to execute the registered sale deed. The plaintiff in support of his case, examined himself as PW-1 and he has reiterated the plaint averments in the examination-in-chief and produced copy of original registered agreement of sale. The defendant admitted the signature and also execution of agreement of sale, but denied that the transaction is a sale transaction and in fact it was a loan transaction and agreement of sale was executed for the security towards loan alleged to have been obtained by him. The recital of Ex.P1 clearly shows that it is purely an agreement of sale in respect of suit property and further the plaintiff, in order to prove the execution of agreement of sale, examined the attesting witness as PW-2 who has deposed that the defendant has executed an agreement of sale by receiving earnest money of Rs.70,000/- and agreed to execute a sale deed within one year from the date of execution of agreement of sale. He has deposed that sale talks took place in his presence in the house of the plaintiff. In view of the admission of defendant and also evidence of PW-1 and PW-2, the plaintiff has proved the execution of registered agreement of sale dated 18.09.2008. The plaintiff in order to establish that he was ready and willing to perform his part of contract, the plaintiff got issued a legal notice as per Ex.P5 on 11.09.2019, showing the address of the defendant as Shakeeruddin, S/o Md. Zaheeruddin, R/o Opp. Mumtaz Function Hall, Noor Khan Taleem, Proper Bidar. The said postal cover was returned with an endorsement 'insufficient address, want of house number' and returned to the sender. Zaheeruddin, R/o Opp. Mumtaz Function Hall, Noor Khan Taleem, Proper Bidar. The said postal cover was returned with an endorsement 'insufficient address, want of house number' and returned to the sender. After the receipt of postal cover, the plaintiff once again issued legal notice dated 19.09.2009, as per Ex.P6 showing the address as Shakeeruddin, S/o Md. Zairuddin, R/o House No.4-2-10, Opp. Mumtaz Function Hall, Noor Khan Taleem, Proper Bidar. The said postal cover was returned with an endorsement 'addressee left without instruction' and returned to the sender. The plaintiff in the cause-title has shown the same address as shown in Ex.P10, wherein the summons has been served on the defendant on the very same address. From the perusal of the records, the defendant has avoided to receive the legal notice sent by the plaintiff. From the perusal of Ex.P5 and P6, it is amply clear that the plaintiff was ready and willing to perform his part of contract. On the contrary, defendant was not ready to perform his part of contract. The Courts below after examining the records were justified in recording a finding that the defendant has executed an agreement of sale and not a loan transaction. 10. It is the case of the defendant that as on the date of execution of agreement of sale, the value of the suit property was more than Rs.25 lakhs. In order to substantiate the defence, the defendant has produced a valuation certificate issued by a private engineer, as per Ex.D1. In order to prove the contents of Ex.D1, the defendant has not examined the author of the document and further the defendant has not produced the valuation report of the Sub-Registrar. Except oral evidence of DW-1, the defendant has not produced any records to show that as on the date of execution of agreement of sale, the value of the suit property was more than Rs.26,50,000/-. The only grievance of the defendant is that the market value of the suit land is more than Rs.25 lakhs as on the date of agreement of sale. That in order to exercise the discretion to decreeing the specific performance, Section 20 provides discretion as to decreeing the suit for specific performance, which reads as under : "20. The only grievance of the defendant is that the market value of the suit land is more than Rs.25 lakhs as on the date of agreement of sale. That in order to exercise the discretion to decreeing the specific performance, Section 20 provides discretion as to decreeing the suit for specific performance, which reads as under : "20. Discretion as to decreeing specific performance – (1) The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal. (2) The following are cases in which the Court may properly exercise discretion not to decree specific performance :- (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff; or (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. Explanation 1.- 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). Explanation 2.- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract." Explanation (1) of Section 20, provides that mere inadequacy of consideration 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. 11. 11. The First Appellate Court, by exercising discretion under Section 20 of the Specific Relief Act, has held that the market value of one acre of land in Malkapur is Rs.3,15,000/- as per Kaveri Website of Department of Registration and the suit property is measuring 1 acre 5 guntas and valued the suit property at Rs.3,54,375/- and ordered the plaintiff to pay the balance amount of Rs.2,84,375/- to the defendant and directed the defendant to execute a sale deed in respect of the suit property within a period of three months. The Courts below have rightly exercised the discretion under Section 20 of the Specific Relief Act. 12. In view of the above discussion, I answer the substantial question of law in affirmative, against the defendant and consequently, the appeal is partly allowed by way of modification. Consequently, judgment and decree of trial Court is modified. However, in view of long lapse of time, appreciation of the value of the land, it was suggested to the respondent and the respondent had agreed to deposit a further sum of Rs.3,45,625/- to the credit of the suit in the Trial Court within a period of 3 months from today and on the deposit so made, the respondent shall be entitled to registered sale deed executed within a period of 3 months thereafter. In case the appellant refuses to execute a registered sale deed, it is open to the respondent to get the sale deed executed through the Trial Court.