IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF JULY 2019 BEFORE THE HON’BLE MRS. JUSTICE K.S.MUDAGAL REGULAR SECOND APPEAL NO.3/2019 BETWEEN:
1. SMT.JENDHU BI W/O JAFFAR SAB AGED ABOUT 47 YEARS 2. MR.MAHABOOB S/O JAFFAR SAB AGED 29 YEARS 3. SMT.JABEENA D/O JAFFAR SAB AGED 23 YEARS 4. SRI IRFAN S/O JAFFAR SABI AGED ABOUT 23 YEARS ALL ARE R/O MALAVAGOPPA SHIVAMOGGA – 577 222 … APPELLANTS (BY SRI VARADARAJ R.HAVALDAR, ADVOCATE) AND:
MR.ANJAN KUMAR S/O VENKATARAMANAIAH AGED ABOUT 49 YEARS BUSINESSMAN R/O 4TH CROSS, ‘A’ BLOCK SHARAVATHI NAGAR SHIVAMOGGA – 577 202 … RESPONDENT (BY SRI P.N.HARISH, ADVOCATE FOR C/R) THIS RSA IS FILED UNDER SECTION 100 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED:14.11.2018 PASSED IN R.A.NO.32/2016 ON THE FILE OF THE III ADDITIONAL DISTRICT JUDGE, SHIVAMOGGA, DISMISSING THE APPEAL AND CONFIRMING THE JUDGMENT AND DECREE DATED 18.07.2016 PASSED IN O.S.NO.162/2012 ON THE FILE OF THE II ADDITIONAL SENIOR CIVIL JUDGE, SHIVAMOGGA.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY, THE COURT DELIVERED THE FOLLOWING:
J U D G M E N T This second appeal of the defendants arises out of the judgment and decree dated 14.11.2018 in Regular Appeal No.32/2016 passed by the III Additional District Judge, Shivamogga.
2. By the impugned judgment and decree, the First Appellate Court dismissed the appeal and confirmed the judgment and decree dated 18.07.2016 in O.S.No.162/2012 passed by the II Addl.Senior Civil Judge at Shivamogga. By the said judgment and decree, the Trial Court had partly decreed the suit rejecting the claim for specific performance and grating refund of earnest money with interest.
3. The appellants were the defendants and respondent was the plaintiff in O.S.No.162/2012. For the purpose of convenience, parties will be referred to henceforth as per their rankings before the trial Court.
4. Subject matter of the suit was site No.29 bearing Municipal khatha No.682/303/265 measuring 25 ft x 60 ft with a Mangalore tiled house situated at Ward No.14, Malavagoppa, Shimoga City.
5. The case of the plaintiff in brief is as follows:
That defendant No.1 was the owner of the suit property. She entered into a registered agreement of sale dated 11.01.2011 agreeing to sell the suit property in favour of plaintiff for a consideration of `6,20,000/- and received `5,00,000/- as earnest money on the date of the agreement.
As per the terms of the agreement, defendants were required to furnish the original title deeds within eleven months from the date of the agreement, receive balance consideration and execute the agreement of sale. The title deeds were with City Co-operative Bank Limited, Shimoga, as the vendor of the first defendant had deposited them with the said Bank for availing loan on the charge of the property.
Since defendants could not handover the title deeds on 19.1.2012, defendant No.1 on behalf of the other defendants also executed an endorsement on 19.1.2012 extending five months’ time to execute the sale deed and comply the other terms of the sale agreement. Even thereafter the defendants failed to perform their part of contract. Therefore, plaintiff got issued notice dated 9.10.2012 to defendants-1 and 2. Defendant No.1 refused to receive the notice and defendant No.2 though received the notice did not reply or comply the notice.
In the meantime, the City Co-operative Bank Limited, Shimoga passed an award against the vendor of the first defendant for recovery of loan and brought the property for sale in auction by public notice dated 26.11.2012 for execution of that award. To save the property, plaintiff himself deposited `3,43,622/- to satisfy the award and got released the title documents. Defendants without executing the sale deed are trying to alienate the property to the third parties, therefore, the suit.
6. Defendant Nos.1 and 2 filed the written statement. Their defence was as follows:
The execution of agreement of sale, endorsement and the transaction were denied. First defendant purchased the property from one S.K.Venkatesh subject to charge of Co-operative Bank. Said Venkatesh had assured defendant No.1 that he will clear the loan but failed to do so. Therefore, she has paid `1,02,000/- to the said Bank for clearance of the loan. S.K.Venkatesh and the plaintiff are the friends. First defendant had borrowed loan of `4,00,000/- from the plaintiff. In the guise of getting released the property from the City Co-operative Bank Limited and security for repayment of `4,00,000/-, plaintiff got created the agreements and endorsement. In addition to those documents, the first defendant had furnished the surety of Hassan s/o Mohammed for the loan of `4,00,000/-. He had also furnished his property records as security for repayment of the loan. While returning documents of property to Hassan, pressurizing him plaintiff collected `2,00,000/- from him. Defendant No.1 has paid `1,80,000/- towards discharge of loan, thus, the whole loan of the plaintiff is discharged.
7. On the basis of such pleadings, the trial court framed the following issues:
1. Whether the plaintiff proves that the 1st defendant/on behalf of minor defendant No.3 and 4 executed registered sale agreement dated 11.01.2011 and agreed to sell the suit schedule property and received advance as per terms of agreements?
2. Whether the plaintiff proves that he is ready and willing to perform his part of contract and defendant failed to perform his part of contract?
3. Whether the plaintiff proves that he has cleared the loan due to City Co-operation Bank Ltd., Shivamogga regarding schedule property on 29.11.2012 through challan No.S.R.L.4448 and deemed to be paid whole sale consideration/excess amount as stated in the plaint?
4. Whether the defendant proves that she has borrowed a loan of `4,00,000/- and agreed to repay interest at 18% p.a., and plaintiff created alleged registered agreement?
5. Whether the plaintiff is entitled to the relief of Specific Performance of Contract as claimed in the plaint?
6. Whether the plaintiff is entitled to the alternative relief of refund of sale consideration of `6,20,000/- with interest at 2% p.a., from the date of the sale agreement till realization and recovery of `2,23,960/- with interest at 14% p.a., from 29.11.2012?
7. What Decree or Order?
8. The parties adduced evidence. The trial court after hearing the parties partly decreed the suit as aforesaid on the following grounds:
(i) The execution of registered agreement of sale Ex.P1 and endorsement Ex.P2 is proved by the evidence of PWs-1 to 5;
(ii) The defendants have failed to prove the defence that Exs.P1 and P2 were obtained by the plaintiff as security for repayment of the loan and the documents were fabricated.
(iii) The payment of earnest money of `5,00,000/- is proved by the aforesaid evidence and Exs.P1 and P2 and the evidence of the witnesses;
(iv) Admittedly, the City Co-operative Bank Limited had passed the award as per Ex.P15 and brought the property for auction by notices Exs.P18 and P19;
(v) The evidence of PWs-1 and 5 and Ex.P4 the release deed executed by the Bank prove the release of the suit property by the Bank to plaintiff;
(vi) The possession of Exs.P1 to P4 by the plaintiff leads to the inference of execution of agreement of sale;
(vii) The defendants not replying to notice leads to adverse inference against them;
(viii) Since the suit property is the only property for the defendants, if decree for specific performance of contract is granted, that causes hardship to the defendants. Therefore, the plaintiff is entitled only for decree of earnest money and amount paid to the Bank with interest.
9. The defendants challenged the said judgment and decree before the III Additional District Judge, Shivamogga in R.A.No.32/2016 as aforesaid. The first appellate court by the impugned judgment and decree concurred with the findings and reasonings of the trial court and dismissed the appeal.
10. Sri.Varadaraj R.Havaldar, learned Counsel for the appellants – defendants seeks to assail the judgment and decrees of the courts below on the following grounds:
(i) Mere admission of the signatures on a document does not amount to proof of the document;
(ii) The attestors to Exs.P1 and P2 were not examined to prove said document;
(iii) Though PW-1 states that he paid the amount before the Sub-Registrar on Ex.P1, there is no such endorsement of the Sub-Registrar regarding payment of `5,00,000/- before him;
(iv) Bank extracts except Ex.D13 Passbook proved the payment of `1,90,000/- to the plaintiff and Exs.D7 to D12 the challans coupled with evidence of PW-5 proved the payment of `82,000/- to the City Co-operative Bank Limited towards discharge of loan of Venkatesh;
(v) Ex.D1 the acknowledgement given by the plaintiff proves payment of `2,00,000/- by Hassan s/o Mohammed towards discharge of loan of first defendant payable to the plaintiff;
(vi) The courts below did not consider Exs.D1, D7 to D12 and D13, thereby the judgments and decrees of the courts below suffer perversity;
(vii) Non-consideration of such documentary evidence and other evidence on record amount to substantial question of law.
In support of his contentions, he relies upon the following judgment:
1. Sri.N.M.Ramachandraiah and Another –vs- The State of Karnataka Represented by its Secretary and Others ILR 2007 KAR 4020.
11. Per contra, Sri.P.N.Harish, learned Counsel for the respondent – plaintiff seeks to support the impugned judgment and decree of the courts below on the following grounds:
(i) Defendants admitted the execution of Exs.P1 and P2 but contended that the said documents were executed as security for repayment of loan and defendants failed to prove said evidence;
(ii) Exs.D7 to D12 did not pertain to the relevant period of time and relevance of those documents with the loan of the vendor of the defendant was not proved;
(iii) To prove Ex.D1, the beneficiary of the document was not examined and relevancy of that document was also not proved;
(iv) The defendants did not reply to the notice at the earliest point of time to raise all such defence;
(v) Defendants in their evidence unequivocally admitted the execution of documents;
(vi) The award passed by the City Co-operative Bank Limited and the satisfaction of the same by the plaintiff were not disputed;
(vii) On sound appreciation of the evidence on record, the courts below accepted Exs.P1 and P2 and partly decreed the suit. The case does not involve any substantial question of law.
12. This being a second appeal under Section 100 CPC can be admitted for hearing only if it is shown that the matter involves a substantial question of law for consideration.
13. What is the substantial question of law and when High Court can interfere when there are concurrent findings of the courts below were dealt with by the Hon’ble Supreme Court in the following judgments:
1. Santosh Hazari –vs- Purushottam Tiwari (Dead) by LRs. - AIR 2001 SC 965;
2. Gurnam Singh (Dead) by LRs & Others –vs- Lehna Singh (Dead) by LRs. AIR 2019 SC 1441.
14. In the aforesaid judgments, it was held that on the questions of facts, the first appellate court is the last court unless it is shown that the judgment of the courts below suffer perversity. It was further held that, all questions of laws are not the substantial questions of law and to be a substantial question of law, there must be first a foundation laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case.
15. In Santosh Hazari’s case referred to supra, it was further held that even on the question of law, the first appellate Court is a final Court of law in the sense that, even if its decision on a question of law is erroneous may not be vulnerable before the High Court in second appeal as the High Court’s jurisdiction has now ceased to be available to correct the errors of law or the erroneous findings of the first appellate Court even on questions of law unless such question of law be a substantial one.
16. In Gurnam Singh’s case referred to supra, referring to its earlier decisions, the Hon’ble Supreme Court held that in a second appeal under Section 100 of the CPC, the High Court cannot substitute its own opinion to that of the First Appellate Court, unless it finds that the conclusions drawn by the lower Court were contrary to the mandatory provisions of the applicable law, the judicial precedents laid by the Apex Court or based on inadmissible evidence or no evidence.
17. Now this Court has to see whether the case on hand satisfies all the aforesaid norms and involves a substantial question of law.
18. Admittedly the suit property originally belonged to one S.K.Venkatesh. The first defendant purchased the same from him under Ex.P3 the registered sale deed dated 4.11.2010. Ex.P3 itself showed that at the time of sale in favour of the first defendant, there was encumbrance of `1,88,000/- on the property payable to the City Co-operative Bank Limited, Shimoga. Ex.P3 further shows that defendant No.1’s vendor S.K.Venkatesh had created charge on the property in favour of the said Bank depositing the title deeds with the Bank.
19. It was agreed in Ex.P3 that defendant No.1 shall discharge said loan and collect the title deeds of the property. Ex.P3 was defendant No.1’s own document. Therefore, it was not open to her to contend that loan was to be repaid by Venaktesh and he defrauded her by colluding with plaintiff.
20. The sole question was whether execution of Ex.P1 the agreement of sale dated 11.01.2011 and Ex.P2 the endorsement dated 19.1.2012 were proved or not. Ex.P1 was a registered document. It contained the recitals to the effect that `5,00,000/- is received as advance consideration and `1,20,000/- was to be paid within eleven months and the vendor shall handover the original documents, receive balance consideration and execute the sale deed.
21. PWs-1 and 2 were the attestors to Ex.P2.
Though defendants contended that those documents were executed as security for repayment of loan, to prove such fact except self-serving testimony of DW- 1, she did not lead any evidence. Further, DW-1 in her cross-examination admitted that Venkatesh had borrowed the loan and she had agreed to repay the same as mentioned in Ex.P3.
22. In para-6 of her cross-examination DW-1 admits that while purchasing the property, she obtained the sale deed Ex.P3 understanding the contents of the same and she has no document in proof of payment of the loan amount after the sale deed Ex.P3. She unequivocally admits that she has executed agreement in respect of the suit property in favour of the plaintiff. At page 11 of her deposition in first paragraph, she admits that after execution of the sale deed by Venkatesh, the agreement of sale in favour of the plaintiff is executed.
23. Learned Counsel for the appellants submits that those are not her admissions and she has admitted only the signatures. She has given such admissions with reference to the document, therefore, it cannot be said that they were not admissions.
24. Further, before filing the suit, notice Ex.P8 was issued to defendants-1 and 2. Defendant Nos.1 and 2 are the mother and son. If really Exs.P1 and P2 were the outcome of fraud or fabrication, the conduct of a person of ordinary prudence could have been issuing reply denying execution of the same. But no such reply was issued to the notice.
25. Exs.D-7 to D-12 pertained to the period 2006 to 2008. The sale deed Ex.P3 in favour of defendant No.1 itself was executed in 2010. The agreement Ex.P1 states that as on that date, there was a loan balance of `1,88,000/- and that shall be discharged by defendant No.1. Therefore, Exs.D7 to D12, which related to a period much prior to Ex.P3, were rightly held irrelevant by the courts below.
26. So far as Ex.D1, the defendants did not examine Hassan, the beneficiary of the said document to prove the document and that the sum of `2,00,000/- mentioned therein was paid towards discharge of loan of defendants payable to the plaintiff.
27. Though it was contended that Ex.D13 the passbook standing in the name of husband and son of first defendant shows the payment of `1,90,000/- to the plaintiff, firstly the payment under the said document was not proved by examining any of the Bank officials or the account holders. Secondly, that payment was prior to the date mentioned in Ex.P1 the agreement of sale. Therefore, that was also not accepted by the courts below.
28. The only defence of the defendants was that they had borrowed loan of `4,00,000/- and that was discharged. But the availment of loan and discharge of the same was not proved. On sound appreciation of the evidence, the courts below rejected such defence and passed decree for repayment of the amount.
29. So far as the judgment in N.M.Ramachandraiah’s case referred to supra, there cannot be any dispute with regard to the principle that the admission of the signatures itself does not amount to proof of the contents of the same. But the evidence discussed above and the other circumstances in the case on hand proved the execution of documents Ex.P1 and P2.
30. So far as the award passed by the City Co- operative Bank Limited, Shimoga and the Bank issuing Ex.P5 the auction notice for recovery of `3,52,960/- and release deed as per Ex.P4 are not in dispute. Those documents, in the ordinary course, will have to be in possession of a person, who discharges the loan. The documents were procured from the custody of the plaintiff. It was not even specifically denied that plaintiff discharged the said loan.
31. Taking into consideration all the aspects, the courts below accepted the contention of the plaintiff that he has repaid loan of `3,43,622/-. The judgment and decree of the courts below do not suffer any perversity. They are not in contravention of any applicable law, judicial precedents or based on inadmissible or no evidence. This Court does not find any substantial question of law in the matter to admit the appeal. Therefore, the appeal is dismissed with costs.
In view of disposal of the appeal, I.A.Nos.1/2019 and 2/2019 stood disposed of.
Sd/- JUDGE KNM/-