IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF JULY, 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.174 OF 2014 C/W R.F.A.No.1896 OF 2013 In R.F.A.No.174 OF 2014 BETWEEN:
1. Smt. Pushpalatha, Aged about 43 years, D/o. Somashekara, W/o. A.S.Srinivas Rao, R/at No.10, Srinivasa Colony, Lalbagh Road, Bangalore-560 027.
Presently R/at Srinidhi Complex, Near Post Office, Madakasira, Ananthpur District, Andhra Pradesh – 515 301.
2. Smt. U. Chanchalabai Aged about 60 years, D/o. Uttamchand, R/at No.87, Sampige Road, Malleswaram, Bangalore-560 003.
Both are represented by their GPA Holder Sri. G.S.Panish, S/o. Somashekar, Aged about 38 years, R/at No.1, Radha Apartments Basappa Road, Shantinagar, Bangalore-560 027.
(By Sri. G.V.Shashikumar, Advocate) AND:
Sri. D.R.Sadananda Murthy S/o. D.Rangaswamy, Aged about 73 years, R/at No.3, Basappa Road, Shantinagar, Bangalore-560 027. (By Sri. O.Shivaram Bhat, Advocate) **** …Appellants …Respondent This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908, against the judgment and decree dated:05-11-2013 passed in O.S.No.7411/1994 on the file of the XXV Additional City Civil Judge at Bangalore City (CCH-23), partly decreeing the suit for specific performance.
In R.F.A.No.1896 OF 2013 BETWEEN:
Sri. D.R.Sadananda Murthy S/o. D.Rangaswamy, Aged about 70 years, Residing at No.3, Basappa Road, Shantinagar, Bangalore-560 027.
(By Sri. O.Shivanand Bhat, Advocate) AND:
1. Smt. Pushpalatha, D/o. Somashekara, Major, Residing at No.10, Srinivasa Colony, Lalbagh Road, Bangalore-560 027.
2. Smt. U. Chanchalabai W/o. Uttamchand, Major, Residing at No.87, Sampige Road, Malleshwaram, Bangalore-560 003.
Both are represented by their GPA Holder Sri. G.S.Panish, S/o. Somashekar, Major, R/at No.1, Radha Apartments Basappa Road, Shantinagar, Bangalore-560 027.
(By Sri. G.V.Shashikumar, Advocate) …Appellant …Respondents **** This Regular First Appeal is filed under Section 96 r/w. Order XLI, Rule-1 of the Code of Civil Procedure, 1908, against the judgment and decree dated:05.11.2013 passed in O.S.No.7411/1994 on the file of the XXV Additional City Civil Judge at Bangalore City (CCH-23), partly decreeing the suit for specific performance.
These Regular First Appeals having been heard and reserved on 09-07-2019, coming on for pronouncement of judgment, this day, the Court delivered the following:
J U D G M E N T Both these appeals have been filed challenging the judgment and decree dated 05-11-2013 passed by the Court of the XXV Additional City Civil Judge at Bangalore City (CCH-23) (hereinafter for brevity referred to as “Trial Court”) in O.S.No.7411/1994, which was a suit for the relief of specific performance of a contract.
2. The plaintiffs in the Trial Court have filed R.F.A.No.174/2014, challenging the rejection of the relief of specific performance, whereas the defendant in the Trial Court has preferred R.F.A.No.1896/2013 seeking restriction of the percentage of interest awarded by the Trial Court to `6% per annum instead of `12% per annum.
3. The plaintiffs had filed an Original Suit in the Trial Court through their Power of Attorney holder against the defendant for the relief of specific performance and the relief of possession in respect of the undelivered portion of the suit schedule property which is a property bearing portion of premises No.3 (old No.14/3) situated in Basappa Cross Road, Shanthinagar, Bangalore-27, measuring East to West 50 ft., on northern side 54 ft., and on southern side 60 ft.
4. The summary of the case of the plaintiffs in the Trial Court was that, the defendant had executed an Agreement to Sell dated 30-06-1993 in their favour in respect of the suit schedule property and had agreed to sell the same at the rate of `200/- per sq. ft. The plaintiffs have paid in all a sum of `2,00,000/- towards part of the sale consideration. It was agreed to execute the Sale Deed within six months as the defendant had to obtain Income Tax Clearance Certificate and Nil Encumbrance Certificate and other clearances from the concerned Departments. The defendant had delivered portion of the suit schedule property on the date of Agreement to Sell but, the defendant failed to take necessary clearances from the Departments and also Income Tax Clearance Certificate. Therefore, at the instance of the defendant, time was extended on 23-12-1993 and Sale Deed was to be executed on or before 30-06-1994. However, at the instance of the defendant, time was further extended upto 30-12-1994.
5. It is further the case of the plaintiffs that, in spite of repeated requests and legal notice dated 02-12-1994 issued to the defendant, he failed to execute the Sale Deed. The legal notice sent by Registered Post Acknowledgement Due was returned without service and the legal notice sent under Certificate of Posting was served on the defendant. The plaintiffs have also stated that they were always ready and willing to perform their part of the contract and even now they are ready and willing to perform their part of the contract by paying the balance of sale consideration. Since the defendant had failed to comply the terms of agreement and the demand made in the notice, the plaintiffs were constrained to file the present suit.
6. In response to the suit summons, the defendant appeared through his counsel and filed his Written Statement. The defendant has disputed the execution of the Agreement to Sell dated 30-06-1993 in favour of the plaintiffs. It is his further case that, he had entered into an Agreement to Sell on 05-11-1989 in favour of the first plaintiff in respect of property bearing No.3 measuring East to West 50 ft. and north to south 25 ft. at the rate of `350/- per sq.ft. which was the lowest rate than the prevailing market value because the first plaintiff had agreed to get the tenants under occupation vacated. The first plaintiff had paid a sum of `50,000/- as an advance amount out of the total agreed value of a sum of `4,37,500/-. The defendant has denied that the plaintiffs have paid part of the sale consideration of a sum of `2,00,000/-. He has stated that he has received only a sum of `1,82,500/- on different dates from 27-10-1989 to 30-06-1993. He further denied that he had delivered a portion of the property agreed to be sold to the plaintiffs. The first plaintiff had paid a sum of `17,500/- to Sri. Vijayachandra, one of the tenants in a portion of the property agreed to be sold to the first plaintiff and got the possession of the same. The defendant had never undertaken to deliver the remaining portion of the property at the time of registration.
The defendant contended that he had not executed an Agreement to Sell dated 30-06-1993 and made any endorsements dated 23-01-1993 and 30-06-1994. The defendant also contended that he was always ready and willing to execute the Sale Deed in favour of the plaintiffs and had approached the first plaintiff on many times. The first plaintiff was always pleading that she was short of money and took time. There was a specific condition that the purchase of property shall be completed within a period of three months. The plaintiffs were never ready to purchase the suit property. Thus, the first plaintiff has forfeited her right to get the Sale Deed executed in her favour by her repeated defaults. There is a breach of Agreement committed by the first plaintiff. As such, the defendant is not liable to sell the property to the predecessors and they have no right to claim any relief.
7. Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration:-
1] Whether the plaintiffs prove that the defendant had executed an agreement to sell in their favour on 30/6/93 agreeing to sell the portion of the suit schedule property?
2] Whether the plaintiffs further prove that the sale price was fixed at Rs.200/- per square feet and they have paid Rs.2 Lakh as an advance?
3] Whether the plaintiffs prove that they have been put into possession of the portion of the suit schedule property by the defendant in pursuance of the agreement of sale dated 30/6/93?
4] Whether the defendant proves that he had entered into an agreement to sell dated 5/11/89 with the first plaintiff and received Rs.1,82,500/- as an advance, at Rs.350/- per square feet out of the total sale consideration?
5] Whether the plaintiffs prove that they were ready and willing to perform their remaining part of contract by paying the balance sale consideration?
6] Whether the defendant proves that he was ready and willing to execute the sale deed in favour of the first plaintiff on ground of short of money committed default in obtaining the sale deed and thereby she forfeited her right to get the Sale Deed?
7] Whether the plaintiffs are entitled to the relief of specific performance?
8] What decree or Order?
Additional issue 1] Whether the defendant proves that the plaint presented by the GPA Holder is not legal on the ground of non-registration and insufficient stamp for GPA?”
The plaintiffs got examined their Power of Attorney holder as PW-1, one more witness as PW-2 and got marked documents from Exs.P-1 to P-20; defendant got himself examined as DW-1 and got marked documents as Exs.D-1 to D-4(a).
The Court Commissioner one Sri.Syed Asgar Imam was examined as CW-1 and his report and two signatures were marked at Exs.C-1, C-2 and C-3 respectively.
8. After hearing both side, the Trial Court answered issue Nos.1, 2, 3 in the ‘affirmative’ and issue Nos.4, 5 and 6 and the additional issue No.1 in the ‘negative’. Though it answered issue No.7 in the ‘negative’, however, it held that the plaintiffs are entitled for refund of earnest money of a sum of `2,00,000/- with interest at the rate of `12% per annum from the date of suit till the date of realisation. With the said finding by its judgment and decree dated 05-11-2013, the Trial Court decreed the suit of the plaintiffs in part against the defendant. The relief of specific performance was rejected, however, the plaintiffs were held entitled for refund of earnest money of a sum of `2,00,000/-with interest at the rate of `12% per annum from the date of the suit till the date of realisation from the defendant. It is challenging the said judgment and decree, both parties have preferred these two appeals as aforementioned.
9. The Lower Court records were called for and the same are placed before this Court.
10. Heard the arguments of the learned counsel for appellants/plaintiffs, learned counsel for respondent/defendant and perused the material placed before this Court including the memorandum of appeal and the impugned judgment and decree passed by the Trial Court.
11. For the sake of convenience, the parties would be henceforth referred to with the ranks they were holding before the Trial Court respectively.
12. Learned counsel for the plaintiffs, i.e. the appellants in R.F.A. No.174/2014 in his arguments submitted that, the Trial Court has held that the Agreement to Sell and the receipt of the partial sale consideration of a sum of `2,00,000/- by the defendant have been proved. Since the address of the defendant/vendor as shown in the plaint is not denied and the summons were served to the same address and also in view of the fact that the defendant has given the very same address even in his Regular First Appeal also, the contention of the defendant that he was not in receipt of the legal notice sent to him by the plaintiffs to the very same address, proves to be a false contention. The defendant himself has admitted about he receiving a partial sale consideration of a sum of `1,82,500/- from the plaintiffs. Further, it is established that the remaining amount of a sum of `17,500/- was paid at the instance of defendant to the tenant – Vijaychandra to get him vacated from the suit schedule premises. Thus, a partial sale consideration of a sum of `2,00,000/- has been proved to be paid by the plaintiffs to the defendant.
Emphasising much on the alleged conduct of the defendant, learned counsel for the plaintiffs further submitted that the Trial Court in its judgment itself has made serious observations about the conduct of the defendant and has observed that the defendant is in the habit of filing multiple litigations only to defeat the entitlement of the plaintiffs for the specific performance of the contract.
Learned counsel for the plaintiffs further submitted that the only point that this Court is required to look into is, the correctness of the finding of the Trial Court about the readiness and willingness of the plaintiffs in performing their part of the contract and their entitlement for the relief of specific performance.
The Trial Court by mis-reading the materials placed before it including the evidence has answered the said issue Nos.5 and 7 in the ‘negative’ which resulted in denial of specific performance of contract in favour of the plaintiffs. He submitted that, the said finding of the Trial Court is erroneous.
He also submitted that PW-1 was not cross- examined by the defendant regarding his capacity to pay the balance amount. No suggestion was put to PW-1 that the plaintiffs were not ready and willing to perform their part of the promise, which aspect the Trial Court has not noticed.
13. Learned counsel for the defendant who is the appellant in R.F.A.No.1896/2013 in his arguments, at the outset, made it very clear that, he would confine his argument only with respect to readiness and willingness on the part of the plaintiffs and correctness of denial of the relief of specific performance to the plaintiffs and with respect to the entitlement of the defendant to claim reduction in the rate of interest which is awarded at `12% per annum.
Thus, the learned counsel for defendant made it very clear that he would not dispute the findings given by the Trial Court with respect to issue Nos.1, 2 and 3 regarding the existence of an Agreement to Sell executed by the defendant in favour of the plaintiffs on 30-06-1993, whereunder, the sale price of the suit schedule property was fixed at `200/- per sq.ft. and he received a sum of `2,00,000/- as advance amount under the said agreement.
The learned counsel for the defendant with respect to the readiness and willingness of the parties to perform their part of the promise under the Agreement submitted that, the plaintiffs except stating about their readiness in their plaint have nowhere whispered about the same in their evidence. Further, they have not produced Bank Account Statement to show that they had sufficient amount in their account to pay the balance of the sale consideration nor they have deposited the balance sale consideration in the Court. Further, they have not even shown any other document to show that they had sufficient fund with them to pay-off the balance of sale consideration, as such, when the plaintiffs have failed to prove that they were ready to discharge their obligation under the contract, they are not entitled for the relief of specific performance.
In support of his arguments, he relied upon few judgments of the Hon’ble Apex Court and two judgments of the Division Bench of this Court which would be referred to at the relevant portion of this judgment hereafterwards.
With respect to the contention of the learned counsel for plaintiffs for awarding of interest at the rate of `18% per annum on the sale consideration refundable by the defendant to the plaintiffs is concerned, learned counsel for the defendant submitted that in view of Section 34 of the Code of Civil Procedure (hereinafter for brevity referred to as “CPC"), the same is not permissible.
14. The suit of the plaintiffs for specific performance of an Agreement dated 30-06-1993 is not dismissed by the Trial Court in-toto. But it has been decreed in part against the defendant with cost. Even though the relief of specific performance is rejected by the Trial Court, but plaintiffs were held entitled for refund of earnest money of a sum of `2,00,000/- with interest at `12% per annum from the date of suit till realisation from the defendant. The finding of the Trial Court in the ‘affirmative’ with respect to issue Nos.1, 2 and 3 and answering issue No.4 in the ‘negative’ has led the Trial Court to hold that the plaintiffs are entitled for refund of earnest money of a sum of `2,00,000/- from the defendant with interest.
15. As against the contention of the plaintiffs that the defendant had executed an Agreement to Sell in respect of the suit schedule property in their favour on 30-06-1993 and had received an advance amount of a sum of `2,00,000/- was opposed by the defendant in his Written Statement as well in his evidence with a contention that the Agreement to Sell was entered by him not with both the plaintiffs, but with plaintiff No.1 alone and also not on 30-06-1993, but it was on 05-11-1989. It was the further contention that the sale price that was fixed in the agreement dated 05-11-1989 was much higher than the one under the alleged Agreement to Sell dated 30-06-1993.
16. It was the further contention of the defendant that the total advance amount received by him as a partial consideration from the plaintiff No.1 under the Agreement to Sell dated 05-11-1989 was for a sum of `1,82,500/- only but not `2,00,000/- as contended by the plaintiffs. It is on that regard, the Trial Court had framed issue Nos.1, 2, 3 and 4.
17. Both the parties have led their extensive evidence covering all those four issues and also got marked documents in their support. While the plaintiffs though got marked both the Agreements to Sell dated 30-06-1993 at Ex.P-1 and another similar Agreement dated 27-10-1989 at Ex.P-7, but their contention was that what was agreed to act upon was the Agreement to Sell dated 30-06-1993 which is at Ex.P-1. Ex.P-2 is the copy of the legal notice dated 02-12-1994 sent on behalf of the plaintiffs to the defendant calling upon him to perform his part of the promise under an Agreement to Sell dated 30-06-1993. The other documents produced and marked at Exhibits ‘P’ series are all supporting documents to corroborate the contention of the plaintiffs. Those documents which included certificate of posting, unserved postal cover, postal receipt and certified copies of the petition, Affidavit and deposition to P & S.C.84/1989 and a copy of judgment in O.S.No.2713/1982 were all produced to show that the conduct of the defendant was not appreciable and that he being the absolute owner of the suit schedule property had installed his sons as the sharers to a portion of suit schedule property only to defeat the specific performance of the Agreement to Sell dated 30-06-1993 in favour of the plaintiffs.
18. One Sri. G.S. Panish who claims to be the elder brother of plaintiff No.1 and General Power of Attorney for both the plaintiffs got himself examined as PW-1, who, in his Examination-in-chief has reiterated the contents of the plaint. The plaintiffs also got examined one Sri. Prakash Nahar as PW-2 who has deposed to the effect that, he was one among the witnesses to Agreement to Sell dated 30- 06-1993 which is at Ex.P-1. He has supported the contents of Ex.P-1 in his evidence.
The defendant who got himself examined as DW-1 has reiterated the transactions taken up by him in his Written Statement and canvassed the point that Ex.P-1 was not his document and that his Agreement to Sell a portion in the suit schedule property for higher consideration was only with plaintiff No.1 on 05-11-1989. In order to support his contention that Ex.P-1 was a doubtful document, the defendant got produced and marked a document at Ex.D-1 which is a copy similar to that of Ex.P-1, however, prepared not on stamp paper and though shown to have been executed by the parties, but without the signatures of the attesting witnesses. It is this circumstance of the case which led the Trial Court to refer the disputed document to a Commissioner who was a handwriting expert, soliciting his report on the disputed signatures on the document. His report which was marked at Ex.C-1 was not favourable to the plaintiffs. The said commissioner was also examined as CW-1. However, the Trial Court by its reasoned order did not accept the opinion of the Commissioner and on its own has come to a conclusion to the effect that defendant had executed Agreement to Sell dated 30-06-1993 which is at Ex.P-1. The Trial Court also held that the admitted receipt of consideration of a sum of `1,82,500/- by the defendant was not under an Agreement to Sell dated 05-11-1989, but it was as a partial consideration under the Agreement to Sell dated 30-06-1993 which is at Ex.P-1. It has further held that another sum of `17,500/- was paid by the plaintiffs to one Sri. Vijayachandra who was a tenant under the defendant in a portion of the suit schedule property to ensure his eviction. By analysing the evidence led before it, the Trial Court also held that the said amount of a sum of `17,500/- also proves to be part of sale consideration under Ex.P-1. Thus, the total amount that has been passed from plaintiffs to the defendant under Ex.P-1 as a partial consideration of the agreed sale value was `2,00,000/- out of a total consideration of a sum of `5,70,000/-. The said answering of the Trial Court to issue Nos.1, 2, 3 in the ‘affirmative’ and issue No.4 in the ‘negative’ has not been challenged or disputed by the defendant.
19. Admittedly, the defendant has not filed any cross objection to the appeal of the plaintiffs under Order XLI, Rule 22 of the CPC. Further, the defendant has filed a separate appeal against the very same impugned judgment and decree, in R.F.A.No.1896/2013, wherein the prayer of the appeal is confined only in challenging the percentage of rate of interest awarded by the Trial Court and nothing beyond it. As such, had the defendant not satisfied with the finding given by the Court below on issue Nos.1, 2 3 and 4 though could have filed a cross objection, but he did not do it. Further, even in his independent appeal in R.F.A.No.1896/2013 also, he confines himself in questioning the awarding of the interest at a particular rate. Thus, it is clear that the defendant is not aggrieved by the finding of the Trial Court on issue Nos.1, 2, 3 and 4. Added to this, as observed above, the learned counsel for the defendant (appellant in R.F.A.No.1896/2013) before commencing his argument has specifically and clearly mentioned that he would confine his argument only with respect to the finding of the Trial Court on issue No.5, i.e. readiness and willingness on the part of the plaintiffs which led to the Trial Court denying the relief of specific performance to the plaintiffs and rate of interest ordered by the Trial Court.
Therefore, when the defendant has repeatedly shown that he is aggrieved only with the rate of interest ordered by the Trial Court and is not aggrieved by the findings of the Trial Court on other issues, this Court in these two appeals need not re- consider or re-analyse the questions involved in issue Nos.1, 2, 3 and 4 framed by the Trial Court.
20. In view of the above observation, the finding of the Trial Court on issue Nos.1,2, 3, and 4 since not being disputed or questioned by either of the parties, the points that remain for consideration by this Court in these two appeals put together are that:
[i] Whether the plaintiffs have proved that they were ready and willing to perform their part of the obligation under contract towards payment of balance sale consideration?
[ii] Whether the Trial Court was justified in denying the relief of specific performance in favour of the plaintiffs?
[iii] Whether the Trial Court was justified in ordering interest to be payable by the defendant at `12% per annum on the refund of earnest money of a sum of `2,00,000/- to the plaintiffs?”
Section 16 of the Specific Relief Act, 1963, (hereinafter for brevity referred to as “S.R.Act”), speaks about the personal bars to relief of specific performance of a contract. Sub-Section (c) of Section 16 reads as below:-
16. Personal bars to relief - Specific performance of a contract cannot be enforced in favour of a person -
(c): “who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
Explanation – For the purposes of clause (c) (i) Where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;
(ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction”
A reading of the above provision along with its Explanation would go to show that, a party who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, is not entitled for the relief of specific performance of a contract. However, where the contract involves payment of money, it is not essential for the plaintiffs to actually tender to the defendant or to deposit in Court any money except when so directed by the Court.
Section 20 of the Specific Relief Act, 1963 makes it clear that granting of a decree of specific performance is discretionary on the part of the Court. However, it prescribes norms or parameters as to when the relief is required to be granted and when not. The said Section 20 reads as below:-
“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 improvement 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.
(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
(4) 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.”
A reading of Section 16(c) and Section 20 of the S.R. Act would go to show that, the discretion to direct ‘specific performance of an Agreement’ has to be exercised on sound, reasonable, rational and acceptable principles. It has to be exercised within the parameters for exercising discretion prescribed under Section 20 of the S.R. Act. The entire facts and circumstances of the case also to be borne in mind. However, the ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts on hand in a given case, which features the experienced judicial mind can perceive without any real difficulty.
21. In order to ascertain when to hold that a party was ready and willing to perform his part of promise/obligation under an Agreement, there are several judicial judgments in the form of precedents. The learned counsel for the defendant relied upon some of the judgments in support of his argument which are as below:-
In the case of N.P. Thirugnanam (D) by LRs. Vs. Dr. R. Jagan Mohan Rao and others, reported in AIR 1996 Supreme Court 116, the Hon’ble Apex Court with respect to Section 16(c) of the Specific Relief Act and more particularly, on the concept of ‘ready and willing to perform’ was pleased to make the following observations at para.5 of its judgment.
“5. It is settled law that remedy for specific performance is an equitable remedy and is in the discretion of the court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under S.20 of the Specific Relief Act 1963 (for short, ‘the Act’). Under S.20, the court is not bound to grant the relief just because there was valid agreement of sale. Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performances of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstances is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The Court may infer from the facts and circumstances, whether the plaintiff was ready and was always ready and willing to perform his part of contract”
The Hon’ble Apex Court in the case of Man Kaur (deceased by LRs.) Vs. Hartar Singh Sangha reported in 2010 AIR Supreme Court Weekly 6198 with respect to Section 16(c) of the S.R. Act was pleased to observe at paragraph 11 of its judgment as below:-
“11. To succeed in a suit for specific performance, the plaintiff has to prove: (a) that a valid agreement of sale was entered by the defendant in his favour and the terms thereof; (b) that the defendant committed breach of the contract; and (c) that he was always ready and willing to perform his part of the obligations in terms of the contract. If a plaintiff has to prove that he was always ready and willing to perform his part of the contract, that is, to perform his obligations in terms of the contract, necessarily he should step into the witness box and give evidence that he has all along been ready and willing to perform his part of the contract and subject himself to cross-examination on that issue. A plaintiff cannot obviously examine in his place, his attorney holder who did not have personal knowledge either of the transaction or of his readiness and willingness. Readiness and willingness refer to the state of mind and conduct of the purchaser, as also his capacity and preparedness on the other. One without the other is not sufficient. Therefore a third party who has no personal knowledge cannot give evidence about such readiness and willingness, even if he is an attorney holder of the person concerned.”
A Division Bench of this Court in the case of Smt. Padmini Raghavan Vs. Mr. H.A. Sonnappa, since dead by his LRs. and others reported in ILR 2014 Kar.233 after referring to several judgments of the Hon’ble Apex Court was pleased to observe with respect to Section 16(a)(b)(c) of the S.R. Act that the plaintiff has to plead and prove not only the terms of agreement but also the readiness and willingness to perform his part of obligation under a contract.
In the said process, the Division Bench of this Court was pleased to make the following observations in its judgment at paragraph 51 which reads as below:
“51.Thus, Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the Court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him to the specific relief. The provision imposes a personal bar. The Court is to grant relief on the basis of the conduct of the person seeking relief”
At paragraph 53, the Division Bench has observed as below:-
“53. Readiness and willingness refer to the state of mind and conduct of the purchaser, as also his capacity and preparedness on the other. One without the other is not sufficient. There is a distinction between readiness to perform the contract and willingness to perform the contract. By readiness may be meant the capacity of the plaintiff to perform the contract which includes his financial position to pay the purchase price. In so far as willingness is concerned, it reflects the mental attitude of the plaintiff to part with or pay the balance sale consideration agreed to be paid. Xxx xxx xxx”
At para.60, the Division Bench has observed as below:
“60. xxx xxx xxx The plaintiff should not only aver, but also prove the readiness and willingness to the satisfaction of the Court. No inferences are permissible in law. Readiness and willingness is purely a question of fact. The plaintiff has to produce before the Court such evidence so as to satisfy the Court that he was ready with the balance sale consideration and he was willing to part with the balance sale consideration.”
Relying upon its previous judgment in the case of Smt. Padmini Raghavan’s case (supra), a co- ordinate Bench of this Court subsequently in the case of Smt. Chandrakanthamma and others Vs. B. Ramakrishnaiah reported in 2015 Supreme Court Cases Online Kar.6141 at paragraph 20 was pleased to observe as below:-
“20. Therefore, not only the plaintiff has to aver his readiness and willingness, he must prove his readiness and willingness by such acceptable evidence on record. The Explanation makes it clear, in proving his readiness and willingness, it is not essential for the plaintiff to actually tender to the defendant or to deposit in Court any money. But nonetheless, when he is called upon prove in a Court of law his readiness and willingness, he must prove by acceptable evidence that on the day he was expected to pay the balance sale consideration agreed upon, either he had ready funds or from where he would have raised the funds as on that day. Raising of the funds or source of funds subsequent to the date of the suit would not prove the plaintiff’s readiness and willingness to perform his part of the contract in terms of the contract agreed upon.”
22. From the above judgments, it is crystal clear that it is not just a plaint averment that the plaintiff was ready and willing to perform his part of the terms of agreement is sufficient to entitle him for the relief of specific performance, but he is also required to prove that he has always been ready and willing to perform his part of the promise under the agreement.
In the instant case, the plaintiffs in their plaint have made an averment that the only obligation of the plaintiffs under the Agreement to Sell was payment of balance of sale consideration at the time of registration of Sale Deed, which they were ready and willing to do so. The plaintiffs have also stated at the time of filing of the plaint that, they were ready and willing to tender balance of sale consideration to the defendant, provided the defendant was ready to execute the Sale Deed and present it for registration. The defendant has denied the same in his Written Statement.
Admittedly, the suit was instituted on behalf of the plaintiffs by their General Power of Attorney holder by name Sri. G.S. Panish. It is the said Sri.G.S. Panish who entered the witness box to lead his evidence on behalf of the plaintiffs in his capacity as a General Power of Attorney holder. As such, the plaintiffs in person did not enter the witness box. Though the plaintiffs examined PW-1, but admittedly, his evidence was confined to only execution of Agreement to Sell at Ex.P-1 by the defendant. He has only stated that he was a witness to the said execution of agreement by the defendant. As such, it is only PW-1 in his capacity as a General Power of Attorney holder who has led evidence with respect to all other issues including the readiness and willingness of the plaintiffs to execute their part of the promise under the agreement.
23. At this juncture, another leg of argument of the learned counsel for the defendant also requires to be considered. It was his further argument that PW-1 being only a Power of Attorney for the plaintiffs cannot give his evidence on the readiness and willingness of the plaintiffs to perform their part of the promise under the agreement.
In his support, he relied upon the judgment of the Hon’ble Apex Court in the case of Hartar Singh Sangha (supra) wherein at paragraph 10 of its judgment, referring to its judgment in Janki Vashdeo Bhojwani Vs. Indusind Bank Ltd. reported in 2005 (2) Supreme Court Cases 217 had extracted a part of the said judgment as below:-
“Order III, Rules 1 and 2, CPC, empowers the holder of power of attorney to “act” on behalf of the principal. In our view the word “acts” employed in Order III, Rules 1 and 2, CPC, confines only in respect of “acts” done by the power of attorney holder in exercise of power granted by the instrument. The term “acts” would not include deposing in place and instead of the principal. In other words, if the power of attorney holder has rendered some “acts” in pursuance of power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter which only the principal can have a personal knowledge and in respect of which the principal in entitled to be cross-examined”
In the case of Mrs. Saradamani Kandappan Vs. Mrs. S. Rajalakshmi and others; Mrs. S. Rajalakshmi and others vs. Mrs. Saradamani Kandappan and another reported in AIR 2011 Supreme Court 3234, after referring to its judgment in Hartar Singh Sangha (supra), the Hon’ble Apex Court at paragraph 47 of its judgment was pleased to observe as below:-
“47. xxx xxx xxx It is an admitted position that the entire transaction was done on behalf of the defendants 1, 2 and 3 by defendant No.4 who alone had complete knowledge of the entire transaction. Fourth defendant has given evidence on behalf of all other defendants. When one of the defendants who is conversant with the facts has given evidence, it is not necessary for the other defendants to be examined as witnesses to duplicate the evidence. The legal position as to who should give evidence in regard to the matters involving personal knowledge have been laid down by this court in Man Kaur (dead) by L.Rs. V. Hartar Singh Sangha (2010) 10 SCC 512 : (2010 AIR SCW 6198). This court has held that where the entire transaction has been conducted through a particular agent or representative, the principal has to examine that agent to prove the transaction; and that where the principal at no point of time had personally handled or dealt with or participated in the transaction and has no personal knowledge of the transaction, and where the entire transaction has been handled by the agent, necessarily the agent alone can give evidence in regard to the transaction. xxx xxx xxx.”
In the instant case, as observed above, the plaintiffs in person have not entered the witness box, but it is their General Power of Attorney holder, Sri.
G.S. Panesh who has entered the witness box and led evidence as PW-1. Nowhere the said witness in his evidence has stated that, he has a personal knowledge about the readiness and willingness of the plaintiffs to perform their part of the obligation under the agreement.
24. As held by this Court in Padmini Raghavan’s case (supra), the readiness may mean the capacity of the plaintiffs to perform their part of obligation under a contract which includes their financial position to pay the purchase price, whereas, the willingness reflects the mental attitude of the plaintiffs to part with or pay the balance sale consideration agreed to be paid.
Interestingly, in the case on hand, even though it is taken that a Power of Attorney holder can give his evidence on behalf of the plaintiffs, even in a suit for specific performance, still, PW-1 though in his evidence has stated that the plaintiffs were always ready and willing to pay the remaining consideration amount, but, has not produced any documents to show that the plaintiffs had any financial capacity too, to pay the balance amount or that the funds to pay the balance amount was available with them.
Learned counsel for the plaintiffs in his argument submitted that the legal notice at Ex.P-2 goes to show that the plaintiffs were ready and willing to perform their part of promise under the agreement. But mere stating that the plaintiffs were ready and willing, in their legal notice, cannot be construed that the plaintiffs have proved their readiness and willingness.
25. In Padmini Raghavan’s case (supra), the Division Bench of this Court while setting aside the judgment of the Trial Court which had decreed the suit for specific relief and while negating the finding of the Trial Court on the point of readiness and willingness, has observed that the Trial Court failed to notice that mere assertion in the witness box and issuance of a legal notice is not a proof of readiness and willingness to pay the balance sale consideration.
It was further observed that the plaintiff has to produce before the Court such evidence so as to satisfy the Court that, he was ready with the balance sale consideration and he was willing to part with the balance sale consideration.
In the instant case, the evidence of PW-1 though in his capacity as a Power of Attorney holder, even if considered, still, it is clear that except stating in a sentence that the plaintiffs were ready and willing to perform their obligation, the witness has not produced any material to prove the alleged readiness and willingness to perform their part of obligation to the satisfaction of the Court. He has not produced before the Court any such evidence so as to satisfy the Court that the plaintiffs were ready with the balance sale consideration and were willing to part with the balance sale consideration. Nothing had prevented the plaintiffs from producing the bank statements or any other document to show that they had the balance amount at their disposal or were able to pool the funds and pay-off the balance amount to the defendant as a part of dischargal of their obligation under the agreement. In the absence of the same, the Trial Court has rightly held that the plaintiffs have failed to prove that they were ready and willing to perform their part of the obligation under the Agreement to Sell dated 30-06-1993. I do not find any error in the said finding of the Trial Court.
26. The Trial Court has also given one more reason for denial of the relief of specific performance in favour of the plaintiffs and the said reason is that, the plaintiffs have not impleaded the two sons of the defendant by names, Sri.R.S. Lokesh and Sri.R.S. Rangaswamy, even after the plaintiffs having the knowledge of the Settlement Deed entered into between the defendant and his sons under which the sons too had some interest in a portion of the suit schedule property. The said finding of the Trial Court may not be a sound reasoning for the reason that, as could be seen from Ex.P-14, which is a certified copy of the plaint in O.S.No.2045/2006 in the Court of the City Civil Judge at Bangalore, those two sons of the defendant by name Sri.R.S. Lokesh and Sri.R.S. Rangaswamy had filed the said suit against their father, Sri.D.R. Sadananda Murthy, who is the defendant in the instant suit and against the present plaintiffs arraigning them as defendant Nos.1,2 and 3 respectively, seeking a declaration that the suit schedule properties are joint family properties and the plaintiffs therein (sons of defendant) are entitled to a legitimate 1/3rd share in each of the suit schedule properties. However, as could be seen from the certified copy of the memo filed in the same case, which is at Ex.P-15, it was reported that the matter was settled out of Court and the defendant No.1 had ‘no objection’ to dismiss the suit as settled out of Court. The final order passed in the said suit is at Ex.P-16 wherein the Court before which the O.S.No.2045/2006 was pending has by its order dated 16-02-2008 taking on record the memos filed by the plaintiffs 1 and 2 dated 25-07-2007 and the memo filed by the first defendant dated 22-12-2007 has dismissed the suit as prayed, however, observing that the said dismissal of the suit is without prejudice to the rights of second and third defendants in O.S.NO.7411/1994 (plaintiffs in this case) in respect of item No.1 of the plaint schedule of the case. As such, the plaintiffs’ right was kept in tact. Ex.P-17 which is a certified copy of the Settlement Deed between the defendant who has two sons i.e. Sri. R.S. Lokesh and Sri.R.S. Rangaswamy goes to show that, those two sons as settlees under the agreement/Settlement Deed have admitted that their father, i.e. the defendant herein who is the settler in the said agreement is the absolute owner of the entire property and he is in peaceful possession and enjoyment of the property. As such, since the said sons of the defendant have admitted their father as the absolute owner of the entire suit schedule property and their suit for partition in O.S.No.2045/2006 also came to be dismissed at the memo filed by them, non-impleading the sons of the defendant as the parties in the present suit would not result fatal to the case of the plaintiffs. However, despite the said reasoning on the non- impleading those two sons of defendants as parties, since the finding of the Trial Court that the plaintiffs have failed to prove that they were ready and willing to perform their part of the obligation under the agreement dated 30-06-1993 since has barred them from being entitled for the relief of specific performance of the agreement, no error in the finding of the Trial Court in denying the specific relief to the plaintiffs can be found. As such, the appellants in R.F.A.No.174/2014 would not succeed.
interest which is at the rate of `12% per annum to `6% per annum. In that regard, the single line argument of the learned counsel for the defendant (appellant in R.F.A.No.1896/2013) was that, Section 34 of the CPC prescribes interest to be granted not exceeding at the rate of `6% per annum.
28. In the instant case, the Trial Court has ordered the payment of interest at the rate of `12% per annum on a sum of `2,00,000/- payable by the defendant to the plaintiffs towards refund of the earnest money received by him. The Trial Court has not assigned any reason as to why it has ordered interest at the rate of `12% per annum.
Admittedly, the transaction between the plaintiffs and the defendant was not a commercial transaction. Further, Agreement to Sell at Ex.P-1 only mentions about the liquidated damages payable by the seller to the purchaser which was fixed at a sum of `2,00,000/-. Thus, it does not mention the payment of any interest by the seller to the purchaser nor any rate of interest. However, the Court is not precluded from awarding interest, more particularly, under Section 34 of CPC, when the situation and circumstance of the case warrants to award the same.
29. In the instant case, considering the fact that the agreement was of the year 1993 and the payment of part of consideration from the plaintiffs to the defendant had commenced from the year 1989 and extended upto 1993 and also considering the fact that even after several years of more than two and a half decades, the plaintiffs are entitled to only for refund of sale consideration, but not for the relief of specific performance of the agreement, I am of the view that granting of interest at the rate of `12% per annum on a sum of `2,00,000/- which was the earnest money ordered to be refunded, is not unreasonable.
30. The Hon’ble Apex Court in the case of Ramesh Chand (D) through LRs. Vs. Asruddin (D) through LRs. and another reported in 2016 Supreme Appeals Reporter (Civil) 16, had directed the defendant/appellant to repay the amount of earnest money with interest at the rate of `18% per annum from the date of agreement till date to the plaintiff/ respondent within three months. Even in the said case also, the fact was that the agreement between the parties was with respect to a sale of immovable property which was a non-commercial transaction. Still, the Hon’ble Apex Court, considering the facts and circumstances of the case before it had ordered payment of interest at the rate of `18% per annum.
In the instant case also, as observed above, considering the facts and circumstances of the case, the Trial Court has ordered for payment of interest by the defendant to the plaintiffs at the rate of `12% per annum, which I do not consider as unreasonable.
Accordingly, the argument of the learned counsel for the defendant (appellant in R.F.A.No.1896/2013) is not acceptable. Consequently, the appeal in R.F.A.No.1896/2013 also fails.
Accordingly, I proceed to pass the following:-
O R D E R [i] The appeal in R.F.A.No.174/2014 and the appeal in R.F.A.No.1896/2013 are dismissed;
[ii] The judgment and decree dated 05-11-2013 passed in O.S.No.7411/1994 by the learned XXV Additional City Civil Judge at Bangalore City (CCH-23), is hereby confirmed;
[iii] There is no order as to costs.
Registry to transmit a copy of this judgment along with the Lower Court records to the concerned Trial Court, without delay.
Sd/- JUDGE BMV*