IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF NOVEMBER 2019 BEFORE THE HON’BLE MR. JUSTICE N.K.SUDHINDRARAO REGULAR FIRST APPEAL NO.1804 OF 2005 (SP) BETWEEN:
R.A. ERAPPA DAS SINCE DECEASED BY HIS LRS 1. SRI. VITHOBA KRISHNA AND OTHERS S/O LATE ERAPPA DAS AGED ABOUT 48 YEARS R/AT. No.1008, RAMAIAH LAYOUT KRISHNARAJAPURA BENGALURU -560036.
2. SRI. DASHARATHA RAMA S/O LATE ERAPPA DAS AGED ABOUT 38 YEARS R/AT. No.91, VINAYAKA NAGAR 1ST MAIN, ADUGODI POST BENGALURU -560030.
3. SMT. LAKSHMAMMA W/O NANJAPPA D/O LATE ERAPPA DAS AGED ABOUT 42 YEARS R/AT. VIJAYAPURA VILLAGE DEVANAHALLI TALUK BENGALURU DIST-560026.
(BY SRI. K.N. NITISH, ADV., FOR SRI. K.V. NARASIMHAN, ADV.,) AND:
SRI. T. JAYARAM S/O H. THAMMAIAH AGED ABOUT 66 YEARS R/AT. No.38, 11TH CROSS … APPELLANTS SAMPANGIRAMNAGAR BENGALURU-560027.
… RESPONDENT (BY SMT. NIRMALA SURESH, ADV., (ABSENT)) - - -
THIS RFA IS FILED UNDER SECTION 96 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 28.2.2005 PASSED IN O.S.NO.7418/93 ON THE FILE OF THE XI ADDL. CITY CIVIL JUDGE, BANGALORE (CCH-8), PARTLY DECREEING THE SUIT OF THE APPELLANTS HEREIN BY DIRECTING THE DEFENDANT TO PAY A SUM OF RS.21,000/- A/W INTEREST AT 9% P.A. FROM THE DATE OF THE SUIT TILL REALIZATION AND ALSO DIRECTING TO PAY A SUM OF RS.5,000/- AS LIQUIDATED DAMAGES AND REJECTING THE RELIEF OF SPECIFIC PERFORMANCE.
THIS APPEAL COMING ON FOR FINAL DISPOSAL THIS DAY, THE COURT DELIVERED THE FOLLOWING:-
JUDGMENT Learned counsel for the appellant present.
Learned counsel for the respondent absent. As could be seen from the order sheet, learned counsel for the respondent remained absent on consecutive hearing dates. The matter is of the year 2005. There is no point in adjourning the matter.
2. The appeal is directed against the judgment and decree dated 28.02.2005 passed in OS No.7418/1993 which came to be disposed of by the learned 11th Addl. City Civil Judge, Bangalore city, wherein the suit for specific performance filed by the plaintiff dated 20.12.1993 came to be decreed in part, and the learned Trial Judge ordered for refund of a sum of Rs.21,000/- to the plaintiffs together with interest at the rate of 9% p.a. from the date of suit till realisation and the defendant is also directed to pay the liquidated damages of Rs.5,000/-.
3. In order to avoid the confusion and overlapping, the parties are addressed in accordance with their rankings as held before the Tribunal.
4. The brief facts of the case of the Plaintiff in OS No.7418/93 are that, the plaint schedule is a vacant site bearing No.3 in Sy.Nos.30 and 31 of Devasandra Village, Yeshwanthpur Hobli, Bangalore North Taluk, in the layout formed by the Government of Karnataka Employees House Building Co-operative Society Limited was allotted to the defendant as per the endorsement No.116/1981-82 issued by the said Society. On 04.10.1982, the defendant Jayaram agreed to sell the schedule property to the deceased plaintiff Erappa Das for a cash consideration of Rs.27,500/- and paid an advance amount of Rs.5,000/- towards the part payment and entered into an agreement to execute the sale deed by receiving the balance sale consideration of Rs.22,500/- within a period of six months and it is also stated to have been agreed that in the event of the Society executing the sale deed in his favour within six months from 04.10.1982, otherwise it was agreed between the parties that the agreement shall continue to be in force till the sale deed was executed in favour of the defendant by the society to enable him to execute the sale deed in favour of the plaintiff. The defendant also agreed that after issuance of notice by the defendant to the plaintiff informing him regarding execution of the sale deed by the Society, if the Plaintiff fails to pay the balance sale consideration and to obtain a proper registered sale deed at his costs, the agreement was ceased to be in force. It is further claimed by the plaintiff that the further amounts also were received by the defendant towards the agreement of sale. The sale consideration stated in the appeal is as under:
On 10.10.1984 Rs.2,000/-; on 30.06.1985 Rs.4,000/-; 04.09.1989 Rs.10,000/- and as per the endorsement effected on the agreement, on 11.10.1993 Rs.8,000/- through his son Mr.Ashok. Thus, the defendant has received in all an amount of Rs.22,500/- and excess amount of Rs.1,500/- as well. The defendant is stated to have obtained the registered sale deed of the schedule property from the Society in his favour on 02.11.1993. The plaintiff demanded him to execute the sale deed in terms of the agreement dated 04.10.1982. That was refused on the ground that the prices of sites have gone up considerably and thus, he refused to execute sale deed. During pendency of the suit, the plaintiff is reported dead on 13.11.2003 and he was survived by the legal representatives and they were brought on record.
5. The defendant appeared through his counsel and in his written statement contended that the suit filed by the plaintiff seeking specific performance of the agreement dated 04.10.1982 was not maintainable and barred by limitation and there is no privity of contract. The alleged agreement came into existence only to advance the loan to the defendant. It is also stated that the sale agreement was executed as a security for repayment of loan of Rs.5,000/- borrowed by the defendant and the subsequent amount alleged to have been paid to the defendant are not correct. The defendant has not received any amount except Rs.5,000/-.
6. Learned Trial Judge based on the material prepositions asserted and denied, framed the issues relating to execution of the sale agreement dated 04.10.1982, the payment of sale consideration and entitlement of the plaintiff to get the relief.
7. In this connection the oral evidence was adduced by the plaintiff by examining himself as PW1 and defendant Sri.Jayaram was examined as DW1. The documents Exs.P1 to P4 were marked on behalf of the plaintiff and no documents were marked on behalf of the defendant.
8. On conclusion of the trial, the learned Trial Judge decreed the suit in part and granted the relief of refund of advance amount by the defendant to the plaintiff together with interest @ 9% p.a from the date of the suit till realisation, of course, together with liquidated damages of Rs.5,000/- said to have been agreed at the time of entering into sale agreement. The same is challenged by the plaintiffs in this appeal.
9. Sri.Nitish, learned counsel appearing for the appellants - plaintiffs would submit that the learned Trial Judge came to the conclusion regarding execution of the sale agreement as true. However, considering the length of time consumed by the plaintiff in filing the suit found that he is not entitled for the specific performance in principle, however, deserves refund of advance amount of Rs.21,000/- together with interest @ 9% p.a as stated above, plus an amount of Rs.5,000/- by way of liquidated damages.
10. Learned counsel further submitted that the amount of Rs.27,500/- agreed was during the year 1982 and that there was no lapse on the part of the plaintiff to perform his part of contract under the agreement. Further, it is also submitted that the plaintiff as a matter of fact had paid an amount of Rs.21,000/- including the advance amount of Rs.5,000/- and that tantamounts to full performance of the obligation from his part under the said sale agreement.
11. Learned counsel would further submit that he has been ever ready and willing to go for registration of the sale deed. Regard being had to the fact that to pay the balance sale consideration as determined by the learned Trial Judge.
12. Schedule property is a vacant site located in the lay-out formed by the Government of Karnataka Employees House Building Co-operative Society Limited wherein, the defendant appears to be a Member and a site was allotted under the endorsement No.116/81/82 issued by the Society. However, the allotment under payment of full price did not happen, at the same time it was after the provisional allotment, the defendant was suggested to execute the registered sale deed in favour of the plaintiff. Regard being had to the fact that in the present circumstances the legal representatives of the plaintiff came on record by virtue of death of plaintiff on 13.11.2003.
13. Considering the averments of the defendant that he had no intention to sell the property. The very idea or intention of the party was only to enter into the sale agreement as a security for repayment of loan of Rs.5,000/- that was borrowed by the defendant in favour of the plaintiff. Thus, the substance of contention of the defendant is that the sale agreement was executed as an abundant precaution. However, the parties never intended for out and out sale agreement of the schedule property.
14. On perusal of Ex.P1, the sale agreement dated 04.10.1982, wherein it is seen that the signature of the defendant on the agreement are not marked except Ex.P1(a) which is the subsequent endorsement dated 10.10.1984 made by the defendant. The salient features of the agreement as claimed by the plaintiff are partly admitted by the defendant or a document came to be executed and according to plaintiff, sale agreement and according to defendant, loan agreement. Admitted fact is that the property is vacant site formed by the Government of Karnataka Employees House Building Co-operative Society Limited. The plaintiff claims that the consideration value was Rs.27,500/- and received Rs.5,000/- under the agreement as advance and balance sale consideration was agreed to be paid within six months to get the registration of the schedule property. However, one of the conditions in this connection is that the defendant had to execute the registered sale deed, subject to getting the final sale deed by the Society and that has to happen within the period of six months. It is also agreed that incase of non execution of the sale deed within the period of six months, it was agreed between the parties that after the execution of the sale deed by the Society in favour of the defendant, the later would be executing the sale deed at the demand made by the plaintiff.
15. The moot aspect is that defendant does not deny the signature and the filled in portion. His contention is his signatures were appended to the documents on the ground of intended belief that it was a loan amount of Rs.5,000/- being secured, that apart, it was never a sale agreement. In this connection, it is necessary to extract a portion of Paragraph No.3 of the written statement filed by the defendant which is as under:
“3. That there is no privity of contract between the parties to the suit. The plaintiff had no intention to purchase and the defendant had not intention to sell the suit schedule property. The alleged sale agreement dated 04.10.1982 came into existence only to evidence the loan taken by the defendant from the plaintiff. The defendant had been obliged to execute the sale agreement dated 04.10.1982, only as a security for repayment of a sum of Rs.5,000/- borrowed from the plaintiff. The subsequent amounts alleged to have been taken by the defendant is not correct. The defendant had not received any amount except Rs.5,000/- on 04.10.1982 as a loan. The alleged signature for the endorsement is not that of the defendant and the defendant has not received any amount mentioned therein. The endorsements are concocted for the purpose of the case.”
16. Thus, the signature of the defendant is not denied in the context nor the document on which he has signed was blank. It is in this connection, the learned Trial Judge finds that the document was executed and the intention of selling the schedule property was absent. However, in the operative portion of the judgment, learned Trial Judge directed the defendant to pay an amount of Rs.21,000/- by way of refund of advance amount with interest at 9% p.a. and further amount of Rs.5,000/- by way of liquidated damages.
17. Another aspect that assumes importance is the texture of the operative portion of the judgment.
The Court recognizes the agreement and execution is accepted but his intention to sell is not accepted.
[ 18. In the over all consideration of the circumstances, an amount of Rs.21,000/- paid by the deceased plaintiff to the defendant was established before the Court is revealed in the judgment. However, out of the total consideration of Rs.27,500/- the amount of Rs.6,500/- was not received and the total amount which is ordered by the Court to be refunded by the defendant to the plaintiff is Rs.21,000/-. In the circumstances, insofar as the payment of sale consideration is concerned, it is made on numerous dates as stated earlier. Under such circumstances, the finding of the Court and the operative portion of the judgment is as under:
“14. Issue Nos.4 & 5: It is an admitted fact that the Ex.P.1 was came to be executed on 04.10.1982 and the plaintiff has filed this suit during the year 1993 to enforce the agreement of sale to direct the defendant to execute and register the sale deed in his favour in respect of the schedule property. On perusal of the agreement of sale at Ex.P.1 there is a clause to the effect that in case the defendant failed to execute the sale deed in favour of the plaintiff even after execution of the registered sale deed by the society in faovur of the defendant, the defendant is only liable to refund the advance of Rs.5,000/- along with further sum of Rs.5,000/- as damages. In view of this specific clause in the agreement of sale though the plaintiff is able to prove the issue Nos.1, 2 & 3, the plaintiff is not at all entitled the discretionary as well as equitable relief of specific performance. There is an inordinate delay on the part of the plaintiff to take action to enforce the agreement of sale at Ex.P.1 as the agreement of sale was came to be executed during the year 1982 and the suit has been filed by the plaintiff to enforce the same during the year 1993. Having regard to the facts & circumstances of the case and also taking into consideration the principles laid down in the above-cited decisions relied by both the sides this is not a fit case to exercise a discretion to grant the discretionary relief of specific performance in favour of the plaintiff. By granting the relief of specific performance in favour of the plaintiff, and against the defendant, certainly the defendant will be put to irreparable loss and hardship as the schedule property has been allotted in favour of the defendant by the society, which is the only property owned by the defendant. In case if the relief of specific performance is refused and ordered the defendant to refund the sale consideration along with a further sum of Rs.5,000/- as damages as per the terms of the agreement, the plaintiff will be compensated in terms of money, as such the plaintiff will not be put to any hardship or injury. Under the agreement at Ex.P.1 the defendant has received a sum of Rs.5,000/- as advance and thereafter he has also received a further sum of Rs.2,000/- on 10.10.1984, a sum of Rs.4,000/- on 30.06.1985, a sum of Rs.10,000/- on 04.09.1989, thus the defendant has received in all a sum of Rs.21,000/-. Hence, the defendant is liable to refund a sum of Rs.21,000/- along with a further sum of Rs.5,000/-
as damages to the plaintiff along with reasonable interest. Hence, I answer the issue No.4 in the negative and proceed to pass the following:
ORDER The suit is partly decreed with costs.
The defendant is directed to pay a sum of Rs.21,000/- along with interest at the rate of Rs.9% p.a. to the plaintiffs from the date of the suit till the date of realization and also further directed to pay a sum of Rs.5,000/- as liquidated damages.
The relief of specific performance prayed by the plaintiffs is hereby rejected.”
19. Thus, the appreciation of the evidence by the trial Court appears to be inconsistent in the aspect of rejecting the prayer of the plaintiff for specific performance. No doubt, there is a Clause in the agreement that incase of failure on the part of the defendant to execute the registered sale deed in favour of the plaintiff, the former would be refunding the sale consideration of Rs.21,000/- together with interest @ 9% p.a. plus the damages of Rs.5,000/- which are considered as liquidated damages as ascertained by the parties. Thus, date of sale agreement is 04.10.1982. and the terms regarding the period which already stated above and the sale agreement was executed by the Society on 02.11.1993 which is after a very long time from the date of agreement. The defendant did not issue the legal notice intimating the plaintiff regarding sale deed by the Society in his favour. Under the circumstances, the defendant also owed a duty to inform the plaintiff regarding sale deed. Needless to say that the plaintiff is ready and willing to perform to his part of the contract. On marshalling the evidence of plaintiff, he is not been lazy enough to perform his part of agreement. More particularly just because there is a conflict between the parties, wherein the seller (defendant) agrees to pay back the consideration – advance – towards sale prices to the purchaser (plaintiff) and it does not take away the right of the plaintiff for getting the relief of specific performance for the very reason that the animus as on the date of entering the sale agreement between the parties was to sell the schedule property and thus, when the primary purpose is to sell the schedule property through the sale agreement, the other suggesting alternative of refund of advance amount and damages incase of not happening of the sale deed cannot be considered, as the plaintiff is not at the mercy of the defendant and the former can chose in between the specific performance in principle or the refund of advance amount. This cannot be enforceable as a matter of right of the defendant The context and circumstances are to be assessed on the basis of the entitlement or disentitlement of the plaintiff to get the relief of specific performance, but cannot be on the ground of provision for refund of advance amount or payment of damages. Thus, I do not find there was any embargo for the defendant to execute the sale deed of the schedule property except his desire. No doubt, it is correct that from the date of the sale agreement i.e. 04.10.1982 sale deed did not come into existence for the six months. For the very reason that the sale deed was executed by the Society in favour of the defendant on 02.11.1993 the plaintiff cannot be at fault as he was not a party to the contract between the defendant and the Society and also as noted by the learned Trial Judge there was no intimation from the defendant to the plaintiff regarding the allotment of the site.
20. If it was the view of the Court that the full consideration was not paid as it has ordered the refund of Rs.21,000/- from the defendant, there was no impediment for the Court for ordering over payment of price as it is being done in the judgment under appeal.
21. In the over all circumstances of the case, I find that the plaintiff (appellant) has successfully proved the execution of the sale agreement dated 04.10.1982 wherein the defendant agreed to execute the sale deed. The agreement or the rights under the agreement are not inflicted by the delay or being barred by time and that the learned Trial Judge though has right in holding the proving of the execution, erred seriously in being selective in granting the relief of refund of advance amount with interest instead of specific performance in principle and that finding is liable to be set-aside.
22. In the result, the appeal is allowed.
The defendant is directed to execute the registered sale deed of the schedule property in favour of the plaintiff by receiving the balance consideration of Rs.6,500/- within two months from today failing which the plaintiff shall be entitled to get the same through legal course.
Accordingly, the suit of the plaintiff is decreed. No costs.
Sd/- JUDGE RV/GH