IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF OCTOBER, 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.860 OF 2015 BETWEEN:
Smt. R. Rani Wife of Mr. Velumani Aged about 50 years, No.144, Kuvempunagar, Singapura 1st Stage, Bengaluru-560 014.
(By Ms. B.V.Nidhishree, Advocate) AND:
Mr.N.Krishna Mohan Son of Mr. Nyathappa, Aged about 40 years, No.403, 6th Main, 7th Cross, MSR Nagar, Mathikere, Bangalore-560 064.
(Respondent served and unrepresented) **** …Appellant …Respondent This Regular First Appeal is filed under Section 96 Read with Order 41 of Code of Civil Procedure, 1908, against the judgment and decree dated:19-03-2015 passed in O.S.No.1664/2010 on the file of the XXXVIII Additional City Civil and Sessions Judge at Bengaluru City, (CCH-39), decreeing the suit for recovery of money.
This Regular First Appeal coming on for Hearing this day, the Court delivered the following:
J U D G M E N T It is a defendant’s appeal. The present respondent as a plaintiff had instituted a suit against the present appellant arraigning her as a defendant in O.S.No.1664/2010 in the Court of the learned XXXVIII Additional City Civil and Sessions judge at Bengaluru City (CCH-39) (hereinafter for brevity referred to as the “Trial Court”) for recovery of a sum of `2,20,801/- with interest there upon. The Trial Court in its judgment and decree dated 19-03-2015 decreed the suit of the plaintiff with costs. It is against the said judgment and decree, the defendant has preferred this appeal.
2. The summary of the case of the plaintiff in the Trial Court was that, he had entered into an agreement of sale with the defendant for purchase of the suit schedule property for a sum of `21.00 lakhs on 19-11-2007. In that regard, an advance amount of a sum of `1,56,001/- was also paid by the plaintiff to the defendant. The balance sum was agreed to be paid within three months, after which, the defendant, as a vendor, had to execute a registered Sale Deed in favour of the plaintiff or any nominee of the plaintiff. According to the plaintiff, he had applied for a Bank loan for purchase of the said property. However, he could not get Bank loan because there were inadequate documents with respect to the suit schedule property. Despite their requirement, the defendant did not furnish him the necessary documents. As such, he caused a legal notice issued upon the defendant, calling upon her to furnish the documents and to execute the Sale Deed within thirty days thereafter, otherwise, to refund the advance amount together with interest there upon. The defendant sent an untenable reply, which constrained the plaintiff to institute a suit.
3. In response to the suit summons, the defendant appeared through her counsel and filed her Written Statement, wherein she admitted of she having entered into an agreement of sale of the suit schedule property in favour of the plaintiff for a valuable consideration of a sum of `21.00 lakhs on 19-11-2007. Though she contended that the advance amount of `1,56,001/- was not paid on the date mentioned in the plaint by the plaintiff, however, the defendant admitted the receipt of the said amount on three different dates. Thus, the receipt of the advance amount that was paid by the plaintiff was not denied by the defendant.
However, it was the specific case of the defendant that, the plaintiff failed to make good the sale consideration amount within the stipulated time and get the Sale Deed executed. On the contrary, belatedly, he has come up with a plea that the suit schedule property had no marketable title and as such he could not get the loan. With this, she prayed for dismissal of the suit.
4. Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration:-
“1] Whether the plaintiff proves that defendant is liable to pay a sum of `1,56,000/-
towards advance of sale consideration amount?
2] Whether the plaintiff is entitled for interest as prayed for?
3] whether the plaintiff is entitled for reliefs as prayed for?
4] what order or decree”
5. In order to prove his case, the plaintiff got himself examined as PW-1 and got produced and marked documents from Exhibits P-1 to P-8. In the cross-examination of DW-1, the plaintiff also got produced and marked two more documents by confronting them to the witness which were marked as Exs.P-9 and P-10. The defendant got examined herself as DW-1 and got produced and marked documents at Exs.D-1 and D-2.
6. The Trial Court by its impugned judgment and decree dated 19-03-2015 answered issue No.1 in the affirmative and issues No.2 and 3 partly in the affirmative and decreed the suit of the plaintiff with costs holding that the plaintiff is entitled to recover a sum of `2,20,801/- from the defendant together with interest at the rate of `6% per annum from the date of the suit till realisation of the entire amount. It is against the said judgment and decree, the defendant has preferred this appeal.
7. In spite of service of notice upon him, the respondent/plaintiff has remained absent and un- represented.
8. The Lower Court records were called for and the same are placed before this Court.
9. Heard the arguments of the learned counsel for appellant and perused the material placed before this Court including the memorandum of appeal and the impugned judgment.
10. For the sake of convenience, the parties would be henceforth referred to with the ranks they were holding before the Trial Court respectively.
11. In the light of the above, the points that arise for my consideration in this appeal are:-
[i] Whether the plaintiff has proved that the defendant was liable to pay him a sum of `1,56,001/- as refund of the advance amount said to have been paid under Ex.P-1?
[ii] Whether the judgment and decree under appeal warrants any interference at the hands of this Court?
12. PW-1 in his Examination-in-chief in the form of affidavit evidence has reiterated the contentions taken up by him in his plaint. He got produced and marked the agreement dated 19-11-2007 said to have been entered by him with the defendant at Ex-P1. He produced a provisional consent letter dated 16-10-2007 said to have been issued by the Standard Chartered Bank, Home Loan unit, Chennai, in his favour at Ex.P-2; an approved building plan dated 04-02-2008 at Ex.P-3; a copy of the legal notice dated 07-10-2009 said to have been issued on his behalf by his counsel to the defendant at Ex.P-4; postal receipt and postal acknowledgement card at Exs.P-5 and P-7 respectively; Under Certificate of Posting receipt at Ex.P-6; reply to the notice dated 27-10-2009 said to have been sent to him on behalf of the defendant at Ex.P-8; a property tax extract at Ex.P-9 and a photocopy of hakku patra (i.e. the letter of right) in respect of the suit property at Ex.P-10. In his cross- examination, he adhered to his original version.
13. The defendant in her examination-in-chief as DW-1 in the form of affidavit evidence also has reiterated the contentions taken up by her in her Written Statement. She got produced and marked a provisional loan sanction letter dated 20-07-1994 issued by M/s.Canfin Homes Ltd. in favour of the husband of the defendant at Ex.D-1 and one more letter by M/s. Canfin Homes Ltd. addressed to the husband of the defendant and dated 03-12-2002 at Ex.D-2. Even DW-1 also in her cross-examination adhered to her original version.
14 In the light of the above, it was the argument of the learned counsel the appellant/defendant/vendor that, breach of agreement at Ex.P-1 was not by the defendant, but it was by the plaintiff/vendee himself. The agreement at Ex.P-1 does not specifically mention as to the specific documents that were required to be furnished by the vendor to the vendee.
Learned counsel further submitted that, at no point of time, the plaintiff asked for any documents from the defendant. However, it was only as an after- thought, the plaintiff came up with the legal notice as per Ex.P-4, that too, belatedly after lapse of nearly one year eight months.
Learned counsel further submitted that, the plaintiff has not proved that the defendant failed to discharge her part of obligation in any manner. However, the Trial Court, without considering all these aspects in its proper perspective, has unilaterally believed the version of the plaintiff and without even looking for any evidence about the alleged possibility of demolition of the structure on the suit schedule property by the Municipality, by itself presumed that there was all the threat for demolition of the structure, which resulted in it pronouncing the judgment and decreeing the suit in favour of the plaintiff.
Learned counsel also submitted that the Trial Court deprived an opportunity to the defendant to address her oral arguments.
15. As already observed above, since the respondent/plaintiff has remained absent and un- represented in this appeal, no argument was addressed from the respondent’s/plaintiff’s side.
16. It is not in dispute that the parties to the suit had entered into an agreement as per Ex.P-1 on 19-11-2007, where under, the defendant (appellant herein) as a vendor had agreed to sell the suit schedule property in favour of the plaintiff for a total consideration of a sum of `21.00 lakhs. Further, it is also not in dispute that, in connection with the same transaction and in pursuance of the said agreement, the plaintiff as a purchaser had paid an advance amount of a sum of `1,56,001/- to the defendant which the defendant has acknowledged. It is further not in dispute that as agreed to between the parties and as reflected in the document at Ex-P1, the sale transaction had to be completed within three months by the purchaser/plaintiff, by paying the balance amount of `19,44,000/-and the vendor executing the Sale Deed by receiving the balance amount. It is also not in dispute that the said agreement could not mature into an execution of a Sale Deed and as such, the agreement remained at the stage of agreement itself for which the plaintiff has blamed the defendant and in turn, the defendant has accused the plaintiff for non-performance of the promise under the contract. Thus, the only question that remains for consideration is, at whose fault, the said agreement at Ex.P-1 remained unperformed?
17. According to the plaintiff, it is purely the fault of the defendant as a vendor who did not furnish him the necessary documents to enable him to get a Bank loan which has ultimately resulted in the plaintiff not being able to get the Sale Deed executed in his favour by paying the balance amount. However, the said contention has categorically and specifically been denied by the defendant both in her Written Statement as well in her evidence as DW-1. In this regard, the contention of the plaintiff was that, he had applied for a Housing loan with the Standard Chartered Bank, Chennai, and also had the provisional loan sanction letter, but could not confirm the said loan, because the necessary documents sought therein could not be furnished/produced by him to the Bank. In order to show that there was a provisional sanction of the loan in his favour, the plaintiff has produced the said provisional loan sanction letter issued by the Standard Chartered Bank, Home Loan Unit, Chennai, and got it marked at Ex.P-2. The said letter which is not seriously disputed by the defendant would go to show that, the plaintiff had got sanctioned provisional home loan for a sum of `21.50 lakhs from the Standard Chartered Bank, Chennai. Though the plaintiff stated both in his plaint as well in his evidence as PW-1 that, the defendant did not furnish him the necessary documents before he could proceed further in pursuance of the sale agreement at Ex.P-1, but admittedly, in the plaint, he has not listed as to which are all the documents that the defendant has not furnished to him. However, a reading of the plaint which is again reiterated by PW-1 in his Examination-in-chief would go to show that, several of the documents including the sanctioned plan, a khata certificate and the letter of right (hakku patra) were some of the documents which were not furnished to him. It is on this basis, the learned counsel for the plaintiff submitted that, including the agreement at Ex.P1, there is no document to show that what are all the documents that the defendant as a vendor had agreed to or promised to furnish to the plaintiff.
18. A reading of the plaint averment as well the evidence of PW-1, DW-1 and their respective cross-
examinations would go to show that, PW-1 has further clarified in his cross-examination that, the defendant was required to furnish him certain documents namely documents in respect of water connection, building plan, computerised khata certificate etc. He has also stated that he did not get any legal opinion on the title of the defendant over the suit property through any legal professional, but the witness has further stated that on his own, he, after going through the documents furnished, discussed the matter with some of his friends including his advocate friends in the matter. Thus, it is his contention that apart from the Bank alleged to have refused to confirm the loan sanctioned in his favour, he also made consultation with his advocate friends before coming to the conclusion that the defendant did not convince him that she had a marketable title with respect to the suit property.
19. PW-1 in his further cross-examination has also stated that, the defendant had agreed to produce the necessary documents within fifteen days. The said submission made by PW-1 in his cross- examination has not been specifically denied from the defendant’s side. He has also stated in his further cross-examination that, as per the agreement dated 19-11-2007, there was an obligation on the part of the defendant to convey a clear & marketable title.
Last paragraph of page 2 of the agreement at Ex.P-1 discloses the said obligation. However, the defendant denied the said statement made by PW-1. Further, PW-1 in his examination-in-chief has also stated that even the structure that was put up by the defendant/vendor which was in existence as on the date of the agreement for sale also had no sanctioned plan supporting it. He has also stated that though he demanded furnishing of the sanctioned plan during February 2008, the defendant told him that she cannot provide the sanctioned plan which would indicate permission to put up building in accordance with the existing building and indicated that she was ready to return the advance amount paid by him. Thus, the plaintiff apart from his pleadings, even in his evidence also has at more than one place stated that, the defendant was not only under an obligation but also had undertaken to provide certain documents as demanded by him and the very same defendant at a later stage expressed her inability to furnish those documents to him.
20. The defendant in her cross-examination as DW-1 has stated that her husband had constructed a building in the suit schedule property in the year 1991 and it was after clearance of the loan, she received the document at Ex.D-1 from the Bank. She also stated that they had furnished the sanctioned plan to the Bank by obtaining the same from the Corporation and after clearance of the loan, they have received back all the documents from the Bank as per the list. She further stated that the building plan obtained at the time of construction of the building was in her house. After stating all these details, DW-1 admitted a suggestion as true that they have provided only Ex.P-3 to the plaintiff. Thus, it remains as a question as to when the defendant as DW-1 clearly and categorically stated that she had a building plan with respect to the existing structure in the suit schedule property which was built in the year 1991 and that the said sanctioned plan was said to be in her house, she failed to either deliver it to the plaintiff or produce it in the Court. However, admittedly the plan which she has furnished to the plaintiff at Ex.P-3 is of a subsequent date i.e. the said plan was approved by the concerned authority (Corporation) only on 04-02-2008 which was shown to be in force till 03-02-2010. Thus, it clearly establishes that the plan at Ex.P-3 was not the one which was obtained by the defendant at the time of construction of the said structure in the suit schedule property in the year 1991.
21. It is on the said basis that as on the date of construction of the building and as on the date of entering into an agreement between the parties at Ex.P-1, there was no sanctioned plan for the structure built on the site. The plaintiff had apprehended that at any point of time, the local authorities may demolish the building. No doubt, as contended by the learned counsel for the appellant/defendant, except self-serving testimony of PW-1, there are no materials to show that the Municipality has taken any action with respect to the demolition of the building. But the non-existence of any such notice or documents regarding demolition of the structure, by itself, cannot be inferred that the structure said to be built on the suit schedule property had any sanctioned plan supporting the same. Had such sanctioned plan been there, as already observed above, the defendant should have necessarily furnished it to the plaintiff at the earliest point of time or at least in the Court during the pendency of the original suit. On the other hand, the defendant has furnished a plan as per Ex.P-3 to the plaintiff, which admittedly is nearly seventeen years after the putting up of the construction, more particularly, subsequent to the agreement of sale dated 19-11-2007. Thus, it is crystal clear that the alleged plan at Ex.P-3 has come into existence only after the parties entered into an agreement on 19-11-2007. There is no basis to conclude that the said plan legalises the structure which was already in existence in the suit schedule property since seventeen years prior to it. Further, the contention of the plaintiff both in his pleading as well in his evidence as PW-1 that, the existing structure in the suit schedule property is not in consonance with the plan at Ex.P-3, has also remained un-denied and undisputed. As such also, it cannot be said that the plan at Ex.P-3 is one which corresponds to the structure on the suit schedule property.
22. Learned counsel for the appellant/defendant gave more emphasis in her argument on the point that, the recitals of the agreement at Ex.P-1 are silent as to which are all the documents that are required to be furnished by the defendant to the plaintiff. As such, there was no obligation on the part of the defendant to furnish any of the documents, much less, the sanctioned plan to the plaintiff.
23. No doubt, the agreement of sale at Ex.P-1 does not specifically mention as to which are all the documents that are required to be furnished by the defendant/vendor to the plaintiff/purchaser. However, needless to say that, when a seller agrees for sale of an immovable property in favour of a purchaser, it is implied that the seller guarantees that he or she has got a marketable title, that too, when the alleged property is said to have a structure upon it, it goes without saying that in the Corporation limits putting up of any such structure requires a licence for construction and a sanctioned plan. Any Financial Institution which advances a Housing loan, among various documents would also necessarily insist for sanctioned plan in such cases. As such, even though Ex.P-1 does not specifically mention as to what are all the documents that are required to be furnished by the defendant as a vendor, the circumstance of the case makes it very clear that expectation of the plaintiff of documents, more particularly, a sanctioned plan was a genuine expectation and that it was an obligation on the part of the vendor to provide the same. Thus, the argument of the learned counsel for the appellant/defendant on the said point is also not acceptable.
24. The other point of argument of the learned counsel for the appellant/defendant is that, there was delay on the part of the plaintiff of about one year eight months in communicating the defendant through a legal notice stating that the plaintiff had demanded for production of certain documents by the defendant. She also contended that, by that time, the agreement had already come to an end due to efflux of time.
25. A perusal of Ex.P-1 which is the agreement of sale goes to show that, though the parties had agreed that the time stipulated for payment of the balance amount by the purchaser to the vendor was three months, but the same cannot be construed that, time was the essence of the contract and that the defendant/vendor had treated the contract as a contract lapsed due to efflux of time in view of her reply to the legal notice, which is at Ex.P-8. The plaintiff in his legal notice which is at Ex.P-4 has apart from giving a list of documents, which the vendor was required to furnish to him, has also specifically called upon the vendor to take notice and to execute the Sale Deed by providing the documents mentioned in the legal notice and make the schedule property’s title as marketable and acceptable by the Banker of the plaintiff for a Housing loan. He had also called upon the vendor to register the Sale Deed in the office of the jurisdictional Sub-Registrar after accepting the balance sale consideration from the plaintiff within thirty days from the date of notice. In the alternative he had asked the defendant to return the advance amount of a sum of `1,56,001/- together with interest there upon at the rate of `16% per annum. Thus, in the legal notice, the plaintiff has specifically and categorically stated that, even on the date of legal notice, he was ready and willing to perform his part of the promise and ready to get the Sale Deed executed by paying the balance amount, provided the defendant/vendor furnishes him the six documents which were called for in the legal notice. Those six documents are as follows:-
i) Licence to build and approved sanctioned plan issued by the concerned village Panchayath in respect of the Schedule house already constructed by your Husband Sri. Velumani in the schedule site.
ii) Computer Khatha Certificate issued by BBMP, Bangalore.
iii) Computer Khatha Extract issued by BBMP, Bangalore;
iv) Arrears of Tax Paid Receipt upto date issued by BBMP, Bangalore.
v) Readable copy of the House Site Hakkupathra issued to Sri. Velumani by Taluk Office on 09-10-1973.
vi) Arranging for verification/ inspection of all originals of the deeds/documents in respect of Schedule Property by the Banker for sanction of Housing Loan.”
26. In the reply to the said notice, which is at Ex.P-8, the defendant no where has stated in clear terms that, time was the essence of the contract and that by efflux of time, the agreement of sale at Ex.P-1 has stood lapsed or expired. Further, even with respect to admission for furnishing of the documents also, the defendant has kept absolute silence without whispering anything as to whether she has already furnished those documents to the plaintiff or whether those documents were not necessary or whether she was willing or not willing to furnish those documents.
Had really the case of the defendant was that the agreement had by that time expired by efflux of time, then, the defendant in her reply notice should have necessarily stated that the plaintiff cannot ask or call for the performance of the vendor’s promise under the agreement, because, the said agreement had already lapsed due to efflux of time. The defendant has not chosen to do that. Even with respect to non- furnishing of documents also, the defendant has not stated anything. On the other hand, the defendant has only stated that there was lapse of nearly two years and as such the legal notice was misconceived, baseless and mischievous. By the said statement, it cannot be held that the defendant has stated that the agreement has lapsed due to efflux of time or that, time was the essence of the contract. Nowhere in the reply to the legal notice, the defendant has stated that she was in no way liable to discharge her alleged obligations under Ex.P-1 any more. Therefore, it has to be necessarily construed that, the defendant also kept the agreement open and did not whisper anything about her obligation to furnish the documents to the plaintiff. Thus, it is clearly established that, when the plaintiff, as a purchaser of an immovable property has agreed to purchase an immovable property, then, even in the absence of any specific recitals in the agreement that any particular described documents were required to be furnished by the vendor, it goes without saying that the basic minimum documents like the previous documents regarding flow of title, ‘nil’ encumbrance certificate, sanctioned plan with respect to the construction, if any, and the details regarding the arrears of tax, if any, are some of the basic documents which the vendor is required to furnish and supply. It is those basic documents which the plaintiff has sought for in the legal notice from the defendant. Since the defendant, as a vendor, has admittedly not furnished those documents to the plaintiff, the defendant as a vendor cannot say and contend that, breach of the agreement at Ex.P-1 was by the purchaser/plaintiff.
27. The Trial Court has appreciated these aspects in its proper perspective and has rightly held that, breach of the agreement at Ex.P-1 was by the vendor/defendant, as such, the liability of the defendant to refund the advance amount of a sum of `1,56,001/- paid by the plaintiff under Ex.P-1 still remains as a liability by the defendant towards the plaintiff.
28. The learned counsel for the appellant/defendant submitted that the claim of the plaintiff for a sum of `53,800/- which is also awarded by the Trial Court in the form of interest is baseless. However, a perusal of the pleading and the evidence led before the Trial Court clearly go to show that the plaintiff has claimed the said sum of `53,800/- as an interest from the date of agreement till the date of suit on the advance amount of `1,56,001/- at a rate of `16% per annum. The sale agreement at Ex.P-1 though does not mention the liability of the party at default, more particularly, the vendor to pay any interest on the advance amount, but admittedly, the said document clearly goes to show that, in case of breach by the vendor, then, he has to pay double the advance amount to the purchaser. Despite such a clause being there in the agreement at Ex.P-1, the plaintiff has confined his claim not in the form of any penalty or damages but only in the form of interest on the advance amount which is nearly 1/3rd of the amount which the vendor was shown to be liable to pay for her breach in the performance of the contract. Therefore, granting of the said interest from the date of the agreement till the date of the suit i.e. at `53,800/- cannot be considered to be exorbitant or on the higher side.
At the same time it cannot be ignored of the fact that the Trial Court has refused the rate of interest sought for by the plaintiff at `16% per annum on a sum of `2,20,801/- and confined it to `6% per annum from the date of the suit till its realisation.
29. Lastly, learned counsel for the appellant/ defendant also canvassed a point that the defendant was not given an opportunity in the Trial Court to address her oral arguments. She further submitted that, no doubt the defendant was permitted to file her Written arguments which she filed, however, she was deprived of an opportunity of addressing her oral arguments.
In that regard, learned counsel for the appellant/defendant relied upon a judgment of the Bombay High Court in the case of Antonio Jose Da Silva and Ors. Vs. Horizon Realtors, Velsao reported in MANU/MH/2937/2014 = 2015(6)ALLMR 651, wherein the Bombay High Court by relying upon its previous judgment in the case of Celina Almeida Vs. Minister of Urban Development, Goa and others MANU/ MH/ 0886/ 2013 = 2013 (4) Mh.L.J.53, reproduced a part of the said judgment which says that a party is entitled for an adequate hearing. The written submission is not a substitute to oral submissions, as in the course of oral submissions, a party has an opportunity to seek for clarification or clear any doubt in the disposal of the dispute.
30. In the instant case, a perusal of the order sheet maintained by the Court below would go to show that, after granting several adjournments at the stage of arguments of the parties, finally, the Trial Court refused the request of the learned counsel for defendant for an adjournment to address his arguments and permitted the defendant to file her written arguments. Accordingly, the defendant filed her written arguments. It is thereafter, the Trial Court proceeded to pronounce the judgment. Thus, even though it can be inferred that the learned counsel for the defendant had no opportunity to address her oral arguments, in my view, the same cannot be considered as a denial of a right to the defendant to put forth her case before the Court for adjudication. It is because the defendant was permitted to submit her written arguments. Had really the Trial Court come across any doubts or suspicion in the matter, it would have definitely heard the further arguments from the parties before proceeding for pronouncement of the judgment.
Secondly, what are all the points that the learned counsel intended to address orally, the said party since had an opportunity in this appeal to address and already addressed, I am of the view that, remanding the matter on the sole ground, would not serve any purpose in the matter nor it causes any prejudice to the interest of the defendant. As such, I am not acceptable to this last point of argument of the learned counsel for the appellant/defendant also.
31. For the above said reasons, I am of the view that, since the Trial Court, has, after appreciating the materials placed before it, in its proper perspective, decreed the suit of the plaintiff, in which no error can be found, I find no reason to interfere in the said judgment and decree which is challenged in this appeal.
Accordingly, I proceed to pass the following:-
O R D E R [i] The appeal is dismissed;
[ii] The judgment and decree dated 19-03-2015 passed in O.S.No.1664/2010 by the learned XXXVIII Additional City Civil and Sessions Judge, Bengaluru City (CCH-39), is hereby confirmed;
[iii] the amount deposited by the appellant/defendant, if any, in this appeal be transferred to the Trial Court immediately.
Registry to transmit a copy of this judgment along with the Lower Court records to the concerned Trial Court, without delay.
Sd/- JUDGE BMV*