IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF MARCH 2019 BEFORE THE HON’BLE Mrs. JUSTICE K.S.MUDAGAL M.S.A.NO.68/2016 (RO) BETWEEN V.VENKATARAVANAPPA, S/O SOMAIAH, AGED ABOUT 68 YEARS, R/AT NEAR NEW BUS STAND, 6TH DIVISION, CHIKKABALLAPUR TOWN – 562 101, DISTRICT: CHIKKABALLAPUR. …APPELLANT (BY SRI.G.BALAKRISHNA SHASTRY, ADV.,) AND 1. D.K.GOPAL, S/O KRISHNAPPA, AGED ABOUT 53 YEARS, 2. D.K.NARASIMHAMURTHY, S/O KRISHNAPPA, AGED ABOUT 51 YEARS, BOTH ARE RESIDING AT NEAR NEW BUS STAND, 6TH DIVISION, CHIKKABALLAPUR TOWN – 562 101, DISTRICT : CHIKKABALLAPUR. …RESPONDENTS (BY SRI.G.V.NARASIMHA MURTHY, ADV., FOR R1 & R2) THIS MSA IS FILED UNDER ORDER 43 RULE 1(u) OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 09.02.2016 PASSED IN RA NO.39/2014 ON THE FILE OF THE PRL. DISTRICT JUDGE, CHIKKABALLAPUR, PARTLY ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGMENT AND DECREE DATED 14.08.2014 PASED IN OS NO.149/2008 ON THE FILE OF THE PRL. SENIOR CIVIL JUDGE, CHICKBALLAPUR.
THIS APPEAL COMING ON FOR HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT This second appeal of the defendant arises out of the Judgment and Decree dated 09.02.2016 in R.A.No.39/2014 passed by the Principal District Judge, Chikkaballapur. By the impugned Judgment, the first appellate court set aside the Judgment and Decree dated 14.08.2014 passed by the Principal Senior Civil Judge, Chikkaballapur in O.S.No.149/2008 so far it relates to grant of decree for specific performance of the contract and remanded the matter for framing an issue regarding hardship pleaded by the defendant in his written statement and for fresh disposal.
2. Respondents filed O.S.No.149/2008 against the present appellant seeking specific performance of agreement of sale dated 07.09.2006 as per Ex.P.1 allegedly executed by the appellant.
3. For the purpose of convenience, the parties will be referred to henceforth with reference to their ranks before the trial court.
4. The subject matter of the suit was house list No.57 measuring 30’ East-West and 35’ North-South situated in Gangana Midde village, Kasaba Hobli, Chikkaballapur taluk. The plaintiffs alleged that the defendant executed agreement of sale agreeing to sell the suit property for a consideration of Rs.9,11,000/- and received advance consideration of Rs.1,50,000/- agreed to receive balance consideration and to execute the sale deed within one month. They further contended that the defendant did not execute the sale deed, inspite of demands and notice-Ex.P.3 dated 07.10.2006 but issued reply-Ex.P.5 seeking extension of time by fifteen days.
Plaintiffs contended that even after fifteen days defendant did not execute the sale deed and they were ready to perform their part of contract.
5. The defendant contested the suit denying the execution of Ex.P.1 and service of notice-Ex.P.3 or issuance of reply-Ex.P.5. He contended that taking advantage of his poor economic condition, under the duress plaintiff obtained the signatures of himself and his wife on some papers and using those papers-Ex.P.1 and P.5 were manipulated. He denied the readiness and willingness on the part of the plaintiffs and contended that if at all decree for specific performance is granted, he will be put to hardship.
6. By way of an amendment, defendant contended that after the alleged execution of Ex.P.1, plaintiffs filed O.S.No.449/2006 for bare injunction without seeking relief of specific performance, therefore, the suit is barred by Order II Rule 2 CPC.
7. The parties adduced evidence. On the basis of the aforesaid pleadings, the trial court framed the following issues:
i) Whether the plaintiffs prove that the defendant has executed sale agreement dated 7.9.2006 in their favour with respect to the suit schedule property by receiving advance sale consideration of Rs.1,50,000/-?
ii) Whether plaintiffs prove that they are ever ready and willing to perform their part of the contract?
iii) Whether the plaintiffs are entitled for the relief as sought?
iv) What order or decree?
8. The parties adduced evidence. In support of case of the plaintiffs, second plaintiff was examined as P.W.1 and alleged attester and scribe were examined P.Ws.2 and 3. On behalf of plaintiffs, Exs.P.1 to 3 were marked. The defendant examined himself as D.W.1 and got marked copy of the plaint in O.S.No.449/2006 as Ex.D.1.
9. The trial court, after hearing the parties, held that execution of Ex.P.1-the agreement of sale is proved. The trial court further held that the readiness and willingness on the part of the plaintiffs to perform the contract was proved and decreed the suit.
10. The trial court had not raised any issue on order 2 rule 2. Though the parties adduced evidence with reference to that contention of the defendant, the trial court did not consider and give any finding on that aspect.
11. The defendant challenged the said Judgment and Decree before the first appellate court. The first appellate court, by the impugned Judgment and Decree, held that the execution of the agreement of sale was proved and readiness and willingness on the part of the plaintiffs to perform the contract was also proved.
12. So far as contention regarding Order II Rule 2 of CPC, the first appellate court held that court in which O.S.No.449/2006 was filed, had no jurisdiction to entertain suit for specific performance, therefore, order II Rule 2 of CPC does not apply.
13. The first appellate court did not discuss anything on the issue of readiness and willingness on the part of the plaintiffs to perform the contract.
14. The first appellate court held that though there was pleading regarding hardship, the trial court did not frame the issue and give a finding on that. Therefore, confirming the Judgment and Decree of the trial court with regard to execution of the document, remanded the matter to the trial court for consideration of the question of hardship.
15. Sri.G.Balakrishna Shastry, learned counsel for the appellant seeks to assail the impugned Judgment and Decree of the first appellate court on the following grounds:
i) Under Section 16 of the Specific Relief Act, it is mandatory for the court to consider the issue of readiness and willingness. The first appellate court being final court of facts, was bound to consider all the issues raised, but the same failed to consider the issue of readiness and willingness;
ii) Plaintiffs failed to prove the service of notice-Ex.P.3 or the issuance of reply-Ex.P.5.
P.W.1 unequivocally admitted that he has not received reply-Ex.P.5. Therefore, the plaintiffs’ contention that they were ready to comply with the covenants and issued notice and defendants issued reply notice seeking 15 days etc., was totally baseless.
iii) Admittedly, plaintiffs filed O.S.No.449/2006 based on the agreement of sale and on the ground that after issuing reply notice, defendant is denying to execute the sale deed. Therefore, subsequent suit for specific performance was hit by Order II Rule 2 of CPC.
iv) It was open to the plaintiffs to file the suit for specific performance as well to seek permanent injunction before a court having pecuniary jurisdiction. The filing of O.S.No.449/2006 before the Court of Civil Judge (Jr. Dn.) did not bar the operation of Order II Rule 2 CPC.
16. In support of his contentions, he seeks to rely on the Judgment of the Supreme Court in VIRGO INDUSTRIES (ENG.) PRIVATE LIMITED v/s. VENTURETECH SOLUTIONS PRIVATE LIMITED (2013(1) SCC 625).
17. Per contra, Sri.G.V.Narasimha Murthy, learned counsel for the plaintiffs seeks to sustain the impugned Judgment and Decree of the Courts below on the following grounds:
i) Though the defendant pleaded fraud and coercion, he failed to prove the same. Therefore, both the courts concurrently held that the execution of Ex.P.1 is proved;
ii) Plaintiff, by issuing notice, demonstrated his readiness and willingness to perform his part of contract;
iii) O.S.No.449/2006 was filed by the plaintiffs for bare injunction and that was dismissed as not pressed. In such cases, Order II Rule 2 CPC does not operate as a bar.
18. Having regard to the rival contentions, the points that arise for consideration of this Court are:
i) Whether the suit of the plaintiffs was barred by Order II Rule 2 of CPC?
ii) Whether the first appellate court failed to exercise its jurisdiction in not considering the issue of readiness and willingness on the part of the plaintiffs to perform their contract?
iii) Whether the impugned Judgment and Decree of the first appellate court in remanding the matter is justifiable?
19. Though the defendant contended that signatures of himself and his wife were taken on some papers under duress and thereafter, they were concocted as an agreement of sale and reply notice as per Ex.P.1 and Ex.P.5, except his self-serving testimony, he did not lead any evidence to prove the said coercion or undue influence. Therefore, both the courts below have rightly held that agreement of sale-Ex.P.1 was proved.
20. So far as the service of notice-Ex.P.3 and reply notice-Ex.P.5, though those aspects were denied by the defendant, plaintiff did not produce the postal acknowledgement in proof of service of Ex.P.3. Further, P.W.1 himself in his cross-examination unequivocally admitted that he has not received the reply notice-Ex.P.5. He did not produce any postal cover which allegedly contained the reply notice-Ex.P.5. Under such circumstances, the courts below were not justified in holding that service of notice-Ex.P.3 on the defendant and issuance of reply notice-Ex.P.5 by the defendant were proved.
21. Ex.D.1 is the copy of the plaint in O.S.No.449/2006 filed on the file of the Civil Judge (Jr.Dn.), Chikkaballapur. The said suit was apparently between the same parties in respect of the same property. In the plaint, the plaintiffs contended that after exchange of notices, defendant did not come forward to execute the agreement of sale. In Para No.2 of Ex.D.1, plaintiffs contended that though five days time sought by the defendant was completed, he did not come forward to perform his part of contract.
22. In Para No.4 of Ex.D.1, plaintiffs contended that defendant went near the suit schedule property with his supporters and was trying to alienate the same to third parties etc., therefore, they were constrained to file suit for permanent injunction. Thus, it becomes clear that O.S.No.449/2016 was filed after the alleged exchange of notices and after the cause of action to file a suit for specific performance had arisen.
23. In fact, cause of action for the suit on hand pleaded in Para No.5 of the plaint is said to be on 07.09.2006 and 07.10.2006, whereas in the earlier suit it was said to be on 02.11.2006. Thus by that time the plaintiffs had become aware that defendant was denying the execution of sale deed and thereby, the cause of action to file a suit for specific performance had arisen.
24. Order II Rule 1 and 2 CPC read as follows:
“2. Suit to include the whole claim.-
(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.
(2) Relinquishment of part of claim.- Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.”
25. Apparently, order II Rule 2 does not state that it does not apply in a situation where the earlier suit was withdrawn or dismissed as not pressed. The case on hand is fully covered by the Judgment of the supreme court in the Virgo Industries case referred to supra. There also though a suit for injunction was filed initially, later suit for specific performance was filed.
26. Repelling the similar contention regarding pendency of the earlier suit, the Hon’ble Supreme Court in Para No.17 held as follows:
“17. ……………………… However, we are unable to agree with the same in view of the object behind the enactment of the provisions of Order 2 Rule 2 CPC as already discussed by us, namely, that Order 2 Rule 2 CPC seeks to avoid multiplicity of litigations on the same cause of action. If that is the true object of the law, on which we do not entertain any doubt, the same would not stand fully subserved by holding that the provisons of Order II Rule 2 CPC will apply only if the first suit is disposed of and not in the situation where the second suit has been filed during the pendency of the first suit. Rather, Order 2 Rule 2 CPC will apply to both the aforesaid situations ”
27. In support of his contentions, learned counsel for respondents seeks to rely on the following Judgments:
i) SMT.GOURAWWA v/s. HANUMAGOUDA BASAPPA KODIGOUDRA (ILR 2005 KAR 4971);
ii) SRI.CHINNAPPA v/s. CORPORATION OF CITY OF BANGALORE (AIR 2005 KAR 70).
28. In Gowrawwa‘s case referred to supra, it was held that a separate suit for mesne profits from the date of decree can be maintained and such suit is not barred by order II Rule 2. In fact in the very same Judgment, it is held that the contention of order II rule 2 may help only regarding mesne profits prior to the date of decree. Therefore, the said Judgment is of no assistance to advance the case of the plaintiffs.
29. In view of the direct Judgment of the Supreme Court in Virgo Industries case and even the case of Chinnappa relied upon by the learned counsel for the plaintiffs is of no help to his case. Having regard to that the suit on hand was clearly hit by order II rule 2 of CPC.
The plaintiffs were not barred from filing a comprehensive suit for specific performance and for injunction before the court of competent jurisdiction. Instead of filing such suit, he filed suit for bare injunction before the court of Civil Judge (Jr. Dn.).
30. The findings of the first appellate court that the plaintiffs could not bring the suit for specific performance before the Civil Judge (Jr.Dn.) or he could not include the said relief in O.S.No.449/2006 having regard to the limit of the pecuniary jurisdiction are unsustainable in view of the Judgment of the Supreme Court in Virgo Industries case referred to supra. Therefore, the Judgment and Decree of the courts below are unsustainable.
31. Both the courts have concurrently held that the execution of the agreement is proved. Under such circumstances, though the suit of the plaintiffs for specific performance of contract is liable to be dismissed, the interest of justice and fairness requires that the appellant shall refund the earnest money received by him.
32. Therefore, the appeal is partly allowed. The prayer of the plaintiffs for specific performance of the contract is hereby dismissed. The defendant shall refund earnest money of Rs.1,50,000/- within 30 days from the date of receipt of the copy of this order, failing which, the said amount shall carry interest at 6% p.a., from the date of this Judgment till its realization.
Sd/- JUDGE bnv*