S.krishna Reddy v. K Lokanadha Reddy & Ors.

Judgment

SECOND APPEAL No.188 of 2013 This second appeal under Section 100 of the Code of Civil Procedure is filed aggrieved against the judgment and decree, dated 30.11.2012, in A.S.No.98 of 2006, on the file of the V Additional District Judge, Tirupati, reversing the judgment and decree, dated 11.08.2006, in O.S.No.89 of 2001 on the file of the Principal Senior Civil Judge, Tirupati.

2. Originally, the suit in O.S.No.89 of 2001 was filed by the plaintiff for seeking the relief to direct the defendant No.1 to execute and register the necessary agreement of sale in favour of the plaintiff in respect of the plaint schedule property. The learned trial Judge dismissed the suit for specific performance of agreement and granted refund of advance amount of Rs.20,000/- with proportionate costs against the defendant No.1 with subsequent interest @ 9% per annum from the date of filing the suit till the date of realization. Aggrieved against the judgment and decree passed in

O.S.No.89 of 2001, the unsuccessful plaintiff filed an appeal vide A.S.No.98 of 2006, on the file of the V Additional District Judge, Tirupati. The learned first appellate Judge allowed the appeal with costs by setting aside the judgment and decree passed by the learned trial Judge. Aggrieved thereby, the defendant No.2 in the suit approached this Court by way of second appeal.

3. The appellant herein is the defendant No.2, the respondent No.1 is the plaintiff and the respondent No.2 is the defendant No.1 in O.S.No.89 of 2001. VGKR, J. SA_188_2013

4. For the sake of convenience, both parties in the second appeal will be referred to as they are arrayed in the suit O.S.No.89 of 2001.

5. The case of the plaintiff, in brief, as set out in the plaint averments in O.S.No.89 of 2001, is as follows: The defendant No.1 is the absolute owner of the plaint schedule land and offered to sell it to the plaintiff, after negotiations the defendant No.1 agreed to sell it for a valid consideration of Rs.2,15,000/- to the plaintiff on

14.02.2001. Thereafter, the defendant No.1 executed an agreement to execute the regular agreement of sale in favour of the plaintiff and received Rs.20,000/- as token advance out of the sale consideration and agreed to receive the balance sale consideration on or before 14.06.2001, and to execute a regular agreement of sale. The plaintiff pleaded that one week prior to the filing of the suit, he requested the defendant No.1 to execute a regular registered agreement of sale in respect of the plaint schedule property by receiving the balance sale consideration in pursuance of the contract dated

14.02.2001, but the defendant No.1 was postponing the same as the value of the schedule property has gone up. He further pleaded that he came to know that the defendant No.1 and her husband were trying to alienate the schedule property to defendant No.2 for wrongful gain. The plaintiff pleaded that one G.Sunil, who is the husband of the defendant No.1, himself, scribed the agreement dated 14.02.2001 and the defendants in collusion with each other are trying to create documents affecting the right of the plaintiff, as such, the plaintiff is constrained to file the present suit. VGKR, J. SA_188_2013

6. The 1st defendant filed written statement before the trial Court denying the material averments made in the plaint. The brief averments in the written statement of 1st defendant are as follows: The defendant No.1 never intended to sell the schedule property to the plaintiff and had never executed any agreement dated 14.02.2001 and also did not receive any consideration. The defendant No.1 pleaded that the plaintiff is not entitled to the relief as claimed and the agreement dated

14.02.2001 is a created one and the same is inadmissible. The defendant No.1 further pleaded that she had sold the schedule property under a regular registered sale deed dated 16.04.2001 to the defendant No.2 for a valid sale consideration in pursuance of the agreement dated 18.01.2001 to execute an agreement of sale dated 03.03.2001 and delivered possession of the schedule property to the defendant No.2 and furthermore, the plaintiff is aware of the said transaction, in order to give trouble to the defendant No.1, the plaintiff has created the agreement dated 14.02.2001, and she prayed to dismiss the suit with costs.

7. The 2nd defendant filed a written statement by denying the plaint averments and further contended that the documents relied upon by the plaintiff are all fabricated and false and he is not entitled to the discretionary relief of specific performance under the provisions of the Specific Relief Act. The defendant No.2 pleaded that the defendant No.1 agreed to sell the schedule property to him for a valid consideration of Rs.2,15,000/- and executed an agreement on 18.01.2001 by receiving a sum of Rs.10,000/- and VGKR, J. SA_188_2013 agreed to execute a regular agreement of sale. The defendant No.2 further pleaded that in terms of the agreement dated 18.01.2001, the defendant No.1 executed a regular registered sale deed dated 03.03.2001 by receiving balance sale consideration of Rs.90,000/- totaling to Rs.1,00,000/- and agreed to receive the balance of Rs.15,000/- within four months i.e. on or before

02.07.2001. The defendant No.2 pleaded that since the date of purchase, he is in absolute possession and enjoyment of the schedule land and he is the bona fide purchaser for value without the knowledge of any alleged unconcluded contract between the plaintiff and the defendant No.1 and the defendant No.2 had no prior notice of the same. The defendant No.2 further pleaded that the plaintiff in collusion with the defendant No.1 filed the present suit in order to defeat his legal rights, the defendant No.2 had paid valuable consideration to the defendant No.1 and acquired legal rights through a registered instrument, which cannot be disputed by the plaintiff or the defendant No.1 by creating false documents, as such, he prayed to dismiss the suit with costs.

8. On the basis of above pleadings, the learned trial Judge framed the following issues for trial: 1) Whether the plaintiff is entitled for specific performance of contract on the basis of agreement of sale? 2) Whether the suit claim is barred by limitation? VGKR, J. SA_188_2013 3) Whether the plaintiff is entitled to get back the earnest money paid in case the plaintiff failed to establish the principal relief of specific performance of contract? 4) Whether the agreement of sale is not true, valid and binding on the defendant? and 5) To what relief the plaintiff is entitled to?

9. During the course of trial in the trial Court, on behalf of the plaintiff, P.Ws.1 and 2 were examined and Exs.A-1 to A-4 were marked. On behalf of the defendant No.2, D.Ws.1 and 2 were examined and Exs.B-1 to B-2 were marked.

10. The learned trial Judge after conclusion of trial, on hearing the arguments of both sides and on consideration of oral and documentary evidence on record, dismissed the suit for specific performance agreement and granted refund of advance amount of Rs.20,000/- with proportionate costs against the defendant No.1 with subsequent interest @ 9% per annum for the date of filing the suit till the date of realization. Felt aggrieved thereby, the unsuccessful plaintiff filed A.S.No.98 of 2006, on the file of the V Additional District Judge, Tirupati and the defendant No.2, who is the subsequent purchaser also filed his cross-objections in A.S.No.98 of 2006, wherein the following points came up for consideration: 1) Whether the appellant is entitled for a decree for specific performance of agreement or agreement of sale? VGKR, J. SA_188_2013 2) Whether the lower court was justified in holding all the issues, except issue No.4 in favour of the defendants and whether the lower court had committed any jurisdictional error in dismissing the suit? and 3) To what relief?

11. The learned first appellate Judge after hearing the arguments, answered the points, as above, against the defendants and allowed the appeal by setting aside the judgment and decree passed by the learned trial Judge. Felt aggrieved of the same, the unsuccessful defendant No.2 in O.S.No.89 of 2001 filed the present second appeal before this Court.

12. On hearing both sides’ counsel at the time of admission of the second appeal on 22.02.2013, this Court framed the following substantial questions of law: 1) Whether Ex.A-1 is a contract to sell under Section 2(g) of the contract Act or a mere contract to enter into a contract to sell and is unenforceable? 2) Whether a suit for specific performance by way of execution of an agreement to enter into an agreement is maintainable? and 3) Whether the judgment of the lower appellate court is perverse in granting a decree for execution of sale deed, which is beyond the relief sought in the suit?

14. Heard Sri O.Manohar Reddy, learned Senior Counsel appearing on behalf of Sri D.Purnachandra Reddy, learned counsel for the appellant and VGKR, J. SA_188_2013 Sri V.Venugopal, learned Senior Counsel appearing on behalf of Sri V.Venkata Subbaiah, learned counsel for the respondents.

15. The law is well settled that under Section 100 of CPC, High Court cannot interfere with findings of fact arrived at by first appellate Court, which is final Court of facts, except in such cases where such findings were erroneous being contrary to the mandatory provisions of law, or its settled position on the basis of the pronouncement made by the Apex Court or based upon inadmissible evidence or without evidence. In the case of Bhagwan Sharma v. Bani Ghosh1, the Apex Court held as follows: “The High Court was certainly entitled to go into the question as to whether the findings of fact recorded by the First Appellate Court which was the final Court of fact were vitiated in the eye of law on account of non-consideration of admissible evidence of vital nature.” In the case of Kondira Dagadu Kadam v. Savitribai Sopan Gujar2, the Apex Court held as follows: “The High Court cannot substitute its opinion for the opinion of the First Appellate Court unless it is found that the conclusions drawn by the lower appellate Court were erroneous being contrary to the mandatory provisions of law applicable or its settled position on the basis of pronouncements made by the Apex Court, or was based upon inadmissible evidence or arrived at without evidence.”

16. The appellant herein is the defendant No.2 in O.S.No.89 of 2001 on the file of the Principal Senior Civil Judge, Tirupati and the respondents herein are the plaintiff and the defendant No.1 in the suit. After a full-fledged trial, on hearing both sides, the learned trial Judge dismissed the main relief of specific