SMT PRABHA v. SRI. K. CHENNAPPA

Judgment

1 . SRI. K. CHENNAPPA S/O HANUMAIAH AGED 67 YEARS RETIRED FROM KSRTC AS DRAFTSMENT K.H.ROAD, BANGALORE-27. NOW R/AT NO.4, NEW NO.70/1 4TH CROSS, 2ND MAIN HOSAHALLI, BANGALORE-560040. SINCE DEAD BY HIS LRs 1(A) SMT. LALITHAMMA W/O LATE K. CHENNAPPA AGED ABOUT 66 YEARS 1(B) C. MOHANKUMAR S/O LATE K. CHENNAPPA AGED ABOUT 42 YEARS - 2 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR 1(C) SMT. HEMALATHA D/O LATE K. CHENNAPPA AGED ABOUT 40 YEARS ALL ARE R/AT NO.4 NEW NO. 70/1, 4TH CROSS 2ND MAIN, HOSAHALLI BANGALORE-560 040. …RESPONDENTS (BY SRI. K. VARADARAJAN, ADVOCATE FOR C/R; V/O DATED 24.08.2015 SERVICE OF NOTICE TO R1(A-C) ARE HELD SUFFICIENT BY WAY OF PAPER PUBLICATION R1(A), R1(B) AND R1(C)) THIS RFA IS FILED U/S 96 R/W O-XLI R-1 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 29.10.2009 PASSED IN OS.NO.3020/1993 ON THE FILE OF THE XXV ADDL. CITY CIVIL JUDGE, BANGALORE, DISMISSING THE SUIT FOR SPECIFIC PERFORMANCE. THIS RFA COMING ON FOR DICTATING JUDGMENT, THIS DAY JUDGMENT WAS MADE THEREIN, AS UNDER:

CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL JUDGMENT This appeal is directed against the judgment and decree dated 29.10.2009 passed in O.S.No.3020/1993 by the trial Court dismissing the suit for specific performance on the ground that, plaintiff has failed to establish her - 3 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR readiness and willingness to perform her part of the contract.

2. For the sake of convenience the parties are referred to as per their rank before the trial Court.

3. The facts leading to the case are as follows: The plaintiff instituted the suit for specific performance placing reliance on an agreement of sale executed by the defendant on 02.02.1986. It is the specific case of the plaintiff total sale consideration agreed between parties was Rs.64,000/-. The plaintiff asserts that a sum of Rs.45,000/- was paid in all, and that the defendant executed a receipt dated 25.09.1987 acknowledging receipt of the said amount and admitting that only a balance of Rs.19,000/- remained payable. It is further pleaded that under Clause 6 of the agreement, the defendant delivered vacant physical possession of the suit schedule property to the plaintiff, and that the plaintiff has - 4 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR been in uninterrupted possession of the property ever since.

4. The plaintiff further pleaded that the defendant had availed a loan and had agreed to execute the sale deed after clearing all encumbrances. According to the plaintiff, she subsequently learnt that the defendant had an outstanding loan liability of Rs.19,000/-. Despite repeated requests made by the plaintiff calling upon the defendant to clear the dues and complete the sale transaction, the defendant allegedly avoided execution of the sale deed on one pretext or the other. The plaintiff, therefore, asserted that she was always ready and willing to perform her part of the contract and that the delay in execution of the sale deed was solely attributable to the conduct of the defendant.

5. Upon service of summons, the defendant entered appearance and filed a written statement, followed by an additional written statement. The defendant - 5 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR contended that there was inordinate delay on the part of the plaintiff in seeking enforcement of the agreement, amounting to acquiescence and laches, and that such conduct itself constituted breach resulting in cancellation of the agreement. The defendant denied having received Rs.45,000/- and admitted receipt of only Rs.43,000/-. The assertion regarding subsisting loan liability was also seriously disputed. The defendant further contended that the suit was barred by limitation and sought dismissal of the suit.

6. The Trial Court framed appropriate issues and permitted the parties to adduce evidence. Upon appreciation of the oral and documentary evidence, the Trial Court answered Issue Nos.1 and 2 in the negative, holding that the plaintiff had failed to establish her readiness and willingness to perform her part of the contract. Issue No.3, which pertained to limitation, was answered against the defendant. However, despite holding that the suit was within limitation, the Trial Court - 6 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR dismissed the suit solely on the ground that readiness and willingness were not proved.

7. Learned counsel appearing for the plaintiff assailed the judgment and decree of the Trial Court contending that the approach adopted by the Trial Court in appreciating Issue Nos.1 and 2 is manifestly erroneous and contrary to the evidence on record. It was vehemently argued that the plaintiff had paid a substantial portion of the sale consideration as early as in the year 1986 and that the agreement was coupled with delivery of possession, which are crucial circumstances that ought to have weighed in favour of the plaintiff while exercising discretionary relief. Learned counsel further contended that the Trial Court committed a serious error in drawing an adverse inference merely because the plaintiff had initially sought permission to sue as an indigent person. Referring to Section 16(c) of the Specific Relief Act, 1963, it was argued that the law does not require the plaintiff to continuously demonstrate possession of liquid cash, but - 7 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR only mandates that the plaintiff must prove capacity and willingness to perform the contract when called upon to do so. Learned counsel further pointed out that the plaintiff voluntarily deposited the balance sale consideration of Rs.19,000/- on 07.07.1997, which is a significant circumstance establishing bona fides and readiness. It was also contended that the defendant himself failed to perform reciprocal obligations, including obtaining khata in his name and clearing outstanding debts thereby frustrating completion of the transaction.

8. Reliance was placed on following authoritative pronouncements of the Hon’ble Supreme Court to substantiate these contentions: (i) Motilal Jain .vs. Ramdasi Devi(Smt) and others [(2000) 6 SCC 420] (ii) A. Kanthamani .vs. Nasreen Ahmed [(2017) 4 SCC 654] - 8 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR

9. During the pendency of the appeal, the original defendant expired. His legal representatives were duly served with notice but have chosen not to contest the proceedings. This Court has heard the learned counsel for the plaintiff and has independently examined pleadings, evidence, and findings recorded by the Trial Court.

10. Upon such consideration, the following points arise for determination: "(i) Whether the finding of the Trial Court that the plaintiff failed to prove readiness and willingness to perform her part of the contract is perverse and warrants interference? (ii) Whether the Trial Court erred in declining discretionary relief despite the plaintiff having paid a substantial portion of the sale consideration in 1986 and having been put in possession under the - 9 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR agreement, thereby ignoring settled principles of equity? (iii) What order?" Finding on point Nos.(i) and (ii):

11. The case on hand presents a peculiar factual matrix where foundational facts are largely undisputed. The agreement of sale is dated 02.02.1986. Under the said agreement, the total sale consideration was fixed at Rs.64,000/-. On the very date of execution of the agreement, the plaintiff paid a sum of Rs.43,000/-, which constitutes more than two-thirds of the total sale consideration. Simultaneously, vacant physical possession of the suit schedule property was delivered to the plaintiff pursuant to the agreement. The balance sale consideration of Rs.19,000/- was subsequently deposited by the plaintiff on 07.07.1997 during the pendency of the suit. - 10 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR

12. Though the initial conduct of the plaintiff in instituting the suit by filing a miscellaneous application to sue as an indigent person may, at first blush, appear to weigh against her, the Court cannot lose sight of the settled principle that the readiness and willingness of a party has to be examined not in isolation, but on a cumulative assessment of conduct both at the inception of litigation and thereafter.

13. It is well settled that payment of a substantial portion of the sale consideration at the time of execution of the agreement is a strong and weighty circumstance in favour of the plaintiff. The payment of Rs.43,000/- out of the total consideration of Rs.64,000/- cannot, by any stretch of imagination, be construed as a nominal or token payment. This substantial payment, when read conjointly with the delivery of possession as stipulated under Clause 6 of the agreement, unmistakably demonstrates that the contract was acted upon by both parties and was never intended to be a mere paper transaction. - 11 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR

14. This Court is conscious of the fact that the initiation of indigent proceedings is a circumstance that may be examined while assessing readiness and willingness. However, this Court, in a catena of decisions, has consistently held that the requirement under Section 16(c) of the Specific Relief Act, 1963 does not mandate the plaintiff to prove continuous possession of liquid cash. What the law requires is proof of the plaintiff’s intention, capacity, and willingness to perform the contract when the occasion so demands. In this context, the voluntary deposit of the balance sale consideration of Rs.19,000/- during the pendency of the suit assumes great significance and substantially answers the issue of readiness and willingness in favour of the plaintiff.

15. In the backdrop these undisputed circumstances, this Court is compelled to examine the plaintiff’s long, continuous possession and the attendant equitable considerations. The records clearly disclose that the agreement was coupled with possession. Though the - 12 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR defendant initially disputed delivery of possession, such a plea cannot be sustained in the teeth of the admitted agreement, the execution of which is not in dispute. The defendant is estopped from taking a stand contrary to the recitals of the agreement. The plaintiff has demonstrated that she has been in continuous possession of the suit schedule property since 1986, that is, for nearly four decades. Such possession is neither unlawful nor unauthorized, but traceable to a lawful contract.

16. More significantly, during the course of trial, the defendant unequivocally admitted the delivery of possession in his cross-examination. The relevant portion is extracted as under: “. . . . . . It is true that as per Clause 6 of the Agreement of Sale I delivered the possession of the schedule property as on the date of agreement of sale.”

17. The agreement of sale itself being undisputed, the above admission assumes decisive importance. Equally - 13 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR relevant is the admission elicited from the defendant in his further cross-examination that he had raised a loan by mortgaging the suit schedule property. This admission completely demolishes the stand taken by the defendant in the written statement, wherein he had categorically denied the existence of any loan or encumbrance. The contradiction between the pleadings and the sworn testimony clearly establishes that the defendant had suppressed material facts. The plaintiff’s assertion that the transaction could not be concluded owing to the subsisting encumbrance, which the defendant was contractually to clear, thus stands fully substantiated. Consequently, the delay attributed to the plaintiff in instituting the suit stands satisfactorily explained during the course of trial.

18. This Court, therefore, deems it appropriate to extract the following crucial admissions, which have a direct bearing on the issue of readiness and willingness as well as on the conduct of the defendant: - 14 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR “. . . . . . I got transferred the khatha of the schedule property into my name during the year 1995. I have not issued any notice to the Plaintiff intimating the transfer of khatha of the schedule property to my name and got obtained the Registered Sale Deed in her favour in respect of the schedule property.” “I obtained loan from KSRTC Department on the basis of the suit schedule property. The said loan was cleared during the year 1994 or 1995. I have not intimated the Plaintiff in writing about the clearance of the said loan but I informed her orally.”

19. These admissions not only establish existence of the loan contrary to the pleadings but also demonstrate that the defendant failed to take essential steps, including timely clearance of encumbrance and communication thereof, to facilitate execution of the sale deed.

20. The admission of the defendant, extracted supra, assumes decisive significance. The defendant has admitted that the khatha of the suit schedule property was - 15 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR transferred to his name only in the year 1995 and further admits that no notice was issued to the plaintiff intimating such transfer. This admission clearly demolishes the defence set up against the plaintiff. The silence maintained by the defendant for nearly a decade, coupled with the fact that the khatha was transferred only in 1995, unmistakably indicates that the defendant himself treated the agreement as subsisting. This admission, read in conjunction with the plaintiff’s long-standing possession and substantial payment of sale consideration, clinches the issue in favour of the plaintiff and squarely attracts the equitable jurisdiction of this Court to grant specific performance.

21. In the light of these unequivocal admissions, the breach is clearly attributable to the defendant. While there may be some degree of laches on the part of the plaintiff, the same cannot eclipse the overarching equitable considerations arising from substantial payment, long possession, and the defendant’s own defaults. It is a - 16 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR settled principle that poverty or financial hardship cannot be equated with unwillingness. Willingness is to be gauged from intention and conduct and not from immediate financial liquidity. A party may not possess ready cash at all times, yet may have the capacity to mobilize funds, which would satisfy the statutory requirement. The plaintiff’s attempt to sue as an indigent person, therefore, cannot be used as a weapon against her. The voluntary deposit of the balance consideration, even without a direction from the Court, conclusively demonstrates readiness. Where possession is delivered and substantial consideration is paid, specific performance should ordinarily follow. Delay becomes relevant only when accompanied by inequitable conduct or undue prejudice arising from escalation of price. The facts of the present case are clearly distinguishable.

22. The relief specific performance undoubtedly discretionary, but such discretion is to be exercised on sound judicial principles and not arbitrarily. - 17 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR When all statutory ingredients are satisfied, the Court is ordinarily bound to grant the relief unless it would be highly inequitable or unreasonable to do so. While exercising discretion, the Court must have regard to the circumstances of the case, the conduct of the parties, and their respective interests under the contract. It is equally well settled that specific performance is the rule and refusal is an exception, particularly where damages would not constitute an adequate relief. In the present case, denial of specific performance would result in irreparable loss to the plaintiff, whereas the defendants would suffer no comparable prejudice.

23. On an overall appreciation of the oral and documentary evidence, this Court is of the firm opinion that equity unmistakably leans in favour of the plaintiff. Failure to exercise discretion in her favour in the peculiar facts of this case would lead to grave miscarriage of justice. The Trial Court has failed to properly weigh the equitable considerations and has adopted a hyper- - 18 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR technical approach, resulting in perverse findings. Accordingly, for the foregoing reasons, this Court answers Point Nos.(i) and (ii) in the affirmative. Finding on Point No.(iii):

24. In view of the findings recorded on points (i) and (ii), this Court proceeds to pass the following: ORDER (i) The appeal is allowed. (ii) The judgment and decree passed by the Trial Court dismissing specific performance are hereby set aside. (iii) The suit filed by the plaintiff for specific performance of the agreement of sale dated

02.02.1986 is decreed. (iv) The defendants are directed to execute the registered sale deed in favour of the plaintiff in respect of the suit schedule property, strictly in terms of the agreement of sale dated

02.02.1986, within a period of three months - 19 - NC: 2026:KHC:4763 RFA No. 5 of 2010 HC-KAR from the date of receipt of a certified copy of this judgment. (v) In the event of failure on the part of the defendants to execute the sale deed within the stipulated time, the plaintiff shall be at liberty to have the sale deed executed through the process of Court, in accordance with law. (vi) In view of the prolonged pendency of the litigation and having regard to the conduct of the defendants, the suit is decreed with costs throughout. Draw Decree accordingly. SD/- (SACHIN SHANKAR MAGADUM) JUDGE ALB List No.: 1 Sl No.: 13