SRI D A GOPAL v. SMT MUNIYAMMA

referred to as per their ranking before the trial Court. The appellant is the plaintiff and respondents are the defendants.

3. The brief facts leading rise to filing of this appeal are as under: Plaintiff filed a suit for specific performance of contract against the defendants alleging that one Muniswamy, who was the absolute owner of the land measuring 1 acre 31 guntas with 19 guntas of kharab in Sy.No.8/2 situated Kurubaragollahalli village, Jadigenahalli Hobli, Hosakote taluk, Banglore Rural district, who died intestate leaving behind the defendants as his legal heirs, who have jointly succeeded to the suit schedule property. During the month of May 2005, the defendants approached the plaintiff and offered to sell the - 4 - NC: 2024:KHC:37652 RSA No. 647 of 2013 suit schedule property to meet their immediate financial constraints. After due deliberations and discussions, the defendants agreed to sell and the plaintiff agreed to purchase the suit schedule property for a consideration of Rs.3,99,375/- and agreement of sale came to be executed on 13.05.2005 embodying the mutual terms and conditions. It was agreed that the plaintiff had to pay a sum of Rs.1,50,000/- towards advance sale consideration amount and required to pay the balance sale consideration amount at the time of execution and registration of sale deed and also agreed that, defendants are required to furnish all the original documents of title relating to the suit schedule property and the time fixed for completion of the sale transaction was 9 months from the date of the sale agreement. The plaintiff had paid a sum of Rs.55,000/- by way of cash on

14.06.2005, 21.09.2005 and 13.11.2006. It is contended that the plaintiff was/is ready and willing to perform his obligations, but the defendants went on avoiding to perform their part of obligations. The plaintiff in order to - 5 - NC: 2024:KHC:37652 RSA No. 647 of 2013 establish that he was ready and willing to perform his part of obligations got issued a legal notice dated 18.12.2006 calling upon the defendants to receive the balance consideration amount and execute the registered sale deed. The defendants refused to accept the legal notice. Hence, cause of action arose for the plaintiff to file a suit for specific performance of contract.

4. Defendants filed written statement denying the execution of agreement of sale. It is contended that plaintiff pressurized the defendants by offering lakhs of rupees and made their mind to sell the property and accordingly the defendants agreed to sell the property as per the prevailing rate of Rs.15 lakhs per acre. After bargaining the sale price was fixed for Rs.12,25,000/- per acre and the matter was settled for Rs.21,74,375/- and the plaintiff paid a sum of Rs.2,05,000/- in cash to the defendants and obtained a signature on the agreement paper. It is contended that, the plaintiff got created the alleged agreement of sale. The defendants approached - 6 - NC: 2024:KHC:37652 RSA No. 647 of 2013 the police. The police directed the defendants that dispute is in civil nature. It is contended that defendants are ready to return the amount of Rs.2,05,000/- to the plaintiff. Hence, prayed to dismiss the suit.

5. The Trial Court, on the basis of the above said pleadings, framed the following issues: (1) Whether the plaintiff proves that the defendants entered into an agreement with him to sell the property for Rs.3,99,375/- on 13.05.2005? (2) Whether the plaintiff further proves that the defendants received Rs.1,50,000/- as an earnest money and executed an agreement of sale? (3) Whether the plaintiff proves that he is ever ready and willing to perform his part of contract? (4) Whether the defendants prove that the sale consideration fixed for Rs.21,74,375? (5) Whether the plaintiff is entitle for the relief of specific performance of contract as sought for? (6) Wheat order or decree?

6. The plaintiff in order to prove his case examined himself as PW.1 and examined one witness as - 7 - NC: 2024:KHC:37652 RSA No. 647 of 2013 PW.2 and got marked 15 documents as Exs.P1 to 15. Defendant No.4 was examined as DW.1 and examined one witness as DW.2 and got marked 3 documents as Exs.D1 to 3. The trial Court after recording the evidence, hearing on both sides and on the assessment of oral and documentary evidence of the parties, answered issue Nos.1 to 3 in the affirmative, issue Nos.4 and 5 in the negative and issue No.6 as per the final order. The suit of the plaintiff was partly decreed with costs in respect of alternative relief of recovery of money and directed the defendants to pay a sum of Rs.2,05,000/- to the plaintiff together with interest @ 10% p.a. from the date of sale agreement till the date of realization and relief of specific performance was rejected.

7. The plaintiff as well as the defendants aggrieved by the judgment and decree passed O.S.No.1451/2007, preferred appeals R.A.Nos.87/2012 and 354/2012 on the file of Presiding - 8 - NC: 2024:KHC:37652 RSA No. 647 of 2013 officer, Fast Track Court-III, Bangalore Rural District, Bangalore.

8. The first Appellate Court clubbed both the appeals and framed the following points for consideration: (1) Whether R.A.No.87/2012 is entitled for the relief of specific performance of contract? plaintiff/appellant (2) Whether the defendants/appellants R.A.No.354/2012 modification of the rate of interest on the advance amount fixed by the trial Court? entitled (3) Whether impugned decree calls for interference by this Court? judgment and (4) To what order?

9. The First Appellate Court, after hearing the learned counsel for the parties and on re-assessment of the oral and documentary evidence, answered point No.1 in the negative, point Nos.2 and 3 in the affirmative, point No.4 as per the final order. The appeal in R.A.No.87/2012 was dismissed and confirmed the judgment and decree passed by the trial Court and appeal filed by the defendants was modified. The appeal in R.A.No.354/2012 - 9 - NC: 2024:KHC:37652 RSA No. 647 of 2013 was allowed and thereby rate of interest was modified and consequently the defendants are directed to pay a sum of Rs.2,05,000/- to the plaintiff at the rate of 6% p.a. from the date of the suit till the date of realization in full.

10. The plaintiff, aggrieved by the judgments and decrees passed by the courts below, has filed this regular second appeal.

11. Heard learned counsel for the parties.

12. Learned counsel for the plaintiff submits that, the defendants have admitted the execution of agreement of sale in favour of the plaintiff for consideration of Rs.3,99,375/-, but the defendants have denied regarding receiving of the consideration amount and contended that it was sold for Rs.21,74,375/-. He submits that the defendants have not produced any records to establish it was agreed for consideration amount of Rs.21,74,375/- and also both the courts below have concurrently recorded, the findings that the plaintiff has proved the execution of agreement of sale and regarding - 10 - NC: 2024:KHC:37652 RSA No. 647 of 2013 payment of earnest money and also recorded the finding that the plaintiff was/is ready and willing to perform his part of contract, but the trial Court has dismissed the suit for specific performance only on the ground of hardship. He submits that the defendants have not pleaded in the written statement in regard to the hardship and the trial Court has not framed any issue on the ground of hardship and the trial Court has not exercised the judicial discretion under Section 20 of Specific Relief Act. Hence, the first Appellate Court committed an error in granting an alternative relief for refund of money. The first Appellate Court without considering the admission of defendants in regard to the execution of an agreement of sale and also payment of part consideration amount as a fraud. Hence, on these grounds he submits that impugned judgments and decrees passed by the courts below are arbitrary and erroneous. Hence, on these grounds, prays to allow the appeal. - 11 - NC: 2024:KHC:37652 RSA No. 647 of 2013

13. Per contra, learned counsel for the defendants submits that plaintiff by playing fraud on the defendants got executed the agreement of sale. He submits that, the defendants have agreed to sell the suit schedule property for consideration of Rs.21,74,345/- and not at the consideration amount of Rs.3,99,375/-. He also submits that said agreement is void and further submits that the defendants are illiterate and have not received the amount of Rs.2,05,000/- as alleged in the plaint and the plaintiffs have not approached the Court with clean hands and it does not bear the signature of defendants on the alleged agreement of sale. The plaintiff has played fraud on the defendants and in order to buttress his arguments he has placed reliance on the decisions of the Hon'ble Apex Court in the cases of A.C.ARULAPPAN VS. SMT. AHALYA NAIK REPORTED IN AIR 2001 SC 2783, MST. KHARBUJA KUER VS. JANGBAHADUR RAI AND OTHERS REPORTED IN AIR 1963 SC 1203, SMT. DULARIA DEVI VS. JANARDAN SINGH AND OTHERS REPORTED IN AIR 1990 SC 1173, KENCHAWWA VW. AMAGONDA REPORTED IN ILR 1988 KARNATAKA. - 12 - NC: 2024:KHC:37652 RSA No. 647 of 2013

14. This court admitted the appeal on 10.12.2020, to consider the following substantial questions of law : (1) Whether the judgment and decree of both the courts below are sustainable in law? (2) Whether both the courts below is justified in declining the relief of specific performance though plaintiff has proved Ex.P1 agreement for sale dated 13.05.2005? (3) Whether both the courts below have judiciously exercised the discretion under Section 20 of Specific Relief Performance Act?

15. Perused records and considered submissions of learned counsel for the parties.

16. SUBSTANTIAL QUESTION OF LAW NOS.1 TO 3: Substantial question of law Nos.1 to 3 are interlinked together. Hence, they are taken together for common discussion in order to avoid repetition of facts. The plaintiff in order to substantiate his case examined himself as PW.1. He has deposed that defendants are the absolute owners of the suit schedule property and agreed to sell the suit schedule property for consideration of Rs.3,99,375/- - 13 - NC: 2024:KHC:37652 RSA No. 647 of 2013 and it was agreed that, the plaintiff shall pay an amount of Rs.1,50,000/- towards part consideration amount. Accordingly, the plaintiff paid a sum of Rs.1,50,000/- to the defendants and the defendants executed an agreement of sale on 13.05.2005 and it was agreed that balance consideration amount to be paid at the time of registration of the sale deed. The plaintiff requested the defendants to receive the balance consideration and execute the registered sale deed. But the defendants went on postponing to receive the balance consideration amount and execute the registered sale deed. The plaintiff in order to show his readiness and willingness to perform his part of contract, got issued a legal notice. The defendants refused to receive the legal notice.

17. The plaintiff in order to prove that defendants executed the agreement of sale dated 13.05.2005, the plaintiff produced the agreement of sale marked as Ex.P1 and LTM of the defendants are marked as Exs.P1(a), (c) and (d) and signature of PW.1 is marked as Ex.P1(e) and - 14 - NC: 2024:KHC:37652 RSA No. 647 of 2013 produced endorsement dated 14.06.2005 which bears the signature of defendant No.4 and the said signature is marked as Ex.P2(a) and also produced the endorsement which bears the signature of defendant No.4 marked as Ex.P4 dated 13.11.2006. Signature of defendant marked as Ex.P4(a) and signature of plaintiff is marked as Ex.P4(b) and Ex.P5 is the RTC extract, Ex.P6 is the legal notice issued the defendants calling upon defendants to receive the balance consideration amount and executed the registered sale deed. Exs.P7 and 8 are the postal receipts and Ex.P9 is the copy of the complaint filed before the postmaster, Exs.P10 and 11 are the postal copy of the notice and postal receipt containing 4 receipts.

18. In the course of cross examination, nothing has been elicited from the mouth of this witness to disbelieve the examination-in-chief. The plaintiff also examined one witness as Jayaramegowda as PW.2, who has deposed that defendants have agreed to sell the suit schedule property in favour of the plaintiff for consideration of - 15 - NC: 2024:KHC:37652 RSA No. 647 of 2013 Rs.3,99,375/- and the defendants executed the agreement of sale dated 13.05.2005 and the plaintiff paid a sum of Rs.1,50,000/- as an advance amount by way of cash. It was agreed that the defendants shall execute the registered sale deed by receiving the balance consideration amount. He identified his signature as Ex.P1(b) on Ex.P1 and nothing has been elicited from the mouth of this witness to disbelieve his examination-in- chief.

19. Defendant No.4 was examined as DW.1 and he reiterated the written statement averments examination-in-chief and produced death certificate of Munishamappa marked as Ex.D1. Ex.D2 is the certified copy of the orders passed in the case No.6345/62-63. Ex.D3 is the RTC extract.

20. From the perusal of examination-in-chief, DW.1 admits regarding the execution of agreement of sale, but denies the consideration amount. He has deposed that consideration amount agreed was Rs.21,74,375/- and also - 16 - NC: 2024:KHC:37652 RSA No. 647 of 2013 admitted regarding having received the amount of Rs.2,05,000/- as advance amount from the plaintiff and admits about the execution of agreement of sale as per Ex.P1. In view of the admission of defendants, as they have agreed regarding the execution of Ex.P1 and receiving of advance amount of Rs.1,50,000/-, the plaintiff established the execution of agreement of sale by defendants in favour of the plaintiff. In order to establish that the plaintiff was/is ready and willing to perform his part of obligation, the plaintiff has also issued a legal notice dated 18.12.2006 and 08.06.2007 marked as Exs.P6 and P10 respectively, but the defendants refused to receive the legal notices issued by the plaintiff. The defendants failed to perform their obligation as per the terms and conditions of the Ex.P1. The plaintiff has proved that he was/is ready and willing to perform his part of contract, on the contrary, the defendants were not ready and willing to perform their part of contract. - 17 - NC: 2024:KHC:37652 RSA No. 647 of 2013

21. Though the trial Court has recorded a finding that the plaintiff has proved the execution of agreement of sale by the defendants, in favour of the plaintiff and also defendants received a sum of Rs.1,50,000/- as earnest money and executed an agreement of sale and also the plaintiff has proved that he was/is ready and willing to perform his part of contract. But the trial Court dismissed the suit of the plaintiff for specific performance of contract solely on the ground that if the suit is decreed for specific performance of contract, the defendants will be put to hardship. On the other hand, if the said relief is not granted no harm will cause to the plaintiff.

22. From the perusal of the written statement filed by the defendants, defendants have not pleaded in regard to the hardship, in case if the suit for specific performance of contract is granted, no issue was framed by the trial Court. when such plea is not raised in the written statement, the trial Court could not have entertained the plea. In order to consider whether the trial Court has - 18 - NC: 2024:KHC:37652 RSA No. 647 of 2013 rightly exercised the discretion, Section 20 of the Specific Relief Act, 1963, which reads as under:

20. Discretion as to decreeing specific performance.— (1)The jurisdiction decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. (2)The following are cases in which the court may properly exercise discretion not to decree specific performance:— (a)where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or (b)where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non- performance would involve no such hardship on the plaintiff; or - 19 - NC: 2024:KHC:37652 RSA No. 647 of 2013 (c)where the defendant entered into the contract under circumstances which though not rendering contract voidable, makes inequitable to enforce specific performance.

23. The Court while exercising the discretion under Section 20 of the specific Relief Act, the Court has to exercise judicial discretion under clause (b) of subsection (2) 20 of old Act, of Specific Relief Act, which provides that where the performance of contract which involves some hardship on the defendant which he did not foresee, where as his non performance which involves no such hardship on the plaintiff. The defendants have not pleaded regarding the hardship in the written statement. The Hon'ble Apex Court in the case of BHEEMANENI MAHA LAKSHMI VS. GANGUMALLA APPA RAO REPORTED IN AIR 2019 SC 3013 held that "The vendor sought to raise the plea of hardship for the first time before the Court and this Court did not permit the vendor raised such plea of hardship by observing that no plea as to the hardship if - 20 - NC: 2024:KHC:37652 RSA No. 647 of 2013 relief of specific performance was granted by the defendants". "Vendor in the written statement nor any issue was framed that the plaintiff/purchaser could be compensated in terms of the money in lieu of decree for specific performance, such plea cannot be entertained for the first time in the appeal by way of SLP, more so, when there are concurrent findings that the plaintiff was/is ready and willing to perform his part of the contract has been recorded by the lower courts. Therefore, the plea raised on behalf of the vendor on hardship cannot be permitted to be raised now, more particularly when no such plea was raised/taken in the written statement." Emphasis supplied

24. The said aspect was not considered by the courts below and committed an error in passing the impugned judgments. The trial Court has not properly exercised the discretion under Section 20 of Specific Relief Act. Even the first Appellate Court without properly - 21 - NC: 2024:KHC:37652 RSA No. 647 of 2013 considering the material on record has confirmed the judgment and decree passed by the trial Court. The judgments relied upon by the learned counsel for the defendants are not applicable to the present case in hand. There is no dispute with regard to the principles laid down in the aforesaid judgments. In view of the above discussion, I answer substantial question of law 1 and 2 in the negative.

25. Accordingly, I proceed to pass the following: ORDER The appeal is allowed. The impugned judgments and decrees passed by the courts below are hereby set aside. The suit of the plaintiff is decreed. The defendants are directed to execute the registered sale deed by receiving the balance consideration amount in favour of the plaintiff within 3 months from the date of certified copy of this judgment and further the plaintiff is directed to deposit balance - 22 - NC: 2024:KHC:37652 RSA No. 647 of 2013 consideration amount within a period of one month from the date of receipt of certified copy of this judgment. No order as to the costs. SD/- (ASHOK S. KINAGI) JUDGE SKS