SRI. V .S ARAVINDAN v. SMT. PARVATHAMMA

1 hereinafter referred to as ‘the Trial Court’ for short - 3 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

For the sake of convenience and easy reference, the parties are referred to as per their rankings before the Trial Court.

It is the case of the plaintiff that the defendants are the owners of the suit schedule property having acquired the same through a gift deed dated 18.10.2007. Defendant No.1 is the owner and having title over the suit property and defendant Nos.2 to 4 are the sons and daughter of defendant No.1. It is stated that the defendants entered into an agreement with the plaintiff for sale of the suit property for a total sale consideration amount of Rs.12,00,000/- and an advance amount of Rs.10,00,000/- was paid. Accordingly, an agreement of sale dated 11.05.2011 was executed; therefore, the plaintiff paid 85% of the total sale consideration amount to the defendants, but the defendants have not come forward to execute the registered sale deed. Hence, the plaintiff was constrained to file a suit for specific performance of contract. - 4 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

The defendants entered into appearance and filed a written statement denying the execution of the agreement of sale. It is contended by the defendants that they have not entered into agreement of sale with the plaintiff for sale of the property and have not received amount from the plaintiff. Hence, the defendants have totally denied the execution of agreement of sale and thus, pray to dismiss the suit.

Based on the pleadings, the Trial Court has framed the following issues:

Whether plaintiff proves that defendants have executed an agreement of sale dated 11-05-2011 in favour of plaintiff in respect of suit property?

2. Whether plaintiff proves that the sale consideration of the suit land in agreed at Rs.12,00,000/- (Twelve Lakhs only)?

3. Whether plaintiff proves that defendants received amount Rs.10,00,000/- (Ten Lakhs only) on the date of agreement dated 11-05-2011 as part sale consideration amount? - 5 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

4. Whether plaintiff is ready and willing to perform his part of contract?

5. Whether defendants prove that suit of the plaintiff is barred by limitation?

Whether plaintiff is entitled for the reliefs of specific performance of contract?

What decree or order?

6. In order to prove the case, the plaintiff is examined as PW-1 and got another witness examined as PW-2 by producing documentary evidence as Exs.P-1 to P-

5. On behalf of the defendants, defendant No.4 is examined as DW-1 and got marked documentary evidence as Exs.D-1 and D-2.

7. The Trial Court, after appreciating the evidence on record dismissed the suit by holding that the plaintiff had failed to prove that the defendants had executed agreement of sale dated 11.05.2011. Further held that the plaintiff had failed to prove that he had paid the total sale consideration amount of Rs.12,00,000/- and an advance amount of Rs.10,00,000/- to the defendants. Further, it is - 6 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR held that the plaintiff was never ready and willing to perform his part of the contract and also held that the suit was barred by limitation. Accordingly, the Trial Court denied the relief of grant of decree of specific performance of contract.

The reasons assigned by the Trial Court after appreciating the evidence on record and more particularly upon considering Ex.P-1-original agreement of sale held that it is not executed. Further, based on the said finding, it is held that the plaintiff has failed to prove that he has paid advance consideration amount of Rs.10,00,000/-. Thus, dismissed the suit.

Being aggrieved by the judgment and decree passed by the Trial Court, the appellant/plaintiff has preferred this instant Regular First Appeal by raising various grounds in the memorandum of appeal.

Learned counsel appearing on behalf of the appellant/plaintiff submitted that in the appeal, the - 7 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR appellant/plaintiff has filed I.A.No.1/2023 under Order VI Rule 17 read with Section 151 of CPC making a prayer for refund of advance amount. Hence, the learned counsel appearing on behalf of the appellant/plaintiff submitted that he has confined this appeal insofar as refund of the earnest amount is concerned, without questioning decree dismissing the suit for specific performance of contract. Therefore, the learned counsel appearing on behalf of the appellant/plaintiff has confined this appeal only to the consideration of refund of the earnest amount.

Learned counsel appearing on behalf of the respondents/defendants submitted that they have also addressed arguments insofar as the refund of the earnest amount is concerned. Hence, the present appeal is confined insofar as considering the refund of the earnest amount. Therefore, the judgment and decree insofar as dismissing the suit for claiming specific performance is confirmed and this appeal is confined only insofar as refund of earnest amount is concerned. - 8 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

Further submitted that an application amendment seeking refund of the earnest amount can be filed at the initial stage of the proceedings and also in the appeal; therefore, he prays to allow the application and appeal enabling the appellant/plaintiff to make a claim for refund of the earnest amount. Further, he has confined his argument insofar as proof of Ex.P-1-agreement of sale is concerned. Further submitted that Ex.P-1 is the agreement of sale, which proves that the defendants have executed agreement of sale and put their respective signatures, but the Trial Court wrongly appreciated Ex.P-1-agreement of sale and came to the conclusion that Ex.P-1 is not proved. Further, it is argued that upon considering Ex.P-1- agrement of sale, it is found to be in a quite natural way and at the end of the written lines, the defendants have put their signatures and the defendants have not disputed the signatures found in Ex.P-1-agreement of sale; hence, Ex.P-1-agreement of sale is proved. - 9 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

Further, it is submitted that the defendants have taken contention that they have put their signatures on blank sheets of paper, which is not correct and it is argued with reference to the original agreement of sale that at the end of the page after last line of the written text, the defendants have put their signatures. It is further contended that as argued by the defendants, if there were any signatures taken on blank paper, then the written typed text could have been super imposed/overlapped, but that is not found upon perusing Ex.P-1-sale deed; therefore, Ex.P-1 is found to be in a natural way and since the defendants have put their signatures on agreement of sale; therefore, agreement of sale is proved.

Further, it is submitted that when execution of agreement of sale is proved then the contents there also are proved. In the agreement of sale, there is a clause of making payment of an advance amount of Rs.10.00 lakhs and the same was received by the defendants. Therefore, it is submitted that the plaintiff has proved that he has - 10 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR paid an advance amount of Rs.10.00 lakhs to the defendants and the defendants have received it. Therefore, it is submitted that by allowing the application filed for amendment of seeking refund of the earnest amount, grant a decree of refund of the advance amount.

Further, it is submitted that the relief of claiming refund of earnest amount is not barred by limitation as per Article 22 of the Schedule to the Limitation Act, 1963 (hereinafter referred to as the ‘Act’ for short). Further, it is submitted that after dismissal of the suit by the trial Court dated 13.03.2023, from that date onwards, the plaintiff is entitled to refund of the earnest amount. For the first time on that date, the right of claiming refund amount was accrued. Therefore, it is submitted that as per Article 22 of the Act, the claim of refund of the earnest amount is within the period of limitation. Hence, prays to allow the appeal in-part by granting decree of refund of the earnest amount. - 11 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

On the other hand, learned counsel appearing the respondents/defendants submitted defendants have not received an advance amount of Rs.10.00 lakhs from the plaintiff and since the trial Court has held that Ex.P1- Agreement of Sale is not proved, there is no question of making refund of the earnest amount. Further, it is submitted that the plaintiff has taken signature of the defendants on the blank stamp papers. Therefore, the defendants are not liable to repay the earnest amount.

Further, it is submitted that claiming refund of earnest amount is barred by limitation and in this regard, learned counsel has filed a memo of the dates and events for computation of limitation. It is submitted that though the application for amendment seeking relief of refund of earnest amount is allowed, but that prayer is barred by limitation. Hence, he prays to dismiss the appeal. - 12 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

Upon hearing the arguments by both sides counsel, the following points would arise for consideration: i) Whether, circumstances case, application filed for amendment seeking relief of refund of earnest amount is liable to be allowed? ii) Whether, circumstances of the case, defendants prove that the relief claimed by the plaintiff for refund of earnest amount is barred by limitation? iii) Whether, the plaintiff is entitled to relief of refund of earnest amount from the defendants?

Considering the Ex.P1-Agreement of Sale which is original in nature, the trial Court held that the plaintiff has failed to prove the execution of agreement of sale. It is the contention of the defendants that they put signature on the blank stamp papers. Considering the question of execution of agreement of sale upon re-appreciating the - 13 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR evidence on record, the typed text on the agreement of sale is found to be in natural way before putting signature of defendants on it. Ex.P1-Agreement of Sale is contained totally eight pages from page Nos.1 to 8. The signatures of the defendants found immediately after the last line of typed text. There is no space found in between last line of typed text and signatures of the defendant No.1. If there are any chances of obtaining signature of the defendants on the blank bond paper, there could have been chances of over imposition or over lapping of the signature on the typed text but that is not found in Ex.P1-Agreement of Sale. Also considering the last page of Agreement of Sale i.e., page No.8, immediately after the typed text, the signature of defendants are found along with witnesses. Therefore, Ex.P1 is found to be having executed and defendants have put signature after typing text on it. Therefore, the execution of sale is found to be proved. Though the defendants have contended that they put signatures on the blank bond papers, it is presumed that - 14 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR after reading content and documents only the defendants have put signature on the agreement of sale. In this regard, learned counsel for the appellant/plaintiff has placed reliance on the judgment of the Hon’ble Supreme Court in the case of Bihar State Electricity Board, Patna and others vs. M/s. Green Rubber Industries and others2 at page 23 reads as follows: ” 23.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxx. It is settled law that a person who signs a document which contains contractual terms is normally bound by them even though he has not read them, even though he his ignorant of the precise legal effect.”

Further, the judgment relied on by the learned counsel appearing for the appellant/plaintiff in the case of Shankerappa vs. Sushilabai3 is not applicable to the 2 (1990) 1 SCC 731 3 AIR 1984 KAR 112 - 15 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR present case, having difference in factual matrix involved in the case.

As learned counsel appearing appellant/plaintiff submitted that the appellant/plaintiff has filed appeal only so far as refund of earnest amount is concerned, the appeal is considered only for the purpose of considering the refund of earnest amount. Further, it is submitted that the appellant/plaintiff is not aggrieved by dismissal of the suit for specific performance. Therefore, dismissal of suit for specific performance is confirmed and the same does not call for any interference from this Court.

Now, the present appeal is to be considered only with respect of refund of earnest amount. After dismissal of the suit for specific performance, the appellant/plaintiff has filed an application for amendment under Order VI Rule 17 read with Section 151 of CPC praying to relief of refund of earnest amount. In the plaint, - 16 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR the plaintiff has not claimed alternative relief for refund of earnest amount, in case, the decree for grant of specific performance is denied. Therefore, the trial Court is correct in not granting any decree for refund of earnest amount as per Section 22 of the Specific Relief Act, 1963. Section 22 of the Act read as under:

22. Power to grant relief for possession, partition, refund of earnest money, etc.— (1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for— (a) (b) possession, or partition and separate possession, of the property, in addition to such performance; any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused. (2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief. (3) The power of the court to grant relief under clause (b) of sub-section (1) shall be without prejudice to its powers to award compensation under section 21.

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Therefore, unless prayer for refund of earnest amount is made in the plaint, such relief of refund of earnest amount cannot be granted and it is specifically observed by the trial Court in its judgment.

Considering Section 22 of the Specific Relief Act, grant of relief of claiming refund of earnest amount can be made at any stage of proceedings including in the appeal. Therefore, the application filed for amendment is liable to be allowed. Accordingly, it is allowed. By allowing the application, now it is open for the plaintiff to canvass his arguments on the refund of the earnest amount.

Now, the question is whether the prayer of the plaintiff as per the amendment for claiming refund of the earnest amount is within the limitation period is question for consideration.

Therefore, the claim of refund of earnest amount in the present suit shall be within the period of 3 years. When the application filed for amendment of prayer - 18 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR is allowed, this relates back to the date of institution of the suit. The suit is filed on 15.02.2017. Therefore, the application filed for amendment is allowed, and then it dates back to as if having claimed the said relief from the date of institution of the suit but shall not be from the date of allowing the amendment application.

Article 54 of the Act stipulates as follows: Description of suit Period of Time from which Limitation period begins to run For specific performance Three years The date fixed for the of a contract performance, or, if no such date is fixed, when the plaintiff has notice refused. performance

Therefore, as per Section 22 of the Specific Relief Act read with Article 54 of Limitation Act for claiming refund of amount, the limitation period is three years and also for claiming relief of specific performance, as per Article 54 of Limitation Act, the period of limitation is 3 years from the date of institution of suit. Here in the appeal, since the plaintiff/appellant has not claimed the - 19 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR relief of grant of decree for specific performance and appeal is confined to the refund of earnest amount. Therefore, the right to initiate suit for the refund of earnest amount is reconsidered with reference to Section 22 of the Act.

The undisputed dates and events according to the present suit are as follows: DATE EVENT

11.05.2011 Execution of Agreement of Sale (Ex.P1)

10.11.2012 Expiry of the 18-month period stipulated for performance of the contract under the Agreement of sale at Ex.P1 (page – 4)

11.11.2012 Cause of action for specific performance/ refund accrued commenced on account of expiry of time period under Ex.P1.

10.11.2015 Expiry of time (Three years) for filing of Suit for specific performance or refund under Article 54 of Schedule to Limitation Act.

21.10.2016 Legal notice issued by the Plaintiff through counsel (Ex.P2)

15.02.2017 Institution of O.S.No.66/2017 - 20 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR

The agreement of sale was executed on

11.05.2011. Therefore, 18 months period stipulated for performance of contract under the said agreement of sale expires on 10.11.2012. Further, the cause of action to file a suit for specific performance/refund of earnest amount accrued commenced on 11.11.2012 for the first time. Here at this stage, the cause of action for claiming refund of earnest amount is only to be recorded and as above discussed, allowing application for amendment of claiming relief of earnest amount dates back to the date of institution of the suit. Therefore, the prayer for relief of refund of earnest amount is to be reckoned from the date

11.11.2012 on which date the cause of action arose for claiming refund of earnest amount. The three years period is lapsed on 10.11.2015. Considering the date of cause of action arose for filing the suit for both reliefs of specific performance and refund of earnest amount, here only concerned with refund of earnest amount as per Article 22 of the Schedule to the Limitation Act and as per the - 21 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR provision, the period of limitation is three years. The plaintiff has issued legal notice for the first time as against defendant No.2 only on 21.10.2016 and instituted suit on

15.02.2017. Therefore, for the plaintiff as per Article 22 of the Act, the right to claim refund first arose on 11.11.2012 and within a period of 3 years i.e., on or before

10.11.2015, the suit ought to have been instituted. But the plaintiff for the first time on 21.10.2016 has issued legal notice as per EX.P2 and instituted suit on

15.02.2017. Therefore, considering these dates and events, the relief claimed by the plaintiff for refund of earnest amount is found to be barred by limitation. As per Article 22 of the Act, unless there is an alternative relief of refund of amount is claimed, decree for refund of earnest amount cannot be granted. The relief of claiming refund by virtue of amendment as discussed above dates back to the date on which the suit is instituted. Therefore, the relief of claiming refund of earnest amount is found to be barred by limitation. Hence, the plaintiff is not entitled to refund - 22 - NC: 2026:KHC:28370 RFA No. 1164 of 2023 HC-KAR of the earnest amount and it is time barred. Therefore, the appeal is liable to be dismissed. Accordingly, my answer to points 1 and 3 in the negative and point No.2 is in the affirmative. In the result, I proceed to pass the following: ORDER