Chamansan Mamadusab Ganajur vs Smt Rudravva

-1- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

DATED THIS THE 22ND DAY OF NOVEMBER, 2024

BEFORE

THE HON'BLE MRS JUSTICE K.S.HEMALEKHA

RSA NO. 5067 OF 2009 (DEC/INJ)

BETWEEN: SRI. CHAMANSAB MAMADUSAB GANAJUR AGE: 61 YEARS, OCC. AGRICULTURE, R/O. SULAMATTI ONI, HAVERI, TQ. AND DIST. HAVERI-581110. ... APPELLANT (BY SMT. PALLAVI PACHHAPURE FOR SRI. SRINAND A. PACHHAPURE, ADVOCATES) AND:

1. SMT. RUDRAVVA W/O. CHANNABASAYYA KARASHIDDAVARAMATH, AGE: 70 YEARS, OCC. HOUSEHOLD WORK, R/O. YALAKKI ONI, HAVERI, TQ. AND DIST. HAVERI-581110. Digitally signed by VISHAL VISHAL NINGAPPA NINGAPPA PATTIHAL 2. SMT. MALLAVVA PATTIHAL Date: 2024.12.06 10:09:34 +0530 W/O. SIDDAYYA MATURAMATH, AGE: 45 YEARS, OCC. HOUSEHOLD WORK, R/O. JEKINAKATTI, TQ. SHIGGAON, DIST. HAVERI-581110.

3. THE MANAGER KARNATAKA BANK LTD., BRANCH HAVERI, HAVERI-581110.

4. SRI. RAJU S/O. PARASAPPA SAVANUR, SINCE DECEASED BY HIS LRS.,

4A. SMT. SANGEETA W/O. RAJU SAVANUR, -2- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

AGE: 35 YEARS, OCC. HOUSEHOLD WORK, R/O. GOULI GALLI, HAVERI-581110, TQ AND DIST. HAVERI.

5. SRI. MALLIKARJUN S/O. PARASAPPA SAVANUR AGE: 38 YEARS, OCC. AGRICULTURE, R/O. GOULI GALLI, HAVERI-581110, TQ. AND DIST. HAVERI.

6. SRI. CHANDRAKANT S/O. PARASAPPA SAVANUR, AGE: 37 YEARS, OCC. AGRICULTURE, R/O. GOULI GALLI, HAVERI-581110, TQ. AND DIST. HAVERI.

7. SRI. MANJUNATH S/O. PARASAPPA SAVANUR, AGE: 32 YEARS, OCC. AGRICULTURE, R/O. GOULI GALLI, HAVERI-581110, TQ. AND DIST. HAVERI.

8. THE MANAGER, MAHESHWARI CREDIT CO-OPERATIVE SOCIETY LTD., HAVERI, TQ AND DIST. HAVERI-581110.

9. THE MANAGER, KARNATAKA VIKAS GRAMEENA BANK, HAVERI, TQ. AND DIST. HAVERI-581110. ... RESPONDENTS (BY SRI. N P VIVEKMEHTA, ADVOCATE FOR R1; SRI. HANUMANTHAREDDY SAHUKAR, ADVOCATE FOR R6; R2, R3, R4(A), R5, R7 TO R9 - NOTICE SERVED) THIS RSA IS FILED U/S.100 OF R/W ORDER 41 RULE 1 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 20.12.2008 PASSED IN R.A.NO.91/2006 ON THE FILE OF THE CIVIL JUDGE (SR.DN,), HAVERI, PARTLY ALLOWING THE APPEAL FILED AGAINST THE JUDGMENT AND DECREE DATED 27.07.2006 PASSED IN O.S.NO.145/1993 ON THE FILE OF THE ADDL. CIVIL JUDGE (JR.DN.) AND JMFC, HAVERI.

THIS APPEAL, COMING ON FOR DICTATION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: THE HON'BLE MRS JUSTICE K.S.HEMALEKHA -3- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

ORAL JUDGMENT

Plaintiff is before this Court in this regular second

appeal assailing the judgment and decree in R.A.

No.91/2006 dated 20.12.2008 on the file of the Civil Judge

(Sr.Dn.), Haveri (hereinafter referred to as the 'First

Appellate Court' for short) reversing the judgment and

decree in O.S. No.145/1993 dated 27.07.2006 on the file

of the Addl. Civil Judge (Jr.Dn.) & JMFC., Haveri

(hereinafter referred to as the 'trial Court', for short)

whereby, the First Appellate Court dismissed the suit

seeking relief of specific performance of contract and

directed refund of earnest money by the defendants to the

plaintiff.

2. Brief facts of the case are that:

Suit property is bearing R.S. No.296/1 measuring 7

acres 6 guntas (hereinafter referred to as the 'suit

property' for the sake of convenience). The original

defendant/Channabasayya agreed to sell the suit property

in favour of the plaintiff for a sum of Rs.22,000/- and -4- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

executed an agreement of sale in favour of the plaintiff

putting the plaintiff in possession of the suit property. That

one Shivayogappa Shivappa Havanagi had purchased

truck availing loan from the Karnataka Bank, Haveri

(i.e., defendant No.2). The said truck met with an accident

and as Shivayogappa could not repay the loan availed

from defendant No.2, defendant No.2 instituted a suit

against Shivayogappa, defendant No.1 and another. That

defendant No.2/Bank filed O.S. No.64/1989 came to be

decreed and execution was levied in Execution Petition

No.4/1991, plaintiff is not a party in the suit as well as in

the execution petition and the decree in O.S. No.64/1989

is not binding on the plaintiff. Further the case of the

plaintiff is that when the plaintiff requested the original

defendant to execute the sale deed, he mentioned that

after clearing the charge over the suit property, he will

execute the sale deed and accordingly, defendant No.1 has

executed the additional endorsement on 18.04.1988.

Inspite of agreeing to execute the sale deed by defendant

No.1 in favour of the plaintiff, defendant No.1 having not -5- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

come forward, the plaintiff issued a notice on 29.05.1991

calling upon defendant No.1 to execute the sale deed, and

as defendant No.1 did not come forward to execute the

sale deed, hence, present suit for specific performance of

contract.

3. During the pendency of the suit, the original

defendant died and his legal representatives were brought

on record as defendant Nos.1(A and B) and the legal

representatives of defendant No.1 filed the statement of

objections inter alia contending that the suit property is

attached property in O.S. No.64/1989 and that the

Execution Petition No.4/1991 is pending. Further that the

sale agreement is alleged to have been executed in the

year 1983 and the plaintiff has filed a suit in the year

1993, after the lapse of 10 years and that the suit of the

plaintiff is barred by limitation. The legal representatives

of defendant No.1 contented that defendant No.1 had

borrowed a sum of ₹2,000/- from the plaintiff for the

family necessity and the agreement entered was towards

the security of loan transaction and that the husband of -6- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

the defendant No.1(A) never agreed to sell the suit

property in favor of the plaintiff nor put the plaintiff in

possession of the suit property.

4. On the basis of the pleadings, the trial Court

framed the following issues:

(1) Whether the plaintiff proves that the propositus of deft.No.1(a) and (b) i.e., original deft.No.1 agreed to sell the suit property to the plaintiff and executed sale agreement on 23/4/1983 on receiving part consideration amount of Rs.21,000/-? (2) Whether the plaintiff proves that after executing the sale agreement, deft.No.1 put the plaintiff into possession of suit property on 23/4/1983?

(3) Whether the plaintiff proves that he is ready and willing to perform his part of contract from the day of sale agreement till this date? (4) Whether the plaintiff proves that the decree passed in O.S. No.64/89 is not binding on the plaintiff?

(5) Whether the deft.No.1(a) proves that the suit is barred by limitation?

(6) Whether the plaintiff is entitled for the reliefs claimed in the suit?

(7) What order or decree?

5. In order to substantiate their claim, the plaintiff

No.1 examined himself as PW1 and two witnesses as PW2 -7- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

to PW5 and marked documents at Exs.P1 to P15(a). On

the other hand, the defendant No.1(A) examined himself

as DW1 also examined two witnesses as DW2 and DW3

and marked documents at Exs.D1 to D5.

6. The trial Court based on the pleadings oral and

documentary evidence arrived at a conclusion that;

i) The plaintiff proves that the defendant No.1

agreed to sell the suit property to the plaintiff and

had executed an agreement dated 23.04.1983 on

receiving the part consideration of ₹21,000/-

ii) That the plaintiff proves after executing of the

sale agreement, defendant No.1 has put the plaintiff

in possession of the suit property.

iii) The plaintiff has proved his readiness and

willingness to perform his part of contract from the

date of agreement.

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

iv) The plaintiff has proved that the decree passed

in O.S. No.64/1989 is not binding on the plaintiff.

v) The defendant No.1(A) failed to prove that the

suit is barred by limitation and by the judgment and

decree.

7. The trial Court decreed the suit and held that

the plaintiff shall pay the market price of the suit property

as on the date of the filing of the suit as notified to the

Sub-Registrar, Haveri, by the Government by deducting

the earnest money of ₹21,000/- and defendant Nos.1(A

and B) shall execute the sale deed after receiving the

amount within 60 days, failure to execute the sale deed,

the plaintiff is at liberty to get the sale deed in his favour

in respect of the suit property in accordance with law.

Aggrieved, the defendants preferred an appeal before the

First Appellate Court. The First Appellate Court reversed

the judgment and decree of the trial Court and arrived at a

conclusion that without clearing of the loan and without

discharging the charge created over the property, the suit -9- NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

property cannot be sold in the favor of plaintiff and the

prior rights vests on the defendant No.2/Bank and the

plaintiff is not entitled to seek the relief of specific

performance and reversed the judgment and decree of the

trial Court, directed refund of earnest money. Aggrieved,

the plaintiff is before this Court in this regular second

appeal.

8. This Court on 25.02.2009 while admitting the

appeal has framed the following substantial questions of

law:

i) Whether the Lower Appellate Court was justified in reversing the judgment and decree passed by the trial Court and refusing the decree of specific performance by taking note of the judgment and decree passed in O.S. No.64/1989?

ii) Whether the Lower Appellate Court was justified in holding that the trial Court was not justified in granting the decree when the appellant herein was not a party to the transactions said to have been entered into by the proposed vendor and when it would not bind the appellant herein?

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

9. Heard the learned counsel appearing for the

appellant and the learned counsel appearing for the

respondents on the substantial questions of law framed by

this Court.

10. Learned counsel for the appellant submits that

the First Appellate Court has totally lost sight of the fact

that the agreement entered into between the plaintiff and

defendant No.1 is not disputed and there is no charge on

the defendant No.1 or any of his properties. The suit in

O.S. No.64/1989 was ultimately compromised between the

parties therein and there is no decree whether conclusive

or could be binding on the appellant herein, as the plaintiff

is not a party in O.S. No.64/1989. Moreover, the First

Appellate Court failed in totally considering that the suit in

O.S. No.64/1989 was preferred against one Shivayogappa

and defendant No.1 was arrayed as defendant No.2 in the

said suit as he was a surety towards the loan transaction

taken by Shivayogappa for his business purpose. Learned

counsel submits that the Execution Petition No.4/1991 has

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

been dismissed for non-taking steps on 25.02.1994 itself,

that the First Appellate Court proceeded to assume that

the charge on the suit schedule property is successful and

therefore, it cannot be sold. That the substantial question

of law framed by this Court needs to be answered in favor

of the appellant.

11. Per Contra, learned counsel appearing for the

respondents justified the judgment and decree of the First

Appellate Court and submits that the First Appellate Court

has rightly arrived at a conclusion that the plaintiff is not

entitle for specific performance of contract and refund of

the earnest money has been rightly ordered, the discretion

exercised by First Appellate Court under Section 20 does

not warrant any interference by this Court and the

substantial question of law needs to be answered against

the appellant.

12. This Court has carefully considered the rival

contentions urged by the learned counsel for the parties

and perused the materials available on record.

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13. O.S. No.64/1989 is filed by defendant No.2

against one Shivayogappa and defendant No.1. The said

suit in O.S. No.64/1989 was towards the recovery of a

loan availed by Shivayogappa from defendant No.2. The

First Appellate Court on the pretext that in O.S.

No.64/1989, the suit property has been attached, that the

Bank has charged over the said suit property for clearing

of the loan and without discharging the charge created

over the suit property, the property cannot be sold in favor

of the plaintiff is the reasoning assigned by the First

Appellate Court in dismissing the suit of the plaintiff for

relief of specific performance. The reasoning assigned by

the First Appellate Court is totally erroneous and

unacceptable for the sole reason that the First Appellate

Court has gone beyond the scope of pleadings and also the

ingredients that are necessary to prove in a suit for relief

of specific performance of a sale agreement.

14. The specific performance is a relief granted by

the Court to impose contractual obligations between the

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

parties. It is a remedy in performance as opposed to the

plain sounding in damages for the breach of contract

where pecuniary compensation is granted as a relief for

failure to carry out terms of contract. The well settled

criteria and principles for granting or denying specific

performance are as under;

i) Readiness and willingness

ii) Conduct unblemished

iii) Readiness must be shown throughout, up to the date of degree.

iv) It is not necessary that the plaintiff was

rendered tender of the money due under the

contract. Although, one of the factors showing

the readiness and willingness may be the ability

of the plaintiff to make payment that cannot be

a factor by itself to disentitle the plaintiff the

grant of relief.

v) The plaintiff must seek relief appropriately.

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

vi) Necessary parties to a suit for specific performance.

vii) The proper form of a degree.

viii) The limitation for action.

ix) The Court passing the decree retains

purport over the decree even after the decree is

passed.

15. The criteria set out for grant or denying of

specific relief of specific performance is stated supra. The

readiness and willingness is the primary concern of the

Court while granting or denying the specific performance.

The Apex Court in the case of Mehboob-Ur-Rehman

(Dead) through LRs Vs. Ahsanul Ghani1 has held that

notwithstanding substitution of Section 20 of the Act, the

position of law on all material aspects, such as essential

elements of readiness and willingness and other aspects

under un-amended Section 16 remains the same and it is

observed that, even following the amendment, the law 1 (2019) SCC 206

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

was to the effect that specific performance of a contract

could not be granted or enforced in favor of the person

who fails to prove that he has already performed or has

always been ready and willing to perform the essential

terms of contract which are to be performed by him, in

terms of which, the performance has been prevented or

waived by the other party. Bearing in mind the proposition

of law that the readiness and willingness has to be proved

by the plaintiff in the suit for specific performance, the

records are perused.

16. Issue No.3 was framed by the trial Court which

reads as under;

"Whether the plaintiff proves that he is ready and willing to perform his part of contract from the day of sale agreement till this date?"

17. The plaintiff averred that he was ready and

willing to perform his part of contract from the date of sale

agreement till the date of filing suit. To show his readiness

and willingness to perform the part of contract, Ex.P.3 is

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

produced by the plaintiff. Ex.P.3 is the permission granted

by the Assistant Commissioner to the plaintiff to purchase

the suit property as he was an agriculture labour at the

time and the permission was granted on 27.04.1984. The

plaintiff's case is that he requested the defendant No.1 to

come forward for execution of the sale deed. The

defendant delayed the execution of the sale deed on the

pretext of saying that the charge over the suit property is

being created. The defendant No.1 has executed an

additional endorsement on 18.04.1988 in addition to

Ex.P.1 - agreement of sale, the defendant stated that

there was a charge by the defendant No.2/Bank and as

such, he would execute the sale deed after clearing of the

encumbrance over the suit property. Ex.P.9 discloses that

the plaintiff and the defendant would bear the half

expenses each of the registration and the plaintiff and

defendants are acted together to complete the execution

of the sale deed. The sale consideration under Ex.P.1 was

₹22,000/- and the amount of ₹21,000/- is already paid

under the agreement of sale. The signature on the

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

agreement of sale by defendant No.1 is not disputed, what

is disputed according to them is that the agreement was

executed towards the loan transaction of ₹2,000/-.

18. There are no materials forthcoming in evidence

that any loan taken by the defendants to an extent of

₹2,000/- and the signature of defendant No.1 was

obtained on the blank paper by fraud and

misrepresentation. The plaintiff having established that he

was ready and willing to perform his part of contract,

which is evidenced at Ex.P.3 and Ex.P.1(g). The trial Court

arrived at a conclusion that the readiness and willingness

has been proved. The First Appellate Court reversed the

discretion exercised by the trial Court on the sole ground

that, there is a charge in respect of the suit property in

O.S. No.64/1989 and refused to grant the relief of specific

performance of contract and to grant or to refuse the

specific relief of performance, the Court should apply its

mind judicially and should not refuse specific performance

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

or grant specific performance only because it is entitled to

do so, or that there is another view possible.

19. The exercise of discretion under Section 20 of

the Specific Relief Act, 1963 (hereinafter referred to as

'the Act' for short) gives the trial Court significant

authority in determining whether to grant or deny specific

performance of a contract. However, this discretion is not

unlimited and must exercise judiciously, keeping in mind

the principles of justice, equity and good conscience. The

general rule is that appellate Court will not reverse the

trial Court's decision, unless the discretion has been

exercised in an arbitrary, capricious or unjust manner. The

interference with the trial Court's exercise of discretion is

only when there is any manifest error of law or fact. The

trial Court has ignored relevant consideration and taken

irrelevant factors into account and when the exercise is so

unreasonable or unjust that it results in miscarriage of

justice. The exercise of discretion under Section 20 of the

Act is not to be lightly interfered with by the appellate

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

Court and the appellate Court should not substitute its

own view for that of the trial Court, unless there is

manifest injustice or clear error in the exercise of

discretion. The law is well settled that the trial Court has

wide discretion under Section 20 of the Act to decide

whether grant or not to grant the specific performance and

this discretion subject to judicial review, but should only

be interfered with where there has been an abuse of

discretion or misapplication of law. The failure to exercise

discretion by trial Court properly would justify interference

by the appellate Court. The trial Court must exercise

discretion in granting specific performance by balancing

the equities and considering whether specific performance

of the contract is just and fair in the circumstances and

the appellate Court should not substitute their judgment

for that of the trial Court, unless there has been manifest

injustice or error in law. From the proposition of law, this

Court can safely arrive at a conclusion that the exercise of

discretion by the trial Court under Section 20 of the Act is

wide, but not unlimited. While appellate Court generally do

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NC: 2024:KHC-D:17068 RSA No. 5067 of 2009

not interfere with trial Court's discretion, they may do so

in cases where the discretion is unreasonable or manifestly

unjust manner and the discretion should be exercised

judiciously, considering the equities and ensuring that the

remedy of specific performance is appropriate based on

facts.

20. The First Appellate Court has totally misled

itself with facts that O.S. No.64/1989 was filed by the

Bank for recovery of its dues of the loan advanced to one

Shivayogeppa Havangi, who had obtained loan for the

purpose of purchasing a Truck for which, defendant No.1

was a surety, creating a charge on the property of the

defendant No.1 is only assumption by the First Appellate

Court and decree in O.S. No.64/1989 makes it clear that it

was the Truck which is hypothecated and amount in O.S.

No.64/1989 is otherwise recovered and E.P. No.4/1991 is

closed. The reasoning assigned by the First Appellate

Court in refusing the specific performance of contract is

totally erroneous without there being any finding to the

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effect that the exercise of discretion by the trial Court, is

unreasonable or manifestly unjust manner. On the other

hand, the perusal of the judgment of the trial Court, the

First Appellate Court has exercised its discretion in

granting specific performance by balancing the equities

and granting of specific performance is just and fair. In the

said circumstances, the interference by the appellate Court

by the reasons indicated in its judgment was unwarranted

making this Court to interfere and the substantial question

of law framed by this Court is answered in favor of the

appellant holding that the First Appellate Court was not

justified in reversing the judgment and decree passed by

trial Court and refusing the decree of specific performance

by taking note of the judgment and decree passed in O.S.

No.64/1989 and the same warrants interference.

Accordingly, this Court pass the following:

ORDER

(i) The Regular Second Appeal is allowed.

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(ii) The judgment and decree of the First Appellate Court is hereby set aside and the judgment and decree of the trial Court stands confirmed.

Sd/-

(JUSTICE K.S.HEMALEKHA)

RH - till para 2;

PJ CT:PA LIST NO.: 1 SL NO.: 27