On a plain reading of Ex.P67, it is clear that the defendants were not expected to do anything except to execute a sale-deed, the moment the remaining sum of Rs.55 lakhs was paid to them. It is the case of plaintiffs that they had personally met Yogananda several times demanding him to execute a sale deed by receiving the balance consideration. It is further pleaded that he dodged to execute a sale deed on one pretext or the other. No evidence is forthcoming with regard to the dates on which demand was made. If he was really taking time on one pretext or the other, no prudent man would keep quiet. Prudence demands that such a purchaser would find such reasons as only ruse and would suddenly get a legal notice issued.
21. Agreement is dated 13.09.2008. six months time fixed in Ex.P67 expired on 13.03.2009. No notice was got issued. Suit was filed on 20.08.2010 i.e., almost one year five months after the lapse of six months time stipulated in Ex.P67. Yogananda died on 01.06.2010 i.e., long after the expiry of six months.
22. What is argued before this court by Sri. R.L. Patil, learned counsel is that time is not the essence of contract in respect of immovable properties and hence suit so filed on 20.08.2010 is in time as it is within three years as mandated in Part I of Article 54 of the Limitation Act.
Karnataka High Court
Sri M V Prema Chandra vs Smt Sarojamma on 14 October, 2014
Being aggrieved by the rejection of their prayer to grant the relief of specific performance, the plaintiffs of an original suit bearing O.S.No.87/2010 which was pending on the file of the Court of Senior Civil Judge, Madikere, have filed this appeal under Section 96 of CPC. Respondents are the defendants in the said suit.
2. Facts leading to the filing of this appeal are as follows:
Defendants are the absolute owners in possession of 6.55 acre in Sy.No.81 of Bychanahalli Village of Somwarpet Taluk, Kodagu District. The defendant No.1 is the mother of remaining defendants and wife of one late B.V.Yogananda. The said Yogananda and the defendants, according to the plaintiffs, had agreed to sell 6.11 acres in out of total extent of 6.55 acres in Sy.No.81 to the plaintiffs for a total consideration of Rs.1.5 crores and in this regard, executed an agreement 4 RFA NO.1890/2012 of sale on 13.09.2008. It is the further case of the plaintiffs that on 13.09.2008 itself, defendants received a sum of Rs.46 lakhs through three cheques i.e.,
1) Rs.25 lakhs drawn on I.O.B, Mysore, 2) Rs.13 lakhs drawn on Karnataka Bank Limited, Somwarpet, 3) Rs.8 lakhs drawn on Corporation Bank, Somwarpet and Rs.49 lakhs in cash as advance and agreed to execute a regular sale deed within six months from 13.09.2008 by receiving the balance consideration.
3. Inspite of several oral demands, B.V.Yogananda went on postponing to execute the sale deed on one pretext or the other and died on 01.06.2010. Hence, plaintiffs waited for sometime so that the defendants would come forward to execute the sale deed. Finally the plaintiffs approached the defendants demanding them to execute the sale deed by receiving the sale consideration. Since the defendants did not comply with their demand, a suit was got filed seeking the relief 5 RFA NO.1890/2012 of specific performance alternatively, for refund of advance amount of Rs.95 lakhs with interest thereon along with costs of the suit.
4. The defendants appeared before the Court and denied the very execution of the agreement of sale, receipt of advance amount of Rs.95 lakhs and readiness and willingness of the plaintiffs. According to the defendants, Sri Yogananda had deposited a sum of Rs.50 lakhs with the plaintiffs with a specific understanding that they would refund the deposits to him as and when required, as the plaintiffs and Yogananda were good friends. According to them, no amount was paid in cash to them and the three cheques issued were towards the refund of amount deposited with the plaintiffs. They have called upon the plaintiffs to strictly prove the contents of the plaint. According to them, the averment that plaintiffs had paid Rs.45 lakhs to them has been specifically denied. Sri Yogananda 6 RFA NO.1890/2012 died on 01.06.2010 due to prolonged terminal illness of cancer of oesophagus and the suit is stated to be engineered by one A.M.Nanjappa. The alleged consideration is stated to be grossly inadequate since as the lands are converted lands. With these pleadings they had requested to dismiss the suit.
5. On the basis of the above pleadings, following issues came to be framed:
1. Whether the plaintiffs prove that, by sale agreement dated 13.09.2008 the Defendants have agreed to sell the suit schedule property to the Plaintiffs for Rs.1,50,00,000/- and as part of sale consideration amount received a sum of Rs.95,00,000/- on the very same day, agreed to receive the balance sale consideration amount at the time of execution of sale deed?
2. Whether the Plaintiffs prove that, they are/were ready and willing to perform their part of contract?
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3. Whether the Plaintiffs are entitled for the specific performance of contract as prayed for?
4. Whether the Plaintiffs are entitled for the alternative relief of refund of advance amount of Rs.95,00,000/- as prayed for?
5. Whether the Defendants prove that, the alleged agreement dated 13.09.2008 is nothing but forged document?
6. What order or decree?
6. On behalf of the plaintiffs, in all five witnesses have been examined and 95 exhibits have been got marked. Sri K.V.Harisha, is examined as DW1 and has got marked six exhibits. Ex.C1 is the Court summons of DW1.
7. After hearing the arguments and evaluating the oral and documentary evidence, the learned Judge has answered issues 1 and 4 partly in the affirmative and remaining issues in the negative. Consequently, suit is decreed directing the defendants to repay a sum of 8 RFA NO.1890/2012 Rs.46,00,000/- with interest at 8% p.a. thereon with no costs payable to the plaintiffs. It is this judgment and decree which is called in question on various grounds as set out in the appeal memo.
8. We have perused the records and have heard the learned counsel appearing for the parties.
9. Learned Senior counsel Sri R.L.Patil appearing for the plaintiffs has argued that overwhelming evidence is placed on record to substantiate the execution of the agreement of sale, advance amount of Rs.95 lakhs paid thereunder and the crucial aspect of readiness and willingness. He has further argued that inadequacy of consideration is no ground to reject the relief of specific performance. The Trial Court is stated to have adopted a wrong approach to the real state of affairs.
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10. Per contra, the learned counsel for the defendants have submitted their arguments supporting the impugned judgment and decree.
11. Following points arise for our consideration:
1. Whether the learned Judge is justified in doubting the payment of Rs.49 lakhs in cash to the defendants and late Yogananda on 13.09.2008?
2. Whether negative finding on issue No.2 relating to readiness and willingness is justified?
3. Whether any interference is called for and if so to what extent?
Reasons:
Point No.1
12. Since the defendants have taken up a specific stand that agreement of sale marked as Ex.P67 as a forged document, issue No.5 is framed casting burden 10 RFA NO.1890/2012 on the defendants. The defendants have virtually admitted their signatures found in Ex.P67. They have not disputed the receipt of three cheques issued for a total sum of Rs.46 lakhs favouring Sri. Yogananda and encashment thereof. The defendants' case is that Yogananda and plaintiffs were good friends and therefore Yogananda had deposited a sum of Rs.50 lakhs with the plaintiffs and therefore three cheques were issued for a total sum of Rs.46 lakhs out of the sum of Rs.50 lakhs deposited with the plaintiffs. Defendants have not been able to probabalize the same.
13. What is argued by the learned Senior Counsel Sri.R.L.Patil, appearing for the appellants is that the learned Judge could not have rejected Ex.P67 insofar as it relates to the payment of Rs.49 lakhs in cash when reliance is placed on Ex.P67 for payment of Rs.46 lakhs by way of three cheques. We are unable to accept this contention. Mere proof of a document as an agreement 11 RFA NO.1890/2012 of sale would not be sufficient. Plaintiffs who have relied upon Ex.P67 were expected to prove that Ex.P67 is an out and out agreement of sale.
14. Ex.P67 is an unregistered agreement of sale typed in English on four Stamp Papers purchased from State Bank of Mysore, Vontikoppal branch, Mysore City, on 12.09.2008. The agreement is dated 13.09.2008. Schedule property is described as agricultural land situated by the side of Cauvery river.
15. PW-1 Sri.Prema Chandra is the first plaintiff. He has specifically admitted that there are 70 RCC houses in the schedule property and approximately their value was about Rs.35 to Rs.40 lakhs. He has feigned ignorance about the suggestion that the entire suit property has become a layout named after Yogananda. This material fact is suppressed in Ex.P67 as well as by the plaintiffs. At the same time, PW-1 has 12 RFA NO.1890/2012 admitted that suit land comprises of converted land also. According to him, prior talks took place at Mysore and Ex.P67 was drafted at Mysore and later on, the vendors subscribed their signatures in Somwarpet. This aspect of the matter has been considered by the Trial Court.
16. Admittedly, plaintiffs were Income Tax assesses. If they could show payments of Rs.46 lakhs made through cheques in their Assessment, it is ununderstandable as to how they could make payment of Rs.49 lakhs in cash. If really the plaintiffs had encashed any Fixed Deposits to pay a sum of Rs.49 lakhs in cash, nothing came in their way to pay the same through cheques also. This part of the evidence of PW-1 has been assessed on the basis of broad preponderance of probabilities. PW-1 has admitted that he does not have any document to show that either himself or plaintiff No.2 had held cash.
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17. Learned Judge has made detailed analysis in paragraph 30 at pages 33 and 34 of the judgment about the inability of the plaintiffs to trace the source of Rs.49 lakhs alleged to have been paid in cash. Hence it is relevant to extract the following paragraph 30 of the judgment:
"30. It is the arguments learned advocate for the defendants that the plaintiffs have failed to show the source of these amounts paid under various cheques.
Exs.P.71 to 75 are the Xerox copy of F.D.Receipts which contains the signatures, but it does not refer who are the authorized officer of IOB where the Fixed Deposit said to have been kept, and Ex.P.71 stands in the name of Jamuna, W/o Premachandra, Ex.P.72 stands in the name M.P.Vijetha, D/o Premachandra, Exs.P.73 to 75 stand in the name of Premachandra, and total amount of Fixed Deposit Rs.50,00,000/-, but Exs.P71 to 73 were matured on 05.07.2007, when that is so, question of borrowing loan on these 14 RFA NO.1890/2012 Fixed Deposits by the Plaintiff No.1 does not arise. Exs.P.74 and 75 reveals that these Fixed Deposits are matured on 15.12.2008. So, it is very clear that these Fixed Deposits were not in existence as on the date of Ex.P.67 or prior to it. Further of course, back of Ex.P.74 reveals that the said Fixed Deposit was renewed on 13.05.2009, but the amount of said Fixed Deposit was Rs.10,87,713/-. So, it is hard to believe that he and his wife had amount of Rs.25,00,000/- on these Fixed Deposits. Even PW.3 has not stated anything about the sanction of loan on F.D. amount. So, these are falsifies the evidence of PW.1 that amount of Rs.25,00,000/- paid by him through Cheque No. 424662 on 13.09.2008 was the amount received by him by obtaining loan on his own Fixed Deposit amounts."
18. On reassessment of the evidence, we are of the considered opinion that though the plaintiffs have been able to prove the execution of Ex.P67, they have not been able to prove the payment of Rs.49 lakhs in cash 15 RFA NO.1890/2012 on 13.09.2008 and further they have failed to prove Ex.P67 as an out and out agreement of sale. Hence point no. 1 is answered in the affirmative. Point No.2
19. Section 16(C) of Specific Relief Act, 1963 mandates that whoever wants the equitable relief of Specific performance of the contract, must plead and prove that he or she has been ready and willing to perform his part of the contract. This assumes greater significance when time within which the contract is to be performed, is mentioned. In Ex.P1, there is a specific clause fixing 6 months as the time within which the plaintiffs were expected to get a sale-deed by paying the balance consideration. Seven clauses are found in Ex.P67 and they are quite relevant. Hence they are reproduced below:-
16 RFA NO.1890/2012
NOW THEREOF THIS AGREEMENT TO SELL
WITNESSTH AS FOLLOWS
1. The VENDORS shall sell and the purchasers shall purchase the schedule property for fixed sale consideration amount of Rs.1,50,00,000/- (Rupees one crore fifth lakhs only).
2. The PURCHASERS has on this day paid the VENDORS a sum of Rs.95,00,000/- (Rupees Ninety Five Lakhs only) in the following manner. a. By cheque bearing No. 424662 Rs. 25,00,000/- dated 13.9.2008 drawn on IOB Jayalakhmipuram Br. Mysore favoring B.V. Yogananda b. By Cheque bearing No. 228209 Rs. 13,00,000/- dated 13.9.2008 drawn on Karnataka Bank, Somwarpet Br.
Favoring B.V. Yogananda c. By Cheque No. 036047 Rs. 8,00,000/- dated 13.9.2008 drawn on Corporation Bank, Somwarpet Br.
Favoring B.V. Yogananda d. By Cash paid to B.V.Yogananda Rs. 49,00,000/-
_______________ Total Rs. 95,00,000/-
_______________ In Total Rs.95,00,000/-(Rupees ninety five lakhs only) being earnest Money/Part Sale Price of the Schedule Property the receipt of which sum the VENDORS does hereby admits and acknowledge before the undersigned 17 RFA NO.1890/2012 witness and acquit the PURCHASERS from the payment of the same.
3. THE VENDORS hereby declares that they will register the property to the PURCHASERS by executing sale deed within six month time from the date of this agreement after receipt of balance sale consideration amount of Rs.55,00,000/-(Rupees fifty five lakhs only)
4. THE VENDORS have on this day delivered relevant Xerox copies of the documents of title pertaining to schedule property.
5. THE VENDORS shall handover all the original documents of title at the time of registration of sale deed.
6. It is agreed between the parties that the cost of registration, stamp papers etc in respect of schedule property shall be borne by the PURCHASERS.
7. In the event of VENDORS falling to execute the sale deed in favour of the PURCHASERS then the PURCHASERS shall have all the rights to approach the court of Law under specific performance of this contract and enforce the sale proceedings at the cost of the VENDORS.
20. On a plain reading of Ex.P67, it is clear that the defendants were not expected to do anything except to execute a sale-deed, the moment the remaining sum of Rs.55 lakhs was paid to them. It is the case of 18 RFA NO.1890/2012 plaintiffs that they had personally met Yogananda several times demanding him to execute a sale deed by receiving the balance consideration. It is further pleaded that he dodged to execute a sale deed on one pretext or the other. No evidence is forthcoming with regard to the dates on which demand was made. If he was really taking time on one pretext or the other, no prudent man would keep quiet. Prudence demands that such a purchaser would find such reasons as only ruse and would suddenly get a legal notice issued.
21. Agreement is dated 13.09.2008. six months time fixed in Ex.P67 expired on 13.03.2009. No notice was got issued. Suit was filed on 20.08.2010 i.e., almost one year five months after the lapse of six months time stipulated in Ex.P67. Yogananda died on 01.06.2010 i.e., long after the expiry of six months.
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22. What is argued before this court by Sri. R.L. Patil, learned counsel is that time is not the essence of contract in respect of immovable properties and hence suit so filed on 20.08.2010 is in time as it is within three years as mandated in Part I of Article 54 of the Limitation Act.
23. We are unable to agree with Sri.R.L.Patil, learned counsel, on this aspect. Schedule property is described as an agricultural land in Ex.P67. Reality is that substantial portion of the land had already been converted into non-agricultural purpose prior to executing Ex.P67. Apart from this 60 to 70 RCC houses were already in existence in the suit land as on the date of executing Ex.P67. The approximate value, even as per the very admission of PW-1, was valued between Rs.35 to 40 lakhs. Land in question is in Coorg District and is by the side of Cauvery river. Entire Coorg District is known for attracting tourists from different 20 RFA NO.1890/2012 parts of the country. Such being the case, the property in question is very much potential to be used for attracting tourists. As such plaintiffs, were expected to exercise their right of specific performance at the earliest without giving room for any laches. It need not be reiterated that laches disentitle the plaintiffs to have the relief of specific performance which is an equitable relief. Learned Judge has dealt with all these aspects meticulously. Hence, we are the considered opinion that the learned Judge is justified in answering Issue No. 2 in the negative. Accordingly, we answer Point No. 2 in the affirmative.
24. In view of the above findings, we have to uphold the decree granted to the plaintiffs to get back Rs.46 lakhs with interest. In the light of the inability of the plaintiffs to prove the payment of Rs.49 lakhs in cash and in the light of transaction not being a 21 RFA NO.1890/2012 commercial transaction, awarding interest at 8% p.a. on the Trial Court is justified. The Learned Judge should have awarded proportionate costs in view of Section 35 of the Code of Civil Procedure. Awarding costs is a civil suit is a rule and rejection of the same needs to be supported by good reasons. Hence, we are inclined to grant the proportionate costs throughout.
ORDER Appeal is allowed in part. Judgment and decree of the Trial Court rejecting the relief of specific performance and ordering refund of Rs.46 lakhs with interest at 8% p.a. thereon is upheld.
But the appeal is allowed in part to the limited extent of awarding proportionate costs of the Trial Court as well as this Court. Thus, the defendants are liable to pay proportionate costs on Rs.46 lakhs throughout.
Till the payment of the entire decreetal amount
these shall be a charge on the suit property. If
22 RFA NO.1890/2012
permission is required to alienate the suit property, the defendants can move the Trial Court with necessary application and in such an event, the Trial Court is at liberty and pass appropriate orders keeping in mind the decreetal amount due to the plaintiffs.
Sd/-
JUDGE Sd/-
JUDGE JT/DM CT-RH
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